Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-00344/USCOURTS-casd-3_19-cv-00344-0/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 (District or BAP)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

In re:

CARLTON ROARK,

Debtor,

SAN DIEGO COUNTY CREDIT 

UNION, 

Plaintiff,

v.

CARLTON ROARK,

Defendant.

Case No.: 3:19-cv-0344-AJB-MSB

ORDER AFFIRMING THE 

BANKRUPTCY’S COURT RULING 

AND DISMISSING DEBTOR’S 

APPEAL

Before the Court is Carlton Roark’s notice of appeal from an order of the bankruptcy 

court. (Doc. No. 1.) For the reasons stated herein, the Court affirms the bankruptcy court’s 

ruling and dismisses Roark’s appeal. 

I. BACKGROUND

Because San Diego County Credit Union’s (“SDCCU”) brief details the case’s 

background, the Court cites it here for context. SDCCU filed a defamation lawsuit based 

on defamatory comments it found on the internet that it later discovered were being made 

by Roark. (Doc. No. 9 at 7.) State litigation commenced and ended when the state court 

entered termination sanctions on Roark for destruction of evidence in violation of a 

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preservation order. (Id.) The state court also entered default judgment against him. (Id.) 

The state court found Roark “intentionally and maliciously defamed SDCCU” and caused 

SDCCU harm. (Id.) The California court of appeal affirmed these findings. (Id.)

Roark then initiated bankruptcy proceedings, which found that “the debt resulting 

from the judgment obtained by SDCCU in state court is non-dischargable pursuant to 

Section 523(a)(6) of the Bankruptcy Code because it arises from Roark’s willful and 

malicious defamatory behavior.” (Id.) “The state court’s findings covered every element 

required to establish non-dischargeability under Section 523(a)(6).” (Id.) SDCCU argues 

“[t]hose findings were entitled to preclusive effect in the bankruptcy proceedings.” (Id.) 

SDCCU filed a motion for summary judgment in bankruptcy court, which it granted. 

(Doc. No. 1 at 8–9.) In the bankruptcy court’s order, it found: (1) there were no genuine 

issues of material fact; (2) “the factual findings of the state court [were] entitled to collateral 

estoppel in this proceeding;” (3) the Rooker-Feldman doctrine barred Roark’s affirmative 

defenses; and (4) the extrinsic fraud exception to the Rooker-Feldman doctrine is 

inapplicable. (Id.) SDCCU notes that Roark did not assert the extrinsic fraud exception in 

his opposition to SDCCU’s summary judgment but waited until oral argument. (Doc. No. 

9 at 8.) 

Roark now appeals the bankruptcy’s court summary judgment order. (Docs. No. 1, 

8 at 7.) Roark’s primary argument is that the bankruptcy court “failed to recognize extrinsic 

fraud on the court.” (Doc. No. 8 at 7.) 

II. LEGAL STANDARDS

A bankruptcy court’s summary judgment ruling is reviewed de novo. Suncrest 

Healthcare Ctr. LLC v. Omega Healthcare Inv’rs (In re Raintree Healthcare Corp.), 431 

F.3d 685, 687 (9th Cir. 2005). De novo review means that this Court considers the matter 

as the bankruptcy court did, determining whether Roark offered any admissible evidence 

to show a triable issue of material fact sufficient to deny summary judgment. See Boruff v. 

Cook Inlet Energy LLC (In re Cook Inlet Energy LLC), 583 B.R. 494, 500 (B.A.P. 9th Cir. 

2018) (“We may affirm on any ground supported by the record, regardless of whether the 

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bankruptcy court relied upon, rejected or even considered that ground.”), citing Fresno 

Motors, LLC v. Mercedes Benz USA, LLC, 771 F.3d 1119, 1125 (9th Cir. 2014).

In the bankruptcy court, a party is entitled to summary judgment if it can establish 

that there is “no genuine issue as to any material fact and that [it] is entitled to judgment as 

a matter of law.” Fed. R. Civ. P. § 56(c). “The plain language of Rule 56(c) mandates the 

entry of summary judgment . . . against a party who fails to make a showing sufficient to 

establish the existence of an element essential to that party’s case, and on which that party 

will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 

Even though the moving party is not required to negate its opponent’s claim, “the burden 

on the moving party may be discharged by ‘showing’ – that is, pointing out to the district 

court – that there is an absence of evidence to support the nonmoving party’s case.” Id. at 

323, 325. 

