Court Opinion

ID: 4255255
Source: CourtListenerOpinion
Date Created: 2018-03-15 21:00:38.031242+00
Date Added: 2024-06-11T14:44:28.966981
License: Public Domain

FILED
 1                          NOT FOR PUBLICATION                    MAR 13 2018
                                                               SUSAN M. SPRAUL, CLERK
 2                                                               U.S. BKCY. APP. PANEL
                                                                 OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
                              OF THE NINTH CIRCUIT
 4
 5   In re:                        )       BAP No.    CC-17-1171-FSTa
                                   )                  CC-17-1172-FSTa
 6   SHELLIE MELISSA HALPER,       )                  (Related)
                                   )
 7                  Debtor.        )       Bk. No.    1:09-bk-23807-GM
     ______________________________)
 8                                 )
     SHELLIE MELISSA HALPER,       )       Adv. No.   1:11-ap-01319-GM
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )
11                                 )
     TWIN PALMS LENDING GROUP, LLC,)
12                                 )
                    Appellee.      )
13   ______________________________)
                                   )
14   SHELLIE MELISSA HALPER,       )       Adv. Pro. 1:11-ap-01317-GM
                                   )
15                  Appellant,     )
                                   )
16   v.                            )       MEMORANDUM*
                                   )
17   SOLOMON M. COHEN,             )
                                   )
18                  Appellee.      )
     ______________________________)
19
                    Argued and Submitted on February 22, 2018
20                           at Pasadena, California
21                           Filed – March 13, 2018
22               Appeal from the United States Bankruptcy Court
                     for the Central District of California
23
              Honorable Geraldine Mund, Bankruptcy Judge, Presiding
24
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   Appearances:   Michael D. Franco argued for appellant Shellie
                    Melissa Halper; Allan D. Sarver argued for
 2                  appellees Twin Palms Lending Group, LLC and
                    Solomon M. Cohen.
 3
 4   Before: FARIS, SPRAKER, and TAYLOR, Bankruptcy Judges.
 5
 6                                INTRODUCTION
 7        Chapter 71 debtor Shellie Melissa Halper refused to sit for
 8   her deposition in two related adversary proceedings for over five
 9   years, first invoking her Fifth Amendment privilege against self-
10   incrimination, then citing a family illness, then claiming her
11   own illness, and finally reasserting her (by then inapplicable)
12   Fifth Amendment privilege.    Appellees Twin Palms Lending Group,
13   LLC (“Twin Palms”) and Solomon M. Cohen (collectively, “Lenders”)
14   sought terminating sanctions for her discovery abuses.    The
15   bankruptcy court gave her a final chance to comply, ordering her
16   to pay $40,000 (a portion of her adversaries’ attorneys’ fees)
17   and appear for her deposition.    When she failed to comply, the
18   bankruptcy court granted default judgment in favor of Twin Palms
19   and Mr. Cohen and awarded them nondischargeable judgments of
20   $2.38 million and $9.44 million, respectively.
21        On appeal, Ms. Halper argues that the bankruptcy court erred
22   in granting the Lenders default judgment.    We AFFIRM.
23
24
25
          1
26          Unless specified otherwise, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all
27   “Rule” references are to the Federal Rules of Bankruptcy
     Procedure, and all “Civil Rule” references are to the Federal
28   Rules of Civil Procedure.

