Court Opinion

ID: 4192701
Source: CourtListenerOpinion
Date Created: 2017-08-03 17:02:16.75875+00
Date Added: 2024-06-11T14:40:20.252714
License: Public Domain

FILED
 1                         NOT FOR PUBLICATION
                                                                   AUG 08 2016
 2
                                                               SUSAN M. SPRAUL, CLERK
                                                                  U.S. BKCY. APP. PANEL
 3            UNITED STATES BANKRUPTCY APPELLATE PANEL            OF THE NINTH CIRCUIT

 4                            OF THE NINTH CIRCUIT
 5
 6   In re:                        )      BAP No.     CC-15-1348-FDKu
                                   )
 7   RICHARD JAY BLASKEY,          )      Bk. No.     8:11-bk-21187-ES
                                   )
 8                  Debtor.        )      Adv. Pro. 8:11-ap-01462-ES
     _____________________________ )
 9                                 )
     BARTON PROPERTIES, INC.;      )
10   STEPHEN SELINGER,             )
                                   )
11                  Appellants,    )
                                   )
12   v.                            )      MEMORANDUM*
                                   )
13   RICHARD JAY BLASKEY,          )
                                   )
14                  Appellee.      )
     ______________________________)
15
                     Argued and Submitted on July 28, 2016
16                          at Pasadena, California
17                           Filed – August 8, 2016
18               Appeal from the United States Bankruptcy Court
                     for the Central District of California
19
          Honorable Erithe A. Smith, Bankruptcy Judge, Presiding
20
21   Appearances:     Anthony A. Patel argued for Appellants Barton
                      Properties, Inc. and Stephen Selinger; Chad V.
22                    Haes of Marshack Hays LLP argued for Appellee
                      Richard Jay Blaskey.
23
24   Before: FARIS, DUNN, and KURTZ, Bankruptcy Judges.
25
26        *
            This disposition is not appropriate for publication.
27   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
28   9th Cir. BAP Rule 8024-1.
 1                                INTRODUCTION
 2        This appeal arises out of a $1,000,320 state court judgment
 3   against appellee/chapter 71 debtor Richard Jay Blaskey in favor
 4   of appellants Barton Properties, Inc. and Stephen Selinger.    In
 5   summary, the bankruptcy court determined that the state court
 6   judgment was not nondischargeable debt under §§ 523(a)(2)(A),
 7   (a)(4), or (a)(6).   On appeal, we affirmed as to § 523(a)(4), but
 8   vacated and remanded the bankruptcy court’s judgment as to
 9   §§ 523(a)(2)(A) and (a)(6) for the court to apply the correct
10   standard of proof.   On remand, the court articulated the ordinary
11   preponderance of the evidence standard and reaffirmed its prior
12   determination that Appellants failed to establish that
13   Mr. Blaskey’s debt was nondischargeable under §§ 523(a)(2)(A) and
14   (a)(6).   We find no error in the court’s conclusion.
15   Accordingly, we AFFIRM.
16                             FACTUAL BACKGROUND2
17   A.   Proceedings before the bankruptcy court3
18        Appellants retained Mr. Blaskey, an attorney, in 2004 to
19   represent them in various state court cases.    Among other legal
20   matters, the parties agreed that Mr. Blaskey would represent
21   Appellants in three unrelated lawsuits.
22
          1
23          Unless specified otherwise, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
24
          2
            We have exercised our discretion to review the bankruptcy
25   court’s docket, as appropriate. See Woods & Erickson, LLP v.
26   Leonard (In re AVI, Inc.), 389 B.R. 721, 725 n.2 (9th Cir. BAP
     2008).
27
          3
            The following facts are taken from our decision in the
28   previous appeal, BAP No. CC-14-1340-KuDKi, with some alterations.

