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FILED

NOV 22 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NOT FOR PUBLICATION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. NV-16-1077-LDoKi

)

GO GLOBAL, INC., ) Bk. No. 2:10-bk-14804

)

Debtor. ) Adv. No. 2:14-ap-1173

 )

GO GLOBAL, INC., )

)

Appellant, )

)

v. ) M E M O R A N D U M*

)

SIG ROGICH, Trustee of the )

Rogich Family Irrevocable )

Trust; IMITATIONS, LLC; )

ELDORADO HILLS, LLC; TELD, )

LLC, )

)

Appellees. )

 )

Argued and Submitted on October 21, 2016

at Las Vegas, Nevada

Filed - November 22, 2016

Appeal from the United States Bankruptcy Court

for the District of Nevada

Honorable Gary A. Spraker, Bankruptcy Judge, Presiding

________________________

Appearances: Samuel A. Schwartz argued for Appellant Go Global,

Inc.; Samuel S. Lionel of Fennemore Craig, P.C.

argued for Appellees Sig Rogich and Imitations,

LLC; Andrew Mark Leavitt argued for Appellees

Eldorado Hills, LLC and TELD, LLC.

________________________

* This disposition is not appropriate for publication.

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8024-1.
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Before: LAFFERTY, DORE,** and KIRSCHER, Bankruptcy Judges.

I. INTRODUCTION

Prepetition, Appellant Go Global, Inc. (“Go Global”) and its

principal, Carlos Huerta, sold their membership interest in

Eldorado Hills, LLC (“Eldorado”) to Appellee Sig Rogich, Trustee

of the Rogich Family Irrevocable Trust (“Rogich Trust”) for

approximately $2.7 million. Under the purchase agreement, the

purchase price was to be paid solely from future distributions or

proceeds from Eldorado; no other source of payment was specified,

and payments were not due on any particular date. Postpetition,

Rogich Trust transferred its membership interest in Eldorado to

TELD, LLC (“TELD”) in what Go Global alleged was an attempt to

avoid Rogich Trust’s obligations under the purchase agreement.

Although Go Global listed its receivable from Rogich Trust

on Schedule B, none of the numerous disclosure statements filed

by Go Global mentioned any claim against Rogich Trust, nor did

the plan provide that it would be funded from any recovery on

that claim. Shortly after Go Global’s plan was confirmed,

Go Global transferred its rights under the purchase agreement to

Huerta, as Trustee of the Alexander Christopher Trust, which sued

Rogich Trust in state court to recover the amounts owed under the

purchase agreement (the “State Court Action”). The state court

granted Rogich Trust’s motion for partial summary judgment

dismissing the claims against Rogich Trust on grounds of judicial

estoppel because Go Global had not disclosed its claim against

** Hon. Timothy W. Dore, United States Bankruptcy Judge for

the Western District of Washington, sitting by designation.

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Rogich Trust in its disclosure statement. Huerta and the

Alexander Christopher Trust appealed, but the appeal was

dismissed as untimely.1

The Alexander Christopher Trust then transferred its rights

under the purchase agreement back to Go Global, which immediately

filed an adversary proceeding in the bankruptcy court against

Rogich Trust, Eldorado, TELD, and Imitations, LLC (“Imitations”),

seeking to recover funds owed under the purchase agreement. The

complaint sought to hold the additional parties liable under

theories of conspiracy and aiding and abetting Rogich Trust in

avoiding its obligations under the purchase agreement. On

defendants’ motions, the bankruptcy court dismissed the complaint

based on the claim preclusive effect of the state court judgment

and denied Go Global’s motion to amend its complaint.

After independent review of this matter, we hold that the

bankruptcy court lacked subject matter jurisdiction over the

adversary proceeding. Accordingly, we would affirm dismissal on

that ground alone. Alternatively, if the bankruptcy court had

jurisdiction, we hold that it did not err in ruling that claim

preclusion barred Go Global’s claims in the adversary proceeding,

and we affirm on that basis.

II. FACTUAL BACKGROUND

Carlos Huerta is the sole shareholder and president of

Go Global. Prior to the commencement of Go Global’s bankruptcy

1 On April 20, 2016, the state court plaintiffs moved for

reconsideration of the order granting partial summary judgment. 

That motion was denied on April 28, 2016. Plaintiffs appealed to

the Nevada Supreme Court on June 6, 2016.

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case, Huerta, Go Global, and Rogich Trust held ownership

interests in Appellee Eldorado. Eldorado’s primary asset is real

property in Clark County, Nevada. 

On October 30, 2008, Huerta, Go Global, and Rogich Trust

executed a purchase agreement assigning Huerta’s and Go Global’s

membership interest to Rogich Trust (the “Purchase Agreement”)

for $2,747,729.50. The Purchase Agreement did not require any

down payment; rather the entire amount of the purchase price was

financed, at no interest, and was to be paid “from future

distributions or proceeds (net of bank/debt owed payments and tax

liabilities from such proceeds, if any) distributed to Buyer at

the rate of 56.20% of such profits, as, when and if received by

Buyer from [Eldorado].” An assignment of the sellers’ interest

signed by Huerta, individually and on behalf of Go Global, was

attached to the Purchase Agreement.

On March 23, 2010, Go Global filed a chapter 112 bankruptcy

petition. On Schedule B of its schedules of assets and

liabilities, Go Global listed a receivable against Rogich Trust

of $2,747,729.50. Huerta and his wife, Christina Huerta, also

filed a joint chapter 11 petition; the two cases were jointly

administered.

A little over a year later, on April 4, 2011, Huerta and

Go Global filed their initial joint disclosure statement. The

disclosure statement did not identify or discuss any claims by

2 Unless otherwise indicated, all chapter and section

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

“Rule” references are to the Federal Rules of Bankruptcy

Procedure.

