First Weber Group, Incorporate v. Jonathan Horsfall
738 F.3d 767
| 7th Cir. | 2013Background
- Horsfall, a former First Weber agent, collected a commission on the Call property sale, triggering a Wisconsin state-court dispute with First Weber.
- First Weber asserted breach of contract, tortious interference, unjust enrichment, and, potentially, conversion; Horsfall left to form Picket Fence Realty.
- The Call Exclusive Right to Sell contract protected First Weber’s commissions from sales to a defined set of “protected buyers” for one year after listing expiry; Acostas were later deemed protected buyers.
- Horsfall resold the Call property to the Acostas through Picket Fence in October 2002, closing within the protection period and resulting in a $6,000 commission to Picket Fence.
- Wisconsin state court entered a judgment against Horsfall in January 2010 for $10,978.91 on several theories; Call’s debts were later discharged in bankruptcy.
- Horsfall filed for Chapter 7 bankruptcy in 2010; First Weber sought non-dischargeability under 11 U.S.C. §523(a)(6) for willful and malicious injury; bankruptcy and district courts ruled against First Weber, which appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Issue preclusion under §523(a)(6) | First Weber argues state judgment precludes all elements of willful/malicious injury. | Horsfall argues state court did not decide willfulness/malice as required for preclusion. | Issue preclusion applies to injury and maliciousness. |
| Dischargeability under §523(a)(6) | First Weber claims Horsfall’s actions were willful and malicious; discharge should be denied. | Horsfall contends no willful/malicious injury was proven; no issue preclusion on willfulness. | Willfulness not precluded; district court’s denial of discharge stands; judgment affirmed. |
| Evidentiary rulings on expert/other evidence | Exclusion of Staff’s testimony, membership evidence, and impeachment evidence prejudiced First Weber. | Rulings were within the bankruptcy court’s discretion and proper under rules of evidence. | No abuse of discretion; no new trial required. |
Key Cases Cited
- Allen v. McCurry, 449 U.S. 90 (1981) (preclusive effect of state judgments in federal court)
- Klingman v. Levinson, 831 F.2d 1292 (7th Cir. 1987) (application of collateral estoppel in bankruptcy)
- In re Davis, 638 F.3d 549 (7th Cir. 2011) (review of state-law issue-preclusion determinations in bankruptcy)
- Jendusa-Nicolai v. Larsen, 677 F.3d 320 (7th Cir. 2012) (definition of willfulness and malice under §523(a)(6) across circuits)
- Thirtyacre, 36 F.3d 697 (7th Cir. 1994) (definition of maliciousness under §523(a)(6))
- Geiger, 523 U.S. 57 (1998) (§523(a)(6) requires deliberate or intentional injury, not merely intentional act)
- Bukowski v. Patel, 266 B.R. 838 (E.D. Wis. 2001) (discusses willfulness in bankruptcy dischargeability)
- Mrozek v. Intra Fin. Corp., 699 N.W.2d 54 (Wis. 2005) (Wisconsin preclusion standards for issue preclusion)
- Briesemeister v. Lehner, 720 N.W.2d 531 (Wis. Ct. App. 2006) (elements of intentional interference)
- H.A. Friend & Co. v. Prof. Stationery, Inc., 720 N.W.2d 96 (Wis. Ct. App. 2006) (conversion as a basis for injury in Wisconsin law)
- Larsen v. Jendusa‑Nicolai, 442 B.R. 905 (E.D. Wis. 2010) (discusses injury and the relationship to §523(a)(6))