In re: Aleksandr Goldshtadt

FILED
SEP 4 2019
NOT FOR PUBLICATION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-18-1333-LSTa
ALEKSANDR GOLDSHTADT, Bk. No. 2:15-bk-12692-SK
Debtor. Adv. No. 2:16-ap-01569-SK
EVGHENIA GAJIU,
Appellant,
v. MEMORANDUM*
HOWARD M. EHRENBERG, Chapter 7
Trustee,
Appellee.
Submitted Without Oral Argument August 12, 2019
Filed – September 4, 2019
Appeal from the United States Bankruptcy Court
for the Central District of California
*
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.
Honorable Sandra R. Klein, Bankruptcy Judge, Presiding
Appearances: Leslie A. Cohen and J’aime K. Williams of Leslie Cohen
Law PC on brief for Appellant; Daniel A. Lev and Asa S.
Hami of SulmeyerKuptez, A Professional Corporation on
brief for Appellee.
Before: LAFFERTY, SPRAKER, and TAYLOR, Bankruptcy Judges.
INTRODUCTION
Evghenia Gajiu appeals the bankruptcy court’s grant of summary
judgment in favor of the chapter 71 trustee, Howard Ehrenberg. The
judgment determined that real property owned by Ms. Gajiu and the
Debtor, her husband, is community property and thus property of the
estate. The bankruptcy court found that (1) the properties were presumed
to be community property despite the fact that they were held by the
couple as joint tenants, and (2) Ms. Gajiu did not produce evidence
sufficient to raise a genuine issue of material fact regarding the character of
the ownership of the properties.
We AFFIRM.
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, and all “Civil Rule” references are to the Federal Rules of
Civil Procedure.
2
FACTUAL BACKGROUND
During their marriage, Debtor and Ms. Gajiu purchased two parcels
of real property in Los Angeles, California (the “Properties”). They took
title to the Properties as “husband and wife as joint tenants.” Specifically,
the couple purchased property on Alla Road (the “Alla Property”) in June
2008 and another property on Cardwell Place (the “Cardwell Property”) in
November 2013.
In September 2008, after purchasing the Alla Property but before
purchasing the Cardwell Property, the couple entered into a post-nuptial
agreement (the “Moldova Agreement”),2 which provided, in relevant part,
that each spouse’s interest in any subsequently purchased real property
would be determined by the amounts their respective relatives contributed
toward the purchase.
In February 2015, Debtor filed for chapter 11 relief, listing the
Properties on his schedules as jointly held with Ms. Gajiu.3 About a year
later, the bankruptcy court appointed Appellee Howard Ehrenberg as
chapter 11 trustee (“Trustee”). Thereafter, on Trustee’s motion, the
2
In its ruling, the bankruptcy court referred to the post-nuptial agreement as the
“Moldova Agreement” because the document was entered into in Moldova.
3
Shortly before Trustee filed the adversary proceeding that is the subject of this
appeal, Debtor filed an amended Schedule A. He left blank the column for designating
form of ownership, and in the property description he inserted the phrase “Subject to
claims/rights of Evghenia Gajiu (Debtor’s spouse).”
3
bankruptcy court converted the case to chapter 7,4 with Mr. Ehrenberg
continuing in his capacity as trustee.
In December 2016, Trustee filed an adversary proceeding against
Ms. Gajiu. In the First and Second Claims for Relief, Trustee sought
authorization to sell both the estate’s interests and Ms. Gajiu’s interests in
the Properties. Trustee’s Third Claim for Relief sought a declaration of the
parties’ respective ownership interests in the Properties. In August 2017,
pursuant to the parties’ stipulation, the court entered judgment on the First
and Second Claims for Relief, authorizing Trustee to sell the Properties.
The Properties were both sold, resulting in net proceeds to the estate of
approximately $1.8 million.
Trustee thereafter moved for summary judgment on the Third Claim
for Relief, seeking a declaration that Ms. Gajiu’s interest in the Properties
was community property and property of the estate. Trustee argued that
under California law, the fact that the couple took title as joint tenants was
not sufficient to overcome the presumption that property acquired by a
couple during marriage is community property, citing Brace v. Speier (In re
Brace), 566 B.R. 13 (9th Cir. BAP 2017).
Ms. Gajiu filed an opposition, arguing that under the Moldova
4
Trustee’s appointment was precipitated by Debtor’s (and Ms. Gajiu’s)
unauthorized postpetition execution and recording of a deed of trust on the Cardwell
Property in favor of Ms. Gajiu’s uncle, purportedly to secure a loan of $500,000.
