In re Gutierrez

• Decision Date: 04 November 2014
• Docket Number: No. 13–10775.,13–10775.
• Citation: 528 B.R. 1
• Court: U.S. Bankruptcy Court — District of Vermont
• Parties: In re A. Paul GUTIERREZ, Debtor.

528 B.R. 1

In re A. Paul GUTIERREZ, Debtor.

No. 13–10775.

United States Bankruptcy Court, D. Vermont.

Signed Nov. 4, 2014.

Heather Z. Cooper, Esq., Kenlan Schwiebert Facey & Goss, P.C., Rutland, VT, for the Debtor.

Elizabeth Marie Demas, Esq., Clarke Demas & Baker, PLLC, Burlington, VT, for the Creditor.

MEMORANDUM OF DECISION

Granting Debtor's Motion for Summary Judgment and Denying Creditor's Motion to Dismiss Chapter 7 Case

COLLEEN A. BROWN, Bankruptcy Judge.

Catamount Holding Co., II, a creditor in this case, has filed a motion to dismiss Mr. Gutierrez's bankruptcy case, alleging Mr. Gutierrez's filing of this case was an abuse of the bankruptcy system. Catamount also alleges Mr. Gutierrez filed his bankruptcy petition in bad faith, and misrepresented information in his bankruptcy schedules to mislead the Court into believing (1) his debts are primarily business debts, (2) he qualifies for relief under Chapter 7, and (3) he is entitled to bankruptcy relief in this District. In response, Mr. Gutierrez filed a motion for summary judgment, seeking denial of Catamount's motion to dismiss, and arguing that the undisputed material facts demonstrate he filed his petition in good faith, he did not manipulate information in his schedules, and he has the right to Chapter 7 bankruptcy relief in the District of Vermont. For the reasons set forth below, the Court finds there are no material facts in dispute, summary judgment is proper, and Mr. Gutierrez is entitled to judgment denying the motion to dismiss this case.

I. JURISDICTION

This Court has jurisdiction over the motion for summary judgment pursuant to 28 U.S.C. §§ 157 and 1334, and the Amended Order of Reference entered by Chief Judge Christina Reiss on June 22, 2012. The Court declares the claims addressed by the instant motion to be core matters under 28 U.S.C. § 157(b)(2)(A), (B), and (O), over which this Court has constitutional authority to enter a final judgment.

II. ISSUES PRESENTED

The Court must first determine whether there are any material facts in dispute and, if not, must then determine whether the undisputed material facts establish that A. Paul Gutierrez (the “Debtor”) is entitled to judgment as a matter of law denying the motion to dismiss filed by Catamount Holding Co., II (the “Creditor”). To adjudicate whether the Debtor is entitled to judgment, the Court must determine whether the record establishes that (i) the Debtor is eligible to commence a bankruptcy case in the District of Vermont, (ii) dismissal is not warranted under 11 U.S.C. § 707(a) based upon bad faith, and (iii) dismissal is not warranted under 11 U.S.C. § 707(b) for abuse of the provisions of Chapter 7.

III. PROCEDURAL HISTORY PERTINENT TO THE SUMMARY JUDGMENT MOTION

The contested matter before the Court has been aggressively litigated, including numerous discovery disputes and multiple motions to strike pleadings from the record. In the interest of brevity, the Court sets forth here the procedural history only to the extent it is relevant to the instant motion.

On November 5, 2013, the Debtor filed a voluntary Chapter 7 petition for relief (doc. # 1). Two months later, on January 9, 2014, the Creditor filed a motion to dismiss the case for abuse under 11 U.S.C. § 707(b)¹ (doc. # 10) (the “Motion to Dismiss”). On February 18, 2014, the Debtor filed an opposition to the Motion to Dismiss (doc. # 17), and on March 4, 2014, the Creditor filed a supplement to its motion (doc. # 23). On March 14, 2014, the Court entered an Order to clarify the scope of litigation (doc. # 27).

On July 14, 2014, the Debtor filed a motion for summary judgment with a statement of undisputed material facts, seeking dismissal of the Creditor's Motion to Dismiss (doc. 57, 57–14) (the “Summary Judgment Motion” and “SUMF” respectively). On August 28, 2014, the Creditor filed its memorandum of law in opposition to the Debtor's Summary Judgment Motion and a response to the Debtor's SUMF, in one pleading (doc. # 64) (the “Opposition” and “Response,” respectively). Finally, on September 5, 2014, the Debtor filed replies to the Opposition and Response (doc. 72, 73) (the “Replies”). At that point the Court deemed the matter fully submitted.

