Dora Carrillo ("Carrillo") filed an adversary complaint in Louis Su's ("Su") Chapter 7 bankruptcy case to determine the dischargeability of debt owed to her by Su. The bankruptcy court held that Su's debt to Carrillo was nondischargeable. The Bankruptcy Appellate Panel ("BAP") reversed, holding that the bankruptcy court erred by applying the incorrect legal standard. Carrillo appeals, arguing that the bankruptcy court correctly applied the law and that Su's debt is nondischargeable. We have jurisdiction under 28 U.S.C. § 158(d), and we affirm the BAP.

On August 21, 1997, shortly before 8 a.m., Carrillo was lawfully crossing a major downtown San Francisco intersection while walking to work. Su, who was driving a 14-passenger van, sped into the intersection against a red light, traveling 37 miles per hour in a 25-mile-per-hour zone, nearly five seconds after the light had turned red. He crashed into a car that was lawfully in the intersection and then careened into Carrillo, severely injuring her.

Carrillo subsequently sued Su in state court for compensatory and punitive damages, alleging that "[h]is conduct ... was wanton, willful and malicious, and such acts were intentionally done with reckless disregard of the consequences, necessarily producing permanent injury and harm to plaintiff, without just cause or excuse." The jury found that Su was negligent, that his negligence resulted in Carrillo's injuries, and that he was guilty of malice by clear and convincing evidence. "Malice" was defined by the state court either as conduct intended to cause injury to the plaintiff or as despicable conduct carried on with a willful and conscious disregard for the safety and rights of others. The jury awarded Carrillo $130,000 in economic damages and $400,000 in non-economic damages; no punitive damages were awarded.

After this judgment was entered against him, Su filed a Chapter 7 bankruptcy petition. In her adversary proceeding, Carrillo alleged that her judgment against Su was not dischargeable because 11 U.S.C. § 523(a)(6) ("§ 523(a)(6)") excepts from discharge a debt "for willful and malicious injury by the debtor to another entity or to the property of another entity." Relying on Miller v. J.D. Abrams Inc. (In re Miller), 156 F.3d 598, 606 (5th Cir.1998), which held that injuries are considered willful and malicious under § 523(a)(6) when the debtor possesses "either an objective substantial certainty of harm or a subjective motive to cause harm," the bankruptcy court held that Su's debt to Carrillo was nondischargeable because there was "by [an] objective standard, a substantial certainty" of harm when Su drove his van through a red light at an intersection known to be heavily congested with traffic.

After the bankruptcy court's decision, and while the case was pending before the BAP, this court decided Petralia v. Jercich (In re Jercich), 238 F.3d 1202 (9th Cir.), cert. denied, 533 U.S. 930, 121 S. Ct. 2552, 150 L. Ed. 2d 718 (2001). In re Jercich held that § 523(a)(6)'s willful injury requirement is met "when it is shown either that the debtor had a subjective motive to inflict the injury or that the debtor believed that injury was substantially certain to occur as a result of his conduct." Id. at 1208.

Based largely on In re Jercich, the BAP reversed the bankruptcy court. See Su v. Carrillo (In re Su), 259 B.R. 909, 914 (9th Cir. B.A.P. 2001). According to the BAP, the bankruptcy court's use of an objective substantial certainty standard was inconsistent with the subjective substantial certainty standard articulated in In re Jercich. Id.

We review the bankruptcy court's conclusions of law de novo and its factual findings for clear error. Am. Law Ctr. v. Stanley (In re Jastrem), 253 F.3d 438, 441 (9th Cir.2001); Duckor Spradling & Metzger v. Baum Trust (In re P.R.T.C., Inc.), 177 F.3d 774, 782 (9th Cir.1999). Whether a claim is nondischargeable presents mixed issues of law and fact and is reviewed de novo. Murray v. Bammer (In re Bammer), 131 F.3d 788, 791-92 (9th Cir.1997) (en banc). The bankruptcy court's interpretation of the Bankruptcy Code is reviewed de novo. State Bar v. Taggart (In re Taggart), 249 F.3d 987, 990 (9th Cir.2001). Decisions of the BAP are reviewed de novo. Cool Fuel, Inc. v. Bd. of Equalization (In re Cool Fuel, Inc.), 210 F.3d 999, 1001 (9th Cir.2000). We independently review a bankruptcy court's ruling on appeal from the BAP. In re Taggart, 249 F.3d at 990; In re Cool Fuel, 210 F.3d at 1001-02.

