Court Opinion

ID: 9948399
Source: CourtListenerOpinion
Date Created: 2024-03-06 22:01:51.668767+00
Date Added: 2024-06-11T14:29:32.709576
License: Public Domain

NOT FOR PUBLICATION                                  FILED
                                                                                 MAR 6 2024
          UNITED STATES BANKRUPTCY APPELLATE PANEL
                                                SUSAN M. SPRAUL, CLERK
                    OF THE NINTH CIRCUIT           U.S. BKCY. APP. PANEL
                                                                               OF THE NINTH CIRCUIT

 In re:                                              BAP No. NC-23-1043-BSG
 DEBBIE REID O'GORMAN,
               Debtor.                               Bk. No. 21-10374-RLE

 GRANT REYNOLDS REVOCABLE
 LIVING TRUST,
               Appellant,
 v.                                                  MEMORANDUM∗
 TIMOTHY W. HOFFMAN, Chapter 7
 Trustee,
               Appellee.

               Appeal from the United States Bankruptcy Court
                   for the Northern District of California
               Roger L. Efremsky, Bankruptcy Judge, Presiding

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

                                   INTRODUCTION

      Appellant, the Grant Reynolds Revocable Living Trust, appeals an order

sustaining the chapter 7 1 trustee's objection to the trust's secured claim filed

by Grant Reynolds, the trustee of the trust.2 The bankruptcy court determined

      ∗ 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.
       1 Unless specified otherwise, all chapter and section references are to the Bankruptcy

Code, 11 U.S.C. §§ 101-1532, and all "Rule" references are to the Federal Rules of
Bankruptcy Procedure.
       2 We refer to the trust and Mr. Reynolds as "Reynolds."

                                               1
that Reynolds failed to prove a secured claim in any amount and disallowed

the claim in its entirety. Seeing no reversible error, we AFFIRM.3

                                          FACTS

A.    Events leading to Reynolds's claim

      Debtor Debbie Reid O'Gorman held title to real property in Calistoga,

California ("Property"). At one point, O'Gorman believed that the City of

Calistoga had violated her water rights. In 2007, Reynolds began researching

the matter for which O'Gorman paid him $5,000 per month "for many

months."

      Deciding to pursue litigation, on January 1, 2008, O'Gorman, Matthew

Hickerson (her significant other), and Jeffrey Bounsall entered into an

agreement that they would share in any recovery from the water rights

litigation ("2008 Agreement"). The 2008 Agreement stated that O'Gorman and

Hickerson paid Reynolds $5,500 to further investigate the water rights claims

and that Bounsall had to either contribute his 49% share of Reynolds's fee

($2,695) or reimburse O'Gorman and Hickerson for the $5,500.

      On June 1, 2010, O'Gorman signed a promissory note ("2010 Note") and

a second deed of trust ("2010 DOT") in favor of Reynolds (together, the "2010

Note and DOT"). The 2010 Note provided that O'Gorman, "for value

received," promised to pay Reynolds $4 million together with interest at 3% in

      3
        Prior to oral argument scheduled for September 28, 2023, the parties requested a
60-day continuance to finalize a proposed settlement, which the Panel granted, and the
matter was taken off calendar. Ultimately, settlement negotiations failed. However, we
conclude that this case is suitable for decision without oral argument. See 9th Cir. BAP Rule
8019-1.
                                                2
one lump sum on June 1, 2015. The 2010 Note was secured by the 2010 DOT

against the Property. The 2010 DOT stated that it was for the purpose of

securing the payment of $4 million made by Reynolds to O'Gorman, and any

additional sums loaned to O'Gorman when evidenced by a promissory note

stating that it was secured by the 2010 DOT. Reynolds never lent $4 million to

O'Gorman.

     In 2012, O'Gorman wrote a letter to Reynolds ("2012 Letter")

acknowledging that he had "not been paid in quite a while" and that he had to

mortgage his home to continue funding the water rights litigation. O'Gorman

promised Reynolds that he would be reimbursed once everything was over

and that the amount owed would be secured by the 2010 DOT.

     In 2013, Reynolds, O'Gorman, Hickerson, and the Kinnamans (assignees

of Bounsall) signed an agreement ("2013 Proceeds Agreement") which

provided that the parties would share any recovery in the water rights

litigation as follows: one third to O'Gorman and Hickerson; one third to

Reynolds; and one third to the Kinnamans.

     The plaintiffs were unsuccessful in the water rights litigation; the City of

Calistoga prevailed.

