Hunter v. Lake Cumberland Regional Hospital, LLC. et al - Document 43
MEMORANDUM OPINION & ORDER: 1) As to whether the Plffs claim arose b/f the filing of his bankruptcy petition and was subject to discharge for that reason Deft's Motion for Summary Judgment [R.14] is GRANTED; 2)As to the willful & malicio us nature of his conduct & availability of insurance, Dft's Motion for Summary Judgment [R.14]is DENIED WITHOUT PREJUDICE. Motions terminated: 14 MOTION for Summary Judgment by John Husted filed by John Husted. Signed by Gregory F. VanTatenhove on 9/28/2012.(RC)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
LAKE CUMBERLAND REGIONAL
HOSPITAL, LLC, et al.
Civil No. 11-316-GFVT
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Leslie Hunter claims that when she consulted Dr. John Husted concerning complications
she had been experiencing from an earlier weight loss operation, he performed the incorrect
procedure, which gave rise to further health complications requiring two additional surgeries. [R.
17 at 1-2]. In addition to claims against several other defendants, Hunter has sued Dr. Husted for
medical malpractice and negligent misrepresentation seeking compensatory and punitive
damages [R. 1-5]. Dr. Husted counters with the Motion that is currently before this Court, in
which he argues that pursuant to Fed. R. Civ. P. 56, summary judgment is appropriate because
this claim is barred under the Discharge Injunction of the Bankruptcy Code, 11 U.S.C. § 524.
[R. 14]. For the reasons that follow, Defendant’s Motion for Summary Judgment is granted in
part and denied in part.
Leslie Hunter claims that in the mid-1990s she received a vertical banded gastroplasty
(“VBG”) procedure, commonly called “stomach stapling” to lose weight. [R. 17 at 1-2]. Over
time she began to develop health problems that she believed to be related to the surgery and
consulted Dr. Husted concerning those complications. [Id.]. On August 14, 2009, Dr. Husted
performed a duodenal switch (“DS”) on Hunter, which she claims was the improper procedure.
[Id.]. Hunter alleges that on or about October 2011 she discovered that Dr. Husted’s operation
not only did not address her problems, but his negligence gave rise to new complications
including chronic nausea, vomiting, and diarrhea, which she claims caused such severe
malnutrition and vitamin and mineral deficiencies that she required two additional corrective
On October 28, 2011 Hunter filed a complaint against Dr. Husted and several other
defendants for malpractice and negligent misrepresentation. [R.1-5]. However, in the
intervening time between the August 14, 2009 surgery and the filing of the complaint, Dr.
Husted filed for bankruptcy on February 10, 2011. [R. 14-1 at 1]. Though he did not originally
name Hunter in his petition, he amended his bankruptcy Schedule F on November 21, 2011 to
include her claim. [R. 21 at 1]. On February 3, 2012, Dr. Husted filed this motion for summary
judgment on the basis that Hunter’s claim was a pre-petition debt that had been discharged in
bankruptcy under 11 U.S.C. § 727 on May 24, 2011. [R. 14-3].
The parties met on February 23, 2012 for their Rule 26(f) conference, and the following
day Hunter submitted her response to Dr. Husted’s motion. [R. 17 at 3]. In this response,
Hunter argued that summary judgment was inappropriate on four grounds: (1) the motion is
premature without adequate discovery; (2) the action had not been discharged in bankruptcy
because the defendant failed to list Hunter on his petition and her claim arose after discharge; (3)
the claim was excepted from discharge because Dr. Husted’s actions were willful and malicious;
and (4) even if the claim had been discharged, Hunter could still recover under Dr. Husted’s
insurance. [R. 17]. Dr. Husted’s reply argues that as a matter of law Hunter’s claim has been
discharged without exception, and as a factual matter he does not have any insurance for Hunter
to pursue, thus summary judgment is appropriate. [R. 21].
Dr. Husted seeks summary judgment under FRCP 56. Pursuant to Federal Rule of Civil
Procedure 56(c), summary judgment should be granted “if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(c). “A genuine dispute exists on a material fact, and thus summary judgment is improper, if
the evidence shows ‘that a reasonable jury could return a verdict for the nonmoving party.’”
Olinger v. Corporation of the President of the Church, 521 F. Supp. 2d 577, 582 (E.D.Ky. 2007)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). Stated otherwise, “[t]he
mere existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient;
there must be evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477
U.S. at 252.
The moving party has the initial burden of demonstrating the basis for its motion and
identifying those parts of the record that establish the absence of a genuine issue of material fact.
