In re: Kenneth Bruce Tishgart and Lori Anne Tishgart, 9th Cir. BAP (2012)

7/25/2019 In re: Kenneth Bruce Tishgart and Lori Anne Tishgart, 9th Cir. BAP (2012)

http://slidepdf.com/reader/full/in-re-kenneth-bruce-tishgart-and-lori-anne-tishgart-9th-cir-bap-2012 1/23

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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 whatever persuasi ve val ue i t may have( see Fed. R. App. P. 32. 1) , i t has no pr ecedent i al val ue. See 9t hCi r . BAP Rul e 8013- 1.

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UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

I n r e: ) BAP No. NC- 12- 1160- PaMkH)

KENNETH BRUCE TI SHGART and LORI ) Bankr . No. 09- 13400ANNE TI SHGART, )

) Adv. Proc. 10- 1087Debt or s. )

___________________________________))

KENNETH BRUCE TI SHGART; )LORI ANNE TI SHGART, )

)Appel l ant s, )

)v. ) M E M O R A N D U M 1

) TI MOTHY W. HOFFMAN, Tr ust ee, )

)Appel l ee. )

___________________________________)

Ar gued and Submi t t ed on Oct ober 18, 2012,at San Fr anci sco, Cal i f or ni a

Fi l ed - November 13, 2012

Appeal f r om t he Uni t ed St at es Bankrupt cy Cour tf or t he Nor t her n Di st r i ct of Cal i f or ni a

Honor abl e Al an J ar osl ovsky, Chi ef Bankrupt cy J udge, Pr esi di ng

Appear ances: Appel l ant Kennet h Br uce Ti shgar t ar gued pr o se;Kat her i ne D. Ray of Gol dber g, St i nnet t , Davi s &Li nchey ar gued f or appel l ee Ti mot hy W. Hof f man, Tr ust ee.

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

FILEDNOV 13 2012

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



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2 Unl ess ot her wi se i ndi cat ed, al l chapt er , sect i on and r ul er ef er ences ar e t o t he Bankrupt cy Code, 11 U. S. C. §§ 101- 1532, andt o the Feder al Rul es of Bankrupt cy Pr ocedur e, Rul es 1001- 9037. The Feder al Rul es of Ci vi l Pr ocedur e ar e r ef er r ed t o as Ci vi lRul es.

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Appel l ant s Kennet h Br uce Ti shgar t ( “Ti shgar t ”) and Lor i Anne

Ti shgar t ( t oget her , “Debt or s”) appeal t he bankrupt cy cour t ’ s

j udgment awar di ng appel l ee, chapter 72 t r ust ee Ti mothy W. Hof f man

( “Tr ust ee”) , $69, 837. 90, r epr esent i ng t he bankrupt cy est at e’ s

i nt er est i n cer t ai n cont i ngent f ees r ecei ved by Ti shgar t f r om hi s

l egal pr act i ce. We AFFI RM.

FACTS

Debt or s f i l ed a chapt er 7 pet i t i on on Oct ober 15, 2009. At

t he t i me, Ti shgar t was an at t or ney wi t h a sol o pr act i ce

speci al i zi ng i n per sonal i nj ur y cl ai ms. Ti shgar t ’ s pr acti ce

consi st ed pr i mar i l y of r epr esent i ng pl ai nt i f f s i n per sonal i nj ur ycases, and he or di nar i l y ent ered i nt o cont i ngent f ee agr eement s

wi t h hi s cl i ent s. At t he t i me of f i l i ng t he bankr upt cy pet i t i on,

Ti shgar t was r epr esent i ng over si xt y cl i ent s f or whom he had

pr ovi ded l egal servi ces and f or whi ch Ti shgar t had not been pai d

i n f ul l . Debt or s di d not l i st Ti shgar t ’ s i nt er est i n t hese f ees

i n t hei r bankrupt cy schedul es.

Tr ust ee commenced an adver sar y proceedi ng agai nst Debt or s on

J ul y 27, 2010. I n hi s compl ai nt , Tr ust ee sought a decl ar at or y

j udgment det er mi ni ng t he ext ent of t he bankrupt cy est at e’ s

i nt er est under § 541( a) i n t he cont i ngent f ees col l ect ed by

Ti shgar t af t er t he bankrupt cy f i l i ng f or t hose cases under t aken by

Ti shgar t prepet i t i on. He al so sought t urnover of t he est at e’ s

i nt er est i n t hose f ees under § 542( a) .



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3 On May 13, 2011, i n connect i on wi t h an ear l i er di scover ydi sput e wher ei n Tr ust ee al l eged t hat Debt or s wer e not f ul l ycooper at i ng, t he bankrupt cy cour t appr oved the wi t hdr awal of Debt or s’ counsel , and awar ded sanct i ons agai nst Debt or s of $1, 875under Ci vi l Rul e 37( a) ( 5) ( A) , appl i cabl e i n adver sar y pr oceedi ngsvi a Rul e 7037.

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On Oct ober 7, 2011, Trust ee propounded 101 Request s f or

Admi ss i on ( “RFA”) t o Debt ors. 3 The RFAs i dent i f i ed f i f t een

per sonal i nj ur y cases i n whi ch f ees wer e al l egedl y pai d t o

Ti shgar t wi t hi n ni net y days af t er t he pet i t i on date ( t he “Fi f t een

Cases”) . These RFAs sought Debt or s’ admi ssi on t hat Ti shgar t had

“pr ovi ded l i t t l e or no l egal ser vi ces” i n t he Fi f t een Cases af t er

t he pet i t i on dat e. Debt or s’ r esponses t o t he RFAs wer e due on

November 9, 2011. Debt ors di d not r espond t o t he RFAs by t he

deadl i ne, nor di d t hey seek an extensi on of t i me to do so and, as

a resul t , under Ci vi l Rul e 36( a) ( 3) / Rul e 7036, t he RFAs wer e

deemed admi t t ed.On November 18, 2011, Tr ust ee f i l ed a mot i on f or summary

j udgment based on t he deemed admi ssi ons, r equest i ng t hat al l f ees

pai d t o Ti shgar t r el at ed t o t he Fi f t een Cases be t ur ned over t o

Tr ust ee. A hear i ng on t he summar y j udgment mot i on occur r ed on

December 23, 2011. The bankr upt cy cour t gr ant ed t he mot i on, but

onl y i n par t , awar di ng $3, 600 pai d t o Ti shgar t i n one case

i nvol vi ng Pedr ou Fer r er ( “Fer r er ”) t o Tr ust ee. The cour t ’ s or der

not ed t hat t he mot i on had been grant ed based on t he deemed

admi ssi ons, and f or t he r easons st at ed on t he r ecor d. Ther e i s no

t r anscr i pt of t hi s hear i ng i n t he excer pt s of r ecor d or i n t he

bankrupt cy cour t ’ s docket .

