Court Opinion

ID: 170796
Source: CourtListenerOpinion
Date Created: 2010-08-14 18:14:41+00
Date Added: 2024-06-11T17:25:09.269699
License: Public Domain

FILED
                                                               United States Court of Appeals
                                                                       Tenth Circuit

                                                                       June 4, 2008
                    UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
                                                                       Clerk of Court
                                 TENTH CIRCUIT

 In Re:

 WILLIAM DANIEL THOMAS                                  No. 07-1294
 BERRIEN, also known as William                            BAP
 Thomas Berrien, also known as W.D.                 (BAP No. CO-06-107)
 Thomas Berrien, also known as
 William T. Berrien, also known as
 Tom Berrien, Officer, Director,
 Shareholder of Centaur Mountain
 Farms, Inc.,

               Debtor,
          v.

 LIZELLE J. VAN VUUREN, CEDRIC
 G. TYLER, and VERONICA VAN
 VUUREN TYLER,

               Plaintiffs-Appellees,

 WILLIAM DANIEL THOMAS
 BERRIEN,

               Defendant-Appellant.

                           ORDER AND JUDGMENT *

      *
         This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
Before KELLY, TYMKOVICH, Circuit Judges, and FRIZZELL, District
Judge. **

         Debtor William Daniel Thomas Berrien and his wife, Joanne, fabricated a

hit-and-run accident, hoping for financial gain. The fabrication targeted eighteen-

year-old high school student Lizelle J. Van Vuuren. Based on the false

accusation, she was criminally prosecuted on misdemeanor and felony charges for

leaving the scene of an accident. Although Lizelle successfully defeated the

criminal charges, that was not before her parents, Cedric G. Tyler and Veronica

Van Vuuren Tyler, had spent substantial sums defending Lizelle in the criminal

cases.

         Following the prosecutions, the Tylers and Lizelle filed a civil complaint in

Colorado state court against the Berriens, 1 alleging a number of torts, including

abuse of process, civil conspiracy to defraud, extreme and outrageous conduct,

and intentional infliction of emotional distress. Just prior to trial, Mr. Berrien

filed for Chapter 7 bankruptcy. The Tylers filed an adversary proceeding in

bankruptcy court, alleging some of Mr. Berrien’s debt was nondischargeable

under 11 U.S.C. § 523(a)(6) as a result of his malicious conduct. After trial, the

         **
        Hon. Gregory K. Frizzell, United States District Court, Northern District
of Oklahoma, sitting by designation.
         1
          The Berriens apparently divorced in February 2002. For convenience we
refer to them collectively as the “Berriens.” The Tylers later settled their claims
against Mrs. Berrien.

                                           -2-
bankruptcy court agreed, concluding Mr. Berrien owed the Tylers

nondischargeable debt in the amount of the criminal defense costs because his

conduct caused “willful and malicious injury.” § 523(a)(6). The bankruptcy

appellate panel (BAP) affirmed.

      The question presented in this appeal is whether the Tylers could recover

under § 523(a)(6) damages for Mr. Berrien’s misconduct, including the costs

incurred in defending Lizelle. We conclude the parents had numerous legally

cognizable interests that support a finding of nondischargeability under

§ 523(a)(6) in these bankruptcy proceedings.

      We therefore AFFIRM the BAP’s order and judgment.

                                  I. Background

      Fabricated Hit-and-Run

      After a three-day trial, the bankruptcy court made the following findings of

fact, which are not disputed in this appeal.

      Hoping to gain financially, the Berriens fabricated a hit-and-run accident.

Their false accusation targeted Lizelle, a citizen of South Africa, who at the time

of the accusations was an eighteen-year-old high school student living with her

parents in Evergreen, Colorado.

      On the afternoon of April 3, 2000, Lizelle was driving her parents’ car. For

reasons not relevant here, the car was uninsured. Lizelle, with a friend in the car,

drove to a Safeway store to pick up school supplies. The Berriens falsely accused

                                         -3-
Lizelle of hitting Mrs. Berrien with a car while she was walking in Safeway’s

parking lot.

