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NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-14-1134-DKiTa

)

MICHELE RENEE CLARK, ) Bk. No. 10-41323-RN

)

Debtor. ) Adv. Proc. No. 10-03035-RN

______________________________)

)

ESTATE OF KIMBERLY KEMPTON, )

)

Appellant, )

)

v. ) M E M O R A N D U M1

)

MICHELE RENEE CLARK, )

)

Appellee. )

______________________________)

Argued and Submitted on October 23, 2014

at Malibu, CA

Filed - November 4, 2014

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Richard Neiter, Bankruptcy Judge, Presiding

 

Appearances: Charles G. Kinney argued for the appellant; Eric

Chomsky argued for the appellee.

 

Before: DUNN, KIRSCHER, and TAYLOR, Bankruptcy Judges.

FILED

NOV 04 2014

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

1 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 8013-1.

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Judith Kempton (“Appellant”), as personal representative of

the estate of Kimberly Kempton (“Ms. Kempton”), appeals the

bankruptcy court’s order (“Dismissal Order”) reopening and

dismissing Ms. Kempton’s adversary proceeding (“Adversary

Proceeding”) against chapter 7 debtor Michele R. Clark

(“Ms. Clark”), based on the claim preclusive effect of the state

court’s dismissal with prejudice of Ms. Kempton’s underlying

state law claims.2 As discussed in greater detail infra, we

consider this appeal as encompassing certain interlocutory orders

entered by the bankruptcy court in the adversary proceeding prior

to its entry of the Dismissal Order, but we do not consider

orders entered by the bankruptcy court in Ms. Clark’s main

chapter 7 case or orders entered in independent state court

proceedings. We AFFIRM.

I. FACTUAL BACKGROUND

Both the Appellant and Ms. Clark have filed excerpts of

record in this appeal, but their excerpts fail to include a

number of documents filed in the Adversary Proceeding that are

material to our disposition of this appeal.3 We have exercised

2 Unless otherwise indicated, all chapter and section

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

1532, and all “Rule” references are to the Federal Rules of

Bankruptcy Procedure, Rules 1001-9037. All “Civil Rule”

references are to the Federal Rules of Civil Procedure.

3 Ms. Clark argues in her answering brief that we should

summarily affirm the bankruptcy court based on deficiencies in

Appellant’s opening brief and excerpts of record and violations

by Appellant of the rules of appellate procedure. Appellant

clearly could have done better, but we certainly have seen worse. 

(continued...)

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our discretion to review the bankruptcy court’s Adversary

Proceeding and main case dockets and the documents on record

therein to assist us in our consideration of this appeal. See

O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d

955, 957-58 (9th Cir. 1989); Atwood v. Chase Manhattan Mortg. Co.

(In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003). The

following factual narrative relies on information gleaned from

that review as well as from the parties’ excerpts of record, but

the narrative is limited to factual information relevant to this

appeal.4

A. Pre-Bankruptcy Disputes

In 2005, Ms. Kempton and Charles G. Kinney, an attorney who

represented Ms. Kempton before the bankruptcy court and is one of

the attorneys representing Appellant in this appeal

(“Mr. Kinney”), purchased a residence on Fernwood Avenue in Los

3(...continued)

“It is too late in the day and entirely contrary to the spirit of

the [Civil Rules] for decisions on the merits to be avoided on

the basis of such mere technicalities.” Foman v. Davis, 371 U.S.

178, 181 (1962). Accordingly, we determine in our discretion to

proceed to consider the merits of Appellant’s appeal.

4 The parties have filed multiple motions to augment the

record and/or for judicial notice of various documents filed in

California state court proceedings and supplemental authorities

(“Motions for Judicial Notice”). We have considered the

supplemental authorities submitted to the extent that they relate

to the issues we are deciding in this appeal. As for the

documents, primarily orders, from state court proceedings, we

have considered such documents to the extent they were presented

to the bankruptcy court in the Adversary Proceeding, as discussed

in the following factual narrative, but otherwise deny the

Motions for Judicial Notice, as not presenting documents relevant

for our consideration in this appeal.

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Angeles (“Fernwood Property”) from Ms. Clark. Mr. Kinney

negotiated the Fernwood Property purchase contract for himself

and Ms. Kempton. 

Ms. Kempton and Mr. Kinney subsequently alleged that

Ms. Clark “intentionally, willfully, and maliciously concealed

many adverse material facts [about the Fernwood Property] during

the negotiations . . . , all of which were required to be

disclosed under California law.” Ms. Kempton and Mr. Kinney

eventually sued Ms. Clark and her real estate brokers for “fraud,

nondisclosure, and rescission” in California state court (the

“State Court Litigation”). Actually, Mr. Kinney filed and

pursued a number of lawsuits with regard to the purchase of the

Fernwood Property, described as follows by the California Court

of Appeal:

This unusual case involves Charles G. Kinney, a

lawyer who was declared a vexatious litigant in 2008 in

Los Angeles Superior Court. . . . Despite his status

as a vexatious litigant, Kinney has pursued a

persistent and obsessive campaign of litigation terror

against his neighbors and the City of Los Angeles. 

Kinney has evaded the effect of the 2008 prefiling

order by enlisting a cohort, Kimberly Jean Kempton, to

stand in his stead as plaintiff and appellant, because

Kinney can no longer represent himself in litigation

without prior court approval. . . . 

