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VIP SPORTS MARKETING, INC. v. BUZIL

November 15, 2004.

VIP SPORTS MARKETING, INC., Appellant,
v.
STEVEN BUZIL, Appellee.



The opinion of the court was delivered by: JOHN W. DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

Appellee, Steven Buzil, filed a voluntary petition under Chapter 7 of Title 11 of the United States Code. Appellant, VIP Sports Marketing ("VIP"), is a judgment creditor of Buzil. Buzil's debt to VIP would generally be dischargeable in the bankruptcy proceeding, but VIP alleged in an adversary complaint, pursuant to 11 U.S.C. § 523(a)(2)(A), that the debt was not dischargeable because the debt was fraudulently obtained by Buzil. Specifically, VIP alleged that Buzil obtained money from VIP by misrepresenting his ability to procure a number of passes for the 2000 Masters Professional Golf Tournament.

Thereafter, Buzil filed a motion to dismiss the adversary complaint because VIP's promissory fraud claime did not meet the requirements of the fraud exception to an otherwise dischargeable debt. Buzil also contended that the adversary complaint did not satisfy the pleading requirements of Bankruptcy Rule 7009(b). This motion was granted, and VIP was granted leave to file an amended adversary complaint. The amended complaint filed by VIP was similar to the original complaint, and Buzil filed another motion to dismiss that alleged the amended adversary complaint did not satisfy the pleading requirements of Bankruptcy Rule 7009(b). This time, the amended adversary complaint was dismissed with prejudice, and the adversary proceeding was closed.

  Presently before the Court is an appeal of an order of the bankruptcy court dismissing VIP's amended adversary complaint against Buzil with prejudice. For the following reasons, the decision of the bankruptcy court is affirmed.

  LEGAL STANDARD

  On an appeal, a bankruptcy court's decisions concerning questions of law are reviewed de novo. Hoseman v. Weinschneider, 322 F.3d 468, 473 (7th Cir. 2003). In reviewing a motion to dismiss, the court reviews all facts alleged in the complaint and any reasonable inferences drawn therefrom in the light most favorable to the plaintiff. See Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). A plaintiff is not required to plead the facts or elements of a claim, with the exceptions found in Federal Rule of Civil Procedure 9. See Swierkiewicz v. Sorema, 534 U.S. 506, 511 (2002); Walker v. Thompson, 288 F.3d 1005, 1007 (7th Cir. 2002). Dismissal is warranted only if "it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The "suit should not be dismissed if it is possible to hypothesize facts, consistent with the complaint, that would make out a claim." Graehling v. Village of Lombard, Ill., 58 F.3d 295, 297 (7th Cir. 1995).

  BACKGROUND

  The facts, for the purposes of this appeal, are taken as true from VIP's Amended Complaint. Buzil was involved in the ticket broker business, whereby he would enter into agreements to provide tickets to entertainment and sporting events that were generally unavailable to the public. Buzil entered into one such agreement with VIP. On March 27, 2000, Buzil, in a written contract, agreed to provide VIP with thirty tickets for the 2000 Masters Professional Golf Tournament (the "Masters"), which was set to begin on April 6, 2000. VIP agreed to pay Buzil $83,250.00 upon execution of the agreement, and then pay $27,750.00 upon delivery of the tickets. On March 29, 2000, VIP further provided Buzil with $5,000.00 to be held as a deposit.

  Unbeknownst to VIP, Buzil did not have the tickets needed to fulfill VIP's needs at the time of the agreement. Knowing that he would receive money from VIP, Buzil represented that he would provide the thirty tickets. However, Buzil knew that he did not have access to thirty tickets at the time of the agreement.

  After Buzil entered into the agreement with VIP, Buzil obtained a release from another party for a prior commitment Buzil had to provide Masters tickets. Buzil was thus able to obtain twenty tickets for the Masters. Buzil, however, was cognizant of the increasing price for Masters tickets and believed he could purchase tickets at a lower price than currently available. Therefore, Buzil did not purchase tickets with the funds provided by VIP.

  On April 4, 2000, VIP paid the remaining $27,750.00 due to Buzil. Buzil was only able to deliver eighteen tickets for the Masters to VIP, even though there were tickets available for Buzil to purchase prior to the start of the Masters.

  Throughout VIP and Buzil's dealings, Buzil continuously represented that he would be able to provide the required tickets in time for the beginning of the Masters. These representations were false. Furthermore, Buzil had an undisclosed scheme not to pay any amounts for tickets in excess of a certain profit he was secretly seeking to obtain. Instead, Buzil either procured tickets for other customers at his acceptable profit level or refused to procure the remaining tickets for VIP with the funds VIP provided.

  Buzil knowingly made some of these misrepresentations to VIP at the time of entering into the agreement. VIP reasonably relied on these representations and provided Buzil with the full agreement price and the $5,000.00 deposit. However, VIP was injured because it paid the ...


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