Court Opinion

ID: 2757181
Source: CourtListenerOpinion
Date Created: 2014-12-03 19:08:38.856711+00
Date Added: 2024-06-11T11:26:08.042359
License: Public Domain

FILED
                                                            DEC 16 2011
 1                                                      SUSAN M SPRAUL, CLERK
                                                          U.S. BKCY. APP. PANEL
 2                                                        OF THE NINTH CIRCUIT

 3
                    UNITED STATES BANKRUPTCY APPELLATE PANEL
 4
                              OF THE NINTH CIRCUIT
 5
     In re:                        )       BAP No.    CC-11-1323-KiDJu
 6                                 )
     DEAD OAK ESTATES, INC.,       )      Bk. No.     08-28230-MM
 7                                 )
                    Debtor.        )       Adv. No.     09-02730
 8   ______________________________)
                                   )
 9   MICHAEL F. BURKART, Chapter 7 )
     Trustee; SUSAN VINEYARD,      )
10                                 )
                    Appellants,    )
11                                 )
     v.                            )       M E M O R A N D U M1
12                                 )
     ROBERT KUPKA; CYNTHIA KUPKA, )
13                                 )
                    Appellees.     )
14   ______________________________)

15                  Argued and Submitted on November 16, 2011
                            at Sacramento, California
16
                            Filed - December 16, 2011
17
              Appeal from the United States Bankruptcy Court
18                for the Eastern District of California

19        Honorable David E. Russell, Bankruptcy Judge, Presiding
                    _____________________________________
20
     Appearances:     Kristen Ditlevsen, Esq. argued for appellants,
21                    Michael F. Burkart and Susan Vineyard;
                      George C. Hollister, Esq. of the Hollister Law
22                    Corporation argued for appellees, Robert Kupka and
                      Cynthia Kupka.
23                    _____________________________________

