Court Opinion

ID: 4675451
Source: CourtListenerOpinion
Date Created: 2021-04-07 23:00:41.001237+00
Date Added: 2024-06-11T08:03:26.185516
License: Public Domain

FILED
                                                                                    APR 7 2021
                          NOT FOR PUBLICATION                                 SUSAN M. SPRAUL, CLERK
                                                                                 U.S. BKCY. APP. PANEL
                                                                                 OF THE NINTH CIRCUIT

          UNITED STATES BANKRUPTCY APPELLATE PANEL
                    OF THE NINTH CIRCUIT

 In re:                                              BAP No. CC-20-1009-GFS
 FRANK JOSEPH JAKUBAITIS,
              Debtor.                                Bk. No. 8:13-bk-10223-TA

 FRANK JOPEPH JAKUBAITIS,                            Adv. No. 8:15-ap-01020-TA
               Appellant,
 v.                                                  MEMORANDUM1
 JEFFREY IAN GOLDEN; RICHARD A.
 MARSHACK; CARLOS PADILLA, III,
               Appellees.

               Appeal from the United States Bankruptcy Court
                    for the Central District of California
               Theodor C. Albert, Bankruptcy Judge, Presiding

Before: GAN, FARIS, and SPRAKER, Bankruptcy Judges

                                 INTRODUCTION

      Chapter 72 debtor Frank Jakubaitis (“Debtor”) appeals the judgment

revoking his discharge under § 727(d). The bankruptcy court struck

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

Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules
of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of
Civil Procedure.
                                            1
Debtor’s answer to the complaint as a sanction for his failure to respond to

the court’s order to show cause (the “Contempt OSC”), which required

Debtor to address his compliance with prior orders compelling discovery

and the status of prior monetary sanctions. After a prove-up hearing, the

bankruptcy court entered default judgment revoking Debtor’s discharge

but dismissed the second claim asserted against Debtor and Mrs. Jakubaitis

for turnover of assets under § 542 (the “Turnover Claim”).

       Debtor then filed a motion under Civil Rule 60(b), made applicable

by Rule 9024, seeking to vacate the judgment. The court denied the motion

and Debtor appealed.

       Debtor has not demonstrated an abuse of discretion by the

bankruptcy court. We AFFIRM.

                                        FACTS 3

       Debtor filed his chapter 7 petition in January 2013. His discharge was

entered, and his case was closed in January 2014. In 2015, the bankruptcy

court reopened the case to allow creditor Carlos Padilla, III to file an

adversary complaint, and the court reappointed Jeffrey Golden as trustee.

Mr. Padilla, Mr. Golden, and Richard Marshack, the trustee in Mrs.

       3
         We exercise our discretion to take judicial notice of documents electronically
filed in Debtor’s main case and the adversary proceeding. See Atwood v. Chase Manhattan
Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003). Debtor asks us to
strike portions of Plaintiffs’ excerpts of record pertaining to Debtor’s deposition because
those documents are part of the record in a separate appeal before the Ninth Circuit. We
find no merit in Debtor’s argument and deny his motion to strike.
                                            2
Jakubaitis’s chapter 7 case (together “Plaintiffs”), filed a complaint against

Debtor and Mrs. Jakubaitis seeking revocation of Debtor’s discharge and

turnover of various assets. Plaintiffs then moved to substantively

consolidate Debtor’s case with Mrs. Jakubaitis’s chapter 7 case,4 but the

court denied the motion.

      Plaintiffs alleged that Debtor failed to disclose his ownership of

various assets and intentionally underreported his income to qualify for

chapter 7 relief.

A.    Discovery Disputes And The Court’s Prior Orders

      In August 2016, Plaintiffs filed a motion to compel Debtor to respond

to their request for production of documents pursuant to Civil Rule 37(a),

made applicable by Rule 7037. They sought bank records, tax returns, and

financial documents from Debtor and his various entities, including

WeCosign, Inc. After a hearing, the court ordered Debtor to produce the

documents within 30 days but declined to impose monetary sanctions at

that time.

