FILED JUN 08 2016 1 NOT FOR PUBLICATION 2 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. CC-15-1379-TaLKi ) 6 LORNA J. RILEY, ) Bk. No. 2:13-bk-36193-RN ) 7 Debtor. ) Adv. No. 2:14-ap-01422-RN ______________________________) 8 ) CALIFORNIA CAPITAL INSURANCE ) 9 COMPANY, ) ) 10 Appellant, ) ) 11 v. ) MEMORANDUM* ) 12 LORNA J. RILEY, ) ) 13 Appellee.** ) ______________________________) 14 Submitted Without Oral Argument*** on May 19, 2016 15 Filed – June 8, 2016 16 Appeal from the United States Bankruptcy Court 17 for the Central District of California 18 Honorable Richard M. Neiter, Bankruptcy Judge, Presiding 19 Appearance: Bruce N. Graham of Graham & Associates on brief for appellant. 20 21 * This disposition is not appropriate for publication. 22 Although it may be cited for whatever persuasive value it may 23 have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8024-1(c)(2). 24 ** Appellee did not file a brief; pursuant to the BAP Clerk 25 of Court’s conditional order of waiver, she waived the right to 26 appear in this appeal. *** 27 The Panel unanimously determined that the appeal was suitable for submission on the briefs and record pursuant to 28 Bankruptcy Rule 8019(b)(3). 1 Before: TAYLOR, LANDIS,**** and KIRSCHER, Bankruptcy Judges. 2 INTRODUCTION 3 California Capital Insurance Company appeals from the 4 bankruptcy court’s judgment in favor of Debtor Lorna Riley in an 5 adversary proceeding objecting to discharge of its claim under 6 § 523(a)(6).1 7 We AFFIRM. 8 FACTS2 9 Prepetition, Appellant commenced an action against the 10 Debtor and her family in California state court. The Debtor and 11 **** 12 The Honorable August B. Landis, United States Bankruptcy Judge for the District of Nevada, sitting by 13 designation. 14 1 Unless otherwise indicated, all chapter and section 15 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532. All “Rule” references are to the Federal Rules of Bankruptcy 16 Procedure. All “Civil Rule” references are to the Federal Rules of Civil Procedure. 17 2 18 Appellant requests that the Panel take judicial notice of four state court records. It, however, neither filed these 19 documents with the bankruptcy court nor submitted them as evidentiary exhibits at trial. We normally do not consider 20 documents that were not presented to the bankruptcy court. See 21 United States v. Elias, 921 F.2d 870, 874 (9th Cir. 1990). That said, the trial transcript shows that the bankruptcy 22 court reviewed the state court complaint. There is no indication on this record that there was an amended state court 23 complaint. Thus, we grant the request in part and take judicial 24 notice of the state court complaint. We also take judicial notice of the state court judgment 25 pursuant to Federal Rule of Evidence 201. We recognize that, with few exceptions, parties may not supplement the record on 26 appeal. See Lowry v. Barnhart, 329 F.3d 1019, 1024-25 (9th Cir. 27 2003). Nonetheless, the Debtor has not appeared in this appeal and one of the issues on appeal is the preclusive effect of the 28 state court judgment.
2 1 her husband rented a house (the “Property”) from Appellant’s 2 insured; they were later evicted for failure to pay rent. The 3 complaint asserted three cause of actions: (1) breach of 4 contract; (2) the intentional torts of willful misconduct and 5 private nuisance; and (3) general negligence. As to each cause 6 of action, the complaint alleged the same facts: that the Debtor 7 (and her family) 8 [C]aus[ed] or fail[ed] to prevent the vandalizing of the [Property], by cutting the carpet and carpet pad, 9 spilling paint on the carpet and bathroom floor of the [Property], painting profanities on the walls of the 10 [Property], leaving trash throughout the [Property], smashing the masterbath sink with such force that the 11 sink cracked, and otherwise damaging the [Property]. 12 R., Ex. J at 88-92. 13 The state court subsequently struck the Debtor’s answer to 14 the complaint and entered default against her. Appellant 15 eventually obtained a default judgment against the Debtor and 16 her husband and an award of compensatory damages in the 17 principal amount of $20,824.95, plus fees and costs. The Debtor 18 later filed for bankruptcy. 19 As relevant to this appeal,3 the adversary complaint sought 20 a determination that the debt owed to Appellant was excepted 21 from discharge pursuant to § 523(a)(6) based on the issue 22 preclusive effect of the state court judgment. 23 In the course of discovery, Appellant served requests for 24 admission (“RFAs”) on the Debtor. The Debtor never responded. 25 Indeed, she did little in the adversary proceeding until the eve 26 3 27 The adversary complaint also asserted a § 523(a)(4) claim, which the bankruptcy court also denied. Appellant 28 expressly abandons the § 523(a)(4) claim for relief on appeal.
