Court Opinion

ID: 4264021
Source: CourtListenerOpinion
Date Created: 2018-04-13 22:00:40.140836+00
Date Added: 2024-06-11T14:30:38.211795
License: Public Domain

FILED
                                                           APR 13 2018
                                                       SUSAN M. SPRAUL, CLERK
 1                        NOT FOR PUBLICATION            U.S. BKCY. APP. PANEL
                                                         OF THE NINTH CIRCUIT
 2
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
                              OF THE NINTH CIRCUIT
 4
 5   In re:                        )     BAP No.      AZ-17-1141-BLKu
                                   )
 6   EDWARD D. FITZHUGH,           )     Bk. No.      2:13-bk-09235-PS
                                   )
 7                  Debtor.        )     Adv. No.     2:15-ap-00101-PS
                                   )
 8                                 )
     EDWARD D. FITZHUGH,           )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )     M E M O R A N D U M1
11                                 )
     DAVID A. BIRDSELL, Chapter 7 )
12   Trustee,                      )
                                   )
13                  Appellee.      )
     ______________________________)
14
                 Argued and Submitted on February 23, 2018,
15                           at Phoenix, Arizona
16                           Filed - April 13, 2018
17              Appeal from the United States Bankruptcy Court
                          for the District of Arizona
18
               Honorable Paul Sala, Bankruptcy Judge, Presiding
19
20   Appearances:    Appellant Edward D. Fitzhugh argued pro se; Terry
                     A. Dake of Terry A. Dake, Ltd. argued for appellee
21                   David A. Birdsell, Chapter 7 Trustee.
22
     Before:   BRAND, LAFFERTY and KURTZ, Bankruptcy Judges.
23
24
25
26
          1
             This disposition is not appropriate for publication.
27   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
28   Cir. BAP Rule 8024-1.
 1        Appellant Edward D. Fitzhugh appeals an order revoking his
 2   chapter 72 discharge under § 727(d)(1) and (d)(2).    Because the
 3   bankruptcy court applied an incorrect standard of law, we VACATE
 4   and REMAND the order revoking discharge.   However, we AFFIRM the
 5   court's order denying Fitzhugh's motion to continue trial and to
 6   extend discovery deadlines.
 7             I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY3
 8   A.   Events leading to the discharge revocation complaint
 9        Fitzhugh, a personal injury lawyer, filed his chapter 7
10   bankruptcy case on May 30, 2013.   David A. Birdsell was appointed
11   as chapter 7 trustee.   Fitzhugh utilized a document preparer to
12   assist him in preparing his bankruptcy petition.     He maintains
13   that the preparer made numerous mistakes in his petition.
14        Fitzhugh did not disclose in his initial schedules or
15   statement of financial affairs that he was owed any money by his
16   clients, or that he had any pending cases in which he might
17   receive or be entitled to receive a contingency fee.    He also did
18   not disclose any ownership interest in any corporations or LLCs.
19
20
          2
             Unless specified otherwise, all chapter,   code and rule
21   references are to the Bankruptcy Code, 11 U.S.C.   §§ 101-1532, and
     the Federal Rules of Bankruptcy Procedure, Rules   1001-9037. The
22   Federal Rules of Civil Procedure are referred to   as "Civil Rules."
23        3
             Fitzhugh failed to file any record other than the relevant
     transcripts. We could summarily affirm on that basis. Ehrenberg
24   v. Cal. St. Univ. (In re Beachport Entm’t), 396 F.3d 1083, 1086
     (9th Cir. 2005). However, considering the gravity of the matter
25   and that the bankruptcy court applied an incorrect standard of law
     to revoke Fitzhugh's discharge, we will review the merits of this
26   appeal. To do that, we had to review documents on the bankruptcy
     court's electronic docket, of which we take judicial notice. See
27   Franklin High Yield Tax–Free Income Fund v. City of Stockton, Cal.
     (In re City of Stockton, Cal.), 542 B.R. 261, 265 n.2 (9th Cir.
28   BAP 2015).

