Claims

CLAIMS

1. Definition

2. 502(b)(2)

3 502(b)(6)

4. 502(b)(7)

5. 502(c)–Estimation

6. 502(d)

7. 502(e)(1)(b)

8. 502(h)

9. 502(j)

10. Claims Assignment and Trading

11. Contingent claims

–

definition

12. Effect of proof of claim; burden of proof; requirements for valid proof of claim;

procedure

13. Environmental Claims

14. Informal and amended proofs of claim; reconsideration of claims

15. Tardily-filed claims; excusable neglect

16. Miscellaneous

1. Definition

In re ZiLOG, Inc., 450 F.3d 996 (9th Cir. 2006)

1.) Federal law determines when a claim arises under the bankruptcy code; 2.) as is true of

environmental claims, sex discrimination claims arise under the bankruptcy code once it is within

the “fair contemplation” of the claimant; 3.) summary judgment in favor of the debtor holding

that claimants’ postconfirmation claims were not timely filed reversed; bankruptcy abused

discretion in not finding excusable neglect for not timely filing prepetition claims.

In re Guastella, 341 B.R. 908 (9th Cir. BAP 2006)

Creditor had a claim, even though a state court had only made a tentative decision on the

lawsuit creditor had against the debtor as of the date of the filing of the petition.

In re Cossu, 410 F.3d 591 (9th Cir. 2005)

Insurance company had a right to payment under indemnity agreement with the debtor for

losses sustained as a result of sales of unregistered securities for another company which was not

disclosed to company, and may have had such a right as to lawsuits arising out of these sales.

2. 502(b)(2)

Thrifty Oil Co. v. Bank of America National Trust and Savings Assoc., 322 F.3d 1039 (9th Cir.

2003)

Termination damages under an interest swap agreement, entered into between a lender and

a borrower as part of a larger financing transaction, may not constitute unmatured interest

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disallowed under § 502(b)(2) of the Bankruptcy Code.

In re Holm, 931 F.2d 620 (9th Cir. 1991)

Future profits were not unmatured interest excludable from creditor’s claim. Informal

proof of claim standards.

3. 502(b)(6)

In re El Toro Materials Co., Inc., 504 F.3d 978 (9th Cir. 2007), cert denied, 128 S.Ct. 1875

(2008)

The cap on damages from termination of a lease of real property does not cap collateral

damage to the property.

In re JSJF Corp., 344 B.R. 94 (9th Cir. BAP 2006), aff’d, 277 Fed.Appx. 718 (9th Cir. 2008)

Section 502(b)(6) only applies to damages from the termination of a lease. A lessor may

have an un-capped claim for something other than such damages.

In re AB Liquidating Corp.

,

416 F.3d 961 (9th Cir. 2005)

Security deposit on lease should be applied to the capped damages, rather than the gross

claim.

In re Mayan Networks Corp., 306 B.R. 295 (9th Cir. B.A.P. 2004)

A draw upon a letter of credit given as security for a lease will be applied in partial

satisfaction of the allowed claim under § 502(b)(6).

In re Arden, 176 F.3d 1226 (9th Cir. 1999)

§506(b)(6) cap is applicable to lessor’s claim against debtor guarantor.

In re Lomax, 194 B.R. 862 (9th Cir. B.A.P. 1996)

Mid-Wilshire’s election to terminate the lease as abandoned was an acceptance of the

debtor’s offer of surrender, restoring possession of the premises to the lessor, an triggering the

limitations of damages to one year and unpaid rent to two months under § 502(b)(6). The state

court’s ruling did not preclude the bankruptcy court’s hearing of these issues.

In re First Alliance Corp., 140 B.R. 531 (9th Cir. B.A.P. 1992)

§ 502(b)(6) – Postpetition rents do not qualify as credits against one year period. Case

seems to hold that one year period runs from the date of rejection.

4. 502(b)(7)

In re Condor Systems, Inc. 296 B.R. 5 (9th Cir. B.A.P. 2003)

The § 507(b)(7) cap on allowable claims of terminated employees is calculated

mechanically as of the date of the filing of the petition and prepetition severance payments and

pre-and postpetition draws on letters of credit may affect the amount of the claim but not the §

502(b)(7) cap.

