Sajid Ravasia v. United States Trustee

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 23, 2022
• Docket: 21-60029
• Status: Unpublished

Opinion

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS FILED FOR THE NINTH CIRCUIT FEB 23 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS In re: SAJID A. RAVASIA; DEBRA J. No. 21-60029 RAVASIA, BAP No. 20-1212 Debtors,

------------------------------ MEMORANDUM*

SAJID A. RAVASIA; DEBRA J. RAVASIA,

Appellants,

v.

UST - UNITED STATES TRUSTEE, SPOKANE,

Appellee.

Appeal from the Ninth Circuit Bankruptcy Appellate Panel Brand, Taylor, and Lafferty III, Bankruptcy Judges, Presiding

Argued and Submitted February 8, 2022 Seattle, Washington

Before: BYBEE, BEA, and CHRISTEN, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Appellants Sajid and Debra Ravasia challenge the Bankruptcy Appellate

Panel’s (BAP) decision affirming the bankruptcy court’s order granting leave to

amend the adversarial complaint in the Ravasias’ Chapter 7 proceedings. We

review BAP decisions de novo, applying “the same standard of review that the

BAP applied to the bankruptcy court’s ruling.” In re Boyajian, 564 F.3d 1088,

1090 (9th Cir. 2009). The bankruptcy court’s legal conclusions are similarly

reviewed “de novo, [and] its factual findings for clear error.” In re Albert, 998

F.3d 1088, 1091 (9th Cir. 2021). “Whether an amendment relates back to the date

of the original pleading under Fed. R. Civ. P. 15(c)(2) is a legal question” that this

court reviews de novo. In re Magno, 216 B.R. 34, 38 (B.A.P. 9th Cir. 1997). The

bankruptcy court had jurisdiction under 28 U.S.C. §§ 157 and 1334. The BAP had

jurisdiction pursuant to 28 U.S.C. § 158(c)(1). This court has jurisdiction over the

BAP’s final order under 28 U.S.C. §§ 158(d)(1) and 1291, and we affirm.

Federal Rule of Civil Procedure 15, concerning amended and supplemental

pleadings, applies in bankruptcy adversary proceedings. Fed. R. Bankr. P. 7015.

Leave to amend should be granted with “extreme liberality.” Brown v. Stored

Value Cards, Inc., 953 F.3d 567, 574 (9th Cir. 2020) (internal quotations omitted)

(quoting Moss v. U.S. Secret Serv., 572 F.3d 962, 972 (9th Cir. 2009)). The

2 opportunity to amend is especially important in discharge cases because of the

short time frame in which a complaint must be filed. In re Magno, 216 B.R. at 38.

Bankruptcy courts generally consider four factors to determine whether leave to

amend should be granted: (1) bad faith, (2) undue delay, (3) prejudice to the

opposing party, and (4) futility of amendment. Ditto v. McCurdy, 510 F.3d 1070,

1079 (9th Cir. 2007). Appellants argue the amendment was futile because it did

not relate back to the original complaint, and was thus time barred.

Although the parties assume that it was necessary to amend the original

complaint in order for the U.S. Trustee to argue that the Ravasias made false oaths

on their schedules regarding their income and expenses and their 2016 tax refund,

paragraphs 54 and 56 of the original complaint were sufficient to put the Ravasias

on notice of both the factual and legal grounds for the U.S. Trustee’s claims. See

In re Gunn, 111 B.R. 291, 292–93 (B.A.P. 9th Cir. 1990).

An amendment relates back to the date of the original complaint when it

“asserts a claim or defense that arose out of the conduct, transaction, or occurrence

set out—or attempted to be set out—in the original pleading.” Fed. R. Civ. P.

15(c)(1)(B); In re Dominguez, 51 F.3d 1502, 1510 (9th Cir. 1995). To relate back,

a claim should be capable of being proven by the “same kind of evidence offered

3 in support of the original pleading.” In re Dominguez, 51 F.3d at 1510 (cleaned

up) (quoting Percy v. S.F. Gen. Hosp., 841 F.2d 975, 978 (9th Cir. 1988)).

The amended complaint arises out of the same conduct, transaction, or

occurrence set forth in the original complaint—the Ravasias’ deliberate

misrepresentation of their financial situation in their schedules and statement of

financial affairs.

AFFIRMED.