1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

FILED

NOV 03 2017

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-17-1002-STaL

)

BARAK MENASHE SNAPIR, ) Bk. No. 2:12-bk-50058-BR

)

Debtor. ) Adv. No. 2:13-ap-01334-BR

______________________________)

)

BARAK MENASHE SNAPIR, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

JANET BRELIANT, Trustee of )

the Breliant Trust Dated )

August 2, 1988, )

)

Appellee. )

______________________________)

Argued and Submitted on September 29, 2017

at Pasadena, California

Filed – November 3, 2017

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Barry Russell, Bankruptcy Judge, Presiding

 

Appearances: Patrick C. McGarrigle of McGarrigle, Kenney &

Zampiello, APC argued for appellee.

 

Before: SPRAKER, TAYLOR, and LAFFERTY, Bankruptcy Judges.

*This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8024-1.
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

INTRODUCTION

The bankruptcy court entered judgment against chapter 71

debtor Barak Menashe Snapir excepting from discharge his debt

arising from his fraudulent procurement of funds from appellee

Janet Breliant, trustee of the Breliant Trust Dated August 2,

1988. Snapir appeals from that judgment.

In virtually all of his arguments on appeal, Snapir in

essence challenges the bankruptcy court’s findings. Because

there was sufficient evidence to support the bankruptcy court’s

key findings, we AFFIRM the bankruptcy court’s nondischargeable

fraud ruling under § 523(a)(2)(A). 

Snapir also challenges the bankruptcy court’s award of

prejudgment interest at the rate specified by California law. 

The bankruptcy court gave no reason for departing from the

federal interest rate, which generally applies to

nondischargeability claims. Therefore, we VACATE this aspect of

the bankruptcy court’s ruling, and we REMAND so that the

bankruptcy court can recalculate prejudgment interest at the

federal rate, or, alternately, make the requisite findings and

provide the reasoned justification necessary to support

application of the California interest rate.

FACTS

In September 2008, Breliant entered into a home improvement

contract with Snapir’s wholly-owned corporation, Castle Homes,

1Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all "Rule" references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037.

2
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Inc.2 According to Breliant, her project designer, Roy Sklarin,

encouraged her to hire Snapir as her general contractor for the

project. Sklarin represented to Breliant that Snapir was part of

his team, and that Sklarin and Snapir had been working together

on home improvement projects for 25 years. Breliant insisted

that Snapir was present when Sklarin made the above-referenced

representations, and Snapir acknowledged and ratified each of

them by, among other things, nodding his head in assent as

Sklarin made them. Before Breliant signed the contract, she

asked Sklarin to show her an example of their work. Sklarin and

Snapir took Breliant on a tour of a whole-house remodel of a

large estate, which was similar in size to Breliant’s residence. 

Impressed with this example of Sklarin’s and Snapir’s work,

Breliant signed their home improvement contract.

Snapir concedes that Sklarin’s representations to Breilant

were untrue. Snapir admitted that his contracting projects,

prior to Breliant’s, typically consisted of room additions or

bath and kitchen remodels in smaller, middle-class homes; he

never had attempted as big a remodeling project on as large (or

high end) a residence as Breliant’s. He further conceded that he

never worked with Sklarin prior to the Breliant project and did

not work on the remodel of the house shown to Breliant to

convince her to hire them. But, Snapir maintained that he did

not hear Sklarin make any of the above representations to

2At all relevant times, Breliant was acting in her role as

trustee of the Breliant Trust Dated August 2, 1988. For ease of

reference, we refer to Breliant herein, in her capacity as

trustee, by her last name.

3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Breliant. He insists that he never acknowledged or ratified any

of Sklarin’s misrepresentations.3

The contract provided for extensive remodeling and

renovation of Breliant’s residence located in Beverly Hills,

California. The original contract price was $802,000, but

Breliant later requested a series of changes and additions to the

project that resulted in the issuance of “change orders,” which

almost doubled the contract price to roughly $1.45 million.

Over the course of two years, between September 2008 and

September 2010, Breliant paid Snapir, in aggregate, roughly $1.3

million.4 The remodel, however, remained far from complete.

Snapir would prepare invoices and change orders and deliver them

directly to Breliant or to Sklarin, who would present them to

Breliant for payment. Breliant then would make her checks

payable to Castle Homes or to Snapir’s successor corporation,

U.S. Builders, and would give the checks to Sklarin, who would

deliver them to Snapir.

