FILED
FEB 02 2012
1
SUSAN M SPRAUL, CLERK
U.S. BKCY. APP. PANEL
2 OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP No. AZ-11-1157-JuKiWi
)
6 MARK BOSWORTH and LISA ANN ) Bk. No. 08-03098
BOSWORTH, )
7 ) Adv. No. 08-00678
Debtors. )
8 ______________________________)
MARK BOSWORTH; LISA ANN )
9 BOSWORTH, )
)
10 Appellants, )
)
11 v. ) M E M O R A N D U M*
)
12 TEM HOLDINGS, LLC, )
)
13 Appellee. )
______________________________)
14
Argued and Submitted on January 19, 2012
15 at Phoenix, Arizona
16 Filed - February 2, 2012
17 Appeal from the United States Bankruptcy Court
for the District of Arizona
18
Honorable Sarah Sharer Curley, Bankruptcy Judge, Presiding
19 ____________________________
20 Appearances: Allan D. NewDelman, Esq. argued for appellants
Mark and Lisa Ann Bosworth.
21 ______________________________
22 Before: JURY, KIRSCHER, and WILLIAMS,** Bankruptcy Judges.
23
24
*
This disposition is not appropriate for publication.
25 Although it may be cited for whatever persuasive value it may
26 have (see Fed. R. App. P. 32.1), it has no precedential value.
See 9th Cir. BAP Rule 8013-1.
27
**
Hon. Patricia C. Williams, Bankruptcy Judge for the
28 Eastern District of Washington, sitting by designation.
-1-
1 Chapter 111 debtors, Mark and Lisa Ann Bosworth
2 (collectively, the “Bosworths” or “Debtors”), appeal the
3 bankruptcy court’s decision granting summary judgment in favor
4 of appellee, TEM Holdings, Inc. (“TEM”). Applying the issue
5 preclusion doctrine, the bankruptcy court found that TEM’s state
6 court judgment debt against Debtors for their violation of Ariz.
7 Rev. Stat. (“ARS”) §33-420 was nondischargeable under
8 § 523(a)(6). TEM has not participated in this appeal. Having
9 conducted an independent de novo review of the record, we
10 AFFIRM.
11 I. FACTS
12 In 1997, Debtors purchased a small residential property
13 management firm in Phoenix, Arizona. Eventually, their firm
14 began selling government foreclosure properties and managed
15 those properties for investors. As their business grew, they
16 formed, or obtained an interest in, numerous entities, including
17 Property Masters of America, Property Masters Maintenance, and
18 Property Masters Real Estate Trust, LLC (collectively, “Property
19 Masters”).
20 In 2001, Mark Bosworth (“Mark”) solicited TEM to engage his
21 services and those of Property Masters in purchasing and
22 managing residential properties in Maricopa County, Arizona.
23 Those services consisted of identifying residential properties
24 available from the Veterans Administration (“VA”) and submitting
25
1
26 Unless otherwise indicated, all chapter and section
references are to the Bankruptcy Code,
11 U.S.C. §§ 101-1532.
27 “Rule” references are to the Federal Rules of Bankruptcy
Procedure and “Civil Rule” references are to the Federal Rules of
28 Civil Procedure.
-2-
1 bids on behalf of TEM. In turn, TEM could expect to receive a
2 fifteen percent annual return on its cash investment in the
3 properties, as well as an annual average appreciation in the
4 value of the properties of five percent. TEM agreed to utilize
5 the services of Mark and Property Masters, eventually purchasing
6 numerous properties.
7 In addition, TEM and Property Masters entered into a
8 contract for Property Masters to act as TEM’s agent in managing
9 the properties by (1) soliciting renters; (2) managing,
10 maintaining and repairing the residences; (3) collecting rents;
11 and (4) making all necessary mortgage, tax and insurance
12 payments. To allow Property Masters to perform its duties under
13 the property management agreement, TEM executed a limited power
14 of attorney, granting Property Masters the authority to obtain
15 mortgage balances and make mortgage payments on the residences.
16 At some point, a dispute arose between the principals of
17 TEM and Debtors regarding the various investment properties. In
18 2004, Debtors filed a complaint against TEM, its principals and
19 others in the Superior Court of Arizona, Maricopa County,
20 captioned Bosworth v. Magelson, Case No. CV2004-023197. This
21 complaint is not part of the record on appeal.2
22 On September 7, 2006, TEM filed a first amended
23 counterclaim against Debtors and a third-party complaint against
24
25
26 2
From what we can tell, the principals of TEM acquired the
27 VA properties from the Bosworths as part of an Internal Revenue
Code § 1031 exchange. Subsequently, a dispute arose between the
28 parties regarding those properties.
