USCA1 Opinion

UNITED STATES COURT OF APPEALS

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
____________________
No. 94-1726
RICHARD PICCICUTO D/B/A SHEEHAN'S CAFE,
Plaintiff-Appellant,
v.
RALPH E. DWYER,
Defendant-Appellee.
____________________
No. 94-1735
RICHARD PICCICUTO,
Plaintiff-Appellant,
v.
LINDA L. REX,
Defendant-Appellee.
___________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]

___________________
____________________
Before
Cyr, Circuit Judge,
_____________
Bownes, Senior Circuit Judge,
____________________
and McAuliffe*, District Judge,
______________
____________________

Steven Weiss, with whom Shatz, Schwartz and Fentin, P.C., Rich
_____________
________________________________ ____
M. Howland, and Law Offices of Richard M. Howland, were on brief
__________
_________________________________
appellant, David J. Noonan, with whom Cohen, Rosenthal, Price, Mir
_______________
____________________________
& Wernick for trustee in bankruptcy.
_________
John A. Burdick, Jr., with whom Burdick & DiLeo, P.C. was
_____________________
_______________________
brief for appellees.
____________________
November 9, 1994
____________________
__________________
*Of the District of New Hampshire sitting by designation.

BOWNES, Senior Circuit Judge.

BOWNES, Senior Circuit Judge.
_____________________

Creditor-appellant

Richard

M. Piccicuto commenced

the bankruptcy
owed him by

court which

this adversary proceeding in

sought to

debtors-appellees Ralph E.

have a

judgment debt

Dwyer and Linda

Rex

("the landlords") declared nondischargeable under 11 U.S.C.

523(a)(6)

(1989).1

Subsequently,

summary judgment on his claim.

he

filed

for

The bankruptcy court not only

denied his motion, it sua sponte granted

___ ______
the landlords.

a motion

summary judgment to

The district court affirmed.

Because we find

that summary judgment should have been entered for Piccicuto,

___
and not against him, we reverse.
I.
I.
__
Throughout
commercial

1984

and

1985,

rental property ("the

Massachusetts.
property.

During that

several

property.

landlords

owned

property") in Northampton,

Ralph Dwyer's son, Jeffrey Dwyer, managed the

same time period,

owned and operated Sheehan's Cafe,

of

the

units
Until

(including
July 13,

Richard Piccicuto

Inc., which was a

two basement

1984, when

units)

the parties

tenant
of

the

executed

leases for these basement units, Sheehan's had been a tenantat-will therein.
On July
and Paul

20, 1984,

Driscoll, who

Jeffrey Dwyer met

had been negotiating

with Timothy
with Piccicuto

____________________
1. Section 523(a)(6) precludes
the discharge of debts
incurred "for willful and malicious injury by the debtor to
another entity or to the property of another entity."

-33

for

the

purchase

Driscolls
assigned

of

Sheehan's.

that

meeting,

the

requested that the leases of the basement units be

to them.

request, he denied

Jeffrey Dwyer
the existence

Driscolls reported this to

Dwyer,

At

not

only declined

of the leases.

When

Piccicuto, he telephoned

who informed him that the

this
the

Jeffrey

contemplated deal with the

Driscolls was too good, and that there would be no assignment

unless he

and

the landlords

were

paid $50,000

up

front.

Piccicuto did not accede to Dwyer's demand.

For the ensuing ten months, Piccicuto attempted

to

rectify the situation with the Driscolls, and otherwise tried

to

sell

the

Jeffrey Dwyer

business

by placing

interfered with

the brokers and informing them

void,

or in litigation.

listings

these efforts

As a result,

Dwyer deluged

by telephoning

the brokers withdrew

During this same time

period, whenever Piccicuto's rent payments

Jeffrey

brokers.

that the leases were invalid,

from listing and showing the property.

late,

with

him

with

were a day or
notices of

so

breach,

notices

of

termination,

commenced a barrage
of

and

notices

of noise complaints to the

which was substantiated to

action.

In

to quit.

addition,

the point of

in

January

Piccicuto.

All

of

these proceedings

also

police, none

police or court

1985,

initiated what became series of eviction

He

the

landlords

proceedings against
eventually concluded

with judgments in Piccicuto's favor.

-44

Piccicuto was not able to sell the property and, on

July

8, 1985, filed for

Bankruptcy Code.
an action

protection under Chapter

Subsequently, in September

in Massachusetts

Superior

11 of the

1985, he filed

Court against

Jeffrey

Dwyer and the landlords which sought damages for, inter alia,
_____ ____
intentional

interference

relationship
context.

and

unfair

with

represented at

in June

advantageous

trade practices

See Mass. Gen. L.

