TERRY L. MYERS, Chief Judge.
Brian and Sharon Depue, and Brian Depue as the personal representative of the estate of his brother, Kenneth Depue, ("Plaintiffs") brought these adversary proceedings against chapter 7
Cox filed a voluntary chapter 7 petition on September 11, 2009, commencing his case. Richardson and his wife filed a voluntary joint chapter 7 petition on September 23, 2009, commencing their case. In each case, a deadline was set for § 523(c) and § 727(a) complaints. Plaintiffs timely filed such complaints on December 4, 2009. The original complaints were later amended.
Plaintiffs' Amended Complaints raise issues under § 523(a)(2)(A), § 523(a)(2)(B), § 523(a)(4), and § 523(a)(6) as to dischargeability of debts to Plaintiffs, and further allege causes under several subsections of § 727(a) seeking to deny the discharges of all Debtor Defendants. Cox and the Richardsons raised and asserted counterclaims against Plaintiffs in each adversary proceeding, seeking recovery on the basis of fraud and defamation (the "Counterclaims").
The underlying disputes have much in common, and the Court ordered the two adversary proceedings jointly tried. See Fed.R.Civ.P. 42(a) (incorporated by Fed. R. Bankr.P. 7042). That trial occurred on July 26, 27 and 28, 2011. All matters were taken under advisement at the close of post-trial briefing on September 15, 2011. This Decision constitutes the Court's findings of fact and conclusions of law in each adversary proceeding. Fed. R. Bankr.P. 7052.
Design Air, Inc., an Idaho corporation, was owned and managed by Brian and Ken Depue. It provided heating, ventilation and air conditioning (HVAC) services and equipment. It was formed in the late 1990's, and had prospered. The Depues also owned K & B Properties, which owned and leased to Design Air the real property where Design Air conducted its business.
Cox joined Design Air in 2003 as an installer. He learned to bid and supervise jobs and, in 2005, was named as a "supervisor" on the commercial side of Design Air's business.
In 2006, the Depues initiated discussions with Cox and Richardson regarding their possible purchase of Design Air. Plaintiffs caused valuation analyses to be prepared by their accountant, Troy Peltzer, to support possible purchase prices. For their part, Cox and Richardson made a series of proposals, some including acquisition of the land (owned by K & B Properties) and some not.
The discussions ultimately resulted in a Stock Redemption Agreement dated December 28, 2006. Ex. 218 (the "Agreement"). The parties to the Agreement were Plaintiffs, Cox, Richardson, and Design Air itself. The format of the Agreement was unusual, and requires explanation.
Under the Agreement, the stock ownership of Brian and Sharon Depue (496 shares) and of Kenneth Depue (494 shares)
The shares of stock in Design Air that were being redeemed were "endorsed" and then "surrendered" by Plaintiffs, and the shares were deposited into an escrow account at a title company. The Design Air payments under the Agreement also went to the same title company and were then disbursed to Plaintiffs. The title company was instructed that, upon final payment, it was "to deliver to the Corporation [Design Air]" the stock certificates. The escrow fees were to be paid equally by Brian Depue, Ken Depue and Design Air. Id. at 3-4.
The Agreement also stated that Plaintiffs "retained" a "security interest" in the shares of stock.
In the Agreement, Plaintiffs Brian and Ken Depue "tender their resignations as directors and officers of [Design Air]" effective upon execution of the Agreement (i.e., December 28, 2006). Oddly, though, it also provided that these resignations "shall be presented to the Board of Directors" of Design Air.
Design Air also agreed, in addition to the $275,000 payment to Brian and Sharon, and the like payment to Ken, to "hold [Plaintiffs] harmless" for a commercial loan of $74,464.69 and a line of credit of $300,094.50 that Design Air had with U.S. Bank.
Thus, the corporation, Design Air, had the obligation to make payments to Plaintiffs. The Agreement provided for remedies in the event of default in the performance of these obligations. Plaintiffs could give, at their election, notice of default to Design Air and, unless the corporation cured those defaults in 30 days, Plaintiffs could declare the "forfeiture" of the Agreement. "In that event, [Plaintiffs] shall be released from any and all obligation to convey said stock to the Corporation and all monies paid by the Corporation [under the Agreement] shall be forfeited unto [Plaintiffs] as agreed and specified liquidated damages[.] Then all rights of the Corporation to purchase said stock[
In addition to Design Air's responsibilities, the Agreement provided for certain obligations to be performed by Plaintiffs. Plaintiffs agreed that:
1. They would not change any accounts or licenses.
2. They would return their company phones and credit cards to Design Air.
3. Cox and Richardson would be entitled to manage the business of Design Air and to "have control" of corporate books.
4. Neither Plaintiff would seek to remove from the corporation's business premises any personal property, nor "disturb any of the licenses" of Design Air.
