Plaintiff and Debtor/Defendant had been involved in a romantic relationship. Using funds received from the sale of the Debtor’s home in California, Plaintiff purchased a home in Denver. Title to the home was held solely in the Plaintiff’s name. The Debtor and her daughter relocated to Colorado sometime after the home was purchased and moved into the home. Although Plaintiff and Debtor lived together, they never married.
An altercation occurred at the home which resulted in a criminal complaint for assault and disturbing the peace and the issuance of a protective order preventing Plaintiff from contacting the Debtor or her daughter.
As the criminal case advanced to trial, Plaintiff demanded the Debtor drop the criminal charges, enter into a settlement agreement providing for the sale of the home and division of the sale proceeds, and for a division of personal property. If she refused, Plaintiff threatened to sell the home and retain all the proceeds.
The settlement agreement provided certain personal property be retained by Plaintiff: Specifically, a Rolex watch, a Bulova watch, a gold medallion, a gold chain, and two rings (collectively, “jewelry”).
The Debtor received $100,000 from the sale of the home pursuant to the terms of the settlement but Plaintiff claimed she wrongfully withheld the jewelry. Plaintiff filed a replevin complaint in county court seeking return of two watches, a Bulova and a Rolex. After an evidentiary hearing at which the Debtor, who does not speak English, was not represented by counsel, a money judgment of $15,000 was entered against the Debtor who later sought bankruptcy relief.
Plaintiff’s Complaint sought to except the judgment obtained in county court from discharge under the provisions of 11 U.S.C. § 523(a)(4) or, alternatively, (a)(6).
The evidence received at trial consisted primarily of conflicting testimony of the Plaintiff and a corroborating witness, and the testimony of the Debtor. The Court found the Debtor’s testimony to be more credible, by a wide margin.
The Court questioned whether the settlement agreement was enforceable as a product of duress, but determined it was precluded from revisiting the issue as the obligation had been reduced to judgment.
The Court rejected the Plaintiff’s contention that the prior romantic relationship created a fiduciary duty within the meaning 11 U.S.C. § 523(a)(4). The Court held the Plaintiff failed to establish by a preponderance of the evidence that the Debtor committed larceny or embezzlement, and further held Plaintiff failed to prove his claim that the Debtor committed any act of willful and malicious injury to his property under 11 U.S.C. § 523(a)(6).