In re: Zinoviy Bershadskiy

FILED
OCT 15 2013
1
SUSAN M. SPRAUL, CLERK
2 U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP No. CC-12-1452-TaKuKi
)
6 ZINOVIY BERSHADSKIY, ) Bk. No. SV 10-25466-AA
)
7 Debtor. ) Adv. No. SV 11-01477-AA
______________________________)
8 ZINOVIY BERSHADSKIY, )
)
9 Appellant, )
)
10 v. ) MEMORANDUM*
)
11 RODEO REALTY, INC., )
)
12 Appellee. )
______________________________)
13
Submitted Without Oral Argument**
14 September 19, 2013
15 Filed - October 15, 2013
16 Appeal from the United States Bankruptcy Court
for the Central District of California
17
Honorable Alan M. Ahart, Bankruptcy Judge, Presiding
18 ________________________________
19 Appearances: Appellant Zinoviy Bershadskiy, pro se, on brief;
Mark M. Sharf of Merritt, Hagen & Sharf LP, on
20 brief, for Appellee Rodeo Realty, Inc.
__________________________________
21
Before: TAYLOR, KURTZ, and KIRSCHER, Bankruptcy Judges.
22
23
24
*
This disposition is not appropriate for publication.
25 Although it may be cited for whatever persuasive value it may
have (see Fed. R. App. P. 32.1), it has no precedential value.
26 See 9th Cir. BAP Rule 8013-1.
**
27 In an order entered on May 24, 2013, the Panel determined
that this matter was suitable for disposition without oral
28 argument. Fed. R. Bankr. P. 8012; 9th Cir. BAP Rule 8012-1.
1 INTRODUCTION
2 Rodeo Realty, Inc. (“Rodeo Realty”) initiated a
3 nondischargeability action against appellant, chapter 7 debtor,
4 Zinoviy Bershadskiy (“Appellant”), under 11 U.S.C. §§ 523(a)(2)
5 and (a)(6).1 Rodeo Realty sought summary judgment; debtor failed
6 to oppose; the bankruptcy court granted summary judgment under
7 § 523(a)(2) and entered a nondischargeable judgment in Rodeo
8 Realty's favor in the amount of $47,250 plus post-judgment
9 interest (“Judgment”). Appellant filed a timely notice of appeal
10 from the Judgment. We AFFIRM.
11 FACTS2
12 On July 19, 2010, Appellant entered into a 180-day exclusive
13 listing agreement with Rodeo Realty (“Listing”) in relation to
14 his Los Angeles residence (the “Property”). The Listing stated a
15 sales price of $1,075,000 and also provided that: “Seller may
16 cancel this contract after 30 days. Paragraph 1A will apply if a
17
18
1
Unless specified otherwise, all chapter and section
19 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532,
“Rule” references are to the Federal Rules of Bankruptcy
20 Procedure, Rules 1001-9037, and all “Civil Rule” references are
to the Federal Rules of Civil Procedure.
21
2
Appellant filed only an opening brief in this appeal. He
22 did not file any excerpts of the record, although he attached to
his opening brief a copy of a document titled “Exclusive
23 Authorization and Right to Sell (Listing) Agreement.” By order
entered December 7, 2012, the Panel waived the requirement of
24 Fed. R. Bankr. P. 8009(b) that the Appellant file and serve an
appendix to his brief containing excerpts of the record.
25 Fortunately for purposes of appellate review, Rodeo Realty filed
excerpts of the record in support of its opening brief; we
26 reviewed and relied upon these documents. In addition, we
exercised our discretion to review documents on the bankruptcy
27 court’s electronic docket to assist us in ascertaining the
relevant procedural history. O’Rourke v. Seaboard Sur. Co.
28 (In re E.R. Fegert, Inc.), 887 F.2d 955, 958 (9th Cir. 1989).
