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In Re Janet Hom

July 11, 2012

IN RE JANET HOM


BK Case No. 2:08-bk-27144 PC

The opinion of the court was delivered by: Honorable A. Howard Matz, U.S. District Judge

JS-6

CIVIL MINUTES - GENERAL

Present: The Honorable A. HOWARD MATZ, U.S. DISTRICT JUDGE

Stephen Montes Not Reported

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys NOT Present for Plaintiffs: Attorneys NOT Present for Defendants:

Proceedings: IN CHAMBERS (No Proceedings Held)

Amay's Bakery & Noodle Co. ("Amay") appeals the judgment of the bankruptcy court in favor of Amay's debtor, Janet Hom. The bankruptcy court concluded that Amay had failed to show that Hom's debt was non-dischargeable under § 523(a)(6) of the Bankruptcy Code. For the reasons stated below, the judgment of the bankruptcy court is REVERSED.

BACKGROUND

Hom's debt to Amay arises out of a prior state court action.*fn1 On October 10, 2008, the state court found that Janet Hom and her co-defendants were liable to Amay for the following reasons:

Defendants acted wilfully intentionally, and with malice with the intent and for the knowing purpose of violating Amay's rights by interfering with Amay's prospective economic advantage, engaging the (sic) unfair competition and violating the Uniform Trade Secrets Act as described hereinabove and in breaching and/or aiding and abetting the breaches of the fiduciary duty owned to Amay's.

(Record*fn2 ("R") at 447.)

Subsequently, on March 23, 2009, the state court entered judgment in favor of Amay and against the defendants, including Hom. The state court awarded Amay $2,510,149 in damages from the defendants. (R. at 459.)

Hom subsequently filed for bankruptcy.*fn3 Amay contends that Hom's judgment debt is non-dischargeable under the bankruptcy code. Section 523 of the Bankruptcy Code establishes that certain debts are non-dischargeable in bankruptcy. 11 U.S.C. § 523. As relevant to this case, § 523(a)(6) establishes as non-dischargeable any debt "for

and malicious injury by the debtor to another entity or to the property of another entity." ยง 523(a)(6). The malicious injury element is separate from the willful injury requirement. In re Su, 290 F.3d 1140, 1146--47 (9th Cir. 2002). Thus, to prevent the debt from ...


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