BILL PARKER, Bankruptcy Judge.
This matter is before the Court upon hearing of the "Objection to the Proof of Claim of Edwin N. Healey (Claim #2) Filed by the Debtor" (the "Objection") filed by Edwin Peter Healey, the Debtor, on March 21, 2017. The Objection challenges the allowance of a proof of claim filed by Edwin N. Healey, a creditor and party-in-interest in the above-referenced bankruptcy case. Upon conclusion of the hearing, the Court took the matter under advisement. This memorandum of decision disposes of all issues pending before the Court.
Prior to the filing of his bankruptcy petition, the Debtor, Edwin Peter Healey, was a defendant in a lawsuit prosecuted by his father, Edwin N. Healey (the "Claimant" or the "Father"), and pending before the 3rd Judicial District Court in and for Henderson County, Texas under Case No. 2014C-0638 and styled as Edwin N. Healey v. E. Peter Healey and Paul C. Healey (the "State Court Litigation"). The Debtor also prosecuted counterclaims and third-party claims of his own in the State Court Litigation.
Based upon jury findings issued on June 18, 2015, after a multi-day trial, the state court entered a Final Judgment on June 30, 2015, in favor of the Claimant against the Debtor for actual damages in the amount of $243,615.42, statutory damages of $1,000 under the Texas Theft Liability Act, exemplary damages in the amount of $50,000, attorney's fees in the aggregate amount of $107,084.30, contingent attorney's fees in the event of appellate review, and post-judgment interest at 5% per annum (the "State Court Judgment").
On July 23, 2015, 23 days after the entry of the Final Judgment, the Debtor filed a voluntary petition in this Court for relief under Chapter 7 of the Bankruptcy Code.
On the basis of that order, after the denial of certain orders by the trial court, the Debtor proceeded to prosecute an appeal of the State Court Judgment before the Court of Appeals for the Twelfth District of Texas at Tyler (the "Court of Appeals").
On November 18, 2015, Claimant, by and through Elizabeth N. Healey, acting as an authorized agent, filed a proof of claim for $401,699.72, the cumulative amount of awarded damages and attorney's fees in the State Court Judgment excluding the awards of contingent fees and post-judgment interest (the "Father's Claim").
On May 12, 2017, in response to the Debtor's request for a continuance of the hearing to consider his claim objection, the Court raised concerns regarding its judicial power to adjudicate the Debtor's proffered claim objection, particularly in light of the potential applicability of the Rooker-Feldman doctrine, and directing the parties to address those issues and whether dismissal (or denial) of the claims objection was warranted. Upon a further continuance, the Court conducted an initial hearing on July 6, 2017. At the end of that hearing, the Court took the matter under advisement.
The burden of persuasion under the bankruptcy claims procedure always lies with the claimant, who must comply with FED. R. BANKR. P. 3001 by alleging facts in the proof of claim that are sufficient to support the claim.
In this case, the Court finds that claim #2-1 is properly filed and is entitled to prima facie validity. Though the Debtor contends that the Durable Power of Attorney executed by the Father in favor of his sister, Ms. Elizabeth Healey, is invalid based on capacity and undue influence, the effectiveness of the proof of claim is not affected because an authorized agent need not demonstrate the existence of a power of attorney in order to file a proof of claim. FED. R. BANKR. P. 9010(c).
Thus, the burden falls upon the Debtor to present evidence of equal probative force that refutes the claim's legal sufficiency. The Debtor seeks to uphold that burden by contending that the State Court Judgment "is not a final judgment" because of the pendency of an appeal. Placed in the vernacular of bankruptcy claims litigation, the Debtor's claim objection is based upon his contention that, from the enumerated categories of valid grounds for objection in § 502(b), "such claim is unenforceable against the debtor and property of the debtor, under . . . applicable law for a reason other than because such claim is contingent or unmatured." 11 U.S.C. § 502(b)(1). However, the Debtor's legal arguments against the enforceability of the State Court Judgment awarded to the Claimant, and thus the underlying validity of the challenged claim, are patently false and without support under applicable law.