With Kinney at the helm, Kempton has pursued six

lawsuits in Los Angeles Superior Court over the last

five years. All of the lawsuits relate to the

[Fernwood Property]. [Ms. Kempton and Mr. Kinney] have

continually – and resoundingly – lost their cases in

the trial courts. As one trial judge aptly wrote in a

statement of decision, Kinney is “a relentless bully”

who displays “terrifying arrogance” by filing “baseless

litigation against the City and its citizens.”

After losing in the trial courts, [Ms. Kempton and

Mr. Kinney] have repeatedly appealed. Since 2007, they

have lost 13 appeals, had two appeals involuntarily

dismissed and had a writ petition summarily denied. We

conclude that Attorney Kinney is using [Ms.] Kempton as

his proxy or puppet in order to continue his career as

a vexatious litigant. This opinion and order will

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serve to curb that behavior.

In re Finding of Charles G. Kinney, as a Vexatous Litigant,

201 Cal.App.4th 951, 953 (2011); Adversary Proceeding Docket

No. 12, Exhibit A, at 3.5

In part as a result of the litigation barrage from

Mr. Kinney and Ms. Kempton, Ms. Clark sought relief in chapter 7

on August 6, 2010, in Case No. 2:10–bk–41323–RN (the “Main

Case”). 

B. The Adversary Proceeding

On November 8, 2010, Ms. Kempton filed the Adversary

Proceeding, Case No. 2:10–ap–03035. In the Adversary Proceeding

complaint, Ms. Kempton asserted exception to discharge claims

under §§ 523(a)(2)(A) and (6), based on claims made in the stayed

5 The California Court of Appeal went on to conclude:

Kinney has brought a multitude of cases – and lost

every one of them – in two different counties, all

relating to the properties he owns. When authorized,

the courts have ordered him to reimburse his opponents’

attorney fees. Despite paying tens of thousands of

dollars to his opponents for the attorney fees that

they needlessly incurred to fight him off, Kinney is

undeterred. He continues to sue and to appeal, wasting

vast quantities of judicial resources and taxpayer

money to process his absurd and unsupported claims. 

Kinney’s conduct must be stopped, immediately.

Id. at 960; Adversary Proceeding Docket No. 12, Exhibit A, at 5. 

The Court of Appeal’s Opinion served “as a prefiling order

prohibiting Kinney from filing any new litigation – either in his

own name or in the name of [Ms. Kempton] – in the courts of

[California] without first obtaining leave of the presiding

judge.” Id. at 960-61; Adversary Proceeding Docket No. 12,

Exhibit A, at 6.

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State Court Litigation. Ms. Clark filed an answer to the

complaint on December 16, 2010. 

The bankruptcy court held a case management conference in

the Adversary Proceeding on January 20, 2011. We do not know

what was discussed at the case management conference because we

have not been provided with a transcript. However, the

bankruptcy court entered an Order re: Case Management (“Case

Management Order”) on March 3, 2011, staying the Adversary

Proceeding pending the outcome of the State Court Litigation. 

The Case Management Order further provided:

2. [Ms.] Clark must appear and defend in the [State

Court Litigation], which amounts to relief from the

bankruptcy automatic stay as to her, subject to the

Bankruptcy Court’s review of, and decision regarding,

any judgment entered by the State Court against

[Ms.] Clark before any enforcement of that State Court

judgment can occur.

3. If such a judgment against [Ms.] Clark is entered

in the State Court [Litigation], enforcement of said

judgment is still subject to the stay of 11 USC 362 and

will require a further order of this Court.

Over a year later, on April 27, 2012, Ms. Kempton moved to

vacate (“Motion to Vacate”) the Case Management Order sending the

State Court Litigation back to the California state court,

arguing, among other things, that Ms. Clark’s attorneys might

succeed in having the State Court Litigation dismissed “using

State Court laws.” Ms. Clark opposed the Motion to Vacate, and

Ms. Kempton replied to Ms. Clark’s opposition. 

In fact, on or about May 21, 2012, the California State

Court entered an order (“Security Order”) in the State Court

Litigation in response to Ms. Clark’s motion as follows:

IT IS HEREBY ORDERED . . . that Plaintiff Kempton is

declared a Vexatious Litigant in this litigation

because she is a strawman for Kinney, and/or Kinney is

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using her as his puppet or proxy in this litigation. 

The Court bases this finding on In re Kinney (2011)

201 Cal.App.4th 951, and Kempton’s failure to submit a

declaration disputing this finding. In light of the

prior findings that Kinney is a vexatious litigant

under CCP § 391.1, Kempton is bound by this

determination in this case. Kempton shall post

security in the sum of $185,000 no later than 6/4,

2012, for Clark’s attorneys’ fees and other defense

expenses in the event judgment is against Plaintiff. 

If the bond is not posted by this date, the case shall

be dismissed. 

Adversary Proceeding Docket No. 12. 

On June 13, 2012, Ms. Kempton filed a motion for a temporary

restraining order in the Adversary Proceeding, seeking to vacate

the Case Management Order (and, from Ms. Kempton’s perspective,

hoping to void any intervening orders entered by the California

state court in the State Court Litigation) and to set a trial

date in the Adversary Proceeding. In her motion, she claimed

that irreparable harm would result to her if the State Court

Litigation were dismissed based on the requirements of the

Security Order.

