[00:00:03] Speaker 00:
Inrey Del Rosario, Sebastian M. Medvei, Council for Appellant, MO, Craig G. Margulies, Council for Apolies, Leo Del Rosario, and Zerlin Fonseca Del Rosario.

[00:00:21] Speaker 01:
Good morning, your honors.

[00:00:22] Speaker 01:
My name is Sebastian Medve.

[00:00:24] Speaker 01:
I am the attorney for the appellant, MO, who is also a creditor in the adversarial proceeding.

[00:00:32] Speaker 01:
Do you want to reserve a little time?

[00:00:33] Speaker 01:
Yes, five minutes, please, your honor.

[00:00:36] Speaker 01:
May it please the court, as the court knows, the appellant contends that the bankruptcy court made two mistakes, essentially two mistakes, of what amount to

[00:00:50] Speaker 01:
errors in construction first being uh... statutory construction so there is a long it's done over uh... yes sir yes uh... and uh... uh... statutory construction on the one hand construction of the judgment the the creditors judgment on the other the latter obviously relating to the concept of red judicata and bank bankruptcy courts ability to uh...

[00:01:21] Speaker 01:
Construe that judgment in a way that is not consistent with what the state court determined beginning with the statutory construction Let's start there because the state court really didn't determine anything, right?

[00:01:35] Speaker 02:
I mean they determine there's a violation of Discovery gave sanctions.

[00:01:39] Speaker 02:
That's really all that I determined

[00:01:42] Speaker 01:
In practical terms, yes, but in terms of what the judgment is for, appellant contends that the judgment is for intentional torts, battery and intentional infliction of emotional distress.

[00:01:58] Speaker 01:
In order to get to that judgment, the state court necessarily had to find the elements of those torts.

[00:02:06] Speaker 05:
But it didn't, did it?

[00:02:07] Speaker 05:
Because it imposed it as a sanction.

[00:02:09] Speaker 05:
It simply entered a judgment against them because they said you didn't cooperate in discovery.

[00:02:14] Speaker 05:
Didn't make any real findings, didn't take any testimony, didn't review any documents, didn't have any evidence in front of it.

[00:02:20] Speaker 05:
It just entered a judgment at your request or whoever was representing the MO in the state court.

[00:02:26] Speaker 05:
That doesn't have any substance to it.

[00:02:30] Speaker 05:
It didn't make any determinations.

[00:02:31] Speaker 05:
It simply entered

[00:02:33] Speaker 05:
checked the box and said default judgment entered judgment for the plaintiff, period.

[00:02:37] Speaker 01:
Correct, absolutely correct, but I think that the next step then, and we cited to a case in the brief that a default judgment has the same collateral estoppel effect as a merits analysis.

[00:02:53] Speaker 02:
I don't think anybody's challenging that there's a collateral, that there's ratio to kind of full faith, whatever you want, that the debtors are liable for that amount from that lawsuit.

[00:03:06] Speaker 02:
Can't really tell what that lawsuit was about as to them, though.

[00:03:09] Speaker 02:
I mean, it was for the damages inflicted by their child.

[00:03:14] Speaker 02:
That's what you got.

[00:03:15] Speaker 02:
What that means, I don't know.

[00:03:16] Speaker 01:
I agree, Your Honor.

[00:03:19] Speaker 01:
I think that ambiguity, the question is, does that mean that the bankruptcy court can interpret the judgment as to not establishing the causes of action that were stated?

[00:03:32] Speaker 01:
Or does the bankruptcy court instead have to say, well, I don't know what exactly was found, but I do know that the causes of action were established.

[00:03:40] Speaker 02:
What was it found that was on the judgment?

[00:03:41] Speaker 02:
I mean, what was alleged?

[00:03:43] Speaker 01:
It was alleged.

[00:03:44] Speaker 01:
So the complaint basically just said, and as the court knows, it basically said, the parents are liable for the conduct of the child.

[00:03:53] Speaker 02:
As principals and agents.

[00:03:55] Speaker 01:
Basically as a vicarious liability.

