                                                            FILED
                                                             AUG 03 2012
 1                                                       SUSAN M SPRAUL, CLERK
                                                           U.S. BKCY. APP. PANEL
 2                                                         OF THE NINTH CIRCUIT


 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )       BAP No.    CC-11-1696-MkDKi
                                   )
 6   JAVIER TOVAR,                 )       Bk. No.    LA-10-41664-BR
                                   )
 7                  Debtor.        )       Adv. No.   LA-10-03016-BR
     ______________________________)
 8                                 )
     JAVIER TOVAR,                 )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )       MEMORANDUM*
11                                 )
     HERITAGE PACIFIC FINANCIAL,   )
12   LLC,                          )
                                   )
13                  Appellee.      )
                                   )
14
                            Argued and Submitted On
15                   July 20, 2012 at Pasadena, California
16
                             Filed – August 3, 2012
17
                 Appeal from the United States Bankruptcy Court
18                   for the Central District of California
19
              Honorable Barry Russell, Bankruptcy Judge, Presiding
20
     Appearances:     Christopher L. Hoglin of the Law Offices of
21                    Christopher L. Hoglin, P.C. for Appellant Javier
22                    Tovar; Brad A. Mokri of the Law Offices of Mokri &
                      Associates for Appellee Heritage Pacific
23                    Financial, LLC.
24
25   Before:    MARKELL, DUNN, and KIRSCHER, Bankruptcy Judges.

26
          *
           This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
28   have (see Fed. R. App. P. 32.1), it has no precedential value.
     See 9th Cir. BAP Rule 8013-1.

                                       1
 1                              INTRODUCTION
 2        Appellant-Debtor Javier Tovar (“Tovar”) appeals the
 3   bankruptcy court’s judgment against him with respect to a
 4   nondischargeability claim brought by Heritage Pacific Financial,
 5   LLC (“HPF”) pursuant to Section 523(a)(2)(B).1   For the reasons
 6   set forth below, we AFFIRM.
 7                                 FACTS2
 8        Some years prior to filing his bankruptcy petition, on
 9   November 15, 2006, Tovar executed a promissory note (“Note”) for
10   a secured, cash-out refinance loan (“Refinance Loan”) in the
11   amount of $120,000.   The collateral for the Note was a second
12   deed of trust on real property located in Sylmar, California
13   91342 (“Property”).   Both the Note and deed of trust were made in
14   favor of WMC Mortgage Corp. (“WMC”).   Tovar signed and submitted
15   a Uniform Residential Loan Application (“Loan Application”) for
16   the Refinance Loan.   Tovar subsequently defaulted on some or all
17
          1
18         Unless otherwise specified, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532; all
19   “Rule” references are to the Federal Rules of Bankruptcy
     Procedure, Rules 1001-9037; all “Civil Rule” references are to
20
     the Federal Rules of Civil Procedure; and all “Evidence Rule”
21   references are to the Federal Rules of Evidence.
          2
22         The Excerpts of Record provided by Tovar do not include all
     the documents listed in his Designation of Record and Statement
23   of Issues to be Presented on Appeal (“Designation of Record”).
24   Accordingly, we exercise our discretion to independently review
     the docket in Tovar’s above referenced adversary proceeding, and
25   documents electronically filed therein through the court’s CM/ECF
     system. See O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert,
26   Inc.), 887 F.2d 955, 957-58 (9th Cir. 1989) (appellate court may
27   take judicial notice of underlying bankruptcy records); Kirton v.
     Valley Health Sys. (In re Valley Health Sys.), 471 B.R. 555, 558
28   n.2 (9th Cir. BAP 2012) (same).

                                      2
 1   of the obligations relating to the Property, and the Property was
 2   sold at a non-judicial foreclosure sale.
 3           Tovar filed a voluntary chapter 7 bankruptcy petition on
 4   July 30, 2010.       On November 5, 2010, HPF initiated the adversary
 5   proceeding giving rise to the instant appeal by filing a
 6   nondischargeability complaint against Tovar.       In its complaint,
 7   HPF contended it now owned the Note; sought judgment in the
 8   amount of $120,000; and requested a determination that such
 9   judgment was nondischargeable within the meaning of Section
10   523(a)(2)(A) and (a)(2)(B) due to misrepresentations made when
11   the loan was originated.
12           The bankruptcy court scheduled a bench trial for November 9,
13   2011.       On July 26, 2011, the bankruptcy court entered an Order of
14   Representation of Evidence by Declaration For Court Trial
15   (“Evidence Order”).       This order required both parties to submit
16   witness testimony by declaration; conditioned the admission of
17   such declarations on the declarant’s presence at trial; and set
18   deadlines to submit the declarations, optional trial briefs and
19   evidentiary objections.3
20               The bankruptcy court next entered a Pre-Trial Order on
21   August 3, 2011, which the parties had jointly submitted to the
22   court.       The Pre-Trial Order established certain admitted facts,
23   and provided that only certain issues of law remained to be
24   litigated, including the elements of reasonable reliance and
25   intent to deceive under Section 523(a)(2)(B).       The parties also
26
             3
27         The order further provided that no other declarations or
     briefs were permitted, and that any oral testimony would be
28   limited to rebuttal testimony or cross-examination.