5. Subsequent purchases in the name of the corporation would be approved by either Cox or Richardson.
Ex. 218 at 6.
Though all these rights and responsibilities were by and between Design Air and Plaintiffs, the Agreement also placed certain obligations on Cox and Richardson. It provided that "Cox and Richardson may begin changing the accounts and licenses into their names" and that this process "will be completed no later than December 31, 2007." It further required that "Cox and Richardson, except for the U.S. Bank personal guarantee, will see that [Plaintiffs'] are released within 60 days from the date of this Agreement from personal liability including any personal guarantees on all of [Design Air's] accounts and licenses. Cox and Richardson will also see that no later than May 1, 2008, [Plaintiffs] are released from personal liability on the personal guarantees that were given to U.S. Bank." Id. at 7.
In addition, there were complicated provisions related to responsibilities of Plaintiffs for certain tax liabilities, and of Design Air and Cox and Richardson for others. Plaintiffs, Design Air, Cox and Richardson all agreed to covenants not to compete.
Cox and Richardson also agreed to "absolutely personally guarantee payment of the sums to [Plaintiffs] and the performance of all of the other terms and conditions of this Agreement. This personal guarantee is in addition to any other security [Plaintiffs] have." Id. at 9-10.
The Agreement required the "surrender" of the stock certificates—after "endorsement" by Plaintiffs—not to Cox and Richardson, but rather to Design Air. The endorsed stock was held in escrow. The intent appeared to be that the stock would be transferred ("redeemed") upon completion of the payment terms under the Agreement, and that such transfer would be "to the Corporation"—i.e., to Design Air itself. Id. at 3-4. This indicates that Plaintiffs remained, on the corporate records, the owners—indeed the sole owners—of Design Air. Nothing suggests that Cox and Richardson became, upon execution of the Agreement or later on completion of payment, the owners of this stock in Design Air. Id. at 1-3 (providing that the stock of Plaintiffs would be "redeemed" and even suggesting tax treatment). The Agreement appears to contemplate that, if the required payments to Plaintiffs were made, Plaintiffs' stock would be retired.
Presumptively new stock would (at some point) be issued to Cox and Richardson. There is no evidence the corporation ever issued new or other stock to Cox and Richardson. In short, after December 28, 2006, it appears to this Court that Plaintiffs owned the corporation and Cox and Richardson were running it pursuant to the terms of the Agreement.
This result, however, was not what a state court concluded in litigation between the parties. The District Court for the Third Judicial District, Canyon County, Idaho, held on January 12, 2010, that "on or after December 28, 2006, the Depues were no longer shareholders in Design Air, Inc." and that "on or after December 28, 2006, . . . Cox and Richardson were and are the holders of the shares of common stock in Design Air, Inc." Ex. 117 at 4.
After the Agreement was signed, Design Air continued to lease its business premises from K & B Properties, ultimately converting to a month to month lease. Ex. 106. However, in June 2007, Cox and Richardson caused Design Air to purchase other real property and put a down payment on a building. Ex. 108. The ultimate goal was to place a building on the land, move Design Air's operations there, and no longer lease its business property from K & B Properties. Design Air used the U.S. Bank line of credit to make the down payments on the land and building.
Despite the source of the down payments, Design Air financed the land purchase through Bank of the Cascades on a short-term loan. Exs. 108; 237. Cox and Richardson planned for Design Air to obtain a construction loan and permanent financing, rolling in the building costs and recouping the funds from the U.S. Bank line of credit used for the down payments. They worked with Bank of the Cascades, which in turn worked with a company called Capital Matrix, to structure the construction loan and provide long-term financing. Unfortunately, they were never able to complete this loan process. Difficulties arose regarding financial paperwork, zoning, easements and grading issues which prevented construction of the building. Cox and Richardson sought and received several extensions on the Bank of the Cascades' short-term loan, but it ultimately matured on July 19, 2008. Ex. 131.
