Smith v. Burgos (In re Burgos)
| Decision Date | 09 November 2015 |
| Docket Number | BANKRUPTCY CASE NO. 14-12874-WHD,ADVERSARY PROCEEDING No. 15-1020-WHD |
| Court | U.S. Bankruptcy Court — Northern District of Georgia |
| Parties | IN THE MATTER OF: ANTONIO BURGOS, ALMA RODRIGUEZ BURGOS, Debtors. DEBRA R. SMITH, Plaintiff, v. ANTONIO BURGOS, ALMA RAMIREZ BURGOS, Defendants. |
CASE NUMBERS
IN PROCEEDINGS UNDER CHAPTER 7 OF THE BANKRUPTCY CODE
Before the Court is the Motion for Default Judgment filed by Debra R. Smith (hereinafter, the "Plaintiff") in the above-captioned adversary proceeding. The Plaintiff seeks judgment by default against Antonio Burgos and Alma Ramirez Burgos (hereinafter, the "Debtors"). This matter arises in connection with a complaint objecting to the Debtors' receipt of a discharge pursuant to § 727 and seeking a determination of the dischargeability of a particular debt pursuant to § 523(a)(2) and § 523(a)(6). This matter constitutes a core proceeding over which this Court has subject matter jurisdiction. See 28 U.S.C. § 157(b)(2)(I) & (J), § 1334.
At the outset, the Court notes that neither the Plaintiff nor the Debtors are represented by counsel in this adversary proceeding. While the Court will afford some leniency in construing pro se pleadings, parties acting pro se are "nevertheless required...to conform to procedural rules." Loren v. Sasser, 309 F.3d 1296, 1304 (11th Cir. 2002); accord Gordon v. Love (In re Pullen), 2013 WL 6000568, at *2 (Bankr. N.D. Ga. Nov. 10, 2013) (Diehl, J.). Furthermore, "this leniency does not give a court license to serve as de facto counsel for a party, or to rewrite an otherwise deficient pleading in order to sustain an action." McWeay v. Citibank, N.A., 521 F. App'x 784, 788 n.3 (11th Cir. 2013). With these guiding principles in mind, the Court turns to the issues presented by the Plaintiff's motion.
The Plaintiff filed her complaint on March 27, 2015. The Debtors filed no responsive pleading. On October 9, 2015, the Plaintiff filed the instant motion for default judgment.
In order to grant default judgment, the Court must first determine that the Plaintiff's allegations of fact serve as a sufficient basis for entry of a judgment. Nishimatsu Construction Co., Ltd. v. Houston National Bank, 515 F.2d 1200, 1206 (5th Cir. 1975); see also Bonner v. Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (). In evaluating those allegations, the Court notes that "a defaulted defendant is deemed to have admitted the movant's well-pleaded allegations of fact, [but] she is not charged with having admitted 'facts that are not well-pleaded...or conclusions of law.'" Perez v. Wells Fargo, N.A., 774 F.3d 1329, 1339 (11th Cir. 2014) () (quoting Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005)).
In the Plaintiff's complaint, she alleges that she holds a judgment against the Debtors obtained in the Magistrate Court of Troup County, Georgia. The Plaintiff, who had been renting a house to the Debtors, brought the suit to recover back rent and the costsof repairing damage done to the rental property. Though the lease agreement between the Plaintiff and the Debtors contained "very specific guidelines for upkeep and care for the property," the Plaintiff discovered an immense amount of "abuse and destruction" when she repossessed the house after the Debtors were evicted for failure to pay rent. Compl., Doc. No. 1. The damage included burnt and cracked countertops, scribbles in crayon on the walls, and badly stained carpets. According to the complaint, the magistrate court found the damage to be "extreme, abusive and not due to normal wear and tear for a 14 month period." Id. The court entered judgment for the Plaintiff in the amount of $6,123.62 plus court costs of $125.1
When they filed their bankruptcy petition, the Debtors listed all $6,123.62 of the Plaintiff's claim on Schedule F under the label "Back Rent." The Plaintiff alleges that only $595 of that amount is actually for back rent, and the remaining $5,528.62 is for the damage done to the house. The Plaintiff initiated this adversary proceeding to object to the Debtors receiving a discharge pursuant to § 727 and to contest the dischargeability of $5,528.62 of the debt owed to her pursuant to either § 523(a)(6) or § 523(a)(2).
Mindful that statutes allowing for the denial of a discharge under § 727 andexceptions to discharge under § 523 are to be strictly construed, and that the burden is on the plaintiff to prove the applicability of such statutes by a preponderance of the evidence, see Gen. Ret. Sys. of the City of Detroit v. Dixon (In re Dixon), 525 B.R. 827, 840 (Bankr. N.D. Ga. 2015) (Hagenau, J.); Moyer v. Geer (In re Geer), 522 B.R. 365, 386 (Bankr. N.D. Ga. 2014) (Hagenau, J.), the Court will address each of the Plaintiff's claims in turn.
