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NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. EC-14-1200-FDJu

)

ROBERT NORIK KITAY and ) Bk. No. 13-20645

TRISTINA COFFIN KITAY, )

) Adv. Pro. 13-02126

Debtors. )

______________________________)

)

DANIEL E. GONZALEZ, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

ROBERT NORIK KITAY; )

TRISTINA COFFIN KITAY; LAW )

OFFICES OF ROBERT NORIK KITAY,)

)

Appellees. )

______________________________)

Argued and Submitted on November 19, 2015

at Sacramento, California

Filed – December 10, 2015

Appeal from the United States Bankruptcy Court

for the Eastern District of California

Honorable Thomas C. Holman, Bankruptcy Judge, Presiding

 

Appearances: Appellant Daniel E. Gonzalez argued pro se.

 

Before: FARIS, DUNN, and JURY, Bankruptcy Judges.

FILED

DEC 10 2015

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

* 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 Daniel E. Gonzalez appeals from the bankruptcy

court’s order granting in part and denying in part Appellees

Robert Norik Kitay’s and Tristina Coffin Kitay’s1 motion to set

aside default. We hold that the bankruptcy court did not err in

granting Mr. Gonzalez default judgment against Mr. Kitay in the

amount of $5,000 as a nondischargeable debt pursuant to 11 U.S.C.

§ 523(a)(4)2 and dismissing the remainder of Mr. Gonzalez’s

claims. Accordingly, we AFFIRM.

FACTUAL BACKGROUND

Beginning in January 2010, Mr. Gonzalez retained Mr. Kitay,

an attorney, to represent him and his daughter, Christina, in

numerous state court actions. Those cases involved an automobile

accident, alleged wrongful foreclosure, and a probate collection

matter. Mr. Gonzalez alleged that, during the course of his

representation, “Mr. Kitay committed professional negligence,

fraudulent concealments, and misrepresentations.” Mr. Kitay

responded in kind, claiming that Mr. Gonzalez engaged in “several

acts of fraud and dishonesty . . . , all of which led me to sever

all ties with Mr. Gonzalez as a client . . . . Over time, it

became clear that all his personal cases that he brought to me

presented multiple acts of fraud, dishonesty, and a complete lack

1 The Kitays did not file an answering brief or otherwise

make an appearance in this appeal.

2 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, Rules 1001-9037, and all “Civil Rule” references are

to the Federal Rules of Civil Procedure, Rules 1-86.

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of ethics or morality.”3 

On October 29, 2012, Mr. Gonzalez filed a complaint against

Mr. Kitay in the Superior Court of California, County of

Sacramento (“state-court action”). Mr. Gonzalez alleged that Mr.

Kitay breached the agreement to provide legal services by “acting

incompetent and failing or refusing to conduct proper and timely

discovery, prosecute, investigate, and research, and in

abandoning client.” He claimed that he 

suffered judgments for attorney fees in the amount of

$48,000, negligent or intentional emotional distress,

incurred over $12,000 in attorney fees and costs to

correct the negligence of [Mr. Kitay], and will incur

additional attorney fees in an amount not yet

ascertained, but in excess of $50,000 including appeals

and trial. [I]n addition, plaintiff claims damages in

the amount of $140,000 or more for restitution.

The aggregate amount claimed by Mr. Gonzalez was $250,000 plus

attorneys’ fees.

On January 17, 2013, Mr. and Mrs. Kitay filed their

chapter 7 petition in the United States Bankruptcy Court for the

Eastern District of California. The Kitays’ Schedule F

identified Mr. Gonzalez as a creditor with an unsecured,

nonpriority claim of $250,000 for the state-court action. 

Mr. Gonzalez initiated an adversary proceeding against

Mr. Kitay and the Law Offices of Robert N. Kitay, PC, on or

around April 15, 2013. Mr. Gonzalez objected to discharge under

§§ 727(a)(3) and 727(a)(4)(a) and sought a determination as to

3 Not all facts discussed herein are included in the

excerpts of record. We have exercised our discretion to review

the bankruptcy court’s docket. 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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dischargeability of the debt arising from the state-court action

under §§ 523(a)(2)(A), 523(a)(4), and 523(a)(6).

Mr. Kitay filed an answer to Mr. Gonzalez’s complaint, but

the bankruptcy court struck Mr. Kitay’s answer for his failure to

comply with the court’s order to meet and confer with

Mr. Gonzalez on issues including initial disclosures, settlement,

and a discovery plan. The court issued its Entry of Default and

Order re: Default Judgment Procedures, in which it directed

Mr. Gonzalez to apply for a default judgment.

Mr. Gonzalez filed his Motion for Entry of Default Judgment,

in which he requested that the bankruptcy court enter default

judgment against Mr. Kitay based on his failure to properly

represent him and his daughter in the various state-court

lawsuits. Mr. Gonzalez stated that he paid Mr. Kitay and his law

firm “over $2,500 in attorney’s fees” in a wrongful foreclosure

case and “over $2,500 for legal services” in two consolidated

cases regarding a probate collection matter. 

