Court Opinion

ID: 9464449
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:33:38.286372+00
Date Added: 2024-06-11T17:38:38.133711
License: Public Domain

HUFSTEDLER, Circuit Judge,
concurring and dissenting:
I have no quarrel with the majority’s enunciation of the controlling principles of law, but I disagree with the application of those principles in this case. I would remand the case to the district court for reconsideration in the light of the legal principles stated in the majority opinion.
Upon the record, it is impossible to determine whether either the bankruptcy judge or the district court was under the erroneous impression that the state court judgment foreclosed the bankruptcy court and the district court from independently determining dischargeability of the obligation by application of the principles of res judicata *657(issue preclusion, formerly known as collateral estoppel). The courts below appear to have relied upon the teaching of Coen v. Zick (9th Cir. 1972) 458 F.2d 326, in which we stated: “[t]he only unresolved inquiry is whether that record [of the state court] taken as true constitutes sufficient proof to establish that the judgment obtained by appellant against the bankrupts in the state court was based upon willful and malicious acts of Coen. We find that it was conclusive of the nature of the proceeding and of the basis upon which the judgment was obtained in the state court.” (458 F.2d at 328.)
As the majority observes, the conclusive effect given by Coen to the state court judgment could not survive the 1970 amendments to the Bankruptcy Act. We cannot ascertain from the record before us whether the bankruptcy judge would have reached the same dischargeability conclusion if he had been aware that the prior state court judgment did not foreclose the non-dischargeability question and that he was required to make an independent determination whether the judgment represented a “liability for obtaining money or property by false pretenses or false representations” under Section 17(a)(2) of the Bankruptcy Act, based upon the record of the state court action and upon the testimony before him in the bankruptcy proceedings.
Although I agree that the clearly erroneous standard applies to appellate review of the bankruptcy judge’s findings, that principle is prematurely applied in this case. Although we cannot be sure from the record, the bankruptcy judge appears to have assumed that, under Coen, preclusive effect had to be given to the state court proceedings. Upon that premise, of course, the “findings” are no more than legal conclusions, and those conclusions are erroneous for the reasons stated in the majority opinion.
Accordingly, I would vacate and remand the cause to the district court for reconsideration in the light of the majority opinion.