FILED MAY 2 2025 ORDERED PUBLISHED SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: BAP No. CC-24-1163-SGL LEO DEL ROSARIO and ZERLYN FONCECA DEL ROSARIO, Bk. No. 1:24-bk-10221-VK Debtors. Adv. No. 1:24-ap-01018-VK M.O., Appellant, v. OPINION LEO DEL ROSARIO; ZERLYN FONCECA DEL ROSARIO, Appellees.

Appeal from the United States Bankruptcy Court for the Central District of California Victoria S. Kaufman, Bankruptcy Judge, Presiding

APPEARANCES Sebastian M. Medvei of Medvei Law Group, APC argued for appellant; Craig Gerald Margulies of Margulies Faith LLP argued for appellees.

Before: SPRAKER, GAN, and LAFFERTY, Bankruptcy Judges.

SPRAKER, Bankruptcy Judge:

INTRODUCTION

Plaintiff and appellant M.O., a minor, appeals from an order dismissing his nondischargeability complaint against chapter 7 1 debtors

Leo Del Rosario and Zerlyn Fonceca Del Rosario. The complaint alleged a

single claim for nondischargeability under § 523(a)(6). The bankruptcy

court dismissed the complaint under Civil Rule 12(b)(6) without leave to

amend.

The sole issue on appeal is purely legal and concerns the proper

scope of the exception to discharge set forth in § 523(a)(6). More

specifically, appellant asks us to hold that debtors’ vicarious liability under

California law for the intentional tort of their minor son qualifies as a

nondischargeable debt for a willful and malicious injury “by the debtor[s]”

under § 523(a)(6).

The bankruptcy court held that § 523(a)(6) requires the debtors

themselves to commit the tortious conduct from which the debt arose.

Section 523(a)(6) also requires that the debtors acted both willfully and

maliciously as those terms are defined for purposes of § 523(a)(6). The

appellant’s complaint alleged that the underlying judgment debt arose not

from debtors’ actions but from vicarious liability imposed for the actions of

their child. The court concluded that appellant failed to allege, and could

not allege, that debtors committed the requisite tortious conduct with the

1 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of Civil Procedure.

2 requisite culpable state of mind.

We agree with the bankruptcy court’s analysis. Accordingly, we

AFFIRM the bankruptcy court’s Civil Rule 12(b)(6) dismissal of appellant’s

complaint without leave to amend.

FACTS

A The state court litigation.

In his prepetition state court action, appellant alleged that at the time

of the incidents giving rise to his claims, he was a 13-year-old student

attending class. 2 According to appellant, when he got up from his seat to

turn in his homework to his teacher, another student, referred to as “DOE

1,” positioned a pen on the seat of his chair such that he sat on the pen

when he returned to his desk and suffered bodily injury and severe

emotional distress as a result.

Appellant sued the defendant child, his parents, and others in the Los

Angeles County Superior Court, in relevant part, for battery and

intentional infliction of emotional distress. The state court complaint

contained no allegations suggesting that debtors were directly involved in

their son’s misconduct. In fact, the state court complaint was silent

regarding the basis for debtors’ liability for their son’s actions, except

perhaps for paragraph 8, which indicated that each of the defendants was

2 The underlying factual allegations are set forth in appellant’s state court complaint, which he attached as an exhibit and incorporated by reference into the operative complaint filed in his subsequent nondischargeability action. 3 liable for every other defendant’s conduct based on a principal-agent

theory of vicarious liability.

Appellant later obtained terminating sanctions against debtors for

their failure to cooperate in discovery. The state court then entered a

default judgment in the amount of $1,045,609.46 against debtors. Again, the

form default judgment was silent as to the basis of debtors’ liability.

B. The adversary proceeding and the motion to dismiss.

Debtors commenced their chapter 7 bankruptcy in February 2024.

They listed appellant as a judgment creditor in the amount of $1,045,609.46.

In May 2024, appellant filed a complaint to except this judgment debt from

discharge under § 523(a)(6). Appellant amended his nondischargeability

complaint in August 2024 (“FAC”). Whereas the state court complaint had

been virtually silent regarding the basis for debtors’ liability for their son’s

misconduct, appellant alleged in the FAC that debtors’ liability was “based

on [debtors’] vicarious liability for the willful and malicious conduct of

[debtors’] minor son.”

