Tepes v. Sage (In re Sage)
| Decision Date | 15 June 2022 |
| Docket Number | Bky. No. 21-11708 (PMM),Adv. No. 21-0076 (PMM) |
| Parties | IN RE Maria Louisa SAGE, Debtor. Karl Tepes, Plaintiff v. Maria Louisa Sage, Defendant. |
| Court | United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Charles Laputka, Laputka Law Office, Allentown, PA, for Plaintiff.
Jose C. Campos, Law Office of Jose C. Campos Esq., Bethlehem, PA, Douglas Stuart Wortman, Law Office of Douglas Wortman, Reading, PA, for Defendant.
On Christmas morning, 2019, Maria Louisa Sage (the "Debtor")’s Siberian husky escaped from her property and proceeded to attack Karl Tepes (the "Plaintiff" or "Tepes")’s two (2) Yorkshire terriers, maiming one and killing the other. Following a state court criminal proceeding, the Debtor was found guilty of two (2) counts under Pennsylvania law -unlawful confinement and control and harboring a dangerous dog. The parties then entered into a settlement agreement pursuant to which (in exchange for a reduction in charges) the Debtor confessed judgment owed to the Plaintiff in the amount of $11,621.75 (the "Judgment"). Soon thereafter, the Debtor filed for chapter 7 bankruptcy protection seeking to discharge, inter alia , the Judgment.
The Plaintiff, asserting that the amount owed is restitution that was incurred maliciously, protests and seeks to have the Judgment declared nondischargeable. Specifically, two (2) causes of action remain at issue. Count II of this Adversary Proceeding - the only surviving cause of action stated in the Complaint - seeks a determination of nondischargeability pursuant to 11 U.S.C. § 523(a)(6).1 The Plaintiff, however, also purports to state a cause of action pursuant to 11 U.S.C. § 523(a)(7), despite the fact that this allegation was not pled in the Complaint.2
Trial was held and concluded on March 16, 2022. The Debtor and Tepes testified; no other witnesses were called.
As discussed below, after considering the unusual procedural posture of this matter, the relevant law, and the facts presented, I conclude that the Plaintiff has not adequately plead a cause of action pursuant to § 523(a)(7) and that Tepes has failed to meet his burden with regard to § 523(a)(6).
Therefore, judgment will be entered for the Debtor.
Based on the credibility of the trial witnesses and the plausibility of their testimony and upon review of the relevant evidence, I make the following findings of fact.
1. The Debtor resides at 5017 Washington Ave. in Whitehall, PA.
2. The Debtor and the Plaintiff are neighbors and live on different streets about half a mile from each other. Tr. at 38.
3. Robert Blum ("Mr. Blum") was the Debtor's partner at the time of the incident and witnessed the dog attack.3 Ex. P-1.
4. At the time of the incident in question, neither the Plaintiff's nor the Debtor's yard was enclosed by a fence. Tr. at 39.
5. The Debtor owns an adult brown and white female Siberian husky named Fury ("Fury"). Schedule A/B; Ex. P-5; Tr. at 26.
6. Fury is seven (7) years-old; the Debtor has owned Fury since the dog was a puppy. Tr. at 27.
7. On December 25, 2019, Fury escaped the Debtor's home by "charg[ing]" through the Debtor's back door.4 Ex. P-1; Ex. P-5; Tr. at 10; 25.
8. The Debtor attempted (unsuccessfully) to catch Fury; she enlisted her neighbors’ help as well. Tr. at 26.
9. Fury, who was wearing neither a collar nor a leash, ran from the Debtor's to
the Plaintiff's home and attacked the Plaintiff's two (2) Yorkie Terriers, brother and sister. Ex. P-1; JPS at 1; Tr. at 10. The male Yorkie weighs nine (9) pounds and the female weighed six (6) pounds. Id.
10. Mr. Blum tried to stop the attack by restraining Fury. Tr. at 10.
11. The attempted restraint was unsuccessful; Fury first attacked the Yorkie male, causing him to bleed, Tr. at 10, and then attacked the Yorkie female, "shaking [her] like a ragdoll." Tr. at 11.
12. At some point during the attack of the Plaintiff's two (2) dogs, the Debtor arrived at Tepes’ house. Tr. at 11.
13. The South Whitehall Township Police were called to the scene. Tr. at 12; Ex. P-1.
14. Following the attack of his two (2) dogs, Tepes took his Yorkies to Valley Central pet hospital, where the male dog was treated for lacerations and the female dog died due to the severity of her spinal injuries. Ex. P-1; Tr. at 11.
15. The bill for the veterinary care of the Yorkies was $11,600.00. Tr. at 11.
16. At the time of the incident, Mr. Blum agreed that he would be responsible for the financial cost of the dogs’ injuries. Ex. P-1.5
17. Also on Christmas morning 2019, prior to attacking the Yorkies, Fury attacked the Debtor's neighbor's dog. Ex. P-5; Tr. at 16-17; 40.
