Court Opinion

ID: 2757192
Source: CourtListenerOpinion
Date Created: 2014-12-03 19:08:39.975731+00
Date Added: 2024-06-11T11:26:54.025261
License: Public Domain

FILED
                                                              DEC 01 2011
                                                        SUSAN M SPRAUL, CLERK
                                                            U.S. BKCY. APP. PANEL
                                                            OF THE NINTH CIRCUIT

 1
 2
 3                   UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                             OF THE NINTH CIRCUIT
 5   In re:                           )      BAP No. EC-11-1266-DJuKi
                                      )
 6   ROBERT M. VANCE and              )      Bk. No. 10-21844-CMK7
     MARY L. VANCE,                   )
 7                                    )      Adv. No. 10-02255-CMK
                         Debtors.     )
 8   ________________________________ )
                                      )
 9   JUSTIN PARRISH,                  )
                                      )
10                       Appellant,   )
                                      )
11   v.                               )      M E M O R A N D U M1
                                      )
12   ROBERT M. VANCE,                 )
                                      )
13                       Appellee.    )
     ________________________________ )
14
                          Submitted Without Oral Argument
15                              on November 16, 2011
16                           Filed - December 1, 2011
17                Appeal from the United States Bankruptcy Court
                      for the Eastern District of California
18
              Honorable David E. Russell, Bankruptcy Judge, Presiding
19
20   Appearances:          No appearance by or on behalf of Appellant,
                           Justin Parrish. Appellee, Robert M. Vance,
21                         appeared pro se and submitted on the briefs.
22
     Before:    DUNN, JURY, and KIRSCHER, Bankruptcy Judges.
23
24
          1
               This disposition is not appropriate for publication.
25
     Although it may be cited for whatever persuasive value it may have
26   (see Fed. R. App. P. 32.1), it has no precedential value. See 9th
     Cir. BAP Rule 8013-1.

                                         1
 1            This is the second appeal (“Vance Appeal”) filed by Justin
 2   Parrish with respect to the same debt (“Parrish Debt”).    In the
 3   first appeal (“Thomas Appeal”), the Panel agreed with the bankruptcy
 4   court (“California Central Bankruptcy Court”) that Mr. Parrish was
 5   not entitled to relief against Glenn S. Thomas pursuant to
 6   § 523(a)(2)(A), because Mr. Parrish did not prove, by a
 7   preponderance of the evidence on each of the required elements, that
 8   the Parrish Debt was incurred by fraud.2   We adopt the analysis of
 9   the evidence in the Thomas Appeal and AFFIRM the bankruptcy court’s
10   (“California Eastern Bankruptcy Court”) determination that any
11   liability of Robert M. Vance on the Parrish Debt is discharged.
12                                    FACTS
13            Because the relevant factual details relating to the Parrish
14   Debt are set out at length in the memorandum decision the Panel
15   issued in the Thomas Appeal, we refer the reader to that decision
16   for the factual background relating to the Parrish Debt.    We note in
17   this memorandum only the ways in which the Vance Appeal differs from
18   the Thomas Appeal.
19            Mr. Vance and his wife filed a voluntary chapter 7 petition
20   on January 27, 2010.    On May 7, 2010, Mr. Parrish filed an adversary
21   proceeding in the California Eastern Bankruptcy Court seeking to
22   have any obligation of Mr. Vance on the Parrish Debt declared
23
24
25        2
               See the unpublished memorandum decision entered October 7,
26   2011, in Parrish v. Thomas (In re Thomas), BAP No. CC-11-1096-DKiPa.