In August 2024, debtors moved to dismiss the FAC without leave to

amend. Debtors pointed to appellant’s allegation that the state court

judgment entered against them was founded on their vicarious liability for

their son’s misconduct. They asserted that § 523(a)(6) did not apply because

appellant failed to allege that debtors themselves committed any tortious

conduct or acted willfully and maliciously within the meaning of the

statute. Indeed, they claimed that the FAC’s allegation of vicarious liability

4 was inconsistent with the tortious conduct and state of mind requirements

for nondischargeability under § 523(a)(6).

Appellant opposed the dismissal motion. He argued that the state

court judgment barred debtors from challenging the nondischargeability of

the judgment debt under the doctrine of issue preclusion. In addition, he

asserted that under Bartenwerfer v. Buckley,

(2023), and prior

case law, a judgment holding a defendant vicariously liable for the tortious

conduct of another was sufficient to except the resulting debt from

discharge under § 523(a)(6).

After holding a hearing on the dismissal motion, the bankruptcy

court dismissed appellant’s complaint without leave to amend. As the

court explained, appellant had failed to allege any facts plausibly

suggesting that debtors themselves committed any tortious acts “with the

requisite intent to inflict injury, or with the belief that injury was

substantially certain to occur . . . .” As the court also noted, appellant’s

allegations admitted that the judgment debt rendered in the underlying

state court action was specifically based on debtors’ vicarious liability for

their son’s misconduct. The court concluded that such vicarious liability

could not as a matter of law qualify as a willful and malicious injury “by

the debtor[s]” for purposes of § 523(a)(6).

Appellant timely appealed.

JURISDICTION

The bankruptcy court had jurisdiction under

and

5 157. We have jurisdiction under

.

ISSUE

Does § 523(a)(6) cover debts arising from the tortious conduct of

another for which the debtor is held vicariously liable?

STANDARD OF REVIEW

This appeal requires us to construe § 523(a)(6). Issues of statutory

interpretation are questions of law we review de novo. Sachan v. Huh (In re

Huh),

(9th Cir. BAP 2014) (en banc), partially overruled on

other grounds by Bartenwerfer,

. De novo review means we give

no deference to the bankruptcy court’s decision.

CIVIL RULE 12(b)(6) STANDARDS

Civil Rule 12(b)(6) is made applicable in adversary proceedings by

Rule 7012. When we review an order granting a Civil Rule 12(b)(6) motion,

we consider the legal sufficiency of the complaint. Johnson v. Riverside

Healthcare Sys., LP,

, 1121–22 (9th Cir. 2008). “[F]or a

complaint to survive a motion to dismiss, the non-conclusory ‘factual

content,’ and reasonable inferences from that content, must be plausibly

suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret

Serv.,

(9th Cir. 2009) (citing Ashcroft v. Iqbal,

, (2009)). In other words, a claim is facially plausible when it contains

factual allegations that, if taken as true, would allow the court to

reasonably infer that the plaintiff is entitled to the relief requested. Iqbal,

.

6 In reviewing the sufficiency of a complaint under Civil Rule 12(b)(6),

the court must accept as true all facts properly alleged and draw all

reasonable inferences in favor of the appellant. Newcal Indus., Inc. v. Ikon

Off. Sols.,

, 1043 n.2 (9th Cir. 2008). However, courts need not

accept as true conclusory allegations or legal conclusions cast as factual

allegations. See Bell Atl. Corp. v. Twombly,

, 555–56 (2007). Nor

must it accept as true allegations that are contradicted by exhibits attached

to the complaint. Sprewell v. Golden State Warriors,

(9th

Cir.), as amended,

(9th Cir. 2001); see also Cavanaugh v. Cnty. of

San Diego,

, at *6 (S.D. Cal. Nov. 12, 2020) (“Plaintiffs may

plead themselves out of court by attaching exhibits inconsistent with their

claims because the court may disregard contradictory allegations.” (citation

omitted)), judgment entered,

(S.D. Cal. Nov. 13, 2020), and

aff'd,

(9th Cir. Dec. 22, 2021).3

3 Given our analysis of § 523(a)(6) set forth below, the specific basis of debtors’ vicarious liability is irrelevant. Yet, we are concerned by appellant’s attempt in the FAC to introduce

(“§ 1714.1”) as the basis for the default judgment against debtors. Generally speaking, § 1714.1 makes parents in “custody and control” of their minor child “jointly and severally liable” for their minor child’s “willful misconduct” and imputes to the parents such misconduct “for all purposes of civil damages.” But the statute limits the amount of a parent’s liability for their child’s tortious conduct to $25,000 or less during the applicable time. § 1714.1(c), (d). Appellant’s current citation to § 1714.1 makes no sense. The state court complaint did not reference or allude to this statute. To the contrary, the only basis for the parents’ liability pled in that complaint was agency. Nor did appellant allege that debtors were in “custody and control” of their son while he was at school when the underlying tortious conduct occurred. More importantly, the state court default judgment imposed

7 In addition to the allegations of the complaint itself, courts may also

consider the existence and content of documents attached to and

referenced in the complaint as exhibits. Lee v. City of L.A.,

, 688

(9th Cir. 2001), partially overruled on other grounds by Galbraith v. Cnty. of

Santa Clara,

, 1125–26 (9th Cir. 2002); Durning v. First Bos.

