                                                            FILED
                                                             AUG 06 2014
 1                          NOT FOR PUBLICATION
                                                         SUSAN M. SPRAUL, CLERK
 2                                                         U.S. BKCY. APP. PANEL
                                                           OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )       BAP No. CC-13-1483-TaDKi
                                   )
 6   IMAGINE FULFILLMENT SERVICES, )       Bk. No. 12-20544-WB
     LLC,                          )
 7                                 )       Adv. Pro. No. 12-1514-WB
                    Debtor.        )
 8   ______________________________)
                                   )
 9   DC MEDIA CAPITAL, LLC,        )
                                   )
10                  Appellant,     )
                                   )
11   v.                            )       MEMORANDUM*
                                   )
12   IMAGINE FULFILLMENT SERVICES, )
     LLC; UNITED STATES TRUSTEE,   )
13                                 )
                    Appellees.     )
14   ______________________________)
15                    Argued and Submitted on June 26, 2014
                             at Pasadena, California
16
                             Filed - August 6, 2014
17
                 Appeal from the United States Bankruptcy Court
18                   for the Central District of California
19            Honorable Mark D. Houle,** Bankruptcy Judge, Presiding
                         ________________________________
20
21
          *
           This disposition is not appropriate for publication.
22   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
23   See 9th Cir. BAP Rule 8013-1.
24        **
           Judge Houle entered the judgment in the adversary
     proceeding from which appellant appeals. Judge Julia W. Brand,
25   however, entered the Amended Memorandum Decision (for
     publication) and order on partial summary judgment that
26   determined, prior to entry of the Judgment, the specific narrow
     issue as to which appellant D.C. Media Capital, LLC seeks review.
27   See Imagine Fulfillment Servs., LLC v. DC Media Capital, LLC
     (In re Imagine Fulfillment Servs., LLC), 489 B.R. 136 (Bankr.
28   C.D. Cal. 2013).
 1   Appearances:     Jeffrey J. Williams of the Law Offices of Jon A.
                      Kodani argued for Appellant DC Media Capital, LLC;
 2                    Aram Ordubegian of Arent Fox LLP argued for
                      Appellee Imagine Fulfillment Services, LLC.
 3                     __________________________________
 4   Before: TAYLOR, DUNN, and KIRSCHER, Bankruptcy Judges.
 5
 6                               INTRODUCTION
 7        Judgment creditor D.C. Media Capital, LLC (“DC Media”)
 8   appeals from the bankruptcy court’s judgment in favor of
 9   chapter 111 debtor Imagine Fulfillment Services, LLC (the
10   “Judgment”).    Pursuant to §§ 547 and 550, the Judgment avoids and
11   allows the Debtor to recover as a preferential transfer a
12   prepetition judgment lien filed by DC Media.    DC Media argues
13   that the bankruptcy court erred when it determined on summary
14   judgment that DC Media’s prepetition state court judgment against
15   Debtor was not a contingent debt for purposes of its insolvency
16   analysis.    We determine that the bankruptcy court did not commit
17   error and, thus, we AFFIRM.
18                    PROCEDURAL AND FACTUAL BACKGROUND2
19        Debtor filed its voluntary chapter 11 petition in March
20   2012.    Eighty-nine days before the filing, DC Media filed a
21   Notice of Judgment Lien with the California Secretary of State
22
23        1
             Unless specified otherwise, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
24   all “Rule” references are to the Federal Rules of Bankruptcy
     Procedure, Rules 1001-9037. All “Civil Rule” references are to
25   the Federal Rules of Civil Procedure.
26        2
             Most of the relevant undisputed facts are set forth in
     the bankruptcy court’s published decision. Appellant seeks
27   review of the bankruptcy court’s ruling regarding only one
     transfer identified in the Amended Memorandum Decision as
28   “Transfer One.” We limit our summary of facts accordingly.
                                     - 2 -
 1   (“Judgment Lien”) with respect to a state court judgment in the
 2   total amount of $3,997,223 against the Debtor.   Debtor appealed
 3   from the state court judgment after the lien was recorded but
 4   before the petition date.
