in re: charlene gruntz, 9th cir. bap (2012)

7/25/2019 In re: Charlene Gruntz, 9th Cir. BAP (2012)

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*Thi s di sposi t i on i s not appr opr i at e f or publ i cat i on.Al t hough i t may be ci t ed f or what ever per suasi ve val ue i t mayhave ( see Fed. R. App. P. 32. 1) , i t has no pr ecedent i al val ue.See 9t h Ci r . BAP Rul e 8013- 1.

**Hon. Laur a S. Tayl or , Uni t ed St at es Bankrupt cy J udge f ort he Sout her n Di st r i ct of Cal i f or ni a, si t t i ng by desi gnat i on.

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

I n r e: ) BAP No. CC- 11- 1483- MkHTa )

CHARLENE GRUNTZ, ) Bk. No. RS 08- 18585- MJ )

Debt or . )_______________________________)

)ROBERT GRUNTZ, )

)Appel l ant , )

)

v. ) MEMORANDUM*

)P. J . ZI MMERMAN, Chapter 7 )Tr ust ee; UNI TED STATES TRUSTEE, )

)Appel l ees. )

_______________________________)

Ar gued and Submi t t ed on Sept ember 21, 2012at Pasadena, Cal i f or ni a

Fi l ed Oct ober 15, 2012

Appeal f r om t he Uni t ed St at es Bankrupt cy Cour tf or t he Cent r al Di str i ct of Cal i f or ni a

Honor abl e Mer edi t h A. J ur y, Bankrupt cy J udge, Pr esi di ng

Appear ances: Appel l ant Rober t Gr unt z ar gued on hi s own behal f ;Appel l ee P. J . Zi mmerman argued on her own behal f .

Bef or e: MARKELL, HOLLOWELL and TAYLOR, ** Bankr upt cy J udges.

FILED

OCT 15 2012

SUSAN M SPRAUL, CLERKU.S. BKCY. APP. PANELOF THE NINTH CIRCUIT


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1Because some of t he key pl ayers i n t hi s appeal shar e t hesame sur name, we ref er t o themby t hei r f i r st name f or ease ofr ef er ence. No di sr espect i s i nt ended.

2Some of t he f act s we r el y upon are dr awn f r om document st hat t he par t i es have pr ovi ded t o us i n t hei r excer pt s of r ecor d.But many ot her f act s ar e dr awn f r om t he bankrupt cy cour t sel ect r oni c docket and t he i maged document s at t ached t hereto. Wemay take j udi ci al not i ce of t he f i l i ng and cont ent s of t hesei t ems. See At wood v. Chase Manhat t an Mor t g. Co. ( I n r e At wood) ,

293 B. R. 227, 233 n. 9 ( 9t h Ci r . BAP 2003) ( ci t i ng O Rour ke v.Seaboar d Sur . Co. ( I n r e E. R. Feger t , I nc. ) , 887 F. 2d 955, 957- 58( 9t h Ci r . 1989) ) .

3Unl ess speci f i ed ot her wi se, al l chapt er and sect i onr ef er ences are t o t he Bankrupt cy Code, 11 U. S. C. 101- 1532, andal l Rul e r ef er ences ar e t o t he Feder al Rul es of Bankrupt cyPr ocedur e, Rul es 1001- 9037. Al l Ci vi l Rul e ref er ences ar e t ot he Feder al Rul es of Ci vi l Pr ocedur e.

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INTRODUCTION

Rober t Gr unt z ( Rober t ) 1 appeal s f r om an or der gr ant i ng t he

mot i on of chapt er 7 t r ust ee P. J . Zi mmer man ( Trust ee) t o

compensat e her dul y- empl oyed f i el d agent J ack Pope ( Pope) .Rober t al so appeal s f r om an order denyi ng a mot i on f or

r econsi derat i on of t he compensat i on or der . We AFFI RM bot h

orders.

FACTS2

Thi s appeal ar i ses f r om t he bankrupt cy case of Rober t s

f or mer wi f e Char l ene Gr unt z ( Char l ene) . Rober t and Char l ene

f i l ed f or di vor ce i n 2004. Char l ene f i l ed her chapt er 73

bankr upt cy case on J ul y 14, 2008, and t he Tr ust ee was appoi nt ed

t o serve as chapt er 7 t r ust ee. At t he t i me of Char l ene s

bankrupt cy f i l i ng, Rober t s and Char l ene s di vor ce pr oceedi ngs

wer e st i l l pendi ng. Rober t has admi t t ed t hat no f i nal pr oper t y

di vi si on had been made as of t hat t i me.


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I n her Schedul es, Char l ene cl ai med owner shi p of t hr ee

par cel s of r eal pr oper t y: ( 1) a r anch l ocat ed on Ki r by St r eet i n

San J aci nt o, Cal i f or ni a ( Ki r by Ranch) , ( 2) a r esi dence l ocat ed

on Eat on Avenue i n Hemet , Cal i f or ni a ( Eat on Resi dence) , and( 3) a r esi dence l ocat ed on J ef f r ey Ci r cl e i n Hemet , Cal i f or ni a

( J ef f r ey Ci r cl e Resi dence) .

Char l ene s schedul es suggest ed t hat each parcel mi ght have

some val ue t o t he est at e, but ul t i mat el y the Tr ust ee det er mi ned

t hat each parcel was bur densome or of no val ue to t he est ate.

Accor di ngl y, she obt ai ned aut hor i zat i on t o abandon t hem.

Even t hough t he Tr ust ee no l onger cl ai ms any i nt er est i n

t hese t hr ee par cel s, t he bankrupt cy est at e s pr evi ousl y- cl ai med

i nt er est i n t wo of t hese thr ee par cel s t he Ki r by Ranch and t he

J ef f r ey Ci r cl e Resi dence i s cent r al t o our r esol ut i on of t hi s

appeal . We wi l l di scuss each of t hese t wo par cel s i n t ur n.

