Barboza v. New Form, Inc. , 545 F.3d 702 ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In the Matter of: ANTONIO 
BARBOZA; LUCIA ALBARRAN,
Debtors.
No. 06-56319
ANTONIO BARBOZA; LUCIA
ALBARRAN,  BAP No.
C-05-01398-MaSPa
Appellants, OPINION
v.
NEW FORM, INC.,
Appellee.

Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Pappas, Marlar, and Smith, Bankruptcy Judges, Presiding
Argued and Submitted
April 11, 2008—Pasadena, California
Filed September 23, 2008
Before: William C. Canby, Jr. and Jay S. Bybee,
Circuit Judges, and Roger Hunt,* Chief District Judge.
Opinion by Judge Hunt
*The Honorable Roger Hunt, Chief United States District Judge for the
District of Nevada, sitting by designation.
13411
13414 IN THE MATTER OF BARBOZA
COUNSEL
Colin W. Wied, C.W. Wied Professional Corporation, San
Diego, California, for the appellants.
Richard L. Weiner and Paul J. Laurin, Weiner & Laurin, LLP,
Encino, California, for the appellee.
OPINION
HUNT, District Judge:
I. OVERVIEW
Lucia Munguia Albarran (“Albarran”) and her husband,
Antonio Barboza (“Barboza”) (collectively “Appellants”),
were found liable after a jury trial in District Court for willful
infringement of New Form, Inc.’s (“Appellee”) copyright for
certain Spanish language films. The District Court instructed
the jury that “willful infringement” required a showing by a
preponderance of the evidence that Appellants “knew that
they were infringing the [Appellee’s] copyrights or that they
IN THE MATTER OF BARBOZA 13415
acted with reckless disregard as to whether they were doing
so.” After judgment was entered, Appellants filed for bank-
ruptcy and sought to discharge the judgment award. The
Bankruptcy Judge held on summary judgment that the judg-
ment award was nondischargeable under 11 U.S.C.
§ 523(a)(6) as a “willful and malicious injury” based upon the
jury’s finding of willful infringement and uncontroverted evi-
dence of Appellants’ knowledge of Appellee’s copyright
interest.
The BAP affirmed and held that a statutory award of dam-
ages for willful copyright infringement is a debt for a “cate-
gorically harmful activity,” which is nondischargeable under
§ 523(a)(6) “if the Bankruptcy Court determines that the
infringer had the requisite subjective intent to injure another’s
property interest.” The BAP held that the uncontroverted evi-
dence of knowledge of the creditor’s copyright interest at the
time of infringement was proof of their “substantial certainty”
of resultant harm.
We now REVERSE and REMAND for further consider-
ation because: (1) there is a genuine issue of material fact as
to whether the infringement was a “willful” injury within the
meaning of § 523(a)(6) of the Bankruptcy Code; and (2) the
“malicious” requirement was not addressed separately from
the “willfulness” requirement as required by our precedent.
II. FACTS AND PROCEEDINGS BELOW
Appellants operated a business for the duplication, distribu-
tion, and sale of Spanish language films. This case concerns
ten films known as the India Maria Pictures. On May 15,
1999, Appellee acquired the exclusive rights to manufacture,
sell, and distribute the India Maria Pictures. Before Appellee
acquired its exclusive rights, Appellants purchased a large
amount of inventory of India Maria Pictures from Million
Dollar Video Corp. (“Million Dollar Video”).
13416 IN THE MATTER OF BARBOZA
In late summer 1999, Appellee learned that Appellants
were selling the India Maria Pictures. Appellee sent Appel-
lants a letter, dated September 3, 1999, advising them of
Appellee’s exclusive right to duplicate and sell the India
Maria Pictures. After receiving this letter, Appellants alleg-
edly ordered 500 VHS tape copies of the India Maria Pictures
be made by Reel Picture Productions, LLC (“Reel Picture”)
on or about September 9, 1999.
Albarran responded to Appellee by letter, on September 17,
1999, stating that Appellants: (1) did not know about Appel-
lee’s exclusive rights prior to receiving the September 3 letter;
(2) were selling inventory of India Maria Pictures legally pur-
chased from Million Dollar Video; and (3) were willing to
commence business negotiations with Appellee.