24
     Before: KIRSCHER, DUNN, and JURY, Bankruptcy Judges.
25
26
          1
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.
 1        Appellants, chapter 72 trustee Michael F. Burkart
 2   (“Trustee”) and Susan Vineyard (“Vineyard”)(collectively
 3   “Trustee”), appeal a bankruptcy court judgment in favor of
 4   defendants, appellees Robert Kupka (“Robert”) and Cynthia Kupka
 5   (“Cynthia”)(collectively “Defendants”), on Trustee’s action for
 6   declaratory relief regarding debtor’s rights under an option to
 7   purchase real property owned by Defendants.   We AFFIRM.
 8                 I. FACTUAL AND PROCEDURAL BACKGROUND
 9   A.   Prepetition Facts.
10        Debtor, Dead Oak Estates, Inc. (“Dead Oak”), is a Delaware
11   corporation originally incorporated on June 7, 1982.     Dead Oak’s
12   name was changed to Hangtown Leasing Company by amendment filed
13   on July 11, 1986 (“Hangtown”).    Dead Oak’s name was changed back
14   to Dead Oak Estates, Inc. by amendment filed on April 4, 2002.
15        Phil Sheridan (“Sheridan”) owned and operated a small
16   charter airline, Galaxy Airlines (“Galaxy”), located in Fort
17   Lauderdale, Florida.   In January 1985, a Galaxy flight crashed in
18   Reno, Nevada, killing 70 of the 71 persons on board.     Shortly
19   after the crash, the U.S. Department of Transportation (“DOT”)
20   suspended Galaxy’s operational certificate.   Sheridan’s efforts
21   to reinstate the operational certificate were unsuccessful, and
22   he decided to sell Galaxy.
23        In 1987, Sheridan entered into a Stock Purchase Agreement
24
25
          2
            Unless otherwise indicated, all chapter, section and rule
26   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.
27   The Federal Rules of Civil Procedure will be referred to as
     “FRCP.” The Federal Rules of Evidence will be referred to as
28   ?FRE.”
                                      - 2 -
 1   (“Agreement”) transferring his 100% interest in Galaxy to John
 2   Kupka (“John”) and John’s assigns, in exchange for: a promissory
 3   note to Sheridan in the amount of $400,000, an agreement to pay
 4   Sheridan’s debt to Cardinal Corporation in the amount of
 5   $900,000, and payment of Galaxy’s 941 tax obligation to the IRS.
 6   John’s “assigns” were Hangtown n/k/a Dead Oak, one of several
 7   corporations controlled by John through the Kupka Family Trust,
 8   and William and Tammy Tsui (collectively “buyers”).   In October
 9   1987, the buyers attempted to rescind the Agreement for, inter
10   alia, Sheridan’s failure to disclose the correct amount of the
11   IRS’s tax lien, and the buyer’s inability to reinstate the
12   operational certificate with the DOT.3   Sheridan rejected the
13   rescission notice.
14        In 1988, Sheridan sued the buyers in a Florida federal court
15   for specific performance of the Agreement.   While the suit was
16   pending, Sheridan filed for chapter 7 bankruptcy.   In August
17   1993, the Florida court entered a default judgment in favor of
18   Donna Bumgardner, Sheridan’s chapter 7 trustee, and Cardinal
19
          3
20          In January 1988, the DOT issued an Order to Show Cause
     (“OSC”) tentatively revoking Galaxy’s operational certificate for
21   failing to comply with the continuing aviation fitness
     requirements. Prior to the OSC, John had submitted documentation
22   to the DOT in an effort to get Galaxy’s operational certificate
     reinstated, including an Option to Purchase Real Estate, dated
23   November 10, 1986 (the “Option”). Also in the DOT’s file
     submitted by John was a letter dated June 3, 1987, from John to
24   Richard Taylor, attorney for Galaxy on the DOT matter, in which
     John stated that “the family trust has first option on the
25   airport property for $1.8 [million],” and that Lodi Airport was
     worth “roughly $7.5 [million],” with total debt of “less than
26   $1.2 [million].”
          The DOT noted several reasons in the OSC for revoking
27   Galaxy’s operational certificate, including its apparent poor
     financial condition, John’s “overstated” value of Lodi Airport,
28   and John’s prior criminal record for false swearing under oath.
                                   - 3 -
 1   Corporation (the third-party beneficiary to the Agreement) and
 2   against John, Hangtown, and the Tsuis (the “Sheridan Judgment”).
 3   In 1995, Marika Tolz succeeded Donna Bumgardner as trustee for
 4   Sheridan’s estate.      In 1996, the bankruptcy court approved
 5   trustee Tolz’s employment of co-plaintiff Vineyard as collection
 6   agent for the Sheridan Judgment.      In 2000, Vineyard filed a
 7   chapter 7 bankruptcy.      John filed a chapter 7 bankruptcy in 2001.
 8   In 2001, Cardinal Corporation assigned its portion of the default
 9   judgment (about $1.4 million plus interest) to the trustee of
10   Vineyard’s bankruptcy estate.      In 2003, the bankruptcy court
11   entered an order approving the trustee’s abandonment of
12   Vineyard’s estate’s interest in the Sheridan Judgment back to
13   Vineyard.      After years of having no success in collecting on the
14   Sheridan Judgment, in May 2005, trustee Tolz filed a notice of
15   intent to abandon Sheridan’s portion of the Sheridan Judgment
16   (about $600,000 plus interest) back to Sheridan.      In July 2005,
17   Sheridan affirmed and assumed the assignment agreement between
18   trustee Tolz and Vineyard for collection of the Sheridan
19   Judgment.
20   B.      Postpetition Facts.
21           Vineyard filed an involuntary chapter 7 petition against
22   Dead Oak on June 20, 2008.      John is the principal of Dead Oak.4
23   Upon no objection, an order for relief was entered in August
24   2008.       Two proofs of claim were filed in Dead Oak’s case,
25   including a general unsecured claim by Vineyard for $5,955,000
26
27
             4
            John, father to Robert and Cynthia, passed away during
28   this case on October 5, 2010.
                                        - 4 -
 1   based in part on the Sheridan Judgment.   On August 21, 2009, the
 2   bankruptcy court approved a compromise authorizing the joint
 3   prosecution (at Vineyard’s expense) of the estate’s Option to
 4   purchase real property owned by Defendants in Acampo, California,
 5   commonly known as Lodi Airport for $1.8 million, and providing
 6   for a division of any net recovery to Vineyard and the estate’s
 7   other creditors.    In September 2009, pursuant to an order based
 8   on Dead Oak’s failure to file documents, Vineyard filed schedules
 9   and a statement of financial affairs on behalf of Dead Oak.      In
10   those documents, Vineyard identified the Option as property of
11   the estate.
12        On November 11, 2009, Trustee filed a declaratory relief
13   action against Defendants seeking a determination that Dead Oak’s
14   Option was valid.    Attached to the complaint was a copy of the
15   Option, dated November 10, 1986, which stated:
16        The following is an option, with first right of refusal,
          given to Hangtown Leasing Company, a Delaware Corporation
17        to purchase all that real property described in exhibit
          “A” attached, commonly known as Lodi Airport situated in
18        Acampo, California. Option price is One million, eight
          hundred thousand dollars. ($1,800,000.00).
19
20   The Option reflected the signatures of Robert and Cynthia in
21   their individual capacities as co-owners of Lodi Airport.
22   Trustee alleged that Defendants never revoked the Option, and it
23   did not limit Dead Oak’s right to exercise it to any specific
24   time period or describe a particular manner in which it must be
25   exercised.    Defendants disputed the validity of the Option, thus
26   explaining Trustee’s need for declaratory relief.
27        Defendants moved to dismiss Trustee’s complaint on
28   December 15, 2009.   In their motion, Defendants denied knowing

