39 F.

3d 37
63 USLW 2350, 26 Bankr.Ct.Dec. 304, Bankr.
L. Rep. P 76,183

Richard PICCICUTO d/b/a Sheehan's Cafe, PlaintiffAppellant,

v.
Ralph E. DWYER, Defendant-Appellee.
Richard PICCICUTO, Plaintiff-Appellant,
v.
Linda L. REX, Defendant-Appellee.
Nos. 94-1726, 94-1735.

United States Court of Appeals,

First Circuit.
Heard Oct. 4, 1994.
Decided Nov. 9, 1994.

Steven Weiss, with whom Shatz, Schwartz and Fentin, P.C., Springfield,
MA, Richard M. Howland, and Law Offices of Richard M. Howland,
Amherst, MA, were on brief for appellant, David J. Noonan, with whom
Cohen, Rosenthal, Price, Mirkin & Wernick, Springfield, MA, for trustee
in bankruptcy.
John A. Burdick, Jr., with whom Burdick & DiLeo, P.C., Worcester, MA,
was on brief for appellees.
Before CYR, Circuit Judge, BOWNES, Senior Circuit Judge, and
McAULIFFE* , District Judge.
BOWNES, Senior Circuit Judge.

Creditor-appellant Richard M. Piccicuto commenced this adversary proceeding

in the bankruptcy court which sought to have a judgment debt owed him by
debtors-appellees Ralph E. Dwyer and Linda Rex ("the landlords") declared
nondischargeable under 11 U.S.C. Sec. 523(a)(6) (1989).1 Subsequently, he
filed a motion for summary judgment on his claim. The bankruptcy court not

only denied his motion, it sua sponte granted summary judgment to the
landlords. The district court affirmed. Because we find that summary judgment
should have been entered for Piccicuto, and not against him, we reverse.
I.
2

Throughout 1984 and 1985, the landlords owned commercial rental property
("the property") in Northampton, Massachusetts. Ralph Dwyer's son, Jeffrey
Dwyer, managed the property. During that same time period, Richard Piccicuto
owned and operated Sheehan's Cafe, Inc., which was a tenant of several units
(including two basement units) of the property. Until July 13, 1984, when the
parties executed leases for these basement units, Sheehan's had been a tenantat-will therein.

On July 20, 1984, Jeffrey Dwyer met with Timothy and Paul Driscoll, who had
been negotiating with Piccicuto for the purchase of Sheehan's. At that meeting,
the Driscolls requested that the leases of the basement units be assigned to
them. Jeffrey Dwyer not only declined this request, he denied the existence of
the leases. When the Driscolls reported this to Piccicuto, he telephoned Jeffrey
Dwyer, who informed him that the 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 business by placing listings with
brokers. Jeffrey Dwyer interfered with these efforts by telephoning the brokers
and informing them that the leases were invalid, void, or in litigation. As a
result, the brokers withdrew from listing and showing the property. During this
same time period, whenever Piccicuto's rent payments were a day or so late,
Jeffrey Dwyer deluged him with notices of breach, notices of termination, and
notices to quit. He also commenced a barrage of noise complaints to the police,
none of which was substantiated to the point of police or court action. In
addition, in January 1985, the landlords initiated what became series of eviction
proceedings against Piccicuto. All of these proceedings eventually concluded
with judgments in Piccicuto's favor.

Piccicuto was not able to sell the property and, on July 8, 1985, filed for
protection under Chapter 11 of the Bankruptcy Code. Subsequently, in
September 1985, he filed an action in Massachusetts Superior Court against
Jeffrey Dwyer and the landlords which sought damages for, inter alia,
intentional interference with an advantageous business relationship and unfair
trade practices in a commercial context. See Mass.Gen.L. ch. 93A, Sec. 2

(1993). The case went to trial in June 1989. Although all defendants were
represented at trial, only defendant Jeffrey Dwyer chose to appear and testify.
At the conclusion of the trial, the court submitted the common law intentional
interference claims to the jury on special questions, reserving to itself
Piccicuto's claims under ch. 93A. The jury returned a verdict in favor of
Piccicuto for $371,000. The court accepted this verdict and doubled it to
$742,000 under Mass.Gen.L. ch. 93A, Sec. 11 (1993), which directs courts to
award no less than double and no more than triple the actual damages resulting
from a "willful or knowing" violation of ch. 93A, Sec. 2. In conjunction with its
decision, the superior court issued a comprehensive memorandum detailing its
findings and rulings. The memorandum clearly states that "the defendants' acts
[were] willful, malicious and unjustified." Appendix at 151-52 (emphasis
supplied). The Massachusetts Appeals Court affirmed in all respects. Piccicuto
v. Dwyer, 32 Mass.App.Ct. 137, 586 N.E.2d 38 (1992).
6