                                        2
 1   nondischargeable pursuant to § 523(a)(2).3
 2            As relevant to the issues in the Vance Appeal, the California
 3   Eastern Bankruptcy Court entered a “Pretrial Scheduling Order” on
 4   August 24, 2010, which set October 28, 2010, as the date on which
 5   discovery closed, and November 23, 2010 as the date for the pre-
 6   trial conference.    Following the pre-trial conference, the
 7   California Eastern Bankruptcy Court entered a civil minute order
 8   (“Trial Scheduling Order”), which (1) set the Vance Trial for
 9   March 8, 2011, at 10:00 a.m., and (2) set the deadline for the
10   parties to comply with Civil Rule 26(a)(3) and Local Bankruptcy
11   Rule 9017-1 with respect to alternate direct testimony declarations
12   and marked exhibits.
13            Local Bankruptcy Rule 9017-1(a) sets forth the procedure for
14   alternate direct testimony:
15        (a) Alternate Direct Testimony Procedure.
16        (1) Purpose. The purpose of this procedure is to
          facilitate pretrial preparation and to streamline the
17        adducement of direct testimony in trial and contested
          hearings so as to reduce trial time without sacrificing
18        due process and a fair trial. This procedure shall be
          known as the Alternate Direct Testimony Procedure.
19
          (2) Applicability. Unless otherwise ordered, the
20        Alternate Direct Testimony Procedure shall be used in all
          trials and contested hearings not scheduled for the law
21
22
          3
               Mr. Parrish previously had included Mr. Vance as a
23   defendant in the adversary proceeding he filed against Mr. Thomas.
     After the California Central Bankruptcy Court dismissed Mr. Vance as
24
     a defendant in the adversary proceeding filed in Mr. Thomas’s
25   bankruptcy case, Mr. Parrish commenced the adversary proceeding
     against Mr. Vance in the California Eastern Bankruptcy Court, where
26   Mr. Vance’s bankruptcy case was pending.

                                        3
 1       and motion calendar. The failure of any party to any such
         trial or contested hearing to object in writing at or
 2       before the pretrial conference, if one is held, or if not,
         on or before the date of the trial setting hearing, shall
 3       be deemed as consent to the use of this alternate
         testimony procedure for such trial or contested hearing.
 4
         (3) Content and Preparation. For each witness (excluding
 5       hostile or adverse witnesses) that an attorney calls on
         behalf of his/her client's case, there shall be prepared
 6       in triplicate a succinct written declaration, executed
         under penalty of perjury, of the direct testimony which
 7       that witness would be prepared to give as though questions
         were propounded in the usual fashion. Each statement of
 8       fact or opinion shall be separate, sequentially numbered
         and shall contain only matters that are admissible under
 9       the Federal Rules of Evidence (e.g., avoiding
         redundancies, hearsay, and other obvious objectionable
10       statements).
11   Local Bankruptcy Rule 9017-1(c) provides that the California Eastern
12   Bankruptcy Court could, in its discretion, allow live direct
13   testimony even if it had ordered alternate direct testimony by
14   declaration.
15           The Trial Scheduling Order provided that Mr. Parrish’s trial
16   materials were due February 14, 2011.
17           On February 14, 2011, Mr. Parrish complied with the Trial
18   Scheduling Order and filed his pre-trial disclosures, in which he
19   named himself and three other persons to be witnesses on his behalf,
20   and in which Mr. Parrish included the exhibits he intended to rely
21   upon at trial.   Mr. Parrish also filed a declaration for each listed
22   witness to be used as direct testimony at trial.   On March 2, 2011,
23   Mr. Parrish filed his trial brief.
24           Mr. Vance’s trial materials were due by February 28, 2011.
25   Mr. Vance filed his declaration and his trial brief on March 3,
26   2011.

                                       4
 1         In an apparent effort to delay the Vance Trial until after
 2   the California Central Bankruptcy Court had ruled in his favor
 3   against Mr. Thomas essentially on the same claim for relief, on
 4   February 9, 2011, Mr. Parrish filed a motion to continue the Vance
 5   Trial (“Continuance Motion”), which states in its entirety:
 6       1. This is an adversary proceeding in which plaintiff is
         seeking to prove defendant borrowed money from plaintiff
 7       through false representations and is non-dischargeable
         under the Bankruptcy Code.
 8
         2. On November 23, 2010, this court set    trial for
 9       March 8, 2011, and imposed a deadline of   February 14, 2011
         for plaintiff to file all of his witness   declarations with
10       the court and upon defendant. Plaintiff    will meet that
         deadline.
11
         3. Plaintiff is the senior building inspector assigned to
12       a multi-million dollar construction project in the City of
         Irvine, County of Orange, California. Plaintiff is
13       committed to being on the job every day for the term of
         this project which is scheduled to end by the end of May,
14       2011. Plaintiff is unable to interrupt this work to
         prepare for and attend the trial as currently scheduled
15       for March 8th, 2011.
16       4. Plaintiff also expects to call three additional
         witnesses. One of those witnesses, an attorney, is not
17       available for the current trial date.
18       5. Plaintiff is otherwise ready for trial and will serve
         upon defendant all of the materials as described in the
19       Court’s minute order of November 23, 2010.
20       6. Plaintiff anticipates that defendant will refuse to
         consent to the continuance of this trial date.
21
         7. In the meantime, plaintiff wishes to engage defendant
22       in settlement negotiations in order to obviate the
         necessity of trial.
23
         8. Trial against [defendant’s] business partner, Glenn S.
24       Thomas, based on the identical issues is currently
         scheduled in the Bankruptcy Court for the Central District
25       of California for February 23, 2011.
26       9.   Plaintiff will be calling the same witnesses and

