171 F.3d 638 (8th Cir. 1999), 97-3788, In re Scarborough

Docket Nº:97-3788, 97-3789.
Citation:171 F.3d 638
Party Name:In re: Elisabeth SCARBOROUGH, Debtor. Mark E. Fischer, Appellee/Cross-Appellant, v. Elisabeth Scarborough, Appellant/Cross-Appellee.
Case Date:March 31, 1999
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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171 F.3d 638 (8th Cir. 1999)

In re: Elisabeth SCARBOROUGH, Debtor.

Mark E. Fischer, Appellee/Cross-Appellant,


Elisabeth Scarborough, Appellant/Cross-Appellee.

No. 97-3788, 97-3789.

United States Court of Appeals, Eighth Circuit

March 31, 1999

Submitted Nov. 19, 1998.

Rehearing and Rehearing

En Banc Denied in No.

97-3788 May 18, 1999.

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[Copyrighted Material Omitted]

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M. Corinne Corley, Kansas City, MO, argued, for appellant.

Ronald K. Barker, Kansas City, MO, argued, for appellee.

Before MCMILLIAN, WOLLMAN, and HANSEN, Circuit Judges.

HANSEN, Circuit Judge.

Mark E. Fischer filed an adversary complaint in Elisabeth Scarborough's Chapter 7 bankruptcy proceeding, seeking to bar the discharge of a judgment debt he had obtained against Ms. Scarborough. Applying the collateral estoppel doctrine, the bankruptcy court ruled that the actual damages portion of the judgment was not dischargeable under 11 U.S.C. § 523(a)(6) (1994), but that the punitive damages portion was dischargeable. Ms. Scarborough appealed the nondischargeability of the actual damages and Mr. Fischer cross-appealed the dischargeability of the punitive damages to the district court, which affirmed the bankruptcy court. Ms. Scarborough and Mr. Fischer now bring the same appeal and cross-appeal from the district court's ruling. We affirm in part and reverse in part.


Fischer and Scarborough were married in 1984 and divorced in 1986. Pursuant to the divorce decree, Ms. Scarborough had custody of their only son, Benjamin, and Mr. Fischer was allowed visitation. In 1989, Ms. Scarborough took Benjamin to the Grain Valley, Missouri, police station where Benjamin told police that his father, Fischer, had sodomized him when he was three. A police investigation followed and a grand jury indicted Fischer on felony child abuse charges. The criminal charges were eventually dismissed two years later. Ms. Scarborough also filed a petition for an ex parte order of protection in 1989 that was dismissed when she failed to appear at the hearing.

In 1991 Mr. Fischer filed a civil lawsuit against Ms. Scarborough in Missouri state court, alleging malicious prosecution and abuse of process. The jury returned a verdict in favor of Fischer, awarding him $50,000 in actual damages and $100,000 in punitive damages on the malicious prosecution claim and $50,000 in actual damages on the abuse of process claim. Ms. Scarborough did not appeal the state verdict.

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Ms. Scarborough failed to pay the judgment and filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in 1996, seeking to discharge the judgment owed to Fischer. Mr. Fischer sought to bar the discharge under § 523(a)(6), which excepts from discharge any debt "for willful and malicious injury by the debtor to another entity or the property of another entity." The bankruptcy court determined that the jury in the state case necessarily found that Ms. Scarborough acted willfully and maliciously to injure Fischer based on the jury instructions for the underlying malicious prosecution and abuse of process claims. However, the bankruptcy court determined that Ms. Scarborough had not willfully and maliciously injured Fischer as to the punitive damages, and thus, that portion of the judgment debt was dischargeable. The bankruptcy court relied on its earlier case, In re Ratcliff, 199 B.R. 185 (Bankr.W.D.Mo.1996), and the jury instructions that allowed the jury to award punitive damages based on reckless indifference. The district court affirmed the bankruptcy court's decision primarily for the reasons stated by the bankruptcy court.


In this appeal, we sit as a second court of review and apply the same standards as applied by the district court. See United States v. Roso (In re Roso), 76 F.3d 179, 181 (8th Cir.1996). We review de novo the district court's conclusions of law, which include the application of collateral estoppel. See Tudor Oaks Ltd. Partnership v. Cochrane (In re Cochrane), 124 F.3d 978, 982 (8th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 1044, 140 L.Ed.2d 109 (1998).

Section 523(a)(6) provides that certain debts are not dischargeable in bankruptcy, namely those that are "for willful and malicious injury by the debtor to another entity." Willful and malicious are two distinct requirements that Fischer, as the party seeking to avoid the discharge of the debt, must prove by the preponderance of the evidence before the § 523(a)(6) exception to discharge applies. See Grogan v. Garner, 498 U.S. 279, 286-87, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) (holding that the preponderance of the evidence...

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