In re: Shellie Melissa Halper

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: March 13, 2018
• Docket: CC-17-1171-FSTa CC-17-1172-FSTa
• Status: Unpublished

Opinion

FILED 1 NOT FOR PUBLICATION MAR 13 2018 SUSAN M. SPRAUL, CLERK 2 U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 3 UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT 4 5 In re: ) BAP No. CC-17-1171-FSTa ) CC-17-1172-FSTa 6 SHELLIE MELISSA HALPER, ) (Related) ) 7 Debtor. ) Bk. No. 1:09-bk-23807-GM ______________________________) 8 ) SHELLIE MELISSA HALPER, ) Adv. No. 1:11-ap-01319-GM 9 ) Appellant, ) 10 ) v. ) 11 ) TWIN PALMS LENDING GROUP, LLC,) 12 ) Appellee. ) 13 ______________________________) ) 14 SHELLIE MELISSA HALPER, ) Adv. Pro. 1:11-ap-01317-GM ) 15 Appellant, ) ) 16 v. ) MEMORANDUM* ) 17 SOLOMON M. COHEN, ) ) 18 Appellee. ) ______________________________) 19 Argued and Submitted on February 22, 2018 20 at Pasadena, California 21 Filed – March 13, 2018 22 Appeal from the United States Bankruptcy Court for the Central District of California 23 Honorable Geraldine Mund, Bankruptcy Judge, Presiding 24 25 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, see 28 9th Cir. BAP Rule 8024-1. 1 Appearances: Michael D. Franco argued for appellant Shellie Melissa Halper; Allan D. Sarver argued for 2 appellees Twin Palms Lending Group, LLC and Solomon M. Cohen. 3 4 Before: FARIS, SPRAKER, and TAYLOR, Bankruptcy Judges. 5 6 INTRODUCTION 7 Chapter 71 debtor Shellie Melissa Halper refused to sit for 8 her deposition in two related adversary proceedings for over five 9 years, first invoking her Fifth Amendment privilege against self- 10 incrimination, then citing a family illness, then claiming her 11 own illness, and finally reasserting her (by then inapplicable) 12 Fifth Amendment privilege. Appellees Twin Palms Lending Group, 13 LLC (“Twin Palms”) and Solomon M. Cohen (collectively, “Lenders”) 14 sought terminating sanctions for her discovery abuses. The 15 bankruptcy court gave her a final chance to comply, ordering her 16 to pay $40,000 (a portion of her adversaries’ attorneys’ fees) 17 and appear for her deposition. When she failed to comply, the 18 bankruptcy court granted default judgment in favor of Twin Palms 19 and Mr. Cohen and awarded them nondischargeable judgments of 20 $2.38 million and $9.44 million, respectively. 21 On appeal, Ms. Halper argues that the bankruptcy court erred 22 in granting the Lenders default judgment. We AFFIRM. 23 24 25 1 26 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all 27 “Rule” references are to the Federal Rules of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal 28 Rules of Civil Procedure.

2 1 FACTUAL BACKGROUND2 2 A. Prepetition events 3 In or around 2007, Ms. Halper and her business partner 4 Ronald Stover, through various entities, solicited loans from 5 dozens of lenders allegedly to fund the purchase and development 6 of real property located in Mexico (the “Mexico Investment”). 7 Two of those lenders were Mr. Cohen and Twin Palms. 8 Mr. Cohen alleged that, beginning in February 2007, he made 9 a total of ten loans to Ms. Halper totaling $2.9 million. 10 Initially, the loans were intended to fund the Mexico Investment. 11 In the summer of 2007, Ms. Halper and Mr. Stover told Mr. Cohen 12 that they needed money to fund litigation against Larry Flynt 13 (the “Flynt Litigation”), the settlement of which was expected to 14 generate over $15 million. Mr. Cohen agreed to release the 15 collateral securing some of the loans, extend the maturity date 16 on some of the loans, and lend additional funds, based on the 17 representation that Ms. Halper and Mr. Stover would repay him in 18 full out of the settlement funds received in the Flynt 19 Litigation. Ms. Halper further represented that they would 20 record a replacement mortgage on the Mexico property in favor of 21 Mr. Cohen. But despite settlement of the Flynt Litigation in 22 January 2009, Ms. Halper never repaid Mr. Cohen or recorded a 23 replacement mortgage. 24 Twin Palms similarly alleged that Ms. Halper and Mr. Stover 25 26 2 We exercise our discretion to review the documents on the 27 bankruptcy court’s electronic docket, as appropriate. See Woods & Erickson, LLP v. Leonard (In re AVI, Inc.), 389 B.R. 721, 725 28 n.2 (9th Cir. BAP 2008).

