Plaza v. Heilbron (In re Heilbron)

655 B.R. 277

IN RE: Michael HEILBRON, Debtor.

Benjamin Plaza, Jr., Plaintiff, v. Michael Heilbron, Defendant.

Case No. 18-42486-ess

Adv. Pro. No. 18-01055-ess

United States Bankruptcy Court, E.D. New York

Signed September 28, 2023

Eric Edward Rothstein, Esq., Rothstein Law PLLC, The Woolworth Building, 233 Broadway, Suite 900, New York, NY 10279, Attorneys for Benjamin Plaza, Jr.

George Bassias, Esq., George Bassias Attorney LLC, 21-83 Steinway, Astoria, New York 11105, Attorneys for Michael Heilbron.

MEMORANDUM DECISION AFTER TRIAL

HONORABLE ELIZABETH S. STONG, UNITED STATES BANKRUPTCY JUDGE

Introduction

This adversary proceeding arises from a fistfight between the debtor, Michael Heilbron, and the plaintiff, Benjamin Plaza, Jr., on June 29, 2008; Mr. Heilbron's criminal plea to a single misdemeanor assault charge; a default judgment in Mr. Plaza's personal injury action against Mr. Heilbron; and now, Mr. Heilbron's attempt to discharge the default judgment debt in a Chapter 7 bankruptcy case.

On May 7, 2018, Mr. Plaza commenced this adversary proceeding by filing a complaint against Mr. Heilbron, the debtor in the underlying Chapter 7 case. Mr. Plaza seeks a determination that the debt that Mr. Heilbron owes to him pursuant to a default judgment for civil claims for assault and battery (the "Default Judgment"), entered in a state court action entitled Benjamin Plaza, Jr. v. Michael Heilbron, in New York Supreme Court, Queens County (the "Queens Supreme Court Action"), is nondischargeable under Bankruptcy Code Section 523(a)(6).

On December 20, 2018, Mr. Plaza filed a Motion for Summary Judgment (the "Summary Judgment Motion" or "Summ. J. Mot."). In the Summary Judgment Motion, Mr. Plaza argued that there was no genuine issue of material fact as to whether the debt resulted from a "willful and malicious injury by the debtor to another entity" under Section 523(a)(6), because the doctrine of collateral estoppel prevented Mr. Heilbron from contesting those elements, in light of his guilty plea to a misdemeanor criminal charge of Assault in the Third Degree in Queens Criminal Court, and the Default Judgment in the Queens Supreme Court Action.

On January 15, 2020, this Court entered an order granting Mr. Plaza's Summary Judgment Motion, and Mr. Heilbron appealed from that judgment. On appeal, the District Court found that neither Mr. Heilbron's guilty plea nor the Default Judgment established that Mr. Heilbron had acted in a "willful and malicious" manner and remanded for trial on the twin issues of whether Mr. Heilbron had acted willfully and whether he had acted maliciously.

On February 23 and 24, 2023, this Court held trial on those questions. The Court now decides whether Mr. Plaza has met his burden to show that Mr. Heilbron's conduct was "willful" and "malicious." If so, then Mr. Heilbron's debt to Mr. Plaza will be excluded from the scope of Mr. Heilbron's Chapter 7 bankruptcy discharge. But if not, then the debt will be discharged.

Jurisdiction and Authority to Enter a Final Judgment

Mr. Plaza's nondischargeability claim arises under Bankruptcy Code Section 523(a)(6) and is a core matter. 28 U.S.C. § 157(b)(2)(I). As a core matter, this Court has constitutional authority to enter a final judgment because the claim alleged in the amended complaint stems "from the bankruptcy itself." Stern v. Marshall, 564 U.S. 462, 499, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011).

For these reasons, this Court has jurisdiction to consider and enter judgment on this claim under Judiciary Code Section 1334(b) and the Standing Order of Reference dated August 28, 1986, as amended by Order dated December 5, 2012, of the United States District Court for the Eastern District of New York.

Background and Procedural History

This nondischargeability action arises from an altercation that occurred in 2008, the guilty plea that Mr. Heilbron entered in the resulting criminal case, and a civil default judgment entered in the related lawsuit instituted by Mr. Plaza in 2009. Because they provide the context both for this adversary proceeding and the issues presented at trial, the circumstances of these events are summarized below.

The Altercation

More than fifteen years ago, on the evening of June 29, 2008, Mr. Heilbron punched Mr. Plaza in the chin, breaking his jaw. His injury is described in the record as "a fractured mandible that required open reduction, [and] internal fixation" of his jaw. Am. Compl. ¶ 8, ECF No. 6. Soon thereafter, Mr. Heilbron was placed under arrest by the New York City Police Department. Am. Compl. ¶ 11.

The Queens Criminal Court Action

On July 1, 2008, Mr. Heilbron was charged with two counts of Assault in the Second Degree, Penal Law §§ 120.05(1) and (2), one count of Assault in the Third Degree, Penal Law § 120.00(1), and one count of Harassment in the Second Degree, Penal Law § 240.26(1) (the "Queens Criminal Court Action"). Am. Compl. ¶ 12.

