*3 but delib- project,” as “the Eckerd known STEWART, Before DeMOSS of their not inform Williams erately did *, and LITTLE District Judges, Circuit hired the Union. Williams affiliation with Judge. the Eck- work on applicants. these When commence, electri- project erd was to LITTLE, Judge: District membership their cians revealed interpreta- appeal upon centers This increases. wage and benefit requested Bankruptcy tion of Section Williams, wages used non-union who had states, “A provision That Code. project, cost of the calculating ... section 727 of this title does increases. demanded grant unable to these any discharge an individual debtor on went strike.1 The Union workers injury by the debt for willful and malicious strike, Williams a result of the property As entity to another or to the debtor scheduled on begin working as § unable to entity.” 11 U.S.C. of another * brief, workers accomplished when Union Judge District of Loui- District of the Western siana, membership, apply for sitting by designation. their Union conceal union-level jobs, then demand non-union “salting” by target 1. Williams was the employer. compensation from Salting, as described Williams’s CBA, diffi- project verting the Eckerd and encountered but a decline in residen- general culty project’s with the contractor. projects tial construction threatened to attempt After hire non- an unsuccessful shut down Williams’s business. viola- electricians, Williams a col- union entered Agreed Judgment, tion of the Williams ' (“CBA”) bargaining agreement lective with performed projects two commercial Union, promised which had to provide which he hired non-union. electricians. necessary employees for the Eckerd The Union filed a complaint monetary III, project. Article 2 of Under injunctive relief with court. agreed use the Un- In a dated 25 April hiring ion hall “the sole and exclusive district court found had willfully *4 of applicants employ- source of referral for and purposefully the Agreed violated having ment.” After additional problems Judgment and held him contempt of electricians, however, with the Union upon court. Based the of results the audit Williams hired non-union electricians to requested, it had the court ordered complete Eckerd project.2 the Williams $155,855.39 to pay Williams as restitution hired following these electricians instead of original for his breach of the CBA. The grievance the in the procedures outlined court a ordered second audit to determine griev- CBA. The then Union initiated a the amount restitution Williams owed against hearing ance After Williams. a ongoing non-compliance for with the Committee, Management before the Labor Agreed Judgment from 1 December 1999 Williams was found to have Article violated through April 19 This 2000. amount to- III, 2 Section of the CBA. $106,911.43. taled The court also awarded dispute The between Williams and the attorney’s the Union prosecuting fees for parties Union was resolved when the en- contempt the action. tered an Final De- cree approved by which was the United A few weeks after for States District Court the Western Dis- judgment, issued its Williams and his wife trict 14 of Texas on December 1999. Un- for petition Chapter filed a relief under 13 der Agreed Judgment, was Williams Bankruptcy of the In bankrupt- Code. obligated to hire electricians for commer- cy proceedings, challenged Williams projects exclusively cial through the Un- accuracy of the by two audits conducted addition, ion. In the district court ordered appeal, On it was determined an audit of books to and records precluded relitigat- that Williams was past compliance determine with the CBA. bankruptcy accuracy of the first Upon finding a of non-compliance, by audit ordered district court pay Williams was to ordered restitution right had Williams forfeited to chal- wages and benefits to de- Union members lenge accuracy of the second audit nied employment and the attor- Union’s cooperate refusing to with auditors. See ney’s fees.3 International Brotherhood of (In planned perform non- Workers 520 re only Electrical Local Williams), (5th 458, commercial a projects as means sub- 298 F.3d Cir. 2. appears The record that at least one It from statements Williams’s indicates through workers hired discov- Union was attorney in the record that this initial award sleeping at ered construction site. attorney's paid. fees was occasion, alleges that Williams also on one Union electricians absented the construction spent site topless an afternoon at bar. (5th Cir.2001) Mercer,
2002).
(citing
re
nature of the debts
underlying
The
(5th Cir.2001)).
391,
The inter
F.3d
purposes
Section
question
pretation of Section
proceeding.
See
prior
addressed
—
of law and is reviewed de novo. See id.
U.S. -,
Warner,
Archer v.
