242 F.3d 382 (9th Cir. 2000), 99-55167, Matter of McKay

Docket Nº:99-55167.
Citation:242 F.3d 382
Party Name:In re: Dean W. MCKAY Debtor. James R. BUCHANAN, Plaintiff-Appellee, v. Dean W. MCKAY, Defendant-Appellant.
Case Date:November 03, 2000
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 382

242 F.3d 382 (9th Cir. 2000)

In re: Dean W. MCKAY Debtor.

James R. BUCHANAN, Plaintiff-Appellee,

v.

Dean W. MCKAY, Defendant-Appellant.

No. 99-55167.

United States Court of Appeals, Ninth Circuit

November 3, 2000

Submitted October 12, 2000. 2

D.C. No. CV-98-00670-TJW

Editorial Note:

This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)

Appeal from the United States District Court for the Southern District of California, Thomas J. Whelan, District Judge, Presiding.

Before B. FLETCHER, THOMAS, and WARDLAW, Circuit Judges.

MEMORANDUM 1

McKay appeals the district court's affirmance of the bankruptcy court's judgment that McKay's debt to Buchanan, established by a state court judgment, is nondischargeable under 11 U.S.C. § 523(a)(4) (Supp.2000). The parties are familiar with the factual and procedural history of this case; thus, we will not recount it here.

I

Because an adversary proceeding pursuant to 11 U.S.C. § 523 is a "core" bankruptcy proceeding, 28 U.S.C. § 157(b)(2)(I) (Supp.2000), the Rooker-Feldman doctrine does not preclude bankruptcy court jurisdiction. Gruntz v. County of Los Angeles (In re Gruntz), 202 F.3d 1074, 1078-79 (9th Cir.2000). The district court erred in holding otherwise.

II

As a general proposition, federal courts must give full faith and credit to state court proceedings. 28 U.S.C. § 1738 (1994); Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985). In addition, the doctrine of collateral estoppel applies to state court judgments in § 523(a) discharge exception proceedings. Grogan v. Garner, 498 U.S. 279, 285 n. 11 (1991).

In determining the collateral estoppel effect of a state court judgment, federal courts apply the collateral estoppel rules of the state in which they sit. 28 U.S.C. § 1738; Gayden v. Nourbakhsh (In re Nourbakhsh), 67 F.3d 798, 800 (9th Cir.1995). In California, collateral estoppel may be applied when: (1) the issue decided in the prior action is identical to the issue presented in the second action; (2) the issue was actually litigated in the prior action; (3) the issue was necessarily decided in the first action; (4) there was a final judgment on the merits; and (5) the party against whom estoppel is asserted...

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