The bankruptcy court ruled as follows:

On a very narrow ground, I am going to find for the defendant. The debt
is dischargeable. In [Kawaauhau v. Geiger, 523 U.S. 57, 64 (1998),3].. . the
Supreme Court dealt definitively with Section 523(a)(6) and said that section
requires a “deliberate and intentional injury.” It goes on to say that Congress
might have selected an additional word or words, such as reckless, and then it
80es on to say, . . . that reckless acts . . . do not suffice to establish that a resulting
injury is willful and malicious.

I think it’s pretty clear that the Supreme Court limited nondischargeability
to cases in which the debtor had a specific intent to cause the injury, not merely
where the debtor was reckless and that recklessness caused an injury. Another
[sic] in Geiger also refers to, for example, drunk drivers who are obviously quite
reckless when they cause injuries but would not fall within that provision.

In this case the plaintiff is relying on the [doctrine] of collateral estoppel
which does, in fact, apply here. But the complaint in the case applies in
paragraph five that the false accusations were made with the intention of causing
or with reckless disregard for the probability of causing emotional distress. In the
affidavit filed by Mr. Fielding in paragraph two he says that the defendant has
deliberately, wrongfully, recklessly and maliciously accused plaintiff. And in
paragraph five that the aforesaid false accusations were made with the intention
of causing or with reckless disregard for the probability of causing emotional
distress.

In this case it’s apparent that it’s possible to construe the defendant’s
conduct as not intending to cause injury, although it’s also possible to construe it
as intending to cause injury. But the point here is what you [(Lavender)] did and
what was established in the state court that you did, which was to make false

3In Geiger, the Court affirmed an Eighth Circuit opinion holding that a malpractice judgment
against a physician could be discharged because “debts arising from recklessly or negligently inflicted
injuries do not fall within the compass of § 523(a)(6).” 523 U.S. at 64. Inso holding, the Court plainly
rejected the argument that an intentional act causing injury is a willful injury when it stated:

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.” Restatement (Second) of Torts §§
8A, Comment a, p. 15 (1964) (emphasis added).

dd. at 61-62 (emphases in original),



Under Mlinois law, the elements of a claim for intentional infliction of emotional

distress are (1) the defendant’s conduct was extreme and outrageous, (2) the

defendant intended to inflict severe emotional distress or knew that there was at

least a high probability that his conduct would inflict severe emotional distress,

and (3) the defendant’s conduct did in fact cause severe emotional distress.

Harriston v. Chicago Tribune Co., 992 F.2d 697, 702 (7" Cir. 1993), quoting

McGrath v. Fahey, 126 Il, 2d 78, 86 (1998).
U.S. ex rel. Cericola v. Ben Franklin Bank, 99 C 6311, 2003 WL 174202, at *4 (N.D. Ii. Jan.
27, 2003) (emphasis added). Element (2) can be established with proof of either intentional or
reckless conduct. Vance v. Chandler, 231 I. App. 3d 747, 752, 597 N.E. 2d 233, 237 (3d Dist.
1992), Thus, the judgment vef non did not satisfy the Fieldings’ burden of proof under §
523(a)(6).

The Fieldings further argue that by virtue of the default, Lavender admitted in paragraph
2 of the complaint that she “falsely, deliberately, wrongfully, recklessly and maliciously
accused” Dennis of sexually assaulting and abusing Whitney. (Appellants’ Br. on Appeal at 4.)
(Emphasis added), Because a default admits every material allegation of the complaint save
damages, e.g., Straus v. Biesen, 242 Ill. App. 370 (1* Dist. 1926), they argue that deliberateness
is established.

This argument, however, misapprehends the scope of collateral estoppel. Lavender’s
admission in the state court is binding on her here only if, inter alia, the issue sought to be
precluded (i.e., that Lavender’s conduct was deliberate and intentional) was necessary to that

judgment. The bankruptcy court determined that it was not because, as explained above, the

state court could have rested on recklessness alone to support the judgment. Thus, the third

4although the Fieldings incorrectly assert that the bankruptcy court found that Lavender’s acts
were reckless, not willful and malicious (Appellants’ Br. on Appeal at 5), they are correct in pointing out
that the bankruptcy judge did not acknowledge this admission in paragraph two of the complaint. The
bankruptcy court did rely on the same language in the joint affidavit, however, so the record is clear that the
bankruptcy court knew of it, and it was at least an uncontroverted fact.

