Barton v. Carthan

• Court: United States Bankruptcy Court, C.D. California
• Decided: April 13, 2021
• Docket: 1:19-ap-01135
• Status: Unknown

Opinion

2 FILED & ENTERED

4 APR 13 2021

CLERK U.S. BANKRUPTCY COURT 6 C Be Yn f t ir s a h l e D r li s t r i c Dt E o Pf UC Ta Yli f Cor Ln Eia RK 7

8 UNITED STATES BANKRUPTCY COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 SAN FERNANDO VALLEY DIVISION 11

12 In re: CHAPTER 7

13 Tacarra Sheana Carthan Case No.: 1:19-bk-12727-MT Adv No: 1:19-ap-01135-MT

MEMORANDUM DECISION 15

Debtor(s). 16 T rial Date: Carmen Barton, Anthony Carthan Date: March 30, 2021 17 Time: 10:00am 18 Plaintiff(s), Courtroom: 302 (via ZoomGov)

v. 19

20 Tacarra Sheana Carthan 21

22 Defendant(s). 23 24 This matter arises from a heated child custody battle. On June 26, 2019, Anthony Carthan 25 and Carmen Barton ("Plaintiffs" or "Mr. Carthan" and "Ms. Barton") filed a small claims lawsuit 26 against Tacarra Sheana Carthan/Williams ("Defendant" or "Ms. Williams") in the Superior Court 27 of California, in Los Angeles (“Defamation Action”). The lawsuit was based on defamatory 28 statements that were published by Ms. Williams on her social media accounts alleging that the 1 Plaintiffs had been abusing the daughter of Mr. Carthan and Ms. Williams. The State Court 2 found that the Plaintiffs had met their burden under California Civil Code §45 and entered a 3 judgment in their favor. Plaintiffs’ Exhibit 15. Ms. Williams appealed this decision, but the State 4 Court affirmed the ruling and entered judgment against her for $8,295.00. Plaintiffs’ Exhibit 26. 5 Shortly after the State Court initially rendered judgment in the Defamation Action, Ms. 6 7 Williams commenced a lawsuit against the Plaintiffs alleging emotional distress. Plaintiffs’ 8 Exhibits 16. At the heart this lawsuit were the allegations of the Plaintiffs committing child abuse 9 that the State Court previously addressed in the Defamation Action. In response to Ms. Williams 10 commencing this new lawsuit, the Plaintiffs filled counterclaims for malicious prosecution. 11 Plaintiffs’ Exhibit 24. The Court will refer to Ms. Williams lawsuit and the Plaintiffs’ counter 12 claims as the “Malicious Prosecution Action.” The State Court conducted a trial over the span of 13 14 two days and on October 30, 2019, the State Court awarded the Plaintiffs a combined judgement 15 of $3,015.11 for their malicious prosecution claims and denied any award to Ms. Williams for 16 her claims of emotional distress. Plaintiffs’ Exhibit 29. 17 On October 30, 2019, Anthony initiated a proceeding requesting attorney’s fees related to 18 representation requested during a child custody proceeding. A hearing was scheduled to be heard 19 on November 27, 2019. It is not clear whether this hearing was held or was scheduled to be 20 21 heard. 22 On October 29, 2019, the Defendant filed a chapter 7 bankruptcy petition. On November 23 14, 2019, the Plaintiffs filed this adversary proceeding seeking to have the debt be deemed non- 24 dischargeable under §523(a)(6) for the two state court judgments awarded in the Plaintiffs’ 25 favor, having attorney’s fees requested in the family court be deemed non-dischargeable under 26 §523(a)(5) and objecting to the Defendant’ discharge under §727(a)(3). 27 28 On November 18, 2020, the Court granted summary judgment on the §523(a)(6) claim 1 for non-dischargability of the Defamation Action as to Ms. Barton – the Court denied summary 2 judgment as to as to the §523(a)(6) claim for non-dischargability of the Defamation Action as to 3 Mr. Carthan and denied summary judgment as to the §523(a)(6) claim for non-dischargability of 4 the Malicious Prosecution Action. 