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In re Networks Electronics Corp., 195 B.R. 92 (9th Cir. B.A.P. 1996)

1. 502(b)(7) applies to both executory and nonexecutory contracts. Here, court finds

executory contract even though employee retired nine years prior to bankruptcy

2. 502(b)(7) limits damages regardless of when termination occurs.

5. 502(c)–Estimation

In re Aquaslide ‘N’ Dive Corp., 85 B.R. 545 (9th Cir. B.A.P. 1987)

Bankruptcy court had right and duty to estimate personal injury claim brought against

debtor.

6. 502(d)

In re MicroAge, Inc., 291 B.R. 503 (9th Cir. B.A.P. 2002)

§ 502(d) may be used to bar payment of administrative claims (such as the reclamation

claim in this case), but not after the administrative claim has been allowed.

In re America West Airlines, Inc., 217 F.3d 1161 (9th Cir. 2000)

When a city fails to relinquish an avoidable tax lien, § 502(d) acts to disallow its claim,

even if an avoiding action would have been barred by the § 546 statute of limitations.

In re KF Dairies, Inc., 143 B.R. 734 (9th Cir. B.A.P. 1992)

Time-bar statute inapplicable to defensive objections to avoidable transfers. § 546 does

not prevent use of § 502(d) as a defense to claims, even where transfer has not been avoided.

7. 502(e)(1)(B).

In re Dant & Russell, Inc., 853 F.2d 700 (9th Cir. 1988)

8. 502(h)

In re Laizure, 548 F.3d 693 (9th Cir. 2009)

Embezzlement claim that was paid off prior to bankruptcy was revived once claimant

paid trustee for preference recovery, and thus claimant had a § 523(a)(4) cause of action against

debtor. § 502(h) gives a creditor a claim against the estate and the debtor.

9. 502(j)–Reconsideration

In re Wylie, 349 B.R. 204 (9th Cir. BAP 2006)

Failure to respond to objection to its claim,and failure to establish an excuse for this

failure, justified denial of the claim other than on the merits. Once ten days has passed,

claimant’s right to seek reconsideration under § 502(j) is gone. He is left to seek reconsideration

under Rule 60(b), but is limited to the narrow grounds set forth in the rule. Claimant did not

establish prerequisites for relief under Rule 60(b)(1), (b)(3), or (b)(6).

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In re Cleanmaster Industries, Inc., 106 B.R. 628 (9th Cir. B.A.P. 1989)

§ 502(j). Motion to reconsider is same as Fed.R.Bankr.P. 9024/FRCP 60(b) motion,

where appeal time has run.

In re James E. O’Connell Co., Inc., 893 F.2d 1072 (9th Cir. 1990)

§ 506(j). Recovery of expenses from Trustee – Burden of Proof.

In re Levoy, 182 B.R. 827 (9th Cir. B.A.P. 1995)

Motion to reconsider denial of a claim under Fed.R.Bankr.P. 3008 is timely, even though

filed over one year after default.

10. Claims Assignment and Trading

In re Burnett, 306 B.R. 313 (9th Cir. B.A.P. 2004), aff’d on other grounds, 435 F.3d 971 (9th Cir.

2006)

“We hold that in the bankruptcy case of an individual consumer debtor, the transferee’s

refusal to disclose its purchase price for acquiring an account does not warrant disallowance of an

otherwise valid claim.”

In re Beugen, 99 B.R. 961 (9th Cir. B.A.P. 1989), aff’d, 930 F.2d 27 (9th Cir. 1991)

Claims may not be purchased for an improper purpose.

11. Contingent claims

–

definition

In re Seko Investment, Inc., 156 F.3d 1005 (9th Cir. 1998), cert. denied, 526 U.S. 1066 (1999)

Claims are contingent as to liability when the debtor’s duty to pay arises only upon the

occurrence of a future event that was contemplated by the parties at the time of the contract’s

execution. See In re Sims, 994 F.2d at 220, cert. denied, 510 U.S. 1049 (1994) (citing In re All

Media Properties, Inc., 5 B.R. 126, 132 (Bankr. S.D. Tex. 1980), aff’d, 646 F.2d 193 (5th Cir.

