FILED MAR 12 2012
1 SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL
2 OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. AZ-11-1504-DJuPa )
6 BRENDA KAY NARADA and ) Bk. No. 10-06316-RTBP TY ESTUS NARADA, )
7 ) Adv. Pro. No. 10-01163-RTBP Debtors. )
8 ______________________________)
)
9 BRENDA NARADA, )
)
10 Appellant, )
)
11 v. ) MEMORANDUM1 )
12 UNITED STATES OF AMERICA, )
Social Security )
13 Administration, )
)
14 Appellee. )
______________________________)
15 Argued and Submitted on February 24, 2012 16 at Phoenix, Arizona 17 Filed - March 12, 2012 18 Appeal from the United States Bankruptcy Court for the District of Arizona 19 Honorable Redfield T. Baum, Sr., Bankruptcy Judge, Presiding 20 21 Appearances: Ty Narada argued for Appellant Brenda Narada;
William C. Solomon argued for Appellee United 22 States of America, Social Security Administration 23 Before: DUNN, JURY and PAPPAS, Bankruptcy Judges.
24 25 26 1 This disposition is not appropriate for publication.
27 Although it may be cited for whatever persuasive value it may have, FRAP 32.1, it has no precedential value. See 9th Cir. BAP 28 Rule 8013-1.
1 The debtors, Brenda and Ty Narada (the “Naradas”), appeal 2 the summary judgment order in favor of the United States on 3 behalf of the Commissioner of Social Security (“SSA”) excepting a 4 debt of Brenda Narada (“Brenda”) from discharge pursuant to 5 11 U.S.C. §§ 523(a)(2) and (a)(6) and the bankruptcy court’s 6 subsequent denial of the Naradas’ motion for relief from 7 judgment.2 We VACATE and REMAND to the bankruptcy court for 8 further proceedings. 9 Factual Background 10 The Naradas filed a chapter 7 bankruptcy petition on 11 March 10, 2010, in the District of Arizona. 12 On June 25, 2010, the SSA timely filed an adversary 13 proceeding (“Adversary Proceeding”) complaint (“Complaint”) 14 against Brenda to except a debt from discharge pursuant to 15 §§ 523(a)(2)(A) and (a)(6). Specifically, the SSA alleged in the 16 Complaint that through misrepresentations and material omissions, 17 Brenda had obtained a total of $24,575 in Supplemental Security 18 Income disability benefits payments for which she was ineligible. 19 The SSA’s claims arose from Brenda’s alleged receipt of an 20 ownership interest in a motel property located in Ash Fork, 21 Arizona (“Motel Property”) on or about August 1999. The SSA’s 22 records apparently showed that Brenda had repaid $1,467.30, 23 leaving a balance owing of $23,107.70 that the SSA sought to 24
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25 Unless otherwise indicated, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and 26 all “Rule” references are to the Federal Rules of Bankruptcy 27 Procedure, Rules 1001-9037. The Federal Rules of Civil Procedure are referred to as “Civil Rules,” and the Federal Rules of 28 Evidence are referred to as “FRE.”
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1 except from Brenda’s discharge. 2 Ty Narada (“Ty”), who is not an attorney, filed a response 3 (“Response”) to the Complaint in behalf of Brenda by letter on 4 July 21, 2010.3 In the Response, Ty denied that Brenda had 5 acquired any ownership interest in the Motel Property. He also 6 denied that Brenda had “defrauded the system.” He further 7 alleged that “Brenda was threatened with imprisonment if she did 8 not sign the ‘Statement of Claimant or Other Person’ being 9 submitted by SSA as evidence against her.” (Emphasis in 10 original.) He further alleged that Brenda was a “special needs 11 individual incapable of defending herself.” 12 1. Filing of Summary Judgment Motion and Supporting Documents 13 On or about December 1, 2010, the SSA filed a motion for 14 summary judgment (“Summary Judgment Motion”) in the Adversary 15 Proceeding. The Summary Judgment Motion was supported by a 16 Statement of Facts that, in turn, relied upon 1) a memorandum and 17 report of the Office of the Inspector General of the SSA, dated 18 September 27, 2004 (“Investigation Report”), and 2) Statements of 19 Claimant or Other Person signed by Brenda and her then husband, 20 George Bannister (“George”), agreeing to repay overpayments of 21 supplemental Social Security income benefits, each dated 22 September 22, 2004. The Investigation Report and the referenced 23 statements are attached as exhibits to the statement of facts but 24 are not authenticated by affidavit or declaration. 25 26 3 Since Arizona is a community property state, Ty is very 27 interested in the disposition of this appeal because a portion of his earnings may be subject to execution to satisfy the debt to 28 SSA if its claim is excepted from Brenda’s discharge.
