In re Thompson

• Decision Date: 14 December 1993
• Docket Number: Bankruptcy No. 91-20648. Adv. No. 91-2042.
• Citation: 162 BR 748
• Parties: In re Michele THOMPSON, Debtor. Michael F. MERRITT, Plaintiff, v. Michele G. THOMPSON, Defendant.
• Court: U.S. Bankruptcy Court — Eastern District of Michigan

162 B.R. 748 (1993)

In re Michele THOMPSON, Debtor.

Michael F. MERRITT, Plaintiff, v. Michele G. THOMPSON, Defendant.

Bankruptcy No. 91-20648. Adv. No. 91-2042.

United States Bankruptcy Court, E.D. Michigan, S.D. Flint.

December 14, 1993.

Robert Detweiler, Howell, MI, for plaintiff.

Dani K. Liblang, Bloomfield Hills, MI, for debtor/defendant.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND OPINION REGARDING NONDISCHARGEABILITY

ARTHUR J. SPECTOR, Bankruptcy Judge.

INTRODUCTION

On December 5, 1986, Michele Thompson gave birth out of wedlock to a daughter, Kaitlen. Approximately two years later, Thompson prevailed in a paternity action brought against Michael Merritt in Livingston County Circuit Court, and Merritt was ordered to pay child support.

In September of 1990, Merritt sued Thompson in Genesee County Circuit Court for defamation. The action was based on statements allegedly made by Thompson to health care personnel, Child Protective Services (an agency of the Michigan Department of Social Services), and various other officials (collectively, the "authorities"), to the effect that Merritt had physically, sexually and emotionally abused Kaitlen. Thompson was interviewed by Barbara McClellan, a reporter for the Detroit News, in March, 1991. An article by McClellan describing the ongoing dispute between Merritt and Thompson was subsequently published in the March 25, 1991, edition of that newspaper.

Thompson filed a petition for relief under chapter 7 of the Bankruptcy Code on May 13, 1991. Merritt then initiated this adversary proceeding by filing a complaint alleging that Thompson was indebted to him in the amount of $250,000, based on the same statements as were the subject of the state-court lawsuit, as well as comments allegedly made by Thompson to McClellan. The complaint sought a determination that the debt is nondischargeable pursuant to 11 U.S.C. § 523(a)(6).

I have jurisdiction to hear and determine this action, 28 U.S.C. § 1334, which is a core proceeding. 28 U.S.C. § 157(b)(2)(I). This opinion contains my findings of fact and conclusions of law pursuant to F.R.Bankr.P. 7052. For the reasons which follow, I hold that the statements made by Thompson to McClellan gave rise to a nondischargeable debt in the amount of $1,050.

DISCUSSION

Section 523(a) excepts from discharge "any debt — (6) for willful and malicious injury by the debtor to another entity." Merritt bore the burden of proving that the debt owed to him is nondischargeable under this statute. Grogan v. Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 661, 112 L.Ed.2d 755 (1991). More fundamentally, Merritt also had to prove that Thompson is in fact indebted to him — an issue which is determined by nonbankruptcy law. In re Caldwell, 111 B.R. 836, 837 (Bankr.C.D.Cal.1990); 4 Collier on Bankruptcy, ¶ 541.021 (15th ed. 1993). I will first consider the applicability of § 523(a)(6) to the facts of this case, and then address the question of liability and damages.

I. Nondischargeability

A. Legal Standard

An act is willful under § 523(a)(6) if it is "done intentionally." In re Woolner, 109 B.R. 250, 254 (Bankr.E.D.Mich.1990). See also Vulcan Coals v. Howard, 946 F.2d 1226, 1228 (6th Cir.1991). It is malicious if the "actor knows that the act is substantially certain to result in harm to another," and if there is no "just cause or excuse" for the act. Woolner, 109 B.R. at 254. See also Perkins v. Scharffe, 817 F.2d 392, 394 (6th Cir.), cert. denied, 484 U.S. 853, 108 S.Ct. 156, 98 L.Ed.2d 112 (1987); Wheeler v. Laudani, 783 F.2d 610, 615 (6th Cir.1986).¹

Before tackling the often problematic questions concerning whether an act was "willful and malicious," however, care must be taken to specify exactly what "act" is to be subject to judicial scrutiny. Assume, for example, that the nondebtor plaintiff was wounded when the defendant/debtor fired a shot into a crowd of people out of boredom, without aiming at anyone in particular. The better view is that the plaintiff's injury was willfully inflicted because the debtor did not "accidentally" fire the gun. See In re Hartley, 100 B.R. 477, 479 (W.D.Mo.1988), rev'd, 869 F.2d 394 (8th Cir.), vacated, 874 F.2d 1254 (8th Cir.1989). But if the offensive act is instead defined as shooting the plaintiff, then the debt is discharged because that act was not intentional. See Hartley, 869 F.2d at 395 (debtor did not act willfully in throwing a firecracker into a basement permeated with gasoline fumes as a prank because "it is the injury to the creditor which must have been intentional — not the action of the debtor which caused the accident").² As this hypothetical illustrates, the disposition of a complaint brought under § 523(a)(6) will often turn on how one characterizes the injury-producing act.

