Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caeb-9_15-ap-09009/USCOURTS-caeb-9_15-ap-09009-0/pdf.json

Parties Involved:
Andrew Katakis
Plaintiff
California Equity Management Group, Inc.
Plaintiff
Fox Hollow of Turlock Owners' Association
Plaintiff
Richard Carroll Sinclair
Defendant

Document Text:

%JUN 152015 

POSTED ON WEBSITE UNITED STATES BANKRUPTCY COU 

NOT FOR PUBLICATION EASTERN DISTRICT OF CALIFORNI 

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF CALIFORNIA 

In re Case No. 14-91565-E-11 

RICHARD CARROLL SINCLAIR, 

Debtor. 

ANDREW KATAKIS, et al., Adv. Proc. No. 15-9009 

Docket Control No. HAR-1 

Plaintiffs, 

V . 

RICHARD CARROLL SINCLAIR, 

Defendant. 

This memorandum decision is not approved for publication and may 

not be cited except when relevant under the doctrine of law of the 

case or the rules of claim preclusion or issue preclusion. 

MEMORANDUM OPINION AND DECISION 

DENYING WITHOUT PREJUDICE MOTION FOR SU14MARY JUDGMENT 

Andrew Katakis, California Equity Management Group, Inc., and 

Fox Hollow of Turlock Owners' Association ("Movant") filed the 

instant Motion for Summary Judgment or in the Alternative Summary 

Adjudication Against Defendant Richard Sinclair on April 23, 2015. 

Dckt. 11. Proper notice was provided and Richard Sinclair, the 

defendant ("Defendant-Debtor"), timely filed his opposition. 

As set forth in this Memorandum Opinion and Decision, upon 

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1 consideration of the Motion, Supporting Pleadings, Opposition, 

2 arguments of the parties, and applicable law, the Motion is denied 

3 I without prejudice. 

4 OVERVIEW OF LITIGATION 

5 This Adversary Proceeding was filed on February 23, 2015. The 

6 complaint seeks a determination that a judgment obtained against 

7 Defendant-Debtor in Stanislaus County Superior Court ("State 

8 Court"), Case No. 332233 ("State Court Action") in the amount of 

9 $1,337,073.72 ("State Court Judgment") is a nondischargeable debt 

10 pursuant to "11 U.S.C. § 523(a) (2)(A), (4), and (6)." A copy of 

11 the ruling of the State Court ("State Court Ruling") and the 

12 California Court of Appeal Decision affirming the State Court 

13 Ruling are filed in support of the Motion as Exhibits 1 and 2, 

14 respectively, to Movant's Request for Judicial Notice, Dckt. 15. 

15 As a preliminary matter, the court notes that these parties 

16 continue to be locked in what appears to be a litigation death 

17 spiral that has been going on for more than a decade. The 

18 litigation spiral has twisted from the California Superior Court to 

19 the U.S. District Court, and now from the California Court of 

20 Appeal to the U.S. Bankruptcy Court. It appears that litigation 

21 fatigue has set in, with the parties numb to what is being 

22 presented to the court - having lived the case for more than ten 

23 years, they do not appreciate that judges do not "know" what the 

24 I parties "know." 

25 Further, the parties appear destined to a path of importing 

26 ineffective litigation strategies from the State Court to the 

27 federal courts. As this court has admonished the parties 

28 previously, the federal courts enforce the Federal Rules of Civil 

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1 Procedure and Bankruptcy Procedure, the Federal Rules of Evidence, 

2 and the Local Bankruptcy Rules. Merely "dumping" on the court more 

3 than 700 pages of unauthenticated exhibits does not provide the 

4 court with evidence to support a party. Inundating the court with 

5 cut-and--pasted text from various treatises does not present the 

6 court with focused, persuasive arguments. Rehashing old battles 

7 for which this court cannot vacate or ignore final orders and 

8 judgments of the state court or district court does not advance 

9 one's position. Throwing a potpourri of State Court findings at a 

10 court (not identifying where in the record are such findings), and 

11 merely telling the court that somewhere in those findings there is 

12 some combination of findings which could support relief, is not a 

13 recipe for success. Not providing the court with the legal 

14 elements for relief sought under the Bankruptcy Code and not 

15 identify the evidence, acts, and exhibits which support those 

16 grounds will not win a motion. 

