Are debts incurred while driving under the influence of alcohol or drugs (DUI) dischargeable in bankruptcy?

11 Jan Are debts incurred while driving under the influence of alcohol or drugs (DUI) dischargeable in bankruptcy?

Don't drink and driveMany of the ideas for posts on Bankruptcy Law Network come from actual client’s situations. One BLN attorney will post a question to the group, and the others will chime in with their own experiences and opinions regarding the issue. This post is an example of that process in action.

I received a telephone call from a prospective client, who stated, “You are the third attorney I have called. I didn’t like what the other two said, so I’m calling you to be sure.” Specifically, he was interested in discharging a debt that was incurred as a result of an automobile crash. At the time of the collision, he was intoxicated, and ultimately convicted of Driving Under the Influence of Drugs or Alcohol (DUI).

The gentleman explained that the other attorneys had told him the debt was not dischargeable in bankruptcy, and at first blush, I agreed. After all, §523(a)(9) of the Bankruptcy Code states that debts for personal injury or death caused by driving while intoxicated or under the influence of drugs are not dischargeable.

However, he went on to explain that the debt was solely for the property damage caused to an unoccupied automobile. Since §523(a)(9) specifically mentioned debts for personal injury, I thought the debt may be dischargeable, except that §523(a)(6) covers property damage for willful or malicious injury.

So, the question became, “Is a debt for damage done to another’s property as a result of a DUI considered either willful or malicious?” Clearly, drinking and driving is not malicious, but it is willful conduct.

Illinois bankruptcy attorney, Andy Miofsky, provided me with a case from the Supreme Court of the United States, which specifically addresses the issue. In delivering the unanimous opinion of the Court in the case of Kawaauhau Et Vir v. Geiger, 523 U.S. 57 (1998), Justice Ginsburg stated that while a doctor’s negligent and reckless conduct was willful, he never intended for his patient to be damaged as a result of his willful conduct. Therefore, the debt owed to his patient as a result of his malpractice was dischargeable in bankruptcy. The court drew a distinction between willfully reckless conduct that caused unintended damage versus willful conduct intended to inflict damage. The §523(a)(6) exception to discharge did not apply.

Similarly, in the case of a drunk driver, the driver willfully acted in a manner that resulted in property damage, but the damage to the property was unintentional. Therefore, a debt incurred from property damage caused by a drunk driver is dischargeable in bankruptcy.

What is interesting about this analysis is the seemingly arbitrary nature of the Bankruptcy Code. If a drunk driver causes personal injury, the Code specifically makes his debt non-dischargeable, but if a doctor’s negligence causes the same exact injury, the doctor can wipe out his obligation to his victim. This is counter-intuitive because there is an even greater obligation owed by a doctor to his patient who specifically entrusts his or her well being with the medical expert. The doctor holds himself out to the patient, even markets himself to the patient, as an expert in a particular medical discipline. The doctor creates a fiduciary relationship with his patient, and then he betrays that relationship by acting in a reckless manner. In the eyes of this author, the doctor’s transgression is far worse than the drunk driver.

So, this begs the question, “Why the distinction?” This cynical author thinks the answer is simple. Lobbyists for M.A.D.D. or the like were able to convince lawmakers to carve out an exception to discharge for the drunk driver, and the A.M.A. lobbyist was able to avoid the same standard for doctors.

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Chip Parker is the managing partner of Parker & DuFresne, P.A., where he represents Northeast Florida businesses and consumers facing bankruptcy, and homeowners facing foreclosure. His firm files more homeowners in the Mortgage Modification Mediation Program than any other law firm in Northeast Florida. Parker is the recipient of Jacksonville Area Legal Aid's prestigious Award for Outstanding Pro Bono Service. Mr. Parker is an active member of the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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