401 F.3d 1101 (9th Cir. 2005), 03-15610, In re Sicroff

Docket Nº:03-15610.
Citation:401 F.3d 1101
Party Name:In re Seth E. SICROFF, Debtor, Stephen C. Jett, Plaintiff-Appellant, v. Seth E. Sicroff, Defendant-Appellee, and Office of the United States Trustee, Trustee.
Case Date:March 23, 2005
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1101

401 F.3d 1101 (9th Cir. 2005)

In re Seth E. SICROFF, Debtor,

Stephen C. Jett, Plaintiff-Appellant,

v.

Seth E. Sicroff, Defendant-Appellee,

and

Office of the United States Trustee, Trustee.

No. 03-15610.

United States Court of Appeals, Ninth Circuit

March 23, 2005.

Argued and Submitted May 12, 2004.

Submission Withdrawn May 27, 2004.

Resubmitted Feb. 9, 2005.

As Amended April 11, 2005.

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Randall L. Wiens, Law Offices of Randall L. Wiens, Sacramento, CA, for the petitioner.

Daniel P. Whaley, Law Office of Daniel P. Whaley, Sacramento, CA, for the respondent.

Appeal from the United States District Court for the Eastern District of California; Lawrence K. Karlton, Senior Judge, Presiding. D.C. No. CV-02-00975-LKK.

Before: O'SCANNLAIN, SILER, [*] and HAWKINS, Circuit Judges.

O'SCANNLAIN, Circuit Judge.

We must decide whether a debt was nondischargeable under the Bankruptcy Act as one for willful and malicious injury when it arose out of a published defamatory letter from a graduate student to the Chancellor of the University of California at Davis.

I

Stephen C. Jett and Seth E. Sicroff were, respectively, a tenured professor and a graduate student in the Geography Department of the University of California at Davis. When the university proposed closing the department, Sicroff sent a letter, dated April 17, 1993, to the Chancellor and Deans of the university, with copies to the California Aggie, Sacramento Bee and Davis Enterprise newspapers, in which he purported to reveal the "real motivation" for closing the department. Sicroff's letter stated, in part, that:

Despite the substantial improvements that may be credited to Prof. Ives [and his new hires], the old guard of the geography department has plagued you with a continuous barrage of specious complaints about Prof. Ives. In particular,

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Prof. Stephen Jett and Prof. Conrad Bahre have been relentless in their accusations against the new chairperson, even while they themselves have been the subject of numerous and well-substantiated charges of unprofessional conduct.

Too weak to fire or even discipline tenured faculty, no matter how serious their misbehavior, you have taken this opportunity to rid yourself of a burr under your saddle. Shame on you, and shame on us all if we put up with it!

Based largely on the accusations against them contained in this letter, Professors Jett and Bahre filed two suits, which were later consolidated, against Sicroff and several other defendants alleging, among other injuries, slander, libel and intentional infliction of emotional distress. Before trial, the other defendants settled their claims with Jett and Bahre. Sicroff, however, refused to participate in the settlement and threatened to sue Jett and Bahre with malicious prosecution if they dismissed their claims against him. 1

After the partial settlement, the Sacramento County Superior Court referred the remaining claims to binding arbitration before retired Sacramento Superior Court Judge Benjamin A. Diaz, who found that Sicroff had made defamatory statements against Jett and Bahre. On April 23, 1996, the court entered awards for Bahre of $34,500 (including $4,500 of punitive damages) and for Jett of $23,000 (including $3,000 of punitive damages). Sicroff appealed this finding and the awards to the Third District Court of Appeal, which reversed the judgment against him, ruling that the trial court had improperly denied him his right to a jury trial by ordering the matter to binding arbitration over his objection. On remand, the trial court refused to confirm the arbitration-based judgment and its decision was upheld on a second appeal, which the appellate court determined to be frivolous.

While this litigation was ongoing, Sicroff filed for bankruptcy. Jett and Bahre timely filed adversary complaints to determine dischargeability based upon their then-existing judgments against Sicroff and the bankruptcy court lifted its automatic stay to allow the completion of the state court litigation between the parties. Following a second remand to the state trial court, a settlement conference was conducted, at which Sicroff failed to appear. 2 After the collapse of the settlement conference, the state court trial proceedings were stayed pending resolution of the bankruptcy proceeding that gives rise to this appeal.

On February 28, 2002, the bankruptcy court held a hearing limited to the issue of the dischargeability of Sicroff's debt 3 to Jett. At the hearing, Sicroff conceded

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that his conduct was "willful and intentional" but denied that it was "malicious."

In a memorandum order, the bankruptcy court found Sicroff's debt to Jett to be dischargeable. In pertinent part, it reasoned that:

First of all, it is clear from ... the April 17, 1993 letter, that the primary purpose of Debtor's actions was to protest the closing of the Geography Department at the University of Davis. While there can be no...

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