In re Harmon
| Decision Date | 15 April 2009 |
| Docket Number | Adversary No. 07-02048.,Bankruptcy No. 07-21292. |
| Citation | 404 B.R. 521 |
| Parties | In re Harold Eugene HARMON, Debtor. Deborah Caruso, Plaintiff, v. Harold Eugene Harmon, Defendant. |
| Court | U.S. Bankruptcy Court — Western District of Missouri |
Harry D. Boul, William D. Rotts, Rotts & Gibbs, L.L.C., Columbia, MO, for Plaintiff.
Harvey A. Hoffman, Columbia, MO, for Defendant.
This adversary comes before the Court on the Complaint filed by Deborah Caruso ("Plaintiff"), against Harold Eugene Harmon ("Debtor"). Plaintiff argues that the debt owed to her by Debtor in the amount of $324,768.50 should be non-dischargeable pursuant to 11 U.S.C. § 523(a)(6) and that the doctrine of collateral estoppel should bar relitigation of this issue. The parties have stipulated that if the Court finds collateral estoppel inapplicable to this case, that the question of dischargeability shall be submitted to the Court upon submission of the pleadings on file in the adversary and the state court record for Case No. 04CV 166044 decided in the Circuit Court of Boone County, Missouri. This is a core proceeding under 28 U.S.C. § 157(b)(2)(I) over which the Court has jurisdiction pursuant to 28 U.S.C. §§ 1334(b), 157(a) and (b)(1). The following constitutes my Findings of Fact and Conclusions of Law in accordance with Rule 7052 of the Federal Rules of Bankruptcy Procedure. For the reasons set forth below, the Court finds that Debtor is collaterally estopped from relitigating the issue of whether Plaintiff's injury was a result of Debtor's willful and malicious conduct as those issues have necessarily been determined by the state court in the prior litigation. The Court also finds that even if collateral estoppel were not applicable in this case, that there is more than sufficient evidence to support an independent finding from this Court that Debtor's actions caused Plaintiff a willful and malicious injury and the judgment debt is non-dischargeable pursuant to § 523(a)(6).
On April 20, 2004, Plaintiff filed a petition in the Circuit Court of Boone County, Missouri, asserting that Debtor had committed a series of tortious assaults and batteries upon her. On August 23, 2007, Debtor filed for protection under Chapter 7 of the Bankruptcy Code. On December 3, 2007, Plaintiff filed this adversary proceeding in which she alleged that Debtor is liable to her for damages, resulting from a series of assaults and batteries, which were carried out in a willful and malicious manner such that the damages she sustained are non-dischargeable pursuant to § 523(a)(6). On March 6, 2008, the Court remanded the tort claim to the state court for trial. On August 27, 2008 a trial was held in the state court and a judgment was entered finding Debtor liable to Plaintiff for assault and battery in the amount of $324,768.50. On September 17, 2008, Debtor filed a Notice of Appeal of the judgment of the circuit court, and said appeal is now pending in the Missouri Court of Appeals for the Western District of Missouri.
According to the state court trial transcript, at the time of the assault and battery which was the subject of her complaint, Plaintiff was in her mid forties and was employed as a manager/bookkeeper for a small, convenience store located just south of Columbia, Missouri in the town of Pierpont. Debtor owned two construction businesses, each of which had a charge account at the store, and he frequented the store with some regularity where either he, or his employees, would go inside the establishment to make various purchases. Between late December of 1999 and April 22, 2002, Debtor engaged in ten to twelve instances of physical abuse, and multiple instances of mental and emotional abuse of Plaintiff which caused her to suffer both physical and mental trauma. Plaintiff reported to the owners of the store that she was experiencing problems with Debtor, and he was asked three separate times to leave her alone. On each such occasion, Debtor stopped going into the store for a short period of time and then eventually he would resume his previous habit of frequenting the store and sexually harassing Plaintiff. There are video tapes which reflect some of the behaviors described by Plaintiff, which served as evidence at the state court trial.
On April 22, 2002, Plaintiff reported the abuse to the police which resulted in Debtor's arrest. Plaintiff continued to work at the store until October of that year. Plaintiff has not been employed since that time. In addition to the physical bruising that she suffered while the abuse was happening, she has since been diagnosed with Post-Traumatic Stress Disorder ("PTSD") and she suffers with several other previously diagnosed mental conditions, which were exacerbated by the abuse.
