Opinion
Case No. 14-55623 Adv. Pro. No. 14-2318
09-30-2015
In Re: Patricia A. Zweifel, Debtor. Westbury Village Association, Plaintiff, v. Patricia A. Zweifel, Defendant.
Attorney for Plaintiff, Magdalena Myers (via CM/ECF Electronic Service) Attorney for Defendant, Nicole Marie Churchill (via CM/ECF Electronic Service)
Chapter 7 OPINION AND ORDER ON DEBTOR'S MOTION FOR JUDGMENT ON THE PLEADINGS OR FOR SUMMARY JUDGMENT
This cause came on for consideration of the Dispositive Motion of Defendant for Judgment on the Pleadings or in the Alternative Summary Judgment (Doc. #18) (the "Motion") filed by Patricia Zweifel ("Debtor"), and the response filed by Plaintiff Westbury Village Association (Doc. #21). Plaintiff Westbury Village Association has also filed Plaintiff's Motion for Summary Judgment (Doc. #23) (the "MSJ"), to which Debtor has responded (Doc. #26), and Plaintiff filed a reply (Doc. #27). Plaintiff's MSJ will be the subject of a separate Opinion.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and General Order 05-02 entered by the United States District Court for the Southern District of Ohio, referring all bankruptcy matters to this Court. This is a core proceeding pursuant to 28 U.S.C. § 157 (b)(2)(I).
I. Background
The facts evident from the record and upon which this Court can decide the Motion may be summarized as follows: Debtor owns a condominium in a residential development known as Westbury Village Condominium. The Declaration of Covenants, Conditions, Restrictions and Assessments of Westbury Village Condominium and/or rules and regulations enacted by the Westbury Village Association (collectively, the "Declaration") require that residents restrain and control the activities of any dogs they may own. Debtor failed to control her dogs. Westbury Village Association (the "Association" or "Plaintiff") filed suit against her in the Franklin County Common Pleas Court (the "State Court") seeking an order directing Debtor to comply with the Declaration and control her dogs. Debtor and the Association reached an agreement, upon which the State Court entered an agreed order directing Debtor to take all actions necessary to confine her dogs to her condominium patio, or have them on a leash under her control. The Complaint alleges that Debtor did not comply with the agreed order. Debtor denies this but admits that in July 2012, the State Court granted the Association a permanent injunction against Debtor, directing her to confine her dogs to her patio or have them on leash, and to undertake all necessary steps to prevent the dogs from ecaping her control. The Association was subsequently compelled to file three separate motions for contempt against Debtor, alleging violations of the agreed order and the injunction. In December 2013, the State Court granted the Association judgment on the motions for contempt and fined Debtor $16,000.
Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on August 8, 2014. The Association timely filed the Complaint commencing this adversary proceeding, seeking a determination that the debt owed the Association is not dischargeable pursuant to 11 U.S.C. § 523(a)(6). In the Complaint, the Association alleged that Debtor willfully disobeyed the agreed order, and acted maliciously in that she knew that her conduct was in violation of the agreed order and that the violation was almost certain to cause harm. The Association further alleged that the agreed order "made [Debtor] substantially certain that by failing to contain her dogs, she risked substantial injury to the Association."
II. 11 U.S.C. § 523(a)(6)
Because the overarching purpose of the Bankruptcy Code is to provide a fresh start to those in need of relief from the efforts of creditors, exceptions to discharge are to be strictly construed against the complaining party. Rembert v. AT&T Universal Card Serv., Inc. (In re Rembert), 141 F.3d 277, 281 (6th Cir. 1998). However, the relief provided by the Bankruptcy Code is intended only for the "honest but unfortunate" debtor and not to protect perpetrators of fraud or those who engage in egregious conduct. Grogan, 498 U.S. at 287.
Grogan v. Garner, 498 U.S. 279, 286 (1991).