                                           3
 1   included a list of the exhibits they intended to introduce, and a
 2   list of witnesses they planned to call at trial.
 3        Pursuant to the Evidence Order, Tovar and HPF each submitted
 4   declarations; Tovar filed a declaration on his own behalf, and
 5   HPF submitted the declaration of Benjamin Ganter (“Ganter”),
 6   HPF’s Director of Client Relations and a Managing Partner.4
 7   Ganter’s declaration was accompanied by two exhibits:   a copy of
 8   the Loan Application and a copy of the Note.   Both parties filed
 9   trial briefs.   HPF also filed a supplemental exhibit list on
10   September 7, 2011, then filed an amended exhibit list (“Amended
11   Exhibit List”)5 the next day so as to include a copy of an
12   allonge (“Allonge”) to the Note.
13        In his declaration, Ganter stated that HPF purchased the
14
          4
15         HPF also submitted the declaration of Mark Schuerman. The
     admission of that declaration, however, is not presented for
16   review; Schuerman was not present at trial and thus, his
     declaration was not admitted into evidence.
17
          5
18         The Amended Exhibit List consisted of 13 exhibits:

19        1.    Loan Application;
          2.    Note;
20        3.    Deposition transcript;
21        4.    Borrower's Certification & Authorization
                (“Certification Form”);
22        5.    Deed of Trust;
          6.    Settlement Statement;
23        7.    Occupancy Statement;
24        8.    Amortization Schedule;
          9.    Latin Services Letter (“Latin Services Letter”);
25        10.   Tovar Landscape Design brochure (“Brochure”);
          11.   Wells Fargo Bank Statements (“Bank Statements”);
26        12.   Letter of Employment: To Support Purpose of Refinance
27              (“Letter in Support of Refinance”);
          13.   Allonge.
28

                                        4
 1   Refinance Loan from RP Financial Services, LLC (“RP Financial”),
 2   and that HPF was currently in possession of the Note as a result
 3   of that purchase.   Ganter further declared that through an
 4   independent investigation, HPF discovered a number of material
 5   misrepresentations on the Loan Application, including
 6   misrepresentations related to Tovar’s monthly income, his
 7   employment, and his intent to live on the Property.
 8        In its trial brief, HPF asserted that it was the current
 9   owner and holder of the Note, and accordingly, could enforce the
10   Note and all claims for relief against Tovar.   HPF further
11   asserted that the disputed elements under Section 523(a)(2)(A)
12   and (a)(2)(B) were established by the false statements Tovar made
13   in his Loan Application.   These included that the Loan
14   Application listed Tovar’s monthly income as $11,000; that he
15   owned Tovar Landscape Design and was self-employed through the
16   company; and that he lived at the Property.
17        In his trial declaration, Tovar stated that he did not read
18   or understand English, and that a loan officer named Jannet
19   Medina translated and filled out the Loan Application on his
20   behalf, directing him where to sign.   He also stated that he had
21   no knowledge as to the various documents that HPF asserted were
22   in his mortgage file.
23        Tovar’s trial brief countered HPF’s assertion of standing;
24   he argued that HPF had not shown that it was a “person entitled
25   to enforce” the Note pursuant to various provisions of the
26   California Commercial Code.   He further argued that because he
27   was an uneducated man who did not read, write, or speak English,
28   it was impossible for him to ensure the accuracy of the

                                      5
 1   statements made in the Loan Application.    Finally, he argued
 2   that HPF could not establish the reasonable reliance required by
 3   Section 523(a)(2)(B), as only WMC, the original lender, could
 4   have relied on Tovar’s Loan Application.
 5          Tovar also submitted evidentiary objections to Ganter’s
 6   declaration, and HPF’s Amended Exhibit List.    He objected to
 7   Ganter’s declaration pursuant to Evidence Rules 401, 402, 602 and
 8   701.   Tovar also objected to HPF’s exhibits pursuant to Evidence
 9   Rules 901, 1002, 802, and Civil Rule 37.
10          At the bench trial, the bankruptcy court heard testimony
11   from both Ganter and Tovar.   Ganter testified that HPF purchased
12   the Note from RP Financial at the beginning of 2009, as part of a
13   purchase of a pool of mortgage promissory notes.    He stated that
14   at the time of the purchase, HPF was a relatively small company,
15   and he was a key employee; thus, he personally oversaw the
16   transaction relating to the Note.     Ganter further testified
17   that HPF began investigating the Refinance Loan when it became
18   aware that Tovar had never actually lived on the Property.       He
19   also stated that the Allonge was always attached to the Note
20   (both the Note and Allonge were produced at trial).    Finally,
21   Ganter testified that HPF’s claim for $120,000 encompassed the
22   amount due under the Note, and did not include attorneys’ fees or
23   other costs and expenses incurred in litigating the
24   nondischargeability claims.
25          On cross examination, Tovar testified that it was his
26   signature that appeared on the Loan Application, the Note, the
27   Certification Form, and the Deed of Trust.    He further stated
28   that he never:   lived at the Property; earned monthly income in

                                       6
 1   the amount of $11,000; had a bank account at Wells Fargo Bank; or
 2   owned his own business.    Instead, Tovar testified that he
 3   purchased the Property for his brother as his brother could not
 4   finance a home on his own.
 5        Following cross examination testimony, the bankruptcy court
 6   overruled Tovar’s evidentiary objections.   In doing so, the
 7   bankruptcy court stated:
 8        I’m satisfied that these are the proper documents that
          were in the file. So, I’m going to overrule the
 9        objections. The question of discovery I’m not
          concerned about that. As far as the allonge it’s
10        pretty clear to me. I listened to the testimony. As
          far as the issue of the transfer that there’s no harm
11        on that. So, I’m going to admit the exhibits.
12   Trial Tr. 48:10-17, Nov. 9, 2011.
13        Following the conclusion of all testimony, the bankruptcy
14   court ruled in favor of HPF.   It found that Tovar’s testimony
15   lacked credibility, particularly in light of the other various
16   documents in Tovar’s mortgage file, including the Occupancy
17   Statement and Latin Services Letter.6   The bankruptcy court
18   directed HPF to prepare a proposed judgment, and proposed
19   findings of fact and conclusions of law.    After these were filed,
20   the court entered the judgment and findings of fact and
21   conclusions of law on December 21, 2011.
22        On December 7, 2011, Tovar filed the appeal presently before
23   the Panel.
24
25
          6
           The Latin Services Letter is an undated letter signed by a
26   woman (whose printed name is illegible) on behalf of Latin
27   Services, which states that she had prepared Tovar’s individual
     tax returns since 2004, and that he had been self-employed by
28   Tovar Landscaping Design during the two previous years.

