Robertson v. Murray (In re Murray)

• Decision Date: 31 March 2022
• Docket Number: 20-01587-KMS,ADV. PROC. 20-00032-KMS
• Parties: IN RE: AMY N. MURRAY DEBTOR v. AMY N. MURRAY DEFENDANT DANA ROBERTSON PLAINTIFF
• Court: U.S. Bankruptcy Court — Southern District of Mississippi

IN RE: AMY N. MURRAY DEBTOR

DANA ROBERTSON PLAINTIFF v. AMY N. MURRAY DEFENDANT

No. 20-01587-KMS

ADV. PROC. No. 20-00032-KMS

United States Bankruptcy Court, S.D. Mississippi

March 31, 2022

CHAPTER 7

OPINION AND ORDER DENYING ROBERTSON'S MOTION FOR SUMMARY JUDGMENT (DKT. #71)^[1] AND GRANTING MURRAY'S MOTION FOR PARTIAL SUMMARY JUDGMENT (DKT. #72)

Katharine M. Samson, United States Bankruptcy Judge

THIS MATTER is before the Court on the Motion for Summary Judgment (Adv. ECF No. 71)^[2] by Plaintiff Dana Robertson Plaintiff's Memorandum in Support of Motion for Summary Judgment (Adv. ECF No. 76); Response in Opposition to Plaintiff's Motion for Summary Judgment (Adv. ECF No. 82) by Defendant Amy N. Murray; Defendant's Motion for Partial Summary Judgment (Adv. ECF No. 72); Defendant's Brief in Support of the Motion for Partial Summary Judgment (Adv. ECF No. 73); Plaintiff's Response to Defendant's Motion for Partial Summary Judgment Adv. (ECF No. 80); Plaintiff's Memorandum in Opposition to Debtor's Motion for Partial Summary Judgment (Adv. ECF No. 81); and Defendant's Reply in Support of Motion for Partial Summary Judgment (Adv. ECF No. 83). The question is whether issue preclusion applies to a state court default judgment to preclude dischargeability litigation in this Court. Issue preclusion does not apply and Plaintiff-Robertson's Motion for Summary Judgment should be denied and the Defendant-Murray's Motion for Partial Summary Judgment should be granted.

I. Jurisdiction

The Court has jurisdiction over the parties to and the subject matter of this proceeding under 28 U.S.C. § 1334.^[3] This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(I) and (J).

II. Procedural Background

1. On May 26, 2020, Murray filed a petition for relief under Chapter 7 of the Bankruptcy Code. See Pet., ECF No. 1.

2. On September 15, 2020, Robertson filed a Complaint for Determination of Dischargeability and Objection to Debtor's Discharge ("Complaint") against Murray.^[4] See Compl., Adv. ECF No. 1.

3. The Complaint states that Robertson is a judgment creditor in the amount of $500, 000 as a result of a default judgment entered on November 13, 2018, in the Circuit Court of Oktibbeha County, Mississippi, and enrolled in the Circuit Clerk's Judgment Roll ("Default Judgment"). See id. at 2. 4. Robertson alleges that Murray willfully and maliciously injured her or her property or both by making false and defamatory statements that resulted in the judgment debt. See id. at 2-3. Relying on the Default Judgment, she requests a nondischargeable judgment under § 523 (a)(6) in the amount of $500, 000 plus interest, attorney's fees and expenses. Id. at 3.

5. In her motion, Robertson states that the "sole issue in dispute is whether [Murray's] actions rise to the willful and/or malicious standard referenced in § 523(a)(6)." Adv. ECF. No. 71 at 1. She contends that Murray is "procedurally barred from relitigating the award of damages since she ignored the state court proceedings." Id. Robertson's view is that if the Court determines that Murray's actions do not satisfy the willful and malicious standard, then the debt will be dischargeable and the damages issue moot; but if the willful and malicious standard is met, then the debt will be nondischargeable. Id. at 2.

6. Murray asserts in her Motion for Partial Summary Judgment that the doctrine of collateral estoppel is inapplicable and does not preclude the parties from "trying in this bankruptcy court issues necessary to determine the dischargeability of the underlying judgment debt in question." Adv. ECF No. 72 at 1.

III. Summary Judgment Standard

Summary judgment is appropriate "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.P. 56(a) (made applicable by Fed.R.Bankr.P. 7056). "A fact is 'material' if its resolution in favor of one party might affect the outcome of the lawsuit under governing law. An issue is 'genuine' if the evidence is sufficient for a reasonable [fact-finder] to return a verdict for the non-moving party." Ginsberg 1985 Real Estate P'ship v. Cadle Co., 39 F.3d 528, 531 (5th Cir. 1994) (citations omitted). A party asserting that a fact either is genuinely disputed or cannot be genuinely disputed must support the assertion by citations "to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c)(1)(A).

