Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-canb-3_13-ap-03185/USCOURTS-canb-3_13-ap-03185-0/pdf.json

Parties Involved:
Kieran Buckley
Plaintiff
David William Bartenwerfer
Defendant
Kate Marie Bartenwerfer
Defendant

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MEMORANDUM DECISION

UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

In re:

DAVID WILLIAM BARTENWERFER and

KATE MARIE BARTENWERFER,

Debtors.

KIERAN BUCKLEY,

Plaintiff,

v.

DAVID WILLIAM BARTENWERFER and 

KATE MARIE BARTENWERFER,

Defendants.

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Case No. 13-30827 HLB

Chapter 7

Adv. Proc. No. 13-03185 HLB

MEMORANDUM DECISION

I. INTRODUCTION

This matter came on for trial on January 19 and 22, 2016 

on Plaintiff Kieran Buckley’s complaint to determine the 

dischargeability of debt pursuant to 11 U.S.C. § 523(a)(2)(A).1 

The sole issue at trial was whether Defendants David and Kate 

Bartenwerfer fraudulently omitted disclosing material defects 

 

1 Unless otherwise indicated, all chapter, section and rule references are to 

the Bankruptcy Code, §§ 101–1532, or to the Federal Rules of Bankruptcy 

Procedure, Rules 1001–9036.

Signed and Filed: April 1, 2016

________________________________________

HANNAH L. BLUMENSTIEL

U.S. Bankruptcy Judge

Entered on Docket 

April 01, 2016

EDWARD J. EMMONS, CLERK 

U.S. BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA

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MEMORANDUM DECISION

plaguing real property sold by the Bartenwerfers to Mr. 

Buckley. 

Janet Brayer and Stephen Finestone appeared for Mr.

Buckley. Iain MacDonald and Matthew Olson appeared for the

Bartenwerfers. After the parties rested, the Court took the 

matter under advisement. 

This memorandum decision constitutes the Court’s findings 

of fact and conclusions of law as required by Rule 52(a) of the 

Federal Rules of Civil Procedure, as made applicable to this 

adversary proceeding by Rule 7052 of the Federal Rules of 

Bankruptcy Procedure. This court has jurisdiction over this 

action under 28 U.S.C. § 1334(b). The parties have consented 

to entry of final judgment by this Court in this action, which 

is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). 

Venue of this lawsuit is proper pursuant to 28 U.S.C. § 1409.

For the reasons that follow, the Court finds that the 

Bartenwerfers fraudulently omitted disclosing material defects 

on the subject property and that their related debt to Mr. 

Buckley is non-dischargeable pursuant to section 523(a)(2)(A).

II. BACKGROUND

Mr. Bartenwerfer received an MBA from Stanford in 1995. 

He has no education or training in construction and does not 

hold a contractor’s license. Mrs. Bartenwerfer has worked at 

McKesson for 10 years and is currently employed as a Manager. 

She also holds a California real estate agent’s license. 

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MEMORANDUM DECISION

Schedule I.2 The Bartenwerfers operate two businesses: RJUOP 

I, LLC, a property development business, and Parthenon Design. 

Statement of Financial Affairs no. 18. 

The Bartenwerfers bought and extensively remodeled a home

located at 549 28th Street, San Francisco, California (the 

“Property”), which they subsequently sold to Mr. Buckley. The 

Bartenwerfers signed disclosure statements regarding the 

condition of the Property on November 11, 2007. They signed 

the sales contract on January 24, 2008. Escrow closed on March 

14, 2008. Post-sale, Mr. Buckley discovered undisclosed 

defects and ultimately sued the Bartenwerfers in San Francisco

County Superior Court to recoup damages under a number of 

theories. After a 19-day trial, a jury entered a special 

verdict. As relevant to this proceeding, the jury found in 

favor of Mr. Buckley on his claim for Non-Disclosure of 

Material Facts as follows:

(1) The Bartenwerfers failed to disclose information that 

they knew or should have known about water leaks, 

window conditions, permits, and the fire escape.

(2) Mr. Buckley did not know and could not have 

reasonably discovered this information.

