David Beem v. Gary Allan Ferguson , 713 F. App'x 974 ( 2018 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-11842
________________________
D.C. Docket Nos. 1:15-cv-20550-RNS; 1:12-bkc-02010-LMI
DAVID BEEM,
Plaintiff - Appellee,
versus
GARY ALLAN FERGUSON,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(February 6, 2018)
Before JORDAN and JILL PRYOR, Circuit Judges, and REEVES, * District Judge.
PER CURIAM:
*
The Honorable Danny C. Reeves, United States District Judge for the Eastern District of
Kentucky, sitting by designation.
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On August 24, 1992, Hurricane Andrew made landfall near Homestead,
Florida, destroying at least 63,000 homes and 82,000 businesses, and leaving at
least 175,000 people homeless. The extreme damage (about $25 billion) left an
extensive amount of construction material debris across Homestead, and some
entrepreneurs found new business opportunities among the wreckage. One of
those men was Gary Ferguson, who in 1994 joined with David Beem to form
Floors to Doors, Inc., which sold discount home improvement and building
supplies. But like far too many homes in Hurricane Andrew’s path, the business
partnership between Mr. Ferguson and Mr. Beem collapsed. And, when that
happened, the two did what disgruntled business partners often do—litigate.
This appeal marks the latest episode in a decade-long legal battle fought by
Messrs. Ferguson and Beem in state and federal courts. Nine years ago, Mr. Beem
won summary judgment in state court against Mr. Ferguson on his claim for
“defamation; abuse of process.” A jury awarded him damages on that claim in
2011 and the court entered judgment accordingly.
In 2012, Mr. Ferguson filed for bankruptcy and Mr. Beem sought to have the
debt for that judgment declared non-dischargeable. Mr. Beem’s lawyer, however,
made a mistake. We must now decide whether Mr. Beem’s untimely complaint in
the adversary proceeding may relate back to the filing of a timely, but procedurally
improper, motion in the bankruptcy case. We also must decide whether the
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bankruptcy court appropriately granted Mr. Beem’s motion for summary judgment,
declaring Mr. Ferguson’s debt non-dischargeable. After careful review of the full
record and the parties’ briefs, and with the benefit of oral argument, we answer
both questions yes, and affirm.
I
Mr. Ferguson and Mr. Beem incorporated Floors to Doors, Inc. on
December 15, 1994. From that date until 2007, FTD served as a retailer of surplus
building and construction supplies. The parties admit that the business never
thrived and, over time, the business relationship deteriorated. The reasons for that
deterioration have been hotly contested. In October of 2007, Mr. Ferguson filed a
complaint in state court, alleging that Mr. Beem had been embezzling funds from
FTD. Mr. Ferguson’s complaint also alleged that Mr. Beem breached his fiduciary
duties, and sought a judicial dissolution of FTD. Mr. Beem responded with seven
counterclaims (brought both derivatively on behalf of FTD and by Mr. Beem
individually). One of those seven counterclaims against Mr. Ferguson alleged
“defamation; abuse of process,” and was brought by Mr. Beem individually. In it,
Mr. Beem alleged that Mr. Ferguson engaged a “campaign of harassment and
defamation” against him and had filed numerous baseless complaints with
government agencies to harm his reputation and “for the improper purpose of
extorting [him] into selling FTD.”
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In January of 2009, Mr. Beem obtained summary judgment on four of his
claims, including Count Three. The court’s order stated that the ruling on that
count was:
based upon the Court’s finding that [Mr. Ferguson], despite having
had more than a year to submit evidence in support of his allegation
that Mr. Beem stole over $1 million from Floors to Doors, and despite
[Mrs.] Ferguson’s sworn testimony that she possessed this evidence
before this lawsuit was filed, has failed to establish or submit any
competent evidence of any such theft.
AP Doc. 106-1 at 72.1 The state court held a trial on damages in March of 2011.
The jury awarded Mr. Beem a total of $318,025, of which $118,025 was for
attorney’s fees “incurred … resulting from the necessity to defend against” Mr.