     In 2019 and 2020, to prevent Mr. Cooper, the first lienholder, from

foreclosing on the Property, Reynolds cured O'Gorman's defaults on her

indebtedness to Mr. Cooper totaling approximately $180,000. O'Gorman does

not dispute that Reynolds paid at least this amount to Mr. Cooper on her

behalf. During this time, and unbeknownst to Reynolds or Mr. Cooper,

                                       3
O'Gorman transferred her interest in the Property into an irrevocable trust to

prevent Reynolds from completing the foreclosure he commenced in 2020.

      O'Gorman filed a chapter 7 bankruptcy case on August 19, 2021.

Timothy W. Hoffman ("Trustee") was appointed as the chapter 7 trustee.

O'Gorman valued the Property at $2.9 to $3 million, which was subject to Mr.

Cooper's lien for $800,000. O'Gorman scheduled Reynolds as a secured

creditor but disputed his alleged secured claim for $1.5 million.

      Despite receiving notice of O'Gorman's chapter 7 filing, Reynolds

proceeded with a foreclosure sale for the Property on August 20, 2021. He was

the successful bidder with a credit bid of $1,499,414.78.

B.    The claim objection

      Reynolds filed a $1,493,674.13 secured proof of claim for what he

described as "services performed, money loaned." Attached were copies of the

2010 Note and DOT and the assignment of both documents from Mr.

Reynolds to his trust.

      Trustee objected to Reynolds's secured claim in its entirety. He argued

that the 2010 Note and DOT did not reference any agreement to render

services as Reynolds contended, or to any obligation other than the $4 million

loan that was never made. Although Reynolds asserted that O'Gorman was

obligated to pay him $5,500 per month for providing years of services in the

water rights litigation, he produced no written agreement evidencing that

obligation. And other than the 2010 Note, argued Trustee, there were no

additional notes that could be secured by the 2010 DOT. While the 2012 Letter

                                        4
acknowledged an unpaid debt to Reynolds that would be secured by the 2010

DOT, O'Gorman did not quantify its amount, the basis for the debt, or the

source for repayment. Finally, Trustee argued that the 2013 Proceeds

Agreement could not be the basis for any claim, because the water rights

litigation did not result in any recovery.

      Reynolds opposed Trustee's claim objection. He contended that the 2010

Note and DOT functioned like an attorney's charging lien and was not a loan.

Reynolds argued that O'Gorman owed him for various debts which he

contended were secured by the 2010 DOT, including: (1) $774,411.05 for his

litigation services ($5,500 per month @ 3% interest for 10 years); (2) $200,000

for the loan he took out to pay Mr. Cooper; (3) $274,000 for his income taxes

due going forward from September 2012; and (4) $16,100 for property tax

payments he made on O'Gorman's behalf.

      Reynolds explained that he was paid under the terms of the 2008

Agreement – $5,500 per month – for his services in the water rights litigation

for 2008 and 2009. In late 2009, when O'Gorman could no longer pay her share

of his fees going forward and the other investors refused to contribute their

share, Reynolds and O'Gorman executed the 2010 Note and DOT, which he

maintained was a guarantee for reimbursement under the 2008 Agreement

and any damages that he might suffer in the water rights litigation. Reynolds

contended that the 2012 Letter was O'Gorman's acknowledgement that he

would be reimbursed for what he was owed and that he could continue using

the 2010 Note and DOT as collateral. Reynolds explained that the parties

                                        5
drafted the 2013 Proceeds Agreement because O'Gorman was to undergo an

operation that she might not survive.

      However, regardless of the various agreements, Reynolds argued that

his secured claim was based entirely on the 2010 Note and DOT; the 2008

Agreement was irrelevant. Reynolds disputed Trustee's characterization of

the 2010 Note as a "loan" and argued that the words "for value received" was

sufficient evidence of the consideration O'Gorman received for it and prima

facie evidence of the debt. Reynolds argued that Trustee could not rely on

extrinsic evidence to challenge the facially valid 2010 Note and DOT, nor

could Trustee avoid the 2010 DOT under § 544(b) because the seven-year

statute of limitations under CAL. CIV. CODE § 3439.09(c) had run.

      In reply, Trustee argued that Reynolds could not rely on extrinsic

evidence to determine the parties' subjective intent in drafting any of the

documents, including the 2010 Note and DOT. Trustee argued that the

declarations Reynolds offered in support of his opposition were replete with

hearsay and inadmissible parol evidence of the parties' subjective intent,

while their objective intent was plain from the documents themselves. Trustee

disputed that the statute of limitations precluded his objection to Reynolds's

claim. Trustee was not contending that the 2010 DOT was fraudulent, only

that the bankruptcy estate owed Reynolds nothing on account of the 2010

Note and DOT. Further, argued Trustee, the statute of limitations was not a

bar to a legitimate defense to the claim.

