Court Opinion

ID: 2648176
Source: CourtListenerOpinion
Date Created: 2014-01-04 00:50:33.229824+00
Date Added: 2024-06-11T09:08:33.710165
License: Public Domain

FILED
                                                             JAN 03 2014
 1
                                                        SUSAN M. SPRAUL, CLERK
 2                                                         U.S. BKCY. APP. PANEL
                                                           OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )       BAP No.     CC-13-1229-PaTaD
                                   )
 6   TRACHT GUT, LLC,              )       Bk. No.     SV 12-20308-MT
                                   )
 7                  Debtor.        )       Adv. No.    SV 12-01433-MT
     ______________________________)
 8                                 )
     TRACHT GUT, LLC,              )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )       O P I N I O N
11                                 )
     COUNTY OF LOS ANGELES         )
12   TREASURER AND TAX COLLECTOR; )
     DAVID HAGHNAZARZADEH; YURI    )
13   VOLODINSKY,                   )
                                   )
14                  Appellees.     )
     ______________________________)
15
16                  Argued and Submitted on November 22, 2013
                             at Pasadena, California
17
                             Filed - January 3, 2014
18
               Appeal from the United States Bankruptcy Court
19                 for the Central District of California
20       Honorable Maureen Tighe, U.S. Bankruptcy Judge, Presiding
21
22   Appearances:     Mark Eugene Goodfriend argued for appellant Tracht
                      Gut, LLC. Barry S. Glaser argued for appellee
23                    County of Los Angeles Treasurer and Tax Collector.
24
25   Before:   PAPPAS, TAYLOR and DUNN, Bankruptcy Judges.
26
27
28
 1   PAPPAS, Bankruptcy Judge:
 2
 3           Chapter 111 debtor Tracht Gut, LLC (“Debtor”) appeals the
 4   orders of the bankruptcy court dismissing without leave to amend
 5   its adversary complaint against appellees Los Angeles County
 6   Treasurer and Tax Collector (“the County”), David Haghnazarzadeh
 7   (“Haghnazarzadeh”) and Yuri Volodinsky (“Volodinsky”) under Rule
 8   7012 and Civil Rule 12(b)(6), and denying reconsideration of that
 9   order under Rule 9024 and Civil Rule 60(b)(1).      We AFFIRM.
10                                      FACTS
11           This appeal concerns Debtor’s efforts to avoid the County’s
12   prepetition tax sales of two parcels of real property formerly
13   owned by Debtor.
14           The first property is located on Hatteras Street in Tarzana,
15   California (the “Hatteras Property”).      Real property taxes owed
16   to the County had not been paid on the Hatteras Property since
17   2008.       Pursuant to California tax law, the properties were “tax
18   defaulted” and “subject to [the County’s] power to sell” three
19   years after default.      Debtor purchased the Hatteras Property from
20   E.R. Financial Services & Development, Inc. (“E&N”), NH Simpson
21   Partnership, OF General Partnership, and EM Partnership on April
22   9, 2012, for $60,000, subject to three deeds of trust totaling
23   $920,000.      Debtor recorded the grant deed on July 11, 2012.
24
25
             1
             Unless otherwise indicated, all chapter and section
26   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
27   “Rule” references are to the Federal Rules of Bankruptcy
     Procedure. All “Civil Rule” references are to the Federal Rules
28   of Civil Procedure.

                                         -2-
 1        The second property is located in San Fernando, California
 2   (the “San Fernando Property” and together, the “Properties”).
 3   Taxes on the San Fernando Property also had not been paid since
 4   2008. On April 9, 2012, E&N transferred the San Fernando Property
 5   to Debtor for “valuable consideration.”2   The record does not
 6   indicate if there were any encumbrances on the San Fernando
 7   Property at the time of that sale.    Debtor recorded a grant deed
 8   on November 26, 2012, one day before filing its bankruptcy
 9   petition.
10        On August 31, 2012, the County served a Notice of Auction
11   for a tax sale of the Properties on all interested parties; the
12   sale was set for October 22, 2012.    The Notice of Auction was
13   published on that date in the Los Angeles Daily News.    The record
14   indicates that Debtor, as record owner of the Hatteras Property,
15   was notified of the auction.   Debtor is not on the list of
16   parties given notice concerning the sale of the San Fernando
17   Property, likely because the record owner of the San Fernando
18   Property in August 2012 was still E&N, who received notice.
19        The County conducted the tax sales of the Properties at
20   public auction on October 22, 2012.   The Hatteras Property was
21   sold to appellee Haghnazarzadeh for $300,000, subject to the
22   three deeds of trust.   The San Fernando Property was sold to
23   appellee Volodinsky for approximately $100,000.
24        Debtor filed its petition for relief under chapter 11 on
25
26        2
             The recorded grant deed, however, also provided that the
27   transfer was a “bona fide gift and grantor received nothing in
     return.” The parties do not dispute that Debtor was the owner of
28   the San Fernando Property.

                                     -3-
 1   November 27, 2012.   On December 11, 2012, Debtor filed schedules.
 2   In Schedule A, Debtor claimed to own both of the Properties and
 3   indicated that:
 4        A disputed tax sale occurred on or about October 21,
          2012. The sales price was far less than the market
 5        value of this property. Debtor attempted to pay the
          taxes in full, which the [County] refused to take. As
 6        of the date of this petition, no Tax Deed has been
          recorded and Debtor disputes the validity of the
 7        transfer as an avoidable transfer.
 8        The tax deeds transferring title of the Hatteras Property to
 9   Haghnazarzadeh and the San Fernando Property to Volodinsky were
10   both recorded by the County on December 13, 2012.
11        On December 12, 2012, Debtor commenced the adversary
12   proceeding at issue in this appeal.   In its complaint against the
13   Appellees, Debtor asked the bankruptcy court to grant relief on
14   five separate claims: (1) to avoid the tax sales as fraudulent
15   transfers; (2) for declaratory judgment; (3) for an injunction;
16   (4) for violation of the automatic stay; and (5) for unjust
17   enrichment.
18        The County filed a motion to dismiss the complaint on
19   January 22, 2013, citing Civil Rule 12(b)(6), made applicable in
20   adversary proceedings by Rule 7012.   The County argued that
21   Debtor, on all five counts, had failed to state an adequate claim
22   for relief.   According to the County, there were no facts alleged
23   in the complaint to support granting any relief to Debtor on its
24   claims.   Additionally, the County argued that the Properties were
25   each sold before bankruptcy was commenced, at a regularly
26   scheduled tax sale with competitive bidding procedures, all in
27   compliance with applicable state law.   As a result, the County
28   contended, the purchase price paid by the buyers of the