Ferguson’s complaint, and the remaining $200,000 was for “emotional damages
which were the direct and proximate result of [Mr. Beem’s] defending against” Mr.
Ferguson’s complaint. AP Doc. 106-1 at 75. The judgment was affirmed on
appeal.
Mr. Ferguson filed a Chapter 11 bankruptcy petition on May 21, 2012. On
August 9, 2012, Mr. Beem sought an unopposed extension to file a complaint
objecting to the discharge of Mr. Ferguson’s debt for the state court judgment
under 11 U.S.C. § 523. The bankruptcy court granted the motion and set October
12, 2012, as the deadline to file the complaint and commence an adversary
1
AP Doc. refers to the docket in the Adversary Proceeding, Beem v. Ferguson, Adv. Proc. No.
12-02010-LMI (Bankr. S.D. Fla. 2012).
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proceeding under § 523. But instead of filing a “complaint” and initiating an
adversary proceeding, Mr. Beem’s attorney filed an original and an amended
“Motion to Dismiss or for Determination of Non-Dischargeability of His Debt” on
October 5 and 9, respectively. Then, apparently realizing his procedural mistake,
Mr. Beem’s attorney filed an adversary complaint regarding dischargeability on
October 17, 2012.
Mr. Ferguson moved to dismiss the adversary complaint as untimely. The
bankruptcy court ruled that the complaint was timely for two reasons: it could
retroactively extend the deadline to file the complaint because there was excusable
neglect and the complaint related back to the timely, but improperly filed, motion.
In September of 2014, Mr. Beem moved for summary judgment, arguing
that the debt arising out of the state court judgment for abuse of process was non-
dischargeable. The bankruptcy court granted Mr. Beem’s motion on December 8,
2014, ruling that, as a matter of law, the state court abuse of process judgment
constituted a non-dischargeable debt for a willful and malicious injury under §
523(a)(6).
Mr. Ferguson appealed the bankruptcy court’s orders denying his motion to
dismiss and granting Mr. Beem’s motion for summary judgment to the district
court, which affirmed, ruling that Mr. Beem’s untimely adversary complaint
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related back to the timely motion and that summary judgment was appropriate.
This is Mr. Ferguson’s appeal.
II
In bankruptcy cases, we sit as a “second court of review” and “examine[ ]
independently the factual and legal determinations of the bankruptcy court and
employ[ ] the same standard of review as the district court.” In re Optical Techs.,
Inc., 425 F.3d 1294, 1299–1300 (11th Cir. 2005) (citation omitted). Factual
findings of the bankruptcy court are reviewed for clear error, and legal conclusions
by either the bankruptcy court or the district court are reviewed de novo. Id. at
1300. See also In re Fin. Federated Title & Tr., Inc., 309 F.3d 1325, 1328–29
(11th Cir. 2002).
III
The “central purpose” of the Bankruptcy Code “is to provide a procedure by
which certain insolvent debtors can reorder their affairs, make peace with their
creditors, and enjoy a new opportunity in life with a clear field for future effort.”
In re St. Laurent, 991 F.2d 672, 680 (11th Cir. 1993) (quotation omitted). “[T]his
‘fresh start’ policy is only available to the ‘honest but unfortunate debtor,’” In re
Fretz, 244 F.3d 1323, 1326 (11th Cir. 2001) (quoting Grogan v. Garner, 498 U.S.
279, 286–87 (1991)), and under 11 U.S.C. § 523, certain types of debts are not
dischargeable. A debt incurred “for willful and malicious injury by the debtor to
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another entity or to the property of another entity” is one such non-dischargeable
debt. 11 U.S.C. § 523(a)(6). For creditors asserting that a debt is non-
dischargeable, the Federal Rules of Bankruptcy Procedure provide that the proper
means to achieve a non-dischargeability determination is through an adversary
proceeding. See Fed. R. Bankr. P. 7001(6). An adversary proceeding is
commenced by the filing of a complaint, which usually must be done with the
same court that is handling the bankruptcy petition. See Fed. R. Bankr. P.
5005(a)(1); 7003.
