Opinion ID: 3053354
Heading Depth: 4
Heading Rank: 2

Heading: Was the Conduct Malicious?

Text: In re Su established that the malicious injury requirement of § 523(a)(6) must be determined separately from the willful injury requirement. In re Su, 290 F.3d at 1146-47. In re Su emphasized the necessity of completing a separate analysis on the “malicious” prong of § 523(a)(6) by declining to make a “malicious” finding and remanding to the bankruptcy court for further analysis, even though the four “malicious” factors might have been ascertained by examining the record. Id. at 1147; see also In re Sicroff, 401 F.3d at 1105 (“We analyze the willful and malicious prongs of the dischargeability test separately.”).
[8] The Bankruptcy Court in this case made no rulings as to the “malicious” prong of § 523(a)(6). Appellee briefed the malicious prong in its First Summary Judgment Motion in the Bankruptcy Action. At the hearing on the First Summary Judgment Motion the Bankruptcy Judge stated “I could not grant summary judgment as to [intent]. I think you’ve got virtually everything else lined up.” However, there is no discussion on the record of what “everything else” refers to. The Bankruptcy Court apparently considered the issue of whether Albarran actually copied the tapes resolved by the District Court Action. However, we do not know whether that issue was all the Bankruptcy Court was referring to when it stated “everything else [was] lined up.” A proposed order on the First Summary Judgment Motion was submitted to the Bankruptcy Judge that would have found “that all the elements of § 523(a)(6) have been established for the purposes of the Trial of this matter except for the single element of ‘Intent.’ ” However, this proposed order was specifically rejected by the 13428 IN THE MATTER OF BARBOZA Bankruptcy Court, and an alternative order was adopted which only held in relevant part that: “The findings of the jury and the judgment in the Federal Court action . . . bind this Court and the parties, and shall not be re-litigated in this adversary proceeding.” Because the District Court Action did not address the “malicious” prong of § 523(a)(6), and the jury made no findings in this regard, we cannot discover any separate findings of uncontroverted fact of maliciousness by the Bankruptcy Court.
[9] Relying on Thiara v. Spycher Bros. (In re Thiara), 285 B.R. 420, 434 (9th Cir.BAP 2002), the BAP, perhaps in an attempt to remedy the Bankruptcy Court’s lack of discussion and findings concerning the “malicious” prong, found that malice could be implied from willfulness. Although there may be some overlap between the test for “willfulness” and the test for “malice,” see Transamerica Commercial Finance Corp. v. Littleton (In re Littleton), 942 F.2d 551, 554 (9th Cir. 1991) (per curiam) (“[M]alice may be inferred from the nature of the wrongful act.”), the overlap does not mean that the Bankruptcy Court can ignore entirely the malice inquiry. We require a separate analysis for each of the “willful” and “malicious” prongs. See In re Sicroff, 401 F.3d at 1105 (“We analyze the willful and malicious prongs of the dischargeability test separately.”); In re Su, 290 F.3d at 1146-47 (9th Cir. 2002) (rejecting an attempt to conflate the two prongs and requiring a separate analysis as to each); In re Jercich, 238 F.3d at 1207-09 (treating the willful and malicious prongs with separate analyses); In re Littleton, 942 F.2d at 554 (analyzing willfulness and maliciousness separately). The BAP’s conclusion that the Appellants’ actions were malicious under § 523(a)(6) rested entirely on its conclusion that the Appellants’ actions were willful under § 523(a)(6). Because we have concluded that there is a genuine issue of material fact as to willfulness, we similarly reverse the Bankruptcy Court’s judgment with respect to maliciousness. On remand, the IN THE MATTER OF BARBOZA 13429 Bankruptcy Court should conduct a separate inquiry concerning malice. See In re Sicroff, 401 F.3d at 1105 In re Su, 290 F.3d at 1146-47; In re Jercich, 238 F.3d at 1207-09; In re Littleton, 942 F.2d at 554.