Green v. Didio (In re Didio)

• Decision Date: 26 September 2019
• Docket Number: Bky. No. 18-12499 ELF,Adv. No. 18-161 ELF
• Citation: 607 B.R. 804
• Parties: IN RE: James E. DIDIO, Debtor. Marla J. Green, Plaintiff, v. James Didio, Defendant.
• Court: U.S. Bankruptcy Court — Eastern District of Pennsylvania

607 B.R. 804

IN RE: James E. DIDIO, Debtor.Marla J. Green, Plaintiff,

v.James Didio, Defendant.

Bky. No. 18-12499 ELF

Adv. No. 18-161 ELF

United States Bankruptcy Court, E.D. Pennsylvania.

Signed September 26, 2019

Marla J. Green, Gladwyne, PA, Pro Se.

Andrew Teitelman, Law Offices of Andrew Teitelman, P.C., Huntington Valley, PA, for Defendant.

MEMORANDUM

ERIC L. FRANK, U.S. BANKRUPTCY JUDGE

I. INTRODUCTION

In this adversary proceeding, creditor Marla Green ("Green") alleges that her ex-husband, debtor James Didio ("the Debtor"), defrauded her of millions of dollars during their six (6) year marriage. Green filed the instant adversary to have the debt declared nondischargeable under 11 U.S.C. §§ 523(a)(2), (a)(4), and (a)(6).

Presently before the court is the Debtor's Motion for Summary Judgment ("the Motion").

As explained below, I will grant the Motion because Green has not met her burden at the summary judgment stage of producing evidence that supports the elements of her claims.

II. PROCEDURAL HISTORY

The Debtor filed his chapter 7 bankruptcy petition on April 14, 2018. Green filed this adversary complaint on July 16, 2018. (Doc. #1). The Debtor answered the complaint on September 7, 2018 and supplemented his answer on October 11, 2018. (Doc. #'s 4, 11).

The Debtor filed the Motion on February 25, 2019. (Doc. #25). After some delay, Green filed a response to the Motion on May 8, 2019.¹ (Doc. #45).

III. SUMMARY JUDGMENT STANDARD

I described the basic summary judgment framework in a prior opinion as follows:

Pursuant to Fed. R. Civ. P. 56(a), applicable in this adversary proceeding through Fed. R. Bankr. P. 7056, summary judgment must be granted to a moving party when, drawing all reasonable inferences in favor of the nonmoving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. E.g., Steele v. Cicchi, 855 F.3d 494, 500 (3d Cir. 2017) ; In re Bath, 442 B.R. 377, 387 (Bankr. E.D. Pa. 2010) ; see alsoIn re Asbestos Prods. Liab. Litig. (No. VI), 837 F.3d 231, 235-36 (3d Cir. 2016).

On a motion for summary judgment, the court's role is not to weigh the evidence, but to determine whether there is a disputed, material fact for resolution at trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact is one in which sufficient evidence exists that would permit a reasonable fact finder to return a verdict for the non-moving party. Id. at 248, 106 S.Ct. 2505. A fact is material "if its existence or nonexistence might impact the outcome of the suit ... A dispute over a material fact is ‘genuine’ if nonexistence might impact the outcome of the suit ...." Betz v. Satteson, 715 Fed. Appx. 213, 215 (Nov. 16, 2017) (non precedential) (quoting Wiest v. Tyco Elecs. Corp., 812 F.3d 319, 328 (3d Cir. 2016) ) (additional citation omitted).

The parties' respective burdens of proof also play a role in determining the merits of a summary judgment motion. SeeIn re Polichuk, 506 B.R. 405, 421 (Bankr. E.D. Pa. 2014).

If the movant is the defendant or the party without the burden of proof, the movant must demonstrate the absence of a genuine issue of material fact, but the movant is not required to support the motion with affidavits or other materials that negate the opponent's claim. Rather, the movant may assert that the party with the burden of proof has not come forward with evidence to support one or more elements of its claim. SeeCelotex Corp. v. Catrett, 477 U.S. 317, 323-34, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

In re Boltz-Rubinstein, 596 B.R. 494, 501 (Bankr. E.D.Pa. 2019)

This case warrants a more detailed examination of the Celotex summary judgment framework.

