In Re: Roberto Felice Donna ( 2019 )


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  • UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF COLUMBIA
    In re
    Roberto Felice Donna,
    Debtor.
    JESUS VENTURA, et al.,
    Plaintiffs-A ppellants,
    v.
    ROBERTO DONNA,
    Debtor-Appellee.
    Bankr. Case No. 16-00091
    Adversary Proceeding No. 16-10026
    Bankr. Appeal No. 17-2217 (TFH)
    MEMORANDUM OPINION
    Appellants initiated an adversary proceeding against Roberto Donna in the United States
    Bankruptcy Court for the District of Columbia in September 2017. The Bankruptcy Court
    granted summary judgment Mr. Donna on all of Appellants’ claims, and awarded him attorney’s
    fees for his response to Appellants’ motion for a protective order. Appellants have appealed the
    Bankruptcy Court’s rulings.
    I. BACKGROUND
    Roberto Donna is a chef of Italian cuisine who has long worked in the Washington, D.C.
    area. AA at 716. He was a majority owner of the Italian restaurant Galileo from 1984 until it
    closed in 2006. AA at 717-18 [ECF No. 5-1]. In 2006, he opened the restaurant Bebo Trattoria
    (“Bebo Trattoria” or “Bebo”) in Arlington, Virginia. AA at 718. Bebo lost its lease and closed in
    April 2009. AA at 720.
    Appellants Jesus Ventura, Mohammed Douah, Arturo Ramos, Bisera Romic, Carlos
    Sosaya, Dorde Milojevic, Teor Vuckovic, Marijana Bosnjak, Tulga Dorjgotov and Elizabeth
    Scott (“the Employees”) were employees of Bebo Trattoria. They worked at the restaurant for
    lengths of time varying from 5 to 23 months, spanning January 2007 to December 2008. AA at
    1287; 1293; 1295; 1298; 1300; 1302; 1305; 1310; 1312.
    In 2008, a group of former Bebo Trattoria employees, including most of the Employees
    here, sued Roberto Donna, Bebo Foods, Inc. and RD Trattoria, Inc. for failing to pay minimum
    and overtime wages in violation of the Fair Labor Standards Act (“FLSA”) and the D.C. Wage
    Payment and Collection Law (“DCWPCL”) when they were employed at Bebo Trattoria and
    Galileo. In 2010, the district court granted summary judgment to the former employees, finding
    that Mr. Donna violated the FLSA and the DCWPCL by failing to pay his employees wages and
    overtime. Ventura v. Bebo Foods, Inc., 
    738 F. Supp. 2d 1
    , 5 (D.D.C. 2010) (Ventura J). After
    holding two hearings on damages, the court awarded the plaintiffs $526,893.16, including
    liquidated damages. Ventura v. Bebo Foods, Inc., 
    738 F. Supp. 2d 8
    , 12 (D.D.C. 2010) (Ventura
    I). Mr. Donna was pro se during both the summary judgment briefing andthe damages hearings.
    Mr. Donna filed for Chapter Seven bankruptcy on March 2, 2016. In response, the
    Employees filed an adversary proceeding in the United States Bankruptcy Court for the District
    of Columbia seeking relief from the discharge of Mr. Donna’s debts as it relates to their damages
    award in Ventura II. They sought relief pursuant to 11 U.S.C. § 526(a)(6), which excludes from
    discharge debts “for willful and malicious injury by the debtor to another entity,” and pursuant to
    11 U.S.C. § 523(a)(2)(A), which excludes from discharge debts “obtained by . . . false pretenses,
    false representation, or actual fraud.”
    _ The Bankruptcy Court granted summary judgment for Mr. Donna, finding that “the
    plaintiffs have not provided evidence to support their claims that the debtor intended to defraud,
    or knew any statements he made to the plaintiffs were false, or that the debtor caused a willful
    and malicious injury to the plaintiffs.” Ventura v. Donna (In re Donna), Bankr. No. 16-00091,
    Adv. No. 16-10026, 
    2017 WL 4457407
    , at *1 (Bankr. D.D.C. Sept. 27, 2017). The Employees
    seek review of that ruling on the grounds there are genuine disputes of material fact over whether
    Mr. Donna willfully and maliciously injured his employees under 11 U.S.C. § 523(a)(6) when he
    failed to pay them wages, tips, and overtime, and whether Mr. Donna’s promises to pay his
    employees’ wages, tips, and overtime constituted “false representations” under 11 U.S.C. §
    523(a)(2)(A). They also seek review of the Bankruptcy Court’s order granting attorney’s fees to
    Mr. Donna for his response to their motion for a protective order in the adversary proceeding.
    AA at 1552-1556.
    I. STANDARD OF REVIEW
    A. Summary Judgment
    Summary judgment decisions of the bankruptcy court are reviewed de novo, United
    States v. Spicer, 
    57 F.3d 1152
    , 1159 (D.C. Cir. 1995), and that review extends to both questions
    of law and fact, In re Capitol Hill Group, 
    447 B.R. 387
    , 393 (D.D.C. 2011). “Summary
    judgment in bankruptcy is governed by Bankruptcy Rule 7056, which incorporates the standard
    of Rule 56 of the Federal Rules of Civil Procedure: summary judgment may be granted only if
    there is no genuine issue of material fact and the moving party is entitled to judgment as a matter
    of law.” Jd.; see also Fed. R. Bankr. P. 7056 (“Rule 56 F.R.Civ.P. applies in adversary
    proceedings”); Local Bankr. R. 7056-1 (adopting major parts of LCvR 7(h)(1)).
    3
    The movant “bears the initial responsibility of informing the district court of the basis for
    its motion, and identifying those portions of the pleadings, depositions, answers to
    interrogatories, and admissions on file, together with the affidavits, if any, which it believes
    demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 
    477 U.S. 317
    , 323 (1986) (internal quotation marks omitted). In response, the nonmoving party must “go
    beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories,
    and admissions on file, designate specific facts showing that there is a genuine issue for trial.” 
    Id. at 324
    (internal quotation marks omitted).
    At the summary judgment stage, “the judge’s function is not. . . to weigh the evidence
    and determine the truth of the matter but to determine whether there is a genuine issue for trial.”
    Anderson v. Liberty Lobby, Inc., 
    477 U.S. 242
    , 249 (1986). Although “[t]he evidence is to be
    viewed in the light most favorable to the nonmoving party and the court must draw all reasonable
    inferences in favor of the nonmoving party,” Talavera v. Shah, 
    638 F.3d 303
    , 308 (D.C. Cir.
    2011), “[i]f the evidence is merely colorable . . . or is not significantly probative . . . summary
    judgment may be granted,” 
    Anderson, 477 U.S. at 249-50
    .
    B. Discovery Sanctions
    Under Rule 37 of the Federal Rules of Civil Procedure, “the district court has broad
    discretion to impose sanctions for discovery violations.” Bonds v. District of Columbia, 
    93 F.3d 801
    , 808 (D.C. Cir. 1996); see also Fed. R. Bankr. P. 7037 (“Rule 37 F.R.Civ.P. applies in
    adversary proceedings.”’). “[D]iscovery-related orders” are reviewed for “abuse of discretion, a
    ‘narrowly circumscribed’ scope of review.” Parsi v. Daioleslam, 
    778 F.3d 116
    , 125 (D.C. Cir.
    2015) (quoting Lee v. Dep’t of Justice, 
    413 F.3d 53
    , 59 (D.C. Cir. 2005)). In reviewing discovery
    sanctions, the Court may reverse the Bankruptcy Court “only if... its actions were clearly
    unreasonable, arbitrary or fanciful.” 
    Bonds, 93 F.3d at 807
    (internal quotation marks omitted).
    4
    HI. THE FACTS IN THE RECORD
    A. The Bankruptcy Court Did Not Have an Obligation to Review the Entire District
    Court Record.
