Chi. Reg'l Council of Carpenters Pension Fund v. Van Der Laan (In re Van Der Laan)

• Decision Date: 24 August 2016
• Docket Number: Adversary No. 15 A 00910,Bankruptcy No. 15 B 31218
• Citation: 556 B.R. 366
• Parties: In re: Jerald Van Der Laan, Debtor. Chicago Regional Council of Carpenters Pension Fund, Chicago Regional Council of Carpenters Welfare Fund, and Chicago Regional Council of Carpenters Apprentice and Training Program Fund, Plaintiffs v. Jerald Van Der Laan, Defendant.
• Court: U.S. Bankruptcy Court — Northern District of Illinois

556 B.R. 366

In re: Jerald Van Der Laan, Debtor.Chicago Regional Council of Carpenters Pension Fund, Chicago Regional Council of Carpenters Welfare Fund, and Chicago Regional Council of Carpenters Apprentice and Training Program Fund, Plaintiffs

v.Jerald Van Der Laan, Defendant.

Bankruptcy No. 15 B 31218

Adversary No. 15 A 00910

United States Bankruptcy Court, N.D. Illinois, Eastern Division.

Signed August 24, 2016

Christopher L. Muniz, Bruce C. Scalambrino, Scalambrino & Arnoff, LLP, Chicago, IL, for Plaintiffs.

Gregory J. Jordan, Mark R. Zito, Jordan & Zito LLC, Chicago, IL, for Defendant.

MEMORANDUM OPINION ON PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT [DKT. NO. 16]

Jack B. Schmetterer, United States Bankruptcy Judge

Plaintiffs, Chicago Regional Council of Carpenters Pension Fund, Chicago Regional Council of Carpenters Welfare Fund, and Chicago Regional Council of Carpenters Apprentice and Training Program Fund (collectively, "the Funds") filed a complaint against the debtor in a voluntary chapter 7 case, Jerald Van Der Laan, to determine the dischargeability of a debt pursuant to § 523(a)(6) of the Bankruptcy Code. The debt is alleged to arise from transfers of corporate assets made by Van Der Laan after a citation to discover assets was served on him as president of the corporation. Van Der Laan did not dispute that the transfers alleged were made by him, but claimed such transfers were on the corporation's behalf and made to creditors of the corporation in the ordinary course of business. He also denied any debt was owed to the Funds by him personally.

Plaintiffs moved for summary judgment on their nondischargeability claim, arguing that the Defendant's prior admissions regarding his assertedly willful and malicious conduct in transferring corporate assets after the citation to discover assets was served entitled them to relief on their claim as a matter of law.

As discussed below, Defendant's admissions and other the evidence on the record establishes all factual issues necessary to determine dischargeability under § 523(a)(6). In response, Defendant has failed to create a triable issue as to any essential element of the nondischargeability claim. Because the admissible evidence on the record could not lead to contrary findings, Plaintiffs' motion for summary judgment will be granted.

SUMMARY JUDGMENT STANDARDS

A motion for summary judgment requires the court to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial. Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir.1999)(citing Anderson, 477 U.S. at 249–50, 106 S.Ct. 2505). Under Rule 56(a), Fed. R. Civ. P.,

A party may move for summary judgment, identifying each claim or defense—or the part of each claim or defense—on which summary judgment is sought. 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.

See Fed. R. Bankr. P. 7056(incorporating Fed. R. Civ. P. 56). To prevail on a motion for summary judgment, the moving party must establish that there is no genuine issue of material fact as to any essential element of a claim or defense. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. On a motion for summary judgment it is not the court's function to resolve factual disputes or to weigh conflicting evidence. Waukesha Foundry, Inc. v. Indus. Eng'g. Inc., 91 F.3d 1002, 1007 (7th Cir.1996). Summary judgment is proper when there is only one logical conclusion to be reached by the finder of fact. Marozsan v. United States, 90 F.3d 1284, 1290 (7th Cir.1996), cert. denied, 520 U.S. 1109, 117 S.Ct. 1117, 137 L.Ed.2d 317 (1997); see Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)("Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.' ").

The court "must construe all facts and draw all reasonable inferences in the light most favorable to the nonmoving party." Majors v. Gen. Elec. Co., 714 F.3d 527, 532 (7th Cir.2013). Summary judgment "is appropriate if the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. (internal quotation marks and citation omitted). "If, after an adequate opportunity for discovery, the non-movant does not come forward with evidence that would reasonably permit the finder of fact to find in her favor on a material question, then the court must enter summary judgment against her." Modrowski v. Pigatto, 712 F.3d 1166, 1167 (7th Cir.2013)(internal quotation marks and citation omitted). "A mere scintilla of evidence in support of the nonmoving party's position is not sufficient; there must be evidence on which the jury could reasonably find for the non-moving party." Harris N.A. v. Hershey, 711 F.3d 794, 798 (7th Cir.2013)(citing Anderson v. Liberty Lobby, Inc., 477 U.S. at 252, 106 S.Ct. 2505).