 5        In the bankruptcy case, Debtor filed an adversary proceeding
 6   against DC Media seeking to avoid three alleged preferential
 7   transfers, the first of which was the filing of the Judgment
 8   Lien,3 and to recover and preserve the avoided transfers for the
 9   benefit of the estate.   Debtor then sought partial summary
10   judgment or adjudication of facts as to all three transfers (the
11   “Debtor’s First MSJ”).   DC Media filed a cross motion seeking
12   partial summary judgment as to two alleged affirmative defenses
13   (“DC Media’s MSJ”).   DC Media also opposed Debtor’s First MSJ.
14        In DC Media’s opposition to Debtor’s First MSJ, it asserted
15   three grounds to support denial:   (1) that no transfer was made
16   within the relevant 90-day prepetition window; (2) that its
17   evidence successfully rebutted the presumption of insolvency; and
18   (3) that Debtor failed to show that DC Media would receive more
19   from the transfers than it would receive in a hypothetical
20   chapter 7 liquidation had the transfers not been made.   In
21   support of its third argument, DC Media argued that it held a
22   perfected security interest in Debtor’s personal property, not
23   only as a result of the Judgment Lien, but also based on
24   DC Media’s prepetition service on the Debtor of an order to
25
26        3
             Debtor identified “Transfer 2" as DC Media's filing of an
     abstract of the state court judgment with the Los Angeles County
27   Recorder. “Transfer 3" was the seizure of $81,196 via levy by
     the sheriff from Debtor’s prepetition bank account – DC Media’s
28   partial collection on account of the state court judgment.
                                    - 3 -
 1   appear for judgment debtor exam (“ORAP lien”).    DC Media argued
 2   that Debtor never sought to avoid the ORAP lien and asserted that
 3   even if all other transfers alleged by Debtor were avoided,
 4   DC Media would still remain a secured creditor.
 5        Prior to the hearing on the Debtor’s First MSJ, Debtor
 6   sought leave to amend the complaint to avoid the ORAP lien.
 7   DC Media filed limited opposition.     The hearing on the Debtor’s
 8   request to amend was to be heard the day after the hearing on
 9   Debtor’s First MSJ.
10        The bankruptcy court heard oral argument on Debtor’s First
11   MSJ in November 2012, and took both Debtor’s First MSJ and
12   DC Media’s MSJ under submission.   It then discussed scheduling
13   with the parties, including timing of Debtor’s amended complaint
14   and the future hearing on Debtor’s proposed disclosure statement.
15   The parties agreed that Debtor could amend the complaint, but
16   questioned its potential impact if filed before the bankruptcy
17   court’s decision on the two under-submission motions.    To avoid
18   confusion, the Court vacated the hearing on the Debtor’s motion
19   for leave to amend and agreed to determine later the appropriate
20   time for Debtor to file the first amended complaint.
21        The bankruptcy court entered its Amended Memorandum Decision
22   on March 12, 2013, and its order on March 14, 2013, granting, in
23   part, and denying, in part, Debtor’s First MSJ (the “First MSJ
24   Order”).   As to the Judgment Lien, the bankruptcy court found
25   there to be no dispute that it was a transfer of an interest of
26   the Debtor in property to or for the benefit of Debtor’s
27   creditor, DC Media, on account of the antecedent debt established
28   by the state court judgment.   Therefore, the bankruptcy court

                                    - 4 -
 1   addressed only three disputed issues: (1) whether the transfer
 2   was made within the 90-day preference period; (2) whether Debtor
 3   was insolvent at the time of the transfer; and (3) whether the
 4   Judgment Lien, if not avoided, would allow DC Media to receive
 5   more than it would in a hypothetical liquidation.
 6        The bankruptcy court granted summary adjudication as to all
 7   but one of the elements necessary to avoid the Judgment Lien.