-3-
1 Property Masters, Debtors, and others,3 alleging eighteen claims
2 for relief.4 In the sixteenth claim for relief, TEM alleged
3 that Property Masters and Debtors converted its property through
4 the wrongful collection of sales tax, incurred fraudulent
5 charges for services, and converted renter deposits and
6 prospective purchasers’ down payments. In the eighteenth claim
7 for relief, TEM alleged that Property Masters and Debtors had
8 fraudulently altered the power of attorney from TEM by
9 purporting to grant Property Masters unlimited powers in the use
10 of various properties and then recorded the document in
11 violation of ARS §33-420. TEM further alleged that Property
12 Masters and Debtors knew at the time of recording that the power
13 of attorney was forged or fraudulently altered.
14 After a multi-day trial, the jury found in favor of TEM on
15 the sixteenth claim for relief for conversion and awarded actual
16 damages in the amount of $365,056 and punitive damages of
17 $12,125,000. The jury verdict reflects that liability under
18 this claim for relief was attributed to Property Masters or
19 Mark. The jury also found for TEM on the eighteenth claim for
20 Debtors’ violation of ARS §33-420. The jury verdict refers to
21 the “Bosworths” liability for recording six documents against
22 various properties that violated the statute and shows damages
23 awarded in the amount of $407,000.
24 On January 17, 2008, the state court entered its judgment
25
3
26 The other defendants were Larry Plutchak, Leoda Bosworth,
Kathryn Paisola, and Dave Zundel.
27
4
Most of the claims for relief involved a breach of
28 contract with respect to each of the properties.
-4-
1 in favor of TEM on the sixteenth and eighteenth claims for
2 relief, among others. On the sixteenth claim for relief, the
3 court entered judgment against Mark and Property Masters,
4 jointly and severally, in the amount of $365,000 for actual
5 damages and $12,125,000 for punitive damages, together with
6 $448,880.26 in attorney’s fees and costs and interest at ten
7 percent. On the eighteenth claim for relief, pursuant to ARS
8 §33-420, the state court trebled the damage award of $407,000,
9 finding liability in the amount of $1,221,000, plus $448,880.26
10 in attorney’s fees and costs and interest at ten percent.
11 On March 25, 2008, Debtors filed their chapter 11 petition.
12 TEM filed an adversary complaint seeking a declaration that the
13 state court judgment debts were nondischargeable under
14 § 523(a)(2) and (6). TEM moved for summary judgment asking the
15 bankruptcy court to apply issue preclusion to the state court’s
16 findings on the issue of whether the state court judgment debts
17 for conversion and Debtors’ violation of ARS §33-420 arose from
18 a willful and malicious injury as required by § 523(a)(6).5
19 Debtors opposed the summary judgment on the grounds that
20 the record as presented did not clearly show that they were
21 liable for conversion and the state statute violation, as other
22 counterdefendants were named. According to Debtors, issue
23 preclusion could not apply because the state court judgment was
24 unclear which individual or entity was liable for the debts.
25 Debtors did not raise any other issues in their opposition.
26
27
5
TEM did not pursue the § 523(a)(2) claim in the summary
28 judgment.
-5-
1 Thereafter, the parties stipulated to modify the automatic
2 stay to allow them to petition the state court for clarification
3 on whether both Debtors were liable for the judgment debts. On
4 May 24, 2010, the bankruptcy court entered the order modifying
5 the stay.
6 The state court issued a Minute Entry dated January 13,
7 2011, finding that there was no ambiguity in the jury verdict
8 with respect to the conversion claim for relief because it
9 specifically provided the names of the parties liable - Property
10 Masters or Mark. The court concluded that there was no basis to
11 expand the judgment on the conversion claim for relief to Lisa
12 Bosworth (“Lisa”). The state court also found no ambiguity in
13 the jury verdict as to whether both Mark and Lisa were liable
14 for damages arising out of their violation of ARS §33-420.
15 However, the state court found the form of judgment incomplete
16 because it did not identify the Bosworths as judgment debtors.
