Sasson v. Sokoloff

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

In re: ROBERT SASSON, 
Debtor.

ROBERT SASSON, No. 03-16364
Appellant, BAP No.
v.  NC-02-01410-
MaMeP
NORMAN F. SOKOLOFF, M.D.,
individually and as Trustee for OPINION
CAMELOT MEDICAL GROUP, INC.,
PROFIT SHARING PLAN,
Appellee.

Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Perris, Meyers, and Marlar, Bankruptcy Judges, Presiding

Argued and Submitted
February 15, 2005—San Francisco, California

Filed August 25, 2005

Before: Sidney R. Thomas, Susan P. Graber, and
Richard A. Paez, Circuit Judges.

Opinion by Judge Thomas

11491
 IN RE: SASSON 11495

COUNSEL

David A. Boone and Susan D. Silveira, Law Offices of David
A. Boone, San Jose, California, for the appellant.

Wayne A. Silver, Sunnyvale, California, for the appellee.

OPINION

THOMAS, Circuit Judge:

In this appeal, we are presented with the question of
whether a bankruptcy court has subject matter jurisdiction to
enter a money judgment in a nondischargeability adversary
proceeding where the underlying debt has been reduced to
judgment in state court. We conclude that it may and affirm
the decision of the Ninth Circuit Bankruptcy Appellate Panel
(“BAP”).

I

In 1988, Sokoloff, as trustee of Camelot Medical Group,
Inc., Profit Sharing Plan, obtained a judgment against Sasson
on a cross-complaint for breach of a promissory note. A Cali-
fornia Superior Court entered judgment against Sasson for
$120,000, plus accrued interest and statutory costs.
11496 IN RE: SASSON
Before Sokoloff could enforce the judgment, Sasson filed
a motion for reconsideration and obtained a stay of enforce-
ment pending determination of the motion for reconsideration.
The stay was granted subject to the condition that Sasson “not
dissipate any assets except in the normal course of business.”
While the stay was in place and without informing the court
of his actions, Sasson dissipated the majority of his assets
through dissolution proceedings with his wife, purchase of a
new property, creation of encumbrance on that property and
ultimately by payment to other creditors. The court denied
Sasson’s motion for reconsideration, and Sokoloff recorded
an abstract of judgment. At that point, however, the judgment
was uncollectible.

Subsequently, Sasson filed a voluntary petition for relief
under Chapter 7 of the Bankruptcy Code, 11 U.S.C. §§ 301,
701-784 in the Northern District of California. His bankruptcy
schedule did not mention Sasson’s recent transfer of assets.
Sokoloff then filed a complaint seeking a determination of
nondischargeability of the state court judgment under 11
U.S.C. § 523(a)(6) and a denial of discharge under 11 U.S.C.
§ 727(a)(2).1 The bankruptcy court rejected the § 727(a)(2)
claim, but found that Sasson’s transfer of assets in violation
of the state court stay constituted a willful and malicious
injury under § 523(a)(6). The court entered a judgment for
$148,142.46 plus costs and accruing interest. Sasson filed an
appeal of this decision, but later dismissed it. Subsequently,
both Sasson’s bankruptcy and the adversary proceeding were
closed by the bankruptcy court.
1
Under 11 U.S.C. § 523(a)(6) of the Bankruptcy Code, any debt “for
willful and malicious injury by the debtor to another entity or to the prop-
erty of another entity” shall not be dischargeable in bankruptcy. Under 11
U.S.C. § 727(a)(2), a debtor may not obtain a discharge if “the debtor,
with intent to hinder, delay, or defraud a creditor . . . has transferred,
removed, destroyed, mutilated, or concealed, or has permitted to be trans-
ferred, removed, destroyed, mutilated, or concealed . . . property of the
debtor, within one year before the date of the filing of the petition.” 11
U.S.C. § 727(a)(2).
 IN RE: SASSON 11497
Sokoloff continued to pursue collection remedies in bank-
ruptcy court. Sokoloff filed a notice of the judgment lien and
recorded an abstract of judgment. Sokoloff then obtained a
Writ of Execution to the United States Marshal and instructed
the Marshal to levy on Sasson’s wages. Sasson filed a claim
of exemption, which the court granted in part.

