Court Opinion

ID: 2757185
Source: CourtListenerOpinion
Date Created: 2014-12-03 19:08:39.351422+00
Date Added: 2024-06-11T11:26:54.008594
License: Public Domain

FILED
                                                           DEC 09 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.    EC-10-1318-JuKiD
                                   )      BAP No.    EC-10-1319-JuKiD
 6   LARRY TEVIS and NANCY TEVIS, )       BAP No.    EC-10-1320-JuKiD
                                   )      BAP No.    EC-10-1321-JuKiD*
 7                  Debtors.       )      (related   appeals)
     ______________________________)
 8   LARRY TEVIS; NANCY TEVIS,     )      Bk. No. 04-26357
                                   )      Adv. No. 08-2004
 9                  Appellants,    )
                                   )      M E M O R A N D U M**
10   v.                            )
                                   )
11   MAX HOSEIT; HERMAN L.         )
     KOELEWYN; HOSEIT & KOELEWYN; )
12   DANIEL L. EGAN; MICHAEL F.    )
     BURKART, Trustee; FIRST       )
13   AMERICAN TITLE COMPANY,       )
                                   )
14                  Appellees.     )
     ______________________________)
15
                 Argued and Submitted on November 16, 2011
16                       at Sacramento, California
17                        Filed - December 9, 2011
18             Appeal from the United States Bankruptcy Court
                   for the Eastern District of California
19
          Honorable Thomas C. Holman, Bankruptcy Judge, Presiding
20                         ______________________
21
22
          *
23          While not formally consolidated, these four related
     appeals were heard at the same time and were considered together.
24   This single disposition applies to the four appeals, and the
     clerk is directed to file a copy of this disposition in each
25   appeal.
26        **
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.

                                    -1-
 1   Appearances:      Appellant Larry Tevis argued for Appellant Nancy
                       Tevis and himself pro se; Andrew Edward
 2                     Benzinger, Esq. of Lewis, Brisbois, Bisgaard &
                       Smith LLP, argued for Appellees Max Hoseit,
 3                     Herman L. Koelewyn and Hoseit & Koelewyn; Mark
                       Adelos Gorton, Esq. of Boutin Jones Inc., argued
 4                     for Appellee First American Title Company; Daniel
                       L. Egan, Esq. of Wilke, Fleury, Hoffelt, Gould &
 5                     Birney, LLP argued pro se; Michael F.
                       Burkart, Trustee argued pro se.
 6                          _________________________
 7   Before:     JURY, KIRSCHER, and DUNN, Bankruptcy Judges.
 8
 9            In this appeal we review four orders entered by the
10   bankruptcy court dismissing appellants’ third amended complaint
11   (“TAC”) as to appellees, (1) Max Hoseit and Herman Koelewyn,
12   principals of the law firm of Hoseit & Koelewyn (collectively,
13   “H&K”); (2) Daniel L. Egan (“Egan”), an attorney with Wilke,
14   Fleury, Hoffelt, Gould, & Birney, LLP; (3) Michael F. Burkart
15   (the “Trustee”); and (4) First American Title Company (“FATCO”)
16   (collectively, “Appellees”), without leave to amend.
17            For the reasons stated, we AFFIRM.
18                                  I.   FACTS
19            We set forth the following facts, culled from the excerpts
20   of record provided by Appellees and the underlying bankruptcy
21   case and adversary proceeding dockets,1 to provide context for
22
23        1
            The Panel excused debtors from filing excerpts of record
     in these appeals by order entered on May 6, 2011, due to their
24   financial hardship and representation that all the relevant
25   documents were contained on the court’s docket. Therefore, to
     the extent needed, we take judicial notice of the relevant
26   pleadings docketed and imaged in debtors’ underlying bankruptcy
     case and adversary proceeding which were not included in the
27   record by Appellees. Atwood v. Chase Manhattan Mortg. Co.
     (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).
28
                                                        (continued...)

                                         -2-
 1   the allegations in debtors’ TAC.
 2                           Prepetition Events
 3        Debtors purchased unimproved property in Recuse, California
 4   in March 1989.   After making improvements, they placed a
 5   manufactured house on the property which was later destroyed by
 6   wind and rain.   In 1998, they signed a contract to purchase a
 7   new manufactured house with Taylor’s Capitol Mobile Home Sales
 8   (“TCMHS”).   To purchase the house and make the necessary
 9   improvements, they also applied for a State of California,
10   Department of Veterans Affairs (“Cal Vet”) mortgage loan which
11   was eventually consummated and funded.   FATCO recorded the grant
12   deed in favor of Cal Vet on their property.
13        Debtors took steps to place the new house on their
14   property, which included, among other things, a new foundation.
15   The foundation was completed and the house delivered, but
16   debtors were not happy for a variety of reasons.   As a result,
17   they commenced litigation against Fleetwood Homes of California,
18   dba Fleetwood, TCMHS, Affordable Awnings, and Lee Williams dba
19   Gold Key Mobile Home Contractors (the “Modular Home
20   Litigation”).    Debtors also commenced a separate lawsuit against
21   their escrow company, Spring Mountain Escrow, dba Heritage
22   Escrow (“Heritage”).
23        Debtors retained H&K to represent them in the litigation
24   after their initial attorney withdrew due to retirement.    Later,
25
26        1
           (...continued)
27   Although we excused debtors from filing excerpts of record, we
     did not excuse them from providing us with adequate citations to
28   the record, which they did not do. See Rule 8010(a)(1)(D).

                                     -3-
 1   H&K withdrew for reasons not apparent from the record.
 2   Debtors then retained attorney Paul L. Cass (“Cass”), who is not
 3   part of this appeal.
 4            In July 2002, on the morning of the trial, Cass
 5   successfully negotiated a settlement of the Modular Home
 6   Litigation for $65,000.      Although most of the defendants
 7   tendered checks to Cass, debtors decided not to consummate the
 8   settlement.      After further litigation, the California Superior
 9   Court confirmed the settlement on March 24, 2003.      Cass then
10   prepared a stipulation and release (the “Stipulation”) which the
11   defendants signed, but the debtors did not.
12            At some point, debtors filed malpractice actions against
13   H&K and Cass.      In turn, H&K and Cass asserted attorney’s liens
14   against the proceeds from the Modular Home Litigation settlement
15   and filed suit against debtors for their fees.
16            Meanwhile, debtors defaulted on the loan with Cal Vet.
17   In early 2004, Cal Vet filed an unlawful detainer action against
18   debtors in the California Superior Court, County of Eldorado.
19                              Bankruptcy Events
20            On June 21, 2004, debtors filed their chapter 72 petition,
21   and Michael F. Burkart was appointed as their Trustee.      Debtors
22   removed the Modular Home Litigation to the bankruptcy court.
23   Thereafter, the Trustee, with court authorization, employed Egan
24   as his counsel.      With Egan’s assistance, the Trustee negotiated
25
          2
26          Unless otherwise indicated, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
27   “Rule” references are to the Federal Rules of Bankruptcy
     Procedure, and “Civil Rule” references are to the Federal Rules
28   of Civil Procedure.

