Court Opinion

ID: 4676254
Source: CourtListenerOpinion
Date Created: 2021-04-09 23:00:41.831146+00
Date Added: 2024-06-11T08:03:31.541964
License: Public Domain

FILED
                                                                                   APR 9 2021
                          NOT FOR PUBLICATION                                 SUSAN M. SPRAUL, CLERK
                                                                                 U.S. BKCY. APP. PANEL
                                                                                 OF THE NINTH CIRCUIT

          UNITED STATES BANKRUPTCY APPELLATE PANEL
                    OF THE NINTH CIRCUIT

In re:                                               BAP Nos. CC-20-1172-SGF
NANCY ANN HOWELL,                                             CC-20-1218-SGF
           Debtor.                                       (Consolidated Appeals)

NANCY ANN HOWELL,                                    Bk. No. 6:13-bk-29922-MH
             Appellant,
v.                                                   Adv. No. 6:14-ap-01070-MH
LAW OFFICES OF ANDREW S. BISOM;
EISENBERG LAW FIRM, APC,                             MEMORANDUM∗
             Appellees.

               Appeal from the United States Bankruptcy Court
                    for the Central District of California
                Mark D. Houle, Bankruptcy Judge, Presiding

Before: SPRAKER, GAN, and FARIS, Bankruptcy Judges.

                                 INTRODUCTION

      Chapter 71 debtor Nancy Ann Howell appeals from a judgment

under § 523(a)(2)(A) excepting from discharge a state court judgment debt

      ∗  This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
       1 Unless specified otherwise, all chapter and section references are to the

Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules
of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of
Civil Procedure.
                                            1
entered in favor of her former attorneys (“Counsel”), who represented her

in litigation involving a homeowners’ association and its board members.

The California Court of Appeal affirmed the judgment. The bankruptcy

court granted Counsel summary judgment based on the preclusive effect of

the state court judgment and the jury findings supporting that judgment.

      The state court entered judgment for Counsel on both their fraud and

breach of contract claims. The state court jury found fraud based on

Howell’s intentional concealment. At the time she retained Counsel, she

failed to disclose her prior litigation with the homeowners’ association and

the resulting $240,404.71 judgment against her.

      On appeal, Howell focuses heavily on a single element of fraudulent

concealment. She contends that her duty to disclose the concealed facts was

neither actually litigated nor necessarily decided in the state court action

because the term “duty to disclose” is not used in either the jury

instructions or the jury verdict. Nor was it expressly stated in the state

court’s judgment. But the judgment unequivocally is based on fraudulent

concealment and the California Court of Appeal affirmed the judgment on

that basis. Under binding precedent, we presume that California fraud

judgments necessarily include a factual determination of all elements

required for fraud under California law even if all of those elements were

not specifically mentioned in the judgment.

      Howell alternately argues that her omissions regarding her prior

litigation with the homeowners’ association qualify as a statement

                                       2
respecting her financial condition, so they are excepted from the scope of

§ 523(a)(2)(A) based on the plain language of statute. However, this Panel

has held that fraudulent omissions are not “statements” within the

meaning of the statute. Thus, her argument lacks merit.

      Accordingly, we AFFIRM.

                                  FACTS

A.    Counsel’s representation of Howell and Counsel’s state court
      lawsuit against Howell.

      Howell retained Counsel in 2006 to represent her, on a contingency-

fee basis, in ongoing litigation she commenced against the Oso Valley

Greenbelt Association and others (“HOA Defendants”). In the already-

pending lawsuit, Howell sought damages from the HOA Defendants based

on their alleged conduct leading to her arrest and false imprisonment.

After they commenced providing services, Counsel learned the HOA

already held a $240,404.71 judgment against Howell. They later found out

while they were prosecuting the false imprisonment lawsuit that Howell

had settled the litigation and obtained a release of the prior judgment

without their knowledge or involvement. Howell never paid Counsel for

their services.

      In 2007, Counsel sued Howell to recover their fees in the Orange

County Superior Court. In their complaint, Counsel sought damages for

fraud and breach of contract, among other causes of action. In relevant

part, Counsel alleged that Howell intentionally and deceitfully led them to

                                      3
believe that she desired to prosecute her false imprisonment claim to

judgment, when in reality she only wanted them to prosecute the claim as

leverage to dissuade the HOA from enforcing the $240,404.71 judgment.

