Sager v. Bennett (In re Bennett)

(Bankr. E.D. Ky. Jan. 7, 2015)

The bankruptcy court had found the debtor liable to her landlord for damage done to the leased property and held that liability nondischargeable under 11 U.S.C § 523(a)(6), because the debtor willfully and maliciously caused the damage. The court had also avoided a preferential transfer to the landlord, granting the debtor’s requested relief in her counterclaim. Here, the court holds that the landlord is entitled to recover its attorney fees as part of the nondischargeable debt. The Kentucky statute permits recovery of reasonable attorney fees when a tenant willfully breaches a lease. The court also holds that the landlord is entitled to set-off the preference liability against the nondischargeability judgment. Because the nondischargeability judgment and the preference judgment were both post-petition mutual obligations, set-off is permitted. Opinion below.

2015-01-07 – sager v bennett