                                     -4-
 1   Properties should be conclusively presumed to represent
 2   reasonably equivalent value and, therefore, there was no legal
 3   basis to avoid the tax sales as fraudulent transfers under
 4   § 548(a).      Further, since the tax sales occurred prepetition, the
 5   County argued that the Properties were not property of the estate
 6   under § 541 and thus were not protected by the automatic stay
 7   when Debtor’s bankruptcy petition was filed.      Haghnazarzadeh
 8   filed a substantially similar motion to dismiss under Civil Rule
 9   12(b)(6) on January 24, 2013.3
10           Debtor responded to the dismissal motions on February 11,
11   2013.       It generally repeated its arguments that the sales were
12   not made for reasonably equivalent value and, thus, were
13   avoidable.
14           The hearing on the motions to dismiss was set for February
15   20, 2013.      Before the hearing, the bankruptcy court posted a
16   tentative ruling providing, in part:
17           The Complaint is comprised purely of threadbare
             recitals of the elements of the causes of action and
18           conclusory statements. As it reads, the Complaint and
             the allegations therein, are not entitled to the
19           assumption of truth. Most of the information
             surrounding the events in question (dates, relationship
20           among parties, etc.) is fleshed out solely within the
             [motions to dismiss]. . . . For all the reasons stated
21           above, the Court shall dismiss the Complaint with leave
             to amend.
22
23   The bankruptcy court’s tentative ruling also indicated its intent
24   to dismiss Debtor’s claims for declaratory relief and an
25   injunction because they were not claims, but merely forms of
26   relief.
27
             3
28           Volodinsky did not actively participate in the bankruptcy
     court proceedings.

                                         -5-
 1           At the hearing on the motions to dismiss on February 20,
 2   2013, the bankruptcy court heard arguments from counsel for
 3   Debtor, the County and Haghnazarzadeh.    The bankruptcy court
 4   concluded that the complaint should be dismissed and that
 5   amendment of the complaint would be an exercise in futility.
 6           Well, I generally allow one amendment . . . but this
             complaint was unbelievably bad and just clearly was
 7           such a placeholder to see if you could stab at some
             legal theory that might slow things down, but it was
 8           shockingly bad, and now I’m thinking about the legal
             theories that you’ve really refocused my attention on
 9           here at the argument. . . . I agree [with the County]
             that I don’t see what you could plead to get around,
10           and you haven’t convinced me, Mr. Brownstein [Debtor’s
             counsel], that you have some theory that can allow you
11           to plead facts which would warrant relief under
             [§] 548. . . . So I’m going to grant the motion to
12           dismiss with prejudice for the reasons stated in the
             tentative as supplemented by the argument here today.
13
14   Hr’g Tr. 10:18—11:12, April 20, 2013.
15           The bankruptcy court entered an order granting the motions
16   to dismiss on March 13, 2013 (the “Dismissal Order”), stating
17   that:
18           1.   The Debtor can never amend the Complaint to state
                  a viable cause of action as the real properties
19                foreclosed upon at the duly conducted tax sale of
                  the subject properties held on October 22, 2012 as
20                set forth in the Complaint, were and are not
                  properties of the Debtor’s estate for purposes of
21                11 U.S.C. § 541;
22           2.   [t]he Debtor could not properly allege that the
                  County’s post-petition recording of the deeds
23                violated the automatic stay in 11 U.S.C. § 362 as
                  it was solely a ministerial act;
24
             3.   [t]he Debtor could not properly allege that the
25                duly conducted tax sale of the subject properties
                  could be the basis of an action under 11 U.S.C.
26                §§ 548 or 549; and
27           4.   [t]he Court thereby dismissed the Complaint, with
                  prejudice.
28

                                       -6-
 1        On March 27, 2013, Debtor filed a motion for reconsideration
 2   of the Dismissal Order, arguing that “the judgment/order(s) were
 3   entered as a result of surprise, excusable mistake, inadvertence
 4   and/or neglect and/or error of law, that good cause exists
 5   therefore, and that such relief would be in the interests of
 6   justice.”4   Attached to the reconsideration motion was a proposed
 7   First Amended Complaint.   The First Amended Complaint contained
 8   additional factual allegations for the first claim for avoidance
 9   of the tax sales as fraudulent transfers, but simply restated
10   without factual support the second through fifth claims.
11        On May 7, 2013, the bankruptcy court entered a memorandum of
12   decision and an order denying reconsideration.   The court also
13   concluded that Debtor’s proposed First Amended Complaint was not
14   viable:
15        The fact that Debtor now has a proposed amended
          complaint is too little too late. . . . Debtor had
16        ample opportunity to address the lack of a viable
          complaint prior to the filing of the [dismissal
17        motions]. . . . There is no explanation why Debtor did
          not complete due diligence or amend within the 21 days
18        following the filing of the complaint. Fed. R. Civ. P.
          15(a)(1)(A). There is also no explanation why Debtor
19        did not complete due diligence and amend in response to
          the [Civil Rule 12(b)(6) motions] as opposed to filing
20        an Opposition. Fed. R. Civ. P. 15(a). That Debtor’s
          counsel filed an opposition to the [dismissal motions]
21        and now admits that his complaint was conclusory and
22
23        4
             Debtor’s motion cites Civil Rules 55, 59 and 60,
     applicable in adversary proceedings by Rules 7055, 9023 and 9024,
24
     as authority for reconsideration, but Debtor only argued under
25   Civil Rule 60(b)(1). The bankruptcy court also analyzed Debtor’s
     motion under that rule. Under these circumstances, Debtor’s
26   motion should have been treated as one under Civil Rule 59(e).
27   Am. Ironworks & Erectors, Inc. v. N. Am. Constr. Corp., 248 F.3d
892, 898-99 (9th Cir. 2001). However, since the outcome of
28   Debtor’s request would be the same under either standard, we also
     consider only Debtor’s Civil Rule 60(b)(1) arguments.