    As a preliminary matter, the Employees contend that the Bankruptcy Court should have
    reviewed the entire record that was before the district court in Ventura J and Ventura IT (the
    “District Court”) when ruling on Appellee’s motion for summary judgment. Appellant Br. at 12
    [ECF No. 5]. They note that the District Court conducted three evidentiary hearings and heard
    testimony from Mr. Donna, restaurant managers, and five of his employees, but contend that the
    Bankruptcy Court “failed to consider any of the facts from the District Court record which
    contravened Mr. Donna’s self-serving declaration.” Jd. If the Bankruptcy Court had reviewed
    those facts, the Employees claim that it would have found that “Mr. Donna had not suffered from
    poor business decision-making, but had willfully and intentionally engaged in a pattern of wage
    theft, and then deliberately misrepresented to his employees that he would pay them... .” Jd.
    To support their argument, the Employees rely on Jn re Makozy, which similarly involved
    an adversary proceeding to block the discharge of debts stemming from an FLSA judgment. The
    In re Makozy court “look[ed] at the findings supporting the [d]istrict [c]ourt’s conclusion that the
    actions were ‘willful’ under the FLSA” to determine whether the actions were willful under 11
    U.S.C. § 523(a)(6). Appellant Br. at 12; United States v. Makozy (In re Makozy), Bankr. No. 13—
    25231, Adv. No. 13-2440, 
    2013 WL 9663062
    , *3 (Bankr. W.D. Pa. Sept. 9, 2014). In re Makozy
    differed from this case because there was no record before the Jn re Makozy court. The summary *
    judgment filings did not include record citations or an appendix; instead, they referred entirely to
    the FLSA court’s findings. See Makozy Br. in Supp. Mot. Summ. J. [ECF No. 37] & United
    States Br. in Supp. Mot. Summ. J. [ECF No. 39], In re Makozy, Adv. No. 13—2440-CMB. In
    contrast, in this case, there was a record before the Bankruptcy Court containing evidence
    developed in both the adversarial proceeding and the FLSA case. See, e.g., AA at 1062-1312.
    The Bankruptcy Court did not have an obligation to depart from ordinary-summary
    judgment procedures and review the parts of the District Court record that the parties did not cite
    in their summary judgment motions. See Jackson v. Finnegan, Henderson, Farabow, Garrett &
    Dunner, 
    101 F.3d 145
    , 154; 151 (D.C. Cir. 1996) (stating in reference to Local Civil Rule 7h,
    which the Local Bankruptcy Rules have adopted, that the Court is “under no obligation to sift
    through the record” on summary judgment, and that the burden is “on the parties and their
    counsel, who are most familiar with the litigation and the record, to crystallize for the district
    court the material facts and relevant portions of the record.”). In their opposition to Mr. Donna’s
    motion for summary judgment, the Employees had the responsibility to present all the evidence
    demonstrating a genuine dispute of material facts to the Bankruptcy Court. See 
    Celotex, 477 U.S. at 324
    (finding that Federal Rule of Civil Procedure 56(e) requires “the nonmoving party to “go
    beyond the pleadings and by [their] own affidavits, or by the depositions, answers to
    interrogatories, and admissions on file, designate specific facts showing that there is a genuine
    issue for trial.”) (internal quotations omitted).
    Although the Bankruptcy Court did not include specific citations to the record in its
    opinion, contrary to the Employees’ assertions, it based its decision on facts in the record derived
    from the FLSA proceedings, including those unfavorable to Mr. Donna. See, e.g., In re Donna,
    
    2017 WL 2017
    4457407, at *2 (noting that “the debtor did not pay the plaintiffs all their wages,
    and often the plaintiffs would receive unsigned checks, checks that were postdated, or checks
    that would bounce .... When plaintiffs would ask the debtor to pay them, he would tell them
    that the company was having financial difficulty, but it was his intent to pay them in full.
    Additionally, when employees threatened to leave, the debtor would ask them to stay promising
    to pay them when the restaurant had the money.”).
    As Mr. Donna argues, the Employees challenge the difference between the District and
    Bankruptcy Courts’ characterizations of the evidence. They claim that the District Court found
    that “Mr. Donna deliberately disregarded his legal obligations to pay his employees and instead
    engag[ed] in a widespread illegal pay practice,” Appellant Br. at 21, while the Bankruptcy Court
    disputed that finding and instead concluded that Mr. Donna’s “repeated and flagrant violations”
    of D.C. and federal law were “simply a failing business man unable to pay his debts.” Jd;
    compare Ventura 
    IJ, 738 F. Supp. 2d at 12
    , 31 (describing defendants’ practice of “issuing
    checks without signatures, issuing post-dated checks, and issuing checks despite insufficient
    funds” as “persistent and widespread,” and finding, in relation to determining money owed to
    Jesus Ventura from his time at Galileo, that “[p]laintiffs . . . have submitted ample evidence
    showing that defendants deliberately disregarded their legal obligations to pay their employees.”)
    (emphasis added) with In re Donna, 
    2017 WL 2017
    4457407, at *7 (concluding that “[t]he
    plaintiffs do not show a widespread illegal payment scheme.”) (emphasis added). But they have
    not demonstrated why the Bankruptcy Court should be bound by the District Court’s
    conclusions, especially given that the two courts were considering different causes of action—
    violations of wage laws versus exceptions to discharge under bankruptcy law. The District
    Court’s conclusion that Mr. Donna “took a willful act to not pay the plaintiffs” does not equate to
    “proof that the debtor caused a willful injury.” Jn re Donna, 
    2017 WL 2017
    4457407, at *6; see
    also Faria v. Silva (In re Silva), Bankr. No. 12-17413, Adv. No. 12-1274, 
    2014 WL 217889
    , at
    *10 (D. Mass. Jan. 21, 2014) (“[B]reach of an employment contract through failure to pay
    wages, by itself, is not enough to constitute a willful injury.”). Furthermore, Mr. Donna, who is
    now represented by counsel, has adduced support for his case, such as his inability to pay his
    employees, that may not have been relevant to the District Court litigation. For these reasons, the
    Bankruptcy Court did not err by relying only on the record before it in the adversary
    proceedings.
    B. ‘Material Facts to Which There is No Genuine Dispute
    Bebo Trattoria paid its employees irregularly, and distributed checks that were deficient
    in various ways—sometimes they were postdated, unsigned, made for zero dollars, or did not
    reflect the hours that employees worked. E.g., AA at 1077-79 (Ventura Test.) (testifying that
    sometimes employees received paychecks every three weeks instead of every two weeks, that
    checks were not signed, and that he was not paid in total for about six weeks of work); AA at
    1287 (Ventura Aff.) (paystubs did not reflect actual hours; check amounts were zero, checks
    were often post-dated); AA at 1298 (Romic Aff.) (paystubs did not reflect hours); AA at 1300
    (Sosaya Aff.) (same); AA at 1293 (Douah Aff.) (paystubs did not reflect hours, check amounts
    were zero, checks were postdated); AA at 1453 (Dorjgotov Dep.); AA at 1295 (Ramos Aff.).
    Employees were often unable to cash their paychecks due to insufficient funds in Bebo’s bank
    account. F.g., AA at 1124 (Scott Test.) (“We would all go to the bank and stand in line and be
    told that our checks couldn’t be cashed.”); AA at 1380 (Sosaya Dep.) (testifying that employees
    had to “wait in line” and “whoever cash[ed] the check[s] first g[o]t the money. The rest of the
    people has[sic] to wait for probably one week, two weeks . . . Basically this happens most of the
    time, all the time.”); AA at 1097 (Vuckovic Test.); AA at 1287 (Ventura Aff.); AA at 1293
    (Douah Aff.); AA at 1453-54 (Dorjgotov Dep.). Employees did not receive some overtime
    payments, and some of their tip wages. E.g., AA at 1300 (Sosaya Aff.); AA at 1302 (Milojevic
    Aff).