More particularly, Counsel alleged that she defrauded them by “knowingly

and purposefully fail[ing] to disclose” the prior HOA litigation and the

resulting judgment.

     In 2008, a jury trial was held in Counsel’s action to recover its fees. At

the conclusion of testimony, the court read its approved set of jury

instructions. This included a jury instruction based on Judicial Council of

California Civil Instruction (“CACI”) 1901, which deals with the elements

for fraudulent concealment. The version of CACI 1901 read to the jury was

modified and approved by the attorneys for both parties. It provided:

     1901 Concealment

     The Law Office of Andrew S. Bisom and Day/Eisenberg claim that
     they were harmed because Nancy Howell concealed certain
     information. To establish this claim, The Law Office of Andrew S.
     Bisom and Day/Eisenberg must prove all of the following:

     1. That Nancy Howell actively concealed an important fact from The
     Law Office of Andrew S. Bisom and Day/Eisenberg or prevented
     them from discovering that fact;

     2. That The Law Office of Andrew S. Bisom and Day/Eisenberg did
     not know of the concealed fact;

     3. That Nancy Howell intended to deceive The Law Office of Andrew
     S. Bisom and Day/Eisenberg by concealing the fact;

                                      4
       4. That The Law Office of Andrew S. Bisom and Day/Eisenberg
       reasonably relied on Nancy Howell's deception;

       5. That The Law Office of Andrew S. Bisom and Day/Eisenberg were
       harmed; and

       6. That Nancy Howell's concealment was a substantial factor in
       causing The Law Office of Andrew S. Bisom and Day/Eisenberg's
       harm.

Attachment 8 to Howell’s Nov. 1, 2019 Request for Judicial Notice in

opposition to Counsel’s summary judgment motion (brackets omitted). 2

       The jury rendered a verdict finding that Howell had breached its

contract with Counsel and had committed fraud. The jury’s special verdict

included the following fraud-related findings: (1) “Howell intentionally

fail[ed] to disclose important fact(s) that plaintiffs . . .did not know and

could not reasonably have discovered,” (2) “Howell intend[ed] to deceive

plaintiffs . . . by concealing the fact(s),” (3) “plaintiffs . . . rel[ied] on . . .

Howell’s deception” and such reliance was reasonable under the

circumstances, (4) Howell’s concealment was a “substantial factor” in

harming Counsel, and (5) Counsel suffered $48,080.94 in damages resulting

from Howell’s fraud.

       2
         Howell’s November 1, 2019 request for judicial notice was not included in the
parties’ excerpts of record. Even so, we exercise our discretion to take judicial notice of
the November 1, 2019 request and all other documents filed in Counsel’s
nondischargeability action and in Howell’s bankruptcy cases. See Atwood v. Chase
Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).
                                             5
     The jury additionally awarded Counsel another $48,080.94 in contract

damages and $144,243.71 in punitive damages, though the state court

ultimately struck the punitive damages award. Furthermore, when it

entered its final judgment, the state court without explanation halved the

amount of Counsel’s compensatory damages award. The court’s final

award granted $24,040.47 to each Counsel, respectively ($24,040.47 to the

Law Offices of Andrew S. Bisom and $24,040.47 to Day|Eisenberg). The

judgment did not specify any apportionment of the damages between the

breach of contract cause of action and the fraud cause of action.

B.   Howell’s first bankruptcy case.

     On October 28, 2008, just before the state court entered its final

judgment in favor of Counsel, Howell commenced her first chapter 7 case.

As a result, the November 3, 2008 judgment (the “2008 Judgment”) was

entered while the automatic stay was in effect. The bankruptcy case was

dismissed in January 2009 based on her failure to attend the § 341(a)

meeting of creditors.

C.   Howell’s second bankruptcy case and Counsel’s
     nondischargeability action.

     1.    First summary judgment motion and the stay annulment
           motion.

     In December 2013, Howell filed her second chapter 7 petition. In

March 2014, Counsel (Law Offices of Andrew S. Bisom and

Day|Eisenberg’s successor) commenced the nondischargeability action.

                                      6
Counsel alleged essentially the same facts they had alleged in their state

court fraud cause of action. They asserted that these same facts supported

entry of a judgment excepting the judgment debt from discharge under

§ 523(a)(2)(A) and (a)(6).

