King v. McCarthy

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UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re:
BO DUWAIN McCARTHY,
Debtor.
____________________________________
DR. CARL KING,
Plaintiff,
v.
BO DUWAIN McCARTHY,
Defendant.
Case No. 2:12-bk-40506 ER
Chapter 7
Adv. No. 2:12-ap-02542 ER
MEMORANDUM OF DECISION AFTER
TRIAL
Date: October 7, 2013
Time: 9:00 a.m.
Place: Courtroom 1568
On October 7, 2013, the Court conducted a trial in this
adversary proceeding. Appearances were as set forth on the
record. For the reasons set forth fully below, the Court awards
judgment in favor of Debtor.
I
FACTUAL BACKGROUND
Plaintiff is a clinical psychologist and a contract
employee with Valley College. Plaintiff’s spouse is a Deputy
FILED & ENTERED
NOV 06 2013
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	gonzalez
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Attorney General for the State of California. Plaintiff and his
spouse retained Debtor to assist in the building of a house.1
Plaintiff’s spouse testified at trial that when she and
Plaintiff fell behind in payments to Debtor, they executed a
promissory note (“Note”) in favor of Debtor. Although no party
testified regarding the date of the execution of the Note, and
no copy of the Note was identified, it appears that the Note was
executed in 2003. Plaintiff’s Trial Brief at 2. Both Plaintiff
and his spouse testified that the Note was payable upon the
issuance of a certificate of occupancy. Such a certificate was
necessary in order to obtain a loan to pay off the Note.
On January 13, 2011, Plaintiff and his spouse met with
Debtor and his spouse at a Denny’s restaurant upon Debtor’s
request. Plaintiff and his spouse testified that after
approximately twenty-five minutes of pleasantries:
Debtor showed them a copy of a receipt indicating that
Debtor had pawned certain jewelry, which he wanted to
retrieve;
Debtor stated that he knew that Plaintiff and his spouse
had the money to pay him, and Debtor demanded a $6,000
payment;
Debtor showed them a document which included a copy of a
check from Plaintiff to Debtor in the amount of $500 dated
November 23, 2010, and which had the handwritten notations:
1 The Court notes that the record is sparse as to exact dates of
certain underlying events, such as when Debtor was first
retained by Plaintiff and his spouse, and when Plaintiff (and
presumably his spouse) executed a promissory note.
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balance $19,000.00, and a figure for an average daily
balance;
Debtor further stated that he had a contact at Plaintiff’s
bank, JPMorgan Chase Bank (“Chase”), and knew Plaintiff had
a fourteen year relationship with Chase and had the ability
to obtain a loan to pay Debtor;
Debtor further stated that he had connections in the media
through which he could obtain media coverage that Plaintiff
and his spouse were rich, but were not paying him; and
Debtor finally stated that if he was not paid, he would
picket Plaintiff’s home, Valley College and the State
Attorney General’s Office with messages that Plaintiff and
his spouse were dishonest liars and were rich but would not
pay him.
Both Plaintiff and his spouse further testified that they saw
the document which had the copy of the check and the balance
information, but that Debtor kept this document and did not
produce it in discovery. Neither Plaintiff nor his spouse have
seen this document since the meeting at Denny’s. In addition,
they testified that Debtor’s demeanor was hostile and outside
the bounds of professionalism. After the meeting, Plaintiff and
his spouse waited in the parking lot for Debtor and his spouse
to leave, because Plaintiff’s spouse did not want Debtor to see
that she was going to pick up their children.
Following the meeting at Denny’s, Plaintiff went online to
confirm the balance figures which Debtor showed him. Plaintiff
checked the balance information for the period from the date of
the check and several days thereafter, and found that the
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balance amount which Debtor showed them was “pretty close” to
those online.
Plaintiff also contacted Chase and learned that a branch
manager, Lori Marchalk (“Marchalk”), had accessed his account,
but that she was no longer with the bank. Plaintiff was not
told, however, that Marchalk accessed his account on her last
day with the bank. Marilyn Harris, an employee of and custodian
of records for Chase, testified at trial that Chase’s records
show that Marchalk accessed Plaintiff’s account on November 30,
2010. See Plaintiff’s Exhibits 6 and 7. Blair Feivou, a
District Manager for Chase, testified at trial that pursuant to
Chase’s privacy policy, customers and non-customers of Chase
cannot access an average daily balance without the account
holder’s authorization.
Subsequent to the meeting at Denny’s, Debtor sent Plaintiff
emails to which Plaintiff responded. The emails from Debtor
continued to refer to media disclosure, picketing and
Plaintiff’s banking relationship and information, and also
continued to ask for money. Plaintiff’s Exhibits 2 and 3.
