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FILED

JUL 14 2017

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NOT FOR PUBLICATION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. NC-16-1070-FBJu

)

JAMES PAUL GARRETT, ) Bk. No. 14-41630

)

Debtor. ) Adv. Pro. 14–04090

______________________________)

)

NOBANTU ANKOANDA, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

JAMES PAUL GARRETT, )

)

Appellee. )

______________________________)

Submitted Without Argument on June 22, 2017

Filed – July 14, 2017

Appeal from the United States Bankruptcy Court

for the Northern District of California

Honorable Charles D. Novak, Bankruptcy Judge, Presiding

 

Appearances: David L. Olson on brief for appellant Nobantu

Ankoanda; appellee James Paul Garrett, pro se, on

brief.

 

Before: FARIS, BRAND, 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 Nobantu Ankoanda appeals from the bankruptcy

court’s judgment in favor of chapter 71 debtor James Paul Garrett

on her nondischargeability claim. Ms. Ankoanda failed to make

any reasonable effort to carry her burden of proof under

§ 523(a)(2), and she waived any claims under §§ 523(a)(4) and

(6). Accordingly, we AFFIRM.

FACTUAL BACKGROUND

Mr. Garrett, an attorney licensed to practice law in

California, provided legal services to Ms. Ankoanda regarding

trust matters. Around 2004, Mr. Garrett told Ms. Ankoanda that

he needed $100,000 for a down payment to purchase real property

located in Oakland, California (the “Oakland Property”). 

The parties did not document the transaction, and

Ms. Ankoanda later gave conflicting testimony about its nature. 

At one point, she testified that the money was payment for

Mr. Garrett’s legal services, but she also said that it was a

“temporary loan.” Whatever the case, Ms. Ankoanda borrowed money

against her real property located in East Palo Alto, California

and used $100,000 as a down payment to purchase the Oakland

Property. She took title to the Oakland Property.

According to Ms. Ankoanda, she was supposed to transfer the

Oakland Property to Mr. Garrett’s “business associates,” who

would refinance the Oakland Property and use the proceeds to

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.

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repay Ms. Ankoanda’s loan. The business associates took title to

the Oakland Property, refinanced it, and got $115,000 in cash. 

However, Ms. Ankoanda said that she only received $10,000 from

the transaction, while Mr. Garrett kept the remainder. 

Mr. Garrett currently resides at the Oakland Property. 

In 2007, Ms. Ankoanda sued Mr. Garrett and others in state

court (the “State Court Action”) for fraud. On the day of trial,

before the trial court received any testimony, Ms. Ankoanda and

Mr. Garrett reached a settlement of the State Court Action. 

Mr. Garrett agreed to make a lump sum payment of $200,000 to

Ms. Ankoanda within a year. He agreed to sign a promissory note

and a deed of trust on the Oakland Property.2

Mr. Garrett apparently never signed a promissory note or

deed of trust and failed to pay the debt when due. Ms. Ankoanda

filed a second complaint against him in state court to enforce

the settlement. 

On March 16, 2014, Mr. Garrett filed a chapter 7 petition in

the bankruptcy court for the Northern District of California. 

Ms. Ankoanda initiated an adversary proceeding against

Mr. Garrett. In her complaint, she offered a brief recitation of

the facts and requested that the court deny dischargeability of

his debt to her. She did not identify any particular statutory

authority.

On January 20, 2016, the bankruptcy court held a trial on

Ms. Ankoanda’s complaint. Ms. Ankoanda was the only witness; as

2 The parties did not reduce the settlement agreement to

writing. The terms of the settlement agreement were orally

placed on the record before the state court.

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the bankruptcy court noted, her testimony was difficult to

follow. She failed to identify Mr. Garrett’s so-called “business

associates” and gave conflicting testimony regarding the nature

of her transaction with Mr. Garrett, her contact with the

business associates, and what representations might be

attributable to Mr. Garrett or the business associates. She did

not introduce any documents evidencing any of the relevant

transactions. Mr. Garrett did not testify. 

At the conclusion of Ms. Ankoanda’s testimony, her counsel

stated, in response to the bankruptcy court’s questions, that she

relied solely on § 523(a)(2).

The court asked both parties to discuss the elements of a

§ 523(a)(2) claim. Both parties repeatedly referred to the

settlement in the State Court Action, but the court explained

that the settlement was not sufficient on its own to prove fraud. 

When neither Ms. Ankoanda’s counsel nor Mr. Garrett could

satisfactorily answer the court’s questions, it commented, “Does

anyone understand what a 523(a)(2) claim is here? I’m beginning

to suspect not.” It questioned why neither party had provided

evidence to substantiate their respective positions and stated,

“I’m just, again, I guess expressing some frustration here at the

level of evidence that’s been presented.”

