In re: John D. Gessin, 9th Cir. BAP (2013)

7/25/2019 In re: John D. Gessin, 9th Cir. BAP (2013)

http://slidepdf.com/reader/full/in-re-john-d-gessin-9th-cir-bap-2013 1/22

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1 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.

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UNI TED STATES BANKRUPTCY APPELLATE PANEL

OF THE NI NTH CI RCUI TI n r e: ) BAP No. 12- 1330- J uKi D

) J OHN D. GESSI N, ) Bk. No. NV- 11- 51818

)Debt or . ) Adv. No. NV- 11- 05078

______________________________))

J OHN D. GESSI N, ) )

Appel l ant , ))

v. ) M E M O R A N D U M1

)ALLI SON TAI TANO (MOORE) , )

)Appel l ee. )

______________________________)

Ar gued and Submi t t ed on J anuar y 25, 2013at Las Vegas, Nevada

Fi l ed - Mar ch 4, 2013

Appeal f r om t he Uni t ed St at es Bankrupt cy Cour t

f or t he Di st r i ct of NevadaHonor abl e Br uce T. Beesl ey, Bankrupt cy J udge, Presi di ng

_____________________________________

Appear ances: Shel l y Tr al een O’ Nei l l , Esq. of Demet r as &O’ Nei l l , appear ed f or appel l ant J ohn D. Gessi n;Gl ade L. Hal l , Esq. appear ed f or appel l ee Al l i son Tai t ano Moore ____________________________________

Bef ore: J URY, KI RSCHER and DUNN, Bankr upt cy J udges.

FILED

MAR 04 2013

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



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2 Tai t ano subsequent l y mar r i ed and changed her name t oMoor e.

3 Unl ess other wi se i ndi cat ed, al l chapt er and sect i on

r ef er ences ar e t o t he Bankrupt cy Code, 11 U. S. C. §§ 101- 1532.“Rul e” r ef er ences ar e t o t he Feder al Rul es of Bankrupt cyPr ocedur e and “Ci vi l Rul e” r ef er ences are t o t he Feder al Rul es of Ci vi l Pr ocedur e.

4 The under l yi ng f act s ar e t aken most l y f r om t hear bi t r at or ’ s f i ndi ngs of f act set f or t h i n t he ar bi t r at or ’ s awar dand t he st at e cour t ’ s f i ndi ngs of f act set f or t h i n i t s Fi ndi ngsof Fact , Concl usi ons of Law, and J udgment .

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Appel l ee, Al l i son Tai t ano, 2 obt ai ned a st at e cour t

ar bi t r at i on awar d and j udgment agai nst appel l ant , debt or , J ohn

Gessi n, based on debt or ’ s f r audul ent mi sr epr esent at i ons,

const r uct i ve f r aud and conver si on of her money. Af t er war ds,debt or f i l ed a chapt er 133 bankr upt cy pet i t i on. Tai t ano

commenced an adversary pr oceedi ng t o have t he st at e cour t

j udgment i n t he amount of $56, 802. 15 decl ar ed a nondi schar geabl e

debt because i t was based on f r aud. Tai t ano f i l ed a mot i on f or

summary j udgment ( MSJ ) , whi ch t he bankr upt cy court gr ant ed,

f i ndi ng t he debt nondi schar geabl e under § 523( a) ( 2) on t he basi s

of i ssue pr ecl usi on. Debt or appeal s f r om t hat or der . We

AFFI RM.

I. FACTS4

Tai t ano met debtor on Mat ch. com, an onl i ne dat i ng ser vi ce.

Debt or ’ s pr of i l e r epr esent ed t hat he ( 1) was a successf ul

busi nessman; ( 2) had a gr aduate degr ee; ( 3) owned and operated

t wo busi nesses; ( 4) made $150, 000 per year ; ( 5) di d ext r emel ywel l i n busi ness; ( 6) di d ext r emel y wel l i n f i nances; and

( 7) di d ext r emel y wel l i n car eer st abi l i t y. Af t er Tai t ano and



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debt or began a dat i ng r el at i onshi p, debt or r epr esent ed i n per son

t o her ( 1) t hat he was a successf ul st ock mar ket i nvest or ;

( 2) t hat he had a st ock account wi t h about $90, 000 i n

secur i t i es; ( 3) t hat t he st ock account was i n hi s f at her ’ s nameso that he coul d hi de t hi s asset f r om t he mot her of hi s son; and

( 4) t hat he coul d i nvest Tai t ano’ s money, whi ch was cur r ent l y i n

a Cer t i f i cat e of Deposi t ( CD) , f or a hi gher r at e of r et ur n.

Tai t ano, who was a hi gh school t eacher , cashed out her CD

i n t he amount of $29, 949. 72, added addi t i onal cash, and on

J anuar y 14, 2009, gave $30, 000 t o debtor . Debtor l at er t ol d

Tai t ano t hat he had i nvest ed t he cash i n t he st ock mar ket whi ch

was cont r ar y t o her expr ess i nt ent i ons, and t hat most of t he

f unds had been l ost . Tai t ano demanded an expl anat i on f or t he

l oss of her money and r equest ed t he buy- sel l t i cket s and

br oker age st atement s. None were pr ovi ded. Debt or t hen changed

hi s s t or y and asser t ed t hat he had not l ost t he money i n t he

st ock market , but r ather had i nvest ed i n a mobi l e home whi ch hadgener ated a pr omi ssor y not e i n hi s f avor .

I n l at e Febr uar y 2009, debt or del i ver ed t o Tai t ano f or

secur i t y f or her $30, 000 a mobi l e home t i t l e whi ch was s i gned

of f by the owner , Ki m E. Kal t enbr un, on Apr i l 2, 2007, and by

Gr een Tree Ser vi ci ng LLC f ka Gr een Tree Accept ance on March 9,

2007. Debt or had sol d t he mobi l e home t o Gene R. Aqui no and

Mary Ann D. Kang by a wr i t t en agr eement ent ered i nto on

August 9, 2008. The sal e was f or $49, 620. 71 wi t h a down payment

of $10, 000. Debt or was i dent i f i ed as t he sel l er of t he mobi l e

home and was r ecei vi ng mont hl y payment s f r om t he buyers.

