In re: Gloria Dean Wells

FILED
OCT 10 2017
1 NOT FOR PUBLICATION
SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
2 OF THE NINTH CIRCUIT

3 UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
4
5 In re: ) BAP No. CC-16-1319-LSTa
)
6 GLORIA DEAN WELLS, ) Bk. No. 2:15-bk-27834-BB
)
7 Debtors. )
)
8 MICHAEL GRIFFITH, )
)
9 Appellant, )
)
10 v. ) AMENDED MEMORANDUM*
)
11 GLORIA DEAN WELLS, )
)
12 Appellee. )
)
13
Argued and Submitted on September 29, 2017
14 at Pasadena, California
15 Filed - October 10, 2017
16 Appeal from the United States Bankruptcy Court
for the Central District of California
17
Honorable Sheri Bluebond, Chief Bankruptcy Judge, Presiding
18 _________________________
19 Appearances: Appellant Michael Griffith appeared pro se; Barry
R. Wegman argued for Appellee.
20 _________________________
21 Before: LAFFERTY, SPRAKER, and TAYLOR, Bankruptcy Judges.
22
23
24
25
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 8024-1.
 1 INTRODUCTION
2 After an evidentiary hearing to determine the fair market
3 value of Debtor’s residence for purposes of avoiding Appellant
4 Michael Griffith’s judgment lien, the bankruptcy court found that
5 the residence was worth $360,000 as of the petition date. On the
6 basis of that valuation, and after deducting consensual liens and
7 Debtor’s homestead exemption, the court found that Mr. Griffith’s
8 lien impaired Debtor’s homestead exemption and entered an order
9 avoiding the lien. On appeal, Mr. Griffith argues that he was
10 denied due process and challenges the bankruptcy court’s
11 valuation finding. Having thoroughly reviewed the record, we
12 find no denial of due process or clear error in the bankruptcy
13 court’s valuation finding. Accordingly, we AFFIRM.
14 FACTS
15 Debtor Gloria Dean Wells filed her chapter 71 petition on
16 November 20, 2015. On Schedule A, Debtor listed her residence on
17 Cherrywood Avenue in Los Angeles (the “Property”) with a value of
18 $325,000. On Schedule D, Debtor listed a consensual lien in
19 favor of Chase Bank in the amount of $250,313.99. And on
20 Schedule C, Debtor claimed a homestead exemption of $175,000
21 under Cal. Civ. Proc. Code § 704.730(a)(3).
22 About a month later, Debtor filed a motion under
23 § 522(f)(1)(A) (the “Motion”) to avoid Mr. Griffith’s judgment
24
25
1
26 Unless specified otherwise, all chapter and section
references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all
27 “Rule” references are to the Federal Rules of Bankruptcy
Procedure, and all “Civil Rule” references are to the Federal
28 Rules of Civil Procedure.

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 1 lien in the amount of $40,527.14.2 Debtor’s declaration in
2 support of the Motion contained a calculation showing that
3 deducting the consensual lien and homestead exemption from the
4 fair market value of $325,000 left no available non-exempt equity
5 to secure Mr. Griffith’s judgment lien. As evidence of value,
6 Debtor attached to her motion the declaration of appraiser Todd
7 Turner, which authenticated a May 26, 2015 appraisal establishing
8 a fair market value of $325,000.
9 Mr. Griffith filed an opposition, arguing that the May 26
10 appraisal was outdated and requesting that a “third party
11 appraisal” be performed before the court ruled on the motion.
12 Mr. Griffith attached to his opposition a comparative market
13 analysis dated January 7, 2016, which estimated the value of the
14 Property at between $617,000 and $645,000.
15 At the initial hearing, the bankruptcy court, after noting
16 that Mr. Griffith had initially been served at the wrong address,
17 gave him additional time to hire an appraiser to value the
18 Property. The court continued the matter for a status
19 conference. Mr. Griffith thereafter filed a declaration and an
20 appraisal performed by Lawrence Walsh dated April 13, 2016, which
21 reflected a fair market value of $505,000. At the subsequent
22 status conference, the bankruptcy court pointed out to the
23 parties that neither’s appraisal was adequate for the court to
24 determine the fair market value of the Property as of the
25
26 2
Debtor filed three additional motions to avoid judgment
27 liens against her residence. None of those lienholders objected
to the requested relief, and the court entered orders avoiding
28 those liens.

