IN THE UNITED STATES BANKRUPTCY COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

IN RE: :

:

JOSEPH EDWARD HUDAK, : Bankruptcy No. 05-20010-MBM

:

 Debtor. :

................................................................:...............................................................

Joseph E. Hudak, :

Movant, : Chapter 7

:

v. :

: Adversary No. 05-3328-MBM

Pennsylvania Lawyers Fund for :

Client Security, et. al., :

Respondents. :

MEMORANDUM

AND NOW, this 14th day of June, 2006, upon consideration of

(a) the motion for equitable relief filed by Joseph Hudak, the instant debtor

(hereafter “the Debtor”), which motion, rather than an adversary complaint,

commenced the instant adversary proceeding, wherein the Debtor names

as respondents the Pennsylvania Lawyers Fund for Client Security

(hereafter “the Fund”), the Disciplinary Board of the Supreme Court of

Pennsylvania (hereafter “the Board”), and the Office of the Disciplinary

Counsel of the Board (hereafter “the ODC”), and wherein the Debtor

seeks as relief (i) a declaration that the claim of the Fund is discharged by

virtue of the Debtor’s Chapter 7 discharge (Part 1), (ii) a determination that

the Fund’s claim, for several nonbankruptcy reasons, is invalid and should

therefore be disallowed (Parts 2 – 4), and (iii) a determination as to the

proper amount of a claim by the Board for costs imposed upon him by

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virtue of a March 1, 2005 order of the Pennsylvania Supreme Court

(hereafter “the Board’s Claim”) or, alternatively, a determination that such

claim of the Board is discharged by virtue of his Chapter 7 discharge (Part

5);

(b) the motion by the aforesaid respondents (hereafter “the Judicial

Respondents”) for summary judgment in the instant adversary proceeding;

and

(c) the Judicial Respondents’ Memorandum of Law in support of their

summary judgment motion, as well as the Debtor’s Answer to such

motion;

and subsequent to notice and a hearing on the Judicial Respondents’

summary judgment motion held on June 8, 2006, at which time the Court ruled

that it would (a) grant such motion with respect to Parts 2 – 5 of the Debtor’s

motion for equitable relief, and (b) deny such motion with respect to Part 1 of the

Debtor’s motion for equitable relief,

it is hereby determined that the Court, for the reasons briefly set forth

below, shall issue an order that

(a) grants the Judicial Respondents’ summary judgment motion with

respect to Parts 2 – 4 of the Debtor’s motion for equitable relief, and

(b) denies the Judicial Respondents’ summary judgment motion with

respect to Parts 1 & 5 of the Debtor’s motion for equitable relief.

The Judicial Respondents seek summary judgment on the ground that the

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The applicability of § 362(b)(4) to any post-petition actions taken by the

Judicial Respondents would be relevant to an action by the Debtor (a) to have

the automatic stay enforced as against the Judicial Respondents, and/or (b) for

damages sought on the ground that the Judicial Respondents, by taking such

post-petition actions, willfully violated the automatic stay. However, the Debtor

has thus far failed to commence any such action.

3

Court lacks subject matter jurisdiction over each part of the Debtor’s motion for

equitable relief. The Judicial Respondents predicate their position that the Court

lacks such subject matter jurisdiction, in turn, on the following, namely (a) an

application of the Rooker–Feldman doctrine, (b) an argument that none of the

relief sought by the Debtor in his motion for equitable relief will have an effect

upon the administration of the Debtor’s bankruptcy estate, and (c) the

applicability of 11 U.S.C. § 362(b)(4) to the post-petition actions that were taken

by the Judicial Respondents against the Debtor.

As an initial matter, the Court notes that it is puzzled by the Judicial

Respondents’ reliance on § 362(b)(4) to support their summary judgment motion. 

Such provision, when it is applicable, merely operates to shield from the effect of

the automatic stay imposed under 11 U.S.C. § 362(a) actions that parties may

take post-petition against a debtor. Such provision does not operate in any way

to circumscribe the Court’s subject matter jurisdiction over causes of action that

are brought before it. Therefore, the Court holds that § 362(b)(4) does not

operate in any way to lend support to the Judicial Respondents’ summary

judgment motion.1

As for the remainder of the Judicial Respondents’ position, the Court

agrees with them that the Rooker–Feldman doctrine operates to preclude the

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As an aside, the Court holds as well that the Debtor is likely barred by

virtue of res judicata from (a) attacking the validity of the Fund’s claim, and (b)

