Opinion
Case No. 8:13-bk-00922-RCT Adv. No. 8:13-ap-00629-RCT
02-28-2019
In re: Casey Marie Anthony, Debtor. Roy Kronk, Plaintiff, v. Casey Marie Anthony, Defendant.
Chapter 7 MEMORANDUM DECISION GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DETERMINING PLAINTIFF'S DEFAMATION CLAIM TO BE DISCHARGEABLE
Defendant Casey Marie Anthony was indicted, tried, and acquitted of the capital crime of murdering her daughter Caylee Marie Anthony. Her trial in 2011 was a media frenzy, fostered in part by her attorneys Jose Baez, Andrea Lyons, and Linda Kenney-Baden.
Plaintiff Roy Kronk was the meter reader who led investigators to Caylee Marie's body. He was a witness at trial. He was also the subject of television and print stories covering the trial.
During the criminal proceedings, Casey Anthony's attorneys filed a motion in limine that implicated Mr. Kronk in the crime. The attorneys then went on television to advance their defense of Ms. Anthony on this basis. Mr. Kronk's ex-wives and son, whose statements were in part the factual basis of the motion in limine, apparently joined in the barrage against him by either testifying at trial or appearing in the media.
From the time of her indictment in October 2008 until her acquittal, Casey Anthony sat in the Orange County jail. There is no dispute that she never personally said anything to implicate Mr. Kronk in the crime—either inside or outside the courtroom.
Once the criminal case concluded, Mr. Kronk sued Casey Anthony for defamation. Ms. Anthony thereafter filed the underlying chapter 7 bankruptcy and received her general discharge. Mr. Kronk now seeks to except his defamation claim from that discharge.
The issue presented is whether Casey Anthony willfully and maliciously injured Mr. Kronk, within the meaning of § 523(a)(6) of the Bankruptcy Code, through the acts of her attorneys. Ms. Anthony moves for summary judgment.
Statutory references are to 11 U.S.C. §§ 101-1532 ("Code" or "Bankruptcy Code"), unless stated otherwise.
Summary Judgment Standard
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In this context, "[a] genuine factual dispute exists only if a reasonable fact-finder 'could find by a preponderance of the evidence that the [non-movant] is entitled to a verdict [in its favor].'" Though all reasonable inferences to be drawn from the underlying facts must be viewed in the light most favorable to the non-movant, "inferences based upon speculation are not reasonable."
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. Civ. P. 56(c) (1963) (later amended and relocated, in part, to Fed. R. Civ. P. 56(a)); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986); see generally Fed. R. Civ. P. 56(a) (made applicable to this proceeding by Fed. R. Bankr. P. 7056).
Kernel Records Oy v. Mosley, 694 F.3d 1294, 1300 (11th Cir. 2012) (quoting Anderson, 447 U.S. at 252).
Id. at 1301 (quoting Marshall v. City of Cape Coral, 797 F.2d 1555, 1559 (11th Cir. 1986)).
The moving party bears the initial burden of articulating the basis for its motion and identifying evidence which shows that there is no genuine issue of material fact. Thereafter, the burden shifts and the non-moving party must set forth specific facts showing that there is a genuine issue for trial. In so doing, the non-moving party may not rely on the "mere allegations or denials of [its] pleadings." And "[a] mere scintilla of evidence in the form of conclusory allegations, legal conclusions, or evidence that is merely colorable or not significantly probative of a disputed fact cannot satisfy [the non-moving] party's burden."
See, e.g., Celotex, 477 U.S. at 323; Kernel Records Oy, 694 F.3d at 1300.
Kernel Records Oy, 694 F.3d at 1300.
Marshall v. City of Cape Coral, 797 F.2d 1555, 1559 (11th Cir. 1896) (quoting Fed. R. Civ. P. 56(e) (1963) (later amended and relocated, in part, to Fed. R. Civ. P. 56(c)); see generally Fed. R. Civ. P. 56(c) (made applicable to this proceeding by Fed. R. Bankr. P. 7056).
Wiand v. Wells Fargo Bank, N.A., 86 F. Supp. 3d 1316, 1320 (M.D. Fla. 2015), aff'd, 677 F. App'x 573 (11th Cir. 2017); see also Anderson, 477 U.S. at 249-50; Kernel Records Oy, 694 F.3d at 1301.
Undisputed Facts
Caylee Marie was reported missing in July 2008. Her mother, Casey Anthony, was arrested shortly thereafter and charged with, among others, child neglect and obstruction. Casey Anthony was released from police custody for a brief period after her initial arrest, but then was formally indicted for her daughter's murder and incarcerated again on October 14, 2008. She remained in custody until a jury acquitted her of the capital murder charges in July 2011.
Anthony Dep. 18:18-21, Doc. 129 (hereafter, the "Anthony Dep.").
While out of jail in the late summer and early fall of 2008, Casey Anthony met and interacted with an unpaid private investigator named Dominic Casey. The circumstances and events surrounding Mr. Casey's involvement in the criminal case are ambiguous and confusing to say the least. But it is clear that he had no contact with Casey Anthony after October 14, 2008.
Mr. Casey claims Mr. Baez hired him in July 2008. Casey Dep. 22:21-23:3, Sept. 22, 2016, Doc. 132 (hereafter, "Casey Sept. Dep."); Casey Dep. 118:4-9, Nov. 2, 2016, Doc. 131 (hereafter, "Casey Nov. Dep."). He also claims to have fired Mr. Baez by early October 2008. Casey Nov. Dep. 127:14-128:11; Casey Sept. Dep. 41:3- 20.
Casey Nov. Dep. 161:13-15; Casey Sept. Dep. 159:10-20.
During the criminal proceedings, Casey Anthony was represented by many attorneys including, but not limited to, Jose Baez, Andrea Lyons, and Linda Kenney-Baden (collectively, the "Attorneys"). Ms. Anthony signed a retainer agreement with Jose Baez on July 17, 2008, and a second retainer agreement with Mr. Baez on September 3, 2008. Ms. Kenny-Baden and Ms. Lyons joined the defense team at Mr. Baez's invitation sometime after October 14, 2008.
