                                                           FILED
                                                            FEB 14 2012
                                                        SUSAN M SPRAUL, CLERK
 1                                                        U.S. BKCY. APP. PANEL
                                                          OF THE NINTH CIRCUIT
 2
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                            )    BAP Nos. CC-11-1269-PaMkCa and
                                       )             CC-11-1272-PaMkCa
 6   MARLOW HOWARD HOOPER and          )             (Related Appeals)
     MONIQUE LORI HOOPER,              )
 7                                     )    Bk. No. 08-24094-MJ
                    Debtors.           )
 8   __________________________________)    Adv. No. 09-01275-MJ
                                       )
 9   MARLOW HOWARD HOOPER;             )
     MONIQUE LORI HOOPER,              )
10                                     )
                    Appellants,        )
11                                     )    M E M O R A N D U M1
     v.                                )
12                                     )
     KARL T. ANDERSON, Chapter 7       )
13   Trustee; ETS SERVICES, LLC; GMAC )
     MORTGAGE, LLC; MORTGAGE ELECTRONIC)
14   REGISTRATION SYSTEMS, INC.,       )
                                       )
15                  Appellees.         )
     __________________________________)
16
                    Argued and submitted on January 19, 2012
17                           at Pasadena, California
18                         Filed - February 14, 2012
19             Appeal from the United States Bankruptcy Court
                   for the Central District of California
20
          Honorable Meredith A. Jury, Bankruptcy Judge, Presiding
21
22   Appearances:    W. Derek May of the Law Offices of Stephen R. Wade,
                     P.C. argued for appellants Marlow and Monique
23                   Hooper; Adam Starr of Greenberg Traurig, LLP argued
                     for appellee GMAC Mortgage, LLC.
24
25
26
          1
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may have
     (see Fed. R. App. P. 32.1), it has no precedential value. See 9th
28   Cir. BAP Rule 8013-1

                                      -1-
 1   Before: PAPPAS, MARKELL and CASE,2 Bankruptcy Judges.
 2
 3        Chapter 73 debtors Marlow Hooper and Monique Hooper (the
 4   “Hoopers”) appeal the bankruptcy court's orders approving a
 5   compromise settling litigation pending between Karl T. Anderson
 6   (the chapter 7 “Trustee”) and creditor GMAC Mortgage, LLC
 7   (“GMAC”),4 overruling Hoopers’ objection to GMAC’s claim, and
 8   denying reconsideration of those orders.   We AFFIRM.
 9                                   FACTS
10        In 2006, the Hoopers purchased a property in Rancho
11   Cucamonga, California (the “Property”).    To finance this purchase,
12   Marlow Hooper5 borrowed $1 million from Greenpoint.     The loan was
13   evidenced by an adjustable rate note dated April 20, 2006 (the
14   “Note”).    The correct street address of the Property is listed on
15   the Note.
16
          2
17          The Honorable Charles G. Case II, United States Bankruptcy
     Judge for the District of Arizona, sitting by designation.
18
          3
            Unless otherwise indicated, all chapter, section and rule
19   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037. The
20   Federal Rules of Civil Procedure are referred to as “Civil Rules.”
21        4
            Besides GMAC, the other defendants named in the adversary
     proceeding were ETS Services, Inc. (“ETS”), Mortgage Electronic
22   Registration Systems, Inc. (“MERS”), Greenpoint Mortgage Funding,
     Inc. (“Greenpoint”) and Fidelity National Title, Inc.
23   (“Fidelity”). Although ETS and MERS are named as appellees in
     this appeal, they did not file briefs or appear at oral argument.
24   With the exception of Fidelity, the appellees appear to have acted
     in concert. Consequently, we refer to the appellees collectively
25   either as GMAC or the GMAC Parties.
26        5
            The Note and two deeds of trust discussed herein were
     executed by Marlow Hooper alone; they do not bear the signature of
27   his wife and co-debtor, Monique Hooper. According to GMAC’s
     motion for relief from stay, discussed below, Monique Hooper was
28   not a co-borrower on the Note.

