[00:00:00] Speaker 02:
Morning, Your Honors.

[00:00:00] Speaker 02:
Thomas Kelly for the appellant.

[00:00:03] Speaker 02:
May it please the court.

[00:00:05] Speaker 02:
Appellant appears today seeking review.

[00:00:06] Speaker 01:
Let me just ask you before you begin.

[00:00:07] Speaker 01:
Do you want to reserve any time for rebuttal?

[00:00:10] Speaker 02:
Thank you, Judge.

[00:00:11] Speaker 02:
Yes, five minutes, please.

[00:00:12] Speaker 01:
All right.

[00:00:14] Speaker 02:
And appellant appears today seeking review of the bankruptcy court's decision awarding attorney's fees to appellees following a non-dischargeability action by appellant regarding an eviction judgment against the appellees.

[00:00:26] Speaker 02:
This action, the underlying adversary proceeding was an action on a judgment.

[00:00:30] Speaker 02:
It was not an action on a contract.

[00:00:33] Speaker 02:
In the decision announced by the court, it relied, there were two bases presented for attorney's fees.

[00:00:39] Speaker 02:
The first was 11 USC 523D.

[00:00:40] Speaker 02:
The court, bankruptcy court denied that motion on the basis that the court found there was substantial justification for the action.

[00:00:48] Speaker 02:
And instead, the court relied upon California Code of Civil Procedure, Section 1021.

[00:00:54] Speaker 02:
which provides that attorney's fees are recoverable pursuant to the agreement between the parties, generally speaking, the contract.

[00:01:00] Speaker 02:
In this action, there was no contract action.

[00:01:02] Speaker 02:
The court did not consider, for example, the elements of a contract, formation, consideration, breach, damages.

[00:01:09] Speaker 02:
Rather, it was exclusively whether or not the judgment was dischargeable or not pursuant to federal law.

[00:01:15] Speaker 02:
There was no, in my opinion, pending appellate, there was no state court claim here for attorney's fees.

[00:01:22] Speaker 01:
So are you saying they shouldn't have considered, the court should not have considered sections 1021 and CCP 10, or civil code 1021 and 1032, notwithstanding the broad language in the contracts regarding attorney's fees?

[00:01:37] Speaker 01:
Is that?

[00:01:37] Speaker 02:
Well, the language of 1021 exclusively, Judge, is that, and I'm quoting the statute right now, the measure and motive compensation of attorneys and counselors is left to the agreement expressed or implied of the parties.

[00:01:50] Speaker 02:
So that means that you're interpreting the contract provisions.

[00:01:53] Speaker 02:
And we have a problem there, which I point out in my brief, which is the court did not appear to know which contract it was awarding attorney's fees under.

[00:02:01] Speaker 02:
Now, there are three different... Right.

[00:02:06] Speaker 01:
There's the lease, the option, and the purchase agreement, right?

[00:02:09] Speaker 02:
That's correct.

[00:02:10] Speaker 02:
And if you read the quote from the bankruptcy court,

[00:02:14] Speaker 02:
Actually, this is the March 4, 2025 hearing.

[00:02:17] Speaker 02:
So I'm quoting it now.

[00:02:19] Speaker 02:
So with what I think I have, I think the right answer is to allow the fees that Mr. Olson is asking under Section 1021.

[00:02:26] Speaker 02:
When I pressed the bankruptcy court further to inquire as to what was the nature of whether or not 1021 or the contract provision, you know, what was the basis that the motion was being granted, I specifically asked, and it's on the record, are you holding that the dischargeability action was an action on the contract?

[00:02:44] Speaker 02:
the court said no.

[00:02:46] Speaker 02:
It's not an action on the contract.

[00:02:47] Speaker 02:
Rather, I don't think, as I said, no, no, I don't think I have to go there.

[00:02:51] Speaker 02:
I don't think 1021 requires that.

[00:02:54] Speaker 02:
California law does, and that's the centesis in the Jaffee case, which I quote in my brief.

[00:02:59] Speaker 01:
Well, let me back you up a little bit here because, and kind of

[00:03:03] Speaker 01:
not necessarily back you up, but ask you the bigger picture question.

[00:03:07] Speaker 01:
There's a BAP case.

[00:03:08] Speaker 01:
It's called Enray-Tinaharo.

[00:03:10] Speaker 01:
Nobody cited it.