5 The Court conducted a trial on March 30, 2021. At trial, the Plaintiffs did not pursue their 6 7 §727 claim, Anthony’s §523(a)(6) defamation claim, and having the attorney’s fees requested in 8 the family court be deemed non-dischargeable under §523(a)(5) against Ms. Williams. The only 9 remaining issue that was tried was the Plaintiffs’ §523(a)(6) claim for non-dischargability as to 10 the Malicious Prosecution Action. Mr. Carthan and Ms. Barton represented themselves and both 11 testified at trial. Ms. Williams was represented by Daniel King and she testified as well. The 12 Court took the matter under advisement. Having considered the evidence submitted and the 13 14 parties’ testimony, the Court makes the following findings of fact and conclusions of law. 15 Malicious Prosecution: 16 On October 21, 2019, the State Court commenced trial on the Malicious Prosecution 17 Action. The trial was ultimately continued to October 30, 2019. Plaintiffs’ Exhibit 25. On 18 October 30, 2019, the State Court denied any award for Ms. Williams in her claims for emotional 19 distress and entered a judgment in favor of the Plaintiffs’ counterclaims for malicious 20 21 prosecution in the sum of $1,174.46 as to Ms. Barton and $1,840.65 as to Mr. Carthan. Plaintiffs’ 22 Exhibit 29. Ms. Williams had filed bankruptcy on October 29, 2019. The Plaintiffs testified that 23 they were unaware of Ms. Williams filing for bankruptcy until after the trial in the Malicious 24 Prosecution Action. The Court finds that Ms. Barton and Mr. Carthan were both completely 25 credible witness not only as to this point but as to the entirety of their testimony. Ms. Barton 26 testified that after the first day of trial, the State Court judge made clear that Ms. Williams’ 27 28 emotional distress claims were unfounded. Upon the filing of Ms. Williams’ bankruptcy an 1 automatic stay arose under §362 which would have stayed the Malicious Prosecution Action had 2 anyone known about the bankruptcy petition. The Plaintiffs did not seek relief from the 3 automatic stay to proceed with the Malicious Prosecution Action prior to judgment being 4 rendered. 5 “[J]udicial proceedings in violation of the automatic stay are void.” In re Gruntz at 1074 6 7 (quoting Phoenix Bond & Indemnity Co. v. Shamblin (In re Shamblin), 890 F.2d 123, 125 (9th 8 Cir. 1989)). An action that violates the stay is still void despite a party’s lack of knowledge of the 9 pending bankruptcy. See e.g., 40235 Washington Street Corporation v. Lusardi (In re Lusardi), 10 329 F.3d 1076 (9th Cir. 2003) (the Ninth Circuit deemed a county tax sale on real property void 11 even though neither the county nor the purchaser had knowledge of the bankruptcy case). 12 The judgment on the Malicious Prosecution Action is void even though neither the 13 14 Plaintffs nor the Superior Court were made aware of the bankruptcy filing. Because the 15 judgment is void, this Court must first address whether the Plaintiffs have satisfied their burden 16 in showing they are entitled to damages for a malicious prosecution action before the Court 17 determines non-dischargability. 18 Malicious Prosecution is a disfavored action. Daniels v. Robbins, 182 Cal. App. 4th, 204, 19 2016 (Ct App. 2010). This is due to the principles that favor open access to the courts for the 20 21 redress of grievances. Downey Venture v. LMI Ins. Co., 66 Cal.App.4th 478, 493 (Ct. App. 22 1998) “[T]he elements of the [malicious prosecution] tort have historically been carefully 23 circumscribed so that litigants with potentially valid claims will not be deterred from bringing 24 their claims to court by the prospect of a subsequent malicious prosecution claim.” Sheldon 25 Appel Co. v. Albert & Oliker 47 Cal.3d 863, 872 (1989). Three elements must be pleaded and 26 proved to establish the tort of malicious prosecution: (1) A lawsuit was “ ‘ “commenced by or at 27 28 the direction of the defendant [which] was pursued to a legal termination in … [the malicious 1 prosecution]plaintiff’s … favor” … (2) the prior lawsuit … “was brought without probable 2 cause”; and (3) the prior lawsuit “was initiated with malice. ” Citi-Wide Preferred Couriers, Inc. 3 v. Golden Eagle Ins. Corp. 114 Cal.App.4th 906, 911 (Ct. App. 2003). 4 The first element of a malicious prosecution cause of action is that the underlying case 5 must have been terminated in favor of the malicious prosecution plaintiff. “The basis of the 6 7 favorable termination element is that the resolution of the underlying case must have tended to 8 indicate the malicious prosecution plaintiff’s innocence. When prior proceedings are terminated 9 by means other than a trial, the termination must reflect on the merits of the case and the 10 malicious prosecution plaintiff’s innocence of the misconduct alleged in the underlying lawsuit.” 