Flora v. TagliaferriFlora v. Tagliaferri
MEMORANDUM OPINION
Pending before the court is a motion for summary judgment regarding the adversary complaint filed by Anthony Flora (the “Plaintiff“) against Angelina Rose Tagliaferri (the “Defendant“). The Plaintiff seeks an order finding that his judgment lien against the Defendant is excepted from discharge pursuant to
For the reasons stated herein, the court will deny the Plaintiff‘s motion for summary judgment.
I. BACKGROUND
The facts of this case are largely undisputed. This proceeding has its origins in the execution of William Flora‘s Last Will and Testament (the “Will“). On June 17, 2010, William Flora, a resident of New Jersey, executed his Will. He named both Angelina Rose Tagliaferri and Edward Tagliaferri, as co-executors of his Estate (the “Estate“). They were to sell and convert into money the entire Estate, then distribute the assets in accordance with the Will. In the event that one co-executor pre-deceased William Flora or the other co-executor would serve as the sole executor of his Estate. Among his other bequeaths and devises, William Flora granted Angelina Rose Tagliaferri one-third of his Estate. Additionally, he devised the residue and remainder of the Estate to Anthony Flora, his brother, unless Anthony pre-deceased William or died in a common accident.
William Flora subsequently died. On August 31, 2011, Edward Tagliaferri and Angelina Rose Tagliaferri were appointed as co-executors of the Estate, but Edward Tagliaferri predeceased Angelina Rose Tagliaferri. Ms. Tagliaferri thus became the sole Executrix of the Estate. At some point, Mr. Flora became unhappy with Ms. Tagliaferri‘s administration of the Estate and brought an action in New Jersey seeking to remove Ms. Tagliaferri from her role as Executrix.
On July 28, 2015, the Superior Court of New Jersey Chancery Division – Probate, Part, Hudson County (the “New Jersey Court“) ordered the removal of Ms. Tagliaferri as Executrix of the Estate “for cause” (the “July 28 Order“). Notably, the New Jersey Court entered its order in the absence of opposition from Ms. Tagliaferri. Also, it did not clarify what constituted “cause” but merely refenced “N.J.S. 3B:14-21a” in the caption. The July 28 Order concurrently substituted Ms. Tagliaferri as Executrix in favor of Anthony Flora as Administrator – C.T.A.
In response to Ms. Tagliaferri‘s inaction regarding the July 28 Order, Mr. Flora filed another complaint with the New Jersey Court. In this summary action, Mr. Flora sought a judgment against Ms. Tagliaferri for the sums of money alleged to have been defalcated by Ms. Tagliaferri due to her noncompliance with the July 28 Order. On April 27, 2017, Mr. Flora, in his capacity as Administrator of the Estate, received a judgment against Ms. Tagliaferri in the Superior Court of New Jersey, Chancery Division – Probate, Part, Hudson County, Docket Number 303509 (the “April 27 Judgment“). Again, Ms. Tagliaferri did not oppose the action.
Specifically, the New Jersey Court found that Ms. Tagliaferri failed to comply with the July 28 Order. She made no filings nor provided any documentation or information as the New Jersey Court previously ordered. The New Jersey Court granted Mr. Flora, in his administrative capacity, a judgment in the amount of $138,840.91. In its brief explanation for the April 27 Judgment, the New Jersey Court stated that Ms. Tagliaferri “failed to obey two prior Orders of this Court to Account for her administration of the Estate whilst Executrix thereof” and that she was “removed as Executrix for cause.”
On October 16, 2017, Mr. Flora domesticated and recorded an Abstract of Judgment in the Circuit Court of Morgan County, West Virginia. The clerk filed the Abstract of Judgment in the amount of $138,840.91. This summary statement referenced the date and amount of the April 27 Judgment; however, it contained no evidence concerning the issues that were presented to the New Jersey Court on which the judgment was based. The entire amount of the April 27 Judgment remains unpaid and outstanding by Ms. Tagliaferri.
