Typically, bankruptcy courts allow debts to be discharged to offer relief to the “honest but unfortunate debtor,” according to Angela Littwin, a law professor and bankruptcy expert at the University of Texas.
However, there are legal exceptions that prevent certain debts from being discharged.
One exception is if the debt arises from a “willful and malicious injury by the debtor,” as claimed by the security guard’s attorneys. They allege that Shilo Sanders assaulted Darjean in 2015 while Darjean was attempting to confiscate Sanders’ phone at school, causing Darjean permanent and severe spinal and nerve injuries.
Darjean sued Sanders in 2016 to recover damages, but Sanders did not appear in court when the case was tried in Dallas in 2022. As a result, the court issued a default judgment stating that Sanders owed Darjean $11.89 million, which included $3 million for future physical impairment and $2 million for lost future earning capacity.
Darjean has vowed to continue pursuing the debt and is challenging its discharge in bankruptcy court.
The issue now is whether Sanders gets to relitigate the incident from 2015. He has disputed Darjean’s version of events, saying it was self-defense in response to Darjean’s aggression. His attorneys also have questioned whether Darjean’s injuries came from pre-existing conditions.
In the court filing from last week, Darjean’s attorneys argued that the law doesn’t allow him to relitigate a case that was already decided by another court, in this case the state court in Dallas.
What is the case against Shilo Sanders?
According to Darjean’s attorneys, this case is simple and should be decided quickly without the need for a trial. They note that the law doesn’t allow discharges for debt that stems from willful and malicious injuries. The state court in Texas already determined that “Shilo Sanders did in fact cause physical harm and injuries to John Darjean by assaulting him,” according to that court’s findings of fact. Therefore they say he is precluded from getting another attempt in court to dispute the underlying incident from 2015.
Darjean’s attorneys pointed out that Shilo Sanders had been actively defending himself against Darjean’s lawsuit for years before discontinuing his legal representation in 2020. During this time, Sanders made counterclaims, filed affirmative defenses, and provided testimony in a deposition.
“By engaging in litigation until trial and then failing to appear, the Defendant is attempting to avoid responsibility for what amounts to a first-degree felony of aggravated assault,” Darjean’s attorneys argued in their court filings last week.
An external legal expert found it perplexing that the situation had escalated to this point for Sanders.
“He’s now facing the worst possible outcomes in litigation,” said Mechele Dickerson, a law professor at the University of Texas. “He lost in civil court, there’s a judgment against him, and he might be barred from raising certain defenses or relitigating settled issues. Additionally, since the judgment involves willful and malicious conduct, he might not be able to discharge it through bankruptcy.”
Darjean’s attorneys are seeking a summary judgment that would declare Darjean’s claim non-dischargeable under federal bankruptcy law.
If the judge grants this ruling, Sanders would be obligated to pay the $11 million debt, although he could appeal.
If the judge denies the motion, the case could proceed to trial, where the facts from the 2015 incident would be contested.
“Typically, a non-dischargeability action involving alleged willful and malicious injury is not resolved by summary judgment due to disputed facts,” said John Rao, senior attorney at the National Consumer Law Center in Boston. “The critical issue here is whether the bankruptcy judge will give any preclusive effect to the state court’s default judgment.”
Darjean’s attorneys argued last week that Sanders should be barred from relitigating his counterclaims and defenses, particularly self-defense, due to the prior civil court decision in Texas. This is based on the principle of “collateral estoppel,” which prevents re-litigation of issues that were already conclusively determined in a previous case, according to the Legal Information Institute.
What comes next in Sanders bankruptcy case?
Sanders’ attorneys have argued that there is nothing in the final judgment in the Texas state court or its findings of fact that satisfy willful and malicious intent in this bankruptcy case, according to the court filing.
It’s up to the judge to decide who’s right, and there is no timeline scheduled for when the judge will rule on summary judgment.
Darjean has two active complaints against Sanders that seek to prevent him from getting out of his debt to him, including this one that is headed toward a summary judgment ruling. The other complaint is seeking to prevent a discharge based on other arguments, including that Shilo Sanders improperly hid or omitted his assets from his required bankruptcy disclosures.
BIG 12
Shilo Sanders Accused of Trying to Avoid Responsibility in Bankruptcy Case
A recent court filing against Colorado defensive back Shilo Sanders argues why his substantial debt to a former security guard should not be discharged.
