De Curtis v. Ferrandina (In re Ferrandina)

• Decision Date: 01 May 2015
• Docket Number: Adv. Pro. No.: 13–8170–ast,Case No.: 13–73713–ast
• Citation: 533 B.R. 11
• Parties: In re: Thomas E. Ferrandina, Debtor. Donna De Curtis, Plaintiff, v. Thomas E. Ferrandina, Defendant.
• Court: U.S. Bankruptcy Court — Eastern District of New York

533 B.R. 11

In re: Thomas E. Ferrandina, Debtor.Donna De Curtis, Plaintiff

v.Thomas E. Ferrandina, Defendant.

Case No.: 13–73713–ast

Adv. Pro. No.: 13–8170–ast

United States Bankruptcy Court, E.D. New York.

Signed May 1, 2015

Salvatore LaMonica, Rachel P. Stoian, LaMonica Herbst & Maniscalco LLP, Wantagh, NY, for Debtor.

DECISION AND ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

Alan S. Trust, United States Bankruptcy Judge

Pending before the Court is the motion (the “Motion”) filed by the plaintiff, Donna De Curtis (“De Curtis”), seeking summary judgment that a debt owed to her by Debtor, Thomas E. Ferrandina (“Ferrandina”), is nondischargeable under 11 U.S.C. § 523(a)(6) as arising from a willful and malicious injury. Prior to this bankruptcy case, De Curtis had sued Ferrandina and others in the United States District Court for the Southern District of New York (the “District Court”) claiming sexual harassment and workplace retaliation. Ferrandina defaulted in answering that action and De Curtis obtained a default judgment against him in an amount in excess of $800,000. Ferrandina sought to overturn the default judgment before the District Court and the Second Circuit Court of Appeals, and lost on each occasion.

In her Motion, De Curtis contends that Ferrandina should be precluded from contesting the District Court's extensive findings, which, if adopted by this Court, conclusively establish Ferrandina's nondischargeable liability to her. Ferrandina counters that he did not have a full and fair opportunity to litigate the harassment and retaliation claims in the prior litigation and that, even if issue preclusion applies, the District Court's findings do not support a grant of summary judgment. For the reasons to follow this Court concludes that Ferrandina should be precluded from relitigating whether he sexually harassed and retaliated against De Curtis, and that De Curtis holds a fully liquidated, nondischargeable claim as a matter of law. Therefore De Curtis' Motion is granted.

Jurisdiction

This Court has jurisdiction over this core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(A) and (I), and 1334(b), and the Standing Orders of Reference in effect in the Eastern District of New York dated August 28, 1986, and as amended on December 5, 2012, but made effective nunc pro tunc as of June 23, 2011.

Background and Procedural History

On July 16, 2013, Ferrandina filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code.¹

On October 15, 2013, De Curtis commenced this adversary proceeding by the filing of a complaint (the “Complaint”), which asserts only one claim: for a willful and malicious injury under § 523(a)(6). De Curtis' claim is based on a default judgment (the “Judgment”) entered by the District Court, supported by detailed findings of fact and conclusions of law set forth in various decisions of the District Court and the Second Circuit (the “Decisions”).²

Ferrandina filed an answer on November 14, 2013, denying all of the allegations in the Complaint related to his conduct and asserting several affirmative defenses (the “Answer”).³ [dkt item 4]

On November 21, 2013, the Court issued an Initial Adversary Scheduling Order (the “Pretrial Order”) setting forth various pretrial deadlines. [dkt item 6]

On January 9, 2014, De Curtis filed a motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure (“Rules”), as incorporated by Rule 7012 of the Federal Rules of Bankruptcy Procedure (“Bankruptcy Rules”) (the “Rule 12(c) Motion”). [dkt item 9] De Curtis argued that the pleadings demonstrate that the Judgment conclusively establishes a non-dischargeable claim under § 523(a)(6) ; in particular, De Curtis asserts that the findings of fact and conclusions of law issued by the District Court, which determined Ferrandina's liability for violations of New York State Human Rights Law, New York Executive Law § 296 et seq. (the “New York State Law”), and the New York City Human Rights Law, Administrative Code of the City of New York § 8–107 et seq. (the “New York City Law”), should be given preclusive effect.

On January 27, 2014, Ferrandina filed opposition to De Curtis' Rule 12(c) Motion (the “Opposition”). [dkt item 10] Ferrandina argued that he did not cause any injury to De Curtis. He further argued that his liability was not fully and fairly litigated, that the District Court did not make factual findings sufficient to meet the willful and malicious standard applicable under § 523(a)(6), and that therefore the Rule 12(c) Motion should be denied.

On January 31, 2014, De Curtis filed a reply. [dkt item 13]

On February 25, 2014, the Court held an initial pretrial conference and heard oral argument on the Motion, after which the Court took the matter on submission.

