Norton v. Town of S. Windsor (In re Norton), CASE NO. 16-20790 (JJT)

• Decision Date: 30 September 2020
• Docket Number: ADV. PRO. NO. 19-02011 (JJT),CASE NO. 16-20790 (JJT)
• Citation: 622 B.R. 538
• Parties: IN RE: Kristin S. NORTON, Debtor. Kristin S. Norton, Plaintiff v. Town of South Windsor, Matthew Galligan, Morris Borea, and Robbie T. Gerrick, Defendants.
• Court: 2nd Circuit

622 B.R. 538

IN RE: Kristin S. NORTON, Debtor.

Kristin S. Norton, Plaintiff

v.Town of South Windsor, Matthew Galligan, Morris Borea, and Robbie T. Gerrick, Defendants.

CASE NO. 16-20790 (JJT)

ADV. PRO. NO. 19-02011 (JJT)

United States Bankruptcy Court, D. Connecticut, Hartford Division.

Signed September 30, 2020

Edward C. Taiman, Jr., Sabia Law Firm, LLC, Hartford, CT, for Plaintiff

Richard D. Carella, Updike, Kelly & Spellacy, PC, Middletown, CT, Adam B. Marks, Updike Kelley & Spellacy.PC, Hartford, CT, for Defendants Town of South Windsor, Matthew Galligan, Pam Oliva.

Morris R. Borea, Halloran & Sage, LLP, Hartford, CT, for Defendants Matthew Galligan, Morris Borea, Pam Oliva, Robbie T. Gerrick.

MEMORANDUM OF DECISION ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

James J. Tancredi, United States Bankruptcy Judge District of Connecticut

I. INTRODUCTION

The Debtor, Kristin S. Norton ("Debtor"), initiated this Adversary Proceeding in her underlying Chapter 7 case pursuant to 11 U.S.C. § 105 and 11 U.S.C. § 524, seeking relief for alleged violations of the discharge injunction by the Town of South Windsor (the "Town"), its Town Manager, Matthew Galligan, and the attorneys representing the Town, Morris Borea and Robbie T. Gerrick (collectively, the "Defendants"), with respect to certain debts allegedly discharged in bankruptcy. In the one-count Operative Complaint (see Third Amended Complaint, ECF No. 69, the "Operative Complaint"), the Debtor alleges that the Town, through the collective actions of Galligan, Borea, and Gerrick, wilfully violated 11 U.S.C. § 524 in an effort to collect a discharged debt through, inter alia , the filing of various lawsuits against the Debtor in both state and federal court. The Debtor now seeks summary judgment on the Operative Complaint as to liability only as to all Defendants (ECF No. 69).

In response to the Motion for Summary Judgment, the Town argues that because the subject debts were not discharged in the Debtor's underlying bankruptcy case, there can be no violation of the discharge injunction. Defs. Response, ECF No. 89, pp. 10–11. The Town also argues that its liens that attached on the Debtor's Property were municipal liens that were necessary to enforce the Town's blight ordinances under its police powers, which were excepted from a bankruptcy discharge. Id., at 12.

On June 23, 2020, the Court heard oral argument on the Motion for Summary Judgment, wherein the parties were able to advance their respective positions. See ECF No. 113. At the conclusion of the hearing, the Court took the matter under advisement. After due consideration, and for the reasons stated herein, the Court hereby GRANTS the Debtor's Motion for Summary Judgment in part, and DENIES it in part as set forth herein.

II. JURISDICTION

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b) and derives its authority to hear and determine this matter on reference from the District Court pursuant to 28 U.S.C. §§ 157(a) and (b)(1). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A). Venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409.

III. SUMMARY JUDGMENT STANDARD

Federal Rule of Civil Procedure 56, which is made applicable to these proceedings by Federal Rule of Bankruptcy Procedure 7056, provides that "[t]he 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. Bankr. P. 7056 ; Fed. R. Civ. P. 56(a). 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 v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). At the summary judgment stage, the moving party must show that there are no material issues of fact, and the court must consider all facts in the light most favorable to the non-moving party. Conn. Ironworkers Emp'rs Ass'n v. New England Reg'l Council of Carpenters , 869 F.3d 92, 98–99 (2d Cir. 2017), cert. denied , ––– U.S. ––––, 138 S. Ct. 1547, 200 L.Ed.2d 740 (2018) (citing Eastman Kodak Co. v. Image Tech. Servs., Inc. , 504 U.S. 451, 456, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992) ). Once the moving party has met its burden, the "party opposing summary judgment ... must set forth ‘specific facts’ demonstrating that there is ‘a genuine issue for trial.’ " Official Comm. of Unsecured Creditors of Affinity Health Care Mgmt., Inc. v. Wellner , 499 B.R. 246, 251 (Bankr. D. Conn. 2013) (quoting Wright v. Goord , 554 F.3d 255, 266 (2d Cir. 2009) ).