4
Agreement and California law, her interest in the Properties was separate
property because some of the funds for their purchases had been
contributed by Ms. Gajiu’s relatives. Specifically, she testified in her
declaration that her uncle, Leonid Kossinov, had gifted her $444,940 of the
down payment for the Cardwell Property, and her mother, Tatiana
Shakgeldyan, had gifted her $287,000 of the down payment for the Alla
Property. She argued that, at a minimum, there was a genuine issue of
material fact regarding her ownership interests that precluded summary
judgment.
The bankruptcy court issued a tentative ruling granting Trustee’s
motion. After hearing argument, it adopted that ruling as final. The court
concluded that (1) under California law, Ms. Gajiu’s interest in the
Properties was presumptively community property; and (2) Ms. Gajiu had
not rebutted that presumption. Specifically, the bankruptcy court found
that the Moldova Agreement by its terms did not apply to the Alla
Property because that property was purchased before the Moldova
Agreement was executed, and the agreement stated that it applied only to
any subsequently purchased properties. Additionally, the court found that
the Moldova Agreement was not binding on Trustee because it was not
recorded. The bankruptcy court also found that Ms. Gajiu’s documentary
evidence of “gifts” from her relatives, purportedly to purchase the
Properties, was insufficient to corroborate her declaration testimony to that
5
effect.
Thereafter, the bankruptcy court entered judgment for Trustee,
declaring that the entirety of the Properties was community property as of
the petition date and thus was property of the estate; as a result, all of the
sale proceeds were property of the estate.
Ms. Gajiu timely appealed.
JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and
157(b)(2)(A). We have jurisdiction under 28 U.S.C. § 158.
ISSUE
Did the bankruptcy court err in granting summary judgment
declaring that the Properties co-owned by Debtor and his non-debtor
spouse were community property and thus property of Debtor’s
bankruptcy estate?
STANDARD OF REVIEW
We review de novo the bankruptcy court’s grant of summary
judgment. Plyam v. Precision Dev., LLC (In re Plyam), 530 B.R. 456, 461 (9th
Cir. BAP 2015). “When we conduct a de novo review, we look at the matter
anew, the same as if it had not been heard before, and as if no decision
previously had been rendered, giving no deference to the bankruptcy
court’s determinations.” Barnes v. Belice (In re Belice), 461 B.R. 564, 572–73
(9th Cir. BAP 2011) (citations omitted). We must apply the same legal
6
standards that all federal courts are required to apply in considering the
propriety of summary judgment. Marciano v. Fahs (In re Marciano), 459 B.R.
27, 35 (9th Cir. BAP 2011), aff’d, 708 F.3d 1123 (9th Cir. 2013).
Summary judgment is appropriate “if the movant shows that there is
no genuine issue as to any material fact and the movant is entitled to
judgment as a matter of law.” Wank v. Gordon (In re Wank), 505 B.R. 878, 886
(9th Cir. BAP 2014) (citing Civil Rule 56(a), applicable in adversary
proceedings by Rule 7056). An issue is genuine if there is enough evidence
for a reasonable trier of fact to make a finding in favor of the non-moving
party, and an issue is material if it might legally affect the outcome of the
case. Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 992 (9th Cir. 2001) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986)).
When the party moving for summary judgment would bear the
burden of proof at trial, it must come forward with evidence
which would entitle it to a directed verdict if the evidence went
uncontroverted at trial. In such a case, the moving party has the
initial burden of establishing the absence of a genuine issue of
fact on each issue material to its case. Once the moving party
comes forward with sufficient evidence, the burden then moves
to the opposing party, who must present significant probative
evidence tending to support its claim or defense. A motion for
summary judgment may not be defeated, however, by evidence
that is merely colorable or is not significantly probative.
C.A.R. Transp. Brokerage Co. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th
Cir. 2000) (citations and internal quotations omitted).
7
In considering summary judgment, the court is not permitted to
weigh the evidence. In re Wank, 505 B.R. at 886. Nor may a court make
credibility determinations or make inferences on summary judgment, if it
is possible to reasonably infer otherwise. See Anderson, 477 U.S. at 255. “The
evidence of the non-movant is to be believed, and all justifiable inferences
are to be drawn in his favor.” Id.DISCUSSION
A. The bankruptcy court did not err in concluding that the Properties
were in fact community property despite being held in joint
tenancy.
Under California law, the community property presumption
embodied in California Family Code § 7605 generally trumps the record
title presumption found in California Evidence Code § 662.6 In re Brace, 566
B.R. at 19-20; Valli v. Valli (In re Marriage of Valli), 58 Cal. 4th 1396, 1400
(2014). This rule applies not only in marital dissolution proceedings, but
also in other contexts, including bankruptcy. In re Brace, 566 B.R. at 20; see
also In re Obedian, 546 B.R. 409, 422 (Bankr. C.D. Cal. 2016).
