Opinion
NOT FOR PUBLICATION
Argued and Submitted at Phoenix, Arizona: October 22, 2010
Appeal from the United States Bankruptcy Court for the District of Arizona. Bk. No. 04-18134-RTB, Adv. No. 04-1266-RTB. Hon. Redfield T. Baum, U.S. Bankruptcy Judge, Presiding.
Appellant Thomas Michael Cagney argued Pro se.
Thomas Merrill Quigley, Sherman & Howard, LLC argued for Appellant Andrea J. Smith
Before PAPPAS, JURY and BAUER, [ Bankruptcy Judges.
The Honorable Catherine E. Bauer, United States Bankruptcy Judge for the Central District of California, sitting by designation.
This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1.
Chapter 7 debtor Thomas M. Cagney (" Cagney") appeals from the judgment of the bankruptcy court that a $25,000 state court judgment in favor of his former wife, Andrea J. Smith (" Smith"), is excepted from discharge in Cagney's bankruptcy case under § 523(a)(6). We AFFIRM.
Unless otherwise indicated, all chapter, section and rule references herein are to the Bankruptcy Code, 11 U.S.C. § § 101-1532, and to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037, as enacted and promulgated prior to the effective date (October 17, 2005) of most of the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. 109-8, April 20, 2005, 119 Stat. 23.
Cagney failed to comply with any of the provisions of Rules 8009 and 8010 regarding preparation of briefs and, with the exception of the transcript of the trial on nondischargeability, he provided no excerpts of record. This factual summary is compiled from the Panel's earlier Memorandum decision in connection with this case, Cagney v. Smith (In re Cagney), BAP No. AZ- 07-1384 (9th Cir. BAP July 25, 2008) (the " BAP Memo"), and from entries in the bankruptcy court's adversary proceeding docket. We also have considered the fourteen documentary exhibits presented to the bankruptcy court at the hearing on November 24, 2009, which were offered and received in evidence without objection. Hr'g Tr. 4:4-11. The exhibits are described by Smith's attorney during the trial, Hr'g Tr. 47:16--50:25, without objection to those descriptions from Cagney.
Cagney filed a voluntary petition under chapter 7 on October 15, 2004. On December 21, 2004, Smith commenced an adversary proceeding against Cagney, wherein she asked the bankruptcy court to declare that the debts represented by three state court judgments issued by the Arizona Superior Court (Maricopa County) against Cagney were excepted from discharge. The debts were based on: (1) a judgment in favor of Smith against Cagney for unpaid child support (the " Child Support Judgment"); (2) a criminal restitution order in Smith's favor arising from an aggravated assault committed against her by Cagney (the " Restitution Award"); and (3) a civil judgment of $25,000 in favor of Smith (the " Smith Judgment") and $15,000 in favor of Katy A. Cagney (" Katy"), Smith and Cagney's then-minor child (" Katy's Judgment" and, together with the Smith Judgment, the " Civil Judgment") arising from the assault incident.
The State Court Proceedings
On September 16, 2001, Cagney allegedly assaulted Smith and Katy by pointing a shotgun at them (the " September 16 Assault"). Cagney was arrested in October 2001 and originally entered not guilty pleas as to the September 16 Assault. On March 25, 2002, Cagney apparently changed his mind as to the criminal charges, electing instead to plead guilty to committing an aggravated assault against Smith and to disorderly conduct against Katy. The state court on April 24, 2002, found Cagney guilty of aggravated assault on Smith under Ariz. Rev. Stat. (" A.R.S.") § § 13-1203(A)(2) and 13-1204(A)(2) & (B) and of disorderly conduct on Katy under A.R.S. § § 13-2904 and 13-3601(A). Both crimes were felonies. The court suspended Cagney's jail sentence and placed him on probation for four years for the aggravated assault charge and three years for the disorderly conduct; the probation terms were to run concurrently. In addition, based upon the September 16 Assault, the state court ordered that Cagney pay Smith restitution of $4,260.38 " for the economic loss of the victim."
At some later point not clear in the record, Cagney's probation was revoked and he was incarcerated. The record does not reveal the reason for revocation. Cagney spent more than three years in the state prison in Florence, Arizona. Hr'g Tr. 14:21-22.
On August 20, 2002, the state court entered an order dissolving the marriage of Cagney and Smith. In the dissolution proceeding, the state court entered the Child Support Judgment in Smith's favor.
Smith, for herself and Katy, filed a civil complaint in Arizona Superior Court on April 25, 2002, alleging that Cagney had assaulted them with a shotgun, thereby inflicting emotional distress. Smith's complaint sought recovery of compensatory damages, punitive damages and related costs from Cagney.