This week, Shilo Sanders arrived at Colorado’s preseason football camp in Boulder with two major issues looming over his final college season:
∎ Can he help lead the Buffaloes to a bowl game after they fell short last year in his father Deion Sanders’ inaugural season as head coach?
∎ Will he be relieved of the $11 million debt owed to a former Dallas security guard after filing for bankruptcy last October?
Both issues carry significant weight for the 24-year-old player with NFL potential. However, the resolution of the debt matter may come sooner than Sanders hopes. Last week, John Darjean’s attorneys renewed their argument in court, claiming that Sanders should be held responsible for an alleged 2015 assault on Darjean, who was trying to confiscate Sanders’ phone at the time.
“If the Defendant (Sanders) is permitted to relitigate this issue, he is effectively creating a loophole to avoid accountability for assault,” the security guard’s attorneys stated in recent bankruptcy court filings.
A federal bankruptcy judge may soon rule on this matter with a summary judgment that could derail Sanders’ bankruptcy case and leave him liable for the debt. This decision is pivotal in a complex case. Here’s the current status following the recent filing:
The Effort to Erase Shilo Sanders’ Debt
Sanders filed for Chapter 7 bankruptcy last year aiming to halt Darjean’s debt collection efforts and have the debt erased, seeking “a fresh start free from the oppressive burden of his debts,” as his attorneys have argued.
Generally, bankruptcy courts allow for debt discharge to offer relief to the “honest but unfortunate debtor,” according to Angela Littwin, a law professor and bankruptcy expert at the University of Texas.
However, exceptions exist, particularly for debts arising from “willful and malicious injury by the debtor,” as claimed by the security guard’s attorneys. They argue that Sanders’ assault on Darjean in 2015 resulted in severe and permanent injuries to Darjean.
Darjean initially sued Sanders in 2016, and after Sanders failed to appear for the trial in Dallas in 2022, the court issued a default judgment requiring Sanders to pay $11.89 million, including $3 million for future physical impairment and $2 million for lost future earnings.
Darjean is now challenging the discharge of this debt in bankruptcy court.
The Case Against Shilo Sanders
Darjean’s attorneys argue that the case should be resolved quickly without a trial, noting that the law excludes discharge for debts resulting from willful and malicious injuries. They emphasize that the Texas state court has already determined Sanders caused physical harm to Darjean, making him ineligible to dispute the matter further in bankruptcy court.
They also pointed out that Sanders actively defended himself until he dropped his attorneys in 2020.
By participating in litigation and then failing to appear for the trial, Sanders is accused of attempting to avoid responsibility for what amounts to aggravated assault.
Legal experts find it perplexing that the case has progressed to this stage. Mechele Dickerson, a law professor at the University of Texas, commented that Sanders is facing severe consequences in litigation, including potentially being barred from raising defenses and possibly unable to discharge the debt in bankruptcy due to its nature.
Next Steps in Sanders’ Bankruptcy Case
Darjean’s attorneys are seeking a summary judgment to declare Darjean’s claim non-dischargeable under federal bankruptcy law. If granted, Sanders would be liable for the $11 million debt, although he could appeal. If denied, the case might proceed to trial, where the 2015 incident could be further contested.
John Rao, senior attorney at the National Consumer Law Center, noted that while non-dischargeability actions are generally not resolved by summary judgment due to factual disputes, the key issue will be whether the bankruptcy judge will recognize the state court’s default judgment.
Darjean’s attorneys argue that Sanders is barred from relitigating issues decided by the Texas court under the principle of “collateral estoppel,” which prevents re-litigation of conclusively decided issues.
Sanders’ attorneys argue that the Texas court’s judgment does not meet the criteria for willful and malicious intent required for non-dischargeability.
The judge’s decision on this matter is pending, with no set timeline for resolution.
In addition to this case, Darjean has another complaint seeking to prevent the discharge of debt based on allegations that Sanders improperly concealed assets in his bankruptcy filings.
Sanders, who was Colorado’s leading tackler last season, downplayed the situation at the Big 12 Conference media days in Las Vegas, stating, “At the end of the day, everybody is going to know the truth about everything.”
Colorado’s season opener is scheduled for August 29 at home against North Dakota State.