                                     - 5 -
 1   about the unrecorded Option until Vineyard’s counsel brought it
 2   to their attention in February 2008.    Defendants denied ever
 3   agreeing to the Option and asserted that they had never received
 4   any payment with respect to or on account of it.   The motion also
 5   referred to a letter sent by Defendants’s counsel to Trustee on
 6   May 11, 2009.    In the letter, attached to Robert’s Declaration in
 7   support of the motion, counsel asserted that Robert’s and
 8   Cynthia’s signatures on the Option had been forged, and that the
 9   Option was never signed by either of them.   Defendants’s motion
10   was denied on January 20, 2010.   They filed an answer on
11   February 2, 2010.   Defendants subsequently filed two motions for
12   summary judgment, both of which were denied.
13        Two days before trial, Trustee filed his trial brief and a
14   motion in limine to exclude certain evidence of Defendants.      In
15   his brief, Trustee conceded that he was not convinced Cynthia
16   personally signed the Option based on the opinions of the
17   handwriting experts employed by both parties.    However, contended
18   Trustee, their expert’s analysis of Cynthia’s questioned
19   signature was limited due to Defendants’s unwillingness to
20   produce known signature exemplars for her for the period from
21   1985 to 1990.5   As for Robert’s questioned signature, Trustee’s
22   expert concluded that it was probably genuine.   Based on the
23   expert’s findings, Trustee contended that it was more probable
24   than not that Robert signed both his own signature and Cynthia’s
25
26
          5
            The bankruptcy court subsequently found that Cynthia’s
27   questioned signature on the Option was not genuine. Appellants
     do not appeal that finding. We discuss Cynthia’s testimony as it
28   relates to the conduct of John and Robert.
                                     - 6 -
 1   signature, either mechanically or at her direction, or in his
 2   capacity as her authorized agent.    Cynthia had admitted at
 3   deposition that Robert handled the day-to-day operations of Lodi
 4   Airport, that she had little involvement with it, and that she
 5   deferred to Robert’s judgment on documents to be executed on
 6   their behalf.
 7        In his motion in limine, Trustee disputed the admission of a
 8   statement by Robert in his Alternate Direct Testimony (“ADT”).
 9   In the ADT, Robert asserted that upon showing John a copy of the
10   Option in February 2008, John told Robert that he recognized the
11   document and stated that he had forged the signatures so the
12   Option would appear to be an asset for purposes of his
13   application to acquire Galaxy and DOT approval.   Trustee
14   contended Robert’s statement was inadmissable hearsay being
15   offered for the first time on the eve of trial to exculpate
16   Defendants.   Moreover, John had since passed away so Trustee was
17   unable to question him about it.    Alternatively, Trustee
18   contended that John’s “forgery” statement to Robert should be
19   excluded under FRCP 37 for failing to disclose it in
20   interrogatories.
21   C.   The Trial.
22        The two-day trial commenced on May 11, 2011.    As a
23   preliminary matter, the parties agreed to address the basis of
24   Trustee’s motion in limine when Robert testified.
25        Cynthia testified that she had never authorized John to sign
26   any documents on her behalf, but that John had done so without
27   her authorization in the past.    Specifically, when she was away
28   at college, John had signed three credit card applications in