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1 In the Investigation Report, the SSA’s Office of the 2 Inspector General, Office of Investigations (“OI”) reported the 3 following: In 1992, George and Brenda applied for and 4 subsequently began receiving Social Security income benefits. 5 The addresses used by George and Brenda were a street address and 6 post office address, both of which were for the “Copperstate 7 Motel.” In February 1998, the Yavapai County Police Department 8 received an anonymous tip that George and Brenda owned and 9 operated the Copperstate Motel, which triggered the OI 10 investigation. 11 Following a preliminary investigation as to the ownership of 12 the Copperstate Motel, on March 13, 1998, the OI sent an SSI 13 Notice of Appointment to George and Brenda advising them that 14 they were scheduled for a “review” regarding their SSI 15 eligibility, which would entail a telephone interview(s). On 16 March 26, 1998, SSA Claims Representative Donna Learned called 17 the telephone number provided by George, and when George 18 answered, conducted the interview. George advised that he and 19 Brenda lived in a house and paid rent to his sister, Vicky Davis. 20 He further stated that neither he nor Brenda worked or received 21 any income other than their SSI benefits. He confirmed that 22 neither he nor Brenda “had their names on any deeds or mortgages, 23 nor did they have any interest in any life estates or any un- 24 probated estates.” Based on the interview, there were no 25 indications that George was ineligible for SSI income benefits. 26 Approximately fifteen minutes later, Ms. Learned called the 27 same telephone number with a follow-up question. Brenda answered 28 the telephone and said “Copperstate.” The follow-up question was
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1 whether their daughter, Tammy Bannister (“Tammy”), contributed to 2 the household. Brenda responded that Tammy worked but did not 3 contribute to the household because she was attending school. 4 Ms. Learned then inquired of Brenda why she answered the 5 telephone “Copperstate?” Brenda stated that “it was a motel 6 where she and George lived, however they did not work there. 7 Brenda also said that Vicky Davis owns the Copperstate Motel.” 8 On March 30, 1998, George and Brenda went to the SSA’s 9 Prescott, Arizona District Office and provided the following 10 information to Ms. Learned: Tammy had inherited the Copperstate 11 Motel from George’s mother, Doris Bannister, when she died in 12 1994. “Tammy was unable to acquire the property until she was 13 twenty-one (21) years old, so the [Motel Property] stayed in the 14 deceased’s name.” There was a mortgage on the Motel Property 15 that Vicky Davis paid from the Copperstate Motel business account 16 “(however Brenda stated that Vicky has Brenda sign the check to 17 the mortgage company). George and Brenda do not read very well, 18 and they have trouble completing forms and reading or writing 19 letters. Due to this they rely on Vicky and Ron Davis to assist 20 them.” George and Brenda apparently stated that they paid rent 21 of $450 each month to Vicky and Ron Davis, who did the books for 22 the Copperstate Motel. However, George and Brenda stated that 23 they received no wages or proceeds from income of the Copperstate 24 Motel and that they only answered the telephone. George and 25 Brenda provided Ms. Learned with a copy of Doris Bannister’s 26 will. Vicky Davis subsequently advised the OI in writing that 27 she was not the landlord for the residence located on the Motel 28 Property.
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1 Thereafter, OI investigated the Copperstate Motel situation 2 further, and among other information, located a classified 3 advertisement on the internet listing the Copperstate Motel for 4 sale for $200,000 and advising any interested parties to call 5 George and Brenda for details. Yavapai County Recorder’s Office 6 records reflect that Doris Bannister died in approximately 7 May 1994, and following probate, a deed of distribution reflected 8 that title to the Motel Property was held equally among Brenda, 9 George and Tammy.4 10 On September 22, 2004, the OI conducted a further in-person 11 interview of George and Brenda at the SSA Prescott, Arizona 12 District Office. After the OI officer disclosed the results of 13 its investigation to date, George and Brenda provided the 14 following information, among other things, to the OI officer: 15 In approximately August 1999, George, Brenda and Tammy received equal interest in the [Motel Property].
