In re Fischer

• Decision Date: 02 March 2001
• Docket Number: No. 95-17119-608.,95-17119-608.
• Citation: 259 BR 23
• Parties: In re David FISCHER, Debtor.
• Court: U.S. Bankruptcy Court — Eastern District of New York

259 B.R. 23 (2001)

In re David FISCHER, Debtor.

No. 95-17119-608.

United States Bankruptcy Court, E.D. New York.

March 2, 2001.

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Heller, Horowitz & Feit, P.C., New York, for Gitel Fischer and Crown Montgomery Homes, Inc.

Nutovic & Associates, New York, for David Fischer, Debtor.

Weinstock, Joseph, Klatsky & Schwartz, LLP, Belle Harbor, for Claimant Chevra Machziket Hashchuna, Inc.

Rosenberg, Musso & Weiner, Brooklyn, for Robert Musso Chapter 7 Trustee.

Allegaert, Berger & Vogel LLP, Bauman Katz & Grill LLP, New York, for The Crown Heights Jewish Community Council, Inc.

MEMORANDUM OPINION

CARLA E. CRAIG, Bankruptcy Judge.

This matter comes before the Court on the motion of the debtor, David Fischer ("debtor" or "Fischer") for summary judgment expunging claims filed by Crown Heights Jewish Community Council (the "Council") and Chevra Machziket Hashchuna, Inc. ("CMH") (collectively, "Claimants"), and on Claimants' motions for partial summary judgment. For the reasons set forth in this opinion, Fischer's motion for summary judgment is granted, and Claimants' motions are denied.

Jurisdiction

This Court has jurisdiction of this core proceeding pursuant to 28 U.S.C. §§ 1334(b) and 157(b)(2)(B) and the Eastern District of New York Standing Order of Reference dated August 28, 1986.

Procedural History

On August 15, 1995, an involuntary petition was filed against Fischer, and on May 6, 1998, an order for relief was entered against Fischer under chapter 7 of the Bankruptcy Code.

Fischer objects to claims numbers 20, 113 and 119 filed by the Council, and to claims numbers, 19, 114 and 117 filed by CMH (collectively, the "Claims"). Although some of the Claims were filed after the November 6, 1998 bar date, Fischer seeks the disallowance of the Claims on the merits.

The Claims, and Fischer's objections thereto, are the latest battle in a litigation war that has been waged between Fischer and Claimants for almost a decade. Each of the Claims annexes, by way of explanation of the basis for the amounts demanded, a copy of the complaint in the action entitled Crown Heights Jewish Community Council, Inc. v. Fischer, 63 F.Supp.2d 231 (E.D.N.Y.1999), aff'd mem., 216 F.3d 1071 (2d Cir.2000), which was commenced in 1992 in the United States District Court for the Eastern District of New York (the "District Court Action"). In the District Court Action, the Council and CMH asserted claims against Fischer and twenty other defendants pursuant to the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.A. §§ 1961-68 (West 2000), as well as claims against Fischer under New York law, including claims for breach of fiduciary duty, embezzlement, and falsification of business records. In a Report and Recommendation dated December 1, 1998 (the "Report")^*, United States Magistrate Judge Steven M. Gold recommended dismissal of the RICO claims, and dismissal, without prejudice, of the state law causes of action. The Report was adopted in its entirety by the District Court, after de novo review, and the District Court's judgment dismissing the District Court Action was affirmed by the Second Circuit.^**

After the district court entered its judgment dismissing the District Court Action, Fischer sought to expunge the Claims in this Court based on collateral estoppel and res judicata, arguing that those doctrines should apply because the Claims are based entirely on the allegations of the District Court complaint, and the state law claims asserted in the District Court complaint, although dismissed without prejudice, are based upon the same factual allegations as the dismissed federal claims. In an opinion dated August 29, 2000, the Honorable Laura Taylor Swain, to whom this case was then assigned, denied Fischer's motion, holding that the dismissal of the District Court Action had been based upon the insufficiency of the evidence offered by the plaintiffs and could not be construed as a factual finding in favor of the defendants. In re Fischer, 252 B.R. 603 (Bankr. E.D.N.Y.2000). Judge Swain pointedly noted, however, that

The Council and CMH should . . . reflect on the District Court\'s analysis of their prior factual proffers and must offer relevant evidence of a different quality, in appropriate form, if they mean to survive summary disposition on the merits of their claims in this proceeding. The Court\'s decision today does not preclude Fischer from invoking collateral estoppel as to the matters of evidentiary admissibility and interpretation on which the District Court did make findings.