3 1 of trial when she requested a continuance. 2 Although both Appellant and the Debtor appeared at trial, 3 the bankruptcy court did not take any testimony.4 It first 4 explained the effects of the Debtor’s nonparticipation in the 5 state court proceeding, including entry of the default judgment. 6 Turning to Appellant, the bankruptcy court, however, concluded 7 that the state court default judgment did not establish 8 § 523(a)(6) nondischargeability. It also concluded that the 9 RFAs constituted improper conclusions of law under Civil 10 Rule 36(a) and, thus, that they did not provide an independent 11 basis for Appellant’s § 523(a)(6) claim. As there was no 12 additional evidence introduced at trial, the bankruptcy court 13 entered judgment for the Debtor. 14 Appellant subsequently appealed.5 15 JURISDICTION 16 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 17 §§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C. 18 § 158. 19 ISSUE 20 Whether the bankruptcy court erred in determining that the 21 state court judgment was not excepted from discharge under 22 § 523(a)(6). 23 /// 24 25 4 At a pretrial conference, Appellant had advised the bankruptcy court that it would submit on its papers and the 26 RFAs. 27 5 The bankruptcy court granted Appellant’s timely request 28 to extend the time to appeal pursuant to Rule 8002(d).
4 1 STANDARDS OF REVIEW 2 We review de novo the bankruptcy court’s determination of 3 whether a particular debt is excepted from discharge under 4 § 523(a)(6). Plyam v. Precision Dev., LLC (In re Plyam), 5 530 B.R. 456, 461 (9th Cir. BAP 2015); see also Carrillo v. Su 6 (In re Su), 290 F.3d 1140, 1142 (9th Cir. 2002) 7 (nondischargeability presents mixed issues of law and fact and 8 is reviewed de novo). 9 We also review de novo the bankruptcy court’s decision as 10 to the availability of issue preclusion. In re Plyam, 530 B.R. 11 at 461. If issue preclusion was available, we then review the 12 bankruptcy court’s application of issue preclusion for an abuse 13 of discretion. Id. A bankruptcy court abuses its discretion if 14 it applies the wrong legal standard, misapplies the correct 15 legal standard, or if its factual findings are illogical, 16 implausible, or without support in inferences that may be drawn 17 from the facts in the record. See TrafficSchool.com, Inc. v. 18 Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011) (citing United 19 States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) 20 (en banc)). 21 Finally, we review de novo the bankruptcy court’s 22 interpretation and application of the procedural rules. See 23 Jackson v. United States (In re Jackson), 541 B.R. 887, 890 (9th 24 Cir. BAP 2015). 25 DISCUSSION 26 Appellant contends that the bankruptcy court erred in 27 determining that the state court judgment was not excepted from 28 discharge under § 523(a)(6) for three reasons: first, by
5 1 declining to give issue preclusive effect to the judgment; 2 second, by determining that the state court’s terminating 3 sanction against the Debtor did not constitute a willful and 4 malicious injury; and, third, by determining that the RFAs did 5 not conclusively establish the existence of a willful and 6 malicious injury. We conclude that there was no error in the 7 bankruptcy court’s determinations. 8 Section 523(a)(6) excepts from discharge debts arising from 9 a debtor’s “willful and malicious” injury to another person or 10 to the property of another. Barboza v. New Form, Inc. 11 (In re Barboza), 545 F.3d 702, 706 (9th Cir. 2008). The 12 “willful” and “malicious” injury requirements are conjunctive 13 and subject to separate analysis. Id.; In re Su, 290 F.3d at 14 1146–47. 15 An exacting requirement, the willful injury requirement is 16 satisfied when a debtor harbors “either a subjective intent to 17 harm, or a subjective belief that harm is substantially 18 certain.” In re Su, 290 F.3d at 1144; see also Petralia v. 19 Jercich (In re Jercich), 238 F.3d 1202, 1208 (9th Cir. 2001). 20 “A willful injury is a deliberate or intentional injury, not 21 merely a deliberate or intentional act that leads to injury.” 22 In re Barboza, 545 F.3d at 706 (quoting Kawaauhau v. Geiger, 23 523 U.S. 57, 61 (1998)) (internal quotation marks omitted). As 24 a result, “debts arising from recklessly or negligently 25 inflicted injuries do not fall within the compass of 26 § 523(a)(6).” Geiger, 523 U.S. at 64. Thus, as this Panel has 27 stated, “the Supreme Court in Geiger effectively adopted a 28 narrow construction and the most blameworthy state of mind” as