On February 2, 2016, the bankruptcy court issued its

Decision After Trial. It held that Ms. Ankoanda did not meet her

burden of proof regarding § 523(a)(2)(A) because she failed to

“demonstrate by a preponderance of the evidence exactly what

representations Garrett made to her regarding repayment of the

loan (in contrast to her testimony regarding the representations

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made by the ‘business associates’), or the exact nature of

[Mr.] Garrett’s relationship with his alleged ‘business

associates.’” It found her testimony “inconsistent at best” and

stated that it could not determine if Mr. Garrett should be held

liable for the business associates’ statements.

The bankruptcy court also held that Ms. Ankoanda’s judicial

estoppel argument (contending that Mr. Garrett was estopped from

denying the facts that she alleged in the State Court Action)

failed because Mr. Garrett had consistently denied liability in

both the state court and bankruptcy court. The bankruptcy court

also ruled that issue preclusion did not apply.

The bankruptcy court issued its judgment in favor of

Mr. Garrett on February 2, 2016, and Ms. Ankoanda timely

appealed.

JURISDICTION

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

§§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C.

§ 158.

ISSUE

 Whether the bankruptcy court erred in determining that

Mr. Garrett’s obligation to Ms. Ankoanda was not excepted from

discharge under § 523(a)(2).

STANDARDS OF REVIEW

We review the bankruptcy court’s findings of fact after a

trial for clear error and conclusions of law de novo, and apply

de novo review to mixed questions of law and fact. Oney v.

Weinberg (In re Weinberg), 410 B.R. 19, 28 (9th Cir. BAP 2009),

aff’d, 407 F. App’x 176 (9th Cir. 2010) (citation omitted). 

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De novo review requires that we consider a matter anew, as if no

decision had been rendered previously. United States v.

Silverman, 861 F.2d 571, 576 (9th Cir. 1988).

We review the bankruptcy court’s findings of fact for clear

error. See Honkanen v. Hopper (In re Honkanen), 446 B.R. 373,

378 (9th Cir. BAP 2011); see also Anastas v. Am. Sav. Bank

(In re Anastas), 94 F.3d 1280, 1283 (9th Cir. 1996) (“A finding

of whether a requisite element of section [ ] 523(a)(2)(A) claim

is present is a factual determination reviewed for clear

error.”). “To be clearly erroneous, a decision must strike us as

more than just maybe or probably wrong; it must . . . strike us

as wrong with the force of a five-week-old, unrefrigerated dead

fish.” Papio Keno Club, Inc. v. City of Papillion (In re Papio

Keno Club, Inc.), 262 F.3d 725, 729 (8th Cir. 2001) (quoting

Parts & Elec. Motors, Inc. v. Sterling Elec., Inc., 866 F.2d 228,

233 (7th Cir. 1988)); see Anderson v. City of Bessemer City, 470

U.S. 564, 573 (1985) (A factual finding is clearly erroneous if,

after examining the evidence, the reviewing court “is left with

the definite and firm conviction that a mistake has been

committed.”). The bankruptcy court’s choice among multiple

plausible views of the evidence cannot be clear error. United

States v. Elliott, 322 F.3d 710, 714 (9th Cir. 2003).

DISCUSSION

A. Ms. Ankoanda failed to carry her burden of proof under

§ 523(a)(2).

Section 523(a)(2)(A) excepts from discharge any debt for

money, property, services, or credit obtained by false pretenses,

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false representations, or actual fraud.3 Ms. Ankoanda argues

that Mr. Garrett’s $200,000 debt is nondischargeable under

§ 523(a)(2)(A) because of his allegedly fraudulent statements. 

She does not articulate any reversible error. 

Ms. Ankoanda did not come close to meeting her burden of

proof at trial. At most, she proved that Mr. Garrett promised to

pay her $200,000 and to sign a promissory note and deed of trust

but did none of those things. As the bankruptcy court correctly

observed, she did not prove that Mr. Garrett made any

representations to her or that any representations made by the

“business associates” were attributable to him. We also note

that she offered no evidence at all, direct or circumstantial,

supporting any of the other elements of § 523(a)(2)(A). 

In sum, there was a complete failure of proof. The

bankruptcy court did not err. 

3 To establish fraud under § 523(a)(2)(A), the creditor must

prove each of the following elements by a preponderance of the

evidence:

(1) the debtor made . . . representations;

(2) that at the time he knew they were false;

(3) that he made them with the intention and purpose of

deceiving the creditor;

(4) that the creditor relied on such representations;

[and]

(5) that the creditor sustained the alleged loss and

damage as the proximate result of the

misrepresentations having been made.

Ghomeshi v. Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir.

2010) (citations omitted).

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B. Ms. Ankoanda cannot rely on judicial estoppel or issue

preclusion. 

Ms. Ankoanda argues that the settlement of the State Court

Action was sufficient to sustain her nondischargeability claim.

She is wrong.

The legal basis for Ms. Ankoanda’s argument was unclear at

best. In her trial brief, she invoked judicial estoppel; in her

oral argument at trial, she argued for issue preclusion;

elsewhere, she referred to “collateral judicial estoppel,” a

doctrine unknown to us.

