Opinion ID: 3047743
Heading Depth: 2
Heading Rank: 1

Heading: Injury to Maxfield or his property

Text: Section 523(a)(6) excepts from discharge in bankruptcy any debt that results from “willful and malicious injury by the debtor to another entity or to the property of another entity.” 11 U.S.C. § 523(a)(6). Janice contends that, because her obligation to Maxfield via the personal injury judgment arose after the 1 Janice argues, in the alternative, that the district court erred in directing judgment in favor of Maxfield because it did not address her affirmative defense for setoff based on an alleged $3 million payment Maxfield received in a settlement agreement. But Janice never mentioned this defense in response to Maxfield’s brief before the district court, as required by Rule 56 of the Federal Rules of Civil Procedure. See Int’l Stamp Art, Inc. v. U.S. Postal Serv., 456 F.3d 1270, 1274 (11th Cir. 2006) (“If the movant bears the burden of proof on an issue because, as a defendant, it is asserting an affirmative defense, it must establish that there is no genuine issue of material fact as to any element of that defense.”). Because she failed to argue the issue before the district court, it is waived here. Latimer v. Roaring Toyz, Inc., 601 F.3d 1224, 1240 (11th Cir. 2010). 8 fraudulent transfer, she could not have injured Maxfield or his property by transferring Shoreview. In support of this argument, Janice urges us to follow the decision of the Ninth Circuit in In re Saylor, 108 F.3d 219 (9th Cir. 1997), which also involved an alleged fraudulent transfer under California law.2 In that case, the Ninth Circuit affirmed the bankruptcy and district courts’ findings that a debt incurred through a state court breach-of-contract judgment did not give a creditor an actual property interest in property that the debtors had transferred fraudulently during the pendency of the breach-of-contract action. Id. at 220-21. Because the creditor had no security interest in the property transferred and no judgment on the fraudulent transfer claim at the time he brought the nondischargeability complaint, the creditor lacked standing to seek exception from discharge under § 523(a)(6). Id. at 221. We are not persuaded to apply In re Saylor here because this case presents a critical distinction: Maxfield had obtained a judgment on his fraudulent transfer claim at the time he initiated a nondischargeability claim under § 523(a)(6). Thus, unlike in Saylor, Maxfield had a judgment that established a right to payment 2 Although not binding, the reasoning employed by the Ninth Circuit is persuasive. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981). 9 based on the damage Janice did to his property interest in collecting on his personal injury judgment by transferring Shoreview. In this way, Maxfield’s nondischargeability claim is more like that in a subsequent en banc case from the Ninth Circuit, In re Bammer, 131 F.3d 788 (9th Cir. 1997) (en banc). In that case, Alta Bammer faced an order of restitution to compensate several embezzlement victims, including James Murray. Id. at 790. Bammer fraudulently transferred a mortgage on her home to her son, Steven, to avoid paying Murray. Id. Murray sued in California state court for fraudulent transfer and obtained a judgment against Alta and Steven Bammer. Id. at 790-91. In its order, the state court emphasized that the two had actual intent to defraud creditors, including Murray. Id. When Steven Bammer filed a bankruptcy petition, Murray sought to have the fraudulent transfer debt excepted from discharge under § 523(a)(6). Id. The bankruptcy court found that the debt was dischargeable, but the en banc Ninth Circuit reversed. Id. at 790, 793. The court emphasized that Murray had already obtained a fraudulent transfer judgment. Further, “[j]ust as important . . . as this [fraudulent transfer] judgment, however, [were] the findings of the Superior Court in Murray’s civil case against Steven on which the judgment was based.” Id. at 791. The findings of actual intent, without just cause, to injure Murray’s property 10 (his right to restitution), in conjunction with the fraudulent transfer judgment, led the Ninth Circuit to conclude that the transfer was a willful and malicious injury to Murray’s property. Id. at 791-93. Here too, the bankruptcy court found that Janice Jennings knowingly conspired with Bruce to transfer Shoreview with the intent to keep its value from Maxfield’s reach. Based on this finding, just as the state court did in Bammer, the bankruptcy court awarded judgment in favor of Maxfield for Janice’s fraudulent transfer. We find the court’s reasoning in Bammer persuasive. And because here Maxfield obtained a fraudulent transfer judgment, complete with a finding that Janice intended to prevent Maxfield from satisfying his personal injury claim, we conclude that Janice’s transfer was an injury to Maxfield’s property.