FinLogic FinLogic Quantitative Think Tank Center|Deion Sanders' son Shilo accused of trying to 'avoid responsibility' in bankruptcy case

Colorado football safety Shilo Sanders reported to preseason football camp in Boulder this week with two big questions hanging over his head in his final season of college football:

∎ Can he help lift the Buffaloes to a bowl game after they fell short last year in father Deion Sanders’ first season as Colorado’s coach?FinLogic FinLogic Quantitative Think Tank Center

∎ Will he be freed from the $11 million debt he owes to a former security guard in Dallas after filing for bankruptcy last October?

Both storylines come with high stakes for a player with NFL potential at age 24. But the answer to the second question – his debt – could come sooner than Sanders would like. Last week, attorneys for the security guard, John Darjean, restated their case against him in a new court filing, arguing that Sanders should be held accountable for his alleged assault on Darjean in 2015, when Sanders was 15 years old.

“If Defendant (Sanders) is allowed to relitigate this matter, then Defendant is creating a new legal loophole to avoid responsibility when someone assaults another,” attorneys for the security guard wrote in bankruptcy court filings last week.

A federal bankruptcy judge could decide the matter in coming months with a summary judgment ruling that could blow up Sanders’ bankruptcy case and make him subject to debt collection efforts until he pays it all back. It’s a big pending decision in a baffling case. Here is where it stands after that new filing last week:

The effort to erase Shilo Sanders' massive debt

Sanders’ goal when filing a Chapter 7 bankruptcy case last year was to stop Darjean’s debt collection efforts and get the debt erased by the court, allowing him “to get a fresh start, free from the oppressive burden of his debts,” as his attorneys have argued.

Normally, the bankruptcy court allows debts to be discharged as a way to provide relief to the “honest but unfortunate debtor,” said Angela Littwin, a law professor and bankruptcy expert at the University of Texas.

But there are exceptions in the law that would prevent the discharge of certain debts. One of them is if the debt stems from a “willful and malicious injury by the debtor,” as attorneys for the security guard said it did. They said Shilo Sanders assaulted Darjean in 2015 when Darjean was trying to confiscate Sanders’ phone at school, leaving Darjean with permanent and severe spinal and nerve injuries.

Darjean sued Sanders to recover for his damages in 2016, but when the case finally went to trial in Dallas in 2022, Sanders didn’t show up for it to defend himself in court. The court then considered the evidence and issued a default judgment that said Sanders owed Darjean $11.89 million, including $3 million for future physical impairment and $2 million in lost future earning capacity.

Darjean since has promised to fight for what he is owed and is opposing the discharge of the debt in bankruptcy court.

The issue now is whether Sanders gets to relitigate the incident from 2015. He has disputed Darjean’s version of events, saying it was self-defense in response to Darjean’s aggression. His attorneys also have questioned whether Darjean’s injuries came from pre-existing conditions.  

In the court filing from last week, Darjean’s attorneys argued that the law doesn’t allow him to relitigate a case that was already decided by another court, in this case the state court in Dallas.

What is the case against Shilo Sanders?

According to Darjean’s attorneys, this case is simple and should be decided quickly without the need for a trial. They note that the law doesn’t allow discharges for debt that stems from willful and malicious injuries. The state court in Texas already determined that “Shilo Sanders did in fact cause physical harm and injuries to John Darjean by assaulting him,” according to that court’s findings of fact. Therefore they say he is precluded from getting another attempt in court to dispute the underlying incident from 2015.

Darjean’s attorneys also noted that Shilo Sanders had defended himself from Darjean’s lawsuit for years before dropping his attorneys in the case in 2020. He had made counterclaims in the case, filed affirmative defenses and testified in a deposition.

“By participating in litigation up until trial, and failing to show up to trial, Defendant is creating an out from responsibility for what amounts to a first-degree felony of aggravated assault,” Darjean’s attorneys said in court filings last week.

One outside legal observer found it baffling that it even got to this point for Shilo Sanders.

“He is now facing every possible bad outcome in litigation,” said Mechele Dickerson, a law professor at the University of Texas. “He lost (in civil court), there’s a judgment, and he’s (possibly) precluded from raising certain defenses/claims or re-litigating decided issues. And because the judgment seems to involve willful and malicious conduct, he may not be able to discharge it in his bankruptcy case.”

Why Shilo Sanders wants to avoid summary judgment

Darjean’s attorneys are seeking a summary judgment ruling that will “determine that the claim of Plaintiff (Darjean) is excepted from discharge” under federal bankruptcy law.

If the judge agrees, Shilo would effectively lose his effort to discharge the debt and would be on the hook for the $11 million, though he could appeal. If the judge doesn’t agree with Darjean, the matter could proceed to trial, where the facts of the matter from 2015 could be contested in court.

“Normally, a non-dischargeability action based on an alleged willful and malicious injury is not resolved by summary judgment because there are facts in dispute,” said John Rao, senior attorney at the National Consumer Law Center in Boston. “However, the question in this case will be whether the bankruptcy judge will give any preclusive effect to the state court default judgment.”

That’s exactly what Darjean’s attorneys argued last week in their court filing. They said Sanders is “precluded from relitigating his counterclaims and defenses, in particular self-defense.” That’s because they said the issue was already effectively decided by the civil court in Texas. Under the doctrine of “collateral estoppel,” one party can prevent another from relitigating any issue that was finally determined on the merits of a previous case, according to the Legal Information Institute.

“Preclusion covers all claims and defenses which the Defendant (Sanders) had ample opportunity to argue in the state court but chose not to,” Darjean’s attorneys wrote in the  court filing. “Defendant also knowingly committed assault and aggravated assault under the Texas Penal Code’s definition since Plaintiff was a security officer who sustained severe bodily injury from Defendant’s acts.”

What comes next in Sanders bankruptcy case?

Sanders' attorneys have argued that there is nothing in the final judgment in the Texas state court or its findings of fact that satisfy willful and malicious intent in this bankruptcy case, according to the court filing.

It's up to the judge to decide who's right, and there is no timeline scheduled for when the judge will rule on summary judgment.

Darjean has two active complaints against Sanders that seek to prevent him from getting out of his debt to him, including this one that is headed toward a summary judgment ruling. The other complaint is seeking to prevent a discharge based on other arguments, including that Shilo Sanders improperly hid or omitted his assets from his required bankruptcy disclosures.

That complaint is also pending, though Sanders is still trying to get parts of it dismissed after previously failing to have that whole complaint thrown out.

Sanders downplayed the overall situation in July at Big 12 Conference media days in Las Vegas.

“At the end of the day everybody is gonna know the truth about everything, you know,” said Sanders, Colorado’s leading tackler last season.

Colorado opens the season Aug. 29 at home against North Dakota State.

Follow reporter Brent Schrotenboer @Schrotenboer. E-mail: [email protected]