(3) The Bartenwerfers knew or reasonably should have 

known that Mr. Buckley did not know and could not 

have reasonably discovered the information.

 

2 The Court takes judicial notice of the documents filed in the underlying 

bankruptcy case (case no. 13-30827). Fed. R. Evid. 201 made applicable to 

bankruptcy proceedings pursuant to Fed. R. Bankr. Proc. 9017.

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MEMORANDUM DECISION

(4) This information significantly affected the value or 

desirability of the property.

(5) Mr. Buckley was harmed.

(6) The Bartenwerfers’ failure to disclose the 

information was a substantial factor in causing Mr. 

Buckley’s harm.

The state court entered a judgment against the 

Bartenwerfers in the amount of $444,671. After post-trial 

briefing, Mr. Buckley accepted a $210,000 reduction in the 

amount of the judgment, which was amended to award $234,671.

Mr. Buckley requests a finding of non-dischargeability

under section 523(a)(2)(A) as to the damages awarded by the 

state court for non-disclosure of issues relating to water 

leaks ($48,981), window conditions ($20,000), status of permits 

($14,888), and the fire escape ($5,076); the value/cost 

differential ($90,000); and costs of suit ($40,019.89) for a 

total non-dischargeable debt in the amount of $218,964.89. 

The Bartenwerfers do not dispute the amount of damages, 

but assert that they did not possess the fraudulent intent 

necessary to except the judgment from discharge under section 

523(a)(2)(A).3

 

3 The Defendants also argued in their trial brief that Mr. Bartenwerfer’s 

alleged fraudulent conduct could not be imputed to Mrs. Bartenwerfer based on 

their marital relationship. At trial, after Mr. Buckley rested his case-inchief, the Bartenwerfers moved for a directed verdict pursuant to Federal Rule 

of Civil Procedure 52(c), applicable in this proceeding via Rule 7052, as to 

Mrs. Bartenwerfer, on the grounds that Mr. Buckley failed to prove by a 

preponderance of the evidence that she had the requisite knowledge of the 

misrepresentations and omissions or intent to defraud, and that a marital 

relationship is insufficient to impute the fraud of one spouse to the other. 

The Court denied the motion for a directed verdict, finding that an agency 

relationship existed between Mr. and Mrs. Bartenwerfer based on their 

partnership with respect to the remodel project: she was on title to the 

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MEMORANDUM DECISION

III. LEGAL STANDARDS

A. Exception to Discharge under section 523(a)(2)

Section 523(a)(2)(A) provides: (a) A discharge under . . 

. this title does not discharge an individual debtor from any 

debt— . . . (2) for money, property, services, or an extension, 

renewal, or refinancing of credit, to the extent obtained by —

(A) false pretenses, a false representation, or actual fraud, 

other than a statement respecting the debtor’s or an insider’s 

financial condition. 11 U.S.C. § 523(a)(2)(A).

To prevail in a section 523(a)(2)(A) action, a creditor 

must prove five elements by preponderance of the evidence: (1) 

a misrepresentation, fraudulent omission or deceptive conduct 

by the debtor; (2) knowledge of the falsity or deceptiveness of 

his statement or conduct; (3) the debtor made the 

representation with the intention and purpose of deceiving the 

creditor; (4) the creditor justifiably relied on the 

representation; and (5) the creditor sustained damage as the 

proximate result of the representation. Turtle Rock Meadows 

Homeowners Ass’n. v. Slyman (In re Slyman), 234 F.3d 1081 1085 

(9th Cir. 2000).

B. Collateral Estoppel

Principles of collateral estoppel apply to proceedings 

seeking exceptions from discharge pursuant to 11 U.S.C. §

523(a). Grogan v. Garner, 498 U.S. 279, 284 n. 11 (1991). 

Under the Full Faith and Credit Act, 28 U.S.C. § 1738, the 

 

Property, signed the disclosure statements relating to the Property, and would 

financially benefit from the successful completion of the project and sale of 

the Property.

