Court Opinion

ID: 4160794
Source: CourtListenerOpinion
Date Created: 2017-04-17 20:01:10.254525+00
Date Added: 2024-06-11T14:38:13.371023
License: Public Domain

FILED
 1                         NOT FOR PUBLICATION            APR 12 2017
                                                      SUSAN M. SPRAUL, CLERK
 2                                                      U.S. BKCY. APP. PANEL
                                                        OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No.     NC-15-1251-BSKu
                                   )
 6   SATYA DEVI JAGAR,             )      Bk. No.     4:13-bk-46850-CN
                                   )
 7                  Debtor.        )      Adv. No.    4:14-ap-04037-CN
                                   )
 8                                 )
     EUGENE SCHNEIDER,             )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )      M E M O R A N D U M1
11                                 )
     SATYA DEVI JAGAR,             )
12                                 )
                    Appellee.      )
13   ______________________________)
14                  Argued and Submitted on January 19, 2017,
                           at San Francisco, California
15
                             Filed - April 12, 2017
16
                 Appeal from the United States Bankruptcy Court
17                   for the Northern District of California
18            Honorable Charles Novack, Bankruptcy Judge, Presiding
19
20   Appearances:     Appellant Eugene Schneider argued pro se; Raymond
                      R. Miller of the Mission Law Center argued for
21                    appellee Satya Devi Jagar.
22
23   Before:    BRAND, SPRAKER2 and KURTZ, Bankruptcy Judges.
24
25
          1
             This disposition is not appropriate for publication.
26   Although it may be cited for whatever persuasive value it may
     have, it has no precedential value. See 9th Cir. BAP Rule 8024-1.
27
          2
             Hon. Gary A. Spraker, Chief Bankruptcy Judge for the
28   District of Alaska, sitting by designation.
 1        Creditor Eugene Schneider appeals a judgment entered in favor
 2   of chapter 73 debtor, Satya Devi Jagar, respecting Schneider’s
 3   claims that an alleged debt for prepetition legal fees should be
 4   excepted from discharge under § 523(a)(2)(A) and that Jagar’s
 5   discharge should be denied under § 727(a)(4)(A) and (a)(5).    We
 6   AFFIRM.4
 7               I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
 8   A.   Prepetition events
 9        1.    The probate action
10        Schneider, who is 85 and has been practicing law in
11   California since 1969, was Jagar’s attorney in a probate
12   proceeding for her late husband’s estate.   Jagar does not speak or
13   read English; her native language is Punjabi.   She also is not
14   well educated and has never worked outside of the home.
15        Jagar married her husband in India; they later moved to the
16   United States.   Jagar’s husband passed away just before Jagar gave
17   birth to their daughter.   Jagar’s husband had a substantial 401(k)
18   plan with his employer and other assets, but his sons from a prior
19
20        3
             Unless specified otherwise, all chapter,   code and rule
     references are to the Bankruptcy Code, 11 U.S.C.   §§ 101-1532, and
21   the Federal Rules of Bankruptcy Procedure, Rules   1001-9037. The
     Federal Rules of Civil Procedure are referred to   as “Civil Rules.”
22
          4
             Schneider did not include any of his trial exhibits in his
23   excerpts of record other than Jagar’s bankruptcy petition (Exhibit
     10). A few of Schneider’s exhibits were attached to Jagar’s trial
24   brief, which Schneider also did not include. Attached to Jagar’s
     trial brief are the three retainer agreements at issue (Exhibits
25   1, 2 and 3) and a copy of the check to Jagar from Schneider’s
     trust account for $32,784.76 (Exhibit 7). We exercise our
26   discretion to take judicial notice of the bankruptcy court’s
     electronic docket and these missing documents. See O’Rourke v.
27   Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957-58
     (9th Cir. 1988); Atwood v. Chase Manhattan Mortg. Co. (In re
28   Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).

                                     -2-
 1   marriage contested the validity of Jagar’s marriage to their
 2   father, which caused years of litigation and expense for Jagar.
 3        Schneider represented Jagar in the probate matters for five
 4   years, beginning in 2005.   They executed three agreements over the
 5   course of the representation, all of which were written in
 6   English.   In the 2005 Representation Agreement signed by Jagar,
 7   Jagar agreed that if she was not appointed as the personal
 8   representative of her late husband’s estate she would pay
 9   Schneider his hourly billing rate of $300.   Jagar was never
10   appointed as the personal representative.    Schneider testified
11   that he did not discuss the 2005 Representation Agreement with
12   Jagar and did not know if she understood its terms.
13        The 2007 Representation Agreement, which was initially mailed
14   to Jagar for her signature, indicated that the probate action and
15   dispute about Jagar’s status as the wife of her late husband was
16   unresolved and going to trial.   Schneider was also trying to get
17   the administrator of Jagar’s late husband’s 401(k) plan to
18   recognize Jagar as his widow and turn over its proceeds to her.
19   Jagar stood to receive approximately $600,000 from her late
20   husband’s estate.   In closing, the 2007 Representation Agreement
21   discussed the terms of payment for Schneider’s services:
22        Last, as you know, our agreement required that I be paid
          on a monthly basis. I was told you are unable to pay me
23        and my compensation must come out of whatever you
          receive as a result of the litigation. This is a change
24        in our agreement. I am prepared to accept this change
          in our contract and to continue representing you so long
25        as the agreement is changed follows [sic]:
26        I will be paid my hourly rate. In addition I will
          receive 7 1/2% of the value of what you receive from any
27        sources as a result of being established as Pyara’s
          widow. In this context the term ‘any sources’ refers to
28        the estate and any retirement plans Pyara had.

