In re: Fariba S. Evjenth

FILED JUN 04 2018 1 NOT FOR PUBLICATION 2 SUSAN M. SPRAUL, CLERK U.S. BKCY.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. NC-17-1140-TaFB ) 6 FARIBA S. EVJENTH, ) Bk. No. 3:16-bk-30329-HLB ) 7 Debtor. ) ______________________________) 8 ) FAREED SEPEHRY-FARD, ) 9 ) Appellant, ) 10 ) v. ) MEMORANDUM* 11 ) SELECT PORTFOLIO SERVICING, ) 12 INC.; DAVID BURCHARD, ) Chapter 13 Trustee, ) 13 ) Appellees. ) 14 ______________________________) 15 Submitted Without Argument on May 25, 2018 16 Filed – June 4, 2018 17 Appeal from the United States Bankruptcy Court for the Northern District of California [18] Honorable Hannah L. Blumenstiel, Bankruptcy Judge, Presiding [19] 20 Appearances: Appellant Fareed Sepehry-Fard, pro se, on brief; Nichole Glowin of Wright, Finlay & Zak, LLP on 21 brief for appellee Select Portfolio Servicing, Inc.; Lilian G. Tsang on brief for appellee David 22 Burchard, Chapter 13 Trustee. [23] Before: TAYLOR, FARIS, and BRAND, Bankruptcy Judges. [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. 28 See 9th Cir. BAP Rule 8024-1(c)(2). 1 INTRODUCTION 2 Fareed Sepehry-Fard (here, “Appellant”) appeals from the 3 bankruptcy court’s order denying his motion seeking an 4 evidentiary hearing and sanctions. While Appellant argues that 5 Select Portfolio Servicing, Inc. (“SPS”) and the chapter 131 6 trustee, David Burchard, (collectively, “Appellees”) wronged 7 him, the bankruptcy court denied the motion based on a 8 determination that it lacked jurisdiction to consider the merits 9 of his claims. On appeal, Appellant never establishes — much 10 less argues — that the bankruptcy court erred in so deciding. 11 We also discern no error. As a result, we AFFIRM the bankruptcy 12 court. 13 FACTS2 14 Appellant claims that Appellees stole from him. His theory 15 of theft turns in part on SPS’s receipt of proceeds from the 16 unopposed sale of real property in Saratoga, California (the 17 “Property”). Although neither we nor the bankruptcy court have 18 jurisdiction to resolve the dispute, we relay the following 19 facts to provide context for this appeal. [21] 22 1 Unless otherwise indicated, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532 . [23] All “Rule” references are to the Federal Rules of Bankruptcy 24 Procedure. All “Civil Rule” references are to the Federal Rules of Civil Procedure. [2] We exercise our discretion to take judicial notice of 26 documents electronically filed in the adversary proceeding and 27 in the underlying bankruptcy case. See Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227 , 233 n.9 (9th 28 Cir. BAP 2003). [2] 1 Fariba Evjenth (“Debtor”) files bankruptcy, sells the 2 Property, and confirms a chapter 13 plan. Debtor filed a 3 chapter 13 petition, scheduled an interest in the Property, and 4 identified Appellant as a co-owner. She promptly moved to sell 5 the Property for $1,450,000. Her supporting documents estimated 6 that $820,885 would be used to pay off the first mortgage and 7 that unsecured creditors would be paid in full from the 8 remaining sale proceeds. The bankruptcy court approved the sale 9 through an order noting a lack of opposition. Escrow closed. 10 Thereafter, the bankruptcy court confirmed Debtor’s 11 chapter 13 plan. It provided for a 100% distribution to 12 unsecured claimants from Property sale proceeds. 13 The bankruptcy court denies Appellant’s post-sale 14 questioning of the secured parties’ legitimacy. The Bank of New 15 York Mellon, through SPS, filed a proof of claim; Appellant 16 objected and shortly thereafter filed two motions: first, a 17 “Motion for Alleged Attorneys’ Proof of Authority to Represent 18 Alleged Creditors”; and, second, a motion to “compel the 19 verification of the amount of the alleged debt under oath, for 20 evidentiary hearing . . . .” 21 Both motions were opposed; the bankruptcy court separately 22 denied both. It concluded that Appellant lacked statutory, 23 constitutional, and prudential standing and was not a real party 24 in interest. It then reasoned, as to each motion, that even if 25 Appellant had standing, it would deny them as without merit — in 26 part because Appellant did not object to the claim until after 27 the Bank of New York Mellon was paid in full. 28 Appellant sought reconsideration and raised various [3] 1 arguments, alleging that all state court judges have been 2 bribed, that failure to enforce his “non-judicial judgment” is 3 “nothing but mutiny[,]” and that the Property is part of a land 4 patent and protected by the Treaty of Guadalupe Hidalgo. 