      In January 2017, Debtor failed to appear for his deposition. The

bankruptcy court granted Plaintiffs’ motion to compel Debtor’s attendance

but continued the hearing on the issue of monetary sanctions to permit

Debtor to file a protective order. Debtor filed a motion for a protective

      4  Mrs. Jakubaitis filed a separate chapter 7 case in 2013 and received a discharge
in 2014. After the bankruptcy court denied substantive consolidation, Mr. Marshack
filed a separate adversary complaint in Mrs. Jakubaitis’s bankruptcy case against her
and Debtor, seeking revocation of discharge and turnover of assets.
                                            3
order, asserting in part that the effects of prescription medication made it

impossible for him to give meaningful and accurate deposition testimony.

At the hearing in May 2017, the court denied Debtor’s motion for a

protective order and entered monetary sanctions against Debtor in the

amount of $3,000. The court stated that if Debtor failed to comply with the

order compelling his deposition, “more severe sanctions, including striking

the answer, will be considered.”

      In October 2017, Plaintiffs filed a second motion to compel and

asserted that Debtor appeared for his deposition but refused to answer

several questions, including questions about his mental capacity, which

Plaintiffs argued was pertinent to their case. Plaintiffs sought additional

sanctions of $4,830.

      The bankruptcy court continued the hearing to January 2018 to allow

Debtor to file a second motion for protective order to be heard “well ahead

of the continued hearing.” Debtor filed his second motion for a protective

order one day before the continued hearing.

      At the continued hearing, the bankruptcy court granted the motion to

compel but stated that the deposition could not be taken for 30 days to

allow Debtor’s motion for protective order to be heard. The court stated

that if the motion for protective order was not granted and Debtor

continued to refuse to testify, Plaintiffs were authorized to file a motion for

terminating sanctions.

                                       4
      After a hearing, the bankruptcy court denied Debtor’s second motion

for a protective order and ruled that Plaintiffs could ask questions about

Debtor’s diagnosis, his medications, and their purpose and side effects, but

ordered that Plaintiffs could not ask Debtor questions about specific

conversations with his psychotherapist. Debtor appealed that decision. We

affirmed in part and reversed in part. Jakubaitis v. Padilla (In re Jakubaitis),

604 B.R 562, 577 (9th Cir. BAP 2019).

B.    The Contempt OSC And Terminating Sanctions

      In February 2019, while the appeal of the order compelling Debtor’s

deposition was pending, Plaintiffs filed a motion for sanctions seeking to

hold Debtor in contempt for failing to comply with the October 2016 order

compelling production of documents. Plaintiffs noted that the court had

previously ordered Debtor to comply with discovery rules and imposed

monetary sanctions, but Debtor continued to ignore orders and had not

paid sanctions ordered by the court despite having monthly income of

approximately $10,000. Plaintiffs sought terminating sanctions against

Debtor, or alternatively, monetary sanctions in the amount of $1,950.

      Debtor opposed the motion and argued that Plaintiffs failed to make

any showing of willfulness, bad faith, or substantial fault which is required

for terminating sanctions. Debtor stated that he complied with the court’s

order compelling production and served his responses on Plaintiffs. He

referred to “Respondent’s Exhibit C ‘Copies and proof of service’ dated

xx/xx/xxxx,” but he did not attach any exhibit to his opposition. He also

                                         5
disputed Plaintiffs’ assertion that he had monthly income of $10,000 and

suggested that the court had already reviewed his income when it granted

two applications for fee waivers.

      In March 2019, the bankruptcy court issued the Contempt OSC which

required responses from Debtor, Mrs. Jakubaitis, and Plaintiffs to several

specific issues raised by the court. The court ordered the parties to appear

at a hearing on May 2, 2019, and to support their responses with

appropriate declarations and evidence. The Contempt OSC specifically

stated that “[i]f inability to pay the sanctions is to be argued, it must be

supported in writing.” The Contempt OSC further stated, “[i]f the court is

not given satisfactory responses, sanctions including monetary sanctions or

striking of pleadings as terminating sanctions, may issue.” The parties

stipulated to continue the hearing to May 9, 2019.

