Automotive Finance Corp. v. Morse (In re Morse)
- Citation:
- BAP No. MB 12-081 (1st Cir. B.A.P. September 11, 2013).
- Tag(s):
-
- Ruling:
- In a brief ruling, the Bankruptcy Appellate Panel concluded that the bankruptcy court erred in granting summary judgment in favor of plaintiff on the nondischargeability of its claim under 11 U.S.C. § 523(a)(6). Noting that the “threshold question” of whether the creditor was entitled to relief under § 523(a)(6) as a matter of law “was not raised below or addressed in the briefs, the panel concluded that, in an open, pending chapter 13 case, such relief is expressly excluded by § 1328(a)(2). Reversed and remanded with instructions to dismiss without prejudice.
- Procedural context:
- Plaintiff filed an adversary proceeding in the bankruptcy court seeking determination that its claim against the defendant, a chapter 13 debtor, was nondischargeable under 11 U.S.C. § 523(a)(6). The bankruptcy court granted summary judgment in favor of the plaintiff, and the debtor-defendant appealed.
- Facts:
- While the joint chapter 13 cases of Mark and Lisa Morse were still pending (and prior to confirmation of the plan), Automotive Finance Corp. (AFC) filed a complaint seeking to have its claim declared nondischargeable under paragraphs (2), (4), and (6) of § 523(a). Following briefing, the bankruptcy court granted summary judgment in favor of AFC on the third count, and entered final judgment declaring AFC’s claim excepted from discharge pursuant to § 523(a)(6).
The debtors appealed, and both parties submitted briefing arguing the merits of the bankruptcy court’s ruling on the matter of summary judgment. The panel, reversing the lower court decision, observed that § 523(a)(6) is rendered inapplicable in chapter 13 cases by 11 U.S.C. § 1382(a)(2), which provides that after a debtor has completed payments under its plan, “the court shall grant the debtor a discharge of all debts provided for by the plan…except any debt—(2) of the kind specified in section 507(a)(8)(C) or in paragraph (1)(B), (1)(C), (2), (3), (4), (5), (8), or (9) of section 523(a). As the panel observed, § 523(a)(6) is not included in the list of debts excepted from discharge in chapter 13 (although an analog to § 523(a)(6) exists in § 1328(a)(4)).
Accordingly, the panel concluded that, unless the debtor ultimately receives its discharge despite not having completed all payments under the plan (as permitted under § 1328(b)), a debt of the type described in § 523(a)(6) (willful and malicious injury to property) is not excepted from a chapter 13 discharge.
- Judge(s):
- Haines, Deasy, and Godoy.
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