                                      - 7 -
 1   Cynthia’s name without her knowledge.   John subsequently failed
 2   to pay the credit card debts and served time in jail as a result.
 3   Cynthia also testified that she had never authorized Robert to
 4   sign any document on her behalf, nor did she know of any
 5   circumstance in which he had signed something on her behalf
 6   without her knowledge.
 7        Robert testified that even though he knew John had purchased
 8   Galaxy in 1987, which in Robert’s opinion was a “crazy” idea,
 9   Robert had no involvement with John’s efforts to reinstate
10   Galaxy’s operational certificate with the DOT.   As for the
11   Option, Robert testified that although the questioned signature
12   looked like his, he did not sign it.    Robert again confirmed that
13   once he showed the Option to John in 2008, John admitted faking
14   the document and forging the signatures as a means to acquire
15   Galaxy.   Robert testified that he had never seen the Option
16   before February 2008.    Robert admitted that he did not disclose
17   John’s “forgery” story in the interrogatories because he did not
18   remember it at the time, and he assumed his denial of signing it
19   was sufficient.
20        On cross-examination, Robert testified that he would never
21   have signed the Option.   Robert further testified that Cynthia
22   never authorized him to sign her name on any documents, and he
23   never did so.   Finally, Robert testified that John had also
24   obtained credit cards in Robert’s name without his knowledge.
25        Both expert witnesses testified on day two of the trial.
26   Trustee’s expert, David Moore (“Moore”), testified that even
27   though the Option was a copy, he found nothing in either
28   signature to suggest they were not naturally written.   In other

                                     - 8 -
 1   words, the signatures were not traced.    Moore further testified
 2   that he had a sufficient amount of known signature exemplars from
 3   Robert and concluded that Robert’s questioned signature was
 4   “probably” genuine.    Moore explained that on the scale used by
 5   forensic document examiners, with the finding of “did sign it” at
 6   the far right end and the finding of “did not sign it” at the far
 7   left end, a conclusion of “probably” was just below the finding
 8   of “very probably,” which was just below “did sign it.”    Moore
 9   further explained that in the middle of the scale is the finding
10   of “no conclusion,” which means the evidence is evenly split or
11   insufficient information exists to lean one way or the other.      In
12   this case, explained Moore, his finding of “probably” with
13   respect to Robert’s signature meant the evidence was strong but
14   some limiting factors existed - i.e., the absence of an original.
15   Because the Option was only a copy, Moore could not exclude the
16   possibility that Robert’s signature was a “cut-and-paste.”    Moore
17   could also not recall an instance where a document contained both
18   a forged signature and a cut-and-paste signature of another.
19           On cross-examination, Moore testified that he was not asked
20   to determine whether Cynthia’s questioned signature was written
21   by Robert.    He did opine, however, that since their signatures
22   were so sufficiently dissimilar it would be like comparing apples
23   and oranges, and he would be unable to determine whether or not
24   Robert wrote Cynthia’s signature.
25           Defendants’s expert, James Blanco (“Blanco”), testified
26   next.    When asked whether it was “probable” that Robert, assuming
27   his signature on the Option was genuine, wrote the questioned
28   “Cynthia Kupka” signature, Blanco replied: “I would say it would

                                      - 9 -
 1   not be probable.”   Trial Tr. (May 12, 2011) 77:6.   On cross-
 2   examination, Blanco testified that he saw no evidence of cut-and-
 3   paste, but admitted that he was retained only to opine on
 4   Cynthia’s signature, not Robert’s, because Robert had admitted
 5   that the questioned signature looked like his.   Blanco further
 6   testified that he saw no traces of Robert’s signature
 7   characteristics in Cynthia’s signature that indicated Robert
 8   signed for her.
 9        After Blanco’s testimony, Trustee’s counsel asserted that
10   any pending evidentiary objections, particularly all hearsay
11   objections with respect to submitted documents, needed to be
12   resolved before he could present closing argument.    The
13   bankruptcy court responded that all exhibits had been admitted as
14   far as it was concerned.   During further colloquy on this issue,
15   the court stated that any documents containing hearsay statements
16   of John would be disregarded, to which Trustee’s counsel
17   responded:
18        Well, your Honor, before you come to that conclusion,
          there may be some things in there you may regard. You
19        may accept them. You’re perfectly capable of weighing
          the evidence.
20
21   Trial Tr. (May 12, 2011) 100:5-8.   The court then noted that the
22   primary issue in the case was whether Robert forged Cynthia’s
23   signature on the Option.   However, it believed Blanco had ruled
24   out that possibility.   Furthermore, Robert had testified he had
25   never signed Cynthia’s name, and Cynthia had testified she never
26   authorized anyone to sign her name on any document.
27        Trustee’s counsel then stated he had one more witness to
28   call before closing his case in chief.   The court asked counsel