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Go Global against Rogich Trust. Huerta and Go Global filed two

subsequent amended disclosure statements, neither of which

identified or discussed any claims against Rogich Trust. The

Third Amended Joint Disclosure Statement filed April 8, 2013,

provided that all future causes of action would vest in Go Global

free and clear of all liens, claims, charges, or other

encumbrances.3 Section F(2)(b) of the Third Amended Joint

Disclosure Statement further provided:

[N]o preclusion doctrine, including, without

limitation, the doctrines of res judicata, collateral

estoppel, issue preclusion, claim preclusion, waiver,

estoppel (judicial, equitable or otherwise) or laches

shall apply to such claims or Causes of Action upon or

after the Confirmation or Consummation of the Plan

based on the Disclosure Statement, the Plan or the

Confirmation Order, except where such claims or Causes

of Action have been expressly released in the Plan or

any other Final Order (including, without limitation,

the Confirmation Order).

At some point in 2012, Huerta learned that Rogich Trust had

conveyed its interest in Eldorado to TELD. On November 7, 2012,

Brandon B. McDonald, counsel for Huerta and Go Global, mailed a

letter to Sig Rogich regarding the amounts due his clients under

the Purchase Agreement and outlining a theory that Rogich Trust

had either breached or evaded the terms of the Purchase Agreement

and frustrated the just expectations of the sellers:

Rather than distribute profits or otherwise repay the

Seller (Huerta and Go Global), we have reason to

believe that your interests have been inappropriately

transferred. This effectively negated any possible

3 The Third Amended Joint Disclosure Statement was not

included in Appellant’s Excerpts of Record. In its brief,

Appellant cites to the bankruptcy court docket, and we have

exercised our discretion to review that docket and pleadings, 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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recovery of the monies provided by the Seller through

profits or sale of the business/real property owned by

Eldorado Hills, LLC.

On July 22, 2013, the bankruptcy court entered an order

confirming Go Global’s Third Amended Joint Plan of

Reorganization. The confirmed plan provided for payment of

100 percent of the principal amount of allowed general unsecured

claims from recoveries from the consolidated debtors’

$5.5 million judgment against Paulson Group. The confirmed plan

also contained provisions consistent with and mirroring those

within the Third Amended Joint Disclosure Statement for the

maintenance and preservation of causes of action, including:

[A]fter the effective date, the Reorganized Debtors

shall retain all rights to commence, pursue, litigate

or settle, as appropriate, any and all Causes of

Action, . . . whether existing as of the Commencement

Date or thereafter arising, in any court or other

tribunal including, without limitation, in an adversary

proceeding Filed [sic] in the Chapter 11 Cases.

About a week after entry of the confirmation order, on

July 30, 2013, Go Global transferred all of its rights, title,

and interests under the Purchase Agreement to the Alexander

Christopher Trust pursuant to a one-page assignment of contract. 

The assignment expressly included all causes of action as allowed

under law arising from the Purchase Agreement.

The next day, Huerta, individually and as Trustee of the

Alexander Christopher Trust (as assignee of Go Global), along

with a third plaintiff, Nanyah Vegas, LLC,4 filed suit against

Rogich Trust and Eldorado in the District Court for Clark County,

4 According to the state court complaint, Nanyah Vegas LLC

invested $1.5 million in Eldorado but never received an interest

in Eldorado.

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Nevada, to recover monies owed under the Purchase Agreement. The

state court complaint asserted three causes of action on behalf

of Huerta and the Alexander Christopher Trust against Rogich

Trust: (1) breach of express contract; (2) breach of the covenant

of good faith and fair dealing; and (3) negligent

misrepresentation. The state court complaint also asserted a

fourth cause of action on behalf of Nanyah Vegas, LLC, against

Eldorado for unjust enrichment.

The first cause of action for breach of express contract

alleged:

That Defendant Rogich materially breached the terms of

the Agreement when he agreed to remit payment from any

profits paid from Eldorado, yet transferred his

interest in Eldorado for no consideration to TEDL, LLC

[sic]. This had the net effect of allowing Rogich to

keep Huerta’s $2,747,729.50 in capital, and not repay

that same amount which had converted to a non-interest

bearing debt.

The second cause of action for breach of the covenant of

good faith and fair dealing alleged:

That Defendant, Rogich has failed to maintain the

obligations which he agreed upon as memorialized herein

and in the Agreement as described herein and thereby

failed to act in good faith and has also failed to deal

fairly in regards to upholding his defined duties under

the Agreement.

The third cause of action for negligent misrepresentation

alleged:

Rogich represented at the time of the agreement that he

would remit payment to Huerta and Go Global as

required, yet knew or reasonably intended to transfer

the acquired interest to TELD, LLC; and furthermore

knew that the representations made by him in the

Agreement were in fact false with regard to tendering

repayment or reasonably preserving the acquired

interest so he could repay the debt in the future.

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Thereafter, Rogich Trust moved for partial summary judgment;

Huerta and the Alexander Christopher Trust cross-moved for

partial summary judgment. The state court, the Honorable Nancy

Allf, granted Rogich Trust’s motion and dismissed the three

claims asserted by Huerta and the Alexander Christopher Trust. 

In doing so, Judge Allf made the following findings orally on the

record:

A bankruptcy was filed on or about March 23 of

2010 by Go Global and on June 4 of 2010 it admits that

it has a receivable. I do find that the listing of the

receivable from Sig Rogich is sufficient to establish

they have told their creditors that they have this

receivable but it’s after that that the problem begins

to me. In the first disclosure statement filed on

April 4 of 2011 it talks about avoidance of transfer;

it mentions Paulson but never this transaction. When

it talks about payments to creditors it’s only from

sale of assets. This receivable is never identified;

litigation is never identified. There’s no recovery of

what might still at that point be a fraudulent

transfer. And in page 18 of the first disclosure

statement the liquidation analysis identifying assets

only lists real estate and no receivables.