1981)).

12. Effect of proof of claim; burden of proof; requirements for valid proof of claim;

procedure

In re Garvida, 347 B.R. 697 (9th Cir. BAP 2006)

Objection to proof of claim of secured creditor in chapter 13 case was correctly sustained,

where creditor was given numerous opportunities to provide the debtor with an accounting of how

their claim was calculated, but failed to do so, and the debtor provided evidence as to the correct

amount of the claim.

In re Campbell, 336 B.R. 430 (9th Cir. BAP 2005)

Interpreting In re Heath, infra, the BAP held that a chapter 13 debtor’s objections to

claims which did not actually contest the debtor’s liability or the amount of the claims were

properly overruled, even if the claims were not supported by documentation as required by

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Bankruptcy Rule 3001(c).

In re Heath, 331 B.R. 424 (9th Cir. BAP 2005)

“When a creditor files a proof of claim, that claim is deemed allowed under sections 501

and 502(c). A proof of claim that lacks the documentation required by Rule 3001(c) does not

qualify for the evidentiary benefit of Rule 3001(f)–it is not prima facie evidence of the validity

and amount of the claim–but that by itself is not a basis to disallow the claim.” Claims here were

credit card claims.

In re State Line Hotel, Inc., 323 B.R. 703 (9th Cir. BAP 2005), vacated and remanded as moot,

242 Fed.Appx. 460 (9th Cir. 2007)

Service of an objection to a proof of claim is governed by Bankruptcy Rule 3007, not

7004. Service of the objection on the person designated on the proof of claim as the notice

recipient was sufficient.

In re Olshan, 356 F.3d 1078 (9th Cir. 2004)

IRS (and presumably other claimants) is not required to fix the amount of its claim in its

proof of claim

.

In re Dynamic Brokers, Inc., 293 B.R. 489 (9th Cir. B.A.P. 2003)

“Deemed allowed” claim may only be challenged over creditor’s opposition by filing a

claim objection

.

Lundell v. Anchor Const. Specialists, Inc., 223 F.3d 1035 (9th Cir. 2000)

Debtor did not meet his production burden to rebut prima facie validity of proof of claim.

In re King Street Investments, Inc., 219 B.R. 848 (9th Cir. B.A.P. 1998)

“The allegations of the proof of claim are taken as true if those allegations set forth all the

necessary facts to establish a claim and are not self-contradictory, the prima facie establish the

claim. Should objection be taken, the objector is then called upon to produce evidence and show

facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of

claim themselves.”

In re Medina, 205 B.R. 216 (9th Cir. B.A.P. 1996)

IRS entitled to rely on presumptive validity of filed proof of claim

In re MacFarlane, 83 F.3d 1041 (9th Cir. 1996), cert. denied, 117 S.Ct 1243 (1997)

Taxing authority has ultimate burden of proving its claim in bankruptcy proceeding

In re Los Angeles International Airport Hotel Associates, 196 B.R. 134 (9th Cir. B.A.P. 1996),

aff’d, 106 F.3d 1479 (9th Cir. 1997)

Rule 3001(c) provides that “[w]hen a claim, or an interest in property of the debtor

securing the claim, is based on a writing, the original or a duplicate shall be filed with the proof of

claim.” The failure to attach such a writing, when required, does not automatically invalidate, the

claim; it does, however, deprive the claim of prima facie validity under Rule 3001(f). In re

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Stoecker, 5 F.3d 1022, 1027-28 (7th Cir. 1993); Ashford v. Consolidated Pioneer Mortgage (In re

Consolidated Pioneer Mortgage), 178 B.R. 222, 226-27 (9th Cir. B.A.P. 1995).

In re Consolidated Pioneer Mortgage, 178 B.R. 222 (9th Cir. B.A.P. 1995), aff’d. 91 F.3d 151

(9th Cir. 1996)

1. Objecting party must produce evidence tending to defeat the claim that is of a

probative force equal to that of the creditor’s proof of claim.

