FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: ROBERT SASSON, 

Debtor.

No. 03-16364

ROBERT SASSON,

BAP No. Appellant, NC-02-01410-

v.  MaMeP

NORMAN F. SOKOLOFF, M.D., AMENDED

individually and as Trustee for OPINION

CAMELOT MEDICAL GROUP, INC.,

PROFIT SHARING PLAN,

Appellee. 

Appeal from the Ninth Circuit

Bankruptcy Appellate Panel

Perris, Meyers, and Marlar, Bankruptcy Judges, Presiding

Argued and Submitted

February 15, 2005—San Francisco, California

Filed August 25, 2005

Amended September 13, 2005

Before: Sidney R. Thomas, Susan P. Graber, and

Richard A. Paez, Circuit Judges.

Opinion by Judge Thomas

13047
COUNSEL

David A. Boone and Susan D. Silveira, Law Offices of David

A. Boone, San Jose, California, for the appellant. 

Wayne A. Silver, Sunnyvale, California, for the appellee. 

OPINION

THOMAS, Circuit Judge: 

In this appeal, we are presented with the question of

whether a bankruptcy court has subject matter jurisdiction to

enter a money judgment in a nondischargeability adversary

proceeding where the underlying debt has been reduced to

judgment in state court. We conclude that it may and affirm

the decision of the Ninth Circuit Bankruptcy Appellate Panel

(“BAP”). 

I

In 1988, Sokoloff, as trustee of Camelot Medical Group,

Inc., Profit Sharing Plan, obtained a judgment against Sasson

IN RE: SASSON 13051
on a cross-complaint for breach of a promissory note. A California Superior Court entered judgment against Sasson for

$120,000, plus accrued interest and statutory costs. 

Before Sokoloff could enforce the judgment, Sasson filed

a motion for reconsideration and obtained a stay of enforcement pending determination of the motion for reconsideration.

The stay was granted subject to the condition that Sasson “not

dissipate any assets except in the normal course of business.”

While the stay was in place and without informing the court

of his actions, Sasson dissipated the majority of his assets

through dissolution proceedings with his wife, purchase of a

new property, creation of encumbrance on that property and

ultimately by payment to other creditors. The court denied

Sasson’s motion for reconsideration, and Sokoloff recorded

an abstract of judgment. At that point, however, the judgment

was uncollectible. 

Subsequently, Sasson filed a voluntary petition for relief

under Chapter 7 of the Bankruptcy Code, 11 U.S.C. §§ 301,

701-784 in the Northern District of California. His bankruptcy

schedule did not mention Sasson’s recent transfer of assets.

Sokoloff then filed a complaint seeking a determination of

nondischargeability of the state court judgment under 11

U.S.C. § 523(a)(6) and a denial of discharge under 11 U.S.C.

§ 727(a)(2).1 The bankruptcy court rejected the § 727(a)(2)

claim, but found that Sasson’s transfer of assets in violation

of the state court stay constituted a willful and malicious

injury under § 523(a)(6). The court entered a judgment for

1Under 11 U.S.C. § 523(a)(6) of the Bankruptcy Code, any debt “for

willful and malicious injury by the debtor to another entity or to the property of another entity” shall not be dischargeable in bankruptcy. Under 11

U.S.C. § 727(a)(2), a debtor may not obtain a discharge if “the debtor,

with intent to hinder, delay, or defraud a creditor . . . has transferred,

removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed . . . property of the

debtor, within one year before the date of the filing of the petition.” 11

U.S.C. § 727(a)(2). 

13052 IN RE: SASSON
$148,142.46 plus costs and accruing interest. Sasson filed an

appeal of this decision, but later dismissed it. Subsequently,

both Sasson’s bankruptcy and the adversary proceeding were

closed by the bankruptcy court. 

Sokoloff continued to pursue collection remedies in bankruptcy court. Sokoloff filed a notice of the judgment lien and

recorded an abstract of judgment. Sokoloff then obtained a

Writ of Execution to the United States Marshal and instructed

the Marshal to levy on Sasson’s wages. Sasson filed a claim

of exemption, which the court granted in part. 

