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FILED

OCT 13 2016

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. AZ-15-1396-FLJu

)

RODNEY FRANK KRENZ, ) Bk. No. 2:10-bk-04317-DPC

)

Debtor. )

_____________________________ )

)

TRACY A. NEUMAN, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

RODNEY FRANK KRENZ, )

)

Appellee. )

______________________________)

Submitted Without Argument

on September 23, 2016

Filed – October 13, 2016

Appeal from the United States Bankruptcy Court

for the District of Arizona

Honorable Daniel P. Collins, Chief Bankruptcy Judge, Presiding

 

Appearances: Appellant Tracy A. Neuman, pro se, on brief; David

Allegrucci on brief for Appellee Rodney Frank

Krenz.

 

Before: FARIS, LAFFERTY, and JURY, Bankruptcy Judges.

* 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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INTRODUCTION

Appellant Tracy A. Neuman appeals the bankruptcy court’s

orders (1) allowing chapter 131 debtor Rodney Frank Krenz to

amend his schedules to include debt owed to her and extending the

time for her to file a proof of claim and (2) overruling

Ms. Neuman’s objection to discharge. We hold that Ms. Neuman’s

appeal of the first order was untimely and, in any event, the

court did not violate Ms. Neuman’s due process rights. We also

hold that the court did not err in rejecting Ms. Neuman’s

argument that Mr. Krenz defrauded the court. Accordingly, we

AFFIRM.

FACTUAL BACKGROUND2

This case arises out of a contentious divorce between

Ms. Neuman and Mr. Krenz. As the bankruptcy court noted, the

parties have acted “equally horribl[y]” toward each other. This

mutual hatred affected not just the divorce proceedings, but also

this bankruptcy proceeding.

Ms. Neuman and Mr. Krenz were married in 2006. The couple

owned a number of pieces of real property, but resided together

at McNair Drive in Tempe, Arizona (the “Marital Residence”).

In 2007, at Mr. Krenz’s request, Ms. Neuman took out a home

1 Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all

“Rule” references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037, and all “Civil Rule” references are

to the Federal Rules of Civil Procedure, Rules 1-86.

2 We have exercised our discretion to review the bankruptcy

court’s docket, as appropriate. See Woods & Erickson, LLP v.

Leonard (In re AVI, Inc.), 389 B.R. 721, 725 n.2 (9th Cir. BAP

2008).

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equity loan on her solely-owned real property and loaned the

$100,000 proceeds to Mr. Krenz. Mr. Krenz routinely made monthly

payments of $600 to Ms. Neuman.

In February 2010, Mr. Krenz filed his chapter 13 bankruptcy

petition. He did not include the debt owed to Ms. Neuman in his

schedules. Ms. Neuman did not receive formal notice of the

bankruptcy, but she said that she was aware that he had filed his

petition. The court confirmed Mr. Krenz’s chapter 13 plan, which

provided for payments over a sixty-month period. Mr. Krenz

continued to make the $600 monthly payments to Ms. Neuman

postconfirmation.

While his chapter 13 case was still pending, in February

2013, Mr. Krenz filed for divorce from Ms. Neuman. In the months

that followed, Mr. Krenz tried to convince Ms. Neuman to agree to

sell their Marital Residence. When Ms. Neuman refused - and

outright threatened to obstruct the sale - Mr. Krenz obtained an

order of protection against Ms. Neuman. As a result, Mr. Krenz

obtained exclusive use of the Marital Residence. Ms. Neuman

contended that Mr. Krenz used the order of protection in an

attempt to strong-arm her to sell the Marital Residence. 

Shortly thereafter, in January 2014, Mr. Krenz ceased making

monthly payments to Ms. Neuman for the loan obligation.

In August 2014, seven months before the completion of his

chapter 13 plan payments, Mr. Krenz amended his schedules to

include the debt he owed to Ms. Neuman. Ms. Neuman received

notice of the amendment and objected to the amendment by letter

to the bankruptcy court dated August 19, 2014. She argued that

Mr. Krenz should not be allowed to discharge the debt. She

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stated that he was hiding money and trying to avoid the loan

obligation.

The court held a hearing on the objection. Ms. Neuman

acknowledged that she had actual knowledge of Mr. Krenz’s

bankruptcy filing in 2010. At the conclusion of the hearing, the

court overruled Ms. Neuman’s objection to the amendment. 

However, the court allowed Ms. Neuman to file a claim against

Mr. Krenz’s estate. The court issued court minutes (“Minutes”)

memorializing its ruling. Ms. Neuman timely filed her proof of

claim.

