MEMORANDUM

WILLIAM NICKERSON, District Judge

This case is on appeal from the Order of United States Bankruptcy Judge Robert A. Gordon granting summary judgment in favor of the Appellee Dennis R. Moore, II in an adversary proceeding before the Bankruptcy Court. Judge Gordon determined that, based on the theory of collateral estoppel, a default judgment and a punitive judgment award that Moore obtained against Appellant Mitchell C. Jordan in the Maryland Circuit Court for Baltimore City constituted a debt arising from willful and malicious injury and was, therefore, non-dischargeable under 11 U.S.C. § 523(a)(6) in Jordan's bankruptcy. This Court has jurisdiction pursuant to 28 U.S.C. § 158(a)(1), as Jordan's appeal arises from the final order entered by the United States Bankruptcy Court for the District of Maryland and is brought pursuant to Local Rule 404. The Court has reviewed the pleadings and for the reasons stated below, the Order of United States Bankruptcy Judge Gordon will be affirmed.

I. BACKGROUND

The complicated state court proceedings in this matter started on December 29, 1997, when Moore filed a Complaint against Jordan in the Circuit Court for Baltimore City making two claims: 1) assault and battery, and 2) intentional infliction of emotional distress. Moore alleged that Jordan had violently beaten him in front of a pub, telling Moore to stay away from his girlfriend. Moore also alleged that Jordan's harassment continued after the beating with false allegations made to the police resulting in his detention at the side of a road and additional threats when the two found themselves at the same club at the same time. As a result Moore alleged that he suffered significant injury, severe emotional distress and anxiety. Jordan responded by filing a motion to dismiss for improper venue on April 14, 1998. The day prior to Jordan filing his motion to dismiss, Moore served Jordan with discovery requests. Jordan, represented by counsel, never responded to those requests despite being ordered to do so by the Circuit Court on October 2, 1998. Moore thus filed a motion for sanctions, to which Jordan did not respond. As a result, Judge Thomas Noel in the Circuit Court entered default judgment against Jordan as to liability on the two claims on November 18, 1998.

A month later Jordan filed a motion to vacate/strike default judgment alleging that he had received no notice of the court's order compelling discovery and that the order was improper. Judge Noel's law clerk sent Jordan's counsel a letter stating that the judge was not going to change his decision on the default judgment.

On March 1, 1999, Judge Albert J. Matricciani denied, without a hearing, Jordan's motion to dismiss. Jordan then filed a motion to alter or amend the denial of the motion to dismiss on March 15, 1999, arguing that he had never been granted a hearing as required by law. After a hearing on that motion, Judge Matricciani denied the motion to alter or amend. Jordan then filed on June 23, 1999, a Notice for In Banc Review, appealing Judge Matricciani's denial. Following a hearing on that motion, on April 6, 2000, a panel of three circuit court judges issued a written memorandum that held that the panel did not have jurisdiction to review the denial of the motion to dismiss because it was not a final judgment and because it had not been timely filed. The panel ordered that the matter be set for a trial on damages. On June 23, 2000, Jordan filed a motion for ruling on Jordan's motion to vacate/strike default judgment arguing that there should not be a ruling on damages until there was a ruling on his December 1998 motion.

Judge Carol Smith in the Circuit Court for Baltimore City held a hearing before a jury solely on the issue of compensatory and punitive damages on June 28 and 29, 2000. Jordan's counsel represented that she was unprepared to proceed on the damages hearing because, although she had received notice that the hearing would take place, she took the position that 1) the default judgment was a denial of due process as the motion to dismiss had not been ruled on prior to the default judgment; and 2) that there had been no ruling on Jordan's motion to vacate/strike default judgment. Transcript of Inquisition Hearing on Damages, June 28, 2000, at 5-7, 14, 18-19, Moore v. Jordan, No. 97-363042CC9132 (Md. Cir. Ct. Baltimore City).

Judge Smith disagreed with both arguments. She pointed out that the discovery rules require responses to discovery even if there is an outstanding motion to dismiss, and in particular where the court has ordered the party to respond. Id. at 14-15. She also found that the letter from Judge Noel's clerk stating that he had reviewed the file and "decided not to change his rulings regarding the discovery motions" was an indication of Judge Noel's response to the motion to vacate/strike and, therefore, treated the motion as denied. Id. at 11. Moreover, Judge Smith instructed Jordan's counsel that even if both motions had been outstanding, counsel had been informed of the hearing and had time to prepare. Id. at 19. As a result, the hearing proceeded.