In 2001, Sokoloff renewed the 1991 Judgment. The bankruptcy court issued an Abstract of Judgment for $239,160.42

on July 9, 2001, which was then recorded. Subsequently, the

bankruptcy court granted Sasson’s ex-parte motion to reopen

his Chapter 7 proceedings for sixty days. Sasson then filed a

motion pursuant to Federal Rule of Civil Procedure 60(b) to

vacate the 1991 money judgment and to quash the 2001

abstract of judgment. In his motion, Sasson argued that the

bankruptcy court lacked subject matter jurisdiction to enter a

new federal money judgment and therefore the renewal of

judgment and abstract of judgment were void ab initio. The

bankruptcy court denied the motion after a hearing. Sasson

filed a notice of appeal, which was referred to the BAP. The

BAP affirmed the bankruptcy court, holding that the bankruptcy court had jurisdiction both to enter the 1991 judgment

of nondischargeability and to determine the amount of damages caused by Sasson’s postjudgment conduct. Sokoloff

timely appealed the BAP decision. 

We review both the bankruptcy court’s and the BAP’s

interpretation of the Bankruptcy Code de novo. Debbie Reynolds Hotel & Casino, Inc. v. Calstar Corp. (In re Debbie

Reynolds Hotel & Casino, Inc.), 255 F.3d 1061, 1065 (9th

Cir. 2001). We review a ruling on a motion to set aside a

judgment as void de novo “because the question of the validity of a judgment is a legal one.” Export Group v. Reef Indus.,

IN RE: SASSON 13053
54 F.3d 1466, 1469 (9th Cir. 1995). We review the scope of

the exercise of equitable power de novo, Graves v. Myrvang

(In re Myrvang), 232 F.3d 1116, 1124 (9th Cir. 2000), and the

exercise of equitable power for an abuse of discretion, id. at

1121. 

II

The bankruptcy court had jurisdiction to enter a money

judgment in the adversary proceeding. We have long held that

“the Bankruptcy Court has jurisdiction to enter a monetary

judgment on a disputed state law claim in the course of making a determination that a debt is nondischargeable.” Cowen

v. Kennedy (In re Kennedy), 108 F.3d 1015, 1016 (9th Cir.

1997). 

A

[1] Our holding in Kennedy was firmly grounded. Under

the original 1898 Bankruptcy Act, Pub. L. No. 55-171, 30

Stat. 544 (repealed 1978) (as amended through date of repeal)

(“1898 Bankruptcy Act”), bankruptcy courts were considered

to have equitable jurisdiction to issue orders in aid of a nondischargeability determination. Local Loan Co. v. Hunt, 292

U.S. 234, 240 (1934); see also Pepper v. Litton, 308 U.S. 295,

304 (1939) (“[F]or many purposes courts of bankruptcy are

essentially courts of equity, and their proceedings inherently

proceedings in equity.” (internal quotation marks omitted)). 

In 1970, Congress codified the power of bankruptcy courts,

in the exercise of their power to declare debts nondischargeable, to “determine the remaining issues, render judgment,

and make all orders necessary for the enforcement thereof.”

1898 Bankruptcy Act § 17(c)(3). When Congress enacted the

Bankruptcy Reform Act of 1978, Pub. L. No. 95-598, 92 Stat.

2549 (“Bankruptcy Code” or “Code”), Congress removed

specific jurisdictional language in favor of a general broad

jurisdictional grant. However, in doing so, it clearly intended

13054 IN RE: SASSON
to incorporate the specific pre-Code jurisdiction of the bankruptcy courts.2

 In addition, the Bankruptcy Code specifically

provides that: 

The 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 title providing for the raising of an issue by a party in interest

shall be construed to preclue the 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. 

11 U.S.C. § 105(a) (emphasis added). Thus, the bankruptcy

court clearly has the power under the Bankruptcy Code to

determine whether a debt is nondischargeable, to “determine

the remaining issues, render judgment, and make all orders

necessary for the enforcement thereof,” and to “issue any

order, process, or judgment that is necessary or appropriate in

carrying out” the order of nondischargeability. 

[2] In addition to continuation of the bankruptcy court’s

pre-Code jurisdiction and the specific grant of new powers,

the Bankruptcy Code provided for the exercise of “original

but not exclusive jurisdiction of all civil proceedings arising

under title 11, or arising in or related to cases under title 11.”

