Appeal from the United States Bankruptcy Court for the Eastern District of California Hon. Christopher M. Klein, Bankruptcy Judge, Presiding. Bk. No. 09-36284
SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT
Adv. No. 09-02626 Debtor.
Argued on November 18, 2010, at Sacramento, California Submission Vacated on January 6, 2011, and Resubmitted February 4, 2011
Before: MONTALI,*fn2 DUNN and HOLLOWELL, Bankruptcy Judges.
Prior to filing her chapter 7*fn3 case, the appellant debtor (represented by counsel who withdrew three weeks prior to trial) filed a state court partition action against the appellee creditor (her former boyfriend and father of her child). The creditor filed several cross-claims against the debtor, including one for abduction/enticement of the child. Following a trial at which the debtor did not appear, the state court entered a judgment in favor of the creditor, awarding him general damages in the amount of $400,000 for "the loss of his relationship" with the child and punitive damages in the amount of $50,000. Before entry of this state court judgment (and following years of litigation and court-ordered counseling), the family court had awarded legal custody of the child to debtor and denied visitation rights to the creditor (unless the child initiated and sought such visitation).
The debtor thereafter filed her bankruptcy case and the creditor appellee filed a nondischargeability complaint against her. The bankruptcy court granted summary judgment in favor of creditor, excepting from discharge the $450,000 state court judgment. The debtor appealed. We VACATE and REMAND.
Appellant Christine M. Emmerson (previously known as Christine Lara) ("Debtor") and appellee Tony D. Regis ("Plaintiff") are the parents of a minor daughter, Breanna.
Their relationship ended acrimoniously, prompting (among other actions) a multi-year custody battle in family court. While family court custody litigation was pending, Debtor commenced an action in state civil court for partition of a residence she and Plaintiff jointly owned (the "Partition Action"). Plaintiff filed an answer asserting an "affirmative defense" of offset for, "abduction and enticement [of Breanna]"*fn4 and filed a cross- complaint setting forth a child abduction/child enticement cause of action under California Civil Code section 49 ("CC § 49").*fn5 Plaintiff requested punitive damages under California Civil Code section 3294 ("CC § 3294"), alleging that Debtor had acted with malice or oppression.
Before and while the Partition Action was pending, numerous orders had been entered in state family court granting interim custody to Debtor, mandating family counseling, appointing counsel to represent Breanna's interests, and appointing a family counselor. In August 2008 --- before the trial date in the Partition Action -- the family court awarded full legal custody of Breanna to Debtor, with no visitation rights granted to Plaintiff unless initiated and sought by Breanna.
The state civil court scheduled a jury trial in the Partition Action for October 6, 2008. Debtor did not appear despite several notices of the trial date, including one contained in an order relieving her counsel from representation in the action approximately three weeks prior to the trial date. In light of Debtor's non-appearance, the state court converted the trial to a non-jury matter. To the extent Plaintiff's testimony and evidence was uncontroverted, the trial was essentially a default prove-up hearing.
On February 5, 2009, the state civil court entered an Order Following Trial in the partition action.*fn6 Of significance in this appeal is the award of damages in favor of Plaintiff on his cross-complaint alleging "abduction and enticement" of Breanna:
As to [Plaintiff's] second cause of action on this cross-complainant [sic] pursuant to Civil Code section 49 for the abduction and enticement by [Debtor] of the party's minor child . . . [t]he court awards the following amount of damages in favor of [Plaintiff] and against [Debtor]:
A. General damages for the loss of his relationship with Breanna for a period of eight years and extreme and severe emotional distress suffered by that loss [$50,000 per year]: $400,000[*fn7 ]
B. Punitive Damages: $50,000 Total Damages: $450,000
The state court also indicated in its Order Following Trial that it would award Plaintiff $23,550 on his cross-claim for breach of contract, but the judgment appears to award Plaintiff a "net credit" in that amount against the value of the house, instead of actual damages.
After Debtor filed her chapter 7 case, Plaintiff filed a timely complaint to except the entire state court judgment amount of $473,500 (including the breach of contract "net credit" of
$23,550) from discharge. Plaintiff thereafter filed a motion for summary judgment invoking issue preclusion and requesting the bankruptcy court "to ...