In 2001, Sokoloff renewed the 1991 Judgment. The bank-
ruptcy court issued an Abstract of Judgment for $239,160.42
on July 9, 2001, which was then recorded. Subsequently, the
bankruptcy court granted Sasson’s ex-parte motion to reopen
his Chapter 7 proceedings for sixty days. Sasson then filed a
motion pursuant to Federal Rule of Civil Procedure 60(b) to
vacate the 1991 money judgment and to quash the 2001
abstract of judgment. In his motion, Sasson argued that the
bankruptcy court lacked subject matter jurisdiction to enter a
new federal money judgment and therefore the renewal of
judgment and abstract of judgment were void ab initio. The
bankruptcy court denied the motion after a hearing. Sasson
filed a notice of appeal, which was referred to the BAP. The
BAP affirmed the bankruptcy court, holding that the bank-
ruptcy court had jurisdiction both to enter the 1991 judgment
of nondischargeability and to determine the amount of dam-
ages caused by Sasson’s postjudgment conduct. Sokoloff
timely appealed the BAP decision.

We review both the bankruptcy court’s and the BAP’s
interpretation of the Bankruptcy Code de novo. Debbie Reyn-
olds Hotel & Casino, Inc. v. Calstar Corp. (In re Debbie
Reynolds Hotel & Casino, Inc.), 255 F.3d 1061, 1065 (9th
Cir. 2001). We review a ruling on a motion to set aside a
judgment as void de novo “because the question of the valid-
ity of a judgment is a legal one.” Export Group v. Reef Indus.,
54 F.3d 1466, 1469 (9th Cir. 1995). We review the scope of
the exercise of equitable power de novo, Graves v. Myrvang
(In re Myrvang), 232 F.3d 1116, 1124 (9th Cir. 2000), and the
exercise of equitable power for an abuse of discretion, id. at
1121.
11498 IN RE: SASSON
II

The bankruptcy court had jurisdiction to enter a money
judgment in the adversary proceeding. We have long held that
“the Bankruptcy Court has jurisdiction to enter a monetary
judgment on a disputed state law claim in the course of mak-
ing a determination that a debt is nondischargeable.” Cowen
v. Kennedy (In re Kennedy), 108 F.3d 1015, 1016 (9th Cir.
1997).

A

[1] Our holding in Kennedy was firmly grounded. Under
the original 1898 Bankruptcy Act, Pub. L. No. 55-171, 30
Stat. 544 (repealed 1978) (as amended through date of repeal)
(“1898 Bankruptcy Act”), bankruptcy courts were considered
to have equitable jurisdiction to issue orders in aid of a non-
dischargeability determination. Local Loan Co. v. Hunt, 292
U.S. 234, 240 (1934); see also Pepper v. Litton, 308 U.S. 295,
304 (1939) (“[F]or many purposes courts of bankruptcy are
essentially courts of equity, and their proceedings inherently
proceedings in equity.” (internal quotation marks omitted)).

In 1970, Congress codified the power of bankruptcy courts,
in the exercise of their power to declare debts nondischarge-
able, to “determine the remaining issues, render judgment,
and make all orders necessary for the enforcement thereof.”
1898 Bankruptcy Act § 17(c)(3). When Congress enacted the
Bankruptcy Reform Act of 1978, Pub. L. No. 95-598, 92 Stat.
2549 (“Bankruptcy Code” or “Code”), Congress removed
specific jurisdictional language in favor of a general broad
jurisdictional grant. However, in doing so, it clearly intended
to incorporate the specific pre-Code jurisdiction of the bank-
ruptcy courts.2 In addition, the Bankruptcy Code specifically
provides that:
2
The jurisdiction of bankruptcy courts under the Bankruptcy Code was
to include “items that the bankruptcy courts are now able to bear [sic]
 IN RE: SASSON 11499
The court may issue any order, process, or judgment
that is necessary or appropriate to carry out the pro-
visions of this title. No provision of this title provid-
ing for the raising of an issue by a party in interest
shall be construed to preclude the court from, sua
sponte, taking any action or making any determina-
tion necessary or appropriate to enforce or imple-
ment court orders or rules, or to prevent an abuse of
process.

11 U.S.C. § 105(a) (emphasis added). Thus, the bankruptcy
court clearly has the power under the Bankruptcy Code to
determine whether a debt is nondischargeable, to “determine
the remaining issues, render judgment, and make all orders
necessary for the enforcement thereof,” and to “issue any
order, process, or judgment that is necessary or appropriate in
carrying out” the order of nondischargeability.

