                                                                           FILED
                            NOT FOR PUBLICATION                            AUG 25 2014

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT


In re: AMERICAN WAGERING, INC.,                  No. 12-60060

              Debtor,                            BAP No. 11-1549


MICHAEL RACUSIN,                                 MEMORANDUM*
DBA M. Racusin & Company,

              Appellant,

  v.

AMERICAN WAGERING, INC. And
LEROY’S HORSE & SPORTS PLACE,

              Appellees.


                           Appeal from the Ninth Circuit
                            Bankruptcy Appellate Panel
            Pappas, Jury, and Hollowell, Bankruptcy Judges, Presiding

                        Argued and Submitted August 15, 2014
                              San Francisco, California




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: McKEOWN and CLIFTON, Circuit Judges, and EZRA, District Judge.**

      Michael Racusin appeals the Bankruptcy Appellate Panel’s decision that he

is not entitled to interest under his Settlement Agreement with American

Wagering, Inc. (“AWI”) from the date AWI interpleaded stock until the date the

Ninth Circuit reversed the BAP’s decision that Racusin’s claim was

subordinated—the so called “gap period.” We reverse and remand.

      The plain language of the Settlement Agreement contemplates interest

during the gap period. Ringle v. Bruton, 86 P.3d 1032, 1039 (Nev. 2004)

(explaining that the plain language of an unambiguous contract controls). The

parties agree that § III(7) of the Settlement requires AWI to make cash payments to

Racusin. That section also requires AWI to pay eight percent interest per year on

the unpaid balance with an “initial payment . . . on the Effective Date of the

Restated Amended Plan,” March 11, 2005. No terms in the Settlement specifically

exclude the gap period from AWI’s obligation to pay eight percent interest on the

unpaid balance. The plain language of the Settlement therefore provides for gap

period interest. See Royal Indem. Co. v. Special Serv. Supply Co., 413 P.2d 500,

502 (Nev. 1966) (“Every word [of a contract] must be given effect if at all



       **
             The Honorable David A. Ezra, United States District Judge for the
District of Hawaii, sitting by designation.

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possible”). The term “BAP Appeal” in § III(8) says little about the parties’

intentions concerning such interest in the unusual circumstances of this case. See In

re Las Vegas Monorail Co., 429 B.R. 317, 332 (Bankr. D. Nev. 2010) (explaining

that a contract should be “interpreted as a whole without giving undue weight to

any particular clause beyond that which [is] reasonable”).

      The law of interpleader does not preclude gap period interest. AWI did not

interplead the full amount that it ultimately owed under the Settlement. See Michel

v. Eighth Judicial Dist. Court, 17 P.3d 1003, 1007 (Nev. 2001) (per curiam) (“the

disputed funds must be tendered to the court in their entirety” (emphasis added)). It

is immaterial that the BAP’s order subordinating Racusin’s claim was not stayed

while the subordination issue was on appeal to this court. Butler v. Eaton, 141 U.S.

240, 244 (1891) (explaining that a judgment reversed by a higher court is “without

any validity, force, or effect, and ought never to have existed”).

      Finally, the bankruptcy court abused its discretion in holding that equity

prevents Racusin from obtaining gap period interest. The time it took this court to

decide the subordination issue, not Racusin’s motion to stay the interpleader,

caused the gap period. Racusin caused the gap period only in the sense that he was

responsible for appealing the BAP subordination decision to this court. But equity

should not punish him for exercising a right to appeal that he expressly reserved in


                                           3
the Settlement, especially as this court ultimately concluded that his appeal had

merit. See Gelfgren v. Republic Nat. Life Ins. Co., 680 F.2d 79, 82 (9th Cir. 1982)

(explaining that an award of interest in a non-statutory interpleader action depends

on equitable considerations).

      We express no opinion on whether AWI materially breached the Settlement

Agreement. We hold only that AWI was required to pay interest during the gap

period. Accordingly, we reverse and remand for proceedings consistent with this

disposition.

      REVERSED AND REMANDED.




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