                                     -2-
 1   In Item 4 of his SOFA, Fitzhugh did not disclose any lawsuits in
 2   which he was the plaintiff.
 3        The bar date for objecting to Fitzhugh's discharge was
 4   September 3, 2013.    No timely objections being filed, Fitzhugh
 5   received a chapter 7 discharge on May 27, 2014.   One apparent
 6   reason for the delay in entering discharge was Fitzhugh's delay in
 7   filing his Financial Management Course Certificate.
 8        The following items were at issue in the discharge revocation
 9   action:
10        Venezia Claim
11        In February 2009, Fitzhugh entered into a 40% contingency fee
12   agreement for the prosecution of a personal injury claim for
13   Richard Venezia.   A lawsuit was filed in March 2009 in state
14   court.    When Fitzhugh was suspended from the practice of law in
15   March 2013, another attorney took over the litigation on a pro
16   bono basis.
17        Shortly after Fitzhugh's bankruptcy filing, the Venezia
18   matter was settled.   Based on the settlement amount, Fitzhugh
19   asserted the right to a $360,000 fee and a right to recover costs
20   of $180,000 (Venezia Claim).   In a letter from Venezia's current
21   attorney to Fitzhugh seeking to resolve Fitzhugh's claim for fees
22   and costs, the attorney specifically addressed Fitzhugh's
23   bankruptcy filing and the need to resolve any issues regarding the
24   interests of the bankruptcy estate before he would authorize the
25   release of any settlement funds.   In response, Fitzhugh advised
26   the attorney that his bankruptcy "was a personal bankruptcy," and
27   that the fees and costs he was seeking to collect belonged to his
28   firm, "a P.C."   Actually, at that time, and when Fitzhugh entered

                                      -3-
 1   into the contingency fee agreement with Venezia, Fitzhugh was
 2   operating his law practice as a sole proprietorship.   He did,
 3   however, create an LLC on October 21, 2013, which was five months
 4   after the petition date.
 5        Trustee learned of Fitzhugh's pursuit of the Venezia Claim on
 6   October 26, 2013.   Thereafter, counsel for Trustee requested that
 7   Fitzhugh provide him with information about the Venezia Claim,
 8   which was not disclosed in the initial schedules.   Fitzhugh
 9   advised Trustee's counsel that it was his LLC that was the
10   claimant for the fees, not him individually, and that his opposing
11   counsel had incorrectly claimed that the funds had to be turned
12   over to the bankruptcy court.
13        Three months before Fitzhugh's discharge, Trustee filed a
14   motion to approve compromise of the Venezia Claim for $300,000
15   payable to the estate.   Fitzhugh objected to the settlement, and
16   at the same time sought to dismiss his chapter 7 case, maintaining
17   that he was the best person to pursue the Venezia Claim and that
18   he would deal with his creditors outside of bankruptcy.   The
19   bankruptcy court denied the dismissal motion; it approved
20   Trustee's settlement of the Venezia Claim on March 21, 2014.
21   Fitzhugh later amended his schedules to identify the Venezia
22   Claim, which he then sought to exempt as wages.
23        Gilcrease/Whipp Claim
24        About one month prior to his bankruptcy filing, Fitzhugh
25   filed a fee arbitration claim with the State Bar of Arizona,
26   asserting that attorney Glynn Gilcrease, Jr. owed him money for
27   work performed and for expenses he incurred working with Gilcrease
28   on a case for a party named Whipp.    Trustee learned of the