“[A] complaint to determine the non-dischargeability of a debt under [11
U.S.C.] § 523(c) shall be filed no later than 60 days after the first date set for the
meeting of creditors.” Fed. R. Bankr. P. 4007(c). Although the bankruptcy court
may extend this deadline for cause upon the motion of a party in interest, the
motion must be filed before the deadline expires. See id. We have explained that
Rule 4007(c) removes a bankruptcy court’s discretion to grant a late filed motion
to extend time to file a dischargeability complaint. See In re Alton, 837 F.2d 457,
459 (11th Cir. 1988).
In this case, the bankruptcy court purported to extend the deadline for Mr.
Beem to file his complaint after the deadline had expired. The district court,
however, ruled that the bankruptcy court lacked the authority to retroactively
extend this deadline. Mr. Beem has not challenged this ruling on appeal.
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Therefore, the only basis upon which Mr. Beem’s non-dischargeability complaint
could be timely is if it relates back, pursuant to Federal Rule of Bankruptcy
Procedure 7015, to his motion to determine dischargeability that was filed in the
main bankruptcy action before the deadline.
A
Bankruptcy Rule 7015 incorporates Federal Rule of Civil Procedure 15.
Rule 15(c) provides, in relevant part:
(c) Relation Back of Amendments
(1) When an Amendment Relates Back. An amendment to a pleading
relates back to the date of the original pleading when: …
(B) the amendment asserts a claim or defense that arose out of the
conduct, transaction, or occurrence set out – or attempted to be set out
– in the original pleading.
We must first determine whether Mr. Beem’s timely filed motion in the bankruptcy
case functioned as an “original pleading” to which the untimely adversary
complaint related back. If it does, we must then address the merits and consider
whether the complaint’s non-dischargeability allegations “arose out of the conduct,
transaction, or occurrence set out—or attempted to be set out—in the original
pleading.”
We first address whether Mr. Beem’s improperly filed and mislabeled
motion qualifies as an “original pleading” to which relation back applies. Mr.
Ferguson presents a textual argument against the application of the relation back
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doctrine. First, Rule 15(c), incorporated into adversary proceedings by Bankruptcy
Rule 7015, applies only to “pleadings.” See Fed. R. Civ. P. 15(c). Next, a motion
is not a “pleading” permitted by Bankruptcy Rule 7007 (which incorporates
Federal Rule of Civil Procedure 7). See Fed. R. Civ. P. 7; Fed R. Bankr. P. 7007.
Mr. Ferguson notes that Bankruptcy Rule 7001(6) requires a non-dischargeability
claim to be pursued as an adversary proceeding. See Fed. R. Bankr. P. 7001(6).
And, under Bankruptcy Rule 7003, an adversary proceeding must be commenced
by the filing of a complaint. See Fed. R. Bankr. P. 7003.
If these were the only applicable rules, we might agree with Mr. Ferguson.
But absent from Mr. Ferguson’s analysis is Bankruptcy Rule 7008. And when we
add Bankruptcy Rule 7008 to the deck, Mr. Ferguson’s argument falls.
Bankruptcy Rule 7008 provides that Federal Rule of Civil Procedure 8,
which sets forth the pleading standard for a complaint, applies in adversary
proceedings. Rule 8 provides that to state a claim for relief, a pleading must
contain the following: (1) “a short and plain statement of the grounds for the
court’s jurisdiction[;]” (2) “a short and plain statement of the claim showing the
pleader is entitled to relief;” and (3) “a demand for the relief sought.” Fed. R. Civ.
P. 8(a). The short and plain statement of the claim “need only ‘give the defendant
fair notice of what the claim is and the grounds upon which it rests.’” Erickson v.
Pardus, 551 U.S. 89, 93–94 (2007) (quoting Bell Atlantic Corp. v. Twombly, 550
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U.S. 544, 555 (2007)) (alteration omitted). Rule 8 also makes clear that
“[p]leadings must be construed so as to do justice.” Fed. R. Civ. P. 8(e). See also
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513–14 (2002) (explaining that “[t]he
liberal notice pleading of Rule 8(a) is the starting point of a simplified pleading
system, which was adopted to focus litigation on the merits of the claim”).
