### NOT FOR PU BLICA TION

U NIT E D ST A T E S BA NK RU PT CYA PPE L L A T E PA N E L

OF T HE NINT H CIRCU IT In re: PEO R IAR EGIO N A L MEDIC A L C EN TER , LLC, Deb to r. N A T PA LA N IA PPA N , a/k/a R aj Palaniappan, A p pellant,

v. PEO R IAR EGIO N A L MEDIC A L C EN TER , LLC, A p pellee. BA P N o . A Z -18-1317-LBF Bk. N o . 2:17-b k-11742-SHG

M E M ORA ND U M *

A rgued and Sub m itted o n July 18, 2019

at Pho enix, A rizo na Filed – A ugust 2, 2019 

# F IL ED
AUG 2 2019 SUSAN M . SPRAUL, CLERK U. S

. BKCY

. APP. PANEL O F T HE NI NT H CI RCUI T

* Thi s di sposi ti on i s not appr opr i ate for publi c ati on. Although i t may be ci ted for whatev er per suasiv e v alue i t may hav e, see Fed. R. App. P. 32.1, i t has no pr ecedenti al v alue, see 9th Ci r . BAP Rule 8024-1.A ppeal fro m the U nited States Bankruptcy C o urt fo rthe Distric t o f A rizo na Ho no rab le Sc o tt H. Gan, Bankruptcy Judge, Presiding

A ppearanc es: A p pellant N a t Palaniappan argued pro se; Heather Mac re

o f A iken Schenk Hawkins & Ric c iardi P.C
. argued fo r A p pellee.
Befo r e: LA FFER TY, BRA N D, and FA R IS, Bankruptcy Judges.

INT ROD U CT I ON A ppellant N at Palaniappan entered into a prepetitio n em plo ym ent
c o ntrac t (“MO U ”) with Peo ria R egio nal Medic al C enter, LLC (“PRMC ”) to
ac t as its C FO and to ob tain financ ing to c o m plete c o nstruc tio n o f a ho spital
o n real pro perty o wned b y PRMC . A fter PRMC filed its chapter 11 1 petitio n, it term inated Mr. Palaniappan’s emplo ym ent. Mr. Palaniappan filed a c laimfo r severanc e pay under the MO U . A fter a hearing, the b ankruptc y c o urt entered an o rder disallo wing Mr. Palaniappan’s c laimfo r severanc e pay and ruling that under the MO Uhe was entitled to
c o m p ensatio n o f o nly $15.

1 Unless speci fi ed other wi s e, all chapter and secti on r efer ences ar e to the Bankr uptcy Code, 11 U.S
. C. §§ 101-1532, all “Rule” r efer ences ar e to the Feder a l Rules of Bankr uptcy Pr ocedur e, and all “Ci v i l Rule” r efer ences ar e to the Feder al Rules of Ci v i l Pr ocedur e. 2Finding no erro r in the b ankruptc y c o urt’s interpretatio n o f the MO U,

we A FFIRM. F A C T U A L BA CK GROU N D PRMC was fo rm ed in 2007 too wn real pro perty in Peo ria, A rizo na (the “Pro perty”) o n whic h a ho spital wo uld b e b uilt and o perated. PRMC b egan c o nstruc tio n, b ut it ran o ut o f m o ney in 2012. PRMC ’s m anagem ent so ught o utside financ ing to c o m plete the c o nstruc tio n, and PRMC ’s
m anager, Tim o thy A . Jo hns, M.D. engaged Mr. Palaniappan tohelp find financ ing. In March 2017, Mr. Palaniappan drafted, without the assistanc e o f legal c o unsel, a do c um ent entitled “A GR EEMEN T FO R N O RTH W E ST MEDIC A L C E N TER