Meanwhile, in September 1989, the landlords filed Chapter 11 petitions with

the United States Bankruptcy Court for the District of Massachusetts.
Subsequently, Piccicuto brought this adversary proceeding, and in due time
moved for summary judgment. As we have noted, Piccicuto argued that 11
U.S.C. Sec. 523(a)(6) precludes discharge of the $742,000 judgment debt. He
based his argument on two theories. First, Piccicuto contended that the doctrine
of collateral estoppel precluded the landlords from attacking in the bankruptcy
court the superior court's ch. 93A findings that they had acted willfully,
maliciously, and unjustifiably, and that these findings were, by virtue of
collateral estoppel, binding on the bankruptcy judge. See Grogan v. Garner, 498
U.S. 279, 285 n. 11, 111 S.Ct. 654, 658 n. 11, 112 L.Ed.2d 755 (1991)
(principles of collateral estoppel, as set forth in the Restatement (Second) of
Judgments Sec. 27, apply in dischargeability proceedings brought under Sec.
523(a)). In the alternative, Piccicuto asserted that even if Jeffrey Dwyer was the
only defendant who willfully and maliciously caused him injury, Jeffrey's
actions should be imputed to the landlords under a theory of vicarious liability.

The bankruptcy court rejected these arguments. For reasons that are not entirely
clear, it misapprehended the thrust of Piccicuto's first argument and looked only
to the special verdict questions submitted to the jury on Piccicuto's common
law claims. Relying on these questions, which referred only to actions taken by
Jeffrey Dwyer, the bankruptcy court held that "[i]t is undisputed that the
verdict and subsequent judgment was rendered against the [landlords] based
solely upon their vicarious liability flowing from the actions of Jeffrey Dwyer."
In re Rex, 150 B.R. 505, 506 (Bankr.D.Mass.1993). The bankruptcy court then
ruled that vicarious liability cannot support a finding that a debtor acted
willfully and maliciously for purposes of 11 U.S.C. Sec. 523(a)(6). Id. at 506-

07. Finding no genuine issue of material fact remaining for trial, the bankruptcy
court, acting sua sponte, entered judgment for the landlords. Id. at 507.
8

The district court to which Piccicuto appealed these rulings agreed with the
bankruptcy court's legal conclusion regarding vicarious liability under Sec.
523(a)(6). It also upheld as "not clearly erroneous" the bankruptcy court's
"finding" that the landlords' liability was based solely on the actions of their
agent, Jeffrey Dwyer. Accordingly, it affirmed the bankruptcy court's
judgment.

II.
9

On appeal to this court, Piccicuto makes three arguments. First, he renews his
argument that the findings of the superior court in connection with his ch. 93A
claim conclusively establish that the landlords themselves caused him willful
and malicious injury, as those terms are understood under 11 U.S.C. Sec.
523(a)(6). Next, he reiterates his alternative argument that vicarious liability
can support a finding of willfulness and maliciousness under Sec. 523(a)(6).
Finally, he contends that the district 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

10
11

We very recently elaborated upon the operation of summary judgment in

bankruptcy proceedings. See In re Varrasso, 37 F.3d 760, 762-63 (1st
Cir.1994). We need not, therefore, rehearse the relevant legal principles at great
length. Suffice it to say that our review of an order initially made under
Bankruptcy Rule 7056 (governing summary judgment in bankruptcy
proceedings) does not differ in any material respect from our review of an order
under Fed.R.Civ.P. 56. We review such an order de novo, determining whether
the lower courts have correctly assessed the record in deciding that genuine
issues of material fact do, or do not, remain for trial. See In re Varrasso, 37 F.3d
at 763. As always, in making this determination, we will read the record and
draw all reasonable inferences in the manner most favorable to the party
opposing summary judgment. Id.

B. Applying the Principles

12

As an initial matter, we note that the district court applied the wrong standard
of review in ruling upon Piccicuto's first argument. The bankruptcy court did

not make any findings of fact entitled to deference; instead, it merely stated its
reading of the superior court's opinion in the course of making a summary
judgment ruling. See id. at 763 and n. 2. The district court therefore should
have reviewed de novo the bankruptcy court's legal determination regarding the
effect of the superior court's findings.
13

Although we could remand to the district court for reconsideration under the
appropriate standard of review, doing so would serve no useful purpose. As we
explained in Varrasso: "The validity vel non of a summary judgment entails a
pure question of law and, therefore, we are fully equipped to resolve the
question as a matter of first-instance appellate review." Id. at 763. Accordingly,
we address on the merits Piccicuto's first appellate issue.

