Loucas v. Cunningham (In re Cunningham)
| Decision Date | 04 March 2015 |
| Docket Number | Advs No. 14–375,Bankruptcy No. 14–15010 |
| Citation | 526 B.R. 578 |
| Parties | In re Grady Clark Cunningham Jr., Debtor(s) Sean Loucas, James Schwar and Kristy Schwar, Plaintiff(s) v. Grady Clark Cunningham, Jr., Defendant(s) |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Stephen G. Bresset, Bresset & Santora, LLC, Honesdale, PA, for Plaintiff(s).
Patrick J. Best, Anders, Riegel & Masington LLC, Stroudsburg, PA, for Defendant(s).
OPINION SUR
ORDER OF FEBRUARY 4, 2015
On February 4, 2015 this Court entered a bench order granting Debtor's Motion for Summary Judgment. The effect of that order was to dismiss this adversary proceeding against him.1 On February 18, the Plaintiff filed a Notice of Appeal which was amended five days later. In accordance with L.B.R. 8001–1(b), this written opinion is filed in support of the Court's February 4 Order.
The Plaintiffs filed this adversary proceeding against the Debtor seeking to have their claims against him excepted from his discharge. The Debtor filed an Answer to the Complaint opposing the relief. The pleadings having been closed, the Court entered a Pre–Trial Order which governed discovery and pretrial motions.
During the pre-trial phase of this litigation, the Debtor propounded discovery upon the Plaintiffs. That discovery consisted of a set of interrogatories, a request for production of documents, and a request for admissions. The Plaintiffs do not appear to have propounded discovery of their own but instead moved directly for summary judgment. The Debtor responded to the Plaintiffs' Motion and indicated an intention to file his own summary judgment request; however, Debtor planned to base his motion on evidence obtained in discovery. The discovery requests served upon the Plaintiff remained unanswered, however, and so the Debtor sought an extension of the discovery deadline set forth in the Pre–Trial Order. The Court granted that request. When the Plaintiffs did respond to Debtor's discovery, Debtor considered it incomplete and filed a Motion to Compel. At the same time, the Debtor proceeded to file his Motion for Summary Judgment.
On January 7, 2015, the Court convened a Pre Trial conference. The Court's purpose in scheduling that conference was two-fold. First, it was the Court's intention to inform the parties that given the differences in factual allegations, the matter was not well-suited for summary judgment. That discussion, however, could not occur because the Plaintiffs' counsel, without explanation, failed to appear. The other reason for the conference was to address the Debtor's Motion to Compel. Because that motion had never been opposed, the Court granted it.
On February 4, 2015 the Court heard argument on the two summary judgment motions. This time counsel for both parties appeared, however, the attorney appearing on behalf of the Plaintiffs (Mr. Santoro) informed the Court that he himself was not counsel of record. He stated that he was the law partner of the counsel of record (Mr. Bresset) who was out of the country at the time. When asked why no one had appeared for the Plaintiffs at the January 7, 2015 hearing, Mr. Santoro stated that he knew nothing about any prior hearing, or, for that matter, any unanswered discovery requests. The Court explained to Mr. Santoro that although counsel's absence at the prior hearing had prevented it from explaining to Plaintiffs that the case seemed problematic for purposes of summary judgment, the factual lay of the land had by now changed: in specific, the Debtor had propounded requests for admissions of material facts as to which no timely response was made. Because a failure to respond to an admission request is deemed to constitute an admission, the record was now, in fact, amenable to summary judgment. After hearing the arguments from both sides, the Court entered judgment against the Plaintiffs and dismissed their complaint. On February 18, 2015, the Plaintiffs filed two notices of appeal. Five days after that, they filed an amended notice of appeal. What follows are finding of facts and conclusions of law to amplify the Court's ruling.
Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure2 (“Fed.R.Civ.P.”). Pursuant to Rule 56, summary judgment should be granted when 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). For purposes of Rule 56, a fact is material if it might affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The moving party has the burden of demonstrating that no genuine issue of fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552–53, 91 L.Ed.2d 265 (1986).
The court's role in deciding a motion for summary judgment is not to weigh evidence, but rather to determine whether the evidence presented points to a disagreement that must be decided at trial, or whether the undisputed facts are so one sided that one party must prevail as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 249–250, 106 S.Ct. at 2511–12. In making this determination, the court must consider all of the evidence presented, drawing all reasonable inferences therefrom in the light most favorable to the nonmoving party, and against the movant. See Halsey v. Pfeiffer, 750 F.3d 273, 287 (3d Cir.2014)
To successfully oppose entry of summary judgment, the nonmoving party may not simply rest on its pleadings, but must designate specific factual averments through the use of affidavits or other permissible evidentiary material that demonstrate a triable factual dispute. Celotex Corp. v. Catrett, 477 U.S. at 324, 106 S.Ct. at 2553. Such evidence must be sufficient to support a jury's factual determination in favor of the nonmoving party. Anderson, supra, 477 U.S. at 250, 106 S.Ct. at 2511. Evidence that merely raises some metaphysical doubt regarding the validity of a material fact is insufficient to satisfy the nonmoving party's burden. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355–56, 89 L.Ed.2d 538 (1986). If the nonmoving party fails to adduce sufficient evidence in connection with an essential element of the case for which it bears the burden of proof at trial, the moving party is entitled to entry of summary judgment in its favor as a matter of law. Celotex Corp. v. Catrett, 477 U.S. at 322–23, 106 S.Ct. at 2552–53.
The Debtor's argument is based on his request for an admission as to his mental state at the time of the injury suffered by Plaintiffs. His requests for admissions specifically asked Plaintiffs to admit, inter alia, that Debtor lacked the requisite intent to establish willful and malicious injury on his part. Neither that request, nor any other, was ever timely responded to. As a result, says Debtor, the request is deemed to be admitted. In turn, argues the Debtor, this establishes that the Plaintiffs cannot prove a non-dischargeability claim under § 523(a)(6).
Plaintiffs' rejoinder is likewise predicated on a rule of procedure. But instead of relying on a specific rule, they ask the Court to invoke common law rules of preclusion. They maintain that a prior state court judgment entered in their favor and against the Debtor bars him from contesting their dischargeability claim. Plaintiffs are relying not on the judgment itself, but on certain “findings” made by the state court in support of that judgment. Those findings, they assert, prove the cause of action for non-dischargeability of a debt caused by willful and malicious injury. In short, Plaintiffs ask this Court to estop the Debtor from disputing the allegation that he possessed the intent to harm.
Because the prior ruling was made by a state court and was based on state common law, the law of that forum is controlling here. Paramount Aviation Corp. v. Agusta, 178 F.3d 132, 145 (3d Cir.1999) (). Plaintiffs' motion seeks to invoke collateral estoppel. In Pennsylvania, the following elements must be present for collateral estoppel to apply:
Cromartie v. Pennsylvania Bd. of Prob. & Parole, 680 A.2d 1191, 1197 n. 12 (Pa.Cmwlth.1996). The trial court has broad discretion to determine if collateral estoppel should apply. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 329, 99 S.Ct. 645, 651, 58 L.Ed.2d 552 (1979)
Both the state law action and this adversary proceeding plead a cause of action for an intentional tort. The state law complaint pleads assault and battery, while this action alleges willful and malicious injury. The former is more specific than the latter; even so both involved the same state of mind, i.e., scienter. The issue which was before the state court is sufficiently similar to that which is before this court now.
Finding the second and third elements to also be established, what remains is the last element: whether the Debtor had a “full and fair opportunity to have litigated the question.” As the Pennsylvania Supreme Court has explained:
If the parties to an action have had an opportunity to appear and be heard in a prior proceeding involving the same subject matter, all issues...
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