6 1 that required for § 523(a)(6) nondischargeability. In re Plyam, 2 530 B.R. at 464. 3 The malicious injury requirement is established where there 4 is: “(1) a wrongful act, (2) done intentionally, (3) which 5 necessarily causes injury, and (4) is done without just cause or 6 excuse.” In re Jercich, 238 F.3d at 1209. 7 Save for certain situations not applicable here,6 8 § 523(a)(6) is predicated on the existence of an intentional 9 tort. See Geiger, 523 U.S. at 61, 64 (observing that “the 10 [§ 523](a)(6) formulation triggers in the lawyer’s mind the 11 category ‘intentional torts,’ as distinguished from negligent or 12 reckless torts.”) (citation omitted). Whether there exists an 13 intentional tort is typically informed by state law. See 14 generally Lockerby v. Sierra, 535 F.3d 1038, 1041 (9th Cir. 15 2008). 16 A. The state court’s terminating sanction did not support 17 § 523(a)(6) nondischargeability. 18 Appellant argues that the state court’s terminating 19 sanction against the Debtor (that is, striking the Debtor’s 20 answer to the state court complaint) supplied an alternative 21 basis for nondischargeability. We disagree. 22 The bankruptcy court did not make any specific findings in 23 relation to the terminating sanction, and we cannot determine 24 the basis for the sanction on this record. At trial, the Debtor 25 asserted that her form of answer was procedurally defective. 26 27 6 E.g., a criminal violation or a tort-like statutory 28 violation may also suffice for § 523(a)(6) nondischargeability.
7 1 Appellant, on the other hand, alleged that the sanction followed 2 violation of multiple state court orders. Thus, the sanction 3 arose either from the Debtor’s ineptitude or from more serious 4 failures to properly engage in the state court litigation. 5 We need not remand for resolution of this question, 6 however, because whatever the basis for the terminating sanction 7 it was not an act that gave rise to the injury to the Property. 8 And only the claim for injury to the Property formed the basis 9 for the complaint’s § 523(a)(6) nondischargeability claim. 10 There was no attempt before the bankruptcy court or on appeal to 11 monetize the alleged injury relating to the terminating 12 sanction, to explain the alleged injury, or to discuss why any 13 such injury was willful and malicious. 14 B. The state court judgment failed to establish all elements 15 of Appellant’s § 523(a)(6) claim. 16 The bankruptcy court may give issue preclusive effect to a 17 state court judgment as the basis for excepting a debt from 18 discharge. Harmon v. Kobrin (In re Harmon), 250 F.3d 1240, 1245 19 (9th Cir. 2001). We apply the forum state’s law of issue 20 preclusion. Id. 21 California permits application of issue preclusion to an 22 existing judgment: (1) after final adjudication; (2) of an 23 identical issue; (3) actually litigated in the former 24 proceeding; (4) necessarily decided in the former proceeding; 25 and (5) asserted against a party in the former proceeding or in 26 privity with that party. See DKN Holdings LLC v. Faerber, 27 61 Cal. 4th 813, 825 (2015). In addition, the court must 28 determine that issue preclusion “furthers the public policies
8 1 underlying the doctrine.” In re Harmon, 250 F.3d at 1245 2 (citing Lucido v. Super. Ct., 51 Cal. 3d 335, 342-42 (1990)); 3 see also Khaligh v. Hadaegh (In re Khaligh), 338 B.R. 817, 4 824–25 (9th Cir. BAP 2006). 5 A default judgment is not excluded from an application of 6 issue preclusion; but “the issue must have been ‘necessarily 7 litigated’ in the action resulting in the default judgment.” 8 In re Harmon, 250 F.3d at 1246 n.5 (citation omitted). This 9 requirement, in turn, “imposes two separate conditions: the 10 issue must have been ‘actually litigated’ and it must have been 11 ‘necessarily decided’ by the default judgment.” Id. (citation 12 omitted). Preclusive application to such a judgment, however, 13 is limited to the allegations and causes of action as set forth 14 in the complaint. See Cal. Civ. Proc. Code § 580; 15 In re Williams’ Estate, 36 Cal. 2d 289, 293 (1950) (“Of course, 16 a court in a default action may not grant relief beyond that 17 which is demanded in the complaint. . . .”). 