The complaint alleged other claims against Cagney, based upon different conduct, but those other counts of the complaint are not relevant in this appeal.
Smith filed a motion for partial summary judgment based on the September 16 Assault. Hr'g Tr. 49:10-14 (November 24, 2009). On September 2, 2002, the state court granted partial summary judgment in her favor, reserving the question of damages for trial. Hr'g Tr. 49:21-23. A trial was held on the damages question at some later time not clear in the record. On November 3, 2004, the state court entered the Civil Judgment, awarding $25,000 to Smith and $15,000 to Katy.
Events Leading to the Prior BAP Decision
In the adversary proceeding, on June 20, 2007, Smith filed a motion for summary judgment seeking a judgment excepting the three State Court Judgments from discharge under § § 523(a). Smith alleged that: The Child Support Judgment was nondischargeable under § 523(a)(5) as a domestic support obligation. The Restitution Award, Smith argued, was nondischargeable under § 523(a)(6) as a " willful and malicious injury caused by the debtor." Finally, the Civil Judgment, according to Smith, also fell within § 523(a)(6) because, among other reasons, Cagney's guilty plea to aggravated assault with a shotgun should estop him from denying that the Civil Judgment arose out of a willful and malicious injury. Cagney, acting pro se, responded to Smith's motion, generally attempting to relitigate the merits of the underlying judgments and stating that he would never have sufficient funds to pay the judgments.
The bankruptcy court conducted a hearing on Smith's summary judgment motion on September 11, 2007. In its minute order entered on September 24, 2007, the court determined that Cagney had failed to meet his burden of showing that any genuine issues of material fact were in dispute and granted summary judgment to Smith. In its judgment entered November 13, 2007, the bankruptcy court ruled that the Child Support Judgment was nondischargeable under § 523(a)(5) as a domestic support obligation and that the Restitution Award was nondischargeable under § 523(a)(7). Cagney did not oppose, or later appeal, the determinations of nondischargeability as to either of these state court judgments.
As to the Civil Judgment, the bankruptcy court applied the principles of issue preclusion and determined that all of the elements of § 523(a)(6) had been met, thus rendering it nondischargeable under § 523(a)(6).
Cagney appealed the bankruptcy court's decision as to the Civil Judgment to the BAP. The BAP determined that the bankruptcy court erred in applying issue preclusion to the Civil Judgment, because two of the five elements required by Arizona law to invoke issue preclusion were not met: whether the issue was actually litigated in the previous proceeding, and whether resolution of the issue was essential to the judgment. BAP Memo at 14-18. The Panel was particularly concerned that neither the bankruptcy court nor the Panel had access to many of the critical documents, such as the transcripts of the state court proceedings and the findings of the state court judge. BAP Memo at 17. The Panel reversed the summary judgment and remanded the action to the bankruptcy court for further proceedings.
The Proceedings on Remand and This Appeal
On February 27, 2009, Smith requested a trial date in the adversary proceeding, arguing that there remained only the question of the nondischargeability of the Civil Judgment. On March 10, Cagney moved to dismiss the case and discharge the Civil Judgment, primarily on grounds that he could not afford to continue the case and provide for his family. Cagney also moved on March 31, 2009 for recusal of the bankruptcy judge for prejudice.
The bankruptcy court held a hearing on May 13, 2009 on the recusal and dismissal motions. The bankruptcy court concluded that there were no grounds for dismissal or recusal and directed the parties to prepare for trial.
Trial was held in the adversary proceeding on November 23, 2009. Smith was represented by counsel and Cagney appeared pro se. Cagney testified at trial. He discussed the events of September 16, 2001, generally denying that an aggravated assault ever occurred, and insisting that he only pled guilty to the crimes in state court because he wanted the ordeal to be over with. Hr'g Tr. 24:3-4, 18-19, 27:3-5. Cagney then called his daughter Kelly Cagney and son Kevin Cagney as witnesses, although neither had been present in the house at the time of the alleged assault.
Smith did not call any witnesses, relying solely on the documentary evidence submitted to the bankruptcy court. Smith's fourteen exhibits were entered into evidence without objection from Cagney. These documents included, among others:
- Exhibit 2, the plea agreement signed by Cagney. At trial, Cagney admitted under oath that he had placed his initials next to the count for aggravated assault against Smith, and the count for disorderly conduct against Katy, and had then signed the plea agreement. Hr'g Tr. 16:14-18.