Section 523(a)(6) of the Bankruptcy Code provides in pertinent part:
(a) A discharge under section 727 . . . does not discharge an individual debtor from any debt -11 U.S.C. § 523(a)(6). Because the word "willful" in the statute modifies the word "injury," the United States Supreme Court has concluded that § 523(a)(6) requires a "deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury." Kawaauhau v. Geiger, 523 U.S. 57, 61 (1998). "[T]he actor must intend 'the consequences of an act,' not simply 'the act itself.'" Id. at 61-62 (citation omitted).
. . .
(6) for willful and malicious injury by the debtor to another entity or to the property of another entity[.]
Willfulness is shown when it is demonstrated that the debtor either had a desire to cause the consequences of his act, or believed that injury was substantially certain to result from his conduct. Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 464 (6th Cir. 1999). See also Petralia v. Jercich (In re Jercich), 238 F.3d 1202, 1208 (9th Cir. 2001). The focus is on the debtor's state of mind. The fact that the debtor should have known the consequences of his actions is not sufficient to satisfy the requirement of willfulness. Markowitz, 190 F.3d at 465 n. 10. Similarly, damages arising from conduct which is reckless or negligent do not fall within the parameters of § 523(a)(6). Kawaauhau, 523 U.S. at 59.
Maliciousness is "conscious disregard of one's duties or without just cause or excuse." Wheeler v. Laudani, 783 F.2d 610, 615 (6th Cir. 1986); Cash Am. Fin. Servs. v. Fox (In re Fox), 370 B.R. 104, 119 (B.A.P. 6th Cir. 2007). Maliciousness does not "require ill-will or specific intent to do harm." Wheeler, 783 F. 2d at 615; Fox, 370 B.R. at 119.
III. The Motion for Judgment on the Pleadings
A. STANDARD OF REVIEW
The first prong of Debtor's Motion seeks judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) . Rule 12(c) provides simply that after the pleadings are closed, a party may move for judgment on the pleadings. A motion for judgment on the pleadings made pursuant to Rule 12(c) is considered under the same standard as a motion to dismiss a complaint: the Court "construes the complaint in a light most favorable to the plaintiff, accepts all factual allegations as true, and determines whether the complaint states a plausible claim for relief." HDC, LLC v. Ann Arbor, 675 F.3d 608, 611 (6th Cir. 2012) (citations omitted). However, the court is not required to accept legal conclusions or unwarranted factual inferences as true. Id.; see also Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 173 L. Ed.2d 868, 884 (2009). This is so even if the legal conclusions are "cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994) (deciding a motion to dismiss).
Fed. R. Civ. P. 12(b)-(I) applies in adversary proceedings commenced in bankruptcy court. Fed. R. Bankr. P. 7012(b).
This being the case, decisional law construing or applying the standards for a motion to dismiss are relevant and persuasive in analyzing a motion for judgment on the pleadings.
A complaint can survive a motion for judgment on the pleadings only if it contains sufficient factual matter to state a claim to relief that is "plausible on its face." This does not mean that the complaint must plead the elements of a cause of action. Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 510-12, 122 S. Ct. 992, 152 L. Ed. 2d 1 (2002) (deciding a motion to dismiss). On the other hand, it requires more than "an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949 (citation omitted). Construing Fed. R. Civ. P. 8, the Supreme Court in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) explained that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do . . . . Factual allegations must be enough to raise a right to relief above the speculative level . . . ." Id. at 1964-65 (internal citations omitted). A claim is plausible on its face if the complaint contains factual allegations sufficient to "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." HDC, 675 F.3d at 611; see also Twombly, 127 S. Ct. at 1964-65. "[T]he allegations in the complaint must permit the court to infer more than the mere possibility of misconduct, namely, that the pleader has show[n] entitlement to relief." Ctr. for Bio-Ethical Reform, Inc. v. Napolitano, 648 F.3d 365, 369 (6th Cir. 2011) (citations and internal quotation marks omitted); see HDC, 675 F.3d at 612-13.
Fed. R. Bankr. P. 7008 provides that Fed. R. Civ. P. 8 applies in adversary proceedings. Rule 8 provides that "A pleading that states a claim for relief must contain . . . (2) a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a).
