Wurmlinger v. Greenfield (In re Greenfield)

Decision Date26 May 2020
Docket NumberCase No. 19-20785-TLM,Adv. No. 20-07005-TLM
Citation621 B.R. 450
Parties IN RE: Christina GREENFIELD, Debtor. Eric Wurmlinger and Rosalynd Wurmlinger, Plaintiffs, v. Christina Greenfield, Defendant.
CourtU.S. Bankruptcy Court — District of Idaho

Jonathon David Hallin, Lukins & Annis, P.S., Coeur d'Alene, ID, for Plaintiffs.

MEMORANDUM OF DECISION

TERRY L. MYERS, U.S. BANKRUPTCY JUDGE

On December 11, 2019, Christina Greenfield ("Debtor" or "Defendant") filed a voluntary chapter 7 petition commencing Case No. 19-20785-TLM.1 Her schedules listed Eric and Rosalynd Wurmlinger (the "Wurmlingers" or "Plaintiffs") as creditors holding a $103,000 judgment. Id. at Doc. No. 1 at 20. On March 2, 2020, Debtor amended that schedule to show a debt to Plaintiffs of $224,456.34. Id. at Doc. No. 38.

Though the bankruptcy was initially filed as a "no asset" case, the chapter 7 Trustee caused a notice of the need to file claims to be issued, requiring creditors to file claims by May 14, 2020. The Wurmlingers filed a proof of claim, No. 4-1, on May 6, 2020, asserting a total claim of $261,083.21 and alleging that $170,000 of that amount was secured by a judgment lien.2

On February 5, 2020, Plaintiffs timely filed the complaint commencing this adversary proceeding against Defendant. Adv. Doc. No. 1 ("Complaint"). Plaintiffs assert that the obligations owed to them by Defendant should be held to be nondischargeable under § 523(a)(6) as reflecting and arising from a willful and malicious injury to them or their property. Defendant answered the Complaint on April 15, 2020. Adv. Doc. No. 14 ("Answer").3

Prior to filing her answer, Defendant filed a motion for summary judgment, Adv. Doc. No. 8 (the "Motion"), along with several attachments, Adv. Doc. Nos. 8-1 through 8-6. On April 14, 2020, given the absence of an answer at that time and the withdrawal of Debtor's counsel, the Court denied the Motion but without prejudice to renewal. Adv. Doc. No. 13. After Defendant filed her Answer on April 15, she noticed the Motion for a hearing on May 18, 2020. Adv. Doc. No. 17.

Plaintiffs responded to the Motion and objected to Defendant's summary judgment affidavit. Adv. Doc. Nos. 19, 20 ("Objection"). Defendant responded to the Objection. Adv. Doc. No. 23. The Motion and Plaintiff's Objection were heard on May 18 and, following arguments, all matters were taken under advisement.

JURISDICTION

This nondischargeability litigation is a core proceeding over which the Court exercises jurisdiction, 28 U.S.C. §§ 157, 1334, and in which it enters final orders and judgments subject to appeal, 28 U.S.C. § 158. Plaintiffs' Complaint failed to include the statement required by Rule 7008 regarding their consent to entry of final orders and judgment by this Court, and Defendant's Answer failed to include the similar statement required of her under Rule 7012(b). However, by their written submissions and by their arguments on May 18, it is clear both parties are asking this Court to enter a final order adjudicating the Motion and the Objection.4

SUMMARY JUDGMENT AUTHORITIES

Summary judgment may be granted if, when the evidence is viewed in a light most favorable to the non-moving party, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. The Court cannot weigh evidence in resolving such motions but, rather, is to determine only whether a material factual dispute remains for trial. A dispute is genuine if there is sufficient evidence for a reasonable fact finder to hold in favor of the non-moving party. A fact is material if it might affect the outcome of the case. Farmers Grain, LLC v. DC Land Operating Co. (In re Farmers Grain, LLC) , 2018 WL 770360, *2 (Bankr. D. Idaho Feb. 7, 2018) (citing Thorian v. Baro Enters., LLC (In re Thorian) , 387 B.R. 50, 61 (Bankr. D. Idaho 2008) ). The initial burden of showing no genuine issue of material fact rests on the moving party. If that burden can be met, the burden then shifts to the nonmoving party to produce evidence that a genuine issue of material fact does exist. Id.