Appellee sent a final warning letter on December 9, 1999.
Appellants continued to sell the India Maria Pictures until
March 20, 2002, when Appellee filed a lawsuit against Appel-
lants in the U.S. District Court for the Central District of Cali-
fornia for willful copyright infringement (the “District Court
Action”). The complaint in the District Court Action alleged
that Appellants willfully infringed Appellee’s copyright in the
India Maria Pictures beginning on or after May 15, 1999, and
ending in 2002. However, the evidence presented at the trial
concerned only the September 9, 1999, duplication immedi-
ately following the Appellee’s first warning letter to Appel-
lants.
A jury trial was held in April 2004, on the infringement by
duplication issue.1 The jury was instructed on “willful”
infringement as follows:
1
Infringement by duplication was the only issue resolved in the District
Court Action. In regards to the sale and distribution infringement claim,
the District Court found that summary judgment was “not appropriate”
because Appellee had not rebutted Appellants’ evidence that they lawfully
sold and distributed the India Maria Pictures obtained from Million Dollar
Video, under the “first sale doctrine.” Although the distribution issue was
also reserved for trial, it was not resolved.
IN THE MATTER OF BARBOZA 13417
To prove willful infringement, the Plaintiff must
prove by a preponderance of the evidence that the
Defendants knew that they were infringing the Plain-
tiff’s copyrights or that they acted with reckless dis-
regard as to whether they were doing so. If you
conclude that the Defendants reasonably and in good
faith believed that they were not infringing the Plain-
tiff’s copyrights, then you may not find that they
willfully infringed those copyrights.
The jury returned special verdicts finding that both Albarran
and Barboza had willfully infringed Appellee’s copyright in
each of the India Maria Pictures, and that Appellee should be
awarded statutory damages of $75,000 per video. Judgment
was entered on May 10, 2004, for $750,000, plus costs and
attorney’s fees; the final judgment amount was fixed at
$893,077.11.
Appellants filed a bankruptcy petition on May 28, 2004.
Appellee timely filed a complaint seeking to have the entire
judgment debt declared nondischargeable as a debt resultant
from a “willful and malicious” injury under 11 U.S.C.
§ 523(a)(6). Appellee promptly moved for summary judg-
ment, and requested that the Bankruptcy Court take judicial
notice of the record and judgment in the District Court
Action. In resolving the motion, the Bankruptcy Court held
that the District Court’s findings would be binding in the
Bankruptcy Action. The Bankruptcy Court stated that Albar-
ran was bound by the fact that she ordered the duplication of
the India Maria Pictures. However, because the jury instruc-
tion defined “willful” infringement as either “knowing” or
“reckless” conduct, it was irreconcilably ambiguous as to
whether the award fell within § 523(a)(6)’s meaning of “will-
fulness.” Therefore, the Bankruptcy Court reserved for trial
the issue of whether Appellants had the “subjective intent to
injure [Appellee] or its property, or subjective knowledge that
injury [was] substantially certain to result.”
13418 IN THE MATTER OF BARBOZA
Appellee subsequently moved for partial summary judg-
ment on the issue of subjective intent without presenting any
new evidence to the Bankruptcy Court. Appellants filed an
opposition, supported by affidavits, stating that someone else
ordered the duplication of the India Maria Pictures, and that
someone else received and diverted the finished product.
Appellants did not dispute the date of duplication or their
knowledge of Appellee’s copyright on or after September 3,
1999. Alternatively, they argued that the copyright violation
was merely “technical” because there was no evidence that
they sold the unlawfully duplicated copies rather than the
inventory they had legally purchased from Million Dollar
Video.
At the August 22, 2005, hearing on the motion for partial
summary judgment, the Bankruptcy Court concluded that
there was uncontroverted evidence that Appellants knew of
Appellee’s copyright, and in combination with the jury find-
ing of willful infringement, that the infringement constituted
a willful injury within the meaning of § 523(a)(6). A judg-
ment of nondischargeability was therefore entered in the sum
of $893,077.11. Appellants timely appealed the order and
judgment to the BAP.
