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FILED

AUG 08 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NOT FOR PUBLICATION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. CC-15-1348-FDKu

)

RICHARD JAY BLASKEY, ) Bk. No. 8:11-bk-21187-ES

)

Debtor. ) Adv. Pro. 8:11-ap-01462-ES

_____________________________ )

)

BARTON PROPERTIES, INC.; )

STEPHEN SELINGER, )

)

Appellants, )

)

v. ) MEMORANDUM*

)

RICHARD JAY BLASKEY, )

)

Appellee. )

______________________________)

Argued and Submitted on July 28, 2016

at Pasadena, California

Filed – August 8, 2016

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Erithe A. Smith, Bankruptcy Judge, Presiding

 

Appearances: Anthony A. Patel argued for Appellants Barton

Properties, Inc. and Stephen Selinger; Chad V.

Haes of Marshack Hays LLP argued for Appellee

Richard Jay Blaskey.

 

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

* 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

This appeal arises out of a $1,000,320 state court judgment

against appellee/chapter 71 debtor Richard Jay Blaskey in favor

of appellants Barton Properties, Inc. and Stephen Selinger. In

summary, the bankruptcy court determined that the state court

judgment was not nondischargeable debt under §§ 523(a)(2)(A),

(a)(4), or (a)(6). On appeal, we affirmed as to § 523(a)(4), but

vacated and remanded the bankruptcy court’s judgment as to

§§ 523(a)(2)(A) and (a)(6) for the court to apply the correct

standard of proof. On remand, the court articulated the ordinary

preponderance of the evidence standard and reaffirmed its prior

determination that Appellants failed to establish that

Mr. Blaskey’s debt was nondischargeable under §§ 523(a)(2)(A) and

(a)(6). We find no error in the court’s conclusion. 

Accordingly, we AFFIRM.

FACTUAL BACKGROUND2

A. Proceedings before the bankruptcy court3

Appellants retained Mr. Blaskey, an attorney, in 2004 to

represent them in various state court cases. Among other legal

matters, the parties agreed that Mr. Blaskey would represent

Appellants in three unrelated lawsuits.

1 Unless specified otherwise, all chapter and section

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

2 We have exercised our discretion to review the bankruptcy

court’s docket, as appropriate. See Woods & Erickson, LLP v.

Leonard (In re AVI, Inc.), 389 B.R. 721, 725 n.2 (9th Cir. BAP

2008).

3 The following facts are taken from our decision in the

previous appeal, BAP No. CC-14-1340-KuDKi, with some alterations.

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In 2007, Appellants discovered that Mr. Blaskey had been

derelict in representing them in the underlying actions to such

an extent that the state court presiding over the underlying

actions had entered adverse orders and judgments against Barton

Properties. As a result, in 2008, Barton Properties sued

Mr. Blaskey in state court for legal malpractice, breach of

contract, fraud, and breach of fiduciary duty. The state court

entered a default judgment against Mr. Blaskey in 2010.

Mr. Blaskey commenced his bankruptcy case in August 2011,

and Appellants filed their nondischargeability adversary

proceeding shortly thereafter. Appellants alleged three distinct

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

The court held the trial on Appellants’ claims in March

2014. Appellants offered into evidence a handful of exhibits and

presented the testimony of Mr. Selinger, who at all relevant

times was the president of Barton Properties. Mr. Selinger

testified that, in 2006, Mr. Blaskey told him that he was taking

care of all of the litigation and settlement tasks in the

underlying actions. If Mr. Selinger had known the truth – that

Mr. Blaskey was derelict in his duties – Barton Properties would

not have paid Mr. Blaskey’s 2006 invoices for legal fees to the

tune of roughly $50,000. Mr. Selinger also testified that, if

Mr. Blaskey had not lied to him about the performance of his

duties, he would have hired new counsel, who might have had

opportunities to prevent or have set aside some or all of the

adverse orders and judgments entered in the underlying actions.

Notably, Mr. Selinger’s testimony contained virtually no

specifics about what Mr. Blaskey reported to him about the status

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of the underlying actions, when Mr. Blaskey made particular

reports, when Barton Properties made payments to Mr. Blaskey, and

how much was paid in each instance. Furthermore, Mr. Selinger

offered no specifics regarding the remedial opportunities

available at the time but later lost because Barton Properties

was relying on Mr. Blaskey’s misstatements.

