Vision W., Inc. v. Catalan (In re Catalan)

590 B.R. 678
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedSeptember 11, 2018
DocketBky. No. 17-13225 ELF; Adv. No. 17-0210 ELF
StatusPublished
Cited by4 cases

This text of 590 B.R. 678 (Vision W., Inc. v. Catalan (In re Catalan)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vision W., Inc. v. Catalan (In re Catalan), 590 B.R. 678 (Pa. 2018).

Opinion

ERIC L. FRANK, U.S. BANKRUPTCY JUDGE

I. INTRODUCTION

In 2013, Vision West, Inc. ("Vision West") sued Addison Dane, Inc. ("Addison Dane") in the Court of Common Pleas, Lancaster County ("the State Court") for breach of a contract pursuant to which Vision West financed Addison Dane's purchase of inventory for its business operations. In the same lawsuit, Vision West sued Alan H. Catalan ("the Debtor") to enforce his personal guaranty of the Addison Dane-Vision West contract.

In 2017, the State Court entered a default judgment in the amount of $132,832.11 as a sanction against both the Debtor and Addison Dane due to discovery misconduct. The Debtor subsequently filed this chapter 7 bankruptcy case.

Vision West commenced this adversary proceeding, seeking to have the default judgment against the Debtor determined nondischargeable under 11 U.S.C. § 523(a)(6) as a debt for willful and malicious injury.

Presently before the court is Vision West's motion for summary judgment. The Debtor is currently pro se and has not participated in the proceeding since his *681former counsel withdrew his appearance (with the court's consent) in January 2018, prior to the filing of the Vision West's summary judgment motion.

Vision West's motion establishes that there are no undisputed facts. In light of those facts, I conclude that the Debtor and Vision West each is entitled to partial summary judgment.

Most of the subject debt arises from a simple breach of contract and is therefore dischargeable. However, Vision West has shown that the portion of the debt attributable to attorney's fees incurred in seeking the Debtor's discovery compliance is "for willful and malicious injury ... to [Vision West's] property." See 11 U.S.C. § 523(a)(6). Therefore, I will enter an order determining that $17,365.00 is nondischargeable and that the balance of the $132,832.11 debt is dischargeable.1

II. PROCEDURAL HISTORY

The Debtor filed this voluntary chapter 7 bankruptcy case on May 4, 2017. On July 31, 2017, Vision West filed this adversary complaint seeking a determination that the debt is nondischargeable pursuant to 11 U.S.C. § 523(a)(6).

The Debtor filed an answer to the complaint on September 8, 2017. The parties' attempt at mediation failed. Thereafter, the Debtor's attorney was granted leave to withdraw as counsel on January 17, 2018.2

One month later, on February 16, 2018, Vision West filed a motion for summary judgment ("the Motion"), which I denied for Vision West's failure to follow rules of court pertaining to notice and service. (Doc. # 32). On April 26, 2018, Vision West renewed its Motion. (Doc. #s 34, 35, 37).

After Vision West certified that the Debtor had not responded to the Motion, I ordered Vision West to file a supplemental memorandum of law addressing:

• whether the entry of a judgment on an otherwise dischargeable debt as a litigation sanction transforms the dischargeable debt into a nondischargeable debt under 11 U.S.C. § 523(a)(6).
• whether the underlying contract between the Plaintiff and the Debtor included an attorney's fee-shifting provision.

Vision West timely filed a supplemental brief on June 19, 2018, addressing the first issue and advising the court that the underlying contract contained a fee-shifting provision. ("Plaintiff's Supp. Memo," Doc. # 44). Therefore, the Motion is ready for decision.3

*682III. SUMMARY JUDGMENT STANDARD

I have previously discussed the legal standard employed in deciding a motion for summary judgment, including the proper application of the burden of proof:

[S]ummary judgment must be granted to a moving party when, drawing all reasonable inferences in favor of the nonmoving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Summary judgment is appropriate if there are no disputed issues of material fact and the undisputed facts would require a directed verdict in favor of the movant.
On a motion for summary judgment, the court's role is not to weigh the evidence, but to determine whether there is a disputed, material fact for resolution at trial. A genuine issue of material fact is one in which sufficient evidence exists that would permit a reasonable fact finder to return a verdict for the non-moving party. However, if it appears that the evidence is so one-sided that one party must prevail as a matter of law, the court shall enter judgment accordingly in that party's favor.
Proper resolution of a motion for summary judgment also requires consideration of the parties' respective burdens.
If the moving party bears the burden of proof, the movant must support its motion with credible evidence that would entitle it to a directed verdict if not controverted at trial. Evidence must establish all the essential elements of its case on which it bears the burden of proof at trial, [such that] no reasonable jury could find for the non-moving party. If the movant (with the burden of proof at trial) meets this initial burden, the responding party may not rest on the pleadings, but must designate specific factual averments through the use of affidavits or other permissible evidentiary material which demonstrate a genuine issue of material fact to be resolved at trial.

In re Universal Mktg., Inc., 541 B.R. 259, 279-80 (Bankr. E.D. Pa. 2015) (citations and quotations omitted).

IV. UNDISPUTED FACTS

The material undisputed facts in this proceeding are:4

1. After October 2012, Addison Dane was a corporation wholly owned by the Debtor. (Compl. ¶ 6).
2. Addison Dane sold eyeglasses under the name "World Spectacles." (Compl. ¶ 7).
3. From August 2012 to March 2013, Vision West paid the invoices for *683Addison Dane's purchase of inventory, with Addison Dane contractually obligated to repay Vision West. (Compl. ¶¶ 7-9).
4.

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Cite This Page — Counsel Stack

Bluebook (online)
590 B.R. 678, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vision-w-inc-v-catalan-in-re-catalan-paeb-2018.