United States District Court, C.D. California
IN RE RAOUF ROAHDY KHALIL Bankruptcy No. 1:11-bk-16918-MB Adversary No. 1:11-ap-01533-AA
Present: Honorable The CHRISTINA A. SNYDER, U.S. DISTRICT
(IN CHAMBERS) - ORDER AFFIRMING IN PART, AND VACATING AND
REMANDING IN PART, THE BANKRUPTCY COURT'S AMENDED
JUDGMENT AFTER REMAND
Steven Goldman appeals from the Bankruptcy Court's
Amended Judgment after Remand. Doc. 9. Appellee Raouf Roshdy
Khalil filed a response in opposition, and Goldman replied.
Docs. 12, 16. The Court AFFIRMS IN PART and VACATES AND
REMANDS IN PART.
detailed history of this case in set forth in Judge
Morrow's Order Affirming in Part the Decision of the
Bankruptcy Court and Vacating and Remanding in Part. Case No.
2:14-cv-06630-MMM (Doc. 46) (hereinafter “Morrow
Order”). What follows is a summary of the pertinent
and Khalil co-owned a home healthcare company called Care
Level Management Group, LLC (“CLM”). Id.
at 2. In 2007, CLM obtained a $7 million loan from 1st
Century Bank. Id. at 4. When CLM ran into financial
difficulties, 1st Century Bank indicated that it would take
direct action against the company to recover the loan amount.
Id. at 5. Goldman and Khalil entered a Settlement
Agreement, dated May 5, 2008, pursuant to which Goldman
agreed to pay 1st Century Bank the entire $7 million debt, in
exchange for Khalil's promise to reimburse Goldman for
his share of the debt over time. Id. at 5-6.
Specifically, Khalil agreed to “(1) sell his house in
the Sherwood Country Club no later than February 28, 2009,
and pay Goldman 50% of the net proceeds of . . . the sale;
(2) execute a promissory note for his pro rata share of the
$7 million credit line that bore interest at the rate of 5%
annually, and required monthly payments not to exceed $8, 000
(the payments were contingent on Khalil selling his home);
(3) make $500, 000 balloon payments on or before May 31, 2011
and May 31, 2014; (4) obtain a life insurance policy of not
less than $1, 000, 000 naming Goldman as beneficiary by
October 1, 2008; and (5) have his wife execute a spousal
consent form.” Id. at 6.
never made any of the payments required under the Settlement
Agreement. AA 2951-52. However, he testified that he
attempted to sell his house for $5, 995, 000, a price set by
Coldwell-Bankers, and that he later lowered the price to $4.3
million after the onset of the 2008 financial crisis. AA
2963. He further testified that he made brochures and
advertised the property on the internet. AA 2986.
Nonetheless, he never received an offer.
February 2009, Goldman filed an action against Khalil in Los
Angeles County Superior Court, seeking to enforce the
Agreement. Id. at 6. On June 3, 2011, just three
days before the state court action was to go to trial, Khalil
filed a voluntary petition under Chapter 7 of the U.S.
Bankruptcy Code. Id. On September 6, 2011, Goldman
filed an adversary complaint against Khalil, arguing that
Khalil's debt for his share of the $7 million debt was
non-dischargeable. Id. at 7. The bankruptcy court
rejected all of Goldman's arguments. Id. at 8.
Goldman appealed, and Judge Morrow affirmed in part and
vacated and remanded in part. Id. at 13, 56.
appealed to the Ninth Circuit. The Ninth Circuit dismissed
the appeal, holding that it lacked jurisdiction because Judge
Morrow's order was not final. AA 3069. On July 25, 2016,
the Bankruptcy Court issued its Amended Judgment after
Remand. AA 3135-44. Goldman appealed again.
STANDARD OF REVIEW
district court reviews a bankruptcy court's conclusions
of law de novo; findings of fact are reviewed for clear
error. Fed.R.Bankr.P. 8013; In re Gebhart, 621 F.3d
1206, 1209 (9th Cir. 2010). “The clear error standard
is significantly deferential and is not met unless the
reviewing court is left with a definite and firm conviction
that a mistake has been committed.” Fisher v.
Tucson Unified Sch. Dist., 652 F.3d 1131, 1136 (9th Cir.
2011) (citation and quotation marks omitted). Thus, a
bankruptcy court's factual determinations will be
sustained unless they are illogical, implausible, or
“without support in inferences that may be drawn from
the facts in the record.” United States v.
Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009).
argues that the bankruptcy court erred in dismissing his
claims under 11 U.S.C. §§ 523(a)(2)(A),
523(a)(2)(B), 523(a)(4), 523(a)(6), 727(a)(2)(A), 727(a)(4)
(A) & (B), 727(a)(3), and 727(a)(5). Doc. 9.
Additionally, Goldman argues that the bankruptcy court erred
in allowing Khalil to present rebuttal testimony despite his
failure to present a case in chief. Id. Judge Morrow
affirmed the bankruptcy court's dismissal of
Goldman's claims under §§ 523(a)(2)(B),
523(a)(4), 727(a)(4) (A) & (B), 727(a)(3), and 727(a)(5),
as well as its decision to consider Khalil's rebuttal
testimony. Morrow Order at 35, 39, 49, 50-51, 55. In
addition, Judge Morrow partially affirmed the bankruptcy
court's decision with respect to Goldman's claims
under §§ 523(a)(6) and 727(a)(4). Id. at
Morrow's decision is binding on this Court, Thomas v.
Bible, 983 F.2d 152, 154 (9th Cir. 1993), at least
absent a showing that reconsideration is warranted in light
of new material facts or a change in law, L.R 7-18. Goldman
has not identified any new material facts or change in law
that would justify reconsideration of any aspect of Judge
Morrow's order. The appeal is dismissed to the ...