11 HMS Capital, Inc. v. Lawyers Title Co., 118 Cal. App. 4th 204, 214 (Ct App. 2004). If the 12 evidence of the circumstances of the termination is conflicted, “‘the determination of the reasons 13 14 underlying the dismissal is a question of fact.’” Sycamore Ridge Apartments LLC v. Naumann 15 157 Cal.App.4th 1385, 1399 (Ct. App. 2007). 16 As to the first element, Ms. Williams commenced a small claims lawsuit against the 17 Plaintiffs for emotional distress and the Plaintiffs filed a counter claim for malicious prosecution. 18 The lawsuit reached its termination when the State Court did not award Ms. Williams any 19 damages and found for the Plaintiffs. Plaintiffs’ Exhibit 29. Under different circumstances, this 20 21 would have satisfied the first element of a malicious prosecution action; however, Ms. Williams’ 22 bankruptcy makes this finding void. 23 The judgment is void not because of anything that goes to the merits of the Malicious 24 Prosecution Action, rather, it is void in large part because Ms. Williams failed to disclose to the 25 State Court that she had filed for bankruptcy the day before a judgment had been rendered. Ms. 26 Williams knew that the bankruptcy filing prevented collection efforts because, according to Ms. 27 28 Barton’s testimony, Ms. Williams informed the Plaintiffs immediately after the Malicious 1 Prosecution Action had ended and did not go her way that she had filed bankruptcy, and 2 gleefully told the Plaintiffs that were never going to be able to collect. Had the State Court 3 known of this filing, the trial would likely not have occurred, and the judgment would not be 4 void. Ms. Williams did not pursue this emotional distress claim any further and both parties 5 proceeded under the assumption that this judgement was a final and valid judgment until this 6 7 Court’s summary judgment ruling made clear that the judgment was void. The circumstance of 8 this small claims lawsuit’s termination shows that the matter was tried on its merits in favor of 9 the Plaintiffs and the judgment was void solely due a violation to the automatic stay. The Court 10 finds that the Plaintiffs satisfied the first element based on the evidence shown at both the 11 Superior Court trial and all that was repeated in this trial. Defendant had an opportunity in both 12 tribunals to adequately explain why she brought the emotional distress claims and failed to do so. 13 14 As to the second element, “without probable cause” the Ms. Williams’ action for 15 emotional distress predominately stemmed from the allegations of child abuse that had been 16 ruled without basis. See Plaintiffs’ Ex. 16. At trial, Ms. Williams testified that she believed 17 probable cause had existed because of comments made by her daughter implying the Plaintiffs 18 had been abusing the daughter. The Court does not find Ms. Williams credible as to this part of 19 her testimony and her position is not supported by the evidence, and she was not convincing that 20 21 she actually believed what she alleged. The evidence shows that at the time Ms. Williams filed 22 the emotional distress complaint, the allegations of child abuse had already been rejected. The 23 State Court already entered a judgment on the Defamation Action against Ms. Williams for 24 publishing false statements about child abuse. As truth is an absolute defense in a defamation 25 action, had the State Court found any truth to these allegations of child abuse the State Court 26 would not have awarded the Plaintiffs a judgment for defamation. Plaintiffs’ Exhibit 15. Further, 27 28 the Department of Child and Family Services (“DCFS”) had conducted its investigation into the 1 matter and found no signs of abuse. The Long Beach Police Depart concluded its investigation 2 and found no grounds to pursue it further. See Plaintiffs’ Exhibits 12 & 22. Other than 3 fabricating allegations of child abuse for custody purposes, Ms. Williams did not appear to have 4 a basis for probable cause to bring this cause of action against the Plaintiffs. The Plaintiffs 5 satisfied the second element of a lack of probable cause. 