Appellants offered two distinct types of evidence to

demonstrate the amount of damages they suffered. First, there

was Mr. Selinger’s testimony. Mr. Selinger gave a generalized

account of damages, broken down by underlying action. According

to Mr. Selinger, as a result of Mr. Blaskey’s conduct, Barton

Properties suffered damages of roughly $470,000, $60,000, and

$450,000, respectively, in the three underlying actions. For the

most part, Mr. Selinger did not offer specific details concretely

demonstrating how Mr. Blaskey’s nondischargeable conduct caused

Barton Properties’ damages in the underlying actions.

Second, Appellants produced documentary evidence. They

offered as exhibits the complaint filed and the $1 million

default judgment entered in their state court action against

Mr. Blaskey. Appellants in essence asserted that issue

preclusion applied and that these two documents established their

damages of $1 million. But Appellants’ issue preclusion argument

went further. According to Appellants, the state court judgment

not only conclusively established Mr. Blaskey’s liability for

$1 million but also conclusively established that the judgment

debt was nondischargeable – that Mr. Blaskey was precluded from

arguing in the adversary proceeding that the $1 million in

damages resulted from anything other than nondischargeable

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conduct.

Mr. Blaskey was not present at trial, so the court struck

his written testimony. Mr. Blaskey’s counsel did not offer any

further evidence.

After the conclusion of the trial, the bankruptcy court

announced its findings of fact and conclusions of law. The

bankruptcy court rejected Appellants’ assertion that they were

entitled to issue preclusion based on the state court judgment. 

The bankruptcy court pointed out that issue preclusion was not

available unless the issues in question were the subject of

explicit findings by the state court or, alternately, implicit

findings on those issues were essential to support the state

court’s judgment. The bankruptcy court pointed out that the

state court judgment was not supported by any explicit findings

and that it was impossible to tell on which causes of action

Appellants had prevailed. Consequently, the bankruptcy court

held that it could not apply issue preclusion to determine the

dischargeability of Mr. Blaskey’s $1 million judgment debt

because Appellants had not satisfied the “necessarily decided”

element for issue preclusion.

The court next addressed the trial record and whether

Appellants had made a sufficient showing that the $1 million

judgment debt, or any portion thereof, should be declared

nondischargeable under § 523(a)(2)(A). The court found that

Appellants had not established by a preponderance of the evidence

that their damages resulted from fraudulent conduct. According

to the court, there was either no evidence or insufficient

evidence connecting any particular misrepresentation Mr. Blaskey

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made either to the $50,000 in legal fees Appellants paid

Mr. Blaskey or to the roughly $1 million in damages Appellants

apparently suffered in the underlying actions.

The court further explained that Appellants’ evidentiary

deficiencies were exacerbated by the lack of any documentation to

support the amounts Mr. Blaskey billed them or the amounts they

actually paid. The court also pointed out that Appellants’ lack

of specificity regarding the alleged representations worked

against them proving their nondischargeability claims by a

preponderance of the evidence.

As for Appellants’ § 523(a)(4) claim, the bankruptcy court

found that there was no evidence of any express or technical

trust as to any of the monies Appellants paid to Mr. Blaskey and

there was insufficient evidence of a defalcation within the

meaning of the statute. And as for Appellants’ § 523(a)(6)

claim, the bankruptcy court found there was insufficient evidence

that Mr. Blaskey subjectively intended to injure Appellants.

During its ruling, the bankruptcy court stated multiple

times that Appellants bore the burden of proof to establish all

of the nondischargeability elements by a preponderance of the

evidence. However, the bankruptcy court also made a couple of

statements indicating that the preponderance of the evidence

standard has a special meaning or gloss in nondischargeability

litigation. For instance, the bankruptcy court stated that it

was “required to view the evidence strictly against the creditor

and liberally in favor of the debtor” and “in the light most

favorably to the defendant and strictly against the plaintiff.”

On June 20, 2014, the bankruptcy court entered judgment in

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favor of Mr. Blaskey and against Appellants.

B. Appellate review by the BAP

Appellants appealed the bankruptcy court’s decision to the

BAP, BAP No. CC-14-1340-KuDKi (“First Appeal”).

The Panel held that the bankruptcy court correctly

determined that issue preclusion did not apply to the state

court’s default judgment. The Panel also affirmed the bankruptcy

court’s decision in favor of Mr. Blaskey on the § 523(a)(4)

claim.

The Panel held, however, that the court misapplied the

standard of proof on the §§ 523(a)(2)(A) and (a)(6) claims. 

