In re: Scott Warren Cohen ( 2023 )


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  •                                                                                   FILED
    DEC 13 2023
    NOT FOR PUBLICATION
    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 No. CC-23-1057-CFL
    SCOTT WARREN COHEN,
    Debtor.                                 Bk. No. 8:21-bk-12176-SC
    SCOTT WARREN COHEN,
    Appellant,
    v.                                                  MEMORANDUM*
    CARLA COHEN,
    Appellee.
    Appeal from the United States Bankruptcy Court
    for the Central District of California
    Scott C. Clarkson, Bankruptcy Judge, Presiding
    Before: CORBIT, FARIS, and LAFFERTY, Bankruptcy Judges.
    INTRODUCTION
    Chapter 71 debtor Scott Warren Cohen (“Scott”) 2 appeals the
    bankruptcy court’s order granting relief from the automatic stay to his
    *
    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.
    1
    Unless 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, all “Civil Rule” references are to the Federal Rules of Civil
    Procedure, and all “Cal. Fam. Code” references are to the California Family Code.
    2 We will refer to the parties by their first names for clarity because they share the
    former spouse, Carla F. Cohen (“Carla”). The bankruptcy court granted
    Carla relief from stay to return to state family court to litigate her family
    law claims as part of their interrupted dissolution proceedings. Because we
    find no error, we AFFIRM.
    FACTS3
    Scott and Carla were finalizing a marital dissolution proceeding
    (initiated in February 2020) in California family court (“Family Law
    Proceedings”) when Scott filed his chapter 7 bankruptcy petition.
    Consequently, the Family Law Proceedings were stayed.
    Because distribution of the marital property had yet to occur, Carla
    sought an extension of time to file a proof of claim in Scott’s bankruptcy.
    The bankruptcy court subsequently approved a stipulation between the
    trustee and Carla which stated that: (1) Carla’s claims against Scott were
    “not liquidated at this time”; (2) the trustee preferred that Carla liquidate
    the claims outside the bankruptcy court; and (3) Carla should be given
    additional time to liquidate the value of her claims. Carla subsequently
    filed a proof of claim in an “unknown” amount.
    same last name. No disrespect is intended.
    3 We exercise our discretion to take judicial notice of documents electronically
    filed in the underlying bankruptcy case. See Atwood v. Chase Manhattan Mortg. Co. (In re
    Atwood), 
    293 B.R. 227
    , 233 n.9 (9th Cir. BAP 2003).
    2
    Carla also filed a motion for relief from the automatic stay for the
    purpose of continuing and concluding the Family Law Proceedings and
    liquidating her claims against Scott.
    In her supporting declaration, Carla indicated that as part of the
    Family Law Proceedings, she intended to utilize a forensic accountant to
    assist with uncovering funds Scott potentially concealed or secretly
    dissipated. Carla sought confirmation from the bankruptcy court that
    nothing prohibited the state court from entering orders for child support,
    spousal support, attorney’s fees, and/or sanctions against Scott for breaches
    of fiduciary duty, concealing income, frustrating a settlement, etc.
    Scott opposed Carla’s request for relief from the automatic stay. Scott
    argued that he did not have the funds to defend himself in the Family Law
    Proceedings at the same time he was defending himself against § 523
    nondischargeability actions initiated by former clients arising from his
    alleged involvement in a Ponzi scheme. Scott also argued that Carla’s
    statements regarding her intent to pursue alleged concealed assets
    indicated that she planned to use the Family Law Proceedings as a way to
    revive time-barred nondischargeability actions for § 523(a)(2) (fraud),
    § 523(a)(4) (embezzlement), and/or § 523(a)(6) (malice/conversion)
    (together referred to as “Time-Limited Claims”).
    The bankruptcy court entered an order granting in part Carla’s
    motion (“Stay Relief Order”). The bankruptcy court granted Carla relief
    from stay to proceed in the Family Law Proceedings “to liquidate her
    3
    claims for child support, spousal support, and equalization payments, i.e.,
    claims which fall under either . . . [§] 523(a)(5) or [§] 523(a)(15).” But, the
    bankruptcy court noted that it was not granting Carla relief from stay to
    “pursue tort claims beyond the scope of Sections 523(a)(5) or 523(a)(15)”
    because “the time for filing nondischargeability for tort-related claims
    under [§§] 523(a)(2), 523(a)(4) and 523(a)(6) has expired.” Neither Scott nor
    Carla appealed the Stay Relief Order.