[00:03:58] Speaker 02:
Well, no, I mean, vicarious liability depends upon something.

[00:04:01] Speaker 02:
And I thought that the state alleged, state claim, state complaint alleged principal liability for the agent being the son.

[00:04:11] Speaker 01:
It did have an allegation like that.

[00:04:14] Speaker 01:
It also had an allegation that they ratified the conduct of the child.

[00:04:19] Speaker 01:
I find that hard to believe, right?

[00:04:21] Speaker 02:
Because again, what was the agency that was given for the principal and agent?

[00:04:25] Speaker 02:
You know, ultimately we get to Strang.

[00:04:28] Speaker 02:
You say Strang.

[00:04:29] Speaker 02:
Strang says, look, this was done within the course of the partnership.

[00:04:32] Speaker 02:
Somebody got something bad by bad fraud.

[00:04:35] Speaker 02:
It was in the course of the scope of the agency for the business.

[00:04:40] Speaker 02:
Here's a child, right, in school, a parent.

[00:04:47] Speaker 02:
I'm having a hard time understanding how that can be within the scope of the agency.

[00:04:50] Speaker 02:
I don't have a hard time understanding how that was not outside the scope of that agency.

[00:04:54] Speaker 02:
So there's a conflict right there, isn't there?

[00:04:57] Speaker 01:
There is, I think, if the only basis for the vicarious liability is a principal-agent relationship.

[00:05:05] Speaker 01:
What else was alleged?

[00:05:06] Speaker 01:
Well, it was a parent-child relationship.

[00:05:09] Speaker 05:
But, I mean, if they're in their custody in control, right?

[00:05:13] Speaker 05:
That's not true here.

[00:05:15] Speaker 05:
We know they were in school.

[00:05:16] Speaker 05:
Parents weren't present.

[00:05:18] Speaker 05:
They didn't have any control over the child's actions.

[00:05:22] Speaker 01:
Sure, but under Civil Code 1714.1, the California Civil Code, there is imputed liability without the parent being present or in control in the moment.

[00:05:33] Speaker 05:
That's not what the statute says, right?

[00:05:35] Speaker 02:
First of all, is that what was alleged in the complaint?

[00:05:37] Speaker 01:
It was not, the code itself was not alleged in the complaint, no.

[00:05:44] Speaker 01:
So the relationship was alleged only.

[00:05:46] Speaker 02:
All right, but the relationship principal agent is common law.

[00:05:50] Speaker 02:
Obviously, the code is code.

[00:05:51] Speaker 02:
It's statutory.

[00:05:52] Speaker 02:
Those seem to be two distinct sources of underlying liability to be imposed vicariously, right?

[00:06:00] Speaker 01:
Correct.

[00:06:00] Speaker 01:
And then there's also a third one, Your Honor, which is the statutory parent-child liability under 1714.1.

[00:06:07] Speaker 01:
And then there is also a common law, California common law parent-child liability, which is the RADA case.

[00:06:17] Speaker 02:
Was that raised in the complaint either?

[00:06:19] Speaker 01:
None of these were expressly stated as the bases for the liability in the complaint.

[00:06:27] Speaker 02:
We might as well lean into it, too.

[00:06:29] Speaker 02:
I thought 1714.1 also limited the damages to $25,000.

[00:06:36] Speaker 01:
It limited it to $25,000, and it increases every year from the $40,000.

[00:06:41] Speaker 01:
It doesn't increase to a million, though.

[00:06:43] Speaker 01:
No.

[00:06:45] Speaker 05:
And that raises the question about race judicata.

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Under California law, race judicata or collateral estoppel is discretionary if there are certain elements.

[00:06:56] Speaker 05:
It has to be necessary, it has to be actual, it has to be tried, it has to be a final judgment.

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So the court could decide that it's not going to apply race judicata if it didn't find it to be applicable.

[00:07:12] Speaker 05:
in its discretion if it gave us a reason.

[00:07:14] Speaker 05:
But do you want to go back to the bankruptcy court and try the case on the merits?