                                     -7-
 1        lacked specificity tests the spirit of Rule 11. . . .
          Debtor failed at every stage of the litigation process
 2        to provide the grounds of its entitlement to relief.
          Debtor’s failure to timely conduct due diligence and
 3        amend evidences Debtor’s intent to merely delay the
          litigation process. . . . Debtor’s failure to present
 4        a timely viable complaint was purposeful and a delaying
          tactic. The Court declines to exercise its discretion
 5        in favor of a party whose “gross negligence” has caused
          the mistake from which relief is sought.
 6
 7        Debtor filed a timely appeal of the Dismissal Order and the
 8   order denying reconsideration on May 14, 2013.
 9                             JURISDICTION
10        The bankruptcy court had jurisdiction under 28 U.S.C.
11   §§ 1334 and 157(b)(2)(A) and (H).5    We have jurisdiction under 28
12   U.S.C. § 158.
13                                ISSUES
14        Whether the bankruptcy court erred in dismissing Debtor’s
15   complaint under Civil Rule 12(b)(6).
16        Whether the bankruptcy court abused its discretion in
17   declining to allow Debtor to file an amended complaint.
18        Whether the bankruptcy court abused its discretion in
19   denying Debtor’s motion for reconsideration of the dismissal
20   order.
21
22
          5
             This is a proceeding which, in part, involved Debtor’s
23   attempt to recover a fraudulent transfer from third parties.
     Thus, the constitutional power of the bankruptcy court to enter a
24
     final judgment resolving such claims may be in doubt for the
25   reasons discussed in Stern v. Marshall, 131 S. Ct. 2594 (2011)
     and Exec. Benefits Ins. Agency v. Arkison (In re Bellingham Ins.
26   Agency, Inc.), 702 F.3d 553 (9th Cir. 2011), cert. granted, 133
27 S. Ct. 2880 (2013). Since none of the parties, either in the
     bankruptcy court or this appeal, have questioned the authority of
28   the bankruptcy court, we also express no opinion concerning that
     topic.

                                    -8-
 1                            STANDARDS OF REVIEW
 2        We review de novo the bankruptcy court’s order dismissing a
 3   complaint under Civil Rule 12(b)(6).       AE ex rel. Hernandez v.
 4   Cnty. of Tulare, 666 F.3d 631, 636 (9th Cir. 2012).       A dismissal
 5   without leave to amend and with prejudice is reviewed for abuse
 6   of discretion.    Id. at 636, 637-38.
 7        Denial of a motion for reconsideration under Civil Rule
 8   60(b)(1) is reviewed for abuse of discretion.      Morris v. Peralta
 9   (In re Peralta), 317 B.R. 381, 385 (9th Cir. BAP 2004).       A
10   bankruptcy court abuses its discretion if it applies an incorrect
11   legal standard or misapplies the correct legal standard, or its
12   factual findings are illogical, implausible or without support
13   from evidence in the record.    United States v. Hinkson, 585 F.3d
14   1247, 1262 (9th Cir. 2009) (en banc).
15                                 DISCUSSION
16                                     I.
17                    The bankruptcy court did not err in
                         dismissing Debtor’s complaint.
18
19   A.   The bankruptcy court did not err in dismissing Debtor’s
          claim for fraudulent transfer.
20
21        Under Rule 7012 and Civil Rule 12(b)(6), a defendant may ask
22   by motion that a complaint be dismissed if it fails to “state a
23   claim upon which relief can be granted.”      In reviewing a Civil
24   Rule 12(b)(6) motion, the trial court must accept as true all
25   facts alleged in the complaint and draw all reasonable inferences
26   in favor of the plaintiff.    Maya v. Centex Corp., 658 F.3d 1060,
27   1068 (9th Cir. 2011); Newcal Indus., Inc. v. Ikon Office
28   Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008).       However, the

                                       -9-
 1   trial court need not accept as true conclusory allegations in a
 2   complaint or legal characterizations cast in the form of factual
 3   allegations.   Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56
 4   (2007); Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139
 5   (9th Cir. 2003).   To avoid dismissal under Civil Rule 12(b)(6), a
 6   plaintiff must aver in the complaint “sufficient factual matter,
 7   accepted as true, to ‘state a claim to relief that is plausible
 8   on its face.’”   Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
 9   (quoting Twombly, 550 U.S. at 570).     A dismissal under Civil Rule
10   12(b)(6) may be based on either the lack of a cognizable legal
11   theory or on the absence of sufficient facts alleged under a
12   cognizable legal theory.   Johnson v. Riverside Healthcare Sys.,
13   534 F.3d 1116, 1121 (9th Cir. 2008).
14        In deciding to dismiss it, the bankruptcy court described
15   Debtor’s original complaint as “unbelievably bad and just clearly
16   was such a placeholder to see if [Debtor] could stab at some
17   legal theory that might slow things down, but it was shockingly
18   bad[.]”   Hr’g Tr. 10:18—20, April 20, 2013.   We agree.
19        Debtor’s first claim for relief in that complaint, which
20   asserted that the tax sales were avoidable fraudulent transfers,
21   consisted of a verbatim recitation of § 548(a)(1)(B), followed by
22   a single sentence:
23        As such, pursuant to 11 U.S.C. Sections 548 and 549, as
          well as on state law grounds, including, but not
24        limited to, California Civil Code 3275, the tax sales
          of the Properties conducted by Defendants should be
25        avoided and set aside.
26   Simply put, even under the liberal rules referenced above,
27   Debtor’s cavalier approach to pleading a claim for relief is
28   inadequate.    The complaint plainly fails to allege the facts

                                      -10-
 1   necessary to state a claim for avoidance of the tax sales.
 2        As to Debtor’s four other claims for relief, two appear, on
 3   their faces, to be legitimate claims (i.e., unjust enrichment and
 4   violation of the automatic stay).       However, like the claim for
 5   fraudulent transfer, they too are cast entirely as conclusory
 6   statements, not facts.   As to Debtor’s “claim” for an injunction
 7   and for declaratory relief, while the bankruptcy court correctly
 8   noted that injunction and declaratory relief are remedies, the
 9   court’s dismissal of those claims solely on that basis was likely
10   harmless error.   Courts routinely consider injunctive and
11   declaratory relief “claims” as demands for relief, provided that
12   there are other claims and facts asserted in the complaint that
13   would warrant such remedies.   Wankowski v. Taylor Bean & Whitaker
14   Mortg. Corp., 2010 WL 5141745, at *3 (D. Nev. Dec. 13, 2010);
15   Infor Global Solutions (Michigan), Inc. v. Hanover Foods Corp.,
16   2009 WL 2778258, at *2 (N.D. Ga. Aug. 28, 2009).      In this case,
17   though, there were no facts asserted in the claims for fraudulent
18   transfer, violation of the stay, or unjust enrichment to support
19   injunctive or declaratory relief, so the bankruptcy court’s
20   dismissal of those claims simply because they were incorrectly
21   labeled “claims” was harmless error.      Further, Debtor did not
22   argue that dismissal of the claims for injunctive relief,
23   declaratory relief, and unjust enrichment was error in its
24   opening brief on appeal, and any such argument is therefore
25   waived.   Ore. Natural Desert Ass’n v. Locke, 572 F.3d 610, 614
26   n.3 (9th Cir. 2009) (“this court will not address claims not
27   argued in the opening brief”).
28        At bottom, none of Debtor’s claims presented “sufficient

