In re: Larry Tevis and Nancy Tevis

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: December 9, 2011
• Docket: EC-10-1318-JuKiD EC-10-1319-JuKiD EC-10-1320-JuKiD EC-10-1321-JuKiD (related appeals)
• Status: Unpublished

Opinion

FILED DEC 09 2011 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. EC-10-1318-JuKiD ) BAP No. EC-10-1319-JuKiD 6 LARRY TEVIS and NANCY TEVIS, ) BAP No. EC-10-1320-JuKiD ) BAP No. EC-10-1321-JuKiD* 7 Debtors. ) (related appeals) ______________________________) 8 LARRY TEVIS; NANCY TEVIS, ) Bk. No. 04-26357 ) Adv. No. 08-2004 9 Appellants, ) ) M E M O R A N D U M** 10 v. ) ) 11 MAX HOSEIT; HERMAN L. ) KOELEWYN; HOSEIT & KOELEWYN; ) 12 DANIEL L. EGAN; MICHAEL F. ) BURKART, Trustee; FIRST ) 13 AMERICAN TITLE COMPANY, ) ) 14 Appellees. ) ______________________________) 15 Argued and Submitted on November 16, 2011 16 at Sacramento, California 17 Filed - December 9, 2011 18 Appeal from the United States Bankruptcy Court for the Eastern District of California 19 Honorable Thomas C. Holman, Bankruptcy Judge, Presiding 20 ______________________ 21 22 * 23 While not formally consolidated, these four related appeals were heard at the same time and were considered together. 24 This single disposition applies to the four appeals, and the clerk is directed to file a copy of this disposition in each 25 appeal. 26 ** This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. 28 See 9th Cir. BAP Rule 8013-1.

-1- 1 Appearances: Appellant Larry Tevis argued for Appellant Nancy Tevis and himself pro se; Andrew Edward 2 Benzinger, Esq. of Lewis, Brisbois, Bisgaard & Smith LLP, argued for Appellees Max Hoseit, 3 Herman L. Koelewyn and Hoseit & Koelewyn; Mark Adelos Gorton, Esq. of Boutin Jones Inc., argued 4 for Appellee First American Title Company; Daniel L. Egan, Esq. of Wilke, Fleury, Hoffelt, Gould & 5 Birney, LLP argued pro se; Michael F. Burkart, Trustee argued pro se. 6 _________________________ 7 Before: JURY, KIRSCHER, and DUNN, Bankruptcy Judges. 8 9 In this appeal we review four orders entered by the 10 bankruptcy court dismissing appellants’ third amended complaint 11 (“TAC”) as to appellees, (1) Max Hoseit and Herman Koelewyn, 12 principals of the law firm of Hoseit & Koelewyn (collectively, 13 “H&K”); (2) Daniel L. Egan (“Egan”), an attorney with Wilke, 14 Fleury, Hoffelt, Gould, & Birney, LLP; (3) Michael F. Burkart 15 (the “Trustee”); and (4) First American Title Company (“FATCO”) 16 (collectively, “Appellees”), without leave to amend. 17 For the reasons stated, we AFFIRM. 18 I. FACTS 19 We set forth the following facts, culled from the excerpts 20 of record provided by Appellees and the underlying bankruptcy 21 case and adversary proceeding dockets,1 to provide context for 22 23 1 The Panel excused debtors from filing excerpts of record in these appeals by order entered on May 6, 2011, due to their 24 financial hardship and representation that all the relevant 25 documents were contained on the court’s docket. Therefore, to the extent needed, we take judicial notice of the relevant 26 pleadings docketed and imaged in debtors’ underlying bankruptcy case and adversary proceeding which were not included in the 27 record by Appellees. Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003). 28 (continued...)

-2- 1 the allegations in debtors’ TAC. 2 Prepetition Events 3 Debtors purchased unimproved property in Recuse, California 4 in March 1989. After making improvements, they placed a 5 manufactured house on the property which was later destroyed by 6 wind and rain. In 1998, they signed a contract to purchase a 7 new manufactured house with Taylor’s Capitol Mobile Home Sales 8 (“TCMHS”). To purchase the house and make the necessary 9 improvements, they also applied for a State of California, 10 Department of Veterans Affairs (“Cal Vet”) mortgage loan which 11 was eventually consummated and funded. FATCO recorded the grant 12 deed in favor of Cal Vet on their property. 13 Debtors took steps to place the new house on their 14 property, which included, among other things, a new foundation. 15 The foundation was completed and the house delivered, but 16 debtors were not happy for a variety of reasons. As a result, 17 they commenced litigation against Fleetwood Homes of California, 18 dba Fleetwood, TCMHS, Affordable Awnings, and Lee Williams dba 19 Gold Key Mobile Home Contractors (the “Modular Home 20 Litigation”). Debtors also commenced a separate lawsuit against 21 their escrow company, Spring Mountain Escrow, dba Heritage 22 Escrow (“Heritage”). 23 Debtors retained H&K to represent them in the litigation 24 after their initial attorney withdrew due to retirement. Later, 25 26 1 (...continued) 27 Although we excused debtors from filing excerpts of record, we did not excuse them from providing us with adequate citations to 28 the record, which they did not do. See Rule 8010(a)(1)(D).

-3- 1 H&K withdrew for reasons not apparent from the record. 2 Debtors then retained attorney Paul L. Cass (“Cass”), who is not 3 part of this appeal. 4 In July 2002, on the morning of the trial, Cass 5 successfully negotiated a settlement of the Modular Home 6 Litigation for $65,000. Although most of the defendants 7 tendered checks to Cass, debtors decided not to consummate the 8 settlement. After further litigation, the California Superior 9 Court confirmed the settlement on March 24, 2003. Cass then 10 prepared a stipulation and release (the “Stipulation”) which the 11 defendants signed, but the debtors did not. 12 At some point, debtors filed malpractice actions against 13 H&K and Cass. In turn, H&K and Cass asserted attorney’s liens 14 against the proceeds from the Modular Home Litigation settlement 15 and filed suit against debtors for their fees. 16 Meanwhile, debtors defaulted on the loan with Cal Vet. 17 In early 2004, Cal Vet filed an unlawful detainer action against 18 debtors in the California Superior Court, County of Eldorado. 19 Bankruptcy Events 20 On June 21, 2004, debtors filed their chapter 72 petition, 21 and Michael F. Burkart was appointed as their Trustee. Debtors 22 removed the Modular Home Litigation to the bankruptcy court. 23 Thereafter, the Trustee, with court authorization, employed Egan 24 as his counsel. With Egan’s assistance, the Trustee negotiated 25 2 26 Unless otherwise indicated, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532. 27 “Rule” references are to the Federal Rules of Bankruptcy Procedure, and “Civil Rule” references are to the Federal Rules 28 of Civil Procedure.