                                      5
 1       offering the same exhibits at that trial as in his trial
         scheduled in the Eastern District of California.
 2       Plaintiff desires to show defendant that he has a strong
         case and that settlement would benefit all concerned.
 3
 4   Continuance Motion at pp. 2-3 (emphasis added).
 5         Mr. Parrish set the Continuance Motion to be heard at 9:30
 6   a.m. on March 8, 2011, immediately before the commencement of the
 7   Vance Trial.   On February 22, 2011, a deputy clerk of the California
 8   Eastern Bankruptcy Court left a voice mail message for Mr. Parrish
 9   informing him that the Continuance Motion would be heard at
10   10:00 a.m. by Judge Russell and requiring that he file an amended
11   notice of the hearing on the Continuance Motion.   On February 28,
12   2011, Mr. Parrish filed the amended notice of hearing on the
13   Continuance Motion.   Also on February 28, 2011, Mr. Parrish filed a
14   reply (“Reply”) to Mr. Vance’s opposition to the Continuance Motion,
15   in which Mr. Parrish asserted that because Mr. Vance had filed no
16   declarations or exhibits, he would not be prejudiced by any delay of
17   the Vance Trial.
18         Notwithstanding notification from the California Eastern
19   Bankruptcy Court that his hearing on the Continuance Motion was set
20   at 10:00 a.m. before Judge Russell, on the Friday before the
21   hearing, Mr. Parrish “signed up with CourtCall” to appear
22   telephonically for “the 9:30 a.m. law and motion calendar.”    On the
23   Monday before the hearing, CourtCall informed Mr. Parrish that they
24   were cancelling his telephone appearance for the 9:30 a.m. law and
25   motion calendar.   Mr. Parrish asserts that because of this chain of
26   events, he was not able to appear at the 10:00 a.m. hearing on the

                                       6
 1   Continuance Motion.
 2         On March 8, 2011, the California Eastern Bankruptcy Court
 3   called the hearing on the Continuance Motion.    Noting no appearance
 4   by or on behalf of Mr. Parrish, the bankruptcy judge asked the court
 5   clerk whether a message had been received from Mr. Parrish.    The
 6   court clerk responded:    “I believe so.   I believe that he was --
 7   what I have heard was that he was not going to be appearing today.”
 8   The California Eastern Bankruptcy Court then ruled on the
 9   Continuance Motion:
10       I read the [Continuance Motion]. [Mr. Parrish] basically
         states that he’s working elsewhere and that one of his
11       witnesses isn’t available. Unfortunately for him, this
         Court is ready to proceed to trial. The trial date has
12       been set and we’re ready to go, and the Plaintiff is not
         here. The Plaintiff is apparently more interested in his
13       job than he is in proceeding with his case.
14   Hrg. Tr. (March 8, 2011) at 3:23-4:4.
15         Although Mr. Parrish did not appear for the Vance Trial on
16   March 8, 2011, the bankruptcy court conducted the Vance Trial in his
17   absence.   The only witness was Mr. Vance.   Mr. Vance “testified”
18   that on February 23, 2011, the Central California Bankruptcy Court
19   had conducted the trial in Mr. Parrish’s § 523(a)(2) adversary
20   proceeding against Mr. Thomas.   In the Thomas Trial, on the same
21   evidence Mr. Parrish presented for the Vance Trial as his alternate
22   direct testimony, the California Central Bankruptcy Court had found
23   “[t]here was no fraud.”   Mr. Vance also clarified for the California
24   Eastern Bankruptcy Court that Mr. Vance, as of the current March 8
25   trial date, still had never met Mr. Parrish.    The California Eastern
26   Bankruptcy Court then made the following findings on the record:

