FILED FEB 21 2020 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY.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-19-1077-LGTa

SHMUEL ERDE, Bk. No. 2:18-bk-20200-VZ

Debtor.

SHMUEL ERDE,

Appellant,

v. MEMORANDUM*

LOS ANGELES COUNTY TREASURER & TAX COLLECTOR; CAROLYN A. DYE,

Appellees.

Submitted Without Argument on January 30, 2020

Filed – February 21, 2020

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 Vincent P. Zurzolo, Bankruptcy Judge, Presiding

Appearances: Appellant Shmuel Erde, pro se on brief; Appellee Carolyn A. Dye, pro se on brief.

Before: LAFFERTY, GAN, and TAYLOR, Bankruptcy Judges.

INTRODUCTION

Debtor Shmuel Erde appeals the bankruptcy court’s order denying

his fourth attempt to vacate or amend the order overruling his objection to

the proof of claim filed in his 2018 chapter 111 case by Appellee Los

Angeles County Treasurer and Tax Collector (the “County”). The claim

was for property taxes owed for tax year 2011 on real property that was

sold by the chapter 7 trustee during Mr. Erde’s previous bankruptcy case.

Mr. Erde contends that he does not owe the taxes because he no longer

owns the property; he also asserts that the chapter 7 trustee was

responsible to pay those taxes as part of the sale.

The bankruptcy court never reached the merits of Mr. Erde’s

objection. It overruled the objection for improper service and failure to

1 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code,

, all “Rule” references are to the Federal Rules of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of Civil Procedure. “LBR” references are to the Local Bankruptcy Rules for the Central District of California.

2 support the objection with admissible evidence. Mr. Erde subsequently

filed four timely motions seeking to vacate or amend the order overruling

his objection. The court denied all four motions on procedural grounds and

because Mr. Erde had failed to establish grounds for reconsideration under

Civil Rule 59, applicable in bankruptcy via Rule 9023.

Although Mr. Erde’s bankruptcy case was dismissed in February

2019, this appeal is not moot. But Mr. Erde has not shown that the

bankruptcy court abused its discretion in overruling his objection to the

County’s claim or in denying his motions to vacate or amend. We therefore

AFFIRM.

FACTUAL BACKGROUND

The facts underlying this appeal reach back to Mr. Erde’s 2009

chapter 11 bankruptcy case.2 That case was converted to chapter 7 in

January 2011, and Appellee Carolyn A. Dye (“Trustee”) was appointed

trustee. In November 2011, the bankruptcy court granted Trustee’s motion

to sell Mr. Erde’s real property located on Roxbury Drive in Beverly Hills,

California (the “Property”). The order approving the sale provided that

two liens in favor of Los Angeles County in the amounts of $33,209.27 and

2 The 2009 filing (No. 2:09-bk-25942-DS) was Mr. Erde’s fourth bankruptcy case. Mr. Erde has a long history of litigation and has been declared a vexatious litigant in both state and federal courts, including the bankruptcy court in this case. For a detailed recitation of that history, see Erde v. Dye (In re Erde), BAP No. CC-19-1043-LSTa,

(9th Cir. BAP Nov. 15, 2019).

3 $14,040.97, representing property taxes owed for 2010-2011 and 2011-2012,

respectively, would be paid from escrow; the order also authorized Trustee

to pay any current property taxes.3 The Property was sold, known claims

were paid, Trustee submitted her final report, Mr. Erde received a

discharge, and the case was closed in November 2013.

In August 2018, Mr. Erde filed a chapter 11 petition, initiating the

case that underlies this appeal. Shortly thereafter, the County filed a proof

of claim for property taxes of $6,556.69 secured by a lien against the

Property. Attached to the proof of claim is a property tax bill indicating

that it is a correction for the 2010-11 assessment year pursuant to

The bill contains the notation: “Sale or disposal of this

property after January 1, 2011 does not relieve the assessee of this tax.”

Also attached to the claim is a copy of a certificate of tax lien referencing

the Property, bearing a stamp showing it was recorded in the Los Angeles

County Recorder’s Office on August 10, 2012.5

3 We have exercised our discretion to review the bankruptcy court’s docket and papers in the underlying bankruptcy cases and relevant adversary proceeding. See Woods & Erickson, LLP v. Leonard (In re AVI, Inc.),

, 725 n.2 (9th Cir. BAP 2008). 4 That statute provides, in relevant part: “If any property belonging on the local roll has escaped assessment, the assessor shall assess the property on discovery at its value on the lien date for the year for which it escaped assessment.” 5 The bankruptcy court never adjudicated whether Mr. Erde was liable for the property taxes at issue. The facts regarding the proof of claim are included solely for (continued...)

