In re: Dennis Adrian Vazquez

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: December 13, 2013
• Docket: CC-13-1014-KuBaPa
• Status: Unpublished

Opinion

FILED DEC 13 2013 1 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 2 UNITED STATES BANKRUPTCY APPELLATE PANEL 3 OF THE NINTH CIRCUIT 4 5 In re: ) BAP No. CC-13-1014-KuBaPa ) 6 DENNIS ADRIAN VAZQUEZ, ) Bk. No. SA 09-19259-CB ) 7 Debtor. ) Adv. No. SA 09-01786-CB ______________________________) 8 ) DENNIS ADRIAN VAZQUEZ, ) 9 ) Appellant, ) 10 ) v. ) MEMORANDUM* 11 ) AAA BLUEPRINT & DIGITAL ) 12 REPROGRAPHICS, ) ) 13 Appellee. ) ______________________________) 14 Submitted Without Oral Argument 15 on November 21, 2013** 16 Filed – December 13, 2013 17 Appeal from the United States Bankruptcy Court for the Central District of California 18 Honorable Catherine E. Bauer, Bankruptcy Judge, Presiding 19 20 Appearances: Appellant Dennis Adrian Vazquez, pro se, on brief; Mark W. Huston of Silverstein & Huston, on brief, 21 for appellee AAA Blueprint & Digital Reprographics. 22 23 24 * This disposition is not appropriate for publication. 25 Although it may be cited for whatever persuasive value it may 26 have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1. 27 ** By order entered July 5, 2013, this appeal was deemed 28 suitable for submission without oral argument. 1 Before: KURTZ, BALLINGER*** and PAPPAS, Bankruptcy Judges. 2 3 INTRODUCTION 4 Debtor Dennis Adrian Vazquez appeals from a summary judgment 5 excepting from discharge under 11 U.S.C. § 523(a)(6)1 the 6 judgment debt he owes to AAA Blueprint & Digital Reprographics 7 (“AAA”). Vazquez also appeals from the bankruptcy court’s denial 8 of his reconsideration motion. We AFFIRM. 9 FACTS 10 Vazquez owned and controlled a document printing, copying 11 and digital reproduction business known as Alliance Reprographics 12 (“Alliance”). Jimmy Ibarra, a former employee of AAA’s, left AAA 13 and immediately went to work for Alliance. Ibarra took from AAA 14 a confidential customer price list, and he used that list to 15 successfully solicit AAA’s customers for Alliance’s benefit. 16 AAA sued Ibarra and Alliance (but not Vazquez) in the Orange 17 County Superior Court (Case No. 05CC07362) for misappropriation 18 of trade secrets, unfair competition, intentional interference 19 with contractual relations, intentional interference with 20 prospective economic advantage, conversion and constructive 21 trust. While the court ultimately found in favor of AAA on all 22 of its causes of action except for conversion, it is clear from 23 the parties’ joint list of issues and the state court’s statement 24 of decision that the lawsuit focused and hinged on the 25 *** 26 Hon. Eddward P. Ballinger, Jr., United States Bankruptcy Judge for the District of Arizona, sitting by designation. 27 1 Unless specified otherwise, all chapter and section 28 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.