On Mar ch 10, 2009, Tai t ano f i l ed a ci vi l compl ai nt agai nst



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5 Thi s st at ut e st at es t hat by maki ng a f al se st at ement i nwr i t i ng f or t he pur pose of pr ocur i ng pr oper t y or cr edi t one i s

gui l t y of a mi sdemeanor .6 The st at e di st r i ct cour t l at er f ound t hat when t he

garni shment was served on t he garni shees, Aqui no and Kang, t heyf al sel y swore that t hey were not maki ng any payment s t o debt orand di d not owe any debt t o hi m. The cour t al so f ound debt or wasi n vi ol at i on of t he at t achment because by f i l i ng f al seaf f i davi t s, a new t i t l e t o t he mobi l e home was i ssued i n t henames of Bernar d Gessi n and Kal t enbrun.

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debt or i n t he Second J udi ci al Di st r i ct Cour t of t he St at e of

Nevada, Case No. CV09- 00710, al l egi ng f r aud, br each of f i duci ar y

dut y, mi suse of her f unds and f ai l ur e t o account , conver si on,

and obt ai ni ng her f unds t hr ough a f al se st at ement i n wr i t i ng i nvi ol at i on of Nev. Rev. St at . § 205. 375. 5

On Apr i l 29, 2009, t he st at e di st r i ct cour t i ssued a

pr ej udgment wr i t of at t achment and garni shment af t er concl udi ng

t hat Tai t ano had a mer i t or i ous cl ai m f or r el i ef and was l i kel y

t o pr evai l on t he mer i t s of her cl ai m. 6 The pr oper t i es t o be

at t ached were the t i t l e to t he mobi l e home and payment s due f r om

Aqui no and Kang to any person, other t han f or t axes and

i nsurance, under t he cont r act of sal e f or t he mobi l e home and

l ot l ease agreement bet ween Aqui no and Kang on t he one hand and

debt or on t he ot her . The val ue of t he payment s pr i or t o t he

j udgment wer e est i mat ed t o be $8, 800.

The mat t er was sent t o mandat or y ar bi t r at i on and or i gi nal l y

schedul ed f or hear i ng on December 7, 2009. Debt or obt ai ned acont i nuance, over Tai t ano’ s obj ect i on, t o J anuar y 22, 2010,

based on hi s cl ai m t hat wi t nesses cr i t i cal t o hi s def ense wer e

unavai l abl e.



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7 The Fi ndi ngs of Fact , Concl usi ons of Law and J udgment byt he stat e di str i ct cour t r ef l ect s that t he f i r st ar bi t r at or ,Mr . Sant os, had or der ed Gessi n’ s at t or neys t o hol d t he f unds i nt hei r t r ust account s.

8 The pr e- hear i ng st at ement i s not par t of t he recor d onappeal .

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On J anuar y 5, 2010, debt or si gned a subst i t ut i on of

counsel , subst i t ut i ng Mr . McKenna f or Mr . Egghar t . McKenna

wai t ed unt i l J anuar y 15, 2010, t o advi se Tai t ano’ s counsel and

t he ar bi t r at or t hat he was subst i t ut ed i n as debt or ’ s at t or ney.McKenna t hen demanded t hat t he ar bi t r ator r ecuse hi msel f because

t he ar bi t r at or and McKenna wer e r epr esent i ng opposi ng par t i es i n

ot her l i t i gat i on. Tai t ano opposed, but t he ar bi t r at or r ecused

hi msel f . Dur i ng t hi s t i me, McKenna made no ef f or t t o r ecei ve

and hol d t he gar ni shed mobi l e home payment s. The r ecord

r ef l ect s t hat t he payment s were bei ng made t o debt or despi t e t he

gar ni shment and or der s of t he ar bi t r at or 7 t hat debt or ’ s

at t or neys hol d t hose f unds i n t hei r t r ust account s.

A r epl acement arbi t r ator was appoi nt ed and t he hear i ng

schedul ed f or J une 3, 2010, wi t h br i ef i ng deadl i nes set . No

br i ef s wer e f i l ed on debt or ’ s behal f . Debt or al so f ai l ed t o

r espond t o Tai t ano’ s mot i on f or an expedi t ed hear i ng. The

ar bi t r at or or der ed t he f i l i ng of a pr e- hear i ng st at ement .Debt or f i l ed hi s st at ement consi st i ng of t went y- t hr ee l i nes wi t h

vi r t ual l y no di scussi on of t he r eal i ssues i n t he case and no

ci t at i ons t o any l egal aut hor i t y. 8

The ar bi t r at i on hear i ng t ook pl ace on J une 3, 2010. I n

suppor t of her case, Tai t ano t est i f i ed. Debt or t est i f i ed as an

adver se wi t ness. St acy Ri ssone t est i f i ed af t er debt or .



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Ri ssone, al so an al l eged vi ct i m of debt or ’ s f r aud, had del i ver ed

$25, 000 t o hi m based upon hi s r epr esent at i ons t hat he coul d

gener at e a pr of i t f or her f r om t he pur chase and sal e of

aut omobi l es.Debt or pr esent ed no t est i mony or exhi bi t s i n hi s def ense

and r est ed hi s case af t er t he cl ose of Tai t ano’ s case. Debt or

al so pr ovi ded no expl anat i on as t o why the “key wi t nesses”,

whose al l eged unavai l abi l i t y had caused t he mat t er t o be

cont i nued f or si x mont hs, were not pr oduced as promi sed.

On J une 11, 2010, t he ar bi t r at or i ssued a wr i t t en deci si on,

f i ndi ng f or Tai t ano on her cl ai ms of f r aud and conver si on. The

ar bi t r at or al so not ed t hat debt or f i l ed a ver i f i ed count er cl ai m

i n t he case on Apr i l 14, 2009, al l egi ng causes of act i on f or

abuse of pr ocess, negl i gence, conver si on, and at t or neys’ f ees,

but debt or pr esent ed no case, gave no evi dence, and i n f act , di d

not ment i on hi s count er cl ai m at al l i n t he ar bi t r at i on. The

ar bi t r at or f ound t hat t he count er cl ai m was asser t ed f or t hei mpr oper pur pose of har ass i ng Tai t ano, causi ng needl ess del ay,

and i ncreasi ng t he cost of l i t i gat i on t o Tai t ano i n vi ol at i on of

Nev. Rul e Ci v. Pr oc. 11( b) and debt or shoul d be subj ect t o

sanct i ons under subsect i on ( c) of t he r ul e. The ar bi t r at or al so

f ound t hat debt or l i ed under oat h when he st ated t hat he di d not

r ecei ve any cash f r om Ms. Tai t ano.