                                        6
      After a hearing, the bankruptcy court announced its oral ruling

sustaining Trustee's claim objection and disallowing Reynolds's secured claim

in its entirety. The court concluded that Reynolds failed to establish that the

unambiguous 2010 DOT secured a debt for $1,493,674.13, or any other

amount. This timely appeal followed.

                                  JURISDICTION

      The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

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

                                        ISSUE

      Did the bankruptcy court err in sustaining Trustee's objection and

disallowing Reynolds's secured claim?

                            STANDARDS OF REVIEW

      Claims objection appeals can involve both legal and factual issues. We

review the legal issues de novo and the factual issues for clear error. Veal v.

Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 918 (9th Cir. BAP

2011). Whether the evidence in support of a claim objection sufficiently rebuts

the evidentiary presumption under Rule 3001(f) is a question of fact we

review for clear error. Garner v. Shier (In re Garner), 246 B.R. 617, 619 (9th Cir.

BAP 2000) (citing Sierra Steel, Inc. v. Totten Tubes, Inc. (In re Sierra Steel, Inc.), 96

B.R. 275, 277 (9th Cir. BAP 1989)).

      De novo review means that we consider the matter anew and give no

deference to the bankruptcy court's decision. Francis v. Wallace (In re Francis),

505 B.R. 914, 917 (9th Cir. BAP 2014). Factual findings are clearly erroneous if

                                            7
they are illogical, implausible, or without support in the record. Retz v. Samson

(In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010).

                                  DISCUSSION

A.    Legal standards for claims litigation

      A duly executed proof of claim is prima facie evidence of the validity

and amount of the claim. Rule 3001(f). Under § 502(a), the claim is "deemed

allowed" unless a party in interest objects. An objecting party must present

evidence to overcome the proof of claim's presumption of validity or amount.

Margulies Law Firm, APLC v. Placide (In re Placide), 459 B.R. 64, 72 (9th Cir. BAP

2011). If the objector produces sufficient evidence to rebut the Rule 3001(f)

presumption, the burden of production shifts back to the claimant to prove

the validity and amount of its claim by a preponderance of the evidence. Id.

However, the claimant ultimately bears the burden of persuasion. Id.

B.    Governing contract law

      The 2010 Note and DOT are California contracts. In California, the

interpretation of a contract is a question of law which the court reviews de

novo. Renwick v. Bennett (In re Bennett), 298 F.3d 1059, 1064 (9th Cir. 2002)

(citations omitted). "When a contract is reduced to writing, the intention of the

parties is to be ascertained from the writing alone, if possible[.]" CAL. CIV.

CODE § 1639. "The fundamental goal of contract interpretation is to give effect

to the mutual intention of the parties. If contractual language is clear and

explicit, it governs." In re Bennett, 298 F.3d at 1064 (cleaned up); see also CAL.

CIV. CODE §§ 1636 & 1638; Shaw v. Regents of Univ. of Cal., 58 Cal. App. 4th 44,

                                          8
54-55 (1997) (noting that the parties' objective intent, as evidenced by the

words of the document, determines the meaning of the contract, not a party's

subjective intent). Generally, if a written contract "was intended to be the

complete and final expression of the parties' intent," extrinsic evidence cannot

be used to interpret it. In re Bennett, 298 F.3d at 1064. Put another way, if the

contract is "fully integrated," the parol evidence rule prohibits consideration

of evidence of meaning beyond the contract itself, such as any prior

agreements or contemporaneous oral agreements. See id.; see also CAL. CIV.

CODE § 1856.

C.    The bankruptcy court did not err in sustaining Trustee's objection
      and disallowing Reynolds's secured claim.

      The bankruptcy court ruled that Trustee met his burden to rebut the

presumption of the claim's validity and amount, and that Reynolds failed to

sustain his ultimate burden of persuasion that the 2010 Note and DOT

supported a secured claim for $1,493,674.13. The court determined that the

purpose of the 2010 DOT was to secure the 2010 Note, which the court

determined was for a $4 million loan that was never given to O'Gorman, and

any other amounts Reynolds loaned to her evidenced by a promissory note.

