Doe v. Boland (In re Boland), 17-8019

• Decision Date: 13 February 2019
• Docket Number: No. 17-8019,17-8019
• Parties: IN RE: Dean Maynard BOLAND, Debtor. Jane Doe; Jane Roe, Plaintiffs-Appellants, v. Dean Maynard Boland, Defendant-Appellee.
• Court: Bankruptcy Appellate Panels. U.S. Bankruptcy Appellate Panel, Sixth Circuit

596 B.R. 532

IN RE: Dean Maynard BOLAND, Debtor.

Jane Doe; Jane Roe, Plaintiffs-Appellants,

v.Dean Maynard Boland, Defendant-Appellee.

No. 17-8019

United States Bankruptcy Appellate Panel of the Sixth Circuit.

Argued: May 8, 2018

Decided and Filed: February 13, 2019

GUY R. HUMPHREY, Bankruptcy Appellate Panel Judge.

Appellants, Jane Doe and Jane Roe, appeal a determination of the bankruptcy court that a civil judgment for statutory damages awarded pursuant to 18 U.S.C. § 2255 is dischargeable because Appellants failed to meet their burden under 11 U.S.C. § 523(a)(6).

I. ISSUES ON APPEAL

The issues Appellants raised are:

1. Whether the bankruptcy court erred when it discharged damages imposed upon Debtor pursuant to 18 U.S.C. § 2255 as a penalty for committing criminal conduct prohibited by 18 U.S.C. § 2252A by finding that Debtor was not substantially certain that he would injure the two minor Plaintiffs when he morphed their images into child pornography for public display as [court] exhibits [in criminal cases].

2. Whether the Doctrine of Collateral Estoppel precluded Debtor from denying in an adversary proceeding that he was substantially certain his actions would cause injury because it was determined ... in prior litigation between identical parties.

Statement of Issues Presented for Appeal, Adv. No. 16-01058 ECF No. 53.

As will be explained, the majority finds that the bankruptcy court did not err in determining that collateral estoppel did not apply on the issue of whether debtor Dean Boland intended to injure the Appellants since intent to injure was not actually litigated or necessary to the outcome of the prior federal litigation. However, the Panel concludes that the stipulations Boland made through his Pretrial Diversion Agreement and the decisions rendered by the United States District Court for the Northern District of Ohio and the Sixth Circuit Court of Appeals on the issue of his civil liability to Appellants established as a matter of law that Boland knowingly created and possessed pornographic images involving images of real children. Further, because the bankruptcy court misapprehended the nature of the harm the Appellants suffered, the Panel holds that the bankruptcy court made clearly erroneous findings as to Boland's intent to harm. The bankruptcy court did not consider the legal injury suffered by the Appellants as a result of the invasion of their privacy and reputational interests. Finally, the Panel concludes that Boland acted without justification or excuse thereby maliciously injuring Appellants within the meaning of 11 U.S.C. § 523(a)(6).

II. JURISDICTION AND STANDARD OF REVIEW

The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States District Court for the Northern District of Ohio has authorized appeals to the Panel, and no party has timely filed to have this appeal heard by the district court. 28 U.S.C. §§ 158(b)(6), (c)(1). A final order of the bankruptcy court may be appealed as of right. 28 U.S.C. § 158(a)(1). For the purpose of an appeal, a final order is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Midland Asphalt Corp. v. U.S. , 489 U.S. 794, 798, 109 S.Ct. 1494, 1497, 103 L.Ed.2d 879 (1989) (citations and internal quotations marks omitted). A determination of dischargeability is a final order. Trudel v. United States Dep't of Educ. (In re Trudel ), 514 B.R. 219, 222 (6th Cir. BAP 2014). See also Ritzen Grp., Inc. v. Jackson Masonry, LLC (In re Jackson Masonry, LLC ), 906 F.3d 494, 500 (6th Cir. 2018) (quoting Bullard v. Blue Hills Bank , ––– U.S. ––––, 135 S.Ct. 1686, 1694, 191 L.Ed.2d 621 (2015) (adversary proceedings are " ‘essentially full civil lawsuits carried out under the umbrella of the bankruptcy case[.]’ ").

A determination of the dischargeability of a debt presents mixed questions of law and fact. Kraus Anderson Capital, Inc. v. Bradley (In re Bradley ), 507 B.R. 192, 196 (6th Cir. BAP 2014). The appellate court "must break it down into its constituent parts and apply the appropriate standard of review for each part." Id. (citing Bank of Montreal v. Official Comm. of Unsecured Creditors (In re Am. HomePatient, Inc., Inc.) , 420 F.3d 559, 563 (6th Cir. 2005) (citations omitted) ). Legal determinations are reviewed de novo and factual findings are reviewed under the clearly erroneous standard. Bradley , 507 B.R. at 196. "Mixed questions are not all alike." U.S. Bank N.A., Trustee ex rel. CWCapital Asset Mgmt. v. Village at Lakeridge, LLC , ––– U.S. ––––, 138 S.Ct. 960, 967, 200 L.Ed.2d 218 (2018). "[T]he standard of review for a mixed question all depends—on whether answering it entails primarily legal or factual work." Id.