Chao v. Hall Holding, 285 F.3d 415, 424 (6th. Cir. 2002). Moreover, the movant may satisfy its
burden by showing “that there is an absence of evidence to support the non-moving party’s
case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the movant has satisfied this
burden, the non-moving party must go beyond the pleadings and come forward with specific
facts to demonstrate there is a genuine issue. Holding Hall, 285 F.3d at 424 (citing Celotex, 477
U.S. at 324). Moreover, “the nonmoving party must do more than show there is some
metaphysical doubt as to the material fact. It must present significant probative evidence in
support of its opposition to the motion for summary judgment.” Holding Hall, 285 F.3d at 424
(internal citations omitted).
Finally, the trial court is under no duty to “search the entire record to establish that it is
bereft of a genuine issue of material fact” and “the nonmoving party has an affirmative duty to
direct the court’s attention to those specific portions of the record upon which it seeks to rely to
create a genuine issue of material fact.” In re Morris, 260 F.3d 654, 655 (6th Cir. 2001). In
reviewing a motion for summary judgment, the court “must construe the evidence and draw all
reasonable inferences in favor of the nonmoving party.” Browning v. Dept. of Army, 436 F.3d
692, 695 (6th Cir. 2006) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 495 U.S. 574,
The preliminary issue that must be decided is whether Dr. Husted’s summary judgment
motion is premature as Hunter suggests. It is well settled that, “summary judgment is improper
if the non-movant is not afforded with sufficient opportunity for discovery.” Vance v. United
States, 90 F.3d 1145, 1148 (6th Cir. 1996) (citing White’s Landing Fisheries, Inc. v. Buchholzer,
29 F.3d 339, 231-32 (6th Cir. 1994)). However, the burden is on the non-movant to inform the
trial court of its need for more discovery. Abercombie and Fitch Stores, Inc. v. American Eagle
Outfitters, Inc., 280 F.3d 619, 627 (6th Cir. 2002). The movant typically does this by affidavit
pursuant to Rule 56(f) or a motion for additional discovery that details the discovery needed, but
notice of the need for additional discovery can also be satisfied in an opposition motion. Id. In
determining whether the party making a 56(f) motion has had adequate opportunity for
discovery, the court considers several factors, including: (1) when the non-movant learned of the
issue that is the subject of the desired discovery; (2) whether the desired discovery would change
the ruling; (3) how long the discovery period has lasted; (4) whether the non-movant was
dilatory in its discovery efforts; (5) whether the movant was responsive to discovery requests.
Eastern Kentucky Cardiothoracic Surgery, P.S.C. v. Ashland Hospital Corp., 119 Fed.Appx.
715, 717 (6th Cir. 2004) (citing Plott v. General Motors Corp., Packard Elec. Div., 71 F.3d 1190,
1196-97 (6th Cir. 1995)).
Hunter’s reply to Dr. Husted’s motion for summary judgment is the functional equivalent
of a Rule 56(f) affidavit. In her first argument Hunter states that the motion is premature and
that she needs more time for discovery, especially on the issues of discharge, intent to commit
the injury, and availability of insurance. [R. 17 at 8]. In support of this assertion, Hunter notes
that Dr. Husted moved for summary judgment on February 3, 2012, before the parties had met
for their Rule 26(f) Conference. [R. 17 at 3]. She seems to state that this fact alone is dispositive
in demonstrating that she has not had an adequate opportunity for discovery on the
While the length of discovery certainly weighs heavily in favor of Hunter, it is only one
factor in determining whether there has been an adequate opportunity for discovery under Rule
56(f). It is possible that a motion for summary judgment filed simultaneously with an answer
could be granted at least in part. See Abercombie and Fitch Stores, Inc., 280 F.3d at 627. As to
the other factors, there has been no argument, nor could there be, that Hunter was dilatory in her
discovery efforts, or that Dr. Husted was not responsive to her discovery requests. In contrast,
Dr. Husted raised the disputed issues early in the proceedings and attempted to provide
documentation regarding each issue before any discovery requests had even been made. [See R.
14 and 21]. Thus, the final factor to consider in determining whether the motion is premature is
bound up in the substantive effect that added discovery would have on the ultimate disposition of
the case. On this question, each disputed issue shall be analyzed in turn.
First, the parties dispute whether Hunter’s malpractice claim has been discharged in
bankruptcy. Under 11 U.S.C. § 727(b), a bankruptcy debtor obtains a general discharge from
“all debts that arose before the date of the order for relief…” See also, In re Castle, 289 B.R.
882, 995 (Bankr.E.D.Tn. 2003). A claim arises when, “an individual is exposed pre-petition to a
product or other conduct giving rise to an injury, which underlies a ‘right to payment’ under the
Bankruptcy Code.” Republic Bank & Trust Co. v. Hutchinson, 44 B.R. 726, 732 (Bankr.W.D.Ky.
