Opinion ID: 3037987
Heading Depth: 3
Heading Rank: 1

Heading: Malicious And Intentional Injury.

Text: Under 11 U.S.C. § 523(a)(6), a debtor cannot be discharged from any debt resulting from “willful and malicious injury by the debtor to another entity or to the property of another entity.” The Trust claims that the Bankruptcy Court erred in discharging Janet Natale’s obligation to pay the $30,000 debt owed to the Trust for the removal of the house, because she willfully and maliciously injured the Trust by building the house in the first place. Based on our review of the record, it does not appear that this issue was raised in the Bankruptcy Court. Generally, “when a party fails to raise an issue in the bankruptcy court, the issue is waived and may not be considered by the district court on appeal.” In re Kaiser Group Int’l Inc., 399 F.3d 558, 565 (3d Cir. 2005). A finding of waiver is appropriate particularly where “the evidence in the record is insufficient to permit a court to realistically” decide the issue. Buncher Co. v. Official Comm. of Unsecured Creditors of GenFarm Ltd. P’ship IV, 229 F.3d 245, 253 (3d Cir. 2000). Because the Trust failed to allege a § 523(a)(6) violation in the Bankruptcy Court, 4 that issue is waived. Notwithstanding the obvious problem of waiver, the Trust asks us to review the record and find that Janet Natale acted willfully and maliciously. We are not factfinders, and we are reluctant to make factual findings on a record as woefully incomplete as that presented here. See Buncher, 229 F.3d at 253. That said, even if we were inclined to reach the merits of the Trust’s § 523(a)(6) claim on the scant existing record, the Trust has not shown that it is entitled to relief. In the different (albeit related) context of determining the priority of the judgment lien vis-a-vis the mortgages, the Trust argued that the banks had obtained the mortgages in bad faith. The Bankruptcy Court disagreed: It was in no way preordained that the mere existence of the covenant would inexorably lead to entry of a money judgment to compensate the beneficiary of the covenant for its enforcement. Indeed, when the mortgages were created the CCP had just issued an order denying enforcement of the covenant. From the perspective of the parties at the time, a reversal of that order on appeal may likely have seemed remote. ...The mortgagees could arguably be charged with knowledge of a heightened potential for further legal action, but not necessarily more. Certainly, the mortgagees are not automatically charged with knowledge of a specific money judgment that had not yet come into existence. (App. 80-81 (emphasis added).) The same could be said for Janet Natale, who reasonably may have believed that the CCP’s initial judgment invalidating the covenant would be affirmed on appeal. On this record, there is insufficient evidence to find that she acted with the willfulness and maliciousness required to implicate § 523(a)(6).