                                                         FILED
                                                          MAY 10 2013
 1
                                                      SUSAN M SPRAUL, CLERK
 2                                                      U.S. BKCY. APP. PANEL
                                                        OF THE NINTH CIRCUIT

 3                UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                          OF THE NINTH CIRCUIT
 5   In re:                         )   BAP No.    CC-12-1515-MkTaMo
                                    )
 6   ELKE MAGDALENA LESSO,          )   Bk. No.    11-32945
                                    )
 7                  Debtor.         )
     _______________________________)
 8                                  )
     FUCHS & ASSOCIATES, INC.       )
 9                                  )
                    Appellant,      )
10                                  )
     v.                             )   MEMORANDUM*
11                                  )
     ELKE MAGDALENA LESSO,          )
12                                  )
                    Appellee.**     )
13   _______________________________)
14                      Argued on February 21, 2013
                          at Pasadena, California
15
                        Submitted on March 25, 2013
16
                            Filed – May 10, 2013
17
               Appeal from the United States Bankruptcy Court
18                 for the Central District of California
19        Honorable Sandra R. Klein, Bankruptcy Judge, Presiding
20
21        *
           This disposition is not appropriate for publication.
     Although it may be cited for whatever persuasive value it may
22
     have (see Fed. R. App. P. 32.1), it has no precedential value.
23   See 9th Cir. BAP Rule 8013-1.
          **
24         In its Notice of Appeal, Fuchs & Associates, Inc. named
     three additional parties as appellees in this appeal: (1) Lone
25   Oak Fund, LLC, (2) the Los Angeles County Treasurer & Tax
     Collector, (3) and the Perfect Bite Company. But Fuchs &
26
     Associates, Inc. later stipulated with these three parties for
27   their removal as appellees herein. Based on that Stipulation,
     the Panel entered an order on January 13, 2013 effectively
28   removing these three parties as appellees.
 1   Appearances:     John R. Fuchs of Fuchs & Associates, Inc. argued
                      for Appellant Fuchs & Associates, Inc.; Thomas H.
 2                    Edwards argued for Appellee Elke M. Lesso.
 3
     Before:    MARKELL, TAYLOR and MONTALI,*** Bankruptcy Judges.
 4
 5                               INTRODUCTION
 6        Chapter 111 debtor Elke Lesso (“Lesso”) moved for authority
 7   under § 363(f) to sell two parcels of real property located in
 8   Glendale, California (“Properties”) free and clear of liens.
 9   Appellant Fuchs & Associates, Inc. (“FAAI”) opposed the sale
10   motion, claiming among other things that it held valid liens
11   against the Properties.    In the process of granting the sale
12   motion, the bankruptcy court declared that one of FAAI’s liens
13   was invalid and that the other was subject to bona fide dispute
14   and, hence, the Properties could and would be sold free and clear
15   of the alleged liens in accordance with § 363(f)(4).     The
16   bankruptcy court entered an order granting Lesso’s sale motion,
17   and FAAI appealed.    Because it is impossible for us to provide
18   FAAI with any meaningful relief on the state of this record, we
19   DISMISS this appeal as moot.
20                                   FACTS
21        In September 2007, Lesso commenced a dissolution proceeding
22   against her ex-husband, Piotr Andrzejewski (“Andrzejewski”), in
23
24        ***
            Hon. Dennis Montali, United States Bankruptcy Judge for
     the Northern District of California, sitting by designation.
25
          1
26         Unless specified otherwise, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
27   all “Rule” references are to the Federal Rules of Bankruptcy
     Procedure, Rules 1001-9037. All “Civil Rule” references are to
28   the Federal Rules of Civil Procedure.