14

The easiest way to frame this issue is to note at the outset that which is not
disputed. First, there is no dispute that those issues necessarily determined by
the superior court in finding that the landlords and Jeffrey Dwyer had violated
ch. 93A, Secs. 2 and 11, are to be given effect in this proceeding. "When an
issue of fact or law is actually litigated and determined by a valid and final
judgment, and the determination is essential to the judgment, the determination
is conclusive in a subsequent action between the parties, whether on the same
or a different claim." Restatement (Second) of Judgments Sec. 27 (1982).

15

Nor is there any dispute that the findings the superior court necessarily made
under ch. 93A, Secs. 2 and 11,2 are tantamount to findings of "willful and
malicious" behavior under Sec. 523(a)(6). The landlords agree with Piccicuto
that, for an act to be willful and malicious under Sec. 523(a)(6), it must be
"deliberate," "wrongful," and "done without regard to its consequences," see
Brief of Appellees at 9-10, and that the superior court's findings conclusively
establish that Piccicuto was the victim of willful and malicious behavior under
this definition, see Brief of Appellees at 4 (conceding that Jeffrey Dwyer's
conduct was willful and malicious).3

16

Finally, there is no real dispute that, in its findings of fact on Piccicuto's ch.
93A claim, the superior court used language indicating that it was going
beyond theories of vicarious liability and holding the 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, Sec. 11] particularly
where, as here, the defendants' acts are willful, malicious and unjustified.");
Appendix at 152 n. 17 (describing the aforementioned "acts" as "[o]f active and
relentless campaign against [Piccicuto], and 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 and one bankruptcy court proceeding in which they, in the final
analysis were not successful"); Appendix at 153 ("[T]he conduct of all
defendants violated the generally accepted standards, falling outside the
penumbra of established concepts of fairness. It may be fairly characterized as
unethical, unscrupulous, [and] causing substantial injury to [Piccicuto and his
business].") (emphases supplied).
17

There is, however, vehement disagreement about the real meaning of the
superior court's findings on Piccicuto's ch. 93A claim. Piccicuto contends that
the superior court meant exactly what it said: that the landlords themselves
acted willfully and maliciously towards Piccicuto and his business. The
landlords, for their part, assert that the court could not have meant what it said-or more precisely, that the court used regrettably loose language in describing
their "acts" and "conduct"--because there was no evidence that they acted
against Piccicuto in any way. In so doing, the landlords paint themselves as
absentee owners who recklessly failed to supervise their out-of-control, on-site
agent.

18

Leaving aside the question of whether the principles underlying the issue
preclusion doctrine allow us to go beyond the unambiguous findings of a state
court judge and assess whether there was a factual foundation for the findings,
we find the landlords' reading of the state court record to be myopic. While the
landlords may not have personally led the charge against Piccicuto, they
themselves brought at least two eviction proceedings against him when he was
trying to save his deal with the Driscolls and/or otherwise sell his business. The
superior court made it clear that these eviction proceedings, which ended in
judgments for Piccicuto, were an integral part of the campaign of harassment
and intimidation underlying its finding that "all defendants," by their "conduct,"
violated ch. 93A, Secs. 2 and 11. See Appendix at 151.4 In our view, this ends
the matter; the superior court's unambiguous and factually supported findings
must be 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.
19

For the reasons stated above, the bankruptcy court erred in awarding summary
judgment to the landlords and in not awarding summary judgment to Piccicuto.
It follows that the district court erred in affirming the bankruptcy court's
mistaken order. We therefore reverse the judgment below and enter summary
judgment for Piccicuto.

20

So ordered.

Of the District of New Hampshire sitting by designation

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."

Under ch. 93A, Sec. 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,
22 Mass.App.Ct. 672, 497 N.E.2d 19, 23, rev. denied, 398 Mass. 1105, 499
N.E.2d 298 (1986). Under ch. 93A, Sec. 11, the superior court necessarily
found that the landlords' and Jeffrey Dwyer's violation of ch. 93A, Sec. 2 was
willful. Wasserman, 497 N.E.2d at 24

We are aware that some federal courts seem to have construed 11 U.S.C. Sec.
523(a)(6)'s "willful and malicious" provision more strictly than the
Massachusetts courts have interpreted ch. 93A, Sec. 11's "willful or knowing"
provision. While we have been unable to locate any authority which reads ch.
93A, Sec. 11, as requiring an actual intent to injure, a few federal courts have
interpreted Sec. 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 Sec. 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.

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