In re Feiner
| Decision Date | 27 September 2000 |
| Docket Number | Bankruptcy No. 99-12009-7. Adversary No. 99-5249. |
| Parties | In re Howard FEINER, Debtor. CSC Holdings, Inc., Plaintiff, v. Howard Feiner, Defendant. |
| Court | United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of Kansas |
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Daniel J. Lefkowitz, Patrick J. Sullivan, Jericho, NY, for plaintiff.
William B. Sorensen, Wichita, KS, for plaintiff.
William H. Zimmerman, Case, Moses, Zimmerman & Wilson, P.A., Wichita, KS, for debtor/defendant.
Edward J. Nazar, Wichita, KS, trustee.
Plaintiff CSC Holdings, Inc. ("CSC") filed a Complaint to Determine Non-Dischargeability of Debt, which CSC and Debtor/Defendant Howard Feiner ("Feiner") have asked the Court to determine on their submitted Stipulation of Facts and memoranda of law. In Feiner's memorandum in response to CSC's memorandum, Feiner stipulated to paragraphs 11, 12, 13 and 14 of CSC's statement of facts. Feiner also filed a Motion to Supplement the Record. The stipulated facts are paraphrased as follows.
In 1997, after a trial in the United States District Court for the Eastern District of New York, the court issued an Opinion and Order finding that Feiner had used a describing device purchased from Video-Link to intercept CSC's1 pay-per-view programming services for an aggregate period of at least two years. The District Court awarded statutory damages to CSC in the amount of $5,000; entered a permanent injunction against Feiner's future violation of the Communications Act; dismissed Feiner's counterclaim; and directed CSC to submit documentation of its attorneys' fees. The District Court ultimately awarded $20,036.25 in attorneys' fees and $1,856.00 in disbursements to CSC. Thus, the total amount of Feiner's liability to CSC is $26,892.25. This judgment, the parties stipulate, is a final order.
In 1999, Feiner filed a voluntary petition for relief under Chapter 7 of Title 11 of the United States Code.2 CSC has not filed a proof of claim, but claims it is owed $26,892.25.3 CSC filed a complaint under § 523(a)(6)4 seeking the Court's determination that CSC's judgment against Feiner is not dischargeable.
In their Stipulation, CSC and Feiner stipulated to admission of a number of documents and transcripts for this Court's consideration: the District Court's Opinion and Order entered October 17, 1997; the District Court's Order entered March 6, 1998; the Transcript of the Bench Trial, July 21-22, 1997, in the District Court action; the Second Circuit Court of Appeal's Opinion affirming the District Court's rulings; and the Depositions of Howard Feiner, Martin Golub, Lynn Gruenfelder, Joel Schwartz, David Pessin.5
District Court's Findings of Fact in Opinion and Order entered October 17, 1997.
CSC6 is a cable television system operator that is franchised by the towns and municipalities of Nassau County, New York, to provide them with cable television service. CSC offers a range of programming options to individual subscribers and enters into a contract with each subscriber based upon the package received. In addition to a basic level service that provides a range of network and cable channels, a subscriber may contract to pay additional charges in order to receive one or more "premium" channels, such as Home Box Office or Cinemax. CSC also offers "pay-per-view" programming, which allows subscribers to order individual movies, sports or entertainment events and be charged a fee for each movie or event received.
If an individual subscriber does not contract to receive channels, the programming signal for those channels is "scrambled" by CSC, which blocks their reception. This is also the case with respect to individual pay-per-view events or movies for which a subscriber has not contracted. However, it is possible to purchase an electronic device commonly known as a "descrambler," that when connected to equipment installed by CSC, allows for unauthorized reception of blocked signals.
Howard Feiner, while a customer of CSC, bought and used a descrambling device that permitted him to obtain service, namely, pay-per-view, for which he had not contracted. Feiner admits that he purchased the descrambler from Video-Link Enterprises, Inc. on July 26, 1990, and that he used it successfully over a period of a few days. Feiner further admits that he returned the device to Video-Link for exchange because it became inoperative, and Video-Link sent him another model in exchange on August 10, 1990, that he used for a period of at least two years.