17 REVIEW OF MOTION 

18 Movant states that summary judgment is appropriate in the 

19 instant Adversary Proceeding because there is no triable issue of 

20 fact. The Motion states with particularity the following grounds 

21 (Fed. R. Civ. P. 7(b) and Fed. R. Bankr. 7007) upon which such 

22 relief is based: 

23 A. Movant seeks from this court Summary Judgement or, in the 

alternative, Partial Summary Adjudication against 

24 Defendant-Debtor. 

25 B. Movant seeks a determination that the State Court 

Judgment obtained against Defendant-Debtor in the amount 

26 of $1,337,073.72 is nondischarageable pursuant to 

11 U.S.C. § 523(a) (2) (A), (4), and (6). 

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After a 36-day trial, the State Court Judgment was 

entered against Defendant-Debtor for attorneys' fees 

based on a theory of "unclean hands." 

The State Court Judgment has been affirmed on appeal. 

EL The State Court Action had been filed by Defendant-Debtor 

to recover lots from Movant in the Fox Hollow Project 

from the purchasers at foreclosure sales. 

The security instruments and formation documents of the 

Fox Hollow Home Owner's Association contained attorneys' 

fees provisions. 

The State Court found that the acts of Defendant-Debtor 

in bringing the State Court Action to avoid the transfers 

"was initiated following acts by [Defendant-Debtor] that 

resulted in a finding by the State Court of unclean hands 

which in turn resulted in the award of attorney' fees, 

based on the documents involved in the foreclosures." 

"Many of the [unidentified by Movant in the Motion] 

wrongful acts found by the State Court fit within the 

elements of § 523(a) (A), (4), and (6)." 

"The wrongful acts that fit within the elements of 

§ 523(a) (2) (A), (4) and (6) establish a pattern of fraud, 

misrepresentation and wilful malicious acts that resulted 

in the finding of unclean hands." 1 

IMotion, Dckt. 11. 

Movant has filed a 13-page Points and Authorities (Dckt. 13) 

which provides extensive legal quotations, citations, and 

arguments. The Points and Authorities does not provide the court 

with the legal authorities of how the Doctrine of Unclean Hands is 

1 The Motion does not state with particularity the grounds, 

acts, findings, or events which are allegedto "fit within elements" 

for nondischarageability or assert the grounds therefore. Rather, it 

merely combines the very diverse nondischargeablility requirements for 

fraud (§ 523(a) (2) (a)), breach of fiduciary duty/embezzlement/larceny 

(§ 523(a) (4)), and willful and malicious injury to the person or 

property of another (§ 523(a) (6)) into one composite basis. The 

Motion does not state what conduct constituted the "unclean hands" 

upon which the Motion appears to be based as the sole grounds for 

relief under "11 U.S.C. § 523 (a) (2) (A), (4) and (6)) ." Movant does 

not identify these separate and independent bases for 

nondischargeablity of a debt, but merely lumps them together as if 

they are one combined basis for such relief. 

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a basis for the relief requested pursuant to "11 U.S.C. 

§ 523(a) (2) (A), (4) and (6)." The court understands from the 

Points and Authorities the following legal analysis on this point: 

A judgment for attorneys' fees was based on a theory of 

"unclean hands." 

The "unclean hands" basis presents this bankruptcy court 

with the issue of "if some, but not all of the findings 

of wrongful acts that are within the scope of 

§ 523(a) (2) (A), (4) and (6) establish a pattern that 

results in the entire Judgment being a non-discharageable 

debt." 

