In In re Townsend, No. 15-43411-CEC, 2016 WL 2927522 (Bankr. E.D.N.Y. May 16, 2016), the court granted plaintiff’s motion for summary judgment that a judgment entered on a $450,000 jury verdict in Ganci v. U.S. Limousine Service and Raymond Townsend, EDNY 10-cv-3027, was non-dischargeable under the Bankruptcy Code.
The Bankruptcy Code “exempts from discharge any debt for willful and malicious injury by the debtor to another entity or to the property of another entity.”
The court held that the jury’s findings that defendant directly subjected plaintiff to a sexual harassment and a hostile work environment established the elements of non-dischargeability under the Code.
As to the “willful” prong, the court explained:
The claim that forms the basis of Defendant’s liability in the District Court Action is creation of a hostile work environment under Title VII and the NYSHRL. To prevail on a claim of a hostile work environment, a plaintiff must show that the workplace is permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment. Rivera v. Rochester Genesee Reg’l Transp. Auth., 743 F.3d 11, 20 (2d Cir.2014) (internal quotations omitted). This standard applies to federal claims under Title VII and state law claims under the NYSHRL. Id. and n. 4. This standard lacks any requirement that the abuse be specifically directed at the victim. As a result, a finding that a defendant has created a hostile work environment does not per se lead to a finding of willfulness. See Goldberg, 487 B.R. at 127 (finding no explicit intent requirement under the NYSHRL).
The jury’s factual findings, however, establish that Defendant directly subjected Plaintiff to offensive acts or statements about sex. The jury further found that the Plaintiff did not directly or indirectly invite or solicit such statements. “[E]xposure to unwelcome sexual conduct, like an advancing of one’s prurient interests to the point of harassment, is the injury that a sexual harassment victim suffers….” Basile v. Spagnola (In re Spagnola), 473 B.R. 518, 523 (Bankr.S.D.N.Y.2012). Further, “where an employer’s deliberate conduct is found to constitute unlawful discrimination against an individual employee, it necessarily follows that such intent was for the purpose of causing injury.” Goldberg, 487 B.R. at 127. Where, as in this case, the discriminatory conduct is sexual harassment specifically directed at the victim, and it has been found that the victim did not directly or indirectly invite or solicit such conduct, these facts are sufficient to establish that the defendant acted with the intent to cause the injury. Therefore, the factual findings from the District Court Action are sufficient to show that Defendant acted willfully with respect to Plaintiff’s injury.
As to the “malicious” prong:
To establish a claim of hostile work environment, a plaintiff must show that the work environment is “permeated” with acts of discrimination that are “severe” or “pervasive.” Rivera, 743 F.3d at 20. Thus, essential to the jury’s findings was the conclusion that Defendant had subjected Plaintiff to “severe” or “pervasive” harassment. This finding, together with the finding that Defendant’s offensive acts objectively created a hostile work environment and that Plaintiff did not directly or indirectly invite or solicit them, is sufficient to establish that Defendant’s actions were “wrongful and without just cause or excuse. …
Based on the jury’s findings in the District Court Action, no inference can be drawn that Defendant reasonably believed Plaintiff welcomed his acts or statements, or reasonably believed that his actions did not create a hostile work environment for Plaintiff. As a result, the factual findings in the District Court Action are sufficient to show that Defendant’s conduct was malicious: he subjected Plaintiff to severe or pervasive sexual harassment and his wrongful behavior was “without just cause or excuse.”