                                      -11-
 1   factual matter, accepted as true, to ‘state a claim to relief
 2   that is plausible on its face.’”          Iqbal, 556 U.S. at 678;
 3   Twombly, 550 U.S. at 570.      Indeed, even liberally read, Debtor’s
 4   complaint presented no factual matter to support its prayer for
 5   relief.      The bankruptcy court’s decision to dismiss the complaint
 6   was proper.
 7   B.      The bankruptcy court did not err in dismissing Debtor’s
             claim for violation of the automatic stay.
 8
 9           As mentioned above, Debtor did not argue in its opening
10   brief that the bankruptcy court erred in dismissing the other
11   four claims asserted in its original complaint, and we will not
12   ordinarily address matters not argued in the opening brief.
13   Locke, 572 F.3d at 614 n.3.      However, since the County has
14   addressed the stay violation claim in its brief, we review it
15   here.
16           In the original complaint, Debtor claimed that its legal
17   title in the Properties was not extinguished until the tax deeds
18   were recorded.      Because this occurred postpetition, Debtor argued
19   that the recordings of the deeds violated the automatic stay
20   under § 362(a).      There are at least two flaws in Debtor’s
21   argument.
22           First, Debtor’s right of redemption as to the Properties
23   lapsed the day before the tax sales occurred.         Cal. Rev. & Tax
24   Code § 3707.      A tax deed subsequently provided to a purchaser
25   “conveys title to the purchaser free of all encumbrances of any
26   kind.”      Cal. Rev. & Tax Code § 3712.6     Under these facts, since
27
28           6
             There is California case law suggesting that a
     foreclosure sale induced by fraud or irregularities might be set
     aside and, consequently, the power to redeem revived. Luna v.
                                                        (continued...)

                                        -12-
 1   Debtor’s interest in the Properties lapsed before it filed for
 2   bankruptcy, the Properties never became property of the estate
 3   under § 541, and any action by the County concerning those
 4   Properties would not run afoul of the automatic stay under
 5   § 362(a).
 6        Secondly, as the bankruptcy court ruled, the recording of
 7   the tax deeds postpetition was a ministerial act and, as such,
 8   would not violate the automatic stay.   The Ninth Circuit adopted
 9   the ministerial act exception to the automatic stay in McCarthy,
10   Johnson & Miller v. North Bay Plumbing, Inc. (In re Pettit), 217
11 F.3d 1072, 1080 (9th Cir. 2000) (“Ministerial acts or automatic
12   occurrences that entail no deliberation, discretion, or judicial
13   involvement do not constitute continuations of such a [judicial]
14   proceeding” for purposes of possible violations of the automatic
15   stay).   In Pettit, the court cited with approval to a First
16   Circuit case that extended the ministerial act exception to acts
17   of public officials.   Soares v. Brockton Credit Union (In re
18   Soares), 107 F.3d 969, 973-74 (1st Cir. 1997) (“Thus, when an
19   official’s duty is delineated by, say, a law or a judicial decree
20   with such crystalline clarity that nothing is left to the
21   exercise of the official’s discretion or judgment, the resultant
22   act is ministerial.”).   Cal. Rev. & Tax Code § 3708.1 provides:
23   “Upon execution [of the tax sale and payment of the purchase
24   price] the tax collector shall immediately record the deed with
25   the county recorder and pay the recording fees.”   There is no
26   indication in this or related provisions of California law that
27
28        6
           (...continued)
     Citibank, N.A., 202 Cal. App. 4th 89, 104 (2011). However, Debtor
     has not argued either in the bankruptcy court or in this appeal
     that there were any irregularities or fraud in the tax sale.

                                     -13-
 1   the tax collector has any discretion in recording the deed; he
 2   instead is commanded to record it.
 3        On this record, we conclude that the County’s recording of
 4   the tax deeds was a ministerial act, and the bankruptcy court did
 5   not err in ruling that the recordings did not violate the
 6   automatic stay.
 7                                   II.
 8      Debtor could not amend the complaint as a matter of right.
 9        On appeal, Debtor apparently concedes that its complaint was
10   deficient factually: “The [bankruptcy] court admittedly did not
11   have the requisite factual allegations to render a decision[.]”
12   Debtor’s Op. Br. at 8.7   Rather, Debtor’s focus on appeal is its
13   contention that the bankruptcy court abused its discretion when
14   it denied Debtor’s request to amend the complaint.
15        Debtor’s first argument is that, under these facts, it could
16   amend the complaint at any time as a matter of right.   To support
17   this contention, Debtor argues that Civil Rule 15(a)8 allows a
18
          7
19           At oral argument before the Panel, counsel for Debtor
     again conceded that the bankruptcy court did not err in
20   dismissing the original complaint. He conceded that the First
     Amended Complaint Debtor attempted to submit with its
21
     reconsideration motion was also deficient in pleaded facts.
22
          8
              Civil] Rule 15(a) provides in relevant part that:
23
          Amended and Supplemental Pleadings.
24
25        (a) Amendments Before Trial.
26           (1) Amending as a Matter of Course. A party may
27        amend its pleading once as a matter of course within:
                (A) 21 days after serving it, or
28              (B) if the pleading is one to which a responsive
                                                        (continued...)

                                     -14-
 1   plaintiff to amend a complaint once as a matter of course, and
 2   that the rule does not treat a motion to dismiss under Civil Rule
 3   12(b)(6) as a “responsive pleading” that would terminate the
 4   right to file an amended pleading within 21 days.   Debtor cites
 5   several cases that, arguably, support its position.9
 6        Unfortunately for Debtor, the version of Civil Rule 15 upon
 7   which it relies in its briefing was amended in 2009, after the
 8   cases cited in Debtor’s brief were decided.   A newly added
 9   provision, Civil Rule 15(a)(1)(B), dictates that the right to
10   amend once as a matter of course terminates 21 days after service
11   of a motion under Civil Rule 12(b), (e), or (f).    The Advisory
12   Committee Notes to the 2009 Amendments provide instruction
13   regarding the effects of the change:
14        Former Rule 15(a) addressed amendment of a pleading to
          which a responsive pleading is required by
15        distinguishing between the means used to challenge the
          pleading. Serving a responsive pleading terminated the
16
17        8
           (...continued)
18        pleading is required, 21 days after service of a
          responsive pleading or 21 days after service of a
19        motion under Rule 12(b), (e), or (f), whichever is
          earlier.
20
21             (2) Other Amendments. In all other cases, a party may
          amend its pleading only with the opposing party’s written
22        consent or the court’s leave. The court should freely give
23        leave when justice so requires.

