Mychelle Moxley v. Michael Perry

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
NOV 03 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
In re MICHAEL W. PERRY, No. 14-60060
Debtor, BAP No. 13-1438
__________________________________ BAP, Phoenix Bankruptcy Court
MYCHELLE MOXLEY,
MEMORANDUM*
Appellant,
v.
MICHAEL W. PERRY,
Appellee.
Appeal from the Ninth Circuit Bankruptcy Appellate Panel
Taylor, Pappas, and Kirscher, Bankruptcy Judges, Presiding
Submitted October 20, 2016**
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: CALLAHAN and HURWITZ, Circuit Judges, and MOLLOY, District
Judge.***
Mychelle Moxley appeals the Bankruptcy Appellate Panel’s (“BAP”)
affirmance of the bankruptcy court’s judgment denying reconsideration of its
dismissal of Moxley’s adversary action. That action challenged the debtor’s
discharge under various provisions of the Bankruptcy Code, 11 U.S.C. § 727(a).
We have jurisdiction pursuant to 28 U.S.C. § 158(d). We review BAP decisions de
novo, applying the same standard of review that the BAP applied to the bankruptcy
court’s ruling. Boyajian v. New Falls Corp. (In re Boyajian), 564 F.3d 1088, 1090
(9th Cir. 2009). We affirm the decision of the bankruptcy court, albeit on
somewhat different grounds than those offered by the BAP.
1. Moxley’s notice of appeal did not put the debtor, Perry, on notice
of—and thus denied him the opportunity to respond to—her arguments regarding
vacation of a default judgment and denial of summary judgment. Le v. Astrue, 558
F.3d 1019, 1022–23 (9th Cir. 2009). But, Moxley’s intent to appeal the
bankruptcy court’s denial of her second motion for reconsideration and leave to
amend can be fairly inferred and Perry had an opportunity to respond to those
issues. The BAP therefore erred in failing to address leave to amend. Id.
***
The Honorable Donald W. Molloy, District Judge for the U.S. District
Court, District of Montana, sitting by designation.
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2. We review the bankruptcy court’s denial of leave to amend for abuse of
discretion.1 Ditto v. McCurdy, 510 F.3d 1070, 1079 (9th Cir. 2007). We first
“determine de novo whether the [bankruptcy] court identified the correct legal rule
to apply to the relief requested.” United States v. Hinkson, 585 F.3d 1247,
1261–62 (9th Cir. 2009) (en banc). If so, we apply the clearly erroneous standard
to determine whether its factual findings and its application of the facts to the
relevant law were “illogical, implausible, or without support in inferences that may
be drawn from the facts in the record.” Id. at 1263.
3. Requests for leave to amend are governed by Bankruptcy Rule 7015,
which incorporates by reference Federal Rule of Civil Procedure 15. Fed. R.
Bankr. P. 7015. Under Rule 15, “courts should determine whether to allow leave
to amend by ascertaining the presence of four factors: bad faith, undue delay,
prejudice to the opposing party, and futility.” Tracht Gut, LLC v. L.A. Cty.
Treasurer & Tax Collector (In re Tracht Gut, LLC), ___ F.3d ___, No. 14-60007,
2016 WL 4698300, at *4 (9th Cir. Sept. 8, 2016). The bankruptcy court instead
incorrectly assessed Moxley’s request in light of the doctrine of laches. See Staffer
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Moxley waived her challenge to the bankruptcy court’s reconsideration ruling by
failing to raise it in her opening brief to the BAP, see Burnett v. Resurgent Capital Servs. (In re
Burnett), 435 F.3d 971, 976–77 (9th Cir. 2006) (issues not presented to BAP are waived unless
there are “exceptional circumstances”), and failing to argue it on appeal, Christian Legal Soc’y
Chapter of Univ. of Cal. v. Wu, 626 F.3d 483, 485 (9th Cir. 2010).
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v. Predovich (In re Staffer), 306 F.3d 967, 972–73 (9th Cir. 2002) (discussing
laches as an equitable doctrine and affirmative defense).
4. Nonetheless, we “may affirm the lower court on any ground fairly
supported by the record.” Leavitt v. Soto (In re Leavitt), 171 F.3d 1219, 1223 (9th
Cir. 1999). The bankruptcy court provided a clear record of its reasons for denying
leave to amend. See DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186–87 (9th
Cir. 1987) (discussing the need for written findings or record indicating reasons for
denial of leave to amend). These factual findings support the denial of Moxley’s
request for leave under Rule 15. Delay alone is an insufficient ground to deny
leave to amend, but it may weigh against granting leave where there is prejudice or
bad faith, United States v. Webb, 655 F.2d 977, 980 (9th Cir. 1981), if a party
attempts to introduce new legal theories at a late stage in the case,
AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 953 (9th Cir. 2006),
the facts were available to the requesting party when it filed its prior complaint and
the request is merely a “dilatory tactic,” Chodos v. W. Publ’g Co., 292 F.3d 992,
1003 (9th Cir. 2002), or the requesting party fails to justify its reason for delay,
Jackson v. Bank of Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990).
5. Moxley did not request leave to amend until July 2013, nearly two years
after her adversary action was filed and more than four years after she was notified
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of the bankruptcy case and filed her proof of claim. While Moxley had not
previously sought leave to amend, she knew of the facts giving rise to her amended
claims from the inception of her involvement in the bankruptcy case in 2009.
Moxley waited, however, until the court indicated it was going to dismiss her
existing claims to seek leave to amend. The court found that her “delays and
requests for further amendments and new causes of action . . . have reached what
could well be an unreasonable level.” The court also found that Perry “is trying to
move on with his life,” and “has apparently got a military assignment in another
jurisdiction.” It further stated that it was prejudicial for Perry to have to wait five
years to receive “a determination over whether or not a particular claim is going to
be discharged or for that matter whether he is going to be granted his discharge.”
Moxley’s request for leave to amend therefore ran contrary to the rule that “[a]t
some point . . . a party may not respond to an adverse ruling by claiming that
another theory not previously advanced provides a possible [ground] for relief and
should be considered.” Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1161
(9th Cir. 1989) (quoting Mir v. Fosburg, 646 F.2d 342, 347 (9th Cir. 1980)). The
record shows not only undue delay and prejudice to Perry, but also a dilatory
motive by Moxley. The bankruptcy court’s denial of leave to amend is affirmed.
AFFIRMED.
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