[2] In addition to continuation of the bankruptcy court’s
pre-Code jurisdiction and the specific grant of new powers,
the Bankruptcy Code provided for the exercise of “original
but not exclusive jurisdiction of all civil proceedings arising
under title 11, or arising in or related to cases under title 11.”
28 U.S.C. § 1334(b). A bankruptcy court’s “related to” juris-
diction is very broad, “including nearly every matter directly
or indirectly related to the bankruptcy.” Mann v. Alexander
Dawson (In re Mann), 907 F.2d 923, 926 n.4 (9th Cir. 1990).
The bankruptcy court’s “related to” jurisdiction granted by the
Bankruptcy Code derives directly from the Bankruptcy

under [the 1898] Act § 2a,” including “determination of dischargeability
of debts [and] liquidation of non-dischargeable debts.” H.R. Rep. No. 95-
595, at 446, 49 (1977) (footnote referencing 1898 Act § 17c omitted),
reprinted in 1978 U.S.C.C.A.N. 5963, 6401, 6010; see also id. at 363 (not-
ing that “the comprehensive grant of jurisdiction prescribed in proposed
[statute] . . . is adequate to cover the full jurisdiction that the bankruptcy
courts have today over dischargeability and related issues under Bank-
ruptcy Act § 17c”), reprinted in 1978 U.S.C.C.A.N. at 6319; S. Rep. No.
95-989, at 77 (1978) (same), reprinted in 1978 U.S.C.C.A.N. 5787, 5863.
11500 IN RE: SASSON
Clause, which grants Congress the power “[t]o establish . . .
uniform Laws on the subject of Bankruptcies throughout the
United States.” U.S. Const., art. 1, § 8. Congress expanded the
Bankruptcy Court’s Article I jurisdiction by granting federal
district courts with “original and exclusive jurisdiction of all
cases under title 11.” 28 U.S.C. § 1334(a). Thus, at present,
the bankruptcy court’s “related to” jurisdiction also includes
the district court’s supplemental jurisdiction pursuant to 28
U.S.C. § 1367 “over all other claims that are so related to
claims in the action within [the court’s] original jurisdiction
that they form part of the same case or controversy under
Article III of the United States Constitution.” See Montana v.
Goldin (In re Pegasus Gold Corp.), 394 F.3d 1189, 1195 (9th
Cir. 2005); Sec. Farms v. Int’l Bhd. of Teamsters, 124 F.3d
999, 1008 n.5 (9th Cir. 1997).

[3] Even the discharge of a debtor does not automatically
deprive the federal courts of jurisdiction over a claim “related
to” the bankruptcy. See Kieslich v. United States (In re Kies-
lich), 258 F.3d 968, 971 (9th Cir. 2001). Indeed, we have held
that a bankruptcy courts’s “related to” jurisdiction includes
post-confirmation jurisdiction over state court actions such as
breach of contract, breach of convenant of good faith and fair
dealing, and fraud when those claims have a “close nexus” to
the bankruptcy proceeding. In re Pegasus Gold Corp., 394
F.3d at 1194; see also Celotex Corp. v. Edwards, 514 U.S.
300, 309 (1995). We have also held that bankruptcy courts
have post-discharge jurisdiction to enjoin collection actions,
even if those actions occur in another country. Hong Kong &
Shanghai Banking Corp. v. Simon (In re Simon), 153 F.3d
991, 996 (9th Cir. 1998).

In addition, bankruptcy courts retain their traditional equi-
table powers under the Bankruptcy Code. Johnson v. Home
State Bank, 501 U.S. 78, 88 (1991) (per curiam) (“[T]he bank-
ruptcy court retains its broad equitable power to issue any
order, process, or judgment that is necessary or appropriate to
carry out the provisions of the Code.”) (quotation marks omit-
 IN RE: SASSON 11501
ted)). As the Supreme Court has instructed, when a creditor
files a claim in bankruptcy, “the creditor triggers the process
of ‘allowance and disallowance of claims,’ thereby subjecting
himself to the bankruptcy court’s equitable power.” Lan-
genkamp v. Culp, 498 U.S. 42, 44 (1990) (quoting Granfinan-
ciera, S.A. v. Nordberg, 492 U.S. 33, 58-59 (1989)). The
bankruptcy court’s equitable power is not unfettered; it must
be exercised to carry out the provisions of the Bankruptcy
Code. Saxman v. Educ. Credit Mgmt. Corp. (In re Saxman),
325 F.3d 1168, 1174 (9th Cir. 2003). However, we have rec-
ognized that “a bankruptcy court is a court of equity and
should invoke equitable principles and doctrines, refusing to
do so only where their application would be ‘inconsistent’
with the Bankruptcy Code.” Beaty v. Selinger (In re Beaty),
306 F.3d 914, 922 (9th Cir. 2002) (citing In re Myrvang, 232
F.3d at 1124).

