In re Wellever, Bankruptcy No. HM 87 00191

• Decision Date: 25 July 1989
• Docket Number: Bankruptcy No. HM 87 00191,Adv. No. 88 0001.
• Citation: 103 BR 856
• Parties: In re Glenn E. WELLEVER, Debtor. Gina Kathleen HUNNICUTT, Plaintiff, v. Glenn E. WELLEVER, Defendant.
• Court: U.S. Bankruptcy Court — Western District of Michigan

103 B.R. 856 (1989)

In re Glenn E. WELLEVER, Debtor Gina Kathleen HUNNICUTT, Plaintiff, v. Glenn E. WELLEVER, Defendant.

Bankruptcy No. HM 87 00191, Adv. No. 88 0001.

United States Bankruptcy Court, W.D. Michigan.

July 25, 1989.

Robert D. Heikkinen, Marquette, Mich., Bruce W. Brouillette, Iron Mountain, Mich., for the debtor.

Darrell R. Dettmann, Marquette, Mich., for plaintiff.

Donald W. Bays, Marquette, Mich., for the Trustee.

Kenneth C. Smith, Hancock, Mich., Trustee.

OPINION

COLLATERAL ESTOPPEL EFFECT OF A STATE COURT JUDGMENT ON DISCHARGEABILITY PROCEEDINGS

LAURENCE E. HOWARD, Chief Judge.

On April 26, 1989, I heard and granted from the bench the motion of the plaintiff, Gina Kathleen Hunnicutt, for partial summary judgment against the debtor, Glenn E. Wellever, under 11 U.S.C. § 523(a)(6). The following opinion restates my bench opinion and is intended to expand upon and clarify that opinion.

Previously, I had denied the plaintiff's motion for summary judgment on the grounds that the plaintiff had not provided me with enough of the state court record that she was relying upon to determine whether I could give collateral estoppel effect to the state court judgment under Spilman v. Harley, 656 F.2d 224 (6th Cir. 1981). The plaintiff has now renewed her motion and has supplied me with larger parts of that state court record.

The plaintiff, Gina Kathleen Hunnicutt, is a pre-petition judgment creditor of the debtor based on two Oklahoma state court judgments, one a jury verdict in the amount of about $45,000, and the other a default judgment in the amount of about $5,000. Subsequent to the entry of these judgments, the debtor filed a petition under Chapter 7 of the Bankruptcy Code initiating this bankruptcy case. The plaintiff then filed this adversary proceeding seeking to have the debts due to her declared nondischargeable under 11 U.S.C. § 523(a)(6). The plaintiff has now moved for summary judgment as to the jury verdict only.

The following background facts are undisputed and are provided only to put this case into context. On April 1, 1985, in Wilburton, Oklahoma, the plaintiff's mother, Geraldine Wellever, and her brother, Gregory Wellever, were killed by gunshots and the plaintiff's father, debtor Glenn E. Wellever, was wounded. Plaintiff, Gina Hunnicutt, was charged with responsibility for these acts, arrested, tried and acquitted by a unanimous jury verdict of Latimer County District Court, Oklahoma, on September 6, 1985. Gina Hunnicutt then sued Glenn Wellever on a malicious prosecution theory, alleging that the only reason she was arrested, charged and tried was because he had identified her as the killer when in fact he knew she was not the killer. Glenn Wellever denied these allegations. On June 17, 1987, the jury found for Gina Hunnicutt in the amount of or about $34,806.75. On August 18, 1987, judgment was entered upon this verdict in the total amount of or about $45,025.75, including interest and attorney's fees. This is the verdict on which the plaintiff asks for summary judgment.

Earlier I denied this motion for summary judgment because the plaintiff had provided me with copies of only two documents, her Oklahoma complaint, and the Oklahoma order setting forth the jury's verdict. I held these documents to be insufficient for me to determine whether the issues raised under § 523(a)(6) had also been "actually litigated" in the Oklahoma proceeding and if they were "necessary to the decision" in the Oklahoma state court. The plaintiff has now supplied me with a copy of the jury instructions and the jury verdict. The jury instructions set forth the elements of malicious prosecution under Oklahoma law, which would be the issues determined by the jury. These elements must be compared with the requirements of § 523(a)(6).

Section 523(a)(6) provides that:

(a) A discharge under section 727, 1141, 1228(a), 1228(b) or 1328(b) of this title does not discharge an individual debtor from any debt . . .

(6) for willful and malicious injury by the debtor to another entity or to the property of another entity.

Of this section, the Sixth Circuit has said that:

Under § 523(a)(6) of the Bankruptcy Code "willful means deliberate or intentional." S.Rept. No. 95-989, 95th Cong. 2nd Sess. (1978) reprinted in 1978 U.S. Code Cong. & Ad.News 5787, 5865; H.Rept. No. 95-595, 95th Cong. 1st Sess. (1977), reprinted in 1978 U.S.Code Cong. & Ad.News 5963, 6320. "Malicious" means in conscious disregard of one\'s duties or without just cause or excuse; it does not require ill-will or specific intent to do harm. Tinker v. Colwell, 193 U.S. 473, at 486, 24 S.Ct. 505, at 508, 48 L.Ed. 754 (1904); In re Voltolini, 48 B.R. 199, 201 (Bankr.D.Mass.1985); In re Capparelli, 33 B.R. 360, 365 (Bankr.S.D.N.Y. 1983); In re Klix, 23 B.R. 187, 7 C.B.C. 2d 276, 279 (Bankr.E.D.Mich.1982).