6 7 The malice element of the malicious prosecution tort goes to the defendant's subjective 8 intent in initiating the prior action. George F. Hillenbrand, Inc. v. Insurance Co. of North 9 American, 104 Cal. App. 4th 784, 814 (Ct. App. 2002). It is not limited to actual hostility or ill 10 will toward the plaintiff. Rather, malice is present when proceedings are instituted primarily for 11 an improper purpose. Suits with the hallmark of an improper purpose are those in which: ". . . 12 (1) the person initiating them does not believe that his claim may be held valid; (2) the 13 14 proceedings are begun primarily because of hostility or ill will; (3) the proceedings are initiated 15 solely for the purpose of depriving the person against whom they are initiated of a beneficial use 16 of his property; (4) the proceedings are initiated for the purpose of forcing a settlement which has 17 no relation to the merits of the claim." Sierra Club Foundation v. Graham, 72 Cal. App. 1135, 18 1156-57 (Ct. App. 1999). 19 As alluded to previously, Ms. Williams commenced this emotional distress claim after 20 21 the State Court rendered its ruling on the Defamation Action, after the DCFS conducted and 22 closed its investigation finding no evidence of child abuse, and after the Long Beach Police 23 Department concluded its investigation. While Ms. Williams testimony revealed a sincere 24 concern for her daughter’s wellbeing, the evidence shows that Ms. Williams could not have 25 believed she had a valid claim against the Plaintiffs. When considering the timing and the overall 26 behavior of the parties during this time frame, Ms. Williams’ motivation for commencing this 27 28 lawsuit becomes clear. From the record and the testimony provided by the parties, Ms. Williams 1 has developed a pattern of engaging in retaliatory behavior against the Plaintiffs anytime she 2 believes she has been wronged. For example, after the Plaintiffs complained that Ms. Williams 3 failed to deliver her daughter pursuant to a court ordered visitation schedule, she filed complaints 4 of child abuse with state agencies. After these agencies exonerated the Plaintiffs of any 5 wrongdoing, Ms. Williams took to social media to spread these false allegations. When it 6 7 became clear that Ms. Williams was going to lose the Malicious Prosecution Action she filed 8 bankruptcy the day before a judgment was rendered to prevent the Plaintiffs from collecting. 9 When the Plaintiffs began pursuing this adversary proceeding, Ms. Williams again took to social 10 media, raising the same debunked allegations. This type of behavior continued to this day, when 11 the Plaintiffs commenced another State Court action alleging similar causes of action as raised in 12 the Defamation Action due to Ms. Williams’ alleged continued defamatory remarks against the 13 14 Plaintiffs, Ms. Williams filed counterclaims against the Plaintiffs raising the same allegations of 15 child abuse which have been proven to be false. Plaintiffs’ Exhibit 31. This use of the courts and 16 social media to manipulate a family court proceeding is malicious and improper and do great 17 damage to all invloved. 18 The Malicious Prosecution Action was commenced almost immediately after the State 19 Court entered judgment against Ms. Williams on August 13, 2019. At the heart of that case were 20 21 the same underlying issues that the State Court had previously found to be false just a few days 22 prior. Even though Ms. Williams may believe these allegations were true, from the evidence and 23 testimony this Court has received no reasonable person would believe they had a viable claim 24 against the Plaintiffs. The sole purpose of the Malicious Prosecution Action was to continue 25 perpetuating the false allegations and to seek retribution against the Plaintiffs. The Plaintiffs have 26 satisfied their burden for prevailing on a malicious prosecution claim. 