Hammer et al v. Van Damme

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 08-47480 TD
Chapter 7
GERALDINE L. VAN DAMME,
Debtor.
___________________________/
HAMMER 1994 TRUST, et al., 	A.P. No. 09-4125 AT
Plaintiffs,
vs.
GERALDINE L. VAN DAMME,
Defendant.
___________________________/
MEMORANDUM OF DECISION
In 	the 	above-captioned 	adversary 	proceeding 	(the 	“Bankruptcy
Court 	Action”), 	Plaintiffs 	Hammer 	1994 	Trust, 	Bill 	C. 	Hammer,
Trustee, and Bill C. Hammer, individually (the “Plaintiffs”) seek a
determination that they are entitled to a nondischargeable judgment
against the defendant Geraldine L. Van Damme (“Geraldine”) pursuant
to 11 U.S.C. § 523(a)(6). 	Geraldine filed a motion for judgment on
the 	pleadings 	pursuant 	to 	Rule 	12(c) 	of 	the 	Federal 	Rules 	of 	Civil
Signed: November 09, 2009
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
November 09, 2009
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
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26 1Rules 12(c) and 56 are made applicable to this proceeding by
Rules 7012 And 7056, respectively, of the Federal Rules of
Bankruptcy Procedure.
2
Procedure. 	The Plaintiffs filed a countermotion for summary judgment
pursuant 	to 	Rule 	56 	Of 	the 	Federal 	Rules 	of 	Civil 	Procedure. 1 	The
motions came before the Court on October 5, 2009. 	Appearances were
stated 	on 	the 	record. 	At 	the 	conclusion 	of 	the 	hearing, 	the 	Court
took 	the 	motions 	under 	submission. 	Having 	now 	duly 	considered 	the
evidence presented and argument made, for the reasons stated below,
the Court concludes that both motions should be denied.
SUMMARY OF FACTS AND PROCEDURAL HISTORY
The 	complaint 	in 	the 	Bankruptcy 	Court 	Action 	(the 	“Bankruptcy
Court 	Complaint”) 	alleges 	that, 	in 	January 	2004, 	Geraldine 	and 	her
husband, 	Armin 	Dirk 	Van 	Damme, 	(“Armin”) 	(collectively 	the 	“Van
Dammes”) 	purchased 	real 	property 	located 	in 	Las 	Vegas, 	Nevada 	(the
“Van Dammes’ Real Property”). It further alleges that the Plaintiffs
have been the owners of real property located in Las Vegas since 1988
(the 	“Plaintiffs’ 	Real 	Property”), 	and 	that 	the 	Plaintiffs’ 	Real
Property is located adjacent to the Van Dammes’ Real Property.
The Bankruptcy Court Complaint further alleges that, in the mid-
1980s, 	the 	developers 	of 	the 	Van 	Dammes’ 	Real 	Property 	erected 	a
stone wall along the common boundary line between the two properties
(the 	“Van 	Damme 	Wall”). 	Thereafter, 	the 	developers 	of 	the
Plaintiffs’ Real Property erected a retaining and privacy wall on the
Plaintiffs’ 	Real 	Property, 	set 	in 	from 	the 	boundary 	line 	by
approximately one foot, leaving a gap between the two walls (the “Gap
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Land”). 	The 	Bankruptcy 	Court 	Complaint 	alleges 	that, 	at 	all 	times
relevant 	to 	State 	Court 	Complaint, 	the 	Gap 	Land 	belonged 	to 	the
Plaintiffs.
The 	Bankruptcy 	Court 	Complaint 	further 	alleges 	that, 	sometime
after April 2004, the Van Dammes trespassed upon the Plaintiffs’ Real
Property 	by 	partially 	tearing 	down 	the 	Van 	Damme 	Wall 	and
constructing 	a 	pool 	grotto, 	in 	part, 	on 	the 	Plaintiffs’ 	Real
Property. 	Upon 	discovering 	the 	trespass, 	on 	June 	22, 	2004, 	the
Plaintiffs advised the Van Dammes of their mistake and requested that
the work cease. 	The Van Dammes refused to comply with this request.
