Szanto v. Szanto, Case No. 3:18-cv-951-SI
| Decision Date | 18 December 2020 |
| Docket Number | Bankr. Ct. Case No. 16-33185-pcm7,Case No. 3:18-cv-951-SI,Adv. Pro. No. 16-3114-pcm,Case No. 3:18-cv-952-SI |
| Parties | PETER SZANTO, Appellant, v. EVYE SZANTO, et al., Appellees. |
| Court | U.S. District Court — District of Oregon |
Peter Szanto, 11 Shore Pine, Newport Beach, CA 92657. Appellant Pro Se.
Nicholas J. Henderson, MOTSCHENBACHER & BLATTNER LLP, 117 SW Taylor Street, Suite 300 Portland, Oregon 97204. Of Attorneys for Appellees Evye Szanto, Victor Szanto, Nicole Szanto, Kimberley Szanto, Mariette Szanto, Anthony Szanto, Austin Bell, John Barlow, and Barbara Szanto Alexander.
These two cases come to the District Court as appeals from the order and judgment issued by the U.S. Bankruptcy Court for the District Oregon on the parties' cross-motions for summary judgment in an adversary proceeding involving Appellant Peter Szanto (Appellant) and Appellees Evye Szanto, Victor Szanto, Nicole Szanto, Kimberley Szanto, Mariette Szanto, Anthony Szanto, Austin Bell, John Barlow, and Barbara Szanto Alexander (Appellees).1 Any other orders or rulings of the Bankruptcy Court mentioned in Appellant's briefs are not part of the Notice of Appeal and the Court does not address them in this Opinion and Order. For the reasons below, the Court holds that the Bankruptcy Court did not err in deciding the cross-motions for summary judgment and affirms the decision below.
A district court reviews a bankruptcy court's "findings of fact for clear error and conclusions of law and of mixed questions of law and fact de novo." In re Icenhower, 757 F.3d 1044, 1049 (9th Cir. 2014). "Whether the bankruptcy court properly granted summary judgment . . . presents a question of law that this Court reviews de novo." In re Lane, 959 F.3d 1226, 1229 (9th Cir. 2020). "Leave to amend a complaint is generally within the discretion of the bankruptcy court and is reviewed under the abuse of discretion standard." In re Magno, 216 B.R. 34, 37-38 (B.A.P. 9th Cir. 1997). "A court abuses its discretion when it fails to identify and apply the correct legal rule to the relief requested, or if its application of the correct legal standard was (1) illogical, (2) implausible, or (3) without support in inferences that may be drawn from the facts in the record." In re Roman Catholic Archbishop of Portland in Or., 661 F.3d 417, 424 (9th Cir. 2011) (simplified); see also In re Taylor, 599 F.3d 880, 887-88 (9th Cir. 2010) ().
On August 16, 2016, Appellant filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. This started Bankruptcy Case No. 16-bk-33185-pcm11 (the Main Bankruptcy Case). The Bankruptcy Court later converted that case, over Appellant's objection, to a proceeding under Chapter 7 (). On September 21, 2016, Appellant filed a complaint against Appellees, beginning Case No. 16-ap-3114 (the Adversary Proceeding), the case that is the subject of these appeals.
Appellees filed an ex parte motion for extension of time to respond to the complaint filed in the adversary proceeding. The Bankruptcy Court granted that motion. Appellees filed a motion to dismiss with supporting documentation in response to the complaint, which the Bankruptcy Court treated as a motion for summary judgment. In response, Appellant filed an Amended Complaint. Appellees responded first with another motion to dismiss, and later with an answer and counterclaims.
The parties engaged in discovery and litigated several motions in the Adversary Proceeding, including motions to strike, motions to dismiss, and discovery motions. On August 15, 2017, Appellant filed a motion for partial summary judgment against Appellees' counterclaim for wrongful initiation of civil proceedings. On August 25, 2017, Appellees filed a motion for partial summary judgment, moving defensively against all of Appellant's claims and offensively in favor of their counterclaim for wrongful initiation of civil proceedings. On May 17, 2018, the Bankruptcy Court denied Appellant's motion for summary judgment on Appellees' counterclaim, granted Appellees' motion for summary judgment on Appellant's claims, and denied Appellees' motion for summary judgment on their counterclaim. In ruling onthese motions, the Bankruptcy Court also denied Appellant's request to amend his complaint to add a new claim. This left Appellees' counterclaims for trial. The Bankruptcy Court entered Judgment on the dismissed claims under Rule 54(b) of the Federal Rules of Civil Procedure. Appellant appealed these decisions.