Now after that while the disclosure statement is

pending the Plaintiff makes a demand for payment on

November 7 of 2012. So at that point this Plaintiff is

charged with the knowledge that it knows it has a

receivable but yet when it comes back on January 17 of

2013 with the first amended disclosure statement, it's

the same thing again: payment to creditor by sale of

assets, no identification of a receivable, no

identification of litigation. And the same--Exhibit C,

liquidation analysis lists only real estate and no

receivables. The second disclosure statement, March 8

of 2013, same thing; no liquidation analysis

identifying this so that creditors are never being told

that this may be an asset that may be collected. We

have the third amended disclosure statement on April 8

of 2013, again the disclosure statement, the

liquidation analysis, income expenses, real estate

only. It never lists the receivable or cause of

action.

And the reason that it matters is that in the

Chapter 11 process you have the listing of the assets

then you have a disclosure statement that tells

creditors how they will get paid and then the plan

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really just says how much they’ll get paid and when. 

It’s that disclosure statement that’s operative and

what the creditors use to vote whether or not to accept

the plan. They were never told that there was a

receivable to be collected. And the thing that really

concerns me the most is that when the plan is confirmed

on July 22 of 2013 with the affidavit of Mr. Huerta

saying that everything in the plan and disclosure

statement is true and accurate, eight days later

Go Global assigns the receivable and sues somewhere

else under a different name; it evidences no intention

that the creditors of Go Global would ever, ever have

benefitted from this transaction. This is a case

that’s very ripe for judicial estoppel and under the

applicable case law the motion is granted.

Judge Allf entered an Order Granting Partial Summary

Judgment (the “State Court Order”) on November 5, 2014, which

included the following three “legal determinations”:

1. On November 7, 2012, Huerta and Go Global were

aware that they had a claim against the Rogich

Trust.

2. The said claim was not disclosed in Huerta’s and

Go Global’s First Amended, Second Amended or Third

Amended Disclosure Statements.

3. The said claim was not disclosed in Huerta’s and

Go Global’s Plan or their first, second or third

Amendments to the Plan. 

Based on the foregoing, Judge Allf determined that Huerta and the

Alexander Christopher Trust were judicially estopped from

asserting their claims against Rogich Trust and dismissed those

claims. On February 23, 2015, Judge Allf entered a “Final

Judgment” awarding judgment to Rogich Trust and dismissing the

State Court Action with prejudice. Huerta and the Alexander

Christopher Trust appealed the State Court Order, but that appeal

was dismissed as untimely by the Nevada Supreme Court on June 26,

2015, and is not subject to further appellate review.5

5 Although it is not otherwise evident from documents

(continued...)

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On November 17, 2014, Huerta assigned all of the Alexander

Christopher Trust’s rights in the Purchase Agreement back to

Go Global. On November 26, 2014, three weeks after entry of the

State Court Order and approximately one week after Huerta

executed the November 17 assignment, Go Global filed an adversary

proceeding against Rogich Trust, TELD, Imitations, and Eldorado

seeking to recover the funds owed under the Purchase Agreement. 

The complaint asserts causes of action for civil conspiracy,

breach of fiduciary duty, breach of contract, breach of the

covenant of good faith and fair dealing, and fraud and/or

negligent misrepresentation against Rogich Trust; and conspiracy

and aiding and abetting in breach of fiduciary duty against TELD,

Imitations, and Eldorado.

Imitations and Rogich Trust each filed answers to the

complaint. Thereafter, Rogich Trust moved for summary judgment

on grounds that Go Global was not the real party in interest and

its claims were barred by claim preclusion; TELD and Eldorado

moved to dismiss on the same grounds (collectively, the

“Motions”). TELD and Eldorado also sought a determination that

Go Global was judicially estopped from asserting claims against

them. TELD and Eldorado also challenged the sufficiency of the

5(...continued)

comprising the record on appeal, the bankruptcy court noted in

its oral ruling on November 16, 2015, that the dismissal of

Nanyah Vegas LLC’s claim was appealed, as was the award of

attorney’s fees to Rogich Trust. Additionally, as noted above,

after this appeal was filed, Huerta and Go Global, as assignee of

the Alexander Christopher Trust, moved the state court for

reconsideration of the State Court Order. The state court denied

that motion on April 28, 2016, and plaintiffs appealed to the

Nevada Supreme Court on June 6, 2016.

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allegations for civil conspiracy, and TELD argued that it was a

bona fide purchaser of Rogich Trust’s interest in Eldorado and

was thus protected from Go Global’s claims asserted in the

adversary proceeding. Go Global opposed the Motions and also

moved to amend its complaint to add causes of action for

(1) actual fraudulent transfer against Rogich Trust; and

(2) offset of attorney’s fees awarded Rogich Trust in the State

Court Action (“Motion to Amend”). 

The bankruptcy court heard argument on the Motions and the

Motion to Amend on June 25, 2015 and issued an oral ruling on

November 16, 2015, reserving one issue for further briefing and

decision, as described below. Because the bankruptcy court

considered matters outside the pleadings in ruling on the

Motions, it deemed the motion to dismiss as a motion for summary

judgment and combined its ruling on the Motions. 

The bankruptcy court found that, with one exception, the

elements of claim preclusion under Nevada law were met.6 As

discussed below, those elements are: (1) a valid final judgment;

(2) the subsequent action is based on the same claims or any part

of them that were or could have been brought in the first case;

and (3) the parties or their privies are the same in the instant

lawsuit as they were in the previous lawsuit, or the defendant

can demonstrate that he or she should have been included as a

defendant in the earlier suit and the plaintiff fails to provide

6 The bankruptcy court addressed standing as a threshold

issue and found that there was a genuine issue of material fact

regarding Go Global’s standing to maintain its claims in the

adversary proceeding but that claim preclusion barred those

claims, regardless of the identity of the real party in interest.

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a good reason for not having done so. Weddell v. Sharp, 350 P.3d

80, 85 (Nev. 2015), rehr’g denied (July 23, 2015).