                                       2
 1        In 2007, Appellants discovered that Mr. Blaskey had been
 2   derelict in representing them in the underlying actions to such
 3   an extent that the state court presiding over the underlying
 4   actions had entered adverse orders and judgments against Barton
 5   Properties.   As a result, in 2008, Barton Properties sued
 6   Mr. Blaskey in state court for legal malpractice, breach of
 7   contract, fraud, and breach of fiduciary duty.    The state court
 8   entered a default judgment against Mr. Blaskey in 2010.
 9        Mr. Blaskey commenced his bankruptcy case in August 2011,
10   and Appellants filed their nondischargeability adversary
11   proceeding shortly thereafter.   Appellants alleged three distinct
12   claims for relief under §§ 523(a)(2)(A), (a)(4), and (a)(6).
13        The court held the trial on Appellants’ claims in March
14   2014.   Appellants offered into evidence a handful of exhibits and
15   presented the testimony of Mr. Selinger, who at all relevant
16   times was the president of Barton Properties.    Mr. Selinger
17   testified that, in 2006, Mr. Blaskey told him that he was taking
18   care of all of the litigation and settlement tasks in the
19   underlying actions.   If Mr. Selinger had known the truth – that
20   Mr. Blaskey was derelict in his duties – Barton Properties would
21   not have paid Mr. Blaskey’s 2006 invoices for legal fees to the
22   tune of roughly $50,000.   Mr. Selinger also testified that, if
23   Mr. Blaskey had not lied to him about the performance of his
24   duties, he would have hired new counsel, who might have had
25   opportunities to prevent or have set aside some or all of the
26   adverse orders and judgments entered in the underlying actions.
27        Notably, Mr. Selinger’s testimony contained virtually no
28   specifics about what Mr. Blaskey reported to him about the status

                                      3
 1   of the underlying actions, when Mr. Blaskey made particular
 2   reports, when Barton Properties made payments to Mr. Blaskey, and
 3   how much was paid in each instance.    Furthermore, Mr. Selinger
 4   offered no specifics regarding the remedial opportunities
 5   available at the time but later lost because Barton Properties
 6   was relying on Mr. Blaskey’s misstatements.
 7        Appellants offered two distinct types of evidence to
 8   demonstrate the amount of damages they suffered.    First, there
 9   was Mr. Selinger’s testimony.    Mr. Selinger gave a generalized
10   account of damages, broken down by underlying action.    According
11   to Mr. Selinger, as a result of Mr. Blaskey’s conduct, Barton
12   Properties suffered damages of roughly $470,000, $60,000, and
13   $450,000, respectively, in the three underlying actions.      For the
14   most part, Mr. Selinger did not offer specific details concretely
15   demonstrating how Mr. Blaskey’s nondischargeable conduct caused
16   Barton Properties’ damages in the underlying actions.
17        Second, Appellants produced documentary evidence.      They
18   offered as exhibits the complaint filed and the $1 million
19   default judgment entered in their state court action against
20   Mr. Blaskey.    Appellants in essence asserted that issue
21   preclusion applied and that these two documents established their
22   damages of $1 million.    But Appellants’ issue preclusion argument
23   went further.    According to Appellants, the state court judgment
24   not only conclusively established Mr. Blaskey’s liability for
25   $1 million but also conclusively established that the judgment
26   debt was nondischargeable – that Mr. Blaskey was precluded from
27   arguing in the adversary proceeding that the $1 million in
28   damages resulted from anything other than nondischargeable

