MacPherson v. Marano (In re Marano)

• Decision Date: 14 June 2017
• Docket Number: Case No. 16–12011–MSH,Adversary Proceeding No. 16–01145
• Citation: 568 B.R. 723
• Parties: IN RE: Peter T. MARANO, Debtor Edward MacPherson, Plaintiff v. Peter T. Marano, Defendant
• Court: U.S. Bankruptcy Court — District of Massachusetts

568 B.R. 723

IN RE: Peter T. MARANO, Debtor

Edward MacPherson, Plaintiff

v.Peter T. Marano, Defendant

Case No. 16–12011–MSH

Adversary Proceeding No. 16–01145

United States Bankruptcy Court, D. Massachusetts, Eastern Division .

Signed June 14, 2017

Michael J. Heineman, Esq., Mingace & Heineman, P.C., Framingham MA, for Edward MacPherson, plaintiff

George C. Maroun, Esq., Methuen, MA, for Peter T. Marano, defendant

MEMORANDUM OF DECISION ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND DEFENDANT'S MOTION TO DISMISS

Melvin S. Hoffman, U.S. Bankruptcy Judge

Edward MacPherson filed a bare bones complaint in which he claims a judgment he obtained in state court against Peter T. Marano, the debtor in the main bankruptcy case, should be determined non-dischargeable pursuant to Bankruptcy Code § 523(a).¹ Before me is his motion for summary judgment. Mr. MacPherson asserts in his complaint that Mr. Marano's debt to him is non-dischargeable under subsections (a)(2)(A) and (a)(6) of Bankruptcy Code § 523. At oral argument on his motion for summary judgment, however, counsel to Mr. MacPherson made it crystal clear that his invoking of subsection (a)(6) in his complaint was in error and he meant to rely on subsection (a)(4). In response to my question at the hearing as to whether Mr. MacPherson asserted his claim under subsection (a)(4) or (a)(6), Mr. MacPherson's counsel stated without hesitation: "(a)(4). We never alleged (a)(6)" and (a)(6) is "not part of our claim, we do not claim this is a willful intentional injury."² I will, therefore, consider the complaint's reference to (a)(6) to have been in error and accept it and Mr. MacPherson's motion for summary judgment as pursuing a claim under Bankruptcy Code § 523(a)(4) along with § 523(a)(2)(A). Mr. Marano opposes the entry of judgment in Mr. MacPherson's favor and requests dismissal of his complaint, which I will treat as a motion for judgment on the pleadings.³

The standards for determining a motion for summary judgment, a motion to dismiss or a motion for judgment on the pleadings are straightforward.

A court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. Pro. 56, made applicable by Fed. R. Bankr. P. 7056. A genuine issue is "one that is supported by such evidence that ‘a reasonable jury, drawing favorable inferences,’ could resolve [the issue] in favor of the nonmoving party." See In re McCarthy , 473 B.R. 485, 491 (Bankr. D. Mass. 2012) (quoting Triangle Trading Co. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st Cir.1999) ). A material fact is one that might affect the outcome of the case under the governing law. See McCarthy , 473 B.R. at 491.

The moving party in a summary judgment motion bears the initial burden of demonstrating that no genuine issue of material fact exists by pointing to materials of evidentiary quality such as affidavits or depositions that are so one-sided as to warrant judgment as a matter of law. See Anderson v. Liberty Lobby , 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; In re Varrasso , 37 F.3d 760, 763 (1st Cir.1994). "Only if the record, viewed in that manner and without regard to credibility determinations, reveals no genuine issue as to any material fact may the court enter summary judgment." Cadle Co. v. Hayes , 116 F.3d 957, 959 (1st Cir. 1997).

A motion for judgment on the pleadings under Fed. R. Civ. P. 12(c) (made applicable to bankruptcy case by Fed. R. Bankr. P. 7012 ) is scrutinized under essentially the same standard as a motion to dismiss, namely that the pleadings taken in the light most favorable to the non-movant must establish a plausible claim. Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 560, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)"A Rule 12(c) motion, unlike a Rule 12(b)(6) motion, implicates the pleadings as a whole." Aponte–Torres v. Univ. of Puerto Rico , 445 F.3d 50, 54–55 (1st Cir. 2006). When reviewing a motion under Rule 12(c), the court may consider "documents the authenticity of which are not disputed by the parties; ... documents central to plaintiffs' claim; [and] documents sufficiently referred to in the complaint." Romanoff v. CitiMortgage, Inc. , 189 F.Supp.3d 285, 288 (D. Mass. 2016) (internal citations and footnotes omitted).

There are no issues of material fact in dispute in this adversary proceeding. The only dispute is over the law. Here are the facts as they are primarily drawn from the Findings and Rulings on Chapter 93A, Section 9 Claim (Count Two) and Order for Judgment ("State Court Findings") entered on October 16, 2014, in the state court action brought by Mr. MacPherson against Mr. Marano. MacPherson v. Marano , Superior Court Department of the Trial Court of Massachusetts for Norfolk County, Case No. 10–01986.