                                        7
 1       I have reviewed the documents that were submitted by both
         sides prior to trial. I know that that’s not necessarily
 2       the best evidence that’s available, but what was
         presented, I agree with you, Mr. Vance, they do not show
 3       fraud, certainly not on your part. You never met the man,
         never talked to him prior to his complaint being filed, I
 4       guess. . . . Consequently, judgment will be entered in
         your favor. I’m going to enter a judgment rather than
 5       dismissing the case so that [Mr. Parrish] has had his
         opportunity to be here in court and he wasn’t here. He
 6       presented evidence, you presented evidence. I reviewed
         that evidence and concluded that you are entitled to a
 7       judgment in your favor, and that’s going to be the ruling.
 8   Hrg. Tr. (March 8, 2011) at 7:19-8:20.
 9         On March 10, 2011, the California Eastern Bankruptcy Court
10   entered two civil minute orders.   The civil minute order with
11   respect to the Continuance Motion provided:   “The motion is ORDERED
12   DENIED.”    The civil minute order with respect to the Vance Trial
13   provided:   “IT IS ORDERED that judgment is awarded in favor of
14   defendant; any obligation owed to Justin Parrish by Robert Vance is
15   discharged.”
16         Mr. Parrish timely filed a motion to vacate the “judgment”
17   and for a new trial (“New Trial Motion”).   In the New Trial Motion,
18   Mr. Parrish complained that the Vance Trial should not have taken
19   place, primarily because he had requested a continuance of the trial
20   date, and that both the California Eastern Bankruptcy Court and
21   Mr. Vance had “plenty of advance notice” that Mr. Parrish “wished”
22   the Vance Trial to be continued.
23         In the New Trial Motion, Mr. Parrish characterized as
24   “facile” the California Eastern Bankruptcy Court’s reasoning that
25   because Mr. Parrish had never met Mr. Vance, Mr. Vance could not
26   have committed fraud.   Mr. Parrish asserts that had he been present

                                        8
 1   at the Vance Trial:
 2         -   He would have alerted the California Eastern Bankruptcy
 3   Court to a joint venture agreement Mr. Vance had signed representing
 4   that Mr. Vance and Mr. Thomas had a 39.5-mile fiber optic job in
 5   Northern California, and to “evidence” that “they wished to borrow
 6   large sums of money to finance the job.”
 7         -   He would have alerted the California Eastern Bankruptcy
 8   Court to an equipment lease and purchase agreement also signed by
 9   Mr. Vance, and to “evidence” that Mr. Thomas had told Mr. Parrish
10   that Mr. Vance needed the items of equipment identified in the
11   agreement to complete the work.
12         -   He would have pointed out to the California Eastern
13   Bankruptcy Court the direct testimony of Valdean Watson, an
14   attorney, who opined that the documents referred to above
15   constituted “unfortunate evidence” that Mr. Thomas and Mr. Vance
16   wanted to borrow a large sum of money from Mr. Parrish without any
17   intention of paying it back.
18         In addition to the New Trial Motion, Mr. Parrish also filed a
19   motion for additional findings of fact and conclusions of law
20   (“Additional Findings Motion”), asserting that the California
21   Eastern Bankruptcy Court failed to state on the record how
22   Mr. Parrish had failed to meet his burden of proving fraud.
23         Mr. Vance filed his own post-judgment motion, through which
24   he sought to recover legal fees and costs of defense (“Costs
25   ///
26   ///