The BAP affirmed the Bankruptcy Court. The BAP implied
“maliciousness” from the Bankruptcy Court’s finding of will-
fulness. The BAP reasoned that “an award of statutory dam-
ages based on willful copyright infringement is a debt for an
injury to the owner’s property interest.” Accordingly, the
BAP reasoned that “[t]he only remaining proof required was
that Debtors were aware of Appellee’s copyright at the time
they infringed it.” The BAP also found that the September 3,
1999, letter gave Appellants actual knowledge that their
infringement was “substantially certain” to cause harm to
Appellee.
III. ANALYSIS
We review decisions of the BAP de novo, applying the
same standard of review that the BAP applied to the bank-
IN THE MATTER OF BARBOZA 13419
ruptcy court’s ruling. Wood v. Stratos Prod. Dev. (In re Ahaza
Sys., Inc.), 482 F.3d 1118, 1123 (9th Cir. 2007). Whether a
claim is nondischargeable presents mixed issues of law and
fact and is also reviewed de novo. Murray v. Bammer (In re
Bammer), 131 F.3d 788, 791-92 (9th Cir. 1997) (en banc).
1. Willful and Malicious Injury Under 11 U.S.C.
§ 523(a)(6)
[1] Section 523(a)(6) of the Bankruptcy Code provides that
an individual debtor may not discharge a debt “for willful and
malicious injury by the debtor to another entity or to the prop-
erty of another entity.” (emphasis added). The malicious
injury requirement is separate from the willful injury require-
ment. Carrillo v. Su (In re Su), 290 F.3d 1140, 1146-47 (9th
Cir. 2002) (conflating the two requirements is grounds for
reversal); see also Jett v. Sicroff (In re Sicroff), 401 F.3d
1101, 1105 (9th Cir. 2005) (“We analyze the willful and mali-
cious prongs of the dischargeability test separately.”). A
“willful” injury is a “deliberate or intentional injury, not
merely a deliberate or intentional act that leads to injury.”
Kawaauhau v. Geiger, 523 U.S. 57, 61 (1998) (emphasis in
original). “A ‘malicious’ injury involves ‘(1) a wrongful act,
(2) done intentionally, (3) which necessarily causes injury,
and (4) is done without just cause or excuse.’ ” In re Su, 290
F.3d at 1146-47 (quoting Petralia v. Jercich (In re Jercich),
238 F.3d 1202, 1209 (9th Cir. 2001)).
A. Willfulness
This case comes on appeal as a result of a summary judg-
ment entered by the Bankruptcy Court. We review a grant of
summary judgment de novo. Margolis v. Ryan, 140 F.3d 850,
852 (9th Cir. 1998).
i. Summary Judgment Standard
In adversary proceedings before the bankruptcy court, the
familiar summary judgment standard established in Federal
13420 IN THE MATTER OF BARBOZA
Rule of Civil Procedure 56 applies. See Fed. R. Bankr. P.
7056; North Slope Borough v. Rogstad (In re Rogstad), 126
F.3d 1224, 1227 (9th Cir. 1997). Summary judgment is proper
when “the pleadings, the discovery and disclosure materials
on file, and any affidavits show that there is no genuine issue
as to any material fact and that the movant is entitled to judg-
ment as a matter of law.” Fed. R. Civ. P. 56(c). An issue is
“genuine” only if there is a sufficient evidentiary basis on
which a reasonable fact finder could find for the nonmoving
party, and a dispute is “material” only if it could affect the
outcome of the suit under the governing law. Anderson v. Lib-
erty Lobby, Inc., 477 U.S. 242, 248 (1986). The party moving
for summary judgment has the burden of showing the absence
of a genuine issue of material fact. Id. at 256-57. The court
must view all the evidence in the light most favorable to the
nonmoving party. County of Tuolumne v. Sonora Cmty.
Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).
In response to a properly submitted summary judgment
motion, the burden shifts to the opposing party to set forth
specific facts showing that there is a genuine issue for trial.
Henderson v. City of Simi Valley, 305 F.3d 1052, 1055-56
(9th Cir. 2002). The nonmoving party “may not rely on deni-
als in the pleadings but must produce specific evidence,
through affidavits or admissible discovery material, to show
that the dispute exists.” Bhan v. NME Hosps., Inc., 929 F.2d
1404, 1409 (9th Cir. 1991).
