U.S. Bankruptcy Court Opinions
IN RE CHAPMAN, (N.D.Ohio 2006) In Re: Iesha T. Chapman,
Chapter 7, Debtor. State Farm Fire & Casualty Company,
Plaintiff, v. Iesha T. Chapman, Defendant. Case No.
05-30629, Adv. Pro. No. 05-3144. United States Bankruptcy
Court, N.D. Ohio, Western Division. March 15, 2006
MEMORANDUM OF DECISION AND ORDER DENYING MOTION FOR
SUMMARY JUDGMENT
MARY WHIPPLE, Bankruptcy Judge
State Farm Fire & Casualty Company (“Plaintiff”) is before
the court on the Plaintiff’s Motion for Summary Judgment
(“Motion”). The Motion asserts that a state court criminal
conviction should be given collateral estoppel effect in
Plaintiff’s dischargeability action against Defendant Iesha
T. Chapman, the Debtor (“Debtor”) in the underlying Chapter
7 bankruptcy case. After Page 2 reviewing the Motion and
supporting brief, the response thereto filed by Debtor,
Plaintiff’s reply, and the criminal judgment upon which the
Motion is based, the court will deny the motion.
MATERIAL FACTS
On July 16, 2003, Debtor was driving a motor vehicle that
struck a pedestrian, Laketisha Floyd, Complaint ¶ 4;
Answer ¶ 4, who was insured by Plaintiff, Complaint
¶ 3, Answer ¶ 1. Debtor was convicted of
attempting to commit felonious assault, in violation of
O.R.C. §§ 2923.02 and 2903.11(A)(1), in
connection with the incident. Debtor alleges that the
conviction was entered by the Lucas County, Ohio Court of
Common Please on January 8, 2004, based on her plea of no
contest.[fn1] On February 13, 2004, Debtor was sentenced to
three years of probation.
On February 1, 2005, Debtor filed a voluntary petition for
relief under Chapter 7 of the Bankruptcy Code. Her schedule
of Creditors Holding Unsecured Nonpriority Claims listed
an unliquidated, disputed debt to Plaintiff in the amount
of $76,000.00. On May 20, 2005, Plaintiff filed the
complaint initiating this adversary proceeding, which
alleged that Debtor acted willfully and maliciously in
injuring Plaintiff’s insured, so that the liability
therefor is nondischargeable under 11 U.S.C. §
523(a)(6). The complaint also alleges that Plaintiff is the
successor in interest to the insured by subrogation to the
extent of $55,000.00.
The only evidence submitted in support of the Motion is a
certified copy of the judgment imposing sentence against
Debtor in the state court criminal prosecution.
LAW AND ANALYSIS
Under Fed.R.Civ.P. 56, made applicable to this proceeding
by Fed.R.Bankr.P. 7056, summary judgment is proper only
where there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c). In reviewing a motion for summary
judgment, however, all inferences “must be viewed in the
light most favorable to the party opposing the motion.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586-88 Page 3 (1986). The party moving for summary
judgment always bears the initial responsibility of
informing the court of the basis for its motion, “and
identifying those portions of `the pleadings, depositions,
answers to interrogatories, and admissions on file,
together with the affidavits if any’ which [it] believes
demonstrate the absence of a genuine issue of material
fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Where the moving party has met its initial burden, the
adverse party “must set forth specific facts showing that
there is a genuine issue for trial.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue for
trial exists if the evidence is such that a reasonable
factfinder could find in favor of the nonmoving party. Id.
Section 523(a)(6) provides that a debt “for willful and
malicious injury by the debtor to another entity or to the
property of another entity” is not dischargeable. 11 U.S.C.
§ 523(a)(6). In order to be entitled to a judgment
that the debt is excepted from discharge, Plaintiff must
prove by a preponderance of the evidence that the injury
from which the debt arises was both willful and malicious.
Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 463
(6th Cir. 1999); J & A Brelage, Inc. v. Jones (In re
Jones), 276 B.R. 797, 801-2 (Bankr. N.D. Ohio 2001). In
Kawaauhau v. Geiger, 523 U.S. 57, 61, 118 S. Ct. 974, 977
(1998), the Supreme Court held that finding
nondischargeability of a debt under § 523(a)(6)
“takes a deliberate or intentional injury, not merely a
deliberate or intentional act that leads to injury.”
Geiger, 523 U.S. at 61. The Supreme Court further stated
that
the (a)(6) formulation triggers in the lawyer’s mind the
category “intentional torts,” as distinguished from
negligent or reckless torts. Intentional torts generally
require that the actor intend “the consequences of an
act,” not simply, “the act itself.”
Geiger, 523 U.S. at 61-62 (alteration in original) (citing
Restatement (Second) of Torts § 8A cmt. a (1964)). A
willful injury occurs when “(i) the actor desired to cause
the consequences of the act or (ii) the actor believed that
the given consequences of his act were substantially
certain to result from the act.” Monsanto Co. v. Trantham
(In re Trantham), 304 B.R. 298, 307 (B.A.P. 6th Cir. 2004)
(citing Markowitz, 190 F.3d at 464). Under §
523(a)(6), “`malicious’ means in conscious disregard of
one’s duties or without just cause or excuse; it does not
require ill-will or specific intent.” Id. (citing Wheeler
v. Laudani, 783 F.2d 610, 615 (6th Cir. 1986).
Plaintiff has not shown that Debtor’s criminal conviction
establishes the applicability of 11 U.S.C. §
523(a)(6) as a matter of law. The issue of
nondischargeability is a matter of federal law Page 4
governed by the Bankruptcy Code. Grogan v. Garner, 498 U.S.
279, 284, 111 S. Ct. 654, 658-59 (1991). However,
“collateral estoppel principles do indeed apply in
discharge exception proceedings pursuant to §
523(a).” Id. 498 U.S. at 285 n. 11; accord, e.g., Rally
Hill Productions, Inc. v. Bursack (In re Bursack), 65 F.3d
51, 53 (6th Cir. 1995). When a state court enters a
judgment against a debtor prepetition, the bankruptcy court
must give collateral estoppel effect to “those elements of
the claim that are identical to the elements required for
discharge and which were actually litigated and determined
in the prior action.” Grogan, 498 U.S. at 284. The
principles of 28 U.S.C. § 1738, the federal Full
Faith and Credit Act, require federal courts to give a
state court judgment the same preclusive effect as would be
given that judgment under the law of the state in which the
judgment was rendered. Corzin v. Fordu (In re Fordu), 201
F.3d 693, 703 (6th Cir. 1999). “Bankruptcy courts’
exclusive jurisdiction over dischargeability issues does
not alter this rule.” Bursack, 65 F.3d at 53 (quoting Migra
v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81,
104 S. Ct. 892, 896 (1984)). This court must therefore apply
Ohio issue preclusion principles in deciding the Motion.
Under Ohio law, there are four elements of the doctrine of
collateral estoppel, or issue preclusion, which is the
preferred terminology of the Ohio courts: (1) a final
judgment on the merits after a full and fair opportunity to
litigate the issue; (2) the issue was actually and directly
litigated in the prior action and must have been necessary
to the final judgment; (3) the issue in the present suit
must have been identical to the issue in the prior suit;
and (4) the party against whom estoppel is sought was a
party or in privity with the party to the prior action.
Sill v. Sweeney (In re Sweeney), 276 B.R. 186, 189 (6th
Cir. B.A.P. 2002). “Issue preclusion precludes the
relitigation of an issue that has been actually and
necessarily litigated and determined in a prior action.”
MetroHealth Medical Ctr. v. Hoffmann-LaRoche, Inc., 80 Ohio
St. 3d 212, 217, 685 N.E.2d 529, 533 (1997).
Plaintiff argues that the federal trend as well as the law
of many states is to give preclusive effect to criminal
convictions in subsequent civil proceedings. But the law of
Ohio controls in this case, and Ohio courts generally
refuse to give preclusive effect to criminal convictions in
subsequent civil proceedings. Phillips v. Rayburn, 113 Ohio
App. 3d 374, 381-82, 680 N.E.2d 1279 (1996); Manley v.
