Westbury Vill. Ass'n v. Zweifel (In re Zweifel)
| Decision Date | 15 August 2016 |
| Docket Number | Case No. 14–55623,Adv. Pro. No. 14–2318 |
| Citation | 555 B.R. 659 |
| Parties | In re: Patricia A. Zweifel, Debtor. Westbury Village Association, Plaintiff, v. Patricia A. Zweifel, Defendant |
| Court | U.S. Bankruptcy Court — Southern District of Ohio |
Magdalena E. Myers, Kaman & Cusimano, Columbus, OH, for Plaintiff.
Nicole Marie Churchill, Barr, Jones & Associates, Columbus, OH, for Defendant.
This cause came on for consideration of the Plaintiffs Motion for Summary Judgment (Doc. # 23) (the “MSJ”), filed by Westbury Village Association. The defendant Patricia A. Zweifel has responded to the MSJ (Doc. # 26), and the plaintiff filed a reply (Doc. # 27).
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and General Order 05–02 entered by the United States District Court for the Southern District of Ohio, referring all bankruptcy matters to this Court. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(l).
The facts central to this case that are without serious dispute may be summarized as follows: Patricia A. Zweifel (“Debtor”) owns a condominium in a residential development known as Westbury Village Condominium. The Declaration of Covenants, Conditions, Restrictions and Assessments of Westbury Village Condominium and/or rules and regulations enacted by the Westbury Village Association (collectively, the “Declaration”) requires that residents restrain and control the activities of any dogs they may own. At all times relevant, Debtor owned two dogs. Debtor failed to control her dogs. Westbury Village Association (the “Association” or “Plaintiff”) filed suit against her in the Franklin County [Ohio] Common Pleas Court (the “State Court”) seeking an order directing Debtor to comply with the Declaration and control her dogs or remove them from the premises. Debtor and the Association reached an agreement, upon which the State Court entered an agreed order in May 2011 directing Debtor to take all actions necessary to confine her dogs to her condominium patio, and leash them when outside of her patio (the “Agreed Order”). Debtor failed to comply with the Agreed Order, and after notice and hearings, the State Court granted the Association a preliminary injunction against Debtor, followed by a permanent injunction (the “Injunction”) in July 2012, directing her to confine her dogs to her patio or have them on a leash, and to undertake all necessary steps to prevent the dogs from escaping her condominium patio and her control.
The Association was subsequently compelled to file three separate motions to procure Debtor's compliance with the Declaration, the Agreed Order and the Injunction. As a result of the first motion by the Association, the State Court conducted a trial and in December 2012, the court found that Debtor repeatedly violated the State Court Orders (the Agreed Order, the preliminary injunction, and the Injunction), and ordered her to remove her dogs from the premises. Debtor ignored the order. The Association followed with a second motion for contempt. Debtor failed to respond to this one. In May 2013, the State Court found Debtor in contempt of court and again ordered her to remove her dogs. The order alerted her that if she failed to illustrate that the dogs were removed, the court would impose a fine of $100 per day.
This woke up Debtor: she filed a motion for relief from the May 2013 order. After a hearing in July at which Debtor appeared, her motion for relief was denied. What's more, the State Court entered judgment against her for $5200 for failure to remove the dogs, and warned her that more fines would be forthcoming if she continued to be recalcitrant.
The Association filed a third motion for contempt in September 2013. After yet another evidentiary hearing, in December 2013 the State Court held that the evidence “shows intentional, repeated violations of the court's numerous orders.” The court noted that it had “repeatedly ordered [Debtor] to remove the dogs from the property and ... made clear the sanctions for failing to do so.” The court granted the Association judgment on the motions for contempt and fined Debtor $16,000 (the “Judgment”).
Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on August 8, 2014. The Association timely filed the Complaint commencing this adversary proceeding, seeking a determination that the debt owed the Association is not dischargeable pursuant to 11 U.S.C. § 523(a)(6).1 In the Complaint (followed by an Amended Complaint), the Association alleged that Debtor willfully disobeyed the Agreed Order, and acted maliciously in that she knew that her conduct was in violation of the Agreed Order and that the violation was almost certain to cause harm. The Association further alleged that the Agreed Order “made [Debtor] substantially certain that by failing to contain her dogs, she risked substantial injury to the Association.”
Because the overarching purpose of the Bankruptcy Code is to provide a fresh start to those in need of relief from the burden of their debt,2 exceptions to discharge are to be strictly construed against the complaining party. Rembert v. AT & T Universal Card Servs., Inc. (In re Rembert), 141 F.3d 277, 281 (6th Cir.1998).