                                      -3-
 1        Upon a final distribution order being entered in the
          estate all sums will become due and will be subject to a
 2        one and one-half percent monthly service charge until
          paid. . . .
 3
 4        Due to Jagar’s limited understanding of English, Schneider
 5   noted in the 2007 Representation Agreement his assumption that
 6   someone would be translating or explaining its terms to her.    If
 7   that were the case, Schneider requested that both Jagar and the
 8   translator sign it.   Jagar signed the 2007 Representation
 9   Agreement, as did her brother as “translator,” and returned it to
10   Schneider.   Schneider testified that he never spoke with Jagar
11   about the 2007 Representation Agreement or its terms either before
12   or after she signed it.
13        The 2009 Representation Agreement addressed Schneider’s
14   representation of Jagar in litigation he filed against the
15   administrator of her late husband’s 401(k) plan to compel turnover
16   of the funds to Jagar.    The payment arrangement for Schneider’s
17   fees for this litigation was to be the same as that in the probate
18   action.   Jagar signed the 2009 Representation Agreement, but
19   Schneider did not request in that agreement that anyone translate
20   it or that any translator sign it.     Schneider testified that he
21   did not discuss the 2009 Representation Agreement with Jagar, but
22   assumed that her brother was translating all documents for her.
23        Neither Schneider nor Jagar testified as to the outcome of
24   the probate action or other litigation, but Schneider’s
25   dischargeability complaint stated that Jagar did receive her late
26   husband’s 401(k) funds of over $450,000 and that she was
27   ultimately awarded a total of approximately $600,000 from her
28   husband’s estate.   Jagar has not disputed this assertion.

                                      -4-
 1        In or around January 2010 Jagar rolled over $300,000 of her
 2   late husband’s 401(k) plan proceeds to another Individual
 3   Retirement Account (“IRA”).   It appears that Jagar may have
 4   received the 401(k) plan proceeds directly.    The record reflects
 5   that Schneider received payments on behalf of Jagar from the
 6   probate estate’s administrator of $102,784.76.    Schneider retained
 7   $70,000.00 of that amount and sent the balance of $32,784.76 to
 8   Jagar on April 10, 2010.
 9        2.     Schneider’s suit for unpaid fees
10        In March 2013, Schneider filed a collection action in state
11   court against Jagar for alleged unpaid fees.   The collection
12   action was at the discovery stage when Jagar filed her bankruptcy
13   case.
14   B.   Postpetition events
15        1.     Jagar’s bankruptcy filing
16        Jagar, with the assistance of counsel (now deceased), filed a
17   chapter 7 bankruptcy case on December 31, 2013.   Her certificate
18   of counseling indicated that she received prepetition credit
19   counseling from Abacus Credit Counseling via the internet on
20   December 26, 2013.   Jagar listed the IRA rollover account in her
21   Schedule B with a value of $332,824.40, which she claimed exempt.
22   She also listed a counter-claim against Schneider for “overpayment
23   of attorney fees paid to handle probate matter[.]”   Besides her
24   mortgage with Wells Fargo, Schneider is Jagar’s only other
25   creditor.   She listed Schneider in her Schedule F as holding a
26   “disputed” unsecured claim for “Breach of Contract” for $200,000.
27   In her Schedule I, Jagar disclosed her monthly income of $1,700
28   from social security.