1. Kirby Ranch

Shor t l y af t er Char l ene s bankrupt cy f i l i ng, i n August 2008,t he Tr ust ee f i l ed an emergency mot i on i n t he bankr upt cy cour t

seeki ng aut hor i zat i on t o t ake i mmedi at e act i on concer ni ng t he

Ki r by Ranch. As set f or t h i n t he emer gency mot i on, t he Tr ust ee

and her associ at es had conduct ed a pr el i mi nar y i nvest i gat i on of

t he Ki r by Ranch, whi ch r eveal ed t he f ol l owi ng:

Char l ene was t he t i t l e hol der of r ecor d of t he Ki r by Ranch;

Not hi ng i n Char l ene s Schedul es or i n her St at ement of

Fi nanci al Af f ai r s i ndi cat ed t hat she was at t he t i me r unni ng

any busi ness l ocat ed on t he Ki r by Ranch;

A physi cal i nspect i on of t he Ki r by Ranch i ndi cat ed t hat

someone was boar di ng r oughl y ei ght y horses on t he pr oper t y;


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A woman at t he pr oper t y cl ai med t hat she and her husband

managed a horse boardi ng busi ness on t he pr oper t y f or

someone by t he name of Bob;

The physi cal i nspecti on al so suggest ed t hat t her e wasi nsuf f i ci ent f ood and shel t er on t he pr emi ses f or ei ght y

hor ses;

I n t he pendi ng st at e cour t di ssol ut i on pr oceedi ng bet ween

Char l ene and Rober t , a recei ver by the name of St even Spei er

( Spei er ) had been appoi nt ed t o t ake possessi on of t he

Ki r by Ranch;

Spei er advi sed t he Tr ust ee t hat he al so was awar e of t he

horses bei ng boar ded on t he pr oper t y but di d not know who

owned the horses or who was r unni ng the busi ness l ocat ed on

t he Ki r by Ranch;

Spei er al so advi sed t he Tr ust ee t hat he had not col l ected

any i ncome that mi ght have been generated f r om t he horse

boardi ng busi ness; The physi cal condi t i on of t he Ki r by Ranch was poor , wi t h

l arge amount s of garbage and ol d motor vehi cl es cover i ng a

si gni f i cant por t i on of t he pr oper t y; and

No one had st epped f or war d wi t h ei t her pr oof of i nsur ance or

cl ai mi ng owner shi p of t he busi ness.

Based on t hese ci r cumst ances, t he Tr ust ee sought cour t

appr oval t o t ake i mmedi at e possessi on and cont r ol of t he Ki r by

Ranch, t o i mmedi at el y ter mi nat e al l busi ness oper at i ons t aki ng

pl ace on t he pr oper t y, and t o r et ur n al l hor ses t o t hei r owner s.

A hear i ng was set on t he emergency mot i on, and t he Trust ee

gave not i ce of t he hear i ng and the mot i on t o, among ot hers,


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4The proof s and decl ar at i ons of ser vi ce f i l ed i n conj unct i onwi t h t he emer gency mot i on i ndi cat e that Rober t and hi s s t at e

cour t counsel Geof f S. Mor r i s ( Mor r i s) wer e each served wi t hnot i ce. A l awyer by t he name of Lazar o E. Fer nandez( Fer nandez) al so was ser ved. Fer nandez had appear ed i n t hebankrupt cy case on behal f of Rober t i n J ul y 2008. The ent er edorder grant i ng t he emergency mot i on al so was served on t he samet hr ee peopl e.

5Accor di ng t o t he Tr ust ee, near l y al l of t he hor ses wer ecl ai med by and t ur ned over t o Rober t .

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Rober t and t wo l awyer s who r epr esent ed Rober t i n other mat t ers. 4

No opposi t i on was ever f i l ed i n r esponse t o the emergency mot i on,

and i t was ul t i mat el y gr ant ed.

Nei t her Rober t nor anyone el se ever sought any rel i ef f r omt he order gr ant i ng t he emergency mot i on. Notabl y, t he order

gr ant i ng t he emergency mot i on i dent i f i ed t he Ki r by Ranch as

pr oper t y of Char l ene s bankrupt cy est at e. Ther e i s no i ndi cat i on

i n t he r ecor d pr ovi ded, or i n our i ndependent r evi ew of t he

bankr upt cy case docket , t hat anyone at t empt ed t o di sput e t he

i dent i f i cat i on of t he Ki r by Ranch as est at e pr oper t y at or ar ound

t he t i me of t he emergency mot i on.

I n Oct ober 2008, t he Tr ust ee sought and obt ai ned t he cour t s

per mi ssi on t o empl oy Pope as her f i el d agent t o pr ovi de servi ces

on behal f of t he bankrupt cy est at e concer ni ng t he Ki r by Ranch.

I n t he empl oyment appl i cat i on, t he Tr ust ee st at ed t hat , pr i or t o

f i l i ng t he empl oyment appl i cat i on, Pope had secur ed t he pr oper t y

f or t he Tr ust ee, and had ar r anged f or t he r et ur n of al l of t hehorses f ormer l y bei ng boar ded on t he pr opert y. 5 The Trust ee

f ur t her st ated t hat she needed t o empl oy Pope because hi s f ut ur e

ser vi ces mi ght be needed t o secur e, supervi se and cl ean up t he


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6Both t he empl oyment appl i cat i on and t he ent ered ordergr ant i ng the empl oyment appl i cat i on were served on Morr i s andFer nandez. However , unl i ke t he emergency mot i on, t he Trust ee di dnot separatel y serve on Rober t t he empl oyment appl i cat i on and t heempl oyment or der .

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Ki r by Ranch. The Tr ust ee asser t ed: The Ki r by Pr oper t y ( i n

par t i cul ar ) cont ai ns a st agger i ng quant i t y of gar bage on t he

pr emi ses. Empl oyment Appl i cat i on ( Oct 2, 2008) at 2: 22.

Li ke t he August 2008 emergency mot i on, t he Tr ust ee sempl oyment appl i cat i on once agai n r ef ers t o t he Ki r by Ranch as

est at e pr oper t y. And once agai n, nei t her Rober t nor anyone el se

obj ected t o t he empl oyment appl i cat i on. 6 I t was t hus gr ant ed.

