N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
In re : STEPHEN FLANAGAN; C HARLOTTE FLANAGAN, De

btors,
R OB ER T KEETON, Appe lla

nt,
v. STEPHEN FLANAGAN, Appe lle e . No. 14-60019 B AP No. 13-1188 M EM O R ANDUM *

Appe a l from

the Ninth C irc uit B ankruptc y

Appe lla te Pane l Kirsc he r, Jury , a

nd Ta y lor, B an kruptc y

Judge s, Pre siding Subm itte d M arc h 17, 2016 ** San Fran c isc o , C a lifornia 

# FIL ED MAR 21 2016 M OLLY C. DW Y ER, CLERK U
. S
. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3. ** The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without ora l a

rgum e nt. Se e Fe d. R . App. P. 34(a )(2). 1B e fore : M c KEOW N, W ARD LAW , a

nd TALLM AN, C irc uit Judge s . Appe lla nt R obe rt Ke e t on a

p pe a ls a Ninth C i rc u it B ankruptc y Appe lla te Pane l’ s (“ B AP” ) a ffirm anc e of the ba nkruptc y c o urt’ s de c ision to de ny

Ke e ton’ s nondisc ha

rge a bility c la im s a ga inst Appe lle e Ste phe n Fla na g an for viola

ting the Ala ska Uniform Tra de Prote c tions Ac t (“ UTPA” ) and the Ala ska Se c uritie s Ac t, and for a warding pre

j udgm e n t inte re st a

t the fe de ra l rate . W e have jurisdic tion unde r 28 U.S.C . § 158(d), a nd we a ffirm
. 1. The ba nkruptc y c ourt did not err in c onc luding the re wa s no viola t ion of the A la ska

UTPA. To prove a

viola tion of theUTPA, Ke e ton m u st show “ (1) tha

t [Flana ga n] is e nga ge d in tra de or c o m m e rc e ; a nd (2) tha t in the c onduc t of tra de or c om m e rc e , a n unfa ir a c t or pra c tic e ha s oc c urre d.” ASRC Ene rgy Se rv

s . Pow e r & C ommc ’ns, LLC

v . Golde n V

alle y Ele c . Ass’n, Inc ., 267 P.3d 1151, 1158-59 (Ala ska 2011); se e A.S. § 45.50.471(a ). Partie s e nga ge in tra de or c o m m e rc e whe n one pa rty is a “ busine ss e ntity , re gula

te d unde r the De pa

rtm e nt of C o m

m e rc e ,” State v . O’N e ill Inv e stigations, Inc ., 609 P.2d 520, 534 (Ala ska 1980), a nd whe n the p artie s purc ha se “ goods a nd se rvic e s in busine ss-to-busine ss c om m e rc i a l transa c tions a s we ll a s in individua l c onsum e r transa c t ions.” Alask a Inte rstate C onst., LLC

v . Pac
. Div e rsifie d Inv ., Inc ., 279 P.3d 1156, 1169 (Ala ska 2012). B e c a use ne ithe r Ke e ton nor Fla na ga n is a “ busine ss,” and Ke e ton did not a tte m pt 2to purc ha se goods or se rvic e s from Fla na ga n, the y we re not e nga ge d in tra de or c om m e rc e . The re fore , Fla

na ga n did not viola

te the UTPA, a

n d the ba nkruptc y c ourt did not err in de c l i ning to a ward tre ble dam a ge s. Se e Borge n v . A & M Motors, Inc
. , 273 P.3d 575, 583 (Ala ska 2012) (“ The [UTPA] provide s for tre ble dam a ge s . . . to a

pre va iling plaintiff.” ). The B AP prope rly a ffirm e d the ba nkruptc y c ourt’ s de nia l of tre ble dam a g e s. 2. The ba nkruptc y c ourt wa s not e stoppe d from e nte ring judgm e nt in a

n am ount le ss tha

n $600,000. B a se d on the a ssum ption tha t Ke e ton c ould prove an UTPA viola

tion, theba

nkruptc y c ourt pre sum

ptive ly rule d tha t the am ount owe d to Ke e ton wa s $600,000. At the e nd of the proc e e dings, howe ve r, the ba n kruptc y c ourt found the re wa s no le g a l ba s is for tre ble dam a ge s a nd tha t Ke e ton wa s le ga lly
e ntitle d to only