Soon thereafter, in late August 2008, Bank of the Cascades "termed out" the
As noted, Design Air continued to utilize the U.S. Bank line of credit after the Agreement was executed. Design Air's secretary and bookkeeper, Melissa Smith (formerly Melissa Mark) submitted monthly financial information to U.S. Bank. Besides reviewing these monthly reports, U.S. Bank conducted annual reviews and required the line of credit guarantees to be signed annually. Plaintiffs, Cox and Richardson re-signed as guarantors on Design Air's line of credit with U.S. Bank in July, 2007. Ex. 140. Neither U.S. Bank, nor Plaintiffs, were aware of the land purchase which had been completed days before those guarantees were signed. Roger Wright, a commercial banker with U.S. Bank, testified that the disclosure of the land purchase may not have altered U.S. Bank's willingness to continue the line of credit, but that further review would have been required.
In December 2007, Mrs. Smith reclassified the land expenditures in Design Air's Quickbooks as loans to a company called Hammer & Magnum, LLC ("H & M"). See Ex. 110. She did so based on Design Air's accountant's instructions. However, Cox and Richardson had not yet formed H & M when this reclassification occurred and, while they had discussed the entity structure with their accountant, they credibly testified they were not prepared to transfer the property to H & M at that time. Indeed, the transfer never occurred. H & M, which was formed in January 2008, never owned anything nor did it operate a business. Any documents purporting otherwise were prepared in error.
Brian Depue learned of and informed U.S. Bank about Design Air's land purchase in 2008, and U.S. Bank required Cox and Richardson to include the land and the associated obligation on their 2008 financial disclosures. However, in 2008 there were other issues with the line of credit, including Mr. Wright's concern that it was not being adequately paid down. Plaintiffs were also concerned and ultimately refused to re-sign their guarantees on the line of credit in mid-2008.
In July 2008, Design Air provided various proposals to U.S. Bank of ways to pay down the line of credit, including forbearance of payments to Plaintiffs and use of funds from the Bank of the Cascade's construction loan, which Cox and Richardson still hoped Design Air would obtain. Cox and Richardson also discussed delayed payments with Brian. Design Air ultimately stopped paying Plaintiffs as of August 2008.
In late September 2008, Plaintiffs sent Cox and Richardson a notice of intent to declare forfeiture. Ex. 229. The forfeiture notice informed Cox and Richardson that "if said delinquent payments . . . are not paid within thirty (30) days from the date of service of this notice to you, [Plaintiffs] do elect to declare said Agreement referred to herein null and void and all sums heretofore paid forfeited to Seller as liquidated damages, and said Contract canceled." In October, Cox and Richardson met again with Brian and informed him they would not contest the forfeiture and Plaintiffs should "take back the company."
Cox and Richardson were unable to contact Brian after the October meeting. They ultimately signed extensions on the U.S. Bank line of credit in November 2008, but informed Mr. Wright of the forfeiture notice and that Plaintiffs would be taking
On December 3, 2008, Cox and Richardson tendered their resignations. Exs. 115, 116. Plaintiffs did not resume Design Air's business. U.S. Bank sent the Design Air account to its special asset group and initiated a lawsuit against Design Air and the guarantors on the line of credit. Cox and Richardson filed their chapter 7 bankruptcy petitions in September 2009. On January 28, 2011, a $350,000.00 stipulated judgment was entered in state court in favor of U.S. Bank against Plaintiffs and K & B Properties. Ex. 119.
In their Amended Complaints, Plaintiffs claimed that debts owed to them by Cox and the Richardsons should be held nondischargeable under § 523(a)(4) and § 523(a)(6). See Amended Complaint, Counts II and III. At the commencement of trial, Plaintiffs announced they would not pursue these causes. In doing so, and at the same time, Plaintiffs also abandoned any claims under Count V of the Amended Complaint.
Plaintiffs continue to pursue their claims under § 523(a)(2)(A) and (B). To prevail on a claim under § 523(a)(2)(A), a creditor must establish five elements by a preponderance of the evidence:
Harmon v. Kobrin (In re Harmon), 250 F.3d 1240, 1246 (9th Cir.2001) (quoting Turtle Rock Meadows Homeowners Ass'n v. Slyman (In re Slyman), 234 F.3d 1081, 1085 (9th Cir.2000)).
The elements for a claim under § 523(a)(2)(B) are similar but not identical to those for claims under § 523(a)(2)(A).