___

went to trial

an

1989.

ch. 93A,
Although

in

2 (1993).

business
commercial
The case

all defendants

trial, only defendant Jeffrey

were

Dwyer chose to

appear
court

and testify.
submitted

At

the

the conclusion

common

law

of the

intentional

trial, the
interference

claims to the jury on special questions, reserving to

Piccicuto's
verdict in

claims
favor

under ch.
of

accepted this verdict

Gen. L. ch. 93A,
no

less than

court

issued

findings
"the

2.

Piccicuto

returned

for $371,000.

The

double

court

and doubled it to $742,000 under Mass.

and no

from a

more

than triple

"willful or knowing"

to award

the

actual

violation of

In conjunction with its decision, the superior

a

comprehensive

and rulings.

defendants'
__

unjustified."

The jury

11 (1993), which directs courts

damages resulting
ch. 93A,

93A.

itself

acts

The

memorandum

detailing

memorandum clearly

[were]

willful,

Appendix at 151-52 (emphasis

its

states that

malicious

and

supplied).

The

-55

Massachusetts

Appeals

Court

affirmed

in

all

respects.

Piccicuto v. Dwyer, 586 N.E.2d 38 (Mass. App. Ct. 1992).

_________

_____
Meanwhile, in

September 1989, the

Chapter 11 petitions with

for the District of

landlords filed

the United States Bankruptcy Court

Subsequently,

Piccicuto

brought this adversary proceeding, and in due time

moved for

summary judgment.
U.S.C.

Massachusetts.

As we have noted, Piccicuto argued that 11

523(a)(6)

judgment

debt.

He based

First, Piccicuto
estoppel

precludes
his

discharge

of

the

argument

on

two theories.

contended that the

precluded

bankruptcy court

the

landlords

doctrine of
from

the superior court's ch.

$742,000

collateral

attacking

in

the

93A findings that

they had acted willfully, maliciously, and unjustifiably, and

that these

findings were, by virtue

binding on the bankruptcy

judge.

of collateral estoppel,

See Grogan v.
___ ______

Garner, 498
______

U.S. 279, 285 n.11 (1991) (principles of collateral estoppel,

as set forth in
apply

in

dischargeability

523(a)).
Jeffrey

the Restatement (Second) of Judgments

brought

under

In the alternative, Piccicuto asserted that even if

Dwyer

was

maliciously caused
imputed

proceedings

27,

to

the

the

only defendant

him injury,
landlords

who

willfully

Jeffrey's actions

under

theory

of

and

should be
vicarious

liability.
The bankruptcy court rejected these arguments.
reasons that

are not

entirely clear, it

-66

For

misapprehended the

thrust of Piccicuto's first

special

verdict

questions

Piccicuto's common

verdict

court

flowing

Relying

to actions taken
held that

and subsequent

[landlords]

submitted

law claims.

which referred only

bankruptcy

argument and looked only

based

"[i]t

judgment

solely

upon

to

the

on

by Jeffrey Dwyer,

the

undisputed that

the

rendered against

the

is
was

their

D. Mass. 1993).

then ruled that vicarious

jury

on these questions,

vicarious

from the actions of Jeffrey Dwyer."

B.R. 505, 506 (Bankr.

to the

The

liability

In re Rex, 150
_________
bankruptcy court

liability cannot support a finding

that a debtor acted willfully and maliciously for purposes of

11 U.S.C.
issue of

523(a)(6).
material fact

Id. at 506-07.
___

Finding no genuine

remaining for trial,

the bankruptcy

court, acting sua sponte, entered judgment for the landlords.

___ ______
Id. at 507.
___
The
these

rulings

district court
agreed

conclusion regarding

with

to
the

which

Piccicuto

bankruptcy

vicarious liability under

appealed

court's

legal

523(a)(6).

It

also upheld

court's
solely

as

"not clearly

"finding" that
on

the

erroneous" the

the landlords'

actions

of

their

bankruptcy

liability was

agent,

Jeffrey

based
Dwyer.

Accordingly, it affirmed the bankruptcy court's judgment.

II.
II.
___
On
arguments.

appeal to

this

First, he renews

court, Piccicuto

makes

three

his argument that the findings

-77

of

the superior court in

connection with his

conclusively

establish that the

him

and

willful

malicious

understood under 11 U.S.C.

ch. 93A claim

landlords themselves caused

injury,

as

523(a)(6).

those

Next, he

terms

are

reiterates

his alternative argument that vicarious liability can support

a finding of willfulness and maliciousness under
Finally,

he

contends that

the

district

523(a)(6).

court abused

its

discretion in declining his request for oral argument in this

matter.

