The dispute between the Debtor, Christopher Robert Palecki (the “Debtor”), and his Creditors, Dawn and Jacob McNulty (the “McNultys”), arose out of a construction contract gone awry. The McNultys hired the Debtor as a general contractor to renovate a carriage house adjacent to the McNultys’ residence located in a historic neighborhood in Denver. The McNultys wanted a general contractor who was licensed in the City and County of Denver. The Debtor represented he was a licensed general contractor. The McNultys hired the Debtor and gave him a deposit of $59,375.00 (the “Deposit”). The Debtor misrepresented himself to the McNultys—he was not a licensed general contractor. And, the Debtor and his construction company were experiencing financial difficulties. Within a month of receiving the Deposit, the Debtor quickly spent it on other projects and personal expenses. He did not spend any of it on the McNultys’ carriage house renovation. He never returned the Deposit to the McNultys.
The McNultys initiated an adversary complaint against the Debtor seeking a determination pursuant to 11 U.S.C. §§ 523(a)(2), (4) and (6) that their debt should be excepted from discharge. In addition, they sought treble damages, attorney fees and costs under the Colorado Civil Theft Statute, Colo. Rev. Stat. § 18-4-405. Following a trial on the complaint, the Court entered judgment in favor of the McNultys and against the Debtor on all counts.