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MEMORANDUM DECISION

preclusive effect of a state court judgment in a subsequent 

bankruptcy proceeding is determined by the preclusion law of 

the state in which the judgment was issued. Harmon v. Kobrin

(In re Harmon), 250 F.3d 1240, 1245 (9th Cir. 2001) (citations 

omitted). Thus, California law governs the preclusive effect 

of Mr. Buckley’s judgment.

Under California law, collateral estoppel may only be 

applied if five threshold requirements are met and if its 

application furthers the public policies underlying the 

doctrine. Id. The policies the Court must consider are

preservation of the integrity of the judicial system, promotion 

of judicial economy, and protection of litigants from 

harassment by vexatious litigation. Lucido v. Superior Court, 

51 Cal. 3d 335, 343, 795 P.2d 1223, 1227 (1990).

The five threshold requirements are: (1) the issue to be 

precluded from relitigation must be identical to that decided 

in a former proceeding; (2) the issue must have been actually 

litigated in the former proceeding; (3) the issue must have 

been necessarily decided in the former proceeding; (4) the 

decision in the former proceeding must have been final and on 

the merits; and (5) the party against whom preclusion is sought 

must be the same as, or in privity with, the party to the 

former proceeding. Id. The party asserting collateral 

estoppel bears the burden of establishing these requirements. 

Id. 

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MEMORANDUM DECISION

IV. DISCUSSION

A. Collateral Estoppel Applies to the Jury Verdict

The state court jury verdict on Mr. Buckley’s cause of 

action for Seller Non-Disclosure of Material Facts found that 

the Bartenwerfers failed to disclose material information that 

they knew or should have known (misrepresentation); that Mr. 

Buckley did not know nor could have known about the omitted 

information (justifiable reliance); and that the omission of 

material information was a substantial factor contributing to 

Mr. Buckley’s harm (proximate cause and damages). Thus, these 

issues, which are identical to most of the elements Mr. Buckley 

would need to prove in order to prevail on his section 

523(a)(2)(A) claim, were actually and necessarily litigated in 

the state court action, which involved the same parties. No 

one disputes that the amended judgment is final. 

But beyond this, the Court finds that the principles 

underlying the doctrine of collateral estoppel are furthered by 

its application here as to these findings which satisfy 

elements (1), (4), and (5) of a 523(a) action, as enumerated 

above. The issues have already been decided so it would not be 

judicially economical to retry them. Furthermore, retrying the 

issues in this Court could result in a different outcome, which 

would negatively impact the integrity of the judicial system. 

As the Court previously found in the context of 

Plaintiff’s motion for summary judgment, the remaining 

elements; i.e., knowledge of the falsity of the statement and 

intent to deceive the creditor, were not actually litigated or

decided and were subject to a trial on the merits.

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MEMORANDUM DECISION

B. Knowledge and Intent

The scienter requirement for a fraudulent 

misrepresentation is established by showing either actual 

knowledge of the falsity of a statement, or reckless disregard 

for its truth. Gertsch v. Johnson & Johnson, Fin. Corp. (In re 

Gertsch), 237 B.R. 160, 167 (B.A.P. 9th Cir. 1999). Intent to 

deceive or reckless disregard for truth can be inferred from 

the totality of the circumstances. Id. at 167-68. “A 

representation may be fraudulent, without knowledge of its 

falsity, if the person making it ‘is conscious that he has 

merely a belief in its existence and recognizes that there is a 

chance, more or less great, that the fact may not be as it is 

represented.’” Id. at 168 (quoting Restatement (Second) of 

Torts § 526, cmt. E (1977)). 

An omission gives rise to liability for fraud only when 

there is a duty to disclose. Citibank, N.A. v. Eashai (In re 

Eashai), 87 F.3d 1082, 1089 (9th Cir. 1996). “[A] party to a 

business transaction has a duty to disclose when the other 

party is ignorant of material facts which he does not have an 

opportunity to discover.” Apte v. Japra M.D., F.A.C.C., Inc.

(In re Apte), 96 F.3d 1319, 1324 (9th Cir. 1996). 

In addition, California law requires a seller of real 

property to make certain disclosures of which the seller has 

knowledge at the time of the disclosure. Cal. Civ. Code §§ 

1102 et seq. These disclosures must be made in good faith, 

which requires honesty in fact in conducting the transaction. 

