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1 POSTED ON WEBSITE
2 NOT FOR PUBLICATION
3
4 UNITED STATES BANKRUPTCY COURT
5 EASTERN DISTRICT OF CALIFORNIA
6
7 In re: Case No. 20-23457-A-7
8 ERNESTO PATACSIL and MARILYN EMBRY
PATACSIL
9
10 Debtor.
11
JOSEPH CABARDO et al., Adv. No. 20-02167-A
12
Plaintiffs, FEC-1
13
V.
14
ERNESTO PATACSIL et al.,
15
Defendants.
16
17
18
19
20
MEMORANDUM
21 (Request for Judicial Notice)
22
23
24
25
26
27
1 A court may take judicial notice of the âdocuments filed in other
2 courts, again not for the truth of the matters asserted in the other
3 litigation, but rather to establish the fact of such litigation and
4 related filings.â Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d
5 Cir. 1991). Plaintiffs seek judicial notice of numerous filings in a
6 related District Court action and unspecified âfacts contained in
7 these documents.â May the court do so?
8 I. FACTS
9 Prior to the matters that are now before this court, eight former
10 employees, acting under the Private Attorney General Act of 2004,
11 brought an action against the defendants in District Court for wage
12 and hours violations arising from their employment. Cabardo v.
13 Patacsil, No. 2:12-cv-01705 (E.D. CA 2012) (the âDistrict Court
14 actionâ). The plaintiff employees prevailed at trial and the District
15 Court awarded them damages of $893,815 and attorneysâ fees of
16 $1,077,218.
17 Defendants then filed a Chapter 7 bankruptcy.
18 Plaintiff employees and their attorneys in the underlying action
19 filed this adversary proceeding to except the judgment from discharge.
20 11 U.S.C. § 523(a)(6),(a)(7).
21 II. PROCEDURE
22 Plaintiffs request that the court to take judicial notice of the
23 following documents and âthe facts contained in these documentsâ in
24 the District Court action: (1) judgment, Ex. B; (2) order granting in
25 part plaintiffâs motion for attorneysâ fees, Ex. C; (3) eight verdict
26 forms, Ex. K-R (one for each plaintiff); (4) Findings of Fact and
27 Conclusions of Law, Ex. U. The plaintiffâs also request that the
1 Court pertaining to the defendants. Memorandum, Patacsil v.
2 Commissioner of the Internal Revenue Service, Docket No. 28715-154
3 (Tax Court 2017). Request for Judicial Notice 2:20-3:14, ECF No. 118.
4 Defendants concede that the court may take judicial notice of the
5 documents but contend that the court may not take âjudicial notice of
6 the truth of the matters stated within those findings.â Oppân 2:24-
7 28, ECF No. 138.
8 III. JURISDICTION
9 This court has jurisdiction. 28 U.S.C. §§ 1334(a)-(b), 157(b);
10 see also General Order No. 182 of the Eastern District of California.
11 Jurisdiction is core. 28 U.S.C. § 157(b)(2)(I); Carpenters Pension
12 Trust Fund for Northern Calif. v. Moxley, 734 F.3d 864, 868 (9th
13 2013); In re Kennedy, 108 F.3d 1015, 1017 (9th Cir. 1997). Plaintiffs
14 do not consent to the entry of final orders and judgments by this
15 court; defendants do so consent. 28 U.S.C. § 157(b)(3); Wellness
16 Intâl Network, Ltd. v. Sharif, 135 S.Ct. 1932, 1945-46 (2015).
17 Scheduling Order § 2.0, ECF No. 13.
18 IV. LAW
19 A. Section 523
20 An action to except a debt from discharge has three elements: (1)
21 a debt, In re Dobos, 303 B.R. 31, 39 (9th Cir. BAP 2019); Northbay
22 Wellness Group, Inc. v. Beyries, 789 F.3d 956, 959 n. 3 (9th Cir.
23 2015) (existence of a debt determined by state law); (2) at least one
24 of the enumerated exceptions of § 523(a), i.e., 11 U.S.C. §
25 523(a)(6),(a)(7); and (3) an amount of damages. Dobos, 303 B.R. at
26 39. Affirmative defenses exist. E.g., Fed. R. Bankr. P. 4007 (time
27 limitations).
