Sellers v. Friend (In re Friend)
Sellers v. Friend (In re Friend)
Opinion of the Court
This matter comes before the Court upon the Stipulated Facts and briefs filed by the parties. The sole issue before the Court is whether punitive damages awarded by a state court in addition to actual damages are nondischargeable under Section 523(a)(9) of the Bankruptcy Code, where the actual damages were caused by a Debt- or who was operating a motor vehicle while intoxicated from alcohol.
FACTS
In August 1989, Leslie R. Sellers (“Plaintiff”), filed a state court action against Willis Boyd Friend (“Debtor”) for personal injuries caused by Debtor’s unlawful operation of a motor vehicle while intoxicated. On January 17, 1992, following a jury trial, the state court entered judgment against Debtor in the amount of $110,000.00 in actual damages and $10,000.00 in punitive damages. The $110,000.00 in actual damages plus interest has been paid by various insurance companies. Debtor has not paid any of the $10,000.00 punitive damage award.
On March 23, 1992, Debtor and his wife filed for relief under Chapter 7 of the Bankruptcy Code. The Plaintiff thereafter commenced this adversary proceeding to determine the dischargeability of the $10,-000.00 punitive damage award under § 523(a)(9).
CONCLUSIONS OF LAW
Section 523(a)(9) provides as follows:
(a) a discharge under section 727 ... of this title does not discharge an individual debtor from any debt—
(9) for death or personal injury caused by the debtor’s operation of a motor vehicle if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substanee[.]
(Emphasis added).
Plaintiff argues that § 523(a)(9) excepts from discharge all damages, including those that are punitive in nature, arising from a debtor’s unlawful operation of vehicle while intoxicated. On the other hand, Debtor contends that § 523(a)(9) limits the nondischargeability of a debt to compensation for actual damages only. Debtor points out that punitive damages are awarded to punish and deter future conduct, not to compensate for injuries sustained.
When interpreting the Bankruptcy Code, this Court begins with the statutory language itself. United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). The plain language of § 523(a)(9) provides for the nondischargeability of any debt for personal injury caused by a debtor’s operation of a motor vehicle while legally intoxicated. As an exception to discharge, § 523(a)(9) should be read no more broadly than that which is necessary to give effect to the plain meaning of its terms. Thus, only debts for personal injury are excepted from discharge under § 523(a)(9).
Punitive damages do not constitute a debt for personal injury. They are not intended to compensate for injuries sustained. Rather, punitive damages are damages awarded over and above actual damages in order to punish a wrongdoer for outrageous conduct. In Oklahoma, punitive damages may be awarded in addition to actual damages where a defendant has been guilty of “conduct evincing a wanton or reckless disregard for the rights of an-other_” 23 O.S.1992 § 9 A. They are awarded for the benefit of society rather than for the benefit of the litigating parties. Slocum v. Phillips Petroleum Co., 678 P.2d 716 (Okl. 1983). Because punitive damages do not represent compensation for personal injury, they do not fall within the scope of § 523(a)(9).
Exceptions to discharge should be narrowly construed so as to carry out the fresh start policy of the Bankruptcy Code.
Therefore, the Court finds that the $10,-000.00 punitive damage award owed by Debtor to Plaintiff is not excepted from discharge under § 523(a)(9). A separate Order consistent with this Memorandum Opinion shall be entered.
. For cases holding that punitive damages are dischargeable under other sections of § 523, see In re Alwan Brothers Co., 105 B.R. 886 (Bankr. C.D.Ill. 1989); In re Ellwanger, 105 B.R. 551 (9th Cir. BAP 1989); In re Perry, 59 B.R. 947 (Bankr.E.D.Pa. 1986)
. See In re Manley, 135 B.R. 137 (Bankr.N.D.Okl. 1992); In re Dahlstrom, 129 B.R. 240 (Bankr.D.Utah 1991) and cases cited therein.
. See In re Shervin, 112 B.R. 724 (Bankr.E.D.Pa. 1990); In re Schmiel, 94 B.R. 373 (Bankr.E.D.Pa. 1988); In re Claussen, 118 B.R. 1009 (Bankr.D.S.D. 1990); In re Fisackerly, 114 B.R. 145 (Bankr.W.D.Tenn. 1990); In re Grier, 124 B.R. 229 (Bankr.W.D.Tex. 1991); In re Murray, 116 B.R. 473 (Bankr.E.D.Va. 1990); In re Blackwell, 115 B.R. 86 (Bankr.W.D.Va. 1990); In re Wisniewski, 109 B.R. 926 (Bankr.E.D.Wis. 1990); In re Pruitt, 107 B.R. 764 (Bankr.D.Wyo. 1989).
Reference
- Full Case Name
- In re Willis Boyd FRIEND and Emma Friend, Debtors. Leslie R. SELLERS v. Willis Boyd FRIEND
- Status
- Published