Summary
providing an in depth analysis of the willful requirement under § 523 in light of the Kawaauhau case
Summary of this case from In re MoffittOpinion
Bankruptcy No. 98-3142.
November 25, 1998.
David J. Chernosky, Cleveland, OH, for Plaintiffs.
Herbert E. Adams, Fremont, OH, for Defendant.
MEMORANDUM OPINION AND DECISION
This cause comes before the Court upon the Plaintiffs' Motion for Summary Judgment, and Memorandum in Support; and the Defendant's Response to the Plaintiffs' Motion, and Memorandum in Support. This Court has reviewed the arguments of Counsel, the exhibits, as well as the entire record of the case. Based upon that review, and for the following reasons, the Court finds that the Plaintiffs' Motion for Summary Judgment should be GRANTED; and the Plaintiffs' claim against the Defendant in the amount of Twenty-three Thousand Seven Hundred Twenty-four and 86/100 Dollars ($23,724.86) is nondischargeable pursuant to 11 U.S.C. § 523(a)(6).
FACTS
On March 5, 1998, the Defendant/Debtor, Ira L. Chapman (hereinafter Debtor) filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code. Ann Pickens, the Co-Plaintiff in this action (hereinafter Ms. Pickens), was listed in the Debtor's bankruptcy schedules as a party holding an unsecured nonpriority claim. This adversarial proceeding was subsequently brought on June 18, 1998, to have this claim determined nondischargeable under 11 U.S.C. § 523(a)(6) on the basis that the claim arose from willful and malicious conduct.
The events giving rise to this adversarial proceeding stem from an automobile accident that occurred between the Debtor and Ms. Pickens. The Parties' version of events immediately prior to the accident conflict with one another, but this much seems true. In the earlier afternoon hours on June 20, 1996, both the Debtor and Ms. Pickens were traveling north in their respective vehicles on a township road in Hancock County, Ohio. After going some distance the Debtor, who was directly in front of Ms. Pickens, abruptly stopped his vehicle. Immediately thereafter, the Debtor placed his vehicle into reverse, and collided with the front of Ms. Pickens' vehicle. The force and speed of the impact caused Ms. Pickens' vehicle to sustain heavy front end damage. In addition, Ms. Pickens suffered injuries to her shoulder and neck as a result of the collision. The Debtor's vehicle only sustained light damage.
A short time after the collision, a deputy and a sergeant from the Hancock County Sheriff's Office were dispatched to the accident scene at which time statements were taken from both of the Parties. The Debtor's version of events was that Ms. Pickens had come up behind him at a high rate of speed, and struck the rear end of his vehicle. On the other hand, Ms. Pickens' account of events was that the Debtor had rammed his car into her vehicle after abruptly stopping in front of her. In addition, an on-site investigation of the accident scene was conducted by the Police Officers in which the general layout of the vehicles was noted, along with other matters such as the location of tire marks, debris and engine fluids. Thereafter, it was decided by the Sheriff's Office to commence a criminal investigation into the matter since the evidence discerned at the accident scene comported with Ms. Pickens' version of events.
The criminal investigation eventually yielded an eyewitness to the accident who corroborated Ms. Pickens' story. In addition, the investigation also uncovered that beginning in July of 1994 the Debtor and Ms. Pickens had been involved in a relationship which, for reasons not relevant in this proceeding, came to an abrupt end in January of 1996. Moreover, the investigation revealed that after the Parties' relationship had ended various disparaging incidents had taken place between the Debtor and Ms. Pickens which, regardless of their veracity, certainly created an atmosphere of animosity between the Parties. Sometime later, the findings from the criminal investigation were turned over to the Hancock County Prosecutor's Office, who in turn prosecuted the Debtor for Felonious Assault under O.R.C. § 2903.11. The Debtor was subsequently found guilty of the charge, and ordered to pay Ms. Pickens restitution.
Eventually it was determined that the damage to Ms. Pickens vehicle totaled Four Thousand Six Hundred Sixty-Nine and 73/100 Dollars ($4,669.73), with an additional Nineteen Thousand Fifty-five and 13/100 Dollars ($19,055.13) in damages being incurred by Ms. Pickens for her personal injuries. Grange Mutual Insurance Company (hereinafter Grange Mutual), the other Co-Plaintiff in this action, indemnified Ms. Pickens for all these costs pursuant to a policy of insurance affording medical and uninsured motorist coverage. Now Grange Mutual, as a subrogee to any claim Ms. Pickens may have against the Debtor for the automobile accident, asserts that any amount the Debtor is found to owe Ms. Pickens should be determined a nondischargeable debt pursuant to 11 U.S.C. § 523(a)(6).