                                       7
 1                               JURISDICTION
 2        The bankruptcy court had jurisdiction under 28 U.S.C.
 3   §§ 1334 and 157(b)(2)(I).   If the judgment is a final order, then
 4   we have jurisdiction under 28 U.S.C. § 158(b).
 5        The only question we see to the finality of the judgment on
 6   appeal is that it only refers to the Section 523(a)(2)(B) claim,
 7   notwithstanding that the complaint was brought pursuant to both
 8   Section 523(a)(2)(A) and Section 523(a)(2)(B).
 9        In response to a clerk’s order from this Panel requesting an
10   explanation as to why the judgment was final, Tovar filed a
11   written response in which he asserted that the elements of
12   Section 523(a)(2)(B) essentially encompassed the elements of
13   Section 523(a)(2)(A); and thus, the judgment was final.   This, of
14   course, is wrong, as well as unhelpful.
15        Not relying solely on Tovar, a motions panel considered the
16   matter, and on May 25, 2012, entered an order deeming the
17   judgment to be a final disposition of the adversary proceeding.
18   The motions panel determined that judgment on one of two mutually
19   exclusive claims for relief renders the claim not addressed
20   denied, and that no further action was necessary.   See McCrary v.
21   Barrack (In re Barrack), 217 B.R. 598, 605 (9th Cir. BAP 1998)
22   (“It is well established that [Section 523(a)(2)(A) and
23   523(a)(2)(B)] are mutually exclusive.”).   Although we are not
24   bound by determinations made by the motions panel, see Couch v.
25   Telescope Inc., 611 F.3d 629, 632 (9th Cir. 2010), here, we agree
26   with them, and hold that the judgment is a final order.
27   Therefore, we have jurisdiction over this appeal.
28

                                      8
 1                                   ISSUES7
 2   1.   Whether HPF established its standing as a real party in
 3        interest in relation to pursuing its nondischargeability
 4        claims against Tovar?
 5   2.   Whether the bankruptcy court erred by overruling Tovar's
 6        evidentiary objections with respect to the Allonge?
 7   3.   Whether the bankruptcy court erred by overruling Tovar's
 8        evidentiary objections with respect to Ganter’s declaration
 9        and testimony?
10   4.   Whether the bankruptcy court erred by finding that Tovar
11        obtained the Refinance Loan through fraud, and that the debt
12        was nondischargeable under Section 523(a)(2)(B)?
13                          STANDARDS OF REVIEW
14        Standing is a legal issue that the Panel reviews de novo.
15   Veal v. Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R.
16   897, 906 (9th Cir. BAP 2011).
17        The bankruptcy court's evidentiary rulings, such as
18   admission of testimony, are reviewed for abuse of discretion. See
19   Int’l Ass’n of Firefighters v. City of Vallejo (In re City of
20   Vallejo), 408 B.R. 280, 291-92 (9th Cir. BAP 2009).     Moreover, an
21   erroneous evidentiary ruling will only be reversed if that error
22   was prejudicial. Id. at 292.
23
          7
24         In his Designation of Record, Tovar presented 33 enumerated
     issues for review on appeal. Tovar, however, did not address a
25   majority of these issues in his opening brief. The Panel thus
     declines to address any issues that Tovar did not fully argue in
26   his brief. See Padgett v. Wright, 587 F.3d 983, 986 n.2 (9th
27   Cir. 2009)(per curiam)(appellate courts “will not ordinarily
     consider matters on appeal that are not specifically and
28   distinctly raised and argued in appellant's opening brief.”).

                                       9
 1        Abuse of discretion is determined under a two-prong inquiry.
 2   United States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009)
 3   (en banc).    The Panel first determines de novo whether the
 4   bankruptcy court applied the correct legal standard.    See id.       If
 5   the bankruptcy court failed to do so, it necessarily abused its
 6   discretion.   See id. at 1262.
 7        If, however, the bankruptcy court applied the correct legal
 8   standard, the inquiry moves to the second prong and the Panel
 9   examines whether the bankruptcy court’s factual findings were
10   clearly erroneous.    See id. at 1262.   The bankruptcy court's
11   factual findings are clearly erroneous if they are "illogical,
12   implausible, or without support in inferences that may be drawn
13   from the record."    See id. at 1263 (internal quotation marks
14   omitted).
15        As indicated above, factual issues, such as credibility and
16   the authenticity of documents, are reviewed under the clearly
17   erroneous standard.   Rule 8013(a).   Retz v. Samson (In re Retz),
18   606 F.3d 1189, 1196 (9th Cir. 2010) (citing Hinkson, 585 F.3d at
19   1261-62 & n.21).    Under this standard, when there are two
20   permissible views of the evidence, the bankruptcy court’s choice
21   between them cannot be clearly erroneous.    Palmdale Hills Prop.,
22   LLC v. Lehman Commerical Paper, Inc. (In re Palmdale Hills Prop.,
23   LLC), 457 B.R. 29, 40 (9th Cir. BAP 2011) (citing Anderson v.
24   City of Bessemer City, N.C., 470 U.S. 564, 574 (1985)).
25        Many of the issues in this case – including whether a
26   creditor reasonably relied on a debtor’s written statement, and
27   whether a debtor made that statement with intent to deceive –
28   are factual questions that are reviewed for clear error.      Smith