      Counsel filed their first summary judgment motion in October 2014.

They claimed that the preclusive effect of the state court’s judgment

conclusively determined the nondischargeability of the judgment debt

under § 523(a)(2)(A). Howell pointed out that the state court judgment was

void because it was entered in violation of the automatic stay in Howell’s

first bankruptcy case. At the hearing on the first summary judgment

motion, the parties and the court discussed at length: (1) the effect of the

automatic stay on the 2008 Judgment; (2) the ability of Counsel to address

the resulting lack of a final judgment in the state court action; and (3) how

those matters affected prosecution of the nondischargeability action. The

court then denied the first summary judgment motion without prejudice

and set a pretrial conference. 3

      In April 2015, the bankruptcy court in the 2007 bankruptcy case

granted Counsel’s motions to reopen the case and to annul the stay —

      3Howell argues that the court’s comments and thoughts expressed at the
December 10, 2014 hearing evidence bias in favor of Counsel. She claims that the court
improvidently advised Counsel about how they could negate the legal effect arising
from entry of the November 3, 2008 order while the automatic stay was in effect.
Having reviewed the hearing transcript in its entirety, we see nothing of the sort.
Though Howell characterizes some of the court’s comments as legal advice to Counsel,
the comments merely reflect the court’s thought processes in trying to make sense of the
                                           7
thereby retroactively validating the 2008 Judgment. Howell then sought

relief under Civil Rules 59 and 60 from the case reopening and the stay

annulment. After the court orally ruled against her, she twice objected to

the form of Counsel’s proposed order and twice sought and obtained

hearings on her objections. The court entered its order denying her motion

for relief in October 2015.

      2.     Second summary judgment motion and Howell’s appeals
             from the stay annulment order and the 2008 Judgment.

      Within days of entry of the order annulling the stay, Counsel filed

their second summary judgment motion in the nondischargeability

adversary. Meanwhile, Howell filed two separate appeals, one in state

court from the 2008 Judgment and the other in federal court from the

orders reopening the 2007 bankruptcy case, annulling the stay, and

denying her reconsideration motion. These appeals caused the bankruptcy

court to continue the second summary judgment motion multiple times.

The district court affirmed the bankruptcy court’s rulings entered in the

2007 bankruptcy case, and the Ninth Circuit also affirmed. In re Howell,

Case No. SACV15–1883–CAS, 2016 WL 10679428 (C.D. Cal. Dec. 22, 2016),

aff'd, 698 F. App’x 470 (9th Cir. 2017).

      In August 2019, the California Court of Appeal affirmed the 2008

Judgment. The Court of Appeal construed the entire amount of damages as

arising from both Howell’s fraud and breach of contract. It held that there

arguments presented by both sides at the hearing.
                                           8
was sufficient evidence to support the entire amount of damages on both

fraud and breach of contract grounds.

      Howell additionally challenged the fraud ground by arguing that the

jury never found she had a duty to disclose and that there was insufficient

evidence to support any such finding. The Court of Appeal held that she

forfeited the first argument by failing to provide an adequate record on

appeal. As for the sufficiency of the evidence, the court rejected Howell’s

position, holding that there was sufficient evidence in the record to support

a finding of a duty to disclose. Ultimately, the Court of Appeal affirmed the

judgment in its entirety.

      3.    The decision on the second summary judgment motion.

      By November 2019, the bankruptcy court was poised to rule on

Counsel’s second summary judgment motion. Howell filed voluminous

amended opposition papers, in which she made the following arguments:

   • The jury was instructed incorrectly regarding fraudulent concealment

      because there was no specific statement that the jury must find a duty

      to disclose.

   • Counsel failed to specifically plead or prove in the state court that

      Howell had a duty to disclose, and the jury did not specifically find

      that Howell had a duty to disclose.

   • When the trial court, without explanation, halved the compensatory

      damages award from $96,161.88 to $48,080.94, it must have done so

      to attribute damages solely to breach of contract and none to fraud.

                                      9
   • Alternately, the trial court’s reduction of the compensatory damages

      award rendered it impossible to determine what portion of that

      award, if any, was attributable to Howell’s fraud.

   • For issue preclusion purposes, fraudulent concealment was neither

      actually litigated nor necessarily decided in light of the above-

      referenced problems concerning the duty to disclose issue and the

      compensatory damages issue.

