Chainy v. SmithChainy v. Smith
This is a tragic case in which Plaintiffs are the bereaved family of Mr. Dil Chainy, an innocent man killed in a horrible drunk driving hit and run accident. Defendant is the elderly mother of the drunk driver, her son who is now serving a long prison sentence. Plaintiffs, Paru Chainy, Individually and as Representative of the Estate of Dil Chainy, Deceased, and Sharu Bhau, Individually (the “Plaintiffs“) allege Defendant, Deborah Ann Smith (the “Debtor” or “Defendant“) should be responsible under
I. Jurisdiction
The Court has jurisdiction of this matter pursuant to
II. Facts and Procedure
Defendant, Mrs. Smith, lives in Marshall, Texas and is the mother of Matthew Bradley Smith. Mr. Smith lived, during the relevant time, in Dallas, Texas.1 He has not lived with his mother since high school, and is forty-five years old.2
After leaving home, Mr. Smith had several brushes with law enforcement, several of which resulted in convictions for driving while intoxicated.3 First on December 7, 2000, Mr. Smith was convicted of driving while intoxicated in Dallas County, Texas in case #MB0051694.4 Then, on July 12, 2005, Mr. Smith was convicted a second time of driving while intoxicated in Dallas County, Texas in сase #MB0547961.5 Later, on August 16, 2007, Mr. Smith was convicted a third time of driving while intoxicated in Dallas County, Texas in
Nine years later on October 22, 2019, Defendant co-signed an automobile loan at the request of her son Mr. Smith.9 Both signed a “Motor Vehicle Retail Installment Sales Contract - Simple Finance Charge” (the “Note“) listing “North Central Ford” as Lender, which was either assigned to or is now held by InTouch Credit Union.10 The Note lists “Deborah Ann Smith” of Marshall, TX as “Buyer” and “Matthew Bradley Smith” of Dallas, TX as “Co-Buyer.”11 The automobile purchased was a 2017 Ford F-150, VIN No. 1FTEW1EG5HKC16314 (the “Truck“).12 The Texas Certificate of Title issued for the Truck lists “Deborah Ann Smith” and “Matthew Bradley Smith” as owners, and lists the lienholder as InTouch Credit Union.13 This Truck was purchased because Mr. Smith‘s prior vehicle needed to be replaced after an accident in which Defendant understood he was not at fault.14
Defendant signed a declaration in support of the Motion.15 In it, Defendant states that she co-signed the Note while at work when “a courier came to my job with paperwork for me to sign.”16 She also states that “[i]n October 2019, when I signed the lоan, Matthew had not lived with me for over 25 years.”17 Further, Defendant says that “[a]t the time when the loan was made, I also did not know that Matthew had a history of arrests for alcohol-related offenses” and that “[a]fter his arrest for the manslaughter of Mr. Chainy, I learned he had numerous arrests for drunk driving, with the last arrest being in 2010, nine years before the truck loan.”18 In discovery, Defendant answered similarly that she became aware of Mr. Smith‘s arrest for driving while intoxicated “[a]round February 2020.”19 Plaintiffs allege Defendant knew of Mr. Smith‘s drunk driving history and yet still co-signed the Note.20
On August 22, 2022, Defendant filed a voluntary petition for Chapter 7 bankruptcy, together with original schedules and statements.29 On Schedule A/B, Defendant listed the Truck as a vehicle she owned and added the following comment:
“Debtor‘s son‘s truck. Was involved in an accident and is currently impounded. Debtor‘s son made payments. Debtоr‘s only connection to vehicle is that she co-signed the note and is on the title.”30
Schedule E/F listed the vehicle Note as a nonpriority, unsecured debt.31 Defendant also listed Plaintiffs’ damages claims against her as nonpriority, unsecured debts on Schedule E/F.32
On November 21, 2022, Plaintiffs filed this adversary proceeding seeking to except their claims from discharge under
III. Summary Judgment Standard
A court may grant summary judgment “if the pleadings, deрositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled
The moving party always bears the initial responsibility of informing the court of the basis for its motion and producing evidence which it believes demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. How the necessary summary judgment showing can be made depends upon which party will bear the burden of proof at trial. See Little v. Liquid Air Corp., 37 F.3d 1069, 1077 n.16 (5th Cir. 1994). “A fact is material only if its resolution would affect the outcome of the action.” Wiley v. State Farm Fire and Cas. Co., 585 F.3d 206, 210 (5th Cir. 2009); see also Renwick v. PNK Lake Charles, LLC, 901 F.3d 605, 611 (5th Cir. 2018). “All reasonable inferences must be viewed in the light most favorable” to the nonmoving party, and “any doubt must resolved in favor of the nonmoving party.” In re Louisiana Crawfish Producers, 852 F.3d 456, 462 (5th Cir. 2017) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). An actual controversy of fact exists where both parties have submitted evidence of contradictory facts. Olabisiomotosho v. City of Houston, 185 F.3d 521, 525 (5th Cir. 1999).