1 B. Rule 201
2 In some instances, the court make take judicial notice of
3 particular matters.
4 (a) Scope. This rule governs judicial notice of an
adjudicative fact only, not a legislative fact.
5
(b) Kinds of Facts That May Be Judicially Noticed. The
6 court may judicially notice a fact that is not subject to
reasonable dispute because it:
7
(1) is generally known within the trial court's
8 territorial jurisdiction; or
9 (2) can be accurately and readily determined from
sources whose accuracy cannot reasonably be
10 questioned.
11 Fed. R. Evid. 201(a)-(b).
12 Rule 201 deals only with adjudicative, and not legislative facts.
13 The difference is critical:
14 Rule 201 governs only the judicial notice of âadjudicative
facts.â Fed.R.Evid. 201(a). The advisory committee notes to
15 Rule 201 distinguish between âadjudicative factsâ and
âlegislative facts.â See id., adv. ctte. notes (citing 2
16 Kenneth Davis, Administrative Law Treatise at 353 (1958)).
Adjudicative facts are âfacts that normally go to the jury
17 in a jury case. They relate to the parties, their
activities, their properties, their businesses.â Id.; see
18 also U.S. v. Gould, 536 F.2d 216, 219 (8th Cir.1976)
(stating that adjudicative facts concern âwho did what,
19 where, when, how and with what motive or intent.â) (quoting
2 Kenneth Davis, Administrative Law Treatise § 15.03 at 353
20 (1958)). By contrast, â[l]egislative facts do not relate
specifically to the activities or characteristics of the
21 litigants. A court generally relies upon legislative facts
when it purports to develop a particular law or policy and
22 thus considers material wholly unrelated to the activities
of the parties.â Gould, 536 F.2d at 220.
23
Qualley v. Clo-Tex Int'l, Inc., 212 F.3d 1123, 1128 (8th Cir.
24 2000) (emphasis added).
25 Adjudicative facts are a substitute for evidence that would
26
otherwise be submitted to the trier of fact. Wesley-Jessen Div. of
27
Schering Corp. v. Bausch & Lomb Inc., 698 F.2d 862, 864 (7th Cir.
1983).
1 There are limitations as to those facts. Judicially noticed
2 facts must be relevant. Fed. R. Evid. 402; Vallot v. Central Gulf
3 Lines, Inc., 641 F.2d 347, 350 (5th Cir. 1981) (per curiam); 1-800-
4 411-Pain Referral Service, LLC v. Otto, 744 F.3d 1045, 1063, fn. 13
5 (8th Cir. 2014). The party seeking to admit the fact must law a
6 proper foundation. 1-800-411-Pain Referral Service, LLC, 744 F.3d at
7 1063, fn. 13. A fact, particularly one offered in the form of a
8 document, must not contain inadmissible hearsay. 1-800-411-Pain
9 Referral Service, LLC, 744 F.3d at 1063, fn. 13; Daniel v. Cook
10 County, 833 F.3d 728, 742 (7th 2016).
11 V. DISCUSSION
12 Among the facts of which judicial notice may be taken are
13 documents filed in a collateral federal or state case, e.g.,
14 judgments, orders and other submissions. ReadyLink Healthcare, Inc.
15 v. State Compensation Ins. Fund, 754 F.3d 754, 756, fn. 1 (9th Cir.
16 2014) (state court proceeding); In re WorldCom, Inc., (2nd Cir. 2013)
17 708 F.3d 327, 339, fn. 63 (2nd 2013). Where the parties engaged in
18 prior litigation that relates to the case now before the court
19 judicial notice is frequently employed.
20 Judicial notice is particularly appropriate for court
records (including the court's own records) in prior
21 litigation related to the case before it. [Amphibious
Partners, LLC v. Redman (10th Cir. 2008) 534 F3d 1357,
22 1361-1362âdistrict court entitled to take judicial notice
of its memorandum of order and judgment from previous case
23 involving same parties; Panera, LLC v. Dobson (8th Cir.
