Ventura v. Donna (In re Donna)
| Decision Date | 28 October 2019 |
| Docket Number | Bankr. Appeal No. 17-2217 (TFH),Bankr. Case No. 16-00091,Adversary Proceeding No. 16-10026 |
| Parties | In re Roberto Felice Donna, Debtor. JESUS VENTURA, et al., Plaintiffs-Appellants, v. ROBERTO DONNA, Debtor-Appellee. |
| Court | U.S. District Court — District of Columbia |
Appellants initiated an adversary proceeding against Roberto Donna in the United States Bankruptcy Court for the District of Columbia in September 2017. The Bankruptcy Court granted summary judgment Mr. Donna on all of Appellants' claims, and awarded him attorney's fees for his response to Appellants' motion for a protective order. Appellants have appealed the Bankruptcy Court's rulings.
Roberto Donna is a chef of Italian cuisine who has long worked in the Washington, D.C. area. AA at 716. He was a majority owner of the Italian restaurant Galileo from 1984 until it closed in 2006. AA at 717-18 [ECF No. 5-1]. In 2006, he opened the restaurant Bebo Trattoria ("Bebo Trattoria" or "Bebo") in Arlington, Virginia. AA at 718. Bebo lost its lease and closed in April 2009. AA at 720.
Appellants Jesus Ventura, Mohammed Douah, Arturo Ramos, Bisera Romic, Carlos Sosaya, Dorde Milojevic, Igor Vuckovic, Marijana Bosnjak, Tulga Dorjgotov and Elizabeth Scott ("the Employees") were employees of Bebo Trattoria. They worked at the restaurant for lengths of time varying from 5 to 23 months, spanning January 2007 to December 2008. AA at 1287; 1293; 1295; 1298; 1300; 1302; 1305; 1310; 1312.
In 2008, a group of former Bebo Trattoria employees, including most of the Employees here, sued Roberto Donna, Bebo Foods, Inc. and RD Trattoria, Inc. for failing to pay minimum and overtime wages in violation of the Fair Labor Standards Act ("FLSA") and the D.C. Wage Payment and Collection Law ("DCWPCL") when they were employed at Bebo Trattoria and Galileo. In 2010, the district court granted summary judgment to the former employees, finding that Mr. Donna violated the FLSA and the DCWPCL by failing to pay his employees wages and overtime. Ventura v. Bebo Foods, Inc., 738 F. Supp. 2d 1, 5 (D.D.C. 2010) (Ventura I). After holding two hearings on damages, the court awarded the plaintiffs $526,893.16, including liquidated damages. Ventura v. Bebo Foods, Inc., 738 F. Supp. 2d 8, 12 (D.D.C. 2010) (Ventura II). Mr. Donna was pro se during both the summary judgment briefing and the damages hearings.
Mr. Donna filed for Chapter Seven bankruptcy on March 2, 2016. In response, the Employees filed an adversary proceeding in the United States Bankruptcy Court for the District of Columbia seeking relief from the discharge of Mr. Donna's debts as it relates to their damages award in Ventura II. They sought relief pursuant to 11 U.S.C. § 526(a)(6), which excludes from discharge debts "for willful and malicious injury by the debtor to another entity," and pursuant to11 U.S.C. § 523(a)(2)(A), which excludes from discharge debts "obtained by . . . false pretenses, false representation, or actual fraud."
The Bankruptcy Court granted summary judgment for Mr. Donna, finding that "the plaintiffs have not provided evidence to support their claims that the debtor intended to defraud, or knew any statements he made to the plaintiffs were false, or that the debtor caused a willful and malicious injury to the plaintiffs." Ventura v. Donna (In re Donna), Bankr. No. 16-00091, Adv. No. 16-10026, 2017 WL 4457407, at *1 (Bankr. D.D.C. Sept. 27, 2017). The Employees seek review of that ruling on the grounds there are genuine disputes of material fact over whether Mr. Donna willfully and maliciously injured his employees under 11 U.S.C. § 523(a)(6) when he failed to pay them wages, tips, and overtime, and whether Mr. Donna's promises to pay his employees' wages, tips, and overtime constituted "false representations" under 11 U.S.C. § 523(a)(2)(A). They also seek review of the Bankruptcy Court's order granting attorney's fees to Mr. Donna for his response to their motion for a protective order in the adversary proceeding. AA at 1552-1556.
