Control Module, Inc. v. Dybowski (In re Dybowski)
| Decision Date | 29 May 2012 |
| Docket Number | RE: ADV. ECF NO. 142,ADV. PRO. NOS. 07-02051,CASE NO. 07-21152,RE: ADV. ECF NO. 163 |
| Court | U.S. Bankruptcy Court — District of Connecticut |
| Parties | In re: JOHN C. DYBOWSKI, DEBTOR. CONTROL MODULE, INC., PLAINTIFF, v. JOHN C. DYBOWSKI, DEFENDANT. |
APPEARANCES:
Eric Henzy, Esq.
Reid and Riege, P.C.
Attorney for Plaintiff
Patrick W. Boatman, Esq.
Law Offices of Patrick Boatman, LLC
Attorney for Defendant/Debtor
MOTION AND CROSS-MOTION FOR SUMMARY JUDGMENT
In this adversary proceeding, the Plaintiff, Control Module, Inc., (hereinafter, the "Plaintiff" or "CMI"), seeks to have declared non-dischargeable a debt owed to it by John C. Dybowski (hereinafter, the "Defendant" or "Debtor"). The Plaintiff has moved for summary judgment based upon the alleged preclusive effect of a prior jury verdict rendered in the Superior Court for the State of Connecticut on March 9, 2007 and its related proceedings (hereinafter, the "Superior Court Action.").1 Similarly, the Debtor has filed a cross-motion for summary judgment based upon his view that the Superior Court Action established that there is no basis to find the debt non-dischargeable. For the reasons stated below, both the Plaintiff's and Defendant's motions are DENIED.
The United States District Court for the District of Connecticut has jurisdiction over the instant proceeding by virtue of 28 U.S.C. § 1334(b); and this Court derives its authority to hear and determine this matter on reference from the District Court pursuant to 28 U.S.C. §§ 157(a) and (b)(1). This is a "core proceeding" pursuant to 28 U.S.C. § 157(b)(2)(I).
The Debtor filed a petition under chapter 7 of the United States Bankruptcy Code onAugust 20, 2007. John J. O'Neil was appointed as chapter 7 trustee. Among the debts included on the Debtor's schedules was a disputed debt owed to CMI, described as an "Adverse jury verdict" in the amount of $2,858,816.00, ECF No. 1. The Court set November 13, 2007 as the date by which all objections to discharge had to be filed. ECF No. 4. Prior to that date, on September 19, 2007, CMI filed a three-count Complaint To Determine Dischargeability of Debt (hereinafter, the "Nondischargeability Complaint"), Adv. ECF No. 1.2 In Count I, it alleged that the debt should be excepted from discharge under Bankruptcy Code §523(a)(2)(A) (). In Count II, it alleged that its debt should be excepted from discharge under Bankruptcy Code §523(a)(4) (). In Count III, it alleged that the debt should be excepted from discharge under Bankruptcy Code §523(a)(6) ().
On November 16, 2007, the Debtor filed an Answer denying the essentials elements of the Plaintiff's Nondischargeability Complaint and asserting three special defenses, Adv. ECF No. 19. In the First Special Defense, the Debtor alleged, inter alia, that his conduct, which formed the basis of the Plaintiff's Nondischargeability Complaint was in accordance with the advice of counsel. In the Second Special Defense, the Debtor alleged inter alia, that a Memorandum of Decision on Punitive Damages, Attorney's Fees and Equitable Relief entered in the Superior Court Action on September 10, 2007, Adv. ECF No. 143-9;Plaintiff's Motion Ex. 7, in which the Honorable Judge Joseph Shortall (hereinafter, "Judge Shortall") found that the Defendant lacked the "wilful and malicious" state of mind necessary to have punitive damages entered against him under the Connecticut Uniform Trade Secret Act (hereinafter, "CUTSA"), established a defense to the Nondischargeability Complaint. In the Third Special Defense, the Debtor alleged, inter alia, that the Plaintiff acted wantonly and maliciously in the months following the jury verdict in seizing the Debtor's company and assets, and therefore, should be estopped from asserting the nondischargeability of its claim against the Debtor.
