
    In re Roman P. WINCHER, Jr. and Nikki J. Wincher, Debtors. HOUSEHOLD RETAIL SERVICES, INC., Plaintiff, v. Roman P. WINCHER, Jr., Defendant.
    Bankruptcy No. 96-51926-WS.
    Adversary No. 96-5041.
    United States Bankruptcy Court, E.D. Michigan, Southern Division.
    June 12, 1997.
    
      Richardo I. Kilpatrick, Rochester Hills, MI, for plaintiff.
    Charles J. Schneider, Detroit, MI, for defendant.
    Lawrence Friedman, Southfield, MI, Trustee.
   DECISION AND ORDER RE DISCHARGEABILITY OF DEBT

BURTON PERLMAN, Bankruptcy Judge.

In this Chapter 7 bankruptcy case, plaintiff Household Retail Services, Inc., filed a complaint to determine dischargeability of a debt, which it claims is owed it by debtor/ defendant Roman P. Wineher, Jr. The claim is made pursuant to 11 U.S.C. § 523(a)(6). The proceeding came on for trial at the conclusion of which we reserved decision in order that the parties might file memoranda supporting their positions.

We find the following facts. On January 29, 1994, defendant Roman P. Wineher, Jr. did two things. He purchased some furniture from Art Van Furniture, a furniture store at Westland, Michigan. His additional act was to open a credit account at that store, the lender on such credit account being the present plaintiff. As a result of his application, defendant got a credit card to be used only for purchases at Art Van. In connection with the opening of the credit account, defendant signed a Cardholder Agreement. This was a single page document. On the reverse side were two columns of closely written text. One of the paragraphs in that text had a heading: Security. It is because of this provision that plaintiff contends that it held a security interest in furniture purchases which defendant made from Art Van. Defendant, however, never read the material on the reverse side of the application. His attention was not directed to it and he was not informed that a security interest was claimed in items purchased from Art Van. Defendant then was married in October 1994. In connection with that event, additional purchases of furniture were made at Art Van so that defendant and his wife could start up their home. Subsequently, in December 1994, defendant’s wife became pregnant and was obliged to quit work. While defendant did make some payments to plaintiff on account of the Art Van furniture, the financial situation of the family deteriorated because of the loss of the wife’s income. Defendant and his wife, because of their straitened circumstances, were obliged to move in with relatives. When they moved, defendant had no place to store the furniture which they had purchased at Art Van, and so they sold it. They received some fifteen hundred dollars from the sale of the furniture.

The complaint in this proceeding is based upon § 523(a)(6) of the Bankruptcy Code, which reads:

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 for willful and malicious injury by the debtor to another entity or to the property of another entity.

11 U.S.C. § 523(a)(6).

Plaintiff contends that in these circumstances it is entitled to have its debt held to be nondischargeable because the sale of the furniture upon which plaintiff held a security interest was a conversion. To resolve the present controversy the court must determine whether the circumstances under which defendant sold furniture purchased from Art Van, were “willful and malicious.”

Plaintiff in its argument relies primarily upon Perkins v. Scharffe, 817 F.2d 392 (6th Cir.1987). In that ease, the court held that in order to establish that an act was willful and malicious under § 523(a)(6), the plaintiff must prove that debtor committed an intentional act which necessarily results in injury. Plaintiff contends that the facts before us satisfy the requirements of the definition. That is, defendant sold the property subject to the plaintiffs purchase money security interest, and this sale was a wrongful act without just cause or excuse which necessarily produced harm to plaintiff. Plaintiff depends upon the executed Cardholder Agreement signed by defendant as a basis for asserting that defendant knew or should have known that harm to plaintiff “was substantially certain” to occur. Defendant in his memorandum-in-chief says that the statutory requirement for willfulness is not met in the circumstances of this case. Those circumstances, says defendant, are that the evidence establishes that defendant had no knowledge of the security interest when he sold the furniture. Applying the Perkins standard, defendant says that the requirement that the act of which complaint is made be intentional is not met here, for intentional implies that the one charged with improper action did so with knowledge of the rights of the party harmed by the action.

As the parties observe, the Sixth Circuit interpreted § 523(a)(6) in Perkins v. Scharffe, 817 F.2d 392 (6th Cir.1987). In that decision, the court quoted from a well known treatise for support of its conclusion. The treatise has been revised in later editions than the one utilized by the court in Perkins, but the language in the current edition departs only slightly from that quoted in Perkins. It reads:

To fall within the exception of § 523(a)(6), the injury to an entity or property must have been willful and malicious. An injury to an entity or property may be a malicious injury within this provision if it was wrongful and without just cause or excuse, even in the absence of personal hatred, spite or ill-will.
The word “willful” means “deliberate or intentional,” referring to a deliberate and intentional act that necessarily leads to injury. Therefore, a wrongful act done intentionally, which necessarily produces harm or which has a substantial certainty of causing harm and is without just cause or excuse, may be willful and malicious injury.

4 Collier on Bankruptcy ¶ 523.12[1] (15th ed. rev.)

The text then goes on to say:

Secured creditors whose collateral was disposed of by the debtor often assert nondischargeability claims under § 523(a)(6) on the theory that the security interest was willfully and maliciously converted. Transfers in breach of a security agreement may give rise to nondischargeable liability when the debtor’s conduct is knowing and certain or almost certain to cause financial harm. Unless the creditor can prove not only that the debtor knew of the security interest, but also that the debtor knew that a transfer of the property was wrongful, the debt should not be found nondischargeable.

Id.

We apply the law as thus stated to the facts of this case. Concededly, defendant sold collateral of plaintiff. That, however, is insufficient to establish a basis for denying discharge on grounds of § 523(a)(6). Here the evidence which we have found as fact establishes that defendant did not know that plaintiff held a security interest in the furniture he purchased from Art Van. Plaintiff urges, however, that he should have known, and that should be sufficient for purposes of § 523(a)(6). This Court cannot agree that in the circumstances before us this is valid. The evidence establishes that the security interest arose because of a provision in no way emphasized in a lengthy document presented to an applicant for credit.' No one told defendant about the claim of a security interest. So far as defendant was concerned, he was making application for a credit card, and it is common knowledge that credit card transactions do not commonly create security interests. There is no basis upon which a conclusion could be based that defendant knew or should have known of the security interest. We hold, therefore, that defendant’s act of selling furniture which he had purchased from Art Van does not constitute a willful and malicious act.

We find the issues in favor of defendant. The complaint is dismissed.

So Ordered. 
      
      . The Sixth Circuit in a later case, Vulcan Coals, Inc. v. Howard, 946 F.2d 1226, 1228-9 (6th Cir. 1991) reaffirmed the Perkins standard. PN1- Bankruptcy, Epstein, et al., § 7-28, p. 518 (1993).
     