Cheirett v. Biggs (In re Biggs), Bankruptcy Case No. 16–40558–JDP

• Decision Date: 07 February 2017
• Docket Number: Bankruptcy Case No. 16–40558–JDP,Adv. Proceeding No. 16–8026–JDP
• Citation: 563 B.R. 319
• Parties: IN RE: James R. BIGGS and Christina N. Biggs, Debtors. H. Clair Cheirett, Plaintiff, v. James R. Biggs, Defendant.
• Court: U.S. Bankruptcy Court — District of Idaho

563 B.R. 319

IN RE: James R. BIGGS and Christina N. Biggs, Debtors.H. Clair Cheirett, Plaintiff,

v.James R. Biggs, Defendant.

Bankruptcy Case No. 16–40558–JDP

Adv. Proceeding No. 16–8026–JDP

United States Bankruptcy Court, D. Idaho.

Signed February 7, 2017

Steven A. Wuthrich, Montpelier, Idaho, Attorney for Plaintiff.

Ryan E. Farnsworth, AVERY LAW, Idaho Falls, Idaho, Attorney for Defendant.

MEMORANDUM OF DECISION

Honorable Jim D. Pappas, United States Bankruptcy Judge

Introduction

Plaintiff H. Clair Cheirett commenced this adversary proceeding against Defendant James Robert Biggs alleging that a debt owed to him under a state court money judgment is excepted from discharge in Defendant's bankruptcy case under § 523(a)(4).¹ Dkt. No. 1. To that end, Plaintiff filed a motion for summary judgment—the subject of this decision. Dkt. No. 12. Defendant responded, albeit belatedly, the Court heard counsels' arguments on the motion, and took the issues under advisement. Dkt. Nos. 19, 23. This Memorandum resolves Plaintiff's motion.

Facts

Plaintiff has identified the following as the undisputed material facts.

Plaintiff owns two Radio Shack stores, including one in Afton, Wyoming. Compl., Dkt. No. 1 at ¶ 1; Aff. of H. Clair Cheirett, Dkt. No. 12–2 at ¶ 2. Defendant was employed at the Afton store from October 19, 2012, to July 15, 2013. Dkt. No. 1 at ¶ 3; Dkt. No. 12–2 at ¶ 3. Defendant stole cash and merchandise worth an estimated $20,000 during the brief term of his employment by Plaintiff. Dkt. No. 1 at ¶ 4; Dkt. No. 12–2 at ¶ 4. Defendant admitted he committed the thefts, and returned some of the merchandise and cash, having a total value of $4,078.94; Defendant still owes Plaintiff $15,921.06. Dkt. No. 1 at ¶ 4; Dkt. No. 12–2 at ¶ 5.

Plaintiff sued Defendant to recover his losses in state court on April 16, 2015. Dkt. No. 1 at ¶ 5; Dkt. No. 12–2 at ¶ 6.² Defendant, through counsel, filed an answer to Plaintiff's complaint on June 12, 2015. Dkt. No. 12–2 at ¶ 7. Plaintiff filed a motion for summary judgment, Dkt. No. 1 at ¶ 5; Dkt. No. 12–2 at ¶ 6; Defendant filed no response to the motion. Dkt. No. 1 at Ex. A; Dkt. No. 12–2 at ¶¶ 7–9.

Neither Defendant nor his counsel appeared at the January 7, 2016, hearing in state court on Plaintiff's motion. Dkt. No. 1 at Ex. A; Dkt. No. 12–2 at ¶ 9. At the hearing, Plaintiff's counsel advised the state court judge that Defendant's counsel had informed him that day that he was ill, and wished to continue the hearing; Plaintiff's counsel would not agree to a continuance. Dkt. No. 1 at Ex. A. The hearing proceeded and the state court granted Plaintiff's motion on January 11, 2016. Dkt. No. 1 at ¶ 6, and Ex. A. The court's minute entry and order stated that "the basis for this judgment is Defendant's embezzlement from his former employer, the Plaintiff." Id . A money judgment was entered in Plaintiff's favor against Defendant for $22,268.19 for the value of the stolen goods and cash, pre-judgment interest, court costs, and attorneys fees; post-judgment interest accrued on the judgment at the statutory rate, 5.375 percent per annum. Id . at ¶ 7 and Ex. B.

On June 24, 2016, Defendant filed a chapter 7 bankruptcy petition. BK Dkt. No. 1. On September 9, 2016, Plaintiff commenced this adversary proceeding. Dkt. No. 1. On October 11, 2016, Defendant, through counsel, filed an answer to the adversary complaint. Dkt. No. 7. On October 21, 2016, Plaintiff filed a motion for summary judgment. Dkt. Nos. 12, 14.

On January 6, 2017, Defendant filed a response to the motion. Dkt. No. 19. On January 9, 2017, Plaintiff replied to Defendant's response. On January 11, 2017, the morning of the noticed hearing on the motion, Defendant filed his affidavit opposing the summary judgment motion. Dkt. Nos. 20, 21. After hearing from counsel, the Court took the issues under advisement.

