Townsend v. Ganci, 16–CV–2814 (JFB)

566 B.R. 129

Raymond A. TOWNSEND, Appellant,

v.Geralyn GANCI, Appellee.

No 16–CV–2814 (JFB)

United States District Court, E.D. New York.

Signed February 27, 2017

Raymond A. Townsend, pro se.

Geralyn Ganci, pro se.

MEMORANDUM AND ORDER

JOSEPH F. BIANCO, United States District Judge

The instant case is a pro se appeal by Raymond A. Townsend ("Townsend" or "appellant") from the May 16, 2016 summary judgment order of the Honorable Carla E. Craig, United States Bankruptcy Judge, holding that the debt owed by appellant to pro se appellee Geralyn Ganci ("Ganci" or "appellee") is non-dischargeable pursuant to the Bankruptcy Code, 11 U.S.C. § 523(a)(6). In re Townsend , 550 B.R. 220 (Bankr. E.D.N.Y. 2016). The debt at issue stems from a civil judgment following a jury trial before this Court in Ganci v. U.S. Limousine Service Ltd., et al. , 10–CV–3027 (JFB) (AKT) (E.D.N.Y.) (the "Civil Case"). On September 16, 2014, the jury found Townsend liable to Ganci for employment discrimination, in violation of Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq. ("Title VII"), and New York law. (Civil Case, ECF No. 119.) The jury awarded Ganci $450,000 in compensatory damages and $100,000 in punitive damages against Townsend, and it also found that Townsend was not liable for intentional infliction of emotional distress ("IIED"). (Id. ) The Court subsequently set aside the punitive damages award after determining that punitive damages against Townsend were not available under Title VII or New York law (id ., ECF No. 143), and it granted Ganci $167,478.50 in attorneys' fees and $3,168 in costs, Ganci v. U.S. Limousine Service Ltd. , 2015 WL 1529772, at *8 (E.D.N.Y. Apr. 2, 2015).

The Clerk of the Court entered final judgment in the Civil Case on April 8, 2015. (Civil Case, ECF No. 148.) Thereafter, appellant filed for Chapter 7 bankruptcy on July 27, 2015. See Townsend , 550 B.R. at 223. Appellee then commenced an adversary proceeding seeking a determination that the Civil Case judgment is non-dischargeable (the "Adversary Proceeding"), id. at 224, which led to this appeal.

For the reasons set forth below, having conducted a de novo review of the Bankruptcy Court's decision, the Court concludes that appellant's arguments are without merit and affirms the order of the Bankruptcy Court in its entirety.

I. BACKGROUND

The Court summarizes the facts and procedural history relevant to the instant appeal.

A. The Civil Case

Ganci filed suit against Townsend in the Civil Case on July 1, 2010 alleging claims of employment discrimination based on sexual harassment, hostile work environment, and retaliation; as well as claims for IIED and negligent infliction of emotional distress. (Civil Case, ECF No. 1.) Townsend moved for summary judgment and spoliation sanctions on December 1, 2011 (id ., ECF No. 38), and Ganci cross-moved for summary judgment on January 19, 2012 (id ., ECF No. 43). In an oral ruling on September 10, 2012, this Court denied the parties' motions. (Id ., ECF No. 54.) Of note, the Court held that a rational jury could find for Ganci on her employment discrimination claims because she had "stated under oath that Mr. Townsend sexually assaulted her on one occasion, that he sent unwanted, unsolicited, and unwelcome text messages and voice mails of sexually explicit nature over an extended period of time and attempted to compel sexual relations with her during that extended period of time." (Id ., ECF No. 57 at 12:17–22.)

The Civil Case proceeded to a six-day jury trial from September 3, 2014 to September 16, 2014 on plaintiff's employment discrimination and IIED claims. (See id. , ECF Nos. 105–16.) The jury returned a verdict on September 16, 2014, finding for Ganci on the employment discrimination claims and for Townsend on the IIED claim. (Id ., ECF No. 119.) On the verdict form, the jury responded affirmatively to, inter alia , the following questions:

1. Did plaintiff prove, by a preponderance of the evidence, that Raymond Townsend subjected her to offensive acts or statements about sex?

2. Did plaintiff prove, by a preponderance of the evidence, that she did not welcome the offensive acts or statements, which means that plaintiff did not directly or indirectly invite or solicit them by her own acts or statements?

3. Did plaintiff prove, by a preponderance of the evidence, that the offensive acts or statements were so severe or pervasive that they materially altered the terms and conditions of her employment?

4. Did plaintiff prove, by a preponderance of the evidence, that a reasonable person—not someone who is overly sensitive—would have found that the offensive acts or statements materially altered the terms and conditions of the person's employment, which means that a reasonable person would have found the working conditions hostile and abusive?

5. Did plaintiff prove, by a preponderance of the evidence, that she herself believed that the offensive acts or statements materially altered the terms and conditions of her employment, meaning that plaintiff believed that her work environment was hostile or abusive?