    When the parties returned to state court to resume the Family Law
    Proceedings, the scope and meaning of the Stay Relief Order became a
    point of contention. Because the family law court was mindful of the
    bankruptcy stay, and the parties disagreed as to the breadth of what could
    be litigated in the Family Law Proceedings, the family law court requested
    that the parties obtain clarification from the bankruptcy court as to the
    scope of permissible litigation.
    Consequently, Carla returned to the bankruptcy court and filed a
    “motion for a comfort order” or, in the alternative, “relief under FRBP
    7060(b)(6)” of the Stay Relief Order. 4
    4
    We note that the parties, both before the bankruptcy court and before this
    Panel, cite “FRCP 7060” and/or “FRBP 7060” and/or “Rule 7060” in their briefing.
    However, neither the Federal Rules of Bankruptcy Procedure nor the Federal Rules of
    Civil Procedure include a rule “7060.” The bankruptcy court did not comment on the
    parties’ error. We assume the court and the parties are referring to Civil Rule 60 made
    applicable through Rule 9024 and will review the orders and arguments accordingly.
    4
    Carla stated in her supporting declaration that the comfort order was
    necessary because Scott was attempting to prevent her from litigating any
    “claims of breach of fiduciary duties” or other “intentional
    wrongdoing/malfeasance such as conversion as to any asset that was
    placed on the bankruptcy schedules” in the Family Law Proceedings.
    According to Carla, even if Scott’s alleged bad conduct could be used to
    satisfy some of the elements of the Time-Limited Claims, that did not
    preclude that same bad conduct from being relevant to the family law
    court’s final orders as to spousal and child support and equalization of
    assets pursuant to California family law.
    Carla identified several issues that she intended to litigate in the
    Family Law Proceedings and sought confirmation that the issues fit within
    the relief provided by the Stay Relief Order (“Disputed Issues”).
    The Disputed Issues included: (1) whether Scott concealed
    community property assets; (2) whether Scott engaged in illegal business
    schemes; (3) whether Scott transferred away community property assets
    and did not disclose those transfers; (4) whether Scott engaged in negligent,
    or grossly negligent investments, without obtaining Carla’s informed
    consent; (5) whether Scott used community property funds without
    approval after the petition for dissolution was filed; and (6) whether Scott
    falsely represented his income and/or the community’s assets and debts
    during discovery.
    5
    Scott opposed Carla’s motion. Although he acknowledged the
    request for clarification from the family law court, Scott argued that
    another order was unnecessary. Scott also argued that Carla’s motion
    sought relief that would be an inappropriate exercise of an extraordinary
    remedy provided by FRBP 7060 and inapplicable to the facts of this case.
    When the motion was heard, the case had been reassigned to a
    different judge. That judge was reluctant to change the prior judge’s order
    but invited Carla to bring “another motion for relief from the automatic
    stay . . . and amplify exactly what the reasoning is and why and how” the
    Disputed Issues should be considered within § 523(a)(15). 5
    Carla did not accept this invitation. Instead, she filed an “Amended
    Renewed Motion” in which Carla asserted that she was not alleging any
    error in the Stay Relief Order. Rather, she was asking the court to “clarify
    the scope of the relief granted at the request of the Family Court, as a result
    of intentional or unintentional obfuscation created by [Scott],” so that the
    Family Law Proceedings could resume.
    The bankruptcy court entered a tentative ruling granting the
    Amended Renewed Motion. First, the bankruptcy court tentatively
    determined that, contrary to Scott’s assertions, there was no time limit for
    seeking relief under § 523(a)(15).
    5
    Following the hearing, the bankruptcy court entered an order denying Carla’s
    motion for a comfort order without prejudice.
    6
    Second, the bankruptcy court tentatively determined that the “plain
    text of . . . [§] 523(a)(15) is expansive and does not limit the types of civil
    actions covered within its purview . . . .”
    Finally, the court tentatively determined that § 523(a)(15) covers the
    types of claims contemplated by Carla.
    After a hearing, the bankruptcy court entered an order granting the
    Amended Renewed Motion for the reasons stated on the record and in the
    court’s tentative ruling (“Order Granting Amended Relief”)
    Scott timely appealed.
    JURISDICTION
    The bankruptcy court had jurisdiction under 
    28 U.S.C. §§ 1334
     and
    157(b)(2)(A), (G). We have jurisdiction under 
    28 U.S.C. § 158
    .
    ISSUES
    Did the bankruptcy court abuse its discretion in granting Carla’s
    Amended Renewed Motion?