                                       9
 1   Motion”).4
 2            Following a hearing held May 12, 2011, on the three post-
 3   trial motions, the California Eastern Bankruptcy Court denied the
 4   New Trial Motion, on the basis that Mr. Parrish was required to
 5   appear at the Vance Trial notwithstanding the existence of his
 6   unresolved Continuance Motion.    Under a mistaken recollection that
 7   the adversary complaint had been dismissed when Mr. Parrish did not
 8   appear at the Vance Trial, the California Eastern Bankruptcy Court
 9   also denied the Additional Findings Motion.    Finally, the California
10   Eastern Bankruptcy Court denied Mr. Vance’s Costs Motion, finding
11   that there was no basis for awarding fees in the case.    Civil minute
12   orders denying each of the post-trial motions were entered May 12,
13   2011, and Mr. Parrish promptly filed a notice of appeal.
14                                 JURISDICTION
15            The California Eastern Bankruptcy Court had jurisdiction
16   under 28 U.S.C. §§ 1334 and 157(b)(2)(I).    We have jurisdiction
17   under 28 U.S.C. § 158.
18                                    ISSUES
19            Mr. Parrish asserts on appeal that the California Eastern
20   Bankruptcy Court abused its discretion in denying the Continuance
21   Motion, the New Trial Motion, and the Additional Findings Motion.
22   Mr. Parrish also asserts that the California Eastern Bankruptcy
23   Court abused its discretion by not sanctioning Mr. Vance for
24
25        4
               Mr. Parrish and Mr. Vance both appeared pro se in all
26   proceedings before the California Eastern Bankruptcy Court.

                                        10
 1   bringing the Costs Motion.   Finally, Mr. Parrish asserts that the
 2   California Eastern Bankruptcy Court erred when it ruled that
 3   Mr. Vance was entitled to a discharge of the Parrish Debt.
 4                            STANDARDS OF REVIEW
 5         We may affirm the bankruptcy court’s decision on any ground
 6   fairly supported by the record.   Wirum v. Warren (In re Warren),
 7   568 F.3d 1113, 1116 (9th Cir. 2009).
 8         Ordinarily, we will not consider an issue raised for the
 9   first time on appeal.   Golden Gate Hotel Ass'n v. City & County of
10   San Francisco, 18 F.3d 1482, 1487 (9th Cir. 1994).
11                                  DISCUSSION
12         Our decision in this appeal is easily reached.      In the
13   Continuance Motion,   Mr. Parrish stated that he would be “calling
14   the same witnesses and offering the same exhibits at [the Vance
15   Trial as in the Thomas Trial] . . . .”      The declarations and the
16   exhibits that Mr. Parrish relied upon as his alternate direct
17   testimony in the Vance Trial was a subset of the evidence he relied
18   upon in the Thomas Trial.    The Panel conducted a complete de novo
19   review of the sufficiency of that evidence in the unpublished
20   memorandum decision issued in the Thomas Appeal and found that
21   evidence wanting to except the Parrish Debt from Mr. Thomas’s
22   discharge.   We therefore find no reversible error in the California
23   Eastern Bankruptcy Court’s determination that any liability
24   Mr. Vance might have on the Parrish Debt likewise was discharged.
25         In light of this determination, we do not address
26   Mr. Parrish’s issues with respect to the Continuance Motion, the New

                                        11
 1   Trial Motion, and the Additional Findings Motion.
 2         We reject Mr. Parrish’s assertion on appeal that the
 3   California Eastern Bankruptcy Court abused its discretion when it
 4   failed to sanction Mr. Vance for prosecuting the Costs Motion.
 5   Nowhere in the record before us can we find that Mr. Parrish asked
 6   the bankruptcy court to impose any sanction on Mr. Vance.    The
 7   relief Mr. Parrish requested in his opposition to the Costs Motion
 8   was that the California Eastern Bankruptcy Court deny the Costs
 9   Motion, “but only after the Court takes the time to examine
10   defendant Robert M. Vance to document his PERJURY AND FRAUD.”
11                                  CONCLUSION
12         Based on the Panel’s analysis of Mr. Parrish’s evidence in
13   the Thomas Appeal, which we adopt for purposes of disposition of the
14   Vance Appeal, the California Eastern Bankruptcy Court did not err in
15   its determination that the Parrish Debt was discharged in
16   Mr. Vance’s bankruptcy case.   We AFFIRM.
17
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