The opinion of the court was delivered by: Thomas W. Phillips United States District Judge
On January 31, 2007, the Honorable Marcia Phillips Parsons, United States Bankruptcy Judge, entered a memorandum opinion and order holding that any debt owed by the debtor, appellee James Paul Collier, to the plaintiff, appellant Debra Linstroth, would not be excepted from discharge under either § 523(a)(2)(A) or § 523(a)(6) of the Bankruptcy Code. Linstroth timely appealed, and for the reasons that follow, this court affirms.
The facts in this case are heavily contested. Debtor/appellee James Paul Collier and plaintiff/appellant Debra Linstroth met in the parking lot of a grocery store in 2004. Collier was en route to a barrel race with his friend, Charles Wright, and his daughter. While Wright was inside purchasing items for the race, Collier and his daughter waited in the parking lot, whereupon Linstroth noticed the horse trailer and horse that Collier and Wright were towing and approached them to chat. Linstroth, who trains horses, was trying to find a horse for her daughter. Likewise, Collier was looking for someone to teach his daughter how to ride. When Collier handed Linstroth his business card so she could contact him later, she noticed that he was in the construction business. Having wanted to improve her mobile home and surrounding property, Linstroth asked whether Collier would be able to complete the remodeling and other work she desired to have done. The parties dispute whether at this time Collier represented that he was a general contractor. Linstroth claims that Collier represented he was a general contractor, whereas Collier submits that at no point during the length of their relationship did he represent that he was a general contractor. Collier submits that he simply told Linstroth that he could do framing work and small remodeling jobs. In any event, the parties agreed that Collier would take a look at the property.
Having toured the property, Collier gave Linstroth an estimate of the cost of the project. The initial projection was approximately $50,000. After Linstroth indicated this was more than she either was willing to pay or could afford, the parties further negotiated. It was decided that another friend of Linstroth would complete the inside of the room addition, including wiring, insulation, sheetrock, carpet, and removal of the trailer wall, while Collier would only complete the frame and exterior. Collier would also receive a used horse trailer from Linstroth in return for a $1,000 credit. In all, Collier was to complete a room addition (shell only), new driveway, carport, barn, meter center, tack room, and arena with surrounding fencing, as well as brushhog a pasture and lay a slab for a basketball goal.
On June 7, 2004, the parties executed a written contract evidencing this agreement. The final estimate for this construction was $36,720, to be paid as follows: $8,000 up front; $15,630 two to three weeks thereafter (after completion of the barn, tack room, and piers for addition); an additional payment of $10,000 one to six months thereafter; and the remainder of $3,080 to be paid upon completion. Linstroth wrote Collier a check for $8,000 the day the contract was signed. The following payments were somewhat behind, however: Linstroth paid $10,000 on June 17, 2004; $4,000 on July 13, 2004; and $14,320 on August 13, 2004.
Having begun various other parts of the project, Collier began work on the room addition. After completing roughly half of the work, however, a stop work order was issued by the Knox County Building Code Department on July 29, 2004, requiring a building permit to be obtained before construction could resume. According to Linstroth, Collier told her that he would take care of the permits. Collier, however, argues that he never said that he would obtain the building permits; rather, he had, from the beginning, made it clear that it was Linstroth's responsibility to obtain the permit. Linstroth, however, counters that he misrepresented these responsibilities as his own to fraudulently induce her to pay more money on the contract. Collier, did, however, further contact the board; having informed them of his building plans, Linstroth signed a letter in order for the permit to issue. On August 4, 2004, the Knox County Code Department issued the permit, albeit with the express provision that "[n]o modification of existing mobile home is allowed without sealed engineer design. No structure shall be supported by the mobile home."
At this point, the relationship began to sour. Linstroth claims she tried to contact Collier several times to no avail. At some point, however, Collier simply came to Linstroth's house. Linstroth alleges that Collier told her at this time that he would need the assistance of an architect and an engineer to complete the room addition, but that he had initiated negotiations via a sales representative at his lumber supplier. Linstroth alleges that she offered Collier more money to help him obtain the drawings to complete the job, but that he acknowledged that it was his fault and that he would absorb the cost as a wage loss. Meanwhile, the project languished.
On August 13, Linstroth paid Collier $14,320. Linstroth alleges that Collier fraudulently induced her to make this payment by telling her that the price of lumber had increased and that he would need money to continue work. Linstroth knew Collier couldn't complete the job without sealed engineer's drawings and claims that he told her that with this payment, he would be able to obtain the drawings and finish the work. Linstroth further contends that she offered Collier even more money, but that he refused her offer, stating that he would absorb the difference as a loss on his own wages. Collier disputes this and contends that the payment simply covered overdue bills for work already completed.
When Linstroth made this last payment, she believed Collier would finish by September 1, 2004. After the stop work order was issued, however, Linstroth claims that the project in general continued to lie abandoned; in particular, no more work was completed on the room addition and the deck. She claims that Collier came to work solely on the tack room and barn. While Collier concedes that he told Linstroth that he would complete the room addition and deck, he contends that at the time of the last payment, he had yet to obtain the engineer's drawings, and therefore the completion had not been approved by the Knox County Building Code Department.Collier attributes this failure to obtain the requisite drawings, however, to the outstanding bills owed by Linstroth and his overall lack of cash flow. Collier testified that a business enterprise with a co-partner had collapsed, leaving him over $100,000 in debt.
In addition to the business relationship, the parties had established an apparent friendship.
Linstroth had been keeping Collier's horse and was responsible for the feeding, boarding, and care thereof. By Linstroth's accounts, when Collier next came to her property, it was not to complete the construction, but rather to retrieve his horse so he could sell it. Beyond his general business debts, Collier informed Linstroth at this point that his tools had been stolen and he could not complete the work without them.Nor could he simply obtain more tools, worth an estimated $36,000, due to his aforementioned financial insolvency.Linstroth alleges that she offered her help in any way, suggesting that she rent tools for Collier so he could complete the construction on her property. Collier, however, declined the aid, yet Linstroth alleges Collier assured her he had maintained her payments in a separate bank account and would complete the work as soon as he was financially able.
Collier, however, never completed the work. Linstroth contends that Collier told her that if she could find someone to complete the work, he would refund the price difference in the projects. Linstroth claims that very little of the project was finished, with much of it left in varying stages of disrepair. Collier, however, contends that he completed the driveway, carport, arena, and concrete slab for the basketball goal. The barn and tack room were almost complete, the former needing stall fronts and final electrical work and the latter needing electrical work ...