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FILED

APR 06 2015

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL NOTFOR PUBLICATION OF THE NINTH CIRCUIT

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. NV-14-1474-DJuKu

)

WILLIAM WALTER PLISE, ) Bk. No. 12-14727

)

Debtor. )

________________________________ )

)

TENNILLE I. PLISE, )

)

Appellant, )

)

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

)

SHELLEY D. KROHN, Chapter 7 )

Trustee; WILLIAM WALTER PLISE, )

)

Appellees. )

________________________________ )

Argued and Submitted on March 19, 2015

at Las Vegas, Nevada

Filed - April 6, 2015

Appeal from the United States Bankruptcy Court

for the District of Nevada

Honorable Linda B. Riegle, Bankruptcy Judge, Presiding

 

Appearances: Matthew L. Johnson of Johnson & Gubler, P.C., 

argued for Appellant Tennille I. Plise; Jacob L.

Houmand and Victoria L. Nelson of Nelson & Houmand,

P.C., argued for Appellee Shelley D. Krohn, Chapter 7

Trustee.

 

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 8024-1.

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Before: DUNN, JURY, and KURTZ, Bankruptcy Judges.

Shelley D. Krohn, the Chapter 72 trustee (“Trustee”), filed an

adversary proceeding against appellant Tennille I. Plise, alleging

that Ms. Plise's prepetition divorce from Chapter 7 debtor William

Walter Plise (“Debtor”) was a sham, such that transfers of property

to Ms. Plise pursuant to the dissolution proceedings constituted

fraudulent transfers. The Trustee’s claims against Ms. Plise were

settled by the payment of $425,000 to the estate. Sometime after

the bankruptcy court approved the settlement (“Settlement”),

Ms. Plise filed a proof of claim, asserting that as a result of the

Settlement she was owed a $425,000 prepetition domestic support

obligation, later amended to $715,000, which was entitled to

priority status under the Bankruptcy Code and therefore to payment

ahead of the professionals employed by the Trustee. 

Although we have been hampered in our review by the absence of

any detailed findings of facts and conclusions of law by the

bankruptcy court, we nevertheless AFFIRM the bankruptcy court's

order sustaining the trustee's objection to Ms. Plise's claim,

because the record on appeal supports the imposition of the doctrine

of judicial estoppel against Ms. Plise to preclude her from

asserting her claim in the bankruptcy case.

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. All “Civil Rule” references are to the

Federal Rules of Civil Procedure.

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 I. FACTUAL BACKGROUND3

The following basic facts provide the framework for the

litigation that underlies this appeal:

• Ms. Plise and the debtor were married on December 4, 2001. 

• On September 29, 2008, Ms. Plise and the Debtor filed a Joint

Petition for Divorce in the Clark County Nevada District Court

(“Nevada Family Court”).

• On October 24, 2008, the Nevada Family Court entered a Decree

of Divorce (“Divorce Decree”) that was based upon a Joint

Petition For Divorce agreed to between the Debtor and Ms. Plise

and filed by each as “Petitioner in Proper Person.”4 

• The debtor filed his chapter 7 petition on April 23, 2012.

• Debtor’s schedules reflect that as of the petition date he

owned (a) no real property, and (b) personal property valued at

$4,738.71. Debtor claimed as exempt all but $2,000 of the

personal property disclosed. The nonexempt personal property

3 The record provided by the parties to the appeal was

incomplete with respect to their assertions in connection with

resolution of the Trustee’s claims against Ms. Plise in the

adversary proceeding. We have exercised our discretion to review

the bankruptcy court’s main case and adversary proceeding 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).

4 Ms. Plise asserts that the Debtor was represented by counsel

in connection with the Joint Petition for Divorce but that she was

not.

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was fully encumbered.

A. Transfers Pursuant to the Divorce Decree.

As relevant to this appeal, the Divorce Decree provided that

Ms. Plise was to receive (a) a one-time lump-sum payment of child

support in the amount of $1,850,000, and (b) a one-time lump-sum

payment of alimony in the amount of $1,000,000.