Cal. Civ. Code § 1102.7. 

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MEMORANDUM DECISION

At trial, Mr. Bartenwerfer admitted that he understood 

that the disclosures he made pursuant to California Civil Code 

section 1102 constituted his representations as to the 

condition of the Property. These representations belong to 

Mrs. Bartenwerfer, too, given that she signed them. The 

substance of these representations and the extent to which they 

did not accurately or completely disclose the Property’s 

condition, merit further discussion.

On November 11, 2007, the Bartenwerfers signed a Real 

Estate Transfer Disclosure Statement (the “Disclosure 

Statement”) certifying that the information therein was true 

and correct to the best of their knowledge as of that date. 

Plaintiff’s Ex. 2 at 3.4 The Bartenwerfers also signed a 

Seller’s Supplemental to the Real Estate Transfer Disclosure 

Statement (the “Supplemental Disclosure” and, together with the 

Disclosure Statement, the “Disclosures”) on November 11, 2007, 

stating that they answered the questions therein in “in an 

effort to fully disclose all material facts relating to the 

Property and hereby certify that the information provided is 

true and correct to the best of my knowledge.” Id. at 7.

On January 24, 2008, the Bartenwerfers signed a Contract 

for the Sale and Purchase of Real Property (the “Contract”), 

representing that “Seller has no knowledge or notice that the 

Property has any material defects other than as disclosed by 

the Seller in the [Disclosure Statement] or other writing 

 

4 Mrs. Bartenwerfer is identified as “Kate Pfenninger,” which the Court 

believes to be her maiden name.

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MEMORANDUM DECISION

before Acceptance or a soon thereafter as practicable.” 

Plaintiff’s Ex. 1 at 6, ¶ 19. The Bartenwerfers made no 

additional written disclosures beyond what was contained in the 

Disclosures and Contract. Mr. Bartenwerfer admitted that he 

understood that he had an ongoing duty to disclose to Mr. 

Buckley any material defects; i.e., anything a buyer would want 

to know before purchasing the Property.

1. Mr. Bartenwerfer’s Credibility

At trial, in an apparent effort to try to protect Mrs. 

Bartenwerfer from having any findings of fraudulent intent 

imputed to her, Mr. Bartenwerfer testified that he did not 

prepare the Disclosure Statement on behalf of Mrs. 

Bartenwerfer. This testimony contradicted his testimony during 

the state court trial that he had prepared the Disclosure 

Statement on behalf of his wife. Reporter’s Transcript of 

Trial Proceedings David Bartenwerfer’s Testimony, September 5, 

2012 at 94. 

In addition, when asked whether Mrs. Bartenwerfer 

authorized him to complete the Supplemental Disclosure on her 

behalf, Mr. Bartenwerfer avoided answering the question 

directly, stating that she sat at the kitchen table while he 

filled it out but did not herself have the necessary 

information. This testimony was inconsistent with his 

testimony during the state court trial which explicitly 

acknowledged that Mrs. Bartenwerfer authorized him to complete

the Supplemental Disclosure on her behalf. Id. at 111-12.

The Court finds that these inconsistent statements, as 

well as others made during trial, as noted below, significantly 

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MEMORANDUM DECISION

and negatively affect the credibility of Mr. Bartenwerfer’s 

testimony 

2. Water Leaks

The Bartenwerfers answered “No” to the question on the 

Supplemental Disclosure that asked: “Are there any past or 

present leaks or water intrusion from or through the roof, 

skylights, windows, siding, basement, foundation, or any other 

source? (please itemize even if leaks have been stopped).” Id.

at 6.

At trial, Mr. Bartenwerfer admitted that he paid Freutel 

Roofing Inc. to repair leaks, specifically a leak above the 

master bedroom closet near the deck. Freutel Roofing submitted 

a quote for $1,600 to do work including patching the membrane 

at the deck area, adding material to the upper roof to get 

better drainage, and replace and seal base at same area of 

roof. The quote is dated October 17, 2007, less than a month 

before the Bartenwerfers signed the Supplemental Disclosure, in 

which they represented that there were no past or present 

leaks. In 2008-2009, Mr. Buckley discovered a leak in the 

master bedroom ceiling, below the deck, as well as other leaks, 

including one in the media room. 