   • Section 523(a)(2)(A) does not apply because the statute specifically

      excepts from its coverage “statement[s] respecting the debtor’s . . .

      financial condition.” And her concealment of the adverse $240,404.71

      judgment qualifies as such a statement.

      In a reasoned memorandum decision, the bankruptcy court rejected

all of Howell’s arguments and held that issue preclusion conclusively

established Howell’s judgment debt to Counsel was nondischargeable

under § 523(a)(2)(A). On June 29, 2020, the court entered judgment against

Howell on Counsel’s § 523(a)(2)(A) claim for relief. Howell timely

appealed.4

      4
         On August 17, 2020, the court entered a separate order dismissing Counsel’s
§ 523(a)(6) claim. Howell filed a separate appeal from this order, which has been
consolidated with the appeal from the entry of summary judgment, per order of this
Panel entered September 11, 2020. Nothing in Howell’s appeal brief specifically
addresses the dismissal of the § 523(a)(6) claim. Nor would reversal of that ruling
provide Howell with any meaningful relief. Consequently, we will not further discuss
it. See Christian Legal Soc'y v. Wu, 626 F.3d 483, 487–88 (9th Cir. 2010) (declining to
address matters not specifically and distinctly argued in the appellant’s opening brief).
                                            10
                                JURISDICTION

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

157(b)(2)(I). We have jurisdiction under 28 U.S.C. § 158.

                                      ISSUE

      Did the bankruptcy court err in granting summary judgment on

Counsel’s § 523(a)(2)(A) claim based on issue preclusion?

                          STANDARD OF REVIEW

      We review de novo the bankruptcy court’s grant of summary

judgment. Plyam v. Precision Dev., LLC (In re Plyam), 530 B.R. 456, 461 (9th

Cir. BAP 2015). We also review de novo the bankruptcy court’s

determination that issue preclusion is available. Id.; Honkanen v. Hopper (In

re Honkanen), 446 B.R. 373, 378 (9th Cir. BAP 2011). When we review an

issue under the de novo standard of review, “we consider [the] matter

anew, as if no decision had been rendered previously.” Kashikar v. Turnstile

Cap. Mgmt., LLC (In re Kashikar), 567 B.R. 160, 164 (9th Cir. BAP 2017).

      If we determine that issue preclusion is available, we then review the

bankruptcy court’s decision to apply it for an abuse of discretion. Khaligh v.

Hadaegh (In re Khaligh), 338 B.R. 817, 823 (9th Cir. BAP 2006). A bankruptcy

court abuses its discretion if it applies the wrong legal standard or its

findings of fact are illogical, implausible or without support in the record.

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

                                        11
                                DISCUSSION

A.    Summary judgment and issue preclusion legal standards.

      A bankruptcy court may grant summary judgment when the

pleadings and evidence demonstrate “that there is no genuine issue as to

any material fact and that the moving party is entitled to a judgment as a

matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); In re Plyam,

530 B.R. at 462 (citing Civil Rule 56(a), made applicable in adversary

proceedings by Rule 7056).

      The issue preclusive effect of a prior state court judgment may serve

as the basis for granting summary judgment. See In re Khaligh, 338 B.R. at

832; see also Grogan v. Garner, 498 U.S. 279, 284 (1991) (holding that issue

preclusion applies in nondischargeability actions).

      We apply California issue preclusion law to determine the preclusive

effect of Counsel’s California state court judgment. See Exxon Mobil Corp. v.

Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005) (stating that federal courts

must give full faith and credit to state court judgments and citing 28 U.S.C.

§ 1738). Under California issue preclusion law, the proponent must

establish the following threshold elements:

      (1) the issue sought to be precluded from relitigation is
      identical to that decided in a former proceeding; (2) the issue
      was actually litigated in the former proceeding; (3) the issue
      was necessarily decided in the former proceeding; (4) the
      decision in the former proceeding is final and on the merits;
      and (5) the party against whom preclusion is sought was the
      same as, or in privity with, the party to the former proceeding.

                                       12
In re Plyam, 530 B.R. at 462 (citing Lucido v. Super. Ct., 51 Cal. 3d 335, 341

(1990)).

      Before applying issue preclusion, the bankruptcy court also must

determine “whether imposition of issue preclusion in the particular setting

would be fair and consistent with sound public policy.” In re Khaligh, 338

B.R. at 824-25 (citing Lucido, 51 Cal. 3d at 341-43).