                                      -5-
 1        2.   Schneider’s dischargeability complaint
 2        Schneider timely filed a complaint against Jagar objecting to
 3   her discharge under § 727(a)(4)(A) and (a)(5) and seeking a
 4   determination that the debt for unpaid legal fees was excepted
 5   from discharge under § 523(a)(2)(A).
 6        For his § 523 claim, Schneider alleged that Jagar signing and
 7   mailing the 2007 Representation Agreement indicated she agreed to
 8   Schneider’s proposed payment terms, which induced him to provide
 9   legal services to her resulting in an award in excess of $600,000
10   from her late husband’s estate.    However, during the course of
11   discovery in the collection action, which was three years after
12   the probate action had ended, Jagar had now taken the position
13   that she and her brother understood Schneider’s fees to be only
14   7.5% of the amounts collected, not an hourly rate of $300.00 plus
15   the 7.5% contingency.   Schneider alleged that Jagar knew at the
16   time she signed the 2007 Representation Agreement that she did not
17   intend to pay him in accordance with its terms.    Schneider alleged
18   that he had no knowledge of Jagar’s false representation that she
19   agreed to the contract terms.   Schneider alleged that he relied on
20   Jagar’s false representations to his detriment resulting in
21   damages of “not less than $135,000.”
22        For his § 727 claims, Schneider alleged that Jagar made a
23   false oath or account by failing to fully advise the court with
24   respect to her income and assets in her bankruptcy papers.    He
25   further alleged that Jagar had failed to explain her deficiency of
26   assets to meet her monthly expenses.
27        The parties submitted trial briefs about a week before trial,
28   but in reviewing the docket it appears that Schneider’s brief was

                                       -6-
 1   never filed.   It is unknown whether the bankruptcy court reviewed
 2   his brief, but Schneider has included a copy of it in his excerpts
 3   of record.   Schneider set forth what he contended were the
 4   requirements for a constructive fraud claim, a claim for false
 5   pretenses under § 523(a)(2)(A), a claim for actual fraud under
 6   California law and a claim for negligent misrepresentation (which
 7   has no intent element) under both federal and California law.
 8   Schneider argued that the debt for unpaid legal fees should be
 9   excepted from discharge under § 523(a)(2)(A) because Jagar never
10   intended to pay him the hourly component of his fees.   Schneider
11   contended that Jagar had also stated in her discovery responses to
12   the collection action that neither she nor her brother spoke and
13   communicated in English; Schneider intended to dispute this with
14   other evidence.
15         For his § 727(a)(4)(A) claim, Schneider contended that Jagar
16   failed to disclose several assets in her petition:   (1) rental
17   income; (2) payments to non-attorneys in the one year preceding
18   her bankruptcy filing to assist her in the collection action;
19   (3) support she provided to persons other than herself and her
20   dependents; (4) substantial gifts she received in the two years
21   preceding her bankruptcy filing; (5) income transferred from her
22   daughter’s accounts to Jagar’s accounts for payment of Jagar’s
23   personal expenses; (6) use of her daughter’s social security
24   benefits to pay obligations other than for her daughter’s food,
25   clothing and shelter; or (7) the name(s) of those who managed or
26   assisted Jagar in managing her finances.   Schneider did not
27   articulate any argument for his § 727(a)(5) claim.
28   ///

                                     -7-
 1        3.     Trial on Schneider’s complaint
 2        Schneider presented his case in chief on the first day of
 3   what was scheduled to be a two-day trial.    Witnesses included
 4   Schneider, Jagar (through an interpreter) and Mrs. Deepo Raj.
 5        When questioned about her discovery responses in the
 6   collection action, Jagar testified that her brother knew “very
 7   little” English.   Trial Tr. (July 7, 2015) 22:1-3.   Jagar also
 8   testified that her brother could “read a little bit” of English.
 9   Id. at 59:15.   As for Schneider’s payment terms, Jagar testified
10   that she understood her brother’s explanation of the 2007
11   Representation Agreement to mean that she would have to pay
12   Schneider 7.5% of the amount she recovered.   Jagar further
13   testified that any recovery from the probate action was first paid
14   to Schneider, who then in turn paid Jagar by check in “any amount
15   that he felt was right, and he would give [her] just one part and
16   keep two parts for himself.”   Id. at 27:10-16.   Jagar testified
17   that Schneider was to receive only $45,000 under their agreement
18   (which is 7.5% of $600,000, the approximate total Jagar
19   recovered), but instead he kept $200,000 for himself.
20        Schneider also questioned Jagar about her prepetition credit
21   counseling and the related certificate filed with her petition.
22   Jagar could not recall any specifics about it, but assumed that
23   her attorney was present when she completed the counseling.    Not
24   satisfied with that answer, Schneider posed more questions on the
25   issue.    Eventually, the bankruptcy court told him to “move on.”
26        As for the alleged undeclared rental income, Jagar testified
27   that in 2013 she rented a room in her home to a mother and
28   daughter for $600/month; they paid rent for just one month but