Rufus Club Mozambique, Inc., 111 Ohio App.3d 260, 263, 675
N.E.2d 1342 (1996); see also Walden v. Ohio, 47 Ohio St. 3d
47, 51-52, 547 N.E.2d 962, 965-66 (1989). As a result
federal courts applying Ohio law under the Full Faith and
Credit Act, including bankruptcy courts in dischargeability
actions, have likewise refused to give preclusive effect to
criminal Page 5 convictions in subsequent civil
proceedings. Culberson v. Doan, 72 F. Supp. 2d 865, 872-73
(S.D. Ohio 1999); Bukowski v. Hall, 165 F. Supp. 2d 674,
678-79 (N.D. Ohio 2001); Breckler v. Martin, 2002 U.S.
Dist. LEXIS 12330 (N.D. Ohio June 10, 2002); Clark v. N.
Am. Science Assocs., Inc. (In re Clark), 222 B.R. 114, 117
(Bankr. N.D. Ohio 1997); Grange Mutual Cas. Co. v. Chapman
(In re Chapman), 228 B.R. 899, 905 (Bankr. N.D. Ohio 1998).
Ohio courts identify two reasons for refusing to give
criminal convictions preclusive effect in subsequent civil
proceedings. These reasons resonate in this case. First,
Ohio courts generally adhere to the mutuality requirement
in applying principles of preclusion. Unless all parties to
the subsequent proceeding were bound by the prior judgment,
collateral estoppel is inappropriate. Goodson v. McDonough
Power Equip., Inc., 2 Ohio St.3d 193, 195, 443 N.E.2d 978,
981 (1983). While the Ohio Supreme Court has made
exceptions to this requirement, it has not been overruled
and there is no basis shown for an exception in this case.
Plaintiff was not a party to or in privity with a party to
the criminal proceeding against Debtor, and would not have
been bound by its outcome had there been a trial and an
acquittal. Phillips, 113 Ohio App. 3d at 380, 680 N.E.2d at
1283; Clark, 222 B.R. at 117; see Manley, 111 Ohio App.3d
at 263, 675 N.E.2d at 1344 (holding that trial court erred
in finding that the plaintiff and the State of Ohio were in
privity for purposes of res judicata). Hence, there is no
mutuality under Ohio law.
Second, even though the burden of proof is higher in
criminal proceedings than in civil proceedings, Ohio courts
find that the many substantive and procedural differences
between civil actions and criminal actions make issue
preclusion inappropriate. Walden, 47 Ohio St.3d 47, 52.
Those differences are of particular concern to this court
in this case where Debtor’s conviction apparently arose
from a plea of no contest and not a trial.
Were Ohio courts generally inclined to afford preclusive
effect to criminal convictions in subsequent civil actions,
two other elements necessary for issue preclusion are still
missing in this action. In the cases cited above, some of
the criminal convictions clearly resulted from a trial, and
Ohio courts and federal courts applying Ohio law still
refused to give them collateral estoppel effect. E.g.,
Phillips, 113 Ohio App. 3d at 380, 680 N.E.2d at 1283;
Culberson, 72 F. Supp. at 868. Since Debtor’s conviction
apparently occurred after a plea of no contest, it does not
appear that there were any issues actually litigated in the
criminal proceeding. There was no trial. And even when a
conviction based on a guilty plea instead of a trial may be
given collateral estoppel effect, Page 6 compare, e.g.,
Mitchell v. Mut. Life Ins. Co. (In re Mitchell), 129 F.3d
1264 (6th Cir. 1997) (unreported table decision), available
at 1997 WL 693437, at **1 (Illinois guilty plea satisfies
prerequisites to application of collateral estoppel in
nondischargeability proceeding) (citing Appley v. West, 832
F.2d 1021, 1026 (7th Cir. 1987)); see Mitchell v. Mitchell
(In re Mitchell), 256 B.R. 256, 258 (Bankr. N.D. Ohio 2000)
(guilty plea is admission of elements of crime), with
Chapman, 228 B.R. at 905; Clark, 222 B.R. at 117 (Bankr.