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 1 petition date of November 20, 2015. The court continued the
2 matter again to give the parties time either to hire an agreed-
3 upon independent appraiser or to have their respective appraisers
4 adjust their numbers to reflect the value as of the petition
5 date.
6 Thereafter, Debtor filed a new declaration from Mr. Turner
7 and a new appraisal as of the petition date, which opined that
8 the Property’s value as of that date was $360,000. Mr. Griffith
9 also filed an updated appraisal, supported by Mr. Walsh’s
10 declaration, reflecting a petition date value of $470,000.
11 The bankruptcy court set an evidentiary hearing. At that
12 hearing, both appraisers testified as to their credentials and
13 methodology and were examined by Debtor’s counsel, Mr. Griffith,
14 and the court. Both appraisers testified that the Property
15 needed repairs as a result of deferred maintenance. The
16 difference in their respective appraisals appeared to be
17 primarily due to differences in the deductions made for that
18 deferred maintenance. Mr. Turner concluded, based upon a May
19 2015 inspection, that the Property was in “fair to poor”
20 condition and estimated a cost of $50,000-$100,000 for needed
21 repairs. Mr. Walsh, on the other hand, based on an inspection
22 performed on June 23, 2016, concluded that the Property was in
23 average to fair condition and estimated costs to repair totaling
24 $8,000. Mr. Walsh testified that he did not see all of the
25 damage noted by Mr. Turner and displayed in the color photographs
26 included in Mr. Turner’s appraisal: termite damage, dry rot,
27 holes in the ceiling, damage to the kitchen, and leaking pipes.
28 At the conclusion of testimony, the bankruptcy court found

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 1 that the evidentiary record was sufficient to support
2 Mr. Turner’s appraisal and that the Property was worth $360,000
3 as of the petition date. On the basis of that value, the
4 bankruptcy court concluded that it was appropriate to avoid
5 Mr. Griffith’s judicial lien against the Property as impairing
6 Debtor’s homestead exemption.
7 Mr. Griffith timely appealed.
8 JURISDICTION
9 The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
10 §§ 1334 and 157(b)(2)(K). We have jurisdiction under 28 U.S.C.
11 § 158.
12 ISSUES
13 Whether the bankruptcy court denied Mr. Griffith due
14 process.
15 Whether the bankruptcy court erred in granting Debtor’s
16 motion to avoid Mr. Griffith’s judgment lien under
17 § 522(f)(1)(A).
18 STANDARDS OF REVIEW
19 Whether an appellant’s due process rights were violated is a
20 question of law that we review de novo. DeLuca v. Seare
21 (In re Seare), 515 B.R. 599, 615 (9th Cir. BAP 2014); see HSBC
22 Bank USA, Nat’l Ass’n v. Blendheim (In re Blendheim), 803 F.3d
23 477, 497 (9th Cir. 2015) (“Whether adequate notice has been given
24 for the purposes of due process is a mixed question of law and
25 fact that we review de novo.”).
26 A fair market value determination is a finding of fact that
27 we review for clear error. Arnold & Baker Farms v. United States
28 (In re Arnold & Baker Farms), 85 F.3d 1415, 1421 (9th Cir. 1996).