2The jurisdiction of bankruptcy courts under the Bankruptcy Code was

to include “items that the bankruptcy courts are now able to bear [sic]

under [the 1898] Act § 2a,” including “determination of dischargeability

of debts [and] liquidation of non-dischargeable debts.” H.R. Rep. No. 95-

595, at 446, 49 (1977) (footnote referencing 1898 Act § 17c omitted),

reprinted in 1978 U.S.C.C.A.N. 5963, 6401, 6010; see also id. at 363 (noting that “the comprehensive grant of jurisdiction prescribed in proposed

[statute] . . . is adequate to cover the full jurisdiction that the bankruptcy

courts have today over dischargeability and related issues under Bankruptcy Act § 17c”), reprinted in 1978 U.S.C.C.A.N. at 6319; S. Rep. No.

95-989, at 77 (1978) (same), reprinted in 1978 U.S.C.C.A.N. 5787, 5863.

IN RE: SASSON 13055
28 U.S.C. § 1334(b). A bankruptcy court’s “related to” jurisdiction is very broad, “including nearly every matter directly

or indirectly related to the bankruptcy.” Mann v. Alexander

Dawson (In re Mann), 907 F.2d 923, 926 n.4 (9th Cir. 1990).

The bankruptcy court’s “related to” jurisdiction granted by the

Bankruptcy Code derives directly from the Bankruptcy

Clause, which grants Congress the power “[t]o establish . . .

uniform Laws on the subject of Bankruptcies throughout the

United States.” U.S. Const., art. 1, § 8. Congress expanded the

Bankruptcy Court’s Article I jurisdiction by granting federal

district courts with “original and exclusive jurisdiction of all

cases under title 11.” 28 U.S.C. § 1334(a). Thus, at present,

the bankruptcy court’s “related to” jurisdiction also includes

the district court’s supplemental jurisdiction pursuant to 28

U.S.C. § 1367 “over all other claims that are so related to

claims in the action within [the court’s] original jurisdiction

that they form part of the same case or controversy under

Article III of the United States Constitution.” See Montana v.

Goldin (In re Pegasus Gold Corp.), 394 F.3d 1189, 1195 (9th

Cir. 2005); Sec. Farms v. Int’l Bhd. of Teamsters, 124 F.3d

999, 1008 n.5 (9th Cir. 1997). 

[3] Even the discharge of a debtor does not automatically

deprive the federal courts of jurisdiction over a claim “related

to” the bankruptcy. See Kieslich v. United States (In re Kieslich), 258 F.3d 968, 971 (9th Cir. 2001). Indeed, we have held

that a bankruptcy courts’s “related to” jurisdiction includes

post-confirmation jurisdiction over state court actions such as

breach of contract, breach of convenant of good faith and fair

dealing, and fraud when those claims have a “close nexus” to

the bankruptcy proceeding. In re Pegasus Gold Corp., 394

F.3d at 1194; see also Celotex Corp. v. Edwards, 514 U.S.

300, 309 (1995). We have also held that bankruptcy courts

have post-discharge jurisdiction to enjoin collection actions,

even if those actions occur in another country. Hong Kong &

Shanghai Banking Corp. v. Simon (In re Simon), 153 F.3d

991, 996 (9th Cir. 1998). 

13056 IN RE: SASSON
In addition, bankruptcy courts retain their traditional equitable powers under the Bankruptcy Code. Johnson v. Home

State Bank, 501 U.S. 78, 88 (1991) (per curiam) (“[T]he bankruptcy court retains its broad equitable power to issue any

order, process, or judgment that is necessary or appropriate to

carry out the provisions of the Code.”) (quotation marks omitted)). As the Supreme Court has instructed, when a creditor

files a claim in bankruptcy, “the creditor triggers the process

of ‘allowance and disallowance of claims,’ thereby subjecting

himself to the bankruptcy court’s equitable power.” Langenkamp v. Culp, 498 U.S. 42, 44 (1990) (quoting Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 58-59 (1989)). The

bankruptcy court’s equitable power is not unfettered; it must

be exercised to carry out the provisions of the Bankruptcy

Code. Saxman v. Educ. Credit Mgmt. Corp. (In re Saxman),

325 F.3d 1168, 1174 (9th Cir. 2003). However, we have recognized that “a bankruptcy court is a court of equity and

should invoke equitable principles and doctrines, refusing to

do so only where their application would be ‘inconsistent’

with the Bankruptcy Code.” Beaty v. Selinger (In re Beaty),

306 F.3d 914, 922 (9th Cir. 2002) (citing In re Myrvang, 232

F.3d at 1124). 

[4] “Bankruptcy Courts have exclusive jurisdiction over

nondischargeability actions brought pursuant to 11 U.S.C.