                                     -4-
 1   Gilcrease/Whipp Claim in a telephone conversation with Fitzhugh's
 2   friend, attorney Thomas Ryan, on April 28, 2014, one month before
 3   Fitzhugh's discharge in May 2014.     Trustee later settled the
 4   Gilcrease/Whipp Claim for $10,000.    Fitzhugh then amended his
 5   schedules to disclose the claim.    Fitzhugh never disclosed the
 6   Gilcrease fee arbitration, which was pending at the time of the
 7   bankruptcy filing, in his initial SOFA or any amendments thereto.
 8        Carranza Claim
 9        Prior to his bankruptcy filing, Fitzhugh was pursuing a claim
10   for legal fees from his former clients, the Madrigals.    Fitzhugh
11   was the initial attorney for the Madrigals but later withdrew.
12   Another attorney settled the Madrigal matter for $3 million.
13   Fitzhugh claimed he was entitled to fees from the settlement.
14   Instead of suing the Madrigals himself for the disputed attorney's
15   fees, Fitzhugh assigned his fee claim to Al Carranza, who asserted
16   the claim (Carranza Claim).
17        Before and after his bankruptcy filing, Fitzhugh filed
18   pleadings in the Madrigal matter asserting that he was entitled to
19   collect the Carranza Claim.   Just six days after his bankruptcy
20   filing, Fitzhugh filed a pleading in the Madrigal matter advising
21   the state court that "the law of this still pending case . . . is
22   that Edward D. Fitzhugh is Plaintiff."
23        The Madrigal matter was still being litigated as late as
24   February 2015.   Fitzhugh never disclosed his interest in the
25   Carranza Claim or in the Madrigal matter, either in his initial
26   schedules and SOFA or any amendments thereto, even though these
27   matters were pending at the time of the bankruptcy filing.
28        Trustee failed to state in his complaint or establish at

                                     -5-
 1   trial on what date he learned about the Carranza Claim and the
 2   related Madrigal matter.
 3        Leonard Claim
 4        In November 2012, Fitzhugh entered into an agreement to
 5   represent the Leonards.    Fitzhugh would receive a 40% contingency
 6   fee if the matter settled more than 60 days before trial and a 50%
 7   contingency fee thereafter (Leonard Claim).   In April 2013,
 8   Fitzhugh's co-counsel, a member of the Colorado bar, filed a
 9   lawsuit in Colorado on behalf of the Leonards.   The Leonard matter
10   was pending at the time of Fitzhugh's bankruptcy filing, and on
11   the petition date he held rights to the Leonard Claim.    Fitzhugh
12   did not disclose his interest in the Leonard Claim in his initial
13   or any amended schedules.   Trustee learned of the Leonard Claim in
14   September 2015.   Ultimately, the Leonards sued Fitzhugh for his
15   alleged mishandling of their case; the estate received no money
16   for the Leonard Claim.
17   B.   Trustee's discharge revocation complaint and trial
18        Trustee filed a complaint seeking to revoke Fitzhugh's
19   discharge under § 727(d)(1) and (d)(2) for intentionally failing
20   to disclose or making false representations about the Venezia
21   Claim, the Gilcrease/Whipp Claim, and the Carranza Claim,4 and
22   intentionally failing to disclose his involvement in the Gilcrease
23   fee arbitration and the Madrigal matter related to the Carranza
24
25        4
             Trustee did not yet know about the Leonard Claim, so it
     was not part of the complaint. However, the documents referenced
26   above were presented at trial. Fitzhugh testified about the
     Leonard Claim without objection, but then later objected to
27   Trustee's admission of the documents supporting the Leonard Claim
     on the basis of relevance, which the court overruled and Fitzhugh
28   does not contest on appeal.

                                      -6-
 1   Claim.   In Fitzhugh's answer filed by his then-attorney, Lyndon
 2   Steimel, Fitzhugh denied Trustee's allegation that he was entitled
 3   to contingency fees in any of the matters at the time of his
 4   bankruptcy filing.
 5        At a pretrial conference in May 2015, the court adopted the
 6   parties' discovery plan that discovery would be completed by
 7   July 31, 2015.   Steimel represented Fitzhugh at that hearing.
 8   Steimel also represented Fitzhugh at the final pretrial conference
 9   on September 2, 2015.
10        The parties filed a joint pretrial statement in October 2015.
11   Fitzhugh's position essentially was that, since he had not earned
12   any fees as of the petition date, none of the contingency fees in
13   any of the matters were property of the estate.   Trustee raised
14   the Leonard Claim for the first time in the joint pretrial
15   statement.
16        Trial was initially set for October 21, 2015.   For personal
17   reasons, Steimel had to withdraw from the case just prior to
18   trial.   On Fitzhugh's motion, the court agreed to continue trial
19   to March 3, 2016, to give Fitzhugh sufficient time to prepare and
20   to retain new counsel.   In January 2016, Fitzhugh, still pro se,
21   again sought to continue trial.    The court continued trial to
22   June 8, 2016, and later, sua sponte, rescheduled trial for
23   June 22, 2016.
24        On May 26, 2016, Fitzhugh, still pro se, again moved to
25   continue trial and to extend discovery deadlines.    Fitzhugh
26   maintained that an extension was necessary because his bankruptcy
27   consultant had become seriously ill and was unable, until
28   recently, to assist him in preparing for trial.   Trustee opposed

