Stephen Raslavich, United States Bankruptcy Judge.
On February 4, 2015 this Court entered a bench order granting Debtor's Motion for Summary Judgment. The effect of that order was to dismiss this adversary proceeding against him.
The Plaintiffs filed this adversary proceeding against the Debtor seeking to have their claims against him excepted from his discharge. The Debtor filed an Answer to the Complaint opposing the relief. The pleadings having been closed, the Court entered a Pre-Trial Order which governed discovery and pretrial motions.
During the pre-trial phase of this litigation, the Debtor propounded discovery upon the Plaintiffs. That discovery consisted of a set of interrogatories, a request for production of documents, and a request for admissions. The Plaintiffs do not appear to have propounded discovery of their own but instead moved directly for summary judgment. The Debtor responded to the Plaintiffs' Motion and indicated an intention to file his own summary judgment request; however, Debtor planned to base his motion on evidence obtained in discovery. The discovery requests served upon the Plaintiff remained unanswered, however, and so the Debtor sought an extension of the discovery deadline set forth in the Pre-Trial Order. The Court granted that
On January 7, 2015, the Court convened a Pre Trial conference. The Court's purpose in scheduling that conference was two-fold. First, it was the Court's intention to inform the parties that given the differences in factual allegations, the matter was not well-suited for summary judgment. That discussion, however, could not occur because the Plaintiffs' counsel, without explanation, failed to appear. The other reason for the conference was to address the Debtor's Motion to Compel. Because that motion had never been opposed, the Court granted it.
On February 4, 2015 the Court heard argument on the two summary judgment motions. This time counsel for both parties appeared, however, the attorney appearing on behalf of the Plaintiffs (Mr. Santoro) informed the Court that he himself was not counsel of record. He stated that he was the law partner of the counsel of record (Mr. Bresset) who was out of the country at the time. When asked why no one had appeared for the Plaintiffs at the January 7, 2015 hearing, Mr. Santoro stated that he knew nothing about any prior hearing, or, for that matter, any unanswered discovery requests. The Court explained to Mr. Santoro that although counsel's absence at the prior hearing had prevented it from explaining to Plaintiffs that the case seemed problematic for purposes of summary judgment, the factual lay of the land had by now changed: in specific, the Debtor had propounded requests for admissions of material facts as to which no timely response was made. Because a failure to respond to an admission request is deemed to constitute an admission, the record was now, in fact, amenable to summary judgment. After hearing the arguments from both sides, the Court entered judgment against the Plaintiffs and dismissed their complaint. On February 18, 2015, the Plaintiffs filed two notices of appeal. Five days after that, they filed an amended notice of appeal. What follows are finding of facts and conclusions of law to amplify the Court's ruling.
Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure
The court's role in deciding a motion for summary judgment is not to weigh evidence, but rather to determine whether the evidence presented points to a disagreement that must be decided at trial, or whether the undisputed facts are so one sided that one party must prevail as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 249-250, 106 S.Ct. at 2511-12. In making this determination, the court must consider all of the evidence presented, drawing all reasonable inferences therefrom in the light most favorable to the nonmoving party, and against
To successfully oppose entry of summary judgment, the nonmoving party may not simply rest on its pleadings, but must designate specific factual averments through the use of affidavits or other permissible evidentiary material that demonstrate a triable factual dispute. Celotex Corp. v. Catrett, 477 U.S. at 324, 106 S.Ct. at 2553. Such evidence must be sufficient to support a jury's factual determination in favor of the nonmoving party. Anderson, supra, 477 U.S. at 250, 106 S.Ct. at 2511. Evidence that merely raises some metaphysical doubt regarding the validity of a material fact is insufficient to satisfy the nonmoving party's burden. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). If the nonmoving party fails to adduce sufficient evidence in connection with an essential element of the case for which it bears the burden of proof at trial, the moving party is entitled to entry of summary judgment in its favor as a matter of law. Celotex Corp. v. Catrett, 477 U.S. at 322-23, 106 S.Ct. at 2552-53.