B. ANALYSIS
Debtor's Motion for Judgment on the Pleadings describes the standards to be applied by the Court for judgment on the pleadings but fails to illustrate why the motion should be granted. Rather, the Motion launches into a description of various magistrates' decisions rendered in the State Court and recites facts not alleged in the Complaint, such as Debtor's "simple knowledge that if her dogs got loose (which she did not willfully intend nor desire). . ." and Debtor's "inability to keep her tiny dogs confined to her patio . . . ." Rule 12(d) provides that, "[if], on a motion under Rule . . . 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." Fed. R. Civ. P. 12(d). It is unclear exactly what is intended by use of the term "matters" and the term is not defined further in the Rule, but inasmuch as Debtor's Motion seeks summary judgment as an alternative to judgment on the pleadings and the Association has also moved for summary judgment, it appears that this is close to the type of procedural situation envisioned by Rule 12(d). Therefore, in the interest of judicial economy, it makes sense to deny Debtor's Motion for judgment on the pleadings in favor of considering the motions for summary judgment.
IV. The Motion for Summary Judgment
A. STANDARD OF REVIEW
Rule 56 of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056, provides that the Court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A party seeking summary judgment must illustrate that the facts are not genuinely disputed by pointing to "particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials[.]" Fed. R. Civ. P. 56(c)(1). The party seeking summary judgment bears the initial burden of "informing the . . . court of the basis for its motion, and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). See also Fed. R. Civ. P. 56(c)(3). The Court must deem as true the nonmovant's evidence and must view all justifiable inferences in a light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Anderson, 477 U.S. at 255.
B. ANALYSIS
The Court reviewed Debtor's Motion and the record, and found that there are no affidavits, depositions, answers to interrogatories or other evidence in the record other than copies of the various State Court orders, which are attached to Plaintiff's MSJ. Nonetheless, the Motion recites facts not evident in the record. While affidavits (or other specific types of evidence) are not required by Rule 56, something more than the movant's unsupported statements is required. As stated by Fed. R. Civ. P. 56: "A party asserting that a fact cannot be . . . genuinely disputed must support the assertion by: (A) citing to particular parts of material in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Debtor refers to the State Court's decisions, observing that there was no finding by the State Court that Debtor willfully or maliciously caused injury to the Association. But nor is there any specific finding by the State Court that she didn't cause a willful or malicious injury. And that is what the record must reflect in order to grant summary judgment to Debtor.
Plaintiff's Complaint recites facts sufficient to withstand a motion to dismiss, and Debtor's Answer admits quite a few of the facts. But the Answer denies material facts asserting conduct which may be potentially willful and malicious. If Debtor asserts that her conduct is not willful and malicious, she must submit evidence to support that assertion illustrating that it is not genuinely disputed. She did not do so. Additionally, facts recited by the Motion which are not alleged in the Complaint (including but not limited to those quoted above), have not been established by the record, or by affidavit or other evidence submitted with the Motion.
The party seeking summary judgment bears the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the record and materials which demonstrate the absence of a genuine issue of material fact and/or support for the position advanced by the motion. Celotex Corp. v. Catrett, 477 U.S. 317, 323, l06 S.Ct. 2548 (l986). See Fed. R. Civ. P. 56(c)(1); 11 MOORE'S FEDERAL PRACTICE ¶ 56.22[1] (3d ed. 2014). Debtor's Motion fails to do this, and therefore, must be denied.
V. Conclusion
In light of the foregoing, it is ORDERED and ADJUDGED that the Dispositive Motion of Defendant for Judgment on the Pleadings or in the Alternative Summary Judgment (Doc. #18) is hereby DENIED.
This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
/s/ _________
C. Kathryn Preston
United States Bankruptcy Judge
Dated: September 30, 2015
IT IS SO ORDERED.Copies to: Attorney for Plaintiff, Magdalena Myers (via CM/ECF Electronic Service) Attorney for Defendant, Nicole Marie Churchill (via CM/ECF Electronic Service)