Court: United States Bankruptcy Court, E.D. Louisiana; October 31, 2018; Us Bankruptcy; United States Bankruptcy Court
On July 24 and 25, 2018, a trial was held in the adversary proceeding presided over by Hon. Elizabeth W. Magner, U.S. Bankruptcy Judge, with post-trial briefs due by September 21, 2018. Kami Kay Dehler, a certified naturopathic practitioner and midwife, participated in about 100 births across Oregon and Louisiana. Dehler, who moved to Louisiana in 2003 and was licensed in 2004, failed to secure the necessary obstetrician-gynecologist support for home deliveries, despite being aware of the legal requirements.
In April 2006, Dehler met the Moutons, who were seeking a home birth for their first child. She referred Marivette Mouton to Dr. Lapeyrolerie for an examination; however, he declined to act as a backup physician. Mouton opted out of genetic testing despite being advised due to her age. Dehler independently assessed Mouton as eligible for a home birth without receiving physician confirmation.
On October 23, 2006, Dehler and her apprentice, Karen Henshaw, were called to assist Mouton as labor began. They conducted basic assessments but did not perform a vaginal examination. After 36 hours of labor without detecting a fetal heartbeat, Dehler sought to use a doppler monitor, which the Moutons initially refused. Eventually, after 45 hours, Dehler insisted on using the monitor, but did not suggest transporting Mouton to a hospital, nor did the Moutons request it. Mouton gave birth on October 25, 2006, to an unresponsive baby. Despite Dehler's CPR efforts and emergency assistance, the baby was declared brain dead and taken off life support on November 4, 2006, with the cause of death listed as hypoxic ischemic encephalopathy.
On October 15, 2007, Dehler's midwifery license was suspended for thirty days due to an unrelated issue. Subsequently, on March 5, 2008, her license faced indefinite suspension pending a decision regarding the Mouton birth incident, leading to its revocation on June 16, 2008. The Moutons initiated legal action against Dehler in the 19th Judicial District Court of East Baton Rouge, resulting in a nonjury trial in January 2017. The court issued an oral ruling on January 24, 2018, followed by a written judgment on February 8, 2017, awarding the Moutons $600,000 against Dehler. On January 31, 2017, Ben and Kami Dehler filed for Chapter 7 bankruptcy. The deadline for objections to discharge was initially set for May 1, 2017, but was extended to June 30, 2017, after the Moutons filed a motion. On June 29, 2017, the Moutons submitted Proof of Claim 1 totaling $600,000 and filed a complaint to contest the discharge of the judgment under 11 U.S.C. 523(a)(6).
The Moutons aim to have the judgment deemed nondischargeable, asserting that the debt arises from 'willful and malicious injury' as defined in federal bankruptcy law. To succeed under section 523(a)(6), the creditor must demonstrate by a preponderance of the evidence that the debt qualifies as nondischargeable. The law specifies that for a debt to be nondischargeable, it must stem from willful and malicious injury, excluding debts from recklessness or negligence. Typical cases involving nondischargeable debts include intentional torts like assault and fraud, where the debtor intentionally causes injury. The Supreme Court clarified that 'willful' modifies 'injury,' meaning the injury must be intentional or deliberate, not merely the result of an intentional act. If the injury was not desired or anticipated, it does not qualify as 'willful and malicious injury.' The distinction between intentional acts and the resulting injuries may sometimes be ambiguous.
Miller was found by a jury to have misappropriated proprietary information and misused trade secrets, resulting in a $1 million damages award to his former employer. However, punitive damages were denied because the jury determined Miller acted without malice. Following this, Miller filed for bankruptcy, prompting his employer to contest the dischargeability of the judgment, arguing that the willful nature of Miller's actions rendered the damages nondischargeable. The Fifth Circuit Court of Appeals disagreed, clarifying that the term "intentional tort" does not automatically imply willful injury under section 523(a)(6) of the Bankruptcy Code. The Court specified that willfulness requires either an objective certainty of injury or a subjective intent to cause injury, asserting that simply classifying a tort as intentional does not imply willful injury is present. The Court cited an earlier case, In re Delaney, to underline that for a judgment to be nondischargeable, the debtor must have intended the resulting injury, not merely acted intentionally.
In a related case, In re Williams, the Fifth Circuit evaluated a breach of a collective bargaining agreement (CBA) by Williams, who employed non-union electricians after agreeing to hire union workers. Although the Court found Williams intentionally breached the CBA, it ruled that there was no evidence he intended to inflict damages. The Court noted that while the Union members lost job opportunities and non-union electricians were underpaid, the Union itself did not suffer directly. Furthermore, regarding claims of damage to the Union's reputation, the Court found no evidence that Williams intended to cause such damage or recognized a substantial certainty that it would occur.