Mr. Bartenwerfer admitted that he did not amend the 

Disclosures to disclose the leak and testified that he did not 

believe he had to disclose the leak because it occurred during 

the construction process and was corrected before the 

construction was complete. Mr. Bartenwerfer admitted that he 

did not disclose the leak to his realtor, Peter Monti, because 

it “didn’t feel like a big deal.” Mr. Bartenwerfer denies any 

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MEMORANDUM DECISION

intent to deceive and asserts that he made a simple mistake. 

The Court does not find Mr. Bartenwerfer’s testimony credible, 

especially in light of the fact that the leak was repaired so 

close in time to the Supplemental Disclosures and at the very 

end of the construction on the Property. Considering the 

totality of the circumstances, including those relating to the 

other non-disclosures, the Court finds and concludes that the 

Bartenwerfers had the requisite knowledge and intent to deceive 

Mr. Buckley with respect to non-disclosure of the leak.

3. Permits

On the Supplemental Disclosure, the Bartenwerfers indicated 

that every time a permit for work on the Property was applied 

for, it was issued, but that an inspector did not approve the 

work by signing off on each permit after the relevant 

construction work was completed. Plaintiff’s Ex. 2 at 6. The 

Bartenwerfers provided an explanation, stating that they let the

“permit to update original kitchen [to] expire because of 

floorplan change, new kitchen completed with permits.” Id. The 

Bartenwerfers did not disclose any additional open permits.

At trial, Mr. Bartenwerfer admitted that at the time he 

signed the Disclosures he was aware that electrical and plumbing 

work had not been approved by an inspector, that the permits had 

not received final sign off, and that a lack of final sign off on 

electrical and plumbing permits is something a buyer would want 

to know. Mr. Bartenwerfer admitted that as of November 11, 2007 

– the date the Bartenwerfers signed the Disclosures – there were 

ten permits which had not been signed off as complete. Mr. 

Bartenwerfer asserted that he did not disclose the open permits 

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MEMORANDUM DECISION

because he thought they were “basically done” and would be signed 

off at any time. But, Mr. Bartenwerfer also admitted that he was 

aware that the plumbing and electrical permits had not been 

signed off as final as of January 22, 2008, the date of Mr. 

Buckley’s offer to buy the Property. Though more than two months 

had passed since they signed the Disclosures, the Bartenwerfers 

still did not disclose the open permits to Mr. Buckley.

Mr. Bartenwerfer admitted at trial that he received a 

Notice of Violation, dated January 31, 2008, which stated in 

relevant part that all permits had expired and no special 

inspection reports had been submitted (18 reports were 

required). He also admitted that he did not disclose the 

Notice of Violation or the expired permits to Mr. Buckley or 

Mr. Monti, and that he did not provide all permits to Mr. 

Buckley until after close of escrow. Mr. Monti testified that 

he had never seen the Notice of Violation and that such a 

notice would require the Disclosures to be amended. In his 

defense at trial, Mr. Bartenwerfer stated that the Notice of 

Violation was “an administrative issue” and that he did not 

think he had to disclose it. The Court finds that by the end 

of January 2008, Mr. Bartenwerfer was aware that the 

undisclosed open permits had expired and still did not disclose 

them to Mr. Buckley.

On March 13, 2008, the day before escrow closed, Mr. 

Buckley’s realtor, Josh Nasvik, sent an email to Mr. Monti 

itemizing the remaining repairs to be completed. At trial, Mr. 

Bartenwerfer testified that he understood that the items on the 

list were all that needed to be resolved and that the list did 

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not mention permits. When asked if he was aware at that time 

that the electrical permit had not been closed out, Mr. 

Bartenwerfer testified he was not sure what he thought at that 

time because “there was confusion” around the electrical sign 

off; i.e., one of the job cards showed the final electrical 

inspection was completed on January 30, 2008. 

