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FILED

OCT 07 2015

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NOT FOR PUBLICATION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. OR-14-1145-FJuKi

)

SALLY JANE BRANDENFELS, ) Bk. No. 13-32532-ELP7

)

Debtor. ) Adv. No. 13-03159-ELP

______________________________)

)

SALLY JANE BRANDENFELS, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

TICOR TITLE INSURANCE CO., )

)

Appellee. )

______________________________)

Argued and Submitted on September 25, 2015

at Seattle, Washington

Filed – October 7, 2015

Appeal from the United States Bankruptcy Court

for the District of Oregon

Honorable Elizabeth L. Perris, Bankruptcy Judge, Presiding

 

Appearances: James Huffman argued for Appellant Sally Jane

Brandenfels; Jonathan Mark Radmacher of McEwen

Gisvold LLP argued for Appellee Ticor Title

Insurance Co.

 

Before: FARIS, JURY and KIRSCHER, 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

Appellant Sally Jane Brandenfels (“Appellant” or

“Ms. Brandenfels”) appeals from the bankruptcy court’s denial of

discharge under 11 U.S.C. § 727(a)(3) (2005).1 Because we hold

that the trial court did not err in determining that

Ms. Brandenfels’s financial records were inadequate or

nonexistent, we AFFIRM.

FACTUAL AND PROCEDURAL BACKGROUND2

Oregon Holly Company (“Oregon Holly”) is owned and operated

1 Unless specified otherwise, all chapter and section

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

all “Rule” references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037.

2 Ms. Brandenfels cites the transcript of the trial before

the bankruptcy court, but fails to include the relevant portions

of the transcript in her excerpts of record. See Rule

8018(b)(1)(F) (2014) (an appellant’s appendix must include “any

relevant transcript or portion of it”). We are not obligated to

examine portions of the record not included in the excerpts of

record. See Kritt v. Kritt (In re Kritt), 190 B.R. 382, 386-87

(9th Cir. BAP 1995); 9th Cir. BAP R. 8009-1 (“The Panel is

required to consider only those portions of the transcript

included in the excerpts of the record.”).

Ms. Brandenfels also fails to provide support in the record

for many of her arguments. The Panel is not obligated to search

the entire record for error. See Dela Rosa v. Scottsdale Mem’l

Health Sys., Inc., 136 F.3d 1241 (9th Cir. 1998); Fed. R. App. P.

10(b)(2).

Moreover, Ms. Brandenfels’s appendix lumps numerous distinct

documents into single tabs, contrary to 9th Circuit BAP Rule

8018(b)-1(b) (“Documents in a paper appendix shall be divided by

tabs.”). Puzzlingly, her opening brief does not refer to most of

the documents included in the appendix. 

Despite these deficiencies, we will consider all relevant

documents provided to us.

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by Ms. Brandenfels or her husband and is engaged in the business

of producing and selling holly wreaths. Oregon Holly was

incorporated in Oregon in 1993.

In April 2008, Ms. Brandenfels or her husband incorporated

Oregon Holly Wreaths Company (“Oregon Holly Wreaths”) in Oregon. 

Appellee Ticor Title Insurance Co. (“Appellee” or “Ticor”)

alleges that Oregon Holly Wreaths “actually conducts no business,

or simply conducts the business of Oregon Holly Company, under a

new name.” 

On June 24, 2010, Ticor filed suit against Ms. Brandenfels

and Oregon Holly for breach of a promissory note. In July 2012,

the court entered a judgment in Ticor’s favor for $149,999

against Ms. Brandenfels and Oregon Holly.

Beginning in or around December 2012, Ticor issued writs of

garnishment for Oregon Holly’s and Ms. Brandenfels’s accounts at

St. Helens Community Federal Credit Union (“St. Helens FCU”). At

some point thereafter, Ms. Brandenfels opened an account at Wauna

Federal Credit Union (“Wauna FCU”) on behalf of Oregon Holly or

Oregon Holly Wreaths. Ms. Brandenfels testified that she opened

the account “so that Ticor wouldn’t be able to go get money owned

by Oregon Holly[.]” She deposited checks made out to Oregon

Holly and her husband into the Wauna FCU account, thus

commingling corporate and personal funds.