      According to the fabricated story, Mr. Berrien stood in the parking lot when

he saw Lizelle’s car race up and down the rows of cars. Then he saw the car hit

his wife on the left leg, causing her to twist and fall. Mr. Berrien allegedly ran to

help his wife and, while running, wrote down the car’s license plate number.

      Although they knew about a nearby doctor’s office, located only about 200

to 300 feet away, the Berriens did not immediately go there for medical help. Nor

did they ask any of the people around them for help. And they did not seek help

from the Safeway store. Despite the alleged hit-and-run’s location—near the

front of the store—nobody apparently volunteered assistance.

      Indeed, except for an individual named Shawn DePauw, nobody witnessed

the alleged accident. DePauw, who may have been acquainted with Mr. Berrien

prior to April 3, 2000, testified he had witnessed some 400 accidents in his

lifetime, but never once came to assistance or called for help. He claimed that,

from about two rows away, he saw Lizelle’s car hit Mrs. Berrien. According to

him, Mrs. Berrien’s feet flew up in the air before she fell. But having just

witnessed what is alleged to be a fairly serious accident, DePauw did absolutely

nothing to help. He did not call 911, report the accident to Safeway, or approach

either Mr. Berrien or his then-wife to offer help. He apparently got into his car

                                          -4-
and left. The Berriens claim they happened to run into DePauw a week later in

the same Safeway store. And so DePauw became a witness.

      Either later on the day of the alleged accident or the next day, the Berriens

reported the fabricated story to the police. Mrs. Berrien also visited a doctor.

      Criminal and Civil Cases in Colorado State Courts

      The false accusations resulted in two criminal prosecutions against

Lizelle—one misdemeanor and one felony case. Although the cases were

dismissed on April 12, 2001 and February 12, 2002, respectively, Lizelle’s

parents had spent slightly over $96,000 in defending Lizelle against the charges.

As the bankruptcy court noted, had she been convicted, Lizelle faced potential

deportation to South Africa.

      In addition, the Tylers had to defend two civil lawsuits filed against them.

In one, Mrs. Berrien’s insurance company sought subrogation for uninsured

motorist payments the company made to her in connection with the fabricated

accident. After investigating the facts surrounding the fabricated accident, the

insurance company dropped its claim against the Tylers.

      The second civil case was Mrs. Berrien’s April 2, 2002 lawsuit against

Lizelle and her parents for damages from the fabricated hit-and-run. By the

parties’ stipulation, the action was dismissed with prejudice on October 25, 2002.

      After resolving Mrs. Berrien’s lawsuit against them, Lizelle and her parents

filed their own lawsuit against the Berriens in Colorado state court. They alleged,

                                         -5-
among other claims, abuse of process, civil conspiracy to defraud, extreme and

outrageous conduct, and intentional infliction of emotional distress. As part of

their damages, the Tylers claimed expenses incurred in defending the civil and

criminal matters, including over $96,000 they had spent defending Lizelle’s

criminal charges. Before the trial scheduled for November 2004, however, Mr.

Berrien filed for bankruptcy, thus staying the Tylers’ civil case.

      Bankruptcy Proceedings

      The Tylers then filed adversary proceedings in the bankruptcy court to

establish the nondischargeability of Mr. Berrien’s debt for damages caused by the

false hit-and-run accusation. Among other allegations, the complaint charged Mr.

Berrien with making false statements “willfully and maliciously for the purpose

of monetary gain,” abusing “the criminal justice system for the ulterior purpose of

obtaining money fraudulently from” the Tylers, and engaging “in extreme and

outrageous conduct.” Aplt. App. 16–22.

      After a three-day trial, comparing the credibility and reliability of Lizelle,

her parents, and other plaintiff witnesses with that of the Berriens and other

witnesses for the defense, the bankruptcy court unequivocally concluded “the

plaintiffs win by a reasonably wide and deep margin.” Id. at 1033. The court

then awarded the Tylers $96,049.41 for expenses in defending Lizelle’s criminal

charges and a nominal sum of $1 for lost business opportunity and emotional

                                         -6-
distress. All damages represented nondischargeable debt under 11 U.S.C.

