NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 3 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: MARTIN PEMSTEIN; DIANA No. 15-60070
PEMSTEIN,
BAP No. 15-1019
Debtors.
______________________________
MEMORANDUM*
MARTIN PEMSTEIN,
Appellant,
v.
HAROLD PEMSTEIN,
Appellee.
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Kurtz, Perris, and Taylor, Bankruptcy Judges, Presiding
Submitted June 26, 2017**
Before: PAEZ, BEA, and MURGUIA, Circuit Judges.
Martin Pemstein (“Martin”) appeals pro se from the Bankruptcy Appellate
*
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).
Panel’s (“BAP”) judgment affirming the bankruptcy court’s order determining that
Martin’s debt to Harold Pemstein (“Harold”) was nondischargeable under 11
U.S.C. § 523(a)(4). We have jurisdiction under 28 U.S.C. § 158(d). We review de
novo BAP decisions and apply the same standard of review that the BAP applied
to the bankruptcy court’s ruling. Boyajian v. New Falls Corp. (In re Boyajian),
564 F.3d 1088, 1090 (9th Cir. 2009). We affirm.
The bankruptcy court properly held that the debt based on the 2010 state
court judgment was nondischargeable under § 523(a)(4) because a preponderance
of the evidence established that Martin’s misconduct was intentional and amounted
to defalcation. See Bullock v. BankChampaign, N.A., 133 S. Ct. 1754, 1757 (2013)
(explaining that “defalcation” in § 523(a)(4) includes a “culpable state of mind”
requirement involving “knowledge of, or gross reckless in respect to, the improper
nature of the relevant fiduciary behavior”); see also Grogan v. Garner, 498 U.S.
279, 291 (1991) (setting forth standard of proof for dischargeability exceptions in
§ 523(a)); Ragsdale v. Haller, 780 F.2d 794, 796-97 (9th Cir. 1986) (California
partners are fiduciaries within the meaning of § 523(a)(4)).
The bankruptcy court properly held that the 2010 state court judgment had
preclusive effect over the issue of whether Martin’s debt to Harold arose out of
Martin’s breach of a fiduciary duty with regard to the collection of rent for their
former partnership, HMS Holding Company. See Harmon v. Kobrin (In re
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Harmon), 250 F.3d 1240, 1245 (9th Cir. 2001) (explaining that collateral estoppel
applies in proceedings seeking exceptions from discharge under § 523(a),
preclusive effect of a state court judgment in a subsequent bankruptcy proceeding
is determined by state law, and setting forth issue preclusion requirements under
California law); see also Cal. Corp. Code § 16404(a), (c) (setting forth fiduciary
duties for partnerships); cf. Robi v. Five Platters, Inc., 838 F.2d 318, 322-23 (9th
Cir. 1988) (explaining the “last in time” rule regarding inconsistent judgments on
the same claim or issue).
The bankruptcy court did not abuse its discretion by denying Martin’s
motion under Federal Rule of Civil Procedure 59(e) because Martin failed to
demonstrate any basis for relief. See Fed. R. Bankr. P. 9023 (Fed. R. Civ. P. 59
applies to bankruptcy cases); Zimmerman v. City of Oakland, 255 F.3d 734, 737,
740 (9th Cir. 2001) (setting forth standard of review and discussing factors for
granting a motion for reconsideration under Fed. R. Civ. P. 59(e)).
Harold’s request for oral argument (Docket Entry No. 14) is denied.
AFFIRMED.
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