Larsen v. Nicolai et al

Filing 13

ORDER signed by Judge J P Stadtmueller on 12/30/10 as follows: affirming the bankruptcy court's grant of summary judgment in favor of the creditors' § 523(a)(6) claims; denying as moot 3 4 6 9 and 10 appellant's pending motions; and, DISMISSING this appeal. (cc: appellant, all counsel)(nm)

L a r s e n v. Nicolai et al

D o c . 13

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN
____________________________________________ D A V ID M. LARSEN, A p p e l la n t , v. T E R I JENDUSA-NICOLAI, DAVID M. NICOLAI, A .M .L ., and H.M.L., minors by their Guardian A d Litem, Patrick O. Dunphy, A p p e lle e s . ____________________________________________ Case No. 10-CV-204

ORDER
T h is case arises out of appellant-debtor's assault, kidnapping and attempted m u rd e r of his ex-wife, appellee Teri Jendusa-Nicolai ("Ms. Jendusa-Nicolai"). See S ta te v. Larsen, 2007 W I App 147, 302 W is.2 d 718, 736 N.W .2 d 211; see also U n ite d States v. David M. Larsen, No. 08-3088 (7th Cir. Aug. 4, 2010). On March 11, 2 0 1 0 , appellant David M. Larsen ("Larsen") appealed a decision by the United States B a n k ru p tc y Court for the Eastern District of W is c o n s in ("bankruptcy court") holding th a t state court tort judgments rendered against Larsen were not dischargeable u n d e r 11 U.S.C. § 523(a)(6), which precludes a debtor from discharging a debt c a u s e d by the debtor's willful and malicious injury to a person or property. In an a d ve rsa ry proceeding the bankruptcy court denied discharge and entered summary ju d g m e n t in favor of the creditor-appellees because it concluded that the state court ju d g m e n t determined that Larsen's conduct was willful and malicious, and that

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th e re fo re , issue preclusion barred Larsen from attempting to litigate the issue in a b a n k ru p tc y proceeding. The court affirms the decision of the bankruptcy court. B AC K G R O U N D T h e facts are as follows: On the three year anniversary of their divorce, Ms. J e n d u s a -N ic o la i went to the home of her ex-husband, Larsen, to pick up their d a u g h te rs . After her arrival, Larsen locked the children in a bedroom and attacked M s . Jendusa-Nicolai, beating her with a baseball bat. He bound her with duct tape to prevent any attempt at escape, stripped her of her pants, shoes, and socks, s tu ffe d her in a garbage can partially filled with snow, and placed the can in the u n h e a te d cargo box of his pickup truck. Larsen then drove his ex-wife to an

u n h e a te d storage locker he had rented, placed boxes on top of the garbage can to p re ve n t her escape, and left. Ms. Jendusa-Nicolai remained bound, in the snowfille d garbage can, for over 18 hours before she was rescued. As a result, Ms. J e n d u s a -N ic o la i suffered many injuries, including severe bruising and contusions, fa c ia l lacerations, hypothermia, the loss of all ten of her toes to frostbite, and a m is c a r r ia g e .1 L a rs e n was convicted in state court of attempted first-degree intentional h o m ic id e and interference with custody and sentenced to 37 years in state prison. S e e Larsen, 2007 W I App147, ¶ 1. Because Larsen had transported Ms. JendusaN ic o la i across state lines, he was also charged in federal court, and convicted of

The facts are taken from the bankruptcy court's decision. Jendusa-Nicolai v. Larsen (In re Larsen), 422 B.R. 913 (Bankr.E.D.Wis. 2010).

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k id n a p p in g and interstate domestic violence. United States v. Larsen, No. 04-CR-29 (E .D . W is . Aug. 7, 2008). Appellant was sentenced to life imprisonment for the k id n a p p in g offense and 120 months on the domestic violence offense to run c o n c u rre n tly to the state sentence. Id. Ms. Jendusa-Nicolai and her family then commenced a civil suit against L a rs e n for compensatory and punitive damages. In re Larsen, 422 B.R. at 917.2 A b e n c h trial in the civil action was held, with the debtor present and represented by c o u n s e l. Id. The Racine County Circuit Court ruled in favor of the plaintiffs on their c la im s for assault and battery, intentional infliction of emotional distress, false im p ris o n m e n t, and loss of society and companionship. Id.3 O n March 13, 2009, Larsen filed a voluntary petition for Chapter 7 bankruptcy. T h e appellees brought an adversary proceeding objecting to the dischargeability of c e rta in obligations incurred by Larsen ­ specifically the state court judgment for d a m a g e s . The appellees moved for summary judgment asserting that they were e n title d to a nondischargeability judgment pursuant to 11 U.S.C. § 523(a)(6).4 On J a n u a ry 29, 2010, an order for nondischargeable judgment was entered. The

