Court Opinion

ID: 9373953
Source: CourtListenerOpinion
Date Created: 2023-02-22 16:10:44.372998+00
Date Added: 2024-06-11T17:16:49.377966
License: Public Domain

FILED
                                                                                  JUN 7 2022
                          NOT FOR PUBLICATION                               SUSAN M. SPRAUL, CLERK
                                                                              U.S. BKCY. APP. PANEL
                                                                              OF THE NINTH CIRCUIT
          UNITED STATES BANKRUPTCY APPELLATE PANEL
                    OF THE NINTH CIRCUIT

 In re:                                             BAP No. OR-21-1069-FBS
 PETER SZANTO,
              Debtor.                               Bk. No. 3:16-bk-33185-pcm7

 PETER SZANTO,
              Appellant,
 v.                                                 MEMORANDUM*
 DANITZA HON; DANNY ONG;
 CLAUDIA CHAN; YAM WERN-JHIEN;
 RAJAN & TANN SINGAPORE LLP,
              Appellees.

               Appeal from the United States Bankruptcy Court
                          for the District of Oregon
               Peter C. McKittrick, Bankruptcy Judge, Presiding

Before: FARIS, BRAND, and SPRAKER, Bankruptcy Judges.

                                 INTRODUCTION

      Chapter 71 debtor Peter Szanto challenges the bankruptcy court’s

order denying his motion to hold the chapter 7 trustee’s Singapore-based

      *
        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.
      Unless specified otherwise, all chapter and section references are to the
      1

Bankruptcy Code, 11 U.S.C. §§ 101-1532.
special counsel in contempt of court. He says that they violated

Singaporean law and unlawfully practiced law in Oregon.

      Mr. Szanto’s arguments are frivolous. We AFFIRM.

                                        FACTS

      The bankruptcy court ordered Mr. Szanto not to transfer any

property of the estate. He violated this order by transferring hundreds of

thousands of dollars to foreign bank accounts held by HSBC Bank

Australia Ltd. and HSBC Bank Singapore Ltd. The bankruptcy court held

Mr. Szanto in contempt of court and directed him to cooperate with the

chapter 7 trustee regarding turnover of his estate’s assets.

      The bankruptcy court approved the trustee’s application to employ

the Singapore-based law firm of Rajah & Tann Singapore LLP and its

attorneys Danny Ong, Yam Wern-Jhien, and Danitza Hon (collectively,

“Singapore Counsel”) to “[p]repare any and all documents necessary to

domesticate and/or register the court’s [contempt] order in Singapore for

turnover of records and any and all funds constituting property of the

bankruptcy estate held by HSBC Singapore Bank [sic].” Mr. Szanto’s efforts

to vacate the employment order were unsuccessful.2

      The trustee sought interim compensation for Singapore Counsel. In

response, Mr. Szanto filed a motion (“Contempt Motion”) requesting that

the bankruptcy court hold Singapore Counsel in contempt under § 105(a)

      2
        Meanwhile, the bankruptcy court denied Mr. Szanto his discharge pursuant to
§§ 727(a)(2), (4), and (6). We affirmed, and Mr. Szanto has appealed to the Ninth Circuit.
                                            2
and award him $1 million for physical and mental anguish. He argued that

Singapore Counsel violated Singaporean law by unlawfully attempting to

domesticate the bankruptcy court’s order. He further alleged that they

violated “Anglo Saxon Common Law” because they did not serve him with

any document. Finally, he argued that Singapore Counsel unlawfully

practiced law in the state of Oregon.

     The bankruptcy court issued an order (“Contempt Order”) denying

Mr. Szanto’s motion for “at least” four reasons: (1) civil contempt was

inapplicable because Mr. Szanto had not identified any bankruptcy court

order that Singapore Counsel had violated; (2) the arguments against

Singapore Counsel’s compensation should be raised in opposition to the

trustee’s pending application for compensation, not in a motion for

contempt; (3) the bankruptcy court had no authority to review allegations

of Singapore Counsel’s impropriety in the Singapore high court

proceedings; and (4) Singapore Counsel were not engaged in the

unauthorized practice of law in Oregon.

     Mr. Szanto timely appealed the Contempt Order.

                             JURISDICTION

     The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

157(b)(2)(A). We have jurisdiction under 28 U.S.C. § 158 to hear an appeal

from the Contempt Order. See Humphreys v. EMC Mortg. Corp. (In re Mack),

BAP Nos. CC-06-1123-MoDK, CC-06-1242-MoDK, 2007 WL 7545163, at *3

(9th Cir. BAP Mar. 28, 2007) (“[W]here a contempt order disposes of the

                                        3
only matter before the court, the order is appealable as a final judgment.”).

                                       ISSUE

      Whether the bankruptcy court abused its discretion in denying the

Contempt Motion.

                         STANDARD OF REVIEW

      We review for an abuse of discretion the bankruptcy court’s decision

whether to hold a party in civil contempt. Knupfer v. Lindblade (In re Dyer),

322 F.3d 1178, 1191 (9th Cir. 2003).

      To determine whether the bankruptcy court has abused its discretion,

we conduct a two-step inquiry: (1) we review de novo whether the

bankruptcy court “identified the correct legal rule to apply to the relief

requested” and (2) if it did, we consider whether the bankruptcy court's

application of the legal standard was illogical, implausible, or without

support in inferences that may be drawn from the facts in the record.

United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).

