Lewis v. Long (In re Long)

528 B.R. 655

In re : Clyde A. Long, Jr., and Latoya L. Long, Debtors.

Crystal D. Lewis, Plaintiff

v.Clyde A. Long, Jr., Defendant.

Case No. 13–60044

Adversary Case No. 13–06030

United States Bankruptcy Court, W.D. Virginia, Lynchburg Division .

Signed April 22, 2015

J. Michael Sharman, Commonwealth Law Office, PC, Culpeper, VA, for Plaintiff.

Marshall Moore Slayton, Esq., Charlottesville, VA, for Defendant.

SUPPLEMENTAL OPINION CLARIFYING BANKRUPTCY COURT'S PRIOR OPINION

Rebecca B. Connelly, U.S. Bankruptcy Judge

The matter before the Court comes on the District Court's remand for clarification of the memorandum decision this Court published on January 28, 2014.¹ In that opinion, this Court granted the defendant's motion for partial judgment on the pleadings, because the Court found that after the plaintiff rested her case, she had failed to meet her burden of proving by a preponderance of the evidence that the debt Mr. Clyde A. Long, Jr., owed her met the criteria required by Bankruptcy Code section 523(a)(6) to be excepted from discharge.² Particularly, the Court found that she had failed to make any showing of two of the necessary elements of section 523(a)(6). On remand, the District Court has posed the limited question of whether:

[T]he bankruptcy court disagreed with [the decisions of Doe v. Fleetwood³ and T.K. v. Love⁴ ] and concluded the required elements under § 523(a)(6) cannot be established by inference, or if it found that the decisions were distinguishable on their facts and that the requisite injury and intent could not be inferred from the evidence in this particular case.⁵

After review of the cases and the Court's prior decision, and as more fully set forth below, the Court clarifies that it disagrees with the rulings of the Alaska and Missouri courts in Fleetwood and Love .

DISCUSSION

a) The Fleetwood and Love Decisions

The District Court's request for clarification specifically cited two cases—Doe v. Fleetwood and T.K. v. Love . Accordingly, a basic understanding of the facts and reasoning from those cases is important. The Court will consider each in turn.

The Fleetwood case dealt with the dischargeability of a civil judgment against a chapter 7 debtor for sexual assault of a minor as well as intentional infliction of emotional distress, which the Superior Court of Palmer, Alaska, entered by default judgment.⁶ Thereafter, the court held a hearing to determine the amount of damages, at which Fleetwood and his attorney appeared and presented argument as to why the court should set aside its prior default judgment and hear argument in the case.⁷ Based on Fleetwood's arguments, the state court set aside the default judgment, and Fleetwood filed an answer to the complaint denying all allegations against him.⁸

After a contested hearing, at which Fleetwood appeared and represented himself, the court entered findings of fact and conclusions of law, in which it found by clear and convincing evidence that Fleetwood had sexually assaulted Doe and that he did so “intentionally and with reckless disregard for Doe's welfare.”⁹ Accordingly, the court entered judgment in Doe's favor and awarded her damages.¹⁰

Thereafter, Fleetwood petitioned for bankruptcy relief under chapter 7 of the Bankruptcy Code, at which time Doe initiated an adversary proceeding to declare the debt Fleetwood owed her nondischargeable under section 523(a)(6).¹¹ In analyzing the dischargeability of the debt, the bankruptcy court acknowledged Doe had the burden of establishing that “Fleetwood had a subjective motive to inflict injury or believe[d] that injury [was] substantially certain to result from his own conduct.”¹² The court then reasoned, however, “[w]here the damages arise from sexual abuse, willfulness is apparent because the subjective motive to inflict harm ‘is self evident [sic], either because the tortfeasor knows his conduct is certain or almost certain to cause harm, or because he should know and therefore the intent is inferred as a matter of law.’ ”¹³ The court then went on to discuss maliciousness, opining, “the nature of the wrongful act necessarily establishes malice because sexual abuse of a minor is inherently an intentional, wrongful act which unquestionably causes damage.”¹⁴ Accordingly, the bankruptcy court inferred both willfulness and malice based on the nature of Fleetwood's offense and declared the debts arising therefrom nondischargeable under section 523(a)(6).¹⁵

Next, and similarly, in the Love case, the bankruptcy court had to determine the dischargeability of a debt arising from the debtor's sexual molestation of a minor, upon the victim's motion for summary judgment.¹⁶ After a contested hearing at which Love was represented by an attorney, the Circuit Court of Laclede County, Missouri, convicted him of sexual misconduct in the first degree.¹⁷

Thereafter, Love petitioned for bankruptcy relief, and the creditor initiated an adversary proceeding against him to have the bankruptcy court declare the debt nondischargeable under section 523(a)(6).¹⁸ The court, in discussing the issue of Love's intent to harm the plaintiff, addressed willfulness and maliciousness separately.

