In re: Jamshid Daryanabard

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: June 20, 2025
• Docket: 24-1207
• Status: Unpublished

Opinion

FILED JUN 20 2025 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: BAP No. NC-24-1207-GTB JAMSHID DARYANABARD, Debtor. Bk. No. 23-50443

JAMSHID DARYANABARD, Adv. No. 23-05024 Appellant, v. MEMORANDUM* PETER PIROUZKAR, Appellee.

Appeal from the United States Bankruptcy Court for the Northern District of California M. Elaine Hammond, Bankruptcy Judge, Presiding

Before: GAN, TAYLOR,1 and BRAND, Bankruptcy Judges.

INTRODUCTION

Chapter 13 2 debtor Jamshid Daryanabard (“Debtor”) appeals the

bankruptcy court’s grant of summary judgment in favor of creditor Peter

* 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. 1 Hon. Laura S. Taylor, United States Bankruptcy Judge for the Southern District

of California, sitting by designation. 2 Unless specified otherwise, all chapter and section references are to the

Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of Civil Procedure. Pirouzkar, holding a state-court judgment nondischargeable under

§ 523(a)(2). The bankruptcy court applied issue preclusion and held that

the judgment established Debtor’s fraud. Citing the Rooker-Feldman

doctrine, the court refused to consider Debtor’s arguments regarding

purported errors in the state court judgment.

Debtor makes a litany of arguments why the state court erred, and he

maintains the bankruptcy court misinterpreted the Rooker-Feldman

doctrine. He argues that the state-court judgment is void for lack of

personal service and the bankruptcy court erred by applying issue

preclusion.

The bankruptcy court properly applied the law, and Debtor does not

demonstrate an abuse of discretion. We AFFIRM.

FACTS 3

A. Prepetition events

Sometime between 2001 and 2003, Debtor borrowed $46,000 from

Mr. Pirouzkar’s mother, Mahin Pirouzkar. Debtor agreed to pay interest at

1% per month with the principal payable upon demand. In exchange,

Debtor provided undated checks drawn on his business account. Debtor

made interest payments until Ms. Pirouzkar called the loans due in 2016.

3 We exercise our discretion to take judicial notice of documents electronically filed in the main case, the prior bankruptcy case, and related adversary proceedings. See Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003). 2 In January 2017, Debtor paid $6,000 but refused to make any further

payments. Mr. Pirouzkar, as the legal representative for his mother,

informed Debtor that the bank refused to cash the checks provided by

Debtor because the business account had been closed, and he asserted that

Debtor fraudulently issued the checks.

Ms. Pirouzkar died in June 2017. As special administrator for his

mother’s estate, Mr. Pirouzkar filed a petition for return of estate property

in the state court probate action. He claimed that Debtor owed the estate

$52,851.64 in principal and interest. Debtor appeared in the action and

claimed he owned the estate no more than $14,000.

B. Debtor’s 2019 bankruptcy case and the state-court judgment

In October 2019, while the action was pending in state court, Debtor

filed a chapter 13 petition. Mr. Pirouzkar filed a motion for stay relief

seeking to file an amended petition in state court and to liquidate his

claims against Debtor. The bankruptcy court granted stay relief, but it

required that enforcement of any claim would be through the bankruptcy

proceedings.

Mr. Pirouzkar filed the amended petition, which included additional

causes of action for fraud and financial elder abuse. In May 2020,

Mr. Pirouzkar mailed notice of the continued hearing on the amended

petition to Debtor at his business address and his home address. Debtor

did not appear at the hearing, and the state court entered judgment in

August 2020.

3 The state court held that Debtor committed fraud by falsely

representing that the checks were valid, would serve as collateral, and

could be cashed at any time. The court held that Debtor made the false

statements with intent to defraud, and it held that Ms. Pirouzkar was

ignorant of the falsity of the misrepresentations and justifiably relied on

them in making the loans. Debtor did not appeal.

The bankruptcy court dismissed Debtor’s 2019 bankruptcy case in

September 2020, and it closed his case in January 2021.