18 The party asserting preclusion bears the burden of 19 establishing the threshold requirements. In re Harmon, 250 F.3d 20 at 1245. This means providing “a record sufficient to reveal 21 the controlling facts and pinpoint the exact issues litigated in 22 the prior action.” Kelly v. Okoye (In re Kelly), 182 B.R. 255, 23 258 (9th Cir. BAP 1995), aff’d, 100 F.3d 110 (9th Cir. 1996). 24 Ultimately, “[a]ny reasonable doubt as to what was decided by a 25 prior judgment should be resolved against allowing the [issue 26 preclusive] effect.” Id. 27 On appeal, Appellant does not address with particularity 28 any of the elements of issue preclusion. But, on de novo
9 1 review, we conclude that issue preclusion was unavailable. The 2 bankruptcy court, thus, correctly declined to give preclusive 3 effect to the state court judgment. 4 1. The allegations as pled in the state court complaint 5 did not include the § 523(a)(6) willful injury 6 requirement. 7 Each of the three causes of action in the state court 8 complaint asserted the same exact allegation: that the Debtor 9 either caused or failed to prevent the “vandalizing” of the 10 Property, followed by a descriptive paragraph of the damage. 11 This allegation, however, does not plainly equate to an 12 allegation that the Debtor subjectively intended to damage the 13 landlord or the Property or that she was substantially certain 14 that damage would occur. 15 Appellant maintains that, based on the default judgment, 16 the Debtor admitted that she was liable for the damages because 17 she “caus[ed] . . . the vandalizing of the [Property] . . . .” 18 Apl’t Op. Br. at 11. This is an overstatement. Appellant 19 disingenuously omits from the complaint’s quoted language the 20 phrase “or fail[ed] to prevent.” Emphasis added. This 21 disjunctive allegation bars the application of issue preclusion 22 here. 23 An alleged failure to do an act may be merely negligent. 24 See Restatement (Second) of Torts § 282 (1965) cmt. a 25 (“Negligent conduct may consist either of an act . . . or an 26 omission to act when there is a duty to do so. . . .”) (emphasis 27 added); id. § 284(b) (defining negligent conduct as “a failure 28 to do an act which is necessary for the protection or assistance
10 1 of another and which the actor is under a duty to do.”); 2 CACI 401 (Negligence - Basic Standard of Care), Judicial Council 3 of Cal. Civ. Jury Instrs. (2011) (“A person can be negligent by 4 acting or by failing to act. A person is negligent if he or she 5 . . . fails to do something that a reasonably careful person 6 would do in the same situation.”) (emphasis added). 7 Here, the default judgment determined that the Debtor 8 either damaged the Property or failed to prevent others from 9 doing so. Thus, the default judgment did not necessarily decide 10 that an intentional tort and injury occurred and left open the 11 possibility that the Debtor acted with mere negligence. Again, 12 a negligently inflicted injury cannot support § 523(a)(6) 13 nondischargeability.7 14 2. The state court judgment’s ambiguity bars application 15 of issue preclusion. 16 The state court judgment contains no factual findings or 17 conclusions of law; it simply grants judgment in Appellant’s 18 favor against the Debtor and her husband and awards damages in 19 the amount sought in the state court complaint. We cannot tell 20 whether the state court judgment was based equally on each cause 21 7 22 Appellant’s argument that the breach of contract cause of action was nondischargeable under § 523(a)(6) based on state 23 public policy also fails. In California, tortious breach of 24 contract involves “[c]onduct...[that] becomes tortious only when it also violates an independent duty arising from principles of 25 tort law.” In re Jercich, 238 F.3d at 1206 (internal quotation marks and citation omitted). Appellant did not adequately plead 26 this theory of recovery in the state court complaint. But even 27 if we assume that the contract claim was tortious, the Debtor’s failure to act did not require a conclusion that the breach 28 resulted from more than negligence.