                                       2
 1                             FACTUAL BACKGROUND2
 2   A.   Prepetition events
 3        In or around 2007, Ms. Halper and her business partner
 4   Ronald Stover, through various entities, solicited loans from
 5   dozens of lenders allegedly to fund the purchase and development
 6   of real property located in Mexico (the “Mexico Investment”).
 7   Two of those lenders were Mr. Cohen and Twin Palms.
 8        Mr. Cohen alleged that, beginning in February 2007, he made
 9   a total of ten loans to Ms. Halper totaling $2.9 million.
10   Initially, the loans were intended to fund the Mexico Investment.
11   In the summer of 2007, Ms. Halper and Mr. Stover told Mr. Cohen
12   that they needed money to fund litigation against Larry Flynt
13   (the “Flynt Litigation”), the settlement of which was expected to
14   generate over $15 million.    Mr. Cohen agreed to release the
15   collateral securing some of the loans, extend the maturity date
16   on some of the loans, and lend additional funds, based on the
17   representation that Ms. Halper and Mr. Stover would repay him in
18   full out of the settlement funds received in the Flynt
19   Litigation.   Ms. Halper further represented that they would
20   record a replacement mortgage on the Mexico property in favor of
21   Mr. Cohen.    But despite settlement of the Flynt Litigation in
22   January 2009, Ms. Halper never repaid Mr. Cohen or recorded a
23   replacement mortgage.
24        Twin Palms similarly alleged that Ms. Halper and Mr. Stover
25
26        2
            We exercise our discretion to review the documents on the
27   bankruptcy court’s electronic docket, as appropriate. See Woods
     & Erickson, LLP v. Leonard (In re AVI, Inc.), 389 B.R. 721, 725
28   n.2 (9th Cir. BAP 2008).

                                       3
 1   solicited three loans from Twin Palms totaling $455,000 for the
 2   Mexico Investment.   When Ms. Halper defaulted on the loans and
 3   subsequent loan modification agreements, she told Twin Palms that
 4   she would receive fifty percent of the settlement proceeds of the
 5   Flynt Litigation and would use that money to repay Twin Palms.
 6   To date, Ms. Halper has not followed through on her promise.
 7   B.   The bankruptcy case and adversary proceedings
 8        On October 19, 2009, Ms. Halper filed her chapter 11
 9   bankruptcy petition, which was later converted to chapter 7.
10        Mr. Cohen and Twin Palms filed their respective adversary
11   proceedings against Ms. Halper in April 2011.      The Lenders each
12   alleged that Ms. Halper had fraudulently induced them to loan
13   money for the Mexico Investment.       Mr. Cohen alleged that he had
14   been damaged in the amount of $6.2 million plus punitive damages,
15   attorneys’ fees, and costs, and Twin Palms sought damages
16   totaling $455,000 plus interest, penalties, punitive damages,
17   attorneys’ fees, and costs.   The Lenders requested a
18   determination that the debts were nondischargeable under
19   § 523(a)(2)(A).
20   C.   The Fifth Amendment stay and other delays
21        On September 28, 2011, Ms. Halper filed a motion to stay the
22   adversary proceedings, citing her Fifth Amendment privilege
23   against self-incrimination.   She alleged that she recently
24   discovered that the Federal Bureau of Investigation and the U.S.
25   Attorney’s Office were investigating her for possible criminal
26   activity relating to the alleged fraud and that her counsel
27   advised her to assert her Fifth Amendment rights in anticipation
28   of an impending indictment.

                                        4
 1        The Lenders did not oppose the stay motion and entered into
 2   a stipulation with Ms. Halper to stay the adversary proceedings
 3   for one year.    The bankruptcy court entered an order granting the
 4   stay motion and setting a status conference one year out.
 5        Over the next three years, the parties requested six
 6   continuances for various reasons including Ms. Halper’s continued
 7   assertion of her Fifth Amendment privilege and the pending
 8   resolution of the state court claims against Mr. Stover.
 9        By May 2015, the Lenders wanted to move forward with
10   discovery.   In their joint status report, the Lenders stated:
11   “The matter is ready to proceed.       There is no pending
12   investigation by the FBI.    Plaintiff obtained a $23 million fraud
13   judgment against Defendant’s partner.       Case is ready to move
14   forward.”    In contrast, Ms. Halper contended: “Defense counsel is
15   unaware of any determination by the FBI that there is no pending
16   investigation. . . .    This case is not ready to move forward as
17   the Defendant still has her 5th Amendment rights against self
18   incrimination to protect.”
19         Following a hearing in May, the bankruptcy court terminated
20   the stay of the adversary proceedings because the statute of
21   limitations on the supposed criminal charges had run.        It
22   ordered that the parties “may recommence litigation in the
23   Adversary Proceeding, and discovery may immediately proceed[.]”
24        The bankruptcy court held another hearing in June to reset
25   Ms. Halper’s deposition.    The Lenders’ counsel represented that
26   he had contacted the U.S. Attorney’s Office, which informed him
27   that “there was no formal proceeding ever pursued by the federal
28   prosecutor.”    Counsel argued (and the bankruptcy court agreed)