The court is requested to take judicial notice of the 

decision of the Fifth District court of Appeal in 

affirming the State court finding of "unclean hands." 

The District court of Appeal decision cited by Movant 

includes the following: 

Defendant-Debtor failed to cite to the record any 

evidence to the first 20 instances of "unclean 

hands" the State Court found to be "untrue 

representations or a partial truth." 2 

The pre-2002 misconduct of Defendant-Debtor 

included: 

Failure to complete the subdivision work for 

Fox Hollow to create a PUB. 

The misrepresentation of, or failure to 

• disclose, the noncompliance to the city of 

Turlock and to lenders, which permitted 

Defendant-Debtor to encumber Fox Hollow in 

excess of its true value. 

C. It also included failure to form and operate 

the FHOA once the subdivision map was filed, 

to maintain the property while it was overencumbered, and to make payments to lenders. 

d. It included filing a petition in bankruptcy to 

delay foreclosure, filing state court actions 

2 In the District Court of Appeal decision cited to the court, 

the court collection refers to the Defendant-Debtor and other parties 

as the "plaintiffs" in the State Court Action. For consistency in 

this ruling, this court specifically refers to the Defendant-Debtor 

individually, as he is included in the group that the Court of Appeal 

identifies as "plaintiffs." 

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1 to further delay foreclosure and, finally, 

making misrepresentations in various court 

2 proceedings. 

3 e. Defendant-Debtor's pre-2002 misconduct led to 

the foreclosures that resulted in Katakis 

4 acquiring lots 3, 7, 9, and 14 and related 

directly to Defendant-Debtor's claim that the 

5 foreclosures were wrongful. 

6 f. Under the unclean hands doctrine, it was 

inequitable to grant Defendant-Debtor the 

7 relief sought in the State Court Action, 

because it was Defendant-Debtor's conduct that 

8 resulted in the foreclosure sales. 

9 g. Under the unclean hands doctrine, it was 

inequitable to grant Defendant-Debtor the 

10 relief he sought - monetary damages and 

avoiding the foreclosure sales - because of 

11 Defendant-Debtor' s misconduct. 

12 h. The alleged misconduct of Movant in the State 

Court Action was not relevant to whether 

13 Defendant-Debtor's claim in the State Court 

Action was barred by the unclean hands 

14 doctrine. 

15 i. The State Court found that Defendant-Debtor's 

claims in the State Court Action were barred 

16 by misconduct that included: 

17 (1) fraud in securing the underlying notes 

and deeds of trust; 

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(2) refusing to make mortgage payments and 

19 misrepresentations regarding those 

payments; 

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(3) refusal to pay dues and special 

21 assessments to the FHOA; and 

22 (4) misuse of the courts to delay the 

foreclosures. 

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j. Under the unclean hands doctrine, Defendant24 Debtor was not entitled to recover the lots or 

any lost rents because of the wrongful acts in 

25 relation to those lots. 

26 k. Defendant-Debtor failed to show that the State 

Court abused its discretion in concluding that 

27 all of Defendant-Debtor's claims were barred 

by the doctrine of unclean hands. 

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1 Points and Authorities, Dckt. 13, P. 3:11-28, 4:1-15. 

2 Later in the Points and Authorities, the Movant cites to the 

3 State Court stating that the pattern of "unclean hands" conduct of 

4 Defendant-Debtor (one of the multiple "plaintiffs" in the State 

5 Court Action) was so pervasive that the unclean hands defense 

6 defeated all of Defendant-Debtor's claim against Movant. 

7 Nowhere in the Points and Authorities does Movant provide the 

8 court with the explanation of the Unclean Hands Doctrine (an 

9 affirmative defense) in California, the elements for the defense, 

10 and how the affirmative defense is made into an offensive claim for 

11 attorneys' fees and nondischargeability of debt. 