      Plaintiffs responded to the Contempt OSC by filing a declaration and

a request for judicial notice. Plaintiffs outlined the history of Debtor’s

failures to comply with court orders and cooperate in discovery in the

adversary proceeding and in related state court litigation. Plaintiffs stated

in their response that Debtor had yet to provide any evidence why he

should not be held in contempt. Debtor did not file any written response to

the Contempt OSC.

      Prior to the hearing, the court issued a tentative decision which

indicated the court’s intent to strike Debtor’s answer based on his failure to

respond to the Contempt OSC. After the tentative decision was issued, and

                                        6
one day before the hearing, Debtor filed an ex parte motion to continue the

hearing.

     Debtor argued that the court was divested of jurisdiction to issue

terminating sanctions due to the pending appeal of the order compelling

his deposition. Debtor also stated in his motion to continue that “counsel

for [Debtor] due to the heavy press of other business, including bankruptcy

matter in Chapter 13 and in adversary cases in Santa Ana, in Riverside, and

Los Angeles, has had inadequate time to review and respond adequately.”

     At the hearing, Debtor acknowledged that he had not paid the

monetary sanctions and said that he thought he sent the responses to the

production request. Plaintiffs argued that they had not received any

documents in response to the request for production and that Debtor failed

to respond to the Contempt OSC despite the court’s warning that such

failure would result in the court striking the answer.

     The bankruptcy court adopted the tentative and struck Debtor’s

answer to the complaint. Although Mrs. Jakubaitis had been previously

dismissed from the case, an order had not been entered. But, because she

filed an answer to the complaint and failed to respond to the Contempt

OSC, the court also struck her answer.

     Debtor filed a motion for reconsideration and argued that: (1) striking

Mrs. Jakubaitis’s answer was clear error because she was dismissed from

the case; (2) his failure to respond to the Contempt OSC was not willful or

in bad faith because Plaintiffs failed to comply with service requirements

                                      7
for the motion and the Contempt OSC and thus, due process was not

satisfied; (3) the doctrines of laches and waiver barred Plaintiffs from

seeking sanctions based on the 2016 order compelling production; and

(4) the court made an implicit finding that Debtor was impecunious, and

therefore unable to pay the monetary sanctions, when it granted him leave

to proceed in forma pauperis in the pending appeal.

      The bankruptcy court denied the motion for reconsideration. It held

that Debtor had sufficient notice of the Contempt OSC and the hearing, and

Debtor waived any technical service errors. The court noted that Debtor

offered no argument or evidence to demonstrate his inability to comply

with the court’s prior order compelling discovery. Finally, the court said

that Debtor failed to respond in writing as required by the Contempt OSC

and monetary sanctions had proven to be ineffective.

      After striking the answer, the bankruptcy court directed that the case

would proceed to a “default prove-up,” and it permitted Debtor to file a

brief regarding the standard for a default judgment.

C.    The Default Judgment And Debtor’s Civil Rule 60(b) Motions

      After the court struck Debtor’s answer, Plaintiffs filed a motion for

default judgment. They sought revocation of Debtor’s discharge pursuant

to § 727(d) for false statements made under oath. In addition to the

allegations that Debtor underreported his income, Plaintiffs asserted that

Debtor made materially false declarations about the existence and value of

a loan Debtor made to WeCosign, Inc. Plaintiffs also sought judgment

                                      8
against Debtor and Mrs. Jakubaitis for the value of the loan under § 542.

Plaintiffs requested to amend the complaint as necessary to conform to the

evidence.

      Plaintiffs supported their motion for default judgment with a

declaration from their attorney, a request for judicial notice, a separate

statement of accounts, and a statement of undisputed facts. They submitted

evidence including financial records from WeCosign, Inc., which Plaintiffs

obtained from a court appointed receiver. Plaintiffs asserted that the

documents evidenced the existence and amount of the loan and indicated

that payments were made on the loan to Debtor and Mrs. Jakubaitis after

Debtor made sworn statements that the loan was forgiven and had no

value.

