FILED
DEC 13 2013
1 SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
2
UNITED STATES BANKRUPTCY APPELLATE PANEL
3
OF THE NINTH CIRCUIT
4
5 In re: ) BAP No. CC-13-1014-KuBaPa
)
6 DENNIS ADRIAN VAZQUEZ, ) Bk. No. SA 09-19259-CB
)
7 Debtor. ) Adv. No. SA 09-01786-CB
______________________________)
8 )
DENNIS ADRIAN VAZQUEZ, )
9 )
Appellant, )
10 )
v. ) MEMORANDUM*
11 )
AAA BLUEPRINT & DIGITAL )
12 REPROGRAPHICS, )
)
13 Appellee. )
______________________________)
14
Submitted Without Oral Argument
15 on November 21, 2013**
16 Filed – December 13, 2013
17 Appeal from the United States Bankruptcy Court
for the Central District of California
18
Honorable Catherine E. Bauer, Bankruptcy Judge, Presiding
19
20 Appearances: Appellant Dennis Adrian Vazquez, pro se, on brief;
Mark W. Huston of Silverstein & Huston, on brief,
21 for appellee AAA Blueprint & Digital
Reprographics.
22
23
24
*
This disposition is not appropriate for publication.
25 Although it may be cited for whatever persuasive value it may
26 have (see Fed. R. App. P. 32.1), it has no precedential value.
See 9th Cir. BAP Rule 8013-1.
27
**
By order entered July 5, 2013, this appeal was deemed
28 suitable for submission without oral argument.
1 Before: KURTZ, BALLINGER*** and PAPPAS, Bankruptcy Judges.
2
3 INTRODUCTION
4 Debtor Dennis Adrian Vazquez appeals from a summary judgment
5 excepting from discharge under 11 U.S.C. § 523(a)(6)1 the
6 judgment debt he owes to AAA Blueprint & Digital Reprographics
7 (“AAA”). Vazquez also appeals from the bankruptcy court’s denial
8 of his reconsideration motion. We AFFIRM.
9 FACTS
10 Vazquez owned and controlled a document printing, copying
11 and digital reproduction business known as Alliance Reprographics
12 (“Alliance”). Jimmy Ibarra, a former employee of AAA’s, left AAA
13 and immediately went to work for Alliance. Ibarra took from AAA
14 a confidential customer price list, and he used that list to
15 successfully solicit AAA’s customers for Alliance’s benefit.
16 AAA sued Ibarra and Alliance (but not Vazquez) in the Orange
17 County Superior Court (Case No. 05CC07362) for misappropriation
18 of trade secrets, unfair competition, intentional interference
19 with contractual relations, intentional interference with
20 prospective economic advantage, conversion and constructive
21 trust. While the court ultimately found in favor of AAA on all
22 of its causes of action except for conversion, it is clear from
23 the parties’ joint list of issues and the state court’s statement
24 of decision that the lawsuit focused and hinged on the
25
***
26 Hon. Eddward P. Ballinger, Jr., United States Bankruptcy
Judge for the District of Arizona, sitting by designation.
27
1
Unless specified otherwise, all chapter and section
28 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
2
1 misappropriation of trade secrets cause of action. Ultimately,
2 the state court awarded AAA $60,000 in compensatory damages,
3 $120,000 in exemplary damages and roughly $100,000 in attorney’s
4 fees (“First State Court Judgment”). The California Court of
5 Appeal affirmed the First State Court Judgment.
6 In post-judgment settlement discussions between AAA’s
7 principal Peter Bouchier and Alliance’s principal Vazquez,
8 Vazquez told Bouchier that, if Bouchier would not agree to accept
9 $100,000 in full satisfaction of the First State Court Judgment,
10 Vazquez would close down Alliance and open a new business across
11 the street.