2 1 misappropriation of trade secrets cause of action. Ultimately, 2 the state court awarded AAA $60,000 in compensatory damages, 3 $120,000 in exemplary damages and roughly $100,000 in attorney’s 4 fees (“First State Court Judgment”). The California Court of 5 Appeal affirmed the First State Court Judgment. 6 In post-judgment settlement discussions between AAA’s 7 principal Peter Bouchier and Alliance’s principal Vazquez, 8 Vazquez told Bouchier that, if Bouchier would not agree to accept 9 $100,000 in full satisfaction of the First State Court Judgment, 10 Vazquez would close down Alliance and open a new business across 11 the street. 12 True to his word, Vazquez shortly thereafter wound down most 13 of Alliance’s operations and transferred virtually the entire 14 business, including all of its assets, to a new company named All 15 Blueprint, Inc. (“All Blueprint”). 16 Based on Vazquez’s conduct following entry of the First 17 State Court Judgment, AAA sued Vazquez, his live-in girlfriend 18 Melissa Huerta, and All Blueprint for actual and constructive 19 fraudulent transfers, and for a determination that both Alliance 20 and All Blueprint were the alter egos of Vazquez and Huerta. 21 AAA filed its alter ego and fraudulent transfer lawsuit (Case 22 No. 30-2007-00100248) in the same state court that had presided 23 over its trade secret misappropriation lawsuit. 24 After a two-day bench trial, the state court issued its 25 written findings in the form of a minute order. The state 26 court’s findings speak for themselves. Among other things, the 27 state court found: 28 Dennis Adrian Vazquez and Melissa Huerta conspired to fraudulently transfer assets from Alliance

3 1 Reprographics Inc to All Blueprint Inc for the purpose of hindering judgment creditor AAA from collecting its 2 judgment against Alliance. 3 Minute Order (July 27, 2009) at p. 1. 4 In support of its fraudulent transfer finding, the state 5 court also found: (1) that Vazquez threatened Bouchier that he 6 would close down Alliance and open up a new business across the 7 street unless Bouchier accepted a $100,000 settlement offer; 8 (2) that Huerta formed All Blueprint “[f]our days after the 9 statement of decision was entered” in the trade secrets 10 misappropriation lawsuit; (3) that, over the course of a few 11 months, Alliance transferred “virtually the entire business” 12 including all of its assets to All Blueprint; (4) that, while 13 Huerta supposedly owned and controlled All Blueprint and 14 supposedly was entering into competition with Alliance, in 15 reality Huerta and Vazquez jointly controlled All Blueprint, 16 which was for all practical purposes “the same company as 17 Alliance”; (5) Huerta and Vazquez formed All Blueprint and 18 transferred all of Alliance’s assets to All Blue Print “for the 19 sole purpose of hindering [AAA’s] efforts to collect its 20 judgment”; and (6) by conducting himself in this manner, “Vazquez 21 committed the wrongful act of hindering AAA in trying to collect 22 the judgment.” Id. at p. 2. 23 Based on these and related facts, the state court further 24 held that Vazquez and All Blueprint were the alter egos of 25 Alliance and that Vazquez and Huerta were the alter egos of 26 All Blueprint. 27 With respect to damages, the state court in essence ruled 28 that, because all three defendants would be held jointly and

4 1 severally liable for the full amount of the First State Court 2 Judgment by virtue of the court’s alter ego determination, the 3 First State Court Judgment would suffice to cover AAA’s 4 compensatory damages flowing from the fraudulent transfers. The 5 state court also declined to award any exemplary damages on 6 account of the fraudulent transfers because AAA presented 7 insufficient evidence to enable the state court to determine each 8 defendant’s net worth. 9 The state court entered its fraudulent transfer and alter 10 ego judgment (“Second State Court Judgment”) in July 2009, and 11 Vazquez appealed that judgment.2 12 After Vazquez filed his bankruptcy case in August 2009, AAA 13 commenced the underlying adversary proceeding objecting to 14 Vazquez’s discharge and seeking to except from discharge 15 Vazquez’s judgment debt arising from the state court judgments. 16 Initially, AAA stated several different claims for relief; 17 however, by the time AAA filed its operative complaint, its third 18 amended complaint, all that remained was a single claim for 19 relief under § 523(a)(6), seeking to except from discharge 20 Vazquez’s judgment debt as a debt arising from a willful and 21 2 The California Court of Appeal’s decision regarding the 22 Second State Court Judgment is not properly part of the record 23 before us because it issued that decision on April 2, 2013, after the bankruptcy court ruled and while the appeal before this Panel 24 was pending. Nonetheless, it is worth noting that the California Court of Appeal affirmed the Second State Court Judgment in its 25 entirety and that the California Supreme Court denied review. To 26 the extent relevant to our decision, we can and do take judicial notice of the California Court of Appeal’s affirmance of the 27 Second State Court Judgment and the California Supreme Court’s denial of review. See United States ex rel. Robinson Rancheria 28 Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992).