                                       -7-
 1   the motion, arguing that this same motion had been filed, briefed,
 2   argued and denied.   The bankruptcy court entered an order denying
 3   the motion for lack of cause on June 7, 2016.
 4          Fitzhugh represented himself at trial.   Fitzhugh, Trustee and
 5   Ryan testified.   Fitzhugh denied any wrongful intent in not
 6   disclosing the Venezia Claim, the Gilcrease/Whipp Claim, the
 7   Carranza Claim and the Leonard Claim, even though he was made
 8   aware during the bankruptcy case that they were property of the
 9   estate.   Fitzhugh stated that he did not consider these claims
10   assets of his bankruptcy estate but, rather, assets of his LLC.
11   He based this belief on the fact that General Motors had emerged
12   from its bankruptcy by changing its name and continuing on with
13   its business, so he believed that he could do the same by creating
14   his LLC five months postpetition.      Fitzhugh testified that, to his
15   credit, he also failed to schedule things that would have
16   benefitted him, such as wage claims and the homestead exemption.
17          After post-trial briefing, the bankruptcy court issued its
18   Memorandum Decision and order revoking Fitzhugh's discharge under
19   § 727(d)(1) and (d)(2).    Fitzhugh timely appealed.
20                              II. JURISDICTION
21          The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334
22   and 157(b)(2)(J).    We have jurisdiction under 28 U.S.C. § 158.
23                                III. ISSUES
24   1.     Did the bankruptcy court err in revoking Fitzhugh's discharge
25   under § 727(d)(1) and (d)(2)?
26   2.     Did the bankruptcy court abuse its discretion by not granting
27   the motion to continue trial and to extend discovery deadlines?
28   ////

                                      -8-
 1                         IV. STANDARDS OF REVIEW
 2        For § 727 decisions, we review the bankruptcy court's
 3   conclusions of law de novo, its findings of fact for clear error,
 4   and mixed questions of law and fact de novo.      Searles v. Riley
 5   (In re Searles), 317 B.R. 368, 373 (9th Cir. BAP 2004), aff'd,
 6   212 Fed. App'x 589 (9th Cir. 2006) (citing Murray v. Bammer (In re
 7   Bammer), 131 F.3d 788, 792 (9th Cir. 1997) (en banc), overruling,
 8   e.g., Finalco, Inc. v. Roosevelt (In re Roosevelt), 87 F.3d 311,
 9   314, as amended, 98 F.3d 1169 (9th Cir. 1996) (applying "gross
10   abuse of discretion" standard), and Friedkin v. Sternberg (In re
11   Sternberg), 85 F.3d 1400, 1404 (9th Cir. 1996) (applying "sound
12   discretion of the bankruptcy court" standard).      An erroneous view
13   of the law may induce the bankruptcy court to make a clearly
14   erroneous finding of fact.    Ozenne v. Bendon (In re Ozenne),
15   337 B.R. 214, 218 (9th Cir. BAP 2006) (citing Power v. Union Pac.
16   R.R. Co., 655 F.2d 1380, 1382-83 (9th Cir. 1981)).
17        The bankruptcy court's denial of a motion to reopen discovery
18   is reviewed for an abuse of discretion.      Cornwell v. Electra Cent.
19   Credit Union, 439 F.3d 1018, 1026 (9th Cir. 2006).
20                                V. DISCUSSION
21   A.   The bankruptcy court applied an incorrect standard of law to
          revoke Fitzhugh's discharge under § 727(d)(1) and (d)(2).
22
23        Revocation of discharge is an extraordinary remedy and is
24   construed liberally in favor of the debtor and strictly against
25   those seeking to revoke the discharge.       Bowman v. Belt Valley Bank
26   (In re Bowman), 173 B.R. 922, 924 (9th Cir. BAP 1994) (citing
27   First Beverly Bank v. Adeeb (In re Adeeb), 787 F.2d 1339, 1342
28   (9th Cir. 1986)).   Section 727(e)(1) establishes the statutory