7


damages was held with all parties present.' The state court judge awarded $70,187.50 in
damages to the Fieldings. Thereafter, the Fieldings began proceedings to collect the judgment.

On May 24, 2001, Lavender petitioned in bankruptcy under chapter 7 of the Bankruptcy
Code, 11 U.S.C. §§ 701 et seg. (Bankr. Case No. 01 B 18846), through which she sought to
discharge her debt to the Fieldings. On or about June 25, 2001, the Fieldings filed the adversary
complaint now on appeal asserting that the debt was not dischargeable because it arose from a
“willful and malicious injury to another” within 11 U.S.C. § 523(a)(6). On January 8, 2002,
after a bench trial, the bankruptcy court determined that Lavender’s debt to the Fieldings was
dischargeable and dismissed the Fieldings’ complaint.

The Fieldings rested on the default judgment which had been entered against Lavender
for an intentional tort as a basis for application of the doctrine of collateral estoppel” to the case.
Grogan v. Garner, 498 U.S. 279, 284-85 n.11 (1991); Meyer v. Rigdon, 36 F.3d 1375, 1378-79
(7" Cir. 1994) (“[TJhe doctrine of collateral estoppel applies in bankruptcy discharge exception
proceedings.”). To determine whether the elements of proof for collateral estoppel had been
met, the bankruptcy court relied on the state court record offered by the Fieldings, specifically,
the complaint and joint affidavit which had apparently been accepted at the prove-up hearing as

proof of the Fieldings’ claims and their damages.

‘From this record evidence, the court infers that the order of July 11, 2000 was, in federal
parlance, an entry of default, see Fed. R. Civ. P. 55(b)(2), and that the Fieldings were expected to prove up
both their claims and their damages at the prove-up hearing.

Although Lavender represents that she appealed the judgment (but that it was untimely), the record
before this court does not show that there was an appeal.

?Collateral estoppel refers to “the effect of a judgment in foreclosing litigation in a subsequent
action of an issue of Jaw or fact that has been actually litigated and decided in the initial action.” Meyer v.
Rigdon, 36 F.3d 1375, 1378 n.1 (7" Cir. 1994).


accusations, is also consistent with a reckless disregard for the consequences of
that act as alleged in the complaint.

She [(Lavender)] was either reckless or she was intentional, but the

problem is I can’t tell which. And the state court entered a simple default

judgment and made no finding as to which and, frankly, under those

circumstances there would have been no reason for the state court to have made a

finding as to whether the defendant was either reckless or acted intentionally

because either way the result would have been the same. So collateral estoppel

simply isn’t adequate in this case. And because I can’t determine that the injury

was caused intentionally, I have to find in favor of the defendant. So there will be

a judgment dismissing the complaint.
(Bankr. Case No. 01 A 665, Tr. of Proceedings before the Honorable Ronald Barliant, U.S.
Bankruptcy Judge, at 19-21 (Jan. 8, 2002).) On or about February 1, 2002, the Fieldings filed a
timely notice of appeal under Fed. R. Bankr. P. 8001-02. This appeal is now fully briefed.

DISCUSSION

At the bankruptcy trial, the Fieldings, as creditors, had the burden to prove by a
preponderance of the evidence that Lavender’s debt was nondischargeable, Grogan v. Garner,
498 U.S. 279, 291 (1991); Matter of Thirtyacre, 36 F.3d 697, 700 (7" Cir. 1994). For collateral
estoppel to apply, the Fieldings were obligated to demonstrate that “(1) the issue sought to be
precluded is the same as that involved in a prior action; (2) the issue was actually litigated; (3)
the determination of the issue was essential to the final judgment; and (4) the party against
whom estoppel is invoked was represented in the prior action.” Adair v. Sherman, 230 F.3d 890,
893 (7° Cir. 2000). Whether this proof was met was a question of law for the bankruptcy court
and of de novo review on appeal.