27 28 Damages: 1 Damages potentially recoverable in a malicious prosecution action are substantial. They 2 include out-of-pocket expenditures, such as attorney's and other legal fees . . .; business losses . . 3 .; general harm to reputation, social standing and credit . . .; mental and bodily harm . . .; and 4 exemplary damages where malice is shown . . . ." Babb v. Superior Court, 3 Cal.3d 841, 848, fn. 5 4 [1971). 6 7 Here, the Plaintiffs have submitted an itemized sheet outlining the damages they suffered 8 during this time period on the several cases pending in the State Court. Plaintiffs’ Exhibit 30. 9 The Court will only consider those damages that were incurred in defending and prosecuting the 10 Malicious Prosecution Action. Having preformed an independent review of the Plaintiffs’ exhibit 11 30, this Court believes that the original award of $3,015.11 that the State Court awarded reflects 12 a true and accurate amount in damages that the Plaintiffs suffered from their malicious 13 14 prosecution claims. These fees and costs reflect travel expenses, filing and other court fees, other 15 costs that were necessary for trial, legal fees, and lost wages – all of which are recoverable in a 16 malicious prosecution action. The Court awards the Plaintiffs $3,015.11 against Ms. Williams. 17 § 523(a) (6): 18 A debt is non-dischargeable under §523(a)(6) if it results from debtor's willful and 19 malicious injury to another or to the property of another. There are three elements required for a 20 21 §523(a)(6) action:(1) willfulness; (2) maliciousness and (3) injury. Smith v. Entepreneur Media, 22 Inc. (In re Smith) 2009 Bankr. LEXIS 4582, *20 (9th Cir. BAP 2009). The Supreme Court in 23 Kawaauhau v. Geiger (In re Geiger), 523 U.S. 57, 118 S.Ct. 974, 140 L. Ed. 2d 90 (1998), 24 clarified that for §523(a) (6) to apply, “the actor must intend the consequences of the act, not 25 simply the act itself." Ormsby v. First American Title Co. of Nevada (In re Ormsby), 591 F. 3d 26 1199, 1206 (9th Cir. 2010). Both willfulness and maliciousness must be proven to prevent 27 28 discharge of the debt. Id. But, reckless or negligent acts are not sufficient to establish that a 1 resulting injury falls within the category of willful and malicious injuries under §523(a)(6). 2 Kawaauhau v. Geiger, 523 U.S. at 64. 3 Willfulness means intent to cause injury. Kawaauhau v. Geiger, 523 U.S. at 61. "The 4 injury must be deliberate or intentional, 'not merely a deliberate or intentional act that leads to 5 injury.'" In re Plyam, 530 B.R. 456, 463 (9th Cir. BAP 2015) (quoting Kawaauhau v. Geiger, 523 6 7 U.S. at 61) The court may consider circumstantial evidence that may establish what the debtor 8 actually knew when conducting the injury creating action and not just what the debtor admitted 9 to knowing. In re Ormsby, 591 F. 3d at 1206. Recklessly inflicted injuries, covering injuries from 10 all degrees of recklessness, do not meet the willfulness requirement of § 523(a)(6). In re Plyam, 11 530 B.R. at 464. Reckless conduct requires an intent to act instead of an intent to cause injury. 12 Id. Therefore, the willful injury requirement "... is met only when the debtor has a subjective 13 14 motive to inflict injury or when the debtor believes that injury is substantially certain to result 15 from his own conduct." Carillo v. Su (In re Su), 290 F.3d 1140, 1142 (9th Cir. 2002). 16 The "malicious" injury requirement under 11 U.S.C. §523(a)(6) is separate from the 17 "willful" requirement, and both must be present for a claim under § 523(a) (6). Carillo v. Su (In 18 re Su), 290 F.3d 1146 (9th Cir. 2002). A malicious injury is one that involves; "(1) a wrongful 19 act, (2) done intentionally, (3) which necessarily causes injury, and (4) is done without just cause 20 21 or excuse." Petralia v. Jercich (In re Jercich), 238 F.3d 1202, 1209 (9th Cir. 2001). "Malice may 22 be inferred based on the nature of the wrongful act," but to make such an inference, willfulness 23 must be established first. Ormsby v. First Am. Title Co. (In re Ormsby), 591 F.3d 1199, 1207 24 (9th Cir. 2010). When analyzing the plain meaning of "malice," "it is the wrongful act that must 25 be committed intentionally rather than the injury itself." Jett v. Sicroff (In re Sicroff), 401 F.3d 26 1101, 1106 (9th Cir. 2005). 