McGrath v. Narvaez et al

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United States Bankruptcy Court
Northern District of California
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
OAKLAND DIVISION
In re: 	Case Number: 09-71902WJL
Eduardo Laparan Narvaez and Zenaida
Alcantara Narvaez,
Debtor(s).
Chapter: 7
Kathy McGrath,
Plaintiff(s),
A.P. No. 10-4040
Eduardo Laparan Narvaez and Zenaida
Alcantara Narvaez,
Defendant(s).
MEMORANDUM DECISION REGARDING ACTION TO DETERMINE NON-
DISCHARGEABILITY OF DEBT (11 U.S.C. §523(a)(6))
Plaintiff Kathy McGrath (“Plaintiff” or “McGrath”) brought an action under Section
523(a)(6) of the United States Bankruptcy Code against Defendants (and Chapter 7 debtors) Zenaida
and Eduardo Narvaez (“Defendants” or “Narvaezs”) seeking a determination that certain alleged
damage to a house Plaintiff rented to Defendants is non-dischargeable, as resulting from willful and
malicious injury to Plaintiff’s property. The matter came on for trial on June 13, 2011. Plaintiff
appeared pro se. Defendants did not appear. For the reasons set forth below, the Court determines
The following constitutes the
Memorandum Decision of the Court.
Signed July 07, 2011
________________________________________
William J. Lafferty, III
U.S. Bankruptcy Judge	________________________________________
Entered on Docket
July 07, 2011
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 10-04040 Doc# 22 Filed: 07/07/11 Entered: 07/07/11 12:00:53 Page 1 of 8

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that $2,770 of the damages asserted by Plaintiff are non-dischargeable pursuant to the provisions of
Section 523(a)(6).
FACTS
In October 2008, the Narvaezs rented a house located at 2900 Minert Road, Concord,
California (the “Property”) from Plaintiff. The parties executed a written lease providing for a one
year term, beginning on October 18, 2008 and terminating on October 17, 2009, a monthly rent of
$2,305, and a security deposit in the amount of $2,300. The lease also contained numerous
covenants concerning Narvaezs’ obligation to maintain the Property. For a number of reasons,
McGrath and Narvaezs agreed to an early termination of the lease, effective as of April 30, 2009.
At trial, George Grockett, Plaintiff’s contractor, testified that he visited the Property in
November 2008, shortly after Defendants moved in, to respond to complaints from the Defendants
concerning the operation of the hot-water heater and the clothes dryer. While on the premises, Mr.
Grokett noticed that someone had removed the “popcorn” texture of the ceiling surface from every
room in the house except for the master bedroom. 	Mr. Grokett testified that based on his experience
as a contractor he believed that it was likely that someone had first “steamed” and then scraped the
ceiling surface to achieve this result. Mr. Grokett also noticed that a built-in bookcase, which
apparently “connected” the area between two rooms in the house, had been removed, presumably to
facilitate easier access to the affected rooms.
Mr. Grokett further testified that he and Plaintiff jointly inspected the Property on March 12,
2009, in connection with further complaints by the Defendants about the conditions there. During
that inspection, Grokett and Plaintiff again noted that the popcorn surface of the ceilings had been
removed, that the built-in bookcase was missing, and also that excessive amounts of water collected
on the surface of the wooden Vanity in the bathroom, which appeared to be causing the top surface
and the drawers of the Vanity to warp. Plaintiff communicated her concerns about this condition to
Defendants in a letter, and urged them to prevent further damage to the Vanity by simply mopping
up excess water from the Vanity surface and drawers after use of the shower. Plaintiff’s Trial
Case: 10-04040 Doc# 22 Filed: 07/07/11 Entered: 07/07/11 12:00:53 Page 2 of 8