Once a party moves for summary judgment with competent evidence, the 

nonmoving party may not rely solely on his complaint but must set forth specific facts 

showing that there is a genuine issue for trial. See Fed. R. Civ. P. § 56(e); Celotex, 477 

U.S. at 325. That said, “the mere existence of some alleged factual dispute between the 

parties will not defeat an otherwise properly supported motion for summary judgment; the 

requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby 

Inc., 477 U.S. 242, 248–49 (1986). “[T]he mere existence of factual issues—where those 

issues are not material to the claims before the court—will not suffice to defeat a motion 

for summary judgment.” Quarles v. General Motors Corp., 758 F.2d 839, 840 (2d Cir.

1985).

III. DISCUSSION

SDCCU raises several arguments in its response to Roark’s opening brief in which 

they argue the bankruptcy court correctly decided its motion for summary judgment in its 

favor.

A. Waiver of Affirmative Defenses

First, SDCCU argues Roark waived review of the affirmative defenses raised in his 

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bankruptcy court opening brief because he fails to challenge the bankruptcy court’s ruling 

on those defenses in his opening brief to this court. (Doc. No. 9 at 14–15; see Doc. No. 8.) 

Normally, a court will not consider arguments not raised and argued in its opening brief. 

Dream Games of Arizona, Inc. v. PC Onsite, 561 F.3d 983, 994–95 (9th Cir. 2009). Here, 

Roark only addresses the extrinsic fraud exception in his brief to the court. (Doc. No. 8.) 

Thus, the Court agrees that review of his other defenses are barred.

B. Collateral Estoppel

Second, SDCCU asserts the bankruptcy court “properly concluded that the debt to 

SDCCU arising from the state court judgment is not dischargeable because it arises from 

Roark’s willful and malicious defamatory behavior.” (Doc. No. 9 at 16–18.) Section 

523(a)(6) excepts from discharge debts for “willful and malicious injury by the debtor to 

another entity or to the property of another entity.” 11 U.S.C. § 523(a)(6). A judgment 

against a bankruptcy debtor resulting from a defamation case may meet this standard. Muse 

v. Day (In re Day), 409 B.R. 337 (2009); Johnston v. Elbaum (In re Elbaum), 22 Fla. L. 

Weekly Fed. B 231 (U.S. Bankr. S.D. Fla. 2009).

In determining whether a debt is for a willful injury, the court must determine 

whether the debtor subjectively intended to harm the creditor or had a subjective belief that 

harm was substantially certain. In re Su, 290 F.3d 1140, 1143–44 (9th Cir. 2002). SDCCU 

argues that the state court considered this issue and found that “[b]y making these 

statements, Roark clearly intended to injure SDCCU by damaging its reputation in the 

community. Moreover, even had Roark not intended to damage SDCCU’s reputation, the 

nature of Roark’s statements makes it substantially certain that harm was to occur.” 

(Doc. No. 9 at 16 (quoting the underlying proceeding Dkt. 28-3 at 3).) Accordingly, 

SDCCU asserts Roark’s actions were “undoubtedly willful pursuant to Section 523(a)(6).” 

(Id.) The Court agrees with the state court’s finding of willfulness. 

The element of maliciousness must be determined separately from willfulness. Su, 

290 F.3d at 1146. For an injury to be deemed “malicious” the following elements must be 

met: (1) a wrongful act; (2) done intentionally; (3) which necessarily causes injury; and (4) 

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is done without just cause and excuse. Jett v. Sicroff (In re Sicroff), 401 F.3d 1101, 1106 

(9th Cir. 2005). “[I]t is the wrongful act that must be committed intentionally rather than 

the injury itself.” Id. Here, SDCCU notes the state court made specific conclusions finding 

that Roark made the statements with a malicious intent to cause harm, that the false 

defamatory statements did cause harm, and that Roark’s statements were wrongful and 

intentional acts. (Doc. No. 9 at 17.) The Court agrees that these findings are indicative of 

maliciousness. 

