Opinion

El ye □□ □□

SIGNED this 18th day of November, 2025. We)

BRNJAMIN A. KAHN

UNITED STATES BANKRUPTCY JUDGE

UNITED STATES BANKRUPTCY COURT

MIDDLE DISTRICT OF NORTH CAROLINA

GREENSBORO DIVISION

In re: )

)

James Lawrence Bryant, Jr., )

Sharon Renea Bryant, ) Chapter 7

) Case No. 25-10147

)

Debtors. )

□□□□□□□□□□□□□□□□□□□□□□□□

)

Eastwood Construction Partners, )

LLC dba Eastwood Homes, )

)

Plaintiff, )

)

Vv. ) Adv. No. 25-02009

)

James Lawrence Bryant, Jr., )

Sharon Renea Bryant, )

)

Defendants. )

)

ORDER DENYING DEFENDANTS’ MOTION TO DISMISS

This adversary proceeding came before the Court for hearing

on October 28, 2025, on the Motion to Dismiss, ECF No. 16, filed

by James L. Bryant Jr. and Sharon R. Bryant (collectively

“Defendants”) and the Brief in Opposition to Defendants’ Motion to

Dismiss filed by Eastwood Construction Partners, LLC

(“Plaintiff”). ECF No. 27 (the “Response”). At the hearing,

Counsel for Plaintiff and Defendants appeared. Defendants are

proceeding pro se. At the conclusion of the hearing, the Court

took this matter under advisement. For the reasons stated herein,

the Court will deny Defendants’ motion to dismiss.

JURISDICTION AND AUTHORITY

The district court has jurisdiction over this proceeding

under 28 U.S.C. § 1334(b). Under 28 U.S.C. §157, the United States

District Court for the Middle District of North Carolina has

referred this case and these proceedings to this Court by its Local

Rule 83.11. This is a statutorily core proceeding under 28 U.S.C.

§ 157(b), and the Court has constitutional authority to hear and

determine this proceeding by final order. See, e.g., In re

Dambowsky, 526 B.R. 590, 605 (Bankr. M.D.N.C. 2015); see also ECF

No. 17 (consenting to this Court entering final orders). Venue is

proper under 28 U.S.C. § 1409.

PROCEDURAL BACKGROUND

Plaintiff commenced this adversary proceeding on June 5,

2025, and thereafter timely filed an amended complaint under

Federal Rule of Civil Procedure 15(a)(1)(B), made applicable to

this adversary proceeding by Federal Rule of Bankruptcy Procedure

7015. ECF No. 3 (the “Amended Complaint”). Plaintiff seeks to

have the Court determine that a debt owed to Plaintiff from

Defendants is nondischargeable under 11 U.S.C. § 523(a)(6). Id.

Defendants moved to dismiss the Amended Complaint for failure

to state a claim on which relief can be granted, ECF No. 16, and

filed Supplemental Exhibits in Support of the motion. ECF No. 28.

The Court has liberally construed1 the motion, supplemental

exhibits, and Defendants’ statements on the record in open court.

Plaintiff filed a response to the motion on September 22, 2025.

ECF No. 27.

FACTUAL BACKGROUND2

On June 25, 2022, Plaintiff and Defendants contracted for the

purchase of residential real property in the Cottages at Piper

Village (“Piper Village”) in Randolph County North Carolina (the

“Contract”). ECF No. 3, ¶ 9. On February 9, 2023, Mr. Bryant

entered an Eastwood Homes model home property at Piper Village and

1 The Court must construe filings by pro se litigants liberally. See Haines v.

Kerner, 404 U.S. 519, 520 (1972).

2 The Court has accepted the factual allegations in the Amended Complaint, ECF

No. 3, as true for purposes of determining whether the Amended Complaint states

a claim under Fed. R. Civ. P. 12(b)(6), except as specifically noted herein,

with respect to those facts of which the Court may take judicial notice. See

Fed. R. Civ. P. 12(b)(6). “[A]court may take judicial notice of its own

records.” Watkins v. Wells Fargo Bank, No. CIV.A. 3:10-1004, 2011 WL 777895,

at *3 (S.D.W. Va. Feb. 28, 2011); see, e.g., Anderson v. Fed. Deposit Ins.

Corp., 918 F.2d 1139, 1141 n.1 (4th Cir. 1990) (finding that a district court

“should properly take judicial notice of its own records” at the motion to

dismiss stage); see also Fed. R. Evid. 201(c). “[B]oth the Supreme Court of

the United States and the Fourth Circuit have found that courts may take judicial

notice of items or matters in the public record, even at the 12(b)(6) stage of

a proceeding.” Watkins, 2011 WL 777895, at *3; see Papasan v. Allain, 478 U.S.