[4] The Bankruptcy Code “grants exclusive jurisdiction to
the bankruptcy courts to determine dischargeability.” Renfrow
v. Draper, 232 F.3d 688, 693 (9th Cir. 2000) (citing 11 U.S.C.
§ 523(a)(15)). As we reasoned in Kennedy:

“If it is acknowledged as beyond question that a
complaint to determine dischargeability of a debt is
exclusively within the equitable jurisdiction of the
bankruptcy court, then it must follow that the bank-
ruptcy court may also render a money judgment in
an amount certain without the assistance of a jury.
This is true not merely because equitable jurisdiction
attaches to the entire cause of action but more impor-
tantly because it is impossible to separate the deter-
mination of dischargeability function from the
function of fixing the amount of the nondischarge-
able debt.”

Kennedy, 108 F.3d at 1017-18 (quoting Snyder v. Devitt (In
re Devitt), 126 B.R. 212, 215 (Bankr. D. Md. 1991)). Our sis-
ter circuits have reached similar conclusions. Porges v. Grun-
11502 IN RE: SASSON
tal & Co. (In re Porges), 44 F.3d 159, 165 (2d Cir. 1995);
Longo v. McLaren (In re McLaren), 3 F.3d 958, 965-66 (6th
Cir. 1993); N.I.S. Corp. v. Hallahan (In re Hallahan), 936
F.2d 1496, 1507-08 (7th Cir. 1991). Given the text and history
of the Bankruptcy Code and the bankruptcy court’s inherent
equitable powers, it is clear, as we held in Kennedy, that bank-
ruptcy courts have jurisdiction and power to enter money
judgments in adjudicating nondischargeability adversary pro-
ceedings.

B

[5] Sasson attempts to distinguish Kennedy from this case
because Kennedy involved an unliquidated claim. Kennedy
made no such distinction, and there is no principled jurisdic-
tional distinction to be drawn. There is nothing in the text of
the Bankruptcy Code or its history that contains a jurisdic-
tional exception for debts that have been liquidated to judg-
ment. To hold otherwise would be to deprive the bankruptcy
court of its exclusive jurisdiction over bankruptcy discharge
pursuant to 11 U.S.C. § 523(a). As the Supreme Court has
noted, “[s]ince 1970 [ ], the issue of nondischargeability has
been a matter of federal law governed by the terms of the
Bankruptcy Code.” Grogan v. Garner, 498 U.S. 279, 284
(1991) (citing Brown v. Felsen, 442 U.S. 127, 129-30 (1979)).
The Bankruptcy Code provides that bankruptcy courts “may
issue any order, process, or judgment that is necessary or
appropriate to carry out the provisions of this title.” 11 U.S.C.
§ 105. Notably, it does not contain an additional clause stating
“except when the debt has been liquidated to judgment.”

The debtor invoked bankruptcy court subject matter and in
personam jurisdiction by filing a voluntary petition in bank-
ruptcy. With the commencement of the case, the bankruptcy
court acquired exclusive in rem jurisdiction over all the debt-
or’s legal or equitable interests in property wherever located
and by whomever held. 28 U.S.C. § 1334(e); Commodity
Futures Trading Comm’n v. Co Petro Mktg. Group, Inc., 700
 IN RE: SASSON 11503
F.2d 1279, 1282 (9th Cir. 1983). By filing a proof of claim,
the creditor in this case became subject to the bankruptcy
court’s in personam jurisdiction, and the limitations of the
Bankruptcy Code. In re Simon, 153 F.3d at 997. The parties
were clearly subject to both subject matter and in personam
jurisdiction of the bankruptcy court.

[6] The fact that a debt has been previously liquidated to
judgment does not deprive the bankruptcy court of jurisdic-
tion, nor of any of its statutory and equitable power. It may,
as we shall discuss in Part II.D, have an effect on the form of
relief that the bankruptcy court grants in nondischargeability
proceedings. However, it does not alter the Kennedy jurisdic-
tional analysis. The existence of a state court judgment does
not deprive the bankruptcy court of the statutory power to
enter a new judgment of nondischargeability.