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 1 A factual finding is clearly erroneous only if it is illogical,
2 implausible or without support in the record. Retz v. Samson
3 (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010). Where there
4 are two permissible views of the evidence, the factfinder’s
5 choice between them cannot be clearly erroneous. Anderson v.
6 City of Bessemer City, N.C., 470 U.S. 564, 574 (1985).
7 DISCUSSION
8 Mr. Griffith argues that (i) the bankruptcy court should
9 have dismissed Debtor’s case for failure to serve notice of the
10 commencement of the case on Mr. Griffith at his correct address;
11 (ii) the court should have denied Debtor’s Motion for the same
12 reason; (iii) the court should have denied the Motion because
13 Debtor’s appraisal was outdated; (iv) the court erred in not
14 permitting Debtor to present evidence showing that property
15 values in the relevant neighborhood were increasing; and (v) the
16 court erred in “allowing” a $125,000 adjustment to the value of
17 the Property for costs of rehabilitation.
18 We make reasonable allowance for pro se litigants and
19 construe their papers liberally. Ozenne v. Bendon
20 (In re Ozenne), 337 B.R. 214, 218 (9th Cir. BAP 2006). At the
21 same time, we do not ordinarily consider arguments not raised in
22 the trial court sufficiently for the court to have ruled on it.
23 O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d
24 955, 957 (9th Cir. 1989). In balancing these principles, we
25 interpret Mr. Griffith’s arguments as falling into two categories
26 and will address both of them: first, that Mr. Griffith was
27 denied due process; and second, that the bankruptcy court clearly
28 erred in finding that the Property was worth $360,000.

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 1 A. The bankruptcy court did not deny Mr. Griffith due process.
2 Generally speaking, a party must receive sufficient notice
3 of any potentially adverse action and the opportunity to be
4 heard. See Tennant v. Rojas (In re Tennant), 318 B.R. 860, 870
5 (9th Cir. BAP 2004). Here, although the Motion and supporting
6 documents were initially served on Mr. Griffith at an incorrect
7 address, Mr. Griffith learned of the bankruptcy filing and
8 Debtor’s Motion, filed an opposition to the Motion, and
9 thereafter actively participated in the proceedings. The record
10 does not reflect that he ever raised inadequate notice as a
11 ground for either dismissal of the bankruptcy case or denial of
12 the Motion.
13 1. Improper notice of bankruptcy filing
14 Mr. Griffith argues that the bankruptcy court should have
15 dismissed Debtor’s bankruptcy case because Debtor had listed the
16 wrong address for Mr. Griffith on the master mailing matrix.3
17 Mr. Griffith alleges that because of this error, he was not
18 notified timely of the § 341 meeting of creditors or the
19 pertinent deadlines and was thus “unable to exercise his
20 fundamental rights in regard to deadlines, timing to seek legal
21 advice, raise objections and . . . obtain competent counsel.”
22 Mr. Griffith states that he learned of the bankruptcy filing in
23 early January 2016.
24 The only matter before us in this appeal is the bankruptcy
25 court’s ruling on Debtor’s Motion. As noted, Mr. Griffith did
26
27
3
As pointed out by Debtor, the address used for service on
28 Mr. Griffith was the address listed on the abstract of judgment.

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 1 not seek relief in the bankruptcy court on grounds of inadequate
2 notice of the bankruptcy case. If Mr. Griffith believed he was
3 prejudiced by the lack of this notice, he should have raised the
4 issue before the bankruptcy court. Because he failed to do so,
5 we cannot consider this due process argument on appeal.4
6 2. Improper notice of the Motion
7 Mr. Griffith also argues that because the Motion was
8 initially served at an incorrect address the bankruptcy court
9 should have denied it; he contends that the bankruptcy court
10 lacked personal jurisdiction over him. Again, Mr. Griffith did
11 not raise this issue in the bankruptcy court, and a general
12 appearance or responsive pleading that fails to dispute personal
13 jurisdiction waives any defect in service. Benny v. Pipes,
14 799 F.2d 489, 492 (9th Cir. 1986), opinion amended, 807 F.2d 1514
15 (9th Cir. 1987) (citing Civil Rule 12(h), applicable in
16 bankruptcy via Rule 7012). A defendant may also waive the
17 defense as a result of his course of conduct during litigation.
18 Peterson v. Highland Music, Inc., 140 F.3d 1313, 1318 (9th Cir.
19 1998). Here, Mr. Griffith filed an opposition and appeared and
20 participated in all of the hearings on the Motion without raising
21 the issue of personal jurisdiction; he thus waived the issue.
22 As for due process generally, at the initial hearing, the
23 bankruptcy court acknowledged that Mr. Griffith had not been
24 served at the correct address and continued the hearing to give
25
26 4
Mr. Griffith’s reply brief in this appeal focuses almost
27 entirely on an argument that Debtor filed her bankruptcy in bad
faith, an issue that was never raised before the bankruptcy
28 court.

