Judge Nugent

08-05128 Agricredit Acceptance LLC v. Koelzer (Doc. # 32) - Document Text

Case 08-05128 Doc# 32 Filed 08/11/09

SIGNED this 11 day of August, 2009.

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STEPHEN V. KOELZER, ) Case No. 08-10557
) Chapter 7

Debtor )

Plaintiff, )
v. ) Adv. No. 08-5128
Defendant. )


Creditor Agricredit Acceptance LLC (Agricredit) moves for summary judgment on its
complaint alleging that debtor’s debt to it should be excepted from his discharge pursuant to 11


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U.S.C. §§ 523(a)(2) and (a)(6). Agricredit’s complaint states that Koelzer cannot account for the
whereabouts of two of the three balers he purchased on a Retail Installment Contract and Security
Agreement (Contract). Agricredit has only been able to recover one of the balers and has a
Washington state court judgment for the deficiency, approximately $86,021. Agricredit appears by
Eric D. Bruce of Bruce, Bruce & Lehman. Koelzer appears pro se.

This is a core proceeding under 28 U.S.C. § 157(b)(2)(I) over which this Court has subject
matter jurisdiction, 28 U.S.C. § 157(b)(1) and § 1334(b).

Procedural Background

In the pretrial order entered in this case on March 5, 2009,1 the parties stipulated to these
facts: Koelzer signed the Contract on May 22, 2000 and purchased three Hesston balers for
$129,235. When Koelzer defaulted on the loan, Agricredit repossessed one of the balers, obtained
a deficiency judgment against Koelzer and an order of replevin for the remaining two balers.
Koelzer has no record of what happened to the balers and contends that another secured creditor,
Baker Boyer National Bank, repossessed the balers, but has no records of his own to support that.
He does stipulate that he is liable on the deficiency judgment mentioned above. Agricredit holds
a claim in the amount of $86,771.91.

Agricredit filed a statement of uncontroverted facts in support of its motion, but no
memorandum of law. As support for the statement of uncontroverted facts, Agricredit attached a
copy of the complete transcript of Koelzer’s Fed. R. Bankr. P. 2004 examination, a copy of requests

1 Adv. Dkt. 24. The pretrial order was submitted without Koelzer’s contentions and
signature pursuant to this Court’s local rule, D. Kan. L.B.R. 9074.1(b). Koelzer did not object to
the pretrial order.


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for admission served upon him, several affidavits, and copies of the Contract documents. Agricredit
relies principally on the admissions and affidavits, but in some instances does not “refer with
particularity to the portions of the record on which the movant relies” as is required in D. Kan.

L.B.R. 7056.1(a). Several of the proposed uncontroverted fact statements are actually legal
conclusions. Koelzer, in turn, denies a number of the statements of fact by pleading lack of
knowledge or stating the opposite of what is allegedly uncontroverted. He supplies no record
support for any controversions he makes as he is obligated to do by D. Kan. L.B.R. 7056.1(b)(1)
when opposing a motion for summary judgment.
Summary Judgment Standards

This Court’s function in reviewing Agricredit’s motion for summary judgment is to first
determine whether genuine issues of fact exist for trial. In making this determination the Court may
not weigh the evidence nor resolve fact issues.2 On summary judgment, it is not the Court’s function
to determine witness credibility, weigh evidence or decide competing inferences.3 Once the Court
determines those facts to which there is no dispute, it must then determine whether those
uncontroverted facts establish a sufficient legal basis which entitle the movant to judgment as a
matter of law.4 If different ultimate inferences may properly be drawn from the facts, summary

2 First Sec. Bank of New Mexico, N.A. v. Pan American Bank, 215 F.3d 1147, 1154 (10th
Cir. 2000) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed. 2d
202 (1986); Concrete Works of Colo., Inc. v. City and County of Denver, 36 F.3d 1513, 1518
(10th Cir. 1994) (Court may not resolve disputed questions of fact at the summary judgment

3 Pan American Bank, supra; Masilionis v. Falley’s Inc., 904 F. Supp. 1224, 1226 (D.
Kan. 1995); Boyer v. Board of County Com’rs of Johnson County, 922 F. Supp 476, 484 (D.
Kan. 1996), aff’d 108 F.3d 1388 (10th Cir.1997).

