### NOT FOR PU BLICA TION

U NIT E D ST A T E S BA NK RU PT CYA PPE L L A T E PA N E L

OF T HE NINT H CIRCU IT In re: DEN N IS BA HA M,

Deb to r. DEN N IS BA HA M,

A p pellant, v. BA N K O F N EW Y O R K , A p pellee. BA P N o . N V-20-1081-TaBG Bk. N o . 2:19-b k-15039-A BL

M E M ORA ND U M *

A ppeal fro m the U nited States Bankruptcy C o urt

fo r the Distric t o f N evada A ugust B. Landis, Bankruptcy Judge, Presiding Befo r e: T A Y L O R, B RA N D , and G A N , Bankruptcy Judges.

INT ROD U CT I ON A fter years o f default, m ediatio n, and state c o urt litigatio n, Dennis Bahamfiled a chapter 13 1 b ankruptc y the day b efo re a scheduled 

# FIL ED
SEP 30 2020 SUSAN M . SPRAUL, CLERK U. S. BKCY

. APP. P ANEL O F T H E NI NT H CI RCUI T

* Thi s di sposi ti on i s not appr opr i ate for publi cati on. Although i t may be ci ted for whatev er per suasiv e v alue i t may hav e, see Fed. R. App. P. 32.1, i t has no pr ecedenti al v alue, see 9th Ci r . BAP Rule 8024-1.

1 Unless speci fi ed other wi se, all chapterand secti on r efer ences ar e to the Bankr uptcy Code, 11 U.S
. C. §§ 101–1532, and all “Rule” r efer ences ar e to the Feder al Rules of Bankr uptcy Pr ocedur e.fo rec lo sure o n his ho m e. O n the fo rec lo sing c redito r’s m o tio n, the

b ankruptc y c o urt dism issed the c ase under § 1307(c ) as a b ad faith filing and separately awarded the c redito r its fees and c o sts incurred as a result
o f the b ad faith filing as a sanc tio n. Baham appealed o nly the sanc tio ns o rder. W e A FFIRM
. FA CT S 2 In 2004, Baham

purchased his N evada ho m e (“Pro perty”) with a $616,020.00 lo an secured b y a purchase m o ney deed o f trust. The Bank o f N ew Y o rk Mello n fka The Bank o f N ew Y o rk, as Trustee fo rthe C ertific ateho lders o f C W A LT, Inc ., A lternative Lo an Trust 2005-35CB, Mo rtgage Pass-Thro ugh C ertific a tes, Series 2005-35C B (”BN Y ” ) eventually
ac quired the lo an and the b enefic ial interest in the deed o f trust, and Bayview Lo an Servic ing, LLC (“Bayview”) servic ed the lo an o n its b ehalf. Baham defaulted o n the lo an and filed a chapter 7 b a nkruptc y in 2007. During the c ase, the chapter 7 trustee ab ando ned the Pro perty, and Bahamrec eived a chapter 7 discharge. Thereafter, in 2011, Baham entered into a lo an m o dific atio n agreem ent restating the lo an’s princ ipal b alanc e as

2 We exer ci se our di scr eti on to take j udi ci al noti ce of documents electr oni cally fi led in the under lyi ng chapter 13 case. See Atwood v. Chase Manhattan Mortg. Co. (In re Atwood) , 293 B.R. 227, 233 n.9 (9th Ci r . BAP 2003). The r elev ant facts set for th her ei n ar e undi sputed, as they ar e taken fr om the factual findings in cor por ated i n the bankr uptcy cour t’s di smi ssal or der, whi ch wer e based on the ev i dence pr esented by BNY’s unopposed di smi ssal moti on and on the bankr uptcy cour t’s j udi ci al noti ce of documents fi led in state cour t. 2$720,797.08.