11 1 of action in the state court complaint or rested on only one 2 theory of recovery. In the absence of an express determination 3 to the contrary, we must infer that the state court granted the 4 judgment in the disjunctive. Thus, we cannot rule out the 5 possibility that the basis of recovery was the cause of action 6 asserting general negligence. Again, a negligently inflicted 7 injury can never support a determination of § 523(a)(6) 8 nondischargeability. Geiger, 523 U.S. at 64. This reasonable 9 doubt enjoins the Appellant’s reliance on issue preclusion and 10 the state court judgment. See In re Kelly, 182 B.R. at 258. 11 3. Neither of the intentional torts asserted in the state 12 court complaint satisfy the § 523(a)(6) willful injury 13 requirement. 14 Private nuisance. In California, every nuisance that is 15 not public is considered a private nuisance. Cal. Civ. Code 16 § 3481. A nuisance is defined as “[a]nything which is . . . an 17 obstruction to the free use of property, so as to interfere with 18 the comfortable enjoyment of life or property . . . .” Id. 19 § 3479. 20 Here, the private nuisance cause of action alleged, in 21 the alternative, that the Debtor failed to prevent the damage. 22 Where a defendant’s failure to abate the nuisance gives rise to 23 liability, “then negligence is said to be involved.” City of 24 Pasadena v. Super. Ct., 228 Cal. App. 4th 1228, 1236 (2014) 25 (quoting Lussier v. San Lorenzo Valley Water Dist., 206 Cal. 26 App. 3d 92, 105 (1988)). Once again, negligence is insufficient 27 to establish the § 523(a)(6) state of mind. 28 ///
12 1 Willful Misconduct.8 In the civil context, “[w]illful 2 misconduct is an aggravated form of negligence.” Carlsen v. 3 Koivumaki, 227 Cal. App. 4th 879, 895 (2014). The elements 4 necessary “to raise a negligent act to the level of wil[l]ful 5 misconduct [are]: (1) actual or constructive knowledge of the 6 peril to be apprehended, (2) actual or constructive knowledge 7 that injury is a probable, as opposed to a possible, result of 8 the danger, and (3) conscious failure to act to avoid the 9 peril.” Id. Importantly, however, willful misconduct does not 10 require a subjective intent to injure - “[i]t is sufficient that 11 a reasonable person under the same or similar circumstances 12 would be aware of the highly dangerous character of his or her 13 conduct.” Calvillo-Silva v. Home Grocery, 19 Cal. 4th 714, 730 14 (1998), disapproved on other grounds, Aguilar v. Atl. Richfield 15 Co., 25 Cal. 4th 826 (2001). In other words, willful misconduct 16 may be based on reckless conduct. Once again, a recklessly 17 inflicted injury does not satisfy the § 523(a)(6) willful injury 18 requirement. 19 We finally note that it is inconsequential that the state 20 court complaint – in the form’s boilerplate text – stated that 21 the Debtor “intentionally caused the damage to plaintiff” in 22 connection with the intentional tort causes of action. The 23 torts as asserted did not require an intent to injure. 24 /// 25 26 8 The California Supreme Court has declined to determine 27 whether willful misconduct constitutes an independent cause of action. Nalwa v. Cedar Fair, L.P., 55 Cal. 4th 1148, 1164 n.8 28 (2012).