16 George and Brenda failed to report this acquisition to the SSA, as they were required. From about August 1999 17 through September 2004, George and Brenda participated in activities at the Copperstate Motel which could have 18 been considered work by the SSA. George and Brenda ran the [Copperstate Motel] for Tammy, who was attending 19 college in north Phoenix, Arizona. George and Brenda also failed to report this activity to the SSA, which 20 they were required. George and Brenda also admitted to attempting to sell the Copperstate Motel for 21 approximately $200,000 for gainful purpose. George and Brenda understood that they should have reported the 22 aforementioned information to the SSA, and they were 23
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There is an error in the Investigation Report with respect 24 to the Motel Property title following probate: On page 5, the 25 Investigation Report states that under the deed of distribution, the Motel Property “was equally distributed among George, Doris, 26 and Tammy Bannister.” In their Further Submissions, the Naradas 27 included an actual copy of the distribution deed, dated October 16, 1999, transferring title as 1/3 each tenants in 28 common to George, Brenda and Tammy.
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1 willing to pay any money back to the SSA which they ineligibly received. George and Brenda provided a 2 sworn and signed statement regarding the above information.
3 4 OI concluded that George and Brenda each received an approximate 5 total of $24,575 in SSI benefits for which they were ineligible. 6 George and Brenda each signed an SSA Statement of Claimant 7 or Other Person on September 22, 2004, stating the following: 8 I agree to repay the overpayment on Supplemental Security Income benefit from my on going SSI benefit 9 amount till it is repaid. 10 2. Further Filings and Proceedings on the Summary Judgment Motion
11 12 The bankruptcy court issued an Order Setting Briefing 13 Schedule (“Scheduling Order”) for the Summary Judgment Motion on 14 December 2, 2010. Counsel for the SSA prepared and served on the 15 Naradas a Notice of Hearing (“Hearing Notice”), scheduling a 16 hearing on the Summary Judgment Motion for February 18, 2011. 17 The Hearing Notice included a copy of the Scheduling Order. The 18 Scheduling Order advised the parties that they were subject to 19 the requirements of Rule 9013-1(g)5 of the bankruptcy court’s 20 21 5 Local Rule 9013-1(g) provides, in relevant part:
22 (g) Motions for Summary Judgment. In any 23 administrative case, contested matter or adversary proceeding, any motion for summary judgment shall set 24 forth separately from the memorandum of law, and in 25 full, the specific facts on which movant relies in support of the motion. The specific facts shall be set 26 forth in serial fashion, not in narrative form. As to 27 each fact, the statement shall refer to a specific portion of the record where the fact may be found 28 (continued...)
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1 local rules (“Local Rule 9013-1(g)”), meaning that each party was 2 required to file a separate statement of facts and a memorandum 3 of points and authorities supporting its position “as set forth 4 in the Rule.” The Naradas’ responsive memorandum in opposition 5 to the Summary Judgment Motion was due no later than 30 days 6 after service of the Summary Judgment Motion. The Order Setting 7 Briefing Schedule further advised that, “Failure to timely file a 8 responsive memorandum shall constitute consent to the granting of 9 the motion.” The SSA calculated the deadline for the Naradas’ 10 response in opposition to the Summary Judgment Motion under the 11 Scheduling Order as January 3, 2011. 12 The Naradas did not submit any opposition to the Summary 13 Judgment Motion by the deadline in the Scheduling Order. 14 However, on January 28, 2011, Ty filed copies of three letters 15 (collectively, “Letters”) with the bankruptcy court in behalf of 16 Brenda that he served on counsel for the SSA: The first letter, 17 and the only one of the three that reflects a signature by Ty, 18 appears to be a discovery request to the SSA. 19 20
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(...continued)
21 (i.e., affidavit, deposition, etc.). Any party 22 opposing summary judgment must comply with the foregoing in setting forth the specific facts, 23 including those facts which establish a genuine issue of material fact precluding summary judgment. . . .