2. Failure to attach writings to claim is not basis for denying it. Merely gives claim no

prima facie validity.

In re Lowenschuss, 67 F.3d 1394 (9th Cir. 1995), cert. Denied by Lowenschuss v. Resorts

Intern., Inc., 517 U.S. 1243 , 116 S.Ct. 2497 (U.S. 1996)

Error not to allow conditional withdrawal of claim.

13. Environmental Claims

In re Jensen, 995 F.2d 925 (9th Cir.1993)

Origination for state agency’s clean up of hazardous waste claim based on debtors’

conduct rather than time of payment.

14. Informal and amended proofs of claim; reconsideration of claims

In re JSJF Corp., 344 B.R. 94 (9th Cir. BAP 2006), aff’d and remanded, 277 Fed.Appx. 718 (9th

Cir. 2008)

1) In considering an objection to an amended claim, the objecting party must “show more

than simply having to litigate the merits of, or to pay, a claim–there must be some legal detriment

to the party opposing.” 2) Motion for reconsideration may not present new legal theories or

arguments that could have been raised in the original claims proceedings.

In re Wheatfield Business Park, LLC, 308 B.R. 463 (9th Cir. B.A.P. 2004)

Under Bankruptcy Rule 5005, creditor timely filed informal proof of claim by delivering

claim documents to United States trustee.

Civic Center Square, Inc. v Ford (In re Roxford Foods, Inc.), 12 F.3d 875 (9th Cir. 1993)

Trustee’s Right to Notice of Adversary Proceeding

After Chapter 11 case converted to Chapter 7, plaintiff commenced an adversary

proceeding against the trustee and two other creditors. The trustee was served but did not

respond. Default judgment was entered against the trustee. Thereafter, plaintiff moved for

summary judgment but did not serve trustee based on prior entry of default. Held, Trustee’s

motion to vacate summary judgment was granted based on failure to serve trustee. Trustee’s

informal contacts with plaintiff in the main bankruptcy case, where the same disputes were at

issue, demonstrated a clear purpose to defend the adversary proceeding and were deemed to be an

“appearance” under Fed.R.Civ.P. 55(b)(2).

In re Holm, 931 F.2d 620 (9th Cir. 1991)

Future profits were not unmatured interest excludable from creditor’s claim. Informal

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proof of claim standards.

15. Tardily-filed claims; excusable neglect

In re ZiLOG, Inc., 450 F.3d 996 (9th Cir. 2006)

1.) Federal law determines when a claim arises under the bankruptcy code; 2.) as is true of

environmental claims, sex discrimination claims arise under the bankruptcy code once it is within

the “fair contemplation” of the claimant; 3.) summary judgment in favor of the debtor holding

that claimants’ postconfirmation claims were not timely filed reversed; bankruptcy abused

discretion in not finding excusable neglect for not timely filing prepetition claims.

Pioneer Inv. Services Co. v Brunswick Assocs. Ltd Partnership, 507 U.S. 380(1993)

4 part test to determine whether circumstances surrounding the party’s omission

constitutes “excusable neglect” (weakens In re Hammer’s holding re “culpable conduct”):

1. Danger of prejudice to the debtor

2. The length of the delay and its potential impact on judicial proceedings

3. The reason for the delay, including whether it was within the reasonable control of the movant

4. Whether the movant acted in good faith.

In re Gardenhire, 209 F.3d 1145 (9th Cir. 2000)

Statutory deadline for filing of IRS proof of claim was not equitably tolled, even though

there was an improper dismissal of the case resulting from clerical error.

In re Osbourne, 76 F.3d 306 (9th Cir. 1996)

Tardily filed claims in chapter 13 cases are to be disallowed not merely given lower

priority.

United States v. Towers (In re Pacific Atlantic Trading Co.), 33 F.3d 1064 (9th Cir. 1994)

The I.R.S. received timely notice of the bar date for filing claims in a Chapter 7 case but

filed its § 507(a)(7) priority tax claim after the bar date. Th court held that the claim retained its

priority status even though it was filed after the bar date. The court reasoned that subsection

726(a)(1), unlike subsections 726(a)(2) and (3), makes no distinction between timely and late

claims, and that Congress intended priority claims to receive first distribution regardless of

whether a proof of claim was filed timely or late.