                                       4
 1   conduct.
 2        Mr. Blaskey was not present at trial, so the court struck
 3   his written testimony.   Mr. Blaskey’s counsel did not offer any
 4   further evidence.
 5        After the conclusion of the trial, the bankruptcy court
 6   announced its findings of fact and conclusions of law.   The
 7   bankruptcy court rejected Appellants’ assertion that they were
 8   entitled to issue preclusion based on the state court judgment.
 9   The bankruptcy court pointed out that issue preclusion was not
10   available unless the issues in question were the subject of
11   explicit findings by the state court or, alternately, implicit
12   findings on those issues were essential to support the state
13   court’s judgment.   The bankruptcy court pointed out that the
14   state court judgment was not supported by any explicit findings
15   and that it was impossible to tell on which causes of action
16   Appellants had prevailed.   Consequently, the bankruptcy court
17   held that it could not apply issue preclusion to determine the
18   dischargeability of Mr. Blaskey’s $1 million judgment debt
19   because Appellants had not satisfied the “necessarily decided”
20   element for issue preclusion.
21        The court next addressed the trial record and whether
22   Appellants had made a sufficient showing that the $1 million
23   judgment debt, or any portion thereof, should be declared
24   nondischargeable under § 523(a)(2)(A).   The court found that
25   Appellants had not established by a preponderance of the evidence
26   that their damages resulted from fraudulent conduct.   According
27   to the court, there was either no evidence or insufficient
28   evidence connecting any particular misrepresentation Mr. Blaskey

                                      5
 1   made either to the $50,000 in legal fees Appellants paid
 2   Mr. Blaskey or to the roughly $1 million in damages Appellants
 3   apparently suffered in the underlying actions.
 4        The court further explained that Appellants’ evidentiary
 5   deficiencies were exacerbated by the lack of any documentation to
 6   support the amounts Mr. Blaskey billed them or the amounts they
 7   actually paid.   The court also pointed out that Appellants’ lack
 8   of specificity regarding the alleged representations worked
 9   against them proving their nondischargeability claims by a
10   preponderance of the evidence.
11        As for Appellants’ § 523(a)(4) claim, the bankruptcy court
12   found that there was no evidence of any express or technical
13   trust as to any of the monies Appellants paid to Mr. Blaskey and
14   there was insufficient evidence of a defalcation within the
15   meaning of the statute.   And as for Appellants’ § 523(a)(6)
16   claim, the bankruptcy court found there was insufficient evidence
17   that Mr. Blaskey subjectively intended to injure Appellants.
18        During its ruling, the bankruptcy court stated multiple
19   times that Appellants bore the burden of proof to establish all
20   of the nondischargeability elements by a preponderance of the
21   evidence.   However, the bankruptcy court also made a couple of
22   statements indicating that the preponderance of the evidence
23   standard has a special meaning or gloss in nondischargeability
24   litigation.   For instance, the bankruptcy court stated that it
25   was “required to view the evidence strictly against the creditor
26   and liberally in favor of the debtor” and “in the light most
27   favorably to the defendant and strictly against the plaintiff.”
28        On June 20, 2014, the bankruptcy court entered judgment in

                                      6
 1   favor of Mr. Blaskey and against Appellants.
 2   B.   Appellate review by the BAP
 3        Appellants appealed the bankruptcy court’s decision to the
 4   BAP, BAP No. CC-14-1340-KuDKi (“First Appeal”).
 5        The Panel held that the bankruptcy court correctly
 6   determined that issue preclusion did not apply to the state
 7   court’s default judgment.   The Panel also affirmed the bankruptcy
 8   court’s decision in favor of Mr. Blaskey on the § 523(a)(4)
 9   claim.
10        The Panel held, however, that the court misapplied the
11   standard of proof on the §§ 523(a)(2)(A) and (a)(6) claims.
12   While the court correctly identified the standard as a
13   preponderance of the evidence, it conflated the strict
14   construction of the statutory language of § 523(a) with the
15   standard of proof, which only requires that a fact is more likely
16   than not.
17        Accordingly, the Panel remanded the case to the bankruptcy
18   court for consideration of the §§ 523(a)(2)(A) and (a)(6) claims
19   under a non-heightened standard of proof.   The Panel did not
20   direct any particular procedure or result on remand, but only
21   required that the bankruptcy court apply the ordinary
22   preponderance of the evidence standard.
23   C.   The bankruptcy court’s decision on remand
24        Without holding any further hearings or receiving additional
25   materials from the parties, the bankruptcy court issued its order
26   in response to the Panel’s decision in the First Appeal (“Order
27   on Remand”).   The court summarized the procedural history of the
28   case and stated that it had reviewed the entire trial record