Corp.,

(9th Cir. 1987). Even when a document is not

physically attached to the complaint, courts may consider its existence and

contents when its authenticity is not contested and when the plaintiff

necessarily relies on it in his complaint. United States v. Ritchie,

(9th Cir. 2003); Lee, 250 F.3d at 688.

DISCUSSION

Section 523(a)(6) excepts from discharge any debt “for willful and

malicious injury by the debtor to another entity or to the property of

another entity.” The bankruptcy court dismissed the FAC because

appellant failed to allege that debtors committed the willful and malicious

injury giving rise to the claim against them. Appellant argues that after

Bartenwerfer, a debtor’s vicarious liability under state law for another’s

over $1,000,000 in damages against debtors without specifying a particular basis. This amount greatly exceeds the applicable statutory damages cap. In short, because exhibits attached to the FAC contradict appellant’s allegation regarding § 1714.1, we need not, and do not, accept this allegation in the FAC as true. See Sprewell,

; Cavanaugh,

, at *6; see also Johnson v. Fed. Home Loan Mortg. Corp.,

, 1007–08 (9th Cir. 2015) (relying in part on deed of trust not attached to the plaintiff’s complaint to negate allegation that defendant owed certain contractual duties to plaintiff). 8 misconduct is now treated as establishing their misconduct for purposes of

excepting all the resulting debts from discharge under § 523(a). In short, he

argues that vicarious liability not only extends liability but also imputes

the wrongful conduct and intent of the tortfeasor to the third-party debtor

for purposes of determining nondischargeability of a debt under

§ 523(a)(6). But appellant’s expansive interpretation of Bartenwerfer is

contrary to its reasoning. Indeed, Bartenwerfer’s statutory analysis reflects

that to except a debt from discharge under § 523(a)(6), a creditor must

prove that its claim arises from willful and malicious actions by the debtor.

Because the FAC alleged instead that debtors’ child committed the tortious

acts giving rise to their liability, appellant failed to state a claim under

§ 523(a)(6).

A. The effect of Bartenwerfer on the scope of § 523(a)(2)(A).

It is a fundamental tenet of modern bankruptcy law that the debts of

the “honest but unfortunate debtor” generally should be discharged and

hence the exceptions to discharge set forth in § 523(a) should be narrowly

construed. See In re Huh,

. Bartenwerfer acknowledged this

general principle but found it inapt for purposes of interpreting whether

§ 523(a)(2)(A) renders nondischargeable an innocent partner’s vicarious

liability for his partner’s fraud. Bartenwerfer,

(“We have never

used this principle to artificially narrow ordinary meaning, which is what

Bartenwerfer asks us to do.”).

Bartenwerfer began its statutory analysis “where we always do: with

9 the text of the statute.”

at 74 (quoting Van Buren v. United States,

(2021)). Turning to the language of § 523(a)(2)(A), the Supreme

Court noted that “the passive-voice statute does not specify a fraudulent

actor.” Id. at 75. Rather, under this subsection, “[t]he debt must result from

someone’s fraud, but Congress was ‘agnosti[c]’ about who committed it.”

Id. (citing Watson v. United States,

(2007)). The Court

reasoned that “[u]nderstanding § 523(a)(2)(A) to reflect the passive voice’s

usual ‘agnosticism’ is thus consistent with the age-old rule that individual

debtors can be liable for fraudulent schemes they did not devise.” Id. at 76.

Bartenwerfer then contrasted the passive nature of § 523(a)(2)(A) with

its “neighboring provisions, which both require action by the

debtor herself.” Id. at 77. Specifically, § 523(a)(2)(B)(iv) requires a

misrepresentation “that the debtor caused to be made or published with

intent to deceive.” Id. (emphasis in original). Similarly, § 523(a)(2)(C)

requires that the consumer debts at issue be for “luxury goods or services

incurred by an individual debtor” and that any cash advances be

“obtained by an individual debtor.” Id. at 78 (emphasis in original).