The ar bi t r at or awar ded Tai t ano $30, 000 i n gener al damages,

$20, 000 i n puni t i ve damages, and at t orneys’ f ees i n t he amount

of $3, 000, wi t h i nt er est on t he $30, 000, and cost s. The awar d

f ur t her not ed ( 1) t hat debt or shoul d be f ound to be the owner of

t he mobi l e home subj ect t o t he cont r act of sal e t o Aqui no and



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9 Thi s r ul e, ent i t l ed “Sanct i ons” pr ovi des:

( A) The f ai l ur e of a par t y or an at t or ney t o ei t herpr osecut e or def end a case i n good f ai t h dur i ng t he

ar bi t r at i on pr oceedi ngs shal l const i t ut e a wai ver of t he r i ght t o a t r i al de novo.

( B) I f , dur i ng t he pr oceedi ngs i n t he t r i al de novo,t he di st r i ct cour t det er mi nes t hat a par t y or at t or neyengaged i n conduct desi gned to obst r uct , del ay orot her wi se adver sel y af f ect t he ar bi t r at i on pr oceedi ngs,i t may i mpose, i n i t s di scret i on, any sanct i onaut hor i zed by N. R. C. P. 11 or N. R. C. P. 37.

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Kang ent er ed i nt o August 9, 2008; ( 2) t hat debt or shoul d be

f ound to have del i ver ed t o Tai t ano the t i t l e t o t he mobi l e home

as secur i t y f or t he $30, 000; and ( 3) t hat t he pr ej udgment wr i t

of at t achment and gar ni shment pr esent l y i n ef f ect shoul d becont i nued i n ef f ect pendi ng j udgment and execut i on and

r esol ut i on of how payment s ar e t o be made by Aqui no and Kang.

On J une 22, 2010, debt or f i l ed a r equest f or a t r i al de

novo. Tai t ano f i l ed a “Mot i on f or Or der t o St r i ke Def endant ’ s

Request f or Tr i al De Novo Pur suant t o Nev. Ar bi t r at i on Rul e 22”9

on t he gr ounds t hat debt or f ai l ed t o def end hi s case dur i ng t he

ar bi t r at i on pr oceedi ng i n good f ai t h and had engaged i n conduct

desi gned t o obst r uct , del ay or ot her wi se adver sel y af f ect t he

ar bi t r at i on pr oceedi ng. Debt or ’ s af f i davi t i n r esponse, whi ch

he appar ent l y f i l ed pr o se, essent i al l y bl amed McKenna, hi s

at t or ney, f or debt or ’ s f ai l ur e t o pr oduce wi t nesses, t est i f y or

produce documents.

On Oct ober 12, 2010, t he st at e di st r i ct cour t hel d ahear i ng on t he mat t er and t ook t he mat t er under submi ss i on. On

Oct ober 27, 2010, t he st at e cour t ent er ed det ai l ed Fi ndi ngs of



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10 Debt or ’ s chapt er 13 case became subj ect t o di smi ssal duet o t he f act t hat he di d not appear at t he cont i nued § 341ameet i ngs. Debt or advi sed t he chapt er 13 t r ust ee t hat he woul dconsent t o di smi ssal of hi s case. The t r ust ee f i l ed a mot i on t odi smi ss based on unr easonabl e and pr ej udi ci al del ay. The t r ust eel at er suppl ement ed hi s di smi ssal mot i on, suggest i ng t hat debt or ’ scase be conver t ed r ather t han di smi ssed on t he gr ound that

debt or ’ s case was si mpl y a cont i nuat i on of hi s ef f or t s t o del ayand/ or compl et el y avoi d col l ect i on act i on r el at ed t o t he r esul t sof t he st at e cour t l i t i gat i on wi t h Tai t ano and Ri ssone. Thet r ust ee poi nt ed out t hat debt or ’ s schedul es showed no r egul ari ncome ot her t han cont r i but i ons f r om f ami l y members t hatcoi nci dent al l y f aci l i t at ed a budget j ust suf f i ci ent t o r epaydebt or ’ s admi ni st r at i ve expenses and schedul ed pr i or i t y t axdebt s. The bankrupt cy cour t conver t ed debt or ’ s case t o chapt er 7on Oct ober 25, 2011.

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Fact , Concl usi ons of Law, and J udgment . The st at e cour t

i ncor por at ed t he ar bi t r at or ’ s f i ndi ngs i nt o i t s own. I n i t s

concl usi ons of l aw, t he st at e cour t f ound, among ot her t hi ngs,

t hat debt or f ai l ed t o def end t he case i n good f ai t h dur i ng t hear bi t r at i on pr oceedi ngs and t her ef or e hi s f ai l ur e t o do so

const i t ut ed a wai ver of hi s r i ght t o a t r i al de novo.

Accor di ngl y, t he st at e cour t st r uck debt or ’ s r equest f or a t r i al

de novo and ent ered j udgment i n f avor of Tai t ano.

The Bankruptcy Proceedings

On J une 2, 2011, debt or f i l ed hi s chapt er 13 pet i t i on,

whi ch was l ater conver t ed t o one under chapt er 7. 10

On August 2, 2011, Tai t ano f i l ed an adver sar y compl ai nt

seeki ng t o have t he st ate cour t j udgment decl ared a

nondi schar geabl e debt based on f r aud.

On Febr uary 21, 2012, Tai t ano f i l ed her MSJ based on t he

st at e cour t j udgment , t he ar bi t r at or ’ s f i ndi ngs of f r aud and t he

doct r i ne of i ssue pr ecl usi on.



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11 The act ual t i t l e of t he document was “Mot i on f orExtensi on of Ti me to Fi l e Opposi t i on t o Mot i on f or Summar y J udgment f or Di schar geabi l i t y; or , Pl ead i n t he Al t er nat i ve,Opposi t i on t o Mot i on f or Summary J udgment and Mot i on t o Wi t hdr awas Counsel . ” We t ake j udi ci al not i ce of debt or ’ s opposi t i on t o Tai t ano’ s summar y j udgment and hi s suppl ement wi t h at t achedexhi bi t s whi ch were docket ed and i maged by t he Bankr upt cy Cour ti n t hi s case. At wood v. Chase Manhat t an Mort g. Co.