S.Ct.
de novo
of review
(2003)
(applying the
standard
1462,
(explaining
We review the Court’s 523(a)(6) findings requires Section court’s of fact for clear error and nouncement that the Fifth injury, actual to cause conclusions law de novo. Hickman v. intent (In Hickman), 400, a debt to be Texas re 260 F.3d 401 Circuit has held nondischargeable, a have act an interpretation debtor must would contrary be to the “objective certainty substantial or ed with notion “ exceptions to inflict Miller subjective injury. motive” ‘should be confined to those ex- plainly ” (In Abrams, Miller), Inc. re v. J.D. Thaw, pressed.’ (citing Id. Gleason v. (5th Cir.1998). 598, Despite simi 558, F.3d 289, 236 U.S. S.Ct. language in the used (1915)). larities to describe L.Ed. 717 As an of an example 523(a)(6) and inten resulting intentional act in unintended or torts, creates a tional injury, unanticipated the Court cited a category of tortious conduct. Id. narrower knowing contract. Id. With (noting, “Merely a tort is at 604 brief mention knowing breach as intentional does not mean-that classified contract, opinion the Kawaauhau seems any injury caused is will tortfeasor reject proposition arising that a debt ful.”). from knowing is a willful malicious injury excepted Turning of “mali meaning discharge. cious,” Miller court concluded Section an “implied creates malice stan Kawaauhau, holdings Mil Id. at dard.” 605. A acts with debtor ler, and Walker that a debtor .indicate implied malice when he “with the acts must commit intentional or substantial intent to at injury.” actual Id. 606 ly order to deprived (citation omitted). im This definition of A discharge. debt is not plied malice is identical to the Kawaauhau if, the debtor has committed a explanation of a Court’s willful Id. willful act. The dischargeabili Kawaauhau, 61-62, (citing 523 U.S. at *6 Union, ty of two debts to the 977). The S.Ct. at test for willful and therefore, depends upon the intentional or 523(a)(6), injury malicious certain nature of the in injury Williams thus, inquiry condensed a single into of flicted upon Union when he breached the objective whether there exists “either an the CBA defied the Judgment. and certainty subjec substantial of harm aor part
tive to harm” III. motive cause on the of Walker, the debtor. Id. also Texas See seizes upon Williams the reference (5th 813, Cir.1998) (stating 142 F.3d knowing to a in Ka- “ ‘for willfulness and malice dis prevent to urges adopt a waauhau and this court- to 523(a)(6), charge under Section the debtor 523(a)(6) of construction Section that injury have intended the actual that must would con nondischargeable only render injure may ... resulted.’ .‘Intent accompanied by separate tractual debts by showing established the debtor re tortious conduct. Because the debts intentionally necessarily took action that sulted breaches of the con caused, or substantially certain to tract, contends the Williams debts .are cause, injury.’ ”)(citing Delaney, the In re 523(a)(6) scope within and the Section (5th Cir.1996)). F.3d discharged. posits should be The Union rejected Ka- application The Kawaauhau Court that the Fifth Circuit’s (cid:127) 523(a)(6) broader construction of compels finding Section waauhau of nondis- make would debts from intentional sub chargeability Williams was stantially acts that cause unintended or unantic- that his abide certain failure to injuries ipated in bank- nondischargeable Agreed Judgment the the CBA Id. at ruptcy. injury. at Such S.Ct. 977. would cause the acknowledged Although debtor’s actions constituted Fifth Circuit has inten- may involve an se larceny -per of contract and were breach substantially injury. 523(a)(4), certain See the tional or Section Miller, (1998); Walker, at 142 F.3d the remanded case for a determination of Walker, debtor F.3d at certainty objective the debtor’s intent or by keep- tort of conversion committed Walker, Id. Like cause at 606. remitting fees instead ing professional decision that the suggests the Miller dis University of employer, the to his them debts chargeability contractual Texas, employment con- in violation his 523(a)(6) upon the depends knowl Walker, 142 The court F.3d at 824. tract. and intent of the debtor at time edge 523(a)(6) pre- did not that Section found breach, whether conduct rather than The record discharge of debt. vent a tort falls within anoth is classified as debtor, that the who admit- not show did statutory exception discharge. er intentional, understood acts were ted his obligations knowingly his contractual Accepting that Section ex with the intent professional fees retained cepts contractual debts from Id. employer of revenue. depriving those debts an intention when result from note, did factfin- “[i]f The Walker injury, inqui our al or certain knew [the debtor] to decide that der were focuses nature of ry upon now obligations under the ... contract of his upon inflicted Union. find that might factfinder] ... also [a then The record reflects that when Williams knowingly profes- retained his [the debtor] in violation hired non-union electricians [contract], a'n in violation of the sional fees aby he was motivated desire to necessarily knew would act which he and to complete project Eckerd save This, turn, University’s injury. acted in Although his business. in a finding of ‘willful could result injure tentionally, he did not intend to ” injury.’ Maintaining Id. under Sec- distinction between tort, tion intentional Whether Williams’s did find a willful and opinion Walker CBA *7 injury by was inflicted the debt- jure is call. At the Union a more difficult professional Rath- of fees. or’s conversion argument, sug- oral counsel for the Union er, that a breach suggests Walker substantially gested that Williams was cer- obligation of contractual a clear to types injury: injury tain of three of dis- injury may prevent certain to deprived electricians who were Union 523(a)(6), regardless charge under Section employment, injury to the non-union elec- separate tortious con- the existence lower, paid tricians who were at a non- duct. Williams, working union rate while and injury prestige to the and its abili- Union’s of anoth-
Assessing dischargeability its The ty to enforce contracts. record debt, Fifth er Cir- employment-related discontinued also indicates that Williams a debtor misappropriat- cuit held that who payments pension making to the Union and misused proprietary ed information stopped using vacation funds when he and could be from ob- precluded trade secrets fall of 1999. electricians Of Union taining a under Section injuries, alleged only these one was actual- at least sub- if the debtor’s “actions were The ly sustained itself. de- stantially injury” certain to result in Union Miller, employment opportunities and employer. privation 156 F.3d at pension failure to contribute to Union different argues manner. Williams vacation funds affected individual Un- because all of the damages and were based upon CBA, None of the affected ion electricians. Un- violations of the both debts electricians, however, party is a this ion should be considered contract damages. Union, payment The conversely, suit. below-Union-scale maintains that both any wages affected electricians without debts should damages be characterized as Union; to the arising connection the Union cannot from the Agreed violation of the any injury the non-union electri- Judgment. assert The characterization of the only injuries cians direct sustained. debts as resulting from breaches of the were to prestige Union its and to its CBA or of Agreed Judgment affects ability uphold dischargeability its contracts.
There is Judgment no indication the record that its dated 25 April Williams, CBA, by breaching the district court found that pur- was sub- Williams had stantially posefully willfully certain the Agreed Union would sustain violated prestige Judgment a blow to ability its and its December 1999. At the uphold contempt hearing, its contracts. Williams did know Williams admitted that deprived Agreed Union electricians would had notice of the Judgment, be employment opportunities and that it clear and unambiguous, concomitant was that he if had continued salaries benefits he hired non-union to use non-union electricians projects, workers for the on commercial Eckerd and other com- and that he had projects. yet paid mercial Although was the restitution for his earlier occur, breach substantially certain to it of the CBA. The district court inflicted found upon contempt imposed sanctions, which included attorney’s fees To the extent that the debts to the and additional restitution. A second audit were determined to be nondis performed the.period between the chargeable injuries entry in Decem- arising from violations of the we contempt hearing ber of 1999 and the Although previ reverse the district court. April of 2000. This audit revealed Union ous inju decisions this circuit hold that deprived electricians had been resulting ries a knowing $106,911.43 in wages and benefits when may nondischargeable Williams hired non-union workers. From 523(a)(6), those decisions also re record, appears it attorney’s that the quire explicit evidence that a debtor’s fees incurred in the contempt hearing are was intended or cer figure. included in this tain to cause the to the creditor. *8 At the hearing, bankrupt- the There been showing has no of an intention $106,911.43 cy court stated the consti- al or certain injury to the damages tuted from a willful and malicious injury. was against This amount assessed The issue of Williams’s violation of the failing by Agreed Williams abide the Agreed Judgment and its treatment under Judgment. The court bankruptcy found remains. clearly that Williams had violated Section promise when he broke his to the IV. comply district court to with the CBA. party attempts Each to character The promise fact that this had been made ize by Williams’s debts to the Union in a court the district and was Judgment opinion specifically and While the Behn deals by Agreed the