12 While the Motion does not state with particularity any 

13 specific conduct which would be the basis for the relief requested 

14 (only stating that it's "unclean hands"), the Points and 

15 Authorities state (and Movant confirmed at oral argument) that 

16 Findings (a), (f), (g), (h), and (p) are the basis for the court to 

17 determine that a judgment determining the award of attorneys' fees 

18 pursuant to "11 U.S.C. § 523(a) (2) (A), (4) and (6)" is proper. The 

19 court discusses these specific findings and how they apply, or do 

20 not apply, to the present Motion in the Discussion portion of this 

21 Decision. 

22 OPPOSITION 

23 The Defendant-Debtor filed an opposition on May 7, 2015. 

24 Dckt. 18. The Opposition is 48 pages in length. This includes a 

25 declaration appended to the Opposition rather than being filed as 

26 a separate document as required by the Local Rules and Guidelines 

27 for Preparation of Documents. It appears that sections of the 

28 Opposition consists of copies from treatises or articles which have 

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Filed 06/15/15 Case 15-09009 Doc 28
1 been cut and pasted into the opposition. 

2 Defendant-Debtor has filed approximately 100 exhibits, without 

3 an index. These exhibits run 734 pages. It appears that few, if 

4 any, of these exhibits have been authenticated. Fed. R. Evid. 901, 

5 902. 

6. The gist of Defendant-Debtor's Opposition is that Movant has 

7 lied to the State Court and the State Court Judgment should not be 

8 valid. The State Court Ruling was issued on August 17, 2009, 

9 almost six years ago. The District Court of Appeal Decision was 

10 issued January 23, 2013, two and one-half years ago. Defendant11 Debtor contends that he, now six years after the State Court 

12 Ruling, intends to prepare and file a motion to vacate the judgment 

13 (which is a final judgment after prosecution of an appeal) due to 

14 fraud on the State Court. Further, in the Opposition Defendant15 Debtor states that he suffers from medical illnesses. 

16 The Opposition continues, asserting that the State Court 

17 findings of 'unclean hands" is untrue. He does not contend that 

18 this was not the State Court finding, but disputes that the 

19 findings of the State Court truly represent the actual facts. 

20 (Essentially arguing that the State Court's findings and 

21 conclusions are in error, and this court should not accept them, 

22 I notwithstanding the State Court Ruling having been affirmed on 

23 appeal.) Much of the Opposition argues the facts which have been 

24 determined in the State Court Action. 

25 The State Court Judgment has not been vacated, and as of oral 

26 I argument on this Motion, there was no motion to vacate pending. An 

27 opposition of "the judgment is unfair and I want to re-litigate it 

28 further" is not an effective opposition to a well pleaded and 

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Filed 06/15/15 Case 15-09009 Doc 28
1 evidentiary supported motion for summary judgment. 

2 DISCUSSION 

3 The first troubling aspect to the Motion is that Movant fails 

4 to state with particularity, as required by Federal Rule of Civil 

5 Procedure 7(b) and Federal Rule of Bankruptcy Procedure 7007, the 

6 grounds for relief. The grounds stated in the Motion effectively 

7 state that there is some judgment which is based on "unclean hands" 

8 and possibly some of the grounds upon which that judgment is based 

9 (those grounds not stated) could be the basis for relief under 

10 11 U.S.C. " 523(a) (2) (A), (4) and (6)." The Motion does not state 

11 the legal elements for any of the three separate statutory bases 

12 for nondischargeablity of debt, and therefore does not explain how 

13 the "findings" fulfill those elements. 

14 Going to the Points and Authorities (which is not the Motion) 

15 and the court taking the laboring oar to plumb the depths for 

16 grounds, little more is offered. The Points and Authorities 

17 continues the mantra of "unclean hands," as if it is a specially 

18 defined term under the Bankruptcy Code which automatically makes a 

19 debt nondischargeable. The various findings stated in the Points 

20 and Authorities primarily discuss the Defendant-Debtor's claims in 

21 the State Court Action and why the Doctrine of Unclean Hands is a 

22 defense to such claims. There are no findings identified by Movant 

23 sufficient for the court to determine what findings and conclusions 

24 of the State Court exist to apply in this bankruptcy law 

25 nondischargeability proceeding. 