§ 523(a)(2), (4), (6) and (15).” Rein v. Providian Fin. Corp.,

270 F.3d 895, 904 (9th Cir. 2001). This is a dischargeability

action brought pursuant to 11 U.S.C. § 523(a)(6). As we reasoned in Kennedy: 

“If it is acknowledged as beyond question that a

complaint to determine dischargeability of a debt is

exclusively within the equitable jurisdiction of the

bankruptcy court, then it must follow that the bankruptcy court may also render a money judgment in

an amount certain without the assistance of a jury.

This is true not merely because equitable jurisdiction

attaches to the entire cause of action but more imporIN RE: SASSON 13057
tantly because it is impossible to separate the determination of dischargeability function from the

function of fixing the amount of the nondischargeable debt.” 

Kennedy, 108 F.3d at 1017-18 (quoting Snyder v. Devitt (In

re Devitt), 126 B.R. 212, 215 (Bankr. D. Md. 1991)). Our sister circuits have reached similar conclusions. Porges v. Gruntal & Co. (In re Porges), 44 F.3d 159, 165 (2d Cir. 1995);

Longo v. McLaren (In re McLaren), 3 F.3d 958, 965-66 (6th

Cir. 1993); N.I.S. Corp. v. Hallahan (In re Hallahan), 936

F.2d 1496, 1507-08 (7th Cir. 1991). Given the text and history

of the Bankruptcy Code and the bankruptcy court’s inherent

equitable powers, it is clear, as we held in Kennedy, that bankruptcy courts have jurisdiction and power to enter money

judgments in adjudicating nondischargeability adversary proceedings. 

B

[5] Sasson attempts to distinguish Kennedy from this case

because Kennedy involved an unliquidated claim. Kennedy

made no such distinction, and there is no principled jurisdictional distinction to be drawn. There is nothing in the text of

the Bankruptcy Code or its history that contains a jurisdictional exception for debts that have been liquidated to judgment. To hold otherwise would be to deprive the bankruptcy

court of its exclusive jurisdiction over bankruptcy discharge

pursuant to 11 U.S.C. § 523(a). As the Supreme Court has

noted, “[s]ince 1970 [ ], the issue of nondischargeability has

been a matter of federal law governed by the terms of the

Bankruptcy Code.” Grogan v. Garner, 498 U.S. 279, 284

(1991) (citing Brown v. Felsen, 442 U.S. 127, 129-30 (1979)).

The Bankruptcy Code provides that bankruptcy courts “may

issue any order, process, or judgment that is necessary or

appropriate to carry out the provisions of this title.” 11 U.S.C.

§ 105. Notably, it does not contain an additional clause stating

“except when the debt has been liquidated to judgment.” 

13058 IN RE: SASSON
The debtor invoked bankruptcy court subject matter and in

personam jurisdiction by filing a voluntary petition in bankruptcy. With the commencement of the case, the bankruptcy

court acquired exclusive in rem jurisdiction over all the debtor’s legal or equitable interests in property wherever located

and by whomever held. 28 U.S.C. § 1334(e); Commodity

Futures Trading Comm’n v. Co Petro Mktg. Group, Inc., 700

F.2d 1279, 1282 (9th Cir. 1983). By filing a proof of claim,

the creditor in this case became subject to the bankruptcy

court’s in personam jurisdiction, and the limitations of the

Bankruptcy Code. In re Simon, 153 F.3d at 997. The parties

were clearly subject to both subject matter and in personam

jurisdiction of the bankruptcy court. 

[6] The fact that a debt has been previously liquidated to

judgment does not deprive the bankruptcy court of jurisdiction, nor of any of its statutory and equitable power. It may,

as we shall discuss in Part II.D, have an effect on the form of

relief that the bankruptcy court grants in nondischargeability

proceedings. However, it does not alter the Kennedy jurisdictional analysis. The existence of a state court judgment does

not deprive the bankruptcy court of the statutory power to

enter a new judgment of nondischargeability. 

C

[7] Sasson argues that the Rooker-Feldman doctrine3 alters

this jurisdictional analysis. However, the Rooker-Feldman

doctrine did not deprive the bankruptcy court of jurisdiction

to enter the money judgment in the nondischargeability adver3The doctrine takes its name from Rooker v. Fidelity Trust Co., 263

U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman,

460 U.S. 462 (1983). Rooker held that federal statutory jurisdiction over

direct appeals from state courts lies exclusively in the Supreme Court and

is beyond the original jurisdiction of federal district courts. 263 U.S. at

415-16. Feldman held that this jurisdictional bar extends to particular

claims that are “inextricably intertwined” with those a state court has

already decided. 460 U.S. at 486-87. 

