10:00 AM
MOVANT: USA BANK NATIONAL ASSOCIATION
EH
Docket 68
- NONE LISTED -
Debtor(s):
Dina Guadalupe Garay Represented By Aalok Sikand
Vito Torchia - DISBARRED -
Movant(s):
U.S. BANK NATIONAL Represented By Megan E Lees
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 34
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 12. Alternative request for adequate protection is denied as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Juan E Lopez Represented By
Anthony Wilaras
Joint Debtor(s):
Maria L Lopez Represented By Anthony Wilaras
Movant(s):
Wells Fargo Bank, N.A. Represented By
10:00 AM
Trustee(s):
Darlene C Vigil
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CITIMORTGAGE INC
EH
Docket 31
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶ 2 and 3. DENY request under ¶ 14 for lack of cause shown.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Raul Navarrette Represented By Paul Y Lee
Joint Debtor(s):
Leslie Navarrette Represented By Paul Y Lee
Movant(s):
CitiMortgage, Inc. Represented By
10:00 AM
Trustee(s):
William F McDonald III Cheryl A Knapmeyer Carol M Turek
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
CASE DISMISSED 3/21/17
EH
Docket 35
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT relief from § 1301(a) stay. GRANT waiver of 4001(a)(3) stay. GRANT request under
¶¶ 2 and 12. DENY alternative request for adequate protection as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Emeterio Rodriguez Represented By
Anthony Obehi Egbase Crystle J Lindsey
Joint Debtor(s):
Leticia Rodriguez Represented By
Anthony Obehi Egbase
10:00 AM
Movant(s):
Crystle J Lindsey
Toyota Motor Credit Corporation as Represented By
Tyneia Merritt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ED KALEFF, FATHER JOSEPH SHEA
From: 3/28/17 EH
Docket 17
03/28/2017
The Movants seek relief to pursue a state court action against the Debtor and related parties. At minimum, the Movants must attach the complaint for the Court to examine any potential impacts the Complaint may have on the instant bankruptcy case.
APPEARANCES REQUIRED.
Debtor(s):
Bingo Innovations of California, Inc. Represented By
Stuart G Steingraber
Movant(s):
Ed Kalef, Father Joseph Shea Pro Se
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
CASE DISMISSED 2/9/17
From: 3/7/17 EH
Docket 12
03/07/17
The Debtor’s case was dismissed on February 9, 2017, therefore no stay is in place. However, the Movant has also requested relief under § 362(d)(4). As to this request, service is improper. The proof of service indicates that the Motion was served on the Debtor at "1925 Ridge Dr" instead of the correct mailing address "1925 Scenic Ridge Dr." On this basis, the Court is inclined to CONTINUE the hearing on the Motion to April 4, 2017, at 10:00 a.m. for Movant to re-serve the pleadings.
APPEARANCES WAIVED. Movant to file and serve the Notice of Continued Hearing and Motion on the Debtor.
Debtor(s):
Jerry A La Cues Pro Se
Movant(s):
Wells Fargo Bank, N.A. Represented By Jason C Kolbe
10:00 AM
Trustee(s):
Christopher Darden
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: TANYA C. CLAUSEN
From: 3/28/17 EH
Docket 9
"It is appropriate for bankruptcy courts to avoid incursions into family law matters out of considerations of court economy, judicial restraint, and deference to our state court brethren and their established expertise in such matters." In re Stanwyck, 2008 WL 8448839 at *4 (B.A.P. 9th Cir. 2008) (quoting In re MacDonald, 755 F.2d 715, 717 (9th Cir. 1985)). Furthermore, 11 U.S.C. § 362(b)(2)(A)(ii)-(iv) provides exceptions to the automatic for certain matters that are within the scope of the motion.
There are, however, requests contained within the motion that extend beyond the scope of the exceptions and the Stanwyck decision, requests that involve "the division of property that is property of the estate." The appropriate balance is to allow the state court to conduct equitable distribution proceedings in state court, while this Court retains jurisdiction over distributions from, and claims against, the estate. See, e.g., In re Robbins, 964 F.2d 342, 345-46 (4th Cir. 1992) ("[T]he bankruptcy court correctly placed equitable distribution disputes in the category of cases in which state courts have a special expertise and for which federal courts owe significant deference . . . .
Other courts that have considered the issue of lifting an automatic stay in order to let equitable distribution proceedings conclude in state court have sensibly done so while retaining jurisdiction to make the subsequent distributions from the estate."); In re
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Roger, 539 B.R. 837, 845 (C.D. Cal. 2015) ("According to the court in Curtis, the most important factor in determining whether to grant relief from the automatic stay to permit litigation against the debtor in another forum is the effect of such litigation on the administration of the estate."). The factors the Court should consider on a motion for relief from stay to proceed in a non-bankruptcy forum are the Curtis factors. See, e.g., In re Roger, 539 B.R. 837, 844-45 (C.D. Cal. 2015). The application of these factors in a divorce dissolution proceeding, such as this, generally results in a finding that granting relief from stay is proper. See, e.g., In re Taub, 438 B.R. 39, 45-50 (Bankr. E.D.N.Y. 2010) (applying Sonnax factors, which are identical to the Curtis factors). Ultimately, Debtor provides no justification for why the divorce proceeding should be stayed, and, in accordance with MacDonald decision, the state court is the proper venue for the proceeding to occur. Furthermore, the evidence submitted by Movant indicates that staying the divorce proceedings may prejudice Movant, as there appears to be a possibility that Debtor is attempting to hide assets.
For the reasons described above, the Court is inclined to GRANT the alternative relief requested by Movant, listed in ¶ 5 of their attachment to the request for relief. Movant will be allowed to proceed in state court to a final judgment. The stay will remain in effect with respect to the enforcement of any judgment against Debtor or property of the bankruptcy estate, subject to the exceptions outlined in § 362(b)(2)(A)(ii)-(iv), and this Court retains jurisdiction over distributions from, and claims against property, property of the estate.
APPEARANCES REQUIRED.
Debtor(s):
Jacob Joseph Clausen Represented By Jenny L Doling
Movant(s):
Tanya Clausen Represented By Christopher Hewitt
10:00 AM
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: AMERICREDIT FINANCIAL SERVICES INC dba GM FINANCIAL
EH
Docket 16
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to §§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶ 2 and 12. DENY alternative request for adequate protection as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Sandra Inez Guerra Represented By Lara T Abuzeid
Joint Debtor(s):
Herman Pedro Enciso Represented By Lara T Abuzeid
Movant(s):
Americredit Financial Services, Inc., Represented By
10:00 AM
Trustee(s):
Sheryl K Ith
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
EH
Docket 13
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to §§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶ 2 and 3.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
John W Wells Represented By Daniel King
Movant(s):
U.S. Bank National Association, not Represented By
Megan E Lees
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: KINECTA FEDERAL CREDIT UNION
EH
Docket 9
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request for adequate protection as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
William Pete Murray 3rd Represented By
Shawn Anthony Doan
Movant(s):
Kinecta Federal Credit Union Represented By Mark S Blackman
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: PARTNERS FEDERAL CREDIT UNION
EH
Docket 14
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Brian Scott Bunnell Represented By Todd L Turoci
Joint Debtor(s):
Wendi Lynn Bunnell Represented By Todd L Turoci
Movant(s):
Partners Federal Credit Union Represented By
10:00 AM
Trustee(s):
Yuri Voronin
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: PACIFIC MARINE CREDIT UNION
EH
Docket 8
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶ 2 and 11.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
David Allen Represented By
Todd L Turoci
Joint Debtor(s):
Kathleen Allen Represented By Todd L Turoci
Movant(s):
Pacific Marine Credit Union Represented By Timothy J Silverman
10:00 AM
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: DUKE PARTNERS II LLC and/or its ASSIGNEE (s)
CASE DISMISSED 3/28/17
EH
Docket 8
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (4) based on an unauthorized transfer of the property. GRANT waiver of 4001(a)(3) stay. GRANT request under ¶¶ 5 and 10. DENY request under ¶ 8 for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Tommy Leroy Weathers Sr Pro Se
Movant(s):
Duke Partners II, LLC and/or its Represented By
David M Poitras
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HERMILO SAAVEDRA
EH
Docket 13
Movant having provided sufficient evidence to rebut the presumption that the case was not filed in good faith, the Court is inclined to GRANT the motion and continue the automatic stay as to all creditors.
APPEARANCES REQUIRED.
Debtor(s):
Hermilo Saavedra Represented By Rebecca Tomilowitz
Movant(s):
Hermilo Saavedra Represented By Rebecca Tomilowitz Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT:
EH
Docket 17
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to §§ 362(d)(1) and (4), based on unauthorized transfers and multiple cases affecting the property. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 5. Alternative request for adequate protection is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Ryan Jess Gomez Represented By Babak Samini
Movant(s):
CAM XIV TRUST, its successors Represented By
Reilly D Wilkinson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: JOSHUA FERGUSON
EH
Docket 15
The Court is inclined to DENY the motion for the following reasons: (1) the motion states that the hearing is being set on regular notice, but Movant did not provide twenty-one days notice of the hearing; (2) the notice of the motion does not identify the affected parties, but instead simply states "[a]ll interested parties"; (3) lenders were not served per Rule 7004 as the motion was not served to the attention of an officer and was not sent by certified mail; (4) the motion does not explain with specificity what the issues with the prior plan were and how they have been remedied; and (5) the motion does not describe how the financial situation of Debtors has changed.
APPEARANCES REQUIRED.
Debtor(s):
Joshua Lawrence Ferguson Represented By Stephen H Darrow
Joint Debtor(s):
Wendy Mae Ferguson Represented By Stephen H Darrow
10:00 AM
Movant(s):
Wendy Mae Ferguson Represented By Stephen H Darrow
Joshua Lawrence Ferguson Represented By Stephen H Darrow
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
From: 12/2/14, 3/3/15, 3/10/15, 3/31/15, 5/27/15, 6/3/15, 6/16/15, 6/22/15, 7/7/15, 7/21/15, 7/28/15, 9/22/15, 10/20/15, 12/8/15, 12/15/15, 3/1/16, 4/26/16,
9/6/16, 12/6/16
EH
Docket 6
- NONE LISTED -
Debtor(s):
Bucur Rentals, LLC Represented By Michael Jay Berger
2:00 PM
From: 11/8/16, 12/6/16, 1/10/17, 3/7/17 EH
Docket 83
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
10:00 AM
EH
Docket 12
- NONE LISTED -
Debtor(s):
Osvaldo Solis Represented By Daniel King
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
EH
Docket 11
- NONE LISTED -
Debtor(s):
Victor Jauregui Jr Pro Se
Joint Debtor(s):
Melinda Monica Diaz Pro Se
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
EH
Docket 12
- NONE LISTED -
Debtor(s):
Dominique Latrice Roberts Pro Se
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
EH
Docket 8
- NONE LISTED -
Debtor(s):
JANELLE COLETTE PORTER Represented By
Mark D Edelbrock
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
EH
Docket 8
- NONE LISTED -
Debtor(s):
Ashley Frances Brown Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
EH
Docket 9
- NONE LISTED -
Debtor(s):
Gabriel Gonzalez Represented By Daniel King
Movant(s):
KIA Motors Finance Company Represented By Camaron Johnson
Trustee(s):
Todd A. Frealy (TR) Pro Se
11:00 AM
(HOLDING DATE)
From: 2/8/17, 3/8/17 EH
Docket 125
04/05/2017
The Status Conference is CONTINUED to April 26, 2017, at 11:00 a.m. as a holding date. The Court shall issue an amended order regarding fees ordered against Tunold and Kints in its September 29, 2014, order. Appearances are excused for the April 26, 2017, Status Conference.
APPEARANCES WAIVED.
Debtor(s):
Jerold R Meints Represented By Gene E O'Brien Harold M Hewell
Trustee(s):
Helen R. Frazer (TR) Pro Se
11:00 AM
HOLDING DATE
From: 1/4/17 EH
Docket 23
04/05/17
The US Trustee has indicated that a deposition of the alleged BPP, Laguna, is currently scheduled for April 19, 2017. Based on the ongoing settlement negotiations between the UST and Laguna, as well as the ongoing discovery efforts, the UST has requested a continuance of the hearing for 120 days for an evidentiary hearing. Absent objection by Laguna at the hearing, the Court is inclined to approve the UST's proposed briefing schedule and set an evidentiary hearing on July 10, 2017, at 11:00 a.m.
APPEARANCES REQUIRED. Telephonic appearance by the UST is approved.
Debtor(s):
Jesus Ramirez Guillen Pro Se
Joint Debtor(s):
Yovana Mondagron Guillen Pro Se
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
11:00 AM
Trustee(s):
Arturo Cisneros (TR) Pro Se
11:00 AM
Docket 33
04/05/17
BACKGROUND
On August 30, 2016 ("Petition Date"), Efren Estrada ("Debtor"), filed his petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). On December 12, 2016, the Debtor received a chapter 7 discharge.
On March 14, 2017 (or approximately 7 months after the Petition Date and post-discharge), the Debtors filed their motion for conversion of their case to a case under chapter 13 ("Motion"). On March 22, 2017, the Trustee filed opposition to the Debtors’ Motion ("Opposition"). On March 29, 2017, the Debtors filed their reply ("Reply").
DISCUSSION
The Trustee argues that the Debtor’s Motion should be denied because it has been filed in bad faith and because the Debtor’s chapter 7 discharge precludes conversion pursuant to this Court’s holding in In re Santos, 561 B.R. 825, 829 (C.D. Cal. 2017).
In response, the Debtor asserts that he will propose a chapter 13 plan that would pay the creditors whose debts have presumably already been discharged in this case. The only basis advanced by the Debtor to support his contention that a Debtor
11:00 AM
can propose to pay already discharged debts in a post-discharge converted chapter 13 case is that a different Judge in the Central District permitted such conversion in another case known to Counsel for the Debtor. The Debtor, however, has not indicated the legal basis for this other court’s ruling and such ruling would not be binding on this Court. Separately, the Court notes that although not expressly discussed in the Memorandum Decision on Santos, the Debtors in that case had also proposed to pay creditors whose debts had already been discharged at 100% through a confirmed chapter 13 plan. However, the bare promise that such a plan will be proposed where the Debtor’s chapter 7 debts have already been discharged has no binding effect.
Having failed to distinguish Santos, the Court declines to reach the issues raised by the Trustee regarding alleged bad faith of the Debtor in failing to properly identify the nature of his interest in the Property.
TENTATIVE RULING
Based on the foregoing, and following the Santos holding, the Court finds that "cause" exists to deny the Debtor’s request for conversion because the Debtor has received the benefits of a chapter 7 discharge and now seeks to avoid the concomitant burden of allowing the Trustee to administer the Debtor’s assets for the benefit of creditors.
APPEARANCES REQUIRED.
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Movant(s):
Efren Diaz Estrada Represented By
W. Derek May
W. Derek May
W. Derek May
11:00 AM
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brianna L Frazier Rika Kido
11:00 AM
Also #11 EH
Docket 45
- NONE LISTED -
Debtor(s):
JORGE V LAZARO Represented By Daniel S March
Joint Debtor(s):
YESSENIA M LAZARO Represented By Daniel S March
Movant(s):
JORGE V LAZARO Represented By Daniel S March Daniel S March
Trustee(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman
11:00 AM
From: 2/8/17, 3/8/17 Also #10
EH
Docket 43
02/08/2017
BACKGROUND
On September 20, 2016, Jorge Lazaro and Yessenia Lazaro (collectively, "Debtors") filed their petition for chapter 7 relief. Todd Frealy is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the bankruptcy estate is certain real property located at 2021 Adrienne Dr. in Corona, CA (the "Property").
On January 5, 2017, the Trustee filed his Application to Employ Keller Williams Realty & KW Commercial ("Broker") as Real Estate Broker ("Application") in order to appraise, market, and sell the Property.
On January 19, 2017, the Office of the United States Trustee ("UST") filed a limited opposition to the alternative compensation structure proposed by the Trustee. Specifically, the Trustee proposed that if the Debtors purchased the estate’s equity in the Property, the Broker would receive 6% of the sum paid to the Trustee (the "Alternative Compensation").
On February 1, 2017, the Trustee filed his Reply to UST’s Opposition and indicated that he would withdraw his request for approval of the Alternative Compensation.
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DISCUSSION
Pursuant to § 327(a), the trustee, subject to the court’s approval, may employ professional persons, such as auctioneers, to perform services for the estate so long as that representation is not adverse to the estate and the professional is a disinterested person. Federal Rule of Bankruptcy Procedure ("F.R.B.P.") 2014 and Local Bankruptcy Rule ("L.B.R.") 2014-1 govern the employment of professional persons.
The Application is supported by the declaration of W. Darrow Fiedler, a licensed real estate broker with Broker. In his declaration, Mr. Fiedler sets forth the disinterestedness of the Broker and his acknowledgment that he cannot be paid without approval from the Bankruptcy Court. The evidence satisfies § 327(a).
Additionally, the Court has evaluated the Notice of the Application and service and has determined that the Application complies with FRBP 2014 and LBR 2014.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the Application in its entirety as amended by the Reply, subject to the UST’s confirmation that its concerns have been adequately addressed.
APPEARANCES REQUIRED.
Debtor(s):
JORGE V LAZARO Represented By Daniel S March
Joint Debtor(s):
YESSENIA M LAZARO Represented By Daniel S March
11:00 AM
Movant(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman
Trustee(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman
11:00 AM
EH
Docket 26
- NONE LISTED -
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Movant(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui
Melissa Davis Lowe Elyza P Eshaghi Brandon J Iskander
11:00 AM
EH
Docket 14
04/05/17
BACKGROUND
On February 22, 2017, Marco and Grazia Ibarra (collectively, "Debtors") filed their petition for chapter 7 relief. The petition reflects that the Debtors were assisted in the filing of the bankruptcy case by Jonathan Preston ("Counsel").
On February 28, 2017, the case was dismissed for failure of the Debtors to file schedules.
On March 13, 2017, the Office of the United States Trustee ("UST") filed its Notice of Motion and Motion for Order Compelling Attorney to File Disclosure of compensation Pursuant to 11 U.S.C. § 329 ("Motion"). Service was proper and the Motion is unopposed.
DISCUSSION
Section 329(a) provides, in pertinent part that:
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Any attorney representing a debtor in a case under this title, or in connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation
11 U.S.C. § 329(a).
Here, the petition was filed by Counsel on behalf of the Debtors as evidenced by Counsel’s signature and contact information as set forth on the bankruptcy petition (Ex. 2). As indicated by the UST, Counsel has not filed a disclosure of compensation as required pursuant to § 329(a). Additionally, pursuant to LBR 9013-1(h), Counsel is deemed to consent to the granting of the Motion because he failed to file any opposition or response the UST’s Motion.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the Motion in its entirety. Counsel is ordered to file a Statement of Attorney Compensation within 30 days from entry of this order. Additionally, the Court shall retain jurisdiction over any matters arising from or related to section 329.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Marco Antonio Ibarra Represented By Jonathan R Preston
Joint Debtor(s):
Grazia Maria Elena Ibarra Represented By Jonathan R Preston
11:00 AM
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Denise M Tessier Deepalie M Joshi
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:16-01199 Revere Financial Corporation v. Bank of Southern California, N.A.
EH
Docket 41
04/05/2017
BACKGROUND
On July 29, 2016, Revere Financial Corporation ("RFC"), acting as Liquidating Trustee for the bankruptcy estate of Douglas J. Roger ("Debtor"), filed a complaint for avoidance and recovery of certain transfers made to Bank of Southern California, N.A. ("Defendant" or "BSC"), prepetition. On September 7, 2016, in response to a Motion to Dismiss filed by Defendant, RFC indicated its intent to exercise its right under FRCP 15 to file an amended complaint rather than file opposition to the Defendant’s motion.
On September 21, 2016, RFC filed its First Amended Complaint (the "FAC"), alleging the following claims as to Defendant: (1) Intentional Fraudulent Transfer (Count One – Receiver Order); (2) Intentional Fraudulent Transfer (Count Two – Statutory); (3) Preferential Transfer; (4) Unjust Enrichment; and (5) Money Had and Received. At issue is a single August 28, 2013, transfer from OIC Medical Corporation ("OIC") to Defendant of $408,947 (the "Transfer"). On December 13, 2016, the Court dismissed the FAC with leave to amend. On February 1, 2017, RFC filed its Second Amended Complaint (the "SAC"). The SAC and FAC allege the same claims against BSC based on the premise that OIC - the Debtor's wholly-owned and controlled medical corporation, held the Transfer solely for the Debtor's benefit or was a mere conduit for the Debtor’s attempt to shield the Transfer from the receivership order entered in state court as to Dr. Roger’s assets.
On February 28, 2017, BSC filed its Motion to Dismiss the SAC ("Motion").
2:00 PM
RFC filed opposition on March 8, 2017 ("Opposition") and a reply to the opposition was filed by BSC on March 15, 2017 ("Reply").
DISCUSSION
BSC again asks this Court to take judicial notice of, or consider extrinsic documents, without converting the Motion into a motion for summary judgment. However, the Court reiterates the analysis set forth in the order granting the Motion to Dismiss the FAC (Docket No. 38) and again declines to consider the extrinsic documents referenced by BSC (as set forth below), and also for the reasons set forth in the Opposition:
Defendant urges this Court to consider certain extrinsic documents filed in connection with its Motion and provides authority for the proposition that such information may be considered without the need for conversion of the Motion to a motion for summary adjudication. However, the Court finds that RFC has adequately distinguished the cases cited by Defendant in support of its request for this Court to consider documents not attached to the FAC. In particular, Defendant has provided no evidence to support its assertion that RFC necessarily relied on the documents attached to its Motion in preparation of the FAC. RFC was also not a party to the documents and Defendant has otherwise failed to establish that RFC relied on the bank statements in crafting the FAC such that the documents may be considered without converting the Motion into a motion for summary judgment.
Separately, the Court is disinclined at this early juncture to convert the Motion into a motion for summary judgment.
Likewise, the Court is unconvinced that the documents are of the type that are either "generally known" or "capable of accurate and ready determination" such that they are judicially noticeable documents under Rule 201 of the Federal Rules of Evidence.
In response to the arguments of RFC against permitting this Court to consider the extrinsic documents, Defendant asserts that Lee v. City of
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Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001), supports the Court’s consideration of the documents. Specifically, Defendant asserts that the documents may be considered because BSC’s "transaction history of OIC and DJRI accounts were alluded to in the [FAC] by reference to the cashier’s checks and bank deposits – much like the reference to the extradition process in Lee." (Reply at 4:11-13). Defendant, however, misapprehends Lee. In Lee, the trial court took judicial notice of the (1) fact of the extradition hearing; and (2) the fact that a Waiver of Extradition was signed by the defendant. The trial court also relied on the validity of the Waiver of Extradition in dismissing the plaintiff’s claim at the pleading stage. Lee at 690. The Ninth Circuit explicitly found that this last step exceeded what was permissible based on judicial notice because the trial court did more than just consider the fact of the Waiver but also took notice of the facts recited in another court’s opinion as true. In doing so, the trial court controverted the 12 (b)(6) requirement that it accept all allegations in the complaint as true and draw all reasonable inferences in plaintiff’s favor. Id.
Here, Defendant is asking this Court to accept more than the existence of the bank statements. Defendant is asking the Court to take judicial notice of the transactions set forth in the statements, accept them as true, and further, accept as true the conclusions drawn from the statements by the Bank’s Executive Vice President, Mr. Marshall. This Lee does not permit. Based on the foregoing, the Court declines to take judicial notice of, or consider, the documents attached to the Motion.
Order Granting Motion to Dismiss FAC, December 13, 2016.
Under Civil Rule 12(b)(6), made applicable in adversary proceedings through Rule 7012, a bankruptcy court may dismiss a complaint if it fails to "state a claim upon which relief can be granted." In reviewing a Civil Rule 12(b)(6) motion, the trial court must accept as true all facts alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.
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2001). However, the trial court need not accept as true conclusory allegations in a complaint or legal characterizations cast in the form of factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007);
Hartman v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008).
To avoid dismissal under Civil Rule 12(b)(6), a plaintiff must aver in the complaint "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). It is axiomatic that a claim cannot be plausible when it has no legal basis. A dismissal under Civil Rule 12(b)(6) may be based either on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson
v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir.2008).
The Court, in its tentative ruling on BSC’s prior Motion to Dismiss, found that RFC could not prevail on its First through Fifth Claims for Relief because it had not alleged sufficient facts to set forth plausible claims where the funds at issue in the Transfer were transferred to BSC by OIC, not by the Debtor. In its prior analysis, the Court agreed with BSC that because OIC is a distinct legal entity from the Debtor, absent facts indicating that OIC did not have legal dominion over the funds at issue, RFC could not prevail in its claims. In the SAC, RFC has now added allegations in an effort to establish that OIC acted as the Debtor’s agent or seeking to demonstrate that because OIC was controlled by the Debtor and directed by him, that the money deposited with OIC never became property of OIC and instead remained property of the Debtor.
In support of this contention, RFC cites to In re Viola, 469 B.R. 1, 6 (9th Cir.
BAP 2012). RFC argues that the bare fact of OIC’s separate legal identity is insufficient to undermine the allegations that OIC was acting as a "mere conduit" for the Debtor. However, the analysis in Viola undercuts RFC’s argument. In Viola, the BAP discussed in detail the distinction between the "dominion test" and "control test" which are used by courts to determine whether an entity is a "mere conduit". In Viola, the BAP explains that the Ninth Circuit has adopted the more restrictive dominion test and not the "more lenient" control test:
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Under the control test, an examining court must evaluate a transaction in its entirety and make a "logical and equitable" determination as to whether "the banks actually controlled the funds or merely served as conduits, holding money that was in fact controlled by either the transferor or the real transferee." Therefore, while similar, "[t]he dominion test focuses on whether the recipient of funds has legal title to them and the ability to use them as he sees fit. The control test takes a more gestalt view of the entire transaction to determine who, in reality, controlled the funds in question."
Id. Here, the fact-intensive analysis advocated by RFC more closely aligns with the control rule. BSC’s citation to In re David L. Duckworth, 2013 Bankr. LEXIS 1396, sets forth the better view, consistent with the Ninth Circuit’s more restrictive interpretation. In Duckworth, the court found that the distinct legal entity at issue was not a "mere conduit" because
[it] was not a mere depository, agent, intermediary or trustee whose legal authority over the funds was limited by some agreement or statute
… As a validly formed and existing limited liability company, it had the authority to own and expend the funds for its own purposes. That the Debtor caused the funds to be expended for his personal benefit is not material to the dominion and control inquiry, which focuses on the entity’s power over the funds.
Id. Similarly, here, RFC has advanced no factual allegation or legal theories to undercut the legal authority of OIC over the Transfer, irrespective of whether the Debtor as a principal of the company directed some improper use of the funds. RFC’s remaining counter-examples similarly fail. The bank referenced in In re M. Blackburn Mitchell Inc., 164 B.R. 117, 131 (Bankr. N.D. Cal. 1994), never held title to the funds at issue and its role was instead limited to issuance of a cashier’s check. The law firm in In re Fabric Buys of Jericho, Inc., 33 B.R. 334 (Bankr. S.D.N.Y. 1983), never held title to the funds at issue in that case. Instead, the funds deposited into with the law firm were placed into an escrow account which by its nature would have prevented the law firm from exercising dominion over the funds. These examples all contrast with the facts of the instant case, wherein RFC has alleged no facts indicating a legal
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agreement or other restriction on OIC’s dominion over the funds.
Finally, RFC references In re Incomnet, Inc., 463 F.3d 1064, 1071 (9th Cir. 2006), and based thereon argues (assuming, arguendo, that Dr. Roger gave explicit direction to Nicole Ebarb or other Roger Agents to deposit the funds in OIC’s bank account on behalf of Dr. Roger and for his benefit) OIC would not have had "dominion" over the funds. (SAC, ¶¶ 24-25). However, the bare allegations in the SAC indicating that the funds deposited with OIC were being held on behalf of Dr. Roger by OIC are insufficient. The example which RFC hopes to illustrate is one which the Ninth Circuit described as "when an entity has legal title as a formal matter, but legally does not have discretion in the application of funds." Here, in contrast to the example of the bank which receives a direction from the client to deposit funds into a specific account, there are no facts to indicate that OIC received any direction to segregate the funds allegedly deposited by Ebarb for the benefit of Dr. Roger. Based on the foregoing, the Court is inclined to find that RFC has failed to assert sufficient facts to plausibly claim that the Debtor, and not OIC, had dominion over the funds at issue based on a "mere conduit" theory.
Separately, in a footnote, RFC raised the possibility that a "resulting trust" was created as between OIC and the Debtor such that the Debtor retained an interest in the funds that were eventually transferred to BSC. (Opp’n at p. 13, fn 6). "A resulting trust arises by operation of law from a transfer of property under circumstances showing that the transferee was not intended to take the beneficial interest." Concorde Equity II, LLC v. Miller, 732 F. Supp. 2d 990, 1002 (N.D. Cal. 2010). Based on the Court’s limited review of RFC’s "resulting trust" theory, and the factual support contained in the SAC indicating that the Debtor directed funds deposited in OIC to be used on his behalf and that OIC held and then used the funds to pay BSC on the Debtor’s behalf, it appears that RFC may be able to sufficiently allege a plausible legal theory on which RFC could demonstrate that despite OIC’s legal title or dominion over the funds, the Debtor retained an equitable interest in the Property such that the SAC is plausible. BSC’s response indicating that RFC’s "resulting trust" theory has been waived is unsupported. Here, however, the SAC does not allege the existence of a resulting trust, and for that reason grounds exist to DISMISS the First, Second and Third Claims, albeit with leave to amend.
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BSC alleges that to the extent the Court finds that OIC held the Debtor’s funds to pay down his debts, the earmarking doctrine applies. The earmarking doctrine essentially provides that where a third person makes a loan to a debtor to enable him to satisfy the claim of another creditor, the new creditor simply steps into the shoes of the old creditor and thus the funds exchanged can be found never to have become an asset of the estate. (Motion, p. 24). On this point, the Court agrees with RFC that the determination of whether the earmarking doctrine applies requires evidence and a factual determination regarding the character of the Transfer and specifically, whether it constitutes a loan to the Debtor or as alleged in the SAC, whether it was a transfer of property of the Debtor. BSC is free to raise the earmarking doctrine as an affirmative defense in its answer.
BSC asserts that RFC cannot maintain a claim for unjust enrichment because California courts do not recognize a standalone claim for unjust enrichment. However, the Ninth Circuit Court of Appeals recently interpreted California law on this point and held that, when faced with a claim for relief alleging unjust enrichment, district courts ordinarily should treat the claim for relief "as a quasi-contract claim seeking restitution." Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir.2015).
Restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory (an election referred to at common law as "waiving the tort and suing in assumpsit"). In such cases, where appropriate, the law will imply a contract (or rather, a quasi- contract), without regard to the parties' intent, in order to avoid unjust enrichment.
McBride v. Boughton, 123 Cal. App. 4th 379, 388 (2004) (internal citations omitted). As to the quasi-contract claim, the Court agrees with BSC that cases applying this equitable doctrine have typically found that the party that received the benefit was the party which perpetrated the fraud, duress, conversion etc. As RFC has not provided any authority that this claim may lie when the fraud is perpetrated by the party that deposited or paid out the money, the Court is inclined to GRANT the Motion as to the Fourth Claim for Unjust Enrichment because the SAC does not allege wrongdoing by BSC.
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"A cause of action is stated for money had and received if the defendant is indebted to the plaintiff in a certain sum ‘for money had and received by the defendant for the use of the plaintiff.’" Gutierrez v. Girardi, 194 Cal. App. 4th 925, 937, 125 Cal. Rptr. 3d 210, 219 (2011).
This common count is available in a great variety of and "lies wherever one person has received money which belongs to another, and which in equity and good conscience should be paid over to the latter." Id. (internal citations omitted). Here, the allegations of the SAC are sufficient to maintain a claim. Specifically, where RFC has alleged that BSC received funds which properly belong to the estate, the policies underlying the bankruptcy system support a plausible claim that equity would be satisfied by return of those funds to the Debtor’s creditors for pro rata distribution. As such, the Court is inclined to DENY the Motion as to the Fifth Claim.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT in part and DENY in part as follows:
GRANT as to the First, Second and Third Claims, with leave to amend; GRANT as to the Fourth Claim without leave to amend; and
DENY as to the Fifth Claim. APPEARANCES REQUIRED.
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Bank of Southern California, N.A. Represented By
Kathryn M.S. Catherwood
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Movant(s):
Bank of Southern California, N.A. Represented By
Kathryn M.S. Catherwood Kathryn M.S. Catherwood Kathryn M.S. Catherwood Kathryn M.S. Catherwood
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
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Adv#: 6:17-01021 Whitmore v. E*Trade Securities, LLC et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
William Redfield Barlow III Represented By Michael E Clark Heather J Canning
Defendant(s):
E*Trade Financial Corporation Pro Se
E*Trade Securities, LLC Pro Se
Joint Debtor(s):
Lindsay Marie Barlow Represented By Michael E Clark Heather J Canning
Plaintiff(s):
Robert Whitmore Represented By Julie Philippi
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Trustee(s):
Robert Whitmore (TR) Represented By Julie Philippi Todd L Turoci
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Adv#: 6:16-01144 Simons v. Chathan Law Group
From: 9/7/16, 12/7/16, 2/8/17, 3/22/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Chathan Law Group Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack
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Sarah Cate Hays D Edward Hays
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Adv#: 6:16-01148 Pringle v. O. Allen Alpay, Trustee of the Alpay Living Trust
Also # EH
Docket 86
04/05/17
BACKGROUND
On September 8, 2015, an involuntary bankruptcy petition was filed by Norman Musselman, Erwin Seifert, and Gouvis Engineering Consulting Group ("Petitioning Creditors") as against Manors San Bernardino Ave LLC ("Debtor"). John Pringle is the duly appointed chapter 7 trustee ("Trustee"). The Debtor is a California Corporation.
On June 06, 2016, the Trustee filed an adversary complaint against O. Allen Alpay, Trustee of the Alpay Living Trust dated October 18, 1996 ("Alpay"); and Manors Construction and Development Co., Inc., a California Corporation ("MCD") (collectively, "Defendants"), to determine the validity, priority or extent of lien and for declaratory relief (the "Complaint").
The Complaint alleged that, prepetition, the Debtor owned real property comprising approximately 3.116 acres commonly referred to as 16803-16829 San Bernardino Ave in the City of Fontanta (the "Property"). The Trustee further alleged that on April 12, 2012, a trust deed was recorded encumbering the Property in favor of Alpay as Doc. No. 2012-0140286 (the "Alpay DOT"). The dispute arises from the facts surrounding the validity of the Alpay DOT. Specifically, the Trustee alleged that the Alpay DOT indicates it was executed on behalf of the Debtor "By: Manors Development & Construction, Inc., a California corporation, Manager" (note: the
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individual signatory was Paul Minnick as "President"). However, the Trustee asserts that (1) at all times relevant, there was no entity registered with the California Secretary of State as "Manors Development & Construction, Inc." (2) that the correct entity intended to execute the Alpay Trust Deed was MCD; and (3) that MCD had been suspended by the California Franchise Tax Board, effective May 3, 2010, pursuant to a notice of suspension ("Suspension Notice") which provided that its "rights, powers, and privileges" were suspended or forfeited as of the date of the notice.
The Complaint was dismissed on October 11, 2016, with leave to amend. On October 24, 2016, the Trustee filed a First Amended Complaint (the "FAC").
Subsequently, Alpay filed a cross-complaint against the Debtor, Paul Minnick, MCD, MCG, Norman Musselman, Erwin Seifert, and "[p]ersons uknown , claiming any legal or equitable right, title, etc. in the Property", and moved to dismiss the FAC. On March 6, 2017, the Court granted the Motion to Dismiss but permitted the Trustee leave to amend the FAC. On the same date, the Court indicated its intent to deny the Motion to Dismiss Alpay’s cross-complaint as moot based on the procedural impropriety of filing a cross-complaint prior to the filing of an answer. Separately, the Court continued the hearing on the Motion to Dismiss Alpay’s cross-complaint for the parties to provide supplemental briefing on the Trustee’s argument that Alpay’s cross- complaint should be stricken as to the Trustee because such cross-complaint constitutes a violation of California’s anti-SLAPP statute.
DISCUSSION
California's "anti-SLAPP statute was enacted to allow early dismissal of meritless first amendment cases aimed at chilling expression through costly, time- consuming litigation." Zamani v. Carnes, 491 F.3d 990, 994 (9th Cir. 2007).
California's anti-SLAPP statute provides a burden-shifting mechanism to weed out "lawsuits that ‘masquerade as ordinary lawsuits' but are brought to deter common citizens from exercising their political or legal rights or to punish them for doing so." Batzel v. Smith, 333 F.3d 1018, 1024 (9th Cir. 2003) (quoting Wilcox v. Superior Court, 27 Cal.App.4th 809, 816, 33 Cal.Rptr.2d 446 (1994)). In Makaeff v. Trump Univ., LLC, 715 F.3d 254, 261 (9th Cir. 2013), the Ninth Circuit explained that:
To prevail on an anti-SLAPP motion, the moving defendant must make a prima facie showing that the plaintiff's suit arises from an act in
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furtherance of the defendant's constitutional right to free speech. The
burden then shifts to the plaintiff, to establish a reasonable
probability that it will prevail on its claim in order for that claim to survive dismissal. Cal. Civ. Proc. Code § 425.16(b)(1); Under this
standard, the claim should be dismissed if the plaintiff presents an insufficient legal basis for it, or if, on the basis of the facts shown by the plaintiff, "no reasonable jury could find for the plaintiff." Metabolife Int'l, Inc. v. Wornick, 264 F.3d 832, 840 (9th Cir. 2001) (citation and internal quotation marks omitted).715 F.3d at 261 (first citation omitted).
Manzari v. Associated Newspapers Ltd., 830 F.3d 881, 886–87 (9th Cir. 2016).
The basis for the Trustee’s Anti-Slapp argument is that the Cross-complaint filed by Alpay essentially seeks to punish the Trustee for filing a lis pendens against the Property. The Court does not agree with the Trustee’s interpretation of the Cross- complaint. Instead, the crux of Alpay’s Cross-complaint focuses on the allegedly fraudulent nature of the deeds of trust/debts recorded by or in favor of Paul Minnick, Norman Musselman, and Erwin Seifert, as well as their efforts in filing the involuntary petition that brought the Debtor into bankruptcy. The primary support for the Trustee’s Anti-Slapp argument is based on ¶ 49 of the Cross-Complaint which provides as follows:
49. Alpay is informed and believes and thereon alleges that the Adversary Complaint was advanced as a strategic effort to advance a fraudulent scheme in order to: (1) invalidate Alpay’s deed in order for Minnick, Musselman and Seifert’s deeds to take priority over payment; and/or (2) as a tool to be utilized to manipulate Alpay into capitulating to taking less money than the total debt owed …).
(Cross-complaint, ¶49).
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Here, in asserting that the filing of the Adversary Complaint was itself a part of the alleged fraudulent scheme, the Cross-complaint inartfully appears to insinuate the Trustee’s actions were also a part of that fraud. However, that Alpay did not name the Trustee as a cross-defendant and that the remainder of the Cross-complaint centers on the actions of Musselman, Seifert, and Minnick indicates that the better reading of the Cross-Complaint is that Alpay did not intend to bring suit against the Trustee or otherwise attempt to chill lawful expression by the Trustee. Nor is the Court persuaded by Trustee that the naming of the Debtor in the Cross-complaint necessarily implicates the Trustee’s postpetition actions in filing the adversary proceeding and lis pendens.
Based on the foregoing, the Court is inclined to DENY the Trustee’s Motion to the extent that it seeks to have this Court find that the Cross-Complaint violates California’s anti-SLAPP statute.
The Court also finds that Alpay’s inartful drafting prompted the Trustee’s filings because ¶49 can be reasonably read to imply a fraudulent purpose in the filing of the instant adversary proceeding by the Trustee. On this basis, the Court denies Alpay’s request for fees and sanctions against the Trustee based on its assertion that the Trustee’s anti-SLAPP argument is an attempt to harass, annoy or cause delay.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to DENY the Trustee’s Motion to Dismiss the Cross-complaint as moot for the reasons stated on the record at the prior hearing, and separately rules that the Trustee has failed to establish that the Cross- complaint of Alpay constitutes a violation of California’s anti-SLAPP statute.
APPEARANCES REQUIRED.
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On November 17, 2016, Alpay filed a cross-complaint against Paul Minnick, the Debtor, Manors Construction & Development, Inc., Norman Musselman, and Erwin Seifert (the "Cross-Complaint"). The Cross-Complaint alleges, in pertinent part, that Paul Minnick abused his official positions at MCD/MDC and at MCG Development Co, Inc. (managers of the Debtor during the relevant period), to advance a conspiracy with Defendants Musselman and Seifert by which fraudulent liens were attached to the Property on the basis of fraudulent debts. On April 6, 2015, Alpay initiated a non-judicial foreclosure of the Property. Subsequently, on or about September 8, 2015, Defendants Musselman and Seifert initiated an involuntary chapter 7 petition as to the Debtor, thereby postponing the foreclosure sale. Alpay alleges that the bankruptcy filing was an attempt by the Defendants to postpone the sale to permit them additional time to attempt to market and sell the Property in order to profit from the fraudulent deeds of trust encumbering the Property. Finally, Alpay alleges that the filing of the Adversary Complaint is itself a part of the fraudulent scheme of Minnick Musselman and Seifert.
The Cross-Complaint alleges the following claims against all Cross- Defendants: (1) Fraud and Conspiracy; (2) Declaratory Relief; and (3) Cancellation of Deeds or Rescissions. On December 19, 2016, the Trustee filed his Motion to Dismiss, Strike or Stay Alpay’s Cross-Claim. (the "Motion").
DISCUSSION
FRCP 12 and 13 provide that both compulsory and permissive counterclaims and crossclaims must be stated in a "pleading" and the only pleading permitted in response
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to a complaint is an "answer." FRCP 13(a)(1) & (b).
FRCP 7 lists each pleading permitted under the Federal Rules and does not include a standalone counterclaim or crossclaim as a pleading:
Pleadings. Only these pleadings are allowed:
a complaint;
an answer to a complaint;
an answer to a counterclaim designated as a counterclaim;
an answer to a crossclaim;
a third-party complaint;
an answer to a third-party complaint; and
if the court orders one, a reply to an answer.
As such, the filing of a motion to dismiss (but where Alpay has not filed an answer) does not allow Alpay to file a counterclaim or crossclaim. See National Ass'n of Gov. Employees, Inc. v. National Emergency Med. Services Ass'n, Inc., 969 F.Supp.2d 59, 67(D. Mass. 2013); Bernstein v. IDT Corp., 582 F. Supp. 1079, 1089 (D. Del. 1984).
TENTATIVE RULING
Based on the foregoing, the Court is inclined to DENY the Motion to Dismiss the Cross-Complaint as moot, given the Court’s determination that the filing of the Cross- Complaint (Docket No. 62) was prematurely filed by Alpay in contravention of the Federal Rules of Civil Procedure.
APPEARANCES REQUIRED.
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Debtor(s):
Manors San Bernardino Ave LLC Represented By
Gaurav Datta
Defendant(s):
Manors Construction & Pro Se
O. Allen Alpay, Trustee of the Alpay Represented By
Stephen B Goldberg Renee De Golier John L Bailey
Movant(s):
John P Pringle (TR) Represented By Scott Talkov
John P. Pringle Represented By Scott Talkov Douglas A Plazak
Plaintiff(s):
John P. Pringle Represented By Scott Talkov Douglas A Plazak
Trustee(s):
John P Pringle (TR) Represented By Larry D Simons Scott Talkov Frank X Ruggier
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Adv#: 6:16-01148 Pringle v. O. Allen Alpay, Trustee of the Alpay Living Trust
From: 1/11/17, 1/24/17, 2/8/17, 3/22/17 Also #
EH
Docket 62
- NONE LISTED -
Debtor(s):
Manors San Bernardino Ave LLC Represented By
Gaurav Datta
Defendant(s):
Manors Construction & Pro Se
O. Allen Alpay, Trustee of the Alpay Represented By
Stephen B Goldberg Renee De Golier John L Bailey
Plaintiff(s):
John P. Pringle Represented By Scott Talkov Douglas A Plazak
2:00 PM
Trustee(s):
John P Pringle (TR) Represented By Larry D Simons Scott Talkov Frank X Ruggier
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Adv#: 6:17-01028 Frealy, Chapter 7 Trustee v. Tanaka et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
Sheri Tanaka Christopher Represented By Brian J Soo-Hoo
Defendant(s):
Leora Linda Tanaka Represented By David L Prince
Estate of Yaeko Sato, a California Represented By
David L Prince
Ryan Satoshi Tanaka Represented By David L Prince
Ronald Howard Tanaka Represented By David L Prince
Carolyn Naomi Tanaka Represented By
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David L Prince
Plaintiff(s):
Todd A Frealy, Chapter 7 Trustee Represented By
Monserrat Morales
Trustee(s):
Todd A. Frealy (TR) Represented By Monserrat Morales
2:00 PM
Adv#: 6:17-01002 BOSNIAN WAND AIRLINES v. Eddington
From: 3/22/17 Also #
EH
Docket 5
04/05/2017
BACKGROUND
On August 18, 2016 (the "Petition Date"), William Mark Eddington ("Debtor") filed his petition for chapter 7 relief. The deadline for objections to the Debtor’s discharge was set as March 31, 2017.
On January 5, 2017, Bosnian Wand Airlines ("Plaintiff") filed a complaint objecting to the Debtor’s discharge pursuant to § 727(d)(1) and § 523(a)(2) for fraud, or under § 523(a)(4) for fraud while acting in a fiduciary capacity, or for embezzlement (the "Complaint"). The Complaint alleges, in pertinent part, that:
Defendant Debtor interchangeably represented himself to Plaintiff as either LLFC Corporation or Laserline Lease Finance Corporation (Compl. ¶2);
Plaintiff and Debtor entered into a letter of intent, dated March 23, 2015, signed by Debtor as President of LLFC Corporation, located in Palm Springs, California. Pursuant to the terms of the Letter of Intent (LOI), Plaintiff provided Debtor with a $186,000 refundable deposit. (Id. at ¶3);
Contrary to the representations by Debtor, neither LLFC Corporation nor its alter ego, Laserline Lease Finance Corporation, were registered to do business in California (Id. at ¶4);
At Debtor’s express request, relying upon Debtor’s intentional fraudulent misrepresentations as to the Debtor’s identity and his ability to perform under
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contract, Plaintiff provided Debtor with the $186,000 deposit for Debtor to hold in trust (Id. at ¶6);
Debtor as trustee of Plaintiff’s deposit, owed Plaintiff a fiduciary duty to
ensure that Plaintiff’s funds were kept safe and separate from Debtor’s various business accounts and not to use Plaintiff’s funds for personal expenses, operating expenses, salaries, or other misuse (Id. at ¶8);
When it became apparent that the subject transaction would not be performed, Plaintiff requested that Debtor refund the deposit (Id. at ¶9);
Debtor ignored all requests for a refund and it was determined that Debtor had interchangeably held himself out as two entities … neither of which was legally operating or otherwise registered to do business in California (Id. at ¶ 10);
Debtor verbally stated to Plaintiff’s US agent, Mr. Ray Nazemi, that Debtor could not return Plaintiff’s $186,000 refundable deposit because Debtor had used the funds to pay off other debts (Id. at ¶13).
On February 21, 2017, the Debtor filed a motion to dismiss the complaint or in the alternative to strike and for a more definite statement ("Motion").
On March 6, 2017, Plaintiff filed his opposition to the Motion ("Opposition").
On March 15, 2017, the Debtor replied ("Reply").
DISCUSSION
The arguments advanced by the Debtor as to why the Complaint should be dismissed are as follows: (1) that pursuant to California Civil Code, Section 1624, there was no written agreement obligating the Debtor to pay the obligations of LLFC and the Debtor was not a guarantor, thus there is no liability as to the Debtor; (2) allegations made on information and belief are insufficient; (3) allegations that the Debtor failed to give notice of the bankruptcy do not support revocation; (4) the Complaint is insufficient on its face because it fails to plead fraud with specificity; and (5) allegations related to § 548 should be stricken as immaterial and inappropriate.
Civil Rule 12(b)(6) standards
Under Civil Rule 12(b)(6), made applicable in adversary proceedings through Rule 7012, a bankruptcy court may dismiss a complaint if it fails to "state a claim upon which relief can be granted." In reviewing a Civil Rule 12(b)(6) motion, the trial
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court must accept as true all facts alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). However, the trial court need not accept as true conclusory allegations in a complaint or legal characterizations cast in the form of factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007);
Hartman v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008).
To avoid dismissal under Civil Rule 12(b)(6), a plaintiff must aver in the complaint "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). It is axiomatic that a claim cannot be plausible when it has no legal basis. A dismissal under Civil Rule 12(b)(6) may be based either on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson
v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir.2008).
First Claim for Relief: § 727(d)(1)
Bankruptcy Code § 727(d)(1) provides:
On request of the trustee, a creditor, or the United States trustee, and after notice and a hearing, the court shall revoke a discharge granted under subsection (a) of this section if—
such discharge was obtained through the fraud of the debtor, and the requesting party did not know of such fraud until after the granting of such discharge.
"As a general rule, to obtain relief under § 727(d)(1), the plaintiff must prove that the debtor committed fraud in fact The fraud must be proven in the
procurement of the discharge and sufficient grounds must have existed which would have prevented the discharge." In re Bowman, 173 B.R. 922, 925 (9th Cir.BAP1994) (internal citations omitted).
On its face, the Plaintiff’s first claim for relief must fail because the Debtor has not yet obtained a discharge and section 727(d)(1) specifically contemplates a situation in which the Debtor has already procured such discharge prior to the filing of the complaint. On this basis, the Court is inclined to GRANT the Motion as to the
2:00 PM
First Claim for Relief and dismiss BWA’s § 727 claim.
Section 1624: The Debtor’s liability on a debt owed by LLFC
The Debtor asserts that since the LOI on which BWA brings its suit was between BWA and LLFC, and since the Debtor was not a guarantor on the debt, that BWA cannot assert there is liability as to the Debtor. BWA, in response, asserts that
the LOI is binding on the Debtor because he became a fiduciary when he requested the deposit; (2) LLFC and Laserline Lease Finance Corp. do not exist and cannot do business in California; and (3) California Civil Code § 2794 is an exception to noncompliance with Section 1624.
BWA’s arguments fail for several reasons: First, there is no legal authority provided for the proposition that the Debtor became a "fiduciary" under California law as asserted by BWA. Second, the evidence attached to the State Court Complaint of BWA indicates that LLFC and Laserline Lease Finance Corp. did exist and the State Court Complaint includes an Affidavit of the Debtor in which he explains that LLFC was organized under Utah law but subsequently dissolved at the end of 2016. Thus, based on the existence of LLFC as a corporate entity, it appears that to prevail on its claims BWA must amend its Complaint to properly allege a basis or bases upon which the corporate fiction should be disregarded and liability held against the Debtor personally. Finally, as to section 2794, BWA has failed to provide authority or analysis of this code provision which would permit the Court to apply it to the facts of this case. Based on the foregoing, and finding primarily that the Complaint fails to adequately set forth a legal or factual basis to disregard the corporate fiction and hold the Debtor personally liable for funds paid to LLFC by BWA, under an alter ego theory or otherwise, the Court is inclined to find that the Motion should be GRANTED and the Complaint dismissed with leave to amend.
Second Claim for Relief: § 523(a)(2)(A), Fraud
Section 523(a)(2)(A) provides that
A discharge under section 727 ... of this title does not discharge an individual debtor from any debt—
....
for money, property, services, or an extension, renewal or refinancing of credit, to the extent obtained by—
(A) false pretenses, a false representation, or actual fraud, other than a
2:00 PM
statement respecting the debtor's or an insider's financial condition; 11 U.S.C. § 523(a)(2)(A).
It is well-settled that a creditor alleging actual fraud must prove five elements:
the debtor made a material misrepresentation, (2) with knowledge of its falsity, (3) with the intent to deceive, (4) on which the creditor relied, and (5) due to which the creditor sustained loss or damage. In re Kirsh, 973 F.2d 1454, 1456 (9th Cir.1992); In re Britton, 950 F.2d 602, 604 (9th Cir.1991); In re Rubin, 875 F.2d 755, 759 (9th Cir.1989).
Allegations regarding fraud are subject to a heightened pleading standard.
Civil Rule 9(b), made applicable to adversary proceedings by Rule 7009, requires that a plaintiff must state "with particularity the circumstances constituting fraud. " The
Ninth Circuit has provided guidance for the "with particularity" requirement by stating that to comport with Civil Rule 9(b) the complaint must (1) specify the averred fraudulent representations; (2) aver the representations were false when made; (3) identify the speaker; (4) state when and where the statements were made; and (5) state the manner in which the representations were false and misleading. Lancaster Cmty.
Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397, 405 (9th Cir.1991).
As a threshold matter, as set forth above, having failed to join LLFC and Laserline or to assert a claim that would establish personal liability as to the Debtor, the Complaint cannot sustain a claim under § 523 because BWA has not set forth the basis for a debt owed by the Debtor. Separately, as to fraud more generally, the Complaint sets forth allegations indicating that the Debtor misrepresented the authority of LLFC Corporation and/or Laserline Lease Finance Corporation (the "Companies") to conduct business in California as well as the ability of the Debtor to perform under the LOI. However, the Complaint does not draw a factual link between the Debtor’s alleged misrepresentations regarding the Companies’ ability to conduct business and the how those misrepresentations caused BWA to sustain a loss or damage. Nor does the Complaint allege the time and place of alleged misrepresentations with the specificity required by Rule 9(b). For this additional reason, the Court is inclined to GRANT the Motion and dismiss the Complaint with leave to amend.
2:00 PM
Third Claim for Relief: § 523(a)(4), Fraud while acting in a fiduciary capacity or embezzlement
The Complaint does not clearly set forth the bases for its claim under § 523(a) (4). However, based on the language of the prayer for relief, and the frequent references to fraud and to the Debtor’s alleged fiduciary capacity, BWA appears to be proceeding under a claim for fraud while acting as a fiduciary and separately, as to embezzlement.
Section 523(a)(4) provides in relevant part that a discharge under section 727 does not discharge an individual debtor from any debt for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny. 11 U.S.C. § 523(a)(4).
First, whether a relationship is a "fiduciary" one within the meaning of section 523(a)(4) is a question of federal law. Ragsdale v. Haller, 780 F.2d 794, 795 (9th Cir.1986). The broad, general definition of "fiduciary" is inapplicable in the dischargeability context. Id. at 796. Instead, the fiduciary relationship must be one arising from an express or technical trust that was imposed before and without reference to the wrongdoing that caused the debt. Id. In other words, the debtor must have been a trustee before the alleged wrongdoing occurred. Here, BWA has failed to present sufficient facts or legal authority to indicate that any such fiduciary relationship existed between the Debtor and BWA.
For purposes of the nondischargeability statute, a claim based on embezzlement requires proof of:
(1) property rightfully in the possession of a nonowner; (2) nonowner's appropriation of the property to a use other than that which it was entrusted, and (3) circumstances indicating fraud.
Transam. Comm'l Fin. Corp. v. Littleton (In re Littleton), 942 F.2d 551, 555 (9th Cir.1991).
As to embezzlement, the Complaint asserts that the Debtor was rightfully in possession of the deposited funds because he was a principal of LLFC at the time that funds were deposited by BWA in furtherance of the business dealing embodied in the
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LOI. BWA has also asserted that the Debtor appropriated the funds deposited by BWA for a use other than that which it was entrusted – namely, to pay other debts or corporate expenses. However, as with its other claims, the Complaint fails to adequately describe circumstances indicating fraud. For these reasons, the Court is inclined to GRANT the Motion and dismiss the Complaint with leave to amend.
TENTATIVE RULING
Based on the foregoing, including the lack of clear notice as to which claims BWA is pursuing against the Debtor, the Court is inclined to GRANT the Motion. The Complaint shall be dismissed in its entirety with leave to amend, with any amended complaint to be filed within 30 days of entry of the order granting the Motion.
Separately, on a 12(b)(6) motion, the Court is called only to consider the plausibility of the Complaint, not the weight of the evidence. Such an analysis is inappropriate on a motion to dismiss. For this reason, the evidentiary objections to the declaration of John Geffen are overruled without prejudice. The Debtor may raise these objections again on a motion for summary judgment or at trial.
APPEARANCES REQUIRED.
Debtor(s):
William Mark Eddington Represented By Jenny L Doling
Defendant(s):
William Mark Eddington Represented By Summer M Shaw
Movant(s):
William Mark Eddington Represented By
2:00 PM
Summer M Shaw Summer M Shaw
Plaintiff(s):
BOSNIAN WAND AIRLINES Represented By
John T Van Geffen
Trustee(s):
Todd A. Frealy (TR) Pro Se
2:00 PM
Adv#: 6:17-01002 BOSNIAN WAND AIRLINES v. Eddington
From: 3/8/17, 3/22/17 Also #
EH
Docket 1
- NONE LISTED -
Debtor(s):
William Mark Eddington Represented By Jenny L Doling
Defendant(s):
William Mark Eddington Represented By Summer M Shaw
Plaintiff(s):
BOSNIAN WAND AIRLINES Represented By
John T Van Geffen
Trustee(s):
Todd A. Frealy (TR) Pro Se
2:00 PM
Adv#: 6:17-01019 Frealy v. Arnold et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
Kelly Arnold Represented By
Todd L Turoci
Defendant(s):
Kelly Arnold Pro Se
Larry Arnold Pro Se
Plaintiff(s):
Todd Frealy Represented By
Carmela Pagay
Trustee(s):
Todd A. Frealy (TR) Represented By Carmela Pagay
2:00 PM
Adv#: 6:16-01141 Simons v. G7 Investments, LLC et al
From: 9/7/16, 10/19/16, 2/8/17 EH
Docket 1
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Jean M. Annunziata Represented By Jason D Strabo
Annunziata Family Trust Represented By Jason D Strabo
G7 Investments, LLC Represented By Jason D Strabo
Gary M Annunziata Represented By Jason D Strabo
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By
2:00 PM
Trustee(s):
Sarah Cate Hays D Edward Hays
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
2:00 PM
Adv#: 6:16-01142 Simons v. Desert Gastroenterology Consultants, AMC et al
Complaint by Larry D Simons against Desert Gastroenterology Consultants, AMC. (Charge To Estate)$350.00. (Attachments: # 1 Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other)),(02 (Other (e.g. other actions that would have been brought in state court if unrelated to bankruptcy)))
From: 9/7/16, 10/19/16, 2/8/17 EH
Docket 21
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Desert Gastroenterology Represented By Jason D Strabo
Gary M. Annunziata Represented By Jason D Strabo
Desert Gastroenterology Represented By Jason D Strabo
Joint Debtor(s):
Tami Jo Springer Pro Se
2:00 PM
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
10:00 AM
MOVANT: WELLS FARGO BANK
EH
Docket 63
4/11/17
Service: Proper Opposition: Yes
Debtors request a continuance based on a pending application for a loan modification and assert a significant equity cushion. Based on the correspondence attached to the Debtors’ Opposition, Wells Fargo indicated that a decision could take up to 30 days (or up to April 21) regarding the Debtors’ requested loan modification. Based on the foregoing, the Court is inclined to GRANT the Debtors a short continuance.
APPEARANCES REQUIRED.
Debtor(s):
Douglas Lee Kendrick Represented By Matthew Donahue John F Brady
Joint Debtor(s):
Jennifer Lyn Kendrick Represented By Matthew Donahue John F Brady
10:00 AM
Movant(s):
WELLS FARGO BANK, NA Represented By Megan E Lees Milton Williams
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: ALL CITY REAL ESTATE INC
From: 3/28/17 EH
Docket 137
03/28/2017
Movant did not provide telephonic notice of the hearing to the Debtor. The Judge’s instructions on UD matters set on shortened time requires telephonic notice on all parties entitled to notice. LBR 4001(c) in turn requires that Relief from Stay Motions be served on the debtor and the debtor’s attorney.
The instant case was dismissed on October 20, 2016, arising from a Trustee Motion to Dismiss for delinquency. While the case was dismissed, a foreclosure sale was held and the Movant was the successful bidder at the sale. Movant subsequently served a Notice to Quit and filed a Complaint for Unlawful Detainer. On March 1, 2017, the Court entered an order vacating the dismissal. (Docket No. 134). At the hearing on the Motion to Vacate Dismissal, held on January 12, 2017, the Court was not apprised of the fact that the foreclosure sale had occurred or that an unlawful detainer proceeding had been commenced against the Debtor. Instead, relying on the Trustee’s withdrawal of their objection to the Motion to Vacate coupled with the Trustee’s indication that if the Debtor did not cure within 30 days the Trustee would seek reconversion to a chapter 7, the Court vacated the dismissal.
10:00 AM
Movant has provided authorities in support of its contention that the stay is not automatically reimposed by reinstatement of a dismissed case. Movant’s citation to In re Thomas is persuasive on this point. 194 B.R. 641 (Bankr. D Ariz. 1995). Absent contrary authority, the Court is inclined to GRANT the Motion in its entirety.
Debtor has not come forward with legal authority to counter the arguments made by Movant. However, as noted above, the Debtor was not provided the full notice required pursuant to this Court’s instructions for hearings on shortened notice. Based on the foregoing, the Court is inclined to CONTINUE the hearing on the Motion to April 11, 2017, at 10:00 a.m. for Movant to provide telephonic notice of the hearing to Debtor.
APPEARANCES REQUIRED.
Debtor(s):
Michael L Anderson Represented By Javier H Castillo
Movant(s):
All City Real Estate Inc. Represented By Julian K Bach
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: SETERUS INC
EH
Docket 75
04/11/17
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT as to ¶¶ 3 and 12 of the prayer for relief.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Harry Ervin Represented By
Matthew D Resnik
Joint Debtor(s):
Irma Lorena Ervin Represented By Matthew D Resnik
Movant(s):
Seterus, Inc. as the authorized Represented By
Kristin A Zilberstein
10:00 AM
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: PNC BANK NATIONAL ASSOCIATION
EH
Docket 79
04/11/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT as to ¶3 of the prayer for relief. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Terry Lee Ammons Represented By Steven J Diamond
Joint Debtor(s):
Maurita Atuel Ammons Represented By Steven J Diamond
Movant(s):
PNC Bank, National Association Represented By
Joely Khanh Linh Bui Daniel K Fujimoto
10:00 AM
Trustee(s):
Caren J Castle
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: BAYVIEW LOAN SERVICING LLC AS SERVICING AGENT FOR M&T BANK
From: 1/24/17 EH
Docket 162
Tentative Ruling:
Service is Proper Opposition: Yes
Given the amount of equity as well as the Trustee’s pending adversary related to the property, the Court is inclined to CONTINUE the hearing on the motion.
APPEARANCES REQUIRED.
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - INACTIVE - Steven L Bryson
Movant(s):
Bayview Loan Servicing, LLC as Represented By
Kristin A Zilberstein
10:00 AM
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
EH
Docket 56
04/11/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT as to ¶¶3 and 12 of the prayer for relief. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Rocio Castillo Represented By
James Geoffrey Beirne
Movant(s):
U.S. Bank National Association, as Represented By
Angie M Marth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BOSCO CREDIT, LLC
From: 3/7/17 EH
Docket 203
03/07/17
Service: Proper Opposition: Yes
Movant has established cause for relief from stay. Debtors have filed a response indicating that they intend to tender $1,000 of the arrears by the hearing and request a 6-month APO to cure the balance of the arrears.
APPEARANCES REQUIRED.
Debtor(s):
Jose N Recinos Represented By Michael Smith
Joint Debtor(s):
Patricia Recinos Represented By Michael Smith
Movant(s):
Bosco Credit, LLC, its successor Represented By
10:00 AM
Trustee(s):
Nichole Glowin
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
EH
Docket 103
04/11/17
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). Request under § 362(d)(2) is DENIED for failure by Movant to establish that the Property has no equity or that it is not necessary for reorganization. GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Frederick Arnett Mikel Represented By Todd L Turoci
Movant(s):
U.S. BANK NATIONAL Represented By April Harriott Sean C Ferry Matthew R. Clark
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 75
04/11/2017
Service: Proper Opposition: Yes
The Debtors request a continuance to permit the Movant to consider their application for a loan modification. The Court finds the Debtors' 15.6% estimate of equity cushion is insufficient under Mellor to adequately protect Movant, and Debtors have not esablished their loan modification is complete. The Court is inclined to GRANT relief from stay under section 362(d)(1).
APPEARANCES REQUIRED.
Debtor(s):
Jose L Rangel Represented By
Lisa H Robinson John F Brady
Joint Debtor(s):
Rosa M Rangel Represented By Lisa H Robinson John F Brady
10:00 AM
Movant(s):
WELLS FARGO BANK, NA Represented By Corey Phuse Carletta D Burney Megan E Lees John Chandler
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO
EH
Docket 56
04/11/17
Service: Proper Opposition: Yes
Debtors have indicated that they intend to cure by the hearing or request an APO. APPEARANCES REQUIRED.
Debtor(s):
Jesus Manuel Gomez Represented By Dana Travis
Joint Debtor(s):
Maria Gomez Represented By Dana Travis
Movant(s):
WELLS FARGO BANK, N. A. Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 38
04/11/2017
Service: Proper Opposition: Yes
Debtors assert they will cure post-petition arrears by the hearing or request an APO. APPEARANCES REQUIRED.
Debtor(s):
Gilbert Alfred Torrez Sr. Represented By
Rabin J Pournazarian
Joint Debtor(s):
Emily Torrez Represented By
Rabin J Pournazarian
Movant(s):
Wells Fargo Bank, N.A./Wells Fargo Represented By
Judith Trigg-Hart Erin Holliday Christopher Darden Angela M Fowler Megan E Lees
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 44
04/11/2017
Service: Proper Opposition: None
GRANT relief from the stay under §362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT as to ¶¶ 3 and 12. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Chris Alvarado Espinoza Represented By Gary S Saunders
Movant(s):
Nationstar Mortgage LLC Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: MCCRANN TRUST
EH
Docket 249
4/11/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) and (d)(4) based on multiple bankruptcy cases affecting the Property. GRANT waiver of 4001(a)(3) stay. GRANTED as to requested relief under ¶ 8, except that such order shall be effective only upon recording; and DENIED as to ¶¶ 10, 11 and 13 of the prayer for relief for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Jack C Pryor Represented By
Stephen R Wade
Movant(s):
McCrann Trust, Miller Trust, Olson Represented By
John A Boyd
Trustee(s):
Karl T Anderson (TR) Represented By
10:00 AM
Leonard M Shulman Melissa Davis Lowe
10:00 AM
From: 11/1/16, 12/13/16, 2/14/17 EH
Docket 19
- NONE LISTED -
Debtor(s):
Natasha M Kiehl Represented By Bill J Parks
Movant(s):
Natasha M Kiehl Represented By Bill J Parks
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 26
04/11/17
Service: Proper Opposition: Yes
Debtor asserts that Movant is adequately protected by the 8.5% estimate of adequate protection. The Court finds this equity cushion insufficient under Mellor. Further, Debtor has also provided evidence that a wire transfer of $3,435.06 has been made to Movant. However, this amount is less than the total amount owed in arrears.
APPEARANCES REQUIRED.
Debtor(s):
Tanyua A Gates-Holmes Represented By John F Brady
Movant(s):
Nationstar Mortgage LLC as Represented By
Kristin A Zilberstein
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
HOLDING DATE
MOVANT: NATASHA MARIE KIEHL AND PHILLIP NATHAN KIEHL
From: 11/1/16, 12/13/16, 2/14/17 Also #17
EH
Docket 21
- NONE LISTED -
Debtor(s):
Natasha Marie Kiehl Represented By Bill J Parks
Joint Debtor(s):
Phillip Nathan Kiehl Represented By Bill J Parks
Movant(s):
Phillip Nathan Kiehl Represented By Bill J Parks
Natasha Marie Kiehl Represented By Bill J Parks
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NICOLE TRACY C WANG
From: 11/1/16, 12/13/16, 2/14/17 Also #16
EH
Docket 17
8/30/16
Service is Improper Opposition: Due at the hearing.
Service is improper because Movant did not serve the Debtors, in addition to Debtors’ counsel, with the Notice and Motion as required by LBR 4001-1(c). Additionally, Movant has not provided any evidence that she provided telephonic notice of the hearing to all parties entitled to receive notice, as set forth in the Judge’s self calendar instructions.
The Court also notes that Movant sets forth a basis for relief under § 362(d)(1) on page 3 of the Motion, but failed to request such relief on page 5 of the Motion. Thus, unless an amended motion is filed and served addressing such discrepancy, the Court would be inclined to deny any relief sought under § 362(d)(1).
Finally, it appears the underlying foreclosure sale may be void as occurring during the prior case filed by Natasha Kiehl.
APPEARANCES REQUIRED.
