SSS Educ., Inc. v. Fisher (In re Fisher)
| Decision Date | 24 January 2017 |
| Docket Number | Case No.: 16-12991-ABA,Adv. No.: 16-1377-ABA |
| Parties | In re: Theresa C. Fisher, Debtor. SSS Education, Inc. d/b/a Jersey College, Plaintiff, v. Theresa C. Fisher, Defendant. |
| Court | U.S. Bankruptcy Court — District of New Jersey |
NOT FOR PUBLICATION
Chapter: 7
MEMORANDUM DECISION
Before the court is a motion for summary judgment (the "Motion") by Plaintiff SSS Education, Inc. d/b/a Jersey College (hereinafter "Jersey College") in its action against Theresa C. Fisher (hereinafter "Ms. Fisher"). Jersey College commenced this Adversary Proceeding pursuant to section 523(a)(6) of Title 11 of the United States Code (the "Bankruptcy Code") seeking to have the debt owed to it by Ms. Fisher, which debt was reduced to a judgment in the state court after an arbitration proceeding, declared non-dischargeable as a willful and malicious injury. For the reasons that follow, the court finds that Jersey College has established that there is no genuine dispute as to any material fact and it is entitled to judgment as a matter of law that the debt owed to it arises as a result of a willful and malicious injury. Thus, Jersey College's Motion is granted.
This matter before the court is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I) and (O), and the court has jurisdiction pursuant to 28 U.S.C. § 1334, 28 U.S.C. § 157(a) and the Standing Order of Reference issued by the United States District Court for the District of New Jersey on July 23, 1984, as amended on September 18, 2012, referring all bankruptcy cases to the bankruptcy court. The following constitutes this court's findings of fact and conclusions of law as required by Federal Rule of Bankruptcy Procedure 7052.
On May 25, 2016, Jersey College, by and through counsel, filed the Adversary Proceeding Complaint ("Complaint") for nondischargeability pursuant to section 523(a)(6) of the Bankruptcy Code for a willful and malicious injury (Doc. No. 1). On June 10, 2016, Ms. Fisher filed her answer ("Answer") (Doc. No. 3). On August 30, 2016 a joint scheduling order was entered scheduling, among other things, a trial date of January 4, 2017 (Doc. No. 6). On November 4, 2016, Jersey College filed the instant Motion (Doc. No. 8). The hearing for the Motion was set for November 29, 2016. Ms. Fisher appeared at the hearing and stated that she had in fact submitted a response, but that it never appeared on the docket. The court conferred with its clerk's office and discovered that Ms. Fisher had submitted documents on October 28, 2016, a week prior to the filing of the Motion, but because the documents appeared to be exhibits for trial, they had not been placed on the court's docket. Ms. Fisher stated that she believed that she was not required to file any response to the Motion as she assumed the trial exhibits provided the information necessary to constitute a response to the Motion. Due to Ms. Fisher's misunderstanding1 and the fact that neither Jersey College nor the court had an opportunity to review these materials,2 the hearing was adjourned to January 3, 2017. Both parties were granted an opportunity to submit additional responses prior to that hearing. The trial was adjourned pending the outcome of the Motion.
Jersey College filed supplemental documents on December 13, 2016 (Doc. Nos. 11 and 12) and a brief in support of its motion on December 20, 2016 (Doc. No. 13). Ms. Fisher filed a response on December 22, 2016 (Doc. No. 14). Finally, a full transcript of the arbitration proceeding was submitted along with exhibits on December 27, 2016 (Doc. No. 15) and Jersey College submitted a supplemental response on December 29, 2016 (Doc. No. 16). The January 3rd hearing was held. Counsel for Jersey College appeared. Ms. Fisher did not.
Following the hearing, the court took this matter under advisement. This matter is now ripe for disposition.
The pertinent unrefuted facts3 in this Adversary Proceeding are as follows:
Jersey College is an educational institution accredited by the Commission of the Council on Occupational Education offering associates degrees for nursing programs (Doc. No. 11-6). It is recognized as such by the State of New Jersey Office of the Secretary of Higher Education. Id. Ms. Fisher was enrolled as a student at Jersey College. Course requirements and standards, including methods of evaluation, were provided to Ms. Fisher (Doc. Nos. 11-8 and 11-14). Additionally, Jersey College provided to Ms. Fisher information about its accreditation status in the initial enrollment agreement as well as in its Frequently Asked Questions packet. (Doc. Nos. 11-3, 11-4, 15 p. 6).
