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NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. EC-16-1193-TaBJu

)

VISHAAL VIRK, ) Bk. No. 14-25512-C-13C

)

Debtor. )

______________________________)

)

 VISHAAL VIRK, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

RONNY DHALIWAL; SUNITA )

DHALIWAL; DAVID CUSICK, )

Trustee, )

)

Appellees. )

______________________________)

Argued and Submitted on March 23, 2017

at Sacramento, California

Filed – April 24, 2017

Appeal from the United States Bankruptcy Court

for the Eastern District of California

Honorable David E. Russell, Bankruptcy Judge, Presiding

 

Appearances: Peter G. Macaluso argued for appellant; Sean

Gavin of Foos Gavin Law Firm, P.C. argued for

appellees Ronny Dhaliwal and Sunita Dhaliwal.

 

Before: TAYLOR, BRAND, and JURY, Bankruptcy Judges.

FILED

APR 24 2017

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

* 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(c)(2).
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INTRODUCTION

Appellees Ronny and Sunita Dhaliwal filed a proof of claim

for breach of a 2012 settlement agreement in Debtor Vishaal

Virk’s chapter 131 case. Debtor contends that the Dhaliwals

should be judicially estopped from raising the claim because

Ronny Dhaliwal failed to make appropriate disclosure in his 2007

Arizona bankruptcy case. The bankruptcy court first allowed the

proof of claim over objection but subject to a potential

redetermination of the claim’s amount in the Dhaliwals’

nondischargeability proceeding. It thereafter disagreed with

Debtor’s judicial estoppel theory twice: first, when it

determined the claim was dischargeable; and then, when it

declined to reconsider the initial claim objection order. 

Debtor appealed only the latter order. He fails, however, to

provide us with a transcript of the original hearing where the

bankruptcy court stated its findings of fact and conclusions of

law. We, thus, summarily AFFIRM. 

FACTS

Debtor’s bankruptcy petition and initial proceedings. In

Debtor’s 2014 chapter 13 case, the Dhaliwals filed a proof of

claim for $344,568.66, based on Debtor’s breach of a 2012

settlement agreement. The settlement arose from Sunita

Dhaliwal’s investment in Debtor’s gas station and Debtor’s

employment of Ronny Dhaliwal. Allegedly, Debtor did not make

1 Unless otherwise indicated, 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. All “Civil Rule” references are to the Federal Rules

of Civil Procedure.

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appropriate payment on his obligations as an employer and

otherwise defaulted in his obligations, and Sunita and Ronny

Dhaliwal separately sued him in state court. On the eve of

trial in 2012, the three parties entered into a global

settlement under which Debtor was to pay a sum certain over time

to the Dhaliwals. Debtor failed to make timely settlement

payments.

The Dhaliwals commenced a timely adversary proceeding

seeking to hold their claim nondischargeable.2 

Debtor took an offensive as well as defensive position in

relation to the Dhaliwals’ claim and nondischargeability action. 

As most relevant here, he objected to their proof of claim,

arguing, among other things, that they lacked standing to bring

the claim because Ronny Dhaliwal, in his 2007 bankruptcy case,

failed to schedule and disclose the money Sunita Dhaliwal

invested in Debtor’s gas station.

The bankruptcy court, Judge Klein presiding, resolved the

claim objection after hearing; it entered an order allowing the

claim as a $344,568.66 general unsecured claim, unless a

different amount was determined in the adversary proceeding, and

provided that $12,475 of the claim was entitled to unsecured

priority status. The order referred back to oral findings at

the hearing as it recited that: “Findings of Fact and

Conclusions of Law [were] stated orally on the record.” 

2 We exercise our discretion to take judicial notice of

documents electronically filed in the underlying bankruptcy case

and related adversary proceeding. See Atwood v. Chase Manhattan

Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP

2003).

