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NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. SC-15-1335-YJuF

)

STEPHEN F. LOPEZ, ) Bk. No. 12-00796-CL7

)

Debtor. ) Adv. No. 12-90127-CL

______________________________)

)

STEPHEN F. LOPEZ, )

)

 Appellant, )

v. ) MEMORANDUM*

)

VLADIMIR RAICEVIC, Trustee; )

IMELDA RAICEVIC, )

)

Appellees. )

______________________________)

Argued and Submitted on January 19, 2017

at San Diego, California

Filed - February 1, 2017

Appeal from the United States Bankruptcy Court 

for the Southern District of California

Honorable Christopher B. Latham, Bankruptcy Judge, Presiding

__________________________

Appearances: Richard R. Roy argued on behalf of Appellant

Stephen F. Lopez; Jerry D. Cluff argued on behalf

of Appellees Vladimir Raicevic, Trustee, and

Imelda Raicevic.

__________________________

Before: YUN**, JURY, and FARIS, Bankruptcy Judges.

FILED

FEB 1 2017

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

* 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.

** Hon. Scott H. Yun, United States Bankruptcy Judge for the

Central District of California, sitting by designation.

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I. INTRODUCTION

This appeal stems from a transaction in which debtor Stephen

F. Lopez (“Lopez”) represented Hardy Matthew Travis

(“Mr. Travis”) and Launi Travis (“Mrs. Travis”) (collectively,

the “Travises”) as their attorney. Vladimir Raicevic and Imelda

Raicevic1 (collectively, the “Raicevics”) obtained a fraud

judgment in state court against Lopez and his law firm based on

the circumstances of that transaction. The Raicevics then brought

an adversary proceeding against Lopez in his bankruptcy case

seeking to have their debt excepted from discharge under

§ 523(a)(2)(A).2 They filed a motion for summary judgment based

on their fraud judgment and the doctrine of issue preclusion3.

Lopez objected to the motion for summary judgment and brought his

own cross-motion for summary judgment. The bankruptcy court

1 Andjelka Raicevic and Vojo Raicevic initially made the

loans in question and entered into the agreement that is the

subject of their fraud claims. Vojo Raicevic subsequently passed

away and Imelda Raicevic pursued the state court action on his

behalf, along with Andjelka Raicevic on her own behalf. They then

initiated the adversary proceeding. Andjelka Raicevic

subsequently passed away and Vladimir Raicevic substituted into

the adversary proceeding on her behalf. In order to reduce

confusion, and because their interests were aligned during the

different stages of litigation, we will sometimes refer

collectively to all four Raicevic family members as the

“Raicevics.”

2 Unless 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.

3 The parties use the term collateral estoppel, which is

interchangeable with issue preclusion. We use the more modern

terminology of issue preclusion.

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granted the Raicevics’ motion, finding their debt

nondischargeable under § 523(a)(2)(A), and denied Lopez’s motion.

Lopez appealed both rulings, and we AFFIRM.

II. FACTS AND PROCEDURAL HISTORY

A. Prepetition Events

1. The Underlying Transactions

Andjelka Raicevic and Vojo Raicevic sold real property to

Mr. Travis as trustee of a family trust in 1998, and took back a

$1.45 million promissory note secured by that real property.4 The

Travises later substituted their residence as collateral for the

loan instead of the original real property. They also pledged

their residence as collateral for an additional loan of $100,000

made in 2003. The Travises began to have difficulty keeping the

payments current on the two loans in April 2004.

2. Lopez’s Involvement

In an attempt to deal with their financial difficulties, the

Travises engaged Lopez to seek a further substitution of

collateral on the two notes. Lopez sent a May 27, 2004

transmittal letter to Andjelka Raicevic and Vojo Raicevic, along

with a proposed pledge agreement in which the Travises would

substitute all of their personal property assets as collateral in

place of their residence. Lopez represented in the transmittal

letter that, in exchange for the collateral swap, the Travises

would keep the note current, personally guarantee the note,

4 This factual summary is taken in part from the opinion of

the California Court of Appeal, Fourth Appellate District, which

in turn was derived from the undisputed facts in the summary

judgment proceedings in the parties’ underlying state court

litigation.