1. Lump-Sum Transfer For Child Support.

Ms. Plise asserts she received a lump-sum payment of $1,850,000

in satisfaction of the child support obligation, and she used these

funds to purchase real property in Austin, Texas (“Austin Property”)

where she thereafter resided with the parties’ children. Ms. Plise

contends that she thereafter became ill for a 2-3 year period,

precluding her from working and necessitating borrowing money “from

others” to pay for her medical bills, living expenses, and

attorney’s fees. Ms. Plise contends that she attempted to sell the

Austin Property because she needed to pay this money back. 

When her sale efforts were not successful, Ms. Plise asserts

she contacted the debtor because she believed he had contacts that

could help her obtain a loan. Debtor referred her to Mike

Halverson.5 Ms. Plise contends she was advised by Mr. Halverson

5 Mike Halverson was a close business associate of the debtor. 

The Chapter 7 Trustee filed twenty fraudulent transfer adversary

proceedings in the underlying bankruptcy case, twelve of which named

5550 Las Vegas, LLC (“5550 Las Vegas”) as a defendant and as the

alter ego of the debtor. 

The Settlement Agreement at issue in this appeal recites that

the debtor formed 5550 Las Vegas on February 23, 2009 and was the

(continued...)

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that the lender would require removing her name from the property

out of concern for Texas homestead laws. She therefore “sold” the

Austin Property to 13413 Shore Vista Drive, LLC (“Shore Vista”), an

entity managed by Mr. Halverson, on March 29, 2012. Shore Vista

then obtained a loan6 in the amount of “approximately $850,000 to

$900,000.” The lender was granted a first position lien on the

Austin Property for the amount of the loan; Ms. Plise received a

second lien for her alleged equity in the Austin Property in the

amount of $1.1 million. Ms. Plise asserts that with the loan

5(...continued)

sole member until July 12, 2010, when he transferred his membership

interest to Mr. Halverson. The allegation regarding 5550 Las Vegas

in the more recent complaints provides: 

Upon information and belief, 5550 Las Vegas, LLC ("5550

Las Vegas") is a revoked Nevada Limited Liability Company

in which Michael Halverson ("Halverson") was the manager

and member. On or about March 8, 2013, Halverson avoided

the transfer of the membership interest in 5550 Las Vegas

and transferred any and all interest he held in 5550 Las

Vegas to the bankruptcy estate of the Debtor including,

but not limited to, all real or personal property owned or

controlled by 5550 Las Vegas, all legal and equitable

interests owned or controlled by 5550 Las Vegas, all

tangible and intangible property interests owned or

controlled by 5550 Las Vegas, or any claims for relief

arising under Nevada law or the United States Bankruptcy

Code out of the transfer of money from 5550 Las Vegas to

third parties. Halverson further agreed to not defend,

dispute, object or assist in any defense of a claim for

relief for alter ego brought against 5550 Las Vegas by the

Trustee.

6 The term of the loan was short. The Settlement Statement

reflects the date of the loan was March 30, 2012. The loan was due

in March 2013.

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proceeds she paid the loan costs and interest, and 12 months of

rent. 

2. Transfers For Alimony.

In October 2008, in satisfaction of the $1 million owed as

alimony, Ms. Plise accepted $350,000, together with a parcel of

vacant land in Colorado (“Colorado Property”), the assignment of the

debtor’s interest in a promissory note dated February 6, 2009 from

Cracked Egg, LLC in the amount of $700,000.00, and Bank of George

common stock. 

Ms. Plise asserts she used the Bank of George stock (which she

contends was worthless) to settle the fraudulent transfer claim Bank

of George had asserted against her based on its contention that the

divorce was a sham.

On September 19, 2012, Ms. Plise transferred the Colorado

Property to Old Toll Road, LLC (“Old Toll Road”), an entity she

wholly owns.7 According to the Trustee, Old Toll Road was formed on

September 19, 2012. When initially organized, Keith Clegg, a longtime friend of the Debtor, was the named manager. On November 1,

2012, Ms. Plise was named the manager. On April 5, 2013, the Debtor

was named the manager, and he opened a bank account at the Bank of

Nevada for Old Toll Road on that date. Four days later the Colorado

Property was sold; the sale proceeds in the amount of $186,396.76

7 Ms. Plise asserts this transfer was made to protect herself

from liability after she had consented to allow county trucks to

park on the Colorado Property when work was commenced on the road

nearby.