12 True to his word, Vazquez shortly thereafter wound down most
13 of Alliance’s operations and transferred virtually the entire
14 business, including all of its assets, to a new company named All
15 Blueprint, Inc. (“All Blueprint”).
16 Based on Vazquez’s conduct following entry of the First
17 State Court Judgment, AAA sued Vazquez, his live-in girlfriend
18 Melissa Huerta, and All Blueprint for actual and constructive
19 fraudulent transfers, and for a determination that both Alliance
20 and All Blueprint were the alter egos of Vazquez and Huerta.
21 AAA filed its alter ego and fraudulent transfer lawsuit (Case
22 No. 30-2007-00100248) in the same state court that had presided
23 over its trade secret misappropriation lawsuit.
24 After a two-day bench trial, the state court issued its
25 written findings in the form of a minute order. The state
26 court’s findings speak for themselves. Among other things, the
27 state court found:
28 Dennis Adrian Vazquez and Melissa Huerta conspired to
fraudulently transfer assets from Alliance
3
1 Reprographics Inc to All Blueprint Inc for the purpose
of hindering judgment creditor AAA from collecting its
2 judgment against Alliance.
3 Minute Order (July 27, 2009) at p. 1.
4 In support of its fraudulent transfer finding, the state
5 court also found: (1) that Vazquez threatened Bouchier that he
6 would close down Alliance and open up a new business across the
7 street unless Bouchier accepted a $100,000 settlement offer;
8 (2) that Huerta formed All Blueprint “[f]our days after the
9 statement of decision was entered” in the trade secrets
10 misappropriation lawsuit; (3) that, over the course of a few
11 months, Alliance transferred “virtually the entire business”
12 including all of its assets to All Blueprint; (4) that, while
13 Huerta supposedly owned and controlled All Blueprint and
14 supposedly was entering into competition with Alliance, in
15 reality Huerta and Vazquez jointly controlled All Blueprint,
16 which was for all practical purposes “the same company as
17 Alliance”; (5) Huerta and Vazquez formed All Blueprint and
18 transferred all of Alliance’s assets to All Blue Print “for the
19 sole purpose of hindering [AAA’s] efforts to collect its
20 judgment”; and (6) by conducting himself in this manner, “Vazquez
21 committed the wrongful act of hindering AAA in trying to collect
22 the judgment.” Id. at p. 2.
23 Based on these and related facts, the state court further
24 held that Vazquez and All Blueprint were the alter egos of
25 Alliance and that Vazquez and Huerta were the alter egos of
26 All Blueprint.
27 With respect to damages, the state court in essence ruled
28 that, because all three defendants would be held jointly and
4
1 severally liable for the full amount of the First State Court
2 Judgment by virtue of the court’s alter ego determination, the
3 First State Court Judgment would suffice to cover AAA’s
4 compensatory damages flowing from the fraudulent transfers. The
5 state court also declined to award any exemplary damages on
6 account of the fraudulent transfers because AAA presented
7 insufficient evidence to enable the state court to determine each
8 defendant’s net worth.
9 The state court entered its fraudulent transfer and alter
10 ego judgment (“Second State Court Judgment”) in July 2009, and
11 Vazquez appealed that judgment.2
12 After Vazquez filed his bankruptcy case in August 2009, AAA
13 commenced the underlying adversary proceeding objecting to
14 Vazquez’s discharge and seeking to except from discharge
15 Vazquez’s judgment debt arising from the state court judgments.
16 Initially, AAA stated several different claims for relief;
17 however, by the time AAA filed its operative complaint, its third
18 amended complaint, all that remained was a single claim for
19 relief under § 523(a)(6), seeking to except from discharge
20 Vazquez’s judgment debt as a debt arising from a willful and
21
2
The California Court of Appeal’s decision regarding the
22
Second State Court Judgment is not properly part of the record
23 before us because it issued that decision on April 2, 2013, after
the bankruptcy court ruled and while the appeal before this Panel
24 was pending. Nonetheless, it is worth noting that the California
Court of Appeal affirmed the Second State Court Judgment in its
25 entirety and that the California Supreme Court denied review. To
26 the extent relevant to our decision, we can and do take judicial
notice of the California Court of Appeal’s affirmance of the
27 Second State Court Judgment and the California Supreme Court’s
denial of review. See United States ex rel. Robinson Rancheria
28 Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir.
