In re Sicroff

Citation401 F.3d 1101
Decision Date23 March 2005
Docket NumberNo. 03-15610.,03-15610.
PartiesIn re Seth E. SICROFF, Debtor, Stephen C. Jett, Plaintiff-Appellant, v. Seth E. Sicroff, Defendant-Appellee, and Office of the United States Trustee, Trustee.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
401 F.3d 1101
In re Seth E. SICROFF, Debtor, Stephen C. Jett, Plaintiff-Appellant,
Seth E. Sicroff, Defendant-Appellee, and
Office of the United States Trustee, Trustee.
No. 03-15610.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted May 12, 2004.
Submission Withdrawn May 27, 2004.
Resubmitted February 9, 2005.
Filed March 23, 2005.

Page 1102

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.


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,

Page 1103

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 debt3 to Jett. At the hearing, Sicroff conceded

Page 1104

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 doubt that Debtor intentionally and repeatedly published his untrue statements about Plaintiff, the evidence tends to show that he believed those statements were true and, in his opinion, explained the real cause for the proposal to close the Geography Department.

. . . .

Secondly, objecting to the closing of the Geography Department and pointing out the perceived misconduct of University officials may be the "just cause and excuse" that would exonerate Debtor's actions. . . . Debtor did not make his statements to spite the Plaintiff, but to support the larger cause, at least in his mind, of unmasking the real reasons the University officials intended to eliminate the Geography Department. In that sense, at least, Debtor's actions were not malicious.

Jett filed a timely notice of appeal to the District Court, which affirmed. Jett timely appeals to this court.


"[A] central purpose of the [Bankruptcy] Code is to provide a procedure by which certain insolvent debtors can reorder their affairs, make peace with their creditors, and enjoy `a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.'" Grogan v. Garner, 498 U.S. 279, 286, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S.Ct. 695, 78 L.Ed. 1230 (1934)). It is only the "honest but unfortunate" debtor, however, who is entitled to an entirely unencumbered fresh start. Id. at 287, 111 S.Ct. 654. Accordingly, the Bankruptcy Code exempts certain debts from discharge. Such exceptions to discharge "should be confined to those plainly expressed," Kawaauhau v. Geiger, 523 U.S. 57, 62, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998) (quoting Gleason v. Thaw, 236 U.S. 558, 562, 35 S.Ct. 287, 59 L.Ed. 717 (1915)), and should "be strictly construed in order to serve the Bankruptcy Act's purpose of giving debtors a fresh start." Industrie Aeronautiche v. Kasler (Matter of Kasler), 611 F.2d 308, 310 (9th Cir.1979).

Section 523(a)(6) of the Bankruptcy Code provides one such express limitation: "(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) 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." 11 U.S.C. § 523(a)(6). Jett alleges that Sicroff's...

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