On May 20, 2019, Ms. Tagliaferri filed her Voluntary Petition for Chapter 7 relief. On July 19, 2019, she filed a motion to avoid Mr. Flora‘s judgment lien. On August 1, 2019, Mr. Flora, in his individual capacity, filed a response opposing the motion. On September 3, 2019, Mr. Flora, in his individual capacity, filed his Complaint, Objecting to the Debtor‘s Discharge Pursuant to
II. STANDARD OF REVIEW
If the moving party shows that there is no genuine dispute of material fact, the nonmoving party must set forth specific facts that demonstrate the existence of a genuine dispute of fact for trial. Celotex Corp., 477 U.S. at 322-23. The court is required to view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Shaw, 13 F.3d at 798. However, the court‘s role is not “to weigh the evidence and determine the truth of the matter [but to] determine whether there is a need for a trial.” Anderson, 477 U.S. at 249-50. Nor should the court make credibility determinations. Sosebee v. Murphy, 797 F.2d 179, 182 (4th Cir. 1986). If no genuine issue of material fact exists, the court has a duty to prevent claims and defenses not supported in fact from proceeding to trial. Celotex Corp., 477 U.S. at 317, 323-24.
III. DISCUSSION
In this case, Mr. Flora, seemingly in his individual capacity1, claims that the $138,840.91 judgment lien is excepted from Ms. Tagliaferri‘s Chapter 7 discharge pursuant to
In opposition, Ms. Tagliaferri claims that the court should deny summary judgment because there is a genuine dispute of material fact, and the Plaintiff is not entitled to judgment as a matter of law. Ms. Tagliaferri asserts numerous reasons why
A presumption exists that all debts owed by the debtor are dischargeable unless the party contending otherwise proves non-dischargeability.
Section 523(a)(4) of the Bankruptcy Code provides that “any debt . . . (4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny; . . .” is excepted from discharge.
The parties do not dispute the first element, whether Defendant acted in a fiduciary capacity while she acted as the Executrix of the Estate. The court therefore concludes that there is no genuine dispute of material fact as to the first element of the
The Plaintiff argues that he has established all the necessary elements under
the New Jersey Court made a finding or otherwise argue how the requisite state of mind standard has been met. However, neither party sufficiently addressed this issue.
Since Congress included defalcation as an exception to discharge, legal authorities struggled to define the term in the context of
Notably, the Supreme Court in Bullock included a state of mind requirement for defalcation. 569 U.S. at 269-73. In the past, a circuit split created various state of mind requirements. The Fourth Circuit held that the state of mind element to defalcation merely required “an innocent mistake which results in misappropriation or failure to account.” In re Uwimana, 274 F.3d at 811. Resolving a circuit split in 2013, the Supreme Court articulated that term “defalcation” in
The Plaintiff failed to demonstrate how the Defendant knowingly, or with gross recklessness, failed to account for the Estate. The Plaintiff mistakenly relies on the outdated In re Uwimana standard which merely required negligence or a mistake. Using the standard articulated in Bullock, the court cannot grant summary judgment based on the record before it. Specifically, there is no evidentiary basis before this court to conclude that the New Jersey Court found that Ms. Tagliaferri acted with the requisite state of mind to commit an act of defalcation under
In its July 28 Order, the New Jersey Court never articulated what constituted “cause” for removing Ms. Tagliaferri, nor made an explicit finding of her state of mind. Furthermore, although the New Jersey Court referenced
Therefore, the court is unable to make any determination regarding Defendant‘s state of mind leading up to the April 27 Judgment. Specifically, the court cannot determine whether the Defendant acted with knowledge of, or gross recklessness in respect to, the improper nature of the relevant fiduciary behavior by a preponderance of the evidence. This question of fact and any questions of credibility may be best determined at trial, rather than at the summary judgment stage. See Anderson, 477 U.S. at 255. Accordingly, the court concludes that the Plaintiff failed to show that there is no genuine dispute of material fact as to the second element of his
IV. CONCLUSION
Despite Mr. Flora‘s request that the court declare the debt of $138,840.91 non-dischargeable based on the preclusive effect of the prior state court judgment, the court is unable to ascertain Ms. Tagliaferri‘s state of mind. There is no evidence
David L. Bissett
United States Bankruptcy Judge