265, 268 n.1 (1986); Sec’y of State for Defence v. Trimble Navigation Ltd., 484

F.3d 700, 705 (4th Cir. 2007).

complained to Plaintiff’s sales agent about certain real covenants

and the Homeowners Association of Piper Village. Id. ¶

13. Plaintiff characterized Mr. Bryant’s actions as aggressive

and general counsel for Plaintiff, Allen Nason, emailed a Notice

of No Trespass to Mr. Bryant stating that Mr. Bryant was no longer

authorized to enter onto the Plaintiff’s property or approach any

of its employees within Piper Village, absent written approval.

Id.

Sometime in the middle of April 2023, Defendants placed, and

caused others to place, signs on their property, and at other

locations, that read “EASTWOOD SLAVE VILLAGE.” Id. ¶ 15.

Plaintiff further alleged that certain prospective buyers

commented on the signage and the negative environment it created.

Id. ¶ 16. Mr. Bryant began to approach potential buyers and

realtors viewing the available lots at Piper Village, allegedly

directing these potential buyers not to purchase homes there. Id.

¶ 17. On April 21, 2023, Mr. Nason contacted Mr. Bryant via email

requesting that he remove the signs which he represented to be in

violation of the Contract and certain real covenants. Id. ¶ 18.

Mr. Nason further demanded that Defendants desist spreading “false

and misleading information” about Plaintiff. Id. On or around

the same day, a customer of Plaintiff who was under contract to

purchase a home in Piper Village visited the neighborhood and

observed the signs, including the “EASTWOOD SLAVE VILLAGE” sign,

which raised concerns about the neighborhood to this customer.

Id. ¶ 19. Plaintiff alleges that Mr. Bryant’s interaction with

this customer caused her to “pull[] her contract and [that the

customer] did not purchase property in Piper Village.” Id.

Defendants allegedly planned a “Buyer Beware Campaign Rally” that

was scheduled to take place on their front lawn the next day, April

22, 2023. Id. ¶ 21. In advance of the rally, Mrs. Bryant made

the following post on TikTok captioned:

Everything that was suppose [sic] to be done in this

neighborhood legally is not being done and the builder,

[Plaintiff] nor the developer, TRENT ADAMS PROPERTIES

LLC, wants to do anything about it! This Saturday, at

12pm, we will be exposing their tails for the low down,

dirty businesses that they are!!! Jim Crow will not

pitch his . . . .

Id. ¶ 20. On the day of the rally, on or around 2:48 p.m., Mrs.

Bryant filmed, posted, and broadcasted the event on Facebook as a

live video. Id. During the rally, Mr. Bryant brandished a weapon

and remarked that “I got this sign out here in my yard and it says,

‘EASTWOOD SLAVE VILLAGE’ because I feel like a $400,000 slave.

Bought this nice house right here . . . $400,000 plus. But they

treating us like slaves out here.” Id. ¶¶ 23, 24. That same day,

Mrs. Bryant sent an email to various neighbors in Piper Village,

stating: “[i]n closing, we are winning the fight! One potential

buyer has already cancelled her contract to build and another is

strongly considering the same! We will continue to fight until

justice is done!” Id. ¶ 25. On April 24, 2023, Mr. Bryant

responded to Mr. Nason’s email that directed Defendants to remove

the “EASTWOOD SLAVE VILLAGE” sign, refusing to remove the sign and

asserting that the sign was in fact legal. Id. ¶ 26. That same

day, Counsel for Plaintiff sent a formal cease and desist letter

demanding Defendants halt all conduct directed at threatening or

harassing Plaintiff’s employees, agents or customers and any other

activity intended to harm Plaintiff, its character and good name,

its homes and its employees. Id. ¶ 27. On April 25, 2023, Mrs.

Bryant posted a photograph of the “EASTWOOD SLAVE VILLAGE” sign on

Facebook; Mrs. Bryant captioned the image with statements that she

believed that Mr. Bryant was being harassed by Plaintiff and their

attorneys merely because he spoke out against Plaintiff and their

mishandling and mistreatment of homeowners at Piper Village. Id.

¶ 28. On April 26, 2023, Mrs. Bryant made a Facebook post

advertising a rally planned for April 29, 2023, calling on

activists, pastors, evangelists and other leaders in Trinity N.C.,

to “stand against mistreatment mishandling, abuse of power and

prejudice!” Id. ¶ 29. The post included images of two signs one

reading “WE DESERVE BETTER,” and another titled “BUYER’S BEWARE.”

Id.

