Jacqueline C. Melcher

OCR transcription for search; preserved printed pages are authoritative

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For The Northern District Of California

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UNITED STATES BANKRUPTCY COURT

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February 06, 2012

GLORIA L. FRANKLIN, CLERK

U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA

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NORTHERN DISTRICT OF CALIFORNIA
In re Case No. 01-53251-ASW

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JACQUELINE C. MELCHER, |] Chapter 7

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Debtor. ]

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MEMORANDUM DECISION DENYING (1) DEBTOR’S MOTION FOR
RECONSIDERATION OF THE ORDER APPROVING THE COMPROMISE
WITH THE PROBATE ESTATE OF TERRENCE P. MELCHER
(2) DEBTOR’S MOTION TO COMPEL; AND (3) DEBTOR’S
MOTION FOR AN ORDER TO SHOW CAUSE RE CONTEMPT
Before the Court are two motions and an Order to Show Cause
re Contempt filed by Jacqueline C. Melcher (“Debtor”). On
September 23, 2011, Debtor filed a motion to compel (“Motion to
Compel”) the Chapter 7 Trustee John Richardson (“Trustee”) to turn
over to Debtor certain information. On October 13, 2011, Debtor
filed a motion to amend and reconsider (“Motion to Reconsider”)
this Court’s memorandum decision (“Memorandum Decision”) entered on
October 3, 2011 granting Trustee’s Motion for Order Authorizing
Compromise (“Compromise Motion”) with the Probate Estate of
Terrence P. Melcher (“Probate Estate”). On October 20, 2011,

Debtor filed an Ex Parte Order to Show Cause for Contempt

(“Contempt Motion”) requesting turnover of the same information as

MEMORANDUM DECISION 25

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in the Motion to Compel as well as additional other information.
Trustee opposes all three matters. A hearing was held on all three
matters on November 15, 2011, and all matters were taken under
submission after the filing of additional papers by the parties.

Trustee is represented by Charles P. Maher, Esq. of Luce,
Forward, Hamilton & Scripps LLP. The Probate Estate is represented
by Lance N. Jurich, Esq. of Loeb & Loeb LLP. Debtor is appearing
in propria persona.

This Memorandum Decision constitutes the Court’s findings of
fact and conclusions of law, pursuant to Rule 7052 of the Federal

Rules of Bankruptcy Procedure.

I.

FACTS AND PROCEDURAL BACKGROUND

The Court hereby incorporates the facts as set forth in the
Memorandum Decision at 2:11 - 7:28 as well as the terms defined in
the entire Memorandum Decision.

A. Motion to Compel and Contempt Motion

On September 23, 2011, Debtor filed the Motion to Compel
seeking to have this Court compel Trustee to turn over several
decuments relating to the compromise with the Probate Estate. The
Motion to Compel was filed while the Compromise Motion was under
submission and 10 days before the Court issued the Memorandum
Decision granting the Compromise Motion. In the Motion to Compel,
Debtor asked for: (1) Debtor’s trial exhibits from the Dissolution
Trial; (2) proof of Terrence Melcher’s contributions to the
Stonewall Beach Property; (3) copies of Terrence Melcher’s tax

returns; and (4) Trustee’s analysis of the value of the

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Entertainment Interests. The Motion to Compel was set for hearing
on October 21, 2011.

On October 20, 2011, Trustee late-filed an opposition to the
Motion to Compel. Also on October 20, 2011, Debtor filed an Ex
Parte Order to Show Cause for Contempt (“Contempt Motion”). In the
Contempt Motion, Debtor asserted that Debtor requested turnover of
the following in the Motion to Compel: (1) Debtor’s trial exhibits
from the Dissolution Trial; (2) copies of Terrence Melcher’s tax
returns in Trustee’s possession; (3) Trustee’s analysis of the
value of the Entertainment Interests; (4) Trustee’s analysis of the
2120 Action; (5) proof of Terrence Melcher’s contributions to the
Stonewall Beach Property; (6) information received by Trustee from
the subpoena issued to the Walt Disney Company (“Disney”) allegedly
showing thousands of licensing agreements issued by Disney for the
musical copyright of the song “Kokomo;” and (7) an independent
audit of the Entertainment Interests.

At the October 21, 2011 hearing, the Court continued the
Motion to Compel to November 15, 2011 and permitted Debtor an
opportunity to reply to Trustee’s late-filed opposition. On
November 7, 2011, Trustee filed an opposition to the Contempt
Motion. Also on November 7, 2011, Debtor filed a reply to the
Motion to Compel. On November 14, 2011, Debtor filed an amendment
to Debtor’s reply to the Motion to Compel. On November 15, 2011,
Debtor filed a response to Trustee’s opposition to the Contempt
Motion. The Motion to Compel and Contempt Motion were taken under

submission at the November 15, 2011 hearing.