"Under a de novo standard of review, the reviewing court decides an issue independently of, and without deference to, the trial court's determination." Menninger v. Accredited Home Lenders (In re Morgeson) , 371 B.R. 798, 800 (6th Cir. BAP 2007) (citation omitted). Essentially, the reviewing court decides the issue "as if it had not been heard before." Mktg. & Creative Sols., Inc. v. Scripps Howard Broad. Co. (In re Mktg. & Creative Sols., Inc.) , 338 B.R. 300, 302 (6th Cir. BAP 2006) (citation omitted). "No deference is given to the trial court's conclusions of law." Id. A factual finding "is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Bradley , 507 B.R. at 196 (quoting Riverview Trenton R.R. Co. v. DSC, Ltd. (In re DSC, Ltd. ), 486 F.3d 940, 944 (6th Cir. 2007) (internal quotation marks and citation omitted) ). If the trial court's factual conclusion is "plausible in light of the record viewed in its entirety, the court of appeals may not reverse it ...." Anderson v. City of Bessemer City , 470 U.S. 564, 574, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985). Further, the appellate court cannot find clear error "[w]here there are two permissible views of the evidence," even if the appellate court weighs the evidence differently. King v. Zamiara , 680 F.3d 686, 694 (6th Cir. 2012) (citing Beaven v. U.S. Dep't of Justice , 622 F.3d 540, 556 (6th Cir. 2010) (citation omitted) ).

III. FACTS

Dean Boland, now known as Jack Boland, a lawyer licensed in Ohio, was an expert witness and defense counsel for criminal defendants charged in federal and state child pornography cases. His expertise was to demonstrate that pornographic images may be manipulated or altered to appear that minors were engaged in sexual conduct when they were not. To demonstrate this point, Boland purchased innocent images of minors from web pages that sold stock photos and included the images of those minors in pornographic images by altering or "morphing" the images. This type of expert testimony was apparently considered important because the defendants in these criminal cases argued they did not knowingly view or possess child pornography.

Between February 2004 and March 15, 2004, Boland downloaded innocent images of minors from two stock photo websites. Those photos were manipulated and included in images of sexual acts. Boland then displayed "before and after" versions of the images in criminal proceedings and opined about the use of computer technology to alter such images.

In 2004, an issue was raised while Boland was testifying as an expert witness in the criminal case of United States v. Shreck in the United States District Court for the Northern District of Oklahoma as to whether Boland committed a crime in creating and displaying these images of child pornography. Boland was instructed by the judge presiding over that case to delete the images from his computer. While Boland deleted the images from his computer, he did not permanently remove the images from his computer. Apparently fearing that he may be prosecuted in the Northern District of Ohio upon his return to Ohio if he flew back with the images on his computer, Boland shipped his computer by Federal Express to his mother in Ohio.

As a result of an investigation and a negotiation between Boland and the United States Attorney, on February 5, 2007, Boland voluntarily entered into a Pre-Trial Diversion Agreement (the "Diversion Agreement")¹ in the United States District Court for the Northern District of Ohio. The Diversion Agreement stated:

It appearing that you, Dean M. Boland, committed an offense against the United States from on or about March 16, 2004 through April 1, 2004, in violation of Title 18, United States Code, Section 2252A(a)(5)(B),² in that you did knowingly possess a computer and computer disks that contained images of child pornography, as defined in Title 18, United States Code, Section 2256(8),³ to wit, visual depictions created, adopted and modified to appear that Jane Doe 1, Jane Doe 2, Jane Doe 3, and Jane Doe 4, each a minor child, whose identity is known to the United States Attorney's Office ... was engaging in sexually explicit conduct, and which child pornography was produced using materials that had been shipped and transported in interstate and foreign commerce by any means including by computer.

Pre-Trial Diversion Agreement ("Trial Ex. 1") at 1-2, Adv. No. 16-01058 ECF No. 42-2 (footnotes added).⁴ A stipulation of facts was entered into on April 5, 2007 between Boland and the United States Attorney as part of the Diversion Agreement:

1. Between February, 2004, and March 15, 2004, Dean M. Boland (Boland) connected to the Internet from his home and office in the Northern District of Ohio. During that time period, and while connected to the Internet, Boland downloaded at least four (4) images, from the Internet, depicting four (4) real, identifiable minors in innocent poses. Boland knew or should have known that such images depicted real, identifiable minors. Boland downloaded two (2) such images from Istockphoto.com, a website located in Canada.

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