Jordan's counsel's presentation and cross-examination at the damages hearing was significantly limited. Because Jordan failed to respond to Moore's discovery requests or to file a motion for a protective order, even after the motion to dismiss had been denied, Moore moved, and the Circuit Court granted, in limine to prohibit Jordan from presenting evidence or cross-examining on the issue of liability and on any of the subjects covered by the discovery requests unless Moore opened the door on direct examination. Id. at 19-25. In addition, Jordan's counsel was unable to cross-examine Moore's expert because she chose not to attend the de bene esse video deposition and the video was shown at the hearing. Id. at 16. Finally, out of a combination of Jordan's counsel's lack of preparation for the hearing and the motions in limine, Jordan's only witness was himself. Nonetheless, Jordan's counsel presented opening and closing statements, cross-examined Moore's witnesses and participated in voir dire and in determining jury instructions.

Following the hearing, the jury awarded Moore $120,770.23 in compensatory damages and indicated on the verdict sheet that it had found "by clear and convincing evidence that the actions of the defendant were malicious or outrageous, and in light of the risks and dangers which were known or should have been known, defendant's conduct indicated a disregard for the rights and safety of the plaintiff, or showed a conscious indifference to the consequences."

On May 6-8, 2002, Judge Smith held a hearing on the issue of punitive damages, which resulted in an award of $60,000. Jordan filed notice of an appeal the next day. Meanwhile, Moore filed a motion to alter/amend judgment or in the alternative for a new trial asserting that Jordan had withheld financial information and made misrepresentations to the court regarding his financial position. The Maryland Special Court of Appeals remanded the case to the Circuit Court for consideration of Moore's outstanding motion to alter/amend judgment. On December 23, 2003, the Circuit Court granted Moore's motion and a new punitive damages hearing took place on April 21, 2004. Moore presented testimony and evidence regarding assets previously undisclosed by Jordan during discovery. Following the hearing, Judge Smith awarded Moore $100,000 in punitive damages. To assist her in determining the new amount, Judge Smith applied the facts developed at the damages hearing to the punitive damages factors proscribed in Bowden v. Caldor, 710 A.2d 267 (Md. 1998). In considering the factor regarding the gravity of Jordan's conduct, Judge Smith stated that

the gravity of the defendant's conduct in beating the plaintiff and not merely beating him to the ground, but then jumping on him, stomping on him, and causing a complicated fracture of the plaintiff's ankle. I realize and I understand . . . that the liability issue was determined by and in fact the default judgment, but there was testimony sufficiently presented at the June 2000 proceedings about what happened and that came chiefly from Mr. Moore, himself that he was, as I noted page 2-11 of the proceedings on June 29, 2000 Mr. Moore stated; I was assaulted by Mitchell Cole Jordan in the parking lot of my friend's pub. He beat me to the ground and he jumped on my leg — broke my leg and yelled he said; now stay away from my girlfriend [expletive omitted]. . . .

We know that the plaintiff was taken to Franklin Square by ambulance. We know that he had at least three surgeries as I recall. We know that the condition of the nature of the injury was so severe that . . . his entire foot was turned around in this ankle injury and the fracture is described as I noted multiple surgeries. So whatever it was that happened in the parking lot . . . when he was down and on the ground and already beaten, the action taken by the defendant, I am satisfied, was grave and severe. The jury as noted at the original trial on . . . the compensatory damages was asked to answer questions about whether or not punitive damages — there was a punitive damages entitlement. Whether there was malice, ill will, etc. The jury rendered its answer yes. I reviewed that for the point of the gravity of the matter.

I also note that there was a continuing — there were other incidents as well . . ., which had to do with at least two other incidents where the defendant at one time on the road coming back from Ocean City followed the plaintiff and made a call to the State Police which resulted in the plaintiff being stopped, arrested, handcuffed, held to the side of the roadway, inconvenienced, delayed, he was to pick up his child, showed considerable anxiety and no charges ever succeeded there because apparently it was realized that this was just at the instigation of the defendant in this case.