On June 15, 2012, the California state court entered an

order (“State Court Litigation Dismissal Order”) dismissing the

State Court Litigation with prejudice based upon Ms. Kempton’s

failure to satisfy the requirements of the Security Order. There

is no evidence in the record before us that Ms. Kempton ever

appealed the State Court Litigation Dismissal Order. Ms. Clark

has submitted in her excerpts of record a Remittitur and Order

from the California Court of Appeal, entered December 31, 2012

and September 13, 2012 respectively, that evidence denial of

Mr. Kinney’s appeals from “vexatious litigant” and prefiling

orders entered against him. On April 29, 2013, the United States

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Supreme Court denied Mr. Kinney’s petition for writ of

certiorari, which, among other things, denied Mr. Kinney’s

request for a trial in federal court of Ms. Kempton’s claims in

the Adversary Proceeding. See Adversary Proceeding Docket

No. 54, at 6. The State Court Litigation Dismissal Order is

final for California state law purposes.

The Motion to Vacate was heard by the bankruptcy court on

June 19, 2012. Again, we have not been provided with a

transcript; so, we do not know what was discussed at the June 19,

2012 hearing. However, the bankruptcy court posted a tentative

decision in advance of the hearing that was incorporated in and

attached to its order denying the Motion to Vacate, entered on

July 30, 2012 (the “July 30, 2012 Order”). 

In its tentative decision, the bankruptcy court indicated

that it was inclined to deny the Motion to Vacate for a number of

reasons, including the following: 1) If the State Court

Litigation were dismissed for failure to post the required

security bond, such dismissal “will be by Plaintiff’s

[Ms. Kempton’s] own doing” in light of the California state

court’s holding, “consistent with the California Court of Appeal

and Supreme Court,” that “Mr. Kinney and/or Ms. Kempton are

vexatious litigants.” In such circumstances, the bankruptcy

court would “give full faith and credit to the [California state

court’s] decision to dismiss the case, and the [Adversary

Proceeding] will also be dismissed.” 2) If the State Court

Litigation were not dismissed, the bankruptcy court had already

decided that the State Court Litigation should continue in

California state court because the State Court Litigation

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involves State law issues and non-debtor parties (such

as the Real Estate Broker); the State law claims can be

most expeditiously tried in State Court; they can be

tried by a jury in that Court but not in Bankruptcy

Court . . .; the litigation over the subject real

estate transaction has been pending in the State Court

since 2006; and this Court sees no reason to vacate the

[Case Management Order].

On December 6, 2012, the Adversary Proceeding was closed

administratively. On December 17, 2012, Ms. Kempton moved to

reopen the Adversary Proceeding, asserting, among other reasons,

that the “debt” owed by Ms. Clark to Ms. Kempton “was never

determined by any court.” In his Declaration filed in support of

the motion to reopen, Mr. Kinney advised that he had filed a

motion in the California state court to overturn the Security

Order. Thereafter, the Adversary Proceeding was reopened, as

closed by inadvertent clerical error, by order entered on

December 20, 2012.

On October 4, 2013, the Adversary Proceeding again was

closed administratively, in conjunction with the closing of the

Main Case, since “it appears that no further matters are pending

that require this [Adversary Proceeding] remain open.” On

November 4, 2013, the Appellant [Ms. Kempton apparently was now

deceased] moved to reopen the Adversary Proceeding, supported by

the Declaration of Mr. Kinney. A hearing (“Hearing”) was set on

the motion to reopen for March 13, 2014. Ms. Clark opposed the

motion to reopen, supported by the Declaration of her counsel. 

The Appellant filed a reply on March 6, 2014.

The bankruptcy court posted a tentative ruling in advance of

the Hearing. At the Hearing, after hearing argument from counsel

for the Appellant and Ms. Clark, the bankruptcy court stated that

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1) it would reopen the Adversary Proceeding because it was not

properly closed on October 4, 2013, and 2) it then would dismiss

the Adversary Proceeding “because the underlying fraud action was

dismissed in State Court.” Tr. of March 13, 2014 hr’g, 8:14-17;

11:7-11.

On March 21, 2014, the bankruptcy court entered the

Dismissal Order, reopening and dismissing the Adversary

Proceeding. In the Dismissal Order, the bankruptcy court

incorporated all but the last two sentences of its tentative

ruling. In its tentative ruling, the bankruptcy court noted that

the October 4, 2013 closing of the Adversary Proceeding was

inappropriate procedurally in that none of the reasons stated on

the closing docket entry applied. Accordingly, the bankruptcy

court would reopen the Adversary Proceeding to correct the

clerical error in closing it. However, getting to the substance

of the matter, the bankruptcy court noted that, “[t]he dismissal

of the [State Court Litigation] is final and no appeal of the

dismissal was taken.” Dismissal Order, at 4. “[I]n view of the

final non-appealable order in the state court dismissing the

[State Court Litigation], there appears to be no basis for the

Plaintiff’s nondischargeability claim but an order to that effect

needs to be entered in order to dispose of the [Adversary

Proceeding] properly.” Dismissal Order, at 6. 

The Appellant filed a timely Notice of Appeal on March 24,

2014.6

6 In her Answering Brief, Ms. Clark argues that this appeal

(continued...)

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II. 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.

III. ISSUES

In the Statement of Issues filed with the bankruptcy court

(Adversary Proceeding Docket No. 73) and in her Opening Brief,

Appellant lists eighteen issues for consideration in this appeal. 

