Rimal v. Wibisono et al

1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
(Greenbelt Division)
In re:
Gunawan Kuntho Wibisono and
Melania Dessy Pasetyani, 	Case No. 07-12377
Debtors. 	Chapter 7
Shaman Rimal,
Plaintiff, 	Adv. Pro. No. 07-486
v.
Gunawan Kuntho Wibisono and
Melania Dessy Pasetyani,
Defendants.
MEMORANDUM OF DECISION
Before the Court are the Amended Complaint for Non-Dischargeability of Debt Pursuant
to 11 U.S.C. § 523 (a)(2) (Docket No. 9) filed by Plaintiff Shaman Rimal (“Rimal”), and the
Answer to Amended Complaint (Docket No. 11) filed by Defendants Gunawan Kuntho
Wibisono (“Wibisono”) and Melania Dessy Pasetyani (“Pasetyani”). The Court conducted a trial
Date signed March 16, 2009
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of this adversary proceeding on February 18, 2009. For the reasons set forth in this
Memorandum of Decision, the Court will enter an order ruling that Wibisono’s undisputed debt
to Rimal, in the amount of $106,666.66, is nondischargeable under 11 U.S.C. § 523(a)(2)(A) and
will dismiss the complaint against Pasetyani.
STATEMENT OF FACTS
A. The Parties
The parties primarily involved in the transaction were Rimal and Wibisono. Their
spouses were only tangentially involved.
Rimal emigrated to this country from Nepal. He works as a waiter and, though he has
some education in agriculture, he has no background in or understanding of business, accounting
or finance.
English is not Rimal’s primary language and he speaks it only haltingly. At times his
testimony was difficult to follow. At other times it was clear to the Court that he answered a
question completely opposite from what he intended: for example, by saying “yes” in response to
a question that contradicted his earlier testimony. Nevertheless, the Court was able to understand
the substance of his testimony. The Court finds that Rimal was forthcoming in his testimony and
was a sincere and highly credible witness despite the limitations on his ability to speak and
understand English.
Wibisono also is an immigrant to the United States. At all times relevant to this
adversary proceeding he worked as a cable installer. At the time of the transaction that is the
subject of this action, he worked for Mid-Atlantic Cable Company (“Mid-Atlantic”). Other than
one accounting class, he has very little background in business, accounting or finance. He has no
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experience in creating a business and little experience in managing a business. English is his
second language also, although he spoke it better than Rimal.
Rimal’s wife, Jaya, works as a bank teller and had little involvement in the transaction
other than to meet Wibisono when he visited their home. During that visit she heard Wibisono’s
pitch for the investment that is the subject of this action.
Wibisono’s spouse, Melania Dessy Pasetyani, had no material involvement in the
transaction.
B. The Transaction
In December 2006, Wibisono met with Rimal at Johnny Rockets, a restaurant where
Rimal worked as a waiter. The meeting was arranged by a mutual friend. Wibisono presented
Rimal with a business plan for Casatelcom Incorporated (“Casatelcom”) and asked Rimal to
make an investment in Casatelcom.
The business plan described Casatelcom as a Comcast cable installation and repair
contractor that would begin operations in January 2006. It stated that the company’s goal was to
generate $1.2 million of revenues in 2006, and the projections reflected revenue of $1.2 million
and net income of $132,596 for 2006.
Wibisono prepared the business plan from software he obtained over the internet. The
projections and other financial information he used for the business plan were based on financial
information for Mid-Atlantic, which he simply plugged into the software.
Wibisono asked Rimal to invest $1 million. When Rimal told Wibisono he didn’t have
anywhere near that kind of money to invest, Wibisono asked for $500,000, and then $250,000, as
a way of determining what level of investment Rimal could make in the business. At the end of
the meeting Rimal was not convinced to make an investment in Casatelcom.
