March 26, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
A Chapter 7 debtor who was sued for assaulting a man outside a bar cannot discharge a $170,000 judgment obtained by the assault victim and his wife, an Ohio bankruptcy judge has ruled.
In re Music, No. 12-34772, Davis et al. v. Music, Adv. No. 13-3017, 2014 WL 1089849 (Bankr. N.D. Ohio Mar. 19, 2014).
Evidence presented in state court showed the debtor had committed a willful and malicious injury as defined by the Bankruptcy Code’s nondischargeability provisions, U.S. Bankruptcy Judge Mary Ann Whipple of the Northern District of Ohio said.
David Davis and his wife Connie Davis sued debtor Steven J. Music in state court in 2011 after an altercation outside a tavern that left David Davis with a broken eye socket and other injuries.
According to the opinion, the assault occurred after Music was kicked out of the establishment for aggressive behavior and Davis grabbed his arm while offering to take him home. State court trial documents cited by the Bankruptcy Court include witness testimony that Music was “extremely intoxicated,” had taken the painkiller Vicodin, struck Davis in the head at least twice and had no memory of the evening’s events before finding himself in a police custody.
The Davises sought damages for assault, negligence and loss of consortium, and a jury awarded compensatory and punitive damages of nearly $170,000 and a state-court judgment was entered in September 2012.
Music filed a petition for Chapter 7 relief in October 2012.
The Davises then filed an adversary proceeding seeking a determination that Music cannot discharge the debt in light of Section 523(a)(6) of the Bankruptcy Code, 11 U.S.C.A. § 523(a)(6), which excepts from Chapter 7 discharge debts incurred through “willful and malicious injury by the debtor to another entity or to the property of another entity.”
The plaintiffs moved for summary judgment, saying collateral estoppel, or issue preclusion, prevented Music from arguing in the Bankruptcy Court that he had not willfully and maliciously harmed Davis because the state court proceedings had resolved those issues.
Willful and malicious injury
Judge Whipple said an exception to discharge under Section 523(a)(6) must be based on a showing that the injury was both willful and malicious, and noted that recklessness or negligence does not justify an exception.
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