We need

not reach the merits of

Piccicuto's second

and third appellate arguments because we agree with his first

one.
A. Summary Judgment in Bankruptcy Proceedings
A. Summary Judgment in Bankruptcy Proceedings
______________________________________________
We very
summary

recently elaborated upon the

judgment

in

bankruptcy

Varrasso, No. 94-1583,

________
1994).

We need not,

principles
review of

at

great length.

Cir. Oct.

18,

Suffice

it

to say

that our

the

material fact
slip

in bankruptcy proceedings)

any material

determining

Varrasso,
________

In re
______

an order initially made under Bankruptcy Rule 7056

differ in

assessed

at 4-6 (1st

See
___

therefore, rehearse the relevant legal

order under Fed. R. Civ.

novo,
____

proceedings.

slip op.

(governing summary judgment

not

operation of

P. 56.

whether the

record

in

do, or do
op.

respect from

at

our review

We review such an
lower courts

does
of an

order de
__

have correctly

deciding that

genuine

not, remain for

trial.

See
___

In re
_____

in

making

this

5.

As

-88

always,

issues

of

determination,
reasonable

we

will

read

inferences in

the

record

the manner

party opposing summary judgment.

and

draw

most favorable

all

to the

Id.
___

B. Applying the Principles

B. Applying the Principles
___________________________
As

an initial

court applied
Piccicuto's

matter, we

the wrong standard

first argument.

note that

of review

The

in ruling

bankruptcy court

make any findings of fact entitled to

merely stated

de novo
__ ____

upon

did not

deference; instead, it

its reading of the superior court's opinion in

the course of making a summary judgment ruling.

and n.2.

the district

The district court therefore should

See id. at 6
___ ___
have reviewed

the bankruptcy court's legal determination regarding

the effect of the superior court's findings.

Although we could remand
reconsideration

under the

appropriate

doing so would serve no useful

Varrasso:
________

"The

validity

entails a pure question

equipped

to

resolve

instance appellate

to the district court for

standard of

purpose.

vel non
___ ___

As we explained

of

review."

Id.
___

as
at

a
6.

in

summary judgment

of law and, therefore, we

the question

review,

are fully

matter of

first-

Accordingly,

we

address on the merits Piccicuto's first appellate issue.

The easiest way to

frame this issue is to

note at

the outset
dispute

that which is

that

superior

those

court in

not disputed.

issues
finding

First,

necessarily
that the

there is no

determined

landlords and

by the
Jeffrey

-99

Dwyer

had violated

effect in
actually

ch. 93A,

this proceeding.
litigated

and

2 and

11, are

to be given

"When an issue of fact or law is

determined

by a

valid

and

final

judgment, and the determination is essential to the judgment,

the

determination

is

conclusive

the parties,

claim."

Restatement (Second) of Judgments

superior
are

is there

Piccicuto

subsequent

same

dispute that

or a

under

to

findings
523(a)(6).

of

"willful
The

action

different

27 (1982).
the findings

court necessarily made under ch. 93A,

tantamount

behavior

any

on the

between

Nor

whether

in

and

landlords

the

2 and 11,2
malicious"
agree

with

that, for an act to be willful and malicious under

523(a)(6),

it must be "deliberate,"

without regard to its consequences,"

"wrongful," and "done

see Brief of Appellees
___

at 9-10, and that

the superior court's findings conclusively

establish

that

Piccicuto

malicious

behavior

under

was
this

the victim

of

definition,

willful
see
___

Brief

and
of

____________________
2. Under ch. 93A,
2, the superior court necessarily found
that the landlords' and Jeffrey Dwyer's actions (1) were
outside the penumbra of established concepts of fairness; (2)
were unethical or unscrupulous; and (3) caused Piccicuto and
his
business
substantial injury.
See
Wasserman v.
___
_________
Agnastopoulos, 497 N.E.2d 19, 23 (Mass. App. Ct.), rev.
_____________
____
denied, 499 N.E.2d 298 (Mass. 1986). Under ch. 93A,
11,
______
the superior court necessarily found that the landlords' and
Jeffrey Dwyer's violation of ch. 93A,
2 was willful.
Wasserman, 497 N.E.2d at 24.
_________
-1010

Appellees at

4 (conceding

that Jeffrey Dwyer's

conduct was

willful and malicious).3

Finally,

there is

no

real dispute

that, in

its

findings of

fact on Piccicuto's ch. 93A

court

language indicating

used

theories

of vicarious

that

liability and

claim, the superior

it

was going

holding the

beyond

landlords

liable for their own acts and conduct towards Piccicuto.

___

See
___

Appendix at 151-52 ("[T]he damages awarded must be multiplied

under

[ch.