Unbeknownst to Breliant, Sklarin would not release

Breliant’s checks to Snapir unless and until Snapir gave him a

3At trial, the parties presented their direct testimony by

declaration, but neither party’s excerpts of record included

Snapir’s trial declaration. Nonetheless, we have reviewed this

trial declaration and other adversary proceeding documents not

provided by the parties by accessing the bankruptcy court’s

electronic docket. We can take judicial notice of its contents

and of the imaged documents attached thereto. Elliot v. Weil

(In re Elliott), 544 B.R. 421, 423 n.3 (9th Cir. BAP 2016),

aff'd, 2017 WL 2570014 (Mem. Dec.) (9th Cir. June 14, 2017)

(citing O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.),

887 F.2d 955, 957–58 (9th Cir. 1988)).

4Breliant also paid separate amounts to Sklarin for his

design work, which amounts are beyond the scope of this appeal.

4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

check for 5% of the amount Breliant paid. Sklarin later

increased this percentage to 10%. Whereas Snapir referred to

these amounts as commissions or payments, Breliant, when she

later learned of this practice, referred to the payments as

kickbacks. Breliant stated that had she known about the

kickbacks, or that Snapir had no prior experience working with

Sklarin, or that he had not previously worked on high-end whole

house remodels, she would not have done business with Snapir.

But the most critical misrepresentations, in terms of

Breliant’s damages, were those implicit in the invoices and

change orders Snapir caused to be presented to Breliant for

payment. As Breliant put it, Snapir presented these invoices

“for work he claimed was done and/or near completion.” Breliant

Tr. Decl.5 By way of his invoices and change orders, Snapir

fraudulently induced Breliant to make payments for labor and

materials she thought had been provided, but much of it actually

never was provided.

5The parties at trial did little or nothing to differentiate

between invoices and change orders. In fact, Breliant generally

referred to them all as invoices. See Breliant Tr. Decl.

(Sept. 28, 2016) at ¶ 7 & Ex. 2; see also Snapir Tr. Decl. at

¶¶ 20-21 & Ex. L. As a practical matter, Sklarin and/or Snapir

were presenting the change orders to Breliant as if they were

invoices. Snapir, for his part, claimed that he never

represented in any change order that the labor and materials

described in the change order already had been supplied. 

However, he admitted that he was aware that Sklarin was

presenting the change orders to Breliant for payment and that he

received the lion’s share of the payment proceeds. He attempted

to deflect any responsibility or liability for this practice by

asserting that Sklarin was calling the shots and that he could

not prevent Sklarin from presenting the change orders for

premature payment. But he indisputably acquiesced to Sklarin’s

conduct and knowingly accepted the benefits therefrom.

5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

A little less than two years into the project, after paying

$1.3 million to Snapir and with completion of the project 

lagging, Breliant was confronted with demands for additional

payments from Snapir and Sklarin. These demands caused Breliant

concern, as Snapir and Sklarin did not offer Breliant any

specific or credible assurances as to when the project would be

completed or how much more they would require her to pay. 

Breliant then hired a construction consultant, Mike Sawyer, who

determined that Breliant had paid Snapir hundreds of thousands of

dollars for work that had not been performed. Based upon his

review of the project, Sawyer calculated the amount of funds paid

for work not completed to be at least $582,000. Sawyer testified

that Snapir himself had admitted to him that he had received more

than $340,000 in payments that Breliant made for work not

completed. After Breliant, with Sawyer’s support, refused to pay

more, Snapir refused to complete the remodeling project. 

Breliant ultimately hired a different contractor who completed

the work Snapir was supposed to have finished for $615,074.59.

Both Sklarin and Snapir eventually commenced separate

bankruptcy cases.6 Breliant obtained a $1.3 million

nondischargeability judgment against Sklarin in his bankruptcy

case, and then she tried her § 523(a)(2)(A) and (a)(6)

nondischargeability claims against Snapir. The bankruptcy court

granted judgment against Snapir on both claims. The bankruptcy

6The record indicates that, before Snapir’s bankruptcy

filing, Breliant sued Snapir in state court for fraud, unjust

enrichment, etc. There is nothing in the record indicating how

(or whether) the state court litigation was disposed of.

6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

court found Breliant’s and Sawyer’s testimony to be credible. 

