Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_19-cv-00400/USCOURTS-azd-2_19-cv-00400-1/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Robert Reish, et al.,

Appellants,

v. 

Louie Mukai,

Appellee.

No. CV-19-00400-PHX-DLR

ORDER 

On November 15, 2019, the Court issued an order affirming in part and remanding 

in part the bankruptcy court’s December 28, 2018 order. (Doc. 36.) Before the Court is 

Appellee’s motion for rehearing, which is fully briefed. (Docs. 38, 40, 43.) Relief on a 

motion for rehearing is appropriate where the district court “overlooked or 

misapprehended” a point of law or fact. F.R.B.P. 8022(a)(2). In other words, in order to 

prevail, the movant must identify an error committed by the Court in rendering its decision. 

In re Kenny G Enter., LLC, 708 F. App’x 390 (9th Cir. 2017). Appellee contends that the 

Court erred in remanding this matter to the bankruptcy court to ascertain the property value 

of 41FF for several reasons, which the Court will address in turn. For the reasons described 

below, Appellee’s motion will be denied.

I. Waiver

First, Appellee argues that Appellants waived the issue of the 41FF’s value because 

they did not raise it in their briefing. (Doc. 38 at 5.) The Court disagrees. Appellants

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objected to the bankruptcy court’s valuation of 41FF in their briefing, asserting that the 

bankruptcy court erroneously found, without supporting evidence, that the value of 41FF 

was $2.15 million—the amount Mr. Reish received from AMOD—even though 41FF was 

not airworthy when PHP effected the helicopter’s transfer. (Doc. 16 at 32.)1

II. Judicial Estoppel

Second, Appellee contends that the doctrine of judicial estoppel prevents Appellants 

from objecting to the bankruptcy court’s valuation because Appellants had not contested 

41FF’s valuation throughout the litigation and Mr. Reish asserts in a separate, ongoing case 

with AMOD that he has the right to retain the $2.15 million proceeds from his sale of 41FF 

to AMOD. (Doc. 38 at 6-7.) Appellee did not raise this judicial estoppel argument before 

filing its motion for rehearing. The Court did not err by not considering an argument that 

was never made. 

In addition, as discussed above, Appellants contested that 41FF was valued at $2.15 

million at the time of transfer from PHP to Mr. Reish. Appellants’ position that the 41FF’s 

value on October 27, 2015 might not equal 41FF’s sale price in the subsequent transaction 

between Mr. Reish and AMOD has not changed and is not incompatible with the position 

it has taken throughout this case—which is an earlier piece of a larger litigation puzzle. 

Risetto v. Plumbers and Steamfitters Local 343, 94 F.3d 597, 600-01 (9th Cir. 1996).2 The 

Court recognizes that the piecemeal nature of this litigation complicates matters for the 

parties; however, it would be inappropriate for the Court to decide issues extraneous to 

 

1 Appellee admits that Appellant also contested 41FF’s in his opening brief before 

the bankruptcy appellate panel (“BAP”), arguing, “[a]n evidentiary hearing is required to 

sort out whether or not the 0041FF was airworthy . . . and if not, what it was worth in its 

non-airworthy condition.” (Doc. 42 at 4.) Further, the BAP remanded for the bankruptcy 

court to hold an evidentiary hearing, yet an evidentiary hearing was never held on the 

valuation issue. (Id.) 

2 This case and its related arguments arose before the AMOD matter. (Doc. 40 at 

4.) Assuming arguendo that Appellants’ positions in the two cases are inconsistent for 

judicial estoppel purposes, which the Court does not decide, the court handling the AMOD 

matter could estop Appellants from espousing the latter position asserted in the AMOD 

case. This Court is not to involve itself. Rissetto, 94 F. 3d at 603 (“The interested party is. 

. . the court in which a litigant takes a position incompatible with the one the litigant has 

previously taken. The tribunal in which the litigant made the first statement could also be 

interested . . . but it is not in a position to do anything about its interest. Therefore . . . the 

interests of the second court are uniquely implicated.”). 

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those presented, and the Court did not err by refraining from doing so. 

III. Burden

Third, Appellee asserts that Appellants did not show that the bankruptcy’s valuation 

finding was clearly erroneous. (Doc. 38 at 8.) However, Appellants underscored that the 

bankruptcy court never held an evidentiary hearing on the valuation of 41FF and that it 

supported its independent valuation decision with a single sentence: “Here, the fair market 

value of 41FF is determined by the price AMOD paid to Reish.” (Doc. 16 at 32; Doc. 1 at 

21.) As Appellants argued and the Court explained, the price AMOD paid to Mr. Reish 

for 41FF was conditioned on receipt of an airworthy helicopter, and it is uncontested that 

41FF was not airworthy on October 27, 2015. Thus, the bankruptcy court’s decision to 

value 41FF as if it were airworthy, without other support or explanation as to why this 

manner of valuation was proper, was clearly erroneous.3 In re Windwill Durango Office, 

LLC, 481 B.R. 51, 64 (B.A.P. 9th Cir. 2012) (“We reverse the bankruptcy court . . . if we 

conclude that the bankruptcy court’s factual determinations were illogical, implausible, or 

without support[.]”). Consequently, the Court did not err in finding that Appellants met 

their burden. 

IV. Fairness

Fourth, Appellee argues that any other value assigned to 41FF would create an 

unjust result. (Doc. 38 at 9-11.) However, in remanding this matter the Court is not 

directing the bankruptcy court to necessarily find that 41FF is valued at any particular 

amount. Rather, it is directing the bankruptcy court to ascertain 41FF’s value “at the time 

of transfer” from PHP to Mr. Reish—whatever that might be—and to support such

valuation with evidence from the record. (Doc. 36 at 8.) Arguments by Appellee 

speculating that any future valuation may cause injustice fail to render clearly erroneous 

the Court’s decision that the bankruptcy court erred in its valuation analysis. The 

bankruptcy court will undoubtedly consider questions of equity on remand, and such 

 

3

In other words, the Court is not declaring that the $2.15 million figure is inherently 

an incorrect valuation of 41FF. Rather, the bankruptcy court erred by failing to adequately 

support the valuation, especially considering 41FF’s unairworthy condition. 

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concerns, in and of themselves, should not prevent a proper reconsideration of the 41FF’s 

value. Accordingly,

IT IS ORDERED that Appellee’s motion for rehearing (Doc. 38) is DENIED. 

Dated this 10th day of January, 2020.

Douglas L. Rayes

United States District Judge

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