DECISION AND ORDER
This cause comes before the Court after a Trial on the Plaintiffs Complaint to determine dischargeability. At issue at the Trial was whether a debt arising from a check mistakenly sent to and then negotiated by the Defendant/Debtor should be excepted from discharge. At the conclusion of the Trial, the Court took the matter under advisement. The Court has now had the opportunity to fully consider the matter, and based upon a review of the arguments made by the Parties, together with the evidence presented, the Court finds that the debt arising from the Defendant negotiating the Plaintiffs mistakenly sent check is a Nondischargeable Debt.
The background facts underlying this matter began in November of 1999, when, by mistake, an employee of the Plaintiff sent to the Defendant a check in the amount of $36,500.00. The mistake itself arose because the Defendant, with whom the Plaintiff had previously transacted business, had a name very similar to that of the intended recipient. The Plaintiff, however, did not discover its error until the following March, when the intended recipient contacted the Plaintiff regarding a lack of payment on its account. Upon discovering its error, representatives of the Plaintiff met with the Defendant, with the Defendant at that time informing the representatives that all $36,500.00 of the funds represented by the Plaintiffs check had been spent. When asked for reimbursement, the Defendant informed the Plaintiffs representatives that he did not presently have and would not likely in the future have access to sufficient funds to cover the debt.
*440 Based upon this course of events, a suit for conversion was then commenced in state court, with judgment thereafter being rendered in the Plaintiffs favor in January of 2001. The following year, the Defendant filed a petition in this Court for relief under Chapter 7 of the United States Bankruptcy Code. In his petition, the Debtor listed the Plaintiff as the holder of a judgment lien in the amount of $36,500.00.
DISCUSSION
The Plaintiffs complaint is brought pursuant to two statutory exceptions to the dischargeability of an individual debt: § 523(a)(2)(A), as a debt arising from a “false pretense[ ], a false representation, or actual fraud”; and § 523(a)(6), as a debt arising as the result of a “willful and malicious injury.” As it relates to the first ground, § 523(a)(2)(A) requires a positive act — normally a representation — be made by the debtor in obtaining another’s property.
See, e.g., Pisano v. Verdon (In re Verdon),
Section § 523(a)(6) excepts from discharge those debts which arise as the result of a debtor’s “willful” and “malicious” actions. This exception to discharge is one of the oldest known in American bankruptcy jurisprudence — being part of the original Bankruptcy Act of 1898— and is aimed at the type of both socially and morally reprehensible conduct that is not deserving of the fresh-start policy which underlies the Bankruptcy Code.
Rupert, Jr. v. Krautheimer (In re Krautheimer),
In arguing for the applicability of the § 523(a)(6) exception to dischargeability, counsel for the Plaintiff stressed that the Defendant had been found liable for conversion in state court, arguing in this regard that, since judgment had been entered on a motion for summary, the doctrine of collateral estoppel would be applicable. However, as was previously set forth by this Court:
In addressing this argument as it relates to the Plaintiffs cause of action under § 523(a)(6), dischargeability proceedings brought under § 523(a)(6) are determined by reference to federal law, and in this respect, while the act of conversion may give rise to a nondischargeable debt under § 523(a)(6), the mere act of conversion does not, for purposes of federal law, create a nondischargeable debt per se; as stated by the Supreme Court of the United States in Kawaauhau v. Geiger: ‘not every tort judgment for conversion is exempt from discharge.’523 U.S. 57 , 63-64,118 S.Ct. 974 ,140 L.Ed.2d 90 (1998).
J & A Brelage, Inc. v. Jones (In re Jones),
In the case of
Kawaauhau v. Geiger,
the Supreme Court of the United States addressed the term “willful” as it is used in § 523(a)(6).
In conformance with Supreme Court’s decision in
Kaivaauhau,
and its eye toward equating § 523(a)(6) with an intentional tort, this Court, along with others, has held that § 523(a)(6)’s scope is limited to only those instances where a person acts with the specific intent to cause injury, or is substantially certain that, by his or her actions, an injury will occur.
