Allen v. Drake (In re Drake)

583 B.R. 881
CourtUnited States Bankruptcy Court, E.D. Virginia
DecidedJanuary 5, 2018
DocketCase No. 17–10253–KHK; Adv. Pro. No. 17–01015–KHK
StatusPublished

This text of 583 B.R. 881 (Allen v. Drake (In re Drake)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen v. Drake (In re Drake), 583 B.R. 881 (Va. 2018).

Opinion

Keith L. Phillips, United States Bankruptcy Judge

This matter is before the Court on the motion for Summary Judgment (the "Motion") filed by Plaintiff Terry Allen ("Allen" or "Plaintiff") pursuant to Rule 56(a) of the Federal Rules of Civil Procedure. This adversary proceeding was commenced when Allen filed a complaint (the "Complaint") against the debtor, Richard W. Drake ("Drake" or the "Debtor"), requesting a determination that the judgment Allen obtained against Drake in the Second Judicial District Court of the State of Nevada (the "District Court") is nondischargeable pursuant to § 523(a)(6) of the Bankruptcy Code, 11 U.S.C. § 523(a)(6). Allen asks the Court to award summary judgment in his favor because of the preclusive effect of the Nevada judgment. For the reasons stated below, the Court will deny the Motion.

Background

The state court litigation that preceded Drake's bankruptcy filing concerned Hotel Contracting Services, Inc. ("HCS"), a business in which Drake, Allen and others were all, at one time, shareholders, officers and directors. The debt that Allen seeks to be held nondischargeable arose from a suit filed by Drake in the Second Judicial District Court of the State of Nevada1 (the "Nevada Action") against Allen and Stuart and Kitty Burns (the "Burns") (jointly "the HCS Defendants"), alleging various contract and tort causes of action.2

*884Allen moved to dismiss the Nevada Action3 for failure to state a claim, based upon Nevada's anti-SLAPP statute4 and Rule 12(b)(5) of the Nevada Rules of Civil Procedure. The District Court granted Allen's motion, dismissing Drake's causes of action for failure to state a claim but denying Allen relief under the anti-SLAPP statute and rejecting his claim for attorney's fees.

On appeal, the Nevada Supreme Court affirmed the dismissal of the Nevada Action and found that certain of Drake's asserted causes of action violated Nevada's anti-SLAPP statute. It held that the District Court should have granted Allen's anti-SLAPP motion and entered an order remanding the case to the District Court to consider Allen's request for attorney's fees (the " Remand Order").5 On remand, the District Court entered an order awarding Allen $51,409.89 in attorney's fees, costs and damages allowable under state law in connection with an anti-SLAPP violation (the "Judgment Order").

On January 25, 2017, Drake filed a Chapter 7 bankruptcy case (Case No. 17-10253-(KHK) ) in this Court. Allen timely filed the Complaint on February 15, 2017, Drake filed his answer on March 10, 2017, and Allen filed the Motion to dismiss the Complaint on June 15, 2017. The Debtor responded to the Motion, and the parties have submitted memoranda. The Court heard oral argument on the Motion on September 18, 2017, after which it took the matter under advisement.

The Undisputed Facts

Rule 56(a) of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 56(a),6 requires the Court to grant summary judgment 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. Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Rule 56(c)(1)(A) requires that the party asserting that a fact cannot be genuinely disputed must support the assertion by citing materials in the record. The responding party may object to any of the materials cited on the basis that it cannot be presented in a form that would be admissible in evidence. Fed. R. Civ. P. 56(c)(2).

Allen maintains that the facts compelling the Court to rule that his claim is nondischargeable pursuant to § 523(a)(6) are established by the six exhibits attached to the memorandum accompanying the Motion (the "Memorandum"). These exhibits include the Remand Order and the Judgment Order, proof of domestication of the Judgment Order in Virginia, pleadings from the Nevada Action, and the Debtor's response to Allen's interrogatories.

*885In his response to the Motion, the Debtor challenges Allen's exhibits on evidentiary and procedural grounds, asserting that the exhibits are not properly authenticated, include hearsay, and cannot be considered because they were not attached to the Complaint or identified in the Plaintiff's Rule 7026 disclosures.7 In particular, the Debtor objects to the Court's consideration of the two Nevada court orders-the Remand Order entered by the Nevada Supreme Court (attached to the Memorandum as Exhibit B) and the Judgment Order entered by the District Court upon remand (attached to the Memorandum as Exhibit A).

Notably, the Debtor does not contend that the documents are not what they purport to be, contain any inaccuracies or omissions, or are unable to be presented in a form that would be admissible in evidence.8 Rule 56(c) allows the movant to cite "materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials ...." There is nothing in Rule 56 limiting a court to consideration of only materials submitted simultaneously with the complaint,9 nor is a court prohibited from considering materials that were not included in a Rule 26 disclosure.10 Moreover, the Debtor has not objected to the List of Exhibits filed by the Plaintiff on July 10, 2017, which includes the exhibits attached to the Memorandum. Under the Court's Initial Scheduling Order (Doc.

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Bluebook (online)
583 B.R. 881, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-v-drake-in-re-drake-vaeb-2018.