UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF VIRGINIA 

Richmond Division 

In Re: Michael Josef Basl, Case No. 17-32341-KLP 

Debtor. Chapter 7 

William Robert Moreno 

and Sharon Kay Moreno, 

Plaintiffs, 

v. Adv. Pro. No. 17-04495-KLP 

Michael Josef Basl, 

Defendant. 

MEMORANDUM OPINION 

Plaintiffs William Robert Moreno and Sharon Kay Moreno (the 

“Plaintiffs”) bring this action asserting that the debt owed to them by 

Defendant Michael Josef Basl (the “Defendant”), the debtor in this chapter 7 

case, is not dischargeable pursuant to § 523(a)(6) of the Bankruptcy Code, 11 

U.S.C. § 523(a)(6).1 Section 523(a)(6) excepts from a debtor’s discharge any 

debt “for willful and malicious injury by the debtor to another entity or to the 

property of another entity.” The Plaintiffs maintain that the elements of 

§ 523(a)(6) have been proven in litigation already concluded in the Circuit 

Court of Loudon County, Virginia, and that the doctrine of collateral estoppel 

requires this Court to find the Plaintiffs’ damages nondischargeable as a 

matter of law. In addition, the Plaintiffs ask the Court to find that any 

 

1 Unless otherwise noted, all statutory references are to sections of the United States 

Bankruptcy Code, 11 U.S.C. §§ 101-1532. 

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damages that may be awarded to them in their action for malicious 

prosecution currently pending in the Circuit Court of Henrico County, 

Virginia, are also nondischargeable pursuant to § 523(a)(6). 

The Court has reviewed the pleadings and considered the parties’ oral 

argument. For the reasons set forth in this Memorandum Opinion, the Court 

holds that the debt owed to the Plaintiffs by the Defendant based upon the 

Loudon County, Virginia, litigation is dischargeable and dismisses that 

portion of the complaint relative to the pending Henrico County, Virginia, 

litigation. 

Jurisdiction 

The Court has jurisdiction over this matter under 28 U.S.C §§ 157(a) 

and 1334(a) and the general order of reference entered by the U.S. District 

Court for the Eastern District of Virginia on August 15, 1984. This matter is 

a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). 

Factual and Procedural Background

The Defendant filed a voluntary petition for relief under chapter 7 of 

the Bankruptcy Code on May 5, 2017, and the Plaintiffs initiated this 

adversary proceeding by a complaint (the “Complaint”) filed on August 10, 

2017. The Plaintiffs allege that the Defendant is indebted to them in the 

amount of $1,415,282.08 (the “Debt”), awarded in connection with prior 

litigation between the parties in the Circuit Court of Loudon County, Virginia 

(the “Virginia Action”). In the Virginia Action, the Loudon County Circuit 

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Court (the “Virginia Court”) held a multi-day jury trial at which the 

Defendant represented himself. On October 27, 2016, at the conclusion of the 

trial, the Virginia Court entered, pursuant to the jury’s verdict, a final order 

(the “Order”) awarding the following damages: 

(1) for defamation per se, $75,000 to Plaintiff William Moreno for 

both presumed and actual damages; 

(2) for stalking, $100,000 to Plaintiff William Moreno for 

compensatory damages and $105,907.08 for costs and legal fees; 

(3) for intentional infliction of emotional distress, $200,000 to 

Plaintiff William Moreno for compensatory damages and $50,000 to 

Plaintiff Sharon Moreno for compensatory damages; 

(4) $625,000 to William Moreno in punitive damages; and 

(5) $200,000 to Sharon Moreno in punitive damages. 

The Plaintiffs argue that the Order establishes that the Debt is 

nondischargeable and that the doctrine of collateral estoppel precludes 

relitigation of that issue. They contend that the elements proven in the 

Virginia Action are identical to the elements necessary to establish 

nondischargeability under § 523(a)(6). 

The Defendant argues that collateral estoppel does not apply because 

the elements necessary to establish nondischargeability under § 523(a)(6) are 

different from the elements litigated in the Virginia Action. More 

specifically, he maintains that the elements of malice and willfulness, 

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requisites to a finding of nondischargeability under § 523(a)(6), were not 

litigated in the Virginia Action. In short, the Defendant contends that the 

Order does not preclusively establish the elements of § 523(a)(6). 

On February 13, 2017, this Court conducted a trial at which it heard 

the argument of the parties and received evidence. The only evidence 

admitted at the trial was the Order. At the conclusion of the trial, the Court 

gave both parties the opportunity to file further memoranda supporting their 

positions. In their memorandum,2 the Plaintiffs concede that the portions of 

the Debt representing the awards of damages for defamation per se and 

intentional infliction of emotional distress, as well as the related punitive 

damages, are dischargeable.3 However, they ask the Court to find the 

$205,907.08 awarded to Plaintiff William Moreno for stalking and 

$166,666.67 of the $625,000 punitive damages awarded to be 

nondischargeable.4

 

2 Pls.’ Proposed Findings of Facts & Conclusions of Law, ECF No. 20. 

3 Plaintiffs admit in their memorandum that “it is not possible to determine from the 

state court judgment (or the jury verdict form on which that judgment is based)” 

whether the jury found intentional or reckless behavior in finding the Defendant 

liable for intentional infliction of emotional distress and defamation per se. Id. at 2-

3, 6-7. Since only intentional behavior will satisfy the requirements of § 523(a)(6), 

the Plaintiffs admit that they have failed to meet their burden of proof with respect 

to those claims. Id.

