In re: Ronald A. Neff

CourtUnited States Bankruptcy Appellate Panel for the Ninth Circuit
DecidedMarch 3, 2021
DocketCC-20-1029-FLG CC-20-1030-FLG
StatusUnpublished

This text of In re: Ronald A. Neff (In re: Ronald A. Neff) is published on Counsel Stack Legal Research, covering United States Bankruptcy Appellate Panel for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re: Ronald A. Neff, (bap9 2021).

Opinion

NOT FOR PUBLICATION FILED MAR 3 2021 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: BAP Nos. CC-20-1029-FLG RONALD A. NEFF, CC-20-1030-FLG Debtor. (Related)

DOUGLAS JOHN DENOCE, Bk. No. 1:11-bk-22424-GM Appellant, v. MEMORANDUM * RONALD A. NEFF, Appellee.

Appeal from the United States Bankruptcy Court for the Central District of California Geraldine Mund, Bankruptcy Judge, Presiding

Before: FARIS, LAFFERTY, and GAN, Bankruptcy Judges.

INTRODUCTION

Creditor Douglas John DeNoce argues that the bankruptcy court

* This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential value, see 9th Cir. BAP Rule 8024-1. erred in determining after an evidentiary hearing that chapter 7 1 debtor

Ronald A. Neff was disabled and thus entitled to claim an enhanced

homestead exemption in his real property. The bankruptcy court gave

Mr. DeNoce ample opportunities to conduct discovery, properly excluded

certain expert testimony, and made appropriate findings of fact. It also

properly denied Mr. DeNoce’s motion for reconsideration. We AFFIRM.

FACTS 2

A. Prepetition events

Dr. Neff was a practicing dentist, and Mr. DeNoce was his patient. In

2007, Dr. Neff performed multiple surgical procedures on Mr. DeNoce, but

he botched the procedures. Mr. DeNoce sued Dr. Neff in state court for

medical malpractice and recovered a judgment of $310,000.

When he treated Mr. DeNoce, Dr. Neff had a long history of drug

and alcohol abuse, which led to a criminal conviction and the eventual

revocation of his dental license. In March 2010, he applied for disability

benefits from the Social Security Administration (“SSA”). The SSA

1Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all “Rule” references are to the Federal Rules of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of Civil Procedure. 2 We borrow portions of the factual background from our prior decision in this case. See Neff v. DeNoce (In re Neff), BAP No. CC-12-1664-KiTaD, 2014 WL 448885 (9th Cir. BAP Feb. 4, 2014). We exercise our discretion to review the court’s docket, as appropriate, see Woods & Erickson, LLP v. Leonard (In re AVI, Inc.), 389 B.R. 721, 725 n.2 (9th Cir. BAP 2008), but we have not “scour[ed] the record to try to make [appellant’s] case of clear error[,]” Wells Fargo Bank, N.A. v. Loop 76, LLC (In re Loop 76, LLC), 465 B.R. 2 determined that he had become disabled on January 30, 2007 and awarded

him payments from March 2009.

B. Dr. Neff’s bankruptcy cases

After two unsuccessful chapter 13 filings, Dr. Neff filed a chapter 7

petition in 2011. He claimed a disability homestead exemption of $175,000

against his real property under California Code of Civil Procedure (“CCP”)

section 704.730(a)(3)(B), rather than the standard homestead exemption of

$75,000.

Mr. DeNoce objected to the enhanced homestead exemption

(“Exemption Objection”). He contended that Dr. Neff was able to work and

was not disabled.

Dr. Neff opposed the Exemption Objection and requested an

evidentiary hearing. The bankruptcy court declined to hold an evidentiary

hearing. It determined that Dr. Neff was able to engage in “substantial

gainful employment” under CCP section 704.730(a)(3)(B) and sustained the

Exemption Objection on that basis, allowing only the standard homestead

exemption. The parties cross-appealed the order to this Bankruptcy

Appellate Panel (“BAP”).

C. The first BAP appeal

On appeal, the BAP held that Dr. Neff “was entitled to a presumption

that he was disabled and unable to engage in substantial gainful

525, 545 (9th Cir. BAP 2012), aff’d, 578 F. App’x 644 (9th Cir. 2014).

3 employment within the meaning of the statute [CCP § 704.730(a)(3)(B)].” In

re Neff, 2014 WL 448885, at *9. The panel concluded that Mr. DeNoce had

not produced evidence to rebut the presumption, let alone carried his

ultimate burden of proof and persuasion. Thus, the BAP vacated that part

of the bankruptcy court’s order and remanded.

D. Evidentiary hearings on remand

On remand, the bankruptcy court scheduled an evidentiary hearing

to determine whether Dr. Neff was entitled to the enhanced homestead

exemption. The court allowed Mr. DeNoce extensive discovery

opportunities over several years.

Mr. DeNoce tried to obtain Dr. Neff’s SSA claims file. In 2017 (three

years after remand), he submitted to the SSA a request for all records and

reports regarding the disability determination and included Dr. Neff’s

consent authorizing release of the records. 3

After much delay, Mr. DeNoce received some records from the SSA.

He initially told the bankruptcy court that written discovery was complete.

However, he later changed his story: he told the court that he had obtained

a disc from the SSA with only incomplete records and that he had

destroyed the disc.

3The bankruptcy court stated in its decision that Mr. DeNoce prepared the consent that Dr. Neff signed. Mr. DeNoce argues on appeal that Dr. Neff’s counsel prepared it, so any deficiency in the production of records is Dr. Neff’s fault. But for the reasons we give below, this is irrelevant: Mr. DeNoce subsequently failed to take appropriate action to obtain the SSA file and support his objection.

4 The court held a two-day evidentiary hearing in November 2017, at

which Dr. Neff testified at length. The bankruptcy court overruled the

objection to the enhanced objection, finding that Dr. Neff could not earn

more than $7,200 annually and therefore would not have “substantial

gainful employment.”

Mr. DeNoce filed a motion for a new trial. The court granted the

request in part and allowed Mr. DeNoce to call Dr. Neff and four doctors

whom Mr. DeNoce said had relevant information: Dr. Goldsmith (the

SSA’s examining psychiatrist), Dr. Bilik (the SSA’s review psychologist),

and two of Dr. Neff’s treating physicians, Dr. Okhovat and Dr. Hersel.

The bankruptcy court heard extensive testimony from Drs. Hersel

and Okhovat over three days in early 2019. Mr. DeNoce had subpoenaed

records from Drs. Bilik and Goldsmith, but Dr. Bilik refused to comply, and

Dr. Goldsmith had passed away. An attorney representing the SSA

explained that SSA regulations protect its consultants such as Dr. Bilik

from testifying. 4 She also explained that Mr. DeNoce could obtain

documents from Dr. Neff’s SSA file if Dr. Neff signed a consent. Dr. Neff

agreed to sign a consent, but he later changed his mind. Mr. DeNoce

apparently took no further steps to obtain the SSA documents.

In lieu of Dr. Bilik’s testimony, the bankruptcy court allowed

4Mr. DeNoce claims that this proves that the court misled him, because it had previously instructed him to proceed by subpoena. But it was not the court’s job to give Mr.

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