      The party asserting issue preclusion has the burden of proof to

establish each of the above threshold requirements. See Harmon v. Kobrin (In

re Harmon), 250 F.3d 1240, 1245 (9th Cir. 2001). To satisfy this burden, the

moving party “must introduce a record sufficient to reveal the controlling

facts” and must “pinpoint the exact issues litigated in the prior action.”

Kelly v. Okoye (In re Kelly), 182 B.R. 255, 258 (9th Cir. BAP 1995), aff'd, 100

F.3d 110 (9th Cir.1996). Any reasonable doubt regarding what the prior

court decided is resolved against the moving party. Id.

B.    Howell’s arguments on appeal.

      As a threshold matter, we note that there is no dispute in this appeal

that the bankruptcy court articulated and applied the correct legal

standards governing issue preclusion. In addition, Howell has conceded

that all issues other than duty to disclose and damages were fully and

fairly litigated in the state court. She has not advanced any argument —

either in the bankruptcy court or on appeal — why any other issues needed

to be retried in the bankruptcy court. Thus, even if Howell were to wholly

prevail on appeal, the other elements for a cause of action of fraudulent

                                        13
concealment — nondisclosure, intent to deceive, materiality, and reliance

— have been conclusively established for purposes of Counsel’s

nondischargeability action. Compare Boschma v. Home Loan Ctr., Inc., 198

Cal. App. 4th 230, 248 (2011) (stating California fraudulent concealment

elements), with Oregon v. Mcharo (In re Mcharo), 611 B.R. 657, 660-61 (9th

Cir. BAP 2020) (identifying elements for finding nondischargeable

fraudulent omissions).

      1.    Howell’s arguments against the application of issue
            preclusion.

      On appeal, Howell largely asserts the same arguments she made in

the bankruptcy court. Most of these arguments challenge the bankruptcy

court’s application of issue preclusion and hinge on the same two premises:

(1) because the state court jury was not specifically instructed that

fraudulent concealment requires a duty to disclose its fraudulent

concealment findings were fatally flawed; and (2) the judgment for

fraudulent concealment is not entitled to issue preclusive effect because her

duty to disclose and the damages arising from her fraudulent conduct were

neither actually litigated nor necessarily decided. As explained below, both

of these premises are meritless.

            a.    Correctness of fraudulent concealment instruction and
                  findings.

      Concerning the correctness of the fraudulent concealment instruction

and jury findings, the state trial court entered a fraudulent concealment

                                      14
judgment against Howell, and the California Court of Appeal affirmed this

judgment. In the process, the Court of Appeal specifically rejected Howell’s

arguments challenging the fraudulent concealment instruction and

findings. We cannot and will not second-guess the Court of Appeal’s ruling

rejecting her argument that the fraudulent concealment instruction and

findings were improper. See Exxon Mobil Corp., 544 U.S. at 283-84; Lopez v.

Emerg. Serv. Restoration, Inc. (In re Lopez), 367 B.R. 99, 105-06 (9th Cir. BAP

2007).

      Even if we were to inquire into the correctness of the state court’s

concealment jury instruction, we note that both parties jointly sought and

obtained the state trial court’s approval of their modified version of CACI

1901 – the fraudulent concealment jury instruction. Moreover, we perceive

no error in that instruction. There is no dispute here that, under California

law, a duty to disclose could arise from the contractual relationship

between Counsel and Howell provided that any one of the following three

additional circumstances existed:

      (1) the defendant makes representations but does not disclose
      facts which materially qualify the facts disclosed, or which
      render his disclosure likely to mislead; (2) the facts are known
      or accessible only to defendant, and defendant knows they are
      not known to or reasonably discoverable by the plaintiff; [or]
      (3) the defendant actively conceals discovery from the plaintiff.

                                       15
Warner Constr. Corp. v. City of L.A., 2 Cal. 3d 285, 294 (1970) (citations and

footnotes omitted); see also LiMandri v. Judkins, 52 Cal. App. 4th 326, 336

(1997) (same).5

       Here, the parties’ modified CACI 1901 jury instruction — which

Howell included in her summary judgment opposition papers —

specifically referenced “active concealment” — one of the three recognized

circumstances from which a duty to disclose can arise. Howell has not

offered any explanation why instructing the jury to look for active

concealment was not sufficient to address the duty to disclose issue. Nor

are we aware of any such explanation.

              b.     Preclusive effect of fraudulent concealment judgment.