The Plaintiffs then posted a notice ordering the Van Dammes to cease
the 	trespass 	and 	mailed 	a 	copy 	to 	the 	Van 	Dammes. 	The 	Van 	Dammes
removed 	the 	posted 	notice, 	and 	the 	work 	continued. 	Numerous
subsequent 	efforts 	by 	the 	Plaintiffs 	to 	induce 	the 	Van 	Dammes 	to
cease construction on the Gap Land were similarly ignored.
The Bankruptcy Court Complaint further alleges that, on October
1, 	2004, 	the 	Plaintiffs 	filed 	a 	lawsuit 	against 	the 	Van 	Dammes 	in
state 	court 	in 	Nevada 	(the 	“State 	Court 	Action”). 	A 	copy 	of 	the
complaint 	(the 	“State 	Court 	Complaint”) 	filed 	in 	the 	State 	Court
Action is attached as an exhibit to the Bankruptcy Court Complaint.
In 	the 	State 	Court 	Complaint, 	the 	Plaintiffs 	asserted 	claims 	of
Trespass, Quiet title, Slander of Title, and Battery against the Van
Dammes. 	They 	also 	sought 	an 	injunction 	requiring 	them 	to 	cease
construction 	of 	the 	pool 	grotto 	and 	to 	return 	the 	Plaintiffs’ 	Real
Property to its prior condition.
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2Armin filed his own chapter 7 case in this court before the
state court had issued its decision on the amount of damages.
However, the Court granted the Plaintiffs’ motion for relief from
the automatic stay to permit this decision to be effectively
4
In 	response, 	the 	Van 	Dammes 	filed 	a 	counterclaim 	against 	the
Plaintiffs, 	asserting 	claims 	for 	quiet 	title, 	malicious 	use 	of
process, 	and 	trespass 	(the 	“State 	Court 	Counterclaim”). 	The
Plaintiffs 	filed 	two 	motions 	for 	partial 	summary 	judgment, 	one
directed 	at 	the 	quiet 	title 	claim 	and 	the 	other 	directed 	at 	the
malicious abuse of process and trespass claims. 	The Van Dammes did
not oppose the first motion but did oppose the second one.
On 	July 	8, 	2008, 	the 	state 	court 	issued 	two 	orders 	granting
partial summary judgment in favor of the Plaintiffs and against the
Van Dammes. 	The order on the first motion (“PSJ Order One”) resolved
the 	Van 	Dammes’ 	quiet 	title 	claim, 	determining 	that 	the 	Gap 	Land
belonged 	to 	the 	Plaintiffs. 	It 	also 	determined, 	sua 	sponte, 	the
claim 	of 	quiet 	title 	that 	the 	Plaintiffs 	had 	asserted 	in 	the 	State
Court Complaint. 	The second order (“PSJ Order Two”) granted partial
summary judgment in favor of the Plaintiffs on the Van Dammes’ claims
for malicious use of process and for trespass. 	Copies of PSJ Orders
One and Two are attached to the Bankruptcy Court Complaint.
The state court tried the remaining claims over several days in
August and October 2008. 	A final trial date was set for December 22,
2008. 	On December 16, 2008, Geraldine commenced the above-captioned
chapter 7 case. 	As a result, the State Court Action was stayed as to
Geraldine. 	However, 	the 	trial 	continued 	and 	was 	concluded 	as 	to
Armin. 	The state court took the matter of damages under submission. 2
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issued.
3Rule 8 is made applicable to this proceeding by Rule 7008 of
the Federal Rules of Bankruptcy Procedure.
5
The Bankruptcy Court Complaint alleges that Geraldine’s conduct
in creating and continuing to maintain the above-described trespass
on the Plaintiffs’ Real Property was willful and malicious and caused
injury to the Plaintiffs and to the Plaintiffs’ Real Property, giving
rise to a claim that should be excepted from her bankruptcy discharge
pursuant to 11 U.S.C. § 523(a)(6).
DISCUSSION
As recited above, the Van Dammes filed a motion for judgment on
the pleadings. 	The Plaintiffs filed a motion for summary judgment.
The Court will address each motion in turn.
