Court Opinion

ID: 37741
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:57:44+00
Date Added: 2024-06-11T14:56:54.405677
License: Public Domain

United States Court of Appeals
                                                                  Fifth Circuit
                                                               F I L E D
                        REVISED MARCH 17, 2005
                                                               January 12, 2005
                 IN THE UNITED STATES COURT OF APPEALS
                                                           Charles R. Fulbruge III
                         FOR THE FIFTH CIRCUIT                     Clerk

                         ____________________

                             No. 04-30184
                         ____________________

In The Matter of: ROBERT BURKE KEATY, SR; ERIN KENNY KEATY
               Debtors
_________________________________________________________________

ROY A RASPANTI
                  Appellant

v.

ROBERT BURKE KEATY, SR
               Appellee
________________________________________________________________

           Appeal from the United States District Court
               for the Western District of Louisiana
_________________________________________________________________

Before KING, Chief Judge, and HIGGINBOTHAM and DAVIS, Circuit
Judges.

KING, Chief Judge:

     This appeal arises from the bankruptcy court’s refusal to

give preclusive effect to findings made by the Louisiana Fourth

Circuit Court of Appeal.      Appellant Roy A. Raspanti brought an

adversary proceeding against Appellee Robert Burke Keaty, Sr. in

bankruptcy court seeking a determination that a state court

judgment against Keaty was not dischargeable under § 523(a)(6) of

the Bankruptcy Code.    Raspanti asked the bankruptcy court to

apply principles of collateral estoppel to the Louisiana
appellate court’s findings on the issue of whether the debt arose

from a willful and malicious injury as required under § 523(a)(6)

of the Bankruptcy Code.    The bankruptcy court did not give

preclusive effect to the state appellate court’s findings,

reasoning that the issue had not been “actually litigated” at the

state court level.    Instead, the bankruptcy court held a trial to

determine if the debt owed by Keaty was for a willful and

malicious injury.    After that trial, the bankruptcy court

concluded that the debt owed to Raspanti was not for a willful

and malicious injury, and the court thus held that the debt was

dischargeable.    The district court affirmed.   We conclude that

the bankruptcy court erred in not giving preclusive effect to the

state appellate court’s findings.     We therefore REVERSE the

judgment of the district court.

                 I. FACTUAL AND PROCEDURAL BACKGROUND

     In 1985, Connie Byrd employed Robert Burke Keaty, Sr.,

Thomas S. Keaty, and Keaty & Keaty (collectively “the Keatys”) to

represent her son, Gregory Byrd, as a plaintiff in a Louisiana

state court lawsuit.    In that suit, the Byrds sued two defendants

for injuries that Gregory sustained at school.     In 1987, one of

the defendants settled with the Byrds.     Following a fee dispute,

the Byrds and the Keatys executed a compromise agreement by which

the Keatys received $586,200 in fees and costs.     The Keatys

continued to represent the Byrds at trial against the other

                                  2
defendant, the school board, in the 26th Judicial District Court

for the Parish of Bossier (the “Bossier Parish proceeding”).     In

January 1988, the trial court ruled in favor of the school board,

and the Keatys subsequently filed a notice of appeal on behalf of

the Byrds.   Immediately thereafter, however, the Byrds discharged

the Keatys, and in March 1988, Roy A. Raspanti was substituted as

counsel.

     Raspanti represented the Byrds in their appeal against the

school board.   While the appeal was pending, the Keatys filed an

intervention in the suit seeking additional attorney’s fees

should the appeal against the school board be successful.     The

appellate court ultimately reversed the judgment in favor of the

school board and remanded the case.   The school board

subsequently agreed to settle the claim, and Raspanti was paid

$588,750 in attorney’s fees.   Meanwhile, the trial court

dismissed on summary judgment the Keatys’ claim for additional

fees, reasoning that the compromise agreement executed between

the Byrds and the Keatys settled all of their fee disputes.     The

Keatys appealed the judgment, but the Louisiana Second Circuit

Court of Appeal dismissed the appeal as untimely.