IN RE: SASSON 13059
sary proceeding. The Rooker-Feldman doctrine is based on

the statutory proposition that federal district courts are courts

of original, not appellate, jurisdiction. See 28 U.S.C. §§ 1331,

1332. Therefore, federal district courts have “no authority to

review the final determinations of a state court in judicial proceedings.” Worldwide Church of God v. McNair, 805 F.2d

888, 890 (9th Cir. 1986). Only the Supreme Court has original

jurisdiction to review “[f]inal judgments or decrees rendered

by the highest court of a State in which a decision could be

had.” 28 U.S.C. § 1257(a). As the Supreme Court has recently

explained, the Rooker-Feldman doctrine “is confined to cases

of the kind from which the doctrine acquired its name: cases

brought by state-court losers complaining of injuries caused

by state-court judgments rendered before the district court

proceedings commenced and inviting district court review and

rejection of those judgments.” Exxon Mobil Corp. v. Saudi

Basic Indus., 125 S.Ct. 1517, 1521-22 (2005). 

[8] Application of the Rooker-Feldman doctrine in bankruptcy is limited by the separate jurisdictional statutes that

govern federal bankruptcy law. Gruntz v. County of Los Angeles (In re Gruntz), 202 F.3d 1074, 1079 (9th Cir. 2000) (en

banc). The Rooker-Feldman doctrine has little or no application to bankruptcy proceedings that invoke substantive rights

under the Bankruptcy Code or that, by their nature, could

arise only in the context of a federal bankruptcy case. Id. at

1081. In the exercise of federal bankruptcy power, bankruptcy

courts may avoid state judgments in core bankruptcy proceedings, see, e.g., 11 U.S.C. §§ 544, 547, 548, 549, may modify

judgments, see, e.g., 11 U.S.C. §§ 1129, 1325, and, of primary importance in this context, may discharge them, see,

e.g., 11 U.S.C. §§ 727, 1141, 1328. 

The Rooker-Feldman doctrine has no application here. Sasson is not seeking to have the bankruptcy court review the

merits of the state court judgment; rather, he is attempting to

prevent the bankruptcy court from giving effect to the state

court judgment. Likewise, the creditor is not seeking modifi13060 IN RE: SASSON
cation of the state court judgment; it is attempting to save the

judgment from bankruptcy discharge. 

[9] In entering judgment, the bankruptcy court was exercising its exclusive statutory power to determine whether a debt

is dischargeable in a bankruptcy case. See 11 U.S.C.

§§ 523(a)(6), 727(a)(2). Actions seeking a determination of

nondischargeability are core bankruptcy proceedings, see 28

U.S.C. § 157(b)(2)(I), and are not subject to the RookerFeldman doctrine. See Gruntz, 202 F.3d at 1081-82. The

Rooker-Feldman doctrine did not deprive the bankruptcy

court of jurisdiction to enter the money judgment in this case.

D

Sasson also argues that the bankruptcy court lacked jurisdiction to enter a money judgment by operation of the full

faith and credit statute, 28 U.S.C. § 1738, and the doctrines of

res judicata and collateral estoppel. Unlike the RookerFeldman doctrine, these doctrines do not affect the jurisdiction of federal courts. See, e.g., EEOC v. Children’s Hosp.

Med. Ctr. of N. Cal., 719 F.2d 1426, 1430 (9th Cir. 1983) (en

banc) (“[R]es judicata is an affirmative defense under the

rules of civil procedure. Fed.R.Civ.P. 8(c). It is not a jurisdictional doctrine.” ). Moreover, central to the operation of the

bankruptcy courts is the idea that the debtor’s debts, including

debts liquidated to judgments, may be modified and discharged. See, e.g., 11 U.S.C. §§ 544, 547, 548, 549, 727,

1129, 1141, 1325, 1328. 

[10] In short, “[f]inal judgments in state courts are not necessarily preclusive in United States bankruptcy courts.”

Gruntz, 202 F.3d at 1079. Thus, we must reject Sasson’s argument that the doctrines of full faith and credit, res judicata,

and collateral estoppel deprive the bankruptcy court of the

jurisdiction to enter a money judgment in a discharge order

involving liquidated debts. 