5 At the hearing on his reconsideration motion, Appellant 6 conceded that he did not object to the sale of the Property. 7 And the bankruptcy court reiterated that Appellant lacked 8 standing because he was not Debtor, had no claim against Debtor, 9 signed off on the plan, signed off on the escrow instructions, 10 and signed off on the motion to sell. The bankruptcy court then 11 denied the motion on the record; it also entered a separate 12 order denying the motion. 13 Appellant appealed, but, because he did not pay the 14 required fee, the appeal was dismissed. 15 Appellant unsuccessfully requests an evidentiary hearing 16 and sanctions and files the present appeal. A month and a half 17 later, Appellant filed a motion for an evidentiary hearing and 18 for sanctions (the “Third Motion”). He wanted the court to 19 “finally verify and validate the amount of the alleged debt that 20 was allegedly owed to the alleged ‘creditor’, if there is any or 21 there was any, under Oath . . . .” 22 At the hearing, the bankruptcy judge denied the Third 23 Motion because “this is not a dispute I can adjudicate.” Hr’g 24 Tr. (Apr. 19, 2017) 7:15-16. She characterized Appellant’s 25 request as “the same request that you’ve made to me before . . . 26 you want somebody -- you want the lender whose loan has been 27 paid off to provide you with an accounting of some kind . . . .” [28] Id. at 3:14–18. Appellant disagreed and said that the present [4] 1 motion was different: he also wanted a return of “his” note or 2 its proceeds. 3 The bankruptcy judge, yet again, detailed how Appellant no 4 longer had a connection with the bankruptcy case: 5 So, Mr. Fard, you’re not a creditor in this case, and you’re not the debtor in this case, and your dispute 6 is with a lender whose note has been paid off, and is therefore no longer a party in interest in this 7 bankruptcy case. That’s not a dispute that I can adjudicate, and we’ve been over this territory several 8 times before. I understand that you have had bad experiences with State Court judges and that you don’t 9 necessarily want to proceed [with] your claims against the lender in State Court, but I think that’s where 10 you have to be because I can’t adjudicate disputes between parties who are not involved in cases before 11 me. [12] Id. at 4:13–24. 13 Appellant stated that he was a creditor because “they have 14 taken my promissory note and resold it to unknown parties. 15 Those monies belong to me, which makes me a creditor, Judge.” [16] Id. at 5:7–9. 17 Seeing the disconnect, the bankruptcy judge explained how 18 being a creditor of someone, generally, was insufficient to 19 establish a connection with the present bankruptcy case: 20 [Y]ou’re a creditor then of somebody who’s not before me. You’re not a creditor of this Debtor. The note 21 has been paid off, and really I don’t see any difference in what you’re asking me to do today, 22 consent to what you’ve asked me to do twice before, and I’ve tried to explain, Mr. Fard, that I can’t 23 really help you, and I’m really sorry for that. 24 Id. at 5:10-16. 25 Appellant then suggested that the chapter 13 trustee had a 26 duty to “take that note from the alleged creditors and give it 27 back to me . . . .” Id. at 6:1–3. The bankruptcy judge 28 disagreed and informed Appellant that “that’s not the Chapter 13 [5] 1 Trustee’s job.” Id. at 6:10–11. To the extent Appellant had a 2 dispute or was otherwise entitled to something from the secured 3 lender, the bankruptcy judge again emphasized that it lacked 4 jurisdiction: “[T]hat’s a dispute that doesn’t involve this 5 bankruptcy case. And those are the only kinds of disputes that 6 I can adjudicate, and so I’m sorry, but I’m going to have to 7 deny this motion.” Id. at 6:15-18. In short, the bankruptcy 8 court patiently listened to Appellant’s arguments, addressed his 9 concerns, and then denied the motion.3 10 The bankruptcy court entered a separate order denying the 11 Third Motion for the reasons stated on the record. 