Watson v. Bradsher

• Decision Date: 12 August 2022
• Docket Number: Civil Action 1:21-CV-1778-SEG
• Parties: STANLEY KAPPELL WATSON, Appellant, v. SHENEEKA BRADSHER and ZARINAH ALI, Appellees.
• Court: U.S. District Court — Northern District of Georgia

STANLEY KAPPELL WATSON, Appellant,
v.
SHENEEKA BRADSHER and ZARINAH ALI, Appellees.

Civil Action No. 1:21-CV-1778-SEG

United States District Court, N.D. Georgia, Atlanta Division

August 12, 2022

OPINION AND ORDER

SARAH E. GERAGHTY, United States District Judge.

Appellant Stanley Kappell Watson appeals the Bankruptcy Court's Order and Judgment (Docs. 1-2, 1-3) entered in part in his favor and in part in favor of Appellees Sheneeka Bradsher and Zarinah Ali. (Doc. 1). For the following reasons, the Court will affirm the judgment in part and reverse it in part, and it will remand the case for further proceedings consistent with this order.

I. Background

This appeal arises out of an adversary proceeding brought in the Bankruptcy Court of the Northern District of Georgia by Bradsher and Ali (“Plaintiffs”), who hold a state court judgment against Watson (“Defendant”). After Defendant filed a Chapter 7 bankruptcy petition on November 28, 2018, Plaintiffs commenced an adversary proceeding seeking a determination that

1

the debt Defendant owes them is nondischargeable pursuant to 11 U.S.C. § 523(a)(6), which exempts from bankruptcy discharge any debt “for willful and malicious injury by the debtor to another entity or to the property of another entity.” Because § 523(a)(6)'s “willful and malicious injury” standard differs from the state-law standards required for findings of slander, false imprisonment, and battery-and the state court verdict was, in any event, unspecific about which claims led to which damages-the Bankruptcy Court held a trial in which it heard testimony from all parties and reviewed a variety of evidence introduced by Plaintiffs. This evidence included the record and transcripts of testimony from the state court trial.

The Court need not restate the Bankruptcy Court's full account of the events that led to Plaintiffs' injuries, which can be found in its final Order in the case.^[1] (Doc. 1-2 at 2-9). A relatively brief summary follows here.

2

The relevant encounter between the parties occurred at the Tanqueray Lounge in Decatur, Georgia. At the time, Defendant Watson was a commissioner for DeKalb County, Georgia, and was wearing a shirt that identified him as such. He had gone to Tanqueray alone after having dinner with a friend. Plaintiff Bradsher was visiting Plaintiff Ali from out of town, and they went to the Tanqueray Lounge together. At some point in the evening, Defendant bought a drink or drinks for Bradsher, the two talked, and Defendant propositioned her for sex, a suggestion that Bradsher testified offended her and led her to reject Defendant in insulting terms.^[2]

Not long after this, Defendant-needing to pay for the drinks he had purchased for Bradsher and himself-discovered that he did not have his wallet. After the bartenders told him they had not seen it, Defendant

3

concluded that Bradsher must have stolen it. In fact he had left the wallet in his car, where he would discover it the next day.

What followed was an incident in which Defendant repeatedly accused Bradsher and then Ali of having stolen his wallet, repeatedly called Plaintiffs “bitches,” demanded that the police arrest Plaintiffs, and taunted Plaintiffs that they were going to jail. The Bankruptcy Court found that Defendant “genuinely believed Plaintiffs had taken his wallet.” (Doc. 1-2 at 11.) Bradsher, however, knew the accusations to be false, and she grew irate. The situation escalated as she and Defendant had a heated exchange inside the bar. One of the bar's security staff was an off-duty police sergeant, and he took the lead in handling the incident and attempted to control the situation. Early in the episode, Plaintiffs allowed the off-duty officer to look in both of their purses for the wallet. It was not there. Despite this, Defendant continued to accuse both women of having the wallet, to demand that they be arrested, and to taunt Plaintiffs. During this phase of the encounter, Defendant poked Ali's forehead while pointing his finger at her and telling her she was going to jail.^[3]

4

The parties were moved outside into the Tanqueray parking lot. The off-duty officer on the scene called two other officers to assist him. Throughout the episode-but particularly at this stage, after things were moved to the parking lot-Defendant attempted to wield his authority as a county commissioner to get those around him to give into his demands. For example, he threatened those at Tanqueray that he would tell “Dale, Annette, and Chief O'Brien”^[4] what had happened, that the bar would lose its food license, and that the people working there would lose their jobs. He apparently leveraged his position to ensure that he would not be arrested, despite his “belligerent” behavior and the fact that he briefly drove his car away in the middle of the episode, even after an officer warned him that he should not drive because he was intoxicated.^[5] When a police lieutenant arrived on the scene following Defendant's brief drive, the lieutenant called a police major and allowed Defendant to talk to him on the phone. The Bankruptcy Court found that

5

“[a]lthough the police wanted to arrest Defendant for his disorderly behavior, they were directed by their superiors to allow Defendant to be taken home, apparently in response to phone conversations between Defendant and those superiors.” (Doc. 1-2 at 8.)