                                      -8-
 1   stayed there another three to four months for free.       Jagar said
 2   she had to pay an attorney $1,500 to evict them.    Jagar said she
 3   did not claim the $600 as income because she suffered a loss.
 4        When questioned about her finances and maintaining her
 5   checking account, Jagar testified that her nine-year-old daughter
 6   helps her.    Jagar testified that her nephew sometimes helped her
 7   financially, and that the $2,000 she paid her attorney in the
 8   collection action just prior to her bankruptcy filing may have
 9   come from him.
10        Mrs. Raj, Jagar’s sister-in-law, testified that Jagar’s
11   brother understood English and could read it.
12        After Schneider rested, counsel for Jagar moved for a
13   “directed verdict,” contending that Schneider had not proven his
14   case under § 523 or § 727.    The court adjourned to consider
15   Jagar’s motion.
16        4.      The tentative judgment on partial findings
17        The next day, the bankruptcy court read its lengthy tentative
18   ruling into the record, granting Jagar’s motion for judgment on
19   partial findings under Civil Rule 52(c).5    The court found that
20   Schneider had not met his burden of proof on any of his claims.
21        Schneider attempted to introduce documents he contended
22   established his damages, but the bankruptcy court declined to
23   admit them, ruling that such documents should have been presented
24
          5
               Civil Rule 52(c) provides in relevant part:
25
          Judgment on Partial Findings. If a party has been fully
26        heard on an issue during a nonjury trial and the court
          finds against the party on that issue, the court may
27        enter judgment against the party on a claim or defense
          that, under the controlling law, can be maintained or
28        defeated only with a favorable finding on that issue.

                                       -9-
 1   as part of his case in chief.    The court noted that although
 2   Schneider had testified as to the amount of damages he claimed in
 3   his collection action complaint, Schneider had not provided any
 4   detail as to how he arrived at that figure.      For his § 523 claim,
 5   Schneider argued that he was alleging a claim for “false
 6   pretenses,” which he argued did not require a showing of
 7   fraudulent intent but still satisfied § 523(a)(2)(A).
 8        After hearing additional argument from the parties, the
 9   bankruptcy court adjourned to review the false pretenses claim
10   raised by Schneider and to issue a written decision on the Civil
11   Rule 52(c) motion.   If the court decided to deny that motion,
12   Jagar was to present her case on July 21, 2015.
13        5.   The bankruptcy court’s memorandum decision and judgment
14             on partial findings
15        On July 15 and 21, 2015, respectively, the bankruptcy court
16   entered its memorandum decision and judgment in favor of Jagar on
17   all claims under Civil Rule 52(c).       The court essentially adopted
18   its tentative ruling announced on the record.      However, the court
19   also addressed the false pretenses claim raised by Schneider,
20   determining that such claim still requires a showing of fraudulent
21   intent in the Ninth Circuit, which Schneider had failed to prove.
22        This timely appeal followed.
23                               II. JURISDICTION
24        The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334
25   and 157(b)(2)(I) and (J).    We have jurisdiction under 28 U.S.C.
26   § 158.
27                                 III. ISSUES
28   1.   Did the bankruptcy court err in denying Schneider’s claim

                                       -10-
 1        under § 523(a)(2)(A)?
 2   2.   Did the bankruptcy court err in denying Schneider’s claims
 3        under § 727(a)(4)(A) and (a)(5)?
 4                           IV. STANDARDS OF REVIEW
 5        The bankruptcy court’s findings of fact under Civil Rule
 6   52(c) are reviewed for clear error, while its conclusions of law
 7   are reviewed de novo.    Kuan v. Lund (In re Lund), 202 B.R. 127,
 8   129 (9th Cir. BAP 1996).
 9        When deciding a motion under Civil Rule 52(c), incorporated
10   by Rule 7052, the bankruptcy court is “not required to draw any
11   inferences in favor of the non-moving party; rather, the
12   [bankruptcy] court may make findings in accordance with its own
13   view of the evidence.”    Ritchie v. United States, 451 F.3d 1019,
14   1023 (9th Cir. 2006).    Accordingly, to the extent Schneider
15   contends the bankruptcy court incorrectly found an absence of
16   essential elements for his claims under § 523 and § 727, we review
17   those findings under the clearly erroneous standard.   See Candland
18   v. Ins. Co. of N. Am. (In re Candland), 90 F.3d 1466, 1469 (9th
19   Cir. 1996).
20                                V. DISCUSSION
21        Schneider raises a host of arguments on appeal.   We start
22   with his more general concerns.
23        Schneider contends the bankruptcy court erred by relying on
24   Jagar’s testimony, while at the same time deeming her not
25   competent to testify.    During questioning about her payment
26   agreement with Schneider, Jagar became emotional and her attorney
27   requested a brief recess.    Despite the request, Jagar pressed on,
28   answering Schneider’s questions.    As for Schneider’s claim that