Anthony Aff. Exs. 1 and 2, Doc. 133 (hereafter, "Anthony Aff.").
Anthony Dep. 10:2-3, 10:10-25, 11:8-11, 12:9-14.
In December 2008, Roy Kronk, a meter reader for Orange County, led investigators to Caylee Marie's body in a wooded area not far from Ms. Anthony's home.
As the criminal proceedings progressed, the case drew national attention. The media attention was unrelenting and, fair to say, was not favorable to Casey Anthony.
In November 2009, Mr. Baez and Ms. Lyons filed a motion in limine in the criminal proceedings that implicated Mr. Kronk in the crime. The motion in limine states that the evidence to be presented at trial of bad acts by Mr. Kronk related to statements from his son, his ex-wives, and the daughter of his ex-girlfriend.
Anthony Dep. Ex. 1.
Id.
After filing the motion in limine, the Attorneys began a media blitz of their own to discuss the allegations in the motion in limine and to try to counter the bad publicity that Casey Anthony was receiving in the press. They appeared on television and made comments picked up by the print media that raised suspicions about Mr. Kronk's discovery of Caylee Marie's remains. The media blitz also gave voice to the statements referenced in the motion in limine made by Mr. Kronk's ex-wives and others, who did not have good things to say about Mr. Kronk. According to the National Enquirer, Jill Kerley, one of Mr. Kronk's ex-wives, was "the most vicious in her accusations against her husband."
Anthony Dep. Ex. 4. The court is not unmindful of the irony of citing to the National Enquirer to establish a fact, but it is one of the articles that Mr. Kronk points to as the source of his defamation. No suggestion is made that anything Ms. Kerley said is true, only that she joined in the attack and fueled the media fire.
Casey Anthony was acquitted of the capital murder charges on July 5, 2011. However, she was convicted of giving false information to the police about the circumstances of Caylee Marie's disappearance.
Anthony Aff. ¶ 10.
Answer ¶ 11, Doc. 27 (admitting Compl. ¶ 11 (Doc. 21)).
A few months after the trial concluded, Mr. Kronk filed a defamation action against Casey Anthony in the Ninth Judicial Circuit Court for Orange County. But the lawsuit was not served on Ms. Anthony until January 2013. Ms. Anthony responded by filing the underlying chapter 7 bankruptcy petition within days of being served with the state court complaint. She received her bankruptcy discharge on December 17, 2013.
Case No. 8:13-bk-00922-RCT, Doc. 140.
Summary Judgment Record
This adversary proceeding was filed timely by Mr. Kronk on July 22, 2013. In the single count complaint, he seeks a declaration that his defamation claim is excepted from Ms. Anthony's bankruptcy discharge because his claim resulted from willful and malicious injury within the meaning of § 523(a)(6) of the Bankruptcy Code.
Doc. 1.
An amended complaint was filed on November 26, 2013 (the "Complaint") (Doc. 21).
The Complaint alleges that defamatory statements were made against Mr. Kronk on November 18 and 20, 2009, December 7, 2009, December 23 or 24, 2010, and June 11, 2011, by Ms. Anthony "through her attorneys, who acted as her agents . . . ." Ms. Anthony answered the Complaint, denying the material allegations and asserting numerous affirmative defenses.
Compl. ¶ 12.
Doc. 27
On January 7, 2016, Ms. Anthony moved for judgment on the pleadings on grounds that she did not make the statements in question. Mr. Kronk responded to the motion with discovery responses from Ms. Anthony and the Affidavit of Dominic Casey (the "Casey Affidavit"). The Casey Affidavit states, in relevant part:
Doc. 68.
Doc. 70 Ex. A (Casey Aff., Dec. 28, 2015).
In October 2008, just prior to the remains being found, Casey Anthony told me that when Caylee came up missing, the back gate was left ajar. Since Roy Kronk was a meter reader for the house, maybe "we could say Roy Kronk kidnapped Caylee."Because Mr. Kronk introduced evidence beyond the pleadings, the court instructed the parties to frame the issues on motions for summary judgment.
I told her then I would not do that because we both know he had nothing to do with Caylee's disappearance, but she was insistent that he (Roy Kronk) be implicated or blamed in some way.
On December 11, 2008, it was confirmed that Roy Kronk had discovered Caylee's remains.
During a meeting at the hotel that evening, Jose Baez came to meet with George and Cindy Anthony. She asked him what was found. Attorney Baez said, "let's go to the room to talk, Roy Kronk is very, very suspicious."
. . .
Based on my personal knowledge of the events and statements I personally heard from Casey Anthony she authorized and permitted her attorneys including, Jose Baez, to make false statements about Roy Kronk to portray him as a murderer and or kidnapper of Caylee Anthony.
Casey Aff. ¶¶ 5-8, 10.
Doc. 73. See Fed. R. Civ. P. 12(d) (incorporated herein by Fed. R. Bankr. P. 7012).
In December 2017, Ms. Anthony moved for summary judgment. In support of her motion, Ms. Anthony submitted an affidavit and her own deposition.
Doc. 141.
Docs. 133 (Anthony Aff., with exhibits) and 129 (Anthony Dep., with exhibits).
In her affidavit, Ms. Anthony avers:
I never authorized or directed my defense attorney, Jose Baez, Esq., or other members on the defense team representing me in the murder charges, including Linda Kenney Baden, Esq. and Andrea Lyons, Esq. to say anything about the Plaintiff, Roy Kronk.
Prior to making this affidavit, I did not know and had never communicated with the Plaintiff, Roy Kronk.
. . .
What Jose Baez, Esq., Linda Kenney Baden, Esq. and/or Andrea Lyons, Esq. said to the public and the media while I was incarcerated was unknown to me until I was served with this lawsuit in 2013.
Anthony Aff. ¶¶ 8, 9, and 11.
In her deposition, Ms. Anthony conceded that she knew Mr. Baez was talking to the press, but she usually found out after the fact, if at all. She claimed to have no knowledge regarding any statements to the press about Mr. Kronk.
Anthony Dep. 17:18-18:13, 20:24-21:10, 21:17-21, 23:15-25:8, 28:23-30:1.