[00:07:22] Speaker 05:
Or do you just want us to determine that the court aired as a matter of law by not giving it the preclusive effect that you suggest it's required?

[00:07:33] Speaker 01:
That's a great question, Your Honor.

[00:07:35] Speaker 02:
I want you to take a moment and think about that.

[00:07:37] Speaker 02:
Yeah.

[00:07:37] Speaker 02:
Because I don't see anything in your briefing to date that suggests that you want anything other than reversal.

[00:07:43] Speaker 02:
And you're pretty clear on that.

[00:07:46] Speaker 01:
Right.

[00:07:48] Speaker 01:
And yes, and I think, Your Honors, because of, I think, really the principle, the first argument in the brief was the statutory construction.

[00:08:00] Speaker 01:
I think that's why we tackled it in that way is to say, well,

[00:08:04] Speaker 01:
You can't dismiss the complaint because the plain language of 523A6 doesn't preclude us from bringing our adversarial complaint.

[00:08:15] Speaker 02:
I want you to develop that point, but I do want to press back for an answer on Judge Gann's point.

[00:08:19] Speaker 02:
I mean, because I'm reading everything to date, and it is reversed.

[00:08:25] Speaker 02:
Right.

[00:08:25] Speaker 05:
And just enter judgment.

[00:08:27] Speaker 02:
Yes.

[00:08:27] Speaker 02:
Don't.

[00:08:27] Speaker 02:
Not even a man, right?

[00:08:29] Speaker 05:
Right.

[00:08:30] Speaker 04:
Right.

[00:08:30] Speaker 05:
Not give us an opportunity, not give us a trial, just reverse.

[00:08:37] Speaker 01:
I think, so I'm strictly on this construction of the judgment.

[00:08:43] Speaker 01:
I think that we have arguments to basically say that there is nothing really to adjudicate in the bankruptcy court if the dismissal is reversed, because if our judgment has that effect, then we should pretty much as a matter of law prevail on our exception to 523A6.

[00:09:04] Speaker 01:
So ideally, yes, if I could have my dream outcome, it would be to have reversal and entry of judgment in the creditor's favor on that exception.

[00:09:17] Speaker 05:
For the full million dollars?

[00:09:20] Speaker 01:
Yes, Your Honor.

[00:09:23] Speaker 01:
But I think the reason that we framed it as a reversal of the dismissal is because we think we kind of argued it more under the

[00:09:34] Speaker 02:
scope of the statute and the construction of the statute and Let's turn to that because you get close to five five minutes, and that's the meat of it right you believe under Barton were for in the plain language of 523 a six That you can impute somebody else's conduct and under a six their intent to another individual through vicarious liability correct

[00:10:00] Speaker 01:
I don't know if it's plain language.

[00:10:03] Speaker 01:
I mean, I think the difficulty with saying that it's plain language is that when you're imputing liability, is it plain that that person is standing in the shoes of the other person?

[00:10:16] Speaker 01:
And I think that it's kind of ambiguous because...

[00:10:22] Speaker 01:
I agree with that.

[00:10:23] Speaker 01:
And it seems like it was plain enough in strength.

[00:10:25] Speaker 02:
Well, there we go.

[00:10:30] Speaker 02:
Because under Barthmore, they did engage in your textual analysis, right?

[00:10:35] Speaker 02:
And the fact that the court relied heavily on this passive voice in 523A2 was critical.

[00:10:45] Speaker 02:
And in fact, they went and contrasted that with the other provisions of 523A2, right, and B and C, where they found that there was expressed language that had to be by the debtor.

[00:10:57] Speaker 02:
And that's the language you're faced with in A6, isn't it?

[00:11:00] Speaker 01:
I think that's the strongest argument against our construction.

[00:11:04] Speaker 01:
But I think there's other language in Barton Werfer that detracts from that.

[00:11:10] Speaker 02:
But where is it in A6?

[00:11:12] Speaker 02:
I mean, that's the problem.

[00:11:14] Speaker 01:
Well, I think what takes away from that passive argument in Barton Wharford is that basically in the next heading they say, well, it actually doesn't even matter, right?