According to the "Adversary Proceeding Cover Sheet" filed with her complaint, the Plaintiff's lead cause of action against the Debtors is an objection to discharge pursuant to § 727. However, whether the Plaintiff actually intended to object to the Debtors' discharge is unclear, as there is little indication in her complaint other than the mark on the cover sheet that she is in fact seeking that relief.
Section 727 enumerates twelve distinct situations in which a debtor will not receive a discharge of any of his debts at the end of his Chapter 7 case, but the Plaintiff does not cite to any of them as the grounds for her objection. See 11 U.S.C. § 727(a)(1)-(12). Instead, the Plaintiff simply claims that the Debtors "fraudulently mis-stated [sic]" that the entire debt owed to her was for back rent, rather than primarily for the damage to the property, in their Schedule F. This suggests that she could be relying on § 727(a)(4), which denies the grant of a discharge if "the debtor knowingly or fraudulently, in or in connection with the case - (A) made a false oath or account...." 11 U.S.C. § 727(a)(4)(A). To support aclaim under that section, however, "the plaintiff must show that there was a false oath, that it was material, and that it was made knowingly and fraudulently." In re Geer, 522 B.R. at 387. While the Plaintiff may have shown that there was some false oath here, she has not pleaded sufficient facts to support a conclusion that the misstatement was material or made knowingly and fraudulently. Consequently, the Court cannot grant default judgment based on § 727.
The Plaintiff's second cause of action concerns the dischargeability of the majority of the debt owed to her. Section 523(a)(6) excepts from discharge debts incurred "for willful and malicious injury by the debtor to another entity or to the property of another entity." 11 U.S.C. § 523(a)(6). "The section's word 'willful' modifies the word 'injury,' indicating that nondischargeability takes a deliberate or intentional injury, not merely...a deliberate or intentional act that leads to injury." Kawaauhau v. Geiger, 523 U.S. 57, 57 (1998). Put another way, the debtor must have "desired the injury caused by his conduct." Atlanta Contract Glazing, Inc. v. Swofford (In re Swofford), 2008 WL 782040, at *2 (Bankr. N.D. Ga. Dec. 29, 2008) (Brizendine, J.). Conduct that is reckless, "or even a breach of contract informed by malice, is simply not enough to obtain relief under Section 523(a)(6)." Id. Nevertheless, the Court may infer that the debtor had intent to injure where the debtor "had a subjective motive to inflict injury or believed his conduct wassubstantially certain to cause injury." Hot Shot Kids, Inc. v. Pervis (In re Pervis), 512 B.R. 348, 376 (Bankr. N.D. Ga. 2014) (Hagenau, J.). "An injury is malicious under Section 523(a)(6) when same is determined to be 'wrongful and without just cause or excessive,' or simply resulting from a bad act having no redeeming social value or purpose whatsoever." AgGeorgia Farm Credit, ACA v. Crumley (In re Crumley), 2011 WL 7068913, at *3 (Bankr. N.D. Ga. Aug. 10, 2011) (Brizendine, J.).
These definitions create narrow boundaries, and the fine distinctions involved in the application of § 523(a)(6) are particularly apparent in cases involving rental property. In Ward v. West (In re West), for example, a landlord claimed $2,880.73 from the debtor-tenant for damages to the rental property, including a broken toilet, a ruined bathroom floor, broken tiles, and "holes and other structural damages in the property's walls and doors." 446 B.R. 813, 813-14 (Bankr. N.D. Ohio 2010). There, the Bankruptcy Court for the Northern District of Ohio concluded "that a significant portion of the damage caused to the [landlord's] property appears to be more the result of neglect, as opposed to overt acts, thereby placing it outside the scope of § 523(a)(6)." Id. at 817. But, in O'Brien v. Sintobin (In re Sintobin), that same court concluded that a landlord's claim against debtor-tenants for spray-painted walls, doors knocked off of hinges, and holes in the walls was not dischargeable because it was "apparent [from the evidence] that such damages were deliberately caused by the Defendants' children and friends of theDefendants' children." 253 B.R. 826, 829, 831 (Bankr. N.D. Ohio 2000). The court in that case also noted that "much of the damage to the Plaintiff's house seems to have occurred when the relationship between the parties was deteriorating," suggesting that the tenants had a motive to cause the damage. See id. at 831.
Here, the damages that the Plaintiff alleges were caused to the rental home easily fall within the definition of malicious, but the Plaintiff has not alleged sufficient facts for the Court to conclude that they are willful. While the Plaintiff has shown that excessive damage has been done to the property, she makes no allegation that it was caused with the intent to injure...
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