NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 16 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: DARIN DAVIS, No. 19-60036
Debtor, BAP No. 18-1326
------------------------------
MEMORANDUM*
ASPHALT PROFESSIONALS, INC.,
Appellant,
v.
DARIN DAVIS,
Appellee.
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Faris, Lafferty III, and Kurtz, Bankruptcy Judges, Presiding
Argued and Submitted June 1, 2020
Pasadena, California
Before: CALLAHAN and NGUYEN, Circuit Judges, and R. COLLINS,** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Raner C. Collins, United States District Judge for the
District of Arizona, sitting by designation.
Asphalt Professionals, Inc. (“API”) appeals from the Bankruptcy Appellate
Panel’s (“BAP”) judgment affirming the bankruptcy court’s order awarding
attorney’s fees to debtor Darin Davis. Davis prevailed in an adversary proceeding
in which API sought a determination that Davis’s debt arising from state court
litigation was nondischargeable due to fraud. See 11 U.S.C. § 523(a)(2)(A). We
have jurisdiction under 28 U.S.C. § 158(d)(1). We independently review the
bankruptcy court’s decision. In re Hoopai, 581 F.3d 1090, 1095 (9th Cir. 2009).
Reviewing the bankruptcy court’s legal conclusions de novo, its factual findings
for clear error, and its fee award for abuse of discretion, see id., we affirm the
BAP’s judgment.
1. API contends that Davis cannot rely on the contractual provision for
attorney’s fees because it merged into the state court judgment on API’s contract-
based claims.1 API acknowledges that it did not raise this contention before the
BAP or the bankruptcy court. We “normally decline to entertain such forfeited
arguments,” Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1978
(2016), and there is no reason to exercise our discretion here. Regardless,
1
We assume without deciding that the state court’s interlocutory judgment
following phase one of the trifurcated proceedings and statement of decision
imposing alter ego liability on Davis following phase two are final as to API and
Davis for res judicata purposes. But see API v. Emaron Homes, LLC, No.
B248837, 2014 WL 787024, at *2–3 (Cal. Ct. App. Feb. 27, 2014) (“Appellants
prevailed on the alter ego phase, but that was not the final judgment.”).
2
“[m]erger is an aspect of the doctrine of res judicata,” and only “the particular
cause or causes of action on the contract are merged into the judgment, not the
contract itself,” so merger “does not bar a different cause of action . . . on the same
contract.” Gietzen v. Covenant RE Mgmt., Inc., 253 Cal. Rptr. 3d 97, 100 (Ct.
App. 2019), review denied, No. S258934 (Cal. Jan. 2, 2020).
2. “As a general rule, [contractual] attorney fees are awarded only when
the lawsuit is between signatories to the contract.” Cargill, Inc. v. Souza, 134 Cal.
Rptr. 3d 39, 42 (Ct. App. 2011). One exception “to redress fraud, protect the rights
of third persons, or prevent a palpable injustice,” is the alter ego doctrine. Brenelli
Amedeo, S.P.A. v. Bakara Furniture, Inc., 35 Cal. Rptr. 2d 348, 355 (Ct. App.
1994). An alter ego finding “makes the alter ego liable for the obligations of the
corporation.” Leek v. Cooper, 125 Cal. Rptr. 3d 56, 63 (Ct. App. 2011). Because
“an alter ego is one who, effectively, is the corporation,” he is “entitled to the
benefit of the [contractual] provisions” as well. Rowe v. Exline, 63 Cal. Rptr. 3d
787, 793–94 (Ct. App. 2007) (quoting Dryer v. L.A. Rams, 709 P.2d 826, 834 (Cal.
1985)); see also Victrola 89, LLC v. Jaman Props. 8 LLC, 260 Cal. Rptr. 3d 1, 13
(Ct. App. 2020) (justifying alter ego’s entitlement to enforce contractual provision
on theory of equitable estoppel). Therefore, the bankruptcy court did not err in
awarding attorney’s fees to Davis even though the nondischargeability proceeding
was not “on a contract.” Cal. Civ. Code § 1717(a).
3
AFFIRMED.
4