In re Labidou, Case No. 08-29828-EPK (Bankr. S.D.Fla. 9/8/2009)
| Decision Date | 08 September 2009 |
| Docket Number | Case No. 08-29828-EPK.,Adv. No. 09-01287-EPK. |
| Parties | In re: HYGENS LABIDOU and YOLENE MARIE DURANDIS, Chapter 7, Debtors. GERALD J. TOBIN, Plaintiff, v. HYGENS LABIDOU and YOLENE MARIE DURANDIS, Defendants. |
| Court | U.S. Bankruptcy Court — Southern District of Florida |
THIS MATTER came before the Court on May 28, 2009 upon the filing of the Plaintiff's Motion for Summary Judgment as to Counts 4 and 5 of Plaintiff's Complaint Objecting to Discharge Pursuant to 11 U.S.C. § 727 and Dischargeability of Debt Pursuant to 11 U.S.C. § 523 (the "Motion for Summary Judgment") [DE 17].
Gerald J. Tobin (the "Plaintiff") asks the Court to rule that his claims against Hygens Labidou and Yolene Marie Durandis (together, the "Debtors") are excepted from discharge under 11 U.S.C. §§ 523(a)(2)(A) and 532(a)(4) based on a Florida state court final default judgment obtained by Plaintiff against the Debtors and others. The Plaintiff's state court judgment arose from a multi-count complaint. One count stated in the state court complaint could result in claims excepted from discharge in this bankruptcy case. The state court judgment states a general award of damages without specific findings relating to the separate counts of the state court complaint. It is impossible to tell whether any part of the damages awarded in the state court judgment were attributed to a claim excepted from discharge in this bankruptcy case. Because this Court cannot determine that a potentially non-dischargeable claim stated in the state court complaint was a "critical and necessary part" of the state court judgment, the issues determined by the state court judgment are not accorded issue preclusive effect in this adversary proceeding. As a result, and for the foregoing reasons, the Motion for Summary Judgment is denied.
On December 24, 2008, the Debtors commenced a chapter 7 case by filing a voluntary petition with this Court.
On March 27, 2009, Plaintiff filed a Complaint Objecting to Discharge Pursuant to 11 U.S.C. § 727 and Dischargeability of Debt Pursuant to 11 U.S.C. § 523 (the "Complaint") [DE 1], initiating this adversary proceeding against the Debtors. The Complaint contains six (6) counts. Counts 1 through 3 seek denial of the Debtors' discharge under multiple subsections of 11 U.S.C. § 727. Counts 4 through 6 seek a determination of the non-dischargeability of a debt under multiple subsections of 11 U.S.C. § 523.
On May 28, 2009, Plaintiff filed his Motion for Summary Judgment. The Motion for Summary Judgment concerns only Counts 4 and 5 of the Complaint, the counts addressing 11 U.S.C. §§ 523(a)(2)(A) (fraud) and 523(a)(4) (larceny).
On June 2, 2009, the Court issued an Order Setting Briefing Schedule on Plaintiff's Motion for Summary Judgment as to Counts 4 and 5 of Plaintiff's Complaint Objecting to Discharge Pursuant to 11 U.S.C. § 727 and Dischargeability of Debt Pursuant to 11 U.S.C. § 523 (the "Order Setting Briefing Schedule") [DE 21].1
On June 22, 2009, the Debtors filed Defendants' Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment [DE 24], and on July 2, 2009, the Plaintiff filed Plaintiff's Reply to Defendants' Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment as to Counts 4 and 5 of Plaintiff's Complaint Objecting to Discharge Pursuant to 11 U.S.C. § 727 and Dischargeability of Debt Pursuant to 11 U.S.C. § 523 [DE 29].
On December 9, 2004, the Plaintiff filed a complaint (the "State Court Complaint") against the Debtors and others commencing an action (the "State Court Action") in the Miami-Dade County Circuit Court. The State Court Complaint included three counts. The first count was for breach of an oral contract, alleged that the Plaintiff suffered damages in the amount of "at least" $40,000, and requested such amount and "any other relief the court deems appropriate under the facts and circumstances herein." The second count was for fraud. The third count was for conversion.
