Trinity Christian Ctr. of Santa Ana, Inc. v. Koper (In re Koper)
| Decision Date | 30 September 2014 |
| Docket Number | Case No. 13–74213–las,Adv. Pro. No. 13–8168–las |
| Citation | 516 B.R. 707 |
| Parties | In re: Michael W. Koper, Debtor. Trinity Christian Center of Santa Ana, Inc., Plaintiff, v. Michael W. Koper, Defendant. |
| Court | U.S. Bankruptcy Court — Eastern District of New York |
LeClair Ryan, Attorneys for Plaintiff, By: Michael T. Conway, Esq., 885 Third Avenue, 16th Floor, New York, New York 10022.
Winters & King Inc., Attorneys for Plaintiff, By: Michael King, Esq., 2448 E. 81st St., Suite 5900, Tulsa, Oklahoma 74137.
Michael Koper, Pro se Defendant, 100B Haven Avenue # 2, Port Washington, New York 11050.
Keeling Law Group, PLLC, Attorneys for Brittany Koper, By: David R. Keesling, Esq., 401 S. Boston Ave., Mid–Continent Tower, Suite 450, Tulsa, Oklahoma 74103.
Before the Court is the motion dated June 2, 2014 of Plaintiff, Trinity Christian Center of Santa Ana, Inc. (“TCCSA” or “Plaintiff”), for an order (i) staying TCCSA's adversary proceeding against the Debtor Defendant, Michael Koper (the “Debtor”), which seeks a determination that debts owed to it by the Debtor are nondischargeable under section 523(a)(2), (a)(4) and (a)(6) of the Bankruptcy Code because the debts were procured through fraud, false pretenses, and defalcation, and (ii) compelling the Debtor to participate in an arbitration proceeding in California (the “Arbitration Proceeding”) of TCCSA's claims against him and his non-debtor spouse, Brittany Koper (“Brittany”, together with the Debtor, the “Kopers”) (the “Motion to Compel Arbitration”) [dkt. no. 32]. The Debtor filed opposition dated June 22, 2014 to the Motion to Compel Arbitration (the “Objection”) [dkt. no. 43].
At issue is whether the determination of the underlying issues of liability and damages in this pending adversary proceeding constitutes (a) a “non-core” proceeding, as asserted by TCCSA, subject to mandatory arbitration such that this Court must stay this adversary proceeding in deference to the pending Arbitration Proceeding and give collateral estoppel effect to any decision that may be rendered by the arbitrator on the very same matters pending before this Court, or (b) a “substantially core” proceeding such that this Court may exercise its discretion in considering whether this adversary proceeding should be stayed in favor of the Arbitration Proceeding. For the reasons set forth below, the Motion to Compel Arbitration is denied. The following constitutes the Court's findings of fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”).
The Court has jurisdiction over this matter under 28 U.S.C. § 1334(b) and the Standing Order of Reference entered by the United States District Court for the Eastern District of New York pursuant to 28 U.S.C. § 157(a), dated August 28, 1986, as amended by Order dated December 5, 2012, effective nunc pro tunc as of June 23, 2011.
Plaintiff is a California nonprofit corporation that operates as a church and a religious broadcasting company that does business as Trinity Broadcasting Network (“TBN”). Plaintiff is featured on thousands of television and cable systems worldwide and on the internet. The Kopers were employed by the Plaintiff and related organizations from 2006 to September 2011 (the “Employment Period”) and by 2008 they held various positions as high ranking employees and corporate officers. Brittany is the granddaughter of Paul Crouch, Sr., the Plaintiff's founder. The Plaintiff's Board of Directors and corporate officers are made up of a core group of Brittany's family members. During the Employment Period, the Kopers also were appointed directors of International Christian Broadcasting, Inc. (“ICB”), an associated non-profit entity of TCCSA, which also does business as Heroes Under God (“HUG”).
Brittany was employed as Plaintiff's Director of Personnel and eventually became Director of Finance around June 2011. In connection with her employment, Brittany signed a confidentiality agreement (the “Confidentiality Agreement”) and a Comprehensive Arbitration Agreement on February 21, 2008. Under the Confidentiality Agreement with the Plaintiff, through its Trinity Broadcasting Network, Brittany agreed to keep certain information she received through her employment confidential and to return to the Plaintiff any documents or materials containing any confidential information upon the termination of her employment. Pursuant to the Comprehensive Arbitration Agreement with the Plaintiff, Brittany agreed and acknowledged that the Plaintiff and she will utilize binding arbitration to resolve all disputes that may arise out of the employment context.
