In Re David Rock Hudson, Debtor. Gregory Stackhouse and Esther Stackhouse v. David Rock Hudson

859 F.2d 1418, 19 Collier Bankr. Cas. 2d 1185, 1988 U.S. App. LEXIS 14471, 18 Bankr. Ct. Dec. (CRR) 952, 1988 WL 112402
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 27, 1988
Docket87-3913
StatusPublished
Cited by50 cases

This text of 859 F.2d 1418 (In Re David Rock Hudson, Debtor. Gregory Stackhouse and Esther Stackhouse v. David Rock Hudson) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re David Rock Hudson, Debtor. Gregory Stackhouse and Esther Stackhouse v. David Rock Hudson, 859 F.2d 1418, 19 Collier Bankr. Cas. 2d 1185, 1988 U.S. App. LEXIS 14471, 18 Bankr. Ct. Dec. (CRR) 952, 1988 WL 112402 (9th Cir. 1988).

Opinions

FLETCHER, Circuit Judge:

Gregory and Esther Stackhouse appeal from the Ninth Circuit bankruptcy appellate panel (BAP) decision affirming the bankruptcy court’s grant of summary judg[1419]*1419ment in favor of David Rock Hudson (debt- or) holding that any judgment debt that might be entered in a pending suit for damages arising from drunk driving would be dischargeable. The dispositive issue on appeal is whether 11 U.S.C. § 523(a)(9), requires that a creditor obtain judgment for damages against a debtor prior to the debt- or’s filing for bankruptcy as a prerequisite to having declared nondischargeable a debt arising from damages caused by drunk driving. We hold that a prepetition judgment is not required, and reverse the decision of the BAP.

FACTS

The facts are not in dispute. On March 28, 1982, Gregory Stackhouse was seriously injured in an automobile-motorcycle collision with Hudson. Immediately after the collision, a Washington state trooper administered a breathalyzer test to Hudson. He was cited for and later convicted of driving while intoxicated.

Stackhouse and his wife filed suit against Hudson in state court for injuries sustained in the accident. On December 12, 1985, the day before trial was to begin, Hudson filed a Chapter 7 petition in bankruptcy. The state court action was stayed.

The United States Bankruptcy Court for the District of Western Washington set April 7, 1986 as the last day for filing complaints to determine dischargeability under § 523(c). On March 24, 1986, Hudson filed a complaint to determine the dis-chargeability under § 523(a)(9) of the Stackhouses’ state tort claim against him. The Stackhouses had until April 28, 1986, to respond. On April 24, 1986, the Stack-houses filed an answer to the complaint, with counterclaims against Hudson.1 The response was timely under § 523(a)(9), but was filed after the deadline for filing § 523(c) nondischargeability complaints.

On April 23, 1986, the bankruptcy judge granted a discharge to Hudson on the ground that no complaint objecting to discharge had been filed within the allowed time. Hudson then filed a motion for summary judgment on his complaint, based on the discharge already granted. Hudson also argued that the Stackhouses could not recover under § 523(a)(9) because they did not have a judgment or consent decree as required by the statute.

On September 9, 1986, the bankruptcy court ordered that judgment be entered in favor of Hudson. The court found the Stackhouses’ claim against Hudson dis-chargeable because 11 U.S.C. § 523(a)(9), by its literal terms, exempts from discharge only those drunk-driving claims that have been reduced to judgment before the filing of bankruptcy. The court further found that § 523(a)(6) was equally unavailing because the Stackhouses had not requested relief under that subsection pursuant to 11 U.S.C. § 523(c), and that even if such relief could be found in the counterclaim, it was untimely pursuant to Bankr. R. 4007(c).

The BAP affirmed the bankruptcy court’s decision. In re Hudson, 73 B.R. 649 (9th Cir. BAP 1987). The Stackhouses timely appeal to this court.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction over appeals from the BAP under 28 U.S.C. § 158(d). The BAP’s conclusions of law are subject to de novo review. In re American Mariner Ind., 734 F.2d 426, 429 (9th Cir.1984).

DISCUSSION

This is the first time a federal appeals court has been called upon to interpret the dischargeability provision of 11 U.S.C. § 523(a)(9). Our objective when interpreting a federal statute “is to ascertain the intent of Congress and to give effect to legislative will.” United States v. Taylor, 802 F.2d 1108, 1113 (9th Cir.1986), cert. denied, 479 U.S. 1094, 107 S.Ct. 1309, 94 L.Ed.2d 164 (1987). “The most persuasive evidence of ... [congressional] intent is the words selected by Congress.” Foxgord v. Hischemoeller, 820 F.2d 1030, 1032 (9th Cir.1987) (quoting Director, Office of [1420]*1420Workers’ Compensation Programs v. Forsyth Energy, Inc., 666 F.2d 1104, 1107 (7th Cir.1981)). We thus begin with the language of the statute itself, Blum v. Stenson, 465 U.S. 886, 896, 104 S.Ct. 1541, 1548, 79 L.Ed.2d 891 (1984); United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981), and “[a]bsent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980); see also INS v. Cardoza-Fonseca, 480 U.S. 421, 107 S.Ct. 1207, 1212-14, 94 L.Ed.2d 434 (1987).

A. Current Interpretation of 11 U.S.C. § 523(a)(9)

The language of § 523(a)(9) reads as follows:

A discharge under section 727,1141, or 1328(b) of this title does not discharge an individual debtor from any debt—
(9) to any entity, to the extent that such debt arises from a judgment or consent decree entered in a court of record against the debtor wherein liability was incurred by such debtor as a result of the debtor’s operation of a motor vehicle while legally intoxicated under the laws or regulations of any jurisdiction within the United States or its territories wherein such motor vehicle was operated and within which such liability was incurred[.]

11 U.S.C. § 523(a)(9) (Supp.1986) (emphasis added). Although the code section describes the subject debt as one which arises from a judgment or consent decree, the statute does not specifically address whether a claim must be reduced to judgment or consent decree before the debtor files for bankruptcy. This had encouraged debtor parties to argue that the statute requires reduction of the claim to judgment or consent decree prior to bankruptcy.

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859 F.2d 1418, 19 Collier Bankr. Cas. 2d 1185, 1988 U.S. App. LEXIS 14471, 18 Bankr. Ct. Dec. (CRR) 952, 1988 WL 112402, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-david-rock-hudson-debtor-gregory-stackhouse-and-esther-stackhouse-ca9-1988.