Walker v. Alama (In re Alama)

500 B.R. 887
CourtUnited States Bankruptcy Court, E.D. Tennessee
DecidedOctober 29, 2013
DocketBankruptcy No. 12-34569; Adversary No. 13-3026
StatusPublished
Cited by1 cases

This text of 500 B.R. 887 (Walker v. Alama (In re Alama)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walker v. Alama (In re Alama), 500 B.R. 887 (Tenn. 2013).

Opinion

[890]*890 MEMORANDUM

RICHARD STAIR, JR., Bankruptcy Judge.

This adversary proceeding is before the court upon the Adversary Complaint filed by the Plaintiffs on February 19, 2013, asking the court to determine that a Judgment in the amount of $773,442.83 entered against the Defendant on May 6, 2004, is nondischargeable under 11 U.S.C. § 523(a)(6) (2006). The trial was held on October 21, 2013. The record consists of ten exhibits introduced into evidence, ten exhibits stipulated into evidence, and the testimony of four witnesses, Michelle Ala-ma, the Plaintiffs, and the Defendant. Because the parties did not, as directed in the pretrial Order entered by the court on June 13, 2013, jointly pre-mark their trial exhibits, all exhibits submitted by the Plaintiffs are referred to with letters and those submitted by the Defendant are referred to with numbers.1

This is a core proceeding. 28 U.S.C. § 157(b)(2)(I) (2006).

I

On September 21,1992, while working in Antigua, the Plaintiff, John Walker, and the Defendant were involved in an automobile accident. On April 6, 1994, the Plaintiffs filed a complaint against the Defendant in the Circuit Court for Broward County, Florida, which was subsequently dismissed without prejudice for failure to prosecute on November 12,1997. See Trial Ex. A. The Plaintiffs filed a second lawsuit against the Defendant in Broward County on December 17, 1997, which was dismissed by an order entered on September 28, 1998, as amended on October 26, 1998. See Trial Ex. B. The Plaintiffs filed a third lawsuit against the Defendant on September 18, 1998, in Antigua. A trial was held in Antigua on October 27 and 28, 2003, and a judgment in the amount of $773,442.83 was entered against the Defendant on May 6, 2004 (Judgment). Trial Ex. C. The Plaintiffs recorded the Judgment in the Register of Deeds Office for Broward County, Florida, on March 8, 2005, and on July 27, 2006, filed a complaint in the Broward County, Florida, Circuit Court to domesticate the Judgment. On December 15, 2009, the Bro-ward County, Florida, Circuit Court entered an Order Granting Enforcement of Foreign Judgment recognizing the Judgment under the laws of the State of Florida and held that it was enforceable against the Defendant. Trial Ex. J.

On September 24, 2004, the Plaintiff and his non-debtor spouse, Michelle Alama, purchased investment real property located at 2466 Bryan Road, Sevierville, Tennessee (Bryan Road Property), which they subsequently sold for $139,402.37 on November 18, 2005, and split the proceeds equally between them. Trial Ex. 1; Trial Ex. 2. On November 3, 2005, Ms. Alama executed a Purchase & Sale Agreement for the purchase of residential real property located at 3228 Topside Drive, Kodak, Tennessee (Topside Drive Property), which she purchased on November 18, 2005, us[891]*891ing her portion of the proceeds received from the sale of the Bryan Road Property as the down payment. TRIAL Ex. 4; TRial Ex. 5; Trial Ex. 6. On December 20, 2005, Ms. Alama, for the purpose of making her daughter a co-owner of the Topside Drive Property, executed a Quit Claim Deed to herself and her daughter, Crystal Alama. Trial ex. 7. The Defendant joined in the execution of the Quit Claim Deed for the purpose of conveying any spousal interest he might have held in the Topside Drive Property to Ms. Alama and their daughter. Trial Ex. 7. Thereafter, the Alamas sold their residence at 4107 NW 15th Avenue, Oakland Park, Florida (Florida Property), on May 4, 2006, for $218,682.33. Trial Ex. 8; see also Trial Ex. H; Trial Ex. 9.

The Defendant filed his Chapter 7 bankruptcy case on November 12, 2012, and received a discharge of his debts on March 8, 2013. The Plaintiffs timely filed this adversary proceeding on February 18, 2013. As stated in the pretrial Order entered on June 13, 2013, the issue before the court is whether the Judgment is non-disehargeable under 11 U.S.C. § 523(a)(6).

II

Determination of nondischarge-ability is governed by subsection (6) of 11 U.S.C. § 523(a), which provides that “[a] discharge under section 727,[2] ... of this title does not discharge an individual debt- or from any debt — for willful and malicious injury by the debtor to another entity or to the property of another entity[.]” 11 U.S.C. § 523(a)(6). The burden of proving, by a preponderance of the evidence, each element necessary for a determination of nondischargeability is borne by the Plaintiffs, against whom the court construes § 523(a) strictly, while construing it liberally in favor of the Defendant. Grogan v. Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 661, 112 L.Ed.2d 755 (1991); Rembert v. AT & T Universal Card Servs., Inc. (In re Rembert), 141 F.3d 277, 281 (6th Cir.1998). In order to prevail under § 523(a)(6), the Plaintiffs must prove the existence of “a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury[,]” Kawaauhau v. Geiger, 523 U.S. 57, 61, 118 S.Ct. 974, 977, 140 L.Ed.2d 90 (1998), and that the Defendant desired to cause the consequences of his actions or believed with reasonable certainty that those consequences would occur. Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 464 (6th Cir.1999). “That a reasonable debtor ‘should have known’ that his conduct risked injury to others is simply insufficient. Instead, the debtor must “will or desire harm, or believe injury is substantially certain to occur as a result of his behavior.’ ” Guthrie v. Kokenge (In re Kokenge), 279 B.R. 541, 543 (Bankr.E.D.Tenn.2002) (quoting Markowitz, 190 F.3d at 465 n. 10). Additionally, “the injury must invade the creditor’s legal rights.” Steier v. Best (In re Best), 109 Fed.Appx. 1, 6 (6th Cir.2004). Accordingly, based upon Sixth Circuit authority, “unless the actor desires to cause consequences of his act, or ... believes that the consequences are substantially certain to result from it, he has not committed a ‘willful and malicious injury’ as defined under § 523(a)(6).” Markowitz, 190 F.3d at 464; Kokenge, 279 B.R. at 543 (citations omitted); Monsanto Co. v. Trantham (In re Trantham), 304 B.R. 298, 307 (16th Cir. BAP 2004) (“[T]he [892]*892bankruptcy courts in this circuit, in order to find a ‘willful’ injury under § 523(a)(6) must determine either that (i) the actor desired to cause the consequences of the act or (ii) the actor believed that the given consequences of his act were substantially certain to result from the act.”).

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Bluebook (online)
500 B.R. 887, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walker-v-alama-in-re-alama-tneb-2013.