On April 27, 2023, Plaintiff filed a complaint along with a

motion for temporary restraining order against Defendants for

tortious interference with contract, interference with prospective

economic advantage, defamation, breach of contract, and unfair and

deceptive trade practices in the North Carolina Court of General

Justice (the “State Court”). Id. ¶ 31; see also ECF No. 3, Ex. A

(the “State Lawsuit”). On May 19, 2023, Defendants, proceeding

pro se, filed an answer and counterclaims, alleging breach of

contract, negligence, defamation, and unfair and deceptive trade

practices. ECF No. 3, ¶ 32. In the interim, Defendants initiated

their own suit in the District Court for the Middle District of

North Carolina. See James L. Bryant, Jr. and Sharon R. Bryant v.

Plaintiff Construction, LLC d/b/a Plaintiff Homes, 1:23 cv 637

(the “Federal Lawsuit”); ECF No. 3, ¶ 34. Plaintiff filed a Motion

to Dismiss Defendants’ counterclaims in the State Lawsuit, and on

November 22, 2023, the State Court granted Plaintiff’s Motion and

dismissed Defendants’ counterclaims for negligence, defamation,

and unfair and deceptive trade practices with prejudice leaving

only Defendants’ breach of contract counterclaim. ECF No. 3, ¶

33.

On December 28 and 29, 2023, Plaintiff and Defendants entered

and signed a Settlement Agreement intended to resolve both State

and Federal Lawsuits. Id. ¶¶ 35, 36. The Settlement Agreement

included a “Release by Eastwood” and a “No Admission of Liability”

clause. ECF No. 28, at 33-36.3 Under the terms of that agreement,

3 The “Release by Eastwood,” Clause reads as follows:

Other than with respect to any rights it may have under this

Agreement, [Plaintiff], for itself, and for its respective

Defendants executed a Confession of Judgment, in the amount of

$150,000.00, to remain confidential and in the care of Plaintiff

in the absence of a default by Defendants under the Settlement

Agreement and agreed to dismiss their counterclaims against

Plaintiff in the State Lawsuit as well as the Federal Lawsuit; in

return, Plaintiff paid Defendants $7,500.00. Id. ¶ 39; ECF No.

28, at 31.

On December 29, 2023, after receiving Plaintiff’s payment,

Defendants filed a notice of voluntary dismissal of their remaining

counterclaim for breach of contract in the State Lawsuit, id. ¶

trustees, insurers, agents, assigns, servants, employees, officers,

directors, members, representatives, . . . does hereby relinquish,

remise, release, and forever discharge the Defendants and their

respective representatives, trustees, assigns, heirs, and all other

persons, parties or corporations . . . from all liabilities, costs

claims, demands, damages, losses, causes of action and suits which

[Plaintiff] may now have or claim to have, or might hereafter have

or claim to have, whether same is known or not known at this time,

from the beginning of time to the date of the execution of this

Agreement arising out of or related to the allegations that were or

could have been set forth in the Lawsuits, such that all claims

that are or might be in controversy among the Parties in or related

to the Lawsuits are forever put to rest, it being the clear

intention of the Parties to forever discharge and release all past,

present and future claims against one another for any and all acts

or omissions alleged in the Lawsuits or that could have been alleged

in the Lawsuits and all consequences or claims potentially resulting

therefrom. ECF No. 28, at 33 (the “Eastwood Release”).

The “No Admission of Liability” Clause reads as follows:

Each Party understands and agrees that this Agreement is a

compromise and settlement of disputed claims, disputed accounting

records and interpretations, and disputed debt; that the provision

and acceptance of any benefits pursuant to this Agreement is

intended merely to avoid future cost of litigation among the

Parties. No provision of this Agreement shall be considered as

admissions by any Party of any liability or wrongdoing. ECF No.

28, at 35-36 (the “No Admission of Liability Clause”).

36, but did not dismiss the Federal lawsuit. Id. ¶ 41. Thus,

Plaintiff did not dismiss the State Lawsuit, and Plaintiff moved

to enforce the Settlement Agreement, asking the State Court: (1)

to order Defendants to dismiss the Federal Lawsuit; (2) to award

costs and fees to Plaintiff; and (3) to permit Plaintiff to file

the Confession of Judgment. Id. ¶ 42. The State Court granted

Plaintiff’s motion and ordered Defendants to dismiss the Federal

Lawsuit, pay $12,465.00 in attorneys’ fees and $116.48 in costs to

Plaintiff. Id. ¶ 43; ECF No. 3, Ex. B. The State Court also

directed Plaintiff to file the Confession of Judgment, and

Plaintiff thereafter did so. ECF No. 3, Ex. C. Almost a year

after the filing of the Confession of Judgment, Defendants filed

a voluntary petition under chapter 7 of title 11 on March 13, 2025.

