Nicole LeCann v. Sharon Cobham

Oct 14, 2016
16-1010
Versions:

Teddie Lee Grant, Appellant Pro Se. Donald John Zelenka, Senior Assistant Attorney General, James Anthony Mabry, Assistant Attorney General, Columbia, South Carolina, for Appellee.

Before KEENAN, FLOYD, and HARRIS, Circuit Judges.

Unpublished opinions are not binding precedent in this circuit.

PER CURIAM:

Teddie Lee Grant seeks to appeal the district court‘s order accepting the recommendation of the magistrate judge and denying relief on his 28 U.S.C. § 2254 (2012) petition. The order is not appealable unless a circuit justice or judge issues a certificate of appealability. 28 U.S.C. § 2253(c)(1)(A) (2012). A certificate of appealability will not issue absent “a substantial showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2) (2012). When the district court denies relief on the merits, a prisoner satisfies this standard by demonstrating that reasonable jurists would find that the district court‘s assessment of the constitutional claims is debatable or wrong. Slack v. McDaniel, 529 U.S. 473, 484, 120 S.Ct. 1595, 146 L.Ed.2d 542 (2000); see Miller-El v. Cockrell, 537 U.S. 322, 336-38, 123 S.Ct. 1029, 154 L.Ed.2d 931 (2003). When the district court denies relief on procedural grounds, the prisoner must demonstrate both that the dispositive procedural ruling is debatable, and that the petition states a debatable claim of the denial of a constitutional right. Slack, 529 U.S. at 484-85, 120 S.Ct. 1595.

We have independently reviewed the record and conclude that Grant has not made the requisite showing. Accordingly, we deny a certificate of appealability, deny leave to proceed in forma pauperis, and dismiss the appeal. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before this court and argument would not aid the decisional process.

DISMISSED

Joshua H. Bennett, Roberta King Latham, Jasmine M. Pitt, BENNETT & GUTHRIE, PLLC, Winston-Salem, North Carolina, for Appellant. Robert E. Fields III, Samuel Pinero II, OAK CITY LAW LLP, Raleigh, North Carolina; Jason L. Hendren, Rebecca F. Redwine, HENDREN & MALONE, PLLC, Raleigh, North Carolina, for Appellees.

Before KING, DUNCAN, and FLOYD, Circuit Judges.

Unpublished opinions are not binding precedent in this circuit.

PER CURIAM:

Sharon J. Cobham appeals the district court‘s order affirming, on alternate grounds, the bankruptcy court‘s order determining that the judgment debt at issue is nondischargeable in Cobham‘s Chapter 7 proceeding. We affirm the determination of nondischargeability.

Cobham and Nicole LeCann are both dentists practicing in North Carolina and were, for some years, business partners. Together, they owned five dental practices—all professional corporations—and three limited liability real estate companies, all in the Winston-Salem area. Cobham served as president of the dental practices. Eventually, LeCann learned that Cobham had been taking funds from the businesses, either in the form of unauthorized loans or payments for personal expenses, and sued her in North Carolina state court, asserting both personal and derivative causes of action.

The state court ordered a dissolution and appointed a receiver to manage and wind up the affairs. The court later awarded judgment in favor of LeCann and the businesses, finding that “Cobham wrongfully and repeatedly transferred money out of [the businesses] by making loans to [her own practice] or herself, receiving unauthorized expense reimbursements and providing unjustified reimbursements to herself,” and awarded compensatory damages in the amount of $553,888. The court also found that punitive damages should be entered against Cobham based on her “willful or wanton conduct and intentional constructive fraud.”

In October 2013, Cobham filed a Chapter 7 petition. LeCann filed the underlying complaint seeking a determination that Cobham‘s debt is nondischargeable under 11 U.S.C. §§ 523(a)(4), (6) (2012). The bankruptcy court determined that the state court judgment was entitled to collateral estoppel effect and that the judgment is nondischargeable because it resulted from Cobham‘s “willful and malicious injury,” within the meaning of § 523(a)(6). See Kawaauhau v. Geiger, 523 U.S. 57, 61, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998). The court found it unnecessary to rule on the applicability of § 523(a)(4) (defalcation of fiduciary obligations).

On appeal, the district court found that the bankruptcy court erred in determining that the debt arose out of a willful and malicious injury. Therefore, the district court concluded, § 523(a)(6) did not apply. Nevertheless, the court determined that the debt was incurred as the result of a defalcation while Cobham was acting in a fiduciary capacity; accordingly, the court determined that the debt is nondischargeable under § 523(a)(4). Cobham appeals.

We review the judgment of a district court sitting in review of a bankruptcy court de novo, applying the same standards of review that were applied in the district court. In re Shangra-La, Inc., 167 F.3d 843, 847 (4th Cir. 1999). Specifically, the bankruptcy court‘s factual findings are reviewed for clear error, and legal determinations are reviewed de novo. Fed. R. Bankr. P. 8013; In re K & L Lakeland, Inc., 128 F.3d 203, 206 (4th Cir. 1997).

We have reviewed the record included on appeal, and the parties’ briefs, and find that the bankruptcy court correctly determined that LeCann met her burden of establishing that the debt at issue is nondischargeable under § 523(a)(6). See Grogan v. Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) (holding that the party challenging the dischargeability of a debt bears the burden of proving the debt nondischargeable by a preponderance of the evidence). Accordingly, we affirm on the bankruptcy court‘s reasoning. In re Cobham (LeCann v. Cobham), 528 B.R. 283 (Bankr.E.D.N.C. 2015). Because the bankruptcy court properly concluded that the debt is nondischargeable under § 523(a)(6), we express no view as to the district court‘s alternative holding with respect to § 523(a)(4). We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before this court and argument would not aid the decisional process.

AFFIRMED