                                      -2-
 1           At the same time he executed the Note, Marlow Hooper executed
 2   a Deed of Trust (the “2006 DOT”) in favor of Greenpoint.       The 2006
 3   DOT lists the correct address of the Property; however, the legal
 4   description for the Property in the 2006 DOT was incorrectly
 5   listed as “Lot 17 Tract No. 16332,” instead of the correct
 6   description of “Lot 19 Tract No. 16332.”6    The 2006 DOT was
 7   recorded in the Official Records of San Bernadino County on May 1,
 8   2006.
 9           On September 12, 2008, acting without obtaining a new
10   signature from Marlow Hooper, Greenpoint recorded a second,
11   modified version of the 2006 deed of trust (the “2008 DOT”).      In
12   the 2008 DOT, the Property is correctly described as “Lot 19 Tract
13   No. 16332.”7
14           The Hoopers filed a chapter 7 bankruptcy petition on
15   October 15, 2008.    In their original schedule D, they listed an
16   undisputed, noncontingent liquidated claim of $1,077,217.96 in
17   favor of GMAC for a mortgage and deed of trust on the Property.
18   The Hoopers also claimed a homestead exemption on the Property in
19   schedule C.    Trustee did not challenge the Hoopers’ exemption
20   claim, nor seek to administer the Property.    Instead, on
21   December 2, 2008, Trustee filed a “no-asset report.”
22           In a motion originally filed in the bankruptcy case on
23   December 11, 2008, which was amended on December 31, 2008, GMAC
24
25           6
            It is not disputed that “Lot 19 Tract No. 16332" is the
     correct legal description of the Property.
26
             7
            There was also an alleged disparity between the 2006 and
27   2008 DOTs regarding the assessor’s number. However, this feature
     of the documents was not raised as a significant issue in this
28   appeal.

                                       -3-
 1   sought relief from the automatic stay so that it could foreclose
 2   on the Property.   Attached to these motions were copies of the
 3   2006 DOT and Note.   The Hoopers did not contest the stay relief
 4   motions, and the bankruptcy court entered its order terminating
 5   the stay in favor of GMAC on January 7, 2009.   This order was not
 6   appealed.
 7        The bankruptcy court granted the Hoopers a discharge on
 8   February 3, 2009, and the bankruptcy case was closed on
 9   February 19, 2009.
10        The Hoopers contend that they were unaware of the existence
11   of the 2008 DOT before their discharge was granted.   On March 31,
12   2009, the Hoopers filed a motion to reopen their case to amend
13   their schedules “to include previously unidentified assets.”    The
14   case was reopened by order entered by the bankruptcy court on
15   April 30, 2009.
16                             The Compromise
17        After he became aware of the discrepancy in the documents,
18   Trustee initiated an adversary proceeding against GMAC, ETS, MERS,
19   Greenpoint and Fidelity on June 11, 2009.   In the complaint,
20   Trustee sought avoidance of the 2008 DOT.   In addition, he alleged
21   that the 2006 DOT did not “properly encumber” the Property because
22   it contained an incorrect legal description.8   According to
23   Trustee, even if the 2008 DOT was authorized by the parties, which
24   Trustee disputed, because it was recorded on September 12, 2008,
25   within ninety days of the filing of the Hoopers’ bankruptcy
26
27        8
            Although the complaint and subsequent summary judgment
     motion asserted that the 2006 DOT did not properly encumber the
28   Property, Trustee did not seek to avoid the 2006 DOT.

                                     -4-
 1   petition it could be avoided as a preference under § 547(b).       The
 2   Hoopers were not named as parties, and did not intervene, in the
 3   adversary proceeding.
 4        Trustee filed a motion for summary judgment on January 4,
 5   2010, arguing that there were no triable issues of material fact
 6   and that, as a matter of law, “the unauthorized and concealed
 7   recording of the 2008 DOT on September 12, 2008, thirty-three days
 8   before the filing of the bankruptcy petition, was an avoidable
 9   preference under § 547.”   A flurry of objections from the GMAC
10   Parties, replies from Trustee, supplemental briefing, and multiple
11   continuances of the hearing on summary judgment followed.
12        Trustee then moved to sell the Property on August 25, 2010,
13   pursuant to § 363(b) and (f) with valid liens to attach to the net
14   proceeds of the sale.   The sale motion disclosed that there was a
15   pending compromise between GMAC and Trustee.    The Hoopers objected
16   on September 7, 2010, arguing that Trustee was improperly
17   including some personal property items (a refrigerator and several
18   flat screen televisions) in the sale, and because the estimated
19   distribution to unsecured creditors from the sale was to be only
20   $10,000.   GMAC did not oppose the sale motion.   The bankruptcy
21   court approved the sale on November 24, 2010.     The bankruptcy
22   court overruled the Hooper’s objection, and the Hoopers did not
23   appeal the order approving the sale.   The sale closed, and Trustee
24   is holding $555,911 in net proceeds of the sale.
25        As noted above, Trustee and GMAC had reached a tentative
26   settlement agreement to resolve the adversary proceeding and to
27   distribute the house sale proceeds.    On December 21, 2010, Trustee
28   filed a Motion for Order Authorizing Trustee’s Global Compromise