DBAPEO R IAR EGIO N A L MEDIC A L C EN TER .” Dr. Jo hns reviewed the do cum ent and m a de several changes to it, inc luding c hanging the wo rd “A GR EEMEN T” to “MO U ” (m em o randum
o f understanding). Dr. Jo hns then initialed and dated the MO U
. The MO Upro vided that “C FO Mr. Palaniappan N .” wo uld b e respo nsib le fo r pro c uring c o nstruc tio n financ ing, wo rking c apital and equipm ent financ ing and o verseeing all fisc al and fiduc iary respo nsib ilities fo r the “o rganizatio n.” A dditio nally, he was to lead the financ e departm ent and o versee “Info rm atio n System s, Banking R elatio nships and Patient Financ ial arrangem ents.” Paragraph 1 o f the MO U pro vided, so m ewhat c o nfusingly, that
3Mr. Palaniappan wo uld b e paid “$1 per m o nth pre lo an pro c urem ent m a y

b e c anc eled with 30 days written [sic ] if fo rec lo sed b y N ew Visio n Health
o r C ity m andate. Equity shares will b e o ffered instead o f C o m p ensatio n.” The MO Upro vided fo r “po st lo an funding and c o m m enc em ent o f
c o nstruc tio n c o m p ensatio n” o f $100,000 annually plus health insurance, to b e inc reased upo n the o c c urrenc e o f c ertain events. The MO Uc o ntained two alternative severanc e pro visio ns, which depended upo n the pro c u r em ent o f financ ing and the party who pro c ured it. Spec ific ally, if Mr. Palaniappan pro c ured financ ing, [a]t the end o f em plo ym ent? [sic ] as agreed upo n b y the Bo ard o f Direc to r s, Investo rs and O perating Manager fo rany reaso n o ther than m alfeasanc e, at the tim e o f separatio n, yo u will b e pro vided with separatio n pac kage o f o ne year’s current salary and keep [sic ] any equity shares issued toyo u, unless yo u are C FO o f N W MC /PRMC plus an additio nal ho s pital where Tim Jo hns is m anager, yo ur severanc e will b e o ne year o f the c urrent salary yo u are rec eiving fo r yo ur dual ro le. A lternatively, if Dr. Jo hns sec ured funding, and Mr. Palaniappan was term inated fo r any reaso n, severanc e will b e the sumto t al o f 9 m o nths o f the 185,000 o r any c u rrent salary whichever is highest and any equity shares assigned to Mr. Palaniappan. N . [sic ] N o financ ing was secured, and o n A ugust 30, 2017, the C ity o f Peo ria issued a no tic e to ab ate c o de vio latio ns at the Pro p erty, setting a deadline
o f Septemb er 27, 2017 fo r PRMC to ob tain a perm it to dem o lish the 4partially c o nstruc ted struc ture. A s this apparently did no t o c c ur, o n

O c t ob er 3, 2017, the C ity o f Peo ria no tified PRMC o f its intent to dem o lish the struc ture im m ediately. A ro und the sam e tim e, sec ured c r edito r Gilb ert Ho spital b egan fo rec lo sure pro c eedings o n its no te sec ured b y a deed o f trust against the Pro p erty. PRMC filed a chapter 11 petitio n o n O c tob er 4, 2017. Dr. Jo hns term inated Mr. Palaniappan’s emplo ym ent with PRMC in May 2018. 2 In July 2018, PRMC filed a m o tio n to appro ve a sale o f the Pro perty to A DB Investm ents, LLC, subjec t to o verb id. The term s o f the sale inc luded a right o f first o ffer to PRMC to rent spac e in the ho spital b uilding to b e c o nstruc t ed o n the Pro perty. Mr. Palaniappan objec t ed to the sale o n the gro u nds that he was o w ed an adm inistrative c laimpursuant to the MO U, spec ific ally, a separatio n pac kage, health insuranc e, equity shares in the ho spital, and c o m pensatio n fo r “lo st fees fro mno t ac c epting
c o m p rehensive o verseas funding.” He alsofiled a m o tio n fo rrelief fro m stay to perm it himto go to state c o urt to adjudic ate the am o unt o f his
c laim
. A t the hearing o n the sale m o tio n, the c o urt explained to