                                       -9-
 1   deadline for filing an adversary proceeding under § 727(d)(1) and
 2   (d)(2) to revoke a debtor's discharge:      under subsection (d)(1)
 3   within one year after the discharge is granted; and under
 4   subsection (d)(2) before the later of one year after the discharge
 5   was granted and the date the case is closed.      Fitzhugh's case has
 6   not closed, and Trustee filed his complaint within one year of
 7   Fitzhugh's discharge.       Thus, Trustee's complaint was timely.
 8          1.   Governing law
 9          To obtain relief under § 727(d)(1), the plaintiff must prove
10   that the debtor committed fraud in fact.      Jones v. U.S. Tr.,
11   736 F.3d 897, 900 (9th Cir. 2013); In re Bowman, 173 B.R. at 925.
12   The fraud must be proven in the procurement of the discharge and
13   requires evidence of some conduct that under § 727(a) would have
14   been sufficient grounds for denying a discharge in the first
15   instance, such as the debtor knowingly and fraudulently making a
16   false oath in connection with the bankruptcy case.      Jones,
17 736 F.3d at 900; Miller v. Gilliam (In re Gilliam), 2012 WL
18   1191854, at *10 (9th Cir. BAP Apr. 6, 2012); see also In re
19   Bowman, 173 B.R. at 925 ("The fraud must be proven in the
20   procurement of the discharge and sufficient grounds must have
21   existed which would have prevented the discharge").
22          For a claim under § 727(d)(2), the plaintiff must prove that
23   the debtor acquired or became entitled to acquire property of the
24   estate and knowingly and fraudulently failed to report or deliver
25   the property to the trustee.      Both elements must be met and the
26   plaintiff must prove that the debtor acted with the knowing intent
27   to defraud.    In re Bowman, 173 B.R. at 925.
28   ////

                                         -10-
 1        2.   Analysis
 2        The bankruptcy court revoked Fitzhugh's discharge under
 3   § 727(d)(1) for his intentional failure to disclose assets and
 4   pending litigation, which could support a denial of discharge
 5   claim under § 727(a)(4) if the elements are met, and is a proper
 6   basis to revoke discharge under § 727(d)(1).   The court revoked
 7   Fitzhugh's discharge under § 727(d)(2) for his knowing and
 8   fraudulent failure to report the Venezia Claim to Trustee, which
 9   could support a claim under § 727(d)(2).
10        However, the court erred in applying the elements of
11   § 727(d)(1) and (d)(2).   Trustee had to also prove, under both
12   statutes, that he was unaware of the alleged fraud at the time the
13   discharge was entered.    Ross v. Mitchell (In re Dietz), 914 F.2d
14   161, 163 (9th Cir. 1990) (applying same knowledge requirement for
15   a plaintiff in § 727(d)(1) to (d)(2)) (citing Werner v. Puente
16   (In re Puente), 49 B.R. 966, 969 (Bankr. W.D.N.Y. 1985) and
17   Canfield v. Lyons (In re Lyons), 23 B.R. 123, 126 (Bankr. E.D. Va.
18   1982) ("The fact that subparagraphs 727(d)(2) and 727(d)(3)
19   contain no language requiring the knowledge of any fraudulent
20   conduct to be received after the discharge is granted, does not
21   give a party in interest, who has the knowledge of the probable
22   wrongdoing the privilege to wait until after a discharge is
23   granted to ask the court to revoke the discharge")); Banayan v.
24   Mesbahi (In re Mesbahi), 2006 WL 6810975, at *6 (9th Cir. BAP
25   Oct. 10, 2006) (citing Dietz and holding that plaintiffs did not
26   establish a claim to revoke discharge under § 727(d)(2) because
27   they failed to prove they did not know of any fraud prior to
28   debtor's discharge); In re Bowman, 173 B.R. at 924-25 (citing