According to Bartenwerfer, the most likely inference to be drawn from its

textual analysis was that § 523(a)(2)(A) “excludes debtor culpability from

consideration given that (B) and (C) expressly hinge on it.” Id.

Bartenwerfer next proceeded to examine prior Supreme Court

precedent—and Congress’ response to it—to confirm its textual analysis.

Id. at 79. It first focused on Strang v. Bradner,

(1885). At the time

10 of Strang, the operative bankruptcy statute excepted from discharge any

“debt created by the fraud or embezzlement of the bankrupt.”

at 79

(quoting the Bankruptcy Act of 1867, Ch. 176, § 33,

, 533

(repealed 1878)) (emphasis supplied by Bartenwerfer). Despite the inclusion

of the phrase “of the bankrupt” in the 1867 statute, Strang held that the

nondischargeability of partnership debt arising from one partner’s fraud

extended to other partners innocent of the fraud.

at 79-80 (citing Strang,

). To reach this conclusion, Strang relied on common law

partnership and agency principles governing liability to impute the fraud

of one partner to all partners for purposes of nondischargeability.

at 80

(citing Strang,

). It further reasoned that the absence of

wrongful conduct or a culpable state of mind by the debtors was irrelevant

because “the partners, who were not themselves guilty of wrong, received

and appropriated the fruits of the fraudulent conduct of their associate in

business.”

(citing Strang,

).4

4 Bartenwerfer’s description of Strang highlights the weak link in Strang’s reasoning. Strang treated nondischargeability and liability as if they were the same thing—or as if the common law’s treatment of vicarious liability necessarily should govern the issue of nondischargeability in bankruptcy. Though Bartenwerfer declined to opine whether Strang was correctly decided,

at 80 n.3, modern conceptions of statutory construction and the scope and nature of the Bankruptcy Code’s nondischargeability provisions would appear to prevent Strang from being decided today the way it was decided in 1885. Applying these modern conceptions, the doctrinal underpinnings of Strang dealing with the common law vicarious liability simply cannot eclipse the plain language of the statute regarding the scope of nondischargeability. The Supreme Court has explained that “[s]ince 1970, . . . the issue of nondischargeability has been a matter of federal law governed by the terms of the

11 Bartenwerfer then turned its attention to the revision of our country’s

bankruptcy laws following Strang—subsumed within the Bankruptcy Act

of 1898 (“1898 Act”), Ch. 541,

(repealed 1978). The 1898 Act

omitted the phrase “of the bankrupt” from the new exception to discharge

statute. As stated in the 1898 dischargeability statute, “[a] discharge in

bankruptcy shall release a bankrupt from all of his provable debts, except

such as . . . are judgments in actions for frauds, or obtaining property by

false pretenses or false representations, or for willful and malicious injuries

to the person or property of another.”

at 80-81 (quoting 1898 Act, § 17,

30 Stat. at 550 (last codified as

(a)(2), (8) (1976)). According to

Bartenwerfer, Congress’ deletion of the phrase “of the bankrupt” from the

1898 Act’s exception to discharge statute “unmistakabl[y]” was meant to

embrace Strang’s holding that an innocent partner’s liability for partnership

debts arising from another partner’s fraud should be nondischargeable in

bankruptcy.

The final step in Bartenwerfer’s analysis simply observed that our

modern Bankruptcy Code essentially “reenacted the discharge exception

for fraud without change”—at least with respect to the continuing

omission from § 523(a)(2)(A) of any reference to “by the debtor.” Id. at 80.

According to Bartenwerfer, this continuing omission enabled it to conclude

that Congress “embraced Strang’s holding” by making all partnership

Bankruptcy Code.” Grogan v. Garner,

(1991). Contrary to the reliance on state law in Strang, dischargeability is now purely an issue of bankruptcy law. 12 fraud debts nondischargeable under § 523(a)(2)(A) regardless of whether

the debtor herself had committed any fraud. Id. at 80-81.5

In sum, Bartenwerfer relied on a combination of textual analysis, prior

Supreme Court precedent, and the congressional response to that Supreme

Court precedent to conclude that § 523(a)(2)(A) rendered nondischargeable

a debtor-partner’s vicarious liability for another partner’s fraud. The next

section of our decision examines the significance of Bartenwerfer for

purposes of interpreting the scope of § 523(a)(6).

B. Bartenwerfer does not support appellant’s assertion that § 523(a)(6) excepts from discharge debts arising from vicarious liability.

