Beacon Talent Agency v. Marc Bass , 653 F. App'x 494 ( 2016 )

FILED
NOT FOR PUBLICATION
JUN 17 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In the Matter of: MARC LEE BASS, No. 14-56247
Debtor, D.C. No. 2:13-cv-07707-JVS
BEACON TALENT AGENCY, Inc., AKA MEMORANDUM*
Marc Bass Agency, Inc.,
Appellant,
v.
MARC LEE BASS,
Appellee.
Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
Argued and Submitted June 10, 2016
Pasadena, California
Before: GOULD and HURWITZ, Circuit Judges, and RESTANI,** Judge.
At issue in this case is a bankruptcy court’s order granting summary
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Jane A. Restani, Judge for the United States Court of
International Trade, sitting by designation.
judgment to Beacon Talent Agency (“Beacon”), holding that Beacon has a non-
dischargeable claim against a Chapter 7 debtor, Marc Lee Bass (“Bass”), based on
a California state court judgment. On appeal, the district court reversed and
remanded.
We have jurisdiction under 28 U.S.C. § 1291 to review the district court’s
decision. We review that decision de novo; the bankruptcy court’s findings of fact
are reviewed for clear error and its conclusions of law are reviewed de novo.
Harmon v. Kobrin (In re Harmon), 250 F.3d 1240, 1245 (9th Cir. 2001). In
reviewing the summary judgment, we determine, “viewing the evidence in the light
most favorable to the nonmoving party, whether there are any genuine issues of
material fact and whether the bankruptcy court correctly applied the substantive
law.” Id.“[F]ederal courts . . . give preclusive effect to state-court judgments
whenever the courts of the State from which the judgments emerged would do so.”
Kremer v. Chem. Constr. Corp., 456 U.S. 461, 482 (1982) (quoting Allen v.
McCurry, 449 U.S. 90, 96 (1980)). California does not give preclusive effect to
judgments awarded in excess of the relief properly requested, including untimely
noticed punitive damages awards. See Greenup v. Rodman, 726 P.2d 1295, 1297
(Cal. 1986) (In Bank); Moffat v. Moffat, 612 P.2d 967, 972 (Cal. 1980) (In Bank);
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Burtnett v. King, 205 P.2d 657, 658–59 (Cal. 1949); see also Cal. Civ. Proc. Code
§§ 425.11, 580, 585. The district court thus properly refused to give preclusive
effect to the punitive damages award in the state court judgment. See Matera v.
McLeod, 51 Cal. Rptr. 3d 331, 343–45 (Ct. App. 2006).
Without the punitive damages award, the default judgment did not satisfy
the requirements for non-dischargeability under either 11 U.S.C. §§ 523(a)(4) or
(a)(6). Under 11 U.S.C. § 523(a)(4), Beacon did not establish that Bass was acting
in a fiduciary capacity, see Cal-Micro, Inc. v. Cantrell (In re Cantrell), 329 F.3d
1119, 1125–26, 1128 (9th Cir. 2003), or that he acted with the requisite intent for
purposes of embezzlement, compare Transamerica Commercial Fin. Corp. v.
Littleton (In re Littleton), 942 F.2d 551, 555–56 (9th Cir. 1991) (holding that
embezzlement requires fraudulent intent), with Burlesci v. Petersen, 80 Cal. Rptr.
2d 704, 706 (Ct. App. 1998) (holding that in California, conversion does not
require intent to defraud). Additionally, under 11 U.S.C. § 523(a)(6), Beacon did
not establish a willful and malicious injury. See Peklar v. Ikerd (In re Peklar), 260
F.3d 1035, 1039 (9th Cir. 2001) (“A judgment for conversion under California law
. . . does not, without more, establish that a debt arising out of that judgment is
non-dischargeable under § 523(a)(6).”).
AFFIRMED.
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