Halaw v. Wilding (In re Wilding)

620 B.R. 843

IN RE: Marlon J. WILDING, Debtor.

Sean and Laurie Halaw, Plaintiffs,

v.Marlon J. Wilding, Defendant.

Case No.: 17-35624(RG)

Adv. No.: 18-1154(RG)

United States Bankruptcy Court, D. New Jersey.

Signed August 17, 2020

Edward P. Azar, Esq., Edward P. Azar, L.L.C., 2840 Route 23, Newfoundland, New Jersey 08735, Counsel for Debtor/Defendant

Guillermo J. Gonzalez, Esq., Scura, Wigfield, Heyer, Stevens & Cammarota, L.L.P, 1599 Hamburg Turnpike, Wayne, New Jersey 07470, Counsel for Plaintiffs Sean and Laurie Halaw

OPINION

ROSEMARY GAMBARDELLA, UNITED STATES BANKRUPTCY JUDGE

MATTER BEFORE THE COURT

Before the Court is the Debtor Marlon Wilding's Motion to Dismiss the Plaintiffs, Sean and Laurie Halaw's Complaint, seeking the determination that the debt owed to the Plaintiffs is non-dischargeable pursuant to § 523(a)(6) and objecting to Debtor's discharge pursuant to §§ 727(a)(3), (a)(4), and (a)(7) because it is time-barred under the Federal Rules of Bankruptcy Procedure Rule 4004 and Rule 4007, which provides that the time period for filing is sixty (60) days from the first scheduled meeting of creditors. The Plaintiffs filed Opposition to Defendant's Motion to Dismiss and have moved by Cross-Motion for Partial Summary Judgment pursuant to § 523(a)(6) seeking the dischargeability of the debt as a result of the Defendant's willful and malicious assault on Plaintiff Sean Halaw. The Plaintiffs have also filed a motion for sanctions pursuant to Fed. R. Civ. P. 37. Debtor filed Opposition to Defendant's Motion for Partial Summary Judgment and a Letter Brief in Response to Defendant's Motion to Dismiss and Opposition to Plaintiffs' Motion for Summary Judgment. This Court held a hearing on December 4, 2019. Thereafter, the parties submitted post-hearing memoranda and briefs. The following constitutes this Court's findings of fact and conclusions of law.

JURISDICTIONAL STATEMENT

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 157(b)(2)(I) and (J), and the Standing Order of Reference from the United States District Court for the District of New Jersey dated July 23, 1984 and amended September 18, 2012. Nondischargeability is an issue of a substantive right that arises under Title 11, and therefore, the Court has "core" jurisdiction over the Adversary Complaint pursuant to 28 U.S.C. § 157(b)(2)(I) and (J). See Halper v. Halper , 164 F.3d 830, 836 (3d Cir. 1999).

STATEMENT OF FACTS AND PROCEDURAL BACKGROUND

On December 22, 2017, the Defendant filed a bankruptcy petition seeking relief under Chapter 7 of the United States Bankruptcy Code. Plaintiffs Sean and Laurie Halaw ("Plaintiffs") are creditors of the Defendant by virtue of an assault and the gravamen of the action by the Plaintiffs is for pecuniary losses and damages caused by the Defendant's willful and malicious injury stemming from a bar fight that occurred on July 25, 2004. Defendant pled guilty as charged to aggravated assault with a five (5) year probationary term which was completed – purportedly causing bodily injury to Plaintiff Sean Halaw. Defendant was represented by counsel during his guilty plea and was sentenced for his crime on June 21, 2006. The Defendant's assault left Plaintiff Sean Halaw permanently disabled.

The Plaintiffs, through counsel Scura, Wigfield, Heyer, Stevens & Cammarota, L.L.P, filed the present Adversary Complaint on March 21, 2018. The Complaint alleges that Defendant's Petition was signed under oath, yet contains material inaccuracies including overstated expenses, understated income, and failure to disclose assets of the bankruptcy estate.

In addition, the Complaint alleges that Defendant failed to properly disclose codebtors on Schedule H, namely his codefendant in the criminal case wherein the debt to the Plaintiffs was incurred. On January 31, 2011, Defendant's partner in the assault, Kevin Maher, filed Chapter 7 bankruptcy bearing the case number 11-12660(RG) in this Court. On April 26, 2011, Plaintiffs filed an adversary proceeding in Kevin Maher's case, bearing Adv. Pro. No. 11-1687, and the debt owed to the Plaintiffs was declared non-dischargeable. The Complaint also asserts that the Defendant has concealed, destroyed, and failed to maintain records as well as list the debt owed to the Plaintiffs as "Claims for death or personal injury while you were intoxicated" as enumerated in the filed Petition, and for committed acts specified in §§ 727(a)(3) and (a)(4) one year before the filing of his petition and during the cases in connection with an insider. The Complaint objects to the Debtor's discharge under 11 U.S.C. §§ 727(a)(3), 727(a)(4), and 727(a)(7).