2021) 999 F3d 1154, 1157, fn. 1âjudicial notice of
24 proceedings in state court that related directly to matter
at issue; Fowler Packing Co., Inc. v. Lanier (9th Cir.
25 2016) 844 F3d 809, 813, fn. 2âNinth Circuit took judicial
notice of fact that related case was filed in district
26 court and of claim alleged; Clark v. Stone (6th Cir. 2021)
998 F3d 287, 297 & fn. 4âcourt may take judicial notice of
27 proceedings of other courts of record....
1 Robert E. Jones, Federal Civil Trials and Evidence § 8:875 (Rutter
2 Group June 2022).
3 Even so, the truth of the judicial record is not noticeable.
4 A court may take judicial notice of a document filed in
another court ânot for the truth of the matters asserted in
5 the other litigation, but rather to establish the fact of
such litigation and related filings.â [Kramer v. Time
6 Warner Inc. (2nd Cir. 1991) 937 F2d 767, 774; Opoka v.
I.N.S. (7th Cir. 1996) 94 F3d 392, 395; Taylor v. Charter
7 Med. Corp. (5th Cir. 1998) 162 F3d 827, 829-830]
8 Federal Civil Trials and Evidence at § 8:876 et seq.
9 The line between permissible and impermissible use of another
10 courtâs findings is difficult to draw.
11 In all these cases involving notice of any aspect of court
records or proceedings, there is a difference between
12 taking notice of the existence, content, and operative
effect of any item and using the item as proof of whatever
13 acts, events, or conditions in the world that the words in
the item describeâin short, making hearsay use of the item.
14 The fact that a judgment exists, and that its effect is to
create an obligation on the part of the defendant toward
15 the plaintiff in a certain sum, is clearly appropriate for
judicial notice, but underlying findings or conclusions
16 (even those that are essential to a judgment), such as a
finding that the defendant signed a promissory note in the
17 sum awarded by the court, are not appropriate for judicial
notice.
18
1 Mueller & Kirkpatrick, Federal Evidence § 2:5 (4th ed. July
19 2022).
20 A. Judgment
21 Foundational facts have been laid. That a judgment exists
22 between the parties is relevant to the existence and amount of a debt
23 by the defendants to the plaintiffs. 11 U.S.C. § 523(a) (requiring a
24 âdebtâ). Any objection to the authenticity of the document has been
25 waived. Am. Pretrial Order §§ 1.0, 8.0, ECF No. 95 (setting deadline
26 for evidentiary objections). Finally, the judgment is not hearsay.
27 Fed. R. Evid. 801(c); U.S. v. Boulware, 384 F.3d 794, 805-806 (9th
1 offered as legally operative verbal conduct that determined the rights
2 and duties of the partiesâ); U.S. v. Sine, 493 F.3d 1021, 1036 (9th
3 2007).
4 Judicial notice is proper to prove the existence of a debt, 11
5 U.S.C. § 523, between the parties. Conopco, Inc. v. Roll Intern., 231
6 F.3d 82, 86 n. 3 (2nd 2000); Gabbanelli Accordions & Imports, L.L.C.
7 v. Gabbanelli, 575 F.3d 693, 696 (7th Cir. 2009) (foreign judgment;
8 Thompson v. R.J. Reynolds Tobacco Co., 760 F.3d 913, 918 (8th Cir.
9 2014); Amphibious Partners, LLC v. Redman, 534 F.3d 1357, 1361-1362
10 (10th Cir. 2008); Mueller & Kirkpatrick, Federal Evidence at § 2:5.
11 As one commentator thoughtfully articulated the matter.
12 Where the doctrines of res judicata, collateral estoppel,
or claim or issue preclusion make the determinations in the
13 first case binding in the second, a judgment in the first
case is not only admissible in the second, but it is
14 conclusive against the party as a matter of substantive
law. Historically, the courts were often unwilling to admit
15 judgments in previous cases if neither res judicata nor
collateral estoppel applied under the theory they were
16 hearsay.