-4- 1 an amendment to the Stipulation signed by the parties in state 2 court in order to implement the original settlement for $65,000. 3 The Trustee also reached an agreement with H&K and Cass 4 regarding the malpractice claims and their attorney’s liens. 5 Despite debtors’ objections, the bankruptcy court approved 6 the settlements in a Memorandum Decision filed October 29, 2004. 7 Debtors appealed that decision on November 8, 2004 (BAP No. 04- 8 1575). Two days later, on November 10, 2004, the bankruptcy 9 court entered the order approving the settlements. On 10 February 16, 2005, the Panel dismissed debtors’ appeal for lack 11 of prosecution. 12 A condition precedent to the settlements involving the 13 Modular Home Litigation and the malpractice actions was a 14 settlement agreement between the Trustee and Cal Vet. On 15 November 16, 2004, the Trustee filed a motion to approve his 16 agreement with Cal Vet. That agreement established the amount 17 of the indebtedness on debtors’ property, authorized the Trustee 18 to sell the property, and required Cal Vet to dismiss their 19 prepetition state court action against debtors. This settlement 20 apparently was not consummated because debtors moved to convert 21 their case to chapter 13 when they learned that the Trustee 22 intended to sell their residence. The bankruptcy court 23 converted their case on December 1, 2004, and the Trustee’s 24 appointment was terminated. 25 Debtors confirmed a chapter 13 plan on July 18, 2005, which 26 assumed and ratified the settlements of the Modular Home 27 Litigation and malpractice actions. 28

-5- 1 A. The Adversary Complaint 2 On January 2, 2008, debtors commenced the adversary 3 proceeding out of which these appeals arise. The complaint 4 asserted claims for relief for: (1) fraud; (2) fraudulent 5 inducement; (3) defamation; (4) breach of written contract; 6 (5) breach of oral/implied contract; (6) breach of fiduciary 7 duty; (7) gross negligence; (8) equitable, declaratory, 8 injunctive relief, and accounting; (9) intentional infliction of 9 emotional distress; (10) negligent infliction of emotional 10 distress; (11) violation of bankruptcy automatic stay; 11 (12) violation of Health and Safety Code § 18000, et seq.; and 12 (13) breach of the duty of good faith and fair dealing. 13 The First Amended Complaint 14 Debtors filed a first amended complaint (“FAC”) on May 13, 15 2008. Appellees filed motions to dismiss, which the court 16 granted, with leave to amend. 17 The Second Amended Complaint 18 Debtors filed a second amended complaint on September 22, 19 2008. Appellees filed another round of motions to dismiss, 20 which the court granted, with further leave to amend. In its 21 civil minute order, which was virtually identical with respect 22 to each appellee, the court stated: 23 Plaintiffs . . . are granted leave to amend the complaint a final, third time. Plaintiffs may file a 24 third amended complaint that comports with Fed. R. Civ. P. 8(a), made applicable herein pursuant to Fed. 25 R. Bankr. P. 7008, as to Defendant [ ] on or before September 1, 2009. In the amended complaint, each 26 claim and the involvement of each defendant in that claim must be sufficiently alleged. Plaintiffs’ 27 amended complaint must include clear, concise, and complete factual allegations describing the conduct 28 and events which underlie Plaintiffs’ claims. Simply

-6- 1 naming numerous defendants and then alleging that ‘defendants’ acted wrongfully is not sufficient. 2 Failure to file an amended complaint that conforms to the requirements of this ruling may result in 3 dismissal of this action without leave to amend for failure to state a claim upon which relief can be 4 granted. 5 The TAC 6 Debtors filed the TAC on September 1, 2009. The TAC 7 complaint added claims for relief for malicious prosecution, 8 fraud under 18 U.S.C. §§ 152 and 3571, declaratory relief, and 9 injunctive relief. Due to its length, we recite only an 10 abbreviated version of the general statements and allegations 11 taken from debtors’ TAC in ¶¶ 35-713 and accepted as true for 12 the purpose of deciding Appellees’ separately filed motions to 13 dismiss. 14 General Allegations In ¶¶ 35-71 Of The TAC 15 Debtors alleged that TCMHS never reported the sale of the manufactured house to the State of California 16 until 2003. 17 Debtors alleged that on June 4, 1998, Cal Vet appraised debtors’ new manufactured home and their 18 property for $188,000. The appraisal was done before the loan approval, before the house foundation was 19 built, and before their modular home was built. A central air conditioner was included in the appraisal 20 and paid for by debtors. Debtors alleged that they never received the air conditioner. 21 Debtors further alleged that the foundation for the 22 manufactured house never passed the El Dorado County inspection because it was defective and not built 23 according to the approved engineer’s plans. According to debtors, TCHMS directed them to Pacific Consulting 24 25 3 Debtors incorporate ¶¶ 35-71 into their first through 26 tenth claims for relief. The eleventh and thirteenth through eighteen claims for relief are included in the prayer of the TAC 27 and do not incorporate these paragraphs nor do they assert any additional allegations to support any claim. There is no twelfth 28 claim for relief in the TAC.

-7- 1 Engineers (“PCE”) and David Dahmen to have the foundation plans drawn up. They paid PCE $350. 2 Debtors alleged that their home was a total loss due to its placement on the defective foundation and 3 because the home was not built according to plan. Debtors allege that TCHMS and Fleetwood refused to 4 replace or repair the home. 5 Debtors further alleged that David Dahmen wrote a fraudulent report regarding their foundation and that 6 he and PCE committed fraud against them. Debtors maintain that they suffered mental, financial, and 7 loss of self worth for over a decade for the harm PCE and David Dahmen had caused them. 8 Debtors alleged that on June 24, 1998, they obtained 9 the Cal Vet loan and signed the contract on the same date. Debtors alleged that TCHMS signed the Cal Vet 10 contract, but then sent a fax to Cal Vet stating that it was not going to abide by the contract’s terms. 11 Debtors alleged that on July 22, 1998, FATCO recorded 12 the grant deed with Cal Vet on the property with an “unverified” false/fake address and with a different 13 escrow number (8273) than the Cal Vet escrow number (7989). Debtors alleged that FATCO recorded the 14 fraudulent grant deed at the El Dorado County Recorder Office, in Placerville, California. Debtors stated in 15 the TAC that if FATCO had been honest and followed the proper procedure of recording the grant deed, debtors 16 would not be in the dire situation that they are in, of losing their residence and experiencing mental and 17 financial damage with more than a decade of litigation and hardships. 18 Debtors alleged that in August 2002, they lost the 19 right of access to and from their property. Debtors alleged that Roy and Alberta McKenzie, an El Dorado 20 County employee, and a state court clerk in El Dorado County, removed the easement of record on their 21 property that allowed debtors access to and from their residence. Debtors alleged that Cal Vet held the 22 title to the McKenzies’ land, as Roy McKenzie had a Cal Vet loan. Debtors alleged that Cal Vet knew that 23 debtors lost their right of access to and from the land. Debtors further alleged that fraud was 24 committed when the McKenzies presented a fraudulent “Exhibit.” Debtors also alleged that the McKenzies’ 25 attorney, Doug Roecea, is a party of interest against debtors as Doug Roecea represented debtors at an 26 earlier time. 27 Debtors alleged that in 2002 FATCO denied their claim under the title insurance policy when they lost their 28 access to their property. In the TAC, debtors sought