1992).
5
1 malicious injury. That single claim for relief explicitly relied
2 on the same events and conduct from which AAA’s state court
3 judgments arose.
4 AAA filed a summary judgment motion, in which it relied on
5 the issue preclusive effect of the state court’s findings in both
6 state court lawsuits. Vazquez opposed the motion, but the
7 bankruptcy court ruled in favor of AAA and granted its summary
8 judgment motion. In essence, the bankruptcy court held that the
9 issue preclusive effect of the state court’s actual fraudulent
10 transfer findings established that Vazquez’s judgment debt arose
11 from a willful and malicious injury. In addition to this
12 holding, the bankruptcy court apparently adopted in its entirety
13 AAA’s proposed statement of uncontroverted facts and conclusions
14 of law, which statement in turn was largely derived from the
15 findings in the state court lawsuits.
16 After the bankruptcy court entered its order granting
17 summary judgment, Vazquez timely filed a motion for
18 reconsideration.3 In that motion, Vazquez argued for the first
19 time that issue preclusion was not applicable to the Second State
20 Court Judgment because that judgment was the subject of a pending
21 appeal. This argument was contrary to Vazquez’s position in
22 response to AAA’s summary judgment motion. Indeed, in his
23
3
24 Neither party included in their excerpts of record copies
of the papers they filed in relation to the reconsideration
25 motion. Nor did they include a copy of the court’s order denying
26 the reconsideration motion. Nonetheless, we have reviewed these
documents by accessing the bankruptcy court’s electronic docket.
27 We can and do take judicial notice of the filing and contents of
these documents. See O'Rourke v. Seaboard Sur. Co. (In re E.R.
28 Fegert, Inc.), 887 F.2d 955, 957–58 (9th Cir. 1989).
6
1 opposition to the summary judgment motion, Vazquez had explicitly
2 conceded that the finality element for issue preclusion had been
3 satisfied.
4 The bankruptcy court denied Vazquez’s reconsideration
5 motion, and Vazquez timely filed a notice of appeal, referencing
6 the summary judgment but not referencing the denial of the
7 reconsideration motion.
8 JURISDICTION
9 The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
10 §§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C.
11 § 158.
12 ISSUES
13 Did the bankruptcy court commit reversible error by applying
14 issue preclusion and granting summary judgment against Vazquez?
15 Did the bankruptcy court abuse its discretion when it denied
16 Vazquez’s reconsideration motion?
17 STANDARDS OF REVIEW
18 We review de novo the bankruptcy court’s grant of summary
19 judgment. Boyajian v. New Falls Corp. (In re Boyajian), 564 F.3d
20 1088, 1090 (9th Cir. 2009); Lopez v. Emergency Serv. Restoration,
21 Inc. (In re Lopez), 367 B.R. 99, 103 (9th Cir. BAP 2007).
22 The nondischargeability of a particular debt is a mixed
23 question of law and fact also subject to de novo review. Peklar
24 v. Ikerd (In re Peklar), 260 F.3d 1035, 1037 (9th Cir. 2001);
25 Honkanen v. Hopper (In re Honkanen), 446 B.R. 373, 378 (9th Cir.
26 BAP 2011).
27 We also review de novo the bankruptcy court's determination
28 that issue preclusion is available. In re Lopez, 367 B.R. at
7
1 103; Kelly v. Okoye (In re Kelly), 182 B.R. 255, 258 (9th Cir.