The Circuit Court, referencing Kawaauhau, determined that debts resulting from intentional acts causing unintentional injuries are not inherently nondischargeable. It emphasized that exceptions to discharge must be explicitly stated, indicating that a debtor must have intended the specific injury or been aware of a substantial likelihood of its occurrence. The court clarified that foreseeability of the injury does not suffice; the debtor must either intend the harm or recognize that the likelihood of damage is significantly high. Legislative history of section 523(a)(6) indicates Congress did not intend for injuries resulting from "reckless disregard" to be classified as "willful and malicious." Here, "willful" is interpreted as deliberate or intentional, and precedents that suggest a looser standard for recklessness are overruled.
Negligence or gross negligence do not meet the criteria for "willful and malicious." Most cases revolve around whether a debtor's actions were substantially certain to lead to injury, judged from an objective standpoint at the time of the act or inaction. The excerpt provides specific case analyses:
1. In **Corley v. Delaney**, Delaney tapped a loaded gun on Corley's car but did not intend the resulting injury when the gun discharged.
2. In **Red v. Baum**, Red's action of driving into a bar was deemed substantially certain to cause harm, resulting in fatalities and injuries.
3. In **Caton v. Trudeau**, libelous statements were found to have a substantial certainty of causing injury, qualifying as willful and malicious.
4. In **Berry v. Vollbracht**, while Vollbracht's punches were likely to cause harm, the court remanded the case to consider the self-defense claim, which could negate the willfulness of the injury.
5. In **Shcolnik v. Rapid Settlements Ltd.**, Shcolnik's threat for payment in exchange for silence about violations led to a confirmed attorney fee award, with Rapid and Capstone contesting its dischargeability in bankruptcy.
The narrative underscores the distinction between intentional acts and the subjective intent to harm, along with the importance of objective certainty in determining dischargeability of debts in bankruptcy.
The Fifth Circuit ruled that Shcolnik's actions, if intended to impose litigation costs for a meritless claim or if such an outcome was highly likely, constituted 'willful and malicious' injury. Consequently, summary judgment was denied due to a genuine issue of material fact, and the case was sent back for trial. In Goaz v. Rolex Watch U.S.A. Inc., selling counterfeit Rolex watches was deemed substantially certain to harm Rolex. In Zimmerman v. Seuzeneau, a contractor's failure to return to an unfinished job after receiving final payment was similarly found to likely cause harm. In Cole v. Parson, Dr. Cole performed an unnecessary back surgery, which did not alleviate Mr. Parson's pain, leading to a malpractice suit that resulted in a $300,800 judgment against him. Dr. Cole's bankruptcy petition was deemed to not discharge this judgment under section 523(a)(6), affirming that the unnecessary surgery resulted in willful and malicious injury.
The Louisiana State Board of Medical Examiners regulates midwifes, who can only accept low to normal risk clients after a physician's assessment. Midwives must require a physical examination to confirm a client's low-risk status and are responsible for ongoing risk assessments. They have the authority to refuse care based on risk factors and must make referrals when necessary for the safety of the mother and baby. Midwives are explicitly prohibited from caring for clients under 16 or primiparas over 40.
Midwives are required to provide specific disclosures before agreeing to a home birth, including the risks and benefits associated with home births and alternative childbirth options. They must inform clients that regular antepartum care is necessary and that certain medical conditions or noncompliance may prevent midwife attendance. Clients must arrange for a backup physician within 50 miles, and the midwife will create a plan for consultation or referral to this physician when necessary. Emergency transport may be required in certain situations, and the midwife can terminate the agreement for the safety of the client. Prior to accepting a client, the midwife must consult with the physician who conducted the medical evaluation to confirm that the client is low or normal risk. After acceptance, the midwife must gather a detailed obstetric and medical history.
During labor, the midwife is obligated to seek medical consultation if there are concerning fetal heart rate patterns or if the labor does not progress as expected. In the case of Mouton, who was primipara and over 40 years old, Dehler, the midwife, was prohibited from accepting her as a client under Louisiana regulations. Although Dehler referred Mouton to a physician, she failed to consult regarding Mouton’s risk assessment and did not obtain necessary test results. Additionally, during labor, Dehler neglected to seek medical consultation when there were issues with the fetal heart rate and when labor stalled. The Moutons argue that Dehler's actions were so negligent that they were likely to result in their child's death, although they do not claim she intended to cause harm. Dehler operates under the belief that labor is a normal human process requiring minimal intervention, only acting in cases of observable distress.
