1

2

3

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

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-15-1012-FKiKu

)

KAMAL ZEEB, ) Bk. No. 8:13-bk-14883-CB

)

Debtor. ) Adv. No. 8:13-ap-01301-CB

______________________________)

)

KAMAL ZEEB, )

)

Appellant, )

)

v. ) MEMORANDUM1

)

SAMUEL FARAH, )

)

Appellee. )

______________________________)

Argued and Submitted on October 22, 2015 

at Los Angeles, California 

Filed – November 3, 2015

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Catherine E. Bauer, Bankruptcy Judge, Presiding

 

Appearances: Andrew Edward Smyth argued for appellant Kamal

Zeeb; Jeffrey Valentine Weber of Briggs and

Alexander, APC argued for appellee Samuel Farah.

 

Before: FARIS, KIRSCHER, and KURTZ, Bankruptcy Judges.

FILED

NOV 03 2015

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

1 This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8024-1.
1

2

3

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

INTRODUCTION

Appellant Kamal Zeeb appeals from the bankruptcy court’s

judgment holding that his debt to Appellee Samuel Farah is

nondischargeable under 11 U.S.C. § 523(a)(6) (2010).2 The

bankruptcy court held that a prebankruptcy judgment against

Mr. Zeeb for conversion and breach of contract established

“willful and malicious injury” such that the judgment was

nondischargeable. We hold that a judgment for conversion and

breach of contract under California law, without anything more,

does not necessarily determine that the debt is for “willful” and

“malicious” injury under § 523(a)(6). Accordingly, we VACATE the

bankruptcy court’s order and REMAND this case to the bankruptcy

court.

FACTS

Mr. Farah and Mr. Zeeb worked together in two businesses:

Storm Distribution, Inc. (“Storm Distribution”) and JSSA

Enterprises, Inc. (“JSSA”). Mr. Farah managed the sales and

accounts, while Mr. Zeeb managed the facilities and employees. 

On or around March 1, 2012, Mr. Farah filed his First

Amended Complaint in the Superior Court of Orange County,

California, alleging thirteen causes of action against Mr. Zeeb,

Ahmed Shamekh, JSSA, Zeeb Brothers, Inc., and Hookah and More. 

Four of the causes of action stated in the complaint are relevant

to this proceeding. All four causes of action were based on the

2 Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all “Rule” references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037.

2
1

2

3

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

factual allegations that, while Mr. Farah was out of the country

in 2010, Mr. Zeeb misappropriated inventory, cash, and other

assets from the two businesses. Based on these factual

allegations, Mr. Farah stated two causes of action for conversion

(one relating to Storm Distribution and the other to JSSA) and

two corresponding causes of action for breach of contract. 

Commencing on May 15, 2013, the superior court held a jury

trial on Mr. Farah’s claims. The jury rendered a special verdict

in which it found that:

(1) Mr. Zeeb breached his contract relating to Storm

Distribution, causing Mr. Farah to suffer damages of $330,514.25;

(2) Mr. Zeeb “intentionally and substantially” interfered

with Mr. Farah’s property by taking possession of the funds and

inventory of Storm Distribution, but Mr. Farah’s damages were

zero;

(3) Mr. Zeeb engaged in the conduct relating to Storm

Distribution “with malice, oppression, or fraud,” and Mr. Farah

was entitled to punitive damages of $50,000; 

(4) Mr. Zeeb breached his contract relating to JSSA,

causing Mr. Farah to suffer damages of $101,091.45;

(5) Mr. Zeeb “intentionally and substantially” interfered

with Mr. Farah’s property by taking possession of the funds and

inventory of JSSA, but Mr. Farah’s damages were zero; and

(6) Mr. Zeeb engaged in the conduct relating to JSSA “with

malice, oppression, or fraud,” and Mr. Farah was entitled to

punitive damages of $50,000.

Before the superior court entered judgment on the special

verdict, Mr. Zeeb filed for chapter 7 bankruptcy protection on

3
1

2

3

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

June 7, 2013. In August 2013, Mr. Farah sought and received

relief from the automatic stay so that the superior court could

enter final judgment on the jury verdict.

