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Van Daele Bros., Inc. v. Thoms (In re Thoms)

Van Daele Bros., Inc. v. Thoms (In re Thoms), No. 12-1161 (8th Cir. Feb. 4, 2013) (unpublished opinion)
The 8th Circuit Court of Appeals, AFFIRMING the 8th Circuit BAP and N.D. of Iowa Bankruptcy Court, ruled there was no clear error in the Bankruptcy Court’s finding that the creditor failed to show a “willful and malicious injury” for purposes of excepting the debtor’s debt from discharge under Section 523(a)(6). The creditor-appellant argued the Bankruptcy Court “failed to properly take into account objective information, which according to [the creditor], shows that [the debtor] knew his actions were certain to cause [the creditor] financial harm.” The 8th Circuit noted that “most of the relevant evidence before the [B]ankruptcy [C]ourt depended on credibility determinations.” As the 8th Circuit must defer to the Bankruptcy Court’s credibility findings on appeal, it reviewed the findings of fact made by the Bankruptcy Court for clear error. Although the 8th Circuit commented that the findings were not a “model of clarity,” they were apparently sufficient for the 8th Circuit to determine the Bankruptcy Court “did not clearly err in its ultimate finding that [the creditor] failed to show a ‘willful and malicious injury.’” In support of this determination, the 8th Circuit cited to Tamko Roofing Prods., Inc. v. Smith Eng’g Co., 450 F.3d 822, 829 (8th Cir. 2006) for the proposition that “a trial court ‘need not make specific findings on all facts but only must formulate findings on the ultimate facts necessary to reach a decision.’”
Procedural context:
The debtor filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code. The creditor filed an adversary proceeding claiming that the debtor’s debt should be excepted from discharge under Section 523(a)(6) because the debtor perpetrated a “willful and malicious injury” upon the creditor and his property. The Bankruptcy Court for the Northern District of Iowa determined the creditor failed to prove the debtor “committed deliberate or intentional acts which were substantially certain to cause [the creditor] harm or targeted [the creditor].” The creditor appealed to the Bankruptcy Appellate Panel for the 8th Circuit, which affirmed. The creditor then appealed to the 8th Circuit Court of Appeals, which also affirmed.
The debtor, Jeffrey Thoms, agreed to sell certain cattle to the creditor, Van Daele Bros., Inc., for $75,000. The debtor would, in turn, lease the cattle from the creditor for five annual lease payments of $18,784.23. The debtor defaulted on the first installment payment. The creditor repossessed some of the cattle in partial satisfaction of the debt and settlement negotiations occurred as to the remaining indebtedness, but there was no resolution reached. The debtor ultimately filed a voluntary Chapter 7 bankruptcy petition and the creditor filed an adversary proceeding to have the debt excepted from discharge.
Loken, Beam, Smith

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