FILED DEC 18 2013 1 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT
3 OF THE NINTH CIRCUIT 5 6 In re: ) BAP Nos. CC-13-1124-TaDKi 7 ) CC-13-1125-TaDKi* RICARDO PONCE, ) 8 ) Bk. Nos. 10-43605 Debtor. ) 10-41996 9 ______________________________) 10 In re: ) Adv. Nos. 11-01067 ) 11-01022 ) 12 Debtor. ) 13 ______________________________) JOSE AQUINO, ) 14 ) Appellant, ) 15 ) 16 v. ) MEMORANDUM** ) Appellee. ) 18 ) 19 20 21 22 * While not formally consolidated, these two related 23 adversary proceedings were heard by the bankruptcy court at the 24 same time and were considered together. This memorandum applies to both appeals, and the clerk is directed to file a copy of this 25 memorandum in each 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 Appellant, ) 2 ) 3 v. ) ) ) 5 Appellee. ) 6 )
7 Submitted Without Oral Argument on November 21, 2013 8 9 Filed – December 18, 2013
10 Appeal from the United States Bankruptcy Court for the Central District of California 11 12 Honorable Meredith A. Jury, Bankruptcy Judge, Presiding
13 14 Appearances: Appellant Jose Aquino, pro se, on brief; Dennis M. Assuras, Esq. on brief for appellees Ricardo Ponce 15 and Jose Luis Ponce, Jr. 16 Before: TAYLOR, DUNN, and KIRSCHER, Bankruptcy Judges. 17 19 Brothers Jose Luis Ponce ("Jose Luis") and Ricardo Ponce 20 ("Ricardo" and jointly hereafter, "Debtors")1 each filed 21 chapter 72 bankruptcy petitions. Jose Aquino ("Aquino") 22 subsequently filed adversary proceedings alleging that debts owed 23 to him by each of the Debtors were nondischargeable based on, 24 25 1 As the Debtors bear the same family name, we will refer to them by their given names. We intend no disrespect by such 26 informality. 27 2 Unless otherwise indicated, all chapter and section 28 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
2 1 among other grounds, § 523(a)(2)(A). The bankruptcy court tried 2 the proceedings together and found that neither Jose Luis nor 3 Ricardo committed fraud in regards to the Aquino debt. Aquino 4 appeals from these judgments. We AFFIRM the bankruptcy court. 6 The Debtors3 owned a mixed martial arts business, Adrenaline 7 FC, LLC (hereafter, "Adrenaline"). At some point, Aquino and the 8 Debtors discussed a business venture in which Aquino would invest 9 $150,000 in order to help the Debtors keep Adrenaline open. The 10 discussion covered each person's role in the company; the Debtors 11 stated they would do "everything that needs to be done. . . ." 12 Hr'g. Tr. (hereafter, "Transcript") (Mar. 4, 2013) at 6:10. The 13 Debtors also represented that Hector Ramirez (hereafter, 14 "Ramirez") would be involved in, among other things, Adrenaline's 15 management. 16 Jose Luis filed a chapter 7 bankruptcy case on October 1, 17 2010. Shortly thereafter, Adrenaline commenced its own chapter 7 18 bankruptcy case. Ricardo subsequently filed his chapter 7 19 bankruptcy case on October 18, 2010. 20 Aquino filed adversary proceedings against Jose Luis and 21 Ricardo alleging, among other things, that certain debts owed to 22 him were nondischargeable under § 523(a)(2)(A). The adversary 23 complaints4 ("Complaints") alleged that the Debtors, on behalf of 24 25 3 Apparently, the Debtors have a family relationship with Aquino. 26 4 27 The adversary complaints in both cases are exactly the same, with the exception of the Debtors' names and the adversary 28 proceeding numbers.
3 1 Adrenaline, borrowed approximately $150,000 from Aquino. The 2 Complaints also alleged that the Debtors each personally 3 guaranteed repayment of the loans.5 Aquino asserted that he and 4 the Debtors also entered into a Partnership Agreement (hereafter, 5 "Agreement"). 6 The Joint Pre-trial Report and Order (hereafter, "JPTO") 7 listed the issues of fact to be determined at trial as, among 8 others, whether the Debtors made knowingly false representations 9 in order to acquire the investment from Aquino and whether Aquino 10 justifiably relied upon the Debtors' statements. The JPTO listed 11 the sole issue of law to be determined at trial as whether the 12 debts owed to Aquino were dischargeable.6 13 After a joint trial, the bankruptcy court stated that in 14 order to find for Aquino, it needed to find that the evidence 15 weighed in Aquino's favor 51%/49%. Under this metric, it ruled 16 for the Debtors. 17 The bankruptcy court found that due to the fractured 18 familial relationship between Aquino and the Debtors, none of the 19 parties were particularly credible witnesses. It accorded 20 greater weight to the Debtors' testimony, however. It then 21 determined that Aquino did not prove that Debtors made false 22 23 5 In the Complaints, Aquino asserts that the debts resulted 24 from loans. In the Transcript, Aquino testifies that the debts arose in connection with an investment. 25 6 Although the Complaints included other § 523 claims, the 26 JPTO only referenced the § 523(a)(2)(A) claim. The Transcript 27 also reflects that the bankruptcy court referred to "justifiable reliance." Therefore, we assume that the bankruptcy court 28 rendered its decision only as to that claim.
