Jenkins et al v. Salma et al

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UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re
DAVID SALMA,
Debtor.
LEW JENKINS and LINDA JENKINS, as
Trustee of the Jenkins Trust U/A/D
1/15/98 and JACK H. FRESKOS,
beneficiary of IRA 042640 at
WESTAMERICA,
Plaintiffs,
vs.
DAVID SALMA, RUBEN Q. PICARDO,
SEATTLE BLOCK, LLC, FATON BINAKU,
and MARION ZABORSKI, and DOES 1-10,
Defendants.
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Case No. 09-30863 TEC
Chapter 7
Adv. Proc. No. 09-3126 TC
MEMORANDUM RE PLAINTIFFS’: (1) MOTION FOR AMENDED JUDGMENT,
NEW TRIAL, OR RELIEF FROM JUDGMENT; AND
(2) MOTION TO STAY AWARD OF COSTS
The court held a trial in this action on November 2-3, 2010,
and entered judgment for Defendant David Salma (“Defendant”) on
November 15, 2010. 	On November 23, 2010, Plaintiffs filed the
instant motion for amended judgment, new trial and relief from
MEMORANDUM RE PLAINTIFFS’ MOTIONS
FOR AMENDED JUDGMENT AND TO STAY
AWARD OF COSTS
-1-
Signed and Filed: February 18, 2011
________________________________________
THOMAS E. CARLSON
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
February 22, 2011
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 09-03126 Doc# 81 Filed: 02/18/11 Entered: 02/22/11 15:12:10 Page 1 of 3

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judgment, but did not set that motion for hearing. 	On November 24,
2010, Defendant filed a bill of costs, requesting the Clerk to tax
costs in the sum of $3,210.95. 	On December 1, 2010, Plaintiffs’
filed a Request to Stay Award of Costs, but did not set that
request for hearing. 	Plaintiffs did not file an objection to the
bill of costs. 	Upon due consideration, and for the reasons stated
below, the court determines that a hearing would not be helpful,
that the motion for amended judgment and the request to stay award
of costs should be denied.
1. 	Motion for Amended Judgment, New Trial and Relief from Judgment
Plaintiffs contend that this court misconceived the standard
for determining whether reliance is justifiable.
Plaintiffs first contend that in imposing upon them a duty of
inquiry the court erred, because Plaintiffs had not received
sufficient warning signs that the information at issue might not be
correct. 	This argument is not persuasive. 	Plaintiffs received no
information re rental income directly from Defendant. 	The only
information provided by Defendant was incorporated into the
appraisal report. 	That appraisal report contained a clear warning
that the stated value was dependent upon future events and would be
materially affected if those future events did not occur.
Plaintiffs next contend that this warning was inapplicable
because they relied upon the “as-is” value stated in the appraisal
report. 	This argument is unpersuasive, because the discussion of
“as-is” value in the appraisal report reveals clearly that it was
dependent upon the same contingent events as the prospective value.
It was not justifiable for Plaintiffs to rely upon the “as-is”
value without reading the text that explained what “as-is” value
MEMORANDUM RE PLAINTIFFS’ MOTIONS
FOR AMENDED JUDGMENT AND TO STAY
AWARD OF COSTS
-2-
Case: 09-03126 Doc# 81 Filed: 02/18/11 Entered: 02/22/11 15:12:10 Page 2 of 3

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meant. 	Plaintiffs seek in substance to rely upon part of the
appraisal while ignoring other parts.
Plaintiffs’ third contention is that they were justified in
relying upon Defendant’s misrepresentations of the income from
residential units, which was material and was not dependent upon
future events. 	I simply cannot credit that Plaintiffs were
justified in letting themselves be misled by a relatively small
misrepresentation, when they ignored clear warning signs regarding
a much more material misrepresentation.
Finally, Plaintiffs seek to reopen the case to supply new
evidence regarding Defendant’s intent to deceive. 	There is no
purpose in taking such evidence if Plaintiffs cannot establish the
requisite reliance.
2. 	Request to Stay Award of Costs
Defendant timely filed and served a bill of costs that
separately states each item of taxable costs claimed and is
supported by the required affidavit and documentation. 	Civ. L.R.
54-1(a); B.L.R. 1001-2(a). 	Plaintiffs did not timely file an
objection to the bill of costs. 	Civ. L.R. 54-2; B.L.R. 1001-2(a).
The court has denied Plaintiffs’ motion to amend the judgment.
Accordingly, there is no basis to stay the Clerk’s award of costs
to Defendant, and Plaintiff’s motion for stay of costs is denied.
Civ. L.R. 54-4; B.L.R. 1001-2(a).
**END OF MEMORANDUM**
MEMORANDUM RE PLAINTIFFS’ MOTIONS
FOR AMENDED JUDGMENT AND TO STAY
AWARD OF COSTS
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Case: 09-03126 Doc# 81 Filed: 02/18/11 Entered: 02/22/11 15:12:10 Page 3 of 3