N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT In re : NARINDER

SANGHA, De btor,

______________________________ C HARLES EDWARD SC HR ADER , Appe lla nt, v. NAR INDER

SANGHA, Appe lle e . No. 15-60057 B AP No. 14-1397 M EM O R ANDUM *

Appe a l from

the Ninth C irc uit B ankruptc y

Appe lla te Pane l Kirsc h e r, Pa

ppa s, a nd Ta y lor, B ankruptc y

Judge s, Pre siding Argue d a nd Subm itte d Fe brua

ry 9, 2017 Pa sa de n a , C a l ifornia B e fore : SC HR OEDER , PR EGER SON, a nd M UR GUIA, C irc uit Judge s. C re ditor-Appe l la

nt C ha rle s Sc hra de r a

ppe a ls the B a

n kruptc y Appe lla te Pane l’ s (“ B AP” ) m e m o ra ndum disposition va

c a ting the ba

nkruptc y c ourt’ s orde r 

# FIL ED FEB 24 2017 M OLLY C. DW Y ER, CLERK U . S . CO URT O F APPEALS

* This disposition is not a ppropria te for public a t ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.that

grante d sum

m ary judgm e nt in fa

vor of Sc hra de r a ga inst De btor-Appe l le e Narinde r Sangha

ba se d on issuepre c lusion. W e have jurisdic tion unde r 28 U.S.C . § 158(d)(1). 1 W e a ffirm the B A P and re m an d to the ba n kruptc y c ourt. 2 A C a lifornia sta

t e tria l c ourt a

warde d Sc hra de r a

de fa ult judgm e nt a ga inst Sangha . The de fa

ult judgm e nt inc lude d a

punitivedam a ge aw a

rd. The re a fte r, the ba

n k ruptc y c ourt gra nte d sum m ary judgm e n t

in fa vor of Sc hra d e r ba se d on issue pre c lusion. The ba nkruptc y c ourt he ld tha

t Sc h ra de r’ s de fa ult judgm e nt wa s not disc ha rge a ble unde r 11 U.S.C . § 523(a )(6). The ba nkruptc y c ourt found tha

t the punitive dam a ge award, sta nding a lone , pre c lude d re litiga tion of § 523(a

)(6)’ s “ willful a

nd m a lic i ous” inte nt re quire m e nts 3 be c a use the p unitive dam a ge award wa s ba se d on a C a lifornia

sta te tria l c ourt’ s finding of

“ m a lic e in fa c t.”

1 W e e xe rc ise jurisdic tion in light of the libe ra l sta

nda rd for fina lity

in ba nkruptc y a ppe a ls. This c ourt c an e xe rc ise jurisdic tion if theissue be fore the c ourt is le ga l and if re solving tha t issue “ would a id the ba

nkruptc y c ourt in re a c hing its disposition on re m a nd,” a s is the c a s e he re . Bonne r Mall P’ship v . U.S. Banc orp Mortg. C

o. , 2 F.3d 899, 904 (9th C ir. 1993). 2 C re ditor-Appe lla

n t C ha rle s Sc hra de r’ s m otion to strike portions of DebtorAppe l le e Na

rinde r Sangha ’ s a

nswe ring brie f is DENIED. 3 The “ w illful” and “ m a lic ious” inte nt re quire m e nts a re c onjunc tive and re quire se pa

ra t e ana ly se s . C

arrillo v . Su (In re

Su) , 290 F.3d 1140, 1146 (9th C ir. 2002). “ W illful” inte nt m u st be e sta

blishe d be fore “ m a lic ious” inte nt m ay be c onc lude d. Se eThiara v . Spy c he r Bros. (In re Thiara) , 285 B . R . 420, 434 (9th C ir. B AP 2002). 2B e twe e n the tim e of the ba nkruptc y c ourt’ s de c i sion a nd the B AP’ s re vie w of this ba nkruptc y a ppe a l , Ply am v . Pre c ision De v e lopme nt, LLC (In re Ply am) , 530 B .R . 456 (9th C i r. B AP 2014) wa s de c i de d, whic h c a l le d into que stion the ba nkruptc y c ourt’ s re a soning. In rePly am he ld tha t a C a lifornia

sta te c ourt punitive dam a g e award, sta n ding a lone , doe s not pre c lude re litiga tion of § 523(a )(6)’ s “ willful” inte nt re quire m e nt. 530 B .R . at 463–65 (holding tha t

“ unde r C a lifornia

la w, the ge ne ra l de finition of m a lic e in fa c t e n c om pa sse s le ss re pre he nsible sta

te s of m ind” tha

n § 523(a )(6)’ s “ willful” inte nt re q uire m e nt). Apply ing In rePly am to this ba nkruptc y a

ppe a l, the sta

te c ourt’ s punitive dam a ge award, sta

nding a lone , did not pre c lude re litiga tion of § 523(a

)(6)’ s

“ willful” inte nt re q

uire m e nt. In de te rm ining whe the r re litiga t ion of § 523(a)(6)’ s

“ willful” inte nt re q

uire m e nt is pre c lude d, In re Ply am re quire s tha

t the ba nkruptc y c ourt re vie w the a lle gations in Sc hra d e r’ s se c ond a m e nde d c om

pla int toge the r with the p unitive dam a ge award. Se e 530 B .R . 456 a t 465. W e AFFIRM the B AP. On RE M AND , the ba nkruptc y c ourt sha ll re e va luate whe the r issue pre c lusion is a va ila ble in light of In rePly am , 530 B .R . 456, 463–65 (9th C ir. B AP 2014). Ac c o rdingly , the ba nkruptc y c ourt m ust c onside r whe the r the sta

t e c ourt de fa

ult judgm e nt a

nd the a lle gations in Sc hra de r’ s se c o nd a m e nde d c om

pla int pre c lude re l itiga

tion of § 523(a

)(6)’ s “ willful” inte nt 3re quire m e nt. If the ba nkruptc y c ourt de te rm ine s tha

t the a lle gations in the

se c ond a m e nde d c o m

pla int toge the r with the punitivedam a g e award pre c lude re litiga tion of § 523(a )(6)’ s “ w illful a n d m a lic ious” inte nt re quire m e nts, the n the C a lifornia sta te tria l c ourt de fa

ult judgm e nt in fa

vor of Sc hra de r is not disc ha rge a ble . AFFIRM E D and RE M ANDE D to the bank r uptc y c our t.

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