No one has si nce sought r el i ef f r om t he or der gr ant i ng t he

empl oyment appl i cat i on.

I n t he numer ous f i l i ngs i n Char l ene s case, Rober t has made

a number of st atement s i n i n whi ch he cl ai ms t he he and Char l ene

own or owned t he Ki r by Ranch as communi t y pr oper t y. The

st at ement s cont ai ned i n a mot i on he f i l ed i n t he bankrupt cy cour t

i n December 2008 ar e r epr esent at i ve. I n t hat mot i on, Rober t s

counsel st at ed on hi s behal f : Rober t Gr unt z has al ways

mai nt ai ned that t he Ki r by Pr oper t y i s communi t y pr oper t y as

wel l as sever al ot her pr oper t i es i n t he name( s) of Rober t Gr unt zand/ or Char l ene Gr unt z. Not i ce of Mot i on and Mot i on of Rober t

Gr unt z f or r econsi der at i on, et c. ( Dec. 1, 2008) at 3: 14- 16. I n

t he same mot i on, hi s counsel al so st at es: Mr . J ohnson [ Tr ust ee s

counsel ] i s cor r ect t he Ki r by Pr oper t y i s communi t y pr oper t y

and t her ef or e i s l i abl e f or communi t y debt s. I d. at 6: 11- 12.

From t hese st at ement s i t i s obvi ous t hat i t appar ent l y ser ved

Rober t s i nt er est s at t he t i me t o asser t t hat he and Char l ene


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7For her part , Char l ene has cl ai med t hat she owns 100% oft he Ki r by Ranch, as her separ at e pr oper t y.

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j oi nt l y owned t he Ki r by Ranch as communi t y proper t y.

At ot her t i mes, however , Rober t has f i l ed paper s wi t h t he

bankr upt cy cour t al l udi ng t o the cl ai ms of ot her s t hat , i f

pr oven, woul d est abl i sh t hat nei t her he nor Char l ene own t heKi r by Ranch. 7 These t hi r d- par t y owner shi p cl ai ms wer e t he

subj ect of an adver sar y pr oceedi ng commenced i n May 2009 and

di smi ssed wi t hout pr ej udi ce i n Oct ober 2009.

Whi l e Robert now poi nt s t o myr i ad di sput es and set t l ement s

i nvol vi ng numer ous par t i es pot ent i al l y cal l i ng i nt o doubt t he

est at e s f or mer l y- cl ai med i nt er est i n t he Ki r by Ranch, we

r ei t er at e t hat no one ever sought ei t her t o oppose or t o obt ai n

r el i ef f r om t he t wo or der s whi ch aut hor i zed t he Tr ust ee t o act

and t o empl oy a f i el d agent i n or der t o saf eguar d and mai nt ai n

t he Ki r by Ranch, a par cel t hat t he Tr ust ee had r eason t o bel i eve

at t he t i me: ( 1) was val uabl e pr oper t y of t he est at e, and

( 2) needed t o be secur ed and mai nt ai ned i n order t o reduce t he

r i sk of l i abi l i t y t o t he estat e.2. Jeffrey Circle Residence, and the rents derived therefrom

Accor di ng t o t he Trust ee, whi l e bei ng exami ned at her

341( a) meet i ng of cr edi t or s, Char l ene di scl osed t hat she had

l i ved i n t he J ef f r ey Ci r cl e Resi dence unt i l 2007. Char l ene

appar ent l y f ur t her di scl osed at her 341( a) meet i ng t hat she had

been rent i ng the pr opert y si nce 2007 and that she was del i nquent

on bot h mor t gage payment s and t axes owed on t he pr oper t y.

I n Apr i l 2009, Downey Savi ngs and Loan Associ at i on


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( Downey) , t he hol der of t he f i r st deed of t r ust agai nst t he

J ef f r ey Ci r cl e Resi dence, sought and obt ai ned r el i ef f r om t he

aut omat i c st ay so t hat i t coul d pr oceed wi t h a f or ecl osur e of t he

J ef f r ey Ci r cl e Resi dence. Downey al so cl ai med t hat i t wasent i t l ed t o t he r ent s t he Tr ust ee had col l ect ed pur suant t o t he

t er ms of i t s deed of t r ust and an accompanyi ng r ent al pr oper t y

r i der .

The Tr ust ee f i l ed a r esponse i n whi ch she st at ed t hat she

had reached an agr eement wi t h Downey i n whi ch she consent ed t o

i t s r el i ef f r om st ay mot i on, and agr eed t o abandon t he est at e s

i nt er est i n t he pr oper t y. I n r et ur n, Downey agr eed t o l et t he

Tr ust ee keep t he r oughl y $12, 200 i n r ent s t hat t he Tr ust ee had

col l ect ed f r om Char l ene and t he t enant s r ent i ng t he pr oper t y.

The bankrupt cy cour t enter ed or der s i n May 2009 grant i ng

Downey s r el i ef f r om st ay mot i on and aut hor i zi ng t he Tr ust ee t o

abandon t he J ef f r ey Ci r cl e Resi dence. Rober t s counsel was ser ved

wi t h not i ce of t he r el i ef f r om st ay mot i on, t he Tr ust ee sr esponse t hereto and t he Trust ee s abandonment not i ce. Robert

never obj ect ed t o or sought r el i ef f r om any of t hese mat t er s.

3. Compensation Motion

On May 6, 2011, t he Tr ust ee f i l ed her mot i on f or

aut hor i zat i on t o compensate Pope f or hi s servi ces i n connect i on

wi t h t he saf eguar di ng and mai nt ai ni ng of t he Ki r by Ranch.