C

[7] Sasson argues that the Rooker-Feldman doctrine3 alters
this jurisdictional analysis. However, the Rooker-Feldman
doctrine did not deprive the bankruptcy court of jurisdiction
to enter the money judgment in the nondischargeability adver-
sary proceeding. The Rooker-Feldman doctrine is based on
the statutory proposition that federal district courts are courts
of original, not appellate, jurisdiction. See 28 U.S.C. §§ 1331,
1332. Therefore, federal district courts have “no authority to
review the final determinations of a state court in judicial pro-
ceedings.” Worldwide Church of God v. McNair, 805 F.2d
888, 890 (9th Cir. 1986). Only the Supreme Court has original
3
The doctrine takes its name from Rooker v. Fidelity Trust Co., 263
U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman,
460 U.S. 462 (1983). Rooker held that federal statutory jurisdiction over
direct appeals from state courts lies exclusively in the Supreme Court and
is beyond the original jurisdiction of federal district courts. 263 U.S. at
415-16. Feldman held that this jurisdictional bar extends to particular
claims that are “inextricably intertwined” with those a state court has
already decided. 460 U.S. at 486-87.
11504 IN RE: SASSON
jurisdiction to review “[f]inal judgments or decrees rendered
by the highest court of a State in which a decision could be
had.” 28 U.S.C. § 1257(a). As the Supreme Court has recently
explained, the Rooker-Feldman doctrine “is confined to cases
of the kind from which the doctrine acquired its name: cases
brought by state-court losers complaining of injuries caused
by state-court judgments rendered before the district court
proceedings commenced and inviting district court review and
rejection of those judgments.” Exxon Mobil Corp. v. Saudi
Basic Indus., 125 S.Ct. 1517, 1521-22 (2005).

[8] Application of the Rooker-Feldman doctrine in bank-
ruptcy is limited by the separate jurisdictional statutes that
govern federal bankruptcy law. Gruntz v. County of Los Ange-
les (In re Gruntz), 202 F.3d 1074, 1079 (9th Cir. 2000) (en
banc). The Rooker-Feldman doctrine has little or no applica-
tion to bankruptcy proceedings that invoke substantive rights
under the Bankruptcy Code or that, by their nature, could
arise only in the context of a federal bankruptcy case. Id. at
1081. In the exercise of federal bankruptcy power, bankruptcy
courts may avoid state judgments in core bankruptcy proceed-
ings, see, e.g., 11 U.S.C. §§ 544, 547, 548, 549, may modify
judgments, see, e.g., 11 U.S.C. §§ 1129, 1325, and, of pri-
mary importance in this context, may discharge them, see,
e.g., 11 U.S.C. §§ 727, 1141, 1328.

The Rooker-Feldman doctrine has no application here. Sas-
son is not seeking to have the bankruptcy court review the
merits of the state court judgment; rather, he is attempting to
prevent the bankruptcy court from giving effect to the state
court judgment. Likewise, the creditor is not seeking modifi-
cation of the state court judgment; it is attempting to save the
judgment from bankruptcy discharge.

[9] In entering judgment, the bankruptcy court was exercis-
ing its exclusive statutory power to determine whether a debt
is dischargeable in a bankruptcy case. See 11 U.S.C.
§§ 523(a)(6), 727(a)(2). Actions seeking a determination of
 IN RE: SASSON 11505
nondischargeability are core bankruptcy proceedings, see 28
U.S.C. § 157(b)(2)(I), and are not subject to the Rooker-
Feldman doctrine. See Gruntz, 202 F.3d at 1081-82. The
Rooker-Feldman doctrine did not deprive the bankruptcy
court of jurisdiction to enter the money judgment in this case.

D

Sasson also argues that the bankruptcy court lacked juris-
diction to enter a money judgment by operation of the full
faith and credit statute, 28 U.S.C. § 1738, and the doctrines of
res judicata and collateral estoppel. Unlike the Rooker-
Feldman doctrine, these doctrines do not affect the jurisdic-
tion of federal courts. See, e.g., EEOC v. Children’s Hosp.
Med. Ctr. of N. Cal., 719 F.2d 1426, 1430 (9th Cir. 1983) (en
banc) (“[R]es judicata is an affirmative defense under the
rules of civil procedure. Fed.R.Civ.P. 8(c). It is not a jurisdic-
tional doctrine.”). Moreover, central to the operation of the
bankruptcy courts is the idea that the debtor’s debts, including
debts liquidated to judgments, may be modified and dis-
charged. See, e.g., 11 U.S.C. §§ 544, 547, 548, 549, 727,
1129, 1141, 1325, 1328.

[10] In short, “[f]inal judgments in state courts are not nec-
essarily preclusive in United States bankruptcy courts.”
Gruntz, 202 F.3d at 1079. Thus, we must reject Sasson’s argu-
ment that the doctrines of full faith and credit, res judicata,
and collateral estoppel deprive the bankruptcy court of the
jurisdiction to enter a money judgment in a discharge order
involving liquidated debts.

