Parcels v. Gurzynski (In Re Gurzynski)
443 B.R. 777
Bankr. N.D. Ohio2010Background
- Defendant Gurzynski filed Chapter 7 bankruptcy.
- Plaintiff Parcels held a prepetition, noncontingent, liquidated claim from a state court judgment for $9,291.85 plus interest
- State court found Gurzynski liable for conversion of Parcels' personal property, with no punitive damages or attorney fees awarded
- Judgment entered April 26, 2006 in Wood County, Ohio, based on greater weight of evidence
- Parcels filed complaint seeking nondischargeability under §523(a)(2)(A) and §523(a)(6); moved for summary judgment on §523(a)(6) only
- Bankruptcy Court denied Parcels’ motion for summary judgment on the §523(a)(6) issue
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §523(a)(6) nondischargeability requires willful and malicious injury | Parcels asserts willful and malicious conduct by Gurzynski | Gurzynski contests the required mental state | SJ denied; state of mind must be evaluated at trial |
| Is summary judgment appropriate given credibility/intent issues | SJ is appropriate to resolve nondischargeability | Issues require credibility assessment at trial | SJ denied; trial needed to assess intent |
| Does state-law conversion finding alone establish malice under §523(a)(6) | Conversion supports nondischargeability | Conversion alone not enough without malicious intent | Not dispositive; malicious intent must be shown; trial needed |
| Can the court rely on the state-court findings to resolve §523(a)(6) dispute | State court findings prove willful/malicious conduct | State findings do not automatically convert to nondischargeability | State findings insufficient without evaluating debtor’s intent; cannot grant SJ |
| Does absence of punitive damages in state court affect §523(a)(6) analysis | Crucial to establish malice | Punitive damages absence does not negate malice | Not determinative; malice requires separate showing; SJ inappropriate |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (1991) (establishes policy of discharging honest but unfortunate debtors; §523(a)(6) exception at issue)
- Kawaauhau v. Geiger, 523 U.S. 57 (1998) (not every tort conversion is nondischargeable; negligent acts not enough)
- Knowles v. McGuckin, 418 B.R. 251 (2009) (willful and malicious elements are distinct; mental state required)