JAMES COACHYS, Bankruptcy Judge.
This matter comes before the Court on Hoosier Foods d/b/a Crown Vending's ("Crown") Motion for Summary Judgment. For the reasons stated below, the Court grants Crown's Motion for Summary Judgment.
Findings of Fact
1. On September 3, 2002, Crown obtained a default judgment against the Debtors in the amount of $56,963.46, consisting of treble damages, attorney fees, travel expense, and costs (the "Judgment").
2. The Judgment was based on a Complaint in which Crown alleged that Debtor Shanna Horning, while employed by Crown, converted $18,987.82 from Crown in violation of Indiana Code § 34-24-3-1.
3. The Complaint further alleged that Shanna acted in collusion with her husband, Debtor George Horning.
4. The Debtors were also charged with various criminal offenses related to the alleged conversion.
5. On March 25, 2002, the Debtors entered into negotiated plea agreements (the "Plea Agreement(s)") with respect to the charges against them. Such Plea Agreements were filed with the state court on August 26, 2002.
6. In his Plea Agreement, George agreed to plead guilty to Theft, as a Class D felony, and pay restitution in the amount of $6,264.34. In turn, the State agreed to dismiss all remaining counts against him.
7. On September 5, 2002, the state court entered judgment against George and sentenced him consistent with the Plea Agreement.
8. In her Plea Agreement, Shanna agreed to plead guilty to Forgery, as a Class C felony, and Theft, as a Class D felony. She also agreed to pay restitution in the amount of $6,264.34. In return, the State agreed to dismiss counts all remaining counts against her.
9. On September 5, 2002, the Court entered judgment against Shanna and sentenced her consistent with the Plea Agreement.
10. The Debtors commenced a case under Chapter 7 of the United States Bankruptcy Code (the "Code") on July 17, 2002.
11. Crown timely filed their Complaint to Determine Dischargeability of Debts on October 11, 2002. They then filed a Motion for Summary Judgment, to which the Debtors failed to respond.
Conclusions of Law
1. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(H).
2. Under Federal Rule of Civil Procedure 56(c), made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056, summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). With a motion for summary judgment, the burden rests on the moving party to demonstrate "that there is an absence of evidence to support the nonmoving party's case." Id. at 325. After the moving party demonstrates the absence of a genuine issue for trial, the responsibility shifts to the non-movant to "go beyond the pleadings" to cite evidence of a genuine factual dispute precluding summary judgment. Id. at 322-23. If the non-movant does not come forward with evidence that would reasonably permit the finder of fact to find in its favor on a material question, then the court must enter summary judgment against it. Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986)).
3. On summary judgment, Crown argues that there are no genuine issues of material fact and that it is entitled to judgment in its favor and against the Debtors as a matter of law. More specifically, Crown argues that the Debtors are precluded from relitigating the dispositive issue presented in this proceeding by virtue of the Plea Agreements and Judgment, that issue being whether the subject debt arose from the Debtors' "willful and malicious injury" to Crown and its property.
4. In applying the principals of res judicata, this Court looks to the substantive law of the state that issued the judgment, giving the state court judgment the same preclusive effect it would receive in the forum state. See Scarborough v. Fischer (In re Scarborough), 171 F.3d 638, 641 (8th Cir. 1999).
5. There are two categories of res judicata: claim preclusion and issue preclusion. Claim preclusion applies where a final judgment on the merits has been rendered which acts as a complete bar to a subsequent action on the same issue or claim between those parties and their privies. Northern Indiana Pub. Serv. Co. v. Sharp, 732 N.E.2d 848, 854 (Ind.Ct.App. 2000). Issue preclusion, also known as collateral estoppel, bars the subsequent relitigation of the same fact or issue where that fact or issue was necessarily adjudicated in a former suit and the same fact or issue is presented in a subsequent action. Id. Where issue preclusion applies, the previous judgment is conclusive only regarding those issues actually litigated and determined therein. Id.
6. The Indiana Supreme Court has adopted a two prong test for collateral estoppel: (1) whether the party against whom the prior judgment is pled had a full and fair opportunity to litigate the issue; and (2) whether it would be otherwise unfair under the circumstances to permit the use of collateral estoppel. Id. If the two elements are fulfilled, then the court may apply collateral estoppel to prevent relitigation of the same issue. Sullivan v. American Casualty, 605 N.E.2d 134, 138 (Ind. 1992).
7. This Court has not located any Indiana case law specifically addressing whether either default judgments or guilty pleas give rise to issue preclusion. See n. 1, infra. However, a trial court has a duty under Indiana law to evaluate the validity of every plea before accepting it. Stowers v. State (1977), 266 Ind. 403, 363 N.E.2d 978 (1977). Indiana Code § 35-35-1-3 outlines the parameters of this obligation in that it requires courts to ascertain the voluntariness of the plea and whether there is a factual basis for it.