    Did the bankruptcy court err in its interpretation of the scope of the
    Stay Relief Order?
    STANDARDS OF REVIEW
    We review a motion for clarification under Civil Rule 60(a) or
    60(b)(6), made applicable in bankruptcy proceedings pursuant to Rule
    9024, for abuse of discretion. See Garamendi v. Henin, 
    683 F.3d 1069
    , 1077
    (9th Cir. 2012); Determan v. Sandoval (In re Sandoval), 
    186 B.R. 490
    , 494 (9th
    Cir. BAP 1995). To determine whether the bankruptcy court has abused its
    7
    discretion, we conduct a two-step inquiry: (1) we review de novo whether
    the bankruptcy court “identified the correct legal rule to apply to the relief
    requested,” and (2) if it did, we consider whether the bankruptcy court’s
    application of the legal standard was “illogical, implausible, or without
    support in inferences that may be drawn from the facts in the record.”
    United States v. Hinkson, 
    585 F.3d 1247
    , 1262 (9th Cir. 2009) (en banc).
    We review a bankruptcy court’s legal conclusions, including its
    interpretation of provisions of the Bankruptcy Code and state law, de novo.
    Roberts v. Erhard (In re Roberts), 
    331 B.R. 876
    , 880 (9th Cir. BAP 2005), aff'd,
    
    241 F. App’x 420
     (9th Cir. 2007). De novo review requires that we consider
    a matter anew, as if no decision had been rendered previously. United
    States v. Silverman, 
    861 F.2d 571
    , 576 (9th Cir. 1988).
    We may affirm the bankruptcy court’s ruling on any basis supported
    by the record. See, e.g., Heilman v. Heilman (In re Heilman), 
    430 B.R. 213
    , 216
    (9th Cir. BAP 2010).
    DISCUSSION
    A.    The substance of the motion controls.
    Carla’s Amended Renewed Motion sought relief under “FRBP
    7060(b)(6).” As noted previously, Rule 7060 does not exist. However, it is
    the substance, not the caption or label of a motion, which determines how a
    motion should be construed. Miller v. Transam. Press, Inc., 
    709 F.2d 524
    , 527
    (9th Cir. 1983). “[N]omenclature is not controlling, a court must construe
    whether a motion, however styled, is appropriate for the relief requested.”
    8
    Bordallo v. Reyes, 
    763 F.2d 1098
    , 1101 (9th Cir. 1985) (citation and internal
    quotation marks omitted).
    Carla asserted that she was seeking clarification of the Stay Relief
    Order. In reality, however, she wanted the court to change that order. The
    Stay Relief Order provided that she could not assert claims in the family
    court that are covered by §§ 523(a)(2), (4), or (6). She wanted the court to
    eliminate that limitation. Civil Rule 60(b)(6), made applicable in
    bankruptcy proceeding through Rule 9024, governs such a request.
    B.    Civil Rule 60(b)(6) allowed the bankruptcy court to grant Carla’s
    Amended Renewed Motion.
    Civil Rule 60(b)(6) is a catch-all provision that allows a court to
    vacate a judgment for “any other reason justifying relief from the operation
    of the judgment.” Lehman v. United States, 
    154 F.3d 1010
    , 1017 (9th Cir.
    1998). Civil Rule 60(b) complements the discretionary power that
    bankruptcy courts have as courts of equity “to reconsider, modify or vacate
    their previous orders so long as no intervening rights have become vested
    in reliance on the orders.” Meyer v. Lenox (In re Lenox), 
    902 F.2d 737
    , 740
    (9th Cir. 1990).
    In this case, it is undisputed that the family law court requested
    clarification of the Stay Relief Order. The family law court’s request for
    clarification satisfies Civil Rule 60(b)(6)’s “any other reason justifying relief
    . . . .” Lehman, 
    154 F.3d at 1017
    . Additionally, the bankruptcy court
    determined that the Stay Relief Order improperly prohibited Carla from
    9
    litigating Time-Limited Claims. Therefore, the bankruptcy court was acting
    within its discretionary power to reconsider, modify or vacate its previous
    orders when it granted Carla’s Amended Renewed Motion. See In re Lenox,
    
    902 F.2d at 740
    .
    C.    The bankruptcy court did not err in determining the Disputed
    Issues could be litigated in the Family Law Proceedings.