Ms. Anthony also filed the deposition of Dominic Casey. In his deposition, Mr. Casey explained his statements in the Casey Affidavit:
Docs. 131 (Casey Nov. Dep.) and 132 (Casey Sept. Dep.). The deposition began on September 22, 2016 and was concluded on November 2, 2016.
Q Do you remember specifically what Ms. Anthony said about Mr. Kronk, what permission she gave Jose Baez about—regarding Mr. Kronk?On questioning by Mr. Kronk's attorney, Mr. Casey stated:
A Permission is by not saying something to say we're not going to blame him, right? She is going along with what Baez is saying.
Q Did you, personally, hear from Casey Anthony that she permitted her attorneys, including Jose Baez, to portray people, including Roy Kronk, make false statements about them as being responsible for the murder of
Caylee Anthony?On redirect, Mr. Casey testified:
...
[A] She was complicit in what was going on. This is what [Baez is] feeding her and she's going along with it. Right?
[Q] Okay.
[A] So, I mean, she's like listening to somebody that she thinks is providing good advice, but he is not.
. . .
Q But you witnessed her going along with it, right?
A Of course she went along with it.
Q Okay.
A She was going along with whatever Jose Baez said.
Q Okay.
A That was the bottom line . . . . But she didn't know any better. That's why I was saying she was bloody naïve.
Q Did you ever see her— did you ever see a document where she wrote down, you are authorized on my behalf to make remarks about Roy Kronk or a meter reader?And finally, in the wrap up by Mr. Kronk's counsel, Mr. Casey further explains:
A There is no such document[].
Q Did you ever hear [Ms. Anthony] tell Mr. Baez, you are authorized to blame Mr. Kronk for any incident here?
Did you ever hear her say that?
A No, she did not.
Q Okay. If I understand correctly, the problem—would it be fair to say the problem was she didn't fire him, that she didn't direct her own case, that she allowed Jose [Baez] to direct the case? Is that correct?
A She had nothing to do with her own case. That was the thing.
Q That was the problem?
A She didn't do nothing . . . .
Q You testified earlier that Ms. Anthony didn't have anything to do with her own case.
A She had nothing to do with nothing.
. . .After October 14, 2008, Mr. Casey did not see or talk to Casey Anthony again.
Q Was she making decisions, I mean, for her own case?
A No, no.
Q Was she authorizing Jose Baez to say things?
A Nothing. . . .
. . .
[A] She had no idea what the bloody hell was going on. She's too naïve. She was then.
Q Okay. And then what about later?
. . .
[A] Up until—up until October 14th—and that would be a Tuesday—2008—up until then, what I knew about Casey Anthony was she was naïve as a bloody fool and whatever that—whatever that scoundrel would tell her is what she would do. . . .
Casey Nov. Dep. 45:15-20.
Casey Nov. Dep. 123:1-14.
Casey Nov. Dep. 124:1-10.
Casey Nov. Dep. 125:17-126:9.
Casey Nov. Dep. 157:14-25.
Casey Nov. Dep. 158:20-159:7.
Casey Nov. Dep. 161:13-15.
Applicable Law
Exceptions to a bankruptcy discharge are construed narrowly to encourage the debtor's fresh start anticipated by the Bankruptcy Code. Although certain debts are excepted from a general discharge, it is presumed that all debts owed by a debtor are dischargeable unless an objecting party proves otherwise. "The burden is on the [objecting party] to prove an exception to discharge by a preponderance of the evidence."
See, e.g., United States v. Fretz (In re Fretz), 244 F.3d 1323, 1326-27 (11th Cir. 2001); Kane v. Stewart Tilghman Fox & Bianchi, P.A., 485 B.R. 460, 468 (S.D. Fla. 2013), aff'd, 755 F.3d 1285 (11th Cir. 2014); General Ret. Sys. of Detroit v. Farr (In re Farr), No. 14-73606-WLH, Adv. No. 16-5325-WLH, 2018 WL 1577934, at *4 (Bankr. N.D. Ga. Mar. 27, 2018).
In re Farr, 2018 WL 1577934, at *4 (citing Grogan v. Garner, 498 U.S. 279, 287-88 (1991), among others).
Mr. Kronk seeks to have his defamation claim declared non-dischargeable under § 523(a)(6), which excepts from discharge debts "for willful and malicious injury by the debtor to another entity or to the property of another entity." Mr. Kronk thus must show, by a preponderance of the evidence, that his defamation claim arose from a "willful and malicious injury by the debtor." Proof of both elements is required.
§ 523(a)(6) (emphasis added).
See, e.g., Monson v. Galaz (In re Monson), 661 F. App'x 675, 682-85 (11th Cir. 2016).
In this context, the term "willful" does not include reckless or negligent conduct by a debtor. As explained by the Supreme Court in Kawaauhau v. Geiger:
523 U.S. 57 (1998).
The word "willful" in [§ 523](a)(6) modifies the word "injury," indicating that nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury. Had Congress meant to exempt debts resulting from unintentionally inflicted injuries, it might have described instead "willful acts that cause injury." Or, Congress might have selected an additional word or words, i.e., "reckless" or "negligent," to modify "injury." Moreover, as the Eighth Circuit observed, the [§523](a)(6) formulation triggers in the lawyer's mind the category "intentional torts," as distinguished from negligent or reckless torts. Intentional torts generally require that the actor intend "the consequences of an act," not simply "the act itself." Restatement (Second) of Torts § 8A, Comment a, p. 15 (1964) (emphasis added).Thus, a debtor must intend the injury, not just the act that leads to the injury. Injuries that arise from accident, inadvertence, negligence, or recklessness are not considered "willful" for purposes of § 523(a)(6).
Id. at 61-62 (emphasis in original).
Id.
In the Eleventh Circuit, a debtor commits a "willful" injury "when he or she commits an intentional act the purpose of which is to cause injury or which is substantially certain to cause injury." In discussing the scope of "willful" injury, the Eleventh Circuit has thus far avoided answering the question of whether a subjective or objective standard applies when considering whether the intentional act is "substantially certain to cause injury." Other circuit courts are split on this issue. Courts within this circuit tend to apply a subjective test when dealing with financial injury and an objective test when dealing with physical injury. But the application of either test must be consistent with the Supreme Court's holding that reckless or negligent conduct is not "willful" under § 523(a)(6).