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were wired into the Old Toll Road bank account. Debtor subsequently

transferred more than $140,000 of the sale proceeds to a bank

account he had opened in his name on May 16, 2012, less than one

month after he filed his chapter 7 petition. 

B. The Trustee’s Claims Against Ms. Plise.

On September 19, 2012, the Trustee filed a complaint

(“Complaint”) against Ms. Plise, Shore Vista, and Old Toll Road

seeking to avoid fraudulent transfers pursuant to § 544(b), to

recover fraudulent transfers pursuant to § 550, for turnover of

estate property pursuant to § 542, and for injunctive relief

pursuant to Rule 7065.8 

On September 20, 2012, the Trustee filed a motion for a

preliminary injunction (“Injunction Motion”), seeking to prevent any

transfer of the Austin Property. Ms. Plise opposed the Injunction

Motion (“Injunction Motion Opposition”), asserting (1) § 544 did not

apply because the transfers made under the Divorce Decree had

occurred nearly four years before the Debtor filed his bankruptcy

case, with the result that Ms. Plise, not the Debtor, was the owner

at the time the Austin Property was transferred to Shore Vista and

at the time the Colorado Property was sold; (2) Nevada law, NRS

Chapter 112, prohibits third parties from challenging a divorce such

that the Trustee is unable to undo any of the transfers made

8 The Trustee amended the complaint on October 17, 2012, to add

a claim to avoid as a fraudulent transfer Ms. Plise’s transfer of

the Colorado Property to Old Toll Road, LLC, which had taken place

the same day the adversary proceeding was filed.

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pursuant to the Divorce Decree; (3) the bankruptcy court lacked

jurisdiction over the award or adjustment of support; and (4) the

Trustee was precluded from asserting that the divorce was a sham

because a Nevada court previously had ruled in favor of Ms. Plise on

that issue, e.g., in litigation initiated by the Bank of George

against Ms. Plise. Most importantly for purposes of this appeal,

Ms. Plise opposed the Injunction Motion on the basis that the

bankruptcy court could not, in light of § 507, provide Ms. Plise any

redress if the transactions under the Divorce Decree were unwound.

The Court is unable to provide redress. Based on

Section 507, even if the Court finds that the Debtor

fraudulently transferred all of the property that the

Trustee seeks, the fact remains that [Ms. Plise] has a

valid, final, non-appealable domestic relations order. 

The ultimate result is that the Trustee would still have

to first pay the monies due and owing under a

super-priority, valid, unappealable Divorce Decree, before

first taking a fee and paying any funds for any

administrative expenses. Therefore, the Court is unable

to provide redress.

Injunction Motion Opposition at 18:7-12.

In or about February of 2013, Ms. Plise and Shore Vista settled

the claims the Trustee had asserted against them in the Adversary

Proceeding. The relevant terms of the Settlement are as follows:

1. Settlement Agreement With Shore Vista and [Ms. Plise]. 

In settlement of the claims for relief in the Second

Amended Complaint against Shore Vista and [Ms. Plise], the

Parties agree that the Austin Property will be sold

according to the following terms:

a. The Austin Property shall continue to be listed

for sale . . . pursuant to the terms of the exclusive

listing agreement entered into between Shore Vista

[and its realtor] (the “Exclusive Listing

Agreement”). If the Austin Property has not sold by

the time the Exclusive Listing Agreement expires, the

Trustee, in her sole discretion, will have the right

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to replace [the realtor] with a real estate agent of

her choosing.

b. The listing agreement for the Austin Property

shall be amended to indicate that the Trustee and

Shore Vista are jointly selling the Austin Property.

c. Any sale of the Austin Property is contingent on

the written approval of both the Trustee and Shore

Vista.

d. Any proceeds from the sale of the Austin Property

will first be used to satisfy any balance owed to

[the holder of] the First Deed of Trust. 

e. After the First Deed of Trust . . . has been

satisfied, four hundred and twenty-five thousand

dollars ($425,000.00) shall be wired from escrow to

the Trustee.

f. Any funds remaining after (1) the First Deed of

Trust . . . has been satisfied and (2) the four

hundred and twenty-five thousand dollars

($425,000.00) has been wired to the Trustee shall be

distributed to [Ms. Plise].