A. 	MOTION FOR JUDGMENT ON THE PLEADINGS
Rule 12(c) of the Federal Rules of Civil Procedure provides that
a 	motion 	for 	judgment 	on 	the 	pleadings 	may 	be 	filed 	after 	the
pleadings are closed but must be filed early enough so as not to delay
trial. 	The legal standard applicable to a motion for judgment on the
pleadings is the same legal standard applicable to a motion to dismiss
for failure to state a claim under Rule 12(b)(6) of the Federal Rules
of Civil Procedure. 	See Hal Roach Studios, Inc. v. Richard Feiner &
Co., Inc., 896 F.2d 1542, 1550 (9 th Cir. 1989).
To survive a motion to dismiss for failure to state a claim, a
complaint must satisfy the notice pleading requirements of Rule 8 of
the Federal Rules of Civil Procedure. 	Holloway v. Best Buy Co., 2009
WL 1533668, #2 (N.D. Cal. May 28, 2009). 3 	Rule 8 requires a claim for
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relief to contain “a short and plain statement of the claim showing
that 	the 	pleader 	is 	entitled 	to 	relief....” 	Fed. 	R. 	Civ. 	Proc. 	8.
As with a motion for summary judgment, “all allegations of fact by the
party 	opposing 	the 	motion...[must 	be] 	accepted 	as 	true,
and...construed in the light most favorable to...[the opposing] party.
Qwest Communs. Corp. v. City of Berkeley, 208 F.R.D. 288, 291 (N.D.
Cal. 2002).
Geraldine contends that the allegations of the Bankruptcy Court
Complaint, 	even 	if 	taken 	as 	true 	and 	construed 	in 	the 	light 	most
favorable to the Plaintiffs, do not satisfy the rigorous standard for
nondischargeability 	under 	11 	U.S.C. 	§ 	523(a)(6) 	as 	established 	by
Kawaauhau v. Geiger, 523 U.S. 57, 64 (1998). 	In Geiger, the Supreme
Court 	held 	that 	“debts 	arising 	from 	recklessly 	or 	negligently
inflicted injuries do not fall within the compass of § 523(a)(6).”
Id. at 64. Moreover, according to Geraldine, the allegations of the
Bankruptcy Court Complaint are not sufficiently specific to state a
claim 	for 	willful 	and 	malicious 	injury 	and 	rather 	are 	simply
conclusory. 	The Court disagrees.
The Court finds the allegations of the Bankruptcy Court Complaint
clearly sufficient to satisfy the Geiger standard. 	While it may have
been negligent or reckless, rather than willful and malicious, for the
Van 	Dammes 	to 	begin 	the 	construction 	of 	the 	pool 	grotto 	on 	the
Plaintiffs’ Real Property, their refusal to cease the construction and
to dismantle it when informed of the true boundary line can certainly
be 	construed 	to 	be 	willful 	and 	malicious. 	The 	injury 	to 	the
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Plaintiffs and to the Plaintiffs’ Real Property as a result of the Van
Dammes’ conduct is self-evident.
Geraldine also contends that the allegations of the Bankruptcy
Court 	Complaint 	are 	insufficient 	to 	state 	a 	claim 	against 	her 	as
opposed to a claim against Armin. 	She asserts that it is clear from
the 	PSJ 	Orders 	One 	and 	Two 	that 	Armin 	was 	the 	person 	who 	built 	the
wall. 	She notes that the Bankruptcy Court Complaint blames everything
on 	“the 	Van 	Dammes” 	as 	a 	unit, 	containing 	no 	individualized
allegations of misconduct by Geraldine. 	She contends that Nevada law
does not permit Armin’s misconduct to be imputed to her.
This 	argument 	also 	fails. 	In 	referring 	to 	the 	Van 	Dammes
collectively, 	the 	allegations 	of 	the 	Bankruptcy 	Court 	Complaint
necessarily 	target 	Geraldine 	as 	well 	as 	Armin. 	Although 	Armin 	may
have performed the physical acts of construction--an evidentiary fact
that 	has 	yet 	to 	be 	established 	here–-the 	Van 	Dammes 	may 	still 	have
acted 	in 	concert 	in 	refusing 	to 	remove 	the 	construction 	when 	they
learned of the boundary line mistake. 	Thus, Geraldine may be liable
independently of Armin. 	Construed in the light most favorable to the
Plaintiffs, the allegations state a sufficient claim that she acted
in 	concert 	with 	Armin 	with 	respect 	to 	the 	refusal 	to 	remove 	the
construction.