Kane v. Stewart Tilghman Fox & Bianchi, P.A. (In re Kane), 755 F.3d 1285, 1293 (11th Cir. 2014) (quoting Maxfield v. Jennings (In re Jennings), 670 F.3d 1329, 1334 (11th Cir. 2012)).
See Monson, 679 F. App'x at 684 n.9.
Id.; see also Kane, 755 F.3d at 1293 (citing cases); Armstrong v. Oslin (In re Oslin), 584 B.R. 363, 374-75 (Bankr. N.D. Okla. 2018) (noting split as between the Fifth and Tenth Circuits).
See Kane, 485 B.R. at 469 n.11 ("This Court also finds that the Bankruptcy Court correctly utilized a subjective analysis to determine substantial certainty dealing with injuries resulting from financial harm."); see also George v. George (In re George), No. 8:09-bk-07653-CED, Adv. No. 8:09-ap-00445-CED, 2012 WL 1229840, at *4 (Bankr. M.D. Fla. Apr. 11, 2012) (applying a subjective test to financial injury); Drewes v. Levin (In re Levin), 434 B.R. 910, 919-20 (Bankr. S.D. Fla. 2010) (applying an objective test to a shooting).
See Maxfield v. Jennings (In re Jennings), 670 F.3d 1329, 1334 (11th Cir. 2012) (reiterating that under § 523(a)(6), injuries that are recklessly or negligently inflicted are not excepted from discharge); see also In re Levin, 434 B.R. at 920 (noting that as a result of the "somewhat attenuated relationship" between an claimed willful act and resulting harm in a financial injury case, applying "a purely objective substantial certainty analysis would bring the court dangerously close to the recklessness standard[,]" which would run afoul of the rule).
The term "malicious" in § 523(a)(6) means "wrongful and without just cause or excessive even in the absence of personal hatred, spite or ill-will." Malice may be implied "if the nature of the act itself implies a sufficient degree of malice." Specific intent to harm the creditor need not be shown. "[T]his inquiry must be guided by the totality of the circumstances" and the court must determine if the alleged wrongful act was an act, committed deliberately, that the debtor "knew would necessarily injure a cognizable right of the [objecting party]." Said differently, there must be some "consciousness of wrongdoing."
Kane, 755 F.3d at 1294 (quoting Jennings, 670 F.3d at 1334).
Monson, 661 F. App'x at 683 (quoting Lee v. Ikner (In re Ikner), 883 F.2d 986, 991 (11th Cir. 1989)).
Id. at 682-83; see Kane, 755 F.3d at 1294.
United States v. Shelmidine (In re Shelmidine), 519 B.R. 385, 393 (Bankr. N.D. N.Y. 2014); see Gonzalez v. Anthony (In re Anthony), 538 B.R. 145, 155-56 (Bankr. M.D. Fla. 2015).
Cladakis v. Triggiano (In re Triggiano), 132 B.R. 486, 490 (Bankr. M.D. Fla. 1991); see In re Shelmidine, 519 B.R. at 393-94; see also Barclays Am./Bus. Credit, Inc. v. Long (In re Long), 774 F.2d 875, 881 (8th Cir. 1985):
[I]f malice, as it is used in § 523(a)(6), is to have any meaning independent of willful it must apply only to conduct more culpable than that which is in reckless disregard of creditors' economic interests and expectancies, as distinguished from mere legal rights. Moreover, knowledge that legal rights are being violated is insufficient to establish malice, absent some additional "aggravated circumstances[.]"
In re Anthony, 538 B.R. at 155-56; see Kane, 755 F.3d at 1294-95 (affirming finding of malice where debtor's testimony suggested he knew at the time that his actions "did not 'feel right'" and even considered alerting the objecting creditor but ultimately decided to proceed with a transaction that significantly enriched himself at the expense of the objecting creditor); American Honda Fin. Corp. v. Grier (In re Grier), 124 B.R. 229, 232-33 (Bankr. W.D. Tex. 1991) (concluding there must be "'something extra' that demonstrates that the debtor acted without just cause or excuse" otherwise "nearly any intentional conduct would fall within this exception to discharge").
i. Whether vicarious liability can support a non-dischargeable debt under § 523(a)(6) for willful and malicious injury.
The first issue raised by Ms. Anthony is whether a claim based on vicarious liability can ever be "willful" under § 523(a)(6). She argues that the statute means what it says when it says that the willful conduct must be "by the debtor."
Indeed, Ms. Anthony is correct that courts uniformly do not recognize vicarious liability to satisfy the "willful" requirement for a § 523(a)(6) claim because it is one party's liability for the conduct of another. As explained in one of the seminal cases on this point:
See, e.g., Richards v. Smith (In re Smith), No. 10-27260 HRT, Adv. No. 10-1749 HRT, 2012 WL 425196, at *7 (Bankr. D. Colo. Feb. 9, 2012) ("Merely proving that the [d]efendant could be held liable . . . under a state law vicarious liability theory such as aiding and abetting, without also proving [d]efendant's intent to injure the [p]laintiff, is insufficient to hold her liable under § 523(a)(6)."); First New Mexico Bank v. Bruton (In re Bruton), No. 7-09-13458 JA, Adv. No. 09-1187 J, 2010 WL 2737201, at *8 (Bankr. D.N.M. July 12, 2010) (noting that upon the enactment of the Bankruptcy Code, the phrase "by the debtor" was added to § 523(a)(6)'s precursor in the Bankruptcy Act, indicating a specific rejection of vicarious liability theory); Contini v. Cook (In re Cook), No. 07-31763-mcr, Adv. No. 07-50072-mcr, 2009 WL 2872864, at *5 (Bankr. N.D. N.Y. Apr. 7, 2009) ("Nondischargeability of a debt under Code section 523(a)(6) cannot be grounded on the imputation to the debtor of the acts of another." (internal quotation omitted)); see also American First Credit Union v. Gagle (In re Gagle), 230 B.R. 174, 182-83 (Bankr. D. Utah 1999) (finding wife's "mere acquiescence" in husband's conduct insufficient to satisfy the "willful" prong); Hamilton v. Nolan (In re Nolan), 220 B.R. 727, 731-32 (Bankr. D.D.C. 1998) (declining to impute to debtor actions of an equal co-owner of her business); Giuliano v. Albano (In re Albano), 143 B.R. 323, 324-25 (Bankr. D. Conn. 1992) (declining to impute to debtor actions of employee who physically assaulted and injured plaintiff).