                                       2
 1   the Family Law Division of the Los Angeles Superior Court
 2   (“Family Court”) (LASC Case No. GD041694), and the Family Court
 3   entered an interlocutory judgment of dissolution on January 21,
 4   2011.       FAAI represented Lesso in the dissolution proceeding
 5   between October 2008 and June 2010.      This representation
 6   ultimately led to a dispute between Lesso and FAAI over fees.        It
 7   is undisputed that Lesso paid FAAI over $400,000 in attorney’s
 8   fees, but FAAI claims that Lesso owes it hundreds of thousands of
 9   dollars more.
10           In the course of the dissolution proceeding, the Family
11   Court made several rulings significant to the parties’ fee
12   dispute.      First, on October 8, 2009, the Family Court issued an
13   order (“$375,000 Judgment”) against Andrzejewski that in relevant
14   part awarded Lesso $375,000 under Cal. Fam. Code § 2030(a)(1),2
15   as pendente lite attorney’s fees, on account of fees she then
16   owed FAAI and fees she expected to owe FAAI in the future.         While
17   the $375,000 Judgment stated that the fees were awarded to Lesso,
18
             2
19            The statute provides in relevant part:

20           (a)(1) In a proceeding for dissolution of marriage,
             nullity of marriage, or legal separation of the
21           parties, and in any proceeding subsequent to entry of a
             related judgment, the court shall ensure that each
22
             party has access to legal representation, including
23           access early in the proceedings, to preserve each
             party's rights by ordering, if necessary based on the
24           income and needs assessments, one party, except a
             governmental entity, to pay to the other party, or to
25           the other party's attorney, whatever amount is
26           reasonably necessary for attorney's fees and for the
             cost of maintaining or defending the proceeding during
27           the pendency of the proceeding.

28   Cal. Fam. Code § 2030(a)(1).

                                          3
 1   it also directed Andrzejewski to wire the fees to FAAI’s trust
 2   account.     To date, Andrzejewski has not satisfied the $375,000
 3   Judgment.
 4        Much of the current dispute between Lesso and FAAI arises
 5   from the $375,000 Judgment because of its language directing
 6   Andrzejewski to wire the fees to FAAI’s trust account and because
 7   of the language of Cal. Fam. Code § 2030(a)(1), which among other
 8   things directs the Family Court to order payment of such fees
 9   either to a party or that party’s attorney.    FAAI claims that it
10   – not Lesso – is the judgment creditor entitled to enforce the
11   $375,000 Judgment.    Lesso contends that she – not FAAI – is the
12   judgment creditor entitled to enforce the $375,000 Judgment.
13            After FAAI ceased representing Lesso in the dissolution
14   proceeding in June 2010, it focused its efforts on recovering the
15   additional attorney’s fees it claimed Lesso owed it (“Additional
16   Fees”).    While some of its collection efforts were aimed directly
17   at Lesso, others were aimed at Andrzejewski based on its supposed
18   rights under the $375,000 Judgment.    For example, in June 2010,
19   within days of Lesso terminating FAAI as her counsel, FAAI
20   recorded an abstract of judgment (“Abstract”) in which it
21   identified itself as the judgment creditor of the $375,000
22   Judgment.3
23        FAAI also sought to enforce its purported judgment creditor
24   rights by filing a motion in the Family Court seeking an
25
          3
26         Even before Lesso terminated FAAI as her counsel, FAAI
     sought and obtained a writ of execution on the $375,000 Judgment
27   (“Writ Of Execution”), which identified FAAI as the judgment
     creditor. FAAI claims that Lesso consented to FAAI obtaining the
28   Writ Of Execution in its own name as judgment creditor.