Another occasion when at some sort of club or whatever Mr. Moore and Mr. Jordan had the bad fortune to be in the same place at the same time and threats made to Mr. Moore by this defendant after he had already been stomped and seriously injured threats that — my point is that this pattern of ill behavior, of malicious conduct by this defendant continued. It just didn't happen on the date when the plaintiff's ankle was severely injured by having been stomped, a man down on the ground lying there being the subject of being further harmed and clearly not in any sense a threat to Mr. Jordan at that point since he was down and thereafter certainly no threat because he couldn't get up, but there is the gravity of this defendant's conduct in the first incident of the stomping continuing with a pattern of causing the arrest of an individual who had done nothing wrong, causing the humiliation sitting on the side of the road with people passing by, causing the anxiety, etc. I realize there was a compensatory damages award but I think that I highlight those points with respect to what I perceive to be the gravity of this defendant's conduct.

Transcript of Punitive Damages Verdict, April 21, 2004, at 21-24,Moore v. Jordan, No. 97-363042CC9132 (Md. Circuit Ct. Baltimore City).

Jordan appealed the granting of the judgment on liability and the award of punitive damages to the Court of Special Appeals. The Court of Special Appeals affirmed both rulings.

On June 17, 2007, Jordan filed for protection under Chapter 7 of the Bankruptcy Code. On September 5, 2007, Moore filed an adversary case against Jordan seeking a determination of non-dischargeability of the Judgment, pursuant to 11 U.S.C. § 523(a)(6) for willful and malicious injury. Moore then filed a Motion for Summary Judgment, to which Jordan responded. Supplemental pleadings were filed by both parties in response to requests from the Bankruptcy Court at hearings on March 26, 2008, and May 14, 2008. On September 22, 2008, the Bankruptcy Court conducted a hearing on the summary judgment motion at which he gave his ruling. In reaching his decision, the Bankruptcy Court reviewed the jury verdict, the unreported opinion of the Court of Special Appeals, and the record of both punitive damages hearings and concluded that collateral estoppel applied to the issue of willful and malicious injury. Judge Gordon found that neither the jury verdict nor the Court of Special Appeals opinion was sufficient to establish collateral estoppel. Judge Gordon found, however, that Judge Smith's analysis of the facts when determining the punitive damages award was sufficient to establish that 1) the Circuit Court had conducted fact-finding determinative of the issue of willful and malicious injury; 2) the Circuit Court concluded that Jordan's conduct evidenced his intent to cause Moore's injuries; and 3) the specific facts found by the Circuit Court supported the conclusion that the debt owed to Moore was non-dischargeable under the provisions of 11 U.S.C. § 523(a)(6).

Jordan filed a Motion to Alter or Amend Judgment with the Bankruptcy Court on October 2, 2008, which the court denied. Jordan noted an appeal to this Court on October 2, 2009.

II. STANDARD OF REVIEW

The district court acts as an appellate court when reviewing appeals from the bankruptcy court and reviews conclusions of law and grants of summary judgment de novo. Tidewater Finance Co. v. Williams, 341 B.R. 530, 533 (D. Md. 2006). "The district court may affirm, modify, or reverse a bankruptcy judge's order, or remand with instructions for further proceedings." Id. Summary judgment is proper if the evidence before the court, consisting of the pleadings, depositions, answers to interrogatories, and admissions of record, establishes that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In assessing such a motion, the Court must view the evidence and all justifiable inferences in the light most favorable to the party opposing the motion.United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam).

III. DISCUSSION

Principles of collateral estoppel are applicable in dischargeability proceedings in bankruptcy. Grogan v. Garner, 498 U.S. 279, 284 n. 11 (1991). "In determining the preclusive effect of a state-court judgment, the federal courts must, as a matter of full faith and credit, apply the forum state's law of collateral estoppel." In re McNallen, 62 F.3d 619, 624 (4th Cir. 1995). Here, as Moore seeks to apply collateral estoppel from the default judgment of the Circuit Court of Maryland, the Maryland law of collateral estoppel controls.

Maryland courts follow the Restatement definition of collateral estoppel, also referred to as issue preclusion. See Murray Int'l Freight Corp. v. Graham, 555 A.2d 502, 504 (Md. 1989). "When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim." Id. (quoting Restatement (Second) of Judgments § 27 (1982)). Thus, in order for collateral estoppel to apply, the issue to be precluded must have been 1) actually litigated; and 2) essential to a valid and final judgment.

