FILED NOT FOR PUBLICATION JUN 26 2023 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT OF THE NINTH CIRCUIT
In re: BAP No. NC-23-1022-CBG ARTEM KOSHKALDA, Debtor. Bk. No. 18-30016
ARTEM KOSHKALDA, Appellant, v. MEMORANDUM* E. LYNN SCHOENMANN, Chapter 7 Trustee, Appellee.
Appeal from the United States Bankruptcy Court for the Northern District of California Hannah L. Blumenstiel, Bankruptcy Judge, Presiding
Before: CORBIT, BRAND, and GAN, Bankruptcy Judges.
INTRODUCTION
Chapter 7 1 debtor and appellant, Artem Koshkalda, appeals the
bankruptcy court’s denial of his application for leave to file pleadings.
Previously, the bankruptcy court determined that Mr. Koshkalda was a
* This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential value, see 9th Cir. BAP Rule 8024-1. Unless specified otherwise, all chapter and section references are to the 1
Bankruptcy Code, 11 U.S.C. §§ 101-1532. vexatious litigant and entered a pre-filing order as a sanction. The pre-
filing order required that Mr. Koshkalda submit an application before filing
any pleadings demonstrating that the proposed filings were in good faith
and were not for the purpose of harassment. Because the bankruptcy court
did not err in finding that Mr. Koshkalda’s proposed filings repeated
arguments already raised and rejected, the bankruptcy court did not err in
finding that the pleadings were not in good faith and for harassment.
Accordingly, the bankruptcy court did not abuse its discretion in denying
Mr. Koshkalda’s application for leave to file pleadings. Therefore, we
AFFIRM.
FACTS
A. History
Because the parties are familiar with the facts and procedural history,
there is no need to restate them in detail here except as necessary to the
decision.
In September 2016, Seiko Epson sued Mr. Koshkalda and several
other individuals and entities for trademark infringement, trademark
counterfeiting, and related claims in Nevada district court. The Nevada
district court entered orders prohibiting Mr. Koshkalda and the other
defendants from continuing to engage in their wrongful conduct, as well as
orders freezing and/or authorizing the seizure of most of Mr. Koshkalda’s
property, including several parcels of real estate and dozens of bank
accounts. Mr. Koshkalda, however, violated several of the Nevada district
2 court orders and engaged in discovery abuses so severe that the district
court imposed case-terminating sanctions and entered a default judgment
in the amount of $12 million in favor of Seiko Epson.
In January 2018, Mr. Koshkalda filed a chapter 11 petition. On March
8, 2018, the court converted the case to one under chapter 7, after which a
chapter 7 trustee was appointed. The trustee filed an application to employ
Fox Rothschild LLP (“Fox”) as general bankruptcy counsel disclosing that
Fox concurrently represented Seiko Epson in unrelated matters. Mr.
Koshkalda did not file an opposition to the application to employ Fox. The
bankruptcy court approved Fox’s employment after determining that Fox
did not represent any interest adverse to the estate and was a disinterested
person within the meaning of the Bankruptcy Code.
In June 2018, Seiko Epson obtained an order annulling the automatic
stay. The order retroactively validated the Nevada district court’s entry of
the $12 million default judgment against Mr. Koshkalda and also permitted
Koshkalda to proceed with his appeal from that judgment. The Ninth
Circuit affirmed the district court’s judgment.
In May 2018, Seiko Epson commenced an adversary proceeding
objecting to Koshkalda’s discharge under § 727 and seeking to except the
judgment debt from discharge under § 523 (“Epson Adversary
Proceeding”). In August 2018, Mr. Koshkalda’s counsel withdrew and
since then, Mr. Koshkalda has represented himself. In September 2019, the
3 bankruptcy court granted Epson summary judgment on its claims under
§§ 727(a)(2)(A), (a)(3), and (a)(7).
During the pendency of the case, the trustee has liquidated over $5
million in estate assets, often over Mr. Koshkalda’s objections. Indeed,
unrestrained by counsel, Mr. Koshkalda mounted continuous and
repetitive challenges to the trustee’s administration of the estate.