There is nothing in the language or the legislative history of § 523(a)(6) to suggest that common law notions of vicarious or imputed liability are appended to the statutory exceptions to a discharge in bankruptcy. Quite the contrary, application of vicarious liability would effectively vitiate the § 523(a)(6) requirement that only debts resulting from the willful acts committed by the debtor be nondischargeable. Vicarious liability as a social policy or legal fiction ignores the master's knowledge and imposes fault and financial responsibility without regard to culpability or intent. Section 523 is founded on the contrary notion that only a debt resulting from the deliberate acts of the debtor can be excepted from discharge in bankruptcy. In the absence of clear statutory exception for "vicarious acts," the legislative intent to permit a broad discharge in bankruptcy should not be emasculated by common law tort principles.
Thatcher v. Austin (In re Austin), 36 B.R. 306, 311-12 (Bankr. M.D. Tenn. 1984).
For example, in In re Eggers, plaintiff sought to declare an unliquidated, wrongful death claim non-dischargeable under § 523(a)(6) as against two debtors, a mother and her minor son. The plaintiff's daughter was killed in a two-car collision when the automobile driven by the debtor-son crossed the centerline. By signing her son's application for his driver's license, the debtor-mother had accepted vicarious liability for his wrongful conduct in any auto accident under state law. But in bankruptcy, her debt to the plaintiff was discharged. The court noted that the mother's "only participation" in the events leading up to the accident was the signing of her son's driver's license application. The court determined that Congress negated imputed liability under § 523(a)(6) upon the enactment of the Bankruptcy Code when it added the requirement that to be discharged the "willful" conduct be "by the debtor."
Yelton v. Eggers (In re Eggers), 51 B.R. 452 (Bankr. E.D. Tenn. 1985)
Id. at 452-53.
Id. at 453-54; accord In re Bruton, 2010 WL 2737201, at *8; DeRoche v. Miller (In re Miller), 196 B.R. 334, 336-37 (Bankr. E.D. La. 1996).
Recently, in In re Smith, plaintiffs sought to declare non-dischargeable under § 523(a)(6) a judgment in their favor and as against their employer arising from a sexual harassment suit. The suit was based upon conduct suffered by the plaintiffs from certain mid-level employees. The debtor-employer, like the mother in Eggers, was vicariously liable for his employees' improper conduct under non-bankruptcy law. But in bankruptcy, the employer's liability was discharged because the debtor-employer did not commit the injury and no facts were offered demonstrating that the employer had intended to injure plaintiffs. Again, the court held that vicarious liability does not establish "willful" injury "by the debtor" within the meaning of § 523(a)(6).
Loukes v. Smith (In re Smith), 537 B.R. 1 (Bankr. M.D. Ala. 2015).
Id. at 6-8.
Id. at 14-16; accord In re Cook, 2009 WL 2872864, at *5 ("The acts of another, even an employee of the [d]ebtor, cannot provide the basis for a Code section 523(a)(6) claim against the [d]ebtor.").
Mr. Kronk suggests, however, there are exceptions to this uniform rule, relying primarily on In re Sullivan. However, neither In re Sullivan nor the other cases identified by Mr. Kronk support that contention.
Bairstow v. Sullivan (In re Sullivan), 198 B.R. 417 (Bankr. D. Mass. 1996).
As examples, Impulsora Del Territorio Sur, S.A. v. Cecchini (In re Cecchini), 780 F.2d 1440 (9th Cir. 1986), was decided before Kawaauhau and applied the standard for "willful" injury expressly rejected by the Supreme Court. It is therefore of limited relevance. Oetker v. Bullington (In re Bullington), 167 B.R. 157 (Bankr. W.D. Mo. 1994), was also decided before Kawaauhau, and relied in relevant part on Cecchini. Further, in Bullington, the debtor-wife admitted that she signed a financing statement knowing that certain pledged collateral was no longer in the debtors' possession, and although she may not have participated directly in converting the collateral with the debtor-husband, the court found that she "participated in the benefits of the conversion." 167 B.R. at 163.
In In re Sullivan, a debtor was held vicariously liable for actions taken by a work crew he hired to perform construction work on his property. After a jury trial, a state court judgment was entered against the debtor for trespass and destruction of his neighbors' property. The jury, in answer to a special question, found that debtor did not have "good reason to believe" that the neighbors' land was his own or that he was "lawfully authorized" to commit the acts which led to the destruction of his neighbors' property.
In re Sullivan, 198 B.R. 417.
Id. at 418-19.
Once in bankruptcy, the debtor attempted to discharge the judgment on grounds that he did not actually trespass and cause the damage. The bankruptcy court refused to discharge the debt, determining that the debtor's willfulness was conclusively established in the state court proceeding. Based upon the jury's answer to the special question, the court found that even though the debtor did not himself trespass or destroy property, the evidence demonstrated that debtor knew the land was not his and still directed the work crew to proceed. This, the court concluded, was "deliberate and intentional conduct within the scope of section 523(a)(6)."
Id. at 424.
Contrary to Mr. Kronk's suggestion, the Sullivan court subscribed to the uniform rule, but rejected the debtor's argument because it determined that his liability was not "based solely on the conduct of others." The court stated:
I have previously held . . . that a judgment against a debtor based on acts of an agent is not within the meaning of the exception to discharge of a debt for willful and malicious conduct. Section 523 of the Code, as a whole, is aimed at individual conduct of the debtor deemed so socially reprehensible and as to be unworthy of a discharge in bankruptcy. This is made clear by the wording of the statute itself, which requires that the action at issue be "by the debtor." Therefore, a judgment based on actions for which the debtor may be legally responsible but which were not performed by the debtor is outside the scope of both the language and intent of the statute. . . .The court did not rely on vicarious liability to establish the "willful" injury required by § 523(a)(6), rather it determined that the debtor desired and brought about, albeit indirectly, the injury suffered by the state court plaintiffs. In this regard, the debtor's role was something more than mere passivity or mere acquiescence.