Courts may accept the moving party‘s version of the facts as undisputed. Alvarez v. United Parcel Serv. Co., 398 F. Supp. 2d 543, 548-49 (N.D. Tex. 2005) (overruled on other grounds); cf. F.D.I.C. v. Foxwood Mgmt. Co., No. 92-2434, 1994 WL 24911, at *6 (5th Cir. Jan. 14, 1994) (citing cases for the proposition that courts can accept the contents of a conclusory affidavit as true if they are unchallenged). This comports with the notion that courts need not hunt through the record searching for a genuine issue of material fact. See Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998); Savers Fed. Sav. & Loan Ass‘n v. Reetz, 888 F.2d 1497, 1501 (5th Cir. 1989). Once the movant has met its burden, the nonmovant may not rest upon allegations in the pleadings and still survive summary judgment. Triple Tee Golf, Inc. v. Nike, Inc., 485 F.3d 253, 261 (5th Cir. 2007). The Court does not, “in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citing Lujan v. Nat‘l Wildlife Fed‘n, 497 U.S. 871, 888 (1990).
IV. Discussion
Defendant, Mrs. Smith, asks for summary judgment and argues no genuine dispute exists as to any material fact that she did not have either the objective or subjective intent to cause the death of Mr. Chainy by co-signing the Note. Plaintiffs disagree and ask for denial of summary judgment arguing Defendant possessed objective intent to cause the death of Mr. Chainy when she co-signed the Note.37 To succeed in raising a genuine issue, Plaintiffs need to produce some evidence either that Defendant actually intended to cause Mr. Chainy‘s death, or that co-signing the Note created a substantial certainty of harm to Mr. Chainy.
When a plaintiff seeks to except a debt from a discharge granted to a debtor, the plaintiff must prove its claims by a preponderance of evidence. Grogan v. Garner, 498 U.S. 279, 286 (1991). All exceptions to discharge under
The
Plaintiffs do not appear to argue Defendant had subjective intent to harm Mr. Chainy when co-signing the Note, and there is no evidence Defendant knew or ever met Mr. Chainy. Thus, the real question is one of objective intent. The Court must determine whether Defendant‘s act of co-signing thе Note was substantially certain to cause harm in order to justify inferring she intended to inflict willful and malicious injury on Mr. Chainy. As already stated, in the Fifth Circuit neither negligence nor recklessness meets this standard for willful and malicious injury under
Other courts have also carefully weighed evidence when determining the existence of objective intent, and some of their decisions are instructive. For example, in Braziel, debts arising from a debtor‘s act of illegally selling a firearm to an individual who used it three years later to perpetrate a mass shooting did not constitute a willful and malicious injury. Leyva v. Braziel (In re Braziel), 653 B.R. 537, 558 (Bankr. N.D. Tex. 2023). The debtor in Braziel was an unlicensed dealer engaged in the business of selling firearms when he sold a firearm to a buyer. Id. at 543. The debtor did not perform a background check as required. Id. Had he done so, he would have discovered the buyer was disqualified from buying or possessing firearms. Id. Three years later, the buyer used the firearm he purchased from debtor to kill numerous people in a mass shooting. Id. The Braziel court found no evidеnce of subjective intent by the debtor to cause the mass shooting when he sold the firearm to the buyer. Id. at 558. Considering objective intent, the Braziel court found the debtor intended to illegally sell the firearm to the buyer, but that there was not a substantial certainty debtor could foresee or anticipate that the buyer would use the firearm in a mass shooting. Id. Thus, debtor‘s illegal sale of the firearm did not establish his intent to injure the plaintiffs under an objective standard. The Braziel court denied the cause of action under
The Fifth Circuit in Red, despite no finding of subjective intent, found a substantial certainty of harm under
Debtor had no subjective intent, but debtor‘s actions created a substantial certainty of harm sufficient to find objective intent. Id. at 231. Thus, debts arising from the victims’ injuries were nondischargeable under
In Delaney, a debtor‘s accidental discharge of a firearm that caused unintended bodily injuries to another did not constitute a willful and malicious injury under