Finally, Geraldine argues that, in considering the motion, the
Court should disregard the exhibits to the Bankruptcy Court Complaint.
Normally, a motion for judgment on the pleadings is based solely on
the allegations of the complaint and answer. 	If extrinsic evidence
is 	considered, 	the 	motion 	is 	transmuted 	into 	a 	motion 	for 	summary
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judgment. 	See 	Fed. 	R. 	Civ. 	Proc. 	12(d). 	However, 	a 	court 	may
consider exhibits to a complaint consisting of state court pleadings,
of which the court may take judicial notice, without transmuting the
motion into one for summary judgment. 	See In re Soto, 221 B.R. 343,
347 (Bankr. E.D. Pa. 1998).
Geraldine does not necessary challenge this principle. 	Instead,
she argues that the Court should disregard the state court pleadings
as a sanction for Plaintiffs’ violation of the automatic stay. 	She
contends 	that 	Geraldine’s 	filing 	of 	her 	bankruptcy 	petition
effectively stayed the State Court Action as to Armin as well as her.
In support of this argument, she cites Norwest Financial v. Lawver,
109 Nev. 242 (1993), In re Kimmel, 367 B.R. 174, 182 (Bankr. N.D. Cal.
2007), affirmed, 378 B.R. 630, 635-36 (Bankr. 9 th Cir. 2007), and In
re Watson, 192 B.R. 238, 241 (Bankr. D. Nev. 1996).
None of the cases cited is apposite. 	Norwest and Kimmel address
the attempt of a creditor holding a claim against a married couple,
which 	claim 	was 	discharged 	in 	the 	bankruptcy 	case 	of 	one 	of 	the
spouses, 	to 	collect 	the 	discharged 	debt 	from 	the 	after-acquired
community 	property 	of 	the 	nonfiling 	spouse: 	e.g., 	the 	nonfiling
spouse’s wages. 	See 11 U.S.C. § 524(a)(3). 	They reiterate the well
established 	principle 	that 	the 	discharge 	of 	the 	claim 	in 	the
bankruptcy 	case 	of 	a 	single 	spouse 	enjoins 	its 	collection 	from 	the
after-acquired community property of both spouses. 	The Watson court
merely 	makes 	a 	passing 	reference 	to 	11 	U.S.C. 	§ 	524(a)(3). 	See
Watson, 192 B.R. at 241.
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The 	facts 	here 	are 	entirely 	distinguishable. 	The 	Plaintiffs’
claim 	against 	Geraldine 	has 	not 	yet 	been 	discharged 	and, 	if 	this
proceeding 	is 	successful, 	will 	not 	be. 	Clearly, 	the 	filing 	of 	a
bankruptcy petition by Geraldine does not give rise to an automatic
stay 	enjoining 	actions 	against 	Armin. 	It 	does 	give 	rise 	to 	an
automatic stay protecting Armin’s share of the community property as
well 	as 	Geraldine’s. 	All 	of 	the 	community 	property 	constitutes
property of Geraldine’s bankruptcy estate. 	See 11 U.S.C. § 541(a)(2).
However, 	by 	proceeding 	with 	trial 	of 	the 	State 	Court 	Action 	as 	to
Armin only, the Plaintiffs were not attempting to collect their debt
from community property, simply to establish their claim. 	Thus, the
holdings of the cases cited have no bearing on the issues presented
here.
In sum, Geraldine has failed to present a persuasive argument to
support her motion for judgment on the pleadings, and her motion will
be denied.
B. 	MOTION FOR SUMMARY JUDGMENT
As 	recited 	above, 	the 	Plaintiffs 	filed 	a 	countermotion 	to
Geraldine’s 	motion 	for 	judgment 	on 	the 	pleadings, 	seeking 	summary
judgment on their claim for willful and malicious injury pursuant to
11 U.S.C. § 523(a)(6). 	Summary judgment is proper when the undisputed
evidence before the Court establishes that there is “no genuine issue
as to any material fact and that the movant is entitled to judgment
as a matter of law.” 	See Fed. R. Civ. Proc. 56, made applicable to
this proceeding by Fed. R. Bankr. Proc 7056.