Around this same time, Ms. Brandenfels also began taking

cash withdrawals from Oregon Holly’s and Oregon Holly Wreath’s

bank accounts. She testified that she took these withdrawals to

pay contract labor in cash. Ms. Brandenfels admitted that she

often did not receive any receipts for those payments and that

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her Quickbooks files did not always reflect those transactions. 

While Ms. Brandenfels’s records prior to December 2012 documented

cash payments for contract labor, there are no such records

beginning in December 2012.

Ms. Brandenfels used credit cards for both business and

personal expenses, without differentiating the expenses in her

records and sometimes without even including such transactions in

her records. Moreover, she sometimes withdrew cash from the

corporate accounts for mixed business and personal purposes,

without documenting the split in her records. 

Ms. Brandenfels also used money from the business accounts

for personal purposes or purposes that are not clearly businessrelated. For example, Ms. Brandenfels wrote a $2,500 check to

“Cash” that she paid to a neighbor out of Oregon Holly’s Wauna

FCU account. She stated that it was to repay a loan from November

or December 2012,3 but she did not record either the loan or the

repayment in her Quickbooks files. Ms. Brandenfels also used

Oregon Holly’s funds to pay for legal services provided to the

estate of her deceased father-in-law.4 Ms. Brandenfels

3 The record is unclear as to whether the loan constituted a

business or personal expense, as Ms. Brandenfels testified that

the loan related to postage. However, she could not explain why

she wrote the check out to “Cash” as opposed to the neighbor

personally.

4 The record is unclear as to the nature of the law firm’s

services. On the one hand, Ms. Brandenfels testified that her

father-in-law’s estate owed the law firm money, so it might be

inferred that she was paying non-business debt out of company

funds. On the other hand, she also implied that the payment may

be related to the companies’ use of holly and andromeda from the

(continued...)

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acknowledged that taking money from the St. Helens FCU account

and depositing it into the Wauna FCU account allowed her to avoid

garnishment and repay such creditors.

Ms. Brandenfels admitted that, after Ticor’s garnishment

became effective, she used Oregon Holly Wreaths’s accounts to

4(...continued)

land held in trust by the estate, which may be a legitimate

business expense. She testified: 

Q. Who owed Mr. Vanden Bos money? 

A. The estate.

Q. What estate?

A. The trust. The estate of Carl

Brandenfels.

Q. Is that your husband’s deceased

father?

A. Yes. 

Q. And why did your deceased father’s

estate owe Mr. Vanden Bos money? 

A. Because we grow variegated holly and

andromeda that we use from that estate. We

have 500 trees of andromeda that we planted

on that estate. And we use that. 

. . . .

Q. Did [Mr. Vanden Bos] provide legal

services?

A. Yes. For the –- I’m not sure. 

Q. You thought it was for the estate,

but you’re not sure?

A. No, I know that we owe –- that it is

an estate bill, and that we paid that bill

because we use variegated holly and andromeda

from that estate, that trust. 

Q. So Oregon Holly Company paid Mr.

Vanden Bos for legal services he provided to

your husband’s father’s estate? 

A. Correct.

Trial Tr. (Day 1) at 69:4-70:14 (Jan. 22, 2014). In any event,

she testified that she could not point to any documentation

reflecting an agreement for Oregon Holly or Oregon Holly Wreath

to pay the trust’s debts.

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conduct Oregon Holly’s business, pay Oregon Holly’s debts, and

avoid garnishment. She stated that “Oregon Holly Company and

Oregon Holly Wreaths worked jointly together to try to pay the

debts [of Oregon Holly].” She decided as an officer and

controller of Oregon Holly “to transfer these funds or to cash

these funds not into Oregon Holly Company account but into an

Oregon Holly Wreaths Company account[.]”

In April 2013, Ms. Brandenfels filed for chapter 7

bankruptcy. Ticor timely initiated an adversary proceeding

against Ms. Brandenfels and Oregon Holly. Among other things,

Ticor objected to Ms. Brandenfels’s discharge under § 727(a)(3).

The bankruptcy court held a trial on January 22-23, 2014. 

On February 12, 2014, the court issued its oral ruling in Ticor’s

favor regarding its § 727(a)(3) claim.5 The court based its

decison on three deficiencies in Ms. Brandenfels’s records.