                                        5
 1   that the statute of limitations on any claims against Ms. Halper
 2   had run.   The bankruptcy court told Ms. Halper’s counsel that she
 3   would have to show a good-faith basis for further assertion of
 4   the Fifth Amendment protections.       The bankruptcy court continued
 5   the status conference, and the parties represented that
 6   Ms. Halper’s deposition was scheduled for August 20, 2015.
 7        The Lenders noticed Ms. Halper’s deposition and propounded
 8   interrogatories, requests for admissions, and requests for
 9   production of documents.   But shortly before her deposition,
10   Ms. Halper retained new counsel and requested an extension of
11   time to respond to the discovery requests.      The parties
12   stipulated to continue her deposition until September and then
13   October.   Ms. Halper, however, delayed in producing documents, so
14   the parties agreed to continue her deposition until January 2016.
15        The parties continued the deposition again until March due
16   to developments in the main bankruptcy case.      However, shortly
17   before the deposition, Mr. Cohen fell ill, so the parties agreed
18   to another continuance.
19        Thereafter, the parties could not agree on a deposition
20   date.   At a status conference in April, the bankruptcy court
21   ordered Ms. Halper’s deposition to take place in May.
22        A week before the scheduled deposition, Ms. Halper’s counsel
23   informed the Lenders’ counsel that Ms. Halper would not attend
24   the deposition because she had to care for her father following
25   eye surgery.   The parties agreed to reschedule the deposition for
26   June.
27        Two days prior to the June deposition, Ms. Halper’s counsel
28   stated that Ms. Halper would again not attend her deposition

                                        6
 1   because she underwent surgery and was unable to participate in
 2   “stressful activity” for at least two months.   The Lenders agreed
 3   to continue the deposition to September.   The stipulation for the
 4   continuance provided that the Lenders reserved their rights to
 5   seek sanctions against Ms. Halper for discovery abuses and
 6   refusal to sit for her deposition.
 7        An hour before the scheduled start of Ms. Halper’s
 8   deposition in September, her counsel e-mailed the Lenders’
 9   counsel, informing them that she would not appear.    In the email,
10   Ms. Halper’s counsel wrote that, in a telephone conversation the
11   preceding day, the Lenders’ counsel had said that he intended to
12   prove that Ms. Halper “stole” millions of dollars.    Interpreting
13   this as a threat of criminal prosecution (even though it was made
14   by counsel for private parties, not a prosecutor), Ms. Halper’s
15   counsel claimed that she wanted additional criminal
16   representation and would invoke her Fifth Amendment privilege
17   against self-incrimination.
18   D.   The Lenders’ motion for an order to show cause
19         The Lenders responded to this last-minute derailment of the
20   deposition schedule with motions for an order to show cause why
21   Ms. Halper should not be held in contempt for her repeated
22   failure to sit for her deposition (“OSC Motion”).    They requested
23   terminating sanctions under Civil Rule 37 and argued that “there
24   is no indication that the Defendant will ever appear for
25   deposition . . . .”   They contended that terminating sanctions
26   were warranted under the Ninth Circuit’s five-part test because:
27   (1) the matter should have been resolved expeditiously but had
28   dragged on for over five years; (2) Ms. Halper’s tactics to

