- Case Type:
- Case Status:
- No. 17-6014 (8th Circuit, Jan 09,2018) Published
- BAP for 8th Cir. affirmed ruling of bankruptcy court (D. Minn - St. Paul) entering judgment on 523(a)(6) claim in favor of debtor. BAP found no error in bankruptcy court ruling that creditor failed to prove debtor acted willfully and maliciously. Notwithstanding collateral estoppel, necessary elements of nondischargeable bankruptcy claim were not implied in state court judgment that debtor had engaged in unauthorized practice of law. State law claim elements did not require findings of willfulness or maliciousness and state court did not find either willfulness or maliciousness.
- Procedural context:
- Bankruptcy court entered judgment in favor of debtor and against plaintiff creditor on 523(a)(6) nondischargeability claim. Plaintiff creditor appealed to BAP for 8th Circuit.
- Debtor was president of "Cash Flow," a licensed debt collector that prepared mechanic's liens for businesses in the construction industry. Creditor was a general contractor and construction management company. Subcontractor retained debtor to prepare a mechanic's lien. Debtor executed affidavit verifying lien facts, notwithstanding that he did not have actual knowledge of veracity. Creditor challenged validity of lien and demanded debtor release it. Debtor promptly released lien. Creditor sued debtor in state court alleging unauthorized practice of law, fraud, and defamation. State court granted creditor judgment on unauthorized practice of law claim only. Debtor filed bankruptcy before judgment amount entered. Creditor sued debtor for nondischargeability under 523(a)(6) (willful and malicious injury).
- Nail, Schermer, Dow
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