                                      10
 1   v. Lachter (In re Smith), 242 B.R. 694 (9th Cir. BAP 1999); see
 2   also Candland v. Ins. Co. of N. Am. (In re Candland), 90 F.3d
 3   1466, 1469 (9th Cir. 1996).
 4                                 DISCUSSION
 5   I.   HPF Established its Standing as a Real Party in Interest to
          Pursue its Nondischargeability Claims Against Tovar.
 6
          Tovar challenges whether HPF established its standing as a
 7
     “real party in interest” pursuant to Civil Rule 17(a)(1).        He
 8
     contends that HPF never provided proof that it was the current
 9
     holder of the Note, and thereby, that it was a “person entitled
10
     to enforce” the note under California commercial law.
11
          Standing is required in every federal case and determines
12
     whether the court may entertain the proceeding.      In re Veal,
13
     450 B.R. at 906.   Standing has both constitutional and prudential
14
     dimensions.    See Edwards v. Wells Fargo Bank, N.A. (In re
15
     Edwards), 454 B.R. 100, 103 (9th Cir. BAP 2011).      In turn,
16
     prudential standing implicates the real party in interest
17
     requirement under Civil Rule 17.8      In re Veal, 450 B.R. at 907.
18
     A party requesting relief must establish that it is the real
19
     party in interest under applicable substantive law.      See id. at
20
     907-08.
21
          In mortgage cases involving a negotiable instrument secured
22
     by real property, the substantive law is generally supplied by
23
     the Uniform Commercial Code (“UCC”), as adopted or implemented by
24
     state law.    See id. at 908-10 (discussing Article 3 and Article 9
25
     of the UCC).   Under this construct, a party may establish its
26
27        8
           Civil Rule 17 applies in bankruptcy proceedings through
28   Rules 7017 and 9014(c).

                                       11
 1   standing by showing it is the “person entitled to enforce” the
 2   promissory note as that phrase is defined by UCC Article 3.          See
 3   id.     When a person is not the original payee identified on the
 4   note, the person establishes that it is a “person entitled to
 5   enforce” the note by showing it is either a holder9 of the note,
 6   or a nonholder in possession of the note with the rights of a
 7   holder.10       See Cal. Com. Code § 3301.11
 8           Negotiation is defined as a “transfer of possession, whether
 9   voluntary or involuntary, of an instrument by a person other than
10   the issuer to a person who thereby becomes its holder.”        Id.
11   § 3201(a).       When the note is payable to an identified person,
12   “negotiation requires transfer of possession of the instrument
13   and its endorsement by the holder.”        See id. § 3201(b) (emphasis
14   added).       An endorsement is “a signature . . . that alone or
15   accompanied by other words is made on an instrument for the
16   purpose of (1) negotiating the instrument . . . .”       Id.
17   § 3204(a).       Once a note is negotiated, the subsequent party
18   becomes a holder, and thereby, a person entitled to enforce the
19   note.        See id. §§ 3201(a); 1201(b)(21); 3301.
20           It is undisputed here that WMC was the original payee on the
21
22           9
              See Cal. Com. Code § 1201(b)(21) (defining “holder”).
23           10
           A person may also be a person entitled to enforce if they
24   are not in possession of the negotiable instrument but are
     entitled to enforce pursuant to Cal. Com. Code §§ 3309 or
25   3418(d).
26           11
           Application and analysis under the California Commercial
27   Code is appropriate here given that the situs of the Property is
     California and pursuant to the governing law provision in the
28   Deed of Trust.

                                          12
 1   Note.    Because HPF was not the original payee, it had to show it
 2   was a person entitled to enforce the Note, either as a “holder”
 3   of the Note, or a “nonholder” in possession of the Note who has
 4   the rights of a holder.    See id. § 3301.
 5           The court found that the evidence established that the Note
 6   was properly negotiated by WMC to RP Financial.      The last page of
 7   the Note contains a stamp endorsing the Note to RP Financial.
 8   There was no evidence presented that this was made for a purpose
 9   other than endorsement.    As such, this constituted a proper
10   endorsement to RP Financial.    See id. § 3204(a).     Ganter
11   testified that HPF took possession of the Note when it purchased
12   the Note from RP Financial, and thus, it is inferred
13   that transfer of possession occurred as RP Financial was not the
14   original holder.    Therefore, the Note was properly negotiated to
15   RP Financial.    See id. § 3201(b).
16           The inquiry thus moves to whether the Note was properly
17   negotiated or transferred from RP Financial to HPF.      This, in
18   turn, requires examination of the validity of the Allonge, since
19   it is the paper that bears the signature of RP Financial
20   indicating a negotiation to HPF.       Tovar argues that HPF failed to
21   show that the Allonge was affixed to the Note, as it must be to
22   effectuate a valid negotiation.    Cal. Comm. Code § 3204(a) (“For
23   the purpose of determining whether a signature is made on an
24   instrument, a paper affixed to the instrument is a part of the
25   instrument.”).    He also continues to challenge the effect of the
26   Allonge as it was undated and unrecorded.
27           Contrary to Tovar’s argument, there is nothing in the UCC or
28   the California Commercial Code requiring that an allonge be dated

