Opinion
Case No. 19-11653 MER Adv. Case No. 19-01140 MER
09-29-2020
IN RE: Stephen Charles JUDGE, Debtor. James W. Perry and Thomas Baca, Plaintiffs. v. Stephen Charles Judge, Defendant.
Daniel G. Spitzer, Durango, CO, for Debtor.
Daniel G. Spitzer, Durango, CO, for Debtor.
ORDER
Michael E. Romero, Chief Judge
Heavyweight champion Joe Louis famously said "Everyone has a plan until they get hit." Plaintiffs James Perry ("Perry ") and Thomas Baca ("Baca ," and together with Perry, "Plaintiffs ") and Defendant Stephen Charles Judge ("Judge ") surely did not go to the Derailed Pour House on January 31, 2015, expecting to be involved in a bar fight resulting in lasting injuries, and yet this is exactly what happened. The matter presented to the Court is whether Plaintiffs' claims against Judge, arising from injuries incurred in their brouhaha, are nondischargeable.
Wikipedia, the Free Encyclopedia , Joe Louis, at https://en.wikipedia.org/wiki/Joe_Louis (last visited Sept. 22, 2020).
BACKGROUND
The incident at the Derailed Pour House was captured on video, and shows the following: Perry and Judge were standing at a crowded bar top with their backs to one another when suddenly Judge elbowed Perry in the back. Perry turned around and appeared to say something to Judge, and then Judge took his glass mug off the bar top and hit Perry over the head, breaking the mug. Perry then struck Judge with his own drink, breaking the glass container in his face. A scuffle ensued and onlookers, including Baca, escorted Perry out of the bar and held Judge back at the bar top. Less than twenty seconds passed from the time Judge initially elbowed Perry to the time Perry was taken out of the bar area.
Exh. 1.
Following the altercation, Perry was taken to the hospital where he received medical attention for injuries to his face, neck, and hand, and Judge was likewise treated for his own injuries. Neither Perry nor Baca were criminally charged for their involvement in the altercation, but Judge eventually pled guilty to third degree assault. Perry and Baca later sued Judge in La Plata County District Court and obtained a default judgment against him, with Perry awarded $150,000 and Baca awarded $75,000.
See Exhs. 8, 11, and 12.
Exhs. 6 and 9.
Exh. 6.
Judge filed his voluntary petition for relief under Chapter 7 of the Bankruptcy Code on March 8, 2019. Plaintiffs initiated this adversary proceeding shortly thereafter seeking a determination their claims against Judge are nondischargeable pursuant to § 523(a)(6).
All references to "Section," "§," "Bankruptcy Code" and "Code" refer to the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq.
ANALYSIS
A. Standard for Nondischargeability Under § 523(a)(6)
Section 523(a)(6) of the Bankruptcy Code provides "(a) A discharge under section 727 ... of this title does not discharge an individual debtor from any debt ... (6) for willful and malicious injury by the debtor to another entity or to the property of another entity." A finding of nondischargeability under § 523(a)(6) requires proof of: "1) an intentional action by the defendant; 2) done with the intent to harm; 3) which causes damage (economic or physical) to the plaintiff; and 4) the injury is the proximate result of the action by the defendant." The standard of proof for claims under § 523(a)(6) is the ordinary preponderance of the evidence standard.
In re Tilley , 286 B.R. 782, 790 (Bankr. D. Colo. 2002) ; see also In re Smith , 249 B.R. 748, 750 (Bankr. S.D. Ohio 2000) ("The debtor's actions must be determined to be the cause of the creditor's injury."); see also In re Charron , 541 B.R. 656, 665 (Bankr. W.D. Mich. 2015) ("To except a debt from discharge under this subsection, the Plaintiff must show that he suffered a loss or injury as a result of willful and malicious conduct of the debtor.").
Id . at 787 (citing Grogan v. Garner , 498 U.S. 279, 291, 111 S. Ct. 654, 661, 112 L. Ed. 2d 755 (1991) ).
Section 523(a)(6) refers only to acts taken with an actual intent to cause injury. As the Supreme Court instructed in Geiger ,
In re Vickery , 526 B.R. 872, 879 (Bankr. D. Colo. 2015) (citing Kawaauhau v. Geiger, 523 U.S. 57, 61, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998) ).