     In November 1991, the Keatys sued Raspanti in the Civil

District Court for the Parish of Orleans, alleging tortious

interference of contract and unjust enrichment and seeking a

portion of the attorney’s fees collected by Raspanti.    In

February 1992, the Keatys filed a second suit against Raspanti

                                 3
seeking an apportionment of the attorney’s fees on a quantum

meruit basis.    The two suits were consolidated.   In response,

Raspanti filed exceptions of prescription, no cause of action,

and res judicata, as well as a motion for summary judgment and a

motion for sanctions.    All of these exceptions and motions were

denied.    Raspanti then requested several admissions from the

Keatys: first, that there was no contract between Raspanti and

Robert B. Keaty, Thomas S. Keaty and/or Keaty and Keaty, and

second, that there had never been a contract between any of those

parties.    Keaty v. Raspanti, 781 So. 2d 607, 609 (La. Ct. App.

2001).    The Keatys denied Raspanti’s request for admissions and

responded that their claims “encompass[ed] contractual claims and

a claim for apportionment of attorney's fees.”      Id.   However, the

Keatys later admitted, in a written opposition to a motion for

summary judgment filed by Raspanti, that they had no contract

with Raspanti.    Id.   In light of this, Raspanti reurged his

motion for summary judgment, making the additional argument that

because the Keatys already had been denied additional fees from

the Byrds by the state court in Bossier Parish, they could not

recover additional fees from him.      In support, Raspanti pointed

to prior admissions made by the Keatys that the source of their

claim was the contract with the Byrds and that they had no

contract with Raspanti.

     On August 13, 1996, the trial court rendered summary

judgment in favor of Raspanti.     Keaty v. Raspanti, 695 So. 2d 1085

                                   4
(La. Ct. App. 1997).   On May 28, 1997, the Louisiana Fourth

Circuit Court of Appeal affirmed.      See id.    The appellate court

reasoned that the Bossier Parish proceeding had resulted in a

final judgment that the Keatys could not recover additional fees

from the Byrds because the compromise agreement encompassed

claims for both past and future fees.        Id. at 1087.   Thus, the

court concluded that since the Keatys’ claim was based on their

contract with the Byrds, the Keatys were precluded from seeking

additional fees from Raspanti.   Id.    The court also made the

observation that the Keatys had acknowledged that their tortious

interference claim was prescribed.     Id.

     On June 27, 1997, Raspanti filed a motion for sanctions

against the Keatys on the basis that the Keatys’ tortious

interference claim was frivolous.    In response, the Keatys filed

exceptions of prescription and res judicata.       The trial court

granted the Keatys’ exceptions without written reasons, and

Raspanti appealed to the Louisiana Fourth Circuit Court of

Appeal.

     On February 7, 2001, the appellate court reversed the

decision of the trial court and held that the Keatys’ exceptions

of res judicata and prescription had no merit.       The court then

went on to assess Raspanti’s sanctions claim de novo.        The court

referred to its 1997 decision and noted that Keaty had no claim

for attorney’s fees against Raspanti.     The Louisiana appellate

court then made particular findings regarding the Keatys’ claims.

                                 5
Specifically, the court found that the Keatys knew their claims

had prescribed, that their answers to Raspanti’s request for

admissions were disingenuous, and that the proceedings by the

Keatys were knowingly without foundation, crafted for the

purposes of harassment, and designed to prolong the proceedings

deliberately and needlessly.    Id. at 612.      Accordingly, the

appellate court concluded that the Keatys’ conduct was

sanctionable under Louisiana law1 and remanded the case for an

evidentiary hearing to set the amount of sanctions to be awarded.

The state trial court awarded Raspanti $34,605.08, which the

appellate court increased to $107,605.95 on appeal.        Keaty v.

Raspanti, 866 So. 2d 1045 (La. Ct. App. 2004).

     1
          The Keatys were sanctioned under the Louisiana Code of
Civil Procedure. The relevant statute states in pertinent part:

     Art. 863. Signing of pleadings, effect

     A. Every pleading of a party represented by an attorney
     shall be signed by at least one attorney of record in his
     individual name . . . .

     B. Pleadings need not be verified or accompanied by
     affidavit or certificate, except as otherwise provided by
     law, but the signature of an attorney or party shall
     constitute a certification by him that he has read the
     pleading; that to the best of his knowledge, information,
     and belief formed after reasonable inquiry it is well
     grounded in fact; that it is warranted by existing law or
     a good faith argument for the extension, modification, or
     reversal of existing law; and that it is not interposed
     for any improper purpose, such as to harass or to cause
     unnecessary delay or needless increase in the cost of
     litigation.