Analysis and Disposition

A. Summary Judgment Standard

Motions for summary judgment are governed by Civil Rule 56, made applicable in adversary proceedings by Rule 7056. The Rule instructs that the Court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Civil Rule 56(a); Wank v. Gordon (In re Wank) , 505 B.R. 878, 886 (9th Cir. BAP 2014) (Summary judgment is appropriate "if the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law."). A fact issue is "genuine" if there is enough evidence for a reasonable trier of fact to make a finding in favor of the non-moving party. Far Out Prods., Inc. v. Oskar , 247 F.3d 986, 992 (9th Cir. 2001). A fact is "material" if, "under the governing substantive law ... it could affect the outcome of the case." Caneva v. Sun Cmtys. Operating Ltd. P'ship (In re Caneva) , 550 F.3d 755, 760–61 (9th Cir. 2008) (quoting Thrifty Oil Co. v. Bank of Am. Nat'l Tr. & Savs. Ass'n , 322 F.3d 1039, 1046 (9th Cir. 2003) (citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) )).

In considering a motion for summary judgment, the Court may not weigh the evidence. In re Wank , 505 B.R. at 886. Nor may it make credibility determinations or make inferences in the course of its ruling, if it is possible to infer otherwise. Anderson , 477 U.S. at 255, 106 S.Ct. 2505. Indeed, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Id .

A party asserting that a fact is either undisputed, or is genuinely in dispute, "must support the assertion" through citation to specific portions of the record, "including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials" or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Civil Rule 56(c)(1); In re Caneva , 550 F.3d at 761 (quoting Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). "Once the moving party meets its burden, the non-moving party must ‘set out specific facts showing a genuine issue for trial.’ " In re Caneva , 550 F.3d at 761 (quoting Fed. R. Civ. P. 56(e)(2) ).

Finally, the Rule provides that if a party does not properly support an assertion of fact, or fails to address another party's assertion of fact, as required by Civil Rule 56(c), the Court may:

(1) give an opportunity to properly support or address the fact;

(2) consider the fact undisputed for purposes of the motion;

(3) grant summary judgment if the motion and supporting materials—including the facts considered undisputed—show that the movant is entitled to it; or

(4) issue any other appropriate order.

Civil Rule 56(e).

B. Procedural Issues

Plaintiff filed the motion for summary judgment in this adversary proceeding on October 21, 2016. Dkt. No. 12. In a notice properly served on Defendant's counsel, Plaintiff advised Defendant that the hearing on the motion would occur on January 11, 2017. Dkt. No. 14. Under the applicable Local Bankruptcy Rules for this District, Defendant was required to file and serve any submissions opposing Plaintiff's motion no later than fourteen days before the hearing, in this case, by December 28, 2016. LBR 7056.1(b)(2) ("If the opposing party desires to file affidavits or other materials, that party shall do so at least fourteen (14) days before the date of the hearing. The opposing party shall also file a responsive brief, and a statement of disputed and undisputed facts, at least fourteen (14) days prior to the hearing.").

In contravention to the time limits in the Local Bankruptcy Rules, here, Defendant filed no response to Plaintiff's summary judgment motion until January 6, 2017, a mere five days prior to the noticed hearing. Moreover, Defendant's affidavit supporting his objection to the motion was not filed until the morning of the hearing. The Local Bankruptcy Rules address the consequences of Defendant's noncompliance with the deadlines. Local Bankruptcy Rule 7056.1(d) provides:

[i]f a party fails to comply with the requirements of this rule or with applicable orders entered by the court related to motions or proceedings on summary judgment, or should it appear that affidavits are presented in bad faith or for purposes of delay, the court may continue the hearing and, after notice and a reasonable time to respond, may impose costs, attorney's fees and sanctions against a party, the party's attorney, or both.

At the January 11, 2017, hearing on the motion, the Court pointed out the requirements of the Local Bankruptcy Rules to Defendant's counsel, and sought his input regarding how the Court ought to proceed in light of Defendant's tardy submissions. The Court suggested that either Defendant's response and affidavit could be stricken, or the hearing could be continued to a later date with costs and fees to be imposed against Defendant, his counsel, or both.³ Defendant's counsel indicated he did not want the hearing continued, apparently preferring that the Court simply disregard Defendant's late-filed response and affidavit concerning Plaintiff's motion. Consistent with this election, the Court will do exactly that: it will strike Defendant's submissions and will treat Plaintiff's summary judgment motion as, essentially, unopposed.⁴

C. Plaintiff's Motion

Without effective opposition, Plaintiff has established as a matter of undisputed fact that Defendant owes Plaintiff a debt under the state court's money judgment. But though the Court will deem Defendant's responses to Plaintiff's motion stricken, thus removing any question about whether any material facts are in dispute, under Civil Rule 56, Plaintiff must nonetheless demonstrate that he is entitled to judgment as a matter of law. Plain...