Fo r the next nine years, Bahamdid no t pay the lo an and shielded him self fro mfo rec lo sure b y utilizing m ediatio n o ptio ns and a litigatio n c am paign. First, he fo restalled fo rec lo sure fo r three years b y partic ipating in N evada’s fo rec lo sure m ediatio n pro gram . A t the end o f the fo urth
m ediatio n sessio n, the m ediato rissued a c ertific ate term inating the
m ediatio n pro c ess. Undeterred, Bahamso ught judic ial review o f the issuanc e o f the
c ertific ate with the N evada state c o urt (“Judic ial R eview C ase”). The state
c o u rt o verruled his objec tio n, and BN Yrec o rded the c ertific ate against the Pro perty. 3 W ith the c ertific ate issued, BNYno tic ed its fo rec lo sure sale. But Bahamdelayed the fo r ec lo sure b y filing two N evada state c o urt c ases: a pro po sed c lass-ac tio n c a se against Bayview (“C lass A c tio n C ase”) 4 and a
c ase against Bayview and BNY(“Injunc tio n C ase”). In b o th c a ses, Baham alleged that Bayview had c o nduc ted unlic ensed deb t c o llec tio n ac tivities in vio latio n o f the Fair Deb t C o llec tio n Prac tic es A c t and N ev. R ev. Stat. 649.370. Baham

so ught m o netary dam ages in the C lass A c tio n C ase and an

3 Baham’s appeal fr om thi s or der (“Appeal”) i s appar ently sti ll pending.
4 The Class Acti on Case was di smi ssed on the mer i ts two days after the bankr uptcy cour t enter ed i ts sancti ons or der on appeal. 3injunc tio n to prevent BN Y fro mfo rec lo s ing in the Injunc t io n C a se.

Baham enjo yed a fleeting vic to ry in the Injunc t io n C a se: the state
c o u rt issued a tem po rary restraining o rder. But it then denied his request fo r a prelim inary injunc tio n. He fo llo wed this defeat with a series o f
unsuc c essful m o tio ns in the Judic ial Review C ase and A ppeal requesting a halt o r stay to the fo r ec lo sure. On A ugust 6, 2019— the day b efo r e the fo rec lo sure— the state c o urt denied his last request. So , having failed to ob tain a stay o f the fo rec lo sure in the Injunc tio n C ase, the Judic ial R eview C ase, and the A p peal, Baham reso rted to the auto m aticstay. He filed a skeletal chapter 13 petitio n in the evening o f A ugust 6, 2019. A t the § 341(a) m eeting o f c redito rs, Baham adm itted he filed b ankruptc y o nly to sto p the fo rec lo s ure. Two weeks po stpetitio n, Bahamfiled his schedules, statem ent o f financ ial affairs (“SO FA ”), and chapter 13 plan. In his schedules, he listed the Pro perty as an asset with a value o f $770,000 and Bayview as a credito r with a no nc o ntingent, liquidated, and undisputed $944,000 claim sec ured b y a m o rtgage o n the Pro perty. His b ankruptc y do c um ents o therwise
c o ntained num ero us m aterial m isrepresentatio ns and c o nc ealm ents. In additio n to several representatio ns inc o nsistent with his listing o f BN Y ’s servic er as ho lding an undisputed secu red c laim, 5 he m o st egregio usly

5 Baham, for example, mi sr epr esented: (1) in schedule J that hi s contr actual (continued...) 4m isrepresented in his plan that the Pro perty was no t his princ ipal

residenc e— s u ch that BN Y ’s m o rtgage was sub jec t to m o d ific a tio n under § 1322(b )(2)— and failed to disc lo se his pending lawsuits in his schedules and SO FA
. Bayview filed a pro o f o f c laimin the am o unt o f $942,335.90, inclusive
o f $301,619.02 in prepetition arrearages, fo r BN Y . BN Ythen m o ved to dism iss the chapter 13 c ase with prejudic e as a b ad faith filing under § 1307(c ). Bahamdid no t file a written o ppo sitio n to the m o tio n, b ut his
c o u nsel appeared at the hearing. A tno po int during the hearing o r o therwise during the c hapter 13 c ase did Bahamo r his c o unsel c o ntest the validity o f BN Y ’s secured c laim
. A t the hearing, the b ankruptc y c o u rt determ ined that Baham had
m isrepresented and c o nc ealed fac ts in his filings, as detailed ab o ve, and that he so u ght to unfairly m anipulate the Bankruptcy C o de. The b ankruptc y c o urt fo und that the filings were “patently false and . . . serio usly m isleading.” S ee H r’g Tr. (Dec . 3, 2019) at 22:20. The b ankruptc y c o urt also fo und that Baham ’s so le intent in filing b ankruptc y was to sto p BN Y ’s fo rec lo s ure after eight years in whic h he