The Debtor's argument is based on his request for an admission as to his mental state at the time of the injury suffered by Plaintiffs. His requests for admissions specifically asked Plaintiffs to admit, inter alia, that Debtor lacked the requisite intent to establish willful and malicious injury on his part. Neither that request, nor any other, was ever timely responded to. As a result, says Debtor, the request is deemed to be admitted. In turn, argues the Debtor, this establishes that the Plaintiffs cannot prove a non-dischargeability claim under § 523(a)(6).
Plaintiffs' rejoinder is likewise predicated on a rule of procedure. But instead of relying on a specific rule, they ask the Court to invoke common law rules of preclusion. They maintain that a prior state court judgment entered in their favor and against the Debtor bars him from contesting their dischargeability claim. Plaintiffs are relying not on the judgment itself, but on certain "findings" made by the state court in support of that judgment. Those findings, they assert, prove the cause of action for non-dischargeability of a debt caused by willful and malicious injury. In short, Plaintiffs ask this Court to estop the Debtor from disputing the allegation that he possessed the intent to harm.
Because the prior ruling was made by a state court and was based on state common law, the law of that forum is controlling here. Paramount Aviation Corp. v. Agusta, 178 F.3d 132, 145 (3d Cir.1999) (restating the general federal rule that the preclusive effects of prior cases are determined by the law of the prior forum). Plaintiffs' motion seeks to invoke collateral estoppel. In Pennsylvania, the following elements must be present for collateral estoppel to apply:
Cromartie v. Pennsylvania Bd. of Prob. & Parole, 680 A.2d 1191, 1197 n. 12 (Pa. Cmwlth.1996). The trial court has broad discretion to determine if collateral estoppel should apply. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 329, 99 S.Ct. 645, 651, 58 L.Ed.2d 552 (1979)
Both the state law action and this adversary proceeding plead a cause of action for an intentional tort. The state law complaint pleads assault and battery, while this action alleges willful and malicious injury. The former is more specific than the latter; even so both involved the same state of mind, i.e., scienter. The issue which was before the state court is sufficiently similar to that which is before this court now.
Finding the second and third elements to also be established, what remains is the last element: whether the Debtor had a "full and fair opportunity to have litigated the question." As the Pennsylvania Supreme Court has explained:
Frog, Switch & Mrg. Co. v. Penn. Human Relations Comm'n, 885 A.2d 655, 661 (Pa. Cmwlth.2005) citing Pilgrim Food Products Company v. Filler Products, Inc., 393 Pa. 418, 422, 143 A.2d 47, 49 (1958) (emphasis added.) See also Schubach v. Silver, 461 Pa. 366, 377, 336 A.2d 328, 334 (1975) (stating that "for the doctrine of collateral estoppel to apply it must appear that the fact or facts at issue in both instances were identical; that these facts were essential to the first judgment and were actually litigated in the first cause.") (emphasis added); see also Restatement (Second) Judgments § 27 ("When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.") (emphasis added.)
What constitutes an opportunity to litigate is not always clear. Here, the judgment is based on findings, but those findings are set forth not in a written opinion, they consist, instead, of a brief order with footnotes. The weight to accord such "findings" presents an issue. In such situations, courts have employed either of two methodologies:
In re Kates, 485 B.R. 86, 102-103 (Bkrtcy. E.D.Pa.2012) (citations omitted).
In the instant case, the Court is confronted with a record which more clearly invites resort to the second methodology. The state court judgment, while sparse, was entered by the trial court judge and contains certain findings. In particular, the court based its award of punitive damages on a finding that the Debtor's conduct was "outrageous." Plaintiffs maintain that a finding of outrageousness is no different from the willfulness and maliciousness requirement of Code § 523(a)(6). As a result, they conclude, the Debtor is precluded from denying that his conduct was willful and malicious in this proceeding.