Wheeler v. Laudani, 783 F.2d 610, 615 (6th Cir.1986). In Perkins v. Scharffe, 817 F.2d 392 (6th Cir.1987) the Sixth Circuit held that to be nondischargeable under § 523(a)(6) an act committed by the debtor need only be intentional on the debtor's part and necessarily lead to injury; it is not necessary that the debtor intend to cause the injury, merely "the intentional doing of an act that necessarily leads to injury." 817 F.2d at 394. Furthermore, the Sixth Circuit quoted Collier's to the effect that:

In order to fall within the exception of section 523(a)(6), the injury to an entity or property must have been willful and malicious. An injury to an entity or property may be a malicious injury within this provision if it was wrongful and without just cause or excessive, even in the absence of personal hatred, spite, or ill-will. The word "willful" means "deliberate or intentional," a deliberate and intentional act which necessarily leads to injury. Therefore, a wrongful act done intentionally, which necessarily produces harm and is without just cause or excuse, may constitute a willful and malicious injury.

817 F.2d at 394, quoting 3 Collier on Bankruptcy, 523-111 (15th ed. 1986). These are the standards the case must be compared with.

Instruction No. 3 from the Oklahoma case told the jury they must decide whether or not the plaintiff's theory was correct. It described the plaintiff's claim as being that Glenn E. Wellever "falsely and maliciously named her as the person who fired . . . the shots . . . and thereby caused her wrongful imprisonment and prosecution," that "Glenn E. Wellever knew that his accusation against the plaintiff, Gina Kathleen Hunnicutt, was false, . . . that as a result of the accusation she was incarcerated in the Latimer County Jail," and that "as a result of the false accusation of the defendant, Glenn E. Wellever, she sustained damages."

Instruction No. 4 states that:

In order for Plaintiff, Gina Kathleen Hunnicutt, to recover from Defendant, Glenn E. Wellever, on his (sic) claim, you must find that all six (6) of the following have been established.

1. That a prosecution for two Counts of First Degree Murder and one Count of Shooting with Intent to Kill was commenced against Plaintiff, Gina Kathleen Hunnicutt;

2. That the prosecution was malicious;

3. That the prosecution was instituted or instigated by Defendant, Glenn E. Wellever;

4. That the prosecution was without probable cause;

5. That the prosecution has been legally and finally terminated in favor of Plaintiff, Gina Kathleen Hunnicutt; and

6. That as a result of the criminal prosecution, Plaintiff, Gina Kathleen Hunnicutt, sustained injury.

Instruction No. 6 states that, "In order to establish express or actual malice, the action complained of must have been done with ill will or hatred, or willfully done in a wanton or oppressive manner, and in conscious disregard of the other's right." Instruction No. 8 states that, "Malice existed if the principal motive of the defendant, Glenn E. Wellever, was other than a desire to bring an offender to justice." Instruction No. 9 provides that:

You are instructed that probable cause constitutes a complete defense in a action for malicious prosecution. Upon proof of probable cause other elements such as malice and conspiracy are immaterial.

"Probable cause" is defined at Instruction No. 7 as follows:

Probable cause was present if the facts and circumstances known to Defendant, Glenn E. Wellever, was (sic) such as to justify a man of prudence and caution in believing that the action of filing suit or complaint against the Plaintiff, Gina Kathleen Hunnicutt, was justified.

At Instruction No. 10 the jury was further instructed "that the lack of probable cause can never be inferred from malice alone," and at No. 12, "that the fact that the action which is alleged to constitute the malicious prosecution has been terminated in favor of the complaining party is of itself insufficient to establish lack of probable cause on the part of the defendant, Glenn E. Wellever, in an action for malicious prosecution." Instruction No. 16 instructed the jury, "If you find in favor of the plaintiff, Gina Kathleen Hunnicutt, you shall assess as her actual damages an amount that will fairly and justly compensate the Plaintiff, Gina Kathleen Hunnicutt, for the malicious prosecution."

The jury found for Gina Kathleen Hunnicutt and set her actual damages at $34,806.75.

Reading the jury instructions and comparing them with § 523(a)(6) and the Sixth Circuit interpretation of that section, I am left with the definite conviction that the Oklahoma jury faced and decided all the factual issues which are predicates to nondischargeability under § 523(a)(6). In order to find for the plaintiff as they did, the jury had to find that Glenn Wellever, with malice and without probable cause, instituted or instigated a prosecution for murder which failed to convict her but which did cause her injury. Malice is defined in the jury instructions as an action "done with ill will or hatred, or willfully done in a wanton or oppressive manner, and in...