Broussard v. Fields (In Re Fields)Broussard v. Fields (In Re Fields)
OPINION
Now before the Court is the adversary proceeding filed by Paul E. Broussard (“Plaintiff’), appearing pro se, against Glenn R. Fields (“Defendant”), who filed a petition for relief under Chapter 7 of the Bankruptcy Code on January 22,1996. 1 In his complaint, Plaintiff seeks to except from discharge a prepetition state court judgment (the “Judgment Debt”) rendered in favor of Plaintiff and against Defendant, resulting from a prepetition automobile accident caused by Defendant’s negligent driving. Plaintiffs complaint is reproduced as follows in its entirety because of its brevity and because Plaintiff is appearing pro se:
Bankruptcy, as I comprehend, relieves people from an overburden of debt. Glenn Fields only sought bankruptcy only when he discovered I was going to garnish his wages after a judgment was rendered to me for property damage and medical costs. The accident involved a hit and run and he had no liability insurance. He has also been notified to surrender his Driver’s License and License plate as of 4/12/96. According to the Department of Motor Vehicle, he has not done either. This is further proof that Glenn Fields has no respect for either Local or State Laws, but chooses to utilize the law for his irresponsible actions. We tried very hard to discuss this with Glenn Fields’ attorney and his immediate response was that Bankruptcy would be filed.
Attorney Westmoreland did not notify me or the courts about this Chapter 7. Michael Jackson, the attorney that represented me only in the negotiation of the settlement, notified Attorney Westmore-land that he was not the attorney representing me. Furthermore, I filed suit and my garnishment of wages without the assistance of an attorney. This should further prove that this is not being done in good faith. All documents were in my name and I feel that he should have notified me. All of the information I have provided you with is because I was persistent in contacting all parties involved on garnishment of wages and was finally told by Glenn Fields’ employer that the Bankruptcy Court had stopped the garnishments.
Your careful consideration of my adversary complaint is most appreciated. Respectfully Yours,
Paul Broussard, Jr.
The Court interpreted Plaintiffs complaint as asserting that the Judgment Debt should be excepted from discharge because, though the accident itself was caused by the Defendant’s negligence, the Defendant had intentionally driven without liability insurance required by Louisiana state law
(see
Trial was held on Plaintiffs complaint on August 9, 1996. Plaintiff appeared pro se, and Defendant’s attorney appeared on behalf of Defendant, who himself did not appear. At trial, the Court found that Plaintiff had a prepetition judgment against Defendant arising out of a prepetition accident, caused by Defendant’s negligent operation of his motor vehicle, in which Plaintiff sustained bodily injury and property damage. The Court also found that at the time of the accident, Defendant was intentionally driving his vehicle without statutorily-required liability insurance.
The issue before the Court is whether a debtor’s intentional failure to maintain statutorily-required liability insurance constitutes a “willful and malicious injury” under section 523(a)(6) of the Code, when a claimant has suffered an injury that would have been covered by the insurance required by state law, but is deprived of the recovery which would have been afforded against the insurer because of the debtor’s failure to carry the required insurance. Courts dealing with this issue have basically taken two approaches. The Eleventh Circuit in
In re Walker,
This Opinion is offered because since the trial of this complaint, the Fifth Circuit has issued
Corley v. Delaney (In re Delaney),
REASONS FOR RULING
A. Section 523(a)(6) of the Bankruptcy Code, its precursor, and the Fifth Circuit definition of “willful and malicious,” within the meaning of section 523(a)(6).
Within the
Delaney
opinion the Fifth Circuit, perhaps somewhat cavalierly in light of the definitions of “willful and malicious injury” that have seen the light of day through many court opinions, states: “As succinctly stated by a bankruptcy court in Georgia, ‘the plain language of Section 523(a)(6)’ excepts from discharge debts arising from ‘willful and malicious injury’ rather than ‘willful and malicious acts which cause an injury.’ ”
Delaney,
Section 17a(8) of the Bankruptcy Act, 11 U.S.C. section 35a(8), set forth the “willful and malicious injury” exception to discharge as follows:
Section 17. Debts Not Affected by a Discharge, a. A discharge in bankruptcy shall release a bankrupt from all of his provable debts, whether allowable in full or in part, except such as ... (8) are liabilities for willful and malicious injuries to the person or property of another other than conversion as expected [i.e. excepted] under clause (2) of this subdivision....