Moreover, the “Federal Rules reject the approach that pleading is a game of
skill in which one misstep by counsel may be decisive to the outcome and accept
the principle that the purpose of pleading is to facilitate a proper decision on the
merits.” Conley v. Gibson, 355 U.S. 41, 48 (1957), abrogated in part by Twombly,
550 U.S. at 563;2 Harris v. Garner, 216 F.3d 970, 996 (11th Cir. 2000) (same).
See also 6-107 Collier Bankruptcy Practice Guide P. 107.03 (“[Rule] 8(e) provides
that ‘pleadings must be construed so as to do justice.’ This rule is at the very heart
of the rules regarding pleadings. ‘Pleadings are intended to serve as a means of
arriving at fair and just settlements of controversies between litigants. They should
not raise barriers which prevent the achievement of that end.’”) (quoting Maty v.
Grasselli Chem. Co., 303 U.S. 197, 200 (1938)); De Loach v. Crowley’s Inc., 128
2
We recognize that Conley has been abrogated in part. In Conley, the Supreme Court stated that
“a complaint could not be dismissed for failure to state a claim unless it appears beyond doubt
that the plaintiff can prove no set of facts in support of his claim which would entitle him to
relief.” 355 U.S. at 45–46. In Twombly, the Supreme Court “retire[d]” Conley’s “no set of
facts” pleading standard. 550 U.S. at 563. But the Court did not completely abrogate Conley as
it relied on Conley’s statement that Rule 8’s pleading standard required only that a complaint
“give the defendant fair notice of” the plaintiff’s claim and the grounds upon which it rests. Id.
at 555 (quoting Conley, 355 U.S. at 47). The Court thus did not abrogate the portion of Conley
on which we rely.
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F.2d 378, 380 (5th Cir. 1942) (“Just what [Rule 8(e)] means is not clear, but it
excludes requiring technical exactness, or the making of refined inferences against
the pleader, and requires an effort fairly to understand what he attempts to set
forth.”).3
We have previously held that certain documents and filings were sufficient
to constitute a “complaint” under Rule 8, even though they were not labeled as
such. See, e.g., Robinson v. City of Fairfield, 750 F.2d 1507, 1511 (11th Cir. 1985)
(a plaintiff’s application for the appointment of counsel which stated “legal nature
and factual basis of his claim”); Judkins v. Beech Aircraft Corp., 745 F.2d 1330,
1332 (11th Cir. 1984) (a plaintiff’s right-to-sue letter and “charge of
discrimination”); Commodity Futures Trading Comm’n v. Am. Commodity Grp.
Corp., 753 F.2d 862, 865 (11th Cir. 1984) (an application for an order to show
cause was “the functional equivalent of a complaint”). Our sister circuits have
done the same. See, e.g, Page v. Ark. Dep’t of Corr., 222 F.3d 453, 454–55 (8th
Cir. 2000) (a plaintiff’s letter and attachments sent to the district court sufficient to
constitute a complaint under Title VII). And, in the criminal context, we have
determined that a government motion for a final order of forfeiture was “the
3
In Bonner v. City of Pritchard, we adopted as binding precedent all decisions of the former
Fifth Circuit handed down prior to October 1, 1981. 661 F.2d 1206, 1209 (11th Cir. 1981) (en
banc).
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functional equivalent of a complaint” and therefore was treated as a civil case. See
United States v. De La Mata, 535 F.3d 1267, 1278 (11th Cir. 2008).
We apply the same Rule 8 analysis here in determining whether Mr. Beem’s
motion should be treated as the functional equivalent of a complaint. In doing so,
we join the Ninth Circuit and several bankruptcy courts across the country that
have applied the same analysis. See, e.g., In re Dominguez, 51 F.3d 1502, 1509
(9th Cir. 1995) (holding that a creditor’s “discharge memorandum” was a
sufficient “complaint” under Bankruptcy Rule 7008 to commence non-
dischargeability proceeding); In re Thompson, 572 B.R. 638, 656 (Bankr. S.D.