10:00 AM
Debtor(s):
Natasha Marie Kiehl Represented By Bill J Parks
Joint Debtor(s):
Phillip Nathan Kiehl Represented By Bill J Parks
Movant(s):
Nicole Wang Represented By
Chi L Ip Gerald N Sims
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FIRST INVESTORS FINANCIAL SERVICES
EH
Docket 21
04/11/2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Ana I Murguia Owens Represented By Brian J Soo-Hoo
Movant(s):
First Investors Financial Services Represented By
Sheryl K Ith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 15
- NONE LISTED -
Debtor(s):
DORIS A HARRIS Represented By Mark D Edelbrock
Movant(s):
Nationstar Mortgage LLC Represented By
Kristin A Zilberstein
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: CHRISTINANATRUST
EH
Docket 12
4/11/17
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. GRANT as to ¶7b.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
John D. Smith Represented By Todd L Turoci
Joint Debtor(s):
Jennifer R. Smith Represented By Todd L Turoci
Movant(s):
Christiana Trust, a division of Represented By
Erin M McCartney
10:00 AM
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
MOVANT: XCEED FINANCIAL CREDIT UNION
From: 3/28/17 EH
Docket 22
3/28/17
Service is Proper Opposition: Yes
Debtor asserts that he is treating the Movant’s claim in full through his chapter 13 plan. The Plan was confirmed on March 23, 2017, although the order confirming plan has not yet been entered. Here, the plan does not provide for pre-confirmation adequate protection, and there is no evidence Debtor is not making plan payments.
APPEARANCES REQUIRED.
Debtor(s):
James W Schwartz Represented By Michael Smith
Joint Debtor(s):
Holly L Bryson Represented By Michael Smith
Movant(s):
Xceed Financial Credit Union Represented By
10:00 AM
Trustee(s):
Karel G Rocha
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HYUNDAI LEASE TITLING TRUST
EH
Docket 8
04/11/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Elizabeth Hernandez Represented By Luis G Torres
Movant(s):
Hyundai Lease Titling Trust Represented By Austin P Nagel
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: TD AUTO FINANCE LLC
EH
Docket 12
04/11/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Eric D Humildad Pro Se
Joint Debtor(s):
Jennifer R Humildad Pro Se
Movant(s):
TD Auto Finance LLC Represented By Sheryl K Ith
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: DIANNE SIMMONS
EH
Docket 12
04/11/2017
Notice was proper and no opposition has been filed.
The comments of the Chapter 13 Trustee at the Debtor’s confirmation hearing in the prior case appear to corroborate the Debtor’s assertion that the prior dismissal was due to failures of prior counsel to correct errors in the filings. The Debtor, having obtained new counsel, the Court finds that the instant filing is in good faith. The stay shall be continued as to all creditors.
APPEARANCES REQUIRED.
Debtor(s):
Dianne F. Simmons Represented By Michael Smith
Movant(s):
Dianne F. Simmons Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
From: 2/28/17 EH
Docket 6
- NONE LISTED -
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
2:00 PM
MOVANT: PACIFIC DESIGN CENTER
EH
Docket 47
- NONE LISTED -
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
Movant(s):
Pacific Design Center I, LLC Represented By Carol G Unruh
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G. Brown in Contempt; (2) Establishing Briefing Schedule; and (3) Setting Hearing re damages
From: 3/22/17, 3/29/17 EH
Docket 213
- NONE LISTED -
Debtor(s):
Matthew Graham Mighell Represented By Daniel G Brown
Richard A Brownstein Christopher Hewitt
Joint Debtor(s):
Diana Marie Mighell Represented By Daniel G Brown
Richard A Brownstein Christopher Hewitt
Trustee(s):
Helen R. Frazer (TR) Pro Se
11:00 AM
Adv#: 6:16-01265 Whitmore (TR) v. Davol, Inc. et al
(Holding date)
From: 1/4/17, 2/1/17, 3/1/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jesus M. Tapia Represented By Michael Smith
Defendant(s):
C.R. Bard, Inc. Represented By Christopher O Rivas
Bard Devices, Inc. Represented By Christopher O Rivas
Davol, Inc. Represented By
Christopher O Rivas
Plaintiff(s):
Robert Whitmore (TR) Represented By Troy A Brenes
Trustee(s):
Robert Whitmore (TR) Represented By
11:00 AM
Douglas A Plazak Troy A Brenes
11:00 AM
ALSO #4
EH
Docket 78
BACKGROUND
On April 28, 2015, Home Security Stores, Inc. ("Debtor") filed a Chapter 7 voluntary petition. On May 28, 2015, the Court authorized the employment of Goe & Forsythe, LLP as general counsel to Trustee. On July 2, 2015, the Court authorized the employment of Hahn Fife & Co. LLP as accountants to Trustee.
At the initial meeting of creditors, Debtor’s principals appeared on behalf of Debtor, along with Debtor’s former counsel, Harry Histen ("Histen"). During the hearing, Histen admitted that he probably had possession of corporate records of Debtor.
Trustee has repeatedly requested those documents and Histen has failed to respond. On January 26, 2016, the Court granted Trustee’s motion for a 2004 examination of Histen. Afterwards, Histen was served with a subpoena requiring the production of documents and his attendance at an oral examination. The subpoena was ignored. The Trustee believes that Histen has recorded information related to the Debtor’s assets and financial affairs. Trustee’s requests "an order compelling Histen to turn over all recorded information regarding the Debtor’s property, operations, and financial affairs pursuant to 11 U.S.C. § 542(e)."
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DISCUSSION
11 U.S.C. § 542(e) states:
Subject to any applicable privilege, after notice and a hearing, the court may order an attorney, accountant, or other person that holds recorded information, including books, documents, records, and papers, relating to the debtor’s property or financial affairs, to turn over or disclose such recorded information to the trustee.
"[T]he bankruptcy court may order turnover of the information when the information is necessary to the administration of the estate." Matter of Matassini, 90 B.R. 508, 509 (Bankr. M.D. Fla. 1988). Here, Trustee has indicated that the information is relevant to Trustee’s investigation of undisclosed assets, establishing cause for granting the motion. Moreover, the Court deems Histen’s failure to oppose as consent to the requested relief, pursuant to Local Rule 9013-1(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion.
APPEARANCES REQUIRED. Movant to address deadline for turnover.
Debtor(s):
Home Security Stores, Inc. Represented By
11:00 AM
Movant(s):
Winfield S Payne III
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
Trustee(s):
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
11:00 AM
ALSO #3
EH
Docket 80
BACKGROUND
On April 28, 2015, Home Security Stores, Inc. ("Debtor") filed a Chapter 7 voluntary petition. On May 28, 2015, the Court authorized the employment of Goe & Forsythe, LLP as general counsel to Trustee. On July 2, 2015, the Court authorized the employment of Hahn Fife & Co. LLP as accountants for Trustee. On July 17, 2015, the Court authorized the employment of Credit Management Association as auctioneer for Trustee.
At the initial meeting of creditors, the Trustee learned that Debtor’s two shareholders, Ralph and Stacy Winn (the "Winns"), had physically removed Debtor’s servers and some computers, on which Debtor’s financials were recorded. Trustee asserts that Debtor engaged in transfers to insiders after the cessation of its operations. After recovering the servers, Trustee learned that the information had been removed.
Debtor’s physical paper records are not useful. Trustee has requested corporate records from Debtor, and Debtor’s various attorneys, but has received very few documents. Trustee obtained an order authorizing a 2004 examination of Debtor’s non-bankruptcy attorney, Harry Histen ("Histen"). Histen failed to respond to the subpoena. Trustee states that the records he currently possesses do not provide
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sufficient information to enable him to properly analyze Debtor’s financials.
DISCUSSION
11 U.S.C. § 546 requires that an avoidance action be brought within two years of the entry of the order for relief. That deadline, however, can be extended. See, e.g., In re United Ins. Mgmt., Inc., 14 F.3d 1380, 1384 (9th Cir. 1994). The current deadline in this case is April 28, 2017, which Trustee seeks to extend for six months to and including October 28, 2017.
Fed. R. Bankr. P. Rule 9006(b) states:
Except as provided in paragraphs (2) and (3) of this subdivision, when an act is required or allowed to be done at or within a specified period by these rules or by a notice given thereunder or by order of court, the court for cause shown may at any time in its discretion (1) with or without motion or notice order the period enlarged if the request therefor is made before the expiration of the period originally prescribed or as extended by a previous order or (2) on motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect.
The Court adopts a "for cause" standard when determining whether to utilized Fed. R. Bankr. P. Rule 9006(b) to extend a deadline. See In re Fundamental Long Term Care, Inc., 501 B.R. 784, 789 (Bankr. M.D. Fla. 2013). In this case, Trustee’s motion indicates that Histen and Debtor have been uncooperative with, and possibly obstructive of, Trustee’s attempt to investigate Debtor’s financial affairs. Moreover, the Court deems lack of opposition as consent to the relief requested pursuant to Local Rule 9013-(1)(h).
11:00 AM
TENTATIVE RULING
For the foregoing reasons, the Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Home Security Stores, Inc. Represented By Winfield S Payne III
Movant(s):
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
Trustee(s):
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
11:00 AM
EH
Docket 53
4/12/17
Background:
On October 21, 2015, Kai Wu filed a Chapter 7 voluntary petition. On February 26, 2016, the County of San Bernardino filed a secured claim in the amount of $4,664.60 ("Claim #1). On March 6, 2017, Trustee filed a motion to allow Claim #1 as fully secured, not entitled to a dividend.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000).
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Analysis:
Pursuant to § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Here the proof of claim does not indicate the value of the underlying collateral, so as to establish whether the claim is fully secured, and upon objection the burden shifts to the claimant. Moreover, the claimant has failed to oppose, which the Court deems consent to the requested relief pursuant to Local Rule 9013-(1)(h).
Tentative Ruling
The Court is inclined to SUSTAIN the objection in its entirety.
APPEARNACES WAIVED. Movant to lodge within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Kai Lin Wu Represented By
Paul Y Lee
Movant(s):
John P Pringle (TR) Represented By Wesley H Avery
Trustee(s):
John P Pringle (TR) Represented By Wesley H Avery
11:00 AM
From: 3/29/17 EH
Docket 24
BACKGROUND
On October 3, 2016, Victor Salinas ("Petitioning Creditor") filed an involuntary Chapter 7 petition against Roderick Clignett ("Debtor"). On November 2, 2016, Debtor filed a motion to dismiss. On November 23, 2016, Petitioning Creditor filed his opposition and, five days later, attempted to amend the petition by filing an addendum. At a hearing on December 7, 2016, the Court continued the matter for further briefing.
After further briefing, the Court dismissed the involuntary petition and retained jurisdiction to adjudicate a motion for fees and costs pursuant to 11 U.S.C. § 303(i). Debtor filed his § 303(i) motion on March 2, 2017. On March 24, 2017, Petitioning Creditor filed a motion to continue the hearing for thirty days. In support of his motion, he stated that he had fired his previous attorney, Stephen Wade, and had not received notice of the motion until March 17, 2017. On March 27, 2017, the Court continued the hearing for two weeks, to April 12, 2017. Petitioning Creditor filed his opposition on April 5, 2017. On April 10, 2017, Debtor filed a reply and evidentiary objections.
11:00 AM
DISCUSSION
Legal Standard
11 U.S.C. § 303(i) states:
If the court dismissed a petition under this section other than on consent of all petitioners and the debtor, and if the debtor does not waive the right to judgment under this subsection, the court may grant judgment –
against the petitioners and in favor of the debtor for –
costs; or
a reasonable attorney’s fee; or
against any petitioner that filed the petition in bad faith, for –
any damages proximately caused by such filing; or
punitive damages
The Ninth Circuit has determined that a totality of the circumstances test applies when confronted with a motion for damages pursuant to § 303(i):
Although the totality of the circumstances test can be somewhat amorphous, the bankruptcy court, where relevant, should consider the following factors before awarding attorney’s fees and costs under § 303(i): (1) the merits of the involuntary petition, (2) the role of any improper conduct on the part of the alleged debtor, (3) the reasonableness of the actions taken by the petitioning creditors, and (4) the motivation and objectives behind filing the petition.
Higgins v. Vortex Fishing Sys., Inc., 379 F.3d 701, 707 (9th Cir. 2004) (quotations omitted) (stating also that "[a]lthough definitive in most cases, this list is not exhaustive, and a bankruptcy court may, in its discretion, choose to consider other material factors it deems relevant."). It is "the petitioning creditors’ burden to establish, under the totality of the circumstances, that factors exist which overcome the presumption that Debtor should receive fees and costs." In re C & C Jewelry Mfg., Inc., 373 Fed. Appx. 775 (9th Cir. 2010); see also Sofris v. Maple-Whitworth, Inc., 556
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F.3d 642 (9th Cir. 2009) (upon dismissal of involuntary petition, presumption arises in favor of debtor for fees and costs; burden is on petitioning creditor(s) to rebut based on totality of the circumstances); In re Medpoint Mgmt., LLC, 2016 WL 3251581 at * 6 (B.A.P. 9th Cir. 2016) ("The Higgins court held that its adoption of the totality of circumstances test did not abrogate the presumption that, upon dismissal, the petitioning creditors should be held liable for the fees the alleged debtor incurred in defending against the involuntary petition."); In re Macke Int’l Trade, Inc., 370 B.R. 236, 249 (B.A.P. 9th Cir. 2007) ("[A]lthough the Code has liberalized standards for instituting involuntary cases, because of the potential adverse impact on the debtor and the need to encourage discretion in filing such cases, unsuccessful involuntary petitioners should routinely expect to pay the debtor’s legal expenses arising from the involuntary filing.").
Compensatory Damages
As described above, there is a presumption that Petitioning Creditor is liable for compensatory damages. Petitioning Creditor is entitled to an opportunity to rebut the presumption, and has filed an opposition. Therefore, the Court will apply the totality of circumstances test delineated in Higgins.
Regarding the merits of the involuntary petition, Petitioning Creditor essentially alleges that the petition was dismissed because of a technical mistake – but that the petition itself had merit. The Court notes that its decision discussed an alternative, albeit premature basis for dismissal, 11 U.S.C. § 303(b) and Fed. R. Bankr. P. Rule 1003(b), that may have produced additional litigation had the technical mistake not occurred. See In re Clignett, 2017 WL 548975 at *3-4 (Bankr. C.D. Cal. 2017).
Nevertheless, because the petition was dismissed at an early stage, the Court is unable to ascertain whether the involuntary petition was meritorious, and this factor does not clearly weigh in favor of either party.
Regarding the second factor, improper conduct on the part of the alleged debtor, Petitioning Creditor states that a state court judgment was entered against Debtor for fraud.1 Petitioning Creditor also indicates that there may have been an attempt to hide assets by Debtor, although the extent of that attempt and its result are not elaborated. The bad faith at issue, however, was the subject of the state court action, which the Court views as sufficiently attenuated from the involuntary petition, and, therefore, this factor weighs in favor of an award of fees.
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Regarding the third and fourth factors, the reasonableness of the actions taken by petitioning creditor, and the motives and objectives behind filing the petition, Petitioning Creditor states that Debtor had failed to make payments toward the judgment for an extended period of time. This does not support a finding of reasonableness. "Filing an involuntary petition should be a measure of last resort." Higgins, 379 F.3d 701, 707. Here, at the time of the filing of the involuntary petition, the parties were engaged in state court proceedings, and had a scheduled settlement conference in the near future. Filing an involuntary petition in the midst of state court litigation concerning the debt is objectively unreasonable. Furthermore, the fact that the involuntary petition was filed by Petitioning Creditor, while the state court litigation was being maintained by his father-in-law, casts doubt on the objectives and motives of the filing.2
Involuntary petitions are not an appropriate mechanism to resolve two-party disputes that are the subject of pending state court litigation. Here, Petitioning Creditor filed a technically flawed involuntary petition shortly before settlement discussions were to commence. Additionally, the fact that Petitioning Creditor, instead of the state court plaintiff, his father-in-law, filed the involuntary petition, may have been a tactic to avoid a realization by the bankruptcy court that his father-in-law failed to schedule the judgment during his own bankruptcy. All of these issues are problematic. While there is some evidence of improper conduct by Debtor, the totality of the circumstances weighs in favor of awarding fees.
Debtor has requested $49,531.91 in attorney’s fees. Of those fees, $7,455 are attributable to work done by Dilip Vithlani ("Vithlani"), Debtor’s counsel for state court proceedings involving the claim which led to the filing of the involuntary bankruptcy petition. While the standards for determining attorney’s fees under § 303
are not clearly delineated, within the Ninth Circuit, one court has stated the following:
Unlike fee awards under 11 U.S.C. § 330, the statute, rules, and case law interpreting § 303 have not delineated clear standards for finding whether a particular fee is justified. At a minimum, however, compensation should be
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reasonable. Any award should also be based on detailed accounts of services rendered. Although the type of fee application used for § 330 awards is not
requisite, the records submitted in a § 303(i) setting should clearly identify the nature of work performed, its relevance to the defense to the involuntary petition, and the time expended.
In re Wavelength, Inc., 61 B.R. 614, 621 (B.A.P. 9th Cir. 1986). Of particular significance in the above quote is the requirement that the work be relevant to a defense to the involuntary petition. Petitioning Creditor appears to argue that the work must be related to the motion to dismiss, defense of an involuntary petition can include matter outside the motion to dismiss. The majority of the fees relating to services provided by Vithlani, however, are not relevant to the defense to the involuntary petition. Therefore, only the following entries of Vithlani will be allowed:
10/17/16 T/c (x3) with Client and R Aronoson to discuss strategy on the petition ($280)
10/28/16 T/c with R Aronson to go over factual background and provide documentary support for motion to dismiss ($385)
11/1/16 Review motion to dismiss for facts; provide edits and comments; revise declaration and fax signature to R Aronson ($315)
12/27/16 Review 303(i) motion; revise declaration and prepare billing records related to the petition ($385)
2/10.2017 Review section 303(i) motion and declaration; revise billing statement and present it to bankruptcy counsel ($175)
Therefore, with respect to Vithlani’s fees, the Court will award a reduced amount of
$1,540.
Debtor requests an additional $42,071.91 related to work done by Robert Aronson ("Aronson"), $1875 of which constitute anticipatory fees for work done between March 3 and March 22. According to Aronson’s declaration, his invoices submitted total $40,201.91. There appears to be a substantial arithmetical error. The invoices
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submitted, which cover the entirety of the relevant dates, total $22,646.47. While Petitioning Creditor generally challenges the requested fees as excessive and unreasonable, Petitioning Creditor declines to present specific examples or evidence. The Court has reviewed time entries and finds them to be reasonable and properly documented. Therefore, the Court will award attorney’s fees in favor of Debtor and against Petitioning Creditor in the reduced amount of $24,521.47.
Punitive Damages
Debtor finally requests $7,500 in punitive damages. A prerequisite to an award of punitive damages under § 303(i) is a bad faith finding by the Court. "The Bankruptcy Court does not define ‘bad faith’ for purposes of awarding punitive damages under
§ 303(i)." In re Wavelength, Inc., 61 B.R. 614, 619 (B.A.P. 9th Cir. 1986). Bad faith is recognized when a petition is "ill advised or motivated by spite, malice or a desire to embarrass the debtor." Id. Here, Petitioning Creditor filed an inaccurate voluntary petition based on a claim that his father in law was pursing in state court. As was the case in Wavelength, the filing of a deficient Chapter 11 involuntary petition, coupled with the existence of a state court proceeding is an indication of possible bad faith.
The timing of the involuntary petition, shortly before a mandatory settlement conference was to occur, supports the inference that Petitioning Creditor intended to use the legally deficient involuntary petition as negotiating leverage. The actions of Petitioning Creditor were, at the very least, ill-advised. Nonetheless, the Court does not find the actions at issue rise to the level that support a punitive damage award.
Payment of Fees as Condition
Debtor requests that the Court order that the payment of the assessed fees be a condition "to any re-filing of an involuntary petition." The Court declines to impose such a condition. First of all, Debtor has not briefed the propriety of such a sanction. Additionally, the Court notes that the conduct of Petitioning Creditor does not appear to rise to the vexation that has caused other courts to impose similar requirements under § 105(a). See, e.g., In re Magers, 2003 WL 103400 at *3 (N.D. Cal. 2003). The Court notes that the failure to pay the assessed fees and damages may lead to further
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sanctions, for which additional fees may be assessed.
TENTATIVE RULING
The Court is inclined to GRANT the motion and award to Debtor, and against Petitioning Creditor, the reduced amount of $26,061.47, payable within thirty days of the entry of this order.
APPEARANCES REQUIRED.
Debtor(s):
Roderick E Clignett Represented By Robert M Aronson
Movant(s):
Roderick E Clignett Represented By Robert M Aronson Robert M Aronson Robert M Aronson
2:00 PM
Adv#: 6:13-01233 Continental East Fund IV, LLC v. Wakefield et al
From: 9/18/13. 2/12/14, 4/23/14, 8/20/14, 10/1/14, 10/22/14, 1/14/15, 2/18/15, 6/17/15, 8/26/15, 9/2/15, 11/18/15, 5/18/16, 5/25/16, 7/27/16, 1/11/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
David Wayne Wakefield Represented By Jordan Nils Bursch
Robert E Huttenhoff
Defendant(s):
Elise Wakefield Represented By
Robert E Huttenhoff
David Wakefield Represented By
Robert E Huttenhoff
Joint Debtor(s):
Elise Wakefield Represented By Jordan Nils Bursch
Robert E Huttenhoff
Plaintiff(s):
Continental East Fund IV, LLC Represented By
2:00 PM
Trustee(s):
Kyra E Andrassy William A Floratos
Howard B Grobstein (TR) Represented By Alan W Forsley
2:00 PM
Adv#: 6:16-01199 Revere Financial Corporation v. Bank of Southern California, N.A.
From: 10/19/16, 11/9/16, 11/30/16
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Bank of Southern California, N.A. Represented By
Kathryn M.S. Catherwood
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01140 Simons v. Lindgren
EH
Docket 14
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Charles Lindgren Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Movant(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By
2:00 PM
Richard A Marshack Sarah Cate Hays
D Edward Hays
2:00 PM
Adv#: 6:16-01140 Simons v. Lindgren
From: 9/7/16, 12/7/16, 3/1/17 ALSO # 9
EH
Docket 1
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Charles Lindgren Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By
2:00 PM
Richard A Marshack Sarah Cate Hays
D Edward Hays
2:00 PM
Adv#: 6:15-01270 Maradiaga, Sr et al v. Zumwalt
From: 12/2/15, 3/30/16, 4/6/16, 7/27/16, 11/30/16, 12/7/16
EH
Docket 1
- NONE LISTED -
Debtor(s):
Audrey Zumwalt Represented By Javier H Castillo
Defendant(s):
Audrey Zumwalt Represented By Javier H Castillo Mario Alvarado
Plaintiff(s):
Kathleen Maradiaga Represented By Mario Alvarado
Julio Maradiaga Sr Represented By Mario Alvarado
Trustee(s):
Robert Whitmore (TR) Pro Se
2:00 PM
2:00 PM
Adv#: 6:16-01176 Simons v. Navarro
From: 9/7/16, 11/9/16, 1/11/17, 3/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jose Antonio Hernandez Represented By
Jessica De Anda Leon
Defendant(s):
Carolina Villalobos Navarro Represented By Christopher J Langley
Plaintiff(s):
Larry D Simons Represented By Frank X Ruggier
Trustee(s):
Larry D Simons (TR) Represented By Frank X Ruggier
2:00 PM
Adv#: 6:16-01292 Burgess v. United States Department of Education
From: 2/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
JIM GREGORY BURGESS Pro Se
Defendant(s):
United States Department of Represented By Elan S Levey
Plaintiff(s):
Jim Gregory Burgess Pro Se
Trustee(s):
Todd A. Frealy (TR) Pro Se
2:00 PM
Adv#: 6:17-01025 Pringle v. Surace
EH
Docket 1
- NONE LISTED -
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Plaintiff(s):
John P. Pringle Represented By Todd A Frealy Carmela Pagay
Trustee(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:09-01235 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
DOES 1 through 100, inclusive Pro Se
Empire Partners, Inc., a California Represented By
David Loughnot Jonathan A Loeb Jeffrey Rosenfeld
2:00 PM
Plaintiff(s):
RICHARD K. DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
2:00 PM
Adv#: 6:10-01319 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
01/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Paul Roman Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
O'Melveny & Myers, LLP Represented By Howard Steinberg
2:00 PM
P Sabin Willett
Peter T. Healy Represented By Howard Steinberg P Sabin Willett
Neil M Miller Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Larry Day Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Peter M Bransten John P Reitman Michael I Gottfried
Aleksandra Zimonjic Monica Rieder Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By
2:00 PM
Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
2:00 PM
Adv#: 6:10-01329 DIAMOND v. Empire Partners, Inc., a California Corporation et
(Defendant - Empire Partners, Inc) HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Previti Realty Fund, L.P. Represented By Jonathan A Loeb Jeffrey Rosenfeld
The James Previti Family Trust Represented By Jonathan A Loeb Jeffrey Rosenfeld
2:00 PM
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
10:00 AM
MOVANT: WELLS FARGO BANK
From: 4/11/17 EH
Docket 63
4/11/17
Service: Proper Opposition: Yes
Debtors request a continuance based on a pending application for a loan modification and assert a significant equity cushion. Based on the correspondence attached to the Debtors’ Opposition, Wells Fargo indicated that a decision could take up to 30 days (or up to April 21) regarding the Debtors’ requested loan modification. Based on the foregoing, the Court is inclined to GRANT the Debtors a short continuance.
APPEARANCES REQUIRED.
Debtor(s):
Douglas Lee Kendrick Represented By Matthew Donahue John F Brady
Joint Debtor(s):
Jennifer Lyn Kendrick Represented By Matthew Donahue John F Brady
10:00 AM
Movant(s):
WELLS FARGO BANK, NA Represented By Megan E Lees Milton Williams
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 71
Tentative Ruling:
Service is Proper Opposition: Yes
While it appears to the Court that Debtors may have missed several mortgage payments over the past few years, the evidence provided by Wells Fargo is inadequate to establish cause for relief. Wells Fargo’s Exhibit 5 includes unexplained "co- mingled funds adjustments", totaling more than $20,000, and appears to document that Debtors have made their mortgage payments for at least eight months, in apparent contradiction of the motion’s account of their post-confirmation delinquency. There is also a general incoherency in the organization of Exhibit 5’s columns. As one example, payments made by Debtors for February and March 2016 appear on page 3, and are "applied" to payments due on June 2015, despite a payment being made in June 2015, documented on page 2, at a time when Debtors had a positive suspense balance. Wells Fargo’s non-chronological organization of payment history is, at best, unclear.
APPEARANCES REQUIRED.
Debtor(s):
David Sandoval Represented By
10:00 AM
Bryant C MacDonald
Joint Debtor(s):
Mary Celine Sandoval Represented By
Bryant C MacDonald
Movant(s):
Wells Fargo Bank, N.A. Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 103
Tentative Ruling:
Service is Proper Opposition: Yes
Although relief from stay appears warranted, parties to address status of adequate protection discussions.
APPEARANCES REQUIRED.
Debtor(s):
Luis Antonio Palomino Represented By David Lozano
Joint Debtor(s):
Mariella Roxana Palomino Represented By David Lozano
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION AS TRUSTEE IN TRUST FOR REGISTERED HOLDERS OF CHASE FUNDING MORTGAGE LOAN
EH
Docket 58
- NONE LISTED -
Debtor(s):
Jennifer L. Kurtz Represented By Steven A Alpert
Movant(s):
U.S. Bank National Association, as Represented By
Daniel K Fujimoto Caren J Castle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BAYVIEW LOAN SERVICING LLC AS SERVICING AGENT FOR M&T BANK
From: 1/24/17, 4/11/17 EH
Docket 162
Tentative Ruling:
Service is Proper Opposition: Yes
Given the amount of equity as well as the Trustee’s pending adversary related to the property, the Court is inclined to CONTINUE the hearing on the motion.
APPEARANCES REQUIRED.
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - INACTIVE - Steven L Bryson
Movant(s):
Bayview Loan Servicing, LLC as Represented By
Kristin A Zilberstein
10:00 AM
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander
10:00 AM
MOVANT: ALLY BANK
EH
Docket 70
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY relief from the automatic stay pursuant to § 362(d)(2) for lack of cause shown.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
J. T. Site Development, Inc. Represented By Andrew S Bisom
Movant(s):
Ally Bank Represented By
Adam N Barasch
10:00 AM
Trustee(s):
Larry D Simons (TR) Represented By Frank X Ruggier
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 2/28/17, 3/28/17 EH
Docket 64
- NONE LISTED -
Debtor(s):
William R Parker Represented By Julie J Villalobos
Joint Debtor(s):
Cheryl Parker Represented By Julie J Villalobos
Movant(s):
Wells Fargo Bank, N.A. Represented By Nancy L Lee Sabekhon Nahar Jason C Kolbe William P Barrett
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 62
- NONE LISTED -
Debtor(s):
Eddie Hernandez Represented By Andy C Warshaw
Movant(s):
Nationstar Mortgage LLC Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: PNC BANK, NATIONAL ASSOCIATION
From: 2/28/17, 3/7/17, 3/28/17 EH
Docket 49
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT relief from § 1301(a) stay. GRANT waiver of 4001(a)(3) stay. GRANT requests under
¶¶ 2, 3 and 12.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Shahla Salamat Represented By Amid Bahadori
Movant(s):
PNC Bank, National Association, its Represented By
Kristin A Zilberstein Jennifer C Wong
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: THE BANK OF NEW YORK MELLON fka THE BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF THE CWABS
EH
Docket 47
- NONE LISTED -
Debtor(s):
Efren Rubio Represented By
Inez Tinoco-Vaca
Movant(s):
The Bank of New York Mellon fka Represented By
Erin M McCartney
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
EH
Docket 46
Tentative Ruling:
Service is Proper Opposition: Yes
While relief from stay appears warranted, parties to discuss adequate protection if amounts in default are not fully cured by hearing.
APPEARANCES REQUIRED.
Debtor(s):
Antoine Williams Represented By Gary Leibowitz
Movant(s):
U.S. Bank National Association, as Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FCI LENDER SERVICES INC
EH
Docket 60
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Michael Stephen Williams Represented By Michael R Lewis
Movant(s):
FCI Lender Services, Inc., servicing Represented By
Edward G Schloss
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
10:00 AM
Carmela Pagay
10:00 AM
MOVANT: PLANET HOME LENDING LLC ITS SUCCESSORS AND ASSIGNS
EH
Docket 24
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT relief from § 1301(a) co-debtor stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Hector Manuel Chavez Jr. Represented By Matthew D Resnik
Movant(s):
Planet Home Lending, LLC Represented By Michelle R Ghidotti
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
10:00 AM
MOVANT: ALLY FINANCIAL INC
EH
Docket 25
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT relief from § 1301(a) co-debtor stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Movant(s):
Ally Financial Inc. Represented By Adam N Barasch
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
EH
Docket 9
TENTATIVE RULING:
The extent of the relief requested by Movant is unclear. Outside of a motion for a protective order, which was scheduled to be heard in state court last week, there are only general references to the conclusion of the dissolution proceeding as well as "miscellaneous issues". Furthermore, there are technical issues with the motion: (1) Debtor was not properly served; (2) the motion requests retroactive annulment of the stay but provides no cause or declaration; and (3) the request for relief does not even request relief from the automatic stay. Finally, the Court agrees with the Trustee that issues regarding adjudication of property of the estate appropriately belong within the Bankruptcy Court. Given the technical issues and the fact that the motion is unclear what Movant is requesting, the Court is inclined to DENY the motion without prejudice.
APPEARANCES REQUIRED.
Debtor(s):
John Scott Reynolds Represented By Jenny L Doling
10:00 AM
Movant(s):
Julie Ann Reynolds Represented By Paul M Stoddard
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: XCEED FINANCIAL CREDIT UNION
From: 3/28/17, 4/11/17 EH
Docket 22
3/28/17
Service is Proper Opposition: Yes
Debtor asserts that he is treating the Movant’s claim in full through his chapter 13 plan. The Plan was confirmed on March 23, 2017, although the order confirming plan has not yet been entered. Here, the plan does not provide for pre-confirmation adequate protection, and there is no evidence Debtor is not making plan payments.
APPEARANCES REQUIRED.
Debtor(s):
James W Schwartz Represented By Michael Smith
Joint Debtor(s):
Holly L Bryson Represented By Michael Smith
Movant(s):
Xceed Financial Credit Union Represented By
10:00 AM
Trustee(s):
Karel G Rocha
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK
EH
Docket 12
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (4), based on unauthorized transfers and multiple cases affecting the property. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 10.
APPEARANCES REQUIRED.
Debtor(s):
Kayla Marie Rojas Represented By Kris Crawford
Movant(s):
Deutsche Bank National Trust Represented By Daniel K Fujimoto Caren J Castle
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
10:00 AM
MOVANT: VEROS CREDIT LLC
EH
Docket 10
Tentative Ruling:
Service is Proper in the Circumstances Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Berenice Hernandez Cabrera Represented By
D Justin Harelik
Movant(s):
Veros Credit, LLC Represented By Robert M Tennant
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: NISSAN MOTOR ACCEPTANCE CORPORATION
EH
Docket 16
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Brian Scott Bunnell Represented By Todd L Turoci
Joint Debtor(s):
Wendi Lynn Bunnell Represented By Todd L Turoci
10:00 AM
Movant(s):
NISSAN MOTOR ACCEPTANCE Represented By
Michael D Vanlochem
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: MARTHA E GUERRERO AND EDUARDO E GUERRERO
EH
Docket 11
- NONE LISTED -
Debtor(s):
AMANDO MORALES Represented By William D Gurney
Joint Debtor(s):
ALICIA MALDONADO JIMENEZ Represented By
William D Gurney
Movant(s):
Eduardo E. Guerrero Represented By Christopher J Langley
Trustee(s):
Charles W Daff (TR) Represented By Brandon J Iskander
10:00 AM
MOVANT: AMERICREDIT FINANCIAL SERVICES, INC dba GM FINANCIAL
EH
Docket 15
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Micah Paul Graham Represented By Nicholas M Wajda
Joint Debtor(s):
Christina Aida Graham Represented By Nicholas M Wajda
10:00 AM
Movant(s):
AmeriCredit Financial Services, Inc. Represented By
Mandy D Youngblood Sheryl K Ith
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 9
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (4), based on unauthorized transfers and multiple filings affecting the property. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 5. DENY alternative request under ¶ 14 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Christopher Wilkins Pro Se
Movant(s):
Wells Fargo Bank, N.A. as Trustee Represented By
Erin M McCartney
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: HUFSDAR INVESTORS LLC
EH
Docket 8
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. GRANT in rem requests under
¶¶ 9 and 11 based on Debtor’s failure to file schedules and that Debtor only listed one creditor. DENY requests under ¶¶ 3, 4, 7, and 10 for lack of cause shown. DENY alternative request under ¶ 12 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Kyung Sang Lee Pro Se
Movant(s):
Robert H Tyler Represented By Robert H Tyler
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: STATEWIDE PROPERTY SERVICES, INC. KEN NEWBURY
EH
Docket 7
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES REQUIRED.
Debtor(s):
Tyra Bagby Pro Se
Movant(s):
Statewide Property Services, Inc. Represented By
Barry L O'Connor
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BILLY HERNANDEZ
EH
Docket 17
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 4. DENY requests under
¶¶ 3 and 8 for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Raquel Renee Villa Represented By Kathleen G Alvarado
Movant(s):
Billy Hernandez Represented By Robert A Krasney
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: ROBERT RASKIN
EH
Docket 17
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT relief from § 1301(a) stay. GRANT request under
¶ 2.
APPEARANCES REQUIRED.
Debtor(s):
Lee Curtis Appel Pro Se
Joint Debtor(s):
Dayon Andrea Appel Pro Se
Movant(s):
Robert Raskin Represented By Helen G Long
10:00 AM
Trustee(s):
John P Pringle (TR) Pro Se
2:00 PM
From: 11/8/16, 12/6/16, 1/10/17, 3/7/17,4/4/17 EH
Docket 83
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
From: 11/15/16, 12/6/16, 12/20/16, 2/28/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
2:00 PM
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01279 Allied Injury Management, Inc. v. One Stop Multi-Specialty Medical Group
From: 1/24/17, 3/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Nor Cal Pain Management Medical Represented By
Maria K Pum
One Stop Multi-Specialty Medical Represented By
Maria K Pum
One Stop Multi-Specialty Medical Represented By
Maria K Pum
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
2:00 PM
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
From: 6/7/16, 8/30/16, 11/1/16,3/7/17, 4/18/17 Also # 27
EH
Docket 4
- NONE LISTED -
Debtor(s):
Welch Management Corporation Represented By
Stephen R Wade
W. Derek May
2:00 PM
Also #28 EH
Docket 140
- NONE LISTED -
Debtor(s):
Welch Management Corporation Represented By
Stephen R Wade
W. Derek May
11:00 AM
EH
Docket 35
- NONE LISTED -
Debtor(s):
Laureen Martha Harley Represented By
James M Powell - DISBARRED - Michael H Raichelson
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
Docket 62
04/26/2017
APPEARANCES REQUIRED.
11:00 AM
Debtor(s):
Benjie Lee Soliz Represented By Joseph L Borrie
Joint Debtor(s):
Judy Lynn Soliz Represented By Joseph L Borrie
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe
Docket 31
04/26/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 595 Trustee Expenses: N/A
11:00 AM
The application for compensation is approved and the trustee may submit on the tentative.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Erma Uribe Saucedo Represented By
Rabin J Pournazarian
Trustee(s):
Howard B Grobstein (TR) Pro Se
From: 2/1/17 EH
Docket 23
- NONE LISTED -
Debtor(s):
Monay N Matta Pro Se
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
11:00 AM
Trustee(s):
Michael J Bujold Mohammad Tehrani Everett L Green
Lynda T. Bui (TR) Pro Se
Also # 6 EH
Docket 116
04/26/2017
BACKGROUND
On September 21, 2014 ("Petition Date"), David J. Varela ("Debtor") filed his petition for chapter 7 relief. Howard Grobstein is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the estate is real property located at 41150 Marseille Court in Murrieta, CA 92562 (the "Property").
On February 23, 2017, the Debtor filed motions to avoid the liens of Cal-West Equities, Inc. ("Cal-West") and LVNV Funding, LLC ("LVNV") pursuant to 11
U.S.C. § 522(f). The Debtor subsequently withdrew the motions.
On March 9, 2017, the Debtor filed amended Schedules A, B and C. The initially filed schedules provided no basis for exemption of the Debtor’s Property. However, the amended schedules specified that the Debtor was exempting $100,000 in the Property pursuant to CCP § 704.730(a)(2).
On March 20, 2017, the Debtor filed two new motions again seeking to avoid
11:00 AM
the liens of Cal-West and LVNV (the "Motions"). On April 10, 2017, Cal-West obtained an order granting it relief from stay as to the Property. On April 12, 2017, Cal-West filed opposition to the Motion (the "Opposition"). The Debtor replied on April 18, 2017, and filed objection to the declaration of Dan Townsend regarding the fair market value of the Property.
DISCUSSION
Cal-West does not dispute that the calculation of the Debtor’s interest in the Property should be limited to his 50% interest. As such, the only material issue in dispute appears to be regarding the total fair market value of the Property.
Section 522(f)(1)(A) provides in relevant part: "the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled ... if such lien is
a judicial lien." 11 U.S.C. § 522(f)(1)(A) (emphasis supplied).
Section 522(f)(2) prescribes a formula for calculating whether an exemption is impaired:
(2)(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of—
the lien;
all other liens on the property; and
the amount of the exemption that the debtor could claim if there were no liens on the property; exceeds the value that the debtor's interest in the property would have in the absence of any liens.
In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph
(A) with respect to other liens.
(C) This paragraph shall not apply with respect to a judgment arising out of a mortgage foreclosure.
11 U.S.C. § 522(f)(2) (emphasis supplied). That is, an exemption is impaired if subtracting all of the unavoidable liens and the exemption (here, totaling $252,134.90)
11:00 AM
from the value of the debtor's half interest yields zero or less. See In re Meyer, 373
B.R. 84, 89 (9th Cir. BAP 2007).
The Debtor’s valuation is $360,000. The Debtor’s 50% interest in that amount is $180,000. Cal-West’s valuation is $410,000. The Debtor’s 50% interest in that amount is $205,000. Under either valuation, subtracting $252,134.90 results in a negative number. Thus, the Debtor is correct that Cal-West’s valuation changes nothing. The liens of both LVNV and Cal-West impair the Debtor’s claimed exemption and are thus avoidable pursuant to 11 U.S.C. § 522(f).
In Law v. Siegel, 134 S. Ct. 1188 (2014), the Supreme Court held that bankruptcy courts may not create non-statutory exceptions to the bankruptcy code. Law specifically addressed exemptions under § 522 and indicated that the bankruptcy code set forth the specific circumstances under which Congress determined that an exemption could be disallowed. Id. The Supreme Court then expressly found that a bankruptcy had no authority under federal law to disallow exemptions for reasons other than those set forth under § 522 or, alternatively, under any grounds applicable under state law. Id.
Cal-West has cited to Jefferson v. Tom, 52 Cal.App.2d 432 (1942), for the proposition that laches applies under California law as a basis to disallow a debtor’s exemption. However, the Court need not reach Cal-West’s argument because FRBP 4003(b) provides parties in interest with 30 days from the date of any amendment to a schedule to file an objection to property claimed as exempt. Here, the Debtor amended his schedules on March 9, 2017. Thus, the deadline to file an objection to the Debtor’s exemption would have lapsed on or about April 8, 2017. Cal-West did not timely object to the claimed exemption. Instead, the objection to the Debtor’s exemption comes in the form of an opposition to the Debtor’s motions to avoid lien under § 522 (f). Based on the foregoing, the Court finds that Cal-West’s laches argument and objection to the exemption is untimely and is otherwise not relevant to a determination of whether the lien of Cal-West impairs the Debtor’s properly claimed exemption.
11:00 AM
TENTATIVE RULING
For the foregoing reasons, the Court is inclined GRANT the Motions finding that the liens of LVNV and Cal-West impair the Debtor’s properly claimed exemption.
APPEARANCES REQUIRED.
Debtor(s):
David J. Varela Represented By Thomas J Tedesco
Movant(s):
David J. Varela Represented By Thomas J Tedesco
Trustee(s):
Howard B Grobstein (TR) Represented By Nina Z Javan
Meghann A Triplett Noreen A Madoyan
EH
Docket 117
11:00 AM
BACKGROUND
On September 21, 2014 ("Petition Date"), David J. Varela ("Debtor") filed his petition for chapter 7 relief. Howard Grobstein is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the estate is real property located at 41150 Marseille Court in Murrieta, CA 92562 (the "Property").
On February 23, 2017, the Debtor filed motions to avoid the liens of Cal-West Equities, Inc. ("Cal-West") and LVNV Funding, LLC ("LVNV") pursuant to 11
U.S.C. § 522(f). The Debtor subsequently withdrew the motions.
On March 9, 2017, the Debtor filed amended Schedules A, B and C. The initially filed schedules provided no basis for exemption of the Debtor’s Property. However, the amended schedules specified that the Debtor was exempting $100,000 in the Property pursuant to CCP § 704.730(a)(2).
On March 20, 2017, the Debtor filed two new motions again seeking to avoid the liens of Cal-West and LVNV (the "Motions"). On April 10, 2017, Cal-West obtained an order granting it relief from stay as to the Property. On April 12, 2017, Cal-West filed opposition to the Motion (the "Opposition"). The Debtor replied on April 18, 2017, and filed objection to the declaration of Dan Townsend regarding the fair market value of the Property.
DISCUSSION
Cal-West does not dispute that the calculation of the Debtor’s interest in the Property should be limited to his 50% interest. As such, the only material issue in dispute appears to be regarding the total fair market value of the Property.
Section 522(f)(1)(A) provides in relevant part: "the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled ... if such lien is
a judicial lien." 11 U.S.C. § 522(f)(1)(A) (emphasis supplied).
Section 522(f)(2) prescribes a formula for calculating whether an exemption is
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impaired:
(2)(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of—
the lien;
all other liens on the property; and
the amount of the exemption that the debtor could claim if there were no liens on the property; exceeds the value that the debtor's interest in the property would have in the absence of any liens.
In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph
(A) with respect to other liens.
(C) This paragraph shall not apply with respect to a judgment arising out of a mortgage foreclosure.
11 U.S.C. § 522(f)(2) (emphasis supplied). That is, an exemption is impaired if subtracting all of the unavoidable liens and the exemption (here, totaling $252,134.90) from the value of the debtor's half interest yields zero or less. See In re Meyer, 373
B.R. 84, 89 (9th Cir. BAP 2007).
The Debtor’s valuation is $360,000. The Debtor’s 50% interest in that amount is $180,000. Cal-West’s valuation is $410,000. The Debtor’s 50% interest in that amount is $205,000. Under either valuation, subtracting $252,134.90 results in a negative number. Thus, the Debtor is correct that Cal-West’s valuation changes nothing. The liens of both LVNV and Cal-West impair the Debtor’s claimed exemption and are thus avoidable pursuant to 11 U.S.C. § 522(f).
In Law v. Siegel, 134 S. Ct. 1188 (2014), the Supreme Court held that bankruptcy courts may not create non-statutory exceptions to the bankruptcy code. Law specifically addressed exemptions under § 522 and indicated that the bankruptcy code set forth the specific circumstances under which Congress determined that an exemption could be disallowed. Id. The Supreme Court then expressly found that a bankruptcy had no authority under federal law to disallow exemptions for reasons other than those set forth under § 522 or, alternatively, under any grounds applicable under state law. Id.
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Cal-West has cited to Jefferson v. Tom, 52 Cal.App.2d 432 (1942), for the
proposition that laches applies under California law as a basis to disallow a debtor’s exemption. However, the Court need not reach Cal-West’s argument because FRBP 4003(b) provides parties in interest with 30 days from the date of any amendment to a schedule to file an objection to property claimed as exempt. Here, the Debtor amended his schedules on March 9, 2017. Thus, the deadline to file an objection to the Debtor’s exemption would have lapsed on or about April 8, 2017. Cal-West did not timely object to the claimed exemption. Instead, the objection to the Debtor’s exemption comes in the form of an opposition to the Debtor’s motions to avoid lien under § 522 (f). Based on the foregoing, the Court finds that Cal-West’s laches argument and objection to the exemption is untimely and is otherwise not relevant to a determination of whether the lien of Cal-West impairs the Debtor’s properly claimed exemption.
TENTATIVE RULING
For the foregoing reasons, the Court is inclined GRANT the Motions finding that the liens of LVNV and Cal-West impair the Debtor’s properly claimed exemption.
APPEARANCES REQUIRED.
Debtor(s):
David J. Varela Represented By Thomas J Tedesco
Movant(s):
David J. Varela Represented By Thomas J Tedesco
Trustee(s):
Howard B Grobstein (TR) Represented By Nina Z Javan
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Meghann A Triplett Noreen A Madoyan
EH
Docket 55
- NONE LISTED -
Debtor(s):
Manuel Jose Saldana Represented By Robert G Uriarte
Trustee(s):
Lynda T. Bui (TR) Represented By Leonard M Shulman Elyza P Eshaghi Rika Kido
EH
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Docket 57
04/26/2017
BACKGROUND
On October 10, 2015 ("Petition Date"), Kai Lin Wu ("Debtor") filed a petition for chapter 7 relief.
On November 20, 2015, the Office of the United States Trustee ("UST") filed a motion for fine and/or disgorgement of fees against bankruptcy petition preparer Frank Osekowsky Frank’s Paralegal Services (collectively, "Osekowsky"). Prior to the hearing, the UST and Osekowsky reached a stipulation. On January 7, 2016, the Court entered an order granting the UST’s motion pursuant to the terms of the stipulation (the "Prior Order").
On March 28, 2017, the UST filed a motion for an order to show cause as to why bankruptcy petition preparer should not be held in contempt of Court ("Motion") for failure to comply with the terms of the BPP Order.
Service appears proper and no opposition has been filed.
DISCUSSION
The UST seeks issuance of an order to show cause why Osekowsky should not be held in civil contempt for failure to make payments due and owing under the terms of the Payment Schedule approved pursuant to the Prior Order. Per the Payment Schedule, at least two payments came due prior to the UST’s filing of the instant Motion and the UST has provided evidence that no payments have been made by Osekowsky as of March 23, 2017. (Tehrani Decl. ¶6).
TENTATIVE RULING
Based on the UST’s evidence, in addition to the failure of Osekowsky to file opposition to the Motion, which this Court deems as consent to the granting of the Motion pursuant to LBR 9013-1(h), the Court is inclined to GRANT the Motion.
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The UST is to lodge an order granting the Motion and a proposed order to show cause for the Court’s review.
APPEARANCES REQUIRED.
Debtor(s):
Kai Lin Wu Represented By
Paul Y Lee
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
Trustee(s):
John P Pringle (TR) Represented By Wesley H Avery
Case Dismissed: 3/6/17
EH
Docket 70
BACKGROUND
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On May 16, 2016 ("Petition Date"), Jina Soo Choi ("Debtor") filed her petition for chapter 13 relief. On August 4, 2016, the case was converted to a case under chapter 7. On January 6, 2017, the Debtor moved the Court for an order dismissing her case. The case was dismissed on March 6, 2017.
On March 10, 2017, the Office of the United States Trustee ("UST") filed its Motion of United States Trustee For An Order Disgorging Fees, Assessing Damages, And Imposing Fines And Against Bankruptcy Petition Preparer Sandra Cooper Pursuant to 11 U.S.C. § 110 ("Motion"). The Motion was amended on March 29, 2017.
On April 5, 2017, Sandra Cooper ("Cooper") filed her opposition to the Motion ("Opposition"). On April 19, 2017, the UST filed its reply to the Opposition ("Reply").
DISCUSSION
The Motion asserts that Cooper violated 11 U.S.C. § 110 by failing to disclose her identity as required by statute, by executing the Debtor’s signature, and by failing to furnish copies of the filed bankruptcy documents to the Debtor. Based thereon, the UST requests disgorgement of fees, statutory damages of $2,000 pursuant to § 110(i), and payment of fines to the UST in the total sum of $21,000 ($6,000 for individual violations in failing to disclose her identity as required under § 110(b)(1) and 110(c) (1), as tripled pursuant to §110(l)(1) for a total of $18,000, in addition to $3,000 for failing to furnish copies of the bankruptcy documents to the Debtor as required under
§110(d)). (Note: the Reply indicates that the UST will not pursue an additional $3,000 in fines requested by the Motion for executing documents on behalf of the Debtor unless the Court determines that an evidentiary hearing is appropriate).
By her Opposition, Cooper disputes that she is a bankruptcy petition preparer (a "BPP"). Cooper asserts that her assistance was limited to filing the bankruptcy petition ("walking in his paperwork") on behalf of Hee Chang Choi (the Debtor’s husband). (Opposition at ¶ 5). Cooper further asserts that she never met the Debtor and instead that she was asked to assist the Debtor’s husband with obtaining a loan modification (Id. at ¶¶2-3). Cooper disputes the allegation that she received any money either from the Debtor or from the Debtor’s husband (Id. at ¶ F) and instead repeatedly asserts that she was only assisting the Debtor’s husband on the request of
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an unidentified third party who had been helping the Debtor’s husband with a "Free and Clear" program. (Cooper Declaration).
In In re Reynoso, the Ninth Circuit provided examples of cases in which a party has been properly deemed a bankruptcy petition preparer. As the Ninth Circuit explained,
It goes without saying that the customer must provide data to the preparer, and the customer's role in printing or otherwise reproducing the forms before filing does not alter the role of the preparer.
Moreover, § 110 does not require that bankruptcy petition preparers have in-person interactions with their customers. Cf. Ferm v. U.S. Trustee (In re Crowe ), 243 B.R. 43, 49-50 (9th Cir. BAP 2000) (holding that the author of an instructional book on bankruptcy petitions who guaranteed buyers of the book that he would complete their forms for free if they were unable to do so themselves was, in fact, presenting himself as a bankruptcy petition preparer as defined by
§ 110(a)(1)), aff'd, 246 F.3d 673 (9th Cir.2000) (unpublished table decision); In re Doser, 281 B.R. 292, 303-04 (Bankr.D.Idaho 2002) (reasoning that a franchisor who receives information that was solicited in a face-to-face interaction between the franchisee and the customer and uses that information to prepare bankruptcy documents, but never meets with the customer directly, is a bankruptcy petition preparer), aff'd, 412 F.3d 1056.
In re Reynoso, 477 F.3d 1117, 1123–24 (9th Cir. 2007).
The Cooper Opposition and supporting declaration are vague as to the details of how or why Cooper was engaged to work with the Debtor’s husband. Cooper repeatedly makes reference to a third party that was a point of contact between the Debtor’s husband and her. However, this third party is never identified. Additionally, Cooper indicates she was only helping the alleged third party but disputes that she ever received money in connection with her assistance and disputes that she did anything other than "walk in" the petition documents to the Court. Cooper’s assertions, however, are not credible. There is no indication of the nature of Cooper’s relationship with the alleged third party and no detail as to why she would assist the Debtor’s husband or the alleged third party agent without any compensation. The Choi
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Declaration provided by the UST makes reference to a third party who the Debtor asserted was a patient of the Debtor’s husband. The Debtor’s declaration asserts that the patient referred her husband to Cooper for the purpose of negotiating a loan modification. (Mot. at Exh. 1, Choi Decl. ¶7). Cooper correctly points out that the information regarding the third party/patient is hearsay. However, the remainder of the Choi declaration unequivocally identifies Cooper, and only Cooper, as the point of contact for all communications regarding the filing of the bankruptcy for the Debtor. (Id. at ¶¶8-19).
As to the remaining allegations of the Motion, Cooper by her Opposition has specifically denied all of the allegations of the Motion, including that she executed the petition documents for the Debtor. In an effort to controvert the allegation that she did not disclose her identity, Cooper notes that she was asked for a copy of her driver’s license when filing the petition and provided it. Cooper’s willingness to provide her Driver’s license to the clerk when filing the petition, however, does not overcome her failure to provide specific identifying information on the petition itself as required pursuant to § 110, such as an address and social security number. Thus, assuming the Court finds that Cooper is a BPP within the meaning of the statute, the Court is inclined to GRANT the Motion pursuant to the reduced figure requested by the UST in its Reply.
TENTATIVE RULING
APPEARANCES REQUIRED.
Debtor(s):
Jina Soo Choi Represented By
Nicholas S Nassif
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
Trustee(s):
Howard B Grobstein (TR) Pro Se
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Docket 17
04/26/2017
BACKGROUND
On December 20, 2016, Alpine Industries LLC ("Debtor") filed a petition for chapter 7 relief. Robert Whitmore is the duly appointed chapter 7 trustee ("Trustee"). The bankruptcy petition is supported by an electronic filing declaration signed by the Debtor's prior counsel, Laleh Ensafi ("Ensafi") and also purportedly by the Debtor's principal, Michael Kiralla ("Kiralla"). (Docket No. 2).
On March 22, 2017, the Debtor filed a substitution, terminating the representation of Ensafi. On March 28, 2017, the Debtor filed a Motion to Dismiss its chapter 7 case ("Motion"). The Motion appears to have been properly served on the Trustee and all creditors. No opposition has been filed.
The Motion asserts as its primary basis for dismissal that (1) Kiralla was not fully informed of how the bankruptcy would affect the Debtor by Ensafi and (2) that the signature used to file the bankruptcy petition was not Kiralla's.
The electronic filing declaration certifies the accuracy of documents being filed by an attorney and certified an authorized signatory's permission to have the document filed by an attorney. Here, the allegations that form the basis for the dismissal can only be controverted by Ensafi. Notwithstanding, the Motion was not served on Ensafi.
Based on the foregoing the Court will CONTINUE the hearing to May 31, 2017, at 11:00 a.m. for service on Ensafi.
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APPEARANCES WAIVED. Movant to file/serve the Motion on Ensafi, and to file/serve notice of the continuance on all parties.
Debtor(s):
ALPINE INDUSTRIES, LLC Represented By Michael E Clark
Movant(s):
ALPINE INDUSTRIES, LLC Represented By Michael E Clark
Trustee(s):
Robert Whitmore (TR) Pro Se
From: 3/29/17 EH
Docket 24
- NONE LISTED -
Debtor(s):
Roderick E Clignett Represented By Robert M Aronson
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Movant(s):
Roderick E Clignett Represented By Robert M Aronson Robert M Aronson Robert M Aronson
EH
Docket 26
- NONE LISTED -
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Movant(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui
Melissa Davis Lowe Elyza P Eshaghi Brandon J Iskander
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Docket 26
- NONE LISTED -
Debtor(s):
Antonio Carlos Saldate Pro Se
Movant(s):
Antonio Carlos Saldate Pro Se
Trustee(s):
Robert Whitmore (TR) Pro Se
(HOLDING DATE)
From: 2/8/17, 3/8/17, 4/5/17 EH
Docket 125
04/05/2017
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The Status Conference is CONTINUED to April 26, 2017, at 11:00 a.m. as a holding date. The Court shall issue an amended order regarding fees ordered against Tunold and Kints in its September 29, 2014, order. Appearances are excused for the April 26, 2017, Status Conference.
APPEARANCES WAIVED.
Debtor(s):
Jerold R Meints Represented By Gene E O'Brien Harold M Hewell
Trustee(s):
Helen R. Frazer (TR) Pro Se
EH
Docket 151
- NONE LISTED -
Debtor(s):
Matthew Joseph Pautz Represented By Stephen D Brittain
Joint Debtor(s):
Alice Louise Pautz Represented By
11:00 AM
Movant(s):
Stephen D Brittain
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
EH
Docket 152
- NONE LISTED -
Debtor(s):
Matthew Joseph Pautz Represented By Stephen D Brittain
Joint Debtor(s):
Alice Louise Pautz Represented By Stephen D Brittain
11:00 AM
Movant(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
2:00 PM
Adv#: 6:16-01086 Eley v. National Collegate Student Loan
Also # 16 - 17 EH
Docket 10
04/26/2017
The hearing on the Motion was continued from February 8, 2017. At the prior hearing, the Court continued the hearing for supplemental briefing on the issue of whether a claim that a state law statute of limitations defense may serve as a basis for the Debtor’s determination of dischargeability complaint under § 523(a)(8).
The Debtor, in support of his Complaint, primarily relies on Banks v. Gill Distribution Centers, Inc., 263 F.3d 862, 868 (9th Cir. 2001), for his argument that on a complaint for determination of dischargeability of a student loan the court must first consider the establishment of the debt (which is subject to the applicable state statute of limitations) and second, make a determination as to the nature of the debt.
The Debtor’s analysis of Banks v. Gill is unpersuasive. In that case, the Ninth Circuit was asked to examine the holding of the Tenth Circuit of Appeals in In re McKendry, 40 F.3d 331, 334 (10th Cir. 1994). The Tenth Circuit framed the question as follows: "where a debt has been reduced to judgment in state court, can the bankruptcy court be barred by a state statute of limitations from considering the underlying nature of the debt in determining whether that debt is dischargeable." In McKendry, a creditor had obtained a deficiency judgment against the debtor and the issue before the trial court was whether the creditor could attempt to prove that the debt established by the deficiency judgment was nondischargeable due to fraud. Id. at 334.
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In considering the issue, the McKendry Court, quoted In re Moran, 152 B.R.
493 (Bankr.S.D.Oh.1993), and followed its reasoning:
[t]here is a fundamental flaw in the debtor's position in that it fails to recognize the distinction between a suit brought under state law to enforce state created rights and a suit filed in bankruptcy court to determine dischargeability issues under § 523(a) of the Bankruptcy Code. In bankruptcy court there are two separate and distinct causes of action:
One cause of action is on the debt and the other cause of action is on the dischargeability of that debt, a cause of action that arises solely by virtue of the Bankruptcy Code and its discharge provisions.
Until the debtor filed his petition for relief under the Bankruptcy Code, the plaintiffs obviously had no cause of action under § 523(a)(4)....
The only relevant question with respect to Ohio's statute of limitations is whether the plaintiffs sought to enforce their "debt" against the debtor within the period prescribed by the statute of limitations. The debtor does not dispute that the plaintiffs did so. In the instant adversary proceeding, the nature of the alleged debt, i.e., whether the debt is of a type determined by Congress to be nondischargeable, is to be decided by this court. Moran, 152 B.R. at 495. (emphasis in the original).
In re McKendry, 40 F.3d 331, 336–37 (10th Cir. 1994)(internal citations omitted). Moran, McKendry and Banks all involve situations in which the plaintiffs were creditors of the estate seeking to enforce a prepetition claim (reduced to judgment or not) against a debtor. In order to enforce such claims, this line of cases holds that the creditor must first (1) establish that a debt exists (and such determination requires an evaluation of whether such a claim could exist under state law, including with reference to the applicable statute of limitations); and (2) must then establish that the debt is nondischargeable under the Bankruptcy Code.
Here, the Debtor is the plaintiff and is not seeking to enforce a debt but is
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instead seeking a determination that the debt is dischargeable based on the fact that the statute of limitations has run under state law. However, the debtor’s argument belies the holding of McKendry of Banks because assuming, arguendo, that there is no debt due to the operation of the statute of limitations under state law, the Court need not reach the issue of whether the debt is nondischargeable under the Bankruptcy Code. In other words, by asserting that there is no debt because the California statute of limitations has lapsed, the Debtor’s Complaint has addressed only the threshold issue in Banks – whether a debt exists under state law. The issue of dischargeability, however, requires (1) that there be a debt; (2) that it be a student loan debt; and (3) that the debtor demonstrate that payment would of the debt would constitute an undue hardship. Based on the foregoing, given that the Complaint is premised upon there being no debt, the Court cannot reach the issue of dischargeability.
04/26/2017
APPEARANCES REQUIRED
02/08/2017
BACKGROUND
On December 13, 2011, Allen Brandon Eley (the "Debtor") filed his petition for chapter 7 relief. The Debtor received a discharge of his debts on March 26, 2012. The Debtor’s case was subsequently closed on December 17, 2013.
On March 30, 2016, the Debtor filed a complaint against National Collegiate Student Loan Trust ("Defendant"). He subsequently amended his complaint on July 5, 2016. The Debtor’s amended complaint asserts that he is seeking a determination of dischargeability against the Defendant on the basis that the Statute of Limitations has lapsed and on this basis asserts his debt should be discharged (the "Complaint").
On December 23, 2016, Defendant filed a Motion for Summary Judgment (the "Motion") seeking a determination (1) that this Court lacks jurisdiction over the Debtor’s claim; and (2) that having failed to assert "undue hardship" the Plaintiff’s Complaint has failed to assert a claim that would render its claim dischargeable.
On January 18, 2017, the Debtor filed his Opposition to the Motion
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("Opposition"). The Debtor primarily argues that the Motion is premature and that the Court should permit discovery to continue because the Debtor should be afforded an opportunity to demonstrate that the Defendant’s claim is not enforceable.
DISCUSSION
The Motion is brought pursuant to FRBP 7056 (incorporating Fed R. Civ. P. 56). FRBP 7056. Under Fed R. Civ. P. 56, courts must view the evidence in the light most favorable to the non-moving party and "determine whether there are any genuine issues of material fact." Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir.1996). A material fact is one that, "under the governing substantive law ... could affect the outcome of the case." Thrifty Oil Co. v. Bank of America Nat'l Trust & Savings Ass'n, 322 F.3d 1039, 1046 (9th Cir.2003) (citing *761 Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986)). A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248. The party moving for summary judgment must initially identify "those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party meets its burden, the non-moving party must "set out specific facts showing a genuine issue for trial." Fed R. Civ. P. 56(e)(2).
If a moving party fails to carry its initial burden of production, the nonmoving party has no obligation to produce anything, even if the nonmoving party would have the ultimate burden of persuasion at trial. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 160 (1970). In such a case, the nonmoving party may defeat the motion for summary judgment without producing anything. See High Tech Gays v. Defense Indus. Sec. Clearance Office, 895 F.2d 563, 574 (9th Cir.1990). If, however, a moving party carries its burden of production, the nonmoving party must produce evidence to support its claim or defense (denials in the pleadings are insufficient). See Bhan v.
NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir.1991). If the nonmoving party fails to produce enough evidence to create a genuine issue of material fact, the moving party
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wins the motion for summary judgment. See Celotex at 322 ("Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."). But if the nonmoving party produces enough evidence to create a genuine issue of material fact, the nonmoving party defeats the motion. See id.
Dischargeability of Student Loans
It is well-settled law that student loan debts are presumptively nondischargeable in bankruptcy pursuant to § 523(a)(8). Tenn. Student Assistance Corp. v. Hood, 541 U.S. 440, 450 (2004) (holding that "unless the debtor affirmatively secures a hardship determination, the discharge order will not include a student loan debt").
The Court finds persuasive the Defendant’s citation to In re Gustafson, 111
B.R. 282, 285 (9th Cir. BAP 1990), rev'd on other grounds, 934 F.2d 216 (9th Cir. 1991) which states the standards for a determination of dischargeability of student loans:
Section 523(a)(8) of the Bankruptcy Code provides that educational loan debts are nondischargeable unless the loan 1) first became due prior to five years before filing, or 2) not excepting the loan from discharge would cause undue hardship to the debtor. The effect of this section is to make student loans presumptively nondischargeable until a complaint is brought to determine dischargeability based on one of the two exceptions. Section 523(a)(8) is self-executing and the burden is on the debtor to bring a complaint to determine dischargeability of the debt. Buford v. Higher Educ. Assistance Foundation, 85 B.R. 579 (D.Kan.1988). The lender is not required to file a complaint to determine dischargeability. S.Rep. No. 989, 95th Cong., 2d Sess. 79 (1978), U.S.Code Cong. & Admin.News 1978, p. 5787.
Id. The Debtor’s Complaint does not state a claim under § 523(a)(8), which is the only basis for a determination of dischargeability of a student loan debt. Here, there is no dispute that the debt at issue is a student loan debt and the Debtor’s only claim for
non-dischargeability is based on statute of limitation grounds. For these reasons, the
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Court finds that no material issues of fact remain to be determined which would prevent entry of summary judgment for the Defendant. Moreover, the Defendant has demonstrated that, as a matter of law, that the Debtor has not stated a claim for which relief is available in this Court.
Instead, the Court notes that the Debtor’s statute of limitations defense is a matter of state law and this ruling is without prejudice to the Debtor’s ability to assert his defense in the State Court Action brought by the Defendant and currently pending in the Superior Court of the County of Riverside.
Based on the foregoing, the Court declines to reach the issue of jurisdiction.
TENTATIVE RULING
The Court is inclined to GRANT the Motion on the bases that there are no material issues of fact to be determined at trial and that the Complaint fails to state a claim for dischargeability of the debt at issue. The case shall be dismissed
APPEARANCES REQUIRED.
Debtor(s):
Allen Brandon Eley Pro Se
Defendant(s):
National Collegate Student Loan Represented By
Damian P Richard
Movant(s):
National Collegate Student Loan Represented By
Damian P Richard
Plaintiff(s):
Allen Brandon Eley Represented By David Brian Lally
2:00 PM
Trustee(s):
Steven M Speier (TR) Pro Se
Adv#: 6:16-01086 Eley v. National Collegate Student Loan
From: 2/8/17 Also # 15 - 17 EH
Docket 15
02/08/2017
Given the Court's intention to GRANT defendant's Motion for Summary Judgment and dismiss the adversary proceeding, this Motion shall go off calendar as moot.
Debtor(s):
Allen Brandon Eley Pro Se
Defendant(s):
National Collegate Student Loan Represented By
Damian P Richard
Movant(s):
Allen Brandon Eley Represented By
2:00 PM
David Brian Lally
Plaintiff(s):
Allen Brandon Eley Represented By David Brian Lally
Trustee(s):
Steven M Speier (TR) Pro Se
Adv#: 6:16-01086 Eley v. National Collegate Student Loan
From: 6/1/16, 8/3/16, 10/5/16, 2/1/17, 2/8/17 Also # 15 - 16
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allen Brandon Eley Pro Se
Defendant(s):
National Collegate Student Loan Represented By
Damian P Richard
2:00 PM
Plaintiff(s):
Allen Brandon Eley Represented By David Brian Lally
Trustee(s):
Steven M Speier (TR) Pro Se
Adv#: 6:13-01288 Romeo et al v. Kengni
From: 10/9/13,12/11/13, 12/18/13, 3/12/14, 4/9/14, 5/21/14, 7/2/14, 10/22/14, 6/10/15, 8/26/15, 9/2/15, 11/18/15, 2/3/16, 4/6/16, 6/29/16, 8/31/16, 12/14/16,
2/8/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Bertrand Tenke Kengni Represented By Terrence Fantauzzi
Defendant(s):
Bertrand Tenke Kengni Represented By Terrence Fantauzzi Heidi H Romeo
2:00 PM
Plaintiff(s):
Law Offices of Heidi Romeo & Represented By Heidi H Romeo
Heidi H Romeo Represented By Heidi H Romeo
Trustee(s):
Helen R. Frazer (TR) Pro Se
Adv#: 6:15-01223 Frazer (TR) v. Kengni
From: 10/7/15, 2/3/16, 4/6/16, 6/29/16, 8/31/16, 12/14/16, 2/8/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Bertrand Tenke Kengni Represented By Terrence Fantauzzi
Defendant(s):
Carisa Kengni Represented By Kamola L Gray
2:00 PM
Plaintiff(s):
Helen R. Frazer (TR) Pro Se
Trustee(s):
Helen R. Frazer (TR) Pro Se
Adv#: 6:15-01314 Simons v. The Law Office of Don C. Burns et al
From: 12/30/15, 2/10/16, 5/11/16, 6/8/16, 6/22/16, 10/19/16, 12/14/16, 2/15/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Baleine LP Represented By
Summer M Shaw
Defendant(s):
Don C. Burns Pro Se
The Law Office of Don C. Burns Pro Se
2:00 PM
Plaintiff(s):
Larry D. Simons Represented By Carmela Pagay
Trustee(s):
Larry D Simons (TR) Represented By Carmela Pagay Todd A Frealy
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
Also #'s 22 - 24 EH
Docket 44
04/26/2017
The Court, having reviewed the Trustee's Unilateral Status Report indicating that he has agreed to a continuance of the hearing, the Trustee may appear telephonically.