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4Geraldine initially opposed the Court taking judicial notice
of the PSJ Orders One and Two on the ground that they were not
authenticated. 	However, when asked at the hearing whether she
challenged their authenticity, she admitted that she did not and
simply contended that they did not have a collateral estoppel
effect on the issues presented in the adversary proceeding.
10
The 	Plaintiffs 	base 	their 	countermotion 	on 	the 	doctrine 	of
collateral estoppel. 	They contend that the state court’s rulings in
PSJ Orders One and Two establish that Geraldine’s conduct was willful
and malicious injury as a matter of law. 4 	They note that the Supreme
Court 	has 	held 	that 	the 	doctrine 	of 	collateral 	estoppel 	applies 	to
dischargeability actions. 	See Grogan v. Garner, 498 U.S. 279 (1991).
In 	determining 	whether 	a 	state 	court 	ruling 	establishes 	a
nondischargeability 	claim 	as 	a 	matter 	of 	collateral 	estoppel, 	the
bankruptcy court must give the state court ruling the same preclusive
effect it would be given by the state court. 	Under Nevada law, three
questions must be answered in determining whether a ruling in a prior
case collaterally estops litigation of the issue in a subsequent case:
“Was the issue decided in the prior adjudication identical with the
one presented in the action in question? Was there a final judgment
on 	the 	merits? 	Was 	the 	party 	against 	whom 	the 	plea 	is 	asserted 	a
party or in privity with a party to the prior adjudication?” 	Paradise
Palms 	Community 	Assoc. 	v. 	Paradise 	Homes, 	505 	P.2d 	596, 	599 	(Nev.
1973). 	In 	addition, 	the 	issue 	decided 	must 	have 	been 	“actually
litigated” and “necessarily determined” in the prior action. 	Marine
Midland Bank v. Monroe, 756 P.2d 1193, 1194 (Nev. 1988). 	I f 	t h e
issue 	was 	“actually 	litigated” 	and 	“necessarily 	determined” 	in 	the
prior 	action, 	it 	is 	conclusive 	in 	the 	subsequent 	suit, 	even 	if 	the
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5For this reason, the Court finds without merit and disposes
of summarily Geraldine’s contention that the PSJ Orders One and Two
cannot be used for collateral estoppel purposes in this proceeding
because they disposed of the Van Dammes’ claims against the
Plaintiffs’ not the Plaintiffs’ claims against the Van Dammes.
11
subsequent suit is based on a different legal theory. 	In re Silva,
190 B.R. 889, 892 (Bankr. 9th Cir. 1995). 5
There 	is 	no 	dispute 	that 	the 	parties 	to 	the 	above-captioned
adversary 	proceeding 	were 	also 	parties 	to 	the 	State 	Court 	Action.
However, Geraldine contends that the PSJ Orders One and Two cannot be
used for collateral estoppel purposes because they do not represent
final judgments. 	Second, she contends that the issues presented in
this adversary proceeding were not “adjudicated” in the State Court
Action. 	The Court will address each argument in turn.
1. 	Is an Order Granting Partial Summary Judgment Sufficiently
Final To Be Used For Collateral Estoppel Purposes?
As noted above, one of the requirements for collateral estoppel
is 	that 	the 	judgment 	rendered 	in 	the 	prior 	proceeding 	is 	final.
Geraldine asserts that an order granting partial summary judgment, by
definition, is not final. 	In support of this contention, she offers
the 	following 	quotation 	from 	Lee 	v. 	GNLV 	Corp., 	116 	Nev. 	424, 	426
(2000): 	“[A] 	final 	judgment 	is 	one 	that 	disposes 	of 	all 	the 	issues
presented in the case, and leaves nothing for the future consideration
of the court, except for post-judgment issues such as attorney’s fees
and costs.” 	She notes that an appeal could not be taken from such an
order. 	Therefore, according to Geraldine, the Plaintiffs may not rely
on 	PSJ 	Orders 	One 	and 	Two 	to 	establish 	a 	nondischargeable 	claim
against her under 11 U.S.C. § 523(a)(6).