5 1 malicious injury. That single claim for relief explicitly relied 2 on the same events and conduct from which AAA’s state court 3 judgments arose. 4 AAA filed a summary judgment motion, in which it relied on 5 the issue preclusive effect of the state court’s findings in both 6 state court lawsuits. Vazquez opposed the motion, but the 7 bankruptcy court ruled in favor of AAA and granted its summary 8 judgment motion. In essence, the bankruptcy court held that the 9 issue preclusive effect of the state court’s actual fraudulent 10 transfer findings established that Vazquez’s judgment debt arose 11 from a willful and malicious injury. In addition to this 12 holding, the bankruptcy court apparently adopted in its entirety 13 AAA’s proposed statement of uncontroverted facts and conclusions 14 of law, which statement in turn was largely derived from the 15 findings in the state court lawsuits. 16 After the bankruptcy court entered its order granting 17 summary judgment, Vazquez timely filed a motion for 18 reconsideration.3 In that motion, Vazquez argued for the first 19 time that issue preclusion was not applicable to the Second State 20 Court Judgment because that judgment was the subject of a pending 21 appeal. This argument was contrary to Vazquez’s position in 22 response to AAA’s summary judgment motion. Indeed, in his 23 3 24 Neither party included in their excerpts of record copies of the papers they filed in relation to the reconsideration 25 motion. Nor did they include a copy of the court’s order denying 26 the reconsideration motion. Nonetheless, we have reviewed these documents by accessing the bankruptcy court’s electronic docket. 27 We can and do take judicial notice of the filing and contents of these documents. See O'Rourke v. Seaboard Sur. Co. (In re E.R. 28 Fegert, Inc.), 887 F.2d 955, 957–58 (9th Cir. 1989).

6 1 opposition to the summary judgment motion, Vazquez had explicitly 2 conceded that the finality element for issue preclusion had been 3 satisfied. 4 The bankruptcy court denied Vazquez’s reconsideration 5 motion, and Vazquez timely filed a notice of appeal, referencing 6 the summary judgment but not referencing the denial of the 7 reconsideration motion. 8 JURISDICTION 9 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 10 §§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C. 11 § 158. 12 ISSUES 13 Did the bankruptcy court commit reversible error by applying 14 issue preclusion and granting summary judgment against Vazquez? 15 Did the bankruptcy court abuse its discretion when it denied 16 Vazquez’s reconsideration motion? 17 STANDARDS OF REVIEW 18 We review de novo the bankruptcy court’s grant of summary 19 judgment. Boyajian v. New Falls Corp. (In re Boyajian), 564 F.3d 20 1088, 1090 (9th Cir. 2009); Lopez v. Emergency Serv. Restoration, 21 Inc. (In re Lopez), 367 B.R. 99, 103 (9th Cir. BAP 2007). 22 The nondischargeability of a particular debt is a mixed 23 question of law and fact also subject to de novo review. Peklar 24 v. Ikerd (In re Peklar), 260 F.3d 1035, 1037 (9th Cir. 2001); 25 Honkanen v. Hopper (In re Honkanen), 446 B.R. 373, 378 (9th Cir. 26 BAP 2011). 27 We also review de novo the bankruptcy court's determination 28 that issue preclusion is available. In re Lopez, 367 B.R. at