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By
2:00 PM
George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Movant(s):
Mathew Grimshaw Pro Se
Larry D Simons (TR) Represented By George A Saba Matthew Grimshaw
D. Edward Hays Pro Se
Larry D Simons (TR) Pro Se
Marshack Hays LLP Pro Se
D. Edward Hays Represented By George A Saba Matthew Grimshaw
Larry D Simons (TR) Pro Se
Marshack Hays LLP Represented By George A Saba Matthew Grimshaw
Mathew Grimshaw Represented By George A Saba Matthew Grimshaw
David Wood Represented By
George A Saba Matthew Grimshaw
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
From: 11/2/16, 2/1/17, 2/15/17 Also #'s 21 - 24
EH
Docket 1
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
2:00 PM
Nabeel Naiem Slaieh Represented By George A Saba
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
Also #' 21 - 24
EH
Docket 39
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
2:00 PM
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
Mathew Grimshaw, Larry D Simons
(Voluntarily Dismissed as to Joanne Fraleigh only)
From: 2/1/17, 2/15/17 Also #'s 21 - 23
EH
Docket 19
2:00 PM
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
Adv#: 6:16-01141 Simons v. G7 Investments, LLC et al
2:00 PM
have been brought in state court if unrelated to bankruptcy From: 9/7/16, 10/19/16, 2/8/17, 4/10/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Jean M. Annunziata Represented By Jason D Strabo
Annunziata Family Trust Represented By Jason D Strabo
G7 Investments, LLC Represented By Jason D Strabo
Gary M Annunziata Represented By Jason D Strabo
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
Adv#: 6:16-01142 Simons v. Desert Gastroenterology Consultants, AMC et al
Complaint by Larry D Simons against Desert Gastroenterology Consultants, AMC. (Charge To Estate)$350.00. (Attachments: # 1 Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other)),(02 (Other (e.g. other actions that would have been brought in state court if unrelated to bankruptcy)))
From: 9/7/16, 10/19/16, 2/8/17, 4/10/17 EH
Docket 21
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Desert Gastroenterology Represented By Jason D Strabo
2:00 PM
Gary M. Annunziata Represented By Jason D Strabo
Desert Gastroenterology Represented By Jason D Strabo
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
Adv#: 6:16-01143 Simons v. Caffery Financial, inc. et al
From: 9/7/16, 12/7/16, 1/11/17, 2/15/17 EH
Docket 1
2:00 PM
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Kim Caffery Pro Se
Caffery Family Trust Pro Se
Caffery Financial, inc. Pro Se
Joe G. Caffery Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
Adv#: 6:15-01127 Wedbush Securities Inc v. Bonnheim
2:00 PM
From: 7/27/16, 9/7/16, 11/16/16, 1/1/17, 2/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
William Stephen Bonnheim Represented By Robert L Firth
Defendant(s):
William Stephan Bonnheim Represented By Robert L Firth
Plaintiff(s):
Wedbush Securities Inc Represented By John L Erikson Jr
Trustee(s):
Steven M Speier (TR) Pro Se
Adv#: 6:16-01212 Pringle v. Smyth
From: 11/2/16, 1/11/17 EH
2:00 PM
Docket 1
- NONE LISTED -
Debtor(s):
William Dillingham Smyth Represented By Kevin M Cortright
Defendant(s):
Elena Smyth Represented By
C Scott Rudibaugh
Plaintiff(s):
John P. Pringle Represented By Melissa Davis Lowe Rika Kido
Trustee(s):
John P Pringle (TR) Represented By Leonard M Shulman Melissa Davis Lowe
Adv#: 6:17-01039 United States Trustee for the Central District of v. Quintero et al
EH
Docket 1
2:00 PM
- NONE LISTED -
Debtor(s):
Ricardo Horacio Quintero Pro Se
Defendant(s):
Araceli Cantu Pro Se
Ricardo Horacio Quintero Pro Se
Joint Debtor(s):
Araceli Cantu Pro Se
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Howard B Grobstein (TR) Pro Se
Adv#: 6:16-01286 Apostolakis v. Neiderhiser
EH
Docket 15
2:00 PM
04/26/2017
BACKGROUND
On August 29, 2016, Patricia Glenn Apostolakis ("Debtor or "Plaintiff") filed her petition for chapter 7 relief. On December 1, 2016, the Debtor filed a complaint against Patricia Neiderhiser ("Defendant") to avoid preferential and/or fraudulent transfers ("Complaint"). The Complaint generally seeks to avoid a judgment lien on improved real property known as 10132 Phelan Road, in Oak Hills, California (the "Property").
On December 6, 2016, the Plaintiff filed her executed service of summons (Docket No. 3) indicating that the summons and complaint was served on Defendant on December 6, 2016. The Summons provided Defendant with a deadline of January 4, 2017, to file her answer.
An amended complaint was filed by the Plaintiff on December 29, 2016 (the "FAC").
On February 2, 2017, the Plaintiff re-filed a copy of her executed service of summons (Docket No. 5).
On February 6, 2017, the Plaintiff filed a request for entry of default as to the Defendant which was entered by the Clerk on February 7, 2017.
On March 22, 2017, the Plaintiff filed her Motion for Default Judgment against the Defendant (the "MDJ").
On April 11, 2017, the Defendant filed a Motion to vacate (or "set aside") the default ("MSA") and to expedite a hearing on her motion to vacate. The Court entered an order setting the MSA to be heard concurrent with the Motion for Default Judgment.
On April 20, 2017, the Plaintiff filed opposition to the MSA ("Opposition").
DISCUSSION
2:00 PM
Federal Rule of Civil Procedure 55(c) (made applicable by Fed. R. Bankr.P.
7055) provides that "[f]or good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b)". FRBP 7055.
factors:
To determine "good cause" under this Rule, a court must consider three
whether the party seeking to set aside the default engaged in culpable conduct that led to the default;
whether it had no meritorious defense; or
whether reopening the default judgment would prejudice the other party.
United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (citing Franchise Holding II v. Huntington Rests. Group, Inc., 375 F.3d 922, 925–26 (9th Cir. 2004), cert. denied 544 U.S. 949 (2005)). This test is disjunctive, such that a finding that any one of the factors is true is sufficient for the court to refuse to set aside the default. It is the same test used to determine whether a default judgment should be set aside under Civil Rule 60(b). Id. While a court has the discretion to refuse to set aside a default judgment for excusable neglect under Fed.R.Civ.P. 60(b) if it finds one of the enumerated factors present, it is not mandatory that it do so. See Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108 (9th Cir.2011). "Crucially, however, ‘judgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits.’ " Signed Personal Check No. 730 at 1091 (citing Falk v. Allen, 739 F.2d 461, 463 (9th Cir.1984)).
Defendant asserts that it appears the Complaint was served on her at her old address in Boron, California and as such she did not receive it. (Neiderhiser Decl. ¶3). The Defendant concedes that she received the FAC (but not the amended summons) at her address in Colorado on or about January 3 or 4 of 2017. The Defendant further asserts that the FAC did not indicate the time limit for the filing of a response. (Id. at ¶ 4). In response, the Plaintiff asserts that the Defendant has failed to corroborate her assertion that she has moved. Plaintiff suggests that the Defendant may own both properties and is simply asserting that she has moved in an effort to excuse her "sleeping on her rights" and lack of diligence. Here, Defendant may have engaged in
2:00 PM
"culpable conduct" regarding her address, and it does not appear Defendant has established a meritorious defense. However, any delay has been minor. Nevertheless, the Court is cognizant of the fact that as a direct result of Defendant’s three month delay in seeking to set aside the default despite having been aware of the Complaint since January 3 or 4, Plaintiff has unnecessarily expended fees in preparation of the Motion for Default Judgment, and such fees would otherwise prejudice Movant.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the MSA conditioned upon the Defendant’s payment of Plaintiff’s fees and costs associated with the filing of the Motion for Default Judgment.
The Court is further inclined to DENY the Motion for Default Judgment as moot based on the Court’s granting of the MSA.
APPEARANCES REQUIRED.
Debtor(s):
Patricia Glenn Apostolakis Represented By Todd L Turoci
Defendant(s):
Patricia Neiderhiser Represented By Phillip Myer
Movant(s):
Patricia Neiderhiser Represented By Phillip Myer
2:00 PM
Plaintiff(s):
Patricia Apostolakis Represented By Todd L Turoci
Trustee(s):
Karl T Anderson (TR) Pro Se
Adv#: 6:16-01286 Apostolakis v. Neiderhiser
EH
Docket 13
04/26/2017
The Court is inclined to DENY the Motion for Default Judgment as moot based on the Court’s granting of the MSA.
Debtor(s):
Patricia Glenn Apostolakis Represented By Todd L Turoci
Defendant(s):
Patricia Neiderhiser Represented By Phillip Myer
2:00 PM
Movant(s):
Patricia Apostolakis Represented By Todd L Turoci
Plaintiff(s):
Patricia Apostolakis Represented By Todd L Turoci
Trustee(s):
Karl T Anderson (TR) Pro Se
Adv#: 6:16-01286 Apostolakis v. Neiderhiser
From: 2/8/17, 3/29/17 Also #'s 31 - 32
EH
Docket 1
- NONE LISTED -
Debtor(s):
Patricia Glenn Apostolakis Represented By Todd L Turoci
2:00 PM
Defendant(s):
Patricia Neiderhiser Represented By Phillip Myer
Plaintiff(s):
Patricia Apostolakis Represented By Todd L Turoci
Trustee(s):
Karl T Anderson (TR) Pro Se
Adv#: 6:17-01004 Qiu v. Li
Also # 35 EH
Docket 7
BACKGROUND
On October 5, 2016, Jiangmin Li ("Defendant") filed a Chapter 7 voluntary petition.
2:00 PM
On January 9, 2017, Dongxia Qiu ("Plaintiff") filed an adversary complaint against Defendant, seeking a non-dischargeability finding. On February 8, 2017, Defendant filed a motion to dismiss for failure to state a claim. On February 22, 2017, Plaintiff filed her opposition. On March 3, 2017, Defendant filed a late reply.
The adversary complaint arises from state court litigation between the two parties. Plaintiff’s state court complaint included ten causes of action: (1) intentional misrepresentation; (2) negligent misrepresentation; (3) rescission – fraud; (4) rescission – mistake; (5) conversion; (6) breach of fiduciary duty; (7) imposition of constructive trust; (8) accounting; (9) unjust enrichment; and (10) breach of written contract. The Court ruled in favor of Plaintiff on her fourth (rescission – mistake) and sixth (breach of fiduciary duty) causes of action. The Court ruled against Plaintiff on the first (intentional misrepresentation) and third (rescission – fraud) causes of action. The Court deemed the second, fifth, seventh, eighth, ninth, and ten causes of action to have been forfeited due to Plaintiff’s failure to adequately brief the issues.
DISCUSSION
Fed. R. Civ. P. Rule 12(b)(6) states:
(b) Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:
(6) failure to state a claim upon which relief can be granted
Fed. R. Civ. P. Rule 12(d) states:
2:00 PM
If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.
Here, Defendant has a submitted a request for judicial notice, so the Court must initially determine whether to grant or deny the request. Pursuant to Fed. R. Civ. P. Rule 12(b)(6), granting a request for judicial may cause the Court to convert the motion to a motion for summary judgment. See, e.g., Jacobson v. AEG Capital Corp., 50 F.3d 1493, 1496 (9th Cir. 1995) ("In considering AEG’s motion to dismiss, the district court took judicial notice of the extensive records and transcripts from the prior bankruptcy proceedings. We therefore review the district court’s dismissal as an order granting summary judgment."). The Court may "consider unattached evidence on which the complaint ‘necessarily relies’ if: (1) the complaint refers to the document; (2) the document is central to the plaintiff’s claim; and (3) no party questions the authenticity of the document," without converting the motion to a motion for summary judgment. See U.S. v. Corinthian Colls., 655 F.3d 984, 999 (9th Cir. 2011).
Here, the unattached evidence contained in Defendant’s request for judicial notice satisfies the above test. Plaintiff necessarily relied on the documents. In fact, the Plaintiff appears to have erroneously omitted the documents when filing the complaint, since the complaint purports to attach the three documents and references the documents throughout. Therefore, the Court will grant the request for judicial notice, and evaluate the motion as a motion to dismiss for failure to state a claim.
The standard for a Rule 12(b)(6) motion to dismiss is the following:
While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above
2:00 PM
the speculative level, on the assumption that all the allegations in the
complaint are true. The need at the pleading stage for allegations plausibly
suggesting agreement reflects the threshold requirement of Rule 8(a)(2) that the "plain statement" possesses enough heft to "show that the pleader is entitled to relief.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-57 (2007) (quotations and parentheses omitted).
Here, Plaintiff states two causes of action, both relating to non-dischageability, under 11 U.S.C. § 523(a)(4) and (6). Defendant alleges that both causes of action are barred by collateral estoppel.1 The state court statement of decision found denied Plaintiff’s claims for intentional fraud and for rescission based on fraud. That decision granted Plaintiff’s claims for unilateral mistake of fact and breach of fiduciary duty. While Plaintiff’s complaint contained other causes of action, the state court deemed those causes of action to be forfeited by Plaintiff’s failure to brief the issues.
"Under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case." Allen v. McCurry, 449
U.S. 90, 94 (1980). Collateral estoppel applies in dischargeability proceedings. See Grogan v. Garner, 498 U.S. 279, 284 n.11 (1991). And it is appropriate to consider a collateral estoppel argument at the motion to dismiss stage. See, e.g., Conopco, Inc. v. Roll Int’t, 231 F.3d 82, 86 (2nd Cir. 2000).
In California, "collateral estoppel bars relitigation when (1) the issue decided in the prior action is identical to the issue presented in the second action; (2) there was a final judgment on the merits; and (3) the party against whom estoppel is asserted was a party . . . to the prior adjudication." Garrett v. City & Cnty. of San Francisco, 818 F.2d 1515, 1520 (9th Cir. 1987).
2:00 PM
11 U.S.C. § 523(a)(4) states:
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt –
(4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny
Plaintiff’s complaint raises three disjunctive claims: (1) defalcation in a fiduciary capacity, (2) embezzlement, and (3) larceny. "To prevail in a § 523(a)(4) action, the creditor must establish that (1) a fiduciary relationship existed and (2) a defalcation occurred." Erde v. Moriarty, 2013 WL 12132069 at *6 (C.D. Cal. 2013). Defalcation under § 523(a)(4) was recently defined broadly and, somewhat vaguely, by the Supreme Court:
Thus, where the conduct at issue does not involve bad faith, moral turpitude, or other immoral conduct, the term requires an intentional wrong. We include as intentional not only conduct that the fiduciary knows is improper but also reckless conduct of the kind set forth in the Model Penal Code. Where actual knowledge of wrongdoing is lacking, we consider conduct as equivalent if the fiduciary "consciously disregards" "a substantial and unjustifiable risk" that his conduct will turn out to violate a fiduciary duty. That risk "must be of such a nature and degree that, considering the nature and purpose of the actor’s conduct and the circumstances known to him, its disregard involves a gross deviation from the standard of conduct that a law-abiding person would observe in the actor’s situation.
Bullock v. BankChampaign, N.A., 133 S. Ct. 1754, 1759-1760 (2013).
Embezzlement is the use of funds lawfully entrusted for an unauthorized purpose. In re Littleton, 942 F.2d 551, 555 (9th Cir. 1991). Larceny is the "felonious taking of
2:00 PM
another’s personal property with intent to convert it or deprive the owner of the same." In re Ormsby, 591 F.3d 1199, 1205 (9th Cir. 2010). "Larceny is distinguished from embezzlement in that the original taking of the property was unlawful." In re Montes, 177 B.R. 325, 331 (Bankr C.D. Cal. 1994).
In ruling against Plaintiff’s causes of action for fraud and rescission based on fraud, the state court found that, regarding the certain misrepresentations that were the basis of Plaintiff’s claim, "Plaintiff did not rely on those misrepresentations in entering into the April agreement." In both cases, the state court found that Plaintiff failed to demonstrate that it relied on the alleged misrepresentations of Defendant in entering into the contract. This finding of the state court does not constitute a finding that Defendant did not commit defalcation. As the Supreme Court quotation above highlights, the issues are substantially different.
The issues are also substantially different with regard to Plaintiff’s § 523(a)(6) claim. 11 U.S.C. § 523(a)(6) states:
A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt –
(6) for willful and malicious injury by the debtor to another entity or to the property of another entity
Again, the state court’s finding that Plaintiff failed to demonstrate reliance on alleged misrepresentations of Defendant when entering into the contract at issue does not constitute a finding that Defendant did not commit a willful and malicious injury. The state court’s findings underlining its ruling in Plaintiff’s favor for rescission based on unilateral mistake of fact and breach of fiduciary duty could plausibly be considered to state a claim pursuant to § 523(a)(4) and (6).
TENTATIVE RULING
2:00 PM
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Jiangmin Li Represented By
Sam X J Wu
Defendant(s):
Jiangmin Li Represented By
Sam X J Wu
Movant(s):
Jiangmin Li Represented By
Sam X J Wu
Plaintiff(s):
Dongxia Qiu Represented By
John Y Kim
Trustee(s):
Todd A. Frealy (TR) Pro Se
Adv#: 6:17-01004 Qiu v. Li
2:00 PM
From: 3/8/17 Also # 34 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jiangmin Li Represented By
Sam X J Wu
Defendant(s):
Jiangmin Li Represented By
Sam X J Wu
Plaintiff(s):
Dongxia Qiu Represented By
John Y Kim
Trustee(s):
Todd A. Frealy (TR) Pro Se
4:00 PM
MOVANT: COUNTY OF RIVERSIDE
EH
Docket 6
- NONE LISTED -
Debtor(s):
Brian William Bokon Pro Se
Movant(s):
Riverside County Treasurer-Tax Represented By
Ronak Patel
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
9:30 AM
FROM: 3/23/17
EH
Docket 16
Summary of the Motion:
TENTATIVE
Trinity requests additional time to obtain an appraisal of the Property; and
Trinity asserts that the loan payoff statement provided by the Debtors as Exhibit "A" which sets forth the amount of the first mortgage is hearsay and alternatively, that it indicates there may have been a loan modification with the potential for loan forgiveness as to a portion of the loan principal
First, the Court is inclined to grant Trinity’s request for additional time. Separately, the Court overrules Trinity’s hearsay objection but finds that Trinity’s request for the Debtors to indicate whether any portion of the loan principal has been forgiven is reasonable.
APPEARANCES REQUIRED.
9:30 AM
Debtor(s):
Gilberto Herrera Represented By Todd L Turoci
Joint Debtor(s):
Monica Herrera Represented By Todd L Turoci
Movant(s):
Monica Herrera Represented By Todd L Turoci
Gilberto Herrera Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 35
- NONE LISTED -
Debtor(s):
Essam R. Hanna Represented By Julie J Villalobos
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 37
- NONE LISTED -
Debtor(s):
Jeffrey Michael Berger Represented By Jenny L Doling
Joint Debtor(s):
Debra Lynn Berger Represented By Jenny L Doling
Movant(s):
Debra Lynn Berger Represented By Jenny L Doling Jenny L Doling
Jeffrey Michael Berger Represented By Jenny L Doling Jenny L Doling Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 117
4/27/17
Background:
On May 4, 2015, Vonetta Mays ("Debtor") filed a Chapter 13 voluntary petition. On August 8, 2015, Debtor’s Chapter 13 plan was confirmed. On December 28, 2015, Persolve LLC ("Creditor") filed a claim in the amount of $8,181.55 ("Claim 5"). On March 24, 2017, Debtor filed an objection to Claim 4. The Court notes that Debtor appears to not have used the mandatory forms.
The basis for Debtor’s objection is that Debtor received a discharge on January 23, 2014. Claim 4 arises from debt incurred between 2008 and 2010. While Creditor recorded a lien on Debtor’s home on May 17, 2013, the Court avoided that lien on January 30, 2017.
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Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
12:30 PM
Debtor’s previous discharge extinguished personal liability in relation to Claim 4. See 11 U.S.C. §§ 524(a)(1) and 727(b). Creditor’s lien was avoided pursuant to court order on January 30, 2017. Therefore, the claim is void.
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Vonetta M Mays Represented By Christopher J Langley
Movant(s):
Vonetta M Mays Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 4 EH
Docket 116
- NONE LISTED -
Debtor(s):
Vonetta M Mays Represented By Christopher J Langley
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 3/23/17 Also # 7 - 9 EH
Docket 61
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Joseph Robert Byrne Represented By Jenny L Doling Jenny L Doling Summer M Shaw Summer M Shaw
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 60
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Joseph Robert Byrne Represented By Jenny L Doling Jenny L Doling Summer M Shaw Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
12:30 PM
Also # 6 - 9 EH
Docket 56
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 65
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 8/4/16, 9/29/16, 11/3/16, 12/15/16 Also # 11
EH
Docket 23
- NONE LISTED -
Debtor(s):
Milorad Mileusnic Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Sonja Mileusnic Represented By Jenny L Doling Summer M Shaw
Movant(s):
Sonja Mileusnic Represented By Jenny L Doling Summer M Shaw
Milorad Mileusnic Represented By Jenny L Doling Jenny L Doling Summer M Shaw
12:30 PM
Trustee(s):
Summer M Shaw
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 6/23/16, 8/4/16, 9/29/16,11/3/16, 12/27/16
Also # 10 EH
Docket 0
- NONE LISTED -
Debtor(s):
Milorad Mileusnic Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Sonja Mileusnic Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 9/29/16, 11/3/16, 12/15/16, 2/16/17, 3/30/17
EH
Docket 0
- NONE LISTED -
Debtor(s):
Natasha Marie Kiehl Represented By Bill J Parks
Joint Debtor(s):
Phillip Nathan Kiehl Represented By Bill J Parks
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: LOGIX FEDERAL CREDIT UNION
From: 1/31/17, 3/23/17 EH
Docket 31
01/31/2017
Service: Proper Opposition: Yes
The Motion indicates that the basis for relief is a lack of adequate protection and the declining value of the vehicle. However, no evidence is provided to support either basis for relief. Separately, based on the evidence provided and the attached declaration, it appears that Movant actually intended to seek relief based on a postpetition or post-confirmation default.
The original confirmed chapter 13 plan entered on December 8, 2016, made no mention of the 2010 Chevrolet Suburban or Movant. However, the January 11, 2017, Amended Order Confirming Chapter 13 Plan (entered after the Movant had already filed its Motion for Relief from Stay) specifically indicated that Debtor would make direct payments to Movant. The Debtor concedes that there was an error on his part in the drafting of the plan. However, it is not clear from the Debtor’s response why the December payment which would have come due on December 28, 2016, was not made, although it appears implied that the December payment was included in the plan payment. Movant has established cause under § 362(d)(1) to lift the stay based on
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post-confirmation default. APPEARANCES REQUIRED.
Debtor(s):
Juan Jose Franco Represented By Paul Y Lee
Movant(s):
Logix Federal Credit Union Represented By Lazaro E Fernandez
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 15 EH
Docket 29
4/27/17
Background:
On October 1, 2016, Chase Chung ("Debtor") filed a Chapter 13 voluntary petition. On November 21, 2016, Debtor’s Chapter 13 plan was confirmed.
On February 14, 2017, Ocwen Loan Servicing ("Ocwen") filed a secured claim in the amount of $107,123.68 ("Claim 7"), which includes $52,722.19 in arrears. On March 28, 2017, Debtor filed an objection to Ocwen’s secured claim. The Court notes that Debtor failed to use the mandatory claim objection form.
Debtor objects to the claim as late-filed and inaccurate. Nevertheless, Debtor consents to continuing to pay $20,030 through the plan, representing Debtor’s estimate of the arrears at the petition date.
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Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)).
"The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
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Analysis:
Here, the claims bar date was February 1, 2017, and Ocwen did not file Claim 7 until February 14, 2017. Therefore, the claim was filed late.
11 U.S.C. § 502(b)(9) states:
Except as provided in subsections (e)(2), (f), (g), (h) and (i) of this section, if such objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim in lawful currency of the United States as of the date of the filing of the petition and shall allow such claim in such amount, except to the extent that –
(9) proof of such claim is not timely filed, except to the extent tardily filed as permitted under paragraph (1), (2), or (3) of section 726(a) of this title or under the Federal Rules of Bankruptcy Procedure . . .
There is no indication that the five subsections of § 502(b) are applicable here, and
§ 726 is not applicable to Chapter 13 proceedings. The Federal Rules of Bankruptcy Procedure also do not provide an exception here. As noted by Debtor, "the Ninth Circuit has repeatedly held that the deadline to file a proof of claim in a Chapter 13 proceedings is ‘rigid,’ and the bankruptcy court lacks equitable power to extend this deadline after the fact." In re Barker, 839 F.3d 1189, 1197 (9th Cir. 2016). While there are limited exceptions relating to the informal proof of claim doctrine, Ocwen has not made any argument that those exceptions apply here.
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Additionally, the Court deems failure to oppose to constitute consent to the relief requested pursuant to Local Rule 9013-1(h).
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPERANCES WAIVED. Movant required to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Chase D Chung Represented By Daniel C Sever
Movant(s):
Chase D Chung Represented By Daniel C Sever Daniel C Sever Daniel C Sever Daniel C Sever
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 14 EH
Docket 24
- NONE LISTED -
Debtor(s):
Chase D Chung Represented By Daniel C Sever
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 51
On October 24, 2016, Patricia Morales ("Debtor") filed a Chapter 13 voluntary petition. On January 24, 2017, Debtor’s Chapter 13 plan was confirmed.
On April 3, 2017, Trustee’s motion to dismiss was granted after no opposition was properly filed. On April 6, 2017, Debtor filed a motion to vacate dismissal. Trustee filed his disapproval on April 10, 2017. On April 21, 2017, Debtor filed a late reply that was not served
Trustee’s comments are based on both technical and substantive issues. Trustee states that both service and notice are inadequate. Substantively, Trustee states that Debtor’s assertion that she was current with plan payments is incorrect, and further states Debtor has never been current with plan payments. Furthermore, Trustee asserts that Debtor failed to provide tax returns.
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As a preliminary matter, the Court notes that Debtor’s motion contains numerous factual and legal deficiencies. The heading of the motion improperly cites a string of provisions, some of which are inapplicable to the case at issue. The motion itself contains a recitation of the factual background and a brief recitation of the string of legal provisions cited, but is devoid of any meaningful application of the law to the facts of this case.
Debtor states that her counsel notified her that a motion to dismiss was filed, but that she did not respond because she thought she had made all plan payments. This assertion is contradicted by the case’s docket. Debtor did, in fact, file a late opposition, prior to the entry of the order, which contained a declaration by Debtor. The matter was not placed on calendar, however, because the opposition contained hearing information and Debtor did not respond to the notice to filer.
The second factual assertion made by Debtor, that she was current with her payments, is denied by Trustee, who states that her payments bounced, and that she appeared to have issued a "stop payment" on the funds. While Debtor has filed additional evidence of tendered payment in her reply, the Court cannot ascertain whether the funds were sent, or received, by Trustee. More importantly, however, there is no description of how those payments are relevant to the analysis for a Rule 60(b) motion.
Debtor’s reply also states that Debtor has fixed the proof of service and notice issues. That assertion is not supported by a review of the Court’s docket. There is no amended proof of service or notice docketed, and Debtor’s reply does not itself include a proof of service.
The approach taken by Debtor and her counsel is concerning. While there may be merit in bringing a §60(b) motion based on the technical error in Debtor’s opposition, that is not the path that was chosen. Instead, Debtor has asserted facts which are incompatible with, or, at the very least, misrepresent the record.
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Additionally, Debtor’s legal argument is unclear. Debtor appears to primarily rely on Fed. R. Bankr. P. Rule 9023, which deals with amendments of judgments, and states that it would be a manifest injustice for the order to stand. This legal provision is not applicable in this situation. See Harrington v. City of Chicago, 433 F.3d 542, 546 (7th Cir. 2006) (in distinguishing between Fed. R. Civ. P. Rule 59(e) and Rule 60(b), the Court stated "Rule 59(e) does not provide a vehicle for a party to undo its own procedural failures").
Finally, Debtor mechanically cites Fed. R. Civ. P. Rule 60(b)(6) and § 105, and appears to argue that it would be manifestly unjust to subject Debtor to collection law suits and garnishments based on the facts of the case.
The Court finds Debtor’s account of the facts of the case to lack credibility. Of the two factual assertions made by Debtor, one is contradicted by the docket and the other is denied by the Trustee. Because the motion contains no legal analysis and misrepresents facts, the Court will deny the motion.
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Patricia Morales Represented By Michael C Maddux
12:30 PM
Movant(s):
Patricia Morales Represented By Michael C Maddux
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
FROM: 3/23/17
Also # 17 EH
Docket 16
Summary of the Motion:
TENTATIVE
Trinity requests additional time to obtain an appraisal of the Property; and
Trinity asserts that the loan payoff statement provided by the Debtors as Exhibit "A" which sets forth the amount of the first mortgage is hearsay and alternatively, that it indicates there may have been a loan modification with the potential for loan forgiveness as to a portion of the loan principal
First, the Court is inclined to grant Trinity’s request for additional time. Separately, the Court overrules Trinity’s hearsay objection but finds that Trinity’s request for the Debtors to indicate whether any portion of the loan principal has been forgiven is reasonable.
APPEARANCES REQUIRED.
12:30 PM
Debtor(s):
Gilberto Herrera Represented By Todd L Turoci
Joint Debtor(s):
Monica Herrera Represented By Todd L Turoci
Movant(s):
Monica Herrera Represented By Todd L Turoci
Gilberto Herrera Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 16.10 EH
Docket 0
- NONE LISTED -
Debtor(s):
Gilberto Herrera Represented By Todd L Turoci
Joint Debtor(s):
Monica Herrera Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 3/30/17 Also # 19
EH
Docket 26
03/30/2017
BACKGROUND
On December 28, 2016, Frank and Barbara Horzen (collectively, "Debtors") filed their petition for chapter 13 relief. Rod Danielson is the duly appointed chapter 13 trustee ("Trustee").
On March 9, 2017, the Debtors filed a Motion for Appointment of Mrs.
Horzen as the "Next Friend" of Debtor Frank Horzen ("Motion"). The Motion is based on the Debtors’ assertion that Mr. Horzen lacks the capacity to make legal decisions and seeks authority for Mrs. Horzen to "execute all legal decisions" related to the bankruptcy, including permitting Mrs. Horzen to execute documents on behalf of Mr. Horzen. Notice was provided to all creditors and to the Trustee and United States Trustee. No opposition has been filed.
DISCUSSION
Fed. R. Bankr.P. 1004.1 allows "a representative, including a general guardian, committee, conservator, or similar fiduciary," to file a voluntary petition on behalf of an incompetent person.
The rule further provides that
[a]n infant or incompetent person who does not have a duly appointed representative may file a voluntary petition by next friend or guardian
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ad litem. The court shall appoint a guardian ad litem for an infant or incompetent person who is a debtor and is not otherwise represented or shall make any other order to protect the infant or incompetent debtor.
Rule 1004.1 is patterned after Fed.R.Civ.P. 17(c), which applies to adversary proceedings pursuant to Fed. R. Bankr.P. 7017. That rule provides that an incompetent person may sue "by a next friend or by a guardian ad litem" if the incompetent person does not have a duly appointed representative, and provides that "[t]he court must appoint a guardian ad litem—or issue another appropriate order—to protect a minor or incompetent person who is unrepresented in an action."
Cases interpreting Rule 17(c) look to the law of the state in which the subject is domiciled and follow the state's incompetency laws." In re Burchell, 2014 WL 1304635, at *1 (Bankr. N.D. Ohio 2014)(internal citations omitted). This court shall thus look to the California Probate Code’s § 811 which outlines the possible bases for a determination that a person is of unsound mind or lacks capacity to make a decision or do a certain act, including for example, incapacity to contract or to execute wills or trusts.
In support of the Motion, the Debtors have attached the Declaration of Barbara Horzen in which she details the numerous diagnoses of Mr. Horzen made since June 2016 indicating his dementia diagnosis. Particularly persuasive is the correspondence attached as Exhibit E to the Motion, and authenticated by the declaration of Barbara Horzen, which indicates the opinion of Mr. Horzen’s Doctor, Sophie K. Chwa, and states that Mr. Horzen is incompetent to make decisions "including those of legal consequence." Notwithstanding this diagnosis, § 811(d) provides that "the mere diagnosis of a mental or physical disorder shall not be sufficient in and of itself to support a determination that a person is of unsound mind or lacks the capacity to do a certain act." Instead, California law requires evidence of specific deficits and a link between the identified deficits and the acts that the allegedly incompetent person would otherwise have capacity to perform. The types of deficiencies are outlined in § 811 as follows:
Alertness and attention, including, but not limited to, the following:
Level of arousal or consciousness.
Orientation to time, place, person, and situation.
Ability to attend and concentrate.
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Information processing, including, but not limited to, the following:
Short- and long-term memory, including immediate recall.
Ability to understand or communicate with others, either verbally or otherwise.
Recognition of familiar objects and familiar persons.
Ability to understand and appreciate quantities.
Ability to reason using abstract concepts.
Ability to plan, organize, and carry out actions in one's own rational self- interest.
Ability to reason logically.
Thought processes. Deficits in these functions may be demonstrated by the presence of the following:
Severely disorganized thinking.
Hallucinations.
Delusions.
Uncontrollable, repetitive, or intrusive thoughts.
Ability to modulate mood and affect. Deficits in this ability may be demonstrated by the presence of a pervasive and persistent or recurrent state of euphoria, anger, anxiety, fear, panic, depression, hopelessness or despair, helplessness, apathy or indifference, that is inappropriate in degree to the individual's circumstances.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to CONTINUE the hearing on the Motion for the Debtors to either provide (1) supplemental evidence establishing that the Mr. Horzen is unable to undertake the actions required in connection with the Debtors’ duties in a chapter 13 case; or (2) evidence that Counsel has explained to Mr. Horzen that a bankruptcy is being filed in his name and that Mr. Horzen has consented to Mrs. Horzen’s appointment as his representative.
As an aside, the Court notes that as the power of attorney provided is of general application and does not specifically permit actions to be taken by Mrs. Horzen in the event of a bankruptcy, the power of attorney does not necessarily provide Mrs. Horzen with the requisite authority.
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APPEARNCES REQUIRED.
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
Movant(s):
Barbara A Horzen Represented By Paul Y Lee
Frank A Horzen Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 18 EH
Docket 0
- NONE LISTED -
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
HOLDING DATE
From: 2/16/17, 3/23/17 Also # 21 - 22
EH
Docket 18
Summary of the Motion:
$410,000
On April 7, 2014, the IRS filed a notice of federal tax lien with the Los Angeles County Recorder’s Office, and, on April 11, 2014, filed a notice of federal tax lien with the Riverside County Recorder’s Office. This lien related to unpaid taxes for the periods 2006-2008 and 2012. On April 13, 2016, the IRS filed another notice of federal tax lien with the Riverside County Recorder’s Office relating to unpaid taxes for the tax years 2011 and 2013.
On January 9, 201, Debtor filed a Chapter 13 voluntary petition. On January 24, 2017, Debtor filed a lien avoidance motion pursuant to 11 U.S.C. § 506(d) seeking to avoid
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the lien recorded in April 2016. After stipulating to a continuance, the IRS filed its opposition on March 9, 2017.
The IRS raises three arguments in its opposition. First, the IRS questions the legitimacy of Debtor’s property valuation, noting that Zillow identifies the value of the real property as $555,661. Second, the IRS argues that § 506(d) only applies to invalid claims. The IRS raises a third argument that is unclear and does not appear to be relevant to this hearing.
Regarding its first argument, the IRS asserts that "[t]he Debtor may not seek to avoid a lien under Section 506(d) without first obtaining a valuation of the secured claim under Section 506(a)." The IRS cites Blendheim for its proposition, however, Blendheim does not support the proposition. Blendheim does not discuss valuation of at all. Additionally, Debtor has obtained a valuation of the subject real property.
While the IRS has indicated it believes the valuation is low, the IRS has not provided any counter-evidence, nor did the IRS attach the Zillow valuation to its opposition.
Furthermore, the valuation hinted at by the IRS is still nearly $250,000 lower than the value of the first trust deed. The Court will not entirely disregard Debtor’s valuation under these circumstances.
Regarding its second argument, the IRS seems to argue, in an indirect manner, that the Supreme Court’s reasoning in Dewsnup is applicable in the Chapter 13 context. While there is some language in Blendheim to support the IRS’s contention, Blendheim did not resolve the issue. See In re Blendheim, 803 F.3d 477, 489-90 (9th Cir. 2015) ("Dewsnup’s holding clarifies that § 506(d)’s voidance mechanism turns on claim allowance."). First of all, Blendheim’s holding does not distinguish between Chapter 7 and Chapter 13 cases: the conclusion that the lien could be avoided in Blendheim was a result of Dewsnup’s consideration of when a lien could be avoided in a Chapter 7 case. Additionally, the authority for the Court’s quoted language above is a Supreme Court case dealing with a Chapter 7 proceeding, Bank of America, N.A. v. Caulkett, 135 S. Ct. 1995 (2015). In Caulkett, the Supreme Court merely clarified that Dewsnup’s holding applied to wholly underwater liens, as well as party underwater liens. Id. at 1998-99. Courts have typically construed Caulkett narrowly. See, e.g., In re Larson, 544 B.R. 883, 885-86 (Bankr. W.D. Wis. 2016).
While the Supreme Court has settled the question of when § 506(d) can be used in
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Chapter 7 cases, the analysis in Chapter 13 proceedings is different. This is because 11 U.S.C. § 1322(b)(2) is applicable to Chapter 13 proceedings, and allows a debtor to: "modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor’s principal residence, or of holders of unsecured claims, or leave unaffected the rights of holders of any class of claims." While Dewsnup interpreted the meaning of secured claim in § 506(d) to be different than that used in § 506(a), see Caulkett, 135 S. Ct. 1995 at 1998, Dewsnup’s interpretation has not been applied to § 1322(b)(2). See In re Zimmer, 313 F.3d 1220, 1223 (9th Cir. 2002) ("The position adopted by a majority of courts is that the antimodification clause does not apply to wholly unsecured homestead liens, but a substantial minority of courts has taken the contrary position"; Ninth Circuit followed the majority approach). Therefore, Chapter 13 debtors can use § 1322(b)(2) to avoid a wholly underwater junior lien on their principal residence.
As noted by the IRS, "[t]he lien strip procedure in a chapter 13 case is a two-step process." In re Boukatch, 533 B.R. 292, 295 (B.A.P. 9th Cir. 2015). The two-step process, however, is embodied in the form motion to avoid the lien. And here, while the IRS references Zillow to suggest that Debtor's valuation may not be accurate, the stated valuation referenced by the IRS makes it apparent that no part of the IRS’s claim is secured under § 506(a).
TENTATIVE
The Court is inclined to GRANT the motion.
APPEARANCES REQUIRED.
Debtor(s):
Michael Anthony Rivera Represented By Michael A Rivera
Movant(s):
Michael Anthony Rivera Represented By Michael A Rivera
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 20 - 22 EH
Docket 44
3/23/17
Background:
On January 9, 2017, Michael Rivera ("Debtor") filed a Chapter 13 voluntary petition. On February 2, 2017, the IRS filed Claim #1 in the amount of $45,102.99, of which
$29,751.14 was characterized as secured, and $10,152.79 was characterized as priority. On February 13, 2017, Debtor filed a claim objection. On March 8, 2017, the IRS filed its opposition.
The IRS identifies unpaid income tax for the years 2006-2008, 2011-2013, and 2015- 2016. The IRS additionally identifies taxes owing due to Debtor’s failure to file Form 940 Employer’s Annual Federal Unemployment ("FUTA") for tax years 2011-2017. Furthermore, the IRS identifies taxes owing due to Debtor’s failure to file Form 41 Employer’s Quarterly Federal Tax Return ("FICA") for 2011(1Q) to 2017 (1Q).
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While Debtor concedes liability regarding the federal income taxes owing, Debtor disputes liability for the FUTA and FICA taxes. Specifically, Debtor states that the tax ID number listed on the IRS’s proof of claim is not the tax identification number of himself or his corporation, that he was not individually obligated to file any FUTA or FICA taxes, and that his corporation filed the appropriate FUTA or FICA taxes during the time in question.
The IRS responds by indicating that Debtor’s law office is referenced with the tax identification number provided, and that this law office is referenced with Debtor’s social security number.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden of production shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (B.A.P. 9th Cir. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at
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1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting
Allegheny Int’l, 954 F.2d at 173-74).
Analysis:
Local Rule 3007-1(c)(1) requires that: "An objection to claim must be supported by admissible evidence sufficient to overcome the evidentiary effect of a properly documented proof of claim executed and filed in accordance with FRBP 3001." In the context of tax claims, the Ninth Circuit has stated the following:
A bankruptcy court adjudicating a tax claim by the IRS must apply the burden- of-proof rubric normally applied under tax law. In an action to collect taxes, the government bears the initial burden of proof. That burden is satisfied by the IRS’s deficiency determinations and assessments for unpaid taxes, which are presumed correct so long as they are supported by a minimal factual foundation. However, a showing by the taxpayer that a determination is arbitrary, excessive or without foundation shifts the burden of proof back to the IRS. Thus, once the debtor rebuts the presumption, the burden reverts to the IRS to show that its determination was correct.
In re Olshan, 356 F.3d 1078, 1084 (9th Cir. 2004) (quotations and citations omitted); see also Raleigh v. Ill. Dept. of Revenue, 530 U.S. 15, 21 (2000) ("[T]he very fact that the burden of proof has often been placed on the taxpayer indicates how critical the burden rule is, and reflects several compelling rationales: the vital interest of the government in acquiring its lifeblood, revenue; the taxpayer’s readier access to the
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relevant information, and the importance of encouraging voluntary compliance by giving taxpayers incentives to self-report and to keep adequate records in case of dispute.").
Rebutting the claim of the IRS requires more than a blanket assertion that the assessment of the IRS is incorrect. See, e.g., In re Forte, 234 B.R. 607, 618 (Bankr.
E.D.N.Y. 1999) ("The Debtor may not rebut the prima facie case merely by stating that the amount of taxes claimed by the Service is not correct; the Debtor must produce some evidence to support that statement."). Here, Debtor has stated that the tax identification number provided by the IRS is incorrect, and that the FICA and FUTA taxes were paid. Consistent with the Supreme Court’s Raleigh holding, it is Debtor that has ready access to the evidence that supports those points, but he has failed to provide such evidence. In the context of a tax claim, an unadorned assertion that the IRS’s assessment relates to the wrong entity does not constitute "facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves," Lundell, 223 F.3d at 1039, especially when considering that Debtor has declined to provide documentary support for his assertion.
Tentative Ruling
The Court is inclined to OVERRULE the objection without prejudice.
APPEARANCES REQUIRED.
Debtor(s):
Michael Anthony Rivera Represented By Michael A Rivera
Movant(s):
Michael Anthony Rivera Represented By Michael A Rivera
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 20 - 21 EH
Docket 0
- NONE LISTED -
Debtor(s):
Michael Anthony Rivera Represented By Michael A Rivera
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 25 - 26 EH
Docket 15
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling
Movant(s):
Semone Ramone Monroe Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 16
- NONE LISTED -
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling
Movant(s):
Semone Ramone Monroe Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 24 - 25 EH
Docket 0
- NONE LISTED -
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Michael Robert Tucker Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Daniel S Neesan Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Case dismissed: 3/13/17 EH
Docket 16
4/27/17
BACKGROUND
On February 21, 2017, Ernie Macias ("Debtor") filed a Chapter 13 voluntary petition. The case was dismissed for failure to file information on March 13, 2017.
On March 24, 2017, UST filed a motion to disgorge attorney’s fees under 11 U.S.C.
§ 329. The motion is based on the failure to Debtor’s counsel, Alon Darvish ("Counsel") to file the required statement of attorney compensation, which UST asserts that Counsel has regularly failed to do.
DISCUSSION
11 U.S.C. § 329 states:
Any attorney representing a debtor in a case under this title, or in
12:30 PM
connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the
compensation paid or agreed to be paid, if such payment or agreement was made after on year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation.
Fed. R. Bankr. P. Rule 2016(b) states:
Every attorney for a debtor, whether or not the attorney applies for compensation, shall file and transmit to the United States trustee within 14 days after the order for relief, or at another time as the court may direct, the statement required by § 329 of the Code including whether the attorney has shared or agreed to share the compensation with any other entity. The statement shall include the particulars of any such sharing or agreement to share by the attorney, but the details of any agreement for the sharing of the compensation with a member or regular associate of the attorney’s law firm shall not be required. A supplemental statement shall be filed and transmitted to the United States trustee within 14 days after any payment or agreement not previously discussed.
The Ninth Circuit has stated:
To facilitate the court’s policing responsibilities, the Bankruptcy Code and Federal Rules of Bankruptcy Procedure impose several disclosure requirements on attorneys who seek to represent a debtor and who seek to recover fees. Thus, failure to comply with the disclosure rules is a
sanctionable violation, even if proper disclosure would have shown that the attorney had not actually violated any Bankruptcy Code provision or any Bankruptcy Rule.
In re Park-Helena Corp., 63 F.3d 877, 880 (9th Cir. 1995). Furthermore, "[T]he disclosure rules are applied literally, even if the results are sometimes harsh.
Negligent or inadvertent omissions ‘do not vitiate the failure to disclose.’" Id. at 881.
12:30 PM
When an attorney fails to satisfy the disclosure requirements of § 329, the Court is authorized to order disgorgement of fees. See, e.g., In re Lewis, 113 F.3d 1040, 1045 (9th Cir. 1997) ("An attorney’s failure to obey the disclosure and reporting requirements of the Bankruptcy Code and Rules gives the bankruptcy court the discretion to order disgorgement of attorney’s fees. In reaching this conclusion, we do not mean to say that the excessiveness or reasonableness of those fees is irrelevant in all cases; in appropriate circumstances, a bankruptcy court should inquire into these subjects as part of deciding whether and to what extent to order disgorgement."); see also In re Lee, 1999 WL 61900 (9th Cir. 1999) ("An attorney’s failure to obey the disclosure and reporting requirements of the Bankruptcy Code and Rules gives the bankruptcy court the discretion to order disgorgement of attorney’s fees."). Here, UST states that Counsel has repeatedly violated the disclosure requirements in proceedings before this Court and, therefore, disgorgement is appropriate. Under 11 U.S.C. § 105
(2010), the Court is empowered to "issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title." Therefore, the Court has the authority to issue an order directing disgorgement of fees and such an order is appropriate in this case.
Furthermore, the failure of Counsel to oppose may be deemed consent pursuant to Local Rule 9013-1(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion, directing Counsel to file a statement of attorney compensation and ordering disgorgement of the entirety of the fees paid by Debtor.
APPEARANCES REQUIRED.
12:30 PM
Debtor(s):
Ernie Macias Represented By
Alon Darvish
Movant(s):
United States Trustee (RS) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Teresa Julia Chavez Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Brian Scott Bunnell Represented By Todd L Turoci
Joint Debtor(s):
Wendi Lynn Bunnell Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Mark David Boughton Represented By Nicholas M Wajda
Joint Debtor(s):
Crystal Elaine Boughton Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Carrie Lynne Harmon Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 15
Summary of the Motion:
TENTATIVE
The Court is inclined to GRANT the motion upon receipt of a Chapter 13 discharge.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Michael Ray Sandoval Represented By Michael E Clark
Movant(s):
Michael Ray Sandoval Represented By Michael E Clark
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 34 EH
Docket 0
- NONE LISTED -
Debtor(s):
Michael Ray Sandoval Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Lillian Lorraine Glenn Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Aaron Wayne Parker Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Cecilia Carranza Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Deborah Althea Williams Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Susan Elizabeth Duynstee Represented By Richard E Chang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Tinoco Represented By
Juanita V Miller
Joint Debtor(s):
Monica Tinoco Represented By Juanita V Miller
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joe Gomez Represented By
Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Larry Patrick Egan Represented By Dana Travis
Joint Debtor(s):
Elizabeth Ann Egan Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Veronica Salinas Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Mohamed Adel Kamel Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gregory Dwight Vit Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Camacho Payan Represented By
Ramiro Flores Munoz
Joint Debtor(s):
Erika Vanessa Payan Represented By
Ramiro Flores Munoz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Tommy Leroy Weathers Sr Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Eduardo Aguilera Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Hermilo Saavedra Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Robert James Budzinski Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ryan Jess Gomez Represented By Babak Samini
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Aaron Lawrence Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Cynthia Ann Sawyer Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Michelle J Meredith Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joshua Lawrence Ferguson Represented By Stephen H Darrow
Joint Debtor(s):
Wendy Mae Ferguson Represented By Stephen H Darrow
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Matthew Travis Olson Represented By Dana Travis
Joint Debtor(s):
Lori Lynn Olson Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Hari Ram Represented By
Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Caesar A Rodriguez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sam Venero Represented By
Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sarah F Baldwin Pro Se
Joint Debtor(s):
Omar Deckard Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Veronica A Mendoza Represented By Stephen S Smyth William J Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Loan Servicing, LLC, WMC Mortgage Corp Also # 64
EH
Docket 22
Summary of the Motion:
TENTATIVE
The Court is inclined to GRANT the motion upon receipt of a Chapter 13 discharge.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Dianne F. Simmons Represented By Michael Smith
12:30 PM
Movant(s):
Dianne F. Simmons Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 63 EH
Docket 0
- NONE LISTED -
Debtor(s):
Dianne F. Simmons Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Paulo Cesar Machuca Represented By Scott Kosner
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Roberto Iniguez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Francine Irene McGwire Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Paul Davis Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
William J Schaefer Represented By Patricia M Ashcraft
Joint Debtor(s):
Jennifer L. Schaefer Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Darla Bell Represented By
Andrew Nguyen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kenneth Davis Represented By Andrew Nguyen
Joint Debtor(s):
Shirley Davis Represented By Andrew Nguyen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Brett Drake Represented By
Andrew Nguyen
Joint Debtor(s):
Lauren Drake Represented By Andrew Nguyen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sergio Santos Represented By Andrew Nguyen
Joint Debtor(s):
Guadalupe Santos Represented By Andrew Nguyen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kyung Sang Lee Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joseph Andrew Rodriguez Represented By Hovanes Margarian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
David Paul Zamarripa Represented By Javier H Castillo
Joint Debtor(s):
Ruth Zamarripa Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 116
- NONE LISTED -
Debtor(s):
Ernest B Galante Represented By
Dale Parham - INACTIVE - Michael Smith
Joint Debtor(s):
Susan D Galante Represented By
Dale Parham - INACTIVE - Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 97
- NONE LISTED -
Debtor(s):
Kenneth Vernell Hawkins Represented By
Craig J Beauchamp
Joint Debtor(s):
Brenda A Hawkins Represented By
Craig J Beauchamp
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:31 PM
Docket 137
- NONE LISTED -
Debtor(s):
Clarence White Represented By Steven A Wolvek
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 151
- NONE LISTED -
Debtor(s):
Vivian Munson Represented By Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 207
- NONE LISTED -
Debtor(s):
Jose N Recinos Represented By Michael Smith
Joint Debtor(s):
Patricia Recinos Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 72
- NONE LISTED -
Debtor(s):
Michael Lee Barnes Represented By Todd L Turoci
Joint Debtor(s):
Belinda Ann Barnes Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 39
- NONE LISTED -
Debtor(s):
Sukhedev Singh Chahal Represented By Marjorie M Johnson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 83
- NONE LISTED -
Debtor(s):
Sean A. Davis Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 59
- NONE LISTED -
Debtor(s):
Adrienne J Garcelli Represented By Andy C Warshaw
Joint Debtor(s):
Paul Garcelli Represented By
Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 42
- NONE LISTED -
Debtor(s):
Joanne Casillas Represented By Paul Horn
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 35
- NONE LISTED -
Debtor(s):
Valicia LaShawn Fennell Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 23
- NONE LISTED -
Debtor(s):
Arturo Villagrana Represented By
Raj T Wadhwani
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 41
- NONE LISTED -
Debtor(s):
Darryl R Brown Represented By
M Wayne Tucker
Joint Debtor(s):
Kimberly J Brown Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 18
- NONE LISTED -
Debtor(s):
Margherita Olney Represented By
M Wayne Tucker
Trustee(s):
Steven M Speier (TR) Pro Se
12:31 PM
Docket 27
- NONE LISTED -
Debtor(s):
Donald L Maddox Represented By Michael Smith
Joint Debtor(s):
Lisa A Maddox Represented By Michael Smith
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 27
- NONE LISTED -
Debtor(s):
Fabiola Puttre Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 45
- NONE LISTED -
Debtor(s):
Jesus Danny Ontiveros III Represented By Gary S Saunders
Joint Debtor(s):
Marie Irene Ontiveros Represented By Gary S Saunders
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 23
- NONE LISTED -
Debtor(s):
Nicholas Asamoa Represented By Stephen S Smyth William J Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 20
- NONE LISTED -
Debtor(s):
Mike P Cardenas Represented By Michael Smith
Joint Debtor(s):
Patricia I Cardenas Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 59
- NONE LISTED -
Debtor(s):
Cynthia L Tucker Represented By Claudia L Phillips
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 24
- NONE LISTED -
Debtor(s):
Jennifer Lynn Anderson Represented By Steven A Alpert
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 30
- NONE LISTED -
Debtor(s):
Cresencio Villamayor Irasusta III Represented By
Carey C Pickford
Joint Debtor(s):
Jennifer P Irasusta Represented By Carey C Pickford
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 33
- NONE LISTED -
Debtor(s):
Marcos W Rocha Represented By Michael Smith
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
12:31 PM
Docket 25
- NONE LISTED -
Debtor(s):
Barbara Rammell Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 27
- NONE LISTED -
Debtor(s):
Jerome D Williams Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK TURST NA AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST, BY CALIBER HOME LOANS
EH
Docket 98
05/02/17
Service: Proper Opposition: Yes
Movant has established sufficient grounds to support relief from stay. Debtors dispute, without evidence, that they are behind 10 payments, and indicate that they will propose an APO and/or provide proof of payments made.
APPEARANCES REQUIRED.
Debtor(s):
James J Alvarado Represented By
Dale Parham - INACTIVE - Michael Smith
Joint Debtor(s):
Pamela P Alvarado Represented By
Dale Parham - INACTIVE - Michael Smith
Movant(s):
U.S. Bank Trust, N.A. as Trustee for Represented By
10:00 AM
Trustee(s):
Christina J O
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
EH
Docket 112
05/02/2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANTED as to relief requested under ¶¶ 3 and 12. DENIED as to request for APO as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Ramiro Delgado Flores Represented By Andrew S Bisom
Movant(s):
US Bank National Association, as Represented By
Christina J O
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
10:00 AM
MOVANT: US BANK TRUST NA AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST
EH
Docket 93
05/02/2017
Parties to address adequate protection discussions.
APPEARANCES REQUIRED.
Debtor(s):
Linda Ann Lynch Represented By
Andrew Edward Smyth William J Smyth Stephen S Smyth
Movant(s):
U.S. Bank Trust, N.A., as Trustee Represented By
Kristin A Zilberstein
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
EH
Docket 57
05/02/2017
Service: Proper Opposition: Yes
Debtors’ sole basis for opposition, without evidence, is that the Property is necessary to reorganization because it is a family home. However, the opposition fails to address the nonpayment of postpetition mortgage. Additionally, Debtors request that the request for waiver of the 14-day stay be denied for lack of cause. However, the failure of Debtors to pay Movant in approximately 11 months is a sufficient basis to warrant waiver of the 14-day stay. Based on the foregoing, the Court is inclined to GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and GRANT the relief requested under ¶3. The request for an APO is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Enrique Lopez Matias Represented By John F Brady Lisa H Robinson
Joint Debtor(s):
Teresa Duarte Matias Represented By John F Brady
10:00 AM
Movant(s):
Lisa H Robinson
U.S. Bank National Association Represented By Nina Z Javan Natalie E Zindorf Caren J Castle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 109
05/02/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANTED as to ¶¶ 3 and 12.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Simon E. Williams Represented By Jenny L Doling
Movant(s):
Nationstar Mortgage LLC as Represented By
Kristin A Zilberstein
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NATIONAL ASSOCIATION AS TRUSTEE FOR MORGAN STANLEY CAPITAL I INC TRUST 2006-HE1 MORTGAGE
EH
Docket 134
05/02/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) and GRANT waiver of 4001(a)(3) stay. Request under § 362 (d)(2) is DENIED based on lack of evidentiary support and request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Jose Ceja Jr Represented By
Dana Travis
Joint Debtor(s):
Chasity Ann Ceja Represented By Dana Travis
Movant(s):
Wells Fargo Bank, National Represented By Can Guner
10:00 AM
Trustee(s):
Sean C Ferry
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CITIMORTGAGE INC
From: 4/4/17 EH
Docket 31
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶ 2 and 3. DENY request under ¶ 14 for lack of cause shown.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Raul Navarrette Represented By Paul Y Lee
Joint Debtor(s):
Leslie Navarrette Represented By Paul Y Lee
10:00 AM
Movant(s):
CitiMortgage, Inc. Represented By
William F McDonald III Cheryl A Knapmeyer Carol M Turek
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ED KALEFF, FATHER JOSEPH SHEA
From: 3/28/17, 4/4/17 EH
Docket 17
03/28/2017
The Movants seek relief to pursue a state court action against the Debtor and related parties. At minimum, the Movants must attach the complaint for the Court to examine any potential impacts the Complaint may have on the instant bankruptcy case.
APPEARANCES REQUIRED.
Debtor(s):
Bingo Innovations of California, Inc. Represented By
Stuart G Steingraber
Movant(s):
Ed Kalef, Father Joseph Shea Pro Se
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 28
05/02/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and request under ¶3. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Christopher Robert Tyrrell Represented By Stephen D Brittain
Joint Debtor(s):
Micah Heather Wilcox Represented By Stephen D Brittain
Movant(s):
Wells Fargo Bank, N.A. Represented By Jason C Kolbe
10:00 AM
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: MAN THI NGUYEN aka WHITNEY NGUYEN
EH
Docket 12
05/02/2017
Movant seeks relief from the automatic stay to obtain a judgment for dissolution of marriage, "status only". The Trustee has indicated his nonopposition with the caveat that he opposes any relief as to any determination by the state court as issues regarding separate/community property divisions. Based on the Motion, it appears Movant is not seeking such determinations be made at this time. On this basis, the Court is inclined to GRANT the Motion under 11 U.S.C. § 362(d)(1) to the extent of seeking a judgment of divorce only and as to ¶6 of the request for relief.
APPEARANCES REQUIRED.
Debtor(s):
Hiep Huu Phan Represented By Toby T Tran
Movant(s):
Man Thi Nguyen Represented By Nam T Tran
Trustee(s):
Karl T Anderson (TR) Represented By
Misty A Perry Isaacson
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 10
05/02/2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Mahmud Ahmad Represented By
Rabin J Pournazarian
Movant(s):
Toyota Motor Credit Corporation as Represented By
Tyneia Merritt
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: FIRST TECH FEDERAL CREDIT UNION
EH
Docket 17
05/02/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Cynthia Higl Represented By
Jonathan R Preston
Movant(s):
First Tech Federal Credit Union Represented By Nichole Glowin
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 16
05/02/2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(4). Court finds that bankruptcy case was part of a scheme to hinder, delay and defraud creditors based on multiple bankruptcy filings and unauthorized transfers affecting this property. The Court finds bad faith as to the Debtor also noting that this is the second relief from stay granted in this case involving properties subject to multiple bankruptcies and/or unauthorized transfers. GRANT waiver of 4001(a)(3) stay. GRANT pursuant to ¶¶ 3, and 5. DENIED as to ¶ 4 (annulment) 9, 10, and 13 for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Christopher Wilkins Pro Se
Movant(s):
Wells Fargo Bank, N.A. Represented By Jason C Kolbe
10:00 AM
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: NISSAN-INFINITI LT
EH
Docket 9
05/02/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Dianne Ferreria Represented By Andrew Nguyen
Movant(s):
NISSAN-INFINITI LT. Represented By
Michael D Vanlochem
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
EH
Docket 25
- NONE LISTED -
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
Movant(s):
DSD Note Investors, LLC Represented By Leslie A Cohen
11:00 AM
From: 3/1/17 Also # 2
EH
Docket 440
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
From: 5/11/16, 6/8/16, 6/29/16, 8/31/16, 10/5/16, 11/9/16, 2/1/17
Also # 1 EH
Docket 322
05/11/2016
Based on the representations made to the Court by counsel for the Parties that negotiations are ongoing, and based on the consent of the Parties to a continuance, the Court shall CONTINUE the hearing on the Motion to June 8, 2016 at 11:00 a.m.
APPEARANCES ARE WAIVED.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
(Holding date)
MOVANT: JERRY WANG, STATE COURT RECEIVER
From: 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16, 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17
Also # 4 EH
Docket 423
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Movant(s):
Jerry Wang, Duly-Appointed State Represented By
Jeffrey K Garfinkle Anthony J Napolitano
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
(Holding date)
From: 10/1/14, 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 10/21/15, 11/18/15, 12/16/15, 1/13/16, 3/2/16, 5/4/16, 6/1/16, 9/28/16, 11/16/16,
2/1/17, 2/16/17
Also # 3 EH
Docket 333
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
(Holding date)
From: 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17
Also # 6 EH
Docket 10
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Movant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
11:00 AM
Jerry Wang Represented By
Franklin R Fraley Jr Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
From: 11/26/14, 1/26/15, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16, 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17
Also # 5 EH
Docket 1
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
Jerry Wang Represented By
Franklin R Fraley Jr
11:00 AM
Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
Docket 28
5/3/17
No opposition has been filed.
Service was Proper in the Circumstances.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1250 Trustee Expenses: $ 309.40
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Ana Beatriz Duran Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
11:00 AM
Docket 35
5/3/17
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1381.88 Trustee Expenses: $ 128.60
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Daniel Thomas Crowley Represented By Todd L Turoci
Joint Debtor(s):
Marissa Monique Smith Represented By Todd L Turoci
11:00 AM
Trustee(s):
John P Pringle (TR) Pro Se
11:00 AM
Docket 94
5/3/17
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee, Trustee’s Accountant, Trustee’ Attorney, and Trustee’s Realtor have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $23,408.83 Trustee Expenses: $148.60
Attorney Fees: $32,052.50 Attorney Costs:$2,275.33
Accountant Fees: $1,984.50 Accountant Costs: $ 232.20
Realtor Fees: $28,750.00
Trustee’s computation of compensation included an unexplained increase from
$17,658.83 to $18,588.24, the result of multiplying a portion of the requested fees by 20/19. The basis for this increase is unclear. Trustee’s fees have been reduced by the amount of the resulting increase, $929.41.
11:00 AM
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Tracy Evonne Wilson Represented By Phillip Myer
Trustee(s):
Charles W Daff (TR) Represented By Thomas H Casey Steve Burnell
11:00 AM
Docket 29
5/3/17
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,450 Trustee Expenses: $ 34.82
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Alan Roy Holt Represented By Steven A Alpert
Joint Debtor(s):
Barbara Jo Holt Represented By Steven A Alpert
11:00 AM
Trustee(s):
Arturo Cisneros (TR) Pro Se
11:00 AM
EH
Docket 46
- NONE LISTED -
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
11:00 AM
EH
Docket 31
BACKGROUND
On September 12, 2016, Debtor filed a Chapter 7 voluntary dismissal. A meeting of creditors was scheduled for October 18, 2016. On September 30, 2016, the case was dismissed for failure to file information, apparently because Debtor’s certificate of credit counseling was filed late and her statement of financial affairs was not signed. Debtor filed a motion to reconsider dismissal on October 11, 2016, and that motion was granted on December 1, 2016. A new meeting of creditors was set for January 10, 2017. Prior to the meeting of creditors, on January 6, 2017, Debtor received a discharge.
Debtor did not provide her tax returns at the meeting of creditors, and Trustee discovered that Debtor was married, which was not disclosed on the petition. The meeting of creditors was continued to February 9, 2017, at which time Debtor, again, failed to provide her tax returns; she also had not amended her schedules to account for the financial information of her husband. The meeting of creditors was continued to March 22, 2017. Debtor did not appear. On March 30, 2017, Trustee filed a motion to dismiss case and vacate discharge.
11:00 AM
DISCUSSION
Dismissal
11 U.S.C. § 707(a)(1) states:
The court may dismiss a case under this chapter only after notice and a hearing and only for cause, including –
Unreasonable delay by the debtor that is prejudicial to creditors
Here, Debtor has repeatedly failed to provide her tax returns or amend her petition to accurately portray the households’ financial situation. After being provided multiple opportunities to satisfy these obligations, Debtor failed to appear at the recent meeting of creditors. This constitutes unreasonable delay that is prejudicial to creditors, thus warranting dismissal.
Section 109(g) Bar
11 U.S.C. § 109(g)(1) states:
Notwithstanding any other provisions of this section, no individual or family farmer may be a debtor under this title who has been a debtor in a case pending under this title at any time in the preceding 180 days if –
the case was dismissed by the court for willful failure of the debtor to abide by orders of the court, or to appear before the court in proper
11:00 AM
prosecution of the case
Failure to provide required information or file complete and accurate schedules constitutes failure to properly prosecute the case. See, e.g., In re Nassar, 216 B.R. 606, 608 (Bankr. S.D. Tex. 1998) (citing In re Tomlin, 105 F.3d 933 (4th Cir. 1997)). Failure to appear at the meeting of creditors can constitute failure to abide by court orders. See, e.g., In re Arena, 81 B.R. 851, 854-55 (Bankr. E.D. Pa. 1988). Therefore, a 180 day § 109(g)(1) bar is appropriate.
Vacation of Discharge
Here, where dismissal of the case is appropriate, logic dictates that a prerequisite to such dismissal is a vacation of the discharge. The standard approach when a trustee has not been able to determine whether an objection to discharge is warranted (by the applicable deadline) is for the Trustee to file a motion requesting an extension of that deadline pursuant to Fed. R. Bankr. P. Rule 4004(b).
Trustee did not file such an extension here. Therefore, instead of filing an objection to discharge, Trustee is required to request a revocation of discharge. A request to revoke a discharge requires an adversary proceeding pursuant to Fed. R. Bankr. P. Rule 7001 (4).
In order for the discharge to be revoked or vacated, either an adversary proceeding must be commenced or an alternative mechanism justifying such action must be identified by Trustee. The discharge cannot be vacated based on the motion presented by Trustee here.
TENTATIVE RULING
11:00 AM
Trustee to discuss his approach to revoking discharge.
APPEARANCES REQUIRED.
Debtor(s):
Shannon Nicole Henderson Pro Se
Movant(s):
Robert Whitmore (TR) Pro Se
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
Docket 8
BACKGROUND
On March 9, 2017, Marco Bonilla ("Debtor") filed a Chapter 7 voluntary petition. Debtor had previously filed two Chapter 7 petitions in the previous ninety days, both of which were dismissed for failure to file information. On March 24, 2017, UST filed a motion to dismiss case with a re-filing bar.
DISCUSSION
Dismissal
11 U.S.C. § 707(b)(1) permits the Court to dismiss a Chapter 7 case for abuse. 11
U.S.C. § 707(b)(3)(A) states:
(3) In considering under paragraph (1) whether the granting of relief would be an abuse of the provisions of this chapter in a case in which the presumption in
11:00 AM
paragraph (2)(A)(i) does not arise or is rebutted, the court shall consider –
(A) whether the debtor filed the petition in bad faith
In determining whether a case should be dismissed under § 707(b)(3)(A), the Court considers the totality of the circumstances, but is ultimately instructed to consider whether "the debtor’s intention in filing a bankruptcy petition is inconsistent with the Chapter 7 goals of providing a ‘fresh start’ to debtors and maximizing the return to creditors." In re Mitchell, 357 B.R. 142, 154-55 (Bankr. C.D. Cal. 2006) (listing factors to be considered in making that determination).
The majority of the Mitchell factors are inapplicable when, as here, a debtor files a skeletal petition that does not provide the Court with sufficient information to apply the Mitchell test. Only factor seven (history of bankruptcy filings) and, possibly, factor nine (egregious behavior) can be assessed when a debtor files a skeletal petition. Both those factors weigh in favor of dismissal when, as here, a debtor repeatedly files skeletal petitions during a short period of time, and does not disclose previous filings. While § 707(a)(1) and (3) provide for dismissal when a debtor fails to fulfill his duties under the Bankruptcy Code, when a debtor repeatedly filed bankruptcy and fails to evince any attempt to comply with the filing requirements, it can be inferred, absent any indication to the contrary, that the debtor’s purpose in filing bankruptcy is not to take advantage of the fresh start. See, e.g., In re Craighead, 377 B.R. 648, 655 (Bankr.
