Sharifeh et al v. Fox Jr.
Filing
155
MEMORANDUM Opinion and Order. Signed by the Honorable Martha M. Pacold on 9/14/2022. Mailed notice (nsf, )
Case: 1:18-cv-08508 Document #: 155 Filed: 09/14/22 Page 1 of 10 PageID #:8510
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
IN RE: RICHARD SHARIF,
Case No. 18-cv-8508
Debtor.
Judge Martha M. Pacold
HAIFA SHARIFEH,
Intervenor-Appellant,
v.
HORACE FOX, JR., in his capacity as
the Chapter 7 Trustee of Debtor’s
Estate,
On appeal from the U.S.
Bankruptcy Court for the Northern
District of Illinois, Eastern Division
Bankr. Case No. 09-bk-05868
Judge Jacqueline P. Cox
Appellee.
MEMORANDUM OPINION AND ORDER
Intervenor Haifa Sharifeh (also known as Haifa Kaj), purporting to act as
executrix of the estate of Soad Wattar, filed this appeal from the bankruptcy court’s
order denying her motion to vacate the bankruptcy court’s earlier order directing
the turnover of assets held by Wattar’s trust to the bankruptcy estate. In an earlier
appeal from the same order denying Haifa’s motion to vacate, the prior district
court judge assigned to this case remanded for the bankruptcy court to address
certain issues. On remand, the bankruptcy court held evidentiary hearings
addressing those matters and issued an order with factual findings that supported
the court’s earlier denial of Haifa’s motion to vacate. Haifa now appeals. For the
reasons below, the bankruptcy court’s order is affirmed.
BACKGROUND
This appeal has a long and complicated history. See Wellness Int’l Network,
Ltd. v. Sharif, 575 U.S. 665 (2015); Wellness Int’l Network, Ltd. v. Sharif, 617 F.
App’x 589 (7th Cir. 2015); Sharifeh v. Fox (In re Sharif), No. 09-BK-5868, 2016 WL
5373199 (N.D. Ill. Sept. 26, 2016), vacated in part, 2017 WL 4310538 (N.D. Ill. Sept.
28, 2017); Sharifeh v. Fox, No. 11 C 8811, 2012 WL 469980 (N.D. Ill. Feb. 10, 2012).
The court assumes familiarity with these prior opinions and limits recitation of the
facts to only those essential to resolving the issues addressed in this appeal.
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Soad Wattar had multiple children. Three of her children, Richard Sharif,
Haifa, and Ragda Sharifeh are involved in this appeal. Sharifeh v. Fox (In re
Sharif), No. 15-cv-10694, 2017 WL 4310538, at *1 (N.D. Ill. 2017). In 1992, Wattar
established a revocable trust (the “Wattar Trust”). Id. Wattar passed away in
March 2010. Id. at *2.
The debtor, Richard Sharif, filed for bankruptcy in 2009, opening Case No.
09-BK-05868. Id. Wellness International Network, Ltd. (“WIN”) had a judgment
against Richard from another lawsuit and opened an adversary proceeding in the
bankruptcy court. Id.
WIN filed a motion for sanctions against Richard based upon his failure to
comply with WIN’s discovery requests in the adversary proceeding, which the
bankruptcy court granted on July 6, 2010 (the “Alter Ego Order”). Id. The Alter
Ego Order granted default judgment against Richard in favor of WIN, as well as a
declaratory judgment that the Wattar Trust was Richard’s alter ego “because he
treats its assets as his own property and it would be unjust to allow [Richard] to
maintain that the [Wattar Trust] is a separate entity.” [Bankr. 53] at 18. 1
On July 30, 2010, the bankruptcy trustee (“Trustee”) filed a motion for
turnover to the bankruptcy estate of certain of the Wattar Trust’s assets, including
life insurance proceeds held by Hartford Financial Services Group and assets with
Wells Fargo Advisors Financial Network, LLC. Id. at *3. On August 5, 2010, the
bankruptcy court granted the motion and issued a corresponding order directing the
turnover of the Wattar Trust’s assets (the “Turnover Order”). Id.
