### NOT FOR PU BLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: MARK E. STUART , Debtor

. BAP No. AZ

- 20

- 1171

- TBK

Bk. No. 2:19

- bk

- 0548 1

- BKM

MEMORANDUM * MARK E. STUART , Appellant,

v. CITY OF SCOTTSDALE , Appelle e

. Appeal from the United States Bankruptc y Court for the District of Arizona Brenda K. Martin , Bankruptcy Judge, Presiding

Before: TAYLOR , BRAND , and KLEIN , ** Bankruptcy Judges.

* T his disposition i s not appropriate for pub lication. Although it may be c ite d for whatever per suasive value it m ay hav e, s ee Fe d. R. App. P

. 32.1, it has no precede ntial value, see 9th Cir. BAP R ule 80 24

- 1.

** T he Hon orable Christo p he r M

. Klein , U.S. B a n kru ptcy Judge for th e Eastern District of Cal ifornia , sittin g by desi gnatio n. 

# FILED

APR 12 2021

SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT2 I. INTRODUCTION Chapter 13 1 de btor Ma rk E. Stuart appeal s pro se from t he bankrup tcy court ’ s order overruling his objection to the Ci ty of Scottsdale ’ s
claim

. 2 He argues th at the judgm ent is unsecured and uncollectible and, thus, subject to d isallowance under § 502(b). We disagree ; this po tentially

u nc o llectible ju dgment is n o t an unenforce able claim within the meaning of

that statu te. He also ra ises a burden of proof argument, but the record reflects that the bankruptcy court correctly allocated the bur den of proof in the claim objection con text

. We thus AFFIRM

. II

. FACTS 3

S t uart , the City , and its officials have li tigation h istory

. Stuart unsuccessfully pursued two lawsuits in Maricopa County Superior C o urt again st the City

. A nd , a s the City had given Stuart favorable offers of

settlement that he refused , it obtained a judgm e nt in e ach of th ese lawsuits

f or costs and damages pursuant to Ariz. R. Civ. P. 6 8

. A 2015 j udgment

awarded the Ci ty $ 30,115.44 , plus interest at the rate of 4.25 pe r cent per annum until pai d in full ( “ Judgment I ” )

. Judg me nt I became f inal in 2018

.

1 Unless specified otherwise, al l ch apter and secti on referen ce s are t o the Ba nkruptcy C ode, 1 1 U.S.C . § § 101

- 1532 , an d all “R ule” refer en ces are t o the Fed e ral R ule s of Bankrupt cy P r ocedure

. 2 Whil e the claim objection proceedings solely in volved Stuar t a n d the City, S tu art named several Cit y off ic i a ls as appellees . W e grant a ppellees ’ re ques t for dismissal of the City o ffici a ls

. 3 We ex er c ise our d iscretio n to take j udici al not ice of documents ele ctronically filed in the bankru ptcy court, where approp ria t e

. See Atwood v. Chase M anhattan Mor tg. C o. ( In re Atwood) , 293 B.R. 2 27, 233 n.9 (9 th C ir. BAP 2003).3 A 2018 judgmen t awarded the City $ 49,845.30 , plus interest a t the r ate of

5 .25 percent per annum until paid in full ( “Jud gment II ” and c ollectively

with Judgment I the “ J ud gments ”)

. Stuart ’ s appeal of Judg ment II was pen d ing when he filed his chapter 13 bankru pt c y case

. In bankr uptcy s chedule E/F, he listed the City as holding a disputed judgment claim of unknown amount

. And he file d a chapter 13 plan w h ich did n ot prov ide for the Cit y ’ s claim

. In response, the City filed a proo f of cla im asserting a n $88,326. 69

c laim s ecured by a l ien on Stuart ’ s residence and objected to confirmation of the plan as failing to p rovide for i t s claim

. Stuart there after filed three amended chapter 1 3 plans ; all generated

a n objection by the City because none of them provide d for its c laim

. In additi o n, Stu art objected to the City ’ s claim , as relevant to this appeal, on thre e gro unds

. First, he argued that the City ’ s claim was contingent on the outc ome of his appe a l of Judg m e nt II

. This objection became moot during this appeal; the Ar i zona appell ate c ourt affirmed.

