Thomas Van Zandt v. Wileharda Mbunda

FILED
NOT FOR PUBLICATION APR 13 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: WILEHARDA KILIAN MBUNDA, No. 13-60002
DBA Gallery Twiga, AKA Twiga
Mbunda, BAP No. 11-1653
Debtor,
MEMORANDUM*
THOMAS VAN ZANDT, Executor for
Estate of Evaline Jeanne Malis,
Appellant,
v.
WILEHARDA KILIAN MBUNDA,
Appellee.
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Hollowell, Pappas, and Markell, Bankruptcy Judges, Presiding
Argued and Submitted March 11, 2015
San Francisco, California
Before: BERZON, BYBEE, and OWENS, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
The facts and procedural posture of this case are known to the parties, and
we do not repeat them here. Appellant Thomas Van Zandt appeals the Bankruptcy
Appellate Panel’s (BAP) affirmance of the bankruptcy court’s dismissal of his 11
U.S.C. § 523(a)(6) claim and its entry of judgment on partial findings in Wileharda
Kilian Mbunda’s (Appellee) favor on his 11 U.S.C. § 523(a)(2) claim. We have
jurisdiction under 28 U.S.C. § 1291, and we affirm.
First, Van Zandt argues that he could have amended his § 523(a)(6) claim to
allege that Mbunda violated California Welfare and Institutions Code § 15610.30
in acquiring the $200,000 loan from Van Zandt’s former mother-in-law, Evaline
Jeanne Malis. We review a Rule 12(b)(6) dismissal de novo, and a denial of leave
to amend for abuse of discretion. Ileto v. Glock Inc., 349 F.3d 1191, 1199 (9th Cir.
2003) (citation omitted); Theme Promotions, Inc. v. News Am. Mktg. FSI, 546 F.3d
991, 1000 (9th Cir. 2008).
The BAP correctly concluded that even if Van Zandt could allege a
§ 15610.30 violation, that offense is not a categorical match to § 523(a)(6) because
§ 523(a)(6) requires a higher mental state. Section 523(a)(6) requires a showing of
willful and malicious injury. Albarran v. New Form, Inc. (In re Barboza), 545
F.3d 702, 706 (9th Cir. 2008). By contrast, § 15610.30 merely requires a showing
that property was taken from an elder for a “wrongful use” or by “undue
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influence.” Cal. Welf. & Inst. Code § 15610.30(a). Even if Van Zandt could
prove that Mbunda exercised undue influence to get Malis’s money or that Mbunda
acquired the loan for a wrongful use, he would still fail to show that, at the time of
entering into the loan agreement, Mbunda willfully and maliciously intended to
injure Malis. Thus, the bankruptcy court did not err in dismissing this claim with
prejudice.
Second, Van Zandt argues that the bankruptcy court erroneously interpreted
Federal Rule of Evidence 807—the residual or catchall hearsay exception—by
stating that Van Zandt could not use Rule 807 “to trump a specific rule that works
against” him or “to get around a rule,” and he contends that this misinterpretation
resulted in the wrongful exclusion of various statements that Malis made to him in
2009 and 2010. We review de novo whether a lower court “correctly construed a
hearsay rule,” but we review the “exclusion of evidence under a hearsay rule for
abuse of discretion.” United States v. Ortega, 203 F.3d 675, 682 (9th Cir. 2000).
We agree that the bankruptcy judge misconstrued Rule 807.1 We have interpreted
Rule 807 to allow for the admission of any out-of-court statement, so long as the
1
The BAP found that a “fair reading of the entire record” showed that the
bankruptcy court properly applied Rule 807 in finding that Malis’s out-of-court
statements did not satisfy the rule’s requirements. But we read the trial transcript
differently. A full reading of the record shows that the bankruptcy court
misconstrued Rule 807 and failed to apply it correctly.
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statement meets the residual rule’s own articulated requirements. United States v.
Marchini, 797 F.2d 759, 763 (9th Cir. 1986) (declining to adopt the interpretation
of the residual hearsay exception that the bankruptcy judge did here).
We nevertheless agree with the BAP that the excluded statements do “not
contain the requisite guarantees of trustworthiness required for admission under the
catchall hearsay exception.” United States v. Angulo, 4 F.3d 843, 845 n.2 (9th Cir.
1993). For instance, Malis’s 2009 and 2010 statements to Van Zandt were not
made “under oath and subject to the penalty of perjury” nor were they recorded in
any way “which would allow the [judge] an opportunity to view [her] demeanor.”
See United States v. Sanchez-Lima, 161 F.3d 545, 547 (9th Cir. 1998). Malis made
these alleged statements shortly before her death, which occurred four or five years
after entering into the 2005 loan agreement with Mbunda. The lack of detail of the
proposed statements makes it impossible to tell when Malis thought that Mbunda
made the alleged representations; if Mbunda did in fact make false representations
to Malis, but she made them after receiving the loan proceeds, then that loan was
not “obtained by” false pretenses, as required by § 523(a)(2)(A). Finally, Malis’s
beliefs in 2009 and 2010 about her interest in the loan to Mbunda could have been
the result of a variety of factors not necessarily tied to proof of anything that
Mbunda represented to her in 2005.
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Therefore, despite its error in misconstruing Rule 807, the bankruptcy
court’s decision to exclude Van Zandt’s proposed statements was ultimately non-
prejudicial. See Johnson v. Neilson (In re Slatkin), 525 F.3d 805, 811 (9th Cir.
2008) (“To reverse on the basis of an erroneous evidentiary ruling, we must
conclude . . . that the [bankruptcy court’s] error was prejudicial.”).
AFFIRMED.
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