-8- 1 monetary relief from FATCO for the fraudulent grant deed and legal fees and costs for the loss of right to 2 go in and out of the land. 3 Debtors alleged that on July 23, 1998, Cal Vet amended debtors’ contract without their knowledge or signature 4 for consent and/or approval. Debtors alleged that this violated and breached the Cal Vet contract and 5 was fraud. 6 Debtors alleged that on July 27, 1998, their modular house was delivered in poor and damaged condition. 7 This was allegedly in violation of the California Health and Safety Code and the Cal Vet contract. 8 Debtors alleged that their escrow company (Heritage) 9 released all money owed to the dealer and violated the Cal Vet contract. 10 Debtors alleged that they were left with a severely 11 damaged house and that it was a total loss, since it would cost more to rebuild the house than it cost new. 12 Debtors alleged that Cal Vet refused to help them with the damaged house as required by the Cal Vet contract. 13 Debtors alleged that on July 26, 1999, they filed the 14 Modular Home Litigation and hired Richard Rader (“Rader”) to assist them. 15 Debtors alleged that Cal Vet refused to let debtors 16 see their Cal Vet file. Debtors alleged that this was in violation and in breach of the Cal Vet contract and 17 was also in violation of the Freedom of Information Act. 18 Debtors alleged that when Rader withdrew as debtors’ 19 attorney, they hired H&K on contingency in February 2002. 20 Debtors alleged that on August 5, 2002 a settlement 21 agreement was made under debtors’ duress. According to debtors, their state court attorneys Cass and 22 Galgani forced the agreement upon debtors under false pretenses and dire consequences to debtors. Debtors 23 alleged that they did not want to settle for $65,000 when the house cost $65,000, H&K had a lien on the 24 debtors’ house for over $50,000, Cass had a lien for over $50,000, and the title was in TCMHS’s name, not 25 debtors because TCMHS never reported the sale of the house to the State of California. Debtors moved to 26 vacate the settlement agreement in the state court. 27 Debtors alleged that their attorney Cass wrote a letter to William (Bill) Gwire to deny debtors’ legal 28 representation by writing false misrepresentations to

-9- 1 slander debtors, by stating that Nancy Tevis had attacked the judge in his chambers. 2 Debtors further alleged that Cass wrote false 3 misrepresentations in his motion of January 2003, such as Nancy Tevis threatened to file a false rape charge 4 if Cal Vet did not give her husband a loan. Cal Vet was allegedly subpoenaed to testify against debtors in 5 Sacramento County Superior Court during the Modular Home Litigation. Debtors alleged that to defraud and 6 slander debtors, Cal Vet testified and lied to the court that Nancy Tevis threatened to file a false rape 7 charge if Cal Vet did not give her husband a loan. According to debtors, this information was allegedly 8 used against debtors in their bankruptcy case. 9 Debtors alleged that Cal Vet canceled their mandatory life insurance, but continued to charge them for the 10 premium. 11 Debtors alleged that on September 12, 2003, Cal Vet cancelled debtors’ contract. 12 Debtors alleged that H&K had adverse interests to them 13 since H&K’s client was the Opal Hampton Family Trust. Opal Hampton was allegedly the owner of TCMHS. 14 Debtors alleged that H&K withdrew from their lawsuit with no just cause. Debtors alleged that H&K 15 committed fraud on the court as a party to the bankruptcy court settlement of their malpractice 16 claims. They alleged H&K agreed to fictitious facts in the agreement and knew they were false so that 17 debtors would be blamed for H&K’s withdrawal from their state court litigation and H&K would get paid 18 money from debtors’ estate. Debtors alleged that H&K willfully, knowingly lied and defrauded debtors and 19 defrauded the court with the false records and false statements . . . . by falsely portraying debtors as 20 responsible for H&K’s departure from debtors’ state court case. 21 Debtors alleged that Egan falsely stated [in his 22 employment application] that there was not any contact with debtors prior to their bankruptcy. Debtors 23 alleged that they had several contacts with Egan in which they told him about the Modular Home Litigation. 24 According to debtors, their bankruptcy attorney, Ronald Melluish, did nothing about the conflict of 25 interest. 26 Debtors alleged that when Egan filed a motion for the bankruptcy court to approve the compromise of the 27 state court litigation, he knowingly made and used false records and statements to get it approved. 28 Debtors alleged that Egan conspired and defrauded the

-10- 1 court and committed fraud upon the court to get Judge Christopher Klein to approve and grant the motion to 2 compromise the state court litigation. 3 At another point, debtors alleged that the Trustee knowingly, deliberately, and willfully committed fraud 4 upon the court to sell debtors’ residence. 5 Due to Egan’s conflict of interest, debtors alleged that all agreements made by him must be vacated. 6 Debtors further alleged that Egan committed fraud upon 7 the court in the settlement with Cal Vet which authorized the Trustee to sell their residence. 8 Debtors alleged that Cal Vet violated the automatic 9 stay and state court settlement agreement and that Cal Vet threatened to obtain relief from stay to take 10 possession of debtors’ property. 11 Appellees filed motions to dismiss debtors’ TAC. On 12 August 9, 2010, the bankruptcy court issued detailed minute 13 orders granting the motions and dismissing the adversary 14 proceeding as to Appellees without leave to amend and certified 15 the dismissal orders as final judgments under Rule 54(b). 16 Debtors timely appealed the orders. 17 B. The Limited Remand 18 On October 15, 2010, the Panel remanded these appeals to 19 the bankruptcy court for an express determination, in 20 conformance with Rule 54(b), that there was no just reason for 21 delay in reviewing the various orders. After the remand, 22 debtors filed an ex parte motion requesting the bankruptcy court 23 to make the necessary findings for certification. 24 On January 12, 2011, the bankruptcy court issued separate 25 Supplemental Memoranda as to Appellees, finding that there was 26 no just reason for delay of entry of the dismissal orders as 27 final, appealable judgments under Civil Rule 54(b). The court 28 explained that the orders adjudicated all claims for relief in

-11- 1 the TAC as to Appellees, debtors could not further amend the 2 TAC, and Appellees had not filed counterclaims against debtors. 3 The bankruptcy court thus found that the dismissal of the TAC 4 ended the involvement of Appellees as parties in the adversary 5 proceeding. 6 II. JURISDICTION 7 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 8 §§ 1334 and 157(b)(1). This Panel has jurisdiction under 9 28 U.S.C. § 158. 10 III. ISSUES 11 A. Whether the bankruptcy court abused its discretion in 12 certifying the interlocutory dismissal orders as final judgments 13 under Civil Rule 54(b); 14 B. Whether the bankruptcy court erred in dismissing the 15 TAC as to Appellees under Civil Rule 12(b)(6); and 16 C. Whether the bankruptcy court abused its discretion in 17 dismissing the TAC as to Appellees without leave to amend. 18 IV. STANDARDS OF REVIEW 19 We review a certification of an interlocutory judgment 20 under Rule 54(b) for abuse of discretion. Texaco, Inc. v. 21 Ponsoldt, 939 F.2d 794, 797 (9th Cir. 1991). 22 We review de novo the bankruptcy court’s grant of a motion 23 to dismiss under Civil Rule 12(b)(6). Movsesian v. Victoria 24 Versicherung AG, 629 F.3d 901, 905 (9th Cir. 2010). We may 25 affirm the bankruptcy court’s dismissal of a complaint “‘only if 26 it is clear that no relief could be granted under any set of 27 facts that could be proved consistent with the allegations.’” 28 Cooke, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc.,