[I]f the Debtor's judgment liability was based solely on the conduct of others, the debt would be excepted from discharge. . . . [I]n its answer to special question 2(B) the jury found the Debtor had no good reason to believe the Plaintiffs' land was his or that he was authorized to do the complained of acts. It is clear from this answer that the evidence convinced the jury the Debtor knew his workcrew was on land which was not his and that he had no authority for the crew's removal of the trees and other items from the land. Debts based on vicarious liability are not excepted from discharge because they are not based on deliberate and or intentional conduct by the liable party. In contrast, the jury here found the Debtor knew this continuing trespass was being committed but did nothing about it. That is deliberate and intentional conduct within the scope of section 523(a)(6). Therefore, the established law regarding vicarious liability does not aid the Debtor.
Id. at 423-24.
The same may be said for Caci v. Brink (In re Brink), 333 B.R. 560 (Bankr. D. Mass. 2005), which Mr. Kronk also cites. The Brink court, which relied heavily on In re Sullivan, concluded that although one of the debtors did not himself carry out the actions that led to the injury, he nevertheless had the requisite intent to injure plaintiff's property as he both "knew about and supported" the actions of the party who did. Id. at 570-71.
In re Sullivan was decided before Kawaauhau; however, its analysis is consistent with the rule later articulated by the Supreme Court. Interestingly, the court noted that "[t]here appears to be no dispute that the conduct at issue was willful." In re Sullivan, 198 B.R. at 419. Rather, the discussion focused on malice.
In contrast to the uniform rule regarding "willful" injury, principals of vicarious liability may support a finding of malice for purposes of § 523(a)(6). At least one court, after acknowledging the uniform rule, indicated that "the doctrine of vicarious liability cannot shield a debtor from a finding of malice for purposes of Section 523(a)(6) if the debtor had notice of an injury being inflicted by its agents or employees and could have, but did not, prevent it." And the court in In re Smith, discussed above, found that plaintiffs had sufficiently alleged that the debtor-employer maliciously injured them based upon the sexual harassment inflicted upon them by middle management. But a finding of malice alone is not enough for purposes of § 523(a)(6), the injury must still be "willful".
See Sanger v. Busch (In re Busch), 311 B.R. 657, 668 (Bankr. N.D. N.Y. 2004).
Yash Raj Films (USA), Inc. v. Akhtar (In re Akhtar), 368 B.R. 120, 133 (Bankr. E.D. N.Y. 2007); accord In re Smith, 537 B.R. at 15; In re Busch, 311 B.R. at 668.
In re Smith, 537 B.R. at 15.
See, e.g., Monson, 661 F. App'x at 682-85; In re Smith, 537 B.R. at 14; In re Akhtar, 368 B.R. at 127.
It is clear that a debtor's mere passive vicarious liability will not support a non-dischargeable judgment under § 523(a)(6). Something more, some deliberate conduct indicating a desire to cause injury, is required "by the debtor" to satisfy the "willful" requirement of the statute. Still, this "something more" must be constrained by the Supreme Court's ruling that negligence or recklessness is not enough.
See, e.g., In re Smith, 537 B.R. at 13-15; Diamond v. Vickery (In re Vickery), No. 10-41118 ABC, Adv. No. 11-01164 ABC, 2011 WL 4963136, at *10 n.10 (Bankr. D. Colo. Oct. 17, 2011); In re Busch, 311 B.R. at 669-71.
ii. Whether a criminal defendant is ever vicariously liable for potentially defamatory statements made to the media by counsel.
The next issue raised by Ms. Anthony is whether the agency between a criminal defendant and her attorneys is sufficient to give rise to a non-dischargeable defamation claim based on statements made by the attorneys to the media. And here, it is somewhat curious that Mr. Kronk has not sued the Attorneys or even his ex-wives or son for defamation.
Mr. Kronk largely assumes that an attorney-client relationship operates the same as an employer-employee relationship. But that assumption must be tested by the complications of an attorney-client relationship. First, certain privileges must be considered. Second, the attorney's added role as an officer of the court must be factored into the analysis. And finally, the balance of power between a client and an attorney must be compared to the balance of power between an employer and an employee in a typical manufacturing or business setting.
To begin, Florida recognizes an "absolute privilege" for defamatory statements made during a judicial proceeding. "[N]o cause of action for damages will lie, regardless of how false or malicious the statements may be, so long as the statements are relevant to the subject of inquiry." This absolute privilege may tamp down to a "qualified privilege" when an attorney makes out of court statements in connection to a pending proceeding. If an out of court statement by an attorney does not relate to the subject matter of the judicial proceeding, no qualified privilege arises. But if the out of court statement bears some relation to the judicial proceeding, then the qualified privilege arises and may only be overcome with a showing of express malice.
Fridovich v. Fridovich, 598 So. 2d 65, 66 (Fla. 1992); see DelMonico v. Traynor, 116 So. 3d 1205, 1211-19 (Fla. 2013) (discussing the history and scope of Florida's absolute privilege).
DelMonico, 116 So. 3d at 1218-19 (dealing with defamatory statements in the context of witness interviews).
Id. at 1219; see Fridovich, 598 So. 2d at 69 ("In overcoming a qualified privilege, a plaintiff would have to establish by a preponderance of the evidence that the defamatory statements were false and uttered with common law express malice—i.e., that the defendant's primary motive in making the statements was the intent to injure the reputation of the plaintiff.").
Here, the motion in limine implicating Mr. Kronk was absolutely privileged under Florida law and, accordingly, it offers no basis for a defamation claim. This is not seriously disputed. Moving on, if the out of court statements by the Attorneys related to the criminal proceedings in general or more specifically to the motion in limine, then the Attorneys' comments are protected by a qualified privilege absent proof of express malice on their part. And if the Attorneys' comments are privileged, then there is no underlying liability to be imputed to Ms. Anthony and, in turn, no debt arises for which a nondischargeable determination may be made.