After Richard’s appeals to the Seventh Circuit and Supreme Court regarding
the Alter Ego Order ended, on September 12, 2015, Haifa, purporting to act as
executrix of Wattar’s estate (the “Estate”), moved to vacate the Turnover Order
under Federal Rule of Civil Procedure 60(b)(4). Id. at *4. Haifa asserted that the
Turnover Order should be vacated because she (and therefore the Estate) were
never served with notice of the bankruptcy proceeding, so the bankruptcy court
lacked personal jurisdiction over the Estate and the Turnover Order was void for
violating due process. Id. The Trustee opposed the motion, arguing that, based
upon Wattar’s April 26, 2007 will, all of Wattar’s assets had been left to Richard as
the trustee of the Wattar Trust. Id. Thus, the Estate (and Haifa as executrix) had
no interest in any of the assets at issue in the Turnover Order and were not entitled
to notice. Id. In her reply, Haifa attached a document purporting to be Wattar’s
April 28, 2007 will (the “Second Will”) that named Haifa as the executrix of
Bracketed numbers preceded by “Bankr.” refer to docket entries in the bankruptcy
proceeding, Case No. 09-BK-05868, and are followed by page and / or paragraph numbers.
Bracketed numbers without “Bankr.” refer to docket entries in this appeal. All page
numbers refer to the CM/ECF page number.
1
2
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Wattar’s estate. Id. Haifa did not explain the Second Will’s significance in her
reply brief. Id.
The bankruptcy court denied the motion to vacate, concluding that Haifa had
not provided any evidence or information that the assets at issue in the Turnover
Order “belonged to a person or entity not then before the Court” at the time the
Turnover Order was entered. Id.
Haifa appealed and the prior district court judge assigned to this case
affirmed the bankruptcy court’s order denying the motion to vacate. Id. at *5.
Haifa moved for reconsideration. Id.
The prior judge granted the motion for reconsideration and remanded the
case to the bankruptcy court for further proceedings. The prior judge directed the
bankruptcy court to address “(1) whether [Haifa] waived her right to rely on the
[Second] Will (by failing to attach it to her Rule 60(b)(4) motion or to comply with
applicable evidentiary rules, or for any other reason), and (2) if there is no waiver,
which version of the will is the controlling one.” Id. at *6. The prior judge also held
that the bankruptcy court was “free to invite additional briefing and hearing on any
other relevant issues that it previously identified but did not decide—such as laches
and issue preclusion—and to resolve [Haifa’s] motion on any of those grounds as the
Court sees fit.” Id. The prior judge further observed that the bankruptcy court was
“free to explore further whether [Haifa] had actual notice of [Richard’s] bankruptcy
and the turnover order and to make additional findings in that regard. The
Bankruptcy Court may decide that [Haifa] has waived this issue or consider it on its
merits and make factual findings.” Id. (footnote omitted). Finally, the prior judge
requested the bankruptcy court address a 2007 document purporting to revoke
Richard’s designation as the trustee for the Wattar Trust. Id. at *7.
On remand, the bankruptcy court held evidentiary hearings to address the
issues identified by the district court. The bankruptcy court ultimately entered an
amended order holding, among other things, that Haifa waived her right to rely on
the Second Will, her claims against the Trustee were barred by laches and res
judicata, she had actual notice of the bankruptcy proceeding before the entry of the
Turnover Order, and the Second Will was a forgery. [Bankr. 566]; [Bankr. 566-1];
[Bankr. 566-2]; [Bankr. 566-3]; [Bankr. 566-4]; [Bankr. 566-5].
Haifa filed this appeal.
