MarketGraphics Research Group, Inc. v. Berge, No. 18-6177 (6th Cir. 2020)Annotate this Case
David and his parents, Don and Martha, were named as defendants in an unfair competition lawsuit brought by MarketGraphics, a company with which Don had previously been associated. Before MarketGraphics could proceed to judgment, Don and Martha filed for Chapter 7 bankruptcy. When MarketGraphics obtained a judgment against David, he filed his own Chapter 7 proceedings. The MarketGraphics judgment included findings that the defendants “willfully or knowingly” violated the Tennessee Consumer Protection Act, willfully infringed upon MarketGraphics’s copyrighted works, acted in concert with Don to violate Don’s non-compete agreement with MarketGraphics, and wrongfully impaired goodwill among Memphis customers.
In David’s bankruptcy proceeding, MarketGraphics initiated adversary proceedings, asserting that its claim should be exempted from discharge under 11 U.S.C. 523(a)(6), which prevents a debtor from discharging claims for injuries he willfully and maliciously caused. The bankruptcy court denied MarketGraphics’s request. The Sixth Circuit affirmed. Nothing in the record of these proceedings or the proceedings for the underlying judgment supports a finding that David acted with the requisite intent under section 523(a)(6) to harm MarketGraphics. The court rejected MarketGraphics’s contention that it was precluded from reviewing that issue in the first instance. Even assuming that the common law claims facially demonstrate “willful and malicious” injury, the underlying judgment is too vague to carry preclusive effect.