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 1 him time to hire an appraiser. The court continued the hearing
2 two more times to permit the parties to obtain appropriately
3 dated appraisals, after which the court scheduled an evidentiary
4 hearing. At that hearing, Mr. Griffith presented evidence and
5 examined the witnesses. Accordingly, even if we consider the
6 merits of his relevant due process argument, we cannot conclude
7 that Mr. Griffith was deprived of a meaningful opportunity to be
8 heard on the issues relating to the Motion; he was not denied due
9 process or otherwise prejudiced by any error in service. See
10 Matthews v. Eldridge, 424 U.S. 319, 333 (1976) (fundamental
11 requirement of due process is the opportunity to be heard at a
12 meaningful time and in a meaningful manner).
13 B. The bankruptcy court did not clearly err in finding that
Debtor’s Property was worth $360,000 and consequently
14 granting the Motion.
15 1. The bankruptcy court did not abuse its discretion in
not denying the Motion due to Debtor’s submission of an
16 outdated appraisal.
17 At the initial status conference on the Motion, the court
18 set a deadline for Mr. Griffith to file an appraisal of the
19 Property and a further status conference. Mr. Griffith was
20 unable to meet the deadline, and two days before it expired, he
21 moved to extend it. He filed his appraisal a few days before the
22 continued status conference, and, at that hearing, the bankruptcy
23 court stated that it intended to continue the hearing to give the
24 court and Debtor’s counsel time to review the late-filed
25 appraisal. And noting that neither Debtor’s nor Mr. Griffith’s
26 appraisal was dated as of the petition date, the court instructed
27 both parties to obtain appraisals as of that date with the hope
28 that the appraisers or the parties could reach an agreement on

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 1 value. The court then commented: “But as we sit here today, I
2 don’t have a number from either party as of the operative date.
3 So . . . burden of proof is on the debtor[.] [A]s the . . .
4 evidentiary record is now, debtor loses because I don’t know what
5 the value was as of November 20.”
6 Mr. Griffith agreed to the continuance without objection.
7 On appeal, however, Mr. Griffith argues that the bankruptcy court
8 abused its discretion in failing to deny the Motion based on
9 Debtor’s submission of an outdated appraisal. Again, we need not
10 consider arguments not raised in the trial court. In any event,
11 the decision to continue the matter was within the sound
12 discretion of the bankruptcy court. See Khachikyan v. Hahn
13 (In re Khachikyan), 335 B.R. 121, 125 (9th Cir. BAP 2005)
14 (decisions regarding continuances are reviewed for abuse of
15 discretion). Mr. Griffith has not persuaded us that the court
16 abused this discretion.
17 2. The bankruptcy court did not err in denying
Mr. Griffith’s request to present exhibits to establish
18 that Debtor’s appraiser relied on comparable properties
outside the relevant area.
19
20 Mr. Griffith argues that the bankruptcy court erred by
21 denying him the opportunity to present certain exhibits at the
22 evidentiary hearing. Mr. Griffith contends that the exhibits
23 showed that property values in the Leimert Park neighborhood,
24 where the Property was located, were increasing but that Turner’s
25 appraisal had used one comparable property outside that
26 neighborhood in determining the value of the Property.
27 At the beginning of the evidentiary hearing, Mr. Griffith
28 asked the court for time to “finish up a few exhibits.” The