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B. Motion to Reconsider

On October 3, 2011, the Court filed the Memorandum Decision
granting the Compromise Motion. The Memorandum Decision was
entered on October 4, 2011. On October 13, 2011, Debtor filed the
Motion to Reconsider. In the Motion to Reconsider, Debtor asked
for certain corrections to the facts as set forth in the Memorandum
Decision as well as reconsideration of the Memorandum Decision.
Debtor filed a corrected and supplemental Motion to Reconsider on
October 14, 2011. Also on October 14, 2011, Trustee set the Motion
to Reconsider for hearing on November 15, 2011.

On October 24, 2011, Trustee filed an opposition to the
Motion to Reconsider. On October 25, 2011, the Court entered an
order authorizing the compromise between Trustee and the Probate
Estate (“Order”).

On November 4, 2011, Debtor filed a request for clarification
of the Order and asked that if the Order is not part of the Motion
to Reconsider, the.Court reconsider the Order. On both November 7
and 10, 2011, Debtor filed two separate documents entitled
“Response to Memorandum Dated October 4, 2011.” The Court took the
Motion to Reconsider under submission at the November 15, 2011
hearing.

After the three matters were submitted, Debtor filed partial
exhibits from the Dissolution Trial as well as the declaration of
Beach Boy member Al Jardine. Debtor subsequently asked for
permission to file additional papers relating to the Motion to
Reconsider. The Court granted Debtor such additional time with
Debtor’s papers to be filed by December 9, 2011 and Trustee’s

response due by December 16, 2011.

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On December 9, 2011, Debtor filed additions and
clarifications to Debtor’s Motion to Reconsider. On December 13,
2011, Debtor filed the complete deposition of Terrence Melcher. On
December 15, 2011, Trustee filed a response to Debtor’s additional
pleadings. On December 16 and 19, 2011, Debtor filed further
papers related to the Motion to Reconsider. On December 19, 2011,
Trustee has asked that the additional pleadings filed by Debtor
after December 9, 2011 relating to the Motion to Reconsider be
stricken. On December 22, 2011, Debtor filed a response opposing
Trustee’s request and asking that Debtor’s documents not be

stricken.

Il.
ANALYSIS

Because the analysis of the Motion to Reconsider impacts the
Motion to Compel and the Contempt Motion, the Court will address
the Motion to Reconsider first.

A. Motion to Reconsider

Federal Rule of Bankruptcy Procedure 9024, which governs
relief from a judgment or order, provides that a motion for relief
from an order is governed by Federal Rule of Civil Procedure 60
(“Rule 60(b)”%). Rule 60(b) provides that a court may relieve a
party from an order for the following reasons:

(1) mistake, inadvertence, surprise, or excusable

neglect; (2) newly discovered evidence that, with

reasonable diligence, could not have been discovered in

time to move for a new trial under Rule 59(b);

(3) fraud ..., misrepresentation, or misconduct by an

opposing party; (4) the judgment is void; (5) the

judgment has been satisfied, released or discharged; it

is based on an earlier judgment that has been reversed
or vacated; or applying it prospectively is no longer

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equitable; or (6) any other reason that justifies

relief.
A motion for reconsideration is appropriate only where: (1) the
court is presented with newly discovered evidence; (2) the court
committed clear error or the initial decision was manifestly
unjust; or (3) there is an intervening change in controlling law.

School Dist. No. 1J, Multnomah County, Oregon v. Acands Inc.,

5 F.3d 1255, 1263 (9th Cir. 1993).

Debtor moves both to amend the Memorandum Decision to address
certain alleged factual inaccuracies as well as for this Court to
reconsider granting Trustee’s Compromise Motion. The Court has
reviewed the numerous papers filed by Debtor relating to the Motion
to Reconsider. The Court finds no basis on which either to amend
the Memorandum Decision or to reconsider the ruling in the
Memorandum Decision. For the most part, Debtor’s arguments either
were raised in opposition to the Compromise Motion, raise issues
that were or should have been resolved at in the Dissolution Trial,
or are irrelevant to the outcome of the Memorandum Decision.

(1) Corrections to the Memorandum Decision

Debtor first seeks to correct the Memorandum Decision at
2:14. According to Debtor, the separation between Debtor and
Terrence Melcher began in mid-1997, not in February or March 1997.
Debtor contends that this fact is important because Terrence
Melcher allegedly deferred income until after the separation date.
However, the actual date of separation is not relevant to the
Court’s determination as to whether the compromise between Trustee
and the Probate Estate meets the applicable standards under Federal

Rule of Bankruptcy Procedure 9019, that the settlement was

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1 || negotiated in good faith and is fair and equitable. In re A&C

2} Properties, 784 F.2d 1377, 1381 (9th Cir. 1986).