Some of the listed issues relate to proceedings and orders in the

Main Case, in California state courts and in federal district

court that are not properly before us in this appeal, as

discussed more fully infra. Otherwise, we distill the issues

before us in this appeal down to the following two:

1) Did the bankruptcy court abuse its discretion in staying

the Adversary Proceeding pending the outcome of the State Court

Litigation and in granting relief from stay so that the State

Court Litigation could proceed?

2) Did the bankruptcy court err in dismissing the Adversary

Proceeding based on its conclusion that no debt was owed by

Ms. Clark to Ms. Kempton and the Appellant, as Ms. Kempton’s

6(...continued)

is untimely for some or all purposes, as no Notice of Appeal was

filed within fourteen days following the administrative closing

of the Adversary Proceeding on October 4, 2013, pursuant to the

requirements of Rule 8002(a). Since we agree with the bankruptcy

court that the closing of the Adversary Proceeding on October 4,

2013 was the result of clerical error, the operative order was

the Dismissal Order, entered on March 21, 2014, and the Notice of

Appeal filed in behalf of the Appellant three days later was

timely.

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successor in interest?

IV. STANDARDS OF REVIEW

We review a bankruptcy court’s decision to dismiss an

adversary proceeding on the pleadings de novo. Henry A. v.

Willden, 678 F.3d 991, 998 (9th Cir. 2012). Likewise, we review

a bankruptcy court’s summary judgment determinations and its

interpretations of bankruptcy and state law de novo. Trunk v.

City of San Diego, 629 F.3d 1099, 1105 (9th Cir. 2011) (summary

judgment); Hopkins v. Cerchione (In re Cerchione), 414 B.R. 540,

545 (9th Cir. BAP 2009) (interpretation of the Bankruptcy Code

and state law). De novo means that we consider a matter anew, as

if no decision previously had been rendered. Dawson v. Marshall,

561 F.3d 930, 933 (9th Cir. 2009). 

We review a bankruptcy court’s case management decisions for

abuse of discretion. GCB Commc’ns, Inc. v. U.S. S. Commc’ns,

Inc., 650 F.3d 1257, 1262 (9th Cir. 2011); Rivera v. Orange Cnty

Probation Dept. (In re Rivera), 511 B.R. 643, 648 (9th Cir. BAP

2014). A bankruptcy court abuses its discretion if it applies an

incorrect legal standard or misapplies the correct legal

standard, or if its fact findings are illogical, implausible or

without support from evidence in the record. TrafficSchool.com

v. Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011).

We may affirm a decision of the bankruptcy court on any

basis supported by the record. Shanks v. Dressel, 540 F.3d 1082,

1086 (9th Cir. 2008).

V. DISCUSSION

A. Main Case Proceedings and Orders

We begin our analysis by discussing some matters that are

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not appropriately considered in this appeal. Rule 8001 sets

forth the procedure for appealing bankruptcy court orders and

judgments. Rule 8001(a), which is adapted from Rule 3(a) of the

Federal Rules of Appellate Procedure (“FRAP”), provides that:

An appeal from a judgment, order, or decree of a

bankruptcy judge to a district court or bankruptcy

appellate panel as permitted by 28 U.S.C. § 158(a)(1)

or (a)(2) shall be taken by filing a notice of appeal

with the clerk within the time allowed by Rule 8002

. . . . The notice of appeal shall (1) conform

substantially to the appropriate Official Form, . . . .

The appropriate Official Form is Form 17, which provides in its

initial paragraph as follows:

_____________, the plaintiff [or defendant or other

party] appeals under 28 U.S.C. § 158(a) or (b) from the

judgment, order, or decree of the bankruptcy judge

(describe) entered in this adversary proceeding [or

other proceeding, describe type] on the ___ day of 

(month), (year).

Accordingly, the appellant is required to designate in the notice

of appeal the specific judgment or order appealed from in the

particular concerned case. 

In the Notice of Appeal filed by Appellant herein, Appellant

states that she is appealing the Dismissal Order, copies of which

are attached to the Notice of Appeal.7 The Notice of Appeal 

does not identify any other order(s) that the Appellant seeks to

appeal.

We discuss interlocutory orders in the Adversary Proceeding

that merged in the final Dismissal Order infra, but proceedings

7 The Dismissal Order apparently was docketed both as an

order reopening the Adversary Proceeding (see Adversary

Proceeding Docket No. 62) and as an order dismissing the

Adversary Proceeding (see Adversary Proceeding Docket No. 63).

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and orders in the Main Case are fundamentally different in that

the Main Case and the Adversary Proceeding are not the same

cases. “An adversary proceeding is . . . part of the bankruptcy

but it is not the bankruptcy case itself, as illustrated by the

fact that the dismissal of an adversary proceeding is an

appealable final order even though the bankruptcy [main] case

continues.” United States v. Peel, 595 F.3d 763, 768-69 (7th

Cir. 2010), cert. denied, Peel v. United States, 131 S.Ct. 994

(2011) (citing Marchiando v. Illinois (In re Marchiando), 13 F.3d

1111, 1113-14 (7th Cir. 1994)). The Appellant did not designate

or identify any order(s) in the Main Case that she sought to

appeal in her Notice of Appeal.

