FOR THE NORTHERN DISTRICT OF CALIFORNIA
EMANUEL Z. KOPSTEIN, No. 92-11234
v. A.P. No. 92-1273
EMANUEL Z. KOPSTEIN,
Memorandum of Decision
Before he filed his Chapter 7 petition, defendant Emanuel Kopstein was a seller of "gray
market" sporting goods. He entered into a series of three transactions with plaintiff Jeff Wilk
whereby Wilk would purchase sporting goods from a third party and immediately sell them to
Kopstein. Wilk was paid in full for the first two transactions, but received only $47,500.00 of
the $292,234.00 price for the third transaction. He seeks to have the remainder of his claim
declared nondischargeable for fraud pursuant to section 523(a)(2) of the Bankruptcy Code.
All three transactions were made pursuant to identical letters of credit issued by Bank of
America. The terms of the letters of credit required a packing list for each carton Wilk shipped
and a telegram from Wilk notifying Kopstein of each shipment with a copy to the bank. Wilk
did not comply with these terms for the first two transactions, but was paid anyway. The bank
escaped liability as to the third transaction because Wilk did not comply with the terms.
The crux of Wilk's fraud claim is the allegation that Kopstein "implied" that he need not
comply with the letter of credit terms for the third transaction. Kopstein flatly denied this, and
testified that he explicitly told Wilk that he would have to strictly comply with the terms of the
letter of credit in order to protect himself as to the third transaction because it was for a
considerably larger amount than the first two.
The burden is on Wilk to prove his case by a preponderance of the evidence; this he has
failed to do. The court finds no false statement by Kopstein, nor any conduct on Kopstein's part
which was fraudulent. The court must accordingly render judgment in favor of Kopstein.
Since the court has found no false statement on Kopstein's part, it is unnecessary for the
court to determine if there was any fraudulent intent. However, the court notes that all
circumstances negate any fraudulent intent on his part. Not only did he make partial payment,
but he also attempted to get the letter of credit amended to accommodate Wilk. These act are
inconsistent with Wilk's allegations that Kopstein set out to deceive him and never intended to
pay for the goods.
In his complaint, Wilk also sought denial of Kopstein's discharge. At trial, Wilk apparently
abandoned this claim and presented no evidence in relation to it. Accordingly, Kopstein is
entitled to his discharge.
For the foregoing reasons, Wilk will take nothing by his complaint which will be dismissed,
with prejudice. Kopstein will recover any costs of suit incurred in defending this adversary
Counsel for Kopstein shall submit an appropriate form of judgment. This memorandum
constitutes the court's findings and conclusions pursuant to FRCP 52(a) and FRBP 7052.
Dated: July 17, 1993 _______________________