The Court first addresses Plaintiffs' subrogation arguments because, in significant part, Plaintiffs do not rely upon representations directly made to them by Cox or Richardson that were false or deceptive and which otherwise meet the requirements of § 523(a)(2). Plaintiffs argue, however, that they have "standing" to raise a claim under § 523(a)(2)(A) and (B) based on representations Cox and Richardson made to U.S. Bank. They do so on a theory that involves the following elements:
From these factors, Plaintiffs argue U.S. Bank would have a fraud claim against Cox and Richardson and that, by reason of Plaintiffs' liability to U.S. Bank, Plaintiffs are "subrogated" to U.S. Bank's rights to pursue a § 523(a)(2) determination. The Court disagrees. It concludes Plaintiffs have failed to establish they can maintain a § 523(a)(2) claim based on alleged misrepresentations made not to them but to a third party.
Plaintiffs' subrogation theory first relies on the "subrogation rights allowed in the U.S. Bank Continuing Guarantee that all parties signed." Adv. No. 09-6092 at Doc. No. 91 at 2; Case No. 09-02907 at Doc. No. 46 at 2 ("Supplemental Brief").
Plaintiffs next rely on "state and bankruptcy case law" and assert the same supports their right to "equitable subrogation" and their ability to advance fraud claims that might be held by U.S. Bank against Defendants. Supplemental Brief at 2. Plaintiffs cite to this Court's decision in In re A.D.S.T., Inc., 169 B.R. 64 (Bankr.D.Idaho 1994). Supplemental Brief at 2-3. That case established that one who claims to be equitably subrogated must satisfy certain prerequisites:
169 B.R. at 66.
Assuming that any payment by Plaintiffs under the unreleased guarantees of Brian and Ken Depue to U.S. Bank will satisfy the first factor (i.e., the existence of an obligation, and payment to satisfy the
Here, there is no evidence that the debt was paid, something this Court has held is a prerequisite to the maintenance of a subrogation claim. This leads to the conclusion that the right of subrogation that is attempted to be utilized here is contingent and inchoate; it could arise and exist only on the happening of a future event. It therefore provides no basis for the present maintenance of this action.
The Court concludes that Plaintiffs have not established they may properly use the rights of U.S. Bank (if any
Heather was named as a defendant, and the Amended Complaint is not specific in identifying which causes of action are directed to her. Thus, the Court is required to consider whether a claim has been adequately asserted against Heather under § 523(a)(2). See Tickemyer, 2011 WL 1230326, at *7-8 (citing Tsurukawa v. Nikon Precision, Inc. (In re Tsurukawa), 258 B.R. 192, 198 (9th Cir. BAP 2001)). There was no evidence whatsoever presented to establish Heather took any action vis-à-vis Plaintiffs that would support such a claim. The fact that she was and is married to Richardson is alone insufficient. "A marital union alone, without a finding of a partnership or other agency relationship between spouses, cannot serve as a basis for imputing fraud from one spouse to the other." Tickemyer, 2011 WL 1230326 at *7 (citations omitted).
As there is no proof of any activity by Heather with or directed toward Plaintiffs, the § 523(a)(2) cause in the Amended Complaint as against Heather will be dismissed.
Plaintiffs do not rely solely on the fraud claims that flow through misrepresentations allegedly made to U.S. Bank. There are some claims against Cox and Richardson under § 523(a)(2)(A)
Plaintiffs contend Cox and Richardson falsely promised to perform their obligations under the Agreement, including their intention and agreement to obtain release of Plaintiffs from the U.S. Bank guarantees. This Court has recognized that there is a "subset of § 523(a)(2)(A) authority that validates nondischargeability actions for `promissory fraud.' These cases require proof that at the time the promise was made, it was then known to the maker to be false and that there was no intent or ability to perform the promise." Fetty v. Carlson (In re Carlson), 426 B.R. 840, 854 n. 18 (Bankr.D.Idaho 2010) (citations omitted). In closely evaluating the entirety of the evidence, the Court finds an absence of proof as to the elements of falsity, knowledge of falsity, and intent required to sustain such a contention. Plaintiffs' Amended Complaint in this regard will be dismissed.
Plaintiffs argue in various, and at times abstruse, manners that the way in which Cox and Richardson ran the Design Air business after the Agreement was reached constitute misrepresentations or fraudulent omissions or other "deceptive" conduct. They point to things such as incurring expenses to take employees to
First, many of the challenged transactions or expenses were adequately explained by Cox and Richardson. For example, Cox and Richardson explained the Nevada expenses fell under ordinary (for their business at least) "travel and entertainment," as they were entertaining customers and vendors at such venues in pursuit and furtherance of those individuals' business with Design Air.