                                   - 10 -
 1   for an offer of proof regarding this witness “because at this
 2   stage in the game, [Trustee] d[id]n’t have a case.”    Id. at
 3   104:1-2.   Counsel offered that this witness would impeach
 4   Robert’s testimony, to which the court responded: “You have an
 5   unfortunate problem there because I happen to believe that
 6   [Robert] was a very reliable witness.”    Id. at 104:13-15.      The
 7   court then asked counsel whether the witness would impeach
 8   Robert’s testimony about not signing the Option.    Counsel
 9   responded that the witness would impeach Robert’s testimony about
10   having no involvement in the DOT proceedings.    In response, the
11   court stated:
12        I don’t care about that. I really don’t care about that.
          That’s got nothing to do with this case as I see it. And
13        I believe Mr. Kupka’s testimony.
14        . . . .
15        . . . [A]nd I also believe [Robert’s] testimony that all
          of this has to do with John . . . trying to get some
16        evidence in, trying to get something together to show
          that he had assets.
17
          . . . .
18
          So how does that ever get you to the point where this
19        option, 30-year-old option, whatever it is, that is not
          signed by either Mr. Kupka or his sister, how can that
20        possibly result in something that you can enforce?
21   Id. at 105::21-23; 106:6-15.   In the court’s opinion, even if
22   Trustee’s witness testified that Robert was involved with the DOT
23   proceedings, it would not rehabilitate the Option, which was a
24   “complete nothing.”   Id. at 108:21.    Even if Robert was not
25   telling the truth, opined the court, the outcome remained
26   unchanged because both signatures had to be genuine for a valid
27   Option, and the evidence showed that Cynthia never signed it and
28   never authorized Robert to sign it (or anything else) on her

                                    - 11 -
 1   behalf.
 2        Despite the court’s position, Trustee’s counsel stated that
 3   he still wanted to put on his last witness the following day, to
 4   which the court responded: “You may do so.”   Id. at 110:17.
 5   Counsel explained that the witness was the county planner from
 6   1987 who spoke with Robert about moving Galaxy from Florida to
 7   Lodi Airport.   The court responded that regardless of what the
 8   planner had to say, it would not render the Option valid.
 9   Furthermore, the evidence showed that John had previously forged
10   Cynthia’s name on various documents, and even if Robert had at
11   one time expressed to the county planner an interest in moving
12   Galaxy to Lodi Airport, Robert had testified that he determined
13   the prospect was useless considering Galaxy’s debt load.
14   Finally, the court noted that even Trustee’s expert could not
15   rule out the possibility that Robert’s signature on the Option
16   was a cut-and-paste job.
17        Upon counsel’s further offer of proof about the planner’s
18   testimony, the court stated:
19        Don’t buy it. I have no reason to. As I said, I think
          Robert Kupka is a reliable witness. I heard him testify.
20        I have no reason to doubt his testimony. I believe him.
          I believe his sister. And they’re both saying, “Hey, we
21        didn’t have anything to do with this stupid document.”
          There you are.
22
23   Id. at 118:8-14.   The court reiterated that Trustee’s counsel
24   could call the planner to testify, but that it would not be
25   persuaded:
26        You’ve made your offer of proof, which I think is
          adequate, I mean, sufficient to at least bring to the
27        attention of any appellate court as to what kind of
          evidence you were going to bring on, namely, that there
28        was a conversation between [Robert] and the planner that