Se cond, he argued that t he clai m was not secured

. A n d t h i rd, he argued

that because the Judgments were against him indivi dual l y

— rather than jointly again st him and his non

- debto r spouse

— Arizona law pr ohibited the

C i ty from e n fo rci ng i ts clai m against hi s c ommunit y property

. To Stuart, this was a critical point. He alle ged that h is bankrupt cy es tate consisted solely of community property and requested t h at the claim be dis a llowed

or a mended to reflect that it is contingent, un s ecured , and unen forceable

.4 The City o pposed St uart ’ s claim object ion

. It disputed his

characterization of its claim as uncollectible a gainst community assets and subject to disallowance

. I n its view, w h at Stuart truly soug ht was not

disallow ance of its c l aim but a r uling preclud ing it fro m receiving plan

distributions

. Eventu ally, the ba nkrup tcy court su sta ined Stuart ’ s objection to the City ’ s secured status and otherwise overruled his objection to the Ci ty ’ s
claim

. A s to Stuart ’ s objection that the clai m w as unenfo rcea b le a gainst community prope r ty of the esta te , the bankruptcy court determined that

his argument impacted entitle ment to plan di s tributions and not
allow ab ility of the City ’ s c l aim

. Stu art timel y a ppea led

. I II. JURISDI CTIO N The bankruptcy c o urt h ad jurisdic tio n under 28 U.S.C. §§ 1334 and

1 57(b)( 2 )( B). W e have jurisdiction over the appeal under 28 U.S.C. § 158.

I V

. I SSUE

D i d the ban kruptcy court err i n o verruling Stuart ’ s claim objection ?

V. STAN DA RD OF REVIE W

“An order ove rrulin g a claim ob j ection can raise l egal i ssues (such a s the proper constr uc tion of statutes and rule s) wh ich we review de novo [.] ”

Vea l v. Am. Ho me Mo r tg. S er vicing
, Inc. (In re Ve a l), 450 B.R

. 897, 918 (9th Cir.

BAP 20 11). “De novo review is indepen dent , with no deferenc e given to the

tr ial court ’ s c onclusio n.” Allen v. U.S. Bank, N.A. (In re Allen) , 472 B.R. 5 59,5 564 (9th Cir. BAP 2012 ).

VI

. DIS CUSSI O N

Stua rt asserts that the ba n kruptcy court erred in overruling in part

his objection to the C i ty ’s cl ai m , arguin g that : (1) the claim should be

d i sallowed becau se the J udgments are un collectable from the bankruptcy

estate under Arizona law ; ( 2 ) the bankruptcy cou rt impermis sibly shifted

the burden of proof o n the appropriate source of payment for the claim

from the City t o him when it de ferred ruli n g on the issue u ntil p lan

confirmation ; and ( 3) the claim should be disallowed because it i s not

secur ed

. We addr ess h i s argu m e nts in t urn. 4

A

. The e nforceability of the City ’ s claim under Arizona la w
A duly ex ec uted proof of claim is prima facie e viden ce of the validity

and am ount of a cl aim. R u le 3001(f). Under § 502(a), the claim is “deem ed

allowe d ” in t h e absence of an object ion. Se e Heath v. Am. Express Travel

Related Serv s . Co. (In re Heath) , 331 B.R. 424, 435 (9th Ci r. B AP 2005)

. When

a n ob jection i s filed , t he burd en swi tches to the objecti ng party to presen t

e viden ce to overcome the prima facie cas e

. Cal. Sta te Bd. of Equ al izati o n v. Off. Unsecured Creditors’ Comm. (In re Fid. Ho lding C o., Ltd.) , 837 F.2d 696,

6 98 ( 5th Cir. 1988). How ever , the ulti m ate burden o f pers ua sion is on the

claimant. Wright v. Holm (In re Holm) , 931 F.2d 620, 623 (9th C i r . 1991).

An obj ection may be f iled on the basi s tha t the claim fa lls into one of

4 On appeal, S tuart does not ch all enge the b ankruptc y court ’ s denial of his objection to the C ity ’s claim as contingent on the outcome of his appeal of J udgment II.6 the excepti on s for allowance unde r § 502( b )