On September 9, 2013, the superior court issued a minute

order wherein it struck the punitive damages: 

Ruling: The Court will execute the proposed Judgment

that Defendant submitted. The Special Verdict and the

evidence do not support an award for punitive damages. 

CC 3294(a) provides for punitive damages “In an action

for the breach of an obligation not arising from

contract.” Plaintiff’s success on the breach of

contract action does not support punitive damages. 

Plaintiff must prove compensatory tort damages to

support tort damages. Additionally, Plaintiff did not

introduce evidence of defendant’s financial condition. 

See Simon v san Paolo U.S. Holding Co., Inc. (2009)

35 Cal 4th 1159, 1185. Without this evidence the jury

cannot calculate a proper award of punitive damages.

On February 18, 2014, the superior court signed its Amended

Judgment on Jury Verdict (“Amended Judgment”), which provided: 

1. On the cause of action for breach of contract

regarding Storm Distribution by Samuel Farah against

Kamal Zeeb judgment is awarded in favor of Samuel Farah

against Kamal Zeeb in the amount of $330,514.24[.]

. . . .

3. On the cause of action for conversion

regarding Storm Distribution by Samuel Farah against

Kamal Zeeb, including a prayer for punitive damages,

judgment is awarded in favor of Samuel Fareh against

Kamal Zeeb in the amount of $0.00 in compensatory

damages and $0.00 in punitive damages.

4. On the cause of action for breach of contract

regarding JSSA Enterprises, Inc. by Samuel Farah

against Kamal Zeeb and against Zeeb Brothers, Inc.

judgment is awarded in favor of Samuel Farah jointly

and severally against Kamal Zeeb and against Zeeb

Brothers, Inc. in the amount of $101,091.45[.]

. . . . 

6. On the cause of action for conversion

regarding JSSA Enterprises, Inc. by Samuel Farah

against Kamal Zeeb and against Zeeb Brothers, Inc.,

including a prayer for punitive damages, judgment is

4
1

2

3

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

awarded in favor of Samuel Farah jointly and severally

against Kamal Zeeb and against Zeeb Brothers, Inc. in

the amount of $0.00 in compensatory damages and $0.00

in punitive damages.

7. Pursuant to the election of remedies, Samuel

Farah has elected to take the remedies awarded under

breach of contract. The aggregate judgment award to

Samuel Farah, therefore, is $431.605.69, of which the

entire amount is enforceable against Kamal Zeeb and of

which $10l,091.45 is enforceable against Zeeb Brothers,

Inc.

On September 16, 2013, Mr. Farah initiated an adversary

proceeding challenging the dischargeability of the judgment.3 On

May 20, 2014, he filed his Motion for Summary Judgment or Summary

Adjudication (“Motion for Summary Judgment”), arguing that

collateral estoppel (modernly called “issue preclusion”)

precluded relitigation of the issues decided by the superior

court jury. He contended that the superior court judgment

determined that Mr. Zeeb caused “willful and malicious injury” to

him under § 523(a)(6).

On July 8, 2014, the bankruptcy court held a hearing on

Mr. Farah’s Motion for Summary Judgment. Essentially, Mr. Farah

argued that, even if the jury concluded that he was not harmed as

a result of the conversion, “it’s still enough to show that the

facts show the malicious intent, show the ill will, show the bad

acts, which under Jerich [sic] and Lockerby support finding even

a breach of contract claim non-dischargeable.” Conversely,

Mr. Zeeb argued that the jury’s award of zero compensatory

3 The complaint in the adversary proceeding requested that

the bankruptcy court determine nondischargeability under

§ 523(a)(2) and (6) and for denial of discharge under § 727(a)(2)

and (7). However, this appeal only concerns nondischargeability

of the superior court judgment under § 523(a)(6).

5
1

2

3

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

damages shows that it would be inappropriate to apply issue

preclusion to the superior court’s judgment.