26 The Points and Authorities fails to provide the court with the 

27 elements of a California Unclean Hands affirmative defense and how 

28 an affirmative defense becomes the basis for a claim in the 

Filed 06/15/15 Case 15-09009 Doc 28
bankruptcy case. 3 Defendant-Debtor does not provide the court with 

an analysis of why the asserted grounds are not sufficient. The 

court will not research, identify, and plead these key factual and 

legal matters for the parties. 

At oral argument, Movant pointed the court to page 11 of the 

Points and Authorities, advising the court that Movant was relying 

on findings (a), (f), (g), (h), and (p) for the Motion. In the 

Statement of Undisputed Facts filed by Movant there are thirtyseven purported undisputed facts, but Movant does not identify 

where in the record the findings relied upon can be located. 

Rather, Movant merely advised the court that they can be found 

See 5 Witkin California Procedure, Fifth Edition, § 1126, 

lUnclean Hands, stating: 

The objection that the plaintiff does not come into equity 

with clean hands means that the plaintiff is guilty of 

wrongful conduct in connection with the transaction or 

subject matter of the action. (See 13 Summary (10th), 

Equity, §9 et seq.; 2 California Affirmative Defenses, §45:1 

et seq.) The defense is available in legal as well as 

equitable actions. (See Fibreboard Paper Products Corp. v. 

East Bay Union of Machinists, Local 1304, United 

Steelworkers of America, AFL-CIO (1964) 227 C.A.2d 675, 728, 

39 C.R. 64; 13 Summary (10th), Equity, §9.) 

This defense is not likely to appear on the face of the 

complaint. Moreover, the defense does not directly challenge 

the statement of the cause of action; it is essentially a 

plea in confession and avoidance. Hence, it will ordinarily 

be raised affirmatively in the answer. (See Alistead v. 

Laumeister (1911) 16 C.A. 59, 62, 116 P. 296 [allegation 

that property was conveyed by plaintiff in fraud of 

creditors]; Fibreboard Paper Products Corp. v. East Bay 

Union of Machinists, supra, 227 C.A.2d 726 [defense must be 

raised in trial court, and should ordinarily be pleaded; but 

denial of leave to amend was not error where alleged unclean 

hands was not in transaction before court]; Santoro v. 

Carbone (1972) 22 C.A.3d 721, 731, 99 C.R. 488, citing the 

text; for forms, see Cal. Civil Practice, 2 Procedure, 

§9:114; Cal. Civil Practice, 1 Real Property Litigation, 

§1:70, 5:65.) 

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1 somewhere in the thirty-seven "State Court Findings." As pointed 

2 out to Movant at oral argument, there are no findings (a), (f), 

3 (g), (h), and (p) in the State Court Ruling or the District Court 

4 of Appeal Decision. 

5 At oral argument, Movant advised the court that the alphabetic 

6 identification of the findings in the Points and Authorities was 

7 caused by error of counsel and his assistant in preparing the 

8 Points and Authorities, and the alphabetic listing corresponds to 

9 the numeric listing in the State Court Ruling and District Court of 

10 Appeal Decision. [(a) = 1, (b) = 2, etc.]. These findings relied 

11 upon by Movant are identified by the court from Exhibit 2, 

12 Dckt. 15, Request for Judicial Notice to be: 

13 (a) = Finding 1, Statement of Decision, Dckt. 15, p. 6:14.5-16.5: 

14 In April 1994, Mr. Sinclair wrote to the City of Turlock 

to advise them that there were sufficient funds in the 

15 HOA. (D022.) Mr. Sinclair testified that he never told 

the City that there was an HOA before 1998 (687:5-15) and 

16 that there was no HOA before 2000. (689:6-9.) 