While the court correctly identified the standard as a

preponderance of the evidence, it conflated the strict

construction of the statutory language of § 523(a) with the

standard of proof, which only requires that a fact is more likely

than not. 

Accordingly, the Panel remanded the case to the bankruptcy

court for consideration of the §§ 523(a)(2)(A) and (a)(6) claims

under a non-heightened standard of proof. The Panel did not

direct any particular procedure or result on remand, but only

required that the bankruptcy court apply the ordinary

preponderance of the evidence standard.

C. The bankruptcy court’s decision on remand

Without holding any further hearings or receiving additional

materials from the parties, the bankruptcy court issued its order

in response to the Panel’s decision in the First Appeal (“Order

on Remand”). The court summarized the procedural history of the

case and stated that it had reviewed the entire trial record

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under the preponderance of the evidence standard. It concluded

that “1) no further court proceedings or briefing is necessary

and 2) judgment should be entered in favor of Defendant as to the

§ 523(a)(2)(A) and (6) claims based upon the findings and

conclusions set forth in the Oral Ruling, which is incorporated

by reference herein.” In other words, the court reaffirmed its

previous ruling in its entirety. 

Appellants timely filed their notice of appeal from the

Order on Remand.

JURISDICTION

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

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

§ 158.

ISSUES

(1) Whether the bankruptcy court erred in its application of

the preponderance of the evidence standard.

(2) Whether the bankruptcy court erred when it determined

that Appellants did not establish their §§ 523(a)(2)(A) and

(a)(6) claims.

(3) Whether the bankruptcy court erred in its consideration

of the parties’ evidence and objections.

(4) Whether the bankruptcy court violated public policy and

equitable principles in ruling in favor of Mr. Blaskey. 

(5) Whether the bankruptcy court correctly followed the

BAP’s decision in the First Appeal.

STANDARDS OF REVIEW

In bankruptcy discharge appeals, we review the bankruptcy

court’s findings of fact for clear error and conclusions of law

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de novo. We apply 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. 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); see also Honkanen v. Hopper

(In re Honkanen), 446 B.R. 373, 382 (9th Cir. BAP 2011) (the

ultimate question of whether a particular debt is dischargeable

is a mixed question of fact and law reviewed de novo).

“Whether a requisite element of a § 523(a)(2)(A) claim is

present is a factual determination reviewed for clear error.” 

Tallant v. Kaufman (In re Tallant), 218 B.R. 58, 63 (9th Cir. BAP

1998). Similarly, “[w]hether a debtor’s conduct is willful and

malicious under § 523(a)(6) is a question of fact reviewed for

clear error.” Banks v. Gill Distrib. Ctrs., Inc. (In re Banks),

263 F.3d 862, 869 (9th Cir. 2001).

Factual findings are clearly erroneous if they are

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

v. Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010). If

two views of the evidence are possible, the trial judge’s choice

between them cannot be clearly erroneous. Anderson v. City of

Bessemer City, N.C., 470 U.S. 564, 574 (1985).

We review a bankruptcy court’s evidentiary rulings for abuse

of discretion, and then only reverse if any error would have been

prejudicial to the appellant. Mbunda v. Van Zandt

(In re Mbunda), 484 B.R. 344, 351 (9th Cir. BAP 2012), aff’d,

604 F. App’x 552 (9th Cir. 2015). To determine whether the

bankruptcy court has abused its discretion, we conduct a two-step

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inquiry: (1) we review de novo whether the bankruptcy court

“identified the correct legal rule to apply to the relief

requested” and (2) if it did, we consider whether the bankruptcy

court's application of the legal standard was illogical,

implausible, or “without support in inferences that may be drawn

from the facts in the record.” United States v. Hinkson,

585 F.3d 1247, 1262–63 & n.21 (9th Cir. 2009) (en banc).

“We afford broad discretion to a district court’s

evidentiary rulings. To reverse such a ruling, we must find that

the district court abused its discretion and that the error was

prejudicial. A reviewing court should find prejudice only if it

concludes that, more probably than not, the lower court’s error

tainted the verdict.” In re Mbunda, 484 B.R. at 352 (quoting

Harper v. City of L.A., 533 F.3d 1010, 1030 (9th Cir. 2008)). 

We review de novo the bankruptcy court’s compliance with the

mandate of an appellate court. See United States v. Kellington,

217 F.3d 1084, 1092 (9th Cir. 2000).

DISCUSSION

A. The bankruptcy court correctly applied the preponderance of

the evidence standard on remand as to Appellants’

§§ 523(a)(2)(A) and (a)(6) claims. 