                                       -4-
 1   an amendment to the Stipulation signed by the parties in state
 2   court in order to implement the original settlement for $65,000.
 3   The Trustee also reached an agreement with H&K and Cass
 4   regarding the malpractice claims and their attorney’s liens.
 5        Despite debtors’ objections, the bankruptcy court approved
 6   the settlements in a Memorandum Decision filed October 29, 2004.
 7   Debtors appealed that decision on November 8, 2004 (BAP No. 04-
 8   1575).   Two days later, on November 10, 2004, the bankruptcy
 9   court entered the order approving the settlements.   On
10   February 16, 2005, the Panel dismissed debtors’ appeal for lack
11   of prosecution.
12        A condition precedent to the settlements involving the
13   Modular Home Litigation and the malpractice actions was a
14   settlement agreement between the Trustee and Cal Vet.     On
15   November 16, 2004, the Trustee filed a motion to approve his
16   agreement with Cal Vet.   That agreement established the amount
17   of the indebtedness on debtors’ property, authorized the Trustee
18   to sell the property, and required Cal Vet to dismiss their
19   prepetition state court action against debtors.   This settlement
20   apparently was not consummated because debtors moved to convert
21   their case to chapter 13 when they learned that the Trustee
22   intended to sell their residence.    The bankruptcy court
23   converted their case on December 1, 2004, and the Trustee’s
24   appointment was terminated.
25        Debtors confirmed a chapter 13 plan on July 18, 2005, which
26   assumed and ratified the settlements of the Modular Home
27   Litigation and malpractice actions.
28

                                    -5-
 1   A.      The Adversary Complaint
 2           On January 2, 2008, debtors commenced the adversary
 3   proceeding out of which these appeals arise.       The complaint
 4   asserted claims for relief for: (1) fraud; (2) fraudulent
 5   inducement; (3) defamation; (4) breach of written contract;
 6   (5) breach of oral/implied contract; (6) breach of fiduciary
 7   duty; (7) gross negligence; (8) equitable, declaratory,
 8   injunctive relief, and accounting; (9) intentional infliction of
 9   emotional distress; (10) negligent infliction of emotional
10   distress; (11) violation of bankruptcy automatic stay;
11   (12) violation of Health and Safety Code § 18000, et seq.; and
12   (13) breach of the duty of good faith and fair dealing.
13                        The First Amended Complaint
14           Debtors filed a first amended complaint (“FAC”) on May 13,
15   2008.    Appellees filed motions to dismiss, which the court
16   granted, with leave to amend.
17                       The Second Amended Complaint
18           Debtors filed a second amended complaint on September 22,
19   2008.    Appellees filed another round of motions to dismiss,
20   which the court granted, with further leave to amend.      In its
21   civil minute order, which was virtually identical with respect
22   to each appellee, the court stated:
23           Plaintiffs . . . are granted leave to amend the
             complaint a final, third time. Plaintiffs may file a
24           third amended complaint that comports with Fed. R.
             Civ. P. 8(a), made applicable herein pursuant to Fed.
25           R. Bankr. P. 7008, as to Defendant [ ] on or before
             September 1, 2009. In the amended complaint, each
26           claim and the involvement of each defendant in that
             claim must be sufficiently alleged. Plaintiffs’
27           amended complaint must include clear, concise, and
             complete factual allegations describing the conduct
28           and events which underlie Plaintiffs’ claims. Simply

                                       -6-
 1           naming numerous defendants and then alleging that
             ‘defendants’ acted wrongfully is not sufficient.
 2           Failure to file an amended complaint that conforms to
             the requirements of this ruling may result in
 3           dismissal of this action without leave to amend for
             failure to state a claim upon which relief can be
 4           granted.
 5                                  The TAC
 6           Debtors filed the TAC on September 1, 2009.   The TAC
 7   complaint added claims for relief for malicious prosecution,
 8   fraud under 18 U.S.C. §§ 152 and 3571, declaratory relief, and
 9   injunctive relief.    Due to its length, we recite only an
10   abbreviated version of the general statements and allegations
11   taken from debtors’ TAC in ¶¶ 35-713 and accepted as true for
12   the purpose of deciding Appellees’ separately filed motions to
13   dismiss.
14                General Allegations In ¶¶ 35-71 Of The TAC
15           Debtors alleged that TCMHS never reported the sale of
             the manufactured house to the State of California
16           until 2003.
17           Debtors alleged that on June 4, 1998, Cal Vet
             appraised debtors’ new manufactured home and their
18           property for $188,000. The appraisal was done before
             the loan approval, before the house foundation was
19           built, and before their modular home was built. A
             central air conditioner was included in the appraisal
20           and paid for by debtors. Debtors alleged that they
             never received the air conditioner.
21
             Debtors further alleged that the foundation for the
22           manufactured house never passed the El Dorado County
             inspection because it was defective and not built
23           according to the approved engineer’s plans. According
             to debtors, TCHMS directed them to Pacific Consulting
24
25       3
            Debtors incorporate ¶¶ 35-71 into their first through
26   tenth claims for relief. The eleventh and thirteenth through
     eighteen claims for relief are included in the prayer of the TAC
27   and do not incorporate these paragraphs nor do they assert any
     additional allegations to support any claim. There is no twelfth
28   claim for relief in the TAC.

                                      -7-
 1   Engineers (“PCE”) and David Dahmen to have the
     foundation plans drawn up. They paid PCE $350.
 2   Debtors alleged that their home was a total loss due
     to its placement on the defective foundation and
 3   because the home was not built according to plan.
     Debtors allege that TCHMS and Fleetwood refused to
 4   replace or repair the home.
 5   Debtors further alleged that David Dahmen wrote a
     fraudulent report regarding their foundation and that
 6   he and PCE committed fraud against them. Debtors
     maintain that they suffered mental, financial, and
 7   loss of self worth for over a decade for the harm PCE
     and David Dahmen had caused them.
 8
     Debtors alleged that on June 24, 1998, they obtained
 9   the Cal Vet loan and signed the contract on the same
     date. Debtors alleged that TCHMS signed the Cal Vet
10   contract, but then sent a fax to Cal Vet stating that
     it was not going to abide by the contract’s terms.
11
     Debtors alleged that on July 22, 1998, FATCO recorded
12   the grant deed with Cal Vet on the property with an
     “unverified” false/fake address and with a different
13   escrow number (8273) than the Cal Vet escrow number
     (7989). Debtors alleged that FATCO recorded the
14   fraudulent grant deed at the El Dorado County Recorder
     Office, in Placerville, California. Debtors stated in
15   the TAC that if FATCO had been honest and followed the
     proper procedure of recording the grant deed, debtors
16   would not be in the dire situation that they are in,
     of losing their residence and experiencing mental and
17   financial damage with more than a decade of litigation
     and hardships.
18
     Debtors alleged that in August 2002, they lost the
19   right of access to and from their property. Debtors
     alleged that Roy and Alberta McKenzie, an El Dorado
20   County employee, and a state court clerk in El Dorado
     County, removed the easement of record on their
21   property that allowed debtors access to and from their
     residence. Debtors alleged that Cal Vet held the
22   title to the McKenzies’ land, as Roy McKenzie had a
     Cal Vet loan. Debtors alleged that Cal Vet knew that
23   debtors lost their right of access to and from the
     land. Debtors further alleged that fraud was
24   committed when the McKenzies presented a fraudulent
     “Exhibit.” Debtors also alleged that the McKenzies’
25   attorney, Doug Roecea, is a party of interest against
     debtors as Doug Roecea represented debtors at an
26   earlier time.
27   Debtors alleged that in 2002 FATCO denied their claim
     under the title insurance policy when they lost their
28   access to their property. In the TAC, debtors sought