-12- 1 911 F.2d 242, 244 (9th Cir. 1990)(quoting Hishon v. King & 2 Spalding, 104 S.Ct. 2229, 2232 (1984)). 3 We review a bankruptcy court’s decision to dismiss a 4 complaint with prejudice for an abuse of discretion. Stearns v. 5 Ticketmaster Corp., 655 F.3d 1013, 1018 (9th Cir. 2011). 6 In applying our abuse of discretion test, we first ‘determine de novo whether the [bankruptcy] court 7 identified the correct legal rule to apply to the relief requested.’ If the bankruptcy court identified 8 the correct legal rule, we then determine whether its ‘application of the correct legal standard [to the 9 facts] was (1) illogical, (2) implausible, or (3) without support in inferences that may be drawn 10 from the facts in the record.’ If the bankruptcy court did not identify the correct legal rule, or its 11 application of the correct legal standard to the facts was illogical, implausible, or without support in 12 inferences that may be drawn from the facts in the record, then the bankruptcy court has abused its 13 discretion. 14 USAA Fed. Sav. Bank. v. Thacker (In re Taylor), 599 F.3d 880, 15 887-88 (9th Cir. 2010)(citing United States v. Hinkson, 585 F.3d 16 1247, 1261-62 (9th Cir. 2009)). 17 We may affirm on any ground supported by the record. 18 Shanks v. Dressel, 540 F.3d 1082, 1086 (9th Cir. 2008). 19 V. DISCUSSION 20 A. The Bankruptcy Court Did Not Abuse Its Discretion In Certifying The Dismissal Orders As Final Judgments Under 21 Civil Rule 54(b) 22 The bulk of debtors’ opening brief is devoted to the issue 23 of whether the bankruptcy court abused its discretion in 24 certifying its dismissal orders as final judgments under Civil 25 Rule 54(b). Debtors’ position is curious when they themselves 26 appealed the dismissal orders and, after this Panel remanded the 27 matter back to the bankruptcy court to make further findings 28 under Civil Rule 54(b), they filed an ex parte pleading urging

-13- 1 the bankruptcy court to make the findings necessary for 2 certification. Now, taking a different approach, they maintain 3 that the very certification they once supported is improper. 4 Notwithstanding debtors’ inconsistent positions, we briefly 5 consider whether the bankruptcy court’s certification of the 6 dismissal orders was proper only because we must satisfy 7 ourselves that we are properly exercising our jurisdiction over 8 these appeals.4 “[Civil Rule] 54(b) controls the analysis of 9 finality of judgments for purposes of appeal in federal civil 10 actions, including bankruptcy proceedings.” Belli v. Temkin 11 (In re Belli), 268 B.R. 851, 855 (9th Cir. BAP 2001). We give 12 great deference to the bankruptcy court’s decision to certify 13 under Civil Rule 54(b). Texaco, Inc., 939 F.2d at 798. 14 Certification is proper if it will aid “expeditious decision” of 15 the case. Id. at 797. 16 Civil Rule 54(b), made applicable to the Bankruptcy Code by 17 Rule 7054(a), provides in part: 18 When an action presents more than one claim for relief . . . or when multiple parties are involved, the court 19 may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if 20 the court expressly determines that there is no just reason for delay. Otherwise, any order or other 21 decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of 22 23 4 Even if the dismissal orders were not final, we have 24 broad discretionary authority to entertain interlocutory appeals from orders that are not final judgments. Beverly v. Wolkowitz 25 (In re Beverly), 374 B.R. 221, 231 (9th Cir. BAP 2007). Upon 26 grant of leave to appeal, we may entertain an interlocutory appeal. Id. However, because we conclude the bankruptcy court’s 27 certification of the dismissal orders as final judgments was proper, we need not further explore the possibility of an 28 alternative basis for our jurisdiction.

-14- 1 fewer than all the parties does not end the action as to any of the claims or parties and may be revised at 2 any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and 3 liabilities. 4 We conclude that the bankruptcy court properly applied the 5 standards for certification under the rule. The bankruptcy 6 court considered the finality of its orders dismissing the TAC 7 with respect to Appellees — the TAC could not be further 8 amended, none of Appellees had filed counterclaims, and the 9 dismissal orders adjudicated all claims for relief in the TAC as 10 to each appellee, thereby ending their involvement as parties in 11 the adversary proceeding. As a consequence, there was nothing 12 left to be done with respect to Appellees except to wait for the 13 final disposition of the litigation. 14 The bankruptcy court also found no justifiable reason for 15 delaying the entry of the dismissal orders as final orders. We 16 give great deference to this finding because the bankruptcy 17 court was “‘the one most likely to be familiar with the case and 18 with any justifiable reasons for delay.’” Sheehan v. Atlanta 19 Int’l Ins. Co., 812 F.2d 465, 468 (9th Cir. 1987). Nowhere in 20 their brief do debtors set forth any justifiable reason for 21 delaying the entry of the dismissal orders as final orders. We 22 thus defer to the bankruptcy court’s findings and are satisfied 23 that we have jurisdiction over the orders on appeal. 24 B. The Bankruptcy Court Did Not Err In Dismissing The TAC 25 Although debtors contend that the bankruptcy court should 26 not have dismissed their TAC with respect to Appellees, they 27 never argue that the bases for the August 9, 2010 dismissal 28 orders under Rule 12(b)(6) — failure to state a claim for relief

-15- 1 and the running of the statute of limitations — were incorrect. 2 Instead, they argue only about the bankruptcy court’s abuse of 3 discretion in certifying the dismissal orders and set forth 4 other issues that are irrelevant to the underlying question on 5 appeal.5 6 By raising these issues, debtors clearly misunderstand the 7 scope of our review. The purpose of a motion to dismiss under 8 Civil Rule 12(b)(6) is simply to test the legal sufficiency of 9 the complaint. Therefore, our narrow scope of review of the 10 orders on appeal does not allow us to reach the merits of any 11 issue, and our inquiry is limited to the content of the 12 complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 13 581 (9th Cir. 1983). 14 1. Pleading Standards Under Civil Rule 8(a) and 9(b) 15 Generally, a plaintiff’s burden at the pleading stage is 16 relatively light. Civil Rule 8(a)(2), made applicable to the 17 Bankruptcy Code by Rule 7008, states that all that is needed is 18 “a short and plain statement of the claim showing that the 19 pleader is entitled to relief.” In turn, this means that the 20 complaint must include “sufficient allegations to put defendants 21 22 5 Debtors’ remaining “issues” ask (1) is FATCO’s recorded 23 grant deed valid? (2) does the BAP’s Opinion, “Trustee’s council [sic] is Disqualified” stand? (3) is the Appellants’ Motion to 24 Vacate the Settlement Agreement, now the Adversary? and (4) Does the “Fraud upon the Court” claim in this Adversary make this 25 appeal decision moot? Debtors’ questions appear related to facts 26 or allegations in their TAC which were not “adjudicated” to a conclusion rather than any error committed by the court in 27 relation to the standards under Civil Rule 12(b)(6). Because these “issues” or questions are irrelevant to this appeal, we do 28 not discuss them.

-16- 1 fairly on notice of the claims against them.” McKeever v. 2 Block, 932 F.2d 795, 798 (9th Cir. 1991). When a plaintiff 3 asserts multiple claims against multiple defendants, this fair 4 notice standard requires that the allegations in the complaint 5 must show which defendants are liable to the plaintiff for which 6 wrongs. See Gauvin v. Trombatore, 682 F.Supp. 1067, 1071 (N.D. 7 Cal. 1988)(plaintiff must allege the basis of his claim against 8 each defendant to satisfy [Civil Rule] 8(a)(2)); Van Dyke Ford, 9 Inc. v. Ford Motor Co., 399 F.Supp. 277, 284 (E.D. Wis. 1975) 10 (“Specific identification of the parties to the activities 11 alleged is required . . . to enable the defendant[s] to plead 12 intelligently.”). 13 These appeals also implicate Civil Rule 9(b) which states a 14 heightened standard for pleading fraud claims — a standard 15 slightly more onerous than the “short and plain statement” 16 standard under Civil Rule 8(a)(2). Civil Rule 9(b), 17 incorporated into the Bankruptcy Code by Rule 7009, requires 18 that a plaintiff must state “with particularity the 19 circumstances constituting fraud . . . .” The Ninth Circuit has 20 provided guidance for the “with particularity” requirement by 21 stating that to comport with Civil Rule 9(b) the complaint must 22 (1) specify the averred fraudulent representations; (2) aver the 23 representations were false when made; (3) identify the speaker; 24 (4) state when and where the statements were made; and (5) state 25 the manner in which the representations were false and 26 misleading. Lancaster Cmty. Hosp. v. Antelope Valley Hosp. 27 Dist., 940 F.2d 397, 405 (9th Cir. 1991). 28 Because fraud encompasses a wide variety of circumstances,