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1 cancellation is requested.” Complaint, Adv. Dkt. #1, Ex. A.;
2 Decl. Yelena Pavlova, Adv. Dkt. #44, Ex. A. Paragraph 1A
3 provided, in relevant part, that:
4 Should [Rodeo Realty] procure a purchaser ready,
willing, and able to purchase the above property at the
5 above price and terms, or at a price accepted by
[Appellant], [Appellant] shall pay [Rodeo Realty] a fee
6 of 5% of such listing or sales price plus $250.
[Appellant] shall pay [Rodeo Realty] a like fee should
7 the property be sold, transferred, exchanged, or leased
during the term of this listing, by any source
8 including [Appellant], or within six months after the
expiration of this contract to any person with whom
9 [Rodeo Realty] has had any communications prior to the
termination of the listing term provided that said
10 [Rodeo Realty’s] sub-agent shall have notified
[Appellant] of such communication verbally, or in
11 writing, within 10 days after the termination of the
listing term. [Rodeo Realty] is entitled to said fee
12 whether any escrow resulting from such offer closes
during or after the expiration of the listing term.
13
14 Id. The Listing further provided, at paragraph 1C, that:
15 “Should [Appellant] (a) withdraw the property from sale, . . .
16 [Appellant], nonetheless, shall pay [Rodeo Realty] a fee equal to
17 the percentage of the listing price as stated in paragraph 1
18 above.”3 Id.
19 Sometime after August 19, 2010, Appellant requested
20 cancellation of the Listing, and Rodeo Realty agreed. On
21 December 9, 2010, Appellant filed a voluntary bankruptcy petition
22 under chapter 11. The case ultimately was converted to a case
23
24
3
These quoted provisions of the Listing are substantially
25 consistent with the provisions set forth in the copy of the
Listing attached to Appellant’s Opening Brief. The only point of
26 difference is the commission percentage. In the copy of the
Listing attached to the Complaint, the inserted handwritten
27 number is a “5." In the copy attached to Appellant’s Opening
Brief, the inserted number appears to be a “3" with the initials
28 “ZB” handwritten above it and on top of text in the form.
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1 under chapter 7, and Rodeo Realty filed a timely
2 nondischargeability complaint.
3 In the complaint, Rodeo Realty alleged that Appellant
4 committed fraud when he falsely represented that he was taking
5 the Property off the market, when, in fact, he intended to sell
6 it to a Rodeo Realty registered buyer. Rodeo Realty alleged
7 damages of 5% of the sales price, plus $250, as provided under
8 the Listing, as a proximate result of Appellant’s fraudulent
9 conduct. Rodeo Realty sought a nondischargeable judgment in the
10 amount of the lost commission pursuant to § 523(a)(2),4 as well
11 as punitive damages and attorney’s fees.5
12 Appellant, originally represented by counsel, filed a motion
13 to dismiss the complaint which the bankruptcy court denied.
14 Appellant thereafter substituted himself in place of counsel and
15 filed documents docketed as an answer. The answer consists of a
16 one-paragraph undated letter to the judge from Appellant and
17 copies of various correspondence. In the letter, Appellant
18 denied fraud. Approximately eight months later, Rodeo Realty
19 filed and served its motion for summary judgment (hereinafter,
20 “MSJ”) along with a memorandum of points and authorities, four
21
4
22 Rodeo Realty failed to expressly set forth in its
complaint whether it sought relief under subsection (a)(2)(A) or
23 (a)(2)(B) of § 523, and the Judgment, likewise, references only
§ 523(a)(2). Nonetheless, when viewed in context, it is clear
24 that Rodeo Realty sought nondischargeability based on alleged
actual fraud under § 523(a)(2)(A) and not based on use of a
25 materially false statement in writing “respecting the debtor’s or
an insider’s financial condition,” under § 523(a)(2)(B).
26
5
The complaint included a second cause of action for
27 nondischargeability under § 523(a)(6), which we do not further
mention here as the bankruptcy court entered the Judgment solely
28 on § 523(a)(2)(A).