2. Release of Claims. The Trustee agrees to release

[Ms. Plise] from all claims arising out of the transfer of

any and all real and/or personal property related to the

Divorce Decree, including the transfer of the Colorado

Property, the assignment of the Debtor’s interest in the

promissory note dated February 6, 2009 from the Cracked

Egg, LLC in the amount of seven hundred thousand dollars

($700,000.00), the payment of any income taxes owed to the

Internal Revenue Service, and the transfer of common stock

in the Bank of George. Furthermore, the Trustee releases

Shore Vista of any and all claims relating to the transfer

of the Austin Property.

3. Settlement Agreement With Old Toll. The Trustee

agrees to voluntarily dismiss the claims for relief in the

Second Amended Complaint against Old Toll and the Colorado

Property.

. . .

6. Reservation of Rights. Notwithstanding anything to

the contrary contained in this Agreement, the Parties

hereto expressly reserve unto themselves any claims or

causes of action, whether at law or in equity, arising out

of the non-performance of this Agreement by a Party. The

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Parties agree that if any Party hereto employs counsel or

brings suit to enforce the terms or conditions of this

Agreement, and if such Party is successful in such effort,

he or it (as the case may be) shall be entitled to recover

from the non-performing Party any and all damages, costs,

expenses and attorneys’ fees incurred as a result thereof.

On March 8, 2013, the Trustee filed a motion to approve the

Settlement (“Settlement Approval Motion”) reached with Ms. Plise. 

In her memorandum in support of the Settlement Approval Motion, the

Trustee stated:

The Debtor's Schedule B provides that he only owns

personal property in the amount of $4,738.71. This

$4,738.71 figure includes a checking account ($988.71), a

personal safe and computer ($250.00), assorted clothing

($250.00), a wedding ring and watch ($1,000.00), a 9mm

Glock Pistol ($250.00), and an eighteen foot trailer

($2,000.00). Schedule C provides that the Debtor is

exempting $2,738.71 of the $4,738.71 in assets. The only

item of personal property that was not exempted, the

eighteen foot trailer, is secured by a lien equal to its

fair market value. Therefore, as of the Petition Date,

the Debtor has had a no-asset bankruptcy case. The

proposed Settlement Agreement is in the best interests of

the creditors and the Debtor because it will result in the

recovery of four hundred twenty-five thousand dollars that

can be used for the benefit of creditors. Accordingly,

approval of the Settlement Agreement will result in the

recovery of funds that can be distributed to unsecured

creditors.

Settlement Approval Motion at 10:2-12. Ms. Plise explicitly joined

(“Joinder”) in the Trustee’s Settlement Approval Motion: 

“Defendant, TENNILLE I. PLISE ("Plise"), through her attorneys of

the law firm of MATTHEW L. JOHNSON & ASSOCIATES, P.C., respectfully

submits her joinder to the Trustee's Motion to Approve Compromise

And Settlement Pursuant To Federal Rule of Bankruptcy Procedure

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9019.”9 Following a hearing on the Settlement Approval Motion, on

March 25, 2013, the bankruptcy court entered an order (“Settlement

Order”) granting the Settlement Approval Motion.10 

C. Ms. Plise’s Proof of Claim.

On July 1, 2013, the law firm of Cotton, Driggs, Walch, Holley,

Woloson & Thompson (“Cotton Driggs Firm”), former counsel for the

Trustee, filed its first interim application (“Cotton Driggs Fee

Application”) for compensation based on services the Cotton Driggs

Firm had performed between July 17, 2012 and December 31, 2012 and

for expenses the Cotton Driggs Firm had incurred during the period

July 17, 2012 through June 27, 2013. 