Mr. Sinclair's 1994 letter to the City of Turlock that 

17 there was an HOA was false. 

18 (f) = Finding 6, Id., p. 6:27.5-28, 7:1-2.5: 

19 On or about July 21, 1998, Plaintiffs [including the 

Defendant-Debtor] caused Subdivision Map No. 2 to be 

20 recorded creating an additional 15 lots. (J031.) 

Plaintiffs [including Defendant-Debtor] knew that they 

21 had failed to complete the conditions imposed by the City 

for recording such a map. (DOlO, D012, D013.) 

22 Plaintiffs [including Defendant-Debtor] also knew that 

the City had previously rejected their request to 

23 complete the required work after the map was recorded. 

(D016, D018, D021.) 

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(g) = Finding 7, Id., p. 7:3.5-5: 

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In July 1998, immediately upon recording Map No. 2, 

26 Plaintiffs [including Defendant-Debtor] caused 15 loans 

to be placed against the 15 new lots. Mr. Mauchley 

27 signed fifteen deeds of trust (J032, J033, J034, J035, 

J037, J039, J041, J043 to J050) that contained Planned 

28 Unit Development riders representing that there was an 

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1 HOA. Yet, "there was no intention to start it then." 

(687:5-15) 

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(h) = Finding 8, Id., p. 7:6.5-8: 

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In July 1998, Plaintiffs [including Defendant-Debtor] 

4 obtained these 15 new loans based on values that were 

"subject final completion of subdivision firewalls and 

5 underground relocation of utilities to accommodate 

individual ownership • ." (J349; 4:11-14.) This 

6 material information was not disclosed to the lenders. 

Plaintiffs' [including Defendant-Debtor's] secured these 

7 loans was [sic.] on a false premise. 

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9 (p) = Finding 16, Id. p. 8:5-8: 

10 Although Plaintiffs [including Defendant-Debtor] prepared 

HOA minutes indicating that Mr. Mauchley was present at 

11 the first two HOA meetings (P002), Mr. Mauchley testified 

that he did not attend meetings. Plaintiffs' minutes 

12 indicate work was being done on and Mr. Sinclair billed 

Fox Hollow for doing work on Articles of Incorporation 

13 (POOl) during the time period of August 2000 to December 

2000. Yet, the Articles of Incorporation were signed and 

14 completed in July 2000, but simply not filed with the 

secretary of state until December 2000. (D069.) 

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16 Neither the Motion nor the Points and Authorities state the 

17 I elements for relief pursuant to 11 U.S.C. § 523(a) (2) (A) for fraud; 

18 § 523(a) (4) for breach of fiduciary duty, larceny, or embezzlement; 

19 or § 523(a) (6) for willful and malicious injury. Each has its 

20 separate elements and requirements, and do not constitute an 

21 unified "catch-all" exception to discharge. 

22 The best Movant states in the Points and Authorities is that 

23 Movant alleges that Defendant-Debtor "[c]ommitted wrongful acts 

24 that fall within § 523(a) (2) (A), (4) and (6) that resulted in his 

25 loss in the State Court Action and the award of attorneys' fees 

26 based on his 'unclean hands' in manipulating the Fox Hollow project 

27 and the filing of the State Court Action." Dckt. 13. The court 

28 has no idea what "wrongful acts" Movant asserts to support its 

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1 claim for each of the various and greatly divergent grounds of 

2 § 523(a) (2) (A), § 523(a) (4), and § 523(a) (6) to render the 

3 attorneys' fee award nondischargeable. 

4 Issues of Collateral Estoppel 

5 In the Motion, Movant does not identify what specific prior 

6 findings of the non-bankruptcy courts made which should not be 

7 relitigated in this court. In the Points and Authorities, Movant 

8 cites Migra v. Warren City School Dist. Bd. Of Ed., 465 U.S. 75, 81 

9 (1984), for the proposition, "If the former judgment is a state 

10 court judgment, federal courts must apply the res judicata and 

11 collateral estoppel rules of the state that rendered the underlying 

12 judgment." Points and Authorities, Dckt. 13, p. 12:25-27. 