7 1 103; Kelly v. Okoye (In re Kelly), 182 B.R. 255, 258 (9th Cir. 2 BAP 1995), aff'd, 100 F.3d 110 (9th Cir. 1996). 3 Once we determine that issue preclusion is available, we 4 review the bankruptcy court’s decision to apply it for an abuse 5 of discretion. In re Lopez, 367 B.R. at 103. We also review for 6 an abuse of discretion the bankruptcy court’s denial of the 7 reconsideration motion. Grantham v. Cory (In re Flamingo 55, 8 Inc.), 646 F.3d 1253, 1254 n.3 (9th Cir. 2011); First Ave. W. 9 Bldg. LLC v. James (In re OneCast Media, Inc.), 439 F.3d 558, 561 10 (9th Cir. 2006). 11 A bankruptcy court abuses its discretion if it does not 12 apply the correct legal rule or if its findings of fact are 13 illogical, implausible or without support in the record. United 14 States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)(en banc). 15 DISCUSSION 16 A. The Summary Judgment Ruling 17 A bankruptcy court may grant a summary judgment motion when 18 the pleadings and evidence demonstrate “that there is no genuine 19 issue as to any material fact and that the moving party is 20 entitled to a judgment as a matter of law.” Celotex Corp. v. 21 Catrett, 477 U.S. 317, 322 (1986). All facts genuinely in 22 dispute must be viewed “in the light most favorable to the 23 non-moving party.” Scott v. Harris, 550 U.S. 372, 380 (2007). 24 And all reasonable inferences that can be drawn in the non-moving 25 party’s favor must be so drawn. Id. at 378. 26 Issue preclusion applies in actions seeking to except a debt 27 from discharge. Grogan v. Garner, 498 U.S. 279, 284 (1991). We 28 apply California issue preclusion law to determine the preclusive

8 1 effect of the two California state court judgments at issue 2 herein. Gayden v. Nourbakhsh (In re Nourbakhsh), 67 F.3d 798, 3 800 (9th Cir. 1995). Under California issue preclusion law, the 4 proponent must establish the following: 5 1) the issue sought to be precluded . . . must be identical to that decided in the former proceeding; 6 2) the issue must have been actually litigated in the former proceeding; 3) it must have been necessarily 7 decided in the former proceeding; 4) the decision in the former proceeding must be final and on the merits; 8 and 5) the party against whom preclusion is being sought must be the same as the party to the former 9 proceeding. 10 In re Honkanen, 446 B.R. at 382; Lucido v. Super. Ct., 51 Cal.3d 11 335, 341 (1990). 12 In addition, before applying issue preclusion, the 13 bankruptcy court also must determine “whether imposition of issue 14 preclusion in the particular setting would be fair and consistent 15 with sound public policy." Khaligh v. Hadaegh (In re Khaligh), 16 338 B.R. 817, 824-25 (9th Cir. BAP 2006) (citing Lucido, 17 51 Cal.3d at 342-43). 18 On appeal, Vazquez argues that the bankruptcy court should 19 not have applied issue preclusion because the issues decided in 20 the state court litigation were not identical to the dispositive 21 factual issues underlying AAA’s § 523(a)(6) claim – whether 22 Vazquez’s conduct was both “willful” and “malicious” within the 23 meaning of § 523(a)(6). We disagree. The state court’s 24 fraudulent transfer determination and its associated findings 25 established both willfulness and maliciousness for purposes of 26 nondischargeability under § 523(a)(6). 27 Section 523(a)(6) excepts from discharge debts "for willful 28 and malicious injury by the debtor to another entity or to the