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Court from (a) addressing whether the Fund’s claim is invalid and, thus,

disallowable, and (b) thus granting the relief sought by the Debtor in Parts 2 – 4

of his motion for equitable relief. “[T]he Rooker-Feldman doctrine prevents

aggrieved parties from collaterally attacking state court judgments in the lower

federal courts.” Colonial First Properties, LLC v. Henrico County Virginia, 236

F.Supp.2d 588, 595 (E.D.Va. 2002); see also Marshall v. Lauriault, 372 F.3d 175,

180 (3rd Cir. 2004) (same). As the Court understands it, the only argument that

the Debtor registers in opposition to the Judicial Respondents’ Rooker-Feldman

position is that (a) the Fund’s claim against him arose not by virtue of a state

court decision but rather by virtue of nothing other than a decision by the judicial

body that administers the Fund, and (b) decisions other than those by courts are

insufficient to invoke the bar of the Rooker-Feldman doctrine. Unfortunately for

the Debtor, the Rooker-Feldman doctrine operates to bar federal courts, such as

is this one, from overturning the decision of a state judicial body (i.e., a body that

operates as an arm of a state’s highest court or its court system), particularly a

state judicial disciplinary body as is that which established the Fund’s claim. See

Allstate Insurance Co. v. West Virginia State Bar, 233 F.3d 813, 817-820 (4th Cir.

2000); LaCava v. New York State Commission on Judicial Conduct, 299

F.Supp.2d 176, 179 (S.D.N.Y. 2003). Therefore, the Rooker-Feldman doctrine,

by itself, supports a grant of summary judgment in the Judicial Respondents’

favor vis-a-vis Parts 2 – 4 of the Debtor’s motion for equitable relief.2

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thus obtaining the relief that he seeks in Parts 2 – 4 of his motion for equitable

relief. The Court so holds because (a) the Pennsylvania rules of res judicata,

which rules apply in the instant matter given that the decision establishing the

Fund’s claim was not rendered by a federal court, confirm, inter alia, that “[a]

decision need not be by a court of record to be res judicata,” 28 P.L.E.2d

Judgment § 254 at 328 (Bender 2003); see also City of McKeesport v.

Pennsylvania Public Utility Commission, 442 A.2d 30, 31 (Pa.Commw.Ct. 1982)

(res judicata is applicable to decisions of administrative agencies), (b) the

decision by the judicial body that administers the Fund which served to establish

the Fund’s claim is thus entitled to be accorded res judicata effect provided the

other elements of res judicata are present, and (c) such other elements, the

Court summarily concludes, are present with respect to the decision that

established the Fund’s claim.

3

The Court is aware of the two relatively recent actions that the Debtor has

brought for libel/slander/defamation, for which actions the reference to this Court

has already been withdrawn by the Debtor’s opposition therein. Such actions,

however, because they are predicated solely upon acts alleged by the Debtor to

have occurred post-petition, cannot constitute assets of the Debtor’s bankruptcy

estate. Thus follows the Court’s conclusion that the instant bankruptcy case

remains a no-asset Chapter 7 case.

5

The Court also holds that, even were the Rooker-Feldman doctrine not to

apply to such Parts 2 – 4 as set forth above, the Court nevertheless lacks subject

matter jurisdiction over such Parts. The Court so holds because, it holds in turn,

addressing whether the Fund’s claim is invalid and, thus, disallowable, which

relief is that which is sought by the Debtor in Parts 2 – 4 of his motion for

equitable relief, will not have any effect upon the administration of the Debtor’s

bankruptcy estate. The latter conclusion follows because the instant bankruptcy

case is a no-asset Chapter 7 case, see Trustee’s Report of No Distribution,

Docket No. 85 (filed 3/11/06),3

 that is a Chapter 7 case where no assets will be

distributed to unsecured creditors. See In re Foundation for New Era

Philanthropy, 201 B.R. 382, 390 (Bankr.E.D.Pa. 1996) (“in a no-asset chapter 7

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The Court notes that the Rooker-Feldman doctrine and res judicata would

likely not bar the Debtor’s request in his Part 5 for a determination as to the

proper amount of the Board’s Claim given that the Pennsylvania Supreme Court,

in its March 1, 2005 order that imposed such obligation on the Debtor, failed to

rule in any way as to the proper amount of such obligation.

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case ... generally there is no reason to hear a challenge to an unsecured proof of

claim, since the size of the claim is irrelevant”). Therefore, a grant of summary

judgment in the Judicial Respondents’ favor vis-a-vis Parts 2 – 4 of the Debtor’s

motion for equitable relief is warranted at this time. The Court notes as well that,

for the same reason that resolving Parts 2 – 4 of the Debtor’s motion for

equitable relief will not have any effect upon the administration of the Debtor’s

bankruptcy estate, making a determination as to the proper amount of the

Board’s Claim, which determination the Debtor seeks as relief in Part 5 of his

motion for equitable relief, will likewise not have any effect upon the

administration of the Debtor’s bankruptcy estate; accordingly, the Court lacks

subject matter jurisdiction to undertake such determination.4

However, the Court holds that it possesses subject matter jurisdiction to

determine whether, on the one hand, the claims of the Fund and the Board are

dischargeable by way of the Debtor’s Chapter 7 discharge, or whether, on the

other hand, such claims are nondischargeable pursuant to 11 U.S.C. § 523(a),

that is whether such claims are excepted from the Debtor’s Chapter 7 discharge. 