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The parties continued their discussion regarding the proposed transaction on several
occasions: during at least one telephone call; in a meeting at the Mid-Atlantic offices; at the
office of an individual Wibisono identified as a lawyer; and at a meeting at the Rimals’ home
with Jaya Rimal present. During those discussions, Wibisono spoke glowingly about
Casatelcom’s business prospects. He said that he had obtained valuable subcontracts that would
enable Casatelcom to successfully commence operations immediately. He told Rimal the
company would earn $1.2 million in 2006. He tried hard to convince the Rimals to invest in
Casatelcom, and became more and more assertive in his efforts to convince Rimal to invest in
the company.
In order to induce Rimal to make an investment, Wibisono told Rimal during these
discussions that he, Wibisono, also would be investing in Casatelcom. Although Rimal initially
testified that Wibisono did not state that he would also invest in Casatelcom, Rimal appeared to
have been confused on that point. Rimal later made it clear that Wibisono told him that he,
Wibisono, would also invest in Casatelcom.
Wibisono also told Rimal that Casatelcom would hire Rimal as the Finance Treasurer at a
salary of $100,000 per year. The salary was to commence April 1, 2006. Wibisono had
Casatelcom business cards prepared for Rimal as “Finance Treasurer” of Casatelcom.
The finding that Wibisono made these latter two representations to Rimal – that
Wibisono would invest in Casatelcom and that Casatelcom would pay Rimal a salary of
$100,000 per year – was corroborated by the Limited Partnership Agreement of Casatelcom
Incorporated (the “Partnership Agreement”). The Partnership Agreement was prepared by
Wibisono from a form he obtained on the internet. 	It is a prime example of Wibisono’s lack of
business knowledge and it appears to have been prepared simply to aid Wibisono in convincing
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Rimal to make an investment in Casatelcom. First, according to its title, it is a limited
partnership agreement for Casatelcom, a corporation. Obviously corporations are governed by
their articles of incorporation and bylaws, and not limited partnership agreements. Second, much
of it makes little or no sense. For example, Article I, which is intended to provide the basic
agreement to enter into the partnership, provides:
The Parties agree to execute this agreement and hereby acknowledge for
good and valuable consideration receipt thereof [sic], it is the intention of
the Partners that this Agreement, or as they may be amended [sic], shall be
the sole Agreement is [sic] prohibited or rendered ineffective under the
laws [sic]. This Agreement shall be considered amended to conform to the
Act [sic] as set forth in the Codes [sic].
Partnership Agreement, Article I. The Partnership Agreement provides that Wibisono was to be
the general partner, and Rimal the limited partner. It further provides:
Each Partner shall contribute to the Partnership certain capital prior to or
simultaneously with, the execution of this Agreement. Each Partner shall
have made initial capital contributions in the following amounts:
Name of Partner: 	Value of Net Profits:
Gunawan K. Wibisono 	Eighty (80) percents
Shaman Rimal 	Twenty (20) percents
Id., Article II, ¶1. The Partnership Agreement also states:
2. SALARIES. “Limited Partner shall receive $100,000/ year paid in biweekly
increments for services rendered to the partnership except as specifically and first
approved by each of the partners.
Id., Article III, ¶2.
Although Rimal signed the Partnership Agreement, he did not understand it. However,
the Partnership Agreement corroborates Rimal’s testimony that Wibisono told Rimal that
Wibisono would invest in Casatelcom and that Casatelcom would pay Rimal a salary of
$100,000, since Wibisono put those very provisions in the Partnership Agreement.
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Ultimately, Rimal agreed to enter into the transaction, which took the form of a loan from
Rimal to Casatelcom in the amount of $95,000 (the “Loan”). The Loan was evidenced by a
promissory note dated February 18, 2006, payable to Rimal in the face amount of $100,000, at
8% interest. Wibisono prepared the note using a form he obtained on the internet. By the terms
of the note and agreement between Rimal and Wibisono, the Loan was going to be repaid in 36
equal monthly installments commencing April 1, 2006.
The Rimals took out a home equity loan to fund the Loan. They funded the Loan with
$55,000 on February 18, 2006, $20,000 on March 16, 2006, and $20,000 on March 27, 2006.