While O'Gorman may have agreed to pay Reynolds $5,500 per month for his

litigation services, the court found that the 2010 Note and DOT did not

support this; the documents made no reference to any such preexisting

agreement. The court also found that the 2012 Letter did not constitute a

promissory note under the 2010 DOT. While the 2012 Letter acknowledged

that Reynolds had not been paid for some time, O'Gorman did not articulate
                                         9
what amount was owed to him, what was paid to him in the past, what he

was paid for, or the source for repayment. Further, the 2010 DOT secured only

future "sums which may be loaned," not future services.

      Consequently, the court concluded that the amount secured by the 2010

DOT was zero. It rejected Reynolds's declarations as impermissible parol

evidence which contradicted the plain language of the 2010 Note and DOT.

The court noted that even if it considered the 2008 Agreement, which was the

only document that referenced the $5,500 and which Reynolds argued was

"irrelevant" to the claim, that agreement contemplated only a one-time

payment of $5,500, not a continuing monthly payment, based on its language

that the contracting parties might have to provide "future funding" for the

litigation. The court also determined that the 2013 Proceeds Agreement could

not provide a basis for a secured claim; the water rights litigation was not

successful and there was no recovery.

      Reynolds raises several arguments on appeal, which we address in turn.

First, he argues that the bankruptcy court erred in holding that the 2010 Note

was void for lack of consideration. The court did not so hold. In fact, it found

that the 2010 Note and DOT were valid. However, the validity of those

documents was not in question. The question was how much, if anything, was

owed under the 2010 Note and DOT. Ultimately, the court concluded that the

2010 DOT did not act as security for the 2010 Note because the $4 million

payment was never given to O'Gorman. And no other sums were loaned to

O'Gorman as evidenced by a different promissory note secured by the 2010

                                        10
DOT. Reynolds argues that O'Gorman got what the 2010 Note states – "value

received." When the court asked Reynolds what consideration he gave

O'Gorman in exchange for the 2010 Note, he refused to answer, erroneously

claiming that the information was barred by the parol evidence rule.

However, it was undisputed that O'Gorman did not receive $4 million from

Reynolds as stated in both the 2010 Note and DOT.

      Next, Reynolds argues that the bankruptcy court erred in characterizing

the 2010 Note and DOT as a "loan." He argues that neither of the documents

uses the word "loan" nor do they imply that a loan was already made. Rather,

argues Reynolds, the documents were a guarantee for unpaid services

rendered, which were subsumed in the language "for value received," as well

as for future anticipated services. We disagree. First, the plain language of the

2010 DOT belies this. According to the document, it was "[F]or the Purpose of

Securing (1) payment of the sum of $4,000,000 with interest thereon according

to the terms of a promissory note or notes of even date herewith made by

Trustor, payable to order of the beneficiary . . . (3) Payment of additional sums

and interest thereon which may hereafter be loaned to Trustor . . . when

evidenced by a promissory note or notes reciting that they are secured by this

Deed of Trust." The 2010 DOT does not state that it was for the purpose of

securing past services rendered or for securing future services, and it refers

only to the 2010 Note, which says nothing about services. Further, that

"additional sums" could be "loaned" implies that the $4 million was a loan.

Finally, the 2010 Note provides that the entire $4 million plus interest would

                                       11
be due and payable in one lump sum on June 1, 2015 – five years later, which

also infers a loan. As the court observed, that language is inconsistent with

Reynolds's claim that the agreement was that he would be paid, and had

previously been paid, $5,500 per month for his litigation services on an

ongoing basis.

      Reynolds also argues that the bankruptcy court erred when it relied on

parol evidence to circumvent the 2010 Note's plain meaning of "for value

received." It is not entirely clear what Reynolds is arguing here, but he seems

to suggest that the court erred in determining that the 2010 Note was invalid

by relying on parol evidence to decide that "for value received" referred to a

loan and not to Reynolds's past and future services. Again, the court did not

find that the 2010 Note was invalid. And it did not rely on parol evidence to

determine that the 2010 Note was for a loan that was never made. To the

contrary, the court made that determination by reviewing the four corners of

the document and by accepting the parties' undisputed testimony that

Reynolds did not make any loans to O'Gorman.

      Next, Reynolds argues that O'Gorman and Trustee were judicially

estopped from asserting that the 2010 Note and DOT was for an unfunded

loan, when they had previously, and successfully, argued in Trustee's

adversary proceeding avoiding O'Gorman's fraudulent transfer of the

Property that the 2010 Note and DOT served as a guarantee to ensure that

Reynolds would be paid for his services. Reynolds did not raise this argument

before the bankruptcy court. Generally, we do not consider arguments raised

                                       12
for the first time on appeal. Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999).