However, whether or not the two states of mind are the same, the Court is not persuaded that this "finding" of outrageousness constitutes "actual litigation" of that question. While that finding was apparently based on the Plaintiffs' testimony, only the Plaintiffs presented a case, and while the state court deemed the testimony credible, the testimony was never tested by cross examination. See In re Hashem, 2000 WL 1480274, at *5 (Bkrtcy. E.D.Pa. Sept. 29, 2000) (deeming cross examination of the relevant evidence to constitute actual litigation of that same issue). Moreover, the Debtor's failure to appear at the bench hearing does not appear to have been motivated by negligence or bad faith. See In re Docteroff, 133 F.3d 210, 215 (3d Cir.1997) (applying collateral estoppel to preclude debtor from disputing fraud claim notwithstanding that prior action resulted in default judgment where debtor engaged in bad faith, obstructionist discovery tactics) The Debtor maintains that he did not answer the complaint or appear at the trial because his former employer assured him that insurance would cover the claims against the Debtor. See Defendant's Brief in Response to Motion for Summary Judgment, 2. Importantly, there is no indication that the Debtor possessed the legal sophistication to know whether the employer's representation should have been relied on. When it appeared to him that that his employer's representation that insurance would protect the Debtor was not true, the Debtor retained counsel and began defending himself. The issue of "willfulness" can hardly be said to have been actually litigated in state court. To the contrary, while the hearing may not have resulted in a default judgment as a matter of law, it did for all practical purposes. Put differently, the state court hearing clearly lacked the hallmarks of an adversarial dispute sufficient to allow the inference that the pivotal question was "actually" litigated.
Even assuming that the question of the Debtor's state of mind had been contested, however, there are exceptions to the doctrine of collateral estoppel. On this
Rest. Second Judgments § 28(5)(c) (emphasis added).
Having concluded that the record does not preclude the Debtor's right to defend himself, the Court turns to Debtor's argument that the Plaintiffs cannot establish willful or malicious injury on his part. That is the premise of the Debtor's summary judgment request. That motion is based on evidence obtained in discovery. Specifically, it relies on requests for admissions as to certain elements of Plaintiffs' case. Those requests were not timely answered, denied, or otherwise responded to. As a result, concludes Debtor, the matter to which the requests for admissions were made now constitutes facts in the record. Those facts, says the Debtor, are dispositive as to the Plaintiffs' inability to prove a prima facie case for willful and malicious injury.
Rule 36 of the Federal Rules of Civil Procedure
F.R.C.P. 36(a). The purpose of Rule 36(a) is to narrow the issues for trial to those which are genuinely contested. United Coal Companies v. Powell Const. Co., 839 F.2d 958, 967 (3d Cir.1988). Rule 36 is not a discovery device, but rather "a procedure for obtaining admissions for the record of facts already known." Ghazerian v. U.S., 1991 WL 30746, at *1 (E.D.Pa. Mar. 5, 1991) (citations omitted).
As to the substance of a request to be admitted, the request must pertain to facts or the law as it applies to the facts of the case. In this district, requests for admissions "are not objectionable even if they require opinions or conclusions of law, as long as the legal conclusions relate to the facts of the case." First Options of Chicago, Inc. v. Wallenstein, No. 92-5770, 1996 WL 729816, at *3 (E.D.Pa. Dec. 17, 1996) (citations omitted). That position has been slightly altered to provide that Requests for Admission calling for conclusions of law and relating to facts of the case are "properly objectionable" when they call "for a conclusion of one of the ultimate issues in the case." Ghazerian, supra, at *2. "It would be inappropriate for a party to demand that the opposing party ratify legal conclusions that the requesting party has simply attached to operative facts." Disability Rights Council of Greater Washington v. Washington Metropolitan Area Transit Auth., 234 F.R.D. 1, 3 (D.D.C.2006) (citations omitted).
Below are the six requests for admission which the Debtor propounded upon the Plaintiffs:
See Defendant's Motion for Summary Judgment, Ex. A, Request for Admissions.
The first three requests involve straightforward factual allegations: that the Debtor never possessed a firearm at the time of the incident; that the Plaintiffs
The fourth request is somewhat unclear. It does not request that a fact be admitted; rather, it asks that Plaintiffs confirm their legal theory. That is, that the Debtor willfully and maliciously harmed them. The reason for this request can be discerned after reading the complaint. While physical injury is alleged therein, the complaint nowhere alleges that the debtor "willfully and maliciously" inflicted that injury upon the Plaintiffs. The request does little more than seek to clarify the cause of action. In any event, the request is redundant and did not figure into the Court's ruling.