                               DISCUSSION

A.    Mr. Szanto’s opening brief completely ignores the order on appeal.

      Mr. Szanto’s opening brief has nothing to do with the Contempt

Order. His failure to raise any relevant argument in his opening brief is an

independently sufficient ground to affirm. Smith v. Marsh, 194 F.3d 1045,

1052 (9th Cir. 1999) (“[O]n appeal, arguments not raised by a party in its

opening brief are deemed waived.”); Wilcox v. Comm’r of Internal Rev., 848

F.2d 1007, 1008 n.2 (9th Cir. 1988) (applying rule to pro se appellant).

                                         4
      Instead, the arguments in the opening brief relate to Mr. Szanto’s

appeal from a different order. He says that the document that he chose to

call his opening brief was not really a complete opening brief in this

appeal, but rather was a “supplemental document” that he offered to

inform this Panel of the background of his grievances. This argument

makes no sense: if it is correct, Mr. Szanto has never filed an opening brief

in this appeal; and it does not explain why he called the supposed

“supplemental document” his opening brief.

      Mr. Szanto raised arguments relevant to this appeal for the first time

in his reply brief. This deprived Singapore Counsel of the opportunity to

respond. Because he failed to raise those arguments in his opening brief, he

has waived them.

B.    The bankruptcy court did not err in denying the Contempt Motion.

      Even if we were to consider the arguments raised in the reply brief,

we would affirm. None of Mr. Szanto’s arguments comes close to

demonstrating reversible error.

      To prevail on his Contempt Motion, Mr. Szanto had the burden of

showing that Singapore Counsel violated a specific and definite order of

the bankruptcy court. “The standard for finding a party in civil contempt is

well settled: The moving party has the burden of showing by clear and

convincing evidence that the contemnors violated a specific and definite

order of the court.” In re Dyer, 322 F.3d at 1190-91 (citation omitted)

(emphasis added).

                                       5
       Ignoring binding Ninth Circuit precedent, Mr. Szanto wrongly

argues that civil contempt does not require that a party violate a court

order. Rather, he contends that courts sometimes cite lawyers and parties

for contempt based on improper behavior in court. His only authority is a

supposed Black’s Law Dictionary definition of contempt as “willful

disregard of a public authority.” 3 But this argument ignores the crucial

distinction “between contempts that occur in a court’s presence (direct

contempts) and those that occur outside the courtroom (indirect

contempts).” F.J. Hanshaw Enters., Inc. v. Emerald River Dev., Inc., 244 F.3d

1128, 1138 (9th Cir. 2001). “[D]irect contempts in the presence of the court

traditionally have been subject to summary adjudication, to maintain order

in the courtroom and the integrity of the trial process in the face of an

actual obstruction of justice.” Int’l Union, United Mine Workers of Am. v.

Bagwell, 512 U.S. 821, 832 (1994) (cleaned up). The conduct of which

Mr. Szanto complains did not occur in the bankruptcy court’s presence.

The bankruptcy court could not sanction Singapore Counsel for alleged

acts that were not committed in the court’s presence and where they did

not violate a specific and definite order of the court.

       The only order on which Mr. Szanto relies is the order authorizing

       3
         While Black’s Law Dictionary defines contempt in general as “conduct that
defies the authority or dignity of a court or legislature,” it defines “civil contempt” as
“[t]he failure to obey a court order that was issued for another party’s benefit.”
Contempt, BLACK’S LAW DICTIONARY (11th ed. 2019). Thus, if anything, Mr. Szanto’s
reliance on Black’s Law Dictionary supports the Contempt Order.
                                              6
the trustee to retain Singapore Counsel. He argues that Singapore Counsel

disobeyed the employment order by violating Singaporean law and “Anglo

Saxon Common Law.” This argument suffers from two fatal flaws. First,

contrary to Mr. Szanto’s arguments, Singapore Counsel did not violate any

applicable law. As far as we can tell from the limited record, the Singapore

court largely ruled in favor of the trustee. Second, the employment order

did not “specific[ally] and definite[ly]” require Singapore Counsel to

conform to any law. The trustee employed Singapore Counsel to

domesticate the contempt order issued against Mr. Szanto and to help

recover estate property located in Singapore. Singapore Counsel did just

that; they did not violate any order of the bankruptcy court.

      There are many grounds on which an attorney can be sanctioned for

violating applicable law, but a civil contempt citation based on an order

approving the attorney’s retention is not one of them. Mr. Szanto has failed

to identify any specific and definite order that Singapore Counsel violated.

      We reject Mr. Szanto’s argument that Singapore Counsel unlawfully

practiced law in Oregon. Singapore Counsel did not represent a client

before the bankruptcy court. See Or. State Bar v. Smith, 942 P.2d 793, 800

(Or. App. 1997) (holding that, at minimum, “the ‘practice of law’ means the

exercise of professional judgment in applying legal principles to address

another person’s individualized needs through analysis, advice, or other

assistance” (emphasis added)). All of the work of Singapore Counsel was

performed in Singapore, before Singapore courts, on matters of

                                      7
Singaporean law. The only arguable “appearance” that Singapore Counsel

made in the Oregon bankruptcy court was the application for

compensation, but that application was made for the benefit of Singapore

Counsel, and not for “another person.” 4

      Finally, Mr. Szanto raises a host of other arguments including the

bankruptcy judge’s abuse of power and personal animosity toward him

and a conspiracy to loot his assets and murder him and his wife. These

arguments are baseless and do not support any reversible error.

                                  CONCLUSION

      The bankruptcy court did not abuse its discretion in denying

Mr. Szanto’s Contempt Motion. We AFFIRM.

      4
        At oral argument, Mr. Szanto speculated that Singapore Counsel might not
even be licensed attorneys. This argument is of no moment. It does not matter whether
Singapore Counsel is licensed in Oregon because they did not practice law in Oregon.
The courts of Singapore, and not the bankruptcy court in Oregon, can and should
enforce any applicable Singaporean licensure requirements.
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