3 1 solicited three loans from Twin Palms totaling $455,000 for the 2 Mexico Investment. When Ms. Halper defaulted on the loans and 3 subsequent loan modification agreements, she told Twin Palms that 4 she would receive fifty percent of the settlement proceeds of the 5 Flynt Litigation and would use that money to repay Twin Palms. 6 To date, Ms. Halper has not followed through on her promise. 7 B. The bankruptcy case and adversary proceedings 8 On October 19, 2009, Ms. Halper filed her chapter 11 9 bankruptcy petition, which was later converted to chapter 7. 10 Mr. Cohen and Twin Palms filed their respective adversary 11 proceedings against Ms. Halper in April 2011. The Lenders each 12 alleged that Ms. Halper had fraudulently induced them to loan 13 money for the Mexico Investment. Mr. Cohen alleged that he had 14 been damaged in the amount of $6.2 million plus punitive damages, 15 attorneys’ fees, and costs, and Twin Palms sought damages 16 totaling $455,000 plus interest, penalties, punitive damages, 17 attorneys’ fees, and costs. The Lenders requested a 18 determination that the debts were nondischargeable under 19 § 523(a)(2)(A). 20 C. The Fifth Amendment stay and other delays 21 On September 28, 2011, Ms. Halper filed a motion to stay the 22 adversary proceedings, citing her Fifth Amendment privilege 23 against self-incrimination. She alleged that she recently 24 discovered that the Federal Bureau of Investigation and the U.S. 25 Attorney’s Office were investigating her for possible criminal 26 activity relating to the alleged fraud and that her counsel 27 advised her to assert her Fifth Amendment rights in anticipation 28 of an impending indictment.

4 1 The Lenders did not oppose the stay motion and entered into 2 a stipulation with Ms. Halper to stay the adversary proceedings 3 for one year. The bankruptcy court entered an order granting the 4 stay motion and setting a status conference one year out. 5 Over the next three years, the parties requested six 6 continuances for various reasons including Ms. Halper’s continued 7 assertion of her Fifth Amendment privilege and the pending 8 resolution of the state court claims against Mr. Stover. 9 By May 2015, the Lenders wanted to move forward with 10 discovery. In their joint status report, the Lenders stated: 11 “The matter is ready to proceed. There is no pending 12 investigation by the FBI. Plaintiff obtained a $23 million fraud 13 judgment against Defendant’s partner. Case is ready to move 14 forward.” In contrast, Ms. Halper contended: “Defense counsel is 15 unaware of any determination by the FBI that there is no pending 16 investigation. . . . This case is not ready to move forward as 17 the Defendant still has her 5th Amendment rights against self 18 incrimination to protect.” 19 Following a hearing in May, the bankruptcy court terminated 20 the stay of the adversary proceedings because the statute of 21 limitations on the supposed criminal charges had run. It 22 ordered that the parties “may recommence litigation in the 23 Adversary Proceeding, and discovery may immediately proceed[.]” 24 The bankruptcy court held another hearing in June to reset 25 Ms. Halper’s deposition. The Lenders’ counsel represented that 26 he had contacted the U.S. Attorney’s Office, which informed him 27 that “there was no formal proceeding ever pursued by the federal 28 prosecutor.” Counsel argued (and the bankruptcy court agreed)

5 1 that the statute of limitations on any claims against Ms. Halper 2 had run. The bankruptcy court told Ms. Halper’s counsel that she 3 would have to show a good-faith basis for further assertion of 4 the Fifth Amendment protections. The bankruptcy court continued 5 the status conference, and the parties represented that 6 Ms. Halper’s deposition was scheduled for August 20, 2015. 7 The Lenders noticed Ms. Halper’s deposition and propounded 8 interrogatories, requests for admissions, and requests for 9 production of documents. But shortly before her deposition, 10 Ms. Halper retained new counsel and requested an extension of 11 time to respond to the discovery requests. The parties 12 stipulated to continue her deposition until September and then 13 October. Ms. Halper, however, delayed in producing documents, so 14 the parties agreed to continue her deposition until January 2016. 15 The parties continued the deposition again until March due 16 to developments in the main bankruptcy case. However, shortly 17 before the deposition, Mr. Cohen fell ill, so the parties agreed 18 to another continuance. 19 Thereafter, the parties could not agree on a deposition 20 date. At a status conference in April, the bankruptcy court 21 ordered Ms. Halper’s deposition to take place in May. 22 A week before the scheduled deposition, Ms. Halper’s counsel 23 informed the Lenders’ counsel that Ms. Halper would not attend 24 the deposition because she had to care for her father following 25 eye surgery. The parties agreed to reschedule the deposition for 26 June. 27 Two days prior to the June deposition, Ms. Halper’s counsel 28 stated that Ms. Halper would again not attend her deposition