12 Appellant timely filed a notice of appeal. 13 JURISDICTION 14 The bankruptcy court concluded that it lacked jurisdiction, 15 which we discuss below. We have jurisdiction over this appeal 16 under 28 U.S.C. § 158 . 17 ISSUE 18 Did the bankruptcy court err when it denied the Third 19 Motion for lack of jurisdiction? 20 STANDARD OF REVIEW 21 We review subject matter jurisdiction de novo. Wilshire 22 Courtyard v. Cal. Franchise Tax Bd. (In re Wilshire Courtyard), [23] 729 F.3d 1279, 1284 (9th Cir. 2013). We review related findings 24 for clear error. Coyle v. P.T. Garuda Indonesia, 363 F.3d 979 , [25] 26 3 Appellant filed several papers about the record on 27 appeal. He notes that the court reporter revised the April 19, 2017 transcript to add a line on page 7. To the extent there is 28 any confusion, we accept the corrected transcript [6] 1 984 n.7 (9th Cir. 2004). 2 DISCUSSION 3 We start by clarifying the scope of this appeal. Appellant 4 did not appeal the sale order, and his appeal from the orders 5 denying his verification and reconsideration motions was 6 dismissed. This appeal concerns only the denial of the Third 7 Motion. 8 And while Appellant raises various arguments in his opening 9 brief, he never specifically and distinctly addresses the basis 10 for denial of the Third Motion, the bankruptcy court’s 11 underlying conclusion that it lacked jurisdiction. He thus 12 waived the right to assert argument on the only question 13 relevant to this appeal. Padgett v. Wright, 587 F.3d 983 , 986 14 n.2 (9th Cir. 2009) (per curiam) (appellate courts “will not 15 ordinarily consider matters on appeal that are not specifically 16 and distinctly raised and argued in appellant’s opening brief”). 17 We, accordingly, affirm. 18 Even when we consider Appellant’s arguments, they are not 19 persuasive. 20 A. The bankruptcy court’s form of order is proper. 21 Appellant asserts that the bankruptcy court’s order 22 violates Civil Rule 54(a) by being replete with references to 23 the pleadings and record of other proceedings. He also invokes 24 Civil Rule 58 (the separate judgment rule) and Civil Rule 52 and 25 urges us to remand for entry of a judgment separate from the [7] 1 findings of fact and conclusions of law.4 2 We find no error related to the form of order under Civil 3 Rule 54(a). Compliance with Civil Rule 58’s separate judgment 4 requirement was not required.5 And the bankruptcy court is 5 allowed to state its findings and conclusions on the record 6 orally, as it did here. Fed. R. Civ. P. 52(a)(1); Fed. R. 7 Bankr. P. 7052, 9014 (applying Civil Rule 52 in adversary 8 proceedings and contested matters). 9 B. The bankruptcy court correctly determined that it lacked jurisdiction. [10] 11 We also see no error in the bankruptcy court’s conclusion 12 that it lacked jurisdiction over Appellant’s dispute. 13 Bankruptcy court jurisdiction “is created and limited by 14 statute.” In re Wilshire Courtyard, 729 F.3d at 1284 (citing 15 Celotex Corp. v. Edwards, 514 U.S. 300, 307 (1995)). Bankruptcy 16 courts have subject matter jurisdiction over proceedings 17 “arising under title 11, or arising in or related to cases under [19] 20 4 The order reads as follows: [21] On April 19, 2017, the court held a hearing on [the 22 Third Motion] filed by Fareed-Sepehry-Fard. Appearances were as noted on the record. Upon due [23] consideration of the pleadings and argument of the 24 parties, and for the reasons stated on the record, the court DENIES the [Third] Motion. [5] As this was a contested matter, Rule 9014 applied many 26 of the Rules (and thus Civil Rules) to the proceeding. But 27 Rule 7058, which applies Civil Rule 58’s separate judgment requirement to adversary proceedings, does not apply in 28 contested matters. See Fed. R. Bankr. P. 9014(c). [8] 1 title 11.” 28 U.S.C. § 1334 (b);6 In re Wilshire Courtyard, [2] 729 F.3d at 1285 . A bankruptcy court also has jurisdiction over 3 all assets of the debtor and property of the estate. 