A court “generally cannot grant summary judgment based
on its assessment of the credibility of the evidence presented.”
Agosto v. INS, 436 U.S. 748, 756 (1978). “[A]t the summary
judgment stage the judge’s function is not himself to weigh
the evidence and determine the truth of the matter but to
determine whether there is a genuine issue for trial.” Ander-
son, 477 U.S. at 249.
We find that in viewing all facts and drawing all inferences
in the light most favorable to the Appellants, there is a genu-
IN THE MATTER OF BARBOZA 13421
ine issue of material fact as to whether Appellants acted will-
fully within the meaning of 11 U.S.C. § 523(a)(6), and thus
summary judgment was improper. Therefore, we reverse and
remand to the Bankruptcy Court to properly determine
whether there was a willful injury within the meaning of
§ 523(a)(6).
ii. Analysis
[2] The term “willful” as used in copyright infringement
cases is not equivalent to “willful” as used in determining
whether a debt is nondischargeable under the bankruptcy
code. The jury in the District Court Action found that the
Appellants willfully infringed Appellee’s copyright. As our
sister circuits have clearly recognized, a finding of “willful-
ness” in this context can be based on either “intentional”
behavior, or merely “reckless” behavior. See In re Seagate
Tech., LLC, 497 F.3d 1360, 1370 (Fed. Cir. 2007) (en banc);
Island Software & Computer Serv., Inc., v. Microsoft Corp.,
413 F.3d 257, 263 (2d Cir. 2005); Superior Form Builders,
Inc., v. Dan Chase Taxidermy Supply Co., 74 F.3d 488, 496
(4th Cir. 1996); Wildlife Express Corp., v. Carol Wright
Sales, Inc., 18 F.3d 502, 511 (7th Cir. 1994); RCA/Ariola
Int’l, Inc. v. Thomas & Grayston Co., 845 F.2d 773, 779 (8th
Cir. 1988). Accordingly, in the District Court Action, the jury
was instructed that the infringement was willful if Appellants
“knew that they were infringing the [Appellee’s] copyrights
or that they acted with reckless disregard as to whether they
were doing so.” The jury found that Appellants willfully
infringed Appellee’s copyright by making unlawful copies of
ten India Maria Pictures. However, the Bankruptcy Court had
no way to determine whether the jury found the willful
infringement based on a reckless disregard or a knowing vio-
lation of Appellee’s copyright.
[3] Even though recklessness is sufficient for a finding of
willful copyright infringement, the Supreme Court has clearly
held that injuries resulting from recklessness are not sufficient
13422 IN THE MATTER OF BARBOZA
to be considered willful injuries under § 523(a)(6) of the
Bankruptcy Code and are therefore insufficient to merit an
exemption to dischargeability. Geiger, 523 U.S. at 60-61. In
Geiger, the Supreme Court specifically limited “willful” inju-
ries under § 523(a)(6) to “deliberate or intentional” injuries.
Id. at 61. Therefore, if a finding of “willful” copyright
infringement is based merely on reckless behavior, the result-
ing statutory award would not fit within the § 523(a)(6)
exemption.
a. Summary Judgment in Bankruptcy Court
Appellee filed its first motion for summary judgment in the
Bankruptcy Court (“First Summary Judgment Motion”) on
February 11, 2005, to determine whether the statutory award
for “willful” copyright infringement, from the District Court
Action, was nondischargeable. At the hearing on the First
Summary Judgment Motion, the Bankruptcy Judge recog-
nized the potential question of fact that the jury verdict in the
District Court Action presented, and therefore discussed with
counsel how to prepare just “the intent issue, for trial.” In dis-
cussing why the issue of intent would be set for trial, rather
than determined on the First Summary Judgment Motion,
counsel for the Appellee asked: “The fact that through even
her [Albarran’s] testimony that she received this [September
3] letter, and thereafter on September 17th, provided that
response; that, just for clarification, doesn’t provide you what
is necessary with respect to her intent?” The court responded
clearly and correctly: “Not in the current context, no.”
The September 3, 1999, letter referenced by Appellee’s
counsel informed Appellants that Appellee was asserting an
exclusive right to duplicate and sell the films in question.