                                     -5-
 1   [of] Adversary Proceeding (the “Compromise Motion”).    The material
 2   terms of the proposed compromise and settlement agreement provided
 3   that:
 4           - A portion of GMAC’s secured claim on the Property,
 5   amounting to $95,000, would be deemed avoided under § 547, and
 6   preserved for the benefit of the bankruptcy estate pursuant to
 7   § 551 (the “Compromise Amount”).    The adversary proceeding would
 8   be dismissed with prejudice as to all defendants.
 9           - The following distributions would be made from the house
10   sale proceeds: (1) the $95,000 Compromise Amount would be paid to
11   Trustee, of which $85,000 would be allocated to payment of allowed
12   administrative expenses, and $10,000 would be distributed to
13   unsecured creditors, which Trustee estimated would result in a 55
14   percent dividend (assuming $18,000 in total allowed unsecured
15   claims); (2) the balance of the proceeds would be disbursed to
16   GMAC for application on its secured claim; and (3) the Hoopers
17   would “not be entitled to receive any portion of the Net Proceeds,
18   whether on account of any asserted homestead exemption or
19   otherwise.”
20           The Hoopers filed an objection to the Compromise Motion on
21   December 28, 2010.    In the objection, they asserted, inter alia,
22   that GMAC was not a creditor, secured or otherwise, because GMAC
23   was not the current owner or assignee of the Note, and because
24   GMAC’s position was founded on what they described as the
25   fraudulent, criminal act of the unauthorized recording of the 2008
26   DOT.    The Hoopers also suggested that it was unfair for Trustee
27   and GMAC to effectively deny Hoopers’ entitlement to a homestead
28   exemption through a settlement where the Hoopers were not parties.

                                       -6-
 1                      Objection to GMAC’s Proof of Claim
 2           GMAC had filed secured Proof of Claim #3-1 in the Hoopers'
 3   bankruptcy case on September 15, 2009 in the amount of $1 million.
 4   Attached to the proof of claim were copies of the 2006 and 2008
 5   DOTs; the Note was not attached.
 6           The Hoopers filed an Objection to the GMAC claim on
 7   November 30, 2010.    Among the arguments they advanced to support
 8   this objection were that GMAC had not established that it was the
 9   holder of the Note with authority to enforce it, and that the
10   alteration and recording of the 2008 DOT was fraudulent, without
11   their consent, and in violation of Cal. Penal Code § 132 (Offering
12   False Evidence).
13                Hearings on Compromise and Objection to Claim
14           The bankruptcy court ordered that the Hoopers’ objection to
15   claim and Trustee’s Compromise Motion be heard together.      The
16   first hearing occurred on January 11, 2011.    Trustee, the Hoopers,
17   and the GMAC Parties were represented by counsel.       The court
18   informed the parties that it was concerned about the standing of
19   GMAC.    Specifically, the court indicated it lacked adequate
20   evidence that GMAC was holder of the Note:
21           The evidence that has been submitted in response to the
             objection to claim was not attached to the original
22           proof of claim [and] is suspicious at best that GMAC is
             the holder. The reason I say that is because they hold,
23           according to their declaration and the documents, based
             on an in-blank endorsement on an unnumbered page signed
24           by a person whose authority is unknown to the Court on
             an unknown date.
25
26   Hr’g Tr. 2:19-25, January 11, 2011.     After hearing from the
27   parties, the bankruptcy court continued the hearing to March 29,
28   2011, and instructed GMAC to produce the original Note;

                                       -7-
 1   authenticate the endorsement on the Note from Greenpoint to GMAC;
 2   and provide evidence that the person who signed the endorsement
 3   was authorized to do so.
 4        At the continued hearing on March 29, 2011, Trustee, the U.S.
 5   Trustee, the Hoopers and the GMAC Parties were represented by
 6   counsel.   GMAC presented what it represented was the original Note
 7   to the bankruptcy court.   The bankruptcy judge examined the Note,
 8   observing that it contained the signature of Marlow Hooper, was
 9   endorsed in blank on the back of its fourth page, and that the
10   endorsement was signed by “Thomas K. Mitchell, Vice President of
11   Greenpoint.”    The court observed that the form of endorsement was
12   consistent with how notes in general are endorsed.
13        The bankruptcy court also acknowledged that GMAC had
14   submitted the declaration of Rosa Medina, a former vice president
15   of Greenpoint.   The Medina declaration asserted that she was vice
16   president of Greenpoint for seventeen years prior to the closure
17   of that company in 2007, and that Thomas K. Mitchell was a vice
18   president of Greenpoint while she was employed there.
19        At this point, the bankruptcy court stated that, based on the
20   submission of the original Note and the Medina declaration,
21   “[c]ertainly that’s prima facie evidence that GMAC is the holder
22   of the Note.”    Hr’g Tr. 4:14-16, March 29, 2011.   The court
23   concluded: “[B]ased on the record before the court, my tentative
24   [ruling] is this is an enforceable claim.   GMAC has standing.
25   They have the original note.   It is an enforceable secured claim.”
26   Hr’g Tr. 6:24–7:1.   Later in the hearing, the court confirmed this
27   ruling:
28        I’m going to overrule the Debtor’s objection to the