-17- 1 the requirements of Civil Rule 9(b) — like Civil Rule 8(a)(2) — 2 should provide all defendants with sufficient information to 3 formulate a response. Thus, the complaint cannot lump multiple 4 defendants together but “require[s] plaintiffs to differentiate 5 their allegations when suing more than one defendant . . . and 6 inform each defendant separately of the allegations surrounding 7 his alleged participation in the fraud.” Haskin v. R.J. 8 Reynolds Tobacco Co., 995 F.Supp. 1437, 1439 (M.D. Fla. 1998). 9 Moreover, the plaintiff must, at a minimum, “identif[y] the role 10 of [each] defendant[ ] in the alleged fraudulent scheme.” Moore 11 v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir. 12 1989). 13 2. The Standards For Dismissal Under Civil Rule 12(b)(6) 14 The above rules which set forth the pleading standards 15 overlie the standards for deciding motions to dismiss a 16 complaint under Civil Rule 12(b)(6). 17 When ruling on a motion to dismiss under Civil Rule 18 12(b)(6), we are instructed first to separate the factual and 19 legal elements of a claim. In examining the factual elements of 20 a claim, “we accept all factual allegations in the complaint as 21 true and construe the pleadings in the light most favorable to 22 the nonmoving party.” Movsesian, 629 F.3d at 905 (quoting 23 Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005)(quotation 24 marks omitted)). We then must determine whether the facts 25 alleged are sufficient to show that the plaintiff has a 26 plausible claim for relief. Ashcroft v. Iqbal, 129 S.Ct. 1937, 27 1949 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 28 570 (2007)).

-18- 1 While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, 2 a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and 3 conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual 4 allegations must be enough to raise a right to relief above the speculative level . . . . 5 6 Twombly, 550 U.S. at 555. Determining whether a complaint 7 states a plausible claim for relief will “be a context-specific 8 task that requires the reviewing court to draw on its judicial 9 experience and common sense.” Iqbal, 129 S.Ct. at 1950. In the 10 end, the determinative question is whether there is any set of 11 “facts that could be proved consistent with the allegations of 12 the complaint” that would entitle plaintiff to some relief. 13 Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002); Cooke, 14 Perkiss & Liehe, 911 F.2d at 244. We will not assume that 15 plaintiffs “can prove facts which [they have] not alleged, or 16 that the defendants have violated . . . laws in ways that have 17 not been alleged.” Associated Gen. Contractors of Cal., Inc. v. 18 Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). 19 With respect to the legal elements of a claim, our mandate 20 is different. We are not “bound to accept as true a legal 21 conclusion couched as a factual allegation.” Papasan v. Allain, 22 478 U.S. 265, 286 (1986). 23 Moreover, if the allegations show that relief is barred as 24 a matter of law, the complaint is subject to dismissal. Jones 25 v. Bock, 549 U.S. 199, 215 (2007)(dismissal appropriate under 26 Civil Rule 12(b)(6) if the allegations show that relief is 27 barred by the applicable statute of limitations); Pani v. Empire 28 Blue Cross Blue Shield, 152 F.3d 67, 74-75 (2d Cir. 1998)

-19- 1 (affirmative defense of official immunity may be resolved by 2 Civil Rule 12(b)(6) if clearly established by the allegations 3 within the complaint). 4 Finally, although the independent threshold pleading 5 requirements under Civil 9(b) support dismissal apart from Civil 6 Rule 12(b)(6), the Ninth Circuit has stated that “[a] motion to 7 dismiss a complaint or claim ‘grounded in fraud’ under [Civil] 8 Rule 9(b) for failure to plead with particularity is the 9 functional equivalent of a motion to dismiss under Rule 12(b)(6) 10 for failure to state a claim.” Vess v. Ciba-Geigy Corp. USA, 11 317 F.3d 1097, 1107 (9th Cir. 2003). 12 3. The Merits 13 Here, our review of debtors’ TAC shows that it was woefully 14 deficient with respect to the pleading requirements under Civil 15 Rules 8(a)(2) and 9(b). First, many of the claims for relief do 16 not contain a short and plain statement showing that debtors 17 were entitled to relief. Egregious examples are the eleventh 18 and thirteenth6 through eighteenth claims for relief. These 19 claims were not contained in the body of the TAC, but in the 20 prayer with no factual allegations whatsoever. Second, in 21 numerous instances, the TAC made allegations of fraud without 22 meeting the particularity requirements under Civil Rule 9(b). 23 No one can tell from reading the TAC which defendant made what 24 misrepresentation or even what the alleged misrepresentations 25 were. Third, references in most of the claims for relief are to 26 27 6 There was no twelfth claim for relief in either the body 28 or prayer of the TAC.

-20- 1 “Defendants” generally,7 lumping them all together without 2 alleging which defendants were liable to debtors for which 3 wrongs. In short, this manner of pleading does nothing to 4 apprise the respective Appellees of which allegations might 5 apply to them. As a result, trying to sort out who said or did 6 what, where, or when is a pointless exercise. Therefore, at the 7 most fundamental level, the TAC failed to provide the “fair 8 notice” to Appellees which is required under the Civil Rules for 9 pleading. 10 Next, as apparent from the face of the complaint, many of 11 debtors’ claims were based on California state law causes of 12 action which were time-barred. 13 Finally, as discussed below, with respect to the second 14 claim for relief, the trustee’s affirmative defense of quasi- 15 judicial immunity was established by the allegations within the 16 TAC. 17 These numerous deficiencies, taken together, themselves 18 demonstrate there is no basis for overturning the bankruptcy 19 court’s decision in these appeals. We may affirm on any ground 20 supported by the record. Shanks, 540 F.3d at 1086. 21 First Claim For Relief 22 Debtors’ first claim for relief sought various damages and 23 costs against “Defendants” for fraud, deceit, misrepresentation 24 and constructive fraud against a fiduciary. The bankruptcy 25 court construed debtors’ first claim for relief as a state law 26 7 27 Similar to the bankruptcy court, we liberally construe debtors’ reference to “Defendants” in the various claims for 28 relief as including Appellees.