LEGAL STANDARDS
This court sits as an appellate court when hearing appeals from bankruptcy
courts. Dvorkin Holdings, LLC, 547 B.R. 880, 886 (N.D. Ill. 2016). “The
Bankruptcy Court’s factual findings are scrutinized for clear error, while its legal
conclusions are reviewed de novo.” Id. “If the bankruptcy court’s account of the
evidence is plausible in light of the record viewed in its entirety, the reviewing court
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will not reverse its factual findings even if the Court would have weighed the
evidence differently.” Duggisetty v. Layng, No. 20 C 2026, 2020 WL 6132233, at *3
(N.D. Ill. Oct. 19, 2020). “A factual finding is clearly erroneous if although there is
evidence to support it, the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been committed.” Id. (internal
quotation marks omitted).
DISCUSSION
I.
Violation Of Bankruptcy Rule 8014
Haifa’s briefing does not comply with Federal Rule of Bankruptcy Procedure
8014. Bankruptcy Rule 8014(a) requires an appellant’s opening brief to include,
among other things: a table of contents, a table of authorities, a jurisdictional
statement, “a statement of the issues presented and, for each one, a concise
statement of the applicable standard of appellate review,” a concise statement of the
case setting out the relevant facts and procedural history, and a summary of
argument. Haifa’s brief contains none of these items.
“Bankruptcy Rule 8014 is not only a technical or aesthetic provision, but also
has a substantive function—that of providing the other parties and the court with
some indication of which flaws in the appealed order or decision motivate the
appeal.” Town of Hingham v. Sirikanjanachai (In re Sirikanjanachai), BAP No .18059, 2019 WL 6605858, at *3 (B.A.P. 1st Cir. Dec. 4, 2019) (internal quotation
marks omitted). “Appellate rules governing the form of briefs do not exist merely to
serve the whimsy of appellate judges. Some of the requirements . . . are essential
for the proper disposition of an appeal.” Id. (internal quotation marks omitted)
(ellipsis in original).
Here, the bankruptcy court’s order is lengthy, addresses a significant number
of issues, and analyzes days of witness testimony. The accompanying record is
voluminous, and the procedural history spans a decade with numerous appeals and
related proceedings. To say the least, Haifa’s failure to comply with Bankruptcy
Rule 8014 greatly increases the difficulty of discerning the relevant materials and
resolving her appeal.
“A court is not required to overlook the procedural and substantive omissions
in a party’s briefing and to stitch together a cogent argument or to guess what part
of the record might be relevant.” Id. Many arguments and assertions made
throughout Haifa’s briefs lack any citation to the record or supporting legal
authority. Challenges to the bankruptcy court’s order that “are wholly unsupported
by developed argument citing the record and supporting authority” are forfeited.
Wine & Canvas Dev., LLC v. Muylle, 868 F.3d 534, 538 (7th Cir. 2017).
Nevertheless, the court will still address the merits of Haifa’s arguments even
though many of her arguments are waived. See Pesmen v. Bannockburn Lake Office
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Plaza Assocs. Ltd., No. 98 C 5437, 1999 WL 356307, at *3 (N.D. Ill. May 24, 1999)
(“Although Pesmen’s briefing errors are significant enough to doom his appeal, the
Court moves forward for the sake of completeness.”).
II.
Collateral Estoppel
The Trustee contends that the bankruptcy court’s order should be affirmed on
the alternative ground that Haifa’s motion to vacate was barred by collateral
estoppel (also known as issue preclusion) because a court has already determined
that the Estate has no interest in the assets subject to the Turnover Order, meaning
Haifa was not entitled to notice of the Turnover Order.
In 2016, Haifa, purporting to act as executrix for the Estate, and Ragda filed
suit against Hartford and Wells Fargo alleging breach of contract, breach of
fiduciary duty, and negligence based upon Hartford and Wells Fargo’s compliance
with the Turnover Order and transfer of Wattar’s life insurance proceeds and the
Wattar Trust’s assets to the bankruptcy estate. Estate of Soad Wattar v. Hartford
Life & Annuity Ins. Co., No. 16-cv-04397, ECF 1 (Apr. 18, 2016). Haifa claimed that
the Estate had an interest in these assets and alleged, for example, that “Wells
Fargo had been holding assets belonging to the entity, Soad Wattar Revocable
Living Trust” that, after Soad Wattar passed away, “belonged to the . . . the Estate.”