The presumption does not apply to property acquired during
5
California Family Code § 760 provides, “[e]xcept as otherwise provided by
statute, all property, real or personal, wherever situated, acquired by a married person
during the marriage while domiciled in this state is community property.”
6
California Evidence Code § 662 provides: “[t]he owner of the legal title to
property is presumed to be the owner of the full beneficial title. This presumption may
be rebutted only by clear and convincing proof.”
8
marriage if the property is: (1) traceable to a separate property source;
(2) acquired by gift or bequest; or (3) earned or accumulated while the
spouses are living separate and apart. Valli, 58 Cal. 4th at 1400. Further,
“the presumption may be rebutted by evidence that the spouses agreed to
recharacterize, or ‘transmute’ the property from community to some other
form of ownership. A transmutation is not valid unless ‘made in writing by
an express declaration that is made, joined in, consented to, or accepted by
the spouse whose interest in the property is adversely affected.’” In re
Brace, 566 B.R. at 18 (quoting California Family Code § 852(a)).
In her opening brief, Ms. Gajiu does not seem to dispute the holdings
of the above-cited cases, but she asserts that those holdings have not been
adopted as controlling law in either California or the Ninth Circuit, citing
Collins v. Wolf, 591 B.R. 752 (S.D. Cal. 2018). But Valli is a California
Supreme Court decision. As such, it is controlling law in California. And
although Brace, which expanded Valli’s holding to the non-dissolution
context, has not been adopted as controlling law in the Ninth Circuit,
Ms. Gajiu’s citation to Collins is misleading. In affirming the bankruptcy
court’s finding that the community presumption applied over the form of
title presumption in the non-dissolution context, the Collins court expressly
rejected the appellants’ argument to the contrary:
At bottom, Appellants ask this Court to do what no California
court has done and hold that [California Evidence Code] § 662
overcomes [California Family Code] § 760 in a non-dissolution
9
context. Because no California court has expressly done so, this
Court declines to hold that § 662 overcomes the § 760
presumption. Other federal courts have reached similar
conclusions.
Id. at 767–68 (citing In re Brace, 566 B.R. at 23; Herrera v. Pons, No.
17-cv-2392-GPC-NLS, 2018 WL 2229369, at *4 (S.D. Cal. May 16, 2018); In re
Obedian, 546 B.R. 409).
In her reply brief, Ms. Gajiu argues that the community property
presumption applies only in dissolution proceedings, citing Hanf v.
Summers (In re Summers), 332 F.3d 1240, 1243 (9th Cir. 2003), Schwaber v.
Reed (In re Reed), 89 B.R. 100, 105 (Bankr. C.D. Cal. 1988), aff’d, 940 F.2d 1317(9th Cir. 1991), and In re Clark, No. 10-23496-RAG, 2012 WL 3597410 (Bankr.
D. Md. Aug. 20, 2012), aff’d sub nom. Clark v. Guttman, No. CCB–12–2673,
2013 WL 812017 (D. Md. March 4, 2013). The Summers court held that
(1) the community property presumption may be overcome by evidence
that spouses purchasing property from a third party took title as joint
tenants, and (2) the California transmutation statutes applied only to
interspousal transactions. Those conclusions have been rejected by the
California Supreme Court. Valli, 58 Cal. 4th at 1405. And Reed and Clark
both involved California statutes that specifically applied to property
division in a dissolution or legal separation context. Thus these cases are
inapposite.
Based on the foregoing, the bankruptcy court did not err in
10
concluding that Trustee had met his burden to show that the Properties
were presumptively community property. The burden then shifted to
Ms. Gajiu to demonstrate that her interest in the Properties was her
separate property.7
B. The bankruptcy court did not err in finding that Ms. Gajiu’s
evidence was insufficient to raise a genuine issue of material fact
regarding her ownership interest.