17 Therefore, the court corrected the judgment to reflect that
18 judgment was against Mark Bosworth and Lisa Bosworth.
19 After submitting the state court’s clarification of the
20 underlying judgment to the bankruptcy court, TEM filed an
21 application with the bankruptcy court for an order to show cause
22 why final judgment should not be entered (the “OSC”).6 TEM
23 reiterated that issue preclusion should apply, but the OSC’s
24 focus was on that portion of the judgment pertaining to the
25
26 6
Although TEM styled its subsequent pleading as an order to
27 show cause why judgment should not be entered in its favor, its
pleading was in effect a continuation of its earlier filed motion
28 for summary judgment.
-6-
1 state statutory violation. In that regard, TEM argued that the
2 jury unanimously concluded that Mark and Lisa Bosworth
3 fraudulently recorded documents to the detriment of TEM and thus
4 no material questions of fact existed on that claim.
5 Debtors responded to the OSC, arguing that although the
6 jury found they violated the false document recording statute,
7 there were no findings that they caused a willful and malicious
8 injury within the meaning of § 523(a)(6). Debtors also
9 maintained that the legal fees and costs awarded to TEM in the
10 state court covered thirteen different claims for relief, only
11 two of which were part of the adversary proceeding. Debtors
12 maintained that TEM had not proven what, if any, fees were
13 attributable to Debtors’ violation of ARS §33-420.
14 On March 10, 2010, the bankruptcy court placed its decision
15 granting summary judgment to TEM on the record. The transcript
16 of that hearing is not part of the record on appeal.7 The
17 minute entry of the hearing reflects that the court relied on
18 Kawaauhau v. Geiger,
523 U.S. 57 (1998) for its decision. On
19 April 4, 2011, the bankruptcy court entered a final judgment
20
21 7
Instead, the record contains the transcript for a March 9,
2010 hearing, which reflects that TEM’s OSC was on calendar. At
22
that hearing, the court and the parties engaged in an extensive
23 discussion regarding whether the jury’s finding that Debtors
violated
Ariz. Rev. Stat. § 33-420 met the elements for a willful
24 and malicious injury under § 523(a)(6). Debtors’ brief mentions
portions of the discussion. Although this transcript provides
25 some indication of the court’s reasoning that presumably led to
26 its ultimate decision, we are left to speculate regarding the
precise legal analysis behind the court’s ruling. Debtors’
27 failure to include a transcript, while not fatal to their case
since our review is de novo, is a violation of Rule 8009(b) and
28 9th Cir. BAP R. 8006-1.
-7-
1 finding that TEM was entitled to judgment as a matter of law on
2 its claim against Debtors for their violation of the false
3 document recording statute. The court found the amount of
4 $2,207,444.45 (treble damages of $1,221,000, attorney’s fees and
5 costs of $448,880.26, and interest of $537,564.19) excepted from
6 discharge under § 523(a)(6). The judgment further stated that
7 the bankruptcy court found no just reason for delay in the entry
8 of judgment under Civil Rules 54(b) and 58(a)(1).8 The judgment
9 did not address whether the issue preclusion doctrine applied to
10 TEM’s judgment regarding the conversion claim for relief. Thus,
11 that claim is not implicated in this appeal.
12 II. JURISDICTION
13 The bankruptcy court had jurisdiction over this proceeding
14 under
28 U.S.C. §§ 1334 and 157(b)(2)(I). We have jurisdiction
15 under
28 U.S.C. § 158.
16 III. ISSUE
17 Did the bankruptcy court properly preclude Debtors from
18 relitigating the issues of willfulness and maliciousness with
19 respect to their violation of ARS §33-420 ?
20
21 8
Civil Rule 54(b), made applicable to the Bankruptcy Code
by Rule 7054(a), provides in part:
22
23 When an action presents more than one claim for relief
. . . or when multiple parties are involved, the court
24 may direct entry of a final judgment as to one or more,
but fewer than all, claims or parties only if the court
25 expressly determines that there is no just reason for
26 delay . . . .
27 Civil Rule 58, made applicable to the Bankruptcy Code by
Rule 7058, requires every judgment to be set out in a separate
28 document.
