Court Opinion

ID: 4366876
Source: CourtListenerOpinion
Date Created: 2019-02-11 22:00:51.72572+00
Date Added: 2024-06-11T14:21:56.490086
License: Public Domain

FILED
                                                                            FEB 11 2019
                           NOT FOR PUBLICATION
                                                                        SUSAN M. SPRAUL, CLERK
                                                                          U.S. BKCY. APP. PANEL
                                                                          OF THE NINTH CIRCUIT

             UNITED STATES BANKRUPTCY APPELLATE PANEL
                       OF THE NINTH CIRCUIT

In re:                                               BAP No. EC-18-1088-LBS

DONALD STEVEN PARKS,                                 Bk. No. 2:16-bk-23173

            Debtor.
DONALD STEVEN PARKS,

                    Appellant,

v.                                                   MEMORANDUM*

KIMBERLY J. HUSTED, Trustee,

                    Appellee.

                   Argued and Submitted on January 24, 2019
                           at Sacramento, California

                              Filed – February 11, 2019

                Appeal from the United States Bankruptcy Court
                     for the Eastern District of California

         *
        This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
          Honorable Christopher D. Jaime, Bankruptcy Judge, Presiding

Appearances:        Appellant Donald S. Parks argued pro se; Kristen Renfro
                    of Desmond, Nolan, Livaich & Cunningham argued for
                    Appellee.

Before: LAFFERTY, BRAND, and SPRAKER, Bankruptcy Judges.

                                 INTRODUCTION

      Debtor Donald Parks appeals the discharge order (“Discharge

Order”) entered in his chapter 71 bankruptcy case. But the relief Mr. Parks

seeks actually pertains more directly to other orders entered by the

bankruptcy court, which he did not appeal. One order approved the

settlement of fraudulent transfer litigation brought by the chapter 7 trustee,

Kimberly J. Husted (“Trustee”), against Mr. Parks’ ex-wife seeking to avoid

Mr. Parks’ pre-petition transfers to her of his interests in real properties

(the “Compromise Order”). The other order dismissed Trustee’s § 727

claims against Mr. Parks, clearing the way for him to receive his discharge

(the “Dismissal Order”).

      Mr. Parks has not demonstrated that the bankruptcy court erred in

      1
        Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101-1532, all “Rule” references are to the Federal Rules
of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of
Civil Procedure.

                                           2
entering the Discharge Order. Moreover, even if we were to reverse the

Discharge Order, such reversal would not give Mr. Parks the relief he

seeks. To the extent Mr. Parks assigns error to the Compromise Order and

the Dismissal Order, we lack jurisdiction to review those orders as they

were not timely appealed.

       We therefore AFFIRM.

                           FACTUAL BACKGROUND2

       In January 2015 a Kentucky state court entered a default judgment for

legal malpractice against Mr. Parks and in favor of Check Martin. At the

time judgment was entered, Mr. Parks was married to Edina Torlak and

       2
       The Panel waived the requirement of Rule 8018(b) that Appellant file and serve
an appendix to the brief containing excerpts of record. Therefore, in ascertaining the
relevant facts, we have exercised our discretion to review the bankruptcy court’s docket
and imaged papers in Case No. 16-23173 and related adversary proceedings. See Woods
& Erickson, LLP v. Leonard (In re AVI, Inc.), 389 B.R. 721, 725 n.2 (9th Cir. BAP 2008).

       Mr. Parks filed a “Motion for Judicial Notice” requesting the Panel to take
judicial notice of certain background facts. Under Fed. R. Evid. 201(b), we may take
judicial notice of facts that are not subject to reasonable dispute because they are
“generally known within the trial court's territorial jurisdiction . . . or . . . can be
accurately and readily determined from sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. 201(b). The factual recitation presented by Mr. Parks does not
meet those criteria. We therefore deny Mr. Parks’ request for judicial notice. See Credit
Alliance Corp. v. Idaho Asphalt Supply, Inc. (In re Blumer), 95 B.R. 143, 147 (9th Cir. BAP
1988) (bankruptcy court properly refused to take judicial notice of facts set forth in
witness deposition).

                                             3
held an interest in four parcels of real property, three of which were located

in Louisville, Kentucky, and the fourth in Granite Bay, California (the

“Properties”).

      Less than two weeks after entry of the malpractice judgment,

Mr. Parks and Ms. Torlak filed for divorce in Kentucky state court.

Pursuant to the parties’ marital settlement agreement, in February and

March 2015 Mr. Parks executed and recorded quitclaim deeds transferring

his interests in the Properties to Ms. Torlak.3

      In July 2015 Mr. Martin commenced a fraudulent transfer action

against Mr. Parks and Ms. Torlak in Kentucky state court with respect to

the transfers of Mr. Parks’ interests in the three Kentucky properties. In

May 2016, while the Kentucky litigation was still pending, Mr. Parks filed a

chapter 7 petition. Trustee filed two adversary proceedings. The first

sought denial of Mr. Parks’ discharge under §§ 727(a)(2), (a)(4), and (a)(5)

based on his concealment of and/or failures to disclose assets, including the

Properties. The second named Ms. Torlak as defendant and sought to avoid

as fraudulent and recover for the estate the transfers of Mr. Parks’ interests

in the Properties.

      Eventually, in September 2017, Trustee reached a compromise of the

fraudulent transfer litigation, which included settlement of Mr. Martin’s

      3
       According to his bankruptcy schedules, Mr. Parks' primary residence is the
Granite Bay property.

                                          4
state court fraudulent transfer claims. The settlement agreement provided

that Ms. Torlak would pay the estate $105,000 and Mr. Martin $4,100. In

return, Trustee and Mr. Martin would exchange mutual releases with

Ms. Torlak, withdraw any recorded lis pendens against the Properties, and

dismiss both Trustee’s and Mr. Martin’s fraudulent transfer actions.