Because copies of the state court civil judgment and the transcript from the state court proceedings are not included in the record on appeal, the court's citation to the state court case is based on information provided to the court by the bankruptcy court's decision in adversary number 09-2231, In re Larsen, 422 B.R. 913. On July 22, 2008, the state court rendered judgment against Larsen, and in favor of Ms. Jendusa-Nicolai and her family, as follows: Ms. Jendusa-Nicolai, $3,410,785.38; David M. Nicolai (husband), $201,839.54; the children of Ms. Jendusa-Nicolai and Larsen, $50,459.89 each. Section 523(a)(6) of the Bankruptcy Code provides that a debt "for willful and malicious injury by the debtor to another" is not dischargeable. 11 U.S.C. § 523(a)(6).
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b a n k ru p tc y court held that issue preclusion precluded relitigation of the state court to rt judgments which established a willful and malicious injury under § 523(a)(6). DISCUSSION I. P ro c e d u ra l Defects A s an initial matter, the court is obliged to discuss the procedural defects in L a rs e n 's appeal because the deficiencies affect the court's review. On February 8, 2 0 1 0 , Larsen properly and timely filed, in the bankruptcy court, a notice of appeal fro m the bankruptcy court's decision in adversary case number 09-2231. (Docket # 1 ).5 Pursuant to Federal Bankruptcy Rule 8006, within fourteen days of filing the N o tic e of Appeal with the bankruptcy court, Larsen was required to file a designation o f items to be included in the record on appeal as well as a statement of the issues t o be presented. Fed. R. Bankr. P. 8006. Larsen failed to do so.6 On August 5, 2 0 1 0 , over six months after filing his Notice of Appeal, Larsen filed a Motion for E x te n s io n of Time to file a designation of items to be included in the record on a p p e a l as well as a purported designation of items. (Docket #9). Not only is such a

Larsen is not represented by counsel in this appeal and, therefore, his pleadings are entitled to a less strict construction than that accorded the pleadings of litigants represented by counsel. Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 596 (1972). Though the court has applied a less stringent standard in its review of Larsen's filings, the court notes for the record, that petitioner appears to be intelligent and capable of managing his own litigation in various courts. Indeed, he navigated his bankruptcy proceedings without counsel. His litigation management belies claims of inexperience with the legal process and the bankruptcy rules on appeal. The bankruptcy court, on its own initiative, transmitted a copy of the record to the clerk of the district court. Fed. R. Bankr. P. 8007(b). Therefore, the district court's record consists of a copy of the notice of appeal, the bankruptcy court's memorandum and decision, the bankruptcy court's order for nondischargeable judgment, the judgment, the main case docket sheet, and the adversary case docket sheet. (See Docket #1).
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filin g months overdue, but it follows an inappropriate procedure and is substantively la c k in g . First, a designation of items and a statement of the issues should be filed w ith the clerk of the bankruptcy court, not the clerk of the district court. Fed. R. B a n k r . P. 9001(3). Because Larsen's August 5, 2010 filing was filed with the district c o u rt clerk, it did not effectuate the transfer of the entire record to this court. F u rth e rm o re , Larsen's designation of items simply provides excuses for his failure to designate the record at the outset of this appeal, including that he assumed the re c o rd would be forwarded to the district court as it is in criminal cases.7 Larsen then re q u e s ts that the entire record be included on appeal. This designation of items for th e record is insufficient. The result is that this court has before it only the

b a n k ru p tc y court's decision from which to determine whether the bankruptcy court e rr e d . This is inherently problematic because the bankruptcy court's decision is d e p e n d e n t upon an analysis of the state court's civil judgment and findings of fact. T h u s , the court is limited to the excerpts of the state court transcript and judgment th a t the bankruptcy court cited in its decision. Such circumstances do not facilitate a meaningful review. Indeed, Larsen's briefs fail to cite to the record other than to re fe r e n c e page numbers of the bankruptcy court's decision, thereby further hindering th e court's ability to fully analyze the record and the sufficiency of the bankruptcy

The parties are expected to know Bankruptcy Rule 8006's requirements. No notice of the need for a record designation or statement of issues is sent to the parties.