Requests ## 5 and 6, on the other hand, are problematic. No. 5 is stated in the subjunctive: that if the Debtor did not willfully and maliciously injure the Plaintiffs, then their claim must be discharged. This is the most conclusory of admissions. It does not ask for any admission as to facts in dispute. Similarly, Request # 6 asks Plaintiffs to admit that collateral estoppel does not apply to the Debtor's denial of the allegation as to his mental state. On the surface this might appear to be no more than applying the law to the facts; but really it is not. Rather, and this is much like Request # 5, the Debtor would have the Plaintiff admit that as a matter of law judgment must be entered in the Debtor's favor. Both requests are improperly made. Thus, of the 6 requests for admissions propounded by Debtor, only the first three go to establish facts upon which the Court may rely in ruling on the Debtor's motion.
Having found that the Debtor propounded three requests which may be considered, the Court turns to whether Plaintiffs responded to such requests. The rule prescribes the time by which a response a request for admission must be served:
F.R.C.P. 36(a)(3).
The Plaintiffs here did not respond to the Request for Admissions within 30 days from the date of service, offered no explanation as to why they did not respond, sought no relief from the time limit, failed to appear at the January 7, 2015 hearing, and then apparently proceeded to serve a belated reply without permission on January 14, 2015. The Debtor contends that all of this leads to an admission of the fact alleged. The Court agrees. Subsection (b) of the rule confirms this:
F.R.C.P. 36(b) (emphasis added). The Third Circuit has held that deemed admissions "are sufficient to support orders of
Subsection § 523(a)(6) provides that "[a] discharge under section 727... of this title does not discharge an individual debtor from any debt — ... for willful and malicious injury by the debtor to another entity or to the property of another entity." 11 U.S.C. § 523(a)(6). This type of claim "generally relates to torts and not to contracts." 4 Collier on Bankruptcy, ¶ 523.12[1]. By its terms, it may apply to a broad range of harmful conduct. Id. To fall within this exception, the injury must have been both willful and malicious. Id. ¶ 523.12[2]. The term "willful" refers to a deliberate or intentional injury, not just a deliberate or intentional act that leads to injury. In re Coley, 433 B.R. 476, 497 (Bkrtcy.E.D.Pa.2010) (citing Kawaauhau v. Geiger, 523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998)). The plaintiff must establish that the debtor "purposefully inflict[ed] the injury or act[ed] in such a manner that he is substantially certain that injury will result." In re Conte, 33 F.3d 303, 305 (3d Cir.1994). "Malice" refers to actions that are wrongful and without just cause or excuse, even in the absence of personal hatred, spite or ill-will. 4 Collier, supra ¶ 523.12[2]; see also In re Wooten, 423 B.R. 108, 130 (Bkrtcy.E.D.Va.2010) (explaining that malice does not mean the same thing for nondischargeability purposes under § 523(a)(6) as it does in contexts outside of bankruptcy: "In bankruptcy, debtor may act with malice without bearing any subjective ill will toward plaintiff creditor or any specific intent to injure same.")
This Code section requires, above all else, a particular state of mind. The Debtor must have acted with the specific purpose of harming the creditor. It must also have been done without justification. Given that Plaintiffs are deemed to have been admitted that they have no evidence as to the Debtor's state of mind when they suffered their injuries, it is perforce impossible for them to establish that the Debtor acted with the requisite state of mind. Accordingly, their request to except their claim from discharge must be denied.
Because the Court does not find that the prior state court ruling is entitled to preclusive effect, the Plaintiffs' Motion for Summary Judgment is denied. Conversely, the Plaintiffs' failure to have responded to the Debtor's Requests for Admission under the circumstances presented furnishes a sufficient evidentiary basis to hold that Plaintiff cannot prove a non-dischargeability claim against the Debtor under Bankruptcy Code § 523(a)(6). Accordingly, the Debtor's Motion for Summary Judgment is granted.