Section 523(a)(6) of the Bankruptcy Code provides: "(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt — .... (6) for willful and malicious injury by the debtor to another entity or to the property of another entity." The question presented on appeal is whether a finding of "willful and malicious injury" must be based on the debtor's subjective knowledge or intent or whether such a finding can be predicated upon an objective evaluation of the debtor's conduct. We hold that § 523(a)(6)'s willful injury requirement is met only when the debtor has a subjective motive to inflict injury or when the debtor believes that injury is substantially certain to result from his own conduct.

In Kawaauhau v. Geiger, 523 U.S. 57, 118 S. Ct. 974, 140 L. Ed. 2d 90 (1998), the Supreme Court established that § 523(a)(6) does not apply to those debts arising from unintentionally inflicted injuries:

The word "willful" in (a)(6) modifies the word "injury," indicating that non-dischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury. Had Congress meant to exempt debts resulting from unintentionally inflicted injuries, it might have described instead "willful acts that cause injury." .... [T]he (a)(6) formulation triggers in the lawyer's mind the category "intentional torts," as distinguished from negligent or reckless torts. Intentional torts generally require that the actor intend "the consequences of an act", not simply "the act itself."

523 U.S. at 61-62, 118 S. Ct. 974 (citation omitted). Thus, Geiger held that debts arising out of a medical malpractice judgment were dischargeable, even though the plaintiff alleged that Dr. Geiger had intentionally rendered inadequate medical care, and that this necessarily led to her injury. Geiger concluded that "debts arising from recklessly or negligently inflicted injuries do not fall within the compass of § 523(a)(6)." Id. at 64, 118 S. Ct. 974.

Both parties agree that a "deliberate or intentional injury" is required for § 523(a)(6) to render a debt non-dischargeable. The question we must decide is the state of mind that is required to satisfy § 523(a)(6)'s willful injury requirement. According to the Restatement, an action is intentional if an actor subjectively "desires to cause consequences of his act, or ... believes that the consequences are substantially certain to result from it." RESTATEMENT (SECOND) OF TORTS § 8A (1964). The Geiger Court, however, did not expressly adopt this subjective Restatement formulation,1 and the lower courts have differed over whether to adopt a strict subjective test when applying § 523(a)(6).

The Sixth Circuit's interpretation of § 523(a)(6) exemplifies the strict subjective approach, in which a debt is nondischargeable under § 523(a)(6) only if the debtor intended to cause harm or knew that harm was a substantially certain consequence of his or her behavior. In Markowitz v. Campbell (In re Markowitz), 190 F.3d 455 (6th Cir.1999), the debt arose from a legal malpractice action against the debtor. The creditor argued that the debt was nondischargeable under § 523(a)(6)'s "willful and malicious injury" provision. While In re Markowitz acknowledged that Geiger had not expressly adopted the Restatement's subjective "substantially certain" language, it nonetheless concluded that "from the Court's language and analysis in Geiger, we now hold that unless `the actor desires to cause consequences of his act, or... believes that the consequences are substantially certain to result from it,' he has not committed a `willful and malicious injury' as defined under § 523(a)(6)." Id. at 464 (quoting RESTATEMENT (SECOND) OF TORTS § 8A (1964)).

Conversely, the Fifth Circuit's interpretation of § 523(a)(6) exemplifies the objective approach, in which debt is nondischargeable under § 523(a)(6) either if there is a subjective intent to cause an injury or if there is an objective substantial certainty of harm. In In re Miller, the creditor sought a determination that a state court judgment for misuse of trade secrets constituted a nondischargeable debt. While acknowledging that Geiger "certainly eliminates the possibility that `willful' encompasses negligence or recklessness," In re Miller held that "the label `intentional tort' is too elusive to sort intentional acts that lead to injury from acts intended to cause injury. Rather, either objective substantial certainty or subjective motive meets the Supreme Court's definition of `willful ... injury' in § 523(a)(6)." 156 F.3d at 603.

While this difference between the objective approach taken by the Fifth Circuit and the subjective approach taken by the Sixth Circuit is evident from In re Miller and In re Markowitz, this difference has been overlooked by courts in the Ninth Circuit when evaluating § 523(a)(6) claims. For example, in Baldwin v. Kilpatrick (In re Baldwin), 245 B.R. 131 (9th Cir.2000), aff'd, 249 F.3d 912 (9th Cir.2001), a creditor who had obtained a state court judgment against the debtor for assault and battery brought an adversary proceeding to except that judgment debt from discharge under § 523(a)(6). Because the debtor "was an active participant in the violent striking" of the creditor, the BAP easily found that the assault and battery judgment stemmed from a "willful and malicious injury" to creditor's person and, therefore, was nondischargeable. Id. at 137. In so holding, however, the BAP declared: "The Fifth Circuit [in In re Miller] held that ... `either objective substantial certainty or subjective motive meets the Supreme Court's definition of `willful ... injury' in § 523(a)(6).' The Sixth Circuit [in In re Markowitz] has also adopted this approach. We similarly adopt this standard." Id. at 136 (citations omitted).2