- Exhibit 3, the transcript of the hearing in the state court on March 25, 2002, where Cagney changed his not guilty plea to guilty on aggravated assault and disorderly conduct. As recounted in the transcript of the November 23rd hearing, Cagney's attorney described the factual basis of the criminal charges and then stated, " On September 16, 2001, Mr. Cagney had a shotgun in his hand and pointed it at Andrea Cagney Smith, now Donnelly." Trial Exh. 3 at 18; Hr'g Tr. 48:18-20. Later on during this hearing, in response to the state court's question to Cagney if his lawyer's statement was true, Cagney replied, " yes, sir." Trial Exh. 3 at 20; Hr'g Tr. 49:1-2.
-Exhibit 12, the minute entry of the state court entering judgment for damages in the civil action. The minute entry indicates that the state court is basing the damage awards on Cagney's criminal actions on September 16 for aggravated assault and disorderly conduct. Hr'g Tr. 50:17-21.
Following closing arguments, the bankruptcy court took the issues under advisement; it entered a minute entry/order on December 21, 2009. In it, the bankruptcy court reviewed Arizona statutory law regarding the elements of the crimes of aggravated assault and disorderly conducted. The court noted that Cagney's defense consisted of two propositions: (1) that the criminal event, displaying and aiming a shotgun, never occurred; and (2) that he pled guilty because he wanted the criminal proceedings to be over, and he believed that would be the end of it. The bankruptcy court rejected both of these positions.
First, the bankruptcy court observed that Cagney had confirmed to the state court judge his attorney's statement that Cagney " had a shotgun in his hand and he pointed it at the direction of Andrea Cagney." The bankruptcy court accepted Cagney's statement before the state court judge as true and declined to credit Cagney's later denial in bankruptcy court.
After its review of the evidentiary record, the bankruptcy court concluded that the aggravated assault on Smith was the type of willful and malicious injury not dischargeable under § 523(a)(6) and ruled the Smith Judgment portion of the Civil Judgment nondischargeable. However, the bankruptcy court found the Katy Judgment, based on disorderly conduct, was premised upon Cagney's reckless act that was not intentional, and thus that debt was not excepted from discharge under § 523(a)(6). Id.
The bankruptcy court entered a judgment implementing its decision on February 4, 2010. Cagney had filed a premature notice of appeal concerning the court's ruling regarding the Smith Judgment on January 20, 2010; that notice became timely by entry of judgment on February 4, 2010. Rule 8002(b).
JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. § § 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C. § 158.
ISSUE
Whether the bankruptcy court erred in ruling that the Smith Judgment was nondischargeable in Cagney's bankruptcy under § 523(a)(6).
STANDARD OF REVIEW
" Whether a claim is nondischargeable presents mixed issues of law and fact and is reviewed de novo." Carrillo v. Su (In re Su), 290 F.3d 1140, 1142 (9th Cir. 2002); Maaskant v. Peck (In re Peck), 295 B.R. 353, 360 (9th Cir. BAP 2003). A mixed question exists when the facts are established, the rule of law is undisputed, and the issue is whether the facts satisfy the legal rule. Murray v. Bammer (In re Bammer), 131 F.3d 788, 792 (9th Cir. 1997). De novo means review is independent, with no deference given to the trial court's conclusion. Rule 8013.
DISCUSSION
A creditor bears the burden of proving that its claim against a debtor is excepted from discharge under section 523(a)(6) by a preponderance of the evidence. Harmon v. Kobrin (In re Harmon), 250 F.3d 1240, 1246 (9th Cir. 2001); see also, Grogan v. Garner, 498 U.S. 279, 284, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991).
Section 523(a)(6) provides: " (a) A discharge under 727 . . . of this title does not discharge an individual debtor from any debt -- . . . (6) for willful and malicious injury by the debtor to another entity or to the property of another entity." Whether a particular debt is for willful and malicious injury by the debtor to another or the property of another under section 523(a)(6) requires application of a two-pronged test to the conduct giving rise to the injury. In other words, the creditor must prove that the debtor's conduct in causing the injuries was both willful and malicious. Barboza v. New Form, Inc. (In re Barboza), 545 F.3d 702, 711 (9th Cir. 2008)(citing Carrillo v. Su (In re Su), 290 F.3d 1140, 1146-47 (9th Cir. 2002) and requiring the application of a separate analysis of each prong of " willful" and " malicious").
In this context, to show that a debtor's conduct is willful requires proof that the debtor deliberately or intentionally injured the creditor or the creditor's property, and that in doing so, the debtor intended the consequences of his act, not just the act itself. Kawaauhau v. Geiger, 523 U.S. 57, 60-61, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998); In re Su, 290 F.3d at 1143. The debtor must act with a subjective motive to inflict injury, or with a belief that injury is substantially certain to result from the conduct. In re Su, 290 F.3d at 1143.