24   Civil Rule 15(a) (2013) (emphasis added).
25        9
             Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101 (7th
26   Cir. 1984); Kelly v. Del. River Jt. Comm’n, 187 F.2d 93 (3d Cir.
     1951); McGruder v. Phelps, 608 F.2d 1023 (5th Cir. 1979); Adams
27   v. Campbell City. School Dist., 483 F.2d 1351 (10th Cir. 1973);
     Smith v. Blackledge, 451 F.2d 1201 (4th Cir. 1971); Nolen v.
28   Fitzharris, 450 F.2d 958 (9th Cir. 1971); Smith v. Cal., 336 F.2d
530 (9th Cir. 1964).

                                    -15-
 1        right to amend. Serving a motion attacking the pleading
          did not terminate the right to amend, because a motion
 2        is not a “pleading” as defined in Rule 7. The right to
          amend survived beyond decision of the motion unless the
 3        decision expressly cut off the right to amend.
             The distinction drawn in former Rule 15(a) is
 4        changed [so that] the right to amend once as a matter
          of course terminates 21 days after service of a motion
 5        under Rule 12(b), (e), or (f). This provision will
          force the pleader to consider carefully and promptly
 6        the wisdom of amending to meet the arguments in the
          motion. A responsive amendment may avoid the need to
 7        decide the motion or reduce the number of issues to be
          decided, and will expedite determination of issues that
 8        otherwise might be raised seriatim. It also should
          advance other pretrial proceedings.
 9
10   [Civil Rule] 15 Advisory Committee Notes (2009).
11        The County’s motion was filed on January 22, 2013.     Under
12   the applicable revised version of Civil Rule 15(a)(1), Debtor’s
13   right to amend its complaint as a matter of course expired on
14   February 12, 2013.   Rather than file an amended complaint within
15   that time, Debtor was instead satisfied to file only an
16   opposition to the motion to dismiss on February 11, 2013.    In
17   other words, Debtor’s rule and case law authorities are no longer
18   good law.10
19                                  III.
20   The bankruptcy court did not abuse its discretion when it denied
              Debtor’s request to file an amended complaint.
21
22        Since Debtor’s right to file an amended complaint as a
23   matter of course expired on February 12, 2013, under Civil Rule
24   15(a)(2), Debtor was required either to obtain the County’s
25
          10
26           It is puzzling why Debtor continues to make this
     argument on appeal. In its Memorandum Decision, the bankruptcy
27   court explicitly cited to Civil Rule 15(a)(1)(B) as an example of
     Debtor’s complicity in delaying judicial process: “There is also
28   no explanation why Debtor did not complete due diligence and
     amend in response to the [motions to dismiss], as opposed to
     filing an opposition. Fed. R. Civ. P. 15(a)(1)(B).”

                                     -16-
 1   consent or leave of the bankruptcy court to amend its complaint.
 2   Here, the County did not consent to Debtor’s request to amend its
 3   complaint, and Debtor faults the bankruptcy court for refusing to
 4   grant leave to amend.
 5        Civil Rule 15(a)(2) requires that the trial court freely
 6   grant leave to amend “when justice so requires.”   There is
 7   extensive case law examining the relevant considerations for a
 8   trial court’s decision to grant or deny leave to amend a
 9   complaint.    The best known, and most frequently cited, precedent
10   is the Supreme Court’s decision in Foman v. Davis, 371 U.S. 178
11   (1962).   In Foman, the Court considered, among other issues,
12   whether a district court abused its discretion by denying leave
13   to amend a complaint without providing any reasons for its
14   decision.    The Court instructed that:
15        In the absence of any apparent or declared reason –
          such as undue delay, bad faith or dilatory motive on
16        the part of the movant, repeated failure to cure
          deficiencies by amendments previously allowed, undue
17        prejudice to the appealing party by virtue of allowance
          of the amendment, futility of amendment, etc. – the
18        leave sought should, as the rules require, be “freely
          given.”
19
20   Id. at 182.    Based on this decision, the exceptions to the policy
21   and rule requiring a liberal approach to requests to amend a
22   complaint have come to be known as the “Foman Factors.”
23        The Ninth Circuit has employed the Foman Factors to review
24   whether a trial court properly exercised its discretion in
25   determining whether to grant leave to amend a complaint.   Sonoma
26   City. Ass’n of Retired Emples. v. Sonoma City, 708 F.3d 1109,
27   1118 (9th Cir. 2013); Griggs v. Pace Am. Group, Inc., 170 F.3d
28   877, 880 (9th Cir. 1999) (holding that a trial court should

                                      -17-
 1   decide a motion to amend a complaint by ascertaining the presence
 2   of any of four factors: bad faith, undue delay, prejudice to the
 3   opposing party, and/or futility).      Of the Foman Factors, the
 4   Ninth Circuit has held that a trial court’s denial of leave to
 5   amend for futility, alone, will be upheld if it is clear that the
 6   complaint could not be saved by any amendment.     Carvalho v.
 7   Equifax Info. Servs., LLC, 629 F.3d 876, 892 (9th Cir. 2010).
 8   In this case, the bankruptcy court based its decision to deny
 9   leave to Debtor to file an amended complaint on two of the Foman
10   Factors, explaining that an amendment would be futile, and
11   concluding that Debtor had engaged in undue delay in proposing
12   the amendment.   These reasons constitute an adequate basis to
13   sustain the bankruptcy court’s decision.     Ecological Rights
14   Found. v. Pac. Gas & Elec. Co., 713 F.3d 502, 520 (9th Cir. 2013)
15   (denying leave to amend for futility and undue delay).
16        As to undue delay, the bankruptcy court determined that,
17        There is no explanation why Debtor’s counsel did not
          complete due diligence prior to filing the complaint.
18        Debtor’s counsel simply states that he intended to meet
          and confer with the principal of Debtor and Debtor’s
19        real estate attorney, and then he intended to file an
          amended complaint.
20
21   The bankruptcy court then noted that Debtor could not
22   satisfactorily explain why it did not complete due diligence and
23   seek to amend the complaint (a) within the 21-day period after
24   filing the original complaint, (b) within the 21-day period
25   following the filing of the County’s Civil Rule 12(b)(6) motion,
26   (c) instead of, or in conjunction with, filing an opposition to
27   the Civil Rule 12(b)(6) motion, or (d) otherwise prior to the
28   hearing on the County’s motion to dismiss.     Indeed, Debtor made

