Farmers Insurance Group v. Compos

768 F.2d 1155, 85 A.L.R. Fed. 635
CourtCourt of Appeals for the Tenth Circuit
DecidedJuly 18, 1985
DocketNo. 83-1872
StatusPublished
Cited by3 cases

This text of 768 F.2d 1155 (Farmers Insurance Group v. Compos) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farmers Insurance Group v. Compos, 768 F.2d 1155, 85 A.L.R. Fed. 635 (10th Cir. 1985).

Opinion

TIMBERS, Circuit Judge.

Farmers Insurance Group, Vicki Herrera, and Joseph Herrera, Jr. (appellants) commenced this action pursuant to the Bankruptcy Reform Act of 1978 (the “Code”), 11 U.S.C. § 523 (1982), objecting to the discharge of the debt owed them by Rafael Amaro Compos (appellee). Appellants appeal from the judgment entered May 27, 1983 by the United States District Court for the District of Colorado, Patricia Ann Clark, Bankruptcy Judge, ordering that a discharge in favor of appellee be entered.

On appeal, appellants contend that the court erred in ordering that a discharge be entered since § 523(a)(6) of the Code provides that debts “for willful and malicious injury by the debtor to another entity or to the property of another entity” are nondischargeable. For the reasons stated below, we affirm.

I.

We shall summarize only those facts believed necessary to an understanding of our ruling on the sole issue raised on appeal.

On March 21, 1980, Mr. Compos left his place of employment at the Coors plant in Boulder, Colorado, around 2:45 p.m. He drove his supervisor to the supervisor’s home near Federal Boulevard and 51st Street in Denver. There he consumed several beers. Around 4:45 p.m., he left and drove south on Federal Boulevard, pulling into the left turn lane at Speer Boulevard. The Herreras (wife, husband, and daughter) were driving north on Federal Boulevard at the time. Mr. Compos testified that when he entered the intersection the left turn arrow was green, but that it turned amber shortly before he collided with the Herreras. Mr. Herrera testified that he also had a green light, and that Mr. Compos slowed down as he approached the intersection, then increased his speed, and collided with Mr. Herrera’s automobile. The accident occurred about 6:00 p.m. All parties were taken to a hospital.

As a result of the accident, Vicki Herrera sustained personal injuries and the Herrera automobile was damaged.

The investigating officer testified that Mr. Compos appeared intoxicated at the time of the accident. After Mr. Compos left the hospital, the officer administered a blood alcohol test to him which indicated that his blood alcohol content was .112 percent around 8:00 p.m. An expert witness testified that persons with this blood alcohol content are not capable of operating a motor vehicle safely since alcohol slows response time, and that they are roughly thirty to forty times more likely to have an accident than if they had not been drinking.

The bankruptcy court ordered a bifurcated trial, the first issue to be determined being the dischargeability of any indebtedness by Mr. Compos to the Herreras arising from the accident. The court found that Mr. Compos was driving while under the influence of alcohol. It held that his conduct constituted reckless disregard of the rights of others, but that appellants had failed to prove that Mr. Compos acted with the specific intent to injure that is [1157]*1157required under § 523(a)(6) of the Code in order to except a debt from discharge.

II.

The sole issue before us is whether appellants’ claim should be declared nondischargeable within the meaning of § 523(a)(6). Appellants contend (1) that the standard for dischargeability of debts under § 523(a)(6) is the “reckless disregard” standard applied by many courts under § 17(a)(8) of the Bankruptcy Act of 1898 (the “Act”), and (2) that, even if § 523(a)(6) requires proof of intentional conduct, to make appellee’s debt nondischargeable, appellants need prove only that appellee intentionally drove his vehicle while under the influence of alcohol, and not that he intended to injure a person or property.

A.

Section 523(a)(6) excepts from discharge, in language almost identical to that of § 17(a)(8) of the Act, debts incurred for “willful and malicious injury” to the person or property of another. Section 17(a)(8) has been interpreted by many courts to include injuries arising from a willful disregard of the known rights of others. Other courts have required proof of an intent to injure in order to hold a debt nondischargeable. In re Callaway, 41 B.R. 341, 343 (Bankr.E.D.Pa.1984); In re Morgan, 22 B.R. 38, 39 (Bankr.D.Neb.1982); In re Bryson, 3 B.R. 593, 596 (Bankr.N.D.Ill.1980). This inconsistency has arisen from the varying interpretations placed upon the language and holding of Tinker v. Colwell, 193 U.S. 473 (1904). While the Supreme Court in Tinker purported to address only the “malicious” component of § 17(a)(8), stating that the tort of criminal conversation was “willful, of course”, id. at 485, the opinion contains a passage that has been widely relied upon in holding that “willful and malicious” under § 17(a)(8) includes a “reckless disregard” standard:

“[W]e think a willful disregard of what one knows to be his duty, an act which is against good morals and wrongful in and of itself, and which necessarily causes injury and is done intentionally, may be said to be done willfully and maliciously, so as to come within the exception.” Id. at 487.

Since courts have not interpreted § 17(a)(8) of the Act consistently, it is appropriate to consider the legislative history of § 523(a)(6) of the Code to determine how Congress intended “willful and malicious” as used in that provision to be interpreted. The legislative history makes clear that the “reckless disregard” standard applied by some courts under § 17(a)(8) no longer applies under § 523(a)(6), and that proof of a “deliberate or intentional” injury is required to except a debt from discharge:

“Paragraph (6) excepts debts for willful and malicious injury by the debtor to another person or to the property of another person. Under this paragraph, “willful” means deliberate or intentional. To the extent that Tinker v. Colwell, 193 U.S. 473 (190[4]), held that a looser standard is intended, and to the extent that other cases have relied on Tinker to apply a “reckless disregard” standard, they are overruled.”

H.R.Rep. No. 595, 95th Cong., 1st Sess. 362-65 (1977), reprinted in 1978 U.S.Code Cong. & Ad.News 5963, 6320-21. The Senate report, S.Rep. No. 989, 95th Cong., 2d Sess. 79 (1978), reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5965, is the same as the House report except that it refers to willful and malicious conversions as well as injuries.

“In the legislative history accompanying the Bankruptcy Act of 1978, Congress made it unmistakable that only deliberate or intentional acts should be considered ‘willful,’ and that mere reckless disregard did not qualify.”

In re Kasler, 611 F.2d 308, 310 n. 7 (9th Cir.1979); see 3 Collier on Bankruptcy 11 523-16, at 523-132 to -133 (15th ed. 1979).

Bankruptcy courts generally have followed the Congressional intent evidenced by the legislative history. E.g., In re Cecchini, 37 B.R. 671, 674-75 (Bankr. 9th Cir.1984); In re Poore, 37 B.R. 246 (Bankr.D.N.M.1982); In re Kuepper, 36 B.R. 680 [1158]*1158(Bankr.E.D.Wis.1983); In re Hoppa, 31 B.R. 753 (Bankr.E.D.Wis.1983); In re Davis, 26 B.R. 580 (Bankr.D.R.I.1983);

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Smith v. Assevero (In Re Assevero)
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In Re Compos
768 F.2d 1155 (Tenth Circuit, 1985)

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768 F.2d 1155, 85 A.L.R. Fed. 635, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-insurance-group-v-compos-ca10-1985.