11 U.S.C. section 35a(8) (1898).
Although section 17a(8) of the Act set forth an exception to discharge for debts incurred through “willful and malicious injuries,” the provision did not set forth the
standard
for determining what exactly is required for an injury to be “willful and malicious,” within the meaning of section 17a(8). The Supreme Court attempted to answer this question in
Tinker v. Colwell,
In order to come within that meaning as a judgment for a wilful and malicious injury to person or property, it is not necessary that the cause of action be based upon special malice, so that without it the action could not be maintained .... The law will, as we think, imply that degree of malice in an act of the nature under consideration, which is sufficient to bring it within the exception mentioned. [W]e think that a wilful disregard of what one knows to be his duty, an act which is against good morals, an act likely to cause injury, and wrongful in and of itself, and which necessarily causes injury and is done intentionally, may be said to be done willfully and maliciously, so as to come within the exception.... It is urged that the malice referred to in the exception is malice towards the individual personally ... [but] we are not inclined to place such a narrow construction upon the language of the exception. We do not think that the language used was intended to limit the exception in any such way. It was an honest debtor, and not a malicious wrongdoer, that was to be discharged.
Id.,
The Supreme Court went on to hold that the language of the exception did not refer only to those injuries to person or property which were accompanied by particular malice, or with a malevolent purpose towards the injured person:
It is not necessary in the construction we give to the language of the exception in the statute to hold that every wilful act which is wrong implies malice. One who negligently drives through a crowded thoroughfare and negligently runs over an individual would not, as we suppose, be within the exception. True, he drives negligently, and that is a wrongful act, but he does not intentionally drive over the individual. If he intentionally did drive over him, it would certainly be malicious. It might be conceded that the language of the exception could be so construed as to make the exception refer only to those injuries to person or property which were accompanied by particular malice, or, in other words, a malevolent purpose towards the injured person, and where the action could only be maintained upon proof of the existence of such malice. But we do not think the fair meaning of the statute would thereby be carried out. The judgment here mentioned comes, as we think, within the language of the statute, reasonably construed ... for the law implies that there must be malice in the very act itself. ...
Id.,
Although the Supreme Court’s standard for “wilful and malicious injury” in section 17(a)(8) of the Bankruptcy Act did
not
set forth a “reckless disregard” standard as being sufficient to except a debt from discharge under section 17(a)(8), some courts subsequently interpreted the Supreme Court’s rationale in
Tinker
as providing that conduct entered into with reckless disregard to the rights of others that caused damage resulted in nondischargeable liability for “wilful and malicious injury” within the meaning of section 17(a)(8) of the Act.
See, e.g., Yackel v. Nys,
In 1978, with the enactment of the Bankruptcy Code, Congress specifically rejected what it thought was the “recklessness” standard of Tinker v. Colwell. The House Judiciary Committee’s Report stated as follows:
Paragraph (6) excepts debts for willful and malicious injury by the debtor to another person or to the property of another person. Under this paragraph, ‘willful’ means deliberate or intentional. To the extent that Tinker v. Coldwell [sic], 193 U.S. 473 [24 S.Ct. 505 ,48 L.Ed. 754 ] (1902), held that a looser standard is intended, and to the extent that other cases have relied on Tinker to apply a ‘reckless disregard’ standard, they are overruled.
H.R.Rep. No. 595, 95th Cong., 1st Sess. 365 (1977).
The Senate Report, which refers to section 523(a)(5) because S 2266 dealt with willful and malicious conversion or injury in section 523(a)(5), but which is applicable to section 523(a)(6) as well, stated as follows:
Paragraph (5) provides that debts for willful and malicious conversion or injury by the debtor to another entity or the property of another entity are nondischargeable. Under this paragraph ‘willful’ means deliberate or intentional. To the extent that Tinker v. Coldwell [sic],193 U.S. 473 [24 S.Ct. 505 ,48 L.Ed. 754 ] (1902), held that a less strict standard is intended, and to the extent that other cases have relied on Tinker to apply a ‘reckless disregard’ standard, they are overruled.