2 BAP 1995), aff'd, 100 F.3d 110 (9th Cir. 1996).
3 Once we determine that issue preclusion is available, we
4 review the bankruptcy court’s decision to apply it for an abuse
5 of discretion. In re Lopez, 367 B.R. at 103. We also review for
6 an abuse of discretion the bankruptcy court’s denial of the
7 reconsideration motion. Grantham v. Cory (In re Flamingo 55,
8 Inc.), 646 F.3d 1253, 1254 n.3 (9th Cir. 2011); First Ave. W.
9 Bldg. LLC v. James (In re OneCast Media, Inc.), 439 F.3d 558, 561
10 (9th Cir. 2006).
11 A bankruptcy court abuses its discretion if it does not
12 apply the correct legal rule or if its findings of fact are
13 illogical, implausible or without support in the record. United
14 States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)(en banc).
15 DISCUSSION
16 A. The Summary Judgment Ruling
17 A bankruptcy court may grant a summary judgment motion when
18 the pleadings and evidence demonstrate “that there is no genuine
19 issue as to any material fact and that the moving party is
20 entitled to a judgment as a matter of law.” Celotex Corp. v.
21 Catrett, 477 U.S. 317, 322 (1986). All facts genuinely in
22 dispute must be viewed “in the light most favorable to the
23 non-moving party.” Scott v. Harris, 550 U.S. 372, 380 (2007).
24 And all reasonable inferences that can be drawn in the non-moving
25 party’s favor must be so drawn. Id. at 378.
26 Issue preclusion applies in actions seeking to except a debt
27 from discharge. Grogan v. Garner, 498 U.S. 279, 284 (1991). We
28 apply California issue preclusion law to determine the preclusive
8
1 effect of the two California state court judgments at issue
2 herein. Gayden v. Nourbakhsh (In re Nourbakhsh), 67 F.3d 798,
3 800 (9th Cir. 1995). Under California issue preclusion law, the
4 proponent must establish the following:
5 1) the issue sought to be precluded . . . must be
identical to that decided in the former proceeding;
6 2) the issue must have been actually litigated in the
former proceeding; 3) it must have been necessarily
7 decided in the former proceeding; 4) the decision in
the former proceeding must be final and on the merits;
8 and 5) the party against whom preclusion is being
sought must be the same as the party to the former
9 proceeding.
10 In re Honkanen, 446 B.R. at 382; Lucido v. Super. Ct., 51 Cal.3d
11 335, 341 (1990).
12 In addition, before applying issue preclusion, the
13 bankruptcy court also must determine “whether imposition of issue
14 preclusion in the particular setting would be fair and consistent
15 with sound public policy." Khaligh v. Hadaegh (In re Khaligh),
16 338 B.R. 817, 824-25 (9th Cir. BAP 2006) (citing Lucido,
17 51 Cal.3d at 342-43).
18 On appeal, Vazquez argues that the bankruptcy court should
19 not have applied issue preclusion because the issues decided in
20 the state court litigation were not identical to the dispositive
21 factual issues underlying AAA’s § 523(a)(6) claim – whether
22 Vazquez’s conduct was both “willful” and “malicious” within the
23 meaning of § 523(a)(6). We disagree. The state court’s
24 fraudulent transfer determination and its associated findings
25 established both willfulness and maliciousness for purposes of
26 nondischargeability under § 523(a)(6).
27 Section 523(a)(6) excepts from discharge debts "for willful
28 and malicious injury by the debtor to another entity or to the
9
1 property of another entity." Both willfulness and maliciousness
2 must be proven in order to apply § 523(a)(6). Ormsby v. First
3 Am. Title Co. of Nev. (In re Ormsby), 591 F.3d 1199, 1206 (9th
4 Cir. 2010).
5 In the context of § 523(a)(6), a debtor’s conduct is willful
6 only if he or she actually intended to cause injury or actually
7 believed that injury was substantially certain to occur. Id.;
8 In re Khaligh, 338 B.R. at 831. Both aspects of the willfulness
9 standard inquire into the debtor’s subjective state of mind, and
10 both can be proven by circumstantial evidence. Carrillo v. Su
11 (In re Su), 290 F.3d 1140, 1144-47 & n.6. (9th Cir. 2002);