                                      -11-
 1   Dietz and holding that "to effectuate revocation under § 727(d),
 2   such fraud must be discovered after discharge") (emphasis in
 3   original).     Fitzhugh tried to raise this issue at trial, albeit
 4   imprecisely, when Trustee repeatedly stated that the relevant date
 5   for his knowledge of Fitzhugh's alleged fraud was the objection to
 6   discharge bar date.
 7        The bankruptcy court applied the objection to discharge bar
 8   date — September 3, 2013 — as the relevant date for revoking
 9   Fitzhugh's discharge under § 727(d)(1) and (d)(2), not the entry
10   of discharge date — May 27, 2014.     The record shows that Trustee
11   knew about the Venezia Claim and the Gilcrease/Whipp Claim prior
12   to Fitzhugh's discharge, on October 26, 2013, and April 28, 2014,
13   respectively.    At oral argument before the Panel, Trustee seemed
14   unaware that he could have sought an extension of time to object
15   to Fitzhugh's discharge under Rule 4004 due to the Venezia Claim
16   and the Gilcrease/Whipp Claim, even though the time for filing a
17   complaint had expired on September 3, 2013.     See Rule 4004(b)(2).
18        In 2011, Rule 4004(b) was amended to allow a party to request
19   an extension of time to object to discharge after the time for
20   objection has expired and before discharge is granted, if (A) the
21   objection is based on facts that, if learned after the discharge,
22   would provide a basis for revocation under § 727(d), and (B) the
23   movant did not have knowledge of those facts in time to permit an
24   objection.     Rule 4004(b)(2).   The motion is to be filed promptly
25   after the movant discovers the facts on which the objection is
26   based.   Id.
27        The 2011 amendment eliminated what was known as the "gap
28   period" — the time between the expiration of the time to object to

                                        -12-
 1   discharge and the actual entry of discharge.    Under former Rule
 2   4004, any requests for extensions of time to object to discharge
 3   had to be made before the bar date.     Thus, if a party did not
 4   learn of the debtor's fraudulent conduct until after the bar date,
 5   but before the discharge was entered, the party was precluded from
 6   bringing a § 727(d) complaint.
 7        Courts struggled with the issue of whether a party that
 8   obtains knowledge of fraudulent activity within the gap period
 9   obtained that knowledge "after the granting" of the discharge.
10   Some courts found that the gap period frustrated a party's rights
11   and held that, in such cases, the court had discretion to deem the
12   objection to discharge bar date as the effective discharge date.
13   See In re Dietz, 914 F.2d at 164 (where no discharge was entered
14   discharge is deemed entered for purposes of § 727(d) upon the
15   expiration of the deadline to object to discharge); England v.
16   Stevens (In re Stevens), 107 B.R. 702, 706 (9th Cir. BAP 1989)
17   ("the rights of parties . . . would be unreasonably frustrated, if
18   Rule 4004 were read to create a temporary period where no . . .
19   complaint under § 727 could be brought”); In re Staub, 208 B.R.
20   602, 606–07 (Bankr. S.D. Ga. 1997) ("rational sense" requires that
21   there be no "safe haven gap period").
22        With the 2011 amendment to Rule 4004, reliance on these cases
23   is no longer necessary.   Rather, in such circumstances, the party
24   must now utilize Rule 4004(b)(2) and obtain an extension of time
25   to object to discharge or risk losing the ability to bring a
26   complaint under § 727(d)(1) or (d)(2).
27        As for the Carranza Claim or the Madrigal matter, Trustee
28   failed to establish on what date he learned about them, and it was

