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UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ALASKA


In re Case No. K93-00249-HAR
In Chapter 7

In re PAUL CURTIS HOWELL,

Debtor     

    ADV PROC NO K93-00249-001-HAR
    (BANCAP No. 93-5060)

 

    MEMORANDUM DECISION DENYING
    AS 09.61.115 CIVIL PENALTIES TO KETCHIKAN CREDIT BUREAU
TERILYN TAYLOR and KETCHIKAN CREDIT BUREAU, INC.,

Plaintiffs     

v.

PAUL CURTIS HOWELL,

Defendant     



Plaintiffs filed a Motion for Judgment and Dismissal on June 6, 1994 (Docket Entry 20) in which Ketchikan Credit Bureau, Inc. (KCBI) requested the court to award nondischargeable civil penalties totaling $1,607.54 for 13 NSF checks issued by debtor. The court has previously ruled that the principal amount of the checks, $485.38, plus interest would be nondischargeable under § 523(a)(2)(A) of the Bankruptcy Code. The penalties are sought under AS 09.65.115, titled "Bad Check Civil Penalties." This state statute provides for a civil penalty against the issuer of a dishonored check of either $100 or three times the amount of the check, not to exceed $1,000 more than the amount of the check.

KBCI cites In re Adams, 761 F2d 1422 (9th Cir 1985) in support of the nondischargeability of a civil penalty. KCBI recognizes that Adams is a § 523(a)(6), willful and malicious injury case, whereas the Howell nondischargeability is based on fraud or misrepresentation to obtain property or services under § 523(a)(2)(A).

Adams at 1427-28 said that all liabilities from the willful and malicious injury, even punitive damages are nondischargeable under § 523(a)(6). KCBI argues "there is no apparent reason the same logic should not apply." The 9th Circuit does, however, draw a distinction. In In re Levy, 951 F2d 196, 198 (9th Cir 1991), the court said:

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    We find, however, that an examination of both the language of section 523(a)(2) and the structure established in section 523 as a whole supports a conclusion that section 523(a)(2), unlike sections 523(a)(4) and 523(a)(6), does not bar discharge of punitive damages.
Therefore, the final judgment will not award the civil penalty to KCBI.

    DATED: July 22, 1994

                HERBERT A. ROSS
                U.S. Bankruptcy Judge