Appellants’ response letter dated September 17, 1999,
acknowledged Appellee’s assertion of exclusive rights to
duplicate and sell the videos in question. However, the Bank-
ruptcy Judge wisely found at the hearing on the First Sum-
mary Judgment Motion that, given the facially ambiguous
IN THE MATTER OF BARBOZA 13423
jury finding, a finding of the requisite intent could not be
determined based on the knowledge of the letter alone.
Thereafter, Appellee filed a subsequent motion for partial
summary judgment (“Second Summary Judgment Motion”),
which focused on the intent issue. At the hearing on that
motion, the Bankruptcy Judge admitted the difficulty of com-
ing to a decision concerning the matter: “Well, I have wres-
tled with this and gone back and forth.” As to whether the
willfulness found by the jury was based on reckless disregard
or intentional conduct the Bankruptcy Judge stated:
The Jury verdict doesn’t tell me which one they’re
looking at [reckless disregard or intentional], but the
evidence is uncontroverted that [Appellants] knew,
the April 19th letter. [sic] And I have to take the jury
finding that the copying occurred and combine that
with the uncontroverted evidence of the knowledge.
Now whether, as Mr. Quinton says, they [Appel-
lants] ultimately never received them, the copies
were diverted from [R]eel [P]ictures. Whether it was
Miguel who really did it, I don’t know the answer to
that.
But based upon all of this and my review, and
although I think it’s got some interesting questions
in it, I believe that summary judgment should be
granted for the [Appellee] . . . and I’ll sign an order
to that effect.2
2
We note that there is no “April 19th letter.” However, the Bankruptcy
Judge was most likely referring to the first warning letter sent to Appel-
lants dated September 3, 1999. This was the same letter that the Bank-
ruptcy Judge correctly held in the hearing on the First Motion for
Summary Judgment would be insufficient to help him determine the “will-
fulness” of Appellants’ infringement due to the blatant ambiguity in the
jury findings.
13424 IN THE MATTER OF BARBOZA
b. Question of Fact Remains as to Willfulness
[4] The Bankruptcy Judge clearly erred by inferring from
the jury’s finding of willful infringement that Appellants had
actually ordered the copying themselves. As principals in the
company, Appellants could be held liable for infringement
simply for failing to prevent copyright infringement. See Atl.
Recording Corp. v. Chin-Liang Chan (In re Chin-Liang
Chan), 325 B.R. 432, 448 (Bankr. N.D. Cal. 2005). For that
reason, the jury was instructed in the District Court Action
that: “A person is liable for copyright infringement by another
if the person has a financial interest and the right and ability
to supervise the infringing activity whether or not the person
knew of the infringement.”
[5] Appellants asserted in the District Court Action that
they did not order the copies but that the infringing videos
were ordered by Albarran’s brother, Miguel, who made it
appear that the videos were ordered by the Appellants. As
such, the jury in the District Court Action could have found
that the Appellants were liable for copyright infringement
because they failed in their supervisory role, that their failure
to supervise was reckless, and therefore that the infringement
was willful. Such a scenario would dictate that the injury was
not a “willful injury” under § 523(a)(6), even though it was
“willful” for purposes of the copyright violation. Given the
possibility that the jury found Appellants liable for willful
copyright infringement based on recklessness, there was no
basis in the record for the Bankruptcy Court to conclude that
the jury verdict in the District Court Action established that
the Appellants willfully violated the Appellee’s copyright for
purposes of § 523(a)(6). Because there was evidence that
could have led the jury in the District Court Action to deter-
mine that the infringement was reckless, the judgment in that
Action cannot sustain a summary judgment that the infringe-
ment was willful within the meaning of the Bankruptcy Code.
Moreover, the Appellants presented evidence to the Bank-
ruptcy Court that directly spoke to the issue of willfulness for
IN THE MATTER OF BARBOZA 13425
purposes of dischargeability. Albarran submitted a declaration
describing the business dispute that she had with her brother,
Miguel, how Miguel submitted the orders for the disputed
videos under the name of the Appellants’ business, and how
the Appellants did not order the disputed videos or receive
them. The Appellants also submitted a declaration from their
nephew, Francisco Albarran, which stated that Miguel made
the orders for the videos, that Francisco signed for the videos
when they were delivered to the Appellants’ residence in such
a way to indicate that they were received by the Appellants’
business, and that Francisco then delivered the disputed vid-
eos to Miguel. Francisco also declared that Miguel gave him
a box of tapes to give to Reel Pictures for duplication and that
those tapes were picked up from the Appellants’ residence.