sanctioned injunction, and with the violation of an the the to a willful elevated Decree Agreed Judgment con- entered the district a sanction for level. As malicious order, purpose protect- court served a similar district court’s of the tempt from excepted ing the Union further breaches of the $106,911.43 determined to be Agreed at CBA. See id. 238-39. The discharge. from in- Judgment clearly unambiguously have held that bankruptcy courts Other formed Williams that the use of non-union against a debtor contempt judgment a on projects electricians commercial un immune from is bankruptcy his obli- forbidden. Williams knew of 523(a)(6). obey a Failure to der Section knowingly gations yet mali constitutes willful court order those Even if obligations. violated conduct, a judgment against and a cious injure did not the Un- intend to discharge. from excepted debtor is defiant ion, him sub- Agreed Judgment made (In re Allison PRP Internat’l v. Wine stantially certain that his acts would inflict (Bankr.S.D.Fla. Allison), B.R. injury. bankruptcy properly The court 1994) who discharge to a debtor (denying violation of found Williams’s non-competition to breach a continued Agreed Judgment in a willful and resulted after employment agreement clause in injury. injunc temporary issued a a state court argument advocating dis- Williams’s tion). has ex Another court over- charge damages contempt of the plained: $106,911.43 the fact that assessed looks a court the United States ... [W]hen from by the court arose injunction protec- or other ... issues Judgment Final Agreed defiance telling specific individual tive order and Decree. Williams’s breach inju- into actions will cross the line what Judg- entry Agreed after the CBA others, resulting ry damages then simply honor ment is not a failure to that or- from an intentional violation of obligation; contractual this breach is also a Bankrupt- in the proven der as is either Contempt violation of court’s order. or, a full cy long so as there was resulting in may be characterized as an act litigate ques- opportunity and fair such, in- the debt intentional As violation, in the tions of volition and curred from the violation of the are the result of issuing ipso facto is under Sec- nondischargeable injury.” “willful malicious tion “un- “just” This is because what appeal The takes the on position just” parties conduct as has between $155,855.39 that the initial debt of stems An in- defined the court.... been contempt and also should order violation the order is neces- tentional The discharge. bank- “just sarily without cause or excuse” ruptcy held otherwise. having be viewed cannot as not $155,855.39 represents damages pre- very tention to harm entry Agreed Judgment. ceded de- protected persons that order was court declined to find that *9 prevent. signed damages resulting this debt constituted Womenservices, v. Behn from violation of the district Gyn Inc. Buffalo (Bankr. (In Instead, Behn), court’s order. re B.R. W.D.N.Y.1999). initial debt re- determined that the $155,855.39 in suited from the violation of the CBA and Williams the amount of as a no evidence that result that there was of his breach of the collective bar- to violate a court order at the gaining agreement intended is nondischargeable 523(a)(6). § time was incurred. The conclu- this debt under U.S.C. The bank- clearly ruptcy sion of the court is not held judge that the debt was non- agree the initial dischargeable erroneous. We that debt because it resulted from from arising the breach the CBA does willful and injury. majority determination, qualify injury as a willful and malicious reverses that finding that 523(a)(6) subject under Section and is therefore the debt discharge is it dischargeable. does not arise from a willful and malicious