3 “Under res judicata, a final judgment on the
merits of an action precludes the parties or their

4 privies from relitigating issues that were or could
have been raised in that action.” Allen v. McCurry,

5 449 U.S. 90, 93, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980).
“Claim preclusion is a broad doctrine that bars

6 bringing claims that were previously litigated as well
as some claims that were never before adjudicated.”

7 Clements v. Airport Auth. of Washoe County, 69 F.3d
321, 327 (9th Cir. 1995).

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9 | Holcombe v. Hosmer, 477 F.3d 1094, 1097 (9th Cir. 2007). Here, any

10. claim for deferred income should have been resolved at the

11] Dissolution Trial and, if not resolved there, Debtor is precluded
12} from raising that claim in this bankruptcy case. There is no need
13 || for this Court to amend the Memorandum Decision.

14 Debtor. next seeks to correct the Memorandum Decision at

15} 2:17-18. According to Debtor, the multi-day Dissolution Trial

16 | consisted of several brief appearances, sometimes only an hour or
17 || two a day. The fact that there are certain days in which the court
18 | proceedings were shorter than others is irrelevant to the outcome
19 |] of the Memorandum Decision. Such facts do not alter the fact that
20 the Dissolution Trial occurred over multiple days, as stated in the
21 || Memorandum Decision. There is no need for this Court to amend the
22 || Memorandum Decision.

23 Debtor further seeks to correct the Memorandum Decision at

24} 2:18-19. According to Debtor, Debtor was forced to represent

25 | herself in the Dissolution Trial due to the withdrawal of her

26 | counsel on the eve of trial and Debtor did not choose to represent
27}herself. This clarification does not alter the fact that Debtor

28 || was in propria persona at the Dissolution Trial -- as accurately

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stated in the Memorandum Decision -- and is irrelevant to the
outcome of the Memorandum Decision. There is no need for this
Court to amend the Memorandum Decision.

Debtor further seeks to correct the Memorandum Decision at
2:25-28. According to Debtor, Debtor’s bankruptcy case was not
filed primarily to prevent the sale of the Stonewall Beach
Property. Rather, Debtor was forced to file for bankruptcy because
Terrence Melcher: (a) refused to turn over 50% of the Entertainment
Interests; (b) cut off child support; and (c) allegedly colluded
with George Soros to arrange an $8 million indemnity from the sale
of the Stonewall Beach Property to George Soros that would have
resulted in a $1.4 to $1.5 million deficit from the sale. Again,
the full reasons for Debtor filing Debtor’s chapter 11 bankruptcy
case are irrelevant to the outcome of the Memorandum Decision.
There is no need for this Court to amend the Memorandum Decision.

Debtor next seeks to correct the Memorandum Decision at
4:4-7, According to Debtor, Debtor did not fail to comply with the
provisions of the Dissolution Judgment. Rather, Debtor took in
boarders and filed an appeal of the Dissolution Judgment ~- issued
10 months after the Dissolution Trial -- and Debtor had a right to
appeal the Dissolution Judgment. Debtor objects to being put in
the same category as Terrence Melcher who Debtor asserts committed
perjury and fraud in the Dissolution Trial. Terrence Melcher
ignored state court orders to pay child support; provide an
accounting; pay monthly family bills; and pay 50% of the
Entertainment Interests to Debtor.

As set forth in the Memorandum Decision, both Terrence

Melcher and Debtor failed to perform aspects of the Dissolution

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Judgment. This is an accurate statement. Contrary to Debtor’s
assertion, the Court is not putting Debtor in the same category as
Terrence Melcher. Rather, the Court is simply stating the facts.
The Court finds no basis for this Court to amend the Memorandum
Decision as requested by Debtor.

Debtor further seeks to correct the Memorandum Decision at
4:15. According to Debtor, Debtor did not pay Terrence Melcher’s
1996 taxes. Debtor paid what was requested of her by the Internal
Revenue Service and the State of California. Debtor was declared
an innocent spouse. Debtor requested other reimbursements from the
Probate Estate for Terrence Melcher’s loan on computer equipment
for which Debtor was not to be responsible according to a written
statement Signed by Terrence Melcher. Debtor asserts that the
equipment was either sold or given away by Terrence Melcher.

The portion of the Memorandum Decision to which Debtor
objects simply sets forth the claims both parties have against the
other that are the subject of the proposed compromise. To the
extent Debtor seeks to augment the Dissolution Judgment with facts
that could or should have been raised as part of the Dissolution
Trial, namely Terrence Melcher’s alleged responsibility to Debtor
for money borrowed for equipment, Debtor is precluded from raising
that claim in this bankruptcy case. There is no need for this
Court to amend the Memorandum Decision to include allegations
raised by Debtor that Debtor is precluded from adjudicating in this
proceeding.

