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Shankle v. Shankle (In the Matter of Shankle)
Citation:Case No. 13-60251 (5th Cir. Feb 7, 2014) (per curiam)
Affirmed judgment of non-dischargeability based on debtor’s failure to tender marital assets in contravention of a 1999 divorce decree, concluding that debtor’s actions “constituted an objective substantial certainty of harm to [the plaintiff] and, as a result, a willful and malicious injury under § 523(a)(6).” The debtor was held liable for the assets he failed to turn over due, in part, to a decline in the stock market in the three years during which he refused to turn over the assets to his former spouse. The Fifth Circuit agreed with the bankruptcy court’s conclusion that if the debtor had complied with the divorce decree in the first place, the subsequent decline in stock prices would not have been an issue; but, in all events, the decline in market prices did not serve as a defense under § 523(a)(6).
Appeal from the United States District Court for the Northern District of Mississippi, which affirmed judgment of the Bankruptcy Court.
In 1999, a state court in Arkansas entered a divorce decree dividing certain marital assets, including three investment accounts listed in the debtor’s name (worth approximately $184,000, combined). Each spouse was to receive value of approximately $92,000 from the three accounts. Rather than tendering the spouse’s share of the investment accounts as required under the decree, the debtor liquidated the largest account (worth more than his share), spent the proceeds for his own benefit, and refused to tender the other two accounts. Litigation ensued in state court, resulting contempt and sanctions against the debtor. By the time the debtor tendered the remaining two accounts in 2002, the spouse received only $50,000 (substantially less than what she would have received had the debtor turned over the accounts in 1999). In 2006, a state court entered judgment in favor of the former spouse, finding the debtor liable for the 1999 value of the securities ($97,435.91), plus the interest the former spouse was denied due to the debtor’s refusal to comply with the divorce decree. The debtor filed a chapter 7 bankruptcy petition, and the spouse filed a complaint to determine this debtor non-dischargeable under section 523(a)(6) as a willful and malicious injury. In 2012, the bankruptcy court held a trial and ruled in favor of the debtor’s former spouse, concluding that the debt for $97,434.91 was non-dischargeable. The debtor appealed, and the district court affirmed.
Judge(s):SMITH, DeMOSS, and HIGGINSON