13 1 C. The majority of the RFAs did not call for improper legal 2 conclusions; any error, however, was harmless because the 3 RFAs failed to establish all elements required for 4 § 523(a)(6) nondischargeability. 5 Appellant finally argues that the bankruptcy court erred in 6 determining that the RFAs constituted improper legal conclusions 7 under Civil Rule 36. While largely true, we conclude that any 8 resultant error was harmless. 9 Civil Rule 36(a)(1) (made applicable in adversary 10 proceedings by Rule 7036) authorizes a party to request 11 admission of any matter within the scope of Civil Rule 26(b)(1), 12 relating to “facts, the application of law to fact, or opinions 13 about either.” Requests for pure admissions of law, however, 14 are inappropriate. 7 James Wm. Moore et al., Moore’s Federal 15 Practice - Civil § 36.03 (3d ed.); 8B Charles Alan Wright et 16 al., Federal Practice and Procedure § 2255 & n.7 (3d ed.). 17 Litigants are discouraged from using Civil Rule 36 with “the 18 hope that a party’s adversary will simply concede essential 19 elements.” Conlon v. United States, 474 F.3d 616, 622 (9th Cir. 20 2007). “Rather, the rule seeks to serve two important goals: 21 truth-seeking in litigation and efficiency in dispensing 22 justice.” Id. 23 Where a party fails to timely respond in writing to 24 requests for admissions, the matters are deemed admitted and 25 conclusively established in the case; such admissions are self- 26 executing and require no further action by the proponent or the 27 court. Fed. R. Civ. P. 36(a)(3), (b). Admittedly, “[Civil] 28 Rule 36 is harsh in its consequences to the dilatory litigant.
14 1 Failure to respond within the thirty-day time frame 2 automatically results in a material fact being deemed 3 admitted. . . .” Warren v. Cybulski, --- B.R. ----, 2016 WL 4 1176398, at *5 (N.D. Cal. Mar. 28, 2016). 5 The record establishes that the Debtor neither responded to 6 the RFAs nor moved to amend or withdraw them pursuant to Civil 7 Rule 36(b). Thus, the RFAs were deemed admitted to the extent 8 that the requests fell within the scope of Civil Rule 36(a)(1). 9 The bankruptcy court, however, broadly determined that the RFAs 10 did not provide sufficient support for Appellant’s 11 nondischargeability claim; it stated that they all called for 12 conclusions of law. This was error. The record reflects that 13 many RFAs related to factual matters.9 Those RFAs, however, did 14 not independently or collectively establish that § 523(a)(6) 15 nondischargeability was appropriate; thus, the error as to those 16 RFAs was harmless. The remainder of the RFAs were either 17 irrelevant to the § 523(a)(6) claim,10 failed to establish an 18 injury for the purposes of § 523(a)(6),11 were fatally 19 ambiguous12 or, as more generally noted by the bankruptcy court, 20 21 9 RFA Nos. 1-4, 8-9, and 11 (in part) relate to background 22 facts. 23 10 RFA No. 7 predominately pertains to the § 523(a)(4) 24 claim that Appellant has abandoned on appeal. The factual portion of the RFA is duplicative of the factual portion of 25 RFA No. 6, which we discuss hereafter. 26 11 RFA Nos. 10 and 11 (in part) relate to the argument that 27 we rejected in section A, supra, of this decision.
28 12 See discussion regarding RFA Nos. 5 and 6 below.
15 1 improperly called for conclusions of law.13 2 1. The RFAs utilized over-broad definitions that 3 eliminated their utility in material respects. 4 The draconian consequence of failure to respond to a 5 request for admission is limited by the requirement that the 6 request be clear. Ambiguity must be construed against the 7 drafter. Here, as with the state court complaint, Appellant 8 utilized over-broad definitions that make the RFAs imprecise and 9 limit their utility in establishing all elements of its 10 § 523(a)(6) claim. 11 As is common practice, the RFAs were prefaced with global 12 terms and definitions. This included that “‘Defendant’, shall 13 be deemed to mean Lorna J. Riley, as well as her agents, 14 attorneys, representatives or any other person acting on her 15 behalf and direction.” Emphasis added. RFA Nos. 5 and 6 also 16 reference the Debtor’s family. Appellant’s inclusion of these 17 other entities in the global definition of defendant creates 18 ambiguity as to what the Debtor did; as a result, RFA Nos. 5 and 19 6 fail to establish that the Debtor herself vandalized the 20 Property willfully and maliciously. Thus, RFA Nos. 5 and 6 fail 21 to conclusively establish that the Debtor personally committed 22 all or any of the damaging acts. 23 Section 523(a)(6) clearly requires a “willful and malicious 24 injury by the debtor. . . .” RFA Nos. 5 and 6, however, meet 25 this standard only if one imputes to the Debtor the knowledge 26 and intent of unknown agents, representatives, or other person 27 28 13 See discussion regarding RFA Nos. 6 and 12 below.