-21- 1 fraud claim. We do as well. 2 Civil Rule 9 (b) requires that fraud be pled with 3 particularity; general and conclusory allegations do not 4 suffice. A liberal reading of this claim makes it painfully 5 clear that debtors did little more than set forth conclusory 6 allegations as against all “Defendants”. Nowhere did debtors 7 specify the averred fraudulent representations, identify the 8 speaker, state when and where the statements were made, and 9 state the manner in which the representations were false and 10 misleading. Accordingly, the bankruptcy court properly 11 dismissed debtors’ fraud claim against Appellees on Civil 12 Rule 9(b) grounds. 13 California statutes of limitations govern debtors’ fraud 14 claim for relief which is based on non-bankruptcy California 15 law. § 108(a); Cal. Sansome Co. v. U.S. Gypsum, 55 F.3d 1402, 16 1403 (9th Cir. 1995). Cal. Code Civ. Proc. (“CCP”) § 338 sets 17 forth a three year statute of limitations for fraud. Under CCP 18 § 338(d), a cause of action for fraud “is not deemed to have 19 accrued until the discovery, by the aggrieved party, of the 20 facts constituting the fraud or mistake.” 21 Here, debtors’ TAC shows that they filed the Modular Home 22 Litigation on July 26, 1999, which was based, in part, on the 23 same facts giving rise to their fraud claim in the TAC (¶ 54). 24 Therefore, debtors’ fraud claim accrued no later than July 26, 25 1999. Three years from that date would have been July 26, 2002. 26 Since debtors’ complaint was not filed until January 2, 2008, 27 their fraud claim is time-barred unless some exception applies. 28 Debtors do not argue on appeal that the “rule of discovery”

-22- 1 applies to toll the statute of limitations. Moreover, the TAC 2 does not reveal any facts that showed, among other things, 3 debtors’ lack of knowledge or lack of means of obtaining 4 knowledge of the facts constituting the alleged fraud. See Weir 5 v. Snow, 210 Cal. App. 2d 283, 292 (Cal. Ct. App. 1962)(the 6 plaintiff must plead and prove the facts showing: lack of 7 knowledge; lack of means of obtaining knowledge (in the exercise 8 of reasonable diligence the facts could not have been discovered 9 at an earlier date); and how and when he did actually discover 10 the fraud or mistake). Therefore, the bankruptcy court 11 correctly ruled that debtors’ fraud claim was time-barred. 12 Second Claim For Relief 13 Debtors’ second claim for relief sought various damages and 14 costs against “Defendants” for fraudulent inducement/rescission. 15 Our reading of the TAC comports with the bankruptcy court’s 16 interpretation that this claim is a state law claim for 17 rescission of a written contract based on fraud. A claim for 18 rescission based on fraud must be pled with particularity just 19 like a claim for fraud. 4 Witkin, Cal. Proc. 5th, § 544 at p. 20 621 (2008). 21 Debtors’ allegations are general and conclusory with 22 respect to Appellees. Debtors’ fail to identify the written 23 contract(s) they were referring to and which Appellees were 24 parties to the alleged contract(s). Debtors refer to 25 “Defendants’ express representations,” but nowhere do they state 26 what those representations were or who made them. Thus, 27 debtors’ allegations did not give Appellees fair notice of the 28 claims against them nor do the allegations allow us to

-23- 1 determine, on the facts pled, that there is any foundation for 2 debtors’ charges of fraud. Accordingly, the bankruptcy court 3 properly dismissed this claim on Civil Rule 9(b) grounds. 4 Alternatively, debtors’ claim based on the rescission of a 5 contract in writing was barred by the four-year statute of 6 limitations under CCP § 337(3).8 Under CCP § 337(3), the 7 limitations period begins to run from the date when the facts 8 occurred that entitled the aggrieved party to rescind. Since 9 the Modular Home Litigation debtors filed on July 26, 1999, was 10 based, in part, on the same facts giving rise to debtors’ 11 rescission claim, this claim accrued no later than July 26, 12 1999. Four years from that date is July 26, 2003. Debtors did 13 not file the adversary proceeding until January 2, 2008. 14 Therefore, this claim was time-barred unless an exception 15 applied. 16 Again, debtors do not contend on appeal that the “rule of 17 discovery” applies to toll the statute of limitations. Nowhere 18 in the TAC did debtors plead any facts that showed, among other 19 things, their lack of knowledge or lack of means of obtaining 20 knowledge of the facts constituting the fraud. See Weir, 21 210 Cal. App. 2d at 292. We thus conclude the bankruptcy court 22 correctly ruled that debtors’ second claim for relief was time- 23 barred. 24 Dismissal was also appropriate as to the Trustee on this 25 claim for relief because the doctrine of quasi-judicial immunity 26 8 27 Here, because the claim was so ambiguous, the bankruptcy court applied the lengthier four-year limitation period rather 28 than the three year period for fraud.

-24- 1 applied. “Bankruptcy trustees are entitled to broad immunity 2 from suit when acting within the scope of their authority and 3 pursuant to court order.” Bennett v. Williams, 892 F.2d 822, 823 4 (9th Cir. 1989); Nilsen v. Neilson (In re Cedar Funding, Inc.), 5 419 B.R. 807, 820 (9th Cir. BAP 2009). Debtors allege that 6 “Defendants” made misrepresentations to them regarding a 7 compromise motion that was filed and ultimately granted by court 8 order in the bankruptcy proceeding. Debtors also alleged that 9 the Trustee “knowingly, deliberately, [and] willfully committed 10 fraud upon the court to sell [debtors’] residence.” Not only 11 have debtors failed to plead their fraud upon the court with 12 particularity as required under Civil Rule 9(b), but the alleged 13 fraud occurred within the Trustee’s scope of authority as 14 chapter 7 trustee for debtors’ estate. Therefore, the 15 bankruptcy court correctly dismissed this claim as to the 16 Trustee on the additional ground that he was shielded from 17 liability under the derived quasi-judicial immunity defense. 18 Third Claim For Relief 19 Debtors’ third claim for relief sought various damages and 20 costs against “Defendants” for defamation/libel/slander. 21 Under California law, an essential element of defamation, 22 whether alleged as an action for libel or slander, is a showing 23 of a false statement of fact. Cort v. St. Paul Fire & Marine 24 Ins. Cos., 311 F.3d 979, 985 (9th Cir. 2002)(citing Savage v. 25 Pac. Gas & Elec. Co., 21 Cal. App. 4th 434, 444 (Cal. Ct. App. 26 (1993)(internal quotation marks omitted)). 27 Our review of the TAC shows that debtors failed to allege 28 that any of Appellees made a false statement of fact through an

-25- 1 oral statement, writing, picture, or other fixed representation. 2 Instead, the TAC only uses conclusory terms like “fraud,” 3 “slander,” or “[a] lie” without alleging any facts showing the 4 precise statements that were made or that they were false. The 5 allegations in this claim for relief fall far short of providing 6 fair notice to Appellees. Accordingly, the bankruptcy court 7 properly dismissed this claim for relief for failure to state a 8 claim against Appellees. 9 Fourth Claim For Relief 10 The fourth claim for relief sought various damages and 11 costs against “Defendants” for breach of written contract. 12 Under California law, a breach of contract action is comprised 13 of the following: (1) existence of a contract; (2) plaintiffs’ 14 performance or excuse of nonperformance; (3) defendants’ breach; 15 and (4) damages to plaintiffs as a result of the breach. 16 Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co., 116 Cal. 17 App. 4th 1375, 1391 (Cal. Ct. App. 2004). 18 Debtors allege that they entered into written contracts 19 with “Defendants” on June 21, 1998, and again on June 1, 2004. 20 Debtors refer to a contract that they signed on May 21, 1998, 21 with TCMHS to purchase a new modular home, but this contract was 22 entered into a month earlier than the date stated in this claim 23 for relief. We could not find any facts alleged that pertained 24 to a written contract with Appellees on either date referenced 25 in this claim for relief. Further, even if there were written 26 contracts in existence which Appellees could identify through 27 the allegations in the TAC, debtors fail to allege facts which 28 could be reasonably construed to match up with the remaining