LA. CODE CIV. PROC. ANN. art. 863 (West 1984).

                                  6
     Meanwhile, on December 9, 1999, before the Louisiana

appellate court’s reversal, Robert Burke Keaty, Sr. (“Keaty”) and

Erin Kenny Keaty filed a voluntary petition for relief under

Chapter 7 of the Bankruptcy Code in the United States Bankruptcy

Court for the Western District of Louisiana.    On April 6, 2001,

Keaty added Raspanti as a creditor.    Thereafter, on June 14,

2001, Raspanti filed a complaint to determine the

dischargeability of his debt pursuant to 11 U.S.C. § 523(a)(6).2

Specifically, Raspanti contended that Keaty’s debt (i.e., the

sanctions assessed by the Louisiana Fourth Circuit Court of

Appeal) should not be discharged under § 523(a)(6) because it was

a debt for a willful and malicious injury (i.e., bringing a

frivolous lawsuit against Raspanti).

     On October 1, 2001, Raspanti filed a motion for summary

judgment, arguing that the findings of the Louisiana Fourth

Circuit Court of Appeal amounted to a finding that the debt owed

by Keaty to Raspanti resulted from a willful and malicious

injury, and thus, under the doctrine of issue preclusion, Keaty

was barred from relitigating the issue.    The bankruptcy court

denied Raspanti’s motion on March 19, 2002.    The court reasoned

that the issue of willful and malicious injury was not “actually

litigated” as required under issue preclusion because “neither

the [Louisiana] trial court nor the appellate court ever

     2
          This action was brought only against Keaty.

                                7
conducted an actual evidentiary hearing regarding [Keaty’s]

conduct.”    On April 16, 2002, Raspanti filed a second motion for

summary judgment and attached a copy of the entire state court

record.   On July 30, 2002, the bankruptcy court again denied

Raspanti’s motion.   The court again reasoned that the sanctions

issue had not been “actually litigated” so as to support a

finding of willful and malicious injury under § 523(a)(6) because

the sanctions issue was decided “without the introduction of

exhibits, testimony or any other evidence” and “without any

hearing.”

     Thereafter, the bankruptcy court held a trial on Raspanti’s

complaint on November 4, 2002.   At trial, Raspanti relied solely

on the state court record.   On August 26, 2003, the bankruptcy

court issued an order dismissing Raspanti’s complaint with

prejudice.   In its Reasons for Decision, the bankruptcy court

held that Raspanti failed to satisfy his burden of proving each

element of § 523(a)(6) because he presented no evidence that went

to Keaty’s intent or subjective motivation.   The bankruptcy court

specifically rejected Raspanti’s argument, which Raspanti had

also put forth in his motions for summary judgment, that the

state appellate court’s findings clearly established all the

elements of § 523(a)(6) and that, pursuant to the doctrine of

issue preclusion, judgment should be entered in his favor.    In

rejecting Raspanti’s argument, the bankruptcy court restated the

reasoning it articulated when it ruled on Raspanti’s motion:

                                  8
“issue preclusion require[s] that an issue be ‘actually

litigated’ in the first instance in order for issue preclusion to

apply in the second case.    Finding that there was never a trial

on the issue of sanctions, [this] court concluded that issue

preclusion did not apply.”    Raspanti v. Keaty (In re Keaty), No.

99-52587 (Bankr. W.D. La. 2003).       Accordingly, the bankruptcy

court refused to give preclusive effect to the state appellate

court’s findings to conclude that Raspanti had met his burden of

proving the elements of § 523(a)(6) because “the appellate court

entered sanctions without a trial or evidentiary hearing

whatsoever.”   Id.

     Raspanti appealed the bankruptcy court’s decision to the

United States District Court for the Western District of

Louisiana.   The district court adopted the findings of the

bankruptcy court and dismissed Raspanti’s appeal.       Raspanti now

appeals to this court, arguing that the district court erred in

affirming the bankruptcy court’s decision.       The issue before us

is whether, under principles of collateral estoppel, the

sanctions issue was “actually litigated” in the state court such

that the Louisiana appellate court’s findings barred the

relitigation of the willful and malicious injury requirement of

§ 523(a)(6).

