In re: Michael G. Queen, also known as Mike Queen, also known as Bi-State Acoustics, LLC; Denise D. Queen Debtors
Denise D. Queen; Michael G. Queen Defendants - Appellees Gary Francis Abel; Metro Acoustics, LLC Plaintiffs - Appellants
Submitted: June 18, 2019
from United States Bankruptcy Court for the Eastern District
of Missouri - St. Louis
SALADINO, Chief Judge, NAIL and SANBERG, Bankruptcy Judges.
Francis Abel and Metro Acoustics, LLC appeal the August 22,
2018 order of the bankruptcy court directing the entry of
summary judgment in favor of Michael G. Queen and Denise D.
Queen on Abel and Metro's complaint to determine the
dischargeability of their claims against the Queens. We have
jurisdiction over this appeal pursuant to 28 U.S.C. §
158(b). We affirm.
and Denise Queen formed Metro, which installed and replaced
acoustic ceiling tiles and wall panels. Michael Queen was an
employee of the company.
business ultimately failed, and Abel and Metro filed suit
against the Queens in Missouri state court, alleging
fraudulent misrepresentation, breach of contract, breach of
fiduciary duty, and conversion. The Queens answered, and the
case bumped along for several years.
the Queens failed to comply with their discovery requests,
Abel and Metro filed several motions for sanctions. The third
such motion led to the entry of a self-described judgment in
which the state court granted Abel and Metro's motion,
struck the Queens' pleadings, entered a default judgment
for Abel and Metro on all counts of their complaint, and
scheduled a hearing to determine damages.
that hearing could be held, however, the Queens filed a
petition for relief under chapter 7 of the bankruptcy code,
staying further proceedings in state court. Abel and Metro
timely filed an adversary complaint to determine the
dischargeability of their claims against the Queens under 11
U.S.C. § 523(a)(2), (4), and (6).
course of the adversary proceeding, Abel and Metro filed a
motion for partial summary judgment on the issue of
liability, arguing the state court default judgment precluded
the Queens from re-litigating the issue of liability or the
issue of the dischargeability of Abel and Metro's claims
against them. The Queens objected. Following a hearing,
bankruptcy court stamped a copy of Abel and Metro's
motion "DENIED" and "WITHDRAWN" and
entered it as an order.
was scheduled, but shortly before the appointed date, the
parties communicated to the bankruptcy court their belief
that the dischargeability of Abel and Metro's claims
against the Queens could be determined by summary judgment,
with the issue of damages reserved for later determination,
if necessary. The bankruptcy court concurred and entered an
order to that effect.
parties agreed the lone issue to be decided by the bankruptcy
court was whether Abel and Metro's claims against the
Queens were dischargeable under §
523(a)(4). The matter was submitted on stipulated
exhibits, stipulated facts, and the parties' respective
briefs, and the bankruptcy court entered an order for summary
judgment in favor of the Queens. In a section headed
"PRELIMINARY MATTERS," the bankruptcy court stated:
The state court entered a prepetition default judgment
against Defendants on claims based on facts similar to those
asserted here. However, that judgment was only a default
judgment and, to any degree, did not become final. The state
court default judgment does not establish any fact for
purposes of determining whether ...