Court Opinion

ID: 4192621
Source: CourtListenerOpinion
Date Created: 2017-08-03 17:01:55.526159+00
Date Added: 2024-06-11T13:25:37.443544
License: Public Domain

FILED
                                                                 MAR 10 2017
 1                          NOT FOR PUBLICATION
                                                           SUSAN M. SPRAUL, CLERK
                                                                U.S. BKCY. APP. PANEL
 2                                                              OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
                              OF THE NINTH CIRCUIT
 4
 5   In re:                        )       BAP No. NV-16-1115-LJuKu
                                   )
 6   JOHN BADEA,                   )       Bk. No. 2:15-bk-10638-LED
                                   )
 7                  Debtor.        )       Adv. No. 2:15-ap-01035-LED
     ______________________________)
 8                                 )
     JOHN BADEA,                   )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )       MEMORANDUM*
11                                 )
     EMIL BOTEZATU; GABRIELA       )
12   BOTEZATU,                     )
                                   )
13                  Appellees.     )
     ______________________________)
14
                    Argued and Submitted on February 24, 2017
15                            at Las Vegas, Nevada
16                           Filed - March 10, 2017
17            Appeal from the United States Bankruptcy Court
                        for the District of Nevada
18
          Honorable Laurel E. Davis, Bankruptcy Judge, Presiding
19                       _________________________
20   Appearances:      Appellant John Badea argued pro se; Michael R.
                       Mushkin argued for appellees Emil and Gabriela
21                     Botezatu.
                            _________________________
22
     Before: LAFFERTY, JURY, and KURTZ, Bankruptcy Judges.
23
24
25
26        *
             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.
28   See 9th Cir. BAP Rule 8024-1.
 1                              INTRODUCTION
 2        After John Badea filed his chapter 71 petition, creditors
 3   Emil and Gabriela Botezatu filed a complaint seeking denial of
 4   Badea’s discharge under § 727.   After a trial, the bankruptcy
 5   court entered a judgment denying discharge (the “Judgment”) based
 6   upon Badea’s pre-petition transfer of property with intent to
 7   hinder, delay or defraud a creditor and for false oaths in his
 8   schedules and statements of financial affairs.
 9        Badea moved for reconsideration, arguing that the bankruptcy
10   court had erroneously interpreted the evidence presented in
11   finding that he had acted with fraudulent intent.    After a
12   hearing, the bankruptcy court denied Badea’s motion.    Badea
13   timely appealed.   Because Badea did not provide an adequate
14   record to permit our review of the Judgment, and because he did
15   not demonstrate any ground for reconsideration, we AFFIRM.
16                                 FACTS2
17        In October 2007 the District Court for Clark County, Nevada,
18   entered a judgment against Badea and in favor of the Botezatus in
19   the amount of $47,401.29 for attorneys’ fees and costs, plus
20   $2,500 for sanctions, plus interest.
21        In January 2010, Badea purchased a condominium in Las Vegas
22   (the “Silverado Ranch Property”) for $52,000.    On February 24,
23
24        1
             Unless otherwise indicated, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532,
25   “Rule” references are to the Federal Rules of Bankruptcy
26   Procedure, and “Civil Rule” references are to the Federal Rules
     of Civil Procedure.
27
          2
             The facts are taken primarily from the bankruptcy court’s
28   findings and conclusions.

                                      -2-
 1   2014, Badea transferred the Silverado Ranch Property to his
 2   brother, George Badea, by quit claim deed.   The deed noted that
 3   no consideration was given in exchange for the transfer.
 4        Less than a year later, on February 12, 2015, Badea filed a
 5   petition for relief under chapter 7.   At the initial meeting of
 6   creditors, several problems with Badea’s schedules came to light.
 7   Badea failed to list his second motor vehicle or his interest in
 8   a family home in Romania; misstated the date on which he
 9   transferred the Silverado Ranch Property to George as “mid-2013”;
10   listed zero income on Schedule I and $2,579 in monthly expenses
11   on Schedule J; and listed a 2005 Mercedes Benz 350 on Schedule B
12   with a value of zero and a monthly car payment of $800 on
13   Schedule J but did not list any secured creditor or lessor for
14   that vehicle.   Although the chapter 7 trustee sent a written
15   request to Badea to amend his schedules and statements, no
16   amendments were ever filed that corrected these issues.
17        The Botezatus filed an adversary proceeding seeking denial
18   of Badea’s discharge pursuant to § 727; the matter was tried on
19   December 4, 2015.   As discussed below, Badea did not provide a
20   copy of the trial transcript; thus, we do not have a record of
21   the testimony or evidence presented at trial.   However, the
22   bankruptcy court noted in its findings and conclusions that it
23   had declined to admit Badea’s Trial Exhibit B entitled “Agreement
24   and Power of Attorney,” which purportedly memorialized an
25   agreement for George to loan Badea $50,000 in August 2009 to
26   purchase a condominium in Las Vegas.   The bankruptcy court did
27   not admit this document because Badea had not laid a proper
28   evidentiary foundation for the agreement and for other concerns