IN RE: SASSON 13061
This does not, of course, mean that the preclusion doctrines

do not have any bearing on federal bankruptcy discharge proceedings. The Supreme Court has stated that “collateral estoppel principles do indeed apply in discharge exception

proceedings pursuant to § 523(a).” Grogan, 498 U.S. at 284

n.11. Further, we have held that “[t]he full faith and credit

requirement of § 1738 compels a bankruptcy court in a

§ 523(a)(2)(A) nondischargeability proceeding to give collateral estoppel effect to a prior state court judgment.” Gayden

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

1995) (per curiam).4

In the bankruptcy discharge context, this means that “[i]f,

in the course of adjudicating a state-law question, a state court

should determine factual issues using standards identical to

those of [§ 523], then collateral estoppel, in the absence of

countervailing statutory policy, would bar relitigation of those

issues in the bankruptcy court.” Brown, 442 U.S. at 139 n.10.

The classic example of the proper use of issue preclusion in

discharge proceeding is when the amount of the debt has been

determined by the state court and reduced to judgment. In that

4

“In determining whether a party should be estopped from relitigating

an issue decided in a prior state court action, the bankruptcy court must

look to that state’s law of collateral estoppel.” Diamond v. Kolcum (In re

Diamond), 285 F.3d 822, 826 (citing Nourbakhsh, 67 F.3d at 800). Thus,

we have held: 

Under California law, collateral estoppel only applies if certain

threshold requirements are met: ‘First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually

litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in

the former proceeding must be final and on the merits. Finally,

the party against whom preclusion is sought must be the same as,

or in privity with, the party to the former proceeding.’ 

Cal-Micro, Inc. v. Cantrell, (In re Cantrell), 329 F.3d 1119, 1123 (9th Cir.

2003) (quoting Harmon v. Kobrin (In re Harmon), 250 F.3d 1240, 1245

(9th Cir. 2001)). 

13062 IN RE: SASSON
event, if there are no new issues, the bankruptcy court should

ordinarily decline to allow the parties to relitigate the debt

amount and should give the state court judgment as to the

amount of preclusive effect. Comer v. Comer (In re Comer),

723 F.2d 737, 740 (9th Cir. 1984). For the same reason, we

have held that if the issue of fraud had been litigated in state

court, the state court judgment would preclude relitigation of

the same issue by the bankruptcy court in discharge proceedings. Nourbaskhsh, 67 F.3d at 801. Thus, the doctrines of preclusion play an important part in dischargeability proceedings

by preventing the relitigation of factual and legal issues

already determined by other courts. 

[11] However, a preexisting judgment does not have preclusive effect on the bankruptcy court’s determination of dischargeability. The Supreme Court firmly rejected such an idea

in Brown, specifically holding that “the bankruptcy court is

not confined to a review of the judgment and record in the

prior state-court proceedings when considering the dischargeability of respondent’s debt.” Brown, 442 U.S. at 138-39.

We explained this analytical distinction in Comer: 

Res judicata should not be applied to bar a claim by

a party in bankruptcy proceedings, nor should a

bankruptcy judge rely solely on state court judgments when determining the nature of a debt for purposes of dischargeability, if doing so would prohibit

the bankruptcy court from exercising its exclusive

jurisdiction to determine dischargeability. 

In re Comer, 723 F.2d at 740. 

As we explained in Comer, determination of the amount of

the debt by the state court did not impact the dischargeability

decision: 

In the present case, applying res judicata to bar the

bankruptcy court from looking behind the default

IN RE: SASSON 13063
judgment to determine the actual amount of the obligation would not preclude the exercise of the bankruptcy court’s exclusive jurisdiction to determine the

nature of the subject debt for purposes of dischargeability. 

Id. In Comer, because the state court judgment involved the

“extent of [the debtor’s] obligation . . . , not the nature of that

debt,” it was not relevant to the bankruptcy court’s exercise

of its power to determine the dischargeability of a debt; therefore, we concluded that the bankruptcy court properly gave

preclusive effect to the prior judgment. Id.