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c o u r t's findings. 8 It also appears that Larsen has failed to comply with Bankruptcy R u le 8010(1)(a), which requires a "statement of the facts relevant to the issues p re s e n te d for review, with appropriate references to the record" to be included in the a p p e lla n t 's brief. Fed. R. Bankr. P. 8010(1)(a). Though Larsen's initial brief has a h e a d in g labeled "Statement of the Facts," he merely lists the procedural history of th e bankruptcy proceedings. (Appellant's Br. 4). The court appreciates that Larsen's a c c e s s to the necessary resources for managing this appeal is limited due to his fin a n c ia l circumstances and incarceration, yet Bankruptcy Rule 8010 is significant b e c a u s e it serves a substantive function by providing the opposing party and the c o u rt an indication of "which flaws in the appealed order or decision motivate the a p p e a l." In re Gulph Woods Corp., 189 B.R. 320, 323 (E.D. Pa. 1995). Accordingly, the appellees urge the court to dismiss Larsen's appeal due to h is failure to comply with the rules governing bankruptcy appeals. (Appellees' Br. 1 1 -1 2 ). Bankruptcy Rule 8001(a) gives the court authority to dismiss an appeal for fa ilu re to comply with the rules. Though failure to comply with Rule 8006 is not ju ris d ic tio n a l, it may provide the basis for dismissal of an appeal. In In re Thompson, 1 4 0 B.R. 979 (N.D. Ill. 1992), aff'd 4 F.3d 997 (7th Cir. 1993), the bankruptcy court d is m is s e d an appeal for just such a failure. The court explained that "the burden of

Not only has Larsen failed to properly designate items for inclusion in the record and to make a statement of the issues, he has also repeatedly requested extensions to file both his briefs. Though his limited access to the prison library and computers may have warranted an initial extension, Larsen's incessant untimeliness provides the court with further reason to consider dismissing his appeal based on his violation of the bankruptcy rules.

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p ro vid in g [the district court] with an adequate record on appeal is squarely on the a p p e lla n t." Id. The court went on to note that "`unless the record that is brought b e fo re the court affirmatively shows the occurrence of the matters upon which the a p p e lla n t relies for relief, the appellant may not urge those matters on appeal.'" Id. (q u o tin g 9 Lawrence King, Collier on Bankruptcy ¶ 8006.04 (1992)). The court fu rth e r stated that an adequate designation of issues on appeal is necessary to put th e appellee on notice as to which issues it must defend against and whether the a p p e l la n t 's designation of issues will produce a record adequate for the reviewing c o u rt. Id. O th e r courts have found it appropriate to dismiss a bankruptcy appeal for s im ila r shortcomings. See In re Champion, 895 F.2d 490, 492 (8th Cir. 1990) (h o ld in g that a district court did not abuse its discretion by dismissing an appeal w h e r e the appellant failed to file a designation of the record or a statement of the iss u e s as required by Bankruptcy Rule 8006); see also In re Fitzsimmons, 920 F.2d 1 4 6 8 , 1472 (9th Cir. 1990) (dismissal proper where corporation failed to timely serve d e s ig n a tio n of the record and failed to make a written request for the record). As a general rule, when determining whether to dismiss an appeal based on n o n c o m p lia n c e with nonjurisdictional bankruptcy procedure requirements, the court m u s t consider: (1) whether alternative measures in lieu of dismissal are available; a n d (2) whether the conduct giving rise to the dismissal was caused by the party's a tto rn e y. Matter of Thompson, No. 92-2587, 1993 W L 347181, at *4 (7th Cir. 1993)