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Exhibit No. 5. When Grokett came out to the Property on March 26, 2009 for a follow-up
inspection, he found that the condition of the Vanity had worsened materially. Plaintiff’s Trial
Exhibit No. 6.
At around the time of the March 26 follow-up inspection, Defendants indicated their desire
to terminate the lease early and vacate the Property. Plaintiff and Defendants reached an agreement
concerning early termination of the Lease, effective as of April 30, 2009. After the Defendants
vacated the Property in April 2009, Grokett and Plaintiff conducted a more thorough inspection, and
noted damages or necessary clean-up and repairs, and communicated these findings to Defendants in
a letter dated April 25, 2009. Plaintiff’s Trial Exhibit No. 10.
Plaintiff summarized for the Court the repairs she caused to be made to the Property, and her
other alleged damages, as follows:
Rebuilding Vanity 	$120
Repairing Stripped Ceilings 	$2,300
Repairing Tile Damage 	$140
Cleaning and Repairing Stove, Hood, Dishwasher 	$180
Repainting Room 	$175
Repairing Damaged Doors and Walls 	$75
Steam Cleaning Carpets 	$345
Landscaping, Weeding and Mowing 	$225
Dismantling Abandoned Structure 	$145
Hauling Rubbish 	$61
Painting and Patching Walls 	$100
Case: 10-04040 Doc# 22 Filed: 07/07/11 Entered: 07/07/11 12:00:53 Page 3 of 8