Finally, in D‘Amico, two casinos alleged debts incurred by a debtor who gambled on credit were nondischargeable under
So then, is there a genuine issue of material fact in the admissible summary judgment evidence that when Mrs. Smith co-signed the Note, the resulting probability of Mr. Chainy‘s death was so great as to make his death substantially certain to occur? Mrs. Smith‘s son had a history of convictions for driving while intoxicated. However, Mr. Smith‘s last conviction for driving while intoxicated happened nine years prior to her co-signing the Note, and he had not lived with her in over twenty five years. Mrs. Smith co-signed and intended to co-sign the Note for purchase of the Truck. She did not do so in the presence of her son. She understood the Truck was a replacement vehicle purchased after an accident in which Mrs. Smith understood her son was not at fault. She did not choose or shop for the Truck. Mrs. Smith‘s declaration states that she did not know of her son‘s arrest history until aftеr Mr. Chainy‘s death.39 Her discovery response
The Court finds the summary judgment evidence submitted by Plaintiffs, even in the most favorable light, does not raise a genuine issue that Mrs. Smith knew of her son‘s driving history when she co-signed the Note. Nor does it raise a genuine issue that the probability of Mr. Chainy‘s death was so great as to make it substantially certain to occur because of Mrs. Smith‘s signature. Mrs. Smith could not foresee or anticipate with a substantial degree of certainty that co-signing the Note would mean her son would cause Mr. Chainy‘s death. This evidence in this case has much more in common with Braziel, Delaney, and D‘Amico than with Red. Thus, the Court finds that the tragic and sad injuries Plaintiffs have suffered were not willful and malicious injuries under
V. Evidence
In granting Defendant‘s Motion, the Court must consider Plaintiffs’ evidentiary objections. A summary judgment must be supported by evidence as required by
A. Defendant‘s Declaration
Plaintiffs first object to Defendant‘s declaration filed in support of the Motion.43 “An affidavit that sets forth facts that would be admissible as evidence and that is made by a witness with firsthand knowledge of, and who is competent to testify regarding, the matters asserted may be used to support or oppose a motion for summary judgment.” Lester v. Wells Fargo Bank, N.A., 805 Fed. Appx. 288, 290 (5th Cir. 2020); see also
Plaintiffs “object generally to the declaration as conclusory, derived from hearsay, lacking personal knowledge, lacking relevance, lacking authenticity as to attached documents; and not conforming to required
Plaintiffs rely on In re Reagor-Dykes Motors for the correct proposition that a self-serving affidavit may raise an issue of credibility. In re Reagor-Dykes Motors, LP, No. 18-50214-RLJ-11, 2022 WL 468065, at *4 (Bankr. N.D. Tex. Feb. 15, 2022). Fifth Circuit precedent clearly states that credibility is not a matter for summary judgment. The Fifth Circuit says:
First, “self-serving” affidavits and depositions may create fact issues even if not supported by the rest of the record. Where self-interested affidavits are otherwise competent evidence, they may not be discounted just because they happen to be self-interested. Indeed, “[e]vidence proffered by one side to ... defeat a motion for summary judgment will inevitably appear ‘self-serving.‘” Dall./Fort Worth Int‘l Airport Bd. v. INet Airport Sys., Inc., 819 F.3d 245, 253 n.14 (5th Cir. 2016). But self-serving evidence may not be disсounted on that basis alone. How much weight to credit self-interested evidence is a question of credibility, which judges may not evaluate at the summary judgment stage. E.g., Int‘l Shortstop, Inc., 939 F.2d at 1263.
Rather, self-serving evidence must only comport with the standard requirements of
Federal Rule of Civil Procedure 56 . Self-serving affidavits and declarations, like all summary judgment evidence, must “be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.”Fed. R. Civ. P. 56(c)(4) . And these facts must be particularized, not vague or conclusory. Kariuki v. Tarango, 709 F.3d 495, 505 (5th Cir. 2013).
Guzman v. Allstate Assurance Co., 18 F.4th 157, 160–61 (5th Cir. 2021).