However, the relief provided by the Bankruptcy Code is intended only for the “honest but unfortunate” debtor and not to protect perpetrators of fraud or those who engage in egregious conduct. Grogan, 498 U.S. at 287, 111 S.Ct. 654.
Section 523(a)(6) of the Bankruptcy Code provides in pertinent part:
11 U.S.C. § 523(a)(6).
The term “injury” is not defined by the Bankruptcy Code. The Seventh Circuit Court of Appeals has defined it as a “violation of another's legal right, for which the law provides a remedy.” First Weber Grp., Inc. v. Horsfall, 738 F.3d 767, 774 (7th Cir.2013) (citation and internal quotation marks omitted). The Sixth Circuit Court of Appeals has provided us further guidance:
[T]he injury must invade the creditor's legal rights. Section 523(a)(6)'s term “willful ... means a deliberate or intentional invasion of the legal rights of another, because the word ‘injury’ usually connotes legal injury (injuria) in the technical sense, not simply harm to a person.” In re Geiger, 113 F.3d 848, 852 (8th Cir.1997), aff'd, 523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998) ; accord In re McKnew, 270 B.R. 593, 640 (Bankr.E.D.Va.2001) ; In re Russell, 262 B.R. 449, 454 (Bankr.N.D.Ind.2001).
Steier v. Best (In re Best), 109 Fed.Appx. 1, *6 (6th Cir.2004).
In analyzing the statute, the United States Supreme Court has concluded that because the word “willful” modifies the word “injury,” § 523(a)(6) requires a “deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury.” Kawaauhau v. Geiger, 523 U.S. 57, 61, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998). Thus, an intentional or deliberate act alone does not satisfy the requisites of willfulness and maliciousness under § 523(a)(6). “[T]he actor [must] intend ‘the consequences of an act,’ not simply ‘the act itself.’ ” Id. at 61–62, 118 S.Ct. 974 (citation omitted). The Sixth Circuit Court of Appeals has recognized that “[t]he willful and malicious standard is a stringent one[.]” Steier v. Best (In re Best), 109 Fed.Appx. 1, *4 (6th Cir.2004).
Willfulness is shown when it is demonstrated that the debtor either had a desire to cause the consequences of his act, or believed that injury was substantially certain to result from his conduct. Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 464 (6th Cir.1999) (). See also Petralia v. Jercich (In re Jercich), 238 F.3d 1202, 1208 (9th Cir.2001). “ ‘[I]n addition to what a debtor may admit to knowing, the bankruptcy court may consider circumstantial evidence that tends to establish what the debtor must have actually known when taking the injury-producing action.’ ” Jett v. Sicroff (In re Sicroff), 401 F.3d 1101, 1106 (9th Cir.2005) (quoting Carillo v. Su (In re Su) , 290 F.3d 1140, 1146 n. 6 (9th Cir.2002) ), amended by, 2005 WL 843584, 2005 U.S.App. LEXIS 5919 (9th Cir.Cal. Apr. 11, 2005). The focus is on the debtor's state of mind. The fact that the debtor should have known the consequences of his actions is not sufficient to satisfy the requirements of willfulness. Markowitz, 190 F.3d at 465 n. 10. Similarly, damages arising from conduct which is reckless or negligent do not fall within the parameters of § 523(a)(6).
Kawaauhau, 523 U.S. at 59, 118 S.Ct. 974. Regarding what later became § 523(a)(6), the Senate Committee Report accompanying Senate Bill 2266, a precursor to the Bankruptcy Act of 1978, stated:
Paragraph (5) provides that debts for willful and malicious conversion or injury by the debtor to another entity or the property of another entity are nondischargeable. Under this paragraph “willful” means deliberate or intentional. To the extent that Tinker v. Colwell, [193 U.S. 473, 48 L.Ed. 754, 24 S.Ct. 505 (1904) ], held that a less strict standard is intended, and to the extent that other cases have relied on Tinker to apply a “reckless disregard” standard, they are overruled.
S. Rep. No. 95–989, at 79 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5855.
Maliciousness is “conscious disregard of one's duties or without just cause or excuse[.]” Wheeler v. Laudani, 783 F.2d 610, 615 (6th Cir.1986) ; Cash Am. Fin. Servs. v. Fox (In re Fox), 370 B.R. 104, 119 (6th Cir. BAP 2007). Maliciousness does “not require ill-will or specific intent to do harm.” Wheeler, 783 F.2d at 615 ; Fox, 370...
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