Mogley v. Fleming (In re Fleming)

287 B.R. 212, 2001 Bankr. LEXIS 2082
CourtUnited States Bankruptcy Court, E.D. Missouri
DecidedNovember 30, 2001
DocketBankruptcy No. 00-51259-293; Adversary No. 01-4128-293
StatusPublished

This text of 287 B.R. 212 (Mogley v. Fleming (In re Fleming)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mogley v. Fleming (In re Fleming), 287 B.R. 212, 2001 Bankr. LEXIS 2082 (Mo. 2001).

Opinion

MEMORANDUM OPINION

DAVID P. MCDONALD, Chief Judge.

In 1998, Plaintiff Robert J. Mogley received a state court judgment for fraudulent misrepresentation against Defendant-Debtor Lawrence J. Fleming. The judgment included an award of punitive damages in the amount of $225,000.00. Mogley filed this adversary proceeding to determine whether the judgment is excepted from discharge under 11 U.S.C. § 523(a)(2)(A). Fleming contends that the judgment, or at a minimum the punitive portion of the judgment, should be discharged. The Court finds that the state court judgment shall be given preclusive effect and the entire judgment is nondischargeable.

[214]*214 JURISDICTION AND VENUE

This Court has jurisdiction over the parties and subject matter of this proceeding under 28 U.S.C. §§ 1334, 151, and 157 and Local Rule 9.01(B) of the United States District Court for the Eastern District of Missouri. This is a core proceeding under 28 U.S.C. § 157(b)(2)(I) which the Court may hear and determine. Venue is proper in this District under 28 U.S.C. § 1409.

PROCEDURAL BACKGROUND

Plaintiff Robert J. Mogley sued his former attorney, Defendant-Debtor Lawrence J. Fleming, in the Circuit Court of the City of St. Louis, State of Missouri, for legal malpractice and fraudulent misrepresentation. Mogley received a judgment from the Circuit Court on April 30, 1998, in the amount of $58,000.00 on the legal malpractice claim and $3,000.00 in actual damages and $225,000.00 in punitive damages on the fraudulent misrepresentation claim. Fleming appealed the case to the Missouri Court of Appeals. On December 7, 1999, the appeals court reversed the trial court’s judgment on the malpractice claim but affirmed the judgment for fraud including the award for punitive damages. On March 21, 2000, the Supreme Court of Missouri denied Fleming’s application to transfer the case to that court.

On November 9, 2000, Fleming filed a voluntary petition seeking relief under Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq. It is not disputed that Mogley’s judgment against Fleming in the amount of $3,000.00 in actual damages and $225,000.00 in punitive damages is a debt of the estate. On April 2, 2001, Mogley filed the present adversary proceeding to determine the dischargeability of that judgment. On July 19, 2001, the parties agreed to waive a trial of the matter and agreed to submit the case to the Court on stipulated facts and opposing briefs. On September 14, 2001, the ease was fully briefed and submitted.

FINDINGS OF FACT

The parties submitted a document titled “Stipulation of Facts” which merely lists all of the state court documents involved in the case, including: the jury instructions; the Circuit Court’s judgment; the Missouri Court of Appeals judgment; and the Missouri Supreme Court’s denial of transfer. The “stipulation” states that all of these documents are true and accurate and may be admitted into the record. The parties submitted copies of these documents for the record. The history of the state case is long and protracted. The pertinent facts of the ease, taken from the Missouri Court of Appeals decision and other stipulated documents, are as follows:

1) In 1981, Plaintiff Robert J. Mogley was offered early retirement from his employer, Chicago Title Insurance Company. In order to receive the early retirement benefits, Mogley had to agree to waive any claims he had against Chicago Title, including employment discrimination claims. He accepted the offer, but later, in 1982, Mogley attempted to sue the company for age discrimination in the United States District Court. Mogley was represented by Defendant Lawrence J. Fleming. The case was dismissed with prejudice and the Eighth Circuit affirmed the dismissal.

2) Three years later, in 1985, Mogley asked Fleming to file a wrongful termination case against Chicago Title. Fleming prepared a petition and told Mogley that the case was filed in Edwardsville, Illinois, at the Madison County Court. In the spring of 1986, Fleming gave Mogley a copy of the wrongful termination petition complete with a cause and division number. Mogley paid Fleming approximately $1,090.00.

3) When Mogley and his wife attended purportedly scheduled depositions of Chi[215]*215cago Title employees, Fleming told the couple that Chicago Title had cancelled the depositions. After that incident, Fleming failed to respond to several of Mogley’s letters and phone calls. On July 3, 1989, Mogley went to the Madison County Courthouse and discovered that Fleming had never filed the wrongful termination petition.

4) Mogley sued Fleming for legal malpractice and for fraudulent misrepresentation in the Circuit Court of the City of St. Louis. Mogley’s wife testified at trial that Fleming told her that the case against Chicago Title had been settled for $280,000.00. She also testified that Fleming said that he had sent releases for the settlement and he gave her a Federal Express number for the mailing. She called Federal Express with the number given to her by Fleming and was told that there was no such mailing number at Federal Express.

5) On April 30, 1998, the jury entered a verdict for Mogley for $58,000.00 on the legal malpractice claim and in the amount of $3,000.00 in actual damages and $225,000.00 in punitive damages on the fraudulent misrepresentation claim. The Circuit Court entered a judgment for these amounts on the same day.

6) Fleming filed an appeal with the Missouri Court of Appeals alleging numerous infirmities with the trial court’s judgment. On December 7, 1999, the court of appeals reversed the judgment as to the malpractice claim but affirmed the judgment as to the fraudulent misrepresentation claim including the award of punitive damages on that claim.

7) The Supreme Court of Missouri denied Fleming’s application for transfer on March 21, 2000.

DISCUSSION

Mogley’s complaint asks the Court to determine whether his judgment against Fleming is nondischargeable under the 11 U.S.C. § 523(a)(2)(A) exception for fraud. In support of his claim, he offers the Missouri state court’s judgment for fraud. Fleming counters that the state court judgment should not be recognized due to constitutional violations by the trial and appellate courts. In the alternative, Fleming asserts that the punitive damages portion of the judgment must be reviewed under the willful and malicious standard of 11 U.S.C. § 523(a)(6) and that Mogley failed to establish the malicious prong of that analysis. The Court will first address Fleming’s arguments in favor of discharge-ability.

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Bluebook (online)
287 B.R. 212, 2001 Bankr. LEXIS 2082, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mogley-v-fleming-in-re-fleming-moeb-2001.