BRUCE A. HARWOOD, Bankruptcy Judge.
For the second time, the plaintiff's Motion for Summary Judgment (Doc. 11)
This Court has authority to exercise jurisdiction over the subject matter and the parties pursuant to 28 U.S.C. §§ 1334, 157(a), and U.S. District Court for the District of New Hampshire Local Rule 77.4(a). This is a core proceeding in accordance with 28 U.S.C. § 157(b).
This bankruptcy case and adversary proceeding have a complex, dense procedural history. The Court will begin with the events following the entry of its December 31, 2013 Order Denying Motion for Summary Judgment (Doc. 21). The Court's memorandum opinion,
In response to the Court's ruling, the Plaintiff filed her Motion for Retroactive Relief from the Automatic Stay in the main bankruptcy case. Bk. No. 11-11833-BAH (Doc. 109). The purpose of that motion was to validate the state court orders, notwithstanding the automatic stay. At the hearing on the motion for retroactive relief, the Court recognized that the state court order of March 12, 2012 (the "Liability Order") (Pl. Ex. 1) had not entered in violation of the automatic stay—reversing that portion of its ruling in
After ruling on the motion for retroactive relief, the Court invited the Plaintiff to renew the Motion (i.e. the motion for summary judgment that it had denied in
The facts in the summary judgment record are wholly undisputed. The following factual summary is drawn from the Plaintiff's statement of material facts and supporting exhibits, including the Liability Order, which the Debtor did not supplement or otherwise dispute.
During the summer of 2011, the Plaintiff was the Debtor's tenant, residing at 22 Ash Street, Hollis, New Hampshire. In July 2011, the Plaintiff was away on business for her employer. For reasons that are not in the record, the Debtor removed the Plaintiff's belongings from her apartment and "dumped" them in a barn at the farm where the Plaintiff was employed. Ruma Affidavit, Pl. Ex. 2. The Debtor then changed the locks, making it impossible for the Plaintiff to get back into her apartment.
The Plaintiff's employer discovered the items where the Debtor had deserted them, including the Plaintiff's laptop computer and clothing in garbage bags. The employer contacted the police who in turn sent an officer to interview the Debtor at the Plaintiff's apartment. Initially, the Debtor claimed not to know the Plaintiff and denied all knowledge of the situation, maintaining that he had found the Plaintiff's personal property in a shed outside the building where the Plaintiff's apartment was located. Later in the interview the Debtor indicated that he actually did know the Plaintiff, despite his earlier statements.
The Plaintiff first became aware of this situation when she arrived home from the business trip and found that she was unable to get into her apartment. The Debtor had given her no prior warning that he was going to remove her belongings from the premises and change the locks. The Plaintiff also realized that the Debtor had not brought all of her belongings to the barn; some items were simply missing.
On July 28, 2011, the state court issued a temporary restraining order requiring that the Debtor immediately allow the Plaintiff possession of her apartment and return any of her personal property in his possession. July 28, 2011 Order, Pl. Ex. 7. On October 18, 2011, the state court held a hearing to determine whether the Debtor had violated RSA 540-A, the New Hampshire wrongful eviction statute. At the hearing, the Plaintiff and Debtor were each represented by counsel and each testified. The court found that the Debtor's testimony "lacked even a modicum of credibility" and made the following findings: (1) During July 2011 the Plaintiff was the Debtor's tenant; (2) The Plaintiff was current on rent
Subsequently, on April 26, 2012, the state court issued the Damages Order finding that the Debtor's conduct, as established in the Liability Order, entitled the Plaintiff to $91,000 in damages, plus attorney's fees and costs, under RSA 540-A. In the Fee Order dated May 17, 2012, the state court approved the Plaintiff's attorney's fees and costs in the amount of $14,674.92.
The Plaintiff contends that issue preclusion, based on the facts found in the Liability Order, Damages Order, and Fee Order, provides the necessary evidence to establish that the debts in the Damages and Fee Orders are nondischargeable as the consequence of a willful and malicious injury inflicted on the Plaintiff and her property by the Debtor. To the extent that issue preclusion does not establish nondischargeability, the Plaintiff argues the undisputed facts in the summary judgment record are sufficient to establish every essential element of her claim.
The Debtor argues that issue preclusion is inapplicable on the facts before the Court. Specifically, the Debtor argues that the statutory damages were not caused by the injury complained of, namely the wrongful eviction. In the event the Court should decide that issue preclusion applies, the Debtor argues that the facts established are insufficient to render the state court damages nondischargeable. To this end, the Debtor homes in on what he deems to be a lack of evidence to support a finding of maliciousness.
Summary judgment is appropriate when "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). "Genuine issues of fact are those that a factfinder could resolve in favor of the nonmovant, while material facts are those whose `existence or nonexistence has the potential to change the outcome of the suit.'"
"[T]he inquiry involved in a ruling on a motion for summary judgment . . . necessarily implicates the substantive evidentiary standard of proof that would apply at the trial on the merits."
In general, a federal court applies state law to determine whether facts found or issues determined in a state court ought to be accorded preclusive effect in a subsequent federal case.
Section 523(a)(6) provides that "[a] discharge under section 727 . . . 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). Restated, a debt is nondischargeable under this section when a creditor proves that (1) the debtor caused him or her injury, (2) the debtor's actions were willful, and (3) the debtor's actions were malicious. An injury is caused maliciously when "it was wrongful and without just cause or excuse, even in the absence of personal hatred, spite or ill-will . . . . The injury must have been committed in conscious disregard of one's duties."
This is not the first time this Court has addressed nondischargeability under section 523(a)(6) in the context of a wrongful eviction pursuant to RSA 540-A. Indeed, this Court has specifically addressed whether a New Hampshire state court's finding of liability and damages under RSA 540-A can be afforded preclusive effect in the context of a nondischargeability action for willful and malicious injury. In
The
Here, the situation is very similar to that in
The Court does not find that issue preclusion satisfies the "malice" prong. Finding that the Debtor evicted the Plaintiff willfully was all that the state court was required to do to find liability under RSA 540-A. The finding of malice—if it was made—was not essential to the judgment.
Here, the facts make it clear that the Debtor injured the Plaintiff in conscious disregard of his duties. The Liability Order and the Debtor's own statements demonstrate that the Debtor was aware that the Plaintiff was his tenant. By locking the Debtor out of her apartment and displacing her belongings, the Debtor deprived the Plaintiff of the benefit of her lease. No trier of fact could help but find, by a preponderance of the evidence, that the Debtor knew his actions were wrongful. He attempted to conceal the fact that the Plaintiff was his tenant from the police and that he had removed the personal property from her rooms. It is not reasonable to infer any other conclusion from the facts in the summary judgment record. The Debtor was unambiguously on notice that his actions were wrongful after the state court entered its temporary restraining order directing him to allow the Plaintiff access to the apartment and to return her personal property. The state court specifically found that the Plaintiff had not complied with that restraining order when it issued the Liability Order. Further, the Debtor has not put any evidence into the record that would tend to excuse his conduct.
The Debtor has argued that the statutory damages under RSA 540-A do not follow from this injury. The Court does not accept that argument. This Court has previously found that these statutory damages are nondischargeable in the context of section 523(a)(6).
Accordingly, the Court finds that the Debtor has willfully and maliciously injured the Plaintiff based on the undisputed, material facts in the summary judgment record. The Debtor's debt to the Plaintiff should be excepted from discharge pursuant to section 523(a)(6).
For the reasons set forth above, the Court shall award summary judgment to the Plaintiff. This opinion constitutes the Court's findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052. The Court will issue a separate judgment consistent with this opinion.