This does not, of course, mean that the preclusion doctrines
do not have any bearing on federal bankruptcy discharge pro-
ceedings. The Supreme Court has stated that “collateral estop-
pel principles do indeed apply in discharge exception
proceedings pursuant to § 523(a).” Grogan, 498 U.S. at 284
n.11. Further, we have held that “[t]he full faith and credit
requirement of § 1738 compels a bankruptcy court in a
11506 IN RE: SASSON
§ 523(a)(2)(A) nondischargeability proceeding to give collat-
eral estoppel effect to a prior state court judgment.” Gayden
v. Nourbakhsh (In re Nourbakhsh), 67 F.3d 798, 801 (9th Cir.
1995) (per curiam).4

In the bankruptcy discharge context, this means that “[i]f,
in the course of adjudicating a state-law question, a state court
should determine factual issues using standards identical to
those of [§ 523], then collateral estoppel, in the absence of
countervailing statutory policy, would bar relitigation of those
issues in the bankruptcy court.” Brown, 442 U.S. at 139 n.10.
The classic example of the proper use of issue preclusion in
discharge proceeding is when the amount of the debt has been
determined by the state court and reduced to judgment. In that
event, if there are no new issues, the bankruptcy court should
ordinarily decline to allow the parties to relitigate the debt
amount and should give the state court judgment as to the
amount of preclusive effect. Comer v. Comer (In re Comer),
723 F.2d 737, 740 (9th Cir. 1984). For the same reason, we
have held that if the issue of fraud had been litigated in state
court, the state court judgment would preclude relitigation of
4
“In determining whether a party should be estopped from relitigating
an issue decided in a prior state court action, the bankruptcy court must
look to that state’s law of collateral estoppel.” Diamond v. Kolcum (In re
Diamond), 285 F.3d 822, 826 (citing Nourbakhsh, 67 F.3d at 800). Thus,
we have held:
Under California law, collateral estoppel only applies if certain
threshold requirements are met: ‘First, the issue sought to be pre-
cluded from relitigation must be identical to that decided in a for-
mer proceeding. Second, this issue must have been actually
litigated in the former proceeding. Third, it must have been nec-
essarily decided in the former proceeding. Fourth, the decision in
the former proceeding must be final and on the merits. Finally,
the party against whom preclusion is sought must be the same as,
or in privity with, the party to the former proceeding.’
Cal-Micro, Inc. v. Cantrell, (In re Cantrell), 329 F.3d 1119, 1123 (9th Cir.
2003) (quoting Harmon v. Kobrin (In re Harmon), 250 F.3d 1240, 1245
(9th Cir. 2001)).
 IN RE: SASSON 11507
the same issue by the bankruptcy court in discharge proceed-
ings. Nourbaskhsh, 67 F.3d at 801. Thus, the doctrines of pre-
clusion play an important part in dischargeability proceedings
by preventing the relitigation of factual and legal issues
already determined by other courts.

[11] However, a preexisting judgment does not have pre-
clusive effect on the bankruptcy court’s determination of dis-
chargeability. The Supreme Court firmly rejected such an idea
in Brown, specifically holding that “the bankruptcy court is
not confined to a review of the judgment and record in the
prior state-court proceedings when considering the dischar-
geability of respondent’s debt.” Brown, 442 U.S. at 138-39.
We explained this analytical distinction in Comer:

Res judicata should not be applied to bar a claim by
a party in bankruptcy proceedings, nor should a
bankruptcy judge rely solely on state court judg-
ments when determining the nature of a debt for pur-
poses of dischargeability, if doing so would prohibit
the bankruptcy court from exercising its exclusive
jurisdiction to determine dischargeability.

In re Comer, 723 F.2d at 740.

As we explained in Comer, determination of the amount of
the debt by the state court did not impact the dischargeability
decision:

In the present case, applying res judicata to bar the
bankruptcy court from looking behind the default
judgment to determine the actual amount of the obli-
gation would not preclude the exercise of the bank-
ruptcy court’s exclusive jurisdiction to determine the
nature of the subject debt for purposes of dischargea-
bility.

Id. In Comer, because the state court judgment involved the
“extent of [the debtor’s] obligation . . . , not the nature of that
11508 IN RE: SASSON
debt,” it was not relevant to the bankruptcy court’s exercise
of its power to determine the dischargeability of a debt; there-
fore, we concluded that the bankruptcy court properly gave
preclusive effect to the prior judgment. Id.