Plaintiff eventually paid Debtor $3,000.00, even though
Plaintiff believed that the event triggering payment of the Note
(i.e., the issuance of a certificate of occupancy) had not yet
occurred.
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Plaintiff testified that he felt threatened by Debtor’s
statements made at the meeting at Denny’s and in the subsequent
emails. Plaintiff contacted an attorney through his employee
assistance program, and stated that he was constantly anxious.
In addition, Plaintiff’s employment contract with Valley College
was “coming up” presumably for renewal. He had difficulty
sleeping, bad dreams, a hard time concentrating, an upset
stomach and was grinding his teeth. However, Plaintiff further
testified that he did not seek any treatment for the foregoing,
which subsided after a couple of months.
II
DISCUSSION
Plaintiff seeks a nondischargeability judgment pursuant to 11
U.S.C. § 523(a)(6) based on claims against Debtor for invasion
of privacy and civil extortion. Prior to deciding the
nondischargeability issue, the Court must first determine the
validity of Plaintiff’s privacy and extortion claims against
Debtor and his damages, if any. See, Gill Distribution Centers,
Inc. v. Banks (In re Banks), 225 B.R. 738, 745(Bankr. C.D.Cal.
1998)(In determining the dischargeability of a debt, a court
must consider two distinct issues: (1) the establishment of the
debt itself, and (2) the nondischargeable nature of such debt.).
//
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A. Plaintiff has not established a claim for invasion of
privacy.
In order to prevail in an invasion of privacy action based on
intrusion into private matters, a plaintiff must prove:
(1) intrusion into a private place, conversation or
matter, (2) in a manner highly offensive to a
reasonable person. ‘To prove actionable intrusion,
the plaintiff must show the defendant penetrated some
zone of physical or sensory privacy surrounding, or
obtained unwanted access to data about, the plaintiff.
The tort is proven only if the plaintiff had an
objectively reasonable expectation of seclusion or
solitude in the place, conversation or data source.’
Folgelstrom v. Lamps Plus, Inc., 195 Cal.App.4th 986, 992
(2011) (citations omitted)
In the instant case, Plaintiff alleges that Debtor invaded
his privacy when Debtor allegedly obtained information regarding
the balance and average daily balance in Plaintiff’s bank
account with Chase. However, the following is the only
evidence submitted by Plaintiff in support of this claim:
Plaintiff and his spouse’s testimony that Debtor showed
them a paper which purportedly had written figures
representing the balance and average daily balance of one
of Plaintiff’s bank accounts at Chase;
Plaintiff’s testimony that after the meeting at Denny’s,
he checked the account balance online around the date of
the copy of the check (November 23, 2010), which was also
on the paper containing the balance amounts, to several
days after, and confirmed that the balance amount on the
paper was “pretty close” to the actual balance amount;
Plaintiff and his spouse’s testimony that Debtor told them
at the meeting at Denny’s that Debtor had a contact at
Chase who gave Debtor the account information, and told
Debtor that Plaintiff could get a loan to repay Debtor
based on Plaintiff’s long term relationship with Chase;
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Debtor’s deemed admissions that at the meeting at Denny’s,
he told Plaintiff the following: that Plaintiff had
sufficient funds in his account to pay Debtor, that one of
the figures on the paper represented Plaintiff’s bank
account balance when Debtor accessed the information, that
the other figure represented the average daily balance,
and that Debtor knew someone at Chase who gave him the
account information.
Testimony of a Chase representative (Marilyn Harris) that
an investigation disclosed that Marchalk, a Chase branch
manager, had accessed Plaintiff’s account on November 30,
2010, which was also Marchalk’s last day with Chase.
The foregoing only indicates that Plaintiff claims that Debtor
showed him and his spouse a paper, which was not produced at
trial and which neither Plaintiff nor his wife has seen since
the meeting with Debtor on January 13, 2011. This paper
allegedly had figures for the balance and average daily balance
of Plaintiff’s account at Chase, which Plaintiff testified that
he did not write down. Notwithstanding, Plaintiff testified
that he remembered these alleged balance amounts, confirmed them
online and found that they were “pretty close” to the balances
for the period from date of the check (November 23, 2010) to
several days later. It is unclear, however, how Plaintiff knew
to check the balance information for the period stated,
especially since there is no evidence of the dates of the
balance figures allegedly on the paper.
In addition, the Chase representative testified that a branch
manager, Marchalk, accessed Plaintiff’s account on November 30,
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2010, which was her last day with Chase. However, Plaintiff did
not prove any connection between Debtor and Marchalk. Moreover,
Debtor’s deemed admissions establish only that Debtor told
Plaintiff that the figures on the paper represented the balance
and average daily balance of his bank account, and that Debtor
knew some unidentified person at Chase who gave him this
information.