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( c it in g Greco v. Stubenberg, 859 F.2d 1401, 1404 (9th Cir. 1988)). Larsen is p ro c e e d in g pro se, and, therefore, he is responsible for the conduct giving rise to the d is m is s a l. Furthermore, the court has considered alternative measures in lieu of d is m is s a l. The court delayed the disposition of this action, allowing ­ though

a d m itte d ly not affirmatively granting ­ appellant the opportunity on numerous o c c a s io n s to extend the time in which to file his briefs. Six months after the deadline fo r designation of the record, Larsen finally attempted to comply with the bankruptcy ru le s on appeal. As the court has noted, this attempt was unsuccessful. Therefore, th e court finds it would be appropriate to dismiss Larsen's appeal simply based on h is failure to comply with the rules governing bankruptcy appeals. However, in the in te re s t of completeness, the court will continue, as best it can in light of the in c o m p le te record now before it, its analysis of Larsen's appeal on the merits. II. S t a n d a r d of Review T h is court has jurisdiction to hear an appeal of a bankruptcy court's order u n d e r 28 U.S.C. § 158(a). A bankruptcy court's findings of fact are reviewed for c le a r error, and its conclusions of law are reviewed de novo. In re Smith, 286 F.3d 4 6 1 , 464-65 (7th Cir. 2002). In this case, the bankruptcy court granted summary ju d g m e n t to appellees. See Fed. R. Bankr. P. 7056(c). The grant of summary ju d g m e n t in bankruptcy proceedings entails the resolution of a legal conclusion and, th e r e fo r e , this court's review is de novo. Peterson v. Scott (In re Scott), 172 F.3d 9 5 9 , 966 (7th Cir. 1999). To prevail on a motion for summary judgment, appellees

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m u s t show that there is no genuine issue as to any material fact, and that they are e n title d to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U .S . 242, 248, 106 S.Ct. 2505 (1986). In determining whether Larsen has created a genuine issue of material fact, the court construes all facts and reasonable in fe re n c e s to be drawn therefrom in his favor. See id. at 257-58. III. Is s u e Preclusion A c c o rd in g to his briefs, Larsen's principal issue on appeal is that the b a n k ru p tc y court erred by finding that issue preclusion barred the relitigation of the s tate court's findings, which he claims do not establish a willful and malicious injury fo r purposes of § 523(a)(6). The doctrine of issue preclusion limits the litigation of issues that have been d e c id e d in a previous action, provided the party against whom the prior decision was a s s e rte d had a full and fair opportunity to litigate that issue in the earlier proceeding. S e e Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411 (1980); see also Stephan v. R o c k y Mountain Chocolate Factory, Inc., 136 F.3d 1134, 1136 (7th Cir. 1998). The S u p re m e Court has concluded that issue preclusion applies in dischargeability p ro c e e d in g s in bankruptcy. Grogan v. Garner, 498 U.S. 279, 284 n. 11, 111 S.Ct. 6 5 4 (1991); see also Klingman v. Levinson, 831 F.2d 1292, 1295 (7th Cir. 1987). F u rth e rm o re , federal courts must apply the forum state's law of issue preclusion w h e n determining the preclusive effect of a state court judgment and in determining th e dischargeability of debt. 28 U.S.C. § 1738; Rocky Mounty Chocolate Factory,

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1 3 6 F.3d at 1136; Bukowski v. Patel, 266 B.R. 838, 842 (E.D. W is . 2001) (citing In r e Bulic, 997 F.2d 299, 304 n. 6 (7th Cir. 1993)). Therefore, the court will apply W isc o n s in law to determine whether issue preclusion applies in this case. Under Wisconsin law, issue preclusion limits the relitigation of issues that have b e e n contested in a previous action between the same or different parties. Michelle T . by Sumpter v. Crozier, 173 W is . 2d 681, 687, 495 N.W.2d 327, 329 (Wis. 1993). T h e doctrine is intended to prevent parties from revisiting issues "actually litigated in a previous action." Paige K.B. ex rel. Peterson v. Steven G.B., 226 W is .2 d 210, 2 1 9 , 594 N.W .2 d 370 (W is . 1999). The preclusive effect of prior litigation arises w h e re "`an issue is actually and necessarily determined by a court of competent ju ris d ic tio n .' " Id. (quoting Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970 (1 9 7 9 )); see also Robinson v. City of West Allis, 239 W is .2 d 595, 614-15, 619 N .W .2 d 692 (W is . 2000). The party asserting issue preclusion has the burden of e s ta b lis h in g that the doctrine should be applied. Paige K.B. ex rel. Peterson, 226 W is .2 d at 219. In addition, where appropriate, courts must conduct a "fundamental fa irn e s s " analysis to determine whether it is equitable to apply issue preclusion in a g ive n case and, in doing so, may consider a variety of factors. Michelle T. by S u m p te r, 173 W is.2 d at 698. Though the fundamental fairness analysis is generally a discretionary affair, c o u r ts may consider some or all of the following factors: 1) could the party against w h o m preclusion is sought, as a matter of law, have obtained review of the