6 1 because she underwent surgery and was unable to participate in 2 “stressful activity” for at least two months. The Lenders agreed 3 to continue the deposition to September. The stipulation for the 4 continuance provided that the Lenders reserved their rights to 5 seek sanctions against Ms. Halper for discovery abuses and 6 refusal to sit for her deposition. 7 An hour before the scheduled start of Ms. Halper’s 8 deposition in September, her counsel e-mailed the Lenders’ 9 counsel, informing them that she would not appear. In the email, 10 Ms. Halper’s counsel wrote that, in a telephone conversation the 11 preceding day, the Lenders’ counsel had said that he intended to 12 prove that Ms. Halper “stole” millions of dollars. Interpreting 13 this as a threat of criminal prosecution (even though it was made 14 by counsel for private parties, not a prosecutor), Ms. Halper’s 15 counsel claimed that she wanted additional criminal 16 representation and would invoke her Fifth Amendment privilege 17 against self-incrimination. 18 D. The Lenders’ motion for an order to show cause 19 The Lenders responded to this last-minute derailment of the 20 deposition schedule with motions for an order to show cause why 21 Ms. Halper should not be held in contempt for her repeated 22 failure to sit for her deposition (“OSC Motion”). They requested 23 terminating sanctions under Civil Rule 37 and argued that “there 24 is no indication that the Defendant will ever appear for 25 deposition . . . .” They contended that terminating sanctions 26 were warranted under the Ninth Circuit’s five-part test because: 27 (1) the matter should have been resolved expeditiously but had 28 dragged on for over five years; (2) Ms. Halper’s tactics to

7 1 “delay, obstruct and obfuscate” had increased the time necessary 2 for the court to manage its docket; (3) the Lenders had been 3 prejudiced by their inability to go to trial and the legal costs 4 arising from the delay; (4) public policy favoring disposition on 5 the merits did not outweigh Ms. Halper’s bad faith and willful 6 conduct; and (5) lesser sanctions were not appropriate because 7 they would not be effective in compelling Ms. Halper’s 8 cooperation, as shown by her disregard for the court’s previous 9 warnings. In the alternative, the Lenders requested monetary 10 sanctions but maintained that monetary sanctions alone would be 11 insufficient to compel Ms. Halper’s compliance. They represented 12 that they had incurred a combined total of over $87,000 in 13 attorneys’ fees and costs attempting to compel Ms. Halper’s 14 deposition. 15 Ms. Halper opposed the OSC Motion. She argued that there 16 were extenuating circumstances that caused her to decline to 17 appear on the most recently scheduled deposition date – namely, 18 her discovery that the Lenders would question her regarding 19 “certain alleged transfers of money” that “would go beyond the 20 issues that can be adjudicated within this adversary proceeding, 21 and extend into criminal law issues to be used to pursue criminal 22 liability against the Defendant.” She stated that she wanted to 23 consult a criminal defense attorney and asked for a reasonable 24 continuance. 25 The court granted the OSC Motion and issued an order to show 26 cause (“OSC”) why Ms. Halper should not be held in contempt for 27 her failure to attend her deposition and “all the asserted bad 28 faith delay tactics described in the Motion and failure to comply

