EDWARD ELLINGTON, Bankruptcy Judge.
Michael William Kirtley and Leigh Laney Kirtley (Debtors) filed a petition for relief under Chapter 7 of the Bankruptcy Code on February 23, 2012. The Voluntary Petition (Dkt. #1) states that the nature of the Debtors' debts are primarily business debts.
Also on February 23, 2012, the Debtors filed their Summary of Schedules, Statement of Financial Affairs, and Chapter 7 Statement of Current Monthly Income and Means-Test Calculation (Dkt. #3).
In their Summary of Schedules (Schedules), the Debtors list the following alleged debts:
Shortly after the case was filed, A & M Investments, LLC, Surekha Patel, and Trishan, LLC filed a flurry of motions on March 7, 2012: a motion for a 2004 examination, an objection to exemptions, a motion to determine whether debts are business debts, and a motion for itemization of assets.
On July 3, 2012, A & M Investments, LLC, Surekha Patel, and Trishan, LLC (collectively, A & M) initiated the above-styled adversary proceeding by filing their Complaint Objecting to Discharge Pursuant to 11 U.S.C. § 727 and Dischargeability Pursuant to 11 U.S.C. § 523 (Adv. Dkt. #1) (Complaint). In its Complaint, A & M alleges the following counts:
The Debtors filed their Response to Complaint Objecting to Discharge Pursuant to 11 U.S.C. § 727 and Dischargeability Pursuant to 11 U.S.C. § 523 (Adv. Dkt. #8) (Response to Complaint). In their Response to Complaint, the Debtors deny that A & M is entitled to any of the relief requested in its Complaint.
On February 18, 2013, A & M filed its Motion of Plaintiffs for Summary Judgment (Adv. Dkt. #17) (Motion). The Motion simply states that A & M is entitled to "summary judgment or partial summary judgment on the relief they are requesting."
The Debtors filed their Response to Motion for Summary Judgment (Adv. Dkt. #22) (Response) and Memorandum in Support of Response to Motion for Summary Judgment (Adv. Dkt. #23) (Debtors' Brief) on April 18, 2013. The Debtors allege that there are material facts in dispute, and therefore, A & M is not entitled to summary judgment on Counts 1, 2, 3, and 4.
A & M filed its Plaintiffs' Rebuttal Memorandum in Support of Motion for Summary Judgment (Adv. Dkt. #24) (Rebuttal Brief) on April 25, 2013. The Court then took the matter under advisement.
This Court has jurisdiction of the subject matter and of the parties to this proceeding pursuant to 28 U.S.C. § 1334 and 28 U.S.C. § 157. This is a core proceeding as defined in 28 U.S.C. § 157(b)(1) and (2)(I).
Rule 56 of the Federal Rules of Civil Procedure,
"The moving party bears the burden of showing the . . . court that there is an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L. Ed. 2d 265 (1986)." Hart v. Hairston, 343 F.3d 762, 764 (5th Cir. 2003).
Once a motion for summary judgment is pled and properly supported, the burden shifts to the non-moving party to prove that there are genuine disputes as to material facts by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, . . . admissions, interrogatory answers, or other materials."
When considering a motion for summary judgment, the court must view the pleadings and evidentiary material, and the reasonable inferences to be drawn therefrom, in the light most favorable to the non-moving party, and the motion should be granted only where there is no genuine issue of material fact. Thatcher v. Brennan, 657 F.Supp. 6, 7 (S.D. Miss. 1986), aff'd, 816 F.2d 675 (5th Cir. 1987)(citing Walker v. U-Haul Co. of Miss., 734 F.2d 1068, 1070-71 (5th Cir. 1984)); See also Matshushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 1356-57, 89 L. Ed. 2d 538, 553 (1986). The court must decide whether "the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2502, 2512, 91 L. Ed. 2d. 202 (1986).