    When employees asked about their missing wages, Mr. Donna promised to pay them
    their full wages, but did not do so. E.g., AA at 1296 (Ramos Aff. [ff 14-15) (“During one
    conversation we had, Roberto Donna told me he was going to apply for a loan to pay everyone
    he owed unpaid wages. I don’t know if he applied for or received the loan. Roberto Donna would
    promise to pay me my wages in 5-7 days or in a couple of weeks; sometimes he would pay me
    part of my wages but never the entire amount.”); AA at 1298 (Romic Aff.) (‘Roberto Donna said
    he had to pay Bebo’s bills and was behind with payments; he promised to pay us in a few weeks
    but he never did’); AA at 1300 (Sosaya Aff. identical); AA at 1302 (Milojevic Aff. identical);
    AA at 706 (Ramos Test.) (agreeing that Mr. Donna explained to Mr. Ramos that business was
    bad and there was not enough money to pay the employees). Mr. Donna also stated that when
    “employees complained to me about the delay in payment or difficulty cashing certain checks, I
    acknowledged that Bebo had cash flow difficulties, that [Bebo] needed to pay the operating
    expenses of the restaurant, and that it was my intention that they receive their payments when
    funds became available.” AA at 720 (Donna Decl.)
    According to Arturo Ramos, who worked in a variety of positions at the restaurant, when
    he tried to work fewer shifts so that he could obtain employment elsewhere, one of the
    restaurant’s managers, Corrado Bonino, told him that the restaurant would “pay only to the
    people who work full time here, not who works[sic] part time.” AA at 1405; 1407-08 (Ramos
    Dep.). Ms. Scott, Bebo’s director of marketing who also served as Mr. Donna’s personal
    assistant, testified that Mr. Donna would threaten to “ruin [the] careers” of individuals who left
    the restaurant, and that he threatened to “pull [employees’] green cards or call immigration if
    they quit on him.” AA at 1437-38 (Scott Dep.).
    In order to finance Bebo, RD Trattoria, an entity Mr. Donna formed to operate the
    restaurant, obtained “hi-cost financing for working capital in the form of cash advances on future
    credit card sales.” AA at 718 (Donna Decl.). The restaurant took out a “lump sum loan for
    working capital” from a financing company that managed the restaurant’s credit card processing
    systems. Jd. The financing company typically deducted 20% off the top of all credit card sales as
    payment towards the loan. Jd. Within a few months after Bebo opened, Mr. Donna and his wife
    stopped receiving salaries from the restaurant. Jd. at 719. He and his wife supported themselves
    by teaching cooking classes, cashed out their life insurance policies, and drew down their
    savings. Jd. In the summer of 2007, Mr. Donna “obtained additional borrowed funds to help pay
    Bebo’s debts by pledging [his] residence as collateral for an additional loan to RD Trattoria.” Jd.
    at 720 (Donna Dec.). Despite his “efforts to make Bebo a financial success, in April 2009, Bebo
    lost its lease and closed. By the time Bebo closed, its business had declined approximately 40%
    from its peak. Many of the business’s records were lost when the landlord seized the premises.”
    
    Id. By 2010,
    Mr. Donna had “lost [his] home and [his] Dupont Circle apartment based upon [his]
    personal guaranty of Bebo’s business debts. [His] automobile had been repos[essed].” Mr.
    Donna and his wife moved in with his in-laws. Jd.
    In November of 2010, the State of Virginia filed a complaint against Mr. Donna, alleging
    that from November 2006 to approximately April 2009, Mr. Donna “withheld taxes from his
    employees and charged and collected the sales tax and held the money in trust for the
    Commonwealth of Virginia but used the money for his own purposes.” AA at 1317-18. He pled
    guilty to the charge, and was ordered to pay restitution to the Commonwealth of Virginia
    Department of Taxation of $375,439.56, plus interest at 8% per year. AA at 1319-1322.
    10
    IV. ANALYSIS
    A. There is a Genuine Dispute of Material Fact over Whether Mr. Donna Willfully and
    Maliciously Injured His Employees.
    The Bankruptcy Court found that the Employees did “not provid[e] evidence to support
    their claims . . . that the debtor caused a willful and malicious injury” to them, and that they did
    not show that those injuries were attributable to Mr. Donna. Jn re Donna, 
    2017 WL 4457407
    , at
    *1, The Employees challenge the Bankruptcy Court’s conclusions, and argue that there is a
    genuine dispute of material fact as to whether Mr. Donna willfully and maliciously injured the
    Employees under § 523(a)(6) when he failed to pay them minimum wages, tip wages and
    overtime wages. Appellant Br. at 3.
    1. 11 U.S.C. § Section 523(a)(6)
    A fundamental purpose of bankruptcy law is to “relieve the honest debtor from the
    weight of oppressive indebtedness, and permit him to start afresh free from the obligations and
    responsibilities consequent upon business misfortunes.” Local Loan Co. v. Hunt, 
    292 U.S. 234
    ,
    244 (1934) (internal quotation marks omitted). “[E]xceptions to discharge are strictly and
    narrowly interpreted so as to promote the Bankruptcy Code’s purpose of providing a fresh start
    to debtors.” Orr v. Marcella (In re Marcella), 
    463 B.R. 212
    , 219 (Bankr. D. Conn. 2011). One
    such exception to the discharge of debts falls under § 523(a)(6), which “does not discharge an
    individual debtor from any debt . . . for willful and malicious injury by the debtor to another
    entity or to the property of another entity.” 11 U.S.C. § 523(a)(6). The plaintiff must prove by
    a preponderance of the evidence that the debtor’s actions were willful and malicious. Hamilton v.
    Nolan (In re Nolan), 
    220 B.R. 727
    , 729-30 (Bankr. D.D.C. 1998). The “willful” and “malicious”
    requirements must both be present.
    11
    2. There is a Genuine Dispute of Material Fact as to Whether the Debtor
    Willfully Injured the Employees.
    The Employees first assert that there is a genuine dispute of material fact as to whether
    Mr. Donna “willfully” injured them. The Supreme Court has held that the “word ‘willful’ in [§
    523](a)(6) modifie[s] the word ‘injury,’ indicating that nondischargeability takes a deliberate or
    intentional injury, not merely a deliberate or intentional act that leads to injury.” Kawaauhau vy.
    Geiger, 
    523 U.S. 57
    , 61 (1998). The “‘willful injury requirement is met only when the debtor has
    a subjective motive to inflict injury or when the debtor believes that injury is substantially certain
    to result from his own conduct.’” Jones v. Holland (In Re Holland), Bankr. No. 12-00496, Adv.
    No. 12-10040, 
    2013 WL 2190164
    , at *4 (Bankr. D.D.C. May 21, 2013) (quoting Carrillo v. Su
    (In re Su), 
    290 F.3d 1140
    , 1142 (9th Cir. 2002)). Failure to pay wages, even knowing the
    consequences of that failure, does not alone rise to a “willful” injury. Jn re 
    Marcella, 463 B.R. at 220
    .
    The Bankruptcy Court concluded that the Employees did not demonstrate that Mr. Donna
    caused a willful injury under § 523(a)(6) because they did not “provide any proof the debtor
    intended to injure” the Employees, and because “[a]ll the facts indicated that the debtor wanted
    to pay [the Employees], but could not.” In re Donna, 
    2017 WL 4457407
    , at *6. According to the
    Bankruptcy Court, “[t]he debtor provided [the Employees] checks in payment of wages and tips;
    he just did not have the money in the bank to honor those checks,” and Mr. Donna’s payment of
    business expenses before the Employees “does not indicate an illegal payment scheme.” Jd. at
    *7. The Bankruptcy Court also found that there were no aggravating circumstances to support a
    willfulness finding because there was “no evidence” that Mr. Donna had the money to pay his
    employees but failed to do so. Jd. at *9.
    12
    The Employees argue that Mr. Donna’s “repeated failures to pay his employees in
    compliance with District of Columbia and federal law are sufficient to show an intent to injure or
    knowledge of substantial likelihood of injury.” Appellant Br. at 21. They contend that “[b]oth the
    Ninth Circuit and Bankruptcy Court for the District of Massachusetts have found that employer
    wage theft is sufficiently willful and malicious that the resulting debt to employees be excepted
    from discharge.” Jd. 14-17 (citing Petralia v. Jercich (In re Jercich), 
    238 F.3d 1202
    (9th Cir.