Next, attorneys do not serve as agents to their clients in the same way that an employee is an agent for an employer. An attorney also serves as an officer of the court with legal and ethical constraints. Unlike an employee whose actions are determined and directed by his employer, an attorney cannot always take direction from the client. Further, an employer may always fire an employee, sometimes without cause. But while a client may fire an attorney, financial considerations and circumstance may restrict the exercise of that option. Not to mention, the court may prohibit an attorney's withdrawal.
Last, as a practical matter, an attorney may have more influence and power than a typical employee. Whereas the debtor in Sullivan could easily have directed his work crew to stop trespassing upon and destroying his neighbors' property, it is less clear that a criminal defendant sitting in jail could compel her attorneys to go on television and defame someone under threat that failing to do so would result in the attorneys being fired. And it cannot pass without note, a client, particularly an unsophisticated criminal defendant, often selects an attorney to provide skilled guidance during the course of a legal matter and then relies heavily on that advice. This is not usually the case in the typical manufacturing or business setting. The dynamics of the relationship may result in the employee-attorney having more influence over the employer-client.
These are factors to be considered in assessing vicarious liability based on agency arising from an attorney-client relationship.
iii. Whether the Casey Affidavit Should be Stricken as a "Sham."
The next issue raised by Ms. Anthony is whether the Casey Affidavit should be stricken as a "sham" because it is directly contradicted by Mr. Casey's deposition testimony. The court does not agree. Mr. Casey's deposition can be reasonably construed as an explanation and clarification of what he meant in his earlier affidavit. And because for purposes of summary judgment inferences must be made in favor of the non-moving party, the court accepts Mr. Casey's explanations as supplementing rather than contradicting his affidavit.
For example, Mr. Casey states in his affidavit that Ms. Anthony "authorized and permitted" her attorneys to implicate Mr. Kronk. His deposition testimony clarifies that by "authorized and permitted" he meant that, at best, she was complicit in the act because she did not fire Mr. Baez, not because she was directing the formulation of her defense. Mr. Casey emphatically and repeatedly explains that Ms. Anthony went along with everything Mr. Baez suggested because she was "bloody naïve" and did not fully appreciate what was happening to her. And he unequivocally states that, during his brief involvement in the case, Ms. Anthony never affirmatively told Mr. Baez or anyone else to implicate Mr. Kronk and that she played no role in the formulation of her defense.
Considering the Casey Affidavit, as explained by Mr. Casey in his deposition, the following facts remain undisputed: (1) Mr. Casey never heard Ms. Anthony direct Mr. Baez to implicate Mr. Kronk nor saw any document directing Mr. Baez to do so; (2) Mr. Casey had no contact with Ms. Anthony after October 14, 2008; and (3) Mr. Casey never spoke to Ms. Anthony about Ms. Lyons or Ms. Kenney-Baden, who were retained well after October 2008.
iv. Whether Ms. Anthony's assertion of the Fifth Amendment in connection with the death of Caylee Marie requires the court draw an adverse inference that precludes summary judgment.
In opposition to Ms. Anthony's motion, Mr. Kronk argues that summary judgment is not proper because adverse inferences should be drawn against Ms. Anthony based on her continued assertion of the Fifth Amendment in response to his requests for admissions. Mr. Kronk is correct that in a civil action, adverse inferences may be drawn against a party asserting the privilege against self-incrimination. But Mr. Kronk does not accurately characterize Ms. Anthony's objections to the requests for admission.
Doc. 70 Ex B.
See, e.g., Coquina Invs. v. TD Bank, N.A., 760 F.3d 1300, 1310 (11th Cir. 2014); In re McGinnis, 18 B.R. 525, 527 (Bankr. N.D. Ga. 1982).
Ms. Anthony's discovery responses raise three objections to the cited admission requests: (i) a general scope and form objection, (ii) an objection based on privileged attorney-client communications, and (iii) an objection based on the Fifth Amendment. Ms. Anthony's responses were served on Mr. Kronk in April 2014, and in the four years since, Mr. Kronk has not filed any motion to compel.
The Fifth Amendment is asserted by Ms. Anthony based on potential federal charges or additional state charges that might be asserted against her. Answer to Interrog. No. 14 (Doc. 70 Ex. C).
Because there are three objections for each of the relevant requests for admission, the court is unable to conclude that the Fifth Amendment is the dispositive objection to each admission. In fact, it appears to be asserted as an alternative. If the admission is protected by the attorney-client privilege—as most seem to be—an adverse inference is not appropriate. Mr. Kronk points to no legal basis for an adverse inference against a party asserting attorney-client privilege.
Doc. 70 Ex. B.
The attorney-client privilege objection also predominated the discussion during Ms. Anthony's deposition.
Moreover, Ms. Anthony's assertion of the Fifth Amendment goes to the crime itself and not to the operative issue in this adversary proceeding, i.e. whether she engaged in conduct that caused willful and malicious injury to Mr. Kronk within the meaning of § 523(a)(6).
The problem of proof facing Mr. Kronk is not the Fifth Amendment. Rather, it is the assertion of attorney-client privilege. His case for vicarious liability necessarily invades confidential communications between Ms. Anthony and her attorneys. This may explain why, after five years in this court, the only evidence Mr. Kronk offers against Ms. Anthony, other than proposed adverse inferences, is the Casey Affidavit and Mr. Casey's deposition testimony.
Applying the Law to the Facts
The court is sensitive that there are those who feel that Ms. Anthony escaped justice when she was acquitted of the murder charges. But the bankruptcy court is not the forum for those concerns.
The sole issue here is whether there is a triable issue of fact that Ms. Anthony willfully and maliciously injured Mr. Kronk as those terms are used in § 523(a)(6) of the Bankruptcy Code. As conceded by Mr. Kronk's counsel at oral argument, any claim that Casey Anthony recklessly or negligently implicated Mr. Kronk in the death of Caylee Marie was discharged years ago. All that remains is examining the requirements for exception to discharge under § 523(a)(6).
i. Injury to Mr. Kronk
The court has thus far not discussed a third requirement for an exception to discharge under § 523(a)(6), namely that the complaining party must have suffered an injury to person or property. Mr. Kronk asserts the former, claiming that in speaking to the media in defense of Ms. Anthony, the Attorneys defamed him. It is debt arising from this injury that Mr. Kronk seeks to impute to Ms. Anthony by virtue of vicarious liability.
