The U.S. Court of Appeals for the Ninth Circuit has held that a nondischargeable debt for malicious and willful injury must include proof of tortious conduct. An intentional breach of contract does not suffice.
The U.S. Bankruptcy Code, 11 U.S.C. § 523(a)(6), excepts from a bankruptcy discharge those debts incurred as a result of willful and malicious injury to another. In overruling the district court and the bankruptcy court, the Ninth Circuit Court of Appeals held that some form of tortious conduct recognized under state law is required for a creditor to meet its burden of proof that a debt is nondischargeable. Further, the Ninth Circuit specified that the tortious conduct required extends beyond the intention to breach a contract without just cause.
The court concluded that tortious conduct is defined by reference to state law, and also reasoned that the requirement for tortious conduct is consistent with the fundamental policy of federal bankruptcy law, which is to provide an honest debtor with a fresh start.