[00:03:11] Speaker 01:
The citation is 2020 WL 467-3235, which seems to address this issue directly.

[00:03:21] Speaker 01:
There was a decision by Judge Laura Taylor, joined by Judge Gary Spraker, and dissent by Judge Rob Farris.

[00:03:28] Speaker 01:
And the question is, how do you deal with this exact situation?

[00:03:37] Speaker 01:
And it cites the Jaffee case.

[00:03:43] Speaker 01:
Does the completion of your underlying state court judgment, does that extinguish any right to attorney's fees?

[00:03:51] Speaker 01:
That's really the larger question, I think, today.

[00:03:55] Speaker 02:
Okay, well there it is the dreaded appellate oral argument where the court has done better research than the attorneys Okay, don't worry.

[00:04:02] Speaker 01:
I'm gonna give you folks.

[00:04:03] Speaker 02:
This is an important issue, and I'm gonna give you folks an opportunity to brief it Well, thank you Judge my reading of the Jaffee case, and I'm quoting it right now At 934 when a judgment is rendered on a case involving a contract that includes it for attorneys fees and cost provision

[00:04:19] Speaker 02:
The judgment extinguishes all further contractual rights, including the Contractual Attorneys Fees Clause.

[00:04:25] Speaker 02:
That's the case itself.

[00:04:26] Speaker 02:
And in this instance, the adversary proceeding is exclusively an action on the judgment.

[00:04:30] Speaker 02:
It is not an action on the contract.

[00:04:32] Speaker 01:
Isn't it really, I mean, it's separate.

[00:04:36] Speaker 01:
Your judgment wasn't for fraud.

[00:04:37] Speaker 01:
Your judgment was a UD judgment in state court, right?

[00:04:41] Speaker 01:
Unlawful detainer.

[00:04:41] Speaker 01:
They have to get out.

[00:04:42] Speaker 01:
Correct, Your Honor.

[00:04:44] Speaker 01:
Right?

[00:04:45] Speaker 01:
And then you got to bankruptcy and you have a claim and you want it to be not discharged, so you're alleging, which the court found that you were substantially justified in alleging your non-dischargeability claim, that the whole transaction

[00:04:59] Speaker 01:
was fraudulent from the start.

[00:05:02] Speaker 01:
So aren't you alleging a separate cause of action for fraud?

[00:05:07] Speaker 01:
Non-dischargeability based on fraud?

[00:05:12] Speaker 02:
My understanding of adversary proceedings under 523A2, A4, and A6 is that you must demonstrate fraud in the inducement of one form or fashion, or it's a breach of some duty, such as a fiduciary duty, defalcation, and so forth.

[00:05:24] Speaker 02:
And it's spread between those three different sections.

[00:05:26] Speaker 02:
whether those are the sections that can create a debt that is non-dischargeable, whether that gives rise to a cause of action for fraud, I would push back on that saying you have a cause of action under the code sections and then you must prove the elements of fraud in order to meet the requirements of the statute.

[00:05:42] Speaker 01:
So that's my question because you have to prove elements in this claim.

[00:05:46] Speaker 01:
It's not like here's my judgment, please stamp it non-dischargeable.

[00:05:50] Speaker 01:
My state court judgment is non-dischargeable as I have to prove

[00:05:53] Speaker 01:
that there was fraudulent conduct which makes this judgment or this dollar amount is my non-dischargeable debt harm which should be not discharged.

[00:06:05] Speaker 01:
So you have to like prove a lawsuit, don't you?

[00:06:08] Speaker 02:
Yes, Judge.

[00:06:08] Speaker 02:
I would say you absolutely have to.

[00:06:10] Speaker 02:
One of the things, Judge Jaroslawski was the judge for many years up in Santa Rosa and

[00:06:16] Speaker 02:
a friend and he would often, he knew me for many years and he would sometimes yell at me from the bench saying, the judgment doesn't prove anything.

[00:06:25] Speaker 02:
You have to prove the fraud.

[00:06:27] Speaker 02:
Now, whether you're going to characterize that as a cause of action for fraud, I would say no because you don't get any damages if you're successful.

[00:06:34] Speaker 02:
Rather, you're having a judicial determination by the bankruptcy court that this judgment will not be part of the discharge.

[00:06:40] Speaker 02:
So it's carved out.

[00:06:42] Speaker 05:
Are you saying that this is in essence a collection action, part of the collection process?