C. Debtor’s 2023 bankruptcy and adversary proceeding

Debtor filed the present chapter 13 petition in April 2023.

Mr. Pirouzkar filed an adversary complaint seeking to make the state-court

judgment nondischargeable under § 523(a)(2) and (a)(4). He filed a motion

for partial summary judgment arguing that the judgment established

Debtor’s fraud under § 523(a)(2).

Debtor opposed the motion and claimed that he owed Ms. Pirouzkar

only $14,000. Debtor acknowledged that he was personally served with the

original petition for return of estate property, but argued that because the

petition was not granted, he prevailed. According to Debtor, the amended

petition created a new lawsuit which required new service. Debtor

maintained he was not personally served with the amended petition or

notice of hearing and thus, the state-court judgment was void for lack of

personal service. He also disputed the damages and the evidentiary basis

for the state court’s decision.

4 The bankruptcy court applied issue preclusion and determined that

the state-court judgment established Debtor’s fraud. In response to

Debtor’s arguments about the underlying issues determined by the state

court, the bankruptcy court held that it was barred by the Rooker-Feldman

doctrine from considering whether the state court erred. The bankruptcy

court entered partial summary judgment, and Debtor timely appealed.

Subsequently, the bankruptcy court entered an amended judgment

including a certification under Civil Rule 54(b).

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

157(b)(2)(I). We have jurisdiction under 28 U.S.C. § 158.

ISSUE

Did the bankruptcy court err by granting summary judgment on

Mr. Pirouzkar’s claim under § 523(a)(2)?

STANDARDS OF REVIEW

We review de novo the bankruptcy court’s grant of summary

judgment. Plyam v. Precision Dev., LLC (In re Plyam), 530 B.R. 456, 461 (9th

Cir. BAP 2015). We also review de novo the bankruptcy court’s

determination that issue preclusion was available. Lopez v. Emergency Serv.

Restoration, Inc. (In re Lopez), 367 B.R. 99, 103 (9th Cir. BAP 2007).

Under de novo review, “we consider a matter anew, as if no decision

had been made previously.” Francis v. Wallace (In re Francis), 505 B.R. 914,

917 (9th Cir. BAP 2014).

5 If we determine that issue preclusion is available, we then review the

bankruptcy court’s decision to apply it for an abuse of discretion. In re

Plyam, 530 B.R. at 461. A bankruptcy court abuses its discretion if applies

the wrong legal standard, or its findings of fact are illogical, implausible or

without support in the record. TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d

820, 832 (9th Cir. 2011).

DISCUSSION

Debtor’s central argument is that the amended petition initiated a

separate case in state court which required separate personal service. He

claims he was not served, and thus, the judgment is void. Debtor argues

the Rooker-Feldman doctrine does not limit the bankruptcy court’s ability to

determine the factual issues of the fraud claim, but he conflates the Rooker-

Feldman doctrine with the proper application of issue preclusion. Because

the state-court judgment is final and satisfies the elements for issue

preclusion under state law, the bankruptcy court properly gave it

preclusive effect. And the bankruptcy court correctly held that the Rooker-

Feldman doctrine limited its ability to address any alleged errors in the

state-court judgment.

A. Legal standards

1. Summary judgment

Civil Rule 56(a), made applicable by Rule 7056, provides that

summary judgment is appropriate when “there is no genuine dispute as to

any material fact and the movant is entitled to judgment as a matter of

6 law.” In reviewing summary judgment, we must view the evidence in the

light most favorable to the nonmoving party and draw all justifiable

inferences in its favor. Fresno Motors, LLC v. Mercedes Benz USA, LLC, 771

F.3d 1119, 1125 (9th Cir. 2014) (citing Cnty. of Tuolumne v. Sonora Cmty.

Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001) and Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 255 (1986)).

Because Mr Pirouzkar’s motion for partial summary judgment was

based on issue preclusion, the material facts were not in dispute. Thus, our

only function is to determine whether the bankruptcy court correctly

applied the law. Universal Health Servs., Inc. v. Thompson, 363 F.3d 1013,

1019 (9th Cir. 2004).