Tex. 2017); In re Rand, 144 B.R. 253, 255–56 (Bankr. S.D.N.Y. 1992); In re
Levine, 132 B.R. 464, 467 (Bankr. M.D. Fla. 1991).
In our view, Mr. Beem’s timely filed “Motion to Dismiss or for
Determination of Non-Dischargeability of His Debt” satisfied the Rule 8 pleading
requirements for a complaint. The motion prominently requested the bankruptcy
court to “enter an order holding Beem’s debt is non-dischargeable,” cited to §
523(a)(6) and the applicable legal standards, and included seven pages of facts
detailing the basis for why Mr. Beem maintained that Mr. Ferguson’s “gross and
voluminous abuse of process” in the state case justified “non-dischargeability of
debt.” Through these facts, the motion alleged that Mr. Ferguson filed a baseless
lawsuit accusing Mr. Beem of stealing $1 million from FTD, that there was no
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proof for such accusations, that Mr. Ferguson made an unfounded complaint to the
Small Business Administration alleging Mr. Beem committed fraud, and that Mr.
Beem prevailed on a judgment for abuse of process in the state court. These
allegations, although contained in a “motion,” clearly gave Mr. Ferguson “fair
notice of what [Mr. Beem’s] claim [was] and the grounds upon which it rest[ed].”
Twombly, 550 U.S. at 555.
Mr. Beem’s motion differs starkly from the motions and filings that other
courts have found inadequate to constitute a complaint regarding non-
dischargeability. See In re Markus, 313 F.3d 1146, 1150 (9th Cir. 2002) (motion
stating “object debtors discharge,” without setting forth legal criteria for non-
dischargeability or “any facts having to do with the nature of the conduct that
caused the debt, or a claim for relief based on non-dischargeability,” held
insufficient); In re Bozeman, 226 B.R. 627, 632 (8th Cir. B.A.P. 1998) (cover sheet
describing “Nature of Suit” as “To determine the dischargeability of a debt” and
motions to extend time to file complaint held insufficient because “they are
insufficient to satisfy the notice requirements of the Federal Rules”); In re Hunter,
552 B.R. 864, 870 (Bankr. D. Kan. 2016) (initial filings insufficient because they
were “so bare that, even if construed as an original pleading [they] did not
sufficiently describe[ ] the ‘conduct, transaction, or occurrence’”).
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We recognize that Mr. Beem’s filing was denominated a “motion” and not a
“complaint.” It also does not contain a caption indicating that Mr. Beem is the
plaintiff in an adversary proceeding against the defendant, Mr. Ferguson. Rather,
it contains the caption of the main bankruptcy case. But these technical
deficiencies are not determinative, for we have refused to treat the caption of a
complaint as determinative of the nature of the action. See Lundgren v. McDaniel,
814 F.2d 600, 604 n.2 (11th Cir. 1987) (citing, in part, 5 C. Wright & A. Miller,
Federal Practice & Procedure § 1321, pp. 458–59 (1969)). And bankruptcy courts
have done the same. See In re Morysville Body Works, Inc., 89 B.R. 440, 441–42
(Bankr. E.D. Pa. 1988) (“As a general proposition, this court is willing to overlook
an error in presenting a complaint by motion, or vice versa. Our authority to do
this flows from Rule 8[(e)] . . . . Our ability to overlook such structural deficiencies
has become so accepted that it is often done as a matter of course, without further
discussion.”) (citations omitted); Bankr. Proc. Manual § 7007:2 (2017 ed.) (“A
failure to properly denominate a pleading is not fatal. … Thus, pleadings should be
given the effect required by their content without regard to the name given them by
the pleader”). In everyday terms: if it walks like a complaint and talks like a
complaint, it’s a complaint—even though it calls itself a motion.
For these reasons, we agree with the bankruptcy court and the district court
that Mr. Beem’s motion, “although a deficient pleading, [was] sufficient to place
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the debtor on notice of the claim against him and substantially complie[d] with the
notice pleading requirements of Rule 7008.” In re Dominguez, 51 F.3d at 1509.