 8   Based on the ORAP lien, it denied summary adjudication solely as
 9   to whether the Judgment Lien allowed DC Media to receive more
10   than it would in a hypothetical chapter 7 liquidation had the
11   transfer not occurred.   Regarding the insolvency element, the
12   bankruptcy court reasoned that the question turned on whether the
13   state court judgment was a contingent liability.    If it were not
14   contingent, the full amount must be included in the insolvency
15   analysis – which would conclusively eliminate any genuine issue
16   of material fact on summary judgment based on the balance sheet
17   analysis.    The bankruptcy court held, as a matter of law in the
18   Ninth Circuit, that the state court judgment was not a contingent
19   debt and thus, that DC Media failed to show the existence of
20   disputed facts regarding Debtor’s insolvency.
21        The bankruptcy court granted summary judgment as to one of
22   the remaining two transfers, and denied summary judgment as to
23   the other.   It denied DC Media’s MSJ in its entirety.
24        DC Media filed a notice of appeal from the First MSJ Order
25   and a motion for leave to appeal, recognizing it as an
26   interlocutory order.   The Bankruptcy Appellate Panel entered an
27   order denying leave and dismissing the first appeal on May 21,
28   2013.   Thereafter, the bankruptcy court entered its order

                                     - 5 -
 1   granting Debtor’s motion for leave to file its amended complaint
 2   and Debtor filed its second motion for partial summary judgment
 3   or, in the alternative, for summary adjudication of facts
 4   (“Debtor’s Second MSJ”).
 5        Debtor’s Second MSJ sought resolution in its favor on the
 6   remaining preferential transfer element.    DC Media did not oppose
 7   the Debtor’s Second MSJ.
 8        The bankruptcy court thereafter entered its order granting
 9   Debtor’s Second MSJ and the separate Judgment thereon.    The
10   Judgment provides that: “With respect to [the Judgment Lien]
11   summary judgment is granted as to [Debtor’s] First, Second, and
12   Third Claims for Relief.”4    Judgment, ECF Dkt. 111 at 2:4-5.   It
13   further provides that the Judgment Lien is avoided and preserved
14   for the benefit of the estate; and DC Media’s secured claim is
15   disallowed.
16        DC Media timely appealed.
17                                JURISDICTION
18        The bankruptcy court had jurisdiction under 28 U.S.C.
19   §§ 1334 and 157(b)(2)(F).
20        We have jurisdiction under 28 U.S.C. § 158(a) and (b) to
21   hear appeals from final judgments, orders, and decrees; and with
22   leave of the Panel, from interlocutory orders and decrees of
23   bankruptcy judges.   The burden of demonstrating jurisdiction lies
24
25        4
             The First Claim for Relief sought avoidance and recovery
     of preferential transfers pursuant to §§ 547 and 550; the Second
26   Claim sought to preserve the avoided transfers pursuant to § 551;
     and the Third Claim sought disallowance of DC Media’s filed
27   secured proof of claim, or reclassification as a general
     unsecured claim. The amended complaint also contained a Fourth
28   Claim – for recovery of attorney’s fees and costs of suit.
                                      - 6 -
 1   with the party asserting it.   Kokkonen v. Guardian Life Ins. Co.
 2   of Am., 511 U.S. 375, 379-80 (1994).     Here, DC Media states in
 3   its opening brief5 that the Judgment is final for purposes of
 4   appellate jurisdiction.   It reiterates arguments it made in
 5   response to the query from the Clerk of the BAP regarding
 6   finality, to the effect that the Fourth Claim contained in the
 7   amended complaint but not addressed in the Judgment (which sought
 8   attorney’s fees), need not be resolved for purposes of a finality
 9   determination pursuant to Budinich v. Becton Dickinson & Co.,
10   486 U.S. 196 (1988).   Although we agree that the lack of an
11   attorney’s fees determination does not render the Judgment not
12   final for purposes of appeal, we also briefly reviewed the impact
13   on finality of the lack of a separate judgment as to the two
14   other transfers that were resolved by the First MSJ Order.