                                       -11-
 1   Jagar’s prepetition credit counseling certificate must have been
 2   falsely filed because she does not read or speak English, the
 3   bankruptcy court opined that Jagar’s limited testimony on this
 4   issue was attributed to her limited education and her “highly
 5   emotional state during her time on the witness stand.”    Mem. Dec.
 6   (July 15, 2015) 8:23-25.   Although the court took into
 7   consideration Jagar’s emotional state, it never deemed her
 8   incompetent to testify.    Nor does the record reflect that Jagar
 9   was incompetent to testify.
10        Schneider also contends the bankruptcy court erred by
11   applying inconsistent standards in making its findings.     First,
12   Schneider argues that the court excused Jagar from her obligations
13   under the Representation Agreements because they were written in
14   English, but then took a reverse position, accepting Jagar’s
15   explanations regarding the deficiencies in her bankruptcy
16   documents, which were also neither translated nor printed in her
17   native language.   As we explain more below, the bankruptcy court
18   did not “excuse” Jagar from her obligations under either the
19   Representation Agreements or her bankruptcy documents; the court
20   simply found that Schneider had failed to prove his claims for
21   fraud under § 523(a)(2)(A) or for a false oath under
22   § 727(a)(4)(A).
23   A.   The bankruptcy court did not err in denying Schneider’s claim
24        under § 523(a)(2)(A).
25        1.   Section 523(a)(2)(A)
26        Section 523(a)(2)(A) excepts from discharge debts incurred
27   under false pretenses, based on false representations, or based on
28   actual fraud.   In particular, to establish a claim under

                                      -12-
 1   § 523(a)(2)(A), the creditor must prove each of the following five
 2   elements by a preponderance of the evidence:
 3        (1) the debtor made a representation;
 4        (2) the debtor knew the representation was false at the
          time he or she made it;
 5
          (3) the debtor made the representation with the intent
 6        to deceive;
 7        (4) the creditor justifiably relied on the
          representation; and
 8
          (5) the creditor sustained damage as a proximate result
 9        of the misrepresentation having been made.
10   Ghomeshi v. Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir.
11   2010).
12        2.    Analysis
13        The bankruptcy court found that Schneider had not met his
14   burden of proof on the element of intent:
15        First, given the defendant’s lack of education and
          illiteracy in English, and the insufficient evidence
16        regarding the strength of her brother’s command of the
          English language, Schneider has not demonstrated that
17        Jagar fully understood the terms of the 2007 and 2009
          Representation Agreements and knowingly lured Schneider
18        into representing her, all along not intending to fully
          pay the fees due him. In addition, since the funds
19        apparently disbursed by Duane Leonard (the probate
          estate’s administrator), were sent to the defendant,
20        care of Schneider, Schneider has not demonstrated by a
          preponderance of the evidence how the defendant was able
21        to avoid Schneider’s collection efforts.
22   Mem. Dec. (July 15, 2015) 5:23-6:2.    The court reasoned that the
23   same analysis applied to Schneider’s assertion that Jagar’s
24   conduct constituted “false pretenses” as opposed to “actual
25   fraud.”   In either case, Schneider was required to prove that
26
27
28

                                     -13-
 1   Jagar intended to defraud him, and he did not do so.6
 2        Schneider contends the bankruptcy court erred by not applying
 3   California contract law, which would not allow Jagar to be excused
 4   from the 2007 and 2009 Representation Agreements based on her
 5   illiteracy in English or her intentional choice of choosing an
 6   incompetent translator.   Schneider never raised this argument
 7   before the bankruptcy court.   In any event, while Schneider’s
 8   argument might be relevant in a breach of contract action, it
 9   matters little for a claim for fraud under § 523(a)(2)(A).    In
10   addition, the bankruptcy court did not “excuse” Jagar from the
11   terms of the Representation Agreements, which she never claimed
12   were invalid.   The court merely found that Schneider had failed to
13   turn a case for breach of contract into one for fraud.
14        Schneider also contends that Jagar’s testimony established
15   her wrongful intent not to pay him according to the Representation
16   Agreements’ terms.   The bankruptcy court disagreed.    With respect
17   to the 2007 Representation Agreement, which was the primary basis
18   for Schneider’s claim, Jagar testified that she believed the
19   agreement limited Schneider’s payment to 7.5% of her recovery,
20   even though she signed the agreement and sent it back to
21   Schneider.   While her belief was inconsistent with the agreement’s
22   express terms, the bankruptcy court found that Schneider had not
23
          6
             The bankruptcy court cited Mandalay Resort Group v. Miller
24   (In re Miller), 310 B.R. 185, 201 (Bankr. C.D. Cal. 2004), for the
     proposition that under Ninth Circuit law the terms “false
25   pretenses” and “false representation” have the same meaning in
     § 523(a)(2)(A) as the term “actual fraud.” While we believe Husky
26   International Electronics, Inc. v. Ritz, 136 S.Ct. 1581 (2016),
     has implicitly overruled Miller, both Husky International and
27   Bullock v. BankChampaign, N.A., 133 S.Ct. 1754 (2013), instruct
     that wrongful intent is necessary for a nondischargable claim
28   under § 523(a)(2)(A).

