DERRICK K. WATSON, District Judge.
In these consolidated appeals, Appellant Chad Barry Barnes appeals the orders of the U.S. Bankruptcy Court for the District of Hawai`i (1) denying Barnes' motion to stay discharge and lift protective order and (2) discharging Appellee Kristin Kimo Henry.
On April 24, 2019, Barnes filed a notice of appeal, appealing an order of the Bankruptcy Court denying his motion to stay discharge and lift protective order in Henry's bankruptcy proceeding ("the First Henry Bankruptcy Appeal"). On the same day, Barnes filed a notice of appeal, appealing an order of the Bankruptcy Court denying the exact same motion filed in the bankruptcy proceeding of Sea Hawaii Rafting, LLC (SHR and, with Henry, "Appellees") ("the SHR Bankruptcy Appeal"). Also on the same day, Barnes filed a notice of appeal, appealing the order of discharge entered in Henry's bankruptcy proceeding ("the Second Henry Bankruptcy Appeal" and, with the SHR and First Henry Bankruptcy Appeals, "the Bankruptcy Appeals").
Because the orders being appealed in the Bankruptcy Appeals involve common questions of law and fact, and because consolidation would produce savings in time and effort, while causing no inconvenience, delay, or expense, the Court consolidated the Bankruptcy Appeals. See Dkt. No. 5. In the Court's order of consolidation, Barnes was instructed to clearly identify the issue or issues being appealed, clearly explain how the Bankruptcy Court purportedly erred with respect to each issue, and provide legal support for the Bankruptcy Court's purported error.
On August 16, 2019, Barnes filed his opening brief. Dkt. No. 10. Thereafter, Appellees each filed their respective response briefs. Dkt. Nos. 12-13. On November 5, 2019, Barnes filed an errata reply brief. Dkt. No. 15.
This Court reviews a bankruptcy court's factual findings for clear error and its conclusions of law and determinations on mixed questions of law and fact de novo. In re Salazar, 430 F.3d 992, 994 (9th Cir. 2005); In re Hamada, 291 F.3d 645, 649 (9th Cir. 2002).
Boiled down, these Bankruptcy Appeals essentially concern the Bankruptcy Court's decisions to grant Henry a discharge, and to decline to lift a protective order in Henry's Chapter 13 bankruptcy proceeding. While it is evident that Barnes disagrees with these decisions, little reason and virtually no authority is provided explaining why the Bankruptcy Court erred. This, of course, frustrates the Court's task on appeal. Nonetheless, this Court has attempted to perform that task and, below, explains why none of the arguments Barnes makes are relevant and/or meritorious.
In his opening brief, Barnes argues that the Bankruptcy Court erred in denying his motion to stay discharge because a provision of the Bankruptcy Code prohibits a discharge when a debtor fraudulently transfers property of the estate. Dkt. No. 10 at 4-9. The problem with this argument is that Barnes fails to acknowledge that the cited provision-Section 727(a)(2) of Title 11 of the U.S. Code-concerns discharges in Chapter 7 cases. Henry, however, received a Chapter 13 discharge, which is subject to an entirely different statutory provision. See 11 U.S.C. § 1328. Section 727(a)(2), in other words, is simply not helpful in advancing Barnes' position. If anything, Section 727(a)(2) is only harmful to Barnes' position, as it indicates Congress' intent to prohibit a Chapter 7 discharge when property of the estate is fraudulently transferred, but not to do so in a Chapter 13 proceeding.
Barnes next argues that the Bankruptcy Court erred in "relying on the fact that Barnes did not appeal Kris Henry's confirmation order...." Dkt. No. 10 at 9. Inspection of the Bankruptcy Court's order, however, does not reflect that the Bankruptcy Court relied on the failure to appeal Henry's confirmation order. Instead, the order reflects that the Bankruptcy Court merely stated this event as part of the procedural background. See Dkt. No. 1-2 at 3. The failure to appeal Henry's confirmation order simply plays no further role in the Bankruptcy Court's decision to deny the motion Barnes filed.
Barnes also argues that the Bankruptcy Court erred in discharging Henry because Henry was required to personally guarantee an entity's obligations to SHR's bankruptcy trustee. Dkt. No. 10 at 10-11. As with many of Barnes' arguments, no further explanation for this stream of words is provided, nor is any effort made to explain why the foregoing results in any of the Bankruptcy Court's determinations, which are pertinent to these Bankruptcy Appeals, being erroneous. This Court, therefore, spends no further time attempting to decipher the purpose of this argument other than to note that it is rejected.
Barnes argues that the Bankruptcy Court erred in discharging Henry because Henry owes a debt excepted from discharge under Section 1328(a)(4). Id. at 11-14.