A. Actually Litigated:

1. Default Judgment

Jordan's primary argument focuses on whether the issue of willful and malicious injury was "actually litigated." Jordan contends that because liability was determined based upon a default judgment that the issue of "willful and malicious injury" was not "actually litigated" and cannot be found to be conclusive in his bankruptcy proceeding. Jordan is correct that Maryland has recognized the position found in comment (e) to the Restatement (Second) of Judgments, § 27, which states that, "`[i]n the case of a judgment entered by confession, consent, or default none of the issues is actually litigated,' and the rule `does not apply with respect to any issue in a subsequent action.'" United Book Press, Inc. v. Maryland Composition Co., Inc., 786 A.2d 1, 11 (Md. Ct. Spec. App. 2001). It is not entirely clear, however, whether Maryland has adopted the position that a default judgment, which it has equated with an admission of liability, can be used for the purposes of collateral estoppel. Compare Porter Hayden Co. v. Bullinger, 713 A.2d 962, 971-72 (Md. 1998) (quoting Curry v. Hillcrest Clinic, Inc., 653 A.2d 934, 945 (Md. 1995) ("Curry stands for the proposition that a default judgment should be treated as an admission of liability.")) with id. at 976 (Rodowsky, J., concurring and dissenting) ("Generally, the rule is that a default judgment will support claim and defense preclusion, but not issue preclusion against a third party."). The Court need not resolve this issue, however, as the bankruptcy court's decision, which this Court affirms, was not based on the preclusive effect of the default judgment as to liability, but on the preclusive effect of Judge Smith's determination as to punitive damages.

2. Damages Hearing

Jordan's next argument is that the damages hearing did not constitute actual litigation of the issue because Judge Smith granted Moore's motion in limine precluding Jordan from presenting evidence on the issues relating to liability. Jordan produces no case law, however, nor has this Court found any, to support his contention that an issue may not be considered actually litigated when the issue is litigated but the party's ability to do so is restricted on the basis of failing to provide discovery responses.

Here, Jordan, represented by counsel, failed to provide discovery responses to Moore even after the Circuit Court ordered him to do so, even after the court ruled on his motion to dismiss, and, even after he was given notice regarding the damages hearing. As a result, Judge Smith prohibited Jordan from presenting evidence of which Moore should have been made aware via Jordan's discovery responses. Jordan still had the opportunity to present evidence and cross-examine Moore's witnesses outside of that limitation. Yet, Jordan chose, as a matter of case strategy, not to prepare prior to the hearing because of a belief that he had not received a proper ruling on his motion to vacate/strike default judgment despite notice that the hearing would be conducted on the day that he appeared. Thus, Jordan cannot now say that because, as a matter of strategy, he chose not to respond to discovery requests made by Jordan and chose not to prepare for the damages hearing that the issue was not "actually litigated."

Similarly, he argues that the only finding-of-fact made by the jury was the compensatory damages award since the court instructed it not to consider his liability. He indicates in his brief that he was surprised that the jury was asked whether punitive damages were warranted. Significantly, however, Jordan admits in his brief that "during the compensatory damages hearing, the jury heard testimony and was presented with evidence concerning the events alleged in the complaint — not solely the Plaintiff's resulting damages." Brief of Jordan at 22-23. Moreover, the record shows that Jordan was aware from the outset that the jury would be determining whether punitive damages were appropriate, and that he participated in the wording of the jury instructions and verdict sheet. Transcript of Inquisition Hearing on Damages, June 28, 2000, at 25-42, and June 29, 2000, at 88-89,Moore v. Jordan, No. 97-363042CC9132 (Md. Cir. Ct. Baltimore City). Thus, it cannot be said that the issue of the nature of his conduct was not litigated or that the jury did not make a finding-of-fact in that regard. Regardless, Judge Gordon's decision was not based on the jury's verdict, but on Judge Smith's finding of fact.

3. Judge Smith's Punitive Damages Award

More to the point of Judge Gordon's decision, Jordan argues that the statements made by Judge Smith at the second hearing on punitive damages relating to the gravity of Jordan's conduct cannot be considered "findings-of-fact" for the purposes of collateral estoppel. His first reason is that the default judgment established liability and the jury made the only factual findings necessary to the judgment when they found that his malicious or outrageous conduct entitled Moore to punitive damages. Jordan contends that Judge Smith was not acting as a trier-of-fact, but was solely determining the appropriate award of punitive damages in light of the jury's findings and the circumstances of the case. Moreover, he argues that her statements were not findings-of-fact because she was solely conducting a review of the Bowden factors in order to justify the amount of the punitive damages award.

