NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT 

PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

JOHNNY JOHNSON and ANNA JOHNSON, husband and wife; 

THE ESTATE OF RUDY JOHNSON and DIANA JOHNSON,

Plaintiffs/Appellants,

v.

STEVE MATTHEWS and COLLEEN MATTHEWS, husband and wife;

MATTHEWS, GOLD, KENNEDY & SNOW, INC., an Arizona 

corporation; LESLIE A. PLATTNER and RHONDA PLATTNER, 

husband and wife; and PLATTNER, SCHNEIDMAN & SCHNEIDER

P.C., an Arizona professional corporation, 

Defendants/Appellees.

No. 1 CA-CV 15-0369

Appeal from the Superior Court in Maricopa County

No. CV2012-015219

The Honorable Patricia Starr, Judge

AFFIRMED

COUNSEL

Maynard Cronin Erickson Curran & Reiter, PLC, Phoenix

By Daniel D. Maynard

Counsel for Plaintiffs/Appellants

Burch & Cracchiolo, PA, Phoenix

By Edwin D. Fleming, Melissa Iyer Julian

Counsel for Defendants/Appellees Matthews
2

Goldman & Zwillinger PLLC, Scottsdale

By Scott H. Zwillinger, Scott Griffiths 

Counsel for Defendants/Appellees Plattner

MEMORANDUM DECISION

Presiding Judge Diane M. Johnsen delivered the decision of the Court, in 

which Judge Randall M. Howe and Judge Andrew W. Gould joined.

J O H N S E N, Judge:

¶1 Johnny Johnson, Anna Johnson, Diana Johnson and the Estate 

of Rudy Johnson (collectively, "the Johnsons") challenge the superior court's 

entry of summary judgment dismissing their claims against actuaries and 

attorneys alleging damage caused to a pension plan maintained for 

employees of Bill Johnson's Restaurant, Inc. ("BJR"). We affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 The Johnsons are shareholders of BJR and beneficiaries of 

BJR's pension plan. BJR filed for Chapter 11 bankruptcy protection in 2011. 

About a year later, while the bankruptcy case was pending, the Johnsons

sued Steve Matthews and his firm of actuaries, Matthews, Gold, Kennedy 

& Snow; and Leslie A. Plattner and her law firm, Plattner, Schneidman & 

Schneider, in superior court ("First State Court Complaint"). The Johnsons

alleged the defendants were liable for negligence, breach of fiduciary duty

and fraud that caused harm to the BJR Pension Plan.

¶3 The bankruptcy court confirmed a proposed reorganization 

plan for BJR on May 1, 2013. The plan established a trust (the "CT Trust")

that would receive, among other assets, BJR's causes of action against all 

"Former Professionals" for BJR. The plan defined "Former Professionals" to 

include, by name, the various defendants in the First State Court 

Complaint. Two days later, BJR filed an adversary complaint against the 

Matthews and Plattner parties and others in the bankruptcy case. BJR later 

amended its adversary complaint to add CT Trust as a plaintiff.

¶4 Some two months later, Rudy and Johnny Johnson filed 

another superior court complaint (the "Second State Court Complaint"). 

The defendants named in the Second State Court Complaint are not parties 

to this appeal. The Second State Court Complaint alleged some facts 
JOHNSON v. MATTHEWS, et al.

Decision of the Court

3

relating to the termination of the Pension Plan, but primarily alleged 

wrongdoing that caused damage to BJR.

¶5 BJR and CT Trust then moved the bankruptcy court to stay

the First and Second State Court Complaints, arguing the state-court cases 

overlapped and interfered with the adversary complaint. BJR and CT Trust 

also asked the bankruptcy court to permanently enjoin the Johnsons from 

pursuing their claims, alleging that the Johnsons were trying to "circumvent 

the [reorganization] Plan."

¶6 The bankruptcy court issued a Memorandum Decision 

granting the motion, holding that the Johnsons, as equity holders in BJR,

were bound by the terms of BJR's reorganization plan. The bankruptcy 

court specifically addressed the Johnsons' claims in the First State Court 

Complaint and ruled that all of them are the property of the CT Trust. The 

court held that its order confirming the plan barred the Johnsons "from 

bringing their claims against former professionals and shareholders, except 

for the claim of emotional distress that is asserted in the Second State Court 

Complaint."

1 The bankruptcy court then issued a follow-up order (the 

"Clarifying Order") stating that:

as a result of the Order of Confirmation, Rudy Johnson and 

Johnny Johnson are barred from bringing their claims against 

former professionals . . . of the Debtor, except for the claim of 

emotional distress, which is stayed . . . .

¶7 The Johnsons appealed the Memorandum Decision to federal 

district court. They later dismissed their appeal, explaining the parties had 

"reached an agreement in this matter." The district court dismissed the 

appeal with prejudice without reaching the merits.

¶8 Shortly thereafter, the defendants in the First State Court 

Complaint moved for summary judgment, arguing the court should accord

full faith and credit to the bankruptcy court's Memorandum Decision and 

Clarifying Order. The superior court granted the motion. The Johnsons

timely appealed; we have jurisdiction pursuant to Arizona Revised Statutes 

("A.R.S.") section 12-2101(A)(1) (2016).

2

 

1 The Johnsons' emotional distress claim is not at issue in this appeal.

2 Absent material revision after the relevant date, we cite a statute's 

current version.
JOHNSON v. MATTHEWS, et al.