       Howell contends that there are problems with the 2008 Judgment that

prevented the bankruptcy court from giving it any preclusive effect in the

nondischargeability action. Specifically, she reiterates her argument that

her duty to disclose was not litigated. So, she contends, the issue was not

actually litigated or necessarily decided as part of the 2008 Judgment. She

also contends that the state court’s reduction of the damages suggests that

the court awarded no damages to Counsel for fraud. She concludes,

therefore, that the 2008 Judgment cannot have any preclusive effect in

determining the nondischargeability of that debt. Once again, entry of the

2008 Judgment precludes Howell’s arguments.

       California law recognizes a fourth scenario, not applicable to this appeal, from
       5

which a duty to disclose can arise: if the defendant was acting in a fiduciary capacity to
                                            16
       We hold that both the duty to disclose and the damages issues were

actually litigated and necessarily decided when judgment was entered on

Counsel’s fraud claim based on the jury’s special verdict. Issues are

“actually litigated” when they are properly raised by a party’s pleadings,

when they are submitted to the court or jury for determination, and when

the court or jury actually decides them. In re Harmon, 250 F.3d at 1247

(citing People v. Sims, 32 Cal. 3d 468 (1982)). When an element is essential to

entry of judgment, it necessarily follows that if judgment is rendered the

element was actually litigated. See id. at 1248–49 (applying California law).

Issues are “necessarily decided” so long as they are at least somewhat

necessary to the decision. Samara v. Matar, 5 Cal. 5th 322, 327 (2018) (citing

Lucido, 51 Cal. 3d at 342).

       Where, as here, a California court enters a judgment based on fraud

after a jury or bench trial, we generally do not look behind the judgment to

ascertain whether all of the required fraud elements specifically were

found. In other words, we presume that the fraud judgment “necessarily

included a determination of all of the facts required for actual fraud under

California law.” Zuckerman v. Crigler (In re Zuckerman), 613 B.R. 707, 718

(9th Cir. BAP 2020) (quoting Younie v. Gonya (In re Younie), 211 B.R. 367, 374

(9th Cir. BAP 1997)).

       Howell recognizes that a duty to disclose is a fundamental

prerequisite for a fraudulent concealment judgment. See LiMandri, 52 Cal.

the plaintiff at the time of the nondisclosure. See LiMandri, 52 Cal. App. 4th at 336 & n.3.
                                             17
App. 4th at 336-37. The state court entered judgment for Counsel on their

fraud cause of action based on the agreed upon jury instructions and

special verdict for fraudulent concealment. Following Zuckerman and

Younie, the state trial court’s fraud judgment necessarily decided the duty

to disclose and damages issues. Furthermore, following Harmon, because

these issues were essential to the fraudulent concealment judgment, they

also were actually litigated.

      With respect to the jury’s damages finding, and the trial court’s

reduction of the jury’s damages award, Howell argues the trial court’s

reduction of the compensatory damages award makes it impossible to tell

whether any of the award flowed from her fraud. She claims it is just as

likely that the court’s adjustment of the jury’s damages award was meant

to attribute all of the damages to her breach of contract instead of her

fraud. Alternately, she insists that the court must have reduced the award

to remove any fraud damages because of the problems she perceives with

the jury’s fraud findings, as discussed above. Howell reasons that, because

of the uncertainty regarding the damages award, the damages issue was

not necessarily decided for issue preclusion purposes.

      Damages, like the duty to disclose, also is an essential element for an

action based on fraudulent concealment. See Boschma, 198 Cal. App. 4th at

248 (identifying damages as one the elements for fraudulent concealment).

Howell’s damages argument ignores the presumption flowing from the

fraudulent concealment judgment – that the judgment necessarily included

                                      18
a determination of all factual issues required for actual fraud under

California law, including damages. See In re Zuckerman, 613 B.R. at 718; In re

Younie, 211 B.R. at 374.