At least from July 2009 to September 2011, Michael resided in Lake Forest, California. Michael worked directly with Plaintiff's General Counsel in the legal department as a law clerk. By 2008, Michael became a corporate officer of the Plaintiff holding the position of Assistant Secretary. On August 16, 2010, Michael also signed a Comprehensive Arbitration Agreement similar to the one Brittany signed with the Plaintiff. The Comprehensive Arbitration Agreement provides that binding arbitration shall be conducted pursuant to the Federal Arbitration Act under the jurisdiction of the County of Orange in the state of California and shall also be in conformity with the procedures of the California Arbitration Act. The arbitrator shall be a retired California Superior Court Judge, or a qualified individual to whom the parties mutually agree. Michael also allegedly signed a confidentiality agreement although a copy of such confidentiality agreement has not been submitted to the Court. In June 2011, Michael was promoted to Director of Plaintiff's Media Services Agency. As part of his promotion, Michael received a corporate credit card from the Plaintiff for his use.
On September 30, 2011, TCCSA and ICB terminated the Kopers' employment for alleged wrongdoing that occurred in connection with their employment. Thereafter, TCCSA and ICB commenced multiple legal proceedings against the Debtor, some of which are described herein, in different jurisdictions, including the Superior Court of the State of California in the County of Orange (the “Orange County Superior Court”), the United States District Court for the Central District of California (“California District Court”), the United States District Court for the Eastern District of New York, the Supreme Court of the State of New York, and the New Jersey Superior Court.
On October 18, 2011, Redemption Strategies, Inc., a for-profit corporation, allegedly created by TCCSA and ICB, sued the Kopers in the Orange County Superior Court for alleged embezzlement of approximately $1.3 million from ICB and/or TCCSA.
On May 4, 2012, Plaintiff filed an action before the Orange County Superior Court, Case No. 30–2012–00566620, seeking injunctive relief against the Kopers pursuant to the Confidentiality Agreements to prevent disclosure of certain confidential information, trade secrets and family confidences obtained by them during their employment with the Plaintiff (the “Confidentiality Enforcement Action”). In that action, the Plaintiff alleged that the Kopers misappropriated corporate records, including computer records, emails, financial records and corporate resolutions from the Plaintiff and ICB. The Plaintiff accused the Kopers of launching a media smear campaign against the Plaintiff and causing damage to the Plaintiff's reputation and financial harm by distributing the Plaintiff's confidential information to the public.
On June 8, 2012, the Plaintiff sued the Kopers in another action before the Orange County Superior Court, Case No.: 30–2012–00575085, asserting similar allegations as the Confidentiality Enforcement Action but sought, inter alia, to compel arbitration of their disputes pursuant to the Comprehensive Arbitration Agreements. The action was removed to the California District Court under Case No. 8:12–CV–01121.
On June 26, 2012, the Plaintiff filed an action against the Kopers in California District Court captioned Trinity Christian Center of Santa Ana, Inc. v. Michael Koper et al., No. SACV 12–01049 (the “Central District Case”) which asserts claims that are similar to the claims asserted in this adversary proceeding. In the Central District Case, the Plaintiff alleges that during the Employment Period, (i) the Kopers made unlawful use of corporate credit cards, (ii) Michael created a separate entity known as “Michael Koper d.b.a Media Services” in order to unlawfully obtain funds owed to Media Services Agency, (iii) the Kopers obtained and embezzled Plaintiff's funds for their own use, and breached their fiduciary duties, including the duty of loyalty, owed to Plaintiff, (iv) the Kopers stole and converted Plaintiff's assets for their own use, and (v) the Kopers breached the terms of the Confidentiality Agreements. The Plaintiff also moved to compel the Kopers to participate in an arbitration to resolve the disputes between the parties. Michael opposed, arguing, inter alia, that there is an issue as to the applicability of the arbitration agreement to the existing dispute between the parties.
On June 21, 2013, U.S. District Court Judge David O. Carter granted the Plaintiff's motion to compel arbitration (the “Arbitration Order”) in the Central District Case, finding “that the question of arbitrability itself is one for the arbitrator, and that the California District Court's involvement on this issue must end.” Arbitration Order at 5. Accordingly, before a determination of Plaintiff's underlying claims against the Kopers in the Arbitration Proceeding can proceed, the arbitrator must determine whether the dispute between the Plaintiff and the Kopers is even subject to arbitration.
Michael filed for chapter 7...
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CHAPTER 6, A. Arbitrability of Student Loan Dischargeability
...(Bankr. S.D.N.Y. Nov. 10, 2014).[40] In re Golden, 587 B.R. at 427.[41] Koper v. Trinity Christian Ctr. of Santa Ana Inc. (In re Koper), 516 B.R. 707, 719 (Bankr. E.D.N.Y. 2014).[42] Roth, 594 B.R. at 677. See also, e.g., In re Eber, 687 F.3d at 1131 (affirming bankruptcy court's denial of ......