Debt or s t hen f i l ed t wo Mot i ons f or Rel i ef f r om Lat e Response

t o Di scover y. I n a December 12, 2011 mot i on, Debt ors sought



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r el i ef because thei r f ai l ur e to t i mel y deny the RFAs was t he

r esul t of mi st ake, i nadver t ence, or excusabl e negl ect . Thi s

mot i on was not accompani ed by a not i ce of hear i ng and, because of

t hi s, t he bankrupt cy cour t deni ed i t by docket ent r y as an

i nappr opr i at e ex par t e mot i on.

Debt ors r ef i l ed t he mot i on on December 30, 2011, accompani ed

by a not i ce set t i ng t he mot i on f or a hear i ng on J anuar y 27, 2012.

However , t hat dat e f el l af t er t he J anuar y 13, 2012, di scover y

cut of f date, and onl y about t wo weeks bef or e t he schedul ed t r i al

dat e set by t he cour t . I n t hi s mot i on, Debt or s ar gued t hat

wi t hdr awal of t he deemed admi ss i ons woul d al l ow t he part i es t oaddr ess t he mer i t s of t he act i on, and t hat Tr ust ee woul d not be

pr ej udi ced because di scover y r emai ned open. Tr ust ee f i l ed a

r esponse not i ng t hat , cont r ar y t o Debt or s’ ar gument , t he di scover y

cut of f date had passed, and t hat he woul d be pr ej udi ced because

t he t r i al was set t o begi n shor t l y and hi s pr epar at i on f or t r i al

assumed t hat he coul d r el y upon t he deemed admi ssi ons. A

t r anscr i pt of t he J anuar y 27, 2012 hear i ng on Debt or s’ mot i on i s

not i ncl uded i n t he excer pt s of r ecor d or t he bankrupt cy cour t ’ s

docket . On Febr uary 10, 2012, t he bankr upt cy cour t deni ed

Debt or s’ r equest “f or t he r easons st at ed by the cour t at t he

hear i ng. ”

The t r i al t ook pl ace on Februar y 14, 2012. Tr ust ee was

r epr esent ed by counsel ; Ti shgar t appear ed pr o se. Ti shgar t was

t he onl y wi t ness. Trust ee pr esent ed document ary evi dence

concerni ng el even of t he Fi f t een Cases, and Ti shgart was exami ned

about each of t hem. Ti shgar t pr esent ed no document ary evi dence t o

suppor t hi s test i mony. Af t er cl osi ng ar gument s, t he bankrupt cy



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4 The bankr upt cy cour t awarded t he ent i r e $14, 800 of f ees Ti shgar t r ecei ved i n t he Br own case t o Tr ust ee. However , bef or eent r y of j udgment , Tr ust ee wi t hdr ew hi s r equest f or t ur nover of t hese f ees t hat had been pai d t o Ti shgar t over a year af t er t hepet i t i on was f i l ed.

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cour t t ook t he i ssues under submi ssi on.

I n a March 6, 2012 Memorandum Deci si on, t he bankr upt cy cour t

obser ved t hat t he di sposi t i ve l egal i ssue i n t he cont est concer ned

t he amount of t he f ees f r om Ti shgar t ’ s cases whi ch wer e pr oper t y

of t he bankrupt cy est at e. I n det er mi ni ng t he amount Ti shgar t

shoul d be abl e t o r et ai n f r om t he f ees he r ecei ved af t er t he

f i l i ng of hi s pet i t i on, t he cour t anal ogi zed t he f act s of t he case

t o a si t uat i on where Ti shgart ’ s empl oyment had been termi nated by

t he cl i ent on t he pet i t i on dat e. The cour t t hen anal yzed t he

i ssues under bot h Feder al and Cal i f or ni a st at e l aw. The cour t

concl uded, i n par t , t hat :I n t hi s case, Ti shgar t i s deemed t o have admi t t ed t hathe pr ovi ded l i t t l e or no ser vi ces i n t he cases at i ssueaf t er bankrupt cy. He has gi ven t he cour t scant basi sf or di f f er ent i at i ng bet ween hi s pr epet i t i on andpost pet i t i on wor k on t he cases, whi ch i s t he onl ypossi bl e basi s f or avoi di ng t he pr ecl usi ve ef f ect of [ I n r e J ess, 169 F. 3d 1204 ( 9t h Ci r . 1999) , t hepr i nci pal f eder al case] . The cour t woul d be j ust i f i edi n awar di ng al most al l t he f ees i n quest i on t o Hof f man.However , i n t he spi r i t of f ai r ness t he cour t wi l l not bequi t e so har sh.

Memorandumof Deci si on at 3, March 6, 2012. The cour t noted t hat

i t had al r eady awar ded t o Tr ust ee al l $3, 600 of t he f ees Ti shgar t

r ecei ved post - pet i t i on i n t he Fer r er case i n t he par t i al summar y

j udgment . Of t he $130, 475. 80 r ecei ved by Ti shgar t i n quest i on f or

t he r est of t he Fi f t een Cases, t he cour t awar ded hal f of t hat

amount t o Tr ust ee, and hal f t o Debt or s. 4

A j udgment agai nst Debt or s and i n f avor of Tr ust ee f or



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$69, 837. 90 pl us i nt erest was ent ered on March 15, 2012. Debt ors

t i mel y appeal ed.

JURISDICTION

The bankrupt cy cour t had j ur i sdi ct i on under 28 U. S. C. §§ 1334

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

§ 158.

ISSUE

Whether t he bankrupt cy cour t abused i t s di scr et i on i n denyi ng

Debt ors’ r equest t o wi t hdr aw t he deemed admi ss i ons.

Whether t he bankrupt cy cour t er r ed i n or der i ng t ur nover of

$69, 837. 90 of t he f ees Ti shgar t r ecei ved af t er t he pet i t i on dat et o Tr ust ee as pr oper t y of t he est at e.

STANDARDS OF REVIEW

The deni al of a mot i on t o wi t hdr aw a deemed admi ssi on i s

r evi ewed f or abuse of di scr et i on. J ul es J or dan Vi deo v. 144942

Canada, I nc. , 617 F. 3d 1146, 1158 ( 9t h Ci r . 2012) . I n det er mi ni ng

whet her a bankrupt cy cour t abused i t s di scr et i on, we revi ew

whet her t he bankrupt cy cour t appl i ed t he cor r ect r ul e of l aw.

Uni t ed St at es v. Hi nkson, 585 F. 3d 1247, 1262 ( 9t h Ci r . 2009)

( en banc) . We t hen det er mi ne whet her t he cour t ’ s appl i cat i on of

t hat r ul e was i l l ogi cal , i mpl ausi bl e, or wi t hout suppor t i n

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

( quot i ng Ander son v. Ci t y of Bessemer Ci t y, N. C. , 470 U. S. 564,

577 (1985) ) .

Whether pr oper t y i s i ncl uded i n a bankrupt cy est at e, and t he

pr opr i et y of t he pr ocedur es empl oyed f or r ecover i ng est at e

pr oper t y, ar e quest i ons of l aw t hat we r evi ew de novo. Whi t e v.

Br own ( I n r e Whi t e) , 389 B. R. 693, 698 ( 9t h Ci r . BAP 2008) .



