Greer v. Bruce (In re Bruce)

Decision Date18 October 2018
Docket NumberCase No. 15-13536,Adv. No. 15-1125
Citation593 B.R. 765
Parties IN RE: Gerald Benjamin BRUCE, Debtor Robert Greer, Plaintiff v. Gerald Benjamin Bruce, Defendant
CourtU.S. Bankruptcy Court — Southern District of Ohio

Kenneth Grant Hawley, Stephenie Nicole Lape, Cincinnati, OH, for Plaintiff.

Gerald Benjamin Bruce, Hamilton, OH, pro se.

MEMORANDUM DECISION DENYING PLAINTIFF ROBERT GREER'S MOTION FOR PARTIAL SUMMARY JUDGMENT [Docket Number 22]

Beth A. Buchanan, United States Bankruptcy Judge

This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157(a) and 1334, and the standing General Order of Reference in this District. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). This matter is before this Court on Creditor/Plaintiff Robert Greer's Motion for Partial Summary Judgment [Docket Number 22]; and Defendant Gerald Benjamin Bruce's Motion in Objection to Robert Greer's Motion for Partial Summary Judgment [Docket Number 24].

Plaintiff Robert Greer ("Greer") seeks a determination that a state court judgment debt totaling $607,182.40 in combined compensatory and punitive damages owed by Debtor Gerald Benjamin Bruce ("Debtor") is excepted from discharge. On summary judgment, Greer argues that the debt is nondischargeable as a matter of law based on the preclusionary effect to be given to the factual and legal conclusions in the state court judgment.

After review of the evidence, this Court concludes that the state court judgment is not entitled to preclusive effect. Specifically, the state court judgment does not establish "larceny" pursuant to Bankruptcy Code Section1

523(a)(4) because the state court determined that the Debtor and his father came into possession of Greer's property lawfully. Furthermore, the state court judgment's factual and legal conclusions do not establish the stringent elements of a "willful and malicious injury" pursuant to Bankruptcy Code Section 523(a)(6). For these reasons, Greer's motion for summary judgment is denied.

I. BACKGROUND

On December 21, 2015, Greer filed his adversary complaint against the Debtor in which he objected to the Debtor's discharge pursuant to Bankruptcy Code Section 727(a) and further objected to the dischargeability of the state court judgment debt owed to Greer pursuant to Bankruptcy Code Sections 523(a)(4) and (a)(6). On summary judgment, Greer proceeds solely with respect to his Section 523 claims seeking a conclusion that the state court judgment awarding Greer compensatory and punitive damages is entitled to preclusive effect on the elements of his nondischargeability claims as a matter of law.

A. Magistrate's Decision and State Court Judgment

Greer focuses on the factual findings and legal conclusions of Magistrate Michael L. Bachman of the Court of Common Pleas of Hamilton County, Ohio who rendered his Magistrate's Decision on November 5, 2013 following a multiple day non-jury trial ending on July 10, 2013 [Docket Number 22, Ex. A] ("Magistrate's Decision").

According to the Magistrate's Decision, Greer was engaged in the business of salvaging industrial machinery and equipment and usable, saleable scrap for resale on the open market at the time the dispute began [Id. , p. 1]. In 2008, Greer began using land owned by Earl Bruce, the Debtor's father, at 10901 Stephens Road, Cincinnati, OH 45052 ("Stephens Road Property") as a "laydown yard" to store Greer's machinery and scrap [Id. ]. At the same time, Greer began clearing brush, leveling the land, and dismantling old trailers [Id. ]. In 2009, Earl Bruce also let Greer use land adjacent to the Stephens Road Property that Earl was leasing from Whitewater Township for the same purpose [Id. , pp. 1-2].

In 2010, Earl Bruce transferred the Stephens Road Property to his son, the Debtor, by way of quitclaim deed [Id. , p. 2]. At some point in 2011, the Bruces informed Greer that they were thinking about selling the Stephens Road Property and that Greer needed to remove his items in order to make the property more marketable [Id. ]. Although the parties provided divergent testimony about what the Bruces told Greer, Greer was denied access to the Stephens Road Property on June 16, 2011 and later found that the locks had been changed [Id. ]. Around that same time, Robert Writesel ("Writesel") and a crew of men began removing Greer's materials off of the Stephens Road Property at the direction of the Bruces [Id. ]. For several days, Writesel and his crew continued hauling away Greer's property often while Greer objected to and documented the activity [Id. ]. In all, Writesel and his crew hauled approximately twenty truckloads of Greer's materials from the Stephens Road Property which was eventually sold for scrap value [Id. ].