[00:06:46] Speaker 02:
No, I would not say that because then you would have a separate basis for attorney's fees under California law.

[00:06:52] Speaker 02:
Enforcement of judgments does give rise to it, but that was not presented to the bankruptcy court.

[00:06:57] Speaker 02:
A recovery of attorney's fees for enforcement of a judgment and so forth.

[00:07:00] Speaker 02:
At least it wasn't stated in the motion.

[00:07:02] Speaker 02:
We just had 1021 and 523, so I don't think that issue is before the court.

[00:07:06] Speaker 02:
But what I'm looking at is that you do have to prove fraud, but

[00:07:10] Speaker 02:
In my thinking, a fraud cause of action is where someone has committed fraud and you're seeking damages as a result of that fraud.

[00:07:18] Speaker 02:
The judgment in this case had already made a decision as to who prevailed and who didn't.

[00:07:23] Speaker 02:
And that extinguishes the contract under the merger doctrine because now it's an action on the judgment, not an action on the contract.

[00:07:33] Speaker 02:
And that's where the right to attorney's fees ends under the Jaffe case.

[00:07:36] Speaker 02:
And again, the other case that you cited, Your Honor, I'm not familiar with it, but I'm hoping it says the same thing.

[00:07:44] Speaker 01:
Well, and it does talk about the collection action aspect, but it does cite, it's a BAP case that does cite favorably to Jaffe.

[00:07:55] Speaker 05:
Counsel, if you've got your pencil there, I'm going to spell it for you.

[00:07:57] Speaker 05:
Sure.

[00:08:02] Speaker 05:
It's out of the BAP, August 4th, 2020.

[00:08:12] Speaker 05:
What was the site?

[00:08:13] Speaker 01:
It's 2020 WL467-3235.

[00:08:18] Speaker 05:
You'll find it in Westlaw.

[00:08:22] Speaker 05:
The panel didn't publish it.

[00:08:23] Speaker 05:
It wasn't published.

[00:08:24] Speaker 02:
I'll be looking it up on my cell phone, walking up to the car.

[00:08:30] Speaker 02:
The argument, the reason we're here today is that

[00:08:33] Speaker 02:
I'm not entirely sure that the bankruptcy court knew what to do with this situation.

[00:08:38] Speaker 02:
And my instinct is to say that Judge Lafferty erred on the side of caution, saying we've got three different contracts here.

[00:08:46] Speaker 02:
They're in evidence.

[00:08:47] Speaker 02:
All of them have attorney's fees provision.

[00:08:49] Speaker 02:
One of them must apply.

[00:08:51] Speaker 02:
And because we started this action on a judgment, not on a contract.

[00:08:55] Speaker 02:
In fraud, that's where there's someone that's inducing someone to give you goods or services under false pretenses and damages are the result.

[00:09:03] Speaker 02:
In a judgment, you're coming into the bankruptcy court with a document where a judge has already made a decision, considered the evidence, and rendered a decision.

[00:09:10] Speaker 02:
You're no longer seeking to enforce the contract provisions.

[00:09:13] Speaker 02:
Instead, you are seeking to enforce the judgment, or at least have it non-dischargeable.

[00:09:17] Speaker 02:
That's not an act.

[00:09:18] Speaker 03:
But it arises out of that.

[00:09:20] Speaker 03:
And I believe that's what the basis is, is that you have to go back to that document.

[00:09:26] Speaker 03:
It is the genesis of the action for a fraud, isn't it?

[00:09:33] Speaker 02:
Yes, Your Honor, it would be the genesis of it, but the evidence as to what led to the judgment will be the same evidence that leads to a non-dischargeability action.

[00:09:43] Speaker 02:
That is, what happened, you know, what was the evidence presented to the trial court to produce the state court judgment, and that is the eviction and the unlawful detainer action.

[00:09:52] Speaker 02:
The evidence is the same, but the remedy that's being sought is very different.

[00:09:56] Speaker 02:
It's not pursuant to 1021 or to enforce a contract.

[00:10:00] Speaker 02:
So for example, there was no dispute as to whether or not there was.

[00:10:03] Speaker 03:
So why do you even look at California at all?

[00:10:06] Speaker 03:
Because I'm hearing what I'm hearing you say is that really this is a federal discharge action.

[00:10:12] Speaker 02:
It absolutely is, Judge.

