United States District Court, N.D. California
ORDER AFFIRMING BANKRUPTCY COURT'S SUMMARY JUDGMENT DECISION
EDWARD M. CHEN, District Judge.
Appellant Fritz Wuthrich appeals the summary judgment decision of a bankruptcy court. The bankruptcy court held that a discharge that Mr. Wuthrich had obtained in a Chapter 7 bankruptcy proceeding did not apply to a claim asserted by Appellee Amer Sports Winter & Outdoor Company ("Amer"). Amer's claim against Mr. Wuthrich was based on a personal guaranty that Mr. Wuthrich had signed prior to filing his Chapter 7 petition.
Having considered the parties' briefs and accompanying submissions, the Court hereby AFFIRMS the decision of the bankruptcy court.
I. FACTUAL & PROCEDURAL BACKGROUND
During summary judgment proceedings before the bankruptcy court, the parties submitted a joint stipulation of facts. Those facts are, in relevant part, as follows.
Mr. Wuthrich is the sole shareholder and president of a California corporation known as CIT Sports, Inc. ("CIT"). CIT operates a specialty sports shop. See Docket No. 21, at 9 (Stip. ¶ 2).
Amer, a Delaware corporation, is engaged in the sale of sporting goods and apparel. Its predecessor was Atomic Ski USA, Inc. See Docket No. 21, at 9 (Stip. ¶¶ 1, 3).
On August 15, 2001, Atomic Ski and CIT entered into an agreement. See Docket No. 21, at 9 (Stip. ¶ 3). The agreement basically addressed setting up an account for CIT with Atomic Ski. See Docket No. 21, at 5 (agreement). For example, the agreement provided that "Applicant [CIT] hereby certifies that the tangible personal property purchased from Atomic Ski... is purchased for resale [ i.e., to the general public]." Docket No. 21, at 5 (agreement). It also provided that Atomic Ski was authorized to investigate CIT's credit history and that, if CIT was accepted as an account of Atomic Ski, it would be bound by certain terms and conditions. See Docket No. 21, at 5 (agreement).
Mr. Wuthrich signed the CIT/Atomic Ski agreement as CIT's president. In connection with the agreement, Mr. Wuthrich also signed a personal guaranty in favor of Atomic Ski, guaranteeing payment of CIT's obligations to Atomic Ski. See Docket No. 21, at 10 (Stip. ¶ 4). The personal guaranty provided: "For Value Received from Atomic Ski... (Seller) as inducement to Seller to sell and deliver merchandise to above Applicant [CIT], the undersigned [Mr. Wuthrich], jointly and severally guarantee(s) prompt and punctual payment of any account owing from Applicant to Seller." Docket No. 21, at 5 (personal guaranty). The personal guaranty further provided: "This contract of guaranty shall remain in force until revoked by the guarantor by giving 10 days written notice by registered mail addressed to Seller." Docket No. 21, at 5 (personal guaranty).
Atomic Ski sold merchandise to CIT and was paid for the merchandise for many years without incident. See Docket No. 21, at 10 (Stip. ¶ 5).
In May 2010, CIT filed a Chapter 11 bankruptcy petition. Mr. Wuthrich executed the petition on behalf of CIT. See Docket No. 21, at 10 (Stip. ¶ 6). During the CIT bankruptcy, Atomic Ski/Amer continued to sell merchandise to CIT. See Docket No. 21, at 10 (Stip. ¶ 9). Atomic Ski/Amer was never listed as a creditor in the CIT bankruptcy, never received notice of the CIT bankruptcy, and was not aware of the CIT bankruptcy. See Docket No. 21, at 10 (Stip. ¶ 8).
In July 2010, Mr. Wuthrich and his wife filed a Chapter 7 bankruptcy petition. Atomic Ski/Amer was never listed as a creditor in the Wuthrich bankruptcy, never received notice of the Wuthrich bankruptcy, and was not aware of the Wuthrich bankruptcy. See Docket No. 21, at 10 (Stip. ¶ 12).
In December 2010, the bankruptcy court issued a discharge of debtor and final decree in the Wuthrich bankruptcy. See Docket No. 21, at 10 (Stip. ¶¶ 10-11).
In February 2012, the bankruptcy court entered an order in the CIT bankruptcy, confirming CIT's plan of reorganization. See ...