Id. ¶ 4; see also id. ¶¶ 15–16.
Hartford and Wells Fargo moved to dismiss. Wells Fargo argued, among
other things, that the Estate lacked standing because the assets held by Wells
Fargo were owned by the Wattar Trust and not the Estate. Estate of Soad Wattar v.
Hartford Life & Annuity Ins. Co., No. 16-cv-04397, ECF 28 at 9 (N.D. Ill. June 24,
2016). Specifically, Wells Fargo argued that “because the assets were owned by the
[Wattar] Trust and did not become property of [the Estate] even after her passing,
[the Estate] ha[d] no property interest in the affected assets and thus suffered no
injury in fact when the [Wattar] Trust’s assets were turned over to the bankruptcy
trustee.” Id. at 10–11. Hartford also argued that the Estate had no interest in the
life insurance policy proceeds and therefore lacked standing as to its claims against
Hartford. Estate of Soad Wattar v. Hartford Life & Annuity Ins. Co., No. 16-04397,
ECF 25 at 29 (N.D. Ill. June 24, 2016).
The district court granted the motions. Reviewing the life insurance policy,
the court held that “[t]he [E]state holds no interest in the insurance proceeds” and
therefore could not show that it was “injured by Hartford’s conduct.” Estate of Soad
Wattar v. Hartford Life & Annuity Ins. Co., No. 16-04397, ECF 46 at 6 (Feb. 10,
2017). The court further held that the Estate “fail[ed] to plausibly allege that [it]
held an interest in the assets transferred by Wells Fargo.” Id. at 7. Accordingly,
the court concluded that “[w]ithout an interest in the assets transferred by Hartford
or Wells Fargo, plaintiffs could not have been injured by those transfers” and lacked
standing. Id. The court also determined that Ragda and Haifa could not amend the
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complaint to cure these defects and therefore dismissed the complaint without
prejudice and entered final judgment. Id. at 11–12; Estate of Soad Wattar v.
Hartford Life & Annuity Ins. Co., No. 16-04397, ECF 47 (Feb. 10, 2017).
“[B]ecause the decision sought to be given preclusive effect was rendered by a
federal court, federal preclusion law applies.” U.S. ex rel. Conner v. Mahajan, 877
F.3d 264, 270 (7th Cir. 2017). Collateral estoppel applies if “(1) the issue sought to
be precluded is the same as that involved in the prior action; (2) the issue was
actually litigated; (3) the determination of the issue was essential to the final
judgment; and (4) the party against whom estoppel is invoked was fully represented
in the prior action.” Dexia Credit Local v. Rogan, 629 F.3d 612, 628 (7th Cir. 2010).
Haifa disputes only the second element. Haifa argues that “the issue was not
actually litigated . . . because [the court] dismissed the claim without prejudice” and
“not on the merits.” [80] at 6. But collateral estoppel applies even if a claim is
dismissed without prejudice based on a jurisdictional defect—a claim need not be
litigated “on the merits.” Robinson v. Sherrod, 631 F.3d 839, 843 (7th Cir. 2011)
(observing that “[c]ollateral estoppel (issue preclusion) will bar relitigation of the
grounds on which the present suit was dismissed” even though the plaintiff’s suit
was dismissed “without prejudice” and there was “no ruling on the merits of his
claim”); Carr v. Tillery, 591 F.3d 909, 917 (7th Cir. 2010) (“[A] dismissal can be
without prejudice yet have preclusive effect.”); Perry v. Sheahan, 222 F.3d 309, 318
(7th Cir. 2000) (“Although only judgments on the merits preclude parties from
litigating the same cause of action in a subsequent suit, that does not mean that
dismissals for lack of jurisdiction have no preclusive effect at all. A dismissal for
lack of jurisdiction precludes relitigation of the issue actually decided, namely the
jurisdictional issue.”).