( I n r e At wood) , 293 B. R. 227, 233 n. 9 ( 9t h Ci r . BAP 2003) .12 Thi s evi dence consi st ed of numer ous af f i davi t s of

i ndi vi dual s who wor ked wi t h Chr i st i na Ho, debt or ’ s ex- gi r l f r i endand t he mother of hi s son. Ho’ s co- worker s decl ared t hat Ho hadent er ed i nt o a conspi r acy wi t h Tai t ano and Ri ssone t o def r auddebt or and r ui n hi m f i nanci al l y. I t does not appear t hat t heseaf f i davi t s wer e f i l ed i n t he ar bi t r at i on pr oceedi ng nor i s t her e

( cont i nued. . . )

- 9-

On Mar ch 19, 2012, at t or ney Zach Coughl i n, f i l ed a l at e

opposi t i on11 on debt or ’ s behal f . The opposi t i on, of whi ch we

have t aken j udi ci al not i ce, cover ed a number of gr ounds. Fi r st ,

i t addr essed t he r ol e of Coughl i n, who appar ent l y was l i st ed ast he at t or ney of r ecor d i n t he adver sary, but who was actual l y

ghost wr i t i ng debt or ’ s pl eadi ngs. Coughl i n sought t o wi t hdr aw.

Next , t he opposi t i on cont ai ned “poi nt s and aut hor i t i es” under

whi ch numerous cases addr essi ng br each of f i duci ary dut y under

§ 523( a) ( 4) wer e ci t ed wi t h l i t t l e anal ysi s or di scussi on.

Thi r d, debtor r equest ed t he bankrupt cy cour t vacat e t he st at e

cour t j udgment based on hi s counsel ’ s f ai l ur e t o “zeal ousl y

advocat e” debt or ’ s posi t i on dur i ng t he ar bi t r at i on hear i ng,

cont endi ng t hi s was excusabl e negl ect under Ci vi l Rul e 60( b)

( i ncor por at ed by Rul e 9024) . Four t h, debt or asser t ed t hat t he

ar bi t r at or had exceeded hi s j ur i sdi ct i on because he r ul ed on

r eal pr oper t y mat t er s. Fi f t h and l ast , debt or r equest ed t he

j udgment be vacat ed because of newl y di scover ed evi dence.12



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12( . . . cont i nued)any i ndi cat i on t hat debt or moved t o vacate t he j udgment i n t hest at e cour t wi t h t hi s newl y di scover ed evi dence.

- 10-

On May 4, 2012, t he bankr upt cy cour t hear d t he MSJ , but t he

t r anscr i pt r ef l ect s t hat no subst ant i ve ar gument s wer e made wi t h

r espect t o t he mot i on. The bankrupt cy cour t st at ed on t he

r ecor d that i t woul d gr ant t he MSJ based on t he pr ecl usi veef f ect of t he st at e cour t j udgment . The cour t r equest ed

Tai t ano’ s counsel t o f i l e cer t i f i ed copi es of t he st at e cour t

j udgment and r ecor d and t ook t he mat t er under submi ssi on.

On J une 8, 2012, t he bankr upt cy cour t ent ered an order

gr ant i ng Tai t ano’ s MSJ on the gr ounds t hat t he st at e cour t

ar bi t r at or ’ s awar d est abl i shed ever y el ement under § 523( a) ( 2)

and t hus t he doct r i ne of i ssue pr ecl usi on pr event ed debt or f r om

r el i t i gat i ng t hose el ement s i n t he bankrupt cy cour t . Debt or

t i mel y appeal ed.

II. JURISDICTION

The bankrupt cy cour t had j ur i sdi ct i on over t hi s proceedi ng

under 28 U. S. C. §§ 1334 and 157( b) ( 2) ( I ) . We have j ur i sdi ct i on

under 28 U. S. C. § 158.III. ISSUE

Whet her t he bankrupt cy cour t er r ed i n deci di ng t hat t he

st ate cour t j udgment was nondi schar geabl e under § 523( a) ( 2)

based on t he doct r i ne of i ssue pr ecl usi on.

IV. STANDARD OF REVIEW

Si nce t hi s case ar i ses on summary j udgment , t he st andard of

r evi ew i s de novo. Hal ver son v. Skagi t Ct y. , 42 F. 3d 1257, 1259

( 9t h Ci r . 1994) ; Kel l y v. Okoye ( I n r e Kel l y) , 182 B. R. 255, 257



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( 9t h Ci r . BAP 1995) , af f ’ d, 100 F. 3d 110 ( 9t h Ci r . 1996) .

We al so conduct a de novo revi ew of t he bankr upt cy cour t ’ s

det er mi nat i on t hat i ssue pr ecl usi on i s avai l abl e. Lopez v.

Emer g. Ser v. Rest or at i on, I nc. ( I n r e Lopez) , 367 B. R. 99, 103( 9t h Ci r . BAP 2007) . Once we det er mi ne t hat i ssue pr ecl usi on i s

avai l abl e, we r evi ew whether appl yi ng i t was an abuse of

di scr et i on. I d. A bankrupt cy cour t abuses i t s di scr et i on when

i t appl i es t he i ncor r ect l egal r ul e or i t s appl i cat i on of t he

cor r ect l egal r ul e i s “( 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. ” Uni t ed St at es v. Loew, 593 F. 3d 1136,

1139 ( 9t h Ci r . 2010) ( quot i ng Uni t ed St at es v. Hi nkson, 585 F. 3d

1247, 1261–62 ( 9t h Ci r . 2009) ( en banc) ) ( i nt er nal quot at i on mar ks

omi t t ed) .

The quest i on whet her a cl ai m i s di schar geabl e present s

mi xed i ssues of l aw and f act , whi ch we al so r evi ew de novo.

Pekl ar v. I ker d ( I n r e Pekl ar ) , 260 F. 3d 1035, 1037 ( 9t h Ci r .2001) .

V. DISCUSSION

“[ S] ummar y j udgment i s proper ‘ i f t he pl eadi ngs,

deposi t i ons, answer s t o i nt er r ogat or i es and admi ssi ons on f i l e,

t oget her wi t h t he af f i davi t s, i f any, show t hat t her e i s no

genui ne i ssue as t o any mater i al f act and t hat t he movi ng par t y

i s ent i t l ed t o a j udgment as a mat t er of l aw. ’ ” Cel ot ex Cor p.

v. Cat r et t , 477 U. S. 317, 322 ( 1986) . I n maki ng t hi s

det er mi nat i on, conf l i ct s ar e r esol ved by vi ewi ng al l f act s and

r easonabl e i nf er ences i n t he l i ght most f avor abl e t o t he

non- movi ng par t y. Uni t ed St at es v. Di ebol d, I nc. , 369 U. S. 654,



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655 ( 1962) . “I ssue pr ecl usi on i s a pr oper basi s f or gr ant i ng

summary j udgment . ” Bower v. Harr ah’ s Laughl i n, I nc. , 215 P. 3d

709, 720 (Nev. 2009) .