A mistake in designating an order or judgment that the

appellant seeks to appeal in a notice of appeal is not

necessarily fatal to an appeal “so long as the intent to appeal a

specific judgment can be fairly inferred from the notice and

appellee is not misled by the mistake.” Kelly v. United States,

789 F.2d 94, 96 n.3 (1st Cir. 1986). See Foman v. Davis,

371 U.S. 178 (1962). “[I]f a litigant files papers in a fashion

that is technically at variance with the letter of a procedural

rule, a court may nonetheless find that the litigant has complied

with the rule if the litigant’s action is the functional

equivalent of what the rule requires.” Torres v. Oakland

Scavenger Co., 487 U.S. 312, 316-17 (1988) (emphasis added). 

However, that liberal principle of construction is not without

limits and does not excuse noncompliance with the rules of

appellate procedure. See Smith v. Barry, 502 U.S. 244, 248

(1992). “[A]lthough a court may construe [FRAP] liberally in

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determining whether they have been complied with, it may not

waive the jurisdictional requirements of Rules 3 and 4, even for

‘good cause shown’ under Rule 2, if it finds that they have not

been met.” Torres v. Oakland Scavenger Co., 487 U.S. at 317.

Nothing in the Notice of Appeal here gives any indication

that Appellant sought to appeal any order in the Main Case. 

Since the Main Case was closed on October 4, 2013, the deadline

for filing a notice of appeal with respect to any order in the

Main Case under Rule 8002 is long past. Nothing in the record

before us tends to establish that the Appellant or her

predecessor in interest ever filed a notice of appeal with

respect to any order entered in the Main Case. Accordingly, we

do not consider any issues raised by Appellant as to the actions

of the chapter 7 trustee or Ms. Clark’s attorneys in the Main

Case and specifically, any abandonment order(s) entered by the

bankruptcy court in the Main Case as encompassed by this appeal. 

See, e.g., Spookyworld, Inc. v. Town of Berlin

(In re Spookyworld, Inc.), 346 F.3d 1, 6 (1st Cir. 2003).

B. The Case Management Order

Pulling together the threads of Appellant’s wide-ranging

arguments in her opening brief presents a challenge, but we

interpret one argument submitted by Appellant as follows: Lifting

the automatic stay of § 362 in the Case Management Order was

procedurally improper because the requirements of § 362(d) were

not followed. See Appellant’s Opening Brief, at 17 and 24. In

relevant part, § 362(d) provides that in appropriate

circumstances, the automatic stay can be lifted “[o]n request of

a party in interest and after notice and a hearing.”

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Appellant did not designate the Case Management Order in her

Notice of Appeal as an order that she was appealing. However, in

her Statement of Issues, issue number two is stated as: “Whether

the US Bankruptcy Court can transfer KEMPTON’s adversary

proceeding to the State Court for a determination by the State

Court of any ‘debt’ owed by CLARK to KEMPTON on March 3, 2011,

without any motion for relief from stay or similar motion to

allow such a transfer to State Court under 11 U.S.C. Sec. 362?” 

See Adversary Proceeding Docket No. 73, at 3. The Case

Management Order was an interlocutory order in the Adversary

Proceeding that without leave, could not be appealed until a

final judgment, i.e., the Dismissal Order, was entered. See,

e.g., 28 U.S.C. § 158(a); Baldwin v. Redwood City, 540 F.2d 1360,

1364 (9th Cir. 1976); Adamian v. Jacobsen, 523 F.2d 929, 931 (9th

Cir. 1975). Since Appellant manifested a clear intent to appeal

the interlocutory Case Management Order in her Statement of

Issues and argued that lifting the stay in the Case Management

Order was not proper procedurally in her opening brief, to which

argument Ms. Clark responded in her answering brief (see

Appellee’s Answering Brief, at 11 and 15-18), we conclude that it

is appropriate to consider the Case Management Order in this

appeal. See Foman v. Davis, 371 U.S. at 181.

However, considering the entire record before us (and what

is not before us) in this appeal, we conclude that we must affirm

the Case Management Order for the following reasons:

1. “Where there is a clearly inadequate record on appeal,

we have ‘little choice’ but to affirm.” Hardcastle v. Greer

(In re Hardcastle), 2013 WL 5944042, at *9 (9th Cir. BAP Nov. 7,

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2013) (emphasis in original), citing Morrissey v. Stuteville

(In re Morrissey), 349 F.3d 1187, 1191 (9th Cir. 2003). As noted

above, while Appellant included the Case Management Order itself

in her excerpts of record, we do not have a transcript of the

case management conference that generated the order. So, we do

not know what was discussed at the case management conference or

what rationale the bankruptcy court articulated in determining to

issue the Case Management Order. In light of Appellant’s failure

to provide us with a transcript of the case management

conference, we are entitled to presume that the Appellant does

not think that a transcript would be helpful to her in this

appeal. See Gionis v. Wayne (In re Gionis), 170 B.R. 675, 681

(9th Cir. BAP 1994).

2. “As a general rule issues which have not been raised in

the trial court will not be reviewed on appeal.” Scott v.

Pacific Maritime Ass’n, 695 F.2d 1199, 1203 (9th Cir. 1983). 

“Ordinarily, if an issue is not raised before the trial court, it

will not be considered on appeal and will be deemed waived.” 

Levesque v. Shapiro (In re Levesque), 473 B.R. 331, 336 (9th Cir.