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DISCUSSION

I. The bankruptcy court did not abuse its discretion in denyingDebtors’ request to withdraw the deemed admissions.

Ci vi l Rul e 36 gover ns t he use of r equest s f or admi ssi on i n

ci vi l act i ons. I t i s appl i cabl e i n bankr upt cy adver sar y

pr oceedi ngs. Rul e 7036. Ci vi l Rul e 36 pr ovi des i n r el evant par t :

Rul e 36. Request s f or Admi ssi on

( a) Scope and Pr ocedur e.

( 1) Scope. A par t y may ser ve on any ot herpar t y a wr i t t en r equest t o admi t , f or pur posesof t he pendi ng act i on onl y, t he t r ut h of anymat t er s wi t hi n t he scope of Rul e 26( b) ( 1)

r el at i ng t o: ( A) f acts, t he appl i cat i on of l aw t o f act , or opi ni ons about ei t her ; and( B) t he genui neness of any descr i beddocument s. . . .

( 3) Ti me t o Respond; Ef f ect of Not Respondi ng.A mat t er i s admi t t ed unl ess, wi t hi n 30 daysaf t er bei ng served, t he par t y t o whom t her equest i s di r ect ed ser ves on t he request i ngpar t y a wr i t t en answer or obj ect i on addr essedt o t he mat t er and si gned by the par t y or i t sat t orney. . . .

( 4) Answer . I f a mat t er i s not admi t t ed, t heanswer must speci f i cal l y deny i t or st at e i ndetai l why t he answer i ng part y cannott r ut hf ul l y admi t or deny i t . A deni al mustf ai r l y respond t o t he subst ance of t hemat t er [ . ]

( b) Ef f ect of an Admi ss i on; Wi t hdr awi ng or Amendi ng I t .A mat t er admi t t ed under t hi s r ul e i s concl usi vel yest abl i shed unl ess t he cour t , on mot i on, per mi t s t headmi ss i on t o be wi t hdr awn or amended. Subj ect t oRul e 16(e) , t he court may per mi t wi t hdr awal or amendmenti f i t woul d pr omot e t he pr esent at i on of t he mer i t s of t he act i on and i f t he cour t i s not per suaded t hat i t

woul d pr ej udi ce t he request i ng par t y i n mai nt ai ni ng ordef endi ng t he act i on on t he mer i t s.

Absent a mot i on f or an ext ensi on of t i me, a par t y’ s f ai l ur e

t o t i mel y respond t o a r equest f or admi ssi on wi t hi n t he t hi r t y- day

l i mi t est abl i shed by Ci vi l Rul e 36( a) ( 3) r esul t s i n t he admi ssi on



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bei ng concl usi vel y deemed admi t t ed. Conl on v. Uni t ed St at es,

474 F. 3d 616, 621 ( 9t h Ci r . 2007) . I n t hi s appeal , i t i s not

di sput ed that Tr ust ee pr oper l y served the RFAs on Debt or s,

i ncl udi ng r equest s speci f i cal l y addr essed t o t he Fi f t een Cases.

These RFAs r equest ed t hat Ti shgar t admi t t hat he "provi ded l i t t l e

or no l egal ser vi ces" i n each of t he Fi f t een Cases af t er t he

pet i t i on dat e. Debt or s admi t t hat t hey di d not t i mel y r espond t o

any of t he Tr ust ee’ s 101 RFAs wi t hi n t he t hi r t y- day per i od al l owed

by t he r ul es. Thus, under both t he r ul es and case l aw, t hat

Ti shgar t provi ded l i t t l e or no ser vi ces post - pet i t i on on t he

Fi f t een Cases was deemed concl usi vel y admi t t ed i n t he adver sar ypr oceedi ng.

Al t hough t r eat i ng a r equest f or admi ssi on t hat i s not t i mel y

di sput ed or cont est ed as a concl usi vel y deemed admi ssi on i s

mandat or y, and does not r equi r e cour t act i on, i n t he exer ci se of

i t s di scr et i on, a t r i al cour t may al l ow an admi ssi on t o be

wi t hdr awn, but onl y under st at ut or i l y pr escr i bed r ul es. Asea,

I nc. v. S. Pac. Tr ansp. Co. , 669 F. 2d 1242, 1248 ( 9t h Ci r . 1981) .

Ci vi l Rul e 36( b) vest s t he bankr upt cy cour t wi t h di scret i on t o

gr ant r el i ef f r om an admi ssi on made under Rul e 36( a) onl y when

"t he pr esent at i on of t he mer i t s of t he act i on wi l l be subser ved, "

and " t he par t y who obt ai ned t he admi ssi on f ai l s t o sat i sf y t he

cour t t hat wi t hdr awal or amendment wi l l pr ej udi ce t hat par t y i n

mai nt ai ni ng t he act i on or def ense on t he mer i t s. " Ci vi l

Rul e 36( b) ; Conl on 474 F. 3d at 621; Hadl ey v. Uni t ed St at es,

45 F. 3d 1345, 1348 ( 9t h Ci r . 1995) . Ot her ci r cui t s agr ee wi t h t he

Ni nt h Ci r cui t t hat wi t hdr awal of an admi ss i on may onl y be made

wher e bot h of t he condi t i ons of Ci vi l Rul e 36( b) ar e sat i sf i ed.



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See Car ney v. I RS ( I n r e Car ney) , 258 F. 3d 415, 419 ( 5t h Ci r .

2001) ( " [ A] deemed admi ssi on can onl y be wi t hdr awn or amended by

mot i on i n accor dance wi t h Rul e 36( b) . " ) ; Donovan v. Car l s Dr ug

Co. , 703 F. 2d 650, 652 ( 2d Ci r . 1983) ( same) .

Her e, t he bankrupt cy cour t consi der ed Debt ors’ r equest t o

wi t hdr aw t he deemed admi ss i ons at t he hear i ng on J anuary 27, 2012,

and, f ol l owi ng t hat hear i ng, deni ed t he r equest “f or t he r easons

st at ed by t he Cour t at t he hear i ng. ” Debt or s di d not pr ovi de t he

Panel a t r anscri pt of t he hear i ng, nor i s i t avai l abl e i n t he

docket of t he adver sar y pr oceedi ng. We have caref ul l y exami ned

t he recor d, bot h bef or e and af t er t he J anuar y 27, 2012, hear i ng,and no where does t he bankr upt cy cour t expl ai n i t s r easons f or

denyi ng Debt ors’ r equest t o wi t hdr aw t he deemed admi ss i ons ot her

t han i n t he or der i ssued as a resul t of t he J anuar y 27, 2012

hear i ng.

