K & K Insurance Group, Inc. v. Houston (In Re Houston)

305 B.R. 111, 17 Fla. L. Weekly Fed. B 37, 2003 Bankr. LEXIS 1802, 2003 WL 23214221
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedSeptember 22, 2003
DocketBankruptcy No. 8:03-BK-4074, Adversary No. 8:03-ap-203-PMG
StatusPublished
Cited by7 cases

This text of 305 B.R. 111 (K & K Insurance Group, Inc. v. Houston (In Re Houston)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
K & K Insurance Group, Inc. v. Houston (In Re Houston), 305 B.R. 111, 17 Fla. L. Weekly Fed. B 37, 2003 Bankr. LEXIS 1802, 2003 WL 23214221 (Fla. 2003).

Opinion

ORDER ON (1) DEBTOR’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM ON WHICH RELIEF CAN BE GRANTED, AND ON (2) PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

PAUL M. GLENN, Chief Judge.

THIS CASE came before the Court for hearing to consider (1) the Motion to Dismiss for Failure to State a Claim on which Relief Can be Granted filed by the Debt- or, Yvonne Annette Houston, and also to consider (2) the Motion for Summary Judgment filed by the Plaintiff, K & K Insurance Group, Inc., as subrogee of its insured, Frederick Palluel.

The Plaintiff commenced this adversary proceeding by filing a Complaint to determine the dischargeability of a debt claimed by the Plaintiff against the Debtor. The Plaintiff contends that the debt is nondis- *114 chargeable pursuant to § 523(a)(2) and § 523(a)(6) of the Bankruptcy Code, that there are no issues of fact, and that the Plaintiff is entitled to a judgment as a matter of law.

Background

On April 30, 2001, the Debtor filed a Complaint in the Circuit Court for Pinellas County, Florida, against Frederick Palluel and the Tampa Bay Skating Academy. The case was assigned Case No. 01-003294-CI. In the Complaint, the Debtor alleged that Frederick Palluel (Palluel), an ice skating instructor at the Tampa Bay Skating Academy, negligently collided with her on the Academy’s ice rink on January 28, 2000, and that she was injured as a result of the collision. (Exhibit A to Plaintiffs Complaint).

On February 8, 2002, Palluel served an Offer of Judgment/Proposal for Settlement on the Debtor pursuant to § 768.79 of the Florida Statutes. The Debtor rejected the Offer.

Palluel subsequently filed a Motion to Dismiss and/or Strike the Complaint. (Exhibit B to Plaintiffs Complaint). In the Motion to Dismiss, Palluel alleged that the Debtor had “clearly and intentionally misrepresented her pre-accident state of health” in certain Interrogatories and depositions taken in connection with the action “in an effort to magnify the value of her claim.”

On October 14, 2002, the Circuit Court entered an Order Granting Defendant’s Motion to Dismiss and/or Strike. (Exhibit A to Plaintiffs Motion for Summary Judgment). The Order provided in part:

When a party lies about matters pertinent to his own claim, or a portion of it, and perpetrates a fraud, dismissal of the whole case is proper. Cox v. Burke, 706 So.2d 43, 47 (Fla. 5th DCA 1998). A trial court has broad discretion to impose sanctions on litigants for their conduct before the court. Morgan v. Campbell, 816 So.2d 251, 253 (Fla. 2d DCA 2002). A trial court has the inherent authority to dismiss an action as a sanction when the plaintiff has perpetrated a fraud on the court. Id. After holding an evidentiary hearing, this Court concludes that Plaintiff made several misrepresentations and false statements during discovery regarding prior similar injuries and the case is dismissed.

(Emphasis supplied). Accordingly, the Circuit Court dismissed the Debtor’s negligence action.

Palluel subsequently filed a Motion to Tax Fees and Costs against the Debtor. On January 7, 2003, the Circuit Court entered an Order deferring ruling on Pal-luel’s Motion, and granting the Debtor’s oral motion for an evidentiary hearing on Palluel’s request for fees and costs.