[6] This explanation for what happened has some obvious
room for factual development, and the bankruptcy court
should not have weighed the evidence at the summary judg-
ment stage. See, e.g., Anderson, 477 U.S. at 249; Lippi v. City
Bank, 955 F.2d 599, 613 (9th Cir. 1992) (“[T]he district court
appears to have weighed the evidence before it; this role is
inappropriate at the summary judgment stage.”). The evidence
adduced by the Appellants demonstrates that there is a genu-
ine issue of material fact concerning whether the debt arising
from the copyright violation was willful under § 523(a)(6),
which precludes summary judgment on the issue of non-
dischargeability.
Appellee cites In re Chin-Liang Chan wherein the bank-
ruptcy judge found on summary judgment that Chan, the CEO
of Media Group, Inc. (“Media Group”), committed a willful
injury within the meaning of § 523(a)(6) because he did not
install certain measures to prevent the unauthorized copying
of copyrighted material. 325 B.R. at 448-49 (Bankr. N.D. Cal.
2005). However, In re Chin-Liang Chan is easily distin-
guished from the case before us. The In re Chin-Liang Chan
court made its decision only after a thorough and exhaustive
analysis of the evidence, and after showing that substantial
13426 IN THE MATTER OF BARBOZA
evidence was uncontroverted, such as: (1) as CEO of Media
Group, Chan was well aware of the infringement that was
occurring, and he was not doing anything to prevent it; (2)
Media Group admitted that it had reproduced copyrighted
material; (3) the Recording Industry Association of America
(“RIAA”) provided evidence to Media Group of its past
infringements as a result of a failure to implement basic safe-
guards; (4) the RIAA provided Media Group a toll free num-
ber to call if there was any question concerning a customer’s
right to order copies of certain products; (5) Media Group had
been trained on three separate occasions by the RIAA on how
to avoid future infringements; and (6) despite all this, Media
Group made no change in its production procedures. Id. at
444-49. Given that the abundant evidence in the In re Chin-
Liang Chan case was uncontroverted, the bankruptcy court
found that there were no genuine issues of material fact, and
that Chan’s infringement was done intentionally or with sub-
stantial certainty that harm would occur. Id. at 448. In the
instant action, in contrast, the Appellants have disputed who
ordered the copies and who caused them to be ordered, and
the jury verdict in the District Court Action could have been
based on a finding that Appellants were merely reckless. In re
Chin-Liang Chan thus provides no support for Appellee’s
contention that the District Court Action conclusively estab-
lished that the copyright violation was done willfully for pur-
poses of § 523(a)(6).
[7] The Appellants presented evidence in the District Court
Action which supported the theory that Miguel was actually
the person who ordered the videos. The jury’s finding of lia-
bility for the copyright violation in the District Court Action
thus may have been based on the jury’s conclusion that the
Appellants’ conduct was merely reckless. The Appellants
proffered that same evidence to the Bankruptcy Court, and the
Bankruptcy Court should have considered it when ruling on
the summary judgment motion. Because the evidence con-
cerning whether Miguel was the person who actually ordered
the tapes establishes a genuine issue of material fact as to the
IN THE MATTER OF BARBOZA 13427
element of willfulness for purposes of § 523(a)(6), we reverse
the grant of summary judgment and remand to the Bankruptcy
Court for further proceedings.