24 Unless otherwise set forth in the Rules, the Local 25 Rules, or in an order of the court, . . . the party opposing or responding to a motion for summary judgment 26 shall have thirty days after service within which to 27 serve and file a responsive memorandum; the moving party shall have 15 days after service of the 28 responsive memorandum to serve and file a reply.
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1 The second letter, dated January 11, 2011, and addressed to 2 the bankruptcy court, includes Ty’s statements as to the results 3 of his investigations with regard to the issues raised in the 4 Summary Judgment Motion. With respect to ownership of the Motel 5 Property, Ty states the following: 6 Brenda’s name did not appear on any of the original transactions, but was added in a corrective deed in 7 April of 2007. I initially believed that the deed had been forged to implicate Brenda, since we had been 8 married for two years by that time. Brenda’s daughter informed me that the corrective deed is legitimate.
9 (Emphasis added.) 10 He further states that Brenda’s daughter would testify that 11 Brenda received no proceeds from the sale of the Motel Property. 12 In addition, he alleges that in 2004, Brenda “was threatened with 13 imprisonment if she did not sign a promissory note that [SSA was] 14 using as evidence against her.” Ty admits that he was not 15 present at the time, but “Brenda called me to describe what 16 happened: An armed officer was going to take her to prison if she 17 didn’t ‘sign a paper.’” 18 The third letter, which is signed neither by Ty nor Brenda 19 and is addressed to “Whom it may concern,” although it appears in 20 context to be addressed to SSA’s counsel, includes further 21 factual statements relating to the legitimacy of Brenda’s claim 22 for Social Security benefits and her alleged lack of any interest 23 in the Motel Property. 24 On or about February 11, 2011, within the 15-day period for 25 filing replies to responses opposing motions for summary judgment 26 under Local Rule 9013-1(g), SSA filed a Motion for Summary 27 Disposition (“Disposition Motion”), requesting that the Summary 28 Judgment Motion be granted based on Brenda’s failure to respond
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1 to the motion by the deadline required in the Scheduling Order 2 and her resulting consent to the granting of the Summary Judgment 3 Motion, as provided in the Scheduling Order. In the Disposition 4 Motion, the SSA noted the late filing of the Letters on 5 January 28, 2011, but argued that none of the Letters sufficed as 6 a response in opposition to the Summary Judgment Motion, as they 7 set forth nothing more than unsupported statements of Ty, who was 8 not married to Brenda during the period in question. However, 9 the SSA noted that the January 11, 2011 letter to the bankruptcy 10 court stated that a deed listing Brenda as an owner of the Motel 11 Property was “legitimate” according to her daughter. 12 Thereafter, for reasons that we cannot fathom, counsel for 13 the SSA submitted an order, purportedly based on the Disposition 14 Motion, providing that the Adversary Proceeding “is hereby 15 dismissed with prejudice, with each party to bear its own costs 16 and attorneys’ fees,” which the bankruptcy court promptly entered 17 on February 16, 2011. 18 However, recognizing their fatal error, on February 17, 19 2011, counsel for the SSA filed a motion to vacate the erroneous 20 order previously submitted and submitted a new form of order 21 granting the Summary Judgment Motion in its entirety. On 22 February 17, 2011, the bankruptcy court entered orders vacating 23 the previously entered dismissal order and granting the Summary 24 Judgment Motion. Accordingly, the hearing scheduled for 25 February 18, 2011, was taken off the calendar. 26 3. The Naradas’ Motion for Relief from the Summary Judgment Order
27 28 On March 3, 2011, the Naradas filed a Motion to Review (Rule