Haifa also contends that the district court’s decision is incorrect because the
court did not have all the facts before it, as Haifa asserts that she did not have the
Second Will during the litigation against Hartford and Wells Fargo. [80] at 5–6. As
a factual matter, Haifa’s assertion that she could not submit the Second Will is
false. Haifa attached the Second Will to her reply in support of her motion to vacate
the Turnover Order filed in November 2015, [Bankr. 228-1] at 50–56, that was filed
months before Haifa and Ragda filed suit against Hartford and Wells Fargo in April
2016. Regardless, the correctness of the earlier decision is not a factor in
determining whether collateral estoppel applies. Gulf Power Co. v. FCC, 669 F.3d
320, 324 (D.C. Cir. 2012) (“[I]f an issue can be turned into a new issue merely by
asking whether it had been rightly decided, collateral estoppel would never apply.”);
Del. River Port Auth. v. Fraternal Order of Police, 290 F.3d 567, 576 (3d Cir. 2002)
(“Error in a prior judgment is not a sufficient ground for refusing to give it
preclusive effect.”). Haifa cites no authority that holds otherwise.
Haifa also appears to argue that applying collateral estoppel here would be
unfair, but she does not explain how. And the authorities she cites in support apply
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Illinois, not federal, preclusion law. See Goodwin v. Bd. of Trs. of Ill., 442 F.3d 611,
620–21 (7th Cir. 2006); Herzog v. Lexington Twp., 167 Ill. 2d 288 (1995).
Finally, Haifa contends that this issue was not raised in the bankruptcy
court. This issue, however, was directly raised by the Trustee on remand. [Bankr.
448] at 2–3. Although the bankruptcy court did not decide this issue, this court may
affirm the bankruptcy court’s order “on any ground supported by the record.”
Peterson v. Anyone Home, Inc. (In re Mack Indus., Ltd.), No. 21 CV 1457, 2021 WL
4815270, at *3 (N.D. Ill. Aug. 2, 2021); Murphy v. Slack, No. 06 C 2091, 2006 WL
2583726, at *2 (N.D. Ill. Sept. 5, 2006); see also Marx v. M & I Bank of Watertown,
17 F.3d 1012, 1014 n.3 (7th Cir. 1994) (“It is well settled that we may affirm the
district court on any ground that finds support in the record.” (internal quotation
marks omitted)).
Accordingly, the bankruptcy court’s denial of Haifa’s motion to vacate is
affirmed because the motion is barred by collateral estoppel.
III.
Personal Jurisdiction And Actual Notice
The bankruptcy court concluded that the Turnover Order did not violate due
process because Haifa (and therefore the Estate) had actual notice of the
bankruptcy proceeding, including the Alter Ego Order and the Turnover Order.
[Bankr. 566-4] at 8–10. “Due process requires notice ‘reasonably calculated, under
all the circumstances, to apprise interested parties of the pendency of the action and
afford them an opportunity to present their objections.’” United Student Aid Funds,
Inc. v. Espinosa, 559 U.S. 260, 272 (2010) (quoting Mullane v. Cent. Hanover Bank
& Tr. Co., 339 U.S. 306, 314 (1950)). Actual notice of a bankruptcy proceeding can
satisfy due process. Id.; In re Pence, 905 F.2d 1107, 1109 (7th Cir. 1990) (“Due
process does not always require formal, written notice of court proceedings; informal
actual notice will suffice.”). To determine whether notice is sufficient, the court
must examine “the totality of the circumstances” to ensure that the notice provided
the interested party with adequate opportunity to present objections. In re Hardej,
563 B.R. 855, 864 (N.D. Ill. 2017); In re Marino, 195 B.R. 886, 895 (N.D. Ill. 1996).
Haifa has not shown that the bankruptcy court erred when it determined
that Haifa had actual notice. Although Haifa stated during the evidentiary
hearings before the bankruptcy court that she was not aware of the Alter Ego Order
until 2011, she also testified that she had a discussion with her family about the
Order shortly after it was entered in July 2010. [Bankr. 552] at 352–54. Indeed, on
July 15, 2010, Haifa and Ragda filed a lawsuit in the Circuit Court of Cook County
against Richard that discussed both the WIN adversary proceeding as well as the
Alter Ego Order. [14-19] at 14–15; see also [14-10] at 5–6 (amended complaint filed
on July 30, 2010, discussing the same). Addressing that lawsuit, Richard testified
that he was cooperating with his “sisters” (i.e., both Ragda and Haifa) because he
had “an interest for them to succeed to get their trust back.” [Bankr. 553] at 625.