                                        7
 1   under the preponderance of the evidence standard.   It concluded
 2   that “1) no further court proceedings or briefing is necessary
 3   and 2) judgment should be entered in favor of Defendant as to the
 4   § 523(a)(2)(A) and (6) claims based upon the findings and
 5   conclusions set forth in the Oral Ruling, which is incorporated
 6   by reference herein.”   In other words, the court reaffirmed its
 7   previous ruling in its entirety.
 8        Appellants timely filed their notice of appeal from the
 9   Order on Remand.
10                               JURISDICTION
11        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
12   §§ 1334 and 157(b)(2)(I).   We have jurisdiction under 28 U.S.C.
13   § 158.
14                                  ISSUES
15        (1) Whether the bankruptcy court erred in its application of
16   the preponderance of the evidence standard.
17        (2) Whether the bankruptcy court erred when it determined
18   that Appellants did not establish their §§ 523(a)(2)(A) and
19   (a)(6) claims.
20        (3) Whether the bankruptcy court erred in its consideration
21   of the parties’ evidence and objections.
22        (4) Whether the bankruptcy court violated public policy and
23   equitable principles in ruling in favor of Mr. Blaskey.
24        (5) Whether the bankruptcy court correctly followed the
25   BAP’s decision in the First Appeal.
26                           STANDARDS OF REVIEW
27        In bankruptcy discharge appeals, we review the bankruptcy
28   court’s findings of fact for clear error and conclusions of law

                                        8
 1   de novo.   We apply de novo review to mixed questions of law and
 2   fact that require consideration of legal concepts and the
 3   exercise of judgment about the values that animate the legal
 4   principles.   Wolkowitz v. Beverly (In re Beverly), 374 B.R. 221,
 5   230 (9th Cir. BAP 2007), aff’d in part & dismissed in part,
 6   551 F.3d 1092 (9th Cir. 2008); see also Honkanen v. Hopper
 7   (In re Honkanen), 446 B.R. 373, 382 (9th Cir. BAP 2011) (the
 8   ultimate question of whether a particular debt is dischargeable
 9   is a mixed question of fact and law reviewed de novo).
10        “Whether a requisite element of a § 523(a)(2)(A) claim is
11   present is a factual determination reviewed for clear error.”
12   Tallant v. Kaufman (In re Tallant), 218 B.R. 58, 63 (9th Cir. BAP
13   1998).   Similarly, “[w]hether a debtor’s conduct is willful and
14   malicious under § 523(a)(6) is a question of fact reviewed for
15   clear error.”   Banks v. Gill Distrib. Ctrs., Inc. (In re Banks),
16   263 F.3d 862, 869 (9th Cir. 2001).
17        Factual findings are clearly erroneous if they are
18   illogical, implausible, or without support in the record.    Retz
19   v. Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010).    If
20   two views of the evidence are possible, the trial judge’s choice
21   between them cannot be clearly erroneous.    Anderson v. City of
22   Bessemer City, N.C., 470 U.S. 564, 574 (1985).
23        We review a bankruptcy court’s evidentiary rulings for abuse
24   of discretion, and then only reverse if any error would have been
25   prejudicial to the appellant.   Mbunda v. Van Zandt
26   (In re Mbunda), 484 B.R. 344, 351 (9th Cir. BAP 2012), aff’d,
27   604 F. App’x 552 (9th Cir. 2015).    To determine whether the
28   bankruptcy court has abused its discretion, we conduct a two-step