1. The Moldova Agreement
As noted, the Moldova Agreement was a post-marital property
agreement entered into by Ms. Gajiu and Debtor in September 2008, a copy
of which was attached to Ms. Gajiu’s declaration in support of her
opposition to summary judgment. The agreement provided, in essence,
that any funds received from family members would be the separate
property of the spouse whose relative provided the funds, and that
interests in real property purchased in the future with such funds would be
held “in a strict percentage ratio to the amount received from a relative” as
7
Ms. Gajiu contends that she was prejudiced by the bankruptcy court's refusal at
the November 28 hearing to grant her counsel's oral request to stay its ruling on the
summary judgment motion pending the outcome of the Ninth Circuit appeal of this
Panel’s decision in Brace. She does not elaborate on this assertion, relying instead upon
her argument that she presented sufficient evidence to raise an issue of material fact
regarding the character of ownership of the Properties. In any event, when the stay was
requested, the bankruptcy court had already announced its ruling, which it correctly
found rendered it final under Noli v. Comm’r, 860 F.2d 1521 (9th Cir. 1988), even though
a written order had not yet been entered. Ms. Gajiu points to no authority supporting
the conclusion that the bankruptcy court abused its discretion in refusing to stay the
proceedings at that point.
11
that spouse’s separate property.
The bankruptcy court found that the Moldova Agreement did not
apply to the Alla Property, which had been purchased before the
agreement was executed. Ms. Gajiu does not assign error to this finding. As
for the Cardwell Property, the bankruptcy court found, as discussed below,
that the evidence presented by Ms. Gajiu did not demonstrate that funds
wired from Mr. Kossinov were transferred to Ms. Gajiu or used for the
Cardwell Property down payment.
Moreover, the bankruptcy court found that Trustee was not bound by
the Moldova Agreement because it had not been recorded. Under
California Family Code § 852(b), “[a] transmutation of property is not
effective as to third parties without notice thereof unless recorded.” And
under California Civil Code § 1217, an unrecorded instrument is valid only
between the parties to the instrument and those who have notice of it.
Ms. Gajiu argues that Trustee was bound by the Moldova Agreement
despite the fact that it was unrecorded, for two reasons. First, she contends
that, under § 541, Trustee stepped into Debtor’s shoes when he was
appointed and, as such, is deemed to have had notice of the agreement.
Second, she contends that the agreement was disclosed in pleadings filed in
the bankruptcy case such that Trustee was put on inquiry notice of its
existence.
Although Ms. Gajiu is correct that a bankruptcy trustee succeeds to a
12
debtor’s interests in estate property, including legal claims and defenses,
she does not provide any authority establishing that a debtor’s property
interests include knowledge of an unrecorded document. There is scant
case law on this question outside the context of a trustee’s strong-arm
powers. But in In re Reed, 89 B.R. at 105, the chapter 7 trustee asserted that
proceeds from the sale of debtor’s real property were community property.
The trustee relied upon California Civil Code § 4800.1 (repealed in 1992),
which provided that, for purposes of division of property upon dissolution
or legal separation, property acquired during marriage was presumed to be
community property. The trustee argued that he stepped into the shoes of
the debtor for this purpose, but the bankruptcy court rejected this
contention:
Trustee contends that he should not be treated as a third
party creditor, but rather as Debtor’s successor in interest
pursuant to 11 U.S.C. Section 541(c)(1). As a result, Trustee
argues that he succeeds to Debtor’s rights as a spouse and
therefore can assert the presumption set forth in CC Section
4800.1.
This argument fails, first, because a trustee in a Chapter 7
bankruptcy case succeeds to a debtor’s interest in property only
as a fiduciary to the debtor’s creditors. Therefore, a Chapter 7
trustee is more like a creditor than a spouse. . . .
Id. at 105. See also Osborn v. Reaves (In re Osborn), No. AZ-17-1083-KuFs,
2017 WL 5472554, at *8 (9th Cir. BAP Nov. 9, 2017) (rejecting appellant’s
13
contention that an unrecorded marital property agreement was binding on
the chapter 7 trustee when Arizona law required recordation, noting that
“recording statutes are generally for the purpose of providing constructive
notice to third parties” and to “protect creditors who transact with spouses
that have entered into what would otherwise be secret agreements which
alter the character of the spouses’ marital property from community to
separate.”).
As for the purported inquiry notice, nothing in the Debtor’s original
schedules would have put Trustee on notice of the Moldova Agreement.
Ms. Gajiu points out three post-petition documents that she contends put
Trustee on notice or show that he had notice: (1) her answer filed in the
adversary proceeding in January 2017, in which she asserted as an
affirmative defense that she had separate interests in the Properties; (2) her
opposition to the motion for summary judgment filed in April 2017, in
which she stated that the Properties were subject to a post-marital
agreement; and (3) Trustee’s motion to approve a settlement agreement
filed in June 2017, which mentioned the post-nuptial agreement.
As pointed out by Trustee, the documents at issue were filed well
past the petition date. Ms. Gajiu points to no authority that a trustee’s post-
petition discovery of an unrecorded document affecting real property
suffices to bind him to its terms. Accordingly, Ms. Gajiu has not
demonstrated that the bankruptcy court erred in ruling that the Moldova
14
Agreement was not binding on Trustee.