When a party moving for summary judgment does not have the ultimate burden of proof at trial, it may simply identify deficiencies in the non-moving party's arguments and record; the moving party need not support its position with affirmative evidence. Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000). Courts routinely describe this process as "pointing out" essential deficiencies and indicate that the hurdle for a moving party to clear is relatively low. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998) ("a movant may make its prima facie demonstration simply by pointing out to the court a lack of evidence for the nonmovant on an essential element of the nonmovant's claim"); see also Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 265 (3d Cir. 2014) ("Where a non-moving party fails sufficiently to establish the existence of an essential element of its case on which it bears the burden of proof at trial, there is not a genuine dispute with respect to a material fact and thus the moving party is entitled to judgment as a matter of law") (citation omitted).²

In response to such a summary judgment motion, a non-moving party who has the burden of proof may make a " Celotex rebuttal" – i.e., providing additional, admissible evidence in its response to the summary judgment motion sufficient to establish the existence of a material factual dispute. See, e.g., Wiest v. Tyco Electronics Corp., 812 F.3d 319, 328 (3d Cir. 2016). The non-moving party is "not required to prove his entire case," but only to raise a triable factual dispute over the deficient aspects pointed out by the moving party. Higgins v. Scherr, 837 F.2d 155, 157 (4th Cir. 1988).

The additional evidence offered in a Celotex rebuttal may be made by affidavits, but "the affidavits must be made on personal knowledge, must set forth facts which would be admissible in evidence, and must show affirmatively that the affiant is competent to testify to the matters stated." Gallagher v. Magner, 619 F.3d 823, 842 (8th Cir. 2010) (quoting Postscript Enters. v. City of Bridgeton, 905 F.2d 223, 226 (8th Cir. 1990) ).

If a Celotex rebuttal raises a disputed issue of material fact, summary judgment must be denied. However, if the respondent fails to raise such an issue, then the moving party is entitled to summary judgment. Chambers ex rel. Chambers v. Sch. Dist. of Phila. Bd of Educ., 587 F.3d 176, 197 (3d Cir. 2009) (summary judgment granted when supplemental evidence offered in Celotex rebuttal could not allow plaintiff to win at trial).

IV. SUMMARY

The Debtor's Motion seeks summary judgment for two (2) distinct reasons.

First, the Debtor argues that Green's §§ 523(a)(2) and (a)(4) claims both require proof of fraud.³ The Debtor invokes the doctrine of collateral estoppel. He argues that the material facts were determined in prior litigation (an arbitration) between the parties and that Green is precluded from relitigating those facts in this adversary proceeding. The Debtor further contends that the established facts defeat Green's causes of action.

Second, the Debtor relies on the summary judgment framework laid out in Celotex. Under Celotex, Green, as the party with the burden of proof, must produce some evidence supporting each element of her claims in order to establish the existence of a disputed issue of material fact that, if decided in her favor, would permit her to succeed at trial. Given the admissible evidence Green has produced, the Debtor contends that she failed to meet her burden.

As explained below, I conclude that the doctrine of collateral estoppel is applicable, but that the Debtor's argument is only partially correct. While certain facts were conclusively determined in the arbitration, those facts do not negate the elements of Green's claims. However, as stated at the outset, the Debtor is entitled to summary judgment based on Green's failure to offer sufficient evidence to support her claims.

V. COLLATERAL ESTOPPEL

A. Pennsylvania Law Applies

The doctrine of collateral estoppel (also known as issue preclusion), is based upon the principle that "a losing litigant deserves no rematch after a defeat fairly suffered, in adversarial proceedings, on an issue identical in substance to the one he subsequently seeks to raise." Dici v. Commw. of Pa., 91 F.3d 542, 547 (3d Cir. 1996) (quoting Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 107, 111 S.Ct. 2166, 2169, 115 L.Ed.2d 96 (1991) ).

The application of collateral estoppel in a federal court action based on a prior state court judgment typically is grounded in the federal full faith and credit statute which provides that state judicial proceedings "shall have the same full faith and credit in every court within the United States ... as they have by law or usage in the courts of such State ... from which they are taken." 28 U.S.C. § 1738 ; accord Marrese v. Amer. Academy of Orthopaedic Surgeons, 470 U.S. 373, 380, 105 S.Ct. 1327, 84 L.Ed.2d 274 (1985). Thus, in determining whether the doctrine bars relitigation of an issue previously determined by a state court, a federal court must apply state law to evaluate whether relitigation would be precluded in the courts of the state in which the initial litigation took place. Swineford v. Snyder County PA, 15 F.3d 1258, 1266 (3d Cir. 1994) ("Federal courts must give a state court judgment the same preclusive effect as would the courts of that state"); see also In re Mickletz, 544 B.R. 804, 813–14 (Bankr. E.D. Pa. 2016).

Thus, I apply Pennsylvania law of collateral estoppel in this case.

B. The Required Elements for the Application of Collateral Estoppel

Under Pennsylvania law, collateral estoppel applies when:

(1) an issue is identical to one that was presented in a prior case;

(2) there has been a final judgment on the merits of the issue in the prior case;

(3) the party against whom the doctrine is asserted was a party in, or in privity with a party in, the prior action;

(4) the party against whom the doctrine is asserted, or one in privity with the party, had a full and fair opportunity to litigate the issue in the prior proceeding; and

(5) the determination in the prior proceeding was essential to the judgment.

E.g., Taylor v. Extendicare Health Facilities, Inc....