BAP 2012). Beverly Cmty. Hosp. Ass’n v. Belshe, 132 F.3d 1259,

1267 (9th Cir. 1997) (“[B]efore an appellate court will consider

. . . an issue, ordinarily the argument must have been raised

sufficiently for the trial court to rule on it.”). 

We have reviewed the documents on the Adversary Proceeding

docket very carefully, and we do not find that Appellant or

Ms. Kempton ever argued to the bankruptcy court that the Case

Management Order was improperly entered because the bankruptcy

court lifted the § 362 stay sua sponte to allow the State Court

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Litigation to proceed. The only reference to this issue that we

have been able to find in pleadings by Ms. Kempton or the

Appellant in the Adversary Proceeding is the following statement

in the “History” section of Appellant’s reply pleading with

respect to her motion to reopen the Adversary Proceeding: “This

Court at a case management conference for the [Adversary

Proceeding] ordered CLARK to ‘appear and defend’ in a 2007 State

Court fraud case on March 3, 2011 without any party requesting

such relief (e.g. from the automatic stay) under 11 U.S.C.

Sec. 362.” See Adversary Proceeding Docket No. 61, at 2

(emphasis in original). That document was filed more than two

years after the Case Management Order was entered. No argument

that the Case Management Order was improper because no party had

moved in advance for relief from the automatic stay to allow the

State Court Litigation to proceed was made by Appellant’s counsel

at the Hearing.

3. As to the substance of Appellant’s argument, the Case

Management Order documents decisions of the bankruptcy court made

at the case management conference in January 2011. As we noted

supra, case management decisions are reviewed for abuse of

discretion. GCB Commc’ns, Inc. v. U.S. S. Commc’ns, Inc.,

650 F.3d at 1262; In re Rivera, 511 B.R. at 648. 

Rule 7016 makes Civil Rule 16 applicable in adversary

proceedings in bankruptcy. Civil Rule 16(a) states the purposes

for a pretrial or case management conference as follows:

In any action, the court may order the attorneys and

any unrepresented parties to appear for one or more

pretrial conferences for such purposes as:

(1) expediting disposition of the action;

(2) establishing early and continuing control so 

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that the case will not be protracted because of

lack of management;

(3) discouraging wasteful pretrial activities;

(4) improving the quality of the trial through 

more thorough preparation; and

(5) facilitating settlement.

Although our review is hampered by the absence of a transcript of

the case management conference, there are indications in the

Adversary Proceeding record as to the reasoning behind the

bankruptcy court’s decision to stay the Adversary Proceeding

until the underlying State Court Litigation was resolved. 

In the Motion to Vacate, counsel for Ms. Kempton noted that

“this Court expected a ‘trial’ to occur in State Court but then

come back to this Court for ‘judgment’ with required findings and

conclusions [to benefit CLARK so she would not have to go through

2 trials in pro per].” See Adversary Proceeding Docket No. 6, at

2. In its tentative decision incorporated in the July 30, 2012

Order, the bankruptcy court further noted that it already had

decided (presumably at the case management conference) that the

State Court Litigation should continue to a conclusion in the

California state court because the State Court Litigation

involves State law issues and non-debtor parties (such

as the Real Estate Broker); the State law claims can be

most expeditiously tried in State Court; they can be

tried to a jury in that Court but not in Bankruptcy

Court . . .; the litigation over the subject real

estate transaction has been pending in the State Court

since 2006 . . . . 

Contrary to Appellant’s argument, there is authority that a

bankruptcy court can lift the automatic stay of § 362 sua sponte

in appropriate circumstances. Section 105(a) provides that,

The [bankruptcy] court may issue any order, process, or

judgment that is necessary or appropriate to carry out

the provisions of this title. No provision of this

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title providing for the raising of an issue by a party

in interest shall be construed to preclude the

[bankruptcy] court from, sua sponte, taking any action

or making any determination necessary or appropriate to

enforce or implement court orders or rules, or to

prevent an abuse of process.

Section 105(a) has been interpreted as allowing a bankruptcy

court to lift the automatic stay sua sponte to allow related

litigation to proceed in another court. See, e.g.,

In re Laventhol & Horwath, 139 B.R. 109, 116 and n.6 (Bankr.

S.D.N.Y. 1992); Bellucci v. Swift (In re Bellucci), 119 B.R. 763,

778-79 (Bankr. E.D. Cal. 1990). See also In re Henderson,

395 B.R. 893, 899 (Bankr. D.S.C. 2008); Harris v. Margaretten

(In re Harris), 203 B.R. 46, 50 n.1 (Bankr. E.D. Va. 1994). Cf.

Case Management Manual for United States Bankruptcy Judges 73

(Fed. Judicial Center, 2d ed. 2012) (“From a practical

standpoint, an order granting abstention should include a

provision granting relief from the automatic stay to permit the

matter to proceed in the appropriate forum.”).

In these circumstances, we do not perceive an abuse of

discretion in the bankruptcy court’s decision to lift the

automatic stay of § 362 to allow the State Court Litigation to

proceed in the California state courts prior to moving forward

with the Adversary Proceeding, and we conclude that the

bankruptcy court did not err in entering the Case Management

Order.8

8 In her reply brief, Appellant includes the July 30, 2012

Order among the orders to which her Notice of Appeal might relate

(see Appellant’s Reply Brief, at 10). However, she does not

(continued...)