    2001) and Oliveira v. Ruhland (In re Ruhland), Bankr. No. 11-19510, Adv. No. 11-1322, 
    2013 WL 1088737
    (Bankr. D. Mass. Mar. 13, 2013)). They argue that the Court should hold that “Mr.
    Donna’s deliberate practice of not paying his employees renders the judgment obtained by the
    the Employees excepted from discharge.” Jd. at 13. In response, Mr. Donna asserts that Jercich
    and Ruhland “do not hold that debts due to wage violations are by themselves willful injuries,”
    but rather emphasize that a breach of an employment contract must be accompanied by
    intentional tortious conduct, such as diversion of company funds to personal use. Appellee Br. at
    24-25.
    The Court agrees with Mr. Donna that the willfulness inquiry involves an examination of
    the entire circumstances surrounding the non-payment of wages, not just the non-payment of
    wages itself. In In re Jercich, the Ninth Circuit found that a debtor who did not pay its employee
    as required by an employment agreement satisfied § 523(a)(6)’s willfulness standard where the
    debtor “knew he owed the wages to [the debtee] and that injury to [the debtee] was substantially
    certain to occur if the wages were not paid; and. . . had the clear ability to pay [the debtee] his
    wages, yet chose not to pay and instead used the money for his own personal benefit,” including
    for a horse ranch. In re 
    Jercich, 238 F.3d at 1208-1209
    . In doing so, the Ninth Circuit looked not
    only at the debtor’s failure to pay, but also at other factors including the debtor’s ability to pay
    13
    and his use of the money for personal benefit. Similarly, when faced with a debtor who owned a
    painting business and failed to pay his employee on multiple occasions, the court in Jn re
    Ruhland considered a number of factors when determining that the debtor willfully caused
    injury. See In re Ruhland, 
    2013 WL 1088737
    , at *11 (finding the debtor “willfully” injured his
    employee where he “did not maintain a checking account because of his history of insufficient
    funds checks; he admitted that he could not produce pay stubs or other contemporaneous records
    of what he owed the Plaintiff and other employees. His promises were made to induce the
    Plaintiff to continue working for him,” and he received money from customers).
    In order to determine willfulness, then, the Court will assess the aggravating factors
    surrounding the non-payment of wages, including whether the debtor had the ability to pay
    employees, whether the debtor did pay the employees, and whether the debtor used business
    income for personal purposes. See also, e.g., In re 
    Marcella, 463 B.R. at 220
    -222 (finding no
    willful injury by examining factors such as a decline in business, checks returned for insufficient
    funds, the inability of the company to pay its creditors, and no diversion of company funds for
    personal expenditures).
    a) The Bankruptcy Court Did Not Address Certain Aggravating
    Factors Raised by the Employees.
    The Employees have raised aggravating factors that speak to willfulness that the
    Bankruptcy Court did not address. First, the Bankruptcy Court did not address the parties’
    dispute over whether Mr. Donna shared accurate wage information with his employees. Mr.
    Donna argues that “systematic measures” were taken to keep track of amounts owed to
    employees in unpaid tips and wages, citing a spreadsheet tracking accrued credit card tips to
    14
    employees and amounts owed.! Appellee Br. at 39 [ECF No. 7]. Some employees testified that
    they could keep track of the amounts Bebo owned them when they were not able to cash checks.
    AA at 688 (Ventura Dep.); AA at 679-80 (Douah Dep.) (Q: So you would know at the end of
    your shift how much you were entitled to receive based on the credit cards and the tips on the
    credit cards by printing out a record of the work that you had done and payments you had been
    credited that shift. Correct? A: Yes.”)).
    In contrast, Elizabeth Scott, Bebo’s former director of marketing and Mr. Donna’s
    personal assistant, stated that she believed that restaurant managers would, “with Mr. Donna’s
    approval, intentionally avoid[] providing employees receipts in order to confuse them about their
    unpaid wages so they would not know exactly how much money they were owed.”” AA at 1306
    (Scott. Aff.). She also testified that “[i]t was pretty clear” that Mr. Donna and Bebo’s managers
    “were confusing the matter” of employee wages because “employees would keep very accurate
    records, as did I, of the moneys owed. Every day you clock in and clock out, you get a chit that
    shows exactly what you’re owed on your credit card receipts. . . . [b]ut the document that
    Corrado and Riccardo? and Roberto would work off of was an Excel spreadsheet that oftentimes
    showed far less monies owned than what the MICRO chits would say were owed to employees .
    ...” AA at 1540; see also 
    id. at 1541
    (“[Mr. Donna] would keep their money and make it
    difficult for all of us to attempt to explain the amount of monies we were owed”). Similarly, Mr.
    Remos testified that he would “keep record of everything, my work time in, my tips, every single
    thing, even cents,” and that biweekly sheets reflecting “the time that [he] work{ed] in the
    ' This spreadsheet is not included in the record before the Court but was iri the record in the
    District Court proceedings. Ventura 
    I, 738 F. Supp. 2d at 17
    .
    * It is not apparent from the record whether Ms. Scott made this statement based on personal
    knowledge or hearsay. That will be a question for the Bankruptcy Court to decide when determining
    whether to admit her testimony on this issue.
    3 Corrado and Ricardo Bonino were both managers at Bebo.
    15
    restaurant ... would only put like 70 hours” even though he was working “60 hours a week.”
    AA at 1110. When he complained, “they would say they would fix it, but it did not—it didn’t
    work because always they would send me to somebody else.” Jd. Furthermore, Mr. Phillip
    Proulx, Bebo’s former accountant, testified that he received bi-weekly reports of tip wages
    earned, but did not receive reports of the wages that were paid to employees. AA at 1168 (Proulx
    Test.). This contradictory evidence demonstrates a genuine dispute over whether Mr. Donna
    shared accurate wage information with his employees and attempted to confuse them by
    concealing the amount of wages that Bebo owed them.
    Second, although the failure to pay wages alone does not amount to willfulness, the Court
    cannot ignore the different methods Bebo used to avoid paying its employees. Bebo did not just
    issue checks without sufficient funds for them to be cashed, as might be expected from a
    company struggling to pay wages. Paystubs did not reflect hours worked, and checks were
    sometimes postdated, unsigned, or made for zero dollars. E.g., AA at 1287 (Ventura Aff.); AA at
    1298 (Romic Aff.); AA at 1300 (Sosaya Aff.); AA at 1293 (Douah Aff). AA at 1077-79
    (Ventura Test.); AA at 1453 (Dorjgotov Dep). There is no explanation in the record why
    employee paychecks were marred by these irregularities.
    Third, there is unrefuted evidence that Mr. Donna threatened employees to keep them on
    staff. Ms. Scott testified that Mr. Donna “threatened to blackball us in the industry” if employees
    stopped working, and that “[h]e put it in writing to me.” AA at 1437 (Scott Dep.). She claims
    that Mr. Donna would threaten to “ruin [the] careers” of individuals who left the restaurant, and
    that he threatened to “pull [employees’] Green Cards or call immigration if they quit on him.” Jd.
    at 1437-38.4 Mr. Donna not only knew that his failure to pay his employees would injure them—
    4 Ms. Scott gave this testimony during the bankruptcy proceedings where Mr. Donna was
    represented by counsel. The Court does not see evidence in the record challenging whether Ms. Scott had
    16
    something every individual who fails to pay employees will know—but he also threatened their
    livelihood in order to force them to continue working for him.
    b) The Bankruptcy Court Properly Concluded that There Was No
    Evidence that Mr. Donna Spent Business Income on Personal
    Expenses.
    The Bankruptcy Court found that the Employees “offered no evidence that the debtor
    used [their] money for personal use.” Jn re Donna, 
    2017 WL 4457407
    , at *7. The Bankruptcy
    Court noted the “closest” the Employees came to providing evidence Mr. Donna used “wages or
    tip earnings on personal expenses” was Elizabeth Scott’s testimony “that the debtor took lavish
    trips, bought a new computer, had a nice car and an expensive home.” Jd. The Bankruptcy Court
    concluded that “Scott’s testimony is purely speculative, likely based on hearsay, and without a
    single shred of evidence of truth.” Jd.