                                      9
 1   inquiry: (1) we review de novo whether the bankruptcy court
 2   “identified the correct legal rule to apply to the relief
 3   requested” and (2) if it did, we consider whether the bankruptcy
 4   court's application of the legal standard was illogical,
 5   implausible, or “without support in inferences that may be drawn
 6   from the facts in the record.”    United States v. Hinkson,
 7   585 F.3d 1247, 1262–63 & n.21 (9th Cir. 2009) (en banc).
 8        “We afford broad discretion to a district court’s
 9   evidentiary rulings.     To reverse such a ruling, we must find that
10   the district court abused its discretion and that the error was
11   prejudicial.   A reviewing court should find prejudice only if it
12   concludes that, more probably than not, the lower court’s error
13   tainted the verdict.”    In re Mbunda, 484 B.R. at 352 (quoting
14   Harper v. City of L.A., 533 F.3d 1010, 1030 (9th Cir. 2008)).
15        We review de novo the bankruptcy court’s compliance with the
16   mandate of an appellate court.    See United States v. Kellington,
17   217 F.3d 1084, 1092 (9th Cir. 2000).
18                                 DISCUSSION
19   A.   The bankruptcy court correctly applied the preponderance of
          the evidence standard on remand as to Appellants’
20        §§ 523(a)(2)(A) and (a)(6) claims.
21        1.    The bankruptcy court correctly followed the BAP’s
                instruction on remand.
22
23        Appellants argue that the bankruptcy court did not adhere to
24   the BAP’s instruction on remand from the First Appeal, because
25   the court did not hold further proceedings, request additional
26   briefing, explain how it applied the preponderance of the
27   evidence standard, or identify findings of facts and conclusions
28   of law.   We disagree.

                                       10
 1          Under the rule of mandate, “[o]n remand, a trial court may
 2   not deviate from the mandate of an appellate court.”    Commercial
 3   Paper Holders v. Hine (In re Beverly Hills Bancorp), 752 F.2d
 4   1334, 1337 (9th Cir. 1984).    “‘The rule of mandate is similar to,
 5   but broader than, the law of the case doctrine.’    A district
 6   court that has received the mandate of an appellate court cannot
 7   vary or examine that mandate for any purpose other than executing
 8   it.”    Hall v. City of L.A., 697 F.3d 1059, 1067 (9th Cir. 2012)
 9   (quoting United States v. Cote, 51 F.3d 178, 181 (9th Cir.
10   1995)); see AT&T Universal Card Servs. v. Black (In re Black),
11   222 B.R. 896, 900 (9th Cir. BAP 1998) (“When a case has been
12   decided by an appellate court and remanded, the trial court ‘must
13   proceed in accordance with the mandate and such law of the case
14   as was established by the appellate court.’” (citation omitted)).
15   However, “the rule of mandate allows a lower court to decide
16   anything not foreclosed by the mandate.”    Hall, 697 F.3d at 1067.
17          The Panel only ordered that the bankruptcy court apply the
18   proper standard of proof on remand.    It did not require the
19   bankruptcy court to hold further proceedings, and it specifically
20   stated that it did not require “the bankruptcy court [to] make
21   different findings.”    Rather, it said that, “before we can review
22   the bankruptcy court’s findings, we need to ensure that the
23   bankruptcy court applied the ordinary preponderance of the
24   evidence standard.”
25          The bankruptcy court stated in its Order on Remand that it
26   reviewed the entire trial record under the ordinary preponderance
27   of the evidence standard and that, under the normal preponderance
28   standard, it would reach the same result.    This is exactly

                                      11
 1   consistent with our mandate.
 2        2.   The court did not err in ruling in favor of Mr. Blaskey
               on Appellants’ § 523(a)(2)(A) claim.
 3
 4        Section 523(a)(2)(A) prohibits the discharge of any
 5   obligation for money, property, services, or credit, to the
 6   extent that the money, property, services, or credit were
 7   obtained by fraud, false pretenses, or false representations.
 8   § 523(a)(2)(A).   The Ninth Circuit has consistently held that a
 9   claim of non-dischargeability under § 523(a)(2)(A) requires the
10   creditor to demonstrate five elements:
11        (1) the debtor made . . . representations;
12        (2) that at the time he knew they were false;
13        (3) that he made them with the intention and purpose
          of deceiving the creditor;
14
          (4) that the creditor relied on such representations;
15        [and]
16        (5) that the creditor sustained the alleged loss and
          damage as the proximate result of the
17        misrepresentations having been made.
18   Ghomeshi v. Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir.
19   2010) (quoting Am. Express Travel Related Servs. Co. v. Hashemi
20   (In re Hashemi), 104 F.3d 1122, 1125 (9th Cir. 1996)).
21        In the present case, the court determined that Appellants
22   failed to establish that the state court judgment was
23   nondischargeable.   Although the court noted that it is
24   “undisputed . . . that Mr. Blaskey did not perform all services,”
25   it held that the evidence did not establish the nature and
26   substance of the alleged misrepresentations, the causal
27   connection between those misrepresentations and any damages, and
28   the amount of any resulting damages.

