Gerard Paul Rottiers and Amy Victoria Rottiers

1A copy of this claim is also attached to Rombauer’s Joinder
in Associated Winery Systems, Inc.’s Motion to Dismiss (doc 52).
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW MEXICO
In re:
GERARD PAUL ROTTIERS and
AMY VICTORIA ROTTIERS,
Debtors. 	No. 13-10-12000 SL
MEMORANDUM OPINION ON DEBTORS’
MOTION FOR SUMMARY JUDGMENT (doc 68) ON
DEBTORS’ OBJECTION TO ALLOWANCE OF PROOF OF
CLAIM #9 FILED BY ROMBAUER VINEYARDS, INC. (doc 47)
This matter is before the Court on Debtor’s Motion for
Summary Judgment (“Motion”)(doc 68) on their Objection to
Allowance of Proof of Claim #9 1 filed by Rombauer Vineyards, Inc.
(“Rombauer”) (doc 47). 	Rombauer filed a Response to the claim
objection (doc 610), to which Debtors Replied (doc 62). 	Rombauer
also filed a Response to Debtors’ Motion for Summary Judgment
(doc 78), to which Debtors replied (doc 82).
Debtors appear through their attorney Don Provencio.
Rombauer appears through its attorneys Thuma & Walker, A
Professional Corporation (David T. Thuma and Stephanie L.
Schaeffer). 	This is a core proceeding concerning both the
administration of the estate and allowance or disallowance of
claims against the estate. 	28 U.S.C. § 157(b)(2)(A) & (B). 	For
the reasons set forth below, the Court will deny the Motion for
Summary Judgment.
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THE OBJECTION TO THE PROOF OF CLAIM
Debtors objection is that the Rombauer claim is a claim
against Gerard Consulting, Inc., an entity Mr. Rottiers formed on
June 20, 2007 by filing, and the State of California by
accepting, articles of incorporation. 	Debtors argue that all
documents attached to the proof of claim demonstrate that the
true debtor is Gerard Consulting, Inc.
Rombauer’s Response to the claim objection (doc 61) is that
it entered into a contract with Gerald Rottiers. 	The contract
was “executed” by Mr. Rottiers, either individually or d/b/a
Gerard Rottiers Consulting. 	The first payment of $434,340 was
made to Gerard Rottiers Consulting and was deposited into Mr.
Rottiers’ individual bank account. 	Rombauer admits that at some
point Mr. Rottiers may have formed a corporation and assigned his
payment rights to it, but Rombauer has not released Mr. Rottiers
from his personal liability under the contract.
Debtors Reply (doc 62) points out that the contract does not
name “Rombauer Vineyards, Inc.” as a party, but names “Rombauer
Vineyards” which is arguably a different entity. 	Therefore,
Debtors claim that Rombauer is not a creditor in this case.
SUMMARY JUDGMENT
On this date the Court also enters a Memorandum Opinion on
Rombauer Vineyards, Inc.’s Motion for Summary Judgment on its
Motion to Dismiss based on 11 U.S.C. § 109(e) eligibility. 	In
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that Memorandum Opinion the Court discusses the standards for
ruling on a motion for summary judgment. 	That discussion will
not be repeated here but is incorporated by reference.
FACTS
Debtors’ Motion (doc 68) contains a statement of twenty-six
Undisputed Material Facts (“Facts”). 	Twenty-five of these Facts
are identical to the Debtors’ [thirty-two] Additional Undisputed
Facts in Debtors’ Response to Rombauer’s Motion for Summary
Judgment on its Motion to Dismiss (doc 74). 	Rombauer’s Responses
(doc 68) were identical to those it made to the Debtors’ [thirty-
two] Additional Undisputed Facts (doc 79). 	The only new proposed
fact in Debtors’ Motion is Fact 26: “On September 27, 2010,
Rombauer Vineyards, Inc. filed its Motion for Summary Judgment on
Motion to Dismiss.” 	Rombauer does not dispute this fact.
Therefore, the operative facts for this Motion are the following,
as set out in the Memorandum Opinion on Rombauer’s Motion for
Summary Judgment on Motion to Dismiss: 1-3, 6-9, and 12-29 and
Fact 26 listed above. 	For brevity, they are not repeated here.