Secondly, these were not "representations" made to Plaintiffs, nor if they were was it shown that they were knowingly false. Nor was it proven that they were made with an intent to induce Plaintiffs' reliance and consequent injury. In short, Plaintiffs clearly did not like the way Cox and Richardson ran the business. But that does not make the various matters highlighted by Plaintiffs the basis of § 523(a)(2)(A) causes of action.
Plaintiffs bore the burden of proving all the § 523(a)(2)(A) elements by a preponderance of the evidence, and they have failed to do so on these claims.
Cox and Richardson caused funds to be obtained through the Design Air line of credit with U.S. Bank and used those funds to make a down payment on the purchase of real property. Cox and Richardson testified that they had anticipated developing the property into a business site for Design Air, and that they would lease it to Design Air much as Plaintiffs had been doing in leasing business premises to the corporation through their entity K & B Properties. They indicated further that this acquisition had several purposes. For example, it was part of Cox and Richardson's attempts to model their financial affairs after Plaintiffs' successful business relationship between K & B Properties and Design Air. Additionally, Cox and Richardson testified that this was part of their effort to build their financial net worth and, hopefully, allow them to obtain the release of Plaintiffs from the U.S. Bank guarantees, as they were obligated to do under the Agreement.
Their handling of this transaction and their efforts to effectuate the expressed intent were marked by confusion and sloppiness. Cox and Richardson, using an accountant for advice and counsel, decided to form a limited liability company, H & M,
The problem, once again, is that there were no representations made by Cox and Richardson to Plaintiffs in connection with the use of the Design Air line of credit for this purpose. After the execution of the Agreement, Cox and Richardson were the individuals operating Design Air, as officers and as the business' practical managers. They had the authority to borrow money and expend funds. They violated no contractual covenant in doing so.
In briefing, Plaintiffs assert that when they raised specific questions about certain expenditures, Cox and Richardson lied. But briefing is not evidence. Plaintiffs failed to prove, through testimony at trial, such express verbal representations, when they were made, their falsity, Defendants' intent, Plaintiffs' justifiable reliance, and proximate damages stemming from those representations.
In conclusion, the Court finds Plaintiffs failed to establish, by a preponderance of the evidence, all the requisite elements of a nondischargeable debt under § 523(a)(2).
A denial of discharge under § 727(a) is one of the most severe sanctions this Court can impose. As such, the statutory requirements are strictly construed against the objecting creditor and in favor of the debtor. Petro Concepts, Inc. v. Mundt (In re Mundt), 10.1 I.B.C.R. 8, 12, 2009 WL 5386131, *7 (Bankr.D.Idaho 2009). The burden is on the creditor to provide proof, by a preponderance of the evidence, that a debtor's discharge should be denied. Id. (citing Grogan v. Garner, 498 U.S. 279, 286, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991)).
Plaintiffs' Amended Complaints alleged causes of action under § 727(a)(2), (3), (4) and (7) in Count IV. In their closing briefs, Plaintiffs restricted their focus solely to § 727(a)(3) and § 727(a)(4)(A). The Court will do the same.
Section 727(a)(3) provides that a debtor may receive a discharge "unless . . . the
In order to sustain a claim under § 727(a)(3), Plaintiffs must show by a preponderance of the evidence "(1) that the debtor failed to maintain and preserve adequate records, and (2) that such failure makes it impossible to ascertain the debtor's financial condition and material business transactions." Mundt, 10.1 I.B.C.R. at 14.
Plaintiffs focus on Defendants' alleged failure to properly complete their Statement of Financial Affairs ("SOFA"). They also focus on Defendants' failure to list accounts receivable in their schedules, or to file taxes in 2008. However, a failure to properly complete their schedules or SOFA does not address the inquiry required under § 727(a)(3) which is on the maintenance of adequate business records. In order to deny Defendants a discharge under § 727(a)(3), Plaintiffs must prove Defendants failed to maintain and preserve adequate records from which their financial condition and business transactions could be ascertained, not that they may have erred in completing their schedules or SOFAs.
