Case Summary:
The Plaintiff filed an adversary complaint seeking a determination that a Minnesota state court punitive damages award was nondischargeable under section 523(a)(6) of the Bankruptcy Code. The parties filed cross motions for summary judgment. Under Minnesota law, punitive damages are available if a plaintiff shows a defendant acted with a deliberate disregard for the rights or safety of others, acting with intent or indifference. By contrast, section 523(a)(6) requires a creditor to prove the debtor acted in conscious disregard of her duties and intended to injure the creditor or was substantially certain injury would occur. Looking at a special verdict without the jury instructions and the state court record, the court had no basis to determine whether the jury concluded the defendant acted willfully and maliciously. The jury answered "yes" to the question of whether the defendant acted "with deliberate disregard for the rights or safety of others." It could have found that the defendant acted with reckless disregard, which is insufficient to demonstrate willfulness and maliciousness under section 523(a)(6). Therefore, the court denied both motions for summary judgment.
Statute/Rule References:
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
Key Terms:
Collateral Estoppel
Willful and Malicious - Defined