                                     12
 1        The bankruptcy court did not clearly err when it found that
 2   Appellants’ evidence - which all parties and the court agreed was
 3   “thin” - was not sufficient to carry their burden of proof.   The
 4   Appellants failed to establish that Mr. Blaskey made false
 5   statements that he knew to be false with the expectation that
 6   Appellants would rely on those statements.   They also failed to
 7   establish damages attributable to the alleged
 8   misrepresentations.4   The court did not commit clear error when
 9   it held that Appellants failed to prove their case by a
10   preponderance of the evidence.
11        3.   The court did not err by ruling in favor of Mr. Blaskey
               on Appellants’ § 523(a)(6) claim.
12
13        Similarly, the court did not err when it determined that
14   Appellants did not meet their burden of proof regarding their
15   § 523(a)(6) claim.
16        Section 523(a)(6) provides an exception to discharge for
17   debts “for willful and malicious injury by the debtor to another
18   entity or to the property of another entity.”   “A determination
19   whether a particular debt is for ‘willful and malicious injury by
20   the debtor to another’ under section 523(a)(6) requires
21   application of a two-pronged test to apply to the conduct giving
22
23
          4
            Appellants argue that the superior court judgment
24   established the amount of damages, such that the bankruptcy court
     must afford it issue preclusive effect. We rejected this
25   argument in the First Appeal and will not revisit it here.
26
          In any event, the bankruptcy court properly determined that
27   Appellants failed to prove a causal relation between the alleged
     misrepresentations and their alleged damages, so we need not
28   examine the calculation of damages here.

                                      13
 1   rise to the injury.   The creditor must prove that the debtor’s
 2   conduct in causing the injuries was both willful and malicious.”
 3   Suarez v. Barrett (In re Suarez), 400 B.R. 732, 736 (9th Cir. BAP
 4   2009), aff’d, 529 F. App’x 832 (9th Cir. 2013).    First,
 5   “[w]illfulness requires proof that the debtor deliberately or
 6   intentionally injured the creditor, and that in doing so, the
 7   debtor intended the consequences of his act, not just the act
 8   itself.”   Id. at 736-37.   Second, “[f]or conduct to be malicious,
 9   the creditor must prove that the debtor: (1) committed a wrongful
10   act; (2) done intentionally; (3) which necessarily causes injury;
11   and (4) was done without just cause or excuse.”    Id. at 737.
12        The bankruptcy court held that Appellants failed to
13   establish the elements of § 523(a)(6).    It said that the
14   conclusory statements in the complaint were insufficient to
15   establish willful and malicious injury.    It also said that
16   Appellants did not focus on § 523(a)(6) at trial and could not
17   simply rely on their arguments concerning § 523(a)(2)(A).      We
18   discern no error.
19        Appellants’ evidence fails to establish either the “willful”
20   or “malicious” prong required by § 523(a)(6).    As noted by the
21   bankruptcy court, Mr. Selinger’s testimony did not prove
22   Mr. Blaskey’s intent to injure Appellants.    Even on appeal,
23   Appellants fail to point to any evidence establishing
24   Mr. Blaskey’s willful and malicious conduct.    Accordingly, the
25   court did not err in rejecting Appellants’ § 523(a)(6) claim.
26        4.    Appellants’ other evidentiary arguments are misplaced.
27        Appellants also argue that the bankruptcy court
28   misunderstood the nature of the case or otherwise erred in