§ 523(a)(6) (“willful and malicious injury”). The BAP affirmed.

                                   II. Analysis

      “On appeal from BAP decisions, we independently review the bankruptcy

court’s decision.” Educ. Credit Mgmt. Corp. v. Mersmann (In re Mersmann), 505

F.3d 1033, 1041 (10th Cir. 2007). When, as here, the only dispute is a matter of

law, our review is de novo. Id.

      Unlike in his appeal to the BAP, Mr. Berrien does not now challenge the

bankruptcy court’s conclusion that his conduct caused “willful and malicious

injury” within the meaning of § 523(a)(6). Rather, he repeats the argument that

Lizelle’s parents could not recover the cost of defending Lizelle’s criminal

charges. Mr. Berrien contends the parents were merely volunteers, with no legal

obligation whatsoever to pay for their eighteen-year-old daughter’s legal

expenses. He thus reasons the parents have no legally cognizable claim for which

the bankruptcy court could have awarded them over $96,000 in damages. We

disagree.

                                        A.

      In the first place, we cannot accept Mr. Berrien’s characterization of

Lizelle’s parents as mere volunteers. The Tylers were defending their own legal

interest in paying for Lizelle’s criminal defense. Had she been convicted, her

criminal responsibility could have collaterally estopped the parents from arguing

                                        -7-
the opposite in defending a potential civil lawsuit against them, a lawsuit Mrs.

Berrien in fact commenced in short order. See, e.g., A-1 Auto Repair & Detail,

Inc. v. Bilunas-Hardy, 93 P.3d 598, 602 (Colo. Ct. App. 2004) (holding “that

issue preclusion will bar litigation in a civil trial of an issue that has been

previously litigated in a criminal trial, provided the requisites for the application

of issue preclusion are satisfied”). Had Lizelle been convicted, the conviction

would have helped Mrs. Berrien prove her civil case against the Tylers.

      Moreover, the car Lizelle was driving was uninsured, and the Tylers faced

significant exposure for their own liability if Lizelle were convicted of a hit-and-

run. See, e.g., Colo. Rev. Stat. § 10-4-619(1) (“Every owner of a motor vehicle

who . . . knowingly permits the operation of the motor vehicle on the public

highways of this state shall have in full force and effect a complying [insurance]

policy . . . covering the said motor vehicle . . . .”); Am. Family Mut. Ins. Co. v.

DeWitt, No. 05CA2687, 2008 WL 451742, at *3 (Colo. Ct. App. Feb. 21, 2008)

(“The family car doctrine imputes liability to the head of a household when he or

she has control over the vehicle and the vehicle is used by a person who is a

member of the household”).

      We thus cannot agree Lizelle’s parents were legally disinterested volunteers

when they paid for her criminal defense.

                                           -8-
                                         B.

      In any event, the Tylers had independent claims against Mr. Berrien that

they sought to vindicate in bankruptcy court.

      Section 523(a)(6) excepts from discharge any debt “for willful and

malicious injury by the debtor to another entity or to the property of another

entity.” The debtor’s conduct, in other words, must have caused “willful and

malicious injury.” As explained by the Supreme Court, this language means “that

the actor intend the consequences of an act, not simply the act itself.”

Kawaauhau v. Geiger, 523 U.S. 57, 61–62 (1998) (quotation marks omitted). For

debt to become nondischargeable under § 523(a)(6), “the debtor must desire to

cause the consequences of his act or believe that the consequences are

substantially certain to result from it.” Panalis v. Moore (In re Moore), 357 F.3d

1125, 1129 (10th Cir. 2004) (quotation and alteration marks omitted); see also 4

Collier on Bankruptcy ¶ 523.12[2] (15th ed. rev. 2008) (noting most courts

require an injury inflicted “either with the intent to cause the harm complained of,

or in circumstances in which the harm was certain or almost certain to result from

the debtor’s act”).

      The “willful and malicious injury” language, “[b]y its terms, . . . may apply

to a broad range of [tortious] conduct causing harm to people or property.” Id.