S.Rep. No. 989, 95th Cong., 2d Sess. 79 (1978).
Moreover, the Congressional Record Statements for the Bankruptcy Reform Act of 1978 stated as follows:
Section 523(a)(6) adopts the position taken in the House bill and rejects the alternative suggested in the Senate amendment. The phrase ‘willful and malicious injury’ covers a willful and malicious conversion.
124 Cong.Rec. H11096 (daily ed. Sept. 28, 1978); S17412 (daily ed. Oct. 6, 1978); remarks of Rep. Edwards and Sen. DeConci-ni.
Accordingly, while the legislative history of section 523(a)(6) excludes recklessness as the standard for “willful and malicious injury,” within the meaning of that provision, the history does not state what exactly is required for an injury to be “willful and malicious.” The Fifth Circuit answered this question in
Kelt v. Quezada (In re Quezada),
Noting that Congress intended that section 523(a)(6) of the 1978 Bankruptcy Code overruled what was thought to be the “reckless disregard” standard of Tinker, the Fifth Circuit affirmed the district court, finding that no debt for “willful and malicious injury by the debtor” had occurred:
‘In order to fall within the exception of section 523(a)(6), the injury to an entity or property must have been willful and malicious. An injury of an entity or property may be a malicious injury within this provision if it was wrongful and without just cause or excessive, even in the absence of personal hatred, spite or ill-will. The word “willful” means “deliberate or intentional,” a deliberate and intentional act which necessarily leads to injury. Therefore, a wronyful act done intentionally, which necessarily produces harm and is without just cause or excuse, may constitute a willful and malicious injury.’ [Quoting 3 Collier on Bankruptcy section 523.16 at 523-118 (15th ed. 1983).] Under the present facts, no debt for ‘willful and malicious injury by the debtor’,Section 523(a)(6), is shown. The debtors Quezadas’ intentional harboring of the vicious pit bulldog within their fence is not shown to be conduct intentionally exposing others to harm by the vicious dog. The negligence of the debtors in permitting the dog to escape when they opened the gate is not shown to be conduct designed to cause deliberate or intentional injury.
Quezada,
The Quezada case, as well as others within the Fifth Circuit, 3 establish a standard of “willful and malicious injury” quite similar to the standard actually set forth in Tinker, namely, that “willful and malicious injury” does not require evil motive or malevolent intention for an act to be malicious. More importantly, perhaps, the Quezada ease rejects the “reckless disregard” standard for determining “willful and malicious injury,” and instead maintains that there must be some type of causal connection between the intentional act, the absence of just cause, and the actual injury. In other words, the Quezada standard and the standard espoused by Congress in section 523(a)(6), is not that the debtor intended an act and is responsible for any harms which ensue, regardless of the causal connection between the act and the injury, but rather that the debtor intended the actual injuries suffered by the claimant or that the act itself necessarily led to the complainant’s injury.
Curiously, in Delaney, 4 , which followed Quezada, the Fifth Circuit says that it is addressing the causal connexity question for the first time by pronouncing that it is being presented with:
... the first occasion for us to address the dischargeability, under11 U.S.C. section 523(a)(6) , of a judgment debt arising from a debtor’s accidental firing of a firearm— albeit one which he intentionally loads and carries to a confrontation — that causes unintended bodily injury to his eventual judgment creditor.