4 E.E.O.C. v. Lady Baltimore Foods, Inc., 643 F. Supp. 406, 407 (D. Kan. 1986) (Even if
there are no genuine issue of material fact, the movant still has the burden to show it is entitled to


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judgment is not appropriate.5

Here, both Agricredit’s and Koelzer’s compliance with summary judgment practice and D.
Kan. L.B.R. 7056.1 is deficient. As noted above, neither party has properly cited to the record to
support their version of the facts. The Court is not obliged to sift through the record to isolate and
find the record support for the statement of uncontroverted fact or the controversion.6 Neither party
has fully complied with Rule 7056.1(a) or (b). Where unsupported by citation to the record, the
Court will disregard the movant’s fact or the non-movant’s response. The Court also disregards
those factual disputes that are not material to the outcome7 and a party’s characterization of the facts,
whether made by the movant or the non-movant.8 To the extent either Agricredit’s or Koelzer’s

judgment as a matter of law.); Reed v. Bennett, 312 F.3d 1190, 1195 (10th Cir. 2002).

5 Security Nat. Bank v. Belleville Livestock Commission Co., 619 F.2d 840, 847 (10th Cir.

6 See Mitchell v. City of Moore, Oklahoma, 218 F.3d 1190 (10th Cir. 2000); Thomas v.
Wichita Coca-Cola Bottling Co., 968 F.2d 1022, 1024-25 (10th Cir. 1992), cert. denied, 113 S.Ct.
635 (1992); Thompson v. United Transp. Union, 167 F. Supp. 2d 1254, 1266 (D. Kan. 2001);
Sprint Communications Co. L.P. v. Vonage Holdings Corp., 500 F. Supp. 2d 1290, 1304-05 (D.
Kan. 2007)

7 See Cease v. Safelite Glass Corp., 911 F. Supp. 477 (D. Kan. 1995) (Only disputes over
facts that might affect the outcome under governing law will preclude summary judgment);
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (Factual disputes that are irrelevant or
unnecessary will not be considered); Richards v. City of Topeka, 934 F. Supp. 378 (D. Kan.

8 See Patton v. AFG Industries, Inc., 92 F. Supp. 2d 1200, 1202 n. 3 (D. Kan. 2000)
(Controversion only denied characterization of a fact [a conversation] and therefore the fact is
deemed admitted); Stephens v. City of Topeka, Kan.,, 33 F. Supp. 2d 947 (D. Kan. 1999)
(Conclusory terms or characterizations without any concrete facts to support characterizations
are afforded no weight by the court); Rogers v. United States, 58 F. Supp. 2d 1235 (D. Kan.
1999) (The general characterization of a transaction is a question of law).


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submissions suffer from these defects, the proffered fact or response will be disregarded.9

In short, summary judgment is available only where there is no genuine issue of material fact
and the movant is entitled to judgment as a matter of law. Unsupported denials of movant’s properly
supported statements of fact will not suffice to create a genuine issue of fact for trial.10 Nor can the
non-movant rest upon “lack of knowledge” to controvert a movant’s statement of fact.11 Here,
Koelzer submitted no affidavit or other evidentiary support to oppose Agricredit’s factual
statements.12 Thus, to the extent Agricredit’s statements of fact are properly supported, they will
be deemed admitted; conclusory statements without specific facts or reference to the supporting
record will be disregarded.13 Between the stipulations in the pretrial order and the summary
judgment papers, the Court finds that the following facts are uncontroverted.

Findings of Fact

Koelzer signed the Contract on May 22, 2000 and borrowed $129,235 to purchase three

9 See Adv. Dkt. 26, Agricredit’s Statement of Uncontroverted Facts, ¶¶ 9, 10, 11, 12, 13,

10 In re Grandote Country Club Company, Ltd., 252 F.3d 1146, 1149-50 (10th Cir. 2001);
In re Git-N-Go, Inc., 2007 WL 2816215, *4 (Bankr. N.D. Okla 2007) (Trustee’s statement of
material facts would be deemed admitted if the nonmoving party asserted conclusory allegations
and general denials without providing evidentiary support); Fed. R. Civ. P. 56(e)(2); D. Kan.

L.B.R. 7056.1(a). See Dkt. 31, Koelzer’s Response, ¶s 7, 9, 10, 11, 12, 13, 14.
11 In re Rafter Seven Ranches, LP, 2008 WL 2783278, *4 n. 28 (Bankr. D. Kan. 2008);
In re Fries, 378 B.R. 304, 308 (Bankr. D. Kan. 2007). See Dkt. 31, Koelzer’s Response, ¶s 5-8.

12 It was incumbent upon Koelzer to identify the movant’s facts in dispute by reference
to affidavits, deposition transcripts, or the other materials allowed by Rule 56. None of
Koelzer’s responses are supported by reference with particularity to the record. See Adler v.
Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998); Fed. R. Civ. P. 56(e)(2); D. Kan.

L.B.R. 7056.1(d).
Dkt. 26, Agricredit’s Statement of Uncontroverted Facts, ¶¶ 9-14.

