Upon the Plaintiff's Complaint to determine the dischargeability of a judgment under 11 U.S.C. § 523(a)(6) for willful and malicious injury, the Court held that the judgment is excepted from discharge pursuant to Section 523(a)(6). To be excepted from discharge under Section 523(a)(6), the debtor’s act has to be one in which the debtor intended to cause harm to the entity, or to a property interest of the entity, not just an intentional act where harm resulted. The Fourth Circuit has held that the equivalent of actual malice may be inferred from the circumstances; thus, malice may be implied from deliberate and intentional act done with "knowing disregard for the right of others." See In re McNallen, 62 F.3d 619, 626 (4th Cir. 1995). Therefore, because the debtor knew that the hospital had a valid lien on the tax refund, she acted willfully acted against the interest of the hospital when she received and spent her refund. Accordingly, the Court found that this intentional action was sufficient to deny discharge of the debt under Section 523(a)(6).
Friday, July 29, 2005