                                      7
 1   “delay, obstruct and obfuscate” had increased the time necessary
 2   for the court to manage its docket; (3) the Lenders had been
 3   prejudiced by their inability to go to trial and the legal costs
 4   arising from the delay; (4) public policy favoring disposition on
 5   the merits did not outweigh Ms. Halper’s bad faith and willful
 6   conduct; and (5) lesser sanctions were not appropriate because
 7   they would not be effective in compelling Ms. Halper’s
 8   cooperation, as shown by her disregard for the court’s previous
 9   warnings.   In the alternative, the Lenders requested monetary
10   sanctions but maintained that monetary sanctions alone would be
11   insufficient to compel Ms. Halper’s compliance.   They represented
12   that they had incurred a combined total of over $87,000 in
13   attorneys’ fees and costs attempting to compel Ms. Halper’s
14   deposition.
15        Ms. Halper opposed the OSC Motion.   She argued that there
16   were extenuating circumstances that caused her to decline to
17   appear on the most recently scheduled deposition date – namely,
18   her discovery that the Lenders would question her regarding
19   “certain alleged transfers of money” that “would go beyond the
20   issues that can be adjudicated within this adversary proceeding,
21   and extend into criminal law issues to be used to pursue criminal
22   liability against the Defendant.”    She stated that she wanted to
23   consult a criminal defense attorney and asked for a reasonable
24   continuance.
25        The court granted the OSC Motion and issued an order to show
26   cause (“OSC”) why Ms. Halper should not be held in contempt for
27   her failure to attend her deposition and “all the asserted bad
28   faith delay tactics described in the Motion and failure to comply

                                      8
 1   with Court orders[.]”   In response to the OSC, Ms. Halper
 2   submitted a declaration in which her criminal defense counsel
 3   attested that, because “a claim was made by counsel for the
 4   moving party that he believes Ms. Halper was engaged in criminal
 5   wrong-doing,” Ms. Halper had good cause to not appear for her
 6   deposition in order to protect her Fifth Amendment rights.
 7        The bankruptcy court held a hearing on the OSC on
 8   December 6, 2016.   The bankruptcy court indicated that it
 9   disapproved of Ms. Halper’s “abusive” conduct but was not quite
10   ready to issue terminating sanctions.    Instead, it required
11   Ms. Halper to pay monetary sanctions and to sit her for
12   deposition on January 31, 2017.    The court thought that
13   “substantial monetary sanctions are worthwhile.”    Although the
14   Lenders’ counsel contended that the Lenders had incurred over
15   $100,000 in attorneys’ fees in connection with Ms. Halper’s
16   deposition, the court ordered Ms. Halper to pay the Lenders
17   $40,000 in $10,000 increments.    The court told the parties to
18   agree to a payment plan, but the parties were unable to do so.
19   The Lenders’ counsel wanted payments every two weeks and
20   represented that Ms. Halper wanted to pay $10,000 on December 20
21   and January 13, with a final $20,000 payment on February 6.
22   Ms. Halper then stated that she did not have the means to pay
23   $40,000 and offered to pay $10,000 within 30 days.    Ms. Halper
24   also informed the court that she would have to “figure this out”
25   and “liquidate something.”   The court considered the Lenders’
26   desire to secure the money prior to the January 31 deposition and
27   ordered payments on December 20, January 13, January 27, but
28   extended the final payment to February 24 to afford Ms. Halper

                                       9
 1   additional time.
 2        On December 19, the bankruptcy court entered its order
 3   finding Ms. Halper in contempt of court (“Contempt Order”).      The
 4   court ordered monetary sanctions and ordered Ms. Halper to appear
 5   for her deposition.    It additionally stated:
 6        If Debtor/Defendant fails to comply with any of the
          above terms of this Order, then the Plaintiff’s counsel
 7        shall submit a Declaration attesting to the fact that
          the Debtor/Defendant failed to comply with a provision
 8        of this Order, and lodge an Order providing for entry
          of terminating sanctions (which will be issued by this
 9        Court against the Debtor/Defendant), which will include
          the Court striking the Debtor/Defendant’s Answer in the
10        above-captioned Adversary Proceeding and entering a
          Default Judgment against the Debtor/Defendant.
11
12   The bankruptcy court continued the hearing on the OSC to follow
13   up on Ms. Halper’s compliance.
14        Ms. Halper failed to comply with the Contempt Order.    The
15   Lenders’ counsel filed a declaration that Ms. Halper did not make
16   the second installment payment on January 13.    On January 30, the
17   court entered an order finding her in contempt and awarding
18   sanctions.    The court: (1) struck Ms. Halper’s answer;
19   (2) directed the clerk of court to enter default against
20   Ms. Halper in the adversary proceedings under Civil Rule 55(a)
21   and Rule 7055; and (3) stated that the Lenders are entitled to
22   default judgment and directed them to file evidence in support of
23   damages.
24        The bankruptcy court entered default against Ms. Halper on
25   February 23, 2017.
26   E.   The Lenders’ Motion for Default Judgment
27        The Lenders moved for default judgment (“Motion for Default
28   Judgment”).    They argued that, by virtue of the default, the