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Separately, Ragda filed multiple pleadings acknowledging that she filed the Circuit
Court of Cook County lawsuit with Haifa. [Bankr. 65] ¶¶ 18, 22 (“Ragda Sharifeh
and Haifa Kaj . . . caused a complaint to be filed in the Circuit Court of Cook
County.”); [Bankr. 68] ¶¶ 13, 17 (similar); [14-31] ¶¶ 19, 23 (similar). Based upon
this evidence, Haifa was aware of the bankruptcy proceeding, including the Alter
Ego Order holding that Richard was the alter ego of the Wattar Trust, weeks before
the Turnover Order was entered on August 5, 2010.
Haifa does not dispute that, accepting these facts, she had notice adequate to
satisfy due process. Instead, she challenges the facts and contends that she had no
notice of the bankruptcy proceedings before the Turnover Order was entered.
Among other evidence, Haifa points to her testimony that she did not learn about
the bankruptcy proceedings until 2011 and was not involved in the litigation
against Richard, as well as the testimony from a variety of witnesses about Haifa’s
poor relationship with her siblings around 2009 and 2010. Ragda also testified that
Haifa was not part of the litigation against Richard.
The bankruptcy court, however, ultimately found that neither Haifa nor
Ragda was credible. [Bankr. 566-1] at 5, 8; [Bankr. 566-2] at 4, 9; see also [566-3] at
8 (observing that Richard “has little credibility”). Appellate courts “are especially
deferential toward [the] trial court’s assessment of witness credibility.” Dimas v.
Stergiadis (In re Dimas), 14 F.4th 634, 642 (7th Cir. 2021) (internal quotation
marks omitted) (alteration in original). The court discerns no basis to upset the
bankruptcy court’s credibility findings.
Ultimately, “it is for the bankruptcy court to assess the credibility of
witnesses and weigh evidence, and [the district court] will not second guess the
[bankruptcy] court’s resolution of conflicting evidence.” Freeland v. Enodis Corp.,
540 F.3d 721, 734 (7th Cir. 2008). Haifa has not shown any basis to disturb the
bankruptcy court’s determination that Haifa had actual notice that satisfied due
process.
IV.
Waiver Regarding The Second Will
The bankruptcy court also held that Haifa waived her ability to rely upon the
Second Will by failing to present it with her motion to vacate and instead waiting to
submit it with her reply. [Bankr. 566] at 5; [Bankr. 566-3] at 10; [Bankr. 566-5] at
4. Again, the court finds no basis to overturn the bankruptcy court’s holding.
Courts have discretion over whether to consider new evidence submitted for
the first time in reply. See Black v. TIC Inv. Corp., 900 F.2d 112, 116 (7th Cir.
1990) (“In view of its tardy submission, it is for the district court to decide whether
or not to consider Slife’s affidavit.”). Courts regularly exercise that discretion and
refuse to consider such untimely evidence. See, e.g., Meek v. Archibald & Meek,
Inc., No. 21-cv-02397, 2021 WL 2036535, at *3 (N.D. Ill. May 21, 2021) (“It is well8
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established that a reply brief should not present new arguments or incorporate new
evidence for arguments that were not properly supported in an opening brief.”); cf.
Mason v. S. Ill. Univ. at Carbondale, 233 F.3d 1036, 1043 (7th Cir. 2000) (“Because
Mason does not dispute this conclusion until his reply brief, this new argument is
waived.”).
