In re: BRUCE ELIEFF v. HOWARD M. EHRENBERG, Chapter 7 Trustee

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: BRUCE ELIEFF,
Debtor,
------------------------------
TODD KURTIN,
Appellant,
v.
HOWARD M. EHRENBERG, Chapter 7
Trustee,
Appellee.
No. 22-60008
BAP No. 21-1081
MEMORANDUM*
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Spraker, Faris, and Lafferty III, Bankruptcy Judges, Presiding
Submitted February 13, 2023 **
Pasadena, California
Before: TASHIMA, HURWITZ, and BADE, Circuit Judges.
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
FILED
FEB 24 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Todd Kurtin appeals from an opinion of the Bankruptcy Appellate Panel
(“BAP”) affirming decisions of the bankruptcy court that (1) subordinated Kurtin’s
bankruptcy claim under 11 U.S.C. § 510(b); (2) subordinated a judgment lien
under § 510(b); and (3) denied motions to continue and excluded evidence from
the summary-judgment proceedings. We have jurisdiction under 28 U.S.C. § 158,
and we affirm.
1. The BAP did not err in concluding that Kurtin’s bankruptcy claim was
properly subordinated under § 510(b), which provides that a bankruptcy claim “for
damages arising from the purchase or sale” of a security must be subordinated to
“all claims or interests that are senior to or equal the claim or interest represented
by such security.” 11 U.S.C. § 510(b). The term “arising from” in § 510(b) is
interpreted broadly, requiring only a sufficient “nexus or causal relationship
between the claim and the purchase or sale of securities.” Penso Trust Co. v.
Tristar Esperanza Props., LLC (In re Tristar Esperanza Props., LLC), 782 F.3d
492, 497 (9th Cir. 2015) (quotation omitted).
As in Tristar, Kurtin’s claim arises from a state-court judgment in an action
for failure to fully reimburse an equity holder for the value of his stake. See id.
Kurtin’s attempts to distinguish Tristar are unavailing, as is his argument that the
underlying settlement agreement was severable such that the first settlement
payment fully compensated him for his equity interest.

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2. The BAP also did not err in concluding that the judgment lien was also
subject to subordination under § 510(b). A lien “is a ‘claim’ within the terms of”
the Bankruptcy Code. Johnson v. Home State Bank, 501 U.S. 78, 84 (1991).
3. Finally, the BAP did not err in determining that the bankruptcy court
properly denied Kurtin’s motion to continue discovery under Rule 56(d) and in
excluding certain portions of evidentiary declarations during the summary-
judgment proceedings. The discovery sought in Kurtin’s Rule 56(d) motion was
not relevant to any issue before the bankruptcy court, given the plain language of
the settlement agreement. See, e.g., Tanadgusix Corp. v. Huber, 404 F.3d 1201,
1205 (9th Cir. 2005) (explaining that, under “general principles of federal contract
law,” where a contract is unambiguous, its terms “control, regardless of the parties’
subjective intentions shown by extrinsic evidence”); see also Bank of the West v.
Valley Nat’l Bank of Ariz., 41 F.3d 471, 477 (9th Cir. 1994) (applying a similar
principle under California law). Kurtin’s request for further discovery on the “old
and cold defense” was properly denied because the rationale for subordination in
this case is not implicated by that defense. The respective declarations were
properly excluded because they were also irrelevant to the subordination decision.
AFFIRMED.

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