15        A motions panel in DC Media’s first appeal (BAP 11-1141)
16   denied leave to appeal the First MSJ Order.     When the bankruptcy
17   court entered the Judgment, resolving all remaining issues in the
18   adversary proceeding (but for the attorney’s fees), the First MSJ
19   Order became final and appealable.     See Munoz v. Small Bus.
20   Admin., 644 F.2d 1361, 1364 (9th Cir. 1981) (“an appeal from the
21   final judgment draws in question all earlier non-final orders and
22
          5
23           In light of the fact that the Judgment was entered in
     connection with a motion for “partial” summary judgment, and the
24   inclusion of a fourth claim in the amended complaint, which was
     not addressed in the Judgment, the Clerk of the BAP issued an
25   order requiring the parties to file and serve written responses
     explaining how the judgment on appeal is final. After review of
26   DC Media’s response, a motions panel found the order on appeal
     sufficiently final for purposes of appeal. Nonetheless, we have
27   an independent duty to examine jurisdictional issues. Gen. Elec.
     Capital Auto Lease, Inc. v. Broach (In re Lucas Dallas, Inc.),
28   185 B.R. 801, 804 (9th Cir. BAP 1995).
                                    - 7 -
 1   all rulings which produced the judgment”).     This result is of
 2   particular import here because DC Media’s sole issue on appeal
 3   was determined by the bankruptcy court when it ruled on the
 4   Debtor’s First MSJ.6
 5        Based on the foregoing review, we determine that we have
 6   jurisdiction under 28 U.S.C. § 158.7
 7                                  ISSUE
 8        Whether the bankruptcy court erred in determining, as a
 9   matter of law, that the state court judgment was not a contingent
10   debt.
11                           STANDARD OF REVIEW
12        We review summary judgment de novo.     Bamonte v. City of
13   Mesa, 598 F.3d 1217, 1220 (9th Cir. 2010).     The question of
14   whether a debt is contingent is a question of law subject to de
15   novo review.   Nicholes v. Johnny Appleseed (In re Nicholes),
16   184 B.R. 82, 86 (9th Cir. BAP 1995).
17
18
19        6
             Ordinarily there should be a separate document embodying
     a final judgment that is distinct from and in addition to an
20   order granting a motion for summary judgment. See Rule 902l.
     Here, we located no separate judgment entered on the docket as to
21   the two transfers that were resolved by the First MSJ Order. The
     parties effectively waived that requirement by treating the First
22   MSJ Order as a final judgment coupled with the Judgment. See
     Casey v. Albertson’s Inc., 362 F.3d 1254, 1256-59 (9th Cir.
23   2004). And in addition, pursuant to Civil Rule 58(c)(2)(B) (made
     applicable here pursuant to Rule 7058), judgment on the other two
24   transfers was deemed entered, at the latest, 150 days from entry
     of the First MSJ Order, which was March 14, 2013.
25
          7
             DC Media also mentions in a footnote in its opening brief
26   that although the Debtor’s chapter 11 plan was confirmed, this
     appeal was not mooted thereby because the plan expressly
27   “contemplates this appeal, and provides a remedy for the
     appellant in the event this appeal is successful.” Appellant’s
28   Opening Br. at 3 n.1. We agree.
                                    - 8 -
 1                               DISCUSSION
 2        Civil Rule 56(c) (incorporated into the Bankruptcy Rules
 3   under Rule 7056) provides that a party may move for summary
 4   judgment when there is no genuine issue as to a material fact and
 5   the moving party is entitled to a judgment as a matter of law.       A
 6   "genuine issue" is one where, based on the evidence presented, a
 7   fair-minded jury could return a verdict in favor of the nonmoving
 8   party on the issue in question.   Anderson v. Liberty Lobby, Inc.,
 9   477 U.S. 242, 249 (1986).   All justifiable inferences must be
10   drawn in favor of the non-moving party.    Id. at 255.   Likewise,
11   all evidence must be viewed in the light most favorable to the
12   non-moving party.   Lake Nacimiento Ranch v. San Luis Obispo
13   Cnty., 841 F.2d 872, 875 (9th Cir. 1987).    Therefore, viewing the
14   evidence in the light most favorable to the non-moving party, we
15   must determine whether there are any genuine disputes of material
16   fact that remain for trial and whether the prevailing party is
17   entitled to judgment as a matter of law.    New Falls Corp. v.