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6In response to this citation, after the hearing, the
Plaintiffs asked the Court to consider Allyn v. McDonald, 117 Nev.
907 (2001) and Lee v. GNLV Corp., 117 Nev. 291 (2001), the
appellate decision on the merits of the case cited by Geraldine.
They do not explain why they view these decisions as significant to
the issues presented here. 	The Court has reviewed them and does
not find them helpful.
7Neither party has presented the Court with a relevant Nevada
authority on this issue, and the Court has been unable to find any
independently. 	In the absence of such authority, the Court
predicts that the Nevada Supreme Court would follow the
Restatement.
12
Lee 	is 	inapposite. 	The 	finality 	of 	an 	order 	for 	collateral
estoppel 	purposes 	was 	not 	at 	issue 	in 	that 	case. 	It 	addressed 	the
issue 	of 	finality 	for 	purposes 	of 	appeal. 	In 	Lee, 	an 	unsuccessful
plaintiff had filed a notice of appeal from an order granting summary
judgment to the defendant but failed to file a notice of appeal from
the judgment itself. 	The appellee moved to dismiss the appeal on the
ground that the summary judgment order was not sufficiently final to
be appealable. 	The Nevada Supreme Court denied the motion, based on
the definition of finality contained in the Nevada Rules of Appellate
Procedure. 6
Finality has a different meaning in an appellate context than for
purposes of collateral estoppel. 	In the latter context, an order is
sufficiently final to be used for collateral estoppel purposes when
a 	“firm 	determination” 	of 	the 	issue 	has 	been 	made. 	See 	Luben
Industries, 	Inc. 	v. 	United 	States, 	707 	F.2d 	1037, 	1040 	(9th 	Cir.
1983), 	citing 	Restatement 	(Second) 	of 	Judgments 	§ 	13 	(1982). 7
Moreover, 	while 	the 	PSJ 	Orders 	One 	and 	Two 	are 	each 	partial, 	taken
together, 	they 	are 	final. 	Between 	them, 	they 	dispose 	of 	all 	of 	the
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claims 	asserted 	in 	the 	State 	Court 	Counterclaim. 	While 	a 	summary
judgment order disposing of all the claims in a counterclaim may not
be appealed absent a certification by the court that there is no just
reason for delay, see Century Inv. Corp. v. United States, 277 F.2d
247, 250 (9th Cir. 1960), the Court concludes that such an order is
sufficiently “firm” to be used for collateral estoppel purposes.
2. 	Were 	Issues 	Critical 	to 	11 	U.S.C. 	§ 	523(a)(6) 	Claim
“Adjudicated” in the State Court Action?
The second issue presented is whether the willful and malicious
nature 	of 	Geraldine’s 	conduct 	was 	“adjudicated” 	in 	the 	State 	Court
Action. 	A claim for willful and malicious injury under 11 U.S.C. §
523(a)(6) contains three elements: (1) whether the actions taken were
willful, (2) whether the actions taken were malicious, and (3) whether
the actions resulted in injury to an entity other than the debtor or
to 	property 	of 	the 	entity. 	11 	U.S.C. 	§ 	523(a)(6). 	The 	Plaintiffs
seek 	to 	use 	the 	doctrine 	of 	collateral 	estoppel 	to 	obtain 	a
determination 	on 	all 	three 	elements. 	They 	do 	not 	seek 	to 	use 	this
doctrine 	to 	establish 	the 	amount 	of 	any 	recoverable 	damages, 	there
having been no determination by the state court on this issue as to
Geraldine when her bankruptcy case was filed.
There 	are 	two 	parts 	to 	the 	question 	of 	whether 	these 	elements
were “adjudicated” in the State Court Action: (1) whether the issues
were “actually litigated” and (2) whether the issues were “necessarily
determined.”