2 The par ti es seem to di sagr ee on the exact date of ter minati on. PRMC asser ts that Dr . Johns sent Mr . Palani appan a “ter minati on emai l” on May 3, 2018. In hi s appellate br i ef, Mr . Palani appan contends he was ser v ed a for mal noti ce of ter minati on on August 30, 2018, and at or al ar gument i n the bankr uptcy cour t he di s puted that he was ter minated i n May 2018, but i n hi s moti on for r eli ef fr om stay he stated he was “ter minated abr uptly” i n May 2018. 5Mr. Palaniappan that the issue b efo re the c o u rt was whether it sho uld

appro ve a sale that wo uld pay the liens and taxes o n the Pro perty and that Mr. Palaniappan’s entitlem ent to paym ent o f a c laimwas no t a b asis to disappro ve the sale. The c o urt o verruled his objec tio n and appro ved the sale. The c o urt then stated: What I wanted to explain is that, if yo u think yo u have a c laim, whic h yo u’ve seem ingly started to assert in this c ase, yo u need to file an applic atio n to b e paid as an adm inistrative expense c laim ant in this c ase. It needs toset fo rth no t just the reaso ns why yo u think yo u c o uld b e paid, b ut also what am o unt yo u b elieve is an adm inistrative expense o f this estate and why. Y o u need to file it, and yo u need to serve it in ac c o rdanc e with the rules. Then Ms. Mac re [PRMC ’s c o unsel] will have an o ppo rtunity to objec t, and then we’ll set so m e kind o f a hearing if nec essary to either argue the m erits o r to determ ine what the next step will b e. I wo uld suggest that yo u hire so m eo ne to help yo u. I c an’t m ake yo u go o ut and get so m eo ne and I do n’t kno w whether yo u c a n financ ially affo rd it, b ut it wo u ld b e o f signific ant assistanc e to yo u to have so m eo ne wo rk with yo u to help yo u prepare this and get it o n file. O n Septemb er 20, 2018, Mr. Palaniappan filed a pro o f o f c laim listing
an unsecured c laimo f $138,750 with the no tatio n “+ * Equity Shares in P.R
. M.C ./N .W .M.C
. Peo ria o r Pro xy[.]” He listed “separatio n and severanc e pac kage” as the b a s is fo r the c laim . He did no t attach the MO Uto his pro o f
o f c laim, b ut he did attach it to his c o nc urrently filed “Mo tio n to Set

6Hearing o n Severanc e C laimDue to Plaintiff,” asserting that the b asis fo r

the c laimwas the MO U . In that m o tio n, he requested an evidentiary hearing “if C o urt felt [sic ] it is nec essary.” PRMC filed an o ppo sitio n, asserting that the MO Uwas no t enfo rc eab le, and in any event, no events had o c cu rred that triggered the
severanc e pro visio ns. A lternatively, PR MC argued that Mr. Palaniappan was entitled under the MO Uto no m o re than $15. A t the hearing o n the severanc e c laim, the c o urt perm itted Mr. Palaniappan to argue at length. Mr. Palaniappan c o nc eded that his
c laimwas b ased o n the MO U, b ut he essentially argued that there were term s inc o rpo r ated into the MO Uthat were no tplainly spelled o ut. Fo r exam ple, he c laim ed that he was entitled to c o m pensatio n fo rdevelo ping a b usiness m o del, dealing with the C ity o f Peo ria in requesting an extensio n o n the dem o litio n deadline, and fo r o ther duties he perfo rm ed as C FO . He stated that he wo uld b ring in evidenc e o f his dealings with the C ity if the
c o u rt perm itted an evidentiary hearing. He also seem ed to argue that the term “funding” as required under the MO Uinc luded selling the Pro perty, b uilding a ho spital, and then leasing it b ac k, such that the sale to A DB fulfilled that definitio n. But the b ankruptc y c o urt c o rrec tly o b served that no ne o f tho se term s appeared in the MO U
. U ltim ately, the c o urt c o nc luded that altho ugh the MO Um et the
7requirem ents o f an enfo rc eab le c o ntrac t under A rizo na law,