 The bankruptcy court granted in part and denied in part the

Motion for Entry of Default Judgement. It stated that

Mr. Gonzalez shall recover $5,000 plus costs from Mr. Kitay, the

total of which shall be nondischargeable pursuant to 11 U.S.C.

§ 523(a)(4). However, the court denied Mr. Gonzalez’s request

for entry of default judgment pursuant to 11 U.S.C.

§§ 523(a)(2)(A), (a)(6), 727(a)(3) and (a)(4). It dismissed

Mr. Gonzalez’s claims under Civil Rule 12(b)(6), stating that the

allegations in the complaint were insufficient.

The court gave Mr. Gonzalez leave to amend his complaint,

stating: 

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On or before November 19, 2013, the plaintiff shall

file and serve on both defendants consistent with the

requirements of Fed. R. Bankr. P. 7004 an amended

complaint. If the plaintiff does not file an amended

complaint by the foregoing deadline, the plaintiff’s

claims under 11 U.S.C. §§ 523(a)(2)(A), (a)(6),

727(a)(3) and (a)(4) will be dismissed without further

notice or hearing. Judgment will not be entered until

all of the plaintiff’s claims, including those that may

be asserted in an amended complaint, are resolved.

On November 19, 2013, Mr. Gonzalez filed his First Amended

Complaint. The bankruptcy court issued a Reissued Summons and

Notice of Status Conference in an Adversary Proceeding the

following day. 

On November 27, 2013, the bankruptcy court issued a minute

order, noting that Mr. Gonzalez had not yet filed proof of

service for the First Amended Complaint. The court instructed

Mr. Gonzalez to file a proof of service. In response,

Mr. Gonzalez filed a notice of compliance in which he stated that

he had mailed a copy of the First Amended Complaint to Mr. Kitay

on November 19. He attached to the notice a copy of the proof of

service affixed to the end of the First Amended Complaint and a

U.S. Postal Service receipt dated November 19. Mr. Gonzalez

filed a renewed Motion for Entry of Default Judgment on

December 3, 2013. 

Mr. Gonzalez said that, on December 28, 2013, the complaint

was returned to him as undeliverable, and he realized for the

first time that he had mailed the First Amended Complaint to the

wrong address. He claimed that he had mistakenly used the

address listed on the chapter 7 petition. On December 30,

Mr. Gonzalez effected personal service on the Kitays at

Mr. Kitay’s law firm.

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On January 3, 2014, Mr. Kitay (on behalf of himself and

Mrs. Kitay) filed a motion to set aside the entry of default and

to dismiss the complaint (“Motion to Set Aside”). In support of

the Motion to Set Aside, Mr. Kitay referred to Mr. Gonzalez as a

“con-man” and a liar. He raised issues of truthfulness and

veracity from Mr. Gonzalez’s past, including the suspension of

his dental and real estate licenses, allegedly for negligence and

fraud. Mr. Kitay claimed that, as working with Mr. Gonzalez on

the state cases became more unsavory, he “decided to completely

disassociate [himself] from Mr. Gonzalez.”4 Mr. Kitay also

disputed that he received $5,000 in retainer payments from

Mr. Gonzalez and stated that he only received $1,000 as an

initial retainer.

Mr. Kitay argued that the bankruptcy court should not have

struck his answer for failing to meet and confer with

Mr. Gonzalez. He stated that Mr. Gonzalez never contacted him to

meet and confer, and he was never served with any order to meet

and confer. Mr. Kitay argued that he tried to cooperate with

Mr. Gonzalez on discovery issues, but Mr. Gonzalez never

responded to his communications. Mr. Kitay also informed the

4 For example, Mr. Kitay stated that Mr. Gonzalez

“fraudulently filed documents, or pleadings, under counsel’s name

without counsel’s consent.” Mr. Gonzalez allegedly filed a

chapter 11 petition under Mr. Kitay’s name on behalf of a company

that Mr. Kitay did not represent. Mr. Gonzalez’s subsequent

attorney also sought to withdraw as Mr. Gonzalez’s counsel for

similar reasons. Mr. Kitay also claimed that Mr. Gonzalez “was

holding himself out to the public, and charging substantial money

(thousands in retainers), representing to his purported ‘clients’

that he would be able to get their loans re-financing, or

modified, and that if he was unable to accomplish that, he would

secure counsel on their behalf . . . .”

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court that he was not served with any pleadings after

September 30, 2013, and did not receive the First Amended

Complaint until December 30.

In its written disposition entered on January 14, 2014, the

bankruptcy court denied Mr. Gonzalez’s Motion for Entry of

Default Judgment, filed December 3, 2013, since the First Amended

Complaint added Mrs. Kitay as a defendant and added additional

claims. The court held that the Kitays were entitled to answer

the First Amended Complaint. Inexplicably, the Kitays never

filed an answer.