12 In re Khaligh, 338 B.R. at 831.
13 In the state court litigation, AAA stated a cause of action
14 against Vazquez for actual fraudulent transfer. In that cause of
15 action, AAA alleged that, by way of his transfer of substantially
16 all of Alliance’s assets to All Blueprint, Vazquez actually
17 intended to hinder AAA’s efforts to collect on the First State
18 Court Judgment. These allegations are consistent with the
19 elements for an actual fraudulent transfer under Cal. Civ. Code
20 § 3439.04(a)(1), which applies to transfers made by a debtor
21 “[w]ith actual intent to hinder, delay, or defraud” one of its
22 creditors. Id.; see also Beverly v. Wolkowitz (In re Beverly),
23 374 B.R. 221, 235 (9th Cir. BAP 2007).
24 Moreover, the state court explicitly determined that
25 Vazquez, in concert with Huerta, fraudulently transferred
26 Alliance’s assets, “virtually the entire business,” to All
27 Blueprint “for the sole purpose of hindering [AAA’s] efforts to
28 collect its judgment.” State Court Minute Order (July 27, 2009),
10
1 at pp. 1-2. We agree with the bankruptcy court that the state
2 court’s finding regarding Vazquez’s subjective motive for
3 transferring Alliance’s assets meets § 523(a)(6)’s willfulness
4 requirement. In other words, the state court’s finding that
5 Vazquez sought to hinder AAA’s collection efforts is tantamount
6 to a finding that Vazquez intended to harm AAA by transferring
7 all of Alliance’s assets to All Blueprint.
8 In turn, with respect to malice, a debtor’s conduct is
9 malicious for purposes of § 523(a)(6) when the conduct “‘involves
10 (1) a wrongful act, (2) done intentionally, (3) which necessarily
11 causes injury, and (4) is done without just cause or excuse.’”
12 In re Ormsby, 591 F.3d at 1207 (quoting Petralia v. Jercich
13 (In re Jercich), 238 F.3d 1202, 1209 (9th Cir. 2001)). “Malice
14 may be inferred based on the nature of the wrongful act.” Id.
15 Here, the state court explicitly found that Vazquez’s
16 conduct was wrongful. This wrongfulness, furthermore, is self-
17 evident given the very nature of Vazquez’s conduct in
18 transferring Alliance’s assets for the purpose of hindering AAA.
19 The state court also found his conduct intentional. The
20 intentional nature of Vazquez’s conduct is reflected in the state
21 court’s account of Vazquez conspiring and plotting with Huerta to
22 interfere with AAA’s collection efforts. That the act of
23 hindering AAA’s collection efforts necessarily harmed AAA also is
24 self-evident.
25 Nor is there any genuine doubt that Vazquez had no just
26 cause or excuse for his conduct. He apparently asserted in the
27 state court that he transferred Alliance’s assets to All
28 Blueprint because he desired to set up Huerta in a reprographics
11
1 business separate and independent from Alliance, but the state
2 court in its findings unequivocally rejected this assertion. In
3 any event, even if there had been any truth to this assertion, it
4 would not as a matter of law constitute just cause or excuse for
5 Vazquez’s wrongful acts, given Vazquez’s specific intent to harm
6 AAA. See In re Sicroff, 401 F.3d at 1107 (holding that specific
7 intent to injure negated proffered just cause or excuse for the
8 debtor’s wrongful conduct); see also Murray v. Bammer
9 (In re Bammer), 131 F.3d 788 (9th Cir. 1997) (holding that
10 debtor’s subjective desire to help his mother out of her
11 financial difficulties was not just cause or excuse for debtor’s
12 knowing participation in fraud against mother’s creditors).