13 Further, Movant cites to the court authorities for the following 

14 legal propositions: (1) factual or legal issues necessarily and 

15 finally adjudicated in an earlier action or proceeding may be 

16 entitled to preclusive; (2) once a judgment on the award becomes 

17 final, res judicata and collateral estoppel apply; (3) state court 

18 judgments are entitled to full faith and credit; and (4) federal 

19 courts give the state court's resolution of the res judicata issue 

20 I the same preclusive effect it would have had in another court of 

21 I the same state. Id., p. 12-13. 

22 There is no discussion or analysis of the requirements for 

23 collateral estoppel to apply or how a state court order or judgment 

24 could have "res judicata" effect on the federal issue of 

25 nondischargeability of debt. No discussion of, or citation to any 

26 authorities explaining, California issue or claim preclusion law is 

27 provided by Movant. Rather, the analysis upon which Movant wants 

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As set forth above and as evidenced by the State Court 

Findings, this adversary proceeding presents no genuine 

issue of fact for trial and the Judgement should be 

determined to be a non-dischargeable debt of Defendant. 

Movant does not tie any of the "findings" to nondischargeable 

claims based on fraud, or based on breach of fiduciary or larceny, 

or for willful and malicious injury. 4 As addressed above, the 

necessary elements of each of these federal law nondischargeable 

claims are not addressed by Movant. 

Movant Fails to Estab].ish What Damages, If Any, Were Cause 

by the "Some of the 1bove Conduct" Which is Asserted to Constitute 

"11 U.S.C. § 523(a) (2) (A), (4) and (6) Nondischargeability 

Even if the court were to construct the grounds stated with 

particularity from the other pleadings and exhibits, Movant fails 

to show that the asserted conduct is (1) the basis of the 

attorneys' fees award and (2) that the conduct is sufficient for 

nondischargeability. Movant consists of Andrew Katakis, California 

Equity Management Group, Inc., and Fox Hollow of Turlock Owners' 

Association. Many of the cited findings relate to DefendantDebtor's conduct with third-parties, such as the stated 

misrepresentations to the City of Turlock. Other findings relate 

to misrepresentations made to lenders. Neither the City of Turlock 

nor the lenders are before this court. It appears that Movant's 

The litigation fatigue between the parties is further 

evidenced in the court being unable to find in the record a judgment 

or an order for attorneys' fees, or the findings by the court awarding 

the attorneys' fees. The court has no idea of the actual basis for 

the attorneys' fees awarded by the State Court. Merely because there 

was an award of attorneys' fees referenced in an appellate decision 

does not make it an undisputable, determined fact that there was a 

determination by the State Court of grounds that establish fraud, 

breach of fiduciary duty or larceny, or willful and malicious injury 

for purposes of federal law. 

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1 I contention is that since Defendant-Debtor was improper in his 

2 dealings with others, then Movant can take advantage of the harm 

3 done to others. That is not a theory by which a nondischargeablity 

4 I judgment may be granted in this Adversary Proceeding. 

5 Quite possibly, the court and court staff could provide legal 

6 services to Movant and assemble from the 89 pages of the District 

7 Court of Appeal Decision and the State Court Ruling how a claim for 

8 nondischargeablity could be stated. But such "services to a 

9 litigant" is not the proper role of the court. Just as the court 

10 will not assemble a shield for Defendant-Debtor, it will not forge 

11 a sword for Movant. 