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1 declarations, a request for judicial notice, and a separate
2 statement of uncontroverted facts. The Notice of Motion gave
3 notice to Appellant that failure to file and serve papers in
4 opposition to the MSJ could be deemed consent to the relief
5 sought therein.
6 The evidence submitted by Rodeo Realty in support of the MSJ
7 included the following:
8 1. A declaration by Yelena Pavlova, a licensed real estate
9 agent at Rodeo Realty who was the primary contact with
10 Appellant, because, like Appellant, she was fluent in
11 Russian. She attached an authenticated copy of the Listing.
12 Ms. Pavlova declared under penalty of perjury that she
13 showed the Property to Abraham Bak and later to his wife and
14 daughter, within 24 to 48 hours of initial contact on
15 August 15, 2010. Thereafter she had multiple telephone
16 conversations with Mr. Bak. She offered, as corroboration,
17 copies of her cellphone records and identified the
18 respective contact numbers. She met with Mr. Bak on
19 August 31, 2010 to discuss a proposed sale of the Property
20 at $900,000, and later that day with Appellant to discuss
21 Mr. Bak’s expression of interest, which caused Appellant to
22 authorize a reduction of the listing price to $999,950 to
23 encourage an offer from Mr. Bak.
24 Ms. Pavlova stated that her co-agent, Marc Tahler, and
25 she received a fax from Appellant’s daughter Marina Fox on
26 September 8, 2010 requesting that Rodeo Realty cancel its
27 Listing. She attached a copy of the fax as an exhibit to
28 her declaration. She stated that she confirmed by telephone
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1 with Appellant that his daughter was properly acting on his
2 behalf, and on September 9, 2010, Rodeo Realty canceled the
3 Listing. Rodeo Realty sent a letter dated September 9,
4 2010, specifically identifying Mr. and Mrs. Bak as potential
5 buyers, and another letter on September 14, 2010. Copies of
6 the two letters were attached to Ms. Pavlova’s declaration
7 as exhibits. Ms. Pavlova also stated that at no time did
8 Appellant or anyone on his behalf disclose that Appellant
9 decided to sell the Property to Mr. Bak without Rodeo
10 Realty’s assistance.
11 Finally, Ms. Pavlova attached as an exhibit to her
12 declaration a copy of a Grant Deed executed by Appellant on
13 November 2, 2010, deeding the Property to the Baks. The
14 Grant Deed was recorded on November 5, 2010. She learned
15 from the Multiple Listing Service database, which she stated
16 to be a source regularly relied upon by agents, that the
17 Property was sold for $940,000. Ms. Pavlova stated that the
18 commission due and owing to Rodeo based on the sale, was
19 $47,000 (5%) plus $250.
20 2. A declaration by Marc Tahler, under penalty of perjury,
21 who is a licensed salesperson at Rodeo Realty. Mr. Tahler
22 stated that he attended the meeting with Ms. Pavlova and
23 Mr. Bak on August 31, 2010 to discuss a possible offer to
24 purchase the Property and later the meeting with Appellant
25 that resulted in an authorized reduction in the listing
26 price.
27 Mr. Tahler stated that he received a telephone call
28 from Appellant’s daughter Marina Fox on September 6 or 7,
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1 2010 during which she “pretended that her father had
2 requested that the Listing Agreement be canceled two weeks
3 earlier.” Tahler Decl., Adv. Dkt. #34 at 2:14-16. He
4 stated that he informed Ms. Fox that her father made no such
5 request. Mr. Tahler then corroborated Ms. Pavlova’s
6 statement that they received the fax from Ms. Fox on
7 September 8, 2010 requesting cancellation of the Listing
8 with no disclosure, at any time by anyone, that Appellant
9 had decided to sell the Property to Mr. Bak without
10 assistance from Rodeo Realty. Mr. Tahler sent the letters
11 on September 9, 2010 and September 14, 2010 (to correct the
12 spelling), identifying Mr. Bak as a potential buyer
13 protected under the Listing.