4 The punitive damages sought by Plaintiff William Moreno are based upon the ratio 

of presumed and compensatory damages awarded by the Virginia Court for stalking 

to the $375,000 total amount of actual damages awarded in the Virginia Action. 

($100,000/$375,000=.2666). Applying this ratio to the $625,000 total punitive 

damages awarded in the Virginia Action results in $166,666.67, the reduced 

punitive damages now sought to be held nondischargeable in this adversary 

proceeding. Id. at 5-6. 

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Discussion 

Section 523(a)(6). A primary purpose of the Bankruptcy Code is to give 

honest debtors a fresh financial start. Local Loan Co. v. Hunt, 292 U.S. 234, 

244 (1934). In an effort to balance the benefits of allowing debtors to receive 

a fresh start with the right of creditors to collect the debts owed to them, the 

Bankruptcy Code specifies certain situations in which public policy demands 

that particular debts be nondischargeable. Beckett v. Bundick (In re 

Bundick), 303 B.R. 90, 104 (Bankr. E.D. Va. 2003).5 One of those situations 

is when a debt has been incurred as a result of the debtor’s bad acts. For 

example, it has long been the policy of bankruptcy courts that “perpetrators 

of fraud are not allowed to hide behind the skirts of the Bankruptcy Code.” 

Id. at 104 (quoting Foley & Lardner v. Biondo (In re Biondo), 180 F.3d 126, 

130 (4th Cir. 1999)).6 At issue in this case is § 523(a)(6), which excepts from 

discharge a debt that has been incurred as a result of a debtor’s willful and 

malicious actions. 

The Plaintiffs bear the burden of proving nondischargeability by a 

preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 291 (1991).7 

 

5 These exceptions to discharge are to be construed narrowly. Nunnery v. Nunnery 

(In re Rountree), 478 F.3d 215, 219 (4th Cir. 2007); La Bella Donna Skin Care, Inc. v. 

Harton (In re Harton), Adv. No. 13-03028-KRH, 2013 WL 5461832, at *3 (Bankr. 

E.D. Va. Oct. 1, 2013). 

6 Section 523(a)(4) provides that a debtor may not discharge debts incurred as a 

result of fraud. 

7 In Grogan v. Garner, the Supreme Court held that preponderance of evidence 

standard best reflects the intent of Congress in establishing the balance between the 

debtor’s interest in obtaining a fresh start and the creditor’s interest in obtaining 

full payment of a debt. 498 U.S. 279, 287 (1991). 

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The Fourth Circuit has held that the preponderance of the evidence standard 

has been met when a court “believe[s] that the existence of a fact is more 

probable than its nonexistence.” United States v. Manigan, 592 F.3d 621, 631 

(4th Cir. 2010) (quoting Concrete Pipe & Prods. of Cal., Inc. v. Constr. 

Laborers Pension Tr. for S. Cal., 508 U.S. 602, 622 (1993)). Chief Judge St. 

John has noted that 

“Preponderance of the evidence” has been defined as “evidence 

which, when weighed with that opposed to it, has more 

convincing force and is more probably true and accurate. [When] 

the evidence appears to be equally balanced, or if it cannot be 

said upon which side it weighs heavier, then plaintiff has not 

met his or her burden of proof.” 

Brickhouse v. Orts (In re Orts), Adv. No. 08-07075-SCS, 2009 WL 903259, at 

*11 (Bankr. E.D. Va. Feb. 24, 2009) (alterations in original) (quoting Smith v. 

United States, 726 F.2d 428, 430 (8th Cir. 1984)). 

To establish nondischargeability under § 523(a)(6) “a creditor must 

ultimately prove three elements: ‘(1) the debtor caused an injury; (2) the 

debtor’s actions were willful; and (3) that the debtor’s actions were 

malicious.’” Ocean Equity Grp., Inc. v. Wooten (In re Wooten), 423 B.R. 108, 

128 (Bankr. E.D. Va. 2010) (quoting E.L. Hamm & Assocs., Inc. v. Sparrow 

(In re Sparrow), 306 B.R. 812, 834 (Bankr. E.D. Va. 2003)). 

To establish the element of injury is a fairly straightforward inquiry, 

but determining the elements of willfulness and malice is less so. Addressing 

the element of willfulness, the Supreme Court in Kawaauhau v. Geiger, 523 

U.S. 57 (1998), held that the willfulness language of § 523(a)(6) encompasses 

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only acts done with actual intent to cause injury and not merely intentional 

acts that happen to cause an injury. 

