K.D. v. Kimball (In re Kimball)
| Decision Date | 19 March 2015 |
| Docket Number | Case. No. 9:11-bk-10402-PC,Adversary No. 9:13-ap-01181-PC |
| Court | United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Central District of California |
| Parties | In re: SHAWNA LYNN KIMBALL, Debtor. K.D. AND T.D., MINORS, BY AND THROUGH THEIR GUARDIAN AD LITEM, GENE DIFABRITIS, Plaintiffs, v. SHAWNA LYNN KIMBALL, et al., Defendants. |
NOT FOR PUBLICATION
MEMORANDUM REGARDING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND DEFENDANT, RAYMOND E. PENMAN, III'S MOTION FOR SUMMARY JUDGMENT
Time: 10:00 a.m.
Place: United States Bankruptcy Court
Courtroom # 201
1415 State Street
At the above captioned date and time, the court considered the Plaintiff's Motion for Summary Judgment ("Difabritis Motion") and the Defendant, Raymond E. Penman, III's Motion for Summary Judgment ("Penman Motion"). Having considered each motion, the oppositionthereto and the reply, the summary judgment record,1 and argument of counsel, the court will (1) grant the Difabritis Motion against Kimball with respect to the First Claim for Relief made the basis of Plaintiffs' Complaint: (1) to Declare Debt Excepted from Discharge Pursuant to 11 U.S.C. §§ 523(a)(5), 523(a)(15) & 523(a)(4); and (2) Imposition of Constructive Trust [California Civil Code §§ 2224 & 3336] ("Complaint"); (2) deny the Difabritis Motion against Kimball with respect to the Second Claim for Relief; (3) dismiss the Third Claim for Relief as to Kimball with prejudice; (4) drop Penman as a defendant in this adversary proceeding and dismiss the Third Claim for Relief as to Penman without prejudice; and (5) deny the Penman Motion as moot, based on the following findings made pursuant to F.R.Civ.P. 56,2 as incorporated into FRBP 7056 and applied to contested matters by FRBP 9014(c).
On January 27, 2011, Shawna Lynn Kimball ("Kimball") filed a voluntary petition under chapter 7 of the Bankruptcy Code and Jerry Namba ("Namba") was appointed trustee. In her schedules, Kimball disclosed in Schedule A that she did not own an interest in real property on the petition date. In Schedule B, Kimball disclosed personal property having a value of $32,805 consisting of cash, a damaged leased 2009 Mercedes, household goods, furniture and other personal property. Kimball's schedules also disclosed $147,373.21 in debt, consisting of $6,140 owing to Mercedes-Benz Financial and $141,233.41 primarily in credit card debt. The meeting of creditors was conducted and concluded on March 7, 2011, and Namba filed a Chapter 7Trustee's Report of No Distribution on March 9, 2011. Kimball received a discharge on May 10, 2011, and the case was closed on May 17, 2011.
On August 8, 2013, Namba filed a motion to reopen the case based on a tip received from Kimball's ex-husband, Gene Difabritis ("Difabritis"), that Kimball had failed to disclose an interest in certain real property in which she was residing at 11832 Barranca Road, Santa Rosa Valley, CA (the "Subject Property"). On August 9, 2013, an order was entered reopening the case and authorizing the United States trustee to appoint a trustee. Namba was reappointed as trustee; and shortly thereafter, withdrew his no-asset report.