N.D. Cal. 2007) ("Courts generally hold that when a debtor repeatedly files bankruptcy petitions and then repeatedly fails to file schedules or to comply with other requirements, this pattern of behavior is evidence of bad faith and an attempt to abuse the system."). Dismissal under § 707(b)(3) is appropriate in those circumstances.
Re-Filing Bar
The court is empowered to impose a refiling bar under 11 U.S.C. § 349(a). As Collier
11:00 AM
notes, courts’ analysis of this section is somewhat confused due to confounding "dismissal with prejudice" with "dismissal with injunction against future filings." Collier on Bankruptcy ¶ 349.02[3]; compare In re Garcia, 479 B.R. 488 (Bankr. N.D. Ind. 2012) (denying motion for dismissal with prejudice, but imposing three-year refiling bar) with In re Craighead, 377 B.R. 648 (Bankr. N.D. Cal. 2007) (appearing to equate dismissal with prejudice with an injunction against refiling).
There is also a circuit split concerning whether an injunction on refiling for more than 180 days is allowed under the Bankruptcy Code. Compare In re Frieouf, 938 F.2d 1099 (10th Cir. 1991) (180 days is maximum allowed length of refiling injunction) with Casse v. Key Bank Nat. Ass’n, 198 F.3d 327 (2nd Cir. 1999) (injunction against filing for more than 180 days permissible). 11 U.S.C. § 349(a) reads:
Unless, the court, for cause, orders otherwise, the dismissal of a case under this title does not bar the discharge, in a later case under this title, of debts that were dischargeable in the case dismissed; nor does the dismissal of a case under this title prejudice the debtor with regard to the filing of a subsequent petition under this title, except as provided in section 109(g) of this title.
The disagreement revolves around whether the qualifier "Unless, the court, for cause, orders otherwise" modifies the content after the semi-colon. In re Leavitt noted this disagreement, but since the court was dealing with a dismissal with prejudice, rather than an injunction against refiling, it did not resolve the issue. 209 B.R. 935, 942 (9th Cir. B.A.P. 1997). Within the Ninth Circuit, it appears the trend is to adopt the reasoning of the Second Circuit and allow injunctions for more than 180 days. See e.g. In re Velasques, 2012 WL 8255582 at *3 (Bankr. E.D. Cal. 2012).
Here, Debtor has filed three skeletal bankruptcies in the previous three months and failed to disclose the previous filings. As noted above, the Court has determined that Debtor’s behavior is sufficient to warrant dismissal for bad faith and the Court finds the requested one year refiling bar to be appropriate.
Moreover, Debtor’s failure to oppose is deemed consent to the relief requested pursuant to Local Rule 9013-1(h).
11:00 AM
TENTATIVE RULING
The Court is inclined to GRANT the motion.
APPEARANCES REQUIRED.
Debtor(s):
Marco Bonilla Pro Se
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
Trustee(s):
Charles W Daff (TR) Pro Se
2:00 PM
Adv#: 6:14-01288 Grobstein v. Wakefield
EH
Docket 0
- NONE LISTED -
Debtor(s):
David Wayne Wakefield Represented By Jordan Nils Bursch
Robert E Huttenhoff
Defendant(s):
Elise Wakefield Pro Se
Joint Debtor(s):
Elise Wakefield Represented By Jordan Nils Bursch
Robert E Huttenhoff
Plaintiff(s):
Howard Grobstein Represented By Alan W Forsley
Trustee(s):
Howard B Grobstein (TR) Represented By Alan W Forsley
2:00 PM
Adv#: 6:15-01303 Cisneros v. AMERICAN EXPRESS
A. Cisneros against AMERICAN EXPRESS. (Charge To Estate $350). For Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 1/13/16, 3/23/16, 5/25/16, 6/29/16, 8/31/16, 11/2/16, 2/1/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
AMERICAN EXPRESS Represented By Robert S Lampl Chad V Haes
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01308 Cisneros v. BWI CONSULTING, LLC et al
A. Cisneros against BWI CONSULTING, LLC, Black and White, Inc., BLACK AND WHITE BILLING COMPANY, BLACK AND WHITE INK, MEHRAN DEVELOPMENT CORPORATION. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(14 (Recovery of money/property - other))
From: 1/13/16, 3/23/16, 5/25/16, 7/27/16, 8/31/16, 11/2/16, 2/1/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
BLACK AND WHITE INK Pro Se
MEHRAN DEVELOPMENT Pro Se
BLACK AND WHITE BILLING Pro Se
BWI CONSULTING, LLC Pro Se
Black and White, Inc. Pro Se
2:00 PM
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:17-01050 United States Trustee for the Central District of v. Pryor
EH
Docket 1
- NONE LISTED -
Debtor(s):
Jack C Pryor Represented By
Stephen R Wade
Defendant(s):
Jack C Pryor Pro Se
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
2:00 PM
Adv#: 6:16-01200 Chicago Title Insurance Company v. Tyes
Docket 36
BACKGROUND
On April 25, 2016, Yolanda Tyes ("Defendant") filed a Chapter 7 voluntary petition. On August 1, 2016, Chicago Title Insurance Company ("Plaintiff") filed a complaint to determine nondischargeability of debt against Defendant. On September 13, 2016, the clerk entered default against Defendant. On September 28, 2016, Defendant filed a motion to set aside the entry of default, which was granted on December 1, 2016. On January 23, 2017, a scheduling order was entered. On April 12, 2017, Plaintiff filed a motion to amend the scheduling order.
The current discovery and dispositive motion deadlines in the case are May 15, 2017, and June 9, 2017, respectively. Plaintiff seeks a ninety-day extension of both deadlines. In support of its request, Plaintiff states that many of the parties upon which it has served discovery requests have failed to respond or offered incomplete responses, including Defendant. Plaintiff additionally states that because the facts underlying its state court judgment are over ten years old, it requires additional time to procure necessary information. Plaintiff states that Defendant rejected a ninety day extension, and has not been unresponsive regarding shorter extensions.
2:00 PM
DISCUSSION
Fed. R. Bankr. P. Rule 7016(a) incorporates Fed. R. Civ. P. Rule 16. Fed. R. Civ. P. Rule 16(b)(4) states: "A scheduled may be modified only for good cause and with the judge’s consent." The Ninth Circuit has previously stated: "Rule 16(b)’s ‘good cause’ standard primarily considers the diligence of the party seeking the amendment. The district court may modify the pretrial schedule ‘if it cannot reasonably be met despite the diligence of the party seeking the extension." Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992). In evaluating a motion to amend the scheduling order, a court may consider:
Whether the party was diligent in assisting the Court in creating a workable Rule 16 order;
whether the party’s noncompliance with the Rule 16 order occurred due to the development of matters that were reasonable unforeseen or anticipated at the time of the Rule 16 scheduling conference; or
whether the party was diligent in seeking to amend the Rule 16 order, once it became clear that he could not comply with the order.
Los Feliz Ford, Inc. v. Chrysler Group, LLC, 2012 WL 12886961 at *2 (C.D. Cal. 2012).
Plaintiff’s motion establishes that it has acted with diligence. The motion indicates that Plaintiff acted within a reasonable time after entry of the scheduling order, that some entities have been unresponsive or have delayed responding to discovery requests, and that in the process of completing discovery, Plaintiff has obtained new information that could reasonably be said to justify new discovery efforts, unanticipated at the time the scheduling order was entered.
2:00 PM
For those reasons, the Court concludes that Plaintiff has satisfied its burden. Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-(1)(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Yolanda Yvette Tyes Pro Se
Defendant(s):
Yolanda Yvette Tyes Pro Se
Movant(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Plaintiff(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
2:00 PM
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:16-01310 Swift Financial Corporation d.b.a. Swift Capital v. Castillo
EH
Docket 1
- NONE LISTED -
Debtor(s):
Francisco Javier Castillo Represented By Joseph M Tosti
Defendant(s):
Francisco Javier Castillo Pro Se
Plaintiff(s):
Swift Financial Corporation d.b.a. Represented By
Lazaro E Fernandez
Trustee(s):
Robert Whitmore (TR) Pro Se
2:00 PM
Adv#: 6:17-01053 Cisneros v. Simpson
EH
Docket 1
- NONE LISTED -
Debtor(s):
Armon Randolph Sharp Represented By Daniel King
Raymond W Stockstill
Defendant(s):
William J. Simpson Pro Se
Plaintiff(s):
Arturo Cisneros Represented By Toan B Chung
Trustee(s):
Arturo Cisneros (TR) Represented By Toan B Chung
2:00 PM
Adv#: 6:16-01309 Kercado v. Garrido
From: 3/1/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Carlos Garrido Represented By
Inez Tinoco-Vaca
Defendant(s):
Carlos Garrido Pro Se
Joint Debtor(s):
Maribelle Garrido Represented By
Inez Tinoco-Vaca
Plaintiff(s):
Maria Kercado Represented By Sergio A Rodriguez
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:17-01012 Simons v. Kim
§§ 544, 548(a)(1)(A) and (B), 550(a)(1) and (2); and, California Civil Code § 3439, et seq.] Nature of Suit: (13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other)),(91 (Declaratory judgment)
FROM: 3/29/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Mee Soon Kim Represented By Minh Duy Nguyen
Defendant(s):
Tae Young Kim Pro Se
Plaintiff(s):
Larry Simons Represented By
Michael W Davis
Trustee(s):
Larry D Simons (TR) Represented By David Seror Michael W Davis
2:00 PM
Adv#: 6:17-01051 ALJINDI v. US DEPARTMENT OF EDUCATION ET AL
EH
Docket 1
- NONE LISTED -
Debtor(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Defendant(s):
US DEPARTMENT OF Represented By Elan S Levey
Plaintiff(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Trustee(s):
Lynda T. Bui (TR) Pro Se
12:30 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
Also # 2 EH
Docket 13
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Anne Louise Goodman Represented By Edward T Weber
Douglas Edward Goodman Represented By Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
12:30 PM
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
EH
Docket 16
05/04/2017
BACKGROUND
On September 12, 2016, Douglas and Anne Goodman (collectively, "Debtors") filed their petition for chapter 13 relief.
On November 11, 2016, Mark and Natasha Reynoso (collectively, "Plaintiffs") filed a complaint seeking determination of the dischargeability of a debt pursuant to 11 U.S.C. § 523(a)(2)(A) (the "Complaint"). Specifically, Plaintiffs allege that in 2015, they purchased real property located at 1656 West Lisbon Street in Upland, CA (the "Property") from the Debtors, and that a sale was consummated on the misrepresentations of the Debtors’ agent, Theresa Mann, that the Property was 3,231 square feet while Plaintiffs assert that the Property is actually 2,713 square feet (or a difference of 518 square feet). Plaintiffs also assert that they were led to believe that a water leak in the upstairs bathroom had been repaired. Plaintiffs allege that the Debtors knew or should have known that their agent was making false and misleading representations to Plaintiffs.
On December 14, 2016, the Debtors filed a Motion to Dismiss the Complaint for failure to state a claim. The Court dismissed the Complaint with leave to amend on February 3, 2017. On February 28, 2017, the Plaintiffs filed their First Amended Complaint (the "FAC"). On March 31, 2017, the Debtors filed a Motion to Dismiss the FAC (the "Motion"). The Plaintiffs filed opposition to the Motion on April 19, 2017 (the "Opposition").
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DISCUSSION
As a threshold matter, the issues related to any potential violation of the automatic stay shall not be addressed by the Court on a Motion to Dismiss under Rule 12(b)(6). The Debtors are free to seek relief in the main bankruptcy case in conformity with the Local Bankruptcy Rules, and as otherwise permitted by applicable law.
Under Civil Rule 12(b)(6), made applicable in adversary proceedings through Rule 7012, a bankruptcy court may dismiss a complaint if it fails to "state a claim upon which relief can be granted." In reviewing a Civil Rule 12(b)(6) motion, the trial court must accept as true all facts alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.
2001). However, the trial court need not accept as true conclusory allegations in a complaint or legal characterizations cast in the form of factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007);
Hartman v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008).
To avoid dismissal under Civil Rule 12(b)(6), a plaintiff must aver in the complaint "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). It is axiomatic that a claim cannot be plausible when it has no legal basis. A dismissal under Civil Rule 12(b)(6) may be based either on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson
v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir.2008).
Section 523(a)(2)(A) provides that: "A discharge ... does not discharge an individual debtor from any debt ... (2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained, by—(A) false pretenses, a false representation, or actual fraud[.]" To demonstrate that a debt should be excepted from discharge under § 523(a)(2)(A), a creditor must prove five elements: (1) a misrepresentation, fraudulent omission or deceptive conduct by the debtor; (2) debtor's knowledge of the falsity or deceptiveness of the statement or conduct at the time it occurred; (3) debtor's intent to deceive; (4) justifiable reliance by the creditor on the debtor's statement or conduct; and (5) damage to the creditor proximately
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caused by its reliance on the debtor's statement or conduct. Ghomeshi v. Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir. 2010); Oney v. Weinberg (In re Weinberg), 410 B.R. 19, 35 (9th Cir.BAP 2009). All five elements must be asserted in the creditor's complaint for an exception to discharge, and the creditor bears the burden of proving each element by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 291 (1991); In re Weinberg, 410 B.R. at 35.
The facts of the instant case are straightforward. The FAC sets forth allegations that the Debtors, through their real estate agent, made false representations regarding the condition of the Property which the Plaintiffs relied on when they purchased the Property. The Debtors assert that dismissal is warranted because the FAC makes reference only to the agents of the Debtors and not to statements of the Debtors themselves. However, the Debtors have failed to provide any legal authority for the proposition that misrepresentations made by the Debtors’ agents are legally insufficient as a basis for upholding a claim under § 523(a)(2)(A). See In re Paolino, 75 B.R. 641, 648 (Bankr. E.D.Penn. 1987)(holding that agent's fraud may be imputed to principal under § 523(a)(2)(A)). Moreover, the FAC alleges that Debtor Wife was present when the representation was made and verified/ratified the representation. On this basis, the Motion must be denied. The Court finds that, absent authority to the contrary, the facts are sufficient to state a plausible claim that the Debtors obtained money from the sale of the Property to Plaintiffs and that such sale was obtained by false representations made by the Debtors directly by verification/ratification and/or through their agents. The Court finds that the factual allegations are sufficiently clear to permit Debtors to respond and defend against the Plaintiffs’ claim.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to DENY the Motion and permit the litigation to proceed.
APPEARANCES REQUIRED.
12:30 PM
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Anne Louise Goodman Represented By Edward T Weber
Douglas Edward Goodman Represented By Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Anne Louise Goodman Represented By Edward T Weber
Douglas Edward Goodman Represented By Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 44
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: LOGIX FEDERAL CREDIT UNION
From: 1/31/17, 3/23/17, 4/27/17 EH
Docket 31
01/31/2017
Service: Proper Opposition: Yes
The Motion indicates that the basis for relief is a lack of adequate protection and the declining value of the vehicle. However, no evidence is provided to support either basis for relief. Separately, based on the evidence provided and the attached declaration, it appears that Movant actually intended to seek relief based on a postpetition or post-confirmation default.
The original confirmed chapter 13 plan entered on December 8, 2016, made no mention of the 2010 Chevrolet Suburban or Movant. However, the January 11, 2017, Amended Order Confirming Chapter 13 Plan (entered after the Movant had already filed its Motion for Relief from Stay) specifically indicated that Debtor would make direct payments to Movant. The Debtor concedes that there was an error on his part in the drafting of the plan. However, it is not clear from the Debtor’s response why the December payment which would have come due on December 28, 2016, was not made, although it appears implied that the December payment was included in the plan payment. Movant has established cause under § 362(d)(1) to lift the stay based on
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post-confirmation default. APPEARANCES REQUIRED.
Debtor(s):
Juan Jose Franco Represented By Paul Y Lee
Movant(s):
Logix Federal Credit Union Represented By Lazaro E Fernandez
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 3/30/17, 4/27/17 Also # 6
EH
Docket 26
05/04/17
The Debtors filed a supplemental declaration of their counsel on 4/27/17. Based on Counsel's representation that he has advised Mr. Horzen of the bankruptcy filing and that Mr. Horzen has consented to the appointment of his wife as his representative on the basis of his medical condition, the Court is inclined to GRANT the Motion and order the appointment of Mrs. Horzen as the Next Friend of her Mr. Horzen.
APPEARANCES WAIVED. Movant to lodge order within 7 days.
03/30/2017
BACKGROUND
On December 28, 2016, Frank and Barbara Horzen (collectively, "Debtors") filed their petition for chapter 13 relief. Rod Danielson is the duly appointed chapter 13 trustee ("Trustee").
On March 9, 2017, the Debtors filed a Motion for Appointment of Mrs.
Horzen as the "Next Friend" of Debtor Frank Horzen ("Motion"). The Motion is based on the Debtors’ assertion that Mr. Horzen lacks the capacity to make legal decisions and seeks authority for Mrs. Horzen to "execute all legal decisions" related to the bankruptcy, including permitting Mrs. Horzen to execute documents on behalf of Mr.
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Horzen. Notice was provided to all creditors and to the Trustee and United States Trustee. No opposition has been filed.
DISCUSSION
Fed. R. Bankr.P. 1004.1 allows "a representative, including a general guardian, committee, conservator, or similar fiduciary," to file a voluntary petition on behalf of an incompetent person.
The rule further provides that
[a]n infant or incompetent person who does not have a duly appointed representative may file a voluntary petition by next friend or guardian ad litem. The court shall appoint a guardian ad litem for an infant or incompetent person who is a debtor and is not otherwise represented or shall make any other order to protect the infant or incompetent debtor.
Rule 1004.1 is patterned after Fed.R.Civ.P. 17(c), which applies to adversary proceedings pursuant to Fed. R. Bankr.P. 7017. That rule provides that an incompetent person may sue "by a next friend or by a guardian ad litem" if the incompetent person does not have a duly appointed representative, and provides that "[t]he court must appoint a guardian ad litem—or issue another appropriate order—to protect a minor or incompetent person who is unrepresented in an action."
Cases interpreting Rule 17(c) look to the law of the state in which the subject is domiciled and follow the state's incompetency laws." In re Burchell, 2014 WL 1304635, at *1 (Bankr. N.D. Ohio 2014)(internal citations omitted). This court shall thus look to the California Probate Code’s § 811 which outlines the possible bases for a determination that a person is of unsound mind or lacks capacity to make a decision or do a certain act, including for example, incapacity to contract or to execute wills or trusts.
In support of the Motion, the Debtors have attached the Declaration of Barbara Horzen in which she details the numerous diagnoses of Mr. Horzen made since June 2016 indicating his dementia diagnosis. Particularly persuasive is the correspondence attached as Exhibit E to the Motion, and authenticated by the declaration of Barbara Horzen, which indicates the opinion of Mr. Horzen’s Doctor, Sophie K. Chwa, and states that Mr. Horzen is incompetent to make decisions "including those of legal
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consequence." Notwithstanding this diagnosis, § 811(d) provides that "the mere diagnosis of a mental or physical disorder shall not be sufficient in and of itself to support a determination that a person is of unsound mind or lacks the capacity to do a certain act." Instead, California law requires evidence of specific deficits and a link between the identified deficits and the acts that the allegedly incompetent person would otherwise have capacity to perform. The types of deficiencies are outlined in § 811 as follows:
Alertness and attention, including, but not limited to, the following:
Level of arousal or consciousness.
Orientation to time, place, person, and situation.
Ability to attend and concentrate.
Information processing, including, but not limited to, the following:
Short- and long-term memory, including immediate recall.
Ability to understand or communicate with others, either verbally or otherwise.
Recognition of familiar objects and familiar persons.
Ability to understand and appreciate quantities.
Ability to reason using abstract concepts.
Ability to plan, organize, and carry out actions in one's own rational self- interest.
Ability to reason logically.
Thought processes. Deficits in these functions may be demonstrated by the presence of the following:
Severely disorganized thinking.
Hallucinations.
Delusions.
Uncontrollable, repetitive, or intrusive thoughts.
Ability to modulate mood and affect. Deficits in this ability may be demonstrated by the presence of a pervasive and persistent or recurrent state of euphoria, anger, anxiety, fear, panic, depression, hopelessness or despair, helplessness, apathy or indifference, that is inappropriate in degree to the individual's circumstances.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to CONTINUE the hearing on the Motion for the Debtors to either provide (1) supplemental evidence establishing that
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the Mr. Horzen is unable to undertake the actions required in connection with the Debtors’ duties in a chapter 13 case; or (2) evidence that Counsel has explained to Mr. Horzen that a bankruptcy is being filed in his name and that Mr. Horzen has consented to Mrs. Horzen’s appointment as his representative.
As an aside, the Court notes that as the power of attorney provided is of general application and does not specifically permit actions to be taken by Mrs. Horzen in the event of a bankruptcy, the power of attorney does not necessarily provide Mrs. Horzen with the requisite authority.
APPEARNCES REQUIRED.
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
Movant(s):
Barbara A Horzen Represented By Paul Y Lee
Frank A Horzen Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Stephanie V Davis Represented By Eliza Ghanooni
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 18
05/04/2017
Background:
On January 28, 2017 ("Petition Date"), Miriam Louise Preisendanz (the "Debtor") filed for chapter 13 relief.
On April 6, 2017, the Debtor filed an Objection to Claim No. 7 (the "Objection") of LVNV Funding, LLC ("Claimant") as assignee of Chase Bank USA,
N.A. The Objection was amended on April 10, 2017. The Objection was served on Claimant at the address it has provided on Claim No. 7 where notices should be sent. No opposition has been filed.
Claim #: 7
Amount: $12,401.46
Objection:
The Debtor objects to the claim on the grounds that the claim is beyond the statute of limitations under state law.
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Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
Rebuttal of the Prima Facie Proof of Claim
In this case, the Debtor asserts that Claims No. 7 should be disallowed as time barred. Section 502(b)(1) provides that a claim is deemed allowed, unless such claim
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is unenforceable against the debtor and property of the debtor under applicable law. The statute of limitations applicable to common counts is four years if the action is founded upon a contract or other writing (e.g., "book account" (¶ 3:398), "account stated" (¶ 3:400), or money lent on a note), and the statute of limitations is generally four years from the date of the last item in the account. CCP § 337(1),(2); Armstrong Petroleum Corp. v. Tri–Valley Oil & Gas Co., 116 CA 4th 1375, 1396, FN. 9 (Cal. App. 2004). Here, the "Account Detail" attached to Claim No. 7 by the Claimant indicates that the last payment on the account was made on November 12, 2008. Thus, the Debtor has met her burden of demonstrating that the claim is unenforceable under state law because it appears that the statute of limitations has lapsed. The burden now shifts to Claimant. Claimant, though properly served, has failed to offer any opposition which this Court deems as consent to the granting of the requested relief pursuant to LBR 9013-1(h).
TENTATIVE RULING
The Court is inclined to SUSTAIN the Debtor’s objection in its entirety on the bases that (1) the Claimant has failed to meet its burden to demonstrate the validity of the claim; and (2) that the Claimant’s failure to file opposition is deemed consent to the granting of the Debtor’s requested relief.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Movant(s):
Miriam Louise Preisendanz Represented By Danny K Agai
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Manuel J. Sotelo Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Renard Louis Hamilton Represented By
D Justin Harelik
Joint Debtor(s):
Regina Elizabeth Hamilton Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jose Alberto Lara-Pena Represented By Luis G Torres
Joint Debtor(s):
Yanisleidy Sanchez-Quinonez Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Gregory A. King Represented By Michael Jay Berger
Joint Debtor(s):
Jessica A. King Represented By Michael Jay Berger
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 12
05/04/2017
Background:
On March 15, 2017 ("Petition Date"), Hari Ram (the "Debtor") filed for chapter 13 relief.
On March 31, 2017, the Debtor filed an Objection to Claim No. 2 (the "Objection") of the County of San Bernardino’s Office of Tax Collector (the "County"). The County filed Opposition to the Objection on April 20, 2017 ("Opposition"). The Debtor filed his reply to the Opposition on April 27, 2017 ("Reply").
Claim #: 2
Amount: $25,695
Objection:
The Debtor objects to the claim on the grounds that the County has included
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projected tax amounts for 2017 in the claim. The Debtor indicates that he does not agree to the amounts projected by the County and that the inclusion of the projected taxes threatens to make the plan infeasible.
Applicable Law:
As a threshold matter, the docket reflects that the Objection was filed in conformity with the local rules, and served on the County thirty days prior to the hearing by certified mail.
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
In Opposition to the Objection, the County asserts that the "projected"
$4,872.28 arose prepetition pursuant to California law and thus the Objection should be overruled because the amounts included in Claim No. 2 are for prepetition claims. In his Reply, the Debtor does not dispute that the claim arises on January 1 under State law but instead appears to argue that for equitable reasons, the Debtor should not be required to pay his 2017-2018 taxes prior to the April deadline that is provided for all other individuals owing taxes.
Here, the Debtor has failed to cite to any legal authority to support the proposition that a tax claim accrues when billed rather than on the date provided by statute. As such, the Debtor’s request that this Court disallow the $4,872.28 in taxes owed for the 2017-2018 year must be overruled. However, the Court agrees that the Debtor should not be required to pay the interest rate of 18% on the 2017-2018 amount prior to any default. Given that this issue was raised by the Debtor in his Reply, the Court shall permit the County to respond to the Debtor’s argument regarding the interest on the $4,872.28 at the hearing.
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TENTATIVE RULING
The Court is inclined to OVERRRULE the Debtor’s objection in its entirety.
APPEARANCES REQUIRED.
Debtor(s):
Hari Ram Represented By
Dana Travis
Movant(s):
Hari Ram Represented By
Dana Travis Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # 13 EH
Docket 0
- NONE LISTED -
Debtor(s):
Hari Ram Represented By
Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Tracy Franco Represented By
Allan O Cate
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Robert Nelson Represented By David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maria I Alcaraz Represented By Manfred Schroer
Joint Debtor(s):
Eduardo D Alcaraz Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Frank Castodio Represented By Lauren Rode
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Lydia M. Sepulveda Represented By Ronald W Ask
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Mary J Leaverton Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Edward Uy Hidalgo Represented By Keith F Rouse
Joint Debtor(s):
Trixie Quijada Represented By Keith F Rouse
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Edmundo Sabado Jr. Represented By Jennifer Ann Aragon
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
William Rodriguez Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joseph V. Lessa Represented By Paul Y Lee
Joint Debtor(s):
Nichole Alyce Lessa Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Toni N. Ephraim Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 73
- NONE LISTED -
Debtor(s):
Helid Ricardo Garcia Represented By Tamar Terzian
Joint Debtor(s):
Leonor Garcia Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 100
- NONE LISTED -
Debtor(s):
Carlos Enrique Mendoza Represented By John F Brady Lisa H Robinson
Joint Debtor(s):
Michelle Lea Mendoza Represented By John F Brady Lisa H Robinson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 130
- NONE LISTED -
Debtor(s):
Enrique Artemio Barba Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 137
- NONE LISTED -
Debtor(s):
Clarence White Represented By Steven A Wolvek
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 151
- NONE LISTED -
Debtor(s):
Vivian Munson Represented By Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 207
- NONE LISTED -
Debtor(s):
Jose N Recinos Represented By Michael Smith
Joint Debtor(s):
Patricia Recinos Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 72
- NONE LISTED -
Debtor(s):
Michael Lee Barnes Represented By Todd L Turoci
Joint Debtor(s):
Belinda Ann Barnes Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 38
- NONE LISTED -
Debtor(s):
Kile K Do Represented By
Dana Travis
Joint Debtor(s):
Jenieffer Caparas Do Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 24
- NONE LISTED -
Debtor(s):
Miguel Vivar Represented By
Rebecca Tomilowitz
Joint Debtor(s):
Maria Vivar Represented By
Rebecca Tomilowitz
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 29
- NONE LISTED -
Debtor(s):
Eric Kissell Represented By
William J Howell
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 27
- NONE LISTED -
Debtor(s):
Donald L Maddox Represented By Michael Smith
Joint Debtor(s):
Lisa A Maddox Represented By Michael Smith
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
Jesus Danny Ontiveros III Represented By Gary S Saunders
Joint Debtor(s):
Marie Irene Ontiveros Represented By Gary S Saunders
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 31
- NONE LISTED -
Debtor(s):
Elliott Howard Blue Jr Represented By Michael E Clark Barry E Borowitz
Joint Debtor(s):
Yvette Blue Represented By
Michael E Clark Barry E Borowitz
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 59
- NONE LISTED -
Debtor(s):
Cynthia L Tucker Represented By Claudia L Phillips
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST CO
EH
Docket 110
Service is Proper Opposition: Yes
Subject to cure or APO discussions, the Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Zerry B Holefield Represented By
Dale Parham - INACTIVE - Michael Smith
Movant(s):
Deutsche Bank National Trust Represented By
Joely Khanh Linh Bui Mark T. Domeyer Daniel K Fujimoto Caren J Castle
10:00 AM
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: SETERUS INC
From: 4/11/17 EH
Docket 75
04/11/17
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT as to ¶¶ 3 and 12 of the prayer for relief.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Harry Ervin Represented By
Matthew D Resnik
Joint Debtor(s):
Irma Lorena Ervin Represented By Matthew D Resnik
Movant(s):
Seterus, Inc. as the authorized Represented By
10:00 AM
Trustee(s):
Kristin A Zilberstein
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: US BANK TRUST NA AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST
From: 5/2/17 EH
Docket 93
05/02/2017
Parties to address adequate protection discussions.
APPEARANCES REQUIRED.
Debtor(s):
Linda Ann Lynch Represented By
Andrew Edward Smyth William J Smyth Stephen S Smyth
Movant(s):
U.S. Bank Trust, N.A., as Trustee Represented By
Kristin A Zilberstein
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 47
Service is Proper Opposition: Yes
Parties to advise Court regarding adequate protection discussions.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
Movant(s):
WELLS FARGO BANK, N. A. Represented By
10:00 AM
Trustee(s):
Dane W Exnowski
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
From: 4/11/17 EH
Docket 103
04/11/17
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). Request under § 362(d)(2) is DENIED for failure by Movant to establish that the Property has no equity or that it is not necessary for reorganization. GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Frederick Arnett Mikel Represented By Todd L Turoci
Movant(s):
U.S. BANK NATIONAL Represented By April Harriott Sean C Ferry
10:00 AM
Trustee(s):
Matthew R. Clark Keith Labell
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO
From: 4/11/17 EH
Docket 56
04/11/17
Service: Proper Opposition: Yes
Debtors have indicated that they intend to cure by the hearing or request an APO. APPEARANCES REQUIRED.
Debtor(s):
Jesus Manuel Gomez Represented By Dana Travis
Joint Debtor(s):
Maria Gomez Represented By Dana Travis
Movant(s):
WELLS FARGO BANK, N. A. Represented By
Dane W Exnowski
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
From: 4/11/17 EH
Docket 38
04/11/2017
Service: Proper Opposition: Yes
Debtors assert they will cure post-petition arrears by the hearing or request an APO. APPEARANCES REQUIRED.
Debtor(s):
Gilbert Alfred Torrez Sr. Represented By
Rabin J Pournazarian
Joint Debtor(s):
Emily Torrez Represented By
Rabin J Pournazarian
Movant(s):
Wells Fargo Bank, N.A./Wells Fargo Represented By
Judith Trigg-Hart Erin Holliday Christopher Darden
10:00 AM
Trustee(s):
Angela M Fowler Megan E Lees
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
From: 4/11/17 EH
Docket 44
04/11/2017
Service: Proper Opposition: None
GRANT relief from the stay under §362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT as to ¶¶ 3 and 12. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Chris Alvarado Espinoza Represented By Gary S Saunders
Movant(s):
Nationstar Mortgage LLC Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
From: 11/1/16, 12/13/16, 2/14/17, 4/11/17
EH
Docket 19
- NONE LISTED -
Debtor(s):
Natasha M Kiehl Represented By Bill J Parks
Movant(s):
Natasha M Kiehl Represented By Bill J Parks
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BRIAN A. GLASSER
EH
Docket 25
Service: Proper Opposition: None
Based on, in part, the ruling on relief from stay granted by Judge Clarkson in the related case Desert Ranch LLLP, at hearing on May 2, 2017, and for the same reasons, the Court is inclined to GRANT the motion as modified by Chapter 7 Trustee’s limited opposition.
APPEARANCES REQUIRED.
Debtor(s):
Desert Ranch Management, LLC Represented By
Jenny L Doling
10:00 AM
Movant(s):
Brian A. Glasser, Successor Trustee Represented By
Franklin C Adams
Trustee(s):
Arturo Cisneros (TR) Represented By Robert P Goe
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
From: 4/11/17 EH
Docket 26
04/11/17
Service: Proper Opposition: Yes
Debtor asserts that Movant is adequately protected by the 8.5% estimate of adequate protection. The Court finds this equity cushion insufficient under Mellor. Further, Debtor has also provided evidence that a wire transfer of $3,435.06 has been made to Movant. However, this amount is less than the total amount owed in arrears.
APPEARANCES REQUIRED.
Debtor(s):
Tanyua A Gates-Holmes Represented By John F Brady
Movant(s):
Nationstar Mortgage LLC as Represented By
Kristin A Zilberstein
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
HOLDING DATE
MOVANT: NATASHA MARIE KIEHL AND PHILLIP NATHAN KIEHL From: 11/1/16, 12/13/16, 2/14/17, 4/11/17
Also #13 EH
Docket 21
- NONE LISTED -
Debtor(s):
Natasha Marie Kiehl Represented By Bill J Parks
Joint Debtor(s):
Phillip Nathan Kiehl Represented By Bill J Parks
Movant(s):
Phillip Nathan Kiehl Represented By Bill J Parks
Natasha Marie Kiehl Represented By Bill J Parks
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NICOLE TRACY C WANG
CASE DISMISSED: 4/27/17
From: 11/1/16, 12/13/16, 2/14/17, 4/11/17
Also #12 EH
Docket 17
8/30/16
Service is Improper Opposition: Due at the hearing.
Service is improper because Movant did not serve the Debtors, in addition to Debtors’ counsel, with the Notice and Motion as required by LBR 4001-1(c). Additionally, Movant has not provided any evidence that she provided telephonic notice of the hearing to all parties entitled to receive notice, as set forth in the Judge’s self calendar instructions.
The Court also notes that Movant sets forth a basis for relief under § 362(d)(1) on page 3 of the Motion, but failed to request such relief on page 5 of the Motion. Thus, unless an amended motion is filed and served addressing such discrepancy, the Court would be inclined to deny any relief sought under § 362(d)(1).
Finally, it appears the underlying foreclosure sale may be void as occurring during the prior case filed by Natasha Kiehl.
10:00 AM
APPEARANCES REQUIRED.
Debtor(s):
Natasha Marie Kiehl Represented By Bill J Parks
Joint Debtor(s):
Phillip Nathan Kiehl Represented By Bill J Parks
Movant(s):
Nicole Wang Represented By
Chi L Ip Gerald N Sims
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: QUALITY ACCEPTANCE LLC
EH
Docket 31
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). DENY request under § 362(d)(2) for lack of cause shown. GRANT waiver of 4001(a)(3) stay. GRANT request under § 1301(a). GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Melanie Lourdes Davis Represented By Gary S Saunders
Movant(s):
Quality Acceptance, LLC Represented By Robert S Lampl
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 25
- NONE LISTED -
Debtor(s):
Todd Christopher Tyrrell Represented By Matthew Abbasi
Joint Debtor(s):
Kelly Jean Tyrrell Represented By Matthew Abbasi
Movant(s):
WELLS FARGO BANK, N.A., AS Represented By
Tyneia Merritt
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: DEVELOPER'S CAPITAL INC
EH
Docket 34
Service is Proper Opposition: Yes
The Court is inclined to DENY the motion without prejudice. Movant’s request for relief only requests relief under § 362(d)(2). Section 362(d)(2) requires Movant to show that the property is unnecessary to an effective reorganization and that Debtors have no equity in the property. This case is a Chapter 13 proceeding and the property at issue is Debtors’ primary residence. In this situation, absent any indication to the contrary, the property is necessary to an effective reorganization. Furthermore, Movant does not identify the fair market value of the property or whether there are any additional liens on the property, and, therefore, has not demonstrated that Debtors have no equity in the property.
APPEARANCES REQUIRED.
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
10:00 AM
Movant(s):
Developers Capital, Inc., Employees Represented By
Russel T Little
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK TRUST COMPANY AMERICAS AS TRUSTEE FOR RESIDENTIAL ACCREDIT LOANS INC PASS THROUGH CERTIFICATES
EH
Docket 12
- NONE LISTED -
Debtor(s):
Alfredo Rios Pro Se
Movant(s):
Deutsche Bank Trust Company Represented By Erica T Loftis
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: TD AUTO FINANCE
EH
Docket 10
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Mary Elizabeth Pena Represented By Nicholas M Wajda
Movant(s):
TD Auto Finance LLC Represented By Sheryl K Ith
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: AMERICAN HONDA FINANCE CORPORATION
EH
Docket 9
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Sara Palacios Represented By
Todd L Turoci
Movant(s):
AMERICAN HONDA FINANCE Represented By
Vincent V Frounjian
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: ETHEL N ODIMEGWU
EH
Docket 14
Service: Proper in the circumstances Opposition: None
Movant having provided sufficient evidence to rebut the presumption that the case was not filed in good faith, the Court is inclined to GRANT the motion and continue the automatic stay as to all creditors.
APPEARANCES REQUIRED.
Debtor(s):
Ethel N Odimegwu Represented By Michael Smith
Movant(s):
Ethel N Odimegwu Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: RICARDO MENENDEZ
EH
Docket 13
Movant having provided sufficient evidence to rebut the presumption that the case was not filed in good faith, the Court is inclined to GRANT the motion and continue the automatic stay as to all creditors.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Menendez Represented By Sunita N Sood
Movant(s):
Ricardo Menendez Represented By Sunita N Sood
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
From: 12/2/14, 3/3/15, 3/10/15, 3/31/15, 5/27/15, 6/3/15, 6/16/15, 6/22/15, 7/7/15, 7/21/15, 7/28/15, 9/22/15, 10/20/15, 12/8/15, 12/15/15, 3/1/16, 4/26/16,
9/6/16, 12/6/16, 4/4/16
EH
Docket 6
- NONE LISTED -
Debtor(s):
Bucur Rentals, LLC Represented By Michael Jay Berger
2:00 PM
Also #24 EH
Docket 53
BACKGROUND
On January 30, 2017, Bausman & Company, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. Debtor leased certain real property located in West Hollywood from Pacific Design Center I, LLC. On March 31, 2017, Debtor filed a motion for entry of an order authorizing nunc pro tunc rejection of non-residential real property lease located in West Hollywood, California pursuant to 11 U.S.C. § 365. The Debtor also requests (1) that a deadline bet set regarding the filing of a proof of claim in relation to the rejection of the executory contract, and (2) that any personal property of the Debtor be abandoned.
DISCUSSION
11 U.S.C. § 365(a) states:
2:00 PM
Except as provided in sections 765 and 766 of this title and in subsections (b), (c), and (d) of this section, the trustee, subject to the court’s approval, may assume or reject any executory contract or unexpired lease of the debtor.
Pursuant to § 1107(a), a debtor in possession has the same rights as a trustee, and, therefore, can exercise a trustee’s right to reject an executory contract or unexpired lease. See, e.g., In re Merchants Plaza, Inc., 35 B.R. 888, 891 (Bankr. E.D. Tenn. 1983). In analysis a motion to reject an executory contract or unexpired lease, the Court applies the business judgment rule. See In re G.I. Indus., Inc., 204 F.3d 1276, 1282 (9th Cir. 2000). Here, Debtor states that it has vacated the premises and that the lease is of no further use to Debtor. Debtor has provided a declaration from an officer that states that continued lease payments are not justified by property’s returns. An executory contract or unexpired lease that is of negative utility to a business warrants rejection. The Court deems failure to oppose to be consent to the relief requested.
Nunc pro tunc rejection of an executory contract is permissible "when necessary or appropriate to carry out the provisions of § 365(d). In re At Home Corp., 392 F.3d 1064, 1071 (9th Cir. 2004). Nevertheless, the standard for authorization of nunc pro tunc rejection also imposes an "exceptional circumstance test." See In re New Meatco Provisions, LLC, 2014 WL 2446314 at *4 (citing id. at 1072-75). The test is as follows:
In deciding whether retroactive rejection is warranted, the bankruptcy court should consider the following nonexclusive factors: (1) the immediate filing of the debtor’s motion to reject the lease; (2) the debtor’s prompt action setting the motion for hearing; (3) the vacancy of the leased premises; and (4) the landlord’s motivation in opposing retroactive rejection of the lease to the motion filing date.
Id. The first two factors, generally constituting delay, weigh against nunc pro tunc relief. Debtor waited two months before filing the motion to reject the lease, and set the matter for hearing on thirty-nine days notice, when there were two earlier dates available for self-calendaring. Nevertheless, factors three and four weigh in favor of nunc pro tunc rejection, since Debtor has already vacated the premises and the landlord has not opposed the motion. The failure of the landlord to oppose and the
2:00 PM
absence of any apparent prejudice resulting from Debtor’s delay, combined with the fact that Debtor vacated the premises on March 31st, leads to a conclusion that nunc pro tunc rejection is warranted in this case.
Next, Debtor requests that any personal property left on the premises be determined to be abandoned pursuant to § 554(a). However, there is no evidence regarding the personal property that Debtor seeks to abandon.
Finally, Debtor requests the imposition of a deadline for filing claims related to the rejection of the unexpired lease. Debtor requests that the deadline be set at: "the later of (a) 30 days after entry of an order granting this Motion or (b) the deadline set by the Court for prepetition claims to be filed." The deadline for filing claims is August 31, 2017. Therefore, the deadline for filing claims arising from the rejection of the unexpired lease will be August 31, 2017.
TENTATIVE RULING
The Court is inclined to GRANT the motion, subject to evidence regarding personal property left on the premises as of the date of rejection.
APPEARANCES REQUIRED.
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
Movant(s):
Bausman and Company Incorporated Represented By
William A Smelko
2:00 PM
2:00 PM
Also #23 EH
Docket 25
BACKGROUND
On January 30, 2017, Bausman & Company, Incorporated ("Debtor") filed a Chapter 11 voluntary proceeding. On February 14, 2017, Debtor filed an application to employ Procopio, Cory, Hargreaves & Savitch ("Counsel") as counsel to Debtor. The application, however, was not set for hearing, nor was it filed pursuant to Local Rule 9013-1(o). On April 5, 2017, Debtor filed an amended application to employ Counsel, and set the matter for hearing. Debtor’s amended application also states that changes to the fee arrangement were made after consultation with the UST.
DISCUSSION
11 U.S.C. § 327(a) states:
Except as otherwise providing in this section, the trustee, with the court’s
2:00 PM
approval, may employ one or more attorneys, accountants, appraisers, auctioneers, or other professional persons, that do not hold or represent an
interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee’s duties under this title.
Regarding the standard for the employment of professional persons, one court has stated:
The trustee, subject to the court’s approval, has broad discretion in his selection of counsel and the terms of employment. There are, however, two threshold requirements that the trustee must satisfy. First, the trustee must demonstrate that the attorney proposed to be employed meets certain statutory standards. Second, the employment must be reasonably necessary.
In re Computer Learning Ctrs., Inc., 272 B.R. 897, 903 (Bankr. E.D. Va. 2001) (citations omitted).
Regarding whether the proposed employment is reasonable and necessary, one court has stated:
Thus, once the trustee meets the burden of demonstrating that an applicant for professional employment is qualified under § 327, the discretion of the bankruptcy court must be exercised in a way that it believes best serves the objectives of the bankruptcy system. Among the ultimate considerations for the bankruptcy courts in making these decisions must be the protection of the interests of the bankruptcy estate and its creditors, and the efficient, expeditious, and economical resolution of the bankruptcy proceeding.
In re Harold & Williams Dev. Co., 977 F.2d 906, 910 (4th Cir. 1992).
2:00 PM
As set forth in the motion, Debtor has established that employment of counsel is reasonable and appropriate under the circumstances and in accordance with the terms set forth in the application.
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-1(h).
TENTATIVE RULING
The Court is inclined to APPROVE the application.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
Movant(s):
Bausman and Company Incorporated Represented By
William A Smelko
2:00 PM
Docket 158
BACKGROUND
On October 28, 2016, Sam Daniel Dason DDS ("Debtor") filed a Chapter 11 voluntary petition. Various first day motions of the Debtor were granted on November 3, 2016, and the Court entered an interim order regarding cash collateral on November 7, 2016. The employment of Kogan Law Firm as counsel was authorized on December 13, 2016.
On January 6, 2017, Debtor filed its Chapter 11 plan and disclosure statement. Objections to the disclosure statement were filed by Juddy Olivares ("Olivares"), UST, Bank of America, and the Trustee for the bankruptcy estate of Sam Daniel Dason. Continued hearings on use of cash collateral and Debtor’s disclosure statement are currently scheduled for May 16, 2017.
On April 11, 2017, Debtor filed a motion to convert case to Chapter 7. On April 24, 2017, Olivares filed her opposition. On May 1, 2017, Debtor filed a reply.
DISCUSSION
2:00 PM
11 U.S.C. § 1112(a) states:
The debtor may convert a case under this chapter to a case under chapter 7 of this title unless—
The debtor is not a debtor in possession;
The case originally was commenced as an involuntary case under this chapter; or
The case was converted to a case under this chapter other than on the debtor’s request
Olivares uses § 1112(b) as a basis to object to conversion. Section 1112(b) does not provide the proper standard when Debtor voluntarily seeks conversion. One bankruptcy court, in addressing the approach taken by Olivares, has stated the following:
In opposing the debtor’s motion, the landlord argues that the court should exercise its discretion under section 1112(b) to deny the conversion motion because such a denial would be in the best interest of the creditors. The fallacy in this argument is that the debtor is proceeding under section 1112(a), not section 1112(b). The former provision, by its terms, gives the debtor an absolute right to convert, unless the case is governed by one of the enumerated exceptions. The legislative history confirms Congress’ intent to give debtors an absolute right to convert from chapter 11 to chapter 7.
In re Dieckhaus Stationers of King of Prussia, Inc., 73 B.R. 969, 971 (Bankr. E.D. Pa. 1987). None of the three enumerated exceptions are applicable here. Nevertheless, § 1112(f) imposes a requirement that a debtor be eligible to be a debtor in a chapter to which it seeks conversion. In accordance with the Supreme Court’s decision in
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Marrama, a debtor may be deemed ineligible to be a debtor under a different chapter when bad faith or other cause would justify reconversion. See Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007); see also 11 U.S.C. § 706(b) (providing for conversion from Chapter 7 to Chapter 11). Therefore, in opposing a motion under § 1112(a), a party in interest is limited to arguing the enumerated exceptions or challenging a debtor’s eligibility under the new chapter.
Here, Olivares has simply not provided a plausible argument why Debtor’s eligibility for a Chapter 7 case should be questioned. First, Olivares’ opposition argues from an incorrect legal position that assumes it is Debtor’s burden to demonstrate why conversion is warranted, as exemplified on page 2 of the opposition: "Here, Debtor offers no basis whatsoever for conversion of the case, and accordingly has failed to carry its burden." Second, to the extent that Olivares makes factual arguments, the arguments are framed to support the appointment of a Chapter 11 trustee. This is problematic for two reasons: (1) there are due process concerns related to raising this request in an opposition, instead of by motion, especially when that opposition does not provide for a full notice period; and (2) more importantly, unless Olivares can establish that Debtor is ineligible to a be a debtor under Chapter 7, Debtor has the right to convert its case. Therefore, in order to prevent conversion, Olivares would have needed to present an argument that would have justified reconversion from Chapter 7 to Chapter 11. Here, however, Olivares’ arguments tend towards depicting a Chapter 11 proceeding as inappropriate, rather than necessitating reconversion from Chapter 7 to Chapter 11.
Because Olivares has failed show that Debtor is ineligible for Chapter or that this case would need to be reconverted to Chapter 11, Debtor’s "absolute" right to convert will not be circumscribed.
TENTATIVE RULING
The Court is inclined to GRANT the motion and CONVERT the case to Chapter 7.
2:00 PM
APPEARANCES REQUIRED.
Debtor(s):
Sam Daniel Dason DDS,A Represented By Michael S Kogan
Movant(s):
Sam Daniel Dason DDS,A Represented By Michael S Kogan Michael S Kogan Michael S Kogan Michael S Kogan
2:00 PM
Also #27 EH
Docket 140
- NONE LISTED -
Debtor(s):
Welch Management Corporation Represented By
Stephen R Wade
W. Derek May
2:00 PM
From: 6/7/16, 8/30/16, 11/1/16,3/7/17, 4/18/17, 4/25/17 Also #26
EH
Docket 4
- NONE LISTED -
Debtor(s):
Welch Management Corporation Represented By
Stephen R Wade
W. Derek May
10:00 AM
EH
Docket 9
- NONE LISTED -
Debtor(s):
Rolando Quinones Pro Se
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
EH
Docket 32
- NONE LISTED -
Debtor(s):
William R Brown Pro Se
Joint Debtor(s):
Denice Brown Pro Se
Trustee(s):
Charles W Daff (TR) Pro Se
11:00 AM
From: 4/26/17 EH
Docket 35
- NONE LISTED -
Debtor(s):
Laureen Martha Harley Represented By
James M Powell - DISBARRED - Michael H Raichelson
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
11:00 AM
(HOLDING DATE)
From: 2/8/17, 3/8/17, 4/5/17, 4/26/17 EH
Docket 125
05/10/2017
The Court issued its Order After Remand on May 8, 2017. There being no further matters pending before this Court, this hearing shall be taken off calendar.
APPEARANCES WAIVED. 04/05/2017
The Status Conference is CONTINUED to April 26, 2017, at 11:00 a.m. as a holding date. The Court shall issue an amended order regarding fees ordered against Tunold and Kints in its September 29, 2014, order. Appearances are excused for the April 26, 2017, Status Conference.
APPEARANCES WAIVED.
Debtor(s):
Jerold R Meints Represented By Gene E O'Brien Harold M Hewell
Trustee(s):
Helen R. Frazer (TR) Pro Se
11:00 AM
11:00 AM
Docket 102
05/10/2017
Background:
On February 28, 2013 ("Petition Date"), Michael and Maricar Santos (collectively, the "Debtors") filed for chapter 7 relief. Larry Simons is the duly appointed chapter 7 trustee ("Trustee").
On April 6, 2017, the Trustee filed Objection to Claims No. 5 and 8 (the "Objection") of the Capital Recovery V, LLC (the "Claimant"). Claimant, though properly served, has failed to file opposition to the Objection.
Claim #: 5 ($3,171.65) & 8 (12,031.86)
Objection:
The Trustee objects to the claim on the grounds that the Claimant has failed to establish its standing to seek payment on the claims, having failed to provide evidence of any assignment or other right to payment.
Applicable Law:
11:00 AM
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a
party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
FED. R. BANKR. P. Rule 3001(c)(3)(A) states:
When a claim is based on an open-end or revolving consumer credit agreement – except one for which a security interest is claim in the debtor’s real property – a statement shall be filed with the proof of claim, including all of the following information that applies to the account:
The name of the entity from whom the creditor purchased the account;
The name of the entity to whom the debt was owed at the time of an account holder’s last transaction on the account;
The date of an account holder’s last transaction;
The date of the last payment on the account; and
The date on which the account was charged to profit and loss.
First, the Claimant has indicated that as to Claim No. 5 it cannot answer inquiry (ii) of FRBP 3001(c)(3)(A) (Exhibit 1), and that as to Claim No. 8, it cannot answer inquiries (ii) or (iii) (Exhibit 2). Revised Rule 3001 indicates that a creditor who fails to fully comply with the documentation requirements of Rule 3001(c), primarily faces the evidentiary sanction of being precluded from introducing its documents at a subsequent hearing on a substantive objection to its proof of claim under § 502(b). In re Reynolds, 470 B.R. 138 (Bankr.D.Colo.2012).
Here, the Trustee has challenged the standing of Claimant. A challenge to standing is a substantive objection under § 502(b)(1) because if a claimant has not
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proven it is the owner of a claim with a right to payment (i.e. the party with standing), the claim is unenforceable against the debtor under state law. In re Richter, 478 B.R. 30, 49 (Bankr. D. Colo. 2012). Accordingly, the Trustee has raised a sufficient substantive objection to Claimant’s claims under § 502(b) and as indicated by the Trustee, the Claimant has provided no evidence of the assignment and, in fact, based on the FRBP 3001(c)(3)(A) statements filed in support of both claims, Claimant appears to be wholly unaware of the chain of title for the underlying debts other than its knowledge of the identity of the original creditors. As such, the Court cannot rely even on the basic information requested in the Bankruptcy Rule 3001 Statement to support Claimant’s standing.
The facts before this Court closely resemble the facts in In re Richter, because Claimant has failed to comply with the Federal Rules of Bankruptcy Procedure (because it provided incomplete information in its Bankruptcy Rule 3001(c)(3)(A) Statement as set forth above, failed to attach any evidence of its claim or the assignment of the claim, and most importantly, failed to respond to the Trustee’s Objection). See id. Under the holding in Reynolds and pursuant to Fed. R. Bankr.P.
3001(c), the Court determines the appropriate remedy for Claimant’s failure to attach any documentation to its proof of claim is to preclude the introduction of documents to support the claim at any future hearing on this issue. In addition, due to its failure to timely respond to the Objection despite proper service, Claimant is deemed to consent to the granting of the relief requested by the Trustee under LBR 9013-1(h).
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES REQUIRED.
Debtor(s):
Michael Sevilla Santos Represented By Jeffrey B Smith
11:00 AM
Joint Debtor(s):
Maricar Domingo Santos Represented By Jeffrey B Smith
Movant(s):
Larry D Simons (TR) Represented By
Larry D Simons (TR) Wesley H Avery
Trustee(s):
Larry D Simons (TR) Represented By
Larry D Simons (TR) Wesley H Avery
11:00 AM
EH
Docket 253
- NONE LISTED -
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Movant(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
11:00 AM
From: 2/8/17, 3/8/17, 4/5/17 Also #8
EH
Docket 43
02/08/2017
BACKGROUND
On September 20, 2016, Jorge Lazaro and Yessenia Lazaro (collectively, "Debtors") filed their petition for chapter 7 relief. Todd Frealy is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the bankruptcy estate is certain real property located at 2021 Adrienne Dr. in Corona, CA (the "Property").
On January 5, 2017, the Trustee filed his Application to Employ Keller Williams Realty & KW Commercial ("Broker") as Real Estate Broker ("Application") in order to appraise, market, and sell the Property.
On January 19, 2017, the Office of the United States Trustee ("UST") filed a limited opposition to the alternative compensation structure proposed by the Trustee. Specifically, the Trustee proposed that if the Debtors purchased the estate’s equity in the Property, the Broker would receive 6% of the sum paid to the Trustee (the "Alternative Compensation").
On February 1, 2017, the Trustee filed his Reply to UST’s Opposition and indicated that he would withdraw his request for approval of the Alternative
11:00 AM
Compensation.
DISCUSSION
Pursuant to § 327(a), the trustee, subject to the court’s approval, may employ professional persons, such as auctioneers, to perform services for the estate so long as that representation is not adverse to the estate and the professional is a disinterested person. Federal Rule of Bankruptcy Procedure ("F.R.B.P.") 2014 and Local Bankruptcy Rule ("L.B.R.") 2014-1 govern the employment of professional persons.
The Application is supported by the declaration of W. Darrow Fiedler, a licensed real estate broker with Broker. In his declaration, Mr. Fiedler sets forth the disinterestedness of the Broker and his acknowledgment that he cannot be paid without approval from the Bankruptcy Court. The evidence satisfies § 327(a).
Additionally, the Court has evaluated the Notice of the Application and service and has determined that the Application complies with FRBP 2014 and LBR 2014.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the Application in its entirety as amended by the Reply, subject to the UST’s confirmation that its concerns have been adequately addressed.
APPEARANCES REQUIRED.
Debtor(s):
JORGE V LAZARO Represented By Daniel S March
Joint Debtor(s):
YESSENIA M LAZARO Represented By
11:00 AM
Movant(s):
Daniel S March
Todd A. Frealy (TR) Represented By Anthony A Friedman
Trustee(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman
11:00 AM
Also #7 EH
Docket 45
- NONE LISTED -
Debtor(s):
JORGE V LAZARO Represented By Daniel S March
Joint Debtor(s):
YESSENIA M LAZARO Represented By Daniel S March
Movant(s):
JORGE V LAZARO Represented By Daniel S March Daniel S March
Trustee(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman
2:00 PM
Adv#: 6:16-01148 Pringle v. O. Allen Alpay, Trustee of the Alpay Living Trust
From: 8/31/16, 10/5/16, 10/11/16, 1/11/17, 1/24/17, 2/8/17
EH
Docket 1
This matter is being CONTINUED to October 11, 2016, at 3:00 p.m. The parties received telephonic notice of the continuance from the Court.
APPEARANCES WAIVED.
Debtor(s):
Manors San Bernardino Ave LLC Represented By
Gaurav Datta
Defendant(s):
Manors Construction & Pro Se
O. Allen Alpay, Trustee of the Alpay Represented By
Stephen B Goldberg Renee De Golier John L Bailey
Plaintiff(s):
John P. Pringle Represented By
2:00 PM
Trustee(s):
Scott Talkov Douglas A Plazak
John P Pringle (TR) Represented By Larry D Simons Scott Talkov Frank X Ruggier
2:00 PM
Adv#: 6:15-01127 Wedbush Securities Inc v. Bonnheim
From: 7/27/16, 9/7/16, 11/16/16, 1/1/17, 2/8/17, 4/26/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
William Stephen Bonnheim Represented By Robert L Firth
Defendant(s):
William Stephan Bonnheim Represented By Robert L Firth
Plaintiff(s):
Wedbush Securities Inc Represented By John L Erikson Jr
Trustee(s):
Steven M Speier (TR) Pro Se
2:00 PM
Adv#: 6:14-01116 Verbree v. Sanderson
From: 3/29/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Defendant(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Plaintiff(s):
Margaret Verbree Represented By Stephen A Madoni
Trustee(s):
Arturo Cisneros (TR) Pro Se
12:30 PM
Adv#: 6:17-01029 Cohen v. Bank of America, NA et al
From: 4/6/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard H Brown Jr. Represented By Gary J Holt
Defendant(s):
Ocwen Loan Servicing, LLC Pro Se
Bank of America, NA Pro Se
Plaintiff(s):
Amrane Cohen Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 41
- NONE LISTED -
Debtor(s):
Raymond Rudy Ponce Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Gloria De Lira Ponce Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
EH
Docket 45
BACKGROUND
On February 2, 2012, Raymond & Gloria Ponce ("Debtors") filed a Chapter 13 voluntary petition. On April 9, 2012, their Chapter 13 plan was confirmed.
On April 4, 2017, Debtors filed a motion for hardship discharge. Debtors have been in the plan for sixty months. The basis for the hardship discharge is that Debtor-husband was a truck driver. The state of California passed a law that would have required Debtor-husband to obtain a diesel emission control device, at an approximate cost of
$14,255.39. Debtor is currently seventy-two years old, and decided to retire rather than pay for the improvement. Debtors paid $54,158 to the plan, which had a base balance of $53,273. Trustee filed comments recommending conditional approval on April 25, 2017.
DISCUSSION
12:30 PM
11 U.S.C. § 1328(b) states:
Subject to subsection (d), at any time after the confirmation of the plan and after notice and a hearing, the court may grant a discharge to a debtor that has not completed payments under the plan only if –
the debtor’s failure to complete such payments is due to circumstances for which the debtor should not justly be held accountable;
the value, as of the effective date of the plan, of property actually distributed under the plan on account of each allowed unsecured claim is not less than the amount that would have been paid on such claim if the estate of the debtor had been liquidated under chapter 7 of this title on such date; and
modification of the plan under section 1329 of this title is not practicable.
The first and third standard are discretionary standards. The second standard is a mechanical standard referred to as the "best interests of creditors test". Debtors stated they have met the test because page 6 of their Chapter 13 plan says a Chapter 7 liquidation would not result in any payment to unsecured creditors. Specifically, Debtors state they "have no non-exempt equity in any assets to liquidate." This assertion is not supported by their schedules. Debtors listed unexempt equity in four vehicles, totaling $4,275. Nevertheless, even if any of these assets were to be administered in a hypothetical Chapter 7 liquidation, costs and priority claims would ensure that there would be no distribution to general unsecured creditors. Therefore, Debtors satisfy the second requirement.
Regarding, the first prong, Debtors have demonstrated that the failure to complete payments is due to circumstances beyond their control. Specifically, the state of California passed a law which would have required Debtor-husband to expend a significant amount of money to continue his employment. Notably, the expenditure required appears to exceed the payoff required to meet the plan, meaning that it
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Debtor had sought a plan modification to account for the state law requirement, creditors would not have been paid more. No party, including the Trustee, has argued that Debtors have failed to satisfy the requirement imposed by § 1328(b)(1), and, therefore, the Court believes that this case presents circumstances for which Debtors "should not justly be held accountable."
Finally, Debtors must demonstrate the modification is impracticable. Debtors have not mentioned this requirement in their motion. The declaration included in the motion, however, indicates that Debtors do not have the ability to fund a plan at this payment. It is unclear what practical utility would exist in requiring Debtors to attempt to modify their plan so that it would be deemed completed. In fact, one bankruptcy court has considered such a modification to be improper. See In re Guernsey, 189 B.R. 477, 484 (Bankr. D. Minn. 1995) ("A debtor should not be allowed to modify a plan under 11 U.S.C. § 1329 to the amount already paid, in circumstances where the ‘hardship discharge’ afforded by 11 U.S.C. § 1328(b) is otherwise applicable; and, where the use of 11 U.S.C. § 1329 would result in a greater discharge than would be available under 11 U.S.C. § 1328(b)).
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-(1)(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion, subject to compliance with Trustee’s comments.
APPEARANCES REQUIRED.
Debtor(s):
Raymond Rudy Ponce Represented By Jenny L Doling Summer M Shaw
12:30 PM
Joint Debtor(s):
Gloria De Lira Ponce Represented By Jenny L Doling Summer M Shaw
Movant(s):
Gloria De Lira Ponce Represented By Jenny L Doling Summer M Shaw
Raymond Rudy Ponce Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
EH
Docket 57
- NONE LISTED -
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
Also #4 EH
Docket 62
- NONE LISTED -
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Movant(s):
Cynthia Smith Represented By Jenny L Doling Jenny L Doling
James W Smith Sr. Represented By Jenny L Doling Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
EH
Docket 96
BACKGROUND
On May 30, 2012, Sheldon & Margaret Chaffer (collectively, "Debtors", and, individually, "Sheldon" and "Margaret") filed a Chapter 13 voluntary petition. Debtors’ Chapter 13 plan was confirmed on August 21, 2012. The plan was modified once, on April 11, 2013.
On April 11, 2017, Margaret filed a motion for order to continue case administration of deceasd debtor’s bankruptcy estate and for waiver of certification requirements under 11 U.S.C. § 1328(a) and (h) and 11 U.S.C. § 522(q).
DISCUSSION
Continue Case Administration
12:30 PM
Fed. R. Bankr. P. Rule 1016 deals with "death or incompetency of debtor" and states, in pertinent part:
If a reorganization, family farmer’s debt adjustment, or individual’s debt adjustment case is pending under chapter 11, chapter 12, or chapter 13, the case may be dismissed; or if further administration is possible and in the best interest of the parties, the case may proceed and be concluded in the same manner, so far as possible, as though the death or incompetency had not occurred.
"Once the terms are defined and confirmed in a Chapter 13 plan, it might be possible to ‘further administer’ a bankruptcy case even though the debtor died if there is a source of payments or sufficient payments have been made such that a discharge may be warranted." In re Waring, 555 B.R. 754, 765 (Bankr. D. Colo. 2016) (collecting cases). Here, a Chapter 13 plan was confirmed prior to Sheldon’s passing, and a source of payments remained – his joint-filer and wife, Margaret. Furthermore, Margaret did make those payments and appears to have maintained this plan to near completion.1 Not only was further administration possible at the time of Sheldon’s passing, further administration successfully occurred.
Furthermore, the Court notes that "[i]n the ordinary course, non-consensual dismissal of a bankruptcy case requires a formal motion, notice, and hearing." In re Erickson, 183 B.R. 189, 195 (Bankr. D. Minn. 1995). When, as here, no party filed a motion requesting dismissal, there is no need for a motion to "continue case administration" as that is the default absent a request for dismissal.
Waiver of Discharge Requirements
The material relief requested in the motion at issue is a request for certain discharge requirements, outlined in 11 U.S.C. § 1328, to be waived for Sheldon. One court, in considering the applicability of the § 1328 certification requirements to a deceased debtor, stated the following: "The fact that a debtor has died does not necessarily
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preclude entry of a discharge. However, for a discharge to be granted, a debtor must still meet the requirements of 11 U.S.C. § 1328." In re Bouton, 2013 WL 5536212 at
*1 (Bankr. S.D. Ga. 2013). The Court in Bouton avoided the requirements by noting that the instructional course requirement is waived for deceased debtors pursuant to § 109(h)(4), and that domestic support certification requirement imposed by § 1328(a) is only applicable to debtors who do owe domestic support payments.
The request here is materially different from the request in Bouton. Debtor requests waiver of two requirements: (1) the domestic support payment certification imposed by § 1328(a); and (2) the felony disclosure requirement imposed by § 1328(h).
Regarding the former, Debtor did owe a domestic support obligation. 11 U.S.C.
§ 1328(a) states, in pertinent part:
Subject to subsection (d), as soon as practicable after completion by the debtor of all payments under the plan, and in the case of a debtor who is required by a judicial or administrative order, or by statute, to pay a domestic support obligation, after such debtor certifies that all amounts payable, after such debtor certifies that all amounts payable under such order or such statute that are due on or before the date of the certification (including amounts due before the petition was filed, but only to the extent provided for by the plan) have been paid . . .
There does appear to be at least one bankruptcy court that specifically addressed the applicability of the § 1328(a) and (h) requirements to a deceased debtor in a jointly filed Chapter 13 case, In re Levy, 2014 WL 1323165 (Bankr. N.D. Ohio 2014).
Notably, the Court stated the following:
Only two documents now stand between the deceased debtor and a discharge: the certifications regarding DSO obligations and § 1328(h). Since further administration was possible, the question becomes whether there is anything either so personal or unique about the end-of-case requirements to prevent
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either waiver or satisfaction of the requirements by another on behalf [of] a deceased debtor.
Id. at *2. Summarily, the court in Levy reached the following conclusion:
Since the § 1328(a) certification appears to fall under the latter category [not altering liability on a debt], the court finds no reason that the DSO certification requirement cannot be undertaken by another in appropriate circumstances.
The requirement therefore does not impede "further administration" contemplated under Rule 1016.
Similarly, the court reaches the same conclusion about § 1328(h), albeit along slightly divergent reasoning.
Id. at *3. The Court agrees with the result reached in Levy. If the certification requirements imposed by § 1328 (a) & (h) invariably required an action to be taken by the debtor personally, the purpose of Fed. R. Bankr. P. Rule 1016, which permits the continued administration of a Chapter 13 case when appropriate, would be frustrated.
Finally, the Levy stated the following:
For the purposes of filing end of the case documents, the court finds that a person with specific knowledge of the deceased debtor’s finances may act on behalf of the debtor in completing the § 1328(a) and (h) certifications. To establish knowledge, the person must file an affidavit outlining a sufficient factual foundation in order to establish a fitting record.
Id. at *4. In accordance with Levy, the Court will not outright waive a requirement
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imposed by the Bankruptcy Code, but will allow the requirement to be satisfied by an individual with "specific knowledge of the deceased debtor’s finances."
TENTATIVE RULING
In accordance with the above, the Court is inclined to GRANT the motion only to the extent of allowing a qualified individual to complete the § 1328 requirements on behalf of Debtor. The Court declines to enter an order continuing case administration, as administration will continue absent a request for dismissal and a subsequent order.
APPEARANCES REQUIRED.
Debtor(s):
Sheldon Clark Chaffer Represented By Jenny L Doling
Joint Debtor(s):
Margaret Diane Chaffer Represented By Jenny L Doling
Movant(s):
Margaret Diane Chaffer Represented By Jenny L Doling Jenny L Doling
Sheldon Clark Chaffer Represented By Jenny L Doling Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
12:30 PM
Amrane (RS) Cohen (TR)
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jeffrey Fagin Represented By
Dana Travis
Joint Debtor(s):
Theresa Fagin Represented By Dana Travis
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 95
- NONE LISTED -
Debtor(s):
Jason Lee Fernandes Represented By David Lozano
Joint Debtor(s):
Regina Collette Fernandes Represented By David Lozano
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 62
- NONE LISTED -
Debtor(s):
Barry Thomas Emerzian Represented By Tyson Takeuchi Scott Kosner
Joint Debtor(s):
Sherry Lynn Emerzian Represented By Tyson Takeuchi Scott Kosner
Movant(s):
Amrane (RS) Cohen (TR) Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
From: 2/9/17, 3/9/17 EH
Docket 63
- NONE LISTED -
Debtor(s):
Emilio Aispuro Represented By Clifford Bordeaux
Joint Debtor(s):
Luz Angelica Aispuro Represented By Clifford Bordeaux
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 48
- NONE LISTED -
Debtor(s):
Valerie Shenase Price Represented By Manfred Schroer
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (SA) Cohen (TR)
12:31 PM
From: 2/9/17 EH
Docket 52
- NONE LISTED -
Debtor(s):
Ray Leon Esparza Represented By Chris A Mullen
Joint Debtor(s):
Lori Lynn Esparza Represented By Chris A Mullen
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
From: 3/9/17 EH
Docket 82
- NONE LISTED -
Debtor(s):
Jorge N. Perez Represented By
Lauro Nick Pacheco Jr.
