Rocco v. Goldberg (In re Goldberg)
487 B.R. 112
Bankr. E.D.N.Y.2013Background
- Mary J. Rocco (Plaintiff) sued Jeffrey L. Goldberg, P.C. (Debtor) in bankruptcy adversary proceeding for 523(a)(6) dischargeability.
- Plaintiff previously obtained a NYSDHR discrimination and retaliation judgment against Debtor, his firm, and Eric Sanders for pregnancy discrimination and retaliation, totaling $244,665.05.
- ALJ conclusions found discriminatory treatment associated with Plaintiff's pregnancies and retaliatory termination, with credibility issues assigned to Debtor's explanations.
- Judgment entered August 8, 2011; Plaintiff later sought to except the judgment debt from discharge in Debtor’s Chapter 7/Chapter 11 case.
- Debtor’s bankruptcy case was filed December 22, 2011 (converted to Chapter 11 on March 28, 2012); Plaintiff moved for summary judgment on collateral estoppel grounds.
- Court held collateral estoppel applies to underlying factual findings but not to legal conclusions of the NYSHRL judgment; nonetheless, the state-fact findings support willful and malicious injury under 523(a)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether collateral estoppel applies in 523(a)(6) dischargeability | Rocco seeks preclusion of re-litigation of willful and malicious injury based on state judgment findings. | Debtor argues NYSHRL judgment findings do not establish 523(a)(6) elements and collateral estoppel should not apply. | Collateral estoppel applies to material factual findings but not the legal conclusions; summary judgment granted on non-dischargeability based on underlying facts. |
| Whether NYSHRL discrimination/retaliation elements are identical to 523(a)(6) elements | Elements are sufficiently aligned to support non-dischargeability. | Legal elements do not perfectly map to 523(a)(6); cannot rely solely on NYSHRL judgment. | Identity of issues not complete; collateral estoppel may apply to facts, but not per se to legal conclusions; requires analysis of willful/malicious injury. |
| Whether the underlying facts show willful and malicious injury under 523(a)(6) | Discriminatory/retaliatory acts were intentional and thus willful and malicious. | Neither the state court nor the evidence proves willful and malicious injury under 523(a)(6) on its own. | Undisputed state facts show deliberate, intentional injury and malicious conduct; the debt is non-dischargeable. |
| Whether malice is required or proven in the NYSHRL context for 523(a)(6) | Malice may be implied from discriminatory conduct and surrounding circumstances. | Malice is not expressly found in the NYSHRL judgment and cannot be presumed. | Court finds malice can be inferred from surrounding circumstances; however, collateral estoppel does not bind the court on malice itself, but facts support willful and malicious injury. |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (U.S. 1991) (standard for dischargeability with preponderance burden)
- Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75 (U.S. 1984) (full faith and credit for state judgments in 1738 analysis)
- Denton v. Hyman, 335 B.R. 32 (S.D.N.Y. 2005) (collateral estoppel identity and sufficiency standards in 523(a)(6))
- Holcomb v. Iona College, 521 F.3d 130 (2d Cir. 2008) (intent required in disparate treatment under NYSHRL)
- Lewis v. City of Chicago, 560 U.S. 205 (U.S. 2010) (disparate-treatment requires deliberate discrimination)
- In re Wisell, 2011 WL 3607614 (Bankr. E.D.N.Y. 2011) (collateral estoppel in 523(a)(6) context requires clear findings)