                                     -14-
 1   demonstrated by a preponderance of the evidence that the agreement
 2   was fully or accurately translated to her.     Although Jagar’s
 3   brother apparently knew some English and had translated various
 4   documents for her, the court was not persuaded based on the
 5   testimony that Jagar’s brother’s command of the English language
 6   was sufficient to avoid her apparent confusion or misunderstanding
 7   regarding the terms of Schneider’s compensation.
 8        In addition, Schneider admitted that he knew of Jagar’s
 9   illiteracy in English and that he never discussed with Jagar the
10   2007 or 2009 Representation Agreements or made sure she understood
11   them.   Schneider simply assumed that Jagar’s brother had
12   accurately translated them to her.      As an attorney, it would have
13   been better practice for Schneider to ensure that his client
14   understood how he was to be compensated.
15        Finally, and what Schneider never sufficiently explained, is
16   how Jagar failed to pay him what was owed when all disbursements
17   from the probate action apparently went through him first.
18   Indeed, the record shows that Schneider received payments totaling
19   $102,784.76 from the probate estate’s administrator by checks
20   dated March 28, 2010.   From those funds he retained $70,000.00 and
21   sent $32,784.76 to Jagar.   Why did he not just keep the amount of
22   funds necessary to satisfy his outstanding bill before paying
23   anything over to Jagar?   The 2007 Representation Agreement
24   contemplates that arrangement:   “I was told you are unable to pay
25   me and my compensation must come out of whatever you receive as a
26   result of the litigation.   This is a change in our agreement.    I
27   am prepared to accept this change in our contract . . . .”     Jagar
28   testified that Schneider did in fact keep what he believed he was

                                      -15-
 1   owed.   The fact that all probate disbursements were funneled
 2   through Schneider was another basis for the bankruptcy court to
 3   find Jagar’s lack of intent to defraud.
 4        The bankruptcy court considered Schneider’s evidence and
 5   found that he had not met his burden to establish Jagar’s
 6   fraudulent intent.   On this record, we cannot say that the court’s
 7   choice between the two permissible views of evidence was clearly
 8   erroneous.   See United States v. Yellow Cab Co., 338 U.S. 338, 342
 9   (1949) (a trial court’s choice between two permissible views of
10   the evidence is not clearly erroneous where the evidence would
11   support a conclusion either way).
12        Alternatively, the bankruptcy court found that even if
13   Schneider had demonstrated the requisite intent, he failed to
14   prove the amount of his damages.    When asked at trial how much he
15   had been paid to date from the probate action, Schneider stated he
16   did not have that number before him, but he could provide it the
17   following day.   Schneider did apparently bring some documents with
18   him the next day that he said established his damages, but the
19   bankruptcy court declined to consider them because Schneider had
20   already rested his case.   Schneider also testified that he sent
21   Jagar billing statements every month, but he never submitted them
22   as evidence.   Schneider also summarily stated in his
23   dischargeability complaint that his damages were “not less than
24   $135,000,” but that is not admissible evidence.
25        The only evidence of damages, which the bankruptcy court
26   noted, was Schneider’s complaint from the collection action which
27   alleged he was owed “$108,010.06 for services rendered, and an
28   additional $91,989.94 on account of fraud committed by defendants”

                                     -16-
 1   (Jagar and her brother) and his testimony as to the contents of
 2   that document.   The bankruptcy court opined that without any
 3   calculation by Schneider, it had little idea how he reached these
 4   numbers.   As a result, the court could not find that these
 5   represented his damages.
 6        Schneider contends that his collection action complaint and
 7   his testimony as to the amount of damages alleged in that
 8   complaint should have been sufficient evidence of his damages.      In
 9   essence, Schneider contends that what he stated as his amount of
10   damages in the collection action complaint is a factual allegation
11   that must be presumed to be true.   This assertion is contrary to
12   Civil Rule 8, which is applicable to adversary proceedings by Rule
13   7008.   An allegation as to the amount of damages is never presumed
14   true, even if not expressly denied by the defendant in a
15   responsive pleading.   See Civil Rule 8(b)(6).   Here, Jagar’s
16   answer expressly denied Schneider’s claimed damages.   The fact
17   that Schneider testified that the collection action complaint said
18   what it said did not make his allegation as to damages more true.
19        In addition, as the plaintiff claiming nondischargeability of
20   an unliquidated debt, it was Schneider’s burden to prove with
21   specificity the amount of his damages.   The record reflects that
22   Jagar received approximately $600,000 from her late husband’s
23   estate.    Seven-and-a-half percent of $600,000 is $45,000, which is
24   the amount Jagar testified Schneider should have received.    The
25   record reflects that Schneider received at least $70,000 for his
26   services, which suggests that he received not only the agreed
27   7.5%, but also at least some of his hourly fees.   Therefore, it is
28   unclear exactly what amount Jagar did not allegedly pay Schneider