In addition, summary judgment is inappropriate where, in evaluating declarations and affidavits submitted by the parties, the Court must consider credibility or the weight to be given testimony. See Reynard v. Green Valley Lake Holdings, LLC (In re Resler) , 2019 WL 1510335, *3–4 (Bankr. D. Idaho Mar. 4, 2019) ; B.K.L.N. v. Finlay (In re Finlay) , 2019 WL 3294804, *2 (Bankr. D. Idaho Jul. 22, 2019). As the Ninth Circuit once explained:

Neither party's evidence established—beyond the declarants' conflicting assertions—whether Albrecht attended training before the fire. The district court chose to credit the Sure Marine declaration, however, dismissing Albrecht's contrary declaration as unsubstantiated. In accepting one account over the other, the court improperly resolved an evidentiary conflict at the summary judgment stage. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (explaining that "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts" are inappropriate at the summary judgment stage).

Oswalt v. Resolute Indus., Inc. , 642 F.3d 856, 861 (9th Cir. 2011). As stated by the United States Supreme Court, "[I]t is clear enough from our recent cases that at the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson , 477 U.S. at 249, 106 S.Ct. 2505. Furthermore, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255, 106 S.Ct. 2505.

DISCUSSION AND DISPOSITION
A. The parties' prior litigation5

This matter stems from disputes between neighbors, which Defendant's Motion suggests started in 2005. Following years of disputes over alleged violations of subdivision CC&R's, and numerous allegations that each party had "trespassed" on the other's property (including calls to local police), things came to a head in 2010 when Debtor "trimmed" down to 6 feet in height ten arborvitae that the Wurmlingers had earlier planted along the parties' common property line. This triggered additional actions by both and, eventually, led to a civil suit brought in Idaho state district court by Debtor against the Wurmlingers in September 2010. She sought in that litigation a declaratory judgment that the Wurmlingers' bed and breakfast business, and their maintenance of arborvitae exceeding 6 feet, violated the CC&R's; asked for an injunction requiring the Wurmlingers to cease such violations; sought damages for nuisance; and sought damages on the basis of intentional infliction of emotional distress and for negligent infliction of emotional distress. The Wurmlingers asserted a counterclaim "seeking damages for negligent or intentional infliction of emotional distress, common law trespass, and timber trespass." Greenfield , 349 P.3d at 1186.

Ultimately, Debtor's claims of nuisance and negligent infliction of emotional distress were tried to a jury, as were some of the Wurmlingers' counterclaims.6 The jury "returned a special verdict finding that [Debtor] had failed to prove her claims of nuisance and negligent infliction of emotional distress. The jury also found that [the Wurmlingers] had proved their claim of negligent infliction of emotional distress, for which it awarded them $52,000 in damages, and their claim of timber trespass, for which it awarded them $17,000 in damages." Greenfield , 349 P.3d at 1186. "The timber trespass damages were trebled to $51,000 pursuant to Idaho Code section 6-202, and the court awarded [the Wurmlingers] court costs and a reasonable attorney fee totaling $65,755.37. It entered a judgment against [Debtor] in the amount of $168,755.37[.]" Id. at 1186. Debtor's appeal was unsuccessful, and the Wurmlingers were awarded costs and fees on appeal. Id. at 1197.7

B. The parties' contentions and submissions

Plaintiffs' Complaint rests upon the contention that Defendant's acts resulting in the judgment against her were willful and malicious under § 523(a)(6), and that the judgment awarded (alleged to be $196,337.37)8 plus post-judgment interest constitutes a nondischargeable debt.

Defendant's Motion is premised on the proposition that the state court jury's verdict and the resulting judgment was based solely on a finding of negligent infliction of emotional distress and that there was no finding of intentional infliction of emotional distress (that cause having been previously dismissed).9 Thus, she contends, this state court record negates any basis for this Court to consider or find her conduct to be "willful and malicious" under § 523(a)(6). See Adv. Doc. No. 8 at 15 (citing Kawaauhau v. Geiger , 523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998) as holding "debts arising from recklessly or negligently inflicted injuries do not fall within the compass of [§ 523(a)(6) ].").

In response, Plaintiffs object to certain statements in Defendant's affidavit in support of summary judgment. See Adv. Doc. No. 20.10 The Court, however, finds that resolving the Motion does not require extended discussion and analysis of Defendant's affidavit, or resolving every disagreement between the parties over how the litigation history is characterized.11

C. The impact of the jury's verdict on Plaintiffs' present action

Defendant argues that the state court jury's finding of "negligent" liability is preclusive of any attempt in this action to find her liable for "willful and malicious" injury. Defendant focuses on the jury's verdict in favor of Plaintiffs for her negligent—as opposed to intentional—infliction of emotional distress.12 Her argument presumes that such a finding of negligence precludes any contention now made that her conduct was willful and malicious under § 523(a)(6) authority. In effect, Defendant asserts a...

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