Willkie Farr & Gallagher v. Summers

UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION AT COLUMBUS
In re: 	:
: 	Case No. 04-50492
Daniel S. Summers and, 	: 	Chapter 7
Jeannette E. Summers 	: 	Judge Hoffman
:
Debtors. 	:
:
:
Willkie Farr & Gallagher, 	:
:
Plaintiff, 	:
:
v. 	: 	Adv. Pro. No. 04-2244
:
Daniel S. Summers, 	:
:
Defendant. 	:
OPINION AND ORDER GRANTING WILLKIE
FARR & GALLAGHER LLP’S
MOTION FOR SUMMARY JUDGMENT
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: June 11, 2005
____________________________________________________________
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1These allegations are set forth in an affidavit by Steven Seidman, a member of WF&G,
which is attached to the Motion. See Motion, Ex.1 (“Seidman Affidavit”).
2WF&G submitted two emails and a letter that Summers provided to WF&G. 	These
documents describe specific investments owned or held by Summers and his wife, Jeannette E.
Summers (a joint debtor in the underlying Chapter 7 case). These documents show that Summers
had a total net worth of $138,774,218, comprised of trust assets, real estate and other assets. See
Seidman Affidavit, Exs. A-D.
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I. Background
This adversary proceeding is before the Court on the Motion for Summary Judgment
(“Motion”) (Doc. 26) filed by Plaintiff Willkie Farr & Gallagher (“WF&G”) on April 29, 2005.
In accordance with LBR 9013-1(a), WF&G served the notice fixing a 20-day response date for the
Motion on May 16, 2005. WF&G seeks an order granting summary judgment on the first count of
its complaint, a claim under 11 U.S.C. 523(a)(2)(B) that seeks to except a debt owed by Defendant
Daniel S. Summers (“Summers”) to WF&G from discharge. 	Summers has not responded to
WF&G’s Motion.
WF&G, a New York-based law firm, alleges that Summers retained WF&G in March 2003
to represent his interests in connection with a proposed transaction with Elder-Beerman Stores
Corporation. 1 As part of the engagement, WF&G required that Summers provide some assurance
of his financial condition and ability to pay for the legal services provided. 	WF&G submits
documentation that it claims Summers provided the firm. The documents state that Summers had
a net worth of over $138 million at the time he retained WF&G as his legal counsel.2 WF&G
contends that it relied on these written statements of Summers’s overall financial condition, net
worth and ability to pay in agreeing to provide legal services to him.
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3The Court granted the motion to withdraw filed by Gary Paul Price, former case attorney
for Summers, on April 12, 2005 (Doc. 24).
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WF&G asserts that he has refused to tender payment for the legal services it performed. As
of the date Summers and his wife filed a joint voluntary petition for Chapter 7 bankruptcy relief on
January 14, 2004, WF&G contends that he owed the firm not less than $353,411.90. WF&G also
claims that Summers admitted at his § 341 meeting of creditors that at least a portion of the written
statements delivered to WF&G were false.
WF&G filed its complaint against Summers on June 14, 2004. During the discovery phase
of this adversary proceeding, WF&G served discovery requests, including a request for admissions,
on both Summers’s counsel (via hand delivery) and Summers (via U.S. Mail at his last known
address) on February 16, 2005. 3 Motion, Exs. 2-3. WF&G requested responses within a 30-day
period, yet Summers did not respond within the designated period and, in fact, never responded to
any of the discovery requests, including the request for admissions. The request for admissions
asked Summers to admit, among other things, the following:
1. 	Admit that you delivered a written statement to WF&G
containing representations related to your financial condition.
2. 	Admit 	that 	the 	written 	statement 	delivered 	to WF&G
contained materially false representations related to your
financial condition.
3. 	Admit that WF&G reasonably relied upon the written
statements related to your financial condition in providing
additional legal services to you.
4. 	Admit that you provided the written statements related to
your financial condition with the intent to deceive WF&G.
Motion, Ex.5, at 12-13.
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II. Legal Analysis
A. 	Summary Judgment
Summary 	judgment 	is 	appropriate 	where 	“the 	pleadings, 	depositions, 	answers 	to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law.” Fed. R. Civ. P. 56(c) (made applicable to this adversary proceeding by Fed. R. Bankr. P.
7056). In order to prevail, the movant bears the initial burden of demonstrating the absence of a
genuine issue of material fact. 	Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). 	The
nonmoving party must then “come forward with ‘specific facts showing that there is a genuine issue
for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting
Fed. R. Civ. P. 56(a)) (emphasis deleted). 	The mere allegation of the existence of a factual dispute
is insufficient to defeat a summary judgment motion. There must exist in the record a genuine issue
of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-50 (1986). A material fact is
one that has the “potential to affect the outcome of the suit under applicable law.” FDIC v. Anchor
Props., 13 F.3d 27, 30 (1st Cir. 1994) (citation omitted). “[A]s to materiality, the substantive law
will identify which facts are material. Only disputes over facts that might affect the outcome of the
suit under governing law will properly preclude the entry of summary judgment. Factual disputes
that are irrelevant or unnecessary will not be counted.” Niecko v. Emro Mktg. Co., 973 F.2d 1296,
1304 (6th Cir.1992) (quoting Anderson, 477 U.S. at 248).