                                    - 12 -
 1        was in charge, I guess, of Lodi Airport improvements --
          that they were talking about bringing [Galaxy] to the
 2        Lodi Airport. But, as I said before . . . it doesn’t do
          anything for this bogus document. That document, that
 3        option agreement is bogus.
 4   Id. at 121:17-122:3.     Counsel then explained that the planner’s
 5   testimony was not based just on his memory of conversations with
 6   Robert, but it was also based on a report that is part of the
 7   public record.    The court paused momentarily, but ultimately
 8   determined the planner’s testimony was not going to change the
 9   court’s mind.    As a result, it dismissed Trustee’s complaint with
10   prejudice.6    The court further denied Trustee’s motion in limine
11   to exclude John’s “forgery” hearsay statement to Robert.
12        An order denying Trustee’s motion in limine was entered on
13   May 17, 2011.    A judgment in favor of Defendants was entered on
14   June 8, 2011.    This timely appeal followed.
15                              II. JURISDICTION
16        The bankruptcy court had jurisdiction under 28 U.S.C.
17   §§ 157(b)(2)(A) and 1334.    The order denying Trustee’s motion in
18   limine was an interlocutory order that merged into the final
19   judgment.     United States v. Real Prop. Located at 475 Martin
20   Lane, Beverly Hills, Cal., 545 F.3d 1134, 1141 (9th Cir. 2008)
21   (under the merger rule interlocutory orders entered prior to the
22   judgment merge into the judgment and may be challenged on
23   appeal).    Therefore, we have jurisdiction over both the order
24   denying the motion in limine and the judgment under 28 U.S.C.
25
26
          6
            Since the dismissal occurred at the close of the evidence
27   presented on Trustee’s case in chief, including his offer of
     proof, it appears to have been a Judgment on Partial Findings as
28   allowed by FRCP 52(c), as incorporated by Rule 7052.
                                     - 13 -
 1   § 158.
 2                               III. ISSUES
 3   1.   Did the bankruptcy court clearly err in finding that the
 4   Option was invalid?
 5   2.   Did the bankruptcy court abuse its discretion by not having
 6   the county planner testify and by admitting the hearsay
 7   testimony?
 8   3.   Did the bankruptcy court apply the proper burden of proof?
 9                         IV. STANDARDS OF REVIEW
10        We review the bankruptcy court’s findings with respect to
11   the validity of the Option for clear error.     A finding is clearly
12   erroneous when it is illogical, implausible or “without support
13   in inferences that may be drawn from the facts in the record.”
14   United States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009)
15   (en banc).   If the trial court’s account of the evidence is
16   plausible in light of the record viewed in its entirety, the
17   court of appeals may not reverse it even though convinced that
18   had it been sitting as the trier of fact, it would have weighed
19   the evidence differently.   S.E.C. v. Rubera, 350 F.3d 1084, 1094
20   (9th Cir. 2003)(citing Anderson v. City of Bessemer City, N.C.,
21   470 U.S. 564, 573-74 (1985)).    Great deference is to be given to
22   the bankruptcy court’s determinations on witness credibility due
23   to its opportunity to observe the witness.    Retz v. Samson
24   (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010)(citing
25   Anderson, 470 U.S. at 575 (1985)).
26        To reverse an evidentiary ruling, we must conclude that the
27   bankruptcy court both abused its discretion and that the error
28   was prejudicial.   Latman v. Burdette, 366 F.3d 774, 786 (9th Cir.

                                     - 14 -
 1   2004).   We review the bankruptcy court’s ruling on a motion in
 2   limine for an abuse of discretion.     United States v. Rude,
 3   88 F.3d 1538, 1549 (9th Cir. 1996).    To determine whether the
 4   bankruptcy court abused its discretion, we conduct a two-step
 5   inquiry: (1) we review de novo whether the bankruptcy court
 6   “identified the correct legal rule to apply to the relief
 7   requested” and (2) if it did, whether the bankruptcy court's
 8   application of the legal standard was illogical, implausible or
 9   “without support in inferences that may be drawn from the facts
10   in the record.”   Hinkson, 585 F.3d at 1261-62.
11        Whether the bankruptcy court properly applied the correct
12   burden of proof is a question of law reviewed de novo.    United
13   States v. Banuelos, 322 F.3d 700, 704 (9th Cir. 2003).
14                              V. DISCUSSION
15        We begin by noting that our review of this appeal is
16   hindered due to Trustee’s failure to include in his excerpts of
17   record: the complaint, answer, all pretrial motions including the
18   subject motion in limine and related order, the pretrial order,
19   any pretrial statements, Trustee’s trial brief, the Alternate
20   Direct Testimony of Robert and Blanco, Blanco’s report, the
21   notice of appeal, and the judgment.    This is a severe violation
22   of Rule 8009(b) subjecting Trustee’s appeal to dismissal.       Kyle
23   v. Dye (In re Kyle), 317 B.R. 390, 393 (9th Cir. BAP 2004).
24   Nonetheless, we exercised our discretion to retrieve many of
25   these items from the bankruptcy court’s electronic docket, of
26   which we take judicial notice.   See Atwood v. Chase Manhattan
27   Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP
28   2003)(we are free to take judicial notice of relevant documents

