In re Betts, Bankruptcy No. 91 B 21706

Decision Date07 January 1993
Docket NumberBankruptcy No. 91 B 21706,Adv. No. 92 A 00325.
Citation149 BR 891
CourtU.S. Bankruptcy Court — Northern District of Illinois

Ruth A. Howes, Chicago, IL, for Attorney Registration and Disciplinary Com'n of the Supreme Court of Illinois.

Kenneth A. Kozel, LaSalle, IL, for John A. Betts, debtor-defendant.


JOHN H. SQUIRES, Bankruptcy Judge.

This matter comes before the Court on cross motions for summary judgment pursuant to Federal Rule of Civil Procedure 56, incorporated by reference in Federal Rule of Bankruptcy Procedure 7056. For the reasons set forth herein, the Court having considered all the pleadings and exhibits attached thereto, hereby grants the motion for summary judgment filed by the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois ("ARDC") and denies the motion filed by defendant John A. Betts ("Betts").


The Court has jurisdiction to entertain these motions for summary judgment pursuant to 28 U.S.C. § 1334 and General Rule 2.33(A) of the United States District Court for the Northern District of Illinois. This matter constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(I).


On October 11, 1991, the Debtor, a practicing Illinois attorney, filed a pro se Chapter 7 petition. Many of the relevant facts and background are contained in an earlier Opinion authored by the Court. See Attorney Registration & Disciplinary Com. of Supreme Court v. Betts, 142 B.R. 819, 822 (Bankr.N.D.Ill.1992). On March 20, 1992, ARDC filed the instant adversary proceeding to determine dischargeability of a debt pursuant to 11 U.S.C. § 523(a)(7). The complaint alleges, inter alia, that ARDC is the agency established by the Supreme Court of Illinois pursuant to Ill.Rev.Stat. ch. 110(A), para. 751 et seq., to investigate and prosecute allegations of attorney misconduct. The complaint further alleges that the Debtor was licensed to practice law in the state of Illinois and was suspended for a six-month period back in May, 1986 for engaging in attorney misconduct, and was investigated and prosecuted by ARDC. Copies of the relevant Supreme Court of Illinois opinions and orders were attached to the complaint. Additionally, the complaint asserts that Illinois Supreme Court Rule 773 provides that an attorney who is the subject of a disciplinary proceeding that results in the imposition of discipline has a duty to reimburse ARDC for costs incurred. The complaint asserts that ARDC, in conjunction with the investigation and prosecution of the matter which led to the Debtor's suspension, incurred costs in the amount of $3,833.06, which was the subject of an order by the Supreme Court of Illinois entered on June 25, 1991, assessing costs against the Debtor, entering a judgment against him in said amount, and ordering him to pay same within thirty days thereafter. Moreover, the complaint claims that the judgment is unpaid and constitutes a fine, penalty or forfeiture payable to and for the benefit of ARDC as a governmental unit, and accordingly is nondischargeable pursuant to section 523(a)(7).

In his answer, Betts admits that he was suspended from the practice of law for six months by the Supreme Court of Illinois. (Answer to Complaint, ¶ 4, p. 2). He also admits that a judgment for disciplinary costs was entered against him by the Supreme Court of Illinois in favor of ARDC. (Answer to Complaint, ¶ 11, p. 3). Further, Betts admits that he has not paid any part of the $3,833.06 judgment. Id. Betts denies, however, that Illinois Supreme Court Rule 773 applies to him, and that the Supreme Court of Illinois had authority to enter the judgment against him pursuant to Rule 773. In addition, Betts sets forth several affirmative defenses, including that he was denied a right to a hearing, and thus deprived of his due process rights; the Illinois Supreme Court lacked subject matter and personal jurisdiction over Betts; Rule 773 had not been enacted at the time of the disciplinary proceedings involving Betts; attorney disciplinary proceedings are not criminal in nature and thus no fifth amendment rights to due process are available; the alternatives of discipline available do not provide for a monetary penalty in the event of a finding of misconduct, thus costs could never be a fine, penalty or forfeiture; and the costs which ARDC claims to be due are for an actual pecuniary loss, not a penalty against Betts.

