In re Basel-Johnson

• Decision Date: 17 April 2007
• Docket Number: Bankruptcy No. 05 B 36481.,Adversary No. 05 A 02735.
• Citation: 366 B.R. 831
• Parties: In re Nicolette BASEL-JOHNSON, Debtor. Peter and Janet Vozella, individually and on behalf of Go Wild Fun Safaris, Inc., Robert Pacenti, and Glenbard Travel, Inc., Plaintiffs, v. Nicolette Basel-Johnson, Defendant.
• Court: U.S. Bankruptcy Court — Northern District of Illinois

Page 831

366 B.R. 831

In re Nicolette BASEL-JOHNSON, Debtor.

Peter and Janet Vozella, individually and on behalf of Go Wild Fun Safaris, Inc., Robert Pacenti, and Glenbard Travel, Inc., Plaintiffs, v. Nicolette Basel-Johnson, Defendant.

Bankruptcy No. 05 B 36481.

Adversary No. 05 A 02735.

United States Bankruptcy Court, N.D. Illinois, Eastern Division.

April 17, 2007.

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Kulwin & Associates, Chicago, IL, Shawn C. Fulbright, Guyer & Enichen, PC, Rockford, IL, for Plaintiffs.

Lester A. Ottenheimer, III, Ottenheimer Teplinsky & Rosenbloom, LLC, Buffalo Grove, IL, for Defendant.

MEMORANDUM OPINION

JOHN H. SQUIRES, Bankruptcy Judge.

This matter comes before the Court on the motion of Nicolette Basel-Johnson (the "Debtor") for summary judgment pursuant to Federal Rule of Bankruptcy Procedure 7056, which incorporates by reference Federal Rule of Civil Procedure 56, on the complaint filed by Peter and Janet Vozella, individually and on behalf of Go Wild Fun Safaris, Inc., an Illinois corporation, Robert Pacenli, and Glenbard Travel, Inc., an Illinois corporation (collectively the "Plaintiffs") that seeks to except from discharge a debt allegedly owed by the Debtor pursuant to 11 U.S.C. §§ 523(a)(2), (a)(4), and (a)(6)¹ and a determination that the Debtor's actions constituted tortious interference with contract and tortious interference with prospective business advantage and business expectancy.² For the reasons set forth herein, the Court grants the Debtor's motion for summary judgment with respect to Count I of the complaint and denies the motion as to Counts II and III. The Court narrows the issues for trial under Rule 56(d), A trial is set in this matter beginning on November 26, 2007 at 1:00 p.m.

I. JURISDICTION AND PROCEDURE

The Court has jurisdiction over the Debtor's bankruptcy case pursuant to 28 U.S.C. §§ 1334(a) and 157(a), and Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. In an adversary proceeding, a court must consider whether each count of the complaint is a core proceeding, a non-core related matter, or a claim unrelated to the bankruptcy case. Baker Dev. Corp. v. Mulder (In re Mulder), 307 B.R. 637, 640 (Bankr.N.D.Ill.2004). The Seventh Circuit has provided the following test to determine whether an action is a core proceeding: "[A] proceeding is core ... if it invokes a substantive right provided by title 11 or if it is a proceeding that, by its nature, could arise only in the context of a bankruptcy case." Diamond Mortgage Corp. v. Sugar, 913 F.2d 1233, 1239 (7th Cir.1990) (internal quotation omitted). The Court finds that Counts I, II, and III of the complaint, which allege claims under 11 U.S.C. § 523(a),³ fall within the Court's core jurisdiction under 28 U.S.C. § 157(b)(2)(I). See Mulder, 307 B.R. at 640.

Next, the Court has jurisdiction to determine whether it has jurisdiction over Counts IV and V of the complaint. See id. Those counts allege tortious interference with contract and tortious interference with prospective business advantage and business expectancy. The Court finds that Counts IV and V of the complaint are non-core related matters. The Plaintiffs' claims against the Debtor under these counts do not satisfy the test for core proceedings set forth by the Seventh Circuit. These two causes of action do not "arise under the Bankruptcy Code in the strong sense that the Code itself is the source of the claimant's right or remedy, rather than just the procedural vehicle for the assertion of a right conferred by ... state law." In re United States Brass Corp., 110 F.3d 1261, 1268 (7th Cir.1997). Indeed, courts have found such state law claims to be non-core in nature due to their tenuous relationship to a bankruptcy case. See Novak v. Lorenz (In re Novak), 116 B.R. 626, 627-28 (N.D.Ill.1990) (finding that debtor's pre-petition breach of contract and tortious interference with a business relationship claims were non-core matters); Sokol v. Mass. Mut. Life Ins. Co. (In re Sokol), 60 B.R. 294, 296 (Bankr. N.D.Ill.1986) (holding that debtor's pre-petition contract and tort claims were non-core matters); Steege v. N. Trust Bank/ O'Hare, N.A., No. 96 C 742, 1996 WL 332428, at *2 (N.D.Ill. June 13, 1996) (stating that trustee's state law claims, which included tortious interference with business relations, were non-core matters). The Seventh Circuit has stated that a bankruptcy court's "related to jurisdiction" encompasses "`tort, contract, and other legal claims by and against the debtor, claims that, were it not for bankruptcy, would be ordinary stand-alone lawsuits between the debtor and others ...'" In re FedPak Sys., Inc., 80 F.3d 207, 214 (7th Cir.1996) (quoting Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir. 1994)). Because the Plaintiffs' claims of tortious interference with contract and tortious interference with prospective business advantage and business expectancy arise outside the context of the bankruptcy case, they are non-core related matters. As such, the Court must submit proposed findings of fact and conclusions of law to the District Court, pursuant to 28 U.S.C. § 157(c)(1).