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pledge all personal assets, and obtain permanent financing for

the shopping center that would provide for either continuing

payments or full payoff of the note. The Raicevics executed the

proposed pledge agreement and reconveyed their security interest

in the residence in reliance on the representations in Lopez’s

letter. Lopez did not prepare a UCC-1 statement that would have

perfected the security interest in the Travises’ personal

property. Around the same time, the Travises separated and sold

their residence. But for the reconveyance, the Raicevics would

have received $588,000 from the proceeds of the sale. In April

2005, the Travises also sold the shopping center for more than

$40 million, netting $3.5 million, but they did not repay the

Raicevics. 

3. Ensuing Litigation

The Raicevics filed a state court action against Lopez,

Mr. Travis, and Mrs. Travis, among others, in March 2007.

Mr. Travis passed away on May 29, 2007, and his estate entered

into a settlement with the Raicevics on July 30, 2009. On July 9,

2009, Mrs. Travis stipulated to a judgment in the amount of

$1.5 million. Mrs. Travis filed a bankruptcy petition under

chapter 7 on April 8, 2010, and the Raicevics filed a complaint

to have her debt under the stipulated judgment declared

nondischargeable.

The state court case against Lopez and his law firm went to

trial between October 25 and November 3, 2011, on intentional

misrepresentation, negligent misrepresentation, and financial

elder abuse causes of action. The jury trial involved 13

witnesses and more than 60 exhibits. On November 10, 2011, the

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Superior Court for the State of California, County of San Diego

(“Superior Court”) entered a Joint and Several Judgment against

Stephen F. Lopez and Geraci & Lopez after Trial by Jury (the

“Special Verdict”). The Special Verdict contains the following

specific findings against Lopez regarding the elements of a claim

for intentional misrepresentation:

• He intentionally made a false representation of an

important fact or facts to Vojo and Andjelka

Raicevic;

• He knew that the representation was false or made

the representation recklessly and without regard

for its truth;

• He intended that Vojo and Andjelka Raicevic rely

on the representation;

• Vojo and Andjelka Raicevic reasonably relied on

the representation; 

• Vojo and Andjelka Raicevic’s reliance on Lopez’s

representation was a substantial factor in causing

damage to them; and

• Vojo and Andjelka each suffered economic damages

of $294,000 for a total of $588,000.

Lopez sought a new trial and judgment notwithstanding the

verdict, which the Superior Court denied by minute order entered

on January 9, 2012. Lopez filed a bankruptcy petition under

chapter 7 on January 23, 2012.

B. Postpetition Events

On February 1, 2012, the bankruptcy court in Mrs. Travis’s

case entered its Findings of Fact and Conclusions of Law re

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Complaint for Nondischargeability (the “Travis Findings”) after

trial. The bankruptcy court in that case determined that

Mrs. Travis’s stipulated judgment was dischargeable.

On April 13, 2012, the Raicevics filed an adversary

complaint against Lopez seeking to except his debt to them from

discharge under § 523(a)(2)(A). The complaint was amended twice,

but continued to contain a single cause of action under

§ 523(a)(2)(A).

The Superior Court’s judgment was subsequently amended on

December 20, 2013, to add Lopez’s law firm partner, Alan L.

Geraci, as a judgment debtor and to reflect the addition of

costs, pre-judgment interest, and attorneys’ fees. Lopez appealed

the judgment and the amended judgment of the Superior Court. The

California Court of Appeal, Fourth Appellate District, entered an

opinion on January 23, 2015, affirming in part and reversing in

part. It struck the award of attorneys’ fees, but affirmed the

judgment in all other respects. Lopez then filed a petition for

review with the Supreme Court of California, which was denied on

April 15, 2015. 

On June 11, 2015, the Superior Court entered its Amended

Judgement against Stephen F. Lopez, Alan L. Geraci, and Geraci &

Lopez after Trial by Jury and After Decision on Appeal (“Final

Amended Judgment”). The Final Amended Judgment left undisturbed

the jury’s findings in the Special Verdict, but removed the award

of attorneys’ fees as directed by the final ruling of the Court

of Appeal. 