I f a bankrupt cy cour t ’ s f i ndi ngs of f act and concl usi ons of

l aw ar e made or al l y on t he r ecor d, a t r anscr i pt of t hose f i ndi ngs

i s mandat or y f or t he Panel ’ s appel l at e r evi ew. I n r e McCar t hy,

230 B. R. 414, 416 ( 9t h Ci r . BAP 1999) . Moreover , where t he

i nadequacy of t he recor d pr ovi ded t o the Panel af f or ds no basi s t o

r evi ew t he deci si on of t he bankr upt cy cour t , we may summari l y

af f i r m t he bankr upt cy cour t ’ s rul i ng. Ehr enber g v. Cal . St at e

Uni v. , Ful l er t on Found. ( I n r e Beachpor t Ent m' t ) , 396 F. 3d 1083,

1087- 88 ( 9t h Ci r . 2005) ; Mor r i ssey v. St ut evi l l e ( I n r e

Mor r i ssey) , 349 F. 3d 1187, 1189 ( 9t h Ci r . 2003) ( f ai l ur e t o pr ovi de

a cr i t i cal t r anscr i pt may r esul t i n summar y af f i r mance) .

Rul e 8009( b) ( 5) pr ovi des t hat t he appel l ant ’ s excer pt s must

i ncl ude “[ t ] he opi ni on, f i ndi ngs of f act , or concl usi ons of l aw



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f i l ed or del i ver ed or al l y by t he [ bankr upt cy] cour t . . . . ”

Rul e 8009( b) ( 9) r equi r es t hat t he excer pt s i ncl ude “[ t ] he

t r anscri pt or por t i on t her eof , i f so r equi r ed by a r ul e of t he

bankrupt cy appel l at e panel . ” Our r ul es st at e t hat “ t he excer pt s

of r ecor d shal l i ncl ude t he t r anscr i pt s necessar y f or adequat e

r evi ew i n l i ght of t he st andar d of r evi ew t o be appl i ed t o t he

i ssues bef or e t he Panel . ” Ni nt h Ci r cui t BAP R. 8006- 1. The

advi sor y not e t o t hi s BAP r ul e expl ai ns, “I f f i ndi ngs of f act and

concl usi ons of l aw wer e made or al l y on t he r ecor d, a t r anscr i pt of

t hose f i ndi ngs i s mandat or y. ”

Debt or s’ f ai l ur e to pr ovi de an adequat e recor d of t he reasonsf or t he bankr upt cy cour t ’ s r ul i ng denyi ng t hei r r equest t o al l ow

t hem t o wi t hdr aw t he deemed admi ssi ons woul d l i kel y al l ow us t o

summar i l y af f i r m t hat r ul i ng. However , we ar e mi ndf ul of t he

i nst r uct i ons of t he Ni nt h Ci r cui t i n Beachpor t Ent m’ t t hat we

shoul d not summar i l y r ul e wi t hout f i r st det er mi ni ng i f t her e ar e

ot her gr ounds i n t he r ecor d f or af f i r mi ng a bankrupt cy cour t ’ s

acti ons.

I n t hi s case, Ti shgar t submi t t ed a swor n decl ar at i on i n

suppor t of hi s r equest t o wi t hdr aw t he deemed admi ssi ons. I n t hat

decl ar at i on, Ti shgar t asser t s t hat he moved hi s of f i ce on

November 2, 2011, and “mi spl aced” t he RFAs. Ti shgar t f ai l s t o

not e i n t hat decl ar at i on, however , t hat he sent a l et t er t o

Tr ust ee’ s counsel on Oct ober 26, 2011, t hat acknowl edged r ecei pt

of t he RFAs, and i ndi cated t hat he woul d “endeavor t o r espond t o

t he r emai ni ng di scover y as soon as pr act i cabl e. ” Ray [ at t or ney

f or Tr ust ee] Dec. at ¶ 2, J anuar y 13, 2012. Whi l e Ti shgar t has

t hus admi t t ed t o havi ng t he RFAs t wo weeks bef ore t he t hi r t y- day



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5 Ti shgar t appar ent l y conf uses t he Ci vi l Rul e 36( b) gr oundsf or wi t hdr awal of admi ssi ons wi t h t hose appl i cabl e under Ci vi lRul e 60( b) ( 1) f or r el i ef f r om a j udgment or or der . Ther e was noorder ent ered by whi ch the admi ss i ons were deemed admi t t ed; Ci vi lRul e 36( a) i s sel f - ef f ect uat i ng and a cour t or der i s not r equi r ed. Thomas v. Boni l l a, 2011 WL 4527399 at *1 ( E. D. Cal . 2011) . Ci vi lRul e 60( b) ( 1) i s not appl i cabl e.

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r esponse deadl i ne, he cl ai ms t o have mi spl aced t hema week bef ore

t he deadl i ne. Ti shgar t expl ai ns t hat hi s f ai l ur e t o t i mel y

r espond t o t he r equest s f or admi ssi on was t he r esul t of

“i nadver t ence, mi st ake, or excusabl e negl ect . ”5 I n hi s

decl ar at i on, Ti shgar t ar gues t hat he was pr oceedi ng pr o se, di d

not pr act i ce i n f eder al cour t , and was unabl e t o hi r e a bankrupt cy

speci al i st . Ti shgar t Dec. at ¶¶ 4- 5.

Ti shgar t ’ s expl anat i on i n hi s decl ar at i on f or Debt or s’

f ai l ur e t o t i mel y r espond t o t he RFAs l acks mer i t . Ti shgar t i s an

at t or ney who has been i nvol ved i n a l i t i gat i on pr act i ce. Whi l e

t hi s i ssue ar i ses i n t he cont ext of a bankrupt cy adver sar ypr oceedi ng appl yi ng t he f eder al di scover y rul es, t he Panel i s

skept i cal t hat Ti shgar t was unf ami l i ar wi t h t he consequences of

f ai l ur e t o t i mel y respond t o a r equest f or admi ssi on under f eder al

di scover y r ul es. Even i f so, Ti shgar t undoubt edl y had t he abi l i t y

t o obt ai n knowl edge of t he r ul es, and t o compl y wi t h t he

pr ocedur al and subst ant i ve l aw out si de hi s pr of essi onal

speci al i zat i on. Godl ove v. Bamberger , For eman, Oswal d, & Hahn,

903 F. 2d 1145, 1148 ( 7t h Ci r . 1991) ( "a pr o se l awyer i s ent i t l ed

t o no speci al consi der at i on") ; see al so Leeds v. Mel t z,

898 F. Supp. 146, 149 ( E. D. N. Y. 1995) , af f ' d, 85 F. 3d 51 ( 2d Ci r .

1996) ( pr o se at t or ney not ent i t l ed t o t he l i ber al i t y nor mal l y

af f or ded pr o se l i t i gant s) . Ther ef or e, t her e was consi der abl e



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r oom f or t he bankrupt cy cour t t o doubt Debt or s’ al l egat i on t hat

t hei r f ai l ur e to t i mel y respond t o the RFAs was ei t her i nadver t ent

or excusabl e.

