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United States Bankruptcy Appellate Panel of the First Circuit

February 3, 2016

MICHAEL O'RORKE and BETH O'RORKE, Plaintiffs-Appellees,
PETER J. PORCARO, Defendant-Appellant

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[Copyrighted Material Omitted]

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          Appeal from the United States Bankruptcy Court for the District of Massachusetts. (Hon. Melvin S. Hoffman, U.S. Bankruptcy Judge). Bankruptcy Case No. 10-45391-CJP. Adversary Proceeding No. 11-04010-CJP.

         Peter J. Porcaro, Pro se, on brief for Defendant-Appellant.

         Michael J. Heineman, Esq., and Scott R. Pearl, Esq., on brief for Plaintiffs-Appellees.

         Before Deasy, Harwood, and Cary, United States Bankruptcy Appellate Panel Judges.


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          Cary, U.S. Bankruptcy Appellate Panel Judge.

         Peter J. Porcaro (" Porcaro" ), a home improvement contractor, appeals from a bankruptcy court order granting summary

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judgment in favor of judgment creditors, Michael O'Rorke and Beth O'Rorke (collectively, the " O'Rorkes" ),[1] and a bankruptcy court order denying his motion for summary judgment (collectively, the " Orders" ). On appeal, Porcaro contends that entering summary judgment in the § 523(a)(6) proceeding was error because the bankruptcy court incorrectly afforded preclusive effect to the O'Rorkes' pre-bankruptcy, state court judgment.[2] For the reasons discussed below, we AFFIRM the Orders.


         I. Pre-Bankruptcy Events

         In August 2004, the O'Rorkes hired Porcaro to install eleven replacement windows in their Westborough, Massachusetts home. The contract they entered into required Porcaro to install screens, locks, and custom-made " Majesty" windows, and to dispose of the old windows. The O'Rorkes were to pay him $19,100.00 in the following installments: an initial deposit of $6,366.00; an additional installment of $10,000.00 upon delivery of the windows; and a final payment of the remaining $2,734.00 balance upon completion.

         Porcaro retained Paul Meredith (" Meredith" ), an installation subcontractor, to do the work at the O'Rorkes' home. Although the job required a permit, Porcaro did not obtain one. When Meredith arrived to perform the work, he noticed that the new windows were approximately 3/4 of an inch too small for the window openings. When he asked Porcaro about this, Porcaro instructed him to proceed with the window installation. Meredith did as he was told.

         When the installation was complete, the O'Rorkes paid Porcaro all but $200.00 of the contract price, which they withheld due to minor screen damage. When Porcaro refused to pay Meredith for the work, Meredith informed the O'Rorkes about the problem with the windows.

         A. The Arbitration

         Thereafter, the parties submitted to arbitration through the Commonwealth of Massachusetts Contractor Home Improvement Arbitration Program. Additionally, the O'Rorkes made a demand upon Porcaro pursuant to Mass. Gen. Laws ch. 93A (" Ch. 93A" ). After a hearing conducted on June 7, 2005, the arbitrator found that Porcaro had installed windows that were too small and awarded the O'Rorkes $11,300.00 in damages, which sum included $9,000.00 to cover the estimated cost of new replacement windows and $2,300.00 for " patchwork."

         B. State Court Proceedings

         Porcaro appealed the arbitrator's decision by filing a complaint with the Commonwealth of Massachusetts Trial Court, District Court Department, Westborough Division, alleging breach of contract, malicious prosecution, conspiracy to breach a contract, and breach of the covenant of good faith and fair dealing. The O'Rorkes counterclaimed for breach of contract and violations of Ch. 93A. In February 2007, the case was transferred to the Marlborough Division.

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          In March 2007, the trial judge conducted a two-day bench trial. This appeal was not limited to a narrow review of the arbitration award but, rather, was by statute a de novo proceeding, designed to resemble an original trial court action more than an ordinary appeal. See Mass. Gen. Laws ch. 142A, § 4(e). Both parties presented evidence, including expert testimony.

         Porcaro appeared pro se, and, in addition to calling witnesses, testified on his own behalf. The trial yielded approximately 800 pages of documents and testimony. Meredith testified, on behalf of the O'Rorkes, that during the installation, he discovered every window that was going to be installed was too small for the window openings. In fact, one of the windows almost fell through the opening. He knew this meant he would be unable to properly install the windows. He testified he informed Porcaro that the windows were not the correct size, that they should not be installed, and that he wanted to re-install the old windows until they could order the right size. He further testified that instead of ordering the correct windows, Porcaro directed him, without the O'Rorkes' knowledge, to install the incorrect windows by filling the gaps with wood, a technique called " blocking." When Meredith told Porcaro that he did not have any wood to fill in the gaps, Porcaro responded, " I'll bring you some." According to Meredith, Porcaro threatened to withhold payment if he mentioned anything about it to the O'Rorkes. Meredith also testified Porcaro took affirmative steps to conceal the improper installation from the O'Rorkes by installing wider casings than had originally been used around the windows.