In opposing the Cotton Driggs Fee Application, Ms. Plise filed

two documents on July 24, 2013. The first was proof of claim 20-1

(“Priority Claim”), pursuant to which Ms. Plise asserted she was

owed $425,000 as a priority domestic support obligation pursuant to

9 The balance of the Joinder reads:

Additionally, Plise respectfully requests that the Court

note in the Order Approving the Settlement Agreement that

any cause of action for alleged fraudulent transfers from

the Debtor to Plise are vested exclusively with the

Trustee, and that once the Order approving the Settlement

with the Trustee is entered, other creditors can no longer

pursue fraudulent transfer actions involving transfers

from the Debtor to Plise pursuant to 11 U.S.C. §544. See

11 U.S.C. §544; In re Kimmell, 367 B.R. 174 (N.D. Cal.

2007); Hyosong (America), Inc. v. Hantle USA, Inc., No.

C 10-02160 SBA, 2011 WL 835781 (N.D. Cal. Mar. 4, 2011);

In re Smith Motors, 286 BR 905, 908 (N. Cal. 2002).

10 The Settlement Order did not include the additional language

Ms. Plise had requested in her Joinder.

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§ 507(a)(1). The second was a limited opposition (“Cotton Driggs

Limited Opposition”) to the Cotton Driggs Fee Application. In the

Cotton Driggs Limited Opposition, Ms. Plise asserted that, in

settling with the Trustee, Ms. Plise did not waive her right to

child support or alimony awarded through the Divorce Decree. 

Further, she asserted that the $425,000 paid to the Trustee as a

part of the Settlement constituted exempt child support or alimony

pursuant to NRS 21.090(s) and (t). On the bases of (1) Nevada

exemptions she was entitled to claim in support payments, and

(2) the priority payment status provided to support obligations

under § 507, Ms. Plise objected to any payment to the Cotton Driggs

Firm until her $425,000 claim for alimony and child support was

paid. 

The Trustee cried foul. In her reply to the Cotton Driggs

Limited Opposition, the Trustee pointed out that, as of the Petition

Date, Ms. Plise held no claim, priority or otherwise. Specifically,

prior to that date, Ms. Plise had received full satisfaction from

the Debtor for all support obligations due under the Divorce Decree. 

The Trustee further alleged that Ms. Plise’s actions after the

Settlement had been approved belied her claim that she was due

support. In particular, the Colorado Property was sold after the

Trustee released claims against Ms. Plise and Old Toll Road, and the

proceeds of that sale were transferred to an account in the Debtor’s

name. The Trustee asserted that if Ms. Plise believed she was owed

support, which is the basis upon which she allegedly acquired the

Colorado Property in the first instance, Ms. Plise would have

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retained those proceeds rather than paying them over to the Debtor. 

Finally, the Trustee asserted that the Settlement did not provide

Ms. Plise a domestic support claim. On August 9, 2013, the

bankruptcy court approved the Cotton Driggs Fee Application over the

Cotton Driggs Limited Opposition. 

On February 9, 2014, the law firm of Nelson & Houmand, P.C.

(“N&H Firm”), current counsel for the Trustee, filed its first

interim application (“N&H Fee Application”) for compensation based

on services the N&H Firm had performed between September 13, 2013

and February 7, 2014 and for reimbursement of expenses. Ms. Plise

filed a limited opposition (“N&H Limited Opposition”) to the N&H Fee

Application, objecting to any payment to the N&H Firm until the

Priority Claim was paid, raising the same issues she had presented

in the Cotton Driggs Limited Opposition. On March 17, 2014, the

bankruptcy court approved the N&H Fee Application over the N&H

Limited Opposition. The order reflected that the bankruptcy court

had reviewed the N&H Limited Opposition; that although awarded, any

payment of fees pursuant to the N&H Fee Application remained subject

to disgorgement; and that the bankruptcy court had not made a

determination on the Priority Claim filed July 24, 2013.

