In Re Mark Riso Shelly Riso, Debtors. Gary L. Snoke v. Mark Riso Shelly Riso

Gary Snoke appeals from the bankruptcy appellate panel (“BAP”) decision that affirmed the bankruptcy court’s grant of summary judgment in favor of Mark and Shelly Riso. Both the BAP and the bankruptcy court held that breach of the con tractual right of first refusal was not the sort of willful property damage that is excepted from discharge under 11 U.S.C. § 523 (a)(6). We affirm.

BACKGROUND

In 1982, Gary Snoke sold an apartment building to Eileen Walsh. In return Walsh gave Snoke a security agreement (a note secured by a deed of trust) that included a right of first refusal on resale. After consulting with Snoke, Walsh sold the building to Mark and Shelly Riso in 1984. As part of the transaction, the Risos signed a security agreement (again, a note secured by a trust deed) that gave Walsh a right of first refusal. However, Walsh was required to allow credit worthy new buyers to assume the obligation. Walsh later assigned the security agreement to Snoke.

The Risos violated the security agreement in 1985 by selling the building to Darrell Mitchell without telling Snoke or allowing him his right of first refusal. The Risos and Mitchell concealed this sale from Snoke by continuing…