                              -8-
 1   monetary relief from FATCO for the fraudulent grant
     deed and legal fees and costs for the loss of right to
 2   go in and out of the land.
 3   Debtors alleged that on July 23, 1998, Cal Vet amended
     debtors’ contract without their knowledge or signature
 4   for consent and/or approval. Debtors alleged that
     this violated and breached the Cal Vet contract and
 5   was fraud.
 6   Debtors alleged that on July 27, 1998, their modular
     house was delivered in poor and damaged condition.
 7   This was allegedly in violation of the California
     Health and Safety Code and the Cal Vet contract.
 8
     Debtors alleged that their escrow company (Heritage)
 9   released all money owed to the dealer and violated the
     Cal Vet contract.
10
     Debtors alleged that they were left with a severely
11   damaged house and that it was a total loss, since it
     would cost more to rebuild the house than it cost new.
12   Debtors alleged that Cal Vet refused to help them with
     the damaged house as required by the Cal Vet contract.
13
     Debtors alleged that on July 26, 1999, they filed the
14   Modular Home Litigation and hired Richard Rader
     (“Rader”) to assist them.
15
     Debtors alleged that Cal Vet refused to let debtors
16   see their Cal Vet file. Debtors alleged that this was
     in violation and in breach of the Cal Vet contract and
17   was also in violation of the Freedom of Information
     Act.
18
     Debtors alleged that when Rader withdrew as debtors’
19   attorney, they hired H&K on contingency in February
     2002.
20
     Debtors alleged that on August 5, 2002 a settlement
21   agreement was made under debtors’ duress. According
     to debtors, their state court attorneys Cass and
22   Galgani forced the agreement upon debtors under false
     pretenses and dire consequences to debtors. Debtors
23   alleged that they did not want to settle for $65,000
     when the house cost $65,000, H&K had a lien on the
24   debtors’ house for over $50,000, Cass had a lien for
     over $50,000, and the title was in TCMHS’s name, not
25   debtors because TCMHS never reported the sale of the
     house to the State of California. Debtors moved to
26   vacate the settlement agreement in the state court.
27   Debtors alleged that their attorney Cass wrote a
     letter to William (Bill) Gwire to deny debtors’ legal
28   representation by writing false misrepresentations to

                              -9-
 1   slander debtors, by stating that Nancy Tevis had
     attacked the judge in his chambers.
 2
     Debtors further alleged that Cass wrote false
 3   misrepresentations in his motion of January 2003, such
     as Nancy Tevis threatened to file a false rape charge
 4   if Cal Vet did not give her husband a loan. Cal Vet
     was allegedly subpoenaed to testify against debtors in
 5   Sacramento County Superior Court during the Modular
     Home Litigation. Debtors alleged that to defraud and
 6   slander debtors, Cal Vet testified and lied to the
     court that Nancy Tevis threatened to file a false rape
 7   charge if Cal Vet did not give her husband a loan.
     According to debtors, this information was allegedly
 8   used against debtors in their bankruptcy case.
 9   Debtors alleged that Cal Vet canceled their mandatory
     life insurance, but continued to charge them for the
10   premium.
11   Debtors alleged that on September 12, 2003, Cal Vet
     cancelled debtors’ contract.
12
     Debtors alleged that H&K had adverse interests to them
13   since H&K’s client was the Opal Hampton Family Trust.
     Opal Hampton was allegedly the owner of TCMHS.
14   Debtors alleged that H&K withdrew from their lawsuit
     with no just cause. Debtors alleged that H&K
15   committed fraud on the court as a party to the
     bankruptcy court settlement of their malpractice
16   claims. They alleged H&K agreed to fictitious facts
     in the agreement and knew they were false so that
17   debtors would be blamed for H&K’s withdrawal from
     their state court litigation and H&K would get paid
18   money from debtors’ estate. Debtors alleged that H&K
     willfully, knowingly lied and defrauded debtors and
19   defrauded the court with the false records and false
     statements . . . . by falsely portraying debtors as
20   responsible for H&K’s departure from debtors’ state
     court case.
21
     Debtors alleged that Egan falsely stated [in his
22   employment application] that there was not any contact
     with debtors prior to their bankruptcy. Debtors
23   alleged that they had several contacts with Egan in
     which they told him about the Modular Home Litigation.
24   According to debtors, their bankruptcy attorney,
     Ronald Melluish, did nothing about the conflict of
25   interest.
26   Debtors alleged that when Egan filed a motion for the
     bankruptcy court to approve the compromise of the
27   state court litigation, he knowingly made and used
     false records and statements to get it approved.
28   Debtors alleged that Egan conspired and defrauded the

                              -10-
 1        court and committed fraud upon the court to get Judge
          Christopher Klein to approve and grant the motion to
 2        compromise the state court litigation.
 3        At another point, debtors alleged that the Trustee
          knowingly, deliberately, and willfully committed fraud
 4        upon the court to sell debtors’ residence.
 5        Due to Egan’s conflict of interest, debtors alleged
          that all agreements made by him must be vacated.
 6
          Debtors further alleged that Egan committed fraud upon
 7        the court in the settlement with Cal Vet which
          authorized the Trustee to sell their residence.
 8
          Debtors alleged that Cal Vet violated the automatic
 9        stay and state court settlement agreement and that Cal
          Vet threatened to obtain relief from stay to take
10        possession of debtors’ property.
11        Appellees filed motions to dismiss debtors’ TAC.   On
12   August 9, 2010, the bankruptcy court issued detailed minute
13   orders granting the motions and dismissing the adversary
14   proceeding as to Appellees without leave to amend and certified
15   the dismissal orders as final judgments under Rule 54(b).
16   Debtors timely appealed the orders.
17   B.   The Limited Remand
18        On October 15, 2010, the Panel remanded these appeals to
19   the bankruptcy court for an express determination, in
20   conformance with Rule 54(b), that there was no just reason for
21   delay in reviewing the various orders.   After the remand,
22   debtors filed an ex parte motion requesting the bankruptcy court
23   to make the necessary findings for certification.
24        On January 12, 2011, the bankruptcy court issued separate
25   Supplemental Memoranda as to Appellees, finding that there was
26   no just reason for delay of entry of the dismissal orders as
27   final, appealable judgments under Civil Rule 54(b).   The court
28   explained that the orders adjudicated all claims for relief in

                                   -11-
 1   the TAC as to Appellees, debtors could not further amend the
 2   TAC, and Appellees had not filed counterclaims against debtors.
 3   The bankruptcy court thus found that the dismissal of the TAC
 4   ended the involvement of Appellees as parties in the adversary
 5   proceeding.
 6                             II.   JURISDICTION
 7        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
 8   §§ 1334 and 157(b)(1).    This Panel has jurisdiction under
 9   28 U.S.C. § 158.
10                               III.    ISSUES
11        A.   Whether the bankruptcy court abused its discretion in
12   certifying the interlocutory dismissal orders as final judgments
13   under Civil Rule 54(b);
14        B.   Whether the bankruptcy court erred in dismissing the
15   TAC as to Appellees under Civil Rule 12(b)(6); and
16        C.   Whether the bankruptcy court abused its discretion in
17   dismissing the TAC as to Appellees without leave to amend.
18                       IV.    STANDARDS OF REVIEW
19        We review a certification of an interlocutory judgment
20   under Rule 54(b) for abuse of discretion.       Texaco, Inc. v.
21   Ponsoldt, 939 F.2d 794, 797 (9th Cir. 1991).
22        We review de novo the bankruptcy court’s grant of a motion
23   to dismiss under Civil Rule 12(b)(6).        Movsesian v. Victoria
24   Versicherung AG, 629 F.3d 901, 905 (9th Cir. 2010).        We may
25   affirm the bankruptcy court’s dismissal of a complaint “‘only if
26   it is clear that no relief could be granted under any set of
27   facts that could be proved consistent with the allegations.’”
28   Cooke, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc.,