2. Issue preclusion

The doctrine of issue preclusion applies to actions to except debts

from discharge under § 523(a). Grogan v. Garner, 498 U.S. 279, 284 n.11

(1991). In applying issue preclusion, the bankruptcy court “must give to a

state-court judgment the same preclusive effect as would be given that

judgment under the law of the State in which the judgment was rendered.”

Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). The party

asserting issue preclusion bears the burden of establishing the threshold

elements. Harmon v. Kobrin (In re Harmon), 250 F.3d 1240, 1245 (9th Cir.

2001).

7 To determine the issue preclusive effect of the California judgment,

the bankruptcy court must apply California’s issue preclusion law, which

requires:

(1) the issue sought to be precluded from relitigation is identical to that decided in a former proceeding; (2) the issue was actually litigated in the former proceeding; (3) the issue was necessarily decided in the former proceeding; (4) the decision in the former proceeding is final and on the merits; and (5) the party against whom preclusion is sought was the same as, or in privity with, the party to the former proceeding.

In re Plyam, 530 B.R. at 462 (citing Lucido v. Super. Ct., 51 Cal. 3d 335, 341

(1990)). The court additionally must assess “whether imposition of issue

preclusion in the particular setting would be fair and consistent with sound

public policy.” Khaligh v. Hadaegh (In re Khaligh), 338 B.R. 817, 824-25 (9th

Cir. BAP 2006) (citing Lucido, 51 Cal. 3d at 341-43), aff’d, 506 F.3d 956 (9th

Cir. 2007).

B. The bankruptcy court did not err by holding that issue preclusion was available.

Debtor contends that the state court judgment is void for lack of

personal service, and he suggests the state court erred because there was

no admissible evidence of fraud, and the amount owed was disputed. He

argues that the bankruptcy court was required to determine the issue of

fraud irrespective of the state-court judgment, and the Rooker-Feldman

doctrine is inapplicable here.

8 The Rooker-Feldman doctrine “stands for the relatively

straightforward principle that federal district courts do not have

jurisdiction to hear de facto appeals from state court judgments.” Carmona

v. Carmona, 603 F.3d 1041, 1050 (9th Cir. 2010). It bars suits “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. Corp., 544 U.S. 280, 284 (2005).

The bankruptcy court correctly applied the Rooker-Feldman doctrine

and appropriately declined to consider Debtor’s arguments pertaining to

alleged errors by the state court. But Debtor’s primary contention that the

state-court judgment is void is essentially a question about whether issue

preclusion is available.

It is undisputed that Debtor was served with the petition for return of

estate property and a summons, in accordance with California Code of

Civil Procedure (“CCP”) § 583.210, and he made a general appearance in

the state court action. Thus, the state court had personal jurisdiction. See

CCP § 410.50(a) (“[T]he court in which an action is pending has jurisdiction

over a party from the time the summons is served on him . . . .”); JHVS

Grp., LLC. v. Slate, 107 Cal. App. 5th 30, 37 (2024) (“[A] defendant may

waive an objection to the court’s lack of personal jurisdiction, for example,

by making a general appearance . . . .” (cleaned up)). The court retained

9 personal jurisdiction “throughout subsequent proceedings in the action.”

CCP § 410.50(b).

Debtor’s argument that the amended petition created a new case is

absurd. The amended petition was filed in the same probate action in

which Debtor was served and had appeared. Because the state court had

personal jurisdiction over Debtor “in a fundamental sense,” its judgment

was not void, even if Debtor could show that notice of the amended

petition and hearing were not proper. See People v. Am. Contractors Indem.

Co., 33 Cal. 4th 653, 660-61 (2004) (distinguishing between a lack of

jurisdiction in a fundamental sense, which renders a judgment void, and an

action by a court in excess of its authority, which renders a judgment

“merely voidable”); see also O’Connor v. Old Republic Sur. Co.