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ju d g m e n t; 2) is the question one of law that involves two distinct claims or in te rve n in g contextual shifts in the law; 3) do significant differences in the quality or e xte n s ive n e s s of proceedings between the two courts warrant relitigation of the is s u e ; 4) have the burdens of persuasion shifted such that the party seeking p re c lu s io n had a lower burden of persuasion in the first trial than in the second; and 5 ) are matters of public policy and individual circumstances involved that would re n d e r the application of issue preclusion to be fundamentally unfair, including a d e q u a te opportunity or incentive to obtain a full and fair adjudication in the initial a c tio n ? Michelle T. v. Crozier, 173 W is.2 d at 689. Larsen's appeal appears to focus on factor two of the fundamental fairness a n a lys is as he argues the state court's finding of liability does not equate with a fin d in g that he caused a willful and malicious injury under § 523(a)(6). Yet, Larsen's c la im s could also be construed as challenging the first part of the issue preclusion te s t ­ whether the issue was actually and necessarily determined. (Appellant's R e p ly Br. 3).9 No matter how his challenge is construed, the main issue to be d e te rm in e d on appeal is whether issue preclusion precludes the dischargeability of

Larsen frames the issue on appeal as an "identity of issues" challenge. (Appellant's Reply Br. 3). This phrase likely stems from the older, formalistic test that Wisconsin courts used to determine whether issue preclusion applied. See State ex rel. Flowers v. DHSS, 81 Wis.2d 376, 387, 260 N.W.2d 727 (1978) ("The four elements of the [issue preclusion] test have been identified as including: (1) a valid, final judgment; (2) identity of issues; (3) privity of parties; and (4) issues which have been litigated and necessarily determined." ) (emphasis added). However, this test has since been replaced with the looser, equities-based test articulated by the court above. The test asks, in part, whether the issue actually has been litigated and whether applying issue preclusion comports with the principles of fundamental fairness. Michelle T. v. Crozier, 173 Wis.2d at 687-89.

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the W is c o n s in judgment pursuant to § 523(a)(6). The bankruptcy code provides: "A d is c h a rg e [under the bankruptcy laws] does not discharge an individual debtor from a n y debt . . . for willful and malicious injury by the debtor to another entity or to the p ro p e rty of another entity." 11 U.S.C. § 523(a)(6). Thus, in order for issue preclusion to apply, the issues of willfulness and maliciousness must have been determined by th e W is c o n s in judgment. Hence, Larsen cannot discharge the W is c o n s in judgment if his conduct giving rise to that judgment was determined to be willful and malicious. L a r s e n asserts that though his conduct may have been intentional, the "w illfu ln e s s " standard requires that he actually intend not simply to cause harm or in ju ry in general, but rather to cause the actual injury suffered. Larsen appears to n a rro w his challenge in this respect to only one of Ms. Jendusa-Nicolai's injuries re s u ltin g from his conduct ­ the frostbite and subsequent amputation of her toes. (A p p e lla n t's Br. 7). He also challenges whether the state court judgment established a willful and malicious injury with regard to the derivative claims of Ms. JendusaN ic o la i's husband and children. Consequently, the court must determine the m e a n in g of a willful and malicious injury under § 523(a)(6) to reach a conclusion as to whether the issue of willful and malicious injury was determined in state court. A. T h e Meaning of Willful and Malicious Injury

"M a lic io u s , " as used in § 523(a)(6) means in conscious disregard of one's d u tie s or without just cause or excuse. In re Thirtyacre, 36 F.3d 697, 700 (7th Cir. 1 9 9 4 ). It does not require ill-will or a specific intent to cause harm. Id.