The bankruptcy court took the matter under submission. On

July 25, it issued its Order Granting Plaintiff’s Motion for

Summary Judgment or Summary Adjudication4 and held, in relevant

part: 

The Court reviewed the record and the pleadings,

and in particular, reviewed the Amended Judgment on

Jury Verdict dated February 18, 2014 entered by the

Superior Court of the State of California, County of

Orange, Central Justice Center, in case no.

30-2011-00529564 (“Amended Judgment”).

Since it is indisputable that both paragraphs 3

and 4 [sic] of the Amended Judgment state that the

Plaintiff prevailed on his conversion claims against

Defendant,

IT IS ORDERED:

The Motion is granted.

The court entered its judgment in Mr. Farah’s favor on or

around August 6, 2014. Following the parties’ agreement to

dismiss all remaining claims, Mr. Zeeb timely filed his notice of

appeal on January 14, 2015. 

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C.

§ 158.

4 Appellant did not include a copy of the bankruptcy court’s

order in his excerpts of record. However, we exercised our

discretion to review the bankruptcy court’s docket, see Woods &

Erickson, LLP v. Leonard (In re AVI, Inc.), 389 B.R. 721, 725 n.2

(9th Cir. BAP 2008), and we located the order in the bankruptcy

court’s docket at document number 20.

6
1

2

3

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

ISSUE

Whether the bankruptcy court erred in holding that the state

court judgment against Appellant precludes Appellant from

relitigating the issues of willfulness and malice under

§ 523(a)(6).

STANDARD OF REVIEW

We review “the bankruptcy court’s interpretation of the

Bankruptcy Code de novo and its factual findings for clear

error[.]” Hedlund v. Educ. Res. Inst. Inc., 718 F.3d 848, 854

(9th Cir. 2013) (quoting Miller v. Cardinale (In re DeVille),

361 F.3d 539, 547 (9th Cir. 2004)). 

“We review rulings regarding rules of res judicata,

including claim and issue preclusion, de novo as mixed questions

of law and fact in which legal questions predominate.” Khaligh

v. Hadaegh (In re Khaligh), 338 B.R. 817, 823 (9th Cir. BAP

2006), aff’d, 506 F.3d 956 (9th Cir. 2007) (citing Robi v. Five

Platters, Inc., 838 F.2d 318, 321 (9th Cir. 1988); Alary Corp. v.

Sims (In re Associated Vintage Grp., Inc.), 283 B.R. 549, 554

(9th Cir. BAP 2002)). “Once it is determined that preclusion

doctrines are available to be applied, the actual decision to

apply them is left to the trial court’s discretion.” Id.

(citations omitted).

DISCUSSION

A. A judgment cannot be discharged under § 523(a)(6) if it

resulted from “willful and malicious injury.”

Section 523(a)(6) provides: 

(a) A discharge under section 727 . . . of this title

does not discharge an individual debtor from any debt -

. . . .

7
1

2

3

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

(6) for willful and malicious injury by the debtor

to another entity or to the property of another

entity[.]

§ 523(a)(6). “Under Ninth Circuit law, willfulness and malice

are two distinct elements that must not be conflated.” Comcast

of L.A., Inc. v. Sandoval (In re Sandoval), 341 B.R. 282, 296

(Bankr. C.D. Cal. 2006). 

The Ninth Circuit has recognized that “‘a simple breach of

contract is not the type of injury addressed by § 523(a)(6)’ and

held that ‘[a]n intentional breach of contract is excepted from

discharge under § 523(a)(6) only when it is accompanied by

malicious and willful tortious conduct.’” Petralia v. Jercich

(In re Jercich), 238 F.3d 1202, 1205 (9th Cir. 2001) (emphasis in

original) (quoting Snoke v. Riso (In re Riso), 978 F.2d 1151,

1154 (9th Cir. 1992)). “Where an intentional breach of contract

is accompanied by tortious conduct which results in willful and

malicious injury, the resulting debt is excepted from discharge

under § 523(a)(6). Id. (citations omitted).