4 Shortly after filing his 2018 case, Mr. Erde filed an adversary

proceeding against Trustee. In his first amended complaint, he alleged that

Trustee had breached her duties as chapter 7 trustee in the 2009 case

because she had failed to pay all of the property taxes on the Property. He

requested that the court enter judgment compelling Trustee to pay the

County’s claim. The bankruptcy court granted Trustee’s Civil Rule 12(b)(6)

motion (applicable via Rule 7012) and dismissed the adversary proceeding

with prejudice. The court found that the first amended complaint failed to

comply with Civil Rule 8(a) (applicable via Rule 7008) by: (1) failing to cite

any legal authority that Trustee was required to pay a property tax bill for

taxes incurred post-petition when that bill was not filed in the bankruptcy

case or otherwise brought to Trustee’s attention; (2) failing to set forth the

legal impact of Mr. Erde residing in the Property for up to three months of

the 2011-12 tax year; (3) failing to set forth the legal impact of Mr. Erde’s

argument in his opposition to Trustee’s motion to turn over possession of

the Property that the Property was not property of the estate; and (4) failing

to allege that the order granting the motion to sell the Property indicated

the sale was free and clear and that the buyer took subject to taxes not yet

due and owing. In the same order, the bankruptcy court found Mr. Erde to

be a vexatious litigant and barred him from filing any further claims

5 (...continued) background.

5 against Trustee or requests for relief related to the claims or allegations

made in the adversary proceeding.

In the meantime, in October 2018, Mr. Erde filed an objection to the

County’s claim. As in the adversary proceeding, he alleged that, in his 2009

bankruptcy case, Trustee had failed to pay off the property taxes from the

sale of the Property and argued that Trustee was obligated to pay the

County’s claim. No declaration accompanied the objection. The County did

not file a response. The bankruptcy court entered an order overruling the

objection after a hearing on November 27, 2018. The order states that it is

based on the findings made at the hearing, but no hearing transcript

appears in the record or on the bankruptcy court docket.

Two days later, Mr. Erde filed a Motion for Findings of Fact and

Conclusions of Law regarding the order overruling the claim objection (the

“First Motion to Amend”). Substantively, the motion requested that the

court amend its ruling in accordance with Mr. Erde’s proposed findings

and conclusions, which included a conclusion of law that property taxes

cannot be enforced as a personal liability against the owner. Mr. Erde

included a declaration attesting to some of the facts in the motion and

included a proof of service showing service by mail on the County’s tax

service clerk who had signed the proof of claim at the designated P.O. Box

for the County.

The bankruptcy court entered an order denying the First Motion to

6 Amend. In that order, the court recounted the findings it had made at the

November 27, 2018 hearing. First, it found that the claim objection had not

been served in accordance with Rule 7004, as required for contested

matters under Rule 9014(b) pursuant to LBR 3007-1(b).6 Second, it found

that the objection was not supported by admissible evidence, as required

under LBR 3007-1(c).

One week later, Mr. Erde filed a Second Motion for Findings of Fact

and Conclusions of Law (the “Second Motion to Amend”). The Second

Motion to Amend was substantively identical to the previous one. Again,

Mr. Erde included a supporting declaration and a proof of service showing

that the motion had been served by first class mail to the County’s tax

service clerk.

The bankruptcy court denied Mr. Erde’s Second Motion to Amend

because: (1) the motion requested relief previously sought in the First

Motion to Amend, but it did not comply with LBR 9013-1(l)7; (2) Mr. Erde

6 LBR 3007-1 provides that a claim objection is a contested matter under Rule 9014 and “must be served on the claimant at the address on the proof of claim and at such other addresses and upon such parties as may be required by FRBP 7004 and other applicable rules.” (Emphasis added). 7 That rule provides that when relief is sought that has previously been denied, the movant must present with the subsequent motion a declaration setting forth the material facts and circumstances surrounding each prior motion, including:

(1) The date of the prior motion; (continued...)

7 had not cited Rules 9023 or 9024 nor established cause to amend under

either rule; (3) the Second Motion to Amend was served 20 days before the

hearing date, one day short of the 21-day period required under LBR 9013-

1(d); and (4) the motion was not served in accordance with Rules 9014 and

7004.

