Court Opinion

ID: 173738
Source: CourtListenerOpinion
Date Created: 2010-08-20 00:02:48+00
Date Added: 2024-06-11T17:25:26.820489
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             AUG 19 2010

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

In re: RODEO CANON DEVELOPMENT                   No. 07-56718
CORPORATION,
                                                 BAP No. CC-07-01088-KMoD
              Debtor,

                                                 MEMORANDUM *
BEVERLY RODEO DEVELOPMENT
CORPORATION; FRED YASSIAN,

              Appellants,

  v.

ROBERT L. GOODRICH; WILLIAM
WARNICK; ANN WARNICK; JILL
WARNICK; ALLAN WARNICK;
DAVID PERRY; DANNY PERRY,

              Appellees.

                          Appeal from the Ninth Circuit
                           Bankruptcy Appellate Panel
              Klein, Montali, and Dunn, Bankruptcy Judges, Presiding

In the Matter of: RODEO CANON                    No. 08-56760
DEVELOPMENT CORPORATION,
                                                 D.C. No. 2:07-cv-01510-GPS

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
             Debtor,

BEVERLY RODEO DEVELOPMENT
CORPORATION, a California
corporation, 9615 BRIGHTON WAY, a
California limited liability partnership;
FRED YASSIAN,

             Appellants,

 v.

BIJAN CHADORCHI, an individual;
FERESHTEH CHADORCHI, an
individual; THE CHADORCHI LIVING
TRUST,

             Appellees.

In the Matter of: RODEO CANON                   No. 08-56762
DEVELOPMENT CORPORATION,
                                                D.C. No. 2:07-cv-01515-GPS
            Debtor,

BEVERLY RODEO DEVELOPMENT
CORPORATION, a California
corporation,

            Appellants,

 v.

BIJAN CHADORCHI; FERESHTEH
CHADORCHI; CHADORCHI LIVING

                                            2
TRUST,

           Appellees.

In the Matter of: RODEO CANON           No. 08-56773
DEVELOPMENT CORPORATION,
                                        D.C. No. 2:07-cv-08105-GPS
           Debtor,

FRED YASSIAN; BEVERLY RODEO
DEVELOPMENT CORPORATION, a
California corporation; 9615 BRIGHTON
WAY, a California limited liability
partnership,

           Appellants,

 v.

BIJAN CHADORCHI, an individual;
FERESHTEH CHADORCHI, an
individual; THE CHADORCHI LIVING
TRUST,

           Appellees.

In the Matter of: RODEO CANON           No. 08-56807
DEVELOPMENT CORPORATION,
                                        D.C. No. 2:07-cv-04833-GPS
           Debtor,

THE CHADORCHI LIVING TRUST;

                                   3
FERESHTEH CHADORCHI; BIJAN
CHADORCHI,

              Appellants,

  v.

BEVERLY RODEO DEVELOPMENT
CORPORATION; FRED YASSIAN,
AKA Fred Yassian; ROBERT L.
GOODRICH, Trustee,

              Appellees.

                   Appeals from the United States District Court
                       for the Central District of California
                    George Schiavelli, District Judge, Presiding

                        Argued and Submitted June 9, 2010
                              Pasadena, California

Before: GOODWIN and RAWLINSON, Circuit Judges, and MARBLEY, District
Judge.**

       In these consolidated appeals, Appellants Beverly Rodeo Development

Corporation (Beverly Rodeo) and Fred Yassian (Yassian, and together with

Beverly Rodeo, the Yassian Parties) contend that the bankruptcy court erred when

it denied their various attempts to set aside, vacate, or obtain compensation for a

       **
            The Honorable Algenon L. Marbley, United States District Judge for
the Southern District of Ohio, sitting by designation.

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final sale order (Sale Order) entered by the bankruptcy court in 2001. On cross-

appeal, Appellees and Cross-Appellants Bijan Chadorchi, Fereshteh Chadorchi,

and The Chadorchi Living Trust (the Chadorchi Parties) allege that the bankruptcy

court improperly denied their motion for attorneys’ fees and costs.

      1. The district court properly affirmed the bankruptcy court’s order denying

the Yassian Parties’ Fed. R. Civ. Pro. 60(b) 1 motion, which was filed for the

purpose of setting aside or vacating the Sale Order. The bankruptcy court

approved the sale of the property pursuant to 11 U.S.C. § 363(b)(1) and (f)(4).

Having failed to obtain a stay of the sale pending appeal, the sale closed and the

Chadorchi Parties obtained title to the property free and clear of all interests. See

Ewell v. Diebert (In re Ewell), 958 F.2d 276, 279 (9th Cir. 2002).