The bankruptcy court did not find Snapir credible. It also noted

that the parties’ testimony differed completely and commented

that much of Snapir’s version of events did not make any sense.

The bankruptcy court specifically found that Breliant had

proven each of the elements of her claim under § 523(a)(2). The

court noted that Snapir had knowingly made false representations

to induce Breilant to execute the contract and then fraudulently

misrepresented his right to payments. It also found that

Breilant justifiably relied on Snapir’s and Sklarin’s

representations to enter the contact and on the invoices and

change orders in paying for labor and materials supposedly but

not actually provided. The bankruptcy court held that, as a

direct, proximate and foreseeable result of Snapir’s fraud,

Breliant incurred damages in the amount of the replacement

performance totaling $615,074.59. The bankruptcy court also

awarded Breliant prejudgment interest of $215,276.10 calculated

under California law.

As for Breliant’s § 523(a)(6) claim, the bankruptcy court

found that Snapir’s injury to Breliant was both willful and

malicious as those terms are defined for purposes of § 523(a)(6). 

The bankruptcy court entered its nondischargeability

judgment on December 22, 2016, and Snapir timely appealed.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(I), and we have jurisdiction under

28 U.S.C. § 158.

7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ISSUES

1. Did the bankruptcy court err when it entered judgment in

favor of Breliant on her nondischargeability claims under

§ 523(a)(2)(A) and (a)(6)?

2. Did the bankruptcy court err when it awarded Breliant 

prejudgment interest at the rate provided under California

law?

STANDARDS OF REVIEW

In nondischargeability appeals, we review the bankruptcy

court's findings of fact under the clearly erroneous standard and

its conclusions of law de novo. Oney v. Weinberg

(In re Weinberg), 410 B.R. 19, 28 (9th Cir. BAP 2009), aff’d,

407 F. App’x 176 (2010). A finding of fact is not clearly

erroneous unless it is illogical, implausible or without support

in the record. Retz v. Samson (In re Retz), 606 F.3d 1189, 1196

(9th Cir. 2010).

We review the bankruptcy court's award of prejudgment

interest for an abuse of discretion. See Grosz-Salomon v. Paul

Revere Life Ins. Co., 237 F.3d 1154, 1163–64 (9th Cir. 2001). In

applying the abuse of discretion standard, we review de novo

whether the bankruptcy court identified and applied the correct

legal rule, and we review factual findings for clear error. See

United States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009)

(en banc).

DISCUSSION

Snapir contends that Breliant failed to prove that his debt

to her was nondischargeable under either § 523(a)(2) or (6). 

Additionally, he argues that it was error to award prejudgment

8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

interest under California law rather than under the applicable

federal rate. We address these issues in turn. 

A. Breliant’s § 523(a)(2)(A) Claim

In relevant part, § 523(a)(2)(A) excepts from discharge 

debts for money, property or services “obtained by false

pretenses, a false representation, or actual fraud . . . .” 

Under this Code provision, the debtor’s liability for money,

goods or services fraudulently procured is nondischargeable if

the plaintiff establishes the following elements by a

preponderance of the evidence:

(1) misrepresentation, fraudulent omission or deceptive

conduct by the debtor; (2) knowledge of the falsity or

deceptiveness of his statement or conduct; (3) an

intent to deceive; (4) justifiable reliance by the

creditor on the debtor's statement or conduct; and

(5) damage to the creditor proximately caused by its

reliance on the debtor's statement or conduct.

Sabban v. Ghomeshi (In re Sabban), 384 B.R. 1, 5 (9th Cir. BAP

2008) (quoting Turtle Rock Meadows Homeowners Ass'n v. Slyman

(In re Slyman), 234 F.3d 1081, 1085 (9th Cir. 2000)). The

bankruptcy court correctly recited these five elements. Snapir

argues on appeal that the bankruptcy court erred because he never

misrepresented his qualifications or work experience to Breliant

and always intended to perform. There was evidence in the record

sufficient to support the bankruptcy court’s findings on these

matters. 

