Bankruptcy Case No. 09-B-17612
The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:
MEMORANDUM OPINION AND ORDER
Pursuant to 28 U.S.C. § 158(a), Debtor/Defendant/Appellant Gerard McGrath appeals from the judgment that the Bankruptcy Court entered in the underlying Adversary Proceeding on July 7, 2010 in favor of Plaintiff/Appellee Regan Ebert finding a debt in the amount of $3,235.00 non-dischargeable under 11 U.S.C. § 523(a)(6). McGrath also appeals the Bankruptcy Court's August 31, 2010 denial of his motion to alter or amend the judgment and for a new trial. (See 10 A 00057, R. 83, Notice of Appeal.) The Court has jurisdiction to hear McGrath's appeal pursuant to 28 U.S.C. § 158. For the following reasons, the Court affirms the Bankruptcy Court's July 7, 2010 judgment and August 31, 2010 denial of McGrath's post-trial motion.
On May 15, 2009, McGrath filed a voluntary Chapter 7 Bankruptcy Petition in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division, Case No. 09 B 17612. (09 B 17612, R. 1.) On January 11, 2010, Plaintiff Regan D. Ebert filed an Adversary Proceeding against McGrath pursuant to 11 U.S.C. § 523(a)(6). (10 A 00057, R. 1.) In addition, Daniel Ebert-Balzano brought an Adversary Proceeding against McGrath pursuant to 11 U.S.C. § 523(a)(6). (10 A 00058, R. 1.) The Bankruptcy Court tried both Adversary Proceedings on July 7, 2010. (10 A 00057, R. 56; 10 A 00058, R. 59.) The present appeal only concerns Ebert's Adversary Proceeding.
At the conclusion of the trial, the Bankruptcy Court entered judgment in favor of Ebert and against McGrath in Adversarial Proceeding 10 A 00057 finding a debt in the amount of $3,235.00 non-dischargeable pursuant to 11 U.S.C. § 523(a)(6). (10 A 00057, R. 56, 57.) Thereafter, McGrath filed a timely post-trial motion. (10 A 00057, R. 58, 59.) On August 31, 2010, after conducting an evidentiary hearing, the Bankruptcy Court denied the post-trial motion and on September 8, 2010, McGrath filed a notice of appeal to the United States District Court for the Northern District of Illinois. (10 A 00057, R. 82, 83.)
In the Adversary Complaint, Ebert alleged that starting on or about February 1, 2005, McGrath, in conjunction with his lawyer Lawrence Seiwert, conspired to create and construct fraudulent pleadings against Ebert in her divorce proceedings -- in which Seiwert represented Ebert's husband -- in order to gain a legal and economical advantage in the divorce litigation.
(10 A 00057, R. 1, Compl. ¶ 5.) Ebert further alleged that the affidavit prepared by Seiwert and signed by McGrath in the divorce litigation contained falsehoods wherein McGrath claimed that he owned thoroughbred racehorses in partnership with Ebert and that Ebert concealed this fact from her husband. (Id. ¶ 6.) Ebert also alleged that Seiwert set forth these falsehoods so that he could have a legal basis to petition the divorce court to reopen proofs on various issues that Seiwert failed to previously present as a result of his alleged negligence. (Id. ¶ 7.) Further, Ebert alleged that in return for his assistance in the divorce proceedings, Seiwert agreed to help assist McGrath in a lawsuit, free of charge, against Ebert and her father Carl Ebert. (Id. ¶ 9.)
At the July 7, 2010 Adversarial Proceeding trial, Ebert testified that her father, Carl Ebert, had been involved in horse racing since 1961. (R. 9-5, Excerpt (E), Tr. at 2-3.) In particular, Ebert testified that her father bought 25% of a horse named Duncan Idaho from McGrath and another individual in June 2001. (Id. at 9.) Carl Ebert also had other dealings with McGrath in connection with another race horse named Havana Perfecto. (Id. at 5.) Ebert testified that she did not have any ownership interest in either race horse nor had her father secretly purchased either horse for her. (Id. at 39-40.) Furthermore, Ebert testified that her name did not appear on either Havana Perfecto's or Duncan Idaho's foal papers, which reflect the official ownership of a race horse. (Id. at 6-7, 9, 10, 38.) Evidence in the record contains the partnership and registration forms for both horses. These documents do not reflect Ebert's ownership of either Duncan Idaho or Havana Perfecto. (Pl.'s Exs. 6-8, 12-16, 25-35.)
Moreover, Ebert testified that after her father had a heart attack, she and her son, Daniel Ebert-Balzano, became actively involved in monitoring Havana Perfecto and Duncan Idaho at which time they discovered irregularities in Duncan Idaho's official foal papers. (R. 9-5, Excerpt (E), Tr. at 11-12, 34-36, 63-64.) In particular, Ebert testified that it appeared that McGrath forged Carl Ebert's name on the foal papers transferring the horse's ownership to McGrath without permission. (Id. at 12; see also Pl.'s Ex. 6.) Ebert also testified that she confronted McGrath about forging her father's name on the official foal papers, after which McGrath admitted that he had done so in order to transfer all interests in Duncan Idaho to himself and eventually ship the horse to Ohio to sell. (R. 9-5, Excerpt (E), Tr. at 16-18, 68-69.) Shortly thereafter, Ebert notified her father and Duncan Idaho's trainer about what had occurred to prevent McGrath from transferring Duncan Idaho to Ohio. (Id. at 22, 70.)
One of Carl Ebert's secretaries, Barbara Roumeliotis, testified at trial that on November 29, 2004, that McGrath had called Carl Ebert's office and told her to tell Carl Ebert that if McGrath could not ship Duncan Idaho to Ohio, he would make big trouble for Ebert in her divorce proceedings. (R. 9-3, Excerpt (B), Tr. at 2-4) Roumeliotis further testified that McGrath then told her to have Carl Ebert call McGrath's lawyer, Lawrence Seiwert. (Id.)
Ebert testified that thereafter, her son contacted McGrath to buyout McGrath's interest in Duncan Idaho. (R. 9-5, Excerpt (E), Tr. at 27-28; Pl.'s Ex. 13.) Meanwhile, Ebert further explained that the only reason her name appeared on the cashier's check for the purchase of Duncan Idaho was that her son did not have his own bank account. (Id. at 31-32) Ebert also testified that her son had saved the money to purchase McGrath's interest in Duncan Idaho. (Id. at 32.) Roumeliotis also testified that Daniel Ebert-Balzano wanted to purchase Duncan Idaho, but needed a cashier's check to complete the ...