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1 59) and Motion for Relief (Rule 60) (“Relief Motion”), requesting 2 the bankruptcy court to grant them relief from the order granting 3 the Summary Judgment Motion, arguing that they did present an 4 opposition to the Summary Judgment Motion in the Letters and that 5 Brenda did not obtain Social Security benefits by fraud, and she 6 never had an ownership interest in the Motel Property. The SSA 7 filed a response to the Relief Motion, arguing that, in fact, 8 Brenda did not file a timely response to the Summary Judgment 9 Motion, but in any event, the Letters did not raise a genuine 10 issue of material fact sufficient to justify vacating the summary 11 judgment order. 12 On April 27, 2011, the bankruptcy court held a hearing 13 (“Initial Hearing”) on the Relief Motion at which counsel for the 14 SSA and both of the Naradas were present. At the Initial 15 Hearing, Brenda was not put under oath, but she stated that 16 although she cleaned rooms and did some paperwork with respect to 17 the Motel Property, she “never really was in charge of it.” Tr. 18 of April 27, 2011 hr’g, 3:1-3. In response to the bankruptcy 19 court’s questions regarding her signing the Statement of Claimant 20 or Other Person, Brenda stated that, “the officer was there at 21 the social security place, told me I had to agree everything what 22 they said and I had to sign the papers that he filled [sic]. If 23 I didn’t, I would go to jail.” She denied that the Statement of 24 Claimant or Other Person that she signed was true and correct. 25 In further response to the bankruptcy court’s questions, Brenda 26 stated that she did not have a lawyer and was not getting legal 27 advice from anybody. 28 After hearing Brenda’s statements, the bankruptcy court
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1 strongly urged the Naradas to obtain legal advice and if possible 2 have a lawyer representing them at a continued hearing on the 3 Relief Motion. The bankruptcy court then continued the hearing 4 to July 22, 2011. 5 On July 13, 2011, the bankruptcy court received further 6 written submissions (the “Further Submissions”) from Ty in behalf 7 of Brenda. In his cover letter enclosing the Further 8 Submissions, Ty reiterated the allegations stated in the Response 9 that Brenda is a special needs person, whose “speech and learning 10 disability renders her incapable of adequately defending 11 herself.” As noted earlier, the Further Submissions included a 12 copy of a deed of distribution from Doris Bannister’s probate, 13 dated October 16, 1999, vesting title to the Motel Property in 14 George, Brenda and Tammy as 1/3 tenants in common. 15 The continued hearing (“Final Hearing”) on the Relief Motion 16 was held on July 22, 2011, as scheduled, with the Naradas and 17 counsel for the SSA in attendance. At the Final Hearing, Ty 18 advised the bankruptcy court that the Naradas had been unable to 19 obtain counsel and that they had submitted all of their evidence 20 to the bankruptcy court for consideration. In response, counsel 21 for the SSA argued that nothing submitted by the Naradas raised 22 any genuine issue of material fact that would justify vacating 23 the order granting the Summary Judgment Motion. Counsel for the 24 SSA consequently urged that the Relief Motion be denied. The 25 bankruptcy court then took the matter under advisement. 26 On August 30, 2011, the bankruptcy court entered a Minute 27 Entry/Order ruling that based on the parties’ arguments and 28 submissions with respect to the Relief Motion, “the court is not
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1 convinced that the judgment that has been entered was erroneously 2 entered by the court or that other reasons were presented that 3 warrant the vacating of that judgment.” On September 12, 2011, 4 the bankruptcy court entered an order denying the Relief Motion. 5 The Naradas timely appealed. 6 Jurisdiction 7 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 8 §§ 1334 and 157(b)(2)(I), and we have jurisdiction under 28 9 U.S.C. § 158.6 10 Issue 11 Did the bankruptcy court err in entering a summary judgment 12 order excepting Brenda’s debt to the SSA from her discharge in 13 chapter 7?7 14 15 6 We note that although the bankruptcy court docket reflects 16 that a “Judgment” was signed on February 17, 2011 (Docket No.
20), the parties’ excerpts of record include only the order 17 granting the Summary Judgment Motion on that date and no separate judgment. Under Civil Rule 56, generally a separate document 18 embodying a final judgment that is distinct from the order 19 granting a motion for summary judgment should be entered. See Rule 9021. However, if in fact a separate judgment in favor of 20 the SSA has not been entered in the Adversary Proceeding, the parties here have waived that requirement by treating the order 21 granting the Summary Judgment Motion as a final judgment. See 22 Casey v. Albertson’s Inc., 362 F.3d 1254, 1256-59 (9th Cir.
2004), cert. denied, 543 U.S. 870 (2004).