18   Boyajian (In re Boyajian), 367 B.R. 138, 141 (9th Cir. BAP 2007).
19        Pursuant to § 547(b)(3), for the Debtor to avoid the
20   Judgment Lien as a preference, Debtor was required to establish
21   that it was insolvent when the Judgment Lien was filed.    Debtor
22   is presumed to be insolvent 90 days before it filed its petition,
23   pursuant to § 547(f), and it is undisputed that the Judgment Lien
24   was filed 89 days before the petition date.    DC Media can
25   overcome the insolvency presumption only with substantial
26   evidence of the Debtor’s solvency on the date the Judgment Lien
27   was filed.   The bankruptcy court held that DC Media failed to do
28

                                    - 9 -
 1   so.8       As relevant here, it found, as a matter of law, that the
 2   state court judgment is a noncontingent liability.9        We agree.
 3          The Bankruptcy Code does not define the term “contingent.”
 4   See In re Nicholes, 184 B.R. at 88.         It is well settled, however,
 5   that “a debt is noncontingent if all events giving rise to
 6   liability occurred prior to the filing of the bankruptcy
 7   petition.”       Id.   A contingent debt is “one which the debtor will
 8   be called upon to pay only upon the occurrence or happening of an
 9   extrinsic event which will trigger the liability of the debtor to
10   the alleged creditor.”        In re Fostvedt, 823 F.2d 305, 306 (9th
11   Cir. 1987) (quotation and citation omitted).        In the context of
12   California state court judgments, it is also well-settled that
13   unstayed judgments, even those on appeal, “are not contingent as
14   to liability or amount.”        Marciano v. Chapnick (In re Marciano),
15   708 F.3d 1123, 1127 (9th Cir. 2013); and see In re Keenan,
16   201 B.R. 263, 266 (Bankr. S.D. Cal. 1996).
17          Here, DC Media held a California state court judgment
18   against Debtor.        Debtor filed an appeal shortly before filing
19   bankruptcy, but after the Judgment Lien was filed.10        Debtor
20
21          8
             The bankruptcy court’s analysis of the insolvency issue
     is set forth in its extensive, well-reasoned discussion in the
22   published Amended Memorandum Decision. See In re Imagine,
     489 B.R. at 144-50.
23
            9
             Thus, the full amount of the state court judgment, when
24   added to the Debtor’s balance sheet, resulted in DC Media’s
     failure to overcome the presumption of insolvency and entitled
25   Debtor to summary judgment on the insolvency element.
     In re Imagine, 489 B.R. at 150.
26
            10
             On the date of the transfer, which DC Media conceded at
27   oral argument is the critical date for avoidance purposes, the
     state court judgment was not only not stayed on appeal, it was
28   not even on appeal.
                                        - 10 -
 1   never sought or obtained a stay, and DC Media commenced
 2   collection efforts on the state court judgment before Debtor
 3   filed bankruptcy.11   DC Media, nonetheless, argues on appeal that
 4   the bankruptcy court erred when it held, as a matter of law, that
 5   the state court judgment was not a contingent liability.       It
 6   argues that for preference analysis purposes the insolvency
 7   determination is a factual determination that required the
 8   bankruptcy court to determine the fair valuation of not only
 9   assets but liabilities.   And to do so, it argues, the bankruptcy
10   court had to consider DC Media’s evidence that Debtor excluded
11   the state court judgment from its balance sheets and DC Media’s
12   expert’s opinion that such exclusion was appropriate under
13   generally accepted accounting principles (“GAAP”).     Based
14   thereon, DC Media argues that the state court judgment was
15   necessarily a contingent claim that must be discounted to little
16   or no value in the insolvency analysis.   Only at trial, it
17   argues, could the bankruptcy court find that relevant GAAP
18   principles were not persuasive.   We disagree.