In this case, the parties were not relitigating the merits of
the state court judgment in the nondischargeability proceed-
ing. The adversary proceeding was based on Sasson’s “willful
and malicious” post-judgment conduct, not on the contractual
breach that formed the basis of the state court judgment. Thus,
the parties were litigating a different claim in the nondischar-
geability proceeding in bankruptcy, which was not precluded
by the state court contract claim judgment. Id. Indeed, the
creditor was not seeking to upend the state court judgment;
rather, he simply was attempting to enforce it by defending
against the discharge of the debt in bankruptcy. The bank-
ruptcy court did not re-determine the amount of the state court
debt; the court relied upon the state court determination. Thus,
the various preclusion doctrines did not operate to prevent the
bankruptcy court from entering a judgment of nondischargea-
bility in this case. See Diamond, 285 F.3d at 829. The bank-
ruptcy court’s actions throughout the adversary proceedings
were entirely consistent with the law of issue preclusion as we
have applied it to bankruptcy discharge.

[12] The only remaining question, then, is whether the vari-
ous doctrines of issue preclusion prevented the bankruptcy
court from enforcing its dischargeability determination by
including a money judgment in its resolution of the adversary
proceeding. They clearly do not. As the Supreme Court has
held, affording full faith and credit to a judgment does not
require a court to “adopt the practices of [the jurisdiction that
granted the judgment] regarding the time, manner, and mech-
anisms for enforcing judgments.” Baker ex rel. Thomas v.
General Motors Corp., 522 U.S. 222, 235 (1998). As the
Supreme Court explained, “[e]nforcement measures do not
travel with the sister state judgment as preclusive effects do;
such measures remain subject to the evenhanded control of
 IN RE: SASSON 11509
forum law.” Id. (citing McElmoyle ex rel. Bailey v. Coyen, 13
Pet. 312, 325, 10 L.Ed. 177 (1839) (holding that judgment
may be enforced only as “laws [of enforcing forum] may per-
mit”) and Restatement (Second) of Conflict of Laws § 99
(1969) (“The local law of the forum determines the methods
by which a judgment of another state is enforced.”)).

[13] In sum, none of the doctrines of issue preclusion dic-
tate how a bankruptcy court may choose to enforce its deter-
mination of nondischargeability. That is a question reserved
to the bankruptcy courts in the exercise of their broad equita-
ble powers in bankruptcy. In so doing, as we have discussed,
bankruptcy courts are authorized by statute to issue “any
order, process, or judgment that is necessary or appropriate to
carry out the provisions of this title.” 28 U.S.C. § 105. In
addition, the bankruptcy court may use its inherent equitable
power to fashion relief, so long as the remedy is consistent
with the objectives of the Bankruptcy Code. In re Saxman,
325 F.3d at 1174. Thus, as a matter of law, a prior judgment
does not preclude a bankruptcy court from exercising its
power to determine how best to enforce its own dischargea-
bility order.

[14] The bankruptcy court here, therefore, had the authority
to enter a money judgment in conjunction with its nondischar-
geability order. “It does not follow, however, that the court
was bound to exercise its authority. And it probably would
not and should not have done so except under unusual circum-
stances such as here exist.” Hunt, 292 U.S. at 241. The exis-
tence of a prior judgment may introduce some prudential
concerns, such as comity, that a bankruptcy court should take
into consideration in fashioning relief. See Smith v. Lachter
(In re Smith), 242 B.R. 694 (B.A.P. 9th Cir. 1999) (noting that
the filing of a new money judgment is not necessary when
there is an existing effective state court judgment); Gertsch v.
Johnson & Johnson Fin. Corp. (In re Gertsch), 237 B.R. 160
(B.A.P. 9th Cir. 1999) (discussing the potential confusion and
11510 IN RE: SASSON
complication caused by the entry of multiple judgments).5
Although important considerations, these prudential concerns
do not affect the jurisdiction and the power of the bankruptcy
court to enter a new money judgment as part of declaring a
debt nondischargeable.6 Rather, these prudential issues are
best committed to the judgment of the bankruptcy court, sub-
ject to review for abuse of discretion. In re Myrvang, 232 F.3d
at 1121. In examining prudential considerations, we must also
remember that “[t]he Supreme Court found that the overriding
purpose of § 523 is to protect victims of fraud.” Muegler v.
Bening, 413 F.3d 980, 983 (9th Cir. 2005) (citing Cohen v. de
la Cruz, 523 U.S. 213, 222-23 (1998)). Thus, a bankruptcy
court does not act outside the purposes of the Bankruptcy
Code by providing victims of fraud an additional means of
enforcing a nondischargeability judgment in an appropriate
case.

