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copying themselves. As principals in the company, [debtors] could be held liable for infringement simply for failing to prevent copyright infringement. . . . [T]he jury in the District Court Action could have found that the [debtors] were liable for copyright infringement because they failed in their supervisory role, that their failure to supervise was reckless, and therefore that the infringement was willful. Such a scenario would dictate that the injury was not a 'willful injury' under S 523(a)(6), even though it was 'willful' for purposes of the copyright violation.").
J. Exceptions to dischargeability apply to individual debtors only
K. Individual debtor's fifth amendment privilege
L. Exceptions to discharge and community property
M. Exceptions to discharge and dischargeability are narrowly construed
Ghomeshi v. Sabban (In re Sabban), 384 B.R. 1 (B.A.P. 9th Cir. 2008) ("Because an exception to discharge impairs a debtor's fresh start, section 523(a)(2)(A) 'should not be read more broadly than necessary to effectuate policy, e.g., preventing debtors from avoiding debts incurred by fraud or other culpable conduct.' . . . 'The limits on the dischargeability of debts contained in section 523 should be construed strictly against creditors and in favor of debtors.'").
N. Jurisdiction, concurrent jurisdiction and abstention
O. Eleventh amendment immunity and sovereign immunity
P. Standing
Q. Settlement of discharge and dischargeability litigation
R. Effect of prebankruptcy settlement or novation
Lockerby v. Sierra, 535 F.3d 1038 (9th Cir. 2008 ) (Intentional breach of settlement agreement is not nondischargeable under S 523(a)(6) unless it is accompanied by conduct that constitutes a tort under state law. Attorney/debtor entered into out-of-court settlement of potential malpractice claim. Debtor then decided that client didn't have valid malpractice action and breached the settlement agreement. Client filed complaint under S 523(a)(6). Citing Gieger and Petralia v. Jercich (In re Jercich), 238 F.3d 1202 (9th Cir. 2001): "Something more than a knowing breach of contract is required before conduct comes within the ambit of S 523(a)(6), and Jercich defined that 'something more' as tortious conduct. . . . [C]onduct is not tortious under S 523(a)(6) simply because injury is intended or 'substantially likely to occur,' but rather is only tortious if it constitutes a tort under state law. . . . The conduct at issue here involves an 'ordinary debt,' and the conduct would not be tortious under Arizona law. . . . [T]here is no indication that lack of just cause alone renders a breach of contract tortious under the law of Arizona. . . . [P]arties often breach contracts simply because it is to their financial benefit. Such a reason may not be 'just,' but that does not render it tortious.").
Busseto Foods, Inc. v. Laizure (In re Laizure), 548 F.3d 693 (9th Cir. 2008) (Without reaching question whether claim for embezzlement was nondischargeable under S 523(a)(4), recipient of
©2009 Keith M. Lundin