                                     -3-
 1   related to the agreement’s authenticity.
 2        In December 2015 the bankruptcy court orally ruled on the
 3   matters presented at trial, finding for the Botezatus on their
 4   claims under §§ 727(a)(2)(A) and (a)(4); the bankruptcy court
 5   thereafter entered the Judgment.
 6        Badea timely moved for reconsideration, arguing that the
 7   bankruptcy court had erred in finding that he intended to defraud
 8   the Botezatus and that his failure to amend the schedules was
 9   fraudulent.   After a hearing, the bankruptcy court denied the
10   motion for reconsideration.   Badea timely appealed.
11                              JURISDICTION
12        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
13   § 1334 and 157(b)(2)(J).   We have jurisdiction under 28 U.S.C.
14   § 158.
15                                 ISSUES
16        1.   Whether the Panel has jurisdiction to review the
17   Judgment denying discharge.
18        2.   Whether the Panel should affirm the bankruptcy court’s
19   Judgment denying discharge under §§ 727(a)(2)(A) and (a)(4) based
20   on Badea’s failure to provide an adequate record.
21        3.   Whether the bankruptcy court abused its discretion in
22   denying Badea’s motion for reconsideration.
23                           STANDARDS OF REVIEW
24        We review the bankruptcy court’s findings of fact for clear
25   error and its conclusions of law de novo.     Carrillo v. Su
26   (In re Su), 290 F.3d 1140, 1142 (9th Cir. 2002).     If an appellant
27   challenges a finding of fact, it is his responsibility to provide
28   an adequate record to show clear error.    Massoud v. Ernie

                                     -4-
 1   Goldberger & Co. (In re Massoud), 248 B.R. 160, 163 (9th Cir. BAP
 2   2000).
 3         We review the bankruptcy court’s denial of a motion to alter
 4   or amend a judgment for abuse of discretion.   Ta Chong Bank Ltd.
 5   v. Hitachi High Techs. Am., Inc., 610 F.3d 1063, 1066 (9th Cir.
 6   2010).   Under the abuse of discretion standard, we “determine de
 7   novo whether the [bankruptcy] court identified the correct legal
 8   rule to apply to the relief requested.”   United States v.
 9   Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009).   If the
10   bankruptcy court identified the correct legal rule, we then
11   determine under the clearly erroneous standard whether its
12   factual findings and its application of the facts to the relevant
13   law were: “(1) illogical, (2) implausible, or (3) without support
14   in inferences that may be drawn from the facts in the record.”
15   Id.
16                               DISCUSSION
17   A.    The Panel has jurisdiction over the appeal of the Judgment
18         denying discharge, and Appellees will not be prejudiced by
19         our consideration of that matter on the merits.
20         The Botezatus argue in their answering brief that we do not
21   have jurisdiction to consider Badea’s appeal of the Judgment
22   because the notice of appeal references and attaches only the
23   order denying reconsideration.   The Botezatus reason that there
24   was no timely notice of appeal filed from the Judgment, and thus
25   this Panel lacks jurisdiction to consider the appeal of the
26   Judgment.
27         The Botezatus misconstrue the applicable rules.   As an
28   initial matter, Rule 8002 provides that, if a party timely moves

                                      -5-
 1   to alter or amend a judgment under Rule 9023, then the 14-day
 2   deadline under Rule 8002 for filing an appeal runs from the entry
 3   of the order disposing of the last such motion outstanding.    We
 4   consider a motion for reconsideration filed within 14 days of a
 5   judgment to be a timely motion to “alter or amend” within the
 6   meaning of Rule 8002(b).   Shapiro ex rel. Shapiro v. Paradise
 7   Valley Unified Sch. Dist., 374 F.3d 857, 863 (9th Cir. 2004).    If
 8   the motion is timely under Rule 9023, we have jurisdiction to
 9   review both the underlying order and the order denying
10   reconsideration.   Tennant v. Rojas (In re Tennant), 318 B.R. 860,
11   866 n.5 (9th Cir. 2004).
12        Here, the motion for reconsideration was filed less than
13   14 days after entry of the Judgment, and the notice of appeal was
14   filed less than 14 days after entry of the order denying
15   reconsideration.   We thus have jurisdiction to review the
16   Judgment.
17        As for Badea’s failure to reference the Judgment in the
18   notice of appeal, Rule 8001(a) does not require the underlying
19   order or judgment to be attached to the notice of appeal.
20   Although 9th Cir. BAP R. 8003 does require such a designation, we
21   may depart from this local rule absent a showing of prejudice.
22   Wall Street Plaza, LLC v. JSJF Corp. (In re JSJF Corp.), 344 B.R.
23   94, 100 (9th Cir. BAP 2006), aff’d, 277 F. App’x 718 (9th Cir.
24   2008).   When a party seeks to argue the merits of an underlying
25   order that does not appear on the notice of appeal, the reviewing
26   court will generally consider (1) whether the intent to appeal a
27   specific judgment is fairly inferred and (2) whether the appellee
28   will be prejudiced by the mistake.    See Lolli v. County of

