Scranton Laminated Labels, Inc. v. Florimonte (In re Florimonte)

• Decision Date: 21 October 2016
• Docket Number: Adversary Number: 5-15-ap-00144 RNO,Case Number: 5-15-bk-02377 RNO
• Citation: 558 B.R. 703
• Parties: In re: Carolyn J. Florimonte, Debtor(s) Scranton Laminated Labels, Inc. Scranton Label Edmund J. Carr, Plaintiff(s) v. Carolyn J. Florimonte, Defendant(s)
• Court: U.S. Bankruptcy Court — Middle District of Pennsylvania

558 B.R. 703

In re: Carolyn J. Florimonte, Debtor(s)Scranton Laminated Labels, Inc. Scranton Label Edmund J. Carr, Plaintiff(s)

v.Carolyn J. Florimonte, Defendant(s)

Case Number: 5-15-bk-02377 RNO

Adversary Number: 5-15-ap-00144 RNO

United States Bankruptcy Court, M.D. Pennsylvania.

Signed October 21, 2016

Mark J. Conway, Law Offices of Mark J. Conway PC, Dunmore, PA, for Plaintiff(s).

Thomas J. Jones, Jr, Scranton, PA, for Defendant(s).

Nature of Proceeding: Motion to Dismiss Adversary Proceeding

OPINION¹

Robert N. Opel, II, Chief Bankruptcy Judge

One of the Chapter 7 Debtor's creditors filed a seven count Complaint averring non-dischargeability of its claim and objecting to Debtor/Defendant obtaining a Chapter 7 discharge. The Debtor has moved to dismiss the adversary Complaint. For the reasons stated below, the Defendant's Motion to Dismiss the Plaintiffs' Complaint is granted in part and denied in part.

I. Jurisdiction

This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(I) and (J).

II. Facts and Procedural History

Carolyn J. Florimonte (“Debtor”) filed a Voluntary Petition under Chapter 7 of the Bankruptcy Code on June 3, 2015. This Adversary Proceeding was commenced by a Complaint filed on September 8, 2015. The Complaint was filed by Scranton Laminated Labels, Inc., Scranton Label, and Edmund J. Carr (collectively “Scranton Laminated”).

The Complaint alleges that there was significant pre-petition litigation between the parties in state court. In the Complaint, Scranton Laminated alleges that it holds a state court judgment against the Debtor in the face amount of $52,917.71. Complaint Objecting to Debtor's Discharge Pursuant to 11 U.S.C. Sections. 523 and 727 ¶ 11, ECF No. 1 (“Complaint”).

In sum, the Complaint alleges that Scranton Laminated obtained a state court judgment against the Debtor which found that the Debtor had wrongfully used civil process to pursue unsustainable claims against Scranton Laminated.

On September 25, 2015, the Defendant's Motion to Dismiss the Plaintiffs' Complaint (“Motion to Dismiss”) was filed to Docket No. 6. The Motion to Dismiss seeks dismissal of the Complaint, with prejudice, alleging it failed to state a plausible claim for non-dischargeability or an objection to the Debtor's Chapter 7 discharge. The Motion to Dismiss has been briefed and is ripe for decision.

III. Discussion

A. Standard to Decide a Motion to Dismiss Under F.R.B.P. 7012(b)

Federal Rule of Bankruptcy Procedure 7012(b) makes Federal Rule of Civil Procedure 12(b) through (i) applicable to bankruptcy adversary proceedings. Rule 12(b)(6) provides for dismissal of a complaint which fails to state a claim upon which relief can be granted. Generally, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). In considering a motion to dismiss, the factual allegations of the complaint are construed in the light most favorable to the non-moving party, in this case, the Debtor. Kehr Packages, Inc. v. Fidelcor, Inc. , 926 F.2d 1406, 1410 (3d Cir. 1991) ; Network Commodities, LLC v. Golondrinas Trading Co., Ltd. , 2013 WL 1352234, at *1 (D.N.J., Apr. 1, 2013).

While it is true that detailed factual allegations are not required in a complaint, “a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 553-56, 127 S.Ct. 1955, 1964–65, 167 L.Ed.2d 929 (2007). Twombly held that, in order to withstand a motion to dismiss, the complaint must plead a plausible, rather than merely possible, claim.

The Supreme Court has described “facial plausibility”:

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.

Ashcroft v. Iqbal , 556 U.S. 662, 677–78, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal citations omitted).

Here, the alleged facts are viewed in the light most favorable to Scranton Laminated. However, legal conclusions are not assumed to be true when considering a motion to dismiss. Id. at 1950.

The United States Court of Appeal for the Third Circuit has provided guidance concerning the standard for a motion to dismiss:

The District Court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Second, a District Court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a plausible claim for relief. In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to “show” such an entitlement with its facts.

