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Summarizing by Amir Shachmurove

Scarbrough v. Purser (In the Matter of Scarbrough)

--- F.3d ---, Case No. 15-51045 (5th Cir. 2016)
AFFIRMED lower courts' rulings that state court judgment and sanctions were non-dischargeable under 11 U.S.C. 523(a)(2)(A) & (a)(6). Court of appeals rejected all grounds raised by the debtor, including the ground that the state court sanctions order was insufficient to support a judgment of non-dischargeability. The Fifth Circuit concluded that the record of the debtor's "scorched earth" tactics and intentional concealment of evidence amply supported the application of collateral estoppel and satisfied the "willful and malicious" injury requirements under 523(a)(6). The Court also affirmed the judgment that groundless, fraudulent and harassing litigation can give rise to non-dischargeable claims based on fraud and willing and malicious injury. Moreover, even though the state court jury only ruled on three of the fraud elements, the Fifth Circuit concluded that the state court's subsequent rulings on the remaining elements were sufficient to conclude that all elements were "actually litigated," and did not need to be re-tried.
Procedural context:
Appeal from District Court, which affirmed the Bankruptcy Court's ruling that certain state court judgments and sanctions were non-dischargeable under section 523(a)(2)(A) & (a)(6).
The debtor was an attorney who represented a client that conspired with the debtor to take control of an ailing patriarch. Together, they filed false police reports, made false reports to Adult Protective Services and posted YouTube videos to prevent one of the patriarch's children from being elected to her local school board. After the patriarch passed away, the debtor continued to request autopsies and filed false police reports. Litigation ensued where the debtor (as attorney for his co-conspirator) was asked to produce all recordings between the litigants. The client provided certain "secret recordings" to the debtor to produce, but the debtor refused to produce them and, instead, gave them back to his client to conceal. Ultimately, the state court entered judgment against the debtor for fraud, civil conspiracy, defamation and contempt of court for pre-trial discovery abuses. In bankruptcy, the plaintiffs sought to deny the debtor's discharge of those obligations. The bankruptcy court granted summary judgment against the debtor, and this appeal followed.
Stewart, Clement, Haynes

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