Debt ors submi t t ed a Memorandum of Law t o t he bankrupt cy cour t

t o suppor t t hei r r equest f or r el i ef f r om t he deemed admi ssi ons i n

whi ch t hey mor e di r ect l y addr ess t he two gr ounds f or gr ant i ng a

r equest t o wi t hdr aw an admi ss i on under Ci vi l Rul e 36( b) :

[ A] l l owi ng such wi t hdr awal wi l l al l ow t he pr esent at i onof t he mer i t s i n t hi s mat t er r at her t han t hem bei ngext i ngui shed by r esponses t o r equest s f oradmi ssi on. . . . Gr ant i ng t hi s mot i on wi l l i n no waypr ej udi ce t he r equest i ng par t y i n mai nt ai ni ng i t sact i on. I t si mpl y must r espond t o t he mer i t s of t he

case and al l avai l abl e r i ght s and di scover y r emai n opent o i t .

Tr ust ee’ s Opposi t i on t o Def endant s’ Mot i on f or Rel i ef al so

addr essed t he cr i t er i a under Ci vi l Rul e 36( b) . Tr ust ee not ed t hat

Ti shgar t had a hi st or y of r esi st ance t o hi s di scover y r equest s,

and had al r eady been sanct i oned by the cour t f or hi s

i nt r ansi gence. Tr ust ee ar gued t hat Debt or s di d not f ai l t o

r espond due t o i nadver t ence, mi st ake or excusabl e negl ect —

Debt or s admi t t ed negl i gence, and i t was not excusabl e. Ti shgar t

acknowl edged t hat he had t he RFAs i n hi s possessi on and si mpl y

mi spl aced t hem. Tr ust ee ar gued t hat because Ti shgar t i s an

at t orney, he i s pr esumabl y knowl edgabl e about t he consequences of

a f ai l ur e t o meet di scover y deadl i nes, or t o pr oper l y saf eguar d

document s. Tr ust ee poi nt ed out t hat Debt or s apparent l y l et t he

r esponse deadl i ne pass bef or e aski ng f or anot her copy of t he RFAs;

another t hr ee weeks passed bef ore t hey submi t t ed r esponses; and

Debt or s di d not r equest r el i ef f r om t he deemed admi ssi ons unt i l

some si x weeks af t er t he response deadl i ne.



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6 Agai n, we must assume what occur r ed because we do not havet he t r anscr i pt of t he summary j udgment hear i ng. However , Trust eeargued i n hi s summary j udgment mot i on t hat Ci vi l Rul e 36 appl i ed,and t hat Debt or s’ f ai l ur e t o answer t he RFAs r esul t ed i n t hedeemed admi ss i ons. Debt ors di d not r espond t o t he Ci vi l Rul e 36i ssue i n thei r opposi t i on to summar y j udgment .

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Tr ust ee al so cr edi bl y asser t ed t hat wi t hdr awal of t he deemed

admi ssi ons woul d hi nder , not pr omot e, pr esent at i on of t he mer i t s

of t he case. The bankrupt cy cour t had al r eady ent er ed par t i al

summar y j udgment i n the Fer r er case, based on t he deemed

admi ssi ons, somet hi ng t hat Debt or s appar ent l y di d not chal l enge at

t he summar y j udgment hear i ng. 6 Wi t hdr awal of t he admi ssi ons coul d

pot ent i al l y l ead t o r el i t i gat i on of t he par t i al summar y j udgment

deci si on, unnecessar i l y del ayi ng t he t r i al .

Fur t her , as t he bankrupt cy cour t woul d l at er f i nd i n t he

Memorandum, t he deemed admi ssi ons di d not comprehensi vel y set t l e

t he mer i t s of t he cont est . Al t hough t hey concl usi vel y est abl i shedt hat Ti shgar t pr ovi ded l i t t l e or no ser vi ces on t he r el evant cases

post - pet i t i on, t he bankr upt cy cour t was st i l l r equi r ed t o

det er mi ne t he val ue of what ever pr epet i t i on and post - pet i t i on

ser vi ces Ti shgar t pr ovi ded, and whet her t hose f ew post - pet i t i on

servi ces mi ght be val ued hi gher t han t he pr epet i t i on servi ces.

As t o t he pr ej udi ce t o Tr ust ee, he ar gued t hat he had al r eady

pr evai l ed i n t he part i al summary j udgment order , whi ch was based

i n par t on t he deemed admi ss i ons, and he woul d be pr ej udi ced by

t he possi bi l i t y of r el i t i gat i ng t hat or der . Fur t her , t he per i od

f or di scover y had ended and Trust ee rel i ed on t he admi ssi ons t o

el i mi nat e t he need f or f ur t her i nvest i gat i on.

Whi l e we do not know t he pr eci se reasons f or i t s r ul i ng,

gi ven these ci r cumst ances, we can comf or t abl y concl ude t hat t he



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7 Eval uat i ng t he second hal f of t he t est i s mor e pr obl emat i ci n t hi s case. The bankrupt cy cour t coul d have consi der ed t headdi t i onal bur den pl aced on Tr ust ee by havi ng t o rel i t i gat e thepart i al summary j udgment , and t hat addi t i onal di scover y may not beavai l abl e. However , Tr ust ee’ s concer n t hat di scover y was no

l onger avai l abl e i s l ess per suasi ve. The Ni nt h Ci r cui t has r ul edt hat cl osed di scover y does not const i t ut e pr ej udi ce, becausedi scover y can al ways be r eopened by t he cour t . Conl i n, 474 F. 3dat 624. Based on r evi ew of t he r ecor d bef ore us, we cannotdet er mi ne i f t he second hal f of t he Ci vi l Rul e 36( b) t est wassat i s f i ed.

Never t hel ess, bot h par t s of t he t est must be sat i sf i ed. By( cont i nued. . . )

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bankrupt cy cour t di d not abuse i t s di scr et i on i n denyi ng Debt or s’

r equest t o wi t hdr aw t he deemed admi ss i ons. Ci vi l Rul e 36( b)

pr ovi des t hat t he t r i al cour t may per mi t wi t hdr awal onl y i f bot h

t he cri t er i a expr essed t her ei n ar e sat i sf i ed, t hat i s, t hat

wi t hdr awal woul d pr omot e the pr esent at i on of t he mer i t s of t he

act i on, and t hat t he cour t was not per suaded t hat wi t hdr awal woul d

pr ej udi ce t he r equest i ng par t y i n mai nt ai ni ng or def endi ng t he

act i on on t he mer i t s. Conl on, 474 F. 3d at 624.

The Ni nth Ci r cui t has provi ded cl ear di r ect i ons on t he f i r st

pr ong. “The f i r st hal f of t he t est i n Rul e 36( b) i s sat i sf i ed

when uphol di ng t he admi ssi ons woul d pr act i cal l y el i mi nat e anypr esent at i on of t he mer i t s of t he case. ” Hadl ey, 45 F. 3d at 1348.

