N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
In re : GEOR G ES M AR C IANO,

De btor,

______________________________ AR T PAC K, INC .,

Appe lla nt, v. DAVID K. GOTTLIEB , C ha pte r 11 Truste e for the Esta

t e of Ge orge s M arc ia no, Appe lle e . No. 15-56619 D.C . No. 2:15-c v-02109-C JC M EM O R ANDUM *

Appe a l from

the Unite d

Sta t e s Distric t C ourt for the C e ntra l Distric t of C a lifornia C orm a c J. C arne y , Distric t Judge , Pre siding Argue d a nd Subm itte d M a

rc h 6, 2017 Pa sa de n a , C a l ifornia B e fore : PREGER SON, PAEZ, a nd B ER ZON, C irc uit Judge s . 

# F IL ED JUL 05 2017 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.W e re vie w the distric t c ourt’ s opinion a ffirm ing the ba nkruptc y c ourt’ s orde rs a llowing a

ppe l la nt Art Pa c k, Inc .’ s proof of c la im a ga inst the e sta

te of Ge orge s M arc i ano for $84,918.99. 1. The ba nkruptc y c ourt a c te d

within its a

u thority , both a s a c onstitutiona l and a s a s tatutory

m a tte r, in liquida

ting Art Pa c k’ s c onte ste d proof of c la im . Art Pa c k’ s proof of c la im

sought da

m a ge s a rising out of M arc ia

no’ s m a lic i ous prose c ution of thec om

pa ny “ in a n unliquida

te d am ount a c c ording to proof.” The Supre m e C ourt ha s he ld tha t ba nkruptc y c ourts c o nstitutiona

lly m ay a djudic a te those c la im s tha t “ ste m [] from the ba

nkruptc y itse lf or would ne c e ssa rily be re solve d in the c l a im s a llowa nc e proc e ss.” Ste rn v . Marshall , 564 U.S. 462, 499 (2011). The e ntire dispute be fore us a rose out of Art Pa c k ’ s c onte ste d proof of c la im , a nd liquida

tion of Art Pa c k ’ s c la i m

wa s a ne c e ssa ry ste p in the c la im s a l lowa

nc e proc e ss. So, a lthough the ba n kruptc y c ourt ha d to a

pply sta te c o m m on la w to de te rm ine whe the r and to wha t e xte nt to a llow Art Pa c k’ s c la im a ga inst M arc i ano’ s e sta

te , Artic le III did not pre c lude a djudic a tion of Art Pa c k’ s c la im

by a ba nkruptc y c ourt. Se e In re De itz , 760 F.3d 1038, 1050 (9th C ir. 2014) (c onc luding tha

t “ e ve n a fte r Ste rn , the ba nkruptc y c ourt ha d the c onstitutiona

l a uthority to e nte r a fina l judgm e nt de t e rm i ning . . . the am ount of [c re ditors’ ] dam a ge c la im s a ga inst [a de btor] ” ).
2Nor is Art Pa c k’ s proof of c la im a “ pe rsona l injury tort” c la im fa lling outside the ba

nkruptc y c o urt’ s sta

tutory c ore jurisdic tion. Se e 28 U.S.C . § 157(b)(2)(B ). W e ne e d not pa rse the m e aning of “

pe rsona l injury tort” in a

ny de ta il be c a

u se , e ve n if m a lic ious prose c ution m ay in som e insta

nc e s c onstitute

a

“ pe rsona l injury

tort,” Art Pa c k is a

c orporation a

nd thus m ay

only re c ove r for dam a ge to its busine ss. Se e Roe me r v . C omm’r of Inte rnal Re v e nue , 716 F.2d 693, 699 n.4 (9th C ir. 1983), s upe rse de d by statute on othe r grounds , Pub. L. 104-188, Title I, § 1605(a ), 110 Sta t . 1755 (“ [A] c orporation by its ve ry nature c an not suffe r a pe rsona l injury . A c orporation is a busine ss e ntity

and not a hum an be i ng; thus, a c orporation c an only be prote c te d a ga inst fa lse sta te m e nts a ffe c ting its tra de or busine ss.” ); c

f. N
. Pac . R.R. C

o. v . W hale n , 149 U.S. 157, 163 (1893) (dism issing a c orporation’ s nuisa

nc e c la im an d noting tha

t “ [a ] s a c orporation c annot be sa id to have life or he a lth or se nse s, the only ground on whic h it c an obta in e ithe r dam a ge s or an injunc tion . . . is injury to its prope rty ” ). 2. The ba nkruptc y c ourt did not c le arly

e rr in c onc luding tha

t M arc ia no’ s m a lic ious prose c ution wa s not a substa ntia l fa c tor in the M oha

j e ris’ de c ision to se ll Art Pa c k. S

e e In reOlshan , 356 F.3d 1078, 1083 (9th C ir. 2004) (sta ting tha t a ppe lla te c o urts re vie w “ the ba

nkruptc y c ourt’ s le g a l c onc lusions denovo a nd its fa c t ua l de te rm inations for c le ar e rror” ); s e e also Phoe nix Eng’g & Supply Inc . v . 3Univ e rsal Ele c . C o. , 104 F.3d 1137, 1140 (9th C i r. 1997) (“ W he n a tria l c ourt a dopts a pa rty ’ s propose d findings, the c le a rly e rrone ous sta