13 Vazquez has not raised on appeal any arguments implicating
14 any public policy concerns associated with the bankruptcy court’s
15 application of issue preclusion against him. See generally
16 In re Khaligh, 338 B.R. at 824-25. Nor has our review of the
17 record brought to our attention any such policy concerns. To the
18 contrary, the bankruptcy court’s application of issue preclusion
19 here strikes us as a commonplace and appropriate usage of the
20 doctrine. Thus, we need not and will not remand for a public
21 policy finding. See First Yorkshire Holdings, Inc. v. Pacifica
22 L 22, LLC. (In re First Yorkshire Holdings, Inc.), 470 B.R. 864,
23 871 (9th Cir. BAP 2012) (citing Simeonoff v. Hiner, 249 F.3d 883,
24 891 (9th Cir. 2001)) (stating that remand for further findings is
25 unnecessary when the existing findings and record provide us with
26 a “full understanding” of the questions subject to review).
27 Vazquez makes only one other argument in his appeal brief
28 implicating the bankruptcy court’s summary judgment ruling. He
12
1 argues that he was not aware that the state court’s fraudulent
2 transfer and intent findings might serve as grounds for excepting
3 his debt to AAA from discharge under § 523(a)(6). We are
4 perplexed by Vazquez’s claimed ignorance that the state court’s
5 fraudulent transfer and intent findings were in play. He was
6 represented by counsel during the entire course of the adversary
7 proceeding, and the findings in question are featured prominently
8 in both AAA’s third amended complaint and in AAA’s summary
9 judgment papers.
10 While difficult to follow, Vazquez seems to believe that the
11 state court’s fraudulent transfer and intent findings could not
12 properly serve as the factual predicate for an exception to
13 discharge under § 523(a)(6) unless AAA’s nondischargeability
14 complaint also contained a fraudulent transfer claim for relief.
15 Suffice it to say that we are not aware of any law or rule of
16 procedure supporting Vazquez’s novel belief.
17 In sum, Vazquez has not pointed us to any error in the
18 bankruptcy court’s determination that issue preclusion could be
19 applied or to any abuse of discretion arising from the bankruptcy
20 court’s decision to impose issue preclusion as a basis for
21 granting AAA’s summary judgment motion. Accordingly, we will
22 uphold the bankruptcy court’s summary judgment ruling. See In re
23 Khaligh, 338 B.R. at 831-32.4
24
25
4
The state court’s misappropriation of trade secrets
26 findings and its alter ego findings possibly could serve as an
alternate ground for affirming the bankruptcy court’s issue
27
preclusion and summary judgment rulings. However, in light of
28 our decision based on the preclusive effect of the state court’s
fraudulent transfer findings, we do not need to reach this issue.
13
1 B. The Denial of the Reconsideration Motion
2 Vazquez also argues in his appeal brief that the Second
3 State Court Judgment was not a final decision for issue
4 preclusion purposes because it was the subject of an appeal at
5 the time the bankruptcy court granted summary judgment. Under
6 California law, a judgment will not be given preclusive effect
7 until the adverse party’s appeal rights have been exhausted.
8 See Abelson v. Nat. Union Fire Ins. Co., 28 Cal.App.4th 776, 787
9 (1994)(citing cases).
10 Vazquez raised this finality argument for the first time in
11 his motion for reconsideration, which he filed after the
12 bankruptcy court issued its summary judgment ruling.
13 Consequently, this argument does not directly implicate or call
14 into question the bankruptcy court’s summary judgment ruling.
15 The record reflects that neither party advised the bankruptcy
16 court at or before the time it ruled on AAA’s summary judgment
17 motion that there was a pending state court appeal from the
18 Second State Court Judgment. To the contrary, Vazquez’s summary
19 judgment opposition explicitly conceded, without discussion, the
20 issue of finality. We cannot review the summary judgment ruling
21 based on facts not presented to the bankruptcy court at or before
22 the time it rendered its ruling. See Oyama v. Sheehan
23 (In re Sheehan), 253 F.3d 507, 512 n.5 (9th Cir. 2001); Kirschner
24 v. Uniden Corp. of Am., 842 F.2d 1074, 1077–78 (9th Cir. 1988).