8 1 with Court orders[.]” In response to the OSC, Ms. Halper 2 submitted a declaration in which her criminal defense counsel 3 attested that, because “a claim was made by counsel for the 4 moving party that he believes Ms. Halper was engaged in criminal 5 wrong-doing,” Ms. Halper had good cause to not appear for her 6 deposition in order to protect her Fifth Amendment rights. 7 The bankruptcy court held a hearing on the OSC on 8 December 6, 2016. The bankruptcy court indicated that it 9 disapproved of Ms. Halper’s “abusive” conduct but was not quite 10 ready to issue terminating sanctions. Instead, it required 11 Ms. Halper to pay monetary sanctions and to sit her for 12 deposition on January 31, 2017. The court thought that 13 “substantial monetary sanctions are worthwhile.” Although the 14 Lenders’ counsel contended that the Lenders had incurred over 15 $100,000 in attorneys’ fees in connection with Ms. Halper’s 16 deposition, the court ordered Ms. Halper to pay the Lenders 17 $40,000 in $10,000 increments. The court told the parties to 18 agree to a payment plan, but the parties were unable to do so. 19 The Lenders’ counsel wanted payments every two weeks and 20 represented that Ms. Halper wanted to pay $10,000 on December 20 21 and January 13, with a final $20,000 payment on February 6. 22 Ms. Halper then stated that she did not have the means to pay 23 $40,000 and offered to pay $10,000 within 30 days. Ms. Halper 24 also informed the court that she would have to “figure this out” 25 and “liquidate something.” The court considered the Lenders’ 26 desire to secure the money prior to the January 31 deposition and 27 ordered payments on December 20, January 13, January 27, but 28 extended the final payment to February 24 to afford Ms. Halper

9 1 additional time. 2 On December 19, the bankruptcy court entered its order 3 finding Ms. Halper in contempt of court (“Contempt Order”). The 4 court ordered monetary sanctions and ordered Ms. Halper to appear 5 for her deposition. It additionally stated: 6 If Debtor/Defendant fails to comply with any of the above terms of this Order, then the Plaintiff’s counsel 7 shall submit a Declaration attesting to the fact that the Debtor/Defendant failed to comply with a provision 8 of this Order, and lodge an Order providing for entry of terminating sanctions (which will be issued by this 9 Court against the Debtor/Defendant), which will include the Court striking the Debtor/Defendant’s Answer in the 10 above-captioned Adversary Proceeding and entering a Default Judgment against the Debtor/Defendant. 11 12 The bankruptcy court continued the hearing on the OSC to follow 13 up on Ms. Halper’s compliance. 14 Ms. Halper failed to comply with the Contempt Order. The 15 Lenders’ counsel filed a declaration that Ms. Halper did not make 16 the second installment payment on January 13. On January 30, the 17 court entered an order finding her in contempt and awarding 18 sanctions. The court: (1) struck Ms. Halper’s answer; 19 (2) directed the clerk of court to enter default against 20 Ms. Halper in the adversary proceedings under Civil Rule 55(a) 21 and Rule 7055; and (3) stated that the Lenders are entitled to 22 default judgment and directed them to file evidence in support of 23 damages. 24 The bankruptcy court entered default against Ms. Halper on 25 February 23, 2017. 26 E. The Lenders’ Motion for Default Judgment 27 The Lenders moved for default judgment (“Motion for Default 28 Judgment”). They argued that, by virtue of the default, the

10 1 allegations in the adversary complaints were deemed admitted. 2 They also offered declarations which they argued proved the 3 elements of § 523(a)(2)(A): (1) Ms. Halper had made numerous 4 false representations regarding the loans and the Mexico 5 Investment to induce the Lenders to lend money; (2) Ms. Halper 6 made the representations with an intent to deceive the Lenders; 7 (3) Ms. Halper knew that the representations were false because 8 she had no intention to pay back the loans from the sources she 9 described and did not use any of the Flynt Litigation settlement 10 to repay the loans or record any new mortgage as promised to 11 Mr. Cohen; (4) the Lenders justifiably relied on Ms. Halper’s 12 representations because she held herself out as a licensed real 13 estate professional and made numerous representations that she 14 would repay them; and (5) the Lenders sustained damages. 15 The bankruptcy court held a hearing on the Motion for 16 Default Judgment. Ms. Halper had not filed any written response 17 to the motion but orally requested additional time to pay off the 18 outstanding sanctions award. The court informed her that her 19 efforts were “too little, too late.” 20 On May 30, 2017, the bankruptcy court entered default 21 judgment against Ms. Halper in the two adversary proceedings 22 (“Default Judgment”). It awarded Mr. Cohen damages totaling 23 $9,558,241.06. Similarly, it awarded Twin Palms damages totaling 24 $2,385,950.29. It held that the awards were nondischargeable 25 under § 523(a)(2)(A). 26 Ms. Halper timely appealed the Default Judgment. 27 JURISDICTION 28 The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

