NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: JAMES MARVIN ROTH, 

Debtor,

------------------------------

ANICE M. PLIKAYTIS, 

Plaintiff-Appellee,

 v.

JAMES MARVIN ROTH, 

Defendant-Appellant.

No. 14-56612

D.C. No.

3:13-cv-02954-BAS-DHB

MEMORANDUM*

In re: JAMES MARVIN ROTH, 

Debtor,

------------------------------

ANICE M. PLIKAYTIS, 

Plaintiff-Appellant,

 v.

No. 14-56700

D.C. No.

3:14-cv-00011-BAS-DHB

 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

FILED

NOV 7 2016

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

JAMES MARVIN ROTH, 

Defendant-Appellee.

Appeal from the United States District Court

for the Southern District of California

Cynthia A. Bashant, District Judge, Presiding

Argued and Submitted October 6, 2016 

Pasadena, California

Before: PREGERSON, NOONAN, and PAEZ, Circuit Judges.

The underlying federal case is a Chapter 11 bankruptcy proceeding to except 

debts from discharge pursuant to 11 U.S.C. § 523(a). The debt at issue is the 

judgment obtained in state court by Appellee/Cross-Appellant Anice Plikaytis 

against her former employer Appellant/Cross-Appellee James Roth. Both Roth 

and Plikaytis appeal the district court’s decisions affirming various rulings of the 

bankruptcy court. 

We have jurisdiction under 28 U.S.C. §§ 1291, 158(d). We review a district 

court’s decision on an appeal from a bankruptcy court de novo, with no deference 

given to the district court’s decision. In re JTS Corp., 617 F.3d 1102, 1109 (9th 

Cir. 2010). We review the bankruptcy court’s conclusions of law de novo and 

findings of fact for clear error. Id. We affirm.
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Appeal No. 14-56612

1. The bankruptcy court did not err in finding that Plikaytis’s claims in her 

amended complaint that the state court judgment was nondischargeable under 

§ 523(a)(2)(A), (a)(4), and (a)(6) related back to the time of filing of her original 

complaint. Plikaytis’s amended complaint contained the same three claims pled in 

her original complaint, but with additional factual information. Thus, the 

“amendments” regarding these three claims necessarily “assert[] a claim or defense 

that arose out of the conduct, transaction, or occurrence set out—or attempted to be 

set out—in the original pleading . . . .” Fed. R. Civ. P. 15(c)(1)(B); 6A Charles 

Alan Wright et al., Federal Practice and Procedure § 1497 (3d ed. 2016) 

(“[A]mendments that do no more than restate the original claim with greater 

particularity or amplify the details of the transaction alleged in the preceding 

pleading fall within Rule 15(c)(1)(B).”). 

2. The bankruptcy court’s justifiable reliance determination was not clearly 

erroneous because there is substantial evidence in the record that Plikaytis 

justifiably relied on Roth’s promise, including, most convincingly, the fact that she 

and Roth had been business associates for over twenty years. See In re Kirsh, 973 

F.2d 1454, 1460 (9th Cir. 1992). 
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3. The bankruptcy court did not err in finding the full $2.8 million state 

court breach of contract debt nondischargeable under § 523(a)(2)(A). The 

bankruptcy court determined that the breach of contract debt had the additional 

characteristic of fraud under § 523(a)(2)(A) and accordingly found the debt 

nondischargeable. This was not in error as the state court judgment is the correct 

measure of damages because it is the debt arising from the fraud. See Cohen v. De 

La Cruz, 523 U.S. 213, 221 (1998) (“[Section] 523(a)(2)(A) is best read to prohibit 

the discharge of any liability arising from a debtor’s fraudulent acquisition of 

money, property, etc. . . . .”). 

4. The bankruptcy court did not err in finding that Plikaytis’s § 523(a)(4) 

claim was within the scope of her pleadings. The bankruptcy pleadings expressly 

speak to Roth’s mismanagement of Talmadge East and misappropriation of 

Talmadge East funds for personal use. The bankruptcy court found wrongful 

defalcation based on Roth’s financial mismanagement of Talmadge East during

2009, which falls within the scope of the pleadings. 

