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Higashi v. Takazawa

United States District Court, D. Hawaii

July 20, 2017



          Leslie E. Kobayashi United States District Judge.

         On August 29, 2016, Defendant-Appellant Sterling G. Higashi (“Appellant”) filed his Notice of Appeal and Statement of Election (“Notice of Appeal”), [dkt. no. 1, ] challenging the following orders issued in Adversary Proceeding 15-90033 (“Adversary Proceeding”): (1) Order Granting Plaintiff's Motion for Rule 37(c)(2) Expenses (“Rule 37(c)(2) Order”), issued on August 15, 2016; [dkt. no. 1-3 at pgs. 4-6;[1] and (2) Order Denying Defendant's Objections to Certain Items of Plaintiff's Bill of Costs (“Objections Order”), also issued on August 15, 2016 [id. at pgs. 1-2]. The bankruptcy court filed the Certificate of Readiness on October 13, 2016. [Dkt. no. 3.] On November 14, 2016, Appellant filed his opening brief. [Dkt. no. 7.] Plaintiff-Appellee Hale Takazawa (“Appellee”) filed his responsive brief on December 1, 2016 (“Appellee's Brief”), and Appellant filed his reply on December 14, 2016. [Dkt. nos. 10, 11.] This matter is suitable for disposition without a hearing pursuant to Local Rule 7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). In an Entering Order filed on April 26, 2017 (“4/26/17 EO”), the Court denied the appeal and affirmed the orders of the bankruptcy court. [Dkt. no. 14.] The instant Order supersedes the 4/26/17 EO. The bankruptcy court's orders are affirmed for the reasons set forth below.


         The background of this matter is set forth in this Court's Order Affirming the Bankruptcy Court's Findings of Fact and Conclusions of Law and the Judgment (“FOF/COL Order”) in Higashi v. Takazawa, CV 16-00368 LEK-RLP, [filed 7/19/17 (dkt. no. 28), ] which arose out of the same Adversary Proceeding. Appellee served a request for admissions on September 25, 2015, [Appellee's App. to Responsive Brief (“Appellee's App.”), filed 12/1/16 (dkt. no. 9), App. 4 at 29-45, ] and Appellant served his response on October 26, 2015 [id. at 47-75]. Appellant refused to admit that he forged his wife's signature on a promissory note related to unpaid rent on a commercial space he used for his company. [Id. at 71.] The bankruptcy court found that Appellant forged his wife's signature. [Appellee's App., App. 2 (Findings of Fact and Conclusions of Law in Adversary Proceeding) at 4 (“He denies forging his wife's signature, but I do not believe that denial.”).] The bankruptcy court held a hearing on the motions relevant to the instant appeal on August 5, 2016. [Id., App. 8 (Trans. of 8/5/16 hearing on Plaintiff's Motion to Approve Reasonable Expenses Pursuant to Rule 37(c)(2); Defendant's Opposition to Bill of Costs (“8/15/16 Hearing Trans.”)).] With regard to Appellee's motion filed pursuant to Fed.R.Civ.P. 37(c)(2), [2] the bankruptcy court explained:

I don't think there's any dispute that the basic elements of the rule are met. The only real dispute about - is about whether Mr. Higashi had a reasonable ground to believe that he might prevail on this issue of whether or not he forged his wife's signature, basically, and I'm inclined to say he didn't.
I mean, based on the evidence that I saw at the trial, I was completely convinced that he did forge his wife's signature and that he knew it. Therefore - well, in order to accept his position, it would be like saying, well, I could deny something in an admission, and then go ahead and lie to the Court at the trial, and maybe the judge will accept my lie, and that adds up to a reasonable basis for denying the request. I just don't think that can be the law.

[Id. at 3.] At the same hearing, the bankruptcy court also considered and rejected Appellant's objections to Appellee's proposed bill of costs. [Id. at 2-3.]

         The Rule 37(c)(2) Order directed Appellant to pay Appellee “$19, 662.30, as the reasonable expenses, including attorney's fees, incurred by [Appellee] to make proof of matters which [Appellant] failed to admit pursuant to Rule 36(a) of the Federal Rules of Civil Procedure, made applicable to this Proceeding by Rule 7036 of the Federal Rules of Bankruptcy Procedure.”[3] [Rule 37(c)(2) Order at 5.] The Objections Order directed Appellant to pay Appellee $2, 946.94 in taxable costs. [Objections Order at 2.]


         The Ninth Circuit has stated:

We review for abuse of discretion a Rule 37(c) award of fees and costs. Comeaux v. Brown & Williamson Tobacco Co., 915 F.2d 1264, 1268 (9th Cir. 1990). We will not reverse unless we have a definite and firm conviction that the district court committed a clear error of judgment. United States v. Plainbull, 957 F.2d 724, 725 (9th Cir. 1992). A district court abuses its discretion if it does not apply the correct law or if it rests its decision on a clearly erroneous finding of material fact. United States v. Rahm, 99 F.2d 1405, 1410 (9th Cir. 1993).

Marchand v. Mercy Med. Ctr., 22 F.3d 933, 936 (9th Cir. 1994) (footnote omitted). Further, this district court has explained that, in an appeal from the bankruptcy court:

This court is sitting as an appeals court reviewing the bankruptcy court's determination. “The decision of the bankruptcy judge is reviewable by an Article III judge only by an appeal governed by the same rules applicable to appeals taken to the courts of appeals from the district courts.” In re Mankin, 823 F.2d 1296, 1305 (9th Cir. 1987) (citing 28 U.S.C. §§ 157(b)(1), 158(a), (c)).[4]

Nauman v. Kotoshirodo (In re Nauman), Civil No. 10-00414 JMS/KSC, 2011 WL 240804, at *4 (D. Hawai`i Jan. 21, 2011). The Ninth Circuit has stated that, “[w]e review only issues which are argued specifically and distinctly in a party's opening brief. We will not manufacture arguments for an appellant, and a bare assertion does not preserve a claim, particularly when, as here, a host of other issues are ...

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