478 B.R. 476
Bankr. N.D. Ga.2012Background
- Adversary proceeding to determine dischargeability under 11 U.S.C. §1328(a)(4).
- Defendant moved to dismiss under Fed. R. Civ. P. 12(b)(6).
- Plaintiff asserts damages from willful or malicious injury causing personal injury, based on pending Georgia and California state actions.
- Georgia complaint includes Tortious Interference with Business Relations (injury to property), Defamation (personal injury), and punitive damages (personal injury).
- California complaint includes two property-based counts, IIED (personal injury), Defamation (personal injury), and conspiracy/aiding (vicarious liability).
- Court grants in part and denies in part Defendant’s motion, interpreting §1328(a)(4) to cover some personal-injury-based claims while allowing discharge for others.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §1328(a)(4) require a pre-petition award? | Award timing not required per Waag majority. | Award must predate petition per Byrd. | No pre-petition award requirement; award can postdate petition. |
| Are the alleged acts willful or malicious under §1328(a)(4)? | Allegations show intentional acts aimed at harming Plaintiff. | Allegations do not prove willful/malicious intent. | Allegations support willful or malicious conduct. |
| Does 'personal injury' under §1328(a)(4) include nonphysical injuries (e.g., defamation, IIED)? | Personal injury should include nonphysical harms. | Personal injury limited to physical harm. | Personal injury includes nonphysical injuries like defamation and IIED. |
| Is Georgia Count I (TIBR) personal injury or injury to property? | TIBR claims impact business relations (property-related). | TIBR injuries are personal injuries. | Count I of Georgia Complaint is injury to property; not within §1328(a)(4). |
| Which California Counts survive under §1328(a)(4)? | Counts asserting IIED and Defamation are personal injury; others are not. | Most California Counts are property-based. | Counts III (IIED) and IV (Defamation) survive; Counts I, II, V, VI dismissed. |
Key Cases Cited
- Parsons v. Byrd (In re Byrd), 388 B.R. 875 (Bankr.C.D. Ill. 2007) (disputes timing for award under §1328(a)(4))
- Waag v. Permann (In re Waag), 418 B.R. 373 (9th Cir. BAP 2009) (majority view allows post-petition awards under §1328(a)(4))
- In re Ice Cream Liquidation, Inc., 281 B.R. 154 (Bankr. D. Conn. 2002) (nonphysical injuries can be personal injury; informs scope of §1328(a)(4))
- Cohen v. de la Cruz, 523 U.S. 213 (1998) (treble/punitive-like damages relate to non-dischargeability principles)
- United States v. Burke, 504 U.S. 229 (1992) (historical understanding of personal injury torts)