16 1 acting on her behalf or at her unspecified direction. Such an 2 application involves inappropriate speculation and calls for an 3 extremely attenuated conclusion of law with respect to agency. 4 We, like the bankruptcy court, are unable to determine that 5 the Debtor acted with willfulness and malice based on the 6 admissions made by the RFAs when they leave open the possibility 7 that the damage to the Property was done by others. And we, 8 like the bankruptcy court, reach this conclusion notwithstanding 9 that the Debtor may have had an unspecified agency relationship 10 with these third parties and may have directed them in an 11 unspecified manner.14 12 /// 13 /// 14 14 15 The Ninth Circuit has imputed the knowledge and intent of a business partner to a debtor for the purposes of 16 § 523(a)(6). See Impulsora Del Territorio Sur, S.A. v. Cecchini (In re Cecchini), 780 F.2d 1440 (9th Cir. 1986). This case, 17 however, provides no assistance to Appellant for several 18 reasons. First, the Cecchini decision predates Geiger and did not require an intent to injure. See id. at 1442–43. As the 19 Panel stated in Sachan v. Huh (In re Huh), 506 B.R. 257, 268 (9th Cir. BAP 2014) (en banc), “the lack of a specific intent to 20 injure holding in Cecchini was effectively overruled by the 21 Supreme Court in its Geiger decision. Consequently, the continued efficacy of Cecchini as precedent on related questions 22 is compromised.” See also Peklar v. Ikerd (In re Peklar), 260 F.3d 1035, 1038 (9th Cir. 2001) (recognizing the limitation 23 of Cecchini following Geiger). Second, to the extent Cecchini 24 has continued viability, it can be factually distinguished. There is no evidence of a business partnership here; we cannot 25 utilize the principles of partnership law to impute liability as the Cecchini court did. See id. at 1444. This conservative 26 treatment of § 523 is consistent with more recent Supreme Court 27 decisions in this area. See Bullock v. BankChampaign, N.A., 133 S. Ct. 1754 (2013). But cf. Husky Int’l Elecs., Inc. v. 28 Ritz, 136 S.Ct. 1581 (2016).
17 1 2. RFA Nos. 6 and 12 improperly requested conclusions of 2 law. 3 “The distinction between the application of law to fact and 4 a legal conclusion is ‘not always easy to draw.’” Watterson v. 5 Garfield Beach CVS LLC, 2015 WL 2156857, at *4 (N.D. Cal. May 7, 6 2015) (quoting Apple, Inc. v. Samsung Elec. Co., Ltd., 2012 WL 7 952254, at *3 (N.D. Cal. Mar. 20, 2012)). An application of law 8 to fact relates to “matters involving ‘mixed law and fact’” and 9 is intended to narrow the range of issues for trial. Fed. R. 10 Civ. P. 36 advisory committee’s note to 1970 amendment, 11 subdivision (a); see also Asea, Inc. v. S. Pac. Transp. Co., 12 669 F.2d 1242, 1245 (9th Cir. 1981). 13 A mixed question of law and fact, in turn, pertains to 14 “questions in which the historical facts are admitted or 15 established, the rule of law is undisputed, and the issue is 16 whether the facts satisfy the statutory standard, or to put it 17 another way, whether the rule of law as applied to the 18 established facts is or is not violated.” Pullman-Standard v. 19 Swint, 456 U.S. 273, 289 n.19 (1982).15 Courts generally agree 20 that a request for admission is an application of law to fact 21 “as long as the legal conclusions relate to the facts of the 22 case.” Ransom v. United States, 8 Cl. Ct. 646, 648 (1985); see 23 also Fed. R. Civ. P. 36 advisory committee’s note to 1970 24 15 25 In the context of issue preclusion, the application of law to fact has also been described as an “ultimate fact.” See 26 Restatement (Second) of Judgments § 27 (1982) cmts. c, j; see 27 also United States v. Hernandez, 572 F.2d 218, 221 n.3 (9th Cir. 1978) (recognizing the Restatement’s definition of an ultimate 28 fact).
