Judgments Arising From Intentional Torts Are Not Dischargeable In Bankruptcy

You cannot try to murder your ex-wife and then avoid a judgment against you for compensatory or punitive damages by filing bankruptcy.

The Court of Appeals for the Seventh Circuit rejected the effort of David Larsen to use the bankruptcy system to avoid his financial obligation to his former wife.  Larsen tried to kill Teri Jendusa-Nicolai and, although his effort was unsuccessful, she suffered a miscarriage and the amputation of all of her toes.  The toes were amputated secondary to frostbite – the jerk beat her with a baseball bat and left her in a garbage can filed with snow, secreting the can in an unheated storage facility.

A civil suit was filed, resulting in a judgment of $3.4 million for her and $300,000 for her (then) husband and daughters for loss of consortium.  Larsen then filed a Chapter 7 proceeding seeking to discharge the judgment debts.

The 7th Circuit affirmed the decision of the lower courts, holding that the debts were not dischargeable because   they  were debts “for willful  and malicious injury  by  the debtor to another entity or  to  the property of another  entity”  within  the meaning of  11 U.S.C. § 523(a)(6).

For a debt to be nondischargeable under this provision, a deliberate or intentional injury is required, not merely a deliberate or intentional act that leads to injury.  Kawaauhau v. Geiger, 523  U.S. 57, 61-62  (1998).

Larsen attempted to argue that he did not intend to cause the specific injuries suffered by his ex-wife – such as the loss of her toes.  The Court quickly rejected this argument, holding that "obviously he  intended to injure  her—he was convicted of attempted murder, after all—and the  destruction of her  toes and the miscarriage were foreseeable consequences of the intent ional torts that gave rise to  the debt he seeks to discharge."

Likewise, the debt arising from the judgment for $1.5 million in punitive damages was not dischargeable because it was " a debt consequent upon a willful and malicious injury."

Finally, Larsen argued that he should not be liable for the loss of consortium damages because he did not intend to injury his ex-wife’s husband or her children.   That argument too was rejected, the Court holding that these losses arose from his malicious conduct.  The Court explained that the Bankruptcy Code exists in part to help the "honest but unfortunate debtor," and that Larsen did not fall within that category.

This opinion serves as a good reminder of the law on this subject and, in fact, it is now the only opinion in our jurisprudence that addresses the dischargeability of loss of consortium judgments in such circumstances.

The case is Jendus-Nicolai v. Larsen, No. 11-1256 (7th Cir. April 18, 2012).

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