The criminal complaint that resulted from Mr. Heilbron's arrest, sworn to by Detective Victor Herrera of Queens Detective Area 114 (the "Criminal Complaint" or "Crim. Compl."), states that on June 29, 2008 between 10:30 PM and 10:40 PM, at the northeast intersection of 78th Street and 21st Avenue in Queens, New York, Mr. Heilbron committed an assault in violation of New York Penal Law Section 120.05-1 (Assault in the Second Degree), Section 120.05-2 (Assault in the Second Degree), Section 120.00-1 (Assault in the Third Degree), and Section 240.26-1 (Harassment in the Second Degree). Summ. J. Mot. Exh. A, ECF No. 13-1 (Crim. Compl.).

The Criminal Complaint identifies Mr. Plaza as the source of Detective Herrera's information, and continues:

[A]n unapprehended other struck [Mr. Plaza] in the side of his head with an unknown hard object causing [Mr. Plaza] to fall forward and [Mr. Heilbron] proceeded to punch [Mr. Plaza] in his chin causing his jaw to break into two pieces and his tooth to break and a laceration to [Mr. Plaza's] right ear as well as substantial pain....

[Detective Herrera] states that [Mr. Plaza] was admitted to a local area hospital where he received surgery for [his] jaw.

[Detective Herrera] states that he is further informed by [Mr. Plaza] that the abovementioned actions of [Mr. Heilbron] and unapprehended other caused him annoyance and alarm.

Summ. J. Mot. Exh. A., Crim. Compl. at 1.

More than seven months later, on February 5, 2009, Mr. Heilbron appeared before the Honorable Dorothy Chin Brandt of the Criminal Court of the City of New York, County of Queens: Part AP-6 (the "Queens Criminal Court") for a plea and sentencing hearing. Summ. J. Mot. Exh. B, ECF No. 13-2 (the "Plea Hearing Transcript" or "Plea Hrg. Tr."). At that hearing, at which he was represented by counsel, Mr. Heilbron pleaded guilty to a single charge of Assault in the Third Degree, a class "A" misdemeanor. Id. In entering his plea, he responded to a series of questions from Judge Brandt, as follows:

The Court: You are pleading guilty to assault in the third degree, a violation of 120.00 of the penal law. This is an A misdemeanor. It subjects you to a criminal record. Are you pleading guilty of your own free will?

[Mr. Heilbron]: Yes.

The Court: On or about [6]/29 of last year, about 10:30 in the evening at 78th Street and 21st Avenue in Queens, you knowingly assaulted another person and caused injury to that person, is all this true?

[Mr. Heilbron]: Yes.

The Court: Is that acceptable to the People?

[The People]: Yes.

The Court: The sentence is a conditional discharge, you have to stay out of trouble for one year, take the 12 week anger management program, and perform five days community service. You have to pay $200.00 in court fees, $50.00 in DNA fees, total of $250.00. And, you must obey an order of protection. Queens Compliance Part on April 8th, to show proof and to pay. If you need an extension you will be given an extension.

Plea Hrg. Tr. at 2:9-3:8.

About three weeks later, on February 27, 2009, the Queens Criminal Court issued a Certificate of Disposition, No. 86659, which provided that Mr. Heilbron agreed to plead guilty to a single charge of a Class A misdemeanor, all other charges were dropped, and his sentence did not include a period of incarceration. Plea Hrg. Tr. at 4.

New York Penal Law Section 120.00, pursuant to which Mr. Heilbron entered his plea, has three disjunctive subsections, as follows:

A person is guilty of assault in the third degree when:

1. With intent to cause physical injury to another person, he causes such injury to such person or to a third person; or

2. He recklessly causes physical injury to another person; or

3. With criminal negligence, he causes physical injury to another person by means of a deadly weapon or a dangerous instrument.

N.Y. Penal Law § 120.00. Neither the court nor Mr. Heilbron referred to, and his plea did not identify, a subsection of this statute to which Mr. Heilbron pleaded guilty.

The Queens Supreme Court Action

On or about March 30, 2009, about two months after Mr. Heilbron entered his guilty plea, Mr. Plaza sued Mr. Heilbron in the Supreme Court of the State of New York, County of Queens, seeking monetary damages arising from the assault. Summ. J. Mot. Exh. D, ECF No. 13-5 (the "Verified Complaint"). On June 12, 2009, the Verified Summons and Verified Complaint were served by Samara Kane on Jack Sheldon, a co-worker of Mr. Heilbron at the "Carlyle Hotel-Stewarding [Department]," at the 77th Street Service Entrance. Summ. J. Mot. Exh. G at p. 33, ECF No. 13-8. And on June 15, 2009, Ms. Kane mailed a copy of the Verified Summons and Verified Complaint to Mr. Heilbron at his place of business. Id.

In the Verified Complaint, Mr. Plaza alleges causes of action for assault and battery and seeks an award of costs. He states that, on June 29, 2008, Mr. Heilbron "assaulted [Mr. Plaza], ... causing him to sustain severe and permanent injuries." Verified Complaint, ¶ 3. Mr. Plaza further alleges, "[t]hat the aforesaid conduct by ...