      In response, Debtor provided an expert opinion that a financial

statement submitted by Plaintiffs to demonstrate the existence of the

WeCosign loan appeared to have been altered. Debtor also argued that

Plaintiffs failed to satisfy the procedural requirements for a default

judgment because they did not seek entry of a default prior to filing the

motion for default judgment. He also objected to other evidence submitted

by Plaintiffs and argued that Plaintiffs were seeking different relief in their

application than in their complaint.

      The bankruptcy court issued its tentative ruling, indicating its intent

to enter judgment revoking Debtor’s discharge but to deny judgment on

the Turnover Claim because it did not find legal or evidentiary support for

                                       9
a monetary judgment. At the hearing, Debtor argued that because the court

did not find that the monetary judgment was warranted, it should render

judgment in his favor on the Turnover Claim.

      In September 2019, the bankruptcy court entered an order granting

the motion pursuant to the terms of the tentative ruling. It entered separate

findings of fact and conclusions of law, and the judgment revoking

Debtor’s discharge, on September 24, 2019. The findings of fact and

conclusions of law stated “[w]ith regard to matter of a turnover of assets to

the estate claim, that claim is dismissed without prejudice.”

      On October 2, 2019, Debtor filed a motion to vacate the judgment

under Civil Rule 60(b). He argued that: (1) Plaintiffs committed fraud by

presenting altered evidence; (2) the judgment was void because Mr.

Marshack lacked standing and Debtor’s due process rights were violated

by the provisions in the order which permitted Plaintiffs to pursue Debtor

and Mrs. Jakubaitis on other claims; (3) Debtor’s failures to respond to the

order compelling production and the Contempt OSC were caused by his

attorney’s excusable neglect; (4) Plaintiffs’ failure to obtain entry of default

before seeking a default judgment constituted “extraordinary

circumstances” justifying relief under Civil Rule 60(b)(6); and (5) the

bankruptcy court was required to enter judgment in favor of Debtor on the

Turnover Claim.

      Debtor filed an amended Civil Rule 60(b) motion on October 25, 2019.

The amended motion included minor changes but otherwise made the

                                       10
same arguments for relief as the original motion. Plaintiffs opposed the

motion and argued that Debtor did not support the motion with any

declaration or other evidence and all the arguments made by Debtor were

previously raised in his motion for reconsideration and rejected by the

court.

      On November 7, 2019, Debtor filed a notice of errata and an amended

Civil Rule 60(b) motion, which supplemented the motion with a

declaration of Debtor’s attorney. Plaintiffs filed another opposition and

reiterated that Debtor’s arguments and the declaration were merely a

rehash of prior arguments that the court had already rejected.

      The bankruptcy court denied Debtor’s motion and Debtor timely

appealed.

                              JURISDICTION

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

157(b)(2)(J). Plaintiffs argue that Debtor’s notice of appeal was untimely,

and we therefore lack jurisdiction. We have jurisdiction to determine our

own jurisdiction and do so de novo. Wilkins v. Menchaca (In re Wilkins), 587

B.R. 97, 100 (9th Cir. BAP 2018).

      Under Rule 8002, “a notice of appeal must be filed with the

bankruptcy clerk within 14 days after the entry of the judgment, order, or

decree being appealed.” If a party files a Civil Rule 60(b) motion within 14

days of the judgment, the time to appeal runs “from the entry of the order

disposing of the last such remaining motion.” Rule 8002(b).

                                      11
      Plaintiffs argue that although Debtor filed his Civil Rule 60(b) motion

within 14 days of the judgment, Debtor effectively withdrew it when he

filed the amended motions. Plaintiffs do not cite any authority supporting

their contention that the amended motions operated to withdraw the

original motion. Debtor supplemented the original motion with a

declaration, but his basis for relief did not change. Debtor timely filed his

Civil Rule 60(b) motion which extended the time to appeal under Rule

8002(b). The bankruptcy court disposed of Debtor’s request for relief when

it denied the motion on December 30, 2019. Because the time to appeal runs

from the entry of the order disposing of Debtor’s motion, the appeal was

timely, and we have jurisdiction.

                                     ISSUES

      Did the bankruptcy court abuse its discretion by striking Debtor’s

answer?