                                      -8-
 1        claim on behalf of the estate. I think that the issue
          of whether or not GMAC is the holder has been satisfied
 2        by their bringing the endorsed Note, the original Note,
          to court. . . . I would overrule the objection, and I
 3        would grant the compromise.
 4   Hr’g Tr. 40:25–41:4, 41:21-22.
 5        The bankruptcy court then went on to make findings on each of
 6   the Ninth Circuit’s criteria for approving a compromise set forth
 7   in Martin v. Kane (In re A & C Props.), 784 F.2d 1377 (9th Cir.
 8   1986): that the dispute at issue in the compromise was highly
 9   complex and that Trustee was not confident of his chances for
10   success in litigation; that collectibility was not a concern as
11   the funds were in a blocked account; that the four hearings over
12   legal ramifications were sufficient for the court to determine
13   that the complexity and cost of continuing proceedings would
14   justify ending the dispute; and that no creditor had objected to
15   the compromise.   Therefore, the court concluded, the A&C Props
16   factors were met.   Hr’g Tr. 42:1–43:13.
17        The bankruptcy court entered an Order Authorizing Trustee’s
18   Global Compromise on April 20, 2011, “pursuant to the findings
19   made on the record.”   On May 31, 2011, the court entered an Order
20   Overruling Debtors’ Objection to Claim of GMAC Mortgage, LLC,
21   Claim #3, “pursuant to the findings of fact and conclusions of
22   law, stated in the hearings of January 11, 2011 and March 29,
23   2011.”
24                 The Reconsideration Motion and Hearing
25        The Hoopers filed a motion for reconsideration of the orders
26   approving the compromise and overruling the claim objection on
27   April 11, 2011.   The Hoopers argued that newly discovered evidence
28   showed that the Thomas K. Mitchell signature on the Note

                                      -9-
 1   endorsement was “stamped,” not an original; they provided several
 2   examples of Mitchell’s signature in precisely the same location on
 3   other note endorsements to support this allegation.
 4        The bankruptcy court held a hearing on the reconsideration
 5   motion on May 3, 2011 at which it disposed of the Hoopers’ newly
 6   discovered evidence argument.   The court observed that signatures
 7   on commercial paper are self-authenticating to the extent provided
 8   by general commercial law.   Fed. R. Evid. 902(9).   The applicable
 9   general commercial law of California provides that: “Each
10   signature on the instrument is admitted unless specifically denied
11   in the pleadings.”   Cal. Com. Code § 3308.   The court therefore
12   concluded that there was no new evidence before the court, and
13   denied the motion for reconsideration.      The court entered its
14   order denying reconsideration on May 23, 2011.
15        The Hoopers filed a timely appeal of the orders approving
16   compromise, overruling objection to claim, and denying
17   reconsideration on May 27, 2011.
18                                JURISDICTION
19        The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334
20   and 157(b)(2)(A) and (B).    We have jurisdiction under 28 U.S.C.
21   § 158.
22                                   ISSUES
23        Whether the bankruptcy court abused its discretion in
24   approving the Compromise.
25        Whether the bankruptcy court abused its discretion in denying
26   the Hoopers’ objection to GMAC’s claim.
27        Whether the bankruptcy court abused its discretion in denying
28   the motion for reconsideration.

                                       -10-
 1                           STANDARDS OF REVIEW
 2         The bankruptcy court’s approval of a compromise is reviewed
 3   for abuse of discretion. Debbie Reynolds Hotel & Casino, Inc. v.
 4   Calstar Corp. (In re Debbie Reynolds Hotel & Casino, Inc.),
 5   255 F.3d 1061, 1065 (9th Cir. 2001).
 6         We review a bankruptcy court's decision to allow or deny a
 7   proof of claim for an abuse of discretion. Bitters v. Networks
 8   Elec. Corp. (In re Networks Elec. Corp.), 195 B.R. 92, 96 (9th
 9   Cir. BAP 1996) ("the bankruptcy court has sole jurisdiction and
10   discretion to allow or disallow the claim under federal law.").
11         A bankruptcy court’s denial of a motion for reconsideration
12   is reviewed for an abuse of discretion.   Arrow Elecs., Inc. v.
13   Justus (In re Kaypro), 218 F.3d 1070, 1073 (9th Cir. 2000); Sewell
14   v. MGF Funding, Inc. (In re Sewell), 345 B.R. 174, 178 (9th Cir.
15   BAP 2007).
16         In applying the abuse of discretion standard, we first
17   “determine de novo whether the [bankruptcy] court identified the
18   correct legal rule to apply to the relief requested.”    United
19   States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).
20   If the correct legal rule was applied, we then consider whether
21   its “application of the correct legal standard was (1)illogical,
22   (2) implausible, or (3) without support in inferences that may be
23   drawn from the facts in the record."   Id.    Only in the event that
24   one of these three apply are we then able to find that the
25   bankruptcy court abused its discretion.   Id.
26   ///
27   ///
28   ///