Bradsher, for her part, was handcuffed not long after the parties were removed from the bar, informed that she was under arrest for disorderly conduct, and placed into the back of a police car. The officer who ordered Bradsher to be arrested testified that he did so not as a result of Defendant's accusations, but as a result of her disorderly conduct. He further testified that he would not have investigated either plaintiff if Defendant had not accused them, and that Bradsher was not disorderly prior to Defendant's accusations. While Bradsher was in the police car, Defendant walked “back and forth along the police car saying that she had stolen his wallet and was going to jail.” (Id. at 7-8.) Ali remained calm throughout the incident, and although she was not permitted to leave the scene, she was not handcuffed or otherwise physically detained by the police. The officers on the scene ultimately decided not to arrest Bradsher, feeling it was unfair to arrest her for disorderly conduct while allowing Defendant to be driven home, as the police lieutenant had instructed was to be done with Watson.

6

A jury in the State Court of Dekalb County later found Defendant liable to Plaintiffs for $110,000 in damages and $40,500 in fees and costs pursuant to a complaint alleging slander, false imprisonment, and battery. (Id. at 2.) The jury allocated $75,000 in compensatory and $5,000 in punitive damages to Bradsher and $25,000 in compensatory and $5,000 in punitive damages to Ali. (Id.) The jury verdict did not specify which claim or claims were the basis for the damages. (Id. at 9.)

The Bankruptcy Court found nearly this entire amount to be nondischargeable pursuant to the 11 U.S.C. § 523(a)(6) exception for debts for “willful and malicious injury.” It found only the amount owing to Ali for the battery count to be dischargeable, and it attributed $2,500 of her jury award to this count. (Id. at 13.) This debt was dischargeable, it found, because Defendant did not intend to make physical contact with Ali when he poked her forehead, and therefore the injury could not have been “willful” within the meaning of § 523(a)(6). (Id. at 12.) On appeal, Defendant argues that the Bankruptcy Court erred in its finding that Plaintiffs' other injuries were “willful and malicious” within the meaning of § 523(a)(6).

II. Standard of Review

United States district courts have jurisdiction to hear appeals “from final judgments, orders, and decrees . . . of bankruptcy judges.” 28 U.S.C. §

7

158(a)(1). “In its appellate capacity, a district court may affirm, modify, or reverse a bankruptcy judge's judgment, order, or decree or remand with instructions for further proceedings.” Choi v. Promax Invs., LLC, 486 B.R. 541, 543 (N.D.Ga. 2012) (quotation omitted).

A district court is required to accept the bankruptcy court's factual conclusions unless they are clearly erroneous. Id.; Fed.R.Bankr.P. 7052 (making Fed.R.Civ.P. 52 applicable to adversary proceedings); Fed.R.Civ.P. 52(a)(6) (“Findings of fact, whether based on oral or other evidence, must not be set aside unless clearly erroneous, and the reviewing court must give due regard to the trial court's opportunity to judge the witnesses' credibility.”). The bankruptcy court's conclusions of law, by contrast, are reviewed de novo. Reider v. FDIC (In re Reider), 31 F.3d 1102, 1104 (11th Cir. 1994).

With respect to the dischargeability exception at issue in this appeal- 11 U.S.C. § 523(a)(6)-“[w]e review de novo any legal interpretation of the terms ‘willful' and ‘malicious,' but we review only for clear error the bankruptcy court's finding that a creditor showed a willful and malicious injury by a preponderance of the evidence.” Kane v. Stewart Tilghman Fox & Bianchi, P.A. (In re Kane), 755 F.3d 1285, 1293 (11th Cir. 2014) (citing Chrysler Credit Corp. v. Rebhan, 842 F.2d 1257, 1264 (11th Cir. 1988), abrogated on other grounds, Grogan v. Garner, 498 U.S. 279 (1991)). In other words, while “[a]

8

bankruptcy court's determination that an injury was ‘willful and malicious' is a factual finding that we review only for clear error,” id., the reviewing court must inquire anew into the legal meaning of a “willful and malicious injury” to ensure that the correct standard was applied in making the relevant factual determinations.

It is a general rule that exceptions to discharge are to be construed strictly “in order to give effect to the fresh start policy of the Bankruptcy Code.” Holland v. Villa (In re Villa), 261 F.3d 1148, 1152 (11th Cir. 2001)...