nda rd a pplie s , a lthough c lose sc rutiny

of the re c ord is a

ppropria te ” ) (inte rna l quota

tion m a rks a nd c ita tions om i tte d). 1 The ba nkruptc y c o urt pla usibly c onc lude d tha

t the re c ord prove d no c a

usa l link be twe e n M arc ia

no’ s la wsuit a n d Art Pa c k ’ s sa l e . Se e Husain v
. Oly m pic Airw ay s , 316 F.3d 829, 835 (9th C ir. 2002) (sta ting tha t, whe n a pply i ng c le ar e rror re vie w, the a

ppe lla te c o urt m u s t a ffirm “ if the distric t c ourt’ s findings a re pla usible in light of the

re c ord vie we d i n its e ntire ty ” ). The broke r re sponsiblefor fa c i lita t ing the sa le of Art Pa c k unde rstood from the M o ha je ris tha t he a lth proble m s—

whic h m e dic a l re c ords show both pre -da te d M arc ia no’ s ba se le ss litiga tion a ga inst Art Pa c k a

nd post-da

te d Art Pa c k’ s sa le

— a

n d a de sire to re tire we re the driving forc e s be hind the M oha je ris’ de c ision to se ll. T he ba nkruptc y c ourt re a sona

bly gave little to no we ight to Dr. M e llm an’ s de c l ara tions, in light of the l im ite d support provide d for m any of the de c la

rations’ c onc l usions a

n d the de c la ra tions’ foc us on litiga

tion m a te ria ls pre pa

re d both in this litiga

tion a n d in the judgm e nt c re ditors’ la

wsuits. Se e Me

ssic k v . N ov artis Pharm. C

orp. , 747 F.3d

1 Although the

ba nkruptc y c ourt did not e la

borate on its re a soning, it a pplie d the c orre c t le g a l sta

n d ard. 41193, 1198–99 (9th C ir. 2014) (a c knowle dging tha t, e v e n if a m e dic a l e xpe rt’ s re port pre pa

re d without e xam ination or inte rvie w of the subje c t is in som e insta nc e s a d m issible , the fa c tfinde r m ust still de te rm ine its we ight). On this re c o rd, the ba

nkruptc y c ourt did not c le arly e rr in c o nc luding tha

t M arc i ano’ s la wsuit pla y e d no “ m o re tha

n [a ] ne gligibleor the o re tic a l ” role in bringing a bout whate ve r harm Art Pa c k subse q ue ntly e xpe rie n c e d
. Se e S. C

oast Framing, Inc . v . W ork e r’s C omp. Appe a l

s Bd. , 61 C a l. 4th 291, 298 (2015). 3. B e c a use the ba nkruptc y c ourt did not c le arly

e rr in c onc luding tha

t M arc ia no’ s la wsuit wa s not a

substa ntia l fa c tor in the M oha

je ris’ de c ision to se ll the b usine ss, we do not re a c h Art Pa c k’ s c onte ntions re ga rding lost profit da

m a ge s. 4. C a lifornia

la w c le arly re quire s tha

t a pa rty se e king punitive

dam a ge s provide “ a c tua l e v ide nc e of the de fe nda nt’ s fina nc ia l c ondition” a t the tim e of tria l. K e lly v . Haag , 145 C a l. App. 4th 910, 915 (2006) (c iting Adams v . Murak ami , 54 C a l. 3d 105, 119 (1991)). Art Pa c k did not introduc e any

suc h e vide nc e an d so, e ve n a s sum ing we m ay

award punitive dam a ge s in som e ba nkruptc y c a se s, we m ay not a ward punitivedam a ge s he re . 5. The ba nkruptc y judge did not e xhibit im

pe rm issible bia s , a s the re c ord be fore the ba

nkruptc y j udge doe s not “ re ve a l suc h a high de gre e of favoritism or

5anta gonism

a s to m a ke fa ir judgm e nt im

possible
. ” In re Marshall , 721 F.3d 1032, 1043 (9th C ir. 2013) (quoting Lite k y v . Unite d State

s , 510 U.S. 540, 555 (1994)) . 6. Art Pa c k’ s proof of c la im c ould not ha

ve be e n e ntitle d to prim a fa c ie va lidity re ga rding the am ount of da

m a ge s Art Pa c k wa s owe d, a s the proof of c la im sought c om

pe nsatory and punitive

dam a ge s, attorne y s’ fe e s, c osts, a nd pre
judgm e nt inte re st “ i n a

n unliquida

te d am ount a c c ording to proof.”The ba nkruptc y c ourt prope rly c o nc lude d tha t the am ount of da

m a ge s wa s c onte ste d onc e Art Pa c k and the ba

nkruptc y truste e sought to liquida

t e the c la im

for diffe re nt a

m o unts, a c c ording to e a c h pa

rty ’ s e vide nc e . Se e Lunde ll v
. Anc hor C o nstr. Spe c ialists, Inc
. , 223 F.3d 1035, 1039 (9th C ir. 2000). Unde r the se c irc um s ta nc e s, the ba nkruptc y c ourt did not e rr in sc h e duling proc e e dings to re solve the am ount of dam a ge s owe d to Art Pa c k
. AFFIRM E D.

6