-8-
1 IV. STANDARDS OF REVIEW
2 Our review is de novo. Ghomeshi v. Sabban (In re Sabban ),
3
600 F.3d 1219, 1221 (9th Cir. 2010) (grant of summary judgment);
4 Khaligh v. Hadaegh (In re Khaligh),
338 B.R. 817, 823 (9th Cir.
5 BAP 2009) (issue preclusion).
6 V. DISCUSSION
7 We must decide in this appeal whether the same factual
8 issues were necessarily tried in the state court concerning the
9 nature of Debtors’ conduct as those for a willful and malicious
10 injury under § 523(a)(6).9
11 The standards for determining whether a debt falls within
12 the scope of § 523(a)(6) are well-defined. First,
13 nondischargeable debts under § 523(a)(6) must arise from
14 intentionally inflicted injuries. Carrillo v. Su (In re Su),
15
290 F.3d 1140, 1143 (9th Cir. 2002) (citing Kawaauhau v. Geiger,
16
523 U.S. 57 (1998)). Second, the “willful” and “malicious”
17 requirements under the statute involve separate analyses.
18 In re Su,
290 F.3d at 1146–47; and see Barboza v. New Form, Inc.
19 (In re Barboza),
545 F.3d 702, 711 (9th Cir. 2008) (recent case
20 reinforcing Su and the requirement of courts to apply a separate
21 analysis for each prong of “willful” and “malicious”). A
22 willful injury is proved by establishing facts that show the
23 debtor had the subjective intent to cause harm or the subjective
24 knowledge that harm was substantially certain to occur. Su,
25
26 9
Section 523(a)(6) states that a discharge under § 727 does
27 not discharge an individual from any debt — “(6) for willful and
malicious injury by the debtor to another entity or to the
28 property of another entity.”
-9-
1
290 F.3d at 1146. Proving malicious conduct requires a showing
2 that the debtor: (1) committed a wrongful act; (2) done
3 intentionally; (3) which necessarily causes injury; and (4) was
4 done without just cause or excuse.
Id. at 1146–47.
5 Parties may invoke the issue preclusion doctrine to
6 preclude relitigation of the elements necessary to prove an
7 exception to discharge under § 523(a)(6). Grogan v. Garner,
8
498 U.S. 279, 284 n. 11 (1991). The party asserting issue
9 preclusion has the burden of proving that all of the threshold
10 requirements have been met. Kelly v. Okoye (In re Kelly),
11
182 B.R. 255, 258 (9th Cir. BAP 1995), aff’d,
100 F.3d 110 (9th
12 Cir. 1996). To sustain this burden, a party must introduce a
13 record sufficient to reveal the controlling facts and the exact
14 issues litigated in the prior action. Reasonable doubts about
15 what was decided in the prior action should be resolved against
16 the party seeking preclusion.
Id.
17 In determining the preclusive effect of a state court
18 judgment in nondischargeability proceedings, we apply the issue
19 preclusion rules of the state from which the judgment arose.
20
28 U.S.C. § 1738; Gayden v. Nourbakhsh (In re Nourbakhsh),
21
67 F.3d 798, 800 (9th Cir. 1995). Under Arizona law, the
22 doctrine of issue preclusion bars a party from relitigating an
23 issue identical to one he has previously litigated to a
24 determination on the merits in another action. Hawkins v. Dept.
25 Economic Sec.,
900 P.2d 1236, 1239 (Ariz. 1995). The elements
26 necessary to invoke the doctrine are: “(1) the issue is
27 actually litigated in the previous proceeding, (2) there is a
28 full and fair opportunity to litigate the issue, (3) resolution
-10-
1 of such issue is essential to the decision, (4) there is a valid
2 and final decision on the merits, and (5) there is a common
3 identity of the parties.”
Id.
4 Debtors argue that issue preclusion does not apply because
5 the jury never considered whether their conduct was willful and
6 malicious as required by § 523(a)(6). Debtors further argue
7 that there is no requirement for malice under ARS §33-420.
8 Although it is not clear from their briefs, we surmise that
9 Debtors’ dispute in this appeal is whether the first or third
10 element for issue preclusion under Arizona law have been met;
11 i.e., whether the issue was actually litigated or whether the
12 resolution of the issue was essential to the jury’s decision.
13 Granted, the elements of a state court action are rarely
14 identical to those for proving a willful and malicious injury.
15 However, issue preclusion will apply if the facts established by
16 the state court judgment show that Debtors’ violation of
17 ARS §33-420 was a willful and malicious injury. As discussed
18 below, all of the elements for a willful and malicious injury
19 under § 523(a)(6) are encompassed in the allegations made in the
20 eighteenth claim for relief pertaining to Debtors’ violation of
21 the false recording statute, which sounds in tort.