      2. The bankruptcy court’s conclusion that fraud on the court was not

established was proper because “[t]here is simply no indication of a fraudulent plan

or scheme designed to improperly influence the [bankruptcy court] . . .” Abatti v.

Comm’r of Int. Rev. Serv., 859 F.2d 115, 118 (9th Cir. 1988). Similarly, there is

      1
       Rule 60(b) is made applicable to bankruptcy proceedings through Fed. R.
Bankr. Pro. 9024.

                                           5
nothing to indicate that the bankruptcy court was actually deceived by any

fraudulent misrepresentations, false statements, or omissions in authorizing the sale

of the property.

      3. The bankruptcy court properly granted summary judgment to the

Chadorchi Parties in the Goodrich Adversary proceeding. As discussed above, the

Yassian Parties failed to provide evidence to substantiate their allegations of fraud

on the court. The bankruptcy court struck all deposition testimony submitted by

the Yassian Parties, and there is nothing to suggest that the bankruptcy court

committed an abuse of discretion in making its evidentiary rulings. See Johnson v.

Neilson (In re Slatkin), 525 F.3d 805, 811 (9th Cir. 2008).

      4. The bankruptcy court properly dismissed the claims asserted by the

Yassian Parties against the Chadorchi Parties in the Yassian Adversary proceeding

for failure to state a claim upon which relief could be granted. The Yassian Parties

sought a declaration that the Sale Order was void or voidable for want of subject

matter jurisdiction or for fraud on the court. Even assuming claim preclusion did

not apply, issue preclusion did. See Frankfort Digital Servs., Ltd. v. Kistler (In re

Reynoso), 477 F.3d 1117, 1122 (9th Cir. 2007). These issues were litigated,

                                           6
necessarily decided, and resulted in final orders or judgments against the Yassian

Parties in the litigation involving the Sale Avoidance Motion and Goodrich

Adversary proceeding. See id.

      In the alternative, the Yassian Parties sought a declaration determining that

the Chadorchi Parties held nothing more than bare legal title to the property.

However, if the Sale Order is presumed to be valid, the bankruptcy court lacked

jurisdiction to determine rights to the property because it was no longer property of

the estate. See McQuaid v. Owners of NW 20 Real Estate (In re Federal Shopping

Way, Inc.), 717 F.2d 1264, 1272 (9th Cir. 1983). Therefore, the bankruptcy court

did not err in concluding that no declaratory relief could be granted.

       Because we conclude that the bankruptcy court properly dismissed the

Yassian Parties’ alternative claim for relief for failure to state a claim upon which

relief could be granted, we also conclude that the bankruptcy court did not err in

denying as moot the Yassian Parties’ partial motion for summary judgment.

      5. The bankruptcy court’s denial of the Yassian Parties’ request for approval

and payment of an administrative expense claim was correct. In paragraph 18 of

the Settlement Deal Term Sheet (Settlement), the Yassian Parties expressly waived

their right to assert any known and unknown claims they may have had against the

                                           7
estate in connection with the property. We do not consider the Yassian Parties’

allegations that they are entitled to recover administrative expenses from any

actions or inactions of the current trustee because these arguments have been made

for the first time on appeal. See Harden v. Roadway Package Systems, Inc., 249
F.3d 1137, 1141 (9th Cir. 2001).

      6. The bankruptcy court’s denial of the Chadorchi Parties’ motion for

attorneys’ fees was proper. The Chadorchi Parties’ reliance on Adam v.

DeCharon, 31 Cal. App. 4th 708 (1995), is misplaced. The decision in Adam does

not stand for the proposition that an action filed in federal court can be deemed to

“arise out of” a contract governed by state law merely because the action would not

have existed “but for” the contract.

      Similarly, Lafarge Conseils ET Etudes, S.A. v. Kaiser Cement & Gypsum

Corp., 791 F.2d 1334 (9th Cir. 1986), is inapposite. In Lafarge, we affirmed a

district court’s award of attorneys’ fees to an appellee who had successfully

opposed a Rule 60(b) motion filed for the purpose of vacating an arbitration award.

See id. at 1339-41. However, in this case, unlike Lafarge, the Yassian Parties’

claims in the Goodrich Adversary proceeding were not filed for the purpose of

vacating an order or judgment that had been entered pursuant to the terms of a

                                          8
provision in the parties’ underlying contract. Therefore, we conclude that the

claims asserted in the Goodrich Adversary proceeding did not “arise out of” the

Purchase Agreement.

      Finally, because the Chadorchi Parties have not addressed the bankruptcy

court’s denial of their request for costs in either of their briefs, they have waived

the right to challenge that decision on appeal. See Blanford v. Sacramento County,

406 F.3d 1110, 1114 n.8 (9th Cir. 2005).

      AFFIRMED.

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