                            II. DISCUSSION

A.   Standard of Review

                                   9
      This court reviews a bankruptcy court’s conclusions of law

de novo.   Killebrew v. Brewer (In re Killebrew), 888 F.2d 1516,

1519 (5th Cir. 1989).   “A bankruptcy court's decision to give

preclusive effect to a state court judgment is a question of law

that we review de novo.”   Gober v. Terra + Corp. (In re Gober),

100 F.3d 1195, 1201 (5th Cir. 1996); accord Schwager v. Fallas

(In re Schwager), 121 F.3d 177, 181 (5th Cir. 1997).

B.    Analysis

      Section 523(a)(6) of the Bankruptcy Code excepts from

discharge any debt incurred for willful and malicious injury by

the debtor to another entity.   11 U.S.C. § 523(a)(6) (2004).

Section 523(a)(6) of the Bankruptcy Code specifically provides:

      § 523. Exceptions to discharge

      (a) A discharge under section 727, 1141, 1228(a),
      1228(b), or 1328(b) of this title does not discharge an
      individual debtor from any debt . . .

           (6) for willful and malicious injury by the debtor
           to another entity or to the property of another
           entity . . . .

Id.   The Supreme Court, in Kawaauhau v. Geiger, 523 U.S. 57, 61

(1998), stated that “[t]he 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.”   The Fifth Circuit

extended Kawaauhau’s reasoning in Miller v. J.D. Abrams Inc. (In

re Miller), 156 F.3d 598, 603 (5th Cir. 1998), and stated that

                                10
“either objective substantial certainty [of injury] or subjective

motive [to injure] meets the Supreme Court's definition of

‘willful . . . injury’ in § 523(a)(6).” (third alteration in

original).   The court in Miller went on to define the word

“malicious” and specifically rejected that it meant an act

without just cause or excuse.     Id. at 605.   Instead, the court

defined “malicious” as an act done with the actual intent to

cause injury.    Id. at 606.   The court noted that this definition

is synonymous with the definition of “willful” and thus

aggregated “willful and malicious” into a unitary concept.     Thus,

the court held that “an injury is ‘willful and malicious’ where

there is either an objective substantial certainty of harm or a

subjective motive to cause harm.”      Id. at 606; see also Williams

v. IBEW Local 520 (In re Williams), 337 F.3d 504, 509 (5th Cir.

2003).

     To prevail under § 523(a)(6), a creditor must prove by a

preponderance of the evidence that the debt is not dischargeable.

Grogan v. Garner, 498 U.S. 279, 291 (1991).      The Supreme Court

has held that collateral estoppel (issue preclusion) principles

apply in bankruptcy dischargeability proceedings.      Id. at 285.

Accordingly, “[i]n such proceedings, ‘[p]arties may invoke

collateral estoppel in certain circumstances to bar relitigation

of issues relevant to dischargeability . . . .’”      Schwager, 121
F.3d at 181 (second alteration in original) (quoting Gober, 100
F.3d at 1201).   Thus, collateral estoppel can provide an

                                  11
alternative basis to satisfy the elements of § 523(a)(6).

     When giving preclusive effect to a state court judgment,

this court must apply the issue preclusion rules of that state.

Miller, 156 F.3d at 598 (citing Matsushita Elec. Indus. Co. v.

Epstein, 516 U.S. 367, 373 (1996)); In re King, 103 F.3d 17, 19

n.2 (5th Cir. 1997); Gober, 100 F.3d at 1201.     Here, because the

underlying judgment is from the Louisiana Fourth Circuit Court of

Appeal, Louisiana issue preclusion rules apply.    Louisiana law

provides in pertinent part:

     Except as otherwise provided by law, a valid and final
     judgment is conclusive between the same parties, except
     on appeal or other direct review, to the following
     extent . . .

     (3) A judgment in favor of either the plaintiff or the
     defendant is conclusive, in any subsequent action
     between them, with respect to any issue actually
     litigated and determined if its determination was
     essential to that judgment.

LA. REV. STAT. ANN. § 4231 (West 1991).

