FILED
NOT FOR PUBLICATION
MAY 15 2019
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: JAMES DONZIL ROBERTS, Sr.; No. 17-60086
DEENA WALDMAN ROBERTS,
BAP No. 17-1010
Debtors,
------------------------------ MEMORANDUM*
JAMES DONZIL ROBERTS, Sr.,
Appellant,
v.
MICHAEL BARNES; CALIFORNIA
FARMS INVESTORS, LLC,
Appellees.
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Taylor, Lafferty III, and Spraker, Bankruptcy Judges, Presiding
Submitted May 13, 2019**
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: NGUYEN and OWENS, Circuit Judges, and ANTOON,*** District Judge.
James Roberts appeals from the decision of the Bankruptcy Appellate Panel
(“BAP”) affirming the judgment of the bankruptcy court in favor of Michael
Barnes and California Farms Investors, LLC (collectively, “Barnes”). We have
jurisdiction under 28 U.S.C. § 158(d), and we affirm.
The bankruptcy court entered judgment for Barnes in the amount of
$825,000. Roberts challenges that judgment on two grounds, arguing first that the
amount of the judgment should be offset by the value of the collateral Barnes
briefly possessed, and second that Barnes’ remedies are limited by California
Commercial Code section 9625 because Barnes allegedly disposed of the collateral
in a commercially unreasonable manner. Roberts concedes that he failed to present
these arguments to the bankruptcy court but argues that we have discretion to
consider them because (1) “review is required to ‘prevent a miscarriage of justice
or to preserve the integrity of the judicial process’” or (2) “the issue presented is
purely one of law and either does not depend on the factual record developed
below, or the pertinent record has been fully developed.” Mano-Y&M, Ltd. v.
Field (In re Mortg. Store, Inc.), 773 F.3d 990, 998 (9th Cir. 2014) (quoting In re
***
The Honorable John Antoon II, United States District Judge for the
Middle District of Florida, sitting by designation.
2
Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010)). We
agree with the BAP that neither of these exceptions applies here, and therefore we
do not reach the merits of Roberts’ challenges to the bankruptcy court’s judgment.
1. Roberts contends that the miscarriage of justice exception applies
because Barnes has recovered twice for the same loss – once by taking possession
of the collateral and a second time by the bankruptcy court’s judgment. He relies
on case law suggesting that “double recovery” constitutes a miscarriage of justice.
See, e.g., Experience Hendrix L.L.C. v. Hendrixlicensing.com Ltd, 762 F.3d 829,
841-42 (9th Cir. 2014).
This case law is distinguishable, however. First, Barnes has not recovered
more than once. Although he briefly took possession of the collateral, he was
forced to assign it to other creditors. The $825,000 judgment therefore places
Barnes in the position he would have been in had Roberts not fraudulently induced
him to invest. Second, in the “double recovery” cases upon which Roberts relies,
the judgments were erroneous. Here, by contrast, the bankruptcy court’s judgment
was correct based on the claims and defenses presented. The mere possibility that
Roberts could have raised other defenses at trial, and that those defenses might
have resulted in a smaller judgment, does not convert the judgment entered by the
bankruptcy court into a miscarriage of justice.
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2. Roberts’ reliance on the exception for pure questions of law also fails.
As Roberts concedes, the offset and commercial reasonableness defenses he raises
for the first time on appeal turn on questions of fact that were not raised or
resolved at trial, such as (1) the value of the collateral, (2) the extent of the
venture’s liability to the other creditors and (3) whether Barnes disposed of the
collateral in a commercially reasonable manner. These defenses, therefore, do not
raise pure questions of law. See In re Mercury Interactive Corp. Sec. Litig., 618
F.3d at 993.
AFFIRMED.
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