    1.     Section 523(a)(15) as amended is intentionally broad.
    Section 523(a)(5) excepts from discharge any debt “for a domestic
    support obligation,” which is defined in § 101(14A). Congress added
    § 523(a)(15) in 1994 as a new discharge exception. Adam v. Dobin (In re
    Adam), BAP No. CC-14-1416-PaKiTa, 
    2015 WL 1530086
    , at *5 (9th Cir. BAP
    Apr. 6, 2015), aff'd, 
    677 F. App’x 353
     (9th Cir. 2017). Section 523(a)(15)
    excepts from discharge any debt “to a spouse, former spouse, or child of
    the debtor and not of the kind described in paragraph (5) [i.e., a domestic
    support obligation] that is incurred by the debtor in the course of a divorce
    or separation or in connection with a separation agreement, divorce decree
    or other order of a court of record . . . .”
    A prior BAP panel extensively analyzed the scope and purpose of
    § 523(a)(15) in In re Adam, 
    2015 WL 1530086
    , at *4-6. There, the panel agreed
    with other courts that “[t]he existence of this new provision suggest[ed]
    Congress envisioned that there would be other types of payments
    authorized in divorce agreements that would not qualify as alimony,
    maintenance, or support.” 
    Id. at *5
     (quotation marks and citation omitted).
    10
    The Adam panel concluded that the history of changes to § 523(a)(15),
    including removing § 523(a)(15) from the time limits imposed by
    § 523(c)(1), “demonstrate[d] Congress’s intent to spread as large a net, and
    to include as many marriage dissolution-related claims as possible, within
    this exception to discharge.” Id. at *4.
    Consequently, the combination of amended §§ 523(a)(5) and (a)(15)
    now exclude from discharge virtually all obligations between spouses and
    children, as long as the obligations were incurred in the course of a divorce
    or separation or established in connection with a separation agreement,
    divorce decree, or other order of a court of record.
    2.    Section 523(a)(15) and Time-Limited Claims may overlap and
    are not mutually exclusive.
    On appeal, Scott argues that the bankruptcy court erred in its
    interpretation of § 523(a)(15). Scott argues that Carla should be precluded
    from litigating any claims in the Family Law Proceedings that would
    qualify as a Time-Limited Claim in the bankruptcy court. It appears that
    the bankruptcy court initially shared Scott’s misconception because the
    Stay Relief Order granted Carla relief from stay to litigate §§ 523(a)(5) and
    (a)(15) claims but no relief to litigate any Time-Limited Claims, thus
    implying that the claims were mutually exclusive. For the following
    reasons, we determine that § 523(a)(15) and Time-Limited Claims may
    overlap and are not mutually exclusive.
    11
    The subsections of § 523(a) are generally not mutually exclusive; thus,
    the same set of operative facts may be used to establish a variety of
    nondischargeability claims under § 523(a). See, e.g., Tallant v. Kaufman (In re
    Tallant), 
    218 B.R. 58
    , 64 (9th Cir. BAP 1998) (holding that §§ 523(a)(2)(A)
    and (a)(4) are not mutually exclusive); McCrary v. Barrack (In re Barrack), 
    217 B.R. 598
    , 606 (9th Cir. BAP 1998) (holding that the bankruptcy court erred
    in finding §§ 523(a)(2) and (a)(6) are mutually exclusive); Romesh Japra,
    M.D., F.A.C.C., Inc. v. Apte (In re Apte), 
    180 B.R. 223
    , 232 (9th Cir. BAP 1995)
    (holding that the bankruptcy court “erred to the extent that it held that
    § 523(a)(2)(A) and § 523(a)(6) [were] mutually exclusive”), aff’d, 
    96 F.3d 1319
     (9th Cir. 1996); Hanson v. Brown (In re Brown), 
    541 B.R. 906
    , 910–13
    (Bankr. M.D. Fla. 2015) (holding the same debt excepted from discharge
    under both §§ 523(a)(6) and (a)(15)); but see Eugene Parks Law Corp. Defined
    Benefit Pension Plan v. Kirsh (In re Kirsh), 
    973 F.2d 1454
    , 1457 (9th Cir. 1992)
    (explaining that a plain reading of §§ 523(a)(2)(A) and (a)(2)(B) indicated
    Congress’s intent for mutual exclusivity because “the former refer[ed] to
    representations other than those respecting the debtor’s financial condition
    and the latter refer[ed] specifically to written statements of financial
    condition”).
    Despite the general rule that subsections of § 523(a) are not mutually
    exclusive, Scott urges us to interpret § 523(a)(15) to exclude Time-Limited
    Claims. Statutory language is ambiguous only “if it gives rise to more than
    12
    one reasonable interpretation.” Woods v. Carey, 
    722 F.3d 1177
    , 1181 (9th Cir.
