Deocampo was awarded a $50,000 judgment personally against several Vallejo policemen who used excessive force in his arrest. The arrest occurred before Vallejo filed its Chapter 9 bankruptcy petition, but the judgment was entered after its Chapter 9 plan was confirmed, discharging Vallejo from pre-petition debts except as otherwise provided in is Chapter 9 plan. The police officers were properly denied relief from the judgment against them. The judgment under 42 USC 1983 was rendered against them personally, not against Vallejo, even if Vallejo was required by state law to indemnify the policemen. Vallejo’s Chapter 9 plan did not expressly refer to indemnification claims or claims against its employees. Anyway, under 9th Circuit authority, a Chapter plan cannot provide for discharge of debts of non-bankrupt entities. Furthermore, the officers’ claim for indemnity accrued post-petition, when judgment was entered against them. So, their claims for indemnity from Vallejo are not subject to its Chapter 9 plan, and Vallejo will be required under state law to pay the judgment against the policemen.
Ninth Circuit Court of Appeals (Wardlaw, J.); September 8, 2016; 2016 WL 4698299