Morris v. Cunningham (In re Cunningham)

Eddie Lou Morris (plaintiff) brought an action in a Georgia state superior court against real estate agent Willie Cunningham and others (defendants) based on the fraudulent sale to Morris of a property in College Park, Georgia. Morris specifically asserted a fraud claim against Cunningham in the action. Cunningham filed an answer and counterclaim, but he later failed to appear at trial, and the superior court entered a default judgment against him on the fraud claim. Following a jury trial on damages, the court entered a final judgment awarding Morris roughly $350,000 in compensatory damages from Cunningham and two other defendants, jointly and severally, plus $166,666.63 in punitive damages on Morris’s fraud claim from Cunningham individually. Cunningham never objected to or appealed the judgment, and he never paid Morris any of the awarded damages. Cunningham subsequently filed for chapter 7 bankruptcy. When Morris learned of Cunningham’s bankruptcy petition, she filed a complaint objecting to the dischargeability of her judgment claim. Morris asserted that the judgment was nondischargeable under the fraud exception to discharge in 11 U.S.C. § 523(a)(2)(A) and that the doctrine of collateral estoppel prohibited the bankruptcy court from relitigating the fraud issue. The bankruptcy court considered Morris’s arguments and determined whether Morris was entitled to summary judgment on her claim of nondischargeability.