A Court may decline to utilize issue preclusion based upon a prior Judgment (Bankruptcy Court - Montana - 2014)

A refresher on collateral estoppel in the 9th Circuit as it applies to dischargeability proceedings especially under 523(a)(6). The Court has discretion to decline to give issue preclusion effect to prior judgments in deference of countervailing considerations of fairness (In re Lopez, 367 B.R. 99, 108 (9th Cir. 2007)).  The Court declined to utilize such preclusion because the Plaintiff must prove willful and malicious injury.  The 9th Circuit has stated that Courts must separately analyze both the willful and malicious prongs.  As the underlying judgment did not analyze such prongs, the Court determined that a factual dispute has arisen in the adversary case and denied the motion for summary judgment.

In re Etzel

United States Bankruptcy Court for the District of Montana

June 19, 2014, Decided

Case No. 13-61353-11 Adv No. 14-00001