[00:11:26] Speaker 01:
Because we have this- Did they say that?

[00:11:28] Speaker 02:
Or did they say, we look at it to confirm the plain language?

[00:11:34] Speaker 01:
Right.

[00:11:34] Speaker 01:
Well, I think they said, we made the same decision in Strang, and then the legislature agreed with us.

[00:11:42] Speaker 01:
And they basically focused on that.

[00:11:45] Speaker 01:
And I think, yes, the strongest argument against our point is that in Barton-Wilford, they set up this.

[00:11:51] Speaker 02:
What was the history of A6 in relationship to STRANG?

[00:11:54] Speaker 02:
Do you know the chronology?

[00:11:56] Speaker 01:
That I don't, Your Honor.

[00:11:57] Speaker 05:
So Council, you keep talking about vicarious liability.

[00:12:02] Speaker 05:
And the statute makes the parents liable.

[00:12:06] Speaker 05:
Judge Spraker is talking to you about vicarious imputation of conduct.

[00:12:12] Speaker 05:
You've never made that argument, I don't think.

[00:12:15] Speaker 01:
I think, you know, it's those concepts because the wording is very technical, and I think there's often a misspeaking in our briefing as well, which is to say that there's a

[00:12:31] Speaker 01:
is ignoring the distinction between imputed conduct and imputed liability.

[00:12:37] Speaker 01:
And there obviously is a distinction.

[00:12:39] Speaker 01:
But I think what it comes down to for our case in particular is that the conduct is not really on the record clearly.

[00:12:50] Speaker 01:
So all we have is our understanding of what the liability is.

[00:12:54] Speaker 01:
And if the liability is necessarily for conduct that would satisfy the exception,

[00:13:01] Speaker 01:
That puts us in the right place.

[00:13:04] Speaker 04:
You're at about closing in on two minutes.

[00:13:06] Speaker 04:
If this is a good time for you to take a break, we can do that.

[00:13:11] Speaker 04:
Thank you.

[00:13:33] Speaker 03:
May it please the court, Craig Margulies with Margulies Faith LLP on behalf of the Apolize Leo del Rosario in Zerlin, Foneka del Rosario, husband and wife, and the debtors in the underlying Chapter 7 bankruptcy case.

[00:14:01] Speaker 03:
So I believe the panel has hit the nail on the head with the problems for the appellant in this case.

[00:14:10] Speaker 03:
I think Judge Kaufman got it right.

[00:14:16] Speaker 03:
Judge Kaufman never used the word categorically as his appellant is seeking to have done in this case through the reversal.

[00:14:26] Speaker 03:
I think categorically is the word that the appellant is using

[00:14:30] Speaker 03:
Because the appellant is seeking to create a bright line rule that maybe he can take up on another appellate level.

[00:14:37] Speaker 03:
And what Judge Kaufman did is she looked at the facts.

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She looked at the law.

[00:14:43] Speaker 03:
She applied various facts and found that willful and malicious injury by the debtor did not exist anywhere in the record by the appellant in the state court pleadings, as your honors touched on the state court complaint.

[00:14:59] Speaker 03:
it was a conclusory allegation that through vicarious liability the parents were liable for the acts of their son and the judge found that there were no facts there was an admission by the appellant that he had no more facts to plead and therefore actually changed her ruling from allowing leave to amend through the admission to

[00:15:27] Speaker 05:
grant no amendment and dismissed with prejudice.

[00:15:43] Speaker 05:
had a conversation with plaintiff's counsel and suggested if you want me to grant you leave to amend so that you can further explain why there's liability here, or not liability, how you satisfy the statutory requirements of 523-86, I'll give you the opportunity.

[00:16:01] Speaker 05:
And plaintiff said, I don't have anything further to add, so I'll stand on the record I've made, and this is it.

[00:16:08] Speaker 03:
Exactly.

[00:16:11] Speaker 03:
I started to address that part.

[00:16:13] Speaker 03:
It was in her original tentative ruling, and I was submitting on the tentative, but for the leave to amend aspect.