. In re Heath , 331 B.R. at 435

. In the bankr uptcy court and on appeal, Stuart p rese nted no evidence to disp u te the amount or validity of the City ’ s claim b eyond reference to

the now resolved Judgment II appeal

. Instead, he argue s the claim must be

di sallowe d under § 5 02(b)(1 ) becaus e : ( 1 ) Ar izona la w proh i bits the City

from collect ing on its Judgments fro m his com m unity property ; and (2) the

b a nk r upt cy estate ex clusively con sists of communit y property. The City

contests both alle gations

. But even a ssu ming the City is wrong , Stuart do e s

n o t dispute th at the Jud g ments are against him personally a nd would be

enforcea b le i n full ag ainst his separa t e p rop ert y. For this reason , his
§ 502(b)(1) objection fails. Section 502(b)(1) provid es that the bankruptc y c ourt “ shall allo w ” a
claim “ exce p t to the extent t hat such claim is unenforceable against the

d ebtor and property of t he debtor , under . . . ap p lic a bl e law for a r eason other than because such claim is contingent or unmat ured [.] ” § 502(b)(1) (e mphasis a dde d). A s is the case here, w hen the lan g uage of a st atute is plain, courts must enforce the statute according to its terms unless doing so would produ ce absurd r esu lts. Lamie v. U.S. Tr. , 540 U.S. 526, 534 (2004).

Under a plain reading of § 502(b )(1) , a b ank ruptcy court must al low a cl aim

u nles s i t is un enf orceable against both t h e de btor and the debtor ’ s pro p erty. Thus, § 502(b)(1) contemplates circums tances in whi ch a n a llo wable
“claim,” like an in rem claim based on a mortgag e t hat passes through a

c hapte r 7 p roceedin g, consist s of an obl iga t i on enforc eab le only against the7 debtor ’ s property

. Likewis e , a s r ele vant herein, a creditor who has a claim

that can be enfor ced agains t the deb tor , but arguably not against the

debtor ’ s existing property , may also have an allowab le c laim

— a lb eit a
cla im o f li mit ed uti lity in terms of entit lement to distributions from the

estate

. See , e.g., Merlino v. Wein s tein (In re Merlino) , 6 2 B.R. 836 (Bankr. W.D. Wash. 1986) (despite state community property laws providing that a cla im

b ased o n a separa te judgment aga i nst the debt or was enforceable only agai nst th e debtor ’ s separate property, the debtor ’ s present lack of s uch property did no t oper a te t o disall ow the claim under § 502(b)(1 ) )

. In fact, not infrequently in chapter 7 cases, the app ointed trustee will d eter m ine

that the re are insufficient estate funds from which distributions to creditors may be made. Similarly, in chapter 13 cases, some plans pay nothing to

unsecured cr editors. Yet, in such cases, filed claims a re not dis a llowed

u nder § 502(b)(1) on the bas i s that there is n o property from which their claims may be satisfied.

Stuart resists this analysis . H e urges us t o instead interpret

“ unenforceable against the debtor ” in § 502(b ) (1) to mean presently

uncoll ec table ag a i n st the d ebtor

. W e decline to do so

. The word “ uncoll ectable ” does not appear in the Merria m
- Webster

d efini tion for “ u n enforceable , ” which is define d as “ unable to be enforced

. ” Unenforceable , Merriam

- Webster Online Dictionary , https://ww w.merri am

webst er

. com/dict ionary/un enfo rceable (l ast v isited Apr. 12 , 2 0 21 )

. Neither

does it appear in the Black’s Law Dictionary definition for “unenforceable,”8 which is defined as “(Of a contract) valid but incapable of being enforced.” Unenforceable , Black’s L aw Diction a ry (11th ed. 2019). Merriam

- Web ster in

t urn define s “ enforce ” to mean “co n strain ” or “compel

. ” Enforce , Merriam

Webster Online Dictionary , https://www.merriam

webster.com/ d ictionary/ enforce (last vis ited Apr. 12 , 2 0 21 )

. Similarly,

Black ’ s La w D i ctionary de fine s “ enfo rce ” to mean “ to com pel o be dience

to. ” Enf orce , Black’s Law Dictionary (11th ed. 2019). While Stuart ’ s wife , her
separate propert y, and t he S tuarts ’ community property may not be

constr ained or com pelled to satis fy the Judgments, Stu art and hi s sepa r ate
propert y can be

. Durin g th e period of enforc eabilit y of an Arizona judgment under

Ar iz. Rev. St at. Ann. § 12

- 1551(A) (2019) (West) , 5 Stuart could be compelled

to sa tisf y the Judgments from his sep arate prop erty , a nd a temporary lack

of assets subject to collectio n is merely a p ract i cal impediment to the Judgment s ’ enforcement

. T he result is no different in a chapter 13 context.

I f the estate includes any of Stua rt ’ s separate property , such property is

available for the satisfa ction of t he Jud gments

. We note that adopting Stuart’ s in t er pretation of th e word s

“ unenforceabl e against the de btor ” as meaning present ly uncollectabl e
could lead to untenable r esults that further justify its rejection

.