The doct r i ne of i ssue precl usi on appl i es t o bankrupt cydi schar geabi l i t y pr oceedi ngs. Gr ogan v. Gar ner , 498 U. S. 279,

284 ( 1991) . Tai t ano had t he bur den of pr ovi ng t hat t he el ement s

f or i ssue pr ecl usi on wer e met . I n r e Kel l y, 182 B. R. at 258.

To sust ai n t hi s bur den, Tai t ano must have i nt r oduced “a r ecor d

suf f i ci ent t o r eveal t he cont r ol l i ng f act s and pi npoi nt t he

exact i ssues l i t i gat ed i n t he pr i or act i on. Any r easonabl e

doubt as t o what was deci ded by a pr i or j udgment shoul d be

r esol ved agai nst al l owi ng t he [ i ssue pr ecl usi on] ef f ect . ” I d.

Whet her t he st at e cour t ar bi t r at i on awar d, whi ch was

i ncor por at ed i nt o the stat e cour t j udgment , has pr ecl usi ve

ef f ect i s determi ned under Nevada l aw. See Gayden v. Nour bakhsh

( I n r e Nour bakhsh) , 67 F. 3d 798, 800 ( 9t h Ci r . 1995) . The

Nevada Supr eme Cour t has hel d t hat t he doct r i ne of i ssuepr ecl usi on appl i es t o ar bi t r at i on awar ds. I nt ’ l Assn. of

Fi r ef i ght er s, Local 1285 v. Ci t y of Las Vegas, 823 P. 2d 877, 880

( Nev. 1991) ; see al so Khal i gh v. Hadaegh ( I n r e Khal i gh) ,

338 B. R. 817, 823 ( 9t h Ci r . BAP 2006) ( “Si nce t he conf i r mat i on

of a pr i vat e ar bi t r at i on awar d by a st at e cour t has t he st at us

of a j udgment , f eder al cour t s must , as a mat t er of f ul l f ai t h

and cr edi t , af f or d t he conf i r mat i on t he same pr ecl usi ve

consequences as woul d occur i n st at e cour t . ”) , af f ’ d, 506 F. 3d

956 ( 9t h Ci r . 2007) .

I n Nevada, t he el ement s necessary f or appl i cat i on of i ssue

pr ecl usi on ar e: ( 1) t he i ssues must be i dent i cal ; ( 2) t he



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13 These ar gument s have been wai ved. Smi t h v. Mar sh,194 F. 3d 1045, 1052 ( 9t h Ci r . 1999) .

14 Thi s asser t i on i s not accur at e. The r ecor d r ef l ect s thathe was cal l ed as an adver se wi t ness and t est i f i ed.

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i ni t i al r ul i ng must be f i nal and on t he mer i t s; ( 3) t he par t y

agai nst whomt he j udgment i s assert ed must be a part y or be i n

pr i vi t y wi t h a par t y i n t he pr i or case; and ( 4) t he i ssue must

have been act ual l y and necessar i l y l i t i gat ed. Howar d v.Sandoval ( I n r e Sandoval ) , 232 P. 3d 422, 423 ( Nev. 2010) ( ci t i ng

Fi ve St ar Capi t al v. Ruby, 194 P. 3d 709, 713 ( Nev. 2008) ) .

At t he out set , we obser ve t hat t he recor d shows t he second

and t hi r d el ement s of i ssue pr ecl usi on have been met : t he st at e

cour t j udgment i s f i nal and was on t he mer i t s, and t he par t i es

are t he same. Debt or does not chal l enge t hese r equi r ement s on

appeal . 13

A. Issue Preclusion: The Actually Litigated Requirement

Debt or cont ends f i r st t hat t he out come of t hi s case depends

upon whet her hi s al l eged f r audul ent conduct was “act ual l y and

necessar i l y l i t i gat ed” i n t he pr i or st at e cour t act i on. Debt or

ar gues t hat t he i ssues r egar di ng hi s f r aud do not meet t he

act ual l y l i t i gat ed requi r ement because he had i ncompet entcounsel and t hus r el evant evi dence was not consi der ed; i . e. , he

pr esent ed no t est i mony, 14 document s or ot her evi dence, i n spi t e

of hi s wi l l i ngness and pr epar at i ons t o do so. Due t o t he

i ncompet ence of hi s at t or ney, debt or ar gues, he di d not pr esent

a def ense i n t he st at e cour t ar bi t r at i on. He t hus mai nt ai ns

t hat t he j udgment obt ai ned by Tai t ano was aki n t o a def aul t

j udgment and, gener al l y, def aul t j udgment s ar e not ent i t l ed t o



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pr ecl usi ve ef f ect . Debt or f ur t her asser t s that appl i cat i on of

i ssue pr ecl usi on under t hese ci r cumst ances woul d be unf ai r .

Debt or ’ s ar gument s t hat t he st at e cour t pr oceedi ng was aki n

t o a def aul t pr oceedi ng ar e nei t her suppor t ed by the r ecor d nordoes t he st at e cour t j udgment r esembl e t he t ype of def aul t

j udgment whi ch i s not ent i t l ed t o i ssue precl usi on under Nevada

l aw. I n Nevada, def aul t j udgment s ar e gener al l y not gi ven

pr ecl usi on ef f ect . I n r e Sandoval , 232 P. 3d 422. Ther e, a

def aul t j udgment was ent ered agai nst Sandoval based on hi s

f ai l ur e t o answer. The Nevada Supr eme Cour t f ound t hat t here

was no evi dence t hat Sandoval had knowl edge of t he case bef ore

t he def aul t j udgment agai nst hi m was ent er ed, he ent er ed no

appear ance and di d not par t i ci pat e i n any manner i n t he pr i or

case, and the j udgment di d not make any speci f i c f i ndi ngs of

f act t hat wer e est abl i shed t hr ough evi dence. Under t hese

ci r cumst ances, t he cour t hel d t hat t he i ssues wer e not act ual l y

and necessar i l y l i t i gat ed and t hus i ssue pr ecl usi on di d notappl y. I d. at 425.