The word "willful" in (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 (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."
Geiger, 523 U.S. at 61–62, 118 S.Ct. 974 (emphasis original) (quoting Restatement (Second) of Torts § 8A, Comment a, p. 15 (1964) (emphasis added)).
Nondischargeability under § 523(a)(6) requires proof of both a willful act and a malicious injury, and without proof of both, an objection to discharge under § 523(a)(6) must fail. "A ‘willful act’ is one in which the debtor must desire to cause the consequences of his act or believe that the consequences are substantially certain to result from it." "A ‘malicious injury’ occurs when there is proof that the debtor either intended the resulting injury or intentionally took action that was substantially certain to cause the injury." The requirement of maliciousness "is satisfied upon a showing the injury was inflicted without just cause or excuse."
Panalis v. Moore (In re Moore), 357 F.3d 1125, 1129 (10th Cir. 2004) ; In re Tinkler , 311 B.R. 869, 878 (Bankr. D. Colo. 2004).
Moore , 357 F.3d at 1129.
Vickery , 526 B.R. at 879-80 (citing Moore , 357 F.3d at 1129 ).
Id .
Wagner v. Wagner (In re Wagner) , 492 B.R. 43, 55 (Bankr. D. Colo. 2013) (citations omitted); In re Parra , 483 B.R. 752, 773 (Bankr. D.N.M. 2012) ("the ‘malicious’ component of 11 U.S.C. § 523(a)(6) requires an intentional, wrongful act, done without justification or excuse.").
Whether a debtor acted with the requisite intent to harm the creditor is evaluated under a subjective standard focusing on the debtor's state of mind. The Bankruptcy Appellate Panel for the Tenth Circuit stated: "Intent may be established by either direct or indirect evidence. Willful injury may be established by direct evidence of specific intent to harm a creditor or the creditor's property. Willful injury may also be established indirectly by evidence of both the debtor's knowledge of the creditor's ... rights and the debtor's knowledge that the conduct will cause particularized injury." Here, the Court sits as the sole trier of fact, and therefore it is the Court's determination of Judge's subjective intent which will decide the case.
Parra , 483 B.R. at 772 (citing Mitsubishi Motors Credit of America, Inc. v. Longley (In re Longley) , 235 B.R. 651, 657 (10th Cir. BAP 1999) );
Longley , 235 B.R. at 657 (internal citations omitted).
B. Whether Perry's Claim is Nondischargeable
There is no question Perry suffered serious injuries to his hand, face, and neck during the altercation As such, the Court must consider whether the injury was the proximate result of Judge's actions and whether Judge's actions were done intentionally and with the intent to harm Perry.
Exhs. 2, 7, 11, and 12.
Tilley , 286 B.R. at 790.
The video clearly shows Judge striking Perry with a glass mug. From the Court's subjective determination of intent based on the video and testimonial evidence, the Court can only find Judge acted intentionally, and at the very least his actions were "substantially certain to cause ... injury." The Court further finds Perry's injuries upon which his claim against Judge is based were the proximate result of Judge's actions. Even though a portion of Perry's injuries were sustained when he struck Judge with his own glass, the video demonstrates the cause of the initial aggression was Judge, and Perry's claim is based on the injuries he sustained in the course of the altercation as a whole. As such, the Court finds Perry's entire claim against Judge is nondischargeable under § 523(a)(6).
Exh. 1.
Vickery , 526 B.R. at 880.
At trial, Judge testified that prior to the start of the events depicted in the video evidence, Perry had "bulled his way into the bar," stepped on Judge's ankle, and threatened Judge. As such, Judge asserted the altercation shown on the video was a result of him defending himself after Perry threatened his life. While injuries inflicted by actions taken in self-defense may not reach the level of willful and malicious, the Court does not find Judge's testimony in this respect to be credible. Judge admitted there was no documentation of him telling anyone of this happening – not the police at the time of the incident, nor in his criminal proceedings or the civil proceedings in La Plata County District Court. Given self-defense could have potentially shielded him from both criminal and civil liability, his failure to alert anyone to this additional information is striking to the Court. Accordingly, the Court concludes Judge did intend to cause Perry's injuries and was not acting in self-defense when he struck Perry with his mug.
