In re Bundick, Bankruptcy No. 02-75994-SCS.

CourtUnited States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
Citation303 B.R. 90
Decision Date17 December 2003
Docket NumberAdversary No. 02-7160-SCS.,Bankruptcy No. 02-75994-SCS.
PartiesIn re Jackie L. BUNDICK, Debtor. Stanford M. & Gladys L. Beckett, Plaintiffs, v. Jackie L. Bundick, Defendant.
303 B.R. 90
In re Jackie L. BUNDICK, Debtor.
Stanford M. & Gladys L. Beckett, Plaintiffs,
Jackie L. Bundick, Defendant.
Bankruptcy No. 02-75994-SCS.
Adversary No. 02-7160-SCS.
United States District Court, E.D. Virginia, Norfolk Division.
December 17, 2003.

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Gregory K. Pugh, Gregory K. Pugh, P.C., Virginia Beach, VA, for Debtor.

John D. McIntyre, Kimberly L. Stegall, Willcox & Savage, P.C., Norfolk, VA, for Plaintiffs.


STEPHEN C. ST. JOHN, Bankruptcy Judge.

This matter came on for hearing September 23, 2003, on the Plaintiff's Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, made applicable to these proceedings by Rule 7056 of the Federal Rules of Bankruptcy Procedure. At the conclusion of the hearing, the Court took this matter under advisement. This Court has jurisdiction over these proceedings pursuant to 28 U.S.C. §§ 157(b) and 1334(b). Venue is proper pursuant to 28 U.S.C. § 1409(a). Upon consideration of the arguments presented by counsel at the hearing and of the

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pleadings and memoranda submitted by each party, and for the reasons stated below, the plaintiffs' Motion for Summary Judgment is granted.


Jackie L. Bundick ("Bundick") filed a Bankruptcy Petition under Chapter 7 of the Bankruptcy Code on September 6, 2002. This adversary complaint was initiated on December 12, 2002 when Stanford M. Beckett ("Mr. Beckett") and Gladys L. Beckett ("Mrs. Beckett") (collectively known as "the Becketts") filed a Complaint to Determine Dischargeability of Debt (the "Complaint") against Bundick. The Complaint alleges that Bundick is indebted to Mrs. Beckett for $35,000.00 and to Mr. Beckett for $15,000.00 by virtue of a judgment entered by the Circuit Court for Northhampton County, Virginia. Compl. ¶ 21. The Circuit Court judgment, a copy of which was filed with the Complaint, entered a judgment comprised of three separate awards:

(1) $25,000.00 to Mrs. Beckett for compensatory damages;

(2) $10,000.00 to Mrs. Beckett for punitive damages;

(3) $15,000.00 to Mr. Beckett for compensatory damages.

Beckett v. Bundick, Chancery No. CH-0071 (Va.Cir., May 21, 2002). A copy for the transcript of the trial of the State Court Action was attached as Exhibit "C" to the Becketts' Complaint.1

The Complaint alleges that Bundick and the Becketts own neighboring properties in Exmore, Virginia. Bundick has resided at 6060 Bayside Road, Exmore, Virginia since approximately 1987. The Becketts have resided at 6052 Bayside Road, also in Exmore, Virginia since 1973. Compl. ¶ 7.

According to the Complaint, in 1987 Bundick began to use his property on Bayside Road to perform mechanical repairs on cars and light trucks. Compl. ¶ 8. Sometime in 1996 Bundick expanded his repair operations to include maintaining and repairing heavy diesel trucks, commonly known as 18-wheelers. Compl. ¶ 9. As a result of this truck repair operation, Bundick began dumping used motor oil and used transmission fluid on his property, near the property line and on the Beckett's property. Compl. ¶ 10. Furthermore, it was alleged that Bundick regularly operated the engines of various large vehicles and left the vehicles running for up to five hours and that vehicles were started as early as 3:00 a.m. and as late as 12:00 midnight. Compl. ¶ 11. As a result of this conduct, the Becketts claim that they suffered severe damage to their property and that Mrs. Beckett suffered injury to her health. Compl. ¶ 12. The Becketts finally allege that Bundick willfully and maliciously injured the Becketts by operating his business in a harmful manner. Compl. ¶ 24. The Becketts therefore prayed that Bundick's indebtedness to the Beckett's of $50,000.00 be declared non-dischargeable under § 523(a)(6) of the Bankruptcy Code.

Bundick filed an answer in the adversary proceeding on January 3, 2003. The answer admitted many of the allegations contained in the Complaint, but denied paragraphs 9, 10, 11, 12, 19, 24, 25, and 26 of the Complaint, including allegations that he had expanded his business operations in 1996, dumped motor oil or transmission fluid on his or the Becketts' property,

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harmed the Becketts in any manner or continued his business operations in violation of an injunction issued by the Circuit Court of Northhampton County. Bundick denied that his actions constituted a willful and malicious injury to the Becketts and prayed that this Court dismiss the Complaint. The Becketts have now moved for summary judgment pursuant to Rule 7056 of the Federal Rules of Bankruptcy Procedure.