The foregoing does not establish that Debtor actually
gained access to Plaintiff’s bank account, and thereby intruded
into Plaintiff’s privacy. There is no evidence that Debtor
contacted an identified Chase representative, who gave him
access to Plaintiff’s account and/or balance information for a
specified period. At best, the record only indicates that
Debtor may have had Plaintiff’s balance information,2 but it does
not establish how Debtor may have obtained such information
and/or that Debtor invaded Plaintiff’s privacy. Consequently,
the Court finds that Plaintiff has not established an invasion
of privacy claim.
B. Plaintiff has not established a claim for civil extortion.
Courts have acknowledged that “California has recognized a
civil cause of action for the recovery of money obtained by the
wrongful threat of criminal or civil prosecution, whether the
2 The Court, however, makes no such finding.
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claim is denominated as ‘extortion, menace or duress.’” Monex
Deposit Co. v. Gilliam, 666 F.Supp.2d 1135, 1136 (C.D.Cal.
2006); TaiMed Biologics v. Numoda Corp., 2011 WL 1630041 *5
(N.D.Cal. 2011); Padgett v. City of Monte Sereno, 2007 WL
7758396 *19 (N.D.Cal.). In the instant case, there are no
allegations and/or evidence that Debtor threatened Plaintiff
with civil or criminal prosecution. Rather, Plaintiff claims
that Debtor threatened to picket his home and his and his
spouse’s respective workplaces, and to obtain media coverage of
Plaintiff’s non-payment of the amounts due Debtor.
The court in Padgett found no extortion where there was no
threat of civil or criminal prosecution, even though there was a
threat of disclosure of criminal history. The court noted that
the plaintiffs therein had been criminally prosecuted prior to
the threat. Id. Moreover, the Supreme Court of California has
emphasized that not all “rude, aggressive, or even belligerent
prelitigation negotiations, . . . that may include threats to .
. . publicize allegations of wrongdoing, necessarily constitute
extortion.” Flatley v. Mauro, 39 Cal.4th 299, 332 (2006).
Consequently, because the Plaintiff has not established that
Debtor threatened him with prosecution of any kind, the Court
finds that Plaintiff has no claim based on Debtor’s alleged
civil extortion under California law.
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Since Plaintiff has not established a claim against Debtor
based on an invasion of privacy or civil extortion, it is not
necessary for this Court to determine the issue of
nondischargeability pursuant to 11 U.S.C. § 523(a)(6).
III
CONCLUSION
Based on the foregoing, the Court awards judgment in favor
of Debtor in this adversary proceeding. The Court shall prepare
a judgment consistent with this Memorandum of Decision.
###
Date: November 6, 2013
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NOTICE OF ENTERED ORDER AND SERVICE LIST
Notice is given by the court that a judgment or order entitled (specify) MEMORANDUM OF
DECISION AFTER TRIAL as entered on the date indicated as “Entered” on the first page of this
judgment or order and will be served in the manner indicated below:
I. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) Pursuant to controlling
General Order(s) and Local Bankruptcy Rule(s), the foregoing document was served on the
following person(s) by the court via NEF and hyperlink to the judgment or order. As of
Novemer 6, 2013 the following person(s) are currently on the Electronic Mail Notice List for
this bankruptcy case or adversary proceeding to receive NEF transmission at the email
address(es) indicated below.
Richard G Flanagan flanhint@socal.rr.com
Alison R Kalinski akalinski@pldlawyers.com
Sam S Leslie (TR) sleslie@trusteeleslie.com,
sleslie@ecf.epiqsystems.com;trustee@trusteeleslie.com
United States Trustee (LA) ustpregion16.la.ecf@usdoj.gov
Service information continued on attached page
II. SERVED BY THE COURT VIA U.S. MAIL: A copy of this notice and a true copy of this judgment or
order was sent by U.S. Mail to the following person(s) and/or entity(ies) at the address(es)
indicated below:
Bo Duwain McCarthy
909 W. Suffolk Ave.
Montebello, CA 91016
Service information continued on attached page
III. TO BE SERVED BY THE LODGING PARTY: Within 72 hours after receipt of a copy of this
judgment or order which bears an AEntered@ stamp, the party lodging the judgment or order will
serve a complete copy bearing an AEntered@ stamp by U.S. Mail, overnight mail, facsimile
transmission or email and file a proof of service of the entered order on the following person(s) and/or
entity(ies) at the address(es), facsimile transmission number(s) and/or email address(es) indicated
below:
Service information continued on attached page
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