First, Ms. Brandenfels failed to document the use of cash

withdrawn from the corporate accounts, particularly after Ticor

5 Ticor also argued that the bankruptcy court should deny

Ms. Brandenfels’ discharge under §§ 727(a)(2)(A) and

727(a)(4)(A), but the bankruptcy court rejected these claims. 

Regarding the § 727(a)(2)(A) claim for transferring or concealing

the debtor’s assets to hinder or delay creditors, the court

stated that Ticor failed to allege and prove a piercing of the

corporate veil theory in order to hold Ms. Brandenfels liable for

the transfer of assets between Oregon Holly and Oregon Holly

Wreaths. Furthermore, regarding Ms. Brandenfels’s personal

assets, the court held that Ms. Brandenfels likely did not intend

to hinder or delay creditors, but rather just deposited personal

money into whatever account was readily accessible. Regarding

the § 727(a)(4)(A) claim for false oaths, the court found that

Ms. Brandenfels did not knowingly, intentionally, or fraudulently

make a false oath on her bankruptcy schedules regarding certain

bank accounts, because she thought those accounts were her

mother’s accounts.

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began garnishing Oregon Holly’s primary bank account. The court

calculated a discrepancy totaling $41,000 between 2010 and 2012,

with a $28,000 discrepancy in 2012, when Ticor began its

collection efforts. She testified that she used the cash to pay

contract labor, but she produced no records to confirm her

statements. The court also highlighted Ms. Brandenfels’s

testimony that she opened new bank accounts and moved assets from

Oregon Holly to Oregon Holly Wreaths to avoid paying Oregon

Holly’s creditors. Considering these facts together, the court

concluded that the missing records made it impossible to

determine whether she had misused the funds: “Ms. Brandenfels was

concealing the contract labor cash payments or [sic] under cover

of a chaotic or incomplete set of records. Another possibility

is she was doing something else with the cash. We’ll just never

know.”

The second deficiency is “the lack of clarity between cash

withdrawals and credit card payments that satisfy business

obligations and those that satisfy Ms. Brandenfels’s personal

obligations.” The bankruptcy court noted that Ms. Brandenfels

used her various credit cards and withdrew cash indiscriminately

for both business and personal uses, but seldom recorded those

transactions or distinguished between personal and business use. 

For example, the court calculated that Ms. Brandenfels made

credit card payments of approximately $9,500 in 2012 from one of

Oregon Holly Wreath’s accounts, but her records fail to indicate

whether and to what extent the payments were for business

expenses, as opposed to personal expenses. 

The third deficiency is the “string of payments to third

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parties that were made with company money but do not appear to be

company expenses.” For example, Ms. Brandenfels paid law firms

from Oregon Holly Wreath’s account for undefined services related

to her deceased father-in-law’s estate. She testified that the

records do not show that Oregon Holly or Oregon Holly Wreaths had

been the beneficiaries of the legal services. She also issued a

$2,500 check to repay a loan from a neighbor, but did not keep a

record of the loan or the repayment.

Based on these three deficiencies, the bankruptcy court

denied Ms. Brandenfels’s discharge pursuant to § 727(a)(3). 

Ms. Brandenfels timely filed her notice of appeal on March 30,

2014.

JURISDICTION

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

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

§ 158.

ISSUE

Whether the bankruptcy court erred in denying Appellant’s

discharge for failure to maintain adequate records under

§ 727(a)(3).

STANDARDS OF REVIEW

In an action for denial of discharge, we review: (1) the

bankruptcy court’s determinations of the historical facts for

clear error; (2) its selection of the applicable legal rules

under § 727 de novo; and (3) its determinations of mixed

questions of law and fact de novo. Searles v. Riley

(In re Searles), 317 B.R. 368, 373 (9th Cir. BAP 2004), aff’d,

212 Fed. App’x 589 (9th Cir. 2006).

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De novo review is independent and gives no deference to the

trial court’s conclusion. Roth v. Educ. Credit Mgmt. Agency

(In re Roth), 490 B.R. 908, 915 (9th Cir. BAP 2013) (citing

Warfield v. Salazar (In re Salazar), 465 B.R. 875, 878 (9th Cir.

