Cumis Insurance Society, Inc. v. Sammons (In re Sammons)

MEMORANDUM DECISION

GARY SPRAKER, Bankruptcy Judge.

Plaintiff CUMIS Insurance Society, Inc. (“CUMIS”) sued the debtor, Steven Lee Sammons, to recover $923,290.24 that his non-debtor wife, Kathie Sammons, admittedly embezzled from her employer, Whitefish Federal Credit Union (“Whitefish”). CUMIS insured Whitefish. It paid Whitefish $900,000 on its insurance claims, and is subrogated to the credit union’s rights. CUMIS now seeks a determination that Steven is liable for his wife’s embezzlement, and that such debt is excepted from discharge under 11 U.S.C. § 523(a)(2) and (6) because he knew, or…