                                      -13-
 1   his burden to do so.   In re Bowman, 173 B.R. at 924-25; U.S. Tr.
 2   v. Franz (In re Franz), 540 B.R. 765, 778 (Bankr. D. Mont. 2015)
 3   (to obtain discharge revocation under § 727(d)(2) the plaintiff
 4   bears the burden of proof and must establish all elements by a
 5   preponderance of the evidence).
 6        Accordingly, the bankruptcy court could not consider the
 7   Venezia Claim, the Gilcrease/Whipp Claim, or the Carranza Claim
 8   and Madrigal matter for revoking Fitzhugh's discharge under
 9   § 727(d)(1) or (d)(2).
10        The only potential estate asset Trustee was unaware of prior
11   to Fitzhugh's discharge was the Leonard Claim.   Hence, the Leonard
12   Claim, assuming the discharge revocation complaint can be amended
13   to conform to the evidence at trial,5 is the only matter the court
14   could consider for Trustee's claim under § 727(d)(1) or (d)(2).
15   For its decision to revoke Fitzhugh's discharge under § 727(d)(2),
16   the court relied only on the Venezia Claim for support.   However,
17   as we discussed above, the court could not consider that claim
18   because Trustee was aware of it, and even settled it, several
19   months before entry of Fitzhugh's discharge.
20        The bankruptcy court will have to determine on remand if the
21   Leonard Claim (if applicable) provides a sufficient basis to
22   revoke Fitzhugh's discharge under either § 727(d)(1) or (d)(2).
23
          5
             Civil Rule 15(b)(2), applicable here by Rule 7015,
24   provides:
25        When an issue not raised by the pleadings is tried by the
          parties' express or implied consent, it must be treated in
26        all respects as if raised in the pleadings. A party may
          move — at any time, even after judgment — to amend the
27        pleadings to conform them to the evidence and to raise an
          unpleaded issue. But failure to amend does not affect the
28        result of the trial of that issue.

                                       -14-
 1   B.   Fitzhugh has waived any argument respecting the bankruptcy
          court's decision to deny his motion to continue trial and to
 2        extend discovery deadlines.6
 3        Fitzhugh contends that the bankruptcy court abused its
 4   discretion by not granting his motion to continue trial and to
 5   extend discovery deadlines.   Other than stating that "the courts
 6   [sic] refused [sic] to grant Appellant's request for a continuance
 7   of the trial substantially prejudiced Appellant . . . .",
 8   Fitzhugh's opening brief fails to present any argument or
 9   authority in support of his position that the court abused its
10   discretion.   He also failed to present the matter as an issue on
11   appeal or provide a proper standard of review in violation of Rule
12   8014(a).   As a result, he has waived this issue.   Wake v. Sedona
13   Inst. (In re Sedona Inst.), 220 B.R. 74, 76 (9th Cir. BAP 1998)
14   (matters on appeal not specifically and distinctly argued in
15   appellant's opening brief are waived).
16                              VI. CONCLUSION
17        Based on the foregoing reasons, we VACATE and REMAND the
18   bankruptcy court's order revoking Fitzhugh's discharge under
19   § 727(d)(1) and (d)(2) with instructions that the court consider
20   only those items which Trustee did not learn of until after entry
21   of the discharge.   We AFFIRM the court's order denying Fitzhugh's
22   motion to continue trial and to extend discovery deadlines.
23
24        6
             Although not addressed by the parties, the order denying
     Fitzhugh's motion to continue trial and to extend discovery
25   deadlines was an interlocutory order that "merged" into the final
     order determining revocation of the discharge and dismissing the
26   adversary proceeding. See United States v. Real Prop. Located at
     475 Martin Lane, Beverly Hills, Cal., 545 F.3d 1134, 1141 (9th
27   Cir. 2008) (under merger rule interlocutory orders entered prior
     to the judgment merge into the judgment and may be challenged on
28   appeal). Accordingly, we are able to review the order.

                                     -15-