Tr ust ee ar gued, and t he bankr upt cy cour t appar ent l y agr eed, t hat

t he deemed admi ssi ons i mpl i cated onl y t he f i r st el ement i n

consi der i ng t he mer i t s of t he case. The cour t s t i l l had t o t ake

evi dence on t he speci f i cs of t he servi ces and val ue of t he

par t i cul ar pr epet i t i on vs. post - pet i t i on ser vi ces. Thus,

uphol di ng t he deemed admi ssi ons woul d not “pract i cal l y el i mi nat e”

any pr esent at i on on t he mer i t s. The f i r st hal f of t he Ci vi l

Rul e 36( b) t est i s not sat i sf i ed. 7



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7

( . . . cont i nued)i t s own l ater determi nat i on t hat t he deemed admi ss i ons were onl yone par t of t he mer i t s anal ysi s, we i nf er t hat t he bankrupt cycour t was aware that uphol di ng t he admi ss i ons woul d not"pr act i cal l y el i mi nat e" any pr esent at i on on t he mer i t s and, t hus,t he f i r st par t of t he Ci vi l Rul e 36( b) t est was not met .Consequent l y, we concl ude t hat t he cour t di d not abuse i t sdi scr et i on i n denyi ng t he request t o wi t hdr aw t he admi ssi ons.

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The bankrupt cy cour t di d not abuse i t s di scr et i on i n denyi ng

Debt or s’ r equest f or r el i ef f r om t he deemed admi ssi ons.

II. The bankruptcy court did not err in ordering turnover of$69,837.90 of Tishgart's fees to Trustee as property of theestate.

Debt ors’ bankr upt cy est ate came i nt o exi st ence when t hey

f i l ed t hei r chapt er 7 pet i t i on. §§ 301, 302. Not wi t hst andi ng

cer t ai n speci f i ed except i ons, t he bankrupt cy est at e i ncl udes al l

l egal and equi t abl e i nt er est s i n pr oper t y hel d by Debt or s at t he

t i me of f i l i ng. § 541( a) . Sect i on 541( a) al so speci f i es t hat t he

bankrupt cy est at e encompasses al l "pr oceeds, pr oduct , of f spr i ng,

r ent s, or pr of i t s of or f r om pr oper t y of t he est at e, except suchas are ear ni ngs f r om servi ces per f or med by an i ndi vi dual debt or

af t er t he commencement of t he case. " § 541( a) ( 6) .

Most i f not al l of t he cont i ngent f ees r ecei ved by Ti shgar t

i n t he Fi f t een Cases wer e r ecei ved af t er t he f i l i ng of t he

pet i t i on. At l east on i t s sur f ace, t hen, § 541( a) ( 6) woul d seem

t o excl ude f r om pr oper t y of t he est at e cont i ngent f ees r ecei ved

post - pet i t i on. However , i t has l ong been est abl i shed t hat

payment s f or pr e- pet i t i on ser vi ces ar e not excl udabl e f r om t he

est at e sol el y because they wer e r ecei ved post - pet i t i on and

addi t i onal servi ces wer e r equi r ed t o r ecei ve payment . Rau v.

Ryer son ( I n r e Ryer son) , 739 F. 2d 1423, 1425- 26 ( 9t h Ci r . 1984) ;



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I n r e Wu, 173 B. R. at 414- 15. The est at e i s ent i t l ed t o r ecover

t he por t i on of post - pet i t i on payment s at t r i but abl e t o pr e- pet i t i on

ser vi ces. J ess v. Car ey ( I n r e J ess) , 169 F. 3d 1204, 1208 ( 9t h

Ci r . 1999) .

Debt or s ar gue t hat t he val ue of Ti shgar t ’ s pr epet i t i on

servi ces on t he rel evant cases or , i n ot her wor ds, t he amount t o

be tur ned over t o Tr ust ee, shoul d be measured sol el y by t he t ot al

hour s he test i f i ed t hat he wor ked pr epet i t i on on t hose cases

mul t i pl i ed by an hour l y r at e of $102. 50. Debt or s seem t o ar gue

t hat hour s spent ar e f ungi bl e asset s, wher e an hour spent

pr epet i t i on has t he same val ue as an hour spent l at er i n t he case. Thi s use of an excl usi vel y l odest ar approach t o val ui ng Ti shgar t ’ s

ser vi ces over l ooks an i mpor t ant di st i nct i on i n bankrupt cy l aw

r egar di ng pr oper t y of t he est at e. Feder al l aw, speci f i cal l y

§ 541( a) , hol ds t hat a debt or ’ s bankrupt cy est at e i ncl udes al l

l egal and equi t abl e i nt er est s i n pr oper t y hel d by t he debt or at

t he t i me of f i l i ng. Those i nt er est s i ncl ude cont i ngent f ee

payment s t o a l awyer i n bankr upt cy and owed on t he pet i t i on date.

I n r e J ess, 169 F. 3d at 1208. The Ni nt h Ci r cui t has hel d t hat t he

cont i ngent f ee i s payabl e t o t he bankrupt cy est at e, l ess t he val ue

of post - pet i t i on servi ces necessary t o obt ai ni ng t he payment s:

[ A] cour t must f i r st det er mi ne whet her any post pet i t i onser vi ces ar e necessar y t o obt ai ni ng the payment s ati ssue. I f not , t he payment s ar e ent i r el y " r oot ed i n t hepr e- bankrupt cy past , " and t he payment s wi l l be i ncl udedi n t he est at e. I f some post pet i t i on ser vi ces ar e

necessary, t hen cour t s must det er mi ne the extent t owhi ch t he payment s ar e at t r i but abl e t o t he post pet i t i onser vi ces and t he ext ent t o whi ch the payment s ar eat t r i but abl e t o pr epet i t i on ser vi ces. That por t i on of t he payment s al l ocabl e t o post pet i t i on ser vi ces wi l l notbe pr oper t y of t he est at e.

I d. at 1208.



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I n t he J ess case, t he Ni nt h Ci r cui t det er mi ned t hat

78 per cent of t he debt or - at t orney’ s wor k, based on r ecor ded hour s,

was per f or med pr epet i t i on, and t hus t he f ees f or t hose ser vi ces

wer e pr oper t y of t he bankrupt cy est at e. I d. at 1206. The J ess

cour t , however , caut i oned t hat count i ng t he number of hour s

expended by t he debt or pr epet i t i on and post - pet i t i on was not

necessar i l y t he cor r ect pr ocedur e f or det er mi ni ng t he r el at i ve

val ue of pr e- and post - pet i t i on ser vi ces:

We shoul d note t hat J ess made no at t empt i n t hebankrupt cy cour t t o pl ace a gr eat er val ue on hi spost - pet i t i on hour s t han on hi s pr e- pet i t i on hour s. Thus, al l of J ess ' s hours wer e val ued equal l y. We

r ecogni ze t hat i n a di f f er ent cont ext i t mi ght bepossi bl e t o est abl i sh t hat hour s wor ked at di f f er entst ages of a case may have di f f er ent val ues.

I d. at 1208 n. 4.

Thi s l ed t he bankrupt cy cour t t o t he ot her si de of t he

pr oper t y of t he est at e coi n. Whi l e Feder al l aw det er mi nes what

i nt er est s or asset s of t he debt or at t he t i me of f i l i ng a

bankrupt cy pet i t i on become pr oper t y of t he est at e, i t does not

set t l e quest i ons of t he exi st ence and scope of t he debt or ’ s

i nt er est i n a gi ven asset . We r esol ve t hose quest i ons by

r ef er ence t o st at e l aw. But ner v. Uni t ed St at es, 440 U. S. 48, 55

( 1979) ( “Proper t y i nt er est s are cr eat ed and def i ned by st at e l aw.