LAW
Section 523(a) of the Bankruptcy Code provides in pertinent part:
(a) A discharge under section 727, 1141, 1228[a] 1228(b), or 1328(b) of this section does not discharge an individual debtor from any debt —
(6) for willful and malicious injury by the debtor to another entity or to the property of another entity.
DISCUSSION
Under 28 U.S.C. § 157(b)(2)(I), a determination as to the dischargeability of a particular debt is a core proceeding. Thus, this matter is a core proceeding.
The Plaintiffs' Complaint to determine the dischargeability of the Defendant's Debt comes before the Court upon the Plaintiffs' Summary Judgment Motion. The standard for a summary judgment motion is set forth in Fed.R.Civ.P. 56, which is made applicable to this proceeding by Bankruptcy Rule 7056, and provides in pertinent part: A movant will prevail on a motion for summary judgment if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In order to prevail, the movant must demonstrate all the elements of the cause of action. R.E. Cruise, Inc. v. Bruggeman, 508 F.2d 415, 416 (6th Cir. 1975). When a party contests the dischargeability of a debt under § 523(a)(6) this entails establishing that there are no triable issues regarding whether the debtor's conduct was both willful and malicious. Grogan v. Garner, 498 U.S. 279, 286, 111 S.Ct. 654, 659, 112 L.Ed.2d 755 (1991); Perkins v. Scharffe, 817 F.2d 392, 394 (6th Cir. 1987); In re Clayburn, 67 B.R. 522 (Bankr.N.D.Ohio 1986). However, upon the moving party meeting the foregoing burden, the nonmoving party may not thereafter rest on his pleadings, but is instead required to set forth specific facts showing there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). In making the determination of whether the parties have met their respective burdens, the Court is directed to view all facts in the light most favorable to the party opposing the summary judgment motion. Matsushita v. Zenith Radio Corp., 475 U.S. 574, 586-588, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); see also In re Bell, 181 B.R. 311 (Bankr.N.D.Ohio 1995).
The essence of the Plaintiffs' argument holds that the adjudication of the Debtor's guilt under O.R.C. § 2903.11 for Felonious Assault, in connection with the automobile accident with Ms. Pickens, conclusively establishes that the Debtor's conduct was both willful and malicious pursuant to § 523(a)(6). The Court does agree that on its face a conviction for Felonious Assault would seem to give rise to the type of behavior that would bar a debtor's discharge under § 523(a)(6). However, the Plaintiffs do not specify under what legal standard they make their allegation. Specifically, this Court does not know whether the Plaintiffs are asserting that the Debtor is collaterally estopped by the state court conviction from contesting the dischargeability of his debt, or whether the Plaintiffs are asserting that the Debtor's conviction for Felonious Assault under O.R.C. § 2903.11, together with the evidence used to sustain the conviction, is by itself conclusive evidence of willful and malicious conduct for purposes of § 523(a)(6). Nonetheless, this lack of specificity is not fatal to the Plaintiffs' case. Fed.R.Bankr.P. 7008; Goodman v. Mr. Goodbuys of New York Corp., Inc., 164 B.R. 24, 27 (Bankr.E.D.N.Y. 1994). Consequently, the Court will examine each supposition separately and then rule accordingly.
COLLATERAL ESTOPPEL ANALYSIS
Collateral estoppel, also known as "issue preclusion," prevents the same parties or their privies from re-litigating facts and issues in a subsequent suit that were fully litigated in a prior suit. Thompson v. Wing, 70 Ohio St.3d 176, 183, 637 N.E.2d 917, 923 (1994). There is no question that collateral estoppel principles apply to bankruptcy proceedings, and can be used in nondischargeability actions to prevent re-litigation of issues already decided in a state court. Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). However, for the following reasons, the Court will not apply collateral estoppel to the Debtor's criminal conviction.
First, for this Court to apply the doctrine of collateral estoppel to a nondischargeability proceeding brought pursuant to § 523(a)(6), there must have been a specific finding of willful and malicious conduct in the state court proceeding based upon standards which are identical to those in the dischargeability proceedings. Spilman v. Harley, 656 F.2d 224, 226 (1981); see also Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654 (1991). However, this will not occur when incorporating the standards set forth in Ohio's Felonious Assault Statute, and the findings made therefrom, to a nondischargeability proceeding brought pursuant to § 523(a)(6). A close examination of Ohio's Felonious Assault Statute explains why.