Higashi v. Takazawa

Filing 15

ORDER AFFIRMING THE BANKRUPTCY COURT'S: (1) ORDER GRANTING PLAINTIFF'S MOTION FOR RULE 37(C)(2) EXPENSES; AND (2) ORDER DENYING DEFENDANT'S OBJECTIONS TO CERTAIN ITEMS OF PLAINTIFF'S BILL OF COSTS re 1 Bankruptcy Appeal, f iled by Sterling G. Higashi. Signed by JUDGE LESLIE E. KOBAYASHI on 07/20/2017. Appellant Sterling G. Higashi's Notice of Appeal and Statement of Election, filed August 29, 2016, is HEREBY DENIED. Moreover, the b ankruptcy court's Order Granting Plaintiff's Motion for Rule 37(c)(2) Expenses and its Order Denying Defendant's Objections to Certain Items of Plaintiff's Bill of Costs, both issued on August 15, 2016 in Adversary Proceeding Numb er 15-90033, are HEREBY AFFIRMED. There being no remaining claims in this matter, the Clerk's Office is directed to enter final judgment and close the case on August 10, 2017, unless Appellant files a motion for reconsideration of this Order b y August 7, 2017. (eps, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
STERLING G. HIGASHI,

)
)
Appellant,
)
)
vs.
)
)
HALE TAKAZAWA,
)
)
)
Appellee.
_____________________________ )

CIVIL 16-00479 LEK-RLP

ORDER AFFIRMING THE BANKRUPTCY COURT’S: (1) ORDER
GRANTING PLAINTIFF’S MOTION FOR RULE 37(C)(2) EXPENSES;
AND (2) ORDER DENYING DEFENDANT’S OBJECTIONS TO
CERTAIN ITEMS OF PLAINTIFF’S BILL OF COSTS
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.

1

[Dkt. no. 3.]

On

Except for the briefs, there are often multiple page
numbers on the documents relevant to the instant matter.
Therefore, aside from the briefs, and for the sake of clarity,
the Court will refer to the page numbers assigned by this
district court’s electronic case filing system.

November 14, 2016, Appellant filed his opening brief.
no. 7.]

[Dkt.

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.
11.]

[Dkt. nos. 10,

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.]

Order supersedes the 4/26/17 EO.

The instant

The bankruptcy court’s orders

are affirmed for the reasons set forth below.
BACKGROUND
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

2

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:

2

Fed. R. Civ. P. 37(c)(2) states:
If a party fails to admit what is requested under
Rule 36 and if the requesting party later proves a
document to be genuine or the matter true, the
requesting party may move that the party who
failed to admit pay the reasonable expenses
including attorney’s fees, incurred in making that
proof. The court must so order unless:
(A) the request was held objectionable under
Rule 36(a);
(B) the admission sought was of no
substantial importance;
(C) the party failing to admit had a
reasonable ground to believe that it might
prevail on the matter; or
(D) there was other good reason for the
failure to admit.
3

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.]

3

Fed. R. Civ. P. 36 describes the process for serving a
request to admit on any other party. Fed. R. Bankr. P. 7036
states that Rule 36 “applies in adversary proceedings.”
4

STANDARD
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

4

In re Mankin was overruled on other grounds by Executive
Benefits Insurance Agency v. Arkison (In re Bellingham Insurance
Agency, Inc.), 702 F.3d 553 (9th Cir. 2012).
5

assertion does not preserve a claim, particularly when, as here,
a host of other issues are presented for review.”

Greenwood v.

FAA, 28 F.3d 971, 977 (9th Cir. 1994) (citations omitted).
DISCUSSION
Appellant’s Brief explains:
The brevity of Defendant/Appellant’s Opening
Brief in the above entitled matters is because of
the nature of the Orders emanating from the
Adversary Court, i.e., the result of the award of
certain fees and costs to the Plaintiff/Appellee
as a result of said Plaintiff/Appellee prevailing
in the said Adversary Pro. No 15-90033.
Should this Court reverse the “main” judgment
rendered by the Adversary Court and which is being
heard by this Honorable Court in the main appeal,
Civil No. 16-00368, it is respectfully submitted
the foregoing award of Bill of Costs and Rule
37(c)(2) Expenses should also be reversed.
[Appellant’s Brief at 2.5]

Appellant does not identify any part

of either the Rule 37(c)(2) Order or the Objections Order that
was clearly erroneous.

Moreover, in its FOF/COL Order, this

Court affirmed the bankruptcy court.6

5

In his Reply, Appellant states, “this appeal in Civil No.
16-00479 was treated mistakenly as an ‘adjunct’ to the ‘main’
appeal in Civil No. 16-00368.” [Reply at 2.] It is undisputed
that Appellant did not appeal the Rule 37(c)(2) Order or the
Objections Order in CV 16–00368 LEK-RLP. It is also undisputed
that Appellant never sought to consolidate CV 16-00368 LEK-RLP
and the instant appeal, even though they arose out of the same
Adversary Proceeding.
6

Appellee states that “Appellant wrongly and frivolously
argues in his [b]rief that a ruling of this Court in the First
Appeal, CV 16-00368, reversing the Judgment of the Bankruptcy
Court, will require this Court to reverse the Order on Rule
(continued...)
6

Even if the Court were to consider Appellant’s argument
that he should not have to pay Appellee’s expenses because his
reasons for refusing to admit that he forged his wife’s signature
are covered by Rule 37(c)(2)(C) and (D), see Appellant’s Brief at
2, it would not change the outcome.