The word “willful” in (a)(6) modifies the word “injury,” indicating 

that nondischargeability takes a deliberate or intentional injury, 

not merely a deliberate or intentional act that leads to injury. 

Had Congress meant to exempt debts resulting from 

unintentionally inflicted injuries, it might have described 

instead “willful acts that cause injury.” Or, Congress might have 

selected an additional word or words, i.e., “reckless” or 

“negligent,” to modify “injury.” Moreover, as the Eighth Circuit 

observed, the (a)(6) formulation triggers in the lawyer’s mind 

the category “intentional torts,” as distinguished from negligent 

or reckless torts. Intentional torts generally require that the 

actor intend “the consequences of an act,” not simply “the act 

itself.” 

Id. at 61-62 (emphasis in original) (citing Restatement (Second) of Torts § 8A 

cmt. a (1964)). For purposes of § 523(a)(6), “willfulness” is defined as an act 

taken with “substantial certainty [that] harm [would result] or a subjective 

motive to cause harm.” Parsons v. Parks (In re Parks), 91 F. App’x 817, 819 

(4th Cir. 2003) (alterations in original) (quoting Miller v. J.D. Abrams Inc. (In 

re Miller), 156 F.3d 598 (5th Cir. 1998)); Singh v. Sohail (In re Sohail), Adv. 

No. 08–03059–KRH, 2009 WL 1851247, at *7 (Bankr. E.D. Va. June 25, 

2009); see also In re Wooten, 423 B.R. at 129; Haas v. Trammell (In re 

Trammell), 388 B.R. 182, 187 (Bankr. E.D. Va. 2008) (confirming that this 

Court has previously adopted the “objective substantial certainty” or 

“subjective motive” test to satisfy the willfulness requirement); Lewis v. Long 

(In re Long), 504 B.R. 424, 425 (Bankr. W.D. Va. 2014). 

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The term “malice” may not mean the same thing in a 

nondischargeability action as it would in a non-bankruptcy context. Johnson 

v. Davis (In re Davis), 262 B.R. 663, 670 (Bankr. E.D. Va. 2001). For 

purposes of § 523(a)(6), a debtor acts with malice when “[the] debtor’s 

injurious act was done deliberately, intentionally and with knowing disregard 

for [the] plaintiff's rights.” Reed v. Owens (In re Owens), 449 B.R. 239, 255 

(Bankr. E.D. Va. 2011) (alterations in original) (quoting In re Davis, 262 B.R. 

at 670-71); see also First Nat’l Bk of Md. v. Stanley (In re Stanley), 66 F.3d 

664, 667 (4th Cir. 1995)). Malice may be demonstrated from the implications 

of the debtor’s behavior, “as well as a presentation of the surrounding 

circumstances.” In re Davis, 262 B.R. at 670-71. As such, a creditor need not 

prove actual ill will on the part of the debtor or any specific intent to injure 

the creditor. Id.

Collateral Estoppel. The doctrine of collateral estoppel, or “issue 

preclusion,” prohibits the relitigation of an issue of fact or law in a different 

action by a party when that party had “a full and fair opportunity to litigate 

the issue in the previous case.” Johnson v. Stemple (In re Stemple), 361 B.R. 

778, 795 (Bankr. E.D. Va. 2007). The doctrine of collateral estoppel applies in 

bankruptcy proceedings. Grogan v. Garner, 498 U.S. at 284 n.11; see also

Duncan v. Duncan (In re Duncan), 448 F.3d 725, 728 (4th Cir 2006) (“State 

court judgments can collaterally estop the litigation of issues in adversary 

proceedings in federal bankruptcy court.”). In Grogan, the Supreme Court 

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held that collateral estoppel may supply the basis for a finding of 

nondischargeability based on another court’s prior decision if the standard of 

proof in the prior case was preponderance of the evidence or another, higher 

standard of proof. 498 U.S. at 287. 

When determining whether a state court judgment may collaterally 

estop litigation in a bankruptcy court, the collateral estoppel law of the state 

issuing the judgment will apply. Duncan, 448 F.3d at 728. In this case, the 

underlying judgment was rendered by a Virginia court, so the Virginia law of 

collateral estoppel applies. In Virginia, the doctrine of collateral estoppel 

“precludes parties to a prior action and their privies from litigating in a 

subsequent action any factual issue that actually was litigated and was 

essential to a valid, final judgment in the prior action.” TransDulles Ctr. Inc. 

v. Sharma, 472 S.E.2d 274, 275 (Va. 1996) (quoting Angstadt v. Atl. Mut. Ins. 

Co., 457 S.E.2d 86, 87 (Va. 1995)). In TransDulles, the Virginia Supreme 

Court set forth the following parameters: 

For the doctrine to apply, the parties to the two proceedings, or 

their privies, must be the same; the factual issue sought to be 

litigated actually must have been litigated in the prior action 

and must have been essential to the prior judgment; and the 

prior action must have resulted in a valid, final judgment 

against the party sought to be precluded in the present action. 