Months later, in June 2015, Ms. Neuman wrote a letter to the

bankruptcy court alleging that Mr. Krenz had been “playing the

system” and making himself look “poor on paper.” She stated that

she was suffering financial hardship due to Mr. Krenz’s failure

to make payments on the $100,000 loan and that he was attempting

to avoid the loan obligation by belatedly adding it to his

schedules. She also argued that he took five or six vacation

trips each year.

Ms. Neuman additionally alleged that Mr. Krenz had secretly

purchased real property at East Vinedo Drive in Tempe, Arizona

(the “Vinedo Property”) around the time he had filed for divorce. 

All documents indicated that Mr. Krenz’s sister, Kerry Arent,

purchased the Vinedo Property in March 2013. However, Ms. Neuman

contended that Ms. Arent conspired with Mr. Krenz to purchase the

Vinedo Property in her name on behalf of Mr. Krenz. Ms. Neuman

alleged that Mr. Krenz began to “secretly rehab” the Vinedo

Property without her knowledge and spent thousands of dollars on

furnishings.

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The bankruptcy court held a hearing regarding Ms. Neuman’s

allegations. The court ordered Ms. Neuman to provide Mr. Krenz

with the evidence substantiating her claims.

On September 15, 2015, the court again held a hearing on

Ms. Neuman’s allegations. Mr. Krenz represented that he had

assembled all of the necessary information to refute Ms. Neuman’s

allegations and provided it to the chapter 13 trustee

(“Trustee”). The Trustee reported that he had not uncovered any

indicia of fraud or bad faith; there was only evidence of “a

painful divorce, but no evidence of fraud.” Ms. Neuman argued at

length about Mr. Krenz’s allegedly bad or fraudulent behavior,

including the alleged scheme to bar her from the Marital

Residence while he secretly acquired the Vinedo Property for

himself. The court decided to treat her letter as an objection

to discharge and set an evidentiary hearing on October 15, 2015

(the “Evidentiary Hearing”).

Ms. Neuman has not provided the Panel with the complete

transcript of the October 15 Evidentiary Hearing. However, we

know that at the conclusion of Ms. Neuman’s evidence, Mr. Krenz

moved for a directed verdict. The court granted the motion and

made a detailed oral ruling. The court noted the vitriol between

the parties but did not find any bad faith or fraud. The court

accepted the testimony of Ms. Arent that she purchased the Vinedo

Property for use as a vacation home in the winter and that she

allowed Mr. Krenz to stay there for free during his divorce and

bankruptcy proceedings. 

Regarding Mr. Krenz’s allegedly extravagant travel, the

court found that the costs were “fairly nominal” and that

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Mr. Krenz had adequately explained the trips. The court also

considered Ms. Neuman’s newly-raised argument regarding the

proceeds of a check paid to Ms. Neuman and deposited in a joint

bank account and later loaned to Mr. Krenz, but held that it

constituted a loan and not a misappropriation or theft.

Regarding Ms. Neuman’s allegation that Mr. Krenz schemed to

evict her from the Marital Residence to force her to agree to

sell the house, the court noted that “it wouldn’t be at all

surprising to me that it is exactly what he planned and exactly

what he concocted as a way of getting to Ms. Newman [sic] because

that’s in effect the course of dealing between the parties and

how they treated each other so horribly.” Nevertheless, the

court determined that it did not need to make any finding on this

matter, because it did not concern the discharge or the denial

thereof.

Similarly, the court made no finding regarding whether

Mr. Krenz perjured himself in state court, because it was not

relevant to the bankruptcy proceedings.

In conclusion, the court stated that Ms. Neuman did not

satisfy “her burden of proving by a preponderance of the evidence

that he has defrauded the Court, that he has stolen assets, that

[he] has hidden assets, [or] that he has perjured himself in this

bankruptcy proceeding.” The court entered an order (“Order”)

denying Ms. Neuman’s objection to discharge on November 10, 2015.

On November 12, Ms. Neuman appealed both the September 25,

2014 Minutes denying the objection to amendment and the

November 10, 2015 Order denying the objection to discharge.

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JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(1). Subject to our discussion below, we have

jurisdiction under 28 U.S.C. § 158.

ISSUES

(1) Whether the bankruptcy court violated Ms. Neuman’s due

process rights when it allowed Mr. Krenz to amend his schedules.

(2) Whether the bankruptcy court erred when it overruled

Ms. Neuman’s objection to Mr. Krenz’s discharge based on fraud

and bad faith.