                                      14
 1   discounting their evidence.   We reject these arguments.
 2        Appellants contend that the court misconstrued the facts to
 3   reflect mere negligence, rather than “lies, deceit and cover-up.”
 4   They imply that the court was reluctant to reach the latter
 5   conclusion, because of “what it may say about our legal
 6   system[,]” and the court “was loathe to go down that path.”
 7        We find no merit in Appellants’ position.    The bankruptcy
 8   court properly found that Mr. Selinger’s testimony simply did not
 9   establish, by a preponderance of the evidence, each of the
10   elements of their claims.   See Hussain v. Malik (In re Hussain),
11   508 B.R. 417, 425 (9th Cir. BAP 2014) (“the bankruptcy court was
12   in the best position to evaluate the documentary and testimonial
13   evidence”).   Nothing in the record suggests that the court was
14   biased by a desire to protect the reputation of lawyers or the
15   legal system.
16        They also contend that the court must accept Mr. Selinger’s
17   testimony, because Mr. Blaskey did not offer any testimony to
18   refute it.    But they ignore the fact that they had the ultimate
19   burden of proving their claims by a preponderance of the
20   evidence.    See generally Brown v. Electrolux Home Prods., Inc.,
21   817 F.3d 1225, 1233 (11th Cir. 2016) (“And the entire point of a
22   burden of proof is that, if doubts remain about whether the
23   standard is satisfied, ‘the party with the burden of proof
24   loses.’”); United States v. 15 Bosworth St., 236 F.3d 50, 55 (1st
25   Cir. 2001) (“when there is insufficient evidence on a particular
26   issue, that issue must be resolved against the party who bears
27   the burden of proof” (emphasis in original)).    The bankruptcy
28   court determined that Mr. Selinger’s testimony and evidence were

                                      15
 1   insufficient to establish Appellants’ claims.   The bankruptcy
 2   court was not required to accept Mr. Selinger’s testimony.     The
 3   fact that Mr. Blaskey did not testify does not relieve Appellants
 4   of their burden of proof.
 5        Appellants further argue that the court erred in requiring
 6   them to produce documentary evidence to support their claims,
 7   because Mr. Selinger offered written and oral testimony.     We
 8   again find no error in the court’s determination.   The court
 9   stated that Mr. Selinger’s testimony alone was insufficient to
10   establish the various elements discussed above, and Appellants
11   failed to offer documentary evidence to fill in gaps in his
12   testimony.
13   B.   The court did not err in considering Mr. Blaskey’s closing
          statement.
14
15        Appellants argue that the court erred in considering
16   Mr. Blaskey’s evidentiary objections and challenges raised in his
17   closing statement.   However, they fail to provide us with
18   sufficient information to review this issue.    An appellate court
19   “won’t consider matters on appeal that are not specifically and
20   distinctly argued in appellant’s opening brief.   Applying this
21   standard, we’ve refused to address claims that were only argue[d]
22   in passing, or that were bare assertion[s] . . . with no
23   supporting argument.”   Christian Legal Soc. Chapter of Univ. of
24   Cal. v. Wu, 626 F.3d 483, 487 (9th Cir. 2010) (internal citations
25   and quotation marks omitted).
26        Appellants do not identify any particular error.   They
27   complain about two of Mr. Blaskey’s supposed objections:
28   (1) objections to testimony regarding Mr. Blaskey’s “doctoring”