9 1 property of another entity." Both willfulness and maliciousness 2 must be proven in order to apply § 523(a)(6). Ormsby v. First 3 Am. Title Co. of Nev. (In re Ormsby), 591 F.3d 1199, 1206 (9th 4 Cir. 2010). 5 In the context of § 523(a)(6), a debtor’s conduct is willful 6 only if he or she actually intended to cause injury or actually 7 believed that injury was substantially certain to occur. Id.; 8 In re Khaligh, 338 B.R. at 831. Both aspects of the willfulness 9 standard inquire into the debtor’s subjective state of mind, and 10 both can be proven by circumstantial evidence. Carrillo v. Su 11 (In re Su), 290 F.3d 1140, 1144-47 & n.6. (9th Cir. 2002); 12 In re Khaligh, 338 B.R. at 831. 13 In the state court litigation, AAA stated a cause of action 14 against Vazquez for actual fraudulent transfer. In that cause of 15 action, AAA alleged that, by way of his transfer of substantially 16 all of Alliance’s assets to All Blueprint, Vazquez actually 17 intended to hinder AAA’s efforts to collect on the First State 18 Court Judgment. These allegations are consistent with the 19 elements for an actual fraudulent transfer under Cal. Civ. Code 20 § 3439.04(a)(1), which applies to transfers made by a debtor 21 “[w]ith actual intent to hinder, delay, or defraud” one of its 22 creditors. Id.; see also Beverly v. Wolkowitz (In re Beverly), 23 374 B.R. 221, 235 (9th Cir. BAP 2007). 24 Moreover, the state court explicitly determined that 25 Vazquez, in concert with Huerta, fraudulently transferred 26 Alliance’s assets, “virtually the entire business,” to All 27 Blueprint “for the sole purpose of hindering [AAA’s] efforts to 28 collect its judgment.” State Court Minute Order (July 27, 2009),

10 1 at pp. 1-2. We agree with the bankruptcy court that the state 2 court’s finding regarding Vazquez’s subjective motive for 3 transferring Alliance’s assets meets § 523(a)(6)’s willfulness 4 requirement. In other words, the state court’s finding that 5 Vazquez sought to hinder AAA’s collection efforts is tantamount 6 to a finding that Vazquez intended to harm AAA by transferring 7 all of Alliance’s assets to All Blueprint. 8 In turn, with respect to malice, a debtor’s conduct is 9 malicious for purposes of § 523(a)(6) when the conduct “‘involves 10 (1) a wrongful act, (2) done intentionally, (3) which necessarily 11 causes injury, and (4) is done without just cause or excuse.’” 12 In re Ormsby, 591 F.3d at 1207 (quoting Petralia v. Jercich 13 (In re Jercich), 238 F.3d 1202, 1209 (9th Cir. 2001)). “Malice 14 may be inferred based on the nature of the wrongful act.” Id. 15 Here, the state court explicitly found that Vazquez’s 16 conduct was wrongful. This wrongfulness, furthermore, is self- 17 evident given the very nature of Vazquez’s conduct in 18 transferring Alliance’s assets for the purpose of hindering AAA. 19 The state court also found his conduct intentional. The 20 intentional nature of Vazquez’s conduct is reflected in the state 21 court’s account of Vazquez conspiring and plotting with Huerta to 22 interfere with AAA’s collection efforts. That the act of 23 hindering AAA’s collection efforts necessarily harmed AAA also is 24 self-evident. 25 Nor is there any genuine doubt that Vazquez had no just 26 cause or excuse for his conduct. He apparently asserted in the 27 state court that he transferred Alliance’s assets to All 28 Blueprint because he desired to set up Huerta in a reprographics

11 1 business separate and independent from Alliance, but the state 2 court in its findings unequivocally rejected this assertion. In 3 any event, even if there had been any truth to this assertion, it 4 would not as a matter of law constitute just cause or excuse for 5 Vazquez’s wrongful acts, given Vazquez’s specific intent to harm 6 AAA. See In re Sicroff, 401 F.3d at 1107 (holding that specific 7 intent to injure negated proffered just cause or excuse for the 8 debtor’s wrongful conduct); see also Murray v. Bammer 9 (In re Bammer), 131 F.3d 788 (9th Cir. 1997) (holding that 10 debtor’s subjective desire to help his mother out of her 11 financial difficulties was not just cause or excuse for debtor’s 12 knowing participation in fraud against mother’s creditors). 13 Vazquez has not raised on appeal any arguments implicating 14 any public policy concerns associated with the bankruptcy court’s 15 application of issue preclusion against him. See generally 16 In re Khaligh, 338 B.R. at 824-25. Nor has our review of the 17 record brought to our attention any such policy concerns. To the 18 contrary, the bankruptcy court’s application of issue preclusion 19 here strikes us as a commonplace and appropriate usage of the 20 doctrine. Thus, we need not and will not remand for a public 21 policy finding. See First Yorkshire Holdings, Inc. v. Pacifica 22 L 22, LLC. (In re First Yorkshire Holdings, Inc.), 470 B.R. 864, 23 871 (9th Cir. BAP 2012) (citing Simeonoff v. Hiner, 249 F.3d 883, 24 891 (9th Cir. 2001)) (stating that remand for further findings is 25 unnecessary when the existing findings and record provide us with 26 a “full understanding” of the questions subject to review). 27 Vazquez makes only one other argument in his appeal brief 28 implicating the bankruptcy court’s summary judgment ruling. He