See In re Taylor , 322 B.R. 306, 309 (Bankr. N.D. Ohio 2004) ("It is black-letter law that one who believes that he or she is about to be harmed is privileged to use reasonable force to protect themselves. Acts properly taken, therefore, in self-defense provide a valid defense to an action brought under § 523(a)(6) ....") (internal citations omitted).
C. Whether Baca's Claim is Nondischargeable
At the outset, the Court notes Baca did not appear at the trial due to technical difficulties, despite the Court's order requiring parties to test all equipment ahead of time and to take part in the Court's Zoom training sessions. As such, no testimony was received from Baca and the Court's consideration of his claim is limited to the evidence and testimony received from Perry and Judge.
ECF No. 44.
As with Perry, the evidence provided at trial clearly demonstrated Baca was also injured in the altercation. Unlike Perry's injuries, however, the evidence and testimony did not demonstrate Baca's injuries were intentionally caused by Judge. Specifically, Judge testified when he was struck by Perry in the face, he sustained substantial injuries to his eye. Judge testified he could not see and was swinging wildly simply because he was unstable on his feet. Judge further testified he did not have any interaction with Baca at the bar and was not aware of who Baca was until the proceedings in La Plata County District Court.
See Exhs. 3 and 6.
The Court finds Judge's testimony on this point to be credible, and the video of the altercation supports this. In the video Judge can be seen struggling to stand while Perry is led away from the bar immediately after the altercation. Several people, including a man in a hat, are holding Judge or otherwise attempting to help him stand away from Perry, and Judge eventually stumbles back to the bar top. Perry identified the man in the hat as Baca, and after Judge regains his footing Baca is looking at his elbow, which is where he was injured. The doctor's report confirms this, stating "[Baca] reports he was in an altercation at a bar downtown, when somebody broke a coffee mug and was swinging around, resulting in a laceration to his right elbow ...."
Exh. 1.
Exh. 3.
As stated in Geiger , "debts arising from recklessly or negligently inflicted injuries do not fall within the compass of § 523(a)(6)." There is no additional testimony for the Court to consider due to Baca's technical difficulties. Accordingly, the Court concludes Baca failed to meet his burden of establishing his injury was intentionally caused by Judge, and his claim against Judge is therefore dischargeable.
Geiger , 523 U.S. at 64, 118 S.Ct. 974.
CONCLUSION
Although all three parties involved in this altercation suffered injuries, only Perry has successfully established Judge's intent, and he is therefore entitled to a nondischargeable claim for the injuries he sustained. The Court shall enter a separate judgment consistent with this Order.
ORDER ON RECONSIDERATION
This matter comes before the Court on the Motion for Reconsideration filed by Plaintiff Thomas Baca ("Baca "). The Court previously held a trial on the claims asserted by Plaintiffs Baca and James Perry ("Perry " and together with Baca, "Plaintiffs ") against Debtor-Defendant Stephen Charles Judge ("Judge "). While the Court received documentary evidence as well as testimony from Perry and Judge, Baca failed to appear. Ultimately the Court determined Baca failed to meet his burden of establishing his claim against Judge was nondischargeable pursuant to § 523(a)(6).
ECF No. 56 ("Motion ").
ECF No. 46.
See ECF No. 52 ("Order "). Unless otherwise specified, all references herein to "Section" and "§" refer to Title 11 of the United States Code, 11 U.S.C. § 101, et seq.
In the Motion, Baca requests this Court reconsider its Order and enter judgment in Baca's favor. Specifically, Baca requests the Court consider Judge's guilty plea to the criminal charge of assault and determine Baca's claim to be nondischargeable. Although Judge did not file a response to the Motion, the Court has reviewed the evidence and the relevant law and is prepared to issue an order accordingly.