     The requirements for issue preclusion under Louisiana state

law are identical to those recognized by the Fifth Circuit: (1)

the parties must be identical; (2) the issue to be precluded must

be identical to that involved in the prior action; (3) the issue

must have been actually litigated; and (4) the determination of

the issue in the prior action must have been necessary to the

resulting judgment.   Charpentier v. BG Wire Rope & Slings, Inc.,

174 B.R. 438, 441 n.1 (E.D. La. 1994); see also Matter of

Whittaker, 225 B.R. 131 (Bank. E.D. La. 1998).    Moreover, this

                                 12
circuit has held that because § 4231 is modeled on federal

doctrine and the RESTATEMENT   OF   JUDGMENTS, we can consult federal

jurisprudence for guidance when interpreting it.               See Lafreniere

Park Found. v. Broussard, 221 F.3d 804, 808 (5th Cir. 2000); see

generally Goodman v. Spillers, 686 So. 2d 160, 166 (La. Ct. App.

1996) (citing 3 JAMES W. MOORE      ET AL.,   MOORE’S MANUAL, FEDERAL PRACTICE

AND   PROCEDURE, §§ 30.04, 30.05 (1996) and RESTATEMENT (SECOND)       OF

JUDGMENTS, § 27, cmt. (d) (1980)).

       In addition, the scope of collateral estoppel is

circumscribed by the particularized findings of the state court.

Miller, 156 F.3d at 602.      Thus, “[c]ollateral estoppel applies in

bankruptcy courts only if, inter alia, the first court has made

specific, subordinate, factual findings on the identical

dischargeability issue in question--that is, an issue which

encompasses the same prima facie elements as the bankruptcy

issue--and the facts supporting the court's findings are

discernible from that court's record.”             Dennis v. Dennis (In re

Dennis), 25 F.3d 274, 278 (5th Cir. 1994).              Therefore, the state

court’s findings must satisfy the elements of the “willful and

malicious injury” requirement.

       In the case at hand, the bankruptcy court refused to give

preclusive effect to the state appellate court’s findings because

it concluded the sanctions issue (whether Keaty had filed the

claim against Raspanti to harass or to cause unnecessary delay or

needless increase in the cost of litigation) had not been

                                       13
“actually litigated” in the state court.           Specifically, the

bankruptcy court stated that the sanctions issue had not been

“actually litigated” because there had never been a trial or an

evidentiary hearing on the issue.        We disagree with the

bankruptcy court’s legal premise.

     There is nothing in the case law defining the term “actually

litigated” to require a trial or evidentiary hearing.               Notably,

the bankruptcy court failed to cite any law to the contrary.

Louisiana law does not mandate that an issue must be decided

after a trial or evidentiary hearing to be considered “actually

litigated.”   Such a requirement is clearly absent from the

Louisiana statute setting forth the requirements of issue

preclusion.   See LA. REV. STAT. ANN. § 4231 (West 1991).            Likewise,

at the federal level, there is no requirement of a trial or

evidentiary hearing to conclude that an issue has been “actually

litigated.”   See RESTATEMENT (SECOND)   OF   JUDGMENTS § 27 cmt. d (1982)

(stating that an issue is actually litigated when “an issue is

properly raised, by the pleadings or otherwise, and is submitted

for determination, and is determined,” but not requiring a trial

or evidentiary hearing); 18 JAMES W. MOORE        ET AL.,   MOORE’S FEDERAL

PRACTICE § 132.03 (3d ed. 1999) (failing to state that a trial or

evidentiary hearing is a requirement for issue preclusion).

     In fact, courts regularly apply the doctrine of issue

preclusion in instances when there has not been a trial or

evidentiary hearing in the first case.           See, e.g., Hirschfeld v.

                                   14
Spanakos, 104 F.3d 16 (2d Cir. 1997).           In Hirschfeld, the Second

Circuit reversed the district court’s refusal to give preclusive

effect to an appellate court’s findings, holding that even though

“the process by which appellate courts impose sanctions is a

summary process in which no testimony is taken and no

cross-examination permitted[,] it is not dispositive of the

preclusion issue . . . .”     Id. at 19.        Courts also apply the

doctrine of issue preclusion to issues decided on summary

judgment--which itself does not require a trial or evidentiary

hearing.   See RESTATEMENT (SECOND)   OF   JUDGMENTS § 27 cmt. d (stating

that an issue is actually litigated when it is, inter alia,

“submitted for determination, and is determined” and that “[a]n

issue may be submitted and determined on . . . a motion for

summary judgment”); 18 JAMES W. MOORE       ET AL.,   MOORE’S FEDERAL PRACTICE

§ 132.03 (“Issue preclusion generally applies when the prior

determination is based on a motion for summary judgment.”).