Debtor next’ seeks to correct the Memorandum Decision at 4:25.
According to Debtor, the $75,000 for personal property allegedly

not turned over to Terrence Melcher consists of gold records that

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are not actually gold and were given to Debtor and Terrence
Melcher’s son Ryan. Debtor raised this same assertion as part of
Debtor’s objection to the proposed compromise. Such an assertion
does not alter the fact that the Probate Estate asserts such a
claim against the bankruptcy estate. The Memorandum Decision
accurately states the Probate Estate’s asserted claim and there is
no need for this Court to amend the Memorandum Decision.

Debtor further seeks to correct the Memorandum Decision at
4:28 - 5:1. According to Debtor, Debtor did not have exclusive use
of the Stonewall Beach Property. Rather Debtor had to rent the
Stonewall Beach Property most of the time to support the debt
service on that property when Terrence Melcher abandoned that debt
service. However, it is accurate that neither Terrence Melcher nor
the Probate Estate had access to the Stonewall Beach Property after
the Dissolution Judgment, if not earlier. Moreover, such an
assertion does not alter the fact that the Probate Estate asserts
such a claim against the bankruptcy estate. The Memorandum
Decision accurately states the Probate Estate’s asserted claim and
there is no need for this Court to amend the Memorandum Decision.

Finally, Debtor seeks to correct the Memorandum Decision at
5:3-6. According to Debtor, if the Stonewall Beach Property had
sold in 2001 for $12 million, the $8 million indemnity would have
caused a $1.4 to $1.5 million deficit. Again, the Memorandum
Decision is only setting forth the claims of the Probate Estate
against the bankruptcy estate. The Memorandum Décision accurately
states the Probate Estate’s asserted claim and there is no need for

this Court to amend the Memorandum Decision.

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1 (2) Matters Allegedly Left Out of the Memorandum Decision

2 Debtor asserts that the Court omitted from the facts in the
3 || Memorandum Decision that the state court issued an order on

4]) August 14, 2000 requiring Terrence Melcher to direct that 50% of

5 || the Entertainment Interests be paid directly to Debtor and that

6] Terrence Melcher ignored this order. The fact that Terrence
7\|Melcher failed to pay 50% of the Entertainment Interests to Debtor
8 | pursuant to the Dissolution Judgment is part of the Memorandum

9 Decision. The fact that the state court ordered that relief prior
10} to the Dissolution Judgment is irrelevant to the outcome of the

11 ||] Memorandum Decision. There is no need for this Court to amend the
12 || Memorandum Decision.

13 Debtor next asserts that Terrence Melcher’s only claim

14] against Debtor’s bankruptcy estate in 2001 was approximately

15 ||} $168,000. What claim Terrence Melcher had against Debtor’s

16 | bankruptcy estate in 2001 is irrelevant to the outcome of the

17 || Memorandum Decision because the determination as to whether the

18 |] settlement is fair, reasonable and equitable is based on the claim
19 || which the Probate Estate currently has against the bankruptcy

20 || estate, not the claim as filed in 2001. There is no need for this
21 |} Court to amend the Memorandum Decision.

22 Debtor further asserts that the Adequate Protection Order was
23 || to provide adequate protection for any diminution of value to the
24 || Stonewall Beach Property and was not to be used after the passing
25 || of Terrence Melcher by the Probate Estate to devalue the Stonewall
26 || Beach Property through alleged collusion with Edwin Cohen who
27 || secretly sold the adjacent property to George Soros. Debtor’s
28 || position is that the Adequate Protection Order expired when
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Debtor’s plan of reorganization was appealed by the Probate Estate
and then remanded to the bankruptcy court.

While Debtor did not raise these specific arguments
previously, Debtor did oppose the proposed compromise on the basis
that the Probate Estate devalued the Stonewall Beach Property
through alleged collusion with Edwin Cohen and George Soros. See
docket number 2984 (filed on June 17, 2011). This Court already
took into consideration Debtor’s position regarding the application
of the Adequate Protection Order in the Court’s original
determination as explained in the Memorandum Decision. There is no
need for this Court to amend the Memorandum Decision.

Debtor also seeks to have added to the Memorandum Decision
the fact that Debtor needed to borrow against the Moshup Trail
Property to support the debt on the Stonewall Beach Property.
However, Debtor previously raised this issue in opposition to the
Compromise Motion and the court previously considered and ruled
upon this issue in the Memorandum Decision. See Memorandum
Decision at 17:3-18. There is no need for this Court to amend or
reconsider that section of the Memorandum Decision.

“Finally, Debtor asserts that the amount of the net rents for
the Stonewall Beach Property included in the proposed compromise is
incorrect because the net rents include rents for 1996 when Debtor
and Terrence Melcher were still living together. Assuming Terrence
Melcher lived with Debtor in 1996, the expenses for the Stonewall
Beach Property ($125,527 plus mortgage payments of $14,147)
exceeded the income ($120,000), so there were no net rents for
1996. Thus, including both the 1996 rental income and the

offsetting expenses as part of the total net rents for the

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Stonewall Beach Property only benefits the bankruptcy estate
because the overall net rents are less than if the 1996 rents and
expenses were not included.