Additionally, collateral estoppel in Virginia requires mutuality, 

that is, a party is generally prevented from invoking the 

preclusive force of a judgment unless that party would have 

been bound had the prior litigation of the issue reached the 

opposite result. 

Id. (internal citations omitted). 

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The Fourth Circuit has distilled the TransDulles test into five distinct 

elements. First, the prior action must have resulted in a valid and final 

judgment against the party in the present action. Second, the parties or 

privies in both proceedings must be the same. Third, there must be 

mutuality between the parties. Fourth, the factual issue litigated actually 

must have been litigated in the prior action. Fifth, the issue litigated must 

have been essential to prior judgment. Duncan, 448 F.3d at 728. 

In the present case, the first three elements are easily addressed. The 

Order, which is the final order of the Virginia Court, states, “the finality of 

this Order under Rule 1.1 is suspended until January 31, 2017. Without an 

intervening Order further suspending or vacating it, this Order becomes final 

on January 31, 2017.” The Court has been provided with no evidence to 

suggest that upon January 31, 2017, the Order did not become final. The 

parties do not dispute that the Order is a final order. Thus, the first element 

is satisfied. The second element is also satisfied, as the parties in each 

matter are the same.8

The mutuality element is also satisfied. Mutuality means that “a 

party is generally prevented from invoking the preclusive force of a judgment 

unless that party would have been bound had the prior litigation of the issue 

reached the opposite result.” TransDulles, 472 S.E.2d at 275 (citing Norfolk & 

W. Ry., v. Bailey Lumber Co., 272 S.E.2d 217, 218 (1980). This Court has 

 

8 Mr. Richard Moreno was also a party in the original action but is not a party, nor 

essential, to this adversary proceeding. 

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further held that if the parties to each action are the same, there is 

necessarily the requisite mutuality. In re Bundick, 303 B.R. at 102-03. The 

parties here are the same, and the Plaintiffs would have been bound had the 

Virginia Court made a contrary decision, so mutuality exists. 

The fourth element is whether “the factual issue sought to be litigated 

[was] litigated in the prior action.” TransDulles, 472 S.E.2d at 275. An issue 

is actually litigated and collateral estoppel applies if a party had a “‘full and 

fair opportunity’ to litigate that issue in the earlier case.” Allen v. McCurry, 

449 U.S. 90, 95 (1980). This element will be addressed in depth below. 

The fifth element is whether the precise factual inquiry at issue was 

essential to the prior judgment. However, because the issue of 

nondischargeability of a debt is exclusively a matter of federal law governed 

by the terms of the Bankruptcy Code, “[t]he issue of the dischargeability of a 

debt, therefore, may never be precisely at issue in a state court proceeding.” 

In re Bundick, 303 B.R. at 103.9 

Analysis. The task of the Court is to determine whether the fourth and 

fifth TransDulles elements have been satisfied, i.e., whether the issues 

necessary for a finding of nondischargeability were actually litigated in the 

Virginia Action and were essential to the judgment entered by the Virginia 

Court. To make such a determination, the Court must know what factual 

 

9 In applying collateral estoppel when the judgment sought to be held 

nondischargeable is based upon a jury verdict, the court’s “task is to glean the 

specific findings on which the jury based its verdict.” KYMN, Inc. v. Langeslag (In re 

Langeslag), 366 B.R. 51, 59 (Bankr. D. Minn. 2007). 

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determinations the jury in the Virginia Action made in reaching its verdict. 

The Court must then analyze whether the jury’s factual findings are 

sufficient to satisfy the requirements of § 523(a)(6). The Court’s task is 

complicated because it has no evidence before it other than the Order. The 

only way for the Court to ascertain what determinations the jury may have 

made is to analyze the requirements of the applicable Virginia law. 

Therefore, a closer look at the causes of action at issue in the Virginia Action 

is in order. 

 The Plaintiffs have abandoned their claims that the Defendant is 

collaterally estopped from asserting that the damages awarded in the 

Virginia Action for intentional infliction of emotional distress and defamation 

per se are nondischargeable under § 523(a)(6), and the Court need not 

address those claims further.10 They now seek only a finding of 

 

10 In analyzing the Plaintiffs’ claims of intentional infliction of emotional distress, 

the Court finds that the Plaintiffs have, as admitted, failed to satisfy the 

requirements of § 523(a)(6) because under Virginia law, intentional infliction of 

emotional distress requires, in part, a showing that the tortfeasor engaged in 

conduct that was either intentional or reckless. Almy v. Grisham, 639 S.E.2d 182, 

189 (Va. 2007) (“[A] claim for intentional infliction of severe emotional distress 

requires proof of severe emotional distress proximately caused by a defendant’s 

outrageous conduct that is intentional or reckless.”). Reckless behavior does not 

satisfy the willfulness requirement of § 523(a)(6). The Court has no evidence of 

whether the Virginia Court found intentional behavior or whether it found reckless 

behavior and therefore cannot find that the Plaintiffs have proven 

nondischargeability of the intentional infliction of emotional distress claims under 

§ 523(a)(6). 