We agree with the bankruptcy court that Ms. Ankoanda argued

for issue preclusion, rather than judicial estoppel. But she

could not prevail under either doctrine.

The doctrine of judicial estoppel is informed by several

factors: (1) whether a party’s later position is clearly

inconsistent with its earlier position; (2) whether the party has

succeeded in persuading a court to accept that party’s earlier

position, so that judicial acceptance of an inconsistent position

in a later proceeding would create the perception that either the

first or the second court was misled; and (3) whether the party

seeking to assert an inconsistent position would derive an unfair

advantage or impose an unfair detriment on the opposing party if

not estopped. Ah Quin v. Cty. of Kauai Dep’t of Transp.,

733 F.3d 267, 270 (9th Cir. 2013).4 Mr. Garrett never changed

4 Federal courts apply federal principles of judicial

estoppel, even when based on statements made in other tribunals. 

Rissetto v. Plumbers & Steamfitters Local 343, 94 F.3d 597, 603

(9th Cir. 1996).

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his position; he always denied liability to Ms. Ankoanda. His

agreement to pay her in the settlement agreement did not include

an admission of any facts.5 Further, he was not successful in

the State Court Action. He agreed to pay $200,000 to settle

claims arising out of a $100,000 loan, which is hardly a

favorable outcome for him, and the state court did not determine

that any of his assertions were true.

Similarly, issue preclusion did not apply. That doctrine

comes into play only when: (1) the issues to be precluded are

identical to the ones decided in the prior proceeding; (2) the

issues were actually litigated in the prior proceeding; (3) the

issues were necessarily decided; (4) the decision was final and

on the merits; and (5) the party to be precluded was identical to

or in privity with a party to the prior proceeding. See Lopez v.

Emergency Serv. Restoration, Inc. (In re Lopez), 367 B.R. 99, 104

(9th Cir. BAP 2007) (applying California law). Ms. Ankoanda

failed to offer evidence that the state court issued a judgment,

or that any issues were litigated or decided.

C. Ms. Ankoanda waived her claims of nondischargeability under

§§ 523(a)(4) and (6) at trial.

Ms. Ankoanda argues that her claims are not dischargeable

5 Ms. Ankoanda seems to think that, because the parties

agreed to settle, all of her allegations in her State Court

Action complaint are automatically admitted as true. She relies

on City of Lodi v. Randtron, 118 Cal. App. 4th 337, 350 n.18

(2004), and Rissetto, 94 F.3d at 605, but those cases are

distinguishable because the parties had expressly stipulated to a

fact in a prior case. The transcript of the State Court Action

hearing to memorialize the settlement does not reveal that

Mr. Garrett stipulated to or admitted anything.

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under §§ 523(a)(4) and (6). We reject this argument. 

Ms. Ankoanda waived these claims at trial. In response to

the court’s question, her counsel only identified § 523(a)(2) as

the basis for her nondischargeability claim. Thus, she waived

subsections (a)(4) and (6). See O’Rourke v. Seaboard Sur. Co.

(In re E.R. Fegert, Inc.), 887 F.2d 955, 957 (9th Cir. 1989)

(“appellate courts will not consider arguments that are not

‘properly raise[d]’ in the trial courts”).

Even if she had not waived those claims, she did not carry

her burden of proof under either subsection.

Section § 523(a)(4) excepts from discharge any debt “for

fraud or defalcation while acting in a fiduciary capacity,

embezzlement, or larceny[.]” The creditor must establish:

“(1) an express trust; (2) that the debt was caused by fraud or

defalcation; and (3) that the debtor was a fiduciary to the

creditor at the time the debt was created.” Nahman v. Jacks

(In re Jacks), 266 B.R. 728, 735 (9th Cir. BAP 2001) (citation

omitted). Additionally, the creditor must establish a culpable

state of mind. Bullock v. BankChampaign, N.A., 133 S. Ct. 1754,

1757 (2013) (holding that defalcation requires a “culpable state

of mind . . . involving knowledge of, or gross recklessness in

respect to, the improper nature of the relevant fiduciary

behavior”). Ms. Ankoanda did not offer any evidence that

Mr. Garrett acted in a “fiduciary capacity” (i.e., as trustee of

an express trust) or that he had the mental state required for

“fraud or defalcation.” 

Section 523(a)(6) excepts from discharge debts for “willful

and malicious injury” by the debtor to another. “Willful” means

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that the debtor entertained “a subjective motive to inflict the

injury or that the debtor believed that injury was substantially

certain to occur as a result of his conduct.” Petralia v.

Jercich (In re Jercich), 238 F.3d 1202, 1208 (9th Cir. 2001).

Maliciousness is defined as “(1) a wrongful act, (2) done

intentionally, (3) which necessarily causes injury, and (4) done

without just cause or excuse.” Id. at 1209. Ms Ankoanda offered

no direct or circumstantial evidence that Mr. Garrett intended to

injure her or that he knew that his actions were substantially

certain to injure her.

CONCLUSION

The bankruptcy court did not err. Accordingly, we AFFIRM.

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