                                      10
 1   allegations in the adversary complaints were deemed admitted.
 2   They also offered declarations which they argued proved the
 3   elements of § 523(a)(2)(A): (1) Ms. Halper had made numerous
 4   false representations regarding the loans and the Mexico
 5   Investment to induce the Lenders to lend money; (2) Ms. Halper
 6   made the representations with an intent to deceive the Lenders;
 7   (3) Ms. Halper knew that the representations were false because
 8   she had no intention to pay back the loans from the sources she
 9   described and did not use any of the Flynt Litigation settlement
10   to repay the loans or record any new mortgage as promised to
11   Mr. Cohen; (4) the Lenders justifiably relied on Ms. Halper’s
12   representations because she held herself out as a licensed real
13   estate professional and made numerous representations that she
14   would repay them; and (5) the Lenders sustained damages.
15        The bankruptcy court held a hearing on the Motion for
16   Default Judgment.   Ms. Halper had not filed any written response
17   to the motion but orally requested additional time to pay off the
18   outstanding sanctions award.   The court informed her that her
19   efforts were “too little, too late.”
20        On May 30, 2017, the bankruptcy court entered default
21   judgment against Ms. Halper in the two adversary proceedings
22   (“Default Judgment”).   It awarded Mr. Cohen damages totaling
23   $9,558,241.06.   Similarly, it awarded Twin Palms damages totaling
24   $2,385,950.29.   It held that the awards were nondischargeable
25   under § 523(a)(2)(A).
26        Ms. Halper timely appealed the Default Judgment.
27                              JURISDICTION
28        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

                                     11
 1   §§ 1334 and 157(b)(1) and (2)(I).    We have jurisdiction under
 2   28 U.S.C. § 158.
 3                                  ISSUE
 4        Whether the bankruptcy court erred in entering the Default
 5   Judgment against Ms. Halper.
 6                          STANDARD OF REVIEW
 7        “A terminating sanction, whether default judgment against a
 8   defendant or dismissal of a plaintiff’s action, is very severe.
 9   We review discovery sanctions for abuse of discretion.”    Conn.
10   Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091,
11   1096 (9th Cir. 2007) (citing Jorgensen v. Cassiday, 320 F.3d 906,
12   912 (9th Cir. 2003)); see Ferm v. U.S. Tr. (In re Crowe),
13   243 B.R. 43, 47 (9th Cir. BAP), aff’d, 246 F.3d 673 (9th Cir.
14   2000) (“We will uphold the granting of a default judgment unless
15   there was an abuse of discretion.”).
16        To determine whether the bankruptcy court has abused its
17   discretion, we conduct a two-step inquiry: (1) we review de novo
18   whether the bankruptcy court “identified the correct legal rule
19   to apply to the relief requested” and (2) if it did, whether the
20   bankruptcy court’s application of the legal standard was
21   illogical, implausible, or without support in inferences that may
22   be drawn from the facts in the record.    United States v. Hinkson,
23   585 F.3d 1247, 1262–63 & n.21 (9th Cir. 2009) (en banc).
24                              DISCUSSION
25   A.   The bankruptcy court did not err in granting the Default
          Judgment without an evidentiary hearing.
26
27        Ms. Halper argues that the bankruptcy court erred when it
28   granted Default Judgment, because the court should have held an