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a. 	Actually Litigated
PSJ 	Order 	Two, 	which 	dismisses 	the 	Van 	Dammes’ 	claims 	for
trespass and malicious abuse of process, contains no determinations
which would entitle the Plaintiffs to a nondischargeable claim against
Geraldine 	on 	the 	basis 	of 	collateral 	estoppel. 	The 	Order 	simply
dismisses 	the 	claims 	based 	on 	the 	Van 	Dammes’ 	failure 	to 	offer 	any
evidence 	to 	support 	the 	necessary 	elements 	of 	the 	claim. 	The
Plaintiffs 	presumably 	rely 	on 	PSJ 	Order 	One, 	dismissing 	the 	Van
Dammes’ 	quiet 	title 	claim 	and 	granting 	the 	Plaintiffs’ 	quiet 	title
claim sua sponte. 	As noted by the Plaintiffs, in PSJ Order One, the
state court found as follows:
The 	Van 	Dammes 	willfully, 	intentionally 	and
deliberately 	encroached 	upon 	the 	Trust 	Property
by 	partially 	tearing 	down 	a 	wall 	on 	Van 	Damme
property. 	Further, 	the 	Van 	Dammes 	willfully,
intentionally and deliberately utilized portions
of 	the 	demolished 	wall, 	along 	with 	remaining
portions 	of 	their 	west 	slumpstone 	wall, 	to
support 	a 	concrete, 	fiberglass, 	and 	concrete
structure....The 	Van 	Dammes 	further 	trespassed
onto 	the 	Hammer 	Trust 	Property 	by 	anchoring 	the
pool 	features, 	and 	affixing 	the 	Grotto 	into 	the
east wall of the Trust Property. 	Each of these
actions 	by 	The 	Van 	Dammes 	was 	done 	willfully,
intentionally 	and 	deliberately 	without 	consent
from 	the 	Trust 	and 	in 	disregard 	of 	warnings 	to
cease such action as next described.
PSJ Order One, p. 4, ll. 11-15, 23-28.
The 	court 	holds 	that 	each 	of 	the 	Van 	Dammes’
above-found actions were malicious because those
actions were without any just cause or excuse and
were 	substantially 	certain 	to 	cause 	harm 	to 	the
Trust Property and to cause emotional distress to
the members of the Trust....
PSJ Order One, p. 5, 7-10.
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This 	willful, 	intentional 	and 	deliberate
misconduct of the Van Dammes caused the title of
the 	Trust 	property 	to 	become 	uninsurable 	for
title 	insurance 	as 	a 	“clear 	title” 	due 	to 	the
encroachment; 	it 	caused 	a 	cloud 	on 	the 	title
which completely restricted its ready conveyance
to an arm’s length buyer; and it caused an [sic]
cloud on title which also destroyed its value as
security for a loan.
PSJ Order One, p. 20, ll. 11-16.
The Van Dammes’ failure to file an opposition to the Plaintiffs’
motion for summary judgment on this claim does not prevent PSJ Order
One 	from 	being 	used 	for 	collateral 	estoppel 	purposes. 	They 	were
otherwise active litigants in the State Court Action. 	Moreover, even
a default judgment may be used for collateral estoppel purposes. 	See
In re Nourbakhsh, 67 F.3d 798 (9th Cir. 1995)(default judgment could
be used for collateral estoppel purposes); In re Daily, 47 F.3d 365,
368 (9th Cir. 1995). 	Although Nourbakhsh was decided under Florida
law and Daily under federal law, bankruptcy courts in the 9th Circuit
have followed their holdings under the laws of their own states. 	See,
e.g., 	In 	re 	Younie, 	211 	B.R. 	367 	(Bankr. 	9th 	Cir. 	1997)(California
law); 	In 	re 	Jung 	Sup 	Lee, 	335 	B.R. 	130 	(Bankr. 	9th 	Cir.
2005)(Washington 	law); 	In 	re 	Goddard, 	2009 	WL 	1636387, 	*8
(2009)(Arizona 	law). 	The 	Court 	predicts 	that 	Nevada 	would 	follow
these holdings as well.
In 	sum, 	the 	Court 	concludes 	that 	the 	issues 	of 	wilfullness,
malice, 	and 	resulting 	injury 	to 	an 	entity 	other 	than 	the 	debtor 	or
that entity’s property were actually litigated and determined in the
State 	Court 	Action. 	See 	In 	re 	Zelis, 	66 	F.3d 	205, 	208 	(9th 	Cir.