The Fieldings contend that the bankruptcy court erred when it determined that the state

court default judgment for intentional infliction of emotional distress was not excepted from

discharge under 11 U.S.C. § 523(a)(6). The primary thrust of the Fieldings’ argument is that a


element of collateral estoppel was not met. The bankruptcy court’s determination was correct as
a matter of law.

Because the Fieldings make no argument here, nor does the record on appeal suggest that
they argued in the bankruptcy court, that if collateral estoppel did not preclude Lavender from
relitigating the issue of whether her conduct was willful and malicious within § 523(a)(6), they
were entitled to make their proof in the bankruptcy court. Accordingly, the district court finds
any such argument waived and affirms the judgment of the bankruptcy court.

ORDER
Wherefore, for the reasons set forth above, the judgment of the bankruptcy court is

affirmed.

ENTER:

JOAN HUMP! YY LEFKOW
Dated: February 28, 2003 United States District Judge


Minute Order Form (06/97)

— United States District Court, Northern District of Illinois
Name of Anion Sige Joan H. Lefkow | Siting ndge if Other
CASE NUMBER 02C 991 DATE 2/28/2003
CASE Fielding, et al. vs. Lavender
TITLE

{nthe following box (a indicate the party filing the motion, eg, plaintif, defendant, 3rd party paint, and (o) tae briefly henature
of the motion being presented.]

MOTION:

DOCKET ENTRY:

(1) oO Filed motion of [ use listing in “Motion” box above.]

(2) o Brief in support of motion due

(3) qo Answer brief to motion due . Reply to answer brief due.

(4) Oo Ruling/Hearingon__—_ssetfor___—_att

6) a Status hearing[held/continued to] [set for/re-set for]on____setfor___at

(6) oO Pretrial conference[held/continued to} [set for/re-set for]on__—setfor__—sat_—
(7) Qo Trial[set for/re-set for]on___at

(8) Oo [Bench/Jury trial] [Hearing] held/continued to____aat.

(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

CUFRCP4(m) Cl Local Rule 41.1 COFRCP4I(a)(1) Oi FRCP41(a)(2).

ao [Other docket entry] Enter Memorandum Opinion and Order. Judgment of the Bankruptcy Court
is affirmed. Elizabeth Lavender’s motion to proceed in forma pauperis is denied as moot. Elizabeth
Lavender’s motion for appointment of counsel is denied as moot. Case is terminated.

(a1) [For further detail see order attached to the original minute order.]

No notices required, advised in open court,
3
No notices required. ‘umber of notices
a | Notices mailed by judge's staff. A One
MAR 08 2:05
Notified counsel by telephone. td arcted
Docketing to mail notices.
Mail AO 450 form. 1YN03 LoILSIa “sf ecto Noy iin
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Copy to judge/magistrate judge. ERD)
27282003
82:S Nd 82 934 EU date mld ete
courtroom
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judgment for intentional infliction of emotional distress is, perforce, a judgment for an
intentional tort and, thus, is excepted from discharge under § 523(a)(6), which excepts from
discharge any debt “for willful and malicious injury by the debtor to another entity or to the
property of another entity...” Lavender, who is before this court pro se, argues that the
bankruptcy court was correct.

Under § 523(a)(6), “willful means deliberate or intentional . . . and malicious means in
conscious disregard of one’s duties or without just cause or excuse; it does not require ill-will or
specific intent to do harm.” Matter of Thirtyacre, 36 F.3d at 700, quoting Wheeler v. Laudani,
783 F.2d 610, 615 (6" Cir. 1986). “<[W]illful and malicious injury’ means a deliberate or
intentional act in which the debtor knows his act would harm the creditor’s interest and proceeds
in the [face] of the knowledge.” In re Cunningham, 59 B.R. 743, 746 (Bankr. N.D. Ill. 1986),
citing United Bank of Southgate v. Nelson, 35 B.R. 766, 776 (Bankr. N.D. Ill. 1983). “Debts
which are based on the traditional intentional torts such as assault and battery, as well as . . .
intentional infliction of emotional distress are nondischargeable under Section 523(a)(6),
provided that the debtor's actions in committing the tort were both ‘willful’ and ‘malicious.”” In
re Cunningham, 59 B.R. at 746 (emphasis added), citing In re Berberian, 34 B.R. 580 (Bankr.
D.R.I. 1983) and R. Ginsberg, BANKRUPTCY § 11,309 at 11,049 (1985). Injuries either
negligently or recklessly inflicted, however, are not within the scope of § 523(a)(6). Geiger, 523
USS. at 64; in re Cox, 243 B.R. 713, 718 (Bankr. N.D. Ill. 2000). Thus, if intentional infliction
of emotional distress can be proved without proof of deliberate and intentional conduct, then the
judgment vel non does not meet the challenge of § 523(a)(6). Rather, the Fieldings would also