 Similarly, under Virginia law, a plaintiff may recover for defamation if “the 

publication was false, and . . . the defendant either knew it to be false, or believing it 

to be true, lacked reasonable grounds for such belief, or acted negligently in failing 

to ascertain the facts on which the publication was based.” Gazette, Inc. v. Harris, 

325 S.E.2d 713, 725 (Va. 1985). Negligent behavior does not satisfy the willfulness 

requirement of § 523(a)(6), and the Court has no evidence of whether the Virginia 

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nondischargeability for the Virginia Court’s award of damages to Plaintiff 

William Moreno (the “Plaintiff”) for stalking and for an apportioned amount 

of the award of punitive damages.11 With respect to the civil claim of 

stalking, the Plaintiff argues that the Virginia Court’s judgment standing on 

its own satisfies § 523(a)(6)’s elements of willfulness and malice and therefore 

urges that the damages awarded on that cause be declared nondischargeable. 

The civil claim of stalking. Virginia law provides a victim with a civil 

cause of action against a person who has engaged in stalking as defined in 

the Virginia criminal statutes.12 The Virginia Supreme Court has explained 

that the Virginia stalking statute, Va. Code Ann. § 18.2-60.3,13 is composed of 

the following three elements: 

 

Court found intentional behavior or whether it found negligent behavior. Therefore, 

the Court cannot find that the Plaintiffs have proven nondischargeability of the 

defamation claim under § 523(a)(6). 

11 See supra note 4. 

12 Va. Code Ann. § 8.01-42.3 provides that: 

A victim has a civil cause of action against an individual who engaged 

in conduct that is prohibited under § 18.2-60.3, whether or not the 

individual has been charged or convicted for the alleged violation, for 

the compensatory damages incurred by the victim as a result of that 

conduct, in addition to the costs for bringing the action. If 

compensatory damages are awarded, a victim may also be awarded 

punitive damages. 

13 Va. Code Ann. § 18.2-60.3(A) provides that: 

Any person, except a law-enforcement officer, as defined in § 9.1-101, 

and acting in the performance of his official duties, and a registered 

private investigator, as defined in § 9.1-138, who is regulated in 

accordance with § 9.1-139 and acting in the course of his legitimate 

business, who on more than one occasion engages in conduct directed 

at another person with the intent to place, or when he knows or 

reasonably should know that the conduct places that other person in 

reasonable fear of death, criminal sexual assault, or bodily injury to 

that other person or to that other person’s family or household 

member is guilty of a Class 1 misdemeanor. If the person contacts or 

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(1) the defendant directed his . . . conduct toward the victim on 

at least two occasions; (2) the defendant intended to cause fear 

or knew or should have known that his . . . conduct would cause 

fear; and (3) the defendant’s conduct caused the victim “to 

experience reasonable fear of death, criminal sexual assault, or 

bodily injury.” 

Banks v. Commonwealth, 795 S.E.2d 908, 913 (Va. App. 2017) (quoting 

Stephens v. Rose, 762 S.E.2d 758, 761 (Va. 2014). 

The Plaintiff argues that the state judgment in his favor on his civil 

claim of stalking14 satisfies the willfulness and malice elements of 

§ 523(a)(6), and, applying the doctrine of collateral estoppel, that the 

$205,907.08 award should be declared nondischargeable. At issue is the 

second element of the Banks test.15 In the Plaintiff’s view, a state court 

judgment, based on jury findings that the Defendant engaged in stalking, 

necessarily means the jury found either 1) the Defendant intended his 

proscribed conduct to place the Plaintiff in fear, or 2) the Defendant’s conduct 

was substantially certain to place the Plaintiff in fear because the Defendant 

“knew or should have known his conduct would have that effect.” 

Furthermore, the Plaintiff argues that although the Virginia Court judgment 

 

follows or attempts to contact or follow the person at whom the 

conduct is directed after being given actual notice that the person does 

not want to be contacted or followed, such actions shall be prima facie 

evidence that the person intended to place that other person, or 

reasonably should have known that the other person was placed, in 

reasonable fear of death, criminal sexual assault, or bodily injury to 

himself or a family or household member. 

14 All subsequent references to stalking are to the civil claim for stalking. 

15 The Defendant does not contest that there was an injury to the Plaintiff but rather 

disputes that the injury was willful and malicious. 

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itself is silent as to whether the jury found specific intent, no showing of 

specific ill will is required to satisfy § 523(a)(6). 

By finding that the Defendant was liable for stalking, the jury 

necessarily found that all three elements of the stalking test had been 

satisfied, including the second element – that the Defendant intended to 

cause fear or knew or should have known that he would cause fear. The 

parties dispute whether § 523(a)(6)’s requirements of willfulness and malice 

are satisfied by a jury verdict that the Defendant “intended to cause fear or 

knew or should have known that his conduct would cause fear.” 