In re Coastal Alaska Lines, Inc., 920 F.2d 1428 (9th Cir. 1990)

Relief denied to creditor who had knowledge of debtor’s bankruptcy but did not file claim.

16. Miscellaneous

In re Chaussee, 399 F.3d 225 (9th Cir. BAP 2008)

The act of filing a proof of claim in a bankruptcy case may not, alone, subject the claimant

to liability for violation of state and federal fair debt collection laws.

In re Lopez, 372 B.R. 40 (9th Cir. BAP 2007), aff’d, 550 F.3d 1202 (9th Cir. 2009)

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Both pre- and post-BAPCA, debtor is permitted to make direct payments on notes secured

by deeds of trust on his residence directly to creditors, while simultaneously allowing him to pay

his prepetition arrears on those notes via the trustee.

In re Ritter Ranch Development, L.L.C., 255 B.R. 760 (9th Cir. B.A.P. 2000)

Community development bondholders were not “creditors” of developer

.

In re Gerwer, 253 B.R. 66 (9th Cir. B.A.P. 2000)

Estate distribution was an involuntary payment, thus prohibiting the debtor from directing

that distribution be applied first to the nondischargeable portion of a debt. Creditor had the right

to apply payment from estate to the dischargeable portion of the debt.

In re Cogar, 210 B.R. 803 (9th Cir. B.A.P. 1997)

Bank’s unexercised rights as senior lienholder of property owned by third party do not

make bank creditor of bankruptcy estate of junior lienholder

In re Smith, 205 B.R. 226 (9th Cir. B.A.P. 1997)

Debtor not entitled to jury trial in adversary proceeding to contest IRS tax claim

In re Irizarry, 171 B.R. 874 (9th Cir. B.A.P. 1994)

Equitable remedies of cancellation of grant deed and liens and recovery of property are

not claims subject to discharge. State court litigation not barred by § 362 or 524.

Ratanasen v. State of California, Dept. of Health Services, 11 F.3d 1467 (9th Cir. 1993)

State filed claim against debtor-doctor, alleging Medi-Cal over billing. Claimant’s use of

a random sample audit of 300 files to prove claims arising from 8,761 total actual files was held

valid. Each file did not have to be examined to prove amount of claim. Court upholds as a matter

of law the use of statistical sampling and extrapolation, in publicly-funded reimbursement

programs.

In re Riverside-Linden Investment Co., 99 B.R. 439 (9th Cir. B.A.P. 1989), aff’d, 925 F.2d 320

(9th Cir. 1991)

General partner’s partnership interest is not a claim.

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COLLATERAL ESTOPPEL & RES JUDICATA (ISSUE AND CLAIM PRECLUSION)

Taylor v. Sturgell, –U.S.–, 128 S.Ct. 2161 (2008)

Court rejects the application of the “virtual representation” doctrine to claim and issue

preclusion as to nonparties except under narrow circumstances.

Kendall v. Visa U.S.A., Inc., 5118 F.3d 1042, 1050-51 (9th Cir. 2008)

“Issue preclusion prevents a party from relitigating an issue decided in a previous action if

four requirements are met: “(1) there was a full and fair opportunity to litigate the issue in the

previous action; (2) the issue was actually litigated in that action; (3) the issue was lost as a result

of a final judgment in that action; and (4) the person against whom collateral estoppel is asserted

in the present action was a party or in privity with a party in the previous action.”“ [citation

omitted]

In re Cogliano, 355 B.R. 792 (9th Cir. BAP 2006)

The denial of the debtor’s first amended claim of exemption did not preclude her assertion

in her second claim of exemption that her IRA was not property of the estate. Neither issue

preclusion nor claim preclusion applied, since the issue of property of the estate was not

necessarily decided in the initial exemption decision. Further, the issue of property of the estate

had to be decided by way of an adversary proceeding, not a contested matter.