For conduct to be malicious, the creditor must prove that the debtor: (1) committed a wrongful act; (2) done intentionally; (3) which necessarily causes injury; and (4) was done without just cause or excuse. Id.
Whether a debtor's conduct is willful and malicious under section 523(a)(6) is a question of fact reviewed for clear error. Banks v. Gill Distrib. Ctrs., Inc. (In re Banks), 263 F.3d 862, 869 (9th Cir. 2001).
At trial, and in this appeal, Cagney has steadfastly insisted that he did not commit aggravated assault on Smith by pointing a shotgun at her. Whether he did or not is, of course, a straightforward question of fact.
The evidence before the bankruptcy court on remand included the record from the state court proceedings, the critical portions of which were Cagney's plea agreement in which he affirmed that he had committed the acts constituting an aggravated assault; the transcript of state court hearings at which Cagney changed his plea from not guilty to guilty as to the assault and confirmed to the state court that he had pointed a shotgun at Smith; and the state court's minute entry on the trial for damages in which the state court found that the damages were awarded only on the basis of the criminal actions for aggravated assault and disorderly conduct.
To rebut this extensive record from the state court, Cagney asserted in testimony in the bankruptcy court that he did not commit the aggravated assault of displaying and aiming a shotgun at Smith. He also offered the testimony of two of his children, neither of whom were present at the critical incident.
On this record, it is clear that the bankruptcy court was presented with two views of the evidence concerning whether Cagney had willfully and maliciously assaulted Smith. In response to the evidence, the bankruptcy court decided that it would " credit [Cagney's] admissions in state court in the criminal case over Cagney's denials before this court." This sort of credibility determination by the bankruptcy court on a question of fact is entitled to deference from this Panel. Rule 8013. Moreover, to the extent that the bankruptcy court was presented with two permissible views of the evidence, its choice between them cannot be clear error. Anderson v. City of Bessemer City, NC, 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). Thus, the bankruptcy court did not clearly err in determining that Cagney committed aggravated assault on Smith on September 16, 2001.
Based upon this factual finding, the bankruptcy court then determined that the damages resulting from the aggravated assault were nondischargeable under § 523(a)(6). The court examined the Arizona statutes relating to aggravated assault: A.R.S. § § 13-1203(A)(2) and 13-1204(A)(2) , which provide:
In its minute entry, the bankruptcy court incorrectly identified these statutes as found in title 12 of the Arizona Revised Statutes, instead of title 13. This was a harmless error. Title 13 is the Arizona Criminal Code, and the court correctly quoted the provisions of that title.
Assault; classification. A. A person commits assault by: . . . Intentionally placing another person in reasonable apprehension of imminent physical injury[.]
A.R.S. § 13-1204 was amended by the Arizona legislature by Ariz. Laws 2010, 2nd Reg. Sess., Ch. 241. However, the amendment did not affect § 13-1204(A)(2).
Aggravated assault; classification; definition. A. A person commits aggravated assault if the person commits assault as prescribed by section 13-1203 under any of the following circumstances: . . . . 2. If the person uses a deadly weapon or dangerous instrument.
A.R.S. § 13-1204(A)(2) These statutory provisions, together with the admissions and pleas of Cagney in the state and bankruptcy courts, meet the willful and malicious injury prongs of § 523(a)(6).
To prove willfulness, Geiger requires that the debtor act with a subjective motive to inflict injury or with a belief that injury is substantially certain to result from the conduct. 523 U.S. at 61. A guilty plea to a charge under A.R.S. § 13-1203(A)(2), even if not preclusive, certainly constitutes an admission by the criminal defendant of his intent to place a person in reasonable apprehension of physical injury. That " reasonable apprehension" is a mental injury under Arizona law. State v. Johnson, 205 Ariz. 413, 72 P.3d 343, 351 (Ariz. 2003) (reasonable apprehension of being shot is a mental injury). In addition, Cagney accomplished this intent by use of a " deadly weapon or dangerous instrument." Consequently, then, Cagney's guilty plea to aggravated assault represents evidence of Cagney's subjective motive to inflict injury on Smith by pointing the shotgun at her, thereby meeting Geiger's requirements for willfulness.