On January 28, 2014, Mr. Gonzalez filed his Amended Motion

for Entry of Default Judgment.

On April 8, 2014, the bankruptcy court issued its written

ruling regarding Mr. Kitay’s Motion to Set Aside. The court

denied Mr. Kitay’s request to vacate the court’s August 21, 2013

order striking his answer and entering default and the

November 4, 2013 order entering default judgment. However,

regarding the request to dismiss the adversary proceeding, the

court dismissed all claims without leave to amend, “with the

exception of the claim for relief under 11 U.S.C. § 523(a)(4) as

to Robert N. Kitay only . . . .”

First, regarding Mr. Kitay’s request to vacate the default

order and default judgment, the court stated that Mr. Kitay did

not satisfy the three-prong test set out in Franchise Holding II,

LLC v. Huntington Restaurants Group, Inc., 375 F.3d 922, 925-26

(9th Cir. 2004). The court held that Mr. Kitay did not meet his

burden regarding the first prong, i.e., whether default was

willful or whether culpable conduct of defendant led to default. 

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The court stated that, even though Mr. Kitay may not have

received any communication from Mr. Gonzalez regarding orders to

confer, the filing of his answer subjected him to the

jurisdiction of the court, and he was required to comply with all

court orders. The court also held that Mr. Kitay did not meet

the third prong, i.e., whether setting aside default would

prejudice the adverse party, since this factor was not addressed

in the Motion to Set Aside. However, the court held that

Mr. Kitay satisfied the second prong, i.e., whether a meritorious

defense has been presented.

Second, regarding Mr. Kitay’s request to dismiss the

adversary proceeding, the court agreed that Mr. Gonzalez’s

failure to timely serve the First Amended Complaint warranted

dismissal of the remaining claims. It also noted that the new

claims against Mrs. Kitay were time-barred and that the remaining

claims should be asserted in a proof of claim. Finally, the

court found that $5,000 was the proper amount of the

nondischargeable debt owed to Mr. Gonzalez.

Also on April 8, 2014, Mr. Gonzalez filed a proof of claim

for “$250,000 or more” in the underlying bankruptcy action. 

Mr. Gonzalez filed his notice of appeal on April 17, 2014. 

On April 18, 2014, the bankruptcy court entered its Judgment in

Mr. Gonzalez’s favor for $5,000 plus $293 in costs and held that

those amounts are nondischargeable under § 523(a)(4).5

5 On November 12, 2015, Mr. Gonzalez filed his Motion for

Judicial Notice, which requested that the Panel take notice of:

(1) a case in support of his “liberality of amendment” argument;

(2) Mr. Kitay’s discovery responses regarding his liability

(continued...)

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JURISDICTION

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

§§ 1334 and 157(b)(1) and (b)(2)(I) and (J). We have

jurisdiction under 28 U.S.C. § 158.

ISSUES

(1) Whether the bankruptcy court erred in awarding

Mr. Gonzalez $5,000 plus costs instead of $250,000.

(2) Whether the bankruptcy court erred in finding that

Mr. Kitay had asserted a meritorious defense, even though it

found that Mr. Kitay did not satisfy the other two prongs

required to set aside the default judgment.

(3) Whether the bankruptcy court erred in dismissing the

remaining claims against the Kitays for Mr. Gonzalez’s failure to

timely serve the amended complaint.

5(...continued)

insurance policy; (3) a case concerning whether the court had

constitutional authority to enter a final judgment; (4) a statecourt minute order purporting to establish the validity of his

dismissed claims; and (5) a disciplinary opinion demonstrating

that Mr. Kitay has been suspended for thirty days by the

California state bar. 

These documents are not appropriate for judicial notice. 

First, the Panel does not take judicial notice of the cases

presented by Mr. Gonzalez, which may be appropriate as case

citations or authority, rather than adjudicative facts. Second,

the remainder of the documents are irrelevant to the present

appeal. See Ly v. Che (In re Ly), 601 F. App’x 494, 496 n.1 (9th

Cir. 2015) (“We deny all of the pending requests for judicial

notice because all of them seek notice of matters irrelevant to

the decision of this appeal.”); Santa Monica Food Not Bombs v.

City of Santa Monica, 450 F.3d 1022, 1025 n.2 (9th Cir. 2006)

(declining to take judicial notice of documents not relevant to

resolution of the appeal). Therefore, Mr. Gonzalez’s Motion for

Judicial Notice is DENIED.

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STANDARD OF REVIEW

“In bankruptcy discharge appeals, the Panel reviews the

bankruptcy court’s findings of fact for clear error and

conclusions of law de novo, and applies de novo review to ‘mixed

questions’ of law and fact that require consideration of legal

concepts and the exercise of judgment about the values that

animate the legal principles.” 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) (citing Wolkowitz v. Beverly

(In re Beverly), 374 B.R. 221, 230 (9th Cir. BAP 2007), aff’d in

part & dismissed in part, 551 F.3d 1092 (9th Cir. 2008)).