(3) Reconsideration of the Memorandum Decision

In addition to the proposed amendments and corrections,
Debtor also objects to some of this Court’s determinations made
with respect to approval of the Compromise Motion. In large part,
Debtor objects to the valuations provided and the alleged failure
of the proposed compromise to address various issues raised by
Debtor in Debtor’s objections to the Compromise Motion. The Court
finds that in many respects, Debtor is rearguing points previously
raised in Debtor’s original objections to the Compromise Motion.
To the extent Debtor already raised these issues in Debtor’s
opposition to the Compromise Motion, this Court has already
considered those objections. Moreover, Debtor raises issues that
could or should have been addressed in the Dissolution Trial since
those issues were involved in the distribution of property between
Debtor and Terrence Melcher. To the extent these issues were, or
could have been, raised during the Dissolution Trial, those issues
cannot be re-litigated in the context of the Compromise Motion.
Holcombe, 477 F.3d at 1097. The following issues fall into both of
these categories:

(1) The seven year management contract with Andy Vargas is
not part of the compromise. Debtor previously raised this argument
in pleadings filed as docket numbers 2391 (filed on January 27,
2010); 2432 (filed on March 5, 2010); and 2791 (filed on

November 23, 2010).

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(2) The award to Debtor of certain boats and vehicles under
the Dissolution Judgment is not part of the compromise. Debtor
previously raised this argument in pleadings filed as docket
numbers 2791 (filed on November 23, 2010); 2793 (filed on
November 24, 2010); and 2955 (filed on May 27, 2011).

(3) The two New York Life Insurance policies which Debtor
asserts were paid with community property and were not addressed in
the Dissolution Judgment. Debtor previously raised this argument
in pleadings filed as docket numbers 2584 (filed on July 21, 2010);
2782 (filed on November 16, 2010); 2791 (filed on November 23,
2010); 2793 (filed on November 24, 2010); and 2955 (filed on
May 27, 2011).

(4) The amount of Terrence Melcher’s income during marriage
as determined in the Dissolution Judgment is incorrect. Debtor
previously raised this argument in pleadings filed as docket
numbers 2584 (filed on July 21, 2010) and 2955 (filed on May 27,
2011).

(5) Terrence Melcher allegedly deferred income until after
the separation. Debtor previously raised this argument in a
pleading filed as docket number 2948 (filed on May 23, 2011).

(6) Debtor asserts the amount for Terrence Melcher’s share of
unimproved lots in Rancho Cucamonga as determined in the
Dissolution Judgment is incorrect. Debtor previously raised this
argument in pleadings filed as docket numbers 2766 (filed on
November 5, 2010); 2791 (filed on November 23, 2010); 2936 (filed
on May 10, 2011); 2955 (filed on May 27, 2011); and 2974 (filed on

June 14, 2011).

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The following are points previously raised in Debtor’s
original objections to the Compromise Motion which this Court has
already considered in issuing the Memorandum Decision:

(1) 22 songs comprise the Entertainment Interests, not 16
songs as determined by the state court. Debtor previously raised
this argument in pleadings filed as docket numbers 2432 (filed on
March 5, 2010); 2529 (filed on June 2, 2010); 2955 (filed on
May 27, 2011); and 2974 (filed on June 14, 2011).

(2) The declaration of Terrence Melcher’s widow, Terese, does
not include all royalties received by Terese from Universal Music
Group. Debtor previously raised this argument in a pleading filed
as docket number 2958 (filed on June 2, 2011) and this Court
specifically found that “[c]lontrary to Debtor’s assertions,
Terese’s declaration does include the royalties for which Debtor
has filed documents from UMG.” Memorandum Decision at 13:1-3.

(3) The $240,000 value for the future Entertainment Interests
is too low and includes only royalties for “air play” and does not
include the 40% interest on film royalties. Debtor previously
raised this argument in pleadings filed as docket numbers 2584
(filed on July 21, 2010); 2755 (filed on October 21, 2010); 2791
(filed on November 23, 2010); 2955 (filed on May 27, 2010); 2958
(filed on June 2, 2011); and 2995 (filed on June 24, 2011).

(4) The Probate Estate was allegedly ordered by this Court to
match what Debtor had contributed to the Stonewall Beach Property
and the compromise does not include any offsets. Debtor previously
raised this argument in pleadings filed as docket numbers 2936
(filed on May 10, 2011); 2955 (filed on May 27, 2011); 2960 (filed

on June 3, 2011); and 2984 (filed on June i7, 2011).