The f act s i n t hi s case ar e not even cl ose t o t hose i n

Sandoval . Her e, debt or subst ant i al l y par t i ci pat ed i n t he st at e

cour t l awsui t and ar bi t r at i on pr oceedi ng by f i l i ng a

count er cl ai m, r equest i ng cont i nuances of t he ar bi t r at i on hear i ng

and f i l i ng a pr e- hear i ng st at ement . Debt or was deposed. He

al so appear ed at t he ar bi t r at i on hear i ng wi t h hi s counsel , who

cr oss- exami ned Tai t ano and her wi t nesses and obj ected t o

evi dence. Af t er t he ar bi t r at or ’ s awar d was i ssued, debt or moved

f or a t r i al de novo, f i l ed an af f i davi t r egar di ng hi s at t or ney’ s

al l eged i ncompet ence, and hi s at t or ney appear ed at t he hear i ng



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when t he st at e cour t deni ed hi s mot i on. The st at e cour t ’ s

r ul i ng on t he t r i al de novo i ndi cat ed t hat i t deni ed debt or ’ s

mot i on because debt or f ai l ed t o def end hi s case i n good f ai t h

dur i ng t he ar bi t r at i on pr oceedi ngs. On t hese f act s, t he st at ecour t j udgment i s not aki n t o a def aul t j udgment . Ther ef or e,

unl ess debt or gai ns some t r act i on f r om hi s at t or ney mal pr act i ce

asser t i ons, t he act ual l y and necessar i l y l i t i gat ed pr ong i s met .

The Nevada Supreme Cour t has not di r ect l y addressed t he

i ssue of whet her t he i nadequat e pr esent at i on of evi dence or

at t or ney mal pr act i ce dur i ng t he f i r st case pr event s t he j udgment

f r om bei ng gi ven pr ecl usi ve ef f ect i n t he second case. Absent a

cont r ol l i ng st at e cour t deci si on, we pr edi ct how t he hi ghest

st at e cour t woul d deci de t he i ssue. Sec. Pac. Nat ’ l Bank v.

Ki r kl and ( I n r e Ki r kl and) , 915 F. 2d 1236, 1239 ( 9t h Ci r . 1990) .

Addr essi ng an ar gument si mi l ar t o t he one debt or makes here, t he

Thi r d Ci r cui t hel d t hat a pl ai nt i f f was precl uded f r om r ai si ng

an i ssue i n a second act i on wher e t he pl ai nt i f f al l eged t hat hi sat t or ney’ s f ai l ur e t o di scover and pr esent r eadi l y avai l abl e

evi dence had caused hi s def eat on t hat i ssue i n t he f i r st

act i on. Laganel l a v. Br aen ( I n r e Br aen) , 900 F. 2d 621 ( 3r d

Ci r . 1990) , cer t . deni ed, 498 U. S. 1066 ( 1991) , abr ogat ed on

ot her gr ounds by Gr aham v. I . R. S. ( I n r e Gr aham) , 973 F. 2d 1089,

1099–1101 ( 3r d Ci r . 1992) .

I n Br aen, t he pl ai nt i f f ar gued t hat hi s at t or ney act ed

negl i gent l y by f ai l i ng t o exami ne i mpor t ant document s and t o

make pot ent i al l y hel pf ul ar gument s at t r i al , t hus causi ng hi m t o

l ose on t he i ssue of whet her he had act ed wi t h mal i ce i n

pr osecut i ng a cr i mi nal compl ai nt . 900 F. 2d at 628. Not i ng “t he



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gener al r ul e . . . t hat ‘ i gnor ance or car el essness of an

at t or ney’ does not pr ovi de a basi s f or r el i ef f r om t he ef f ect s

of an adver se ci vi l j udgment [ ] ”, t he cour t hel d t hat t he f act

t hat t he at t or ney di d not “put f or war d al l t her e was t o t ender ”di d not def eat i ssue pr ecl usi on. I d. at 629.

The cour t f ur t her obser ved: “The onl y cases we have f ound

i n whi ch a l awyer ’ s def al cat i on has been hel d t o war r ant r el i ef

f r omt he consequences of a j udgment are cases i n whi ch t he

cl i ent was depr i ved of hi s day i n cour t because hi s l awyer

f ai l ed al t oget her t o r espond t o a mot i on f or def aul t j udgment or

a mot i on f or summar y j udgment . . . . Br aen cl ear l y had a f ul l

and f ai r oppor t uni t y t o l i t i gat e hi s case. The t r i al l ast ed f or

t wo weeks, and hi s at t or ney mount ed a subst ant i al def ense. ” I d.

Usi ng si mi l ar r easoni ng, numer ous other cour t s are i n

accor d. See Bal l ard Condo. Owners Ass ’ n v. Gen. Sec. I ndem. Co.

of AZ, 2010 WL 4683721 (W. D. Wash. 2010) ( f i ndi ng that “[ t ] he

concept of i nj ust i ce does not appl y si mpl y because pl ai nt i f f woul d l i ke t o r ear gue t he i ssue i n a case wher e counsel ’ s

pr ocedur al er r or r esul t ed i n an adver se r ul i ng. . . . Pl ai nt i f f

had a f ul l and f ai r oppor t uni t y t o l i t i gat e t he i ssue . . . and

counsel ’ s procedur al er r or s do not wor k t o cr eat e an

i nj ust i ce. ”) ; I n r e Wi l l i ams, 282 B. R. 267, 277 ( Bankr . N. D. Ga.

2002) ( at t or ney’ s mal pr act i ce i s not a per se deni al of a f ul l

and f ai r oppor t uni t y t o l i t i gat e; i nqui r y i s whet her par t y had

adequate not i ce of t he i ssue and was af f or ded t he oppor t uni t y to

par t i ci pat e i n i t s det er mi nat i on) ; I n t he Mat t er of Vi ctor

Di st r i b. Co. , 11 B. R. 242, 246 n. 3 ( Bankr . E. D. Va. 1981) ( “I t

i s suf f i ci ent t hat t he st at us of t he sui t i s such t hat t he



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15 I n any event , we have onl y debt or ’ s concl usory al l egat i ont hat hi s at t or ney was i ncompet ent bef or e us. Ther e i s not hi ng i nt he r ecor d t hat shows debt or ’ s counsel ’ s r epr esent at i on f el lbel ow an obj ect i ve st andar d of r easonabl eness. I ndeed, af t ernot i ng t hat debt or l i ed under oat h when he st ated he di d notr ecei ve any cash f r om Tai t ano, t he ar bi t r at or f ound:

[ T] hi s f i ndi ng i s not i nt ended t o suggest t hatMr . Gessi n’ s present counsel had ai ded or abet t ed orassi st ed Mr . Gessi n’ s l yi ng under oat h; Mr . Gessi n’ spr esent counsel di d a very competent and pr of essi onal j ob wi t h a ver y ski l l f ul j ob of cr oss - exami nat i on of wi t nesses, general conduct of t he case he had t o workwi t h, appr opr i at e obj ect i ons, and ski l l ed ar gument. . . .

