Opinion
Case No. 99-12136-SSM, Adversary Proceeding No. 99-1208
March 15, 2000
Robert O. Tyler, Esquire, Tyler, Bartl, Burke Albert, P.L.L.C., Alexandria, VA, of Counsel for the plaintiff
MEMORANDUM OPINION
Before the court is a motion for summary judgment filed by the plaintiff on December 28, 1999. At the pre-trial conference held on January 11, 2000, the plaintiff, AMICA Mutual Insurance Company ("AMICA"), was present by counsel, and the defendant, Michael Hamann, appeared in person. The court delayed the scheduling of the trial to consider the pending motion. To avoid having the defendant bear the expense of another court appearance to argue the summary judgment motion, the court informed the parties that the motion would be decided based on the written submissions. The debtor filed a timely response on January 21, 2000, and subsequently submitted a further reply, together with an affidavit, to the plaintiff's reply memorandum.
The debtor is proceeding pro se in this adversary proceeding. Fikri A. Ramadan, Esquire, was debtor's counsel, but was allowed to withdraw as counsel pursuant to a consent order entered on November 10, 1999.
The debtor is presently a student at the University of Colorado in Boulder, Colorado.
Background
This is an action to determine the dischargeability of a debt that stems from a car accident that occurred in 1997. The plaintiff is the automobile insurance carrier for Richard E. Timbie, the owner of the vehicle involved in the accident. As such, the plaintiff is subrograted to Mr. Timbie's claim against the defendant. The defendant filed a voluntary chapter 7 petition in this court on April 23, 1999. The trustee filed a report of no distribution on June 11, 1999, and the debtor was subsequently granted a discharge on August 5, 1999. The plaintiffs complaint was filed on July 26, 1999, and amended on August 5, 1999. The debtor-defendant answered the complaint on August 27, 1999.
The complaint alleges that on July 4, 1997, the debtor operated Mr. Timbie's vehicle, a 1994 Mitsubishi 311 GT, without his permission and was involved in an accident that resulted in the total loss of the vehicle in the amount of $19,277.25. The complaint seeks a determination that the resulting debt is nondischargeable on the ground that the debtor's unauthorized operation of the automobile constituted larceny.
Discussion I.
Under Federal Rule of Bankruptcy Procedure 7056, which incorporates Rule 56(c), Federal Rules of Civil Procedure, summary judgment is appropriate "if the pleadings, depositions, 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 to a judgment as a matter of law." In ruling on a motion for summary judgment, a court should believe the evidence of the non-movant, and all justifiable inferences must be drawn in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). At the same time, the Supreme Court has instructed that summary judgment "is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1985).
II. A.
An individual chapter 7 debtor ordinarily receives a discharge of all debts that arose before the petition date. § 727(b), Bankruptcy Code. Nevertheless, certain types of debts are excepted from discharge. Among these are debts "for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny[.]" (emphasis added). § 523(a)(4), Bankruptcy Code. What constitutes larceny under § 523(a)(4) is a question of federal law. Builders Supply Co. of Petersburg, Inc. v. Laughlin (In re Lane), 115 B.R. 81, 83 (Bankr. E.D. Va. 1990). Accordingly, the plaintiff must meet the common law definition of larceny before the debt will be excepted from discharge. Id. Courts have defined "larceny" as "the fraudulent and wrongful taking and carrying away of property of another with intent to convert such property to the taker's use without the consent of the owner." Ramos v. Rivera (In re Rivera), 217 B.R. 379, 385 (Bankr. D. Conn. 1998); see also Kaye v. Rose (In re Rose), 934 F.2d 901, 903 (7th Cir. 1991); In re Caulfield, 192 B.R. 808, 818 (Bankr. E.D. N.Y. 1996); 4 Collier on Bankruptcy ¶ 523.10[2], at 523-76 (Lawrence P. King, ed., 15th ed. rev. 1999). A similar variation of the common law definition is: "the felonious taking of another's personal property with intent to convert it or deprive the owner of the same." Weinreich v. Langworthy (In re Langworthy), 121 B.R. 903, 907-08 (Bankr. M.D. Fla. 1991); BLACK'S LAW DICTIONARY 881 (6th ed. 1990).
B.
AMICA moves for summary judgment on the ground that the debtor failed to respond to requests for admissions that were served upon his attorney on September 21, 1999. The request sought the admission of eight statements of fact, which, if admitted, would satisfy the elements of common law larceny under § 523(a)(4). Rule 36, Federal Rules of Civil Procedure, which is incorporated in adversary proceedings by F.R.Bankr.P. 7036, provides that any requested admission not responded to within 30 days of service (unless an extension is granted by the court or allowed by the parties) is to be deemed as admitted for purposes of the litigation at hand. Here, the 30-day period has long expired, without the result that the debtor is deemed to have admitted each matter as to which an admission was requested. Consequently, because the requested admissions address the requirements of larceny, the debtor's failure to respond can form the basis for granting summary judgment. United States v. Turk, 139 F.R.D. 615, 617 (D. Md. 1991).