25 As a result, Vazquez’s finality argument only is relevant to
26 our review of the bankruptcy court’s denial of Vazquez’s
27 reconsideration motion. But before we conduct that review, as a
28 threshold matter, we note that it is questionable whether Vazquez
14
1 is entitled to that review, because his notice of appeal only
2 referenced the summary judgment ruling.5
3 It also is far from clear that the parties have provided us
4 with a record sufficient to enable us to conduct a meaningful
5 review of the order denying reconsideration. That order
6 explicitly based its denial on “the reasons stated on the record
7 in open court.” And yet we have no idea what reasons or findings
8 the bankruptcy court relied upon in denying the reconsideration
9 motion because neither party obtained the transcript from the
10 hearing on the reconsideration motion. This makes our task of
11 reviewing the denial of the reconsideration motion virtually
12 impossible, particularly under the abuse of discretion standard
13 of review, which requires us to consider the law applied by the
14 bankruptcy court and its factual findings. Hinkson, 585 F.3d at
15 1262. Under these circumstances, we may exercise our discretion
16 to summarily affirm the denial of the reconsideration motion.
17 See Kyle v. Dye (In re Kyle), 317 B.R. 390, 393 (9th Cir. BAP
18 2004), aff'd, 170 Fed. Appx. 457 (9th Cir. 2006).
19 Even if we were to attempt to conduct a review of the denial
20 of the reconsideration motion, we are convinced that Vazquez
21 would not prevail. Having accessed the bankruptcy court’s
22 adversary proceeding docket and having reviewed the parties’
23 papers relating to the reconsideration motion, Vazquez in essence
24 moved for reconsideration based on the “new evidence” of the
25 pending state court appeal. When, as here, the so-called newly
26
5
Nonetheless, we acknowledge that notices of appeal should
27
be liberally construed, particularly those filed by pro se
28 appellants. Smith v. Barry, 502 U.S. 244, 248–50 (1992); Brannan
v. United States, 993 F.2d 709 (9th Cir. 1993).
15
1 discovered evidence (Vazquez’s knowledge of his own pending state
2 court appeal) was or should have been readily available to the
3 movant before the trial court issued the ruling in question, the
4 trial court properly could deny reconsideration. See Far Out
5 Prods., Inc. v. Oskar, 247 F.3d 986, 997-98 (9th Cir. 2001).
6 As a separate and independent ground for affirming the
7 denial of the reconsideration motion, any error by the bankruptcy
8 court with respect to the denial of the reconsideration motion
9 was harmless, and we must ignore harmless error. See Van Zandt
10 v. Mbunda (In re Mbunda), 484 B.R. 344, 355 (9th Cir. BAP 2012).
11 As set forth above, the reconsideration motion focused on
12 the pending state court appeal from the Second State Court
13 Judgment. Any error concerning the denial of the reconsideration
14 motion was harmless because, after the bankruptcy court entered
15 judgment, the California Court of Appeal affirmed the Second
16 State Court Judgment, and the California Supreme Court denied
17 review. Consequently, even if we were to reverse based on the
18 formerly non-final nature of the Second State Court Judgment
19 under California issue preclusion law, that judgment is now final
20 for issue preclusion purposes, and the bankruptcy court would be
21 free upon remand to re-enter summary judgment based on issue
22 preclusion.
23 The interests of justice would not be served by our
24 remanding just so the bankruptcy court could grant summary
25 judgment again given that the former finality defect has now been
26 cured. See generally Nash v. Clark Cnty. Dist. Atty's. Office
27 (In re Nash), 464 B.R. 874, 879 (9th Cir. BAP 2012) (declining to
28 remand when such remand would not serve the interests of
16
1 justice).
2 CONCLUSION
3 For the reasons set forth above, we AFFIRM the bankruptcy
4 court’s grant of summary judgment against Vazquez and its denial
5 of Vazquez’s reconsideration motion.
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