BAP 2012)). Conversely, review for clear error is “significantly

deferential,” and an appellate court should not reverse unless it

is left with “a definite and firm conviction that a mistake has

been committed.” Id. (quoting Baker v. Mereshian

(In re Mereshian), 200 B.R. 342, 345 (9th Cir. BAP 1996)). We

give great deference to the bankruptcy court’s findings that are

based on its determinations of witness credibility. Retz v.

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

DISCUSSION

A. Appellee did not waive its § 727(a)(3) argument. 

Ms. Brandenfels first contends that Ticor waived its

argument under § 727(a)(3) because Ticor did not reference

§ 727(a)(3) in its trial memorandum or its opening statement. We

disagree.

First, we note that Ms. Brandenfels failed to include

Ticor’s trial memorandum in her excerpts of record. “The

appellants bear the responsibility to file an adequate record,

and the burden of showing that the bankruptcy court’s findings of

fact are clearly erroneous.” Kritt, 190 B.R. at 387 (citing

Burkhart v. FDIC (In re Burkhart), 84 B.R. 658, 660 (9th Cir. BAP

1988)). “Appellants should know that an attempt to reverse the

trial court’s findings of fact will require the entire record

relied upon by the trial court be supplied for review.” Id.

(quoting Burkhart, 84 B.R. at 661). We are not obligated to comb

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through the lower court’s docket in search of support for

Ms. Brandenfels’s arguments. Nevertheless, we will exercise our

discretion to take judicial notice of the trial memorandum, which

is available on the bankruptcy court’s docket. See O’Rourke v.

Seabord Surety Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957-

58 (9th Cir. 1989).

Second, we are not persuaded that Ticor waived its

§ 727(a)(3) argument by omitting it from its trial memorandum.

Ms. Brandenfels argues that a party’s failure to include in its

trial memorandum an argument based on a properly pleaded claim

for relief precludes it from making that argument during the

trial. Ms. Brandenfels cites no authority for the proposition,

and we have found no such authority.

Third, both the bankruptcy court and the parties addressed

§ 727(a)(3) at trial. The bankruptcy court noted at the outset

that Ticor’s § 727(a)(3) argument was not included in its trial

memorandum and specifically asked Ticor’s counsel whether Ticor

intended to abandon that argument. In response, Ticor’s counsel

affirmed that the argument was “an important part of it.”6

6 The bankruptcy court requested clarification as to Ticor’s

position on its § 727(a)(3) claim:

THE COURT: I did want to ask you one

question.

MR. RADMACHER: Yes?

THE COURT: What about the 727(a)(3)

claim? Is it abandoned or just not addressed

in the trial memo? That was –- that’s the

records claim.

MR. RADMACHER: I think -- no, it isn’t

mentioned, perhaps -- but, no, that’s an

(continued...)

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During the course of trial, the court repeatedly addressed the

issue of the adequacy of the “books and records.”7 Finally,

Ticor raised its § 727(a)(3) argument in its closing statement.8

Lastly, Ms. Brandenfels has not identified any prejudice

that she suffered as a result of the omission of Ticor’s

§ 727(a)(3) argument from its trial memorandum. As discussed

above, this issue was repeatedly addressed during trial,

Ms. Brandenfels did not raise her waiver argument at the trial

level, and Ms. Brandenfels’s counsel even specifically addressed

6(...continued)

important part of it. 

THE COURT: Okay.

MR. RADMACHER: The corporate records

are –-

THE COURT: I just wanted clarification

since it isn’t separately talked about in the

trial memo.

Trial Tr. (Day 1) at 7:8-17.

7 For example, the bankruptcy court stated: 

Here’s the problem in this case. There’s two

problems in this case from the standpoint

that we’re applying 727 in this case. The

first problem is the hinder and delay

problem. The second problem is the books and

records are awful.

Trial Tr. (Day 1) at 166:1-5.

8 Among other things, Ticor argued: “With respect to books

and records, . . . [t]here’s no separate accounts for the

companies of any kind. . . . [T]here’s no documentation of

inter-company transfers. . . . There’s no . . . effort to have

separate accounting. . . . Undocumented cash is withdrawn and

expended. . . . And the final piece is her personal ability and

knowledge, she clearly knows what she could do.” Trial Tr.