                                       13
 1   or recorded with the county recorder.   Tovar advances no
 2   substantive argument or case law to support this proposition.
 3   Nor, at least since the 1992 amendments to UCC Article 3, is it
 4   relevant that there may be space on a promissory note for
 5   additional endorsements.   See Comment 1 to UCC § 3-204 ("An
 6   indorsement on an allonge is valid even though there is
 7   sufficient space on the instrument for an indorsement.").
 8          Here, the Allonge attached to the Amended Exhibit List is a
 9   single exhibit titled “Allonge to Promissory Note.”   The document
10   identifies Tovar, the Property and his loan number.   There is
11   language stating “Without Recourse, Pay to the Order of: Heritage
12   Pacific Financial, LLC d/b/a/ Heritage Pacific Financial,”
13   followed by the signature of Richard A. Panter, on behalf of RP
14   Financial.   If affixed to the Note, this information would be
15   sufficient to constitutes an endorsement from RP Financial to
16   HPF.   See Cal. Com. Code § 3204(a).
17          According to Ganter’s testimony at the trial, the Note and
18   Allonge were in HPF’s possession since its purchase of the Note,
19   and in fact, were both produced at the trial during Ganter’s
20   cross-examination.   This infers that transfer of possession
21   occurred as HPF was not the prior holder of the Note.
22          Even so, in order for RP Financial to have properly
23   negotiated the Note to HPF through the Allonge, the Allonge must
24   have been affixed to the Note.   See id. § 3204 ("For the purpose
25   of determining whether a signature is made on an instrument, a
26   paper affixed to the instrument is a part of the instrument.").
27   The record before us raises some questions as to this.    The Note
28   attached to Ganter’s declaration and HPF’s Amended Exhibit List

                                      14
 1   contains two faint hole punch marks at the top of the document.
 2   The Allonge attached to the Amended Exhibit List, however, does
 3   not bear any indication of similar punch hole marks.    There are
 4   no other visible marks that are consistent between the copies of
 5   the Note in the record and the Allonge.
 6           Even slightly more perplexing, the copy of the Allonge
 7   that Tovar included in his Excerpts of Record clearly bears
 8   visible hole punch marks at the top of the document.    This
 9   seemingly appears to be consistent with the facial marks on the
10   copy of the Note.    Tovar’s copy of the Allonge, however, does not
11   contain ECF markings at the top of the document, which indicates
12   that it was not filed on the docket.    In fact, Tovar’s copy
13   appears to be different than HPF’s copy of the Allonge attached
14   to the Amended Exhibit List.    It is unclear where Tovar obtained
15   his copy of the Allonge.
16            While these issues may be debated, it is undisputed that
17   the Allonge was produced and examined by the bankruptcy court at
18   trial.    Ganter testified that the Allonge was always affixed to
19   the Note.    Tovar’s counsel examined the Allonge, and did not
20   address any issues as to inconsistent facial marks between the
21   Note and Allonge; in fact, Tovar’s counsel only inquired as to a
22   post-it note that was apparently affixed to the Allonge.    Based
23   on the testimony and production of the Note and Allonge at trial,
24   it was reasonable to assume that the Allonge was affixed to the
25   Note.    And that finding is implicit in the bankruptcy court’s
26   ruling, which is entitled to stand unless clearly erroneous, as
27   it goes to identity or authenticity.    See Rule 8013(a).   On this
28   record, with various possible inferences, we cannot say the

                                       15
 1   bankruptcy court erred in picking one of the possible scenarios
 2   and validating the Allonge.    Anderson, 470 U.S. at 574; In re
 3   Palmdale Hills Prop., LLC, 457 B.R. at 40.
 4         For the reasons stated above, the bankruptcy court’s finding
 5   that the Note was properly negotiated from RP Financial to HPF
 6   was not clearly erroneous.    The bankruptcy court was thereby
 7   entitled to treat HPF as the “holder” of the Note, and thus, the
 8   “person entitled to enforce” the instrument.    See Cal. Com. Code
 9   §§ 3201(a); 1201(b)(21); 3301.    In turn, this conferred the
10   status of real party in interest on HPF pursuant to In re Veal.
11   Therefore, HPF had standing to pursue its nondischargeability
12   action against Tovar.
13   II.   The bankruptcy court did not err in overruling Tovar’s
           evidentiary rulings.
14
           A.   The Allonge
15
16         Tovar focuses a significant portion of his appeal on the
17   admission of the Allonge into evidence at trial.    He contends
18   that the bankruptcy court erred by admitting the Allonge when HPF
19   failed to properly authenticate or satisfy the best evidence rule
20   under the Federal Rules of Evidence.    Tovar also contends that
21   the bankruptcy court erred by admitting the Allonge when HPF
22   failed to produce the document pursuant to the Evidence Order, or
23   during the discovery period.
24              1.     Best Evidence Rule – Evidence Rule 1002
25         Evidence Rule 1002 provides that “[a]n original writing,
26   recording, or photograph is required in order to prove its
27   content unless these rules or a federal statute provides
28   otherwise.”     A copy is admissible to the same extent as an

                                       16
 1   original “unless a genuine question is raised about the
 2   original's authenticity or the circumstances make it unfair to
 3   admit the duplicate.”   Fed. R. Evid. 1003.
 4        Tovar argues that HPF failed to prove that the Allonge was
 5   affixed to the Note, particularly when the Note was originally
 6   executed in 2006; thus, without a “certified copy of the
 7   original, in its complete form,” the Allonge was inadmissible to
 8   show that HPF owned the Note.   Appellant’s Opening Brief (“Op.
 9   Br.”) at 12.
10        The bankruptcy court admitted the Allonge into evidence
11   following Ganter’s testimony.   Contrary to Tovar’s arguments, the
12   Best Evidence Rule does not require that HPF have submitted a
13   certified or dated copy of the Allonge.   The Allonge was produced
14   at trial, subject to inspection, and Ganter was available for
15   questioning.    Although the bankruptcy court did not explicitly
16   state the basis for doing so, all of the elements were present to
17   allow admission of the Allonge, and Tovar’s misplaced and
18   irrelevant best evidence objection was not a bar to admitting the
19   Allonge.
20              2.    Authentication – Evidence Rule 901
21        Evidence Rule 901 provides that a “proponent must produce
22   evidence sufficient to support a finding that the item is what
23   the proponent claims it is.”    Fed. R. Evid. 901(a).   A witness
24   with knowledge of the item can authenticate it by testifying that
25   the “item is what it is claimed to be.”   Fed. R. Evid. 901(b)(1).
26   The proponent of the evidence “need make only a prima facie
27   showing of authenticity.”   See United States v. Iribe, 564 F.3d
28   1155, 1159 (9th Cir. 2009) (internal citation and quotation marks