We review the bankruptcy court’s ruling on a motion to set

aside a default judgment for abuse of discretion. Sallie Mae

Serv., LP v. Williams (In re Williams), 287 B.R. 787, 791 (9th

Cir. BAP 2002) (citing United States v. Real Prop., 135 F.3d

1312, 1314 (9th Cir. 1998)). A bankruptcy court abuses its

discretion if it applied the wrong legal standard or its findings

were illogical, implausible, or without support in the record. 

See TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832

(9th Cir. 2011).

We review for abuse of discretion the bankruptcy court’s

dismissal of a complaint for failure to comply with the rules or

court order. See Schmidt v. Herrmann, 614 F.2d 1221, 1224 (9th

Cir. 1980).

“We do not reverse for errors not affecting substantial

rights of the parties, and may affirm for any reason supported by

the record.” COM–1 Info, Inc. v. Wolkowitz (In re Maximus

Computers, Inc.), 278 B.R. 189, 194 (9th Cir. BAP 2002); see

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28 U.S.C. § 2111; Civil Rule 61, incorporated by Rule 9005.

DISCUSSION

While many of Mr. Gonzalez’s arguments are unclear,

Mr. Gonzalez is proceeding pro se in this appeal, so we will

construe the arguments in his brief liberally. See Kashani v.

Fulton (In re Kashani), 190 B.R. 875, 883 (9th Cir. BAP 1995).

A. The bankruptcy court did not err in awarding Mr. Gonzalez

$5,000, rather than $250,000.

Mr. Gonzalez first assigns error to the bankruptcy court’s

award of $5,000 plus costs as nondischargeable under § 523(a)(4). 

He argues that the bankruptcy court erred by failing to apply the

rule of “liberality in amendments.” He claims that his proof of

claim for “$250,000 or more,” filed on the same day the

bankruptcy court issued its order on the Motion to Set Aside

Default, as well as the $250,000 informally requested in the

adversary complaint, put the bankruptcy court on notice that he

sought recovery of $250,000 from Mr. Kitay. He argues that,

because a “[p]roof of claim is prima facie evidence of the

validity and amount of claim[,]” the bankruptcy court should have

awarded him the entire $250,000 he requested. He requests that

the Panel order the $250,000 “paid ‘on demand’ by the liability

policy carrier of attorney/debtor Kitay.”

Mr. Gonzalez does not understand that filing a proof of

claim in a bankruptcy case is different from, and not a

substitute for, filing a complaint and presenting evidence in an

adversary proceeding. A party who wishes to share in the

distribution from a bankruptcy estate generally must file a proof

of claim in the parent bankruptcy proceeding. See Rule 3001;

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§ 501. A party who wishes to object to the debtor’s discharge,

or seek a determination of the dischargeability of debt, must

file a complaint to commence an adversary proceeding. See

Rule 7001; Rule 7003. Filing a proof of claim in the underlying

bankruptcy case is separate from any adversary proceeding: “the

filing of a proof of claim does not . . . initiate an adversary

proceeding.” Lyon v. Gila River Indian Cmty., 626 F.3d 1059,

1070 (9th Cir. 2010) (citing Lundell v. Anchor Constr.

Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000)).

The distinction between a proof of claim and a complaint is

important in several respects, one of which has to do with the

burdens of production and proof. A proof of claim is

presumptively valid. Garner v. Shier (In re Garner), 246 B.R.

617, 620 (9th Cir. BAP 2000) (“There is an evidentiary

presumption that a correctly prepared proof of claim is valid as

to liability and amount.”). Anyone who contests the claim must

produce evidence sufficient to dispel the presumptive validity of

the claim. In an adversary proceeding, however, the plaintiff

has the burdens of production and proof. The plaintiff cannot

carry or shift that burden by the simple expedient of filing a

proof of claim. In other words, the mere filing of a proof of

claim does not establish the validity of the claim for the

purposes of an adversary proceeding.

Mr. Gonzalez points out that, in appropriate circumstances,

an adversary complaint can serve as an informal proof of claim. 

See Dicker v. Dye (In re Edelman), 237 B.R. 146, 154 (9th Cir.

BAP 1999). But the converse is not true. While an adversary

complaint can sometimes suffice as an informal proof of claim, a

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proof of claim cannot suffice as a complaint under Rules 7001 and

7003. The filing of the proof of claim in the underlying

bankruptcy proceeding does not affect the adversary proceeding or

require the court to determine that the entire amount of the

claim is nondischargeable. 