have the burden to prove that Lavender’s conduct was deliberate and intentional.


-_

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
DENNIS FIELDING and )
JANE FIELDING, )
)
Appellants, )
)
vs. ) Case No. 02 C 0991
) Judge Joan H. Lefkow
ELIZABETH L, LAVENDER )
a/k/a Elizabeth L. Fielding, ) 2
) ce
Appellee. ) ee aw
MEMORANDUM OPINION AND ORDER wt 8

This is an appeal from a final decision of the bankruptcy court (Bankr. Case No. 01 A
665) discharging the debt of pro se debtor-appellee, Elizabeth Lavender (“Lavender”), to
creditors-appellants, Dennis and Jane Fielding (the “Fieldings”). The bankruptcy court’s
jurisdiction was founded in 28 U.S.C. §§ 1334 and 157(b)(2)(B), and this court’s jurisdiction
over the appeal is invoked under 28 U.S.C. § 158(a)(1). The matter was tried to the court before
the Honorable Ronald Barliant, Bankruptcy Judge, who made findings of fact and conclusions of
law on the record in open court. As an appeal of a core proceeding under 28 U.S.C.
§ 157(b)(2)(B), this court is to review the bankruptcy court’s findings of fact under a clearly
erroneous standard and conclusions of law under a de novo standard. In re Smith, 286 F.3d 461,
464-65 (7" Cir. 2002). For the reasons set forth herein, this court affirms the bankruptcy court’s

judgment.



FACTS AND PROCEDURAL HISTORY

Lavender and Dennis Fielding (“Dennis”) were married in 1987 and had a child,
Whitney, who was born in 1988. The couple later divorced and Dennis has since married Jane
Fielding (“Jane”). On or about August 20, 1998 the Fieldings filed a verified complaint (“the
complaint”) in the Circuit Court of Illinois, Nineteenth Judicial Circuit (Lake County), against
Lavender claiming intentional infliction of emotional distress on behalf of Dennis and loss of
consortium on behalf of Jane. The complaint in Count I alleged that beginning in 1991 and
continuing through the present, Lavender had “deliberately, wrongfully, recklessly and
maliciously” accused Dennis of sexually abusing Whitney (Compl. § 2); that Dennis had never
sexually assaulted or sexually abused Whitney (/d. { 3); that Lavender’s conduct was “extreme
and outrageous” (/d. 4), and “made with the intention of causing, or with reckless disregard for
the probability of causing,” emotional distress to Dennis (/d. { 5); and that Dennis suffered
severe and extreme emotional distress, and as a result was damaged. In Count II, Jane alleged
loss of consortium based on the events alleged by her husband in Count I.

Lavender answered the complaint, denying the material allegations. The Fieldings filed a
motion to compel discovery, noticed for July 11, 2000, stating that Lavender had not responded.
to discovery requests and seeking an order of default against her. Lavender did not appear at the
hearing on the motion and the court directed entry of “default judgment” and set the case for
prove-up on August 10, 2000 (a date that was apparently continued until October). On
October 12, 2000, Lavender moved to vacate the default judgment, stating that she had
mistakenly believed the court date for the motion to compel was July 12, 2000. On October 26,
2000, the court denied Lavender’s motion. On October 31, 2000, the Fieldings filed a joint

affidavit in support of their claim and their damages, and on November 16, 2000, a hearing on

2