Al t hough Pope cl ai med r oughl y $45, 000 i n aggr egate f or hi s

servi ces and expenses i ncur r ed whi l e act i ng as t he Tr ust ee s

f i el d agent , t he onl y f unds t he est at e had on hand t o pay

compensat i on was t he roughl y $12, 200 (pl us accr ued i nt er est ) t hat

t he Tr ust ee had col l ected i n r ent s f r om t he J ef f r ey Ci r cl e


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Resi dence. Accor di ngl y, Pope i ndi cat ed hi s wi l l i ngness t o accept

t hat amount i n f ul l sat i sf act i on f or hi s ser vi ces and expenses.

Moreover , t he Trust ee i ndi cat ed i n t he compensat i on mot i on t hat

her ot her dul y- empl oyed pr of essi onal s, her account ant and herat t or ney, wer e wi l l i ng t o f or ego any compensat i on i n l i ght of t he

i nsuf f i ci ent f unds i n t he est at e and i n l i ght of t he Tr ust ee s

desi r e t o use the f unds t o cover at l east some of Pope s

out - of - pocket expenses.

I n addi t i on t o hi s ef f or t s t o i ni t i al l y secur e t he Ki r by

Ranch and t o ensure t hat t he hor ses wer e t r ansf er r ed of f t he

pr oper t y, Pope al so needed to boar d up thr ee bui l di ngs, cut weeds

and remove a st agger i ng amount of t r ash on the 20 acr es as

r equi r ed by the Tr ust ee s i nsur ance car r i er and var i ous ci t y and

count y gover nment of f i ces. I t i s not cl ear f r om t he compensat i on

mot i on or Pope s accompanyi ng decl arat i on pr eci sel y when

par t i cul ar servi ces wer e render ed or expenses i ncur r ed, but Pope

cl ai med, among ot her t hi ngs, out - of - pocket expenses of over$22, 000 f or dump f ees and f or bobcat and t r uck r ent al .

The Tr ust ee f ur t her st at ed i n t he compensat i on mot i on t hat ,

at one poi nt she had a pr ospect i ve pur chaser i nt erest ed i n buyi ng

t he Ki r by Ranch, but t hat ongoi ng di sput es r egar di ng owner shi p of

t he pr oper t y and ongoi ng County demands t hat t he pr oper t y be

f ur t her mai nt ai ned pr event ed her f r om r eal i zi ng any val ue f r om

t he pr oper t y and f or ced her t o abandon t he est at e s i nt er est i n

t he pr oper t y.

Rober t f i l ed an opposi t i on t o the compensat i on mot i on on

May 23, 2011. Among other t hi ngs, Robert cl ai med: ( 1) t he

Tr ust ee and t he cour t wer e t ol d at t he out set of t he case t hat


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8Rober t of f er ed no evi dence t o suppor t t hi s asser t i on, norhave we f ound any evi dence corr obor at i ng t hi s asser t i on dur i ngour i ndependent r evi ew of t he docket and i t s cont ent s.

9Rober t never obt ai ned t he t r anscr i pt f r om t hi s hear i ng, sowe do not know speci f i cal l y what f act s t he cour t f ound or r el i edupon i n grant i ng t he compensat i on mot i on.

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Char l ene di d not own t he Ki r by Ranch; 8 ( 2) because Char l ene di d

not own t he Ki r by Ranch, t he cour t l acked j ur i sdi ct i on and/ or

aut hor i t y t o i ssue any or der s r el at i ng i n any way t o t hat

pr oper t y; ( 3) t he r ent s f r om t he J ef f r ey Ci r cl e Resi dence wer ecommuni t y pr oper t y j oi nt l y owned by Char l ene and Rober t ;

( 4) because t he r ent s were 50% hi s communi t y pr opert y, t hat 50%

coul d not be used t o pay Pope f or hi s ser vi ces, whi ch wer e

Char l ene s separ at e debt ; and ( 5) no f unds shoul d be di st r i but ed

f r om t he est at e unl ess and unt i l owner shi p of t he rent s and

owner shi p of t he Ki r by Ranch and t he J ef f r ey Ci r cl e Resi dence

wer e f i nal l y det er mi ned. I n her r epl y t o Rober t s opposi t i on,

t he Tr ust ee poi nt ed out t hat t he r ent s wer e t he pr oceeds of t he

set t l ement bet ween the Trust ee and Downey, and hence were est at e

pr oper t y.

Af t er hol di ng a hear i ng on t he mot i on, 9 t he bankr upt cy cour t

overr ul ed Robert s obj ect i on and gr ant ed t he compensat i on mot i on,

by or der ent ered J une 9, 2011.4. The reconsideration motion.

On J une 20, 2011, a mot i on f or r econsi der at i on was f i l ed by

t wo peopl e by t he name of J ohn Mart i n and Li nda Mart i n. At t he

end of t he mot i on, t her e i s a si gnat ur e f or Li nda Mar t i n, i n pr o

per . At t ached t o t he mot i on f or r econsi der at i on i s a memor andum

of poi nt s and aut hor i t i es. At t he end of t he memor andum of


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Even t hough Rober t s not i ce of appeal onl y ref er enced t heor der denyi ng t he r econsi der at i on mot i on, we wi l l t r eat hi sappeal as al so r equest i ng r evi ew of t he under l yi ng compensat i onor der . We may do so because the par t i es have f ul l y br i ef ed t hei ssues ar i si ng f r om t he under l yi ng compensat i on or der . See Lol l iv. Count y of Or ange, 351 F. 3d 410, 414- 15 ( 9t h Ci r . 2003) ; Wash.St at e Heal t h Faci l i t i es Ass n v. Wash. Dept . of Soc. & Heal t hSer vs. , 879 F. 2d 677, 681 ( 9t h Ci r . 1989) ; McCar t hy v. Mayo,827 F. 2d 1310, 13131314 ( 9t h Ci r . 1987) .