In this proceeding, Plaintiff alleges that Defendants

deliberately, intentionally, and wrongfully interfered with

Plaintiff’s business by initiating a malicious and unlawful smear

campaign and harassing its owners, employees, and customers with

no purpose other than to damage Plaintiff’s business and

reputation. ECF No. 3, ¶ 46. Plaintiff contends that the debt

represented by the Confession of Judgment is non-dischargeable

under 11 U.S.C. § 523(a)(6).

Defendants argue that this adversary proceeding should be

dismissed because: (1) the general release clause in the parties’

Settlement Agreement prohibits the adversary proceeding; (2) the

Settlement Agreement’s no admission of liability clause

demonstrates the intent to fully resolve the dispute and prohibits

the adversary proceeding; (3) res judicata, collateral estoppel,

and judicial estoppel prevent the dischargeability claim from

being relitigated by this Court because the Settlement Agreement

was ruled enforceable by the State Court; (4) the Confession of

Judgement underlying Plaintiff’s debt is a nullity because certain

property (“Specified Property”), which was allegedly not sold on

account of Defendants’ interference, later was sold in September

2024 for $495,000.00, thereby fully mitigating Plaintiff’s

damages; and (5) the Amended Complaint fails to state a claim upon

which relief can be granted. ECF No. 16; ECF No. 30.

STANDARD OF REVIEW

Civil Procedure Rule 12(b)(6), made applicable to this

proceeding by Bankruptcy Rule 7012, requires dismissal of all or

part of a complaint if it “fail[s] to state a claim upon which

relief can be granted.” Fed. R. Civ. P. 12(b)(6); Fed. R. Bankr.

P. 7012. A complaint will survive a motion to dismiss if it

states, “sufficient factual matter, accepted as true, ‘to state a

claim to relief that is plausible on its face.’” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007)).

“[A] plaintiff is not required to plead facts that constitute

a prima facie case in order to survive a motion to dismiss” but is

simply required to make allegations sufficient “enough to raise a

right to relief above the speculative level.” Coleman v. Md. Ct.

of Appeals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 566 U.S. 30

(2012) (citing Twombly, 550 U.S. at 555). “[L]egal conclusions,

elements of a cause of action, and bare assertions devoid of

further factual enhancement” do not constitute well-plead facts

and are therefore disregarded. Nemet Chevrolet, Ltd. v.

Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009).

Ordinarily the merits of an affirmative defense are not determined

at the Rule 12(b)(6) stage.

But in the relatively rare circumstances where facts

sufficient to rule on an affirmative defense are alleged

in the complaint, the defense may be reached by a motion

to dismiss filed under Rule 12(b)(6). This principle

only applies, however, if all facts necessary to the

affirmative defense “clearly appear[]on the face of the

complaint.”

Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007)

(emphasis omitted) (quoting Richmond, Fredericksburg & Potomac R.

Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993)).

DISCUSSION

I. Neither the Settlement Agreement, nor the Eastwood Release

preclude Plaintiff’s claims in this adversary proceeding.

Defendants argue that the Settlement Agreement, coupled with

the broad language of the Eastwood Release, completely addresses

and releases all claims, including the nondischargeability action

brought by Plaintiff. ECF No. 28, at 33-36; ECF No. 30, at

00:04:00-00:05:15. In other words, the debt owed was not the

result of “willful and malicious injury,” it was merely the result

of a breach of the contractual settlement arrangement, using the

broadest possible language to release one another from “all past,

present and future claims . . . for any and all acts or omissions

alleged in the Lawsuit or that could have been alleged in the

Lawsuits and all consequences or claims potentially resulting

therefrom.” Id. Defendants further contend that the Settlement

Agreement and its full release and no admission of liability

clauses preclude the dischargeability claim raised in this

adversary proceeding.

Neither the Settlement Agreement, nor the release therein,

bars further inquiry into the underlying debt for purposes of

dischargeability. See Archer v. Warner, 538 U.S. 314, 321 (2003).

In Archer, the United States Supreme Court addressed whether §

523(a)(2)(A), which bars the discharge of a debt in bankruptcy “to

the extent” it is “for money . . . obtained by . . . false

pretenses, a false representation, or actual fraud,” applies when

a fraud claim is settled and memorialized in a settlement agreement

containing a full release. The Archer case arose out of this

Court. No. 96-10373C-7G; A.P. 97-2003, ECF No. 92. Although this

Court recognized a split among the cases on this issue, id. at 6-

7, this Court agreed with virtually identical arguments to those

raised by Defendants in this case. Finding that it was

“significant” that the broad language of the release in the

settlement agreement included claims “which the plaintiffs ‘might

otherwise hereafter have’ against the defendants,” id. at 9,

“th[is] [C]ourt conclude[d] that the plaintiffs effectively

released and extinguished the dischargeability claim which they

now seek to assert . . . .” Id. at 10. This Court therefore

dismissed the dischargeability action. Both the district court,

No. 1:99CV00924 (M.D.N.C. Sept. 27, 2000), and the United States

Court of Appeals for the Fourth Circuit affirmed. 283 F.3d 230

(4th Cir. 2002).