Dehler, a midwife, assessed labor progression based on maternal behavior and contraction intensity rather than standard medical procedures. She violated multiple provisions of the Louisiana Administrative Code, including failing to obtain an ob-gyn's risk assessment, not having an ob-gyn on call, and not contacting an ob-gyn when labor exceeded 24 hours without fetal heart rate detection. These violations led to her license revocation. The critical legal question is whether her actions were substantially certain to cause injury to the baby. Expert testimony from Dr. Marshall St. Amant, a specialist in maternal-fetal medicine, established that a pregnancy is 'high risk' for mothers aged 35 and older, and that prolonged labor of 20-24 hours poses significant risks, with dramatic increases in fetal harm risk beyond 24 hours. Dr. St. Amant indicated that the Mouton baby died from hypoxic ischemic encephalopathy due to oxygen deprivation caused by the extended labor of 53 hours, exacerbated by placental deterioration. He stated that had the mother been transferred to a hospital after 24 hours, the baby would have had a 50% chance of survival. Dr. St. Amant concluded Dehler's actions and inactions were substantially certain to result in severe injury or death, though he did not guarantee outcomes for all cases of prolonged labor. He emphasized that no labor should exceed 24-27 hours, as risks escalate with every additional quarter hour. Dehler's personal experience did not lead her to believe that prolonged labor or maternal age were significant risks, as she had previously managed over 100 births without similar complications. Her philosophy favored midwifery and natural childbirth, leading to distrust of medical interventions. She had only transported patients to hospitals on three occasions.
Dehler holds a philosophy that views God as the creator and sustainer of life, believing in the importance of medical intervention when necessary, such as in the case of cesarean sections (c-sections). She expressed concern over Louisiana's high c-section rate, advocating for minimizing unnecessary procedures to protect maternal and child health. The Court observed that Dehler is skeptical of the medical community's benefits compared to her own capabilities, supported by her personal experience of two deaths in 99 births, both of which she was cleared of wrongdoing. Dr. St. Amant presented statistics indicating that home births have a death rate of approximately 3.8 per 1,000, while hospital births reduce that rate to 1.9. Louisiana regulations permit home births only for low to normal risk patients, necessitating a physician on standby and requiring midwives to consult with physicians if labor stalls. These regulations aim to identify at-risk pregnancies and prevent severe injuries. The Court concluded that while Dehler was exceptionally negligent and likely reckless in her practice, there was no evidence of willful or malicious intent regarding the Mouton baby's death. Sympathy or fairness does not equate to proof of intent. Ultimately, the Court ruled in favor of Dehler, dismissing the Moutons' claims against her.
Dehler and Henshaw provided credible testimony indicating the Moutons did not mention visiting the hospital. The court acknowledges this credibility. The case involves HIE, a brain injury due to oxygen deprivation. In the case Mouton v. Dehler, the court awarded $600,000 total: $300,000 for survival action damages and $300,000 for wrongful death. The judgment, rendered orally before a bankruptcy petition, did not breach the automatic stay as per legal precedents. Dehler did not assert any violation of the stay. Relevant case law indicates that a finding of reckless disregard is outside the scope of section 523(a)(6) of the Bankruptcy Code. The court references Tinker v. Colwell, which held that intentional acts leading to harm are nondischargeable, irrespective of malice. The expert disagreement on substantial certainty of harm implies that reasonable minds could differ on liability, as established in Weatherall Radiation Oncology v. Caletri. The Fifth Circuit upheld that earlier cases, such as Delaney, remain valid law despite Supreme Court decisions.
Licensed midwives are authorized to care for low-risk patients, identified through physician evaluation and examination as being normal for pregnancy and childbirth and at minimal risk of medical complications. This care must occur under the supervision of a physician actively practicing obstetrics. The term "primipara" refers to a woman giving birth for the first time. Relevant regulatory references include La. Admin. Code 46:XLV.5301, 46:XLV.5311, 46:XLV.5315, 46:XLV.5309, and 46:XLV.5361A, among others. The document also cites specific transcript pages from a hearing (Tr. T. 7/24/18 and 7/25/18) that include various line references pertinent to the discussion, as well as a case citation, Northshore Neurological Surgery Assoc. v. Provenza, 316 B.R. 177, 221 (Bankr. E.D. La. 2003).