In re George, 318 B.R. 729 (9th Cir. BAP 2004), aff’d, 144 Fed.Appx. 636 (9th Cir. 2005), cert.

denied, 546 U.S. 1094 , 126 S.Ct. 1068 (2006)

Claim preclusion barred debtor from pursuing a § 525 claim in bankruptcy court that

could have been pursued in prevous litigation dismissed with prejudice in federal court.

Miller v. U.S, 363 F.3d 999 (9th Cir. 2004)

Res judicata did not apply to IRS claim, where the plan’s discharge provisions were found

to be ambiguous.

Latman v. Burdette, 366 F.3d 774 (9th Cir. 2004)

Res judicata did not bar trustee from seeking to surcharge a debtor’s wild card exemption

based on under-reporting of assets, even though the trustee could have joined this action with

complaint objecting to discharge upon which he prevailed.

In re Arneson, 282 B.R. 883 (9th Cir. B.A.P. 2002)

A § 523 judgment in a prior bankruptcy case has claim preclusion effect unless and until

vacated.

Stratosphere Litigation L.L.C. v. Grand Casinos, Inc., 298 F.3d 1137 (9th Cir. 2002)

Third party creditor was barred by res judicata from challenging bankruptcy court’s

confirmation of debtor’s reorganization plan after party’s predecessor had previously failed to

object

Rein v. Providian Financial Corporation, 270 F.3d 895 (9th Cir. 2001)

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Federal doctrine of claims preclusion requires a showing that: “ 1)the parties are identical

or in privity; 2)the judgment in the prior action was rendered by a court of competent jurisdiction;

3)the prior action was concluded to a final judgment on the merits; and 4) the same cause claim or

cause of action was involved in both suits.”

In re Wolfberg, 255 B.R. 879 (9th Cir. B.A.P. 2000), aff’d, 37 Fed.Appx. 891 (9th Cir. 2002)

Debtor’s attempt to assert a claim of homestead exemption after confirmation of a chapter

11 plan was barred by res judicata

In re DiSalvo, 219 F.3d 1035 (9th Cir. 2000)

An individual chapter 11 debtor who defended against a nondischargeability suit was

barred by the doctrine of claim preclusion from advancing additional debtor-in-possession claims

in the same forum.

Siegel v. Federal Home Loan Mortgage Corporation, 143 F.3d 525 (9th Cir. 1998)

Ruling allowing bankruptcy claim on note secured by deed of trust was res judicata in

subsequent suit founded on theory that could possibly have supported objection to bankruptcy

court claim. Claim that is deemed allowed has res judicata effect.

In re Universal Life Church, Inc., 128 F.3d 1294 (9th Cir. 1997), cert. denied, 524 U.S. 952

(1998)

Application of collateral estoppel test in tax context

In re Russell, 76 F.3d 242 (9th Cir. 1996)

The court of appeals reversed a decision of the Ninth Circuit B.A.P. The court held that a

state court proceeding in which a final judgment was entered with regard to entities that

individuals completely controlled, collaterally estopped those individuals from litigating a civil

rights action concerning identical issues, even though judgment on its face was not applied to

individuals. (Reversing 166 B.R. 901 (9th B.A.P. 1994) which held that no res judicata effect as

to counterclaim, where counterclaim was reserved in consent judgment).

In re Pizante, 186 B.R. 484 (9th Cir. B.A.P. 1995), aff’d, 107 F.3d 878 (9th Cir. 1997)

Default judgment rendered because of failure to respond to request for admissions does

not have collateral estoppel effect, since there were issues not actually litigated

In re Ivory, 70 F.3d 73 (9th Cir. 1995)

Res judicata precludes a collateral attack on a Ch. 13 confirmation order, even if party was

not a creditor and the defect was thus jurisdictional

In re Berr, 172 B.R. 299 (9th Cir. B.A.P. 1994)

Consent judgment equals collateral estoppel only where parties so intend it

In re Bugna, 33 F.3d 1054 (9th Cir. 1994)

State law of collateral estoppel applies in determination of fraud – 523(a)(4) action. Under

this law, collateral estoppel bars relitigation when “(1) the issue decided in the prior action is

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identical to the issue presented in the second action, (2) there was a final judgment on the merits,

and (3) the party against whom estoppel is asserted was a party…to the prior adjudication…”

Garrett v. City and County of San Francisco, 818, F.2d 1515, 1520 (9th Cir. 1987)

In re Heritage Hotel Partnership, 160 B.R. 374 (9th Cir. B.A.P. 1993), aff’d 59 F.3d 175 (9th Cir.