1. The bankruptcy court correctly followed the BAP’s

instruction on remand.

Appellants argue that the bankruptcy court did not adhere to

the BAP’s instruction on remand from the First Appeal, because

the court did not hold further proceedings, request additional

briefing, explain how it applied the preponderance of the

evidence standard, or identify findings of facts and conclusions

of law. We disagree.

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Under the rule of mandate, “[o]n remand, a trial court may

not deviate from the mandate of an appellate court.” Commercial

Paper Holders v. Hine (In re Beverly Hills Bancorp), 752 F.2d

1334, 1337 (9th Cir. 1984). “‘The rule of mandate is similar to,

but broader than, the law of the case doctrine.’ A district

court that has received the mandate of an appellate court cannot

vary or examine that mandate for any purpose other than executing

it.” Hall v. City of L.A., 697 F.3d 1059, 1067 (9th Cir. 2012)

(quoting United States v. Cote, 51 F.3d 178, 181 (9th Cir.

1995)); see AT&T Universal Card Servs. v. Black (In re Black),

222 B.R. 896, 900 (9th Cir. BAP 1998) (“When a case has been

decided by an appellate court and remanded, the trial court ‘must

proceed in accordance with the mandate and such law of the case

as was established by the appellate court.’” (citation omitted)). 

However, “the rule of mandate allows a lower court to decide

anything not foreclosed by the mandate.” Hall, 697 F.3d at 1067.

The Panel only ordered that the bankruptcy court apply the

proper standard of proof on remand. It did not require the

bankruptcy court to hold further proceedings, and it specifically

stated that it did not require “the bankruptcy court [to] make

different findings.” Rather, it said that, “before we can review

the bankruptcy court’s findings, we need to ensure that the

bankruptcy court applied the ordinary preponderance of the

evidence standard.” 

The bankruptcy court stated in its Order on Remand that it

reviewed the entire trial record under the ordinary preponderance

of the evidence standard and that, under the normal preponderance

standard, it would reach the same result. This is exactly

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consistent with our mandate.

2. The court did not err in ruling in favor of Mr. Blaskey

on Appellants’ § 523(a)(2)(A) claim.

Section 523(a)(2)(A) prohibits the discharge of any

obligation for money, property, services, or credit, to the

extent that the money, property, services, or credit were

obtained by fraud, false pretenses, or false representations.

§ 523(a)(2)(A). The Ninth Circuit has consistently held that a

claim of non-dischargeability under § 523(a)(2)(A) requires the

creditor to demonstrate five elements:

(1) the debtor made . . . representations;

(2) that at the time he knew they were false;

(3) that he made them with the intention and purpose

of deceiving the creditor;

(4) that the creditor relied on such representations;

[and]

(5) that the creditor sustained the alleged loss and

damage as the proximate result of the

misrepresentations having been made.

Ghomeshi v. Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir.

2010) (quoting Am. Express Travel Related Servs. Co. v. Hashemi

(In re Hashemi), 104 F.3d 1122, 1125 (9th Cir. 1996)). 

In the present case, the court determined that Appellants

failed to establish that the state court judgment was

nondischargeable. Although the court noted that it is

“undisputed . . . that Mr. Blaskey did not perform all services,”

it held that the evidence did not establish the nature and

substance of the alleged misrepresentations, the causal

connection between those misrepresentations and any damages, and

the amount of any resulting damages.

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The bankruptcy court did not clearly err when it found that

Appellants’ evidence - which all parties and the court agreed was

“thin” - was not sufficient to carry their burden of proof. The

Appellants failed to establish that Mr. Blaskey made false

statements that he knew to be false with the expectation that

Appellants would rely on those statements. They also failed to

establish damages attributable to the alleged

misrepresentations.4 The court did not commit clear error when

it held that Appellants failed to prove their case by a

preponderance of the evidence.

3. The court did not err by ruling in favor of Mr. Blaskey

on Appellants’ § 523(a)(6) claim.

Similarly, the court did not err when it determined that

Appellants did not meet their burden of proof regarding their

§ 523(a)(6) claim. 

Section 523(a)(6) provides an exception to discharge for

debts “for willful and malicious injury by the debtor to another

entity or to the property of another entity.” “A determination

whether a particular debt is for ‘willful and malicious injury by

the debtor to another’ under section 523(a)(6) requires

application of a two-pronged test to apply to the conduct giving

4 Appellants argue that the superior court judgment

established the amount of damages, such that the bankruptcy court

must afford it issue preclusive effect. We rejected this

argument in the First Appeal and will not revisit it here.