Mr. MacPherson, a Boston police officer, sustained injuries arising from a June 26, 2006 altercation with Robert Grover, a Massachusetts state trooper. Mr. MacPherson engaged Mr. Marano, a fledgling attorney, to represent him in a lawsuit against Trooper Grover and others. During their first meeting:

[A]ttorney Marano said or implied that he [MacPherson] had a great case, that he (Marano) knew what he was doing and that he was going to get a big verdict.

State Court Findings at pp. 9–10.

On February 19, 2008, Mr. Marano filed on behalf of Mr. MacPherson a complaint against Trooper Grover and others in the United States District Court for the District of Massachusetts for assault and battery and violations of federal and state civil rights laws. The federal court suit went nowhere and was ultimately dismissed. The State Court Findings tell the story:

[The defense counsel] served attorney Marano with interrogatories and a request for production of documents under rule 34, Federal Rules of Civil Procedure, in January 2009. Responses were due on February 18, 2009. Although Mr. Marano eventually provided answers to interrogatories (although not in the form required by the rules with question followed by an answer), he never served [defense counsel] with a formal response to her 25 paragraph document request under rule 34. Claiming that she did not receive a response or the documents, she filed a motion to compel on May 22, 2009... Attorney Marano did not oppose the motion to compel. Judge Young, not surprisingly, allowed the motion and eventually ordered discovery to be produced by July 1, 2009. Mr. Marano did not comply with Judge Young's order. Thereafter, on July 22, 2009, [the defense counsel] filed a motion for sanctions under rule 37, Federal Rules of Civil Procedure, asking for dismissal. Again, Mr. Marano never filed an opposition. Judge Young allowed the unopposed motion and dismissed the entire case on August 25, 2009...

State Court Findings p. 5.

Mr. Marano informed Mr. MacPherson of the dismissal, explaining only that "it sometimes happened in the federal court."

State Court Findings at p. 5. In response to Mr. MacPherson's inquiry as to what could be done, Mr. Marano represented he would seek reconsideration of the dismissal. By an October 14, 2009 motion in which Mr. Marano blamed defense counsel for his lack of responsiveness to discovery, Mr. Marano sought reconsideration of the dismissal order. Judge Young denied reconsideration. No appeal was taken.

On February 1, 2010, Mr. MacPherson commenced his state court action against Mr. Marano claiming legal malpractice and violations of Mass. Gen. Laws c. 93A, § 9. After a four-day jury trial on the malpractice claim, the jury returned a verdict in favor of Mr. MacPherson and awarded him $750,000 in damages. The state court judge thereupon issued the State Court Findings in which he ruled on the chapter 93A count. He discredited all of Mr. Marano's testimony and found Mr. Marano's conduct in undertaking and handling Mr. MacPherson's case was a violation of chapter 93A. The judge found that at their very first meeting when Mr. Marano told Mr. MacPherson he had a great case and was going to get him a big verdict that: "In fact, Marano was blowing smoke. He did not know what he was doing. He had been practicing law for about 15 months. He did not know the rudiments of the Federal Rules of Civil Procedure and the local rules of the United States District Court." State Court Findings at p. 10. Finding that Mr. Marano was "hopelessly incompetent" to handle Mr. MacPherson's case and that his malpractice was "indefensible," the Court stated:

I find his malpractice was willful and knowing in that he knew that his legal knowledge about the rules governing civil litigation was woefully inadequate to handle plaintiff's case.

State Court Findings at p. 11.

The state court judge awarded Mr. MacPherson $150,000 plus interest as compensatory damages and $300,000 as punitive damages in addition to the jury's recommended $750,000 malpractice award. The state court judgment is final.

On May 26, 2016, Mr. Marano filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code in this court. There are no assets available in the bankruptcy case for distribution to creditors. Mr. MacPherson instituted this adversary proceeding seeking to except from Mr. Marano's discharge the $450,000 chapter 93A portion of his state court judgment. His motion for summary judgment followed.

As a general proposition, "the exceptions to discharge of a debt set forth in § 523(a) must be ‘narrowly construed ... and the claimant must show that its claim comes squarely within an exception enumerated in Bankruptcy Code § 523(a).’ McCrory v. Spigel (In re Spigel), 260 F.3d 27, 32 (1st Cir. 2001) (citing Century 21 Balfour Real Estate v. Menna (In re Menna), 16 F.3d 7, 9 (1st Cir. 1994) )." Oasis, Inc. v. Fiorillo (In re Fiorillo) , 520 B.R. 355, 359 (Bankr. D. Mass. 2014), aff'd , No. CV 15-11820-RWZ, ––– F.Supp.3d ––––, 2017 WL 1197738 (D. Mass. Mar. 30, 2017). A creditor requesting that a debt be excluded from discharge must prove, by a...