      Any possible doubt (which we do not have) that the state trial court

entered the $48,080.94 judgment for fraud as well as breach of contract was

resolved by the California Court of Appeal’s decision. Affirming the trial

court’s judgment, the Court of Appeals specifically upheld the judgment

on fraud grounds. In doing so, it rejected all of Howell’s arguments

attacking the merits of the fraud ruling. For issue preclusion purposes, the

Court of Appeal’s affirmance on the ground of fraudulent concealment is

controlling. See, e.g., Delannoy v. Woodlawn Colonial, L.P. (In re Delannoy),

615 B.R. 572, 586–87 (9th Cir. BAP 2020); Newport Beach Country Club, Inc. v.

Founding Members of Newport Beach Country Club, 140 Cal. App. 4th 1120,

1123 (2006).

      Howell counters that, under California law, when an appeal is

pending from an adverse judgment in the first action, the court in the

second action cannot give the judgment on appeal any issue preclusive

effect, because the finality requirement is not satisfied. This is an

unremarkable statement of California law. See Sandoval v. Super. Court, 140

Cal. App. 3d 932, 936–37 (1983). However, Howell attempts to take this

argument too far. She posits that, if an appeal from a state court judgment

is pending at the time of a bankruptcy filing — or later when a subsequent

nondischargeability action is filed — issue preclusion never can be applied

                                       19
in the nondischargeability action, even if the appeal from the state court

judgment is disposed of before the nondischargeability action is concluded.

She cites no authority for this novel proposition of law. Nor are we aware

of any. Indeed, it is contrary to the well-accepted notion that California

judgments become sufficiently final for issue preclusion purposes

whenever (and however) the appeal rights in the first action are disposed

of. See, e.g., In re Delannoy, 615 B.R. at 586–87; Sandoval, 140 Cal. App. 3d at

936–37; see also Exxon Mobil Corp., 544 U.S. at 293 (stating in the context of

parallel, concurrent actions in state and federal court that “Disposition of

the federal action, once the state-court adjudication is complete, would be

governed by preclusion law.”).

      Thus, we reject as meritless all of Howell’s arguments challenging the

preclusive effect of the state court’s fraudulent concealment judgment.

      2.    Treatment of Howell’s omissions as a statement respecting
            the debtor’s financial condition.

      Citing Lamar, Archer & Cofrin, LLP v. Appling, ___ U.S. ___, 138 S. Ct.

1752, 1758, (2018), Howell contends that her omissions regarding her

involvement in prior litigation with the HOA Defendants — and the

judgment they held against her — constituted statements respecting her

financial condition. As Appling observed, statements respecting the

debtor’s financial condition are not actionable under § 523(a)(2)(A). Id. at

1758. Instead, such statements only are actionable under § 523(a)(2)(B) and,

                                       20
hence, must be in writing in order to fall within the stated scope of the

nondischargeability statute. Id. at 1758-59.6

      Appling held that the debtor’s oral misrepresentation regarding the

value of a single asset – his claimed $100,000 expectancy interest in a tax

refund – qualified as a statement respecting his financial condition. Id. at

1757-58. Consequently, Appling concluded that the creditor could not

prevail on its § 523(a)(2)(A) claim because the type of misrepresentation at

issue was specifically excepted from the scope of the statute. Id. at 1764.

      Howell’s reliance on Appling is misplaced. Here, Counsel’s

§ 523(a)(2)(A) claim was not based on an affirmative misstatement of fact,

but rather on a fraudulent omission of fact. This Panel has held that Appling

does not extend to fraudulent omissions. See In re Mcharo, 611 B.R. at 661-

      6
          The relevant part of the nondischargeability statute provides:

      (a) A discharge under . . . this title does not discharge an individual debtor from
      any debt—
      * * *
      (2) for money, property, services, or an extension, renewal, or refinancing of
      credit, to the extent obtained by—
              (A) false pretenses, a false representation, or actual fraud, other than a
              statement respecting the debtor's or an insider's financial condition;
              (B) use of a statement in writing—
                     (i) that is materially false;
                     (ii) respecting the debtor's or an insider's financial condition;
                     (iii) on which the creditor to whom the debtor is liable for such
                     money, property, services, or credit reasonably relied; and
                     (iv) that the debtor caused to be made or published with intent to
                     deceive[]

11 U.S.C. § 523 (emphasis added).
                                             21
62. In Mcharo, we explained that the plain language of the statute refers to

“a statement respecting the debtor’s . . . financial condition” and a

fraudulent omission is not a “statement.” Id. at 662 (emphasis added).

Accordingly, we reject Howell’s argument based on Appling.