The Raicevics and Lopez then brought cross-motions for

summary judgment in the adversary proceeding on July 31, 2015.

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The bankruptcy court denied Lopez’s motion, and granted the

Raicevics’ motion and entered judgment on September 17, 2015.

This timely appeal followed.

III. JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. 

§§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C. 

§ 158.

IV. ISSUES

1. Whether the bankruptcy court properly applied the doctrine of

issue preclusion in granting the Raicevic’s motion for summary

judgment and denying Lopez’s motion for summary judgment.

2. Whether the bankruptcy court erred in its application of the

“last in time” rule for applying issue preclusion.

3. Whether the bankruptcy court erred when it ruled on summary

judgment based on the record before it. 

V. STANDARDS OF REVIEW

We review de novo the bankruptcy court’s summary judgment

rulings and its determination to except a debt from discharge.

Ilko v. Cal. St. Bd. of Equalization (In re Ilko), 651 F.3d 1049,

1052 (9th Cir. 2011); Su v. Su (In re Su), 290 F.3d 1140, 1142

(9th Cir. 2002). When we review a ruling de novo, we give no

deference to the bankruptcy court's decision. Univ. of Wash. Med.

Ctr. v. Sebelius, 634 F.3d 1029, 1033 (9th Cir. 2011).

We also review de novo the bankruptcy court’s determination

that issue preclusion is available. Miller v. Cty. of Santa Cruz,

39 F.3d 1030, 1032 (9th Cir. 1994). If issue preclusion is

available, we then review the bankruptcy court’s application of

the doctrine for an abuse of discretion. Id. A bankruptcy court

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abuses its discretion if it applies the wrong legal standard, or

if it misapplies the correct legal standard by making factual

findings that are illogical, implausible, or without support from

inferences that may be drawn from the facts in the record. U.S.

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

VI. DISCUSSION

A. Summary Judgment

The bankruptcy court’s grant of summary judgment is proper

“if the movant shows that there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter

of law.” Fed. R. Civ. P. 56(a); Fed. R. Bankr. P. 7056. A party

seeking summary judgment bears the initial responsibility of

demonstrating the absence of a genuine issue of material fact,

and establishing that it is entitled to judgment as a matter of

law as to those matters upon which it has the burden of proof. 

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court

must view the evidence presented on the motion in the light most

favorable to the opposing party. Avalos v. Baca, 596 F.3d 583,

587 (9th Cir. 2010)(citing Adickes v. S.H. Kress & Co., 398 U.S.

144, 157 (1970)). The opposing party must then make a sufficient

showing on all matters placed in issue by the motion as to which

it has the burden of proof at trial. Celotex Corp. at 323-24.

“[T]he substantive law will identify which facts are

material.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986). “Only disputes over facts that might affect the outcome

of the suit under the governing law will properly preclude the

entry of summary judgment.” Id. A factual dispute is genuine

where the evidence is such that a reasonable jury could return a

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verdict for the nonmoving party. Id. In this case, the bankruptcy

court granted the Raicevics’ motion for summary judgment after

applying issue preclusion to the Final Amended Judgment, and

denied Lopez’s motion for summary judgment after declining to

apply issue preclusion to the Travis Findings.

B. Issue Preclusion as Applied to the Final Amended Judgment

1. Availability of Issue Preclusion

Issue preclusion5 applies in proceedings to except a debt

from discharge under § 523(a). Grogan v. Garner, 498 U.S. 279,

285 n.11 (1991); Harmon v. Kobrin (In re Harmon), 250 F.3d 1240,

1245 (9th Cir. 2001). It bars successive litigation of an issue

or fact that was actually litigated and resolved in a prior

judgment. Grogan at 284-85. 

A federal court must give a state court judgment the same

preclusive effect that it would receive in that state. Marrese v.

Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985). In

California, the requirements for issue preclusion are that 

(1) the issue must be identical to that decided in the former

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

the prior proceeding, (3) the issue must have been necessarily

decided, (4) the decision in the prior proceeding must be final

and on the merits, and (5) the party against whom preclusion is

5 In his brief and statement of issues, Lopez repeatedly 

refers to the doctrine of res judicata. Although he appears to

use res judicata and issue preclusion interchangeably, these are

actually two related but distinct doctrines. Because the

bankruptcy court’s order granting the Raicevics’ motion for

summary judgment is based on issue preclusion, we limit our

analysis to that doctrine.

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sought must be the same. Cal-Micro, Inc. v. Cantrell

(In re Cantrell), 329 F.3d 1119, 1123 (9th Cir. 2003). 

a. Identical Issues

The first element of issue preclusion requires that

identical issues were decided in the former proceeding. This

element is satisfied because the Superior Court rendered judgment

on the Raicevics’ causes of action for intentional

misrepresentation, or fraud, which requires findings that are the

same as those needed for a cause of action under § 523(a)(2)(A). 

Section 523(a)(2)(A) excepts from discharge debts that are

the result of “false pretenses, false representation, or actual

fraud,” other than a statement respecting the debtor’s financial

condition. To prevail under § 523(a)(2)(A), a plaintiff must

prove that:

(1) The debtor made a representation;

(2) The debtor knew the representation was false at the

time it was made;

(3) The debtor made the representation with the intent to

deceive the plaintiff;

(4) The plaintiff relied on the representation; and

(5) The plaintiff sustained a loss as the proximate result

of the misrepresentation. 

Ghomeshi v. Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir.

2010). A plaintiff’s reliance under § 523(a)(2)(A) must be

justifiable. Field v. Mans, 516 U.S. 59, 73-75 (1995). A finding

of fraud under California law requires: 

(1) A misrepresentation; 

(2) Knowledge of falsity; 

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(3) Intent to defraud, i.e. to induce reliance; 

(4) Justifiable reliance; and 

(5) Resulting damage. 

Engalla v. Permanente Med. Grp., Inc., 15 Cal.4th 951, 973-74

(1997). The elements for fraud under § 523(a)(2)(A) and

California law are the same. A finding of fraud under California

law therefore is identical to a finding of nondischargeability

under § 523(a)(2)(A) for issue preclusion purposes in a

nondischargeability action.

b. Actually Litigated in the Prior Proceeding

The issue of Lopez’s fraud was also actually litigated

before the Superior Court. The Final Amended Judgment contains

specific findings that Lopez intentionally made false

representations to Vojo Raicevic and Andjelka Raicevic. It also

states that Lopez knew the representations were false, or acted

recklessly without regard for the truth,6 and he intended Vojo

Raicevic and Andjelka Raicevic to rely on them. Finally, the

Final Amended Judgment relates that Vojo Raicevic and Anjelka

Raicevic relied on the representations and their reliance was a

substantial factor in causing their damages. Each of the elements

for a claim of fraud under § 523(a)(2)(A) and California law were

actually litigated in the Superior Court because the Final

Amended Judgment contains specific findings as to each.

6 Reckless disregard for the truth of a statement can

satisfy the requirement for fraudulent intent under

§ 523(a)(2)(A). Household Credit Servs., Inc. v. Ettell

(In re Ettell), 188 F.3d 1141, 1145 n.4 (9th Cir. 1999).

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c. Necessarily Decided

The issue of fraud was also necessarily decided in the Final

Amended Judgment because the jury only awarded compensatory

damages on the two causes of action for intentional

misrepresentation. The jury found in Lopez’s favor on the causes

of action for financial elder abuse and found against him on the

causes of action for negligent misrepresentation but awarded no

additional damages on account of those claims. The damages

awarded are therefore premised on the intentional

misrepresentation causes of action and those issues were

necessarily decided. The third element for issue preclusion is

satisfied.