Applying these principles to the case at hand, we conclude
that the bankruptcy court acted well within its discretion in
entering the new money judgment. Several circumstances ren-
dered the bankruptcy court’s entry of a new money judgment
necessary and appropriate. The creditor obtained a state court
judgment, which proved uncollectible at the time. When the
creditor commenced further collection proceedings, the debtor
5
We interpret Smith and Gertsch as involving prudential considerations.
To the extent that these cases may be construed as holding that bankruptcy
courts have no jurisdiction or authority to enter a money judgment on a
liquidated claim, we must respectfully disagree. We also disagree with the
approach taken by the Fourth Circuit in Heckert v. Dotson (In re Heckert),
272 F.3d 253, 257 (4th Cir. 2001). In our opinion, Heckert did not give
sufficient consideration and deference to bankruptcy court’s broad equita-
ble powers to fashion relief.
6
Many of the prudential considerations involved in the entry of multiple
judgments can be addressed in the original state forum. For example, in
California, the rule as to multiple judgments is that, if a party receives
multiple judgments on a single claim, that party can have just one satisfac-
tion. See Textron Financial Corp. v. National Union Fire Ins. Co. of Pitts-
burgh, 118 Cal. App. 4th 1061, 1078 (Cal. Ct. App. 2004); McCall v. Four
Star Music Co., 51 Cal. App. 4th 1394, 1398 (Cal. Ct. App. 1996).
 IN RE: SASSON 11511
filed bankruptcy. Based on the debtor’s post-state judgment
behavior, the bankruptcy court concluded that the debt was
nondischargeable because the debtor had engaged in fraud.
The court entered a money judgment as part of the judgment
of nondischargeability. The debtor did not object, but waited
until the creditor had allowed the state court judgment to lapse
in favor of the discharge judgment. When the discharge judg-
ment was renewed, the debtor then sought to prevent the
bankruptcy court from issuing an enforcement order that
would give effect to the prior state judgment, arguing that the
lapsed state court judgment precluded it. However, as the
BAP found, the debtor had engaged in “wilful and malicious
behavior” in rendering the initial state court judgment uncol-
lectible. The debtor in this case is clearly attempting to
manipulate both the federal and state court systems to avoid
paying the debt, which the bankruptcy court has found non-
dischargeable. Given the history of the case, the bankruptcy
court’s action in entering a new money judgment and renew-
ing the judgment was entirely proper.

[15] Sasson would turn the law of preclusion on its head by
having us hold that the existence of a lapsed underlying state
court judgment precludes enforcement of that judgment in
federal court. He would have us hold that we can only uphold
a creditor’s right to full faith and credit of a state court judg-
ment by denying the creditor the right to enforce the judg-
ment. In this context, the doctrines of full faith and credit,
collateral estoppel, and res judicata do not apply to prevent a
bankruptcy court from entering a money judgment when rul-
ing on the dischargeability of the underlying debt in the exer-
cise of its equitable power.

III

[16] For all of these reasons, we conclude that the court did
not err in declining to award relief pursuant to Rule 60(b)(4).
Under Federal Rule of Civil Procedure 60(b), a court may
relieve a party from judgment for the following reasons: (1)
11512 IN RE: SASSON
mistake, inadvertence, surprise, or excusable neglect; (2)
newly discovered evidence; (3) fraud or other misconduct; (4)
a void judgment; (5) a satisfied or discharged judgment; or (6)
any other reason justifying relief from operation of judgment.
Sasson contends that he is entitled to relief because the judg-
ment entered by the bankruptcy court was void. A “ ‘judg-
ment is not void merely because it is erroneous.’ ” Ministry of
Def. & Support for the Armed Forces v. Cubic Def. Sys., 385
F.3d 1206, 1225 (9th Cir. 2004) (quoting United States v.
Holtzman, 762 F.2d 720, 724 (9th Cir. 1985)), petition for
cert. filed, 73 U.S.L.W. 3498 (Feb. 11, 2005). We have con-
sistently held that a “final judgment is ‘void’ for purposes of
Rule 60(b)(4) only if the court that considered it lacked juris-
diction, either as to the subject matter of the dispute or over
the parties to be bound, or acted in a manner inconsistent with
due process of law.” United States v. Berke, 170 F.3d 882,
883 (9th Cir. 1999) (emphasis added); Cubic Def. Sys., 385
F.3d at 1226 (“A judgment is void only if the issuing court
lacked subject-matter jurisdiction over the action or if the
judgment was otherwise entered in violation of due pro-
cess.”).

[17] Given that the bankruptcy court acted well within its
jurisdiction and authority in entering the money judgment in
the first instance, the judgment was not void. The court was
entirely correct in declining to grant relief under Rule 60(b).

AFFIRMED.