Chunchai Yu v. Nautilus, Inc.
694 F. App'x 542
| 9th Cir. | 2017Background
- Chapter 7 debtor Chunchai Yu appealed pro se from the BAP’s affirmance of the bankruptcy court’s grant of summary judgment that Yu’s debt to Nautilus, Inc. is nondischargeable under 11 U.S.C. § 523(a)(6).
- Nautilus had obtained a federal district court default judgment against Yu; the bankruptcy court gave preclusive effect to the district court’s findings in the dischargeability proceeding.
- The bankruptcy court concluded Nautilus’s judgment established a willful and malicious injury by Yu, so the debt was excepted from discharge.
- Yu challenged the bankruptcy court’s summary judgment, the preclusive effect of the district court judgment, and raised ineffective-assistance-of-counsel and other arguments on appeal.
- The Ninth Circuit reviewed de novo the BAP and bankruptcy court rulings and affirmed, finding no genuine dispute of material fact and that issue preclusion properly applied.
Issues
| Issue | Plaintiff's Argument (Yu) | Defendant's Argument (Nautilus) | Held |
|---|---|---|---|
| Whether debt is nondischargeable under § 523(a)(6) (willful and malicious injury) | Yu argued the injury was not willful and malicious | Nautilus argued district court findings establish willful and malicious injury | Court: Liability is nondischargeable; Yu failed to raise a genuine factual dispute |
| Whether district court default judgment is issue-preclusive | Yu contended the district court judgment should not have preclusive effect | Nautilus argued prior federal judgment precludes relitigation of issues decided there | Court: Issue preclusion applies to the district court’s findings and was properly applied |
| Whether Yu is entitled to relief for ineffective assistance of counsel | Yu claimed ineffective assistance warrants overturning the bankruptcy ruling | Nautilus (and court) noted no constitutional right to counsel in civil cases | Court: Claim meritless; no right to counsel in civil bankruptcy dischargeability proceedings |
| Whether the appellate court may consider new arguments raised for first time on appeal | Yu presented new arguments on appeal | Nautilus opposed consideration of new arguments | Court: Did not consider arguments raised first on appeal; such arguments are forfeited |
Key Cases Cited
- Arrow Elecs., Inc. v. Justus (In re Kaypro), 218 F.3d 1070 (9th Cir. 2000) (standard of review for BAP and bankruptcy court decisions)
- Dias v. Elique, 436 F.3d 1125 (9th Cir. 2006) (issue preclusion: de novo review of availability; abuse of discretion to apply)
- Barboza v. New Form, Inc. (In re Barboza), 545 F.3d 702 (9th Cir. 2008) (elements of willful and malicious injury under § 523(a)(6))
- Grogan v. Garner, 498 U.S. 279 (U.S. 1991) (issue preclusion applies in § 523(a) discharge exception proceedings)
- Hydranautics v. FilmTec Corp., 204 F.3d 880 (9th Cir. 2000) (requirements for issue preclusion under federal law)
- Fed. Deposit Ins. Corp. v. Daily (In re Daily), 47 F.3d 365 (9th Cir. 1995) (federal law governs preclusion of prior federal judgments)
- United States v. Gottheiner (In re Gottheiner), 703 F.2d 1136 (9th Cir. 1983) (preclusive effect of federal default judgments where defendant actively litigated)
- Hedges v. Resolution Trust Corp., 32 F.3d 1360 (9th Cir. 1994) (no constitutional right to counsel in civil proceedings)
- Padgett v. Wright, 587 F.3d 983 (9th Cir. 2009) (appellate courts generally do not consider issues raised for first time on appeal)