injury. reasons, following For the I con- cur in part V. in part dissent with re- spect majority’s determination.1 The bankruptcy finding court’s factual . $155,855.39 debts Prior to determining whether Williams’s $106,911.43 inju- stem from two different bargaining collective agree- supports ries that these two conclusion ment resulted from willful and malicious differently debts must be treated under conduct, majority was faced with the 523(a)(6). Section Because there is no in- question of whether dication that or Williams intended contract, unaccompanied by an indepen- injure certain to the Union tort, dent intentional falls within the ex- initially when he violated we hold 523(a)(6). ception discharge § $155,855.39 that the first debt of does not majority held arising that a debt aout injury; arise from a willful and malicious knowing breach subject of contract is 523(a)(6) except Section does not this debt 523(a)(6) exception § to discharge under hold, furthermore, from discharge. We when the debt from an results intentional $106,911.43 the second debt of arises from I concur in the willful and malicious which, majority’s holding, my in view by refusing obey inflicted to- the Agreed naturally flows from language and is § interpretation and this Court’s of the statute. Accordingly, the decision of the district 523(a)(6) excepts is AF- part REVERSED any debt “for willful and malicious in part. FIRMED entity the debtor to another or to the In Kawaau property entity.” of another STEWART, E. Judge, CARL Circuit Geiger, hau Supreme Court held concurring part, dissenting part: injury” that a “willful malicious results questions One of the pivotal before the from an act done with the actual intent to 57, 61, is Court whether the debt incurred cause injury.2 523 U.S. 118 S.Ct. torts,’ majority’s 1. category distinguished I also concur determina- 'intentional arising tion that the debt from Williams's torts.” U.S. at from reckless Agreed Judgment violation of the in the Supreme S.Ct. 974. The Court further noted $106,911.43 nondischargeable. amount of require generally torts "intentional act,' consequences the actor intend ‘the of an Court, Geiger, Supreme in determin- ” 61-62, simply 'the act itself.’ Id. at scope of the willful and malicious Supreme rejected 974. The S.Ct. injury exception, § noted that the petitioner’s encompassing interpretation of triggers lawyer’s "formulation in the mind the *10 514 523(a)(6) (1998).
974,
§
chargeable
under
because it
jobs in ... violation of his contract by you 10 to an hour instead of $12 did so at a time which he knew that approximately an hour as is $20 doing deprive so would Union workers of called for in the Union contract. jobs and benefits and that he knew that injury.” be an It should be noted A. Yes .. would that neither party contests Q. I Okay. So want to understand fact, judge’s findings. factual your question. you stopped When specifically Williams’s counsel conceded following the you Union contract during argument oral that he did not dis- also ceased to the contributing Un- agree bankruptcy judge’s with the factual fund, ion pension you? didn’t findings regarding I paid everything per A. had in as Moreover, testimony proof Wilhams’s agreement while I using inju- that he was certain that workers. Union ry would result from his breach of the Q. All right. bargaining agreement: collective Q. ... contacting not the Union ceased, yes. A. After that it all hall, you knew that electricians Q. paying right. You ceased And —all would, therefore, op- have you you so knew that —when ceased portunity from the —electricians you contract and using Union op- Hall would not have the Union paying pen- ceased into the Union portunity you. to work for you plan sion knew that workers A. True. working you who were would Now, Q. you you when ceased—when any accruing pension bene- following decided to cease the Un- pension plan. fits under the Union contract, you paying ion also ceased that, you? You knew didn’t scale. Isn’t that true? A. Yes. A. Yes. Q. contributing You also ceased Q. you unilaterally And set lower Union vacation fund. Correct? wage your for most of scale hands.
Correct? A. Yes. Corporation, Advanta Auto Finance Q. you And knew that the workers *12 Appellant, no be accru- longer would therefore under that. ing any benefits
A. Yes. Company, Inc., doing Sugarland Motor business as Harvest Ford-Lincoln- view, judge’s fac- my Mercury, doing business as Harvest- findings tual determine the resolution Sugarland, Appellee. majority’s attempt find this issue. The No. 02-30395. factual bankruptcy judge’s error findings by separating the harm suffered Appeals, United States Court from the the union-workers Fifth Circuit. case, completely unpersuasive. In this July bargain- Williams breached the collective he into with ing agreement entered so, Union; and, by doing he was sub-
stantially certain that the Union and its injured. As the bank-
members would
ruptcy judge stated took ac- “[Williams] wrong,
tions that he were and he knew
knew that there was a substantial certain-
ty that actions would result in harm to Union, just since he admitted to the thing the same had done
before that time had that effect.” Be- [ ] I conclude that Union was
jured deprived when its members were
employment opportunities and concomitant hiring
benefits Williams of nonunion
labor, I would affirm the $155,855.39
court’s determination nondischargeable. FINANCIAL,
In the Matter of: ARGO
INC., Debtor.