C. 	The Inevitable Collapse of Casatelcom.
Wibisono began operating Casatelcom shortly after the Rimals made the loan in February
2006. It did not survive 2006. In addition to the Rimals’ loan, Wibisono convinced other investors
to contribute a total of about $15,000 of additional funds. Casatelcom’s check register (Defendant’s
Exhibit 14) reveals that Wibisono used the Loan proceeds and these other funds to pay expenses
until he burned through the $110,000. 	Casatelcom ceased paying any meaningful business expenses
by August 2006. 	The total amount of revenue it collected was unclear, but the record established
the range was between zero (according to the tax returns) to a maximum of $8500 (according to
some internal business records). In any event, its revenue was de minimis.
Casatelcom was doomed to fail, and Wibisono knew or should have known that. First, it was
woefully undercapitalized. By his own testimony, Wibisono needed at least $300,000 to $500,000 in
capital; he initially told Rimal he needed $1 million. He obtained only the Rimal loan, which had to
be repaid, and the other lesser amounts described above of approximately $15,000. Thus, from the
outset, Casatelcom did not have sufficient cash or capital to survive more than the few months it in
fact operated.
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Second, Wibisono had neither the experience nor the knowledge to create and manage
Casatelcom. The business plan was a flight of fancy based simply on the actual results of Mid-
Atlantic, an operating company with substantial experience in the cable installation industry, and it
was prepared with little thought or understanding of how a start-up company could achieve Mid-
Atlantic’s level of success. Further, Wibisono lacked the knowledge and experience to start or
manage a business. For example, in an effort to obtain a contract, he bought a BMW SUV
(apparently in Casatelcom’s name). He testified that he could not remember the details, but he
thought it was purchased with a loan from Koons Ford. His purpose in buying it was to let a party
from whom he was seeking a contract use the BMW as “collateral” for the contract, even though the
BMW itself was subject to a lien. Casatelcom could not make the payments on the BMW and it
ultimately was taken back by the lienholder. The entire episode was wasteful, illogical, and dubious.
Third, the contracts Wibisono repeatedly told Rimal he had obtained proved to be of little
value, to the extent they existed at all. Wibisono presented three contracts as trial exhibits
(Defendant’s Exhibits 10, 11 and 12). None of these had been produced at the time of his
deposition. Defendant’s Exhibits 11 and 12 are not signed by the alleged counter-party to the
contract, and no revenue was ever generated from these alleged contracts. A contract with Jade
Telecom (Defendant’s Exhibit 10) generated approximately $6500 in total revenue, with the first
collection of $247 received by Casatelcom in April 2006, and the balance received in June and July
2006. See Defendant’s Exhibit 14, pp. 2-3.
Casatelcom made the first scheduled loan payment of $3,133.64 to Rimal on April 1, 2006.
Casatelcom also made a $1000 payment to Rimal in July 2006, and a $500 payment in August 2006.
No other payments were made.
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Rimal never received any salary payments from Casatelcom, nor did Wibisono ever
contribute any funds to Casatelcom.
CONCLUSIONS OF LAW
Rimal contends that his claim against Wibisono should be excepted from discharge
pursuant to both Sections 523(a)(2)(A) and (a)(2)(B). The Court concludes that Wibisono made
numerous misrepresentations to Rimal in order to obtain the Loan, at least the following of
which form the basis for a nondischargeability determination: (1) Wibisono also would invest in
Casatelcom; (2) Wibisono had obtained contracts that would enable Casatelcom to successfully
begin operations immediately and to earn a substantial profit in its first year; and (3) Casatelcom
would pay Rimal a salary of $100,000 to serve as chief financial officer and treasurer. The Court
further concludes that the other elements of Sections 523(a)(2)(A) have been met and, therefore,
the debt from Wibisono to Rimal should not be discharged. Because of this conclusion, the
Court need not address Rimal’s claims under Section 523(a)(2)(B). Finally, because there was
no evidence in the record that Pasetyani, Wibisono’s spouse, had any material involvement in the
transactions, made any representations, or even had knowledge of the matter, the Court will
dismiss the complaint as to her.