The Debtor filed her petition under chapter 7 of the Bankruptcy Code on March 4, 2003, before the hearing was conducted in state court on Palluel’s Motion to Tax Fees and Costs.

The Plaintiff contends that the fees and costs incurred by it during the state court action are nondischargeable under § 523(a)(2) of the Bankruptcy Code, because the prosecution of the state court action by the Debtor constituted a fraud on the Plaintiff. The Plaintiff also contends that its fees and costs are nondis-chargeable under § 523(a)(6) of the Bankruptcy Code, because the prosecution of the state court action constituted a willful and malicious injury to the Plaintiff within the meaning of the statute.

Finally, the Plaintiff asserts that the Debtor is collaterally estopped from denying her fraudulent conduct, because of the state court’s finding that she had made several false statements during the course *115 of discovery in the negligence action. Consequently, the Plaintiff contends that there are no genuine issues of material fact, and that the Plaintiff is entitled to the entry of a judgment in its favor as a matter of law.

The Debtor filed a Motion to Dismiss the Plaintiff’s Complaint for Failure to State a Claim upon which Relief can be Granted, and also filed an Affidavit in Opposition to the Plaintiffs Motion for Summary Judgment. (Doc. 9).

In her Motion to Dismiss, the Debtor contends that the Complaint does not state a cause of action because (1) the Debtor does not owe the Plaintiff for “money, property, or services” within the meaning of § 523(a)(2) of the Bankruptcy Code, (2) the Plaintiffs claim stems from the Debt- or’s rejection of the Plaintiffs offer of compromise, and is therefore a claim for statutory fees under Florida law, and is not a claim based on a tort within the meaning of § 523(a)(6) of the Bankruptcy Code, and (3) the Bankruptcy Court lacks subject matter jurisdiction to determine whether the Plaintiff is entitled to the statutory fees. If the Plaintiff is entitled to such an award, the Debtor asserts that the Court lacks jurisdiction to determine the amount of the award.

Additionally, in her Affidavit in Opposition to the Plaintiffs Motion for Summary Judgment, the Debtor asserts that she did not receive a full and fair opportunity to litigate the state court action, because she was not permitted to testify at the hearing on Palluel’s Motion to Dismiss and/or Strike. If she had been given the opportunity to testify, the Debtor contends, she would have (1) distinguished the whiplash injuries that she had previously sustained in unrelated accidents, from the herniated disc injury that resulted from the collision at the skating rink; and she also would have (2) explained the information contained in the medical records used by Pal-luel at the hearing on the Motion to Dismiss and/or Strike. The Debtor concludes in her affidavit, therefore, that she “did not commit fraud or make misrepresentations in filing the State Court case or during discovery conducted during that case.”

The Motion to Dismiss

The Debtor’s Motion to Dismiss the Plaintiffs Complaint for Failure to State a Claim on which Relief can be Granted should be denied.

First, the Debtor asserts in the Motion to Dismiss that “Adversary Plaintiff fails to allege the existence of a statement in writing and fails to allege any actions of the Adversary Plaintiff [sic] which fall within the ambit of U.S.C. (a)(2)(B)®, (ii) or (iv).” (Motion to Dismiss, ¶ 4). The Court has reviewed Count I of the Complaint, and agrees that the Plaintiff did not state a claim for relief under § 523(a)(2)(B) of the Bankruptcy Code, since the Plaintiff did not assert that the claim is based on a false financial statement submitted by the Debtor.

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Cite This Page — Counsel Stack

Bluebook (online)
305 B.R. 111, 17 Fla. L. Weekly Fed. B 37, 2003 Bankr. LEXIS 1802, 2003 WL 23214221, Counsel Stack Legal Research, https://law.counselstack.com/opinion/k-k-insurance-group-inc-v-houston-in-re-houston-flmb-2003.