-26- 1 elements of their claim. Nowhere did debtors allege their 2 performance or excuse for non-performance, and they failed to 3 allege which contract terms any of Appellees allegedly breached. 4 Therefore, we conclude that the bankruptcy court properly 5 dismissed this claim for relief because it failed to state a 6 claim against Appellees. 7 Fifth Claim For Relief 8 The fifth claim for relief sought various damages and costs 9 against “Defendants” for breach of an oral or implied contact. 10 Under California law, the elements to establish an implied 11 contract are the same as those for an express contract. See 12 Div. of Labor Law Enforcement v. Transpacific Transp. Co., 13 69 Cal. App. 3d 268, 277 (Cal. Ct. App. 1977). In other words, 14 a plaintiff must show offer, acceptance, and consideration as 15 well as a meeting of the minds. Nissan N. Am., Inc. v. Jim 16 M’Lady Oldsmobile, Inc., 486 F.3d 989 (7th Cir. 2007). The 17 existence of an implied contract turns on the intent of the 18 parties. Tony v. Sec. Experts, 20 F.3d 967, 971 (9th Cir. 19 1994). 20 Debtors allege that on June 1, 2004, they and “Defendants” 21 entered into an oral and implied contract in the County of El 22 Dorado to be performed in the County of El Dorado and in the 23 United States Bankruptcy Court in the County and City of 24 Sacramento, regarding the Cal Vet contract. Debtors further 25 allege that “Defendants” have breached the oral and/or implied 26 contracts with debtors. Yet, debtors set forth no facts showing 27 that Appellees entered into an oral or implied contract with 28 debtors; there are no allegations showing an offer, acceptance

-27- 1 or consideration, or a meeting of the minds. Paragraphs thirty- 2 five through seventy-one of the TAC fail to mention any oral or 3 implied contract made on June 1, 2004. Instead, the TAC refers 4 to a settlement agreement that was reached between Cal Vet and 5 debtors, but no terms of the purported settlement agreement are 6 alleged. We agree with the bankruptcy court that these 7 allegations, taken together, are conclusory. We are not 8 required to assume the truth of legal conclusions merely because 9 they are cast in the form of factual allegations. Papasan, 10 478 U.S. at 286; see also, Ove v. Gwinn, 264 F.3d 817, 821 (9th 11 Cir. 2001)(explaining that conclusory legal allegations and 12 unwarranted inferences are insufficient to defeat a motion to 13 dismiss). Therefore, we conclude that the bankruptcy court 14 properly dismissed this claim for relief for failure to state a 15 claim against Appellees. 16 Sixth Claim For Relief 17 The sixth claim for relief sought various damages and costs 18 against “Defendants” for breach of fiduciary duties. Under 19 California law, to state a claim for breach of fiduciary duty, a 20 plaintiff must show the existence of a fiduciary relationship, 21 its breach, and damage proximately caused by that breach. 22 Thomson v. Canyon, 198 Cal. App. 4th 594, 604 (Cal. Ct. App. 23 2011)(citations omitted). 24 Even under the most liberal reading of this claim for 25 relief, the TAC does not allege any facts to support debtors’ 26 theory as to the creation of a fiduciary relationship with any 27 of Appellees. The TAC simply alleges that “Defendants” owed 28 fiduciary duties to plaintiffs as their clients. Debtors did

-28- 1 not allege any facts showing that they were clients of 2 Appellees, that an agency relationship was created between 3 debtors and Appellees, or that debtors otherwise reposed trust 4 and confidence in Appellees to create a fiduciary relationship. 5 Wolf v. Sup. Court, 107 Cal. App. 4th 25, 29 (2003). We will 6 not assume that debtors can prove facts which they have not 7 alleged. Associated Gen. Contractors of Cal., Inc., 459 U.S. at 8 526. Moreover, debtors’ allegations are conclusory. We are not 9 required to assume the truth of legal conclusions merely because 10 they are cast in the form of factual allegations. Papasan, 11 478 U.S. at 286. Therefore, we conclude that the bankruptcy 12 court properly dismissed this claim for relief for failure to 13 state a claim against Appellees. 14 Seventh Claim For Relief 15 The seventh claim for relief sought various damages and 16 costs against “Defendants” for negligence. The bankruptcy court 17 construed this claim as one for negligent performance of 18 professional services. We do as well. 19 A cause of action for professional negligence is generally 20 governed by the two-year statute of limitations under CCP 21 § 339(1) for an “action upon a contract, obligation or liability 22 not founded upon an instrument of writing.” Thomson, 198 Cal. 23 App. 4th at 607 (stating that the shorter two-year statute of 24 limitations of CCP § 339(1) has been consistently applied to a 25 range of professional negligence actions from accountants to 26 real estate appraisers). A cause of action in tort for 27 professional negligence does not accrue until the plaintiff both 28 (1) sustains damage and (2) discovers, or should discover, the

-29- 1 negligence. Slavin v. Trout, 18 Cal. App. 4th 1536, 1540 (Cal. 2 Ct. App. 1993). 3 This claim for relief refers to the Cal Vet loan and, in 4 general, the TAC alleges that the negligent performance of 5 professional services occurred on or before the commencement of 6 the Modular Home Litigation on July 26, 1999. Debtors’ 7 professional negligence claim for relief was initiated in 8 January 2, 2008, more than nine years after their negligence 9 claim accrued on July 26, 1999. Therefore, the bankruptcy court 10 correctly ruled that this claim for relief was time-barred. 11 Eighth Claim For Relief 12 The eighth claim for relief seeks a variety of forms of 13 relief, including damages, an accounting, declaratory relief, 14 injunctive relief, and damages against the “Defendants”. 15 California law recognizes accounting as a remedy for 16 fiduciary breach. However, as stated above, debtors alleged no 17 facts showing that Appellees had a fiduciary relationship with 18 them. 19 An action for declaratory relief requires the plaintiff to 20 demonstrate the existence of an actual controversy regarding the 21 legal rights of the parties. McClain v. Octagon Plaza, LLC, 22 159 Cal. App. 4th 784, 800 (Cal. Ct. App. 2008). Where there is 23 an accrued cause of action for a past breach of contract or 24 other wrong, declaratory relief is inappropriate. Canova v. 25 Trs. of Imperial Irrigation Dist. Emp. Pension Plan, 150 Cal. 26 App. 4th 1487, 1497 (Cal. Ct. App. 2007). If a party has a 27 fully matured cause of action for money, the party must seek 28 damages rather than declaratory relief. Id. Here, the

-30- 1 assertions in the TAC including the alleged breach of contract, 2 fraud, slander, and fraudulent recording, have already occurred. 3 Thus, we agree with the bankruptcy court that debtors must seek 4 redress through a claim for money damages. 5 Further, debtors are not entitled to injunctive relief. 6 Under California law, “injunctive relief is a remedy and not, in 7 itself, a cause of action . . . .” McDowall v. Watson, 59 Cal. 8 App. 4th 1155, 1159 (Cal. 1997). Moreover, the TAC does not 9 allege any facts which would entitle them to the “remedy” of 10 injunctive relief. Debtors allege that they will continue to 11 suffer irreparable injury that cannot be adequately remedied at 12 law unless “Defendants,” and their officers, agents, and 13 employees and all other persons acting in concert with them are 14 enjoined from engaging in any further conduct and all other 15 conduct which would cause or tend to cause plaintiffs damages or 16 injuries. However, as noted by the bankruptcy court, debtors 17 fail to specify the conduct that they want enjoined and merely 18 recite the consequences if the unspecified conduct is not 19 enjoined. Likewise, debtors fail to specify which of the 20 Appellees they wish to enjoin. 21 Debtors also request various types of damages, including 22 punitive damages under Cal. Civ. Code § 3294, in this claim for 23 relief. Their request for damages is clearly duplicative. They 24 have already alleged entitlement to various damages based on 25 their assertions that Defendants committed negligence, slander, 26 libel, and fraud. These allegations are cast as separate claims 27 in the TAC and those claims each seek various types of damages, 28 including punitive damages.