On June 11, 2014, the Trustee formally objected (“Claim

Objection”) to the Priority Claim. The Trustee asserted in the

Claim Objection that the Priority Claim should be disallowed

because, assuming that Ms. Plise did have a claim for support

against the Debtor as a result of the Settlement, that claim would

not be enforceable against the bankruptcy estate where it arose

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postpetition. In both the Cotton Driggs Limited Opposition and the

N&H Limited Opposition, in an effort to avoid the application of the

claims bar date (“Bar Date”) to the Priority Claim, Ms. Plise stated

that she had no reason to file a proof of claim until the Bankruptcy

Court had granted the Settlement Approval Motion, an event which

took place after the Bar Date. 

The Trustee further asserted the Priority Claim was not a

domestic support obligation. The alleged claim only arose after the

Trustee was paid $425,000 in exchange for a release of the

bankruptcy estate’s fraudulent transfer claims against Ms. Plise. 

The Trustee pointed out that Ms. Plise did not personally transfer

any funds to the Trustee where the funds came from the sale of the

Austin Property titled in the name of Shore Vista; that it would be

illogical for the Trustee to settle fraudulent transfer claims,

which Ms. Plise had defended on the basis that they were support,

only to allow Ms. Plise to file a claim for support in the

bankruptcy case; and that the “claim” was not established by the

Divorce Decree. The Trustee also pointed out that it was

“understood that the settlement amount was going to be used by the

Trustee to administer the Debtor’s bankruptcy estate including

paying administrative professionals and unsecured creditors.”

Ms. Plise responded (“Claim Objection Response”) that the

Priority Claim was one for “a domestic support obligation arising

from the Divorce Decree which has not been fully satisfied,” and

that because the Debtor’s obligation to Ms. Plise was created under

the Divorce Decree entered prepetition, it is not an unmatured claim

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for support. She further asserted that because funds had been paid

to the Trustee on account of the fraudulent transfer claims raised

against Ms. Plise, Ms. Plise was entitled to the protection of

§ 502(h) which provides: “A claim arising from the recovery of

property under section . . . 550 . . . of this title shall be

determined, and shall be allowed under section (a), (b), or (c) of

this section . . . the same as if such claim had arisen before the

date of the filing of the petition.” 

Ms. Plise further stated that she reserved all of her rights to

the Priority Claim in the Settlement. In support of this position

she quoted paragraph 6 of the Settlement Agreement, titled

“Reservation of Rights,” emphasizing language that provided the

parties “expressly reserve unto themselves any claims or causes of

action, whether at law or in equity, arising out of the nonperformance of this Agreement by a Party.” She pointed out that the

Trustee had released all claims against her for the alleged

fraudulent transfers, which Ms. Plise appeared to interpret as a

release of any claim that the funds transferred under the Divorce

Decree as support were not actually support, but rather transfers

made in an effort to remove property and funds from the reach of

Debtor’s creditors. She reiterated that the Priority Claim

represented debts owed to or recoverable by a former spouse and

child, in the nature of support. Finally, she asserted that,

although the funds paid to the Trustee were from the sale of the

Austin Property owned by Shore Vista, Ms. Plise actually “paid”

them, because otherwise she would have been entitled to those funds

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based on the second lien she held. 

Ms. Plise further contended that because the source of the

Priority Claim is the Divorce Decree, Nevada law precludes the

Trustee from “attacking” it. 

Finally, Ms. Plise asserted that the Priority Claim was timely. 

Although she did not file it before the Bar Date, she filed it four

months after the Settlement had been approved by the bankruptcy

court. Notably, at the time the Priority Claim was filed, the

Trustee had not commenced distribution pursuant to § 726(a)(1), with

the result that Ms. Plise asserted the claim did not lose its

priority payment status.

After filing the Claim Objection Response, Ms. Plise amended

the Priority Claim to include an additional $290,000 amount. With

much effort, the Trustee was able to determine that the Priority

Claim amount was increased to include the amount for which Ms. Plise

asserted she settled the litigation Bank of George had filed against

her on the basis that Ms. Plise’s divorce was a sham and the

transfers made pursuant to the Divorce Decree were fraudulent. It

appears that Ms. Plise settled with Bank of George for $40,000 plus

the return of stock, which Ms. Plise throughout proceedings in the

bankruptcy court had repeatedly claimed was “worthless.”11

11 In her response to the Trustee’s supplemental objection to

the Priority Claim, Ms. Plise offered a valuation of the Bank of

George stock in the range of $357.50-363.50 per share based on a

U.S. Department of the Treasury press release. However, as the

Trustee points out, those values were for Class A and Class B stock,

(continued...)