UNCONTESTED FACTS

Local Bankruptcy Rules 7056-1 and 7056-2 specify mandatory procedures for parties to a motion for summary judgment designed to simplify a determination as to whether a genuine dispute of fact exists, in part, by incorporating the parties' relative burdens in supporting or in opposing a motion for summary judgment under Fed. R. Bankr. P. 7056(incorporating Fed. R. Civ. P. 56). See generally Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 921–22 (7th Cir.1994).

Under Local Bankruptcy Rule 7056-1, Plaintiffs, as the movants for summary judgment, were required to file a statement of uncontested material facts in support of their motion, consisting of short, numbered paragraphs with citations to admissible evidence,¹ which they did [See Dkt. No. 18]. In response, Van Der Laan, as the party opposing summary judgment, was required to file his own statement, responding to each numbered paragraph and, in the case of disagreement, provide citations to evidence sufficient to establish a genuine dispute for trial exists by including specific reference to the affidavits, parts of the record or other supporting materials relied upon, as required by Local Bankruptcy Rule 7056-2(A)(2)(a).² "All material facts set forth in the statement required of the moving party will be deemed to be admitted unless controverted by the statement of the opposing party." L.R. 7056-2(B).

Van Der Laan filed his Response [Dkt. No. 28] to Plaintiff's Statement, and has specifically responded to most of the facts included in Plaintiffs' Statement by identifying them as "uncontested." Most of the facts identified in Plaintiffs' Statement have therefore been admitted, to the extent they have not been controverted by Van Der Laan's response to each.

The facts set forth below are drawn from the parties' respective statements and responses to those statements, and are deemed admitted for purposes of the summary judgment motion.

A. The Parties

Plaintiffs, Chicago Regional Council of Carpenters Pension Fund, Chicago Regional Council of Carpenters Welfare Fund, and Chicago Regional Council of Carpenters Apprentice and Training Program Fund (collectively "the Funds") for three separate and independent employee benefit plans governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq.The Funds provide medical, pension, training and other benefits to members of the Chicago Regional Council of Carpenters Union. (See Def.'s Resp. to Pl.'s L.R. 7056-1 Stmt. [hereinafter "Def.'s R esp ."], ¶ 4.)

Defendant, Jerald Van Der Laan is an individual and resident of Illinois, residing in Western Springs, Cook County, Illinois. (Id. ¶ 6.)

Van Der Laan Bros. Concrete Construction Company ("Company") is an Illinois corporation. Debtor was the Company's sole officer and shareholder at all times relevant hereto. (Id. ¶ 7.)

B. The Funds Sue the Company to Recover Unpaid Contributions

In 2012, the Funds sued the Company under the Employee Retirement Income Security Act ("ERISA"), 28 U.S.C. §§ 1001, et seq., seeking to recover unpaid health and welfare benefit contributions, plus liquidated damages, interest and legal fees (the "2012 Action"), in Chicago Regional Council of Carpenters Pension Fund, et al. v. Van Der Laan Brothers Concrete Contractors, Inc., N.D. Illinois Case No. 12 cv 7785 (Judge Kendall). (Id. ¶ 8.) The 2012 Action was filed on September 28, 2012. (Id. ¶ 9.)

On November 7, 2013, the Funds' motion for summary judgment in the 2012 Action was granted. (Id. ¶ 10.) Judgment for damages and attorney fees assessed was to be entered against the Company and in favor of the Funds at a later date. (See id. ¶¶ 11, 13.)

1. The BMO Harris Bank Account

On December 20, 2013, while the 2012 Action was still pending, Van Der Laan opened a second bank account for the Company at BMO Harris Bank. (Id. ¶ 24.) The Company had maintained its banking accounts at First Midwest Bank, the successor of Palos Bank & Trust Company since as far back as 2008. (Id. ¶ 23.)

Van Der Laan opened the BMO Harris Bank account because he was concerned that judgment creditors would execute on the Company's assets if they were in the Company's First Midwest Bank account. (See id. 25.)³

Van Der Laan controlled how the Company paid its bills and was the only signatory on the BMO Harris Bank account (Def.'s Resp. ¶ 26.) Funds deposited into the BMO Harris Bank account came from amounts paid on the Company's receivables. (Id. ¶ 27.)

2. Judgment for Damages, Attorneys Fees and Costs Entered

On January 7, 2014, the Funds' attorney fee petition in the 2012 Action was granted. (Id. ¶ 11.) The Funds' entitlement to relief...