                                        -12-
 1   911 F.2d 242, 244 (9th Cir. 1990)(quoting Hishon v. King &
 2   Spalding, 104 S.Ct. 2229, 2232 (1984)).
 3        We review a bankruptcy court’s decision to dismiss a
 4   complaint with prejudice for an abuse of discretion.   Stearns v.
 5   Ticketmaster Corp., 655 F.3d 1013, 1018 (9th Cir. 2011).
 6        In applying our abuse of discretion test, we first
          ‘determine de novo whether the [bankruptcy] court
 7        identified the correct legal rule to apply to the
          relief requested.’ If the bankruptcy court identified
 8        the correct legal rule, we then determine whether its
          ‘application of the correct legal standard [to the
 9        facts] was (1) illogical, (2) implausible, or
          (3) without support in inferences that may be drawn
10        from the facts in the record.’ If the bankruptcy court
          did not identify the correct legal rule, or its
11        application of the correct legal standard to the facts
          was illogical, implausible, or without support in
12        inferences that may be drawn from the facts in the
          record, then the bankruptcy court has abused its
13        discretion.
14   USAA Fed. Sav. Bank. v. Thacker (In re Taylor), 599 F.3d 880,
15   887-88 (9th Cir. 2010)(citing United States v. Hinkson, 585 F.3d
16   1247, 1261-62 (9th Cir. 2009)).
17        We may affirm on any ground supported by the record.
18   Shanks v. Dressel, 540 F.3d 1082, 1086 (9th Cir. 2008).
19                             V.   DISCUSSION
20   A.   The Bankruptcy Court Did Not Abuse Its Discretion In
          Certifying The Dismissal Orders As Final Judgments Under
21        Civil Rule 54(b)
22        The bulk of debtors’ opening brief is devoted to the issue
23   of whether the bankruptcy court abused its discretion in
24   certifying its dismissal orders as final judgments under Civil
25   Rule 54(b).   Debtors’ position is curious when they themselves
26   appealed the dismissal orders and, after this Panel remanded the
27   matter back to the bankruptcy court to make further findings
28   under Civil Rule 54(b), they filed an ex parte pleading urging

                                     -13-
 1   the bankruptcy court to make the findings necessary for
 2   certification.    Now, taking a different approach, they maintain
 3   that the very certification they once supported is improper.
 4           Notwithstanding debtors’ inconsistent positions, we briefly
 5   consider whether the bankruptcy court’s certification of the
 6   dismissal orders was proper only because we must satisfy
 7   ourselves that we are properly exercising our jurisdiction over
 8   these appeals.4    “[Civil Rule] 54(b) controls the analysis of
 9   finality of judgments for purposes of appeal in federal civil
10   actions, including bankruptcy proceedings.”    Belli v. Temkin
11   (In re Belli), 268 B.R. 851, 855 (9th Cir. BAP 2001).     We give
12   great deference to the bankruptcy court’s decision to certify
13   under Civil Rule 54(b).    Texaco, Inc., 939 F.2d at 798.
14   Certification is proper if it will aid “expeditious decision” of
15   the case.    Id. at 797.
16           Civil Rule 54(b), made applicable to the Bankruptcy Code by
17   Rule 7054(a), provides in part:
18           When an action presents more than one claim for relief
             . . . or when multiple parties are involved, the court
19           may direct entry of a final judgment as to one or
             more, but fewer than all, claims or parties only if
20           the court expressly determines that there is no just
             reason for delay. Otherwise, any order or other
21           decision, however designated, that adjudicates fewer
             than all the claims or the rights and liabilities of
22
23
         4
            Even if the dismissal orders were not final, we have
24   broad discretionary authority to entertain interlocutory appeals
     from orders that are not final judgments. Beverly v. Wolkowitz
25   (In re Beverly), 374 B.R. 221, 231 (9th Cir. BAP 2007). Upon
26   grant of leave to appeal, we may entertain an interlocutory
     appeal. Id. However, because we conclude the bankruptcy court’s
27   certification of the dismissal orders as final judgments was
     proper, we need not further explore the possibility of an
28   alternative basis for our jurisdiction.

                                      -14-
 1        fewer than all the parties does not end the action as
          to any of the claims or parties and may be revised at
 2        any time before the entry of a judgment adjudicating
          all the claims and all the parties’ rights and
 3        liabilities.
 4        We conclude that the bankruptcy court properly applied the
 5   standards for certification under the rule.   The bankruptcy
 6   court considered the finality of its orders dismissing the TAC
 7   with respect to Appellees — the TAC could not be further
 8   amended, none of Appellees had filed counterclaims, and the
 9   dismissal orders adjudicated all claims for relief in the TAC as
10   to each appellee, thereby ending their involvement as parties in
11   the adversary proceeding.   As a consequence, there was nothing
12   left to be done with respect to Appellees except to wait for the
13   final disposition of the litigation.
14        The bankruptcy court also found no justifiable reason for
15   delaying the entry of the dismissal orders as final orders.    We
16   give great deference to this finding because the bankruptcy
17   court was “‘the one most likely to be familiar with the case and
18   with any justifiable reasons for delay.’”   Sheehan v. Atlanta
19   Int’l Ins. Co., 812 F.2d 465, 468 (9th Cir. 1987).     Nowhere in
20   their brief do debtors set forth any justifiable reason for
21   delaying the entry of the dismissal orders as final orders.    We
22   thus defer to the bankruptcy court’s findings and are satisfied
23   that we have jurisdiction over the orders on appeal.
24   B.   The Bankruptcy Court Did Not Err In Dismissing The TAC
25        Although debtors contend that the bankruptcy court should
26   not have dismissed their TAC with respect to Appellees, they
27   never argue that the bases for the August 9, 2010 dismissal
28   orders under Rule 12(b)(6) — failure to state a claim for relief

                                    -15-
 1   and the running of the statute of limitations — were incorrect.
 2   Instead, they argue only about the bankruptcy court’s abuse of
 3   discretion in certifying the dismissal orders and set forth
 4   other issues that are irrelevant to the underlying question on
 5   appeal.5
 6           By raising these issues, debtors clearly misunderstand the
 7   scope of our review.    The purpose of a motion to dismiss under
 8   Civil Rule 12(b)(6) is simply to test the legal sufficiency of
 9   the complaint.    Therefore, our narrow scope of review of the
10   orders on appeal does not allow us to reach the merits of any
11   issue, and our inquiry is limited to the content of the
12   complaint.    N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578,
13   581 (9th Cir. 1983).
14           1.   Pleading Standards Under Civil Rule 8(a) and 9(b)
15           Generally, a plaintiff’s burden at the pleading stage is
16   relatively light.    Civil Rule 8(a)(2), made applicable to the
17   Bankruptcy Code by Rule 7008, states that all that is needed is
18   “a short and plain statement of the claim showing that the
19   pleader is entitled to relief.”    In turn, this means that the
20   complaint must include “sufficient allegations to put defendants
21
22       5
            Debtors’ remaining “issues” ask (1) is FATCO’s recorded
23   grant deed valid? (2) does the BAP’s Opinion, “Trustee’s council
     [sic] is Disqualified” stand? (3) is the Appellants’ Motion to
24   Vacate the Settlement Agreement, now the Adversary? and (4) Does
     the “Fraud upon the Court” claim in this Adversary make this
25   appeal decision moot? Debtors’ questions appear related to facts
26   or allegations in their TAC which were not “adjudicated” to a
     conclusion rather than any error committed by the court in
27   relation to the standards under Civil Rule 12(b)(6). Because
     these “issues” or questions are irrelevant to this appeal, we do
28   not discuss them.