Even if we did consider it, the argument lacks merit.

      "Judicial estoppel is an equitable doctrine that precludes a party from

gaining an advantage by asserting one position, and then later seeking an

advantage by taking a clearly inconsistent position." Hamilton v. State Farm

Fire & Cas. Co., 270 F.3d 778, 782-83 (9th Cir. 2001). The court should consider

the following three factors in determining whether the doctrine is applicable

in a given case:

      (1) whether the party's later position is clearly inconsistent with its
earlier position;

       (2) whether the party has succeeded in persuading a court to accept that
party's earlier position, so that judicial acceptance of an inconsistent position
in a later proceeding would create the perception that either the first or the
second court was misled; and

      (3) whether the party seeking to assert an inconsistent position would
derive an unfair advantage or impose an unfair detriment on the opposing
party if not estopped.

Milton H. Greene Archives, Inc. v. Marilyn Monroe LLC, 692 F.3d 983, 994 (9th

Cir. 2012) (citing New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001)).

      Reynolds relies on the following statements Trustee and O'Gorman

made in the adversary proceeding, which preceded Trustee's claim objection

by over two months and before Reynolds had provided Trustee with all of the

documents he contended supported his secured claim:

      [TRUSTEE] In 2010, the Debtor gave Grant Reynolds a deed of
      trust against the Property to ensure that he would be protected

                                        13
      from claims for damages in connection with his investigation of
      claims and litigation against the City of Calistoga.

      [O'GORMAN] In 2010, I signed a deed of trust in favor of Grant
      Reynolds that was recorded against the Property. Mr. Reynolds
      asked me to sign the deed of trust to ensure that he would be
      protected from claims for damages while conducting
      investigation and litigation against the City of Calistoga relating
      to a water rights dispute.

      Nothing in the record establishes that these statements were offered by

Trustee to persuade the bankruptcy court to accept a position on the character

of the debt O'Gorman believed she owed to Reynolds, nor did Trustee ask the

court to do so. Further, nothing suggests that the court accepted that the 2010

Note and DOT evidenced a guarantee for payment of services and not a loan.

In fact, in affirming the bankruptcy court on appeal, we stated that O'Gorman

gave Reynolds the 2010 DOT as security for a "loan." At the time of the

adversary proceeding, Reynolds appeared to be a secured creditor, having

foreclosed on the 2010 DOT the day after O'Gorman filed for bankruptcy. But

after the sale was rescinded and Reynolds failed to provide any document

obligating O'Gorman to pay him $5,500 per month for 10 years, Trustee filed

his claim objection contending that no loan was given to O'Gorman secured

by the 2010 DOT and that the operative documents – the 2010 Note and DOT

– did not demonstrate the existence of a monthly obligation. Put simply,

judicial estoppel was not applicable in this case.

      Reynolds next argues that the bankruptcy court abused its discretion

and denied him due process by not allowing him to file a surreply to Trustee's
                                       14
reply to the claim objection. At the hearing, Reynolds began by arguing that

Trustee's reply brief was filed two days late. The court asked Reynolds if he

wished to proceed or if he wanted to continue the hearing to allow him more

time to prepare an argument in response to Trustee's reply. Either way,

however, the court reminded Reynolds that the evidentiary record was closed

and that no further papers could be filed; any continued hearing was for

argument only. Reynolds replied that, although he felt "ambushed," he

wanted to proceed. With that, the court noted for the record that Reynolds

had waived his objection as to the untimeliness of Trustee's reply brief.

      Reynolds does not say how not filing a surreply prejudiced him. An

alleged due process violation cannot constitute reversible error unless the

party asserting the violation can demonstrate prejudice. See Rosson v.

Fitzgerald (In re Rosson), 545 F.3d 764, 776-77 (9th Cir. 2008), partially abrogated

on other grounds as recognized by Nichols v. Marana Stockyard & Livestock Mkt.,

Inc. (In re Nichols), 10 F.4th 956, 962 (9th Cir. 2021). Reynolds argues that in a

surreply he could have addressed the statute of limitations issue raised for the

first time in Trustee's reply. But that argument was not raised for the first time

in Trustee's reply. Reynolds raised it, not only in his opposition to the claim

objection but in other contested matters before that. And the bankruptcy court

rejected it. Further, Reynolds told the court that he wished to proceed despite

his objection. Thus, the court correctly found that Reynolds waived his

objection to the untimely reply brief, and he was not deprived of due process

by the inability to file a surreply.