Appellant references much of Bartenwerfer’s reasoning but then

draws from this reasoning an unwarranted conclusion: that the absence or

presence of “by the debtor” (or similar phrases) in the separate paragraphs

of § 523(a) “is not determinative to whether an exception applies to

vicarious liability for nondischargeable conduct.” Aplt. Opn. Br. at 15. For

purposes of interpreting § 523(a)(6), the reasoning and detailed analysis

applied in Bartenwerfer are both antithetical to appellant’s position. Under

5Bartenwerfer effectively overruled this Panel’s en banc decision in Huh, which held that § 523(a)(2)(A) did not apply to vicarious liability for fraud unless the innocent principal knew or should have known of her agent’s fraud. Huh’s analysis largely relied on Kawaauhau v. Geiger,

(1998), and Bullock v. BankChampaign, N.A.,

(2013). According to Huh, “[t]he Geiger and Bullock decisions appear to cut strongly against applying imputed fraud under § 523(a)(2)(A) to except a debt from discharge in the absence of some showing of culpability on the part of the debtor.”

. However, Bartenwerfer perceived no tension between its reading of § 523(a) and its previous decisions in Geiger and Bullock. See Bartenwerfer,

. 13 Bartenwerfer’s rationale, the presence of the phrase “by the debtor” in

§ 523(a)(6) is critical. To hold otherwise would violate the very statutory

interpretation and dichotomy on which Bartenwerfer focused.

Applying to § 523(a)(6) the same methodology Bartenwerfer used to

distinguish the text of § 523(a)(2)(A) from the text of (B) and (C), the

presence in § 523(a)(6) of the phrase “by the debtor” must be given at least

the same weight as Bartenwerfer gave its omission from § 523(a)(2)(A). 6 In

this sense, § 523(a)(6) is the polar opposite of § 523(a)(2)(A). In short,

appellant offers no argument as to why the clear language of § 523(a)(6)

should not be applied as it reads: to require the creditor to prove that the

debtor both caused the willful and malicious injury and harbored the

requisite intent.

As with Bartenwerfer’s textual analysis, so too with its discussion of

Strang and the congressional response to it. Bartenwerfer used both to help

construe § 523(a)(2)(A). Applying the same methodology to our

construction of § 523(a)(6) bolsters the conclusion that § 523(a)(6) does not

apply to debtors’ vicarious liability for their son’s misconduct. Though we

employ the same methodology, we focus here on the evolution of the

nondischargeability provision governing debts for willful and malicious

6 Indeed, the Supreme Court made this very point in rejecting Bartenwerfer’s statutory analysis of § 523(a)(2): “This argument flips the rule that ‘[w]hen Congress includes particular language in one section of a statute but omits it in another section of the same Act,’ we generally take the choice to be deliberate.” Bartenwerfer,

(quoting Badgerow v. Walters,

(2022)). 14 injuries. Following Bartenwerfer’s reasoning, this evolution conclusively

fixes the scope of § 523(a)(6).

As with debts for fraud, section 17 of the 1898 Act omitted any

reference to “of the bankrupt” or “by the debtor” when excepting from

discharge debts “for willful and malicious injuries to the person or

property of another; . . . .” 1898 Act, § 17(a)(2); 30 Stat. at 550 (last codified

as

(a)(8) (1976)). 7 Just as the statute did not condition the

nondischargeability of debts for fraud on any action by the debtor, no such

requirement existed for willful or malicious acts under the 1898 Act. It was

not until the Bankruptcy Reform Act of 1978, Pub. L. No. 95–598,

, 2591, that Congress adopted the current language of § 523(a)(6) to

except from discharge only those debts: “(6) for willful and malicious

injury by the debtor to another entity or to the property of another entity.”

In doing so, Congress specifically chose to add the phrase “by the debtor”

when framing the scope of nondischargeability for willful and malicious

injury in § 523(a)(6). As Bartenwerfer explained, Congress must have been

7 As originally enacted, section 17(a)(2) of the 1898 Act not only excepted from discharge liabilities for fraud but also excepted all liabilities for “willful and malicious injuries to the person or property of another.” Before its repeal in 1978, the 1898 Act was amended to distinguish between willful and malicious conversion and other willful and malicious injuries. The former remained part of section 17(a)(2), while the latter became the substance of a new paragraph—section 17(a)(8) (last codified as

(a)(8) (1976)). As with liabilities for fraud and willful and malicious conversion under

(a)(2), willful and malicious injuries other than conversion under

(a)(8) did not require any action “by the debtor.” The Bankruptcy Reform Act of 1978 combined the two different discharge exceptions for willful and malicious injuries into a single paragraph, § 523(a)(6). 15 aware that it had embraced Strang’s holding by omitting similar phrases in