In any event, the bankruptcy court properly determined that

Appellants failed to prove a causal relation between the alleged

misrepresentations and their alleged damages, so we need not

examine the calculation of damages here.

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rise to the injury. The creditor must prove that the debtor’s

conduct in causing the injuries was both willful and malicious.” 

Suarez v. Barrett (In re Suarez), 400 B.R. 732, 736 (9th Cir. BAP

2009), aff’d, 529 F. App’x 832 (9th Cir. 2013). First,

“[w]illfulness requires proof that the debtor deliberately or

intentionally injured the creditor, and that in doing so, the

debtor intended the consequences of his act, not just the act

itself.” Id. at 736-37. Second, “[f]or conduct to be malicious,

the creditor must prove that the debtor: (1) committed a wrongful

act; (2) done intentionally; (3) which necessarily causes injury;

and (4) was done without just cause or excuse.” Id. at 737.

The bankruptcy court held that Appellants failed to

establish the elements of § 523(a)(6). It said that the

conclusory statements in the complaint were insufficient to

establish willful and malicious injury. It also said that

Appellants did not focus on § 523(a)(6) at trial and could not

simply rely on their arguments concerning § 523(a)(2)(A). We

discern no error. 

Appellants’ evidence fails to establish either the “willful”

or “malicious” prong required by § 523(a)(6). As noted by the

bankruptcy court, Mr. Selinger’s testimony did not prove

Mr. Blaskey’s intent to injure Appellants. Even on appeal,

Appellants fail to point to any evidence establishing

Mr. Blaskey’s willful and malicious conduct. Accordingly, the

court did not err in rejecting Appellants’ § 523(a)(6) claim.

4. Appellants’ other evidentiary arguments are misplaced.

Appellants also argue that the bankruptcy court

misunderstood the nature of the case or otherwise erred in

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discounting their evidence. We reject these arguments.

Appellants contend that the court misconstrued the facts to

reflect mere negligence, rather than “lies, deceit and cover-up.” 

They imply that the court was reluctant to reach the latter

conclusion, because of “what it may say about our legal

system[,]” and the court “was loathe to go down that path.”

We find no merit in Appellants’ position. The bankruptcy

court properly found that Mr. Selinger’s testimony simply did not

establish, by a preponderance of the evidence, each of the

elements of their claims. See Hussain v. Malik (In re Hussain),

508 B.R. 417, 425 (9th Cir. BAP 2014) (“the bankruptcy court was

in the best position to evaluate the documentary and testimonial

evidence”). Nothing in the record suggests that the court was

biased by a desire to protect the reputation of lawyers or the

legal system.

They also contend that the court must accept Mr. Selinger’s

testimony, because Mr. Blaskey did not offer any testimony to

refute it. But they ignore the fact that they had the ultimate

burden of proving their claims by a preponderance of the

evidence. See generally Brown v. Electrolux Home Prods., Inc.,

817 F.3d 1225, 1233 (11th Cir. 2016) (“And the entire point of a

burden of proof is that, if doubts remain about whether the

standard is satisfied, ‘the party with the burden of proof

loses.’”); United States v. 15 Bosworth St., 236 F.3d 50, 55 (1st

Cir. 2001) (“when there is insufficient evidence on a particular

issue, that issue must be resolved against the party who bears

the burden of proof” (emphasis in original)). The bankruptcy

court determined that Mr. Selinger’s testimony and evidence were

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insufficient to establish Appellants’ claims. The bankruptcy

court was not required to accept Mr. Selinger’s testimony. The

fact that Mr. Blaskey did not testify does not relieve Appellants

of their burden of proof.

Appellants further argue that the court erred in requiring

them to produce documentary evidence to support their claims,

because Mr. Selinger offered written and oral testimony. We

again find no error in the court’s determination. The court

stated that Mr. Selinger’s testimony alone was insufficient to

establish the various elements discussed above, and Appellants

failed to offer documentary evidence to fill in gaps in his

testimony.

B. The court did not err in considering Mr. Blaskey’s closing

statement.