Delaney,
To this Court, the question that the Fifth Circuit says it is addressing for the first time in
Delaney
in fact was addressed and answered by the Fifth Circuit in
Quezada
— in both cases, the debtor’s accidental
act
(i.e., accidentally letting the vicious dog out of the gate in
Quezada,
and accidentally firing the gun in
Delaney)
caused
unintended
bodily injury to the eventual judgment creditor. More to the point, in
Quezada,
the Fifth Circuit was faced with an
intentional act
(the keeping of a dangerous dog), an intervening
act of negligence
(opening the gate and thereby allowing the dog to escape), and an injury caused by the consequence of the debtor’s negligence (which would not have been a consequence without the intentional act, i.e., the keeping of the dog — no dog, no need to keep the gate closed). However, the focus in
Quezada
was upon the question of the definition of' “malicious.” What was missed by the Fifth Circuit in
Delaney
is that
Quezada
stands for the proposition that injury resulting directly from a
negligent act
occurring within a chain of events comprised, in part, of a preceding
intentional act,
is
not
What the Fifth Circuit in
Delaney
is really saying by its “first time” pronouncement is that it is addressing, for the first time, the question of whether an intentional act within a chain of events which culminates in an injury, is sufficient to cause the debt grounded in the injury to be excepted from discharge under
As mentioned in
Delaney,
the Fifth Circuit held that bodily injuries resulting from the debtor’s intentional act in twice tapping a loaded firearm against the window of a ear in which the victim was riding, were not “willful and malicious,” for purposes of
The Fifth Circuit wrote in Delaney as follows:
At the heart of this case is the question whether, for a debtor to be denied a discharge undersection 523(a)(6) of a debt arising from his infliction of death or bodily injury, it is the act or the injury that must be willful and malicious. This issue was recently crystallized by the Eleventh Circuit in In re Walker, in which that court stated that the central question in such cases is: ‘[Wjhether a deliberate and inten-
tional act that results in injury may constitute a “willful and malicious injury” undersection 523(a)(6) , or whether the debtor must first intend the actual injury before the resulting debt may be nondischargeable.’ In re Walker,48 F.3d 1161 , 1164 (11th Cir.1995)_ The Eleventh Circuit went on to note that: ‘The majority of circuits that have addressed this issue have strictly interpretedsection 523(a)(6) to require that the debtor either intend the resulting injury or intentionally take action that is substantially certain to cause the injury_’ Id._ Today we join that circuit majority, [footnote omitted — citations listed in footnote 5, supra ] as did the Eleventh Circuit in In re Walker, by holding that, for willfulness and malice to prevent discharge undersection 523(a)(6) , the debtor must have intended the actual injury that resulted.... “As succinctly stated by a bankruptcy court in Georgia, ‘the plain language ofSection 523(a)(6) ’ excepts from discharge debts arising from ‘willful and malicious injury’ rather than ‘willful and malicious acts which cause an injury.’ ” Eaves v. Hampel (In re Hampel),110 B.R. 88 , 93 (Bankr.M.D.Ga.1990). Here, Delaney unquestionably acted intentionally when he loaded the shotgun, took it with him to the confrontation with Corley, and, with his finger on the trigger, twice tapped the barrel of the gun on the windshield of the car to get Corley’s attention. In contrast, however, the fíring of the gun was neither deliberate nor intentional; on the contrary, it was wholly unintentional, even though possibly not wholly unforeseeable. It follows that, under our (and the majority of the circuits’) reading ofsection 523(a)(6) , Delaney did not intend Corley’s injury — or any injury for that matter. Thus the injury was not ‘willful and malicious’ on the part of Delaney: He neither intended theinjury nor intentionally took action that was ‘substantially certain’ to cause the injuries that Corley suffered. Consequently, as ultimately held by both the bankruptcy court and the district court, the negligence judgment debt was and remains dischargeable in bankruptcy.
Delaney,
Although the issue of what constitutes “willful and malicious injury,” within the meaning of