The Court finds that the willfulness element of § 523(a)(6) has been 

satisfied by the Virginia Court’s determination that Defendant committed 

stalking. The second Banks element, that the defendant intended to cause 

fear or should have known that his conduct would cause fear, mirrors the 

willfulness standard set forth in Geiger and its Fourth Circuit progeny. The 

jury’s verdict of stalking establishes that the jury must have found that 

Defendant intended to cause fear or should have known that his conduct 

would cause fear. That finding satisfies the similar Geiger willfulness 

requirement that the Defendant acted with substantial certainty that harm 

would result or with a subjective motive to cause harm. Therefore, the 

willfulness element of § 523(a)(6) is satisfied by the Virginia Court’s 

judgment. 

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Despite there being sufficient proof that the Defendant acted willfully, 

the Virginia Court judgment does not in and of itself satisfy the malice 

element of § 523(a)(6).16 Conduct is malicious under § 523(a)(6) only if it is 

deliberate, intentional, and with knowing disregard for the plaintiff’s rights. 

See In re Owens, 449 B.R. at 255 (quoting In re Davis, 262 B.R. at 670-71). 

Under Va. Code Ann. § 18.2-60.3, a defendant may be held liable for stalking 

not only if he intended to cause his victim to be in reasonable fear of “death, 

criminal sexual assault, or bodily injury” but also if he reasonably should 

have known that his conduct would have that effect.17 Section 18.2-60.3 

includes conduct that may not have been deliberate or intentional and thus 

does not, without more, satisfy the § 523(a)(6) malice standard. In finding 

 

16 In Bodge v. Pettingill (In re Pettingill), Adv. No. 04-90427, 2005 WL 6482742 

(Bankr. S.D. Cal. June 30, 2005), the bankruptcy court found that a debtor’s stalking 

conviction satisfied the requirements of § 523(a)(6). However, the Virginia and 

California statutes differ significantly, in that the applicable California statute 

allowed for liability only if the wrongful behavior was done “willfully and 

maliciously . . . with intent to place that person in reasonable fear . . . .” 

17 The history of the Virginia civil stalking statute is instructive. As explained by 

the Virginia Court of Appeals: 

In 2001, however, the Virginia General Assembly amended Code 

§ 18.2–60.3(A), expanding the statute to include conduct that the 

accused “reasonably should know” would create such a fear, and 

thereby adding “constructive knowledge” to the mens rea requirement 

of stalking. This statutory amendment “change[d] the proof of 

knowledge of the defendant,” House Bill 2112, Summary as Passed 

(2001), and “remove[d] the barriers to prosecution by specifying that it 

is not necessary to prove the offender’s intent to carry out a 

threat . . . .” Virginia Criminal Sentencing Commission, Impact 

Analysis on Proposed Legislation for House Bill 2112 (2001). 

Frazier v. Commonwealth, No. 0725-26-2, 2007 WL 2174905, at *2 (Va. App. July 31, 

2007) (internal citations omitted). In Frazier, the court convicted the defendant 

because he knew or should have known that his actions would cause fear in the 

victim. See also Stephens v. Rose, 762 S.E.2d 758, 761-62 (Va. 2014) (if all other 

elements are satisfied, a defendant may be guilty of stalking if he knew or should 

have known that his actions would cause reasonable fear). 

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the Defendant liable for stalking, the Virginia jury could have found that the 

Defendant should have known that he would cause harm but not that he 

acted deliberately and intentionally. Because this Court does not have any 

evidence of the specific findings the jury made, it cannot conclude that the 

issues litigated in the Virginia Court were the same as those required to 

establish malice under § 523(a)(6). 

The Plaintiff also argues that the absence of a finding of specific intent 

in the Order does not preclude a finding of nondischargeability because a 

showing of specific intent or ill will is not required to satisfy § 523(a)(6). 

Although the Fourth Circuit has held that § 523(a)(6) does not require a 

showing of specific intent,18 a party seeking a finding of nondischargeability 

under § 523(a)(6) must still establish malice sufficient to satisfy the statute. 

Malice may be inferred from the surrounding circumstances or demonstrated 

from the implications of the debtor’s behavior. See id. (quoting In re Davis, 

 

18 As more fully explained by former Chief Judge Tice of this Court: 

Malice does not mean the same thing for nondischargeability purposes 

under § 523(a)(6) as it does in contexts outside of bankruptcy. In 

bankruptcy, debtor may act with malice without bearing any 

subjective ill will toward plaintiff creditor or any specific intent to 

injure same. The Fourth Circuit defines malice as an act causing 

injury without just cause or excuse. 

Debtor’s subjective mind set is central to the inquiry as to 

whether debtor acted deliberately in knowing disregard of a creditor’s 

rights in property. In fact, a plaintiff creditor can even establish 

malice on an implied basis from a showing of debtor's behavior, as well 

as a presentation of the surrounding circumstances. What is required 

is that plaintiff prove that debtor’s injurious act was done deliberately, 

intentionally and with knowing disregard for plaintiff's rights. 