Mr. Koshkalda also began to attack the trustee and her counsel by belatedly
challenging their employment and compensation. Mr. Koshkalda’s
unsuccessful challenges included: (1) a motion to disqualify Fox as trustee’s
counsel filed over a year after Fox’s employment was approved, to which
Mr. Koshkalda did not originally object despite notice; (2) objections to the
trustee’s and Fox’s interim fee applications; (3) motions for authority to sue
both the trustee and Fox in state court; (4) motions to vacate as void the
order authorizing Fox’s employment; and (5) various related
reconsideration motions.
Mr. Koshkalda’s frequent, meritless motions and oppositions caused
the bankruptcy court to grant the trustee’s motion to enter a pre-filing
order against Mr. Koshkalda. The pre-filing order was largely upheld on
appeal, with an order of limited remand to the bankruptcy court to remove
merit screening from the pre-filing order and to narrow the reach of the
pre-filing order to Mr. Koshkalda’s main bankruptcy case and to the parties
involved in the bankruptcy case. Upon remand, the bankruptcy court
4 imposed an amended prefiling order consistent with the BAP’s decision.
Mr. Koshkalda did not appeal the amended prefiling order.
On January 9, 2023, pursuant to the requirements in the amended
pre-filing order, Mr. Koshkalda sought leave to file the following
pleadings: (1) an opposition to the trustee’s application for compensation;
(2) an adversary complaint against the trustee, Fox, and Seiko Epson; and
(3) an opposition to the trustee’s final report.
The bankruptcy court denied Mr. Koshkalda’s application (“Denial
Order”). The bankruptcy court found that Mr. Koshkalda procedurally
complied with the requirements of the amended pre-filing order. However,
the bankruptcy court found that Mr. Koshkalda’s anticipated issues and
arguments had already been raised and disposed of by the court.
The bankruptcy court found that Mr. Koshkalda had already, albeit
unsuccessfully, attempted to vacate the bankruptcy court’s order
approving Fox’s employment and attempted to seek orders requiring the
trustee and Fox to disgorge court approved fees. The bankruptcy court also
found that Mr. Koshkala previously attempted to sue the trustee and Fox
based on an “alleged lack of disclosure of an alleged conflict of interest on
the part of Fox.” Because the bankruptcy court found that Mr. Koshkalda’s
proposed filings were duplicitous and based on arguments previously
rejected by the court, the bankruptcy court was unconvinced that Mr.
Koshkalda’s proposed filings were “in good faith and not for the purpose
5 of harassment.” Accordingly, the bankruptcy court denied Mr. Koshkalda’s
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FILED NOT FOR PUBLICATION JUN 26 2023 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT OF THE NINTH CIRCUIT
In re: BAP No. NC-23-1022-CBG ARTEM KOSHKALDA, Debtor. Bk. No. 18-30016
ARTEM KOSHKALDA, Appellant, v. MEMORANDUM* E. LYNN SCHOENMANN, Chapter 7 Trustee, Appellee.
Appeal from the United States Bankruptcy Court for the Northern District of California Hannah L. Blumenstiel, Bankruptcy Judge, Presiding
Before: CORBIT, BRAND, and GAN, Bankruptcy Judges.
INTRODUCTION
Chapter 7 1 debtor and appellant, Artem Koshkalda, appeals the
bankruptcy court’s denial of his application for leave to file pleadings.
Previously, the bankruptcy court determined that Mr. Koshkalda was a
* This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential value, see 9th Cir. BAP Rule 8024-1. Unless specified otherwise, all chapter and section references are to the 1
Bankruptcy Code, 11 U.S.C. §§ 101-1532. vexatious litigant and entered a pre-filing order as a sanction. The pre-
filing order required that Mr. Koshkalda submit an application before filing
any pleadings demonstrating that the proposed filings were in good faith
and were not for the purpose of harassment. Because the bankruptcy court
did not err in finding that Mr. Koshkalda’s proposed filings repeated
arguments already raised and rejected, the bankruptcy court did not err in
finding that the pleadings were not in good faith and for harassment.