Here, it is undisputed that Haifa did not submit the Second Will until her
reply brief in support of her motion to vacate. [Bankr. 228-1] at 35–41. Even then,
she did not explain the Second Will’s significance. See [Bankr. 228]. Thus, it was
up to the discretion of the bankruptcy court whether to consider the Second Will.
The bankruptcy court declined to do so, and the court discerns no basis on which to
reverse that decision.
Haifa argues that she had no obligation to present the Second Will with her
motion. But, as the movant, Haifa had the burden of proof to show that the
Turnover Order should be vacated. See Trade Well Int’l v. United Cent. Bank, 825
F.3d 854, 861 (7th Cir. 2016). The premise of Haifa’s motion was that Haifa, as
executrix for the Estate, had not been served with process before the Turnover
Order was entered and that the bankruptcy court therefore lacked personal
jurisdiction over the Estate and could not order the turnover of the Estate’s assets.
See [Bankr. 194]. Haifa was therefore obligated to present evidence that she was in
fact the Estate’s trustee, executrix, or otherwise had any claim to represent the
Estate. 2 Indeed, the bankruptcy court originally denied Haifa’s motion because
Haifa had not shown what her relationship was with the Estate or why she was
entitled to notice of the Turnover Order. [Bankr. 232] at 4–6. Haifa contends that
“there is a presumption made when a company or person first appears in an action
that they are who they say they are” but cites no authority in support—waiving the
argument. [74] at 5; see Schaefer v. Universal Scaffolding & Equip., LLC, 839 F.3d
599, 607 (7th Cir. 2016) (“Perfunctory and undeveloped arguments are waived, as
are arguments unsupported by legal authority.”). Haifa also ignores that she, as
the movant, bore the burden of establishing her entitlement to relief. Here, that
meant putting forth evidence that she had an interest in the assets at issue in the
Turnover Order. For this same reason—that Haifa as the movant had the burden—
her argument that establishing her relationship with the Estate was an
“affirmative defense,” [74] at 5, is unpersuasive.
Haifa also argues that whether she waived reliance on the Second Will was,
in turn, waived by the Trustee because the Trustee did not raise the issue in his
response to Haifa’s motion to vacate. This is a nonsequitur. First, the bankruptcy
court had discretion whether to receive untimely evidence, regardless of whether
the Trustee objected. Second, the Trustee could not be expected to object in his
Haifa, in fact, did not even explain her relationship to the Estate in her reply brief that
attached the Second Will. [Bankr. 228].
2
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response brief to consideration of the Second Will that was not submitted until after
the Trustee’s response.
Without the Second Will, Haifa had no evidence that she was the executrix of
the Estate and, in turn, no evidence that she had an interest in any of the assets at
issue in the Turnover Order. Thus, Haifa has not shown that she was entitled to
notice, as the bankruptcy court concluded when the court denied her motion to
vacate.
V.
Other Issues
The bankruptcy court’s order addressed numerous other issues that
supported denial of Haifa’s motion to vacate. The court concluded that Haifa had
notice through her agents Richard and Richard’s attorney (who the bankruptcy
court concluded were acting on the Estate’s behalf), Haifa waived personal
jurisdiction objections by participating in the bankruptcy proceeding through both
Richard and his attorney, and the appeal of the Alter Ego order therefore also
bound Haifa and the Estate through res judicata. The court further concluded that
Haifa’s motion was barred by laches and the Second Will was a forgery. The
Trustee also argues for affirmance on the alternative ground that Haifa and the
Estate have no interest in the Wattar Trust. The bankruptcy court also determined
that the November 1, 2007 Revocation of Trustee was invalid.
The court does not reach these issues because, as explained above, there are
already multiple grounds that independently support affirmance of the bankruptcy
court’s denial of Haifa’s motion to vacate. Because resolution of these issues does
not alter the ultimate disposition of this appeal, the court does not address them.
CONCLUSION
For the foregoing reasons, the bankruptcy court’s order is affirmed. Enter
final judgment.
Dated: September 14, 2022
/s/ Martha M. Pacold
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