[00:10:14] Speaker 02:
And I believe, I think it was the Terranova case.

[00:10:20] Speaker 02:
The Ninth Circuit BAP denied attorney's fees, finding the debtor had not committed fraud did not depend on the enforcement or interpretation of the terms of that agreement.

[00:10:28] Speaker 02:
That's what's going on here.

[00:10:30] Speaker 02:
The terms of the agreement were not at issue.

[00:10:33] Speaker 02:
The formation of the contract was not at issue.

[00:10:36] Speaker 02:
It was not an enforcement action on the contract which would give rise to attorney's fees both under 1717 and 1021 and the contract terms themselves.

[00:10:45] Speaker 03:
In this instance as I read it it was purely a question of federal law purely a question of non-discharge ability and the application of 523 You're past your time, but I am I want I want to pick that thread if I may if you had one though That you would have asserted it would you have asserted it under 685?

[00:11:07] Speaker 02:
I don't think it would be 685.

[00:11:08] Speaker 02:
We did plead it.

[00:11:09] Speaker 02:
Again, that's more of me trying to keep my malpractice carrier happy, because if the plaintiff has a claim and you don't assert it, they're stopped from doing it.

[00:11:16] Speaker 02:
Boom, they're coming after me.

[00:11:18] Speaker 02:
But in this instance, I'm not sure we would have recovered them, and 685 might have applied.

[00:11:26] Speaker 02:
That's not before the court.

[00:11:27] Speaker 02:
That wasn't the subject or the basis of the motion that was presented.

[00:11:30] Speaker 03:
No, but as Judge Moran has indicated, you've raised a matter of deep water.

[00:11:36] Speaker 03:
Yes.

[00:11:37] Speaker 03:
And there's a lot to it.

[00:11:38] Speaker 03:
And it seems like it's all questions of law.

[00:11:41] Speaker 03:
I believe that's correct, Your Honor.

[00:11:43] Speaker 03:
So we just need to make sure we get this right.

[00:11:45] Speaker 02:
Okay.

[00:11:45] Speaker 02:
Well, I am out of time.

[00:11:46] Speaker 02:
Thanks.

[00:11:47] Speaker 02:
Thank you.

[00:11:47] Speaker 01:
Thank you very much.

[00:11:52] Speaker 04:
Morning, may it please the court?

[00:11:54] Speaker 04:
I'm Steve Olson, I represent the appellees, the Chapter 7 debtors, the slaves.

[00:12:01] Speaker 04:
Here, the claims in the complaint were that in the three transaction documents, my clients made misrepresentations to the appellant.

[00:12:16] Speaker 04:
This case is obviously arising out of those documents.

[00:12:21] Speaker 03:
What does that mean?

[00:12:22] Speaker 04:
Well, it means in dischargeability cases, whether attorney's fees can be recovered depends on the nature of the agreement, if you're asserting contract-based... But you're not asserting an unliquidated claim for fraud under state law.

[00:12:42] Speaker 03:
That battle was fought and won, hasn't it?

[00:12:46] Speaker 03:
I mean, that was the UD action.

[00:12:48] Speaker 03:
There was a judgment on that.

[00:12:50] Speaker 03:
All things related to that

[00:12:52] Speaker 03:
that could or were brought are precluded and done.

[00:12:56] Speaker 04:
Well, unlawful detainer is very limited jurisdiction.

[00:13:00] Speaker 04:
It's about possession.

[00:13:03] Speaker 04:
And incidentally, there can be some unpaid rent that's recovered, but that's it.

[00:13:11] Speaker 03:
But it's the same facts.

[00:13:13] Speaker 03:
What you choose to bring with it is your call.

[00:13:16] Speaker 03:
And you are not asking for, there was not a

[00:13:20] Speaker 03:
a state law claim for damages for fraud, right?

[00:13:26] Speaker 03:
It was for the UD, and now it's non-dischargeability.

[00:13:31] Speaker 03:
So this is a federal cause of action.

[00:13:36] Speaker 04:
Well, 523 claims are federal claims.

[00:13:40] Speaker 04:
But the cases say if the documents have a broad enough attorney's fees provision, then the attorney's fees are recoverable.

[00:13:51] Speaker 04:
in 523 actions.

[00:13:54] Speaker 03:
What's your best case for one of those situations where the claim was liquidated pre-petition?