18 1 amendment, subdivision (a) (Civil Rule 36 “does not authorize 2 requests for admissions of law unrelated to the facts of the 3 case.”).16 4 RFA No. 6 called for the Debtor to admit or deny that: 5 “[t]he damage to the premises was done by the [Debtor] and her 6 family willfully and maliciously as those terms are used in 7 . . . [§] 523(a)(6).” Contrary to Appellant’s assertion, this 8 was not an application of law to fact. 9 This RFA was an improper request for a legal conclusion: 10 that the injury - damage to the Property - was willful and 11 malicious. The phrase mirrors the terms of the statutory 12 language, terms that have particularized meanings in bankruptcy. 13 Rather than frame questions in relation to the particular facts 14 16 15 Other courts have deemed the following requests for admission a legal conclusion: 16 C Defendant’s apartments did not have and were not built with an accessible route in compliance with the Federal Fair 17 Housing Act Regulations, 24 CFR 100.205, Stein v. Creekside 18 Seniors, L.P., 2016 WL 912176, at *2 & n.4 (D. Idaho Mar. 4, 2016). 19 C Defendant’s products were defective under Oregon state law, Benson Tower Condo. Owners Ass’n v. Victaulic Co., 105 F. 20 Supp. 3d 1184, 1196 (D. Or. 2015). 21 C An attack on plaintiff’s computer network and communication infrastructure referred to in the complaint constituted an 22 illegal act, Music Grp. Macao Commercial Offshore Ltd. v. Foote, 2015 WL 579688, at *2 (N.D. Cal. Feb. 11, 2015). 23 C Perjury is a felony, peace officers should not commit 24 perjury, committing perjury as a peace officer can lead to criminal charges, and defendant owed a duty to disclose to 25 plaintiff all exculpatory evidence in any criminal case. Hupp v. San Diego Cty., 2014 WL 1404510, at *15 (S.D. Cal. 26 Apr. 10, 2014). 27 C The defendant was a public figure as defined by case authority. Playboy Enters., Inc. v. Welles, 60 F. Supp. 2d 28 1050, 1057 (S.D. Cal. 1999).
19 1 of the case, Appellant simply skipped to the conclusion 2 necessary to except the debt from discharge: that the damage was 3 willful and malicious. Admission of this RFA would leave the 4 bankruptcy court with nothing to do but rubber stamp a judgment 5 in Appellant’s favor.17 This result would also run afoul of the 6 caution advised by the Ninth Circuit, to refrain from using 7 Civil Rule 36 as a mechanism to obtain concessions from the 8 adverse party on essential elements. See Conlon, 474 F.3d at 9 622.18 10 Similarly, RFA No. 12 improperly requested an admission of 11 ultimate liability. And, contrary to Appellant’s argument, 12 RFA No. 12 clearly requests a legal conclusion as it requests 13 admission that: “[Debtor’s] liability to [Appellant] in the 14 judgment in the suit is non-dischargeable.” Nondischargeability 15 16 17 Our conclusion is bolstered by other bankruptcy cases involving requests for admissions in a nondischargeability 17 proceeding. See, e.g., Warren v. Cybulski, --- B.R. ---, 18 2016 WL 1176398, at *5-6; Loucas v. Cunningham (In re Cunningham), 526 B.R. 578, 588 (Bankr. E.D. Pa. 2015); 19 Heritage Pac. Fin., LLC v. Trejo (In re Trejo), 2011 WL 5557423, at *3 (Bankr. N.D. Cal. Nov. 3, 2011), aff’d, 2012 WL 6622617 20 (9th Cir. BAP Dec. 20, 2012). 21 18 See also Veasley ex rel. Veasley v. United States, 22 2015 WL 1013699, at *4 (S.D. Cal. Mar. 9, 2015) (plaintiffs’ requests for admission sought improper legal conclusions where 23 they “essentially ask[ed] that Defendant accede to at least one 24 element of the cause of action for which Plaintiffs, not Defendant, bear the burden of persuasion and of proof in this 25 proceeding, specifically either the causation or injury prongs of any and all negligence causes of action.”); Rios v. Tilton, 26 2010 WL 3784703, at *7 (E.D. Cal. Sept. 24, 2010) (in a civil 27 rights action, plaintiff’s requests for admission “improperly and repeatedly sought defendant’s acquiescence to the entirety 28 of plaintiff’s complaint.”).
20 1 is a question of law. 2 CONCLUSION 3 Based on the foregoing, we AFFIRM the bankruptcy court. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28