(Day 2) at 103:17-104:7 (Jan. 23, 2014).

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the issues of cash payments and the adequacy of records in his

opening and closing statements. 

Thus, Ticor did not abandon its § 727(a)(3) argument.

B. The bankruptcy court did not err in granting judgment in

favor of Appellee pursuant to § 727(a)(3).

Ms. Brandenfels argues that the bankruptcy court erred in

finding her records inadequate under § 727(a)(3)’s two-part test. 

We find no error. 

Section 727(a)(3) provides that the bankruptcy court must

deny a discharge when: 

the debtor has concealed, destroyed,

mutilated, falsified, or failed to keep or

preserve any recorded information, including

books, documents, records, and papers, from

which the debtor’s financial condition or

business transactions might be ascertained,

unless such act or failure to act was

justified under all of the circumstances of

the case[.]

§ 727(a)(3).

The Ninth Circuit has stated “that the purpose of

§ 727(a)(3) is to make discharge dependent on the debtor’s true

presentation of his financial affairs.” Caneva v. Sun Cmtys.

Ltd. P’ship (In re Caneva), 550 F.3d 755, 761 (9th Cir. 2008)

(citing Lansdowne v. Cox (In re Cox), 41 F.3d 1294, 1296 (9th

Cir. 1994)). This “requirement removes the risk to creditors of

‘the withholding or concealment of assets by the bankrupt under

cover of a chaotic or incomplete set of books or records.’” Id.

(quoting Burchett v. Myers, 202 F.2d 920, 926 (9th Cir. 1953)). 

This exception to dischargeability “should be strictly construed

in order to serve the Bankruptcy Act’s purpose of giving debtors

a fresh start.” Id. (quoting Industrie Aeronautiche v. Kasler

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(In re Kasler), 611 F.2d 308, 310 (9th Cir. 1979)).

The debtor must “present sufficient written evidence which

will enable his creditors reasonably to ascertain his present

financial condition and to follow his business transactions for a

reasonable period in the past.” Id. (quoting Rhoades v. Wikle,

453 F.2d 51, 53 (9th Cir. 1971)). To assess the sufficiency of

those records under § 727(a)(3), the court engages in a two-part

analysis. First, a creditor makes a prima facie case by showing

“(1) that the debtor failed to maintain and preserve adequate

records, and (2) that such failure makes it impossible to

ascertain the debtor’s financial condition and material business

transactions.” Id. (quoting Cox, 41 F.3d at 1296). If the

creditor meets his burden of showing inadequate or nonexistent

records, “the burden of proof then shifts to the debtor to

justify the inadequacy or nonexistence of the records.” Id.

(quoting Cox, 41 F.3d at 1296).

1. The bankruptcy court correctly held that Appellee

established a prima facie case under § 727(a)(3).

The first step of the two-part test requires Ticor to

establish that Ms. Brandenfels’s records are inadequate and that

it is impossible to ascertain her financial condition and

material business transactions. Ms. Brandenfels had “an

affirmative duty . . . to create books and records accurately

documenting [her] business affairs.” Id. at 762 (quoting

Peterson v. Scott (In re Scott), 172 F.3d 959, 969 (7th Cir.

1999)). “Complete disclosure is in every case a condition

precedent to the granting of the discharge, and if such a

disclosure is not possible without the keeping of books or

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records, then the absence of such amounts to that failure to

which the act applies.” Id. at 762 (quoting Meridian Bank v.

Alten, 958 F.2d 1226, 1230 (3d Cir. 1992)).

Ms. Brandenfels implies that the bankruptcy court should

only be concerned with whether or not it can ascertain her

ultimate financial situation. For example, she argues in her

opening brief that the court could piece together an “adequate

picture” of her finances, because it “was able to conclude that

over the period of three calendar years, her family earned

$98,000 . . . .” She contends that her records are complete

because she provided nearly 1,500 pages of her financial records,

which “include all of the relevant bank accounts, tax returns,

and profit and loss statements, and the Quickbooks detail for

these accounts of her transactions . . . . Every material

transaction is accounted for.” She argues that Ticor was able to

“fully scrutinize” her records, because it asked her to admit

that “almost all of the deposits to the account were payable to

‘Oregon Holly’ or to ‘Oregon Holly Company.’” She states that

“[t]he tax returns accounted for all of the money that the

defendant had any access to.” She relies on Caneva for the

proposition that her records only need to demonstrate (1) the

debtor’s business entities’ assets; (2) the assets that pass

through the business entities; and (3) the present value of those

assets. 