                                     -18-
 1   no attempt to file an amended complaint until the Reconsideration
 2   Motion, three months after filing the original complaint.    As the
 3   bankruptcy court observed,
 4        Debtor failed at every stage of the litigation process
          to provide the grounds of its entitlement to relief.
 5        Debtor’s failure to timely conduct due diligence and
          amend evidences Debtor’s intent to merely delay the
 6        litigation process.
 7        Our review of the record confirms that the facts support the
 8   bankruptcy court’s determination that Debtor engaged in undue
 9   delay in attempting to amend the complaint.    Thus, at least one
10   Foman Factor supports the court’s decision to deny leave to amend
11   the complaint.
12        Another and compelling ground for denying leave to amend
13   Debtor’s complaint is futility.     Ecological Rights Found., 713
14 F.3d at 520.   Indeed, a determination that any amendment would be
15   futile requires the trial court to dismiss the complaint with
16   prejudice.   Mirmehdi v. United States, 689 F.3d 975, 985 (9th
17   Cir. 2012) (“However, a party is not entitled to an opportunity
18   to amend his complaint if any potential amendment would be
19   futile. See, e.g., May Dep’t Store v. Graphic Process Co., 637
20 F.2d 1211, 1216 (9th Cir. 1980).”); Sanford v. MemberWorks, Inc.,
21   625 F.3d 550, 557 (9th Cir. 2010) (observing that although leave
22   to amend is to be “freely given when justice so requires,” denial
23   of a motion to amend is proper if it is clear “that the complaint
24   would not be saved by any amendment.”).
25        Here, the bankruptcy court determined that,
26        The Debtor could not properly allege that the duly
          conducted tax sale of the subject properties could be
27        the basis of an action under 11 U.S.C. [§]§ 548 or
28

                                       -19-
 1        549.11
 2   In other words, the bankruptcy court concluded that any attempt
 3   by Debtor to amend the first claim for relief would be futile
 4   because a duly conducted tax sale under California law
 5   presumptively provides for reasonably equivalent value, and thus
 6   the essential condition for avoidance of the sales as fraudulent
 7   transfers, i.e., for less than reasonably equivalent value, could
 8   not be established.   We agree with the bankruptcy court.
 9        An analysis of the relationship of tax foreclosure sales to
10   “reasonably equivalent value” for purposes of § 548(a)(1)(B)
11   should begin with a review of the U.S. Supreme Court’s opinion in
12   BFP v. Resolution Trust Corp., 511 U.S. 531 (1994).     In BFP, the
13   Supreme Court addressed whether a regularly conducted
14   prebankruptcy mortgage foreclosure sale gives rise to a
15   conclusive presumption that the price obtained at that sale was
16   for reasonably equivalent value such that the sale could not
17   later be avoided under § 548(a) as a constructively fraudulent
18   transfer. In that case, BFP held title to a parcel of real
19   property encumbered by a deed of trust.   After BFP defaulted on
20
21
          11
             It was never clear in Debtor’s complaint why it referred
22   to § 549, the Code provision dealing with avoidance of
23   unauthorized postpetition transfers, in the context of the first
     claim for fraudulent transfer, a claim which, by definition,
24   deals solely with prebankruptcy transfers. Perhaps Debtor was
25   conflating the claim for fraudulent transfer with the claim for
     violation of the automatic stay. As to the other claims for
26   injunction, declaratory judgment, and unjust enrichment, Debtor
     has not discussed these claims in its opening brief and we will
27   not address them. Ore. Natural Desert Ass’n v. Locke, 572 F.3d
28   610, 614 n.3 (9th Cir. 2009) (“this court will not address claims
     not argued in the opening brief”).

                                     -20-
 1   the loan payments, the creditor properly noticed a foreclosure
 2   sale in compliance with applicable California law.         At that sale,
 3   the property was purchased by a third party for $433,000.        After
 4   BFP initiated a chapter 11 case, it filed a complaint to avoid
 5   the foreclosure sale and transfer to the third party as a
 6   constructively fraudulent transfer under § 548(a), arguing that,
 7   as compared to the sale price, the property was actually worth
 8   $725,000 at the time of the sale.        The bankruptcy court held that
 9   the foreclosure sale was not collusive or fraudulent because it
10   was conducted in compliance with state law, and so the sale could
11   not be avoided.    This Panel and the Ninth Circuit affirmed.
12   Id.12
13           On appeal, the Supreme Court held that fair market value was
14   not the appropriate measure of “reasonably equivalent value”
15   under § 548(a) because market value, as commonly understood, has
16   no applicability in the forced-sale context; indeed, it is “the
17   very antithesis of forced-sale value.”       Id. at 537.    The Court
18   held that § 548(a) “requires judicial inquiry into whether the
19
             12
20           By its ruling in BFP, the Supreme Court effectively
     endorsed what was known as the “Madrid Rule,” a term attributable
21   to this Panel’s decision in Lawyers Title Insurance Corp. v.
22   Madrid (In re Madrid), 21 B.R. 424 (9th Cir. BAP 1982), aff’d,
     725 F.2d 1197, 1199 (9th Cir. 1982). The Panel reiterated the
23   Madrid Rule in deciding the appeal that eventually led to the
     Supreme Court’s BFP decision. BFP v. Imperial Savings & Loan
24
     Ass’n (In re BFP), 132 B.R. 748, 750 (9th Cir. BAP 1991)(“A
25   non-collusive and regularly conducted nonjudicial foreclosure
     sale prior to the filing of a bankruptcy case cannot be
26   challenged as a fraudulent conveyance because the consideration
27   received in such a sale establishes ‘reasonably equivalent value’
     as a matter of law.”), aff’d, 974 F.2d 1144 (9th Cir. 1992),
28   aff’d sub nom., BFP v. Resolution Trust Corp., 511 U.S. 531
     (1994).