The Supreme Court reversed, holding that a bankruptcy court

is not limited to the four corners of the settlement agreement to

determine dischargeability despite an included broad release.

Instead, Congress intended the dischargeability determination to

take place in the bankruptcy court, “not to force it to occur

earlier in state court at a time when nondischargeability concerns

‘are not directly in issue and neither party has a full incentive

to litigate them.” 538 U.S. at 321 (quoting Brown v. Felsen, 442

U.S. 127, 134 (1979)). This is because a pre-suit settlement

resolving a non-dischargeable claim arises no less out of the

underlying tort than a debt memorialized in a post suit settlement;

what matters is the “true nature” of the underlying debt. Id.

(citing Brown, 442 U.S. at 138.

More recently the Fourth Circuit considered the effect of

Archer on debts “arising from” willful and malicious injuries and

extended the Supreme Court’s holding to cover putative claims under

this additional exception to discharge. See In re Hilgartner, 91

F.4th 186 (4th Cir. 2024). In Hilgartner, the Court held that for

purposes of § 523(a)(6), even if a potentially non-dischargeable

debt for “willful and malicious injury may have been reduced to a

settlement agreement . . . that does not change the nature of the

debt for dischargeability purposes.” Id. at 192 (citation

modified).

Archer and Hilgartner resolve the question presented in this

case and this Court is bound by those decisions. As in this case,

the broad language in the settlement agreement in Archer that

purportedly released any claims which the parties “might otherwise

hereafter have” against the defendant did not prevent the Court

from later determining whether the debt should be excepted from

discharge. Archer, 538 U.S. at 317. The same is true here.

Although the Eastwood Release may be broad, its breadth does not

limit the ability of the Court to consider whether the debt

embodied in the Settlement Agreement, and underlying Confession of

Judgment is for willful and malicious injury under § 523(a)(6).

II. The No Admission of Liability Clause does not preclude this

litigation and fails for the same reason as the General

Release.

Defendants argue that the No Admission of Liability Clause

“automatically renders [Plaintiff’s] claim for willful and

malicious injury void,” because it represents the parties’

intention to fully resolve their dispute. ECF No. 30, at 00:20:40-

00:21:12. To the extent that this argument was intended to provide

another avenue to dispute the Court’s ability to evaluate the

nature of the underlying alleged tort, i.e., – that the debt owed

was not the result of “willful and malicious injury,” it was merely

the result of a breach of the contractual arrangement to which

both parties agreed – this argument fails for the same reasons as

the release provision. This Court is not prohibited from

considering the nature of the underlying debt. It is the purview

of the Court to determine whether the debt embodied in the

Settlement Agreement, and underlying Confession of Judgment is for

willful and malicious injury under § 523(a)(6).4

III. The Plaintiff’s action is not barred by Res Judicata,

Collateral Estoppel, or Judicial Estoppel.

Defendants assert that a dischargeability claim for willful

and malicious injury cannot be raised in this adversary proceeding

4 In any event, the No Admission of Liability Clause is merely that—a provision

that prohibited the Settlement Agreement itself from constituting an admission

of liability by either party for the underlying resolved claims. It was not a

determination that no liability existed.

because such a claim is barred by res judicata, collateral

estoppel, or judicial estoppel. ECF No. 30, at 00:04:00-00:05:15.

Defendants argue that these doctrines prevent the litigation of

dischargeability which could have been litigated in state court.

While the Supreme Court has concluded that principles of res

judicata and collateral estoppel apply in dischargeability

proceedings in bankruptcy, see Grogan v. Garner, 498 U.S. 279, 284

(1991) (finding that a bankruptcy court may use a prior decision

by another court as the basis for a finding of nondischargeability

of debt so long as the standard of proof in the prior case was by

a preponderance of the evidence or higher), these principles do

not preclude the litigation to determine dischargeability of the

affected debt, as explained by Brown, Archer, and Hilgartner. The

dischargeability claim could not have been litigated in the state

court. It is a federal cause of action that arises in bankruptcy

and therefore did not exist prior to Defendants’ chapter 7 case.

