Pemstein v. Pemstein (In re Pemstein)

Summarized by Joel Newell , Ballard Spahr, LLP
10 years 5 months ago

Citation:

Ninth Circuit Banruptcy Appellate Panel Case No. CC-15-1019-KuPeTa (September 21, 2015)

Tag(s):

Ruling:

In the ruling, determined not to be appropriate for publication, by the Ninth Circuit Bankruptcy Appellate Panel ("BAP"), the BAP affirmed the bankruptcy court's nondischargeability judgment ruling. A bankruptcy court abuses its discretion only when it applies an incorrect legal rule or when its application of the correct legal rule is illogical, implausible, or without support in the record. When there are two conflicting judgments the later in time controls.

Procedural context:

The BAP previously remanded the bankruptcy court's prior decisions for the bankruptcy court to decide whether, and to what extent, issue preclusion should be applied to the state court breach of fiduciary duty finding. The bankruptcy court considered additional evidence and determined that Permstein's pre-petition judgment was excepted from discharge pursuant to 11 U.S.C. Sec. 523(a)(4). The Debtor appealed asserting that an earlier state court decisions (entered around 2005) precluded the bankruptcy court from basing its decision on Permstein's 2010 judgment.

Facts:

Martin Pemstein ("Debtor") and his brother Harold Pemstein ("Permstein") were general partners of HMS Holding Company ("HMS"). The Debtor and Permstein also owned Pemma Corporation ("Pemma"). HMS owned several parcels of real property and Pemma used the real property to operate it wholesale business. The Debtor and other officers of Pemma ousted Permstein from Pemma, and the Debtor and Permstein were intrinched in many years of litigation related to the ongoing feud between the Debtor and Permstein. The Debtor argues that the 2010 judgment did not include any finding that Martin breached his fiduciary duty.

Judge(s):

Honorable KURTZ, PERRIS and TAYLOR, Bankruptcy Judges.

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!