The Court makes several additional observations. 	The
contract at issue was formed in Sonoma, California. 	It was
entered into by two entities with California addresses. 	The
contract called for performance in California. 	The contract
contains no choice of law provision.
When a federal court sits in diversity, it
generally applies the choice-of-law rules of the state
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in which it sits. 	Klaxon Co. v. Stentor Elec. Mfg.
Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).
It does so to avoid intrastate forum-shopping and
inconsistent results. 	Id. at 496, 61 S.Ct. 1020.
However, a federal bankruptcy court's jurisdiction does
not arise from diversity, but from federal bankruptcy
law, which has a goal of national uniformity rather
than congruence with state law. 	Yet state law governs
the validity of most property rights, and except when
the bankruptcy code specifies otherwise, bankruptcy
courts must apply the relevant state law. 	Butner v.
United States, 440 U.S. 48, 54, 99 S.Ct. 914, 59
L.Ed.2d 136 (1979); In re Wright, 492 F.3d 829, 832
(7th Cir. 2007) (“[S]tate law determines rights and
obligations when the [Bankruptcy] Code does not supply
a federal rule.”).
Jafari v. Wynn Las Vegas, LLC (In re Jafari), 569 F.3d 644, 648
(7th Cir. 2009), cert. denied, ___ U.S. ___, 130 S.Ct. 1077
(2010).
In Ferrell v. Allstate Ins. Co., 144 N.M. 405, 421-22, 188
P.3d 1155, 1172-73, 2008 -NMSC- 042, {55} (2008) the New Mexico
Supreme Court approved the use of the Restatement (Second) of
Conflict of Laws (1971) with respect to contract conflicts.
If the contract has a valid choice-of-law provision,
that law presumptively applies. 	Restatement (Second) §
187, at 561.
In the absence of an enforceable choice-of-law
provision, and if the rules regarding specific types of
contracts or specific issues in contract do not supply
the law to be applied, the Restatement (Second) relies
on the “most significant relationship” test which is
used to determine which state has the most significant
relationship to the transaction and to the parties.
Id. § 188(1), at 575. 	A court considers a variety of
contacts when making a determination about which
state's law applies to the dispute. 	See id. (listing
the following relevant contacts “(a) the place of
contracting, (b) the place of negotiation of the
contract, (c) the place of performance, (d) the
location of the subject matter of the contract, and (e)
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the domicil, residence, nationality, place of
incorporation and place of business of the parties”).
Id. at 144 N.M. at 421-22, 188 P.3d at 1172-73, 2008 -NMSC- 042
at {54}-{55}. 	Based on the test in the Restatement, the Court
will apply California law.
CALIFORNIA LAW ON AMBIGUITY
California abandoned the “four corners” approach to contract
interpretation at least as early as 1968 in Pacific Gas and
Electric Co. v G. W. Thomas Drayage & Rigging Co., 69 Cal.2d 33,
442 P.2d 641, 69 Cal.Rptr. 561 (1968). 	In that case, the trial
court found that a contract had a plain meaning and refused to
admit any exstrinsic evidence that would contradict the court’s
interpretation. 	Id. at 36, 442 P.2d at 642, 69 Cal.Rptr. at 563.
When a court interprets a contract on this basis, it
determines the meaning of the instrument in accordance
with the ‘* * * extrinsic evidence of the judge's own
linguistic education and experience.’ 	(3 Corbin on
Contracts (1960 ed.) (1964 Supp. s 579, p. 225, fn.
56).) 	The exclusion of testimony that might contradict
the linguistic background of the judge reflects a
judicial belief in the possibility of perfect verbal
expression. 	(9 Wigmore on Evidence (3d ed. 1940) s
2461, p. 187.) 	This belief is a remnant of a primitive
faith in the inherent potency and inherent meaning of
words.
Id. at 36-37, 442 P.2d at 643-44, 69 Cal.Rptr. at 563-64.
(Footnotes omitted.) 	The court continued:
The test of admissibility of extrinsic evidence to
explain the meaning of a written instrument is not
whether it appears to the court to be plain and
unambiguous on its face, but whether the offered
evidence is relevant to prove a meaning to which the
language of the instrument is reasonably susceptible.