5 (...continued) monthly mor tgage payment to BNY was $0.00 when i n fact i t was $3,757.29; (2) in schedule J that hi s monthly net i n come was $2,230.08 when in fact i t was $-1,527.21; and (3) in hi s plan that he owed no pr e-peti ti on mor tgage ar r ear age to BNY when i n fact he owed $301,619.02. 5utilized essentially every no n-b a nkruptc y judic ial fo rum

availab le to himto hinder, delay, and avo id fo rec lo sure b y his m o rtgage lender. . . . He [filed b ankruptc y] to invo ke the auto m aticstay. He did it at a po int when he c anno t even c ure the $300,000-plus m o rtgage arrearage o n the pro perty, lac ks suffic ient inc o m e to keep his m o rtgage paym ents current go ing fo rward, and sim p ly c anno t pro po se a c o nfirm ab le plan as a result. Id. at 21:21-22:6. The b ankruptc y c o urt c o nc luded that “[w]hen all o f the fac ts o f this
c ase are c o nsidered in their to tality, they c learly estab lish . . . a textb o o k
exam ple o f the egregio us b ehavio r in the c o ntext o f b ad faith c alc ulus under Sec tio n 1307(c ) that warrants dism issal under that sec tio n.” Id. at 22:25-23:4. The b ankruptc y c o urt then entered its o rder granting BN Y ’s
m o tio n and dism issing the chapter 13 c ase. The o r der inc o rpo rated the b ankruptc y c o urt’s extensive b ad faith findings and c o nc lusio ns m ade during the hearing and b arred Bahamfro mfiling any petitio n fo r relief in the Distric t o f N evada fo r 180 days. Baham did no t appeal. BN Ythen m o ved fo r c o m pensato ry sanc tio ns against Bahamin the
am o u nt o f the atto rneys’ fees it inc urred in respo nding to Baham ’ s b ad faith b ankruptc y filing, o r $20,099. Baham o ppo sed. 6

6 BNY’s conti nued for eclosur e sale was r escheduled to take place whi le br i efing on the moti on was under way. But on the day befor e the scheduled for eclosur e, Baham fi led yet another complain t agai n st BNY i nstate cour t and a moti on for an inj uncti on to stop the for eclosur e. The inj uncti on was deni ed, but the lawsui t caused BNY to agai n (continued...) 6A t the sanc tio ns hearing, the b a nkruptc y c o urt reiterated its findings

o f Baham ’s b ad faith and c o nc luded that an award o f the requested
c o m p ensato ry sanc tio n was appro p riate under Ru le 9011 and its inherent autho r ity b ec ause: (1) Bahamfiled and pro sec uted the b ankruptc y fo r the im pro per purpo se o f hindering, delaying, and avo iding fo rec lo sure; and (2) Baham ’s intent in filing the c ase was frivo lo us, as he had nointentio n o f paying his deb ts with a c o nfirm ab le plan. It, thus, granted the sanc tio ns m o tio n and o rdered Bahamto pay BN Y$20,099 in fees and c o sts. Baham tim ely appealed. JU RISD ICT ION The b ankruptc y c o urt had jurisdic tio n under 28 U .S.C . §§ 1334 and 157(b )(2)(A ) and (O ). W e have jurisdic tio n under 28 U .S.C . § 158. ISSU E Did the b ankruptc y c o urt ab use its disc r etio n when it im po s ed
sanc tio ns against Baham ? ST A ND A RD OF RE V I E W W e review the b ankruptc y c o u rt’s im po sitio n o f sanc tio ns under Rule 9011 and under its inherent autho r ity fo ran ab use o f disc retio n. Price v. Lehtinen (In re Lehtinen), 564 F.3d 1052, 1061 (9th Cir. 2009), a broga ted
o n o ther gro unds by Gugliuzz av. F TC (In re Gugliuzz a ) , 852 F.3d 884, 898

