In re Abbo

• Decision Date: 01 March 1996
• Docket Number: Adv. No. 92-3577. Bankruptcy No. 92-33391.
• Citation: 192 BR 891
• Parties: In re Ian David ABBO, Debtor. ROSSI, McCREERY AND ASSOC., INC. et al., Plaintiffs, v. Ian David ABBO, Defendant.
• Court: U.S. Bankruptcy Court — Northern District of Ohio

192 B.R. 891 (1996)

In re Ian David ABBO, Debtor ROSSI, McCREERY AND ASSOC., INC. et al., Plaintiffs, v. Ian David ABBO, Defendant.

Adv. No. 92-3577. Bankruptcy No. 92-33391.

United States Bankruptcy Court, N.D. Ohio, Western Division.

March 1, 1996.

COPYRIGHT MATERIAL OMITTED

Jack Brady, Toledo, Ohio, for Plaintiffs.

OPINION AND ORDER GRANTING PLAINTIFF SCOTT ROSSI SUMMARY JUDGMENT AGAINST DEBTOR, EXCEPTING JUDGMENT OWED TO SCOTT ROSSI FROM DISCHARGE, GRANTING DEBTOR SUMMARY JUDGMENT AGAINST ROSSI, McCREERY AND ASSOC., INC. AND DISMISSING ROSSI, McCREERY AND ASSOC., INC.'S COMPLAINT WITH PREJUDICE

WALTER J. KRASNIEWSKI, Bankruptcy Judge.

This matter is before the Court on the Court's own motion as to why plaintiff Scott Rossi ("Rossi") should not be granted summary judgment against the defendant/Debtor Ian David Abbo (the "Debtor") in Rossi's action which seeks to except from discharge under § 523(a)(6) a state court judgment based on a jury verdict (the "State Judgment"). The Court has further raised the issue of the Debtor's entitlement to summary judgment against plaintiff Rossi, McCreery and Assoc., Inc. ("RMA"). The parties have filed briefs in support of their respective positions. The plaintiffs have provided the Court with a copy of their state court complaint, a transcript of the state court proceedings, a transcript of the Honorable Judge Robert Franklin's charge to the jury, and a certified copy of the judgment entered by the state court. The Debtor has provided the Court with a voluminous array of exhibits that he requested the Court to consider. Based on the evidence before the Court, the Court concludes that Rossi should be granted summary judgment against the Debtor. The Court further concludes that the Debtor's obligations to Rossi for compensatory damages of $8,420.00 and punitive damages of $50,000.00 arising from the State Judgment should be excepted from discharge. In addition, the Court finds that the Debtor should be granted summary judgment against RMA. Lastly, the Court finds that RMA's complaint against the Debtor should be dismissed with prejudice.

FACTS

Proceedings in the Instant Bankruptcy Case

Rossi and RMA filed this complaint to determine dischargeability on December 12, 1992.

Rossi premises his action under § 523(a)(6) on the State Judgment entered in the Lucas County Court of Common Pleas ("State Court") which judgment was based on a jury verdict. The State Court awarded Rossi actual and punitive damages in his actions against the Debtor for abuse of process and malicious prosecution. Rossi, McCreery & Assoc., Inc. et al. v. Abbo, Case No. 89-0968 (Ct.Comm.Pl. November 5, 1991), mot'n new trial denied, (Ct.Comm.Pl. December 2, 1991), affirmed, Case No. L-91-435, 1993 WL 452021 (Ohio Ct.App. November 5, 1993).

RMA alleges that the contract damages which it was awarded against the Debtor in the State Judgment are nondischargeable under § 523(a)(6).

The Debtor filed his answer on January 11, 1993.

Approximately eleven months later, on December 3, 1993, the Debtor filed a motion for a jury trial. Based on the Debtor's jury demand, the Honorable Richard Speer transferred this adversary proceeding to the District Court. The Honorable District Court Judge David Dowd withdrew the reference of this adversary proceeding sua sponte on February 8, 1994. The Honorable District Court Judge James Carr referred this adversary back to the Bankruptcy Court in September, 1994, finding that the issue of dischargeability was not triable before a jury. See Rossi, McCreery & Assoc., Inc. et al. v. Abbo, Case No. 3:94CV7073 at p. 2 (N.D.Ohio September 22, 1994), motion reconsider denied, Case No. 3:94CV7073 (N.D.Ohio December 16, 1994), appeal dismissed, Case Nos. 94-4099, 95-3098 (6th Cir. August 15, 1995), rehearing denied, (6th Cir. September 25, 1995), cert. denied, ___ U.S. ___, 116 S.Ct. 951, 133 L.Ed.2d 875 (1996).

Chief Bankruptcy Judge James Williams reassigned the instant adversary proceeding to this Court on December 15, 1995 after Judge Speer recused himself on equitable grounds.