                                        4
 1   assignment of rents from the Properties.      Lesso opposed that
 2   motion.   The Family Court held a hearing on the assignment of
 3   rents motion on August 30, 2010.       At the hearing, the Family
 4   Court recited the respective positions taken by Lesso and FAAI.
 5   According to the Family Court, Lesso argued that FAAI was not a
 6   bona fide judgment creditor and that she was the person entitled
 7   to enforce the $375,000 Judgment.      As for FAAI, the Family Court
 8   stated that FAAI pointed to the Writ Of Execution and the
 9   Abstract as supporting its claim to be the judgment creditor
10   under the $375,000 Judgment.   The Family Court agreed with Lesso.
11   It in essence held that, in granting the $375,000 Judgment, it
12   never had intended for FAAI to be able to attach that amount of
13   money.4
14
          4
15         FAAI claims that at the August 30, 2010 hearing the Family
     Court never addressed whether FAAI was a bona fide creditor
16   entitled to enforce the $375,000 Judgment. According to FAAI,
     the form of order the Family Court signed therefore should not
17   have purported to resolve that issue. But page 6 of the
     August 30, 2010 hearing transcript tends to contradict FAAI’s
18   claim. We acknowledge that page 6 and many other pages of that
19   transcript are subject to legibility problems, but we are
     comfortable that a sufficient amount of the transcript is
20   legible, such that we have accurately reflected in this decision
     the gist of the Family Court’s relevant statements. In any
21   event, the content of the written order controls over any alleged
     inconsistency with the Family Court’s oral ruling. See Kong v.
22
     City of Hawaiian Gardens Redevelopment Agency, 134 Cal.Rptr.2d
23   260, 265 n.9 (Cal. App. 2002). We apply the same rule to
     bankruptcy court orders. See Cashco Fin. Servs., Inc. v. McGee
24   (In re McGee), 359 B.R. 764, 774 n.9 (9th Cir. BAP 2006).
25        FAAI claims to have obtained a full and legible copy of the
26   August 30, 2010 Family Court hearing transcript. We will not
     consider the more legible version of the transcript at all,
27   because it was not made available to the bankruptcy court before
     it ruled. But FAAI only saw fit to attach to its opening appeal
28                                                      (continued...)

                                        5
 1        The Family Court thereafter entered its order denying FAAI’s
 2   assignment of rents motion (“Rents Assignment Denial Order”).    In
 3   that order the Family Court explicitly held that FAAI was not
 4   entitled to an assignment of rents because it was not a bona fide
 5   judgment creditor and was not entitled to the Writ Of Execution
 6   for $375,000.
 7        In addition to the judgment lien (“Judgment Lien”) arising
 8   from FAAI’s recordation of its Abstract, FAAI claimed to hold a
 9   valid attorney fee and cost lien (“Charging Lien”) against all of
10   Lesso’s property.    The Charging Lien allegedly arose from FAAI’s
11   hourly attorney fee agreements (“Fee Agreements”) with Lesso.    On
12   June 25, 2010, in furtherance of its purported Charging Lien,
13   FAAI filed in the Family Court a notice of attorney fee and cost
14   lien for $625,000.
15        FAAI also initiated a collection action against Lesso.     On
16   July 14, 2010, FAAI sued Lesso in the Civil Division of the Los
17   Angeles County Superior Court (“State Court”) seeking to recover
18   all of the Additional Fees Lesso allegedly owed it.   In September
19   2011, that matter was heard pursuant to mandatory binding
20   arbitration in accordance with the terms of the Fee Agreements.
21   In October 2011, the arbitrator issued an award (“Arbitration
22   Award”) finding, among other things, that the Abstract was
23   “invalidated by the [Family Court], and the [Judgment Lien]
24
          4
           (...continued)
25   brief (Ex. A thereto) a single page – page 7 – from its more-
26   legible version of the transcript. Apparently, FAAI believes
     that page 7 supports its version of what transpired at the
27   hearing. We presume that FAAI did not make available to the
     Panel the more legible version of page 6 from the same transcript
28   because it does not support its version of events.

                                       6
 1   should be expunged and title cleared.”    Arbitration Award
 2   (Oct. 12, 2011) at p. 12; see also id. at 7.    The arbitrator
 3   further found that FAAI had no right under the Fee Agreements to
 4   a Charging Lien against the Properties.   Id. at 12.   Ultimately,
 5   the arbitrator concluded: “[1] [FAAI] shall recover no additional
 6   attorney fees, costs or damages; [2] The lien recorded by [FAAI]
 7   is invalid and should be expunged; [and 3] [FAAI] need not refund
 8   any of the $480,998.68 previously paid [by Lesso].”    Id. at 13.
 9        On January 19, 2012, the State Court confirmed the
10   Arbitration Award in its entirety.   In addition, the California
11   Court of Appeal recently affirmed the State Court’s judgment
12   confirming the Arbitration Award.    See Fuchs & Associates, Inc.
13   v. Lesso, No. B239246, 2013 WL 74441 (Cal. Ct. App. Jan. 8, 2013,
14   modified on denial of reh’g, January 28, 2013).    A discretionary
15   appeal was lodged with the California Supreme Court.   See Fuchs &
16   Associates v. Lesso, No. S208621 (Cal. S. Ct. Feb. 14. 2013).
17   However, on May 1, 2013, the California Supreme Court denied
18   review.
19        Meanwhile, Lesso filed her chapter 11 bankruptcy case on
20   May 26, 2011, and she moved to sell the Properties under § 363(f)
21   on August 6, 2012 (“Sale Motion”).   Several parties, including
22   FAAI, responded to the Sale Motion, and Lesso filed replies
23   addressing each response.   On August 30, 2012, the bankruptcy
24   court held its first hearing on the Sale Motion.   Shortly before
25   that hearing, the bankruptcy court issued a lengthy and detailed
26   tentative ruling setting forth a history of key events from the
27   dissolution proceeding and addressing the parties’ issues.
28        For purposes of this appeal, however, only two issues are

