J & V DEVELOPERS, INC. v. DEBORAH R. MALLOY (In re Malloy), No. 17-1015 (3d Cir. Dec. 26, 2017) (unpublished).

Case Type:
Consumer
Case Status:
Reversed and Remanded
Citation:
In re Malloy, No. 17-1015 (3d Cir. Dec. 26, 2017) (unpublished). (3rd Circuit, Dec 26,2017) Not Published
Tag(s):
Ruling:
3rd Circuit Court of Appeals vacated the District Court’s summary dismissal of Debtor’s pro se appeal, and remanded the case back to the District Court for it to articulate and explain the basis for its discretionary dismissal.
Procedural context:
J&V filed a nondischargeability action asserting that a State Court Fee Award the factual findings that Debtor’s conduct was “dilatory, obdurate, and vexatious” rendered that Award nondischargeable as a debt arising from Debtor’s “willful and malicious” conduct pursuant to 11 U.S.C. 523(a)(6). The Bankruptcy Court granted summary judgment to J&V, holding that the factual findings contained State Court Fee Award were preclusive. In re Malloy, 535 B.R. 81, 97 (Bankr. E.D. Pa. 2015) (Nondischarge Order). Debtor appealed the Nondischarge Order to District Court, which affirmed. Debtor then filed a motion to reconsider the Nondischarge Order, which was denied (Reconsideration Denial). Debtor then appealed the Reconsideration Denial to District Court, which summarily dismissed the appeal for appellants’ failure to comply with Bankruptcy Rule 8009, which requires appellants to timely file a designation of record and a statement of issues (Appeal Dismissal). Debtor then filed this appeal of the Appeal Dismissal.
Facts:
Deborah Malloy (Debtor) signed an Agreement of Sale (AOS) to purchase a home from J&V Developers, Inc. (J&V) in 2007. The AOS required Debtor to apply for a mortgage and to close the sale within a certain time. When Debtor failed to do either, J&V filed a breach of contract action against Debtor in state court (State Court). After three (3) years of contentious litigation of “irrelevant” claims and contentions described by the State Court trial judge as “almost like Alice in Wonderland,” the trial court entered judgment in favor of J&V (State Court Verdict). Debtor failed to appeal the State Court Verdict. J&V then petitioned the State Court for attorney fees pursuant to 42 Pa. Cons. Stat. § 2503(7), for demonstrating “dilatory, obdurate, or vexatious” conduct during the 6-day trial spanning over 8 months. The State Court granted J&V’s fee request after additional discovery, briefing and a hearing, resulting in a judgment against Debtor for attorney’s fees and costs in the amount of over $63,000 (State Court Fee Award). Debtor appealed the State Court Fee Award, which was affirmed in 2013. After Debtor’s request to appeal the State Court Fee Award to the Pennsylvania Supreme Court was denied, Debtor filed for Chapter 7 Bankruptcy protection in 2014.
Judge(s):
Greenaway, Jr., Vanaskie, Roth

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