By Ryan C. Wood

Good day my fellow human beings.  Soon some human may win a $1.9 billion Powerball Lottery drawing.  Amazing.  In the meantime, how can the actions of your minor child lead to you the parents filing for bankruptcy?  I try and explain do not judge bankruptcy filers.  You have no idea what came before the bankruptcy filing.

In this particular case during class at a junior high school, a 13-year-old minor child, Minor Child 1, held a pen positioned under minor child 2, Minor Child 2, so when Minor Child 2 went to sit down,  Minor Child 2 sat on the pen, alleged causing bodily injury and severe emotional distress to Minor Child 2.  I have to wonder if the pen went into the you know where place of Minor Child 2.  A puncture wound from a pen on a butt cheek may not rise to the level of Minor Child 2 suing Minor Child 1 and its parents.  I am using “it” given the appellate decision is silent on the sexes of the minor children involved in this incident.  Yes, this is the subject of a Ninth Circuit Bankruptcy Appellate Panel decision.

IN RE: Leo Del ROSARIO and Zerlyn Fonceca Del Rosario BAP No. CC-24-1163-SGL

Decided: May 02, 2025

So how does a state court lawsuit between parties lead to a bankruptcy filing?  Well, Minor Child 2 sued Minor Child 1 and both of Minor Child 1’s parents in Los Angeles Superior Court for battery and intentional infliction of emotional distress; the Rosario’s.  Sadly, at some point the Los Angeles Superior Court determined the Rosario’s did not obey discovery orders or cooperate with the discovery process and entered terminating sanctions.  This is a severe penalty and prevents the Rosario’s from continuing to defend the lawsuit.  As a result, Minor Child 2’s attorney requested the court enter a default judgment, and a default judgment was indeed entered against the Rosario’s totaling $1,045,609.46.  No evidence presented to prove any liability or calculate damages or actually litigate the issue at hand.  The fancy legal term at issue here is vicarious liability.  Making some party other than the bad actor, Minor Child 1, also liable for Minor Child 1’s, choosing to place a pen under another minor child when sitting down.  So the California Superior Court has no problem entering a default judgment under these facts totaling over $1 million dollars?  Does this not worry you?  Did a hearing take place to even determine damages?        

I do not know, and I am speculating, but I see this is really an issue of the economics of law.  Should the initial lawsuit be filed at all?  Were the injuries that serious?  Minor Child 2’s parents convinced an attorney to take this lawsuit on a contingency basis, most likely.  The attorneys will share in the judgment upon collection and the suing party does not have to come up with thousands of dollars to fund the lawsuit.  There are no contingency agreements for defense attorneys; just hourly rates and retainer payments to do work.  Defending any lawsuit these days is generally an expensive process.  A ten-thousand-dollar retainer is a good place to start.  I am speculating, and I do not know, but the Rosario’s were probably bombarded with discovery and could not keep up or the Rosario’s did not have an attorney at all and could not respond properly.  There are any number of scenarios that could result in a default judgment over $1 million dollars.  Not good for any human being though.

The Rosario’s Choose To File Chapter 7 Bankruptcy

Like almost every human on Earth facing a $1 million dollar plus judgment that was entered without proof of liability or proof of the amount of damage, filing bankruptcy becomes the prudent option.  The legal choice of following the Bankruptcy Code to obtain a discharge of personal liability for debts and claims.  The law. 

Just like:

The Archdiocese of San Francisco filed for Chapter 11 bankruptcy on August 21, 2023, in response to more than 500 lawsuits alleging child sexual abuse by clergy members

The Roman Catholic Diocese of Oakland filed for Chapter 11 bankruptcy in May 2023, overwhelmed by more than 300 lawsuits alleging child sex abuse by clergy members

The Roman Catholic Diocese of Santa Rosa filed for Chapter 11 bankruptcy on March 13, 2023, following an influx of child sexual abuse lawsuits

So, the Rosario’s are in good company filing for bankruptcy under the law, the Bankruptcy Code.

I usually look up the underlying bankruptcy petition to know the facts firsthand.  In this case it is not necessary.  Maybe the Rosario’s had other debts to discharge also.  Maybe the have a home or other assets that are exempted/protected.  I did not look up their income and expenses to see how this are going. 

What matters is Minor Child 2 continued the fight in the Chapter 7 bankruptcy case and let the judgment be discharged.  Back to the default judgment in the state court case.  The Ninth Circuit Bankruptcy Appellate Panel noted that Minor Child 2’s complaint did not provide facts in support of vicarious liability of the Rosario’s, parents of Minor Child 1, the pen placer, and the default judgment also contains no facts as to how the Rosario’s are vicariously liable for the acts of their child, Minor Child 1, the pen placer.

Filing An Adversary Proceeding In Chapter 7 Bankruptcy To Prove Debt Should Not Be Discharged

Section 523(a)(6) of the Bankruptcy Code excepts from discharge any debt for willful and malicious injury by the debtor to another entity or to the property of another entity. 

Minor Child 2 filed an adversary proceeding in the Rosario’s Chapter 7 bankruptcy case to try and prove the $1 million dollar plus default judgment is not dischargeable due to the willful and malicious conduct of the Rosario’s when their minor child placed a pen under another minor child allegedly resulting in bodily harm and severe emotional distress pursuant to Section 523(a)(6) of the Bankruptcy Code.

Minor Child 2’s first adversary complaint apparently also did not include an allegations of how the Rosario’s could be liable.  But Minor Child 2’s bankruptcy attorneys recognized this deficiency and amended the adversary complaint to include the Rosario’s are liable based on vicarious liability for the willful and malicious conduct of the  Rosario’s minor son.

Rosario’s bankruptcy attorneys countered and filed a motion to dismiss the case for failure to state a claim upon which relief can be granted.  Specifically arguing that the adversary complaint failed to state how the Rosario’s could possibly have the mental state or have inflicted injury themselves on Minor Child 2 when the default judgment specifically provides vicarious liability for the acts of their child, Minor Child 1.  

The Bankruptcy Court agreed and held the Rosario’s cannot possibly themselves committed any acts with intent to inflict injury or have a belief injury was substantially likely to occur.  Yeah, their minor child, Minor Child 1, the pen placer, was the willful and malicious actor.  The Bankruptcy Court did the right thing and dismissed the adversary lawsuit of Minor Child 2 without leave to amend; which means Minor Child 2’s quest to get money for sitting in the pen is officially over and there can be no amendments or changes to try and fix the complaint to determine the $1 million plus default judgment is not discharged in the Chapter 7 case.

But There Can Be An Appeal

The Ninth Circuit Court of Appeals agreed with the lower Bankruptcy Court and affirmed the dismissal of Minor Child 2’s adversary complaint.  Bankruptcy Code Section § 523(a)(6) requires that to render a debt nondischargeable the debtor, here the Rosario’s, must have the willful and malicious intent to injure as evidenced by the use of the phrase “by the debtor in Section 523(a)(6).  There is no mention of third-parties intent or actions in Section 523(a)(6) and the days of adding words to the Bankruptcy Code to achieve results are over.