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A rule that would limit the determination of the
meaning of a written instrument to its four-corners
merely because it seems to the court to be clear and
unambiguous, would either deny the relevance of the
intention of the parties or presuppose a degree of
verbal precision and stability our language has not
attained.
Some courts have expressed the opinion that
contractual obligations are created by the mere use of
certain words, whether or not there was any intention
to incur such obligations. 	Under this view,
contractual obligations flow, not from the intention of
the parties but from the fact that they used certain
magic words. 	Evidence of the parties' intention
therefore becomes irrelevant.
Id. at 37-38, 442 P.2d at 644, 69 Cal.Rptr. at 564. (Footnotes
and citations omitted.)
Accordingly, rational interpretation requires at
least a preliminary consideration of all credible
evidence offered to prove the intention of the parties.
Such evidence includes testimony as to the
circumstances surrounding the making of the agreement
including the object, nature and subject matter of the
writing so that the court can place itself in the same
situation in which the parties found themselves at the
time of contracting. 	If the court decides, after
considering this evidence, that the language of a
contract, in the light of all the circumstances, is
fairly susceptible of either one of the two
interpretations contended for extrinsic evidence
relevant to prove either of such meanings is
admissible.
Id. at 39-40, 442 P.2d at 645-46, 69 Cal.Rptr. at 565-66.
(Footnotes and citations omitted.) 	Therefore, the California
Supreme Court found that the trial court had erred in excluding
parol evidence and reversed. 	Id. at 41, 442 P.2d at 646, 69
Cal.Rptr. at 566.
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2Note the references to the California statutes. 	California
has also codified the law regarding contract interpretation to
supplement the case law. 	See California Civil Code, Division 3
(Obligations), Title 3 (Interpretation of Contracts) §§ 1635-57
and California Code of Civil Procedure, Part 4 (Miscellaneous
Provisions), Title 1 (General Principles of Evidence) §§ 1856-64.
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Since 1968, a host of California and District of California
cases have followed the reasoning of 	Pacific Gas, explaining its
meaning and demonstrating its method of application. 	E.g., Adobe
Systems Inc. v. One Stop Micro, Inc., 84 F.Supp.2d 1086, 1090
(N.D. Cal. 2000):
In interpreting [a contract], the Court must give
effect to the mutual intention of the parties. 	See
Waller v. Truck Ins. Exchange, Inc., 11 Cal.4th 1, 18,
44 Cal.Rptr.2d 370, 900 P.2d 619 (1995). 	The parties'
intent is inferred exclusively from the language of the
contract, assuming the language is “clear and
explicit.” 	See Cal.Civ.Code. § 1638 2. 	Under the parol
evidence rule the Court is prohibited from considering
any extrinsic evidence to vary or add to the terms of a
contract. 	See LaCount v. Hensel Phelps Constr. Co., 79
Cal.App.3d 754, 770, 145 Cal.Rptr. 244 (1978).
“However, the exception to the parol evidence rule is
broad-extrinsic evidence is admissible to demonstrate
that there is an ambiguity in an instrument and for the
purpose of construing this ambiguity.” 	Id. 	Among the
extrinsic evidence a court may consider are custom and
usage of words in a certain trade. 	See id.; see also
Cal.Civ.Proc.Code § 1856(c) (the terms of a contract
“may be explained or supplemented by course of dealing
or usage of trade.”).
See also Falkowski v. Imation Corp., 132 Cal.App.4th 499, 505-06,
33 Cal.Rptr.3d 724, 729-30 (Ct.App. 2005):
When faced with a dispute over the meaning of a
contractual provision, the court must first determine
whether the provision is ambiguous, i.e., whether, on
its face, the language of the provision is capable of
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different, yet reasonable interpretations. 	(Curry v.
Moody (1995) 40 Cal.App.4th 1547, 1552, 48 Cal.Rptr.2d
627; Southern Cal. Edison Co. v. Superior Court (1995)
37 Cal.App.4th 839, 848, 44 Cal.Rptr.2d 227.) 	If an
ambiguity is found, the court must determine which of
the plausible meanings the parties actually intended.
