Williams v. Sato (In re Sato)

MEMORANDUM OF DECISION RE: TRIAL ON SECOND AMENDED COMPLAINT FOR: EXCEPTION TO DISCHARGE OF DEBT PURSUANT TO 11 U.S.C. 523(a)(2), (a)(4), AND (a)(19)

Plaintiff Michael Williams (the “Plaintiff” or “Williams”) has brought a nondis-chargeability action against Debtor Rumio Sato (the “Defendant” or “Sato”), claiming *245 that Sato committed fraud in soliciting his investment in a real estate development project in 2006. As discussed below, the Court finds that the debt is not discharge-able under 11 U.S.C. §§ 523 (a)(2) and 523(a)(19).

On or about October 18, 2011, Debtors Rumio and Junko Sato filed a voluntary chapter 11 petition (the “Debtors”). Upon Debtors’ motion, the case was later converted to chapter 7. On or about May 4, 2012, Williams filed an adversary complaint against Sato to determine the dis-chargeability of Plaintiffs debt under §§ 523(a)(2), (a)(4), and (a)(19). The debt arose from Plaintiffs investment of $150,000 in Defendant’s real estate development project located at 2470 Lynnfield Circle, El Sereno, California (the “Lynn-field Property” or “Lynnfield Project”). The trial was held on February 10, 2014.

Findings of Fact and Conclusions of Law

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