That characterization must take into account the Sixth Circuit's opinion in Wheeler, supra. The Wheelers sued the debtor Laudani for a determination that a state-court libel judgment they obtained was nondischargeable under § 523(a)(6). The judgment was based on a document published and distributed by Laudani which contained statements accusing the Wheelers "of exploiting Mr. Wheeler's public office of City Councilman for personal benefit." 783 F.2d at 611.

Because Mr. Wheeler was a public official, the Wheelers had to prove in state court that Laudani published the defamatory statements "with `actual malice' . . . i.e., with `knowledge that the statements were false or with reckless disregard of whether they were false or not.'" Id. at 615 (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 726, 11 L.Ed.2d 686, 706 (1964)). It was apparently for this reason that the bankruptcy court granted summary judgment in the Wheelers' favor, on the theory that the state-court judgment "necessarily encompassed a finding that Laudani acted willfully and maliciously." 783 F.2d at 611. The district court affirmed, but the Sixth Circuit reversed, explaining as follows:

The intentional tort of libel meets the requirements of § 523(a)(6) for nondischargeability when the debtor/author knows the published statements were false. In re Kasler, 611 F.2d 308, 310, 311 (9th Cir.1979). Mere reckless disregard for the truth or falsity of the statement, which can support a libel verdict, is not a willful and malicious injury for purposes of § 523(a)(6). Id.; In re Pereira, 44 B.R. 248 (Bankr.D.Mass.1984).

Id. at 615.

The foregoing passage lends itself to two plausible interpretations. On the one hand, Wheeler may be asserting that "mere reckless disregard" as to the accuracy of a defamatory statement is inconsistent with a finding of willfulness. See In re Grim, 104 B.R. 486, 489 (Bankr.S.D.Fla.1989) (favorably citing Wheeler and opining that "knowledge of falsity . . . constitutes willful conduct"). On the other hand, Wheeler may simply stand for the proposition that such disregard is not malice. See In re Goidel, 150 B.R. 885, 888 (Bankr.S.D.N.Y.1993) (citing Wheeler in support of the assertion that "malice . . . is established if the debtor knew the defamatory statement was false when made").

Unfortunately, reference to the two cases cited by Wheeler in the quoted excerpt provides no insights regarding this ambiguity because they contradict one another. Compare Kasler, 611 F.2d at 310-11 ("`Willfulness' denotes that the speaker knew his statements were false.") with Pereira, 44 B.R. at 251 ("Malice . . . means that the author knew the statements made were false."). For the reasons which follow, however, I believe that Wheeler held that reckless disregard of the truth is relevant only to the malice inquiry.

Implicit in the proposition that reckless disregard for the truth evinces non-willful conduct is the premise that the allegedly "willful and malicious" act is the publication of a false defamatory statement.³ And as will be explained below, I do not believe that the Sixth Circuit would endorse such a view.

In cases involving libel or slander, the act which results in injury is, by definition, the publication of a defamatory statement. See, e.g., Rouch v. Enquirer & News of Battle Creek, 440 Mich. 238, 251, 487 N.W.2d 205 (1992), cert. denied, ___ U.S. ___, 113 S.Ct. 1401, 122 L.Ed.2d 774 (1993) ("Rouch II") ("A communication is defamatory if it tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him." (citation omitted)); Locricchio v. Evening News Ass'n, 438 Mich. 84, 115, 476 N.W.2d 112 (1991), cert. denied, ___ U.S. ___, 112 S.Ct. 1267, 117 L.Ed.2d 495 (1992) ("A defamatory communication is one which . . . `harms a person's reputation.'" (citation omitted)). And just as a gunshot victim's chances of survival are not dependent on whether he was the assailant's intended target, a statement's potential for damaging a person's reputation is not necessarily a function of its veracity. For example, there is no reason to assume that a politician's career will be less damaged by a newspaper article describing him as an alcoholic if the assertion were accurate than if it were totally unfounded. Cf. Wilson v. Scripps-Howard Broadcasting Co., 642 F.2d 371, 376 (6th Cir.), cert. dismissed, 454 U.S. 1130, 102 S.Ct. 984, 71 L.Ed.2d 119 (1981) ("In libel and slander cases generally, there is no particular causal connection between the proved fact (the making of a derogatory statement) and the presumed fact (the falsity of the statement). There is no particular reason to presume falsity.").

This basic principle is recognized by the law on slander and libel. That the defamatory statement happens to be true will generally render the publication not actionable, but it does not render it any less defamatory — i.e., injurious. See, e.g., 50 Am.Jur.2d Libel and Slander § 173. A simple hypothetical will demonstrate why falsity of the published statement should not be incorporated into the definition of the injurious act...