Doe v. Boland (In re: Boland)

Case Type:
Case Status:
17-8019 (6th Circuit, Feb 13,2019) Published
The Sixth Circuit BAP reversed the bankruptcy court's ruling (N.D. Ohio) that a civil judgment was dischargeable under 11 U.S.C. § 523(a)(6). The BAP agreed that collateral estoppel was inapplicable on the debtor's intent. However, the debtor's stipulations in a criminal case and federal court rulings established as a matter of law that the debtor knowingly created and possessed pornographic images of real children. The bankruptcy court failed to consider the injury to the plaintiffs' privacy and reputational interests and thus made erroneous factual findings as to the debtor's intent to harm.
Procedural context:
Two minors who held a prepetition judgment against the debtor pursuant to 11 U.S.C. § 2255 sought a determination that the debt was nondischargeable under 11 U.S.C. § 523(a)(6). The plaintiffs filed a motion in limine seeking to preclude the debtor from denying that he knowingly morphed the innocent images of two real children into child pornography, as such findings were made in the proceeding to impose damages as well as to establish that the debtor was substantially certain he would cause injury to the plaintiffs. The bankruptcy court denied the second portion of the motion in limine and held a trial on the debtor’s intent to injure, after which it entered judgment in favor of the debtor finding the plaintiffs had not met their burden under 11 U.S.C. § 523(a)(6). The plaintiffs appealed to the BAP for the Sixth Circuit.
Prepetition, the debtor, an attorney, worked as an expert witness and defense counsel for defendants charged in child pornography cases. The debtor's expertise was in demonstrating that pornographic images could be altered to show that minors were engaged in sexual activity when they were not to assist his clients in arguing that they did not knowingly view or possess child pornography. To accomplish this, the debtor obtained stock photos of minors from websites and manipulated them to depict the minors engaged in sexual acts and then displayed the before and after images in court proceedings. After the debtor filed under Chapter 7, the minors sought a determination that the judgment was nondischargeable under 11 U.S.C. § 523(a)(6). The bankruptcy court partially granted the plaintiffs’ motion in limine, precluding the debtor from disclaiming his stipulation in his diversion agreement that he had knowingly morphed the images of real children into pornography, but finding that the plaintiffs were not entitled to a determination as a matter of law that the debtor was substantially certain he would cause injury to them based on the civil damages action. After trial, the bankruptcy court concluded that the plaintiffs had failed to demonstrate that the debtor had intended to injure them because the debtor only generated the images as an expert witness, the images were in sealed court records, and the debtor testified that he did not know if the images he purchased depicted real children. On appeal, the BAP found the bankruptcy court correctly determined that issue preclusion from the civil proceedings did not apply to preclude the debtor from denying he intended to injure the plaintiffs. Neither the criminal nor civil statutes the debtor was accused of violating had intent to injure as an element and thus the bankruptcy court properly considered the factual issue of intent at trial. As to the trial decision, the BAP found that the bankruptcy court incorrectly assessed what the plaintiffs’ injury was. The plaintiffs’ injury was the violation of their legally protected interests in their reputation, emotional well-being, and privacy. When considering this injury, the debtor’s intentional acts of creating the images of the plaintiffs engaged in pornographic acts clearly invaded the plaintiffs’ privacy and reputation interests. Although 11 U.S.C. § 523(a)(6) involves a consideration of the debtor’s subjective intent, the bankruptcy court unduly credited the debtor’s argument that he only produced the images to defend his clients. The debtor was well versed in the law of child pornography and was well aware that the use of identifiable real children was legally prohibited and potentially harmful to the children involved. Indeed, the debtor sought to avoid criminal charges by sending his computer out of state to his mother. That the debtor’s motive was to aid criminal defendants did not absolve him from liability for the harm caused to the plaintiffs’ privacy and reputational interests. Finally, the rulings in the prior court proceedings precluded the debtor from raising constitutional defenses to the determination that his intentional conduct was “malicious” under 11 U.S.C. § 523(a)(6) as without just cause or excuse. In an opinion concurring in the judgment, Judge Dales concluded that the majority correctly held that the judgment was nondischargeable under 11 U.S.C. § 523(a)(6). However, he disagreed with the majority that any issue of the debtor’s intent to harm the plaintiffs’ reputational or privacy interest remained after the district court’s judgment because the debtor admitted his intent to create the images throughout the prior litigation.
Humphrey, Buchanan, Dales

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