B. 	Request for Admissions
Rule 36 of the Federal Rules of Civil Procedure, made applicable to this adversary
proceeding by Fed. R. Bankr. P. 7036, provides in pertinent part:
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(a) Request for Admission. A party may serve upon any other party a written
request for the admission, for purposes of the pending action only, of the truth of any
matters within the scope of Rule 26(b)(1) set forth in the request that relate to
statements or opinions of fact or of the application of law to fact, including the
genuineness of any documents described in the request. . . .
Each matter of which an admission is requested shall be separately set forth. The
matter is admitted unless, within 30 days after service of the request, or within such
shorter or longer time as the court may allow or as the parties may agree to in
writing, subject to Rule 29, the party to whom the request is directed serves upon the
party requesting the admission a written answer or objection addressed to the matter,
signed by the party or by the party's attorney. . . .
(b) Effect of Admission. Any matter admitted under this rule is conclusively
established unless the court on motion permits withdrawal or amendment of the
admission.
Fed. R. Civ. P. 36(a)–(b). 	It is settled law under the Federal Rules of Civil Procedure that an
unanswered request for admission under Rule 36 is deemed admitted. See Barna v. Haas (In re
Haas), 292 B.R. 167, 172 n.3 (Bankr. S.D. Ohio 2003) (citing Fed. R. Civ. P. 36). Rule 56(c) states
that “admissions on file” can serve as an appropriate basis for the entry of summary judgment. Fed.
R. Civ. P. 56(c). “It is also settled that admissions made under Rule 36, even default admissions[,]
can serve as the factual predicate for summary judgment. Rule 36(b) provides that a matter admitted
is conclusively established.” Friedly v. Niswonger, (In re Niswonger), 116 B.R. 562, 565 (Bankr.
S.D. Ohio 1990) (citations and quotation omitted). “The scope of Rule 36(a) is quite broad and
permissible requests include even ‘ultimate facts’ or facts dispositive of a case.” Id. at 566 (citing
Campbell v. Spectrum Automation Co., 601 F.2d 246, 253 (6th Cir.1979)). See also 	McGraw v.
Jordan (In re Jordan), 47 B.R. 712, 714 (Bankr. N.D. Ohio 1985) (“[W]hen requests for admissions
are not answered within the prescribed time, the facts stated in the requests are deemed to be true
and may be used as the basis for summary judgment.”).
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In this adversary proceeding, Summers’s failure to answer or respond to the request for
admissions results in the facts stated in the request being conclusively established. Based on these
admissions and the uncontested evidence of record, the relevant facts concerning WF&G’s claim
under 11 U.S.C. § 523(a)(2)(B) are undisputed. As there no longer remains a genuine issue as to
any material fact, a decision on summary judgment is appropriate.
C. 	Section 523(a)(2)(B)’s Dischargeability Exception
“Section 523(a)(2)(B) provides that a debt is excepted from discharge to the extent it is
obtained by use of a written statement ‘(I) that is materially false; (ii) respecting the debtor’s or an
insider's financial condition; (iii) on which the creditor to whom the debtor is liable for such money,
property, services, or credit reasonably relied; and (iv) that the debtor caused to be made or
published with the intent to deceive.’” Gen. Elec. Capital Corp. v. Acosta (In re Acosta), 406 F.3d
367, 374 (5th Cir. 2005) (quoting 11 U.S.C. § 523(a)(2)(B)). See also AG Credit v. Walton (In re
Walton), 165 B.R. 610, 614 (Bankr. N.D. Ohio 1994).
The admissions, the uncontroverted Seidman Affidavit and the documents submitted by
WF&G establish the necessary elements of WF&G’s § 523(a)(2)(B) claim. It is undisputed that
WF&G provided legal services to Summers on credit in reasonable reliance on Summers’s written
statements concerning his financial condition. It is also uncontested that these written statements
contained materially false representations and were made by Summers with the intent to deceive.
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III. Conclusion
For these reasons, the Court GRANTS the Motion and finds that the debt owed to WF&G
by Summers is excepted from discharge under 11 U.S.C. § 523(a)(2)(B). A separate judgment will
be entered.
IT IS SO ORDERED.
Copies to:
Daniel S. Summers, Defendant, 1044 Township Road 286, New Richmond, OH 43944
Daniel S. Summers, Defendant, 415 North Ocean Grande Drive, Unit 301,
Ponte Verde Beach, FL 32082
Justin Ristau, Attorney for Plaintiff, 100 South Third Street, Columbus, OH 43215
Gary Paul Price, Attorney for Defendant, 555 City Park Avenue, Columbus, OH 43215
D. William Davis, Chapter 7 Trustee, 407-A Howard Street, Bridgeport, OH 43912
Office of the U.S. Trustee, 170 N. High Street, Suite 200, Columbus, OH 43215
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