6 (...continued) r eschedule i ts for eclosur e sale. 7(9th C ir. 2017); V a l l ey N a t’l Ba nk v. N eedler (In re Gra ntha m Bro s.) , 922 F.2d 1438, 1441 (9th C ir. 1991). The b ankruptc y c o urt ab uses its disc retio n if it applies an inc o rrec t legal standard, m isapplies the c o rrec t legal standard, o r m akes fac tual findings that are illo gic a l, im p lausib le, o rwitho u t suppo rt in the rec o r d. Tra

fficS cho o l.co m, Inc. v. Edriver Inc. , 653 F.3d 820, 832 (9th Cir. 2011) (c iting United S ta tes v. Hinkso n , 585 F.3d 1247, 1262 (9th Cir. 2009) (en b anc )). D ISCU SSION Baham argues that the b ankruptc y c o urt erred in: (1) o verlo o king the alleged fac t that BN Ydo es no t ho ld a secured c laim ; (2) determ ining that he filed his petitio n in b ad faith; and (3) awarding atto rneys’ fees as a
sanc tio n, which he asserts is punitive. W e rejec t his argum ents. A . BNY holds a v alid s ec ured c laim . A s an initial m atter, while Bahamc o ntends o n appeal that BN Ydo es no t ho ld a valid secured c laim, he c o nc edes that neither he no r his c o unsel raised the issue b efo re the b ankruptc y c o urt. W e generally will no t c o nsider argum ents that were no t pro perly raised in the b ankruptc y c o urt. M a no –Y &M , Ltd. v. F i eld (In re Mo rtg. S to re, Inc.) , 773 F.3d 990, 998 (9th Cir. 2014). And Bahamfails to persuasively suggest that any o f the narro w, disc retio nary exc eptio ns to this rule apply. 7While he b lam es his c o unsel fo r

7The excepti ons ar e si tuati ons wher e consi der ati on of a new ar gument i s (continued...) 8the failure, he is ac c o untab le fo r his atto rneys’ ac tio ns and inac t io ns. Eisen

v. Go l den (In re Eisen) , BA P N o . C C –06–1433–PaMkT, 2007 W L 7532273, at *3 n.8 (9th C ir. BA P O c t. 26, 2007). 8 Mo reo ver, his b ankruptc y schedules adm itted that BN Y ’s servic er held an undisputed $944,000 claimsecured b y a m o rtgage o n the Pro perty, and he never o bjec ted to BN Y ’s pro o f o f c laim, whic h c o nstituted prim a fac ie evidenc e o f the validity and am o unt o f its
c laim
. S e e Rule 3001(f). A lso, Bahampresented m any o f his challenges o nly in his reply b rief
o n appeal. W e do no t c o nsider an appellant’s argum ents unless they are spec ific ally and distinc tly argued in the o pening b rief. S ee Pa dgett v. W right , 587 F.3d 983, 986 n. 2 (9th Cir. 2009). A nd we further rejec t Baham ’s argum ents to the extent that they rely
o n do c u m entary evidenc e neither filed with no r c o nsidered b y the b ankruptc y c o urt. S ee Gra ves v. M yrva ng (In re M

yrva ng) , 232 F3d 1116, 1119 n.1 (9th C ir. 2000). Here, there are m ultiple reaso ns to treat Baham ’s attacks o n the BN Y
c laimas waived even witho ut c o nsidering waiver arising fro mhis lo ng

7 (...continued) appr opr i ate: (1) to pr ev ent a mi scar r i age of j usti ce or to pr eser ve the i ntegr i ty of the j udi ci a l pr ocess; (2) when a change i n law r ai ses a new i ssue dur ing the appeal; and (3) when the i ssue i s pur ely legal. Id.