On September 20, 2013, Difabritis filed a motion alleging that Kimball, as a custodian of certain 529 custodial college savings accounts set up for their two minor children, had made unauthorized withdrawals from the accounts prior to bankruptcy. Difabritis sought an order appointing him as guardian ad litem for the two minor children for the purpose of filing "an adversary complaint against [Kimball] to, among other claims, (1) declare the debt owed by [Kimball] for the unauthorized withdrawals non-dischargeable and (2) revoke the discharge granted [Kimball] on May 20, 2011."3 On October 17, 2013, the court entered an order appointing Difabritis guardian ad litem for his minor children, K.D. and T.D., in the case.4
On October 31, 2013, Difabritis filed the Complaint seeking (1) a judgment against Kimball for (a) $49,390.76 in unauthorized withdrawals from K.D.'s 529 custodial college savings account; (b) $49,950.33 in unauthorized withdrawals from T.D.'s 529 custodial college savings account; and (c) a declaration that such amounts are nondischargeable under §§ 523(a)(5), (a)(15) or (a)(4); and (2) a judgment against Kimball and Penman, jointly and severally, for conversion. On March 6, 2014, Penman filed an answer to Difabritis's Complaint in which Penman asserted, among other things, "that as to him, this action does not arise in or relates to Debtor's Chapter 7 proceedings and further [Penman] disputes the Court's jurisdictionto hear this matter."5 On March 26, 2014, Penman filed an amended answer in which he asserted, among other things, "that as to him, this this [sic] action does not arise in or relates to Debtor's Chapter 7 proceedings . . . [Penman] denies this is a core proceeding and [Penman] further objects to entry of final judgment or orders by the Bankruptcy Court. . . [Penman] demands a jury trial."6 On March 7, 2014, Kimball filed an answer to Difabritis's Complaint. She amended her answer on March 26, 2014.
The Difabritis Motion was filed on January 13, 2015. Kimball did not respond to the Difabritis Motion. Penman filed his response in opposition to the Difabritis Motion on February 12, 2015, to which Difabritis replied on February 19, 2015. The Penman Motion was filed on January 22, 2015. Defabritis filed written opposition to the Penman Motion on February 12, 2015, to which Penman replied on February 19, 2015. Both motions were taken under submission after a hearing on March 5, 2015.
This court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 157(b) and 1334(b). This matter is a core proceeding as to Kimball under 28 U.S.C. § 157(b)(2)(A), (I) and (O), and a non-core proceeding as to Penman. Venue is appropriate in this court. 28 U.S.C. § 1409(a). Objections to the dischargeability of a debt are literally and strictly construed against the objector and liberally construed in favor of the debtor. See Quarre v. Saylor (In re Saylor), 108 F.3d 219, 221 (9th Cir. 1997).
1. Rule 56(a) authorizes a party to "move for summary judgment, identifying each claim or defense - or the part of each claim or defense - on which summary judgment is sought." F.R.Civ.P. 56(a). Summary judgment must be granted "if the movant shows that there is nogenuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id.
2. In determining whether a genuine factual issue exists, "a trial judge must bear in mind the actual quantum and quality of proof necessary to support liability . . . ." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). "[T]he judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial . . . . If the evidence is merely colorable, or is not significantly probative, . . . summary judgment may be granted. Id. at 249-250. However, the court's function on a motion for summary judgment is "issue-finding, not issue-resolution." United States v. One Tintoretto Painting Entitled "The Holy Catholic Family With Saint Catherine and Honored Donor, 691 F.2d 603, 606 (2d Cir. 1982).
3. Rule 56 does not permit Anderson, 477 U.S. at 255.
4. Rule 56(c), which identifies the procedures the court and parties must follow in conjunction with motions for summary judgment, states:
(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.
(2) Objection That a Fact Is Not Supported by Admissible Evidence. A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.
(3) Materials Not Cited. The court need consider only the cited materials, but it may consider other materials in the record.
(4) Affidavits or Declarations. An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.
F.R.Civ.P. 56(c). The court may grant summary judgment "[i]f a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c)." See F.R.Civ.P. 56(e)(3).
5. The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex v. Catrett, 477 U.S. 317, 323 (1986). "Once the moving party carries its initial burden, the adverse party 'may not rest upon the mere allegations or denials of the adverse party's pleading,' but must provide affidavits or other sources of evidence that 'set forth specific facts showing that there is a genuine issue for trial.' " Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (quoting former F.R.Civ.P. 56(e)); see Celotex, 477 U.S. at 323-24.
6. When the nonmoving party has the burden of proof at trial, the moving party need only point out "that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325; see Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000) (...
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