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Miscellaneous Supplies 	$521
Checking Mildew 	$225
Repairing Sprinkler System 	$65
Missing Built-in Bookshelf 	$350
Serving Papers 	$300
Unpaid Rent 	$2,035
Unpaid Garbage Bill 	$140
Late Fees 	$160
Witness Fees 	$250
Process Server Fees 	$300
Legal Consultation Fees 	$150
Total: 	$8,363
Subtracting the security deposit, which Plaintiff testified that she applied to her expenses
prior to the commencement of Defendants’ bankruptcy case, the “balance due” was $6,063.
The Narvaezs filed their Chapter 7 petition on December 11, 2009, and on February 12,
2010, Plaintiff filed this adversary proceeding requesting the Court to find all of the above-cited
damages non-dischargeable under Bankruptcy Code section 523(a)(6).
DISCUSSION
Section 523(a)(6) of the Code excepts from discharge any debt “for willful and malicious
injury to another entity or to the property of another entity.”
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In order for an injury to be “malicious” it must result from (1) a wrongful act, (2) done
intentionally, (3) which necessarily causes injury, and (4) is done without just cause or excuse.
Ormsby v. First Am. Title Co. (In re Ormsby), 591 F.3d 1199, 1207 (9th Cir. 2010). In order for an
injury to be “willful”, the Court must determine that the defendant intended not only to do the act
from which the harm results, but also to injure the plaintiff. Kawaauhau v. Geiger, 523 U.S. 57, 61-
62 (1998). Controlling Ninth Circuit authority states that the court needs to apply a “subjective” test
in determining whether a defendant actually intended to harm the plaintiff, but that such test is
satisfied where the debtor had “actual knowledge that harm to the creditor was substantially certain”.
Carillo v. Su (In re Su), 290 F.3d 1140, 1145-46 (9th Cir. 2002).
In applying these standards to the case of a landlord injured by a tenant’s harm to leased
premises, courts have required something more than an injury to property resulting from a breach of
a lease covenant, such as an obligation to maintain premises in good condition, or even injury to
property that arises from a tenant’s apparent neglect of potentially harmful conditions. Lilledahl v.
Kibbee (In re Kibbee), 287 B.R. 239, 244 (Bankr. E.D. Mo. 2002). On the other hand, where
damage occurs from the affirmative, wrongful and otherwise unexcused act of a tenant, and it is at
least substantially certain that harm to the property will result, courts have typically found that the
injuries were willful and malicious in the sense required by Section 523(a)(6), and have determined
such damages to be non-dischargeable. First Republic Bank v. Christian Mirner (In re Mirner), No.
10-4009 AT, 2010 Bankr. LEXIS 2120, at *10-11 (Bankr. N.D. Cal. 2010), aff’d on other grounds,
BAP No. NC-10-1289-HBaJu, 2011 Bankr. LEXIS 2068 (B.A.P. 9th Cir. 2011). And, in at least
some instances, courts have found liability under Section 523(a)(6) where tenants have failed to act
to prevent damage that was clearly foreseeable and easily preventable, particularly where the bulk of
the damage occurred after the relationship between the landlord and tenant had “worsened.”
O’Brien v. Sintobin (In re Sintobin), 253 B.R. 826 (Bankr. N.D. Ohio 2000).
Applying those standards to this case, the Court concludes that most of the damages
requested do not fit within the requirements of Section 523(a)(6). Some of these items do not result
from any damage to the Property itself (e.g., unpaid rent, late fees, unpaid garbage bills, legal
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consultation, witness and process server fees), and some result from matters that appear to fall
within the typical clean-up and repair expenses that normally arise in landlord-tenant relations
(repainting room, repairing damaged doors and walls, steam-cleaning carpets, cleaning and repairing
stove, hood and dishwasher, painting and patching walls, checking mildew, repairing sprinklers,
landscaping, weeding and mowing, hauling rubbish, repairing tile damage, dismantling an
abandoned structure, and miscellaneous supplies). That is not to say that such expenses do not arise
from breaches of a lease, or can not be claimed as damages by a landlord, or be partially satisfied by
an offset against a security deposit that the landlord held against potential cleanup and repair
expenses, as McGrath did here prior to the commencement of this case. But the law requires more
to determine that debts are non-dischargeable.
However, the Court does conclude that three items of damages, the damage to the surface of
the ceilings and the ceiling sheetrock, the damage to the built-in bookshelf and the damage to the
bathroom Vanity all do come within the provisions of Section 523(a)(6) and are non-dischargeable.
The first two items, damage to the ceiling and damage to the built-in bookshelf, clearly result from
the wrongful and unexcused actions of the Defendants. With respect to the ceilings, Grokett
testified that in order to remove the “popcorn” texture to the ceilings, someone would have had first
to apply steam to the ceiling areas, and then scrape the surface of the ceilings in every room affected.
With respect to the bookshelf, the same witness testified that the bookshelf had been removed in a
manner that made its reinstallation impossible–worse, rather than having carefully stored the
bookshelf in a covered area so that some other use might have been made of it, it had been left
outside in the backyard, perhaps for months, and was entirely useless when discovered there after
the Defendants had moved out. In both of these instances, the actions of the Defendants were clearly
purposeful, wrongful, without excuse, and substantially certain to cause harm to McGrath’s
property.
Although the damage to the bathroom Vanity is arguably a closer call, because it resulted
more from neglect of a potentially harmful condition (water build-up on the wood surface of the
Vanity after use of the shower) than an affirmative bad act, the uncontradicted testimony is that the
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contractor observed the dangerous condition in mid-March 2009, and Defendants were clearly
warned that failure to take extremely simple remedial steps (wiping up excess water) would
inevitably lead to damage to the wood surface of the Vanity. That sort of neglect of a simple task,
after an explicit warning by the landlord, and after the landlord-tenant relationship had begun to
sour, makes this damage wrongful, unexcused and substantially certain to occur, and therefore non-
dischargeable as well.
For all of the foregoing reasons, the Court will enter Judgment for the Plaintiff in the amount
of $2,770, which the court determines to be non-dischargeable under Section 523(a)(6) of the Code.
Case: 10-04040 Doc# 22 Filed: 07/07/11 Entered: 07/07/11 12:00:53 Page 7 of 8

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COURT SERVICE LIST
Zenaida Alcantara Narvaez
Eduardo Laparan Narvaez
2306 Woodhill Drive
Pittsburg, CA 94565
Kathy McGrath
230 Keats Cir
Pleasant Hill, CA 94523
Office of the U.S. Trustee
1301 Clay St. #690N
Oakland, CA 94612
Case: 10-04040 Doc# 22 Filed: 07/07/11 Entered: 07/07/11 12:00:53 Page 8 of 8