[00:16:21] Speaker 03:
And at that point, and you can see it in the transcript, which is in the record, appellant counsel spoke up and said, I don't intend to amend.

[00:16:32] Speaker 03:
I have no further facts to allege.

[00:16:35] Speaker 03:
And then she asked him, so basically you're agreeing that

[00:16:37] Speaker 03:
this could be dismissed with prejudice, and he said yes.

[00:16:41] Speaker 03:
So I think there's a stopple and there's a waiver by the appellant to even think about going back to the state court or the bankruptcy court for further amendments.

[00:16:51] Speaker 03:
And this complaint that we're here before is a first amended complaint.

[00:16:56] Speaker 03:
If the original complaint actually misstated everything, we had a motion to dismiss on that first.

[00:17:03] Speaker 03:
It misstated the record and said that plaintiffs

[00:17:08] Speaker 03:
that the parents were liable for battery and intentional infliction of emotional distress.

[00:17:17] Speaker 03:
It didn't mention the word vicarious liability anywhere in the original complaint, the adversary complaint.

[00:17:24] Speaker 03:
So we move to dismiss for failure to state

[00:17:28] Speaker 03:
a correct cause of action under 523A6 and in response the first amended complaint was filed stating no it is solely based on vicarious liability and then attaching

[00:17:40] Speaker 03:
the requisite pleadings from the court below.

[00:17:43] Speaker 05:
So this is a determination on, what I'm trying to say is that they asked for the court to apply Ray Stuticata collateral sample principles only.

[00:17:56] Speaker 05:
They didn't want a trial.

[00:17:57] Speaker 05:
They didn't want an opportunity to present evidence in the bankruptcy court.

[00:18:00] Speaker 05:
They wanted the court either to say, it's sufficient on this with what we've got here in front of us by your amended complaint and an opposition to the motion to dismiss.

[00:18:13] Speaker 05:
It's either an up or down.

[00:18:14] Speaker 05:
That's it.

[00:18:15] Speaker 03:
That's correct, Your Honor.

[00:18:20] Speaker 03:
So I think, as I said, Judge Kaufman did get it right with her analysis and further finding that there were

[00:18:32] Speaker 03:
No, state court, I'm sorry, I lost my train of thought here for a second.

[00:18:43] Speaker 03:
But there were no findings by the state court that the defendants themselves injured the plaintiffs or acted willfully and maliciously and that the issues were not necessarily decided.

[00:18:52] Speaker 03:
Collateral stopper was addressed by the bankruptcy court and based on the

[00:18:59] Speaker 03:
the underlying state court judgment being provided by default judgment.

[00:19:08] Speaker 03:
And as opposing counsel stated, there are certain times where

[00:19:11] Speaker 03:
finding non-dischargeability based on res judicata and collateral cerebral in a default situation is possible.

[00:19:20] Speaker 03:
And that was, for example, in a fraud scenario where the exact actual elements for common law fraud and A2A have the same elements for actual fraud and therefore in a default judgment scenario

[00:19:36] Speaker 03:
It can be brought up in that way on residue to cut a collateral stopper.

[00:19:39] Speaker 03:
But when you have battery and intentional infliction of emotional distress, the elements as appellant actually sought to put before the court in a reply, putting a state court case in for each one.

[00:19:54] Speaker 03:
The elements of battery and intentional infliction of emotional distress don't align with willful and malicious injury by the debtor in any regard.

[00:20:03] Speaker 03:
It doesn't meet the standard for willful, which is different under battery elements as well as intentional infliction of emotional distress.

[00:20:12] Speaker 03:
For example, intentional infliction of emotional distress says that it can be reckless.

[00:20:16] Speaker 03:
Well, there's a Supreme Court precedent that reckless doesn't rise to the level of willfulness.

[00:20:22] Speaker 03:
Secondly, the elements for both of those statutes don't touch on the issue of malice or prove the subjective intent to cause harm by the debtor.

[00:20:33] Speaker 03:
So there's no way res judicata or collateral estoppel could have been found simply by the state court stating that... Will enter judgment on behalf of the plaintiff.