7. Did plaintiff prove, by a preponderance of the evidence, that she was constructively discharged?

13. Did plaintiff prove, by a preponderance of the evidence, that Raymond Townsend acted with malicious intent to violate plaintiff's rights, or with reckless disregard of plaintiff's rights, such that punitive damages are warranted against Raymond Townsend?

(Id. ) The jury responded in the negative to the following questions:

6. Did plaintiff prove, by a preponderance of the evidence, that she was terminated because plaintiff rejected Raymond Townsend's sexual advances?

9. Did plaintiff prove, by a preponderance of the evidence, her claim that Raymond Townsend intentionally inflicted emotional distress upon her?

(Id. )

The jury awarded Ganci $450,000 in compensatory damages and $100,000 in punitive damages against Townsend (id. ); however, in a subsequent oral ruling, the Court set aside the punitive damages award after determining that punitive damages against Townsend were not available under Title VII or New York law (id ., ECF No. 143). The Court also granted Ganci $167,478.50 in attorneys' fees and $3,168 in costs, Ganci , 2015 WL 1529772, at *8, and the Clerk of the Court entered final judgment in the Civil Case on April 8, 2015 (Civil Case, ECF No. 148).

B. The Adversary Proceeding

After Townsend filed a voluntary petition under chapter 7 of the Bankruptcy Code on July 27, 2015, Ganci commenced the Adversary Proceeding on September 18, 2015 seeking a determination that the Civil Case judgment is non-dischargeable pursuant to 11 U.S.C. § 523(a)(6) (" Section 523(a)(6)"). Townsend , 550 B.R. at 223–24. Ganci moved for summary judgment on February 26, 2016, and the Bankruptcy Court granted her motion on May 16, 2016. Id. at 224, 228.

The Bankruptcy Court held that (1) collateral estoppel precluded Townsend from re-litigating in the Adversary Proceeding identical issues that were decided in the Civil Case; and (2) the Civil Case judgment was non-dischargeable under Section 523(a)(6) because that debt resulted from "willful and malicious injury" by Townsend to Ganci. Id. at 225–28 (quoting 11 U.S.C. § 523(a)(6) ).

C. The Appeal

On June 2, 2016, Townsend filed a pro se Notice of Appeal of the Bankruptcy Court's judgment. The Notice of Bankruptcy Record Received was filed on October 14, 2016, and appellant filed his brief on December 14, 2016. Appellee, also proceeding pro se , did not file a brief within the time period specified by Federal Rule of Bankruptcy Procedure 8018. The Court has fully considered all of the submissions in this appeal.

II. STANDARD OF REVIEW

The Court will review the Bankruptcy Court's legal conclusions de novo and its factual findings for clear error. See In re Hyman , 502 F.3d 61, 65 (2d Cir. 2007) ; see also In re Bayshore Wire Prods. Corp. , 209 F.3d 100, 103 (2d Cir. 2000) ("Like the District Court, we review the Bankruptcy Court's findings of fact for clear error, ... its conclusions of law de novo, ... its decision to award costs, attorney's fees, and damages for abuse of discretion.").

A bankruptcy court's decision to grant summary judgment based upon undisputed facts is reviewed de novo. See In re Treco , 240 F.3d 148, 155 (2d Cir. 2001) ("[W]ith respect to the grant of partial summary judgment, the posture in which this appeal reaches us, we review de novo whether, viewing the record in the light most favorable to the non-movant ... any genuine and disputed issue of material fact underlies the bankruptcy court's decision."); In re Perosio , 364 B.R. 868, 871 (N.D.N.Y. 2006) ("This Court also reviews the Bankruptcy Court's denial of Appellants' motions for summary judgment de novo. "); accord Beier v. Beier , No. 94 Civ. 2677 (SS), 1995 WL 60026, at *2 (S.D.N.Y. Feb. 14, 1995).

III. DISCUSSION

On appeal, Townsend does not contest the collateral estoppel determination of the Bankruptcy Court. Instead, his challenge is limited to the non-dischargeability holding, and he argues specifically that the Bankruptcy Court improperly relied on In re Spagnola , 473 B.R. 518 (Bankr. S.D.N.Y. 2012), to find that the Civil Case judgment resulted from willful injury by Townsend to Ganci. In addition, appellant claims that the jury's finding of non-liability on the IIED claim demonstrates that it concluded that the employment discrimination conduct was not willful.

For the reasons that follow, having conducted a de novo review of the Bankruptcy Court's decision, the Court disagrees with appellant and affirms the order of the Bankruptcy Court.

A. Applicable Law

The Bankruptcy Code discharges preexisting debts in order to give "honest but unfortunate" debtors a fresh start. Cohen v. de la Cruz , 523 U.S. 213, 217, 118 S.Ct. 1212, 140 L.Ed.2d 341 (1998). However, the Bankruptcy Code contains numerous exceptions to the "fresh start" principle and denies relief to debts resulting from certain types of undesirable...