At trial, Cagney made a particularly telling admission during his testimony by stating " if you pull a gun on somebody, you use it. Period." Tr. Hr'g 27:18-19. In light of this statement, the bankruptcy judge explored Cagney's meaning:
THE COURT: At least in my experience, having been in the military, is that you may have a weapon, but you don't always use it. Which seems somewhat contradictory to what you just told me. So if you would, I want you to educate me [as to] what you meant by that statement.
CAGNEY: Well, we were pretty much trained that if you pointed a gun [] if you were going to point a gun at somebody, you used it.
THE COURT: Okay. So you meant, if you pointed it at somebody --
CAGNEY: Yes, sir.
THE COURT: -- then there was the intention --
CAGNEY: Certainly, yes sir.
THE COURT: -- to utilize. Not necessarily that if you had it in your possession you were going to use it. Correct?
CAGNEY: That is correct.
Hr'g Tr. 28:12-29:6.
It is not clear why Cagney made this statement, obviously relating to his intent in pointing the gun at Smith. But whatever Cagney's reasons for his testimony, this statement constitutes probative evidence that his conduct on September 16 was willful.
For Cagney's conduct to be malicious, Smith must prove that he: (1) committed a wrongful act; (2) intentionally; (3) which necessarily causes injury; and (4) without just cause or excuse. In re Su, 290 F.3d at 1143. As a felony punishable under Arizona law by incarceration for up to eight years, by definition, aggravated assault is a wrongful act. Cagney's guilty plea is evidence that he intended to assault Smith. That guilty plea is also an admission that Cagney placed Smith in reasonable apprehension of physical injury, which itself constitutes an injury under Arizona law. And, finally, Cagney has not suggested that the assault was justified. Based on this record, we conclude that the bankruptcy court did not err in ruling that Cagney's aggravated assault on Smith constituted the type of willful and malicious injury not dischargeable in bankruptcy under § 523(a)(6).
Cagney objects that the bankruptcy court improperly excluded the results of his polygraph examination that he offered to support his credibility. However, the polygraph test results were not sponsored by sworn statements or testimony from the examiner and are thus unauthenticated and inadmissible under Fed.R.Evid. 901. A decision to exclude evidence for lack of authentication " rests in the sound discretion of the court." Gates v. Rivera, 993 F.2d 697, 700 (9th Cir. 1993). Second, the bankruptcy court correctly ruled that the unsworn polygraph was a " statement by somebody who's not on the witness stand, " and inadmissible as hearsay under Fed.R.Evid. 802. Hr'g Tr. 13:24-14:1. Third, the bankruptcy court did not consider polygraph results admissible as probative of the veracity of the examinee. Hr'g Tr. 14:2-4; see Goel v. Gonzales, 490 F.3d 735, 739 (9th Cir. 2007)(" There is simply no consensus that polygraph evidence is reliable. To this day, the scientific community remains extremely polarized about the reliability of polygraph techniques." (quoting United States v. Scheffer, 523 U.S. 303, 309, 118 S.Ct. 1261, 140 L.Ed.2d 413 (1998))); see also United States v. Benavidez-Benavidez, 217 F.3d 720, 724 (9th Cir. 2000); United States v. Falsia, 724 F.2d 1339, 1341 (9th Cir. 1983) (" With the polygraph's misleading reputation as a 'truth teller, ' the widespread debate concerning its reliability, the critical requirement of a competent examiner and the judicial problems of self-incrimination and hearsay, a trial court will rarely abuse its discretion by refusing to admit the evidence, even for a limited purpose and under limited conditions."). The bankruptcy court therefore did not abuse its discretion in declining to admit the test results. Benavidez-Benavidez, 217 F.3d at 725 (trial court has " wide discretion" to exclude polygraphic evidence).
Cagney also asserts that the bankruptcy judge was prejudiced against him and asks that we vacate the judgment and remand this matter to another judge. We have carefully examined the record presented to us and find no evidence of bias or prejudice by the bankruptcy court. A finding of judicial bias must usually stem from some personal interest in the case or an extrajudicial source. Liteky v. United States, 510 U.S. 540, 552-53, 114 S.Ct. 1147, 127 L.Ed.2d 474 (1994). There is no evidence in the record before us that the bankruptcy judge had any personal interest, financial or otherwise, in this case. The " extrajudicial source" rule is implicated when bias originates outside the courtroom. United States v. Grinnell Corp., 384 U.S. 563, 583, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966) (explaining that the " alleged bias and prejudice to be disqualifying must stem from an extrajudicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case."). Here, there is no indication the bankruptcy judge's opinions were based on any information or events originating outside the bankruptcy court proceedings.
CONCLUSION
We AFFIRM the judgment of the bankruptcy court.