N.D. Ohio 1997), a conviction based on a plea of no contest
will still not be given collateral estoppel effect, see,
e.g., Raiford v. Abney (In re Raiford), 695 F.2d 521, 523
(11th Cir. 1983); see also, e.g., Vogel v. Kalita (In re
Kalita), 202 B.R. 889, 8969-8 (Bankr. W.D. Mich. 1996)
(plea of nolo contendere does not give rise to collateral
estoppel because no issues were actually litigated).[fn2]
Plaintiff has not met its burden of showing that any issues
were actually and necessarily litigated in the state court
proceeding as a predicate to applying issue preclusion in
this action.
Another reason the court must deny the Motion is that
Plaintiff has not shown any identity of issues between the
two proceedings. Even assuming the criminal conviction may
be afforded preclusive effect and even assuming that the
intent required for a conviction for felonious assault is
the same as that required for nondischargeability under 11
U.S.C. § 523(a)(6), see Chapman, 228 B.R. at 905
(felonious assault under Ohio statute does not require
finding of malice), Debtor was not convicted of felonious
assault but was convicted of attempt to commit felonious
assault. Thus, the state court has not made any finding
that Debtor did, in fact, commit an action falling within
the scope of § 523(a)(6). Ohio law defines “attempt”
as “purposely or knowingly . . . engag[ing] in conduct
that, if successful, would constitute or result in the
offense.” O.R.C. § 2923.02(A). Accordingly, one may
be convicted of attempt in Ohio even if the conduct was not
successful, and so a conviction for attempt cannot
establish that the conduct was successful. Debtor’s
conviction of attempted felonious assault does not,
therefore, establish as a matter of law that she injured
Plaintiff’s insured — only that she tried to do so.
See also Am. Nat’l Bank & Trust Co. v. Cooper (In re
Cooper), 125 B.R. 777, 781 (Bankr. N.D. Ill. 1991). Page 7
Although the conviction is not conclusive under Ohio law,
it is still evidence that may be “accorded whatever weight
the factfinder deems appropriate.” Phillips, 113 Ohio App.
3d at 381-82, 680 N.E.2d at 1283. The state court judgment
imposing sentence does not recite what happened between
Plaintiff’s insured and Debtor. There is nothing in this
document from which the court can find that Debtor intended
to injure Plaintiff’s insured, not just that Debtor
committed some intentional act that resulted in injury to
Plaintiff’s insured. Indeed, the present record lacks
evidence of injury to Plaintiff’s insured. Plaintiff has
not met its initial burden of showing no genuine issues of
material fact just with the submission of this document.
“Without more evidence to show an absence of genuine issues
of material fact than just the criminal conviction, the
plaintiff’s motion for summary judgment on this issue
fails.” Bukowski, 165 F. Supp. at 679.[fn3]
THEREFORE, for the foregoing reasons,
IT IS ORDERED that Plaintiff’s Motion for Summary Judgment
[Doc. #12] is denied; and
IT IS FURTHER ORDERED that a further pretrial scheduling
conference under Fed.R.Civ.P. 16(a) and Fed.R.Bankr.P. 7016
will be held on April 25, 2006, at 10:45 o’clock a.m.
[fn1] Although neither party has provided the court with
documents evidencing either the conviction or the plea,
Plaintiff’s reply does not dispute that the conviction was
based on a “no contest” plea.
[fn2] Plaintiff’s reply argues that its assertion of
collateral estoppel is not based on the plea itself, but on
“the finding of guilt by the Lucas County Court of Common
Pleas.” However, the criminal judgment — the only
document submitted in support of the motion for summary
judgment — does not find that Debtor is guilty of
the crime but only that she has been convicted of it.
[fn3] The court does not hold that Debtor’s liability to
Plaintiff’s insured is not nondischargeable under §
523(a)(6), but only that the criminal conviction does not
per se establish nondischargeability. Page 1