                                      -17-
 1   for his services or, more importantly, how much of the alleged
 2   debt was the proximate result of Jagar’s fraud and thus
 3   nondischargable.
 4        Based on the lack of any concrete evidence of Schneider’s
 5   actual damages, the bankruptcy court’s finding that he failed to
 6   prove the amount of his damages was not clearly erroneous.      In any
 7   event, because the court properly determined that Schneider did
 8   not prove a causal relationship between Jagar’s alleged false
 9   representations and his alleged damages, whether Schneider proved
10   the amount of his damages is of no consequence.
11   B.   The bankruptcy court did not err in denying Schneider’s
12        claims under § 727(a)(4)(A) and (a)(5).
13        Objections to discharge are liberally construed in favor of
14   the debtor and against the objector.    Khalil v. Developers Sur. &
15   Indem. Co. (In re Khalil), 379 B.R. 163, 172 (9th Cir. BAP 2007),
16   aff’d, 578 F.3d 1167 (9th Cir. 2009).   For that reason, the
17   objector bears the burden to prove by a preponderance of the
18   evidence that the debtor’s discharge should be denied.    Id.
19        1.   Section 727(a)(4)(A) and (a)(5)
20        Section 727(a)(4)(A) provides that the debtor’s discharge may
21   be denied where:   (1) the debtor made a false oath in connection
22   with the bankruptcy case; (2) the oath related to a material fact;
23   (3) the oath was made knowingly; and (4) the oath was made
24   fraudulently.   Retz v. Sampson (In re Retz), 606 F.3d 1189, 1197
25   (9th Cir. 2010).
26        A false statement or an omission in the debtor’s bankruptcy
27   schedules or statement of financial affairs can constitute a
28   “false oath.”   Id. at 1196.   A fact is “material” if it bears a

                                      -18-
 1   relationship to the debtor’s business transactions or estate, or
 2   concerns the discovery of assets, business dealings, or the
 3   existence and disposition of the debtor’s property.       In re Khalil,
 4   379 B.R. at 173.   Nevertheless, a false statement or omission that
 5   has no impact on a bankruptcy case is not material and does not
 6   provide grounds for denial of a discharge under § 727(a)(4)(A).
 7   Id. at 172.   An act is done “knowingly” when the debtor acts
 8   “deliberately or consciously.”    Id. at 173.   Finally, a false
 9   statement or omission is made “fraudulently” when the (1) debtor
10   makes a representation or omission, (2) that at the time the
11   debtor knew was false, and (3) that the debtor made them with the
12   intention and purpose of deceiving creditors.     Id.
13        A debtor’s discharge may also be denied if the debtor fails
14   “to explain satisfactorily, . . . any loss of assets or deficiency
15   of assets to meet the debtor’s liabilities.”     § 727(a)(5).   To
16   establish a prima facie case under § 727(a)(5), the objector to
17   discharge must demonstrate that:    (1) the debtor at one time, not
18   too remote from the bankruptcy petition date, owned identifiable
19   assets; (2) on the date the bankruptcy petition was filed or order
20   of relief granted the debtor no longer owned the assets; and
21   (3) the bankruptcy papers do not reflect an adequate explanation
22   for the disposition of the assets.      In re Retz, 606 F.3d at 1205.
23   Once the objector makes a prima facie case, the burden shifts to
24   the debtor to offer credible evidence regarding the disposition of
25   the missing assets.   Id.   The sufficiency of the debtor’s
26   explanation, if any, is a question of fact.     See id.
27        2.   Analysis
28        Schneider’s complaint failed to provide any specific examples

                                      -19-
 1   of Jagar’s false oaths in connection with her bankruptcy papers.
 2   His trial brief provided some, but that brief was never filed and
 3   it is not clear if the bankruptcy court reviewed it.   Nonetheless,
 4   the court inferred from the testimony at trial what false oaths
 5   Schneider was alleging:   (1) Jagar failed to disclose the $600
 6   rental income; (2) Jagar’s Statement of Financial Affairs
 7   mistakenly stated that her late husband’s probate case closed in
 8   2007 as opposed to 2010; (3) Jagar did not list any gasoline or
 9   travel expenses in her original Schedule J, but later amended to
10   include this $200 monthly expense; (4) Jagar did not list her
11   daughter’s social security income in her original Schedule I or
12   Statement of Financial Affairs; (5) Jagar did not list her ADT,
13   AT&T or Comcast bills on her Schedule F; and (6) Jagar did not
14   take her prepetition credit counseling course.
15        Overall, the bankruptcy court found that Schneider failed to
16   prove either that these alleged errors or omissions were material
17   or that they were made fraudulently with an intent to deceive
18   creditors; therefore, he had not established a claim under
19   § 727(a)(4)(A).
20        Schneider raises two arguments here.   First, he contends the
21   bankruptcy court gave too much credence to Jagar’s prepetition
22   credit counseling certificate (also written in English), and that
23   the court erred by precluding his examination of Jagar on this
24   issue.   A review of the record shows that Schneider took ample
25   time to question Jagar about the certificate.    Jagar repeatedly
26   stated that she could not recall any specifics about the
27   counseling session, but stated that she may have completed it with
28   her bankruptcy attorney at her office.   After extensive