The Debtor's contention that the unsuperseded State Court Judgment is "not a final judgment" because of the pendency of an appeal is refuted by nothing less than the Supreme Court of Texas. After evaluating the policy arguments regarding finality of judgments, the Texas Supreme Court in 1986 stated: "Therefore, we now adopt the rule of the Restatement (Second) of Judgments § 13, and hold that a judgment is final for the purposes of issue and claim preclusion despite the taking of an appeal unless what is called an appeal actually consists of a trial de novo." Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex. 1986). The Supreme Court has recently again confirmed that "[T]o suspend execution of a money judgment on appeal, a judgment debtor must post security as required by Section 52.006 of the Texas Civil Practice and Remedies Code and Rule 24 of the Texas Rules of Appellate Procedure." In re Longview Energy Co., 464 S.W.3d 353, 355 (Tex. 2015)(emphasis added).
If a judgment debtor declines to supersede a final judgment while he pursues an appeal of it, he does so at his own peril. As a final judgment that has not been superseded, the State Court Judgment is enforceable now, absent the Debtor's bankruptcy filing.
Id. at 664 (citations omitted) (emphasis added). Indeed, the Texas Supreme Court has granted mandamus relief on the basis that: "[A] party is entitled to mandamus relief to vacate an order that wrongly denies a prevailing party's attempt to enforce an unsuperseded judgment." In re Crow-Billingsley Air Park, Ltd., 98 S.W.3d 178, 179 (Tex. 2003). As ordered by the Texas Supreme Court in Scurlock Oil, not only is an unsuperseded final judgment enforceable, it is entitled to full res judicata effect. Scurlock Oil, 724 S.W.2d at 6, as recognized in JGM Holdings, L.L.C. v. T-Mobile USA, Inc., 568 F. App'x. 316, 320 (5th Cir. 2014) and Oscar Renda Contracting, Inc. v. H & S Supply Co., Inc., 195 S.W.3d 772, 775-76 (Tex. App.-Waco 2006, pet. denied) [recognizing the Scurlock Oil decision as a "landmark case"].
The United States Supreme Court has instructed that "[c]onsistent with our prior statements regarding creditors' entitlements in bankruptcy, we generally presume that claims enforceable under applicable state law will be allowed in bankruptcy unless they are expressly disallowed." Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 453 (2007) [citing 11 U.S.C. § 502(b)]. In his objection, however, the Debtor is effectively requesting for this Court to take a completely opposite tack — to refuse to recognize (or, in another sense, to refuse enforcement through the payment of . . .) a valid, subsisting, unsuperseded judgment of a Texas district court as the basis for a distribution from a Chapter 7 bankruptcy estate. That fact triggered this Court's inquiry into the applicability of the Rooker-Feldman doctrine.
However, in order to avoid any unnecessary jurisdictional thorns that might otherwise conflict with this Court's core jurisdiction over the claims adjudication process, and notwithstanding the fact that the Debtor's challenge to bar enforcement of the State Court Judgment without the posting of a supersedeas bond may violate res judicata principles, the Court will deny the Debtor's claim objection on substantive, statutory grounds. A close, literal reading of the claim objection reveals that it is not technically seeking to relitigate the state court issues.
The Debtor essentially asks this Court for a stay pending appeal — a stay that is unavailable under state law. Of course, the Debtor offers no jurisprudence in support of his contentions because, as illustrated earlier, Texas jurisprudence is diametrically opposed to the Debtor's position. Indeed, even the Texas Court of Appeals recognized in the related, severed case of the Debtor's brother that "[t]he trial court's judgment against Paul Healey and E. Peter Healey is now a final judgment." Healey v. Healey, 2016 WL 4098750, at *3 (Tex. App.-Tyler, July 29, 2016, pet. denied) (citing TEX. R. CIV. P. 329b(c) and (e) — motion for new trial overruled by operation of law after seventy-five days; judgment final thirty days after motion for new trial overruled).
The State Court Judgment constitutes a final judgment against the Debtor which, without the intervention of a supersedeas bond, is a fully enforceable and executable claim pursuant to Texas law and remains legally binding upon the Debtor in favor of the Claimant. Under those conditions, notwithstanding the pendency of an appeal by the Debtor, such an enforceable claim must be recognized as an allowed claim in a bankruptcy proceeding. In re Casey, 198 B.R. 910, 917-18 (Bankr. S.D. Cal. 1996); In re Daily, 2010 WL 148414, at *2-3 (Bankr. M.D. Tenn. 2010).
This memorandum of decision constitutes the Court's findings of fact and conclusions of law
(emphasis added). The fact that the Debtor has acknowledged the existence, if not the validity, of the State Court Judgment in other pleadings and hearings before this Court and the likelihood that recognition of the State Court Judgment could be granted as an informal proof of claim under applicable jurisprudence also dictates acceptance of the presentation of the proof of claim.