Moreover, the bankruptcy court’s August 21, 2013 Entry of

Default and Order re: Default Judgment Procedures specifically

required Mr. Gonzalez to apply for a default judgment and “prove

up” his request. The court then found that, based on

Mr. Gonzalez’s two alleged payments of $2,500 to Mr. Kitay,

$5,000 plus costs were nondischargeable under § 523(a)(4). 

Mr. Gonzalez did not submit evidence that would substantiate the

remainder of his claim for $250,000. In any event, Mr. Gonzalez

has not assigned any other error to the award. Accordingly, we

hold that the bankruptcy court did not err in awarding

Mr. Gonzalez $5,000 plus costs as nondischargeable debt. 

B. The bankruptcy court did not err in its application of Civil

Rule 55(c) and finding that Mr. Kitay stated a meritorious

defense. 

Second, Mr. Gonzalez argues that the court erred in its

application of Civil Rule 55 because it held that Mr. Kitay

satisfied the second prong of the test by stating a “meritorious

defense.”

Civil Rule 55(c), made applicable through Rule 7055,

provides that “[t]he court may set aside an entry of default for

good cause . . . .” The “good cause” inquiry considers three

factors: “(1) whether [the defendant] engaged in culpable conduct

that led to the default; (2) whether [the defendant] had a

meritorious defense; or (3) whether reopening the default

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judgment would prejudice [the plaintiff].” Franchise Holding II,

LLC v. Huntington Restaurants Grp., Inc., 375 F.3d 922, 926 (9th

Cir. 2004). “As these factors are disjunctive, the district

court was free to deny the motion ‘if any of the three factors

was true.’” Id. (quoting Am. Ass’n of Naturopathic Physicians v.

Hayhurst, 227 F.3d 1104, 1108 (9th Cir. 2000)). 

In the present case, the bankruptcy court found that

Mr. Kitay could not establish the first and third factors, but

that he had stated “a meritorious defense” under the second

factor. It stated that Mr. Kitay “has alleged sufficient facts

in the motion that, if true[,] would constitute a defense to the

plaintiff’s claims.” Nevertheless, because Mr. Kitay did not

satisfy all three factors, the court denied the Motion to Set

Aside.

Mr. Gonzalez argues that the court “overreached to the point

of denying [him] an appropriate award of damages according to the

amended proof of claim or the amount of damages detailed in the

[First Amended Complaint].” He claims that, in another case

concerning a motion to set aside, the bankruptcy court stopped

its analysis after finding that the movant did not meet the third

criterion. Citing In re Christiansen, Case No. 05-200050-B-7,

United States Bankruptcy Court for the Eastern District of

California, Mr. Gonzalez points to the court’s conclusion that,

“[b]ecause the court finds prejudice, it declines to reach the

other two possible reasons for denial enumerated in Franchise

Holding.”

Mr. Gonzalez misapprehends the court’s analysis. While it

is true that a movant’s failure to establish any one of the three

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factors is fatal to his position, nothing prevents a court from

articulating a complete analysis of all factors. Further, the

court’s decision to award Mr. Gonzalez $5,000 rather than

$250,000 had nothing to do with its analysis of the second

factor. The court awarded $5,000 months before it considered

Mr. Kitay’s Motion to Set Aside. The court did not “overreach”

when it determined that Mr. Kitay had alleged meritorious

defenses. 

Mr. Gonzalez also argues that the court “overreached” and

“made reversible error in finding that Kitay met the second

factor . . . .”6 Mr. Gonzalez goes on at length to argue

Mr. Kitay’s alleged professional negligence and fraud. However,

the bankruptcy court was not adjudicating the merits of

Mr. Gonzalez’s case or Mr. Kitay’s defenses. Mr. Kitay needed

only to offer “specific facts that would constitute a defense.” 

Franchise Holding II, LLC, 375 F.3d at 926 (citing Madsen v.

Bumb, 419 F.2d 4, 6 (9th Cir. 1969)). Although Mr. Gonzalez may

not have liked the fact that Mr. Kitay’s defenses involved

allegations of Mr. Gonzalez’s wrongdoing and misconduct, the

court found that these facts were sufficient to carry the

relatively light burden of stating a meritorious defense. As

such, the court did not err in its analysis of the Civil

6 Mr. Gonzalez seems to conflate the Motion to Set Aside

with the Motion to Strike the Adversary Proceeding. He states

that the court overreached when it held that Mr. Kitay met the

second factor of the three-part test “based on a mistaken and

inadvertent mailing error causing no consequence to Kitay.” The

late service of the First Amended Complaint is unrelated to

Mr. Kitay’s burden to offer meritorious defenses to the claims

raised by Mr. Gonzalez.

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Rule 55(c) test, and it did not adjudicate the merits of

Mr. Kitay’s defense. 

Mr. Gonzalez states that, because of the court’s ruling, he

will face prejudice by having to “re-litigate” the issues raised

by Mr. Kitay. Mr. Gonzalez will face no such burden. In fact,

because the bankruptcy court ruled that Mr. Kitay’s

nondischargeable liability is only $5,000, Mr. Gonzalez’s

additional claims will be barred (assuming Mr. Kitay receives a

discharge). 