11 U.S.C. § 523(a)(6); see also In re Hight, No. 94-12323C-7D,

2001 WL 1699694, at *1 (Bankr. M.D.N.C. Feb. 26, 2001) (noting

that the effect of § 523(c) “is that the bankruptcy court has

exclusive jurisdiction to determine the dischargeability of . . .

debts for willful and malicious injury or damage by the debtor [§

523(a)(6)]”); In re McDonald, No. 13-10663, 2014 WL 6839451, at *2

(Bankr. M.D.N.C. Dec. 3, 2014) (holding that a dischargeability

defendant’s reliance on res judicata and full faith and credit was

misplaced “[b]ecause nondischargeability of a debt is an entirely

separate determination with its own elements under § 523 which

require more than the establishment of liability, principles of

res judicata do not apply (i.e., no determination of

dischargeability was made”) (quoting In re Berr, 172 B.R. 299, 305

n.4 (B.A.P. 9th Cir. 1994)). Therefore, although the existence of

the debt is not a claim that can be re-adjudicated by this Court,

see In re Heckert, 272 F.3d 253, 259-60 (4th Cir. 2001), the issue

of dischargeability remains and must be litigated. That claim

could not have been litigated in the State Lawsuit. As with

settlement agreements, the bankruptcy court is permitted to

determine the dischargeability of a debt represented by a

prepetition state court judgment. See, e.g., Brown, 442 U.S. at

128; Heckert, 272 F.3d at 257 (“when a prior state court judgment

is the debt at issue, . . . [a]ll the bankruptcy court is called

upon, or authorized to do, is to determine whether or not the state

judgment is dischargeable”).

IV. This Court may not relitigate the amount established in

the State Court.

Next, Defendants seek a determination that the underlying

Confession of Judgment lacks merit because certain Specified

Property, which was allegedly not sold on account of the

Defendants’ interference, was sold in September 2024 for

$495,000.00, and therefore the damages underlying the Confession

of Judgment should be disregarded. ECF No. 16. Thus, the issue

Defendants next raise is whether this Court is required to give

full faith and credit to the state determination as to the amount

of the debt.

The amount of the claim is res judicata as to the debt in

controversy. Heckert, 272 F.3d at 257-58 (holding that the

bankruptcy court may not enter its own monetary judgment where the

state court has done so prior to the bankruptcy; the bankruptcy

court is bound by res judicata as a matter of full faith and credit

with respect to the amount and validity of the debt). State court

judgments receive the full faith and credit promised by the

Constitution and therefore preclude relitigating the judgment in

federal court under Constitution, art. IV, § 1 and 28 U.S.C. §

1738, safeguards of efficiency and finality of litigation. See In

re Adams, 151 F.4th 144, 152 (3d Cir. 2025) (as to the

constitutional protection). To assess the extent of preclusion,

federal courts “apply the [judgment] state’s law of collateral

estoppel.” See In re Caswell, 605 B.R. 401, 410-11 (Bankr.

M.D.N.C. 2019) (citation modified). N.C. Rule 68.1(e) provides

that a valid confession of judgment has the same effect as other

judgments and therefore may be enforced in the same manner. N.C.

Gen. Stat. § 1A-1, R. 68.1(e). However, no judgment of confession

shall be held to be issue preclusive as to any fact in any civil

action except in an action on the judgement to confess. Id.

Although a confession of judgment is not determinative of any

particular fact in a subsequent action, it is preclusive with

respect to the liability on the claim. See Thomas M. McInnis &

Assocs., Inc. v. Hall, 318 N.C. 421, 428 (1986). In other words,

while factual issues may be disputed, the amount of a judgment, as

a matter of law, is precluded from relitigation by the existence

of a valid confession of judgment. Cf. Sartin v. Macik, 535 F.3d

284 (4th Cir. 2008) (explaining that default judgments do not have

collateral estoppel effect under North Carolina law, but do possess

res judicata effect); and Heckert, 272 F.3d, at 257 (“bankruptcy

court’s entry of its own money judgment to replace the state court

judgment is barred by res judicata . . . as a matter of full faith

and credit, under 28 U.S.C. § 1738”).

Here, Defendants attempt to challenge the amount of the debt

owed to Plaintiff, but the establishment of the debt by the

Confession of Judgment must be accorded full faith and Credit under

N.C. Gen. Stat. § 1A-1, R. 68.1(e) and 28 U.S.C. § 1738.

Defendants’ argument is specifically precluded, and they cannot

re-litigate the amount of the debt in this Court.

The inquiry nevertheless does not end there, even if the

Confession of Judgment must be afforded full faith and credit, it

is the responsibility of this Court to determine whether

Defendants’ actions were willful and malicious as contemplated

under federal law and whether and to what extent the damages were

caused by the willful and malicious injury as contemplated by 11

U.S.C. § 523(a)(6).