d. Final Decision on the Merits

The fourth element for issue preclusion is also satisfied

because the Final Amended Judgment is a final decision on the

merits. It is a judgment on the merits because it followed after

an extensive jury trial. It has also now become final. Under

California law, a judgment is not final for preclusion purposes

while it is still open to attack through appeal. Geographic

Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102, 1105 n.3

(9th Cir. 2010) (citing Abelson v. Nat’l Union Fire Ins. Co.,

28 Cal.App.4th 776, 787 (1st Dist. 1994)); Nat. Union Fire Ins.

Co. of Pittsburgh, PA v. Stites Prof. Law Corp., 235 Cal. App. 3d

1718, 1726 (2nd Dist. 1991); Eichman v. Fotomat Corp., 759 F.2d

1434, 1439 (9th Cir. 1985). Lopez’s petition for review with the

Supreme Court of California was denied on April 15, 2015. The

Superior Court then entered its Final Amended Judgment on

June 11, 2015. There has been no further appeal of the Final

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Amended Judgment and that decision is now final and on the

merits.

e. Against the Same Party

The final threshold element for issue preclusion requires

that the party against whom issue preclusion is sought is the

same as the party in the prior litigation. The Raicevics sought

to apply issue preclusion against Lopez through their summary

judgment motion. Lopez was named as a defendant and held jointly

and severally liable for the Raicevics’ damages in the Final

Amended Judgment. He is also the defendant in the § 523(a)(2)(A)

nondischargeability action that is the subject of this appeal.

Therefore, this element is satisfied. All five of the threshold

elements for the application of issue preclusion under California

law are satisfied and the doctrine was available to the

bankruptcy court. 

2. Application of Issue Preclusion

Having determined de novo that issue preclusion is

available, we now review the bankruptcy court’s decision to apply

the doctrine under an abuse of discretion standard. Miller,

39 F.3d at 1032.

a. Public Policy

After all of the threshold elements of issue preclusion are

satisfied, the court then looks to the public policies underlying

the doctrine to determine whether it should be applied in a

particular circumstance. Lucido v. Superior Court, 51 Cal. 3d

335, 344-45 (1990). The public policies underlying the doctrine

are “preservation of the integrity of the judicial system,

promotion of judicial economy, and protection of litigants from

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harassment by vexatious litigation.” Id. at 345. The bankruptcy

court concluded that the public policies underlying issue

preclusion were furthered because application of the doctrine

would prevent re-litigation of the same issues between the same

individuals and would put an end to an exhaustive legal battle

between the parties. Therefore, application of the doctrine

protected the integrity of the judicial system’s prior decisions,

promoted judicial economy in reducing further litigation, and

protected the Raicevics from harassment by vexatious relitigation of the same issues.

We do not blindly or mechanically apply the doctrine of

issue preclusion, but rather look to the same underlying policies

considered by the bankruptcy court. Lopez had ample opportunity

to litigate the issue of his fraud before the Superior Court in a

multi-day jury trial with more than a dozen witnesses and over

60 exhibits. He then appealed the entire judgment, resulting in a

detailed and lengthy opinion from the appellate court. The

appellate court affirmed the judgment in all respects except for

the award of attorneys’ fees. Lopez then sought review by the

California Supreme Court, which was denied. Lopez does not

dispute any of these facts - his arguments are instead

essentially that it is unfair that the jury and two courts have

not believed his version of the underlying events. However, Lopez

has had an ample opportunity to litigate the issue of his fraud

in multiple forums; and applying issue preclusion in this

instance furthers the public policies of preservation of the

integrity of the judicial system and promotion of judicial

economy and protects the Raicevics from harassment by vexatious

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litigation. The bankruptcy court did not abuse its discretion

when it determined that the public policies behind issue

preclusion warranted its application in this case.

b. Manifest Injustice

Lopez also argues that the application of issue preclusion

is discretionary and the bankruptcy court should have declined to

apply it to prevent manifest injustice. He asserts that he was

only acting on behalf of his clients and had no knowledge of the

clients’ fraudulent intent. Lopez states that there is no

evidence of his fraudulent intent and attorneys must look out for

the interests of their clients. 