The bankruptcy court found that the State Court Order was a

valid final judgment, and that the claims in the adversary

proceeding were or could have been brought in the State Court

Action. The bankruptcy court also found that plaintiffs

Go Global and the Alexander Christopher Trust were in privity,

and that defendants Rogich Trust and Eldorado were defendants in

the State Court Action, thus satisfying the privity requirement. 

With respect to the additional defendants, TELD and Imitations,

the bankruptcy court observed that the parties had not addressed

whether those defendants were in privity with the state court

defendants. The bankruptcy court noted that in Weddell, the

Nevada Supreme Court broadened the concept of “privity” for claim

preclusion purposes, subject to an exclusion. See id. at 85

(“[T]he parties or their privies are the same in the instant

lawsuit as they were in the previous lawsuit, or the defendant

can demonstrate that he or she should have been included as a

defendant in the earlier suit and the plaintiff fails to provide

a ‘good reason’ for not having done so.”). Because the Nevada

Supreme Court’s decision in Weddell had been issued shortly

before oral argument in the bankruptcy court on the Motions, and

rehearing was denied on July 23, 2015, after oral argument had

taken place, the bankruptcy court permitted Go Global to brief

whether it had a good reason for not including TELD and

Imitations as defendants in the State Court Action.

The bankruptcy court denied the Motion to Amend as futile

because the fraudulent transfer claim would also be barred by

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claim preclusion, and the claim for offset could not be asserted

by Go Global because the mutuality requirement for offset could

not be met--the fees had been awarded against the Alexander

Christopher Trust and not Go Global.

Thereafter, the parties submitted supplemental briefing

regarding privity under Weddell as permitted by the bankruptcy

court. On March 10, 2016, the bankruptcy court issued its Order

on Pending Motions After Supplemental Briefing (“Order on Pending

Motions”) finding that Go Global had offered “nothing new by way

of explanation as to why it did not include the claims now

asserted as part of the State Court Action.” Accordingly, the

bankruptcy court adopted its oral ruling of November 16, 2015

granting the Motions and denying the Motion to Amend.

Go Global timely appealed.

III. JURISDICTION

The bankruptcy court determined, without any substantive

discussion, that it had jurisdiction over the adversary

proceeding under 28 U.S.C. § 1334 as a “related to” proceeding.7

Although no party has argued that the bankruptcy court lacked

jurisdiction over the adversary proceeding, we have an

independent duty to consider jurisdictional issues sua sponte. 

Alcove Inv., Inc. v. Conceicao (In re Conceicao), 331 B.R. 885,

890 (9th Cir. BAP 2005) (citing WMX Tech., Inc. v. Miller,

104 F.3d 1133, 1135 (9th Cir. 1997)).

7 The jurisdictional paragraph of Go Global’s adversary

complaint references §§ 547 and 548 and states that it is a core

proceeding under 28 U.S.C. § 157(b)(2)(I), which pertains to

dischargeability. However, all of the causes of action asserted

in the complaint are state law claims.

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A bankruptcy court has jurisdiction over all civil

proceedings arising under title 11, or arising in or related to

cases under title 11. 28 U.S.C. § 1334(b). A matter “arises

under” the Bankruptcy Code “if its existence depends on a

substantive provision of bankruptcy law, that is, if it involves

a cause of action created or determined by a statutory provision

of the Bankruptcy Code.” Battle Ground Plaza, LLC v. Ray

(In re Ray), 624 F.3d 1124, 1131 (9th Cir. 2010) (citations

omitted). A proceeding “arises in” a case under title 11 if it

is “an administrative matter unique to the bankruptcy process

that has no independent existence outside of bankruptcy and could

not be brought in another forum, but whose cause of action is not

expressly rooted in the Bankruptcy Code.” Id. (citation

omitted). 

The bankruptcy court also has jurisdiction over proceedings

that are “related to” a bankruptcy case. The Ninth Circuit has

adopted the “Pacor8 test” for determining the scope of “related

to” jurisdiction: whether the outcome of the proceeding could

conceivably have any effect on the estate being administered in

bankruptcy. Montana v. Goldin (In re Pegasus Gold Corp.),

394 F.3d 1189, 1193 (9th Cir. 2005). Put another way, an action

is “related to” bankruptcy if the outcome “could alter the

debtor’s rights, liabilities, options, or freedom of action

(either positively or negatively) and which in any way impacts

upon the handling and administration of the bankrupt estate.” 

Id. (citations omitted).

8 Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984).

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Notwithstanding the broad standard of Pacor concerning

“related to” jurisdiction in general, subsequent case law

indicates that postconfirmation jurisdiction is much narrower,

and the Ninth Circuit has expressly adopted this approach. In

In re Pegasus Gold, the Ninth Circuit Court of Appeals adopted

the “close nexus” test for postconfirmation jurisdiction as set

forth in Binder v. Price Waterhouse & Co., LLP (In re Resorts

Int’l, Inc.), 372 F.3d 154 (3d Cir. 2004). Under that test,

postconfirmation bankruptcy court jurisdiction is limited to

matters that affect the interpretation, implementation,

consummation, execution, or administration of the confirmed plan. 

Id. at 168-69. The close nexus test requires “particularized

consideration of the facts and posture of each case, as the test

contemplates a broad set of sufficient conditions and retains a

certain flexibility.” Wilshire Courtyard v. Cal. Franchise Tax

Bd. (In re Wilshire Courtyard), 729 F.3d 1279, 1289 (9th Cir.

2013).

Here, the adversary proceeding is not a matter that “arises

under” the Bankruptcy Code because it does not assert a cause of

action created or determined by a statutory provision of the

Bankruptcy Code, nor is it one that “arises in” a bankruptcy

case, because the causes of action asserted are not unique to the

bankruptcy process and could have been brought in another forum--

the claims in the original adversary complaint are all state law

causes of action. Thus, the only basis for jurisdiction would be

“related to” jurisdiction. However, there is no basis to

conclude that the standards for “related to” jurisdiction have

been met here.