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(5) The Probate Estate should not be credited with one-half
of the net rents from the Stonewall Beach Property as part of the
compromise. Debtor previously raised this argument in pleadings
filed as docket numbers 2399 (filed on February 2, 2010); 2424
(filed on February 19, 2010); 2529 (filed on June 2, 2010); 2755
(filed on October 21, 2010); 2766 (filed on November 5, 2010); and
2955 (filed on May 27, 2011).

(6) The Court should only award net rents on the Stonewall
Beach Property if the Probate Estate has clean hands, which it does
not because Terrence Melcher only contributed $275,130 into the
Stonewall Beach Property and he worked to the detriment of the
Stonewall Beach Property by colluding with Edwin Cohen and George
Soros to damage Debtor and Debtor’s bankruptcy estate both before
and after Debtor’s bankruptcy filing. Debtor previously raised
similar arguments in pleadings filed as docket numbers 2424 (filed
on February 19, 2010) and 2755 (filed on October 21, 2010).

(7) Debtor should receive income credit for renting the
Stonewall Beach Property. Debtor previously raised this argument
in pleadings filed as docket numbers 2399 (filed on February 2,
2010); 2424 (filed on February 19, 2010); 2766 (filed on
November 5, 2010); and 2955 (filed on May 27, 2011).

(8) The $198,575 value of the pre-petition claim for the
Probate Estate is incorrect. Debtor previously raised this
argument in a pleading filed as docket number 2399 (filed on
February 2, 2010).

(9) Debtor requests copies of Terrence Melcher’s personal tax
returns as well as the corporate tax returns for three corporations

in which Terrence Melcher held an interest. Debtor previously

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raised this argument in pleadings filed as docket numbers 2782
(filed on November 16, 2010); 2791 (filed on November 23, 2010);
and 2955 (filed on May 27, 2011).

(10) George Soros, Edwin Cohen and Terrence Melcher conspired
to take Debtor’s deeded easement to the Stonewall Beach Property.
Debtor previously raised this argument in pleadings filed as docket
numbers 2424 (filed on February 19, 2010); 2755 (filed on
October 21, 2010); 2766 (filed on November 5, 2010); and 2782
(filed on November 16, 2010).

(11) The $282,500 value for the Family Residence used in the
compromise is incorrect. Debtor previously raised this argument in
pleadings filed as docket numbers 2766 (filed on November 5, 2011)
and 2936 (filed on May 10, 2011).

(12) Terrence Melcher failed to pay the bills for the
Stonewall Beach Property as well as the family expenses after the
separation in mid-1997. Debtor previously raised this argument in
a pleading filed as docket number 2791 (filed on November 23,
2010).

To the extent Debtor already raised these issues in Debtor's
opposition to the Compromise Motion, this Court has already
considered those arguments. These issues are not a basis for this
Court to reconsider the Memorandum Decision or Order.

Debtor asserts that Debtor is providing “newly discovered”
evidence as a basis for the Motion to Reconsider, specifically, the
declarations of Al Jardine and Judy Ruby. However, the
declarations do not meet the legal criteria for “newly discovered”

evidence and are not a basis upon which this Court should

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reconsider the Memorandum Decision or Order. The Ninth Circuit has
held:

Relief from judgment on the basis of newly
discovered evidence is warranted if (1) the moving
party can show the evidence relied on in fact
constitutes “newly discovered evidence” within the
meaning of Rule 60(b); (2) the moving party exercised
due diligence to discover this evidence; and (3) the
newly discovered evidence must be of “such magnitude
that production of it earlier would have been likely to
change the disposition of the case.” Coastal Transfer
Co. v. Toyota Motor Sales, U.S.A., Inc., 833 F.2d 208,
211 (9th Cir. 1987).

Feature Realty, Inc. V. City of Spokane, 331 F.3d 1082, 1093 (9th

Cir. 2003).

On November 21, 2011, Debtor filed a signed declaration of Al
Jardine, one of the members of the Beach Boys, in support of
Debtor’s assertion that the future Entertainment Interests are
worth more than $240,000. However, Debtor has not shown that Mr.
Jardine’s declaration could not have been obtained, with reasonable
diligence, as part of the numerous pleadings filed by Debtor in
opposition to the Compromise Motion filed between January 2010 and
June 2011 or that Debtor exercised due diligence to discover this
evidence. Moreover, the declaration of Mr. Jardine does not state
a value for the future Entertainment Interests and does not
contradict that $240,000 for those interest is a reasonable
compromise.

On December 16, 2011, Debtor filed a signed declaration of

Judy Ruby, who was employed by Doris Day -- Debtor’s ex-mother-in-

law -- as well as two corporations in which Terrence Melcher held
an interest. Ms. Ruby handled Terrence Melcher’s personal affairs
and maintained Terrence Melcher’s personal financial accounting

ledgers. Ms. Ruby’s declaration is filed in support of Debtor’s

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assertion that Debtor notified Ms. Ruby that certain accounting
ledgers forwarded by Ms. Ruby during the dissolution proceeding
between Debtor and Terrence Melcher were missing and Ms. Ruby
informed Debtor that there were no missing ledgers.