Exactly two weeks later, Mr. Erde filed a Motion for Declaratory

Judgment (“Third Motion to Amend”), in which he requested essentially

the same relief sought in his prior motions to amend, but presented the

motion as a request for a declaration that he does not owe any property

taxes to the County. The bankruptcy court denied the Third Motion to

Amend, again for failure to comply with LBR 9013-1(l), failure to properly

serve the motion on the County, and failure to cite or establish cause to

amend under Rules 9023 or 9024. Additionally, the court noted that

Mr. Erde had not cited any authority for seeking a declaratory judgment by

way of a contested matter under Rule 9014 rather than an adversary

7 (...continued) (2) The identity of the judge to whom the prior motion was made; (3) The ruling, decision or order on the prior motion; (4) The new or different facts and circumstances claimed to exist, which either did not exist or were not shown upon the prior motion; and (5) The new or different law or legal precedent claimed to exist, which either did not exist or were not shown upon the prior motion.

The rule further provides that noncompliance with this requirement “is grounds for the court to set aside any order or ruling made on the subsequent motion, and subjects the offending party or attorney to sanctions.”

8 proceeding, as required under Rule 7001(9).

On February 21, 2019, the bankruptcy court entered an order

dismissing Mr. Erde’s case and declaring him a vexatious litigant.8 On the

same day, Mr. Erde filed a “Motion to Amend an Order Pursuant to FRBP

9023” (“Fourth Motion to Amend”). This time around, he cited Rule 9023

but did not state specific grounds under that rule, instead simply repeating

his previous argument that he was not liable for the unpaid taxes.

The bankruptcy court denied Mr. Erde’s Fourth Motion to Amend.

Initially, the court observed that the dismissal of the case rendered all

pending motions moot. In addition, the court found that the motion again

did not comply with LBR 9013-1(l). Additionally, the court explained that

Mr. Erde had not established cause to grant the motion. The court cited its

order dismissing the adversary proceeding against Trustee, noting that

Mr. Erde had still not addressed the deficiencies described in that order. In

addition to denying the motion, the order prohibits Mr. Erde from filing,

without court permission, any further documents attempting to change the

order overruling his objection to claim.

Mr. Erde timely appealed.

8 Mr. Erde appealed the dismissal and vexatious litigant ruling to this Panel, which affirmed. Erde v. Dye (In re Erde), BAP No. CC-19-1043-LSTa,

(9th Cir. BAP Nov. 15, 2019). Mr. Erde appealed that decision to the Ninth Circuit Court of Appeals on November 27, 2019.

9 JURISDICTION

The bankruptcy court had jurisdiction under

and

157(b)(1) and (b)(2)(A) and (B). We have jurisdiction under

.

ISSUES

Whether the bankruptcy court abused its discretion in overruling

Mr. Erde’s objection to the County’s proof of claim on procedural grounds.

Whether the bankruptcy court abused its discretion in denying

Mr. Erde’s motions to amend.

STANDARDS OF REVIEW

The bankruptcy court overruled Mr. Erde’s claim objection for failure

to comply with local rules. The bankruptcy court’s application of a local

rule is reviewed for an abuse of discretion. Steinacher v. Rojas (In re

Steinacher),

(9th Cir. BAP 2002). We also review the

bankruptcy court’s denial of a motion to alter or amend a judgment for

abuse of discretion. Clinton v. Deutsche Bank Nat’l Trust Co. (In re Clinton),

(9th Cir. BAP 2011) (citing Ta Chong Bank Ltd. v. Hitachi High

Techs. Am., Inc.,

(9th Cir. 2010)).

Under the abuse of discretion standard, we first “determine de novo

whether the [bankruptcy] court identified the correct legal rule to apply to

the relief requested.” United States v. Hinkson,

(9th Cir.

2009)(en banc). If the bankruptcy court identified the correct legal rule, we

then determine under the clearly erroneous standard whether its factual

10 findings and its application of the facts to the relevant law were:

“(1) illogical, (2) implausible, or (3) without support in inferences that may

be drawn from the facts in the record.”

(internal quotation marks

omitted).

DISCUSSION

A. Scope of Appeal

Although Mr. Erde’s notice of appeal references and attaches only the

order denying the Fourth Motion to Amend, Mr. Erde argues in his

opening brief that the bankruptcy court erred in overruling his objection to

the County’s claim and in denying the subsequent motions to amend. All

of his motions to amend were filed within fourteen days of entry of the

previous orders. Additionally, Appellee Dye has fully briefed the issues

raised in the claim objection and the motions to amend. As such, the Panel

has discretion to review the orders denying the motions to amend as well

as the order overruling the claim objection. See Wall Street Plaza, LLC v. JSJF

Corp. (In re JSJF Corp.),

(9th Cir. BAP 2006), aff’d and

remanded,

(9th Cir. 2008) (noting that although 9th Cir.