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First, the action is not “related to” the bankruptcy case

under the traditional test: the resolution of the claims would

not increase or diminish the size of the bankruptcy estate (which

ceased to exist upon confirmation in any event) since the plan

did not purport to utilize the proceeds from the claim to pay

creditors, nor would it obligate Go Global to distribute any

recovery to creditors because the confirmed plan did not so

provide.

Second, and more importantly in this instance, the close

nexus test is not satisfied. The claims asserted in the

adversary proceeding did not require the bankruptcy court to

interpret, implement, consummate, execute, or administer the

plan. As noted, the claims were not disclosed in any version of

the plan or disclosure statement and were not relied upon as a

source of funding for the plan. To the extent the bankruptcy

court considered the plan at all, it only needed to inspect the

plan to determine what provisions it contained, or, more to the

point here, did not contain. Although the state court arguably

“interpreted” the plan to determine whether judicial estoppel

barred the state court claims, in fact that review was also

limited to observing the absence of any mention of the claim

against Rogich Trust. And the bankruptcy court did not need to

interpret the plan on these issues; indeed, it was prohibited

from doing so, as it was required to give the state court

judgment on this issue, from which no party appealed, full faith

and credit. Moreover, to the extent the plan could be construed

as reserving jurisdiction to the bankruptcy court to adjudicate

that claim, such a reservation would be, by itself, ineffective. 

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See In re Resorts Int’l, 372 F.3d at 161 (holding that subject

matter jurisdiction cannot be conferred by consent of the

parties).

Go Global moved to amend its complaint to add a claim for

fraudulent transfer, which is a core matter under 28 U.S.C.

§ 157(b)(2)(H) that “arises in” a bankruptcy case. However,

adding such a claim would not automatically confer

postconfirmation jurisdiction here because the plan did not

provide for any distribution to creditors from such a claim

(despite specifically providing for another avoidance claim).9

For these reasons, we conclude that the bankruptcy court

lacked subject matter jurisdiction over the adversary proceeding. 

Because we may affirm on any basis supported by the record,

Caviata Attached Homes, LLC v. U.S. Bank (In re Caviata Attached

Homes, LLC), 481 B.R. 34, 44 (9th Cir. BAP 2012), we would affirm

on that basis. However, if a reviewing court finds that the

bankruptcy court had jurisdiction, we would have jurisdiction

under 28 U.S.C. § 158 to decide these issues on appeal, and, as

discussed below, we find no error in the bankruptcy court’s

dismissal of the adversary proceeding or denial of Go Global’s

Motion to Amend.

IV. ISSUES

1. Did the bankruptcy court err in granting Appellees’

Motions on grounds that claim preclusion applied to bar

9 Almost immediately after this appeal was filed, on

March 30, 2016, the bankruptcy court entered an order closing the

main bankruptcy case, finding that “Debtors made all payments in

accordance with their Chapter 11 Plan and paid their creditors in

full[.]”

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Go Global’s claims in the adversary proceeding?

2. Did the bankruptcy court abuse its discretion in

denying Go Global’s Motion to Amend?

V. STANDARD OF REVIEW

We review the bankruptcy court’s grant of summary judgment

de novo. Boyajian v. New Falls Corp. (In re Boyajian), 564 F.3d

1088, 1090 (9th Cir. 2009); Lopez v. Emergency Serv. Restoration,

Inc. (In re Lopez), 367 B.R. 99, 103 (9th Cir. BAP 2007).

We review rulings regarding the availability of claim

preclusion de novo as a mixed question of law and fact in which

legal questions predominate. Robi v. Five Platters, Inc.,

838 F.2d 318, 321 (9th Cir. 1988); Alary Corp. v. Sims

(In re Associated Vintage Grp., Inc.), 283 B.R. 549, 554 (9th

Cir. BAP 2002).

We review the bankruptcy court’s denial of a motion to amend

a complaint for an abuse of discretion. See Gerber v. Hickman,

291 F.3d 617, 623 (9th Cir. 2002) (en banc). 

Under the abuse of discretion standard, we cannot reverse

unless we have a definite and firm conviction that the trial

court committed a clear error of judgment in the conclusion it

reached upon a weighing of the relevant factors. Solomon v. N.

Am. Life & Cas. Ins. Co., 151 F.3d 1132, 1138–39 (9th Cir. 1998).

VI. DISCUSSION

A. The bankruptcy court did not err in finding that claim

preclusion was available as a defense to the claims asserted

by Go Global in the adversary proceeding.

1. Standard for Application of Claim Preclusion

Under the full faith and credit statute, the preclusive

effect of a state court judgment in a subsequent federal lawsuit

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is determined by reference to the preclusion law of the state in

which judgment was rendered. Marrese v. Am. Acad. of Orthopaedic

Surgeons, 470 U.S. 373, 380 (1985); Far Out Productions, Inc. v.

Oskar, 247 F.3d 986, 993 (9th Cir. 2001). Because the judgment

at issue was rendered by a Nevada state court, Nevada preclusion

doctrines are applicable.

The Nevada Supreme Court has observed that “the purpose of

claim preclusion is to obtain finality by preventing a party from

filing another suit that is based on the same set of facts that

were present in the initial suit.” Weddell, 350 P.3d at 82.

Claim preclusion has a broader reach than issue preclusion:

[W]hile claim preclusion can apply to all claims that

were or could have been raised in the initial case,

issue preclusion only applies to issues that were

actually and necessarily litigated and on which there

was a final decision on the merits. . . . [C]laim

preclusion applies to preclude an entire second suit

that is based on the same set of facts and

circumstances as the first suit, while issue preclusion

. . . applies to prevent relitigation of only a

specific issue that was decided in a previous suit

between the parties, even if the second suit is based

on different causes of action and different

circumstances.

Five Star Capital Corp. v. Ruby, 194 P.3d 709, 713-14 (Nev. 2008)

(en banc), as modified by Weddell, 350 P.3d at 81-86.