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"W illfu l" means deliberate or intentional. Kawaauhau v. Geiger, 523 U.S. 57, 6 1 , 118 S.Ct. 974 (1998). Geiger held that the § 523(a)(6) exception is limited to c o n d u c t associated with "intentional torts" and does not encompass conduct that is m e re ly negligent. The Supreme Court explained: T h e word "willful" in (a)(6) modifies the word "injury," indicating th a t nondischargeability takes a deliberate or intentional injury, not m e r e ly a deliberate or intentional act that leads to injury. Had Congress m e a n t to exempt debts resulting from unintentionally inflicted injuries, it might have described instead "willful acts that cause injury." Or, C o n g r e s s might have selected an additional word or words, i.e., "re c k le s s " or "negligent," to modify "injury." Moreover, as the Eighth C irc u it observed, the (a)(6) formulation triggers in the lawyer's mind the c a te g o ry "intentional torts," as distinguished from negligent or reckless to rts . Intentional torts generally require that the actor intend "the c o n s e q u e n c e s of an act," not simply "the act itself." Geiger, 523 U.S. at 61-62. Thus, the Supreme Court's holding in Geiger specified th a t "willful" for purposes of § 523(a)(6) means actual intent to cause injury, not m e re ly the commission of an intentional act that leads to injury. Larsen contends th a t though his conduct in general may have been intentional, he never intended for h is ex-wife to lose her toes, and hence, this "injury" was not willful. Larsen's a rg u m e n t fails in several respects. First, Larsen's theory of "willful injury" is incorrect because he confuses the c o n c e p t of injury with that of damages. "Injury" means the violation of another's legal rig h t, or the infliction of an actionable wrong. Black's Law Dictionary (9th ed. 2009). A c c o rd in g ly, the invasion by the debtor of a legally protected right of the victim c o n s titu te s the "injury," while the magnitude of the injury is measured by the amount

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o f damages. See ABF, Inc. v. Russell (In re Russell), 262 B.R. 449, 454 (Bankr. N.D. Ind . 2001). Therefore, the "true injury occurs on an abstract level." Id. As such, c o u rts should focus on the invasion of the abstract right, as opposed to the resulting d a m a g e . For instance, as the court explains in In re Russell: "in a case involving a s s a u lt and battery, the true injury is not the creditor's broken jaw, but rather, the u n c o n s e n te d to touching that produced the broken jaw. Consequently, the question to ask is not whether the debtor intended to break the creditor's jaw, but instead, w h e the r the debtor intended to hit the creditor." Id. As applied to this case then, the tru e injury is not Ms. Jendusa-Nicolai's amputated toes, but rather the unconsented to touching that produced the amputated toes. In sum, the state court must have d e te rm in e d that Larsen intended the touching that produced the amputated toes, not th a t he actually intended for Ms. Jendusa-Nicolai's toes to become frost-bitten and la te r amputated. Moreover, Larsen's arguments are unpersuasive because in cases involving th e extreme conduct at issue here, it is impossible to separate the "conduct" of a s s a u lt, battery, and intentional infliction of emotional distress from the "injury" of th e s e torts when considering the tortfeasor's intent. "In other words, performing a m e d ic a l procedure [as in Geiger] and driving an automobile are activities that can be e xe c u te d intentionally, but in a manner that is reckless or negligent with regard to the o u tco m e ." Star's Edge, Inc. v. Braun (In re Braun), 327 B.R. 447, 450-51 (Bankr. N .D .C a l. 2005). On the other hand, activities such as beating your wife with a

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b a s e b a ll bat or stripping her of her clothes and locking her in a garbage can filled w ith snow do not have uncertain or variable outcomes. "W h ile a medical procedure c a n result in either healing or harm, and a physician may cause harm by n e g lig e n c e ," assault, battery and intentional infliction of emotional distress are c a te g o ric a lly harmful activities. Id. Larsen further argues that the bankruptcy court erred by using an objective s u b s ta n tia l certainty test to determine his intent to cause injury to his former s p o u s e 's husband and his own children. Though Geiger eliminated the possibility th a t "willful" encompasses negligent or reckless torts, the holding did not define the s c o p e of the term "intent" utilized to describe willful conduct. Mut. Mgmt. Servs., Inc. v . Fairgrieves (In re Fairgrieves), 426 B.R. 748, 757 (Bankr. N.D.Ill. 2010); Zamora v . Jacobs (In re Jacobs), 403 B.R. 565, 581 (Bankr. N.D.Ill. 2009). Recent decisions, h o w e ve r, have generally found that either a showing of subjective intent to injure the c re d ito r or a showing of subjective knowledge by the debtor that injury is s u b s ta n tia lly certain to result from his acts can establish the requisite intent required b y Geiger. Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 463-65 (6th Cir. 1 9 9 9 ); Tex. By & Through Board of Regents of Univ. of Tex. Sys. v. Walker, 142 F .3 d 813, 823 (5th Cir.1998); Su v. Carrillo (In re Su), 290 F.3d 1140 (9th Cir. 2002); F id e lity Fin. Servs. v. Cox (In re Cox), 243 B.R. 713, 719 (Bankr. N.D.Ill. 2000); B u k o w s k i v. Patel, 266 B.R. 838, 844 (E.D. W is . 2001). However, at least one court h a s employed an objective standard under which the "willfulness" requirement is

