### IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 13

- 60251

In the Matter of: MICHAEL VERNON SHANKLE,
Debtor

------------------------------------------------------------------------ MICHAEL VERNON SHANKLE, Appellant ,

versus DIANNE SHANKLE, Appellee

.

Appeal from the United States District Court for the Northern District of Mississippi No. 1:12

- CV

- 117

Before S MITH , DeM OSS , and H IGGINSON , Circuit Judges

. PER CURIAM: *

* Pursuant to 5 TH C IR . R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5 TH C IR . R. 47.5.4. United States Court of Appeals Fifth Circuit 

### FILED February 7, 2014

Lyle W. Cayce Clerk Case: 13-60251 Document: 00512525831 Page: 1 Date Filed: 02/07/2014No. 13

- 60251 Michael Shankle appeals the district court’s judgment affirming the bank ruptcy court’s determination that the obligations stemming from a divorce decree and subsequent state

- c ourt judgments constituted a non dischargeable debt pursuant to 11 U.S.C. § 523(a)(6). W e a ff irm

.

I. The Shankles divorced in 1999. The divorce court ordered Michael to pay alimony and child support to Dianne and to divide certain marital prop

erty. P aragraph eleven of the decree provided , in relevant part , The Court finds the following items of personal property are mar

i tal property, and shall be equally divided by the parties: Idex Mutual Fund with an approx imate balance of $80,000.00; Ba ker

Hughes Stock in the approximate amount of $4,000.00; Invesco Mutual Fund with an approximate balanc e of $100,00 0 .00. Based on th at division, each spouse was entitled to approximately $92 ,000. Instead of complying, however, Michael withdrew all funds in the Invesco
account

— $114,222.83

— and remitted the proceeds to a John Han cock account in his name , la ter spending it all for his own benefit. He testified that he con

sidered the withdrawal to be his one

- half of the pro ceeds from the three accounts but refused to ten der the remaining two accounts, which were regis

tered in his name , to Dianne

. The next year , an Arkansas state court found Michael in contempt for failing to divide the three accounts or pay oth er sums as ordered

. Although the proceeds from the Invesco account had been spent by that time, the Idex account was worth about $99,000. Michael n evertheless continued his refusal to tender Dianne the money to which she was entitled under the divorce decree

. In 2002, the state court again found Michael in willful contempt of its previous orders for refusing to divide the three accounts and ordered him to
pay Dianne

— within ten days

— her share of the accounts listed in paragraph
2 Case: 13-60251 Document: 00512525831 Page: 2 Date Filed: 02/07/2014No. 13

- 60251 eleven plus interest

. Additionally, the court directed him to execute the docu

men tation necessary to transfer his interest in the Idex account and the Baker

Hug h es stock to Dianne

. Michael testified that because of steep market declines, the Idex account was worth only $50,456.13. Later that year , Dianne received th at sum, slightly less than what she would have gotten from the Idex account had Michael com plied with the di vorce decree , taking into account the interest that had accrued. In 2006, the state court found Michael liable to Dianne for $149,934.40 and awarded a judgment in that amount plus interest f rom June 6, 2006 . Of th at amount, $97,435.91 was for “Marital Pro perty awarded by Decree of Divorce to [ Dianne ] but never tendered by [ Michael ] (with inter est).” This sum represented Dianne ’s share of the Invesco and Idex accounts (plus interest) that she never had received. 1 A few months earlier, in late 2005 , Michael filed a request for relief under Chapter 7 of the Bankruptcy Code. In a schedule filed with the bankruptcy court, he listed a disputed debt owed to Dianne

. Dianne in turn filed an adver

sary proceeding to determine the dischargeability of th at am ount, which con

sisted of unpaid alimony, maintenance, child support, and other obligations Michael had been ordered to pay pursuant to the divorce decree and later state

court proceedings. T he bankruptcy court held a trial with respect to the adversary p ro ceed

ing in early 2012 . Because the parties stipulated that the amounts owed for alimony, child support, and attorneys’ fees were nondischargeable, the only issue was whether a debt of $97,435.91 for marital property awarded to Dianne but never tendere d by Michael was non dischargeable. The bankruptcy court