However, Ms. Brandenfels ignores Caneva’s mandate that a

debtor must “present sufficient written evidence which will

enable his creditors reasonably to ascertain his present

financial condition and to follow his business transactions for a

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reasonable period in the past.” Caneva, 550 F.3d at 761 (quoting

Rhoades, 453 F.2d at 53) (emphasis added). As we have stated

recently, “where a business is involved, simply producing a

bottom line number as to income earned, expenses incurred, or

losses suffered during a calendar year may be insufficient. . . .

This is particularly true in the context of a cash intensive

business where creditors cannot easily identify possible

preferences or fraudulent transfers without more detail.” 

Hussain v. Malik (In re Hussain), 508 B.R. 417, 425 (9th Cir. BAP

2014). It is not enough for Ms. Brandenfels to provide records

about her overall financial situation; she must also provide

records adequate to allow creditors to trace all of her

transactions.

The bankruptcy court enumerated three areas in which it

found Ms. Brandenfels’s records to be deficient: (1) lack of

documentation of cash payments to contract labor; (2) lack of

clarity between business and personal credit card payments and

cash withdrawals; and (3) payments to third parties that were

made with company money for non-business expenses. We address

each in turn. 

a. Cash payments to contract workers

First, the bankruptcy court’s foremost concern was the

undocumented cash withdrawals and claimed cash payments to

contract workers. The bankruptcy court calculated a discrepancy

of over $41,000 between 2010 and 2014. The court noted that the

unaccounted funds amount to 22.5 percent of Ms. Brandenfels’s

total contract labor costs. In 2012, around the time Ticor began

its collection actions, the discrepancy more than quadrupled, to

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$28,000 from $6,200 the previous year. After Ticor’s garnishment

became effective, Ms. Brandenfels’s records do not reflect a

single payment by check to contract labor, even though records

from the three previous years show dozens of checks for that

purpose during the same season. Furthermore, Ms. Brandenfels

admitted that she opened new bank accounts and moved assets from

Oregon Holly to Oregon Holly Wreaths to avoid paying creditors. 

Based on these facts, the bankruptcy court concluded that she

“was concealing the contract labor cash payments . . . under

cover of a chaotic or incomplete set of records[,]” or “doing

something else with the cash.”

On appeal, Ms. Brandenfels argues that her records

adequately account for all of the cash payments to contract

labor. She contends that “[t]here was no shortage of records or

missing transactions,” although she quickly admits that she

failed to include one of her accounts and does not have records

for November and December 2012.9 She claims that payments to

contract labor during this time are recorded in her bank

statements, which reflect multiple “round number” checks. 

Finally, she argues generally that she “could explain each and

every one of her transactions.”

 The bankruptcy court did not commit clear error in its

consideration of Ms. Brandenfels’s cash transactions. Her

records do not allow a creditor to “determine the details of that

9 Ms. Brandenfels argues that “she had failed to include one

of her accounts in the Quickbooks exhibit D, but she provided

6 years of back records, and missed only November and December of

2012, and all profit and loss statements through April 2013.”

Opening Br. at 12.

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transaction or verify that it actually took place.” Caneva,

550 F.3d at 762. There is no indication whom Ms. Brandenfels

paid, or how much she paid a particular person. The bankruptcy

court meticulously combed through 1,500 pages of

Ms. Brandenfels’s records and calculated a $41,000 deficiency,

which Ms. Brandenfels does not challenge on appeal. Rather,

Ms. Brandenfels argues that her payments to contract labor, while

not recorded in her business records, are reflected in her bank

statements, which the bankruptcy court “did not notice.”10

However, the bank statements fail to identify the payee or the

purpose of the transaction, and we cannot assume that the checks

and cash withdrawals were all used to pay contract labor. The

bankruptcy court was in the best position to evaluate the facts

before it, and we find no clear error in its findings. See Retz,

606 F.3d at 1196.

At oral argument, Ms. Brandenfels argued that, even if her

records were insufficient, her oral explanation at trial was

sufficient to cure the deficiency. Ms. Brandenfels did not offer

any authority in support of this proposition, other than to claim

that “jury instructions” permitted such an interpretation. This

contention is unpersuasive, not least because there is no right

to a jury trial in a § 727 action. More importantly,

Ms. Brandenfels’s argument ignores the fact that § 727(a)(3)