[00:20:47] Speaker ?:
Right.

[00:20:52] Speaker 03:
And the court touched on the fact that the appellant has relied heavily on Burton Weifer.

[00:20:59] Speaker 03:
And so I'd like to address a couple of points about Burton Weifer, because I think their reliance on it is misplaced, misinterpreted.

[00:21:07] Speaker 03:
And Burton Weifer is, in one part, distinguishable.

[00:21:12] Speaker 03:
Burton Werfer.

[00:21:13] Speaker 03:
Barton Werfer.

[00:21:14] Speaker 03:
Barton Werfer.

[00:21:18] Speaker 03:
Barton Werfer.

[00:21:19] Speaker 03:
Yeah.

[00:21:20] Speaker 03:
So yeah, Judge Barrett.

[00:21:22] Speaker 03:
spoke for the unanimous court and addressed the specific issues of 523A2A, non-dischargeability for fraud, and liability for a fraud, particularly where the debtor did not personally commit the injury, right?

[00:21:37] Speaker 03:
So Burt Morpher is specific on those issues, and appellant is seeking to forget that it's based on fraud and 523A2A specifics.

[00:21:49] Speaker 03:
and the plain language of those statutes and tries to generalize it to apply to 523A6.

[00:21:56] Speaker 03:
And it's just not proper.

[00:21:58] Speaker 03:
And I think Burton-Worfar, as the court also acknowledged, distinguished the subsections A2B and A2C, stating that those sections require some culpable act on the part of the debtor.

[00:22:15] Speaker 03:
And so I think Burton-Worfar is actually

[00:22:20] Speaker 03:
supportive of our side, even though it's heavily relied on by the appellant, because it makes the distinguishing factor of the plain language of the statute, which is applicable to the A6 matter that says, or the statute that says, by the debtor.

[00:22:35] Speaker 04:
Well, the passive language allowed for

[00:22:40] Speaker 04:
what were basically some state law concepts to kind of fill the gap, right?

[00:22:44] Speaker 04:
That was the point.

[00:22:45] Speaker 04:
Right.

[00:22:46] Speaker 04:
When it didn't have to be done by the debtor, you could look at other theories that the Supreme Court said were out there and that they believe, articulated in Strang, and certainly there was some follow-up from Strang.

[00:22:59] Speaker 04:
And what you would say is when the language by the debtor is inserted, it's very hard to say by the debtor or deemed to be by the debtor in A6, right?

[00:23:07] Speaker 04:
That's the point?

[00:23:08] Speaker 03:
Right.

[00:23:08] Speaker 04:
Okay.

[00:23:10] Speaker 04:
Got it.

[00:23:11] Speaker 03:
And speaking to Strang, I think Appellate seeks to hang its hat on this 1885 case where Strang held that a non-bad actor partner was liable for the acts of his partner's fraudulent acts despite that the statute concerning fraud and embezzlement had the of the bankrupt language in it.

[00:23:35] Speaker 03:
which was later removed by Congress as to fraud.

[00:23:39] Speaker 03:
So Strang is really a case at this point that courts have relied on for agency principles.

[00:23:48] Speaker 02:
Do you think that Strang survives Barton Wharfer?

[00:23:53] Speaker 03:
I'm sorry?

[00:23:54] Speaker 02:
Do you believe Strang survives Barton Wharfer?

[00:23:57] Speaker 03:
I think it is very limited.

[00:23:58] Speaker 02:
This is the philosophy part of the argument.

[00:24:01] Speaker 02:
Yeah.

[00:24:01] Speaker 03:
I think it is very limited.

[00:24:03] Speaker 03:
applicability in an agency or partnership principles, and that's really, really it.

[00:24:15] Speaker 03:
And in a fraud context for those circumstances.

[00:24:18] Speaker 02:
Well, I mean, I guess that's why I'm asking, do you think it's limited to 523A to A, which has now been revised through Martinwerfer, or does it apply to the other subsections of 523A?