28 U.S.C. 4 § 1334(e)(1); Cent. Va. Cmty. Coll. v. Katz, 546 U.S. 356 , 369 5 (2006) (“Bankruptcy jurisdiction, as understood today and at the 6 time of the framing, is principally in rem jurisdiction.”). 7 Here, the bankruptcy court approved the sale of the 8 Property. No one appealed that order. Accordingly, the sale 9 terminated 28 U.S.C. § 1334 (e)(1) in rem jurisdiction over the 10 Property. See Stokes v. Duncan (In re Stokes), BAP No. 11 MT-13-1097-TaPaJu, 2013 WL 5313412 , at *3 (9th Cir. BAP 12 Sept. 23, 2013) (“It is axiomatic that in rem jurisdiction over 13 an asset terminates once the bankruptcy estate relinquishes all 14 rights and interests in the asset.”) (citing cases). In 15 addition, as was true under the Bankruptcy Act of 1898, ch. 541, [16] 30 Stat. 544 (1898), a bankruptcy court ordinarily lacks 17 jurisdiction to adjudicate ownership disputes involving former 18 property of the estate. Id. (citing sources). So the 19 bankruptcy court lacked in rem jurisdiction over the dispute. 20 Nor did the bankruptcy court have arising under, arising 21 in, or related to jurisdiction. 22 Appellant’s request did not “arise under” the Code because [23] 24 6 Jurisdiction is initially conferred on the district 25 courts. 28 U.S.C. § 1334 . The district courts, in turn, may refer bankruptcy cases and proceedings to the bankruptcy courts. [26] 28 U.S.C. § 157 (a). “[E]ach district court has provided by rule 27 for automatic reference to bankruptcy judges.” 1 Collier on Bankruptcy ¶ 3.02[1] (Alan N. Resnick and Henry J. Sommer, eds., 28 16th ed.). [9] 1 it did not depend “on a substantive provision of bankruptcy law” 2 — that is, it did not involve “a cause of action created or 3 determined by a statutory provision of the Bankruptcy Code.” 4 Battleground Plaza, LLC v. Ray (In re Ray), 624 F.3d 1124 , 1131 5 (9th Cir. 2010). To the contrary, Appellant asserts violations 6 of the Truth in Lending Act, refers to the California Commercial 7 Code, and alludes to the Fair Debt Collection Practices Act. 8 Appellant’s dispute did not “arise in” the case; a matter 9 arises in a case when it is “an administrative matter unique to 10 the bankruptcy process that has no independent existence outside 11 of bankruptcy and could not be brought in another forum, but 12 whose cause of action is not expressly rooted in the Bankruptcy 13 Code.” Id. Appellant can assert his claims in another forum. 14 The dispute was not “related to” the bankruptcy case 15 because its outcome cannot affect the administration of Debtor’s 16 bankruptcy estate. Fietz v. Great W. Sav. (In re Fietz), [17] 852 F.2d 455 , 457 (9th Cir. 1988). Debtor used the sale 18 proceeds to pay off her plan and her secured obligations. 19 Appellant seeks relief for his sole benefit; he wants a “return 20 of all monies that Appellees have stolen from Appellant . . . .” 21 Appellant’s Opening Br. at 23. 22 Finally, nothing suggests that ancillary jurisdiction 23 exists here. “Ancillary jurisdiction may rest on one of two 24 bases: (1) to permit disposition by a single court of factually 25 interdependent claims, and (2) to enable a court to vindicate 26 its authority and effectuate its decrees.” In re Ray, 624 F.3d 27 at 1135 (citation and quotation marks omitted). The bankruptcy 28 court saw no need to vindicate its own authority nor were there [10] 1 factually interdependent claims to resolve. 2 Accordingly, even after a de novo review, we affirm the 3 bankruptcy court’s conclusion that it lacked jurisdiction. 4 C. Debtor’s remaining arguments lack merit. 5 Debtor raises a variety of issues and arguments. He lists 6 nineteen issues on appeal, but then fails to discuss many of 7 them in his argument section; we deem them abandoned. Kohler v. 8 Inter-Tel Techs., 244 F.3d 1167, 1182 (9th Cir. 2001) (“Issues 9 raised in a brief which are not supported by argument are deemed 10 abandoned.”); Fed. R. Bankr. P. 8014(a)(8). In the interest of 11 completeness, we discuss the issues that he argues. 