V. Plaintiff states a plausible claim under § 523(a)(6).

The Amended Complaint contains sufficient allegations, taken

as true and construed in a light most favorable to Plaintiff as

the non-moving party, to state a plausible claim for willful and

malicious injury as contemplated by § 523(a)(6). Section

523(a)(6) excepts from discharge debts resulting from “willful and

malicious injury by the debtor to another entity or to the property

of another entity.” 11 U.S.C. § 523(a)(6). The party raising a

§ 523(a)(6) challenge must show “(1) the debtor caused an injury;

(2) the debtor’s actions were willful; and (3) that the debtor’s

actions were malicious.” In re Wooten, 423 B.R. 108, 128 (Bankr.

E.D. Va. 2010) (quoting In re Sparrow, 306 B.R. 812, 834 (Bankr.

E.D. Va. 2003)) (internal quotation marks omitted); see also Choi

v. Hyon, No. 22-2240, 2023 WL 7381547, at *1 (4th Cir. Nov. 8,

2023).

Section 523(a)(6) applies only to “acts done with the actual

intent to cause injury.” In re Duncan, 448 F.3d 725, 729 (4th

Cir. 2006) (citation modified). “Debt arising from an injury

attributable to mere negligent or reckless conduct fails to satisfy

the ‘willful and malicious requirement of (a)(6),’” as they do not

satisfy the necessary scienter requirement. In re Holmes, 610

B.R. 541, 548 (Bankr. D.S.C. Jan. 7, 2020) (quoting In re Muhs,

923 F.3d 377, 385 (4th Cir. 2019)). “[T]he mere fact that a debtor

engaged in an intentional act does not necessarily mean that he

acted willfully and maliciously for purposes of § 523(a)(6).” In

re Duncan, 448 F.3d 725, 729 (4th Cir. 2006). “[T]o qualify as

willful for purposes of section 523(a)(6), the debtor must: 1)

commit an intentional tort, not a negligent or reckless tort, and

2) the intentional tort must be conduct substantially certain to

result in injury or be motivated by a desire to inflict injury.”

In re Eppard, 502 B.R. 458, 464 (Bankr. W.D. Va. 2012).

Plaintiff must also plausibly allege malice. The Fourth

Circuit has explained that malice, rather than requiring the

defendant to act with subjective ill will, may be “shown by the

acts and conduct of the debtor in the context of their surrounding

circumstances . . . .” In re McNallen, 62 F.3d 619, 625 (4th Cir.

1995). Furthermore, “it is the debtor's subjective state of mind

that is relevant,” and malice can be found implicitly through the

“acts and conduct of the debtor in the context of [the] surrounding

circumstances.” In re Stanley, 66 F.3d 664, 668 (4th Cir. 1995)

(citations omitted) (alteration in original).

a. Plaintiff has sufficiently alleged that the injury was

willful.

Construed in the light most favorable to Plaintiff, the

Amended Complaint sufficiently pleads willful injury.5 Plaintiff

alleges specific actions that Defendants took with intent to cause

harm and “to damage Plaintiff’s business and reputation.” ECF No.

3, ¶ 44. Plaintiff alleged that Defendants’ campaign relied upon

making, and, importantly, publishing defamatory statements about

Plaintiff on signs posted in front of their house, id. ¶ 15, on

social media posts, id. ¶¶ 20, 28-29, at a rally, id. ¶¶ 23-24,

and critically, to customers and potential customers visiting the

neighborhood with their realtors. Id. ¶ 19. Plaintiff argues

that Defendants’ statements were intended to: (1) associate

Plaintiff with discriminatory and racist conduct; (2) falsely

accuse Plaintiff of violating laws; (3) falsely accuse Plaintiff

of mistreating homeowners; (4) falsely accuse Plaintiff of

harassing Defendants; and (5) blame Plaintiff for issues in the

neighborhood not within Plaintiff’s control. ECF No. 27, at 8.

These allegations, taken as true, are more than mere recitations

of the elements of a cause of action. Taken in a light most

favorable to Plaintiff, these actions indicate Defendants’ intent

5 As discussed above the underlying confession of judgment holds preclusive

effect to matters of law, not questions of fact, and so the Court will not

analyze whether the causes of action underlying the confession of judgment

themselves state a claim under § 523(a)(6).

to interfere with Plaintiff’s business. Plaintiff also alleges

that those statements directly resulted in the loss of at least

one sale, where an individual allegedly “pulled her contract” on

account of Defendants. ECF No. 3, ¶ 19. Moreover, in Ms. Bryant's

April 22, 2023, email, she explicitly stated that “we are winning

the fight! One potential buyer has already cancelled her contract

to build and another is strongly considering the same!” Id. ¶ 24.

These specific allegations are sufficient to plausibly allege that

Defendants took each of these acts to harm Plaintiff rather than

merely acting intentionally and incidentally harming

Plaintiff.6 Despite Defendants’ assertion that no facts alleged

support a finding of Defendants’ intent to injure Plaintiff,

Defendants’ Confession of Judgment states that Defendants’

campaign directed against Plaintiff was intended to damage

Plaintiff’s business. ECF No. 3, ¶ 44; id. at 20.7 These

allegations taken as true arise to more than a mere probability

that Plaintiff’s injury was intentional and survives Defendants’

12(b)(6) Motion.