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Judgment in the adversary proceeding. Meanwhile, the

adversary proceeding went to trial. The bankruptcy court, Judge

Russell presiding, ruled orally from the bench, determined that

the Dhaliwals’ claim was dischargeable, declined to otherwise

alter the amount of their claim, and subsequently entered a

judgment consistent with this oral ruling.

Debtor’s reconsideration motion. Less than two weeks after

entry of judgment in the adversary proceeding, Debtor filed a

motion to reconsider and vacate the claim objection order.3

After one continuance so that Debtor might “better identify the

judgments and orders for which the Debtor seeks relief,” the

bankruptcy court, Judge Sargis presiding, continued the matter

to a different department. The bankruptcy court, now Judge

Klein presiding, then continued the matter to yet another

department; the bankruptcy court, Judge Russell again presiding,

entertained extensive oral argument and ruled from the bench. 

The amended civil minute order stated: “Findings of fact and

conclusions of law having been stated orally on the record and

good cause appearing, IT IS ORDERED that the motion is denied.”

Debtor timely appealed.

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C.

§§ 1334 and 157(b)(2)(B). We have jurisdiction under 28 U.S.C.

§ 158.

3 The chapter 13 trustee opposed but played no further

role in the dispute.

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ISSUE

Whether the bankruptcy court abused its discretion in:

(1) denying Debtor’s motion to reconsider or vacate its order on

the claim objection; and (2) declining to apply judicial

estoppel.

STANDARDS OF REVIEW

We review for an abuse of discretion a bankruptcy court’s

decision on: (1) a reconsideration motion under § 502(j) and

Rule 3008, Heath v. Am. Express Travel Related Servs. Co.

(In re Heath), 331 B.R. 424, 429 (9th Cir. BAP 2005); (2) a

Civil Rule 59 reconsideration motion, Ybarra v. McDaniel,

656 F.3d 984, 998 (9th Cir. 2011); and (3) a Rule 60(b)

reconsideration motion, Lal v. California, 610 F.3d 518, 523

(9th Cir. 2010); Weiner v. Perry, Settles & Lawson, Inc.

(In re Weiner), 161 F.3d 1216, 1217 (9th Cir. 1998). We also

review for abuse of discretion the bankruptcy court’s decision

to apply judicial estoppel to the facts of a case. Hamilton v.

State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001).

A bankruptcy court abuses its discretion if it applies the

wrong legal standard, misapplies the correct legal standard, or

if it makes factual findings that are illogical, implausible, or

without support in inferences that may be drawn from the facts

in the record. See TrafficSchool.com, Inc. v. Edriver Inc.,

653 F.3d 820, 832 (9th Cir. 2011) (citing United States v.

Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc)).

DISCUSSION

The scope of the appeal. Debtor wants the Dhaliwals’ claim

disallowed on judicial estoppel grounds. His judicial estoppel

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theory was well ventilated before the bankruptcy court. In his

original claim objection, he asserted that the claim was

property of Ronny Dhaliwal’s chapter 7 bankruptcy estate. The

bankruptcy court, however, overruled Debtor’s objection and

allowed the claim; it left open only the possibility that the

amount of the claim could change as part of any decision in the

nondischargeabilty proceeding.

Beyond the bare articulation of the bankruptcy court’s

initial ruling, we know nothing about what happened when the

bankruptcy court first considered Debtor’s judicial estoppel

defense; Debtor did not provide us with a transcript from that

critical hearing.

During the adversary proceeding, while the claim objection

remained unresolved as to amount and subject to final

determination in some regard, Debtor again raised judicial

estoppel in his trial brief and re-asserted it at trial. The

bankruptcy court, however, declined to apply judicial estoppel

in connection with its determinations at the trial. We have the

transcript of the trial, but it sheds no light on the initial

determination by another judge of the bankruptcy court.

Finally, in his reconsideration motion and amended

reconsideration motion, Debtor again argued judicial estoppel;

the bankruptcy court, again, decided not to apply it. We have

the transcript of the reconsideration hearing, but it again

fails to explain the initial and most critical determination on

the issue.

