Dolores Press, Inc. v. Robinson (In re Robinson)

Chapter 7

ORDER GRANTING PLAINTIFFS' AMENDED MOTION FOR ENTRY OF DEFAULT JUDGMENT

Paul Baisier U.S. Bankruptcy Court Judge

Before the Court is the Plaintiffs' Amended Motion for Entry of Default Judgment, filed by Dolores Press, Inc. and Melissa Scott, the above-named Plaintiffs (the "Plaintiffs"), against the

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Chapter 7 Debtor-Defendant named above (the "Debtor") on September 29, 2021 (Docket No. 26)(the "Motion") under Federal Rule of Bankruptcy Procedure 7055, incorporating Federal Rule of Civil Procedure 55(b). In the Motion, the Plaintiffs seek entry of default judgment against the Debtor, finding that their claim against the Debtor in the asserted amount of $318, 900.06 is nondischargeable pursuant to 11 U.S.C. § 523(a)(6). See also Memorandum of Law in Support of Plaintiffs' Amended Motion for Entry of Default Judgment (attached to the Motion as Exhibit 1)(the "Plaintiffs' Memorandum of Law"). The Plaintiffs' claim arises from the Amended Judgment and Permanent Injunction entered by the United States District Court for the Central District of California (the "California District Court") on April 6, 2021 (the "District Court Judgment")^[1] in the consolidated case^[2] styled Dolores Press, Inc., et al. v. Patrick Robinson, et al., No. CV 15-02562 PA (PLAx)(the "California Litigation"), awarding the Plaintiffs $302, 715, plus any costs of suit awarded under Federal Rule of Civil Procedure 54 (collectively, the "Judgment Debt").^[3] The District Court Judgment was entered pursuant to several Minute Orders, including the District Court Minute Order of February 23, 2021 granting default judgment (the "District Court Order")(copy attached to the Hewitt Declaration as Exhibit "A").

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Background

The Plaintiffs initiated this Adversary Proceeding (the "Adversary Proceeding") against the Debtor by filing a Complaint to Determine Dischargeability of Debt Against Patrick Alan Robinson Pursuant to 11 U.S.C. § 523(a)(6) on November 2, 2020 (Docket No. 1)(the "Original Complaint").^[4] Thereafter, on December 7, 2020, the Court entered an Order Granting Motion of Dolores Press, Inc. and Melissa Scott for Relief from the Automatic Stay (Main Case Docket No. 30)(the "Stay Relief Matter") to allow the Plaintiffs to continue their prosecution of the California Litigation.^[5] The Court also entered an Order Staying Adversary Proceeding on December 18, 2020 (Adversary Docket No. 11). Following entry of the District Court Judgment (as originally entered), the Plaintiffs filed a Notice of Entry of Final Judgment herein on March 2, 2021 (Docket No. 13), whereupon the Court entered its Order That Adversary Proceeding Is No Longer Stayed

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on March 8, 2021 (Docket No. 14). The Plaintiffs then filed their Amended Complaint to Determine Dischargeability of Debt Against Patrick Alan Robinson Pursuant to 11 U.S.C. § 523(a)(6) with respect to the Judgment Debt on April 14, 2021 (Docket No. 20)(the "Complaint").

In the Complaint, the Plaintiffs contend that the Debtor willfully engaged in an effort to infringe on Plaintiffs' intellectual property rights for personal gain and benefit absent authorization and after Plaintiffs formally notified the Debtor to cease and desist such efforts. The Plaintiffs allege the Debtor's actions were part of a plan to initiate and fund litigation regarding the proper ownership of certain copyrighted works, as discussed in more detail below.

To date, the Debtor has not filed a responsive motion or answer or otherwise defended against the claims set forth in this Adversary Proceeding.^[6] A review of the docket reveals that the Plaintiffs served the Debtor and his bankruptcy counsel with an Alias Summons, issued on April 16, 2021, and a copy of the Complaint on April 19, 2021. See Certificate of Service of Summons and Amended Complaint (Docket No. 22).^[7] Based on the Plaintiffs' Application for Clerk's Entry Of Default and the Declaration of Matthew M. Weiss in Support of Plaintiffs' Application for Clerk's Entry of Default, filed by the Plaintiffs on May 20, 2021 (Docket No. 23), the Clerk entered a Default against the Debtor herein on May 21, 2021 (the "Default")(Docket, passim). In the Declaration of Matthew M. Weiss in Support of Plaintiffs' Amended Motion for Entry of Default