    2013) (quotation marks omitted).
    In this case the statute is not ambiguous and therefore our analysis
    begins and ends “with the language of the statute itself.” Lamie v. U.S. Tr.,
    
    540 U.S. 526
    , 534 (2004). Contrary to Scott’s assertions, there is no language
    in § 523(a) preventing claims of the type included in the Time-Limited
    Claims from also being claims creating § 523(a)(15) debts. Rather, the
    language in § 523(a)(15) is expansive. Although § 523(a)(15) prohibits a
    § 523(a)(5) debt from being included, there is no other limiting language as
    to the types of claims that may create a § 523(a)(15) debt.
    The plain language of the statute makes clear that the only restriction
    is that the debt must arise “in the course of a divorce or separation” or be
    incurred “in connection with a separation agreement, divorce decree or
    other order of a court . . . .” § 523(a)(15) (emphases added). As such, a
    nondischargeability claim under § 523(a)(15) is viable regardless of
    whether the same set of operative facts may also establish Time-Limited
    Claims.
    Furthermore, based on the plain language, we see no statutory
    directive in § 523(a)(15) to limit the types of claims that a state court can
    adjudicate between two parties as part of a dissolution proceeding. Indeed,
    there is no language in § 523(a)(15) limiting the types of claims that may be
    adjudicated in “the course of a divorce or separation.” Therefore,
    § 523(a)(15) does not prevent a state family law court from considering
    13
    evidence of a spouse’s alleged wrongful conduct when adjudicating the
    rights, duties, and entitlements in marital property during a dissolution
    proceeding, regardless of whether similar claims would be time-barred in a
    bankruptcy case.
    3.    Carla’s ability to litigate § 523(a)(15) claims in the Family Law
    Proceedings was not dependent upon whether she pled
    Time-Limited Claims before the bankruptcy court.
    Scott also argues that because Carla did not timely file any of the
    Time-Limited Claims in the bankruptcy case, she should be prohibited
    from making any similar claims in the Family Law Proceedings. We
    disagree.
    First, contrary to Scott’s assertions, § 523(a)(15) does not contain that
    type of temporal restriction. As noted above, the only restriction in
    § 523(a)(15) is that the debt be “incurred by the debtor in the course of a
    divorce or separation” or incurred “in connection with a separation
    agreement, divorce decree or other order of a court . . . .” § 523(a)(15)
    (emphases added). Scott’s argument ignores the fact that Congress
    specifically removed § 523(a)(15) from the strict filing deadlines imposed
    by § 523(c). In re Adam, 
    2015 WL 1530086
    , at *6. Indeed, as the bankruptcy
    court correctly determined, following Scott’s proposition “would impose
    the very requirement Congress eliminated.” Therefore, the expiration of
    the time to bring Time-Limited Claims before the bankruptcy court did not
    impede Carla’s right to litigate § 523(a)(15) claims.
    14
    Second, there is no language in the subsection to indicate a
    congressional intent to prohibit or preclude a creditor spouse from seeking
    evidence of a debtor spouse’s fraud or deceit as part of the dissolution
    proceedings unless the creditor spouse timely files a Time-Limited Claim
    in the bankruptcy court. If we were to accept Scott’s interpretation, we
    would have to determine that a creditor spouse unintentionally waives the
    right to fully litigate family law claims pursuant to state law by failing to
    file Time-Limited Claims in the bankruptcy court. Such a result would be
    absurd and is not logically or legally supported.6
    Therefore, we conclude that a nondischargeability claim under
    § 523(a)(15) may be litigated regardless of whether Time-Limited Claims
    were brought before the bankruptcy court.
    4.     The Family Law Proceedings was the proper forum for
    litigating the Disputed Issues.
    Finally, Scott also seems to argue that the bankruptcy court, rather
    than the California family law court, was the only venue to litigate the
    6
    A creditor spouse may maintain a claim against a debtor spouse regardless of
    whether the claim has been liquidated. This is because the term “debt” is defined in
    § 101(12) as “liability on a claim.” The term “claim” is defined in § 101(5)(A) to mean the
    “right to payment, whether or not such right is reduced to judgment, liquidated,
    unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or
    unsecured . . . .” (Emphasis added). Therefore, regardless of whether Carla’s claim was
    fixed or liquidated by a final property settlement order in the Family Law Proceedings,
    it is without reasonable debate that she had a claim at the time Scott filed his
    bankruptcy petition and that she did not waive that claim by not filing a Time-Limited
    Claim in the bankruptcy court.