(Conservatorship of O’Connor), 48 Cal. App. 4th 1076, 1088-89 (1996)

(explaining that a judgment entered by a court with personal and subject

matter jurisdiction after a failure to comply with statutory noticing

procedures was “in excess of jurisdiction” and thus voidable, not void).

The record indicates that Debtor received notice of the hearing on the

amended petition, and the state court judgment includes a finding that

notice was proper.4 But even if Debtor did not receive notice of the

4 The proof of service states that Mr. Pirouzkar mailed notice of the hearing to Debtor at both his business address and home address in May 2020. Debtor claims that his business had already been evicted by the time notice was mailed, but he does not dispute his home address or argue he no longer lived there. The docket in the 2019 bankruptcy case shows he continued to receive notice of bankruptcy filings at his home 10 amended petition or the hearing, he must challenge the state court

judgment directly through an appeal or by filing a motion to vacate the

judgment. Am. Contractors Indem. Co., 33 Cal. 4th at 661 (citing Pac. Mut. Life

Ins. Co. v. McConnell, 44 Cal. 2d 715, 727 (1955)). Debtor did not appeal the

state court judgment, and it is now final. See Kay v. City of Rancho Palos

Verdes, 504 F.3d 803, 808 (9th Cir. 2007) (holding that a California judgment

is final and can be used for preclusive purposes once a party’s appeal rights

have been exhausted).

The final judgment is “valid until it is set aside,” and can form the

basis for issue preclusion under state law. See Am. Contractors Indem. Co., 33

Cal. 4th at 661; see also Schultz v. Harney, 27 Cal. App. 4th 1611, 1618 (1994)

(“It is established beyond all reasonable dispute that a final judgment or

order, even if erroneous or clearly contrary to a statute, is res judicata if the

court had jurisdiction in the fundamental sense, that is, jurisdiction over

the subject matter and the parties.” (citations omitted)).

The bankruptcy court did not err by holding that issue preclusion

was available for issues actually litigated and necessarily decided by the

state-court judgment. Any argument about the validity of the state-court

judgment, including Debtor’s claim that it is void for lack of service or

notice, must be heard by the state court through an appeal or motion for

post-judgment relief.

address until the case was closed in January 2021.

11 C. The bankruptcy court did not abuse its discretion by applying issue preclusion.

Though Debtor disputes the correctness of the state-court judgment,

he offers no real argument that the bankruptcy court abused its discretion

in its application of issue preclusion. Moreover, we find no error in the

court’s application.

The bankruptcy court appropriately determined that the state-court

judgment involved fraud, and the state court made specific findings which

satisfy fraud under § 523(a)(2). Fraud was actually litigated and necessarily

decided because it was raised in the amended petition, and the judgment

included express findings of fraud. See In re Harmon, 250 F.3d at 1248-49;

Baldwin v. Kilpatrick (In re Baldwin), 249 F.3d 912, 919 (9th Cir. 2001)

(holding that a default judgment can satisfy the “actually litigated” and

“necessarily decided” elements of California issue preclusion law where

the defendant “had been personally served with a summons or had actual

knowledge of the existence of the litigation” and the state court made an

express finding on the issue (cleaned up)).

As noted above, a California judgment is final once appellate rights

are exhausted or the time to appeal has expired. It is “on the merits” if “the

substance of the claim [was] tried and determined,” Wells Fargo Bank v.

Gump (In re Gump), 1 Cal. App. 4th 582, 608 (1991) (citation omitted), and

there is no dispute the state court litigation involved the same parties.

12 The bankruptcy court considered public policies underlying issue

preclusion and determined that applying issue preclusion in this case

would eliminate the possibility of inconsistent decisions, promote judicial

economy, and prevent the parties from being subjected to consecutive

proceedings raising the same factual allegations. The bankruptcy court did

not abuse its discretion in applying issue preclusion.

CONCLUSION

Based on the foregoing, we AFFIRM the bankruptcy court’s summary

judgment in favor of Mr. Pirouzkar on his claim for nondischargeability

under § 523(a)(2).