B
Mr. Ferguson makes three additional arguments in support of reversal. We
do not find them persuasive.
First, he argues that Mr. Beem failed to commence an adversary proceeding
by the deadline prescribed in Bankruptcy Rule 4007 because he filed a motion (not
a complaint) in the main bankruptcy action and not as a separate adversary
proceeding. As noted, however, we have determined that Mr. Beem’s motion was
the functional equivalent of a complaint under Rule 8 and Bankruptcy Rule 7008.
Because Mr. Beem’s motion was the functional equivalent of a complaint, his
adversary proceeding should be deemed commenced on the date which he filed the
motion in the main bankruptcy action. Other bankruptcy courts have similarly
found an adversary proceeding commenced even though the filing was made in the
main bankruptcy case, and not as a separate adversary proceeding. See In re
Weeks Landing, LLC, 439 B.R. 897, 908–09 (M.D. Fla. 2010) (“Although filed in
the underlying bankruptcy case and not as a separate adversary proceeding, this
still constitutes being ‘filed’ because an adversary proceeding ‘is commenced by
filing a complaint with the court.’”) (quoting Fed. R. Bankr. P. 7003); In re Rand,
144 B.R. at 256 (concluding that a letter creditor sent to the bankruptcy judge
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timely commenced an adversary proceeding). We therefore disagree with Mr.
Ferguson that Mr. Beem’s complaint was untimely because it was filed in the main
bankruptcy action.
Second, Mr. Ferguson argues that relation back is impermissible because the
adversary proceeding is not the same proceeding as the bankruptcy case in which
Mr. Beem timely filed his motion. Mr. Ferguson’s argument makes sense in an
ordinary civil case—Rule 15 does not permit an amendment in one case to relate
back to the filing of an earlier complaint in a separate action. See Dade Cnty. v.
Rohr Indus., Inc., 826 F.2d 983, 989 (11th Cir. 1987). See also Velez-Diaz v.
United States, 507 F.3d 717, 719 (1st Cir. 2007) (“Rule 15(c), by its terms, applies
to amended pleadings in the same action as an original, timely pleading; the
pleading sought to be amended may not be a pleading filed in a different case.”).
But the argument does not account for the unique meaning of “case” in the
bankruptcy context. “[T]he word ‘case,’ as used in the bankruptcy context, ‘is a
term of art’ with a specialized meaning. It ‘refers to litigation commenced by the
filing with the bankruptcy court of a petition under the appropriate chapter of Title
11.’ The term ‘proceeding,’ on the other hand, refers to a ‘particular dispute or
matter arising within a pending case—as opposed to the case as a whole.’” In re
Fin. Oversight & Mgmt. Bd. for Puerto Rico, 872 F.3d 57, 62–63 (1st Cir. 2017)
(quoting In re Caldor Corp., 303 F.3d 161, 168 n.3 (2d Cir. 2002)). See also In re
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Thompson, 965 F.2d 1136, 1140 (1st Cir. 1992) (“An adversary proceeding is a
subsidiary lawsuit within the larger framework of a bankruptcy case.”); 7 Collier
on Bankruptcy 1109.04(1)(a)(i) (16th ed. 2016) (“Collectively, the term ‘case’
encompasses all of the discrete proceedings that follow the filing of a petition for
bankruptcy relief, including adversary proceedings.”). Accordingly, the adversary
proceeding between Mr. Beem and Mr. Ferguson was part of the same “case” as
Mr. Ferguson’s larger bankruptcy case. This raises no barrier to relation back.
Third, Mr. Ferguson asserts that the outcome here is guided by our decision
in In re Mendenhall, 572 F. App’x 858 (11th Cir. 2014). We disagree. In re
Mendenhall, which is not binding because it is unpublished, considered only the
late filing of a non-dischargeability complaint under Bankruptcy Rule 4007(c).