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balers. He granted a security interest in three Hesston balers to Agricredit’s predecessor ASNW,
Inc. As stated in the affidavit of an officer of Agricredit, ASNW assigned the Contract to Agricredit
on December 26, 2000. Koelzer defaulted on the Contract and Agricredit repossessed one of the
three balers. Agricredit obtained a deficiency judgment against Koelzer in the amount of $86,021.91
and the right to exercise replevin of the remaining two balers. Koelzer has no record of what
happened to any of the balers. According to the supporting affidavit of its Vice President, Baker
Boyer did not repossess any of the balers and has no knowledge of their whereabouts.14


Agricredit seeks to except this debt from discharge on two statutory grounds. It first alleges
that Koelzer’s debt to it was incurred by false statements or false pretenses within the meaning of
§ 523(a)(2)(A) or a false written statement respecting his financial condition within the meaning of
§ 523(a)(2)(B). It further alleges that Koelzer wilfully and maliciously damaged its property
interests as set out in § 523(a)(6).

In the absence of a memorandum of law, the Court is hard pressed to see how being unable
to account for missing collateral after a loan is made can be equated with making a false statement
or acting with a false pretense in order to obtain the loan. Nor can the Court discern the existence
of a statement in writing regarding Koelzer’s financial condition that was materially false. In the
absence of movant’s identification of a false statement or some fraud, the Court concludes that there

14 The balance of Agricredit’s statements of uncontroverted fact are conclusory legal
statements without reference to an evidentiary record (Statement ¶s 9-14) and the truth of which
Koelzer has denied, also without reference to the supporting record. As discussed above, those
statements will be disregarded for summary judgment purposes. See supra, pp. 3-5.


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is no legal basis for summary judgment on the § 523(a)(2)(A) or (B) claim.15

Less simple, however, is the disposition of Agricredit’s § 523(a)(6) claim. To prevail on
summary judgment, movant must show that there is no genuine factual issue concerning either
Koelzer’s destruction or conversion of the balers or of his knowledge that doing so would damage
Agricredit’s economic interests. Some allegation concerning the element of scienter is necessary
to support a § 523(a)(6) judgment, whether on summary judgment or at trial.16 Here, Koelzer claims
not to know what happened to the balers. In his Rule 2004 examination, he stated that once his
property began to be repossessed, he attempted to resist, but was jailed in the state of Washington
for breach of the peace. Thereafter, he sat in his house and watched repossessions go forward
without interfering. He professes to have no idea about the whereabouts of the two missing balers.
Agricredit does not allege that Koelzer actively concealed or removed them, only that Koelzer can’t
or won’t account for them. Nor does Agricredit cite to any portion of the record that would support
a finding that Koelzer did in fact conceal or remove the balers with the knowledge that doing so
would damage Agricredit. Indeed, Agricredit did not even seek such an admission.

There is simply no supported factual allegation that Koelzer intended to harm Agricredit.
Koelzer’s professed lack of knowledge may be less than credible, but this Court cannot assess

15 See In re Kaspar, 125 F.3d 1358 (10th Cir. 1997) (discussing elements of §
523(a)(2)(B)); Fowler Bros. v. Young (In re Young), 91 F.3d 1367 (10th Cir. 1996) (discussing
requisite proof for § 523(a)(2)(A)); In re Joelson, 307 B.R. 689 (10th Cir. BAP 2004)
(distinguishing § 523(a)(2)(A) and (B)).

16 Kawaauhau v. Geiger, 523 U.S. 57, 61-62, 118 S. Ct. 974, 140 L. Ed. 2d 90 (1998)
(Section 523(a)(6) encompasses acts done with the actual intent to cause injury; it requires a
deliberate or intentional injury). See In re Longley, 235 B.R. 651 (10th Cir. BAP 1999) (Section
523(a)(6) claim discussed in context of conversion of secured property and applying Geiger


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credibility on summary judgment. As noted in Collier’s treatise, “Courts must be careful not to
equate a breach of a contract, which happens to be a security agreement, with conduct causing
willful and malicious injury.”17 All that is shown on this summary judgment record is that a
contract has been breached. While a court who has observed the witnesses, assessed their
credibility, weighed the evidence, and applied the requisite burden of proof at trial might reach a
different conclusion on this record, there is insufficient record support for summary judgment at this

Therefore, the Court DENIES Agricredit’s motion for summary judgment. The facts as
found herein shall be treated as established at the trial of this matter that will be scheduled in due
course.18 The Clerk shall schedule this matter for a half-day trial at the Court’s earliest available

# # #

17 Lawrence P. King, editor-in-chief, 4 COLLIER ON BANKRUPTCY ¶ 523.12[3], p. 523-95
(15TH rev. ed).
18 See Fed. R. Civ. P. 56(d)(1).

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