Given the Becketts' theory that summary judgment is appropriate, the form of the state court pleadings, the record of the state court trial and the outcome of the Northhampton County Circuit Court chancery suit are critical to the disposition of this motion.

On October 31, 2000, the Becketts filed a Bill of Complaint (the "Bill of Complaint") in the Circuit Court for Northhampton County, Virginia ("State Court") based on the alleged harm caused by Bundick's truck repair operation ("State Court Action"). The Bill of Complaint named both the debtor and his spouse, Julia H. Bundick, as defendants and alleged five causes of action: 1) intentional infliction of emotional distress; 2) negligence; 3) nuisance; 4) trespass; and 5) injunctive relief.

The Bundicks did not file an answer and on December 1, 2000 the Becketts filed a motion for the entry of default judgment. Compl. ¶ 15. On January 5, 2001, the Bundicks filed a motion for leave to file a late answer. Compl. ¶ 16. On February 12, 2001 the State Court extended the filing deadline to February 16, 2001. In addition to extending the filing deadline, Judge Tyler of the State Court issued a temporary injunction ("the temporary injunction") prohibiting Bundick from "performing any welding, maintenance, or repair, or allowing any welding, maintenance, or repair" on the property of the Bundicks. Temporary injunction, p. 1.2 That court further enjoined the Bundicks from "running, operating, and/or using any diesel or gasoline engines, welding equipment of any sort, and any other power equipment of any sort — regardless of whether such engine, welding equipment, or power equipment is powered by electricity, internal combustion engine, chemical reaction, or any other source of power — at, upon, above, around, or near Respondent's Property." Narrow exceptions for personal vehicles and lawn mowers were allowed by the temporary injunction, which was to last for the entire pendency of the litigation. Temporary injunction, p. 2. Bundick filed an answer to the Bill of Complaint on February 13, 2001. Compl. ¶ 19.

At the trial held January 29, 2002, the State Court issued a permanent injunction prohibiting the Bundicks from operating his business and held that the Becketts were entitled to damages. Tr. at. 196-203. On May 21, 2002 the Circuit Court entered an Order (the "Final Order") in favor of the Beckett's for $50,000.00. Mrs. Beckett was awarded total damages of $35,00.00; $25,000.00 in compensatory damages and $10,000.00 in punitive damages. Mr. Beckett was awarded $15,000.00 in compensatory damages. Final Order, ¶ 2. Judge Tyler also incorporated the permanent injunctions against Bundick issued at the trial on January 29, 2002 into the final order. Final Order, ¶ 1.

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A Motion for Summary Judgment is governed by Rule 7056 of the Bankruptcy Code, which incorporates Federal Rule of Civil Procedure 56 in adversary proceedings. In order to determine if there is any genuine issue as to any material fact the Court may consider pleadings, answers to interrogatories, admissions, and any affidavits filed with the court. If there is no material issue of fact then the moving party is entitled to judgment as a matter of law and summary judgment is appropriate. Celotex v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The Becketts' Motion for Summary Judgment relies entirely on the findings of the State Court and the resulting judgment against Bundick. The Becketts argue that the findings of Judge Tyler in the State Court show that Bundick's actions were willful and malicious and therefore render the judgment debt non-dischargeable under Bankruptcy Code § 523(a)(6). Beckett Br., p. 9. The Becketts argue that this Court is bound by the doctrine of collateral estoppel and cannot make an independent evaluation of whether Bundick's conduct was willful and malicious. Furthermore, the Becketts argue that since both the compensatory and punitive damages awarded by Judge Tyler arose from the same set of facts, both the compensatory and punitive damages are non-dischargeable.

Bundick's Brief in Opposition to the Motion for Summary Judgment argues two major points, first that the State Court judgment is insufficient under § 523(a)(6) to make the debt to the Beckett's non-dischargeable, and second that the awards must be analyzed separately to determine dischargeability. Bundick initially argues that the damages awarded by the State Court were based on a finding that nuisance existed, rather than conduct amounting to a willful and malicious injury and therefore do not fall within the ambit of § 523(a)(6). At oral argument, counsel for Bundick argued that there was insufficient evidence presented at trial to justify a finding of willful and malicious behavior.

Secondly, Bundick argues that this Court must analyze the various components of the judgment separately with regard to Mr. Beckett and Mrs. Beckett and as to compensatory and punitive damages. Bundick claims that the award of compensatory damages to Mr. Beckett is insufficient to support a finding of non-dischargeability since there...

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    ...act that must be committed intentionally rather than the injury itself"— a subjective test only with regard to the act); In re Bundick, 303 B.R. 90, 109 (Bankr. E.D. Va. 2003) (defining malice as a distinct test in which "the debtor's subjective mind set is central to the inquiry as to whet......
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