On May 8, 2018, the Defendant filed his Answer to the Complaint where he admits that the Plaintiffs are creditors however denies that they are creditors as a result of an assault and denies that the act or conduct was willful and malicious. The Debtor also admits that he entered a guilty plea to aggravated assault in the Superior Court of New Jersey Passaic County Law Division. By the Answer, the Debtor also asserts that the Plaintiffs are time barred from objecting to the discharge or dischargeability and seeks dismissal of the Complaint.

Motion to Dismiss (Doc. #23)

The Debtor filed the present Motion to Dismiss on July 31, 2019. The Debtor explained his version of what transpired on the night of the alleged assault on July 25, 2004. According to the Debtor, on that night, he was accompanied by several friends to a bar in West Milford, New Jersey known as McKeage's Tavern and shortly after they arrived, a friend that accompanied him, Kevin Maher, began a verbal altercation with Plaintiff Sean Halaw. The altercation escalated into a physical confrontation between Mr. Halaw and Mr. Maher. Mr. Wilding alleges to have consumed one (1) beer before coming to the assistance of his friend and asserts that he was a minor participant in the altercation. Mr. Wilding does not agree that his participation in the altercation caused Mr. Halaw to sustain any serious injuries. However, the Passaic County Prosecutor's Office pursued criminal charges against Mr. Wilding and Mr. Maher indicting both individuals on charges of aggravated assault. Mr. Wilding accepted a plea offer rather than face the possibility of incarceration, which caused Mr. Wilding to plead guilty to aggravated assault with a five (5) year probationary term. Mr. Wilding successfully completed probation without incident and paid the fines and penalties associated therewith. Mr. Maher on the other hand, refused to accept the plea offer and was found not guilty of any charges, including a lesser included offense of simple assault, at the conclusion of a jury trial.

Thereafter, Mr. Halaw instituted legal proceedings against Mr. Wilding, Mr. Maher, and others in the Superior Court of New Jersey, Law Division, Passaic County, Docket No. PAS-L-3214-06. Neither Mr. Wilding nor Mr. Maher appeared in the civil proceedings and after a proof hearing was conducted, default judgment was entered on August 22, 2008 against both individuals for $200,000.00 plus $10,000.00 per quod to Laurie Halaw.

The Debtor notes that in Mr. Maher's bankruptcy, Case No. 11-12660, the Plaintiffs filed an adversary proceeding under Adv. Proc. 11-1687, asserting that the judgment was not dischargeable. However, Mr. Maher defaulted in that adversary proceeding resulting in this Court, after a proof hearing, entering an Order on August 7, 2012 finding that the judgment was not dischargeable as to Mr. Maher pursuant to 11 U.S.C. § 523(a)(6).

The Debtor notes that his 11 U.S.C. § 341 hearing was scheduled and conducted on January 19, 2018. The Plaintiffs were listed as creditors in his petition but did not appear at the § 341 hearing to dispute dischargeability of their claim or timely file an adversary proceeding. The Debtor argues that the sixty (60) day-time limit expired on March 20, 2018 and as a result, the Plaintiffs are now time-barred as they filed the present Adversary Complaint on March 21, 2018.

The Debtor relies on Sadek v. Etty Cymet-Meor Jai (In re Etty Cymet-Meor Jai) , where the Debtor filed Chapter 7 bankruptcy on June 18, 2014 and the bar date sent by the Court was September 19, 2014—sixty (60) days after the first scheduled meeting of creditors. 2015 WL 350919, 2015 Bankr. LEXIS 240 (Bankr. D.N.J. 2015). On September 22, 2014, the Plaintiff filed an adversary complaint challenging the dischargeability of debt owed to him, three (3) days later on September 22, 2014. The Court determined that there was no discretion to retroactively extend the deadline for filing a dischargeability complaint and that excusable neglect and equitable tolling were not applicable under the circumstances of that case to allow the late filing of the Complaint.

Plaintiffs' Brief on Motion for Sanctions (Doc. #25)

Plaintiffs argue that, under Rule 37(a) of the Federal Rules of Civil Procedure, "a party seeking discovery must obtain a court order requiring the opposing party to make discovery sought." Pl.'s Br. at 2; Transportes Aereos de Angola v. Ronair, Inc. , 104 F.R.D. 482, 487 (1985). If no discovery is provided, Rule 37(b) may be invoked, authorizing sanctions against the party for failure to comply with the discovery order. Id. Rule 37(b)(2)(A) authorizes a list of sanctions for failure to comply with court orders.

Plaintiffs here present a series of requests, including: (1) establishing the fact that the debt at issue be non-dischargeable because it stems from pecuniary losses and damages from Defendant's willful and malicious attack on Plaintiff; (2) for Defendant to be prohibited from bringing defenses (including affirmative defenses) or introducing matters into evidence; (3) to strike Defendant's pleadings in whole; (4) to render a default judgment against the Defendant; (5) to hold Defendant or Defendant's counsel in contempt of court; and (6) to order Defendant or Defendant's counsel to pay reasonable expenses, including...