      Did the bankruptcy court abuse its discretion by entering the default

judgment against Debtor?

      Did the bankruptcy court abuse its discretion by denying Debtor’s

Civil Rule 60(b) motion?

                          STANDARDS OF REVIEW

      We review the bankruptcy court’s order striking Debtor’s answer as a

sanction and the court’s entry of default judgment for abuse of discretion.

Hester v. Vision Airlines, Inc., 687 F.3d 1162, 1169 (9th Cir. 2012); Eitel v.

McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). “Absent a definite and firm

                                         12
conviction that the [bankruptcy] court made a clear error in judgment, this

court will not overturn a [Civil] Rule 37 sanction.” Adriana Int’l Corp. v.

Thoeren, 913 F.2d 1406, 1408 (9th Cir. 1990).

      We also review the bankruptcy court’s decision under Civil Rule

60(b) for abuse of discretion. United Student Funds, Inc. v. Wylie (In re Wylie),

349 B.R. 204, 208 (9th Cir. BAP 2006). A bankruptcy court abuses its

discretion if it applies an incorrect legal standard or its factual findings are

illogical, implausible, or without support in the record. TrafficSchool.com,

Inc. v. Edriver, Inc., 653 F.3d 820, 832 (9th Cir. 2011).

      “Where the sanction results in default, the sanctioned party’s

violations must be due to the ‘willfulness, bad faith, or fault’ of the party.”

Jorgensen v. Cassiday, 320 F.3d 906, 912 (9th Cir. 2003) (quoting Hyde & Drath

v. Baker, 24 F.3d 1162, 1167 (9th Cir 1994)). We review the bankruptcy

court’s finding of willfulness, bad faith, or fault for clear error. Id. Factual

findings are clearly erroneous if 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

      Debtor argues that the bankruptcy court erred by striking his answer

because the Contempt OSC was unrelated to the merits of the case and his

failure to respond was caused by his attorney’s excusable neglect. He

asserts that the court erred by entering the judgment without a separate

entry of default and argues that default judgment was not appropriate

                                         13
because public policy favors resolution of cases on their merits, material

facts were in dispute, and evidence submitted by Plaintiffs was altered. He

also argues that the bankruptcy court was required to either grant

judgment in Debtor’s favor on the Turnover Claim or dismiss it with

prejudice. Finally, Debtor contends that the court erred by denying his

Civil Rule 60(b) motion.

A.    The Bankruptcy Court Did Not Abuse Its Discretion By Striking
      Debtor’s Answer

      Pursuant to Civil Rule 37(b)(2)(a), if a party “fails to obey an order to

provide or permit discovery . . . the court where the action is pending may

issue further just orders [including] . . . (iii) striking pleadings in whole or

in part.” The bankruptcy court also has inherent authority to control its

docket and “[i]n the exercise of that power [it] may impose sanctions

including, where appropriate, default or dismissal.” Thompson v. Hous.

Auth. of City of L.A., 782 F.2d 829, 830 (9th Cir. 1986).

      1.    Debtor’s Sanctionable Conduct Was The Result Of
            Willfulness, Bad Faith, or Fault

      Before considering severe sanctions, such as striking an answer or

entering default judgment, the bankruptcy court must first determine that

the party’s sanctionable conduct is the result of “willfulness, bad faith, or

fault” of that party. Jorgensen, 320 F.3d at 912. In the context of sanctions,

“‘disobedient conduct not shown to be outside the control of the litigant’ is

all that is required to demonstrate willfulness, bad faith, or fault.” Henry v.

                                        14
Gill Indus., Inc., 983 F.2d 943, 948 (9th Cir. 1993) (quoting Fjelstad v. Am.

Honda Motor Co., 762 F.2d 1334, 1341 (9th Cir. 1985)). Debtor argues that his

failure to respond to the Contempt OSC or the court’s order compelling

production of documents was not the result of his willfulness, bad faith, or

fault, but rather the excusable neglect of his attorney.