B. Application of the Fifth Circuit’s Quezada and Delaney standard.
As discussed, although the Fifth Circuit has not yet ruled on the precise issue before this Court, the Fifth Circuit established in
Quezada
and
Delaney
that a debt may be excepted from discharge under
Applying the
Quezada, Delaney
and
Walker
analyses, this Court concludes that the Judgment Debt in question should
not
be excepted from discharge under
In fact, whether Defendant intentionally drove his car with or without liability insurance is irrelevant for purposes of
The fact that it was foreseeable that financial loss might result as a result of Defendant’s intentionally driving his car without liability insurance
if the
accident occurred is not sufficient for purposes of
By its endorsement of
Walker
and
Hampel, Delaney
also disposes of Plaintiffs argument that his true injury is not the bodily injuries and property damage he sustained as a result of Defendant’s negligence, but rather is the loss of Plaintiffs statutory right to motor vehicle liability insurance protection under
The majority of lower courts, however, have rejected this view, finding that the mere
In Walker, which the Fifth Circuit explicitly joined in Delaney, the Eleventh Circuit rejected the “statutory right” theory as follows:
However, [the employee-creditor] has failed to cite, and we cannot locate, any persuasive or binding authority to convince us that statutorily required workers’ compensation benefits are property, distinguishable from the rights of any other creditor against a debtor. Moreover, this type of ‘injury1 is nothing more than a recasting of the ‘reckless disregard’ standard expressly rejected by Congress and by this court. American Cast Iron Pipe Co. v. Wrenn (In re Wrenn),791 F.2d 1542 , 1544 (11th Cir.1986) (per curiam) (‘“[A]n act in reckless disregard of the rights of others is insufficient to constitute “willful and malicious” conduct for purposes of11 U.S.C. section 523(a)(6) .’”); Chrysler Credit Corp. v. Rebhan,842 F.2d 1257 , 1263 (11th Cir.1988); S.Rep. No. 989, at 79, 1978 U.S.C.C.A.N. at 5865; H.R.Rep. No. 595, at 365, 1978 U.S.C.C.A.N. at 6320-21. Operating without insurance is a clear example of recklessness: the failure to insure does not guarantee that an employee will not suffer a physical or economic injury while on the job. The employer’s failure to secure workers’ compensation coverage mandated by the state legislature may subject him to criminal penalties including imprisonment, ... but it does not follow that his discharge in bankruptcy is to be denied as an additional penalty. Moreover, we reject the argument that a loss of workers’ compensation insurance per se is an injury undersection 523(a)(6) . [The employee-creditor] argues that [the debtor-contractor’s] intentional failure to obtain statutorily required workers’ compensation insurance constitutes a ‘willful and malicious’ injury undersection 523(a)(6) . We con-elude that [the debtor-contractor] did not intend to injure the [employee-creditor] and that [the employee-creditor’s] physical injuries were not substantially certain to occur as a result of [the debtor-contractor’s] failure to act.
Walker,
Accordingly, the Eleventh Circuit affirmed the district court’s decision to dismiss the employee-creditor’s claim on summary judgment. Id. at 1166.
Walker clearly disposes of Plaintiffs argument that his true injury is not the bodily injury and property damage he sustained as a result of Defendant’s negligence, but rather is the loss of Plaintiffs statutory right to motor vehicle liability insurance protection under Louisiana’s Motor Vehicle Safety Responsibility Law, and that because Plaintiffs economic injury was a necessary and direct result of Defendant’s intentional failure to obtain such coverage, Defendant must have intended that economic injury. 7
Moreover, this Court agrees with the Eleventh Circuit that the “economic injury” argument is nothing more than a recasting of the “reckless disregard” standard expressly rejected by Congress in
Accordingly, this Court finds that although Defendant’s intentional operation of his motor vehicle without insurance is a clear example of recklessness, the failure to insure was not substantially certain to cause bodily injury or property damage. Likewise, there is no evidence that the defendant intentionally caused the accident which directly caused the personal injury and property damage upon which the Judgment Debt issued.
CONCLUSION
The Court concludes that under both
Que-zada
and
Delaney,
the Judgment Debt is
A separate judgment, dismissing the complaint with prejudice, will be entered.
Notes
. On February 27, 1996, a section 341 meeting of creditors was held. The deadline to file a proof of claim was May 27, 1996. The deadline to file a complaint objecting to discharge of the debtor or to determine the dischargeability of certain types of debts was April 27, 1996. On April 29, 1996, the debtor-Defendant was granted a discharge. On May 14, 1996, Plaintiff filed an adversaiy complaint reciting therein that he had not received notice of the bankruptcy case prior to April 27, 1996. This complaint, which essentially seeks to have the Judgment Debt declared nondischargeable under
. As will be discussed
infra,
close examination of Fifth Circuit law has revealed that perhaps the Fifth Circuit, through
Delaney,
was farming ground already plowed in
Kelt v. Quezada (In re Quezada),
After
this Court's Opinion was prepared, the Fifth Circuit issued a substitute
Delaney
opinion in
Corley v. Delaney (In re Delaney),
Indeed, the majority [of circuits] to which the Eleventh Circuit alluded [in In re Walker ] [regarding the strict interpretation ofsection 523(a)(6) to require that the debtor either intend the resulting injury or intentionally take action that is substantially certain to cause the injury] includes the Fifth Circuit, for in In re Quezada [citation omitted], we held that a creditor must demonstrate ‘conduct designed to cause deliberate or intentional injury’ to establish a 'willful and malicious injury’ undersection 523(a)(6) . Accordingly, today we reaffirm our place in the circuit majority identified in In re Walker by holding that, for willfulness and malice to prevent discharge undersection 523(a)(6) , the debtor must have intended the actual injury that resulted. [Footnote omitted.] As indicated in Quezada and Walker, intent to injure may be established by a showing that the debtor intentionally took action that necessarily caused, or was substantially certain to cause, the injury. [Footnote omitted.]