                                   - 15 -
 1   on the bankruptcy court’s docket).       However, the Alternate Direct
 2   Testimony of Robert and expert witness Blanco, as well as
 3   Blanco’s report, were not available.
 4   A.   The bankruptcy court did not clearly err in finding that the
          Option was invalid.7
 5
          Trustee disputes the bankruptcy court’s finding that the
 6
     Option was not valid based on what he believes was compelling
 7
     evidence to the contrary.   In order to reverse the bankruptcy
 8
     court on this basis, we must conclude that its findings of fact
 9
     are illogical, implausible, or not supported by the record.
10
     Hinkson, 585 F.3d at 1261-62.
11
          Trustee contends he established the Option’s validity by the
12
     following.   The copy of the Option and John’s 1987 letter
13
     referencing the Option demonstrated its existence.      Robert and
14
     Cynthia’s names appear on the Option, signed by someone.      Both
15
     experts opined that Robert’s signature was probably written by
16
     him, and Robert admitted that it looked like his signature.
17
     Cynthia admitted that she was unfamiliar with the business
18
     dealings of Lodi Airport, and that she would sign documents when
19
     Robert advised her to do so.    Cynthia also admitted she had
20
     little memory of the time period when the Option was executed,
21
22
          7
            Trustee contends the bankruptcy court did not appear to be
23   fully familiar with the written materials submitted by the
     parties prior to trial and did not have a complete grasp on
24   Trustee’s arguments. Trustee further contends the court let
     Defendants’s counsel argue extensively in his opening statement,
25   which likely influenced the court’s evaluation of the evidence
     presented.
26        First, we see no objections by Trustee’s counsel to any of
     Defendants’s opening statement in the transcript. Further, the
27   transcript reflects that the bankruptcy court was familiar with
     Trustee’s legal arguments, but it chose to reject them based on
28   the evidence.
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 1   and that she could not remember signing several airport-related
 2   documents at the time she signed them.   Trustee asserts that even
 3   if Cynthia did not sign the Option, the evidence suggests she may
 4   have authorized Robert to sign it on her behalf.   Thus, contends
 5   Trustee, even assuming Cynthia’s signature is not genuine,
 6   Robert’s signing of both their signatures is sufficient to
 7   establish their intent to be bound by the Option’s terms.    In
 8   short, Trustee asserts that based on the evidence one of the
 9   following must have occurred: either John forged the Option, or
10   Robert signed it and forged Cynthia’s signature, either with her
11   authorization or without it.
12        Although Trustee’s scenario of Robert forging Cynthia’s
13   signature on the Option is plausible, we also have to consider
14   all of the evidence and testimony offered in this case.   In
15   addition to Cynthia’s testimony that she would sign documents
16   when Robert advised her to do so, and that she could not remember
17   signing various airport-related documents at the time she signed
18   them, Cynthia also testified that she did not sign the Option.
19   Both experts agreed that Cynthia’s signature on the Option was
20   not genuine.   Cynthia also testified that she never authorized
21   Robert to sign any document on her behalf, including the Option.
22   As for whether Robert forged Cynthia’s signature on the Option,
23   Blanco determined that Robert probably did not, and Moore could
24   not determine that Robert did.   Robert testified that he did not
25   forge Cynthia’s signature.   Robert testified that he did not sign
26   the Option, and both experts could not conclusively rule out the
27   possibility that his signature was a cut-and-paste job.   Cynthia
28   and Robert also testified as to John’s history of forging his

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 1   children’s signatures on documents.     Furthermore, according to
 2   the DOT’s OSC, one of the reasons it refused to reinstate
 3   Galaxy’s operational certificate was John’s prior criminal record
 4   of lying under oath.   The bankruptcy court made explicit findings
 5   that Robert and Cynthia were credible witnesses.    It also found
 6   expert Blanco’s testimony more persuasive than expert Moore’s.
 7        Even if we as the fact-finder would have weighed the
 8   evidence differently, “when there are two permissible views of
 9   the evidence, the trial judge’s choice between them cannot be
10   clearly erroneous.”    Village Nurseries v. Gould (In re Baldwin
11   Builders), 232 B.R. 406, 410 (9th Cir. BAP 1999).     We cannot
12   conclude on this record that the bankruptcy court clearly erred
13   in finding the Option was bogus.   This finding is not illogical,
14   implausible, or without any support in the record viewed in its
15   entirety.   Hinkson, 585 F.3d at 1261-62.
16   B.   The bankruptcy court did not abuse its discretion by not
          having the county planner testify or by admitting the
17        “forgery” hearsay testimony.
18        Trustee contends the bankruptcy court abused its discretion
19   when it “refused” to allow him the opportunity to call the county
20   planner, whose testimony would have impeached Robert’s testimony
21   on the key issue of his involvement with John’s efforts with the
22   DOT and to bring Galaxy to Lodi Airport.    Despite Trustee’s
23   failure to disclose the county planner as a witness in the
24   pretrial order, the record clearly shows that the bankruptcy
25   court did not deny Trustee the opportunity to call him.    The
26   court considered Trustee’s offer of proof regarding the planner’s
27   testimony and ultimately concluded that regardless of what he had
28   to say about Robert’s involvement with relocating Galaxy to Lodi