[00:24:30] Speaker 03:
I would think it would be the former, that it applies strictly to 523-82.

[00:24:34] Speaker 02:
Do you know if any court has really picked up these issues otherwise?

[00:24:40] Speaker 03:
Well, there's been a lot of cases that have addressed these issues, particularly... Post-Bartenwerfer?

[00:24:49] Speaker 03:
Post-Bartenwerfer, there was a case, yes.

[00:24:56] Speaker 03:
And it was cited in the opinion.

[00:24:58] Speaker 03:
It's the Coons case, I believe.

[00:25:01] Speaker 03:
And the Coons case was where a wife stole funds from her employer, and it was a 523A6 case, A2A, and A4.

[00:25:17] Speaker 03:
This was a 2024 bankruptcy of the Norland District of Ohio.

[00:25:21] Speaker 03:
So it's a bankruptcy case, obviously not binding on this court.

[00:25:26] Speaker 03:
But the bankruptcy court held that vicarious liability is not actionable under 523A6 because it's written in the active voice and identifies the debtor as the bad actor.

[00:25:38] Speaker 03:
And then in contrast, it cites to the A2A and A4 are written in the passive voice, so picking up on Burton for

[00:25:46] Speaker 03:
I probably still am not saying it right.

[00:25:50] Speaker 03:
And so the universe, it said they're written in the passive voice and don't identify a bad actor.

[00:25:56] Speaker 03:
So the universe of bad actors is not limited to the debtor.

[00:26:00] Speaker 03:
And it said the language of 523.86 undercuts application of the vicarious liability principles of Burtonwerfer to claim seeking an exception to discharge for willful and malicious injury to a plaintiff.

[00:26:14] Speaker 03:
So I think that's,

[00:26:16] Speaker 03:
The only case I saw that was post-Burton Werfer on that issue.

[00:26:19] Speaker 05:
And it supports you, doesn't support them?

[00:26:22] Speaker 03:
It does.

[00:26:23] Speaker 03:
And it's also cited by Judge Kaufman.

[00:26:28] Speaker 02:
Your time's kind of running up.

[00:26:29] Speaker 02:
I want to offer you the opportunity to address counsel's remarks as to California Civil Code 1714.1, if you want to.

[00:26:38] Speaker 03:
So obviously, it's limited to the 25,000, as the court pointed out.

[00:26:44] Speaker 03:
But I don't think any amount of money is dealing with the legal issues to support and approve the court below's ruling.

[00:26:55] Speaker 03:
I don't think any amount of money is applicable to the situation.

[00:27:01] Speaker 03:
Obviously seeking a million dollars is contrary to that statute which they're relying on.

[00:27:09] Speaker 03:
But I think California law,

[00:27:15] Speaker 03:
doesn't apply to federal Baldwin, for example, that says that the bankruptcy courts and the federal courts determine what is non-dischargeable.

[00:27:26] Speaker 03:
So just because there's a relationship between a parent and a child that's held under state law to apply, it doesn't mean that it meets the standards for 523A6 by the debtor, which is determined by the bankruptcy court, not by a state court.

[00:27:46] Speaker 03:
I don't see that citing to California finding this parent-child relationship as applicable unless you can then convince the Bankruptcy Court and apply it to 523.

[00:28:03] Speaker 02:
Did you understand that to be the basis of the default judgment in the state court?

[00:28:11] Speaker 03:
The basis of the default judgment was

[00:28:16] Speaker 02:
based on discovery sanctions right but what was it was it part of the allegations within the first amendment of the minute complete the only allegations was vicarious liability.

[00:28:27] Speaker 04:
No statutory.

[00:28:31] Speaker 03:
I don't believe so I don't believe so I could be wrong on that but I don't believe so I think it was simply based on alleging vicarious liability.

[00:28:41] Speaker 04:
Well, you're at your time unless somebody has a further question.

[00:28:44] Speaker 03:
Thank you very much.

[00:28:45] Speaker 03:
Thank you.

[00:28:45] Speaker 03:
Thank you.

[00:28:46] Speaker 03:
Appreciate your time.