under the term s o f [the MO U ], no thing was ever perfo rm ed b y [Mr. Palaniappan] o r Dr. Jo hns that wo uld result in the paym ent o f a severanc e c laimgreater than the do llar a m o nth that yo u ’re entitled to under the o riginal paragraph o f [the MO U ], whic h is unfo rtunate, b ut that’s the way the agreem ent is written. The c o u rt also denied Mr. Palaniappan's m o t io n fo r relief fro mstay, finding that his c laimhad to b e adjudic ated in the b ankruptc y c o urt. O n N o vemb er 6, 2018, the b ankruptc y c o urt entered an o rder (“C laim O rder”) finding that: (1) the MO Uwas a b inding agreem ent; (2) the term s c o ntained in Paragraph1 o f the MO Uc o ntro lled the o utc o m e o f the
severanc e c laim ; (3) Mr. Palaniappan is entitled toa c laimfo r $1 per m o nth fro mMarch 6, 2017, thro ugh May 2018, fo r a to tal o f $15. The o rder required PRMC to pay Mr. Palaniappan $15 tosatisfy the c laimand disallo wed the rem ainder o f the c laim
. 3 O n N o vemb er 13, 2018, Mr. Palaniappan m o ved fo r rec o nsideratio n. The b ankruptc y c o urt pro m p tly denied the m o tio n witho ut a hearing. Mr. Palaniappan tim ely appealed, referenc ing o nly the C laim O rder. He also m o ved fo r a stay pending appeal, b ut the b ankruptc y c o u rt do c ket

3 It i s not clear why the cour t appar ently tr eated the enti r e amount as an admini str ati v e clai m, gi v en that par t of the clai m was in cur r ed pr e-peti ti on. Howev er , no par ty has r ai sed thi s as an i ssue, and the amount at i ssue i s de min i mi s. 8do es no t reflec t that the m a tter was ever set fo rhearing o r ruled upo n. 4 JU RISD ICT ION The b ankruptc y c o urt had jurisdic tio n under 28 U .S.C . §§ 1334 and 157(b )(2)(B). W e have jurisdic tio n under 28 U .S.C . § 158. ISSU E Whether the b a nkruptcy c o urt erred in disallo wing Mr. Palaniappan’s claimfo r severanc e pay. ST A ND A RD S OF RE V IE W A n o rder sustaining o r o verruling a c laimobjec tio n “c an raise legal issues (such as the pro per c o nstruc tio n o f statutes and rules) which we review de no vo , as well as fac tual issues (suc h as whether the fac ts estab lish c o m plianc e with partic ular statutes o r rules), which we review fo r c lear erro r.” V

ea l v. Am . H

o m e Mo r tg. S erv., Inc. (In re V ea l) , 450 B.R . 897, 918 (9th C ir. BA P 2011) (c itatio ns o m itted). “De no vo review requires that we c o nsider a m atter anew, as if no dec isio n had b een m ade previo usly.” F ra ncis v. W a l la ce (In re Fra ncis) , 505 B.R . 914, 917 (9th C ir. BA P 2014) (c itatio ns o m itted). Fac tual findings are c learly erro neo us if they are illo gic al, im plausib le, o r witho ut suppo rt in the rec o rd. R e tz v. S a m so n (In re R etz ) , 606 F.3d 1189, 1196 (9th Cir. 2010). If two views o f the evidenc e are po ssib le, the c o urt’s cho ic e b etween them c anno tb e c learly erro neo us.

4 Mr . Palani a p pan di d not appeal the deni al of hi s moti on for r eli ef fr om stay. 9Anderso n v. C ity o f Bessem er C ity, 470 U .S. 564, 573-75 (1985).

D ISCU SSION A . W e need not dis m is s this appeal for M r . Palaniappan’sfailure to c om ply with applic a ble rules of appellate proc edure. PRMC requests that we dism iss this appeal b a sed o n Mr. Palaniappan’s failure toc o m ply with several rules o f appellate pro c edure. Spec ific a lly, PRMC po ints o ut that Mr. Palaniappan failed to sub m it a c o herent statem ent o f issues o r to suffic iently artic ulate erro r b y the b ankruptc y c o urt to perm it PRMC to respo nd. In additio n, Mr. Palaniappan did no t pro vide a c o m p lete rec o rd, no r did he referenc e the rec o r d in his o pening b rief. That b r ief do es no t c o m p ly with Rule 8014, as it lac ks a jurisdic tio nal statem ent, statem ent o f issues and standard o f review, a c o nc ise statem ent o f the c a se, and a c ertific ate o f c o m p lianc e, and the b rief do es no t c o m ply with the fo rm atting requirem ents o f Rule 8015,
no r do es it inc lude the c ertific ate o f interested parties o r related c ases required b y N inth C ircu it BA P Rule 8015(a)-1. Finally, PRMC no tes that the b rief lac ks a pro o f o f servic e as required b y Ru le 8011, and that the
no tic e o f appeal did no t list PRMC o rits c o unsel. Pro se litigants are no texc u sed fro mc o m plying with the rules o f appellate pro c edure. C linto n v. D eutsche Ba nk N a t'l Trust Co . (In re C linto n) , 449 B.R . 79, 83 (9th C ir. BA P 2011). And we have disc retio n to dism iss the appeal o r sum m arily affirmb ased o n these rules vio latio ns. S ee N / S Co rp. v.

