Bankr. E.D.N.C.: In re King- No Collateral Estoppel without Notice of the Action

Summary: Plaintiff in a non-dischargability action sought summary judgment based on judgment entered by Judge Jolly on August 17, 2009.  The Debtors/Defendants, however, produced the entire state court file, showing both that Judge Stephens had dismissed the action on May 19, 2009, and that there was nothing showing the Debtors/Defendants received notice of the litigation pending before Judge Jolly. Finding that the Debtors/Defendants had not had "an adequate opportunity or incentive to obtain a full and fair adjudication in the initial action."  Metropolitan Health Corporation v. Scott (In re Scott), Adv. Pro. No. 10-00101-8-JRL (Bankr. E.D.N.C. June 6, 2011) (Leonard, J.) (quoting Restatement (Second) of Judgments § 28 (1982)), the Court held that the Debtors/Defendants were not precluded from litigating the matter and collateral estoppel did not apply. For a copy of the opinion, please see: King- No Collateral Estoppel without Notice of the Action.pdf