19        “There is no generally accepted accounting principle for
20   analyzing the insolvency of a company.”   Arrow Elecs., Inc. v.
21   Justus (In re Kaypro), 218 F.3d 1070, 1076 (9th Cir. 2000)
22   (citing Sierra Steel, Inc. v. Totten Tubes, Inc. (In re Sierra
23   Steel, Inc.), 96 B.R. 275, 278 (9th Cir. BAP 1989)).     And as
24   DC Media concedes, GAAP are not controlling.     See In re Sierra
25   Steel, Inc., 96 B.R. at 278.   In particular, “[w]ith regard to
26
          11
             In fact, one of the two other transfers was based on
27   DC Media’s levy on one of Debtor’s bank accounts as part of
     DC Media’s collection efforts on the unstayed state court
28   judgment.
                                    - 11 -
 1   the sum of [a debtor’s] debts, GAAP are . . . inapposite because
 2   they do not report liabilities in accordance with the right to
 3   payment standard of 11 U.S.C. § 101(5) and (12).”      Devan v.
 4   The CIT Group/Commercial Servs., Inc. (In re Merry-Go-Round
 5   Enters., Inc.), 229 B.R. 337, 343 (Bankr. D. Md. 1999).
 6        A debtor is insolvent when its debts exceed its assets – the
 7   “traditional bankruptcy balance sheet test.”      In re Koubourlis,
 8   869 F.2d 1319, 1321 (9th Cir. 1989).      This test is codified at
 9   § 101(32)(A), which defines insolvency to mean: “with reference
10   to an entity other than a partnership and a municipality,
11   financial conditions such that the sum of such entity’s debts is
12   greater than all of such entity’s property, at a fair valuation”
13   exclusive of certain exempted or fraudulently transferred
14   property.   Under the Code, the term debt “means liability on a
15   claim.”   11 U.S.C. § 101(12).    And the term “claim” is defined
16   under the Code to include “right to payment, whether or not such
17   right is reduced to judgment, liquidated, unliquidated, fixed,
18   contingent, matured, unmatured, disputed, undisputed, legal,
19   equitable, secured, or unsecured; . . . .”
20        Based on the foregoing statutory provisions, to the extent
21   GAAP financial reporting omits any type of collectible debt from
22   a debtor’s balance sheet – whether contingent or noncontingent –
23   the resulting financial statement is not dispositive as to the
24   debtor’s solvency or insolvency.     Thus, the omission of the state
25   court judgment from such a financial statement does not require a
26   conclusion that the omitted debt is a contingent debt for
27   insolvency analysis purposes.     As set forth in depth in the
28   bankruptcy court’s published Amended Memorandum Decision,

                                      - 12 -
 1   substantial decisional authority supports the conclusion that the
 2   unstayed state court judgment is a noncontingent liability, and
 3   thus, its full amount must be included in the insolvency
 4   analysis.    See In re Imagine, 489 B.R. at 149-50.   DC Media cites
 5   none to the contrary.
 6        DC Media, however, criticizes the test utilized by the
 7   bankruptcy court to determine that the state court judgment was
 8   not “contingent” – whether all events giving rise to the
 9   liability had occurred.    DC Media argues that this test is
10   inappropriate because it was developed in statutory contexts
11   outside an insolvency determination; statutes that specifically
12   refer to contingent or noncontingent claims.12    And, because the
13   Code definition of “insolvent” refers to “fair valuation,”
14   DC Media reasons that “Congress intended the insolvency analysis
15   to be based on a consideration of all relevant and admissible
16   evidence.”    Appellant’s Opening Brief at 14.   DC Media argues
17   that the bankruptcy court, thus, was required to value the state
18   court claim13 at less than its face amount based on Debtor’s
19
          12
             In particular, such analysis arises in the context of
20   chapter 13 eligibility (§ 109(e)); eligibility as petitioning
     creditors in involuntary bankruptcy petitions (§ 303); and the
21   claims estimation process(§ 502(c)).
