Norm Gershman's Things to Wear, Inc. v. Peterson (In Re Peterson)

332 B.R. 678, 2005 Bankr. LEXIS 2195, 2005 WL 3046491
CourtUnited States Bankruptcy Court, D. Delaware
DecidedNovember 15, 2005
Docket17-12824
StatusPublished
Cited by12 cases

This text of 332 B.R. 678 (Norm Gershman's Things to Wear, Inc. v. Peterson (In Re Peterson)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norm Gershman's Things to Wear, Inc. v. Peterson (In Re Peterson), 332 B.R. 678, 2005 Bankr. LEXIS 2195, 2005 WL 3046491 (Del. 2005).

Opinion

MEMORANDUM OPINION

PETER J. WALSH, Bankruptcy Judge.

Plaintiffs Norman Gershman and Norm Gershman’s Things to Wear, Inc. filed a motion for summary judgment (Adv.Doc. # 7) with respect to their adversary complaint which requests a determination that the debt owed to them by the debtor Jennifer Ruth Peterson is nondischargeable. For the reasons set forth below, the plaintiffs’ motion for summary judgment will be denied.

BACKGROUND

On August 31, 2004, Jennifer Ruth Peterson filed a voluntary petition under chapter 7 of title 11 of the United States Code, 11 U.S.C. §§ 101 et. seq. (the “Bankruptcy Code”). 1 Ms. Peterson’s schedules list her assets as having a value of $17,450.00 and lists her liabilities at $72,739.94. Among such liabilities, Ms. Peterson owes the plaintiffs $10,845.51 on a prepetition judgment that the plaintiffs obtained in the Delaware Court of Common Pleas. 2

For some time prior to May 1997, Ms. Peterson and David Gershman lived together in a New Castle apartment. In May of 1997, however, Ms. Peterson and David Gershman were invited to move into *681 a house owned by plaintiff Norm Gersh-man’s Things to Wear Inc. (hereinafter the “Business”). The house was located at 317 Country Club Drive in Rehoboth Beach, Delaware. The property was never used as a rental property; rather, it was for the use and enjoyment of the Business’s shareholders, who consisted entirely of the Gershman family. Plaintiff Norman Gershman, David Gershman’s father, was the majority shareholder of the Business.

When Ms. Peterson and David Gersh-man left their New Castle apartment, they took with them Ms. Peterson’s dog Samantha. Samantha had caused damage to the New Castle apartment, which resulted in a dispute with Ms. Peterson’s landlord. As a result, Norman Gershman assisted Ms. Peterson in finding a lawyer to address the matter.

Because Norman Gershman had helped Ms. Peterson find a lawyer, he was certainly aware that the dog had caused damage to the New Castle apartment. Based on this knowledge, Norman Gershman approached Ms. Peterson before she moved into the Rehoboth house. During that discussion, Ms. Peterson orally agreed that she would be responsible for any damage caused by her dogs to the Rehoboth house. Norman Gershman further informed Ms. Peterson that only one dog would be permitted to live on the property; by that time, Ms. Peterson had three dogs: Samantha, China and Sadie. To allay Norman Gershman’s concerns, Ms. Peterson assured him that she would find somewhere else for China and Sadie to live. Ms. Peterson never made good on that promise.

On October 4, 1998, Ms. Peterson and David Gershman were married. During their marriage, Ms. Peterson and David Gershman continued to reside in the Reho-both house. In February of 2001, Ms. Peterson and David Gershman separated. Thereafter, David Gershman was in-and-out of the house sporadically until sometime in late March or early April 2001, at which time he left permanently.

After David Gershman moved out of the house, Norman Gershman visited the property. It was a mess: carpets, flooring, walls, furniture, and woodwork were scratched, broken, torn, and soiled with dog waste. As a result, Norman Gersh-man contacted Ms. Peterson.

On May 15, 2001, Ms. Peterson met with Norman Gershman. At that meeting, Ms. Peterson signed a written agreement between herself and Norman Gershman affirming that she had earlier orally agreed that she would be solely responsible for the damage done to the house by the dogs. Subsequent to the signing, Norman Gersh-man and Norm Gershman’s Things to Wear, Inc. brought suit against Ms. Peterson in the Delaware Court of Common pleas.

On February 26, 2004, the Court of Common pleas rendered judgment for the plaintiffs in the amount of $10,845.51 for the damage done by the dogs. The court did not award punitive damages. Several months later, on August 31, 2004, Ms. Peterson filed her petition. The plaintiffs now seek to have this Court declare that their judgment is nondischargeable because Ms. Peterson’s actions in allowing the dogs to damage the property were willful and malicious.

DISCUSSION

Standard of Review

Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. *682 R. Civ. P 56(c). 3 “Facts that could alter the outcome are ‘material,’ and disputes are ‘genuine’ if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct.” Horowitz v. Fed. Kemper Life Assurance Co., 57 F.3d 300, 302 n. 1 (3d Cir.1995) (citations omitted). When deciding a motion for summary judgment, the court views the facts, and all permissible inferences from those facts, in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Where the record could lead a reasonable trier of fact to find for the non-moving party, disposition by summary judgment is inappropriate. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Willful and Malicious

Section 523(a)(6) of the Bankruptcy Code provides:

(а) A discharge under ... this title does not discharge an individual debtor from any debt—
(б) for willful and malicious injury by the debtor to another entity or to the property of another entity

“[T]he standard of proof for the discharge-ability exceptions in 11 U.S.C. § 523(a) is the ordinary preponderanee-of-the-evi-dence standard.” Grogan v. Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). This burden rests on the moving creditor. Id.

To satisfy its burden, the creditor must prove a “willful and malicious injury by the debtor.” “The word ‘willful’ in [subsection] (a)(6) modifies the word ‘injury,’ indicating that nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury.” Kawaauhau v. Geiger, 523 U.S. 57

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332 B.R. 678, 2005 Bankr. LEXIS 2195, 2005 WL 3046491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norm-gershmans-things-to-wear-inc-v-peterson-in-re-peterson-deb-2005.