         Robert Jeffrey Stevenson (" Stevenson" ), a contractor who had previously worked for Michael O'Rorke's company, provided expert witness testimony for the O'Rorkes, stating he had examined the windows and determined they were too small and installed incorrectly. According to Stevenson, when he took the casings off one of the windows, placed his hand in the center of the window, and pushed with little effort, " the window moved about an inch." He also testified that a newly constructed window would need to be installed because the original window frame had been cut, removed, or otherwise altered. The blocking which was installed at Porcaro's direction would have to be removed, as well as what was left of the original window frames, and the siding would need further repair. Stevenson went on to testify, without objection by Porcaro, that the cost to put the O'Rorkes in as good a position as they would have been had Porcaro installed the windows properly would be $20,000.00. He stated: " I'm going to just shoot from the hip, I would say probably about twenty grand, probably a shade more."

         In rebuttal, Porcaro's expert, Peter F. DePesa (" DePesa" ), a contractor and former building inspector for the town of Andover, Massachusetts, testified that the windows were installed correctly, and that when he inspected the subject windows he " saw no old filler wood." He further testified that the " job look[ed] good . . . ." In response to an inquiry from the bench, he explained that if the windows were too small, it " [a]bsolutely would be visible." DePesa also opined that in the O'Rorkes' house, the rough openings were off " and that's why they put the filler in." With respect to the permit issue, DePesa explained that it was discretionary with local building inspectors whether to require a building permit for window replacement.

         In a written opinion issued on March 26, 2007, and revised on April 12, 2007 (the " State Court Decision" ), the trial judge decided in favor of the O'Rorkes, awarding

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them $20,000.00 in damages as the replacement cost for the eleven windows, which he trebled, in accordance with Ch. 93A, to $60,000.00, plus interest, attorneys' fees, and costs. The trial judge prefaced his findings with the observation that the " [i]nstallation of windows that are too small creates a danger of water and other damage." He went on to state:

With regard to [Porcaro's] Complaint, I find that the evidence I heard supports many of the arbitrator's findings. I find that [Porcaro] wil[l]fully failed to obtain a necessary building permit and wil[l]fully had windows installed in [the O'Rorkes'] home which he knew to be too small for the openings. I do not find that [the O'Rorkes] breached their contract with [Porcaro] and I do not find that there was any conspiracy between [the O'Rorkes] and Meredith to breach the contract. [The O'Rorkes] had every reason to send [Porcaro] a [Ch. 93A] demand letter; [Porcaro's] Counts for malicious prosecution and breach of the covenant of good faith and fair dealing are frivolous.
Judgment shall enter for [the O'Rorkes] on all Counts of [Porcaro's] Complaint.
With regard to the counterclaims, I find that [Porcaro] breached the contract by having windows installed which did not properly fit. In addition, I find that [Porcaro] violated [Ch.] 93A in two respects. First, the failure to obtain a building permit is a violation of G.L. c. 142A, s.2 and is a per se violation of [Ch. 93A]. Second, the knowing and wil[l]ful violation of the contract by installing windows of an improper size is as egregious a violation of consumer protection laws as there can be. The evidence I heard supports a larger damage award than given by the arbitrator.
Judgment shall enter for [the O'Rorkes] on their Counterclaim for $20,000 which shall be trebled to $60,000 plus applicable interest and costs.
After hearing, I award attorneys' fees and costs in the amount of $20,269.93 as requested in the attorneys' fee application and its supplement.

(footnote omitted).

         On April 12, 2007, the Marlborough district court entered judgment against Porcaro in the amount of $84,320.34. Porcaro moved for a new trial and the motion was denied. Thereafter, Porcaro appealed to the Commonwealth of Massachusetts Appellate Division of the District Court Department Northern District (the " Appellate Division" ). On September 25, 2008, a three-judge panel of the Appellate Division issued an eleven-page opinion, and a Decision and Order affirming the judgment of the state court and dismissing Porcaro's appeal. Porcaro v. O'Rourke, 2008 Mass.App.Div. 218 (2008).

         On November 17, 2008, Porcaro filed his third appeal, which resulted in the affirmance of the Decision and Order of the Appellate Division in December 2009.

         The Appeals Court ruled:

Our review of the parties' written submissions and the record on appeal persuades us that [Porcaro's] claims are without merit. Moreover, these claims were satisfactorily addressed in the thoughtful and comprehensive decision of the Appellate Division of the District Court department. No error or other abuse of discretion having been made to appear, we discern no basis on which to disturb the judgment on appeal.

Porcaro v. O'Rorke, 75 Mass.App.Ct. 1116, 918 N.E.2d 97, at *1 (2009).

         On December 29, 2009, Porcaro filed an Application for Further Appellate Review to the Supreme Judicial Court, which it denied on January 27, 2010. Porcaro v.

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O'Rourke, 455 Mass. 1109, 920 N.E.2d 878 (2010).

         II. Bankruptcy Court Proceedings

         In October 2010, Porcaro filed a voluntary petition for chapter 7 relief in the United States Bankruptcy Court for the District of Massachusetts. On his Schedule D-Creditors Holding Secured Claims, Porcaro listed the O'Rorkes as the holders of a $100,000.00 disputed judicial lien on real estate located at 320 Putnam Hill Road, Sutton, Massachusetts.

         In January 2011, the O'Rorkes commenced the adversary proceeding which is the subject of this appeal with a single-count complaint, wherein they objected to the discharge of Porcaro's judgment debt pursuant to ...

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