FILED

UNITED STATES COURT OF APPEALS

MAY 1 2020

FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

In re: NOAM BOUZAGLOU, No. 18-60054

Debtor, BAP No. 17-1253

------------------------------

ORDER

NOAM BOUZAGLOU,

Appellant,

v.

JEANNE HAWORTH, Successor Trustee to McGinty Family Trust; KATHLEEN

MCGINTY,

Appellees.

Before: SCHROEDER, BERZON, and R. NELSON, Circuit Judges.

The panel has voted to deny the petition for panel rehearing. Judges Berzon

and R. Nelson have voted to deny the petition for rehearing en banc, and Judge

Schroeder has so recommended.

The full court has been advised of the petition for rehearing en banc and no

judge has requested a vote on whether to rehear the matter en banc. Fed. R. App.

P. 35.

The petition for panel rehearing and rehearing en banc are DENIED. The memorandum disposition filed on March 25, 2020, is withdrawn. A

new memorandum disposition will be filed concurrently with this order.

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FILED

NOT FOR PUBLICATION

MAY 1 2020

UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: NOAM BOUZAGLOU, No. 18-60054

Debtor, BAP No. 17-1253

------------------------------

MEMORANDUM*

NOAM BOUZAGLOU,

Appellant,

v.

JEANNE HAWORTH, Successor Trustee to McGinty Family Trust; KATHLEEN

MCGINTY,

Appellees.

Appeal from the Ninth Circuit Bankruptcy Appellate Panel Spraker, Kurtz, and Faris, Bankruptcy Judges, Presiding

Argued and Submitted February 14, 2020 Pasadena, California

Before: SCHROEDER, BERZON, and R. NELSON, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Noam Bouzaglou and his alter ego corporation were found liable for

substantial fraud damages after a state court trial. Bouzaglou appealed the

judgment. He then filed for bankruptcy, and his state court appeal was dismissed

because he no longer had standing to pursue his appeal.

Bouzaglou now appeals the BAP’s affirmance of the bankruptcy court

judgment finding the debt non-dischargeable. He contends that because he was

unable to appeal the state court judgment against him personally, that judgment

does not preclude him from retrying the fraud issues in bankruptcy court.

We affirm the BAP’s ruling that Bouzaglou is bound by the state court

judgment of fraud. There are several reasons. First, Bouzaglou chose to file for

bankruptcy, thereby voluntarily relinquishing his personal right to appeal. The

bankruptcy code provides that legal interests are considered property of a debtor’s

estate, 11 U.S.C. § 541(a)(1), and we have held that a bankruptcy trustee has the

exclusive right to raise legal claims on behalf of the estate, Estate of Spirtos v. One

Bernardino Cty. Superior Court SPR 02211, 443 F.3d 1172, 1175 (9th Cir. 2006).

The trustee here did not appeal. Second, while there remained the possibility that

the bankruptcy court could order the trustee to abandon the appeal rights, the

bankruptcy court denied Bouzaglou’s motion to compel abandonment, and he

neither re-filed the motion nor challenged that ruling. Finally, Bouzaglou’s alter

2 ego corporation did appeal the fraud judgment against it in state court and lost.

The state appellate court explained that substantial evidence supported the fraud

judgment and the damages award against the corporation. There is no indication

that the result would have been any different if Bouzaglou personally had appealed

the parallel judgment against him.

The bankruptcy court rested its conclusion on California principles of issue

preclusion. See Lucido v. Superior Court, 795 P.2d 1223, 1225 (Cal. 1990). All of

the required elements are met here, including the identity of issues sought to be

litigated with issues already litigated in the state court proceeding. Bouzaglou’s

only remaining argument appears to be that of there being some unfairness in his

inability to appeal the fraud judgment. Since his alter ego corporation did appeal

the merits of the fraud judgment against it, which was based on the same evidence,

there is no conceivable unfairness.

AFFIRMED.

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