Delaney,
The Fifth Circuit's substitute opinion in
Delaney
does not change this Court's Opinion in the instant case, but in fact bears out this Court's observations concerning just what happened, and when, regarding the evolution of the Fifth Circuit’s
.
See, e.g., Chrysler Credit Corp. v. Perry Chrysler Plymouth,
. As will be discussed in more detail
infra,
in
Delaney,
the Fifth Circuit held that bodily inju-ríes resulting from the debtor’s intentional act in twice tapping a loaded firearm against the window of a car in which the victim was riding, were not “willful and malicious,” for purposes of
. The Second, Third, Sixth, Eighth and Tenth Circuits, like the Fifth and Eleventh Circuits, have strictly interpreted
Moreover, in
Cassidy v. Minihan,
Furthermore, in
Dorr, Bentley & Pecha, CPAs, P.C. v. Pasek (In re Pasek),
So far, only the Ninth Circuit has held that the creditor need not show that the debtor acted with an intent to harm the creditor, although the act must necessarily cause harm to the creditor.
See Britton v. Price (In re Britton),
. Breland v. Schilling involved the interpretation of an intended injury exclusion clause in a liability insurance policy. The insured had punched another person and fractured his jaw, and a jury had determined that the defendant-insured had not subjectively intended to break the plaintiff’s jaw. The Louisiana Supreme Court, focusing on the "result of an intentional act, rather than upon the intended or expected bodily injury,” id. at 614, found that the subjective intention and expectation of the insured determined which injuries fell within and which fell beyond the scope of coverage under the policy at issue, and in adopting a "fact-sensitive test for the insured's subjective intent, ... rejected] the approach ... that an insured intends, as a matter of law, all injuries which flow from an intentional act.” Id. at 611, 613. The court held as follows:
[Wjhen minor bodily injury is intended, and such results, the injury is barred from coverage. When serious bodily injury is intended, and such results, the injury is also barred from coverage. When a severe injury of a given sort is intended, and a severe injury of any sort occurs, then coverage is also barred. But when minor injury is intended, and a substantially greater or more severe injury results, whether by chance or coincidence, accident, or whatever, coverage for the more severe injury is not barred. Whether a given resulting bodily injury was intended ‘from the standpoint of the insured' within these parameters is a question of fact. Such factual determinations are the particular province of the trier of fact, in this instance the trial jury.
Id. at 614.
The Louisiana Supreme Court concluded because the terms of the insurance contract dictated that the insured's subjective intent regarding bodily injury, as measured by the jury, controlled whether coverage applied, and because the jury found that the defendant had not intended to break the plaintiff’s jaw and that the defendant had not intended to inflict any similar serious injury, the insured’s homeowners insurer provided coverage for injuries suffered by the plaintiff. Id. "
Of course, though it need not be here, it could be argued that a determination of whether a claimant is afforded insurance coverage (if the injury is
not
intentional) might involve different considerations than those underlying a
. Like the Eleventh Circuit in
Walker,
this Court cannot find any persuasive or binding authority to convince it that statutorily-required motor vehicle liability insurance benefits are
property,
distinguishable from the rights of any other creditor against a debtor. However, this conclusion of the
Walker
court seems irrelevant because even if the right to be protected by statutorily-required insurance
is
a property right, the property right is triggered only by an injury. The injury, therefore, is the required "if in the