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C. The State Court Litigation

In light of our conclusion that the bankruptcy court did not

abuse its discretion in lifting the automatic stay to allow the

State Court Litigation to proceed, we do not perceive that we

have any authority to review, let alone reverse, subsequent

orders and decisions of the California state courts in the State

Court Litigation. Under the Full Faith and Credit Act,

implementing the Constitution’s Full Faith and Credit Clause, we

are required to accord the decisions of state courts “the same

full faith and credit . . . as they have by law or usage in the

courts of such State . . . from which they are taken.” 28 U.S.C.

§ 1738; Migra v. Warren City Sch. Dist. Bd. of Edu., 465 U.S. 75,

80 (1984). In addition, we have no authority to review on appeal

the decisions of the California state courts in the State Court

Litigation. “[T]he Rooker-Feldman doctrine provides that the

United States Supreme Court is the only federal court that may

review an issue previously determined or ‘inextricably

intertwined’ with the previous action in state court between the

8(...continued)

assert any argument in her opening brief (or in her reply brief

either, for that matter) as to why the bankruptcy court erred in

entering the July 30, 2012 Order. “The Court of Appeals will not

ordinarily consider matters on appeal that are not specifically

and distinctly argued in the appellant’s opening brief.” Miller

v. Fairchild Indus., Inc., 797 F.2d 727, 737 (9th Cir. 1986). 

Christian Legal Soc. v. Wu, 626 F.3d 483, 487-88 (9th Cir. 2010);

Jodoin v. Samayoa (In re Jodoin), 209 B.R. 132, 143 (9th Cir. BAP

1997). Since Appellant does not make any argument asserting

error with respect to the July 30, 2012 Order, any such argument

is waived, and we do not consider the July 30, 2012 Order

further.

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same parties.” Huse v. Huse-Sporsem, A.S. (In re Birting

Fisheries, Inc.), 300 B.R. 489, 498 (9th Cir. BAP 2003). See

D.C. Court of Appeals v. Feldman, 460 U.S. 462, 486 (1983); and

Rooker v. Fid. Trust Co., 263 U.S. 413, 415-16 (1923).

Appellant argues that all such orders “are void since

[Ms. Kempton’s] adversary proceeding precludes those state court

decisions.” Appellant’s Opening Brief, at 23. We disagree. 

This Panel did conclude in In re Birting Fisheries, Inc.,

300 B.R. at 498, that, “[w]hen a matter comes within the

bankruptcy court’s exclusive jurisdiction . . . general

preclusion rules and the Rooker-Feldman doctrine do not apply.” 

See, e.g., Kalb v. Feuerstein, 308 U.S. 433, 438-39 (1940)

(“Congress, because its power over the subject of bankruptcy is

plenary, may by specific bankruptcy legislation create an

exception . . . and render judicial acts taken with respect to

the person or property of a debtor whom the bankruptcy law

protects nullities and vulnerable collaterally.”). 

However, when the bankruptcy court sent the State Court

Litigation back to the California state courts for determination,

it required Ms. Clark to defend the purely state law claims

asserted by Ms. Kempton in her state court complaint for fraud,

breach of contract and nondisclosure, nothing less, but nothing

more. The bankruptcy court did not send the exception to

discharge claims before it to state court, but retained its

authority to adjudicate claims under § 523(a)(2) and (6) between

the parties, if such claims remained to be decided after the

State Court Litigation was concluded. In these circumstances, we

simply have no authority to review the decisions reached by the

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California state courts in the State Court Litigation in this

appeal. We discuss the result in the State Court Litigation and

its impact on the Adversary Proceeding in the next section of the

Discussion.

D. The Dismissal Order

Some clarification is in order as to what the Dismissal

Order represents procedurally. Appellant characterizes the

Dismissal Order as a “defacto” involuntary dismissal under Civil

Rule 52(c), applicable in adversary proceedings in bankruptcy

under Rule 7052, which applies to a judgment entered by the court

in a nonjury trial, finding against a party on a claim after such

party has been fully heard on a dispositive issue. See

Appellant’s Opening Brief, at 24. Since, as Appellant is

painfully aware, no trial was held on her claims in the Adversary

Proceeding, we suggest that it is more accurate to characterize

the Dismissal Order as dismissing Appellant’s claims on the

pleadings under Civil Rule 12(c), applicable in adversary

proceedings in bankruptcy under Rule 7012(b), for failure to

state a claim upon which relief can be granted. However, since

the bankruptcy court considered matters and evidence outside the

pleadings from the parties’ legal memoranda and declarations in

arriving at its decision to dismiss the Adversary Proceeding, we

consider the Dismissal Order as in the nature of a summary

judgment under Civil Rule 56, applicable in adversary proceedings

in bankruptcy under Rule 7056. Jacobson v. AEG Capital Corp.,

50 F.3d 1493, 1496 (9th Cir. 1995). In any event, as noted

above, however we characterize the Dismissal Order, the

applicable standard for our review is de novo. 

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Appellant argues that we should vacate the Dismissal Order

and remand to the bankruptcy court for further proceedings

because the Appellant “is entitled to have a trial in her

[A]dversary [P]roceeding against [Ms.] Clark.” Appellant’s

Opening Brief, at 24. We disagree for the following reasons.

We start our analysis by reviewing the statutory provisions

on which Appellant relies to state her claims. 