14 3. The Declaration of Mark M. Sharf, as Rodeo Realty’s
15 counsel, regarding the deposition testimony of Appellant
16 taken on April 30, 2012, attached to which is a copy of the
17 reporter’s transcript. Mr. Sharf stated that Appellant had
18 refused to comply with the Notice of Deposition requirement
19 that he produce his telephone records regarding
20 communications between Appellant and Mr. Bak, and others,
21 for the months of August through December. In addition,
22 Mr. Sharf pointed out that Appellant testified that
23 Appellant’s daughter also refused to produce her telephone
24 records.
25 Mr. Sharf also reviewed the Appellant’s Statement of
26 Financial Affairs in his bankruptcy case and noted that
27 Appellant failed to disclose the sale of the Property, which
28 would have been required by an accurate answer to
- 7 -
1 Question 10.6
2 In Rodeo Realty’s Memorandum of Points and Authorities,
3 Rodeo Realty argued that Appellant obtained cancellation of the
4 Listing by not disclosing his negotiations to sell to Mr. Bak,
5 and did so intentionally to avoid paying a commission. It
6 provided evidence that within 60 days after the Listing was
7 cancelled, the Property was deeded to the Baks. It also argued
8 that as part of the deception, Appellant and his daughter falsely
9 represented that Appellant canceled the Listing before the
10 September 8, 2010 fax. Rodeo Realty argued that Appellant
11 concealed the sale transaction from Rodeo Realty as well as from
12 the bankruptcy court, his creditors, and the chapter 7 trustee by
13 answering “none” to Question 10 of the Statement of Financial
14 Affairs, refusing to testify regarding the net proceeds from the
15 sale, and refusing to produce his telephone records regarding
16 contacts with Mr. Bak. Rodeo Realty finally argued that the
17 bankruptcy court could infer Appellant’s knowledge and fraudulent
18 intent from the number of fabrications, the “rush to fire Rodeo
19 Realty when a serious buyer was located, proximity of the sale to
20 the cancellation of the listing agreement, combined with the
21 continuing concealment of the sale” in the bankruptcy case filed
22 shortly thereafter. MSJ, Adv. Dkt. #40 at 10.
23 Appellant filed nothing in opposition.
24 The bankruptcy court waived appearances at the hearing on
25 the MSJ and entered the Judgment on August 16, 2012. Appellant
26
27 6
Rodeo Realty also filed a Request to Take Judicial Notice
of Appellant’s bankruptcy filings, and in particular the
28 Appellant’s non-disclosure of the sale of the Property.
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1 timely filed the notice of appeal on August 28, 2012.
2 JURISDICTION
3 The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
4 §§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C.
5 § 158(a)(1).
6 ISSUES
7 Did the bankruptcy court err when it granted Rodeo Realty’s
8 MSJ and entered the Judgment against Appellant?
9 STANDARD OF REVIEW
10 We review de novo the bankruptcy court’s decision to grant
11 summary judgment. Boyajian v. New Falls Corp. (In re Boyajian),
12 564 F.3d 1088, 1090 (9th Cir. 2009); Lopez v. Emergency Serv.
13 Restoration, Inc. (In re Lopez), 367 B.R. 99, 103 (9th Cir. BAP
14 2007). Viewing the evidence in the light most favorable to the
15 non-moving party (i.e., Appellant), we determine whether the
16 bankruptcy court correctly found that there are no genuine issues
17 of material fact and that the moving party is entitled to
18 judgment as a matter of law. Jesinger v. Nev. Fed. Credit Union,
19 24 F.3d 1127, 1130 (9th Cir. 1994); Gertsch v. Johnson & Johnson
20 Fin. Corp. (In re Gertsch), 237 B.R. 160, 165 (9th Cir. BAP
21 1999).
