The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge
Tuesday, 10 May, 2011 10:37:11 AM
Clerk, U.S. District Court, ILCD
This is an appeal from an Order entered by the United States Bankruptcy Court for the Central District of Illinois (Bankruptcy Case No. 10-90105) brought pursuant to 28 U.S.C. § 158(a). Following this court's careful review, this court affirms the Order of the Bankruptcy Court.
On January 22, 2010, the Debtor, Jamie Jo Monke, filed a chapter 7 bankruptcy petition in the United States Bankruptcy Court, Central District of Illinois. In the petition, the Debtor stated that her only source of income was $2,147.00 per month from social security disability. On April 23, 2010, General Medicine, P.C. (General Medicine), a creditor of the Debtor, filed an adversary complaint seeking a determination of non-dischargeability of its debt under 11 U.S.C. § 523(a)(6). In its complaint, General Medicine alleged that, on July 27, 2004, the Debtor executed an employment agreement lasting a term of not less than two years whereby the Debtor was hired as a physician to provide medical services on behalf of General Medicine at nursing homes where General Medicine contracted to staff medical personnel. General Medicine attached a copy of the employment contract to the complaint. General Medicine further alleged that the Debtor willfully and unilaterally ceased her employment on February 28, 2005. General Medicine alleged that the Debtor breached the agreement by failing to continue to provide care to patients for the balance of her term of employment or until General Medicine could hire a replacement physician. General Medicine also alleged that it could not find a replacement physician and, as a direct and proximate cause thereof, it suffered damages as a result of loss of income arising from the Debtor's breach of the employment agreement. On May 24, 2010, the Debtor filed a Motion to Dismiss for Failure to State a Claim. United States Bankruptcy Judge Gerald D. Fines granted the Motion on June 24, 2010.
On July 15, 2010, General Medicine file an Amended Adversary Complaint Objecting to Discharge. The Amended Complaint added an allegation that the Debtor's breach of the employment agreement "was willful and malicious, in that said damages suffered by [General Medicine] was either intended by [the Debtor], or [the Debtor] was substantially certain said damages would occur as a result of [the Debtor's] failure to continue to provide services." General Medicine stated that the debt should not be discharged pursuant to 11 U.S.C. § 523(a)(6).
On August 26, 2010, the Debtor filed a Second Motion to Dismiss. The Debtor argued that the Amended Complaint alleged no additional facts in support of General Medicine's claims and merely added an additional legal conclusion. The Debtor argued that General Medicine had again failed to state any facts which would justify denying the Debtor's discharge of the debt.
A hearing was held on September 23, 1010, and Judge Fines granted the Debtor's Second Motion to Dismiss. Judge Fines stated: I think this is breach of contract. I don't think it's a 523(a)(6) malicious injury type case. So under Rule 7052 of the Rules of Bankruptcy Procedure, that's my finding. I'm going to deny - - or I'm going to allow the second motion to dismiss. I just don't think that there is a malicious injury case here. And having observed the [Debtor] on a few occasions, I don't know what the recovery would be if you got a judgment.
On October 6, 2010, General Medicine filed a Notice of Appeal and appealed Judge Fines' Order to this court.
When a party appeals a bankruptcy court's order, the bankruptcy court's conclusions of law are reviewed under a de novo standard and its findings of fact are reviewed for clear error. Freeland v. Enodis Corp., 540 F.3d 721, 729 (7th Cir. 2008). Therefore, this court reviews de novo the dismissal of the amended adversary complaint for ...