Sections 523(a)(2)(A) and (a)(6) provide in relevant part as

follows:

(a) A discharge under section 727 . . . of this title

does not discharge an individual debtor from any debt–

(2) for money [or] property . . . to the extent

obtained, by–

(A) false pretenses, a false representation,

or actual fraud . . . ;

(6) for willful and malicious injury by the debtor

to another entity or to the property of another

entity . . . . (Emphasis added.)

Accordingly, a condition precedent to pursuing a claim under

§ 523(a)(2)(A) or (a)(6) is that the debtor owe a “debt” to the

claimant.

The term “debt” is defined in the Bankruptcy Code as a

“liability on a claim,” and in turn, a “claim” is defined as:

(A) right to payment, whether or not such right is

reduced to judgment, liquidated, unliquidated, fixed,

contingent, matured, unmatured, disputed, undisputed,

legal, equitable, secured, or unsecured; or

(B) right to an equitable remedy for breach of

performance if such breach gives rise to a right to

payment, whether or not such right to an equitable

remedy is reduced to judgment, fixed, contingent,

matured, unmatured, disputed, undisputed, secured, or

unsecured.

Sections 101(12) and 101(5), respectively.

Both terms are very broad, and the Supreme Court has held

that they are coextensive. See Pennsylvania Dept. of Public

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Welfare v. Davenport, 495 U.S. 552, 558 (1990). However, their

compass is not limitless. 

We have said that “claim” has “the broadest available

definition,” Johnson v. Home State Bank, 501 U.S. 78,

83 . . . (1991), and have held that the “plain meaning

of a ‘right to payment’ is nothing more nor less than

an enforceable obligation” . . . .

FCC v. NextWave Personal Communications Inc., 537 U.S. 293, 302-

03 (2003), quoting Pennsylvania Dept. of Public Welfare v.

Davenport, 495 U.S. at 559 (emphasis added). Appellant’s

fundamental problem in this appeal is that no enforceable

obligation underlies the claims for relief she asserts in the

Adversary Proceeding.

Ms. Kempton’s allegations in the Adversary Proceeding

complaint essentially overlay her claims asserted in the State

Court Litigation with allegations addressing the elements of

§ 523(a)(2)(A) and (a)(6) claims. In the Case Management Order,

the bankruptcy court stayed the Adversary Proceeding and lifted

the automatic stay to allow the State Court Litigation to proceed

to establish any debt owed by Ms. Clark to Ms. Kempton. In

pleadings before the bankruptcy court in the Adversary Proceeding

(see, e.g., Adversary Proceeding Docket No. 25, at 2 and 4; and

Adversary Proceeding Docket No. 61, at 2) and in her opening

brief in this appeal (see Appellant’s Opening Brief, at 16),

Ms. Kempton and Appellant have admitted that the California state

court had concurrent jurisdiction with the bankruptcy court to

determine the “debt” owed, if any, by Ms. Clark to Ms. Kempton. 

The California state court ultimately dismissed the State

Court Litigation based on Ms. Kempton’s failure to satisfy the

terms of the Security Order. The dismissal of the State Court

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Litigation resulted from the application of a state law

procedural requirement without a trial ever having occurred in

California state court. However, the State Court Litigation

Dismissal Order dismissed the State Court Litigation with

prejudice, and the record reflects that no appeal ever was taken

from that dismissal order. Accordingly, the dismissal of the

State Court Litigation is final. 

Under California law, a dismissal with prejudice, whether it

is procedural or on the merits, has claim preclusive effect. See

Boeken v. Philip Morris USA, Inc., 48 Cal.4th 788, 809-810 (Cal.

2010) (“[F]or purposes of applying the doctrine of res judicata 

. . . a dismissal with prejudice is the equivalent of a final

judgment on the merits, barring the entire cause of action.”;

Roybal v. Univ. Ford, 207 Cal.App.3d 1080, 1086-87 (1989) (“The

statutory term ‘with prejudice’ clearly means the plaintiff’s

right of action is terminated and may not be revived. . . . [A]

dismissal with prejudice . . . bars any future action on the same

subject matter.”). 

“[A] federal court must give to a state-court judgment the

same preclusive effect as would be given that judgment under the

law of the State in which the judgment was rendered.” Migra v.

Warren City Sch. Dist. Bd. of Edu., 465 U.S. at 896, citing Allen

v. McCurry, 449 U.S. 90, 96 (1980). Gayden v. Nourbakhsh

(In re Nourbakhsh), 67 F.3d 798, 801 (9th Cir. 1995);

In re Birting Fisheries, Inc., 300 B.R. at 497-98 (“Rules of

federal and state comity establish that federal courts are

required to give prior state court judgments the same preclusive

effect as the state court that rendered the judgment.”). The

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Supreme Court has held that preclusion principles apply in

exception to discharge actions in bankruptcy. See Grogan v.

Garner, 498 U.S. 284-85 n.1 (1991); Cal-Micro, Inc. v. Cantrell

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

The effect of a final California state court dismissal of

the State Court Litigation with prejudice is that no enforceable

obligation, i.e., no debt, is owed by Ms. Clark to Ms. Kempton. 

The condition precedent of such a debt for the Appellant to

pursue the exception to discharge claims asserted in the

Adversary Proceeding consequently cannot be satisfied, and we

conclude as a matter of law, that the bankruptcy court did not

err in dismissing the Adversary Proceeding.

VI. CONCLUSION

For the foregoing reasons, we AFFIRM the orders of the

bankruptcy court appropriately before us in this appeal,

including the Case Management Order and the Dismissal Order.

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