¶ 523.12[1]. Thus, for example, not only does this exception apply to liabilities

“arising from assault or assault and battery,” but claims “based on . . . intentional

                                         -9-
infliction of emotional distress . . . have [also] typically been held

nondischargeable.” Id. ¶ 523.12[4] (collecting authorities).

      The Tylers easily satisfy the “willful and malicious injury” requirement.

Prior to the bankruptcy filing, Lizelle and her parents filed a civil lawsuit against

the Berriens seeking damages for, among others, abuse of process, civil

conspiracy, extreme and outrageous conduct, and intentional infliction of

emotional distress. When Mr. Berrien stayed the case by petitioning for

bankruptcy, the Tylers intervened in his bankruptcy proceedings. In their

discharge complaint, the Tylers again broadly alleged Mr. Berrien’s outrageous

and malicious conduct, though this time tying the allegations, as they should

have, to the “willful and malicious injury” requirement of § 523(a)(6).

      Ruling in favor of the Tylers, the bankruptcy court concluded Mr. Berrien’s

outrageous conduct caused injury not only to Lizelle’s but also to her parents’

legal interest to be free from intentionally inflicted emotional distress and from

the abusive civil process directed against them. These tort claims all arose from

the pattern of abusive conduct employed by the Berriens against Lizelle and her

parents collectively, ranging from the false criminal charges, to the filing of civil

proceedings, to false claims against the Berriens’ insurance company, which

might have bolstered the credibility of the accusations.

      Under Colorado law, the Tylers were entitled to compensatory and punitive

damages for Mr. Berrien’s numerous torts. These damages include, among other

                                          -10-
things, emotional distress, lost business opportunity, and costs of defending

frivolous civil and criminal proceedings. See, e.g., Technical Computer Servs,

Inc. v. Buckley, 844 P.2d 1249, 1256 (Colo. Ct. App. 1992) (explaining “that, in

an action for malicious prosecution or abuse of process, a plaintiff may recover

attorney fees incurred in defending against the earlier wrongful litigation”). The

criminal proceedings were but a part of the larger scheme to abuse the legal

process and inflict emotional injuries on the Tylers and Lizelle. Thus, the

amounts expended by the Tylers in combating the fraudulent scheme necessarily

include the costs of defending Lizelle.

       The BAP correctly concluded, “Debtor’s statements to Safeway, the police,

and investigators were clearly intended to support a claim for damages, in which

Debtor believed he would share.” Aplt. Br. Att. at 8. Seeking “to fraudulently

obtain money from whatever source he could find,” Mr. Berrien “caused the

Tylers to incur the expense of defending Lizelle against his false allegations.” Id.

at 8–9. 2

       2
         Mr. Berrien also challenges the award of criminal defense costs to
Lizelle. He argues Lizelle, who did not herself pay the cost of criminal defense,
should not be able to recover for these expenses. Because we conclude the
bankruptcy court did not err in awarding damages jointly to Lizelle’s parents, any
error would be harmless. See Fed. R. Civ. P. 61 (“At every stage of the
proceeding, the court must disregard all errors and defects that do not affect any
party’s substantial rights.”); Fed. R. Bankr. P. 9005 (incorporating Rule 61 in
bankruptcy proceedings).

                                          -11-
      We therefore agree with the bankruptcy court’s conclusion awarding the

parents and Lizelle damages for emotional distress and compensatory expenses in

the amount of approximately $96,000.

                                III. Conclusion

      For the foregoing reasons, we AFFIRM the BAP’s order and judgment. 3

                                              Entered for the Court

                                              Timothy M. Tymkovich
                                              Circuit Judge

      3
         We DENY the Tylers’ motion to dismiss the appeal and motion for
attorney’s fees. Both rely on a written agreement between the Tylers and Mrs.
Berrien, stipulating that only Mrs. Berrien would consider the BAP’s decision to
be final and non-appealable. As best we can tell from the record, Mr. Berrien was
not a party to the agreement, and we thus cannot enforce it against him.

                                       -12-