The Court does not find Mr. Bartenwerfer’s testimony 

credible because, on February 19, 2008, Mr. Buckley sent an 

email to Henry Karnilowicz of Occidental Express, a company 

helping Mr. Bartenwerfer through the permitting process, 

stating “we failed yet another electrical inspection.” 

Plaintiff’s Ex. 16. Accordingly, the Court finds that and 

finds that on March 13, 2008, Mr. Bartenwerfer was aware that 

the electrical permit had not been closed out. Mr. 

Bartenwerfer testified that he did not think he informed Mr. 

Nasvik or Mr. Monti of the failed inspection prior to the close 

of escrow. Mr. Bartenwerfer also admitted that he did not 

request a modification of the Disclosures to reflect the failed 

inspection, though he considered it to be material. 

Considering the totality of the circumstances, including 

those surrounding the other material non-disclosures, the Court 

finds that the Bartenwerfers omitted information about the 

status of permits up through the time of the close of escrow 

with the intent to deceive Plaintiff. The Disclosures would 

lead a reasonable person to believe that the only outstanding 

permit issues related to the kitchen, when in fact there were 

10 outstanding permits that had continuing issues through to 

the time of close of escrow in March 2008 and beyond, including 

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MEMORANDUM DECISION

their expiration in January 2008. Though they received the 

Notice of Violation and failed inspections, the Bartenwerfers 

failed to notify Mr. Buckley of these issues despite their duty 

to do so until sometime after close of escrow. Accordingly, 

the Court finds and concludes that the Bartenwerfers had the 

requisite knowledge and intent to deceive Mr. Buckley with 

respect to non-disclosure of the status of permits.

4. Windows

The Bartenwerfers answered “No” to the question on the 

Disclosure Statement as to whether they were aware of “any 

significant defects/malfunctions” in windows. Plaintiff’s Ex. 

2 at 3. They also did not disclose any problems with windows 

in the Supplemental Disclosure.

At the state court trial, Mike Barbic, a service 

technician for Pella Windows, testified that on February 7, 

2008, he made a site visit to the Property and noted that 

several windows had been installed “out of square;” i.e., they

were set crooked in the frames and did not function properly. 

Joint Designation of Trial Transcript Testimony – Mike Barbic 

at 14, 16-18. Mr. Barbic testified that he advised the 

Bartenwerfers of the problem and that it was an installation 

error. Id. at 22-23. He recalled telling the Bartenwerfers

the following details:

In specific there was a window in front of the house 

that I believe there was some kind of a railing or 

something in the way. The window wouldn’t open all the 

way, but it would not close all the way. And there is 

no adjustments we could to help even – you know, the 

frame was out of square. Typically what we would do is 

we can adjust the hinges to allow the window to close, 

but in this case the railings were in the way. And I 

said there was no way we could fix the window or adjust 

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the window in the condition that it was because I was 

not able to open it up to adjust it. 

Id. at 24-25. Mr. Barbic also told the Bartenwerfers that a 

window in the master bedroom had been installed out of square. 

Id. at 29. In addition, Mr. Barbic found that the windows were 

sticking between the weather stripping and the paint on the 

sash. Id. at 31. Mr. Barbic advised the Bartenwerfers to use 

paraffin wax to stop the sticking. Id. Mr. Barbic testified 

that the application of wax would not address the out of square 

issues. Id. at 32. 

At trial in this proceeding, Mr. Bartenwerfer stated that 

he did not recall whether someone from Pella Windows had told 

him that the windows were out of square and needed to be 

reinstalled. He recalled being told that an installed door was 

out of square, and that his brother, Dale Bartenwerfer – who is 

not a contractor, has no expertise in California building 

codes, and has no education or training in building codes –

told him all that of the window were working properly. Mr. 

Bartenwerfer testified during his state court trial proceeding 

that he did not disclose the problem with the door to Mr. 

Buckley because his contractor, Sergio Sepeda, told him that it 

was impossible for the doors to have been installed improperly 

and that therefore, Mr. Bartenwerfer believed the problem to be 

a manufacturing defect. Reporter’s Transcript of Trial 

Proceedings David Bartenwerfer’s Testimony, September 6, 2012 

at 13. At trial in this proceeding, Mr. Bartenwerfer testified 

that he surmised that the problem with the windows was a 

manufacturing defect but does not know for sure. Mr. 

