Jendusa-Nicolai v. Larsen

Citations: 677 F.3d 320; 67 Collier Bankr. Cas. 2d 780; 2012 U.S. App. LEXIS 7793; 56 Bankr. Ct. Dec. (CRR) 90; 2012 WL 1324245Docket: 11-1256

Court: Court of Appeals for the Seventh Circuit; April 18, 2012; Federal Appellate Court

Original Court Document: View Document

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David M. Larsen, having been convicted of attempted murder and sentenced to life imprisonment for severely injuring his ex-wife Teri Jendusa-Nicolai, sought to discharge a $3.4 million judgment against him in bankruptcy court. This judgment stemmed from a Wisconsin state court ruling for battery, false imprisonment, and intentional infliction of emotional distress, alongside a $300,000 award for loss of consortium to her husband and daughters. The bankruptcy court determined that Larsen's debts were nondischargeable under 11 U.S.C. § 523(a)(6), as they constituted "willful and malicious injury" based on findings from the state court judgment, which were protected by collateral estoppel. 

The court clarified that for a debt to be considered nondischargeable under this section, the injury must be intentional, not merely the result of an intentional act. Larsen contended that the Wisconsin court did not find he specifically intended the injuries, like the loss of his ex-wife’s toes. However, the court noted that his attempted murder conviction inherently indicated his intent to harm, making the injuries foreseeable consequences of his actions. Furthermore, Larsen argued that punitive damages should not be classified as "willful and malicious injury," but the court ruled that punitive damages are indeed a result of such injury and thus part of the nondischargeable debt. Lastly, Larsen claimed he did not intend to harm his ex-wife’s husband or children, asserting their claims were derivative; however, the court maintained that those claims were valid under the circumstances.

Claims for loss of consortium that arise from willful and malicious injuries are deemed nondischargeable in bankruptcy, paralleling the treatment of punitive damages and wrongful-death claims. Although no appellate case directly addresses this specific issue, existing case law supports this conclusion. Relevant cases illustrate that debts tied to wrongful-death suits remain nondischargeable even when the claimant is not the direct victim but rather the victim's estate or representative.

The interpretation of "willful and malicious" injury varies among circuit courts, leading to inconsistent definitions that do not significantly affect outcomes. For instance, the Second Circuit views "malicious" as wrongful without needing personal animosity, while the Fifth Circuit links it to either a substantial certainty of harm or an intent to cause harm. The Sixth Circuit defines "willful" as intentional and "malicious" as disregarding one's duties, stating that intent to harm isn't always necessary. The Eleventh Circuit adopts a definition similar to the Sixth Circuit’s. The Eighth Circuit requires conduct to be almost certain to cause harm for it to be considered "malicious," while the Ninth Circuit mandates evidence of either intent to inflict injury or a belief that injury was substantially certain, alongside criteria for a "malicious" act. These divergent definitions highlight a broader judicial inconsistency regarding the interpretation of section 523(a)(6).

The Tenth Circuit in Panalis v. Moore defined 'willful' and 'malicious' actions in the context of bankruptcy discharge, clarifying that 'willful' indicates the debtor’s desire to cause harm or belief that harm is substantially certain. 'Malicious' actions require proof of intent to harm or actions that are substantially certain to result in injury. The excerpt highlights inconsistencies in terminology across circuits, such as the confusion between 'malice' and the resulting harm, and the lack of uniform definitions among courts. Despite these ambiguities, it asserts a consensus that willful and malicious injuries—where the injurer acts without legal justification and with intent or knowledge of likely harm—should not be discharged in bankruptcy. The document emphasizes the Bankruptcy Code's purpose of providing a fresh start to honest debtors, while also noting that such relief is not meant for those who are not honest, exemplified by the case of Larsen, whose debts from a violent attack on his ex-wife were rightfully not discharged. The decision was affirmed.