In any event, Mr. Gonzalez lacks standing to appeal on this

basis, because he prevailed in the bankruptcy court: the court

declined to set aside the default. See Duckor Spradling &

Metzger v. Baum Tr. (In re P.R.T.C., Inc.), 177 F.3d 774, 777

(9th Cir. 1999) (“[C]ourts have created an additional prudential

standing requirement in bankruptcy cases: The appellant must be a

‘person aggrieved’ by the bankruptcy court’s order.” (citing

Brady v. Andrew (In re Commercial W. Fin. Corp.), 761 F.2d 1329,

1334 (9th Cir. 1985))); id. (“An appellant is aggrieved if

‘directly and adversely affected pecuniarily by an order of the

bankruptcy court’; in other words, the order must diminish the

appellant’s property, increase its burdens, or detrimentally

affect its rights.” (quoting Fondiller v. Robertson

(In re Fondiller), 707 F.2d 441, 442 (9th Cir. 1983))).

C. The court did not err in dismissing the remaining claims for

Mr. Gonzalez’s failure to timely serve an amended complaint.

Next, Mr. Gonzalez argues that the bankruptcy court erred in

dismissing his remaining claims for failing to comply with the

court’s deadline to serve the First Amended Complaint. We hold

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that the court did not abuse its discretion in dismissing the

untimely complaint.7 

A court may dismiss an untimely complaint pursuant to a

federal statute or rule, a local rule, or the court’s inherent

power. As the bankruptcy court did not identify the underlying

authority for its dismissal, we first consider whether the court

properly dismissed the remaining claims under the federal rules. 

Civil Rule 41(b), which is made applicable to adversary

proceedings pursuant to Rule 7041, states that, “[i]f the

plaintiff fails to prosecute or to comply with these rules or a

court order, a defendant may move to dismiss the action or any

claim against it.” Civil Rule 41(b) (emphases added). “[W]hen a

plaintiff fails to amend his complaint after the district judge

dismisses the complaint with leave to amend, the dismissal is

typically considered a dismissal for failing to comply with a

court order rather than for failing to prosecute the claim.” 

Yourish v. Cal. Amplifier, 191 F.3d 983, 986 (9th Cir. 1999). 

[I]n order for a court to dismiss a case as a sanction,

the district court must consider five factors: “(1) the

public’s interest in expeditious resolution of

litigation; (2) the court’s need to manage its docket;

(3) the risk of prejudice to the defendants; (4) the

public policy favoring disposition of cases on their

merits; and (5) the availability of less drastic

alternatives.” We “may affirm a dismissal where at

7 Mr. Gonzalez also argues that the court erred in

dismissing the remaining claims, because, inter alia, it found

that Mr. Kitay “acted in willful bad conduct,” it “disregarded

the availability of Kitay’s $1M liability policy,” and it did not

award $250,000 in the interest of justice. However, these

arguments are facially not relevant to dismissal of claims that

the debt is nondischargeable, and Mr. Gonzalez develops no

arguments that make them pertinent. Therefore, we are unable to

discern any error.

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least four factors support dismissal, . . . or where at

least three factors ‘strongly’ support dismissal.” 

“Although it is preferred, it is not required that the

district court make explicit findings in order to show

that it has considered these factors and we may review

the record independently to determine if the district

court has abused its discretion.”

Id. at 990 (internal citations omitted). “These factors are not

a series of conditions precedent before the judge can do

anything, but a way for a district judge to think about what to

do.” In re Phenylpropanolamine Prods. Liab. Litig., 460 F.3d

1217, 1226 (9th Cir. 2006) (internal quotation marks omitted).

In the present case, it is undisputed that Mr. Gonzalez did

not comply with the court’s order to timely serve the Kitays. 

The bankruptcy court gave Mr. Gonzalez until November 19, 2013 to

file and serve his amended complaint and cautioned that, if

Mr. Gonzalez did “not file an amended complaint by the foregoing

deadline, the plaintiff’s claims under 11 U.S.C. §§ 523(a)(2)(A),

(a)(6), 727(a)(3) and (a)(4) will be dismissed without further

notice or hearing.”

Mr. Gonzalez filed his First Amended Complaint on

November 19. He sent a copy to the Kitays via U.S. mail, but

mailed it to the wrong address. He claims that he did not

realize the error until the complaint was returned undelivered. 

Mr. Gonzalez eventually served the Kitays on December 30, over a

month past the court’s deadline. 

In dismissing the First Amended Complaint, the bankruptcy

court’s April 8, 2014 order did not explicitly address the five

factors articulated in Hernandez and Yourish. We thus review the

five factors to determine whether the bankruptcy court abused its

discretion in dismissing the First Amended Complaint. See

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Yourish, 191 F.3d at 989 (the appellate court has “not always

been troubled by a district court’s failure to explain the

reasons for dismissal”).

