PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 22-1762

In re: LEE ANDREW HILGARTNER,

Debtor.

YASUKO YAGI,

Plaintiff - Appellee,

v.

LEE ANDREW HILGARTNER,

Defendant - Appellant.

No. 22-1778

In re: LEE ANDREW HILGARTNER,

Debtor.

YASUKO YAGI,

Plaintiff - Appellee,

v.

LEE ANDREW HILGARTNER,

Defendant - Appellant. USCA4 Appeal: 22-1778 Doc: 34 Filed: 01/18/2024 Pg: 2 of 18

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Rossie D. Alston, Jr., District Judge. (1:21-cv-01179-RDA-TCB; 1:21-cv- 01123-RDA-TCB)

Argued: October 25, 2023 Decided: January 18, 2024

Before HARRIS and QUATTLEBAUM, Circuit Judges, and Kenneth D. BELL, United States District Judge for the Western District of North Carolina, sitting by designation.

Affirmed by published opinion. Judge Harris wrote the majority opinion, in which Judge Quattlebaum and Judge Bell joined.

James A. DeVita, LAW OFFICE OF JAMES A. DEVITA, Arlington, Virginia, for Appellant. Alfredo Acin, OFFIT KURMAN, P.C., Tysons Corner, Virginia, for Appellee.

2 USCA4 Appeal: 22-1778 Doc: 34 Filed: 01/18/2024 Pg: 3 of 18

PAMELA HARRIS, Circuit Judge:

The Bankruptcy Code excepts from discharge debts “for willful and malicious

injury” to another. 11 U.S.C. § 523(a)(6). The question in this case is whether and to what

extent money owed under a pre-suit settlement agreement arising from such injury falls

within the scope of § 523(a)(6). We agree with the district court that the debts at issue here

are non-dischargeable under § 523(a)(6) and therefore affirm its judgment.

I.

A.

To give debtors a “fresh start,” the Bankruptcy Code starts from a “presumption of

dischargeability.” In re Strack, 524 F.3d 493, 496–97 (4th Cir. 2008) (internal quotation

marks omitted). Under that presumption, “‘all legal obligations of the debtor, no matter

how remote or contingent’ are potentially dischargeable in bankruptcy.” Id. at 497 (quoting

H.R. Rep. No. 95-595, at 309 (1977)).

But there are exceptions to the general rule of dischargeability, set out by Congress

in 11 U.S.C. § 523(a). Id.; see Lamar, Archer & Cofrin, LLP v. Appling, 138 S. Ct. 1752,

1758 (2018). This case turns on one such exception, barring the discharge of “any debt . . .

for willful and malicious injury by the debtor to another entity or to the property of another

entity.” 11 U.S.C. § 523(a)(6). It is no longer disputed that the debtor here caused “willful

and malicious injury” within the meaning of that exception. Instead, the parties spar over

two questions: whether a settlement agreement entered to preempt litigation over a “willful

and malicious injury” creates a non-dischargeable “debt for” that injury; and, if so, whether

3 USCA4 Appeal: 22-1778 Doc: 34 Filed: 01/18/2024 Pg: 4 of 18

debts incurred in collecting on the settlement agreement are likewise non-dischargeable

under § 523(a)(6).

B.

In 2010, Lee Andrew Hilgart

Click Here to Read the rest of this document