10Liberty M ut. Ins. Co . , 127 F.3d 1145, 1146 (9th Cir. 1997) (striking appellant’s

b rief and dism issing appeal b ased o n num ero us vio latio ns o f appellate rules); In re C linto n , 449 B.R . at 82-83 (summ arily affirm ing b ankruptc y c o u rt’s o rders due to appellant’s failure to file an adequate rec o rd to perm it
m eaningful review). But we need no t dism iss this appeal. W e no te that Mr. Palaniappan did pro vide a c o py o f the O c tob er 25, 2018 transc ript, and PRMC has pro vided suffic ient exc erpts to c o m plete the rec o r d and perm it us to review the b ankruptc y c o urt’s ruling. A s discussed b elo w, m o re prob lem aticis Mr. Palaniappan’s failure toaddress exac tly ho w he b elieves the b ankruptc y c o urt erred in its ruling. He instead attem pts to reargue his
c ase b efo re this Panel, presum ab ly in the ho pe that we will view the m atter differently. W e do no t. B. M r. Palaniappan hasnot s hown that the bankruptcy c ourt erred in dis allowinghis s e v eranc e c laim . Despite Mr. Palaniappan’s lengthy rec itatio n o f alleged fac ts regarding his relatio nship with PRMC and Dr. Jo hns, this appeal turns
so lely o n the interpretatio n o f the MO UMr. Palaniappan drafted. A s no ted, there were two alternative severanc e pro visio ns in the MO U, neither o f whic h wo uld b e triggered unless Mr. Palaniappan o r Dr. Jo hns sec u red funding fo r PRMC . The b ankruptc y c o u rt c o rrec tly fo und that this
c o nditio n did no t o c c ur. The sale toA DB was just that–a sale–and not the

11pro c urem ent o f financ ing. A nd the granting to PRM C o f a right o f first

o ffer to rent spac e in the new ho s pital b u ilding did no t transfo rmthe sale into financ ing, despite Mr. Palaniappan’s argum ent that this was the “b usiness m o del” em plo yed with o ther ho spital pro perties in whic h he and Dr. Jo hns had b een invo lved. Mr. Palaniappan agreed that his c laimwas b ased o n the MO U, b ut his argum ents were fo c used o n m atters o utside the c o ntrac t, such as Dr. Jo hns’ transac tio ns with o ffic ers o f o ther ho spitals and ho w tho s e o ther ho spitals ob tained funding. U nder A rizo na law, ho w ever, if a c o ntrac t is
no t reaso nab ly susc eptib le to the interpretatio n o ffered b y a party to the
c o ntrac t, that party m ay no t intro duc e extrinsicevidenc e c o ntradic t ing the written language. Birdsell v. F o rt M cD o well S a nd &Gra vel (In re S a nner) , 218 B.R . 941, 945 (Bankr. D. A riz. 1998) (c iting T ay lo r v. S ta te Fa r m M ut. Auto
. Ins. Co . , 854 P.2d 1134, 1139 (Ariz. 1993)). In any event, Mr. Palaniappan’s assertio ns are b arely c o m prehensib le, and even if they were plausib le, there is no evidenc e that PRMC agreed to any term s o ther than what was
c o ntained in the MO U
. N evertheless, Mr. Palaniappan argues that he sho uld have b een granted an evidentiary hearing and that his due pro c ess rights were vio lated when that did no to c c ur. But the b ankruptc y c o urt c arefully
c o nsidered Mr. Palaniappan’s filings and patiently perm itted himto present his argum ents, no ne o f whic h raised any relevant issue o f m aterial
12fac tsuffic ient to require an evidentiary hearing regarding the

