In re: Robert M. Vance and Mary L. Vance

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: December 1, 2011
• Docket: EC-11-1266-DJuKi
• Status: Unpublished

Opinion

FILED DEC 01 2011 SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

1 2 3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. EC-11-1266-DJuKi ) 6 ROBERT M. VANCE and ) Bk. No. 10-21844-CMK7 MARY L. VANCE, ) 7 ) Adv. No. 10-02255-CMK Debtors. ) 8 ________________________________ ) ) 9 JUSTIN PARRISH, ) ) 10 Appellant, ) ) 11 v. ) M E M O R A N D U M1 ) 12 ROBERT M. VANCE, ) ) 13 Appellee. ) ________________________________ ) 14 Submitted Without Oral Argument 15 on November 16, 2011 16 Filed - December 1, 2011 17 Appeal from the United States Bankruptcy Court for the Eastern District of California 18 Honorable David E. Russell, Bankruptcy Judge, Presiding 19 20 Appearances: No appearance by or on behalf of Appellant, Justin Parrish. Appellee, Robert M. Vance, 21 appeared pro se and submitted on the briefs. 22 Before: DUNN, JURY, and KIRSCHER, Bankruptcy Judges. 23 24 1 This disposition is not appropriate for publication. 25 Although it may be cited for whatever persuasive value it may have 26 (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1.

1 1 This is the second appeal (“Vance Appeal”) filed by Justin 2 Parrish with respect to the same debt (“Parrish Debt”). In the 3 first appeal (“Thomas Appeal”), the Panel agreed with the bankruptcy 4 court (“California Central Bankruptcy Court”) that Mr. Parrish was 5 not entitled to relief against Glenn S. Thomas pursuant to 6 § 523(a)(2)(A), because Mr. Parrish did not prove, by a 7 preponderance of the evidence on each of the required elements, that 8 the Parrish Debt was incurred by fraud.2 We adopt the analysis of 9 the evidence in the Thomas Appeal and AFFIRM the bankruptcy court’s 10 (“California Eastern Bankruptcy Court”) determination that any 11 liability of Robert M. Vance on the Parrish Debt is discharged. 12 FACTS 13 Because the relevant factual details relating to the Parrish 14 Debt are set out at length in the memorandum decision the Panel 15 issued in the Thomas Appeal, we refer the reader to that decision 16 for the factual background relating to the Parrish Debt. We note in 17 this memorandum only the ways in which the Vance Appeal differs from 18 the Thomas Appeal. 19 Mr. Vance and his wife filed a voluntary chapter 7 petition 20 on January 27, 2010. On May 7, 2010, Mr. Parrish filed an adversary 21 proceeding in the California Eastern Bankruptcy Court seeking to 22 have any obligation of Mr. Vance on the Parrish Debt declared 23 24 25 2 See the unpublished memorandum decision entered October 7, 26 2011, in Parrish v. Thomas (In re Thomas), BAP No. CC-11-1096-DKiPa.

2 1 nondischargeable pursuant to § 523(a)(2).3 2 As relevant to the issues in the Vance Appeal, the California 3 Eastern Bankruptcy Court entered a “Pretrial Scheduling Order” on 4 August 24, 2010, which set October 28, 2010, as the date on which 5 discovery closed, and November 23, 2010 as the date for the pre- 6 trial conference. Following the pre-trial conference, the 7 California Eastern Bankruptcy Court entered a civil minute order 8 (“Trial Scheduling Order”), which (1) set the Vance Trial for 9 March 8, 2011, at 10:00 a.m., and (2) set the deadline for the 10 parties to comply with Civil Rule 26(a)(3) and Local Bankruptcy 11 Rule 9017-1 with respect to alternate direct testimony declarations 12 and marked exhibits. 13 Local Bankruptcy Rule 9017-1(a) sets forth the procedure for 14 alternate direct testimony: 15 (a) Alternate Direct Testimony Procedure. 16 (1) Purpose. The purpose of this procedure is to facilitate pretrial preparation and to streamline the 17 adducement of direct testimony in trial and contested hearings so as to reduce trial time without sacrificing 18 due process and a fair trial. This procedure shall be known as the Alternate Direct Testimony Procedure. 19 (2) Applicability. Unless otherwise ordered, the 20 Alternate Direct Testimony Procedure shall be used in all trials and contested hearings not scheduled for the law 21 22 3 Mr. Parrish previously had included Mr. Vance as a 23 defendant in the adversary proceeding he filed against Mr. Thomas. After the California Central Bankruptcy Court dismissed Mr. Vance as 24 a defendant in the adversary proceeding filed in Mr. Thomas’s 25 bankruptcy case, Mr. Parrish commenced the adversary proceeding against Mr. Vance in the California Eastern Bankruptcy Court, where 26 Mr. Vance’s bankruptcy case was pending.