Plaintiff's position is that the question of whether her injuries were a result of Debtor's willful and malicious conduct was necessarily determined by the state court's finding that Debtor committed the intentional torts of assault and battery.1 She argues that Debtor should be collaterally estopped from relitigating this issue and that the judgment debt is non-dischargeable pursuant to § 523(a)(6). Debtor concedes that the evidence is indisputable that his conduct was "deliberate," but argues that collateral estoppel should not bar him from litigating the issue of malice because no punitive damages were awarded and no specific finding of willfulness or maliciousness was made. Debtor asserts that this Court should consider the defenses he raised at the trial, i.e. his various psychological conditions, and the fact that punitive damages were not awarded and find, despite the finding of liability for assault and battery, that he did not have the requisite intent, nor could he have known that his actions would cause Plaintiff damages, and thus the judgment should not be non-dischargeable pursuant to § 523(a)(6).
If the Court finds that the issues of willfulness and maliciousness were not litigated in the prior adjudication, Plaintiff argues there is sufficient evidence in the state court record for this Court to make an independent finding that Debtor's conduct rose to the level of willful and malicious under § 523(a)(6), as those terms have been defined by the Eighth Circuit, and thus the judgment is non-dischargeable and Debtor disagrees. The parties waived their right to a trial and stipulated that, if collateral estoppel is inapplicable, the Court may make its determination based on a review of the state court record.
Collateral estoppel applies to non-dischargeability proceedings under § 523(a)(6). Grogan v. Garner, 498 U.S. 279, 284 n. 11, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). "Collateral estoppel is a legal doctrine that `bar[s] the relitigation of factual or legal issues that were determined in a prior ... court action,' and applies to bar relitigation in federal court of issues previously determined in state court." Johnson v. Miera, 926 F.2d 741, 743 (8th Cir.1991). When determining whether collateral estoppel arises from a prior state court judgment, federal courts apply the substantive law of the forum state in whose courts the prior judgment was entered. Osborne v. Stage, 321 B.R. 486, 493 (8th Cir. BAP 2005); Factors v. Calvert (In re Calvert), 105 F.3d 315, 319 (6th Cir.1997); Pahlavi v. Ansari (In re Ansari), 113 F.3d 17, 19 (4th Cir.1997).
Missouri courts consider four factors in applying collateral estoppel: (1) the issues in the present case and the prior adjudication must be identical; (2) the judgment in the prior adjudication must be on the merits; (3) the party against whom collateral estoppel may apply participated as a party or was in privity with a party to the prior adjudication; and (4) the party against whom the doctrine may apply must have had a full and fair opportunity to litigate the issue in the prior suit. Fischer v. Scarborough (In re Scarborough), 171 F.3d 638, 640 (8th Cir.1999), Galaxy Steel & Tube, Inc. v. Douglass Coal & Wrecking, Inc., 928 S.W.2d 420, 422 (Mo.Ct.App. 1996). The party asserting collateral estoppel has the burden of establishing that all four elements are satisfied. Miera, 926 F.2d at 743.
In this case, the state court has already conducted a trial on the merits, a valid judgment was entered and both parties had a full and fair opportunity to litigate. The only element of collateral estoppel in question is whether the issues sought to be precluded from relitigation— whether Debtor willfully and maliciously injured Plaintiff—are identical to the issues that were decided by the state court. When making the determination that an issue was actually litigated and was necessary to the decision in the prior proceeding, the court should examine the entire record of the earlier case. Miera, 926 F.2d at 743.
In order to determine whether the issues of willfulness and maliciousness were necessarily determined by the state court's judgment of assault and battery, the Court must compare the state law definitions of assault and battery with the Eighth Circuit's definitions of willful and malicious. If the Court concludes that the state court's finding of liability for assault and battery necessarily required a finding that the assault and battery was also "willful and malicious", as defined by federal law, the Debtor is collaterally estopped from contesting dischargeability.
Assault is defined as "any unlawful offer or attempt to injure another with the apparent present ability to effectuate the attempt under circumstances creating a fear of imminent peril." Phelps v. Bross, 73 S.W.3d 651, 655 (Mo.App. E.D.2002). "The assault is complete, `if the intent, with the present means of carrying it into effect, exists and preparations therefor have been made' ... even though there has been no actual violence to the...
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