                                      -16-
 1   fairly on notice of the claims against them.”   McKeever v.
 2   Block, 932 F.2d 795, 798 (9th Cir. 1991).    When a plaintiff
 3   asserts multiple claims against multiple defendants, this fair
 4   notice standard requires that the allegations in the complaint
 5   must show which defendants are liable to the plaintiff for which
 6   wrongs.   See Gauvin v. Trombatore, 682 F.Supp. 1067, 1071 (N.D.
 7   Cal. 1988)(plaintiff must allege the basis of his claim against
 8   each defendant to satisfy [Civil Rule] 8(a)(2)); Van Dyke Ford,
 9   Inc. v. Ford Motor Co., 399 F.Supp. 277, 284 (E.D. Wis. 1975)
10   (“Specific identification of the parties to the activities
11   alleged is required . . . to enable the defendant[s] to plead
12   intelligently.”).
13        These appeals also implicate Civil Rule 9(b) which states a
14   heightened standard for pleading fraud claims — a standard
15   slightly more onerous than the “short and plain statement”
16   standard under Civil Rule 8(a)(2).    Civil Rule 9(b),
17   incorporated into the Bankruptcy Code by Rule 7009, requires
18   that a plaintiff must state “with particularity the
19   circumstances constituting fraud . . . .”   The Ninth Circuit has
20   provided guidance for the “with particularity” requirement by
21   stating that to comport with Civil Rule 9(b) the complaint must
22   (1) specify the averred fraudulent representations; (2) aver the
23   representations were false when made; (3) identify the speaker;
24   (4) state when and where the statements were made; and (5) state
25   the manner in which the representations were false and
26   misleading.   Lancaster Cmty. Hosp. v. Antelope Valley Hosp.
27   Dist., 940 F.2d 397, 405 (9th Cir. 1991).
28        Because fraud encompasses a wide variety of circumstances,

                                    -17-
 1   the requirements of Civil Rule 9(b) — like Civil Rule 8(a)(2) —
 2   should provide all defendants with sufficient information to
 3   formulate a response.   Thus, the complaint cannot lump multiple
 4   defendants together but “require[s] plaintiffs to differentiate
 5   their allegations when suing more than one defendant . . . and
 6   inform each defendant separately of the allegations surrounding
 7   his alleged participation in the fraud.”   Haskin v. R.J.
 8   Reynolds Tobacco Co., 995 F.Supp. 1437, 1439 (M.D. Fla. 1998).
 9   Moreover, the plaintiff must, at a minimum, “identif[y] the role
10   of [each] defendant[ ] in the alleged fraudulent scheme.”     Moore
11   v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir.
12   1989).
13        2.   The Standards For Dismissal Under Civil Rule 12(b)(6)
14        The above rules which set forth the pleading standards
15   overlie the standards for deciding motions to dismiss a
16   complaint under Civil Rule 12(b)(6).
17        When ruling on a motion to dismiss under Civil Rule
18   12(b)(6), we are instructed first to separate the factual and
19   legal elements of a claim.    In examining the factual elements of
20   a claim, “we accept all factual allegations in the complaint as
21   true and construe the pleadings in the light most favorable to
22   the nonmoving party.”   Movsesian, 629 F.3d at 905 (quoting
23   Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005)(quotation
24   marks omitted)).   We then must determine whether the facts
25   alleged are sufficient to show that the plaintiff has a
26   plausible claim for relief.   Ashcroft v. Iqbal, 129 S.Ct. 1937,
27   1949 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
28   570 (2007)).

                                     -18-
 1        While a complaint attacked by a Rule 12(b)(6) motion
          to dismiss does not need detailed factual allegations,
 2        a plaintiff’s obligation to provide the grounds of his
          entitlement to relief requires more than labels and
 3        conclusions, and a formulaic recitation of the
          elements of a cause of action will not do. Factual
 4        allegations must be enough to raise a right to relief
          above the speculative level . . . .
 5
 6   Twombly, 550 U.S. at 555.   Determining whether a complaint
 7   states a plausible claim for relief will “be a context-specific
 8   task that requires the reviewing court to draw on its judicial
 9   experience and common sense.”   Iqbal, 129 S.Ct. at 1950.        In the
10   end, the determinative question is whether there is any set of
11   “facts that could be proved consistent with the allegations of
12   the complaint” that would entitle plaintiff to some relief.
13   Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002); Cooke,
14   Perkiss & Liehe, 911 F.2d at 244.      We will not assume that
15   plaintiffs “can prove facts which [they have] not alleged, or
16   that the defendants have violated . . . laws in ways that have
17   not been alleged.”   Associated Gen. Contractors of Cal., Inc. v.
18   Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).
19        With respect to the legal elements of a claim, our mandate
20   is different.   We are not “bound to accept as true a legal
21   conclusion couched as a factual allegation.”     Papasan v. Allain,
22   478 U.S. 265, 286 (1986).
23        Moreover, if the allegations show that relief is barred as
24   a matter of law, the complaint is subject to dismissal.     Jones
25   v. Bock, 549 U.S. 199, 215 (2007)(dismissal appropriate under
26   Civil Rule 12(b)(6) if the allegations show that relief is
27   barred by the applicable statute of limitations); Pani v. Empire
28   Blue Cross Blue Shield, 152 F.3d 67, 74-75 (2d Cir. 1998)

                                     -19-
 1   (affirmative defense of official immunity may be resolved by
 2   Civil Rule 12(b)(6) if clearly established by the allegations
 3   within the complaint).
 4            Finally, although the independent threshold pleading
 5   requirements under Civil 9(b) support dismissal apart from Civil
 6   Rule 12(b)(6), the Ninth Circuit has stated that “[a] motion to
 7   dismiss a complaint or claim ‘grounded in fraud’ under [Civil]
 8   Rule 9(b) for failure to plead with particularity is the
 9   functional equivalent of a motion to dismiss under Rule 12(b)(6)
10   for failure to state a claim.”     Vess v. Ciba-Geigy Corp. USA,
11   317 F.3d 1097, 1107 (9th Cir. 2003).
12            3.   The Merits
13            Here, our review of debtors’ TAC shows that it was woefully
14   deficient with respect to the pleading requirements under Civil
15   Rules 8(a)(2) and 9(b).     First, many of the claims for relief do
16   not contain a short and plain statement showing that debtors
17   were entitled to relief.     Egregious examples are the eleventh
18   and thirteenth6 through eighteenth claims for relief.     These
19   claims were not contained in the body of the TAC, but in the
20   prayer with no factual allegations whatsoever.     Second, in
21   numerous instances, the TAC made allegations of fraud without
22   meeting the particularity requirements under Civil Rule 9(b).
23   No one can tell from reading the TAC which defendant made what
24   misrepresentation or even what the alleged misrepresentations
25   were.     Third, references in most of the claims for relief are to
26
27
          6
            There was no twelfth claim for relief in either the body
28   or prayer of the TAC.

                                       -20-
 1   “Defendants” generally,7 lumping them all together without
 2   alleging which defendants were liable to debtors for which
 3   wrongs.       In short, this manner of pleading does nothing to
 4   apprise the respective Appellees of which allegations might
 5   apply to them.       As a result, trying to sort out who said or did
 6   what, where, or when is a pointless exercise.        Therefore, at the
 7   most fundamental level, the TAC failed to provide the “fair
 8   notice” to Appellees which is required under the Civil Rules for
 9   pleading.
10              Next, as apparent from the face of the complaint, many of
11   debtors’ claims were based on California state law causes of
12   action which were time-barred.
13              Finally, as discussed below, with respect to the second
14   claim for relief, the trustee’s affirmative defense of quasi-
15   judicial immunity was established by the allegations within the
16   TAC.
17              These numerous deficiencies, taken together, themselves
18   demonstrate there is no basis for overturning the bankruptcy
19   court’s decision in these appeals.         We may affirm on any ground
20   supported by the record.       Shanks, 540 F.3d at 1086.
21                              First Claim For Relief
22              Debtors’ first claim for relief sought various damages and
23   costs against “Defendants” for fraud, deceit, misrepresentation
24   and constructive fraud against a fiduciary.         The bankruptcy
25   court construed debtors’ first claim for relief as a state law
26
            7
27          Similar to the bankruptcy court, we liberally construe
     debtors’ reference to “Defendants” in the various claims for
28   relief as including Appellees.