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Bartenwerfer testified that he did not recall disclosing the 

suspected manufacturing defect to Mr. Buckley or to Mr. Monti.

The Court does not find Mr. Bartenwerfer’s testimony that 

he was unaware that the windows had been installed out of 

square credible, because: (a) he had a conversation with his 

brother about whether the windows were working properly; (b)

he testified at trial that he believed the window problem to be 

a manufacturing defect; and (c) Mr. Barbic’s testimony as to 

what he told the Bartenwerfers about the windows being out of 

square is so detailed and specific and therefore, reliable and 

credible.

Regardless, even if they believed the window and door 

problems to be manufacturing defects rather than installation 

problems, the Bartenwerfers should have disclosed these defects

to Mr. Buckley. Pella Windows was asked to come out to the 

Property as early as January 2, 2008, long before Mr. Buckley 

delivered his list of repairs to be made. This strongly 

suggests that the Bartenwerfers were aware of door and window 

problems before Mr. Buckley discovered them. Accordingly, 

based on the foregoing and the facts and circumstances 

surrounding the other non-disclosures, the Court finds and 

concludes that the Bartenwerfers had the requisite knowledge 

and intent to deceive Mr. Buckley with respect to nondisclosure of the window problems.

5. Fire Escape

The Disclosures contained no information about a fire 

escape. On October 26, 2008, Mr. Bartenwerfer received an 

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email from Mr. Karnilowicz. Mr. Karnilowicz stated in the 

email, 

I am somewhat concerned about you giving [the buyer]

all the plans, which you will have to do, and I hope 

that he doesn’t notice the missing fire escape. I 

think you ought to wait till the CFC is issued before 

you hand over the plans or permits. 

Plaintiff’s Ex. 17. On the same day, Mr. Bartenwerfer received 

an email from Mr. Buckley which stated, 

For some reason the plans and permits you gave my real 

estate agent originally do not match or even come close 

to what you had with the inspector present Friday, ie 

you had given us 2 stamped pages of drawings while you 

had in your possession it seemed like 70-80 pages, you 

had given us one permit and you had 15 permits taken 

out. I will need a copy of all those plans and the 15 

permits as soon as possible.

Plaintiff’s Ex. 22.

At trial, Mr. Bartenwerfer testified that Mr. Karnilowicz 

advised him that he should not provide the plans to Mr. Buckley 

because, if he did so, he would not be able to get a final sign 

off on all the building permits. Mr. Bartenwerfer testified 

that a previous iteration of the plans included a fire escape 

but the final version did not. He testified that he relied on 

the approved plans, that the plans did not include a fire 

escape, that no fire escape was required because it was a twostory house, and that he had not intended to install one. 

Contrary to Mr. Bartenwerfer’s testimony at trial

suggesting that he had no duty to disclose the missing fire 

escape because it wasn’t included in the final plans, the jury 

in the state court found the omission of the lack of a fire 

escape was material and caused harm to Mr. Buckley. 

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Accordingly, based on the email exchange between Mr. 

Bartenwerfer and Mr. Karnilowicz, the fact that Mr. 

Bartenwerfer did not initially provide Mr. Buckley with a 

complete set of drawings and permits, and the facts and 

circumstances surrounding the other non-disclosures, the Court 

finds and concludes that the Bartenwerfers possessed the 

requisite knowledge and intent to deceive Mr. Buckley with 

respect to non-disclosure of the missing fire escape.

V. CONCLUSION

Based upon the above findings of fact and conclusions of 

law, the Court finds that Mr. Buckley has satisfied his burden of 

establishing by a preponderance of the evidence that the 

Bartenwerfers’s debt to Mr. Buckley with respect to the nondisclosure of water leaks, window conditions, permits, and the 

fire escape is nondischargeable under section 523(a)(2)(A). 

Accordingly, the Court will enter judgment in favor of Mr. 

Buckley consistent with this memorandum decision. 

**END OF ORDER**

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