                                                                              FILED
                           NOT FOR PUBLICATION                                DEC 11 2013

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



                           FOR THE NINTH CIRCUIT


In re: PETER DAVID KEMPF,                        No. 12-60015

              Debtor,                            BAP No. 11-1317


PETER DAVID KEMPF,                               MEMORANDUM*

              Appellant,

  v.

HITACHI CAPITAL AMERICA CORP.,

              Appellee.


                           Appeal from the Ninth Circuit
                            Bankruptcy Appellate Panel
            Case, II, Pappas, and Markell, Bankruptcy Judges, Presiding

                     Argued and Submitted November 8, 2013
                              Pasadena, California

Before: GOULD and BYBEE, Circuit Judges, and CHEN, District Judge.**



       *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Edward M. Chen, District Judge for the U.S. District
Court for the Northern District of California, sitting by designation.
      Peter David Kempf appeals from the Bankruptcy Appellate Panel’s (“BAP”)

judgment affirming the bankruptcy court’s finding that Kempf’s obligation to

Hitachi Capital America Corp. (“Hitachi”) was not dischargeable under 11 U.S.C.

§ 523(a)(2)(B). We have jurisdiction under 28 U.S.C. § 158(d). We review de

novo BAP decisions, and apply the same standard of review that the BAP applied

to the bankruptcy court’s ruling. Anastas v. Am. Sav. Bank (In re Anastas), 94 F.3d

1280, 1283 (9th Cir. 1996). We review for clear error findings of fact, including a

finding that a creditor reasonably relied on a materially false representation.

Lansford v. La Trattoria (In re Lansford), 822 F.2d 902, 904 (9th Cir. 1987).

Whether an amended pleading relates back to an original pleading is reviewed de

novo. Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 932 (9th Cir 2007). We

affirm.

      The bankruptcy court did not clearly err in finding that Hitachi reasonably

relied on the materially false representations contained in Kempf’s personal

financial statement. Hitachi conducted a transaction analysis, contacted references,

obtained a background report on Kempf, and requested Kempf’s tax returns to

confirm Kempf’s earning potential. The record supports the bankruptcy court’s

determination that Hitachi reliance was reasonable. See Candland v. Ins. Co. of N.

Am. (In re Candland), 90 F.3d 1466, 1471 (9th Cir. 1996) (recognizing that this


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Court requires “little investigation” where a personal financial statement contains

misrepresentations); In re Lansford, 822 F.2d at 904 (“Having intentionally misled

the [creditors] in an area he knew was important to them, it is unseemly for

[debtor] now to argue that he should be excused from section 523 because the

[creditors] believed him.”); see also Gertsch v. Johnson & Johnson (In re Gertsch),

237 B.R. 160, 170 (B.A.P. 9th Cir. 1999) (“[W]hen there is evidence of materially

fraudulent statements, little investigation is required for a creditor to have

reasonably relied on the representations.”).

      Contrary to Kempf’s assertion, the bankruptcy court did not clearly err in

finding that Kempf’s tax returns (and Form 3520s) did not render Hitachi’s

reliance unreasonable. The information in the Form 3520 was located towards the

back of each year’s tax returns and was not particularly conspicuous. Moreover,

the Form 3520 lists Julie Kempf as the U.S. owner and beneficiary of the Angel

Trust, but the form does not expressly call for the listing of every U.S. owner or

beneficiary. In addition, income from the Angel Trust was included in Kempf’s

joint tax return, and the Kempfs reside in a community property state. While the

tax returns and the fact that a trust was listed as an asset might have suggested

further investigation was warranted, in the context of all the documents presented

and reviewed, the tax return represented at best a “minor clue” that Kempf’s


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personal financial statement may have contained a misrepresentation. Gosney v.

Law (In re Gosney), 205 B.R. 418, 421 (B.A.P. 9th Cir.1996) (“The debtors cannot

simply rely on minor clues of falsity in financial statements that on the whole have

the appearance of being very complete and reliable and where [the creditor] took

reasonable steps to inquire as to the creditworthiness of the debtors.”). The returns

were not obviously inconsistent with the personal financial statement. See In re

Gertsch, 237 B.R. at 170 (“[A]lthough a creditor is not entitled to rely upon an

obviously false representation of the debtor, this does not require him or her to

view each representation with incredulity requiring verification.” (citation and

internal quotation marks omitted)).

      The bankruptcy court correctly determined that Hitachi’s first amended

complaint related back to its original complaint. Both the original and first

amended complaint alleged that Kempf engaged in fraudulent misrepresentations

made to secure the lease with Hitachi, and specifically in connection with Kempf’s

personal guaranty. Accordingly, the original complaint gave Kempf “fair notice of

the transaction, occurrence, or conduct” called into question by the first amended

complaint. See Union Pac. R.R. Co. v. Nev. Power Co., 950 F.2d 1429, 1432 (9th

Cir. 1991) (citation and internal quotation marks omitted); see also Williams v.

Boeing Co., 517 F.3d 1120, 1133 (9th Cir. 2008) (recognizing, for purposes of


                                          4
Rule 15(c), that “[c]laims arise out of the same conduct, transaction, or occurrence

if they ‘share a common core of operative facts’ such that the plaintiff will rely on

the same evidence to prove each claim” (citation omitted)).

      AFFIRMED.




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