                                         15
      Next, Reynolds argues that the bankruptcy court failed to consider his

statute of limitations defense. This is false. Reynolds argued that Trustee

could not avoid the 2010 DOT because the seven-year statute of limitations

under CAL. CIV. CODE § 3439.09(c) had run. The court considered, but rejected,

Reynolds's argument for two reasons. First, it rejected it for the reason stated

in Trustee's reply. Trustee had argued that Reynolds was raising the statute of

limitations improperly as a sword and not a shield. We agree. The defense of

statute of limitations should be used only as a shield, not a sword. City of Saint

Paul v. Evans, 344 F.3d 1029, 1033 (9th Cir. 2003). "Indeed, courts generally

allow defendants to raise defenses that, if raised as claims, would be time-

barred." Id. (citing United States v. W. Pac. R.R. Co., 352 U.S. 59, 72 (1956) ("To

use the statute of limitations to cut off the consideration of a particular

defense in the case is quite foreign to the policy of preventing the

commencement of stale litigation.")). "Without this exception, potential

plaintiffs could simply wait until all available defenses are time barred and

then pounce on the helpless defendant." Id. at 1034 (citing W. Pac. R.R. Co., 352

U.S. at 71).

      While Reynolds calls his use of the statute of limitations a "defense," that

is not the way he is using it. He, the plaintiff in this context, is attempting to

support an affirmative claim for a secured debt and argue that Trustee, the

defendant, is barred from questioning what Reynolds was owed because

seven years had passed since the 2010 DOT was recorded. See Brosio v.

Deutsche Bank Nat'l Tr. Co. (In re Brosio), 505 B.R. 903, 912-13 (9th Cir. BAP

                                         16
2014) (observing that the filing of a proof of claim is analogous to filing a

complaint, and a claim objection by the trustee or debtor-in-possession is

analogous to an answer). The second reason the court rejected Reynolds's

statute of limitations argument is because it was inapplicable. We agree.

Trustee was not attempting to avoid the 2010 DOT as a fraudulent transfer;

rather, he was arguing that it had no value.

      Finally, Reynolds argues that the bankruptcy court imposed a double

standard by utilizing extrinsic facts to support its decision, but then ruled that

these same facts offered in Reynolds's declarations in opposition to the claim

objection were inadmissible parol evidence. Basically, Reynolds argues that if

the court could use extrinsic evidence to support its decision, he should have

been allowed the benefit of this same evidence to support that the 2010 Note

and DOT acted as a guarantee for his receiving payment per the terms of the

2008 Agreement, which he argues contemplated more than just one payment

of $5,500. For example, argues Reynolds, the court discussed the history of the

water rights litigation based on statements made in the declarations of

Reynolds, Hickerson, and the Kinnamans, but then it went on to rule that it

would not consider what the declarants stated regarding their intent in the

agreements, namely the 2008 Agreement and the 2012 Letter.

      We fail to see the "double standard" Reynolds complains of. The court

discussing generally the facts of the water rights litigation, which were

undisputed, is a far cry from statements the declarants made about what they

intended with the 2008 Agreement or the 2012 Letter and how they related to

                                        17
the 2010 Note and DOT, which contradicted the plain language and objective

intent of the 2010 Note and DOT. Just because much of what the declarants

stated was inadmissible parol evidence, not everything was, and the court did

not err by relying on some of the statements for its recitation of the facts.4

                                    CONCLUSION

      In summary, the bankruptcy court did not err in determining that the

2010 Note and DOT did not create an agreement by which Reynolds agreed to

provide services to O'Gorman for which she agreed to pay $5,500 per month.

Because Reynolds did not carry his burden to establish that the 2010 Note and

DOT supported a secured claim for $1,493,674.13, or any other amount, the

bankruptcy court did not err in sustaining Trustee's objection and disallowing

the claim in its entirety. We AFFIRM.5

      4   We need not address Reynolds's additional argument that the 2013 Proceeds
Agreement did not constitute an accord and satisfaction of the 2010 Note and DOT. The
bankruptcy court expressly stated that, given its ruling on the 2008 Agreement and the
2010 Note and DOT, it did not need to rule on Trustee's accord and satisfaction or novation
arguments.
        5 Reynolds filed a request for judicial notice asking that we consider portions of a

brief the chapter 7 trustee filed in a matter pending before the Ninth Circuit Court of
Appeals. Reynolds's request is DENIED because the brief is unnecessary to the disposition
of this appeal.
                                                18