Together with his initial reply memorandum, the debtor filed an unsigned response to the request for admissions. The debtor is essentially seeking leave to file untimely answers. Mr. Hamann explains that he was having problems with his mail and does not recall receiving the discovery request. The debtor's father did receive a package containing the request for admissions, but, according to the debtor, he misadvised the debtor concerning the time for responding. The debtor further asserts in his second reply memorandum that he assumed his former counsel had done all the required paperwork to satisfy the plaintiff's discovery requests. The plaintiff disputes the debtor's assertion that he did not receive the discovery requests and proffers that debtor's former counsel would testify that the discovery requests were timely forwarded and explained to the debtor before counsel's representation was terminated. The plaintiff argues that the debtor should be held responsible for having failed to answer timely the request for admissions.
Rule 36(b) permits the withdrawal or amendment of admissions as follows:
[T]he court may permit withdrawal or amendment when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits.
Courts have held that allowing the late filing of responses to requests for admission is the equivalent of allowing a party to withdraw admissions. See W.J. Warren v. Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 544 F.2d 334, 339-40 (8th Cir. 1976). Therefore, "[w]hen a party seeks leave to file untimely answers, the test to be applied by the court is whether permitting the party will aid in the presentation of the merits of the action and whether prejudice will accrue to the propounding party." Ameribanc Sav. Banks v. Resolution Trust Corp., 858 F. Supp. 576, 581 (E.D. Va. 1994).
Of the eight requested admissions, the debtor denies only the matter set forth under request number 4, which states that he operated the Mitsubishi vehicle without the consent of the owner. This adversary proceeding unquestionably centers on the question of whether the debtor had, or believed he had, permission to use the vehicle in question. The request for admissions is a discovery tool that serves to narrow the issues for trial. The court, however, believes that such a tool should not be utilized to the detriment of this pro se defendant who has an arguably meritorious defense. The debtor asserts in an affidavit that he believed that he was authorized to drive the vehicle by Nicholas Timbie, son of Richard Timbie and an authorized user of the automobile. The affidavit states that Nicholas allowed the use of the vehicle to a friend by the name of Katrina Miodek, who in turn extended permission to the debtor after she was not driving well. Although the court does not condone the debtor's failure to comply with proper discovery requests, the court finds that justice would not be served in this instance if the plaintiff obtained summary judgment against a pro se debtor based on missing a technical deadline. See Turk, 139 F.D.R. at 618 ("It does not further the interest to automatically determine all issues in a lawsuit and enter summary judgment against a party because a deadline is missed."). While the court is somewhat skeptical of the debtor's claimed lack of recollection with respect to receiving the discovery requests, it may very well be the case that there was a miscommunication between Mr. Ramadan and the debtor at the time the former was allowed to withdraw. The court will give the debtor the benefit of the doubt on this occasion, but admonishes the debtor that pro se litigants are not excused from compliance with the Federal Rules of Bankruptcy Procedure or the rules of this court simply because they are not represented by an attorney, and the debtor should not assume that further failures to comply will not result in sanctions.
Additionally, the plaintiff has not shown that it would be prejudiced in maintaining the adversary proceeding if the deemed admission is withdrawn. The debtor argues that he had already in effect denied the request in question in his answer to the amended complaint. In this connection, the court concurs that request number 4 is nearly identical to paragraph 3 of the amended complaint, that being whether the owner of the Mitsubishi vehicle consented to its use by the debtor. It is difficult to see how the plaintiff will suffer prejudice if required to present evidence on this issue. From the time debtor filed his answer, the plaintiff knew that the trial would focus on the issue of consent. See Warren, 544 F.2d at 339-40 (finding no prejudice where the issues presented by the request for admissions reiterated the allegations in the complaint).
C.
Even if the court were to deny the debtor's request to file an untimely answer, the court concludes that the debtor has brought forth sufficient evidence to create a material issue of fact, thus avoiding summary judgment. As discussed, request number 4 concerns whether the debtor's operation of the automobile was without the actual consent of the owner. However, in his defense, the debtor stated, by means of an affidavit, that he believed he had obtained the consent of Nicholas Timbie through Ms. Miodek. It is the general rule at "common law that one who took property under the honest belief that he was entitled to do so could not be guilty of larceny[.]" Stevens v. Sampete County, 640 F. Supp. 376, 381 (D. Utah 1986) (emphasis added); 50 Am.Jur.2d Larceny § 46. Cf. Dutts v. Commonwealth, 145 Va. 800, 812, 133 S.E. 764, 768 (1926) (good faith belief). Similarly, it is a defense to larceny that the taker honestly believed that the person with possession of the property had the authority to consent its use. 50 Am.Jur.2d Larceny § 28. The debtor need not show that the mistaken claim of right was reasonable.
The plaintiff contends that the debtor is condemned by his own words by admitting in his reply memorandum that he did not have permission directly from the owner of the Mitsubishi automobile. The court finds that the plaintiff's argument is misplaced. The fact that the debtor did not receive actual consent from the owner does not preclude a defense that he honestly thought he had permission from an authorized user. The court is mindful that the debtor's affidavit is replete with hearsay statements, but the hearsay is admissible to prove the debtor's knowledge or state of mind.
Federal Rule of Evidence 801(c) defines "hearsay" as a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted. As applied, the debtor cannot testify as to what Ms. Miodek said to him to show that she, in fact, obtained consent from Nicholas Timbie. The debtor would need the actual testimony of Ms. Miodek and Nicholas Timbie.
A separate order will be entered (a) allowing the late filing of the response to the request for admissions, (b) denying the plaintiff's motion for summary judgment, and (c) setting a new pretrial conference.
Since the debtor is attending college out of state, he will be permitted to appear by telephone. The debtor will of course have to appear in person at the trial.