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 1   Airport, it would not rehabilitate what the court determined was
 2   a bogus document.    The court went further to say that even if
 3   Robert was not being truthful about his involvement with the DOT
 4   proceedings, the Option was still invalid because Cynthia never
 5   signed it and never authorized anyone else to sign it on her
 6   behalf, and to be a valid contract both signatures had to be
 7   genuine.    We see no abuse of discretion here.
 8           Trustee also contends the bankruptcy court abused its
 9   discretion by precluding the admission of relevant documentary
10   evidence demonstrating Robert’s involvement in John’s affairs
11   that would have discredited Robert and diminished the weight the
12   court could reasonably have placed on his testimony.    Trustee
13   fails to state what “documentary evidence” the court failed to
14   admit, but we assume he is referring to the planner’s report from
15   1987.    As the bankruptcy court noted, even if Robert was not
16   being truthful about his involvement with relocating Galaxy to
17   Lodi Airport or the DOT proceedings, the planner’s documentary
18   evidence could not render the Option valid.
19           Finally, Trustee contends that the bankruptcy court abused
20   its discretion by admitting the hearsay testimony that John told
21   Robert he forged the signatures on the Option because its
22   admission must have tainted the outcome of his case.    “Hearsay”
23   is a statement, other than one made by the declarant while
24   testifying at the trial or hearing, offered in evidence to prove
25   the truth of the matter asserted.    FRE 801(c).   Unless falling
26   under an exception in FRE 803 and 804, hearsay statements are
27   inadmissible under FRE 802.    The “forgery” hearsay testimony was
28   subject to the motion in limine, which the bankruptcy court

                                     - 19 -
 1   denied.   A motion in limine is “any motion whether made before or
 2   during trial to exclude anticipated prejudicial evidence before
 3   the evidence is actually offered.”      Luce v. United States,
 4   469 U.S. 38, 40 (1984).
 5        We agree with Trustee that the bankruptcy court erred by
 6   allowing in the “forgery” hearsay testimony.     However, on this
 7   record, such error was harmless because it was not the only
 8   evidence before the court on the genuineness of the signatures.
 9   Early in the litigation, counsel for Defendants informed Trustee
10   by letter that the signatures on the Option were forgeries.
11   Admittedly, Defendants did not provide the basis for their
12   position.    Nonetheless, both experts concluded that Cynthia’s
13   signature was not genuine.    Moore could not conclusively
14   determine that Robert forged Cynthia’s signature, and Blanco
15   determined that Robert had not forged it.     Cynthia testified that
16   she did not sign the Option and did not authorize or tell Robert
17   to sign it on her behalf.    Robert testified that he did not sign
18   Cynthia’s name or his name.   Finally, neither expert could rule
19   out the possibility that Robert’s signature was not the product
20   of cut-and-paste.   On this record, the bankruptcy court could
21   plausibly have found the Option was invalid without the hearsay
22   testimony.
23        Accordingly, we cannot conclude the court abused its
24   discretion or that Trustee was unfairly prejudiced by allowing in
25   the “forgery” hearsay testimony.
26   C.   The bankruptcy court applied the correct burden of proof.
27        Trustee contends the bankruptcy court erred by applying a
28   clear and convincing standard of proof to his declaratory relief

                                    - 20 -
 1   action, rather than the required standard of preponderance of the
 2   evidence.   Under a preponderance of the evidence standard, the
 3   trier of fact is simply required to believe that the existence of
 4   a fact is more probable than its non-existence.    Concrete Pipe
 5   and Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for
 6   S. Cal., 508 U.S. 602, 622 (1993).
 7        Trustee’s contention is purely conjecture.     He points to
 8   nothing specific in the record to support his assertion that the
 9   bankruptcy court applied an improper burden of proof.    We note
10   that during the trial, Trustee’s counsel stated that the burden
11   of proof in this case was preponderance of the evidence.    The
12   bankruptcy court expressly agreed.     Trial Tr. (May 12, 2011)
13   116:9-13.
14        We see nothing in the record to conclude that anything other
15   than a preponderance of the evidence standard was applied.
16   Because we conclude the bankruptcy court applied the proper
17   burden of proof, we need not address Trustee’s argument about
18   what the court might have determined with respect to the Option
19   if it had applied a preponderance standard.
20                             VI. CONCLUSION
21        Based on the foregoing reasons, we AFFIRM.
22
23
24
25
26
27
28

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