In this case, the parties were not relitigating the merits of

the state court judgment in the nondischargeability proceeding. The adversary proceeding was based on Sasson’s “willful

and malicious” post-judgment conduct, not on the contractual

breach that formed the basis of the state court judgment. Thus,

the parties were litigating a different claim in the nondischargeability proceeding in bankruptcy, which was not precluded

by the state court contract claim judgment. Id. Indeed, the

creditor was not seeking to upend the state court judgment;

rather, he simply was attempting to enforce it by defending

against the discharge of the debt in bankruptcy. The bankruptcy court did not re-determine the amount of the state court

debt; the court relied upon the state court determination. Thus,

the various preclusion doctrines did not operate to prevent the

bankruptcy court from entering a judgment of nondischargeability in this case. See Diamond, 285 F.3d at 829. The bankruptcy court’s actions throughout the adversary proceedings

were entirely consistent with the law of issue preclusion as we

have applied it to bankruptcy discharge. 

[12] The only remaining question, then, is whether the various doctrines of issue preclusion prevented the bankruptcy

court from enforcing its dischargeability determination by

including a money judgment in its resolution of the adversary

proceeding. They clearly do not. As the Supreme Court has

13064 IN RE: SASSON
held, affording full faith and credit to a judgment does not

require a court to “adopt the practices of [the jurisdiction that

granted the judgment] regarding the time, manner, and mechanisms for enforcing judgments.” Baker ex rel. Thomas v.

General Motors Corp., 522 U.S. 222, 235 (1998). As the

Supreme Court explained, “[e]nforcement measures do not

travel with the sister state judgment as preclusive effects do;

such measures remain subject to the evenhanded control of

forum law.” Id. (citing McElmoyle ex rel. Bailey v. Coyen, 13

Pet. 312, 325, 10 L.Ed. 177 (1839) (holding that judgment

may be enforced only as “laws [of enforcing forum] may permit”) and Restatement (Second) of Conflict of Laws § 99

(1969) (“The local law of the forum determines the methods

by which a judgment of another state is enforced.”)). 

[13] In sum, none of the doctrines of issue preclusion dictate how a bankruptcy court may choose to enforce its determination of nondischargeability. That is a question reserved

to the bankruptcy courts in the exercise of their broad equitable powers in bankruptcy. In so doing, as we have discussed,

bankruptcy courts are authorized by statute to issue “any

order, process, or judgment that is necessary or appropriate to

carry out the provisions of this title.” 28 U.S.C. § 105. In

addition, the bankruptcy court may use its inherent equitable

power to fashion relief, so long as the remedy is consistent

with the objectives of the Bankruptcy Code. In re Saxman,

325 F.3d at 1174. Thus, as a matter of law, a prior judgment

does not preclude a bankruptcy court from exercising its

power to determine how best to enforce its own dischargeability order. 

[14] The bankruptcy court here, therefore, had the authority

to enter a money judgment in conjunction with its nondischargeability order. “It does not follow, however, that the court

was bound to exercise its authority. And it probably would

not and should not have done so except under unusual circumstances such as here exist.” Hunt, 292 U.S. at 241. The existence of a prior judgment may introduce some prudential

IN RE: SASSON 13065
concerns, such as comity, that a bankruptcy court should take

into consideration in fashioning relief. See Smith v. Lachter

(In re Smith), 242 B.R. 694 (B.A.P. 9th Cir. 1999) (noting that

the filing of a new money judgment is not necessary when

there is an existing effective state court judgment); Gertsch v.

Johnson & Johnson Fin. Corp. (In re Gertsch), 237 B.R. 160

(B.A.P. 9th Cir. 1999) (discussing the potential confusion and

complication caused by the entry of multiple judgments).5

Although important considerations, these prudential concerns

do not affect the jurisdiction and the power of the bankruptcy

court to enter a new money judgment as part of declaring a

debt nondischargeable.6 Rather, these prudential issues are

best committed to the judgment of the bankruptcy court, subject to review for abuse of discretion. In re Myrvang, 232 F.3d

at 1121. In examining prudential considerations, we must also

remember that “[t]he Supreme Court found that the overriding

purpose of § 523 is to protect victims of fraud.” Muegler v.

Bening, 413 F.3d 980, 983 (9th Cir. 2005) (citing Cohen v. de

la Cruz, 523 U.S. 213, 222-23 (1998)). Thus, a bankruptcy

court does not act outside the purposes of the Bankruptcy

Code by providing victims of fraud an additional means of

enforcing a nondischargeability judgment in an appropriate

case. 

5We interpret Smith and Gertsch as involving prudential considerations.