                                      7
 1   important.   First, as to the Judgment Lien, the bankruptcy court
 2   relied on the Family Court’s Rents Assignment Denial Order to
 3   hold that the Judgment Lien was invalid.   In light of that
 4   holding, the bankruptcy court rejected FAAI’s objection to the
 5   sale to the extent that objection was based on its Judgment Lien.
 6        Second, as to the Charging Lien and the Additional Fees, the
 7   bankruptcy court referenced the Arbitration Award, which had
 8   determined that Lesso owed no Additional Fees to FAAI.   The
 9   bankruptcy court further noted that the State Court had confirmed
10   the Arbitration Award and that the confirmed Arbitration Award
11   was the subject of an appeal then pending in the California Court
12   of Appeal.   Based thereon, the bankruptcy court held that FAAI's
13   Charging Lien claim could be dealt with under § 363(f)(2).     FAAI
14   has not challenged this holding on appeal.
15        The bankruptcy court did not fully dispose of the Sale
16   Motion immediately at or after the August 30, 2012 hearing.
17   Instead, the bankruptcy court continued the hearing until
18   September 27, 2012.   The continuance gave Lesso the opportunity
19   to serve additional notice of the sale and gave interested
20   parties the opportunity to file supplemental briefs on the issues
21   they raised in response to the proposed sale.
22        At the September 27, 2012 continued sale hearing, the
23   bankruptcy court adopted as its final ruling a slightly amended
24   version of its August 2012 tentative ruling.    For our purposes,
25   the final ruling did not materially differ from the August 2012
26   tentative ruling regarding the bankruptcy court’s disposition of
27   the Judgment Lien (held invalid), the Charging Lien (held subject
28   to bona fide dispute), and the Additional Fees Lesso allegedly

                                      8
 1   owed FAAI (also held subject to bona fide dispute).
 2        Based on the final ruling, the bankruptcy court entered on
 3   October 5, 2012, its order approving the sale of the Properties
 4   free and clear of all liens under § 363(f) (“Sale Order”), and
 5   FAAI timely filed a notice of appeal from the Sale Order on
 6   October 10, 2012.
 7                               JURISDICTION
 8        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
 9   §§ 1334 and 157(b)(2)(N).   Subject to the mootness discussion set
10   forth below, we have jurisdiction under 28 U.S.C. § 158.
11                                  ISSUE
12        Is this appeal moot?
13                           STANDARD OF REVIEW
14        Constitutional mootness is a jurisdictional issue that we
15   review de novo.   See Hunt v. Imperial Merchant Servs., Inc.,
16   560 F.3d 1137, 1141 (9th Cir. 2009).
17                                DISCUSSION
18        This Panel lacks jurisdiction over appeals when they do not
19   present an actual “case or controversy” within the meaning of
20   Article III of the Constitution.       See Motor Vehicle Cas. Co. v.
21   Thorpe Insulation Co. (In re Thorpe Insulation Co.), 677 F.3d
22   869, 880 (9th Cir. 2012) (citing Felster Publ'g v. Burrell
23   (In re Burrell), 415 F.3d 994, 998 (9th Cir. 2005)).      In turn, an
24   appeal is considered moot, and does not present a live case or
25   controversy, when it would be impossible for us to grant any
26   effective or meaningful relief to the appellant even if it were
27   to prevail on the merits of its appeal.      See id.   Sometimes, the
28   existence of a final, non-appealable order may render an appeal