    In her role as personal assistant to Mr. Donna, Elisabeth Scott booked Mr. Donna’s
    airfare, hotel, transportation and dinners. AA at 1434 (Scott Dep.). She described Mr. Donna as
    taking “very expensive” and “lavish trips to Italy and New York and around the world cooking.”
    AA at 1433 (Scott Dep.); AA at 1126 (Scott test.). In an interrogatory response, Mr. Donna
    confirmed that between January 2005 and December 2010, he traveled to Thailand, Iceland, Italy
    and St. Barts. AA at 1360. According to Ms. Scott, some of the trips were paid for by others, but
    Mr. Donna paid for some on his credit card. AA at 1434, 685 (Scott Dep.). She could not recall
    how Mr. Donna paid for the trips he put on his credit card. AA at 685 (Scott Dep.). Ms. Scott
    also testified that Mr. Donna bought a computer for personal use. AA at 1439 (Scott Dep.).
    personal knowledge that other employees were threatened when she gave this testimony. Whether her
    statements are based on personal knowledge or hearsay will be a question for the Bankruptcy Court to
    consider.
    17
    Ms. Scott’s testimony as to Mr. Donna’s home and car was speculative—she did not
    appear to have any knowledge about his assets and how he acquired them. Although she testified
    that she booked his travel arrangements in her role as personal assistant, she did not recall how
    he paid for the trips charged to his credit card. There is no other evidence supporting the
    Employees’ assertion that Mr. Donna spent company funds on personal travel, such as credit
    card receipts showing the purchases or bank records demonstrating how Mr. Donna paid for
    them. Ms. Scott does not even specify whether he made the purchases on a corporate or personal
    credit card. As a result, is not reasonable to infer from Ms. Scott’s statement that Mr. Donna paid
    for personal expenditures with income from his restaurant. Ms. Scott’s testimony alone does not
    create a triable issue of fact.
    There is no other evidence that Mr. Donna paid for personal expenditures with income
    from Bebo. The Court is not convinced that Mr. Donna’s plea to embezzlement demonstrates
    that he used money withheld from his employees for personal use. The complaint in Virginia
    alleged that Mr. Donna “withheld taxes from his employees and charged and collected the sales
    tax and held the money in trust for the Commonwealth of Virginia but used the money for his
    own purposes.” AA at 1318 (emphasis added). The Court infers that Mr. Donna was not paying
    his taxes or his employees. The plea alone is not enough evidence to support the inference, as the
    Employees assert, that Mr. Donna used the money for his own personal use rather than for
    business purposes.
    c) The Bankruptcy Court Properly Concluded that Mr. Donna Did
    Not Pay the Employees Because Bebo Struggled Financially.
    The Court finds that it was proper for the Bankruptcy Court to infer that Mr. Donna
    struggled to pay his employees because Bebo lacked the funds to do so. Mr. Donna obtained
    high-cost financing for his restaurant that deducted 20% off all credit card sales, he stopped
    18
    withdrawing a salary within months after the restaurant opened, and he borrowed additional
    funds to finance the restaurant using his home as collateral for his debts. AA at 718-20 (Donna
    Decl.). Mr. Donna lost his home, an apartment, and his vehicle due to his personal guarantee of
    Bebo’s debts. /d. at 20.
    The Employees contend that “[n]owhere in the record is there a declaration from Mr.
    Donna that he was actually unable to pay his employees... . Mr. Donna instead just described
    ‘cash flow difficulties,” that business declined, and that he ended up closing his restaurant.”
    Appellant Br. at 36. In response, Mr. Donna argues that the “hallmark for aggravating
    circumstances in a wage case has consistently been recognized as a failure to pay despite a
    company’s financial ability to do so while at the same time the debtor diverted the funds for
    personal use.” Appellee Br. at 26. He asserts that employees could not support their assertions
    that the restaurant could pay them, and “admitted they had [no] information regarding the actual
    finances of the restaurant. . . .” 
    Id. Although the
    Employees criticize Mr. Donna’s failure to support his statement that “his
    restaurant was doing poorly or that he intended to pay his employees” aside from his “self-
    serving” declaration, that criticism is misplaced. Appellant Br. at 35; 11. The fact that Mr.
    Donna’s affidavit serves his case is not in and of itself disqualifying—“evidence a party proffers
    in support of its cause will usually, in some sense, be ‘self-serving.’” Johnson v. Perez, 
    823 F.3d 701
    , 710 (D.C. Cir. 2016). Rather, the Employees have the burden of contradicting Mr. Donna’s
    assertions with “[their] own affidavits, or by the depositions, answers to interrogatories, and
    admissions on file.” 
    Celotex, 477 U.S. at 324
    (internal quotation marks omitted). The Employees
    have not provided any evidence contradicting Mr. Donna’s account of the restaurant’s financial
    situation. They have not provided any evidence disputing Mr. Donna’s efforts to make Bebo
    19
    Trattoria viable. They have not provided any evidence that Bebo, or Mr. Donna, had money to
    pay employees but did not do so. Employees who were queried did not know why they were not
    able to cash their checks and could not support their assertions that Mr. Donna had money that he
    was not paying them. See, e.g., AA at 712 (Sosaya Dep.); AA at 1367 (Douah Dep.); AA at 678;
    681 (Douah Dep.) (Q: But what I want to know is if you have any evidence to support your
    feeling that he has money somewhere. A: Just, I need my money from him. Q: That’s all? A:
    That’s all.”); AA at 701 (Bosnijak Dep.) (Q: Miss Bosnjak, do you have any knowledge of why
    there wasn’t enough money in the checking account to cover the checks you received? ... A:
    Why? No.”). Although two employees testified that the restaurant was busy, the Court agrees
    with the Bankruptcy Court’s conclusion that a busy restaurant is not necessary equivalent to its
    economic well-being. Jn re Donna, 
    2017 WL 4457407
    , at *4; see, e.g., AA at 1390 (Sosaya
    Deposition); AA at 1367 (Douah Aff.). It was reasonable for the Bankruptcy Court to infer from
    the evidence that Mr. Donna did not have adequate funds to pay his employees.
    What to make of this evidence? The Bankruptcy Court concluded that “the debtor
    provided [the Employees] checks in payment of wages and tips; he just did not have the money
    in the bank to honor those checks,” and that the facts did not demonstrate a “widespread illegal
    payment scheme.” Jn re Donna, 
    2017 WL 4457407
    , at *7-8. However, there is unrefuted
    evidence that Mr. Donna threatened employees when they tried to leave, and there is a dispute
    over whether he tried to confuse employees about the amount of wages Bebo owed them. The
    Bankruptcy Court should have considered these aggravating factors in its decision, as they
    undermine its conclusions that “[a]ll the facts indicated that the debtor wanted to pay [the
    Employees], but could not,” and that “[t]here is no indication that he wanted [the Employees] to
    be harmed.” /d. at *6. Ultimately, these factors may not outweigh the undisputed evidence of Mr.
    20
    Donna’s efforts to ensure his restaurant’s financial success, and the lack of evidence that he
    made personal expenditures with income from the business. But they do raise legitimate, factual
    questions over whether Mr. Donna willfully injured his employees. Viewing the evidence “in the
    light most favorable to the nonmoving party” and “draw[ing] all reasonable inferences” in their
    favor, the Court finds that there is a genuine dispute of material fact over whether Mr. Donna
    willfully injured the Employees. 
    Talavera, 638 F.3d at 308
    .
    ci There is a Genuine Dispute of Material Fact over Whether the Debtor
    Maliciously Injured the Employees.
    The Employees next argue that there is a genuine dispute of material fact as to whether
    Mr. Donna “maliciously” injured them. ““A malicious injury involves (1) a wrongful act, (2)
    done intentionally, (3) which necessarily causes injury, and (4) is done without just cause or
    excuse.”” In re Holland, 
    2013 WL 2190164
    , at *4 (quoting In re 
    Jercich, 238 F.3d at 1209
    ). An
    injury is malicious if it “was wrongful and without just cause or excuse, even in the absence of
    personal hatred, spite or ill-will.” 4 Collier on Bankruptcy § 523.12 (15th ed. 1996). “Malice,
    moreover, is implied when anyone of reasonable intelligence knows that the act in question is
    contrary to commonly accepted duties in the ordinary relationships among people, and injurious
    to another.” In re 
    Nolan, 220 B.R. at 730
    (internal quotation marks omitted).