To the extent that these cases may be construed as holding that bankruptcy

courts have no jurisdiction or authority to enter a money judgment on a

liquidated claim, we must respectfully disagree. We also disagree with the

approach taken by the Fourth Circuit in Heckert v. Dotson (In re Heckert),

272 F.3d 253, 257 (4th Cir. 2001). In our opinion, Heckert did not give

sufficient consideration and deference to bankruptcy court’s broad equitable powers to fashion relief. 

6Many of the prudential considerations involved in the entry of multiple

judgments can be addressed in the original state forum. For example, in

California, the rule as to multiple judgments is that, if a party receives

multiple judgments on a single claim, that party can have just one satisfaction. See Textron Financial Corp. v. National Union Fire Ins. Co. of Pittsburgh, 118 Cal. App. 4th 1061, 1078 (Cal. Ct. App. 2004); McCall v. Four

Star Music Co., 51 Cal. App. 4th 1394, 1398 (Cal. Ct. App. 1996). 

13066 IN RE: SASSON
Applying these principles to the case at hand, we conclude

that the bankruptcy court acted well within its discretion in

entering the new money judgment. Several circumstances rendered the bankruptcy court’s entry of a new money judgment

necessary and appropriate. The creditor obtained a state court

judgment, which proved uncollectible at the time. When the

creditor commenced further collection proceedings, the debtor

filed bankruptcy. Based on the debtor’s post-state judgment

behavior, the bankruptcy court concluded that the debt was

nondischargeable because the debtor had engaged in fraud.

The court entered a money judgment as part of the judgment

of nondischargeability. The debtor did not object, but waited

until the creditor had allowed the state court judgment to lapse

in favor of the discharge judgment. When the discharge judgment was renewed, the debtor then sought to prevent the

bankruptcy court from issuing an enforcement order that

would give effect to the prior state judgment, arguing that the

lapsed state court judgment precluded it. However, as the

BAP found, the debtor had engaged in “wilful and malicious

behavior” in rendering the initial state court judgment uncollectible. The debtor in this case is clearly attempting to

manipulate both the federal and state court systems to avoid

paying the debt, which the bankruptcy court has found nondischargeable. Given the history of the case, the bankruptcy

court’s action in entering a new money judgment and renewing the judgment was entirely proper. 

[15] Sasson would turn the law of preclusion on its head by

having us hold that the existence of a lapsed underlying state

court judgment precludes enforcement of that judgment in

federal court. He would have us hold that we can only uphold

a creditor’s right to full faith and credit of a state court judgment by denying the creditor the right to enforce the judgment. In this context, the doctrines of full faith and credit,

collateral estoppel, and res judicata do not apply to prevent a

bankruptcy court from entering a money judgment when ruling on the dischargeability of the underlying debt in the exercise of its equitable power. 

IN RE: SASSON 13067
III

[16] For all of these reasons, we conclude that the court did

not err in declining to award relief pursuant to Rule 60(b)(4).

Under Federal Rule of Civil Procedure 60(b), a court may

relieve a party from judgment for the following reasons: (1)

mistake, inadvertence, surprise, or excusable neglect; (2)

newly discovered evidence; (3) fraud or other misconduct; (4)

a void judgment; (5) a satisfied or discharged judgment; or (6)

any other reason justifying relief from operation of judgment.

Sasson contends that he is entitled to relief because the judgment entered by the bankruptcy court was void. A “ ‘judgment is not void merely because it is erroneous.’ ” Ministry of

Def. & Support for the Armed Forces v. Cubic Def. Sys., 385

F.3d 1206, 1225 (9th Cir. 2004) (quoting United States v.

Holtzman, 762 F.2d 720, 724 (9th Cir. 1985)), petition for

cert. filed, 73 U.S.L.W. 3498 (Feb. 11, 2005). We have consistently held that a “final judgment is ‘void’ for purposes of

Rule 60(b)(4) only if the court that considered it lacked jurisdiction, either as to the subject matter of the dispute or over

the parties to be bound, or acted in a manner inconsistent with

due process of law.” United States v. Berke, 170 F.3d 882,

883 (9th Cir. 1999) (emphasis added); Cubic Def. Sys., 385

F.3d at 1226 (“A judgment is void only if the issuing court

lacked subject-matter jurisdiction over the action or if the

judgment was otherwise entered in violation of due process.”). 

[17] Given that the bankruptcy court acted well within its

jurisdiction and authority in entering the money judgment in

the first instance, the judgment was not void. The court was

entirely correct in declining to grant relief under Rule 60(b).

AFFIRMED.

13068 IN RE: SASSON