A & M objects to the Debtors' discharge under various subsections of § 727. Section 727 states in pertinent part:
(a) The court shall grant the debtor a discharge, unless—
11 U.S.C. § 727(a).
The objecting party must show by a preponderance of the evidence it has met the grounds for a denial of a debtor's discharge. Grogan v. Garner, 498 U.S. 279, 287, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991); Comerica Bank v. Rajabali (In re Rajabali), 365 B.R. 702, 714 (Bankr. S.D. Tex. 2007); East Central Plan'g & Dev. Dist., Inc. v. Clifford (In re Clifford), No. 0501472EE, 2008 WL 1988714 (Bankr. S.D. Miss. May 2, 2008).
However, Congress limited who may object to a debtor's discharge. "The trustee, a creditor, or the United States trustee may object to the granting of a discharge under subsection (a) of this section." 11 U.S.C. § 727(c)(1). In order for A & M to have standing to object to the Debtors' discharge, therefore, A & M must be a creditor of the Debtors. See Hoffmeister v. Early (In re Early), No. 1051400KMS, 2013 WL 5442775 (Bankr. S.D. Miss. Sept. 30, 2013).
The Bankruptcy Code broadly defines the term creditor as "an entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor." 11 U.S.C. § 101(10)(A). A claim, in turn, is defined as "a right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured." 11 U.S.C. § 101(5). Accordingly, a holder of a claim, even if the claim is disputed, is a creditor and has standing under § 727.
Turning to the Adversary, A & M has not filed a proof of claim in this case. A & M did not attach to its Complaint, to its Motion, to A & M's Brief, or to its Rebuttal Brief a copy of a promissory note, a deed of trust, or any other document to show that it has a claim against the Debtors.
In the Response to Complaint, Mr. Kirtley patently denied that he owed any money to A & M, and although Mrs. Kirtley admitted that A & M loaned her money, she stated that "she cannot sufficiently admit or deny the accuracy of any loan referred to in this proceeding as [A & M] failed to attach any exhibits supporting their claim."
In response to the Debtors' assertions that A & M has failed to submit any proof of its debt, A & M states in its Rebuttal Brief: "Finally, [Debtors] make a peculiar contention that [A & M] failed to provide proof of indebtedness. Perhaps [Debtors] have forgotten, but they listed [A & M] as creditors in their schedules thereby acknowledging an indebtedness to [A & M] and making them parties in interest in this case."
As noted above, the movant has the burden of proving that there is not a genuine dispute as to any material fact and that as a matter of law, the movant is entitled to a judgment.
The Court finds that A & M has totally failed to meet its burden of showing "an absence of evidence to support the [Debtors'] case."
In reaching this finding, the Court rejects A & M's contention that the fact that the Debtors listed A & M as a creditor in their schedules constitutes sufficient proof of the indebtedness owed by the Debtors to A & M. In Stanley v. Vahlsing, (In re Vahlsing), 829 F.2d 565, 567 (5th Cir. 1987), the Court of Appeals for the Fifth Circuit held that the fact that a debtor has listed a creditor in his/her schedules does not by itself establish standing under § 727(c) to pursue an objection to discharge. See Adams Farms v. James (In re James), 166 B.R. 181, 184 (Bankr. M.D. Fla. 1994)("Fifth Circuit concluded that the fact that [a claim] was scheduled by the Debtor does not establish standing to pursue a claim pursuant to § 727(c).").
In order for summary judgment to be entered, the movant bears the burden of showing that there is no genuine dispute as to any material fact. The Court finds that A & M has failed to meet its burden of showing that there is no genuine dispute as to its status as a creditor of the Debtors, and thereby, its standing under § 727(c) to pursue an objection to the Debtors' discharge. Therefore, without reaching the merits of the Motion, the Court finds that summary judgment may not be entered.
A separate judgment consistent with this Opinion will be entered in accordance with Rule 7054 of the Federal Rules of Bankruptcy Procedure.