22 DISCUSSION
23 A. Waiver of Claims and Arguments
24 Rodeo Realty argues that Appellant waived all factual and
25 legal arguments by failing to raise them before the bankruptcy
26 court in response to the MSJ. This argument has some merit.
27 As an appellate court, “We are [] concerned only with the
28 record before the trial judge when his decision was made.”
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1 Kirschner v. Uniden Corp. of Am.,, 842 F.2d 1074, 1077 (9th Cir.
2 1988) (internal quote and citation omitted). Evidence not
3 admitted by the bankruptcy court is not part of the record and
4 cannot be considered in this appeal. Id. at 1077-1078.
5 In Appellant’s Opening Brief he states one issue to be
6 reviewed:
7 Whether the bankruptcy code section 523(a)(2) applies
given that there is evidence of substantial fraud,
8 misrepresentation and deceit on the part of Plaintiff
Rodeo with regard to its legal action and the evidence
9 it has provided in support of its action, to collect
its purported real estate sales commission.
10
11 Apl’t Opening Brief at 5. He argues, without any citation to the
12 record, that Rodeo Realty engaged in misrepresentations designed
13 to trick Appellant into believing that Appellant owed a
14 commission for the sale of the Property, whereas Appellant sold
15 the Property to a neighbor who found the Property himself without
16 the aid of Rodeo Realty. Appellant denies that Rodeo Realty’s
17 agents ever showed the Property to the buyer, much less prior to
18 cancellation of the Listing, and he argues that Rodeo Realty
19 doctored the Listing, converting the commission fee from 2% to
20 5%. Appellant presented none of these alleged factual
21 contentions to the bankruptcy court.
22 We are cognizant of our duty to ensure that pro se litigants
23 do not lose their right to a determination of the merits due to
24 ignorance of a technical procedural requirement.7 We, however,
25 must limit our consideration to the record before the bankruptcy
26 court. United States v. Kitsap Physicians Serv., 314 F.3d 995,
27
7
See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696,
28 699 (9th Cir. 1986).
- 10 -
1 999 (9th Cir. 2002). Appellant waived his factual arguments by
2 failing to file any response to the MSJ, and he cannot create
3 disputed issues of fact by presenting them here in the first
4 instance. Nevertheless, we will examine the record to determine
5 if any basis for reversal is clearly evident,8 as our de novo
6 review necessarily includes determination as to whether Rodeo
7 Realty is entitled to judgment as a matter of law.
8 B. Motion to Dismiss9
9 Before we consider the merits of the MSJ, we briefly note
10 Appellant’s contention that the dispute between the parties was a
11 simple breach of contract claim that should have been dismissed
12 at the outset of the Adversary Proceeding, pursuant to
13 Appellant’s motion to dismiss under Civil Rules 9(b) and
14 12(b)(6). Appellant did not include the denial of his motion to
15 dismiss as an issue in his Opening Brief, nor did he file a
16 Statement of Issues on Appeal. Nor does Appellant present in his
17 Opening Brief any substantive argument that addresses the
18 bankruptcy court’s denial of the motion to dismiss. Appellant’s
19 sole statement, however, that the dispute is nothing more than
20 breach of contract, goes directly to the merits of whether Rodeo
21 Realty met its burden of proof on summary judgment and
22 established its entitlement to judgment, as a matter of law,
23 based on fraud. We conclude that it did, and we address this
24
8
It is error to grant summary judgment simply because the
25 opponent failed to oppose. N. Slope Borough v. Rogstad
(In re Rogstad), 126 F.3d 1224, 1227 (9th Cir. 1997).
26
9
“[A]n appeal from the final judgment draws in question
27 all earlier non-final orders and all rulings which produced the
judgment.” Munoz v. Small Bus. Admin., 644 F.2d 1361, 1364, 1363
28 (9th Cir. 1981).
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1 issue hereafter.