                                         -21-
 1   fraud claim.    We do as well.
 2           Civil Rule 9 (b) requires that fraud be pled with
 3   particularity; general and conclusory allegations do not
 4   suffice.    A liberal reading of this claim makes it painfully
 5   clear that debtors did little more than set forth conclusory
 6   allegations as against all “Defendants”.    Nowhere did debtors
 7   specify the averred fraudulent representations, identify the
 8   speaker, state when and where the statements were made, and
 9   state the manner in which the representations were false and
10   misleading.    Accordingly, the bankruptcy court properly
11   dismissed debtors’ fraud claim against Appellees on Civil
12   Rule 9(b) grounds.
13           California statutes of limitations govern debtors’ fraud
14   claim for relief which is based on non-bankruptcy California
15   law.    § 108(a); Cal. Sansome Co. v. U.S. Gypsum, 55 F.3d 1402,
16   1403 (9th Cir. 1995).    Cal. Code Civ. Proc. (“CCP”) § 338 sets
17   forth a three year statute of limitations for fraud.    Under CCP
18   § 338(d), a cause of action for fraud “is not deemed to have
19   accrued until the discovery, by the aggrieved party, of the
20   facts constituting the fraud or mistake.”
21           Here, debtors’ TAC shows that they filed the Modular Home
22   Litigation on July 26, 1999, which was based, in part, on the
23   same facts giving rise to their fraud claim in the TAC (¶ 54).
24   Therefore, debtors’ fraud claim accrued no later than July 26,
25   1999.    Three years from that date would have been July 26, 2002.
26   Since debtors’ complaint was not filed until January 2, 2008,
27   their fraud claim is time-barred unless some exception applies.
28           Debtors do not argue on appeal that the “rule of discovery”

                                      -22-
 1   applies to toll the statute of limitations.   Moreover, the TAC
 2   does not reveal any facts that showed, among other things,
 3   debtors’ lack of knowledge or lack of means of obtaining
 4   knowledge of the facts constituting the alleged fraud.      See Weir
 5   v. Snow, 210 Cal. App. 2d 283, 292 (Cal. Ct. App. 1962)(the
 6   plaintiff must plead and prove the facts showing: lack of
 7   knowledge; lack of means of obtaining knowledge (in the exercise
 8   of reasonable diligence the facts could not have been discovered
 9   at an earlier date); and how and when he did actually discover
10   the fraud or mistake).    Therefore, the bankruptcy court
11   correctly ruled that debtors’ fraud claim was time-barred.
12                       Second Claim For Relief
13        Debtors’ second claim for relief sought various damages and
14   costs against “Defendants” for fraudulent inducement/rescission.
15   Our reading of the TAC comports with the bankruptcy court’s
16   interpretation that this claim is a state law claim for
17   rescission of a written contract based on fraud.    A claim for
18   rescission based on fraud must be pled with particularity just
19   like a claim for fraud.   4 Witkin, Cal. Proc. 5th, § 544 at p.
20   621 (2008).
21        Debtors’ allegations are general and conclusory with
22   respect to Appellees.    Debtors’ fail to identify the written
23   contract(s) they were referring to and which Appellees were
24   parties to the alleged contract(s).    Debtors refer to
25   “Defendants’ express representations,” but nowhere do they state
26   what those representations were or who made them.   Thus,
27   debtors’ allegations did not give Appellees fair notice of the
28   claims against them nor do the allegations allow us to

                                     -23-
 1   determine, on the facts pled, that there is any foundation for
 2   debtors’ charges of fraud.     Accordingly, the bankruptcy court
 3   properly dismissed this claim on Civil Rule 9(b) grounds.
 4            Alternatively, debtors’ claim based on the rescission of a
 5   contract in writing was barred by the four-year statute of
 6   limitations under CCP § 337(3).8     Under CCP § 337(3), the
 7   limitations period begins to run from the date when the facts
 8   occurred that entitled the aggrieved party to rescind.     Since
 9   the Modular Home Litigation debtors filed on July 26, 1999, was
10   based, in part, on the same facts giving rise to debtors’
11   rescission claim, this claim accrued no later than July 26,
12   1999.     Four years from that date is July 26, 2003.   Debtors did
13   not file the adversary proceeding until January 2, 2008.
14   Therefore, this claim was time-barred unless an exception
15   applied.
16            Again, debtors do not contend on appeal that the “rule of
17   discovery” applies to toll the statute of limitations.     Nowhere
18   in the TAC did debtors plead any facts that showed, among other
19   things, their lack of knowledge or lack of means of obtaining
20   knowledge of the facts constituting the fraud.     See Weir,
21   210 Cal. App. 2d at 292.     We thus conclude the bankruptcy court
22   correctly ruled that debtors’ second claim for relief was time-
23   barred.
24            Dismissal was also appropriate as to the Trustee on this
25   claim for relief because the doctrine of quasi-judicial immunity
26
          8
27          Here, because the claim was so ambiguous, the bankruptcy
     court applied the lengthier four-year limitation period rather
28   than the three year period for fraud.

                                       -24-
 1   applied.   “Bankruptcy trustees are entitled to broad immunity
 2   from suit when acting within the scope of their authority and
 3   pursuant to court order.” Bennett v. Williams, 892 F.2d 822, 823
 4   (9th Cir. 1989); Nilsen v. Neilson (In re Cedar Funding, Inc.),
 5   419 B.R. 807, 820 (9th Cir. BAP 2009).   Debtors allege that
 6   “Defendants” made misrepresentations to them regarding a
 7   compromise motion that was filed and ultimately granted by court
 8   order in the bankruptcy proceeding.    Debtors also alleged that
 9   the Trustee “knowingly, deliberately, [and] willfully committed
10   fraud upon the court to sell [debtors’] residence.”   Not only
11   have debtors failed to plead their fraud upon the court with
12   particularity as required under Civil Rule 9(b), but the alleged
13   fraud occurred within the Trustee’s scope of authority as
14   chapter 7 trustee for debtors’ estate.   Therefore, the
15   bankruptcy court correctly dismissed this claim as to the
16   Trustee on the additional ground that he was shielded from
17   liability under the derived quasi-judicial immunity defense.
18                         Third Claim For Relief
19        Debtors’ third claim for relief sought various damages and
20   costs against “Defendants” for defamation/libel/slander.
21   Under California law, an essential element of defamation,
22   whether alleged as an action for libel or slander, is a showing
23   of a false statement of fact.   Cort v. St. Paul Fire & Marine
24   Ins. Cos., 311 F.3d 979, 985 (9th Cir. 2002)(citing Savage v.
25   Pac. Gas & Elec. Co., 21 Cal. App. 4th 434, 444 (Cal. Ct. App.
26   (1993)(internal quotation marks omitted)).
27        Our review of the TAC shows that debtors failed to allege
28   that any of Appellees made a false statement of fact through an

                                     -25-
 1   oral statement, writing, picture, or other fixed representation.
 2   Instead, the TAC only uses conclusory terms like “fraud,”
 3   “slander,” or “[a] lie” without alleging any facts showing the
 4   precise statements that were made or that they were false.    The
 5   allegations in this claim for relief fall far short of providing
 6   fair notice to Appellees.   Accordingly, the bankruptcy court
 7   properly dismissed this claim for relief for failure to state a
 8   claim against Appellees.
 9                        Fourth Claim For Relief
10        The fourth claim for relief sought various damages and
11   costs against “Defendants” for breach of written contract.
12   Under California law, a breach of contract action is comprised
13   of the following:   (1) existence of a contract; (2) plaintiffs’
14   performance or excuse of nonperformance; (3) defendants’ breach;
15   and (4) damages to plaintiffs as a result of the breach.
16   Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co., 116 Cal.
17   App. 4th 1375, 1391 (Cal. Ct. App. 2004).
18        Debtors allege that they entered into written contracts
19   with “Defendants” on June 21, 1998, and again on June 1, 2004.
20   Debtors refer to a contract that they signed on May 21, 1998,
21   with TCMHS to purchase a new modular home, but this contract was
22   entered into a month earlier than the date stated in this claim
23   for relief.   We could not find any facts alleged that pertained
24   to a written contract with Appellees on either date referenced
25   in this claim for relief.   Further, even if there were written
26   contracts in existence which Appellees could identify through
27   the allegations in the TAC, debtors fail to allege facts which
28   could be reasonably construed to match up with the remaining