17 2 McCormick on Evidence § 298 (8th July 2022).
18 As a result, the judgment and its contents are proper subjects of
19 judicial notice because it is not reasonably subject to dispute and
20 goes to the âexistence, content, and operative effectâ of the District
21 Courtâs resolution of the dispute between the parties. Federal
22 Evidence at § 2:5. As to the judgment, the request will be granted.
23 B. Order Granting Attorneyâs Fees
24 Foundational facts have been laid. The order is relevant to the
25 existence and amount of a debt by the defendants to the plaintiffs.
26 11 U.S.C. § 523(a) (requiring a âdebtâ). Any objection to the
27 authenticity of the document has been waived. Am. Pretrial Order §§
1 Finally, the order is not hearsay. Fed. R. Evid. 801(c); Boulware,
2 384 F.3d at 805-806 (9th 2004) (judgments not hearsay as âlegally
3 operative verbal conductâ); Sine, 493 F.3d at 1036.
4 Orders are properly subjects of judicial notice. â[A] court may
5 take notice of another court's order only for the limited purpose of
6 recognizing the âjudicial actâ that the order represents or the
7 subject matter of the litigation.â United States v. Jones, 29 F.3d
8 1549, 1553 (11th Cir. 1994), citing United States v. Garland, 991 F.2d
9 328, 332 (6th Cir.1993) (citation omitted); Colonial Leasing Co. v.
10 Logistics Control Group Int'l, 762 F.2d 454, 459 (5th Cir. 1985); St.
11 Louis Baptist Temple, Inc. v. Federal Deposit Ins. Corp., 605 F.2d
12 1169, 1172â73 (10th Cir.1979).
13 As a result, the court will take judicial notice of the existence
14 of an order awarding the plaintiffâs attorney fees of $1,077,218.62
15 because it is not reasonably subject to dispute and goes to the
16 âexistence, content, and operative effectâ of the District Courtâs
17 resolution of the dispute between the parties. Federal Evidence at §
18 2:5. However, the District Courtâs findings therein do not enjoy the
19 same admissibility. Circuit law is well-established that âfindings of
20 factâ contained within a memorandum decision are almost never proper
21 subjects of judicial notice. United States v. Jones, 29 F.3d 1549,
22 1553 (11th Cir. 1994); Wyatt v. Terhune, 315 F.3d 1108, 1114 (9th
23 Cir.. 2003) (overruled on other grounds by Albino v. Baca, 747 F.3d
24 1162, 1168-1169) (9th Cir. 2014). As to the order, the request will
25 be granted in part and denied in part.
26 C. Plaintiffsâ Verdict Forms
27 Federal courts may obtain jury verdicts in three ways:
1 favor of one party or the other; [2] Special verdict,
whereby the jury makes factual findings from which the
2 court draws legal conclusions and renders judgment based
thereon; or [3] General verdict with answers to written
3 questions, whereby, in addition to the verdict itself, the
jury is asked to answer certain questions designed to test
4 the validity of the verdict.
5
Federal Civil Trials and Evidence at § 18:1 (explaining Fed. R. Civ.
6 P. 49) (citations omitted).
7 In resolving the dispute, the District Court employed the special
8 verdict method of resolution, and the plaintiffs seek to judicial
9 notice of those verdict. Exs. K-R.
10 Foundational facts have been laid. That verdict form is relevant
11 as to the existence and amount of a debt by the defendants to the
12 plaintiffs, 11 U.S.C. § 523(a) (requiring a âdebtâ), and as to the
13 intent element, 11 U.S.C. § 523(a)(6) (âwillful and malicious).