4 1 representations. It also determined that Aquino could not have 2 justifiably relied on the Debtors' statements. 3 The bankruptcy court subsequently entered judgments 4 ("Judgments") in favor of the Debtors.7 Aquino timely appealed.8 6 The bankruptcy court had jurisdiction under 28 U.S.C. 7 §§ 1334 and 157(b)(2)(I). We have jurisdiction over this appeal 8 pursuant to 28 U.S.C. § 158. 10 Did the bankruptcy court identify and apply the correct 11 standard of proof in determining the § 523(a)(2)(A) issues? 13 In reviewing a bankruptcy court's dischargeability 14 determination, we review its findings of fact for clear error and 15 its conclusions of law de novo. Oney v. Weinberg 16 (In re Weinberg), 410 B.R. 19, 28 (9th Cir. BAP 2009). 18 On appeal, Aquino argues that the bankruptcy court erred in 19 its application of the preponderance of the evidence standard. 20 Based on Aquino’s pro se status, we liberally construe his 21 pleadings and other documents. See Nilsen v. Nielson (In re 22 Cedar Funding, Inc.), 419 B.R. 807, 816 (9th Cir. BAP 2009). 23 A bankruptcy court uses the preponderance of the evidence 24 25 7 The Judgments provided that the actions were dismissed on the merits. 26 8 27 Aquino filed the Notices of Appeal on March 18, 2013, but the Judgments were entered on March 19, 2013. Thus, the Notices 28 of Appeal were timely. See Fed. R. Bankr. P. 8002(a).
5 1 standard when determining whether a debt is nondischargeable 2 under § 523(a). Grogan v. Garner, 498 U.S. 279, 291 (1991). 3 This standard requires the finder of fact to conclude that "the 4 proposition [is] more likely true than not. . .” in order to find 5 in favor of the creditor. United States v. Arnold & Baker Farms 6 (In re Arnold and Baker Farms), 177 B.R. 648 (9th Cir. BAP 1994). 7 The creditor, thus, has the burden of proof. Ghomeshi v. Sabban 8 (In re Sabban), 384 B.R. 1, 5 (9th Cir. BAP 2008), aff’d, 9 600 F.3d 1219 (9th Cir. 2010).
Free access — add to your briefcase to read the full text and ask questions with AI
FILED DEC 18 2013 1 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT
3 OF THE NINTH CIRCUIT 5 6 In re: ) BAP Nos. CC-13-1124-TaDKi 7 ) CC-13-1125-TaDKi* RICARDO PONCE, ) 8 ) Bk. Nos. 10-43605 Debtor. ) 10-41996 9 ______________________________) 10 In re: ) Adv. Nos. 11-01067 ) 11-01022 ) 12 Debtor. ) 13 ______________________________) JOSE AQUINO, ) 14 ) Appellant, ) 15 ) 16 v. ) MEMORANDUM** ) Appellee. ) 18 ) 19 20 21 22 * While not formally consolidated, these two related 23 adversary proceedings were heard by the bankruptcy court at the 24 same time and were considered together. This memorandum applies to both appeals, and the clerk is directed to file a copy of this 25 memorandum in each 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 Appellant, ) 2 ) 3 v. ) ) ) 5 Appellee. ) 6 )
7 Submitted Without Oral Argument on November 21, 2013 8 9 Filed – December 18, 2013
10 Appeal from the United States Bankruptcy Court for the Central District of California 11 12 Honorable Meredith A. Jury, Bankruptcy Judge, Presiding
13 14 Appearances: Appellant Jose Aquino, pro se, on brief; Dennis M. Assuras, Esq. on brief for appellees Ricardo Ponce 15 and Jose Luis Ponce, Jr. 16 Before: TAYLOR, DUNN, and KIRSCHER, Bankruptcy Judges. 17 19 Brothers Jose Luis Ponce ("Jose Luis") and Ricardo Ponce 20 ("Ricardo" and jointly hereafter, "Debtors")1 each filed 21 chapter 72 bankruptcy petitions. Jose Aquino ("Aquino") 22 subsequently filed adversary proceedings alleging that debts owed 23 to him by each of the Debtors were nondischargeable based on, 24 25 1 As the Debtors bear the same family name, we will refer to them by their given names. We intend no disrespect by such 26 informality. 27 2 Unless otherwise indicated, all chapter and section 28 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