22 TEM alleged that Debtors caused to be recorded a full and
23 unqualified power of attorney regarding one of more of the
24 identified properties; the power of attorney was forged and/or
25 fraudulently altered to support Debtors’ claim to the
26 properties; and Debtors knew at the time of recordation that the
27 power of attorney was forged and/or fraudulently altered.
28 Based on these allegations, the jury found Debtors violated
-11-
1 ARS §33-420 (“False documents; liability; special action;
2 damages; violation; classification”), which provides in relevant
3 part:
4 A. A person purporting to claim an interest in, or a
lien or encumbrance against, real property, who causes
5 a document asserting such claim to be recorded in the
office of the county recorder, knowing or having
6 reason to know that the document is forged,
groundless, contains a material misstatement or false
7 claim or is otherwise invalid is liable to the owner
or beneficial title holder of the real property for
8 the sum of not less than five thousand dollars, or for
treble the actual damages caused by the recording,
9 whichever is greater, and reasonable attorney fees and
costs of the action.
10
B. The owner or beneficial title holder of the real
11 property may bring an action pursuant to this section
in the superior court in the county in which the real
12 property is located for such relief as is required to
immediately clear title to the real property as
13 provided for in the rules of procedure for special
actions. This special action may be brought based on
14 the ground that the lien is forged, groundless,
contains a material misstatement or false claim or is
15 otherwise invalid. The owner or beneficial title
holder may bring a separate special action to clear
16 title to the real property or join such action with an
action for damages as described in this section. In
17 either case, the owner or beneficial title holder may
recover reasonable attorney fees and costs of the
18 action if he prevails.
19 . . .
20 D. A document purporting to create an interest in,
or a lien or encumbrance against, real property not
21 authorized by statute, judgment or other specific
legal authority is presumed to be groundless and
22 invalid.
23 E. A person purporting to claim an interest in, or a
lien or encumbrance against, real property, who causes
24 a document asserting such claim to be recorded in the
office of the county recorder, knowing or having
25 reason to know that the document is forged,
groundless, contains a material misstatement or false
26 claim or is otherwise invalid is guilty of a class 1
misdemeanor.
27
A plain reading shows that the statute requires a knowing
28
-12-
1 state of mind before sanctions will be imposed. Under
2 subsection (A) a person is liable under the statute only if he
3 or she causes a document to be recorded or filed “knowing or
4 having reason to know10 the document is . . . forged . . .
5 contains a false claim or is otherwise invalid . . . .”
6 Subsection (E) uses the exact scienter language as subsection
7 (A) and makes the filing of a forged or fraudulent document,
8 such as the power of attorney in this case, a class 1
9 misdemeanor, a criminal offense.
10 ARS §33-420 does not define the term “knowing,” but the
11 word suggests deliberate or conscious conduct. Thus, the mental
12 state required for liability under the statute is subjective,
13 not objective, and the conduct proscribed intentional, not
14 carelessness. Hence, the liability imposed for a knowing
15 violation of the statute is the equivalent of an intentional
16 injury under § 523(a)(6). See Geiger,
523 U.S. at 61
17 (§ 523(a)(6) requires deliberate or intentional injury). It
18 follows that one who records a document against property,
19 “knowing” that it is false, intentionally causes harm to the
20 property owner. See In re Ormsby, 591 F.3d at 1206 (willful
21 injury requirement met when debtor has subjective motive to
22 inflict injury or when the debtor believes that injury is
23 substantially certain to result from his own conduct).
24 Accordingly, we conclude that the factual issues pertaining
25 to Debtors’ statutory violation are the same as those necessary
26
10
27 Because TEM alleged that Debtors knew the power of
attorney was forged or fraudulently altered, whether they “had
28 reason to know” was not at issue.
-13-
1 to prove a willful injury under § 523(a)(6). Those issues were
2 actually litigated and an essential element for imposing
3 liability against Debtors under the state statute. At the
4 March 9, 2010 hearing, Debtors’ attorney more or less conceded
5 that the willful element under § 523(a)(6) was met under the
6 state statute by the requirement of a “knowing” state of mind:
7 “They have willful. They don’t have malicious.” Hr’g Tr.