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par t i es mi ght have had t hei r sui t di sposed of on t he mer i t s i f

t hey had pr esent ed al l t hei r evi dence, and t he cour t had

pr oper l y under st ood t he f act s, and cor r ect l y appl i ed t he l aw t o

t he f act s . ”) .On t he basi s of t he f or egoi ng aut hor i t y, we pr edi ct t hat

t he Nevada Supr eme Cour t woul d f ol l ow t he r easoni ng i n Br aen and

f i nd t hat debt or ’ s cl ai m of at t or ney i ncompet ence woul d not

def eat i ssue pr ecl usi on under t he f act s of t hi s case. 15

Mor eover , debt or never sought any rel i ef i n t he st at e cour t

based on hi s cl ai m of at t or ney i ncompet ence i f t he r ecor d t her e

woul d have est abl i shed i ncompetence, as opposed t o consi dered

st r at egy. See Pel l egr i ni v. St at e, 34 P. 3d 519, 534 ( Nev. 2001)

( pr oper pr ocedur e when at t empt i ng t o cl ai m i nef f ect i ve

assi st ance of counsel i s by post - t r i al mot i ons i n t he under l yi ng

case) . Ther ef or e, we concl ude t hat t he act ual l y and necessar i l y

l i t i gated r equi r ement was met .

B. Justifiable Reliance and § 523(a)(2)(A)

The ar bi t r at or f ound t hat al l t he el ements f or f r aud under



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Nevada l aw had been met , i ncl udi ng t hat Tai t ano had “j ust i f i abl y

r el i ed upon Mr . Gessi n’ s f al se r epr esent at i on of mat er i al

f act s. ” Debt or ar gues t hat t her e i s no basi s f or t he

ar bi t r at or ’ s f act ual f i ndi ng r egar di ng Tai t ano’ s j ust i f i abl er el i ance upon debt or ’ s r epr esent at i ons and t hus t he f i ndi ng i s

cl ear l y er r oneous.

Accor di ng t o debt or , t he under l yi ng f act s do not show

j ust i f i abl e r el i ance. He cont ends t hat wi t hi n one week of

meet i ng hi m, a t ot al st r anger on a dat i ng websi t e, Tai t ano

cashed out her CD i n t he amount of approxi mat el y $30, 000 and

gave i t t o hi m i n cash, i n a shoe box. Debt or poi nt s out t hat

Tai t ano i s an educat ed adul t , not young, and a t eacher wi t h

access t o i nf or mat i on and t echnol ogi es. Gi ven t hese f act s,

debt or argues, “[ h] er r el i ance on st atement s made by a man on a

dat i ng websi t e wi t hout gar ner i ng addi t i onal i nf or mat i on bef or e

ent r ust i ng si gni f i cant f unds to a st r anger , i s absur d. ” Debt or

al so cont ends t hat si nce j ust i f i abl e r el i ance i s a f actuali ssue, i t cannot be subj ect t o summary j udgment .

Thi s l at t er ar gument i s mi spl aced. The bankrupt cy cour t ’ s

deci si on on summary j udgment was based on the doct r i ne of i ssue

pr ecl usi on. Under el ement one of t hat doct r i ne, t he quest i on i s

whet her t he i dent i cal i ssue was deci ded i n t he pr evi ous act i on,

not whet her t her e was a f actual di sput e er r oneousl y deci ded.

The er r oneousl y deci ded i ssue i s one f or appeal i n t he st at e

cour t . Her e, we concl ude t hat t he i dent i cal i ssue of

j ust i f i abl e r el i ance was deci ded i n t he ar bi t r at i on proceedi ng.

J ust i f i abl e r el i ance i s an el ement of f r aud under Nevada l aw and

f or pur poses of nondi schar geabi l i t y based on f r aud under



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16 Debt or does not chal l enge t he ot her el ement s f or f r audwhi ch ar e the same under Nevada l aw and § 523( a) ( 2) ( A) .

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§ 523( a) ( 2) ( A) . See Lubbe v. Barba, 540 P. 2d 115, 117 ( Nev.

1975) ( st at i ng t hat pl ai nt i f f has bur den of pr ovi ng f i ve

el ement s f or f r aud, i ncl udi ng j ust i f i abl e r el i ance upon t he

mi srepr esent at i on) ; Apt e v. J apr a, M. D. , F. A. C. C. , I nc. ( I n r eApt e) , 96 F. 3d 1319, 1332 ( 9t h Ci r . 1996) ( not i ng t hat al t hough

t he st at ut e does not st at e what degr ee of r el i ance i s necessary

f or appl i cat i on of § 523( a) ( 2) ( A) , t he credi t or ’ s r el i ance need

be onl y j ust i f i abl e, not r easonabl e) . 16

Under Nevada l aw, t he j ust i f i abl e rel i ance r equi r ement does

not i mpose on a par t y any dut y t o i nvest i gat e absent f act s t hat

shoul d al er t hi m t hat hi s r el i ance i s unr easonabl e. Col l i ns v.

Bur ns, 741 P. 2d 819, 821 ( Nev. 1987) . “The t est i s whet her t he

r eci pi ent has i nf or mat i on whi ch woul d serve as a danger si gnal

and a r ed l i ght t o any nor mal per son of hi s i nt el l i gence and

exper i ence. ” I d. The Nevada Supr eme Cour t f ur t her noted:

[ A] per son gui l t y of f r aud shoul d not be per mi t t ed t ouse the l aw as hi s shi el d, ‘ when t he choi ce i s bet ween

t he t wo - f r aud and negl i gence - negl i gence i s l essobj ect i onabl e t han f r aud. Though one shoul d not bei nat t ent i ve t o one’ s busi ness af f ai r s, t he l aw shoul dnot per mi t an i nat t ent i ve per son t o suf f er l oss at t hehands of a mi sr epr esent er . I d.