1. Snapir’s False Representations

Snapir argues that he never made misrepresentations to

fraudulently induce Breliant to do anything. First, Snapir

argues that neither he nor Sklarin misrepresented his “ability”

to perform as he was always able to construct the house as

9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

contracted. This argument misses the point that Snapir induced

Breliant to enter into the contract by misrepresenting: (1) that

the two of them had been working together for 25 years; and

(2) that Snapir had worked on high-end remodeling projects,

including the one Breliant toured before entering into the home

remodeling contract with Snapir. Both representations were

false, and the evidence supports the bankruptcy court’s finding

that they were made for the purpose of inducing Breliant to enter

into the remodeling contract with Snapir. 

Snapir next argues that it was Sklarin alone who

misrepresented his experience and involvement with Sklarin. 

However, the bankruptcy court rejected this argument. The

bankruptcy court found credible Breliant’s testimony that Snapir

acknowledged and confirmed Sklarin’s misrepresentations by

nodding his head in assent during the first meeting between

Snapir, Sklarin and Breliant. Snapir furthered the

misrepresentation by accompanying Sklarin on the tour of the

model house represented as an example of their work immediately

before she entered into the contract. The court further found

that Snapir knowingly, intentionally and actively participated in

the fraud. The record supports these inferences. Snapir

presents no argument as to why this is clear error apart from his

disagreement with the court’s finding. 

Snapir’s arguments also ignore the bankruptcy court’s

conclusion that Snapir fraudulently misrepresented the work that

he had performed and completed to obtain payments to which he was

not entitled. Snapir admitted that he prepared the invoices, and

he either gave them directly to Breliant or to Sklarin, knowing

10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

that Sklarin was presenting them to Breliant for payment, even

though much of the work described therein was nowhere near

completion. Snapir directly benefitted from this conduct by his

receipt of hundreds of thousands of dollars for work not

performed. 

In short, the bankruptcy court chose to believe Breilant’s

version of the evidence rather than Snapir’s. Its findings that

Snapir misrepresented his work experience overall, and the status

of his work, were logical, plausible and supported by the record. 

See In re Retz, 606 F.3d at 1196.

2. Snapir’s Intent to Perform

Snapir argues on appeal that there was no fraud, that he

always intended to perform under the remodeling contract and that

he only was prevented from fully performing by forces beyond his

control. Specifically, he refers to Breliant’s numerous

alterations and additions to the project which he believes caused

inordinate delay and unmanageable costs. Put another way, Snapir

argues that his partial, but incomplete, performance establishes

his general intent to perform and defeats Breilant’s claim of

fraud by false promise. 

Partial performance, under the right circumstances, can be

persuasive to counter a false promise allegation. See, e.g.,

Wagner v. Malich (In re Malich), 2011 WL 3300818, *7 (Mem Dec.)

(9th Cir. BAP Mar. 15, 2011); see also In re Khalil, 2017 WL

1485464, *3 (C.D. Cal. Apr. 20, 2017) (stating that failed

attempts to perform could support a finding of intent to perform

and thereby defeat a promissory fraud claim). Nonetheless, this

contention is wholly unpersuasive here because the bankruptcy

11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

court’s fraud determination was not based on a false promise. 

Indeed, the bankruptcy court even commented that Snapir probably

subjectively wanted to finish the project, but was far out of his

depth and without the ability to do so. Instead, the bankruptcy

court was clear that the misrepresentations regarding Snapir’s

work experience constituted fraud from the inception of the

project, which fraud continued when he misrepresented the work

completed in the invoices and change orders to procure payments

to which he was not entitled. The bankruptcy court found that

these representations – not a false promise – induced Breliant to

pay hundreds of thousands of dollars for work not performed and

that she suffered damages in the amount of $615,074.59 as a

result. Any intent to perform did not negate Snapir’s fraudulent

inducement of the contract or the unearned payments Breliant paid

under it.7

B. The Applicable Prejudgment Interest Rate 

Snapir’s only other argument on appeal asserts that the

bankruptcy court applied the wrong legal standard for calculating

prejudgment interest. The bankruptcy court applied a prejudgment

interest rate under California law of 7% per annum based on Cal.

Civ. Code § 3287(a) and under Cal. Const., Art. 15, § 1. 

According to Snapir, the bankruptcy court should have applied the

federal interest rate provided for in 28 U.S.C. § 1961(a). See

generally Blankenship v. Liberty Life Assur. Co. of Boston,

486 F.3d 620, 628 (9th Cir. 2007) (postjudgment interest rate

7Because we are affirming the bankruptcy court’s 

nondischargeability judgment under § 523(a)(2)(A) we decline to

address Breliant’s alternate claim for relief under § 523(a)(6).