Johnson v. Davis (In re Davis), 262 B.R. 663, 640 (Bankr. E.D. Va. 2001) 

(internal citations omitted); see also Ocean Equity Grp., Inc. v. Wooten (In re 

Wooten), 423 B.R. 108, 130 (Bankr. E.D. Va. 2010). 

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262 B.R. at 670). The Court cannot make an inference based on the 

surrounding circumstances in this case because the Court has no evidence of 

the surrounding circumstances, having before it only the Order. Similarly, 

the Court has no evidence before it of the Defendant’s behavior other than 

the Order itself. 

Nor can the Court infer the element of malice based solely on the 

nature of the wrongful act at issue, in this case stalking. In Lewis v. Long (In 

re Long), 504 B.R. 424, 436 (Bankr. W.D. Va. 2014), the bankruptcy court 

found that damages awarded to the plaintiff, a victim of statutory rape, were 

dischargeable and that the doctrine of collateral estoppel was inapplicable 

based upon the evidence before the court. The only evidence presented by the 

plaintiff was the state court complaint, the state court default judgment, and 

a settlement note. In a subsequent clarifying opinion, the court held that 

“when the underlying cause of action does not necessitate a finding of intent 

to injure, the Court does not believe it is able to imply such intent . . . .” 

Lewis v. Long (In re Long), 528 B.R. 655, 661 (Bankr. W.D. Va. 2015). It 

noted that the state court had not found that the debtor had acted willfully or 

intentionally and held that the court is not permitted to infer these elements 

based on the nature of the wrongful act alone. Id. at 661. In affirming the 

bankruptcy court’s decision, the district court found that the issues litigated 

in the criminal conviction were not the same as those before the bankruptcy 

court and the doctrine of collateral estoppel did not apply: 

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A conviction for carnal knowledge of a minor, in violation of 

Virginia Code § 18.2–63, does not require proof of any specific 

intent, much less an intent to injure. Therefore, Long’s pleas of 

guilty to violating the statute did not involve an identical issue 

to the controlling issue here, and have no preclusive effect under 

the doctrine of collateral estoppel. 

Lewis v. Long, 521 B.R. 745, 749 (W.D. Va. 2014) (citing Va. Code Ann. 

§ 18.2-63(a)). 

In this case, as in Lewis v. Long, the underlying statute at issue, here 

the Virginia stalking statute, does not require a finding that the Defendant’s 

actions were both willful and malicious. The Court cannot infer the element 

of malice. Thus, this Court finds that the judgment from the Virginia Court 

as set forth in the Order is an insufficient basis upon which to find that the 

Defendant’s actions were both willful and malicious, and the Plaintiff has 

provided the Court no other evidence from which to make such a finding. The 

fourth element of the TransDulles test has not been satisfied, as the Court 

cannot find that the issues litigated in the Virginia Court were necessarily 

the same as those required by § 523(a)(6).19 Accordingly, the doctrine of 

collateral estoppel does not apply. The Plaintiff, who relied solely on the 

Order and the doctrine of collateral estoppel, has not carried his burden of 

proving that the portion of the Debt representing damages for stalking 

satisfies the requirements of § 523(a)(6), and the debt is therefore 

dischargeable. 

 

19 Having found that the issues litigated in the Virginia Action were not necessarily 

the same as those required by § 523(a)(6), the Court need not address the fifth 

element of the TransDulles test, whether determination of an issue was essential to 

the Virginia Court’s ruling. 

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Punitive damages. The Plaintiff also seeks to have the punitive 

damages awarded in connection with the stalking award held 

nondischargeable. Under Virginia law, punitive damages “may be recovered 

‘only where there is misconduct, actual malice, or such recklessness or 

negligence as to evince a conscious disregard of the rights of others’” 

Hamilton Dev. Co v. Broad Rock Club, 445 S.E.2d 140, 143 (Va. 1994) 

(quoting Giant of Va., Inc. v. Pigg, 152 S.E.2d 271, 277 (Va. 1967)); see also In 

re Sparrow, 306 B.R.at 844.20 Under this standard, punitive damages may be 

awarded in Virginia for reckless behavior as well as for intentional behavior. 

As reckless behavior does not satisfy the intent requirement of § 523(a)(6), 

the Court would normally look to the Virginia Court’s findings to determine 

whether the award of punitive damages was based upon intentional conduct 

or upon reckless conduct. However, as the Court is in possession of no such 

findings, it has no basis upon which to conclude that the Virginia Court found 

intentional behavior that would satisfy the requirements of § 523(a)(6). The 

 

20 In E.L. Hamm Assocs., Inc. v. Sparrow (In re Sparrow), 306 B.R. 812 (Bankr. E.D. 

Va. 2003), Chief Judge St. John explained that: 

Virginia caselaw makes it plain that an award of punitive damages is 

warranted by malicious conduct or negligence which is willful or 

wanton as to evince a conscious disregard of the rights of others. 