14 Verdict No. 24 (âWas defendantsâ failure to pay federal overtime wages
15 willfulâ). Any objection to the authenticity of the document has been
16 waived. Am. Pretrial Order §§ 1.0, 8.0, ECF No. 95 (setting deadline
17 for evidentiary objections). Finally, the verdict form itself is not
18
hearsay. Fed. R. Evid. 801(c); U.S. v. Boulware, 384 F.3d 794, 805-
19 806 (9th 2004) (âA prior judgment is not hearsay, however, to the
20 extent it is offered as legally operative verbal conduct that
21
determined the rights and duties of the partiesâ); U.S. v. Sine, 493
22 F.3d 1021, 1036 (9th 2007).
23 The plaintiffsâ request for judicial notice breaks neatly into
24 two parts. First, whether the court may take judicial notice of the
25 existence of a special verdict in the District Courtâs records. Such
26
a fact is a proper subject of judicial notice. United States v. Ross,
27
771 Fed.Appx. 345, 348 n. 1 (9th Cir. 2019); Evanston Ins. Co. v.
Windstar Properties, Inc., 857 Fed.Appx. 387, 388 n. 2 (9th Cir.
1 2021). Similarly, the ancillary legally operative facts that the
2 plaintiffs and defendants litigated to conclusion the issue of the
3 defendantsâ violation of wage and overtime laws and that the
4 plaintiffs prevailed in that action. Murphy v. Kmart Corp., 2010 WL
5 3703708 * 3 (D. S.D. 2010) (âRule 201 allow the court to take judicial
6 notice of the existence of the ...special verdict formsâ) (emphasis
7 original).
8 Second, whether the court may take judicial notice of the
9 contents of those special verdict forms. Those facts are not properly
10 the subject of judicial notice. Fed. R. Evid. 801-802 (hearsay);
11 United States v. Collier, 68 Fed. Appx. 676, 683 (6th Cir.2003);
12 Taylor v. Washington Metro. Area Transit Auth., 922 F.Supp. 665, 675â
13 76 (D.D.C. 1996). As one court thoughtfully observed:
14 Importantly, â[a] court may take judicial notice of a
document filed in another court ânot for the truth of the
15 matters asserted in the other litigation, but rather to
establish the fact of such litigation and related filings.â
16 â Liberty Mut. Ins. Co. v. Rotches Pork Packers, Inc., 969
F.2d 1384, 1388 (2d Cir.1992) (finding district court erred
17 in taking judicial notice of bankruptcy court order to
establish facts asserted therein). âWhen offered to prove
18 the facts stated, court records are hearsay; hence, they
would be admissible as evidence only if they satisfied some
19 hearsay exception such as the official records exception
.... [A] court cannot take judicial notice of a fact that
20 would be inadmissible if it were offered as evidence.â
(citation omitted).
21
Rule 201 allows the court to take judicial notice of the
22 existence of the Hawkins special verdict forms. The fact
that Kmart was a defendant in another age discrimination
23 lawsuit is not subject to reasonable dispute. The fact that
a jury entered a verdict in favor of Mr. Hawkins against
24 Kmart is not subject to reasonable dispute. These are
legally operative facts. However, the findings of fact upon
25 which the Hawkins verdict is based do not satisfy Rule
201(b)âthe jury's findings are not generally known to the
26 public, nor are they so indisputable that their accuracy
cannot reasonably be questioned...
27
Murphy at * 3 (emphasis added).
1 For these reasons, the court will take judicial notice of
2 existence of the verdict forms, that the parties previously litigated
3 questions of the defendantsâ compliance with applicable state labor
4 laws and that the plaintiffs prevailed on those questions. The court
5 will decline to take judicial notice of all other purported facts in
6 the special verdict.
7 D. Findings of Fact and Conclusions of Law
8 Plaintiffs seek to admit the District Courtâs findings of fact
9 and conclusions of law.
10 Foundational facts have been laid. That âFindings of Fact and
11 Conclusions of Lawâ rendered by the District Court is relevant as to
12 the existence and amount of a debt by the defendants to the
13 plaintiffs, 11 U.S.C. § 523(a) (requiring a âdebtâ), and as to the
14 intent element, 11 U.S.C. § 523(a)(6) (âwillful and malicious).