Initially, Greer sought a temporary injunction, pro se, in order to prevent more of his materials from being taken, but his attempt was unsuccessful [Id. ]. Greer then filed a complaint against the Bruces and proceeded to trial on his claim for conversion seeking the fair market value of the lost property, punitive damages, and attorney fees [Id. ].

Over the conflicting testimony of Earl Bruce denying the existence of such an agreement and asserting that Greer was a trespasser,2 the Magistrate concluded that Greer and Earl Bruce had reached an oral agreement allowing Greer to use the Stephens Road Property as a "laydown yard" in exchange for Greer improving and cleaning up the land [Id. , pp. 3-4]. As such, the Magistrate concluded that written notice and the proper legal process for eviction had to be followed by the Bruces prior to removing Greer's materials from the Stephens Road Property [Id. , pp. 3-4]. The Magistrate concluded that the Bruces "failed to avail themselves to the available remedies at law and instead resorted to self-help at their own peril" [Id. , p. 4].

The Magistrate further rejected the Bruces's assertion that they believed Greer had abandoned his materials on the Stephens Road Property. The Magistrate noted that, not only was Greer actively trying to sell the materials, but that Greer "strenuously objected" to his belongings being hauled away by Writesel over the course of several days [Id. , p. 5]. From this evidence, the Magistrate concluded that the Bruces committed the tort of conversion "by having [Greer's materials] removed and sold for scrap value." [Id. ].

During closing arguments, counsel for Earl Bruce and the Debtor argued that the Debtor should not be held jointly liable with Earl Bruce for damages that the court may award [Id. ]. The Debtor admitted to taking title to the Stephens Road Property in August of 2010 but testified that he only visited the property "once or twice" and was not actively involved in the family business [Id. ]. The Debtor admitted to hiring Writesel to remove Greer's property at the direction of his father, but the Debtor claimed that he did not know whose equipment it was and assumed that it belonged to his father [Id. ]. The Magistrate determined that Earl Bruce knowingly directed his son to hire Writesel to haul away Greer's materials [Id. , pp. 5-6]. The Magistrate further determined that the Debtor hired Writesel to do the job "without ever knowing who the material belonged to" and that "[c]onscious disregard for who actually owned the equipment and machinery is not a defense for [the Debtor]'s actions" [Id. , p. 6]. The Magistrate concluded that the plan to hire Writesel to clear up the Stephens Road Property by hauling away Greer's belongings was a "joint venture carried out by Earl and Benjamin Bruce" making them both culpable for the actions of Writesel [Id. ]. Consequently, the Magistrate held Earl Bruce and the Debtor jointly and severally liable to Greer for conversion [Id. ].

On the issue of damages, the Magistrate concluded that the proper measure in a conversion action is the value of the converted property at the time of the conversion [Id. ]. Both Greer and a witness for Greer, Robert Taylor, testified to the value of the property [Id. , pp. 6-7]. Based on their testimony, the Magistrate concluded that the value of the property hauled away (as reduced by the amount of a normal commission fee) and proper amount of compensatory damages to be awarded to Greer totaled $303,591.20 [Id. , p. 7].

As a final matter, the Magistrate addressed Greer's request for an award of punitive damages and attorney fees [Id. ]. The Magistrate noted that, pursuant to Ohio Rev. Code 2315.21(C)(1), Greer must show that the "Defendants demonstrate malice or aggravated or egregious fraud, or Defendants as principals or masters knowingly authorized, participated in, or ratified actions or omissions of an agent or servant that so demonstrate." [Id. ]. The Magistrate further specified that punitive damages are allowed in a conversion action when it involves "elements of fraud, malice or insult." [Id. ] The Magistrate concluded that clear and convincing evidence supported that:

... both Earl Bruce and [the Debtor] knowingly authorized and in fact, hired Writesel to haul away [Greer]'s belongings. Even after [Greer] protested and confronted Writesel several times, Writesel was never instructed by the Bruces to stop hauling away the equipment and machinery. The Bruces demonstrated a conscious disregard for [Greer]'s property rights and for the safety of others by engaging in self-help rather [than] using judicial process. In further support of his request for punitive damages, [Greer] directed the court to Plaintiff's Exhibit 13, which is a picture of Writesel on the Property raising his middle finger at [Greer] while [Greer or Greer's son] photographed the equipment being hauled away. Plaintiff's Exhibit 13 unquestionably demonstrates malice and insult towards Plaintiff. The court finds adequate grounds to award punitive damages due to the egregious nature of Writesel's actions on behalf of Defendants. The court declines to award attorney fees. Therefore, Plaintiff is awarded punitive damages in the amount of $303,591.20.

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