                                     -11-
 1                                 DISCUSSION
 2                                   I.
                   The bankruptcy court did not abuse its
 3                 discretion in approving the Compromise.
 4         Rule 9019(a) provides that, "On motion by the trustee and
 5   after notice and a hearing, the court may approve a compromise or
 6   settlement. . . ."   The bankruptcy court is vested with
 7   considerable discretion in approving compromises and settlements.
 8   Woodson v. Fireman's Fund Ins. Co. (In re Woodson), 839 F.2d 610,
 9   620 (9th Cir. 1988).   To approve a compromise, the bankruptcy
10   court must be satisfied that its terms are "fair, reasonable and
11   equitable."   In re A & C Props., 784 F.2d at 1382.   In assessing
12   the reasonableness of a compromise, the bankruptcy court should
13   consider:
14         (a) The probability of success in the litigation;
           (b) the difficulties, if any, to be encountered in the
15         matter of collection; (c) the complexity of the
           litigation involved, and the expense, inconvenience and
16         delay necessarily attending it; (d) the paramount
           interest of the creditors and a proper deference to
17         their reasonable views in the premises.
18   Id.
19         In this case, the bankruptcy court explicitly addressed each
20   of the A&C Props. factors.
21         Probability of success in the litigation.   The bankruptcy
22   court noted that the central dispute resolved by the compromise
23   was whether GMAC held an enforceable secured claim as to the
24   Property in light of the incorrect legal description of the
25   Property in the 2006 DOT.    The court noted that neither Trustee
26   nor the GMAC parties were confident of their prospects for success
27   in litigating this issue.    Further, the court observed that,
28   however the court might rule, GMAC’s title companies would likely

                                      -12-
 1   insist on an appeal.   Consequently, in the bankruptcy court’s
 2   view, it was unclear that Trustee would be successful.
 3        The difficulties, if any, to be encountered in the matter of
 4   collection.    This was not a relevant factor to the bankruptcy
 5   court in this case, because the proceeds of the sale of the
 6   Property, the only funds potentially available to the estate, were
 7   being held in a blocked account maintained by Trustee until
 8   conclusion of the adversary proceeding.
 9        The complexity of the litigation involved, and the expense,
10   inconvenience and delay necessarily attending it.    The bankruptcy
11   court repeated its views about the legal complexity of the dispute
12   noted above.   Additionally, the court noted that it had held “four
13   or five hearings on the legal issues over the legal ramifications
14   of what’s involved in the Compromise” and that the litigation was
15   “sufficiently complex and costly to have the matter end now[.]”
16   Hr’g Tr. 42:17-25.
17        The paramount interest of the creditors and a proper
18   deference to their reasonable views in the premises.     The
19   bankruptcy court determined that the only party benefitting from
20   rejection of the compromise would be the Hoopers:
21        The estate would benefit from everything that is before
          the Court. No party has objected to the Compromise
22        except for the Debtor, which would indicate that the
          unsecured creditors and — GMAC is either a secured
23        creditor or by far the largest unsecured creditor in
          this estate, and they have chosen to take what they can
24        take in their compromise, and I think that is
          significant. . . . I would find that it meets the
25        fourth criteria of the A&C factors.
26   Hr’g Tr. 43:1-13.    In addition, under these facts, the court could
27   also have noted that the compromise provided a 55 percent return
28   to the unsecured creditors, whereas it was uncertain if there

                                      -13-
 1   would be any funds available for creditors if the litigation
 2   continued.
 3        In summary, then, in approving the compromise, the bankruptcy
 4   court applied the correct legal rule, measuring the reasonableness
 5   of the compromise under the factors articulated by the Ninth
 6   Circuit in A&C Props.     Whether the members of this Panel would
 7   independently agree with them, the bankruptcy court’s findings and
 8   conclusions were supported by competent evidence in the record,
 9   and were not illogical, implausible, or without support in
10   inferences that may be drawn from the record.    The bankruptcy
11   court did not abuse its discretion in approving the Compromise.
12                                  II.
                  The Hoopers’ Objection to the Compromise
13
14        The Hoopers do not seem to dispute that the A&C Props.
15   factors were satisfied.    Rather, they argue that the bankruptcy
16   court should not have approved the settlement with Trustee because
17   GMAC lacked standing, arguing that GMAC was not a creditor,
18   secured or otherwise, as it did not show it was the owner or
19   assignee of the Note.   Further, the Hoopers argue that the
20   position of GMAC is built on a fraud and a criminal act in its
21   unauthorized recording of the 2008 DOT.
22        The Panel recently published an extensive Opinion examining
23   the legal status of parties as holders entitled to enforce
24   promissory notes.   See Am. Home Mortg. Servicing, Inc. v. Veal
25   (In re Veal), 450 B.R. 897 (9th Cir. BAP 2011).    Briefly, in that
26   opinion, the Panel observed that Article 3 of the Uniform
27   Commercial Code “provides a comprehensive set of rules governing
28   the obligations of parties on [a promissory note], including how