Thus, the bankruptcy court erred in concluding that the “actually

litigated” requirement of issue preclusion required a trial or

evidentiary hearing.

     The requirement that an issue be “actually litigated” for

collateral estoppel purposes simply requires that the issue is

raised, contested by the parties, submitted for determination by

the court, and determined.     McLaughlin v. Bradlee, 803 F.2d 1197,

1201 (D.C. Cir. 1986) (“This court has recently recapitulated the

standards for establishing the preclusive effect of a prior

                                      15
holding. First, the same issue must have been actually litigated,

that is, contested by the parties and submitted for determination

by the court.” (internal quotation marks omitted)); James

Talcott, Inc. v. Allahabad Bank, Ltd., 444 F.2d 451, 459-60 (5th

Cir. 1971) (“As a general rule, where a question of fact is put

in issue by the pleadings, and is submitted to the jury or other

trier of facts for its determination, and is determined, that

question of fact has been ‘actually litigated.’” (citing

RESTATEMENT   OF   JUDGMENTS § 68, cmt. c (1942))); RESTATEMENT (SECOND)   OF

JUDGMENTS § 27 cmt. d (1982) (stating that an issue is actually

litigated when it is “properly raised, by the pleadings or

otherwise, and is submitted for determination, and is

determined”).

      There is no question that the sanctions issue was actually

litigated in the state court.          First, Raspanti clearly raised the

sanctions issue in his motion for sanctions under Article 863.

Second, Keaty contested Raspanti’s assertion that Keaty filed the

claim for attorney’s fees against Raspanti to harass or to cause

unnecessary delay or needless increase in the cost of litigation

in several pleading documents, including his Memorandum in

Support of Exceptions of Res Judicata and Prescription and in

Opposition to Sanctions Under Louisiana Code of Civil Procedure

Article 863.3        In addition, Keaty’s attorney argued the sanctions

      3
              In his memorandum, Keaty stated in pertinent part:

                                        16
issue twice before the Louisiana Fourth Circuit Court of Appeal;

first before a three-judge panel and then before a five-judge

panel.    Third, the sanctions issue was submitted for

determination by the state trial and appellate courts.      Finally,

the state appellate court ruled expressly on, and thus

determined, the sanctions issue.      The appellate court made the

express finding that “the entire proceedings by the Keatys

against Raspanti was knowingly without foundation, crafted for

purposes of harassment and carried out in a manner designed to

deliberately prolong the proceedings needlessly.”      Keaty v.

Raspanti, 781 So. 2d 607, 612 (La. Ct. App. 2001).      Therefore, we

conclude that the sanctions issue--the issue of whether Keaty

filed the claim against Raspanti to harass or to cause

unnecessary delay or needless increase in the cost of litigation-

-was actually litigated in the Louisiana Fourth Circuit Court of

Appeal.    The state court record that Raspanti submitted to the

          Roy A. Raspanti was made defendant in a lawsuit
     wherein the plaintiffs sought at least a portion of
     attorneys fees realized as the result of their services,
     knowledge and skill. . . .     Thus, the Keatys claimed
     entitlement to, at least, a portion of the attorneys fees
     realized as the result of their efforts, services and
     skill.   The petition was not frivolous, erroneous or
     clearly wrong. In good faith, the Keatys asserted that
     Roy A. Raspanti was not entitled to the total sum of
     attorneys fees he had in his possession.      The record
     simply does not support the allegation that the pleadings
     were not founded in fact and not asserted in good faith.

This statement clearly shows that Keaty disputed the fact that he
filed the claim against Raspanti to harass or to cause unnecessary
delay or needless increase in the cost of litigation.