Li kewi se, f or pur poses of § 523( a) ( 2) ( A) :

[ A] per son i s j ust i f i ed i n r el yi ng on a r epr esent at i onof f act ‘ al t hough he mi ght have ascer t ai ned t hef al si t y of t he r epr esent at i on had he made ani nvest i gat i on. ’ Al t hough one cannot cl ose hi s eyesand bl i ndl y r el y, mer e negl i gence i n f ai l i ng t o

di scover an i nt ent i onal mi sr epr esent at i on i s nodef ense t o f r aud.

I n r e Apt e, 96 F. 3d at 1322.



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Dur i ng t he cour se of t he ar bi t r at i on, t he el ement s t o

est abl i sh f r aud, i ncl udi ng t hat of j ust i f i abl e r el i ance, wer e

squar el y bef or e t he ar bi t r at or . Fromt he begi nni ng, t he

ar bi t r at or caut i oned t he par t i es t hat hi s i mpr essi on f r om t hef i l e, i ncl udi ng t hei r pr e- hear i ng st at ement s, was t hat wi t ness

cr edi bi l i t y mi ght be an i mpor t ant f act or i n t he case. The

ar bi t r at or , af t er hear i ng t est i mony, f ound Tai t ano’ s t est i mony

t o be credi bl e and ul t i mat el y concl uded t hat t he j ust i f i abl e

r el i ance r equi r ement had been met . The ar bi t r at or was f ul l y

awar e of how t he par t i es met , Tai t ano’ s educat i on, her age and

her occupat i on. I n cont r ast , t he ar bi t r at or f ound debt or l i ed

under oat h and t hat he was a “r emar kabl y ski l l ed pr evar i cat or ”.

We concl ude t hat i ssue pr ecl usi on i s especi al l y appr opr i at e i n

t hi s case on t he f actual i ssue of j ust i f i abl e r el i ance — t he

di sput e essent i al l y boi l ed down t o a bat t l e of credi bi l i t y.

Fur t her , t he ar bi t r at or f ound Tai t ano pr oved t he el ement s

of f r aud, i ncl udi ng j ust i f i abl e r el i ance, by cl ear andconvi nci ng evi dence. See Al ber t H. Wohl er s & Co. v. Bar t gi s,

969 P. 2d 949, 957 ( Nev. 1998) . As expl ai ned i n Gr ogan v.

Gar ner , t he cl ear and convi nci ng st andar d i s a hi gher st andar d

of pr oof t han t he pr eponderance of t he evi dence st andard, and

wher e t he i ssues wer e subj ect t o an equal or gr eat er st andar d of

pr oof i n t he pr i or l i t i gat i on, t hose i ssues ar e el i gi bl e f or

i ssue pr ecl usi on i n t he subsequent l i t i gat i on i f t he ot her

el ement s f or i ssue pr ecl usi on ar e met . 498 U. S. 279, 284- 85

( 1991) .

I n sum, because t he f actual i ssue of j ust i f i abl e r el i ance

was deci ded by t he ar bi t r at or , t her e wer e no i ssues of mat er i al



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f act r emai ni ng t o be t r i ed i n t he adver sary pr oceedi ng on t hi s

i ssue. Ther ef or e, Tai t ano was ent i t l ed t o j udgment as a mat t er

of l aw.

C. Discretion

Havi ng concl uded t hat i ssue pr ecl usi on was avai l abl e

because al l of t he doct r i ne’ s r equi r ement s wer e met , we

consi der next whet her t he bankrupt cy cour t pr oper l y exer ci sed

i t s di scret i on t o appl y i t . “The di scret i onar y aspect of i ssue

pr ecl usi on i s set t l ed as a mat t er of f eder al l aw. ” I n r e Lopez,

367 B. R. at 107- 08. Nevada l aw i s i n accor d, hol di ng t hat once

i t i s det er mi ned t hat i ssue pr ecl usi on i s avai l abl e, t he act ual

deci si on t o appl y i t i s l ef t t o t he di scr et i on of t he “t r i bunal

i n whi ch i t i s i nvoked. ” Redr ock Val l ey Ranch v. Washoe Cnt y. ,

254 P. 3d 641, 646- 47 ( Nev. 2011) . The doct r i ne of i ssue

pr ecl usi on i s gr ounded i n consi der at i ons of basi c f ai r ness t o

t he l i t i gant s. I n r e Sandoval , 232 P. 3d at 424- 25.

The bankrupt cy cour t obser ved i n i t s f i ndi ngs of f act t hatt he st at e cour t j udgment f ound debt or gui l t y of “speci f i c and

det ai l ed pr ocedur al abuse and f r aud on t he cour t i n del ayi ng and

bur deni ng t he pr ocess and i n avoi di ng t he cour t ’ s prej udgment

at t achment . I t char act er i zes Mr . Gessi n as a ‘ r emar kabl y

ski l l ed pr evar i cat or , ’ and f i nds he commi t t ed per j ur y dur i ng hi s

t est i mony i n t he ar bi t r at i on hear i ng. ”

The bankrupt cy cour t ’ s f i ndi ngs bel i e any suggest i on t hat

debt or was a vi ct i m of t he ar bi t r at i on pr ocedur es t hemsel ves or

of hi s al l egedl y i ncompet ent at t or ney. Ther e ar e no mi l i t at i ng

f act or s i n t he r ecor d t hat we coul d f i nd whi ch woul d cut i n

f avor of not appl yi ng t he doct r i ne of i ssue pr ecl usi on under



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t hese ci r cumst ances. I n f act , t he r ecor d suggest s t hat denyi ng

pr ecl usi ve ef f ect t o the st at e cour t j udgment woul d per mi t

debt or t o f ur t her del ay t he pr oceedi ngs and per haps ul t i mat el y

avoi d payment of t he debt by del i ber at e abuse of t he j udi ci alpr ocess. As a r esul t , t he pol i ci es behi nd t he appl i cat i on of

i ssue pr ecl usi on — “conser vi ng j udi ci al r esour ces, [ ]

mai nt ai ni ng consi st ency, and [ ] avoi di ng oppr essi on or

har assment of t he adver se par t y” — r emai n compel l i ng.

I n r e Sandoval , 232 P. 3d at 425. Accor di ngl y, we di scern no

abuse of di scr et i on i n t he bankrupt cy cour t ’ s appl i cat i on of

i ssue pr ecl usi on t o t he st at e cour t j udgment .

VI. CONCLUSION

For t he reasons st ated, we AFFI RM.

In re: John D. Gessin, 9th Cir. BAP (2013)

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Transcript of In re: John D. Gessin, 9th Cir. BAP (2013)