Order Denying Defendants’ Motion to Dismiss. Plaintiff commenced an adversary proceeding seeking to have a debt arising out of a confession of judgment adjudicated a nondischargeable willful and malicious injury under § 523(a)(6). Prior to the entry of the confession of judgment, Defendants purchased a home from Plaintiff.  Unhappy with their home, among other things, Defendants allegedly began a campaign to disrupt Plaintiff’s business.  Plaintiff filed a suit against Defendants in state court and Defendants filed a suit against Plaintiff in federal court. The parties entered into a settlement agreement intended to resolve both lawsuits. Under the terms of that agreement, Defendants executed a confession of judgment to remain confidential and in the care of Plaintiff in the absence of a default by Defendants under the settlement agreement. Defendants defaulted under the settlement agreement and Plaintiff filed the confession of judgment. In the adversary proceeding, Plaintiff alleged that Defendants initiated a malicious and unlawful smear campaign to damage Plaintiff’s business and reputation and therefore the debt represented by the confession of judgment is nondischargeable under § 523(a)(6). Defendants argued that the adversary proceeding should be dismissed because: (1) the general release clause in the settlement agreement prohibited the adversary proceeding; (2) the settlement agreement’s no admission of liability clause demonstrated the intent to fully resolve the dispute and prohibited 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 which was allegedly not sold on account of Defendants’ interference, later was sold and therefore Plaintiff’s damages were fully mitigated; and (5) the complaint failed to state a claim upon which relief can be granted. The Court first found that the general release and no admission of liability clauses did not limit the Court’s ability to determine if the underlying debt was dischargeable. Second, the Court found that Plaintiff’s action was not barred by res judicata, collateral estoppel, or judicial estoppel because the dischargeability claim is a federal cause of action arising out of Defendant’s bankruptcy and therefore could not have been litigated in the state court. Fourth, the Court found that it was precluded under the doctrine of res judicata from relitigating the amount of the confession of judgment. Finally, the Court found that under Rule 12(b)(6), Plaintiff had sufficiently alleged that its injury was willful, and that Defendants acted with malice. Therefore, Plaintiff stated a plausible claim for nondischageability of the debt under § 523(a)(6).