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s a tis fie d if there is either a subjective intent to cause injury or an objective s u b s ta n tia l certainty that the debtor's conduct will cause injury. Miller v. J.D. Abrams, Inc . (In re Miller), 156 F.3d 598 (5th Cir. 1998). The bankruptcy court did rely on this o b je c tive standard in determining that the state court judgment established a willful a n d malicious injury for purposes of the derivative claims. In re Larsen, 422 B.R. at 923. The Seventh Circuit has not yet addressed this issue. Nevertheless, this court fin d s it unnecessary to expressly decide which standard, whether subjective or o b je c tive , should be applied because the case at hand does not turn on this issue. A s the court will subsequently discuss, the derivative claims are connected to the in ju ry caused to Ms. Jendusa-Nicolai. Consequently, the court's inquiry should focus s o le ly on whether the injury caused to Ms. Jendusa-Nicolai was willful and malicious, n o t on whether a separate injury caused to the derivative appellees was willful and m a lic io u s . Because this court finds the state court judgment established that Larsen h a d actual intent to cause injury to Ms. Jendusa-Nicolai, the substantial certainty test is inapplicable. F o r the reasons set forth above, the court finds Larsen's arguments regarding th e appropriate standard for "willfulness" unpersuasive. The intent to cause a s p e c ific or particularized "injury," such as frostbite to a person's toes, is not required fo r a finding of "willful injury." The focus of the court's inquiry should be on the true

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in ju ry ­ the invasion of the individual's personal rights ­ rather than the specific d a m a g e s resulting therefrom. B. S ta te Court Determination 1. C la im s of Ms. Jendusa-Nicolai

In this case, the state court found not only that Larsen intended to cause his e x-w ife physical and severe emotional harm but he also intended to kill Ms. JendusaN ico la i. In re Larsen, 422 B.R. at 918-19. Larsen argues that the state court never fo u n d he intended Ms. Jendusa-Nicolai to lose her toes, and, therefore, it did not d e te rm in e he caused a willful injury in this respect. However, as previously d is c u s s e d , the state court need not make a finding that the debtor intended to cause th e resulting damage, but rather that he intended to cause the abstract injury ­ an in va s io n of the victim's legal rights. In this case, the court found Larsen liable for a s s a u lt, battery, and intentional infliction of emotional distress and, as a part of these fin d in g s , explicitly found that Larsen intended to cause harm to Ms. Jendusa-Nicolai. C o n s e q u e n tly, this court concludes that the state court's findings with regard to the in t e n t io n a l nature of Larsen's conduct equate with a finding of a willful injury for p u rp o s e s of § 523(a)(6). F u rth e rm o re , the state court also awarded Ms. Jendusa-Nicolai punitive d a m a g e s . Under W is c o n s in law, punitive damages are only available when a d e fe n d a n t "acted maliciously toward the plaintiff or in an intentional disregard of the rig h ts of the plaintiff." W is Stat. § 895.043(3). Thus, the state court awarded

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p u n itive damages either because Larsen acted maliciously or in an intentional d is re g a rd of Ms. Jendusa-Nicolai's rights. In either case, the court necessarily found th a t Larsen's conduct was willful, i.e., that he intended to cause harm to his ex-wife. If the court found that Larsen acted maliciously, it obviously concluded that he in te n d e d to injure Ms. Jendusa-Nicolai. If the court found that Larsen acted in in te n tio n a l disregard of Ms. Jendusa-Nicolai's rights, the willfulness requirement is a lso satisfied because one who intentionally violates another's legal rights acts with in ten t to cause injury. Bukowski v. Patel, 266 B.R. 838, 845 (E.D. W is . 2001) (citing In re Singer Co., N.V., 262 B.R. 257, 264 (Bankr. S.D.N.Y 2001)). Accordingly, the s ta te court could not have awarded punitive damages unless it necessarily d e te rm in e d the debtor's conduct was willful and malicious. Independent of the punitive damages finding, the state court also discussed th e malice involved in the injuries caused by Larsen, stating "the degree of malice h e re was absolute hatred, absolute malice, to strike [Ms. Jendusa-Nicolai] re p e a te d ly even when she tried to get out to push her back in the can and beat her a g a in , threaten to shoot her . . ." In re Larsen, 422 B.R. at 919. Moreover, the state c o u rt discussed that Larsen's conduct was without just cause or excuse. In re T h irty a c re , 36 F.3d at 700. For example, the state court recognized that the exs p o u s e s knew how to "push each other's buttons and did so." In re Larsen, 422 B.R. a t 919. However, the court continued that "it does not in any way lessen or eliminate

