N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
In re : JAM ES DONZIL R OB ER TS, Sr.; DEENA WALDM AN R OB E R TS,

De btors,

------------------------------ JAM ES DONZIL R O B ER TS, Sr.,

Appe lla nt,
v. M IC HAEL B AR

NES; C A LIFOR

NIA FARM S INVESTOR S, LLC ,

Appe lle e s. No. 17-60086 B AP No. 17-1010
M EM O R ANDUM *

Appe a l from

the Ninth C irc uit B ankruptc y

Appe lla te Pane l Tay lor, La ffe rty

III, and Spra

ke r, B ankruptc y

Judge s, Pre siding Subm itte d

M ay 13, 2019 ** Pa sa de n a , C a l ifornia 

# FIL ED
M AY15 2019 M OLLY C. DW Y ER, CLERK U

. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public ation a

n d is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.

* * The pa ne l una nim ously c onc lude s this c a se is suita ble for de c ision without oral a

rgum e nt. Se e Fe d. R . App. P. 34(a)(2).B e fore : NGUYEN a n d OW ENS, C irc uit Judge s, a nd ANTOON, *** Distric t Judge
. Jam e s R obe rts a

ppe a ls from

the de c ision of theB ankruptc y Appe lla t e Pane l (“ B AP” ) a ffirm ing the judgm e nt of the ba nkruptc y c ourt in fa

v or of M ic ha e l B arne s a n d C a lifornia Fa

rm s Inve s tors, LLC (c olle c tive l y , “ B arne s ” ). W e have jurisdic tion unde r 28 U.S.C
. § 158(d), a nd we a ffirm
. The ba nkruptc y c o urt e nte re d judgm e nt for B arne s in theam ount of $825,000. R

obe rts c ha lle nge s tha

t judgm e nt on two grounds, a rguing first tha

t the
am ount of thejudgm e nt should be offse t by the va lue of the c olla

te ra l B a rne s brie fly posse sse d, a

nd se c o n d tha

t B arne s’ re m e die s a

re lim ite d by

C a lifornia C om m e rc ia l C ode se c tion 9625 be c a use B arne s a lle ge dly dispose d of the c olla

te ra l in a c om m e rc ia lly unre a sona

ble m anne r. R obe rts c onc e de s tha t he fa i le d to pre se nt the s e argum e nts to theba nkruptc y c ourt but a

rgue s tha t we have disc re t ion to
c onside r the m

be c a use (1) “ re vie w is re q

uire d to ‘ pre ve nt a

m i sc arria ge of justic e or to pre se rve the inte grity of the judic ia l proc e ss’ ” or (2) “ the issue pre se nte d is pure ly one of la w a nd e ithe r doe s not depe n d on the fa c tua l re c ord de v e lope d be low, or the pe rtine nt re c ord ha s be e n fully de ve lope d.” M

ano-Y& M, Ltd. v

. Fie l d (In reMortg. Store

, Inc .) , 773 F.3d 990, 998 (9th C ir. 2014) (quoting In re

* * * The Honora

ble John Antoon II, Unite d State s Distric t Judge for the M iddle Distric t

of Florida , sitting by

de s igna tion. 2Me rc ury

Inte rac tiv e C

orp. Se c . Litig. , 618 F.3d 988, 992 (9th C ir. 2010)). W e
a gre e with theB AP that ne ithe r of the se e xc e ptions a pplie s he re , a

nd the re fore we do not re a c h the m e rits of R obe rts’ c ha lle nge s to theba nk ruptc y c ourt’ s judgm e nt. 1. R obe rts c onte nds tha t the m isc arria ge of justic e e xc e ption a p plie s be c a use B arne s ha s re c ove re d twic e for the sa m e loss – onc e by

ta king posse ssion of the c olla

te ra l a nd a se c o nd tim e by

the ba nkruptc y c ourt’ s judgm e nt. He re lie s
on c a se la w sugge sting tha

t “ d o uble re c o ve ry ” c onstitute s a m isc a rria ge of justic e . Se e , e .g. , Ex p e rie n c e He n d

rix L.L.C . v . He n drix lic e nsing.c om Ltd, 762 F.3d 829, 841-42 (9th C ir. 2014). This c a se la

w is distinguisha

ble , howe ve r. First, B arne s ha s not re c ove re d
m ore tha n onc e . Although he

brie fly took posse ssion of the c olla te ra l , he wa s forc e d to a ssign it to othe r c re ditors. The$825,000 judgm e nt the re fore pla c e s B arne s in theposition he

would ha ve be e n in ha d R obe rts not fra

u dule ntly induc e d him to inve st. Se c ond, in the“ d ouble re c ove ry ” c a se s upon whic h R obe rts re lie s, the j udgm e nts we re e rrone ous . He re , by c ontra st, the ba

nkruptc y c ourt’ s judgm e nt
wa s c orre c t ba se d on the c la im s and de fe nse s pre s e nte d. The m e re possibility tha t R obe rts c ould ha

ve ra ise d othe r de fe n se s at tria l, a

nd tha t thosede fe nse s m ight have re sulte d in a

sm a lle r judgm e nt, doe s not c onve rt the judgm e nt e nte re d by the ba nkruptc y c ourt into a

m i sc arria ge of justic e .

32. R obe rts’ re lia nc e on the e xc e ption for pureque s tions of la w a lso fa ils. As R obe rts c onc e de s, the offse t a nd c om m e rc ia l re a sona

ble n e ss de fe n se s he ra ise s for the first tim e on a

ppe a l turn on que stions of fa c t tha t we re not ra ise d or
re solve d at tria l, suc h a s (1) the va lue of the c olla te ra l, (2) the e xte nt of the
ve nture ’ s lia

bility to the othe r c re d itors a

nd (3) whe the r B arne s dispose d of the
c olla te ra l in a c om m e rc ia lly re a sona ble m anne r. The se de fe nse s, the re fore , do not
ra ise pure que stions of la

w. Se e In reMe rc ury

Inte rac tiv e C

orp. Se c . Litig. , 618 F.3d at 993. AFFIRM E D.

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