Joint Debtor(s):
Myrna R. Perez Represented By
Lauro Nick Pacheco Jr.
Movant(s):
Amrane (RS) Cohen (TR) Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 106
- NONE LISTED -
Debtor(s):
Zerry B Holefield Represented By
Dale Parham - INACTIVE - Michael Smith
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
EH
Docket 129
- NONE LISTED -
Debtor(s):
William D. Sims Represented By Patricia M Ashcraft
Joint Debtor(s):
Nancy J. Sims Represented By Patricia M Ashcraft
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
EH
Docket 104
- NONE LISTED -
Debtor(s):
Anthony Ochoa Represented By Dana Travis
Joint Debtor(s):
Ramona Patricia Ochoa Represented By Dana Travis
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 64
- NONE LISTED -
Debtor(s):
Vilma Rosa Represented By
Raymond Gaitan
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:32 PM
Adv#: 6:17-01054 Amarillo College of Hairdressing, Inc. v. Lopez
EH
Docket 1
- NONE LISTED -
Debtor(s):
Javier Lopez Represented By
Christopher Hewitt
Defendant(s):
Javier Lopez Pro Se
Joint Debtor(s):
Carmen Lopez Represented By Christopher Hewitt
Plaintiff(s):
Amarillo College of Hairdressing, Represented By
Eamon Jafari
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
From: 3/23/17, 4/27/17 Also #20- #22
EH
Docket 61
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Joseph Robert Byrne Represented By Jenny L Doling Jenny L Doling Summer M Shaw Summer M Shaw
12:32 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 60
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Joseph Robert Byrne Represented By Jenny L Doling Jenny L Doling Summer M Shaw Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
12:32 PM
Also #19- #22
EH
Docket 56
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #19- #21
EH
Docket 65
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 40
- NONE LISTED -
Debtor(s):
Donnell Leffridge Represented By Patricia Rodriguez
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 45
- NONE LISTED -
Debtor(s):
Anna Doreen Valles Represented By
Ramiro Flores Munoz
Joint Debtor(s):
Andy Valles Jr. Represented By
Ramiro Flores Munoz
Movant(s):
Andy Valles Jr. Represented By
Ramiro Flores Munoz
Anna Doreen Valles Represented By
Ramiro Flores Munoz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
From: 4/27/17 EH
Docket 37
- NONE LISTED -
Debtor(s):
Jeffrey Michael Berger Represented By Jenny L Doling
Joint Debtor(s):
Debra Lynn Berger Represented By Jenny L Doling
Movant(s):
Debra Lynn Berger Represented By Jenny L Doling Jenny L Doling
Jeffrey Michael Berger Represented By Jenny L Doling Jenny L Doling Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 36
5/11/17
Background:
On December 28, 2016, Frank & Barbara Horzen ("Debtors") filed a Chapter 13 voluntary petition. On January 27, 2017, the IRS filed an unsecured claim ("Claim 1") in the amount of $49,892.04, of which $33,919.96 was claimed as priority debt. On April 11, 2017, the IRS amended its claim ("Amended Claim 1") reducing the total claim and the priority claim to $4,979.67 and $4,397.01, respectively. On April 18, 2017, Debtors filed a claim objection.
Debtors objection fails to acknowledge that the IRS amended its claim. The objection states that Debtors have filed all required taxes during the previous four years and do not have any tax debt. Debtors appear to provide redacted tax returns for 2010-2015, although the Court notes that the tax returns are not properly authenticated.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie
12:32 PM
evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
The basis for Amended Claim #1 is unpaid income taxes assessed against debtor-wife for 2013 and 2014. The amount of Amended Claim #1 is identical to the amount shown on the applicable tax returns. Debtors have provided no evidence that those taxes were paid – the motion does not even allege that taxes were paid, but instead argues that returns were filed.
12:32 PM
It does not appear that Debtors were aware that the IRS amended their proof of claim. Instead of challenging the validity of Amended Claim 1, Debtors appear to challenge the validity of Claim 1, which has been superseded by Amended Claim 1. Because Debtors have not provided any argument or evidence to challenge the validity of Amended Claim 1, Debtors are not entitled to their requested relief.
Tentative Ruling
The Court is inclined to OVERRULE the objection.
APPEARANCES REQUIRED.
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
Movant(s):
Barbara A Horzen Represented By Paul Y Lee
Frank A Horzen Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 17
- NONE LISTED -
Debtor(s):
Michelle J Meredith Pro Se
Movant(s):
Michelle J Meredith Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Paulo Cesar Machuca Represented By Scott Kosner
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Michael Montoya Represented By Suzette Douglas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Luis Castillo Represented By Sunita N Sood
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gilles Chukwuma Amajoyi Represented By Lionel E Giron
Trustee(s):
Todd A. Frealy (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Luis A Jovel Represented By
Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Diana J Everett Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Meghan McConaghy Represented By Neil R Hedtke
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Katina Deneen Edwards Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Arnold Rudy Morales Represented By John F Brady
Joint Debtor(s):
Melanie Gae Morales Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maria Luisa Chavez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Tyra Bagby Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joseph DeSilva Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gilbert R Nava Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 97
- NONE LISTED -
Debtor(s):
Kenneth Vernell Hawkins Represented By
Craig J Beauchamp
Joint Debtor(s):
Brenda A Hawkins Represented By
Craig J Beauchamp
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:33 PM
Docket 68
- NONE LISTED -
Debtor(s):
Anthony E Turkson Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 31
- NONE LISTED -
Debtor(s):
Daniel J Hedlund Represented By David L Nelson
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 59
- NONE LISTED -
Debtor(s):
Adrienne J Garcelli Represented By Andy C Warshaw
Joint Debtor(s):
Paul Garcelli Represented By
Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 35
- NONE LISTED -
Debtor(s):
Valicia LaShawn Fennell Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 41
- NONE LISTED -
Debtor(s):
Darryl R Brown Represented By
M Wayne Tucker
Joint Debtor(s):
Kimberly J Brown Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 27
- NONE LISTED -
Debtor(s):
Donald L Maddox Represented By Michael Smith
Joint Debtor(s):
Lisa A Maddox Represented By Michael Smith
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 30
- NONE LISTED -
Debtor(s):
Cresencio Villamayor Irasusta III Represented By
Carey C Pickford
Joint Debtor(s):
Jennifer P Irasusta Represented By Carey C Pickford
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: USA BANK NATIONAL ASSOCIATION
From: 4/4/17 EH
Docket 68
- NONE LISTED -
Debtor(s):
Dina Guadalupe Garay Represented By Aalok Sikand
Vito Torchia - DISBARRED -
Movant(s):
U.S. BANK NATIONAL Represented By Megan E Lees
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
From: 5/2/17 EH
Docket 57
05/02/2017
Service: Proper Opposition: Yes
Debtors’ sole basis for opposition, without evidence, is that the Property is necessary to reorganization because it is a family home. However, the opposition fails to address the nonpayment of postpetition mortgage. Additionally, Debtors request that the request for waiver of the 14-day stay be denied for lack of cause. However, the failure of Debtors to pay Movant in approximately 11 months is a sufficient basis to warrant waiver of the 14-day stay. Based on the foregoing, the Court is inclined to GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and GRANT the relief requested under ¶3. The request for an APO is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Enrique Lopez Matias Represented By John F Brady Lisa H Robinson
10:00 AM
Joint Debtor(s):
Teresa Duarte Matias Represented By John F Brady Lisa H Robinson
Movant(s):
U.S. Bank National Association Represented By Nina Z Javan Natalie E Zindorf Caren J Castle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
From: 3/28/17 EH
Docket 48
03/28/2017
Service: Proper Opposition: Yes
Parties to discuss Debtors’ proposed terms for an APO. APPEARANCES REQUIRED.
Debtor(s):
Mario C Binuya Represented By Michael Smith
Joint Debtor(s):
Linda Binuya Represented By
Michael Smith
Movant(s):
U.S. Bank National Association Represented By April Harriott Matthew R. Clark
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELL FARGO BANK
CASE DISMISSED: 3/30/17
From: 3/28/17 EH
Docket 45
03/28/2017
Service: Proper Opposition: Yes
Debtor asserts she intends to bring post-petition payments current by the hearing date and has reached out to Movant to propose an APO.
APPEARANCES REQUIRED.
Debtor(s):
Gwendolyn Washington Represented By Julie J Villalobos
Movant(s):
WELLS FARGO BANK, N.A., Represented By Matthew R. Clark Sheri Stein Charlse
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WILMINGTON SAVINGS FUND SOCIETY
EH
Docket 39
05/16/2017
Service: Proper Opposition: Yes
The Debtor acknowledges the missed payments and asserts that he intends to take money from his 401k to bring the arrears current. The Debtor indicates he has $10,000 to pay towards the arrears now and is requesting an additional 45 days for cure the remainder.
APPEARANCES REQUIRED.
Debtor(s):
Dexter Humphrey Represented By Michael J Hemming
Movant(s):
Wilmington Savings Fund Society, Represented By
Bonni S Mantovani Diana Torres-Brito Cassandra J Richey
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK
EH
Docket 74
05/16/2017
Service: Proper Opposition: Yes
The Debtors assert they have made payments for the last three months but are aware they are otherwise behind on payments. Debtor indicates that he receives payments for jobs on completion and Debtors are requesting an APO to cure the remaining deficiency.
APPEARANCES REQUIRED.
Debtor(s):
Edward Edmund Zozaya Represented By Dana Travis
Joint Debtor(s):
Georgia Parrilla Zozaya Represented By Dana Travis
Movant(s):
Wells Fargo BAnk, N.A. Represented By April Harriott Sean C Ferry
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WILMINGTON SAVINGS FUND SOCIETY FSB
EH
Docket 32
05/16/17
Service: Proper Opposition: Yes
The Order Confirming Chapter 13 Plan entered on December 28, 2016, corroborates the Debtor’s assertion that the Debtor’s payments are being made to Movant by the Chapter 13 Trustee via conduit payments. Additionally, the Debtor has provided evidence of the Trustee’s claim registry which shows payments being disbursed by the Trustee and also reimbursements being made by the Movant. Based on the Trustee’s registry, the Debtor appears to have made payments of at least $6,000 postconfirmation. Further, the request for relief page of the Motion is blank. On that basis, the Court’s tentative ruling is to DENY the Motion.
APPEARANCES REQUIRED.
Debtor(s):
Ernest Leyva Represented By
Brad Weil
Movant(s):
Wilmington Savings Fund Society, Represented By
Cassandra J Richey
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ED KALEFF, FATHER JOSEPH SHEA
From: 3/28/17, 4/4/17, 5/2/17 EH
Docket 17
03/28/2017
The Movants seek relief to pursue a state court action against the Debtor and related parties. At minimum, the Movants must attach the complaint for the Court to examine any potential impacts the Complaint may have on the instant bankruptcy case.
APPEARANCES REQUIRED.
Debtor(s):
Bingo Innovations of California, Inc. Represented By
Stuart G Steingraber
Movant(s):
Ed Kalef, Father Joseph Shea Pro Se
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: ALLY FINANCIAL INC
From: 4/25/17 EH
Docket 25
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT relief from § 1301(a) co-debtor stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Movant(s):
Ally Financial Inc. Represented By Adam N Barasch
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: JULIE REYNOLDS
From: 4/25/17 EH
Docket 9
TENTATIVE RULING:
The extent of the relief requested by Movant is unclear. Outside of a motion for a protective order, which was scheduled to be heard in state court last week, there are only general references to the conclusion of the dissolution proceeding as well as "miscellaneous issues". Furthermore, there are technical issues with the motion: (1) Debtor was not properly served; (2) the motion requests retroactive annulment of the stay but provides no cause or declaration; and (3) the request for relief does not even request relief from the automatic stay. Finally, the Court agrees with the Trustee that issues regarding adjudication of property of the estate appropriately belong within the Bankruptcy Court. Given the technical issues and the fact that the motion is unclear what Movant is requesting, the Court is inclined to DENY the motion without prejudice.
APPEARANCES REQUIRED.
10:00 AM
Debtor(s):
John Scott Reynolds Represented By Jenny L Doling
Movant(s):
Julie Ann Reynolds Represented By Paul M Stoddard
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: NISSAN MOTOR ACCEPTANCE CORPORATION
EH
Docket 24
05/16/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. DENY request for APO as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Victor Balvaneda Represented By John F Brady
Movant(s):
NISSAN MOTOR ACCEPTANCE Represented By
Michael D Vanlochem
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 9
05/16/2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Levester Jackson Represented By Todd L Turoci
Joint Debtor(s):
Janese Gilmore Represented By Todd L Turoci
Movant(s):
Nationstar Mortgage LLC Represented By Angie M Marth
10:00 AM
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: DAIMLER TRUST
EH
Docket 9
05/16/2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Michael R. Lopez Represented By Keith Q Nguyen
Movant(s):
Daimler Trust Represented By
Sheryl K Ith
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: BIANI BERLENDA MORA
EH
Docket 10
05/16/17
The Debtor asserts that in the prior case she fell behind on payments due to a loss of social security income for her daughter. The I and J in the current case reflect a reduction. However, the declaration lacks specificity as to why the benefit was reduced. Additionally, although the Debtor also indicates she experienced "unexpected expenses" during the prior case, there is no explanation of what these expenses were, or how much they were, such that the Court cannot determine whether the expenses were incurred in good faith.
APPEARANCES REQUIRED.
Debtor(s):
Biani Berlenda Mora Represented By Steven A Alpert
Movant(s):
Biani Berlenda Mora Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WILLIAM AND JENNIFER SCHAEFR
EH
Docket 17
05/16/17
In support of their Motion to Continue/Impose, the Debtors vaguely assert that their new budget will ensure that payments can be made on time to avoid the situation that occurred in the last case where they did not have funds to tender to the Trustee.
However, the I & J have not changed at all from one case to the next, the Debtors’ budget is extremely lean for a family of six, and there is otherwise no explanation of why the funds were not "received" on time in the last case. On the basis of the foregoing, the tentative ruling is to DENY the Motion.
APPEARANCES REQUIRED.
Debtor(s):
William J Schaefer Represented By Patricia M Ashcraft
Joint Debtor(s):
Jennifer L. Schaefer Represented By Patricia M Ashcraft
Movant(s):
Jennifer L. Schaefer Represented By Patricia M Ashcraft
10:00 AM
William J Schaefer Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
EH
Docket 9
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Pro Se
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
2:00 PM
Employment Development Pro Se
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Movant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
Also #16 EH
Docket 1
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Pro Se
Bangerter Frazier & Graff PC Represented By
2:00 PM
Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
Employment Development Pro Se
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
2:00 PM
From: 11/2/16, 12/1/16, 1/24/17, 2/14/17,3/7/17 Also #19 & #20
EH
Docket 4
- NONE LISTED -
Debtor(s):
Sam Daniel Dason DDS,A Represented By Michael S Kogan
Movant(s):
Sam Daniel Dason DDS,A Represented By Michael S Kogan Michael S Kogan Michael S Kogan Michael S Kogan
2:00 PM
Also #18 & #20 EH
Docket 98
- NONE LISTED -
Debtor(s):
Sam Daniel Dason DDS,A Represented By Michael S Kogan
2:00 PM
From: 12/6/16, 1/24/17, 2/14/17,3/7/17 Also #18 & #19
EH
Docket 13
NONE LISTED -
Debtor(s):
Sam Daniel Dason DDS,A Represented By Michael S Kogan
2:00 PM
Docket 89
5/16/17
On November 10, 2016 ("Petition Date"), B & B Family, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. The Debtor is owned by Patricial Forte (who owns 50% of shares) and by Randall and Marianne Richey, husband and wife, who own the remaining 50% of shares in the Debtor (collectively, "Shareholders")
Debtor operates Oggi’s Pizza and Brewing Company in Apple Valley, California. Debtor has fifty-five employees. The Debtor’s Schedules show that it had approximately $114,662.50 in assets as of the Petition Date. The Debtor’s assets consist primarily of leased equipment, business licenses, and liquid assets in the form of cash and accounts.
On March 31, 2017, Debtor filed its Disclosure Statement and Chapter 11 Plan of Reorganization. On May 2, 2017, Comerica Bank filed a Limited Response to the Debtor’s Disclosure Statement pointing simply to the Debtor’s omission of its franchise agreement as an executory contract being assumed. In response, the Debtor amended its Disclosure Statement and Plan on May 2, 2017 (the "Amended DS and Plan"). Additionally, on May 3, 2017, the Debtor filed redline versions of the Amended DS and Plan reflecting the changes made since the March 31, 2017, filings.
The Chapter 11 Plan’s proposed effective date is the first day of the first full month
2:00 PM
after entry of the final order confirming plan (but no earlier than 8/01/17). Classes of claims are categorized as follows:
Claims Classification
Administrative Claims:
UST Fees - $4,875 (estimated), in full on effective date
Turoci Firm - $40,000 (estimated)/Terms: in full on effective date
Priority Tax Claims:
IRS: $5,251.48/ Terms: in full on effective date
California BOE: $125,750.40/Terms: 48 months, 7% interest, $3,011.25/ mo.
Class 1: Comerica Bank (Impaired)
Nature of lien: first priority security interest in all of Debtor’s assets (D values at $150,000)
· Claim: $494,123.90
Treatment: Bifurcated claim – Secured claim of $150,000, Unsecured Claim of
$344,123.90
Secured Claim Terms: 60 months, 6% interest, $2,899.92/mo.
Unsecured Claim treated with Class 6 GUCs
Class 2: FC Marketplace aka Pioneer Park (Impaired)
2:00 PM | ||
CONT... | B & B Family, Incorporated Chapter 11 | |
· | Nature of lien: second priority security interest in all Debtor’s assets | |
· | Unsecured claim of $88,963.76 | |
· | Treatment: treated with Class 6 GUCs | |
· | Plan proposes to avoid the lien of FC Marketplace on entry of confirmation order | |
5) | Class 3: Oggi’s Corporate (Impaired) | |
· | Nature of lien: third priority lien in all Debtor’s assets | |
· | Unsecured claim of $54,106.12 | |
· | Treatment: paid with Class 6 GUCs | |
· | Plan proposes to avoid the lien of FC Marketplace on entry of confirmation order | |
6) | Class 4: Financial Pacific Leasing | |
· | Secured as to leased restaurant equipment which D values at $2,000 | |
· | Secured Claim of $2,000, Treatment: Paid in full on effective date (unimpaired) | |
· | Unsecured Claim of $42,864.40 (paid with class 6 GUCs) (impaired) | |
· | Plan proposes to avoid the lien of FC Marketplace on entry of confirmation order | |
7) | Class 5: High Desert Prime, LP (Impaired) | |
· | Landlord | |
2:00 PM
Debtor is assuming the lease and proposes to cure the arrears owed to landlord
· Claim: $178,499.98
Treatment: 48 months, 0% interest (per agreement with HDP), $3,718.75/mo.
Class 6: General Unsecured Creditors (Impaired)
· Total Claims: $636,718.69
· Dividend: 17% or $120,000
Treatment: $1,000/mo. for first 48 months and $6,000 for months 48-60
Note: Pawnee lease for bar stools, dishwasher etc., will be rejected and Pawnee filed an unsecured claim and will be treated as such.
Insiders/Equity Holders
No Insider Claims
Equity to retain stock subject to Section VII (which provides potentially for new value although, if necessary)
Plan Funding
Debtor indicates it will have $60,000 cash on hand on date of confirmation hearing (which Court presumes to mean the Effective Date).
Disposable income projection is $11,000 for five years
Management
2:00 PM
Patricia Forte (50% owner) is current President and will step down as President Randall Richey will remain Secretary
Marianne Richey, current CFO will become President and CFO
Other Terms
D will be disbursing agent with no compensation unclaimed distributions to revert to reorganized Debtor.
Adequate Information
A Chapter 11 disclosure statement is required to contain "adequate information" pursuant to 11 U.S.C. § 1125(b). Section 1125(f)(2) provides that: "the court may approve a disclosure statement submitted on standard forms approved by the court or adopted under section 2075 of title 28." The United States Courts have devised a disclosure statement template for small businesses, Form B25B, which Debtor generally adopted as to format.
As to the substance of a disclosure statement, 11 U.S.C. § 1125(a)(1) defines "adequate information" as:
information of a kind, and in sufficient detail as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor’s books and records, including a discussion of the potential material Federal tax consequences of the plan to the debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims or interests in the case, that would enable such a hypothetical investor of the relevant class to make an informed judgment about the plan, but adequate information need not include such information about any other possible or proposed plan and in determining
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whether a disclosure statement provides adequate information, the court shall consider the complexity of the case, the benefit of additional information to creditors and other parties in interest, and the cost of providing additional information
The type of information required varies with the circumstances. See, e.g., In re Jeppson, 66 B.R. 269, 292 (Bankr. D. Utah 1986) (listing nineteen categories of information commonly required); see also In re Malek, 35 B.R. 443, 443-44 (Bankr.
E.D. Mich. 1983) (listing minimum requirements).
Plan Feasibility
"There are numerous decisions which hold that where a plan is on its face nonconfirmable, as a matter of law, it is appropriate for the court to deny approval of the disclosure statement describing the nonconfirmable plan." In re Silberkraus, 253
B.R. 890, 899 (Bankr. C.D. Cal. 2000) (collecting cases).
Here, the Debtor asserts that it needs a total of $10,630 on a monthly basis to make plan payments and projects that after ordinary course expenses, it has a disposable income of approximately $11,000 with which to make those payments.
ISSUES TO BE ADDRESSED AT HEARING ON APPROVAL OF DISCLOSURE STATEMENT
The Court has examined the Debtor’s Amended DS and Plan to determine whether "adequate information has been provided and has identified the following issues to be addressed:
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Page 6:9-15, reference to "Docket No. 88" should be changed to reference "Docket No. 98"
In the Plan, where the Debtor describes Oggi’s Corporate Debt, there appears to be a discrepancy regarding Oggi’s Corporate’s claim (i.e. $54,106.12 is the "balance owed" but the Debtor in the next sentence proposes a $88,963.76 allowed claim for this creditor)
Patricia Forte is alternately referred to as "CEO" or as "President" in the DS and Plan. The Debtor should use terms consistently to avoid confusion.
The DS and Plan contemplate bifurcation of Comerica and FPL’s claims and avoidance of remaining junior liens. However, the Docket does not reflect that any Motion to Value has yet been filed to determine the value of the collateral and notice to juniorlienholders that Debtor intends to avoid their liens on confirmation.
There is currently no proposal for new value. Therefore, if Class 6 does not accept the plan, the Plan cannot be confirmed with Shareholders retaining any interest in the reorganized Debtor.
Part 10, the Effect of Confirmation of Plan should clearly identify the lienholders whose liens shall be extinguished on confirmation of the Debtor’s Plan.
Part 9 is very lean on details regarding potential tax consequences on feasibility. Specifically, as to how Debtor determined the impact on feasibility, whether an accountant was consulted or otherwise how the Debtor is qualified to make a representation regarding the potential tax impact. Additionally, a question exists of the margin of potential increased tax liability.
There is no evidence of the historical data referenced by Marianne Richey
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which is referenced in the DS declaration by which she estimated the projected figures.
APPEARANCES REQUIRED.
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
2:00 PM
Docket 20
05/16/2017
BACKGROUND
On January 9, 2017 ("Petition Date"), TNC, Inc. ("Debtor") filed its petition for chapter 11 relief. The Debtor is a single real estate brokerage located in Ontario, CA. The owner of the Debtor is Nasim Ahmed who is the sole shareholder.
On April 20, 2017, the Office of the United States Trustee ("UST") filed a Motion to Dismiss or Convert Chapter 11 Case (the "Motion"). The Motion, though properly served, is unopposed.
The basis for the Motion is the assertion of the UST that the Debtor has failed to comply with its debtor-in-possession duties because it has failed to file any of the three monthly operating reports due since the Petition Date. Additionally, the UST asserts that the Debtor’s general liability insurance has expired as of March 16, 2017.
DISCUSSION
Section 1112(b)(1) provides:
Except as provided in paragraph (2) and subsection (c), on request of a
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party in interest, and after notice and a hearing, the court shall convert a case under this chapter to a case under chapter 7 or dismiss a case under this chapter, whichever is in the best interests of creditors and the estate, for cause unless the court determines that the appointment under section 1104(a) of a trustee or an examiner is in the best interests of creditors and the estate.
Section 1112(b)(4) sets forth a nonexhaustive list of what constitutes "cause" to convert or dismiss a case under § 1112(b)(1). In re Consol. Pioneer Mortg. Entities, 248 B.R. 368, 375 (9th Cir. BAP 2000), aff'd, 264 F.3d 803 (9th Cir. 2001). "The
movant bears the burden of establishing by preponderance of the evidence that cause exists." Sullivan v. Harnisch (In re Sullivan), 522 B.R. 604, 614 (9th Cir. BAP 2014) (citing StellarOne Bank v. Lakewatch, LLC (In re Park), 436 B.R. 811, 815 (Bankr.W.D.Va.2010)).
If the bankruptcy court finds that cause exists to grant relief under § 1112(b) (1), it must then: "(1) decide whether dismissal, conversion, or the appointment of a trustee or examiner is in the best interest of creditors and the estate; and (2) identify whether there are unusual circumstances that establish that dismissal or conversion is not in the best interest of creditors and the estate." In re Sullivan, 522 B.R. at 612 (citing § 1112(b)(1), (b)(2), and Shulkin Hutton, Inc., P.S. v. Treiger (In re Owens), 552 F.3d 958, 961 (9th Cir.2009)). In choosing between dismissal or conversion, a bankruptcy court must consider the interests of all creditors. Id. (citing In re Owens, 552 F.3d at 961). "If cause is established, the decision whether to convert or dismiss the case falls within the sound discretion of the court." Id. (citing Mitan v. Duval (In re Mitan), 573 F.3d 237, 247 (6th Cir .2009) and Nelson v. Meyer (In re Nelson), 343 B.R. 671, 675 (9th Cir. BAP2006)).
Here, the UST’s asserted grounds for dismissal include the failure to comply with reporting requirements and the failure to maintain insurance which fall squarely within the list of items constituting "cause" to convert or dismiss: (1) unexcused failure to satisfy timely any filing or reporting requirement established by this title or by any rule applicable to a case under this chapter, and (2) failure to maintain
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appropriate insurance that poses a risk to the estate or to the public. 11 U.S.C. §§ 1112 (b)(4)(C) and (F). The UST has established cause. Moreover, as noted by the UST, the schedules do not reflect ownership of any real property or other significant assets. As such, it does not appear that liquidation would result in any benefit to creditors. For these, reasons, the Court finds that dismissal is warranted. Finally, the Court notes that the Debtor has failed to oppose the Motion and deems its nonopposition as consent to the granting of the relief requested pursuant to LBR 9013-1(h).
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the Motion and DISMISS the Debtor’s case.
APPEARANCES REQUIRED.
Debtor(s):
TNC, Inc. Represented By
Stephen R Wade
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
11:00 AM
EH
Docket 29
Debtor(s):
Ronald Leroy Stearns Represented By John F Mansour
Joint Debtor(s):
Alicia Gay Stearns Represented By John F Mansour
Movant(s):
Ronald Leroy Stearns Represented By John F Mansour
Trustee(s):
Lynda T. Bui (TR) Pro Se
11:00 AM
EH
Docket 30
Debtor(s):
Ronald Leroy Stearns Represented By John F Mansour
Joint Debtor(s):
Alicia Gay Stearns Represented By John F Mansour
Movant(s):
Alicia Gay Stearns Represented By John F Mansour John F Mansour
Ronald Leroy Stearns Represented By John F Mansour
Trustee(s):
Lynda T. Bui (TR) Pro Se
11:00 AM
Also #4 EH
Docket 70
Debtor(s):
James Lloyd Walker Pro Se
Movant(s):
Robert Whitmore (TR) Represented By Franklin C Adams
Trustee(s):
Robert Whitmore (TR) Represented By Franklin C Adams
11:00 AM
EH
Docket 72
Debtor(s):
James Lloyd Walker Pro Se
Movant(s):
Robert Whitmore (TR) Represented By Franklin C Adams
Trustee(s):
Robert Whitmore (TR) Represented By Franklin C Adams
11:00 AM
FROM: 5/3/17
EH
Docket 46
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
11:00 AM
Also #7 EH
Docket 33
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Movant(s):
Efren Diaz Estrada Represented By
W. Derek May
W. Derek May
W. Derek May
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brianna L Frazier Rika Kido
Ryan D ODea
11:00 AM
EH
Docket 39
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Movant(s):
Efren Diaz Estrada Represented By
W. Derek May
W. Derek May
W. Derek May
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brianna L Frazier Rika Kido
Ryan D ODea
11:00 AM
EH
Docket 39
Debtor(s):
Charles David Arthur Represented By Anerio V Altman
Joint Debtor(s):
Claire Bigornia Blanza Arthur Represented By Anerio V Altman
Movant(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
2:00 PM
Adv#: 6:13-01233 Continental East Fund IV, LLC v. Wakefield et al
From: 9/18/13. 2/12/14, 4/23/14, 8/20/14, 10/1/14, 10/22/14, 1/14/15, 2/18/15, 6/17/15, 8/26/15, 9/2/15, 11/18/15, 5/18/16, 5/25/16, 7/27/16, 1/11/17, 4/12/17
EH
Docket 1
Debtor(s):
David Wayne Wakefield Represented By Jordan Nils Bursch
Robert E Huttenhoff
Defendant(s):
Elise Wakefield Represented By
Robert E Huttenhoff
David Wakefield Represented By
Robert E Huttenhoff
Joint Debtor(s):
Elise Wakefield Represented By Jordan Nils Bursch
Robert E Huttenhoff
Plaintiff(s):
Continental East Fund IV, LLC Represented By Kyra E Andrassy
William A Floratos
2:00 PM
Trustee(s):
Howard B Grobstein (TR) Represented By Alan W Forsley
2:00 PM
Adv#: 6:15-01223 Frazer (TR) v. Kengni
From: 10/7/15, 2/3/16, 4/6/16, 6/29/16, 8/31/16, 12/14/16, 2/8/17, 4/26/17
EH
Docket 1
Debtor(s):
Bertrand Tenke Kengni Represented By Terrence Fantauzzi
Defendant(s):
Carisa Kengni Represented By Kamola L Gray
Plaintiff(s):
Helen R. Frazer (TR) Pro Se
Trustee(s):
Helen R. Frazer (TR) Pro Se
2:00 PM
Adv#: 6:15-01304 Cisneros v. Kajan Mather & Barish, a professional corporation
A. Cisneros against Kajan Mather & Barish, a professional corporation, MATHER KUWADA, a limited liability partnership, MATHER LAW CORPORATION, a California corporation, LAW OFFICE OF KENNETH M. BARISH, Steven R. Mather, Kenneth M. Barish. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 1/13/16, 3/30/16, 4/6/16, 5/4/16, 5/25/16, 9/28/16, 11/2/16, 11/9/16, 12/14/16, 1/11/17
Also #12 EH
Docket 1
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
Steven R. Mather Pro Se
Kenneth M. Barish Pro Se MATHER LAW CORPORATION, Represented By
Michael S Kogan
Kajan Mather & Barish, a Represented By
2:00 PM
Michael S Kogan
MATHER KUWADA, a limited Represented By
Michael S Kogan
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes Franklin R Fraley Jr Sue-Ann L Tran Jasmine W Wetherell
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01304 Cisneros v. Kajan Mather & Barish, a professional corporation
EH
Docket 133
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
Steven R. Mather Pro Se
Kenneth M. Barish Pro Se MATHER LAW CORPORATION, Represented By
Michael S Kogan
Kajan Mather & Barish, a Represented By Michael S Kogan
MATHER KUWADA, a limited Represented By
Michael S Kogan
Movant(s):
LAW OFFICE OF KENNETH M. Pro Se
Plaintiff(s):
A. Cisneros Represented By
2:00 PM
Trustee(s):
D Edward Hays Chad V Haes Franklin R Fraley Jr Sue-Ann L Tran Jasmine W Wetherell
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
(6) of the Federal Rules of Civil Procedure From: 4/26/17
Also #14 & #15 EH
Docket 44
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Movant(s):
Mathew Grimshaw Pro Se
Larry D Simons (TR) Represented By George A Saba Matthew Grimshaw
D. Edward Hays Pro Se
Larry D Simons (TR) Pro Se
2:00 PM
Marshack Hays LLP Pro Se
D. Edward Hays Represented By George A Saba Matthew Grimshaw
Larry D Simons (TR) Pro Se
Marshack Hays LLP Represented By George A Saba Matthew Grimshaw
Mathew Grimshaw Represented By George A Saba Matthew Grimshaw
David Wood Represented By
George A Saba Matthew Grimshaw
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
From: 11/2/16, 2/1/17, 2/15/17, 4/26/17 Also #13 & #15
EH
Docket 1
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
From: 4/26/17 Also #13 & #14 EH
Docket 39
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
David A. Wood Pro Se
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays
2:00 PM
David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:16-01140 Simons v. Lindgren
From: 9/7/16, 12/7/16, 3/1/17, 4/12/17 Also #17
EH
Docket 1
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Charles Lindgren Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
2:00 PM
D Edward Hays
2:00 PM
Adv#: 6:16-01140 Simons v. Lindgren
Also #16 EH
Docket 14
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Charles Lindgren Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Movant(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack
2:00 PM
Sarah Cate Hays D Edward Hays
2:00 PM
Adv#: 6:16-01170 California Solar Thermal, Inc. v. Rothman
From: 9/7/16, 1/11/17 EH
Docket 1
Debtor(s):
Richard G Rothman Represented By Daniel J Winfree
Defendant(s):
Richard G Rothman Represented By Daniel J Winfree
Joint Debtor(s):
Shari A Randall Represented By Daniel J Winfree
Plaintiff(s):
California Solar Thermal, Inc. Represented By Douglas A Plazak
Trustee(s):
Howard B Grobstein (TR) Pro Se
2:00 PM
Adv#: 6:16-01176 Simons v. Navarro
From: 9/7/16, 11/9/16, 1/11/17, 3/8/17, 4/12/17 EH
Docket 1
Debtor(s):
Jose Antonio Hernandez Represented By
Jessica De Anda Leon
Defendant(s):
Carolina Villalobos Navarro Represented By Christopher J Langley
Plaintiff(s):
Larry D Simons Represented By Frank X Ruggier
Trustee(s):
Larry D Simons (TR) Represented By Frank X Ruggier
2:00 PM
Adv#: 6:16-01295 Abbasi v. Surace et al
From: 2/15/17 EH
Docket 1
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Marym Qadir Represented By
Batkhand Zoljargal
Walie Qadir Represented By
Batkhand Zoljargal
Jaison Vally Surace Represented By Batkhand Zoljargal
Plaintiff(s):
Setareh Abbasi Represented By
Bruce Dannemeyer Bruce Dannemeyer
2:00 PM
Trustee(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:17-01064 Jabro v. Kim et al
EH
Docket 1
Debtor(s):
Mee Soon Kim Represented By Minh Duy Nguyen
Defendant(s):
Tae Young Kim Pro Se
Mee Soon Kim Pro Se
Plaintiff(s):
Hikmat Jabro Represented By
Michael H Jabro
Trustee(s):
Larry D Simons (TR) Represented By David Seror Michael W Davis
11:00 AM
EH
Docket 13
- NONE LISTED -
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
Zobia Asif Represented By
Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
Malik Muhammad Asif Represented By Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
11:00 AM
Also #1 EH
Docket 12
- NONE LISTED -
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
Zobia Asif Represented By
Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
Malik Muhammad Asif Represented By Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
12:30 PM
From: 4/27/17, 5/11/17 EH
Docket 37
- NONE LISTED -
Debtor(s):
Jeffrey Michael Berger Represented By Jenny L Doling
Joint Debtor(s):
Debra Lynn Berger Represented By Jenny L Doling
Movant(s):
Debra Lynn Berger Represented By Jenny L Doling Jenny L Doling
Jeffrey Michael Berger Represented By Jenny L Doling Jenny L Doling Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 57
BACKGROUND
On October 24, 2016, Patricia Morales ("Debtor") filed a Chapter 13 voluntary petition. On January 24, 2017, Debtor’s Chapter 13 plan was confirmed.
On April 3, 2017, Trustee’s motion to dismiss was granted after no opposition was properly filed. On April 6, 2017, Debtor filed a motion to vacate dismissal (the "First Motion"). Trustee filed his disapproval on April 10, 2017. On April 21, 2017, Debtor filed a late reply that was not served
The Court posted a tentative prior to the hearing on April 27, 2017, that outlined a variety of technical and substantive deficiencies, both legal and factual. At the hearing, Debtor’s counsel withdrew the motion. On May 5, 2017, Debtor filed a new motion to vacate dismissal (the "Second Motion").
DISCUSSION
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While the Court notes that Debtor appears to have made some attempt to remedy the deficiencies noted in the Court’s previous tentative ruling, the Second Motion still contains significant technical and substantive deficiencies, both legal and factual.
First of all, service of the Second Motion is improper. Debtor’s service list abruptly cuts off at the letter "L" (creditors listed in alphabetical order).
Second of all, the Second Motion was not calendared and noticed correctly. The motion was set on "regular notice" but Debtor only provided thirteen days notice of the hearing. This is especially concerning because the reason the case was dismissed was because Debtor’s opposition to the motion to dismiss was calendared incorrectly.
Third, the Second Motion contains the same general factual deficiencies as the First Motion. Once again, Debtor identifies her failure to file a responsive pleading to Trustee’s motion for dismiss as the act to which a 60(b) analysis applies. As the Court noted in its previous tentative, however, Debtor did file an opposition to that motion, but a hearing was not set because Debtor selected incorrect hearing information. Yet, Debtor has opted to include the same assertions in the Second Motion.
Fourth, the majority of Debtor’s motion discusses the payment history of Debtor, Debtor’s account of which was disputed by Trustee in his opposition to the First Motion. Once again, the exhibits included are not authenticated. Additionally, the Second Motion removes the declaration of Debtor. Instead, in its place, is a declaration of Debtor’s counsel, which is simply a verbatim copy of the motion, and otherwise lacks foundation and personal knowledge.
Fifth, while the Second Motion appears to make an attempt to remedy the legal deficiencies of the First Motion, that attempt is inadequate. While the Second Motion, unlike the First Motion, does identify the appropriate legal standard, it is still far from adequate. The motion appears to include two statements that could be characterized as legal, and that are relevant in this matter. The first sentence states: "[T]he court has
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the authority to grant the relief sought herein pursuant F.R.C.P. 60(b) States: (1) Mistake, inadvertence, surprise, or excusable neglect." The second statement, which occurs before the first, states: "Debtor respectfully requests the court to vacate dismissal and reinstate the bankruptcy case on the following grounds that the reason for her failure to file a responsive opposition to the motion to dismiss was excusable."
Regarding the first sentence, apart from the fact that it is clearly not a sentence, the motion contains no further discussion of the legal standard or how to apply 60(b) to the facts of this case. Regarding the second sentence, apart from the fact that it is grammatically defective, the Court notes, once again, that Debtor did file an opposition to Trustee’s motion to dismiss. The second sentence simply misrepresents the record and lacks credibility.
Debtor’s previous four filings in this case (the Second Motion, the First Motion and Debtor’s reply, and the opposition to Trustee’s motion to dismiss) contain numerous technical and substantive deficiencies, are far from legally adequate, and are factually inaccurate. Multiple filings were noticed incorrectly and multiple filings were served incorrectly. More importantly, despite the fact the Court posted a tentative that informed Debtor why the First Motion was inadequate, Debtor has, for the most part, repeated the deficiencies in the Second Motion. The two sentences outlined above appear to constitute the steps taken to respond to the Court’s tentative, and those two sentences are simply inadequate.
Tentative Ruling:
For the foregoing reasons, the Court is inclined to CONTINUE the hearing for movant to file/serve amended pleadings and to coincide with a hearing on an order to show cause why Movant’s counsel should not be sanctioned.
APPEARANCES REQUIRED.
12:30 PM
Debtor(s):
Patricia Morales Represented By Michael C Maddux
Movant(s):
Patricia Morales Represented By Michael C Maddux
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Daniel S Neesan Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 21
5/18/17
Background:
On February 16, 2016, Renard & Regina Hamilton ("Debtors") filed a Chapter 13 voluntary petition. On March 22, 2017, the IRS filed a claim ("Claim 6") in the amount of $42,251.29, of which $15,231.25 was identified as a priority claim. On April 19, 2017, Debtors filed an objection to Claim 6.
The claim of the IRS is based on Debtors’ failure to file tax returns for 2012-2016. Debtors state that they filed the relevant returns on March 17, 2017. The docketed claim objection does not include an exhibit demonstrating that the returns were filed, although Debtors state that the Trustee’s copy and the Judge’s copy contain such an exhibit.
Applicable Law:
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Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
The evidence submitted by Debtors in support of their motion was not properly filed. Fed. R. Bankr. P. Rule 5005 governs the filing and transmittal of papers and generally requires that a filing be made with the clerk. Rule 5005(a) provides an exception to
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allow a party to file a paper with a bankruptcy judge, but it is a discretionary exception, which is not appropriate here.
11 U.S.C. § 107 provides a mechanism whereby filings can be made under seal. That approach was not adopted in this case. As a result, the motion that is part of the record does not contain sufficient evidence to comply with Local Rule 3007-(1).
Finally, the notice to the IRS at the address in Philadelphia is addressed to T. Smith, but, as the proof of claim indicates, that person’s address is in San Diego.
Tentative Ruling
The Court is inclined to OVERRULE the objection without prejudice to Debtors re- filing the claim objection with proper evidence and utilizing the appropriate steps to protect Debtors’ sensitive information, and for proper service.
APPEARANCES REQUIRED.
Debtor(s):
Renard Louis Hamilton Represented By
D Justin Harelik
Joint Debtor(s):
Regina Elizabeth Hamilton Represented By
D Justin Harelik
12:30 PM
Movant(s):
Regina Elizabeth Hamilton Represented By
D Justin Harelik
Renard Louis Hamilton Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #4 EH
Docket 0
- NONE LISTED -
Debtor(s):
Renard Louis Hamilton Represented By
D Justin Harelik
Joint Debtor(s):
Regina Elizabeth Hamilton Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 18
BACKGROUND
On March 1, 2017, Priscilla Bavadi ("Debtor") filed a Chapter 13 voluntary petition. This was Debtor’s sixth bankruptcy filing in eighteen months. Of the previous five, four were dismissed either for failure to file information or at the confirmation hearing. One result in a confirmed plan, however, the case was dismissed after the fifth month for failure to make plan payments. William Radcliffe ("Counsel") served as Debtor’s attorney in all but the first filing.
On April 6, 2017, the Court held a confirmation hearing. The case was dismissed with a 180-day bar due to Debtor’s failure to attend the meeting of creditors.
On April 13, 2017, Debtor filed a motion to vacate dismissal. On April 14, 2017, Trustee filed his objection to the motion.
Debtor’s motion contains no legal analysis. It is limited to a declaration of Debtor stating that she did not attend the meeting of creditors because she believed the meeting was on April 12, 2017. It is true that when the case was originally filed it was assigned to Judge Johnson, and the date for the meeting of creditors was April 12,
12:30 PM
2017, but immediately thereafter, the case was transferred to Judge Houle due to prior involvement with the Debtor, and the meeting of creditors was set for April 6, 2017. This assignment occurred the same day of the filing – in fact, the only meeting of creditors’ date noticed was April 6, 2017.
DISCUSSION
Fed. R. Bankr. P. Rule 9024 incorporates Fed. R. Civ. P. Rule 60. Fed. R. Civ. P. Rule 60(b) provides the grounds for relief from a final judgment. In general:
Fed. R. Civ. P. 60(b) seeks to balance the interest in the stability of judgments and orders with the interest in seeing they do not become instruments of oppression and fraud. Hence, the court may relieve a party . . . from a final judgment, order, or proceedings for . . . mistake, inadvertence, surprise, or excusable neglect. Relief under Rule 60(b) is extraordinary in nature and motions invoking that rule should be granted sparingly.
In re Teran Racamonde, 526 B.R. 89, 91 (Bankr. D.P.R. 2015). Here, Debtor has not cited any legal provision or indicated what provision she believes is applicable. The only factual argument made is that Debtor failed to attend the meeting of creditors because she noted the wrong date due to the judicial reassignment.
The Court finds Debtor’s proffered reason to be insufficient for the following reasons:
(1) the meeting of creditors was changed less than two hours after the commencement of the bankruptcy; (2) the only notice sent regarding the meeting of creditors identified a date of April 6, 2016; (3) Debtor is familiar with the Court’s procedure of transferring cases to a judge who was previously involved – in each of Debtor’s two previous filings such a reassignment occurred; (4) Debtor has cited no legal provision and made no legal argument; and (5) Debtor’s indication that she believes the foreclosure would be set aside through the reinstatement of a bankruptcy case in which the automatic stay was not in effect lacks credibility. Furthermore, Debtor’s previous bankruptcy filings demonstrate a consistent lack of willingness or ability to
12:30 PM
abide by the bankruptcy laws and rules.
TENTATIVE RULING
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Priscilla Yvonne Bavadi Represented By William Radcliffe
Movant(s):
Priscilla Yvonne Bavadi Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Maisha Lenette Ghant-Elie Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Veronica Salinas Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Hermilo Saavedra Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Robert James Budzinski Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose J Sandoval Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Raul M Sosa Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Brenda Joelle Rue Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Donaldo Montiel Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Shane Morgan Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Robert P Guerrero Jr. Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ethel N Odimegwu Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: RICARDO MENENDEZ
From: 5/9/17 Also #19
EH
Docket 13
Movant having provided sufficient evidence to rebut the presumption that the case was not filed in good faith, the Court is inclined to GRANT the motion and continue the automatic stay as to all creditors.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Menendez Represented By Sunita N Sood
Movant(s):
Ricardo Menendez Represented By Sunita N Sood
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #18 EH
Docket 0
- NONE LISTED -
Debtor(s):
Ricardo Menendez Represented By Sunita N Sood
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kristin Lynn Robles Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Isabel M Gutierrez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: WILLIAM AND JENNIFER SCHAEFR
From: 5/16/17 EH
Docket 17
05/16/17
In support of their Motion to Continue/Impose, the Debtors vaguely assert that their new budget will ensure that payments can be made on time to avoid the situation that occurred in the last case where they did not have funds to tender to the Trustee.
However, the I & J have not changed at all from one case to the next, the Debtors’ budget is extremely lean for a family of six, and there is otherwise no explanation of why the funds were not "received" on time in the last case. On the basis of the foregoing, the tentative ruling is to DENY the Motion.
APPEARANCES REQUIRED.
Debtor(s):
William J Schaefer Represented By Patricia M Ashcraft
Joint Debtor(s):
Jennifer L. Schaefer Represented By Patricia M Ashcraft
12:30 PM
Movant(s):
Jennifer L. Schaefer Represented By Patricia M Ashcraft
William J Schaefer Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: BIANI BERLENDA MORA
From: 5/16/17 EH
Docket 10
05/16/17
The Debtor asserts that in the prior case she fell behind on payments due to a loss of social security income for her daughter. The I and J in the current case reflect a reduction. However, the declaration lacks specificity as to why the benefit was reduced. Additionally, although the Debtor also indicates she experienced "unexpected expenses" during the prior case, there is no explanation of what these expenses were, or how much they were, such that the Court cannot determine whether the expenses were incurred in good faith.
APPEARANCES REQUIRED.
Debtor(s):
Biani Berlenda Mora Represented By Steven A Alpert
Movant(s):
Biani Berlenda Mora Represented By Steven A Alpert
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 200
- NONE LISTED -
Debtor(s):
Brandon Kent Blevins Represented By
Raj T Wadhwani
Joint Debtor(s):
Teresa Taylor Blevins Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 116
- NONE LISTED -
Debtor(s):
Ernest B Galante Represented By
Dale Parham - INACTIVE - Michael Smith
Joint Debtor(s):
Susan D Galante Represented By
Dale Parham - INACTIVE - Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 97
- NONE LISTED -
Debtor(s):
Kenneth Vernell Hawkins Represented By
Craig J Beauchamp
Joint Debtor(s):
Brenda A Hawkins Represented By
Craig J Beauchamp
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:31 PM
Docket 118
- NONE LISTED -
Debtor(s):
Jimmie Lee Bracy Jr. Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 207
- NONE LISTED -
Debtor(s):
Jose N Recinos Represented By Michael Smith
Joint Debtor(s):
Patricia Recinos Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
Jesus Danny Ontiveros III Represented By Gary S Saunders
Joint Debtor(s):
Marie Irene Ontiveros Represented By Gary S Saunders
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 43
- NONE LISTED -
Debtor(s):
Peter J. Giummo Represented By Bruce D White
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 45
ntc of hrg fld 4/11/17
Debtor(s):
Christina M Starr Represented By Aaron Lloyd
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 29
- NONE LISTED -
Debtor(s):
Charles Mickey Alligood Represented By Neil R Hedtke
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
EH
Docket 65
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under § 1301(a). GRANT requests under
¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Thomas Arce Represented By
David Lozano
Movant(s):
JPMorgan Chase Bank, National Represented By
Jared D Bissell Terrionta K Levells Karon D Horn Delesia Graham
10:00 AM
Trustee(s):
Joseph C Delmotte
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WILMINGTON SAVINGS FUND SOCIETY FSB dba CHRISTIANA TRUST
EH
Docket 130
- NONE LISTED -
Debtor(s):
Nicole Reyes Represented By
Steven A Alpert
Movant(s):
Wilmington Savings Fund Society, Represented By
Megan E Lees
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
From: 4/11/17, 5/9/17 EH
Docket 103
04/11/17
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). Request under § 362(d)(2) is DENIED for failure by Movant to establish that the Property has no equity or that it is not necessary for reorganization. GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Frederick Arnett Mikel Represented By Todd L Turoci
Movant(s):
U.S. BANK NATIONAL Represented By April Harriott Sean C Ferry
10:00 AM
Trustee(s):
Matthew R. Clark Keith Labell
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BAYVIEW LOAN SERVICING LLC
EH
Docket 62
- NONE LISTED -
Debtor(s):
Genaro Flores Represented By Luis G Torres
Joint Debtor(s):
Salome Flores Represented By Luis G Torres
Movant(s):
BAYVIEW LOAN SERVICING, Represented By
Erin M McCartney
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WVMF FUNDING LLC
EH
Docket 41
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3 and 12.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Guillermo Jorge Fitzmaurice Represented By Ronald W Ask
Joint Debtor(s):
Emilia Fitzmaurice Represented By Ronald W Ask
Movant(s):
WVMF Funding, LLC Represented By
Kristin A Zilberstein
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 98
Service is Proper Opposition: Yes
Parties to advise Court regarding adequate protection discussions. APPEARANCES REQUIRED.
Debtor(s):
Alfredo Manzo Arrieta Represented By Andy C Warshaw
Joint Debtor(s):
Mayte Hernandez- Arrieta Represented By Andy C Warshaw
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST COMPANY
EH
Docket 74
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (d) (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Richard G Rothman Represented By Daniel J Winfree
Joint Debtor(s):
Shari A Randall Represented By Daniel J Winfree
Movant(s):
Deutsche Bank National Trust Represented By Sean C Ferry
10:00 AM
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: THE BANK OF NEW YORK MELLON fka THE BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF THE CWABS
From: 4/25/17 EH
Docket 47
- NONE LISTED -
Debtor(s):
Efren Rubio Represented By
Inez Tinoco-Vaca
Movant(s):
The Bank of New York Mellon fka Represented By
Erin M McCartney
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ROSA BRYANT
EH
Docket 32
- NONE LISTED -
Debtor(s):
YBF Tax, Inc. Represented By Ronald W Ask
Movant(s):
Rosa Bryant Represented By
Michael F Chekian
Trustee(s):
Karl T Anderson (TR) Represented By Lovee D Sarenas
10:00 AM
MOVANT: CREDITOR TRINITY FINANCIAL SERVICES EH .
Docket 25
Service is Improper Opposition: None
The Court is inclined to CONTINUE the hearing for service on Debtor pursuant to Local Rule 4001-(1)(c)(C)(i).
APPEARANCES REQUIRED.
Debtor(s):
Fonda Cormier Represented By Phillip Myer
Movant(s):
Trinity Financial Services LLC Represented By Henry D Paloci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HARLEY-DAVIDSON CREDIT CORP
EH
Docket 20
Service is Proper Opposition: Limited
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 12. Alternative request under ¶ 11 is denied as moot.
APPEARANCES REQUIRED.
Debtor(s):
Mario Mondragon Represented By Michael Smith
Movant(s):
Harley-Davidson Credit Corp Represented By Tyneia Merritt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: MARTHA E GUERRERO AND EDUARDO E GUERRERO FROM: 4/25/17
EH
Docket 11
Debtor’s opposition argues that the real estate contract is an executory contract that can be rejected in bankruptcy. While providing an applicable citation for that assertion, Debtor does not apply the legal standard to the facts of this case.
Nevertheless, it appears that Debtor’s characterization of the contract as "executory" may have merit. While Movant, in the motion, states that "all contingencies had been removed," and, in the reply, states that they "dutifully removed all their contractual contingencies," the state court complaint submitted to support their motion states, in paragraph 23: "Plaintiffs have fully performed all conditions, covenants, and promises required by them on their part to be performed in accordance with the terms and conditions of the contract, except the final payment for the purchase of the Property." (emphasis added). While Movants appear to have made the initial deposit into escrow, it does not appear that the final purchase price was tendered.
"[A]n ‘executory contract’ that can be rejected in bankruptcy is a contract on which performance remains due on both sides at the time of the bankruptcy petition." Matter of Newcomb, 744 F.2d 621, 624 (8th Cir. 1984); see also In re Texscan Corp., 976 F.2d 1269-1271-72 (9th Cir. 1992). In Newcomb, the Court held that when the funds had already been transferred into escrow, there was no executory contract – no material obligations remained on the part of the grantor. See id.
10:00 AM
In the Ninth Circuit, a real estate sales contract remains executory until the full purchase price is deposited into escrow by the purchaser. See In re Hertz, 536 B.R. 434, 439-41 (Bankr. C.D. Cal. 2015) (an extended discussion on when a purchase contract loses its executory nature).
Given that the real estate purchase contract may be an executory contract that shortly will be rejected by operation of law under 11 U.S.C. § 365(d)(1), and that Movants are seeking a state court order for specific performance under the contract, granting relief from stay would be improper because the state court proceedings would interfere with the bankruptcy court proceedings. Interference with the administration of the estate is the most important consideration when considering a motion for relief from stay to proceed with state court litigation. See In re Roger, 539 B.R. 837, 845 C.D. Cal. 2015) ("According to the court in Curtis, the most importance factor in determining whether to grant relief from the automatic stay to permit litigation against the debtor in another forum is the effect of such litigation on the administration of the estate. Even slight interference with the administration may be enough to preclude relief in the absence of a commensurate benefit."). Here, there is a possibility of significant interference with the bankruptcy estate.
Tentative Ruling:
For the foregoing reasons, the Court is inclined to DENY the motion. APPEARANCES REQUIRED.
Debtor(s):
AMANDO MORALES Represented By William D Gurney
Joint Debtor(s):
ALICIA MALDONADO JIMENEZ Represented By
William D Gurney
Movant(s):
Eduardo E. Guerrero Represented By
10:00 AM
Trustee(s):
Christopher J Langley
Charles W Daff (TR) Represented By Brandon J Iskander Lynda T Bui
10:00 AM
MOVANT: SPECIALIZED LOAN SERVICING
EH
Docket 23
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT relief pursuant to § 362(d)(4) based on authorized transfers and multiple bankruptcy filings. GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
GRANT request under ¶ 10 but only upon recording of a copy of this order or giving appropriate notice of its entry in compliance with applicable nonbankruptcy law.
DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Christopher Wilkins Pro Se
Movant(s):
Specialized Loan Servicing LLC, as Represented By
Bethany Wojtanowicz
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: FORD MOTOR CREDIT COMPANY LLC
EH
Docket 11
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Orlando Ismael Alarcon Represented By Freddie V Vega
Movant(s):
Ford Motor Credit Company LLC Represented By
Sheryl K Ith
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK
EH
Docket 18
Service is Proper Opposition: None
While cause arguably exists to lift the stay, Movant to discuss the status of this motion given that Movant withdrew its bad faith objection to confirmation at Debtor’s confirmation hearing on May 18, 2017.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Menendez Represented By Sunita N Sood
Movant(s):
WELLS FARGO BANK, N.A. Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FORD MORTOR CREDIT COMPANY LLC
EH
Docket 12
- NONE LISTED -
Debtor(s):
Silvia Alvarez Represented By
Filemon Kevin Samson III
Movant(s):
Ford Motor Credit Company LLC Represented By
Sheryl K Ith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: STEVE CAMPINI
EH
Docket 8
- NONE LISTED -
Debtor(s):
Rose Marie Rivas Represented By Christopher J Langley
Movant(s):
Steve Campini Represented By William E Windham
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: STATEWIDE PROPERTY SERVICES, INC. KEN NEWBURY
EH
Docket 4
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 11. GRANT request under
¶ 9 upon recording of a copy of this order or giving appropriate notice of its entry in compliance with applicable nonbankruptcy law. DENY request under ¶ 7 for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Tyra Bagby Pro Se
Movant(s):
Statewide Property Services, Inc. Represented By
Barry L O'Connor
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
EH
Docket 37
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Pro Se
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
2:00 PM
Employment Development Pro Se
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Movant(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
2:00 PM
Adv#: 6:16-01225 Cambridge Medical Funding Group II, LLC v. Allied Injury Management,
From: 11/1/16, 12/6/16, 1/31/17, 2/28/17, 3/28/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
John C. Larson Pro Se
Allied Injury Management, Inc. Represented By Alan W Forsley
Plaintiff(s):
Cambridge Medical Funding Group Represented By
Kenneth Hennesay
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
2:00 PM
From: 6/7/16, 8/30/16, 9/14/16, 10/20/16, 10/25/16, 12/6/16, 1/10/17, 2/28/17, 3/28/17
EH
Docket 7
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
From: 12/13/16, 3/7/17 EH
Docket 8
- NONE LISTED -
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
2:00 PM
From: 3/28/17 EH
Docket 6
- NONE LISTED -
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
11:00 AM
Docket 49
On December 7, 2011, Resureccion and Lynroy Gayle (collectively, "Debtors") filed for chapter 7 relief. The Debtors received a discharge and the case was closed on March 22, 2012. On April 8, 2014, the Debtors moved to reopen their case for the purpose of filing motions to avoid liens.
On June 6, 2014, the Debtors moved to avoid the lien of Steven Vanderhei (the "Prior Motion"). The Prior Motion was opposed by Steven Vanderhei ("Vanderhei"). Vanderhei opposed the Prior Motion and a hearing was held on August 20, 2014. At the hearing, the Court determined it appropriate to deny the Prior Motion with prejudice. An order denying the prior motion was entered on August 26, 2014 (the "Vanderhei Order"). The case was closed on January 28, 2015.
On March 30, 2017, the Debtors again moved to reopen the case to seek reconsideration of the Vanderhei Order and substituted new counsel, the Turoci Firm. The Court reopened the case on April 3, 2017. On April 17, 2017, the Debtors moved for reconsideration of the Vanderhei Order ("Motion"). Vanderhei filed Opposition to the Motion on April 28, 2017, and filed a Declaration of Vanderhei on May 1, 2017 ("Opposition"). On May 5, 2017, the Debtors set the matter for hearing and filed their reply on May 23, 2017. Additionally, the Debtors filed objection to the declaration of Vanderhei.
DISCUSSION
FRBP 9024 (incorporating FRCP 60), permits the filing of a motion for reconsideration. However, under FRCP 60(c), a motion for reconsideration filed more
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than one year after the order is entered, such as the Vanderhei Order, may only be made pursuant to 60(b)(6).
Rule 60(b)(6) has been used sparingly as an equitable remedy to prevent manifest injustice. The rule is to be utilized only where extraordinary circumstances prevented a party from taking timely action to prevent or correct an erroneous judgment. For example, in Klapprott v. United States, 335 U.S. 601, 69 S.Ct. 384, 93 L.Ed. 266 (1949), the Court upheld the use of the rule to set aside a default judgment in a denaturalization proceeding because the petitioner had been ill, incarcerated, and without counsel for the four years following the judgment. United States v. Alpine Land & Reservoir Co., 984 F.2d 1047, 1050 (9th Cir. 1993) Conversely, in
Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207 (1950), the Court held that Rule 60(b)(6) should not be invoked where the petitioner bypassed his right to appeal for tactical reasons. Id. The Supreme Court has indicated that Rule 60 (b)(6) relief may be had "to accomplish justice," but only under "extraordinary circumstances." Alpine Land at 1050.
The Ninth Circuit has indicated that the timeliness of a Rule 60(b)(6) motion "depends on the facts of each case," and relief may not be had where "the party seeking reconsideration has ignored normal legal recourses." In re Pacific Far East Lines, Inc., 889 F.2d 242, 249, 250 (9th Cir.1989) (holding relief appropriate where new legislation undermined the soundness of the judgment). See also United States v. Holtzman, 762 F.2d 720 (9th Cir.1985) (five year delay permissible where litigant reasonably interpreted an injunction to authorize litigant's conduct and timely relief was sought upon receipt of notice to the contrary); Rivera v. Puerto Rico Tel. Co., 921 F.2d 393 (1st Cir.1990) (twenty-three day delay permitted because party not properly notified of pending motion); J.D. Pharmaceutical Distrib., Inc. v. Save–On Drugs & Cosmetics Corp., 893 F.2d 1201, 1207 (11th Cir.1990) (relief from judgment granted because party never served with requests for admissions or motion for summary judgment). These cases demonstrate that Rule 60(b)(6) relief normally will not be granted unless the moving party is able to show both injury and that circumstances beyond its control prevented timely action to protect its interests.
Here, the Debtor’s sole evidence in support of her 60(b)(6) request is that she relied on her prior counsel to correctly file the motions to avoid lien filed prior to the instant reopening of this case. However, the Debtor’s declaration does not demonstrate circumstances beyond her control which prevented timely action to protect her interest. The Debtor has impermissibly delayed in seeking reconsideration. At most, excusable neglect might have been the basis for relief pursuant to Rule 60(b)
(1) if the Debtors had sought such relief within a year of the entry of the Vanderhei Order. However, Rule 60(b)(6) is not a substitute for 60(b)(1). See Alpine Land at
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1050.
The Debtor cites to Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1170 (9th Cir. 2002), as amended on denial of reh'g and reh'g en banc (Apr. 24, 2002) in support of her request to have the Vanderhei Order’s "with prejudice" provision reconsidered. In Tani, the Ninth Circuit held that "gross negligence" of counsel, in contrast to regular or ordinary negligence, could constitute grounds for reconsideration under 60(b)(6).
Gross negligence, in turn, is traditionally used to signify a greater, and less excusable, degree of negligence, and typically requires parties alleging gross negligence to establish the existence of a more serious violation of the actor's duty. Id. In Tani, the record indicated that prior counsel had abandoned representation of the client by failing to comply with court orders requiring him to engage in settlement discussions, failed to file a stipulation permitting the late filing of an answer to a complaint, served the answer two weeks late, then after failing to serve the answer failed to file the answer on the plaintiff, failed to oppose plaintiff’s motion to strike the answer, and failed to appear at numerous hearings. The result of the counsel’s inaction was the entry of default judgment against his client. The Ninth Circuit found this failure of representation to constitute gross negligence sufficient to warrant reconsideration of the entry of a default judgment. Additionally, the Court’s holding was bolstered by the principle that decisions on the merits are favored whenever possible. Id.
The Debtor cites to Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1170 (9th Cir. 2002), as amended on denial of reh'g and reh'g en banc (Apr. 24, 2002) in support of her request to have the Vanderhei Order’s "with prejudice" provision reconsidered. In Tani, the Ninth Circuit held that "gross negligence" of counsel, in contrast to regular or ordinary negligence, could constitute grounds for reconsideration under 60(b)(6).
Gross negligence, in turn, is traditionally used to signify a greater, and less excusable, degree of negligence, and typically requires parties alleging gross negligence to establish the existence of a more serious violation of the actor's duty. Id. In Tani, the record indicated that prior counsel had abandoned representation of the client by failing to comply with court orders requiring him to engage in settlement discussions, failing to sign a stipulation permitting the late filing of an answer to a complaint, filing the answer two weeks late, failing to serve the answer on the plaintiff, failing to oppose plaintiff’s motion to strike the answer, and failing to appear at numerous hearings. The result of the counsel’s inaction was the entry of default judgment against his client. The Ninth Circuit found this failure of representation to constitute gross negligence sufficient to warrant reconsideration of the entry of a default judgment. Additionally, the Court’s holding was bolstered by the principle that decisions on the merits are favored whenever possible. Id.
In this case, the Debtor has provided insufficient evidence of gross negligence.
In her Reply, the Debtor points to a complaint of misconduct filed by the Debtor on
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February 24, 2015, against the Debtor’s prior counsel (filed as an exhibit to the Opposition). However, there is no indication that a judgment has been entered against the Debtor’s prior counsel and no evidence provided in support of the allegations made in the misconduct complaint. Moreover, Vanderhei is correct that the Debtor’s misconduct complaint indicates clearly that she believed her prior counsel was negligent in the handling of the bankruptcy cases yet despite that fact she did not seek new counsel to rectify the Vanderhei Order timely. No excuse is provided for the Debtor’s delay in seeking reconsideration of the Vanderhei Order in the bankruptcy court. Finally, based on the record of this case, the Debtor’s prior counsel filed the Motion (albeit with clear deficiencies) and appeared at the hearing on the motion. The facts of this situation do not resemble the facts of Tani where the client was effectively abandoned by her counsel. Instead, the Debtor (without any apparent excuse) continued to rely on counsel that had already demonstrated deficient work product prior to the filing of the second bankruptcy and even after she realized he had made mistakes, waited more than two years to seek reconsideration in this Court.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to DENY the Motion.
APPEARANCES REQUIRED.
Debtor(s):
Resurreccion D Gayle Represented By Todd L Turoci
Joint Debtor(s):
Lynroy A Gayle Represented By Gary S Saunders Todd L Turoci
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Movant(s):
Resurreccion D Gayle Represented By Todd L Turoci
Trustee(s):
John P Pringle (TR) Pro Se
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EH
Docket 61
05/31/2017
BACKGROUND
On July 25, 2013 ("Petition Date"), Jesus Tapia ("Debtor") filed his petition for chapter 7 relief. Robert Whitmore is the duly appointed chapter 7 trustee ("Trustee").
The Debtor received his discharge and his case was closed on November 5, 2013. The case was reopened on April 27, 2016, for the Debtor to amend his schedules to disclose the existence of prepetition litigation. The lawsuit involved an abdominal wall mesh infection and abscess in the Debtor which the Debtor alleges were caused by the implantation of a Kugel Patch manufactured by the defendants (the "Lawsuit"). The UST subsequently moved for reappointment of the Trustee to investigate the potential that any settlement might be property of the estate.
On April 17, 2017, the Trustee filed his Motion to Approve Compromise under Rule 9019 (the "Motion"). No opposition was filed to the Motion. On May 3, 2017, having determined that the Motion contained insufficient evidence of the value of the claim underlying the proposed settlement, the Court set the matter for hearing to provide the Trustee an opportunity to provide supplemental evidence.
The Trustee provided supplemental evidence on May 17, 2017.
DISCUSSION
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APPROVAL OF COMPROMISE PURSUANT TO RULE 9019
Rule 9019(a) authorizes the bankruptcy court to approve a compromise or settlement on the trustee's motion and after notice and a hearing. The bankruptcy court must consider all "factors relevant to a full and fair assessment of the wisdom of the proposed compromise." Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424, 88 S. Ct. 1157, 20 L. Ed. 2d 1 (1968). In
other words, the bankruptcy court must find that the settlement is "fair and equitable" in order to approve it. Martin v. Kane (In re A & C Props.), 784 F.2d 1377, 1381 (9th Cir. 1986).
In conducting this inquiry, the bankruptcy court must consider the following
factors:
Id.
the probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises.
The bankruptcy court enjoys broad discretion in approving a compromise
because it "is uniquely situated to consider the equities and reasonableness [of it] . . .
." United States v. Alaska Nat'l Bank (In re Walsh Construction, Inc.), 669 F.2d 1325, 1328 (9th Cir. 1982). As stated in A & C Props.:
The purpose of a compromise agreement is to allow the trustee and the creditors to avoid the expenses and burdens associated with litigating sharply contested and dubious claims. The law favors compromise and not litigation for its own sake, and as long as the bankruptcy court amply considered the various factors that determined the reasonableness of the compromise, the court's decision must be affirmed.
Id. (citations omitted).
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On the other hand, even though the bankruptcy court has wide latitude in
approving compromises, its discretion is not completely unfettered. See Woodson v. Fireman's Fund Ins. Co. (In re Woodson), 839 F.2d 610, 620 (9th Cir. 1988). The trustee bears the burden of proving to the bankruptcy court that the settlement is fair and equitable and should be approved. In re A&C Props., 784 F.2d at 1382.
Sufficiency of Evidence
The Court shall address the evidence in support of each of the A & C Props. factors.