8 To the extent Baham asser ts hi s bankr uptcy counsel di d not adequately r epr esent hi s inter ests, hi s di s pute i s wi th hi s counsel and not the bankr uptcy cour t. 9histo ry invo lving lo an m o dific atio n and lo an-related m ediatio n and

litigatio n. 9 B. T he bankruptcy c ourt had the inherent authority to s anc tion Baham . W e turn next to Baham ’s challenge o f the b a nkruptc y c o u rt’s im po sitio n o f sanc tio ns fo r his b a d faith filing. A b ankruptc y c o urt “has the inherent autho rity to im po se sanc tio ns fo r b ad faith[.]” F ink v. Go m ez, 239 F.3d 989, 992 (9th Cir. 2001); see a lso Knupfer v. Lindbla de (In re Dyer) , 322 F.3d 1178, 1196 (9th C ir. 2003). To im po se sanc tio ns under its inherent autho r ity, the b ankruptc y c o urt m ust find either b ad faith, c o nduc t tantam o unt to b ad faith, o r rec klessness with an “additional fac to r such as frivo lo u sness, harassm ent, o r an im pro per purpo se.” F ink , 239 F.3d at 994. Sanc tio n m ay inc lude o rdering a party to pay the o ppo sing party’s atto rneys’ fees. Go o dyea r Tire & R ubber Co . v. H

a eger , 137 S. C t . 1178, 1186 (2017); F ink

, 239 F.3d at 991. The award of fees, ho wever, m ust b e c o m p ensato ry rather than punitive in nature. Go o dyea r Tire & R ubber Co . ,

9 And in any ev ent, i f we wer e to r each the main thr u st of Baham’s ar gument i n hi s opening br i ef, we would find i t lacks mer i t. He asser ts that BNY does not hold a clai m because: (1) its pr edecessor -in-inter est fai led to fi le a clai m in hi s chapter7 case; and (2) hi s chapter 7 di schar ge v oi ded i ts li en inter est. But Rule 3002(a) pr ov i des that a holder of a secur ed clai m need not fi le a pr oof of clai m to pr eser v e i ts li en. And a secur ed cr edi tor ’s li en wi ll “r i de thr ough” bankr uptcy unaffected unless affir mati v e acti on i s taken to av oi d the li en. As Baham di d not av oi d thi s li en in hi s 2007 bankr uptcy chapter 7 case, hi s chapter 7 di schar ge di d not ter minate i t. Hi s di schar ge, thus, mer ely exti ngui s hed hi s in personam li abi li ty—whi le leav ing i ntact BNY’s in rem r i ghts under i ts mor tgage. Johnson v. Home State Bank , 501 U.S
. 78, 84 (1991). 10137 S. C t. at 1186.

Here, in determ ining that sanc tio ns were appro priate, the b ankruptc y c o u rt fo und that Baham“ac t ed in b ad faith in b o th initially filing and in pursuing this b ankruptc y c ase. The petitio n was filed fo r an im pro per purpo se. The schedules were patently false and m isleading and the plan had no legitim ate chanc e o f b eing c o nfirm ed when it was filed.” S ee Hr’g Tr. (Mar. 16, 2020) at 36:2-6. The b ankruptc y c o u rt’s findings are wellsuppo rted b y a lengthy rec o rd o f pro trac ted litigatio n, m isrepresentatio ns and c o nc ealm ent in filings, and a fac ially unc o nfirm ab le plan. W e disc ern no erro r. A nd, perhaps m o re im po rtantly, the b ankruptc y c o urt inc o rpo rated in its sanc tio ns o rder the sam e b ad faith findings it m ade in its dism issal
o rder, which Baham never appealed. C o nsequently, the law o f the c a se do c trine prevents him fro mno w challenging the b ad faith findings. The law o f the c ase do c trine “po sits that ‘when a c o urt dec ides [an issue], that dec isio n sho uld c o ntinue to go vern the sam e issues in sub sequent stages in the sam e c ase[.]’” United S ta tes v. Pa rk Pla ce Asso cs., Ltd. , 563 F.3d 907, 925 (9th C ir. 2009) ( quo ting Ariz o na v. Ca lifo rnia, 460 U .S. 605, 618 (1983)). It applies to fac tual determ inatio ns and legal c o nc lusio ns. S e e Pit R iver H o m e & Agric. Co o p. Ass’n v. U nited S ta tes , 30 F.3d 1088, 1096-97 (9th Cir. 1994). Bahamhad a full and fair o ppo rtunity to litigate the issue o f his b ad faith b ankruptc y filing b y o p po sing the dism issal m o tio n and appealing the
11dism issal o rder. But he cho se no t to do so . Thus, the b ankruptc y c o urt