However, the bankruptcy court did in fact consider Lopez’s

arguments regarding the fairness of his situation and expressed

sympathy, but exercised its discretion and decided to apply

preclusive effect to the Final Amended Judgment. The jury in the

Superior Court trial also found that Lopez went beyond the

actions of an attorney representing his clients when it found him

liable for making an intentional misrepresentation. We review the

bankruptcy court’s exercise of its discretion in applying the

doctrine of issue preclusion under an abuse of discretion

standard. Miller, 39 F.3d at 1032. Lopez’s arguments are contrary

to the specific findings of the Superior Court and the appellate

court, which determined that Lopez did go beyond the normal

advocacy on behalf of a client and commit fraud against the

Raicevics. The record before the court supports those

conclusions. The bankruptcy court did not abuse its discretion

when it applied issue preclusion to the Final Amended Judgment.

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C. “Last in Time” Rule and the Travis Findings

Lopez argues that the bankruptcy court erred when it

declined to apply issue preclusion to the Travis Findings,

instead of the Final Amended Judgment, because the Travis

Findings were actually “last in time” and preclusive effect

should have been given to that decision. The “last in time” rule

states that where there are inconsistent opinions from different

courts, preclusive effect will generally be given to the ruling

that is last in time. Robi v. Five Platters, Inc., 838 F.2d 318,

322-23 (9th Cir. 1988). This argument fails for several reasons.

1. Determination of the “Last in Time” Ruling

First, the Travis Findings are not actually last in time to

the Final Amended Judgment. As noted above, a judgment under

California law is not final for preclusion purposes until all

opportunities for appeal have been exhausted. Geographic

Expeditions, Inc., 599 F.3d at 1105 n.3. The Special Verdict

entered after the jury trial and the first amended judgment never

became final because they were subject to Lopez’s appeal. The

Final Amended Judgment was entered on June 11, 2015. An appeal

from a California trial court must be noticed within 60 days

after the superior court clerk serves the notice of entry of the

judgment or an endorsed copy of the judgment. Ca. R. Ct. 8.104.

Presuming the Final Amended Judgment was noticed out to Lopez

within the next few days, the time to appeal would have expired

around mid-August 2015. It was only at that time that the Final

Amended Judgment became final for preclusion purposes. 

The Travis Findings were entered on February 1, 2012. Unlike

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California law, the finality and preclusive effect of a judgment7

in the federal courts is not affected by appeal rights. Hawkins

v. Risley, 984 F.2d 321, 324 (9th Cir. 1993). The Travis Findings

were therefore final for preclusion purposes when they were

entered on February 1, 2012. The date of judgment of the Travis

Findings predated the Final Amended Judgment by over three years,

and the Travis Findings are not actually last in time.

2. Rationale Behind the “Last in Time” Rule

Second, the rationale behind the “last in time” rule does

not apply to the facts of this case. The rationale behind the

rule is that by giving effect to the most recent judgment, right

or wrong, finality will be achieved and parties will be

encouraged to appeal an inconsistent judgment rather than

collaterally attack it before a different court. Robi, 838 F.2d

at 323. This is because the parties had the opportunity to

litigate the issues and to appeal the inconsistent ruling.

In re Marriage of Hanley, 199 Cal. App. 3d 1109, 1118 (1st Dist.

1988); see also Treinies v. Sunshine Mining Co., 308 U.S. 66, 77

(1939). 

In the present case, Lopez did exercise his right to appeal

the Superior Court judgment against him. The Travis case was not

an inconsistent ruling on the same issues, but rather a separate

determination of nondischargeability against Mrs. Travis, who had

stipulated to a judgment without any findings in the Superior

Court proceeding. Lopez could not have appealed the Travis

7 “The date of judgment, not the date of filing” controls in

preclusion determinations. Guild Wineries & Distilleries v.

Whitehall Co., 853 F.2d 755, 761 (9th Cir. 1988).

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Findings, as application of the “last in time” rule would

encourage, because he was not a party to that matter and had no

rights regarding it. Therefore, application of the “last in time”

rule to the Travis Findings would not serve one of its primary

purposes.

The bedrock of the “last in time” rule is finality and the

prevention of further litigation of matters where ample

opportunity has been provided. Contrary to this purpose, Lopez is

asking for application of the “last in time” rule so that he can

pursue further litigation in the form of a trial before the

bankruptcy court on the Raicevics’ adversary complaint. This

contravenes the rationale behind the rule. Application of the

“last in time” rule as urged by Lopez would serve none of its

stated purposes and would actually run contrary to them.