    The Bankruptcy Court concluded that there was “not a material dispute as to
    maliciousness” because “the debtor did not have sufficient funds to pay [the Employees],” and
    because the Employees offered no “admissible evidence to show that the debtor had the money
    to pay them, and chose to use that money on personal expenses or entertainment.” Jn re Donna,
    
    2017 WL 4457407
    , at *9. The Bankruptcy Court found that the facts showed that the “debtor
    tried to retain the services of his employees to improve everyone’s situation.” Jd.
    21
    Based on the inferences the Court must make in favor of the non-movants on summary
    judgment, this case does not simply involve a debtor who was overly optimistic about the ability
    to pay his debts. There is a genuine dispute of material fact over whether the debtor intentionally
    harmed his employees, demonstrated by the disputed evidence that he tried to confused them
    about their wages, and the undisputed evidence that he threatened his employees when they
    sought to quit. For the same reasons that the Court found a genuine dispute of material fact as to
    willfulness, the Court also finds that there is.a genuine dispute of material fact as to
    maliciousness.
    4, There is a Genuine Dispute of Material Fact as to Whether the “Debtor”
    Caused the Willful and Malicious Injury.
    Section 526(a)(6) requires that the willful or malicious injury be committed “by the
    debtor.” 11 U.S.C. § 526(a)(6). It is “generally acknowledged that this statutory prerequisite
    means that a debtor cannot be held liable for the acts of third parties notwithstanding that
    nonbankruptcy law would impute liability to the debtor.” Jn re Frick, 
    427 B.R. 627
    , 635 (N.D.
    Ohio 2010); see also Palmour v. Budd (In re Budd), Bankr. No. 16-429, Adv. No. 16-10039,
    
    2018 WL 312246
    , at *6 (Bankr. D.D.C. Jan. 3, 2018) (noting that liability “cannot be imputed to
    another person for purposes of nondischargeability of a debt under 11 U.S.C. § 523(a)(6)”). “At
    the same time, there is no requirement in § 523(a)(6) that a debtor actually be the one who
    physically occasions damage to a creditor or to a creditor’s property.” In re 
    Frick, 427 B.R. at 635
    . “[L]iability for a ‘willful’ and ‘malicious’ injury may be imposed under § 523(a)(6) when
    the debtor directs or actively encourages another person to commit a wrongful act.” Jd.
    The Bankruptcy Court found that the Employees failed to show that “the actions of the
    malicious injury deriv[ed] from the actions of the debtor, not his subordinates.” Jn re Donna,
    
    2017 WL 4457407
    , at *9. The Employees challenge this conclusion and argue that Mr. Donna’s
    22
    own conduct injured his employees, pointing to the District Court’s determination that Mr.
    Donna was personally liable for the wage violations. Appellant Br. at 25-26. In response, Mr.
    Donna argues that the Employees “conflate” the District Court findings that Mr. Donna could be
    personally liable for the actions of Bebo and its management under the wage statutes with
    liability under § 523(a)(6). Appellee Br. at 33. He argues that the Employees have provided no
    evidence that Bebo’s failure to pay employees was “due to Mr. Donna encouraging or directing
    another to commit a willful and malicious act.” Jd. at 35.
    The District Court found that Mr. Donna was personally liable for violations of the FLSA
    and DCWPCL because he qualified as an “employer” under both of those statutes. Ventura 
    J, 738 F. Supp. 2d at 5
    . The District Court concluded that he was “‘an executive with significant
    ownership interest in the corporate defendants . . .[and] had the power to hire and fire, control
    work schedules and supervise employees, determine pay rates, and maintain employment
    records.” /d. It also found that he “approved wage payments to plaintiffs, including the issuance
    of post-dated or unsigned checks, the payment of partial wages, and the withholding of any
    payment.” Jd. When employees complained about nonpayment of wages, “he informed them that
    he withheld wage payments . . . in order to pay Bebo Trattoria’s past debts... .” 
    Id. The Employees
    provide no support for their assertion that this Court should be bound by
    the District Court’s conclusions. They do not argue that collateral estoppel should apply to this
    issue.> Because the Court can see no other reason why it would be bound by the District Court’s
    findings, the Court looks instead to the record before the Bankruptcy Court. On the one hand,
    > Before relying on collateral estoppel “to estop a party from relitigating an identical issue
    previously decided,” a party must demonstrate that the issue was “actually litigated,” was “actually and
    necessarily determined by a court of competent jurisdiction,” and that it would “not work an unfairness”
    on the bound party. Mexichem Fluor, Inc. v. Envtl. Prot. Agency, 760 F. App’x 6, 9 (D.C. Cir. 2019)
    (internal quotation marks omitted).
    23
    Mr. Donna has submitted evidence demonstrating that Bebo’s managers, Corrado and Ricardo
    Bonino, handled Bebo’s finances as it related to employees. They have demonstrated that
    managers handled the hiring and payment of employees. See Appellee Br. at 35 (citing AA at
    1119) (Scott Test.) (stating that “Corrado handled the money,” would “hand the cash” to
    employees and that “[h]e and Ricardo .. . oversaw payment of the bills or were supposed to
    when they were getting paid.”)); AA at 1004 (Dorjgotov Dep.) (stating that she interviewed with
    a manager, not Mr. Donna). In his declaration, Mr. Donna also asserted that he “focused on
    Bebo’s cuisine and delegated most financial matters to managers,” and that managers “oversaw
    the accounts and determine[d] what payments to make and when based on the cash available to
    the business, including issuing checks utilizing a stamp for [his] signature.” AA at 719 (Donna
    Decl.).
    On the other hand, the Employees have presented evidence that Mr. Donna was involved
    with financial payments to employees. Jesus Ventura, one of Mr. Donna’s long-serving
    employees, stated that he knew that Mr. Donna gave Bebo’s managers instructions about issuing
    checks, and that Mr. Donna would determine when to issue paychecks.° AA at 1078 (Ventura
    Dep.). Furthermore, Ms. Scott testified that when she and other employees would ask Mr. Donna
    about unpaid wages, “he would communicate to us in person that he would . . . discuss it with
    Corrado and make sure that we got paid.” AA at 1539 (Scott Dep.). Other testimony indicates
    that Mr. Donna was involved in the payment of wages. AA at 1306 (Scott Aff.) (““Mr. Donna
    approved payments of wages to staff but either Corrado Bonino or Ricardo Bonino would
    provide staff with checks.”); AA at 1310 (Vuckovic Aff.) (stating that Mr. Donna would explain
    6 It is unclear from the record whether Mr. Ventura made this statement based on personal
    knowledge. This will be another question for the Bankruptcy Court when considering whether to admit
    this testimony as to this issue.
    24
    to employees that he was unable to pay their salaries because “it was the first of the month and
    he had to pay off past debts or pay the restaurant’s utilities.”); AA at 1296 (Ramos Aff.) (“If I
    was not at the restaurant on a pay day I would not be issued a pay check because Roberto Donna
    and Corrado Boninio would split up the money they had amongst the employees in the restaurant
    that day.”); AA at 1295 (“We were told by Roberto Donna and Corrado Bonino, the accountant,
    the balance [of checks] was zero to account for taxes being paid.”); AA at 1114 (Ramos Test.)
    (“I will go to Corrado and Corrado [would] say I cannot give you checks because Roberto Donna
    is not here... you have to speak to him.”’). The Employees also presented evidence that Mr.
    Donna was involved in decision-making on payments to vendors, which contradicts his assertion
    that he delegated financial matters to managers. AA at 1120-21 (Scott. Test.) (‘Roberto had full
    knowledge of all vendors that were owed money and helped—played a part in deciding—on the
    occasions where I was witness to that, he was the deciding factor on who got paid when.”).