1. Willfulness

The Ninth Circuit has held that 

the willful injury requirement of § 523(a)(6) is met

when it is shown either that the debtor had a

subjective motive to inflict the injury or that the

debtor believed that injury was substantially certain

to occur as a result of his conduct. We believe that

this holding comports with the purpose [of] bankruptcy

law’s fundamental policy of granting discharges only to

the honest but unfortunate debtor.

Id. at 1208 (emphasis in original). The “willful” analysis

requires an inquiry into the debtor’s subjective state of mind. 

See Carrillo v. Su (In re Su), 290 F.3d 1140, 1145-46 (9th Cir.

2002) (“Congress did not intend § 523(a)(6)’s willful injury

8
1

2

3

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

requirement to be applied so as to render nondischargeable any

debt incurred by reckless behavior, [which] reinforces

application of the subjective standard. The subjective standard

correctly focuses on the debtor’s state of mind and precludes

application of § 523(a)(6)’s nondischargeability provision short

of the debtor’s actual knowledge that harm to the creditor was

substantially certain.”). 

The touchstone of this standard is that the debtor must have

intended to injure the creditor or must have known that the

debtor’s acts were substantially certain to injure the creditor. 

It is not enough to prove that the debtor acted intentionally and

caused an injury. Kawaauhau v. Geiger, 523 U.S. 57, 61 (1998). 

2. Malice

As to the second prong, the Ninth Circuit has stated that

“[a] ‘malicious’ injury involves ‘(1) a wrongful act, (2) done

intentionally, (3) which necessarily causes injury, and (4) is

done without just cause or excuse.’” In re Jercich, 238 F.3d at

1209 (quoting Murray v. Bammer (In re Bammer), 131 F.3d 788, 791

(9th Cir. 1997)).

B. The bankruptcy court erred in holding that the superior

court judgment decided the issue of “willful and malicious

injury.”

The main question before the Panel is whether the superior

court judgment precludes relitigation of the “willful and

malicious injury” issues before the bankruptcy court.

The usual rules of issue preclusion apply in

dischargeability litigation. Grogan v. Garner, 498 U.S. 279,

284-85 (1991). Under the full faith and credit statute, federal

courts must give state court judgments the same preclusive effect

9
1

2

3

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

that a state court would. See 28 U.S.C. § 1738; Gayden v.

Nourbakhsh (In re Nourbakhsh), 67 F.3d 798, 800 (9th Cir. 1995)

(citing Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S.

373, 380 (1985)). To determine the preclusive effect of a state

court judgment, federal courts apply the preclusion law of the

state in which the judgment was entered. See Marrese, 470 U.S.

at 380; DiRuzza v. Cty. of Tehama, 323 F.3d 1147, 1152 (9th Cir.

2003). Therefore, California law on issue preclusion applies.

1. California law on issue preclusion

In California, issue preclusion prevents parties from

relitigating issues already decided in prior proceedings. Lucido

v. Super. Ct., 51 Cal. 3d 335, 341 (1990). The party asserting

issue preclusion must prove five elements. First, the issues to

be precluded must be identical to the ones decided in the prior

proceeding. Second, the issues must have been actually litigated

in the prior proceeding. Third, the issues must have been

necessarily decided. Fourth, the decision must have been final

and on the merits. Finally, the party to be precluded must be

identical to or in privity with a party to the prior proceeding. 

Id. 

“The party seeking to apply issue preclusion has the burden

of proving that each element is satisfied. To sustain this

burden, a party must introduce a record sufficient to reveal the

controlling facts and the exact issues litigated in the prior

action. Any reasonable doubt as to what was decided in the prior

action will weigh against applying issue preclusion.” 