See id. at 862–63. There was no timely filing of any document which could serve
as an “original pleading” in that case. See id. Likewise, In re Mendenhall’s
approval of “strict time limitations imposed by Rule 4007(c)” does not dictate the
result here, where the creditor has made the facts supporting his objection to
dischargeability known in a filing before the deadline. Id. at 863. The Ninth
Circuit has recognized the same distinction—holding (like In re Mendenhall) that a
bankruptcy court has no discretion to retroactively extend the Bankruptcy Rule
4007(c) deadline, see Anwar v. Johnson, 720 F.3d 1183, 1185–87 (9th Cir. 2013),
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while also (like us here) permitting relation back when the requirements of Rule 15
are satisfied. See In re Dominguez, 51 F.3d at 1509.
C
Because Mr. Beem’s motion functioned as an original adversary complaint,
we must next determine whether the allegations described in his later-filed
complaint “arose out of the conduct, transaction, or occurrence set out—or
attempted to be set out—in the original pleading.” Fed. R. Civ. P. 15(c)(1)(B).
“The critical issue in Rule 15(c) determinations is whether the original complaint
gave notice to the defendant of the claim now being asserted.” Makro Cap. of Am.,
Inc. v. UBS AG, 543 F.3d 1254, 1260 (11th Cir. 2008) (alteration and quotation
omitted). Mr. Beem’s later-filed complaint contains nearly-identical factual
allegations regarding non-dischargeability as those in his timely motion. As noted,
those allegations were sufficient notice to Mr. Ferguson that Mr. Beem objected to
the dischargeability of the debt related to the abuse of process judgement. Thus,
the same issue was clearly raised in the original pleading and the complaint may
relate back to Mr. Beem’s timely filing. See Gibson v. Resolution Tr. Corp., 51
F.3d 1016, 1027 (11th Cir. 1995) (“[A]mendments to complaints relate back to the
original filing date when the issue was raised in the original complaint.”).
In sum, we agree with the bankruptcy court and district court that Mr.
Beem’s complaint for non-dischargeability under 11 U.S.C. § 523(a)(6) was timely
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under the relation back doctrine provided by Bankruptcy Rule 7015. The
bankruptcy court thus properly denied Mr. Ferguson’s motion to dismiss.
IV
We next must determine whether the grant of summary judgment in favor of
Mr. Beem was appropriate. Both the bankruptcy court and the district court ruled
that Mr. Ferguson’s debt (in the form of Mr. Beem’s state court judgment for
“defamation; abuse of process”) was a non-dischargeable debt under 11 U.S.C. §
523(a)(6). Applying our well-settled collateral estoppel precedent, we affirm the
grant of summary judgment.
Collateral estoppel, which bars the relitigation of issues that have been
adjudicated in a prior action, applies to an adversary proceeding challenging the
dischargeability of a debt. See In re Bush, 62 F.3d 1319, 1322 (11th Cir. 1995).
“If the prior judgment was rendered by a state court, then the collateral estoppel
law of that state must be applied to determine the judgment’s preclusive effect.” In
re St. Laurent, 991 F.2d at 675–76. Because Mr. Beem’s judgment against Mr.
Ferguson was rendered by a Florida state court, we look to Florida law.
Under Florida law, for collateral estoppel to apply, among other things, the
issue at stake in this litigation must be identical to the one involved in the prior
litigation. See Arnowitz v. Home Diagnostics, Inc., 174 So. 3d 1062, 1066 (Fla.
4th DCA 2015). Issues are “sufficiently identical” when their elements and
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requirements “closely mirror” each other. See In re St. Laurent, 991 F.2d at 676
(quotation omitted).
Mr. Ferguson asserts that the issue at stake in the state court litigation
regarding whether he acted willfully is not sufficiently identical to the requirement
that there be a willful and malicious injury for a debt to be non-dischargeable
under § 523(a)(6). Thus, we must consider what Mr. Beem was required to prove
for each claim.
Under Florida law, a claim for abuse of process has three elements: “(1) the
defendant made an illegal, improper, or perverted use of process; (2) the defendant
had an ulterior motive or purpose in exercising the illegal, improper, or perverted
process; and (3) the plaintiff was injured as a result of defendant’s action.”