                                     -6-
 1   Orange, 351 F.3d 410, 414 (9th Cir. 2003) (interpreting Fed. R.
 2   App. P. 3).
 3        Intent to appeal a specific order can be “fairly inferred”
 4   by the issues raised in the appellant’s opening brief.   Id.
 5   Here, the intent to appeal the Judgment denying discharge is
 6   easily inferred from the substantial discussion of the Judgment
 7   in Badea’s brief, which focuses entirely on the request for a
 8   reversal of the denial of discharge and requests remand for
 9   further proceedings.   Badea also designated the transcript of the
10   bankruptcy court’s December 22, 2015 ruling on denial of
11   discharge as part of the record on appeal.    Thus, Badea’s intent
12   to appeal the Judgment can be fairly inferred.
13        There can be no claim of prejudice if both parties have
14   briefed the issues in the underlying order.   Id. at 415.   The
15   Botezatus addressed Badea’s reasoning in their answering brief.
16   Therefore, they will not be prejudiced by our review of the
17   Judgment.3
18   B.   We cannot find that the bankruptcy court clearly erred in
19        denying Badea’s discharge under §§ 727(a)(2)(A) or (a)(4)
20        because Badea has not provided an adequate record on appeal.
21        Sections 727(a)(2)(A) and (a)(4) both require a finding of
22   fraudulent intent.   Section 727(a)(2)(A) provides, in relevant
23   part:
24        The court shall grant the debtor a discharge, unless
          . . . the debtor, with intent to hinder, delay, or
25        defraud a creditor or an officer of the estate charged
26
          3
27           Moreover, Botezatus’ counsel conceded at oral argument
     that his clients were not prejudiced by Badea’s failure to attach
28   the Judgment to the Notice of Appeal.

                                     -7-
 1         with custody of property under this title, has
           transferred, removed, destroyed, mutilated, or
 2         concealed, or has permitted to be transferred, removed,
           destroyed, mutilated, or concealed . . . property of
 3         the debtor, within one year before the date of the
           filing of the petition.
 4
 5         To succeed on a claim for denial of discharge under
 6   § 727(a)(2)(A), the plaintiff must show by a preponderance of the
 7   evidence (1) that a transfer or concealment took place within one
 8   year before the filing of a bankruptcy petition, and (2) the
 9   subjective intent of the debtor to hinder, delay or defraud a
10   creditor through the disposition of the property.   Retz v.
11   Sampson (In re Retz), 606 F.3d 1189, 1200 (9th Cir. 2010).    As
12   direct evidence is rarely available to determine fraudulent
13   intent, certain “badges of fraud” may support such a finding:
14         (1) a close relationship between the transferor and the
           transferee; (2) that the transfer was in anticipation
15         of a pending suit; (3) that the transferor Debtor was
           insolvent or in poor financial condition at the time;
16         (4) that all or substantially all of the Debtor's
           property was transferred; (5) that the transfer so
17         completely depleted the Debtor’s assets that the
           creditor has been hindered or delayed in recovering any
18         part of the judgment; and (6) that the Debtor received
           inadequate consideration for the transfer.
19
20   Id.
21         Section 727(a)(4)(A) provides in relevant part: “The court
22   shall grant the debtor a discharge, unless . . . the debtor
23   knowingly and fraudulently, in or in connection with the case[,]
24   made a false oath or account.”   To prevail on a claim under this
25   subsection, the plaintiff must show by a preponderance of the
26   evidence that (1) the debtor made a false oath in connection to
27   the case, (2) that related to a material fact, (3) made
28   knowingly, (4) and fraudulently.   In re Retz, 606 F.3d at 1197.