3. Application of Issue Preclusion to the Travis Findings

Finally, even if the “last in time rule” were applicable,

the bankruptcy court was correct in declining to afford

preclusive effect to the Travis Findings and denying Lopez’s

motion for summary judgment. The court concluded that the

elements for issue preclusion were not met because the Travis

adversary concerned different issues - Mrs. Travis’s fraudulent

representations and omissions rather than Lopez’s. The issue of

Lopez’s independent conduct was not before that court and was not

actually litigated or necessarily decided. We review the

availability of issue preclusion as to the Travis Findings de

novo and agree.

“The preclusive effect of a federal-court judgment is

determined by federal common law.” Taylor v. Sturgell, 553 U.S.

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880, 891 (2008) (citing Semtek Int’l Inc. v. Lockheed Martin

Corp., 531 U.S. 497, 507-508 (2001)). Issue preclusion will be

applied to federal court judgments where:

(1) there was a full and fair opportunity to litigate the

issue in the previous action;

(2) the issue was actually litigated in that action;

(3) the issue was lost as a result of a final judgment in

that action; and

(4) the person against whom issue preclusion is asserted in

the present action was a party or in privity with a party in

the previous action. 

U. S. Internal Revenue Serv. v. Palmer (In re Palmer), 207 F.3d

566, 568 (9th Cir. 2000). At least three of the four elements for

federal issue preclusion are not met by the Travis Findings, and

the bankruptcy court did not err when it declined to afford those

findings preclusive effect. 

First, there was not a full and fair opportunity to litigate

the issue of Lopez’s conduct in the Travis nondischargeability

proceeding because Lopez was not a party to that proceeding. “A

person who was not a party to a suit generally has not had a

‘full and fair opportunity to litigate’ the claims and issues

settled in that suit.” Taylor, at 892. There was also no

opportunity to litigate Lopez’s fraud because the only issue

before the court in the Travis proceeding was Mrs. Travis’s

conduct. The case concerned only the nondischargeability of the

debt she owed on the stipulated judgment under § 523(a)(2)(A) and

(a)(6).

Second, and most importantly, there is no evidence that the

issue of Lopez’s conduct was actually litigated in the Travis

nondischargeability action. The Travis Findings acknowledge that

the Raicevics hold a fraud judgment against Lopez and note that

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this judgment may be available to satisfy their debt. The

findings of fact also relate that Lopez prepared all of the

documents for the pledge of personal property collateral and

release of the real property liens (which is consistent with the

judgment against Lopez and related appellate opinion). Out of

26 paragraphs of factual findings, these are the only two

mentions of Lopez in the Travis Findings. In contrast, there are

extensive factual findings regarding the relative actions and

culpability of Mr. Travis and Mrs. Travis. Many of the

conclusions of law also appear to be focused on apportioning

relative fault, knowledge, and intent between Mr. Travis and

Mrs. Travis, with no mention of Lopez. The bankruptcy court in

the Travis case was not focused on Lopez’s independent actions in

making its ruling, and the issue of his fraud was not actually

litigated in that proceeding. 

Finally, the parties in the Travis case and this case are

not the same or in privity. Lopez was not named as a defendant in

the Travis case and there is no evidence that he participated in

that case. Privity exists where a person’s interests are so

aligned with a party to litigation that they represent the same

rights with respect to the matter being litigated. U.S. v.

Bhatia, 545 F.3d 757, 759 (9th Cir. 2008). A nonparty may be

bound under federal preclusion law where (1) they enter into an

agreement to be bound, (2) there is a pre-existing substantive

legal relationship such as successive owners of property or

assignee and assignor, (3) the nonparty was adequately

represented by a party with the same interests in the suit,

(4) the nonparty assumes control over the litigation, (5) the

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nonparty is a proxy for the party, or (6) there is a special

statutory scheme that bars successive litigation by different

parties. Taylor, 553 U.S. at 893-95. Four of the exceptions for

non-party preclusion do not apply. There is no evidence that

Lopez entered into an agreement to be bound by the Travis

litigation, that he has a legal relationship with Mrs. Travis,

that he and Mrs. Travis have a proxy relationship, or that any

special statutory scheme is applicable. 