2011) (citing In re Grossman’s Inc., 607 F.3d 114, 125 (3rd Cir. 2010)), see also In re Ybarra,
424 F.3d 1018, 1022-23 (9th Cir. 2007) (stating, “A claim arises for the purposes of discharge in
bankruptcy, at the time of the events giving rise to the claim.”) (citations omitted).
In a recent case in the Western District of Kentucky, a plaintiff was exposed to “prepetition conduct,” in the form of a misfiled security document, however did not suffer any injury
from that conduct until after the defendant filed for bankruptcy. Republic Bank & Trust Co., 44
B.R. at 732. That plaintiff argued that because he did not suffer injury until after the petition was
filed, his claim was not discharged. Id. The Court recognized that under 11 U.S.C § 101, a
claim is a “right to payment, whether or not such right is reduced to judgment, liquidated or
unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or
unsecured.” Id. (emphasis in original). Contingent claims are those in which a “debt may be
triggered only upon the occurrence of a future event.” Id. (citing In re Parks, 281 B.R. 899, 90102 (Bankr.E.D.Mich.2002). The Court then concluded that the bankruptcy courts in the Sixth
Circuit have universally adopted the approach that, “a contingent right to payment in the
definition of a bankruptcy claim clarifies that a right to payment that is not yet enforceable under
non-bankruptcy law at the time of the bankruptcy filing may still constitute a claim that is
dischargeable in the bankruptcy case.” Id. (citing In re Huffy Corp., 424 B.R. 728, 301
(Bankr.S.D.Ohio 2010)). On this rationale, the court concluded that even though the injury did
not occur before the defendant filed for bankruptcy and injury was an element to the underlying
state law claim, because the conduct giving rise to the injury occurred before the petition was
filed, the debt had arisen before the date of the order and was properly discharged under 11
U.S.C. § 727(b).
Hunter claims that though her injury did not manifest until October of 2011, the surgery
performed by Dr. Husted was the conduct that caused the damages for which she seeks relief. [R.
1-5 at 3]. All parties agree that Dr. Husted performed surgery on Hunter on August 14, 2009.
[R. 21 at 2, R. 17 at 1]. The disagreement as to when the claim arose is not a question of fact,
but of law. Hunter claims that the claim arose at the time of injury, which makes hers a postpetition claim that is non-dischargeable in bankruptcy. [R. 1-5 at 3, R. 17 at 5]. For the reasons
stated above, Hunter’s characterization of the law on this point is incorrect. The time of the
events giving rise to the claim and the time of the conduct giving rise to an injury is the relevant
date for determining when a claim arises. Hunter and Dr. Husted both recognized that this
conduct is the August 14, 2009 surgery. Further, Dr. Husted has provided documentation of his
bankruptcy petition, demonstrating that his debts were discharged after the date of the surgery.
[R. 14-2, 3]. These facts are not in dispute and no amount of discovery will change when the
surgery was performed, when the debts were discharged in bankruptcy, or the state of the law.
Before leaving this point, it must be noted that Hunter also argues that Dr. Husted did not
list Hunter as a creditor on his bankruptcy petition, and thus her claim should not be subject to
discharge. [R. 17-4]. Dr. Husted counters that he amended the petition on November 21, 2011 to
include Hunter’s claim, and provides documentation of this amendment. [R. 21]. Federal Rule
of Bankruptcy Procedure 1009 provides that, “A voluntary petition, list, schedule, or statement
may be amended by the debtor as a matter of course.” Based on this rule, the Sixth Circuit has
adopted a “permissive approach” that allows for amendment any time before the case is closed
and denies courts the discretion to reject such amendments. Lucius v. McLemore, 741 F.2d 125,
127 (6th Cir. 1984). Dr. Husted amended his petition to include Hunter’s claim on November 21,
2011, and his debts were not discharged in bankruptcy until May 24, 2011. [R. 21]. Therefore,
because Dr. Husted amended his petition before the case was closed, the initial failure to do so
does not preclude discharge of Hunter’s claim in bankruptcy.
As there is no dispute of material fact, and no additional discovery would change the
outcome on this issue, it may be properly decided as a matter of law that Hunter’s claim was
based on “pre-petition conduct,” arose before the date of the order for relief, was properly
included in the petition, and unless an exception can be shown, was therefore discharged. On
this point, Dr. Husted’s summary judgment motion was not premature and will be substantively
Hunter next argues that even if her claim arose before the bankruptcy petition and Dr.