STANDARDS OF REVIEW

“Whether an appellant’s due process rights were violated is

a question of law we review de novo.” DeLuca v. Seare

(In re Seare), 515 B.R. 599, 615 (9th Cir. BAP 2014) (citing

Miller v. Cardinale (In re DeVille), 280 B.R. 483, 492 (9th Cir.

BAP 2002), aff’d, 361 F.3d 539 (9th Cir. 2004)); see also HSBC

Bank USA, Nat’l Ass’n v. Blendheim (In re Blendheim), 803 F.3d

477, 497 (9th Cir. 2015) (“Whether adequate notice has been given

for the purposes of due process is a mixed question of law and

fact that we review de novo.”). “De novo review requires that we

consider a matter anew, as if no decision had been made

previously.” Francis v. Wallace (In re Francis), 505 B.R. 914,

917 (9th Cir. BAP 2014) (citations omitted).

The court’s directed verdict is now referred to as a

judgment based on partial findings under Civil Rule 52, made

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applicable through Rule 7052.3 “The court’s findings of fact

under [Civil Rule] 52(c) are reviewed for clear error, while its

conclusions of law are reviewed de novo.” Kuan v. Lund

(In re Lund), 202 B.R. 127, 129 (9th Cir. BAP 1996).

DISCUSSION

A. The bankruptcy court did not deny Ms. Neuman due process.

Ms. Neuman first argues that she was denied due process when

the court belatedly allowed Mr. Krenz to amend his schedules to

add the debt owed to Ms. Neuman, because she did not have an

opportunity to object to the confirmation of Mr. Krenz’s plan or

object to the dischargeability of her debt. We disagree.

1. Ms. Neuman’s appeal of the September 25, 2014 Minutes

is untimely.

As an initial matter, Mr. Krenz argues that Ms. Neuman’s

appeal of the September 25, 2014 Minutes was untimely, because

she did not appeal the ruling until November 12, 2015. He argues

that the Minutes were an immediately appealable final order and

that its finality was not dependent upon any other event. We

agree.

The Ninth Circuit has advised that “[a] disposition is final

3 This Panel has previously clarified that: 

Motions for directed verdicts are now called motions

for judgment as a matter of law and are governed by

Civil Rule 50. This rule applies in bankruptcy cases

only if the matter is tried before a jury. Because

this was a bench trial, [the] motion was a motion for a

judgment on partial findings under Rule 7052(c), which

incorporates Civil Rule 52(c).

Diener v. McBeth (In re Diener), 483 B.R. 196, 206 n.6 (9th Cir.

BAP 2012) (internal citation omitted).

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if it contains a complete act of adjudication, that is, a full

adjudication of the issues at bar, and clearly evidences the

judge’s intention that it be the court’s final act in the

matter.” Brown v. Wilshire Credit Corp. (In re Brown), 484 F.3d

1116, 1120 (9th Cir. 2007) (citations and internal quotation

marks omitted). This circuit “follow[s] a pragmatic approach to

finality in bankruptcy – a complete act of adjudication need not

end the entire case, but need only end any of the interim

disputes from which an appeal would lie.” Id. at 1121 (citation

and internal quotation marks omitted). We have noted that

bankruptcy law’s “flexible finality” principle “focuses upon

whether the order affects substantive rights and finally

determines a discrete issue.” Belli v. Temkin (In re Belli),

268 B.R. 851, 854 (9th Cir. BAP 2001) (citations omitted).

Further, this Panel has repeatedly stated that “[a] minute

entry may constitute a dispositive order for notice of appeal

purposes if it: (1) states that it is an order; (2) is mailed to

counsel; (3) is signed by the clerk who prepared it; and (4) is

entered on the docket sheet.” Mullen v. Hamlin (In re Hamlin),

465 B.R. 863, 868 (9th Cir. BAP 2012) (citing In re Lund,

202 B.R. at 130).

The Minutes satisfy all of these requirements.

First, the Minutes are framed as an order. The court

stated:

IT IS ORDERED MS. NEUMAN SHALL HAVE UNTIL OCTOBER 17,

2014 TO FILE A CLAIM AGAINST MR. KRENZ; FAILING WHICH

THE CLAIM WILL BE CONSIDERED A LATE FILED CLAIM.

IT IS FURTHER ORDERED OVERRULING THE OBJECTION TO THE

AMENDED SCHEDULES FILED BY MS. NEUMAN.