      Debtor has not demonstrated that his attorney’s negligence was

excusable. Debtor’s attorney stated that his former paralegal misfiled the

production responses and he was unaware of the error. He also stated that

although he received the Contempt OSC, due to “staffing issues and other

bankruptcy and litigation related matters [he] did not see the order . . . or it

did not register to [him] that the entry was what it was.”

      At least regarding the Contempt OSC, the record does not support

Debtor’s contention. His attorney received Plaintiffs’ response to the

Contempt OSC which indicated that Debtor had not provided any

evidence why he should not be held in contempt. And Debtor’s attorney

was sufficiently aware of the Contempt OSC to meet and confer with

Plaintiffs’ counsel and file a stipulated motion to continue the hearing to

May 9, 2019. Debtor’s counsel then filed an ex parte motion to continue the

May 9, 2019 hearing but made no mention of his failure to understand the

obligation to respond to the Contempt OSC. Instead, he stated that “due to

the heavy press of other business,” he had “inadequate time to review and

respond adequately.”

                                        15
       Debtor offered no explanation why he failed to either pay the

monetary sanctions ordered by the court or seek relief from that order, and

he has not shown that his failure to respond to the Contempt OSC was

outside of his control. The bankruptcy court did not clearly err in

determining that the sanctionable conduct was a result of Debtor’s

willfulness, bad faith, or fault.

       2.     Case-Dispositive Sanctions Were Appropriate

       The Ninth Circuit has constructed a five-part test to determine

whether a case-dispositive sanction, such as striking an answer in full, is

just. 5 Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091,

1096 (9th Cir. 2007). The test requires the bankruptcy court to consider:

“(1) the public’s interest in expeditious resolution of litigation; (2) the

court’s need to manage its dockets; (3) the risk of prejudice to the party

seeking sanctions; (4) the public policy favoring disposition of cases on

their merits; and (5) the availability of less drastic sanctions.” Id.

       It is not necessary for the bankruptcy court to make explicit findings

regarding these factors and we review the record independently to

determine whether case-dispositive sanctions were an abuse of discretion.

Adriana Int’l Corp., 913 F.2d at 1412 (citing Malone v. U.S. Postal Serv., 833

F.2d 128, 130 (9th Cir. 1987)). We may affirm case-dispositive sanctions

       5
        We apply this five-factor test whether the bankruptcy court’s case-dispositive
sanction is pursuant to Civil Rule 37(b) or its inherent authority. See Adriana Int’l Corp.,
913 F.2d at 1412 n.4.
                                             16
“where at least four factors support . . . or where at least three factors

strongly support [case-dispositive sanctions].” Dreith v. Nu Image, Inc., 648

F.3d 779, 788 (9th Cir. 2011) (quoting Yourish v. Cal. Amplifier, 191 F.3d 983,

990 (9th Cir. 1999)).

      When a party violates a court order, the first two factors support

sanctions and the fourth factor weighs against a default. Adriana Int’l Corp.,

913 F.2d at 1412. Therefore, the third and fifth factors are decisive.

      In determining the risk of prejudice, we consider whether the

Debtor’s actions impaired Plaintiffs’ ability to go to trial or threatened to

interfere with the rightful decision of the case. Id. We evaluate prejudice in

part with reference to Debtor’s excuse for failing to comply with the

Contempt OSC. Malone, 833 F.2d at 131. “Failure to produce documents as

ordered . . . is considered sufficient prejudice.” Adriana Int’l Corp., 913 F.2d

at 1412 (citing Sec. & Exch. Comm’n v. Seaboard Corp., 666 F.2d 414, 417 (9th

Cir. 1982)).

      Here, Debtor’s repeated failures to comply with bankruptcy court

orders, including to produce documents and to respond to the Contempt

OSC, interfered with the rightful decision of the case. Debtor has offered no

cogent excuse for his failures to comply with court orders. The third factor

supports striking the answer.

      The fifth factor requires the bankruptcy court to consider lesser

sanctions. Under this factor, we determine whether the bankruptcy court

“considered lesser sanctions, whether it tried them, and whether it warned

                                       17
the recalcitrant party about the possibility of case-dispositive sanctions.”