1898 and in 1978 from the exception to discharge provisions for fraud

debts. Thus, in the parlance of Bartenwerfer, the “unmistakable implication”

of subsequently including “by the debtor” in § 523(a)(6) is that Congress

rejected Strang and the “passive voice” nondischargeability of debts for

intentional torts other than fraud based merely on the nature of the debt,

whosoever may be liable. Rather, when Congress subsequently inserted the

phrase “by the debtor,” it knowingly required proof that the debtors

themselves willfully and maliciously injured the creditor to except the debt

from discharge under § 523(a)(6). In short, Bartenwerfer compels the

conclusion that by changing the statutory language of § 523(a)(6) from

passive to active, Congress precluded the nondischargeability of a debtor’s

vicarious liability for intentional torts other than fraud.

C. In re Cecchini does not help appellant.

Appellant next claims that the nondischargeability of debtors’

vicarious liabilities under § 523(a)(6) is mandated by Impulsora Del Territorio

Sur, S.A. v. Cecchini (In re Cecchini),

(9th Cir. 1986), partially

overruled on other grounds by Kawaauhau v. Geiger,

(1998). In

Cecchini, the Ninth Circuit Court of Appeals held that two partners’ debts

for conversion of prepayment checks were nondischargeable under

§ 523(a)(6). The court considered parallel challenges in Joseph Cecchini’s

and Peter Robustelli’s separate bankruptcy cases to the dischargeability of

the debts arising from the partnership’s conversion of those checks. The

16 Ninth Circuit first considered the standard for determining a willful and

malicious injury under § 523(a)(6). It held that a “wrongful act such as

conversion, done intentionally, necessarily produces harm and is without

just cause or excuse, . . . is ‘willful and malicious’ even absent proof of a

specific intent to injure.” Id. at 1443. Applying this standard, it concluded

that there was “ample evidence from which to determine the involvement”

of the two partners. Id. Cecchini had directed the partnership’s agent to

seize the payments which were endorsed and deposited into the

partnership’s account. His intent was well established, but there was “no

evidence in the record concerning Robustelli’s direct involvement in

converting the funds . . . .” Id. at 1444. Still, Robustelli’s debt was held to be

nondischargeable because Cecchini’s actions were on behalf of the

partnership in its ordinary course, and Robustelli had participated in the

benefits of the conversion. Id. The Ninth Circuit imputed Cecchini’s

knowledge and intentional actions to Robustelli based on “basic

partnership law” principles governing liability. Id. at 1444. The Ninth

Circuit has long since acknowledged that Kawaauhau v. Geiger,

(1998), abrogated Cecchini’s holding concerning the requisite state of mind

for nondischargeability under § 523(a)(6). See Peklar v. Ikerd (In re Peklar),

(9th Cir. 2001).

Appellant assumes, without discussion, that imputation of the

partner’s actions for claims under § 523(a)(6) under Cecchini survived the

Supreme Court’s decision in Bartenwerfer. He urges this Panel to impute the

17 willful and malicious intent of debtors’ child to them. 8 Even if Cecchini

somehow survived Bartenwerfer, the record demonstrates that appellant’s

allegations fall far outside its ambit.9 The intentional acts of the partner to

convert the checks were imputed to the “innocent” debtor in Cecchini

because the tortious conduct was undertaken in the ordinary course of the

partnership for its benefit, which served to benefit Robustelli. Id. at 1444.

Appellant made no such allegations in his complaint and has failed to

explain what possible allegations could support such an inference here.

Appellant merely contends that debtors were liable for the acts of their

child as their agent. Assuming such an agency relationship was sufficiently

pled, appellant fails to identify the scope of the agency while the child was

8 In Tsurukawa v. Nikon Precision, Inc. (In re Tsurukawa),

(9th Cir. BAP 2001), we held that, “a marital union alone, without a finding of a partnership or other agency relationship between spouses, cannot serve as a basis for imputing fraud from one spouse to the other” for purposes of excepting a debt from discharge under § 523(a)(2)(A). Id. at 198. It is unclear whether Tsurukawa survived Bartenwerfer, and we express no opinion on that issue. 9 Shortly after Cecchini, the Ninth Circuit questioned its holding in La Trattoria,