8. In accepting a guilty plea, a court presumably establishes a factual basis for the crime charged and, in so doing, makes a judicial determination with respect to the essential elements of the crime. Consequently, this Court concludes that the factual basis requirement establish by Indiana law is sufficient to meet the "actually litigated" requirement of Indiana's issue preclusion standard.
The Court cannot make the same conclusion with respect to default judgments. Entry of a default judgment does not require the trial court to make any factual or legal conclusion other than that the defendant (a) is not an infant or incompetent and (b) did not timely answer or otherwise respond to the complaint. See Ind. T. R. 55. This does not constitute "actual litigation" under Indiana's standard for issue preclusion. The Court notes that there are Indiana cases stating that a "default judgment is a judgment on the merits for purposes of res judicata." See Eichenberger v. Eichenberger, 743 N.E.2d 370, 374 (Ind.Ct.App. 2001) (citing State Exchange Bank of Culver v. Teague, 495 N.E.2d 262, 266 (Ind.Ct.App. 1986) (citing Patterson v. State, 12 Ind. 86 (1859))). However, all of these cases (except Eichenberger) address claim — and not issue — preclusion and therefore distinguishable. Eichenberger did not involve a default judgment, and it is therefore not clear why the Court cited the above cases.
9. The Court must now determine whether convictions for theft and forgery constitute implicit findings that the debtors inflicted a "willful and malicious injury," as that phrase is used in Code § 523(a)(6), against Crown.
10. Section 523(a)(6) provides that those debts arising from "willful and malicious injury" are excepted from discharge. "Willful" and "malicious" are two distinct requirements that Crown, as the objecting party, must prove by a preponderance of the evidence. Scarborough, 171 F.3d at 641 (citations omitted).
11. Willful has been defined as "voluntary and intentional," BLACK'S LAW DICTIONARY 1593 (7th Ed. 1999), or as "headstrong and knowing." Miera, 926 F.2d 743-44 (citations omitted).
12. Malicious conduct has been defined as that which is "`targeted at the creditor . . . at least in the sense that the conduct is certain or almost certain to cause . . . harm.'" Scarborough, 171 F.3d at 641 (quoting id.).
13. The United States Supreme Court has held that the scope of the "willful and malicious injury" exception encompasses only those acts done with the actual intent to cause injury. Kawaauhau v. Geiger, 523 U.S. 57, 61, 118 S.Ct. 974, 977 (1998). As the Court noted, the exception is intended to cover "intentional torts," as distinguished from negligent or reckless torts. Id. ("Intentional torts generally require that the actor intend `the consequences of an act,' not simply `the act itself.'") (quoting Restatement (Second) of Torts § 8A, Comment a, p. 15 (1964)).
14. Under Indiana Code § 35-43-4-2, "[a] person who knowingly or intentionally exerts unauthorized control over property of another person with intent to deprive the other person of any part of its value or use, commits theft."
15. Under Indiana Code § 35-43-5-2, "[a] person who, with intent to defraud, makes or utters a written instrument in such a manner that it purports to have been made (1) by another person; (2) at another time; (3) with different provisions; or (4) by authority if one who did give authority commits forgery."
16. The offenses of forgery and theft fall under the "willful and malicious injury" exception in that they both require a finding that the defendant voluntary acted in a manner intended to cause harm to the victim.
17. Thus, the Court concludes that Debtors' commission of theft and, in Shanna's case, forgery, constitutes willful and malicious injury under Code § 523(a)(6).
18. Finally, the Court finds that it would not otherwise be unfair under the circumstances to permit the use of collateral estoppel. There is no evidence to suggest that the Debtors were coerced into entering the Plea Agreements or that they were not adequately advised of the consequences of entering their pleas. They have admitted engaging in the conduct at issue in Crown's nondischargeability complaint.
19. Having found that the Debtors are precluded, in light of their guilty pleas, from relitigating whether they actually committed these crimes, the Court must deem that any debt arising from the subject conduct, including the Judgment, is excepted from discharge under § 523(a)(6).
Pursuant to the Plea Agreements, they were not to be accepted unless the Debtors collectively paid $6,264.34 in restitution to Crown. Presumably, these amounts, if they were indeed paid, should be credited against Crown's civil Judgment against the Debtors. It remains up to the Debtors to make this argument in the context of Crown's collection efforts in state court.
20. The Court therefore grants Crown's Motion for Summary Judgment.
21. A judgment consistent with the above findings and conclusions has been entered contemporaneously herewith.