“The Bankruptcy Code has long prohibited debtors from discharging liabilities incurred
on account of their fraud, embodying a basic policy animating the Code of affording relief only
to an honest but unfortunate debtor.” Cohen v. De La Cruz, 523 U.S. 213, 217 (1998). This
policy is codified in Section 523, which provides in pertinent part:
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or
1328(b) of this title does not discharge an individual debtor from
any debt-
***
(2) for money, property, services, or an extension, renewal, or
refinancing of credit, to the extent obtained by-
(A) false pretenses, a false representation, or actual fraud, other
than a statement respecting the debtor's or an insider's financial
condition;
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11 U.S.C. § 523(a)(2)(A). While exceptions to discharge are narrowly interpreted to protect the
purpose of providing debtors a fresh start, it is equally important to ensure that “perpetrators of
fraud are not allowed to hide behind the skirts of the Bankruptcy Code.” Foley & Lardner v.
Biondo (In re Biondo), 180 F.3d 126, 130 (4th Cir. 1999). To prevail on a claim that a debt
should be excepted from discharge, a creditor must prove all the elements of Section 523(a)(2)
by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 291 (1991).
A. Obtaining Money, Property, Services or an Extension, Renewal or Refinancing
of Credit.
Section 523(a)(2) initially requires that the debt be “for money, property, services, or an
extension, renewal, or refinancing of credit,” and it does not except “simply any debt incurred as
a result of fraud but only debts in which the debtor used fraudulent means to obtain money,
property, services, or credit.” Nunnery v. Rountree (In re Rountree), 478 F.3d 215, 219 (4th Cir.
2007). “We hold that the plain language of 11 U.S.C. § 523(a)(2)(A) and the Supreme Court's
interpretations of that language require that the debtor must obtain something through fraud for
the exception to apply.” Id. at 223.
Here, this standard is readily met. Wibisiono obtained the Loan from Rimal. Receipt of
a loan of money meets the express terms of Section 523(a)(2): “ any debt for money…” Further,
although the Loan was made to Casatelcom, and not to Wibisono, Wibisono benefitted from the
Loan directly as he owned Casatelcom. Moreover, Wibisono has not disputed that he is
obligated to Rimal on the Loan. Without objection, Rimal requested the Court to take judicial
notice of Wibisono’s Schedules F and H, filed at Docket No. 1 in Wibisono’s bankruptcy case
(No. 07-12377). In Schedule F, Wibisono admits to owing a debt to Rimal in the amount of
$106,666.66, and the debt is not listed as contingent, unliquidated or disputed. See Docket No. 1
in Case No. 07-12377, p. 22. In Schedule H, Wibisono admits to being a co-debtor on
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Casatelcom’s obligations, including the obligation to Rimal. Id., p. 25. At trial, Wibisono did not
dispute that he owes the debt to Rimal.1
B. False Pretenses, False Representation or Actual Fraud.
If the threshold inquiry is answered affirmatively, namely, that Section 523(a)(2)(A)
applies to the subject debt, a plaintiff must still “prove four elements: (1) a fraudulent
misrepresentation; (2) that induces another to act or refrain from acting; (3) causing harm to the
plaintiff; and (4) the plaintiff's justifiable reliance on the misrepresentation.” Biondo, 180 F.3d at
134; Miller v. Cigna Ins. Co., 311 B.R. 57, 61 (D. Md. 2004). See also Spinoso v. Heilman (In
re Heilman), 241 B.R. 137, 149 (Bankr. D. Md. 1999) (finding that in order to sustain an action
under Section 523(a)(2)(A), the plaintiffs must prove: (1) that the debtor made a representation;
(2) that at the time the debtor knew the representation was false; (3) that the debtor made the
representation with the intention and purpose of deceiving the creditor; (4) that the creditor relied
on such representation; and (5) that the creditor sustained loss and damage as the proximate
result of the representation.); accord, Guaranty Residential Lending, Inc. v. Koep (In re Koep),
334 B.R. 364, 371-372 (Bankr. D. Md. 2005). Each of these elements will be addressed in turn.
1. 	Misrepresentation
Rimal must show that Wibisono made a fraudulent misrepresentation. “A
misrepresentation can be any words or conduct which produce a false or misleading impression
1 Wibisono’s failure to challenge this point is not particularly surprising. Generally, a corporate officer is not
responsible for the contractual debts of a corporation. See In re Pontier, 165 B.R. 797, 799 (Bankr. D. Md. 1994).