Id. at 612.

Fischer now seeks summary judgment expunging the Claims on the merits. In response, Claimants have placed before the Court portions of the record on the summary judgment motion in the District Court Action, and have also proffered several items that they claim constitutes new evidence supporting their claims. Fischer argues that the new evidence is inadmissible or otherwise insufficient to defeat summary judgment. Fischer further argues that the Claims are barred by the applicable statute of limitations. Fischer's statute of limitations argument will be addressed first, and Claimants' evidentiary offerings will be then examined for sufficiency on the merits of the Claims.

Standard for Summary Judgment

Summary judgment is appropriate "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 judgment as a matter of law." Fed. R. Bankr.P. 7056(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "On summary judgment the inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (citations omitted); see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The Court's function is not to resolve disputed issues of fact, but only to determine whether there is a genuine issue to be tried. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The moving party has the initial burden of demonstrating the non-existence of any genuine issue of material fact, which burden may be discharged by pointing out the absence of evidence supporting the nonmoving party's case. Celotex, 477 U.S. at 323-325, 106 S.Ct. 2548. Once faced with a properly supported motion, Rule 56(e) requires the non-moving party to go beyond the pleadings and by his or her own affidavits, or by the "depositions, answers to interrogatories, and admissions on file," designate "specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. 2548. No genuine issue exists "unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. 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. 2505.

The non-moving party must present affirmative evidence in order to defeat a properly supported motion for summary judgment. Id. at 257, 106 S.Ct. 2505. Therefore, it "must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita, 475 U.S. at 586, 106 S.Ct. 1348, or simply raise doubts as to the veracity of the moving party's assertions. Borgognone v. Trump Plaza, No. 98-CV-6139(ILG), 2000 WL 341135, at * 7 (E.D.N.Y. March 9, 2000); Fischer, 63 F.Supp.2d at 240-241, citing, Claudio v. United States, 907 F.Supp. 581, 584 (E.D.N.Y.1995); Harper v. United States, 949 F.Supp. 130, 131-132 (E.D.N.Y.1996).

A mere scintilla of evidence is insufficient to defeat a properly presented summary judgment motion. See Anderson, 477 U.S. at 252, 106 S.Ct. 2505. Conclusory allegations, conjecture and speculation will not create a genuine issue of fact. Kerzer v. Kingly Mfg., 156 F.3d 396, 400 (2d Cir.1998). The Court may consider the entire record, not just the evidence highlighted by the parties. See Turco v. Hoechst Celanese Corp., 101 F.3d 1090, 1093 (5th Cir.1996).

Rule 56(e) further provides that "supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters therein." Therefore, hearsay testimony contained in an affidavit may not be considered on summary judgment unless it would be admissible at trial pursuant to one of the exceptions to the hearsay rule. See H. Sand & Co. v. Airtemp Corp., 934 F.2d 450, 454-455 (2d Cir.1991). To the extent that a Rule 56(e) affidavit contains inadmissible hearsay which references other evidence that is properly before the court, the court may disregard the hearsay and separately consider the admissible evidence. John Hancock Property and Cas. Ins. Co. v. Universale Reinsurance Co., Ltd., 147 F.R.D. 40, 45 (S.D.N.Y.1993). It is also well established that "a party's affidavit which contradicts his own prior deposition testimony should be disregarded on a motion for summary judgment." Mack v. United States, 814 F.2d 120, 124 (2d Cir.1987). Otherwise, "a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own prior testimony," thus "diminishing the utility of summary judgment as a procedure for screening out sham issues of fact." Perma Research & Dev. Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir.1969).

When no rational trier of fact could find in favor of the non-moving party because the evidence to support its case is so slight, there is no genuine issue of material fact requiring a trial...