LARRY LESSEN, Bankruptcy Judge
This proceeding is before the Court on the Plaintiffs' Motion for Summary Judgment. The Plaintiffs have filed a Supplement and Second Supplement to their original Motion for Summary Judgment. The Defendant opposes summary judgment.
The Plaintiffs seek summary judgment on counts alleging nondischargeability under 11 U.S.C. § 523(a)(2)(A) and 11 U.S.C. § 523(a)(6). They rely on collateral estoppel principles and findings made in a state court proceeding. The Plaintiffs and the Defendant were engaged in litigation in the Fayette County Circuit Court for several years over the ownership and operation of natural gas wells and a gas pipeline. The Plaintiffs in this adversary proceeding were the plaintiffs in the Fayette County case, and the Debtor was one of the defendants in the state court case. The Debtor's state court co-defendants included Questar Petroleum, Inc. (the Debtor was its president), Greg Bonelli, and Thomas Falese. The state court case included allegations of intentional interference with contractual relationships and intentional interference with property rights.
During the state court discovery process, the Debtor asserted that Questar owned the pipeline in question. However, the state court estopped the Debtor from asserting his ownership claim because he had previously stated in another deposition in a different case that he did not own the pipeline.
The state court subsequently granted summary judgment in favor of the Plaintiffs on the issue of intentional interference with property rights. The state court's order of August 13, 2001, provides in part as follows:
1. Judgment for all Plaintiffs on Count I (injunction) against all Defendants.
2. Judgment for all Plaintiffs on Count II (declaratory relief) against all Defendants.
3. Judgment for all Plaintiffs against all Defendants on Count IX (intentional interference with property rights). The court finds conduct of BONELLI in proceedings with assertion that BILLINGSLEY and QUESTAR had interest in pipeline after the BILLINGSLEY deposition in the NGPL case is interference with the contract and that the actions of FALESE and FALESE OIL in taking an assignment from QUESTAR and BILLINGSLEY is interference with property rights and as such Plaintiffs are entitled to summary judgment on Count IX against BONELLI, FALESE and FALESE OIL CO. To the extent no Motion for Summary Judgment is on file as to Count IX against BILLINGSLEY/QUESTAR, the court treats the Motion on the Pleadings as a summary judgment motion. Judgment is granted in favor of all Plaintiffs and against BILLINGSLEY and QUESTAR on Count IX by reason of the estoppel finding. Count IX judgment is on issue of liability. Compensatory and punitive damage to be determined by jury.
On August 15, 2001, the Debtor, along with all of the other defendants in the state court litigation, agreed to a Judgment Order wherein judgment was granted to the Plaintiffs on Count IX (intentional interference with property rights) and the Defendants were restrained from interfering with the Plaintiffs' operation of the wells and pipeline or asserting any ownership therein. The Defendants were required to make payments to Plaintiffs, to submit releases of liens and other claims, and to cooperate in clearing title to the well and pipeline. The Judgment Order specifically provided that "[a]ll defendants admit that their conduct is such that judgment is nondischargeable in bankruptcy", but the Order did not specify which section of § 523 would provide the basis for such nondischargeability.
The issue before the Court is whether the state court judgment is entitled to collateral estoppel effect on the issue of dischargeability pursuant to 11 U.S.C. § 523(a)(2)(A) and 523(a)(6).
Section 523(a)(2)(A) of the Bankruptcy Code provides that a discharge in bankruptcy does not discharge an individual debtor from any debt for money, property, or services to the extent obtained by false pretenses, a false representation, or actual fraud. 11 U.S.C. § 523(a)(2)(A). In order for a plaintiff to prevail under § 523(a)(2)(A), he or she must prove that (i) the debtor made false statements which he knew to be false, or which were made with such reckless disregard for the truth as to constitute willful misrepresentations; (ii) the debtor possessed the requisite scienter, i.e. he actually intended to deceive the plaintiff, and (iii) to his detriment, the plaintiff justifiably relied on the representations. Field v. Mans, 116 S.Ct. 437, 446 (1995); In re Mayer, 51 F.3d 670, 673 (7th Cir. 1995), cert. denied 116 S.Ct. 563 (1995); In re Sheridan, 57 F.3d 627, 635 (7th Cir. 1995); In re Scarlata, 979 F.2d 521, 525 (7th Cir. 1992). The plaintiff must prove each element by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 286-87 (1991).
In order to prevail under § 523(a)(6), a creditor must demonstrate by a preponderance of the evidence that the debtor desired to cause the injury complained of or that the debtor believed that the consequences of his actions were substantially certain to result from the debtor's acts. See In re Kidd, 219 B.R. 278 (Bankr.D.Mont. 1998); Grogan v. Garner, supra. It has been held that a debt is nondischargeable under § 523(a)(6) where a creditor demonstrates that the debtor desired to cause the injury complained of or that the debtor believed that harmful consequences were substantially certain to result from the debtor's acts. See In re Cox, 243 B.R. 713 (Bankr.N.D.Ill. 2000). A malicious injury has been defined as "a wrongful act done consciously and knowingly in the absence of just cause or excuse." In re Bossard, 74 B.R. 730 (Bankr.N.D.N.Y. 1987); In re Condict, 71 B.R. 485 (Bankr.N.D.Ill. 1987); In re Thirtyacre, 36 F.3d 697 (7th Cir. 1994). It has also been held that a malicious injury does not require ill will or specific intent to do harm. In re Arlington, 192 B.R. 494 (Bankr.N.D.Ill. 1996).