On March 5, 2014, the Court approved a stipulation staying all of the deadlines contained in the Pre–Trial Order. [dkt item 17]

On October 22, 2014, the Court entered an order converting the Rule 12(c) Motion to one for summary judgment under Rule 56, as incorporated by Bankruptcy Rule 7056.⁴ [dkt item 18]

On November 26, 2014, Ferrandina and De Curtis each filed statements of material facts under Local Bankruptcy Rule 7056–1 and summary judgment evidence in support of their respective positions. [dkt items 21, 22, 23] De Curtis' 7056–1 statement specifically references the District Court's findings and attaches, among other things, copies of the Decisions. As evidence that genuine issues of fact remain here, Ferrandina attaches to his 7056–1 statement an affidavit he submitted to the District Court in support of his unsuccessful motion to vacate the Judgment.

The parties each filed responses on December 8, 2014. [dkt items 25, 26] In Ferrandina's response, Ferrandina admits that the District Court made the findings cited in De Curtis' 7056–1 statement, but responds that such finding “by the District Court was premised upon the [De Curtis'] submissions, but was not predicated upon testimony given at trial and some of the submissions considered by the District Court may not have been admissible at a trial on the merits.” Ferrandina again denied that he committed the acts the District Court found he had committed.

Undisputed Facts⁵

For the reasons discussed supra, the Court has determined that Ferrandina is precluded from relitigating the facts as found by the District Court related to his conduct and intentions, and that he is precluded from relitigating his liability under the New York State Law and the New York City Law as determined by the District Court. Thus, the Court has determined that the following material facts are uncontroverted.

The Sexual Harassment Action

On June 10, 2009, De Curtis commenced an action in the District Court entitled DeCurtis v. Upward Bound Int'l, No. 09 Civ. 5378(RJS) against Ferrandina and other co-defendants (the “Sexual Harassment Action”). De Curtis alleged that the defendants sexually harassed her and then retaliated against her in violation of the New York State Law, the New York City Law, and Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. (“Title VII”). (Licul Dec. Ex. 1, 4 at p. 3) On April 28, 2010, the District Court entered the Judgment against Ferrandina, finding him liable for De Curtis' sexual harassment and retaliation claims under the New York State and New York City Laws. That same day, the District Court entered separate default judgments against several of Ferrandina's other co-defendants holding them liable for De Curtis' claims under Title VII⁶ , the New York State and New York City Laws. (Licul Dec., Ex. 4 at p. 3; S.D.N.Y. dkt items 47–50)

The District Court subsequently scheduled an inquest to determine De Curtis' damages, which was held on October 14, 2010. (Licul Dec. Ex. 1, S.D.N.Y. dkt items 56, 69; Ex. 4 at p. 3) In connection with the inquest, De Curtis filed various pleadings in support of her calculation of damages. (Licul Dec. Ex. 1, S.D.N.Y. dkt items 66–68, 76–77, 79, Ex. 8, 9)

On September 27, 2011, the District Court issued a Memorandum and Order in the Sexual Harassment Action liquidating De Curtis' damages. DeCurtis v. Upward Bound International, Inc., et al., 2011 WL 4549412 (S.D.N.Y. Sept. 27, 2011). The District Court made the following detailed findings of fact⁷ relevant here:

De Curtis worked for Upward Bound International, Inc. (“Upward Bound”) from 2003 through 2008, when she was involuntarily terminated. At that time, Upward Bound was a Manhattan travel agency that specialized in making travel arrangements for corporate and entertainment industry clients. Upward Bound ceased to exist in August 2009 and its operations were transferred to LDA Travel Corporation (“LDA”), a New York corporation that makes travel and transportation arrangements for clients, and Tzell Travel LLC (“Tzell”), a New York limited liability company that sells airline tickets and hotel accommodations. Id. at *1.

Ferrandina was Vice President of Operations at Upward Bound and De Curtis' supervisor from 2003 to 2006. In 2003, Ferrandina recruited De Curtis to work at Upward Bound. Beginning in July 2004, Ferrandina sexually harassed De Curtis. Among other things, Ferrandina repeatedly touched De Curtis in a sexual manner without her consent, sent her sexually explicit e-mails, made sexually explicit comments, and called her late at night and on weekends to talk about sex. Id. When De Curtis objected to Ferrandina's behavior, Ferrandina threatened her job. As a result of Ferrandina's actions, De Curtis “was constantly stressed, nervous and unable to sleep.” Id. De Curtis dreaded going to work, and felt sick each time Ferrandina called her into his office.

In August 2004, De Curtis complained to Debra Feldman, the head of human resources at Upward Bound, about Ferrandina's conduct. Feldman informed Seth Rudman (“Rudman”), the then-owner of Upward Bound. Rudman took no action in response to De Curtis' complaint, telling her instead to

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