Court Opinion

ID: 9928219
Source: CourtListenerOpinion
Date Created: 2024-01-31 01:00:43.590532+00
Date Added: 2024-06-11T09:51:44.217920
License: Public Domain

Case: 23-40477        Document: 00517050311             Page: 1      Date Filed: 01/30/2024

             United States Court of Appeals
                  for the Fifth Circuit                                        United States Court of Appeals
                                                                                        Fifth Circuit

                                     ____________                                      FILED
                                                                                January 30, 2024
                                      No. 23-40477                               Lyle W. Cayce
                                    Summary Calendar                                  Clerk
                                    ____________

   In the Matter of John Gilani,

                                                                                      Debtor,

   John Bari Gilani,

                                                                                Appellant,

                                            versus

   Wynn Las Vegas, L.L.C.,

                                                                                     Appellee.
                     ______________________________

                     Appeal from the United States District Court
                          for the Eastern District of Texas
                               USDC No. 4:22-CV-782
                     ______________________________

   Before Davis, Ho, and Ramirez, Circuit Judges.
   Per Curiam:*

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-40477        Document: 00517050311        Page: 2   Date Filed: 01/30/2024

                                    No. 23-40477

          Appellant, John Bari Gilani, appeals the district court’s judgment that
   affirmed the bankruptcy court’s order denying Gilani’s motion to enforce
   permanent injunction. For the reasons set forth below, we AFFIRM.
                               I. BACKGROUND
          On or about December 9, 2009, the State of Nevada commenced a
   criminal action against Gilani, charging him with multiple felonies including
   issuance of a check without sufficient funds. Approximately three and a half
   years later (on June 3, 2013), Gilani entered into a written plea agreement
   regarding the charges. Prior to doing so, Gilani filed in 2011 a voluntary
   petition for relief under Chapter 7 of the Bankruptcy Code. The bankruptcy
   court issued an order granting Gilani discharge under the Bankruptcy Code
   on June 1, 2011.
          The bankruptcy schedules identified Appellee, Wynn Las Vegas,
   L.L.C. (“Wynn”), as the holder of a general unsecured claim against Gilani
   in the amount of $250,000, in connection with a civil judgment. The
   schedule additionally identified a breach of contract action Wynn filed in
   2008 against Gilani in state district court with the status of “closed.” Wynn
   acknowledges that any general unsecured claim related to the 2008 pre-
   petition litigation was likely discharged in the bankruptcy case.
          In the 2013 plea agreement, Gilani pled guilty to passing thirty checks
   with the intent to defraud between August and October 2008, totaling
   $735,000, made payable to various hotels and casinos in Las Vegas, including
   Wynn, when he had insufficient money or credit. The agreement included a
   stipulation “to stay adjudication” for five years and that, if Gilani paid
   $100,000 during that time period, he could “withdraw his plea to the felony
   and enter a plea to a gross misdemeanor (Attempt NSF).” The plea
   agreement further provided as a “consequence of the plea” that, “if
   appropriate, [Gilani] will be ordered to make restitution to the victims of the

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                                      No. 23-40477

   offense(s) to which [he was] pleading guilty and to the victims of any related
   offense which is being dismissed or not prosecuted pursuant to th[e]
   agreement.”
          The state court documents in the record on appeal show that Gilani
   was unable to pay $100,000 within five years, and that in December 2019, he
   requested two more years to pay the amount. The record does not indicate
   whether Gilani ultimately paid a total of $100,000. But, on September 4,
   2020, the state court rendered judgment convicting Gilani only of a gross
   misdemeanor charge1 and sentenced him to one day in a detention center
   with one day credit for time served. Additionally, the judgment of conviction
   ordered substantial amounts of restitution payable to the various hotels and
   casinos listed in the indictment. As relevant here, the judgment ordered
   restitution by Gilani payable to Wynn in the amount of $218,123.83.
          On January 21, 2022, Wynn filed a petition in state court to enforce
   the restitution ordered in the September 4, 2020 judgment, pursuant to
   Nevada Revised Statute § 176.275.              That statute provides that “[a]n
   independent action to enforce a judgment which requires a defendant to pay
   restitution may be commenced at any time.”2 Gilani opposed Wynn’s
   petition, arguing that Wynn was seeking to enforce “casino markers” that
   were discharged in his 2011 bankruptcy proceeding. Gilani further asserted
   that “[t]he automatic stay” imposed by the bankruptcy court was “still in
   place” and that Wynn, although notified of the bankruptcy proceeding, had

          _____________________
          1
              The judgment convicts Gilani of “ATTEMPT DRAWING AND PASSING A
   CHECK WITHOUT SUFFICIENT FUNDS IN DRAWEE BANK WITH INTENT TO
   DEFRAUD PRESUMPTIONS OF INTENT TO DEFRAUD (Gross Misdemeanor) in
   violation of NRS 205.130.3.”
          2
              Nev. Rev. Stat. § 176.275(3).