                                      17
 1   omitted).
 2        Tovar argues that “unrecorded documents, which are required
 3   to be recorded, fail to satisfy the authentication requirements
 4   of [Evidence Rule] 901 or the self-authenticating provisions of
 5   [Evidence Rule] 902.”   Op. Br. at 13.    Once again, he argues that
 6   without a “certified copy of the original, in its complete form,”
 7   the Allonge was inadmissible to show that HPF owned the Note.
 8   Id. at 14.
 9        This is simply not the law.      Indeed, under state substantive
10   law related to negotiable instruments, a note’s “signature[s are]
11   presumed to be authentic and authorized” without the need for
12   certifications of signatures.    Cal. Comm. Code § 3308(a); see
13   also Comment 1 to UCC § 3-308.    As previously stated, the
14   bankruptcy court admitted the Allonge into evidence following
15   Ganter’s testimony.   Ganter testified that the Allonge had always
16   been affixed to the Note.   Moreover, he testified that HPF was a
17   relatively small company at the time that it purchased the Note,
18   and he was a key employee; thus, he personally oversaw the
19   transaction relating to the Note.     As such, Ganter sufficiently
20   testified that the document was what HPF claimed it was – an
21   allonge to the Note executed by Tovar.
22        Contrary to Tovar’s arguments, Evidence Rule 901 does not
23   require that HPF have submitted a certified or dated copy of the
24   Allonge.    Although the bankruptcy court did not explicitly state
25   the basis for doing so, the record supports that the Allonge was
26   properly admitted pursuant to Evidence Rule 901.
27
28

                                      18
 1               3.   Untimely Submission
 2        Tovar next argues that the bankruptcy court erred by
 3   admitting the Allonge into evidence when HPF submitted the
 4   exhibit one day after the deadline established by the court.
 5        It is unclear from the record whether the bankruptcy court
 6   required that the exhibits be filed on the docket, and if so,
 7   whether it imposed a deadline to do so.   Local Bankruptcy
 8   Rule12 7016 states that a joint pre-trial order must include an
 9   attached list of exhibits that each party intends to offer at
10   trial.    See LBR 7016(b)(2)(D) (C.D. Cal).   This rule, however,
11   does not require that the parties file their actual exhibits on
12   the docket.13
13        Tovar and HPF each listed their exhibits in the Pre-Trial
14   Order entered by the bankruptcy court on August 3, 2011.     It
15   appears that HPF supplemented its exhibit list on September 7,
16   2011, and then filed its Amended Exhibit List the following day
17   on September 8, 2011.   The Evidence Order established deadlines
18   for HPF and Tovar to submit their declarations, optional trial
19   briefs, or optional evidentiary objections to the bankruptcy
20   court in advance of trial.   In terms of other evidence, the
21   Evidence Order further provided that “[t]he only additional
22   evidence a party may offer at trial is true rebuttal evidence.”
23   EOR, Ex. 9 ¶ 2(e).
24
25        12
           This is in reference to the Local Bankruptcy Rules for the
     United States Bankruptcy Court for the Central District of
26
     California.
27        13
           In fact, we observe that Tovar did not file his exhibits
28   on the docket.

                                      19
 1        Even assuming that the Pre-Trial Order or Evidence Order
 2   established some sort of deadline to identify or file exhibits,
 3   the bankruptcy court generally has discretion during discovery to
 4   admit evidence if there is no prejudice to the other party.
 5   Although Tovar argues that the Allonge was submitted past the
 6   “deadline,” HPF amended its exhibit list just one day after its
 7   declarations were due pursuant to the Evidence Order.   Given that
 8   Tovar still had over one month to submit evidentiary objections,
 9   and that Tovar actually did so, it does not appear that he
10   suffered any prejudice.    Accordingly, the record supports that
11   the court properly admitted the Allonge despite Tovar’s objection
12   based on HPF’s purported untimeliness.
13              4.   Civil Rule 37
14        In relevant part, Civil Rule 37(d) provides that a court may
15   issue appropriate sanctions where a party fails to serve its
16   answers, objections, or written responses to interrogatories
17   under Civil Rule 33, or to requests for production under Civil
18   Rule 34.   Fed. R. Civ. P. 37(d)(A)(ii).
19        Tovar argues that the bankruptcy court erred by admitting
20   the Allonge under Civil Rule 37 when HPF failed to produce the
21   Allonge despite Tovar’s discovery requests.   Admittedly, HPF
22   initiated the nondischargeability action in November 2010; yet,
23   the record reflects that the Allonge was first identified as an
24   exhibit in September 2011, just two months prior to trial.     It
25   appears that none of HPF’s pleadings or other documents include
26   or refer to the Allonge prior to filing the Amended Exhibit List.
27        Even so, HPF responded to Tovar’s interrogatories and
28   requests for production.   This is not a situation where HPF

