NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JUN HO YANG; HO SOON HWANG YANG, Appellants,

v. FUND MANAGEMENT INTERNATIONAL, LLC,

Appellee. No. 20

- 55051
D.C. No. 2:18

- cv - 10183

- JAK

MEMORANDUM *

Appeal from the United States District Court for the Central District of California John A. Kronstadt, District Judge, Presiding Argued and Submitted February 2, 2021 Pasadena, California Before: GOULD, LEE, and VANDYKE, Circuit Judges. Jun Ho Yang (“Jun Ho”) and his wife, Ho Soon Hwang Yang (“Ho Soon”) (collectively, the “Yangs”) , appeal the district court’s affirmance of the bankruptcy court’s grant of judgment in favor of Fund Management International, LLC (“F MI”) on its claim of non

- dischargeability under 11 U.S.C. § 523(a)(2). Because

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3. 

# FILED

FEB 26 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2

the parties are familiar with the facts and procedural history of the case, we recite only those facts necessary to decide this appeal. We have jurisdiction under 28 U.S.C. § 1291 , and we affirm. We review a district court’s decision on appeal from a bankruptcy court
decision de novo

. Pre b lich v. Battley , 181 F.3d 1048, 1051 (9th Cir. 1999). When reviewing a bankruptcy court order, we review conclusions of law de novo and
f actual findings for clear error. Id

. W e review the a pplication of collateral estoppel de novo

. See United States v. 22 Santa Barbara Drive , 264 F.3d 860, 868 (9th Cir. 2001).
T he bankruptcy court did not err in interpreting our mandate in Yang v. Fund Mgmt. Int’l, LLC (

In re Jun Ho Yang

) , 698 F. App’x 374 (9th Cir. 2017). The rule
is settled that “ [a] district court that has received the mandate of an appellate court cannot vary or examine that mandate for any purpose other than executing it.” Hall v. City of Los Angeles , 697 F.3d 1059, 1067 (9th Cir. 2012)

. But t he district court may “decide anything not foreclosed by the mandate.” Id . Here, our prior decision required the bankruptcy court to determine whether the parties manifested
an intent for the State Court Stipulation and Judgment to bind them in subsequent proceedings

— including this one. See In re Jun Ho Yang , 698 F. App’x at 374. Because we left the bankruptcy court free to decide other issues on remand, its
decision to confine the evidentiary hearing to the issue of intent was consistent3

with our mandate , and was not error

. Nor did the ban kruptcy court err in determining that the requirements of issue preclusion were met. “[T] he preclusive effect of a state court judgment in a subsequent bankruptcy proceeding is determined by the preclusion law of the state in which the judgment was issued .” Harmon v. Kobrin ( In re Harmon

) , 250 F.3d 1240, 1245 (9th Cir. 2001) (citing 28 U.S.C. § 1738 ). U nder California law, “a stipulated judgment may properly be given collateral estoppel effect, at least when the parties manifest an intent to be collaterally bound by its terms.” Cal

. State
Auto

. Ass ’ n Inter

- Ins. Bureau v. Super ior C ourt , 50 Cal. 3d 65 8, 664 (1990). 1 Appl ying these principles, the bankruptcy court found that the parties intended for the state court judgment to bind them in subsequent proceedings.
That factual finding withstands clear error review. Under t he Settlement Agreement , Jun Ho stipulated to the “facts supporting the claims made against
him”

— including fraud

— and admitted in Paragraph 12 that the facts and claims in
the S tate C ourt C omplaint “ are within the meaning of 11 U.S.C.A. 523,” which is
the same statute under which FMI brought its non

- discha rgeability claim in these

1 The California Supreme Court went on to observe: “ I t seems fair to say that by specifically stipulating to the issue of liability, the parties intended the ensuing judgment to collaterally estop further litigation on that issue.” C al. State Auto. , 50 Cal

. 3d at 664 n.2. “Were their intent otherwise, the parties easily could have expressly restricted the scope of the agreement.” Id

.4

proceedings. Moreover, Paragraph 12 of the Settlement Agreement does not amount to a prepetition waiver

. Generally, “[i] t is against public policy for a debtor to waive the prepetition protection of the Bankruptcy Code.” Bank of China v. Huang ( In re Huang ) , 275 F.3d 1173, 1177 (9th Cir. 2002). C ollateral estoppel is an exception
to that rule

. When “the parties stipulate [] to the underlying facts that support a finding of nondischargeability, [a] Stipulated Judgment would then be entitled to collateral estoppel application.” Hayhoe v. Cole ( In re Cole ) , 226 B.R. 647 , 655 (B.A.P. 9th Cir. 1998).
T he factual admissions in the Settlement Agreement directly relate to the fraud alleged in FMI’s complaint for non

- dischargeability. As noted above, Jun Ho stipulated to the facts supporting a finding of fraud under California law, which
contains the same elements as the fraud ex ception to discharge in 11 U.S.C. § 523(a)(2). See Younie v. Gonya ( In re Younie

) , 211 B.R. 367, 37 3

– 7 4 (B.A.P. 9th Cir. 1997), aff ’ d , 163 F.3d 609 (9th Cir. 1998). Finally, the bankruptcy court did not err in entering judgment against Jun Ho’s wife, Ho Soon. Under California law, collateral estoppel may be asserted against a party who “was a party or in privity with a party at the prior proceeding.”
Mueller v. J. C. Penney Co. , 173 Cal. App. 3d 713, 72 3 (1985). “ [S] pouses are in privity with each other where the cause of action in the prior litigation was5

‘community in nature’ and the ‘proceeds of any judgment that m ight have been recovered . . . would have belonged to both husband and wife, as community property.’” Id

. (omission in original) (quoting Zaragosa v. Craven , 33 Cal. 2d 315, 321 (1949)). Ho Soon was named in the State Court Complaint, which alleged that she “participated in the fraud by knowingly accepti ng the benefits of the FMI funds diverted by [Jun Ho] for their personal use as husband and wife,” that she “was fully aware of the facts of the fraud at the time it was occurring, ” and that “the FMI funds fraudulently taken

. . . by [Jun Ho] were funneled to family trusts i n which [Ho Soon] is a beneficiary.” Because the fraudulently obtained funds were deposited into accounts shared by the Yangs , the bankruptcy court properly gave collateral effect to the state court judgment against Ho Soon.
AFFIRMED.