[00:13:59] Speaker 03:
So the only matter arising in front of the bankruptcy court is a non-dischargeability action.

[00:14:03] Speaker 04:
Well, I think the Davis case is the one that's most on point.

[00:14:10] Speaker 04:
And the facts are a little bit muddy.

[00:14:13] Speaker 04:
But in Davis, there was non-bankruptcy litigation.

[00:14:20] Speaker 04:
And there was dischargeability and in the Davis case, the debtors prevailed on the dischargeability action and they recovered attorney's fees under and are rising under contract.

[00:14:37] Speaker 04:
The bankruptcy court decision was published, the BAP affirmed in an unpublished decision and the Ninth Circuit affirmed in an unpublished decision, importantly,

[00:14:49] Speaker 04:
in the Ninth Circuit's affirmance, it addressed this issue of did the contract go away when there was a non-bankruptcy judgment.

[00:15:02] Speaker 04:
And the Ninth Circuit said what merged into the judgment was only the claims that were brought in that litigation.

[00:15:13] Speaker 04:
The contract itself didn't go away.

[00:15:17] Speaker 04:
So here, again,

[00:15:18] Speaker 04:
we had a pre-petition unlawful detainer action to get possession of the property.

[00:15:24] Speaker 04:
And the landlord prevailed, received the judgment for around $25,000 of rent and around $25,000 ironically of contractual attorney's fees.

[00:15:41] Speaker 04:
But that's the

[00:15:44] Speaker 04:
That's the limited race judicata effect of that unlawful detainer judgment.

[00:15:51] Speaker 04:
I think the Davis case, and particularly the Ninth Circuit's affirmance, makes clear the fact that there was a pre-petition unlawful detainer judgment does not eliminate the contractual right for the prevailing party in this adversary proceeding.

[00:16:07] Speaker 05:
As to the prevailing party, let me ask you a couple questions or a question.

[00:16:11] Speaker 05:
The action arising out of the contract was brought in state court, correct?

[00:16:16] Speaker 04:
It wasn't an action arising out of the contract.

[00:16:18] Speaker 04:
It was an action for possession of the property.

[00:16:22] Speaker 05:
What was the basis for the judgment?

[00:16:26] Speaker 04:
The basis for the judgment was, Landlord, you're entitled to possession.

[00:16:29] Speaker 04:
Because they had a contract that was being enforced.

[00:16:32] Speaker 04:
Well, and they got rent actually at the value of

[00:16:40] Speaker 04:
occupancy of the property during the pendency of the unlawful container action.

[00:16:44] Speaker 05:
Who was the prevailing party in the state court action?

[00:16:47] Speaker 05:
The landlord.

[00:16:48] Speaker 05:
Right.

[00:16:49] Speaker 05:
So in state court, what if the landlord had won on a breach of contract and tort claimed but lost on fraud, but they still got a judgment, who would be the prevailing party?

[00:17:00] Speaker 05:
If you went out of two out of three causes of action and you get your judgment for the full amount you've claimed, but you didn't get it on fraud, who would be the prevailing party?

[00:17:08] Speaker 04:
Well, in the, in the state court, if there'd been, instead of an unlawful detainer, limited jurisdiction proceeding.

[00:17:14] Speaker 05:
Well, let's take it as a hypothetical question.

[00:17:16] Speaker 04:
Yeah.

[00:17:17] Speaker 04:
If there'd been litigation asserting contract and fraud claims, and the plaintiff prevailed on the contract claims, but didn't prevail on the fraud claims,

[00:17:30] Speaker 04:
I think the plaintiff probably would have been entitled to recover contractual attorney's fees under the arising under agreement.

[00:17:40] Speaker 05:
Right, because they prevailed on getting their full amount of their damage claim.

[00:17:46] Speaker 04:
Well, I think the agreement says in an action arising out of this agreement, the prevailing party is entitled to recover fees.

[00:17:55] Speaker 04:
It's not limited to contract claims versus tort claims.

[00:17:58] Speaker 04:
The superior court would have had to decide who was the prevailing party here when the plaintiff won on some claims and the defendant won on others.

[00:18:09] Speaker 04:
And that would have, I think, determined who would have received attorney's fees.

[00:18:15] Speaker 05:
In the action before Judge Lafferty, doesn't that arise out of the bankruptcy code and not out of the contract?

[00:18:22] Speaker 05:
Doesn't that arise pursuant to Section 523?