In Nevada, a defendant asserting claim preclusion must

demonstrate that (1) the final judgment is valid; (2) the

subsequent action is based on the same claims or any part of them

that were or could have been brought in the first case; and

(3) the parties or their privies are the same in the instant

lawsuit as they were in the previous lawsuit, or the defendant

can demonstrate that he or she should have been included as a

defendant in the earlier suit, and the plaintiff fails to provide

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a good reason for not having done so. Weddell, 350 P.3d at 85.

Go Global argues that the bankruptcy court erred in finding

that claim preclusion applied to bar its claims in the adversary

proceeding. Go Global argues that the state court claims were

not litigated on the merits; that the state court complaint was

not dismissed with prejudice; and that the parties and claims are

not identical. Go Global also contends that nonmutual claim

preclusion does not apply because Go Global was not aware of

facts giving rise to claims against TELD and Eldorado until over

a year after the commencement of the State Court Action.

2. Application of the Standard to the Facts Presented

a. The State Court Order is final and valid.

Go Global contends that the State Court Order does not meet

the “final and valid” requirement because (1) the State Court

Order was not a final judgment for purposes of claim preclusion

because it was entered without prejudice; and (2) the claims in

the State Court Action were not actually litigated on the merits.

As noted, Judge Allf entered a Final Judgment in the State

Court Action on February 23, 2015 awarding judgment to Rogich

Trust and dismissing the State Court Action with prejudice. To

the extent the State Court Order could be construed as having

been entered without prejudice, the entry of the Final Judgment

“with prejudice” corrected any purported ambiguity.

As to the “final and valid” requirement, Go Global seems to

conflate the elements of issue preclusion and claim preclusion,

which are two different doctrines with different elements. See

Five Star Capital, 194 P.3d at 713 (setting out the elements for

the application of each doctrine). The requirement that an issue

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be “actually litigated” applies only to issue preclusion, not

claim preclusion. See id. At oral argument, Go Global’s counsel

clarified that its contention is that the claims were dismissed

on procedural rather than substantive grounds, which Go Global

contends disqualifies the State Court Order and Final Judgment

from having claim preclusive effect. The controlling case law

does not support Go Global’s position.

In Five Star Capital, the first lawsuit had been dismissed

under a local court rule for the plaintiff’s failure to attend a

pretrial calendar call. The Nevada Supreme Court rejected the

appellant’s argument that the dismissal was not on the merits,

holding that under Nevada Rule of Civil Procedure 41(b), a

dismissal operates as an adjudication on the merits unless the

dismissal is for lack of jurisdiction, improper venue, or failure

to join a party.10 194 P.3d at 715. Because the order in the

first suit had not been based on any of those grounds, the Nevada

Supreme Court rejected the appellant’s argument that the order at

issue was not a valid final judgment. Id. The court noted that

“[w]hile the requirement of a valid final judgment does not

necessarily require a determination on the merits, it does not

include a case that was dismissed without prejudice or for some

reason (jurisdiction, venue, failure to join a party) that is not

10 The rule provides, in relevant part:

Unless the court in its order for dismissal otherwise

specifies, a dismissal under this subdivision and any

dismissal not provided for in this rule, other than a

dismissal for lack of jurisdiction, for improper venue,

or for failure to join a party under Rule 19, operates

as an adjudication upon the merits.

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meant to have preclusive effect.” Id. at 713 n.27.

Despite the clear direction of this authority, Go Global

insists that a dismissal based on judicial estoppel does not

operate as an adjudication on the merits for purposes of claim

preclusion. The cases cited in support of this argument do not

support that conclusion. They loosely support the conclusion

that nondisclosure of causes of action in a bankruptcy is not

always grounds for a dismissal of those claims with prejudice,

but they do not address whether a dismissal based on judicial

estoppel may have claim preclusive effect in a subsequent

proceeding. See Ryan Operations G.P. v. Santiam-Midwest Lumber

Co., 81 F.3d 355 (3d Cir. 1996); The Glazier Grp., Inc. v.

Premium Supply Co., Inc., 2013 WL 1727155 (N.Y. Apr. 16, 2013);

and Bertrand v. Belhomme, 892 So. 2d 1150 (Fla. App. 3 Dist.

2005).11

11 In Ryan Operations, the Third Circuit Court of Appeals

held that the debtor’s failure to disclose claims against

non-creditors in a chapter 11 case did not bar a subsequent

lawsuit outside of bankruptcy; the Court of Appeals declined to

decide whether failure to disclose, standing alone, could support

a finding that a plaintiff had asserted inconsistent positions

because there was no evidence of bad faith by debtor’s principal.

In The Glazier Group, the New York Supreme Court held that a

debtor’s failure to disclose a claim against a non-creditor in

its chapter 11 disclosure statement did not bar a subsequent suit

outside of bankruptcy where the causes of action were unknown to

the debtor when it filed for bankruptcy relief. Finally, in

Bertrand, the Florida Court of Appeals reversed a trial court’s

dismissal with prejudice of a lawsuit for fraud on the court,

which was based on many factors, including the plaintiff’s

nondisclosure of a lottery prize in her prior bankruptcy case. 

The appellate court held that the state court had no authority to

sanction plaintiff for her conduct in the bankruptcy proceeding,

and that the plaintiff’s initial omission of the lottery prize

(continued...)

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These cases are not controlling. In the Ninth Circuit,

failure to disclose a cause of action in a plan or disclosure

statement may constitute grounds for the application of judicial

estoppel. See Hamilton v. State Farm Fire & Cas. Co., 270 F.3d

778, 783 (9th Cir. 2001) (citing Hay v. First Interstate Bank of

Kalispell, N.A., 978 F.2d 555, 557 (9th Cir. 1992)). In any

event, to the extent Go Global is arguing that judicial estoppel

should not have been applied, that is a collateral attack on the

State Court Order. Even if the bankruptcy court agreed with that

conclusion, it was required to give full faith and credit to the

State Court Order and Final Judgment, which found that the

Alexander Christopher Trust, as assignee of Go Global, was

judicially estopped from asserting its claims against Rogich

Trust.