2 C. The MSJ
3 Summary judgment is governed by Rule 7056. Rule 7056,
4 incorporating Civil Rule 56(c), states that summary judgment
5 “shall be rendered forthwith if the pleadings, depositions,
6 answers to interrogatories, and admissions on file, together with
7 the affidavits, if any, show that there is no genuine issue as to
8 any material fact and that the moving party is entitled to
9 judgment as a matter of law.” The burden of establishing that
10 there is no genuine issue of material fact lies with the moving
11 party. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
12 In order to establish that a debt is nondischargeable under
13 section 523(a)(2)(A), a creditor must establish five elements by
14 a preponderance of the evidence:
15 (1) misrepresentation, fraudulent omission or deceptive
conduct by the debtor; (2) knowledge of the falsity or
16 deceptiveness of his statement or conduct; (3) an
intent to deceive; (4) justifiable reliance by the
17 creditor on the debtor’s statement or conduct; and
(5) damage to the creditor proximately caused by its
18 reliance on the debtor’s statement or conduct.
19 Turtle Rock Meadows Homeowners Ass’n v. Slyman (In re Slyman),
20 234 F.3d 1081, 1085 (9th Cir. 2000); Ghomeshi v. Sabban
21 (In re Sabban), 384 B.R. 1, 5 (9th Cir. BAP 2008). Based on our
22 de novo review of the record before the bankruptcy court, we
23 conclude that no genuine issue as to any material fact exists,
24 that Rodeo Realty carried its burden of proof on each of the five
25 elements of § 523(a)(2)(A), and that Rodeo Realty is entitled to
26 judgment as a matter of law.
27 Through the declaratory evidence offered by Ms. Pavlova and
28 Mr. Tahler and corroborating cellphone records, Rodeo Realty
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1 established that it identified Mr. Bak as a potential purchaser
2 during the term of the Listing. The denial contained in the
3 answer is insufficient to create a triable issue of fact on this
4 point; Appellant had to come forward with evidence of specific
5 facts in the face of Rodeo Realty’s case. Both of Rodeo Realty’s
6 declarants testified that when Appellant sought to cancel the
7 Listing, within days of introduction to Mr. Bak as an interested
8 buyer, he failed to disclose that he was in negotiations to sell
9 the Property to Mr. Bak. The testimony that Appellant never
10 advised Rodeo Realty of the sale, which closed less than 60 days
11 after cancellation of the Listing, is also undisputed, as is the
12 fact that the following month Appellant filed his chapter 7
13 bankruptcy, again without disclosing the closed sale transaction.
14 An omission of a material fact can constitute a false
15 representation actionable under section 523(a)(2)(A). Citibank
16 (S.D.), N.A. v. Eashai (In re Eashai), 87 F.3d 1082, 1088-89 (9th
17 Cir. 1996). However, there must be a duty to disclose. Id.
18 Here, Appellant entered into a business transaction with Rodeo
19 Realty that included a provision allowing cancellation subject to
20 payment of the agreed commission if Appellant later sold the
21 Property to a registered buyer. Under such circumstances,
22 Appellant had a duty to disclose to Rodeo Realty the
23 post-cancellation sale and intent to sell the Property. See
24 Apte v. Japra (In re Apte), 96 F.3d 1319, 1324 (9th Cir. 1996).
25 The fraudulent omissions related to this sale as well as the
26 affirmative misrepresentation that he was taking the Property off
27 the market satisfy the first element necessary for
28 section 523(a)(2)(A) relief.