2 1 among other grounds, § 523(a)(2)(A). The bankruptcy court tried 2 the proceedings together and found that neither Jose Luis nor 3 Ricardo committed fraud in regards to the Aquino debt. Aquino 4 appeals from these judgments. We AFFIRM the bankruptcy court. 6 The Debtors3 owned a mixed martial arts business, Adrenaline 7 FC, LLC (hereafter, "Adrenaline"). At some point, Aquino and the 8 Debtors discussed a business venture in which Aquino would invest 9 $150,000 in order to help the Debtors keep Adrenaline open. The 10 discussion covered each person's role in the company; the Debtors 11 stated they would do "everything that needs to be done. . . ." 12 Hr'g. Tr. (hereafter, "Transcript") (Mar. 4, 2013) at 6:10. The 13 Debtors also represented that Hector Ramirez (hereafter, 14 "Ramirez") would be involved in, among other things, Adrenaline's 15 management. 16 Jose Luis filed a chapter 7 bankruptcy case on October 1, 17 2010. Shortly thereafter, Adrenaline commenced its own chapter 7 18 bankruptcy case. Ricardo subsequently filed his chapter 7 19 bankruptcy case on October 18, 2010. 20 Aquino filed adversary proceedings against Jose Luis and 21 Ricardo alleging, among other things, that certain debts owed to 22 him were nondischargeable under § 523(a)(2)(A). The adversary 23 complaints4 ("Complaints") alleged that the Debtors, on behalf of 24 25 3 Apparently, the Debtors have a family relationship with Aquino. 26 4 27 The adversary complaints in both cases are exactly the same, with the exception of the Debtors' names and the adversary 28 proceeding numbers.
3 1 Adrenaline, borrowed approximately $150,000 from Aquino. The 2 Complaints also alleged that the Debtors each personally 3 guaranteed repayment of the loans.5 Aquino asserted that he and 4 the Debtors also entered into a Partnership Agreement (hereafter, 5 "Agreement"). 6 The Joint Pre-trial Report and Order (hereafter, "JPTO") 7 listed the issues of fact to be determined at trial as, among 8 others, whether the Debtors made knowingly false representations 9 in order to acquire the investment from Aquino and whether Aquino 10 justifiably relied upon the Debtors' statements. The JPTO listed 11 the sole issue of law to be determined at trial as whether the 12 debts owed to Aquino were dischargeable.6 13 After a joint trial, the bankruptcy court stated that in 14 order to find for Aquino, it needed to find that the evidence 15 weighed in Aquino's favor 51%/49%. Under this metric, it ruled 16 for the Debtors. 17 The bankruptcy court found that due to the fractured 18 familial relationship between Aquino and the Debtors, none of the 19 parties were particularly credible witnesses. It accorded 20 greater weight to the Debtors' testimony, however. It then 21 determined that Aquino did not prove that Debtors made false 22 23 5 In the Complaints, Aquino asserts that the debts resulted 24 from loans. In the Transcript, Aquino testifies that the debts arose in connection with an investment. 25 6 Although the Complaints included other § 523 claims, the 26 JPTO only referenced the § 523(a)(2)(A) claim. The Transcript 27 also reflects that the bankruptcy court referred to "justifiable reliance." Therefore, we assume that the bankruptcy court 28 rendered its decision only as to that claim.