6 At the hearing, Mrs. Bryant spoke passionately as to her true intent. ECF

No. 30, at 00:47:20-00:53:25. At this stage of the process, however, the Court

must construe the facts in a light most favorable to the Plaintiff and cannot

make factual determinations. It is rare that intent can be determined as a

matter of law at the pleading stage. Carefirst of Maryland, Inc. v. Johnson &

Johnson, 745 F. Supp. 3d 288, 311 (E.D. Va. 2024) (explaining that it is rare

to have direct evidence of deceptive intent at the pleading stage).

7 Nothing herein shall be construed to accept the statements in the Confession

of Judgment as determinative in this proceeding or entitled to preclusive

effect.

b. Plaintiff has sufficiently alleged malice.

The Amended Complaint sufficiently alleges facts to support

that Defendants acted with malice. A debtor's injurious act done

“deliberately and intentionally in knowing disregard of the rights

of another,” is sufficiently willful and malicious, to prevent

discharge of a debt. Stanley, 66 F.3d at 667 (citation modified).

A debtor’s state of mind may be relevant for the second half of

the inquiry but, malice is typically inferred through a debtor’s

acts and conduct in the context of the surrounding circumstances.

Id. at 667-68. Defendants argue that the alleged conduct was not

sufficiently malicious, and instead that Defendants’ actions were

intended only to “voice concerns about the deplorable neighborhood

conditions and poor-quality housing issues.” ECF No. 16, at 2.

Defendants allege that their conduct was instead intended to “bring

awareness to their concerns.” Id. In other words, that Defendants

had just cause to take the actions alleged.

Citing In re Adams, 478 B.R. 476, 485 (Bankr. N.D. Ga. 2012),

Plaintiff contends that the sum total of Defendants’ alleged

actions demonstrates malice. ECF No. 27, at 9. In Adams, albeit

in the context of § 1328(a)(4),8 the Court determined the volume

8 “Malicious” for purposes of § 1328(a)(4) means “‘wrongful and without just

cause or excessive even in the absence of personal hatred, spite or ill-will.’”

In re Jennings, 670 F.3d 1329, 1334 (11th Cir. 2012) (quoting In re Walker, 48

F.3d 1161, 1164 (11th Cir. 1995)). To establish malice, “a showing of specific

intent to harm another is not necessary.” In re Ikner, 883 F.2d 986, 991 (11th

Cir. 1989).

and severity of the defendant’s conduct supported an inference of

malice. Adams, 478 B.R. at 485. There, the defendant repeatedly

contacted the plaintiff’s coworkers falsely accusing the plaintiff

of abusive behavior and financial fraud, threatened to kill the

plaintiff, and made false reports that resulted in the successful

sabotage of a business deal between the parties by defaming the

defendant. Id. at 481. Defendants’ actions as alleged in the

Amended Complaint evidence a similar persistence, and Plaintiff

sufficiently alleges that the false statements, and incendiary

actions made by Defendants were intended to cause Plaintiff to

lose revenue. ECF No. 3, ¶¶ 18-24. Although Defendants may have

intended their actions to merely “bring awareness to their

concerns,” ECF No. 16, at 2, to meet the plausibility standard,

Plaintiff is not required “to also rebut other possible

explanations for the conduct alleged.” 2 Moore's Federal Practice

§ 12.34(1)(b) (2019); see also Stanley, 66 F.3d at 668 (explaining

that the focus of the inquiry is whether or not the debtor intended

the consequences of their actions, not whether their intentions in

acting unlawfully were good). Taken in a light most favorable to

the non-moving party, the Amended Complaint sufficiently alleges

that Defendants engaged in a pattern of intentional interference

with Plaintiff’s business and these allegations support a

plausible showing of malice under § 523(a)(6).

Thus, Plaintiff has successfully stated a claim that

Defendants’ actions constitute a willful and malicious injury

under § 523(a)(6) and the Court will deny the Motion to Dismiss.

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, and DECREED

that the Motion to Dismiss is denied.

[END OF DOCUMENT]

Parties to be Served

25-02009

James Lawrence Bryant, Jr.

5629 Siler Str

Trinity, NC 27370

Sharon Renea Bryant

5629 Siler Str

Trinity, NC 27370

John Paul Hughes Cournoyer

U.S. Bankruptcy Administrator VIA CM/ECF

Jamey M. Lowdermilk

Katarina Kyung Oak Wong VIA CM/ECF

Counsel for Plaintiff