Finding that the state court established the two elements under 523(a)(6), the Court 

agrees with SDCCU that those findings are entitled to collateral estoppel effect. (Id.) 

Grogan v. Garner, 498 U.S. 279, 284–85 (1991) (holding that the doctrine of collateral 

estoppel applies in non-dischargeability proceedings); McCurdie v. Strozewski (In re 

Strozewski), 458 B.R. 397, 403–04 (Bankr. W.D. Mich. 2011) (while the bankruptcy court 

must make its own determination regarding the dischargeability of a debt, that 

determination may be governed by factual issues which were decided in a prior 

proceeding). Under the Full Faith and Credit Act, 28 U.S.C. § 1738, the preclusive effect 

of a state court judgment in a subsequent bankruptcy proceeding is determined by the 

preclusion law of the state where the judgment was issued. In re Nourbakhsh, 67 F.3d 798, 

800 (9th Cir. 1995). Under California law, “[c]ollateral estoppel precludes re-litigation of 

issues argued and decided in prior proceedings.” Lucido v. Superior Court, 51 Cal. 3d 335, 

341 (1990). Collateral estoppel applies if the following five requirements are met: (1) the 

issue sought to be precluded from re-litigation must be identical to that decided in the 

former proceeding; (2) the issue must have been actually litigated in the former proceeding; 

(3) the issue must have been necessarily decided in the former proceeding; (4) the decision 

in the former proceeding must be final and on the merits; and (5) the party against whom 

preclusion is sought must be the same as or in privity with, the party to the former 

proceedings. In re Harmon, 250 F.3d 1240 (9th Cir. 2001).

SDCCU argues these requirements are met. (Id. at 18.) The Court agrees. First, the 

issue of dischargeability is identical to the defamation issue discussed by state court in its 

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findings of willfulness and maliciousness. Second, the parties litigated the issue fully in 

state court. Third, the state court made final judgments regarding Roark’s willful and 

malicious injury in its determination on the defamation claim. Fourth, the state court’s 

judgment was final and on the merits. And finally, the parties here are the same as state

litigation. Thus, the Court finds the state court’s findings were entitled to collateral estoppel

effect and the bankruptcy court was correct in granting summary judgment to SDCCU on 

these grounds. (Doc. No. 1 at 8.) 

C. The Extrinsic Fraud Exception to the Rooker-Feldman Doctrine

Third, SDCCU argues the Rooker-Feldman exception applies and bars Roark from 

reversing the state court’s findings. (Doc. No. 19 at 18.) The Rooker-Feldman doctrine is 

a judge-made doctrine interpreting federal jurisdictional statutes and establishing the 

principle that the lower federal courts have no jurisdiction to review state court judgments. 

Henrichs v. Valley View Dev., 747 F.3d 609, 613 (9th Cir. 2007). The doctrine applies 

when a losing litigant in state court seeks, through a suit in federal district court, the review 

and reversal of a state-court judgment that was rendered before the district court 

proceedings commenced. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 

284, 125 S. Ct. 1517, 161 L. Ed. 2d 454 (2005) (Rooker-Feldman bars lower federal court 

from exercising jurisdiction over “cases brought by state-court losers complaining of 

injuries caused by state-court judgments rendered before the district court proceedings 

commenced and inviting district court review and rejection of those judgments”). 

SDCCU asserts “[t]he bankruptcy court properly found that the Rooker-Feldman

doctrine precluded the bankruptcy court from re-examining the state court judgment.” (Id.

at 19.) The bankruptcy court determined the doctrine applied “because all of Roark’s 

arguments focus on alleged misconduct and constitutional infirmities during the state court 

proceeding.” (Doc. No. 1 at 8.) The bankruptcy court concluded that Roark’s affirmative 

defenses failed under this doctrine. (Id.)

Roark’s sole argument in his opening brief centers around an exception to the 

doctrine based on extrinsic fraud. (Doc. No. 8.) The Ninth Circuit recognizes a limited 

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exception to the Rooker-Feldman doctrine for cases of extrinsic fraud. Kougasian v. TMSL, 

Inc., 359 F.3d 1136 (9th Cir. 2004). The Kougasian court established the exception when 

the plaintiff alleged that the defendant had submitted a false declaration in state court at the 

last minute and had refused to supply the declarant’s contact information, thereby 

preventing the federal plaintiff from deposing or interviewing the declarant. The Ninth 

Circuit termed the conduct “extrinsic fraud,” defining it occurs when a party’s conduct 

prevents another party from presenting his or her claim in court. Id. at 1140.