    15
    Disputed Issues, and because Carla failed to timely raise the Disputed
    Issues before the bankruptcy court, she had lost her right to raise those
    issues in any forum. We disagree.
    The bankruptcy court has “wide latitude in crafting relief from the
    automatic stay[.]” Schwartz v. United States (In re Schwartz), 
    954 F.2d 569
    ,
    572 (9th Cir. 1992); see, e.g., Alonso v. Summerville (In re Summerville), 
    361 B.R. 133
    , 144 (9th Cir. BAP 2007) (stating “[t]he bankruptcy court had
    jurisdiction to clarify” its relief from stay order). Because the Disputed
    Issues concerned Scott’s liability regarding alleged misuse of community
    property pursuant to state law, the bankruptcy court did not abuse its
    discretion in granting Carla relief from stay to continue the Family Law
    Proceedings including litigating the Disputed Issues.
    Dissolution and the allocation of property incident to a dissolution
    are longstanding local functions governed by state law. Ankenbrandt v.
    Richards, 
    504 U.S. 689
    , 706 (1992). Long ago, the Supreme Court determined
    that “[t]he whole subject of the domestic relations of husband and wife,
    parent and child, belongs to the laws of the states and not to the laws of the
    United States.” Ex parte Burrus, 
    136 U.S. 586
    , 593–94 (1890); see also Mansell
    v. Mansell, 
    490 U.S. 581
    , 587 (1989) (“[D]omestic relations are preeminently
    matters of state law . . . .”); Moore v. Sims, 
    442 U.S. 415
    , 435 (1979) (“Family
    relations are a traditional area of state concern.”).
    Accordingly, federal courts, including bankruptcy courts, ordinarily
    defer to the state courts in matrimonial matters to promote judicial
    16
    economy and out of respect for the state courts’ expertise in domestic
    relations issues. Robbins v. Robbins (In re Robbins), 
    964 F.2d 342
    , 344–45 (4th
    Cir. 1992); Mac Donald v. Mac Donald (In re Mac Donald), 
    755 F.2d 715
    , 717
    (9th Cir. 1985).
    Therefore, because of California’s strong state interest in domestic
    relations matters and the superior competence of California family law
    courts in “settling family disputes because regulation and supervision of
    domestic relations within their borders is entrusted to the states,” Coats v.
    Woods, 
    819 F.2d 236
    , 237 (9th Cir. 1987) (quoting Peterson v. Babbitt, 
    708 F.2d 465
    , 466 (9th Cir. 1983)), the bankruptcy court did not err in determining
    that the Family Law Proceedings was the better forum for adjudicating and
    equitably distributing the marital property. See also In re Marriage of
    Feldman, 
    153 Cal. App. 4th 1470
     (2007).
    Furthermore, the Disputed Issues fit squarely within claims that may
    impact the division of assets as part of a dissolution proceeding pursuant
    to the California Family Code.7 Because the Disputed Issues were relevant
    7
    For example, the fiduciary obligations of spouses to each other are set forth in
    
    Cal. Fam. Code § 721
     and are made specifically applicable during dissolution
    proceedings by 
    Cal. Fam. Code § 1100
    (e). Relatedly, 
    Cal. Fam. Code § 2100
    (c) requires a
    continuing duty of “full and accurate disclosure of all assets and liabilities in which one
    or both parties have or may have an interest . . . .” Sanctions may be imposed for failure
    to comply. See 
    Cal. Fam. Code § 2107
    . Additionally, 
    Cal. Fam. Code § 2602
     provides
    that, “[a]s an additional award or offset against existing property, the court may award,
    from a party’s share, the amount the court determines to have been deliberately
    misappropriated by the party to the exclusion of the interest of the other party in the
    community estate.”
    17
    to the Family Law Proceedings, the bankruptcy court did not err in
    determining that the Disputed Issues fit within the Stay Relief Order,
    which allowed Carla relief from stay to litigate issues within § 523(a)(15).
    Accordingly, the bankruptcy court did not err in determining that the
    Disputed Issues were within the scope of § 523(a)(15) claims, and therefore
    within the relief granted in the Stay Relief Order and could be litigated as
    part of the Family Law Proceedings.
    CONCLUSION
    Based on the foregoing, we AFFIRM.
    18
    

Document Info

Docket Number: 23-1057

Filed Date: 12/13/2023

Precedential Status: Non-Precedential

Modified Date: 12/13/2023