[00:29:05] Speaker 01:
I think an interesting point that I should address first is whether String survives Barton Werfer, and I think it does.

[00:29:19] Speaker 01:
I think Barton Werfer in part was decided based on String, and on a lower level it was.

[00:29:29] Speaker 01:
The actual, the Ninth Circuit opinion in Barton Werfer

[00:29:33] Speaker 01:
you know, launched the case off, relied on Strang and Ciccini.

[00:29:37] Speaker 01:
Ciccini almost entirely relies on Strang.

[00:29:41] Speaker 01:
So I think... And you think Ciccini survives Barton Wharfer?

[00:29:44] Speaker 01:
I do.

[00:29:45] Speaker 01:
I think that the pathway is from Strang in 1885 to Ciccini to Barton Wharfer.

[00:29:54] Speaker 05:
And I think that... But those concepts have never been applied as to 523A6.

[00:29:58] Speaker 05:
They've always been applied as to 828, right, as to fraud.

[00:30:03] Speaker 01:
Yes, I mean that's the distinction obviously is that Barton Werfer didn't have a chance to deal with 523 a6, but it did Barton Werfer relied on Succini in the Bankruptcy Court and in the Ninth Circuit and Succini is a 523 a6 case So that's sort of where I see Strang surviving with Barton Werfer another point that was made by council was that the state law

[00:30:33] Speaker 01:
that the bankruptcy court determines whether the exception applies, which is correct, but Barton Werfer expressly said that we take the state law in determining the liability, we take it based on the state law.

[00:30:47] Speaker 02:
So the court, the bankruptcy... What does that mean here, though?

[00:30:50] Speaker 02:
That's the problem.

[00:30:51] Speaker 02:
The default judgment doesn't give you whatever state law you impose vicarious liability upon.

[00:31:00] Speaker 01:
Yes, I mean, I think

[00:31:03] Speaker 01:
the judgment literally doesn't provide anything in that regard.

[00:31:07] Speaker 02:
But we're left with the complaint, right?

[00:31:09] Speaker 01:
Well, I think we can look to the complaint, but we can also look to the cause of action.

[00:31:16] Speaker 01:
Well, that's the complaint.

[00:31:17] Speaker 02:
Right.

[00:31:18] Speaker 02:
But the cause of action depends upon the factual allegations within

[00:31:21] Speaker 02:
complaint, and that's there for the child.

[00:31:24] Speaker 02:
Certainly nothing.

[00:31:25] Speaker 02:
So it really is only vicarious liability.

[00:31:26] Speaker 02:
I mean, it's kind of a circle at that point.

[00:31:28] Speaker 02:
Yes.

[00:31:29] Speaker 01:
I mean, I think practically, it's not clear from the record.

[00:31:34] Speaker 01:
It's not in the record necessarily that it was one way or the other.

[00:31:37] Speaker 01:
But practically speaking, it has to be vicarious liability in some regard.

[00:31:41] Speaker 02:
Right, right.

[00:31:42] Speaker 01:
But in terms of a sort of legal technical sense, to establish the cause of action,

[00:31:49] Speaker 01:
You have to meet these elements.

[00:31:51] Speaker 01:
You have to say that the defendant intended to cause bodily harm to the defendant.

[00:31:57] Speaker 01:
Otherwise, the cause of action fails.

[00:31:59] Speaker 02:
So you can't have... Certainly answer the child.

[00:32:02] Speaker 02:
And you're over your time, so I don't want to get too far.

[00:32:05] Speaker 02:
Thank you, Your Honors.

[00:32:06] Speaker 02:
No other questions?

[00:32:08] Speaker 01:
No, we're good.

[00:32:09] Speaker 01:
Thank you very much.

[00:32:09] Speaker 01:
Thank you so much.

[00:32:10] Speaker 04:
Thanks very much.

[00:32:11] Speaker 04:
Thanks for your good arguments.

[00:32:12] Speaker 04:
Under submission, and we'll get your written decision as soon as we can.

[00:32:15] Speaker 04:
Thank you.