Summary judgment decisions of the bankruptcy court are reviewed de novo, United States v. Spicer, 57 F.3d 1152, 1159 (D.C. Cir. 1995), and that review extends to both questions of law and fact, In re Capitol Hill Group, 447 B.R. 387, 393 (D.D.C. 2011). "Summary judgment in bankruptcy is governed by Bankruptcy Rule 7056, which incorporates the standard of Rule 56 of the Federal Rules of Civil Procedure: summary judgment may be granted only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Id.; see also Fed. R. Bankr. P. 7056 (); Local Bankr. R. 7056-1 ().
The movant "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). In response, the nonmoving party must "go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Id. at 324 (internal quotation marks omitted).
At the summary judgment stage, "the judge's function is not . . . to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Although "[t]he evidence is to be viewed in the light most favorable to the nonmoving party and the court must draw all reasonable inferences in favor of the nonmoving party," Talavera v. Shah, 638 F.3d 303, 308 (D.C. Cir. 2011), "[i]f the evidence is merely colorable . . . or is not significantly probative . . . summary judgment may be granted," Anderson, 477 U.S. at 249-50.
Under Rule 37 of the Federal Rules of Civil Procedure, "the district court has broad discretion to impose sanctions for discovery violations." Bonds v. District of Columbia, 93 F.3d 801, 808 (D.C. Cir. 1996); see also Fed. R. Bankr. P. 7037 (). "[D]iscovery-related orders" are reviewed for "abuse of discretion, a 'narrowly circumscribed' scope of review." Parsi v. Daioleslam, 778 F.3d 116, 125 (D.C. Cir. 2015) (quoting Lee v. Dep't of Justice, 413 F.3d 53, 59 (D.C. Cir. 2005)). In reviewing discovery sanctions, the Court may reverse the Bankruptcy Court "only if . . . its actions were clearly unreasonable, arbitrary or fanciful." Bonds, 93 F.3d at 807 (internal quotation marks omitted).
As a preliminary matter, the Employees contend that the Bankruptcy Court should have reviewed the entire record that was before the district court in Ventura I and Ventura II (the "District Court") when ruling on Appellee's motion for summary judgment. Appellant Br. at 12 [ECF No. 5]. They note that the District Court conducted three evidentiary hearings and heard testimony from Mr. Donna, restaurant managers, and five of his employees, but contend that the Bankruptcy Court "failed to consider any of the facts from the District Court record which contravened Mr. Donna's self-serving declaration." Id. If the Bankruptcy Court had reviewed those facts, the Employees claim that it would have found that "Mr. Donna had not suffered from poor business decision-making, but had willfully and intentionally engaged in a pattern of wage theft, and then deliberately misrepresented to his employees that he would pay them . . . ." Id.
To support their argument, the Employees rely on In re Makozy, which similarly involved an adversary proceeding to block the discharge of debts stemming from an FLSA judgment. The In re Makozy court "look[ed] at the findings supporting the [d]istrict [c]ourt's conclusion that the actions were 'willful' under the FLSA" to determine whether the actions were willful under 11 U.S.C. § 523(a)(6). Appellant Br. at 12; United States v. Makozy (In re Makozy), Bankr. No. 13-25231, Adv. No. 13-2440, 2013 WL 9663062, *3 (Bankr. W.D. Pa. Sept. 9, 2014). In re Makozy differed from this case because there was no record before the In re Makozy court. The summary judgment filings did not include record citations or an appendix; instead, they referred entirely to the FLSA court's findings. See Makozy Br. in Supp. Mot. Summ. J. [ECF No. 37] & United States Br. in Supp. Mot. Summ. J. [ECF No. 39], In re Makozy, Adv. No. 13-2440-CMB. Incontrast, in this case, there was a record before the Bankruptcy Court containing evidence developed in both the adversarial proceeding and the FLSA case. See, e.g., AA at 1062-1312.
The Bankruptcy Court did not have an obligation to depart from ordinary summary judgment procedures and review the parts of the District Court record that the parties did not cite in their summary judgment motions. See Jackson v. Finnegan, Henderson, Farabow, Garrett & Dunner, 101 F.3d 145, 154; 151 (D.C. Cir. 1996) ( reference to Local Civil Rule 7h, which the Local Bankruptcy Rules have adopted, that the Court is "under no obligation to sift through the record" on summary judgment, and that the burden is "on the parties and their counsel, who are most familiar with the litigation and the record, to crystallize for the district court the material facts and relevant portions of the record."). In their opposition to Mr. Donna's motion for summary judgment, the Employees had the responsibility to present all the evidence demonstrating a genuine dispute of material facts to the Bankruptcy...
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