4 Collier on Bankruptcy ยถ 523.12[1] at 523-91; see also In re Braen, 900 F.2d 621, 626 n. 4 (3rd Cir. 1990) (using the same quotation from Collier in defining "malicious injury"); Phillippi, Bankr. No. 98-21819-MBM, Adv. No. 98-2256-MBM, at 6 (same); Slosberg, 225 B.R. at 21-22 CA showing of malice requires a showing that the debtor's willful, injurious conduct was undertaken without just cause or excuse"). The Court concludes that the Third Circuit's holding in Conte that an injury is deliberate or intentional if an actor acts with knowledge that there is substantial certainty that injury will result remains good law notwithstanding that it was decided prior to the U.S. Supreme Court's decision in Kawaauhau.
(1) the issue sought to be precluded [is] the same as that involved in the prior action; (2) that issue [was] actually litigated; (3) it [was] determined by a final and valid judgment; and (4) the determination [was] essential to the prior judgment. . . .In re Braen, 900 F.2d 621, 628-29 n. 5 (3d Cir. 1990) (quoting In re Ross, 602 F.2d 604, 608 (3d Cir. 1979) (quoting Haize v. Hanover Ins. Co., 536 F.2d 576, 579 (3d Cir. 1976))), cert. denied, ___ U.S. ___, 111 S.Ct. 782, 112 L.Ed.2d 845 (1991). Of these four elements, the parties contest only the presence of the second: whether the issue of fraud was actually litigated in the Tax Court proceeding.
Here, as in Laganella v. Braen (In re Braen), the Court finds that a state court judgment for malicious prosecution is entitled to collateral estoppel effect in an action under ยง 523(a)(6). Laganella v. Braen (In re Braen), 900 F.2d 621, 626-28 (3rd Cir. 1990), cert. denied, 498 U.S. 1066, 111 S.Ct. 782, 112 L.Ed.2d 845 (1991); see also York v. Shepherd (In re Shepherd), 56 B.R. 218, 219-20 (W.D.Va. 1985) (holding that debtor was collaterally estopped from contesting dischargeability of state court judgment for malicious prosecution); Hunnicutt v. Wellever (In re Wellever), 103 B.R. 856, 857-60 (Bankr.W.D.Mich. 1989) (holding that debtor was collaterally estopped from contesting dischargeability of state court judgment for malicious prosecution); Hardin v. Caldwell (In re Caldwell), 60 B.R. 214, 218-19 (Bankr.E.D.Tenn.
In construing this section, the court must apply federal law. In re Braen, 900 F.2d 621, 626 n. 3 (3d Cir. 1990) ("The exceptions to the general rule of dischargeability are federal substantive law. . . ."); In re Liberati, 11 B.R. 54, 55 (Bankr.E.D.Pa. 1981).
One of the core requirements of issue preclusion under New Jersey law is that the issue sought to be precluded is the same as was litigated in the previous action. See In re Braen, 900 F.2d 621, 628 n. 5 (3d Cir. 1990). We conclude that the jury's finding on which the preclusion ruling was based, i.e., that Conte acted: (1) with knowledge that the Gautams faced a high probability of harm, and (2) with reckless indifference to the consequences, does not constitute a finding of "willful and malicious injury" within the meaning of ยง 523(a)(6).
See In re Phillips, 804 F.2d 930, 932 (CA6 1986); In re Kimzey, 761 F.2d 421, 423-424 (CA7 1985); In re Black, 787 F.2d 503, 505 (CA10 1986); Chrysler Credit Corp. v. Rebhan, 842 F.2d 1257, 1262 (CA11 1988); In re Hunter, 780 F.2d 1577, 1579 (CA11 1986); In re Dougherty, 84 B.R. 653 (CA9 BAP 1988).In re Braen, 900 F.2d 621 (CA3 1990); Combs v. Richardson, 838 F.2d 112 (CA4 1988). I
Auth, 21 F.3d 29, 33 (3d Cir. 1994) ("Absent an error of law, decisions as to proposed jury instructions are generally subject to review only for abuse of discretion."). In re Braen, 900 F.2d 621, 626 (3d Cir. 1990). When the mention of negligence per se is viewed in context with the instruction as a whole, we are satisfied that the Court never actually instructed the jury on negligence per se.
This premise is incorrect as a matter of law. See Langanella v. Braen (In re Braen), 900 F.2d 621 (3d Cir. 1990). In Braen, as in the present case, the debtor was sued in New Jersey state court for malicious prosecution.
Observing that virtually every Court of Appeals had so held, the Court said, "[w]e now clarify that collateral estoppel principles do indeed apply in discharge exception proceedings pursuant to ยง 523(a)." Id. 111 S.Ct. at 658 n. 11; see also In re Braen, 900 F.2d 621, 630 (3d Cir. 1990). Rosemary Brown does not challenge this general principle, but contends that its invocation is limited to situations in which a final judgment has been entered in the state court.
"A court's review of a jury instruction should be undertaken with an eye towards the instructions in their totality and 'not a particular sentence or paragraph in isolation.'" Agere Sys., 2005 WL 2994702, at *2 (quoting In re Braen, 900 F.2d 621, 626 (3d Cir. 1990)). In addition to proving that the instruction was in error, the movant must show that the error was prejudicial (i.e., where "it 'appears to the court [that the error is] inconsistent with substantial justice'").