Inc. v. Lansford (In re Lansford),

(9th Cir. 1987), in the context of nondischargeability claims against the debtor-wife brought under § 523(a)(2). In Lansford, then Ninth Circuit Judge Anthony Kennedy acknowledged: “[w]ere we to rely on strict agency or partnership principles, we might be forced to conclude that Cecily Lansford’s debt is non-dischargeable regardless of her knowledge of the fraud or her own culpability.” But citing Walker v. Citizens State Bank of Maryville, Mo. (In re Walker),

(8th Cir. 1984), which addressed the scope of agency liability under § 523(a)(6), Lansford also cautioned: “[i]n light of the bankruptcy code’s purpose of providing a fresh start . . ., we believe the breadth of the proposition stated in Cecchini deserves more thorough consideration . . . .” Id. at 905. Ultimately, both debtors in Lansford were found to have engaged in culpable conduct warranting the nondischargeability of the debts against them. 18 in school and out of their control. Indeed, appellant fails to suggest how an

intent to injure another was within that agency or how it could benefit

debtors to bring it within the scope of any agency. This alone distinguishes

the instant case from Cecchini. See Bartenwerfer,

(J. Sotomayor,

concurring) (“The Court here does not confront a situation involving fraud

by a person bearing no agency or partnership relationship to the debtor.

Instead, the relevant legal context concerns fraud only by ‘agents’ and

‘partners within the scope of the partnership.’” (cleaned up)).

More fundamentally, Cecchini appears contrary to the ordinary

meaning of § 523(a)(6) as elucidated by Bartenwerfer’s textual analysis.

Cecchini effectively eliminated the phrase “by the debtor” that Congress

added to § 523(a)(6) in 1978. Appellant argues that California law renders

this phrase irrelevant because state law imposes the underlying liability on

debtors for an intentional and malicious injury. This is simply a

repackaging of his other arguments, which continues to ignore the

difference between the underlying liability under applicable

nonbankruptcy law and the federal requirements for nondischargeability

established by § 523(a). In this instance, § 523(a)(6) requires that to render a

debt nondischargeable the debtor must have the willful and malicious

intent to injure as evidenced by the use of the phrase “by the debtor.”

Appellant may not simply read this language out of the statute.

We are bound by the Ninth Circuit’s published decisions, and we

treat them as binding precedent. See Deitz v. Ford (In re Deitz),

,

19 22 (9th Cir. BAP 2012), aff'd and adopted,

(9th Cir. 2014). But

when the reasoning in an intervening Supreme Court decision “closely on

point,” is “clearly irreconcilable” with the reasoning of the Ninth Circuit

precedent, the Ninth Circuit precedent no longer is considered binding.

at 23 (citing Miller v. Gammie,

(9th Cir. 2003) (en banc)).

We do not lightly turn away from Cecchini. The Supreme Court obviously

did not address § 523(a)(6) in Bartenwerfer, but it drew a clear dichotomy

between those provisions in § 523(a)(2) that referenced acts by the debtor

and those which did not. Section 523(a)(6) requires proof of “willful and

malicious injury by the debtor to another . . . .“ (Emphasis added.) In light

of Bartenwerfer’s statutory construction and reasoning, we do not see how

Cecchini’s imputation under § 523(a)(6) could have survived.

In sum, Bartenwerfer’s emphasis on the presence or absence of the

phrase “by the debtor” seems to preclude Cecchini’s holding applying

§ 523(a)(6) to except from discharge the vicarious liability of an innocent

partner for another partner’s intentional tort other than fraud. We see no

reasoned difference in the case of an alleged agency, and appellant offers

no basis to make such a distinction.

D. The default judgment against debtors for their son’s tortious conduct does not mean their debt is nondischargeable under § 523(a)(6).

Appellant also asserts that the preclusive effect of his state court

default judgment conclusively determined the nondischargeability of

20 debtors’ judgment debt. He points out that the state court default judgment

evidently applied California law to hold debtors vicariously liable for their

son’s intentional tort, though the basis for imposition of vicarious liability

against the parents is unclear.10 Appellant reasons that debtors’ vicarious

liability for their son’s tort established that they willfully and maliciously

injured him under the doctrine of issue preclusion. According to appellant,

the judgment should be nondischargeable under § 523(a)(6) regardless of

the theory used to extend liability to debtors for their son’s tortious

conduct. Appellant thus reasons that because debtors are barred from

relitigating their liability, the bankruptcy court erred in dismissing his

nondischargeability complaint.

