NOT FOR PUBLICATION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

(“FMI”) 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 APPEALS
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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. Preblich v. Battley, 181 F.3d 1048, 1051 (9th Cir. 1999). When 

reviewing a bankruptcy court order, we review conclusions of law de novo and 

factual findings for clear error. Id. We review the application of collateral 

estoppel de novo. See United States v. 22 Santa Barbara Drive, 264 F.3d 860, 868 

(9th Cir. 2001).

The 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 the 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 consistent 
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with our mandate, and was not error.

Nor did the bankruptcy 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). Under 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. Superior Court, 50 Cal. 3d 658, 664 (1990).1 

Applying 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 the 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 State Court Complaint “are within the meaning of 11 U.S.C.A. 523,” which is 

the same statute under which FMI brought its non-dischargeability claim in these 

1 The California Supreme Court went on to observe: “It 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.” Cal. 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.
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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). Collateral 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).

The 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 exception to discharge in 11 U.S.C. 

§ 523(a)(2). See Younie v. Gonya (In re Younie), 211 B.R. 367, 373–74 (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, 723 (1985). “[S]pouses are in 

privity with each other where the cause of action in the prior litigation was 
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‘community in nature’ and the ‘proceeds of any judgment that might 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 accepting 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 in 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.