In the supplement to the Motion, the Trustee provided the analysis of Troy Brenes in which he evaluated the specific difficulties involved in the Debtor’s litigation and the benefits of settlement. (Brenes Decl. ¶4). This factor weighs in favor of the settlement.
The Motion did not present any definitive challenges to collection. As such, this factor is neutral.
The supplement to the Motion underscores the complexity of the litigation involved, in particular the Court notes that significant expert testimony and substantial litigation appears likely to be required in order for the Trustee to prevail on the Debtor’s claim and recover for the benefit of creditors. (Brenes Decl. ¶4). This factor weighs in favor of the settlement.
The complexity of the pending litigation and the difficulties outlined by the Trustee in the Motion and supplement underscore that approval of the settlement rather than causing the Trustee to incur attorney fees in continued litigation outside of
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the bankruptcy court is in the best interest of creditors. Additionally, the Trustee has demonstrated that he has evaluated sufficient evidence of comparable jury verdicts in order to determine that the settlement figure of $400,000 being proposed is reasonable. (Trustee Supp. Decl. ¶3). Finally, the Trustee has indicated that based on claims filed in the bankruptcy case, after payment of attorney fees and costs, administrative costs, and payments to unsecured creditors, that the settlement award is sufficient to result in a surplus estate which will pay out funds to the Debtor. (Trustee Decl. ¶8).
TENTATIVE RULING
Based on the foregoing, the Trustee has demonstrated that the settlement is fair and equitable and the Motion is GRANTED and the settlement is APPROVED as follows:
approving settlement related to the matter entitled Jesus Tapia v. Davol Inc. et al, case no. 6:16-ap-01265-MH, pursuant to Federal Rule of Bankruptcy Procedure 9019;
approving and authorizing payment to Trustee's special counsel for its costs; and
approving special counsel fees to be held in trust by Trustee’s bankruptcy counsel, Reid & Hellyer, pending the resolution of a fee dispute.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Jesus M. Tapia Represented By Michael Smith
Movant(s):
Robert Whitmore (TR) Represented By Douglas A Plazak Troy A Brenes
Trustee(s):
Robert Whitmore (TR) Represented By Douglas A Plazak
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Troy A Brenes
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Docket 185
- NONE LISTED -
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - INACTIVE - Steven L Bryson
Movant(s):
Steven L. Bryson Represented By Steven L Bryson
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander
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Also #5 EH
Docket 30
- NONE LISTED -
Debtor(s):
Ronald Leroy Stearns Represented By John F Mansour
Joint Debtor(s):
Alicia Gay Stearns Represented By John F Mansour
Movant(s):
Alicia Gay Stearns Represented By John F Mansour John F Mansour
Ronald Leroy Stearns Represented By John F Mansour
Trustee(s):
Lynda T. Bui (TR) Pro Se
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Also #4 EH
Docket 29
05/31/2017
BACKGROUND
On October 30, 2013 ("Petition Date"), Ronald and Alicia Stearns (collectively, "Debtors") filed their petition for chapter 7 relief. Among the assets of the estate is real property located at 7573 Honeysuckle Street in Fontana, CA 92336 (the "Property"). The Debtors received a discharge and the case was closed on February 11, 2014.
On January 10, 2017, the Court granted the Debtors’ request to reopen the case for the purpose of avoiding judgment liens recorded against the Property. On February 2, 2017, the Debtor filed motions to avoid the liens of Capital One Bank ("Capital One") and Merchants Financial Guardian ("Merchants") pursuant to 11 U.S.C. § 522 (f). At the hearing on the Debtors initial motions, the Court denied both motions due to various technical issues with the motions. The tentative ruling indicated as follows:
The Court is inclined to DENY the motion without prejudice for a variety of technical reasons. Primarily, the filing that is actually set for hearing is Docket No. 17, which is simply a "notice" that does not attach, contain, incorporate, or reference a motion. Second, the earlier motion filed by Debtors, Docket No. 16, contains no admissible evidence regarding the value of the first lien as of the petition date.
Third, the Court notes that Local Rule 4003-(2)(b)(1) prevents Debtors from bringing one motion to avoid two lines under 11 U.S.C. § 522(f).
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Fourth, the earlier motion contains multiple, material factual inconsistencies, including the amount of the claimed exemption and the fair market value of the property.
Tentative Ruling on Motion to Avoid Liens, March 29, 2017.
On April 21, 2017, the Debtors refiled their motions to avoid the liens of Capital One Bank and Merchants. On May 18, 2017, the Debtors withdrew their motion to avoid the lien of Merchants. The only motion currently pending is the motion to avoid the lien of Capital One Bank (the "Motion").
DISCUSSION
As a threshold matter, the Motion was not properly served on Capital One via FRBP 7004(h) which requires service on a FDIC insured entity via certified mail and to the attention of an officer at the address indicated for the institution on the FDIC website. The Debtors did not comply with any of these requirements for service.
Section 522(f)(1)(A) provides in relevant part: "the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled ... if such lien is
a judicial lien." 11 U.S.C. § 522(f)(1)(A) (emphasis supplied).
Section 522(f)(2) prescribes a formula for calculating whether an exemption is impaired:
(2)(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of—
the lien;
all other liens on the property; and
the amount of the exemption that the debtor could claim if there were no liens on the property; exceeds the value that the debtor's interest in the property would have in the absence of any liens.
In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph
(A) with respect to other liens.
(C) This paragraph shall not apply with respect to a judgment arising out of a
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mortgage foreclosure.
11 U.S.C. § 522(f)(2) (emphasis supplied). That is, an exemption is impaired if the sum of all of liens and the exemption yields a total that is greater than the fair market value of the property. See In re Meyer, 373 B.R. 84, 89 (9th Cir. BAP 2007).
Here, the Debtors assert that the first lien on the Property is $173,433.90, that the Property is next encumbered by the lien of Merchants in the amount of
$48,351.02, and by the lien of Capital One in the amount of $3,928.15. The Debtors have asserted an exemption in the Property of $100,000. However, the Debtors Schedule C indicates that they have exempted $76,566.10 in the Property and have not sought to amend their schedules. Nevertheless, assuming the values are correct, the total of the liens and exemption is $302,279.17 which is greater than the fair market value of the Property of $270,000 as asserted by the appraisal obtained by the Debtors. These figures would indicate that the lien of Capital One impairs the exemption of the Debtors.
TENTATIVE RULING
Based on the foregoing, the Court is inclined CONTINUE the hearing on the Motion to June 28, 2017, at 11:00 a.m., for the Debtor to properly serve Capital One per FRBP 7004(h) with an amended Notice of Motion and Motion as indicated above.
APPEARANCES WAIVED. Movant to file and serve the amended notice of motion and motion.
Debtor(s):
Ronald Leroy Stearns Represented By John F Mansour
Joint Debtor(s):
Alicia Gay Stearns Represented By John F Mansour
11:00 AM
Movant(s):
Ronald Leroy Stearns Represented By John F Mansour
Trustee(s):
Lynda T. Bui (TR) Pro Se
11:00 AM
From: 5/17/17 Also #7
EH
Docket 70
05/31/2017
Background:
On November 23, 2015 ("Petition Date"), James Lloyd Walker (the "Debtor") filed his petition for chapter 7 relief. Robert Whitmore is the duly appointed chapter 7 trustee ("Trustee")
On April 12, 2017, the Trustee filed an Objection to Claim No. 1 (the "Objection") of Real Time Solutions ("Claimant"). Service was proper and no opposition has been filed.
Claim #: 1
Amount: $188,580.44
Objection:
The Trustee objects to the claim on the basis that the HELOC originally secured by the Debtor’s real property is no longer secured following the foreclosure of the Property and is otherwise barred by the applicable statute of limitations.
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Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
Rebuttal of the Prima Facie Proof of Claim
In this case, the Trustee asserts that the Claim should be disallowed as time barred.
Section 502(b)(1) provides that a claim is deemed allowed, unless such claim is
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unenforceable against the debtor and property of the debtor under applicable law. The statute of limitations applicable to common counts is four years if the action is founded upon a contract or other writing (e.g., "book account" (¶ 3:398), "account stated" (¶ 3:400), or money lent on a note), and the statute of limitations is generally four years from the date of the last item in the account. CCP § 337(1),(2); Armstrong Petroleum Corp. v. Tri–Valley Oil & Gas Co., 116 CA 4th 1375, 1396, FN. 9 (Cal.
App. 2004).
Here, the Trustee has provided evidence that the Property was sold at foreclosure extinguishing the secured claim of the Claimant. The documentation further indicates that the foreclosure occurred on April 25, 2011. Thus, assuming as does the Trustee, that the Claimant did not receive any payments following the foreclosure sale, the Trustee is correct that the statute of limitations under state law has lapsed. Moreover, Claimant, though properly served, has failed to respond, which may be deemed as consent to the relief requested under LBR 9013-1(h). Thus, as the ultimate burden of persuasion remains on the Claimant, the Objection must be sustained.
Tentative Ruling
The Objection is SUSTAINED. Claim #1 is disallowed in its entirety.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
James Lloyd Walker Pro Se
Movant(s):
Robert Whitmore (TR) Represented By Franklin C Adams
Trustee(s):
Robert Whitmore (TR) Represented By Franklin C Adams
11:00 AM
From: 5/17/17 Also #6
EH
Docket 72
05/31/2017
Background:
On November 23, 2015 ("Petition Date"), James Lloyd Walker (the "Debtor") filed his petition for chapter 7 relief. Robert Whitmore is the duly appointed chapter 7 trustee ("Trustee")
On April 12, 2017, the Trustee filed an Objection to Claim No. 2 (the "Objection") of Real Time Resolutions, Inc. ("Claimant"). Service was proper and no opposition has been filed.
Claim #: 2 Amount: $82,256.37 Objection:
The Trustee objects to the claim on the basis that as a claim that is fully secured, the Claimant should not be permitted to participate in any distribution as an unsecured creditor.
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Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
Here, the Claim as filed confirms that it is for a secured lien on the Debtor’s Property. Based on the Trustee’s showing, and given the nonopposition to the Objection by the Claimant, the Court is inclined to grant the Trustee’s request.
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Tentative Ruling
The Objection is SUSTAINED. Claim #2 is allowed as a secured claim only which shall not receive a distribution from the estate as an unsecured creditor.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
James Lloyd Walker Pro Se
Movant(s):
Robert Whitmore (TR) Represented By Franklin C Adams
Trustee(s):
Robert Whitmore (TR) Represented By Franklin C Adams
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EH
Docket 19
On January 30, 2017 ("Petition Date"), Hiep Huu Phan ("Debtor") filed his petition for chapter 7 relief. Karl Anderson is the duly appointed chapter 7 trustee ("Trustee").
On April 27, 2017, the Debtor filed a Motion for an order extending the deadline for the Trustee and/or the United States Trustee to file a motion to dismiss the Debtor’s case and/or an adversary complaint pursuant to 11 U.S.C. § 727 (the "Motion").
DISCUSSION
Under FRBP 4004(a) and 1017(e), on a motion of any party in interest, the court may for cause extend the time to object to discharge or to seek dismissal. Fed. R. Bankr. P. 4004, 1017.
As a matter of practice what constitutes "cause" rests within the discretion of the bankruptcy court. See In re James, 187 B.R. 395, 397 (Bankr. N.D. Ga. 1995).
Also, Courts are generally unified in the view that the term "for cause" should receive a liberal construction. Id. Notwithstanding that fact, however, a creditor must exhibit some minimum degree of due diligence prior to seeking such an extension, and the
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Court should not allow the motion to serve as license for a baseless "fishing expedition." Id; See also In re Leary, 185 B.R. 405, 406 (Bankr. D. Mass. 1995). To establish cause movant must (1) show that he had, with reasonable diligence, attempted to investigate the facts and circumstances, and (2) offer a reasonable explanation of why that investigation could not be completed within the allotted time. See In re Bomarito, 448 B.R. 242, 251 (Bankr. E.D. Cal. 2011).
The Trustee provided evidence that he has been seeking documents from the Debtor related to the operation of a business. (Isaacson Decl. ¶4). The Trustee’s counsel has determined that although the Debtor indicated that he earned no income from operation of a business in calendar years 2015 and 2016, the Debtor’s tax returns demonstrate that the Debtor earned wages in both years and also earned wages which of no less than $14,003 that were not disclosed in his Statement of Financial Affairs (SOFA). (Id. at ¶6). The Trustee and UST would like to examine the Debtor regarding the inaccuracies at the continued 341(a) meeting of creditors.
In addition to the Trustee’s showing of "cause", the Court notes that the Debtor, though properly served, has failed to file any opposition which the Court deems as consent to the granting of the Motion pursuant to LBR 9013-1(h).
TENTATIVE RULING
Based on the foregoing, the Court will GRANT the relief requested and provide the Trustee and UST extensions of 60 days for the filing of a complaint under
§ 727 and/or for a motion to dismiss.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Hiep Huu Phan Represented By Toby T Tran
Movant(s):
Karl T Anderson (TR) Represented By
Misty A Perry Isaacson
Trustee(s):
Karl T Anderson (TR) Represented By
Misty A Perry Isaacson
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FROM: 5/3/17, 5/17/17
EH
Docket 46
- NONE LISTED -
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
11:00 AM
Also #11 EH
Docket 39
- NONE LISTED -
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Movant(s):
Efren Diaz Estrada Represented By
W. Derek May
W. Derek May
W. Derek May
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brianna L Frazier Rika Kido
Ryan D ODea
11:00 AM
Also #10 EH
Docket 33
04/05/17
BACKGROUND
On August 30, 2016 ("Petition Date"), Efren Estrada ("Debtor"), filed his petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). On December 12, 2016, the Debtor received a chapter 7 discharge.
On March 14, 2017 (or approximately 7 months after the Petition Date and post-discharge), the Debtors filed their motion for conversion of their case to a case under chapter 13 ("Motion"). On March 22, 2017, the Trustee filed opposition to the Debtors’ Motion ("Opposition"). On March 29, 2017, the Debtors filed their reply ("Reply").
DISCUSSION
The Trustee argues that the Debtor’s Motion should be denied because it has been filed in bad faith and because the Debtor’s chapter 7 discharge precludes conversion pursuant to this Court’s holding in In re Santos, 561 B.R. 825, 829 (C.D. Cal. 2017).
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In response, the Debtor asserts that he will propose a chapter 13 plan that would pay the creditors whose debts have presumably already been discharged in this case. The only basis advanced by the Debtor to support his contention that a Debtor can propose to pay already discharged debts in a post-discharge converted chapter 13 case is that a different Judge in the Central District permitted such conversion in another case known to Counsel for the Debtor. The Debtor, however, has not indicated the legal basis for this other court’s ruling and such ruling would not be binding on this Court. Separately, the Court notes that although not expressly discussed in the Memorandum Decision on Santos, the Debtors in that case had also proposed to pay creditors whose debts had already been discharged at 100% through a confirmed chapter 13 plan. However, the bare promise that such a plan will be proposed where the Debtor’s chapter 7 debts have already been discharged has no binding effect.
Having failed to distinguish Santos, the Court declines to reach the issues raised by the Trustee regarding alleged bad faith of the Debtor in failing to properly identify the nature of his interest in the Property.
TENTATIVE RULING
Based on the foregoing, and following the Santos holding, the Court finds that "cause" exists to deny the Debtor’s request for conversion because the Debtor has received the benefits of a chapter 7 discharge and now seeks to avoid the concomitant burden of allowing the Trustee to administer the Debtor’s assets for the benefit of creditors.
APPEARANCES REQUIRED.
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Movant(s):
Efren Diaz Estrada Represented By
W. Derek May
11:00 AM
Trustee(s):
W. Derek May
W. Derek May
Charles W Daff (TR) Represented By Lynda T Bui Brianna L Frazier Rika Kido
Ryan D ODea
11:00 AM
EH
Docket 17
04/26/2017
BACKGROUND
On December 20, 2016, Alpine Industries LLC ("Debtor") filed a petition for chapter 7 relief. Robert Whitmore is the duly appointed chapter 7 trustee ("Trustee"). The bankruptcy petition is supported by an electronic filing declaration signed by the Debtor's prior counsel, Laleh Ensafi ("Ensafi") and also purportedly by the Debtor's principal, Michael Kiralla ("Kiralla"). (Docket No. 2).
On March 22, 2017, the Debtor filed a substitution, terminating the representation of Ensafi. On March 28, 2017, the Debtor filed a Motion to Dismiss its chapter 7 case ("Motion"). The Motion appears to have been properly served on the Trustee and all creditors. No opposition has been filed.
The Motion asserts as its primary basis for dismissal that (1) Kiralla was not fully informed of how the bankruptcy would affect the Debtor by Ensafi and (2) that the signature used to file the bankruptcy petition was not Kiralla's.
The electronic filing declaration certifies the accuracy of documents being filed by an attorney and certified an authorized signatory's permission to have the document filed by an attorney. Here, the allegations that form the basis for the dismissal can only be controverted by Ensafi. Notwithstanding, the Motion was not served on Ensafi.
Based on the foregoing the Court will CONTINUE the hearing to May 31, 2017, at 11:00 a.m. for service on Ensafi.
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APPEARANCES WAIVED. Movant to file/serve the Motion on Ensafi, and to file/serve notice of the continuance on all parties.
Debtor(s):
ALPINE INDUSTRIES, LLC Represented By Michael E Clark
Movant(s):
ALPINE INDUSTRIES, LLC Represented By Michael E Clark
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
(3) Granting Related Relief From: 5/17/17
EH
Docket 39
BACKGROUND
On October 16, 2016 ("Petition Date"), Charles David Arthur and Claire Blanza Arthur (collectively, "Debtors") filed their petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the Debtors’ bankruptcy estate ("Estate") is real property located at 35965 Carlton Road in Wildomar, CA (the "Property").
On April 25, 2017, the Trustee filed a Motion seeking (1) authority for a short sale of the Estate’s right, title, and interest in the Property free and clear of the interests; (2) approving payment of broker commission; and (3) granting related relief ("Motion").
No opposition has been filed.
DISCUSSION
Sale of Estate Property Pursuant to Section 363(b)
The trustee, after notice and a hearing, may sell property of the estate. 11
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U.S.C. § 363(b)(1); see also Commodity Futures Trading Comm’n v. Weintraub, 471
U.S. 343, 352 (1985). The sale must be in the best interests of the estate and the price must be fair and reasonable. In re Canyon Partnership, 55 B.R. 520 (Bankr. S.D. Cal. 1985); see also In re Wilde Horse Enterprises, Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal. 1991)(sale must have fair/reasonable price, accurate/reasonable notice to creditors and sale made in good faith). The trustee must articulate some "business justification" for selling estate property out of the "ordinary course of business" before the court may approve the transaction. In re Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983); In re Ernst Home Ctr., Inc., 209 B.R. 974, 979 (Bankr. W.D. Wash. 1997). Objections to sale that are based on inadequacy of price are often resolved the court ordering an auction, which may occur in open court. Simantrob v. Claims Prosecutor, LLC (In re Lahijani), 325 B.R. 282, 287 (9th Cir. BAP 2005) citing Fed. R. Bankr. P. 6004(f).1
Here, the Trustee asserts that the short sale will result in the estate being paid a fee of approximately $21,750. The declarations of Karina Jimenez and Anthony Silva (the "Buyers") indicate that the estate will be paid a fee of $21,750, in addition to the purchase price of $350,000. However, the Motion is not clear as to what underlies the "fee" being paid. Instead, it appears that the "fee" is actually a part of the purchase price. The framework proposed by the Trustee appears to indicate bad faith because he provides no basis rooted in bankruptcy for the Estate to charge a fee in exchange for the sale of an asset of the Estate.
a) Sale Free and Clear of non-Debtor Interests
A trustee may sell estate property "free and clear" of third party interests in the property, such as co-ownership interest, liens, claims and encumbrances. See 11
U.S.C. § 363(f). A sale free and clear of third party interests pursuant to section 363 is authorized only if one of the following conditions is met: (1) sale authorized by applicable nonbankruptcy law; (2) third party whose interest will be affected consents;
the affected interest is a lien and the sale price is greater than total value of all liens on the property; (4) the affected interest is a bona fide dispute; or (5) the third party whose interest will be affected could be compelled to accept a money satisfaction of the interest. 11 U.S.C. § 363(f)(1)-(5).
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The Trustee has not obtained consent from the first priority secured lender.
Without such consent, the Court cannot grant the Motion free and clear of this lien. As to the remaining junior liens, the Trustee proposes that a hypothetical foreclosure sale situation satisfies Section 363(f)(5). However, the Court believes that the analysis provided in Dishi & Sons v. Bay Condos LLC, 510 B.R. 696, 711 (S.D.N.Y. 2014) provides the better view of whether a hypothetical foreclosure sale can be a basis for granting free and clear under 363(f)(5).
narrow interpretation [of 363(f)(5)] provides a limited role for paragraph (5), but avoids rendering the remaining paragraphs mere surplusage. See In re PW, 391 B.R. 25, 44 (9th Cir. BAP 2008) ("[A]ny interpretation of paragraph (5) must satisfy the requirement that the various paragraphs of subsection (f) work harmoniously and with little overlap."). Other courts have therefore limited the scope of paragraph
(5) to those scenarios where the trustee or debtor, not any third party, is the actor. See, e.g., In re Ricco, Inc., 2014 WL 1329292, *3 (Bankr.N.D.W.Va. Apr. 1, 2014) ("[T]he only logical interpretation of
... § 363(f)(5) is that the statute requires that the trustee or debtor be the party able to compel monetary satisfaction for the interest which is the subject of the sale.") (quoting In re Haskell, 321 B.R. at 9); In re Scott, 2013 WL 4498987, *2–3 (Bankr.E.D.Ky. Aug. 21, 2013) (paragraph
(5) does not refer to foreclosure proceedings because they are initiated by creditors, not the debtor); In re Haskell, 321 B.R. at 9 (paragraph (5) does not encompass eminent domain proceedings because the trustee must be the party capable of compelling the interest holder to accept a money satisfaction). This Court agrees that paragraph (5) should be read to reach only those legal or equitable proceedings that could be brought by the trustee as owner of the property. A foreclosure by a third-party mortgagee is not such a proceeding. And as Dishi has not suggested any other hypothetical proceedings by which the trustee could compel TGM to accept a money satisfaction in exchange for extinguishment of its interest, the Court holds that paragraph (5) does not authorize a sale free and clear of TGM's rights. In re Daufuskie Island Props., LLC, 431 B.R. 626, 637 (Bankr.D.S.C.2010)
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Dishi & Sons at 711 (S.D.N.Y. 2014)(emphasis added).
Here, the Court is inclined to agree with the rationale of Dishi & Sons that 363 (f)(5) should be read narrowly to encompass only legal or equitable proceedings that could be brought by the trustee as the owner of the property. For this reason, the Court is inclined to deny the Trustee’s request to permit a sale free and clear of the junior liens against the Property.
TENTATIVE RULING
Based on the foregoing analysis, the Court is inclined to DENY the Motion.
APPEARANCES REQUIRED.
Debtor(s):
Charles David Arthur Represented By Anerio V Altman
Joint Debtor(s):
Claire Bigornia Blanza Arthur Represented By Anerio V Altman
Movant(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
Trustee(s):
Charles W Daff (TR) Represented By
11:00 AM
Lynda T Bui Rika Kido
11:00 AM
EH
Docket 49
BACKGROUND
On February 9, 2016 ("Petition Date"), Bernard Joseph O’Kelly ("Debtor") filed his petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the Debtor’s bankruptcy estate ("Estate") is vacant land located at 0 State Line in Big Bear City, California APN: 0315-097-17 (the "Property").
On May 10, 2017, the Trustee filed a Motion for Order: (1) Approving the Sale of Real Property of the Estate Pursuant to Bankruptcy Code § 363(b)(1) and Subject to Overbids, Combined With Notice of Bidding Procedures and Request for Approval of the Bidding Procedures Utilized; (2) Approving Payment of Real Estate Commission and Other Costs; and (3) Granting Related Relief ("Motion").
No opposition has been filed.
DISCUSSION
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The trustee, after notice and a hearing, may sell property of the estate. 11
U.S.C. § 363(b)(1); see also Commodity Futures Trading Comm’n v. Weintraub, 471
U.S. 343, 352 (1985). The sale must be in the best interests of the estate and the price must be fair and reasonable. In re Canyon Partnership, 55 B.R. 520 (Bankr. S.D. Cal. 1985); see also In re Wilde Horse Enterprises, Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal. 1991)(sale must have fair/reasonable price, accurate/reasonable notice to creditors and sale made in good faith). The trustee must articulate some "business justification" for selling estate property out of the "ordinary course of business" before the court may approve the transaction. In re Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983); In re Ernst Home Ctr., Inc., 209 B.R. 974, 979 (Bankr. W.D. Wash. 1997). Objections to sale that are based on inadequacy of price are often resolved the court ordering an auction, which may occur in open court. Simantrob v. Claims Prosecutor, LLC (In re Lahijani), 325 B.R. 282, 287 (9th Cir. BAP 2005) citing Fed. R. Bankr. P. 6004(f).1
Here, the Trustee asserts that the proposed sale of $15,000, subject to overbids, constitutes a sale of the property at fair market value which will provide the best and highest value for the benefit of the Estate. (Trustee Decl. ¶8). The Trustee’s calculation of proceeds is the following:
The proposed sale has been brought in good faith and has been negotiated on an "arms- length" basis. The court, in Wilde Horse Enterprises, set forth the factors in considering whether a transaction is in good faith. The court stated:
‘Good faith’ encompasses fair value, and further speaks to the integrity of the
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transaction. Typical ‘bad faith’ or misconduct, would include collusion between the seller and buyer, or any attempt to take unfair advantage of other
potential purchasers. And, with respect to making such determinations, the
court and creditors must be provided with sufficient information to allow them to take a position on the proposed sale.
Id. at 842 (citations omitted).
Here, the Trustee has arranged for sale of the Property with overbidding at the hearing. Trustee employed a broker, Becki Wheeler of Re/Max Big Bear ("Broker"), to market and sell the Property. The Broker, in turn, marketed the Property and received one offer. The marketing of the Property coupled with the overbidding support a finding that the sale is untainted by self-dealing (i.e. sale proposed in good faith and at arm’s length).
A trustee may sell estate property "free and clear" of third party interests in the property, such as co-ownership interest, liens, claims and encumbrances. See 11
U.S.C. § 363(f). A sale free and clear of third party interests pursuant to section 363 is authorized only if one of the following conditions is met: (1) sale authorized by applicable nonbankruptcy law; (2) third party whose interest will be affected consents;
the affected interest is a lien and the sale price is greater than total value of all liens on the property; (4) the affected interest is a bona fide dispute; or (5) the third party whose interest will be affected could be compelled to accept a money satisfaction of the interest. 11 U.S.C. § 363(f)(1)-(5).
Here, the only lien shown on the Title Report appears to be in favor of the San Bernardino County Tax Collector (the "County") for current and defaulted taxes in the amount of approximately $429.57. The Trustee proposes that this amount be paid through escrow with proceeds from the sale. Given that the County will receive full satisfaction of its claim, the Property may be sold free and clear of its interest.
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Generally, bidding procedures must be untainted by self-dealing, encourage bidding and be fair/reasonable/serve the best interests of the estate. See In re Crown Corp., 679 F.2d 774 (9th Cir. 1982).
The Court has reviewed the Trustee’s overbid procedures and finds that they adequately provide for an orderly sale untainted by self-dealing. (Mot. at 5:1-28, 6:1- 3). The Court finds the procedures to be fair and reasonable, and in the best interests of the estate.
Section 363(m) provides that "[t]he reversal or modification on appeal of an authorization under subsection (b) or (c) of this section of a sale or lease of property does not affect the validity of a sale or lease under such authorization to an entity that purchased or leased such property in good faith…." 11 U.S.C. § 363(m).
The Trustee has attached the declaration of the Paul Stephens, establishing that the proposed sale is an arms-length transaction. On this basis, the Court is inclined to find that Paul Stephens is a good faith purchaser under § 363(m).
Here, the Trustee seeks authorization to pay from escrow, the following broker commissions, which together constitute 10% of the gross sale price or a total of approximately $1,500. The Court finds that the amounts requested are reasonable and are approved.
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TENTATIVE RULING
For the foregoing reasons, the Court is inclined to GRANT the Motion as follows:
Authorizing the sale of the Property to the Buyer or to a successful overbidder at the hearing;
Approving the sale free and clear of all liens, claims, interests, and encumbrances and authorizing the Trustee to pay liens, costs of sale and other expenses directly from the sale proceeds, including escrow fees, taxes, and real estate commissions as set forth in the Motion;
Finding that the Buyer (Paul Stephens) is a "good faith" purchaser under § 363 (m);
Providing that the Trustee is authorized to execute and deliver any documents necessary to effectuate the proposed sale;
Finding that notice was proper and sufficient;
Approving the overbid procedures; and
Waiving the fourteen day stay under FRBP 6004(h).
APPEARANCES REQUIRED.
Debtor(s):
Bernard Joseph O'Kelly Represented By Brian J Soo-Hoo
Movant(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
2:00 PM
Adv#: 6:15-01265 Pringle v. Clements-Biehl
From: 2/1/17, 3/29/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - INACTIVE - Steven L Bryson
Defendant(s):
Rene Clements-Biehl Represented By Allan D Sarver
Plaintiff(s):
John P. Pringle Represented By Elyza P Eshaghi
Brandon J Iskander
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi
2:00 PM
Brandon J Iskander
2:00 PM
Adv#: 6:16-01235 Grobstein v. Hewitt
For an Accounting; For Turnover of Property of the Estate; and, To Avoid and Recover Fraudulent Transfers Nature of Suit: (91 (Declaratory judgment, (Approval of sale of property of estate and of a co-owner - 363(h) (Other (e.g. other actions that would have been brought in state court if unrelated to bankruptcy (11 (Recovery of money/property - 542 turnover of property
From: 12/7/16 EH
Docket 1
- NONE LISTED -
Debtor(s):
Gregory William Hewitt Represented By Annie Verdries
Defendant(s):
Pamela Hewitt Represented By Annie Verdries
Plaintiff(s):
Howard B. Grobstein Represented By Michael W Davis Nina Z Javan
Trustee(s):
Howard B Grobstein (TR) Represented By
2:00 PM
Michael W Davis David Seror Reed Bernet Nina Z Javan
2:00 PM
Adv#: 6:16-01310 Swift Financial Corporation d.b.a. Swift Capital v. Castillo
EH
Docket 9
- NONE LISTED -
Debtor(s):
Francisco Javier Castillo Represented By Joseph M Tosti
Defendant(s):
Francisco Javier Castillo Pro Se
Plaintiff(s):
Swift Financial Corporation d.b.a. Represented By
Lazaro E Fernandez
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
Docket 28
- NONE LISTED -
Debtor(s):
Clyde Lee Jaso Represented By Gregory J Doan Cheryl R Lee
Joint Debtor(s):
Marie Lupe Jaso Represented By Gregory J Doan Cheryl R Lee
Trustee(s):
Robert Whitmore (TR) Pro Se
12:30 PM
Docket 89
- NONE LISTED -
Debtor(s):
Kathryn D Chavira Represented By James B Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also # EH
Docket 92
- NONE LISTED -
Debtor(s):
Kathryn D Chavira Represented By James B Smith
Movant(s):
Kathryn D Chavira Represented By James B Smith James B Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #4 EH
Docket 28
6/1/17
Background:
On October 6, 2015, Miguel & Maria Vivar ("Debtors") filed a Chapter 13 voluntary petition. On December 2, 2015, Debtors’ Chapter 13 plan was confirmed.
On February 12, 2016, Residential Mortgage Solution LLC ("Creditor") filed an unsecured claim in the amount of $39,838.55. On May 2, 2017, Debtors filed a claim objection.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223
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F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
The contract that forms the basis for Creditor’s claim identifies Texas law as the applicable law. Debtors argue that Creditor’s claim is barred by the applicable statute of limitations, although it does not appear Debtors identified the correct legal provision. Tex. Prop Code § 51.003(a) states:
(a) If the price at which real property is sold at a foreclosure sale under Section
51.002 is less than the unpaid balance of the indebtedness secured by the real property, resulting in a deficiency, any action brought to recover the deficiency must be brought within two years of the foreclosure sale and is governed by
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this section.
Debtors stated that the real property that served as security for the purchase money note was foreclosed upon on May 5, 2009. Therefore, Creditor’s claim is barred.
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-1(h).
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Miguel Vivar Represented By
Rebecca Tomilowitz
Joint Debtor(s):
Maria Vivar Represented By
Rebecca Tomilowitz
Movant(s):
Maria Vivar Represented By
Rebecca Tomilowitz Rebecca Tomilowitz
Miguel Vivar Represented By
12:30 PM
Trustee(s):
Rebecca Tomilowitz Rebecca Tomilowitz
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #3 EH
Docket 24
- NONE LISTED -
Debtor(s):
Miguel Vivar Represented By
Rebecca Tomilowitz
Joint Debtor(s):
Maria Vivar Represented By
Rebecca Tomilowitz
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #6 - #8 EH
Docket 56
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #5 - #8 EH
Docket 65
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #5 - #8 EH
Docket 60
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Joseph Robert Byrne Represented By Jenny L Doling Jenny L Doling Summer M Shaw Summer M Shaw
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 3/23/17, 4/27/17, 5/11/17 Also #5 - #7
EH
Docket 61
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Joseph Robert Byrne Represented By Jenny L Doling Jenny L Doling Summer M Shaw Summer M Shaw
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 16
6/1/17
Background:
On March 10, 2017, Jose & Erika Payan ("Debtors") filed a Chapter 13 voluntary petition. On March 14, 2017, Wescom Credit Union ("Creditor") filed a unsecured proof of claim in the amount of $12,553.51 on the basis of a personal line of credit. On April 19, 2017, Debtors filed a claim objection. On May 9, 2017, Debtors’ Chapter 13 plan was confirmed.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving
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rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Debtors argue that the statute of limitations is four years for Creditor’s claim and that Creditor’s claim is therefore barred. Cal. Code Civ. P. § 337(2) provides for a statute of limitations of four years for:
An action to recover (1) upon a book account whether consisting of one or more entries; (2) upon an account stated based upon an account in writing, but the acknowledgement of the account stated need not be in writing; (3) a balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that where an account stated is based upon an account of one item, the time shall begin to run from the date of said item, and where an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.
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Cal. Code Civ. P. § 337(1) provides that the statute of limitations is also four years for claims based upon a contract.
The Court has reviewed Creditor’s proof of claim and it appears that the applicable statute of limitations is four years pursuant to Cal. Code Civ. P. § 337. It additionally appears that Debtors have not made a payment on the claim in nearly nine years, and, therefore, the statute of limitations has expired.
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Jose Camacho Payan Represented By
Ramiro Flores Munoz
Joint Debtor(s):
Erika Vanessa Payan Represented By
Ramiro Flores Munoz
Movant(s):
Erika Vanessa Payan Represented By
Ramiro Flores Munoz
Jose Camacho Payan Represented By
Ramiro Flores Munoz
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Frank Castodio Represented By Lauren Rode
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Michael Montoya Represented By Suzette Douglas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
CASE DISMISSED 4/24/17
EH
Docket 15
BACKGROUND
On April 5, 2017, Meghan McConaghy ("Debtor") filed a Chapter 13 voluntary petition. On April 24, 2017, Debtor’s case was dismissed for failure to file information.
On May 2, 2017, UST filed a motion to compel Debtor’s attorney, Neil Hedtke ("Counsel"), to disclose compensation. On May 8, 2017, Counsel filed a disclosure of compensation. On May 11, 2017, Counsel filed his opposition to UST’s motion.
DISCUSSION
UST’s motion requests that the Court should order Counsel to file a statement of attorney compensation, and retain jurisdiction over any matter related to § 329.
12:30 PM
11 U.S.C. § 329(a) states:
Any attorney representing a debtor in a case under this title, or in connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payments or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation.
Counsel has filed the appropriate statement of attorney compensation. The Court will retain jurisdiction over any matter related to § 329.
TENTATIVE RULING
Counsel has filed the appropriate statement of attorney compensation. Subject to comments from the UST, the Court will retain jurisdiction over any matter related to § 329.
APPEARANCES REQUIRED.
Debtor(s):
Meghan McConaghy Represented By Neil R Hedtke
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 17
Summary of the Motion:
TENTATIVE
The Court is inclined to GRANT the motion, avoiding the lien of Real Time Solutions upon receipt of a Chapter 13 discharge.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Angel Benavidez Represented By William P Mullins
12:30 PM
Movant(s):
Angel Benavidez Represented By William P Mullins
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #14 EH
Docket 0
- NONE LISTED -
Debtor(s):
Angel Benavidez Represented By William P Mullins
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Christopher Grosey Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Richard Ortiz Represented By Elena Steers
Joint Debtor(s):
Dolores Ortiz Represented By Elena Steers
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Hector Miguel Ortiz Represented By
Rabin J Pournazarian
Joint Debtor(s):
Virginia Romero Ortiz Represented By
Rabin J Pournazarian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
David B. Hertsgaard Represented By Timothy S Huyck
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Steven Husbands Represented By Timothy S Huyck
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Carlos Pina Represented By Bryn C Deb
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Annlynne Parsons Represented By Robert S Altagen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Catherine Mary Brown-Morris Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Larry Eugene Bangert Represented By Derik N Lewis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jane Engel Represented By
Peter L Nisson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Abel Gonzalez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Silvia Alvarez Represented By
Filemon Kevin Samson III
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Biani Berlenda Mora Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Brian William Bokon Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Howard Edward Terrell Jr. Represented By Paul Horn
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Valecia Renee Knox Represented By
L. Tegan Hurst
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Christina Hill Represented By Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Alvin M. Ching Represented By Keith Q Nguyen
Joint Debtor(s):
Aphrodyte D. Ching Represented By Keith Q Nguyen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Hermenegildo Morales Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Loretta Chavis Represented By Dan Perry
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Howard Lamar Sanders Represented By
D Justin Harelik
Joint Debtor(s):
Jenique B. Sanders Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Mark R. Smith Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
William Pitts Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joseph Quintin Marca Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
William J Schaefer Represented By Patricia M Ashcraft
Joint Debtor(s):
Jennifer L. Schaefer Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 116
- NONE LISTED -
Debtor(s):
Ernest B Galante Represented By
Dale Parham - INACTIVE - Michael Smith
Joint Debtor(s):
Susan D Galante Represented By
Dale Parham - INACTIVE - Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 97
- NONE LISTED -
Debtor(s):
Kenneth Vernell Hawkins Represented By
Craig J Beauchamp
Joint Debtor(s):
Brenda A Hawkins Represented By
Craig J Beauchamp
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:31 PM
Docket 53
- NONE LISTED -
Debtor(s):
Adam Lee Miederhoff Represented By Dana Travis
Joint Debtor(s):
Cheri Catherine Miederhoff Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 92
- NONE LISTED -
Debtor(s):
Liliana Gomez Represented By Matthew D Resnik
S Renee Sawyer Blume
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 30
- NONE LISTED -
Debtor(s):
Eric Pieters Markel Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 51
- NONE LISTED -
Debtor(s):
Juan Manuel Plascencia De La Torre Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 100
- NONE LISTED -
Debtor(s):
Alfredo Manzo Arrieta Represented By Andy C Warshaw
Joint Debtor(s):
Mayte Hernandez- Arrieta Represented By Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 41
- NONE LISTED -
Debtor(s):
Natalie G Massie Represented By Kevin M Cortright
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 45
- NONE LISTED -
Debtor(s):
James Leonard Blow Jr. Represented By Jonathan D Doan
Joint Debtor(s):
Amanda Joyce Atkinson-Blow Represented By Jonathan D Doan
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 44
- NONE LISTED -
Debtor(s):
Oscar Chavez Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 77
- NONE LISTED -
Debtor(s):
Edward Edmund Zozaya Represented By Dana Travis
Joint Debtor(s):
Georgia Parrilla Zozaya Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 28
- NONE LISTED -
Debtor(s):
Diana Cescolini Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
EH
Docket 17
- NONE LISTED -
Debtor(s):
James Edwin Horn Pro Se
Joint Debtor(s):
Nam-Yong Horn Pro Se
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
EH
Docket 12
- NONE LISTED -
Debtor(s):
Dennis Patterson Pro Se
Joint Debtor(s):
Sandra McKay Pro Se
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
EH
Docket 7
- NONE LISTED -
Debtor(s):
Theresa J Pritchard Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
11:00 AM
Adv#: 6:16-01265 Whitmore (TR) v. Davol, Inc. et al
(Holding date)
From: 1/4/17, 2/1/17, 3/1/17, 4/12/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jesus M. Tapia Represented By Michael Smith
Defendant(s):
C.R. Bard, Inc. Represented By Christopher O Rivas
Bard Devices, Inc. Represented By Christopher O Rivas
Davol, Inc. Represented By
Christopher O Rivas
Plaintiff(s):
Robert Whitmore (TR) Represented By Troy A Brenes
Trustee(s):
Robert Whitmore (TR) Represented By
11:00 AM
Douglas A Plazak Troy A Brenes
11:00 AM
Docket 108
6/7/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative fees and expenses:
Trustee Fees: | $ 33,295.28 |
Attorney Fees: | $40,781.94 |
Attorney Costs: | $ 2,506.85 |
Accountant Fees: | $ 2,530 |
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Larry Jack Wadsworth Represented By Keith F Rouse
Joint Debtor(s):
Sherilyn Denise Wadsworth Represented By
11:00 AM
Trustee(s):
Keith F Rouse
Howard B Grobstein (TR) Represented By Richard K Diamond Steven J Schwartz Michael G D'Alba
11:00 AM
Docket 95
6/7/17
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 9,497.43 Trustee Expenses: $ 454.37
Attorney Fees: $ 42,308.50 Attorney Costs:$ 797.60
APPEARANCES REQUIRED. Trustee to address September 29, 2016 order allowing claim of Richard Milewski as a general unsecured claim, on which basis the Trustee’s final report appears incorrect.
Debtor(s):
Donald W McCasland Represented By Ronald L Brownson
Joint Debtor(s):
Victoria F McCasland Represented By
11:00 AM
Trustee(s):
Ronald L Brownson
Karl T Anderson (TR) Represented By Robert A Hessling
11:00 AM
Docket 36
BACKGROUND
On April 26, 2010, Rochelle Lara ("Debtor") filed a Chapter 7 voluntary petition. On August 16, 2016, Debtor received a discharge, and three days later, the case was closed.
On February 3, 2017, the case was reopen to administer a settlement award in the amount of $174,349.78. On March 10, 2017, Debtor amended her schedules B & C to claim an exemption in the settlement awards pursuant to Cal. Code Civ. P. § 704.140. The Schedule C exemptions also removed exemptions of $7,100 in cash and $8,483 in anticipated tax refunds.
On May 1, 2017, Trustee filed a motion to approve compromise. Pursuant to the settlement, Trustee will receive $24,750 from the settlement proceeds to distribute to creditors of the estate, and will release and abandon any right to the remainder.
DISCUSSION
11:00 AM
Fed. R. Bankr. P. Rule 9019(a) states: "On motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct." The Court may grant approval if it determines that the compromise is "fair and equitable." See In re Berkeley Delaware Court, LLC, 834 F.3d 1036, 1039 (9th Cir. 2016). In determining whether the compromise is fair and equitable, the Court applies a four-factor test. See In re DiCostanzo, 399 Fed. Appx. 307, 308 (9th Cir. 2010). The test was originally outlined in In re A & C Props., and provides for consideration of
(a) The probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it;
(d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises.
784 F.2d 1377, 1381 (9th Cir. 1986) (quotation omitted). "The bankruptcy court has great latitude in approving compromise agreements." In re Woodson, 839 F.2d 610, 620 (9th Cir. 1988). Typically, "a compromise should be approved unless it falls below the lowest point in the range of reasonableness." In re Art & Architecture Books of the 21st Century, 2016 WL 1118742 at *25 (Bankr. C.D. Cal. 2016) (quotation omitted).
Cal. Code Civ. P. § 704.140(b) provides that personal injury settlement awards can be exempted to the extent reasonably necessary for the support of the debtor. The primary argument raised by Trustee is that the extent to which Debtor’s exemption may be reduced is highly uncertain, and that such a proceeding would involve complex facts and significant time and expenses. Given the complexity of the litigation required, and the consequent uncertainty regarding its prospects, in addition to the absence of any opposition to Trustee’s motion, the Court finds that the proposed settlement is within the range of reasonableness.
TENTATIVE RULING
11:00 AM
The Court is inclined to GRANT the motion, subject to discussion regarding how much of the settlement amount will be available to general unsecured creditors after payment of administrative expenses.
APPEARANCES REQUIRED. Movant’s counsel may appear telephonically.
Debtor(s):
Rochelle A Lara Represented By Brian C Fenn
Movant(s):
Karl T Anderson (TR) Represented By Robert A Hessling
Trustee(s):
Karl T Anderson (TR) Represented By Robert A Hessling
11:00 AM
Docket 97
6/7/17
Background:
On June 27, 2011, Roberta Clark ("Debtor") filed a Chapter 7 voluntary petition. On October 12, 2011, Debtor received a discharge.
On April 30, 2012, Toyota Motor Credit Corp. ("Creditor") filed an unsecured claim in the amount of $22,145.54 on the basis of a car loan. On July 18, 2012, Creditor amended its proof of claim, asserting an unsecured claim in the amount of $3,649.01.
On May 4, 2017, Trustee filed a claim objection. The Court notes that the Trustee did not use the mandatory claim objection form.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie
11:00 AM
evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Creditor’s claim was filed on April 30, 2012. The claims bar date was December 27, 2011. Therefore, Creditor’s claim was not timely filed pursuant to Fed. R. Bankr. P. Rule 3002(c). Pursuant to 11 U.S.C. § 726(a)(2), tardily filed claims are subordinated to timely filed claims.
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-1(h).
11:00 AM
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Roberta Louise Clark Represented By Robert L Firth
Movant(s):
Todd A. Frealy (TR) Represented By Robert P Goe
Trustee(s):
Todd A. Frealy (TR) Represented By Robert P Goe
11:00 AM
EH
Docket 46
BACKGROUND
On August 27, 2009, William & Rebecca Graham ("Debtors") filed a Chapter 7 voluntary petition. On January 12, 2010, Debtors received a discharge, and seven days later the case was closed.
On July 29, 2016, the case was reopened to administer settlement proceeds.
On January 17, 2017, Trustee filed a motion to approve compromise. That motion was denied on March 17, 2017. On May 1, 2017, Trustee filed another motion to approve compromise.
DISCUSSION
11:00 AM
Fed. R. Bankr. P. Rule 9019(a) states: "On motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct." The Court may grant approval if it determines that the compromise is "fair and equitable." See In re Berkeley Delaware Court, LLC, 834 F.3d 1036, 1039 (9th Cir. 2016). In determining whether the compromise is fair and equitable, the Court applies a four-factor test. See In re DiCostanzo, 399 Fed. Appx. 307, 308 (9th Cir. 2010). The test was originally outlined in In re A & C Props., and provides for consideration of
The probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it;
(d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises.
784 F.2d 1377, 1381 (9th Cir. 1986) (quotation omitted). "The bankruptcy court has great latitude in approving compromise agreements." In re Woodson, 839 F.2d 610, 620 (9th Cir. 1988). Typically, "a compromise should be approved unless it falls below the lowest point in the range of reasonableness." In re Art & Architecture Books of the 21st Century, 2016 WL 1118742 at *25 (Bankr. C.D. Cal. 2016) (quotation omitted).
As occurred in the original 9019 motion, Trustee has requested that the Court approve the settlement agreement, without actually providing the Court with a copy of the settlement agreement, or attempting to file the settlement agreement under seal.
Trustee has, however, clarified the details of the settlement agreement and, subsequent to the first hearing, obtained authorization to employ special counsel.
Because the settlement agreement would provide proceeds to pay allowed, unsecured claims in full, and in the absence of any opposition, the Court concludes that the A&C factors weigh in favor of approval of the settlement. Because creditors will be paid in full, the settlement is in the best interest of the estate, and there does not appear to be any plausible benefit of continuing to litigate the complex claim.
TENTATIVE RULING
11:00 AM
The Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
William Scott Graham Represented By Edward G Topolski
Joint Debtor(s):
Rebecca Sue Graham Represented By Edward G Topolski
Movant(s):
Karl T Anderson (TR) Represented By Robert A Hessling
Trustee(s):
Karl T Anderson (TR) Represented By Robert A Hessling
11:00 AM
From: 4/26/17, 5/10/17 Also #11
EH
Docket 35
- NONE LISTED -
Debtor(s):
Laureen Martha Harley Represented By
James M Powell - DISBARRED - Michael H Raichelson
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
11:00 AM
Also #10 EH
Docket 29
- NONE LISTED -
Debtor(s):
Laureen Martha Harley Represented By
James M Powell - DISBARRED - Michael H Raichelson
Movant(s):
Steven M Speier (TR) Represented By Robert P Goe
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
11:00 AM
Also #13 EH
Docket 33
04/05/17
BACKGROUND
On August 30, 2016 ("Petition Date"), Efren Estrada ("Debtor"), filed his petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). On December 12, 2016, the Debtor received a chapter 7 discharge.
On March 14, 2017 (or approximately 7 months after the Petition Date and post-discharge), the Debtors filed their motion for conversion of their case to a case under chapter 13 ("Motion"). On March 22, 2017, the Trustee filed opposition to the Debtors’ Motion ("Opposition"). On March 29, 2017, the Debtors filed their reply ("Reply").
DISCUSSION
The Trustee argues that the Debtor’s Motion should be denied because it has been filed in bad faith and because the Debtor’s chapter 7 discharge precludes conversion pursuant to this Court’s holding in In re Santos, 561 B.R. 825, 829 (C.D. Cal. 2017).
11:00 AM
In response, the Debtor asserts that he will propose a chapter 13 plan that would pay the creditors whose debts have presumably already been discharged in this case. The only basis advanced by the Debtor to support his contention that a Debtor can propose to pay already discharged debts in a post-discharge converted chapter 13 case is that a different Judge in the Central District permitted such conversion in another case known to Counsel for the Debtor. The Debtor, however, has not indicated the legal basis for this other court’s ruling and such ruling would not be binding on this Court. Separately, the Court notes that although not expressly discussed in the Memorandum Decision on Santos, the Debtors in that case had also proposed to pay creditors whose debts had already been discharged at 100% through a confirmed chapter 13 plan. However, the bare promise that such a plan will be proposed where the Debtor’s chapter 7 debts have already been discharged has no binding effect.
Having failed to distinguish Santos, the Court declines to reach the issues raised by the Trustee regarding alleged bad faith of the Debtor in failing to properly identify the nature of his interest in the Property.
TENTATIVE RULING
Based on the foregoing, and following the Santos holding, the Court finds that "cause" exists to deny the Debtor’s request for conversion because the Debtor has received the benefits of a chapter 7 discharge and now seeks to avoid the concomitant burden of allowing the Trustee to administer the Debtor’s assets for the benefit of creditors.
APPEARANCES REQUIRED.
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Movant(s):
Efren Diaz Estrada Represented By
W. Derek May
11:00 AM
Trustee(s):
W. Derek May
W. Derek May
Charles W Daff (TR) Represented By Lynda T Bui Brianna L Frazier Rika Kido
Ryan D ODea
11:00 AM
Also #12 EH
Docket 39
Background:
On August 30, 2016, Efren Estrada ("Debtor") filed a motion to vacate discharge. On Schedule A, Debtor listed certain real property located in Ontario, California (the "Property"), in which Debtor asserted an interest as joint tenant. Debtor estimated the value of the Property as $385,000. On Schedule C, Debtor claimed an exemption in the Property of $100,000 and, on Schedule D, Debtor listed Seterus as having a security interest in the Property in the amount of $207,757. Therefore, the information identified in Debtor’s schedules suggested that there was $77,243 in equity in the property above Debtor’s exemption.
On November 30, 2016, Trustee filed an application to employ general counsel. The application identified the potential sale of the Property as the primary justification for the employment of counsel. On December 12, 2016, Debtor received a discharge. On December 21, 2016, Trustee’s application to employ general counsel was granted.
Between January 17, 2017, and March 14, 2017, Debtor filed four substitutions of attorney. On February 21, 2017, the deadline for filing claims expired with no proofs of claim having been filed against the estate. Seven days later Trustee filed six
11:00 AM
unsecured proofs of claim totaling $21,459.
On March 14, 2017, Debtor filed a motion to convert to Chapter 13. On March 16, 2016, Debtor amended Schedules I & J, increasing monthly disposable income from
$0 to $493. The increase was primarily attributable to a $900 monthly increase in family contributions, from $350 to $1250. On March 22, 2017, Trustee filed his opposition to Debtor’s motion to convert. Debtor filed a reply on March 29, 2017, indicating that he was willing and able to pay a 100% plan and would consent to a conversion order containing a condition that dismissal of the case would be prohibited without a hearing and notice to the Chapter 7 Trustee.
At a hearing on Debtor’s motion to convert, the Court informed Debtor that it had recently held that a post-discharge conversion to Chapter 13 was generally inappropriate. In re Santos, 561 B.R. 825 (Bankr. C.D. Cal. 2017). Debtor indicated that he would file a motion to vacate discharge, and the Court continued the matter.
On April 26, 2017, Debtor filed a motion to vacate discharge. On May 3, 2017, Trustee filed his opposition to the motion.
Legal Analysis:
Debtor has relied upon Fed. R. Civ. P. Rule 60(b). Rule 60(b), made applicable to bankruptcy proceedings by Fed. R. Bankr. P. Rule 9024, states:
On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:
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mistake, inadvertence, surprise, or excusable neglect;
newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
the judgment is void;
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 equitable;
any other reason that justifies relief.
Debtor cites In re Starling for the proposition that Rule 60(b) can be utilized by a debtor to vacate a discharge. 359 B.R. 901 (Bankr. N.D. Ill. 2007). See also In re Mosby, 244 B.R. 79, 90 (Bankr. E.D. Va. 2000) ("The Court concurs with the reasoning in Cisneros and Jones and concludes that relief in the form of an order vacating a chapter 7 discharge may potentially be granted on motion of a debtor under Rule 60(b), Fed. R. Civ. P., as incorporated by Fed. R. Bankr. P. 9024."); In re Hauswirth, 242 B.R. 95, 97 (Bankr. N.D. Ga. 1999) ("Debtor’s conversion to Chapter 13 before the Chapter 7 Trustee has completed the administration of the estate but after the discharge order is entered thwarts the proper operation of the Code, as it interrupts the complete administration intended by Congress. Pursuant to Bankruptcy Rule 9024, which incorporates FRCP 60, or, alternatively, pursuant to this court’s authority under 11 U.S.C. § 105, the inconsistency of allowing a debtor two discharges in one case may be avoided by vacating a debtor’s Chapter 7 discharge.").
As noted by In re Starling, there may be tension between the approach adopted by Debtor and the operation of 11 U.S.C. § 727(d), which provides the mechanism whereby a trustee, a creditor, or the United States Trustee can seek revocation of a debtor’s discharge. While In re Starling concluded that the existence of § 727(d) does
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not foreclose the ability to vacate a discharge pursuant to Rule 60(b), other courts have held to the contrary. Compare 359 B.R. at 913 with In re Markovich, 207 B.R. 909, 913 (B.A.P. 9th Cir. 1997) ("We agree with the bankruptcy court that it did not have the inherent equitable power to revoke a discharge outside the framework of § 727(d). The equity power of the bankruptcy court cannot be used to override specific statutory provisions in the Code."). Therefore, this Court must determine: (1) whether it is legally permissible for a debtor to utilize Rule 60(b) to vacate a discharge; and, if it is permissible, (2) whether the facts of this case warrant granting Debtor’s motion to vacate discharge.
Application of Rule 60(b) to Discharge
Markovich & Starling
As noted above, Markovich and Starling represent opposite interpretations of the applicability of Fed. R. Civ. P. Rule 60(b) to discharge orders in light of § 727(d). Markovich, in concluding that § 727(d) precluded application of Rule 60(b) to discharge orders, summarily stated, after citing conflicting decisions, that: "[t]he equity powers of the bankruptcy court cannot be used to override specific statutory provisions in the Code." This statement, without greater legal analysis, is not compelling. Important in interpreting the discussion in Markovich is footnote 2 therein, which states, in part: "[t]he soundness of this argument is questionable since nothing was to be gained by moving to vacate the discharge in Debtor’s chapter 7 case. The nondischargeable claim could be discharged in either a converted chapter 13 or a new chapter 13 case filed by Debtor." Contextually, the Markovich court believed that Debtor’s request to vacate discharge was unnecessary,1 an important consideration in interpreting the Court’s decision to summarily affirm the bankruptcy court.
In re Starling, however, meticulously analyzes the same issues that the Court is confronted with here. First, Starling noted that the decision in Disch v. Rasmussen, 417 F.3d 769 (7th Cir. 2005), precluded the court from relying on § 105(a) to allow the
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debtor to vacate its discharge. 359 B.R. at 913. Nevertheless, the Disch court noted that it was legally permissible for a discharge order to be vacated through the use of Fed. R. Civ. P. Rule 60:
Final bankruptcy orders can be set aside under Bankruptcy Rule 9024, see In re Met-L-Wood Corp., 861 F.2d 1012, 1018 (7th Cir. 1988), and nothing in the rule indicates that it does not apply to the revocation of discharges.
417 F.3d 769, 778 (7th Cir. 2005). Starling adopted the reasoning in Disch, stating: "based on the Seventh Circuit’s decision in Rasmussen, it is within discretion here to vacate the order of discharge based on one of the reasons listed in Rule 60(b) Fed. R. Civ. P., should any be applicable." 359 B.R. at 913.
Notably, as identified in Disch, the Ninth Circuit Court of Appeals has noted that Rule 60(b) could be used to vacate a discharge in a Chapter 13 case. In re Cisneros, 994 F.2d 1462, 1466 (9th Cir. 1993) ("Section 1328(e) therefore does not conflict with Rule 9024 as applied by the bankruptcy court. The bankruptcy court and the BAP
therefore properly rejected the Debtors’ argument that section 1328(e) serves to limit the power conferred upon the court by Rule 60(b) through Bankruptcy Rule 9024.).2 Trustee has not made an attempt to distinguish the discharge revocation provision in Chapter 13 from the discharge revocation provision in Chapter 7, but instead cites a case from the United States Bankruptcy Court, Eastern District of Pennsylvania, In re Nader, 1998 Bankr. LEXIS 1381 at *13-14 (Bankr. E.D. Pa. 1998), which limited the scope of Cisneros based on a Third Circuit Court of Appeals decision, In re Fesq, 153 F.3d 113 (3rd Cir. 1998). This Court does not have the same discretion – Cisneros is binding on this court to the extent the analysis is applicable to a Chapter 7 case, and Fesq is merely persuasive. Therefore, the Court will not adopt a narrow reading of Cisneros in deference to Fesq.
Relationship Between Fed. R. Civ. P. Rule 60(b) and 11 U.S.C. § 727(d)
The tension between the Markovich and Starling decisions rests in their conflicting
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interpretations of whether the statutory interpretation doctrine of expression unius est exclusion alterius necessitates a conclusion that the operation of § 727(d) results in field pre-emption. More specifically, the reasoning illustrated by Markovich stands for the proposition that because Congress detailed procedures for the revocation of discharge in § 727(d), it is improper for a bankruptcy court to interpret the Fed. R. Civ. P. as providing additional grounds for the revocation of discharge. See generally 207 B.R. at 913.
On the other hand, Starling interprets the scope of § 727(d) more narrowly, concluding that while the statute provides the mechanism by which a trustee, creditor, or the United States Trustee may obtain a revocation of discharge, it does not govern or limit attempts by a debtor to revoke his or her own discharge. 359 B.R. at 914.
Starling notes that the mechanism for revocation of discharge in the Bankruptcy Act of 1898 (11 U.S.C. § 33) explicitly included any party in interest, and that the phrase "any other party in interest" was deleted in the drafting of the Bankruptcy Code. Id. The removal of that phrase is not conclusive, however, because it could either be interpreted as implying a Congressional intent to eliminate the ability of a debtor to seek revocation of a discharge, or as simply implying that Congress no longer intended for that provision to apply to debtors.
The Court concludes that it is implausible to assert that § 727(d) is literally the only mechanism by which a discharge could be revoked. For instance, if the granting of a discharge was a clerical error, the Court could revoke the discharge pursuant to Fed. R. Civ. P. Rule 60(a). See, e.g., In re Ali, 219 B.R. 653, 655 (Bankr. E.D.N.Y. 1998).
Therefore, it is not accurate that § 727(d) governs the entire universe of reversing a discharge. Instead, it is a question of scope, i.e., what mechanism(s) other than 727(d) can vacate or revoke a discharge? Without endeavoring to determine all such mechanisms, as shown below, a Rule 60(b) motion brought by a debtor appears to be one such mechanism.
The Court notes that there is a simple and logical reason that a debtor is not among the parties identified as having express standing to pursue a revocation of discharge pursuant to § 727(d): all of the enumerated grounds for such a request pertain to bad acts of the debtor. Indeed, § 727(d) appears designed for the sole purpose of punishing debtors who act in bad faith or fail to fulfill statutory duties. Clearly, implicit in the statute is an assumption that the provision will be utilized in cases
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where the debtor wishes to retain his discharge.
Therefore, § 727(d) is completely silent as to a situation where a debtor wishes to vacate his discharge. This situation is categorically distinct from the type of situation contemplated by § 727(d) in two important respects: (1) the debtor does not wish to retain his discharge; and (2) the debtor has not committed a bad faith act. These two distinctions create a fundamentally different situation. And while § 727(d) serves a coercive function, encouraging complying with statutory duties, Rule 60(b) serves a corrective function, ensuring that justice is equitably administered. Because § 727(d) serves a fundamentally different purpose and is applicable in fundamentally different situations, the Court concludes that, in accordance with Disch and Starling, § 727(d) does not preclude a debtor’s use of Rule 60(b) to revoke a discharge.
This conclusion does not violate the canon of expressio unius est exclusio alterius
because, as noted by Starling, the Supreme Court has stated:
[a]s we have held repeatedly, the canon expressio unius est exclusio alterius does not apply to every statutory listing or grouping; it has force only when the items expressed are members of an "associated group or series," justifying the inference that items not mentioned were excluded by deliberate choice, not inadvertence.
Barnhart v. Peabody Coal Co., 537 U.S. 149, 168 (2003). In the context of § 727(d), a debtor is not part of the same "associated group or series," as the expressed parties – when § 727(d) is invoked, the debtor’s interests and goals are typically diametrically opposed. See generally 359 B.R. at 915 ("Moreover, one cannot reasonably argue that a debtor falls within the ‘associated group or series’ listed in the statute in order to apply the Expressio Unius doctrine. The interests of a Chapter 7 debtor are not identical or even remotely similar to those of a trustee, creditors or the United States trustee."). It simply bends logic to make a substantive legal inference that § 727 bars a debtor’s request where a debtor is not among the parties identified as having standing to bring a § 727(d) motion, and a § 727(d) motion is only designed to punish or coerce a debtor.
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Certainly, strong policy considerations exist to ensure that debtors are free from any harassment or pressure to vacate a discharge. To find otherwise and to allow a debtor to vacate his discharge without close scrutiny would undermine the bedrock principle of a debtor’s fresh start. As discussed below, the circumstances of this case do not present that situation.
Application of Rule 60(b) to Facts of Case
Debtor argues that Rule 60(b)(1), (5), and (6) justify vacation of discharge in this case. Rule 60(b)(1) provides four disjunctive grounds for relief: (1) mistake; (2) inadvertence; (3) surprise; and (4) excusable neglect. In referring to the Rule, Debtor mentions excusable neglect and surprise, although Debtor does not provide legal standards for either. In discussing Rule 60(b)(5), Debtor has identified the final provision, "or applying it [the judgment] prospectively is no longer equitable," but, again, there is no legal analysis. Factually, Debtor makes two arguments that he believes could support granting the motion in accordance with at least one of the legal provisions: (1) ineffective assistance of counsel; and (2) a belief that the post- discharge conversion was allowed. Ultimately, both Debtor and Trustee have primarily focused on briefing the issues presented in section I, supra, and the discussion of the application of Fed. R. Civ. P. Rule 60(b) to the facts of this case is somewhat lacking.
Ineffective Assistance of Counsel
Courts disagree about whether, and in what circumstances, attorney error justifies relief under Fed. R. Civ. P. 60(b). Judge Easterbrook has held that attorney negligence is never an acceptable basis for relief under the rule. See U.S. v. 7108 West Grand Ave., Chicago, Ill., 15 F.3d 632, 633-35 (7th Cir. 1994) ("Yet why should the label ‘gross’ make a difference to the underlying principle: that the errors and misconduct of an agent redound to the detriment of the principal rather than of the adversary in litigation?"). The Ninth Circuit has disagreed, holding that in cases of "gross
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negligence" relief is warranted under Fed. R. Civ. P. 60(b)(6). Cmty Dental Servs. V. Tani, 282 F.3d 1164 (9th Cir. 2002) ("While the above principles provide the general rule regarding the client-attorney relationship, several circuits have distinguished a client’s accountability for his counsel’s neglectful or negligent acts – too often a normal part of representation – and his responsibility for the more unusual circumstance of his attorney’s extreme negligence or egregious conduct."). And, on the other hand, the Ninth Circuit has found ordinary carelessness to be grounds for relief when there exists an extraordinary or unusual extrinsic cause.3 See, e.g., Medina
v. Wells Fargo Bank, N.A., 2016 WL 2944295 at *2 (C.D. Cal. 2016) (collecting cases). There is, however, much space on the spectrum between gross negligence (when an attorney is no longer acting on behalf of a client) and ordinary "carelessness" in which relief under 60(b) will be granted.
Furthermore, there is a tendency to distinguish between a deliberative mistake with unintended consequences and an inadvertent attorney error. Parks v. Armour Pharms., 1995 WL 13232 at *1 (N.D. Cal. 1995) ("This case is distinguishable from that in Nemaizer v. Baker, 793 F.2d 58 (2nd Cir. 1986), wherein the dismissal with prejudice was based upon a stipulation with defense counsel and an apparent misunderstanding by plaintiff of the effect of the stipulation. Here, plaintiffs’ counsel and his secretary unilaterally and inadvertently filed a dismissal containing unintended ‘with prejudice’ language. They did not fail to appreciate the effect of the dismissal with prejudice; they failed to realize what they inadvertently filed.").
The distinction noted in Parks is illustrative of the problem here. As Parks notes, a party should not be allowed to modify past decisions that were deliberatively chosen solely because the party did not comprehend the consequences of the decision.
Alternatively, a party should not be forced to maintain a position it inadvertently adopted if there is little risk of significant prejudice to the other party. Here, it cannot be seriously contended that the filing of a Chapter 7 petition was an inadvertent action, as contrasted with an intentional act, the consequences of which Debtor did not entirely comprehend. Additionally, there is no indication that the alleged attorney negligence reached the level of gross negligence which would sever the agent- principal relationship. Finally, there is no indication that there were any acts that resemble the type of ordinary "carelessness" that courts have determined can be the basis for relief under Rule 60(b).
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Change in Law
While not adequately briefed, Debtor also seems to suggest that the Court’s Santos decision constitutes an intervening change in law. [Dkt. 39, p. 6: "The intervening case of In re Santos, which expressly limited if not eliminated the Debtor’s right to convert after discharge, is a further basis to rule that it is no longer equitable that the discharge order should have prospective effect, because it extremely limited the Debtor’s ability to convert to Chapter 13 after receipt of a Chapter 7 discharge."].
Santos did not constitute a change in law, but, rather, the case applied the Supreme Court’s Marrama decision to a motion to convert post-discharge. A trial court simply does not change law.
Miscellaneous: 60(b)(5) & 60(b)(6)
The Court interprets Debtor’s invocation of Rule 60(b)(5) and (6) as not being solely constrained to the factual arguments made above.
The final prong of Rule 60(b)(5), a general equitable prong, is not applicable in the present situation because the rule applies to judgments that have prospective application, typically indicated by the potential for continuing supervision. See, e.g., Sys. Fed’n No. 91 v. Wright, 364 U.S. 642, 647-48 (1961) ("A balance must thus be struck between the policies of res judicata and the right of the court to apply modified measures to changed circumstances."); Normva v. Elkin, 849 F.Supp.2d 418, 423-24 (D. Del. 2012( collecting cases on prospective application). "The standard used in determining whether a judgment has prospective application is whether it is "executory" or involves the supervision of changing conduct or conditions." Maraziti
v. Thorpe, 52 F.3d 252, 254 (9th Cir. 1995) (quotation omitted). A discharge is not a prospective judgment.
Finally, Debtor cites Fed. R. Civ. P. Rule 60(b)(6), the equitable, catchall provision. "That clause gives the [ ] court power to vacate judgments ‘whenever such action is
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appropriate to accomplish justice." U.S. v. Sparks, 685 F.2d 1128, 1130 (9th Cir. 1982) (quoting Klapprott v. U.S., 335 U.S. 601, 615 (1949)). "In order to obtain such relief from a judgment, however, ‘extraordinary circumstances’ must exist." Id. (quoting Ackerman v. U.S., 340 U.S. 193, 199 (1950)). Rule 60(b)(6) is, however, potentially applicable to the case here. See, e.g., Espinosa v. United Student Aid Fund, Inc., 553 F.3d 1193, 1199 (9th Cir. 2008) ("After a judgment (including a discharge) is finalized, and the time for appeal has run, the judgment can only be reconsidered in the limited circumstances provided by Rule 60(b).") (emphasis added).
