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Silver-Hacker v. Allen (In re Sarah Allen)

20 BK 05391, 20 AP 00214
In an adversary proceeding, the Plaintiff alleged that a debt the Defendant-Debtor owed her constituted a “willful and malicious injury” by the Debtor and thus was non-dischargeable under 11 U.S.C. § 523(a)(6).   The debt stemmed from a probate court proceeding commenced pre-petition by the Plaintiff as the Administrator of her deceased son’s (the “decedent”) estate; after multiple evidentiary hearings, the probate court found the Defendant-Debtor converted personal property of the decedent’s estate and determinized the amount of the debt (i.e., the monetary value of the converted items and Plaintiff’s legal and expert fees from the probate matter).

In a prior ruling, this court granted the Plaintiff’s motion for summary judgment in part, holding that based on collateral estoppel grounds, (1) the Debtor caused an “injury” for purposes of § 523(a)(6) and (2) the probate court’s findings about the amount of the debt precluded re-litigation of those issues; however, the court denied the motion in part, finding that a trial was necessary to determine whether the Debtor acted willfully and maliciously under § 523(a)(6) when she failed to return the items at issue.

At trial, both parties testified that the Plaintiff’s son was an artist who was living with the Defendant-Debtor in the Plaintiff’s home when he died; upon his passing, the Plaintiff asked the Defendant-Debtor to move out so she could sell the residence, which made the Debtor angry.  Two days after asking the Defendant-Debtor to move out, the Plaintiff testified that she discovered that artwork her son had made, among other items, were gone.  The Defendant-Debtor admitted taking the items and testified that she sought help from Facebook friends to remove the items and did not keep records of which items were taken or where they were stored.  The Plaintiff testified that the Defendant-Debtor returned some of the items but held on to the “important” ones (the artwork), and that the Plaintiff explained how important the missing artwork was to her.  Both parties testified that, after the Plaintiff instituted a Citation to discover assets proceeding for conversion of personal property in probate court, the probate court issued multiple court orders finding that, inter alia, the items in dispute belonged to the Plaintiff and ordering the Defendant-Debtor to return them. 

Based on the Plaintiff’s testimony showing the Defendant-Debtor’s anger she expressed when told to vacate the premise and that the Defendant-Debtor held onto the important items despite knowing how important they were to the Plaintiff, the Defendant-Debtor’s disobedience of multiple court orders requiring her to return the missing artwork, and the Defendant-Debtor’s testimony that she took the items to feel closer to the decedent, the court found her conversion of the items constituted a non-dischargeable “willful and malicious injury” under § 523(a)(6).  The court found that she acted intentionally because she took the items belonging to the probate estate without legal justification and acted with a malicious intent, since she kept the important items despite her knowledge of their importance to the Plaintiff, putting her own comfort and interests above the Plaintiff’s.

Friday, August 11, 2023