                                    -26-
 1   elements of their claim.   Nowhere did debtors allege their
 2   performance or excuse for non-performance, and they failed to
 3   allege which contract terms any of Appellees allegedly breached.
 4   Therefore, we conclude that the bankruptcy court properly
 5   dismissed this claim for relief because it failed to state a
 6   claim against Appellees.
 7                         Fifth Claim For Relief
 8        The fifth claim for relief sought various damages and costs
 9   against “Defendants” for breach of an oral or implied contact.
10   Under California law, the elements to establish an implied
11   contract are the same as those for an express contract.    See
12   Div. of Labor Law Enforcement v. Transpacific Transp. Co.,
13   69 Cal. App. 3d 268, 277 (Cal. Ct. App. 1977).   In other words,
14   a plaintiff must show offer, acceptance, and consideration as
15   well as a meeting of the minds.   Nissan N. Am., Inc. v. Jim
16   M’Lady Oldsmobile, Inc., 486 F.3d 989 (7th Cir. 2007).     The
17   existence of an implied contract turns on the intent of the
18   parties.   Tony v. Sec. Experts, 20 F.3d 967, 971 (9th Cir.
19   1994).
20        Debtors allege that on June 1, 2004, they and “Defendants”
21   entered into an oral and implied contract in the County of El
22   Dorado to be performed in the County of El Dorado and in the
23   United States Bankruptcy Court in the County and City of
24   Sacramento, regarding the Cal Vet contract.    Debtors further
25   allege that “Defendants” have breached the oral and/or implied
26   contracts with debtors.    Yet, debtors set forth no facts showing
27   that Appellees entered into an oral or implied contract with
28   debtors; there are no allegations showing an offer, acceptance

                                     -27-
 1   or consideration, or a meeting of the minds.    Paragraphs thirty-
 2   five through seventy-one of the TAC fail to mention any oral or
 3   implied contract made on June 1, 2004.   Instead, the TAC refers
 4   to a settlement agreement that was reached between Cal Vet and
 5   debtors, but no terms of the purported settlement agreement are
 6   alleged.    We agree with the bankruptcy court that these
 7   allegations, taken together, are conclusory.    We are not
 8   required to assume the truth of legal conclusions merely because
 9   they are cast in the form of factual allegations.   Papasan,
10   478 U.S. at 286; see also, Ove v. Gwinn, 264 F.3d 817, 821 (9th
11   Cir. 2001)(explaining that conclusory legal allegations and
12   unwarranted inferences are insufficient to defeat a motion to
13   dismiss).   Therefore, we conclude that the bankruptcy court
14   properly dismissed this claim for relief for failure to state a
15   claim against Appellees.
16                          Sixth Claim For Relief
17        The sixth claim for relief sought various damages and costs
18   against “Defendants” for breach of fiduciary duties.   Under
19   California law, to state a claim for breach of fiduciary duty, a
20   plaintiff must show the existence of a fiduciary relationship,
21   its breach, and damage proximately caused by that breach.
22   Thomson v. Canyon, 198 Cal. App. 4th 594, 604 (Cal. Ct. App.
23   2011)(citations omitted).
24        Even under the most liberal reading of this claim for
25   relief, the TAC does not allege any facts to support debtors’
26   theory as to the creation of a fiduciary relationship with any
27   of Appellees.   The TAC simply alleges that “Defendants” owed
28   fiduciary duties to plaintiffs as their clients.    Debtors did

                                     -28-
 1   not allege any facts showing that they were clients of
 2   Appellees, that an agency relationship was created between
 3   debtors and Appellees, or that debtors otherwise reposed trust
 4   and confidence in Appellees to create a fiduciary relationship.
 5   Wolf v. Sup. Court, 107 Cal. App. 4th 25, 29 (2003).     We will
 6   not assume that debtors can prove facts which they have not
 7   alleged.   Associated Gen. Contractors of Cal., Inc., 459 U.S. at
 8   526.   Moreover, debtors’ allegations are conclusory.    We are not
 9   required to assume the truth of legal conclusions merely because
10   they are cast in the form of factual allegations.     Papasan,
11   478 U.S. at 286.   Therefore, we conclude that the bankruptcy
12   court properly dismissed this claim for relief for failure to
13   state a claim against Appellees.
14                         Seventh Claim For Relief
15          The seventh claim for relief sought various damages and
16   costs against “Defendants” for negligence.    The bankruptcy court
17   construed this claim as one for negligent performance of
18   professional services.   We do as well.
19          A cause of action for professional negligence is generally
20   governed by the two-year statute of limitations under CCP
21   § 339(1) for an “action upon a contract, obligation or liability
22   not founded upon an instrument of writing.”      Thomson, 198 Cal.
23   App. 4th at 607 (stating that the shorter two-year statute of
24   limitations of CCP § 339(1) has been consistently applied to a
25   range of professional negligence actions from accountants to
26   real estate appraisers).   A cause of action in tort for
27   professional negligence does not accrue until the plaintiff both
28   (1) sustains damage and (2) discovers, or should discover, the

                                     -29-
 1   negligence.    Slavin v. Trout, 18 Cal. App. 4th 1536, 1540 (Cal.
 2   Ct. App. 1993).
 3           This claim for relief refers to the Cal Vet loan and, in
 4   general, the TAC alleges that the negligent performance of
 5   professional services occurred on or before the commencement of
 6   the Modular Home Litigation on July 26, 1999.    Debtors’
 7   professional negligence claim for relief was initiated in
 8   January 2, 2008, more than nine years after their negligence
 9   claim accrued on July 26, 1999.    Therefore, the bankruptcy court
10   correctly ruled that this claim for relief was time-barred.
11                          Eighth Claim For Relief
12           The eighth claim for relief seeks a variety of forms of
13   relief, including damages, an accounting, declaratory relief,
14   injunctive relief, and damages against the “Defendants”.
15           California law recognizes accounting as a remedy for
16   fiduciary breach.    However, as stated above, debtors alleged no
17   facts showing that Appellees had a fiduciary relationship with
18   them.
19           An action for declaratory relief requires the plaintiff to
20   demonstrate the existence of an actual controversy regarding the
21   legal rights of the parties.    McClain v. Octagon Plaza, LLC,
22   159 Cal. App. 4th 784, 800 (Cal. Ct. App. 2008).    Where there is
23   an accrued cause of action for a past breach of contract or
24   other wrong, declaratory relief is inappropriate.    Canova v.
25   Trs. of Imperial Irrigation Dist. Emp. Pension Plan, 150 Cal.
26   App. 4th 1487, 1497 (Cal. Ct. App. 2007).    If a party has a
27   fully matured cause of action for money, the party must seek
28   damages rather than declaratory relief.    Id.   Here, the

                                      -30-
 1   assertions in the TAC including the alleged breach of contract,
 2   fraud, slander, and fraudulent recording, have already occurred.
 3   Thus, we agree with the bankruptcy court that debtors must seek
 4   redress through a claim for money damages.
 5        Further, debtors are not entitled to injunctive relief.
 6   Under California law, “injunctive relief is a remedy and not, in
 7   itself, a cause of action . . . .”      McDowall v. Watson, 59 Cal.
 8   App. 4th 1155, 1159 (Cal. 1997).    Moreover, the TAC does not
 9   allege any facts which would entitle them to the “remedy” of
10   injunctive relief.   Debtors allege that they will continue to
11   suffer irreparable injury that cannot be adequately remedied at
12   law unless “Defendants,” and their officers, agents, and
13   employees and all other persons acting in concert with them are
14   enjoined from engaging in any further conduct and all other
15   conduct which would cause or tend to cause plaintiffs damages or
16   injuries.   However, as noted by the bankruptcy court, debtors
17   fail to specify the conduct that they want enjoined and merely
18   recite the consequences if the unspecified conduct is not
19   enjoined.   Likewise, debtors fail to specify which of the
20   Appellees they wish to enjoin.
21        Debtors also request various types of damages, including
22   punitive damages under Cal. Civ. Code § 3294, in this claim for
23   relief.   Their request for damages is clearly duplicative.    They
24   have already alleged entitlement to various damages based on
25   their assertions that Defendants committed negligence, slander,
26   libel, and fraud.    These allegations are cast as separate claims
27   in the TAC and those claims each seek various types of damages,
28   including punitive damages.