Barnes next raises an issue concerning the sale of a vessel and staying an order of the Bankruptcy Court. See Dkt. No. 10 at 14-22. Barnes appears to conclude the discussion of this issue by arguing that the Bankruptcy Court erred in denying his motion to stay discharge and lift protective order because it prevents him from developing his admiralty case and granting the motion would have allowed other appeals to be resolved. Id. at 21. To the extent this argument addresses a finding in the Bankruptcy Court's order-something that is not perfectly evident from the argument itself-it appears to be the Bankruptcy Court's finding that a discharge must be issued to a Chapter 13 debtor provided that certain statutory requirements have been met. See Dkt. No. 1-2 at 8-9. Barnes does not address this finding-more specifically, the statutory language upon which the Bankruptcy Court relied-at all in his argument. Rather, without any support in the context of a Chapter 13 discharge, Barnes appears to ask this Court to ignore clear statutory language and simply impose a stay because it would be the best thing for Barnes. In light of the clear statutory language of Section 1328, this Court is unprepared to do so.
Barnes next raises an issue that, again, does not evidently appear related to any matter that was before the Bankruptcy Court in these Bankruptcy Appeals. More specifically, Barnes appears to ask whether he can proceed against a third-party entity that has not filed for bankruptcy. See Dkt. No. 10 at 22-23. Because this issue has no clear relationship to the Bankruptcy Court's orders in these Bankruptcy Appeals, and Barnes does not point to any specific error in the order related to this issue, the Court declines to further address it herein.
Barnes argues that the order of discharge prevents him from "contacting" Henry even though he has pending legal disputes with him. Id. at 23. Although Barnes does not explain how the foregoing assertion, even if true, results in any error on the Bankruptcy Court's part, the Court notes that the order of discharge merely prevents Barnes from prosecuting debts that have been discharged. As this Court has repeatedly stated herein, the Bankruptcy Court clearly told Barnes that the order of discharge "would not protect Mr. Henry from the consequences of his actions regarding the commercial use permit." Dkt. No. 1-2 at 9. The order of discharge in Henry's bankruptcy proceeding also does not protect SHR, even if Barnes accurately asserts that Henry is representing SHR.
Barnes argues that the Bankruptcy Court erred in threatening sanctions against Barnes and his counsel in the order of discharge. Dkt. No. 10 at 23. As an initial matter, neither the order of discharge nor the order denying Barnes' motion to stay discharge threatened Barnes or his counsel with sanctions. While the order of discharge does state that a violation of the order may result in the payment of damages and attorney's fees to a debtor, this language is directed at creditors in general, not Barnes. See Case No. 19-cv-213-DKW-RT, Dkt. No. 1-2 at 1. As for the order denying Barnes' motion, Barnes is merely cautioned that he must observe the discharge injunction once it is entered. See Dkt. No. 1-2 at 11.
Barnes argues that the Bankruptcy Court erred in denying his request for "vacatur of the Order under Fed.R.Civ.P. 60(b) and Fed.R.Bankr.P. 9024." Dkt. No. 10 at 24. It is not clear to what this assertion pertains, not least because Barnes fails to identify the "Order" he references. Given that none of the orders in these Bankruptcy Appeals concern a Rule 60(b) motion, however, the Court declines to further address this argument.
Barnes argues that the Bankruptcy Court erred in finding that he could not seek revocation of Henry's Chapter 13 plan confirmation order. Dkt. No. 10 at 27. Barnes further argues that the Bankruptcy Court erred in finding that Henry did not procure his plan confirmation by fraud. Id. at 29. Once again, Barnes raises issues that are not pertinent to these Bankruptcy Appeals, as no such findings were made in any of the orders appealed. Therefore, this Court declines to further address these arguments. Barnes also appears to assert error with respect to the protective order, which Barnes appears to contend may have impacted the confirmation of Henry's Chapter 13 plan and/or the admiralty case. Id. at 27-29. These assertions, however, are irrelevant as to whether or not the Bankruptcy Court erred in not lifting the protective order to allow Barnes to conduct discovery of Henry's post-petition activities, which is the matter at issue in these Bankruptcy Appeals. See Dkt. No. 1-2 at 10. As the Bankruptcy Court stated in that regard, the protective order does not prohibit Barnes from conducting discovery with respect to Henry's post-petition activities.
Barnes argues that the Bankruptcy Court erred in denying his motion to stay discharge for lack of evidence. Dkt. No. 10 at 29-30. However, this is, yet again, an inaccurate description of the Bankruptcy Court's order, as nowhere therein did the Bankruptcy Court deny relief due to a lack of evidence. Rather, the Bankruptcy Court denied relief because Barnes was legally not entitled to the relief he sought.