    Finally, Ms. Scott also testified that Mr. Donna himself “threatened to blackball us in the
    industry” if employees stopped working, that he “threatened to ruin our careers,” and that “[h]e
    put it in writing to me.” AA at 1541 (Scott Dep.). She also testified that he “threatened to pull”
    employee Green Cards “or call immigration if they quit on him,” and that the “threats were real.”
    
    Id. at 1542.
    These contrasting narratives demonstrate that there is a genuine ‘timate of material fact
    over whether Mr. Donna managed Bebo’s finances, was personally involved in confusing
    employees about their wages, and threatened employees. As such, the Court concludes that there
    is a genuine dispute of material facts as to whether Mr. Donna himself willfully and maliciously
    injured the Employees.
    25
    B. ‘There is No Genuine Dispute of Material Fact Over Whether Mr. Donna Made False
    Representations to the Employees.
    1. 11 U.S.C. § 523(a)(2)(A)
    Section 523(a)(2)(A) of the Bankruptcy Code “does not discharge an individual debtor
    from any debt for money, property, [or] services .. . to the extent obtained by . . . false pretenses,
    a false representation, or actual fraud, other than a statement respecting the debtor’s or
    an insider’s financial condition.” 11 U.S.C. § 523(a)(2)(A). “The burden of proof is on a plaintiff
    to establish by a preponderance of the evidence the elements of nondischargeability under §
    523(a)(2)(A).” Osoyande v. Momoh (In re Momoh), Bankr. No. 14-00291, Adv. No. 14-10034,
    
    2016 WL 270155
    , *1 (Bankr. D.D.C. Jan. 20, 2016). In order to establish nondischargeability
    under § 523(a)(2)(A), the Employees must establish the following:
    (1) misrepresentation, fraudulent omission or deceptive conduct by the debtor;
    (2) knowledge of the falsity or deceptiveness of his statement or conduct; (3)
    an intent to deceive; (4) justifiable reliance by the creditor on the debtor's
    statement or conduct; and (5) damage to the creditor proximately caused by its
    reliance on the debtor's statement or conduct.
    In re Holland, 
    2013 WL 2190164
    , at *3. (citation omitted). “A promissory representation, or a
    representation as to future events asserted in a common law fraud action, should only be
    considered a misrepresentation of fact where the evidence shows that the promise was made
    without the intent to perform, or that the promisor had knowledge that the events would not
    occur.” In re Momoh, 
    2016 WL 270155
    , at *1 (citations omitted). “The mere breach of a promise
    is never enough in itself to establish fraudulent intent. It may, however, be inferred from the
    circumstances, such as the defendant’s insolvency or other reason to know he cannot pay . . . or
    26
    his failure to even attempt performance, or his continued assurances after it is clear that he will
    not do so.” 7 
    Id. The Bankruptcy
    Court found that the evidence did not show that “the debtor had the
    intent to defraud or knowledge that his representations that he would pay [the Employees] were
    false.” In re Donna, 
    2017 WL 4457407
    , at *3. Rather, it found that Mr. Donna “was undergoing
    economic difficulty due to a perfect storm of bad circumstances,” including loosing “a prime
    location, due to the building housing his restaurant, Galileo, undergoing renovation,” and due to
    his failed attempts to “create financial stability for Bebo,” including taking out a loan to “pay the
    financial needs of Bebo, laying his house down as collateral.” Jd. It found that “[h]e and his wife
    stopped taking a salary from Bebo,” and that he “tried to keep his employees, so the restaurant
    could continue to provide service to the clientele it had.” Jd. The Bankruptcy Court concluded
    that “[t]hese actions are not actions of a man trying to defraud his employees, but are the actions
    | of a man trying to rebuild his business so he and his employees could all benefit economically.”
    
    Id. The Employees
    argue that Mr. Donna’s and his managers’ repeated promises to pay
    employee wages, tip minimum wage, and overtime were “false representations” because “they
    were aware that it was unlikely the [e]mployees would be paid.” Appellant Br. at 27. According
    to the Employees, Mr. Donna did not intend to fulfill his promises because he knew Bebo was
    insolvent, citing an admission he made in litigation in the Eastern District of Virginia that he
    “became aware that the restaurant’s expenses exceeded its income.” AA at 1330, 1341. The
    7 The Employees rely on Jn re Flakker to assert that promises to pay owed wages or debts are
    misrepresentations under the statute. Appellant Br. at 27. However, as Mr. Donna correctly notes, Jn re
    Flakker actually states that the conduct falls within § 523(a)(2)(A) “when a debtor misrepresents his
    intent to repay a debt.” Flakker v. Flakker (In re Flakker), Bankr. No. 14-00340, Adv. No. 14-10037,
    
    2015 WL 4624545
    , at *3 (Bankr. D.D.C. Aug. 3, 2015) (citations omitted).
    27
    Employees also argue that the question of Mr. Donna’s intent should not have been resolved on
    summary judgment, and that instead of holding a hearing to judge his credibility, the Bankruptcy
    Court “took it upon [it]self to determine, despite the existence of a dispute of fact, that Mr.
    Donna’s repeated promises were not deceptive because he did not supposedly know that he could
    not pay his employees.” Appellant Br. at 28.
    The Court agrees with the Bankruptcy Court’s conclusion that “the evidence does not
    show the debtor had the intent to defraud or knowledge that his representations that he would pay
    [the Employees] were false.” In re Donna, 
    2017 WL 4457407
    , at *3. There is no evidence that
    Mr. Donna did not intend to pay employees when he made promises to them. The Employees do
    not identify which of Mr. Donna’s statements were false, when exactly he made them, and how
    the timing of those statements relates to his knowledge about the health of the business. See In re
    Silva, 
    2014 WL 217889
    at *8 (finding that a debtor misrepresented his intent to repay a loan
    where “at the time he promised to repay” the loan, his “personal and business finances were on
    the verge of collapse.””). When employees asked Mr. Donna about their wage payments, he
    indicated that the restaurant was struggling, and that he would make efforts to pay them. See,
    e.g., AA at 1295 (Ramos Aff.).
    The Employees have not provided any evidence related to either Bebo’s or Mr. Donna’s
    finances, and they have not contradicted Mr. Donna’s evidence regarding Bebo’s financial
    failings and the efforts Mr. Donna took to ensure its survival. As Mr. Donna argues, the Court
    cannot consider Mr. Donna’s admission that he knew Bebo’s expenses exceeded its income
    because he made it pursuant to Federal Rule of Civil Procedure 36, which provides that “an
    admission under this rule is not an admission for any other purpose and cannot be used against
    the party in any other proceeding.” Fed. R. Civ. P. 36(b); Appellee Br. at 42, n.19. Even if it
    28
    could, the Court is not persuaded that Mr. Donna’s admission meant that he misrepresented that
    he would pay his employees—there is no evidence indicating when Mr. Donna knew the
    restaurant’s expenses exceeded its income. Moreover, as the Bankruptcy Court discussed, there
    is undisputed evidence that Mr. Donna took steps to ensure Bebo’s success, including securing a
    loan with his home as collateral. AA at 720 (Donna Dec.). There is also undisputed evidence that
    Bebo’s business declined 40% from its peak business by the time it closed. Jd.
    Although the Employees argue that Bebo did not keep track of hours worked or compare
    Bebo’s wage payments with minimum wage requirements, the record does not support this
    assertion. Appellant Br. at 30. Evidence that employee paystubs did not accurately reflect hours
    worked does not equate to evidence that the restaurant did not track hours. Meanwhile, Mr.
    Donna has cited evidence that Bebo did track employee tip wages owed and paid, indicating that
    Mr. Donna intended to pay his employees. Appellee Br. at 39.