93A,

defendants' acts are

__

11]

particularly

where,

willful, malicious and

as

here, the

unjustified.");

Appendix at 152 n.17 (describing the aforementioned "acts" as

"[o]f active and relentless campaign against [Piccicuto], and
____________________
3. We are aware that some federal courts seem to have
construed 11 U.S.C.
523(a)(6)'s "willful and malicious"
provision more strictly than the Massachusetts courts have
interpreted ch. 93A,
11's "willful or knowing" provision.
While we have been unable to locate any authority which reads
ch. 93A,
11, as requiring an actual intent to injure, a few
federal courts have interpreted
523(a)(6) as imposing such
a requirement.
See In re Conte, 33 F.3d 303, 306-07 (3rd
___ ____________
Cir. 1994) (noting that the circuits have variously defined a
willful and malicious act under
523(a)(6) as a wrongful act
done with intent to injure, a wrongful act that will almost
certainly produce harm, and a wrongful act that has a high
probability of causing harm) (collecting cases); see also In
___ ____ __
re Scarlata, 979 F.2d 521, 536-39 (7th Cir. 1992) (Coffey,
___________
J., dissenting) (noting the same split in the circuits but
arguing that most courts have adopted a definition which, in
essence, looks to whether the debtor has acted in knowing
disregard of the rights of another and whether the debtor
should have foreseen that injury could occur) (collecting
cases).
At any rate, because this circuit has not yet passed on
this difficult and controversial issue, and because the
landlords have expressly
adopted Piccicuto's
favorable
construction of the statute, we decline to delve into it at
this time.
-1111

of

reckless disregard of the conduct of the business of this

property by the owners, who took no role in supervising, even

__ ___ ______
though

they were the parties in at least five separate state

court

proceedings

which

they, in

Appendix at
the

the

penumbra of

bankruptcy

final analysis

153 ("[T]he

generally

fairly

and one

were not

conduct of all
_______
___

accepted

standards,

established

concepts of

characterized

court proceeding

as

unethical,

in

successful");

defendants violated

falling

outside

fairness.

the

It may

unscrupulous,

be

[and]

causing substantial injury to [Piccicuto and his business].")

(emphases supplied).
There is, however,
real meaning of the
ch. 93A

claim.

meant exactly
acted willfully
business.

superior court's findings on Piccicuto's

Piccicuto
what it said:
and

vehement disagreement about the

contends that the

that the

landlords themselves
__________

maliciously towards

The landlords,

for their

superior court

Piccicuto and

part, assert

his

that the

court could not have meant what it said -- or more precisely,

that the court used

their "acts" and

regrettably loose language in describing

"conduct" -- because there was

that they acted against

____
the

landlords

paint

Piccicuto in any way.

themselves

as

recklessly failed to supervise their

no evidence
In so doing,

absentee

owners

who

out-of-control, on-site

agent.

-1212

Leaving

aside

the

question

of

whether

principles underlying the issue preclusion doctrine

to
and

the

allow us

go beyond the unambiguous findings of a state court judge

assess whether

findings, we find
record

to be

there was a

factual foundation

the landlords' reading of

myopic.

While

personally led the charge

the

for the

the state court

landlords may

not

have

against Piccicuto, they themselves

__________

brought at least two eviction proceedings against him when he

was

trying to

otherwise

sell

save

his

deal

his business.

with
The

the

Driscolls

superior court

and/or
made it

clear

that

these

judgments

for

campaign

of

finding that
ch.

eviction

Piccicuto,
harassment

proceedings,

were
and

an

integral

intimidation

"all defendants," by their

93A,

2 and 11.

this ends

the matter;

factually

supported findings

which

in

of

the

underlying

its

part

"conduct," violated

See Appendix at 151.4

___
the superior court's
must be

ended

In our view,
unambiguous and

given effect

in this

action.

Piccicuto therefore should have been awarded summary

judgment

on his claim that the $742,000 judgment debt is not

dischargeable in bankruptcy.
III.
III.
____
____________________
4. We note that the superior court's reference to the
eviction proceedings is preceded by a statement that the
proceedings were brought by Jeffrey as agent for debtors.
Piccicuto has documented, however, that this statement (and
____ _________
not the court's ultimate finding) was a slip of the pen.
Debtors themselves, as owners of the property, initiated the
eviction proceedings. See Appendix at 96-97.
___
-1313

For the reasons stated above,

erred

in awarding summary

judgment to the

not awarding summary judgment to

the district court erred
mistaken order.

Piccicuto.

landlords and in
It follows that

in affirming the bankruptcy court's

We therefore

reverse the judgment below and

enter summary judgment for Piccicuto.

So ordered.
So ordered.
__________

the bankruptcy court

-1414