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Haas v. Fancher

United States District Court, M.D. Alabama, Eastern Division

July 24, 2019

PATRICK ELDON HAAS, Plaintiff/Creditor/Appellant,
v.
DEBORAH KAY FANCHER, Defendant/Debtor/Appellee.

          MEMORANDUM OPINION AND ORDER

          ANDREW L. BRASHER UNITED STATES DISTRICT JUDGE.

         This matter comes to the Court on appeal from the Bankruptcy Court's Rule 7058 Judgment holding that Deborah Fancher's (“Debtor”) $200, 577.69 debt to Patrick Haas (“Creditor”) is dischargeable in Debtor's Chapter 7 bankruptcy.

         Creditor argues that the Bankruptcy Court should be reversed for four reasons. First, Creditor argues that the Bankruptcy Court abused its discretion in reconsidering a previous order that had deemed Creditor's requests for admission to be admitted. Second, Creditor argues that the Bankruptcy Court abused its discretion when it declined to strike Debtor's opposition to Creditor's motion for summary judgment for failing to cite to the record. Third, based on these arguments about the admissions and opposition filing, Creditor argues that the Bankruptcy Court should have entered summary judgment in his favor. Finally, Creditor argues that the Bankruptcy Court erred in determining that he had not met his burden to establish the non-dischargeability of the debt at trial. The Court concludes that none of these arguments have merit.

         Background

         The following facts are taken from the Bankruptcy Court's Findings. See Doc. 6-34.

         Debtor and Creditor were in a romantic relationship from 2000 to 2010 and lived together in the Debtor's house in Oregon. On Christmas Day, 2010, their relationship ended poorly after a heated argument that turned physical. Creditor left the house with as much of his stuff as he could fit in a suitcase. Debtor obtained a restraining order by December 28.

         About two months after the fight, Creditor and Debtor appeared for a hearing on the restraining order. The court modified the order to allow Creditor to visit the house that he and Debtor had once shared so that he could retrieve more personal items, including his toolbox and tools. Creditor was a heavy equipment mechanic, his tools were expensive, and they were a key part of practicing his trade.

         About a month after the court modified the restraining order, Creditor went to the house with a police officer to collect his things. Because Debtor was not there, they left and came back the next day. When they returned, they were met by Debtor's son-in-law who gave Creditor a small box of his belongings, but no tools. Creditor looked inside the garage where he believed he left his tools, but they were not there. When Creditor attempted to look for his tools further, a fight broke out with the son-in-law, and the police officer canceled the visit.

         In 2012, Creditor sued Debtor in state court for taking his tools. Debtor did not defend the suit, and Creditor obtained a default judgment in 2014 in the amount of $200, 577.69 plus nine percent interest.

         In 2017, Debtor filed for Chapter 7 bankruptcy because of this judgment. Creditor filed an adversary proceeding in the bankruptcy, arguing that the debt is not dischargeable under 11 U.S.C. § 523(a)(6). See Doc. 6-2. That section states that a debt is not dischargeable in bankruptcy if the debt is 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).

         For purposes of this appeal, three important things happened in the litigation.

         First, Creditor served requests for admission on Debtor to which Debtor did not respond within 30 days as required under Rule 36(a) of the Rules of Federal Procedure. When Debtor did not respond, Creditor quickly moved the Bankruptcy Court for an order declaring the requests to be admitted by operation of law (Doc. 6-8), which the Court granted (Doc. 6-10).

         Second, after Creditor filed for summary judgment based largely on the admissions, see Docs. 6-12 & 6-13, Debtor did not respond substantively to the motion. Instead, Debtor asked the Bankruptcy Court to reconsider its ruling on the requests for admission. Debtor explained that Creditor had filed his request for the admissions to be deemed admitted shortly before Debtor's deposition and, at that deposition, Debtor had (1) provided discovery responses and (2) denied the requests for admission under oath as part of her sworn testimony. See Doc. 6-14. The Bankruptcy Court granted the motion to reconsider (Doc. 6-16) and gave Debtor more time to respond to the motion for summary judgment. Creditor moved to strike Debtor's opposition for failing to support her statements with citations to record evidence. The Bankruptcy Court denied the motion to strike and denied summary judgment. (Doc. 6-21).

         Third, the Bankruptcy Court held a bench trial. (Doc. 6-33). Creditor explained the importance of his tools, testified that they were last stored at Debtor's house, and introduced two emails-one ostensibly from Debtor and another ostensibly from her daughter-in which Debtor and her daughter threatened to sell his tools. Debtor testified that she did not sell Creditor's tools, did not send the email at issue, and did not appear to defend the state court lawsuit because it ...


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