NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS APR 18 2022

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: HALSEY MCLEAN MINOR, No. 21-55360

Debtor, D.C. No. 2:20-cv-03626-ODW ______________________________

HALSEY MCLEAN MINOR, MEMORANDUM*

Appellant,

v.

UNITED STATES OF AMERICA,

Appellee.

Appeal from the United States District Court for the Central District of California Otis D. Wright II, District Judge, Presiding

Argued and Submitted April 7, 2022 Pasadena, California

Before: MURGUIA, Chief Judge, and GRABER and BEA, Circuit Judges.

Halsey McLean Minor appeals from the district court’s order that affirmed

the bankruptcy court’s order, granting the United States’ motion for judgment on

the pleadings and denying Minor’s motion for judgment on the pleadings. Minor

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. initiated this adversary action in the bankruptcy court, seeking a declaratory

judgment determining the amount of unsatisfied priority tax debt that Minor still

owes to the Internal Revenue Service (“IRS”). We have jurisdiction under 28

U.S.C. § 158(d)(1) and affirm.

“We review the district court’s decision on appeal from the bankruptcy court

de novo.” Mano-Y & M, Ltd. v. Field (In re Mortg. Store, Inc.), 773 F.3d 990, 994

(9th Cir. 2014). The bankruptcy court’s “[f]indings of fact are reviewed under the

clearly erroneous standard” and “legal conclusions are reviewed de novo.” Id. We

review de novo the grant of a motion for judgment on the pleadings. Harris v.

County of Orange, 682 F.3d 1126, 1131 (9th Cir. 2012).1

Tax debt that is entitled to priority under 11 U.S.C. § 507(a)(8) is

nondischargeable in bankruptcy under 11 U.S.C. § 523(a)(1)(A). The parties agree

that Minor’s tax debt for tax year 2009 meets the requirements of 11 U.S.C.

§ 507(a)(8) (even though the IRS’s proof of claim included that debt in its secured

claim) and, therefore, the 2009 tax debt was not discharged by the bankruptcy

proceeding. Ordinarily, the IRS may pursue additional nondischargeable debt for a

particular tax year after the close of a bankruptcy case, even if the IRS included

debt for that year in a proof of claim during the bankruptcy proceeding. DePaolo

1 Because the parties are familiar with the facts, we do not repeat them here, except where necessary to provide context for our ruling.

2 v. United States (In re DePaolo), 45 F.3d 373, 376 (10th Cir. 1995); see also

Dolven v. Bartleson (In re Bartleson), 253 B.R. 75, 80 (B.A.P. 9th Cir. 2000).

Minor’s sole contention is that, under the doctrines of claim preclusion and

issue preclusion, the Stipulation “allowing” the IRS’s priority claim of

$997,869.07 and the court order granting the Stipulation preclude the IRS from

collecting more than $997,869.07 in priority debt. Because the Trustee distributed

to the IRS $882,680.74 in partial fulfilment of the $997,869.07 claim of priority

debt, Minor contends that he cannot now owe more than $115,188.33.

“Under the doctrine of claim preclusion, [1] a final judgment on the merits

in a case precludes [2] a successive action between identical parties or privies [3]

concerning the same claim or cause of action.” Wojciechowski v. Kohlberg

Ventures, LLC, 923 F.3d 685, 689 (9th Cir. 2019) (citation and quotation marks

omitted). The party seeking to rely on the doctrine “must establish that preclusion

applies.” Id. “We look to the intent of the settling parties to determine the

preclusive effect of [an order] entered in accordance with a settlement agreement.”

Id.

“Issue preclusion prevents a party from relitigating an issue decided in a

previous action if four requirements are met: (1) there was a full and fair

opportunity to litigate the issue in the previous action; (2) the issue was actually

litigated in that action; (3) the issue was lost as a result of a final judgment in that

3 action; and (4) the person against whom collateral estoppel is asserted in the

present action was a party or in privity with a party in the previous action.”

Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1050 (9th Cir. 2008) (citation and

quotation marks omitted). “The burden is on the party seeking to rely upon issue

preclusion to prove each of the elements have been met.” Id. at 1050–51. “A

stipulation may meet the fully litigated requirement where it is clear that the parties

intended the stipulation of settlement and judgment entered thereon to adjudicate

once and for all the issues raised in that action.” United States v. Real Prop.

Located at 22 Santa Barbara Drive, 264 F.3d 860, 873 (9th Cir. 2001) (citation

and quotation marks omitted).

Minor has not met his burden to show that either claim or issue preclusion

applies because the Stipulation did not resolve the same claim or issue that Minor

now raises, namely, the full amount of nondischargeable tax debt, penalties, and

interest for tax year 2009 that the IRS may pursue. The expressed intention of the

parties, as evidenced in the Stipulation, determines the preclusive effect of the

claims or issues resolved in the Stipulation. See Wojciechowski, 923 F.3d at 689;

22 Santa Barbara Drive, 264 F.3d at 873.

Here, the terms of the Stipulation make clear that the Trustee and the taxing

agencies entered into the Stipulation to divide up the limited funds remaining in the

bankruptcy estate, not to cap the amount of nondischargeable tax debt that the IRS

4 could collect from Minor after the bankruptcy estate had been fully distributed.

Minor argues, however, that the Stipulation was not for the sole purpose of

determining the distribution from the bankruptcy estate because the Stipulation

also fixed the amount of the IRS’s priority claim. But increasing the amount of the

taxing authorities’ priority claims “allowed” by the Stipulation would have had no

effect on the final distribution that any party to the Stipulation received. The

Stipulation ensured that, after the (reduced) secured claims and administrative

costs were paid, the IRS and California Franchise Tax Board would receive equal

payment on their priority claims until the bankruptcy estate was exhausted, ahead

of the $55 million of allowed general unsecured claims. The amounts of the

priority claims “allowed” by the Stipulation, which were merely copied from the

amounts in the taxing agencies’ amended proofs of claims, were sufficient to

ensure that the remaining free cash in the bankruptcy estate would be received by

the taxing agencies in payment for priority claims.

Minor relies on In re Matunas, 261 B.R. 129 (Bankr. D.N.J. 2001), and In re

Breland, 474 B.R. 766 (Bankr. S.D. Ala. 2012). But, in those cases, the IRS

entered into agreements with debtors. In In re Matunas, the IRS entered into a

stipulation with the debtor that “determine[ed] the amounts owed to the IRS.” 261

B.R. at 134. Similarly, in In re Breland, the IRS and debtor jointly “negotiated and

submitted” a consent order that “settled a confirmation dispute,” 474 B.R. at 767,

5 769. By contrast, and similar to this case, a stipulation between a creditor and a

bankruptcy trustee that certain “claims would be allowed” or “withdrawn” against

the bankruptcy estate has no preclusive effect on the dischargeability of the

creditor’s claim, when the agreement “did not purport to resolve” the

dischargeability of claims against the debtor. Hawaii v. Parsons (In re Parsons),

505 B.R. 540, 545–46 (Bankr. D. Haw. 2014).

Claim preclusion, unlike issue preclusion, does not apply for the additional

reason that Minor is not in privity with any of the parties to the Stipulation. See

Wojciechowski, 923 F.3d at 689.

AFFIRMED.

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