pro perly relied o n its b ad faith findings in awarding sanc tio ns. W e also find no ab u s e o f disc retio n in the b ankruptc y c o urt’s cho ic e o f sanc tio ns. Bahamargues that the award o f BN Y ’s atto r neys’ fees as the
sanc tio n was im pro perly punitive, rather than c o m pensato ry, and that he has b een punished eno ugh b y the lo ss o f his ho m e to fo rec lo sure. But as the b ankruptc y c o urt po inted o ut, the fo rec lo sure sale o f his ho m e is no t a penalty. Instead, it is a legally pro vided rem edy availab le to BN Y . A nd the b ankruptc y c o urt spec ific ally fo und that BN Ywo uld no t have inc urred any
o f the atto rneys’ fees it was requesting as a sanctio n b ut fo r Baham ’s b ad faith filing. Thus, the sanc tio ns award was appro priately c a lib rated to
c o m p ensate BN Y fo rdam ages c aused b y Baham ’ s b ad faith filing and no t to punish Baham
. C. T he bankruptcy c ourt als o properly im p os e d Rule 9011(c ) s anc tions . W e additio nally disc ern no ab use o f disc retio n in the b a nkruptc y c o u rt’s award o f BN Y ’s fees under R ule 9011(c ). A s relevant here, Rule 9011(b ) requires parties and their atto rneys to c ertify that the papers filed with the b ankruptc y c o urt, such as a b ankruptc y petitio n, are “no t b eing presented fo rany im pro per purpo se, such as to harass o rto c ause unnec essary delay o r needless inc rease in the c o s t o f litigatio n.” Rule 9011(b )(1). If the b a nkruptc y c o urt determ ines that Rule 9011(b )(1) has b een vio lated, it m ay “im po s e an appro priate sanc tio n upo n the atto rneys,
12law firm s, or parties that hav e v iolated s ubdiv is ion (b) or are res pons ible

for the v iolation .” Ru le 9011(c ) (em p hasis added). Asanc t io n im po s ed fo r a Rule 9011 vio latio n m u st b e “lim ited to what is suffic ient to deter repetitio n o f such c o nduc t o r c o m parab le c o nduc t b y o thers sim ilarly situated.” R

ule 9011(c )(2). The sanc tio n m ay inc lude the paym ent o f the
m o vant’s reaso nab le atto r neys’ fees inc urred as a direc t result o f the vio latio n. Id. In determ ining whether sanc tio ns are warranted under R u le 9011(c ), the b ankruptc y c o urt “must c o nsider b o th frivo lo usness and im pro per purpo se o n a sliding sc a le, where the m o re c o m pelling the sho wing as to o ne elem ent, the less dec isive need b e the sho wing as to the o ther.” D ressler v. The S eeley Co . (In re S ilberkra us) , 336 F.3d 864, 870 (9th Cir. 2003) (quo tatio n m arks and c itatio n o m itted). In this c ase, the rec o rd stro ngly suppo rts the b ankruptc y c o urt’s
c o nc lusio ns that Bahamfiled b ankruptc y fo r the so le purpo se o f im pro perly delaying a fo rec lo sure sale and that the b ankruptc y filing was also frivo lo u s. Under these c irc um stanc es, it was pro p er fo r the b ankruptc y c o u rt to im po se m erely c o m pensato ry Rule 9011(c ) sanc tio ns against Baham
. S ee id. a t 871 (9th C ir. 2003); C inem a S ervs. Co rp. v. Edbee C o rp. , 774 F.2d 584, 586 (3rd Cir. 1985); D ubro wsk yv. Esta te o

f Perlbinder (In re D ubro wsk

y) , 244 B.R . 560, 579 (E.D.N
. Y . 2000).

13CONCL U SION

Based o n the fo rego ing, we A FFIRM.

14