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the finding that the degree of malice here was absolute hatred . . ." Id. Therefore, the state court determined that Larsen's conduct caused a malicious injury. 2. D e r iva tive Claims

L a rs e n also disputes that the state court's determination established he c a u s e d willful and malicious injury to Ms. Jendusa-Nicolai's husband and two d a u g h te rs ­ David M. Nicolai ("Mr. Nicolai") and A.M.L. and H.A.L. However, this a rg u m e n t misses the point. The state court entered judgment and awarded damages to these three appellees for derivative claims of loss of society and companionship a n d loss of consortium. Id. at 922. W h a t Larsen's argument fails to account for is th a t these appellees' claims are derivative claims, meaning they are derived from a n o th e r claim. Indeed, a derivative action is defined as "a lawsuit arising from an in ju ry to another person." Black's Law Dictionary (9th ed. 2009). Therefore, in this c a s e , Ms. Jendusa-Nicolai's injury, which the state court found was willful and m a lic io u s , gave rise to the claims of her husband and her children. Moreover, by its plain language, § 523(a)(6) excepts from discharge a debt for w illfu l and malicious injury by the debtor to another entity or to the property of a n o the r entity. The term "entity" includes a "person." 11 U.S.C. § 101(15). The term "p e rso n " includes an "individual." 11 U.S.C. § 101(41). In terms of the derivative c la im s , the individual the debtor injured was Ms. Jendusa-Nicolai. There is nothing in section 523(a) requiring that the injured individual be the person whose debt is e xc e p te d from discharge under § 523(a)(6). Section 523(a)(6) requires only that

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th e re be a debt owing by the debtor and that such debt be "for willful and malicious in ju ry by the debtor to another entity." Here, the debtor is obligated to his former w ife's husband and his own daughters under the state court judgments in their favor. T h e debt arises from the willful and malicious injury by the debtor to Ms. JendusaN ic o la i.10 C O N C L U S IO N In sum, the bankruptcy court correctly concluded the state court judgment d e te rm in e d that Larsen's conduct caused a willful and malicious injury pursuant to § 523(a)(6). Moreover, the bankruptcy court did not err by deciding that the state c o u rt judgments had preclusive effect on the question of nondischargeability of the d e b ts at issue under § 523(a)(6). Thus, after analysis of all potential issues set forth b y Larsen in his appeal, the court finds no error on the part of the bankruptcy court w a rra n tin g reversal or remand and, therefore, affirms its decision. A c c o rd in g ly,

The bankruptcy court ultimately and correctly concluded that the tort judgments of Mr. Nicolai and the two minors should be excepted from discharge because they directly resulted from Larsen's "truly heinous, willful and malicious injury to Ms. Jendusa Nicolai." In re Larsen, 422 B.R. at 923. However, the bankruptcy court's reasoning strayed further than necessary because it premised its findings on an injury suffered by the derivative appellees, rather than on an injury of Ms. Jendusa-Nicolai. Thus, the bankruptcy court overlooked the very nature of the derivative claim and its application to § 523(a)(6). Nevertheless, though the legal analysis differs, the final outcome is proper. Therefore, the court shall affirm the bankruptcy court's decision.

10

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IT IS ORDERED that the bankruptcy court's grant of summary judgment in fa v o r of the creditors' § 523(a)(6) claims is AFFIRMED; IT IS FURTHER ORDERED that all appellant's pending motions (Docket #'s 3 , 4, 6, 9, and10) be and the same are hereby DENIED as moot; and IT IS FURTHER ORDERED that this appeal be and the same is hereby D IS M IS S E D . T h e clerk of court is ordered to enter judgment accordingly. D a te d at Milwaukee, W is c o n s in , this 30th day of December, 2010. BY THE COURT:

J .P . Stadtmueller U .S . District Judge

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