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poi nt s and aut hor i t i es, t her e ar e si gnat ur es of a number of

addi t i onal par t i es, i ncl udi ng one f or Rober t . Par t i es ot her t han

Robert compl ai ned t hat t hey had i nadequate not i ce of t he

compensat i on mot i on and that t he cour t i mpr oper l y pr ohi bi t ed themf r om appear i ng and pr esent i ng or al ar gument at t he hear i ng on t he

compensat i on mot i on. But Rober t i s t he onl y per son who f i l ed a

not i ce of appeal , and as f ar as he i s concer ned, t he

r econsi derat i on mot i on mer el y r ei t er at es some of t he same poi nt s

he made i n hi s opposi t i on t o the compensat i on mot i on.

Af t er a hear i ng on t he r econsi der at i on mot i on, t he

bankrupt cy cour t ent er ed an order denyi ng t he r econsi der at i on

mot i on on August 18, 2011, and Rober t t i mel y f i l ed a not i ce of

appeal on August 31, 2011. 10

JURISDICTION

The bankrupt cy cour t had j ur i sdi ct i on pur suant t o 28 U. S. C.

1334 and 157( b) ( 2) ( A) and ( B) . We have j ur i sdi ct i on under

28 U. S. C. 158.ISSUES

1. Di d Rober t pr ovi de us wi t h a suf f i ci ent r ecor d?

2. Di d t he bankr upt cy cour t abuse i t s di scr et i on i n gr ant i ng

t he Trust ee s compensat i on mot i on and awardi ng r oughl y


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$12, 200 t o Pope?

3. Di d t he bankr upt cy cour t abuse i t s di scret i on i n denyi ng t he

r econsi der at i on mot i on?

STANDARDS OF REVIEW

A bankr upt cy cour t order awardi ng compensat i on under 330

i s revi ewed f or abuse of di scr et i on. Lei cht y v. Near y ( I n r e

St r and) , 375 F. 3d 854, 857 ( 9t h Ci r . 2004) . Under t he abuse of

di scr et i on st andar d of r evi ew, we f i r st det er mi ne de novo

whet her t he [ bankr upt cy] cour t i dent i f i ed t he cor r ect l egal r ul e

t o appl y t o t he r el i ef r equest ed. Uni t ed St at es v. Hi nkson,

585 F. 3d 1247, 1262 ( 9t h Ci r . 2009) ( en banc) . And i f t he

bankr upt cy cour t i dent i f i ed t he cor r ect l egal r ul e, we t hen

det er mi ne under t he cl ear l y er r oneous st andar d whet her i t s

f actual f i ndi ngs and i t s appl i cat i on of t he f act s t o t he r el evant

l aw wer e: ( 1) i l l ogi cal , ( 2) i mpl ausi bl e, or ( 3) wi t hout suppor t

i n i nf er ences t hat may be dr awn f r om t he f act s i n t he r ecor d.

I d. ( i nt er nal quot at i on mar ks omi t t ed) .I f a mot i on f or r econsi der at i on i s f i l ed wi t hi n 14 days of

t he ent r y of t he or der t o whi ch i t r el at es, i t i s t r eat ed as a

mot i on t o al t er or amend j udgment under Ci vi l Rul e 59( e) .

Am. I r onwor ks & Er ect or s, I nc. v. N. Am. Const r . Cor p. , 248 F. 3d

892, 89899 ( 9t h Ci r . 2001) . I f t he r econsi der at i on mot i on i s

f i l ed beyond t hat t i me per i od, i t i s t r eat ed as a mot i on f or

r el i ef f r om j udgment under Ci vi l Rul e 60( b) . Ei t her way, t he

deni al of such mot i ons i s r evi ewed f or abuse of di scr et i on. I d. ;

see al so Fi r st Ave. W. Bl dg. , LLC v. J ames ( I n r e OneCast Medi a,

I nc. ) , 439 F. 3d 558, 561 ( 9t h Ci r . 2006) ; Far Out Pr ods. , I nc. v.

Oskar , 247 F. 3d 986, 992 ( 9t h Ci r . 2001) ; Cl i nt on v. Deut sche


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11Whi l e t he en banc deci si on di d not ment i on i t , one of t heNi nt h Ci r cui t s ot her deci si ons not es t hat Rober t has a l awdegr ee, but i s not a member of t he st ate bar . See Gr unt z v.Cnt y. of Los Angel es ( I n r e Gr unt z) , 166 F. 3d 1020, 1023, amendedand superseded, 177 F. 3d 728, r ehr g en banc gr ant ed and opn.wi t hdr awn, 177 F. 3d 729 ( 9t h Ci r . 2000) .

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Bank Nat l Tr ust Co. ( I n r e Cl i nt on) , 449 B. R. 79, 82 ( 9t h Ci r .

BAP 2011) .

DISCUSSION

A. Robert did not provide us with essential transcripts.

Whi l e Rober t has appear ed i n t hi s appeal i n pr o per , he i s

no st r anger ei t her t o t he bankrupt cy cour t s or t he f eder al

appel l at e cour t s. I n f act , he was t he appel l ant i n a semi nal

Ni nt h Ci r cui t Cour t of Appeal s case i nvol vi ng t he scope of t he

aut omat i c st ay, Gr unt z v. Cnt y. of Los Angel es ( I n r e Gr unt z) ,

202 F. 3d 1074 ( 9t h Ci r . 2000) ( en banc) . That appeal ar ose f r om

Robert s bankr upt cy case, whi ch he f i l ed many year s ago, i n 1988

( Bankr . C. D. Cal . Case No. RS- 88- 08310- MG) . I n hi s bankrupt cy

case, Rober t f i l ed an adver sar y pr oceedi ng seeki ng r el i ef f r om a

st at e cour t cr i mi nal convi ct i on f or nonpayment of chi l d suppor t ,

cl ai mi ng t hat t he cr i mi nal pr oceedi ngs agai nst hi m vi ol at ed t he

aut omat i c st ay. See I n r e Gr unt z, 202 F. 3d at 1077- 78. An en

banc panel of t he Ni nt h Ci r cui t ul t i mat el y det er mi ned t hat t heaut omat i c st ay di d not appl y t o t he cr i mi nal pr oceedi ngs. I d. at

1088.