                                       -14-
 1   to determine who may enforce those obligations and to whom those
 2   obligations are owed.”    Id. at 910.    “To enforce a note under the
 3   method most commonly employed, the person must be a ‘holder’ of
 4   the note.”    Id.   Under Cal. Com. Code § 1201(b)(21), a holder of a
 5   note is defined as:
 6        "Holder," means: (A) the person in possession of a
          negotiable instrument that is payable either to bearer
 7        or, to an identified person that is the person in
          possession; or (B) the person in possession of a
 8        document of title if the goods are deliverable either to
          bearer or to the order of the person in possession.
 9
10   See also In re Veal, 450 B.R. at 911.
11        Under California law, a negotiable instrument may be endorsed
12   in blank, that is, endorsed without reference to an identifiable
13   person.   Cal. Com. Code § 3205(b).9     Where a note is endorsed in
14   blank, it becomes “payable to bearer and may be negotiated by
15   transfer of possession until specially indorsed.”      Id.; In re Lee,
16   408 B.R. 893, 899-90 (Bankr. C.D. Cal. 2009) (“If an indorsement
17   does not specify a payee, it constitutes a blank indorsement, as
18   defined in Cal. Com. Code § 3205(b), which makes the note payable
19   to whoever is the bearer of the note.”).
20        When the Hoopers objected that GMAC did not have possession
21   of the Note, the bankruptcy court ordered GMAC to produce the
22   original.    GMAC complied at a hearing at which the bankruptcy
23   court had the opportunity to examine the Note; the record reflects
24   that the Hoopers and their counsel had been given an opportunity
25   before the hearing to examine the actual Note.      GMAC also
26
27        9
            The Official Comment to Cal. Com. Code § 3305(b) notes:
     “A blank indorsement is usually the signature of the indorser on
28   the back of the instrument without other words.”

                                       -15-
 1   submitted other evidence to the bankruptcy court, the Medina
 2   declaration, to show that the Note had been properly endorsed in
 3   blank.   On this basis, the bankruptcy court could rule that,
 4   because GMAC was in possession of the properly endorsed Note, it
 5   was the holder under California law.    In re Hwang, 438 B.R. 661,
 6   665 (C.D. Cal 2010) (concluding that under California law, the
 7   possessor of the Note has the authority to enforce it, even if it
 8   is not in lawful possession of the Note).     As the holder of the
 9   Note, GMAC had standing and power to enforce it.    In re Veal,
10   450 B.R. at 911.
11          In both the bankruptcy court and this appeal, the Hoopers
12   object that there is no evidence of the date of the transfer of
13   the Note from Greenpoint to GMAC.   After noting that under the
14   facts of this case it would be very difficult to determine the
15   date of transfer, the bankruptcy court ruled that, “I don’t think
16   when [the Note] was transferred is important.”    Hr’g Tr. 5:2-3,
17   March 29, 2011.    This ruling was correct.   There is nothing in the
18   California Commercial Code that requires proof of the date of
19   transfer as a condition to enforcing a note.    The statute requires
20   only that GMAC be in physical possession of a properly endorsed
21   Note; when that Note was transferred to GMAC is legally
22   irrelevant.   Cal. Com. Code § 3205(b);   In re Hwang, 438 B.R. at
23   665.
24          The sole argument made by the Hoopers on reconsideration
25   challenged the signature of Thomas K. Mitchell on the endorsement
26   to the Note because it was a stamped signature, rather than an
27   original one.   However, the bankruptcy court properly dismissed
28   this objection, finding that “the signature on [the] note

                                      -16-
 1   endorsement is self-authenticating under Evidence Code 902(9).”10
 2   Hr’g Tr. 1:21-23, May 3, 2011.   The applicable general commercial
 3   law of California provides that:
 4        In an action with respect to an instrument, the
          authenticity of, and authority to make, each signature
 5        on the instrument is admitted unless specifically denied
          in the pleadings. If the validity of a signature is
 6        denied in the pleadings, the burden of establishing
          validity is on the person claiming validity, but the
 7        signature is presumed to be authentic and authorized
          unless the action is to enforce the liability of the
 8        purported signer and the signer is dead or incompetent
          at the time of trial of the issue of validity of the
 9        signature.
10   Cal Com. Code § 3308(a).    Construing this statute, courts have
11   held that it “creates a presumption that commercial paper offered
12   in evidence is authentic and dispenses with a requirement of
13   extrinsic evidence for admissibility.”   Mandalay Resort Group v.
14   Miller (In re Miller), 310 B.R. 185, 193 (Bankr. C.D. Cal. 2004)
15        Under California law, the “burden of establishing” the
16   validity of the signature is on GMAC.    Cal. Com. Code § 1201(b)(8)
17   ("’Burden of establishing’ a fact means the burden of persuading
18   the trier of fact that the existence of the fact is more probable
19   than its nonexistence.”).    The bankruptcy court found that, based
20   on the Medina declaration, GMAC had offered sufficient evidence of
21   Mitchell’s employment and his authority to endorse the Note.
22   According to the court, “I have no evidence whatsoever that that
23   is not a proper signature.”   Hr’g Tr. 3:19-25, May 3, 2011.   We
24
25        10
            Fed. R. Evid. 902(9) Self Authentication
          Extrinsic evidence of authenticity as a condition precedent
26        to admissibility is not required with respect to the
          following:. . . . (9) Commercial paper and related
27        documents. Commercial paper, signatures thereon, and
          documents related thereto to the extent provided by general
28        commercial law.