B. Was the Conduct Malicious?
In re Su established that the malicious injury requirement
of § 523(a)(6) must be determined separately from the willful
injury requirement. In re Su, 290 F.3d at 1146-47. In re Su
emphasized the necessity of completing a separate analysis on
the “malicious” prong of § 523(a)(6) by declining to make a
“malicious” finding and remanding to the bankruptcy court
for further analysis, even though the four “malicious” factors
might have been ascertained by examining the record. Id. at
1147; see also In re Sicroff, 401 F.3d at 1105 (“We analyze
the willful and malicious prongs of the dischargeability test
separately.”).
i. Reversible Error by the Bankruptcy Court
[8] The Bankruptcy Court in this case made no rulings as
to the “malicious” prong of § 523(a)(6). Appellee briefed the
malicious prong in its First Summary Judgment Motion in the
Bankruptcy Action. At the hearing on the First Summary
Judgment Motion the Bankruptcy Judge stated “I could not
grant summary judgment as to [intent]. I think you’ve got vir-
tually everything else lined up.” However, there is no discus-
sion on the record of what “everything else” refers to. The
Bankruptcy Court apparently considered the issue of whether
Albarran actually copied the tapes resolved by the District
Court Action. However, we do not know whether that issue
was all the Bankruptcy Court was referring to when it stated
“everything else [was] lined up.” A proposed order on the
First Summary Judgment Motion was submitted to the Bank-
ruptcy Judge that would have found “that all the elements of
§ 523(a)(6) have been established for the purposes of the Trial
of this matter except for the single element of ‘Intent.’ ” How-
ever, this proposed order was specifically rejected by the
13428 IN THE MATTER OF BARBOZA
Bankruptcy Court, and an alternative order was adopted
which only held in relevant part that: “The findings of the jury
and the judgment in the Federal Court action . . . bind this
Court and the parties, and shall not be re-litigated in this
adversary proceeding.” Because the District Court Action did
not address the “malicious” prong of § 523(a)(6), and the jury
made no findings in this regard, we cannot discover any sepa-
rate findings of uncontroverted fact of maliciousness by the
Bankruptcy Court.
ii. Reversible Error by the BAP
[9] Relying on Thiara v. Spycher Bros. (In re Thiara), 285
B.R. 420, 434 (9th Cir.BAP 2002), the BAP, perhaps in an
attempt to remedy the Bankruptcy Court’s lack of discussion
and findings concerning the “malicious” prong, found that
malice could be implied from willfulness. Although there may
be some overlap between the test for “willfulness” and the test
for “malice,” see Transamerica Commercial Finance Corp. v.
Littleton (In re Littleton), 942 F.2d 551, 554 (9th Cir. 1991)
(per curiam) (“[M]alice may be inferred from the nature of the
wrongful act.”), the overlap does not mean that the Bank-
ruptcy Court can ignore entirely the malice inquiry. We
require a separate analysis for each of the “willful” and “mali-
cious” prongs. See In re Sicroff, 401 F.3d at 1105 (“We ana-
lyze the willful and malicious prongs of the dischargeability
test separately.”); In re Su, 290 F.3d at 1146-47 (9th Cir.
2002) (rejecting an attempt to conflate the two prongs and
requiring a separate analysis as to each); In re Jercich, 238
F.3d at 1207-09 (treating the willful and malicious prongs
with separate analyses); In re Littleton, 942 F.2d at 554 (ana-
lyzing willfulness and maliciousness separately). The BAP’s
conclusion that the Appellants’ actions were malicious under
§ 523(a)(6) rested entirely on its conclusion that the Appel-
lants’ actions were willful under § 523(a)(6). Because we
have concluded that there is a genuine issue of material fact
as to willfulness, we similarly reverse the Bankruptcy Court’s
judgment with respect to maliciousness. On remand, the
IN THE MATTER OF BARBOZA 13429
Bankruptcy Court should conduct a separate inquiry concern-
ing malice. See In re Sicroff, 401 F.3d at 1105 In re Su, 290
F.3d at 1146-47; In re Jercich, 238 F.3d at 1207-09; In re Lit-
tleton, 942 F.2d at 554.
IV. CONCLUSION
We conclude that there is a question of material fact as to
whether the infringement was willful within the meaning of
11 U.S.C. § 523(a)(6). Furthermore, the Bankruptcy Court did
not separately analyze whether the infringement was mali-
cious within the meaning of 11 U.S.C. § 523(a)(6). Therefore,
we REVERSE the Bankruptcy Court’s determination on sum-
mary judgment and REMAND for a proper determination of
whether the infringement was willful and malicious within the
meaning of 11 U.S.C. § 523(a)(6).