Barnes argues that the Bankruptcy Court erred with respect to findings related to the protective order. See id. at 30-31. None of these arguments appear related to the Bankruptcy Court's determination not to lift the protective order, rather they appear related to the underlying determination to grant Henry a protective order. Because that underlying issue is not before this Court in these Bankruptcy Appeals, the Court will not further address this argument other than to reiterate that, if Barnes wanted to conduct discovery in the admiralty case, he should have so moved in that case. In the protective order, the Bankruptcy Court merely said that Barnes could not use the bankruptcy discovery process to re-open discovery related to the admiralty case. This was entirely proper.
Barnes next brings up yet another issue that is not before the Court in these Bankruptcy Appeals. More specifically, Barnes appears to contend that an issue regarding "piercing the corporate veil" has not been tried in his admiralty case due to rulings by the Bankruptcy Court. See id. at 33-34. None of the arguments related to the foregoing issue have any relationship to issues relevant to these Bankruptcy Appeals. Therefore, the Court does not further address Barnes' arguments in this regard.
Barnes argues that the Bankruptcy Court erred in granting Henry a discharge because Henry caused injury to Barnes while Henry was driving a motor vehicle with a suspended license. Id. at 34-35. This argument appears related to the Bankruptcy Court's finding that Section 523(a)(9) of Title 11 did not apply because there was no evidence that Henry was intoxicated at the time Barnes was injured. See Dkt. No. 1-2 at 10. Barnes' arguments in this regard appear to represent a thorough misunderstanding of precisely what the Bankruptcy Court found in this regard and also of bankruptcy law. Contrary to Barnes' apparent arguments, the Bankruptcy Court did not make any findings under State law, nor did the Bankruptcy Court find that Barnes may or may not have been entitled to relief under State law for the injuries he suffered. Rather, the Bankruptcy Court interpreted bankruptcy law — Section 523(a)(9) — and found that bankruptcy law did not provide for an exception from the discharge under the circumstances of this case. Barnes makes no attempt to challenge those findings. Nor could he, given that the language of Section 523(a)(9) clearly does not apply here in light of the facts presented.
Barnes argues that the Bankruptcy Court erred in "relieving Henry from the consequences of a material and possibly criminal violation of the automatic stay." Dkt. No. 10 at 35. It appears that this argument relates to Henry's alleged conduct with respect to a commercial use permit. See id. at 35-36. Once again, however, Barnes entirely ignores what it is the Bankruptcy Court stated in its relevant order. Rather than "relieving" Henry from the consequences of his actions, the Bankruptcy Court explicitly stated that "the discharge would not protect Mr. Henry from the consequences of his actions regarding the commercial use permit." Dkt. No. 1-2 at 9. As such, the Court suggests that Barnes read the actual words of the Bankruptcy Court's orders in the future before filing appeals containing arguments such as this.
Barnes argues that the Bankruptcy Court erred in denying him the ability to conduct "current" discovery against Henry and one of Henry's businesses. Dkt. No. 10 at 36. To the extent this is a continuation of Barnes' many other misplaced arguments regarding discovery, the Court observes that it is far from clear precisely what discovery to which Barnes refers. If Barnes is referring to any and all discovery against Henry and his business entities that did not file for bankruptcy, the Bankruptcy Court clearly did not prohibit such discovery.
Barnes argues that the Bankruptcy Court erred in not sanctioning Henry for allegedly false statements Henry made to the State of Hawai`i. Dkt. No. 10 at 36-37. Yet again, though, this is not a matter relevant to these Bankruptcy Appeals, as it has nothing to do with whether Barnes' motion to stay discharge and lift protective order should have been granted or denied or whether Henry should have received a discharge.
Finally, Barnes argues that the Bankruptcy Court erred in finding that Henry's conduct did not injure SHR's bankruptcy estate and creditors. Id. at 37-38. As an initial matter, the Bankruptcy Court did not find that SHR was uninjured by Henry's conduct. Instead, the Bankruptcy Court noted that there may be a "serious question" whether Henry's conduct harmed SHR's bankruptcy estate. Dkt. No. 1-2 at 8 n.22. The foregoing question is not a finding of the Bankruptcy Court. In addition, the Court observes, once again, that Henry's conduct in this regard is post-petition conduct. As the Bankruptcy Court explained, Henry's bankruptcy discharge does not protect him from the consequences of his post-petition activities. Therefore, to the extent Henry's post-petition conduct has resulted in the loss of an asset belonging to SHR, and, as Barnes asserts, that lost asset has "tremendous value," then, assuming that the law otherwise allows it, Barnes may pursue his legal rights related thereto.
For the reasons set forth herein, the orders of the Bankruptcy Court relevant to these Bankruptcy Appeals are AFFIRMED. Specifically, the Court AFFIRMS the Bankruptcy Court's (1) Order Denying Barnes' Motion to Stay Discharge and Lift Protective Order in Case No. 14-1475, (2) Order of Discharge in Case No. 14-1475, and (3) Order Denying Barnes' Motion to Stay Discharge and Lift Protective Order in Case No. 14-1520.
IT IS SO ORDERED.