5 “The party in whose favor a ju d gment is given, at any time within ten years after entry of the judgment and within ten years after a n y renewal of the judgment either by affidavit or by an action brought on it, may have a writ of execution or other process issued for its enforcement. ” A r iz. Rev. Stat. Ann . § 12

- 1551(A) (2019) (West)

.9 First, the exact charact er of es tate assets , particularly over the multiple years of a c hapt e r 13 case, is usu ally unclear at the time of a claim objection. T he schedules may be inaccurate, or the estate may obtain assets

in the future. Indeed, Stua rt concedes this point; his fou rth amended chap te r 1 3 plan provides that any separate proper ty he o b tains during the

life of the plan will be available for satisfaction of the City’s debt. Given the

uncer tainty regarding the character of any chapter 13 estate ’ s current and , in p articular, future assets, it woul d be inappro priate to disallow claims

b ased on a temporary la ck of a source of payment.
And second, i f the bankruptcy cour t entered an order disallowing the

C ity ’s claim s olely on the ba sis that ther e wer e pr esently no estate assets against which the Judgments may be enforced and later closed the c a se without granting Stuart a discharge, the order might confuse or complicate the City ’ s enforcement of the J udgments outsi de of bankruptcy

. Accordin g ly, we conclude that the e state ’ s alleged lack of assets available to pay the Judg ments does not require dis a l lowance of the City’ s
claim

. B

. Th e b ank ruptcy court ’ s allocation of the bu rden of proof

Stuart next a r gue s t hat the bankruptcy court applied an impro per
burden o f proof

. W e disagree. Th e bankruptc y court correctl y identifi ed and applie d th e burden of pro o f for claim object i on p roceedings and then

determined that the Ci ty met its burd en of pro of to show that i t h ad a n
allo wa ble c laim despite Stuart ’ s ob ject ions.10 Stuart argue s the bankruptcy co ur t i mplicitl y reallo cate d the b u rden of proof fr om the Cit y to h i m o n the issue of the proper sou rce of p ayment for the City ’ s claim b y deferring a ruli ng on the issue u n ti l plan

confirmation

. But t here was no real loca tion of the burden of proof. T h e bankrupt cy co urt only determi ned that S tuart ’ s argument that the C i t y ’ s
cla im was allegedly unpa yable fr om estate assets was irrelevant to claim

disallow ance and overruled hi s o b jection on that basis. 6

C

. The unsecured stat u s o f the City ’ s c laim

Stuart ’ s final argument is that the bankruptcy court erred i n

o v e r r uling h is c l aim ob j ection because t he C i t y ’ s claim is unsec ured

. I t is

no t clear why he app e als o n this basis

. T he ba n kr u ptcy court ruled in his

favor on this i ss u e , a nd the City did n ot file a cross

- appeal. I n any event , the bankruptcy court ’ s determination th at the clai m i s not secured by a l ien

on Stuart ’ s resi denc e does not necessit ate claim disal lowanc e

. Stuart

adva nce s no argument equatin g the failure of secu rity to the eliminatio n of liability.

D. The Cit y ’ s req u est for sanctions

The C ity ar gues that this appea l is f r iv olous and requ ests that the

Pa n el enter s anctions ag ains t Stuart under Fed. R. App. P. 38 for fil ing the

6 Stuart seems to be see king an advi so ry opinion f rom us regarding t h e appropriate b urden of proof on th e issue of the proper so urce o f p ayment for the City ’ s cla i m in fu tu re litigation

. But we are not in the business of givin g advisory opinions on issues that are not yet ripe and may ne ver ri pen into a c ont r oversy

. We l ac k jurisdiction to do so. United Stat e s v. Gila Valley Irriga tion D ist. , 31 F.3d 1428, 1436 (9t h Cir. 199 4)

.11 appeal. Sanctions for frivolous appea l s a r e awarded on ly up on a separately

fil ed motion or after notice fro m the Pan el and a reas on able oppor t u ni ty to respond. R u l e 8 020 (a) ; Tanzi v. Com eric a Bank

- Cal. (In re Tanzi) , 297 B.R. 607, 613 (9th Cir. BA P 20 0 3). We , therefore , d ecline to c onsider th e r e quest

. V II

. C O N CLU SION

F or the re asons set forth ab ove, we AFFIRM the b ankrup tc y court ’ s
ord er overr u l ing Stu a rt ’ s claim ob jection

.