18. The neighbor's dog died due to his injuries. Tr. at 17.
19. On January 23, 2020, the Debtor was charged with two (2) criminal offenses under Pennsylvania's Dog Law: (1) harboring a dangerous dog pursuant to 3 P.S. § 459-502-A §§ A1(II); and (2) unlawful confinement and control pursuant to 3 P.S. § 459-305 §§ A3. JPS at 2; Tr. at 29-30.
20. Following a trial held on July 22, 2020, the Debtor was found guilty of both charges and fines in the amount of $13,312.00 were imposed. JPS at 2; Ex. P-2; Tr. at 34.6
21. The Debtor was represented by counsel during the state court proceedings. Tr. at 31.
22. After trial, the Debtor was ordered to pay $2,000.00 per month to the Plaintiff to compensate him for the veterinary bills. Tr. at 35.
23. The Debtor appealed the verdict against her in the Court of Common Pleas of Lehigh County on August 3, 2020. JPS at 2; Ex. P-2; Ex. P-4; Tr. at 34-35.
24. During the appeal hearing on November 13, 2020, the parties agreed to a stipulated order. JPS at 2 (the "Settlement Order"). At this time, the more serious charge of harboring a dangerous dog, of which the Defendant was found guilty at trial, was replaced with the lesser charge of unlawful confinement. Ex. P-4 at 3.
25. The Plaintiff considered the Settlement Order to be "a deal" between the parties according to which the Debtor must pay the Plaintiff $1,500.00 immediately (followed by an additional amount) towards the Plaintiff's veterinary bills in exchange for which the Plaintiff would agree to a lesser charge to be filed. Tr. at 18 (quote); 23; 36.
26. The Debtor also considered her consent to pay a certain amount to the Plaintiff (and her signing of the confession of judgment, see Finding of Fact 29 infra ) to be an agreement by which the charges against her would be reduced. Tr. at 31; 38.
27. Reduction of the criminal charge was intended to insure that Fury would not be classified as a dangerous dog. Tr. at 23.
28. Classification of Fury as a dangerous dog would have resulted in higher fines and the need for an annual inspection by the dog warden, as well as the possibility that Fury would have been euthanized. Tr. at 23; 30.
29. Following the settlement, on December 12, 2020, the Debtor executed the Judgment in the amount of $11,621.75. JPS at 2; Ex. P-3; Tr. at 37.
30. The Judgment specifies that the amount is owed to the Plaintiff "for value received" and that the amount is to be paid within sixty (60) days of execution. Ex. P-3; Ex. P-6.7
31. Sentencing of the Defendant was deferred and the Debtor was ordered to pay the Judgment within sixty (60) days. Ex. P-4 at 5; Tr. at 36.
32. The Debtor made one (1) payment of $1,500.00 towards satisfaction of the Judgment; this amount was paid by check on January 5, 2021. JPS at 3; Ex. P-3. The Debtor made no other payments to the Plaintiff. Tr. at 20-21; Tr. at 37.
33. As part of the negotiated plea, on March 22, 2021, the Debtor pled guilty to the second count (failing to control her dog); the first count of the charges was dropped. JPS at 2; Ex. P-4 at 3.
34. The Debtor filed for chapter 7 bankruptcy protection on June 16, 2021.
35. The Debtor testified at her § 341 meeting of creditors that she "agreed to repay the criminal restitution order in connection with her criminal case and guilty plea." JPS at 3.
36. The Debtor's Schedule E/F lists a debt to Plaintiff in the amount of $13,299.37 for "Confession of Judgment."8
37. The Debtor's Schedule J lists expenses of $600.00 for restitution payments and $400.00 for pet food and medical expenses for Fury.
As mentioned, two (2) causes of action remain - one pled in the Complaint and one raised at trial. First, I will address the Plaintiff's contention that § 523(a)(7) allows him to prevail despite the fact that the Complaint fails to state a claim under this Code section.
Section 523(a)(7) provides that a debt is not discharged "to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit9 and is not compensation for actual pecuniary loss ...." This provision is limited to payments owed to the government; it does not prohibit discharge of punitive debts owed to individuals. 4 Collier on Bankruptcy ¶523.13 (16th ed. 2021).
The Plaintiff, who did not state a cause of action in his Complaint pursuant to 11 U.S.C. § 523(a)(7), seeks nonetheless to have this court determine nondischargeability pursuant to this Code provision. The Plaintiff informed the Debtor and the court of his intent to proceed under § 523(a)(7) at the trial; notice was not provided.
The Plaintiff argues that a debt that meets the requirement of § 523(a)(7) is automatically determined to be nondischargeable without the filing of an adversary complaint, or the imposition of "an evidentiary hearing, notice, or ... proving of fact." Tr. at 43; 45; see also Tr. at 5. The assertion, in other words, is that certain debts escape the imposition of discharge without any procedural safeguards. Tr. at 54 ).
The law supports the opposite...
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