IV. LEGAL STANDARD FOR SUMMARY JUDGMENT RELIEF

Summary judgment is proper if the record shows no genuine issue as to any material fact such that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56 ; Fed. R. Bankr. P. 7056 ; see also Bronx Household of Faith v. Bd. of Educ. of the City of New York, 492 F.3d 89, 96 (2d Cir.2007). The moving party bears the burden of showing that no genuine issue of material fact exists. See Vermont Teddy Bear Co. v. 1–800 Beargram Co., 373 F.3d 241, 244 (2d Cir.2004). A genuine issue exists only when “the evidence is such that a reasonable [trier of fact] could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The substantive law identifies those facts that are material; only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.See Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Factual disputes that are irrelevant or unnecessary are not material. Id. In making its determination, the court's sole function is to determine if there is any material dispute of fact that requires a trial. Id. at 249, 106 S.Ct. 2505 ; see also Palmieri v. Lynch, 392 F.3d 73, 82 (2d Cir.2004). In determining whether there is a genuine issue of material fact, a court must resolve all ambiguities, and draw all inferences, against the moving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (U.S.2007) ; see Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of New Jersey, Inc., 448 F.3d 573, 579 (2d Cir.2006).

If the moving party meets its initial burden, the burden then shifts to the nonmoving party to come forward with evidence sufficient to create a genuine dispute as to a material fact for trial. First Am. Title Ins. Co. v. Moses (In re Moses), 2013 WL 3804721, *4–5, 2013 Bankr.LEXIS 2917, *13–14 (Bankr.E.D.N.Y.2013). To meet this burden, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A party opposing summary judgment does not show the existence of a genuine issue of fact to be tried merely by making assertions that are conclusory or based on speculation. Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 310–312 (2d Cir.2008). Rather, the nonmoving party must present “significant probative evidence” that a genuine dispute of fact exists. Anderson, 477 U.S. at 249, 106 S.Ct. 2505 (citation and internal quotation marks omitted). If the nonmoving party does not come forward with specific facts to establish an essential element of that party's claim on which it has the burden of proof at trial, the moving party is entitled to summary judgment. See Celotex Corp., 477 U.S. at 323–25, 106 S.Ct. 2548 (“One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses ... the burden on the moving party may be discharged by ‘showing’—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case”); see also Tufariello v. Long Island R. Co., 458 F.3d 80, 85 (2d Cir.2006). If the movant produces sufficient evidence to support its asserted inference, and the respondent fails to produce significantly probative evidence to counter the inference, disposition by summary judgment may be appropriate even though subjective factors such as motive or intent are the fact issues in question. Towle v. Hendrix (In re Hendrix), 352 B.R. 200, 204–205 (Bankr.W.D.Mo.2006).

V. DISCUSSION

A. Are there any material facts in dispute?

The Creditor asserts that there are material facts in dispute. In his Replies, the Debtor argues that the Creditor's Opposition and Response asserting such alleged disputes are not supported by competent summary judgment evidence, and asks the Court to treat his SUMF as unopposed. See doc. 72, 73. In order to ascertain if the first prong of the summary judgment test—whether there are no material fact in dispute—is met, the Court will examine each of the material facts the Creditor identifies as disputed.

The first such fact the Creditor identifies is that the Debtor properly represented the amount and type of debt he owed to the Creditor as of the petition date. SUMF ¶ 10. The Creditor argues that the amount the Debtor owed to it as of November 5, 2012 is in dispute. Opposition, pp. 2–4, 11–12; Response ¶¶ 10, 14. The Court finds the question of whether the Debtor properly scheduled the Creditor's claim in his bankruptcy schedules is a legal question and therefore is not a disputed fact for purposes of this Summary Judgment Motion. Moreover, to the extent the Creditor disputes facts underlying this legal issue, the Creditor has failed to identify any materials in the record to establish that dispute. Hence, the Court finds the Creditor has failed to establish the Debtor's scheduling of the Creditor's claim in the amount of $400,000, and as unliquidated, disputed, and contingent, is in dispute or precludes the Debtor from obtaining summary judgment relief.

The second fact the Creditor alleges to be in dispute is the Debtor's statement that he properly represented the amounts and existence of various other small business debts in his schedules. SUMF ¶ 27; doc. # 1. The Creditor argues that there was no reason for the Debtor to list those business debts in his bankruptcy petition and that he listed them for some improper purpose. Opposition, pp. 8, 11. The Court finds the...