[00:18:24] Speaker 05:
I think it arises out of both.

[00:18:29] Speaker 04:
the code and the contract.

[00:18:32] Speaker 04:
The claims made in the complaint were that in the four corners of the documents, you misled us.

[00:18:39] Speaker 04:
Those claims were established to be not true, and that's why on the merits, my clients got summary judgment.

[00:18:50] Speaker 04:
But that's what was alleged.

[00:18:53] Speaker 04:
is in these documents you lied to us.

[00:18:58] Speaker 05:
But they didn't bring that 523 action saying you lied to us and therefore we should get a judgment.

[00:19:03] Speaker 05:
They already had a judgment.

[00:19:06] Speaker 04:
They did and what they said is you lied to us and that lie means the judgment we got you can't wipe out in bankruptcy.

[00:19:18] Speaker 01:
Right.

[00:19:18] Speaker 01:
So let me ask you another question.

[00:19:20] Speaker 01:
We've got the Jaffee case.

[00:19:23] Speaker 01:
which says that the judgment extinguishes all further contractual rights, it all merges together, and there's no further right to attorneys' use after you get the judgment, which is the case that the appellant is relying on.

[00:19:37] Speaker 01:
And we've got the Davis case, which is the Ninth Circuit case, but it relies on some other language.

[00:19:44] Speaker 01:
And it doesn't interpret the California law that broadly.

[00:19:48] Speaker 01:
It says, as you pointed out, only those claims that were actually litigated are merged, right?

[00:19:55] Speaker 04:
Right.

[00:19:56] Speaker 01:
So how do we reconcile those two cases?

[00:19:59] Speaker 04:
Well, what's important is the first litigation in Jaffee

[00:20:06] Speaker 04:
wasn't in the limited jurisdictional context of unlawful detainer.

[00:20:12] Speaker 01:
Right, but we have a broad, broad statement in Jaffe that says, I mean, the statement literally is the judgment extinguishes all further contractual rights.

[00:20:22] Speaker 01:
And then I've got this, there's another appellate level in that Supreme Court of California case that says well maybe that's too broad and it really is just those that are, you know, that were decided and then Davis picks that up.

[00:20:38] Speaker 01:
We have to decide what, if we can, what the California Supreme Court would do with this issue.

[00:20:45] Speaker 01:
How do I decide that?

[00:20:47] Speaker 04:
Here's how you decide it.

[00:20:50] Speaker 04:
Unlawful detainer,

[00:20:51] Speaker 04:
you're limited to collecting unpaid rent only for the year before you file the action.

[00:20:58] Speaker 04:
But after you prevail in the unlawful detainer, you are allowed, as the landlord, to sue for rent beyond the limited scope of unlawful detainer.

[00:21:09] Speaker 05:
Obviously, the agreement has to survive.

[00:21:12] Speaker 05:
Well, counsel, they didn't bring a claim for non-discharge

[00:21:19] Speaker 05:
amount in excess of what they got in the unlawful detainer action.

[00:21:25] Speaker 05:
That's the amount.

[00:21:26] Speaker 05:
The amount was determined in the unlawful detainer action.

[00:21:29] Speaker 05:
They're not asking for more than that.

[00:21:32] Speaker 05:
I understand.

[00:21:32] Speaker 05:
Okay.

[00:21:34] Speaker 05:
So if the unlawful detainer action is limited to X dollars,

[00:21:40] Speaker 05:
They could have maybe gotten 2X dollars if there was holdover after the fact or some damages at the premises or something.

[00:21:46] Speaker 05:
But they didn't ask for 2X.

[00:21:48] Speaker 05:
They're only asking for non-dischargeability of the amount that was determined in the unlawful detainer action.

[00:21:54] Speaker 05:
And there's no question about that amount.

[00:21:57] Speaker 05:
That amount's not an appeal.

[00:21:58] Speaker 05:
That amount was decided finally by the state court.

[00:22:05] Speaker 04:
What's important is not what

[00:22:08] Speaker 04:
the plaintiff did, but what the plaintiff could have done.

[00:22:11] Speaker 04:
What was the scope of the unlawful detainer judgment?

[00:22:16] Speaker 04:
And the scope was limited.

[00:22:18] Speaker 04:
The race judicata effect of an unlawful detainer judgment is limited.