As a preliminary matter, as to the Rule 60(b)(6) "exceptional" or "extraordinary circumstance" standard, Rule 60(b)(6) must be interpreted in its applicable context. The court in Santos stated that: "[T]here is no absolute prohibition on converting a case from Chapter 7 to Chapter 13 post-discharge, but pre-closing; rather there is a § 1307(c) ‘for cause’ review." 561 B.R. 825, 830 (Bankr. C.D. Cal. 2017). The court noted its belief that a post-discharge conversion appeared to be presumptively an abuse of process. See generally id. at 830-31. Nevertheless, as discussed in Santos, certain factual situations could be considered sufficient to rebut the presumption that conversion is an abuse of process. Vacating the discharge, a procedure the debtors did not attempt in Santos, along with agreeing to procedures that eliminate or substantially reduce the potential prejudice to any other parties, indicate the absence of abuse of process.
In order to secure conversion in this case, however, Debtor must meet two standards. First, Debtors must satisfy the standard of Rule 60(b)(6) to vacate the discharge, then Debtors must overcome the presumption that conversion is an abuse of process. If the former standard is higher than the latter, the result is illogical: there would be a certain subset of cases in which the latter standard would be satisfied, but the Rule 60(b)(6) standard would not be satisfied. For instance, in this situation, assuming, arguendo, that Debtor failed to show the necessary extraordinary circumstances, it may be reasonable to conclude that the facts of the case and the conduct of Debtor overcome the presumption that post-discharge conversion would be an abuse of process, and the result would be that Debtor would be allowed to convert, and retain his discharge.
That result is illogical and untenable.
Therefore, utilizing an interpretation of Rule 60(b)(6)’s "any other reason that justifies relief" that imposes a standard higher than that required to rebut the presumption that
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conversion is an abuse of process would frustrate the reasoning of Marrama as applied to these circumstances, and as thoroughly discussed in Santos. See generally id. at 829-31. Cognizant of that fact, the Court concludes that the Supreme Court’s Marrama decision requires the Court to consider the interests of justice when considering a Rule 60(b)(6) motion to revoke a discharge, and that the "extraordinary circumstance" test must be interpreted in light of the reasoning in Marrama.
In the case at hand, there are three primary sets of facts that, in combination, the Court believes rise to the level of "extraordinary circumstances" and contribute to finding that vacating the discharge is necessary to further justice: (1) evidence that Debtor’s alleges that his original counsel gave him inaccurate and incomplete legal advice regarding his choices in bankruptcy and the effect bankruptcy may have on his home;
no creditors have participated in this case, and the only claims filed were filed by the Trustee (the claims were also filed after the entry of discharge); and (3) Debtor has proposed a Chapter 13 plan which will pay creditors 100%.
This represents the rare situation in which the debtor is the party that seeks to revoke the discharge and thereafter pay all creditors in full, including Trustee for his professional fees. Thus, the revocation of the discharge will not meaningfully impair the rights of any other parties, but, instead would simply fulfill a prerequisite to Debtor’s conversion to Chapter 13, thereby facilitating payment in full to creditors. Only the conversion of the case, not the vacation of discharge, may be said to modify the rights of any party in interest. And even then, any impairment would merely be that the creditors for whom Trustee filed a proof of claim will be paid over a longer period of time.
Based on the foregoing, the Court is left with the clear impression that revocation of the discharge is required to prevent manifest injustice pursuant to Rule 60(b)(6).
Furthermore, the efforts undertaken by Debtor to remedy a situation apparently produced by ineffective legal counsel, namely Debtor’s efforts to vacate his Chapter 7 discharge and propose a plan that pays 100 percent to creditors and minimizes, to the extent possible, any prejudice to other parties, establishes that conversion, after the discharge is vacated, would not be an abuse of process in this situation.
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TENTATIVE RULING
The Court is inclined to GRANT the motion and VACATE the discharge.
APPEARANCES REQUIRED.
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Movant(s):
Efren Diaz Estrada Represented By
W. Derek May
W. Derek May
W. Derek May
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brianna L Frazier Rika Kido
Ryan D ODea
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Docket 34
6/7/17
Background:
On September 16, 2016, YBF Tax, Inc. filed a Chapter 7 voluntary petition. On January 24, 2017, Rosa Bryant ("Creditor") filed an unsecured claim in the amount of
$2,500,000 on the basis of the pending lawsuit. On May 12, 2017, Debtor filed a claim objection.
The Court notes that Debtor did not use the mandatory claim objection form or the mandatory proof of service form. Additionally, Debtor’s claim objection is not supported by any admissible evidence.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim,
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that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Debtor objects to Creditor’s claim on the basis that it "has not been litigated to a decision." That is not a valid basis to file a claim objection. 11 U.S.C. § 101(5)(A) states:
The term "claim" means –
right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
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disputed, undisputed, legal, equitable, secured, or unsecured
Debtor’s claim, therefore, fits within the statutory definition of claim. Moreover,
§ 502(c) expressly allows the Court to estimate an unliquidated claim.
Tentative Ruling
The Court is inclined to OVERRULE the objection.
APPEARANCES REQUIRED.
Debtor(s):
YBF Tax, Inc. Represented By Ronald W Ask
Movant(s):
YBF Tax, Inc. Represented By Ronald W Ask Ronald W Ask
Trustee(s):
Karl T Anderson (TR) Represented By Lovee D Sarenas
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Docket 21
BACKGROUND
On November 11, 2016, Kellie Malveaux ("Debtor") filed a Chapter 7 voluntary petition. On February 21, 2017, Debtor received a discharge. The meeting of creditors has been repeatedly continued.
On May 8, 2017, Mona Patel ("Counsel") filed a motion to withdraw.
DISCUSSION
Local Rule 2091 provides the procedure for an attorney to withdraw as counsel of record.
Movant has not presented any evidence, however, in support of the motion.
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TENTATIVE RULING
The Court is inclined to CONTINUE the hearing for Movant to present evidence in support.
APPEARANCES REQUIRED.
Debtor(s):
Kellie Eugena Malveaux Represented By Mona V Patel
Movant(s):
Kellie Eugena Malveaux Represented By Mona V Patel Mona V Patel
Trustee(s):
Arturo Cisneros (TR) Pro Se
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Docket 22
BACKGROUND
On January 23, 2017, Robert & Brasenia Rubalcaba filed a Chapter 7 voluntary petition. The meeting of creditors was originally scheduled for March 2, 2017, and has been continued at least three times.
On May 1, 2017, Trustee filed a motion for an extension of time to file a complaint objecting to discharge.
DISCUSSION
Fed. R. Bankr. P. Rule 4004(a) states:
(1) In a chapter 7 case, a complaint, or a motion under § 727(a)(8) or (9) of the Code, objecting to the debtor’s discharge shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). In a chapter 11 case, the complaint shall be filed no later than the first date set for the hearing on confirmation. In a chapter 13 case, a motion objecting to the debtor’s discharge under § 1328(f) shall be filed no later than 60 days
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after the first date set for the meeting of creditors under § 341(a). At least 28 days’ notice of the time so fixed shall be given to the United States trustee and all creditors as provided in Rule 2002(f) and (k) and to the trustee and the trustee’s attorney.
And Fed. R. Bankr. P. Rule 4004(b) states:
On motion of any party in interest, after notice and hearing, the court may for cause extend the time to object to discharge. Except as provided in subdivision (b)(2), the motion shall be filed before the time has expired.
A motion to extent the time to object to discharge may be filed after the time for objection has expired and before discharge is granted if (A) the objection is based on facts that, if learned after the discharge, would provide a basis for revocation under § 727(d) of the Code, and (B) the movant did not have knowledge of those facts in time to permit an objection. The motion shall be filed promptly after the movant discovers the facts on which the objection is based.
Here, Debtor’s delay in providing the requested information constitutes sufficient cause to extend the deadline. See Collier on Bankruptcy ¶ 4004.03[2] (16th ed. 2013) ("A debtor’s delays in responding to discovery may be sufficient cause. Obviously, a delay in the meeting of creditors to a date close to or after the deadline may constitute such cause.") (citing In re McCormack, 244 B.R. 203 (Bankr. D. Conn. 2000)).
Moreover, Debtor’s failure to oppose may be deemed consent to the relief requested pursuant to Local Rule 9013-1(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
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Debtor(s):
Robert M. Rubalcaba Represented By David L Nelson
Joint Debtor(s):
Brasenia Rubalcaba Represented By David L Nelson
Movant(s):
Steven M Speier (TR) Pro Se
Trustee(s):
Steven M Speier (TR) Pro Se
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Docket 12
- NONE LISTED -
Debtor(s):
Modern Properties, LLC Represented By Robert L Firth
Movant(s):
Larry D Simons (TR) Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:12-01498 Morschauser v. Continental Capital LLC et al
HOLDING DATE
From: 3/11/15, 5/20/15, 7/29/15, 12/16/15, 2/3/16, 3/16/16, 5/11/16, 8/31/16, 11/2/16, 11/16/16, 3/8/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Devore Stop Represented By
Hutchison B Meltzer
Devore Stop A General Partners Represented By
Arshak Bartoumian - DISBARRED - Newton W Kellam
Defendant(s):
American Business Investments Represented By Lawrence J Kuhlman
Autumn D Spaeth ESQ
Mohammed Abdizadeh Pro Se
Jesse Bojorquez Represented By Lawrence J Kuhlman
Autumn D Spaeth ESQ
2:00 PM
Continental Capital LLC Represented By Cara J Hagan
Stephen Collias Represented By Cara J Hagan
Plaintiff(s):
William G Morschauser Represented By Hutchison B Meltzer Reid A Winthrop
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
Adv#: 6:16-01086 Eley v. National Collegate Student Loan
From: 2/8/17, 4/26/17 EH
Docket 15
02/08/2017
Given the Court's intention to GRANT defendant's Motion for Summary Judgment and dismiss the adversary proceeding, this Motion shall go off calendar as moot.
Debtor(s):
Allen Brandon Eley Pro Se
Defendant(s):
National Collegate Student Loan Represented By
Damian P Richard Debbie P Kirkpatrick
Movant(s):
Allen Brandon Eley Represented By David Brian Lally
Plaintiff(s):
Allen Brandon Eley Represented By
2:00 PM
Trustee(s):
David Brian Lally
Steven M Speier (TR) Pro Se
2:00 PM
Adv#: 6:13-01233 Continental East Fund IV, LLC v. Wakefield et al
From: 9/18/13. 2/12/14, 4/23/14, 8/20/14, 10/1/14, 10/22/14, 1/14/15, 2/18/15, 6/17/15, 8/26/15, 9/2/15, 11/18/15, 5/18/16, 5/25/16, 7/27/16, 1/11/17, 4/12/17,
5/17/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
David Wayne Wakefield Represented By Jordan Nils Bursch
Robert E Huttenhoff
Defendant(s):
Elise Wakefield Represented By
Robert E Huttenhoff
David Wakefield Represented By
Robert E Huttenhoff
Joint Debtor(s):
Elise Wakefield Represented By Jordan Nils Bursch
Robert E Huttenhoff
2:00 PM
Plaintiff(s):
Continental East Fund IV, LLC Represented By Kyra E Andrassy
William A Floratos
Trustee(s):
Howard B Grobstein (TR) Represented By Alan W Forsley
2:00 PM
Adv#: 6:17-01004 Qiu v. Li
Also #22 EH
Docket 7
BACKGROUND
On October 5, 2016, Jiangmin Li ("Defendant") filed a Chapter 7 voluntary petition.
On January 9, 2017, Dongxia Qiu ("Plaintiff") filed an adversary complaint against Defendant, seeking a non-dischargeability finding. On February 8, 2017, Defendant filed a motion to dismiss for failure to state a claim. On February 22, 2017, Plaintiff filed her opposition. On March 3, 2017, Defendant filed a late reply.
The adversary complaint arises from state court litigation between the two parties. Plaintiff’s state court complaint included ten causes of action: (1) intentional misrepresentation; (2) negligent misrepresentation; (3) rescission – fraud; (4) rescission – mistake; (5) conversion; (6) breach of fiduciary duty; (7) imposition of constructive trust; (8) accounting; (9) unjust enrichment; and (10) breach of written contract. The Court ruled in favor of Plaintiff on her fourth (rescission – mistake) and
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sixth (breach of fiduciary duty) causes of action. The Court ruled against Plaintiff on the first (intentional misrepresentation) and third (rescission – fraud) causes of action. The Court deemed the second, fifth, seventh, eighth, ninth, and ten causes of action to have been forfeited due to Plaintiff’s failure to adequately brief the issues.
DISCUSSION
Fed. R. Civ. P. Rule 12(b)(6) states:
(b) Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:
(6) failure to state a claim upon which relief can be granted
Fed. R. Civ. P. Rule 12(d) states:
If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.
Here, Defendant has a submitted a request for judicial notice, so the Court must initially determine whether to grant or deny the request. Pursuant to Fed. R. Civ. P. Rule 12(b)(6), granting a request for judicial may cause the Court to convert the motion to a motion for summary judgment. See, e.g., Jacobson v. AEG Capital Corp., 50 F.3d 1493, 1496 (9th Cir. 1995) ("In considering AEG’s motion to dismiss, the district court took judicial notice of the extensive records and transcripts from the prior bankruptcy proceedings. We therefore review the district court’s dismissal as an order granting summary judgment."). The Court may "consider unattached evidence
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on which the complaint ‘necessarily relies’ if: (1) the complaint refers to the document; (2) the document is central to the plaintiff’s claim; and (3) no party questions the authenticity of the document," without converting the motion to a motion for summary judgment. See U.S. v. Corinthian Colls., 655 F.3d 984, 999 (9th Cir. 2011).
Here, the unattached evidence contained in Defendant’s request for judicial notice satisfies the above test. Plaintiff necessarily relied on the documents. In fact, the Plaintiff appears to have erroneously omitted the documents when filing the complaint, since the complaint purports to attach the three documents and references the documents throughout. Therefore, the Court will grant the request for judicial notice, and evaluate the motion as a motion to dismiss for failure to state a claim.
The standard for a Rule 12(b)(6) motion to dismiss is the following:
While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true. The need at the pleading stage for allegations plausibly
suggesting agreement reflects the threshold requirement of Rule 8(a)(2) that the "plain statement" possesses enough heft to "show that the pleader is entitled to relief.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-57 (2007) (quotations and parentheses omitted).
Here, Plaintiff states two causes of action, both relating to non-dischageability, under 11 U.S.C. § 523(a)(4) and (6). Defendant alleges that both causes of action are barred by collateral estoppel.1 The state court statement of decision found denied Plaintiff’s
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claims for intentional fraud and for rescission based on fraud. That decision granted Plaintiff’s claims for unilateral mistake of fact and breach of fiduciary duty. While Plaintiff’s complaint contained other causes of action, the state court deemed those causes of action to be forfeited by Plaintiff’s failure to brief the issues.
"Under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case." Allen v. McCurry, 449
U.S. 90, 94 (1980). Collateral estoppel applies in dischargeability proceedings. See Grogan v. Garner, 498 U.S. 279, 284 n.11 (1991). And it is appropriate to consider a collateral estoppel argument at the motion to dismiss stage. See, e.g., Conopco, Inc. v. Roll Int’t, 231 F.3d 82, 86 (2nd Cir. 2000).
In California, "collateral estoppel bars relitigation when (1) the issue decided in the prior action is identical to the issue presented in the second action; (2) there was a final judgment on the merits; and (3) the party against whom estoppel is asserted was a party . . . to the prior adjudication." Garrett v. City & Cnty. of San Francisco, 818 F.2d 1515, 1520 (9th Cir. 1987).
11 U.S.C. § 523(a)(4) states:
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt –
(4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny
Plaintiff’s complaint raises three disjunctive claims: (1) defalcation in a fiduciary capacity, (2) embezzlement, and (3) larceny. "To prevail in a § 523(a)(4) action, the creditor must establish that (1) a fiduciary relationship existed and (2) a defalcation occurred." Erde v. Moriarty, 2013 WL 12132069 at *6 (C.D. Cal. 2013). Defalcation under § 523(a)(4) was recently defined broadly and, somewhat vaguely, by the
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Supreme Court:
Thus, where the conduct at issue does not involve bad faith, moral turpitude, or other immoral conduct, the term requires an intentional wrong. We include as intentional not only conduct that the fiduciary knows is improper but also reckless conduct of the kind set forth in the Model Penal Code. Where actual knowledge of wrongdoing is lacking, we consider conduct as equivalent if the fiduciary "consciously disregards" "a substantial and unjustifiable risk" that his conduct will turn out to violate a fiduciary duty. That risk "must be of such a nature and degree that, considering the nature and purpose of the actor’s conduct and the circumstances known to him, its disregard involves a gross deviation from the standard of conduct that a law-abiding person would observe in the actor’s situation.
Bullock v. BankChampaign, N.A., 133 S. Ct. 1754, 1759-1760 (2013).
Embezzlement is the use of funds lawfully entrusted for an unauthorized purpose. In re Littleton, 942 F.2d 551, 555 (9th Cir. 1991). Larceny is the "felonious taking of another’s personal property with intent to convert it or deprive the owner of the same." In re Ormsby, 591 F.3d 1199, 1205 (9th Cir. 2010). "Larceny is distinguished from embezzlement in that the original taking of the property was unlawful." In re Montes, 177 B.R. 325, 331 (Bankr C.D. Cal. 1994).
In ruling against Plaintiff’s causes of action for fraud and rescission based on fraud, the state court found that, regarding the certain misrepresentations that were the basis of Plaintiff’s claim, "Plaintiff did not rely on those misrepresentations in entering into the April agreement." In both cases, the state court found that Plaintiff failed to demonstrate that it relied on the alleged misrepresentations of Defendant in entering into the contract. This finding of the state court does not constitute a finding that Defendant did not commit defalcation. As the Supreme Court quotation above highlights, the issues are substantially different.
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The issues are also substantially different with regard to Plaintiff’s § 523(a)(6) claim. 11 U.S.C. § 523(a)(6) states:
A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt –
(6) for willful and malicious injury by the debtor to another entity or to the property of another entity
Again, the state court’s finding that Plaintiff failed to demonstrate reliance on alleged misrepresentations of Defendant when entering into the contract at issue does not constitute a finding that Defendant did not commit a willful and malicious injury. The state court’s findings underlining its ruling in Plaintiff’s favor for rescission based on unilateral mistake of fact and breach of fiduciary duty could plausibly be considered to state a claim pursuant to § 523(a)(4) and (6).
TENTATIVE RULING
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Jiangmin Li Represented By
Sam X J Wu
Defendant(s):
Jiangmin Li Represented By
Sam X J Wu
2:00 PM
Movant(s):
Jiangmin Li Represented By
Sam X J Wu
Plaintiff(s):
Dongxia Qiu Represented By
John Y Kim
Trustee(s):
Todd A. Frealy (TR) Pro Se
2:00 PM
Adv#: 6:17-01004 Qiu v. Li
From: 3/8/17, 4/26/17 Also #21
EH
Docket 1
- NONE LISTED -
Debtor(s):
Jiangmin Li Represented By
Sam X J Wu
Defendant(s):
Jiangmin Li Represented By
Sam X J Wu
Plaintiff(s):
Dongxia Qiu Represented By
John Y Kim
Trustee(s):
Todd A. Frealy (TR) Pro Se
2:00 PM
Adv#: 6:15-01265 Pringle v. Clements-Biehl
From: 2/1/17, 3/29/17, 5/31/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - INACTIVE - Steven L Bryson
Defendant(s):
Rene Clements-Biehl Represented By Allan D Sarver
Plaintiff(s):
John P. Pringle Represented By Elyza P Eshaghi
Brandon J Iskander
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi
2:00 PM
Brandon J Iskander
2:00 PM
Adv#: 6:15-01304 Cisneros v. Kajan Mather & Barish, a professional corporation
A. Cisneros against Kajan Mather & Barish, a professional corporation, MATHER KUWADA, a limited liability partnership, MATHER LAW CORPORATION, a California corporation, LAW OFFICE OF KENNETH M. BARISH, Steven R. Mather, Kenneth M. Barish. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 1/13/16, 3/30/16, 4/6/16, 5/4/16, 5/25/16, 9/28/16, 11/2/16, 11/9/16, 12/14/16, 1/11/17, 5/17/17
EH
Docket 1
12/14/2016
The instant Status Conference is CONTINUED to January 11, 2017, at 2:00 p.m., to be heard in conjunction with Defendants' Motion for Summary Judgment
APPEARANCES WAIVED.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
2:00 PM
Defendant(s):
Steven R. Mather Pro Se
Kenneth M. Barish Pro Se MATHER LAW CORPORATION, Represented By
Michael S Kogan
Kajan Mather & Barish, a Represented By Michael S Kogan
MATHER KUWADA, a limited Represented By
Michael S Kogan
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes Franklin R Fraley Jr Sue-Ann L Tran Jasmine W Wetherell
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
EH
Docket 21
- NONE LISTED -
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Pro Se
Movant(s):
Don Cameron Burns Pro Se
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
From: 8/31/16, 11/2/16, 1/11/17, 3/8/17 Also #25
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Pro Se
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
2:00 PM
Franklin R Fraley Jr
2:00 PM
Adv#: 6:17-01064 Jabro v. Kim et al
From: 5/17/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Mee Soon Kim Represented By Minh Duy Nguyen
Defendant(s):
Tae Young Kim Pro Se
Mee Soon Kim Pro Se
Plaintiff(s):
Hikmat Jabro Represented By
Michael H Jabro
Trustee(s):
Larry D Simons (TR) Represented By David Seror Michael W Davis
2:00 PM
Adv#: 6:17-01066 Gumbs et al v. Davis, Jr et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard Earl Davis Jr Represented By Todd L Turoci
Defendant(s):
Two6 Sports Management Pro Se
Richard Earl Davis Jr Pro Se
Plaintiff(s):
Kandis Gumbs Represented By Alexander B Boris
Angelo M Gumbs Represented By Alexander B Boris
Trustee(s):
Steven M Speier (TR) Pro Se
2:00 PM
Adv#: 6:17-01065 Valdez v. Ford Motor Credit Co LLC
EH
Docket 1
- NONE LISTED -
Debtor(s):
Joey James Valdez Pro Se
Defendant(s):
Ford Motor Credit Co LLC Represented By Harlan M. Reese
Plaintiff(s):
Joey James Valdez Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:17-01051 ALJINDI v. US DEPARTMENT OF EDUCATION ET AL
EH
Docket 5
- NONE LISTED -
Debtor(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Defendant(s):
US DEPARTMENT OF Represented By Elan S Levey
Plaintiff(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:16-01128 Frealy v. Trotochau et al
From: 7/20/16, 9/28/16, 1/11/17, 3/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
M. A. Tabor Represented By
Judith Runyon
Defendant(s):
Pacific Mortgage Exchange, Inc. Represented By
Salvatore Bommarito
Robin Sherrie Trotochau Pro Se
Plaintiff(s):
Todd A. Frealy Represented By Anthony A Friedman
2:00 PM
Trustee(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman Lindsey L Smith
2:00 PM
Adv#: 6:17-01021 Whitmore v. E*Trade Securities, LLC et al
From: 4/5/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
William Redfield Barlow III Represented By Michael E Clark Heather J Canning
Defendant(s):
E*Trade Financial Corporation Pro Se
E*Trade Securities, LLC Pro Se
Joint Debtor(s):
Lindsay Marie Barlow Represented By Michael E Clark Heather J Canning
Plaintiff(s):
Robert Whitmore Represented By Julie Philippi
2:00 PM
Trustee(s):
Robert Whitmore (TR) Represented By Julie Philippi Todd L Turoci
2:00 PM
Adv#: 6:17-01053 Cisneros v. Simpson
From: 5/3/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Armon Randolph Sharp Represented By Daniel King
Raymond W Stockstill
Defendant(s):
William J. Simpson Pro Se
Plaintiff(s):
Arturo Cisneros Represented By Toan B Chung
Trustee(s):
Arturo Cisneros (TR) Represented By Toan B Chung
2:00 PM
Adv#: 6:16-01252 Trimble v. UNITED STATES OF AMERICA, IRS
From: 12/14/16, 2/15/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Kristi Lea Trimble Represented By Bruce A Boice
Defendant(s):
UNITED STATES OF AMERICA, Pro Se
Plaintiff(s):
Kristi Lea Trimble Represented By Bruce A Boice
Trustee(s):
Steven M Speier (TR) Pro Se
2:00 PM
Adv#: 6:17-01028 Frealy, Chapter 7 Trustee v. Tanaka et al
From: 4/5/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Sheri Tanaka Christopher Represented By Brian J Soo-Hoo
Defendant(s):
Leora Linda Tanaka Represented By David L Prince
Estate of Yaeko Sato, a California Represented By
David L Prince
Ryan Satoshi Tanaka Represented By David L Prince
Ronald Howard Tanaka Represented By David L Prince
2:00 PM
Carolyn Naomi Tanaka Represented By David L Prince
Plaintiff(s):
Todd A Frealy, Chapter 7 Trustee Represented By
Monserrat Morales
Trustee(s):
Todd A. Frealy (TR) Represented By Monserrat Morales
2:00 PM
Adv#: 6:16-01211 Olivares v. Dason
From: 11/2/16, 1/4/17, 3/1/17, 3/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Sam Daniel Dason Represented By Robert G Uriarte
Defendant(s):
Sam Daniel Dason Represented By Robert G Uriarte
Joint Debtor(s):
Greeta Sam Dason Represented By Robert G Uriarte
Plaintiff(s):
Juddy Olivares Represented By Lazaro E Fernandez
Trustee(s):
Lynda T. Bui (TR) Represented By Brett Ramsaur
2:00 PM
Adv#: 6:16-01170 California Solar Thermal, Inc. v. Rothman
From: 9/7/16, 1/11/17, 5/17/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard G Rothman Represented By Daniel J Winfree
Defendant(s):
Richard G Rothman Represented By Daniel J Winfree
Joint Debtor(s):
Shari A Randall Represented By Daniel J Winfree
Plaintiff(s):
California Solar Thermal, Inc. Represented By Douglas A Plazak
2:00 PM
Trustee(s):
Howard B Grobstein (TR) Pro Se
2:00 PM
Adv#: 6:16-01219 Candee et al v. Ayoub et al
From: 11/1/16 EH
Docket 1
- NONE LISTED -
Debtor(s):
Tarek El Sayed Ayoub Represented By Sherif Fathy
Defendant(s):
Gabriela VIlleda Ayoub Represented By Sherif Fathy
Tarek El Sayed Ayoub Represented By Sherif Fathy
Joint Debtor(s):
Gabriela Villeda Ayoub Represented By Sherif Fathy
Plaintiff(s):
Original Thurber Ranch LLC Represented By Jon H Lieberg
Keith H Candee Represented By Jon H Lieberg
2:00 PM
Trustee(s):
Wesley H Avery (TR) Represented By Larry D Simons
2:00 PM
Adv#: 6:16-01176 Simons v. Navarro
From: 9/7/16, 11/9/16, 1/11/17, 3/8/17, 4/12/17, 5/17/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jose Antonio Hernandez Represented By
Jessica De Anda Leon
Defendant(s):
Carolina Villalobos Navarro Represented By Christopher J Langley
Plaintiff(s):
Larry D Simons Represented By Frank X Ruggier
Trustee(s):
Larry D Simons (TR) Represented By Frank X Ruggier
2:00 PM
Adv#: 6:16-01295 Abbasi v. Surace et al
From: 2/15/17, 5/17/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Marym Qadir Represented By
Batkhand Zoljargal
Walie Qadir Represented By
Batkhand Zoljargal
Jaison Vally Surace Represented By Batkhand Zoljargal
Plaintiff(s):
Setareh Abbasi Represented By
Bruce Dannemeyer
2:00 PM
Trustee(s):
Bruce Dannemeyer
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:16-01143 Simons v. Caffery Financial, inc. et al
From: 9/7/16, 12/7/16, 1/11/17, 2/15/17, 4/26/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Caffery Family Trust Pro Se
Caffery Financial, inc. Pro Se
Joe G. Caffery Pro Se
Kim Caffery Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
2:00 PM
Adv#: 6:16-01140 Simons v. Lindgren
Also #43 EH
Docket 14
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Charles Lindgren Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Movant(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
2:00 PM
Adv#: 6:16-01140 Simons v. Lindgren
From: 9/7/16, 12/7/16, 3/1/17, 4/12/17, 5/17/17 Also #42
EH
Docket 1
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Charles Lindgren Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By Sarah Cate Hays D Edward Hays
Trustee(s):
Larry D Simons (TR) Represented By
2:00 PM
Richard A Marshack Sarah Cate Hays
D Edward Hays
2:00 PM
Adv#: 6:16-01309 Kercado v. Garrido
EH
Docket 7
On September 26, 2016, Carlos & Maribelle Garrido ("Debtors") filed a Chapter 7 voluntary petition. On December 30, 2016, Maria Kercado ("Plaintiff") filed a non- dischargeability complaint against Carlos Garrido ("Defendant").
The clerk entered default against Defendant on February 10, 2017. Plaintiff filed a motion for default judgment on April 15, 2017.
FACTUAL BACKGROUND
On May 13, 2013, Plaintiff and Defendant entered into a contract for a $50,000 loan. Defendant was to make $1,000 monthly payments to Plaintiff and Plaintiff was to take a security interest in a 1990 Arriva Boat. Defendant overestimated the value of the boat to Plaintiff, and Plaintiff states that the boat was in complete disrepair. In December 2013, Defendant stated that, every fourth month he would make a payment of $2,000 instead of the contractual $1,000. On February 2014, Defendant ceased
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making payments.
On April 9, 2014, Plaintiff filed a state court lawsuit against Defendant for breach of contract, negligent misrepresentation, and conversion. On October 27, 2015, Plaintiff obtained a judgment against Defendant in the amount of $37,000.
Fed. R. Civ. P. Rule 55 states that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party’s default." Fed. R. Civ. P. 55(a). Local Rule 7055-1 provides further requirements regarding a motion for entry of default judgment, and those requirements have been substantially satisfied here.
Default Judgment
Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute considering material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the FRCP favoring decision on the merits. See NewGen, LLC v.
Safe Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016) (quoting Eitel v. McCool, 782 F.2d
1470, 1471-72 (9th Cir. 1986)).
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Proper Service of Summons and Complaint
Fed. R. Bankr. P. Rule 7004(b)(1) states, in part:
ervice may be made within the United States by first class mail postage prepaid as follows:
Upon an individual other than an infant or incompetent, by mailing a copy of the summons and complaint to the individual’s dwelling house or usual place of abode or to the place where the individual regularly conducts a business or profession.
Here, Plaintiff served Debtors and their counsel at the addresses of record.
Merits of Plaintiff’s claim
Upon default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); see also Almog v. Golden Summit Investors Group, Ltd., 2012 WL 12867972 at *4 (C.D. Cal. 2012) ("When reviewing a motion for default judgment, the Court must accept the well-pleaded allegations of the complaint relating to liability as true.").
Here, the complaint includes three causes of action: § 523(a)(6) and § 523(a)(2)(A) twice.
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Regarding § 523(a)(2)(A), the elements are: (1) the debtor made the representations;
that at the time he knew they were false; (3) that he made them with the intention and purpose of deceiving the creditor; (4) that the creditor relied on such representation; and (5) that the creditor sustained the alleged loss and damage as the proximate result of the representations having been made. See, e.g., In re Britton, 950 F.2d 602, 604 (9th Cir. 1991). Plaintiff has adequately plead facts to satisfy the elements of § 523(a)(2)(A).
Regarding § 523(a)(6) the elements are: "(1) willful conduct, (2) malice, and (3) causation." See, e.g., In re Apte, 180 B.R. 223, 230 (B.A.P. 9th Cir. 1995). Plaintiff has adequately plead facts to satisfy the elements of § 523(a)(6)
Amount of Damages
Local Rule 7055-1(b)(1)(2) requires a declaration establishing the amount of damages when the amount claimed is unliquidated. Here, the amount claimed is liquidated.
Therefore, the amount of damages has been adequately established.
TENTATIVE RULING
Based on the foregoing, the Court will GRANT the motion, and adjudicate that the debt represented by the state court judgment is nondischargeable pursuant to 11
U.S.C. § 523(a)(2)(A) and (a)(6).
APPEARANCES WAIVED. Movant to lodge an order and proposed judgment within
2:00 PM
seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Carlos Garrido Represented By
Inez Tinoco-Vaca
Defendant(s):
Carlos Garrido Pro Se
Joint Debtor(s):
Maribelle Garrido Represented By
Inez Tinoco-Vaca
Movant(s):
Maria Kercado Represented By Sergio A Rodriguez
Plaintiff(s):
Maria Kercado Represented By Sergio A Rodriguez
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:16-01309 Kercado v. Garrido
From: 3/1/17, 5/3/17 Also #44
EH
Docket 1
- NONE LISTED -
Debtor(s):
Carlos Garrido Represented By
Inez Tinoco-Vaca
Defendant(s):
Carlos Garrido Pro Se
Joint Debtor(s):
Maribelle Garrido Represented By
Inez Tinoco-Vaca
Plaintiff(s):
Maria Kercado Represented By Sergio A Rodriguez
2:00 PM
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
Also #47 EH
Docket 208
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Denise M Tessier Deepalie M Joshi
Movant(s):
Charles Edward Schrader Pro Se
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17, 4/5/17
Also #46 EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Denise M Tessier Deepalie M Joshi
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:16-01310 Swift Financial Corporation d.b.a. Swift Capital v. Castillo
From: 5/31/17 EH
Docket 9
- NONE LISTED -
Debtor(s):
Francisco Javier Castillo Represented By Joseph M Tosti
Defendant(s):
Francisco Javier Castillo Pro Se
Plaintiff(s):
Swift Financial Corporation d.b.a. Represented By
Lazaro E Fernandez
Trustee(s):
Robert Whitmore (TR) Pro Se
2:00 PM
Adv#: 6:14-01081 Albrecht v. Slaieh
W.E. Jon Albrecht against Nabeel Slaieh. willful and malicious injury))
HOLDING DATE
From: 10/19/16, 12/14/16, 2/15/17, 3/29/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
Nabeel Slaieh Represented By Stephen B Mashney Bruce A Boice George A Saba
Plaintiff(s):
W E Jon Albrecht Represented By William L Miltner Robert C Harvey
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood
2:00 PM
Matthew Grimshaw
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
(6) of the Federal Rules of Civil Procedure From: 4/26/17, 5/17/17
Also #51 & #52 EH
Docket 44
6/7/17
PROCEDURAL BACKGROUND
On April 31, 2016, Trustee filed a complaint against Nabeel Naiem Slaieh and Joanne Fraleigh (collectively, "Defendants") (individually, "Slaieh" and "Fraleigh") for avoidance and recovery of unauthorized post-petition transfer. After early disagreements regarding the sufficiency of service, the parties stipulated that Fraleigh was properly served and the Court ordered Defendants’ response due December 16, 2016.
On December 16, 2016, Defendants filed an answer and "cross-claims"1 (hereinafter,
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"counter-claims", and "counter-complaint") against Trustee and his professionals ("Counter-Defendants") for: (1) breach of contract; (2) fraud & deceit; (3) extortion;
conversion; (5) defamation and slander; (6) negligence; (7) breach of fiduciary duties; (8) violation of Cal. Bus. & Prof. Code § 17200; (9) intentional infliction of emotional distress; and (10) wrongful eviction. On January 17, 2017, Counter- Defendants filed a motion to dismiss the counter-claims pursuant to Fed. R. Civ. P. Rule 12(b)(6). On January 18, 2017, Fraleigh filed a voluntary dismissal of her counter-complaint. On January 29, 2017, Slaieh filed his opposition to Counter- Defendants’ motion to dismiss. On February 8, 2017, Counter-Defendants filed their reply and evidentiary objections. On March 6, 2017, the Court entered an order dismissing the counter-complaint with prejudice, with the exception of the fifth cause of action (defamation and slander).
On March 3, 2017, Slaieh filed a renewed counter claim ("Amended Counterclaim") against Trustee and his professionals for: (1) slander; (2) defamation; and (3) intentional infliction of emotion distress. On March 24, 2017, Trustee filed a motion to dismiss for failure to state a claim. On May 4, 2017, Slaieh filed his opposition to the motion, and on May 30, 2017, Trustee filed a reply.
FACTUAL BACKGROUND
The fact patter that forms the basis of Slaieh’s motion involves the enforcement of this Court’s sale order regarding certain real property located in Temecula (the "Real Property"). That order, entered May 26, 2016, stated, in part:
Pursuant to 11 U.S.C. §§ 542(a) and 704(a)(1), Debtor, his non-debtor spouse, and all occupants of the Property are ordered to vacate the Property no later than June 7, 2016, at 9:00 a.m., and they shall surrender possession of the Property to Trustee’s designated custodian at that time, and in turn, Trustee shall immediately deliver possession to Buyer;
If Debtor, his non-debtor spouse, or any other occupants of the Property fails to vacate the Property by 9:00 a.m. on June 7, 2016, then the Trustee may direct the United States Marshals Service to: (a) forcibly evict and lockout all
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occupants of the Property; and (b) surrender possession of the Property to the Trustee’s designated custodian;
The Attorneys for the Chapter 7 Trustee may prepare a Write of Assistance consistent with this Order for the Clerk of the Court to issue;
If Debtor, his non-debtor spouse, or any other occupant of the Property fail to vacate the Property by 9:00 a.m. on June 7, 2016, then the Trustee is authorized to expend $1,500.00 to (a) rent a U-Haul (or similar) moving truck ("Moving Vehicle") and (b) hire an agent (without the need of filing an employment or fee application) to facilitate the removal of any personal property items left at the Property ("Personal Items");
On the same day that the Personal Items are removed from the Property, the Trustee may arrange with Debtor’s counsel, for a three (3) hour time period whereby Debtor’s non-debtor spouse may meet the Trustee’s agent and remove whatever Personal Items they desire from the Moving Vehicle ("Removal Period");
Regardless of the reason as to why the Personal Items were not removed, at the end of the Removal Period, the Trustee may discard all Personal Items remaining in the Moving Vehicle at any time without further order of this Court;
When the procedure for removing Personal Items is completed, the Trustee, his agents, and Buyer will have been deemed to have satisfied any obligations they may have under California law (or other applicable law) relating to the removal and/or abandonment of Debtor’s personal items;
Slaieh unsuccessfully appealed the sale order to United States District Court, Central District of California. On July 13, 2016, the United States Marshal Service posted a notice to vacate the Real Property, instructing the occupants to vacate by July 20, 2016. The day before eviction was to occur, Fraliegh filed a quiet title complaint in state court. Fraleigh also filed an ex parte application for a temporary restraining order. The basis for Fraleigh’s complaint and application was that Slaiegh transferred the Real Property to Fraleigh on or around May 7, 2016. On July 20, 2016, the state court entered a stay of eviction until July 28, 2016. On July 21, 2016, Trustee filed an emergency motion with this Court, requesting that the state court stay be dissolved and that the Court find the state court was without jurisdiction to enter the stay. That
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motion was granted the same day.
Later in July 2016, the United States Marshal Service evicted Slaieh. At the time of the eviction certain windows and doors were missing from the Real Property. Slaieh’s Amended Counterclaim states that Trustee’s attorney accused Slaieh of stealing the windows and doors from the home, and that certain individuals, namely Fraleigh and some "employees," were there at the time the statement was made.
DISCUSSION
Fed. R. Civ. P. Rule 12(b)(6), incorporated by Fed. R. Bankr. P. Rule 7012(b), states:
Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:
(6) failure to state a claim upon which relief can be granted.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)), stated the following:
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility, that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant’s liability, it "stops short of the line
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between possibility and plausibility of "entitlement to relief."
Evidentiary Objections
Slaieh has raised numerous evidentiary objections that will be disposed of summarily by the Court. All of Slaieh’s "evidentiary objections" are overruled by the Court on the basis that they are vague. Specifically, the Court cannot ascertain what Slaieh is objecting to, since Slaieh appears to have invented an exhibit numbering system that does not resemble the actual numbering of the exhibits. Furthermore, all Slaieh’s evidentiary objections merely state that he objects on relevancy grounds without any discussion or description of why the matter is irrelevant.
Slaieh’s Causes of Actions
Counts 1 & 2: Slander & Defamation
Slaieh’s first cause of action is slander. Slander is defined in California as:
a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which:
Charges any person with crime, or with having been indicted, convicted, or punished for crime;
Imputes in him the present existence of an infectious, contagious, or loathsome disease;
Tends directly to injure him in respect to his office, profession, trade or
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business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing
something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits;
Imputes to him impotence or a want of chastity; or
Which, by natural consequence, causes actual damage.
Cal. Civ. Code § 46 (1945). "To prevail in a defamation claim under California law, a plaintiff must allege ‘(a) a publication that is (b) false, (c) defamatory, and (d) unprivileged, and that (e) has a natural tendency to injure or that causes special damage." Bowen v. M. Caratan, Inc., 142 F. Supp. 3d. 1007, 1033 (E.D. Cal. 2015) (quoting Taus v. Loftus, 40 Cal. 4th 683, 720 (Cal. 2007). "Publication means communication to a third person who understands the defamatory meaning of the statement and its application to the person to whom reference is made." Arikat v. JP Morgan Chase, 430 F. Supp. 2d 1013, 1020 (N.D. Cal. 2006).
Here, Slaieh’s first cause of action has sufficiently alleged the elements of slander/defamation to survive a motion to dismiss for failure to state a claim. Specifically, Slaieh has described the alleged publication (the statement alleging theft), has alleged that the statement was false, the statement is presumptively defamatory, the statement is not clearly privilege, and the statement described has a natural tendency to injury. Slaieh’s second cause of action appears to allege that Counter-Defendants have slandered Fraleigh. Fraliegh, however, is not a party to the Amended Counter-complaint and Slaieh cannot assert her rights in the counter- complaint. Therefore, Slaieh lacks standing to bring the second cause of action.
Counts 3: Intentional Infliction of Emotional Distress:
Slaieh’s third of action is intentional infliction of emotional distress. This cause of action was dismissed with prejudice on March 6, 2017. Slaieh states in his opposition that:
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In addition to amending the causes of action for defamation and slander per se causes of action, Debtor kept the Intentional Inflictions of Emotional Distress since there was a confusion as to whether this cause of action was dismissed when the court initially held to grant the motion to dismiss in its entirety or whether that cause of action was dismissed because some other causes of action, but not the defamation and slander per se causes of action were dismissed.
The intentional infliction of emotional distress cause of action was dismissed with prejudice, and the order entered on March 6, 2017, is unambiguous in that respect. Slaieh also states: "The court’s order as to the IIED claim is silent as to which claim that was sustained this IIED claim referred to, Debtor is entitled under California Law to seek IIED on each of the slander and defamation claims." This statement is confusing to the point of being incomprehensible, although it appears he may believe that intentional infliction of emotional distress is a component of damages, instead of a cause of action. Regardless, as noted above, Slaieh’s third cause of action was previously dismissed with prejudice.
Trustee’s Qualified Immunity
"Bankruptcy trustees are entitled to broad immunity from suit when acting within the scope of their authority and pursuant to court order." In re Harris, 590 F.3d 730, 742 (9th Cir. 2009) (quoting Bennett v. Williams, 892 F.2d 822, 823 (9th Cir. 1989)). "Additionally, ‘court appointed officers who represent the estate are the functional equivalent of a trustee.’" Id. (quoting In re Crown Vantage, Inc., 4 F.3d 963, 973 (9th Cir. 2005).
"For derived quasi-judicial immunity to apply, the defendants must satisfy the following four elements: (1) their acts were within the scope of their authority; (2) the debtor had notice of their proposed acts; (3) they candidly disclosed their proposed acts to the bankruptcy court; and (4) the bankruptcy court approved their acts." Id.
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Furthermore, to support a claim against the Trustee, the Trustee’s alleged actions must typically be willful and deliberate – negligence will not suffice. See, e.g., In re Hunter, 553 B.R. 866, 873 (Bankr. D.N.M. 2016) (quoting Sherr v. Winkler, 552 F.2d 1367,
1375 (10th Cir. 1977).
Regarding Counter-Defendants’ actions related to the sale of the Real Property, and the eviction of Slaieh, Trustee is entitled to quasi-immunity. The sale of the Real Property and the eviction are within the scope of a trustee’s duties, were disclosed to the Court, and were subsequently approved by the Court. And Slaieh clearly had notice of the proposed acts, given that he vigorously contested their execution.
Furthermore, a necessary component of Counter-Defendants’ duty in executing the eviction in preparation of the sale is to investigate the sudden disappearance of necessary fixtures from the Real Property. See, e.g., In re Cedar Funding, Inc., 419
B.R. 807, 822 (B.A.P. 9th Cir. 2009) (immunity for "trustee’s communications [that] occurred while he was performing his official statutory duties"). While, clearly, the specific alleged statements at issue here were not authorized by the Court, "quasi- judicial immunity attaches to [ ] those functions essential to the authoritative adjudication of private rights to the bankruptcy estate." In re Castillo, 297 F.3d 940, 951 (9th Cir. 2002). Here, the allegedly defamatory statements were made in direct response to the disappearance of estate property, the sale of which had been authorized pursuant to Court order, and the disappearance of which was the sole responsibility of the Trustee to investigate.
Policy also has a role in this analysis. Taking judicial notice of the record of this bankruptcy case, prior to the eviction there was, among other things, evidence of concern that Slaieh may destroy or damage the Real Property. [See, e.g., May 4th hearing transcript in case 13-bk-30133-MH and related declarations, including Dkt. 322, ex. 1]. The application of the doctrine of quasi-judicial immunity to bankruptcy trustees and their professionals is based on a policy of protecting the bankruptcy process. Given the circumstances evidenced by the record of this case, including the extensive lengths to which Slaieh went to prevent the Trustee from selling the Real Property and actions to frustrate the Trustee’s efforts, and the stated concern by Trustee’s broker of possible damage to the Real Property by Slaieh approximately two months prior to the eviction date, the Court concludes that the alleged defamatory statements are protected as within the reasonable exercise of Trustee’s efforts to investigate and recover missing estate property, and, therefore are covered by
Counter-Defendants’ quasi-judicial immunity.
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Therefore, the Court holds that Counter-Defendants are entitled to quasi-judicial immunity with regard to the alleged slanderous statements, and that, therefore, Counter-Defendants are entitled to have the Amended Counterclaim dismissed.
Failure to Name Parties
As asserted by Counter-Defendants, the Amended Counterclaim does not allege any action by Counter Defendants Larry D. Simons and David A. Wood, nor has Plaintiff alleged with any specificity how liability attaches to those Counter Defendants. On that basis, the Amended Counterclaim shall be dismissed as to those Counter Defendants.
Leave to Amend
Trustee has requested that the complaint be dismissed without leave to amend. Fed. R. Civ. P. Rule 15(a)(2), incorporated by Fed. R. Bankr. P. Rule 7015, provides that: "In all other cases, a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires." The Supreme Court has previously provided a non-exhaustive list of reasons why leave to amend should be denied. Forman v. Davis, 371 U.S. 178, 182 (1962) ("undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc."); see also United Union of Roofers, Waterproofers, & Allied Trades No. 40 v.
Ins. Corp. of Am., 919 F.2d 1398, 1402 (9th Cir. 1990) (denial when amendment would be "clearly frivolous, unduly prejudicial, cause undue delay or a finding of bad faith is made").
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The Court notes, however, that claims arising from the factual situation described by Slaieh are subject to quasi-judicial immunity, as noted in Section III.C, supra. See, e.g., In re Keenan, 339 Fed. Appx. 809, 810 (9th Cir. 2009) ("Dismissal with prejudice was proper because quasi-judicial immunity precludes the Keenans’ claims."). All of the actions alleged by Slaieh arise from duties that are within the scope of Trustee’s authority, were disclosed to, and approved by the Court, and of which Slaieh received proper notice. Finally, this is the third time that Slaieh has presented these claims against Counter-Defendants, and the third time Slaieh has failed to put forth a prima facie case. (See order denying Slaeih’s Barton motion filed as Docket No. 453 in 13- bk-3011-MH and Docket No. 37 in 16-ap-1224-MH). For all of these reasons, the Court determines that it is appropriate to dismiss the counter-complaint with prejudice.
TENTATIVE RULING
For the reasons stated above, and otherwise as set forth in Trustee’s motion to dismiss and his reply, the Court’s tentative ruling is to GRANT the motion and DISMISS the counter-complaint with prejudice.
APPEARANCES REQUIRED.
04/26/2017
The Court, having reviewed the Trustee's Unilateral Status Report indicating that he has agreed to a continuance of the hearing, the Trustee may appear telephonically.
Debtor(s):
Nabeel Slaieh Represented By George A Saba
2:00 PM
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Movant(s):
Mathew Grimshaw Pro Se
Larry D Simons (TR) Represented By George A Saba Matthew Grimshaw
D. Edward Hays Pro Se
Larry D Simons (TR) Pro Se
Marshack Hays LLP Pro Se
D. Edward Hays Represented By George A Saba Matthew Grimshaw
Larry D Simons (TR) Pro Se
Marshack Hays LLP Represented By George A Saba Matthew Grimshaw
Mathew Grimshaw Represented By George A Saba Matthew Grimshaw
David Wood Represented By
George A Saba Matthew Grimshaw
2:00 PM
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
From: 11/2/16, 2/1/17, 2/15/17, 4/26/17, 5/17/17 Also #50 - #52
EH
Docket 1
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
From: 4/26/17, 5/17/17 Also #50 & #51
EH
Docket 39
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
David A. Wood Pro Se
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
12:30 PM
Adv#: 6:17-01029 Cohen v. Bank of America, NA et al
From: 4/6/17, 5/11/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard H Brown Jr. Represented By Gary J Holt
Defendant(s):
Ocwen Loan Servicing, LLC Pro Se
Bank of America, NA Pro Se
Plaintiff(s):
Amrane Cohen Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Docket 73
- NONE LISTED -
Debtor(s):
Michael G Owens Pro Se
Joint Debtor(s):
Jennifer L Owens Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
EH
Docket 55
- NONE LISTED -
Debtor(s):
Regina Kaye Paige Represented By April E Roberts
Movant(s):
Regina Kaye Paige Represented By April E Roberts April E Roberts April E Roberts
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 72
- NONE LISTED -
Debtor(s):
Vance C. Marshall Represented By Norma Duenas
Joint Debtor(s):
Kim A. Marshall Represented By Norma Duenas
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
From: 5/11/17 EH
Docket 129
- NONE LISTED -
Debtor(s):
William D. Sims Represented By Patricia M Ashcraft
Joint Debtor(s):
Nancy J. Sims Represented By Patricia M Ashcraft
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 76
- NONE LISTED -
Debtor(s):
Tara D Resgonia Represented By
Dale Parham - INACTIVE - Michael Smith
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 105
- NONE LISTED -
Debtor(s):
Amir El-Jamil McNeely Represented By Steven A Alpert
Joint Debtor(s):
Veronica Guadalupe McNeely Represented By Steven A Alpert
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 140
- NONE LISTED -
Debtor(s):
Michael L Anderson Represented By Javier H Castillo
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 105
- NONE LISTED -
Debtor(s):
Blanca Estela Flores Represented By John F Brady Lisa H Robinson
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 36
- NONE LISTED -
Debtor(s):
Viet N. Tran Represented By
April E Roberts
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:32 PM
Also #12 EH
Docket 56
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
From: 3/23/17, 4/27/17, 5/11/17, 6/1/17 Also #11
EH
Docket 61
- NONE LISTED -
Debtor(s):
Joseph Robert Byrne Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Movant(s):
Hillary Allyne Byrne Represented By Jenny L Doling Summer M Shaw
Joseph Robert Byrne Represented By Jenny L Doling Jenny L Doling Summer M Shaw Summer M Shaw
12:32 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 6/2/17
EH
Docket 93
- NONE LISTED -
Debtor(s):
Aristottle T Saquilabon Represented By Emilia N McAfee
Movant(s):
Aristottle T Saquilabon Represented By Emilia N McAfee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Frank Castodio Represented By Lauren Rode
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Gilbert R Nava Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Warren Alan Hall Represented By Lionel E Giron
Joint Debtor(s):
Kelly Suzanne Hall Represented By Lionel E Giron
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Librada Salazar Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Parada Represented By
Jennifer Ann Aragon
Joint Debtor(s):
Ana Parada Represented By
Jennifer Ann Aragon
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
David K Johnson Represented By Gary J Holt
Joint Debtor(s):
Janet L Johnson Represented By Gary J Holt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sam Venero Represented By
Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Robert Heacock Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maria F Hurtado Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
John P Morris Represented By
Michael Smith
Joint Debtor(s):
Cassandra M Morris Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose R. Castaneda Represented By Michael Smith
Joint Debtor(s):
Miriam L Castaneda Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
MOVANT: MICHELLE MEREDITH
EH
Docket 17
06/08/2017
Notice of the hearing was defective based on the following: The Debtor checked the wrong box for the Shortened Notice portion of the Notice of Motion. The Debtor should have checked the box indicating that the Order Setting Hearing on Shortened Notice was not required but instead checked the box indicating that an application for hearing was still pending and that a separate notice would be served if that Debtor’s application was granted.
Separately, as to the merits, the prior case was filed as a chapter 13 case and was dismissed due to various deficiencies with the pro se filing and due to the Debtor’s failure to tender her payment to the Chapter 13 trustee at the confirmation hearing. Based on the Debtor’s filing of a chapter 7 case rather than a chapter 13 case, the grounds for dismissal in the prior case are not be reflected by the current filing. As such, the Court finds the presumption that this case was not filed in good faith has been rebutted.
APPEARANCES REQUIRED.
Debtor(s):
Michelle Meredith Represented By Patricia M Ashcraft
12:32 PM
Movant(s):
Michelle Meredith Represented By Patricia M Ashcraft
Trustee(s):
Howard B Grobstein (TR) Pro Se
12:33 PM
From: 3/23/17, 4/27/17, 5/11/17, 5/18/17, 6/1/17 EH
Docket 97
- NONE LISTED -
Debtor(s):
Kenneth Vernell Hawkins Represented By
Craig J Beauchamp
Joint Debtor(s):
Brenda A Hawkins Represented By
Craig J Beauchamp
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:33 PM
Docket 59
- NONE LISTED -
Debtor(s):
Robert B Eppley Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 105
- NONE LISTED -
Debtor(s):
Ana P Montes de Oca Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 63
- NONE LISTED -
Debtor(s):
Donnita M. Oliver Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 97
- NONE LISTED -
Debtor(s):
James Lange Represented By
Michael Smith
Joint Debtor(s):
Michelle Lange Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 92
- NONE LISTED -
Debtor(s):
Liliana Gomez Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 53
- NONE LISTED -
Debtor(s):
William Meineke Represented By Todd B Becker
Joint Debtor(s):
Kathie Meineke Represented By Todd B Becker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 51
- NONE LISTED -
Debtor(s):
Juan Manuel Plascencia De La Torre Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 100
- NONE LISTED -
Debtor(s):
Alfredo Manzo Arrieta Represented By Andy C Warshaw
Joint Debtor(s):
Mayte Hernandez- Arrieta Represented By Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
James Leonard Blow Jr. Represented By Jonathan D Doan
Joint Debtor(s):
Amanda Joyce Atkinson-Blow Represented By Jonathan D Doan
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 24
- NONE LISTED -
Debtor(s):
Noel Mallari Represented By
David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 43
- NONE LISTED -
Debtor(s):
Peter J. Giummo Represented By Bruce D White
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 36
- NONE LISTED -
Debtor(s):
Timothy Wade Jones Represented By Norma Duenas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 30
- NONE LISTED -
Debtor(s):
Cresencio Villamayor Irasusta III Represented By
Carey C Pickford
Joint Debtor(s):
Jennifer P Irasusta Represented By Carey C Pickford
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 20
- NONE LISTED -
Debtor(s):
Don Stevie Gurule Represented By Dana Travis
Joint Debtor(s):
Elaine Louise Gurule Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
9:30 AM
EH
Docket 21
Debtor(s):
Juan Vaca Diaz Represented By Edgar P Lombera
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq Mohammad Tehrani
Trustee(s):
Robert Whitmore (TR) Pro Se
9:30 AM
Adv#: 6:15-01198 Myers v. Myers et al
Docket 0
Debtor(s):
Phillip Carver Myers Represented By Bert Briones David P Pruett
Richard G Heston Richard A Marshack David Wood
Elmer D Martin III Matthew Grimshaw D Edward Hays
Defendant(s):
TD Ameritrade, Inc. Pro Se
Victoria C. Myers Represented By Thomas Armstrong
Plaintiff(s):
Phillip Carver Myers Represented By Richard G Heston
9:30 AM
Adv#: 6:16-01041 Myers v. Myers
Docket 0
Debtor(s):
Phillip Carver Myers Represented By Bert Briones David P Pruett
Richard G Heston Richard A Marshack David Wood
Elmer D Martin III Matthew Grimshaw D Edward Hays
Defendant(s):
Cristina Victoria Myers Represented By Thomas Armstrong
Plaintiff(s):
Phillip C Myers Represented By Sarah Cate Hays D Edward Hays Richard G Heston David Wood
11:00 AM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
From: 11/26/14, 1/26/15, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16, 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17
Also #4 EH
Docket 1
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
Jerry Wang Represented By
Franklin R Fraley Jr Anthony J Napolitano
11:00 AM
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
(Holding date)
From: 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17
Also #3 EH
Docket 10
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Movant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
Jerry Wang Represented By
Franklin R Fraley Jr
11:00 AM
Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
(Holding date)
From: 10/1/14, 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 10/21/15, 11/18/15, 12/16/15, 1/13/16, 3/2/16, 5/4/16, 6/1/16, 9/28/16, 11/16/16,
2/1/17, 2/16/17, 5/3/17
Also #6 EH
Docket 333
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
(Holding date)
MOVANT: JERRY WANG, STATE COURT RECEIVER
From: 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16, 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17
Also #5 EH
Docket 423
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Movant(s):
Jerry Wang, Duly-Appointed State Represented By
Jeffrey K Garfinkle Anthony J Napolitano
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
From: 3/1/17, 5/3/17 EH
Docket 440
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
From: 5/16/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Represented By Kevin R Carlin
2:00 PM
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
Employment Development Pro Se
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
From: 5/30/17 EH
Docket 37
PROCEDURAL BACKGROUND
On September 20, 2013, ASR Constructors, Inc. ("Debtor") filed a Chapter 11 voluntary petition. On October 23, 2013, related entities Another Meridian Company, LLC ("Meridian") and Inland Machinery, Inc. ("Inland") (collectively, "Debtors") filed Chapter 11 voluntary petitions. On November 1, 2013, the Court ordered joint administration of the estates of Debtor, Meridian and Inland.
Prior to the filing of the bankruptcy petition, Gotte Electric, Inc. ("Gotte") filed a state court complaint against Debtors and Federal Insurance Company ("FIC") to set aside a fraudulent transfer. Upon Debtor’s filing of a Chapter 11 petition, the action was removed to the bankruptcy court.
On November 17, 2015, Debtors filed a motion to approve compromise. On November 24, 2015, UST filed an objection. On December 1, 2015, Insurance
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Company of the West ("ICW") filed an objection. After further briefing, the Court granted the motion to approve the compromise, and an order was entered approving the compromise on December 30, 2015.
On January 8, 2016, Debtors’ bankruptcy cases were dismissed. On February 13, 2017, Debtors’ bankruptcy cases were reopened. On March 14, 2017, upon request by Debtors the Court modified the seventh paragraph of its dismissal order as follows:
7. Except for the claims asserted in the declaratory relief action filed by ICW and/or Gotte pursuant to the Settlement Agreement, this Court shall retain exclusive jurisdiction to enforce the provisions of the Settlement Agreement, 9019 Order and this Dismissal Order and to resolve any dispute(s) concerning the Settlement Agreement, the 9019 Order and/or this Dismissal Order or the rights and duties of the parties hereunder or thereunder or any issues relating to the Settlement Agreement, the 9019 Order and/or this Dismissal Order, including, interpretation of the terms, conditions and provisions thereof, and all issues and disputes arising in connection with the relief authorized under Settlement Agreement, the 9019 Order and/or this Dismissal Order.
On March 17, 2017, Debtors filed a complaint in interpleader against Gotte and other parties. On May 8, 2017, Debtors filed a motion for authorization to deposit disputed funds and for interpleader relief. At a status conference on May 16, 2017, the Court expressed some concerns with the relief requested, and Debtors filed a modification to motion on June 5, 2017.
FACTUAL BACKGROUND
Debtor was a general contractor. In connection with Debtor’s work, FIC issues a number of surety performance and payment bonds on Debtor’s behalf. Debtors and their principals, in return, executed various indemnity and collateral agreements in favor of FIC.
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Gotte was Debtor’s sub-contractor on three projects. On May 28, 2013, Gotte obtained a state court judgment against Debtor in the amount of $6,655,486.47, and on July 1, 2013, Gotte filed a UCC judgment lien against Debtor. On February 1, 2010, while the state court litigation was pending, Debtor transferred certain real property (the "Meridian Property") to Meridian for $3,100,000 and certain equipment and machinery (the "Equipment") to Inland for $3,780,458. These transfers were the subject the of the fraudulent transfer action commenced by Gotte. FIC has a lien on the Meridian Property, the Equipment, and Debtor’s accounts receivable.
On December 17, 2013, the Court authorized the sale of that part of the Meridian Property located in the city of Riverside for a purchase price of $3,150,000. Net proceeds of the sale, totaling $1,790,000 were held in a DIP account, subject to the claims of Gotte, FIC, Berkley Regional Insurance Company ("BRIC") and ICW. Additionally, net proceeds of the sale of certain real property located in Phelan, totaling $50,000, were held in a DIP account subject to the claims of FIC and BRIC, and net proceeds of an auction sale of the Equipment, totaling $1,006,000, were held in a DIP account subject to the lien of FIC. The total amount of funds on hand at the time of the filing of the compromise motion was $3,152,360.28.
As part of the compromise motion, FIC agreed to grant a carve-out from its collateral in the amount of $200,000 plus 45% of net proceeds from the sale of the remainder of the Meridian Property. The various parties’ respective rights to the FIC carve-out were not determined by the compromise motion.
On December 24, 2015, ICW filed a complaint in state court for declaratory relief and interpleader. On February 9, 2016, the IRS filed a notice of removal, removing the case to federal district court. On May 24, 2016, the district court dismissed the case upon motion of the IRS for lack of subject matter jurisdiction. As such, it is not clear that the interpleader action can be heard in either state court or federal district court.
2:00 PM
DISCUSSION
Debtors request two categories of relief: (1) authority to deposit the funds constituting the FIC carve-out (the "Funds") into the court registry; and (2) various interpleader relief.
Deposit of Funds in Court Registry
Fed. R. Bankr. P. Rule 7067 incorporates Fed. R. Civ. P. Rule 67. FRCP Rule 67(a) states:
If any part of the relief sought is a money judgment or the disposition of a sum of money or some other deliverable thing, a party – on notice to every other party and by leave of court – may deposit with the court all or part of the money or thing, whether or not that party claims any of it. The depositing party must deliver to the clerk a copy of the order permitting deposit.
FRCP Rule 67 is properly invoked when there is a live dispute regarding the entitlement to the funds in question. See generally Alstom Caribe, Inc. v. George P. Reintjes Co., Inc., 484 F.3d 106, 113 (1st Cir. 2007) ("The core purpose of Rule 67 is to relieve a party who holds a contested fund from responsibility for disbursement of that fund among those claiming some entitlement thereto."); see also Garrick v.
Weaver, 888 F.2d 687, 694 (10th Cir. 1989) ("The language of Rule 67 leaves to the discretion of the district court the decision as to whether to permit the deposit of funds in court. The magistrate acted well within his discretionary authority in allowing
the funds to be paid into court and excusing the defendants. His decision both ensured that the settlement fund would be available for disbursement and facilitated judicial economy by permitting the defendants, who no longer had an interest in the funds or in these proceedings, to withdraw.").
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Here, there is clearly a live dispute regarding entitlement to the Funds.
Interpleader Relief
Debtors’ original motion requested that the Court grant the following five forms of relief: (1) discharge Debtors from further liability to the named defendants; (2) dismissal of Debtors, with prejudice, from the adversary; (3) entry of a permanent injunction preventing Defendants from asserting claims against Debtor relating to the settlement funds; (4) requiring the named defendants to litigate between themselves;
an award of costs and reasonable attorney fees. Debtors’ modification to the motion withdrew the last request, and modified the second request to reduce Debtors’ role in the action to that of a monitoring capacity.
"In an interpleader action, the ‘stakeholder’ of a sum of money sues all those who might have claim to the money, deposits the money with the district court, and lets the claimants litigate who is entitled to the money." Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1265 (9th Cir. 1992). Procedurally,
An interpleader action typically involves two stages. In the first stage, the district court decides whether the requirements for rule or statutory interpleader action have been met by determining if there is a single fund at issue and whether there are adverse claimants to that fund. If the district court finds that the interpleader action has been properly brought the district court will then make a determination of the respective rights of the claimants.
Rhoades v. Casey, 196 F.3d 592, 600 (5th Cir. 1999) (citations omitted).
Here, Debtors are relying on rule interpleader. Fed. R. Civ. P. Rule 22(a)(1), incorporated into bankruptcy proceedings by Fed. R. Bankr. P. Rule 7022(a), states:
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the claims of the several claimants, or the titles on which their claims depend, lack a common origin or are adverse and independent rather than identical; or
the plaintiff denies liability in whole or in part to any or all of the claimants.
Here, the various defendants’ actual or potential claims to the Funds may expose Debtors to multiple liability. Therefore, an interpleader action is appropriate.
In cases where an interpleader action is appropriate, Collier states the following:
By turning over the fund or the property as directed by the court, the plaintiff may be discharged from the proceeding and any further liability. There may be an injunction issued to prevent the adverse claimants from further pursuing the stakeholder. On a finding that interpleader is proper, the court will then enter an order requiring the claimants to the fund or property to interplead.
10 Collier on Bankruptcy ¶ 7022.01 (16th ed. 2013); see also 28 U.S.C. § 2361. Here, Debtors’ requests closely track the language identified in Collier’s and, in the absence of opposition, appear appropriate here.
Jurisdictional Statement
Bankruptcy Court Jurisdiction
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Nevertheless, the Court must determine whether it has subject matter jurisdiction. See, e.g., In re Strawberry, 464 B.R. 443, 447 (Bankr. N.D. Fla. 2012). This complaint in interpleader was filed in a dismissed bankruptcy case and would result in litigation over non-bankruptcy claims between non-debtor parties.
28 U.S.C. § 157 provides for four categories of cases which the district court may refer to the bankruptcy court: (1) cases under title 11; (2) proceedings arising under title 11; (3) proceedings arising in a case under title 11; and (4) proceedings related to a case under title 11. See, e.g., In re S&M Constructors, Inc., 144 B.R. 855, 858 (Bankr. W.D. Mo. 1992). Additionally, 28 U.S.C. § 157(b) divides matters into core and non-core proceedings.
The first category, cases under title 11, refers to the bankruptcy case commenced by the filing of the petition. See, e.g., In re Wood, 825 F.2d 90, 92 (5th Cir. 1987). This category is inapplicable here, as the matter at issue is a complaint in interpleader.
The second category, proceedings arising under title 11, refers to those actions that are expressly created by title 11. See, e.g., In re Wolverine Radio Co., Inc., 930 F.2d 1132, 1141, n.14 (6th Cir. 1991). This category is inapplicable here – the underlying liability is premised upon state law claims.
The third category1, proceedings arising in a case under title 11, refers to claims that, although not created by title 11, would have no existence absent the bankruptcy, such as administrative matters. See, e.g., In re Repository Techs., Inc., 601 F.3d 710, 719 (7th Cir. 2010). This category is inapplicable here.
The fourth category, proceedings related to a case under title 11, contains two different subsets: (1) causes of action owned by the debtor that become property of the estate under § 541; and (2) suits between third parties which in one way or another affect the administration of the bankruptcy case. Id. It is only the latter category that is potentially invoked by this proceeding.
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The primary test for related to jurisdiction is the Third Circuit’s Pacor test:
The usual articulation of the test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.
Thus, the proceeding need not necessarily be against the debtor or against the debtor’s property. An action is related to bankruptcy if the outcome could alter the debtor’s rights, liabilities, options, or freedom of action . . . and which in any way impacts upon the handling and administration of the bankrupt estate.
Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3rd Cir. 1984). The Supreme Court previously acknowledged the prevalence of the Pacor test:
In attempting to strike an appropriate balance, the Third Circuit in Pacor, Inc.
v. Higgins, 743 F.2d 984 (1984), devised the following test for determining the existence of "related to" jurisdiction:
[Excerpt quoted above] . . .
The First, Fourth, Fifth, Sixth, Eight, Ninth, Tenth, and Eleventh Circuits have adopted the Pacor test with little or no variation. The Second and Seventh Circuits, on the other hand, seem to have adopted a slightly different test. But whatever test is used, these cases make clear that bankruptcy courts have no jurisdiction over proceedings that have no effect on the estate of the debtor.
Celotex Corp. v. Edwards, 514 U.S. 300, 308 n.6 (1995) (citations omitted).