15 Findings of Fact pp. 8-14 (civil penalties based on willful conduct).
16 Any objection to the authenticity of the document has been waived.
17 Am. Pretrial Order §§ 1.0, 8.0, ECF No. 95 (setting deadline for
18 evidentiary objections). Finally, the Findings of Fact and
19 Conclusions of Law itself is not hearsay. Fed. R. Evid. 801(c); U.S.
20 v. Boulware, 384 F.3d 794, 805-806 (9th 2004) (âA prior judgment is
21 not hearsay, however, to the extent it is offered as legally operative
22 verbal conduct that determined the rights and duties of the partiesâ);
23 U.S. v. Sine, 493 F.3d 1021, 1036 (9th 2007).
24 The plaintiffsâ request for judicial notice breaks neatly into
25 two parts. First, whether the court may take judicial notice of the
26 existence of the âFindings of Fact and Conclusions of Lawâ in the
27 District Courtâs records. Such a fact is a proper subject of judicial
United States v. Jones
1 (âAccordingly, a court may take notice of another court's order only
2 for the limited purpose of recognizing the âjudicial actâ that the
3 order represents or the subject matter of the litigation.â).
4 Second, whether the court may take judicial notice of the
5 contents, e.g., findings of fact in that memorandum. Those facts are
6 not properly the subject of judicial notice. Fed. R. Evid. 801-802
7 (hearsay); United States v. Jones, 29 F.3d 1549, 1553 (11th Cir.
8 1994); Wyatt v. Terhune, 315 F.3d 1108, 1114 (9th Cir. 2003)
9 (overruled on other grounds by Albino v. Baca, 747 F.3d 1162, 1168-
10 1169 (9th Cir. 2014).
11 For these reasons, the court will take judicial notice of
12 existence of the âFindings of Fact and Conclusions of Law.â The court
13 will decline to take judicial notice of all findings therein.
14 E. Memorandum of the United States Tax Court
15 Plaintiffs ask this court to take judicial notice of a 40-page
16 memorandum of the United States Tax Court.
17 The court will not take judicial notice of the memorandum or of
18 its contents. First, there has not been a showing of relevance. Fed.
19 R. Evid. 402. âEvidence is relevant if: (a) it has any tendency to
20 make a fact more or less probable than it would be without the
21 evidence; and (b) the fact is of consequence in determining the
22 action.â This is an action to except a debt from discharge. 11
23 U.S.C. § 523(a)(6),(7). The court is unable to comprehend how this
24 document makes the existence of a âdebt,â 11 U.S.C. § 523(a)(6),(a)(7)
25 more or less probable. And the plaintiffs have offered no argument as
26 to this issue.
27 Second, even if it were relevant, it runs afoul of the
1 other tribunals. Fed. R. Evid. 801-802 (hearsay); United States v.
2 Jones, 29 F.3d 1549, 1553 (11th Cir. 1994); Wyatt v. Terhune, 315 F.3d
3 1108, 1114 (9th Cir. 2003) (overruled on other grounds by Albino v.
4 Baca, 747 F.3d 1162, 1168-1169 (9th Cir. 2014). For these reasons,
5 the court declines to take judicial notice of the memorandum from the
6 United States Court or its contents.
7 VI. CONCLUSION
8 The request for judicial notice will be granted and denied as
9 provided herein. An order will issue from chambers.
10
Dated: February 28, 2023
11 ) ZL
Fredrick E. Clement
13 United States Bankruptcy Judge
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1 Instructions to Clerk of Court
2 Service List - Not Part of Order/Judgment
3 The Clerk of Court is instructed to send the Order/Judgment or other court generated
document transmitted herewith to the parties below.âŻThe Clerk of Court will send the document
4 via the BNC or, if checked ____, via the U.S. mail.
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6 Attorneys for the Plaintiff(s) Attorneys for the Defendant(s)
7 Bankruptcy Trustee (if appointed in the case) Office of the U.S. Trustee
Robert T. Matsui United States Courthouse
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501 I Street, Room 7-500
9 Sacramento, CA 95814
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27 Case Information
- Court
- Bankr. E.D. Cal.
- Decision Date
- February 28, 2023
- Status
- Precedential