STAGEMAN, Bankruptcy Judge
A debt which arose because of the bankrupt's operation of a motor vehicle while intoxicated was in its nature provable; however, it was not in fact provable since it had not been liquidated. Thus, in its discretion, the bankruptcy court deferred the determination of dischargeability until the liquidation of the underlying claim in a state court action.
At the time the bankrupt filed his voluntary petition there was a lawsuit on file in state court charging him with operating his motor vehicle in a negligent manner and that because he was under the influence of intoxicants at the time his actions were so reckless as to be malicious. On April 27, 1977, the bankrupt was granted a discharge releasing him from "all dischargeable debts". The bankrupt's estate closed on September 6, 1978. On June 7, 1978, the bankrupt applied to the court to reopen the case for the purpose of having the dischargeability of the tort claim determined. The case was reopened. The plaintiff argued that the tort claim could not be discharged because it was not a provable debt within the meaning of the Bankruptcy Act.
Section 63a(7) of the Bankruptcy Act provides, in pertinent part, that the debts of a bankrupt are provable which are founded upon the right to recover damages in any "action for negligence". The gravamen in the state court complaint was neligence aggravated by the bankrupt's operation of a motor vehicle while intoxicated. Thus, the problem arises in the interpretation of the term "action for negligence". If the plaintiff's claim is based on an intentional tort it is not provable and not dischargeable in bankruptcy. The clear implication, noted the court, was that the bankrupt was guilty of wilful, wanton, and reckless conduct.
The court held that Congress did not intend, in Section 63a(7), to qualify the word negligent by terms like simple and ordinary so as to distinguish it from negligence that is wilful, wanton and reckless. Rather, a definition of neligence in its broadest sense was adopted to promote provability, and must be said to include the terms wilful, wanton, or reckless. Congress did not intend the phrase "actions for negligence" to mean something that would send the courts into the "half lit world of legal jargon" that lies between an ordinary negligent tort action and a positive intentional one. Thus, the court concluded that, absent a positive intent to do harm, intoxication in the operation of a motor vehicle constitutes only an aggravation of negligence. Thus, the subject matter of the state court action gave rise to a debt that, by its nature, was provable.
To say that the debt was by its nature provable, however, was not to say that it was provable. In fact, the claim was not provable since it had not been liquidated even though it otherwise met the requirements of Section 63a(7). Section 57d provides that an unliquidated claim is to be liquidated or reasonably estimated "in the manner and within the time directed by the court". This language grants the bankruptcy court the discretion to choose the most appropriate means of liquidating the claim. This may be by allowing another court of competent jurisdiction to proceed to that end, see In re Wood, CCH BANKRUPTCY L. REP. ¶ 66,328. Thus, the court deferred the determination of dischargeability until the liquidation of the underlying claim in the state court action. Consequently, the plaintiff's claim in the state court action can be made provable by liquidation for the purpose of considering the exceptions to a discharge set out in Section 17a.
It was true, noted the court, that Section 17c(2) purports to grant bankruptcy courts exclusive jurisdiction as to debts excepted from the operation of a discharge by, inter alia, Section 17a(8). Here, the claim fell within the purview of Section 17a(8), since it was, in effect, a claim for the "wilful and malicious injuries to the person or property of another". However, there is a proviso at the end of Section 17c(2) which states that no application (that is complaint to determine the dischargeability of a debt) need be filed for a debt except by clause (8) if a right to jury trial exists and a party to the action has timely demanded jury trial. Here, noted the court, a demand for jury trial was timely made in the state court action, therefore, the plaintiff had a right to proceed in that forum. On the other hand, the bankrupt had the right to bring the instant action to determine the dischargeability of the plaintiff's claim. Section 17c(1) provides that "the bankrupt . . . may file an application with the court for the determination of dischargeability of any debt". This amounts to a right to remove the state court action to the bankruptcy court.
As espoused in In re Wood, the law of the Eighth Circuit is that where a debt is not provable because it is unliquidated the bankruptcy court can choose the most appropriate means of liquidation, and in its discretion, permit the state court to perform that task. Thus, the court held that the plaintiff was rightfully conducting his suit in state court, that the bankrupt had a right to have the issue of dischargeability determined by the bankruptcy court, and that the bankruptcy court had the right to defer that decision until the claim is made provable through liquidation in the state court. See Secs. 17a(8) [§ 523(a)(6)] at ¶ 9232, 17c at ¶ 2153 et seq., 57d [§ 502(a)] at ¶ 9005 and 63a(7) at ¶ 2618.