 Go Global also cites Classic Auto Refinishing, Inc., v.

Marino (In re Marino), 181 F.3d 1142 (9th Cir. 1999), to support

its argument that a dismissal on procedural grounds does not

support the application of claim preclusion. In Marino, the

bankruptcy court dismissed “with prejudice as to its

reinstatement” an untimely nondischargeability complaint in the

debtor’s chapter 11 case. Thereafter, the case was converted to

chapter 7, and new deadlines were set for the filing of

objections to discharge. This time, the creditor filed a timely

nondischargeability complaint. The debtor moved for summary

judgment, arguing that the lawsuit was barred by “res judicata”

11(...continued)

was not central to the lawsuit.

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because of the prior dismissal with prejudice. The bankruptcy

court denied the motion, and the BAP reversed. 

The Ninth Circuit affirmed the bankruptcy court. It

observed that although a dismissal with prejudice based on a

statutory time limit may constitute a dismissal on the merits to

bar a subsequent suit, the bankruptcy court in the case before it

had not intended for the dismissal to operate as a bar to a

future timely filed nondischargeability complaint. Marino,

131 F.3d at 1145. In so doing, the Ninth Circuit stated: “we do

not subject res judicata law to a bouleversement. We only hold

that in the unique world of the bankruptcy rules the particular

facts of this case require a determination that [appellee] was

able to press its new complaint.” Id. at 1146. But here the

Final Judgment, which disposed of the claims with prejudice, was

clearly intended to be final, unlike the judgment at issue in

Marino. 

If anything, Marino supports the bankruptcy court’s finding

that the Final Judgment has preclusive effect. The Marino court

noted that a dismissal on statutes of limitations grounds (an

affirmative defense) presents a variation on the requirement that

a final judgment must be on the merits to bar subsequent

litigation of the same cause of action. Id. at 1144. The court

noted that such dismissals

are not on the merits in the sense that the underlying

substantive claim has been adjudicated. Rather, the

passage of time precludes testing whether the claim

would otherwise have been valid. Nevertheless, for res

judicata purposes a dismissal on statute of limitations

grounds can be treated as a dismissal on the merits.

Indeed, the Restatement has abandoned the “on the

merits” terminology because, as it explains,

“[i]ncreasingly . . . judgments not passing directly on

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the substance of the claim have come to operate as a

bar.”

Id. (citing Restatement (Second) of Judgments § 19 cmt. a (1982))

(additional citations omitted). Like the statute of limitations

defense, judicial estoppel is an affirmative defense that must be

pleaded and proved.12 If proven, an affirmative defense “will

defeat the plaintiff's claim even if all allegations in the

complaint are true.” Douglas Disposal, Inc. v. Wee Haul LLC,

170 P.3d 508, 513 (Nev. 2007). If a dismissal on grounds of

judicial estoppel is not on the merits for preclusion purposes,

no dismissal based on an affirmative defense would have

preclusive effect. Indeed, such a proposition would be contrary

to the cited authorities. 

In sum, the bankruptcy court did not err in concluding that

the State Court Order was final and valid. There is no

requirement for the application of claim preclusion that the

prior matter be actually litigated, and the dismissal was on the

merits for claim preclusion purposes. The Final Judgment was

with prejudice, and the bankruptcy court was required to give

that judgment (and the underlying orders) full faith and credit. 

Marino does not support the conclusion that the State Court Order

12 Other affirmative defenses include accord and

satisfaction, arbitration and award, assumption of risk,

contributory negligence, discharge in bankruptcy, duress,

estoppel, failure of consideration, fraud, illegality, injury by

fellow servant, laches, license, payment, release, res judicata,

statute of frauds, statute of limitations, and waiver. Nev. R.

Civ. P. 8. A dismissal on any of these grounds would not be “on

the merits” in the sense that if those defenses are successful,

the court would not be required to evaluate the merits of the

plaintiff’s claims.

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and Final Judgment were not entitled to claim preclusive effect.

b. The subsequent action is based on the same claims

or any part of them that were or could have been

brought in the first case.

The bankruptcy court found that this element was satisfied

because the claims asserted in the adversary proceeding were

based on the same facts and circumstances as the first suit. 

Go Global argues that the addition of a claim for civil

conspiracy negates this element.13 However, Go Global focuses

solely on the identity of the parties in support of this

argument, which, as we explain below, misapprehends the relevant

standard.

We find no error in the bankruptcy court’s conclusion that

the civil conspiracy claim could have been brought in the State

Court Action. The claims asserted in both lawsuits are based on

the same allegedly wrongful conduct by Rogich Trust. See Five

Star Capital, 194 P.3d at 715 (“Since the second suit was based

on the same facts and alleged wrongful conduct of Ruby as in the

first suit, the breach of contract claim could have been asserted

in the first suit. As a result, claim preclusion applies”).

c. Nonmutual claim preclusion applies because

Go Global did not provide a good reason for not

naming TELD or Imitations as defendants in the

State Court Action.

In Weddell, the Nevada Supreme Court adopted the doctrine of

nonmutual claim preclusion, which provides that claim preclusion

can apply to a defendant not in privity with the original

13 Go Global also states that its complaint included a

fraudulent transfer claim, but no such claim was asserted in the

original complaint.

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defendants if “the defendant can demonstrate that he or she

should have been included as a defendant in the earlier suit and

the plaintiff fails to provide a ‘good reason’ for not having

done so.” Weddell, 350 P.3d at 81. In the State Court Action, 

claims were asserted only against Rogich Trust.14 In the

adversary proceeding, Go Global asserted claims against Rogich

Trust, Eldorado, TELD, and Imitations. 