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This language disposes of the objection under § 523(a)(3) and

“clearly evidence[s] the bankruptcy judge’s intention that it be

the court’s final act in the matter.” See In re Hamlin, 465 B.R.

at 868. 

Second, Ms. Neuman does not deny that she received a copy of

the Minutes.

Third, an electronically filed document by the court does

not need to contain the judge’s or clerk’s signature to be

official and binding. See Local Rule 5005-2(j) (“Any order or

other court-issued document filed electronically without the

original signature of a judge or clerk has the same force and

effect as if the judge or clerk had signed a paper copy of such

order or other court-issued document and it had been entered on

the docket nonelectronically.”). 

Finally, the Minutes were entered on the bankruptcy court’s

docket.

Accordingly, Ms. Neuman’s appeal of the court’s

September 25, 2014 ruling is untimely and not properly before us

on appeal.

2. The court did not violate Ms. Neuman’s due process

rights when it denied her objection to Mr. Krenz’s

amendment.

Even if Ms. Neuman’s appeal was timely, we would affirm the

Minutes.

a. Due process requires notice and an opportunity to

be heard. 

Generally speaking, a court must give sufficient notice of a

pending proceeding and the opportunity for interested parties to

be heard. See Tennant v. Rojas (In re Tennant), 318 B.R. 860,

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870 (9th Cir. BAP 2004) (“the concept of procedural due process

requires a notice and an opportunity to be heard”). According to

the United States Supreme Court: 

An elementary and fundamental requirement of due

process in any proceeding which is to be accorded

finality is notice reasonably calculated, under all the

circumstances, to apprise interested parties of the

pendency of the action and to afford them an

opportunity to present their objections. The notice

must be of such nature as reasonably to convey the

required information . . . and it must afford a

reasonable time for those interested to make their

appearance. 

Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950)

(citations omitted).

“[T]he concept of notice and a hearing is flexible and

depends on what is appropriate in the particular circumstance.” 

In re Tennant, 318 B.R. at 870 (citing Great Pac. Money Markets,

Inc. v. Krueger (In re Krueger), 88 B.R. 238, 241 (9th Cir. BAP

1988)). For example, a procedure may be “perfectly appropriate”

if it “notifies the debtor of the deficiencies of his petition

and dismisses the case sua sponte without further notice and a

hearing when the debtor fails to file the required forms within a

deadline.” Id. at 870-71 (citing Minkes v. LaBarge

(In re Minkes), 237 B.R. 476, 478–79 (8th Cir. BAP 1999)).

b. Ms. Neuman received both notice and an opportunity

to be heard.

In the present case, Ms. Neuman admitted that she had actual

notice of Mr. Krenz’s bankruptcy when he filed his petition in

2010. As a creditor, she was obligated to file a claim and

protect her rights when she learned of Mr. Krenz’s bankruptcy. 

See Lompa v. Price (In re Price), 79 B.R. 888, 893 (9th Cir. BAP

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1987) (holding “that actual notice of the bankruptcy proceeding

is sufficient to place a creditor on inquiry notice of the

running of the bar date and satisfies due process requirements”),

aff’d, 871 F.2d 97 (9th Cir. 1989) (“In light of our

determination that the appellant was on notice that Price had

filed for bankruptcy relief, the appellant’s due process argument

is without merit.”); § 523(a)(3) (unscheduled debts are

nondischargeable, “unless such creditor had notice or actual

knowledge of the case in time for such timely filing”). The

court did not deny her due process when she knew of Mr. Krenz’s

bankruptcy and took no action to assert her own rights.

Ms. Neuman attempted to explain her inaction by arguing that

she thought that the bankruptcy proceeding only concerned

Mr. Krenz’s business dealings. This assumption was unwarranted

and does not relieve her of her obligation to ascertain the

effect of the bankruptcy case on her rights.

Despite Ms. Neuman’s inaction, the bankruptcy court

accommodated each of her late requests for relief and ensured

that she was heard regarding both her objection to the amendment

and her objection to discharge. The court bent over backwards to

ensure that her procedural and due process rights were protected.

Accordingly, Ms. Neuman was not denied due process. 

c. Ms. Neuman fails to demonstrate any prejudice

arising from the alleged due process violation.

Furthermore, even if Ms. Neuman was denied due process

(which she was not), she does not explain how she was prejudiced. 

Even in cases where a bankruptcy court errs by failing to

provide adequate notice and hearing, the appellant must show

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prejudice from the procedural deficiencies. See Rosson v.