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 1          For all these reasons, we conclude the bankruptcy court
 2   properly dismissed this claim for relief against Appellees.
 3                          Ninth Claim For Relief
 4          The ninth claim for relief seeks various damages and costs
 5   against “Defendants” for intentional infliction of emotional
 6   distress.    Under California law, the elements of the tort of
 7   intentional infliction of emotional distress include the
 8   following:   (1) extreme and outrageous conduct by the defendant
 9   with the intention of causing, or reckless disregard of the
10   probability of causing, emotional distress; (2) the plaintiff’s
11   suffering severe or extreme emotional distress; and (3) actual
12   and proximate causation of the emotional distress by the
13   defendant’s outrageous conduct.   Davidson v. City of
14   Westminster, 32 Cal.3d 197, 209 (Cal. 1982).
15          There are no facts in the TAC matching the elements for the
16   tort of intentional infliction of emotional distress.     The TAC
17   fails to mention any extreme and outrageous conduct of
18   Appellees, fails to mention any facts showing that Appellees
19   performed such conduct intentionally or with reckless disregard
20   of the probability of causing emotional distress, and other than
21   debtors’ conclusory statements, fails to allege facts showing
22   that debtors suffered severe emotional distress as a result.        We
23   will not assume that debtors can prove facts which they have not
24   alleged.    Associated Gen. Contractors of Cal., Inc., 459 U.S. at
25   526.
26          Moreover, debtors’ allegations in the ninth claim for
27   relief constitute insufficient legal conclusions and, therefore,
28   fail to state a claim for relief.      Thus, the bankruptcy court

                                     -32-
 1   properly dismissed this claim for relief against Appellees.
 2                           Tenth Claim For Relief
 3           The tenth claim for relief seeks various damages and costs
 4   against “Defendants” for negligent infliction of emotional
 5   distress.    In California, negligent infliction of emotional
 6   distress is a “species of negligence,” not an independent tort.
 7   Lawson v. Mgmt. Activities, Inc., 69 Cal. App. 4th 652, 656
 8   (Cal. Ct. App. 1999).    In that regard, the traditional elements
 9   of   negligence law come into play — duty, breach of duty,
10   causation, and damages.    Id.   at 657.    Further, in negligence
11   cases based on emotional distress, California courts have
12   required “something more than foreseeability . . . to raise a
13   duty of care . . . .”    Krupnick v. Hartford Accident & Indemnity
14   Co., 28 Cal. App. 4th 185, 202 (Cal. Ct. App. 1994).
15           Debtors allege that “Defendants” negligently and carelessly
16   failed to satisfy their duties, causing harm to debtors.      These
17   allegations are nothing more than insufficient conclusory
18   allegations.    Nowhere do debtors allege that Appellees owed them
19   a duty of care or whether such a duty was based on debtors’
20   relationships with Appellees or arose as a matter of law.
21   Accordingly, debtors’ TAC fails to state a claim for negligent
22   infliction of emotional distress.
23           Further, because the gravamen of this claim for relief is
24   one of professional negligence, the two-year statute of
25   limitations in CCP § 339(1) applies.       The TAC states that the
26   negligent infliction of emotional distress occurred on or before
27   debtors’ commencement of the Modular Home Litigation on July 26,
28   1999.    Therefore, their negligent infliction of emotion distress

                                      -33-
 1   claim accrued no later than July 26, 1999 and would have been
 2   barred if not filed by July 25, 2001.    Debtors initiated this
 3   claim for relief on January 2, 2008 and, therefore, this claim
 4   is time-barred.    For these reasons, the bankruptcy court
 5   properly dismissed this claim for relief against Appellees.
 6      Eleventh, Thirteenth Through Eighteenth Claims For Relief
 7           The body of the TAC contained no eleventh or thirteenth
 8   through eighteenth claims for relief.    Rather, the prayer of the
 9   TAC referred to these claims.    The eleventh claim for relief
10   sought various damages and costs against defendants Kohls, Jones
11   Sommer LLP, Jamie M. Errecart, Schools Credit Union, Cal Vet,
12   Hansen Culhane, and    Ronald L. Melluish for violation of
13   § 362(a) and (h).    The thirteenth claim for relief seeks various
14   damages and costs against Cal Vet, the Department of Housing and
15   Community Development, and the County of El Dorado, for
16   violation of Health and Safety Code § 18000, et seq.     The
17   fourteenth claim for relief seeks various damages and costs
18   against “Defendants” for breach of duty of good faith and fair
19   dealing.    The fifteenth claim for relief seeks various damages
20   and costs against “Defendants” for malicious prosecution.
21   The sixteenth claim for relief seeks various damages and costs
22   against “Defendants” for fraudulent claims under §§ 152 and
23   3571.    The seventeenth claim for relief seeks various damages and
24   costs against “Defendants” for declaratory relief.    And, the
25   eighteenth claim for relief seeks various damages and costs
26   against “Defendants” for injunctive relief.
27           It appears that debtors’ only reference to these claims was
28   in the caption of their TAC and the prayer.    These cursory

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 1   references were certainly not enough to constitute an
 2   articulation of facts that demonstrate an entitlement to relief
 3   under Iqbal.   Moreover, none of these claims contained any facts
 4   to put Appellees on notice of the asserted claims against them.
 5   Thus, the bankruptcy court properly dismissed these claims for
 6   relief against Appellees.
 7   C.   The Bankruptcy Court Did Not Abuse Its Discretion In
          Dismissing The TAC As To Appellees With Prejudice
 8
 9        Debtors were given two chances to amend their complaint,
10   accompanied by detailed instructions from the court.    See Noll v.
11   Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987)(noting that a pro se
12   litigant is entitled to notice of the deficiencies in the
13   complaint and an opportunity to amend, unless the complaint’s
14   deficiencies could not be cured by amendment).    Despite receiving
15   instructions from the bankruptcy court as to the nature of the
16   complaint’s deficiencies and how they might be corrected,
17   debtors’ TAC was once again woefully deficient.
18        Under these circumstances, we conclude that the bankruptcy
19   court did not abuse its discretion in dismissing the TAC as to
20   Appellees without leave to amend.
21   D.   Outstanding Matters
22        On July 19, 2011, H&K filed an objection to debtors’ reply
23   brief, arguing that debtors raised factual issues that were not
24   raised in their opening brief.    H&K contends that those issues
25   should be stricken or not considered because they were abandoned
26   or waived.   In response, debtors filed a motion for relief under
27   Civil Rule 60(b)(3) on the grounds that statements made in H&K’s
28   pleading amounted to “fraud upon the court.”

                                      -35-
 1        We agree with H&K that debtors’ reply brief raises new
 2   arguments with respect to allegations of fraudulent activity by
 3   H&K and alleged potential conflict of interest.   We do not
 4   consider those arguments.    See Ghahremani v. Gonzales, 498 F.3d
 5   993, 997–98 (9th Cir. 2007)(issues not addressed in an opening
 6   brief are deemed waived).    Further, we find no merit to debtors’
 7   motion under Civil Rule 60(b)(3), as the rule is inapplicable.
 8   Therefore, the motion is denied.
 9                               VI.   CONCLUSION
10        Having determined that there is no basis for reversal, we
11   AFFIRM each of the orders on appeal.
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