At one point, Jersey College advised Ms. Fisher that she failed Senior Seminar, a course necessary for graduation (Doc. Nos. 1, ¶ 10; 11-9). A dispute arose between the parties. Ms. Fisher started a derogatory campaign against the school. Jersey College demanded that Ms. Fisher cease and desist in her campaign against it, and ultimately because she did not, terminated her as a student at Jersey College (Doc. No. 11-7).
Students at Jersey College sign a contract agreeing that any disputes with the school will be resolved through binding arbitration by the American Arbitration Association ("AAA") (Doc. Nos. 11-3 and 11-4). On March 13, 2015, Jersey College requested arbitration in response to what it deemed to be a campaign of harassment and defamation conducted by Ms. Fisher. The arbitration complaint by Jersey College against Ms. Fisher included claims for defamation (including knowingly false statements), tortious interference with a prospective economic advantage, breach of contract, and harassment (Doc. No. 11). The arbitration proceeding began on April 30, 2015, with a preliminary teleconference. Although notice was provided to her by the AAA (Doc. No. 15, p. 5, ¶1.21), Ms. Fisher did not appear for the teleconference. Only the arbitrator and Jersey College were involved. An evidentiary arbitration hearing was scheduled and notice was provided to Ms. Fisher by the AAA (Doc. No. 15, p.5, 1.8). Despite her statement to the contrary (Doc. No. 14), the arbitrator concluded that Ms. Fisher was actually aware of the proceedings due to communications from her and/or her potential representative regarding same (Doc. No. 15, p .6). On May 13, 2015, an evidentiary arbitration hearing was held and Ms. Fisher, again, did not appear. During the hearing, Jersey College submitted pleadings, documents, briefs and testimony from four witnesses (Doc. No. 15, p. 2-4).
The arbitrator found in favor of Jersey College based on the evidence Jersey College presented. On June 12, 2015, the arbitrator issued his written findings and Final Award of Arbitrator ("Award") (Doc. No. 1-2). The arbitrator's final award found, among other things, that Ms. Fisher took reprisals against Jersey College for its failure to graduate her, including organizing students to picket and demonstrate, and uploading demonstrably false statements about Jersey College. Id. at p. 1. Her reprisals took the form of "attacking the bona fides of [Jersey College's] nursing program through print media, social media, and picketing." Id. Further, these reprisals were for the express purpose of extorting a degree from Jersey College, and the activities of Ms. Fisher "had their intended effect of wreaking havoc upon [Jersey College's] operations." Id. at pp. 1-2. "[Ms. Fisher's] reprisals have the additional purpose of punishing [Jersey College] on account of its refusal to graduate her." Id. at p. 1. Finally, the arbitrator stated in the Award that Ms. Fisher's "willful and malicious activities have caused financial losses to Claimant in excess of $250,000." Id. at p. 2.
Jersey College then filed a complaint, on notice to Ms. Fisher, with the New Jersey Superior Court to confirm the final arbitration award, on August 28, 2015 (Doc. No. 1, p. 5). A Judgment on Award ("Judgment") was entered in favor of Jersey College on October 8, 2015 confirming the findings and Award of the arbitrator (Doc. No. 1-3). Jersey College proceeded with execution on its Judgment.
Ms. Fisher filed her chapter 7 bankruptcy petition on February 19, 2016. This Adversary Proceeding and Motion followed.
In this court, Jersey College submitted undisputed evidence of a Youtube video titled "Jersey College a fraud" that Ms. Fisher appeared in where she made statements that Jersey College was not an accredited program (Doc. No. 11-2). The video had been viewed numerous times, and comments left by viewers, including current and prospective students of Jersey College, evidenced that the video had the effect of causing them to be scared to continue with the school, to question whether to attend, or to change their minds about attending the school at all (Doc. Nos. 11-2 and 12-1). The Youtube video eventually became the number one result when searching "Jersey College" on Youtube or Google (Doc. Nos. 11-12; 11-13). In addition, Jersey College submitted evidence of broader harm to Jersey College as a direct result of Ms. Fisher's campaign. See Doc. Nos. 12-1; 12-3. Jersey College also submitted evidence that Ms. Fisher had been made aware of its accreditation status. (Doc. Nos. 11-3; 11-4). Ms. Fisher has not disputed any of these facts.
Other evidence presented reflects that Ms. Fisher had organized and been involved in picketing outside the school carrying signs with derogatory statements about the school (Doc. No. 11-10). There was also evidence submitted that Ms. Fisher posted pictures on Facebook of her picketing with these signs, with comments from Ms. Fisher stating that she was posting the images to spread awareness. Id. Further evidence was of an Instagram page created or used by Ms. Fisher titled "boycottjerseycollege," as well as other social media presenting defaming statements about Jersey College (Doc. No. 11-11). In addition, Ms. Fisher circulated a letter to current students stating...
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