Mayo et al v. Thompson

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
STEVE COLBY THOMPSON, 	No. 10-10415
Debtor(s).
______________________________________/
STEPHEN and SHARON MAYO,
Plaintiff(s),
v. 	A.P. No. 10-1054
STEVE COLBY THOMPSON,
Defendant(s).
_______________________________________/
Memorandum After Trial
_________________
In 2002, plaintiffs Stephen and Sharon Mayo hired Thompson Design Architects (“TDI”) to
undertake a substantial renovation of their home in Mill Valley, California. Chapter 7 debtor and
defendant Steve Thompson was a licensed architect and principal of the corporation. He was also a
former local planning commissioner and a member of a regional design review board.
Mistakes were evidently made, and the Mayos sued Thompson in state court for breach of
contract and negligence. In the spring of 2011, a jury returned a verdict in the Mayo’s favor for
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Entered on Docket
January 23, 2012
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 10-01054 Doc# 42 Filed: 01/21/12 Entered: 01/23/12 15:06:09 Page 1 of 3

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$287,500.00. Thompson then filed his bankruptcy petition.1
Even grossly incompetent work does not result in a nondischargeable debt. The Mayos now
argue that Thompson defrauded them and their judgment is accordingly nondischargeable pursuant to
§ 523(a)(2) of the Bankruptcy Code. They argue that Thompson falsely represented to them that his
son, who worked with Thompson at TDI, was a licensed architect when in fact he was not. The Mayos
assert that if they had known the truth they would not have hired TDI. The court finds that the Mayos
have not met their burden of proof on these assertions, and in fact have not proved a single element of
fraud.
First, the Mayos have not proved a false statement. They rely on their contract, which includes
a curriculum vitae for Thompson and his son; nowhere does it say that the son was also a licensed
architect. He did not need to be. He had a degree in architecture. There was nothing in the contract
materials that was false, nor did Thompson make any false representations in any way to the Mayos.
Second, there was no intent to defraud. To the extent that the statements in the contract
materials were misleading (which the court does not find), they were manifestations of a father’s pride
in his son’s accomplishments and were not made with fraudulent intent.
Third, the court does not find the Mayos’ testimony that they relied on the son’s status as a
licensed architect to be credible. The court finds it much more likely that they selected TDI because of
Steve Thompson’s experience in local government. It was undisputed that up until litigation was
commenced the Mayos never met the son or had even spoken to him on the phone. The son was
essentially completely uninvolved in the Mayos’ project.
Lastly, there is no nexus between the supposed misrepresentation and the Mayos’ damages.
Not only was the son uninvolved in the project, but even if he had been there was no evidence that the
mistakes would not have been made if the son was a licensed architect.
For the foregoing reasons, the Mayos shall take nothing by their complaint, which will be
1Actually, he filed two petitions; the first was dismissed.
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Case: 10-01054 Doc# 42 Filed: 01/21/12 Entered: 01/23/12 15:06:09 Page 2 of 3

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dismissed with prejudice. The court would ordinarily award Thompson his costs of suit, but it is not
inclined to do so in this case because Thompson filed two bankruptcy petitions, causing the Mayos to
have to file two bankruptcy complaints, and because Thompson’s attorney failed to comply with the
basic provisions of the court’s pretrial order. If Thompson believes that he is entitled to costs
notwithstanding these offenses, he shall file an appropriate motion. Otherwise, he shall submit a form
of order which merely dismisses the complaint. The court strongly suggests the latter.
This memorandum constitutes the court’s findings and conclusions pursuant to FRCP 52(a) and
FRBP 7052.
Dated: January 21, 2012
SAlan Jaroslovsky
U.S. Bankruptcy Judge
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Case: 10-01054 Doc# 42 Filed: 01/21/12 Entered: 01/23/12 15:06:09 Page 3 of 3