Accordingly, the bankruptcy court did not abuse its discretion in denying
Mr. Koshkalda’s application for leave to file pleadings. Therefore, we
AFFIRM.
FACTS
A. History
Because the parties are familiar with the facts and procedural history,
there is no need to restate them in detail here except as necessary to the
decision.
In September 2016, Seiko Epson sued Mr. Koshkalda and several
other individuals and entities for trademark infringement, trademark
counterfeiting, and related claims in Nevada district court. The Nevada
district court entered orders prohibiting Mr. Koshkalda and the other
defendants from continuing to engage in their wrongful conduct, as well as
orders freezing and/or authorizing the seizure of most of Mr. Koshkalda’s
property, including several parcels of real estate and dozens of bank
accounts. Mr. Koshkalda, however, violated several of the Nevada district
2 court orders and engaged in discovery abuses so severe that the district
court imposed case-terminating sanctions and entered a default judgment
in the amount of $12 million in favor of Seiko Epson.
In January 2018, Mr. Koshkalda filed a chapter 11 petition. On March
8, 2018, the court converted the case to one under chapter 7, after which a
chapter 7 trustee was appointed. The trustee filed an application to employ
Fox Rothschild LLP (“Fox”) as general bankruptcy counsel disclosing that
Fox concurrently represented Seiko Epson in unrelated matters. Mr.
Koshkalda did not file an opposition to the application to employ Fox. The
bankruptcy court approved Fox’s employment after determining that Fox
did not represent any interest adverse to the estate and was a disinterested
person within the meaning of the Bankruptcy Code.
In June 2018, Seiko Epson obtained an order annulling the automatic
stay. The order retroactively validated the Nevada district court’s entry of
the $12 million default judgment against Mr. Koshkalda and also permitted
Koshkalda to proceed with his appeal from that judgment. The Ninth
Circuit affirmed the district court’s judgment.
In May 2018, Seiko Epson commenced an adversary proceeding
objecting to Koshkalda’s discharge under § 727 and seeking to except the
judgment debt from discharge under § 523 (“Epson Adversary
Proceeding”). In August 2018, Mr. Koshkalda’s counsel withdrew and
since then, Mr. Koshkalda has represented himself. In September 2019, the
3 bankruptcy court granted Epson summary judgment on its claims under
§§ 727(a)(2)(A), (a)(3), and (a)(7).
During the pendency of the case, the trustee has liquidated over $5
million in estate assets, often over Mr. Koshkalda’s objections. Indeed,
unrestrained by counsel, Mr. Koshkalda mounted continuous and
repetitive challenges to the trustee’s administration of the estate.
Mr. Koshkalda also began to attack the trustee and her counsel by belatedly
challenging their employment and compensation. Mr. Koshkalda’s
unsuccessful challenges included: (1) a motion to disqualify Fox as trustee’s
counsel filed over a year after Fox’s employment was approved, to which
Mr. Koshkalda did not originally object despite notice; (2) objections to the
trustee’s and Fox’s interim fee applications; (3) motions for authority to sue
both the trustee and Fox in state court; (4) motions to vacate as void the
order authorizing Fox’s employment; and (5) various related
reconsideration motions.
Mr. Koshkalda’s frequent, meritless motions and oppositions caused
the bankruptcy court to grant the trustee’s motion to enter a pre-filing
order against Mr. Koshkalda. The pre-filing order was largely upheld on
appeal, with an order of limited remand to the bankruptcy court to remove
merit screening from the pre-filing order and to narrow the reach of the
pre-filing order to Mr. Koshkalda’s main bankruptcy case and to the parties
involved in the bankruptcy case. Upon remand, the bankruptcy court
4 imposed an amended prefiling order consistent with the BAP’s decision.
Mr. Koshkalda did not appeal the amended prefiling order.
