The courts are divided on whether a contempt citation for violation of a state court order automatically results in a nondischargeable debt for a “willful and malicious” injury under Section 523(a)(6).

Bankruptcy Judge C. Kathryn Preston of Columbus, Ohio, took sides with the Ninth Circuit Bankruptcy Appellate Panel by holding that contempt of a court order does not result in a nondischargeable debt per se. In her Aug. 15 opinion, she concluded that collateral estoppel, or issue preclusion, could not apply because Ohio law does not require willfulness or malice as a prerequisite to contempt.

A dog owner violated the condominium’s regulations precluding dogs from running free. The condominium got a state court order requiring the dogs to be kept on leashes. When the dog owner repeatedly violated the initial and subsequent orders, the condominium obtained an order of contempt that assessed $16,000 in sanctions.

After the dog owner filed a chapter 7 petition, the condominium filed a motion for summary judgment to declare the debt nondischargeable under Section 523(a)(6).

Judge Preston’s Aug. 15 opinion is a comprehensive analysis of the standards for showing “willful and malicious” injury. Because the case came to her on summary judgment, she focused on whether the contempt order conclusively established the constituents of a nondischargeable debt.

Judge Preston cited bankruptcy courts in other states holding that a contempt citation represents willful and malicious injury per se. Although she said the Sixth Circuit “has not definitively ruled on the question,” she cited the Ninth Circuit BAP’s In re Suarez opinion in 2009, 400 B.R. 732, for the proposition that contempt does not automatically give rise to a nondischargeable debt. She said that the Ninth Circuit BAP’s approach is “more consistent with the philosophy that exceptions to discharge are to be narrowly construed.”

Although nondischargeability did not result per se, Judge Preston went on to decide whether the principles of issue preclusion meant automatic victory for the condominium.

Because a court in Ohio can impose contempt without finding willfulness or maliciousness, Judge Preston held that issue preclusion did not apply.

Her opinion also appears to say that any findings in state court about willfulness or maliciousness could not be the basis for issue preclusion because those issues “were not necessary to the judgment.”