Philip Henshaw v. Dane Field

MEMORANDUM

Appellants Philip and Barbara Henshaw (Henshaw Parents) appeal from the district court’s order affirming the bankruptcy court’s dismissal of their counterclaim for reformation. We have jurisdiction pursuant to 28 U.S.C. § 158 (d)(1), and we reverse and remand.

“We review the district court’s decision on appeal from a bankruptcy court order de novo.” Dreyfuss v. Cory (In re Cloobeck), 788 F.3d 1243, 1245 (9th Cir. 2015). The bankruptcy court’s legal conclusions are reviewed de novo, and its factual findings are reviewed for clear error. Id. The availability of collateral estoppel is a mixed question of law and fact that is reviewed de novo. Town of N. Bonneville v. Callaway, 10 F.3d 1505 , 1508 (9th Cir. 1993).

The Henshaw Parents argue that the bankruptcy court incorrectly held that collateral estoppel bars their counterclaim for reformation. Under federal law, collateral estoppel is available only when the contested issue is “identical to the one alleged in the prior litigation.” Trevino v. Gates, 99 F.3d 911, 923 (9th Cir. 1996), quoting Callaway, 10 F.3d at 1508. Four factors are relevant to this analysis: (1) whether there is “substantial overlap” in the…