II. APPLICABLE STANDARDS FOR SUMMARY JUDGMENT

In order to prevail on a motion for summary judgment, the movant must meet the statutory criteria set forth in Rule 56 of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056: Rule 56(c) reads in part:

The judgment sought shall be rendered forthwith if 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 a judgment as a matter of law.

FED.R.Civ.P. 56(c). See also Estate of Allen v. City of Rockford, 349 F.3d 1015, 1019 (7th Cir.2003).

The primary purpose of granting a summary judgment motion is to avoid unnecessary trials when there is no genuine issue of material fact in dispute, Trautvetter v. Quick, 916 F.2d 1140, 1147 (7th Cir.1990); Farries v. Stanadyne/Chi. Div., 832 F.2d 374, 378 (7th Cir.1987) (quoting Wainwright Bank & Trust Co. v. Railroadmens Fed. Says. & Loan Ass'n of Indianapolis, 806 F.2d 146, 149 (7th Cir.1986)). Where the material facts are not in dispute, the sole issue is whether the moving party is entitled to a judgment as a matter of law. ANR Advance Transp. Co. v. Int'l Bhd. of Teamsters, Local 710, 153 F.3d 774, 777 (7th Cir.1998).

On a motion for summary judgment, "[t]he court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial." Payne v. Pauley, 337 F.3d 767, 770 (7th Cir.2003) (internal quotation omitted). Summary judgment is the "put up or shut up moment in a lawsuit, when a party must show what evidence, it has that would convince a trier of fact to accept its version of the events." Hammel v. Eau Galle Cheese Factory, 407 F.3d 852, 859 (7th Cir.2005) (internal quotation omitted).

In 1986, the United States Supreme Court decided a trilogy of cases that encourages the use of summary judgment as a means to dispose of factually unsupported claims. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538(1986). The burden is on the moving party to show that no genuine issue of material fact is in dispute. Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Celotex, 477 U.S. at 322, 106 S.Ct. 2548; Matsushita, 475 U.S. at 585-86, 106 S.Ct. 1348.

All reasonable inferences drawn from the underlying facts must be viewed in a light most favorable to the party opposing the motion. Roger Whitmore's Auto. Servs., Inc. v. Lake County, 424 F.3d 659, 666-67 (7th Cir.2005); Parkins v. Civil Constructors of Ill., Inc., 163 F.3d 1027, 1032 (7th Cir.1998). The existence of a material factual dispute is sufficient only if the disputed fact is determinative of the outcome under applicable law. Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Fritcher v. Health Care Serv. Corp., 301 F.3d 811, 815 (7th Cir.2002). "Factual disputes that are irrelevant or unnecessary will not be counted.'" Fritcher, 301 F.3d at 815 (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505). "[S]ummary judgment is not an appropriate occasion for weighing the evidence; rather, the inquiry is limited to determining if there is a genuine issue for trial." Lohorn v. Michal, 913 F.2d 327, 331 (7th Cir.1990). The Seventh Circuit has noted that trial courts must remain sensitive to fact issues where they are actually demonstrated to warrant denial of summary judgment. Opp v. Wheaton Van Lines, Inc., 231 F.3d 1060, 1065-66 (7th Cir.2000); Szymanski v. Rite-Way Lawn Maint. Co., 231 F.3d 360, 364 (7th Cir. 2000).

The "party seeking summary judgment always bears the initial responsibility of informing the ... court of the basis for its motion, and identifying those portions of the `pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. 2548 (quoting FED. R.Civ.P. 56(c)). Once the motion is supported by a prima facie showing that the moving party is entitled to judgment as a matter of law, a party opposing the motion may not rest upon the mere allegations or denials in its pleadings; rather, its response must show that there is a genuine issue for trial Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Matsushita, 475 U.S. at 587, 106 S.Ct. 1348; Patrick v. Jasper County, 901...