(Civ.Code, § 1636; Waller v. Truck Ins. Exchange, Inc.
(1995) 11 Cal.4th 1, 18, 44 Cal.Rptr.2d 370, 900 P.2d
619; 	Curry v. Moody, at p. 1552, 48 Cal.Rptr.2d 627.)
When the parties offer no extrinsic evidence concerning
the meaning of the contractual language, or when the
extrinsic evidence offered is not in conflict,
ascertaining the intended meaning is solely the duty of
the court. 	(St. Paul Fire & Marine Ins. Co. v.
American Dynasty Surplus Lines Ins. Co. (2002) 101
Cal.App.4th 1038, 1048, 124 Cal.Rptr.2d 818; Southern
Cal. Edison Co. v. Superior Court, at p. 851, 44
Cal.Rptr.2d 227.)
In determining which of the plausible meanings was
intended, we are required to deduce the parties' intent
from the language of the contract alone, if possible.
(Civ.Code, § 1639; Founding Members of the Newport
Beach Country Club v. Newport Beach Country Club, Inc.
(2003) 109 Cal.App.4th 944, 955, 135 Cal.Rptr.2d 505.)
Accordingly, at least in the first instance,
contractual interpretation turns on “what was intended
by what was said—not what a party intended to say.”
(Los Angeles City Employees Union v. City of El Monte
(1985) 177 Cal.App.3d 615, 622, 220 Cal.Rptr. 411.) In
evaluating the contractual language, however, we also “
‘tak[e] into account all the facts, circumstances and
conditions surrounding the execution of the contract.’”
(Frankel v. Board of Dental Examiners (1996) 46
Cal.App.4th 534, 544, 54 Cal.Rptr.2d 128, quoting
Floystrup v. City of Berkeley Rent Stabilization Bd.
(1990) 219 Cal.App.3d 1309, 1318, 268 Cal.Rptr. 898.)
and see Dore v. Arnold Worldwide, Inc., 39 Cal.4th 384, 391, 139
P.3d 56, 60, 46 Cal.Rptr.3d 668, 673 (2006)(“As California courts
previously have observed, the meaning of language is to be found
in its applications. 	An indeterminacy in the application of
language signals its vagueness or ambiguity. 	An ambiguity arises
when language is reasonably susceptible of more than one
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application to material facts. 	There cannot be an ambiguity per
se, i.e., an ambiguity unrelated to an application.”)(Citations
and internal punctuation omitted.) 	See also Cedars-Sinai Medical
Center v. Shewry, 137 Cal.App.4th 964, 979-80, 41 Cal.Rptr.3d 48,
60 (Ct.App. 2006):
When a dispute arises over the meaning of contract
language, the first question to be decided is whether
the language is reasonably susceptible to the
interpretation urged by the party. 	If it is not, the
case is over. 	If the court decides the language is
reasonably susceptible to the interpretation urged, the
court moves to the second question: what did the
parties intend the language to mean? 	Whether the
contract is reasonably susceptible to a party's
interpretation can be determined from the language of
the contract itself or from extrinsic evidence of the
parties' intent. 	Extrinsic evidence can include the
surrounding circumstances under which the parties
negotiated or entered into the contract; the object,
nature and subject matter of the contract; and the
subsequent conduct of the parties.
California recognizes the objective theory of
contracts, under which it is the objective intent, as
evidenced by the words of the contract, rather than the
subjective intent of one of the parties, that controls
interpretation. 	The parties' undisclosed intent or
understanding is irrelevant to contract interpretation.
(Citations and internal punctuation omitted.)
APPLICATION OF THE LAW
Debtors argue that based on the extrinsic evidence, the
contract at issue is one between Gerard Consulting, Inc. and
either Rombauer or an entity “Rombauer Vineyards” (which has not
filed a proof of claim). 	Rombauer, on the other hand,
understandably argues, based on the language of the contract and
extrinsic evidence, that the parties are Rombauer Vineyards, Inc.
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and either Gerard Consulting (a d/b/a of Mr. Rottiers) or Mr.
Rottiers.