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   never filed an adversary proceeding to dispute the discharge of the gambling
   debts.
            On February 18, 2022, over Gilani’s opposition, the state district
   court granted Wynn’s petition to enforce the judgment requiring Gilani to
   pay restitution to Wynn in the amount of $218,123.83. In doing so, the court
   relied on the Supreme Court’s decision in Kelly v. Robinson,3 in which the
   Court held that 11 U.S.C. § 523(a)(7)4 of the Bankruptcy Code “preserves
   from discharge any condition a state criminal court imposes as part of a
   criminal sentence.”5 The court determined that therefore Gilani could not
   legally claim that his criminal restitution imposed as part of his criminal
   sentence was discharged in the 2011 bankruptcy proceedings. The court
   further noted that Gilani entered into the plea agreement two years after the
   bankruptcy filing and discharge; therefore, the restitution obligation noted in
   the plea agreement was not encompassed by the bankruptcy automatic stay
   or permanent injunction.
            Gilani did not seek state appellate review of the judgment. Instead, on
   March 2, 2022, he filed a motion to reopen his bankruptcy proceeding for the
   purpose of filing a motion to enforce the permanent injunction he contended
   the bankruptcy court authorized in its order of discharge. Gilani asserted that
   Wynn was attempting to collect on an obligation that had been discharged
   and, in doing so, Wynn was violating the permanent injunction. On March
            _____________________
            3
                479 U.S. 36 (1986).
            4
             This statute lists “exceptions to discharge” and provides that a bankruptcy
   discharge order does not discharge debts “for a fine, penalty, or forfeiture payable to and
   for the benefit of a governmental unit, and is not compensation for actual pecuniary loss.”
   § 523(a)(7).
            5
              Kelly, 479 U.S. at 50; see id. at 53 (holding that restitution orders “necessarily
   consider[] the penal and rehabilitative interests of the State” and that “[t]hose interests
   are sufficient to place restitution orders within the meaning of § 523(a)(7)”).

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                                           No. 23-40477

   15, 2022, the bankruptcy court granted Gilani’s motion to reopen his
   bankruptcy proceeding.
          Gilani then filed with the bankruptcy court a motion seeking to
   enforce the permanent injunction against Wynn. On June 22, 2022, the
   bankruptcy court heard argument on the motion and denied it without
   prejudice. The bankruptcy court stated that it was denying the motion
   because Gilani’s defense to Wynn’s claim that the ordered restitution was
   discharged had already been presented to and decided by the state court, and
   the bankruptcy court could not “sit as an Appellate Court to alter that
   decision.” Although not specifically so stating, the bankruptcy court’s
   reasons were consistent with application of the Rooker-Feldman6 doctrine,
   which prohibits a lower federal court from reviewing state-court judgments
   rendered before the federal proceeding has commenced. Although Gilani
   filed a motion for reconsideration arguing that his case fell within an
   exception to the doctrine, the bankruptcy court denied the motion. Gilani
   timely appealed to the district court, which affirmed the bankruptcy court’s
   judgment. He then timely appealed to this Court.
                                      II. DISCUSSION
          We review de novo the district court’s dismissal for lack of subject
   matter jurisdiction because the Rooker-Feldman doctrine applies.7                    As
   explained by the Supreme Court, the doctrine applies to “cases brought by
   state-court losers complaining of injuries caused by state-court judgments
   rendered before the district court proceedings commenced and inviting

          _____________________
          6
            The doctrine derives its name from Rooker v. Fid. Tr. Co., 263 U.S. 413 (1923),
   and D.C. Ct. of Appeals v. Feldman, 460 U.S. 462 (1983).
          7
              See Miller v. Dunn, 35 F.4th 1007, 1009 (5th Cir. 2022).