-31- 1 For all these reasons, we conclude the bankruptcy court 2 properly dismissed this claim for relief against Appellees. 3 Ninth Claim For Relief 4 The ninth claim for relief seeks various damages and costs 5 against “Defendants” for intentional infliction of emotional 6 distress. Under California law, the elements of the tort of 7 intentional infliction of emotional distress include the 8 following: (1) extreme and outrageous conduct by the defendant 9 with the intention of causing, or reckless disregard of the 10 probability of causing, emotional distress; (2) the plaintiff’s 11 suffering severe or extreme emotional distress; and (3) actual 12 and proximate causation of the emotional distress by the 13 defendant’s outrageous conduct. Davidson v. City of 14 Westminster, 32 Cal.3d 197, 209 (Cal. 1982). 15 There are no facts in the TAC matching the elements for the 16 tort of intentional infliction of emotional distress. The TAC 17 fails to mention any extreme and outrageous conduct of 18 Appellees, fails to mention any facts showing that Appellees 19 performed such conduct intentionally or with reckless disregard 20 of the probability of causing emotional distress, and other than 21 debtors’ conclusory statements, fails to allege facts showing 22 that debtors suffered severe emotional distress as a result. We 23 will not assume that debtors can prove facts which they have not 24 alleged. Associated Gen. Contractors of Cal., Inc., 459 U.S. at 25 526. 26 Moreover, debtors’ allegations in the ninth claim for 27 relief constitute insufficient legal conclusions and, therefore, 28 fail to state a claim for relief. Thus, the bankruptcy court

-32- 1 properly dismissed this claim for relief against Appellees. 2 Tenth Claim For Relief 3 The tenth claim for relief seeks various damages and costs 4 against “Defendants” for negligent infliction of emotional 5 distress. In California, negligent infliction of emotional 6 distress is a “species of negligence,” not an independent tort. 7 Lawson v. Mgmt. Activities, Inc., 69 Cal. App. 4th 652, 656 8 (Cal. Ct. App. 1999). In that regard, the traditional elements 9 of negligence law come into play — duty, breach of duty, 10 causation, and damages. Id. at 657. Further, in negligence 11 cases based on emotional distress, California courts have 12 required “something more than foreseeability . . . to raise a 13 duty of care . . . .” Krupnick v. Hartford Accident & Indemnity 14 Co., 28 Cal. App. 4th 185, 202 (Cal. Ct. App. 1994). 15 Debtors allege that “Defendants” negligently and carelessly 16 failed to satisfy their duties, causing harm to debtors. These 17 allegations are nothing more than insufficient conclusory 18 allegations. Nowhere do debtors allege that Appellees owed them 19 a duty of care or whether such a duty was based on debtors’ 20 relationships with Appellees or arose as a matter of law. 21 Accordingly, debtors’ TAC fails to state a claim for negligent 22 infliction of emotional distress. 23 Further, because the gravamen of this claim for relief is 24 one of professional negligence, the two-year statute of 25 limitations in CCP § 339(1) applies. The TAC states that the 26 negligent infliction of emotional distress occurred on or before 27 debtors’ commencement of the Modular Home Litigation on July 26, 28 1999. Therefore, their negligent infliction of emotion distress

-33- 1 claim accrued no later than July 26, 1999 and would have been 2 barred if not filed by July 25, 2001. Debtors initiated this 3 claim for relief on January 2, 2008 and, therefore, this claim 4 is time-barred. For these reasons, the bankruptcy court 5 properly dismissed this claim for relief against Appellees. 6 Eleventh, Thirteenth Through Eighteenth Claims For Relief 7 The body of the TAC contained no eleventh or thirteenth 8 through eighteenth claims for relief. Rather, the prayer of the 9 TAC referred to these claims. The eleventh claim for relief 10 sought various damages and costs against defendants Kohls, Jones 11 Sommer LLP, Jamie M. Errecart, Schools Credit Union, Cal Vet, 12 Hansen Culhane, and Ronald L. Melluish for violation of 13 § 362(a) and (h). The thirteenth claim for relief seeks various 14 damages and costs against Cal Vet, the Department of Housing and 15 Community Development, and the County of El Dorado, for 16 violation of Health and Safety Code § 18000, et seq. The 17 fourteenth claim for relief seeks various damages and costs 18 against “Defendants” for breach of duty of good faith and fair 19 dealing. The fifteenth claim for relief seeks various damages 20 and costs against “Defendants” for malicious prosecution. 21 The sixteenth claim for relief seeks various damages and costs 22 against “Defendants” for fraudulent claims under §§ 152 and 23 3571. The seventeenth claim for relief seeks various damages and 24 costs against “Defendants” for declaratory relief. And, the 25 eighteenth claim for relief seeks various damages and costs 26 against “Defendants” for injunctive relief. 27 It appears that debtors’ only reference to these claims was 28 in the caption of their TAC and the prayer. These cursory

-34- 1 references were certainly not enough to constitute an 2 articulation of facts that demonstrate an entitlement to relief 3 under Iqbal. Moreover, none of these claims contained any facts 4 to put Appellees on notice of the asserted claims against them. 5 Thus, the bankruptcy court properly dismissed these claims for 6 relief against Appellees. 7 C. The Bankruptcy Court Did Not Abuse Its Discretion In Dismissing The TAC As To Appellees With Prejudice 8 9 Debtors were given two chances to amend their complaint, 10 accompanied by detailed instructions from the court. See Noll v. 11 Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987)(noting that a pro se 12 litigant is entitled to notice of the deficiencies in the 13 complaint and an opportunity to amend, unless the complaint’s 14 deficiencies could not be cured by amendment). Despite receiving 15 instructions from the bankruptcy court as to the nature of the 16 complaint’s deficiencies and how they might be corrected, 17 debtors’ TAC was once again woefully deficient. 18 Under these circumstances, we conclude that the bankruptcy 19 court did not abuse its discretion in dismissing the TAC as to 20 Appellees without leave to amend. 21 D. Outstanding Matters 22 On July 19, 2011, H&K filed an objection to debtors’ reply 23 brief, arguing that debtors raised factual issues that were not 24 raised in their opening brief. H&K contends that those issues 25 should be stricken or not considered because they were abandoned 26 or waived. In response, debtors filed a motion for relief under 27 Civil Rule 60(b)(3) on the grounds that statements made in H&K’s 28 pleading amounted to “fraud upon the court.”

-35- 1 We agree with H&K that debtors’ reply brief raises new 2 arguments with respect to allegations of fraudulent activity by 3 H&K and alleged potential conflict of interest. We do not 4 consider those arguments. See Ghahremani v. Gonzales, 498 F.3d 5 993, 997–98 (9th Cir. 2007)(issues not addressed in an opening 6 brief are deemed waived). Further, we find no merit to debtors’ 7 motion under Civil Rule 60(b)(3), as the rule is inapplicable. 8 Therefore, the motion is denied. 9 VI. CONCLUSION 10 Having determined that there is no basis for reversal, we 11 AFFIRM each of the orders on appeal. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-36-