Court Opinion

ID: 4519425
Source: CourtListenerOpinion
Date Created: 2020-03-25 20:00:27.647594+00
Date Added: 2024-06-11T09:22:54.447198
License: Public Domain

FILED
                                 NOT FOR PUBLICATION
                                                                              MAR 25 2020
                       UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                                 FOR THE NINTH CIRCUIT

In re: NOAM BOUZAGLOU,                           No.   18-60054

               Debtor,                           BAP No. 17-1253

------------------------------
                                                 MEMORANDUM*
NOAM BOUZAGLOU,

               Appellant,

 v.

JEANNE HAWORTH, Successor Trustee
to McGinty Family Trust; KATHLEEN
MCGINTY,

               Appellees.

                           Appeal from the Ninth Circuit
                            Bankruptcy Appellate Panel
               Spraker, Kurtz, and Faris, Bankruptcy Judges, Presiding

                        Argued and Submitted February 14, 2020
                                 Pasadena, California

Before: SCHROEDER, BERZON, and R. NELSON, Circuit Judges.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Noam Bouzaglou and his alter ego corporation were found liable for

substantial fraud damages after a state court trial. Bouzaglou appealed the

judgment. He then filed for bankruptcy, and his state court appeal was dismissed

because he no longer had standing to pursue his appeal.

      Bouzaglou now appeals the BAP’s affirmance of the bankruptcy court

judgment finding the debt non-dischargeable. He contends that because he was

unable to appeal the state court judgment against him personally, that judgment

does not preclude him from retrying the fraud issues in bankruptcy court.

      We affirm the BAP’s ruling that Bouzaglou is bound by the state court

judgment of fraud. There are several reasons. First, Bouzaglou chose, post-

judgment, to file for bankruptcy, thereby voluntarily relinquishing his personal

right to appeal. The bankruptcy code provides that legal interests are considered

property of a debtor’s estate, 11 U.S.C. § 541(a)(1), and we have held that a

bankruptcy trustee has the exclusive right to raise legal claims on behalf of the

estate, Estate of Spirtos v. One Bernardino Cty. Superior Court SPR 02211, 443

F.3d 1172, 1175 (9th Cir. 2006). The trustee here did not appeal. Second, while

there remained the possibility that the bankruptcy court could order the trustee to

abandon the appeal rights, the bankruptcy court denied Bouzaglou’s motion to

compel abandonment, and he neither re-filed the motion nor challenged that ruling.

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Finally, Bouzaglou’s alter ego corporation did appeal the fraud judgment against it

in state court and lost. The state appellate court explained that substantial evidence

supported the fraud judgment and the damages award against the corporation.

There is no indication that the result would have been any different if Bouzaglou

personally had appealed the parallel judgment against him.

      The bankruptcy court rested its conclusion on California principles of issue

preclusion. See Lucido v. Superior Court, 795 P.2d 1223, 1225 (Cal. 1990). All of

the required elements are met here, including the identity of issues sought to be

litigated with issues already litigated in the state court proceeding. Bouzaglou’s

only remaining argument appears to be that of there being some unfairness in his

inability to appeal the fraud judgment. Since his alter ego corporation did appeal

the merits of the fraud judgment against it, which was based on the same evidence,

there is no conceivable unfairness.

      AFFIRMED.

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