Thereafter, and following the completion of discovery, on June 7, 2011, the Plaintiff filed a Motion for Summary Judgment (hereinafter, the "Plaintiff's Motion"), Adv. ECF No. 142. In the Plaintiff's Motion, CMI sought summary judgment on Count II of its Nondischargeability Complaint and on the first and second of the Debtor's three special defenses. Accompanying the Plaintiff's Motion was a Local Rule 56(a)1 Statement in Support of Motion for Summary Judgment, and sixteen Exhibits, Adv. ECF No. 143. (Exhibit 16 was thereafter amended, Adv. ECF No. 146 and 146-1). On August 24, 2011, following the granting of several extensions, the Debtor filed in response, his Local Rule 56(a)2 Statement, Adv. ECF Nos. 159 and 161 (), an Affidavit of John C. Dybowski, Adv. ECF No. 162 and a Memorandum in Opposition to Motion of Control Module, Inc. For Summary Judgment & Memorandum In Support of Motion For Summary Judgment in Favor of John Dybowski, Adv. ECF Nos. 161 and 165. Also on August 24, 2011, the Debtor filed his own Motion for Summary Judgment (hereinafter, the"Debtor's Cross-Motion"), Adv. ECF No. 163. Accompanying the Debtor's Cross-Motion was an Affidavit of John C. Dybowski, Adv. ECF No.163-1, ), a Memorandum in Opposition . . . & Memorandum In Support . . ., Adv. ECF No. 1632 ), and Local Rule 56(a)1 Statement in Support of [Debtor's] Motion for Summary Judgment, Adv. ECF Nos. 163-3; 164. On October 13, 2011, the Plaintiff responded to the Debtor's Cross-Motion by filing an Objection to Defendant's Motion for Summary Judgment, Adv. ECF No. 170, a Local Rule 56(a)2 Statement In Opposition to Defendant's Motion for Summary Judgment, accompanied by Exhibits 1 and 2 (excerpts from trial testimony by Defendant), Adv. ECF No. 171, and Plaintiff's Reply to Defendant's Response to Motion For Summary Judgment, Adv. ECF No. 172. Finally, on November 14, 2011, the Debtor filed a Defendant's Sur-Reply Regarding Plaintiff's Motion for Summary Judgment, Adv. ECF No. 181. The Plaintiff's Motion and the Debtor's Cross-Motion are ripe for resolution.
Fed. R. Civ. P. 56(c) (hereinafter, "Fed. R. Civ. P. __") made applicable to these proceedings by Federal Rule of Bankruptcy Procedure 7056, directs that summary judgment enter when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Novak v. Blonder (In re Blonder), 246 B.R. 147, 150 (Bankr. D. Conn. 2000) (internal citations omitted).
When ruling on motions for summary judgment, "the judge's function is not . . . to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511 (1986). A dispute regarding a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted. Id. In deciding a summary judgment motion, the court, "cannot try issues of fact, but can only determine whether there are issues of fact to be tried." R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 77 (2d Cir.1984), (quoting Empire Electronics Co. v. United States, 311 F.2d 175, 179 (2d Cir. 1962)).
The moving party has the burden of showing that there are no material facts in dispute and all reasonable inferences are to be drawn, and all ambiguities resolved, in favor of the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 26 L. Ed.2d 142 (1970) (); see also, In re Blonder, 246 B.R. at 150. On a motion for summary judgment, even if the moving party's assertions are accepted as true, the moving party must still demonstrate a prima facie case of entitlement to judgment as a matter of law before the burden shifts to the non-movant to show genuine issues of material fact in dispute. See Vermont Teddy Bear Co., Inc. v. 1-800 BEARGRAM Co., 373 F.3d 241, 246 (2d Cir. 2004). The same standard of review applies when the Court is dealing with cross-motions for summary judgment. Each party's motion must bereviewed on its own merits, and the Court must draw all reasonable inferences against the party whose motion is being considered. Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001). However, Fed. R. Civ. P. 56, does not place a duty upon the Court to independently traverse the record in a treasure hunt for disputed facts. See, Amnesty America v. Town of W. Hartford, 288 F.3d 467, 470 (2d Cir. 2002). As a consequence, the Court does not need to grant either party's motion. Buote v. Verizon New England, 249 F. 2d 422, 428 (D. Vt. 2003).
The Court has reviewed the Plaintiff's Motion and Debtor's Cross-Motion, the Rule 56(a) Statements, the Memoranda in Support and in Opposition, the Affidavits and Exhibits, including the excerpts from the Superior Court Action transcript, Judge Shortall's jury charge therein (hereinafter, the "Jury Charge"), and the completed Interrogatories and Verdict...
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