However, a corporate officer “may be held personally liable for his or her own fraudulent conduct committed on
behalf of the corporation which causes injury to another.” Id. See also In re Colodner, 147 B.R. 90, 95 (Bankr.
S.D.N.Y. 1992) (“As a 100 percent shareholder of IPM, the debtor had sufficient financial interest in IPM so that the
debt owed to the plaintiffs by IPM could qualify as money obtained by the debtor through fraud or false
representations for purposes of 11 U.S.C. § 523(a)(2)(A).”); In re Firestone, 26 B.R. 706, 714-15 (Bankr. S.D. Fla.
1982).
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of fact in the mind of another.” Koep, 334 B.R. at 372 (citing Kendrick v. Pleasants (In re
Pleasants), 231 B.R. 893, 897 (Bankr. E.D. Va. 1999)).
Wibisono made at least three misrepresentations to Rimal: (1) Wibisono also would
invest in Casatelcom; (2) Wibisono had obtained contracts that would enable Casatelcom to
successfully begin operations immediately and to earn a substantial profit in its first year; and (3)
Casatelcom would pay Rimal a salary of $100,000 to serve as its chief financial officer and
treasurer. Rimal’s testimony that Wibisono made misrepresentations (1) and (2) to Rimal is
corroborated by the fact that Wibisono put these provisions in the Limited Partnership
Agreement. See Findings of Fact, § B. And, of course, Wibisono had business cards prepared for
Rimal as “Finance Treasurer” of Casatelcom. Rimal’s testimony that Wibisono told him
Wibisono had obtained contracts is corroborated by the fact that Wibisono presented the three
“contracts” in evidence in an effort to establish that he had, in fact, met this representation.
2. Intent to Deceive
Next, a plaintiff must show that the Debtor made the misrepresentation with intent to
deceive.2 “Intent to deceive may be inferred by the circumstances, including whether the
defendant knowingly or recklessly made false representations, which she should know would
induce the plaintiff to rely on them.” Koep, 334 B.R. at 372.
Because direct proof of fraudulent intent is almost impossible to produce,
fraudulent intent can be inferred from circumstantial evidence. Additionally,
where a person recklessly makes false representations that the person knows or
should know will induce another to rely on it, intent to deceive may logically be
inferred. However, the recklessness must exceed negligence and rise to the level
of reckless disregard for truth.
Kahler, 187 B.R. at 513 (internal citations omitted).
2 The intent to deceive is akin to the intent to induce to act, the second required element of fraudulent
misrepresentation. Biondo, 180 F.3d at 134.
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In the course of deciding the appropriate level of reliance required by 11 U.S.C. §
523(a)(2)(A), the Supreme Court pointed out that “the substantive terms in § 523(a)(2)(A) . . .
refer to common-law torts . . . .” Field v. Mans, 516 U.S. 59, 69 (1995). “The operative terms in
§ 523 (a)(2)(A) . . . , ‘false pretenses, a false representation, or actual fraud,’ carry the acquired
meaning of terms of art. They are common-law terms, and . . . they imply elements that the
common law has defined them to include.” Id. (citations omitted). “At common law reckless
behavior was sufficient to support causes of action sounding in fraud or deceit.” Sundstrand
Corp. v. Sun Chemical Corp., 553 F.2d 1033, 1044 (7th Cir.), cert. denied, 434 U.S. 875 (1977).
In another case, the Seventh Circuit stated: “To prevail on a false pretenses claim [under 11
U.S.C. § 523(a)(2)(A)], the creditor must show that the debtor obtained the money through
representations which the debtor either knew to be false or made with such reckless disregard for
the truth as to constitute willful misrepresentation.” Matter of Sheridan, 57 F.3d 627, 635 (7 th
Cir. 1995).