The first two factors weigh heavily in favor of dismissal. 

First, “the public’s interest in expeditious resolution of

litigation always favors dismissal.” Id. at 990. Moreover,

“[d]istrict judges are best situated to decide when delay in a

particular case interferes with docket management and the public

interest.” Id. (quoting Ash v. Cvetkov, 739 F.2d 493, 496 (9th

Cir. 1984)). Second, “to be able to manage its docket

effectively, the Court must be able to dismiss actions without

operative complaints which have stalled due to one party’s

unilateral inaction in meeting court-imposed deadlines.” Gleason

v. World Sav. Bank, FSB, Case No. 12–cv–03598–JST, 2013 WL

3927799, at *1 (N.D. Cal. July 26, 2013). Here, Mr. Gonzalez’s

failure to serve his First Amended Complaint for over a month

after the court-imposed deadline cuts against the public interest

and the court’s ability to manage its docket. The court made

clear that Mr. Gonzalez was to “file and serve” the amended

complaint by November 19, 2013. The record supports a factual

finding that Mr. Gonzalez’s delay interfered with the expeditious

resolution of the case. Thus, the first two factors strongly

favor dismissal. See Yourish, 191 F.3d at 991 (“[W]e accept [the

court’s] factual finding that Plaintiffs knew that they were

required to file the amended complaint within sixty days rather

than within sixty [days] of the issuance of a written order as

they claim. Because the district judge was in a superior

position to evaluate the effects of delay on her docket, . . . we

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find that this factor strongly favors dismissal.”).

The third factor, the risk of prejudice to the defendants,

“is related to the plaintiff’s reason for defaulting in failing

to timely amend.” Id. (citation omitted). A plaintiff’s “paltry

excuse for his default on the judge’s order” may “indicate[ ]

that there was sufficient prejudice to Defendants from the delay

. . . .” Id. at 992. In the present case, the bankruptcy court

made clear that Mr. Gonzalez’s excuse for his failure to serve

the Kitays was unacceptable. It noted that the Kitays had filed

a notice of change of address months before Mr. Gonzalez

instituted the adversary proceeding. It also pointed out that

Mr. Gonzalez had previously used the Kitays’ correct address for

earlier filings. In sum, the bankruptcy court found

Mr. Gonzalez’s excuses “unavailing.” We agree that Mr. Gonzalez

was not justified in untimely serving the Kitays with the First

Amended Complaint, and this factor weighs in favor of dismissal.8

See League of United Latin Am. Citizens Inc. v. Eureste,

No. 13-CV-04725-JSC, 2014 WL 5473560, at *4 (N.D. Cal. Oct. 28,

2014) (finding that the third factor slightly favors dismissal

where the court “does not find this explanation credible[,]”

where the plaintiff claimed he had miscalculated the number of

days that he had to file an amended complaint).

8 Mr. Gonzalez argues that the court should have accepted

the untimely filing under Rule 9006(b)(1), which allows for an

enlargement of time “where the failure to act was the result of

excusable neglect.” However, Rule 9006(b)(1) is invoked “on

motion made[,]” and Mr. Gonzalez did not file any motion for

enlargement of time. Moreover, the bankruptcy court did not err

in rejecting Mr. Gonzalez’s excuse for the late filing, so we do

not recognize any “excusable neglect.”

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The fourth factor, whether public policy favors disposition

of the case on the merits, “normally weighs strongly against

dismissal.” Gleason, 2013 WL 3927799, at *2. On the other hand,

“this factor lends little support to a party whose responsibility

it is to move a case toward disposition on the merits but whose

conduct impedes progress in that direction.” 

In re Phenylpropanolamine Prods. Liab. Litig., 460 F.3d at 1228. 

We cannot say that the tardiness in serving the First Amended

Complaint created such a great delay as to trump the presumption

in favor of resolution on the merits. As such, this factor

weighs against dismissal.

Finally, we consider whether the bankruptcy court should

have employed less drastic alternatives. On the one hand, the

Ninth Circuit has held that, in some circumstances, a chance to

amend the complaint and a “warning to a party that his failure to

obey the court’s order will result in dismissal can satisfy the

‘consideration of alternatives’ requirement.” Ferdik v.

Bonzelet, 963 F.2d 1258, 1262 (9th Cir. 1992) (citation omitted). 

On the other hand, the Ninth Circuit has also held that a warning

and “the district court’s granting Plaintiffs leave to amend was

not a lesser sanction because they had not yet disobeyed the

court’s order.” Yourish, 191 F.3d at 992; see Pagtalunan v.

Galaza, 291 F.3d 639, 643 (9th Cir. 2002) (“we are constrained by

the holding in Yourish to find that the availability of less

drastic alternatives was not considered by the district court”). 