Decision of the Court

4

DISCUSSION

¶9 In reviewing a grant of summary judgment based on 

undisputed facts, we determine whether the superior court correctly 

applied the substantive law to those facts. Mitchell v. Gamble, 207 Ariz. 364, 

368, ¶ 8 (App. 2004).

¶10 A bankruptcy court's final order generally is entitled to full 

faith and credit, and parties may not use a state court to re-litigate the merits 

of such an order. Forty-Four Hundred E. Broadway Co. v. 4400 E. Broadway, 

135 Ariz. 265, 267 (App. 1982). As noted above, the bankruptcy court ruled 

that BJR's reorganization plan precluded the Johnsons "from bringing . . . 

claims against former professionals" of BJR, including the defendants in the 

First State Court Complaint, because the plan gave those claims to CT Trust 

to pursue.

¶11 The Johnsons argue the bankruptcy court's Memorandum 

Decision and Clarifying Order are not entitled to full faith and credit 

because they did not affect "core proceedings" under the Bankruptcy Code. 

See 28 U.S.C. § 157(b) (2016). The Memorandum Decision and Clarifying 

Order, however, clearly affected core proceedings over which the

bankruptcy court has exclusive jurisdiction. In re Birting Fisheries, Inc., 300 

B.R. 489, 499 (B.A.P. 9th Cir. 2003); see also In re McGhan, 288 F.3d 1172, 1179 

(9th Cir. 2002) (federal law "bars state court intrusions on all . . . 'core'

bankruptcy proceedings") (quoting In re Gruntz, 202 F.3d 1074, 1082 (9th 

Cir. 2000)).

¶12 Confirmation of a reorganization plan is a core proceeding. 

28 U.S.C. § 157(b)(2)(L). "Once a bankruptcy plan is confirmed, it is binding 

on all parties and all questions that could have been raised pertaining to the 

plan are entitled to res judicata effect." Trulis v. Barton, 107 F.3d 685, 691 (9th 

Cir. 1995). In the Memorandum Decision and Clarifying Order, the 

bankruptcy court reviewed BJR's reorganization plan, the First State Court 

Complaint and the Second State Court Complaint, and found that the 

claims the Johnsons sought to raise in state court had been assigned to CT 

Trust. This conclusion is not subject to challenge in state court. See In re 

Pac. Gas & Elec. Co., 281 B.R. 1, 9 (Bankr. N.D. Cal. 2002) ("[M]atters 

concerning confirmation of a plan of reorganization . . . go to the very 

essence of a bankruptcy court's original and exclusive jurisdiction . . . and 

. . . plan confirmation is within the protected sphere of matters that the 

Ninth Circuit has held to be free from second-guessing by state courts.") 

(quotation omitted).
JOHNSON v. MATTHEWS, et al.

Decision of the Court

5

¶13 The Johnsons' means to challenge the bankruptcy court's 

decision was a direct appeal to the district court. When they failed to 

pursue their appeal, the bankruptcy court's decision became final. See In re 

Pardee, 193 F.3d 1083, 1086 (9th Cir. 1999) ("Where a 'creditor fails to protect 

its interests by . . . appealing the confirmation order, it cannot later complain 

about a certain provision contained in a confirmed plan' by bringing a 

collateral attack in another court.").

¶14 The Johnsons argue the superior court erred by granting 

summary judgment without deciding whether their claims are direct or 

derivative.3 The superior court, however, did not need to address the issue. 

In the Memorandum Decision, the bankruptcy court found that the First 

and Second State Court Complaints stated "derivative claims that are

property of the [bankruptcy] estate." As to that issue, the superior court 

properly deferred to the bankruptcy court. A bankruptcy court order 

"constitutes a judgment which is not subject to collateral attack . . . unless 

it affirmatively appears from the record that the bankruptcy court lacked 

jurisdiction." Rackers v. Nicholson, 89 Ariz. 397, 400 (1961).

¶15 The Matthews and Plattner parties request attorney's fees 

under A.R.S. § 12-349(A) (2016). It appears they contend the Johnsons filed

this appeal without substantial justification. A.R.S. § 12-349(A)(1). An 

appeal lacks substantial justification if it "is groundless and is not made in 

good faith." A.R.S. § 12–349(F). These elements must be established by a 

preponderance of the evidence. Johnson v. Mohave County, 206 Ariz. 330, 

334, ¶ 16 (App. 2003). Even if we were to accept the contention that this 

appeal was frivolous, the record does not show that the Johnsons filed it in 

bad faith. We therefore decline to award fees under § 12-349(A)(1).

 

3 Generally, a claim is derivative "if the gravamen of the complaint is 

injury to the corporation, or to the whole body of its stock or property 

without any severance or distribution among individual holders, or if it 

seeks to recover assets for the corporation or to prevent the dissipation of 

its assets." Albers v. Edelson Tech. Partners L.P., 201 Ariz. 47, 52, ¶ 17 (App. 

2001).
JOHNSON v. MATTHEWS, et al.

Decision of the Court

6

CONCLUSION

¶16 We affirm the superior court's entry of summary judgment

and award the Matthews and Plattner parties their costs of appeal

contingent upon their compliance with Arizona Rule of Civil Appellate 

Procedure 21.