                                     16
 1   of documents; and (2) objections to “certain evidence” including
 2   the $400,000 lost settlement.    However, Mr. Blaskey did not
 3   object to the inclusion of such evidence; rather, he merely
 4   argued against the weight or relevance of the evidence, as he is
 5   entitled to do during closing statements.
 6        In any event, there is no indication that the court
 7   sustained either of these “objections” or excluded any of
 8   Appellants’ evidence.   We find no error.
 9   C.   The court did not abuse its discretion in excluding
          Exhibits 5 and 6.
10
11        Appellants argue that the court should have admitted their
12   Exhibits 5 and 6 at trial.    We hold that the bankruptcy court
13   correctly excluded both exhibits.
14        Exhibit 5 was Mr. Selinger’s declaration in superior court.
15   The court did not admit Exhibit 5 because the information therein
16   could have been offered by Mr. Selinger in written or rebuttal
17   testimony.   Appellants offer no legal authority supporting the
18   admissibility of Exhibit 5.    We will not consider unsupported
19   arguments.   See Christian Legal Soc. Chapter of Univ. of Cal.,
20   626 F.3d at 487.   Moreover, Appellants’ counsel agreed with the
21   objection and did not preserve this error on appeal: “Okay.
22   We’ll - we will agree with the objection and not, you know - not
23   try to present it then . . . on the direct.”    Finally, Appellants
24   do not provide us with a copy of Exhibit 5, so we are unable to
25   review it and determine whether it should have been admitted.
26        Exhibit 6 is a declaration of Appellants’ counsel.
27   Appellants claim that the document establishes Mr. Blaskey’s non-
28   cooperation and that his “behavior and habits are admissible to

                                      17
 1   show how he acted in the past,” but they do not cite any relevant
 2   legal authority supporting this proposition.    Appellants have not
 3   even provided the Panel with a copy of the document so that we
 4   may evaluate its admissibility.    Further, the declaration is
 5   inadmissable hearsay, as it was an out-of-court statement by
 6   counsel, who was not a witness at trial.    Fed. R. Evid. 801.
 7        Accordingly, the bankruptcy court properly excluded
 8   Exhibits 5 and 6.
 9   D.   The bankruptcy court’s judgment does not violate public
          policy or equitable principles.
10
11        Appellants also state that the bankruptcy court’s ruling
12   contravened public policy and ignored the bankruptcy court’s role
13   as an equitable tribunal.   These arguments are unsupported.
14        Appellants’ assertion that Mr. Blaskey “should not be
15   allowed to just walk away from his obligations” ignores the fact
16   that they were unable to establish the requisite elements of
17   §§ 523(a)(2)(A) and (a)(6).   While it is true that public policy
18   dictates that bankruptcy protection is reserved for the “honest
19   but unfortunate debtor,” that maxim cannot save Appellants’
20   failure to meet a statutory requirement.
21        In fact, congressionally enacted public policy favors
22   discharge.   See Snoke v. Riso (In re Riso), 978 F.2d 1151, 1154
23   (9th Cir. 1992) (“One of the fundamental policies of the
24   Bankruptcy Code is the fresh start afforded debtors through the
25   discharge of their debts.   In order to effectuate the fresh start
26   policy, exceptions to discharge should be strictly construed
27   against an objecting creditor and in favor of the debtor.”).
28   Sections 523(a)(2)(A) and (a)(6) represent Congress’ view of the

                                       18
 1   correct public policy.   We will not substitute our view of public
 2   policy for the congressional view.
 3        Similarly, while it is true that a bankruptcy court is a
 4   court of equity, it cannot and should not ignore a statute merely
 5   because a party complains that it is not “receiv[ing] a fair
 6   result.”   Appellants provide no authority for their novel
 7   proposition to the contrary.   See San Rafael Baking Co. v.
 8   N. Cal. Bakery Drivers Sec. Fund (In re San Rafael Baking Co.),
 9   219 B.R. 860, 866 (9th Cir. BAP 1998) (“Bankruptcy courts are
10   courts of equity but must follow the law and cannot ignore
11   express statutory commands.”); cf. Law v. Siegel, 134 S. Ct.
12   1188, 1197 (2014) (holding that there is “no authority for
13   bankruptcy courts to deny an exemption on a ground not specified
14   in the Code”).
15                               CONCLUSION
16        For the reasons set forth above, we AFFIRM.
17
18
19
20
21
22
23
24
25
26
27
28

                                     19