Roark chiefly claims that North Island Financial Credit Union (“NIFCU”)—his 

former employer—made statements before the state court which constituted extrinsic 

fraud. (Doc. No. 8 at 11.) These statements included assertions to the state court that 

NIFCU did not control, authorize, or direct Roark to delete files on his computer. (Id.) 

Roark contends NIFCU was the party responsible for the deletion of the files, and thus the 

state court should not have imposed termination sanctions on him. (Id.) NIFCU’s false 

remarks, Roark argues, prevented him from presenting this claim in court and establish 

“extrinsic and criminal fraud on the court. . . .” (Id. at 11–12.) 

NIFCU’s allegedly false remarks included telling the state court (1) they did not 

know Roark was working from home and that he was not authorized as such, (2) they had 

no knowledge Roark was deleting data from his personal home computer, (3) Roark’s 

actions on his private computer were not under NIFCU’s authority or control, (4) there was 

no evidence presented showing any NIFCU policy or procedure authorizing home 

computers or deletion of files, (5) Roark was not allowed to remotely access his work 

computer from home, and (6) there was no evidence that NIFCU authorized employees to 

work from home on a home computer. (Id.)

SDCCU’s argument disputing extrinsic fraud occurred here is two-fold. First, 

SDCCU argues Roark failed to present to the bankruptcy court evidence of extrinsic fraud 

on the state court. (Doc. No. 9 at 19–20.) SDCCU argues NIFCU’s arguments in court—

the six complaints listed above—do not constitute evidence of fraud because attorneys’ 

arguments are not evidence. The Court agrees. Barcamerica Intern. USA Trist v. Tyfield 

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Importers, Inc., 289 F.3d 589, 593 n.4 (9th Cir. 2002) (“the arguments and statements of 

counsel ‘are not evidence and do not create issues of material fact capable of defeating an 

otherwise valid motion for summary judgment.’” (internal citations omitted)). SDCCU also 

argues the other purported evidence Roark rests on is insufficient. Upon reviewing 

SDCCU’s arguments, Roark’s assertions, and the record, the Court agrees. Roark fails to 

show beyond conclusory inferences that NIFCU’s policies directed him to destroy evidence 

the state court directed him by order to preserve. Proving fraud is necessarily difficult—

Roark’s arguments simply fail to clear the high hurdle. 

Finally, SDCCU argues Roark fails to explain how NIFCU’s allegedly fraudulent 

statements prevented him from presenting his full claim to the state court. (Doc. No. 9 at 

21–23.) SDCCU notes that Roark had an opportunity to respond to NIFCU’s allegedly 

fraudulent statement during the state court proceedings because he “participated 

extensively” in them. (Id. at 22.) But, the bankruptcy court order makes clear that Roark 

could not fully present these arguments to the state court because the state court entered 

terminating sanctions upon him—which Roark argues is the whole point. (Doc. No. 1 at 

9.) Critically, however, the bankruptcy court found even if Roark’s allegations were true, 

and NIFCU did present false statements to the state court, this “would constitute intrinsic 

fraud, which is not a grounds for relief.” (Id.) The bankruptcy court held:

Roark was precluded from presenting his claim in state court due to the 

terminating sanctions entered by the state court, not due to any fraud 

committed by NIFCU. There is no evidence of any extrinsic fraud on the Court 

that led to the terminating sanctions, which would need to be shown for the 

extrinsic fraud exception to apply.

(Id.)

Here, reviewing the bankruptcy’s decision de novo, the Court finds no evidence 

warranting a different conclusion.

IV. CONCLUSION

For the reasons stated herein, the Court finds the bankruptcy court’s order granting 

SDCCU’s motion for summary judgment was correctly decided. Accordingly, Roark’s 

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instant appeal is DENIED and DISMISSED. (Doc. No. 1.) The Court Clerk is 

DIRECTED to enter judgment accordingly and close the case.

IT IS SO ORDERED.

Dated: August 15, 2019

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