Appellant’s attempted use of the default judgment to preclude

debtors from litigating whether they willfully and maliciously intended to

cause him injury is simply incorrect. Fundamentally, there is nothing to

suggest that the state court actually and necessarily litigated this issue

when it imposed liability on debtors for their son’s actions. Indeed, the

complaint on which the state court granted default judgment failed to

10 Appellant has—after the fact—posited multiple alternative legal theories for debtors’ vicarious liability. However, the state court judgment was silent as to any particular basis for its judgment. The only potential ground for debtors’ liability suggested in the state court complaint was based on basic principles of agency law. As stated at paragraph 8 of his state court complaint: “Appellant is informed and believes, and thereon alleges, that Defendants each ratified and/or authorized the acts of each of the other Defendants insofar as any one of the Defendants is the principal and/or agent, employee, contractor, partner, servant, and/or representative of the other Defendants.” Ex. 1 to FAC, at 8 of 24. 21 allege that debtors took any action at all that caused the appellant’s injury.

Appellant thus has failed to establish this fundamental element of issue

preclusion under California law.11

Clearly, the default judgment established debtors’ liability, and

debtors cannot relitigate their underlying liability. But as we have

indicated throughout this decision, appellant continues to improperly

collapse the separate questions of liability and nondischargeability.

Appellant’s argument is inconsistent with the Supreme Court’s decision in

Grogan v. Garner,

(1991), which is premised on the notion

that state law and state courts do not, and legally cannot, determine the

nondischargeability of a debt.

. As Grogan explained, the issue

preclusive effect of a prior state court judgment might conclusively

determine liability and identical subsidiary issues arising in both the prior

state court action and the subsequent nondischargeability action. However,

the prior judgment does not determine the ultimate issue of

nondischargeability in a subsequent nondischargeability action.

This

also is why there is no claim preclusive effect arising from the prior state

11 In the context of a California default judgment, an issue is subject to preclusive effect only if the defendant was aware of the prior lawsuit and one of the following two additional circumstances is present: (1) the prior court made an “express finding” determining the issue; or (2) the prior court “necessarily decided” the issue because the issue was an essential element of the relief granted. Harmon v. Kobrin (In re Harmon),

(9th Cir. 2001). Here, the FAC—and the contents of the state court complaint and judgment incorporated into the FAC—are bereft of anything suggesting that the state court expressly found or necessarily decided that debtors were directly liable for the tortious conduct of their son. 22 court judgment when the creditor later files the nondischargeability action

in the bankruptcy court. See generally Olsen v. Bloomfield Grp., Inc. (In re

Olsen),

, at *3 (9th Cir. BAP Dec. 11, 2014) (listing cases

and stating: “[i]t is well established that claim preclusion does not apply in

a § 523(a) nondischargeability proceeding.”).

The Supreme Court’s decision in Bartenwerfer reaffirms that the

question of liability is the exclusive province of state law (or more aptly,

applicable nonbankruptcy law), while nondischargeability is exclusively

the province of Congress. Id. at 77-82. Bartenwerfer compels us to conclude

that the presence of the phrase “by the debtor” in § 523(a)(6) necessarily

means that vicarious liability for willful and malicious injuries caused by

someone else does not render such liability of the debtor nondischargeable

under § 523(a)(6).

Appellant finally offers a slightly derivative argument that dismissal

was erroneous because the default judgment was sufficient to establish that

debtors were directly liable for both battery and intentional infliction of

emotional distress. This argument is frivolous. It is wholly at odds with the

FAC, which alleges: “[t]he Judgment against Defendants is based on

Defendants’ vicarious liability for the willful and malicious conduct of

Defendants’ minor son.” Even if the FAC did not contain this allegation,

appellant attached to—and incorporated by reference into—the FAC both

the state court complaint and the state court default judgment. There is

absolutely nothing in either of these documents tending to support

23 appellant’s claim that the state court conclusively determined for issue

preclusion purposes that debtors were directly liable for battery and

intentional infliction of emotional distress.

CONCLUSION

For the reasons set forth above, we AFFIRM the bankruptcy court’s

dismissal of appellant’s complaint under § 523(a)(6) without leave to

amend. 12

12 In appeals from Civil Rule 12(b)(6) dismissals, we typically consider whether the bankruptcy court should have granted leave to amend. See, e.g., Censo, LLC v. NewRez, LLC (In re Censo, LLC),

, 426 (9th Cir. BAP 2022), aff'd,

(9th Cir. Oct. 18, 2023). Here, however, appellant specifically and distinctly waived any right he had to amend the FAC at the dismissal hearing held in the bankruptcy court. See Hamer v. Neighborhood Hous. Servs. of Chi.,

, 20 n.1 (2017) (stating that “waiver is the intentional relinquishment or abandonment of a known right” (cleaned up)).

24