                                      -8-
 1        On appeal, Badea does not dispute that he transferred the
 2   Silverado Ranch Property to his brother within a year of filing
 3   his bankruptcy petition or that his schedules and statement of
 4   financial affairs contained material misstatements.   Badea
 5   disputes only the bankruptcy court’s finding of fraudulent
 6   intent, which was based on the following badges of fraud: there
 7   was a close relationship between transferor and transferee, the
 8   transfer was made to avoid collection activity on the Botezatus’
 9   renewed judgment, and Badea did not receive consideration for the
10   transfer of the Silverado Ranch Property.   Badea disputes these
11   underlying factual findings.
12        However, under 9th Cir. BAP R. 8009-1:
13        The excerpts of record shall include the transcripts
          necessary for adequate review in light of the standard
14        of review to be applied to the issues before the Panel.
          The Panel is required to consider only those portions
15        of the transcript included in the excerpts of the
          record.
16
17        When a complete record is not provided, we are entitled to
18   presume that the omitted portions do not further the appellant’s
19   arguments.   Gionis v. Wayne (In re Gionis), 170 B.R. 675, 680-81
20   (9th Cir. BAP 1994), aff’d, 92 F.3d 1192 (9th Cir. 1996).
21   “[F]ailure to provide a sufficient record to support informed
22   review of trial-court determinations may, but need not, lead
23   either to dismissal of the appeal or to affirmance for inability
24   to demonstrate error.”   Kyle v. Dye (In re Kyle), 317 B.R. 390,
25   393 (9th Cir. BAP 2004), aff’d, 170 F. App’x 457 (9th Cir. 2006).
26        As noted, Badea failed to provide a transcript of the trial
27   testimony in his excerpts of record, and no trial transcript was
28   filed with the bankruptcy court.   To find clear error, we must be

                                     -9-
 1   able to review the entire record.     See Anderson v. City of
 2   Bessemer City, N.C., 470 U.S. 564, 573 (1985) (“A finding is
 3   clearly erroneous when although there is evidence to support it,
 4   the reviewing court on the entire evidence is left with the
 5   definite and firm conviction that a mistake has been committed.”)
 6   (emphasis added) (citation omitted).     Because Badea did not
 7   include the complete transcript necessary for us to review the
 8   “entire evidence” for clear error, we must affirm the Judgment
 9   denying discharge.   See Morrissey v. Stuteville
10   (In re Morrissey), 349 F.3d 1187, 1191 (9th Cir. 2003) (affirming
11   this Panel’s dismissal of appeal based in part on the inadequacy
12   of the appellate record); In re Kyle, 317 B.R. at 393.
13   C.   The bankruptcy court did not abuse its discretion in denying
14        Badea’s motion for reconsideration.
15        We construe a timely motion for reconsideration as a motion
16   to alter or amend judgment under Civil Rule 59(e), applicable in
17   bankruptcy via Rule 9023.   Rule 59(e) allows for reconsideration
18   if the bankruptcy court (1) is presented with newly discovered
19   evidence, (2) committed clear error or the initial decision was
20   manifestly unjust, or (3) if there is an intervening change in
21   controlling law.   Kona Enters., Inc. v. Estate of Bishop,
22   229 F.3d 877, 890 (9th Cir. 2000).
23        In his motion for reconsideration, Badea argued that the
24   bankruptcy court’s fraud finding was clearly erroneous.     However,
25   he pointed to no newly discovered evidence, clear error, manifest
26   injustice, or intervening change in controlling law.     Badea
27   simply disagreed with the inferences drawn by the bankruptcy
28   court.   The bankruptcy court denied the motion because Badea had

                                    -10-
 1   not demonstrated any of the required grounds for reconsideration.
 2   On appeal, Badea focused solely on the bankruptcy court’s factual
 3   findings supporting the § 727 Judgment and did not argue, much
 4   less demonstrate, that he met the appropriate standard on
 5   reconsideration or that the bankruptcy court abused its
 6   discretion in denying that motion.
 7   D.   Appellees’ request for fees and costs is denied for failure
 8        to file the request in a separate motion.
 9        In their brief, the Botezatus requested fees and costs under
10   Fed. R. App. P. 38 for filing a frivolous appeal.   In bankruptcy
11   appeals, the relevant rule is Rule 8020, which provides:
12        If the district court or BAP determines that an appeal
          is frivolous, it may, after a separately filed motion
13        or notice from the court and reasonable opportunity to
          respond, award just damages and single or double costs
14        to the appellee.
15        Because the Botezatus did not make their request in a
16   separately filed motion, we must deny it.   See Nghiem v. Ghazvini
17   (In re Nghiem), 264 B.R. 557, 560 n.4 (9th Cir. BAP 2001).
18                              CONCLUSION
19        Badea failed to provide an adequate record to enable review
20   of the bankruptcy court’s finding of fraudulent intent, and he
21   has not shown that the bankruptcy court abused its discretion in
22   denying Badea’s motion for reconsideration.   Accordingly, we
23   AFFIRM.
24
25
26
27
28

                                   -11-