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1 Further, Rodeo Realty’s evidence establishes both
2 Appellant’s knowledge of the falsity and deceptiveness of his
3 statements and omissions and his intent to deceive. Appellant
4 signed a contract, knew its terms as he requested cancellation,
5 knew that he sold his own home, and knew that he did not tell
6 Rodeo Realty about the sale. Few debtor defendants are likely to
7 admit defrauding their creditor, therefore, “fraudulent intent
8 may be established by circumstantial evidence, or by inferences
9 drawn from a course of conduct.” Devers v. Bank of Sheridan,
10 Mont. (In re Devers), 759 F.2d 751, 753-54 (9th Cir. 1985).
11 Alexander & Alexander of Wash., Inc. v. Hultquist
12 (In re Hultquist), 101 B.R. 180, 183 (9th Cir. BAP 1989). Here,
13 the circumstantial evidence – Appellant’s sale of the Property to
14 Mr. Bak: a registered potential buyer; the timing of the
15 cancellation: days after introduction to Mr. Bak; the timing of
16 the sale: shortly after cancelling the Listing; the sales price
17 of $940,000: almost exactly the amount of the agreed reduced list
18 price, less the 5% commission that Appellant agreed to pay to
19 Rodeo Realty; Appellant’s failure to disclose the sale in his
20 Statement of Financial Affairs in his chapter 7 bankruptcy
21 initiated a month after closing; and Appellant’s refusal to
22 supply phone records in discovery – only supports the inference
23 that Appellant knowingly intended to prevent Rodeo Realty from
24 collecting its commission.
25 The evidence also supports a finding of justifiable
26 reliance. First, justifiable reliance turns on a person’s
27 knowledge under the particular circumstances. In re Eashai,
28 87 F.3d at 1090. Here, there is no evidence that Rodeo Realty
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1 had any knowledge of Appellant’s fraud or even an ability to
2 detect fraud or reason to look for it. Reliance can be presumed
3 where the fraud primarily involves omissions. Binder v.
4 Gillespie, 184 F.3d 1059, 1064 (9th Cir. 1999).
5 The only question that then remains is the amount of damages
6 proximately caused by Appellant’s non-disclosure. Rodeo Realty’s
7 evidence establishes that Appellant’s intentional failure to
8 disclose the sale effectively prevented it from protecting its
9 rights to collect the commission owed. Without knowledge of the
10 pending sale, Rodeo Realty could not put a demand into escrow and
11 could not lien the proceeds if the demand were refused. And,
12 without knowledge of the transaction, Rodeo Realty could not
13 bring an action to collect. Free from oversight, as a result of
14 his deceit, Appellant promptly put sale proceeds beyond Rodeo
15 Realty’s control and filed bankruptcy. Appellant testified in
16 his deposition that he gave some of the sale proceeds to his
17 daughters and spent the balance, proximately causing Rodeo Realty
18 damages in the amount of the commission it could otherwise have
19 collected. Here, Rodeo Realty’s damages flowed cleanly from
20 Appellant’s fraud. The only evidence establishes that this is
21 not a mere breach of contract case and that Appellant is not an
22 honest but unfortunate debtor entitled to discharge.
23 The bankruptcy court entered judgment in an amount
24 consistent with the undisputed evidence in Ms. Pavolva’s
25 declaration that the Property sold for $940,000, and that it was
26 damaged in the amount of the contract commission fee of 5% plus
27 $250. The Judgment, entered in the amount of the earned
28
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1 commission,10 is well-supported by substantial evidence.
2 Appellant failed to present any evidence to the contrary, and we
3 determine that we cannot make any justifiable inferences to the
4 contrary.
5 Therefore, we conclude that the bankruptcy court did not
6 commit error and that Rodeo Realty is entitled to summary
7 judgment, as a matter of law.
8 CONCLUSION
9 For all the reasons set forth above, we AFFIRM the
10 bankruptcy court’s summary judgment in favor of Rodeo Realty.
11
12
13
14
15
16
17
18
19
20
21
22
23
24 10
Although Rodeo Realty also sought punitive damages, it
is clear from the record that the bankruptcy court did not award
25 punitive damages. And, although the Judgment also allowed Rodeo
Realty to request attorney’s fees and costs and we located on the
26 docket an entered order that allowed fees and costs to Rodeo
Realty, Appellant has not sought review of that order in this
27 appeal and we, thus, do not address the appropriateness of an
attorney’s fees award under the circumstances of this Adversary
28 Proceeding.
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