                                      -17-
 1   perceive no error in this ruling.
 2           As to the Hoopers’ contention that the Note was invalid
 3   because it bore a stamped, rather than handwritten signature, this
 4   position is incorrect under California law.      The statutes do not
 5   require handwritten signatures on endorsements.      Cal. Com. Code
 6   § 3401(b)(1) (“Liability on instrument; Signature . . .
 7   (b) signature may be made (1) manually or by means of a device or
 8   machine[.]”).    The Official Comments to this provision instructs
 9   that “A signature may be handwritten, typed, printed or made in
10   any other manner.”    Therefore, the bankruptcy court did not err in
11   deciding that “The fact [that] the signature is a stamp, only if
12   there was some ability to prove that it was stamped without the
13   authorization of the person whose name appeared on it, would the
14   Court have any problem with this stamp.” Hr’g Tr. 3: 9-12, May 3,
15   2011.
16           The bankruptcy court also properly rejected the Hoopers’
17   argument that it should deny the compromise because GMAC had
18   forged the 2008 DOT, and that the bankruptcy court should not
19   favor a party whose position is based on the commission of a
20   criminal act.    To be precise, the court indicated that it had
21   based its rulings on the 2006 DOT, without regard to the 2008 DOT.
22   To the extent that there was doubt about the validity of the 2006
23   DOT, the court found that the apparent error in legal description
24   of the property was simply a “scrivener’s error.”      Hr’g Tr.
25   37:7-9.
26           Given proper circumstances, a state court may correct a
27   “scrivener’s error” in a contract.       Bonshire v. Thompson, 52 Cal.
28   App. 4th 803, 811 (Cal. Ct. App. 1997).      In this case, the

                                       -18-
 1   evidence is uncontroverted that the legal description in the 2006
 2   DOT was inaccurate.   However, the Hoopers never suggested that
 3   they had not received the loan proceeds, or that they had not
 4   intended to encumber the Property located at the address set forth
 5   in the 2006 DOT.   To the contrary, the evidence presented to the
 6   bankruptcy court clearly established that they had.   Thus, because
 7   under these circumstances a court could have corrected the
 8   scrivener’s error in the 2006 DOT, the bankruptcy court did not
 9   err in declining to disregard the incorrect legal description on
10   the 2006 DOT.
11                                  III.
             The bankruptcy court did not abuse its discretion
12        in overruling the Hoopers’ objection to the GMAC claim.
13       "A proof of claim executed and filed in accordance with these
14 rules shall constitute prima facie evidence of the validity and
15 amount of the claim."    Rule 3001(f).   Upon objection, the proof of
16 claim provides "some evidence as to its validity and amount" and
17 carries over a "mere formal objection."    Lundell v. Anchor Constr.
18 Specialists, Inc. (In re Lundell), 223 F.3d 1035, 1039 (9th Cir.
19 2000).   The objector must produce sufficient evidence "tending to
20 defeat the claim by probative force equal to that of the
21 allegations in the proofs of claim themselves."    Id. (citing In re
22 Holm, 931 F.2d 620, 623 (9th Cir. 1991)).     “The ultimate burden of
23 persuasion remains at all times upon the claimant."     In re
24 Lundell, 223 F.3d at 1039.
25       In this case, GMAC’s proof of claim was prima facie valid,
26 and the Hoopers’ arguments were not of equal probative force.
27       In contesting the claim, the Hoopers presented the identical
28 objections they had posed to the Compromise, that GMAC was not the