10 Ms. Brandenfels does not provide us with any citation to

the record evidencing that she directed the bankruptcy court to

the St. Helens FCU bank statements as the source of the cash to

pay contract labor. Given that she admittedly inundated the

court with approximately 1,500 pages of documents and apparently

could not explain the discrepancies at the time of trial, we

cannot say the bankruptcy court erred.

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requires the debtor to keep and maintain “books, documents,

records, and papers,” not merely oral explanations or

recollections. Section § 727(a)(3) requires “sufficient written

evidence,” Caneva, 550 F.3d at 761, because a debtor’s postbankruptcy oral statements can be unreliable or subject to

manipulation.

Ms. Brandenfels also claimed at oral argument that Ticor had

copies of the checks evidencing payment to contract labor and

should have offered them at trial. However, Ticor did not bear

the burden of supplementing her deficient books and records. If

Ms. Brandenfels had other documents that would have completed her

records, she could and should have offered them at trial. She

provides no convincing explanation of her failure to do so.

Ms. Brandenfels also does not dispute her earlier testimony

that she transferred assets between bank accounts to avoid

garnishment. Coupling this testimony with the large cash

discrepancy suspiciously coinciding with Ticor’s collection

actions, we share the bankruptcy court’s concern that

Ms. Brandenfels intended to engage in “withholding or concealment

of assets . . . under cover of a chaotic or incomplete set of

books or records.” Caneva, 550 F.3d at 761 (quoting Burchett,

202 F.2d at 926). The bankruptcy court did not err in finding

Ms. Brandenfels’s records inadequate to explain the cash

transactions under § 727(a)(3).

b. Mixed personal and business expenses

Second, the bankruptcy court stated that Ms. Brandenfels

would mingle business and personal expenses, but would rarely

differentiate the expenses in her records. The court totaled

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$9,500 in credit card payments in 2012, but the records do not

reflect the extent the payments concerned personal expenses or

business expenses. The court also noted that Ms. Brandenfels

obtained cash back of approximately $5,000 between November 2012

and January 2013, but did not maintain any records regarding

those funds. Similarly, Ms. Brandenfels’s ATM withdrawals that

were split between business and personal expenses were not

adequately recorded in her financial records.

We find no error in the bankruptcy court’s findings that

Ms. Brandenfels failed to produce adequate records regarding her

co-mingled personal and business expenses. She does not attempt

to explain the credit card charges of $9,500 or the cash

withdrawals of $5,000, other than to state–-without any citation

to the record--that she was able to account for all of her

transactions.

Ms. Brandenfels’s only other argument is that “both personal

and small business records were considered together in order to

determine the status of the defendant’s financial affairs. It is

incongruous to consolidate the finances for this analysis, and

then to insist on segregating them to critique her records.” 

Opening Br. at 14. Ms. Brandenfels misses the point. Reviewing

the personal and business records together is necessary to

ascertain Ms. Brandenfels’s overall financial condition, but

Ms. Brandenfels was also obligated to keep adequate records of

her businesses’ finances such that a creditor could follow the

individual transactions. See Caneva, 550 F.3d at 761 (the

debtor’s records must allow a creditor “to follow his business

transactions for a reasonable period in the past” (citation

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omitted)). The bankruptcy court did not err in finding that

Ms. Brandenfels’s failure to do so renders her records incomplete

and inadequate.

c. Non-business expenses

Third, the bankruptcy court found that Ms. Brandenfels’s

records did not adequately explain payments to third parties that

were made with company money for non-business expenses. 

Ms. Brandenfels states generally that she had offered “a valid

explanation” and notes that the “unidentified neighbor” to whom

she paid $2,500 of company funds was identified by name at trial. 