ANALYSIS
While the Motion is silent as to which Federal Rule of Bankruptcy Procedure or Federal Rule of Civil Procedure the "motion to reconsider" is brought under, generally federal courts treat such motions as either a motion to alter or amend judgment under Fed. R. Civ. P. 59(e) or a motion for relief from judgment under Fed. R. Civ. P. 60(b). "These two rules are distinct; they serve different purposes and produce different consequences. Which rule applies to a motion depends essentially on the time a motion is served." A motion under Fed. R. Bankr. P. 9023 and Fed. R. Civ. P. 59(e) to alter or amend a judgment must be filed within fourteen days after entry of judgment. If the motion is filed within that time, it falls under Fed. R. Civ. P. 59(e). If the motion is filed after that time, it falls under Fed. R. Civ. P. 60(b). In this case, the Motion was received by the Court eight days after the Order. Therefore, the Court will construe Baca's Motion as a motion under Fed. R. Bankr. P. 9023 and Fed. R. Civ. P. 59(e) to alter or amend the Court's Order.
See In re Pabon Rodriguez , 233 B.R. 212, 218 (Bankr. D. P.R. 1999) aff'd, 17 Fed.Appx. 5 (1st Cir. 2001) (quoting Van Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991) ) ("A ‘motion to reconsider’ is not among the motions recognized by the Federal Rules of Civil Procedure.").
Van Skiver , 952 F.2d at 1243.
With respect to such motions, the United States Court of Appeals for the Tenth Circuit has stated "[g]rounds warranting a motion to reconsider [under Rule 59(e) ] include (1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice." Rule 59(e) motions are appropriate where a court has misapprehended the facts, a party's position, or controlling law. A court has considerable discretion in ruling on a motion to reconsider under Fed. R. Civ. P. 59(e).
In re Sun River Energy, Inc., 536 B.R. 872, 876 (Bankr. D. Colo. 2015) (quoting Servants of Paraclete v. Does , 204 F.3d 1005, 1012 (10th Cir. 2000) ).
Id .
Phelps v. Hamilton , 122 F.3d 1309, 1324 (10th Cir. 1997).
Baca has not alleged a change in the law controlling the issuance of the Order. The Court is aware of no such change. In reviewing the Motion the Court notes Baca cites much of the same case law included in his Motion for Summary Judgment and subsequent Motion to Reconsider the Order denying summary judgment. Baca likewise did not allege the existence of new evidence. Rather, Baca points to the evidence which was admitted at trial and duly considered by the Court in its Order. Baca instead argues the Court made an error of law by failing to determine his claim in nondischargeable because, according to Baca, under Tinker v. Colwell, "the standard is not actual intent or malice but whether the injurious consequences would naturally be expected to result from [the action]."
ECF No. 13.
ECF Nos. 25 (Motion to Reconsider) and 30 (Order denying same) ("First Order Denying Reconsideration ").
193 U.S. 473, 24 S.Ct. 505, 48 L.Ed. 754 (1904).
Motion at p. 5.
The Court disagrees with Baca's characterization of the holding in Tinker . The Court previously discussed the import of Tinker and the subsequent Supreme Court case of Kawaauchau v. Geiger in its First Order Denying Reconsideration. The Court noted Tinker stands for the proposition "[an] act is willful ... in the sense that it is intentional and voluntary" even if performed "without any particular malice." Tinker also defines "malice" as "a wrongful act, done intentionally, without just cause or excuse." Geiger , decided nearly a century after Tinker , focuses on the "intentional" requirement of § 523(a)(6), stating "nondischargeability [under § 523(a)(6) ] takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury."
523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998).
Tinker , 193 U.S. at 485, 24 S.Ct. 505.
Id. at 486, 24 S.Ct. 505.
Geiger , 523 U.S. at 61, 118 S.Ct. 974.
Considering this precedent, the Court declines to reconsider its Order. Specifically, the evidence presented to the Court showed although Judge's actions resulted in Baca's injuries, he did not intend to cause such injuries. The video of the altercation shows an injured Judge swinging wildly, and Judge's testimony, which the Court found credible on this point, was that his eye had been severely injured, he could not see, and he was simply struggling to stand. Baca failed to appear to rebut this testimony. As such, the evidence presented to the Court at trial does not support a finding Judge intended to injury Baca or was even acting intentionally at all. As stated in Geiger , "debts arising from recklessly or negligently inflicted injuries do not fall within the compass of § 523(a)(6)." .
Id. at 64, 118 S.Ct. 974.
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IT IS HEREBY ORDERED the Plaintiffs' Motion to Reconsider is DENIED.