12 In wading through the State Court Ruling, the court notes that 

13 there is no determination of attorneys' fees and the State Court 

14 I Ruling expressly states in that ruling, "The court makes no finding 

15 at this time as to which party/parties is/are the prevailing 

16 party." Exhibit 2, Request for Judicial Notice, Dckt. 15, 

17 Statement of Decision, p. 25:4.5-5.5. 

18 Exhibit 1 to the Request for Judicial Notice is the 61-page 

19 Court of Appeal Decision. It includes a discussion of dense facts 

20 and findings by the State Court. On page 17 of the Court of Appeal 

21 Decision, footnote 6 states that "Posttrial orders are the subject 

22 of separate appeals." It would not be uncommon that an award of 

23 attorneys fees would be the subject of a post-trial motion. 

24 The court notes that on page 55 of the Court of Appeal's 

25 Decision there is a discussion of sanctions requested by Movant 

26 against one of the other parties aligned with the Defendant-Debtor. 

27 The Court of Appeal denied the request for sanctions. 

28 The District Court of Appeal Decision concludes with the 

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following statement: 

The judgment is affirmed. The defendants' motion for 

reconsideration, deemed a renewed motion to dismiss the 

appeal, is denied. The defendants' motion for sanctions 

is denied. The defendants' motion to dismiss Lairtrust, 

LLC, is denied as moot. The Flake plaintiffs' request 

that we take judicial notice is denied. The defendants 

are awarded their costs on appeal. The trial court is 

directed to determine the amount of attorney fees to be 

awarded to defendants for legal services on appeal. 

(Abdaiiah v. United Savings Bank (1996) 43 Cal.App,4th 1 

101, I 112.) 

Dckt. 15; Exhibit 1, Request for Judicial Notice, p. 61 (emphasis 

added). 

From the Motion, Points and Authorities, and Exhibits 

presented by Movant, the best the court can tell is that the award 

of attorneys' fees, and the grounds for it, are stated in other 

orders, findings, rulings, and judgment not presented to this 

court. 5 

CONCLUS ION 

While the parties have the right to litigate their claims and 

utilize the strategy they choose, the court emphasizes that the 

parties shall comply with the Federal Rules of Civil Procedure, 

Federal Rules of Bankruptcy Procedure, Federal Rules of Evidence, 

and Local Bankruptcy Rules. Here, the instant Motion fails to 

state with particularity the grounds for summary judgment as 

required by Fed. R. Civ. P. 7(b), and even the "Mothorities" fails 

to show grounds for the relief generally requested under 11 U.S.C. 

The court went so far as to word search the PDF filed Request 

for special notice for: "attorneys' fees," "attorneys fees," "attorney 

fee." In doing so the court mined a reference to a post-trial order 

in which the State Court amended the judgment and awarded Movant 

$750,000.00 in attorneys' fees ("attorney fees") . District Court 

Decision, p. 47. The court has not been provided with that amended 

judgment and the State Court's findings of fact and conclusions of law 

in issuing that amended judgment. 

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§ 523(a) (2) (A), (4), and (6) . The court has not been presented 

with a judgment or order for attorneys' fees and findings of the 

State Court upon which any such judgment or order is based. 

Therefore, as set forth above in this Memorandum Opinion and 

Decision, the Motion for Summary Judgment or in the Alternative 

Summary Adjudication is denied without prejudice. 

Dated: June /5, 2015 

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1 Instructions to Clerk of Court 

2 Service List - Not Part of Order/Judgment 

3 

The Clerk of Court is instructed to send the Order/Judgment or other court generated document 

4 transmitted herewith to the parties below. The Clerk of Court will send the Order via the BNC 

or, if checked ____, via the U.S. mail. 

5 

Debtor(s), Attorney for the Debtor(s), Bankruptcy Trustee (if appointed in the case), 

6 and jQ Other Persons Specified Below: 

7 Office of the U.S. Trustee 

Robert T. Matsui United States Courthouse 

8 5011 Street, Room 7-500 

Sacramento, CA 95814 

9 

Hilton A. Ryder 

10 7647 N. Fresno Street 

Fresno, CA 93720 

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Richard Carroll Sinclair 

12 P.O. Box 1628 

Oakdale, CA 95361 

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