22        13
             In part, DC Media bases this argument on its
     interpretation of § 101(32A) as requiring “fair valuation” of
23   debts as well as property to determine insolvency. At oral
     argument in this appeal, DC Media’s counsel argued that the Ninth
24   Circuit supported this interpretation in Merkel (no citation
     provided). The question at issue in Merkel, was “the standard
25   for determining when a contingent obligation to pay is a
     ‘liability’ for purposes of determining insolvency under
26   26 U.S.C. § 108(d)(3).” Merkel v. Comm’r of Internal Revenue,
     192 F.3d 844, 846 (9th Cir. 1999). In its comparison of
27   insolvency analysis under the Internal Revenue Code section at
     issue and § 101(32A), the Ninth Circuit stated that in
28                                                          continue...
                                    - 13 -
 1   opinion that it would prevail on appeal, the contingency
 2   identified by DC Media.    Again, we disagree.
 3         It is well-settled that the amount of a contingent claim
 4   should be “determined in accordance with the probability that the
 5   contingency will occur.”    In re Merry-Go-Round Enters, Inc.,
 6   229 B.R. at 342 (citing Covey v. Commercial Nat’l Bank of Peoria,
 7   960 F.2d 657, 659-61 (7th Cir. 1992)).    The amount of a
 8   noncontingent debt, however, is the amount of the claim itself.
 9   Id.   DC Media’s argument that the state court judgment must be
10   discounted based on the Debtor’s opinion of success on appeal in
11   effect presumes that the debt is a contingent debt in the first
12   instance.
13         DC Media’s arguments against the established test for
14   determining a debt to be contingent are not persuasive.      We see
15   no reasoned or statutorily supported purpose to deviate, for
16   insolvency determination purposes, from the definition of
17   “contingent debt” as “one which the debtor will be called upon to
18   pay only upon the occurrence or happening of an extrinsic event
19   which will trigger the liability of the debtor to the alleged
20   creditor.”   In re Fostvedt, 823 F.2d at 306 (quotation omitted).
21   The Debtor’s liability for the state court judgment did not rely
22   “on some future extrinsic event to trigger liability.”      See
23   In re Nicholes, 184 B.R. at 88.    In the 90 days before the Debtor
24   filed its bankruptcy petition, the unstayed state court judgment
25
26         13
           ...continue
     § 101(32A), the “phrase ‘at a fair valuation’ may be read to
27   modify both ‘debts’ and ‘property,’ . . . .” 192 F.3d at 851.
     Nothing in the Merkel decision, however, supports discounting a
28   noncontingent claim.
                                    - 14 -
 1   was subject to collection by DC Media, and DC Media partially
 2   collected on the debt, via levy.14    The question is not whether
 3   the Debtor could ever pay the debt.    The question is whether
 4   Debtor was liable for the debt.   As of the filing of the Judgment
 5   Lien, Debtor was liable for the full amount of the Judgment, and
 6   the bankruptcy court, therefore, did not err when it determined,
 7   as a matter of law, that the Judgment was not contingent.
 8                               CONCLUSION
 9        Based on the foregoing, we AFFIRM.
10
11
12
13
14
15
16
17
18
19
20
21
22
23        14
             As set forth in the Amended Memorandum Decision, by
     DC Media’s calculations, which it based on the discounting
24   theory, the Judgment should be valued at $7,394.70, in part
     because Debtor had insufficient assets from which to pay it.
25   In re Imagine, 489 B.R. at 146. The logic of this argument is
     facially unsound, as its application would make a finding of
26   insolvency never possible - a liability could never exceed a
     debtor's assets. It is also inconsistent with the facts here,
27   considering that DC Media actually collected over $80,000 by
     prepetition levy and actively defended against the Debtor’s
28   appeal in the state appellate court.
                                   - 15 -