1 Dianne previously received the Baker

- Hughes stock. The precise amount of the trans fer, however, is unknown. 3 Case: 13-60251 Document: 00512525831 Page: 3 Date Filed: 02/07/2014No. 13

- 60251 concluded that Michael ’s conduct constituted wi l lful and malicious injury to Dianne under § 523(a )(6) of the Bankruptcy Code and, therefore, was a non dis

chargeable debt. Michael appealed to the dis trict court, which affirmed.

II.

“ We review the decision of the district court by applying the same s tan

dard to the bankruptcy court’ s findings of fact and conclusions of law that the district court applied. ” Morrison v. W. Builders of Amarillo, Inc. ( In re Mor ri

son ) , 555 F.3d 473, 480 (5th Cir. 2009). Namely, the “bankruptcy court’ s find

ings of fact are subject to review for clear error, and its conclusions of law are reviewed de novo

. ” Id. (citing Gen. Elec. Capital Corp. v. Acosta ( In re Acosta ) , 406 F.3d 367, 372 (5th Cir. 2005)). “A finding of fact is clearly erroneous only if on the entire evidence, the court is left with the definite and firm conviction that a mistake has been committed.” Cadle Co. v. Duncan ( In re Duncan ) , 562 F.3d 688, 6 94 (5th Cir. 2009) (per curiam) (citation and internal quotation marks omitted).

III. T he sole issue is whether Michael ’s obligation resulting from paragraph eleven and subsequen t state

- court judgment s is a non dischargeable deb t under 11 U.S.C. § 5 2 3 (a)( 6) , which states that a debt is nondischargeable “ for willful and malicious injury by the debtor to another entity or to the property of another entity.” An injury is willful and ma licious when there is either a sub

jec tive motive to cause harm or an objective sub stantial certainty of harm. Miller v. J.D. Abrams Inc. ( In re Miller ) , 156 F.3d 598 , 606 (5th Cir. 1998). The bankruptcy court, in concluding that Michael ’s obligation to Dianne was nondischargeable, noted that several bankruptcy courts have foun d that a debtor’s failure to tender marital assets in contravention of a divorce decree 4 Case: 13-60251 Document: 00512525831 Page: 4 Date Filed: 02/07/2014No. 13

- 60251 constitutes willful and malicious injury under § 523 (a)(6). 2 It also noted that the amount of Michael ’s indebtedness was established by the state

- court order that had set the sum at $97,435.91 plus interest

. Michael does not dispute th at amount but instead attempts to distinguish th o se rulings on the basis that the debtors in those cases purportedly engaged in conduct more egregious than his own . Nevertheles s, he has failed to show that the bankruptcy court clearly erred in concluding that his repeated failure to tender to Dianne her half of the marital assents constituted a “ willful and malicious injury ” because there was an objective substantial certainty o f harm to Dianne in failing to do so. Taking each of Michael’s arguments in turn, f irst, he suggests that the bank ruptcy court’s decision effectively penalizes him for exercising his right to appeal the judgment of the divorce court. Th e bankruptcy court commented that Michael ’s actions “[did not] excuse not doing what you should have done back in 1999.” As the district court noted, the record does not contain any evidence that Michael ’s appeal concerned paragraph eleven or that his

2 See Ker v. Ker ( In re Ker ) , 365 B.R. 807, 814

– 15 (Bankr. S.D. Ohio 2007) (“[C]ourts within the Sixth Circuit and elsewhere have held that the kind of behavior in which Erik admit tedly engaged

— dissipating marital assets and vi olating court orders

— warrants a find

ing of willful and malicious injury and nondischargeability under § 523(a)(6).” (emphasis added) ) ; Heyne v. Heyne ( In re Heyne ) , 277 B.R. 364, 368