To the extent that there were missing ledgers during the
dissolution proceedings, the effect of any such missing ledgers
should have been addressed at the Dissolution Trial and, to the
extent these issues were not raised during the Dissolution Trial,
those issues cannot be re-litigated in the context of the
Compromise Motion. Holcombe, 477 F.3d at 1097. Moreover, Debtor
has not shown that Ms Ruby’s declaration could not have been
obtained, with reasonable diligence, as part of the numerous
pleadings filed by Debtor in opposition to the Compromise Motion
filed between January 2010 and June 2011 or that Debtor exercised
due diligence to discover this evidence.

Debtor also asserts that the Memorandum Decision and Order
should be reconsidered under Rule 60(b) (3) due to the fraud,
misrepresentation or misconduct by an opposing party. Under Ninth
Circuit law:

“To prevail, the moving party must prove by clear and

convincing evidence that the verdict was obtained

through fraud, misrepresentation, or other misconduct

and the conduct complained of prevented the losing

party from fully and fairly presenting the defense.”

De Saracho v. Custom Food Machinery, Inc., 206 F.3d

874, 880 (9th Cir. 2000). “Federal Rule of Civil

Procedure 60(b) (3) require[s] that fraud ... not be

discoverable by due diligence before or during the

proceedings.” Pac. & Arctic Ry. and Navigation Co. v.

United Transp. Union, 952 F.2d 1144, 1148 (9th Cir.
1991).

Casey v. Albertson’s Inc., 362 F.3d 1254, 1260 (9th Cir. 2004).

The Court finds that Debtor has not shown by clear and convincing

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evidence that approval of the compromise was obtained through
fraud, misrepresentation or misconduct by Trustee or the Probate
Estate. Moreover, even if there were such alleged fraud,
misrepresentation or other misconduct, Debtor has not met Debtor’s
burden that any such alleged fraud, misrepresentation or other
misconduct prevented Debtor from fully and fairly opposing the
Compromise Motion. Debtor’s motion for reconsideration under

Rule 60(b) (3) is denied.

Finally, Debtor raises two new arguments that should have
been raised in the numerous pleadings filed by Debtor in opposition
to the Compromise Motion. Specifically, Debtor wants interest for
the illegal $8 million indemnity agreement and Debtor objects to
the Probate Estate receiving any interest under the proposed
compromise. As the Ninth Circuit has explained: “A motion for
reconsideration ‘may not be used to raise arguments or present
evidence for the first time when they could reasonably have been

raised earlier in the litigation.’ Kona Enters., Inc. v. Estate of

Bishop, 229 F.3d 877, 890 (9th Cir. 2000).” Marlyn Nutraceuticals,

Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009).

Because these two arguments could reasonably have been raised in
Debtor’s pleadings opposing the Compromise Motion, Debtor’s request
to reconsider the Memorandum Decision and Order on these grounds is
denied.

B. Motion to Compel

Debtor provides no legal authority in support of Debtor’s
Motion to Compel and the Court knows of no such authority.
Moreover, the information Debtor seeks to compel Trustee to turn

over to Debtor relates to Debtor’s opposition to the Compromise

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Motion. The Court has already ruled on the Compromise Motion in
the Memorandum Decision and has denied Debtor’s Motion to
Reconsider that Memorandum Decision in this memorandum decision.
Thus, there is no basis on which to grant Debtor’s Motion to
Compel.

There are additional reasons to deny Debtor’s Motion to
Compel. Regarding Debtor’s trial exhibits from the Dissolution
Trial, pursuant to an order entered on September 20, 2010, this
Court authorized Trustee to release to Debtor documents which
Trustee obtained in early 2009 from Debtor’s most recent counsel
subject to Debtor making arrangements to retrieve the records at

Debtor’s expense. Debtor has not made such arrangements.

Accordingly, there is no basis upon which to compel Trustee to turn

these documents over to Debtor. Debtor can claim those documents

if and when Debtor complies with this Court’s prior conditions

regarding collection of those documents.

As for Debtor’s request for copies of Terrence Melcher’s tax

returns in Trustee’s possession, Trustee has already stated that
Trustee obtained those documents pursuant to a confidentiality

agreement and has returned those documents to the Probate Estate.

Thus, Trustee has no such returns in Trustee’s possession. Because

Trustee has no such documents in Trustee’s possession, there is
nothing to compel.

Debtor further requests Trustee’s analysis of the value of
both the Entertainment Interests as well as the 2120 Action. To
the extent that Debtor seeks the analysis by Trustee’s counsel,

that analysis is covered by the work product privilege and the

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Court will not require such information to be turned over to
Debtor.