After denial of his motion to dismiss, Betts also filed a motion to disqualify this Judge pursuant to 28 U.S.C. § 455, which was denied on August 13, 1992. See Attorney Registration & Disciplinary Com. of Supreme Court v. Betts, 143 B.R. 1016 (Bankr.N.D.Ill.1992). ARDC subsequently filed its motion for summary judgment on October 5, 1992. Betts was given leave to respond to the motion by or before November 6, 1992, which he failed to do. Instead, Betts filed a motion to strike and for other relief on November 27, 1992. Betts claims that due to "certain errors, omissions and mistakes of law" it is "impossible" for him to respond to the motion for summary judgment. The Court, however, will consider Betts' motion to strike a response to ARDC's motion for summary judgment. Thereafter, ARDC filed its response to Betts' motion on November 20, 1992. Subsequently, Betts filed a cross motion for summary judgment. Same contains similar ad hominem attacks on this Judge and ARDC as those rejected in the prior Opinions regarding the motion to dismiss and the motion to disqualify. Such arguments are again rejected for the same reasons and will not be further addressed. ARDC responded to the motions to strike and for summary judgment. After this matter was taken under advisement, on January 6, 1993, Betts delivered to the Court a motion for leave to file instanter his response to ARDC's motion for summary judgment which was not noticed for presentment. Thus, pursuant to Local Rule 12(i), the Court hereby denies the motion. The Court reviewed the response, however, and finds that it contains no new arguments.

A. 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 Donald v. Polk County, 836 F.2d 376, 378-379 (7th Cir. 1988).

In 1986, the Supreme Court decided a trilogy of cases which encourage 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 Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "The primary purpose for granting a summary judgment motion is to avoid unnecessary trials when there is no genuine issue of material fact in dispute." Farries v. Stanadyne/Chicago Div., 832 F.2d 374, 378 (7th Cir.1987) (quoting Wainwright Bank & Trust Co. v. Railroadmens Federal Sav. & Loan Asso., 806 F.2d 146, 149 (7th Cir.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 256, 106 S.Ct. at 2514; Celotex, 477 U.S. at 322, 106 S.Ct. at 2552; Matsushita, 475 U.S. at 585-586, 106 S.Ct. at 1355-1356. There is no genuine issue for trial if the record, taken as a whole, does not lead a rational trier of fact to find for the nonmoving party. Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356. "If the evidence is merely colorable or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-250, 106 S.Ct. at 2511 (citations omitted); see also Valley Liquors, Inc. v. Renfield Importers, Ltd., 822 F.2d 656, 659 (7th Cir.1987), cert. denied, 484 U.S. 977, 108 S.Ct. 488, 98 L.Ed.2d 486 (1987).

The party seeking summary judgment always bears the initial responsibility of informing the court of the basis for its motion, identifying those portions of the "pleadings, depositions, answers to interrogatories, and affidavits, if any," which it believes demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. at 2552-2553. 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. at 2510; Celotex, 477 U.S. at 323, 106 S.Ct. at 2552-2553; Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356; Patrick v. Jasper County, 901 F.2d 561, 564-566 (7th Cir.1990).

Moreover, all reasonable inferences to be drawn from the underlying facts must be viewed in a light most favorable to the party opposing the motion. Karazanos v. Navistar International Transportation Corp., 948 F.2d 332, 335 (7th Cir.1991); Davis v. Chicago, 841 F.2d 186, 189 (7th Cir.1988); Marine Bank, Nat. Asso. v. Meat Counter, Inc., 826 F.2d 1577, 1579 (7th Cir.1987); DeValk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir.1987); Bartman v. Allis-Chalmers Corp., 799 F.2d 311, 312 (7th Cir. 1986), cert. denied, 479 U.S. 1092, 107 S.Ct. 1304, 94 L.Ed.2d 160 (1987); In re Calisoff, 92 B.R. 346,...

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