11 1 §§ 1334 and 157(b)(1) and (2)(I). We have jurisdiction under 2 28 U.S.C. § 158. 3 ISSUE 4 Whether the bankruptcy court erred in entering the Default 5 Judgment against Ms. Halper. 6 STANDARD OF REVIEW 7 “A terminating sanction, whether default judgment against a 8 defendant or dismissal of a plaintiff’s action, is very severe. 9 We review discovery sanctions for abuse of discretion.” Conn. 10 Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091, 11 1096 (9th Cir. 2007) (citing Jorgensen v. Cassiday, 320 F.3d 906, 12 912 (9th Cir. 2003)); see Ferm v. U.S. Tr. (In re Crowe), 13 243 B.R. 43, 47 (9th Cir. BAP), aff’d, 246 F.3d 673 (9th Cir. 14 2000) (“We will uphold the granting of a default judgment unless 15 there was an abuse of discretion.”). 16 To determine whether the bankruptcy court has abused its 17 discretion, we conduct a two-step inquiry: (1) we review de novo 18 whether the bankruptcy court “identified the correct legal rule 19 to apply to the relief requested” and (2) if it did, whether the 20 bankruptcy court’s application of the legal standard was 21 illogical, implausible, or without support in inferences that may 22 be drawn from the facts in the record. United States v. Hinkson, 23 585 F.3d 1247, 1262–63 & n.21 (9th Cir. 2009) (en banc). 24 DISCUSSION 25 A. The bankruptcy court did not err in granting the Default Judgment without an evidentiary hearing. 26 27 Ms. Halper argues that the bankruptcy court erred when it 28 granted Default Judgment, because the court should have held an

12 1 evidentiary hearing regarding her intent. We reject this 2 argument for multiple reasons. 3 First, she never raised this issue before the bankruptcy 4 court or requested an evidentiary hearing. We have stated that, 5 “[o]rdinarily, federal appellate courts will not consider issues 6 not properly raised in the trial courts. . . . An issue only is 7 ‘properly raised’ if it is raised sufficiently to permit the 8 trial court to rule upon it.” Ezra v. Seror (In re Ezra), 9 537 B.R. 924, 932 (9th Cir. BAP 2015) (citations omitted); see 10 Moldo v. Matsco, Inc. (In re Cybernetic Servs., Inc.), 252 F.3d 11 1039, 1045 n.3 (9th Cir. 2001) (stating that appellate court 12 would not explore ramifications of argument because it was not 13 raised in the bankruptcy court); Levesque v. Shapiro (In re 14 Levesque), 473 B.R. 331, 335 (9th Cir. BAP 2012) (“Ordinarily, if 15 an issue is not raised before the trial court, it will not be 16 considered on appeal and will be deemed waived.”). 17 Ms. Halper did not challenge the allegations or evidence 18 concerning her fraudulent intent. Nor did she file a motion for 19 reconsideration. Accordingly, she waived this issue on appeal.3 20 21 3 We have discretion to “consider an issue raised for the first time on appeal if (1) there are exceptional circumstances 22 why the issue was not raised in the trial court, (2) the new 23 issue arises while the appeal is pending because of a change in the law, or (3) the issue presented is purely one of law and the 24 opposing party will suffer no prejudice as a result of the failure to raise the issue in the trial court.” In re Ezra, 25 537 B.R. at 932-33 (quoting Franchise Tax Bd. v. Roberts (In re 26 Roberts), 175 B.R. 339, 345 (9th Cir. BAP 1994)). Ms. Halper has not identified any exceptional circumstances excusing her failure 27 to raise the issue of her intent below. She also does not identify any change in law, assert that the issue is purely one 28 (continued...)

13 1 Second, her argument is meritless. A default judgment 2 specifically does away with the requirement of trial and is not 3 akin to summary judgment. “The general rule of law is that upon 4 default the factual allegations of the complaint, except those 5 relating to the amount of damages, will be taken as true.” 6 TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th 7 Cir. 1987) (citation omitted). The Lenders’ complaints alleged 8 all of the elements of a § 523(a)(2)(A) claim in detail. The 9 bankruptcy court properly accepted as true the claims in the 10 complaints. 11 Ms. Halper argues that a “trial is required for a Court to 12 determine Appellant’s intent” because “just like a Motion for 13 Summary Judgment, the Court’s function on a motion for default 14 judgment is issue-finding, not issue resolution.” 15 Ms. Halper is patently wrong. Default judgment is governed 16 by Civil Rule 55; Civil Rule 56 is applicable only to summary 17 judgment; and the standards under the two rules are completely 18 different. When a party files a motion for summary judgment 19 under Civil Rule 56, the responding party may argue that there is 20 a dispute about the facts. But when a defendant is in default 21 and the plaintiff seeks a default judgment under Civil Rule 55, 22 the defendant has no right to challenge any of the facts properly 23 alleged in the complaint. See Sharma v. Salcido (In re Sharma), 24 BAP Nos. CC-12-1302-MkTaMo, CC-12-1520-MkTaMo, 2013 WL 1987351, 25 at *8 (9th Cir. BAP May 14, 2013), aff’d, 607 F. App’x 713 (9th 26 3 27 (...continued) of law, or discuss the prejudice that the Lenders may face. We 28 will not consider it in the first instance.

