In re Grigoryan

          MEMORANDUM OF DECISION

          THOMAS B. DONOVAN, Bankruptcy Judge.

         This matter was tried on August 26, 2013; a tentative decision was announced in favor of the Plaintiff, MDA Motors Corp. (MDA) at the conclusion of the trial; and the matter was taken under advisement for the determination of damages based on the testimony and documentary evidence admitted.

         The evidence established that the parties entered into a written consignment agreement (the Agreement) for the purchase and sale of used cars and accessories in February 12, 2009. The agreement was drafted by Defendant, Artur Grigoryan. The general concept was that Grigoryan would purchase used cars at auctions; MDA would pay the auction yard for the cars; the cars were to be sold by Grigoryan; Grigoryan would pay MDA the purchase price it paid for each car and any later furnished accessories, plus a profit of $1, 100 for any car purchased by Grigoryan for resale over the price of $8, 000; for cars purchased for less than $8, 000 or resold for less than $8, 000, Grigoryan would pay MDA a profit equal to 10 percent of the resale price. Grigoryan was the owner of Ask Auto Sales, Inc. and used Ask Auto as the licensed entity to conduct his sales. His business bank account was at Wells Fargo Bank.

         Grigoryan sold and paid MDA for many cars under the Agreement. Grigoryan's sales averaged about $375, 000 for the months of February through August 27, 2009. However, out of 157 cars purchased for resale under the Agreement, Grigoryan failed to account for or pay MDA for 63 cars. Many lesser issues were discussed in the evidence, but the central material issue pertinent to MDA's claim was the amount of money owed to MDA based on Grigoryan's admitted sale of the 63 cars in issue.

         MDA conceded that Grigoryan gave MDA checks for three of these cars, but the Grigoryan checks for these three cars were returned unpaid by Grigoryan's bank for insufficient funds. Grigoryan submitted other checks as evidence but none related to any of the 63 cars at issue. Grigoryan testified that he paid MDA cash for some of the 63 cars. MDA's witness, Kourosh Javaheri (or John), denied that any cash payment was received from Grigoryan for any of the 63 cars. Grigoryan's testimony about cash payments was not credible; it was vague as to time, place and amount of any asserted payment and was not corroborated by any normal business record or otherwise. At the same time, Javaheri's testimony about non-receipt of payment was highly credible and persuasive and supported by extensive corroborating evidence. MDA's evidence and Javaheri's testimony was carefully documented with respect to all other Grigoryan sales. For the 63 cars in issue, the purchase of each such car with MDA funds was well-documented, while there was no documentation of any payment to MDA by Grigoryan for any of the 63 cars.

         MDA has proved by a substantial preponderance that Grigoryan should be held liable on a nondischargeable basis under 11 U.S.C. § 523(a)(6) for willful and malicious injury suffered by MDA for the loss of its property interest in 63 cars or the proceeds of Grigoryan's sale of the 63 cars. MDA has proved by a preponderance that Grigoryan's conduct with respect to the 63 cars was both willful and malicious. MDA has proved that Grigoryan acted deliberately and intentionally in converting car sale proceeds owed to MDA and in failing to pay MDA for car sales; that Grigoryan knew or had to have known the consequences of his actions in selling cars and not paying MDA as agreed from the proceeds; that Grigoryan knew or had to know that his actions were wrongful and would necessarily cause injury to MDA. Grigoryan has failed to establish that there was any just cause or excuse for his conduct in selling the 63 cars and failing to pay MDA as he had agreed to do.

         By way of damages, MDA's evidence is carefully documented in trial exhibits 2 through 116. Exhibits 2 through 116 fully and convincingly support MDA's final claim for damages in the amount of $644, 996.84. Damages for MDA's losses for Grigoryan's conversion of car sale proceeds hereby are fixed at $644, 996.84.

         Grigoryan offered many explanations for his inability to pay MDA as agreed. He offered many so-called "business" justifications for his many cash withdrawals and other expenditures from his main business bank account. Most of such explanations by Grigoryan were vague and self-serving; some were highly confusing. The court concludes that Grigoryan made several inadequately explained personal withdrawals of car sale proceeds from his main business account that most likely were for his personal use or the personal use of his family. In the end, Grigoryan's testimony and records were inadequate to explain his failure to pay MDA for 63 admitted car sales by Grigoryan.

         By contrast, MDA's losses were well-documented and explained.

         MDA's counsel is directed to lodge an appropriate judgment consistent with this memorandum.

         IT IS SO ORDERED.