Fitzgerald (In re Rosson), 545 F.3d 764, 776-77 (9th Cir. 2008)

(“Because there is no reason to think that, given appropriate

notice and a hearing, Rosson would have said anything that could

have made a difference, Rosson was not prejudiced by any

procedural deficiency.”). In Rosson, the Ninth Circuit held that

the debtor was deprived of a meaningful opportunity to be heard;

nevertheless, because he could “show no prejudice arising from

the defective process afforded him[,]” the bankruptcy court

properly converted the case to chapter 7. Id.; see City Equities

Anaheim, Ltd. v. Lincoln Plaza Dev. Co. (In re City Equities

Anaheim, Ltd.), 22 F.3d 954, 959 (9th Cir. 1994) (rejecting a due

process claim for lack of prejudice where the debtor could not

show that any different or additional argument would have been

presented if the bankruptcy court had timely approved the

petition for new counsel).

Here, Ms. Neuman has not articulated what she could have

said or done that would have changed the outcome if she had

gotten timely, formal notice of the bankruptcy filing. She was

not deprived of the right to file a timely proof of claim; in the

Minutes, the court extended the time for her to file a claim, and

she filed a claim by that date. She might have objected to the

confirmation of Mr. Krenz’s plan, but she has not stated any

argument that might have defeated the confirmation of the plan. 

She might have objected to Mr. Krenz’s discharge earlier, but the

bankruptcy court thoroughly and carefully considered her

objections at a later date; there is no reason to believe that

the outcome would have been different if she had objected

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earlier. In other words, we fail to see how Ms. Neuman “would

have said anything that could have made a difference.” See

In re Rosson, 545 F.3d at 777.

Moreover, Ms. Neuman actually benefitted from Mr. Krenz’s

failure to include the loan obligation in his schedules. While

non-priority unsecured creditors (including Ms. Neuman) received

only a 1.65 percent disbursement under the plan, Ms. Neuman

actually received much more. From the time Mr. Krenz filed

bankruptcy in February 2010 until the date he stopped paying

Ms. Neuman in January 2014, he paid her approximately $28,800. 

This is far more than the pro rata share received by any other

unsecured creditor. Thus, Ms. Neuman actually received more than

she would have had she been included as a creditor from the

inception of the bankruptcy.

We therefore hold that the court did not deny Ms. Neuman due

process when it permitted Mr. Krenz to amend his schedules and

allowed Ms. Neuman to file her proof of claim.

B. The bankruptcy court did not err in granting a judgment on

partial findings in favor of Mr. Krenz on Ms. Neuman’s

objection to discharge.

Ms. Neuman next argues that the bankruptcy court erred when

it overruled her objection to discharge based on Mr. Krenz’s

alleged fraud and manipulation. However, her failure to provide

us with a full transcript of the Evidentiary Hearing precludes

our informed review of the alleged error.

It is Ms. Neuman’s duty to provide the Panel with a complete

record on appeal. See Welther v. Donell (In re Oakmore Ranch

Mgmt.), 337 B.R. 222, 226 (9th Cir. BAP 2006) (the appellant

“bears the burden of presenting a complete record”). “The

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settled rule on transcripts in particular is that failure to

provide a sufficient transcript may, but need not, result in

dismissal or summary affirmance and that the appellate court has

discretion to disregard the defect and decide the appeal on the

merits.” Kyle v. Dye (In re Kyle), 317 B.R. 390, 393 (9th Cir.

BAP 2004), aff’d, 170 F. App’x 457 (9th Cir. 2006). But see

Ehrenberg v. Cal. State Univ. (In re Beachport Entm’t), 396 F.3d

1083, 1087 (9th Cir. 2005) (“Although summary dismissal is within

the BAP’s discretion, it ‘should first consider whether informed

review is possible in light of what record has been provided.’”).

Ms. Neuman has provided us with only a partial transcript of

the Evidentiary Hearing, which includes only the court’s ruling

after the parties had presented their evidence. Without a full

transcript of the Evidentiary Hearing, we cannot review the

evidence and argument presented by the parties during the

Evidentiary Hearing;4 we therefore do not find any error with the

court’s ruling.

CONCLUSION

For the reasons set forth above, we AFFIRM the bankruptcy

court’s decisions to allow Mr. Krenz to amend his schedules,

permit Ms. Neuman to file a late proof of claim, and deny

Ms. Neuman’s objection to discharge.

4 Similarly, Ms. Neuman included in her excerpts of record a

number of purported exhibits. However, it is unclear whether

these documents were actually offered and admitted into evidence

at the Evidentiary Hearing.

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