Proceedings in the State Trial Court

In the State Court action, Rossi alleged that the Debtor maliciously prosecuted numerous criminal complaints against him, which criminal complaints were ultimately dismissed. According to the complaint in the State Court proceeding (the "State Complaint"), the Debtor maliciously and intentionally filed false police reports against Rossi alleging criminal acts including criminal damaging, aggravated menacing, and assault. See State Complaint, at pp. 3-4, para. 9-17. The State Complaint alleged that the Debtor filed such criminal complaints with malicious intent and with the knowledge that the information which he provided to the police was "false and/or perjured". See State Complaint, at pp. 3-4, para. 10-16.

Rossi also alleged that the Debtor maliciously filed a false civil complaint which represented an abuse of the civil judicial process. See State Complaint, at pp. 4-5, para. 18. The Debtor's state court civil complaint allegedly sought damages for substantially the same conduct which formed the basis for the Debtor's criminal complaints against Rossi. The Debtor's civil complaint against Rossi was dismissed.

RMA alleged that the Debtor breached a contract for architectural services between the Debtor and RMA.

In October, 1991, the State Court held a three-day jury trial on Rossi's claims against the Debtor for malicious prosecution and abuse of process. The State Court also heard RMA's breach of contract claim.

In charging the jury on the issue of malicious prosecution, the Honorable Robert Franklin stated that:

the plaintiff must prove by the greater weight of the evidence the following: (A) the malicious filing of a prior case or lawsuit against the plaintiff by the defendant. (B) The lack of probable cause for filing of that prior lawsuit. (C) The ending of the prior lawsuit in the plaintiff\'s favor. And (D), all of which items set forth in A, B and C caused the plaintiff injury or damages.

See Transcript of Jury Instructions in the Court of Common Pleas of Lucas County, Ohio, In re: Rossi, McCreery & Associates, Inc. et al. v. Abbo, Case No. CI 89-0968 (hereinafter the "Jury Instructions"), at pp. 13-14.

Judge Franklin defined "malice" for the jury as:

an attitude or state of mind that makes a person knowingly do an act for an improper or wrongful purpose. It includes the wrongful act intentionally done and without probable cause. It also includes an intent to annoy or injure another, although ill will or personal hostility are not required.

Malice may, but need not be inferred from the absence of probable cause. The existence of malice may be determined from all of the facts and circumstances in the evidence.

See Jury Instructions, at p. 15.

On Rossi's claim for abuse of process, Judge Franklin charged the jury that Rossi was required to prove:

by the greater weight of the evidence that the defendant used the legal process for an ulterior purpose; (B) The Defendant intentionally filed both civil and criminal charges against Scott Rossi to annoy and aggravate the plaintiffs and that this was not a proper use in the regular conduct of the proceedings, and (C) that the plaintiff . . . was directly injured or damaged by the wrongful use of this process for an ulterior purpose.

The ulterior purpose or motive may be inferred from the wrongful use made of the process, but the use itself may not be inferred from the ulterior motive.

See Jury Instructions, at pp. 19-20.

In addition to charging the jury on the issue of actual damages, Judge Franklin instructed the jury on the issue of punitive damages as follows:

punitive damages may be awarded against the defendant as a punishment to discourage others from considering other wrongful acts. You are not required to award punitive damages to the plaintiff, and you may not do so unless you find by the greater weight of the evidence that the defendant acted with insult and actual malice.

Insult means any act or remark that is consciously or intentionally scornful or humiliating. Actual malice is that state of mind under which a person is characterized by hatred, ill will or a spirit of revenge or a conscious disregard for the rights and safety of other persons that has a great probability of causing substantial harm.

. . . . If you award punitive damages, the amount should be fair and reasonable under all the facts and circumstances. It should not be excessive nor actuated by passion or prejudice. The amount of the punitive damages rests in the sound judgment of the jury and should be determined from all of the evidence in the case.

See Jury Instructions, at pp. 17-18.

On November 5, 1991, the State Court entered the State Judgment in Rossi's favor based on the jury's verdict. The State Court awarded Rossi actual damages of $6,720.00 and punitive damages of $10,000.00 based on the jury's verdict on his malicious prosecution claim. The State Court further awarded Rossi actual damages of $1,700.00 and $40,000.00 in punitive damages based on the jury's verdict on his abuse of process claim. In addition, the State Court awarded RMA judgment in the amount of $29,000.00 on its contract claim.

The Debtor failed in his appeal of the State Judgment. The Debtor also failed in his collateral attack on the State Judgment. See Rossi, McCreery & Assoc., Inc. et al. v. Abbo, Case No. 89-0968 (Ohio Ct.Comm.Pl. August 16, 1993), affirmed, 1994 WL 424084, Case No. L-93-273 (Ohio Ct.App. August 12, 1994), appeal dismissed, 71 Ohio St.3d 1444, 644 N.E.2d 407 (1995), reconsideration denied, 71 Ohio St.3d 1481, 645 N.E.2d 1260 (1995).

DISCUSSION

STANDARD FOR SUMMARY JUDGMENT

The Sixth Circuit has stated that:

summary judgment is appropriate when the moving party shows 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.\' Fed.R.Civ.P. 56(c).

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