                                       -21-
 1   foreclosed property was sold for a price that approximated its
 2   worth at the time of sale.”     Id. at 538-39.   Recognizing that the
 3   state mortgage foreclosure regulatory scheme is designed to
 4   achieve just such a result, the Court held that “[a]bsent a clear
 5   statutory requirement to the contrary, we must assume the
 6   validity of this state-law regulatory background and take due
 7   account of its effect.”   Id. at 539.
 8        The Supreme Court then reviewed the history of state
 9   foreclosure laws:
10        Foreclosure laws typically require notice to the
          defaulting borrower, a substantial lead time before the
11        commencement of foreclosure proceedings, publication of
          a notice of sale, and strict adherence to prescribed
12        bidding rules and auction procedures. . . . When these
          procedures have been followed, however, it is “black
13        letter” law that mere inadequacy of the foreclosure
          sale price is no basis for setting the sale aside,
14        though it may be set aside (under state foreclosure
          law, rather than fraudulent transfer law) if the price
15        is so low as to “shock the conscience or raise a
          presumption of fraud or unfairness.”
16
17   Id. at 542.   A state’s interest in its real estate laws was at
18   the heart of the BFP Court’s analysis: “a fair and proper price,
19   or a ‘reasonably equivalent value,’ for foreclosed property, is
20   the price in fact received at the foreclosure sale, so long as
21   all the requirements of the State’s foreclosure law have been
22   complied with.”   Id. at 545.
23        Many of the elements of the BFP analysis are also applicable
24   to state tax foreclosure sales.     As noted by the Court, federal
25   courts should pay considerable deference to state law on matters
26   relating to real estate, and where there has been “notice to the
27   defaulting party, a substantial lead time before the commencement
28   of foreclosure proceedings, publication of a notice of sale, and

                                       -22-
 1   strict adherence to prescribed bidding rules and auction
 2   procedures,” a tax sale is likely to yield reasonably equivalent
 3   value for the foreclosed property.     Indeed, numerous other courts
 4   have applied the teachings of the Supreme Court in BFP in
 5   analyzing whether a conclusive presumption arises that reasonably
 6   equivalent value is present as the result of regularly-conducted
 7   state tax-defaulted property sales.
 8         Notably, two circuit courts have extended BFP’s holding to a
 9   non-collusive tax sale of real property conducted in accordance
10   with state law.   In Kajima v. Girandole Intel Ltd. Lab. Co. (In
11   re Grandote Country Club Co., Ltd.), 252 F.3d 1146 (10th Cir.
12   2001), the Tenth Circuit ruled that:
13         [T]he decisive factor in determining whether a transfer
           pursuant to a tax sale constitutes “reasonably
14         equivalent value” is a state’s procedure for tax sales,
           in particular, statutes requiring that tax sales take
15         place publicly under a competitive bidding procedure.
16   Id. at 1152.   The Kajima court compared the requirements set
17   forth in BFP to the Colorado tax sale procedures and found those
18   procedures to be consistent with BFP.     The court therefore held
19   that a Colorado tax sale was for reasonably equivalent value.
20   Id.
21         Earlier, the Fifth Circuit had applied the teachings of BFP
22   to tax-defaulted property sales under Oklahoma law.    The court
23   determined that not only was BFP applicable to determining
24   reasonably equivalent value under § 548(a) regarding a
25   prepetition tax sale, but also to determining present fair
26   equivalent value under § 549 concerning a post-petition tax sale.
27   T.F. Stone Co. v. Harper (In re T.F. Stone Co.), 72 F.3d 466,
28   468-69 (5th Cir. 1995).

                                     -23-
 1        Bankruptcy courts have also applied BFP’s holding in the tax
 2   sale context.    Russell-Polk v. Bradley (In re Russell-Polk), 200
 3 B.R. 218, 220-22 (Bank. E.D. Mo. 1996); Golden v. Mercer County
 4   Tax Claim Bureau (In re Golden), 190 B.R. 52, 58 (Bankr. W.D. Pa.
 5   1995);   Holla v. Myers (In re Holla), 184 B.R. 243, 252 (Bankr.
 6   M.D.N.C. 1995); Lord v. Neumann (In re Lord), 179 B.R. 429,
 7   432-35 (Bankr. E.D. Pa. 1995); McGrath v. Simon (In re McGrath),
 8   170 B.R. 78, 82 (Bankr. D.N.J. 1994).
 9        Informed by this case law, we conclude that the holding in
10   BFP should be applied to regularly conducted sales of tax-
11   defaulted real property in California, where there is a
12   substantial lead time before the commencement of foreclosure
13   proceedings, there is publication of a notice of the sale, and
14   there is strict adherence to prescribed competitive bidding rules
15   and auction procedures as formulated in the state law.    Put
16   another way, based on the procedural requirements of California
17   law, the tax-default sales of the Properties held in this case on
18   October 22, 2012, were for reasonably equivalent value.
19        Cal. Rev. & Tax Code § 3691(a)(1)(A) provides that, after a
20   property has become tax-defaulted, the tax collector shall have
21   the power to sell all or any part of a tax-defaulted property
22   that has not been redeemed.   The sale of a non-residential
23   commercial property may take place three years after the tax
24   default.   Id.   Cal. Rev. & Tax Code § 3691.1, 3691.2 and 3691.4
25   require that when the property becomes available for tax sale,
26   the tax collector must file notice with the county clerk and the
27   notice is recorded.   Cal. Rev. & Tax. Code   § 3699 requires that
28   the county board of supervisors must approve the tax sale.

                                      -24-
 1   Debtor has not argued that any of these provisions were not
 2   satisfied.
 3           Cal. Rev. & Tax Code § 3701 provides that the notice of a
 4   tax sale must be given to interested parties no less than 45
 5   days, nor more than 120 days, before the proposed sale.    The
 6   Notice of Auction concerning these sales was dated August 31,
 7   2012, 53 days before the date set for the auction, October 22,
 8   2012.
 9           Cal. Rev. & Tax Code § 3702 requires that the notice of sale
10   be published in a newspaper of general circulation, once a week
11   for three consecutive weeks.    Cal. Rev. & Tax Code § 3704
12   requires extensive information in the notice of sale: (a) date,
13   time and place of the sale; (b) location of publicly available
14   computer workstations if the sale allows internet bids; (c)
15   description of the property; (d) name of last assignee of the
16   property; (e) minimum bid; (f) statement that right of redemption
17   ceases day before the sale; (g) statement that parties in
18   interest have right to file claims in excess of liens and costs
19   to be recovered; (h) statement that parties will be notified of
20   any excess proceeds; ( I) if property remains unsold after the
21   scheduled sale, date, time, and place of subsequent sale; (j)
22   deposit if required for bidding; (k) if property purchased by
23   credit bid, notice that right of redemption would revive if full
24   payment not made by a date specified [not relevant in this
25   appeal]. In this case, the sale notice was published in the Los
26   Angeles Daily News.     Debtor has not challenged that the notice
27   requirements were not satisfied.
28           Cal. Rev. & Tax Code § 3691(a)(3)(A) and Cal. Civ. Code