3 1 and motion calendar. The failure of any party to any such trial or contested hearing to object in writing at or 2 before the pretrial conference, if one is held, or if not, on or before the date of the trial setting hearing, shall 3 be deemed as consent to the use of this alternate testimony procedure for such trial or contested hearing. 4 (3) Content and Preparation. For each witness (excluding 5 hostile or adverse witnesses) that an attorney calls on behalf of his/her client's case, there shall be prepared 6 in triplicate a succinct written declaration, executed under penalty of perjury, of the direct testimony which 7 that witness would be prepared to give as though questions were propounded in the usual fashion. Each statement of 8 fact or opinion shall be separate, sequentially numbered and shall contain only matters that are admissible under 9 the Federal Rules of Evidence (e.g., avoiding redundancies, hearsay, and other obvious objectionable 10 statements). 11 Local Bankruptcy Rule 9017-1(c) provides that the California Eastern 12 Bankruptcy Court could, in its discretion, allow live direct 13 testimony even if it had ordered alternate direct testimony by 14 declaration. 15 The Trial Scheduling Order provided that Mr. Parrish’s trial 16 materials were due February 14, 2011. 17 On February 14, 2011, Mr. Parrish complied with the Trial 18 Scheduling Order and filed his pre-trial disclosures, in which he 19 named himself and three other persons to be witnesses on his behalf, 20 and in which Mr. Parrish included the exhibits he intended to rely 21 upon at trial. Mr. Parrish also filed a declaration for each listed 22 witness to be used as direct testimony at trial. On March 2, 2011, 23 Mr. Parrish filed his trial brief. 24 Mr. Vance’s trial materials were due by February 28, 2011. 25 Mr. Vance filed his declaration and his trial brief on March 3, 26 2011.

4 1 In an apparent effort to delay the Vance Trial until after 2 the California Central Bankruptcy Court had ruled in his favor 3 against Mr. Thomas essentially on the same claim for relief, on 4 February 9, 2011, Mr. Parrish filed a motion to continue the Vance 5 Trial (“Continuance Motion”), which states in its entirety: 6 1. This is an adversary proceeding in which plaintiff is seeking to prove defendant borrowed money from plaintiff 7 through false representations and is non-dischargeable under the Bankruptcy Code. 8 2. On November 23, 2010, this court set trial for 9 March 8, 2011, and imposed a deadline of February 14, 2011 for plaintiff to file all of his witness declarations with 10 the court and upon defendant. Plaintiff will meet that deadline. 11 3. Plaintiff is the senior building inspector assigned to 12 a multi-million dollar construction project in the City of Irvine, County of Orange, California. Plaintiff is 13 committed to being on the job every day for the term of this project which is scheduled to end by the end of May, 14 2011. Plaintiff is unable to interrupt this work to prepare for and attend the trial as currently scheduled 15 for March 8th, 2011. 16 4. Plaintiff also expects to call three additional witnesses. One of those witnesses, an attorney, is not 17 available for the current trial date. 18 5. Plaintiff is otherwise ready for trial and will serve upon defendant all of the materials as described in the 19 Court’s minute order of November 23, 2010. 20 6. Plaintiff anticipates that defendant will refuse to consent to the continuance of this trial date. 21 7. In the meantime, plaintiff wishes to engage defendant 22 in settlement negotiations in order to obviate the necessity of trial. 23 8. Trial against [defendant’s] business partner, Glenn S. 24 Thomas, based on the identical issues is currently scheduled in the Bankruptcy Court for the Central District 25 of California for February 23, 2011. 26 9. Plaintiff will be calling the same witnesses and