On January 9, 2023, pursuant to the requirements in the amended
pre-filing order, Mr. Koshkalda sought leave to file the following
pleadings: (1) an opposition to the trustee’s application for compensation;
(2) an adversary complaint against the trustee, Fox, and Seiko Epson; and
(3) an opposition to the trustee’s final report.
The bankruptcy court denied Mr. Koshkalda’s application (“Denial
Order”). The bankruptcy court found that Mr. Koshkalda procedurally
complied with the requirements of the amended pre-filing order. However,
the bankruptcy court found that Mr. Koshkalda’s anticipated issues and
arguments had already been raised and disposed of by the court.
The bankruptcy court found that Mr. Koshkalda had already, albeit
unsuccessfully, attempted to vacate the bankruptcy court’s order
approving Fox’s employment and attempted to seek orders requiring the
trustee and Fox to disgorge court approved fees. The bankruptcy court also
found that Mr. Koshkala previously attempted to sue the trustee and Fox
based on an “alleged lack of disclosure of an alleged conflict of interest on
the part of Fox.” Because the bankruptcy court found that Mr. Koshkalda’s
proposed filings were duplicitous and based on arguments previously
rejected by the court, the bankruptcy court was unconvinced that Mr.
Koshkalda’s proposed filings were “in good faith and not for the purpose
5 of harassment.” Accordingly, the bankruptcy court denied Mr. Koshkalda’s
application for leave to file the three pleadings.
Mr. Koshkalda timely appealed the Denial Order.
JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and
157(b)(2)(A). We have jurisdiction under 28 U.S.C. § 158.
ISSUE
Did the bankruptcy court abuse its discretion in denying Mr.
Koshkalda’s pre-filing application?
STANDARD OF REVIEW
We review a bankruptcy court’s refusal to accept a pleading in
accordance with a pre-filing order for an abuse of discretion. Haugen v.
Isani (In re Haugen), BAP No. NV-05-1458-MoSMa, 2006 WL 6810994, at *2
(9th Cir. BAP June 15, 2006), aff'd, 243 F. App'x 288 (9th Cir. 2007) (decision
to “strike the pleadings” pursuant to a pre-filing order is reviewed “for
abuse of discretion”); In re Brendan, 683 F. App'x 640, 640 (9th Cir. 2017)
(“We review for an abuse of discretion the application of a vexatious
litigant order.”); Gilbert v. Hardee, 10 F. App'x 599, 599 (9th Cir. 2001)
(same). The bankruptcy court abuses its discretion if it applies the wrong
legal standard, misapplies the correct legal standard, or if its factual
findings are illogical, implausible, or without support in inferences that
may be drawn from the facts in the record. United States v. Hinkson, 585
F.3d 1247, 1262 (9th Cir. 2009) (en banc). A bankruptcy court does not
6 abuse its discretion by denying a request for leave to file a proposed
pleading that is “within the scope of the pre-filing order.” Erde v. Bodnar (In
re Westwood Plaza North), 730 F. App'x 547, 548 (9th Cir. 2018) (citing West v.
Procunier, 452 F.2d 645, 646 (9th Cir. 1971) (the refusal to authorize filing of
a complaint was a “proper exercise of the district court's authority to
effectuate compliance with its earlier order”)). A bankruptcy court's factual
findings are reviewed for clear error. Carrillo v. Su (In re Su), 290 F.3d 1140,
1142 (9th Cir. 2002).
DISCUSSION
The record demonstrates that Mr. Koshkalda’s proposed pleadings
would involve the same allegations and the same parties for which the
vexatious litigant pre-filing order was issued. Accordingly, the bankruptcy
court did not commit clear error in finding that Mr. Koshkalda’s proposed
filings were not in good faith and were for the purpose of harassment.
CONCLUSION
Because Mr. Koshkalda did not satisfy the requirements of the pre-
filing order, the bankruptcy court did not abuse its discretion in denying
Mr. Koshkalda’s application for leave to file pleadings. We AFFIRM.