The bankruptcy court concluded that Eldorado, TELD, and

Imitations should have been named as defendants in the State

Court Action because Eldorado and TELD figured prominently in the

state court complaint, and Rogich Trust received an ownership

interest in Imitations in exchange for the transfer of Eldorado

to TELD. The bankruptcy court also determined that Go Global had

failed to provide a good reason for not naming the additional

defendants in the State Court Action. The bankruptcy court cited

Paragraph 23 of the state court complaint, which provides:

That Defendant Rogich materially breached the

terms of the Agreement when he agreed to remit payment

from any profits paid from Eldorado, yet transferred

his interest in Eldorado for no consideration to TEDL

[sic], LLC. This had the net effect of allowing Rogich

to keep Huerta’s $2,747,729.50 in capital, and not

repay that same amount which had converted to a

non-interest bearing debt.

The bankruptcy court correctly found that these allegations,

along with the allegation in Paragraph 13 of the complaint that

the transfer made it impossible for Huerta and Go Global to

receive their “rightful return of the debt,” formed the basis for

14 Although Eldorado was named as a defendant in the State

Court Action, the claim against it was asserted by Nanyah Vegas

LLC, not Go Global.

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either an actual or constructive fraudulent transfer from Rogich

Trust to TELD, and for the tort claims Go Global sought to

assert: 

TELD was the transferee, and Imitations was the

consideration Rogich received in exchange for

transferring his interest in Eldorado Hills to TELD. 

While the First Amended Complaint does not identify

Imitations, it sufficiently calls into question the

bona fides of the transaction such that all of the

participants to the transaction should have been named

as defendants when that transaction was originally

challenged.

Go Global argues that although it was aware of TELD’s and

Eldorado’s involvement in Rogich Trust’s transfer of its interest

in Eldorado, it was not aware of the extent of that involvement

or that TELD or Eldorado were part of a conspiracy to deprive

Go Global of the funds it was owed under the Purchase Agreement. 

However, we find no error in the bankruptcy court’s conclusion. 

The state court complaint reveals that Go Global knew of TELD’s

and Eldorado’s involvement in the transaction. The allegations

of the state court complaint also raise questions about the

propriety of the transfer, supporting the bankruptcy court’s

conclusion that all participants should have been named as

defendants in the State Court Action. 

All the elements of claim preclusion were met, and the

bankruptcy court did not err in finding that claim preclusion was

available as a defense to bar Go Global’s claims.

B. The bankruptcy court did not abuse its discretion in denying

Go Global’s motion to amend the complaint.

Go Global argues that the bankruptcy court abused its

discretion in denying as futile Go Global’s motion to amend the

complaint to add claims for fraudulent transfer and offset of

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attorney’s fees awarded to Rogich Trust in the State Court

Action. Go Global contends that it did not become aware of

TELD’s fraudulent transfer scheme until after the commencement of

the State Court Action, but this contention is belied by the

allegations of Paragraph 23 of the state court complaint quoted

above. As such, the bankruptcy court correctly found that the

claim would be barred by the doctrine of claim preclusion.

The bankruptcy court denied the motion to amend to add a

setoff claim because no mutuality of obligations existed. The

attorney’s fee award was against the state court plaintiff, the

Alexander Christopher Trust, while Go Global was the party

attempting to assert a setoff claim. Setoff is authorized under

§ 553, but a party asserting a setoff claim must establish that

each claim or debt arose prepetition and that the debts are

mutual. Newbury Corp. v. Fireman’s Fund Insurance Co., 95 F.3d

1392, 1398-99 (9th Cir. 1996). Mutuality requires that the

countervailing debts must be “in the same right and between the

same parties, standing in the same capacity.” Id. (citations

omitted). Although the Alexander Christopher Trust had assigned

its rights under the Purchase Agreement to Go Global, it could

not assign its liability for the attorney’s fee award or alter

Rogich Trust’s right to collect from the Alexander Christopher

Trust (nor was there any evidence that it attempted to do so). 

Because Go Global was not liable for the attorney’s fees, the

bankruptcy court correctly concluded that the debts at issue were

not mutual.15 Additionally, the claims did not both arise pre15 The bankruptcy court also noted that the offset claim

(continued...)

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petition; Go Global’s claims against the defendants did not arise

until 2012 when Rogich Trust transferred its interest to TELD.

On appeal, Go Global argues that its setoff claim is valid

under the equitable doctrine of recoupment.16 Go Global did not

raise this issue in the bankruptcy court. Thus, we do not

consider it. Absent exceptional circumstances, we generally will

not consider arguments raised for the first time on appeal. 

United Student Funds, Inc. v. Wylie (In re Wylie), 349 B.R. 204,

213 (9th Cir. BAP 2006) (citing El Paso v. Am. W. Airlines, Inc.

(In re Am. W. Airlines, Inc.), 217 F.3d 1161, 1165 (9th Cir.

2000)) (additional citations omitted). 

The bankruptcy court did not abuse its discretion in denying

the Motion to Amend.

VII. CONCLUSION

Because there was no “close nexus” between the adversary

proceeding and Go Global’s confirmed plan, the bankruptcy court

lacked subject matter jurisdiction over the adversary proceeding. 

Alternatively, if the bankruptcy court had jurisdiction, it

did not err in finding that claim preclusion was available to bar

Go Global’s claims against Appellees. Finally, for the reasons

explained above, the bankruptcy court did not abuse its

15(...continued)

asserted by Go Global was a collateral attack on the award

itself, which was entitled to be given full faith and credit and

could not be reviewed by the bankruptcy court.

16 Setoff allows adjustments of mutual debts arising out of

separate transactions between the parties. Recoupment, on the

other hand, involves a netting out of debt arising from a single

transaction. Oregon v. Harmon (In re Harmon), 188 B.R. 421, 425

(9th Cir. BAP 1995).

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discretion in denying Go Global’s Motion to Amend.

Accordingly, we AFFIRM.

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