12 1 argues that he was not aware that the state court’s fraudulent 2 transfer and intent findings might serve as grounds for excepting 3 his debt to AAA from discharge under § 523(a)(6). We are 4 perplexed by Vazquez’s claimed ignorance that the state court’s 5 fraudulent transfer and intent findings were in play. He was 6 represented by counsel during the entire course of the adversary 7 proceeding, and the findings in question are featured prominently 8 in both AAA’s third amended complaint and in AAA’s summary 9 judgment papers. 10 While difficult to follow, Vazquez seems to believe that the 11 state court’s fraudulent transfer and intent findings could not 12 properly serve as the factual predicate for an exception to 13 discharge under § 523(a)(6) unless AAA’s nondischargeability 14 complaint also contained a fraudulent transfer claim for relief. 15 Suffice it to say that we are not aware of any law or rule of 16 procedure supporting Vazquez’s novel belief. 17 In sum, Vazquez has not pointed us to any error in the 18 bankruptcy court’s determination that issue preclusion could be 19 applied or to any abuse of discretion arising from the bankruptcy 20 court’s decision to impose issue preclusion as a basis for 21 granting AAA’s summary judgment motion. Accordingly, we will 22 uphold the bankruptcy court’s summary judgment ruling. See In re 23 Khaligh, 338 B.R. at 831-32.4 24 25 4 The state court’s misappropriation of trade secrets 26 findings and its alter ego findings possibly could serve as an alternate ground for affirming the bankruptcy court’s issue 27 preclusion and summary judgment rulings. However, in light of 28 our decision based on the preclusive effect of the state court’s fraudulent transfer findings, we do not need to reach this issue.

13 1 B. The Denial of the Reconsideration Motion 2 Vazquez also argues in his appeal brief that the Second 3 State Court Judgment was not a final decision for issue 4 preclusion purposes because it was the subject of an appeal at 5 the time the bankruptcy court granted summary judgment. Under 6 California law, a judgment will not be given preclusive effect 7 until the adverse party’s appeal rights have been exhausted. 8 See Abelson v. Nat. Union Fire Ins. Co., 28 Cal.App.4th 776, 787 9 (1994)(citing cases). 10 Vazquez raised this finality argument for the first time in 11 his motion for reconsideration, which he filed after the 12 bankruptcy court issued its summary judgment ruling. 13 Consequently, this argument does not directly implicate or call 14 into question the bankruptcy court’s summary judgment ruling. 15 The record reflects that neither party advised the bankruptcy 16 court at or before the time it ruled on AAA’s summary judgment 17 motion that there was a pending state court appeal from the 18 Second State Court Judgment. To the contrary, Vazquez’s summary 19 judgment opposition explicitly conceded, without discussion, the 20 issue of finality. We cannot review the summary judgment ruling 21 based on facts not presented to the bankruptcy court at or before 22 the time it rendered its ruling. See Oyama v. Sheehan 23 (In re Sheehan), 253 F.3d 507, 512 n.5 (9th Cir. 2001); Kirschner 24 v. Uniden Corp. of Am., 842 F.2d 1074, 1077–78 (9th Cir. 1988). 25 As a result, Vazquez’s finality argument only is relevant to 26 our review of the bankruptcy court’s denial of Vazquez’s 27 reconsideration motion. But before we conduct that review, as a 28 threshold matter, we note that it is questionable whether Vazquez