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Judgment, attached to the Motion as Exhibit 3 (the "Weiss Declaration"), counsel for the Plaintiffs states that the Debtor was served with the Alias Summons and Amended Complaint in accordance with Federal Rule of Bankruptcy Procedure 7004(b).^[8] The Debtor has not sought to reopen the Default. The certificate of service attached to the Motion reflects that it was served on the Debtor and counsel on September 29, 2021, and to date the Debtor has also not responded to the Motion. As a result, the Motion is unopposed. See BLR 7007-1(c).^[9]

Standard of Review

The entry of a default judgment under Rule 7055, Fed.R.Bankr.P. is discretionary, and a defendant's default does not mean there is a basis for entry of a judgment. Rather, a "sufficient basis in the pleadings" must be shown and it is only the "well-pled allegations of fact" that will support a default judgment since a default "does not admit conclusions of law." In re Bohanon, 2017 WL 2634980, *1 (Bankr. N.D.Ga. June 19, 2017), quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975); see also Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1244 (11th Cir. 2015)(per curiam)(non-responding defendant "deemed to admit the plaintiff's well-pleaded allegations of fact"), quoting Cotton v. Massachusetts Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005). As the United States Supreme Court has said, a complaint must also set forth "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

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Discussion

Exceptions to discharge are narrowly construed to advance the fresh start policy promoted in the Bankruptcy Code. See In re Lowery, 440 B.R. 914, 921 (Bankr. N.D.Ga. 2010)(citing Hope v. Walker (In re Walker ), 48 F.3d 1161, 1164-65 (11th Cir. 1995)). The Plaintiffs bear the burden of proof in showing by a preponderance of the evidence that the Judgment Debt should be excepted from discharge under 11 U.S.C. § 523. Grogan v. Garner, 498 U.S. 279, 286-88, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991).

As noted above, the Plaintiffs seek relief under 11 U.S.C. § 523(a)(6). Section 523(a)(6) states the following:

(a) A discharge under section 727, 1141, 1192, 1228(a) 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt-

(6) for willful and malicious injury by the debtor to another entity or to the property of another entity…

11 U.S.C. § 523(a)(6). With respect to the necessary showing to prove a "willful and malicious injury" under Section 523(a)(6), willfulness is established by demonstrating that the debtor acted with actual intent to cause the resulting injury to an aggrieved party, such as an intentional tort, as distinguished from an intentional act that leads to an injury. See In re Crumley, 2011 WL 7068913, at *2 - *3 (Bankr. N.D.Ga. Aug. 10, 2011), citing Kawaauhau v. Geiger, 523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998). Conduct displaying a reckless indifference to the rights of another resulting in injury does not meet this standard. Crumley, supra; see also In re Held, 734 F.2d 628, 629 (11th Cir. 1984). Evidence that a debtor acted with 'substantial certainty' in connection with an injury, however, is sufficient for purposes of satisfying the test for willfulness.

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Maxfield v. Jennings (In re Jennings), 670 F.3d 1329, 1334 (11th Cir. 2012); see also Crumley, supra, citing Woolley v. Woolley (In re Woolley), 288 B.R. 294, 301-02 (Bankr. S.D. Ga. 2001).

With respect to maliciousness, a plaintiff must show the conduct at issue was "wrongful and without just cause or excessive even in the absence of personal hatred, spite, or ill will." Jennings, supra, 670 F.3d at 1334, quoting Walker, supra, 48 F.3d at 1164 (citation omitted). In addition, a "showing of a specific intent to harm another is not necessary." In re Ikner, 883 F.2d 986, 991 (11th Cir. 1989).

As alleged in the Complaint, the Plaintiffs filed the California Litigation to protect their intellectual property rights in certain copyrighted works of Dr. Gene Scott, a renowned minister with a worldwide audience, and to recover damages based on the alleged willful infringement of those rights by the Debtor and the other defendants named therein. As further alleged in the Complaint, upon his death, through his will Dr. Scott left the entirety of his rights in all his intellectual property to Plaintiff Melissa Scott ("Pastor Scott"), who was his wife and sole successor to his ministry. Among this property was Dr. Scott's copyrighted works and teachings, including his sermons and nightly programs transmitted by cable, broadcast and satellite television, and radio and simultaneously recorded. Later, Dr. Scott made his videos and works available via the internet. The Plaintiffs state that notice of his copyright accompanied each work. Plaintiff Dolores Press, Inc. now holds the exclusive license to the rights of Pastor Scott, which includes her rights "in and to the audiovisual recordings of the teachings of Dr. Scott," that it sells for a fee. Complaint, ¶ 7, and see ¶¶ 13-21. The Debtor was a follower of Dr. Scott and allegedly claimed to be his true successor, charged with disseminating Dr. Scott's sermons and teachings. Complaint, ¶¶ 2-3.

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The Plaintiffs further allege that the Debtor requested...