Mr. Parks was served with notice of the compromise but did not file an

objection. The bankruptcy court approved the compromise by order

entered October 18, 2017.

      On October 31, 2017, Mr. Parks filed a motion to set aside the order

approving the compromise. The bankruptcy court denied the motion

without prejudice due to procedural defects. Mr. Parks never attempted to

re-file the motion.

      On February 12, 2018, after having received the $105,000 payment

from Ms. Torlak, Trustee filed a motion under Civil Rule 41 (applicable via

Rule 7041) to dismiss her § 727 action against Mr. Parks. On March 13,

2018, the date set for hearing on the motion to dismiss, Mr. Parks filed an

untimely objection, arguing that:

      I. The Trustee has created a procedurally unfair advantage
      over the Debtor by, 1) filing separate adversary complaints
      against the debtor and his ex-wife, 2) then litigating them
      separately in hopes that expensive litigation would obtain a
      settlement offer from doctor/non-petitioner ex-wife of the
      Debtor, 3) while simultaneously telling the Debtor that if he
      filed any motion it would greatly reduce his chances of getting

                                      5
      a discharge, and 4) while knowing that as soon as she had an
      offer from the ex-wife she could dismiss all complaints, grant
      Debtor his discharge and effectively avoid having to file a
      motion for summary judgment or contend with any affirmative
      action’s [sic] on the part of the Debtor.

      Mr. Parks did not appear at the hearing, and the bankruptcy court

entered the Dismissal Order. The next day, the Discharge Order was

entered. Mr. Parks filed a timely notice of appeal of the Discharge Order.

                               JURISDICTION

      The bankruptcy court had jurisdiction pursuant to 28 U.S.C. §§ 1334

and 157(b)(2)(A). We have jurisdiction under 28 U.S.C. § 158.

                                     ISSUE

      Whether the bankruptcy court erred in granting Mr. Parks a

discharge.

                           STANDARD OF REVIEW

      We review the bankruptcy court’s findings of fact for clear error and

its conclusions of law de novo. Adinolfi v. Meyer (In re Adinolfi), 543 B.R. 612,

614 (9th Cir. BAP 2016).

                                DISCUSSION

      During the pendency of this appeal, the Panel issued an order

informing Mr. Parks that “[t]he BAP’s authority is limited to review of the

order on appeal. The order on appeal granted a discharge to appellant.

Accordingly, the BAP’s review of this appeal is limited to whether the

                                        6
bankruptcy court erred in granting appellant a discharge.” Despite this

admonition, to the extent Mr. Parks’ arguments on appeal can be discerned,

they relate not to the propriety of the Discharge Order but rather the

Compromise Order and the Dismissal Order. Unfortunately, his approach

misconceives the functions of both the bankruptcy court and this Panel.

      To begin, Mr. Parks alleges that Benjamin Carter, Mr. Martin’s

attorney, contacted Trustee and tainted her view of the facts so that Trustee

failed to consider evidence that Mr. Parks never held any interests in the

Properties. He then alleges that Trustee violated her duties by “pressuring”

Mr. Parks to hold off on filing any dispositive motions in the § 727 action

until after Trustee finished discovery in the fraudulent transfer litigation.

According to Mr. Parks, Trustee intended to keep Mr. Parks “at bay while

she leveraged costly litigation against Torlak for a settlement, planning to

then quickly dismiss Appellant[‘]s case and grant a ‘hollow’ discharge,

effectively denying Appellant an opportunity to defend himself.”

Mr. Parks contends that he did not receive an “actual” discharge because

Trustee collected funds from Ms. Torlak and used it to pay creditors, when

the purpose of bankruptcy is to discharge debts, not pay them.

      Mr. Parks also contends that he never had any interests in the

Properties and that Trustee never established that any of his conduct was

blameworthy, nor did she establish that he did not receive reasonably

equivalent value for the Properties.

                                       7
      Finally, he asserts that Mr. Martin’s “claims” should be denied

because Mr. Martin’s counsel purportedly failed to inform Mr. Parks who

his client was before discussing Mr. Parks’ case with him.

      None of these arguments are relevant to whether the bankruptcy

court properly entered the Discharge Order. Because Mr. Parks has not

specifically and distinctly addressed this issue, we may summarily affirm

the bankruptcy court on that basis alone. See Padgett v. Wright, 587 F.3d 983,

986 n.2 (9th Cir. 2009) (per curiam) (appellate court “will not ordinarily

consider matters on appeal that are not specifically and distinctly raised

and argued in appellant's opening brief”). We also do not consider

arguments on appeal that were not raised before the bankruptcy court

sufficiently for the bankruptcy court to rule upon them. See O’Rourke v.

Seaboard Surety Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957 (9th Cir. 1989).

Mr. Parks did not object to the entry of discharge in the bankruptcy court.

He thus waived the opportunity to appeal from the Discharge Order. See

In re Parmenter, BAP No. 15-1170-TaKuJu, 2016 WL 7189829, at *2 (9th Cir.

BAP Dec. 5, 2016).

      To the extent Mr. Parks intended a collateral attack on the

Compromise Order or the Dismissal Order, as stated, those orders are now

final and incapable of attack through any appeal.4 See id.

      4
          Even if we had jurisdiction to review the Compromise Order or the Dismissal
                                                                            (continued...)

                                             8
                                  CONCLUSION

      For these reasons, we AFFIRM.

      4
         (...continued)
Order, Mr. Parks did not timely present any of his arguments or appear at the hearings
on the motions underlying those orders. Additionally, nothing in the bankruptcy court
filings suggests a plausible basis for Mr. Parks to have had standing to object to the
compromise of the fraudulent transfer action.

                                           9