Unl ess some f eder al i nt er est r equi r es a di f f er ent r esul t , t her e i s

no reason why such i nt er est s shoul d be anal yzed di f f er ent l y si mpl y

because an i nt er est ed par t y i s i nvol ved i n a bankrupt cy

pr oceedi ng. ”) .

The bankrupt cy cour t proper l y consul t ed Cal i f or ni a st at e l aw

t o det er mi ne the val ue of at t or ney ser vi ces on a cont i ngent basi s

where t he at t orney was termi nat ed bef ore payment was recei ved. A



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r ecent deci si on of t he Cal i f or ni a Cour t of Appeal s, not ci t ed by

t he bankrupt cy cour t , pr ovi des i nsi ght i nt o quant um mer ui t

det er mi nat i ons i n cont i ngent f ee cases under Cal i f or ni a l aw.

[ A] cont i ngency f ee l awyer di schar ged pr i or t oset t l ement may recover i n quant um mer ui t f or t her easonabl e val ue of ser vi ces r ender ed up t o t he t i me of di schar ge. . . . The most usef ul st ar t i ng poi nt f ordet ermi ni ng the amount of a reasonabl e f ee i s t he numberof hour s r easonabl y expended on t he l i t i gat i onmul t i pl i ed by a r easonabl e hour l y r at e. Thi scal cul at i on pr ovi des an obj ect i ve basi s on whi ch t o makean i ni t i al est i mat e of t he val ue of a l awyer ' s ser vi ces.. . . However , pr ovi di ng evi dence as t o t he number of hour s worked and r ates cl ai med i s not t he end of t heanal ysi s i n such a quant um mer ui t act i on. The par t yseeki ng f ees must al so show t he t ot al f ees i ncur r ed wer er easonabl e. Fact or s r el evant t o t hat det er mi nat i on

i ncl ude "[ t ] he nat ure of t he l i t i gat i on, i t s di f f i cul t y,t he amount i nvol ved, t he ski l l r equi r ed i n i t s handl i ng,t he ski l l empl oyed, t he at t ent i on gi ven, t he success orf ai l ur e of t he at t or ney' s ef f or t s, t he at t or ney' s ski l land l ear ni ng, i ncl udi ng hi s [ or her ] age and exper i encei n t he par t i cul ar t ype of wor k demanded. ”

Mar di r ossi an & Associ at es, I nc. v. Er sof f , 153 Cal . App. 4t h 257,

273 ( Cal . Ct . App. 2007) . ( Emphasi s added, i nt er nal ci t at i ons

omi t t ed) .

Thus, under t he prevai l i ng gui del i nes i n Cal i f or ni a case l aw,

t he quant um mer ui t val ue of t he ser vi ces per f or med by an at t or ney

who i s t ermi nated bef ore recover y on a cont i ngent f ee case does

not end wi t h a l odest ar anal ysi s. I nst ead, t r i al cour t s must l ook

beyond t he hour s wor ked t o consi der ot her f act or s, i ncl udi ng t he

r esul t s achi eved. As t he bankrupt cy cour t observed, t he di sput e

i n t hi s case i s compar abl e t o a hypot het i cal case i n whi ch an

at t orney worked t en hour s on a case, was t ermi nated, another

at t orney worked t en hour s and achi eved a $100, 000 set t l ement .

Shoul d t he at t or neys spl i t t he f ees 50/ 50, as Ti shgar t woul d

suggest , or shoul d t he cour t conduct an i nqui r y i nt o whet her t he



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f i r st at t or ney had gr eat er or l esser r esponsi bi l i t y f or achi evi ng

t he r esul t s?

The r equi r ement t hat a t r i al cour t l ook beyond t he hours

wor ked by t he at t or ney t o consi der ot her f act or s, i ncl udi ng t he

r esul t s achi eved, appear s i n ot her Cal i f or ni a cases. I n a case

ci t ed by Debt or s, Fr i casse v. Br ent , 6 Cal . 3d 784, 791 ( 1972) , t he

Cal i f or ni a Supr eme Cour t consi der ed a si t uat i on wher e an at t or ney

devot ed consi der abl e ef f or t s t o a case, was di schar ged, and t he

cl i ent achi eved a set t l ement . The cour t awar ded f ees based on i t s

f i ndi ngs of whet her t he at t or ney’ s wor k was pr i nci pal l y

r esponsi bl e f or t he r ecover y.I n addi t i on, i n Padi l l a v. McCl el l an, 93 Cal . App. 4t h 1100,

1103 ( Cal . Ct . App. 2001) , t he cour t consi der ed a case deal i ng

wi t h a pr obate set t l ement , where an at t orney worked on the case

f or a year , was di schar ged, and succeeded by another at t orney who

achi eved t he set t l ement . The cour t awar ded f ees t o t he at t or neys

based not onl y on r espect i ve hour s spent on t he case by t he

at t or neys, but al so based on t he cour t ’ s vi ew of what t he cour t

per cei ved t o be t he r esul t s each at t or ney achi eved.

I ndeed, t he Cal i f or ni a cour t s have expl i ci t l y r ej ected

Debt ors’ argument t hat t he quant um merui t st andard i s based

st r i ct l y on hour s wor ked:

Because t he hour l y f ee i s t he pr evai l i ng pr i ce st r uct ur ei n t he l egal pr of essi on, i t i s somet i mes assumed t hatt he quant um mer ui t st andar d appl i ed t o l egal servi ces

i ncl udes not hi ng mor e than a reasonabl e hour l y rat emul t i pl i ed by the amount of t i me spent on t hecase. . . . However , t hi s i s an over l y nar r ow vi ew of t he quant um mer ui t st andar d appl i ed i n t he ar ea of cont i ngent f ee agr eement whi ch, t hr ough no f aul t of ei t her par t y, coul d not be per f or med.

Cazares v, Saenz, 208 Cal . App. 3d 279, 286- 87 ( Cal . Ct . App.



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1989) .

I n shor t , Cal i f or ni a case l aw does not suppor t Debt or s’

ar gument t hat t he val ue of Ti shgar t ’ s servi ces on t he Fi f t een

Cases t o be t ur ned over t o Tr ust ee must be determi ned sol el y by

r ef er ence t o t he number of hour s Ti shgar t act ual l y spent

pr epet i t i on on t he cases. I nst ead, st at e l aw r equi r es a cour t t o

l ook beyond t he hour s spent and consi der ot her f act or s, i ncl udi ng

t he r esul t s Ti shgar t achi eved.

The bankrupt cy cour t f ound t hat Ti shgar t had provi ded l i t t l e

i nf or mat i on on hi s post - pet i t i on act i vi t i es i n t he r el evant cases.

“He has gi ven t he cour t scant basi s f or di f f er ent i at i ng bet weenhi s pr epet i t i on and post pet i t i on wor k on t he cases. ” Memor andum

at 3.