Debtor’s notice of appeal identifies only one order: the

order denying his motion to reconsider the order overruling his

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claim objection.

An allowed or disallowed proof of claim “may be

reconsidered for cause.” 11 U.S.C. § 502(j); Fed. R. Bankr.

P. 3008. And a “reconsidered claim may be allowed or disallowed

according to the equities of the case.” 11 U.S.C. § 502(j). If

the time to appeal an order on a claim objection has not

expired, a reconsideration request is governed by Civil Rule 59,

applied in bankruptcy by Rule 9023. Wall Street Plaza, LLC v.

JSJF Corp. (In re JSJF Corp.), 344 B.R. 94, 103 (9th Cir. BAP

2006), aff’d, 277 F. App’x 718 (9th Cir. 2008). When “the time

for appeal has expired, a [§ 502(j)] motion to reconsider should

be treated as a motion for relief from judgment under Bankruptcy

Rule 9024.” S.G. Wilson Comp. v. Cleanmaster Indus., Inc.

(In re Cleanmaster Indus., Inc.), 106 B.R. 628, 630 (9th Cir.

BAP 1989). Rule 9024 applies Civil Rule 60 in bankruptcy

proceedings.

We summarily affirm because Debtor provided us with an

incomplete record on appeal. This case is a procedural tangle,

and Debtor’s excerpts of record are deficient and unhelpful. He

asks us to review the bankruptcy court’s decision on his motion

to reconsider the order on his objection to the Dhaliwals’ proof

of claim. He initially provided us, however, with only limited

documents: (1) the bankruptcy court’s minute order denying the

reconsideration motion; (2) the original proof of claim;

(3) Ronny Dhaliwal’s Arizona bankruptcy petition; (4) the trial

transcript from the adversary proceeding; and (5) the Dhaliwals’

reply to a set of interrogatories. After the Panel issued an

order directing him to provide the transcript from the

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reconsideration hearing, Debtor submitted it. He never

provided:

• his underlying motion to reconsider or any of the resulting

filings;

• his original objection to the Dhaliwals’ claim or any of

the accompanying filings; or

• the bankruptcy court’s original order on his claim

objection.

If this were all that was missing, we could fill in the blanks

by exercising our discretion to independently review the docket.

But Debtor also did not provide us with the transcript from

the hearing on his claim objection, and he now seeks

reconsideration of the order resolving that objection. The

order itself does not contain findings and, instead, refers to

oral findings at the hearing as it states: “Findings of Fact and

Conclusions of Law having been stated orally on the record.”

If a bankruptcy court makes its findings of facts and

conclusions of law on the record, the appellant must include the

transcript as part of the excerpts of record. McCarthy v.

Prince (In re McCarthy), 230 B.R. 414, 416–17 (9th Cir. BAP

1999). Here, Debtor did not. Nor can we find a copy of the

transcript on the bankruptcy court’s docket. We, thus, cannot

meaningfully review either the original claim objection order or

the second order denying reconsideration of the claim objection

order.4 Ehrenberg v. Cal. State Univ., Fullerton Found.

4 Nor did Debtor, in asking for reconsideration of Judge

Klein’s claim objection order, provide Judge Russell with a

(continued...)

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(In re Beachport Entm’t), 396 F.3d 1083, 1087-88 (9th Cir.

2005); Morrissey v. Stuteville (In re Morrissey), 349 F.3d 1187,

1189 (9th Cir. 2003) (failing to provide a critical transcript

may result in summary affirmance).

CONCLUSION

Based on the foregoing, we AFFIRM.

4(...continued)

transcript of the claim objection hearing. The reconsideration

hearing transcript reflects that Judge Russell was justifiably

perplexed at what he was being asked to consider. Hr’g Tr.

(Feb. 16, 2016) 4:2-5 (“Now, what’s got me a little bit

concerned here is apparently the judgments that we’re seeking to

reconsider were the judgments entered by Judge Klein and not by

me; is that right?”).

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