This court too committed a similar oversight when it examined, for the first time, the question of intent in the context of § 523(a)(6)'s willful injury requirement. In In re Jercich, a creditor who had obtained a state court judgment for unpaid wages against his former employer, a Chapter 7 debtor, sought to except that judgment debt from discharge pursuant to § 523(a)(6). Focusing on the subjective intent of the employer, this court held "that under Geiger, the willful injury requirement of § 523(a)(6) is met when it is shown either that the debtor had a subjective motive to inflict the injury or that the debtor believed that injury was substantially certain to occur as a result of his conduct." 238 F.3d at 1208. Given that the employer in In re Jercich knew both that he owed wages to his employee and that his failure to pay those wages would, with substantial certainty, harm his employee, this court concluded that the debt owed the employee was nondischargeable under § 523(a)(6). Id. at 1208-09.

The holding in In re Jercich is clear: § 523(a)(6) renders debt nondischargeable when there is either a subjective intent to harm, or a subjective belief that harm is substantially certain. Unfortunately, however, the opinion also states that the subjective inquiry it endorsed is "consistent with the approaches taken by the Fifth and Sixth Circuits," in In re Miller and In re Markowitz. Id. We believe that this claim of consistency is not completely accurate.3 Nonetheless, Carrillo seizes on this misstatement to rationalize the bankruptcy court's heavy reliance on In re Miller. Carrillo's argument fails, however, because the holding of In re Jercich, which sets out the scope of § 523(a)(6)'s willful injury requirement, expressly articulates only a subjective dimension. Because the bankruptcy court focused exclusively on the objective substantial certainty of harm stemming from Su's driving, but did not consider Su's subjective intent to cause harm or knowledge that harm was substantially certain, we agree with the BAP that the bankruptcy court applied the incorrect legal standard. Thus, this proceeding must be remanded to the bankruptcy court for consideration of Carrillo's nondischargeability claim under the subjective framework articulated in In re Jercich.

We believe, further, that failure to adhere strictly to the limitation expressly laid down by In re Jercich will expand the scope of nondischargeable debt under § 523(a)(6) far beyond what Congress intended. By its very terms, the objective standard disregards the particular debtor's state of mind and considers whether an objective, reasonable person would have known that the actions in question were substantially certain to injure the creditor. In its application, this standard looks very much like the "reckless disregard" standard used in negligence.4 That the Bankruptcy Code's legislative history makes it clear that Congress did not intend § 523(a)(6)'s willful injury requirement to be applied so as to render nondischargeable any debt incurred by reckless behavior,5 reinforces application of the subjective standard. The subjective standard correctly focuses on the debtor's state of mind and precludes application of § 523(a)(6)'s nondischargeability provision short of the debtor's actual knowledge that harm to the creditor was substantially certain.6

The BAP correctly observed that in In re Jercich, we treated the "malicious" injury requirement of § 523(a)(6) as separate from the "willful" requirement. According to In re Jercich: "A `malicious' injury involves `(1) a wrongful act, (2) done intentionally, (3) which necessarily causes injury, and (4) is done without just cause or excuse.'" 238 F.3d at 1209 (quoting In re Bammer, 131 F.3d at 791); see also id. at 1209 n. 36 (emphasizing that the "maliciousness standard — and in particular our `just cause and excuse' prong — survived Geiger" and distinguishing In re Miller, where "the `just cause or excuse' standard has been displaced by Geiger and ... [where] the `willful' and `malicious' prongs [have been collapsed] into a single inquiry").

The bankruptcy court, however, made no findings regarding malice. In fact, it conflated the "willful" and "malicious" prongs in its § 523(a)(6) analysis. While Carrillo contends that the four factors can be ascertained by examining the record, we decline to make the independent malice inquiry required by In re Jercich in the first instance. Therefore, on remand, the bankruptcy court should also make appropriate findings on the issue of malice.

For the foregoing reasons, we hold that the BAP correctly concluded that § 523(a)(6)'s willful injury requirement is governed by a subjective standard. Accordingly, we affirm the order of the BAP reversing the bankruptcy court and remanding the adversary proceeding for further proceedings.

AFFIRMED.