2. Relatives’ purported gifts
Even without the Moldova Agreement, Ms. Gajiu contends that she
produced evidence sufficient to raise a genuine issue of material fact
regarding whether the Properties were purchased with her separate funds,
i.e., gifts provided by her mother and uncle. The bankruptcy court found to
the contrary, and our independent review of the evidence supports that
finding.
Regarding the Alla Property, Ms. Gajiu filed a declaration stating
“[m]y mother, Tatiana Shakgeldyan, provided $287,000 of the down
payment for the purchase of the Alla Property as a separate property gift to
me.” She attached what she described as “true and correct copies of the
wire and escrow documents” demonstrating that those funds were put into
escrow. Those documents consisted of two pages showing that Ms. Gajiu
wired $287,000 to an escrow on June 4, 2008, but there was no
documentation of where the funds came from or whether the escrow
number on the documents pertained to the Alla Property.8 In short, the
documents did not corroborate Ms. Gajiu’s assertion that her mother gave
her funds for the purchase of the Alla Property, or that they were a
8
Ms. Gajiu also stated in her declaration that she had contributed funds toward
the Alla Property for ongoing maintenance, the majority of the mortgage payments, and
remodeling costs, but she provided no further detail or documentary evidence to
support that assertion.
15
“separate property gift.” The bankruptcy court found that Ms. Gajiu’s
declaration was uncorroborated, self-serving, and conclusory and thus
insufficient to create a genuine issue of material fact.
A trial court may not disregard a declaration at the summary
judgment stage solely because it is uncorroborated and self-serving. S.E.C.
v. Phan, 500 F.3d 895, 909 (9th Cir. 2007). But bare assertions of a legal
conclusion, unsupported by specific facts, are insufficient to raise a genuine
issue of material fact. Bader v. N. Line Layers, Inc., 503 F.3d 813, 820 n.4 (9th
Cir. 2007). Ms. Gajiu’s statement that her mother provided her funds for the
Alla Property as a “separate property gift” is a legal conclusion
unsupported by specific facts. As such, the bankruptcy court did not err in
finding that Ms. Gajiu’s declaration did not raise a genuine issue of
material fact. See Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1059 n.5,
1061 (9th Cir. 2002) (holding that the district court properly disregarded the
declaration that included facts beyond the declarant’s personal knowledge
and did not indicate how she knew the facts to be true); F.T.C. v. Publ'g
Clearing House, Inc., 104 F.3d 1168, 1171 (9th Cir. 1997) (“A conclusory,
self-serving affidavit, lacking detailed facts and any supporting evidence, is
insufficient to create a genuine issue of material fact.”).
As for the Cardwell Property, Ms. Gajiu testified in her declaration
that Mr. Kossinov had provided $444,940 of the down payment for that
property “as a separate property gift” to her. She attached “true and
16
correct” copies of bank statements, but those statements did not identify
the bank, account number, or account holder. The statements did show two
incoming wires from Mr. Kossinov, one on January 2, 2013 for $164,970,
and one on September 13, 2013 for $279,970. As the bankruptcy court
found, however, there was no corroborating evidence that any of those
funds were transferred to Ms. Gajiu, deposited into an account in her
name, or used to buy the Cardwell Property.
Moreover, Ms. Gajiu’s statement that the funds contributed by
Mr. Kossinov were a separate property gift was contradicted by Trustee’s
evidence. Trustee produced a copy of a deed of trust in favor of
Mr. Kossinov, which was executed by Debtor and Ms. Gajiu in December
2015 to secure a loan of $500,000. He also produced Mr. Kossinov’s
declaration filed in the bankruptcy court in February 2016 in which
Mr. Kossinov stated that he had loaned Debtor and Ms. Gajiu $500,000 to
buy the Cardwell Property. The court found that Ms. Gajiu’s assertion that
the funds received from Mr. Kossinov were a gift was “blatantly
contradicted by the record” and thus the court could disregard it. See Scott
v. Harris, 550 U.S. 372, 380 (2007) (“When opposing parties tell two
different stories, one of which is blatantly contradicted by the record, so
that no reasonable jury could believe it, a court should not adopt that
version of the facts for purposes of ruling on a motion for summary
judgment.”). Based on the foregoing, the bankruptcy court did not err in
17
concluding that Ms. Gajiu’s evidence did not raise a genuine issue of
material fact for trial.
CONCLUSION
For all of these reasons, we AFFIRM.
18