                                        9
 1   from another order moot because it would be impossible to grant
 2   relief from the appealed order without unwinding the effect of
 3   the final, non-appealable order.      See Parks v. Drummond
 4   (In re Parks), 475 B.R. 703, 706 (9th Cir. BAP 2012); Omoto v.
 5   Ruggera (In re Omoto), 85 B.R. 98, 99–100 (9th Cir. BAP 1988).
 6        In this appeal, FAAI has not sought to unwind the sale.
 7   Instead, FAAI has sought to establish its entitlement to a share
 8   of the sale proceeds based on the Judgment Lien, the Charging
 9   Lien and the Additional Fees.   But the California Court of Appeal
10   has affirmed the State Court’s judgment confirming the
11   Arbitration Award, which in relevant part held: (1) that the
12   Judgment Lien was invalid, (2) that FAAI had no right to a
13   Charging Lien under the Fee Agreements, and (3) that in any event
14   Lesso did not owe any Additional Fees to FAAI.     Those holdings
15   are now final, and they are not subject to further appeal.       As a
16   result, even if we were to conclude that the bankruptcy court
17   committed some form of reversible error, our vacatur or reversal
18   of the bankruptcy court’s sale order would not provide FAAI with
19   any meaningful relief.    In light of the Arbitration Award, FAAI
20   still would not be entitled to any share of the proceeds from the
21   sale of the Properties.
22        While Lesso’s sale motion was a core bankruptcy matter, see
23   28 U.S.C. 157(b)(2)(N), the respective rights and interests of
24   the parties in the Properties and the sale proceeds were
25   determined by reference to state law.     See Butner v. United
26   States, 440 U.S. 48, 55 (stating that property interests in
27   bankruptcy proceedings generally are defined by state law);
28   Ahcom, Ltd. v. Smeding, 623 F.3d 1248, 1250 (9th Cir. 2010)


                                      10
 1   (same).    Here, the State Court’s order confirming the Arbitration
 2   Award effectively established that, under California law, FAAI
 3   had no valid claim against Lesso and no valid interest in the
 4   sale proceeds.   As a matter of comity and federalism, we
 5   generally must give deference to state court judgments and
 6   proceedings.   See, e.g., Marciano v. Chapnick (In re Marciano),
 7   708 F.3d 1123, 1128 (9th Cir. 2013); G.C. and K.B. Investments,
 8   Inc. v. Wilson, 326 F.3d 1096, 1107 (9th Cir. 2003).
 9        Under these circumstances, we cannot grant FAAI any relief
10   that would improve its position vis-a-vis Lesso or the proceeds
11   from sale of the Properties.   Accordingly, this appeal is moot.
12        We acknowledge that FAAI also lacks standing.    More
13   specifically, in light of the Arbitration Award, FAAI no longer
14   has a stake in the sale or the proceeds.   In this instance,
15   mootness is manifesting itself as “‘the doctrine of standing set
16   in a time frame: [t]he requisite personal interest that must
17   exist at the commencement of the litigation (standing) must
18   continue throughout its existence (mootness).’”   Arizonans for
19   Official English v. Ariz., 520 U.S. 43, 68 n.22 (1997) (quoting
20   United States Parole Comm'n v. Geraghty, 445 U.S. 388, 397
21   (1980)).   Accord, Foster v. Carson, 347 F.3d 742, 745 (9th Cir.
22   2003) (quoting Cook Inlet Treaty Tribes v. Shalala, 166 F.3d 986,
23   989 (9th Cir. 1999)).   While in some contexts, this statement
24   might oversimplify the two doctrines, see Friends of the Earth,
25   Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189-93
26   (2000), the statement is quite apt here.   Simply put, because the
27   Arbitration Award effectively has stripped FAAI of its standing,
28

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 1   this appeal has become moot.5
 2                                 CONCLUSION
 3           For the reasons set forth above, we DISMISS this appeal as
 4   moot.
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           While we can and do hold in the alternative that FAAI lacks
26   standing, we need not alter our disposition of this appeal based
     on mootness. Indeed, it would be permissible for us to dismiss
27   based on mootness without addressing the standing issue at all.
     See, e.g., Cook Inlet Treaty Tribes, 166 F.3d at 989 (citing
28   Arizonans for Official English, 520 U.S. at 66–67).

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