1995).
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8Again, in the absence of authority to the contrary, the Court
will predict that the Nevada Supreme Court would follow California
law in this respect.
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b. 	Necessarily Decided
The 	second 	half 	of 	the 	“adjudication” 	test 	requires 	that 	the
issues 	actually 	litigated 	and 	determined 	in 	the 	prior 	action 	be
necessarily determined in rendering judgment on the claim or claims
in question. 	See Segal v. American Tele. & Tele. Co., 606 F.2d 842,
845 (9th Cir. 1979)(per curiam); Restatement (Second) of Judgments §
27 	cmt. 	j 	(1980). 	As 	noted 	above, 	the 	findings 	giving 	rise 	to 	the
state court’s determination that the Van Dammes acted willfully and
maliciously were contained solely in PSJ One. 	The only claim ruled
upon in PSJ One was the quiet title claim.
An action to quiet title is brought to establish a party’s title
to 	real 	property 	against 	an 	adverse 	claimant. 	To 	obtain 	such 	a
ruling, 	under 	California 	law, 8 	the 	following 	elements 	must 	be
established: 	“(1) 	a 	description 	of 	the 	real 	property 	that 	is 	the
subject of the action, (2) the title of the plaintiff as to which a
determination...is sought and the basis of the title, (3) the adverse
claims to the title of the plaintiff against which a determination is
sought, (4) the date as of which the determination is sought, and (5)
a prayer for the determination of the title of the plaintiff against
the adverse claims.” 	Madrid v. J.P. Morgan Chase Bank, N.A., 2009
WL 3255880, *5 (E.D. Cal.).
The 	state 	of 	mind 	or 	motive 	of 	the 	party 	making 	the 	adverse
assertion of title to the real property is clearly irrelevant to the
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determination 	of 	a 	quiet 	title 	claim. 	Thus, 	the 	state 	court’s
findings 	and 	holdings 	with 	respect 	to 	the 	Van 	Dammes’ 	willful 	and
malicious conduct were not “necessarily determined” in connection with
the quiet title claim and thus may not be used for collateral estoppel
purposes in the Bankruptcy Court Action.
CONCLUSION
Geraldine’s motion for judgment on the pleadings will be denied.
The Plaintiffs’ motion for summary judgment will also be denied.
The allegations of the Bankruptcy Court Complaint are sufficient
to state a claim under 11 U.S.C.§ 523(a)(6). 	By referring to certain
actions performed by the Van Dammes, the allegations were necessarily
directed 	against 	Geraldine 	as 	well 	as 	Armin. 	They 	did 	not 	have 	to
separately 	state 	their 	allegations 	against 	Geraldine 	and 	Armin.
Finally, 	the 	PSJ 	Orders 	One 	and 	Two 	will 	not 	be 	disregarded 	as 	a
sanction for the Plaintiffs’ violation of the automatic stay. 	There
was no such violation. 	In any event, the Court has not relied on the
findings and conclusions in the PSJ Orders One and Two in ruling on
this 	motion. 	Counsel 	for 	the 	Plaintiffs 	is 	directed 	to 	submit 	a
proposed form of order in accordance with this decision.
The 	motion 	for 	summary 	judgment 	will 	also 	be 	denied. 	The 	PSJ
Orders 	One 	and 	Two 	contain 	findings 	and 	conclusions 	that 	are
sufficiently “firm” to be used for collateral estoppel purposes. 	The
elements of a claim under 11 U.S.C. § 523(a)(6)--willfulness, malice,
and 	injury 	to 	person 	or 	property-–were 	“actually 	litigated” 	in 	the
State Court Action. 	However, they were not “necessarily determined”
in the context of a determination of a quiet title claim. 	Counsel for
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Geraldine 	is 	directed 	to 	submit 	a 	proposed 	form 	of 	judgment 	in
accordance with this decision.
END OF DOCUMENT
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COURT SERVICE LIST
Mariam S. Marshall
Law Offices of Marshall and Ramos
350 Frank H. Ogawa Plaza #600
Oakland, CA 94612
Christina Ann.Marie DiEdoardo
Law Office of Christina DiEdoardo
201 Spear Street #1100
San Francisco, CA 94105
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