It appears that the Debtors participated in the State Court Action in the beginning but eventually discontinued their defense. On or about July 16, 2008, the state court conducted a jury trial, and on July 16, 2008 a verdict form was filed in the State Court Action. The verdict form awarded damages in the amount of $91,540. On July 16, 2008 the state court entered its Default Final Judgment against the Debtors (and others) for $93,821.55, reflecting the verdict of $91,540 plus $2,281.55 in court costs. The Default Final Judgment provides, in pertinent part, as follows:
This action was heard after entry of Default against the Defendants, IMPACT ROOFING, INC., a Florida corporation; MARIE DURANDIS, an individual; MARIE DURANDIS, an individual; HIGGINS LABIDOU, an individual; and LOUIS LABIDOU, an individual and
IT IS ORDERED and ADJUDGED that Plaintiff, GERALD J. TOBIN, 2701 South Bayshore Drive, Suite 602, Miami, Florida 33133 recover from the Defendants, IMPACT ROOFING, INC., a Florida corporation, c/o Louis Labidou, 1826 Wisteria Street, Wellington, Florida 33414; MARIE DURANDIS, an individual, 1826 Wisteria Street, Wellington, Florida 33414; MARIE DURANDIS, an individual, 1015 Loxahatchee Drive, West Palm Beach, Florida 33414; HIGGINS LABIDOU, an individual, 1826 Wisteria Street, Wellington, Florida 33414; and LOUIS LABIDOU, an individual, 1826 Wisteria Street, Wellington, Florida 33414 in the sum of $91,540 in principal and $2,281.55 in Court costs for the total sum of $93,821.55 for all of which let execution issue and which sum shall bear interest at a rate of 11% per year.
In his Motion for Summary Judgment, the Plaintiff seeks a determination that the obligation represented by the Default Final Judgment is non-dischargeable under 11 U.S.C. §§ 523(a)(2)(A) and 523(a)(4). Section 523(a)(2)(A) provides that a discharge in a chapter 7 case does not discharge an individual debtor from any debt for money to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition. Section 523(a)(4) provides that a discharge in a chapter 7 case does not discharge an individual debtor from any debt for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny. In each case, the Plaintiff asks the Court to rule that the issues determined in the Default Final Judgment entered in the State Court Action have issue preclusive effect in this adversary proceeding.
The standard for summary judgment is set forth in Rule 56 of the Federal Rules of Civil Procedure, which is made applicable to this adversary proceeding by Rule 7056 of the Federal Rules of Bankruptcy Procedure. Rule 56 provides that the moving party will prevail on a motion for summary judgment 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 a judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317 (1986). In considering a motion for summary judgment, a court is required to view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
The moving party has the burden of establishing that there is an absence of any genuine issue of material fact. Celotex, 477 U.S. at 323. A moving party discharges its burden on a motion for summary judgment by showing that there is an absence of evidence to support the non-moving party's case. Id. at 325.
The party opposing the motion for summary judgment may not rest upon mere allegations or denials of the pleadings. After the moving party has met its burden of coming forward with proof of the absence of any genuine issue of material fact, the non-moving party must make a sufficient showing to establish the existence of an essential element to that party's case, and on which that party will bear the burden of proof at trial. Celotex, 477 U.S. at 324; Poole v. Country Club of Columbus, Inc., 129 F.3d 551, 553 (11th Cir. 1997). If the record presents factual issues, the court must not decide them; it must deny the motion and proceed to trial. Environmental Defense Fund v. Marsh, 651 F.2d 983, 991 (5th Cir. 1981).2 By its very terms, the standard for summary judgment provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. The requirement is that there be no genuine issue of material fact. Anderson, 477 U.S. at 247-48. A dispute about a material fact is "genuine" if the "evidence is such that a reasonable [finder of fact] could return a verdict for the nonmoving party." Id. at 248.
Collateral estoppel, or issue preclusion, bars re-litigation of an issue previously decided in judicial or administrative proceedings if the party against whom the prior decision is asserted had a full and fair opportunity to litigate that issue in the earlier case. St. Laurent v. Ambrose (In re St. Laurent), 991 F.2d 672, 675 (11th Cir. 1993) (citing Allen v. McCurry, 449 U.S. 90, 95 (1980)). Collateral estoppel applies in dischargeability actions. Id. (citing Grogan v. Garner, 498 U.S. 279 (1991))).
If the prior judgment was rendered by a state court, then the collateral estoppel law of that state must be applied to determine the judgment's preclusive effect. Id. at 675-76 (citing In re Touchstone, 149 Bankr. 721, 725 (Bankr. S.D. Fla. 1993)). Under Florida law, the following elements must be established to invoke collateral estoppel: (1) the issue at stake must be...
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