The FOF/COL Order found that

Appellant did not challenge the bankruptcy court’s finding that
he forged his wife’s signature on the relevant promissory note,
and that any argument to the contrary was waived.7
Order at 10.

See FOF/COL

Further, Appellant does not challenge the

bankruptcy court’s finding on that matter here.

Accordingly,

there is no reason for Appellant to believe he had reasonable
grounds for refusing to admit that he forged his wife’s
signature, and there was not any “other good reason for the
failure to admit.”

See Rule 37(c)(2)(C)-(D).

Finally, Appellant’s Brief is five pages, while his
Reply is nineteen pages, and includes a number of new arguments.
See, e.g., Reply at 8 (explaining that it is possible Appellant’s

6

(...continued)
37(c)(2) Expenses in this Second Appeal.” [Appellee’s Brief at
45.] Many of Appellee’s points are well taken. However, the
Court does not need to address this issue because it affirmed the
bankruptcy court in the FOF/COL Order.
7

Appellant states that he “consistently maintained he did
not affix his wife’s signature over the signature line meant for
her thus committing forgery throughout the entire [s]tate [c]ourt
proceeding and the Adversary [P]roceeding.” [Reply at 12.] Even
assuming this is true, Appellant did not make such an argument in
either of his opening briefs filed in this Court.
7

former employee “could have shed light on the signature over the
signature line.”).

The Court may not consider these arguments.

See Local Rule LR7.4 (“Any argument raised for the first time in
the reply shall be disregarded.”); Greenwood, 28 F.3d at 977 (“We
review only issues which are argued specifically and distinctly
in a party’s opening brief.” (citation omitted)).
could, these arguments would still fail.

Even if it

Appellant appears to

contend that, for purposes of his appeal of the bankruptcy
court’s orders, it is sufficient that he made many of these
arguments in memoranda filed in the proceedings below.

See,

e.g., Reply at 8 (“Moreover, as amply shown in the Opposition
Memorandum . . . ”), 10 (“Moreover, at pages 7 through 10 in
Appellant’s Memorandum in Opposition to Plaintiff’s Motion for
Rule 37(c)(2) Expenses . . . the facts and the law covering
Appellee’s said failure gives credence to Appellant’s position
that he had good reason to believe he might prevail on Appellee’s
claim.”).

In doing so, Appellant violates Fed. R. Bankr.

P. 8014(a).8

See Lumetta v. Arborlake Homeowners Ass’n, Case

No.: 16cv1817-AJB (JLB), 2017 WL 1967327, at *5 (S.D. Cal.
May 12, 2017) (stating that, because many of an appellant’s
arguments in the opening brief did not comply with Rule 8014(a),

8

Rule 8014(a)(8) requires that an appellant’s brief contain
“the argument, which must contain appellant’s contentions and the
reasons for them, with citations to the authorities and parts of
the record on which the appellant relies.”
8

the district court deemed them waived); Viola v. Kirsch, Case No.
16-cv-02006-EMC, 2016 WL 4011314, at *4 (N.D. Cal. July 27, 2016)
(finding an appellant’s challenge to the bankruptcy court’s
orders frivolous because, in part, the appellant’s “opening brief
does not contain any substantive argument as to why the
bankruptcy court’s orders were improper.

[The appellant] has

incorporated by reference objections that he filed with the
bankruptcy court, but incorporation by reference is not permitted
as a substitute for substantive argument.” (citation omitted)).
Appellant appears to concede that he failed to comply with the
relevant rules.

See Reply at 3 (“Be that as it may and assuming

arguendo, the foregoing does not meet with any of the procedural
requirements set forth in Bankruptcy[,] Appellant proffers the
following . . .”).
In sum, Appellant does not identify any part of the
bankruptcy court’s orders that was clearly erroneous, and the
bankruptcy court’s orders are therefore affirmed.9

9

Appellee requests that this Court grant him leave to file
a motion under Fed. R. Bankr. P. 8020 and set a briefing
schedule. [Appellee’s Brief at 54.] Rule 8020(a) states that,
“[i]f the district court or [Bankruptcy Appellate Panel]
determines that an appeal is frivolous, it may, after a
separately filed motion or notice from the court and reasonable
opportunity to respond, award just damages and single or double
costs to the appellee.” Appellee does not need leave of court to
file such a motion. Appellee’s request is therefore denied.
9

CONCLUSION
On the basis of the foregoing, Appellant Sterling G.
Higashi’s Notice of Appeal and Statement of Election, filed
August 29, 2016, is HEREBY DENIED.

Moreover, the bankruptcy

court’s Order Granting Plaintiff’s Motion for Rule 37(c)(2)
Expenses and its Order Denying Defendant’s Objections to Certain
Items of Plaintiff’s Bill of Costs, both issued on August 15,
2016 in Adversary Proceeding Number 15-90033, are HEREBY
AFFIRMED.

There being no remaining claims in this matter, the

Clerk’s Office is directed to enter final judgment and close the
case on August 10, 2017, unless Appellant files a motion for
reconsideration of this Order by August 7, 2017.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, July 20, 2017.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

STERLING G. HIGASHI VS. HALE TAKAZAWA; CIVIL 16-00479 LEK-RLP;
ORDER AFFIRMING THE BANKRUPTCY COURT’S: (1) ORDER GRANTING
PLAINTIFF’S MOTION FOR RULE 37(C)(2) EXPENSES; AND (2) ORDER
DENYING DEFENDANT’S OBJECTIONS TO CERTAIN ITEMS OF PLAINTIFF’S
BILL OF COSTS

10