Thus, the Court cannot consider Defendant‘s credibility, but must instead reviеw Defendant‘s declaration for compliance with
Defendant‘s declaration meets the requirements of
B. The Fifth Amendment
Plaintiff implicitly asks the Court to draw an adverse inference against Defendant because of Mr. Smith‘s exercise of his Fifth Amendment privilege during a deposition tаken by Plaintiffs. Recently, the Court considered the Fifth Amendment in a different context. See SMGB, LLC v. Cross (In re Cross), 653 B.R. 362, 375 (Bankr. E.D. Tex. 2023). There the Court explained the Fifth Amendment‘s role in a civil case as follows:
It is well settled that an adverse inference may be drawn in a civil case when a party asserts his Fifth Amendment privilege. See Baxter v. Palmigiano, 425 U.S. 308, 318, 96 S. Ct. 1551, 47 L. Ed. 2d 810 (1976) (“[T]he Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them“); In re Enron Corp. Sec., Derivative & Erisa Litig., 762 F. Supp. 2d 942, 1017 (S.D. Tex. 2010); United States ex rel. Gonzalez v. Fresenius Med. Care N.A., 571 F. Supp. 2d 758, 764 (W.D. Tex. 2008) (“[I]t is not unconstitutional to force civil defendants to choose between the negative inference drawn from their silence in a civil case and their Fifth Amendment privilege. “) (quoting [**13] United States ex rel. Shank v. Lewis Enters., Inc., No. 04-CV-4105-JPG, 2006 U.S. Dist. LEXIS 22065, 2006 WL 1064072, at *4 (S.D. Ill. Apr. 21, 2006)).
The Fifth Circuit has “limited the value of the negative inference by recognizing that a party seeking summary judgment cannot rely solely on the other party‘s exercise of his fifth amendment rights.” State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 119 n. 3 (5th Cir. 1990), citing United States v. White, 589 F.2d 1283, 1287 (5th Cir. 1979) (“[A] grant of summary judgment merely because of the invocation of the fifth amendment would unduly penalize the employment of the privilege.“). The Court finds Defendant may not withdraw his privilege, it remains intact, and the Court will draw an adverse inference against Defendant where and when appropriate. Any adverse inference drawn, however, may not be the sole evidentiary basis for granting Plaintiff‘s Motion.
Id. It is most common for an adverse inference be drawn against a party because of that party‘s exercise of the Fifth Amendment privilege. Baxter v. Palmigiano, 425 U.S. at 308. Here, the Court is presented not with this common scenario, but instead Plaintiffs impliedly ask for an adverse inference to be drawn against a party because of a non-party‘s
The Fifth Circuit has in the past permitted such an adverse inference to be drawn in a civil proceeding. Specifically, the Fifth Circuit has said:
F & D argues that inferences from the invocation of the Fifth Amendment are not allowed when a non-party asserts the privilege. We find no support for such a proposition. The Fifth Amendment “does not forbid adverse inferences against parties to civil аctions when they refuse to testify in response to probative evidence offered against them.” Baxter v. Palmigiano, 425 U.S. 308, 318, 96 S. Ct. 1551, 1558, 47 L. Ed. 2d 810 (1976). We acknowledge that no party has refused to testify in this civil action, but “[a] non-party‘s silence in a civil proceeding implicates Fifth Amendment concerns to an even lesser degree.” RAD Servs., Inc. v. Aetna Casualty & Sur. Co., 808 F.2d 271, 275 (3d Cir. 1986) (citing Rosebud Sioux Tribe v. A & P Steel, Inc., 733 F.2d 509, 521 (8th Cir.), cert. denied, 469 U.S. 1072, 105 S. Ct. 565, 83 L. Ed. 2d 506 (1984)).
FDIC v. Fid. & Deposit Co., 45 F.3d 969, 977 (5th Cir. 1995). To understand when and whether an adverse inference should be drawn against a party because of a non-party‘s exercise of the Fifth Amendment privilege, the Court finds RAD Servs., Inc. cited by the Fifth Circuit instructive. RAD Servs., Inc. v. Aetna Cas. & Sur. Co., 808 F.2d 271, 274 (3d Cir. 1986). Because the “privilege against compelled self-incrimination operates differently in civil and criminal proceedings” the Third Circuit wrote:
The аims supporting the privilege simply apply less forcefully in civil than in criminal cases. A non-party‘s silence in a civil proceeding implicates Fifth Amendment concerns to an even lesser degree. See Rosebud Sioux Tribe v. A & P Steel, Inc., 733 F.2d 509, 521 (8th Cir.), cert. denied, 469 U.S. 1072, 105 S. Ct. 565, 83 L. Ed. 2d 506 (1984). At least, then, to the extent that the policies underlying the privilege permit the trier of fact to know when a party has invoked it, we find that they likewise allow evidence of a non-party‘s refusal to testify under the facts here present.