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At the hearing on the Claim Objection held August 28, 2014, the

bankruptcy court sustained the objection based upon its finding that

no domestic-support obligation was created by virtue of the

Settlement Agreement. The order sustaining the Claim Objection was

entered September 10, 2014 (“Claim Objection Order”), and this

timely appeal followed.

II. JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334

and 157(b)(2)(B). We have jurisdiction under 28 U.S.C. § 158.

III. ISSUE

Whether the bankruptcy court committed reversible error when it

disallowed Ms. Plise’s claim.

IV. STANDARDS OF REVIEW

In appeals arising from a ruling on a claim objection, we

review the bankruptcy court's conclusions of law de novo and its

findings of fact under the clearly erroneous standard. See Allen v.

U.S. Bank, NA (In re Allen), 472 B.R. 559, 564 (9th Cir. BAP 2012). 

Fact findings are not clearly erroneous unless they are illogical,

implausible or without support in the record. Retz v. Samson

(In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010) (citing United

States v. Hinkson, 585 F.3d 1247, 1261–62 & n.21 (9th Cir. 2009)

(en banc)).

We may affirm the decision of the bankruptcy court on any basis

11(...continued)

while the stock transferred to Ms. Plise in settlement of the

obligations in the Divorce Decree was common stock.

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supported by the record. See ASARCO, LLC v. Union Pac. R. Co.,

765 F.3d 999, 1004 (9th Cir. 2014); Shanks v. Dressel, 540 F.3d

1082, 1086 (9th Cir. 2008).

V. DISCUSSION

We determine that Ms. Plise is estopped from asserting the

Priority Claim. See Hamilton v. State Farm Fire & Cas. Co.,

270 F.3d 778, 782–83 (9th Cir. 2001)(explaining the doctrine of

judicial estoppel in relatively neutral language: “Judicial estoppel

is an equitable doctrine that precludes a party from gaining an

advantage by asserting one position, and then later seeking an

advantage by taking a clearly inconsistent position.”). 

The Ninth Circuit used more strident language appropriate to

the actions of Ms. Plise in Rockwell Int’l Corp. v. Hanford Atomic

Metal Trades Council, 851 F.2d 1208, 1210 (9th Cir. 1988).

Unlike collateral estoppel, res judicata, and equitable

estoppel, judicial estoppel focuses exclusively on

preventing the use of inconsistent assertions that would

result in an “affront to judicial dignity” and “a means of

obtaining unfair advantage.” 

Id. In Rockwell Int’l, the Ninth Circuit explained that the purpose

of the doctrine of judicial estoppel is “to protect against a

litigant playing ‘fast and loose with the courts’ by asserting

inconsistent positions.” Id.

In Milton H. Green Archives, Inc. v. Marilyn Monroe, LLC,

692 F.3d 983 (9th Cir. 2012), the Ninth Circuit discussed the

current law on judicial estoppel under its own precedents in light

of the factors identified by the Supreme Court in New Hampshire v.

Maine, 532 U.S. 742, 749 (2001), to be considered in determining

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whether the doctrine should apply in a given case. We analyze Ms.

Plise’s actions to determine whether to apply judicial estoppel

using these factors.

1. “[A] party’s later position must be clearly inconsistent

with its earlier position.” Id. at 750-51. The Joinder is the

document which highlights Ms. Plise’s inconsistent positions for

purposes of this appeal. Ms. Plise had articulated in the

Injunction Motion Opposition her concern that the bankruptcy court

could not, in light of § 507, provide Ms. Plise any redress if the

transactions under the Divorce Decree were unwound. Nevertheless,

she settled with the Trustee, who agreed to accept a payment of

$425,000 in return for a waiver of claims up to $2,450,000 against

Ms. Plise. Ms. Plise then affirmatively joined in the Settlement

Approval Motion, which contained the representation that the

proceeds of the Settlement would be used to pay unsecured creditors. 