The Court furthermore holds that it possesses such subject matter jurisdiction

regardless of whether such dischargeability determination affects the

administration of the Debtor’s bankruptcy estate. The latter holding follows

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because (a) the test of whether a civil proceeding affects the administration of a

debtor’s bankruptcy estate is only relevant to the issue of whether such civil

proceeding is “related to” a bankruptcy case so as to establish a bankruptcy

court’s subject matter jurisdiction over such civil proceeding pursuant to 28

U.S.C. § 1334(b), see Halper v. Halper, 164 F.3d 830, 837 (3rd Cir. 1999)

(quoting Pacor v. Higgins, 743 F.2d 984, 994 (3rd Cir. 1984)); 1 Collier on

Bankruptcy ¶ 3.01[4][c][ii][B] at 3-25 to 3-26 (Bender 2006), (b) a bankruptcy

court, pursuant to 28 U.S.C. § 1334(b), possesses subject matter jurisdiction not

only over civil proceedings that are “related to” a bankruptcy case but also over

civil proceedings that arise under title 11 (i.e., the Bankruptcy Code) or that arise

in a case under title 11, see 28 U.S.C.A. § 1334(b) (West 1993), (c)

dischargeability determinations constitute core proceedings, which proceedings

are nothing other than civil proceedings that either arise under title 11 or arise in

a case under title 11, see 28 U.S.C.A. § 157(b)(1) & (2)(I) (West 1993), and (d) a

bankruptcy court thus possesses subject matter jurisdiction over a

dischargeability determination even if such civil proceeding is not related to a

bankruptcy case in the sense that it affects the administration of a debtor’s

bankruptcy estate.

Finally, the Court holds that the Rooker–Feldman doctrine does not

operate to bar the Court from making a dischargeability determination regarding

debts of the Debtor. The Court so holds because (a) the Rooker-Feldman

doctrine, as set forth above, prevents aggrieved parties from collaterally attacking

state court judgments in the lower federal courts, and (b) a dischargeability

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As set forth above, the Court, at the hearing on June 8, 2006, orally ruled

that it would grant the Judicial Respondents’ summary judgment motion with

respect to Part 5 of the Debtor’s motion for equitable relief. The Court so ruled

because, at that time, it was unaware that the Debtor sought a dischargeability

determination within such Part – instead, the Court, at such time, thought that the

only relief sought by the Debtor therein was a determination as to the proper

amount of the Board’s Claim, which determination, as set forth above, the Court

now holds (a) will not have any effect upon the administration of the Debtor’s

bankruptcy estate, and (b) it thus may not make for lack of subject matter

jurisdiction. However, because the Court is now aware that the Debtor seeks a

dischargeability determination in such Part 5, the Court cannot, at least at this

time, grant summary judgment in the Judicial Respondents’ favor with respect to

such Part.

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determination regarding debts of the Debtor has never been the subject of any

state court decision.

Because dischargeability determinations are sought by the Debtor in both

Part 1 and Part 5 of his motion for equitable relief, and since the Judicial

Respondents have not yet asserted any meritorious ground for obtaining

summary judgment regarding such dischargeability determinations, the Court

must deny the Judicial Respondents’ summary judgment motion as it respects

such Parts 1 & 5.5

For all of the foregoing reasons, the Court shall issue the order described

at the outset of the instant Memorandum.

BY THE COURT

 /s/ 

M. BRUCE McCULLOUGH,

U.S. Bankruptcy Judge

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IN THE UNITED STATES BANKRUPTCY COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

IN RE: :

:

JOSEPH EDWARD HUDAK, : Bankruptcy No. 05-20010-MBM

:

 Debtor. :

................................................................:...............................................................

Joseph E. Hudak, :

Movant, : Chapter 7

:

v. :

: Adversary No. 05-3328-MBM

Pennsylvania Lawyers Fund for :

Client Security, et. al., :

Respondents. :

ORDER OF COURT

AND NOW, this 14th day of June, 2006, for the reasons set forth in the

accompanying Memorandum of the same date, it is hereby ORDERED,

ADJUDGED, AND DECREED that

(a) the Respondents’ summary judgment motion is GRANTED with respect to

Parts 2 – 4 of the Debtor’s motion for equitable relief, and

(b) the Respondents’ summary judgment motion is DENIED with respect to

Parts 1 & 5 of the Debtor’s motion for equitable relief.

IT IS HEREBY FURTHER ORDERED that a Status Conference on

Adversary No. 05-3328 shall be heard on September 14, 2006 at 10:30 a.m. in

Courtroom B, 54th Floor, 600 Grant Street, Pittsburgh, PA 15219.

BY THE COURT

 /s/ 

M. BRUCE McCULLOUGH,

U.S. Bankruptcy Judge

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cm: Mary E. Butler, Esq.

1515 Market Street, Suite 1414

Philadelphia, PA 19102

Joseph E. Hudak, Esq.

P. O. Box 23423

Fourth Avenue Station

Pittsburgh, PA 15222

Office of the U. S. Trustee

Suite 970 Liberty Center

1001 Liberty Avenue

Pittsburgh, PA 15222

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