5 1 offering the same exhibits at that trial as in his trial scheduled in the Eastern District of California. 2 Plaintiff desires to show defendant that he has a strong case and that settlement would benefit all concerned. 3 4 Continuance Motion at pp. 2-3 (emphasis added). 5 Mr. Parrish set the Continuance Motion to be heard at 9:30 6 a.m. on March 8, 2011, immediately before the commencement of the 7 Vance Trial. On February 22, 2011, a deputy clerk of the California 8 Eastern Bankruptcy Court left a voice mail message for Mr. Parrish 9 informing him that the Continuance Motion would be heard at 10 10:00 a.m. by Judge Russell and requiring that he file an amended 11 notice of the hearing on the Continuance Motion. On February 28, 12 2011, Mr. Parrish filed the amended notice of hearing on the 13 Continuance Motion. Also on February 28, 2011, Mr. Parrish filed a 14 reply (“Reply”) to Mr. Vance’s opposition to the Continuance Motion, 15 in which Mr. Parrish asserted that because Mr. Vance had filed no 16 declarations or exhibits, he would not be prejudiced by any delay of 17 the Vance Trial. 18 Notwithstanding notification from the California Eastern 19 Bankruptcy Court that his hearing on the Continuance Motion was set 20 at 10:00 a.m. before Judge Russell, on the Friday before the 21 hearing, Mr. Parrish “signed up with CourtCall” to appear 22 telephonically for “the 9:30 a.m. law and motion calendar.” On the 23 Monday before the hearing, CourtCall informed Mr. Parrish that they 24 were cancelling his telephone appearance for the 9:30 a.m. law and 25 motion calendar. Mr. Parrish asserts that because of this chain of 26 events, he was not able to appear at the 10:00 a.m. hearing on the

6 1 Continuance Motion. 2 On March 8, 2011, the California Eastern Bankruptcy Court 3 called the hearing on the Continuance Motion. Noting no appearance 4 by or on behalf of Mr. Parrish, the bankruptcy judge asked the court 5 clerk whether a message had been received from Mr. Parrish. The 6 court clerk responded: “I believe so. I believe that he was -- 7 what I have heard was that he was not going to be appearing today.” 8 The California Eastern Bankruptcy Court then ruled on the 9 Continuance Motion: 10 I read the [Continuance Motion]. [Mr. Parrish] basically states that he’s working elsewhere and that one of his 11 witnesses isn’t available. Unfortunately for him, this Court is ready to proceed to trial. The trial date has 12 been set and we’re ready to go, and the Plaintiff is not here. The Plaintiff is apparently more interested in his 13 job than he is in proceeding with his case. 14 Hrg. Tr. (March 8, 2011) at 3:23-4:4. 15 Although Mr. Parrish did not appear for the Vance Trial on 16 March 8, 2011, the bankruptcy court conducted the Vance Trial in his 17 absence. The only witness was Mr. Vance. Mr. Vance “testified” 18 that on February 23, 2011, the Central California Bankruptcy Court 19 had conducted the trial in Mr. Parrish’s § 523(a)(2) adversary 20 proceeding against Mr. Thomas. In the Thomas Trial, on the same 21 evidence Mr. Parrish presented for the Vance Trial as his alternate 22 direct testimony, the California Central Bankruptcy Court had found 23 “[t]here was no fraud.” Mr. Vance also clarified for the California 24 Eastern Bankruptcy Court that Mr. Vance, as of the current March 8 25 trial date, still had never met Mr. Parrish. The California Eastern 26 Bankruptcy Court then made the following findings on the record:

7 1 I have reviewed the documents that were submitted by both sides prior to trial. I know that that’s not necessarily 2 the best evidence that’s available, but what was presented, I agree with you, Mr. Vance, they do not show 3 fraud, certainly not on your part. You never met the man, never talked to him prior to his complaint being filed, I 4 guess. . . . Consequently, judgment will be entered in your favor. I’m going to enter a judgment rather than 5 dismissing the case so that [Mr. Parrish] has had his opportunity to be here in court and he wasn’t here. He 6 presented evidence, you presented evidence. I reviewed that evidence and concluded that you are entitled to a 7 judgment in your favor, and that’s going to be the ruling. 8 Hrg. Tr. (March 8, 2011) at 7:19-8:20. 9 On March 10, 2011, the California Eastern Bankruptcy Court 10 entered two civil minute orders. The civil minute order with 11 respect to the Continuance Motion provided: “The motion is ORDERED 12 DENIED.” The civil minute order with respect to the Vance Trial 13 provided: “IT IS ORDERED that judgment is awarded in favor of 14 defendant; any obligation owed to Justin Parrish by Robert Vance is 15 discharged.” 16 Mr. Parrish timely filed a motion to vacate the “judgment” 17 and for a new trial (“New Trial Motion”). In the New Trial Motion, 18 Mr. Parrish complained that the Vance Trial should not have taken 19 place, primarily because he had requested a continuance of the trial 20 date, and that both the California Eastern Bankruptcy Court and 21 Mr. Vance had “plenty of advance notice” that Mr. Parrish “wished” 22 the Vance Trial to be continued. 23 In the New Trial Motion, Mr. Parrish characterized as 24 “facile” the California Eastern Bankruptcy Court’s reasoning that 25 because Mr. Parrish had never met Mr. Vance, Mr. Vance could not 26 have committed fraud. Mr. Parrish asserts that had he been present

8 1 at the Vance Trial: 2 - He would have alerted the California Eastern Bankruptcy 3 Court to a joint venture agreement Mr. Vance had signed representing 4 that Mr. Vance and Mr. Thomas had a 39.5-mile fiber optic job in 5 Northern California, and to “evidence” that “they wished to borrow 6 large sums of money to finance the job.” 7 - He would have alerted the California Eastern Bankruptcy 8 Court to an equipment lease and purchase agreement also signed by 9 Mr. Vance, and to “evidence” that Mr. Thomas had told Mr. Parrish 10 that Mr. Vance needed the items of equipment identified in the 11 agreement to complete the work. 12 - He would have pointed out to the California Eastern 13 Bankruptcy Court the direct testimony of Valdean Watson, an 14 attorney, who opined that the documents referred to above 15 constituted “unfortunate evidence” that Mr. Thomas and Mr. Vance 16 wanted to borrow a large sum of money from Mr. Parrish without any 17 intention of paying it back. 18 In addition to the New Trial Motion, Mr. Parrish also filed a 19 motion for additional findings of fact and conclusions of law 20 (“Additional Findings Motion”), asserting that the California 21 Eastern Bankruptcy Court failed to state on the record how 22 Mr. Parrish had failed to meet his burden of proving fraud. 23 Mr. Vance filed his own post-judgment motion, through which 24 he sought to recover legal fees and costs of defense (“Costs 25 /// 26 ///