                                 17
bankruptcy court fully supports our conclusion that the

bankruptcy court erred in finding that the sanctions issue was

not actually litigated at the state court level.4

     Our conclusion that the elements of collateral estoppel have

been met, however, is not the end of our inquiry.   We must next

determine whether the state appellate court “has made specific,

subordinate, factual findings on the identical dischargeability

issue in question--that is, an issue which encompasses the same

prima facie elements as the bankruptcy issue . . . .”     Dennis, 25
F.3d at 278.   In other words, we must ascertain whether a claim

for sanctions under Louisiana law encompasses the elements of the

willful and malicious injury requirement under § 523(a)(6) of the

Bankruptcy Code and whether the state appellate court’s findings

satisfy the elements of the “willful and malicious injury”

requirement.   As stated above, this circuit has held that “an

injury is ‘willful and malicious’ where there is either an

objective substantial certainty of harm or a subjective motive to

    4
          Moreover, the bankruptcy court did not question that all
the other elements of collateral estoppel were met. First, both
Raspanti and Keaty were parties in the state court action. Second,
as discussed below, the issue to be precluded (the issue of whether
Keaty acted willfully and maliciously) is encompassed by the issue
of sanctions (whether Keaty filed the claim for attorney’s fees
against Raspanti to harass or to cause unnecessary delay or
needless increase in the cost of litigation).           Third, the
determination of the issue of whether Keaty filed the claim against
Raspanti to harass or to cause unnecessary delay or needless
increase in the cost of litigation in the state appellate court was
necessary to the judgment imposing sanctions under the Louisiana
Code of Civil Procedure Article 863.

                                18
cause harm.”   Miller, 156 F.3d at 606.    Article 863 of the

Louisiana Code of Civil Procedure allows sanctions against an

attorney who signs a pleading with “any improper purpose, such as

to harass or to cause unnecessary delay or needless increase in

the cost of litigation.”   Both § 523(a)(6) and the Louisiana

statute require an inquiry into whether Keaty acted either with

an objective substantial certainty of injury (to cause

unnecessary delay) or a subjective motive to cause injury (to

harass or to increase the cost of litigation needlessly).       In

fact, the Louisiana appellate court issued sanctions against

Keaty for intentionally pursuing meritless litigation for the

purpose of harassment and delay.     Thus, we conclude that

Raspanti’s claim for sanctions under Louisiana law encompasses

the elements of the willful and malicious injury requirement

under § 523(a)(6) of the Bankruptcy Code.

     We further conclude that the Louisiana Fourth Circuit Court

of Appeal’s findings unquestionably satisfy the elements of

§ 523(a)(6).   The Louisiana appellate court made the following

findings:

     We find that the Keatys knew and must have known all
     along that their claim for tortious interference had
     prescribed. We find that the Keatys knew that all of
     their claims against the Byrds were disposed of in the
     Bossier Parish proceedings. . . . We find that the
     Keatys’ answers to Raspanti's request for admissions,
     in which they denied the non-existence of a contract
     between them and Raspanti, was disingenuous. We find
     that the entire proceedings by the Keatys against
     Raspanti was knowingly without foundation, crafted for
     purposes of harassment and carried out in a manner

                                19
     designed to deliberately prolong the proceedings
     needlessly.

Keaty, 781 So. 2d at 612 (emphasis added).   These are clear and

specific findings as to Keaty’s state of mind.    They demonstrate

that Keaty’s motive in filing the frivolous claim for attorney’s

fees was to injure Raspanti (by harassing him).   They also

demonstrate that Keaty’s actions were substantially certain to

injure Raspanti, since deliberately and needlessly prolonging the

proceedings would necessarily cause Raspanti financial injury.

Thus, we conclude that the state appellate court’s findings

satisfy the elements of § 523(a)(6).5   Specifically, the findings

evidence that Keaty acted willfully and maliciously to injure

Raspanti.   Therefore, we conclude that the bankruptcy court erred

in refusing to give preclusive effect to the findings made by the

Louisiana Fourth Circuit Court of Appeal.

                          IV. Conclusion

     Accordingly, we hold that the district court erred in

affirming the bankruptcy court’s decision to deny preclusive

    5
          The bankruptcy court’s holding does not dispute that the
Louisiana Fourth Circuit Court of Appeal’s findings satisfy the
elements of § 523(a)(6). The bankruptcy court held that Raspanti
failed to satisfy his burden of proving each element of § 523(a)(6)
because he presented no evidence that went to Keaty’s intent or
subjective motivation. The bankruptcy court’s rationale for its
holding, however, rested on its conclusion that the sanctions issue
was not “actually litigated” and not on a finding that the
sanctions issue did not encompass the same elements as the willful
and malicious issue or that the state appellate court’s findings
did not satisfy the elements of the “willful and malicious injury”
requirement.

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effect to the Louisiana appellate court’s findings.   REVERSED and

REMANDED.

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