Fowler v. UPMC Shadyside , 578 F.3d 203, 210–11 (3d Cir. 2009) (internal citations omitted); Neshaminy Constructors, Inc. v. EFCO Corp. , 2013 WL 2419642, at *2 (D.N.J., June 3, 2013).

When deciding a motion to dismiss, I generally can consider the complaint, as well as attached exhibits and matters of public record. Pension Ben. Guar. Corp. v. White Consol. Indus., Inc. , 998 F.2d 1192, 1196 (3d Cir. 1993) ; Taylor v. Henderson , 2015 WL 452405, at *1 (D.Del., Jan. 30, 2015). Also, consideration can be given to an indisputably authentic document which the defendant attaches as an exhibit to a motion to dismiss, if the plaintiff's claims are based on the document. Pension Ben. Guar. Corp. , 998 F.2d at 1196 ; also see Miller v. Clinton County , 544 F.3d 542, 550 (3d Cir. 2008).

While addressing the record to be considered, it is noteworthy that Federal Rule of Evidence 201 allows a Federal Court to take judicial notice of facts that are not subject to reasonable dispute. A bankruptcy court may take judicial notice of the docket events in a case and the contents of the bankruptcy schedules to determine the timing and status of case events, as well as other facts not reasonably in dispute. In re Harmony Holdings, LLC , 393 B.R. 409, 413 (Bankr. D.S.C. 2008) ; In re Paolino , 1991 WL 284107, at *12 n.19 (Bankr. E.D.Pa., Jan. 11, 1991). I, therefore, take judicial notice of the docket entries in the Debtor's underlying Chapter 7 case and in this Adversary Proceeding. I also take judicial notice of the contents of the bankruptcy schedules and statements which are not subject to reasonable dispute.

I will next proceed to consider each of the Counts of the Complaint in light of the plausibility requirement.

B. Count I—Non-Dischargeability Under § 523(a)(6)

Count I of the Complaint is grounded upon 11 U.S.C. § 523(a)(6).² This subsection of the Bankruptcy Code excepts from discharge a debt, “for willful and malicious injury by the debtor to another entity or to the property of another entity.”

Non-dischargeability under § 523(a)(6) requires finding of both willful and malicious injury. A malicious injury involves the following: (1) a wrongful act; (2) done willfully; (3) which necessarily causes injury; and, (4) is done without just cause or excuse. In re Vepuri , 2009 WL 2921305, at *8 (Bankr. E.D.Pa., Mar. 25, 2009). The maliciousness requirement in § 523(a)(6) refers to injuries that are wrongful and without just cause or excuse, even in the absence of personal hatred, spite, or ill-will. In re Jacobs , 381 B.R. 128, 136 (Bankr. E.D.Pa. 2008) ; In re Harris , 2011 WL 2787722, at *3 (Bankr. M.D.Pa., July 14, 2011).

Actions are “willful” for purposes of § 523(a)(6) if they are done for the purpose of producing injury or have a substantial certainty of producing injury. In re Conte , 33 F.3d 303, 307–09 (3d Cir. 1994). Willful injury may be established indirectly by evidence of the debtor's knowledge of the creditor's rights and the debtor's knowledge that her conduct would cause particularized harm. In re Glenn , 470 B.R. 731, 736 (Bankr. M.D.Pa. 2012).

The gravamen of the Complaint is that the Debtor was previously employed by the corporate Plaintiff, Scranton Laminated Labels, Inc. She was discharged from such employment in April 2003. After her discharge, the Debtor sought unemployment compensation; she also filed a discrimination claim against her former employer with the Pennsylvania Human Relations Commission. Further, in March 2008, she filed a state court complaint in the Lackawanna County Court of Common Pleas against Scranton Laminated alleging gender discrimination, retaliatory discharge, and a hostile work environment (“First State Court Action”). On March 15, 2010, a non-jury verdict was entered in favor of Scranton Laminated and against the Debtor in the First State Court Action.

Shortly thereafter, on April 5, 2010, Scranton Laminated sued the Debtor in the Court of Common Pleas of Lackawanna County seeking compensatory and punitive damages for alleged wrongful use of civil proceedings (“Second State Court Action”). The Second State Court Action maintained that Debtor's unemployment compensation claim and appeals, the complaint filed with the Pennsylvania Human Relations Commission, and the First State Court Action were all filed in a grossly negligent manner entitling Scranton Laminated to damages and attorney's fees.

A review of the Complaint shows that the numbered paragraphs contain little detail concerning the former employer/employee relationship between Scranton Laminated and the Debtor. Similarly, the numbered paragraphs of the Complaint contain few factual allegations concerning either the First State Court Action or the Second State Court Action. However, two exhibits...