5. The bankruptcy court did not err in failing to consider the 2008-2009 

ledgers in calculating the defalcation debt under § 523(a)(4). Roth’s argument 

focuses on the bankruptcy court’s statement that the 2008 ledgers were unclear, but 
5 

he ignores a crucial part of the bankruptcy court’s reasoning. The bankruptcy 

court also relied solely on the 2009 ledger because it more appropriately reflected 

the wrongful conduct that formed the basis of the judgment (i.e., financial 

mismanagement during a time of financial crises). We find no fault with this 

reasoning. 

6. The bankruptcy court did not err in evaluating whether Roth had 

fiduciary capacity under § 523(a)(4). Contrary to Roth’s argument, the bankruptcy 

court did not rely on the state court’s fiduciary duty determination in making its 

own § 523(a) fiduciary capacity determination. In a pretrial order, the bankruptcy 

court decided the issue without reference to the state court’s decision. 

7. The bankruptcy court did not err in finding that the emotional distress 

damages were nondischargeable under § 523(a)(6). Intentional infliction of 

emotional distress is an independent cause of action and does not rely on an 

allocation of damages between dischargeable and nondischargeable debts. The 

record supports the bankruptcy court’s finding of willful and malicious intent with 

regard to the emotional distress damages, which Roth does not appear to challenge. 

Cross-Appeal, No. 14-56700

1. The bankruptcy court did not err in finding that the $52,000 judgment for 
6 

“engag[ing] in wrongful conduct through withholding payment of mortgagers in 

the name of Anice Plikaytis” was subsumed within the $90,000 judgment for 

“breach of fiduciary duties . . . by failing to pay mortgages for units held in the 

name of Anice Plikaytis.” The bankruptcy court concluded that because the two 

debts arose out of the same conduct, one award subsumed the other. Plikaytis 

argues this was error, but cites no case law in support. Because the bankruptcy 

court is in the best position “to fashion the remedy best suited to the harm” and “to 

determine the appropriate damages,” we affirm. In re Anguiano, 99 B.R. 436, 438 

(B.A.P. 9th Cir. 1989) (internal quotation marks omitted). 

2. The bankruptcy court did not err in discharging the punitive damages and 

attorneys’ fees debt. The state court jury awarded punitive damages and attorneys’ 

fees in lump sums, which were applicable to all causes of action. From the verdict 

forms and judgment, the bankruptcy court could not decipher whether the 

characteristics of § 523(a) had been litigated and decided in state court with regard 

to part or all of the punitive damages and attorneys’ fees awards. Therefore, 

collateral estoppel could not be applied. Before the bankruptcy court, and on 

appeal, Plikaytis failed to present any evidence or argument that the two awards 

stemmed from nondischargeable liability. Thus, she has not met her burden to 
7 

establish nondischargeability. 

3. Because Plikaytis failed to properly request attorneys’ fees in the 

discharge proceedings, the bankruptcy court did not abuse its discretion in refusing 

to award attorneys’ fees. 

4. The bankruptcy court did not err in dismissing Plikaytis’s mechanic’s 

lien claim. Neither the original complaint, nor the attached state court judgment, 

explicitly or implicitly mention the mechanic’s lien claim. Therefore, unlike 

Plikaytis’s other claims, this claim was entirely new when presented in the 

amended complaint. Moreover, the mechanic’s lien claim did not arise from the 

same conduct, transaction, or occurrence set forth in the original complaint. 

Accordingly, the bankruptcy court properly concluded that relation back was not 

appropriate as to this claim. 

5. The bankruptcy court’s pretrial order was not an erroneous sua sponte

grant of summary judgment. “At any pretrial conference, the court may consider 

and take appropriate action on . . . formulating and simplifying the issues, and 

eliminating frivolous claims or defenses . . . .” Fed R. Civ. P. 16(c)(2)(A). As 

discussed above, the bankruptcy court properly found that the $52,000 and the 

$90,000 awards should not be aggregated. It was within the bankruptcy court’s 
8 

discretion to simplify and eliminate this issue. 

AFFIRMED.