BAP Rule 8001(a)-1 [now Rule 8003-1] requires a party to attach copies of

the orders appealed from, the Panel may depart from the rule absent

prejudice).

B. This appeal is not moot.

Trustee argues that this appeal is moot if the Panel affirms the

11 dismissal of Mr. Erde’s 2018 bankruptcy case. Although the Panel has

affirmed the order of dismissal, Mr. Erde has appealed that decision to the

Ninth Circuit Court of Appeals, which has not yet issued a disposition. We

thus have jurisdiction to consider this appeal. Cf. Castaic Partners II, LLC, v.

Daca–Castaic, LLC (In re Castaic Partners II, LLC),

(9th

Cir. 2016) (noting that when the dismissal of a bankruptcy case becomes

final, there is likely no longer any case or controversy with respect to issues

directly involving the reorganization of the estate).

C. The bankruptcy court did not abuse its discretion in overruling Mr. Erde’s claim objection on procedural grounds.

The bankruptcy court overruled Mr. Erde’s objection to the County’s

claim because, in addition to failing to serve the objection in accordance

with Rule 7004, Mr. Erde failed to support his objection with any

admissible evidence. On appeal, Mr. Erde’s sole argument with respect to

the order overruling the claim objection is that the order did not contain

any findings. But the court apparently made findings at the November 27,

2018 hearing. Mr. Erde failed to provide a transcript of that hearing on

appeal. As a result, he is estopped from asserting error in this regard. See

Kritt v. Kritt (In re Kritt),

(9th Cir. BAP 1995) (appellant

bears the responsibility to provide an adequate record, including

transcripts). Further, the court later provided written findings in its order

denying Mr. Erde’s First Motion to Amend, and Mr. Erde had more than

12 ample opportunity to remedy the procedural deficiencies cited by the

court. He never did so.9 Mr. Erde has not shown that the bankruptcy court

abused its discretion in overruling his objection.

D. The bankruptcy court did not abuse its discretion in denying Mr. Erde’s First Motion to Amend.

Mr. Erde’s First Motion to Amend was filed within fourteen days of

entry of the order overruling his claim objection. As such, we review that

motion as one for relief from judgment under Rule 9023. Heritage Pac. Fin.,

LLC v. Montano (In re Montano),

(9th Cir. BAP 2013). Rule

9023 incorporates Civil Rule 59(e), and the same standards apply to both

rules.

To justify relief under Rule 9023, the movant must show:

“(a) newly discovered evidence, (b) the court committed clear error or

made an initial decision that was manifestly unjust, or (c) an intervening

change in controlling law.”

(citing Duarte v. Bardales,

(9th Cir. 2008)).

Mr. Erde’s First Motion to Amend, styled as a motion for findings

and conclusions, did not assert any grounds for relief under Rule 9023.

Substantively, the motion requested that the court amend its ruling in

accordance with Mr. Erde’s proposed findings and conclusions, including a

9 Mr. Erde never complied with Rule 7004 in serving the objection to claim or the subsequent motions to amend. Although he served the clerk who executed the proof of claim by first class mail to the designated post office box, there is no evidence that he served the County’s designated person or office for service of process as required under Rule 7004(b)(6).

13 conclusion of law that property taxes cannot be enforced as a personal

liability against a property owner. Mr. Erde did not address the service

issue, nor did he provide any newly discovered evidence or show any

intervening change in law, clear error, or manifest injustice. On appeal,

Mr. Erde argues that the failure to comply with Rule 7004 does not

automatically mandate “dismissal” if the party had actual notice, suffers no

prejudice from a technical defect in service, and there is a justifiable excuse

for failure to serve properly, citing Borzeka v. Heckler,

(9th

Cir. 1984). But he points to no evidence in the record that all those

requirements were met.

In addition, Mr. Erde argues that the bankruptcy court erred in

finding that the objection was not supported by admissible evidence

because he supported the First Motion to Amend with a declaration. But

the court’s finding regarding the lack of admissible evidence pertained to

the original objection. In any event, Mr. Erde’s declaration attached to the

First Motion to Amend did not attest to facts affecting the validity of the

County’s claim. That declaration states that he was the debtor in the 2009

bankruptcy case that was converted to chapter 7 in January 2011, and

continues:

19.10 As a result, I was no longer Debtor-In-Possession in my

10 The declaration consists of nine numbered statements. For reasons that are not (continued...)

14 2009 Bankruptcy Case, and had no control over my Debtor’s Estate.