8 (March 9, 2010) at 26:22-25. “[T]here could be willful conduct
9 but there’s been no establishment that any of the conduct was
10 malicious.” Id. at 27:16-17-28:22-24. “You have the element of
11 willfulness because that’s an intentional act.” Id. at 34:15-16.
12 We also conclude that the conduct proscribed by ARS §33-420
13 required TEM to prove the classic elements of a malicious injury
14 under § 523(a)(6). Suarez v. Barrett (In re Suarez),
400 B.R.
15 732 (9th Cir. BAP 2009) (noting that the focus in a § 523(a)(6)
16 analysis is on whether the conduct leading to the judgment debt
17 could be for a willful and malicious injury). Debtors’
18 recordation of a false document against TEM’s properties was the
19 wrongful act. Further, their knowledge of the wrongfulness of
20 their act demonstrates that the recordation was done
21 intentionally on TEM’s properties and thus would necessarily
22 cause harm to TEM. Debtors’ conduct was wrongful and malicious
23 because the treble damages11 awarded under ARS §33-420 are
24
25 11
The statute imposes a minimum of $5,000 in damages even
26 if no actual damages have occurred. Where actual damages have
occurred, they must be trebled. The statute then requires that
27 the higher of the two be awarded, plus attorney’s fees and costs.
In Wyatt, the Arizona Supreme Court compared the treble damages
28 (continued...)
-14-
1 punitive in nature. Wyatt v. Wehmueller,
806 P.2d 870, 875
2 (Ariz. 1991). Accordingly, the state court judgment, which
3 evidences Debtors’ specific intent to injure TEM, proves that
4 Debtors’ conduct was “without just cause or excuse.” Cf. Murray
5 v. Bammer (In re Bammer),
131 F.3d 788, 793 (9th Cir. 1997) (“As
6 a matter of law, [the debtor’s] unprincipled behavior cannot be
7 regarded as ‘just.’ To do so would be inconsistent with the
8 basic policy of granting discharge of debts, which is to give
9 the ‘honest but unfortunate debtor a fresh start.’”) (quoting
10 Brown v. Felsen,
442 U.S. 127, 128 (1979)); see also Jett v.
11 Sicroff (In re Sicroff),
401 F.3d 1101, 1107 (9th Cir. 2005)
12 (finding a specific intent to injure negated any proffered just
13 cause or excuse offered by debtor). At the summary judgment
14 stage, once TEM made a prima facie showing that there was no
15 just cause or excuse for Debtors’ wrongful acts, Debtors, as the
16 non-moving parties, had the burden of producing evidence that
17 showed the existence of genuine issues of fact for trial on this
18 element. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 256
19 (1986). Debtors failed to make such a showing and thus there
20 was no proof concerning an essential element of their case.
21 In sum, the facts established by the state court judgment
22 demonstrate that all the elements for a willful and malicious
23 injury were actually litigated and essential to the jury’s
24
11
(...continued)
25 under the statute to punitive damages because both forms of
26 damages serve the purpose of punishing the wrongdoer. The court
further observed that Arizona common law requires a showing of
27 malice to obtain punitive damages.
806 P.2d at 875. “Punitive
damages serve as a penalty for evil-minded conduct that is
28 something more than gross negligence.”
Id.
-15-
1 verdict finding Debtors’ liable for damages to TEM based on
2 their violation of ARS §33-420. Summary judgment should be
3 granted when the record shows that “there is no genuine dispute
4 as to any material fact and that the movant is entitled to
5 judgment as a matter of law.” Civil Rule 56(a) (made applicable
6 to the Code by Rule 7056). Here, based on issue preclusion,
7 there is no genuine issue as to any material fact. Therefore,
8 the bankruptcy court properly granted summary judgment for TEM.
9 As previously mentioned, the bankruptcy court found the
10 attorney’s fees and costs and interest on the judgment
11 nondischargeable. Debtors do not argue in their opening brief
12 how the court erred in making the fees and costs or interest
13 nondischargeable. Thus, that argument is waived for purposes of
14 this appeal. Smith v. Marsh,
194 F.3d 1045, 1052 (9th Cir.
15 1999) (“[O]n appeal, arguments not raised by a party in its
16 opening brief are deemed waived.”).
17 VI. CONCLUSION
18 For the reasons stated, we AFFIRM.
19
20
21
22
23
24
25
26
27
28
-16-