9 1 Motion”).4 2 Following a hearing held May 12, 2011, on the three post- 3 trial motions, the California Eastern Bankruptcy Court denied the 4 New Trial Motion, on the basis that Mr. Parrish was required to 5 appear at the Vance Trial notwithstanding the existence of his 6 unresolved Continuance Motion. Under a mistaken recollection that 7 the adversary complaint had been dismissed when Mr. Parrish did not 8 appear at the Vance Trial, the California Eastern Bankruptcy Court 9 also denied the Additional Findings Motion. Finally, the California 10 Eastern Bankruptcy Court denied Mr. Vance’s Costs Motion, finding 11 that there was no basis for awarding fees in the case. Civil minute 12 orders denying each of the post-trial motions were entered May 12, 13 2011, and Mr. Parrish promptly filed a notice of appeal. 14 JURISDICTION 15 The California Eastern Bankruptcy Court had jurisdiction 16 under 28 U.S.C. §§ 1334 and 157(b)(2)(I). We have jurisdiction 17 under 28 U.S.C. § 158. 18 ISSUES 19 Mr. Parrish asserts on appeal that the California Eastern 20 Bankruptcy Court abused its discretion in denying the Continuance 21 Motion, the New Trial Motion, and the Additional Findings Motion. 22 Mr. Parrish also asserts that the California Eastern Bankruptcy 23 Court abused its discretion by not sanctioning Mr. Vance for 24 25 4 Mr. Parrish and Mr. Vance both appeared pro se in all 26 proceedings before the California Eastern Bankruptcy Court.

10 1 bringing the Costs Motion. Finally, Mr. Parrish asserts that the 2 California Eastern Bankruptcy Court erred when it ruled that 3 Mr. Vance was entitled to a discharge of the Parrish Debt. 4 STANDARDS OF REVIEW 5 We may affirm the bankruptcy court’s decision on any ground 6 fairly supported by the record. Wirum v. Warren (In re Warren), 7 568 F.3d 1113, 1116 (9th Cir. 2009). 8 Ordinarily, we will not consider an issue raised for the 9 first time on appeal. Golden Gate Hotel Ass'n v. City & County of 10 San Francisco, 18 F.3d 1482, 1487 (9th Cir. 1994). 11 DISCUSSION 12 Our decision in this appeal is easily reached. In the 13 Continuance Motion, Mr. Parrish stated that he would be “calling 14 the same witnesses and offering the same exhibits at [the Vance 15 Trial as in the Thomas Trial] . . . .” The declarations and the 16 exhibits that Mr. Parrish relied upon as his alternate direct 17 testimony in the Vance Trial was a subset of the evidence he relied 18 upon in the Thomas Trial. The Panel conducted a complete de novo 19 review of the sufficiency of that evidence in the unpublished 20 memorandum decision issued in the Thomas Appeal and found that 21 evidence wanting to except the Parrish Debt from Mr. Thomas’s 22 discharge. We therefore find no reversible error in the California 23 Eastern Bankruptcy Court’s determination that any liability 24 Mr. Vance might have on the Parrish Debt likewise was discharged. 25 In light of this determination, we do not address 26 Mr. Parrish’s issues with respect to the Continuance Motion, the New

11 1 Trial Motion, and the Additional Findings Motion. 2 We reject Mr. Parrish’s assertion on appeal that the 3 California Eastern Bankruptcy Court abused its discretion when it 4 failed to sanction Mr. Vance for prosecuting the Costs Motion. 5 Nowhere in the record before us can we find that Mr. Parrish asked 6 the bankruptcy court to impose any sanction on Mr. Vance. The 7 relief Mr. Parrish requested in his opposition to the Costs Motion 8 was that the California Eastern Bankruptcy Court deny the Costs 9 Motion, “but only after the Court takes the time to examine 10 defendant Robert M. Vance to document his PERJURY AND FRAUD.” 11 CONCLUSION 12 Based on the Panel’s analysis of Mr. Parrish’s evidence in 13 the Thomas Appeal, which we adopt for purposes of disposition of the 14 Vance Appeal, the California Eastern Bankruptcy Court did not err in 15 its determination that the Parrish Debt was discharged in 16 Mr. Vance’s bankruptcy case. We AFFIRM. 17 18 19 20 21 22 23 24 25 26