[00:22:22] Speaker 05:
Okay, but that limited amount is all that they were asking for in the bankruptcy action to be determined to be non-dischargeable, correct?

[00:22:32] Speaker 05:
They didn't go beyond that.

[00:22:34] Speaker 05:
That's correct.

[00:22:36] Speaker 04:
And they based the bankruptcy

[00:22:38] Speaker 04:
action on the three documents that comprise the party's agreement.

[00:22:46] Speaker 04:
And they said in those documents you lied to us, therefore you can't wipe out our claim against you.

[00:22:52] Speaker 05:
Their claim is not based on the documents, their claim is based on the judgment.

[00:22:56] Speaker 05:
They don't have to prove that they are owed money, now they just have to prove something else other than proving their debt.

[00:23:03] Speaker 05:
The debt's already been proved.

[00:23:04] Speaker 01:
Or do they have to prove that that debt came from the fraud?

[00:23:09] Speaker 01:
I guess this would be kind of an adjunct to that question.

[00:23:12] Speaker 04:
Had we not prevailed on the merits and summary judgment, some of those issues might have had to be ironed out.

[00:23:18] Speaker 04:
But what we established is there weren't any misrepresentations.

[00:23:24] Speaker 04:
So on the merits, some of those other issues, Your Honor referenced,

[00:23:31] Speaker 04:
Judge Lafferty didn't have to get to them because there wasn't any misrepresentation.

[00:23:35] Speaker 01:
All right.

[00:23:35] Speaker 01:
Let me ask you a different question, which goes back to that Tanahiro case that I'm going to ask you folks to let all of us know if you think it has any application in this case and how.

[00:23:49] Speaker 01:
That case seemed to state that basically a 523 action counts as an enforcement action under CCP 685.040.

[00:24:00] Speaker 01:
And relying on Jaffee and so that in that instance that would mean the debtor could not recover Attorneys fees if it was an enforcement action.

[00:24:12] Speaker 01:
Do you think that?

[00:24:14] Speaker 01:
523 a to a action is an is can be considered a collection or enforcement action for purposes of that statute and

[00:24:27] Speaker 04:
I don't, I'm vaguely familiar with Tenenhero but not enough to be able to, but I am very familiar with Davis and my sense is Davis and Tenenhero are contradictory and that the panel in deciding this will have to decide whether to follow Davis or Tenenhero.

[00:25:01] Speaker 01:
You have a couple minutes left if you want.

[00:25:03] Speaker 01:
Do you see anything else?

[00:25:05] Speaker 04:
Happy to answer any further questions the panel may have.

[00:25:09] Speaker 01:
Thank you.

[00:25:15] Speaker 02:
May it please the court.

[00:25:17] Speaker 02:
First, I was able to find the Tenneharo decision already.

[00:25:20] Speaker 02:
I'm quoting from it right now.

[00:25:22] Speaker 02:
In that regard, California law may entitle a judgment creditor to attorney's fees and costs incurred in a subsequent 523 action to accept a pre-petition judgment debt from discharge.

[00:25:32] Speaker 02:
The purpose of the action is to enforce the judgment, but the same cannot be said for judgment debtor who successfully defends such an action.

[00:25:42] Speaker 02:
There is no comparable California statute providing for recovery of attorney's fees and costs.

[00:25:48] Speaker 02:
So, yet again, another lesson in humility from the court.

[00:25:51] Speaker 02:
Thank you.

[00:25:52] Speaker 01:
I'm not saying Ten Heroes right.

[00:25:55] Speaker 01:
I'm saying it's out there and we need to figure out, we need to figure this one out.

[00:26:00] Speaker 02:
Judge, if I had found this, I would have put it at the front of my brief.

[00:26:04] Speaker 02:
I thought that you might have.

[00:26:05] Speaker 02:
Yeah, but again, one of the things that counsel presented during his argument was that he was alleging Davison was contradictory with

[00:26:16] Speaker 02:
of the holding of Tinahero.

[00:26:17] Speaker 02:
I would quote to you, Davison, directly at page 725.

[00:26:22] Speaker 02:
I'm quoting it.

[00:26:24] Speaker 02:
Therefore, in finding no fraud by Detter, the Bankruptcy Court was not enforcing or interpreting the terms of the agreement.

[00:26:31] Speaker 02:
Accordingly, under 1021, Detter was not entitled to recover attorney's fees under the agreement, even though he was the prevailing party.