Hardick v. Homol, 795 So. 2d 1107, 1111 n.2 (Fla. 5th DCA 2001). Florida courts
have further explained that an action for abuse of process consists of a “willful and
intentional misuse of process for some wrongful and unlawful object or collateral
purpose.” Gause v. First Bank of Marianna, 457 So. 2d 582, 584 (Fla. 1st DCA
1984) (emphasis added) (citing Peckins v. Kaye, 443 So. 2d 1025, 1026 (Fla. 2d
DCA 1983)).
In relevant part, § 523(a)(6) provides that any debt “for willful and malicious
injury by the debtor to another entity or to the property of another entity” is non-
dischargeable. “Willful” in this provision means “a deliberate or intentional injury,
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not merely a deliberate or intentional act that leads to injury.” Kawaauhau v.
Geiger, 523 U.S. 57, 61 (1998) (emphasis in original). “Malicious” means
“wrongful and without just cause or excessive even in the absence of personal
hatred, spite or ill will.” In re Jennings, 670 F.3d 1329, 1334 (11th Cir. 2012)
(quotation omitted). To establish malice “a showing of specific intent to harm
another is not necessary.” Id. (quotation omitted).
We agree with the bankruptcy court and the district court that the state court
judgment for abuse of process and the requirements of non-dischargeability for
knowing and willful injury under § 523(a)(6) are sufficiently identical for collateral
estoppel purposes. Abuse of process contains an express requirement of
willfulness or intent, just like § 523(a)(6). Compare Gause, 457 So. 2d at 584,
with Kawaauhau, 523 U.S. at 61. It also requires an ulterior motive or purpose,
Hardick, 795 So. 2d at 1111 n.2, which closely mirrors the lack of just cause
requirement for malice. See In re Jennings, 670 F.3d at 1334 (transfer of property
without just cause and effected only to prevent creditor from satisfying personal
injury judgment was malicious under § 523(a)(6)). It is thus unsurprising that our
sister circuits have held that similar abuse of process judgements are non-
dischargeable. See In re Scarborough, 171 F.3d 638, 642–44 (8th Cir. 1999); In re
Abbo, 168 F.3d 930, 932 (6th Cir. 1999).4
4
Our conclusion is not altered by the captioning of Count Three as one for “defamation; abuse of
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Mr. Ferguson seeks to relitigate the state court judgment, raising facts to
dispute whether his conduct was actually willful and malicious. But, he had a “full
and fair opportunity to litigate that issue in the earlier case,” and therefore
collateral estoppel bars relitigation of that issue. See Allen v. McCurry, 449 U.S.
90, 94–95 (1980). In sum, Mr. Ferguson wants an impermissible “second bite at
the apple” despite having fully participated in the prior action that resulted in an
adverse judgment for abuse of process. See In re Bush, 62 F.3d at 1324. The
bankruptcy court and the district court correctly determined that collateral estoppel
prevented this relitigation and that Mr. Ferguson caused willful and malicious
injury to Mr. Beem. Therefore, we affirm the grant of summary judgment.
V
For the foregoing reasons, we find that the bankruptcy court and the district
court properly determined that Mr. Beem’s complaint related back to his previous
filing (the motion), and affirm the grant of summary judgment in favor of Mr.
Beem.
process.” Count Three explicitly included the requisite elements of abuse of process. For
example, Mr. Beem alleged that Mr. Ferguson filed false complaints with government agencies
“for the improper purpose of extorting” him. See AP Doc. 106-1 at 63. Extortion is often
associated with abuse of process. See Bothmann v. Harrington, 458 So. 2d 1163, 1169 (Fla. 3d
DCA 1984). In granting summary judgment on Count Three, the state court noted that Mr.
Ferguson failed to support his allegations with any evidence, despite prosecuting the action for
more than a year. Moreover, the jury damage award specifically found that Mr. Beem suffered
“emotional damages which were the direct and proximate cause of his defending against Gary
Ferguson’s Complaint,” which is consistent with damages for abuse of process. And, further
reinforcing this conclusion, the arguments on appeal to the Florida appellate court focused on
abuse of process.
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AFFIRMED.
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