                                     12
 1   evidentiary hearing regarding her intent.    We reject this
 2   argument for multiple reasons.
 3        First, she never raised this issue before the bankruptcy
 4   court or requested an evidentiary hearing.    We have stated that,
 5   “[o]rdinarily, federal appellate courts will not consider issues
 6   not properly raised in the trial courts. . . .    An issue only is
 7   ‘properly raised’ if it is raised sufficiently to permit the
 8   trial court to rule upon it.”    Ezra v. Seror (In re Ezra),
 9   537 B.R. 924, 932 (9th Cir. BAP 2015) (citations omitted); see
10   Moldo v. Matsco, Inc. (In re Cybernetic Servs., Inc.), 252 F.3d
11   1039, 1045 n.3 (9th Cir. 2001) (stating that appellate court
12   would not explore ramifications of argument because it was not
13   raised in the bankruptcy court); Levesque v. Shapiro (In re
14   Levesque), 473 B.R. 331, 335 (9th Cir. BAP 2012) (“Ordinarily, if
15   an issue is not raised before the trial court, it will not be
16   considered on appeal and will be deemed waived.”).
17        Ms. Halper did not challenge the allegations or evidence
18   concerning her fraudulent intent.     Nor did she file a motion for
19   reconsideration.   Accordingly, she waived this issue on appeal.3
20
21        3
            We have discretion to “consider an issue raised for the
     first time on appeal if (1) there are exceptional circumstances
22
     why the issue was not raised in the trial court, (2) the new
23   issue arises while the appeal is pending because of a change in
     the law, or (3) the issue presented is purely one of law and the
24   opposing party will suffer no prejudice as a result of the
     failure to raise the issue in the trial court.” In re Ezra,
25 537 B.R. at 932-33 (quoting Franchise Tax Bd. v. Roberts (In re
26   Roberts), 175 B.R. 339, 345 (9th Cir. BAP 1994)). Ms. Halper has
     not identified any exceptional circumstances excusing her failure
27   to raise the issue of her intent below. She also does not
     identify any change in law, assert that the issue is purely one
28                                                      (continued...)

                                      13
 1        Second, her argument is meritless.    A default judgment
 2   specifically does away with the requirement of trial and is not
 3   akin to summary judgment.    “The general rule of law is that upon
 4   default the factual allegations of the complaint, except those
 5   relating to the amount of damages, will be taken as true.”
 6   TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th
 7   Cir. 1987) (citation omitted).    The Lenders’ complaints alleged
 8   all of the elements of a § 523(a)(2)(A) claim in detail.    The
 9   bankruptcy court properly accepted as true the claims in the
10   complaints.
11        Ms. Halper argues that a “trial is required for a Court to
12   determine Appellant’s intent” because “just like a Motion for
13   Summary Judgment, the Court’s function on a motion for default
14   judgment is issue-finding, not issue resolution.”
15        Ms. Halper is patently wrong.    Default judgment is governed
16   by Civil Rule 55; Civil Rule 56 is applicable only to summary
17   judgment; and the standards under the two rules are completely
18   different.    When a party files a motion for summary judgment
19   under Civil Rule 56, the responding party may argue that there is
20   a dispute about the facts.    But when a defendant is in default
21   and the plaintiff seeks a default judgment under Civil Rule 55,
22   the defendant has no right to challenge any of the facts properly
23   alleged in the complaint.    See Sharma v. Salcido (In re Sharma),
24   BAP Nos. CC-12-1302-MkTaMo, CC-12-1520-MkTaMo, 2013 WL 1987351,
25   at *8 (9th Cir. BAP May 14, 2013), aff’d, 607 F. App’x 713 (9th
26
          3
27         (...continued)
     of law, or discuss the prejudice that the Lenders may face.      We
28   will not consider it in the first instance.