In order to prevail on a motion for summary judgment, plaintiffs must meet the statutory criteria set forth in Rule 56 of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056. Rule 56(c) states in part as follows:
[T]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). See also Dugan v. Smerwick Sewerage Co., 142 F.3d 398, 402 (7th Cir. 1998). The primary purpose for granting a summary judgment motion is to avoid unnecessary trials when there is no genuine issue of material fact in dispute. Trautvetter v. Quick, 916 F.2d 1140, 1147 (7th Cir. 1990). The burden is on the moving party to show that no genuine issue of material fact is in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-86; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). All reasonable inference drawn from the underlying facts must be viewed in a light most favorable to the party opposing the motion. Parkins v. Civil Constructors of Illinois, Inc., 163 F.3d 1027, 1032 (7th Cir. 1998). "Summary judgment is not an appropriate occasion for weighing the evidence; rather the inquiry is limited to determining if there is a genuine issue for trial." Lohorn v. Michal, 913 F.2d 327, 331 (7th Cir. 1990).
The doctrine of collateral estoppel (issue preclusion) applies to adversary proceedings brought pursuant to 11 U.S.C. § 523(a). Grogan v. Garner, supra, 498 U.S. at 284, n. 11. Under this doctrine, issues determined in a prior state court proceeding may not be re-litigated in the bankruptcy court. Stephan v. Rocky Mountain Chocolate Factory, 136 F.3d 1134, 1136 (7th Cir. 1998); Meyer v. Rigdon, 36 F.3d 1375, 1378 (7th Cir. 1994). However, the bankruptcy court has exclusive jurisdiction to determine the dischargeability of the debts. See 11 U.S.C. § 523(c)(1).
In the Seventh Circuit, four requirements must be met in order for collateral estoppel to apply:
1. the issue sought to be precluded must be the same as that involved in the prior litigation;
2. the issue must have been actually litigated;
3. the determination of the issue must have been essential to the final judgment; and
4. the party against whom estoppel is invoked must be fully represented in the prior action.
Meyer v. Rigdon, supra, 36 F.3d at 1379; Klingman v. Levinson, 831 F.2d 1292, 1295 (7th Cir. 1987).
The Bankruptcy Court is required to give an Illinois state court judgment the same full faith and credit as they have by law or usage in the Illinois courts. 28 U.S.C. § 1738. Accordingly, this Court is required to give preclusive effect to Illinois state court judgments whenever the Illinois courts would do so. In re Winston, 114 B.R. 566, 571 (Bankr.N.D.Ill. 1990).
The Court notes at the outset that Judge Fines entered summary judgment against Greg Bonelli, the Debtor's co-defendant in state court, based on collateral estoppel principles in an adversary proceeding under § 523(a)(6) in Mr. Bonelli's bankruptcy proceeding. Niemerg Gas Co. et al. v. Bonelli, No. 02-90928, Adv. No. 02-9045 (Bankr.C.D.Ill. Oct. 15, 2002). Mr. Bonelli did not defend the motion for summary judgment. Moreover, Mr. Bonelli and the Debtor did not commit the same acts, and the state court's findings regarding Mr. Bonelli and the Debtor are different. Under these circumstances, Bonelli is not relevant to this case.
Turning to the § 523(a)(2)(A) count, the Court notes that the Plaintiffs did not include the Debtor in the two specific counts of fraud in their state court complaint. Accordingly, the state court did not mention false statements or fraud in its judgment against the Debtor. At most, the state court found that the Debtor made inconsistent statements about ownership of a pipeline, and the court estopped the Debtor from asserting ownership of the pipeline. The inconsistent statements were made during litigation, not at the time of the events giving rise to the litigation. Moreover, there were no allegations or findings that the Plaintiffs detrimentally relied on the Debtor's statements.
As for the § 523(a)(6) allegation, the state court did not make any specific findings of willful and malicious conduct by the Debtor. The state court did specifically find that Mr. Bonelli's conduct constituted interference with the contract and that the actions of Mr. Falese constituted interference with property rights, but the court did not make a similar finding regarding the Debtor. The state court simply entered judgment against the Debtor "by reason of the estoppel finding." This conclusory finding does not support the conclusion that the Debtor's actions were willful and malicious under § 523(a)(6).
For the foregoing reasons, the Plaintiffs' Motion for Summary Judgment is denied.
This Opinion is to serve as Findings of Fact and Conclusions of Law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure.
See written Order.
ORDER
For the reasons set forth in an Opinion entered this day,
IT IS HEREBY ORDERED that the Plaintiffs' Motion for Summary Judgment be and is hereby denied.