Furthermore, in Virginia proof of actual malice is not required to 

support a recovery of punitive damages. Thus, while the finding by 

[the Virginia court] of “a conscious disregard for the plaintiff's rights” 

provides ample justification for an award of punitive damages against 

the Sparrows, it does not, under Virginia law, compel the conclusion 

the acts of the Sparrows were willful, as required by § 523(a)(6). The 

punitive damages could have been awarded by [the Virginia court] for 

gross negligence or recklessness, neither of which are sufficient under 

Geiger. 

306 B.R. at 844-45 (citing Booth v. Robertson, 374 S.E.2d 1, 3 (Va. 1988); 

Avocet Dev. Corp. v. The McLean Bank, 364 S.E.2d 757, 762 (Va. 1988)). 

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Order, standing alone, is not sufficient evidence of the requisite intent. The 

Plaintiff has thus failed to prove that punitive damages were awarded based 

on a willful and malicious injury, and the Court is unable to conclude that the 

award for punitive damages is nondischargeable under § 523(a)(6). 

The pending Henrico County, Virginia, litigation. In Count II of the 

Complaint, the Plaintiff asks the Court to find that any award of damages 

made in his pending Henrico County, Virginia, action alleging malicious 

prosecution (the “Henrico Action”) be declared nondischargeable pursuant to 

§ 523(a)(6). This argument fails because of the total lack of support for the 

relief requested by the Plaintiff. No evidence whatsoever has been proffered 

to the Court relative to the Henrico Action. The Court is not in possession of 

the complaint filed in the Henrico Action and has only the argument of 

counsel as to the character of that action. As discussed above, to succeed 

under § 523(a)(6), the Plaintiff must prove by a preponderance of the 

evidence that he was injured by the Defendant’s willful and malicious 

actions. As there is no evidence before the Court as to any of those elements, 

the Court cannot grant the relief requested. 

In addition, the Plaintiff has not moved for relief from the automatic 

stay of § 362(a) to proceed with the Henrico Action. Section 362(a)(1) 

provides that the filing of a bankruptcy petition operates as a stay of “the 

commencement or continuation . . . of a judicial, administrative, or other 

action . . . against the debtor that was or could have been commenced before 

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the commencement of the case . . . .” In order to proceed with the Henrico 

Action, the Plaintiff must request relief from the automatic stay. Section 

362(d) provides that the Court may grant such relief for cause. The Plaintiff 

has not established cause for relief, and at trial, counsel for the Plaintiff 

admitted that he had not sought relief from the automatic stay. Thus, at this 

juncture, the Plaintiff is barred from proceeding in the Henrico Action.21 

Accordingly, the claim for malicious prosecution pending in the Henrico 

Action is dischargeable. 

Conclusion 

The Court finds, based upon the analysis above and upon the 

Plaintiffs’ concessions,22 that the Plaintiffs have not proven their claims that 

the portions of the Debt based upon intentional infliction of emotional 

distress and defamation per se are nondischargeable pursuant to § 523(a)(6). 

The Court further finds that the portion of the Debt representing damages for 

stalking and the punitive damages associated therewith is dischargeable, as 

the Plaintiffs have failed to prove by a preponderance of the evidence that the 

 

21 Further, this Court may not render an advisory opinion. Because he has 

submitted no evidence as to the Henrico Action, the Plaintiff is essentially asking 

the Court to declare that if he were to succeed in obtaining a judgment against the 

Defendant for malicious prosecution, that judgment would be nondischargeable 

pursuant to § 523(a)(6). This runs afoul of Article III, § 2 of the United States 

Constitution, which requires that “litigation be based on a ‘real and substantial 

controversy admitting of specific relief though [sic] a decree of a conclusive

character, as distinguished from an opinion advising what the law would be upon a 

hypothetical state of facts.’” Dalkon Shield Claimants Trust v. Lee (In re A.H. Robins 

Co.), 211 B.R. 194 (E.D. Va. 1997) (emphasis in original) (quoting Aetna Life Ins. Co 

v. Haworth, 300 U.S. 227 (1937)). 

22 See supra note 10 and accompanying text. 

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injuries caused by the Defendant were willful and malicious within the 

meaning of § 523(a)(6). Finally, the Court declines to rule upon whether any 

award of damages in the Henrico Action would be nondischargeable pursuant 

to § 523(a)(6), and Count II of the Complaint will be dismissed. A separate 

order shall enter. 

Signed: April 18, 2018 /s/ Keith L. Phillips 

 United States Bankruptcy Judge 

Copies: 

Phillip B. Leiser 

The Leiser Law Firm, PLLC 

1749 Old Meadow Road, Suite 630 

Tysons Corner, VA 22102 

Michael Josef Basl 

8106 Strath Rd. 

Henrico, VA 23231 

Entered on Docket: April 18, 2018

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