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                                           No. 23-40477

   district court review and rejection of those judgments.”8 The doctrine is
   based on the principle that lower federal courts, unlike the Supreme Court,
   “lack the requisite appellate authority . . . to reverse or modify a state-court
   judgment.”9
          As detailed above, this case presents the “paradigm” Rooker-Feldman
   situation: the losing party in state court thereafter commenced a proceeding
   in federal court, complaining of injury by the state-court judgment and
   seeking review and rejection of it by the federal court.10 Specifically, the
   Nevada district court (over Gilani’s opposition) granted Wynn’s petition to
   enforce the judgment requiring Gilani to pay restitution to Wynn in the
   amount of $218,123.83. After Gilani’s loss, he repaired to bankruptcy court
   complaining that Wynn’s state-court proceeding was “an attempt to collect
   on the same debt that was listed and then discharged by” the bankruptcy
   court. In opposing Gilani’s motion, Wynn pointed out that its efforts to
   collect restitution had been “authorized by the Nevada District Court.” At
   the hearing on Gilani’s motion, the bankruptcy court found determinative
   “that this issue [i.e., whether the restitution obligation had been discharged
   in bankruptcy] was addressed to the State Court and decided by the State
   Court,” and that the bankruptcy court could “not sit as an Appellate Court
   to alter that decision.”
          On appeal to this Court, Gilani argues that the Rooker-Feldman
   doctrine is inapplicable because it only applies when a state-court judgment
   is “final,” and the judgment in this case was not final when the bankruptcy
   court reopened the bankruptcy proceeding because the time for appealing the

          _____________________
          8
              Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).
          9
              Id. at 284 (internal quotation marks and citation omitted).
          10
               Id. at 291-93.

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                                            No. 23-40477

   state-court judgment had not expired.                  However, as the district court
   determined, Gilani never raised this argument before the bankruptcy court,
   even in his motion to reconsider. “It is well established that we do not
   consider arguments or claims not presented to the bankruptcy court.”11
           Gilani additionally argues that the Rooker-Feldman doctrine does not
   apply because the state-court judgment is void, and the doctrine does not
   prohibit review of void judgments. He asserts the state-court judgment is
   void under 11 U.S.C. § 524(a)(1) of the Bankruptcy Code, which provides
   that a bankruptcy discharge “voids any judgment at any time obtained to the
   extent that such judgment is a determination of the personal liability of the
   debtor with respect to any debt discharged.” But, in this case, the state court
   specifically determined that the restitution payable to Wynn fell under
   § 523(a)(7) of the Bankruptcy Code, which excepts restitution orders from
   bankruptcy discharge orders.12
           As the district court properly noted, it does not matter whether a
   federal district or appellate court agrees or disagrees with the state-court
   judgment herein because even if the state court erred, “the judgment is not
   void [and must] be reviewed and corrected by the appropriate state appellate
   court.”13 In effect, Gilani’s “void judgment” argument challenges the

           _____________________
           11
                 Matter of Gilchrist, 891 F.2d 559, 561 (5th Cir. 1990) (citation omitted); see also
   Ctr. for Biological Diversity v. EPA, 937 F.3d 533, 542 (5th Cir. 2019) (“Arguments in favor
   of . . . jurisdiction can be forfeited or waived.” (citations omitted)).
           12
              See Kelly, 479 U.S. at 53 (holding that restitution orders “necessarily consider[]
   the penal and rehabilitative interests of the State” and that “[t]hose interests are sufficient
   to place restitution orders within the meaning of § 523(a)(7)”).
           13
                Weekly v. Morrow, 204 F.3d 613, 615 (5th Cir. 2000) (citation omitted).

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   merits of the state-court judgment, which we are precluded from reviewing.
   Therefore, Gilani’s argument has no merit.14
                                III. CONCLUSION
          For the above reasons, we agree with the district court that the
   bankruptcy court correctly denied without prejudice Gilani’s motion to
   enforce permanent injunction for lack of jurisdiction under the Rooker-
   Feldman. Therefore, the district court’s judgment is AFFIRMED.

          _____________________
          14
              The remainder of Gilani’s arguments challenge the state-court judgment’s
   determination that the restitution payable to Wynn was excepted from the bankruptcy
   discharge order. As explained, we are precluded from reviewing those arguments under
   the Rooker-Feldman doctrine.

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