The evi dent i ar y r ecor d suppor t s t he bankrupt cy cour t ’ s

observat i ons. Thr ough t he var i ous i nt er r ogat or i es and answer s

admi t t ed i nt o evi dence, t he cour t had i nf or mat i on about each of

t he Fi f t een Cases, i ncl udi ng cl i ent s, dat es, and amount s pai d.

Tr ust ee’ s exhi bi t s on el even of t he Fi f t een Cases, wi t h addi t i onal

document at i on obt ai ned f r om Ti shgar t ’ s f i l es, wer e al so admi t t ed

i nt o evi dence. Debt or s pr ovi ded no exhi bi t s or document ar y

suppor t f or Ti shgar t ’ s t est i mony.

Ti shgar t was exami ned under oath r egar di ng t he cases. He

admi t t ed t hat he kept no t i me recor ds and any t est i mony he of f ered

on t he t i me he spent on each case was an est i mate. Tr i al

Tr . 15: 12- 19, Februar y 14, 2012. Hi s t est i mony was at t i mes

i nconsi st ent . Regar di ng t he Faust case, f or exampl e, i n whi ch t he

cl i ent r ecei ved a $100, 000 set t l ement , Ti shgar t or i gi nal l y deni ed

t hat i t had set t l ed bef or e t he pet i t i on dat e. Tr i al Tr . 20: 23.



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When pr esent ed wi t h document ary evi dence f r om hi s st i pul at i ons i n

an ear l i er st at e cour t pr oceedi ng i n t he Faust case, he admi t t ed

t hat t he set t l ement agr eement had been r eached and a mot i on t o

appr ove t he set t l ement was submi t t ed pr epet i t i on. Tr i al

Tr . 22: 2- 17. The bankrupt cy cour t coul d be j ust i f i abl y skept i cal

of Ti shgar t ’ s t est i mony t hat he onl y spent t wo hour s pr epet i t i on

on t hi s case.

Regar di ng t he San Mi guel case, f or whi ch Ti shgar t r ecei ved

one of hi s l ar gest f ees of $47, 500, Ti shgar t onl y cl ai med one hour

of pr epet i t i on ser vi ces. Yet Ti shgar t ’ s own f i l es, obt ai ned by

Tr ust ee and admi t t ed i nto evi dence, showed t hat Ti shgar t hadi nt er vi ewed hi s cl i ent , and dr af t ed t he compl ai nt i ni t i at i ng t he

l awsui t on behal f of San Mi guel over a year bef or e t he pet i t i on.

Ther e had been at l east one case management conf er ence, Ti shgar t

had submi t t ed di scover y responses, been i nvol ved i n di scover y

di sput es, and had sel ect ed medi at or s, al l bef or e t he pet i t i on

dat e. Tr i al Tr . 35: ER at 130- 59. As t o post - pet i t i on act i ons,

Ti shgar t t est i f i ed:

RAY ( at t or ney f or Tr ust ee) : So what di d you do af t er t hepet i t i on dat e t o ear n t hat $47, 500 i n f ees, speci f i cal l yser vi ces you perf ormed?

TI SHGART: Wel l , you asked me t wo quest i ons. The f eesar e ear ned as a r esul t of a cont i ngency. I can’ t answert he quest i on what I di d af t er t he pet i t i on dat e t o wor kon t he case.

Tr i al Tr . 36: 13- 17.

Ti shgar t answer ed quest i ons about t he ot her cases i n a

si mi l ar vei n, di scussi ng pr epet i t i on ser vi ces wi t h f r equent

i nconsi st enci es, and post - pet i t i on ser vi ces i n gener al t er ms

wi t hout speci f i c r ef er ence t o act ual t i me spent . The bankrupt cy



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cour t di d not er r i n i t s concl usi on t hat : "[ Ti shgar t ] has gi ven

t he cour t scant basi s f or di f f er ent i at i ng bet ween hi s pr epet i t i on

and post pet i t i on work on t he cases. " Memorandum at 3.

What i s cer t ai n, as obser ved by t he bankrupt cy cour t , was

t hat Ti shgart had been deemed t o admi t t hat he per f ormed l i t t l e or

no ser vi ces post - pet i t i on on t he Fi f t een Cases. Thus, t he cour t

coul d r easonabl y i nf er t hat what ever servi ces Ti shgar t per f or med

pr epet i t i on wer e cr i t i cal t o t he r esul t s achi eved, and t o t he

cont i ngent f ee payment s made, and t hat t he pr epet i t i on servi ces

wer e of mor e val ue t han t he “l i t t l e or no servi ces” per f or med

af t er t he bankr upt cy f i l i ng.I n sum, absent mor e evi dent i ar y suppor t f or Debt or s’

posi t i on, t he bankrupt cy cour t woul d not have er r ed i f i t had

concl uded t hat i t was j ust i f i ed i n “awar di ng al most al l of t he

f ees i n quest i on t o [ Tr ust ee] . ” Memor andum at 3. As a r esul t ,

Ti shgar t i s not prej udi ced because t he cour t awar ded l ess t han

t hat amount t o Tr ust ee.

But t he cour t was al so f ul l y j ust i f i ed i n awar di ng hal f t he

f ees t o Ti shgar t . The cour t not ed i n i t s memor andum t hat i t had

r evi ewed the evi dence and document at i on on t he cases and was not

r el yi ng si mpl y on t he deemed admi ss i ons.

I n cases commenced wel l bef ore t he bankr upt cy, most of t he work was pr epet i t i on. I n cases commenced near er t ot he bankrupt cy, most of t he wor k was post pet i t i on,not wi t hst andi ng Ti shgar t ’ s deemed admi ssi on to t hecont r ar y. They pr et t y much of f set each ot her , so a 50-

50 spl i t seems f ai r . The cour t not es t hat Ti shgar t di dnot keep t i me r ecor ds, t her eby maki ng i t di f f i cul t t odi vi ne a f ai r spl i t mor e pr eci sel y.

Memor andum at 4 n. 2.

The bankrupt cy cour t di d not er r i n deci di ng t hat Ti shgar t



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8 Debt or s al so compl ai n t hat t he bankrupt cy cour t f ai l ed t oent er adequat e f i ndi ngs of f act pur suant t o Ci vi l Rul e 52/Rul e 7052. But Ci vi l Rul e 52( a) ( 1) pr ovi des t hat t he t r i alcour t ’ s f i ndi ngs “may appear i n an opi ni on or a memorandum of deci si on f i l ed by t he cour t , ” and t he bankrupt cy cour t ’ s f i ndi ngswere speci f i cal l y pr esent ed i n t he Memorandum.

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must t ur n over $69, 837. 90 of t he f ees pai d t o hi m post - pet i t i on t o

Tr ust ee. 8

CONCLUSION

We AFFI RM t he j udgment of t he bankr upt cy cour t .

Documents

In re: Kenneth Bruce Tishgart and Lori Anne Tishgart, 9th Cir. BAP (2012)