27 28 To satisfy the willful requirement, the Defendant must have intended to cause injury. As 1 the Court determined previously, there was no valid basis for filing the emotional distress cause 2 of action against the Plaintiffs. Further, the timing of when this lawsuit was commenced, and Ms. 3 Williams pattern of behavior strongly suggests that she sought to damage the ex-husband and his 4 new wife’s reputations by perpetuating the rejected child abuse claims or sought retribution for 5 other causes of action asserted in family Court by Plaintiff Anthony Carthan. Either of which 6 7 satisfies the willfulness requirement. Allegations of child abuse are serious and should not be 8 made to advance litigation purposes. Since there is no valid basis for asserting this emotional 9 distress claim, the Court can only find that the purpose of this lawsuit was to inflict damage on 10 the Plaintiffs. Accordingly, the willful requirement has been satisfied. 11 As to the malice requirement, malice requires: (1) a wrongful act, (2) done intentionally, 12 (3) which necessarily causes injury, and (4) is done without just cause or excuse. Commencing a 13 14 baseless lawsuit and wasting judicial resources for the purpose of inflicting injury or revenge on 15 a party can only be defined as a wrongful act. Further, the filing of this emotional distress case 16 was filed intentionally for the wrongful purposes. Ms. Williams filed this cause of action against 17 the Plaintiffs with no credible evidence or testimony supporting her claim. Her main goal was to 18 seek retribution against the Plaintiffs, and she knew what she was doing. Additionally, the filing 19 of this emotional distress case injured the Plaintiffs by having to defend against this claim and 20 21 prosecute a malicious prosecution counterclaim. Finally, there was no cause or excuse, other than 22 revenge, for commencing this matter. The Court finds that the malice requirement has been 23 satisfied. Accordingly, the claim Plaintiffs claim of $3,015.11 for malicious prosecution is non- 24 dischargeable under Section 523(a)(6). 25 Conclusion: 26 Perhaps the credible part of Ms. Williams testimony was her concluding remarks 27 28 apologizing to the Plaintiffs and offering an olive branch of peace to work through their 1 || problems. While this does not absolve her of her past actions, the Court is pleased to hear that 2 || there might be a path forward for healing between the parties. Divorce and break ups can be 3 extremely difficult, but the impacts of a bitter separation on a young child can be devasting. The court sincerely hopes the parties should consider working through their issues and disputes if not

6 for their own peace of mind than for their daughter. Plaintiffs decided not to pursue the □□□□ 7 of action in an effort to help Defendant get back on her feet and in the interests of the 8 || child. They testified that the §523(a)(6) cause of was necessary to stop repeated lawsuits from 9 |! Defendant. 10 For the reasons previously articulated, the Court finds that the Plaintiffs have satisfied their burden for seeking damages for malicious prosecution, that damages in the amount of

43 $3,015.11 are awarded, and that this debt is non-dischargeable under §523(a)(6). The §727 44 ||causes of action is dismissed with prejudice. Plaintiff Anthony Carthan’s claims under 15 || §523(a)(5) is denied without prejudice to renew in Superior Court as the family law matters were 16 || not resolved at the time of this trial. No evidence was presented on the amount or finality of any 7 domestic support obligation award, so that would be resolved at a later date. A judgment will accompany this memorandum decision that incorporates the earlier

99 || Summary judgment for non-dischargability of the defamation action. 4 HH 22 23 Meru A JI phe 25 Date: April 13, 2021 Maureen A. Tighe 26 United States Bankruptcy Judge 27 28