Several other Circuit Courts of Appeal have also acknowledged that recklessness or
reckless behavior can satisfy the intent element of a § 523 (a)(2) claim. The Sixth Circuit has
stated that “a plaintiff proceeding under section 523(a)(2)(A) must demonstrate that the debtor
obtained money through a material misrepresentation that at the time the debtor knew was false
or made with gross recklessness as to its truth.” Brady v. McAllister (In re Brady), 101 F.3d
1165, 1172 (6th Cir. 1996) (quotation omitted). The Ninth Circuit Court of Appeals concluded
that “reckless conduct could be sufficient to establish fraudulent intent.” Household Credit
Services, Inc. v. Ettell (In re Ettell), 188 F.3d 1141, 1145 (9th Cir. 1999) (citing Anastas v.
American Savings Bank (In re Anastas), 94 F.3d 1280, 1286 (9th Cir. 1996) (“reckless disregard
for the truth of a representation satisfies the element that the debtor has made an intentionally
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false representation”)). And the Fifth Circuit has also acknowledged that recklessness can satisfy
the intent requirement under section 523(a)(2)(A): “An intent to deceive may be inferred from
reckless disregard for the truth or falsity of a statement combined with the sheer magnitude of the
resultant misrepresentation.” In re Acosta, 406 F.3d 367, 372 (5th Cir. 2005) (quotations and
citation omitted).
Here, Wibisono made the three representations knowing they were false or with such
reckless disregard for the truth as to constitute willful misrepresentation. With respect to
Wibisono’s representation that he would be investing in Casatelcom, Wibisono knew that he
would not do so. Wibisono knew whether he had the financial resources to make a meaningful
investment and, in fact, he never did make an investment.
Wibisono also knew that he could not retain Rimal as the chief financial officer and
treasurer of Casatelcom at a salary of $100,000 per year, or he made that representation with
reckless disregard for the truth. Rimal did not have the experience, education, knowledge or
English-language skills to serve in that capacity, and that fact is evident upon listening to him
speak and discuss business matters. Further Wibisono knew that Casatelcom did not have the
financial resources to pay Rimal $100,000 per year. That amount represented more than 90% of
the $110,000 of total funds that were invested in Casatelcom (including the Loan). Within thirty
days from the date Rimal made the Loan, Casatelcom would need the resources to begin paying
Rimal $8,333 per month in salary and $3,133.64 per month in Loan repayments. This
Casatelcom could not do, and it had no chance of doing so at the time Rimal made the Loan.
Casatelcom never paid a salary to Rimal, and it made only one scheduled payment on the Loan,
in April 2006.
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Finally, Wibisono knew, at the time he made the representations to Rimal, that the
“contracts” he had obtained would not enable Casatelcom to successfully begin operations
immediately and to earn a substantial profit in its first year, or he made those representations
with reckless disregard for the truth. Two of the alleged contracts are not even signed by the
counter-party and never generated any revenue for Casatelcom. See Findings of Fact, § C. The
Court does not find that these “contracts” were bona-fide agreements with customers who would
pay for Casatelcom’s services. The one signed contract generated approximately $6500 in total
revenue, with the first collection of $247 received by Casatelcom in April 2006, and the balance
received in June and July 2006. No other revenues were generated from that contract. On this
record, Wibisono knew, or should have known, that these “contracts” would not enable
Casatelcom to successfully begin operations immediately and to earn a substantial profit in its
first year.
3. Causation
Next, a plaintiff must show that harm resulted as a proximate cause of the
misrepresentation. “It is axiomatic that in the context of a claim for exception to discharge under
Section 523(a)(2)(A), the harm or damage is the provision of credit.” Biondo, 180 F.3d at 135.
Here, Rimal’s testimony established that Wibisono’s representations in fact induced him to make
the Loan, and that testimony satisfies the causation element of a § 523(a)(2)(A) action.