interpretatio n o f the MO U
. Mr. Palaniappan’s rem aining argum ents o n appeal are diffic ult to disc ern, b ut appear to b e c o m pletely irrelevant to whether the b ankruptc y c o u rt erred in interpreting the MO Uto disallo whis severanc e c laim . A s he did in the b ankruptc y c o urt, Mr. Palaniappan rec ites his histo ry o f wo rking with Dr. Jo hns at o ther ho s pitals. He alleges that Dr. Jo hns used the b usiness m o del Mr. Palaniappan develo ped to ob tain a sale agreem ent with A DB. His argum ent seem s to b e that the definitio n o f “funding” as used in the MO Uinc luded an investo r c o m m itm ent to c o m plete the ho spital, then lease it to Dr. Jo hns o r PRMC, and that A DB is c o m m itted to do ing so . But the MO Udid no t reflec t that this was what the parties intended when exec u t ing the MO U . Mo reo ver, as the b ankruptc y c o urt po inted o ut, A DB is no t c om m itted under the sale agreem ent to leasing the Pro perty to PRMC ; rather, as no ted, PRM C has the right o f first o ffer to lease spac e in the new b uilding. A nd, as PRMC po ints o ut, the sale agreem ent do es no t require A DB to c o m plete c o nstruc tio n o f a ho spital at all. Mr. Palaniappan alsorec ites num ero us tasks he perfo rm ed in his
c apac ity as C FO o f PRMC and po ints o ut that he had so m e discussio ns regarding financ ing with an o verseas investo r. But, as the b ankruptc y c o urt fo und, the plain language o f the MO Ulim its Mr. Palaniappan’s
13c o m p ensatio n to $1 per m o nth “pre lo an pro c urem ent” if no financ ing is

ob tained. A ltho ugh this figure seem s sho c kingly lo w, that is what the
c o ntrac t–which was drafted b y Mr. Palaniappan–pro vides. The b ankruptc y c o u rt did no t err in so c o nc luding. Finally, Mr. Palaniappan c o m plains that the b ankruptc y c o urt “to o k
no tim e to deny his rec o nsideratio n request,” b ut he did no t inc lude the
o rder o n rec o nsideratio n in his no tic e o f appeal. A ltho ugh this do es no t
nec essarily prec lude o ur review o f the o r der o n rec o nsideratio n, see U nited S ta tes v. Arki s o n (In re Ca sca de R o a ds, Inc.) , 34 F.3d 756, 761-62 & n.5 (9th C ir. 1994), Mr. Palaniappan did no t present any argum ent as to ho w the b ankruptc y c o urt failed to pro perly apply the standard fo r rec o nsideratio n. 5 A c c o rdingly, we need no t c o nsider the m atter. S ee Jo do i n v. S a m ay o a (In re Jo do i n) , 209 B.R . 132, 143 (9th C ir. BA P 1997) (“W e ‘will no t
o rdinarily c o nsider m atters o n appeal that are no t spec ific a lly and distinc t ly argued in appellant’s o pening b rief.’” (c iting M iller v. F a irchild Indus. , 797 F.2d 727, 738 (9th Cir. 1986))). 6

5 Reconsi der a ti on under Ci v i l Rule 59(e), appli cable v i a Rule 9023, i s appr opr i ate only i f the mov i ng par ty demonstr ates (1) mani fest er r or of fact; (2) mani fest er r or of law; or (3) newly di scov er ed ev i d ence. Hansen v. Moore (In re Hansen) , 368 B.R. 868, 878 (9th Ci r. BAP 2007) (ci ti ng Hale v. U.S. Trustee (In re Basham) , 208 B.R. 926, 934 (9th Ci r . BAP 1997), aff'd, 152 F.3d 924 (9th Ci r . 1998) (table).

6 Mr . Palani a p pan r equests as alter nati v e r eli ef that we li ft the automati cstay to per m i t hi m to go to state cour t. But we hav e no j ur i sdi cti on to pr ov i de thi s r eli ef, ev en i f we beli ev ed i t was war r anted. Mor eov er , to the extent he i s ar gui ng that the bankr uptcy (continued...) 14CONCL U SION

Fo r these reaso ns, we A FFIRM.

6 (...continued) cour t er red i n denyi ng stay r eli ef, we hav e no j ur i sdi c ti on ov er that or der as i t was not ti mely appealed. 15