Id. at 275. In RAD Servs., Inc., two employees of the plaintiff asserted their Fifth Amendment privilege in a deposition taken by the defendant, an insurer, in a dispute concerning insurance coverage for liability caused by the plaintiff‘s improper disposal of hazardous waste. Id. at 271. The Third Circuit, finding it appropriate under these circumstances to permit a jury to drawn an adverse inference, explained that the “policies underlying the privilege” are “(1) to discourage inhumane treatment and abuses by the government; (2) to maintain the appropriate state-individual balance of advantages; (3) to avoid subjecting persons to the cruel trilemma of self-accusations, perjury, or contempt; and (4) to protect the private enclave.” Id. at n.2.
Considering these same policies under the facts of this case, the Court finds under the reasoning of RAD Servs., Inc. and FDIC, that it may but is not required to draw an adverse inference against Defendant.49 Mr. Smith asserted the Fifth Amendment privilege, but he has already been convicted and sentenced for the crimes to which this civil proceeding relates. There seems little risk then that drawing an adverse inference would result in inhumane treatment and abuses by the
Q. Okay. So with respect to any question about your mother‘s knowledge in the past, about your history for DWI, for losing your license, things like that, how much your mother knew or didn‘t know, you‘re concerned that any testimony about those subjects might expose you to criminal liability; is that true?
A. Yes, sir.
Q. Okay. So if we were to be talking in front of the fact finder in the bankruptcy court about whether your mother and you сolluded or intentionally sought to defeat rules regarding ownership of the vehicle or operation of the vehicle or your ability to operate the vehicle, you‘re concerned that any answer you give about those subjects might expose you to criminal liability; is that true?
A. So in keeping with my Fifth Amendment plea, then I would say I -- I believe -- I -- I‘m starting to feel a little bit, Counsel, like I‘m being led or directed. There -- there was no -- there was no collusion, and Mom is an angel. Mom knows nothing about anything. I‘m a private individual.50
Plaintiffs would have the Court draw an adverse inference from these and similar questions that Defendant knew about Mr. Smith‘s history of alcohol related driving infractions, and that she somehow colluded with him to elude unspecified rules to which he was subject. The Court cannot do this where Mr. Smith affirmatively answered that Defendant “knows nothing about anything” in a video deposition taken while he was incarcerated.51
Furthermore, declining to draw an adverse inference is not dispositive in this case. Any such inference would be of limited value because, in producing sufficient evidence to raise a genuine issue of material fact in opposition to Defendant, Plaintiffs cannot rely only on such an inference. State Farm Life Ins. Co. v. Gutterman, 896 F.2d at 119 n. 3, citing United States v. White, 589 F.2d 1283, 1287 (5th Cir. 1979).
VI. Conclusion
In granting Defendant‘s Motion, the Court in no way means to ignore or minimize the heartbreak and suffering Plaintiffs have endured because of Defendant‘s son. The Court is nevertheless bound to make decisions based on precedent and evidence in applying
Based upon the Court‘s consideration of the pleadings, the summary judgment evidence submitted therewith, the relevant legal authorities, and for the reasons set forth herein, the Defendant‘s Motion is hereby GRANTED. Plaintiffs failed to demonstrate there exist genuine issues of material fact that Defendant had either the objective or subjective intent to cause willful and malicious injury through the wrоngful death of Mr. Chainy by co-signing a car loan for her son. An appropriate order consistent with this opinion shall be entered by the Court.
Signed on 05/16/2024
THE HONORABLE JOSHUA P. SEARCY
UNITED STATES BANKRUPTCY JUDGE
Notes
Wheeler v. Jones (In re Jones), 655 B.R. 884, 895 (Bankr. S.D. Tex. 2023).For example, debts related to a debtor‘s act of intentionally driving a car into a crowded bar and killing a creditor‘s relatives were found to be based on willful and malicious injuries. See Mahadevan, 617 F. Supp. 3d at 660 (citing Red v. Baum (In re Red), 96 F. App‘x 229, 230 (5th Cir. 2004)). But debts related to a debtor‘s act of illegally selling a rifle to an individual, who years later shot people, were not based on a willful and malicious injury. See Leyva et al. v. Braziel (In re Braziel), 653 B.R. 537, 558 (Bankr. N.D. Tex. 2023). The debtor intended to sell the rifle to the third party. Id. at 557. And while the sale itself was an intentional illegal act, it was not an act intended to harm the victims under either an objective or subjective standard. Id.
(1) Supporting Factual Positions. A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.
(2) Objection That a Fact Is Not Supported by Admissible Evidence. A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.
(3) Materials Not Cited. The court need consider only the cited materials, but it may consider other materials in the record.
(4) Affidavits or Declarations. An affidavit or declaration used to support or oppose a motion must be made on pеrsonal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.