$200,000. There sim

ply wa s no e stoppe l he re . Se e Hamilton v
. State Farm Fire & C

as. C o . , 270 F.3d 778, 782 (9th C ir. 2001) (“ J udic ia l e stoppe l is a n e quita ble doc trine tha

t pre c lude s a pa

rty from ga ining a n a dva nta ge by
a sse rting one position, a

nd the n la te r se e king a

n a dva n ta ge by ta king a c le a

rly inc o nsiste nt position.” ). The re fore , the B AP did not e rr in a ffirm ing the ba nkruptc y c ourt’ s a ward of a n am ount le ss tha

n $600,000. 3. B e c a use the a gre e m e nt be twe e n Ke e ton a nd Fla na g an is not a

n

“ inve stm e nt c ontra c t,” the ba nkruptc y c ourt did not err in de ny ing Ke e ton’ s c la im

3for nondisc ha rge a b ility unde r 11 U.S.C . § 523(a )(19) for viola ting the Ala ska Se c uritie s Ac t. An “ inve stm e nt c ontra c t” is a se c urity tha t re fe rs to “ [a ] c ontra c t, transa c tion or sc h e m e whe re by a pe rson [1] inve sts his m one y [2] in a c om m on e nte rprise and [3] is le d

to e xpe c t profit sole ly

from the e fforts of the prom ote r or a third pa rty .” Am. Gold &

Diamond C

orp. v . K irk p a tric k, 678 P.2d 1343, 1345-46 (Ala ska 1984) (quoting S.E.C

. v . W .J
. How e y C o ., 328 U.S. 293, 289-99 (1946)) (a dopting the

fe de ra l de finition of a

n inve stm e nt c ontra c t). The “ c om m on e nte rprise ” prong re quire s only tha t the inve stor’ s fina

nc ia l inte re sts be

“ ine xtric a bly inte rwove n” with those of the prom o te r or third pa rtie s. He ntzne r v . State , 613 P.2d 821, 824 (Ala ska 1980). The “ m ana ge ria l e fforts” prong re quire s that an inve stor be le d to e xpe c t profits from the e sse ntia l m ana g e ria l e fforts of the prom ote r. Am. Gold &

Diamond C

orp. , 678 P.2d a

t 1346. Ke e ton’ s loa

n wa s to be se gre gat e d from othe r funds a

nd Ke e ton wa s to re c e ive a gua

rante e d re turn re ga

rdle ss of Fla

na ga n’ s suc c e ss a s a

re a l e sta t e inve stor. Ke e ton’ s fina

nc ia l inte re sts we re not ine xtric a bly inte rwove n

with Flan a g an ’ s inte re sts. Additiona lly , Fla na ga n’ s e fforts to obta in ba

nk gua ran te e s or to c o m ple te the R e de ve lopm e nt Proje c t wa s not e sse ntia l to the suc c e ss of Ke e ton’ s inte re st-be aring loa n. The re fore , the B AP did not e rr in a ffirm ing the

4ba

nkruptc y c ourt’ s de nia l of the nondisc ha rge a bility c la i m ba se d on a lle ge d viola tions of theAla ska Se c uritie s Ac t. 4. The ba nkruptc y c ourt prope rly

aw arde d pre

judgm e nt inte re st a

t the fe de ra l rate ra the r tha

n the Ala ska

sta te la w ra te . If lia

bility arise s unde r sta

te la w, the c ourt m ay

award pre

judgm e nt inte re st unde r the sta te la wra te . In reN

ile s , 106 F.3d 1456, 1463 (9th C ir. 1997). The fe de ra l ra te , howe ve r, should gove rn

“ a c tions brought unde

r fe de ra l sta

tute , suc h a s ba nkruptc y proc e e dings, unle ss the
e quitie s of the c a se re quire a diffe re nt rate .” Bank

s v . Gill Distribution C

trs., Inc ., 263 F.3d 862, 871 (9th C ir. 2001). Ke e t on did not ple a d in his a dve rsary c om pla i nt tha t the § 523(a )(2)(A) c la im for nondisc h arge a

bility ba s e d on fa lse pre t e nse s a

rose unde r Ala ska la

w, a nd the ba nkruptc y c o urt did not find a

ny sta te la w viola tions. Theba

nkruptc y c ourt a pplie d fe de ra l la

win finding fa lse pre te nse s. The re fore , the de bt a

rose unde r fe de ra l la

w, a n d the B AP did not e rr in a ffirm ing the b ankruptc y c ourt’ s a

ward of pre

j udgm e nt inte re st a

t the fe de ra l rate . C osts on a

ppe a l a re awarde d to the Appe lle e . AFFIRM E D.

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