Debtors point out that the Proposal, on top, indicates the
parties are Gerard Rottiers Consulting and Rombauer Vineyards,
and that neither party is identified as a corporation. 	They also
offer evidence that Mr. Rottier refused to proceed until the
corporate papers were finalized and that Rombauer was aware of
this from emails and conversations. 	The signature at the bottom
of the proposal is Gerard Rottiers, with no corporate
designation. 	However, the signature is to a statement: “Prepared
by.” 	On the other hand, the other signature, by Rombauer is to
the statement: “Accepted By.” 	The signatures are ambiguous; are
the parties distinguishing Rottiers as mere scrivener of the
contract as opposed to being a party? 	Debtors also argue that
the invoice for the first payment was corporate. 	The first
payment was to Gerard Rottier Consulting, but they explain,
reasonably, why it was written this way and why it was deposited
personally. 	They also argue that, as a matter of the course of
dealing, all subsequent checks were payable to a corporation and
deposited in a corporate account. 	The demand letters were sent
to Gerard Consulting, Inc. 	Isolated portions of deposition
testimony also suggests that Rombauer may have been aware that
they were dealing with a corporation.
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3There is also one issue undeveloped in the record and not
discussed by the parties. 	Debtor’s Objection to the Rombauer
proof of claim, Exhibit 1 (doc 47, pp. 4-5) shows that Gerard
Consulting, Inc.’s articles were filed with the California
Secretary of State on June 20, 2007. 	The Proposal was dated June
20, 2007 at the top. 	Doc 52-1, p.5. 	At the bottom it states
“Prepared by Gerard Rottiers”. 	Mr. Rottiers signed it and dated
it June 20, 2007. 	Doc 52-1, p.11. 	The bottom also states
“Accepted by Rombauer Vineyards”. 	There is a substantially
illegible signature, but it appears that the last name begins
with an “R” and contains an “a” and “u”. 	However, it is dated
July 10, 2007. 	(The date might be 20, the writing is difficult
to read.) 	Then, the first check was written on June 21, 2007 and
posted on June 22, 2007. 	Doc 52-1, p.15. 	If Rombauer accepted
in July, then there was an existent corporation. 	If Rombauer
really accepted on June 20, with an error in the written date,
then the exact hour of incorporation may become an issue. 	And,
if the hour is unknown, there is surely argument to be had on
whether that matters and/or what is an incorporator’s liability
for preformation debts when the creditor does or does not know of
the pending incorporation.
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All of Debtors’ evidence suggests that their interpretation
of the contract is plausible.
Rombauer submitted an affidavit that states there is no such
entity as Rombauer Vineyards, there is only Rombauer Vineyards,
Inc. 	Rombauer’s argument is straightforward: Debtor did not
incorporate until after formation of the contract and Rombauer
never relieved him of his liability 3. 	It also argues that this
is demonstrated by the first check, which was to Debtor’s d/b/a,
and its deposit in his personal account.
All of Rombauer’s evidence suggests that its interpretation
of the contract is plausible.
Therefore, the Court finds that the contract is ambiguous.
Because this is a motion for summary judgment, the Court must
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stop its analysis here. 	The Court cannot weigh the evidence on a
summary judgment motion. 	Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 249 (1986). 	All the Court can do is find the existence
of a disputed material fact. 	This contract is ambiguous and the
Court finds that, on the evidence on record, there is a genuine
issue as to who the parties are. 	The Motion for Summary Judgment
will be denied.
Honorable James S. Starzynski
United States Bankruptcy Judge
Date Entered on Docket: 	April 12, 2011
Copies to:
Donald Provencio
1721 Carlisle Blvd NE
Albuquerque, NM 87110-5621
Kelley L. Skehen
625 Silver Avenue SW
Suite 350
Albuquerque, NM 87102-3111
Paul M Fish
PO Box 2168
Albuquerque, NM 87103-2168
Samuel I Roybal
PO Box 1966
Albuquerque, NM 87103-1966
Stephanie L Schaeffer
Thuma & Walker, P.C.
500 Marquette NW Suite 650
Albuquerque, NM 87102
David T Thuma
500 Marquette Ave NW Ste 650
Albuquerque, NM 87102-5309
Office of the United States
Trustee
PO Box 608
Albuquerque, NM 87103-0608
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