Rober t not onl y has si gni f i cant per sonal bankrupt cy and

appel l at e exper i ence, but he al so has had f or mal l egal

t r ai ni ng. 11 Moreover , he knows how t o order t r anscr i pt s when he

i s so i ncl i ned. See Adv. No. RS- 09- 01223- MS, Doc. No. 41.


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However , t he bankr upt cy cour t s adver sar y and case dockets

r ef l ect t hat Rober t never or der ed nor obt ai ned t he t r anscr i pt s

f r om ei t her t he hear i ng on t he compensat i on mot i on or t he hear i ng

on t he r econsi der at i on mot i on. By not or der i ng t heset r anscr i pt s, he has hamst r ung our abi l i t y to r evi ew t he

bankrupt cy cour t s or der s f or abuse of di scr et i on.

Fai l ur e t o or der necessar y t r anscr i pt s may be gr ounds f or

di smi ssal of an appeal or summary af f i r mance. Kyl e v. Dye

( I n r e Kyl e) , 317 B. R. 390, 393 ( 9t h Ci r . BAP 2004) , af f d,

170 Fed. Appx. 457 ( 9t h Ci r . 2006) ; see al so Syncom Capi t al Cor p.

v. Wade, 924 F. 2d 167, 169 ( 9t h Ci r . 1991) . But we al so have

di scr et i on, when pr act i cabl e and appr opr i at e, t o pr oceed wi t h

what ever r evi ew t he absence of t he r equi si t e t r anscr i pt s al l ows.

See, e. g. , I n r e Kyl e, 317 B. R. at 393- 94.

We wi l l exer ci se our di scr et i on her e t o pr oceed as best we

can wi t hout t he r equi si t e t r anscr i pt s. At t he same t i me, we ar e

ent i t l ed t o i nf er , based on Rober t s f ai l ur e t o pr ovi de t hem,t hat t her e woul d be not hi ng i n t he t r anscr i pt s t hat woul d hel p

Rober t s ar gument s on appeal . Gi oni s v. Wayne ( I n r e Gi oni s) ,

170 B. R. 675, 680- 81 ( 9t h Ci r . BAP 1994) .

B. None of Roberts arguments on appeal have any merit.

Rober t makes t he same ar gument s on appeal t hat he made i n

t he bankrupt cy cour t i n opposi t i on t o t he Tr ust ee s compensat i on

mot i on. Fi r st and f or emost , Rober t cl ai ms t hat t he Ki r by Ranch

mi ght not have been est ate pr oper t y because ot her peopl e have

asser t ed compet i ng owner shi p cl ai ms t her et o. Accordi ng t o

Rober t , unl ess and unt i l t her e i s a f i nal j udi ci al det er mi nat i on

t hat Char l ene owns some or al l of t he Ki r by Ranch, t he bankr upt cy


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12Gar ci a l i sts al l of t he f act or s as f ol l ows:

( a) Wer e the ser vi ces aut hor i zed?( b) Wer e t he ser vi ces necessar y or benef i ci al t o t headmi ni st r at i on of t he est at e at t he t i me t hey wer er endered?( c) Ar e the servi ces adequatel y document ed?( d) Ar e t he f ees r equi r ed r easonabl e, t aki ng i nt o

consi der at i on t he f actor s set f or t h i n sect i on330( a) ( 3) ?( e) I n maki ng t he det er mi nat i on, t he cour t mustconsi der whet her t he pr of essi onal exer ci sed r easonabl ebi l l i ng j udgment .

I d. ( ci t i ng Rober t s, Sher i dan & Kot el , P. C. v. Ber gen Br unswi gDr ug Co. ( I n r e Mednet ) , 251 B. R. 103, 108 ( 9t h Ci r . BAP 2000) ,and I n r e St r and, 375 F. 3d at 860) .

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est at es.

At most , Rober t s i ssue r egar di ng t he est at e s i nt er est i n

t he Ki r by Ranch goes t o whether t he servi ces Pope per f ormed were

necessary or benef i ci al t o t he est at e at t he t i me t hey wer er endered. Thi s i s among t he f actors t he bankr upt cy cour t must

consi der when r ul i ng on a 330 compensat i on r equest . See Garci a

v. U. S. Tr ust ee ( I n r e Gar ci a) , 335 B. R. 717, 724 ( 9t h Ci r . BAP

2005) . 12

The necessi t y and benef i t of t he ser vi ces r ender ed i s

measur ed based on ci r cumst ances as t hey exi st ed at t he t i me they

were r endered and not based on t he benef i t of hi ndsi ght . See

I n r e Gar ci a, 335 B. R. at 724; I n r e Mednet , 251 B. R. at 107.

Her e, we f i nd i t i nst r uct i ve t hat no one f i l ed an obj ect i on when

t he Tr ust ee pr oposed t o empl oy Pope f or pr eci sel y t he same tasks

t hat Pope l at er sought compensat i on f or : t he secur i t y and

mai nt enance of t he Ki r by Ranch. Onl y when t he Trust ee l ater

sought t o pay Pope di d Rober t f i l e an obj ect i on.


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I n any event , at t he t i me she sought aut hor i zat i on t o empl oy

Pope, t he Tr ust ee of f er ed a suf f i ci ent showi ng of t he necessi t y

of secur i ng and mai nt ai ni ng t he Ki r by Ranch. The Tr ust ee f ear ed

she otherwi se woul d expose t he bankr upt cy est ate t o a r i sk ofl i abi l i t y unl ess t he Ki r by Ranch was pr oper l y secur ed and

mai nt ai ned. Whi l e Rober t ( and ot her s) l at er al l eged t hat

Char l ene mi ght not act ual l y own t he Ki r by Ranch, we were unabl e

t o f i nd any paper f i l ed i n Char l ene s bankrupt cy case dur i ng t he

f i r st sever al mont hs of t hat case cal l i ng i nt o quest i on whet her

Char l ene had any i nt er est i n t he Ki r by Ranch. I n f act , as

ment i oned above, Robert asser t ed i n hi s own ear l y bankr upt cy

cour t f i l i ngs t hat he and Char l ene j oi nt l y owned t he Ki r by Ranch

as communi t y pr opert y, and Char l ene cl ai med t hat t he Ki r by Ranch

was her separate pr opert y. Regardl ess of whether t he Ki r by Ranch

was Char l ene s communi t y or separ at e pr oper t y, ei t her t ype of

owner shi p i nt er est woul d have been suf f i ci ent t o est abl i sh t he

Ki r by Ranch as pr oper t y of her bankrupt cy est at e. See 541( a) ( 1) and ( 2) .