      3.    Howell’s other grievances do not justify reversal.

      Howell references numerous procedural decisions the bankruptcy

court made during the course of the nondischargeability action (for

example, the granting of continuances), which she claims were unfair to

her or evidence the court’s bias. But she never specifically and distinctly

argues or explains how these decisions constituted reversible error. Nor is

any reversible error evident to us. Accordingly, we decline to address them

further. See Christian Legal Soc'y, 626 F.3d at 487–88.

      Similarly, Howell states, in passing, that the bankruptcy court erred

by not granting her motion to dismiss Counsel’s nondischargeability

complaint. To support this assertion, she merely states without legal

support that Counsel’s § 523(a)(2)(A) claim for relief failed to specifically

allege that she had a duty to disclose. However, neither Civil Rule 8(a) nor

Civil Rule 9 (made applicable in adversary proceedings by Rules 7008 and

7009) required Counsel to include the specific words “duty to disclose.”

      Civil Rule 8(a) merely requires the complaint’s allegations to include

a short and plain statement of the grounds for relief. This pleading

standard is relatively minimal and is satisfied when the complaint contains

“sufficient allegations to put defendants fairly on notice of the claims

                                       22
against them.” Tevis v. Hoseit (In re Tevis), BAP No. EC–10–1320–JuKiD,

2011 WL 7145712, at *8 (9th Cir. BAP Dec. 9, 2011) (quoting McKeever v.

Block, 932 F.2d 795, 798 (9th Cir. 1991)).

      In turn, Civil Rule 9(b) requires plaintiffs to plead fraud claims for

relief with greater particularity. This requirement has been construed to

mean: “the complaint must (1) specify the averred fraudulent

representations; (2) aver the representations were false when made;

(3) identify the speaker; (4) state when and where the statements were

made; and (5) state the manner in which the representations were false and

misleading.” Id. at *9 (citing Lancaster Cmty. Hosp. v. Antelope Valley Hosp.

Dist., 940 F.2d 397, 405 (9th Cir. 1991)).

      Neither of these standards required the nondischargeability

complaint to specifically use the term “duty to disclose.” More to the point,

the notion that Howell was not sufficiently apprised of the grounds for

Counsel’s nondischargeability complaint is ludicrous. The adversary

complaint referenced Counsel’s state court judgment against Howell and

made clear that Counsel’s exception to discharge claims were premised on

the same transaction and omissions from which the state court judgment

arose. Counsel further alleged that Howell knowingly failed to disclose the

prior judgment and settlement negotiations while reassuring them of her

intent to proceed with the claims against the HOA Defendants. Under

these circumstances, we reject Howell’s argument that Counsel

insufficiently pleaded fraud in their nondischargeability complaint.

                                        23
       Finally, Howell points out that the Eisenberg Law Firm, APC was not

a party to the state court judgment and argues that it lacks standing. But

she has not disputed that the Eisenberg Law Firm received an assignment

of rights under the judgment from Day|Eisenberg, which was a named

party to state court judgment. Instead, Howell argues that the assignment

was invalid.

       Howell believes that Eisenberg Law Firm could not acquire any

rights in the judgment while the judgment was void as in violation of the

automatic stay arising from her 2008 bankruptcy case. But Howell is

mistaken. She ignores the fact that Counsel obtained an annulment of the

stay to retroactively validate the state court judgment. See Fjeldsted v. Lien

(In re Fjeldsted), 293 B.R. 12, 21 (9th Cir. BAP 2003) (stating that court order

annulling stay retroactively validated foreclosure sale that otherwise

would have been void as a stay violation). Because the judgment was

retroactively validated, nothing prevented Day|Eisenberg from assigning

its interest in the state court judgment to the Eisenberg Law Firm. Thus, we

reject Howell’s standing argument.7

       7
         To the extent Howell claims that the assignment is invalid on other grounds,
Howell lacks standing to challenge the validity of an assignment to which she is not a
party. See Yvanova v. New Century Mortg. Corp., 62 Cal. 4th 919, 936 (2016) (“When an
assignment is merely voidable, the power to ratify or avoid the transaction lies solely
with the parties to the assignment; the transaction is not void unless and until one of the
parties takes steps to make it so.”).
                                            24
                           CONCLUSION

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

judgment excepting the judgment debt from discharge under

§ 523(a)(2)(A).

                                  25