Zullo v. Lombardo

755 F.3d 1, 513 B.R. 647, 2014 WL 2620958
CourtCourt of Appeals for the First Circuit
DecidedJune 13, 2014
Docket13-9004
StatusPublished
Cited by44 cases

This text of 755 F.3d 1 (Zullo v. Lombardo) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zullo v. Lombardo, 755 F.3d 1, 513 B.R. 647, 2014 WL 2620958 (1st Cir. 2014).

Opinions

SOUTER, Associate Justice.

This appeal is from the bankruptcy court’s dismissal on summary judgment of John Zullo’s adversary proceeding against debtor David Lombardo, after denying Zullo leave to amend his complaint. We affirm.

In September 2010, Lombardo filed for Chapter 7 bankruptcy. In December, Zul-lo began an adversary proceeding in the bankruptcy court, alleging that Lombar-do’s debt to him was nondischargeable under 11 U.S.C. § 523(a)(6).1 That provision excepts from bankruptcy discharge “any debt ... for willful and malicious injury by the debtor to another entity or to the property of another entity.”

Lombardo’s debt to Zullo was for the amount of a Massachusetts state court judgment antedating Lombardo’s bankruptcy and resting on the following facts. In 2006, Zullo paid Lombardo for services under a contract to perform plumbing and other work on Zullo’s house. Lombardo had represented that he was the president of a plumbing company and was licensed to perform the necessary procedures. In fact, Lombardo was an apprentice, lacking the master plumber’s license required by Massachusetts law to make any such agreement as the one with Zullo. Unsurprisingly, Lombardo’s work turned out to be inadequate, and Zullo incurred additional expense to have it fixed.

After filing the adversary proceeding, Zullo’s counsel withdrew in June 2011. In January 2012, Zullo retained a successor who, in March, moved for summary judgment on the 11 U.S.C. § 523(a)(6) claim, alleging nondischargeability because the debt on the state court judgment arose from Lombardo’s willful and malicious injury to Zullo’s property.

The bankruptcy court held a hearing on the motion in May 2012. At that point, seventeen months had passed since the complaint had been filed, the period for discovery had closed, and trial was scheduled to start the following week. The [3]*3court indicated that there was no evidence before it to support the theory that Lom-bardo had injured Zullo’s property willfully, as required by subsection (6) of § 523(a). The court explained that Zullo’s adversary proceeding might properly have been brought not under that provision, but rather under subsection (2)(A), which excepts from discharge “any debt for money ... obtained by false pretenses, a false representation, or actual fraud.” Zullo’s counsel argued to the contrary, but also made an oral request for leave to amend the complaint by adding a count under subsection (2)(A). The court denied it and ultimately granted summary judgment not for the movant, Zullo, but for Lombardo. See Fed. R. Bankr.P. 7056; Fed.R.Civ.P. 56(f)(1). Zullo appealed to the Bankruptcy Appellate Panel (BAP), which affirmed.

The sole issue is whether the bankruptcy court erred in denying Zullo leave to amend his complaint.2 We review the bankruptcy court’s decision directly, according no deference to the BAP’s affirmance. See Brandt v. Repco Printers & Lithographics, Inc. (In re Healthco Int’l, Inc.), 132 F.3d 104, 107 (1st Cir.1997). The standard of review is “only for abuse of discretion.” Noonan v. Rauh (In re Rauh), 119 F.3d 46, 52 n. 10 (1st Cir.1997). Such an abuse may consist of, among other things, mistakes of law, see Todisco v. Verizon Commc’ns, Inc., 497 F.3d 95, 98 (1st Cir.2007), or clearly erroneous findings of fact, see Young v. City of Providence ex rel. Napolitano, 404 F.3d 33, 38 (1st Cir.2005).

Under the rules governing adversary proceedings, the bankruptcy court should freely give a party leave to amend his complaint when justice so requires. See Fed. R. Bankr.P. 7015; Fed.R.Civ.P. 15(a)(2). While the rules thus reflect a liberal amendment policy, we defer to the bankruptcy court’s denial of leave to amend if supported by an apparent, adequate reason, see Grant v. News Grp. Bos., Inc., 55 F.3d 1, 5 (1st Cir.1995), and under this court’s precedent, undue delay in moving to amend, even standing alone, may be such an adequate reason. See Acosta-Mestre v. Hilton Int’l of P.R., Inc., 156 F.3d 49, 51-52 (1st Cir.1998); see also Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) (listing “undue delay” as a reason for denying leave to amend).3

In any event, we have repeatedly said that when “considerable time has elapsed between the filing of the complaint and the motion to amend, the movant has [at the very least] the burden of showing some ‘valid reason for his neglect and delay.’ ” Stepanischen v. Merchs. Despatch Transp. Corp., 722 F.2d 922, 933 (1st Cir.1983) (quoting Hayes v. New Eng. Millwork Distribs., Inc., 602 F.2d 15, 20 (1st Cir.1979)). And we have previously labeled as “considerable time,” warranting explanation, periods of fourteen months, see Grant, 55 F.3d at 6, fifteen months, see Acostar-Mestre, 156 F.3d at 52, and seventeen months, see Stepanischen, 722 F.2d at 933. We have also held that in assessing whether delay is undue, a court will take account of what the movant “knew or [4]*4should have known and what he did or should have done.” Invest Almaz v. Temple-Inland Forest Prods. Corp., 243 F.3d 57, 72 (1st Cir.2001) (quoting Leonard v. Parry, 219 F.3d 25, 30 (1st Cir.2000)).

Here, Zullo has provided no explanation for the seventeen-month delay between filing the complaint and seeking leave to amend. His change of counsel is obviously no justification, as his second lawyer did not try to amend until four months after taking the case and over one month after moving for summary judgment on the apparently ill-pleaded claim. And even then Zullo’s counsel ultimately requested leave only because the court informed him that a claim under a different statutory subsection might have fared better than the claim actually made. That reason carries no implication favorable to Zullo under the Invest Almaz

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755 F.3d 1, 513 B.R. 647, 2014 WL 2620958, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zullo-v-lombardo-ca1-2014.