                                      14
 1   Cir. 2015) (“Once [debtor] was in default, the only issue before
 2   the bankruptcy court was whether the well-pleaded factual
 3   allegations in the Complaint, deemed true, supported a claim
 4   under Section 523(a)(2)(A), and, if not, whether additional proof
 5   was necessary.”).    The Second Circuit case she cites in support
 6   of the conflation of these rules, United States v. One Tintoretto
 7   Painting Entitled “The Holy Family with Saint Catherine and
 8   Honored Donor”, 691 F.2d 603 (2d Cir. 1982), plainly does not
 9   concern default judgment.   Her contention that the court erred by
10   not applying a summary judgment standard is frivolous.
11        She further argues that the bankruptcy court should have
12   required the Lenders to prove up their claims.   This argument is
13   also frivolous.   While the court has discretion to require
14   further proceedings, the court need not do so.   See Danning v.
15   Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978); In re Sharma, 2013
16 WL 1987351, at *8 (“So long as the bankruptcy court found
17   sufficient evidence in the Complaint’s allegations to support the
18   determination of liability under Section 523(a)(2)(A), its
19   decision survives.   The bankruptcy court did not commit
20   reversible error when it determined the issue of liability
21   without a hearing.”).   The complaints, the Motion for Default
22   Judgment, and the Lenders’ declarations attached thereto
23   adequately laid out the Lenders’ claims and covered all of the
24   elements of § 523(a)(2)(A).   It was not an error to accept the
25   allegations as true.4
26
          4
27          It is not clear that the bankruptcy court applied the test
     for a default judgment laid out in Eitel v. McCool, 782 F.2d
28                                                      (continued...)

                                      15
 1   B.   Terminating sanctions were appropriate.
 2        Ms. Halper apparently thinks that terminating sanctions were
 3   unwarranted; some of her issues on appeal so state.     But the body
 4   of her brief contains only a handful of sentences on that topic,
 5   and none of those sentences includes any citations to authority
 6   or the record.   She does not even mention the governing rule
 7   (Civil Rule 37(b)(2), made applicable in bankruptcy by Rule 7037)
 8   or any of the Ninth Circuit decisions construing it.     See, e.g.,
 9   Conn. Gen. Life Ins. Co., 482 F.3d at 1096.     Thus, she has not
10   “specifically and distinctly raised and argued [these issues] in
11   [her] opening brief.”   Hayes v. Idaho Corr. Ctr., 849 F.3d 1204,
12   1213 (9th Cir. 2017) (quoting Officers for Justice v. Civil Serv.
13   Comm’n of City & Cty. of S.F., 979 F.2d 721, 726 (9th Cir.
14   1992)).   We may decline to address them.    Id.
15        Even if she had properly raised these arguments, we would
16   reject them.   Contrary to her assertion, the bankruptcy court did
17   consider a less severe sanction.     The Lenders argued that the
18   court should immediately strike her answer.     Instead, the court
19   gave Ms. Halper one more chance to sit for her deposition and
20   ordered her to pay a portion of the Lenders’ attorneys’ fees
21   caused by her prior abuses.   The bankruptcy court acknowledged
22   Ms. Halper’s concerns by revising the proposed payment schedule.
23   (The bankruptcy court was not required to accept her unsworn and
24   uncorroborated statement that she could not afford to pay the
25   monetary sanctions on the prescribed schedule.)     The combination
26
          4
27         (...continued)
     1470, 1471–72 (9th Cir. 1986). But Ms. Halper did not raise this
28   issue in the bankruptcy court and does not raise it on appeal.

                                     16
 1   of the monetary sanction and the order to sit for a deposition
 2   was a “less drastic sanction” that gave Ms. Halper a chance to
 3   avoid the terminating sanction.    But when Ms. Halper failed to
 4   make the second installment payment, the “less drastic sanction”
 5   failed, and the court then imposed the terminating sanction that
 6   the Lenders requested in the OSC Motion and that the court
 7   threatened in the Contempt Order.      We see no abuse of discretion.
 8        Accordingly, the bankruptcy court did not err in awarding
 9   terminating sanctions.
10                              CONCLUSION
11        The bankruptcy court did not err in granting default
12   judgment.   We AFFIRM.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

                                       17