                                     -20-
 1   questioning about the certificate, which was leading nowhere, the
 2   bankruptcy court finally asked Schneider to “move on” to the next
 3   topic.   The court ultimately decided to accept Jagar’s filed
 4   certificate as proof that she had completed the prepetition credit
 5   counseling, as opposed to Schneider’s unsupported argument that
 6   she had not.   We do not perceive this finding to be clearly
 7   erroneous.
 8        Second, Schneider contends the bankruptcy court erred by
 9   overlooking inconsistencies (or even fabrications) regarding
10   Jagar’s testimony about her rental income.   Jagar testified that
11   she received $600 in rental income in 2013 by renting a room in
12   her home.    She also testified that she spent $1,500 for an
13   attorney to evict the non-paying tenant.   Jagar explained that she
14   had not reported the $600 rental income in her bankruptcy papers
15   because the venture resulted in a $900 loss.   Although we do not
16   have Jagar’s bank statements in the record, Schneider contends the
17   $1,500 payment is not reflected in them.   When asked about where
18   the money might have come from, Jagar testified that perhaps her
19   nephew gave her the $1,500, which explained the lack of a bank
20   entry.
21        Schneider contends that if Jagar received $1,500 from her
22   nephew, then she did not lose the $600 because she did not pay the
23   $1,500 out of her money.   Thus, apparently, the income existed and
24   should have been reported.7   The bankruptcy court noted that Jagar
25
          7
26           Schneider contends another inconsistency is that a post-
     trial review of the state court record reflects no eviction case
27   in which Jagar was a party. Schneider has asked the Panel to take
     judicial notice of this fact. Generally, we do not consider facts
28                                                        (continued...)

                                      -21-
 1   should have reported the $600 as income, regardless of the alleged
 2   eviction cost.    Ultimately, the court found that Schneider had
 3   failed to prove that the “small omission” of the $600 rental
 4   income was made with the intent to deceive creditors to satisfy
 5   § 727(a)(4)(A).    On this record, we conclude that the court’s
 6   finding as to the rental income was not clearly erroneous.
 7        As for Schneider’s § 727(a)(5) claim, which was also not
 8   pleaded with any specificity, the bankruptcy court found that no
 9   witness had testified as to what assets were at issue and/or
10   unaccounted for.   The only evidence before the court were
11   documents indicating that Jagar received funds from Schneider’s
12   trust account relating to the probate action.   The court found
13   that Jagar had accounted for a majority of the funds she received
14   from her late husband’s 401(k), which were rolled over into an IRA
15   and listed by Jagar as exempt.   The only other evidence of an
16   asset Jagar had prior to the petition date was presented in the
17   form of two checks, one dated March 28, 2010, made payable to
18   Schneider by the probate estate’s administrator for $102,784.76,
19   and the other dated April 4, 2010, reflecting the $32,784.76
20   Schneider paid to Jagar out of those funds, which she deposited on
21   May 1, 2010.   Jagar testified that Schneider kept the $70,000.00
22   difference.
23        Jagar’s bankruptcy case was filed on December 31, 2013, more
24
25
          7
           (...continued)
26   presented for the first time on appeal. In addition, Schneider
     has not provided any grounds for the Panel to take judicial notice
27   of a state court website. Accordingly, Schneider’s request is
     DENIED. However, our consideration of the website’s contents
28   would not change the outcome of this appeal.

                                      -22-
 1   than three years after she received the funds from Schneider.
 2   Given that Jagar has two children, owns a home, and her only other
 3   income is social security, the bankruptcy court found that her
 4   receipt of these funds was too remote from the petition date to
 5   support a claim under § 727(a)(5).      Schneider does not raise any
 6   specific argument with respect to the court’s findings on this
 7   claim.    Therefore, he has waived any such argument.   Smith v.
 8   Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999) (“[O]n appeal,
 9   arguments not raised by a party in its opening brief are deemed
10   waived.”).    In any event, we do not perceive the court’s findings
11   here to be illogical, implausible or without support in the
12   record.
13                               VI. CONCLUSION
14        The bankruptcy court did not err when it granted Jagar’s
15   motion under Civil Rule 52(c) and denied Schneider’s claims.
16   Accordingly, we AFFIRM.
17
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                                      -23-