12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

prescribed under 28 U.S.C. § 1961 should be applied to ERISA

judgment to award prejudgment interest “unless the trial judge

finds, on substantial evidence, that the equities of that

particular case require a different rate”). 

Breliant contends that California law determines the

prejudgment interest rate because her nondischargeability lawsuit

was based on her home improvement contract with Snapir, and the

contract provided for the application of California law.8

However, Breliant did not sue to enforce her contract. Instead,

she claimed nondischargeable damages resulting from Snapir’s

fraud as well as willful and malicious injury. The court

excepted the debt from discharge under § 523(a)(2) and (6) based

upon its finding of such fraud. Neither the arguments presented

at trial nor the bankruptcy court’s decision suggest that the

judgment for nondischargeability was based on a mere breach of

contract.9 

For claims brought under federal law, including the

8Breliant alternately argues that the bankruptcy court

should have applied against Snapir an 18% interest rate because

the home improvement contract provided for past due payments to

accrue interest “at the rate of 1.5% per month (18% per annum).” 

Because Breliant did not file a cross-appeal from the bankruptcy

court’s nondischargeability judgment, we will not address this

argument.

9Nondischargeability of a contract claim under § 523 is

subject to additional scrutiny which is not reflected in the

record below. See Lockerby v. Sierra, 535 F.3d 1038, 1041 (9th

Cir. 2008) (citing Petralia v. Jercich (In re Jercich), 238 F.3d

1202, 1206 (9th Cir. 2001)); see also Dourbetas v. Gionis

(In re Gionis), 2009 WL 7751433, at *8 (Mem. Dec.) (9th Cir. BAP

Apr. 30, 2009) (stating that neither breach of contract nor mere

negligent misrepresentations will, by themselves, support a

§ 523(a)(2)(A) claim).

13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Bankruptcy Code, the interest rate prescribed by federal law

applies unless the equities require a different interest rate. 

Banks v. Gill Distrib. Ctrs., 263 F.3d 862, 871 (9th Cir.

2001)(analyzing award of prejudgment interest on § 523(a)

claims). Any departure from this standard based on the equities

requires “reasoned justification” supported by “substantial

evidence.” Id.; Blanton v. Anzalone, 813 F.2d 1574, 1576 (9th

Cir. 1987); see also Palm Fin. Corp. v. Eberts (In re Eberts),

607 F. App’x 683, 686 (9th Cir. 2015) (holding that bankruptcy

court properly applied federal interest rate because the

plaintiff based its claim on § 523(a)(2)(A) and the plaintiff did

not argue that the equities warranted application of the state

interest rate instead).

Here, the bankruptcy court gave no reason for departing from

the federal interest rate. Accordingly, the bankruptcy court’s

award of prejudgment interest must be vacated and this matter

must be remanded. On remand, the bankruptcy court must either

apply the federal interest rate recalculated in accordance with

28 U.S.C. § 1961 or provide a reasoned justification supported by

substantial evidence for departing from the federal interest

rate. See Blanton, 813 F.2d at 1576; see also Melikyan v.

Khnkoyan (In re Melikyan), 263 F. App’x 631, 635 (Mem. Dec.) (9th

Cir. Jan 16, 2008) (remanding either for recalculation of

prejudgment interest or for a “reasoned justification” for

departing from the federal interest rate).10

10Breliant’s response brief on appeal discussed the

bankruptcy court’s finding that Snapir was the alter ego of his

(continued...)

14
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CONCLUSION

For the reasons set forth above, we AFFIRM the bankruptcy

court’s judgment excepting Snapir’s debt from discharge under

§ 523(a)(2)(A). However, we VACATE the court’s award of

prejudgment interest. We REMAND for further proceedings

consistent with this decision.

10(...continued)

wholly-owned corporations, Castle Homes and U.S. Builders. 

Snapir did not address or even mention the alter ego issue in

either his opening appeal brief or in his reply. We therefore

decline to address the issue. See Christian Legal Soc'y v. Wu,

626 F.3d 483, 487–88 (9th Cir. 2010) (declining to address

matters not specifically and distinctly discussed in the

appellant's opening brief); Brownfield v. City of Yakima,

612 F.3d 1140, 1149 n.4 (9th Cir. 2010) (same).

15