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The Naradas actually list four issues for consideration in 24 the “Statement of Issues” in Appellants’ Brief, the first of 25 which is covered by the question stated above. The second issue, we assume raised by Ty, is the unfairness of the impact of 26 Arizona’s community property laws on Ty and his children in the 27 event that Brenda’s debt to the SSA is excepted from her discharge. This issue was not raised before the bankruptcy court 28 (continued...)
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1 Standards of Review 2 We review de novo the bankruptcy court’s ruling granting a 3 motion for summary judgment. Ghomeshi v. Sabban (In re Sabban), 4 600 F.3d 1219, 1221 (9th Cir. 2010). 5 The bankruptcy court’s interpretation and application of a 6 local rule are reviewed for abuse of discretion. Price v. 7 Lehtinen (In re Lehtinen), 564 F.3d 1052, 1058 (9th Cir. 2009). 8 Likewise, we review a bankruptcy court’s denial of a motion to 9 alter or amend a judgment or for reconsideration for abuse of 10 discretion. Ta Chong Bank Ltd. v. Hitachi High Tech. Am., Inc., 11 610 F.3d 1063, 1066 (9th Cir. 2010); Triad Commercial Captive Co. 12 v. Carmel (In re GTI Capital Holdings, LLC), BAP No. AZ-09-1053- 13 JuMkD (Memorandum, p. 12, August 20, 2009). 14 We apply a two-part test in determining whether the 15 bankruptcy court abused its discretion. United States v. 16
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17 (...continued)
either in the Complaint or the Response or in the Letters filed 18 in opposition to the Summary Judgment Motion. It makes its first 19 appearance in the Further Submissions filed by the Naradas in support of the Relief Motion. Accordingly, it is not an issue 20 appropriate for our determination in this appeal.
The third issue raises a complaint as to the Naradas’
21 inability to obtain a copy of the “letter that granted SSI to 22 Brenda” from the SSA. Ty argues that such letter would “prove”
that Brenda is incapable of defrauding the SSA. In light of our 23 disposition of this appeal, discovery questions can be addressed in further proceedings before the bankruptcy court.
24 Finally, the Naradas point out that the Adversary Proceeding 25 was at one point dismissed with prejudice. As discussed in the Factual Background above, the submission by SSA’s counsel of the 26 dismissal order that was signed by the bankruptcy court was a 27 mistake that was corrected the day after it was signed. That order was vacated and does not present a viable issue in this 28 appeal.
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1 Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en banc). 2 First, we consider de novo whether the bankruptcy court applied 3 the correct legal standard to the relief requested. Id. Then, 4 we review the bankruptcy court’s fact findings for clear error. 5 Id. at 1262 & n.20. We must affirm the bankruptcy court’s 6 findings unless we conclude that they are “(1) ‘illogical,’ 7 (2) ‘implausible,’ or (3) without ‘support in inferences that may 8 be drawn from the facts in the record.’” Id. 9 Discussion 10 1. Summary Judgment Standards 11 Granting a motion for summary judgment is appropriate only 12 if there is no genuine dispute as to any material fact, and the 13 moving party is entitled to judgment as a matter of law. Civil 14 Rule 56(a); Rule 7056; State Farm Mut. Auto Ins. Co. v. Davis, 15 7 F.3d 180, 182 (9th Cir. 1993). “Material facts” are such facts 16 as may affect the outcome of a case under governing law. 17 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A 18 dispute concerning a material fact is “genuine” only if there is 19 sufficient evidence to justify a finding in favor of the non- 20 moving party. Id. However, all justifiable inferences from the 21 evidence presented are to be considered in favor of the non- 22 moving party. Id. at 255. 23 2. The Evidence before the Bankruptcy Court 24 Section 523(a)(2)(A) excepts from a debtor’s discharge any 25 debt for money obtained by false pretenses, a false 26 representation, or actual fraud. In order to meet its burden to 27 except a debt from discharge under § 523(a)(2)(A), a creditor 28 must establish each of five elements by a preponderance of the
