Myers v. Ostling

284 B.R. 614, 2002 U.S. Dist. LEXIS 18902, 2002 WL 31248005
CourtDistrict Court, E.D. Michigan
DecidedSeptember 27, 2002
Docket2:01-cv-73412
StatusPublished
Cited by3 cases

This text of 284 B.R. 614 (Myers v. Ostling) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Myers v. Ostling, 284 B.R. 614, 2002 U.S. Dist. LEXIS 18902, 2002 WL 31248005 (E.D. Mich. 2002).

Opinion

OPINION AND ORDER

STEEH, District Judge.

Jonathan Ostling, debtor in a bankruptcy proceeding, appeals from a July 17, 2001 opinion issued by Bankruptcy Judge Burton Perlman in a related adversary proceeding. The trial court found that plaintiffs were entitled to judgment against defendant in the amount of $447,407.00, and that 'the debt was nondischargeable in the debtor’s bankruptcy. For the reasons set forth below, the challenged July 17, 2001 opinion and order is affirmed.

BACKGROUND

In 1996, Albert and Paulyn Myers sought renters for a residence they had built as an investment. Defendant Jonathan Ostling and his wife Melaia Ostling, looking for housing, responded to a newspaper advertisement placed by the Myers. The Ostlings filled out a rental application, which plaintiffs submitted to a credit service. The credit reports indicated a fairly good credit rating for the defendant and a less favorable rating for Melaia Ostling. *616 The Plaintiffs leased the residence to the Ostlings on June 22, 1996 but only required Defendant to sign the lease, which included an option to buy.

Defendant and his family moved into the residence in July 1996 and thereafter left for a vacation in Tonga. As time progressed and after their return in August 1996, the Myers developed a relationship with Melaia Ostling. During this time, Melaia Ostling began making statements regarding her family’s wealth. Paulyn Myers contends Melaia further indicated Sione Tuineau, Melaia Ostling’s brother, had recently passed away leaving her a vast estate. Plaintiffs contend the defendant further stated this wealth would be “great” because he could pay cash for the purchase of the residence. Melaia Ostling met with the plaintiffs and a realtor to draw up documents for a new lease agreement. Defendant was not present and Melaia Ostling expressed defendant’s lack of interest in the residence and that defendant wanted a “bigger and better” home. Melaia Ostling signed the new lease agreement alone. Ultimately, the Myers were convinced to turn over what they assert was their life savings to Melaia Ostling, totaling approximately $479,000, as they were convinced that the money would be returned and that Melaia Ostling was in a position to offer them lucrative real estate management positions in exchange for the loan.

At trial, plaintiffs stated that as time progressed Melaia Ostling discussed her mother’s wealth and her father’s affiliation with the Tongan royal family. Plaintiffs assert defendant acknowledged and furthered Melaia Ostling’s misrepresentations. The defendant denied making these alleged falsehoods, and states if anything the statements were an ongoing joke between defendant and Melaia Ostling.

A year after the plaintiffs met defendant and his wife, Melaia asked Paulyn Myers to handle her finances. Melaia Ostling apparently communicated to Paulyn Myers her interest in the purchase of the home, but stated that she could not purchase it at the time because she was tied up in international dealings. Plaintiff further alleges Melaia Ostling stated she had inherited an apartment complex in Bloomfield Hills, Michigan and wanted plaintiffs to manage the complex. Defendant, meanwhile, contends he rarely spoke with plaintiffs because of a “falling out” with A1 Myers. Plaintiffs assert that Melaia Ostling told them that she and the defendant were having marital difficulties and that he was going to move out.

On January 30, 1997, Plaintiffs executed a land contract solely with Melaia Ostling. According to the plaintiffs, their attorney warned them to refrain from dealing with Melaia Myers. Nevertheless, plaintiffs state they began lending money to Melaia Ostling. In March 1997, a dinner took place at the Rattlesnake Club in downtown Detroit. Plaintiffs allege this was arranged as a meeting between the Myers and Melaia Ostling’s allegedly wealthy mother, who never made an appearance. On that occasion, plaintiffs asserted they had a conversation with defendant in which he advised plaintiffs to form an S Corporation if they were going to manage Melaia’s apartment complex. Plaintiffs also assert defendant commented that Melaia’s mother was staying at the Westin Hotel. However, * defendant denies making any such statements and maintains dinner at the Rattlesnake Club was a celebration of his profit-sharing bonus and the plaintiffs were unwelcome guests. Defendant attributes any comments made concerning an S Corporation to the fact that his father formed one.

*617 Plaintiffs state they were again invited to meet Melaia Ostling’s mother at defendant’s daughter’s basketball game. Plaintiffs apparently asked defendant if he knew of Melaia Ostling’s mother’s whereabouts, to which plaintiffs contend he told them she was not feeling well. Another instance in which defendant fabricated information about Melaia Ostling’s mother occurred when plaintiffs contacted defendant to relay a message from Melaia Ostling’s mother and defendant expressed surprise as she does not speak English, only Tongan. This was repeated on another occasion in the presence of builder Robert Roberts.

At trial, Robert Roberts testified he was hired in the summer of 1996 by the Myers to work on the basement of the residence rented by the Ostlings. Roberts testified at trial that defendant and his wife offered him an apartment complex management position, and described his conversations with defendant and Melaia Ostling regarding Melaia’s extensive wealth and royalty.

Roberts further asserted that the defendant discussed investment opportunities available to Roberts and defendant in the purchasing, repairing, and resale of property, and asserted that defendant and Roberts inquired into homes for this purpose. A formal business agreement was never agreed upon or drawn up between Roberts and defendant. Roberts’ testimony indicates he loaned defendant five thousand dollars which was immediately wired to Melaia Ostling in San Francisco. Although Melaia Ostling did endorse a check to repay the amount, the check bounced.

Roberts stated defendant and Melaia Ostling were looking for investment property they intended to rent to their nanny. Defendant disputes this allegation and states because of the marital strife the homes they were inquiring into were for defendant and defendant did not know why Roberts was “tagging along.”

In 1997 Melaia Ostling contacted Susan Richards, a realtor. Defendant and Melaia Ostling met Richards in the spring of 1998. Richards’ impression was that the Ostlings were in search of a home for their nanny. Defendant wrote an offer for property in Romeo, Michigan, which he asserted was for him as he and his wife were separating. Defendant paid a one-thousand dollar security deposit but never consummated the transaction.

Defendant and his wife subsequently met with Joe Isreal, a builder. Concerning the financing of a building project, Melaia Ostling stated payment for the project would be in cash. Defendant was present and did not correct Melaia Ostling’s statement. Moreover, Richards stated he gave listing sheets to defendant and witnessed him signing paperwork and offers. In approximately March 1998, Israel discussed with defendant the need for a retainer before a build-to-suit project could commence, in response to which defendant described his wife’s purported wealth to Richards.

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Cite This Page — Counsel Stack

Bluebook (online)
284 B.R. 614, 2002 U.S. Dist. LEXIS 18902, 2002 WL 31248005, Counsel Stack Legal Research, https://law.counselstack.com/opinion/myers-v-ostling-mied-2002.