Heyerholm v. Johnson, 667 B.R. 713

Plaintiffs (the Heyerholms) sought to have a debt related to a boating accident injury deemed nondischargeable in bankruptcy under 11 U.S.C. § 523(a)(6), arguing the injury was willful and malicious.
Defendants (the Johnsons) owned a boat; during an August 2021 wakeboarding outing, Jonah Heyerholm was struck by the boat's propeller and seriously injured.
The boat had a prior issue with remaining in gear, corrected by Johnson in 2019, well before the accident.
At trial, the court found the Johnsons' conduct was "willful" but not "malicious." The district court affirmed the willfulness finding, but remanded for reconsideration of maliciousness under the correct legal standard.
The legal dispute centered around whether Defendants acted with conscious disregard for their duties or without just cause or excuse given the circumstances of the accident.
The court, on remand, analyzed trial testimony, the boating manual, and relevant case law, ultimately finding the conduct not malicious under § 523(a)(6).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether willful conduct automatically equals malicious conduct under § 523(a)(6)	Willfulness implies intentional torts, which must be malicious	Willfulness and maliciousness are distinct; not all willful acts are malicious	Willfulness does not mandate maliciousness; separate analysis required
Whether Johnsons consciously disregarded their duty of care	Past boat transmission issues implied continuing risk; failure to meet boating safety tips	Transmission issue was resolved in 2019; acted to avoid harm in choppy conditions	No conscious disregard; Johnsons acted reasonably under the circumstances
Whether Johnsons acted without just cause or excuse	Alleged ignored risk amounted to lack of just cause/excuse	Good faith judgment to move boat to protect Jonah; actions were reasonable	Johnsons acted with just cause/excuse in response to environmental risk
Relevance of lack of insurance as evidence of maliciousness	No insurance shows further disregard for safety	Not required by law; irrelevant to nondischargeability	Lack of insurance not relevant to maliciousness determination

First Weber Grp., Inc. v. Horsfall, 738 F.3d 767 (7th Cir. 2013) (distinguished between "willful" and "malicious" under § 523(a)(6), and found issue preclusion where state court found conduct unjustified)
In re Calvert, 913 F.3d 697 (7th Cir. 2019) (affirmed "maliciousness" includes conscious disregard or lack of just cause/excuse)
Kawaauhau v. Geiger, 523 U.S. 57 (1998) (intentional torts under § 523(a)(6) require intent to cause injury or belief it is substantially certain)
Ewaskowitz v. Murdock, 393 N.W.2d 547 (Wis. Ct. App. 1986) (intentional tort requires intent to injure or belief injury is substantially certain)
Rockweit v. Senecal, 541 N.W.2d 742 (Wis. 1995) (standard of ordinary care applies in all activities)
Strenke v. Hogner, 694 N.W.2d 296 (Wis. 2005) (punitive damages for intentional or criminal disregard of safety)
Wischer v. Mitsubishi Heavy Indus. Am., Inc., 694 N.W.2d 320 (Wis. 2005) (substantial evidence of intentional disregard required for punitive damages)