Appellants argue that the court erred in considering

Mr. Blaskey’s evidentiary objections and challenges raised in his

closing statement. However, they fail to provide us with

sufficient information to review this issue. An appellate court

“won’t consider matters on appeal that are not specifically and

distinctly argued in appellant’s opening brief. Applying this

standard, we’ve refused to address claims that were only argue[d]

in passing, or that were bare assertion[s] . . . with no

supporting argument.” Christian Legal Soc. Chapter of Univ. of

Cal. v. Wu, 626 F.3d 483, 487 (9th Cir. 2010) (internal citations

and quotation marks omitted).

Appellants do not identify any particular error. They

complain about two of Mr. Blaskey’s supposed objections:

(1) objections to testimony regarding Mr. Blaskey’s “doctoring”

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of documents; and (2) objections to “certain evidence” including

the $400,000 lost settlement. However, Mr. Blaskey did not

object to the inclusion of such evidence; rather, he merely

argued against the weight or relevance of the evidence, as he is

entitled to do during closing statements.

In any event, there is no indication that the court

sustained either of these “objections” or excluded any of

Appellants’ evidence. We find no error.

C. The court did not abuse its discretion in excluding

Exhibits 5 and 6.

Appellants argue that the court should have admitted their

Exhibits 5 and 6 at trial. We hold that the bankruptcy court

correctly excluded both exhibits. 

Exhibit 5 was Mr. Selinger’s declaration in superior court.

The court did not admit Exhibit 5 because the information therein

could have been offered by Mr. Selinger in written or rebuttal

testimony. Appellants offer no legal authority supporting the

admissibility of Exhibit 5. We will not consider unsupported

arguments. See Christian Legal Soc. Chapter of Univ. of Cal.,

626 F.3d at 487. Moreover, Appellants’ counsel agreed with the

objection and did not preserve this error on appeal: “Okay. 

We’ll - we will agree with the objection and not, you know - not

try to present it then . . . on the direct.” Finally, Appellants

do not provide us with a copy of Exhibit 5, so we are unable to

review it and determine whether it should have been admitted.

Exhibit 6 is a declaration of Appellants’ counsel. 

Appellants claim that the document establishes Mr. Blaskey’s noncooperation and that his “behavior and habits are admissible to

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show how he acted in the past,” but they do not cite any relevant

legal authority supporting this proposition. Appellants have not

even provided the Panel with a copy of the document so that we

may evaluate its admissibility. Further, the declaration is

inadmissable hearsay, as it was an out-of-court statement by

counsel, who was not a witness at trial. Fed. R. Evid. 801.

Accordingly, the bankruptcy court properly excluded

Exhibits 5 and 6. 

D. The bankruptcy court’s judgment does not violate public

policy or equitable principles.

Appellants also state that the bankruptcy court’s ruling

contravened public policy and ignored the bankruptcy court’s role

as an equitable tribunal. These arguments are unsupported. 

Appellants’ assertion that Mr. Blaskey “should not be

allowed to just walk away from his obligations” ignores the fact

that they were unable to establish the requisite elements of

§§ 523(a)(2)(A) and (a)(6). While it is true that public policy

dictates that bankruptcy protection is reserved for the “honest

but unfortunate debtor,” that maxim cannot save Appellants’

failure to meet a statutory requirement.

In fact, congressionally enacted public policy favors

discharge. See Snoke v. Riso (In re Riso), 978 F.2d 1151, 1154

(9th Cir. 1992) (“One of the fundamental policies of the

Bankruptcy Code is the fresh start afforded debtors through the

discharge of their debts. In order to effectuate the fresh start

policy, exceptions to discharge should be strictly construed

against an objecting creditor and in favor of the debtor.”).

Sections 523(a)(2)(A) and (a)(6) represent Congress’ view of the

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correct public policy. We will not substitute our view of public

policy for the congressional view. 

Similarly, while it is true that a bankruptcy court is a

court of equity, it cannot and should not ignore a statute merely

because a party complains that it is not “receiv[ing] a fair

result.” Appellants provide no authority for their novel

proposition to the contrary. See San Rafael Baking Co. v.

N. Cal. Bakery Drivers Sec. Fund (In re San Rafael Baking Co.),

219 B.R. 860, 866 (9th Cir. BAP 1998) (“Bankruptcy courts are

courts of equity but must follow the law and cannot ignore

express statutory commands.”); cf. Law v. Siegel, 134 S. Ct.

1188, 1197 (2014) (holding that there is “no authority for

bankruptcy courts to deny an exemption on a ground not specified

in the Code”).

CONCLUSION

For the reasons set forth above, we AFFIRM.

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