Conn. Gen. Life Ins. Co., 482 F.3d at 1096. In egregious cases, where the

bankruptcy court imposes alternative sanctions before striking an answer,

“such an inquiry is not necessary.” Adriana Int’l Corp., 913 F.2d at 1413.

      The bankruptcy court previously imposed monetary sanctions

against Debtor for his failures to comply with discovery orders. Debtor did

not pay those sanctions. The bankruptcy court considered further

monetary sanctions but had no reason to believe they would be effective.

The court warned Debtor numerous times that continued failures to

comply could result in case-dispositive sanctions. The fifth factor supports

case-dispositive sanctions.

      Debtor argues that striking his answer was improper because the

Contempt OSC was unrelated to merits of the case. He suggests that the

bankruptcy court struck his answer as punishment for appealing the

court’s order denying a protective order and compelling his deposition.

      The record is clear that the bankruptcy court struck Debtor’s answer

because he failed to respond to the Contempt OSC and failed to explain

why he had not complied with prior court orders. The bankruptcy court

repeatedly warned Debtor that continued noncompliance would result in

case-dispositive sanctions. But Debtor did not respond to the Contempt

OSC as ordered, did not produce the documents required by the order

compelling production, and did not pay the sanctions ordered by the court.

                                      18
      The court’s order striking Debtor’s answer was directly related to

Debtor’s continued discovery abuses which affected the merits of the case,

and the court also had inherent authority to strike Debtor’s answer for

failing to comply with court orders. The bankruptcy court did not abuse its

discretion by striking Debtor’s answer.

B.    The Bankruptcy Court Did Not Abuse Its Discretion By Entering
      Default Judgment Revoking Debtor’s Discharge

      1.    Separate Entry of Default Was Not Required

      Civil Rule 55(a) applies “[w]hen a party against whom a judgment

for affirmative relief is sought has failed to plead or otherwise defend . . .”

Debtor did not fail to plead or otherwise defend the case. It is true that

entry of a default is a prerequisite to a default judgment where a party has

not pleaded or otherwise defended the case, but “[Civil] Rule 55(a) does

not represent the only source of authority in the rules for the entry of a

default that may lead to judgment.” C. Wright & A. Miller, 10A Fed. Prac.

& Proc. Civ. § 2682 (4th ed. 2020).

      Here, a separate entry of default serves no purpose. Debtor was

aware that the court struck his answer as a sanction and the case would

proceed by a default prove-up hearing. The order striking Debtor’s answer

operated the same as an entry of default and had the same effect. All well-

pleaded allegations in the complaint were admitted, all affirmative

defenses were struck, and Debtor’s liability was established. See Adriana

Int’l Corp., 913 F.2d at 1414 (citing Geddes v. United Fin. Grp., 559 F.2d 557,

                                       19
560 (9th Cir. 1977)); Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561

F.3d 1298 (11th Cir. 2009) (“Because the answer and counterclaims were

struck, Appellants had defaulted.”). The court was not required to

separately enter default under Civil Rule 55(a).

      2.    Entry of Default Judgment Was Not an Abuse of Discretion

      The bankruptcy court had broad discretion to grant default

judgment. Kubick v. FDIC (In re Kubick), 171 B.R. 658, 659 (9th Cir. BAP

1994). We will not disturb a default judgment if “(1) the defendant’s

culpable conduct led to the default; (2) the defendant has no meritorious

defense; or (3) the plaintiffs would be prejudiced if the judgment is set

aside.” Alan Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir.

1988).

      If the default judgment was entered because of Debtor’s culpable

conduct, “we need not consider whether a meritorious defense was shown,

or whether the plaintiff would suffer prejudice if the judgment were set

aside.” Id. (quotation marks and citations omitted). “[A] defendant’s

conduct is culpable if he has received actual or constructive notice of the

filing of the action and intentionally failed to answer.” TCI Grp. Life Ins.

Plan v. Knoebber, 244 F.3d 691, 697 (9th Cir. 2001) (quoting Alan Newman

Prods., 862 F.2d at 1392), overruled on other grounds by Egelhoff v. Egelhoff ex

rel. Breiner, 532 U.S. 141 (2001).