CSC seeks a determination that Feiner's debt is not dischargeable under § 523(a)(6), which excepts from discharge, "debts for willful and malicious injury by the debtor to another entity or to the property of another entity."7 CSC has the burden of proving by a preponderance of evidence that Feiner's debt is nondischargeable under § 523(a)(6).8 Under this section, the Court must determine whether the debt is for an injury that is both willful and malicious. In Kawaauhau v. Geiger,9 the Supreme Court defined "willful" as a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury.
Before the Geiger10 decision, the focus of the "malicious" inquiry was on the debtor's actual knowledge or the reasonable foreseeability that her conduct would result in injury to the creditor, "not on abstract and perhaps moralistic notions of the `wrongfulness' of the debtor's act."11 But, there is little distinction now between the willful and malicious elements, given the Supreme Court's holding that the actor must have specifically intended the injury.
In this case, the United States District Court for the Eastern District of New York granted judgment to CSC under § 553(1) of the Communications Act12 which provides:
No person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law.
The District Court found that Feiner intercepted or received pay-per-view service over CSC's cable system, without authorization, and without paying for the service. The District Court, having considered the testimony of witnesses, found Feiner's testimony and defenses not credible. Feiner claimed that he bought a descrambler to receive service he was already receiving. This, of course, defies common sense and reason. As many other courts have found, these descramblers have only one purpose: the interception of cable television programming services that are otherwise scrambled.13 Feiner also claimed that he had no intent to steal pay-per-view service, for had that been his intent, he would have also stolen premium channels instead of paying for them. The District Court did not find that defense credible. Feiner's third defense demonstrates why the District Court found his second defense not credible. His third defense was, in essence, "I am paying for services I don't use, therefore, I should get the pay-per-view service for free!"
The District Court found credible the testimony of Feiner's former wife that Feiner instructed her to not allow CSC service personnel into the house unless he had "unhooked the wires." This, of course, demonstrates that Feiner was using the descrambler. Why else would it be hooked up? It further demonstrates that Feiner knew he did not have CSC's authorization, and that he knew he was doing injury to CSC by getting the pay-per-view service for free. It is clear that the District Court concluded that Feiner received pay-per-view service, knowingly received it, and received it knowing that he had no authorization from CSC to receive it without paying for it.
Feiner, an engineer, is an educated man. His claim that he purchased the descrambler only to get service for which he had already paid, is a thoroughly disingenuous claim. Also disingenuous is Feiner's defense that, had he wanted to steal pay-per-view service, he wouldn't have contracted with CSC to purchase the premium channels for which he did pay. Furthermore, there is no merit in Feiner's claim that he was entitled to free pay-per-view service since he worked in Connecticut six days a week in 1990 and was unable to use the service he was paying for.
These findings must be given preclusive effect in this case. The doctrine of collateral estoppel requires the court to refrain from relitigating factual matters already decided in a previous court proceeding.14 The Court is bound by factual determinations made in a previous court on issues where:
(1) the issue previously decided is identical with the one presented in the action in question, (2) the prior action has been finally adjudicated on the merits, (3) the party against whom the doctrine is invoked was a party or in privity with a party to the prior adjudication, and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action.15
The issues of Feiner's use of the descrambler without justification or excuse, with intent to receive service without paying for it, and with knowledge that he had no authorization from CSC and was thus stealing from CSC, are all issues that were actually and necessarily litigated in the District Court action. That litigation resulted in a final and valid judgment against Feiner. Thus, this Court will not relitigate the issues of Feiner's intent, knowledge, and unauthorized use of the descrambler.
This Court agrees with CSC that, although the parties stipulated not only to the District Court's opinion, but to the admission of the trial transcript and depositions, this Court is precluded from reexamining the trial transcript and deposition. The District Court has made findings of fact on the basis of that testimony and this Court gives...
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