    As the Bankruptcy Court acknowledged, ““[b]ecause the question of intent is inherently
    fact-based, it is an issue more appropriately resolved by the finder of fact.’” In re Donna, 
    2017 WL 4457407
    at *3 (quoting Jn re Flakker, 
    2015 WL 4624545
    , at *3). But the “‘summary
    judgment rule would be rendered sterile . . . if the mere incantation of intent or state of mind
    293
    would operate as a talisman to defeat an otherwise valid motion’” for summary judgment. United
    States v. Project on Gov't Oversight, 
    839 F. Supp. 2d 330
    , 346-47 (D.D.C. 2012) (quoting Meiri
    v. Dacon, 
    759 F.2d 989
    , 998 (2nd Cir. 1985)). The Employees had the opportunity to depose Mr.
    Donna in this litigation and to test the veracity of his assertions about both his and Bebo’s
    finances, but did not appear to do so. They also did not present any other evidence related to
    either his or Bebo’s finances, which could have provided circumstantial evidence of his intent.
    See, e.g., Inre Silva, 
    2014 WL 217889
    at *8 (considering a debtor’s negative bank account
    29
    balances, checks returned for insufficient funds and his low income reflected in his tax returns
    when concluding that he misrepresented his intent). As a result, they failed to “‘shake’ the
    defendant’s version of the facts or to raise significant issues of credibility... .” Corrugated
    Paper Prods., Inc. v. Longview Fibre Co., 
    868 F.2d 908
    , 914 (7th Cir. 1989). Without evidence
    666 999
    of Bebo’s finances, they did not “‘put credibility in issue so as to preclude summary judgment.
    Desia v. GE Life & Annuity, No. 05-1395, 
    2008 WL 4724080
    , *7 (D. Conn. Oct. 24, 2008)
    (quoting 10A Wright & Miller, Fed. Practice and Procedure § 2726 (4th ed. 1998)).
    The Employees also argue that Mr. Donna’s promises to pay hourly employees tip
    minimum wage and overtime were misrepresentations because he recklessly disregarded his
    obligations to pay his employees under the law. Appellant Br. at 29-30. There is evidence that
    Bebo never paid some employees overtime wages. AA at 1287 (Ventura Aff.); AA at 1305
    (Scott Aff.); AA at 1310 (Vuckovic Aff); AA at 1295 (Ramos Aff.). However, to prove a
    misrepresentation, the Employees must demonstrate that Mr. Donna made a promise without
    intending to perform it, or with knowledge that the events would not occur—not that the he
    recklessly disregarded wage obligations. See In re Chang Sup Han, 13-cv-1524, 
    2013 WL 3404321
    , at *3 (C.D. Cal. July 8, 2013) (describing § 523(a)(2)(A) as requiring that a plaintiff
    establish “by a preponderance of the evidence that a false representation has been made without
    belief in its truth or recklessly, careless of whether it is true or false.”) (internal quotation marks
    omitted). The Employees have not demonstrated that Mr. Donna did not intend to pay his
    employees overtime.
    The Employees have not shown a genuine dispute of material fact as to whether Mr.
    Donna made false representations. The Bankruptcy Court appropriately granted summary
    judgment on this claim.
    30
    C. The Bankruptcy Court Did Not Abuse Its Discretion When It Awarded Attorney’s
    Fees to Mr. Donna.
    During discovery in the bankruptcy proceedings, Mr. Donna served interrogatory and
    document requests seeking information related to the Employees’ employment with Mr. Donna’s
    restaurants such as employment agreements, job duties, title, wages and hours worked. AA at
    126-393. The Employees moved for a protective order on the grounds that the discovery requests
    were beyond the scope of the case and sought information Mr. Donna could have obtained in the
    District Court litigation. AA at 118-127. They responded to the document requests but refused to
    respond to any interrogatories until the Bankruptcy Court ruled on their motion for a protective
    order. AA at 417.
    The Bankruptcy Court denied the motion for a protective order on the grounds that the
    interrogatory requests focused on issues at the “heart” of the adversary proceeding, that the
    District Court had not adjudicated the issues, and that collateral estoppel did not apply. AA at
    422. After the Bankruptcy Court denied the motion, Mr. Donna moved for attorney’s fees under
    Federal Rule of Civil Procedure 26(c)(3). AA at 431-448. The Bankruptcy Court granted in part
    Mr. Donna’s motion on the grounds that the Employees’ motion for a protective order as to the
    interrogatories was not substantially justified, and awarded Mr. Donna 62.5% of the fees he
    sought. AA at 1552-1556. The Bankruptcy Court found that the Employees “improperly refused
    to provide responses to [Mr. Donna’s] discovery requests that were not in dispute.” AA at 1552.
    It further found that there was “no need” for the Employees to file a motion for a protective order
    because they could have raised their contentions “that discovery as to generic employment
    information (a miniscule part of the discovery requests) sought information already produced” in
    the District Court litigation “in their responses to the discovery requests.” AA at 1553.
    31
    Federal Rule of Civil Procedure 26(c)(3) “incorporates [Federal Rule of Civil Procedure]
    37(a)(5) and states that if the court denies a motion for a protective order, the court ‘must, after
    giving an opportunity to be heard, require the movant . . . to pay’ the opposing party’s expenses
    and attorney’s fees.” Jones v. Dufek, 
    830 F.3d 523
    , 528 (D.C. Cir. 2016) (quoting Fed. R. Civ. P.
    37(a)(5)(B).* However, ““ the court must not order this payment if the motion was substantially
    justified ...”” 
    Id. A party
    meets the “substantially justified” standard if there “is a ‘genuine
    dispute’ or if ‘reasonable people could differ’ as to the appropriateness of the motion.”
    Alexander v. FBI, 
    186 F.R.D. 144
    , 147 (D.D.C. 1999) (quoting Pierce v. Underwood, 
    487 U.S. 552
    , 565 (1988)).
    The Employees argue that the Bankruptcy Court “missed the point” of the Employees’
    motion, which was to “limit the scope of discovery to the specific issues that were subject to the
    adversary proceeding.” Appellant Br. at 39. They argue that just because the Bankruptcy Court
    took a different view on the scope of discovery does not mean that the Employees were not
    substantially justified in filing their motion. Appellant Br. at 39.
    Although a majority of Mr. Donna’s interrogatories related to the Employees’ allegations
    of willfulness and misrepresentations, the Employees filed a motion for a protective order over a
    small amount of generic employment information and refused to respond to the rest of the
    relevant interrogatories. The Bankruptcy Court found that the motion was not substantially
    justified because the Employees could have raised their objections to the discovery in their
    responses to the interrogatory requests instead of refusing to respond to them and filing the
    motion. AA at 1553. Although the “substantially justified” standard allows room for reasonable
    differences of opinion, the Bankruptcy Court’s decision was not “clearly unreasonable, arbitrary,
    ® Federal Rule of Civil Procedure 26 applies in adversary proceedings. Fed. R. Bankr. P. 7026.
    32
    or fanciful.” 
    Bonds, 93 F.3d at 807
    (internal quotation marks omitted). This is especially true in
    light of Rule 26(c)(3)’s goal to “prevent needless litigation and wasteful discovery disputes.”
    
    Jones, 830 F.3d at 529
    .
    Furthermore, the Bankruptcy Court did not base its decision on incorrect facts, as the
    Employees claim. Reply at 21 [ECF No. 8]. It found that the Employees refused to respond to the
    discovery requests that “were not in dispute.” AA at 1552. The Employees did not respond to
    any interrogatory requests, even those expressly focused on willfulness and misrepresentations.
    The Bankruptcy Court did not abuse its discretion when it awarded partial attorney’s fees to Mr.
    Donna for his response to the Employees’ motion for a protective order.
    V. CONCLUSION
    For the foregoing reasons, the Bankruptcy Court’s ruling as to whether Mr. Donna
    willfully and maliciously injured his employees under 11 U.S.C. § 523(a)(6) will be REVERSED
    AND REMANDED for further proceedings before the Bankruptcy: Court. The Bankruptcy
    Court’s ruling that Mr. Donna’s promises to pay his employees did not constitute
    misrepresentations under 11 U.S.C. § 523(a)(2)(A), and its award of attorney’s fees to Mr.
    Donna, will be AFFIRMED. An order accompanies this memorandum opinion.
    October ZA & w/ We J. Mra au
    Thomas F. Hoga
    SENIOR UNITED STATES DISTRICT JUDGE
    33