The other two exceptions - control over the litigation and

unity of interests - also do not apply based on the record in

this case. Lopez did previously represent Mrs. Travis, but there

is no indication that he continued to represent her during her

own nondischargeability proceeding or that he was otherwise

exercising control over that litigation. Instead, Mrs. Travis

represented herself in pro per. There is also no indication that

Lopez’s interests were adequately represented by Mrs. Travis’s

pro se litigation. It would seem that her interests actually lay

in favor of shifting blame to Lopez and Mr. Travis in order to

clear herself of wrongdoing. While their interests may have been

united during the arrangement of the pledge agreement and

proposed collateral exchange, all indications are that those

interests diverged when the Raicevics filed suit against Lopez

and the Travises in the Superior Court. Lopez was not in privity

with Mrs. Travis and none of the exceptions that might bind him

to the Travis Findings as a nonparty are present. 

Issue preclusion in this case is an affirmative defense and

the party asserting it bears the burden of establishing the

necessary elements. Taylor at 907. Lopez has failed to do so in

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regard to the Travis Findings and the bankruptcy court did not

err when it declined to afford preclusive effect to that ruling.

D. The Record Before the Bankruptcy Court

Lopez also argues that the bankruptcy court erred when it

made its summary judgment determination based solely on the Final

Amended Judgment and asserts that it should have instead required

or reviewed additional supporting evidence - such as transcripts

from the trial.8 In considering a similar argument regarding

declarations, the Supreme Court has previously stated that

plaintiffs and defendants may move for summary judgment with or

without supporting affidavits or similar materials. Celotex

Corp., 477 U.S. at 323-24. “[T]he motion may, and should, be

granted so long as whatever is before the [trial court]

demonstrates that the standard for the entry of summary judgment,

as set forth in” Federal Rule of Civil Procedure 56(c), is

satisfied. Id. 

Further, the bankruptcy court did in fact have evidence in

addition to the Final Amended Judgment. The bankruptcy court’s

order specifically references the Superior Court’s docket sheet,

the jury’s special verdict and factual findings, and the Superior

Court’s minute order denying Lopez’s motion for a new trial and

judgment notwithstanding the verdict. The record in this appeal

also indicates that the bankruptcy court had before it the

opinion from the California Court of Appeal, Fourth Appellate

8 The specific request for trial transcripts appears unduly

burdensome in light of the detailed rulings that were provided by

the jury and the appellate court. The trial lasted more than a

week and the resulting transcripts would likely number thousands

of pages.

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District, in which the Superior Court’s judgment was upheld with

the exception of the award of attorneys’ fees. In the unlikely

event that there was any doubt as to what the trial court had

decided, the appellate decision discusses the events of the trial

in great detail. For example, the appellate court remarks that

the opening statements of the parties’ counsel correctly

indicated to the jury that this was a fraud case based on Lopez’s

misrepresentations in the May 2004 transmittal letter, and that

the trial court instructed the jury on the law governing the

causes of action for intentional and negligent misrepresentation.

It is true that the party seeking preclusion must introduce

a sufficient record of the prior proceeding to allow the court to

determine the exact issues previously litigated. Clark v. Bear

Sterns & Co., Inc., 966 F.2d 1318, 1321 (9th Cir. 1992). The

bankruptcy court in this case acknowledged that requirement and

then concluded that it had a sufficient record of the fraud

findings against Lopez because they were detailed and they

specifically addressed each of the elements required to prove a

fraud cause of action. Lopez claims that the Raicevics have

failed to provide any evidence of his fraudulent intent, or that

he knew Mr. Travis did not intend to pay the Raicevics, but the

record of the Superior Court case and its appeal and the jury’s

findings on intentional misrepresentation provide precisely that

- evidence of Lopez’s fraud.

VII. CONCLUSION

For all of the reasons set forth above, we AFFIRM the

bankruptcy court’s orders granting the Raicevics’ motion for

summary judgment, entering judgment of nondischargeability

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against Lopez, and denying Lopez’s motion for summary judgment.

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