Court Opinion

ID: 4397196
Source: CourtListenerOpinion
Date Created: 2019-05-15 21:00:25.131318+00
Date Added: 2024-06-11T14:31:14.890962
License: Public Domain

FILED
                                 NOT FOR PUBLICATION
                                                                             MAY 15 2019
                       UNITED STATES COURT OF APPEALS                   MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                                 FOR THE NINTH CIRCUIT

In re: JAMES DONZIL ROBERTS, Sr.;                  No.   17-60086
DEENA WALDMAN ROBERTS,
                                                   BAP No. 17-1010
               Debtors,

------------------------------                     MEMORANDUM*

JAMES DONZIL ROBERTS, Sr.,

               Appellant,

 v.

MICHAEL BARNES; CALIFORNIA
FARMS INVESTORS, LLC,

               Appellees.

                            Appeal from the Ninth Circuit
                             Bankruptcy Appellate Panel
           Taylor, Lafferty III, and Spraker, Bankruptcy Judges, Presiding

                                 Submitted May 13, 2019**
                                   Pasadena, California

      *
        This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
         The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: NGUYEN and OWENS, Circuit Judges, and ANTOON,*** District Judge.

      James Roberts appeals from the decision of the Bankruptcy Appellate Panel

(“BAP”) affirming the judgment of the bankruptcy court in favor of Michael

Barnes and California Farms Investors, LLC (collectively, “Barnes”). We have

jurisdiction under 28 U.S.C. § 158(d), and we affirm.

      The bankruptcy court entered judgment for Barnes in the amount of

$825,000. Roberts challenges that judgment on two grounds, arguing first that the

amount of the judgment should be offset by the value of the collateral Barnes

briefly possessed, and second that Barnes’ remedies are limited by California

Commercial Code section 9625 because Barnes allegedly disposed of the collateral

in a commercially unreasonable manner. Roberts concedes that he failed to present

these arguments to the bankruptcy court but argues that we have discretion to

consider them because (1) “review is required to ‘prevent a miscarriage of justice

or to preserve the integrity of the judicial process’” or (2) “the issue presented is

purely one of law and either does not depend on the factual record developed

below, or the pertinent record has been fully developed.” Mano-Y&M, Ltd. v.

Field (In re Mortg. Store, Inc.), 773 F.3d 990, 998 (9th Cir. 2014) (quoting In re

      ***
        The Honorable John Antoon II, United States District Judge for the
Middle District of Florida, sitting by designation.
                                            2
Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010)). We

agree with the BAP that neither of these exceptions applies here, and therefore we

do not reach the merits of Roberts’ challenges to the bankruptcy court’s judgment.

      1.     Roberts contends that the miscarriage of justice exception applies

because Barnes has recovered twice for the same loss – once by taking possession

of the collateral and a second time by the bankruptcy court’s judgment. He relies

on case law suggesting that “double recovery” constitutes a miscarriage of justice.

See, e.g., Experience Hendrix L.L.C. v. Hendrixlicensing.com Ltd, 762 F.3d 829,

841-42 (9th Cir. 2014).

      This case law is distinguishable, however. First, Barnes has not recovered

more than once. Although he briefly took possession of the collateral, he was

forced to assign it to other creditors. The $825,000 judgment therefore places

Barnes in the position he would have been in had Roberts not fraudulently induced

him to invest. Second, in the “double recovery” cases upon which Roberts relies,

the judgments were erroneous. Here, by contrast, the bankruptcy court’s judgment

was correct based on the claims and defenses presented. The mere possibility that

Roberts could have raised other defenses at trial, and that those defenses might

have resulted in a smaller judgment, does not convert the judgment entered by the

bankruptcy court into a miscarriage of justice.

                                          3
       2.      Roberts’ reliance on the exception for pure questions of law also fails.

As Roberts concedes, the offset and commercial reasonableness defenses he raises

for the first time on appeal turn on questions of fact that were not raised or

resolved at trial, such as (1) the value of the collateral, (2) the extent of the

venture’s liability to the other creditors and (3) whether Barnes disposed of the

collateral in a commercially reasonable manner. These defenses, therefore, do not

raise pure questions of law. See In re Mercury Interactive Corp. Sec. Litig., 618
F.3d at 993.

       AFFIRMED.

                                             4