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1 evidence. 2 (1) misrepresentation, fraudulent omission or deceptive conduct by the debtor; (2) knowledge of the falsity or 3 deceptiveness of his statement or conduct; (3) an intent to deceive; (4) justifiable reliance by the 4 creditor on the debtor’s statement or conduct; and (5) damage to the creditor proximately caused by its 5 reliance on the debtor’s statement or conduct. 6 Turtle Rock Meadows Homeowners Ass’n v. Slyman (In re Slyman), 7 234 F.3d 1081, 1085 (9th Cir. 2000). However, recognizing the 8 reality that few debtor defendants are likely to admit to 9 defrauding their creditors, “fraudulent intent may be established 10 by circumstantial evidence, or by inferences drawn from a course 11 of conduct.” Devers v. Bank of Sheridan, Mont. (In re Devers), 12 759 F.2d 751, 753-54 (9th Cir. 1985). See also First Beverly 13 Bank v. Adeeb (In re Adeeb), 787 F.2d 1339, 1343 (9th Cir. 1986). 14 In the Complaint, the SSA alleged that Brenda had obtained 15 $24,575 in Supplemental Security Income disability benefits 16 payments for which she was ineligible as a result of material 17 omissions and misrepresentations with respect to an ownership 18 interest in the Motel Property and George and Brenda’s use of the 19 Motel Property for “substantial gainful activity” from 20 approximately September 1999 to September 2004. The only 21 evidence submitted by the SSA in support of the Summary Judgment 22 Motion was the Investigation Report and the Statements of 23 Claimant or Other Person signed by George and Brenda on 24 September 22, 2004. However, neither the Investigation Report 25 nor the statements were authenticated or identified by affidavit 26 or declaration, which is a condition precedent to their 27 admissibility as evidence under FRE 901(a). 28 In deciding a motion for summary judgment, a bankruptcy
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1 court only can consider admissible evidence. 2 A trial court can only consider admissible evidence in ruling on a motion for summary judgment. See [Civil 3 Rule] 56(e); Beyene v. Coleman Sec. Servs., Inc., 854 F.2d 1179, 1181 (9th Cir. 1988). Authentication is a 4 “condition precedent to admissibility,” and this condition is satisfied by “evidence sufficient to 5 support a finding that the matter in question is what its proponent claims.” [FRE] 901(a). We have 6 repeatedly held that unauthenticated documents cannot be considered in a motion for summary judgment. See 7 Cristobal v. Siegel, 26 F.3d 1488, 1494 (9th Cir.
1994); Hal Roach Studios, Inc. v. Richard Feiner & Co., 8 Inc., 896 F.2d 1542, 1550-51 (9th Cir. 1989); Beyene, 854 F.2d at 1182; Canada v. Blain’s Helicopters, Inc., 9 831 F.2d 920, 925 (9th Cir. 1987); Hamilton v. Keystone Tankship Corp., 539 F.2d 684, 686 (9th Cir. 1976).
10 11 Orr v. Bank of America, NT & SA, 285 F.3d 764, 773 (9th Cir. 12 2002) (emphasis added). 13 In addition, the Investigation Report is hearsay,8 and there 14 is nothing in the record to establish that it would be admissible 15 in evidence under an exception to the general rule that hearsay 16 evidence is not admissible.9 See FRE 802. 17 Consequently, no admissible evidence was submitted in 18 support of the Summary Judgment Motion, and on that basis, it was 19 error for the bankruptcy court to grant the motion in spite of 20 the Naradas’ ineffective response, in light of the requirements 21 22 23 8 Under FRE 801(c), “hearsay” is defined as “a statement, 24 other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the 25 matter asserted.” 26 9 The exception for “public records and reports” under FRE 27 803(8) may apply with respect to the Investigation Report, but that is a matter we leave to the bankruptcy court for 28 consideration following remand.
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1 of the Scheduling Order and Local Rule 9013-1(g).10 We conclude 2 in these circumstances that the order granting the Summary 3 Judgment Motion should be vacated, and the Adversary Proceeding 4 should be remanded to the bankruptcy court for further 5 proceedings. Accordingly, any issues with respect to the Relief 6 Motion are moot. 7 Conclusion 8 For the foregoing reasons, we VACATE the summary judgment 9 order and REMAND to the bankruptcy court for further appropriate 10 proceedings. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
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At oral argument, counsel for the SSA admitted that even 26 considering the content of the Investigation Report, there was 27 insufficient evidence to meet the burden of proof on each element to support a judgment in favor of the SSA on its § 523(a)(6)
28 claim.