See, e.g., In re Smith, 537 B.R. at 15; In re Gagle, 230 B.R. at 181-83.
It is not disputed that defamation, if proved, may serve as the underlying injury for purposes of § 523(a)(6). There is great dispute regarding the viability of Mr. Kronk's defamation claim. However, the court need not decide the issue as the court assumes, for purposes of summary judgment, that the statements are defamatory. Were it to reach the issue, the court would entertain significant doubts in light of the factors discussed above, particularly the qualified privilege likely accorded to the Attorneys' statements.
Given this court's inability to conduct a trial of the defamation claim, see 28 U.S.C. § 157(b)(5), the topic of whether the court can nonetheless decide the issues on summary judgment has also been a topic of much discussion.
ii. Willful Injury
On the issue of willfulness, Ms. Anthony's affidavit and deposition testimony establish that she did nothing "willful" to injure Mr. Kronk. At most, she had a general knowledge that her attorneys were making statements to the press on her behalf, and then usually only after the fact. Further, she had no knowledge as to the content of those statements. Her testimony during the relevant time frame of the alleged defamation (November 2009-June 2011) is unrebutted.
The relevant time is framed by Mr. Kronk's amended complaint, namely the publications and television appearances where he is allegedly defamed. Compl. ¶ 12.
Even if the court assumes that the Attorneys' out of court statements were not subject to a qualified privilege, there is still no evidence of the "something more" by Ms. Anthony. The best evidence Mr. Kronk has is the Casey Affidavit. But Mr. Casey cannot speak to the relevant time period, and he clarified during his deposition that during the short time he was involved, Ms. Anthony did not have control over the formulation and implementation of her defense: "She had nothing to do with her own case. That was the thing."
Casey Nov. Dep. 126:6-7.
On reflection, the Casey Affidavit and Mr. Casey's deposition testimony are not even all that inconsistent with Ms. Anthony's testimony. She does not dispute that she acquiesced in her defense to the extent that that she did not fire the Attorneys. She does not dispute that she was young and naïve when these events unfolded. And she does not dispute that she accused other people of kidnapping Caylee Marie.
E.g., In re Anthony, 538 B.R. 145.
But mere acquiescence and deference to attorneys by a young, unsophisticated person facing capital murder charges, or her failing to fire those lawyers under circumstances where she had little reason to suspect the attorneys were doing anything untoward, does not satisfy the "willful" injury prong of § 523(a)(6).
iii. Malicious Injury
The Attorneys for Ms. Anthony certainly questioned Mr. Kronk's role in finding Caylee Marie's remains and attempted to raise reasonable doubt about the guilt of their client on this basis, both inside and outside the courtroom. But the Attorneys' comments in the press clippings offered by Mr. Kronk relate to the pending motion in limine and issues in the criminal case, and do not directly accuse him of a crime. Rather, the most hurtful and disparaging comments against Mr. Kronk came from his ex-wives and the daughter of his ex-girlfriend, or are sensationalized headlines crafted by the news outlets themselves. Nevertheless, for purposes of this motion, the court assumes the Attorneys commented in the media as characterized by Mr. Kronk.
As noted by Debtor's counsel, in each alleged defamatory statement, the respective attorney is simply pointing out that the prosecution appeared to have focused its investigation narrowly on Ms. Anthony and argues that the prosecution should have followed all available leads, including Mr. Kronk. (Doc. 141 p. 16).
It is undisputed that part of the Attorneys' defense of Casey Anthony was to address the overwhelming negative publicity that their client faced. Mr. Kronk offers nothing to rebut this stated purpose for the Attorneys' comments to the press. Given the totality of the circumstances, the court finds this purpose is not wrongful or without cause.
In response to interrogatories propounded by Mr. Kronk, Ms. Anthony stated:
[A]ny and all statements made by Defendant's criminal defense team were made to prepare for the criminal trial, including to obtain the public's assistance in determining the truth, as well as to offset the negative and prejudicial remarks and purported evidence that was suspected to have been leaked to the press by law enforcement and other members of the State's prosecution team and/or their witnesses.Answer to Interrog. No. 8 (Doc. 70 Ex. C).
Cf. In re Anthony, 538 B.R. at 155-56; see generally United States v. McAnalley, 535 F. App'x 809, 811-12 (11th Cir. 2013) (discussing the constitutional right of a criminal defendant to present a defense which may include evidence of third-party guilt).
This court neither condones nor condemns the conduct of Ms. Anthony's attorneys. But such conduct and purpose does not satisfy the "malicious" requirement of § 523(a)(6), even if it could be imputed to Ms. Anthony.
For her part, Ms. Anthony did not know Mr. Kronk. She never spoke to Mr. Kronk. She was on trial for her life. Ms. Anthony claimed she was not responsible for Caylee Marie's disappearance and murder. By logical inference, the perpetrator had to be someone else. It would not be unexpected for her to look for a culprit elsewhere and admittedly, Mr. Kronk was not the only individual upon whom she cast suspicion. And Mr. Kronk was not wholly unrelated to the case. His discovery of Caylee Marie's body was not without its own controversy.
Anthony Dep. 73:21-74:2.
See Anthony Dep. 48:19-49:16.
Construing all inferences in favor of Mr. Kronk, all that this record can prove is that Ms. Anthony acquiesced, perhaps blindly, to the defense crafted by her attorneys and to the extent she even knew what was going on, she did not fire them. There is no evidence of an intent to cause Mr. Kronk injury necessary to render the alleged debt nondischargeable, and that assumes liability might be imputed to her in the event the statements by her attorneys were proven to be defamatory.
For these reasons, the court will grant the motion for summary judgment.
The court separately will enter judgment in favor of Debtor declaring that Plaintiff's unliquidated defamation claim will not be excepted from Debtor's discharge.
ORDERED.
Dated: February 28, 2019
/s/_________
Roberta A. Colton
United States Bankruptcy Judge Service of this Decision other than by CM/ECF is not required. Local Rule 9013-1(b).