20. My Debtor’s Estate included my Home.

21. As part of liquidating my 2009 Debtor’s Estate, my Home was sold.

22. I was led to believe that the proceeds from the sale of my Home were used to settle the loans and property taxes secured by the Home.

23. I had no control or say in determining how the funds generated from the sale of my Home as part of liquidating my 2009 Debtor’s Estate were disbursed.

In short, Mr. Erde’s First Motion to Amend did not establish grounds for

relief under Rule 9023.

E. The bankruptcy court did not abuse its discretion in denying Mr. Erde’s Second Motion to Amend.

Mr. Erde’s Second Motion to Amend was substantively identical to

the previous motion. The bankruptcy court denied it because Mr. Erde

failed to provide the declaration required under LBR 9013-1(l) when relief

is sought that has previously been denied, for improper notice and service,

and because Mr. Erde had not cited Rules 9023 or 9024 nor established

cause to amend under either rule. On appeal, Mr. Erde argues that his

10 (...continued) clear, the numbering of statements in the declaration jumps from 3 to 18.

15 Second Motion to Amend did not request the same relief sought in the First

Motion to Amend and, in any event, LBR 9013-1(l) does not require denial

of a motion that does not comply with the rule. While this latter point is

correct, the bankruptcy court was well within its discretion to deny the

motion on that ground. Moreover, despite Mr. Erde’s protestations to the

contrary, the relief requested (a ruling that Mr. Erde is not personally liable

for the subject property taxes), although worded differently, was

substantively identical to that sought in the First Motion to Amend and the

claim objection. Mr. Erde makes the same meritless arguments regarding

service as he did with respect to the First Motion to Amend, and he does

not explain how the Second Motion to Amend established grounds for

relief under Rule 9023. Again, Mr. Erde has not shown that the bankruptcy

court abused its discretion in denying the Second Motion to Amend.

F. The bankruptcy court did not abuse its discretion in denying the Third Motion to Amend.

Mr. Erde’s Third Motion to Amend, which he styled as a Motion for

Declaratory Judgment (“Third Motion to Amend”) sought essentially the

same relief as in his prior motions to amend: a declaration that he does not

owe any property taxes to the County. The bankruptcy court denied the

Third Motion to Amend for the same reasons it denied the Second, in

addition noting that an adversary proceeding is required to obtain

declaratory relief. Although Mr. Erde’s brief is difficult to decipher, he does

16 not appear to present any unique arguments with respect to the denial of

this motion, and our conclusion is the same: the bankruptcy court did not

abuse its discretion in denying the Third Motion to Amend.

G. The bankruptcy court did not abuse its discretion in denying the Fourth Motion to Amend.

Mr. Erde’s Fourth Motion to Amend cited Rule 9023 but did not

include any specific grounds for relief under that rule, instead simply

repeating the argument that he is not liable for the subject taxes. The

bankruptcy court again denied the motion for failure to comply with LBR

9013-1(l). The court also recounted the reasons for dismissal of the

adversary proceeding against Trustee, noting that Mr. Erde had still not

addressed the deficiencies described in that order. Again, Mr. Erde simply

repeats the same arguments he made regarding the previous motions to

amend. Again, these arguments are without merit. Mr. Erde repeatedly

failed to comply with applicable procedural rules and, more importantly,

he never provided any relevant admissible evidence to support his

objection to the County’s claim.11 His arguments on appeal do not convince

us that the bankruptcy court abused its discretion in denying relief on that

11 The declarations filed in support of the Second, Third, and Fourth Motions to Amend were essentially the same as those filed with the First, except that Mr. Erde added conclusions of law and argument in the later declarations, which do not constitute admissible evidence. See Int’l Ass’n of Firefighters, Local 1186 v. City of Vallejo (In re City of Vallejo),

(9th Cir. BAP 2009) (noting that legal conclusions are generally inadmissible).

17 basis.

CONCLUSION

Mr. Erde has not demonstrated that the bankruptcy court abused its

discretion in overruling his objection to the County’s claim on procedural

grounds. Nor has he shown that the bankruptcy court abused its discretion

in denying his four subsequent motions to amend. We therefore AFFIRM.

18