Brandstetter v. Derebery (In re Derebery), 324 B.R. 349, 353

(Bankr. C.D. Cal. 2005) (citing Kelly v. Okoye (In re Kelly),

10
1

2

3

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

182 B.R. 255, 258 (9th Cir. BAP 1995)). 

The doctrine of issue preclusion is not mechanically

applied. Instead, the court must apply it when it advances three

policies: “(1) to promote judicial economy by minimizing

repetitive litigation; (2) to prevent inconsistent judgments

which undermine the integrity of the judicial system; and (3) to

provide repose by preventing a person from being harassed by

vexatious litigation.” Alpha Mech., Heating & Air Conditioning,

Inc. v. Travelers Cas. & Sur. Co. of Am., 133 Cal. App. 4th 1319,

1333 (2005) (quoting Wright v. Ripley, 65 Cal. App. 4th 1189,

1193 (1998)).

2. Preclusive effect of the state-court judgment

a. Are the issues identical?

The first prong of the issue preclusion test requires

comparison of the issues presented in the current case with the

issues presented in the prior case that resulted in the judgment. 

i. Conversion

We first compare the elements of conversion to the

definition of “willful and malicious injury.” 

Under California law, “[c]onversion is the wrongful exercise

of dominion over the property of another.” Ortega v. Toyota

Motor Sales, USA, Inc., 572 F. Supp. 2d 1218, 1220 (S.D. Cal.

2008) (quoting Farmers Ins. Exch. v. Zerin, 53 Cal. App. 4th 445,

451 (1997)). “A claim for conversion requires the plaintiff’s

ownership or right of possession at the time of the conversion,

the defendant’s conversion by a wrongful act of disposition of

11
1

2

3

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

property rights and damages.”5 Id. (citing Burlesci v. Petersen,

68 Cal. App. 4th 1062, 1066 (1998)); see Farmers Ins. Exch.,

53 Cal. App. 4th at 451 (In California, “[t]he elements of a

conversion are the [creditor’s] ownership or right to possession

of the property at the time of the conversion; the [debtor’s]

conversion by a wrongful act or disposition of property rights;

and damages.”).

The three elements of conversion under California law do not

include the elements of the “willful” and “malicious” prongs

under § 523(a)(6). Conversion under California law does not

require a showing that the defendant subjectively intended to

injure the plaintiff or subjectively knew that the defendant’s

conduct was substantially certain to injure the plaintiff. 

As we have previously held, conversion “establishes the

debtor’s ‘wrongful exercise of dominion over the personal

property of another,’ but it ‘does not necessarily decide the

type of wrongful intent on the part of the debtor that is

necessary for the damages to be a nondischargeable debt under

§ 523(a)(6).’” Thiara v. Spycher Bros. (In re Thiara), 285 B.R.

420, 429 (9th Cir. BAP 2002) (quoting Peklar v. Ikerd

(In re Peklar), 260 F.3d 1035, 1037-39 (9th Cir. 2001)); see also

5 Mr. Zeeb argues that the jury’s award of zero dollars 

necessarily means that the jury did not find for Mr. Farah on the

conversion claims. The fact that the judgment is for zero

dollars on the conversion claims raises the question of whether

there is in fact a “debt” that could be nondischargeable. 

However, the bankruptcy court did not address this question, and

the parties only tangentially raised this issue in their briefs. 

We make no determination on this question and will leave it for

the bankruptcy court to consider on remand.

12
1

2

3

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

In re Sandoval, 341 B.R. at 295 (“Under California law, ‘a

conversion is not per se a willful and malicious injury to the

property of another’”) (quoting In re Peklar, 260 F.3d at 1037)

(citing id. at 1039 (“[a] judgment for conversion under

California substantive law decides only that the defendant has

engaged in the ‘wrongful exercise of dominion’ over the personal

property of the plaintiff. It does not necessarily decide that

the defendant has caused ‘willful and malicious injury’ within

the meaning of § 523(a)(6)”)).

Similarly, conversion under California law does not

necessarily implicate “maliciousness.” Maliciousness requires

(1) a wrongful act, (2) done intentionally, (3) which necessarily

causes injury, and (4) is done without just cause or excuse. 

In re Jercich, 238 F.3d at 1209 (citation omitted). While one of

the elements of conversion encompasses a “wrongful act,” the

other elements do not satisfy the remaining maliciousness prongs. 

We thus conclude that the conversion, in and of itself, is not

necessarily “malicious.”

