A § 526(a)(6) action was brought against the debtor to determine the dischargeability of a debt that arose from a U.S. District Court jury verdict finding that the debtor had used excessive force that resulted in a man's death. Based on the facts entered into evidence, the Court found that the plaintiffs did not meet their burden of proving a willful and malicious injury under § 523(a)(6). Accordingly, the debt is eligible for discharge.
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Opinions
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Judge Ben T. Barry
The underlying adversary proceeding is based on an alleged violation of the automatic stay; specifically, the defendant filed a motion for incarceration of the debtor during the pendency of the debtor’s bankruptcy case. The court denied the movant’s motion for summary judgment because there remained questions of fact for the court to determine whether the motion for incarceration was a continuation of a state court civil contempt action or whether the motion changed the nature of the civil contempt action to criminal contempt, either in whole or in part.
The debtor's sons objected to the chapter 7 trustee's motion to sell property, arguing that the property was held in a resulting trust for the benefit of one of the sons and, therefore, the subject property was not property of the estate. The Court found that while a resulting trust had been established, it was later terminated. Accordingly, the Court found that the subject property was property of the estate and granted the trustee's motion to sell.
Payment of rent from an account that was closed six months earlier amounted to a false representation made with the intent to deceive the creditor/landlord. The court found the debt for unpaid rent to be nondischargeable under § 523(a)(2).
James G. Mixon
Recording of the lease between the debtor and city provided constructive notice of debtor's pre-bankruptcy conveyance of property to the city and a repurchase option; state agency's subsequent recording of mortgage in the debtor's equitable interest in the property precluded Chapter 7 trustee from becoming a hypothetical bona fide purchaser entitled to avoid state agency's mortgage lien.
When a Chapter 13 plan has not been confirmed and the case is then dismissed, the court held that the Chapter 13 Trustee is subject to a properly issued writ of garnishment or levy by a judgment creditor or taxing entity. Therefore, the Chapter 13 Trustee's objection to the garnishment was overruled and the Chapter 13 Trustee was ordered to turn over all the sums in his possession to the Plaintiff that were not needed for administrative expenses.
After the Debtors' case was dismissed without plan confirmation, the Court found that the Chapter 13 Trustee was subject to a properly issued writ of garnishment.
The Court ruled that pursuant to the dictates of § 523(a)(4) the state court judgment for damage to Clear Sky property is nondischargeable; however, the state court award for breach of fiduciary duty regarding past and future lost revenue and the award to Deere for breach of fiduciary duty is dischargeable because there is no definable res, a requirement of a statutory trust for purposes of § 523(a)(4). Pursuant to § 523(a)(6), the punitive damage award is dischargeable because the Plaintiffs did not prove the state court award was a result of both willful and malicious injury. The attorneys fees and costs are dischargeable because they were based on breach of contract.
Judge Richard D. Taylor
Successful state court action did not satisfactorily translate, on the basis of collateral estoppel, to a denial of discharge or determination of dischargeability. The elements of each discharge-related cause of action were not proven. The underlying judgment related to misappropriation of assets and did not mirror the required elements.
Debtors may not involuntarily include a post-petition section 1305 creditor by filing a proof of claim on its behalf. Further, the res judicata effect espoused in Espinosa must be viewed in the context of the plan, confirmation order, and relevant code provisions.