4. 	Reliance
Finally, a plaintiff must show that he relied on the misrepresentation. In Field v. Mans,
516 U.S. 59 (1995), the United States Supreme Court stated that a plaintiff must show justifiable
reliance rather than reasonable reliance to prevail under § 523(a)(2)(A). Justifiable reliance does
not mean that the plaintiff's “conduct must conform to the standard of the reasonable man.
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Justification is a matter of the qualities and characteristics of the particular plaintiff and the
circumstances of the particular case, rather than of the application of a community standard of
conduct to all cases.” Id. at 71 (quoting Restatement (Second) of Torts (1976) § 545A,
Comment b). “[A] person is justified in relying on a representation of fact although he might
have ascertained the falsity of the representation had he made an investigation.” Id. at 70
(internal quotation marks omitted). “[T]he plaintiff is entitled to rely upon representations of
fact of such a character as to require some kind of investigation or examination on his part to
discover their falsity, and a defendant who has been guilty of conscious misrepresentation cannot
offer as a defense the plaintiff's failure to make the investigation or examination to verify the
same.” Id. at 72 (quoting 1 F. Harper & F. James, Law of Torts § 7.12, pp. 581-583 (1956)).
Nonetheless, a plaintiff is “required to use his senses, and cannot recover if he blindly relies upon
a misrepresentation the falsity of which would be patent to him if he had utilized his opportunity
to make a cursory examination or investigation.” Mans, 516 U.S. at 71 (quoting Restatement
(Second) of Torts (1976) § 541, Comment a).
Rimal did not blindly enter the transaction without doing any due diligence or making
any investigation. Rimal was not convinced Wibisono’s proposal was a good investment after
the parties’ initial meeting at Johnny Rockets. After at least one phone call between the two,
Rimal went to Wibisono’s office at Mid-Atlantic in an effort to learn about the cable installation
business and to see Mid-Atlantic’s financial data. There he met with others whom Wibisono said
would be involved in Casatelcom. Rimal also went with Wibisono to meet with an individual
Wibisono described as a lawyer, who was identified at trial only as “McGuire.” McGuire told
them that the promissory note must be notarized. Rimal took significant comfort in believing
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that a lawyer was involved and providing advice that would protect the investment.3 Rimal did
not agree to make the investment until after Wibisono told him that he (Wibisono) also would be
investing in Casatelcom, that Wibisono had obtained contracts and could begin operations
immediately, and that Casatelcom would pay Rimal a salary of $100,000. Given Rimal’s limited
understanding of English, and his near-total lack of business or financial acumen, his reliance on
Wibisono’s representations was justified.
CONCLUSION
For the foregoing reasons the Court finds in favor of Plaintiff, Shaman Rimal, on Count I
of the Amended Complaint, and will enter an order ruling that Defendant Wibisono’s undisputed
debt to Rimal, in the amount of $106,666.66, is nondischargeable under 11 U.S.C. §
523(a)(2)(A). Further, the Court will dismiss the complaint as to Defendant Pasetyani.
Copies to:
Shaman Rimal
c/o The Burns Law Firm
6303 Ivy Lane – Suite 102
Greenbelt, MD 20770
John D. Burns, Esq.
6303 Ivy Lane – Suite 102
Greenbelt, MD 20770
Gunawan Kuntho Wibisono
Melania Dessy Pasetyani
11128 Stillwater Ave.
Kensington, MD 20895
3 Other than telling them the promissory note should be notarized, it is not altogether clear what other advice
McGuire provided to Rimal or Wibisono, or whether McGuire was, in fact, a lawyer. He clearly did not draft or
review the Limited Partnership Agreement, which does not meet the minimum standards of competency of the legal
profession, even leaving aside the obvious fact that it is a limited partnership agreement for a corporation. See
Findings of Fact, § B. Nevertheless, Rimal, with his level of education and lack of sophistication, took great
comfort in believing an attorney was involved.
Case 07-00486 Doc 33 Filed 03/16/09 Page 16 of 17

17
William C. Johnson, Jr., Esq.
1229 15th St. NW
Washington, DC 20005
Chapter 7 Trustee
United States Trustee
End of Order
Case 07-00486 Doc 33 Filed 03/16/09 Page 17 of 17