Malicious Acts, Undischarged Debts: A Lesson in Accountability

Background

‍Plaintiffs Corey Buzzard and Sheri Carr obtained a state court judgment against Debtor Amanda C. Ratliff for employment discrimination and retaliation. Ms. Buzzard was offered a position in the IT department of a company called ACR by Ms. Carr, an HR employee at ACR. Ms. Ratliff, the CEO of ACR directed Ms. Carr to rescind the employment offer to Ms. Buzzard upon becoming aware that Ms. Buzzard is a transgender woman. Ms. Carr contested such action and encouraged Ms. Ratliff to abide by Ohio law regarding protected classes.

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Ms. Ratliff was unmoved and proceeded with the rescission of Ms. Buzzard’s employment offer. Additionally, Ms. Ratliff went on to terminate Ms. Carr due to Ms. Carr’s hesitancy and discouragement to Ms. Ratliff regarding the rescission of Ms. Buzzard’s employment offer. Ms. Ratliff filed for Chapter 7 bankruptcy. Plaintiffs sought to exclude the state court judgment from discharge under 11 U.S.C. § 523(a)(6), arguing it was a debt for willful and malicious injury.

Analysis and Decision

‍In a masterful decision by Judge Mina Nami Khorrami of the Southern District of Ohio Bankruptcy Court, the court analyzed various legal factors. The action before the court was a Motion for Summary Judgment regarding the Adversary Complaint filed by Plaintiff Ms. Buzzard against Defendant/Debtor Amanda Ratliff in regard to the non-dischargeable nature of the state court Judgments entered against Ms. Ratliff as they amounted to intentional torts and are therefore non-dischargeable under 11 U.S.C. § 523(a)(6).

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The court reviewed several legal factors including the standards for determination of an adversary proceeding based on summary judgment, the finality of a State Court Judgment while damages are still being calculated and assessed, issue preclusion to prevent relitigating of facts and issues already established by another court, but the heart of the bankruptcy dispute was whether the debts arising from Ratliff’s conduct—rescinding a job offer to Ms. Buzzard solely because she is transgender, and firing Ms. Carr for objecting to that discrimination—could be wiped away, or whether they were “for willful and malicious injury” and thus non-dischargeable under 11 U.S.C. § 523(a)(6).

Judge Mina Nami Khorrami found that the state court’s detailed findings left no doubt: Ratliff’s actions were not only intentional but also malicious, causing severe harm to both plaintiffs. The court emphasized that “willful and malicious injury” means more than just intentional acts—it requires a deliberate invasion of another’s legal rights, done with conscious disregard for the consequences. Here, the discrimination and retaliation were found to be exactly that.

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The court rejected Ratliff’s arguments that employment discrimination should not count as “willful and malicious injury,” and that the size of the damages should allow for a bankruptcy “fresh start.” Instead, the court held that Congress deliberately excluded such debts from discharge, prioritizing the rights of those harmed by intentional misconduct over the debtor’s interest in a clean slate.

In Summary

‍The debts Ratliff owes to Buzzard and Carr—totaling millions in compensatory and punitive damages—cannot be erased in bankruptcy. The court’s message is clear: when harm is both willful and malicious, the law will not let bankruptcy serve as a refuge from accountability. It’s a great read with outstanding analysis of the law and the intention behind it. Please find it here.