                                      20
 1   refused to provide any documents prior to trial.   See Advisory
 2   Committee’s Notes to Fed. R. Civ. P. 37(d)(1970) (Civil Rule
 3   37(d) is concerned with “total noncompliance . . . [that] may
 4   impose severe inconvenience or hardship on the discovering party
 5   and substantially delay the discovery process.”) (emphasis
 6   added).   Tovar still filed his evidentiary objections within the
 7   deadline established in the Evidence Order.
 8        Moreover, Tovar initially raised this issue in his
 9   evidentiary objections to HPF’s exhibits; he did not
10   independently move for sanctions under Civil Rule 37(d), nor move
11   to exclude the Allonge under Civil Rule 37(c).   Although HPF
12   should have identified the Allonge as an exhibit sooner than two
13   months prior to trial, the record supports the bankruptcy court’s
14   ruling.
15        In conclusion, the bankruptcy court did not abuse its
16   discretion on its evidentiary rulings as to the Allonge.
17        B.     Ganter’s Declaration and Trial Testimony - Evidence
                 Rule 602
18
19        Tovar next argues that the bankruptcy court erred by
20   admitting Ganter’s declaration and testimony at trial when Ganter
21   lacked personal knowledge with respect to the Note and its
22   transfer.   He asserts that whether the Note was transferred, and
23   the effect of any such transfer, is a conclusion of law that
24   Ganter lacked knowledge to testify as to.   Evidence Rule 602
25   provides that “[a] witness may testify to a matter only if
26   evidence is introduced sufficient to support a finding that the
27   witness has personal knowledge of the matter.”
28        Ganter testified at the trial that the Refinance Loan was

                                      21
 1   purchased by HPF in 2009.   At that time, HPF consisted of nine or
 2   ten employees, and Ganter was then a key employee who was
 3   personally involved with HPF’s transactions and purchases of
 4   secondary mortgages such as the Refinance Loan.   The bankruptcy
 5   court was well within its discretion in finding that this
 6   testimony established sufficient personal knowledge as to HPF’s
 7   purchase of the Note.
 8          C.   Relevance of Exhibits – Evidence Rules 401 and 402
 9          Tovar finally argues that the bankruptcy court erred by
10   admitting HPF’s 13 exhibits pursuant to Evidence Rules 401 and
11   402.   He asserts that extrinsic evidence is inadmissible under
12   the Federal Rules of Evidence to determine an action, that HPF
13   failed to cite to any exhibits in its trial brief, and thus, it
14   failed to demonstrate the probative value of the exhibits.   He
15   concludes that the bankruptcy court should have excluded all of
16   HPF’s exhibits based on the lack of probative value or relevancy.
17          Tovar, however, did not make these evidentiary objections
18   before the bankruptcy court.   Instead, he perfunctorily attempts
19   to advance these arguments for the first time on appeal.    To the
20   extent that he lodged such objections against Tovar’s declaration
21   and testimony before the bankruptcy court, Tovar does not make
22   any substantive arguments on that issue in his brief.   Therefore,
23   the Panel declines to address this issue.   See Padgett, 587 F.3d
24   at 986 n.2 (appellate courts “will not ordinarily consider
25   matters on appeal that are not specifically and distinctly raised
26   and argued in appellant's opening brief.”).
27
28

                                      22
 1   III. The bankruptcy court did not err in determining that the
          Refinance Loan was Nondischargeable Pursuant to 11 U.S.C.
 2        § 523(a)(2)(B).
 3        Lastly, Tovar argues that the bankruptcy court erred by
 4   finding that he committed fraud when he applied for and obtained
 5   the Refinance Loan, and that this fraud gave rise to a
 6   nondischargeable debt within the meaning of Section 523(a)(2)(B).
 7        In relevant part, Section 523(a)(2)(B) provides that a debt
 8   is nondischargeable if the debtor obtained "money, property,
 9   services, or an extension, renewal, or refinancing of credit" by
10   using a statement in writing-
11        (I)       that is materially false;
          (ii)      respecting the debtor's or an insider's financial
12                  condition;
          (iii)     on which the creditor to whom the debtor is liable
13                  for such money, property, services, or credit
                    reasonably relied; and
14        (iv)      that the debtor caused to be made or published with
                    intent to deceive . . . .
15
16   11 U.S.C. § 523(a)(2)(B).
17        The first two elements were not contested at trial, and are
18   not contested on appeal.    That is, we take as given that the
19   documents at issue were materially false, and were made with
20   respect to Tovar’s financial condition.
21        Tovar maintains that the bankruptcy court erred in finding
22   that HPF satisfied the last two elements of Section 523(a)(2)(B);
23   namely, that Tovar acted with the requisite intent to deceive the
24   original lender, and that HPF satisfied the reasonable reliance
25   requirement.    These arguments are addressed in reverse order.
26        A.      Reasonable Reliance
27        For the purposes of Section 523(a)(2)(B)(iii), a creditor/
28   assignee is not required to independently establish its own

                                        23
 1   reasonable reliance.    See New Falls Corp. v. Boyajian (In re
 2   Boyajian), 367 B.R. 138, 141-44 (9th Cir. BAP 2007), aff'd,
 3   564 F.3d 1088 (9th Cir. 2009).   Rather, the creditor need only
 4   establish reasonable reliance by the original lender who extended
 5   credit to the debtor.   See id. at 145-46.   Accordingly, the only
 6   party’s reliance at issue here is that of WMC, the original
 7   lender.
 8        Tovar first argues that information as to WMC’s lending
 9   practices was necessary to determine whether WMC relied on the
10   Loan Application.   He contends that despite his discovery
11   requests for this information, HPF failed to produce any of this
12   information, including whether WMC adhered to those practices on
13   Tovar’s application.    HPF counters that the Loan Application is
14   in and of itself sufficient to establish WMC’s reasonable
15   reliance, as it represented Tovar’s financial and employment
16   information when WMC approved and disbursed the Refinance Loan.
17        “Reasonable reliance” is not defined by the Code, but is
18   analyzed under a “prudent person” test, which “courts can apply
19   without additional help.”   Cashco Fin. Servs., Inc. v. McGee
20   (In re McGee), 359 B.R. 764, 774 (9th Cir. BAP 2006) (internal
21   citations omitted).    While a creditor cannot claim reliance on
22   representations that are obviously false, “minor clues of falsity
23   in financial statements that on the whole have the appearance of
24   being very complete and reliable . . .” do not negate reasonable
25   reliance.   Gosney v. Law (In re Gosney), 205 B.R. 418, 421 (9th
26   Cir. BAP 1996); Gertsch v. Johnson & Johnson, Fin. Corp. (In re
27   Gertsch), 237 B.R. 160, 170 (9th Cir. BAP 1999).    “[W]hen there
28   is evidence of materially fraudulent statements, little

