Beauty Queen Cannot Discharge $5 Million Defamation Award In Bankruptcy

Beauty queen cannot discharge $5 million defamation award in bankruptcy

Former Miss Pennsylvania USA Sheena Monnin claimed that the 2012 Miss USA beauty pageant was rigged.  An arbitrator has disagreed and she has been ordered to pay pageant organizers $5 million for defamation.  Under the Miss USA pageant agreement signed by Ms. Monnin all disputes were to be resolved by an arbitrator, not the courts.

Apparently the former Ms. Pennsylvania did not participate in the arbitration.  This was a grievous mistake. [Ms. Monnin has claimed she was not even aware of the hearing.] By refusing to participate the beauty queen gave up her right to cross examine witnesses and introduce her own evidence in defense of her position.  It is also possible that by participating she may have been able to negotiate a settlement prior to entry of the award. At this point, the pageant organizers may enroll the arbitration award as an enforceable money judgment under either state or federal law, and then begin to seize Ms. Monnin’s assets and earnings.

Ms. Monnin will almost certainly live to regret her ill-chosen words and cavalierly ignoring the arbitration proceeding.  There will be no easy escape from the pain of this award.  Defamation is an intentional tort, and under the federal bankruptcy laws damages arising from intentional torts are not dischargeable.  Therefore the pageant organizers will be able to pursue any recovery from Ms. Monnin’s modeling contracts or any other funds that come her way and she will not be able to find shelter in bankruptcy court.  Her best bet may simply be to take a wage-paying job in Pennsylvania or deposit her earnings in a bank account in Delaware.  Wage garnishments are not available under Pennsylvania law and bank account seizures are prohibited in Delaware.

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