Debtor also requests information regarding proof of Terrence
Melcher’s contributions to the Stonewall Beach Property.
Allocation of separate and community property interests in the
Stonewall Beach Property were part of the Dissolution Trial. Any
contribution of Terrence Melcher to that property could reasonably
-- and should -- have been included in those proceedings. Any
proof of Terrence Melcher’s contributions to the Stonewall Beach
Property is irrelevant to this proceeding, as that issue cannot be
re-litigated in the context of the Compromise Motion. Holcombe,
477 F.3d at 1097.

Debtor requests information received by Trustee from the
subpoena issued to Disney allegedly showing thousands of licensing
agreements issued by Disney for the musical copyright of the song
“Kokomo.” These are licenses issued by Disney since “Kokomo” was
written in the 1980s according to an email from Disney attached to
Debtor’s papers. As explained earlier, this information relates to
Debtor’s opposition to the Compromise Motion upon which the Court
has already ruled in the Memorandum Decision and subsequently
denied Debtor’s Motion to Reconsider, so there is no reason to
grant Debtor’s Motion to Compel this information.

Finally, Debtor seeks to compel an independent audit of the
Entertainment Interests. Debtor previously raised this issue in
pleadings filed in opposition to the Compromise Motion. The Court
considered Debtor’s objection in ruling on the Compromise Motion.
The Court determined that no independent audit was required and the

Court will not order such an audit at this time.

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C. Contempt Motion
Turning to the Contempt Motion, the Ninth Circuit has held:

The standard for finding a party in civil contempt
is well settled: The moving party has the burden of
showing by clear and convincing evidence that the
contemnors violated a specific and definite order of
the court. The burden then shifts to the contemnors to
demonstrate why they were unable to comply.

F.T.C. v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999)

(citation omitted). In order to hold Trustee in contempt, Trustee
must have violated a specific court order. The Trustee has not
refused to comply with any such order. Thus, there is no basis
upon which to grant the Contempt Motion.

D. Request to Strike

Under Federal Rule of Civil Procedure 12(f), a
court “may order stricken from any pleading ... any
redundant, immaterial, impertinent, or scandalous
matter.” Motions to strike are not favored and “should
not be granted unless it is clear that the matter to be
stricken could have no possible bearing on the subject
matter of the litigation.” Colaprico v. Sun
Microsystems, Inc., 758 F. Supp. 1335, 1339 (N.D. Cal.
1991). This is “because of the limited importance of
pleadings in federal practice and because [a motion to
strike] is usually used as a delaying tactic.” RDF
Media Ltd. v. Fox Broad. Co., 372 F. Supp. 2d 556, 561
(C.D. Cal. 2005).

Courts will not grant motions to strike unless
“convinced that there are no questions of fact, that
any questions of law are clear and not in dispute, and
that under no set of circumstances could the claim or
defense succeed.” Id. When ruling on a motion to
strike, this Court “must view the pleading under attack
in the light most favorable to the pleader.” Id. For
a motion to strike to be granted, the grounds for the
motion must appear either on the face of the complaint
or from matters of which the Court may take judicial
notice. See SEC v. Sands, 902 F. Supp. 1149, 1165
(C.D. Cal. 1995).

In re New Century, 588 F. Supp. 2d 1206, 1219-20 (C.D. Cal. 2008).

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While the Court does not condone Debtor’s tendency to file
documents after deadlines imposed either by the Court or by the
local rules, the Court will not strike the additional pleadings

filed by Debtor after December 9, 2011 relating to the Motion to

IV.
CONCLUSION
For the reasons stated above, the Court denies the Motion to
Reconsider, the Motion to Compel, and the Contempt Motion. The
Court also denies Trustee’s request to strike the additional
pleadings filed by Debtor after December 9, 2011 relating to the
Motion to Reconsider. Counsel for Trustee shall submit a form of

order after service on Debtor.

mete ful

Reconsider. Trustee’s request to strike those pleadings is denied.

ARTHUR S. WEISSBRODT
UNITED STATES BANKRUPTCY JUDGE

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Court Service List

Jacqueline C. Melcher
P.O. Box 222798
Carmel, CA 93922

John W. Richardson
Chapter 7 Panel Trustee
5161 Soquel Dr. #F
Soquel, CA 95073

Charles P. Maher, Esq.

Luce, Forward, Hamilton and Scripps
121 Spear St. #200

San Francisco, CA 94105

Lance N. Jurich, Esq.

Law Offices of Loeb and Loeb
10100 Santa Monica Blvd. #2200
Los Angeles, CA 90067-4164

Office of the U.S. Trustee
U.S. Federal Bldg.

280 S lst St. #268

San Jose, CA 95113-3004

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