14 1 Cir. 2015) (“Once [debtor] was in default, the only issue before 2 the bankruptcy court was whether the well-pleaded factual 3 allegations in the Complaint, deemed true, supported a claim 4 under Section 523(a)(2)(A), and, if not, whether additional proof 5 was necessary.”). The Second Circuit case she cites in support 6 of the conflation of these rules, United States v. One Tintoretto 7 Painting Entitled “The Holy Family with Saint Catherine and 8 Honored Donor”, 691 F.2d 603 (2d Cir. 1982), plainly does not 9 concern default judgment. Her contention that the court erred by 10 not applying a summary judgment standard is frivolous. 11 She further argues that the bankruptcy court should have 12 required the Lenders to prove up their claims. This argument is 13 also frivolous. While the court has discretion to require 14 further proceedings, the court need not do so. See Danning v. 15 Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978); In re Sharma, 2013 16 WL 1987351, at *8 (“So long as the bankruptcy court found 17 sufficient evidence in the Complaint’s allegations to support the 18 determination of liability under Section 523(a)(2)(A), its 19 decision survives. The bankruptcy court did not commit 20 reversible error when it determined the issue of liability 21 without a hearing.”). The complaints, the Motion for Default 22 Judgment, and the Lenders’ declarations attached thereto 23 adequately laid out the Lenders’ claims and covered all of the 24 elements of § 523(a)(2)(A). It was not an error to accept the 25 allegations as true.4 26 4 27 It is not clear that the bankruptcy court applied the test for a default judgment laid out in Eitel v. McCool, 782 F.2d 28 (continued...)

15 1 B. Terminating sanctions were appropriate. 2 Ms. Halper apparently thinks that terminating sanctions were 3 unwarranted; some of her issues on appeal so state. But the body 4 of her brief contains only a handful of sentences on that topic, 5 and none of those sentences includes any citations to authority 6 or the record. She does not even mention the governing rule 7 (Civil Rule 37(b)(2), made applicable in bankruptcy by Rule 7037) 8 or any of the Ninth Circuit decisions construing it. See, e.g., 9 Conn. Gen. Life Ins. Co., 482 F.3d at 1096. Thus, she has not 10 “specifically and distinctly raised and argued [these issues] in 11 [her] opening brief.” Hayes v. Idaho Corr. Ctr., 849 F.3d 1204, 12 1213 (9th Cir. 2017) (quoting Officers for Justice v. Civil Serv. 13 Comm’n of City & Cty. of S.F., 979 F.2d 721, 726 (9th Cir. 14 1992)). We may decline to address them. Id. 15 Even if she had properly raised these arguments, we would 16 reject them. Contrary to her assertion, the bankruptcy court did 17 consider a less severe sanction. The Lenders argued that the 18 court should immediately strike her answer. Instead, the court 19 gave Ms. Halper one more chance to sit for her deposition and 20 ordered her to pay a portion of the Lenders’ attorneys’ fees 21 caused by her prior abuses. The bankruptcy court acknowledged 22 Ms. Halper’s concerns by revising the proposed payment schedule. 23 (The bankruptcy court was not required to accept her unsworn and 24 uncorroborated statement that she could not afford to pay the 25 monetary sanctions on the prescribed schedule.) The combination 26 4 27 (...continued) 1470, 1471–72 (9th Cir. 1986). But Ms. Halper did not raise this 28 issue in the bankruptcy court and does not raise it on appeal.

16 1 of the monetary sanction and the order to sit for a deposition 2 was a “less drastic sanction” that gave Ms. Halper a chance to 3 avoid the terminating sanction. But when Ms. Halper failed to 4 make the second installment payment, the “less drastic sanction” 5 failed, and the court then imposed the terminating sanction that 6 the Lenders requested in the OSC Motion and that the court 7 threatened in the Contempt Order. We see no abuse of discretion. 8 Accordingly, the bankruptcy court did not err in awarding 9 terminating sanctions. 10 CONCLUSION 11 The bankruptcy court did not err in granting default 12 judgment. We AFFIRM. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28