Here, the Court is unaware of which records Cox and Richardson
The evidence shows Cox and Richardson used Quickbooks in Design Air's operations, and that they left those records with the corporation when they resigned, in part because they believed they had no ownership interest in Design Air. Such records were left on the property leased by Design Air and owned by K & B Properties, and Plaintiffs had access to those records. Indeed, several Design Air ledgers were admitted into evidence. While not the model of clarity, financial records were maintained and evidence was submitted to the Court adequately detailing Cox and Richardson's business transactions with regard to Design Air.
Based on the evidence presented, the Court finds Plaintiffs have failed to meet their burden under § 727(a)(3) and that cause of action will be dismissed.
Plaintiffs argue Defendants' discharge should be denied under § 727(a)(4).
Retz v. Samson (In re Retz), 606 F.3d 1189, 1196-97 (9th Cir.2010) (footnote ommitted). Plaintiffs point to a host of asserted omissions and errors in Debtors' schedules and SOFAs to support their cause of action.
Even assuming some of the asserted errors or omissions could be considered material, Plaintiffs have not proven Defendants had the requisite fraudulent intent to deceive their creditors when completing their schedules and excluding the specified information. In order to demonstrate fraudulent intent, Plaintiffs must show that the Defendants: "made them with the intention and purpose of deceiving the creditors." In re Khalil, 379 B.R. 163, 173 (9th Cir.BAP2007) (quoting Roberts v. Erhard (In re Roberts), 331 B.R. 876, 884 (9th Cir.BAP2005) (alterations in original)); see also Retz, 606 F.3d at 1198-99
Plaintiffs' cause of action under § 727(a)(4) will be dismissed.
Defendants' Counterclaims against Plaintiffs allege fraud and defamation. Defendants abandoned their defamation counterclaim at the conclusion of trial. The fraud counterclaim pends.
Plaintiffs argue there are jurisdictional or similar problems with this Court hearing and adjudicating these counterclaims.
Defendants' Counterclaims, through which they seek monetary damages for Plaintiffs' alleged fraud, arise from what Defendants see as Plaintiffs' misrepresentations regarding the value of Design Air in 2006 as Defendants were negotiating and entering into the Agreement. Cox and Richardson filed bankruptcy in 2009. Legal claims and causes of action held by a debtor which existed at the time the debtor's bankruptcy case was filed become property of the estate. See § 541(a).
Based upon the foregoing findings and conclusions, Plaintiffs' Amended Complaints against Defendants under § 523 and § 727 will be dismissed. In addition, Defendants' Counterclaims will also be dismissed. The Court concludes Defendants are the prevailing parties and will be awarded costs.
After Defendants' filed their bankruptcy petitions, Plaintiffs sought relief from the automatic stay in order to allow the state court to make such a determination regarding ownership at a December 10, 2009 hearing. See 09-02782-TLM at Doc. No. 19; 09-02907-TLM at Doc. No. 15. (Judicial notice is taken of the Court's files and records in the underlying chapter 7 cases. Fed.R.Evid. 201.) The parties stipulated to stay relief in order for the state court to enter a "declaratory decision as to which party owns the common stock of the company Design Air, Inc." Case No. 09-02782-TLM at Doc. No. 28 (Order, Jan. 4, 2010); 09-02907-TLM at Doc. No. 24 (Order, Dec. 31, 2009); see also Case No. 09-02782-TLM, Doc. No. 23 at 2 (stipulation); 09-02907-TLM, Doc. No. 19 at 2 (stipulation). (The parties delayed submitting orders on these stipulations until after the December state court hearing had actually occurred).
The state court then entered its January 2010 judgment. Ex. 117. This judgment, at 3, suggests that additional evidence—i.e., "new and additional facts presented by the Plaintiffs"—was relied upon by the state court to "resolv[e] the disputed factual issue set forth in [the court's] June 8, 2009, Order." However, the recitals in the judgment also indicate that Cox and Richardson failed to appear or defend (at the December 2009 hearing presumably) and that the January 2010 judgment was in the nature of default relief. Ex. 117 at 2. What weight to give the ruling is therefore questionable. See generally Gamble v. Overton (In re Overton), 09.1 I.B.C.R. 19, 2009 WL 512159, at *3-5 (Bankr.D.Idaho 2009) (addressing principles of issue preclusion); Catmull v. Vierra (In re Vierra), 08.2 I.B.C.R. 56, 59-60, 2008 WL 695027 (Bankr.D.Idaho 2008) (same).