First, in discussing willfulness, the court acknowledged the United States Supreme Court's mandate that “[t]he word ‘willful’ in (a)(6) modifies the word ‘injury,’ indicating that nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury.”¹⁹ Nevertheless, and without further explanation, the Love court held, “[t]hat Debtor's actions were intentional and deliberate is buttressed by the fact that he was convicted of sexually molesting four children.... There was nothing accidental or merely reckless about his actions.”²⁰

Similarly, in discussing maliciousness, the court reasoned that although “the pleadings, affidavits and exhibits on file may not demonstrate that the state court necessarily decided that Debtor intended to cause injury to Plaintiff or independently establish that fact,”²¹ “intent to harm is established as a result of Debtor's conviction because, given the nature of the crime, the conviction either establishes that the Debtor knew that his conduct was certain or almost certain to cause harm or permits the Court to infer harm as a matter of law.”²² Important to the Love court's ruling was the Eighth Circuit's decision in B.B. v. Continental Insurance Co., in which that court adopted an inferred-intent theory for sexual molestation in the context of whether a homeowner's insurance policy would indemnify the insured from a civil judgment for child molestation.²³ Accordingly, the Love court determined the civil debt Love owed to the creditor was nondischargeable as a matter of law.²⁴

b) Ms. Lewis's Nondischargeability Suit

Ultimately, the Court disagrees with both of the aforementioned cases' reasoning,²⁵ as this Court does not believe that it may imply intent for the purposes of Bankruptcy Code section 523(a)(6), based on its understanding of the Supreme Court's ruling in Kawaauhau v. Geiger . In the case at bar, Ms. Lewis has relied upon several theories for establishing Mr. Long's intent. First, at the hearing, counsel for Ms. Lewis seemed to suggest Mr. Long's intent was not relevant at all to the question of dischargeability.²⁶ Later in the hearing, after the Court ruled that Mr. Long's intent was relevant to the controversy, Ms. Lewis's counsel asserted the doctrine of collateral estoppel established Mr. Long's intent as a matter of law.²⁷ Now, upon appeal, Ms. Lewis appears to have abandoned these theories entirely and, instead, relies solely upon the argument that the nature of Mr. Long's offense necessarily implies his intent to willfully and maliciously cause an injury.²⁸ Based on the posture of the case and limited scope of the remand, however, the Court will only clarify its opinion with respect to Ms. Lewis's current assertion that the Court must imply intent in strict liability instances under section 523(a)(6).

As enacted by Congress, section 523(a)(6) expressly states, “[a] discharge [under specific provisions of this title] ... does not discharge an individual debtor from any debt ... for willful and malicious injury by the debtor to another entity or to the property of another entity.”²⁹ Thus, the statute expressly requires, without qualification, the moving party to demonstrate by a preponderance of the evidence that any resultant injury stems from the debtor's willful and malicious intent to injure.³⁰

Indeed, as mentioned above, in analyzing this provision, the Supreme Court of the United States explained:

The word “willful” in (a)(6) modifies the word “injury,” indicating that nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury. Had Congress meant to exempt debts resulting from unintentionally inflicted injuries, it might have described instead “willful acts that cause injury.” Or, Congress might have selected an additional word or words, i.e., “reckless” or “negligent,” to modify “injury.” Moreover, ... the (a)(6) formulation triggers in the lawyer's mind the category “intentional torts,” as distinguished from negligent or reckless torts. Intentional torts generally require that the actor intend “the consequences of an act,” not simply “the act itself.”³¹

This Court understands these statements to abrogate a bankruptcy court's discretion to infer or imply a debtor's intent to cause an injury based on his or her intent to act alone, regardless of the nature of the conduct.

Notably, the Supreme Court in Geiger specifically considered the question of whether the mere fact an actor's conduct was “deliberate” satisfied the requirements of section 523(a)(6) and ultimately held it did not. In that case, the movants sought to have a debt for a medical malpractice judgment deemed nondischargeable based on the fact that the doctor's actions were “intentional,” in that he deliberately acted...