The Court disagrees with Jordan's contention. Jordan is correct that the Maryland Court of Appeals set out factors in Bowden to provide guidance to trial courts in determining if a punitive damages award is excessive. Thus, when reviewing a punitive damages award set by a jury, the judge is not acting as a second trier-of-fact, but is performing a legal function. Bowden, 710 A.2d at 288. Here, however, the jury did not set the punitive damages award and so there was nothing for Judge Smith to review. Rather, Judge Smith was acting as the trier-of-fact when she determined the appropriate punitive damages award based on the facts of the case. That she used the Bowden factors to guide her decision does not remove that fact-finding role.

B. Identity of the Issues

Under 11 U.S.C. § 523(a)(6), a debt is not dischargeable in a Chapter 7 bankruptcy if it arises from a "willful and malicious injury by the debtor to another." Jordan's final argument is that there was never any finding-of-fact or conclusive determination on the precise issue of "willful and malicious injury." Jordan correctly contends that in order for collateral estoppel to apply to § 523(a)(6), it is not enough that the state court determined that the debtor deliberately or intentionally performed the act that led to injury to the creditor, but rather the issue that must have been litigated and necessary to the judgment is that the debtor actually intended the act to cause the injury inflicted. Duncan v. Duncan, 448 F.3d 725, 729 (4th Cir. 2006) (citing Kawaauhau v. Geiger, 523 U.S. 57, 61 (1998)). Thus, Judge Gordon correctly concluded that the jury verdict finding that punitive damages were warranted because "the actions of the defendant were malicious or outrageous, and in light of the risks and dangers which were known or should have been known, defendant's conduct indicated a disregard for the rights and safety of the plaintiff, or showed a conscious indifference to the consequences" was not sufficient to collaterally estop litigation as to whether Jordan intended to cause the injury inflicted.

As noted by Judge Gordon, the first problem with this verdict is that it is in the disjunctive so it is not possible to know if the jury concluded that the defendant's actions were malicious or outrageous. Moreover, the verdict indicates a finding of 1) conduct that was in disregard of the safety of Moore or 2) conduct that exhibited a conscious indifference to the consequences to Moore. Neither of these categories rise to the level of "a finding of willful and malicious injury" because neither required Moore to prove that Jordan intended to injure him. See Duncan, 448 F.3d at 729-30.

Jordan would have the analysis stop here, but in Maryland, "[i]n determining whether an issue has been actually litigated, courts may look beyond the judgment to examine the pleadings and evidence presented in the prior case." United Book Press, Inc. v. Maryland Composition Co., Inc., 786 A.2d 1, 12 (Md. Ct. Spec. App. 2001) (citing Colandrea v. Wilde Lake Community Ass'n, Inc., 761 A.2d 899 (Md. 2000) ("`[F]or the doctrine of collateral estoppel to apply, the probable fact-finding that undergirds the judgment used to estop must be scrutinized to determine if the issues raised in that proceeding were actually litigated, or facts necessary to resolve the pertinent issues were adjudicated in that action.'") (emphasis added)). Here, Judge Gordon properly looked to Judge Smith's application of the evidence from the damages hearing to analyze the gravity of Jordan's conduct and determine the punitive damages award. The Court agrees with Judge Gordon that Judge Smith's analysis was a fact-finding, her fact-finding was essential to her determination of the punitive damages award, and "defendant's conduct, . . . [was] sufficiently deliberate for the purpose of causing the specific injury suffered by the plaintiff so as to determine that his intent to cause that injury is conclusively established as a fact." Transcript of hearing on motion for summary judgment, Sept. 22, 2008, at 26, Jordan v. Moore, Case No. 07-15516 (Bankr. D. Md).

This Court's decision is supported by the decision of the Maryland Court of Special Appeals, upholding Judge Smith's punitive damages award. The Court of Special Appeals concluded, after reviewing Judge Smith's analysis of the "gravity of the defendant's wrong," that "Jordan's conduct satisfied the requirements of assault in the first degree because he intentionally caused serious physical injury to Moore." Jordan v. Moore, No. 655 Sept. Term, 2004, at 22 (Md. Ct. Spec. App. Dec. 27, 2005).

Thus, the record of the Maryland Circuit Court supports a finding that collateral estoppel applies here and the entire award should be non-dischargeable.

IV. Conclusion

For the foregoing reasons, the Order of United States Bankruptcy Judge Gordon will be affirmed. A separate order will issue.