Court Opinion

ID: 4096196
Source: CourtListenerOpinion
Date Created: 2016-11-07 22:01:14.744882+00
Date Added: 2024-06-11T07:45:31.315149
License: Public Domain

FILED
                                 NOT FOR PUBLICATION
                                                                           NOV 07 2016
                       UNITED STATES COURT OF APPEALS                   MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                                 FOR THE NINTH CIRCUIT

In re: ROTH MANAGEMENT                            No.    14-56408
CORPORATION,
                                                  D.C. No.
               Debtor,                            3:13-cv-01824-BAS-DHB

------------------------------
                                                  MEMORANDUM*
 ANICE PLIKAYTIS,

               Plaintiff-Appellant,

 v.

FAIRMONT L.P.; DEBRA ANN ROTH,

               Defendants-Appellees.

                      Appeal from the United States District Court
                         for the Southern District of California
                      Cynthia A. Bashant, District Judge, Presiding

                         Argued and Submitted October 6, 2016
                                 Pasadena, California

Before: PREGERSON, NOONAN, and PAEZ, Circuit Judges.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Anice Plikaytis appeals the district court’s order affirming the bankruptcy

court’s order sustaining the objections of Fairmount L.P. and Debra Roth in the

Chapter 11 bankruptcy proceedings of Roth Management Corporation. We have

jurisdiction under 28 U.S.C. § 158(d). We review de novo a district court’s

decision on appeal from a bankruptcy court. In re JTS Corp., 617 F.3d 1102, 1109

(9th Cir. 2010). We review a bankruptcy court’s decision independently, without

deference to the district court’s decision. Id. We review the bankruptcy court’s

conclusions of law de novo and its findings of fact for clear error. Id. We affirm.

      A writing is ambiguous if it is susceptible to more than one reasonable

interpretation. See Woods v. Carey, 722 F.3d 1177, 1181 (9th Cir. 2013). The

bankruptcy court found that the key language from the state court judgment

regarding the alter ego status of James Roth, Roth Management Corporation, and

Roth Construction Corporation was unclear because it arguably includes several

permutations of liability, including one permutation (reverse veil piercing) that is

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not available under California law.1 See In re Schwarzkopf, 626 F.3d 1032, 1038

(9th Cir. 2010) (noting that California only allows reverse veil piercing in the

context of trusts). We agree.

      The critical sentence from the state court judgment is susceptible to more

than one reasonable interpretation because the definitions of the key terms in that

sentence—“alter egos” and “corporate veil to be pierced”—do not concern a

corporation’s liability for an individual’s debts. See Alter Ego, Black’s Law

Dictionary (10th ed. 2014) (“A corporation used by an individual or a subservient

corporation in conducting personal business, the result being that a court may

impose liability on the individual or subservient corporation by piercing the

corporate veil when someone dealing with the corporation is a victim of fraud,

illegality, or injustice.”), Piercing the Corporate Veil (“The judicial act of

imposing personal liability on otherwise immune corporate officers, directors, or

shareholders for the corporation’s wrongful acts.”).

      1
         “Piercing the corporate veil” is the title given to the equitable doctrine
under which persons who influence and govern a corporation, and who abuse the
corporate privilege, may be personally liable for the actions of the corporation in
order to prevent an inequitable result were the doctrine not applied. 2 Henry W.
Ballantine & Graham L. Sterling, Ballantine & Sterling: California Corporation
Laws §§ 295-97 (Neil J Wertlieb, ed., 4th ed. 2016). “[R]everse [veil] piercing is
not justified as an equitable remedy because it does not involve abuse of the
corporate form when the judgment debtor is the shareholder.” Id. at § 297.04.
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      The bankruptcy court properly concluded that the state court judgment was

ambiguous. Because Plikaytis could not show with clarity and certainty that the

issues of reverse veil piercing and single-enterprise liability had been determined

by the state court, the bankruptcy court could not apply collateral estoppel. See

Clark v. Bear Stearns & Co., Inc., 966 F.2d 1318, 1321 (9th Cir.1992) (“The party

asserting preclusion bears the burden of showing with clarity and certainty what

was determined by the prior judgment.”).

      AFFIRMED.

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