Under t hese ci r cumst ances, Rober t s bel at ed r ai si ng of t he

i ssue r egar di ng owner shi p of t he Ki r by Ranch does not est abl i sh

t hat t he bankrupt cy cour t abused i t s di scr et i on i n aut hor i zi ng

t he Trust ee t o compensat e Pope i n the approxi mat e amount of

$12, 200.

Rober t al so ar gues t hat he and Char l ene j oi nt l y owned t he

J ef f r ey Ci r cl e Resi dence as communi t y proper t y, and t hat he t hus

had a 50% communi t y pr oper t y i nt er est i n t he rent s col l ect ed

t her ef r om. Accor di ng t o Robert , t he bankrupt cy cour t shoul d not

have used hi s 50% shar e of t he rent s t o pay Pope because t he


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obl i gat i on t o pay Pope was Char l ene s separ at e, post - di ssol ut i on

debt .

Rober t s r ent s argument i gnor es t he f act t hat t he cour t ,

wi t hout any obj ect i on f r om hi m, gr ant ed Downey s r el i ef f r om st aymot i on concer ni ng t he J ef f r ey Ci r cl e Resi dence. I n conj unct i on

wi t h t hat mot i on, t he Trust ee had agr eed t o t he r el i ef Downey was

seeki ng i n exchange f or Downey s agr eement t o l et t he Tr ust ee

keep t he r oughl y $12, 200 i n r ent s she had col l ect ed. Accor di ng

t o Downey, t he rent s col l ected otherwi se woul d have been part of

Downey s col l at er al under i t s f i r st deed of t r ust agai nst t he

J ef f r ey Ci r cl e Resi dence.

But even i f we wer e t o di sr egar d Downey s r el i ef f r om st ay

mot i on and Downey s t r ansf er t o t he Tr ust ee of i t s i nt er est i n

t he r ent s, Rober t st i l l coul d not pr evai l on hi s r ent s ar gument .

Assumi ng wi t hout deci di ng that Rober t had a 50% communi t y

pr oper t y i nt er est i n t he r ent s, t hey st i l l wer e pr oper t y of

Char l ene s bankrupt cy est at e, 11 U. S. C. 541( a) ( 2) , and as suchcoul d be used t o pay al l owed admi ni st r at i ve expenses of t he

est at e, i ncl udi ng t he compensat i on awar ded t o Pope. The expl i ci t

l anguage of t he Bankrupt cy Code suppor t s t hi s r esul t .

Under 541( a) ( 2) , t he non- debt or spouse s shar e of

communi t y pr oper t y i s cl assi f i ed as est at e pr oper t y, so l ong as

t hat pr oper t y i s subj ect t o t he sol e, equal or j oi nt management

and cont r ol of t he debt or or i s l i abl e f or al l owabl e cl ai ms

agai nst t he debt or . Even when di ssol ut i on pr oceedi ngs ar e

pendi ng at t he t i me of t he debt or s bankrupt cy f i l i ng, t he non-

debt or spouse s shar e of communi t y pr oper t y i s proper t y of t he

debt or s bankrupt cy est at e, unl ess t he st at e cour t made a f i nal


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pr oper t y di vi si on bef ore t he bankr upt cy case was commenced. See

Dumas v. Mant l e ( I n r e Mant l e) , 153 F. 3d 1082, 1085 ( 9t h Ci r .

1998) ( appl yi ng Cal i f or ni a l aw and hol di ng t hat unt i l di vi si on,

al l communi t y pr oper t y of t he di vor ci ng coupl e i s pr oper t y of t hebankrupt cy est at e pur suant t o 541( a) ( 2) . ) .

I n Cal i f or ni a, communi t y pr oper t y gener al l y i s subj ect t o

t he equal management and cont r ol of ei t her spouse. See Cal . Fam.

Code 1100( a) ; see al so Teel v. Teel ( I n r e Teel ) , 34 B. R. 762,

764 ( 9t h Ci r . BAP 1983) ( I n Cal i f or ni a, wi t h except i ons not her e

r el evant , each spouse has management and cont r ol of communi t y

pr oper t y . . . . Ther ef or e, t he communi t y pr oper t y of appel l ant

and t he debt or i s pr oper t y of t he est at e under both

541( a) ( 2) ( A) and ( B) . ) . Mor eover , t he r ecor d her e i ndi cat es

t hat , i f ei t her spouse had sol e management and cont r ol of t he

J ef f r ey Ci r cl e Resi dence and t he r ent s der i ved t heref r om, i t

woul d have been Char l ene. Robert has not di sput ed t hat Char l ene

hel d l egal t i t l e t o t he J ef f r ey Ci r cl e Resi dence as her sol e andsepar at e pr oper t y, t hat she encumber ed t he J ef f r ey Ci r cl e

Resi dence by execut i ng t he f i r st deed of t r ust hel d by Downey,

and t hat she rent ed out t he J ef f r ey Ci r cl e Resi dence, whi ch l ed

t o t he accrual of t he r ent s col l ect ed by the Tr ust ee.

I n any event , r egar dl ess of whet her t he rent s wer e equal l y

cont r ol l ed by Rober t and Char l ene or sol el y cont r ol l ed by

Char l ene, t he ent i r e amount of t he r ent s const i t ut ed pr oper t y of

Char l ene s bankrupt cy est at e under 541( a) ( 2) ( A) , even i f Rober t

hel d a 50% communi t y pr oper t y i nt er est i n t he r ent s.