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 1 court refused Mr. Griffith’s request, noting that the only
2 exhibits that were to be presented were the appraisals. The
3 court had so stated in its tentative ruling for the June 29
4 status conference, and Mr. Griffith had not objected or asked to
5 present additional evidence. Later, the court permitted
6 Mr. Griffith to recall Mr. Walsh to the witness stand to ask
7 about the locations of the comparable properties selected by
8 Mr. Turner in his appraisal. Mr. Walsh initially testified that
9 Mr. Turner’s appraisal included two comparable properties that
10 were in “inferior” neighborhoods. Further questioning, however,
11 revealed that Mr. Walsh’s statement referred to Mr. Turner’s
12 initial appraisal rather than the second appraisal dated
13 November 20, 2015. As to the latter appraisal, Mr. Walsh
14 testified that all of the comparables used by Mr. Walsh were
15 located in the Leimert Park neighborhood.
16 On appeal, Mr. Griffith contends that during Mr. Walsh’s
17 testimony, when the court asked Mr. Walsh whether any of the
18 comparables in Mr. Turner’s second appraisal were outside the
19 Leimert Park area, the court had covered with her thumb the
20 comparable property that was 1.4 miles outside of the Leimert
21 Park neighborhood. The record does not reflect anything to
22 support Mr. Griffith’s assertion, but even if this statement is
23 accurate, Mr. Griffith did not object at the hearing. Moreover,
24 after Mr. Walsh stepped down from the witness stand, the court
25 recalled Mr. Turner for voir dire as to his opinion regarding
26 market appreciation in the relevant area. Mr. Turner testified
27 that while examination of a wide range of comparables in the
28 Leimert Park neighborhood might show appreciation due to

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 1 investors “flipping” some of the homes, overall he believed that
2 the market for homes comparable to the Property was generally
3 stable during the relevant period.
4 To the extent Mr. Griffith’s argument is that the bankruptcy
5 court clearly erred in accepting Mr. Turner’s valuation of the
6 Property, Mr. Griffith has not demonstrated that the bankruptcy
7 court’s valuation finding is illogical, implausible, or without
8 support in the record. To the contrary, Mr. Turner’s appraisal
9 and his explanations for how he reached his conclusions were
10 logical and plausible. Under these circumstances, we cannot
11 reverse the bankruptcy court’s factual finding even if we would
12 have decided the matter differently. See United States v.
13 Hinkson, 585 F.3d 1247, 1261 (9th Cir. 2009) (en banc) (“[T]he
14 scope of our review limits us to determining whether the trial
15 court reached a decision that falls within any of the permissible
16 choices the court could have made.”).
17 3. The bankruptcy court did not err in accepting
Mr. Turner’s adjustment to the Property’s value.
18
19 Mr. Griffith argues that Mr. Turner’s $125,000 deduction
20 from the market value of the Property for deferred maintenance
21 was excessive. We do not find this argument persuasive. First,
22 the $125,000 deduction was not entirely for deferred maintenance:
23 Mr. Turner testified that he had taken a deduction for repairs,
24 but he also took into account the quality of construction,
25 styling, and details of the comparable properties in arriving at
26 his final figure. And second, as discussed above, we are not at
27 liberty to second guess the bankruptcy court’s factual findings
28 unless they are illogical, implausible, or without support in the

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 1 record. Mr. Turner’s valuation is supported by the evidence, and
2 Mr. Griffith has not convinced us that it was illogical or
3 implausible. Accordingly, we find no error in the bankruptcy
4 court’s acceptance of Mr. Turner’s opinion of value.
5 CONCLUSION
6 For the reasons discussed above, we AFFIRM.
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