1995)

Order of confirmation constitutes a final judgment…Eubanks v. FDIC, 977 F.2d 166, 169

(5th Cir. 1992)Generally, four elements must be present in order to establish the defense of res

judicata (1) the parties were identical in the two actions (2) the prior judgment was rendered by a

court of competent jurisdiction (3) there was a final judgment on the merits, and (4) the same

cause of action was involved in both cases.

In re Int’l Nutronics, Inc., 3 F 3d 306 (9th Cir. 1993), WITHDRAWN and superseded by 28 F.3d

965 (9th Cir. 1994), cert. denied, 513 U.S. 1016 (1994)

The doctrine of res judicata bars a party from bringing a claim if a court of competent

jurisdiction has rendered final judgment on the merits of the claim in a previous action involving

the same parties or their privies. In re Jensen, 980 F.2d 1254, 1256 (9th Cir. 1992). Res judicata

bars all grounds for recovery that could have been asserted, whether they were or not, in a prior

suit between the same parties on the same cause of action Clark v. Bear Starns & Co., Inc., 966

F.2d 1318, 1320 (9th Cir. 1992)

Palomar Mobilehome Park Assoc, v. City of San Marcos, 989 F.2d 362 (9th Cir. 1993)

In re Heritage Hotel Partnership, 160 B.R. 374 (9th Cir. B.A.P. 1993) aff’d. 59 F.3d 175 (9th Cir.

1995)

Res judicata – confirmation order in Chapter 11

1. Parties identified

2. Prior judgment rendered by court of competent jurisdiction

3. There was a final judgment on the merits

4. The same cause of action was involved in both cases

Nordhorn v. Ladish Co., Inc., 9 F.3d 1402 (9th Cir. 1993)

Identity of parties – res judicata – identity of claims

(1) in order to bar a later suit under the doctrine of res judicata, an adjudication must (1)

involve the same ‘claim as the later suit, (2) have reached a final judgment on the merits, and (3)

involve the same parties or their privies. Blonder-Tongue

The Ninth Circuit determines whether or not two claims are the same for purposes of res

judicata with reference to the following criteria:

(1) whether rights or interest established in the prior judgment would be destroyed or

impaired by prosecution of the second action, (2) whether substantially the same evidence is

presented in the two actions; (3) whether the two suits involve infringement of the same right and

(4) whether the two suits arise out of the same transactional nucleus of facts.

Western Systems, Inc. v Ulloa, 958 F.2d 864 (9th Cir. 1992), cert. denied, 506 U.S. 1050 (1993)

Bar applies even though facts on which new cause of action based not known

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Mason v. Genisco Tech. Corp., 960 F.2d 849 (9th Cir. 1992)

Bar

Gilbert v. Ben-Asher, 900 F.2d 1407 (9th Cir. 1990), cert. denied, 498 U.S. 865 (1990)

Collateral estoppel and res judicata

Bates v. Union Oil Co. Of California, 944 F.2d 647 (9th Cir. 1991), cert. denied, 503 U.S. 1005

(1992)

Offensive collateral estoppel – collateral estoppel effect of a District Court judgment

vacated after settlement at appeal stage

Eureka Fed Savings & Loan Assn. v. Amer. Cas. Co. Of Reading, Pa., 873 F.2d 229, 234 (9th Cir.

1989)

Collateral estoppel not available to resolve issues in a subsequent case when issues

actually litigated in the earlier case were different.

In re Rahm, 641 F.2d 755, 757 (9th Cir. 1981), cert. denied, 454 U.S. 860 (1981)

Prior judgment at most establishes a prima facie case of nondischargeability

In re Houtman, 568 F.2d 651 (9th Cir. 1978)

Matter of Lockard, 884 F.2d 1171 (9th Cir. 1989)

Tentative ruling by state court judge as to what constitutes property of estate not collateral

estoppel

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