Court Opinion

ID: 9375020
Source: CourtListenerOpinion
Date Created: 2023-02-24 18:00:53.153938+00
Date Added: 2024-06-11T17:16:54.907495
License: Public Domain

NOT FOR PUBLICATION                      FILED
                        UNITED STATES COURT OF APPEALS                     FEB 24 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS
                                 FOR THE NINTH CIRCUIT

In re: BRUCE ELIEFF,                                No.   22-60008

                   Debtor,                          BAP No. 21-1081

------------------------------
                                                    MEMORANDUM*
TODD KURTIN,

                   Appellant,

  v.

HOWARD M. EHRENBERG, Chapter 7
Trustee,

                   Appellee.

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

                                 Submitted February 13, 2023**
                                     Pasadena, California

Before: TASHIMA, HURWITZ, and BADE, Circuit Judges.

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      Todd Kurtin appeals from an opinion of the Bankruptcy Appellate Panel

(“BAP”) affirming decisions of the bankruptcy court that (1) subordinated Kurtin’s

bankruptcy claim under 11 U.S.C. § 510(b); (2) subordinated a judgment lien

under § 510(b); and (3) denied motions to continue and excluded evidence from

the summary-judgment proceedings. We have jurisdiction under 28 U.S.C. § 158,

and we affirm.

1.    The BAP did not err in concluding that Kurtin’s bankruptcy claim was

properly subordinated under § 510(b), which provides that a bankruptcy claim “for

damages arising from the purchase or sale” of a security must be subordinated to

“all claims or interests that are senior to or equal the claim or interest represented

by such security.” 11 U.S.C. § 510(b). The term “arising from” in § 510(b) is

interpreted broadly, requiring only a sufficient “nexus or causal relationship

between the claim and the purchase or sale of securities.” Penso Trust Co. v.

Tristar Esperanza Props., LLC (In re Tristar Esperanza Props., LLC), 782 F.3d

492, 497 (9th Cir. 2015) (quotation omitted).

      As in Tristar, Kurtin’s claim arises from a state-court judgment in an action

for failure to fully reimburse an equity holder for the value of his stake. See id.

Kurtin’s attempts to distinguish Tristar are unavailing, as is his argument that the

underlying settlement agreement was severable such that the first settlement

payment fully compensated him for his equity interest.

                                           2
2.    The BAP also did not err in concluding that the judgment lien was also

subject to subordination under § 510(b). A lien “is a ‘claim’ within the terms of”

the Bankruptcy Code. Johnson v. Home State Bank, 501 U.S. 78, 84 (1991).

3.    Finally, the BAP did not err in determining that the bankruptcy court

properly denied Kurtin’s motion to continue discovery under Rule 56(d) and in

excluding certain portions of evidentiary declarations during the summary-

judgment proceedings. The discovery sought in Kurtin’s Rule 56(d) motion was

not relevant to any issue before the bankruptcy court, given the plain language of

the settlement agreement. See, e.g., Tanadgusix Corp. v. Huber, 404 F.3d 1201,

1205 (9th Cir. 2005) (explaining that, under “general principles of federal contract

law,” where a contract is unambiguous, its terms “control, regardless of the parties’

subjective intentions shown by extrinsic evidence”); see also Bank of the West v.

Valley Nat’l Bank of Ariz., 41 F.3d 471, 477 (9th Cir. 1994) (applying a similar

principle under California law). Kurtin’s request for further discovery on the “old

and cold defense” was properly denied because the rationale for subordination in

this case is not implicated by that defense. The respective declarations were

properly excluded because they were also irrelevant to the subordination decision.

      AFFIRMED.

                                         3