[00:26:38] Speaker 02:
And these two cases, my reading of it based on what, you know, I can't do a full Lexus search here from a phone, but based on this information I've been able to find so far, they appear to say exactly the same thing.

[00:26:49] Speaker 02:
An action on a judgment is not an action on a contract.

[00:26:53] Speaker 01:
Well, I think you have to be careful there, because it's not, nobody is saying that this is a 17-17 issue, right?

[00:27:00] Speaker 02:
Correct.

[00:27:01] Speaker 01:
Right?

[00:27:02] Speaker 01:
So if you're, so when you say an action on the contract, I'm not sure if you're talking about 17, 17 or not, and I can't remember if the case did or not.

[00:27:11] Speaker 01:
So I think there's a distinction there.

[00:27:14] Speaker 01:
You know, 1021 plus 1032 are broader and kind of do a back door in for attorneys fees.

[00:27:21] Speaker 01:
Under California law, the parties can contract to agree to pay attorneys fees to the prevailing party.

[00:27:27] Speaker 01:
for larger than actions, you know, to enforce the contract.

[00:27:30] Speaker 01:
It depends on what the language says and that's what you folks were talking about with Judge Lafferty and I understand your position on that.

[00:27:40] Speaker 01:
But so I think you have to read those two cases carefully bearing in mind, you know, whether we're talking about an action on a contract which this is not, you know, or whether it's contractual language can scoop up the right to attorney's fees.

[00:27:56] Speaker 02:
Well, 1717 is, for example, it creates one of these reciprocal rights.

[00:28:01] Speaker 02:
That is, if it's unilateral, then it becomes bilateral.

[00:28:05] Speaker 02:
And the code leaves the attorney's fees recovery to the agreement of the parties.

[00:28:11] Speaker 02:
What scope does the agreement provide?

[00:28:14] Speaker 02:
And so, yeah, it could go and say, judgment-enforcing actions, you can get attorney's fees.

[00:28:19] Speaker 02:
You can get attorney's fees for anything.

[00:28:22] Speaker 02:
But that's not what we have here.

[00:28:23] Speaker 02:
And then you're going back to, that's what 1021 or our argument is.

[00:28:26] Speaker 02:
1021, 1717 would all say the terms of the agreement control.

[00:28:32] Speaker 02:
That's it.

[00:28:33] Speaker 02:
And in this instance, 1021, there is no post-judgment award of attorney's fees.

[00:28:38] Speaker 02:
It's not present in the contract.

[00:28:40] Speaker 02:
California, the contract does not modify California law to that extent.

[00:28:45] Speaker 02:
As a consequence, we're left with 1021 on its face, and then we're left with the decisions that post-judgment attorney's fees are non-recoverable.

[00:28:52] Speaker 02:
And I believe I'm out of time.

[00:28:54] Speaker 01:
Yes, you are.

[00:28:55] Speaker 01:
Thank you very much.

[00:28:56] Speaker 01:
So because I did spring this Tina Hero issue on you, I would like to give you the opportunity to submit simultaneous briefs addressing the applicability of the Tina Hero and its analysis to this case.

[00:29:12] Speaker 01:
And I hope you got the Westlaw site.

[00:29:15] Speaker 01:
Everybody's got it?

[00:29:16] Speaker 01:
OK, good.

[00:29:19] Speaker 00:
It's also available on the BAP website if you search under the name Tina Hero.

[00:29:23] Speaker 01:
OK.

[00:29:24] Speaker 01:
Oh, yeah, that's right.

[00:29:26] Speaker 01:
It's on the BAP website.

[00:29:28] Speaker 01:
So three weeks from today, if you could just both submit briefs, 10 pages or less.

[00:29:40] Speaker 01:
And then it will be submitted after we receive your briefs.

[00:29:47] Speaker 01:
Yeah.

[00:29:48] Speaker 01:
Does anybody have a calendar?

[00:29:50] Speaker 01:
I was hoping.

[00:29:51] Speaker 01:
I didn't bring my phone.

[00:29:57] Speaker 01:
Susan's got it.

[00:30:00] Speaker 01:
October 16th.

[00:30:02] Speaker 01:
All right.

[00:30:03] Speaker 01:
Very good.

[00:30:03] Speaker 01:
Thank you both very much for your very good arguments.

[00:30:08] Speaker 01:
All right.