                                    -19-
 1 holder of the Note and that the alteration and recording of the
 2 2008 DOT was fraudulent, without consent, and in violation of Cal.
 3 Penal Code § 132 (Offering False Evidence).     The bankruptcy court
 4 overruled the claim objection for the same reasons that it had
 5 approved the Compromise, that GMAC was the holder of the Note with
 6 power to enforce it, and that the 2008 DOT was irrelevant to its
 7 considerations.    Hr’g Tr. 40:25–41:4.   In doing so, there remained
 8 no reason for the bankruptcy court to entertain Debtors’ contest
 9 to GMAC’s proof of claim.    For the reasons given above, we agree
10 with the bankruptcy court, and find no abuse of discretion in its
11 overruling the Hoopers’ objection to GMAC’s claim.
12       On appeal, the Hoopers raise one additional objection to the
13 bankruptcy court’s decision overruling their objection to GMAC’s
14 claim.     They contend that the bankruptcy court erred when it ruled
15 on the Compromise Motion before it ruled on the objection to
16 claim.     However, we need not address this issue because the
17 Hoopers’ argument is simply incorrect.     As shown by the hearing
18 transcript, the bankruptcy court first ruled on the objection to
19 claim at the March 29, 2011 hearing.      Hr’g. Tr. at 40:25.   It
20 later, at the same hearing, approved the Compromise.     Hr’g Tr.    at
21 41:21-22.    That the bankruptcy court’s formal order overruling the
22 objection to claim was entered after the order approving the
23 Compromise is of no moment.    Both orders expressly refer back to
24 the oral rulings made by the bankruptcy court at the March 29
25 hearing, and made no changes to those rulings.11
26
         11
27          At oral argument, the Hoopers also attempted to argue that
     the bankruptcy court erred in its ruling that they did not have a
28                                                       (continued...)

                                     -20-
 1                                      IV.
                The bankruptcy court did not abuse its discretion
 2             in denying the Hoopers’ motion for reconsideration.
 3       A motion for reconsideration filed within ten12 days of the
 4 entry of a judgment is reviewed under Civil Rule 59(e).       Am.
 5 Ironworks & Erectors, Inc. v. N. Am. Constr. Corp., 248 F.3d 892,
 6 899 (9th Cir. 2001).      Civil Rule 59(e) is made applicable in
 7 bankruptcy proceedings by Rule 9023.      Although Civil Rule 59(e)
 8 permits a court to reconsider and amend a previous order, “the
 9 rule offers an extraordinary remedy, to be used sparingly in the
10 interests of finality and conservation of judicial resources.”
11 Kona Enter., Inc. v. Bishop, 229 F.3d 877, 890 (9th Cir. 2000).        A
12 motion for reconsideration should not be granted, absent highly
13 unusual circumstances, unless the court is presented with newly
14 discovered evidence, committed clear error, or if there is an
15 intervening change in the controlling law.      Id.    “A Rule 59(e)
16 motion may not be used to raise arguments or present evidence for
17 the first time when they could reasonably have been raised earlier
18 in the litigation.”      Id. (emphasis in original).
19
20
         11
           (...continued)
21   right to a homestead exemption based on its examination of whether
     there was an equitable mortgage. This issue was not identified in
22   the Hoopers’ statement of issues on appeal, nor was it discussed
     in their brief. Issues “not argued in the opening brief are
23   deemed forfeited.” Koerner v. Grigas, 328 F.3d 1039, 1048-49 (9th
     Cir. 2003). The discretionary exceptions to this rule (manifest
24   injustice would result, appellee raised the issue in its brief, or
     opposing party would not be prejudiced) do not apply or were not
25   argued. We decline to review this issue on appeal.
26        12
            The ten-day limit for filing requests under Civil Rule
     59(e) was in effect at the time of the Am. Ironworks case. The
27   time for filing requests under Rule 9023, incorporating and
     modifying Civil Rule 59(e) for bankruptcy purposes, was enlarged
28   to fourteen days in 2009.

                                      -21-
 1      Here, the Hoopers sought reconsideration based upon what they
 2 described as newly discovered evidence – that the Mitchell
 3 signature on the Note was not handwritten, but was instead
 4 stamped.   As discussed above, the bankruptcy court properly
 5 disposed of this argument by noting that under both federal and
 6 California law, a stamped signature on a commercial document is
 7 self-authenticating. Further, there is no requirement in
 8 California commercial law that a signature be handwritten.     Thus,
 9 it was immaterial that the signature was stamped.
10      At the hearing on reconsideration, the Hoopers attempted to
11 argue that an intervening change of law had taken place, citing
12 Densmore v. Litton Loan Servicing, L.P. (In re Densmore), 445 B.R.
13 307 (Bankr. D. Vt. 2011).   The bankruptcy court discounted this
14 argument because it was raised in a reply brief to GMAC’s
15 objection to their motion for reconsideration, which was “too
16 late” for consideration by the court.     Hr’g Tr. 8:9-10 (May 3,
17 2011).   The court’s decision was also justified because a
18 bankruptcy court decision from Vermont is certainly not
19 “controlling law” in a case in California involving local law, and
20 thus would not meet the threshold requirements for reconsideration
21 under Civil Rule 59(e).
22      The bankruptcy court did not abuse its discretion in denying
23 the Hoopers’ motion for reconsideration.
24                              CONCLUSION
25      We AFFIRM the bankruptcy court’s orders.
26
27
28

                                   -22-