Graffice v. Grim (In re Grim),
Weighed together then, what these conditions demonstrate is that the Defendant fully knew that he was not the intended recipient of the check sent by the Plaintiff; yet, in spite of such knowledge, he still proceeded to negotiate and then dissipate the funds from the check. For this reason, the Defendant’s statement in rebuttal — that he did not consider it unusual to receive such a large remuneration — lacks complete credibility. Consequently, no matter the angle, there is simply no possible way for this Court to reach a conclusion other than the Defendant, by the act of negotiating the Plaintiffs mistakenly sent check, was substantially certain that an injury would occur to the Plaintiffs property. To hold otherwise, under the conditions just mentioned, would unduly raise the evidentiary bar on an action brought under § 523(a)(6) so as to make it almost impossible, without a direct admission, to establish the “willful” standard of the statute. Accordingly, it is this Court’s finding that the Plaintiff has sustained its burden of establishing that, as applied to § 523(a)(6), the Defendant acted willfully.
Turning now to the issue of malice, the accepted definition of this word, as
*442
applied to § 523(a)(6), is acts taken in conscious disregard of the debtor’s duties or without just cause or excuse.
Wheeler v. Laudani
On the other hand, while no specific intent is required, the definition of malice requires a heightened level of culpability transcending mere willfulness.
Sateren v. Sateren (In re Sateren),
Together then, these cases exemplify one of the minor, but important difference between § 523(a)(6)’s “willful” and “malicious” requirements: when, although motivated by self-interest, a debtor undertakes actions that are also intended, even if incidentally, to confer a benefit on the injured party, willfulness, but not malice, may be found to exist. Here, however, the facts are completely inapposite to this scenario — clearly no benefit, even of incidental value, was conferred upon the Plaintiff by the Defendant negotiating the mistakenly issued check. Even setting this aside, however, there exists for this Court an additional set of concerns.
In this case, the evidence shows that upon receiving the check from the Plaintiff, the Defendant did not deposit it in his normal business account, but instead placed the funds in a personal account. Equally important, the Debtor has never claimed, for tax purposes, the funds from the Plaintiffs check as income. 1 Thus, in concert, any reasonable interpretation of these actions leads to but one conclusion: the Debtor, in cashing the check, was attempting to keep the transaction secret. When considered in conjuncture with those circumstances, as previously set forth, demonstrating the willfulness of the Defendant’s actions, the weight of the evi *443 dence in this case tips heavily toward a finding that the Defendant’s actions were taken in conscious disregard of his duties and without just cause or excuse. Accordingly, the sum of the circumstances presented in this case warrants a finding that the Defendant acted with “malice” for purposes of § 523(a)(6).
In conclusion, the Court finds that the Plaintiff has sustained its burden of demonstrating that the Defendant, in negotiating the mistakenly sent check, engaged in conduct that, as applied to § 523(a)(6), was both “willful” and “malicious.” As such, the debt arising from the Defendant negotiating the Plaintiffs mistakenly sent check must be deemed to be a non-dischargeable debt. In reaching the conclusions found herein, the Court has considered all of the evidence, exhibits and arguments of counsel, regardless of whether or not they are specifically referred to in this Decision.
Accordingly, it is
ORDERED that, pursuant to 11 U.S.C. § 523(a)(6), the judgment entered under Civil Rule 56, in the Case of Superior Metal Products v. James Martin, in the Court of Common Pleas of Allen County, Ohio, in Case No. CV 2000-0578, be, and is hereby, determined to be a NONDIS-CHARGEAJBLE DEBT.
Notes
. Section 61(a)(1), of the Internal Revenue Code, requires taxpayers to report all income "from whatever source derived.” It does not matter whether the income was derived lawfully or unlawfully.
Davis v. United States,