                                      24
 1   investigation is required for a creditor to have reasonably
 2   relied on the representations.”    In re Gertsch, 237 B.R. at 170
 3   (citing In re Gosney, 205 B.R. at 421).     This determination is
 4   made on a case-by-case basis, based on the totality of the
 5   circumstances.   In re McGee, 359 B.R. at 774.
 6        Here, in rendering its decision, the bankruptcy court did
 7   not explicitly state its findings as to reasonable reliance.
 8   During Tovar’s closing argument at trial, however, the bankruptcy
 9   court referred to various loan documents with respect to the
10   element of reliance.    Specifically, Tovar’s counsel stated:
11        WMC’s standard of reliance would have been to verify
          the information that was being provided on the stated
12        income loan. There’s been no evidence produced showing
          that WMC took any of those steps to confirm the
13        information.
14   To which the bankruptcy court responded:
15        What about the additional documents that were done
          about three weeks later? They’re in the file. That is
16        the statement, the bank statement, the statement as to
          residency, the -- let’s see there were four of them.
17        There was the occupancy statement. There’s the bank
          statement. There’s the Latin services statement, and
18        then there’s that landscaping brochure.
19   [Trial Tr. 58:12-23.]
20        We also observe that the record contains a Certification
21   Form, which Tovar signed on November 15, 2006.    In this document,
22   Tovar certified that he applied for a mortgage loan from WMC; and
23   that by applying for the loan, he “completed a loan application
24   containing various information on the purpose of the loan, the
25   amount and source of the down payments, employment and income
26   information, and assets and liabilities.”    Pl.’s Ex. 11 at 193.
27   Tovar also certified that he understood and agreed that WMC
28   reserved the right to change the mortgage loan review process to

                                       25
 1   a full documentation program,” including “verifying the
 2   information provided on the application with the employer and/or
 3   financial institution.”    Id.
 4           Contrary to Tovar’s arguments, a creditor’s actual
 5   verification of information is not an explicit requirement as to
 6   reasonable reliance.    See In re Smith, 242 B.R. at 702 (“[W]hen
 7   there is evidence of materially fraudulent statements, little
 8   investigation is required for a creditor to have reasonably
 9   relied on the representations.”).      Nothing in the record suggests
10   that WMC did not adhere to normal business practices, or that
11   Tovar’s misrepresentations were blatantly apparent in the Loan
12   Application.    Based on the totality of the circumstances, the
13   record supports the bankruptcy court’s inference of reasonable
14   reliance on the Loan Application and other documents in the
15   record.
16           B.   Intent to Deceive
17           Tovar next argues that the bankruptcy court erred in finding
18   that he satisfied the requisite intent to deceive WMC (and
19   subsequently HPF) when he applied for and obtained the Refinance
20   Loan.
21           For the purposes of Section 523(a)(2)(B), intent is
22   “established by showing either actual knowledge of the falsity of
23   a statement, or reckless disregard for its truth . . . .”     In re
24   Gertsch, 237 B.R. at 167.
25           The bankruptcy court did not find Tovar’s testimony
26   credible.    It specifically noted that in order to make Tovar’s
27   account plausible, it would have to find that WMC essentially
28   fabricated various documents in Tovar’s mortgage file – including

                                       26
 1   a brochure for a business that Tovar said existed on his Loan
 2   Application but which was fictitious:
 3           I mean that portion of it weighs heavily in my mind
             that it would have been an extraordinary event
 4           happening at the lender to prepare to go through and
             prepare a brochure for Tovar Landscape Design, to
 5           prepare all that. I just can’t believe that that
             actually happened.
 6
 7   [Trial Tr.    64:12-23.]
 8   The court further noted:
 9           Mr. Tovar added a dimension here to not only saying he
             was going to live in there, it was clear this loan
10           would never have been made had they known. That's a
             pretty basic thing for the very reason if you have no
11           interest in it yourself or not living there, you're
             less likely to perform.
12
13   [Trial Tr. 65: 4-9.]
14       The bankruptcy court thus found that Tovar submitted the
15   Loan Application with the requite intent to deceive based on a
16   number of factors: that Tovar Landscape Design never existed;
17   that Tovar’s monthly stated income was never $11,000; and that
18   Tovar never intended to live on the Property.    The court further
19   determined that other documents in Tovar’s loan file, such as the
20   Latin Services Letter and Brochure, similarly demonstrated
21   Tovar’s intent to deceive.
22           We are unpersuaded by Tovar’s contention that he was not
23   aware of the misrepresentations stated in the Loan Application,
24   or the other documents submitted or contained in his mortgage
25   file.    To the extent that there is any validity to his
26   allegations, Tovar nonetheless executed various legal documents
27   and certified that the information made therein was correct and
28   true.    This is no different than signing and submitting a

                                       27
 1   bankruptcy petition under the penalty of perjury, regardless of
 2   whether the debtor is an individual with limited English
 3   proficiency.   Ultimately, the person signing a document bears the
 4   legal responsibility as to the statements made therein.
 5        Based on this record, the bankruptcy court did not err in
 6   finding that Tovar made written statements with the intent to
 7   deceive.   We therefore conclude that the bankruptcy court did not
 8   err in determining that HPF’s claim was nondischargeable under
 9   Section 523(a)(2)(B).
10                               CONCLUSION
11        For the reasons set forth above, the judgment of the
12   bankruptcy court is AFFIRMED.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

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