Havi ng est abl i shed t hat al l of t he r ent s wer e est at e

pr oper t y, i t al so i s beyond cavi l t hat t he bankrupt cy cour t


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pr oper l y coul d aut hor i ze t he Tr ust ee t o use al l of t he r ent s t o

compensat e Pope. Compensat i on awarded under 330 qual i f i es as

an al l owed 503( b) ( 2) admi ni st r at i ve expense, whi ch i s subj ect

t o payment f r om al l est at e asset s, i ncl udi ng 541( a) ( 2) est at epr oper t y. See 726( c) ( 1) ( Cl ai ms al l owed under sect i on 503 of

t hi s t i t l e shal l be pai d ei t her f r om pr oper t y of t he ki nd

speci f i ed i n sect i on 541( a) ( 2) of t hi s t i t l e, or f r om ot her

pr oper t y of t he est at e, as t he i nt er est of j ust i ce r equi r es. ) .

Nor can i t ser i ousl y be doubt ed t hat t he i nt er est of j ust i ce

per mi t t ed t he bankrupt cy cour t t o aut hor i ze t he Tr ust ee to

compensat e Pope f r omt he r ent s. The r ent s were t he onl y f unds

avai l abl e t o pr ovi de any compensat i on. The Tr ust ee dul y obt ai ned

aut hor i zat i on t o empl oy Pope, wi t hout any wr i t t en opposi t i on

t her et o. Addi t i onal l y, t he Tr ust ee had suf f i ci ent gr ounds f or

bel i evi ng at t he t i me t hat t he best i nt er est s of t he est at e woul d

be ser ved by empl oyi ng Pope. Onl y af t er Pope had per f ormed hi s

servi ces and sought payment di d Rober t f i l e a wr i t t en obj ect i on,quest i oni ng f or t he f i r st t i me t he necessi t y and benef i t t o t he

est at e of Pope s empl oyment and servi ces. Mor eover , t he r ecor d

her e suppor t s t he concl usi on t hat Pope s ser vi ces wer e necessar y

and benef i ci al t o the est at e at t he t i me of hi s empl oyment , as

di scussed above. Fi nal l y, payment of al l of t he r ent s t o Pope

def r ayed onl y a por t i on of hi s out - of - pocket expenses and

const i t ut ed onl y a smal l f r act i on of t he t ot al compensat i on he

cl ai med ent i t l ement t o.

I n sum, Robert s r ent s ar gument i s based on a f al se pr emi se:

t hat hi s al l eged 50% communi t y pr oper t y i nt er est i n t he r ent s

pr ohi bi t ed t he bankr upt cy cour t f r om aut hor i zi ng use of al l of


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13Rober t s r ent s ar gument suggest s he bel i eves t hat , underCal i f or ni a l aw, hi s 50% shar e of communi t y pr oper t y coul d not beused t o pay a separ at e debt of Char l ene s, i ncl udi ng anycompensat i on owed t o Pope. Assumi ng wi t hout deci di ng t hat t hi s

i s a cor r ect st at ement of Cal i f or ni a l aw, i t woul d be pr eempt edt o ext ent i t conf l i ct ed wi t h t he Bankrupt cy Code pr ovi si onsexpl i ci t l y per mi t t i ng t he cour t t o aut hor i ze payment ofadmi ni st r at i ve expense cl ai ms f r om 541( a) ( 2) est at e pr oper t y.See 6 Col l i er on Bankrupt cy 726. 05[ 1] ( Al an N. Resni ck andHenr y J . Sommer , eds. , 16t h ed. 2012) ( ci t i ng I n r e Teel , 34 B. R.at 764 and st at i ng: . . . wher e t her e ar e di f f er ences bet weent he bankrupt cy di st r i but i on scheme and st at e l aw, t he st at e l awscheme i s pr eempt ed. ) .

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t he r ent s t o pay compensat i on t o Pope. As expl ai ned above, t he

Bankrupt cy Code expl i ci t l y per mi t s such use of 541( a) ( 2) est at e

pr oper t y. 13 Because Rober t s rent s ar gument i s f at al l y f l awed,

i t does not suppor t r ever sal of t he bankrupt cy cour t scompensat i on or der .

As f or t he bankrupt cy cour t s deni al of t he r econsi der at i on

mot i on, Rober t has not f ocused on t hat r ul i ng i n hi s appeal

br i ef s. Mor eover , t o t he ext ent i t per t ai ned t o Rober t , t he

r econsi derat i on mot i on mer el y r ei t er at ed t he same t ypes of

argument s Robert had made i n hi s opposi t i on t o t he Trust ee s

compensat i on mot i on. Accor di ngl y, f or t he same r easons we af f i r m

t he bankrupt cy cour t s compensat i on or der , we may af f i r m i t s

deni al of t he mot i on f or r econsi der at i on. See Am. I r onwor ks &

Er ect or s, I nc. , 248 F. 3d at 899 ( hol di ng t hat , when t he

appel l ant s mot i on f or r econsi der at i on mer el y r ear gued t hei r

or i gi nal posi t i on, t r i al cour t di d not abuse i t s di scr et i on i n

denyi ng t he r econsi der at i on mot i on) .Rober t s appeal br i ef s cont ai n ot her compl ai nt s r egar di ng

t he bankrupt cy cour t s rul i ngs and t he Tr ust ee s act i ons. These


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addi t i onal compl ai nt s can be cat egor i zed as: ( 1) i r r el evant t o

t he or der s on appeal , ( 2) i ncompr ehensi bl e, and/ or ( 3) pat ent l y

i nconsi st ent wi t h t he r ecor d. I t suf f i ces f or us t o say t hat

none of t hese ot her compl ai nt s j ust i f y rever sal of t he or der s onappeal .

CONCLUSION

For al l of t he r easons set f or t h above, we AFFI RM t he

bankrupt cy cour t s or der s gr ant i ng the Tr ust ee s compensat i on

mot i on and denyi ng t he reconsi derat i on mot i on.

in re: charlene gruntz, 9th cir. bap (2012)

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