                                       -25-
 1   § 2924b(c)(1) require that the notice of the sale be sent by
 2   certified mail to all parties in interest, including the
 3   defaulting parties, within the 45-120 day period.   Debtor has not
 4   argued that this notice was not properly given.
 5        Finally, Debtor does not challenge that the actual sales
 6   were not regularly conducted in compliance with all applicable
 7   statutes, including Cal. Rev. & Tax Code § 3693, which requires
 8   that all tax sales “shall be at public auction to the highest
 9   bidder”; and Cal. Rev. & Tax Code § 3691(a)(1)(A), which provides
10   that “[a]ny person, regardless of any prior or existing lien on,
11   claim to, or interest in the property, may purchase at the sale.”
12        In addition, Cal. Rev. & Tax Code § 3701 provides that the
13   property owner’s right of redemption expires at the close of
14   business of the last business day preceding the sale.   Debtor did
15   not redeem the Properties prior to the sales.   Cal. Rev. & Tax
16   Code § 3708 provides that the tax collector shall execute a deed
17   to the purchaser for the property; the recorded tax deeds are in
18   the excerpts of record submitted in this appeal.    This is
19   significant, because Cal. Rev. & Tax Code § 3711 provides that
20   the deeds issued by the tax collector are “conclusive evidence of
21   the regularity of all proceedings from the assessment of the
22   assessor to the execution of the deed.”
23        Debtor has not argued in the bankruptcy court or this appeal
24   that the tax sales of the Properties did not comply with the
25   applicable state statutes.   To the contrary, as noted above, the
26   record supports that there was an appropriate lead time before
27   the commencement of foreclosure proceedings, notice was properly
28   given to the defaulting parties, there was publication of a

                                     -26-
 1   notice of sale, and there was competitive bidding at a public
 2   auction in strict adherence to prescribed competitive bidding
 3   rules and auction procedures as clearly formulated in the
 4   California statutes.   Under BFP and the cases applying the rule
 5   in that decision to state tax sales, the transfer of the
 6   Properties in this case at the sales on October 22, 2012,
 7   resulted in a conclusive presumption that the sales were for
 8   reasonably equivalent value.   Therefore, the transfers were not
 9   subject to avoidance under § 548(a), and the bankruptcy court did
10   not abuse its discretion in declining to allow Debtor an
11   opportunity to file an amended complaint, since any amendment
12   would have been a futile gesture.
13        In sum, the bankruptcy court did not abuse its discretion
14   when it declined to allow Debtor to file an amended complaint.
15                                  IV.
16          The bankruptcy court did not abuse its discretion
            in denying reconsideration of its Dismissal Order.
17
18        Debtor asked the bankruptcy court to reconsider its
19   Dismissal Order under Civil Rule 60(b)(1), incorporated by Rule
20   9024. That rule provides that, “On motion and just terms, the
21   court may relieve a party or its legal representative from a
22   final judgment, order, or proceeding for the following reasons:
23   (1) mistake, inadvertence, surprise, or excusable neglect[.]”    In
24   the bankruptcy court, Debtor argued it should be granted relief
25   based on excusable neglect.
26        A careful review of the motion for reconsideration, and
27   Debtor’s brief in this appeal, shows that Debtor does not discuss
28   or identify the “neglect” from which it wishes to be excused.

                                     -27-
 1   Debtor’s arguments are solely directed to alleged errors by the
 2   bankruptcy court in dismissing the complaint with prejudice.
 3   Debtor likewise does not address the concerns expressed by the
 4   bankruptcy court for Debtors’ dilatory tactics and failure “at
 5   every stage of the litigation process to provide the grounds of
 6   its entitlement to relief.”
 7        The bankruptcy court’s Memorandum Decision detailed Debtor’s
 8   conduct and, based on those actions, found that the Debtor
 9   intended to delay the proceedings and, in doing so, abused the
10   bankruptcy process.   We therefore find it noteworthy that Debtor
11   began its motion for reconsideration by proclaiming that
12   “[e]xcusable neglect may serve as the basis for relief, provided
13   the moving party has shown diligence in seeking relief, and the
14   opposing party has not suffered prejudice in this interim.”
15   While suggesting that the County would not be prejudiced by
16   reconsideration, Debtor never addressed its repeated failures
17   throughout the proceedings to exercise diligence in seeking
18   relief.
19        When faced with a motion for relief from an order under
20   Civil Rule 60(b)(1), a recent Ninth Circuit opinion notes that
21   “[a trial] court may exercise its discretion to deny relief to a
22   defaulting defendant based solely upon a finding of defendant’s
23   culpability.”   Brandt v. Am. Bankers Ins. Co., 653 F.3d 1108,
24   1112 (9th Cir. 2011).   Here, the bankruptcy court made extensive
25   findings concerning Debtor’s culpability in failing to exercise
26   diligence in seeking to amend its complaint.   The bankruptcy
27   court did not abuse its discretion in denying Debtor’s motion for
28

                                     -28-
 1   reconsideration.13
 2                              CONCLUSION
 3        We conclude that the bankruptcy court did not err in
 4   dismissing Debtor’s complaint under Civil Rule 12(b)(6) and did
 5   not abuse its discretion in denying leave to amend the complaint
 6   and reconsideration of the Dismissal Order.   We therefore AFFIRM
 7   the bankruptcy court’s orders.
 8
 9
10
11
12
13
14
15
16
17
18
19
20
21        13
             With its motion for reconsideration, Debtor submitted a
22   First Amended Complaint and has suggested repeatedly in both the
     bankruptcy court and this appeal that by submitting the amended
23
     complaint it had satisfied the bankruptcy court’s demands that it
24   provide the grounds for its entitlement to relief. However, as
     the bankruptcy court properly noted, submitting the First Amended
25   Complaint at the reconsideration stage was yet another example of
26   the Debtor’s dilatory behavior and was “too little, too late.”
     Memorandum Decision at 2, May 7, 2013. Further, at oral argument
27   before the Panel, counsel for Debtor conceded that, even as
     amended, the First Amended Complaint was still deficient in the
28   necessary facts to support the claims.

                                      -29-