The Plaintiff hereby seeks summary judgment on the Operative Complaint as to liability only as to all Defendants. In reviewing their supportive papers, it appears that the parties' disagreements largely center around whether the Town violated the Debtor's Chapter 7 discharge injunction by pursing various lawsuits against the Debtor, principally, because they disagree about whether the alleged violations lie within the scope of 11 U.S.C. § 523(a)(7), which is ultimately a question of law, not fact.

Additionally, the Court notes that, for the purpose of the Motion, the parties do not dispute whether an agency relationship existed between the Town and Town Manager Galligan or between the Town and Attorneys Borea and Gerrick, see Defendants' Local Rule 56(a)2 Statement of Facts in Opposition to Summary Judgment (wherein the Defendants make numerous references throughout said pleading indicating that the Town acted "by and through" Defendants Borea and Gerrick); nor has it been alleged that Galligan, Borea and Gerrick (the "Non-Principal Defendants") acted outside the scope of their employment. See Vazquez v. Sears , Roebuck & Co. (In re Vazquez ), 221 B.R. 222, 231 (Bankr. N.D. Ill. 1998) (a creditor and its agents may both be held liable for wilful violations of the discharge injunction under general principles of agency law); In re Salov , 510 B.R. 720, 733 (Bankr. S.D.N.Y. 2014) ; see also Maharishi School Vedic Sciences, Inc. v. Connecticut Constitution Associates Ltd. P'ship , 260 Conn. 598, 606, 799 A.2d 1027 (2002) ("[I]t is a general rule of agency law that the principal in an agency relationship is bound by, and liable for, the acts in which his agent engages with authority from the principal and within the scope of the agent's employment.").

While the Plaintiff's Motion does attribute certain acts to certain Non-Principal Defendants, the Motion does not seek to apportion liability with any degree of specificity. Instead, the Motion specifically "seeks judgment as to liability [against all Defendants], with a later opportunity to present to the Court a detailed breakdown of ... each and every violation that occurred." See Motion, p. 9. Notwithstanding that the actions of the Town through its agents support a finding of liability as to the Town, the facts as pled, as well as the arguments advanced, fail to distinctly address whether the Defendants are jointly and severally liable on the basis of their collective action, whether liability should be apportioned according to their particular acts or omissions, and whether such acts or omissions had any causal nexus to the Debtor's injuries. Thus, for the purpose of this Motion only, the Court finds fault with the Town, saving for further proceedings what liability lies ahead for the three Non-Principal Defendants, see Federal Rule of Civil Procedure 56(e)(2).¹

IV. BACKGROUND

This matter involves a multi-year dispute between the Plaintiff and the Town regarding the Town's enforcement of its anti-blight ordinances against the Plaintiff. Due to the lengthy litigation that has taken place regarding the occurrences alleged in the Operative Complaint, which has subsequently given rise to judicial determinations in both state and federal court, this Court will refrain from restating all but those facts that are material to the issues now under consideration.² Accordingly, the Court finds the following uncontested material facts:³

1. The Debtor is the owner of record of 460 Miller Road, South Windsor, Connecticut (the "Property"). Pl. SMF ¶ 1.

2. In May of 2012, the Property was subject to a non-related foreclosure action filed by Deutsche Bank, which, according to the Parties, subsequently resulted in a judgment of strict foreclosure against the Debtor. Defs.' Opp'n SMF ¶ 7.

3. In 2014, during the pendency of the 2012 foreclosure action, the Debtor was deemed by the Town to be in violation of the Town's ordinances for blighted conditions at the Property, where she allegedly maintained a junk yard/scrap business. See Norton, Kristin et al, v. Matthew Galligan, et al , 3:17-CV-00395-VAB (D. Conn. 2017) (the "District Court Action")⁴ , Memorandum of Decision (the "District Court Decision"), ECF No. 158, pp. 3–4.

4. As a result, a blight lien was recorded against the Property on September 9, 2014 in an amount of $2,000 together with daily fines of $100 until the blight was remediated (the "2014 Lien"). Defs.' Opp'n SMF ¶ 4.

5. In February of 2016, Defendant Borea was appointed Town Attorney for the Town of South Windsor and served in that capacity until January of 2020. Defs.' Opp'n SMF ¶ 1. Defendants Borea and Gerrick, however, first became involved in matters relating to Plaintiff on behalf of the Town of South Windsor in October of 2016; prior to that time, presumptively, all matters concerning the Property were being handled by the prior Town Attorney. Defs.' Opp'n SMF ¶ 2.

6. On April 20, 2016, the Town began removing, without notice to the Debtor, the items from the Debtor's Property that it claimed constituted the blight. SeeTown of South Windsor et al v. Lanata, Kristin, aka Kristin, S. Norton et al , HHD-CV-17-6083374-S, Memorandum of Decision, Docket No. 138.00, p. 9 (describing the actions taken by the Town as a "raid").

7. The Town hired Environmental

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