      The bankruptcy court necessarily determined that Debtor’s conduct

was culpable when it struck his answer. Debtor received notice of the

                                        20
Contempt OSC and intentionally failed to answer. Although he contends

his failure to respond was attributable to his attorney’s excusable neglect,

that neglect was not excusable. Debtor also failed, without explanation, to

pay the monetary sanctions ordered by the court or to produce documents

required by the order compelling production.

      Debtor also argues that the bankruptcy court erred by entering

default judgment because material facts were disputed, public policy

favors resolution on the merits, and the evidence submitted by Plaintiffs

was altered.

      The policy favoring resolution on the merits is part of the five-factor

test which must be considered prior to entering case-dispositive sanctions.

As discussed above, this factor weighs against striking the answer, but it

does not overcome the remaining factors which support terminating

sanctions.

      The existence of disputed facts is similarly unavailing. After the

bankruptcy court struck Debtor’s answer, all well-pleaded facts in the

complaint are taken as true, except as to damages. Adriana Int’l Corp., 913

F.2d at 1414; TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir.

1987).

      And, although Debtor suggests that evidence had been altered, the

bankruptcy court did not need to rely on the evidence to enter judgment.

Plaintiffs’ allegations that Debtor made a false oath about his income were

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admitted once the answer was struck and those allegations are sufficient to

revoke Debtor’s discharge without evidence related to the WeCosign loan.

       The bankruptcy court did not clearly err in finding Debtor’s conduct

to be culpable and it did not abuse its discretion by entering default

judgment.

      3.    Debtor Was Not Entitled to Judgment on The Turnover Claim

      Debtor contends that the bankruptcy court erred by not entering

judgment in his favor on the Turnover Claim. He does not cite any

authority for this proposition, but we have previously held:

             While a trial court has great discretion in considering
      issues and evidence in a hearing pursuant to Rule 55(b)(2), we
      find no authority that would allow a trial court to enter
      judgment in favor of the defaulting party following such a
      hearing. To enter such a judgment against the non-defaulting
      party because of the failure of that party to sustain its burden of
      proof would make the hearing under Rule 55(b)(2) the same as
      a trial on the merits.

Valley Oak Credit Union v. Villegas (In re Villegas), 132 B.R. 742, 746-47 (9th

Cir. BAP 1991); but see All Points Capital Corp. v. Meyer (In re Meyer), 373 B.R.

84, 89 (9th Cir. BAP 2007) (“If the plaintiff is not entitled to the relief

requested, the court should not enter default judgment and may even enter

judgment in favor of the defaulted defendant.”) (citing Cashco Fin. Servs.,

Inc. v. McGee (In re McGee), 359 B.R. 764, 771–72 (9th Cir. BAP 2006); Wells

Fargo Bank v. Beltran (In re Beltran), 182 B.R. 820, 823–24 (9th Cir. BAP

1995)).
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      Even if the bankruptcy court had authority to enter judgment in

favor of Debtor on the Turnover Claim, it was not required to do so. All

defenses that Debtor may have against future claims are preserved by the

order dismissing the Turnover Claim.

C.    The Bankruptcy Court Did Not Abuse Its Discretion By Denying
      Debtor’s Civil Rule 60(b) Motion

      Debtor argues that the bankruptcy court should have vacated the

default judgment under Civil Rule 60(b)(1), (b)(3), and (b)(4). All of

Debtor’s arguments for relief were raised in his motion for reconsideration

of the order striking his answer, or in opposition to the motion for default

judgment. Debtor cannot use a Civil Rule 60(b) motion to reargue points

already made, or that could have been made, in dispute of the underlying

motion. Branam v. Crowder (In re Branam), 226 B.R. 45, 55 (9th Cir. BAP

1998), aff’d, 205 F.3d 1350 (9th Cir. 1999). We find no merit in Debtor’s

arguments for relief under Civil Rule 60(b).

                               CONCLUSION

      Based on the foregoing, we AFFIRM the bankruptcy court’s order

striking Debtor’s answer and the default judgment revoking Debtor’s

discharge.

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