Ms. Plise also tried, albeit unsuccessfully, to have the Settlement

Agreement insulate her from future fraudulent transfer actions that

might be filed by other creditors. Having achieved protection from

the bankruptcy estate with respect to the balance of the transfers

made under the Divorce Decree, Ms. Plise then filed the Priority

Claim, effectively saying as to the Settlement proceeds: “They’re

mine.”

2. By her affirmative and unreserved adoption of the

Settlement Approval Motion, Ms. Plise can be said to have “succeeded

in persuading [the bankruptcy] court to accept [her] earlier

position,” i.e. that she was giving up property which she asserted

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was acquired in satisfaction of a domestic support obligation in

order to settle the Trustee’s claims against her. Id. Had the

bankruptcy court allowed the Priority Claim as she had requested, it

would have “create[d] the perception” that the bankruptcy court had

been misled in the proceedings relating to the Settlement or in the

claim proceedings. This is the second factor articulated in

New Hampshire. Having been unsuccessful in the bankruptcy court,

Ms. Plise now asks this Panel to ignore her inconsistent position

and reverse the Claim Objection Order. This we will not do.

3. The final consideration is whether allowing the Priority

Claim would provide Ms. Plise an unfair advantage or impose an

unfair detriment on the Trustee. Clearly, it would. The Trustee

negotiated a settlement with Ms. Plise for the articulated purpose

of bringing the Settlement proceeds into the bankruptcy estate for

the benefit of unsecured creditors. Allowance of the Priority Claim

would render the Settlement an exercise in futility. 

Although the Supreme Court and the Ninth Circuit have

acknowledged that the circumstances where the doctrine of judicial

estoppel apply “are probably not reducible to any general

formulation” (Milton H. Green Archives, Inc, 692 F.3d at 993), in

this appeal the record establishes that Ms. Plise was, and is,

“playing fast and loose with the courts.” The Divorce Decree was

the product of an agreement exclusively between the Debtor and

Ms. Plise that was rubber stamped by the Family Court. Ms. Plise

thereafter entered into two different six-figure settlements, one

with the Bank of George and one with the Trustee, for fraudulent

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transfer claims based on assets she received from the Debtor under

the Divorce Decree. In order to reap the benefits provided by the

Settlement Agreement, including resolution of future liability to

the Trustee, Ms. Plise joined with the Trustee in the Settlement

Approval Motion which explicitly provided that the Settlement

proceeds would benefit the general unsecured creditors. Ms. Plise

then filed the Priority Claim to avoid any impact on her by the

Settlement and to recover the Settlement proceeds for herself. Not

satisfied with that as her objective, Ms. Plise amended the Priority

Claim in an effort to avoid any impact on her by her settlement with

Bank of George, and to recover from the bankruptcy estate an

additional $290,000. Finally, approximately two weeks after the

Settlement was approved by the bankruptcy court, Ms. Plise

transferred to the Debtor $140,000, the source of which can be

traced back to assets transferred to her under the Divorce Decree. 

In protest, Ms. Plise contends she “reserved” her rights to

file the Priority Claim in the Settlement Agreement. However,

Ms. Plise misreads the reservation of rights; by its explicit terms,

the reserved rights relate solely to the enforcement of the

Settlement Agreement itself.

As an example of “playing fast and loose with the courts,” this

appeal represents the paradigm. The application of judicial

estoppel would have been appropriate in the claim proceedings before

the bankruptcy court, and it remains appropriate now. Accordingly,

the bankruptcy court did not err in sustaining the objection to

Ms. Plise’s claim.

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VI. CONCLUSION

Ms. Plise settled the claims against her for fraudulent

transfers. Her efforts to avoid the financial impact of the

Settlement Agreement by filing the Priority Claim are judicially

estopped, as rising to the level of “playing fast and loose with the

courts.” We AFFIRM the bankruptcy court’s entry of the Claim

Objection Order.

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