The moving party bears the initial responsibility of informing the court of the basis for its motion and the parts of the record that indicate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "Once the moving party presents the . . . court with a properly supported summary judgment motion, the burden shifts to the nonmoving party to show that summary judgment is inappropriate." Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). "The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). But the nonmovant must meet its burden with more than "metaphysical doubt," "conclusory allegations," "unsubstantiated assertions," or a mere "scintilla" of evidence. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).

On cross-motions for summary judgment, each movant must establish the absence of a genuine issue of material fact and the movant's entitlement to judgment as a matter of law. Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 538-39 (5th Cir. 2004). "If there is no genuine issue and one of the parties is entitled to prevail as a matter of law, the court may render summary judgment." Id. at 539.

IV. Undisputed Facts

The following recitation of facts with authorities are listed in Murray's brief in support her motion and are undisputed except where noted. See Def.'s Br., Adv. ECF No. 73 at 2-4; Pl.'s Br., Adv. ECF No. 81 at 2-4. Because the issues presented by both motions are essentially the same, these undisputed facts will be considered for both motions.

1. On July 30, 2018, [Robertson] filed a Complaint for damages ("the Civil Complaint") against [Murray] in the Circuit Court of Oktibbeha County, Mississippi. (See Pl .'s Civil Compl.)

2. The Civil Complaint stems from alleged defamatory statements made by [Murray] on Twitter on July 21, 2018. (Id. ¶ 8.)

3. The alleged defamatory statements . . . include "accusations that [Robertson] is a 'grave robber,' devil worshiper and promiscuous whore." (Id. ¶ 9).

4. The Civil Complaint recites that the alleged defamatory statements "were made with malice and in bad faith with knowledge of their falsity or reckless disregard for the truth." (Id. ¶¶ 11, 17).

5. The Civil Complaint asserts that "[Robertson's] friends and family, including three of her four children, have all seen the alleged defamatory statements." (Id. ¶ 10).

6. [The] Civil Complaint alleges two causes of action: Libel and Intentional Infliction of Emotional Distress. (Id., Counts I, II).

7. The . . . libel count asserts that the alleged defamatory statements made by [Murray] "amounts to, at least, negligence on the part of [Murray]." (Id. ¶ 15).^[5]

8. In her Civil Complaint, [Robertson] requests both compensatory damages and punitive damages "in an amount to be determined by jury." (Id. at 4).

9. [Robertson] filed an application for entry of default and supporting affidavit pursuant to Rule 55 of the Mississippi Rules of Civil Procedure on October 9, 2018, after [Murray] failed to plead or otherwise defend against the allegations in [the Civil] Complaint . . . . (Order Granting Default J. ¶¶ 3, 4).

10. On November 28, 2018, the Circuit Court of Oktibbeha County, Mississippi, issued an Order Granting Default Judgment, finding [Murray] "wholly in default" after "having failed to plead or otherwise defend" the allegations contained in [Robertson's Civil] Complaint. (Id. ¶ 3).

11. The Order Granting Default Judgment awarded Plaintiff $500, 000 in damages. (Id. at 5).

12. The Order Granting Default Judgment gives no indication on which of the two counts of the [Civil] Complaint the judgment was rendered. (See generally Order Granting Default J.).

13. The Order Granting Default Judgment gives no indication whether the damages awarded were compensatory or punitive, and it does not state how the Court determined the appropriateness of that amount with respect to either [Robertson's] alleged injury or [Murray's] intent in making the alleged defamatory statements. (See generally id.).^[6]

14. The only record evidence [Robertson] produced to support her Adversary Complaint was her state court Civil Complaint and the state court's Order Granting Default Judgment.

Def.'s Br., Adv. ECF No. 73 at 2-4; Pl.'s Br., Adv. ECF No. 81 at 2-4 (some recitations omitted).

15. The only documents identified by either party in support of their motions are the Complaint, the Default Judgment and the Civil Complaint. Adv. ECF. No. 74.

V. Analysis

A. Issue Preclusion

"Issue preclusion, or collateral estoppel . . . promotes the interests of judicial economy by treating specific issues of fact or law that are validly and necessarily determined between two parties as final and conclusive." United States v. Shanbaum, 10 F.3d 305, 311 (5th Cir. 1994). "The party invoking collateral estoppel bears the burden of proving the defense." Cannady v. Woodall No. 1:20cv130-HSO-RPM, 2021 WL 215490, at *3 (S.D.Miss. Jan. 21, 2021) (citing McCarty v. Wood, 249 So.3d...