Appellant filed three opening briefs that are somewhat difficult to follow and do not contain a comprehensible structure or organization articulating Appellant's arguments on appeal.2 The Court did its best to decipher Appellant's arguments and addresses only the arguments relevant to these appeals.
Appellant mainly argues that the Bankruptcy Court erred due to the bias of the Bankruptcy Judge. Appellant also argues that the Bankruptcy Court erred in concluding that: (1) Appellant's claims arising from alleged conversion were barred by the statute of limitations; (2) Appellant did not meet his burden to show an issue of fact on his Racketeer Influenced and Corrupt Organizations Act (RICO) claim; (3) Appellant provided no evidence supporting his identity theft and related conspiracy and tax claims; (4) Appellant failed to show a material issue of fact on his claim for breach of fiduciary duty; and (5) Appellant should not be granted leave to amend to add a new claim.3 Appellant also argues that the Bankruptcy Court should have sua sponte awarded Appellant emotional distress damages.
Appellant argues, with much use of capitalization, bolding, and underlining, that the Bankruptcy Court Judge exhibited bias against and "hatred" toward Appellant that caused adverse rulings on every motion filed by or against Appellant. This Court, however, has already addressed Appellant's claims of judicial bias by the Bankruptcy Judge. See Szanto v. Szanto, 2019 WL 1932366, at *5, 8 (D. Or. May 1, 2019). Under the doctrine of issue preclusion, Appellant is estopped from raising the same argument here.
Issue preclusion, also known as collateral estoppel, "is designed to 'bar [ ] successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination.'" Paulo v. Holder, 669 F.3d 911, 918 (9th Cir. 2011) (quoting Taylor v. Sturgell, 553 U.S. 880, 892 (2008)); see also Robi v. Five Platters, Inc., 838 F.2d 318, 322 (9th Cir. 1988) ( . Thus, the party asserting issue preclusion must show: (1) the issue at stake was identical in both proceedings; (2) the issue was actually litigated in the prior proceedings; (3) there was a full and fair opportunity to litigate the issue; and (4) the issue was necessarily decided, also described as necessary or essential to the judgment. Howard v. City of Coos Bay, 871 F.3d 1032, 1041 (9th Cir. 2017).
The Court previously held that Appellant's "assertions are insufficient to show bias or prejudice by the judge in the Bankruptcy Court." Szanto, 2019 WL 1932366, at *5. The issue of the Bankruptcy Judge's bias, therefore, was actually decided, after Appellant had a full and fair opportunity to litigate the issue, in the Court's determination not to grant's Appellant's motion to withdraw the reference. Thus, issue preclusion applies.
Even if issue preclusion did not apply, Appellant raises in this case the same arguments supporting the purported judicial bias that the Court previously rejected—adverse rulings by the Bankruptcy Court that Appellant contends are legally deficient, and the fact that the Bankruptcy Court Judge asked Appellant how to pronounce his last name at the first court hearing rather than perform independent research to figure out the pronunciation. The Court again finds that such conduct is insufficient to show judicial bias sufficient to warrant reversal. See Liteky v. United States, 510 U.S. 540, 550-51, 555-56 (1994).
The Bankruptcy Court granted summary judgment on Appellant's conversion claim and the part of Appellant's claim for intentional or negligent infliction of emotional distress arising from conversion, based on the statute of limitations. The Bankruptcy Court noted that for state law claims, there were choice of law issues between California and Oregon law. For Appellant's conversion claim, the Bankruptcy Court applied Oregon's six-year statute of limitations, noting that California had a shorter, three-year limitations period. For Appellant's intentional or negligent infliction of emotional distress claim, the Bankruptcy Court noted that both Oregon and California have a two-year statute of limitations.
Relevant to the statute of limitations issue is a California state case filed in San Mateo County (San Mateo Case) in 2006 by Paul Szanto and Appellee Victor Szanto (Trustees), the Trustees of the trust of Appellant's parents. Appellee Anthony Szanto later joined the case.Appellant argues that the filing of the San Mateo Case tolls the statute of limitations on Appellant's claims in the Adversary Proceeding. The San Mateo Case began with the Trustees' petition for a court order confirming the transfer of real property into the trust. App'x 1 at 70. Appellant's parents had removed...
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