4 1 representations. It also determined that Aquino could not have 2 justifiably relied on the Debtors' statements. 3 The bankruptcy court subsequently entered judgments 4 ("Judgments") in favor of the Debtors.7 Aquino timely appealed.8 6 The bankruptcy court had jurisdiction under 28 U.S.C. 7 §§ 1334 and 157(b)(2)(I). We have jurisdiction over this appeal 8 pursuant to 28 U.S.C. § 158. 10 Did the bankruptcy court identify and apply the correct 11 standard of proof in determining the § 523(a)(2)(A) issues? 13 In reviewing a bankruptcy court's dischargeability 14 determination, we review its findings of fact for clear error and 15 its conclusions of law de novo. Oney v. Weinberg 16 (In re Weinberg), 410 B.R. 19, 28 (9th Cir. BAP 2009). 18 On appeal, Aquino argues that the bankruptcy court erred in 19 its application of the preponderance of the evidence standard. 20 Based on Aquino’s pro se status, we liberally construe his 21 pleadings and other documents. See Nilsen v. Nielson (In re 22 Cedar Funding, Inc.), 419 B.R. 807, 816 (9th Cir. BAP 2009). 23 A bankruptcy court uses the preponderance of the evidence 24 25 7 The Judgments provided that the actions were dismissed on the merits. 26 8 27 Aquino filed the Notices of Appeal on March 18, 2013, but the Judgments were entered on March 19, 2013. Thus, the Notices 28 of Appeal were timely. See Fed. R. Bankr. P. 8002(a).
5 1 standard when determining whether a debt is nondischargeable 2 under § 523(a). Grogan v. Garner, 498 U.S. 279, 291 (1991). 3 This standard requires the finder of fact to conclude that "the 4 proposition [is] more likely true than not. . .” in order to find 5 in favor of the creditor. United States v. Arnold & Baker Farms 6 (In re Arnold and Baker Farms), 177 B.R. 648 (9th Cir. BAP 1994). 7 The creditor, thus, has the burden of proof. Ghomeshi v. Sabban 8 (In re Sabban), 384 B.R. 1, 5 (9th Cir. BAP 2008), aff’d, 9 600 F.3d 1219 (9th Cir. 2010). The analysis is strictly 10 construed against the creditor and in favor of the debtor. Id. 11 (citation omitted). 12 Aquino argues that the bankruptcy court erred because, 13 rather than apply a “50.0001%” preponderance of the evidence 14 standard, it applied a 50%/50% standard. Aquino misunderstood 15 the bankruptcy court. 16 In its ruling, the bankruptcy court noted the difficulty in 17 assessing the credibility of the witnesses given the fractured 18 familial relationship and high emotions throughout the trial. 19 The bankruptcy court then commented that: "[i]f [it] were to 20 weigh here, it might be 50/50 and it might be people were excited 21 in investing in a business, and people heard what they thought 22 they heard and nobody lied." Transcript at 10:14-17. Aquino 23 focuses on the "50/50" comment. 24 The bankruptcy court, however, also stated that "[she would] 25 rule for the Defendant because [the] Plaintiff has the burden. 26 And, therefore, no matter how I [weighed] it for the Plaintiff to 27 28
6 1 win, it [had] to be 51/49."9 Transcript at 10:12-14. Thus, it 2 is apparent that the bankruptcy court identified and applied the 3 correct standard of proof. 4 Aquino also argues that the bankruptcy court made 5 hypothetical and incomplete findings. He argues that the 6 bankruptcy court's decision should be remanded as a result. We 7 disagree. 8 We may remand a decision back to the bankruptcy court if 9 there are incomplete findings, but only if the findings are such 10 that we cannot ascertain the bankruptcy court's reasoning. See 11 First Yorkshire Holdings, Inc. v. Pacifica L 22, LLC (In re First 12 Yorkshire Holdings, Inc.), 470 B.R. 864, 871 (9th Cir. BAP 2012). 13 Here, the bankruptcy court fully explained the weight it gave to 14 the witnesses' testimony at trial and made various other 15 findings. Thus, its findings are ascertainable and neither 16 hypothetical nor incomplete. 17 Finally, we note that Aquino obliquely criticizes the 18 bankruptcy court’s evidentiary rulings in his statement of issues 19 on appeal. He fails to explain this assertion in his opening 20 brief. Thus, he waives any particularized argument. See City of 21 Emeryville v. Robinson, 621 F.3d 1251, 1261 (9th Cir. 2010) 22 (appellate courts in this circuit “will not review issues which 23 are not argued specifically and distinctly in a party’s opening 24 brief.”). In any event, we discern no error in this regard. The 25 bankruptcy court enjoys substantial discretion in weighing 26 9 27 To the extent Aquino argues that the error lies in the use of 51%/49% versus 50.0001%/49.0009% we disagree; this would be a 28 distinction without a difference.
7 1 evidence and making determinations as to credibility following a 2 trial. See Anderson v. City of Bessemer City, N.C., 470 U.S. 3 564, 573 (1985). The bankruptcy court did just that; it 4 sufficiently weighed the parties' evidence and determined the 5 witnesses' credibility in light of the testimony. 7 For the reasons set forth above, we AFFIRM. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28