The record does not disclose whether the bankruptcy court

considered less drastic alternatives to dismissal. Although the

bankruptcy court gave Mr. Gonzalez a chance to amend his

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deficient pleading and warned that it would dismiss the complaint

if not filed and served by November 19, the warning alone appears

to be insufficient to constitute a less drastic sanction. As

such, this factor weighs against dismissal.

In weighing the five factors, we are guided by the Ninth

Circuit’s decision in Yourish, which also involved dismissal

under Civil Rule 41(b) for failure to timely amend a complaint. 

In that case, the court granted the defendants’ motion to

dismiss, but, upon agreement of the parties, gave the plaintiffs

sixty days to file an amended complaint. When the plaintiffs

failed to do so, the defendants moved to dismiss the case. The

court granted the motion and dismissed the case with prejudice.

On appeal, the Ninth Circuit considered the five factors for

dismissal under Civil Rule 41(b). As in the present case, the

court found that the first three factors favored dismissal, while

the latter two factors weighed against dismissal. The court

concluded that, “[b]ecause we have found that three factors

strongly favor dismissal, we feel that the district court did not

abuse its discretion in dismissing Plaintiffs’ case for failing

to amend in a timely fashion. Although dismissal was harsh, we

do not have a ‘definite and firm conviction’ that the district

court ‘committed a clear error of judgment in the conclusion it

reached upon a weighing of the relevant factors.’” Yourish,

191 F.3d at 992 (quoting Ferdik, 963 F.2d at 1260).

Accordingly, because a permissible weighing of the five

factors favors dismissal, we hold that the bankruptcy court did

not abuse its discretion in dismissing the First Amended

Complaint for Mr. Gonzalez’s failure to comply with the court’s

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order.9 (We therefore need not consider the bankruptcy court’s

authority to dismiss the amended complaint under the local rules

or its inherent powers.) 

Furthermore, the court dismissed the claims against

Mrs. Kitay, who was newly added as a defendant to the First

Amended Complaint. The court held that, not only did

Mr. Gonzalez fail to timely serve Mrs. Kitay, but objections as

to Mrs. Kitay’s “discharge or nondischargeability as to a debt

. . . are time-barred; the filing of the FAC on November 19, 2013

. . . occurred long after the deadline of April 15, 2013, to file

a claim objecting [to Mrs. Kitay’s] discharge or the

nondischargeability of a debt as to [Mrs. Kitay] expired.” 

Mr. Gonzalez does not challenge the court’s dismissal of the

claims against Mrs. Kitay as time-barred. As such, the court did

not err in dismissing all claims against Mrs. Kitay.

D. The Panel declines to consider issues not raised before the

bankruptcy court or not properly on appeal.

Mr. Gonzalez offers materials and arguments not properly

before this Panel on appeal. We decline to consider them.

First, we will only consider documents that are properly a

part of the record below. Except in rare cases where “‘the

interests of justice demand it,’ an appellate court will not

consider evidence not presented to the trial court[.]” Graves v.

9 Presumably in connection with his discussion of prejudice,

Mr. Gonzalez argues at length about a law firm that represented

both Mr. Kitay and a defendant in one of the state-court cases,

Mr. Kitay’s allegations of Mr. Gonzalez’s questionable background

and character, and his difficulties collecting the $5,000 award

from Mr. Kitay. These arguments are not relevant to the present

appeal and are not addressed herein.

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Myrvang (In re Myrvang), 232 F.3d 1116, 1119 n.1 (9th Cir. 2000)

(citations omitted). Mr. Gonzalez attaches numerous documents to

his appendix (specifically, his Supplemental Excerpts) that were

not presented to the bankruptcy court. The vast majority of

these documents were filed in the state-court action after the

bankruptcy court’s April 8, 2014 order. Furthermore, these

documents have little bearing on the present appeal, since they

do not appear to concern the issues raised by the bankruptcy

court’s April 8, 2014 order. As such, the interests of justice

do not demand that we consider the documents and arguments not

raised before the bankruptcy court. 

Second, Mr. Gonzalez requests that the Panel not only award

him $250,000 per his proof of claim, but that we order

Mr. Kitay’s liability insurer to satisfy the judgment

immediately. Mr. Gonzalez’s request is outside of the scope of

this appeal. Most importantly, the insurer is not a party to

this appeal, so we cannot exercise jurisdiction over the insurer

to compel payment. Nor was the insurer a party before the

bankruptcy court, and the bankruptcy court never adjudicated the

obligations of Mr. Kitay’s insurer. Even if we were to find in

Mr. Gonzalez’s favor, we cannot afford Mr. Gonzalez the relief he

requests with regard to Mr. Kitay’s insurer. 

CONCLUSION

For the reasons set forth above, we conclude that the

bankruptcy court did not err in awarding Mr. Gonzalez $5,000 plus

costs under § 523(a)(4) and dismissing his other claims. 

Accordingly, we AFFIRM.

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