12 Appellant does not have a right to a jury trial. Appellant 13 asserts entitlement to a jury trial under the Seventh Amendment 14 because the amount in controversy was over $20. We take no 15 position on his entitlement to a jury trial in a non-bankruptcy 16 forum, but he had no such right in this bankruptcy case. He was 17 not entitled to a jury trial on his claim objection; a Seventh 18 Amendment right to a jury trial exists in bankruptcy proceedings 19 only if the party has not submitted to the bankruptcy court’s 20 equitable power. Langenkamp v. Culp, 498 U.S. 42, 44-45 (1990); 21 Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 58 (1989); 22 Hickman v. Perlmutter (In re Hickman), 384 B.R. 832 , 837–39 23 (9th Cir. BAP 2008). Here, Appellant submitted to the 24 bankruptcy court’s equitable power; indeed, he wanted the 25 bankruptcy court, and not any other court, to resolve his 26 dispute. Further, he waived any such right as he never filed a 27 Civil Rule 38(b) jury trial demand. Fed. R. Civ. P. 38(d); Fed. 28 R. Bankr. P. 9015 (applying Civil Rule 38 in bankruptcy [11] 1 proceedings). 2 The bankruptcy court does not need to enter additional 3 findings. Having failed to get an evidentiary hearing, 4 Appellant now seeks the same result by arguing that the 5 bankruptcy court did not enter sufficient findings and that we 6 should direct it to do so. He wants the bankruptcy court to 7 address his various claims under substantive non-bankruptcy law. 8 Appellant misunderstands the bankruptcy court’s decision; it 9 correctly denied the motion because it lacked jurisdiction, and 10 it provided sufficient findings to support that conclusion. 11 Thus, not only is there no need for the bankruptcy court to 12 enter additional findings, the bankruptcy court has no authority 13 to do so. 14 The bankruptcy court was not biased. Last, Appellant 15 questions the bankruptcy court’s integrity; he states that the 16 bankruptcy judge “appeared biased,” and so he “did not get his 17 due process rights from the lower court[.]” Id. at 19 18 (capitalization removed). 19 We disagree. The transcript from the April 19, 2017 20 hearing does not reflect bias on the bankruptcy judge’s part. 21 To the contrary, it evidences patient consideration of 22 Appellant’s position, careful explanation of the infirmities in 23 his position, clear direction to the appropriate forum for 24 seeking redress of his concerns, and a polite and respectful 25 conduct of the hearing. Appellant got all that due process 26 requires and a judge who appropriately heard his case. 27 D. We deny Appellant’s remaining appellate motions. 28 Appellant filed various appellate motions. Still pending [12] 1 motions include: a motion for sanctions for filing of a 2 frivolous brief and making false statement, BAP Dkt. No. 31; a 3 “statement and joinder to” the motion for sanctions, BAP Dkt. 4 No. 32; a motion “enjoining” SPS to “Appellant’s Informal Reply 5 Brief,” BAP Dkt. No. 33; and a request to concurrently 6 adjudicate his appeal and motion for sanctions, BAP Dkt. No. 35. 7 All lack merit. 8 Appellant’s motion for sanctions seeks sanctions against 9 the Trustee’s counsel because she allegedly made 10 misrepresentations in her brief. We have reviewed the Trustee’s 11 brief; it accurately represents and depicts the record. And 12 Appellant’s suggestion that Trustee’s counsel admitted to mutiny 13 and treason against the United States is specious. We deny the 14 motion. 15 We deduce that Appellant’s “statement and joinder” motion 16 is his attempt to add SPS’s counsel to his sanctions motion. We 17 have reviewed SPS’s brief, as well, and it also accurately 18 represents and depicts the record. We deny this motion. 19 We deduce that Appellant’s motion “enjoining” SPS “to 20 Appellant’s informal reply brief,” BAP Dkt No. 33 at 1 21 (capitalization removed), is his attempt to have his reply brief 22 apply to SPS’s brief, as well. To the extent Appellant wants us 23 to treat his reply brief as a global reply, we grant the motion; 24 to the extent he seeks any other relief, we deny it. 25 We deny his request that we concurrently adjudicate “both 26 the appeal and motion to stay since Appellant is also filing his 27 reply brief with this request . . . .” BAP Dkt. No. 35 at 2. 28 Having concluded that sanctions are not appropriate, we need not [13] 1 appoint a special master to investigate or stay Appellant’s 2 deadline to file a reply brief. 3 CONCLUSION 4 Based on the foregoing, we AFFIRM.