In fact, Ms. Brandenfels utterly failed at trial to provide any

written records explaining these transactions. Therefore, we

find no error in the bankruptcy court’s findings. 

Thus, the bankruptcy court correctly determined that Ticor

made a prima facie showing of the incompleteness and inadequacy

of Ms. Brandenfels’s records. 

2. The bankruptcy court correctly held that Appellant

failed to justify her inadequate records.

Since the bankruptcy court did not err in finding that

Ms. Brandenfels failed to maintain and preserve adequate records,

the burden then shifts to Ms. Brandenfels to justify the

inadequacy of her records. The bankruptcy court stated that Ms.

Brandenfels argued at trial that her records “were justified

under all the circumstances of this case. . . . She’s had two

bouts of cancer; her husband is not well after his stroke; the

economic downturn in 2008 hit her business particularly hard, and

as a result [she] has been struggling to keep her business afloat

almost singlehandedly.” The court concluded, however, that,

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“[n]otwithstanding [Ms. Brandenfels’s situation], these records

are still not adequate under 727(a)(3).”

On appeal, Ms. Brandenfels does not assign any error to this

finding.11 The only mention of her burden is a passing statement

that, “[e]ven if the plaintiff may have met its burden of proof,

the missing records for November and December have been

adequately explained under the burden shifting analysis of

Caneva.” The record, however, contains no such explanation. 

Ms. Brandenfels also conceded at oral argument that she did not

assign error to the second prong on appeal, because she felt that

the burden never shifted from Ticor to her. Therefore, the

bankruptcy court correctly found that Ms. Brandenfels failed to

carry her burden to justify the inadequacy of her records. 

C. The bankruptcy court did not err in selecting the

appropriate legal standard.

For her second point of error, Ms. Brandenfels contends that 

the bankruptcy court applied an erroneous standard in determining

the adequacy of the records at issue. However, Ms. Brandenfels

fails to present any argument on this matter in her opening

brief.12

11 Ms. Brandenfels’s first question on appeal asks only,

“Did the plaintiff meet its burden of proof to demonstrate that

the debtor’s records were not adequate under 11 USC

§ 727(a)(3)[?]”

12 We note that Ms. Brandenfels includes a subsection

entitled “Standard for adequacy” toward the end of her opening

brief. However, even construing Ms. Brandenfels’s arguments

liberally, we cannot discern any proper assignment of error by

the bankruptcy court. Ms. Brandenfels cites Caneva and a number

of other Ninth Circuit cases for the general test to determine

(continued...)

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As the Ninth Circuit has stated, “we cannot ‘manufacture

arguments for an appellant’ and therefore we will not consider

any claims that were not actually argued in appellant’s opening

brief. Rather, we ‘review only issues which are argued

specifically and distinctly in a party’s opening brief.’” 

Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir.

2003) (quoting Greenwood v. Fed. Aviation Admin., 28 F.3d 971,

977 (9th Cir. 1994)). “Significantly, ‘[a] bare assertion of an

issue does not preserve a claim.’” Id. (quoting D.A.R.E. Am. v.

Rolling Stone Magazine, 270 F.3d 793, 793 (9th Cir. 2001)). 

Ms. Brandenfels identifies the bankruptcy court’s application of

an “erroneous legal standard to the adequacy of the defendant’s

records” as one of her points of error, yet fails to

“specifically and distinctly” argue that point anywhere in her

opening brief. See id.; Rule 8014(a)(8) (2014) (an appellant’s

brief must include “the argument, which must contain the

appellant’s contentions and the reasons for them, with citations

to the authorities and parts of the record on which the appellant

relies”).

Moreover, in response to the Panel’s questions at oral

argument, Ms. Brandenfels’s counsel said that he was not

challenging the bankruptcy court’s articulation of the legal

standard, but rather was arguing that the bankruptcy court erred

in its application of the relevant standard to the facts.

12(...continued)

the adequacy of records, but does not identify any way in which

the bankruptcy court applied an erroneous standard, especially

given that the court also relied primarily on Caneva.

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Thus, we hold that the bankruptcy court did not err in

selecting the appropriate legal standard.

CONCLUSION

For the reasons set forth above, we AFFIRM the bankruptcy

court’s nondischargeability judgment.

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