– 69 (Bankr. N.D. Ohio 2002) ( finding a debtor ’ s disposal of marital asset s in viol ation of a divorce decree that resulted in civil con

tempt to be willful and mali cious for the purposes of § 523(a)(6)) ; Lipira v. Kaczmarski ( In re Kaczmarski ) , 245 B.R. 555, 561

– 62 (Bankr. N.D. Ill. 2000) (“By violating the restraining order that his wife had obtained for the purpose of preventing his dissipation of marital assets, Debtor was aware that his actions were substan tially certain to lead to injury of Lipira or her property interest. Debtor’s actions were thus willful. .

. . His actions were malicious because they were without just cause or excuse and con trary to his clear legal duty as found by state court orders. A convenient memory about state court orders in a divorce proceeding is not an excuse to violate these orders.”) ; Shteysel v. Shteysel ( In re Shtey sel ) , 221 B.R. 4 86, 4 89

– 91 (Bankr. E.D. Wis. 1998) (finding that a debtor ’ s actions in dis sipating marital assets before a court order in divorce proceedings constituted willful and m alicious conduct under § 523(a)(6)) ; see also Structured Invs. Co., LLC v. Smith ( In re Smith ) , 302 B.R. 530 , 534 (Bankr. N.D. Miss. 2003) (finding that deliberately diverting monthly pension plan payments contractually transferred to another constituted a nondischargeable debt under § 523(a)(6))

. 5 Case: 13-60251 Document: 00512525831 Page: 5 Date Filed: 02/07/2014No. 13

- 60251 obl iga tion to comply with that decree was stayed pending his appeal. 3 Second, Michael contends that he “left” or “reserved” the Idex account for Dianne . Although it appears that the Idex account, along with the Baker

Hughes stock, would likely have satisfie d Michael ’s obligation under the divorce decree had he turned over possession when first ordered to do so , the bankruptcy court found that Michael took no action to transfer any part of the marital assets until the 2002 contempt order despite knowledge tha t failure to comply with the state court’s orders would cause Dianne economic injury. Michael ’s belief that the Idex account

— which at one point was worth roughly $99 ,000

— would satisfy his obligation to Dianne , however, does not explain the almost three

- ye ar delay in turning over the marital assets

. Third, Michael suggests that Dianne caused the Idex account to be frozen and that this, combined with market declines, excuses the dissipation in mari

tal assets

. He also claims that when he learned that the Idex account had decreased in value, he tried to preserve the principal in the account. Although
t he record evidence is inconclusive with respect to who or what caused the Idex account to be frozen, the bankruptcy court correctly noted, “[h]ad the defenda nt not defied the divorce decree, this would not even be an issue.” Both the market

- induced decline in value and the freeze occurred only after Michael had failed to tender Dianne her half of the value of the account at the time of the divorce decree. F inally, Michael underscores that, pre

- divorce and of his own accord, he paid support to Dianne . Such conduct, although laudatory, does not explain his repeated failure to comply with his obligation to Dianne or his continued defiance of the state

- court or ders

.

3 In fact, Michael , in his brief before th is court, describes his appeal as being “pri

marily” with respect to paragraph fifteen of the divorce decree. 6 Case: 13-60251 Document: 00512525831 Page: 6 Date Filed: 02/07/2014No. 13

- 60251 Accordingly, we agree with the district court that the bankruptcy court correctly exercised its discretion in find ing that Michael ’s repeated refusal to transfer marital assets, despite multiple contempt orders, constituted an object ive substantial certainty of harm to Dianne and, as a result, a willful and mali cious injury under § 523(a)(6)

. Because the bankruptcy court did not clearly err , we AFFIRM the judgment of the district court.

7 Case: 13-60251 Document: 00512525831 Page: 7 Date Filed: 02/07/2014