Shaw v. Osborne, 604 B.R. 582

Plaintiff Shaw sustained Stevens-Johnson Syndrome/TEN after a nurse practitioner (Julie Sanders) prescribed escalating doses of lamotrigine with dosing above manufacturer warnings.
Debtor Osborne was Medical Director at River Edge and signed a Nurse Protocol Agreement delegating prescribing authority to Sanders and assuming supervisory/training responsibilities.
Shaw sued in state court for malpractice, then Debtor filed Chapter 7 bankruptcy; Shaw brought an adversary to except her claim from discharge under 11 U.S.C. § 523(a)(6) and § 523(a)(2)(A).
Osborne admits the prescription was inappropriate but denies personal involvement, asserting she did not treat Shaw and was unaware Sanders treated Shaw until after the injury.
Court granted summary judgment for Osborne on the § 523(a)(6) (willful and malicious injury) claim, finding only recklessness/negligence; denied summary judgment on § 523(a)(2)(A) (fraud) because triable issues exist about agency, vicarious fraud, reliance, and whether Osborne received benefit.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether debt is nondischargeable under § 523(a)(6) (willful and malicious injury)	Osborne’s failure to train/supervise as Medical Director was willful/malicious and substantially certain to cause Shaw’s injuries	Osborne lacked intent/knowledge; at most negligent or reckless supervision and no personal involvement with Shaw’s treatment	Judgment for Osborne on § 523(a)(6): plaintiff’s evidence shows, at best, recklessness/negligence, not the intent/substantial-certainty required for § 523(a)(6)
Whether debt is nondischargeable under § 523(a)(2)(A) (fraudulent misrepresentation)	Sanders falsely represented herself as a doctor and induced Shaw’s reliance; Sanders’ fraud can be imputed to Osborne under agency/principal liability; Osborne benefited because Shaw paid for treatment at River Edge	Osborne denies agency and that she personally made fraudulent representations or directly received Shaw’s payments	Summary judgment denied as to § 523(a)(2)(A): genuine issues of material fact remain about agency, whether Sanders’ representations can be imputed, justifiable reliance, and whether Osborne received a benefit

Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting framework)
Anderson v. Liberty Lobby, 477 U.S. 242 (evidence and inferences at summary judgment)
Grogan v. Garner, 498 U.S. 279 (preponderance standard for nondischargeability)
Kawaauhau v. Geiger, 523 U.S. 57 (§ 523(a)(6) requires intent to cause injury; recklessness insufficient)
In re Jennings, 670 F.3d 1329 (Eleventh Circuit description of willfulness and maliciousness under § 523(a)(6))
Hope v. Walker (In re Walker), 48 F.3d 1161 (foreseeability insufficient for substantial-certainty under § 523(a)(6))
HSSM #7 Ltd. P’ship v. Bilzerian (In re Bilzerian), 100 F.3d 886 (Eleventh Circuit adopts "receipt of benefits" theory under § 523(a)(2)(A))
Navy Fed. Credit Union v. Purse (In re Purse), 537 B.R. 28 (reckless disregard can support nondischargeability under § 523(a)(2)(A))