Husted properly amended his petition to include her claim, the action is excepted from discharge
pursuant to 11 U.S.C. 523(a)(6). [R. 17 at 5]. Under this section a debtor may not discharge a
claim that is based on a willful and malicious conduct of the debtor. As a general rule, the debt
arising from medical malpractice attributable to negligence or reckless conduct does not fall
within the exception of 11 U.S.C. 523(a)(6). Kawaauhau v. Geiger, 523 U.S. 57, 64 (1997)
(wherein the United States Supreme Court stated, “We hold that debts arising from recklessly or
negligently inflicted injuries do not fall within the compass of § 523(a)(6).”). For this exception
to apply, the debtor must have done more than take a deliberate act that leads to an injury but
must have “desired to cause the consequences of her act, or believed that the consequences of the
act was substantially certain. In re Romano, 59 Fed. Appx. 709 (6th Cir. 2003) (wherein the
Sixth Circuit determined that a complaint alleging “negligence” and “malpractice” was not
willful or malicious for the purposes of § 523(a)(6)). In addition, when punitive damages are
shown to arise from such conduct they are also nondischargeable under §523 (a)(6). In re Abbo,
168 F.3d 930, 931 (6th Cir. 1999).
In her complaint, Hunter alleges that Dr. Husted was negligent and grossly negligent in
commission of activity that amounts to medical malpractice and misrepresentation. [R. 1-5 at 45]. However, she does not stop at mere negligence. Her complaint also alleges that Dr.
Husted’s conduct was sufficiently “willful or wanton” such as to warrant punitive damages. [R.
1-5 at 7]. Though Dr. Husted denies that he intentionally caused this harm, as to this issue the
parties still have a factual dispute. Moreover, if willful and malicious harm could be shown, the
debt becomes nondischargeable, affecting the outcome of the case. In this circumstance,
additional discovery would be beneficial to Hunter’s case that Dr. Husted willfully caused her
injuries. Thus, Dr. Husted’s summary judgment motion is premature and, as to this point, will be
Finally, Hunter argues that even if Husted appropriately discharged her claim, that does
not impede her from proceeding against him in name to establish a right to recover under
Husted’s liability insurance coverage. [R. 17 at 6]. Section 524(e) states that, “discharge of a
debt of the debtor does not affect the liability of any other entity on, or the property of any other
entity for, such debt.” Thus, discharge of the principal debtor generally will not discharge the
liabilities of contractually responsible insurance companies. Moore, Owen, Thomas & Co. v.
Coffey, 992 F.2d 1439, 1449 (6th Cir. 1993), In re Morris, 430 B.R. 824, 828 (Bankr.W.D.Tn.
2010) (stating, “The ‘fresh start’ policy [contemplated by Chapter 7 of the Bankruptcy Code
was] not intended to provide a method by which an insurer can escape its obligations based
simply on the financial misfortunes of the insured.”).
Hunter is correct that Dr. Husted’s discharge of her claim does not prohibit her for
pursuing an action against Dr. Husted to recover against his insurance company. However, Dr.
Husted has stated that he does not have any insurance from which to collect and has submitted an
affidavit to that effect. [R. 14-1 at 2, 14-4]. If this were true, there would be no issue of material
fact, and judgment as a matter of law could be made in favor of Dr. Husted on this point.
However, as Hunter states, Dr. Husted is no expert on insurance. [R. 17 at 3-4]. Though he
might be honestly testifying to his belief that he is not covered by insurance, further investigation
by Hunter through discovery could possibly demonstrate otherwise. This is a circumstance
where additional discovery could be helpful to Hunter and might change the outcome of the
action. Therefore, Hunter’s motion to dismiss on the issue of insurance is premature and will be
In summary, Dr. Husted’s motion for summary judgment is granted in part and denied in
part. Though the motion was made before the Rule 26(f) conference, Dr. Husted provided a
substantial amount of documentation along with his motion. From this evidence, as well as the
statements in the pleadings, judgment may be made as a matter of law that Hunter’s claim did
arise before the filing of the petition of bankruptcy and, unless there is an exception, was
properly discharged in bankruptcy. As no additional discovery would be helpful on this point,
Dr. Husted’s motion on this issue was not premature and will be granted. However, more
discovery is necessary as to whether Dr. Husted caused the injury willfully and maliciously and
whether he has insurance from which Hunter could collect. On these issues, Dr. Husted’s motion
for summary judgment is premature and will be denied. According to the amended scheduling
order [R. 40] the parties have until January 15, 2013 to complete discovery. The original
scheduling order allows the parties until April 15, 2013 to file all dispositive motions. Hunter
may continue to pursue discovery on the issues of willfulness and maliciousness as well as
insurance, and Dr. Husted is permitted to raise his motion afresh before the dispositive motion
deadline but after adequate time for discovery has taken place.
For the aforementioned reasons, it is hereby ORDERED as follows:
As to whether the Plaintiff’s claim arose before the filing of his bankruptcy
petition and was thus subject to discharge for that reason, Defendant’s Motion for Summary
Judgment [R. 14] is GRANTED;
As to the willful and malicious nature of his conduct and the availability of
insurance, Defendant’s Motion for Summary Judgment [R. 14] is DENIED WITHOUT
This, the 28th of September, 2012.