 The bankruptcy court held that the superior court judgment

satisfied § 523(a)(6) because the jury found against Mr. Zeeb on

the conversion claims. In its order, the bankruptcy court stated

that, “[s]ince it is indisputable that both paragraphs 3 and 4

[sic] of the Amended Judgment state that the Plaintiff prevailed

on his conversion claims against Defendant,” it would grant

summary judgment. The court apparently concluded that

conversion, in and of itself, satisfies § 523(a)(6). This is

incorrect as a matter of law. Absent additional, necessary

findings that satisfy the discrete elements of “willful” and

13
1

2

3

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

“malicious” injury, the elements of conversion are not identical

to the issues of “willful” and “malicious” injury.

ii. Punitive damages

Mr. Farah argues that the jury’s award of punitive damages,

which the superior court later struck, is sufficient to establish

a “willful and malicious injury.” We disagree.

Only judgments have preclusive effect. See Restatement

(Second) of Judgments § 13 (1982) (“The rules of res judicata are

applicable only when a final judgment is rendered.”); cf.

Ornellas v. Oakley, 618 F.2d 1351, 1356 (9th Cir. 1980) (“A

reversed or dismissed judgment cannot serve as the basis for a

disposition on the ground of res judicata or collateral

estoppel.” (citations omitted)). The superior court expressly

refused to enter judgment granting punitive damages. Despite the

jury’s findings that Mr. Zeeb engaged in conduct with malice,

oppression, or fraud, the superior court held, as a matter of

law, that Mr. Farah was not entitled to punitive damages. The

jury’s special verdict awarding punitive damages has no

preclusive effect because the court declined to enter judgment on

that portion of the verdict. 

b. Were the issues actually litigated?

An issue is “actually litigated” when the issue was raised,

actually submitted for determination, and determined. Baker v.

Hull, 191 Cal. App. 3d 221, 226 (1987). In the present case,

Mr. Zeeb and Mr. Farah both fully litigated the causes of action

for breach of contract and conversion. However, we are unable to

discern from the record whether all of the issues concerning the

distinct “willful” and “malicious” tests - especially the

14
1

2

3

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

requirement of the debtor’s subjective intent to injure - were

raised and litigated before the superior court. As such, we

cannot say that the second requirement has been met. 

c. Were the issues necessarily decided?

An issue was “necessarily decided” if the issue was not

“entirely unnecessary” to the judgment in the prior proceeding. 

Lucido, 51 Cal. 3d at 342. While the elements of conversion were

“necessarily decided,” as evidenced by the jury’s special verdict

forms, the issues concerning willful and malicious injury were

not before the jury and were thus not “necessarily decided.” The

third requirement has not been met. 

d. Is the judgment final?

A judgment is the final determination of the rights of the

parties in an action. Cal. Code Civ. P. § 577. In California, a

judgment is “final” when it terminates the litigation between the

parties on the merits and leaves nothing else to do except

enforce the judgment. Sullivan v. Delta Air Lines, Inc., 15 Cal.

4th 288, 304 (1997). The parties here do not dispute that the

Amended Judgment issued by the superior court, followed by the

parties’ stipulation to dismiss the remaining claims, was a final

judgment. The fourth requirement is thus satisfied.

e. Were the parties identical?

The parties to this appeal, Mr. Zeeb and Mr. Farah, were

parties to the proceeding before the superior court. As such,

the fifth requirement is satisfied. 

* * *

Therefore, the bankruptcy court erred by applying issue

preclusion to the superior court judgment with regard to “willful

15
1

2

3

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

and malicious injury” under § 523(a)(6). Conversion, in and of

itself, is not sufficient to establish “willful and malicious

injury,” as the issues were not identical; the “willful and

malicious” issues were not fully litigated; and the “willful and

malicious” issues were not necessarily decided.

CONCLUSION

For the reasons set forth above, we VACATE the bankruptcy

court’s ruling in favor of Mr. Farah and REMAND the case to the

bankruptcy court for further proceedings consistent with this

decision.

16