Most Complaints objecting to
dischargeability of a debt includes 523(a)(6) include a
"catchall" count. We've been successful in knocking out
that count in almost every case. Regarding intent
and how to prove it, the best advice I can offer is
to use
Kawaauhau v.
Geiger, 523
U.S.
57, 140 L.Ed.2d 90, 118 S.Ct. 974 (1998) as your guide.
The Supreme Court held that the actor needed to be aware
that the conduct was not only wrongful, but also would
necessarily cause the
injury in question to rise to the "willful and
malicious" standard. Since Geiger, most courts
have used a subjective approach to determine the
intention required for "willfulness." In re
Moore, 357 F.3d 1125 (10th Cir.
2004); In re Su, 290 F.3d 1140 (9th Cir. 2002);
In re Markowitz, 190 F.3d 455 (6th Cir. 1999).
Collateral Estoppel principles:
The Supreme Court has held that “collateral estoppel
principles do indeed apply in discharge exception
proceedings pursuant to §523(a).” Grogan v. Garner,
498 U.S. 279, 285 fn. 11, 111 S.Ct. 654 (1991). In
the Ninth Circuit, collateral estoppel principles are
applied in nondischargeability litigation to the extent
that they would apply were the litigation being held in
a court of the state where the original judgment was
entered. In re Nourbakhsh, 67 F.3d 798, 800 (9th
Cir. 1995), citing, Marrese v. American Academy of
Orthopaedic Surgeons, 470 U.S. 373, 380 (1985) This
is true, in the Ninth Circuit, even in default cases.
Nourbaksh, supra, 67 F.3d at 800.
It appears that most states find collateral estoppel should
be applied where (1) there is indentity of the parties, (2)
the issues are identical, and (3) the matter has been
litigated to final conclusion. See, e.g.,
Trucking Employees of North Jersey Welfare Fund,
Inc. v. Romano,
450 So.2d 843, 845 (Fla. 1984);
Mobil Oil Corp. v. Shevin, 354 So.2d
372, 374 (Fla. 1977). Other states sometimes add that the
issue must be "necessarily" decided in the prior litigation,
and also be "decisive." See, e.g., Buechel v.
Bain, 97 N.Y.2d 295, 303, 740 N.Y.S.2d 252, 766 N.E.2d
914 (2001).
Griffin v. Wardrobe, No. 07-16635
U.S. 9th Circuit Court of Appeals, March 16, 2009
In an action to declare a state judgment for fraud
non-dischargeable in bankruptcy, summary judgment for
Plaintiff is reversed, where the state court improperly
allowed Plaintiff to amend her complaint in violation of
the automatic stay under the Bankruptcy Code. The stay
had been lifted for the sole purpose of the Movant
pursuing the Debtor’s bond.
Lockerby v. Sierra, No. 06-15928
U.S. 9th Circuit Court of Appeals, August
07, 2008
In the bankruptcy context, an intentional breach of
contract cannot give rise to nondischargeability under
11 U.S.C. section 523(a)(6) unless it is accompanied by
conduct that constitutes a tort under state law.
Read more...
CREDITOR WITH
NONDISCHARGEABLE DEBT CAN COLLECT INTEREST FOLLOWING
CHAPTER 13 DISCHARGE In re Foster, ___ F.3d
___ (9th Cir. 2003) – Feb. 8, 2003 Debtor's chapter 13
plan provided for full payment of delinquent
non-dischargeable child support. Debtor completed the plan
and was granted a discharge. Subsequently, Ventura County
District Attorney went after debtor for the accumulated
interest that was not paid through the plan. Held, plan
could not provide for payment of interest, and creditor
could collect unpaid interest following discharge. This is
the majority rule.
A claim for post-petition
interest on a debt not dischargeable in Chapter 13 under 11
U.S.C. § 1328(a) is not part of the bankruptcy estate because
such unmatured interest was not part of the debt as of the
date of filing the petition. Thus, a creditor cannot insist on
interest being paid through the plan. And, the Code does not
explicitly prohibit collection of post-petition interest after
a debtor completes a confirmed chapter 13 plan.
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