14 1 is entitled to that review, because his notice of appeal only 2 referenced the summary judgment ruling.5 3 It also is far from clear that the parties have provided us 4 with a record sufficient to enable us to conduct a meaningful 5 review of the order denying reconsideration. That order 6 explicitly based its denial on “the reasons stated on the record 7 in open court.” And yet we have no idea what reasons or findings 8 the bankruptcy court relied upon in denying the reconsideration 9 motion because neither party obtained the transcript from the 10 hearing on the reconsideration motion. This makes our task of 11 reviewing the denial of the reconsideration motion virtually 12 impossible, particularly under the abuse of discretion standard 13 of review, which requires us to consider the law applied by the 14 bankruptcy court and its factual findings. Hinkson, 585 F.3d at 15 1262. Under these circumstances, we may exercise our discretion 16 to summarily affirm the denial of the reconsideration motion. 17 See Kyle v. Dye (In re Kyle), 317 B.R. 390, 393 (9th Cir. BAP 18 2004), aff'd, 170 Fed. Appx. 457 (9th Cir. 2006). 19 Even if we were to attempt to conduct a review of the denial 20 of the reconsideration motion, we are convinced that Vazquez 21 would not prevail. Having accessed the bankruptcy court’s 22 adversary proceeding docket and having reviewed the parties’ 23 papers relating to the reconsideration motion, Vazquez in essence 24 moved for reconsideration based on the “new evidence” of the 25 pending state court appeal. When, as here, the so-called newly 26 5 Nonetheless, we acknowledge that notices of appeal should 27 be liberally construed, particularly those filed by pro se 28 appellants. Smith v. Barry, 502 U.S. 244, 248–50 (1992); Brannan v. United States, 993 F.2d 709 (9th Cir. 1993).

15 1 discovered evidence (Vazquez’s knowledge of his own pending state 2 court appeal) was or should have been readily available to the 3 movant before the trial court issued the ruling in question, the 4 trial court properly could deny reconsideration. See Far Out 5 Prods., Inc. v. Oskar, 247 F.3d 986, 997-98 (9th Cir. 2001). 6 As a separate and independent ground for affirming the 7 denial of the reconsideration motion, any error by the bankruptcy 8 court with respect to the denial of the reconsideration motion 9 was harmless, and we must ignore harmless error. See Van Zandt 10 v. Mbunda (In re Mbunda), 484 B.R. 344, 355 (9th Cir. BAP 2012). 11 As set forth above, the reconsideration motion focused on 12 the pending state court appeal from the Second State Court 13 Judgment. Any error concerning the denial of the reconsideration 14 motion was harmless because, after the bankruptcy court entered 15 judgment, the California Court of Appeal affirmed the Second 16 State Court Judgment, and the California Supreme Court denied 17 review. Consequently, even if we were to reverse based on the 18 formerly non-final nature of the Second State Court Judgment 19 under California issue preclusion law, that judgment is now final 20 for issue preclusion purposes, and the bankruptcy court would be 21 free upon remand to re-enter summary judgment based on issue 22 preclusion. 23 The interests of justice would not be served by our 24 remanding just so the bankruptcy court could grant summary 25 judgment again given that the former finality defect has now been 26 cured. See generally Nash v. Clark Cnty. Dist. Atty's. Office 27 (In re Nash), 464 B.R. 874, 879 (9th Cir. BAP 2012) (declining to 28 remand when such remand would not serve the interests of

16 1 justice). 2 CONCLUSION 3 For the reasons set forth above, we AFFIRM the bankruptcy 4 court’s grant of summary judgment against Vazquez and its denial 5 of Vazquez’s reconsideration motion. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28