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The Ninth Circuit has recently reiterated its approval of the Pacor test for pre- confirmation matters:
The test for post-confirmation "related to" jurisdiction was modified from the seminal pre-confirmation Pacor test for "related to" jurisdiction, which had been previously adopted by the Ninth Circuit in In re Fietz, 852 F.2d 455, 457 (9th Cir. 1988). Surveying the courts that had applied a limited version of the Pacor test in the post-confirmation context, we recognized that the Pacor test of whether the outcome of the proceeding could conceivably have any effect on the estate being administered in bankruptcy . . . If the outcome could alter the debtor’s rights, liabilities, options, or freedom of action . . . and which in any way impacts upon the handling and administration of the bankruptcy estate was somewhat overbroad in the post-confirmation context.
In re Wilshire Courtyard, 729 F.3d 1279, 1287 (9th Cir. 2013) (citations and quotations omitted).
First, it is unclear whether the complaint in interpleader would affect the administration of the bankruptcy estate, if a bankruptcy estate was being administered, Second, the Court must consider whether it can ever have "related to" jurisdiction in an action filed in a dismissed case because there is no estate to administer, and, consequently, such an action cannot affect administration of the estate.
The Effect of Dismissal on "Related to" Jurisdiction
The Pacor test includes two requirements: (1) the action must alter the rights or obligations of the debtor; and (2) the action must have an effect on the administration of the estate. See, e.g., In re Bass, 171 F.3d 1016, 1022 (5th Cir. 1999). This second prong becomes an issue when an action is filed in a dismissed case. See, e.g., id. ("The
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second prong, however, is problematical. Although the injunction would have an impact on the Debtor, it could not have any effect whatsoever on his estate in bankruptcy or its administration. First and foremost, such an estate no longer exists.").
A different situation arises when, after an action is commenced, the underlying bankruptcy case is dismissed. Courts have generally concluded that in such a situation, retention of jurisdiction is discretionary, and based on principles of equity and judicial economy. See, e.g., In re Smith, 866 F.2d 576, 580 (3rd Cir. 1989) ("Drawing upon an analogy to the disposition of ancillary and pendent claims, the courts have held that they may consider a number of factors to determine whether jurisdiction should be retained."). Such a situation is, however, fundamentally different from the situation here. See id. ("Appellees fail, however, to distinguish between the determination of the existence of jurisdiction at the outset of these proceedings and the determination of whether ‘related’ claims should be dismissed with the dismissal of the bankruptcy case or the discharge of the debtor."); In re Fietz, 852 F2.d 455, 457 n.2 (9th Cir. 1988) ("Subject matter jurisdiction should be determined as of the date that the complaint, or in this case the cross-claim, was filed.").
In developing a standard for when a bankruptcy court should retain jurisdiction following the dismissal of the underlying case, courts have analogized the situation to a district court’s retention of pendent state claims following dismissal of the federal claims. See, e.g., In re Porges, 44 F.3d 159, 162-63 (2nd Cir. 1995); In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992); In re Casamont Investors, Ltd., 196 B.R. 517, 522 (B.A.P. 9th Cir. 1996) ("In determining whether the bankruptcy court abused its discretion by retaining jurisdiction over related proceedings, the Ninth Circuit and several other circuits have analogized to cases concerning the propriety of district courts retaining jurisdiction over pendent state law claims after federal claims have been dismissed."). Applying that analogy and the applicable standard to the matter at issue here reveals the fundamental problem: a district court can never exercise pendent jurisdiction over state law claims when, at their commencement, there is no existing federal claim for the state claims to supplement. In the bankruptcy context, the Court cannot exercise related to jurisdiction if there is no bankruptcy case for the complaint to relate to.
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Ancillary or Retained Jurisdiction
Attempts have been made to avoid this issue by arguing for the existence of supplemental or retained jurisdiction. See In re Bass, 171 F.3d 1016, 1023-242 (5th Cir. 1999) (supplemental) ("Congress has gone to great lengths to determine what proceedings may be tried by bankruptcy courts, and the exercise of ancillary and pendent jurisdiction by bankruptcy courts could subsume the more restrictive ‘related to’ and ‘arising in’ jurisdiction, such that the latter would be rendered substantially, if not entirely, superfluous."); id. at 1025 (retained) ("[B]efore a court can exercise its discretion to ‘retain’ jurisdiction over a ‘related proceeding,’ the court must have had jurisdiction over that proceeding in the first place. The Denneys did not file their suit in Texas until after the bankruptcy case in Utah had been closed. From a purely temporal standpoint, there was no proceeding over which bankruptcy court jurisdiction could be ‘retained.’"); see also In re Morris, 950 F.2d 1531, 1534 (11th Cir. 1992) (same). The Ninth Circuit has previously discussed the application of supplemental, or ancillary, jurisdiction in the context of interpreting a settlement agreement in a Chapter 11 structured dismissal:
Here, when Sea Hawk filed its adversary proceeding, VFDA’s Chapter 11 case had been dismissed and a final decree entered. . . .
The bankruptcy court has no role in the resolution of the creditors’ dispute, and it is involved only fortuitously because the dispute implicates the terms of a settlement agreement approved by the court as a precondition of the dismissal of VFDA’s bankruptcy. . . .
The bankruptcy court did not consider dismissal of VFDA’s bankruptcy to automatically divest it of jurisdiction over a related case. It reasoned that after dismissal, the court has discretion to retain jurisdiction over a related proceeding, citing In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992). . . .
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Carraher does not support the bankruptcy court’s decision. It stands for the proposition that a bankruptcy court may retain jurisdiction over a related
proceeding pending at the time of the dismissal of the bankruptcy case. It does not support the assertion of bankruptcy jurisdiction over a proceeding initiated subsequent to the dismissal of the bankruptcy case.
In re Valdez Fisheries Dev. Ass’n, Inc., 439 F.3d 545, 547-48 (9th Cir. 2006). Valdez Fisheries, however, made clear that the result may have been different had the Court’s dismissal order explicitly retained jurisdiction over the dispute in question. See id. at 549 ("Ancillary jurisdiction may rest on one of two bases: (1) to permit disposition by a single court of factually interdependent claims, and (2) to enable a court to vindicate its authority and effectuate its decrees.") (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 79-80 (1994)). The second purpose of Kokkonen’s retained, related-to jurisdiction is at issue here.
Nevertheless, the second prong of the Kokkonen test has its limits. See, e.g., In re Ray, 624 F.3d 1124, 1136 (9th Cir. 2010) ("In short, hearing a breach of contract claim predicated on evidence that came to light after a bankruptcy case had closed, its creditors paid, and the debtor discharged, stretches the limits of the bankruptcy court’s ancillary jurisdiction too far, going beyond what is necessary for the bankruptcy court to ‘effectuate its decrees." . . . Reopening of the bankruptcy case is rare, and only used when necessary to resolve bankruptcy issues, not to adjudicate state law claims that can be adjudicated in state court.") (citation omitted). Importantly, an explicit retention of jurisdiction is only valid to the extent that jurisdiction is retained over claims that could have been heard at the time that jurisdiction was retained. See, e.g., In re Nobel Group, Inc., 529 B.R. 284, 292 (Bankr. N.D. Cal. 2015). To conclude otherwise would be to allow bankruptcy courts to craft their own jurisdictional authority. See, e.g., In re Resorts Int’l, Inc., 372 F.3d 154, 161 (3rd Cir. 2004) ("[N] either the bankruptcy court nor the parties can write their own jurisdictional ticket.
When a court lacks subject matter jurisdiction over a dispute, the parties cannot create it by agreement even in a plan of reorganization.").
First, there appears to be a problem in that jurisdiction was not conferred until the time of the dismissal order. Here, the retention of jurisdiction over the interpleader action was concurrent with dismissal of the case, and, as such, the claim for which
2:00 PM
jurisdiction was retained could not have been filed until after the case was dismissed. As stated above, related to jurisdiction is determined at the time the claim is filed, but, importantly, is premised upon the existence of a case that the claim can be related to. Therefore, because the jurisdiction in question was only conferred in a dismissal order, there would no existing bankruptcy case at the time an interpleader action could have been filed, so as to confer related to jurisdiction. The Court is aware of the confusing nature of the issue.
Second, even if the retention of jurisdiction had been in the settlement order, and, as such, the retention of jurisdiction would have arisen in the context of an existing case, allowing related to jurisdiction to exist2, it would be unclear, possibly unlikely, that the Court would have subject matter jurisdiction over the complaint in interpleader.
As briefly alluded to in section B, supra, the Ninth Circuit has limited the Pacor "related to" test to pre-confirmation matters, and has imposed a more demanding test for post-confirmation matters. See In re Pegasus Gold Corp., 394 F.3d 1189, 1194 (9th Cir. 2005). The rationale for this distinction is that the bankruptcy estate ceases to exist post confirmation. See generally id. Pegasus Gold, therefore, replaced the more liberal Pacor test with a "close nexus" test after the dissolution of the bankruptcy estate. See id. The "close nexus" test requires that the matter be directly affect the bankruptcy proceeding for subject matter jurisdiction to be present. See id. It is difficult to ascertain how the "close nexus" test could be satisfied when the basis for the complaint in interpleader, the settlement agreement, also contemplates that the bankruptcy proceedings will cease.
Furthermore, even if Debtors had modified the settlement order and could show that the "close nexus" test was satisfied, the pendent jurisdiction test alluded to in section B, supra, may also merit consideration. This test instructs the Court to consider the interests of "economy, convenience, fairness and comity." See In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992).
The Court need not reach the "close nexus" or pendent jurisdiction tests at this point, however, for the following two reasons: (1) the modification of the dismissal order does not properly appear to confer jurisdiction on the Court, and (2) the settlement order expressly disclaims jurisdiction over the interpleader action.
2:00 PM
TENTATIVE RULING
Based on the foregoing, the Court believes dismissal of the adversary for lack of subject matter jurisdiction is appropriate. The Court will consider whether to, on its own motion, amend the dismissal order to delete the retention of jurisdiction, and at the request of the parties, may continue the hearing for further briefing in light of the foregoing.
APPEARANCES REQUIRED.
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Represented By Kevin R Carlin
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
2:00 PM
Gotte Electric, Inc. Pro Se
Employment Development Pro Se
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Movant(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
10:00 AM
MOVANT: USA BANK NATIONAL ASSOCIATION
From: 4/4/17, 5/16/17 EH
Docket 68
- NONE LISTED -
Debtor(s):
Dina Guadalupe Garay Represented By Aalok Sikand
Vito Torchia - DISBARRED -
Movant(s):
U.S. BANK NATIONAL Represented By Megan E Lees
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST CO
From: 5/9/17 EH
Docket 110
Service is Proper Opposition: Yes
Subject to cure or APO discussions, the Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Zerry B Holefield Represented By
Dale Parham - INACTIVE - Michael Smith
Movant(s):
Deutsche Bank National Trust Represented By
Joely Khanh Linh Bui Mark T. Domeyer Daniel K Fujimoto
10:00 AM
Trustee(s):
Caren J Castle
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA
EH
Docket 92
June 20, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and ¶3. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Mark A Rowley Represented By
Don E Somerville Tate C Casey
Joint Debtor(s):
Catherine C Rowley Represented By
Don E Somerville Tate C Casey
Movant(s):
HSBC Bank USA, National Represented By
10:00 AM
Trustee(s):
Alexander K Lee
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE ALT-A SECURITIES MORTGAGE LOAN TRUST
EH
Docket 54
- NONE LISTED -
Debtor(s):
Victor M. Menez Represented By
Dale Parham - INACTIVE - Michael Smith
Joint Debtor(s):
Marilee J. Menez Represented By
Dale Parham - INACTIVE - Michael Smith
Movant(s):
Deutsche ALT-A Securities Represented By Christina J O
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 4/25/17 EH
Docket 71
Tentative Ruling:
Service is Proper Opposition: Yes
While it appears to the Court that Debtors may have missed several mortgage payments over the past few years, the evidence provided by Wells Fargo is inadequate to establish cause for relief. Wells Fargo’s Exhibit 5 includes unexplained "co- mingled funds adjustments", totaling more than $20,000, and appears to document that Debtors have made their mortgage payments for at least eight months, in apparent contradiction of the motion’s account of their post-confirmation delinquency. There is also a general incoherency in the organization of Exhibit 5’s columns. As one example, payments made by Debtors for February and March 2016 appear on page 3, and are "applied" to payments due on June 2015, despite a payment being made in June 2015, documented on page 2, at a time when Debtors had a positive suspense balance. Wells Fargo’s non-chronological organization of payment history is, at best, unclear.
APPEARANCES REQUIRED.
10:00 AM
Debtor(s):
David Sandoval Represented By
Bryant C MacDonald
Joint Debtor(s):
Mary Celine Sandoval Represented By
Bryant C MacDonald
Movant(s):
Wells Fargo Bank, N.A. Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 4/25/17 EH
Docket 103
Tentative Ruling:
Service is Proper Opposition: Yes
Although relief from stay appears warranted, parties to address status of adequate protection discussions.
APPEARANCES REQUIRED.
Debtor(s):
Luis Antonio Palomino Represented By David Lozano
Joint Debtor(s):
Mariella Roxana Palomino Represented By David Lozano
10:00 AM
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 5/9/17 EH
Docket 47
Service is Proper Opposition: Yes
Parties to advise Court regarding adequate protection discussions.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
10:00 AM
Movant(s):
WELLS FARGO BANK, N. A. Represented By
Dane W Exnowski Melissa A Anderson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST COMPANY
EH
Docket 45
6/20/2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1). The Court is inclined to GRANT relief under ¶2, ¶3, and ¶`12. Relief DENIED under ¶13 as moot. GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Eduardo Nuno Represented By James B Smith
Joint Debtor(s):
Lilia Briseno Represented By
James B Smith
Movant(s):
Deutsche Bank National Trust Represented By Tyneia Merritt
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
From: 4/11/17, 5/9/17 EH
Docket 56
04/11/17
Service: Proper Opposition: Yes
Debtors have indicated that they intend to cure by the hearing or request an APO. APPEARANCES REQUIRED.
Debtor(s):
Jesus Manuel Gomez Represented By Dana Travis
Joint Debtor(s):
Maria Gomez Represented By Dana Travis
Movant(s):
WELLS FARGO BANK, N. A. Represented By
Dane W Exnowski
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BEAL BANK
EH
Docket 50
June 20, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay, relief under ¶3, and ¶6. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Vincent K Jones Represented By Dana Travis
Movant(s):
Beal Bank Represented By
Mark S Krause
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
From: 4/25/17 EH
Docket 46
Tentative Ruling:
Service is Proper Opposition: Yes
While relief from stay appears warranted, parties to discuss adequate protection if amounts in default are not fully cured by hearing.
APPEARANCES REQUIRED.
Debtor(s):
Antoine Williams Represented By Gary Leibowitz
Movant(s):
U.S. Bank National Association, as Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
EH
Docket 31
June 20, 2017
Service: Not Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay and ¶3.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Juan Vaca Diaz Represented By Edgar P Lombera
Movant(s):
U.S. Bank National Association Represented By Jenelle C Arnold
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
declarations REAL PROPERTY RE: 9617 Surrey Avenue, Montclair, California MOVANT: WELLS FARGO BANK
From: 5/16/17 EH
Docket 74
05/16/2017
Service: Proper Opposition: Yes
The Debtors assert they have made payments for the last three months but are aware they are otherwise behind on payments. Debtor indicates that he receives payments for jobs on completion and Debtors are requesting an APO to cure the remaining deficiency.
APPEARANCES REQUIRED.
Debtor(s):
Edward Edmund Zozaya Represented By Dana Travis
Joint Debtor(s):
Georgia Parrilla Zozaya Represented By Dana Travis
10:00 AM
Movant(s):
Wells Fargo BAnk, N.A. Represented By April Harriott Sean C Ferry
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 25
- NONE LISTED -
Debtor(s):
Alexis I Barahona Represented By Christopher J Langley
Movant(s):
WELLS FARGO BANK, N.A. Represented By Tavon Taylor Judith Trigg-Hart Megan E Lees
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CREDITOR TRINITY FINANCIAL SERVICES
From: 5/30/17 EH .
Docket 25
Service is Improper Opposition: None
The Court is inclined to CONTINUE the hearing for service on Debtor pursuant to Local Rule 4001-(1)(c)(C)(i).
APPEARANCES REQUIRED.
Debtor(s):
Fonda Cormier Represented By Phillip Myer
Movant(s):
Trinity Financial Services LLC Represented By Henry D Paloci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: PLANET HOME LENDING LLC ITS SUCCESSORS AND ASSIGNS
From: 4/25/17 EH
Docket 24
Tentative Ruling:
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT relief from § 1301(a) co-debtor stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Hector Manuel Chavez Jr. Represented By Matthew D Resnik
Movant(s):
Planet Home Lending, LLC Represented By Michelle R Ghidotti
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 5/9/17 EH
Docket 25
- NONE LISTED -
Debtor(s):
Todd Christopher Tyrrell Represented By Matthew Abbasi
Joint Debtor(s):
Kelly Jean Tyrrell Represented By Matthew Abbasi
Movant(s):
WELLS FARGO BANK, N.A., AS Represented By
Tyneia Merritt
Trustee(s):
Arturo Cisneros (TR) Represented By
D Edward Hays
10:00 AM
MOVANT: DEVELOPER'S CAPITAL INC
From: 5/9/17 EH
Docket 34
Service is Proper Opposition: Yes
The Court is inclined to DENY the motion without prejudice. Movant’s request for relief only requests relief under § 362(d)(2). Section 362(d)(2) requires Movant to show that the property is unnecessary to an effective reorganization and that Debtors have no equity in the property. This case is a Chapter 13 proceeding and the property at issue is Debtors’ primary residence. In this situation, absent any indication to the contrary, the property is necessary to an effective reorganization. Furthermore, Movant does not identify the fair market value of the property or whether there are any additional liens on the property, and, therefore, has not demonstrated that Debtors have no equity in the property.
APPEARANCES REQUIRED.
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
10:00 AM
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
Movant(s):
Developers Capital, Inc., Employees Represented By
Russel T Little
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FINLANDIA SAUNA PRODUCTS, INC.
EH
Docket 21
- NONE LISTED -
Debtor(s):
Jose Liborio Avila Represented By Christopher Hewitt
Movant(s):
FINLANDIA SAUNA PRODUCTS, Represented By
Andrew Blackburn
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BANK OF THE WEST
Also #21 EH
Docket 38
June 20, 2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on post-petition failure to make payments. GRANT relief from the stay under § 362(d)(2) based on a lack of equity in the Property and Debtor’s intention to surrender suggests the Property is not necessary for reorganization. Debtor’s confirmed plan includes surrender of the Property.
GRANT waiver of 4001(a)(3) stay and relief under ¶6.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Bryan D. Chriss Represented By Michael Smith
Movant(s):
BANK OF THE WEST Represented By
Mary Ellmann Tang
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BANK OF THE WEST
Also #20 EH
Docket 39
June 20, 2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on post-petition failure to make payments. GRANT relief from the stay under § 362(d)(2) based on a lack of equity in the Property and Debtor’s intention to surrender suggests the Property is not necessary for reorganization. Debtor’s confirmed plan includes surrender of the Property.
GRANT waiver of 4001(a)(3) stay and relief under ¶6.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Bryan D. Chriss Represented By Michael Smith
Movant(s):
BANK OF THE WEST Represented By
Mary Ellmann Tang
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CREDIT ACCEPTANCE CORPORATION
EH
Docket 28
June 20, 2017
Service is Proper Opposition: None
GRANT relief from stay based on non-opposition filed by Debtor on June 12, 2017. Grant waiver of 4001(a)(3) stay and relief under ¶6. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Michael Ray Sandoval Represented By Michael E Clark Barry E Borowitz
Movant(s):
Credit Acceptance Corporation Represented By Sheryl K Ith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 32
06/20/2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(4). Court finds that bankruptcy case was part of scheme to hinder, delay and defraud creditors based on the unauthorized transfer of interest in the Property without Movant’s approval. The Court finds bad faith as to the Debtor noting that this is the fourth relief from stay granted in this case involving an unauthorized transfer. GRANT relief under ¶2 and ¶
3. GRANT waiver of 4001(a)(3) stay. GRANT relief under ¶10a but only upon recording of a copy of this order and giving appropriate notice of its entry in compliance with applicable nonbankruptcy law. DENY relief under ¶4 due to lack of cause.
APPEARANCES REQUIRED.
Debtor(s):
Christopher Wilkins Pro Se
Movant(s):
Wells Fargo Bank, N.A. Represented By Jason C Kolbe Jenelle C Arnold
10:00 AM
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: REGIONAL ACCEPTANCE CORPORATION
EH
Docket 22
June 20, 2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). There is no equity in the Property and Debtor’s intention to surrender suggests the Property is not necessary for reorganization. Debtor’s confirmed plan included surrender of the Property. GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Maria I Alcaraz Represented By Manfred Schroer
Joint Debtor(s):
Eduardo D Alcaraz Represented By Manfred Schroer
Movant(s):
REGIONAL ACCEPTANCE Represented By
10:00 AM
Trustee(s):
Michael D Vanlochem
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NISSAN MOTOR ACCEPTANCE CORPORATION
EH
Docket 9
June 20, 2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Jessica Pilar Solis Represented By Yolanda Flores-Burt
Movant(s):
NISSAN MOTOR ACCEPTANCE Represented By
Michael D Vanlochem
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
EH
Docket 11
06/20/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) based on inadequate equity cushion of 14.14%. GRANT relief under ¶2. GRANT waiver of 4001(a)(3) stay. DENY relief from stay under §362(d)(2) due to lack of cause shown. DENY relief under ¶13 as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Allison Lyn Emray Represented By
D Justin Harelik
Movant(s):
Wells Fargo Bank, N.A., dba Wells Represented By
Sheryl K Ith
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK, NA AS LEGAL TITLE TRUSTEE FOR TRUMAN 2016 SC6 TITLE TRUST
EH
Docket 23
June 20, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Ryan Keith Richardson Represented By Ronald B Talkov
Joint Debtor(s):
Joyce Nanette Richardson Represented By Ronald B Talkov
Movant(s):
U.S. BANK, NA AS LEGAL TITLE Represented By
Diane Weifenbach
10:00 AM
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK
From: 5/30/17 EH
Docket 18
Service is Proper Opposition: None
While cause arguably exists to lift the stay, Movant to discuss the status of this motion given that Movant withdrew its bad faith objection to confirmation at Debtor’s confirmation hearing on May 18, 2017.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Menendez Represented By Sunita N Sood
Movant(s):
WELLS FARGO BANK, N.A. Represented By
Dane W Exnowski
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 9
June 20, 2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Ricardo Enciso Represented By Speros P Maniates
Joint Debtor(s):
Sonia Gamez Represented By
Speros P Maniates
Movant(s):
Wells Fargo Bank, N.A., dba Wells Represented By
Sheryl K Ith
10:00 AM
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
MOVANT: UNITED CATHOLICS FEDERAL CREDIT UNION
EH
Docket 15
- NONE LISTED -
Debtor(s):
Teresa A Salvail Represented By Julie J Villalobos
Joint Debtor(s):
Michael D Salvail Represented By Julie J Villalobos
Movant(s):
United Catholics Federal Credit Represented By Alana B Anaya
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BENJAMIN J. RAMOS
EH
Docket 11
06/20/2017
The Debtor has provided sufficient evidence that there has been a significant change in circumstances since the prior filing. The reduction in number of dependents is sufficient to overcome the presumption of bad faith. Based on the foregoing, the Court is inclined to GRANT the Motion in its entirety, continuing the stay as to all creditors.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Benjamin John Ramos Represented By John F Brady
Movant(s):
Benjamin John Ramos Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ELMER TOMPKINS
EH
Docket 14
June 20, 2017
Debtor’s prior case was dismissed for failure to make payments subject to the confirmed Chapter 13 plan. Debtor claims that due to attorney negligence, he was unable to follow through on his payment plan. Debtor defaulted immediately after the plan was confirmed and the case was dismissed on April 3, 2017. Debtor testifies that he tried to make the payments and payment was rejected on two occasions. However, Debtor fails to provide any corroborating documentary evidence.
Moreover, Movant has failed to serve Senior Lienholder, Shellpoint Mortgage Servicing, pursuant to FRBP 7004.
APPEARANCES REQUIRED.
Debtor(s):
Elmer Arnold Tompkins Represented By Scott Kosner
Movant(s):
Elmer Arnold Tompkins Represented By Scott Kosner
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: TRACY R. FRANCO
EH
Docket 14
06/20/2017
The Debtor’s prior case was voluntarily dismissed. The Debtor’s declaration indicates that prior counsel made mistakes and failed to provide materials to the trustee. In the instant case, the Debtor has retained new counsel and has provided her I and J, proposed plan, and evidence of family contributions to make the plan feasible. The feasibility issue will be further evaluated at the hearing on confirmation. However, the Debtor has provided sufficient evidence of good faith to warrant granting of the Motion.
Based on the foregoing, the Motion is granted. The stay is continued as to all creditors.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Tracy R. Franco Represented By Michael Smith
Movant(s):
Tracy R. Franco Represented By Michael Smith
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: KMC INVESTMENT CORP
EH
Docket 5
06/20/2017
Service: Proper Opposition: No
GRANT relief under § 362(d)(1) based on the following: (1) original trustee’s perfected deed of sale from pre-petition foreclosure sale, (2) Movant’s perfected grant deed acquired from original trustee pre-petition, and (3) Movant’s subsequent pre- petition unlawful detainer judgment and writ of possession, which establish Movant’s colorable claim to the Property. Further, because Debtor had no interest in the Property pre-petition, Cause under § 362(d)(1) is established. Bebensee-Wong v. Fed. Nat’l Mortgage Ass’n (In Re Bebensee-Wong), 248 B.R. 820, 822-23 (9th Cir. BAP 2000). The Court is also inclined to GRANT relief under § 362(d)(2) because according to the unlawful detainer judgment, Debtor no longer owns the Property, and as such, Debtor has no equity in the property, and the property is not necessary for an effective reorganization. GRANT relief under ¶2. GRANT wavier of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Norma A Rodriguez Pro Se
Movant(s):
KMC Investment Corp. Represented By
10:00 AM
Trustee(s):
Barry L O'Connor
Robert Whitmore (TR) Pro Se
2:00 PM
Docket 169
BACKGROUND
On May 9, 2016, Debtor filed a Chapter 11 voluntary petition. Debtor operates nine Fantastic Sam’s hair salons.
On May 10, 2017, UST filed a motion to dismiss the Chapter 11 case for failure to pay the first quarter Chapter 11 fees of $4,875, which were delinquent as of May 1, 2017. On June 6, 2017, US Rep Retail I, LLC, filed a response supporting dismissal.
DISCUSSION
11 U.S.C. § 1112(b) provides that a case may be dismissed or converted for cause. Section 1112(b)(4) enumerates certain examples of cause, including "failure to pay any fees or charges required under chapter 123 of title 28." 28 USC § 1930(a)(6) imposed the statutory fees for Chapter 11 cases. Therefore, cause exists to convert the case.
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Once the Court determines cause for dismissal is present, the Court must determine whether conversion or dismissal is in the best interests of the creditors and the estate. See, e.g., In re AVI, Inc., 389 B.R. 721, 729 (B.A.P. 9th Cir. 2008). According to UST, Debtor’s secured debt exceeds the value of its assets, and, therefore, there would likely not be any meaningful distribution to creditors if the case were converted to Chapter 7. Additionally, the most active creditor in the case has requested that the case be dismissed.
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-(1)(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion and DISMISS the case.
APPEARANCES REQUIRED.
Debtor(s):
Welch Management Corporation Represented By
Stephen R Wade
W. Derek May
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq Everett L Green
2:00 PM
EH
Docket 89
5/16/17
On November 10, 2016 ("Petition Date"), B & B Family, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. The Debtor is owned by Patricial Forte (who owns 50% of shares) and by Randall and Marianne Richey, husband and wife, who own the remaining 50% of shares in the Debtor (collectively, "Shareholders")
Debtor operates Oggi’s Pizza and Brewing Company in Apple Valley, California. Debtor has fifty-five employees. The Debtor’s Schedules show that it had approximately $114,662.50 in assets as of the Petition Date. The Debtor’s assets consist primarily of leased equipment, business licenses, and liquid assets in the form of cash and accounts.
On March 31, 2017, Debtor filed its Disclosure Statement and Chapter 11 Plan of Reorganization. On May 2, 2017, Comerica Bank filed a Limited Response to the Debtor’s Disclosure Statement pointing simply to the Debtor’s omission of its franchise agreement as an executory contract being assumed. In response, the Debtor amended its Disclosure Statement and Plan on May 2, 2017 (the "Amended DS and Plan"). Additionally, on May 3, 2017, the Debtor filed redline versions of the Amended DS and Plan reflecting the changes made since the March 31, 2017, filings.
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BASIC TERMS OF PLAN
The Chapter 11 Plan’s proposed effective date is the first day of the first full month after entry of the final order confirming plan (but no earlier than 8/01/17). Classes of claims are categorized as follows:
Claims Classification
Administrative Claims:
UST Fees - $4,875 (estimated), in full on effective date
Turoci Firm - $40,000 (estimated)/Terms: in full on effective date
Priority Tax Claims:
IRS: $5,251.48/ Terms: in full on effective date
California BOE: $125,750.40/Terms: 48 months, 7% interest, $3,011.25/ mo.
Class 1: Comerica Bank (Impaired)
Nature of lien: first priority security interest in all of Debtor’s assets (D values at $150,000)
· Claim: $494,123.90
Treatment: Bifurcated claim – Secured claim of $150,000, Unsecured Claim of
$344,123.90
Secured Claim Terms: 60 months, 6% interest, $2,899.92/mo.
Unsecured Claim treated with Class 6 GUCs
2:00 PM | ||
CONT... | B & B Family, Incorporated Chapter 11 | |
4) | Class 2: FC Marketplace aka Pioneer Park (Impaired) | |
· | Nature of lien: second priority security interest in all Debtor’s assets | |
· | Unsecured claim of $88,963.76 | |
· | Treatment: treated with Class 6 GUCs | |
· | Plan proposes to avoid the lien of FC Marketplace on entry of confirmation order | |
5) | Class 3: Oggi’s Corporate (Impaired) | |
· | Nature of lien: third priority lien in all Debtor’s assets | |
· | Unsecured claim of $54,106.12 | |
· | Treatment: paid with Class 6 GUCs | |
· | Plan proposes to avoid the lien of FC Marketplace on entry of confirmation order | |
6) | Class 4: Financial Pacific Leasing | |
· | Secured as to leased restaurant equipment which D values at $2,000 | |
· | Secured Claim of $2,000, Treatment: Paid in full on effective date (unimpaired) | |
· | Unsecured Claim of $42,864.40 (paid with class 6 GUCs) (impaired) | |
· | Plan proposes to avoid the lien of FC Marketplace on entry of confirmation order | |
7) | Class 5: High Desert Prime, LP (Impaired) | |
2:00 PM
Landlord
Debtor is assuming the lease and proposes to cure the arrears owed to landlord
· Claim: $178,499.98
Treatment: 48 months, 0% interest (per agreement with HDP), $3,718.75/mo.
Class 6: General Unsecured Creditors (Impaired)
· Total Claims: $636,718.69
· Dividend: 17% or $120,000
Treatment: $1,000/mo. for first 48 months and $6,000 for months 48-60
Note: Pawnee lease for bar stools, dishwasher etc., will be rejected and Pawnee filed an unsecured claim and will be treated as such.
Insiders/Equity Holders
No Insider Claims
Equity to retain stock subject to Section VII (which provides potentially for new value although, if necessary)
Plan Funding
Debtor indicates it will have $60,000 cash on hand on date of confirmation hearing (which Court presumes to mean the Effective Date).
Disposable income projection is $11,000 for five years
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Management
Patricia Forte (50% owner) is current President and will step down as President Randall Richey will remain Secretary
Marianne Richey, current CFO will become President and CFO
Other Terms
D will be disbursing agent with no compensation unclaimed distributions to revert to reorganized Debtor.
Adequate Information
A Chapter 11 disclosure statement is required to contain "adequate information" pursuant to 11 U.S.C. § 1125(b). Section 1125(f)(2) provides that: "the court may approve a disclosure statement submitted on standard forms approved by the court or adopted under section 2075 of title 28." The United States Courts have devised a disclosure statement template for small businesses, Form B25B, which Debtor generally adopted as to format.
As to the substance of a disclosure statement, 11 U.S.C. § 1125(a)(1) defines "adequate information" as:
information of a kind, and in sufficient detail as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor’s books and records, including a discussion of the potential material Federal tax consequences of the plan to the debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims or interests in the case, that would enable such a hypothetical investor of the relevant class to make an
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informed judgment about the plan, but adequate information need not include such information about any other possible or proposed plan and in determining whether a disclosure statement provides adequate information, the court shall consider the complexity of the case, the benefit of additional information to creditors and other parties in interest, and the cost of providing additional information
The type of information required varies with the circumstances. See, e.g., In re Jeppson, 66 B.R. 269, 292 (Bankr. D. Utah 1986) (listing nineteen categories of information commonly required); see also In re Malek, 35 B.R. 443, 443-44 (Bankr.
E.D. Mich. 1983) (listing minimum requirements).
Plan Feasibility
"There are numerous decisions which hold that where a plan is on its face nonconfirmable, as a matter of law, it is appropriate for the court to deny approval of the disclosure statement describing the nonconfirmable plan." In re Silberkraus, 253
B.R. 890, 899 (Bankr. C.D. Cal. 2000) (collecting cases).
Here, the Debtor asserts that it needs a total of $10,630 on a monthly basis to make plan payments and projects that after ordinary course expenses, it has a disposable income of approximately $11,000 with which to make those payments.
ISSUES TO BE ADDRESSED AT HEARING ON APPROVAL OF DISCLOSURE STATEMENT
The Court has examined the Debtor’s Amended DS and Plan to determine whether "adequate information has been provided and has identified the following issues to be addressed:
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· Page 6:9-15, reference to "Docket No. 88" should be changed to reference "Docket No. 98"
In the Plan, where the Debtor describes Oggi’s Corporate Debt, there appears to be a discrepancy regarding Oggi’s Corporate’s claim (i.e. $54,106.12 is the "balance owed" but the Debtor in the next sentence proposes a $88,963.76 allowed claim for this creditor)
Patricia Forte is alternately referred to as "CEO" or as "President" in the DS and Plan. The Debtor should use terms consistently to avoid confusion.
The DS and Plan contemplate bifurcation of Comerica and FPL’s claims and avoidance of remaining junior liens. However, the Docket does not reflect that any Motion to Value has yet been filed to determine the value of the collateral and notice to juniorlienholders that Debtor intends to avoid their liens on confirmation.
There is currently no proposal for new value. Therefore, if Class 6 does not accept the plan, the Plan cannot be confirmed with Shareholders retaining any interest in the reorganized Debtor.
Part 10, the Effect of Confirmation of Plan should clearly identify the lienholders whose liens shall be extinguished on confirmation of the Debtor’s Plan.
Part 9 is very lean on details regarding potential tax consequences on feasibility. Specifically, as to how Debtor determined the impact on feasibility, whether an accountant was consulted or otherwise how the Debtor is qualified to make a representation regarding the potential tax impact. Additionally, a question exists of the margin of potential increased tax liability.
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There is no evidence of the historical data referenced by Marianne Richey
which is referenced in the DS declaration by which she estimated the projected figures.
APPEARANCES REQUIRED.
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
2:00 PM
Also #38 & #39 EH
Docket 13
BACKGROUND
On May 8, 2017, Malik & Zobia Asif ("Debtors") filed a Chapter 11 voluntary petition. A case management conference was scheduled for June 20, 2017. Debtors own several Baja Fresh restaurants in southern California and Nevada. Prior to filing this Chapter 11 case, Debtors dissolved the corporations and limited liability companies that operated the Baja Fresh locations, and assumed all the assets and liabilities.
On May 15, 2017, Debtors filed a motion for order authorizing interim use of cash collateral. On May 24, 2017, the motion was granted on an interim basis, and the matter was continued to June 20, 2017. On June 6, 2017, Debtors’ franchisors, Fresh Enterprises, LLC and Triune, LLC (collectively, "Franchisor") filed an objection to the motion for cash collateral.
DISCUSSION
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11 U.S.C. § 363(a) defines cash collateral as:
cash, negotiable instruments, documents of title, securities, deposit accounts, or other cash equivalents whenever acquired in which the estate and an entity other than the estate have an interest and includes the proceeds, products, offspring, rents, or profits of property and the fees, charges, accounts or other payments for the use or occupancy of rooms and other public facilities in hotels, motels, or other lodging properties subject to a security interest as provided in section 552(b) of this title, whether existing before or after the commencement of a case under this title.
11 U.S.C. § 363(c)(1)-(3) (2010) states:
(c)(1) If the business of the debtor is authorized to be operated under section 721, 1108, 1203, 1204, or 1304 of this title and unless the court orders otherwise, the trustee may enter into transactions, including the sale or lease of property of the estate, in the ordinary course of business, without notice or a hearing, and may use property of the estate in the ordinary course of business without notice or a hearing.
The trustee may not use, sell, or lease cash collateral under paragraph (1) of this subsection unless-
each entity that has an interest in such cash collateral consents; or
the court, after notice and a hearing, authorizes such use, sale, or lease in accordance with the provisions of this section.
Any hearing under paragraph (2)(B) of this subsection may be a
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preliminary hearing or may be consolidated with a hearing under section (e) of this section, but shall be scheduled in accordance with the needs of the debtor. If the hearing under paragraph (2)(b) of this subsection is a preliminary hearing, the court may authorize such use, sale, or lease only if there is a reasonable likelihood that the trustee will prevail at the final hearing under subsection (e) of this section. The court shall act promptly on any request for authorization under paragraph (2)(B) of this subsection.
Moving on, the Court notes that Debtors have failed to comply with Fed. R. Bankr. P. Rule 4001(b) by failing to provide the required summary sheet. Debtors list the following "cash collateral assets": (1) security deposits with landlord ($41,541.40); (2) food and other inventory ($15,000); (3) checking accounts ($625); (4) cash ($500).
Presumably, Debtors do not intend to use the security deposits.
Creditor offers a variety of assertions in support of its objection to the use of cash collateral: (1) the majority of the franchise agreements terminated pre-petition, and the remainder of the franchise agreements terminated post-petition on the basis of a termination notice sent pre-petition; (2) the franchise agreements contained an anti- alienation clause and, therefore, Debtors pre-petition transfers of the agreement to themselves individually are null and void; (3) Debtors have been reckless in the operation of the Baja Fresh locations and have failed multiple quality assurance tests post-petition; (4) at the meeting of creditors, Debtors admitted that their budget forecasts were optimistic and included rent reductions.
Debtors have not replied to Franchisor’s objection. On May 24, 2017, this Court entered an order authorizing the use of cash collateral pursuant to a proposed budget. Franchisor’s objection places the credibility, and future viability, of that proposed budget is serious doubt. Given the concerns raised by Franchisor, it does not appear that replacement liens, in and of themselves, constitute adequate protection.
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
2:00 PM
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
Zobia Asif Represented By
Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
Malik Muhammad Asif Represented By Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
2:00 PM
Also #37 & #39 EH
Docket 42
BACKGROUND
On May 8, 2017, Malik & Zobia Asif ("Debtors") filed a Chapter 11 voluntary petition. A case management conference was scheduled for June 20, 2017. Debtors own several Baja Fresh restaurants in southern California and Nevada. Prior to filing this Chapter 11 case, Debtors dissolved the corporations and limited liability companies that operated the Baja Fresh locations, and assumed all the assets and liabilities.
On May 15, 2017, Debtors filed a motion for order authorizing interim use of cash collateral. On May 24, 2017, the Court granted the motion on an interim basis and continued the matter to June 20, 2017. On May 30, 2017, Debtors filed a new motion to use cash collateral. This separate motion was filed to request retroactive approval of Debtors’ use of cash collateral between May 9 and May 17. On June 6, 2017, Debtors’ franchisors, Fresh Enterprises, LLC and Triune, LLC (collectively, "Franchisor") filed an objection to the motion for cash collateral.
2:00 PM
DISCUSSION
Use of cash collateral on an interim basis was approved on May 24, 2017. Debtors’ prospective use of cash collateral is addressed in the tentative related to that matter.
During the first nine days after the filing of the petition, Debtors spent $77,887.90. Debtors assign the expenses to three categories: (1) necessary expenses for the continued operation of their business; (2) checks that were posted pre-petition, but cleared post-petition; and (3) necessary living expenses. Debtors request nunc pro tunc approval pursuant to § 105(a).
The Court has broad equitable discretionary power to approve a cash collateral motion nunc pro tunc and its decision is reviewed for abuse of discretion. See, e.g., Matter of Briscoe Enters., Ltd., II, 994 F.2d 1160, 1169-1170 (5th Cir. 1993). To the extent that the expenditures for which nunc pro tunc approval is sought are of the nature and amount (pro rata) as were approved for this Court’s order granting interim use of cash collateral, the Court approves their use nunc pro tunc. Nevertheless, the Court warns Debtors that unauthorized use of cash collateral can constitute grounds for dismissal or conversion of the case. See, e.g., In re Visicon S’holders Trust, 478 B.R. 292, 312 (Bankr. S.D. Ohio 2012).
A further issue is implicated, however, by Debtors use of cash collateral for personal expenses. The Court’s interim cash collateral motion states: "no insiders can receive compensation until after the appropriate timelines for served and filed Notices Setting Insider Compensation." The notices setting insider compensation were filed on May 19, 2017, and include a fifteen day objection period, meaning that insiders were precluded from receiving compensation before June 3, 2017. Compensation received before June 3, 2017, violates both the payment to insiders rule and the Court’s cash collateral order.
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While Debtors’ and their children may not have been paid a salary before June 3, 2017, they directly paid for their living expenses using cash collateral before that date. In accordance with the notices setting insider compensation and this Court’s order granting interim use of cash collateral, such expenditures were prohibited and nunc pro tunc authorization is not granted.
Furthermore, the Court notes the following additional problems:
Debtors’ exhibit 48 lists four bank accounts, including two DIP accounts. Neither of the two non-DIP accounts were disclosed on Debtors’ schedules.
Debtors should have provided real bank statements, instead of the informal drafted excel sheet. Payroll is unorganized, includes individuals being paid twice on the same days, individuals with no last name, individuals with no first name, and individuals with names that make no sense.
Debtors appear to have withdrawn approximately $5,500 in cash, allegedly for business purposes.
Debtors appear to have made payments toward prepetition debts, possibly giving rise to avoidable preferences.
Debtors paid approximately $3,500 in credit card fees. It is unclear what these fees are for and why there are so many distinct entries.
Debtors have a list of Bank of America bank fees for $35 all within a few days of each other. It is unclear why there are so many. Debtors have 1-3 Bank of America accounts that have been explicitly or implicitly revealed.
As noted by Franchisor, it is difficult to determine the extent to which the listed expenditures were for personal use, and the extent to which the expenditures were for business operations.
2:00 PM
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
Zobia Asif Represented By
Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
Malik Muhammad Asif Represented By Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
2:00 PM
(2) Requiring Status Report Also #37 & #38
EH
Docket 7
- NONE LISTED -
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
3:00 PM
Adv#: 6:16-01279 Allied Injury Management, Inc. v. One Stop Multi-Specialty Medical Group
EH
Docket 28
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Nor Cal Pain Management Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
Movant(s):
Floyd Skeren & Kelly, LLP Represented By Leslie A Cohen
3:00 PM
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
11:00 AM
Adv#: 6:16-01265 Whitmore (TR) v. Davol, Inc. et al
(Holding date)
From: 1/4/17, 2/1/17, 3/1/17, 4/12/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jesus M. Tapia Represented By Michael Smith
Defendant(s):
C.R. Bard, Inc. Represented By Christopher O Rivas
Bard Devices, Inc. Represented By Christopher O Rivas
Davol, Inc. Represented By
Christopher O Rivas
Plaintiff(s):
Robert Whitmore (TR) Represented By Troy A Brenes
Trustee(s):
Robert Whitmore (TR) Represented By
11:00 AM
Douglas A Plazak Troy A Brenes
11:00 AM
Docket 76
06/21/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the Applications of the associated professionals, the following administrative claims will be allowed:
Trustee Fees: | $ 6,189.95 |
Trustee Expenses: | $ 78.82 |
Accountant Fees: | $2,472 |
Accountant Costs: | $107.90 |
APPEARANCES WAIVED. The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
Debtor(s):
Pamela J. Carmichael Represented By Jenny L Doling
Trustee(s):
Helen R. Frazer (TR) Pro Se
11:00 AM
EH
Docket 55
- NONE LISTED -
Debtor(s):
Manuel Jose Saldana Represented By Robert G Uriarte
Trustee(s):
Lynda T. Bui (TR) Represented By Leonard M Shulman Elyza P Eshaghi Rika Kido
11:00 AM
EH
Docket 72
APPEARANCES REQUIRED.
Debtor(s):
Kai Lin Wu Represented By
Paul Y Lee
Trustee(s):
John P Pringle (TR) Represented By Wesley H Avery
11:00 AM
Also #6 & #7 EH
Docket 27
3/22/17
APPEARANCES REQUIRED.
03/01/2017
BACKGROUND
On August 30, 2016, Armon Randolph Sharp ("Debtor") filed his petition for chapter 7 relief. Arturo Cisneros is the duly appointed chapter 7 trustee ("Trustee").
On February 3, 2017, the Debtor filed a motion for turnover of $15,000 in cash and of a mobile home, both of which the Trustee asserts were received by the Debtor prepetition and were not scheduled ("Motion"). On February 15, 2017, the Debtor filed his opposition to the Motion ("Opposition"). On February 22, 2017, the Trustee filed his reply ("Reply").
11:00 AM
DISCUSSION
According to § 542(a), an entity shall deliver to the Trustee the property of the estate in its possession, custody or control unless the property is of inconsequential value to the estate. 11 U.S.C. § 542(a).
TENTATIVE RULING
The primary relief requested by the Motion is that the Debtor turnover certain property obtained prepetition, consisting of cash and a mobile home. In opposition, the Debtor asserts that the original schedules contained errors and that he has since amended his schedules to claim an exemption in the mobile home. On February 22, 2017, the Trustee filed objection to the Debtor’s homestead exemption. Due to the interrelated nature of the instant motion for turnover and the objection to the Debtor’s exemption, the instant hearing shall be CONTINUED to March 22, 2017, at 11:00 a.m., to be heard concurrently with the hearing on the objection to the Debtor’s homestead exemption.
APPEARANCES WAIVED. Movant to give notice of the continuance.
Debtor(s):
Armon Randolph Sharp Represented By Daniel King
Raymond W Stockstill
Movant(s):
Arturo Cisneros (TR) Represented By Toan B Chung
Trustee(s):
Arturo Cisneros (TR) Represented By
11:00 AM
Toan B Chung
11:00 AM
From: 3/22/17 Also #5 & #7 EH
Docket 34
3/22/17
APPEARANCES REQUIRED.
Debtor(s):
Armon Randolph Sharp Represented By Daniel King
Raymond W Stockstill
Movant(s):
Arturo Cisneros (TR) Represented By Toan B Chung
Trustee(s):
Arturo Cisneros (TR) Represented By Toan B Chung
11:00 AM
Also #5 & #6 EH
Docket 1
APPEARANCES REQUIRED.
Debtor(s):
Armon Randolph Sharp Represented By Daniel King
Raymond W Stockstill
Trustee(s):
Arturo Cisneros (TR) Represented By Toan B Chung
11:00 AM
Also #9 EH
Docket 266
06/21/2017
BACKGROUND
On October 13, 2015 ("Petition Date"), Jack Pryor ("Debtor") filed a chapter 11 petition. On February 25, 2016, the Court entered an order ("Conversion Order") converting Debtor’s case to a chapter 7. Karl Anderson ("Trustee") is the duly appoint chapter 7 trustee.
Debtor’s Amended Schedule A listed an interest in real property located at 19024 Ruppert Street, Palm Springs, CA (the "Property"). Debtor’s Amended Schedule B listed various assets/businesses, including but not limited to: (1) Diversified Product Industries, Inc. ("DPI"); (2) Access Solar, Inc. ("Access"); and (3) Cabazon Development Corp ("CBC") (collectively the "Companies").
On September 14, 2016, the Trustee filed a Motion for Turnover (the "Turnover Motion") which asserted the following facts:
That Trustee requested that Richard Halderman ("Broker") evaluate the Property. [Turnover Motion at Broker Dec. ¶ 3];
On or about March 1, 2016, the Broker inspected the property and he asked the Debtor about the large and unusual electric panels affixed to the interior of the building in one of the open storage spaces. [Id.].
Debtor informed the Broker that the Property had roof mounted solar panels. [Id.].
Debtor provided the Broker with a November 2014 appraisal of the Property, which "indicates that the Property has 96 solar panels on the roof which cost
11:00 AM
about $156,000.00 in 2012." [Id. ¶ 4].
Broker spoke to the Debtor in June 2016, and Debtor informed the Broker that the solar panels had been removed from the roof. [Id. ¶ 5].
Broker alleges that the removal of the solar panels from the Property will significantly decrease its value by at least $100,000.00. [Id. ¶ 6].
On October 19, 2016, the Court granted the Turnover Motion and specifically ordered the Debtor to turnover "the solar panels which appeared on the real property located at 19024 Ruppert Street, Palm Springs in approximately May 2016" within 30 days of entry of the order granting the Turnover Motion (the "Turnover Order"). The Debtor having failed to comply with the Turnover Order, the Trustee filed a Motion for Order to Show Cause re Contempt (the "First OSC Motion") on December 6, 2016. On January 12, 2017, the Court issued an order holding the Debtor in civil contempt for violation of the Turnover Order, ordering sanctions of $3,000, and again ordering turnover of the Solar Panels ("First OSC").
On April 11, 2017, the Trustee filed his Motion and Motion for OSC why the Debtor should not be held in further contempt and bodily detained until such time as he complies with the Court orders (the "Second OSC Motion"). The Debtor opposed the Second OSC Motion generally on the bases that: (1) he did not own the solar panels and that they were property of Access; (2) Access had already transferred the solar panels and it was thus impossible for him to comply with the Turnover Order and related OSCs; and (3) the Debtor is not a sophisticated party and did not believe he was doing anything wrong when he (as principal of Access) removed and transferred the solar panels.
On May 22, 2017, the Court issued an OSC for the Debtor to show cause why he should not be held in further contempt and bodily detained until such time as he complies with court orders ("Second OSC").
On May 30, 2017, the Debtor filed a Motion seeking relief from the Turnover Order and First OSC (the "Motion") pursuant to FRBP 9024 (incorporating FRCP 60). The Motion was opposed by the Office of the United States Trustee and, separately, by the Trustee (the "Oppositions"). On June 13, 2017, the Debtor filed a reply to the oppositions ("Reply").
11:00 AM
DISCUSSION
The Debtor seeks reconsideration of the Turnover Order and First OSC on the bases that (1) the Debtor was ordered to turn over the solar panels at a time when the solar panels had already been transferred by Access/Debtor to a third party thus it would have been impossible for the Debtor to comply with the Turnover Order at the time it was entered; (2) the solar panels always belonged to Access and were never part of the Debtor’s estate; (3) there has been no showing that Access is an alter ego of the Debtor; (4) the Trustee knew prior to the filing of the First OSC Motion that the Debtor no longer had the solar panels; and (5) the Trustee sought a contempt order against the Debtor for failure to comply with the Turnover Order which the Trustee knew the Debtor could not comply with.
In addition to the foregoing, in the Debtor’s declaration which was provided to the Trustee on or about November 29, 2016, the Debtor stated that the solar panels had been installed on the Property in December 2011 (Trustee Ex. 7, ¶4), that an agreement was reached in May 2015 for the sale of the solar panels (at the May 10, 2017, hearing, the Debtor indicated this was a verbal agreement)(id. at ¶6); the agreement for sale of the solar panels was then allegedly finalized in March 2016 for the sale price of $14,443.20 (id. at ¶7); and the solar panels were removed in April or May 2016 (id.).
As a threshold matter, the Court notes that any transfer of the solar panels by Access in March 2016 likely constituted a void transfer and violation of the automatic stay as to the Debtor’s bankruptcy estate, as the solar panels were affixed to the Debtor’s real property. In re Salov, 510 B.R. 720, 729 (Bankr. S.D.N.Y. 2014) ("Courts in all ten circuits have found that the automatic stay protects a possessory interest in property")(internal citations omitted). The stay applies as to all legal and equitable interests in property at commencement of the bankruptcy case. 11 USC § 541(a)(1). The case was commenced on October 13, 2015, and the Trustee’s Broker attested that at his inspection of the Property on March 1, 2016, the solar panels were affixed to the Debtor’s Property. If the Debtor and Access believed that the solar panels belonged to Access then Access should have sought abandonment of the property and at a minimum, needed to seek relief from stay to proceed with removal of the solar panels from the Property. This is so because the automatic stay specifically "enjoins any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate". 11 U.S.C. §
11:00 AM
362(a)(3).
Evidentiary Objections
The Court sustains the Trustee’s specific objections to the declaration of Maxine Miller.
Due Process
As both the Trustee and United States Trustee have pointed out, the Debtor’s initial Motion did not specify which of the six enumerated grounds for relief under Rule 60 would be the basis for the Motion. The Debtor indicated in his Reply (after it was pointed out that he had not indicated which rule he was proceeding under) that he was moving under Rule 60(b)(6). However, the Debtor’s Reply does not cure the due process issues created by the failure to indicate the grounds for the Motion. Although the Trustee provided some argument under Rule 60(b)(6), had the Trustee known for a certainty that the Debtor was moving under Rule 60(b)(6), they might have provided additional arguments or they may have devoted more time to these arguments rather than expending energies unnecessarily on Rule 60(b)(1). The United States Trustee, for its part, assumed the Motion was brought under Rule 60(b)(1) and made its arguments only on that basis.
Here, the Debtor’s failure to provide due process to interested parties, serves as a sufficient and independent basis for denial of the Motion.
Rule 60(b) Analysis
As to the merits, Rule 60(b)(6) has been used sparingly as an equitable remedy to prevent manifest injustice. The rule is to be utilized only where extraordinary circumstances prevented a party from taking timely action to prevent or correct an
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erroneous judgment. For example, in Klapprott v. United States, 335 U.S. 601, 69 S.Ct. 384, 93 L.Ed. 266 (1949), the Court upheld the use of the rule to set aside a default judgment in a denaturalization proceeding because the petitioner had been ill, incarcerated, and without counsel for the four years following the judgment. United States v. Alpine Land & Reservoir Co., 984 F.2d 1047, 1050 (9th Cir. 1993) Conversely, in Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207 (1950), the Court held that Rule 60(b)(6) should not be invoked where the petitioner bypassed his right to appeal for tactical reasons. Id. The Supreme Court has indicated that Rule 60(b)(6) relief may be had "to accomplish justice," but only under "extraordinary circumstances." Alpine Land at 1050.
The Ninth Circuit has indicated that the timeliness of a Rule 60(b)(6) motion "depends on the facts of each case," and relief may not be had where "the party seeking reconsideration has ignored normal legal recourses." In re Pacific Far East Lines, Inc., 889 F.2d 242, 249, 250 (9th Cir.1989) (holding relief appropriate where new legislation undermined the soundness of the judgment). See also United States v. Holtzman, 762 F.2d 720 (9th Cir.1985) (five year delay permissible where litigant reasonably interpreted an injunction to authorize litigant's conduct and timely relief was sought upon receipt of notice to the contrary); Rivera v. Puerto Rico Tel. Co., 921 F.2d 393 (1st Cir.1990) (twenty-three day delay permitted because party not properly notified of pending motion); J.D. Pharmaceutical Distrib., Inc. v. Save–On Drugs & Cosmetics Corp., 893 F.2d 1201, 1207 (11th Cir.1990) (relief from judgment granted because party never served with requests for admissions or motion for summary judgment). These cases demonstrate that Rule 60(b)(6) relief normally will not be granted unless the moving party is able to show both injury and that circumstances beyond its control prevented timely action to protect its interests.
The Docket reflects that the Debtor never filed any opposition to the Motion for Turnover as required by the Court’s local rules. At the hearing on the Motion for Turnover on October 5, 2016, the Debtor appeared in opposition to the motion for turnover of the solar panels and argued that the solar panels belonged to Access, his corporation; that they were not property of his estate; and that he no longer had the solar panels. The Debtor further argued before the Court that he did not believe that the corporate assets were subject to turnover. Without the benefit of legal argument or evidence in opposition to the Motion for Turnover, the Court indicated it would grant the Trustee’s motion and require turnover of the solar panels. The Court further
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indicated to the Debtor that the issue of the solar panels could be further dealt with in the contempt proceeding if he failed to turn over the solar panels. The Debtor did not appeal the Court’s ruling and then failed to turn over the solar panels. The Trustee then filed the First OSC Motion by which it was seeking that the Court issue an order to show cause and the Debtor failed to file opposition. Subsequently, the Court issued the OSC and the Debtor again failed to file any response to the Court’s OSC. Now, several months after the first hearing on the motion for turnover of the solar panels, the Debtor makes the same assertions that he made in October 2016. There has been no change in circumstances other than the Debtor’s retention of counsel and no clear explanation as to why the Debtor delayed several months before seeking to set aside the Court’s prior orders.
Separately, the evidence in the record supports an inference that the Debtor acted intentionally to remove the solar panels to undermine the Trustee’s efforts to sell the Property. Specifically,
The Trustee sent his Broker to inspect the Property on March 1, 2016;
The Broker asked the Debtor about the solar panels at that inspection;
When the Broker spoke to the Debtor in June 2016, the Debtor indicated that the solar panels had been removed; and
The Debtor now indicates that the solar panels were removed from the Property and sold in March 2016 (shortly after the Broker’s inspection);
In November 2016, Debtor’s counsel emailed the Trustee a declaration of the Debtor which indicated that the solar panels were installed in December 2011 and that an agreement for sale of the solar panels was finalized in March 2016 for the sale price of $14,443.20 (well below the original cost of the solar panels of $156,000). (Lowe Decl. ¶19).
In addition to the foregoing, Maxine Miller, the secretary of Access submitted to the Court a declaration in which she indicated that net proceeds from the sale of the solar panels were used by Access to pay administrative and payroll for the Debtor and for herself. (Miller Decl. ¶6.a.). Based on the evidence that the Debtor may have acted intentionally to remove the solar panels for his own benefit, in addition to the Debtor having received notice of multiple motions by the Trustee seeking turnover which the Debtor ignored or failed to respond to, the Court finds that the Debtor has failed to demonstrate any extraordinary circumstances to justify setting aside of the prior orders pursuant to Rule 60(b)(6).
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In his Reply, the Debtor attempts to cast "confusion" regarding which attorneys were representing him at which times as a fact to meet the "extraordinary circumstances" test. This argument is unavailing. The Debtor’s history managing and owning more than one business underscore the fact that he is not an unsophisticated debtor. During the October 5, 2016, hearing, the Debtor expressed frustration at having to respond to so many motions by the Trustee. However, this frustration did not then and does not now appear to have resulted from confusion on his part regarding representation. Moreover, to the extent any issues arose due to specific acts of prior counsel, as indicated by the US Trustee, parties are bound by litigation decisions of their counsel, even if the decisions are careless or negligent.
TENTATIVE RULING
Based on the foregoing, given the due process failure to specify which grounds under Rule 60 the Debtor is moving under, and alternatively, having failed to demonstrate extraordinary circumstances warranting the granting of the Motion under Rule 60(b)(6), the Court is inclined to DENY the Motion in its entirety.
APPEARANCES REQUIRED.
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Movant(s):
Jack C Pryor Represented By
Trent Thompson
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
11:00 AM
Also #8 EH
Docket 263
- NONE LISTED -
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
2:00 PM
Adv#: 6:17-01025 Pringle v. Surace
From: 4/12/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Plaintiff(s):
John P. Pringle Represented By Todd A Frealy Carmela Pagay
Trustee(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:17-01072 Grobstein, Chapter 7 Trustee v. Barreto Tapia et al
§ 548(a)(1)(A)]; (2) Avoidance of Constructive Fraudulent Transfer [11 U.S.C. § 548(a)(1)(B)]; (3) Recovery of Avoided Transfer [11 U.S.C. § 550]; and (4) Turnover [11 U.S.C. § 542(a)
EH
Docket 1
- NONE LISTED -
Debtor(s):
Ever Ramirez Barreto Represented By
Scott D McDonald
Defendant(s):
Iban Barreto Hernandez Pro Se
Magdalena Barreto Tapia Pro Se
Plaintiff(s):
Howard B. Grobstein, Chapter 7 Represented By
Noreen A Madoyan
Trustee(s):
Howard B Grobstein (TR) Represented By Noreen A Madoyan Craig G Margulies
2:00 PM
Adv#: 6:14-01340 Leong v. Strait
From: 2/8/17, 3/22/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
David Joe Strait Represented By Brian J Soo-Hoo
Defendant(s):
David Joe Strait Pro Se
Plaintiff(s):
Brenda Leong Represented By Marc E Grossman
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:15-01270 Maradiaga, Sr et al v. Zumwalt
From: 12/2/15, 3/30/16, 4/6/16, 7/27/16, 11/30/16, 12/7/16, 4/12/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Audrey Zumwalt Represented By Javier H Castillo
Defendant(s):
Audrey Zumwalt Represented By Javier H Castillo Mario Alvarado
Plaintiff(s):
Kathleen Maradiaga Represented By Mario Alvarado
Julio Maradiaga Sr Represented By Mario Alvarado
Trustee(s):
Robert Whitmore (TR) Pro Se
2:00 PM
2:00 PM
Adv#: 6:16-01148 Pringle v. O. Allen Alpay, Trustee of the Alpay Living Trust
From: 8/31/16, 10/5/16, 10/11/16, 1/11/17, 1/24/17, 2/8/17, 5/10/17
EH
Docket 1
10/05/2016
This matter is being CONTINUED to October 11, 2016, at 3:00 p.m. The parties received telephonic notice of the continuance from the Court.
APPEARANCES WAIVED.
Debtor(s):
Manors San Bernardino Ave LLC Represented By
Gaurav Datta
Defendant(s):
Manors Construction & Pro Se
O. Allen Alpay, Trustee of the Alpay Represented By
Stephen B Goldberg Renee De Golier John L Bailey
Plaintiff(s):
John P. Pringle Represented By
2:00 PM
Trustee(s):
Scott Talkov Douglas A Plazak
John P Pringle (TR) Represented By Larry D Simons Scott Talkov Frank X Ruggier
2:00 PM
Adv#: 6:16-01122 Johnson v. NELNET LOAN SERVICES INC et al
From: 7/6/16, 10/5/16, 12/7/16, 3/22/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Clifford Patrick Johnson Pro Se
Defendant(s):
Educational Credit Management Represented By
Timothy P Burke NELNET LOAN SERVICES INC Pro Se
Plaintiff(s):
Clifford Patrick Johnson Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
2:00 PM
Adv#: 6:16-01212 Pringle v. Smyth
From: 11/2/16, 1/11/17, 4/26/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
William Dillingham Smyth Represented By Kevin M Cortright
Defendant(s):
Elena Smyth Represented By
C Scott Rudibaugh
Plaintiff(s):
John P. Pringle Represented By Melissa Davis Lowe Rika Kido
Trustee(s):
John P Pringle (TR) Represented By Leonard M Shulman Melissa Davis Lowe
2:00 PM
Adv#: 6:16-01200 Chicago Title Insurance Company v. Tyes
From: 10/19/16, 11/9/16, 1/11/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Yolanda Yvette Tyes Pro Se
Defendant(s):
Yolanda Yvette Tyes Pro Se
Plaintiff(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:16-01286 Apostolakis v. Neiderhiser
Also #19 & #20 EH
Docket 15
04/26/2017
BACKGROUND
On August 29, 2016, Patricia Glenn Apostolakis ("Debtor or "Plaintiff") filed her petition for chapter 7 relief. On December 1, 2016, the Debtor filed a complaint against Patricia Neiderhiser ("Defendant") to avoid preferential and/or fraudulent transfers ("Complaint"). The Complaint generally seeks to avoid a judgment lien on improved real property known as 10132 Phelan Road, in Oak Hills, California (the "Property").
On December 6, 2016, the Plaintiff filed her executed service of summons (Docket No. 3) indicating that the summons and complaint was served on Defendant on December 6, 2016. The Summons provided Defendant with a deadline of January 4, 2017, to file her answer.
An amended complaint was filed by the Plaintiff on December 29, 2016 (the "FAC").
On February 2, 2017, the Plaintiff re-filed a copy of her executed service of summons (Docket No. 5).
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On February 6, 2017, the Plaintiff filed a request for entry of default as to the
Defendant which was entered by the Clerk on February 7, 2017.
On March 22, 2017, the Plaintiff filed her Motion for Default Judgment against the Defendant (the "MDJ").
On April 11, 2017, the Defendant filed a Motion to vacate (or "set aside") the default ("MSA") and to expedite a hearing on her motion to vacate. The Court entered an order setting the MSA to be heard concurrent with the Motion for Default Judgment.
On April 20, 2017, the Plaintiff filed opposition to the MSA ("Opposition").
DISCUSSION
Federal Rule of Civil Procedure 55(c) (made applicable by Fed. R. Bankr.P.
7055) provides that "[f]or good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b)". FRBP 7055.
factors:
To determine "good cause" under this Rule, a court must consider three
whether the party seeking to set aside the default engaged in culpable conduct that led to the default;
whether it had no meritorious defense; or
whether reopening the default judgment would prejudice the other party.
United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (citing Franchise Holding II v. Huntington Rests. Group, Inc., 375 F.3d 922, 925–26 (9th Cir. 2004), cert. denied 544 U.S. 949 (2005)). This test is disjunctive, such that a finding that any one of the factors is true is sufficient for the court to refuse to set aside the default. It is the same test used to determine whether a default judgment should be set aside under Civil Rule 60(b). Id. While a court has the discretion to refuse to set aside a default judgment for excusable neglect under Fed.R.Civ.P. 60(b) if it finds one of the enumerated factors present, it is not mandatory that it do so. See Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108
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(9th Cir.2011). "Crucially, however, ‘judgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits.’ " Signed Personal Check No. 730 at 1091 (citing Falk v. Allen, 739 F.2d 461, 463 (9th Cir.1984)).
Defendant asserts that it appears the Complaint was served on her at her old address in Boron, California and as such she did not receive it. (Neiderhiser Decl. ¶3). The Defendant concedes that she received the FAC (but not the amended summons) at her address in Colorado on or about January 3 or 4 of 2017. The Defendant further asserts that the FAC did not indicate the time limit for the filing of a response. (Id. at ¶ 4). In response, the Plaintiff asserts that the Defendant has failed to corroborate her assertion that she has moved. Plaintiff suggests that the Defendant may own both properties and is simply asserting that she has moved in an effort to excuse her "sleeping on her rights" and lack of diligence. Here, Defendant may have engaged in "culpable conduct" regarding her address, and it does not appear Defendant has established a meritorious defense. However, any delay has been minor. Nevertheless, the Court is cognizant of the fact that as a direct result of Defendant’s three month delay in seeking to set aside the default despite having been aware of the Complaint since January 3 or 4, Plaintiff has unnecessarily expended fees in preparation of the Motion for Default Judgment, and such fees would otherwise prejudice Movant.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the MSA conditioned upon the Defendant’s payment of Plaintiff’s fees and costs associated with the filing of the Motion for Default Judgment.
The Court is further inclined to DENY the Motion for Default Judgment as moot based on the Court’s granting of the MSA.
APPEARANCES REQUIRED.
2:00 PM
Debtor(s):
Patricia Glenn Apostolakis Represented By Todd L Turoci
Defendant(s):
Patricia Neiderhiser Represented By Phillip Myer
Movant(s):
Patricia Neiderhiser Represented By Phillip Myer
Plaintiff(s):
Patricia Apostolakis Represented By Todd L Turoci
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:16-01286 Apostolakis v. Neiderhiser
Also #18 & #20 EH
Docket 13
04/26/2017
The Court is inclined to DENY the Motion for Default Judgment as moot based on the Court’s granting of the MSA.
Debtor(s):
Patricia Glenn Apostolakis Represented By Todd L Turoci
Defendant(s):
Patricia Neiderhiser Represented By Phillip Myer
Movant(s):
Patricia Apostolakis Represented By Todd L Turoci
Plaintiff(s):
Patricia Apostolakis Represented By Todd L Turoci
2:00 PM
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:16-01286 Apostolakis v. Neiderhiser
From: 2/8/17, 3/29/17, 4/26/17 Also #18 & #19
EH
Docket 1
- NONE LISTED -
Debtor(s):
Patricia Glenn Apostolakis Represented By Todd L Turoci
Defendant(s):
Patricia Neiderhiser Represented By Phillip Myer
Plaintiff(s):
Patricia Apostolakis Represented By Todd L Turoci
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:14-01070 Law Office of Andrew S. Bisom et al v. Howell
(Holding Date)
From: 12/2/15, 2/17/16, 3/2/16, 3/16/16, 4/27/16, 9/21/16, 12/14/16
Also #22 EH
Docket 62
- NONE LISTED -
Debtor(s):
Nancy Ann Howell Pro Se
Defendant(s):
Nancy Ann Howell Pro Se
Movant(s):
Law Office of Andrew S. Bisom Represented By
Andrew S Bisom
Plaintiff(s):
Eisenberg Law Firm, APC Represented By Andrew S Bisom
Law Office of Andrew S. Bisom Represented By
Andrew S Bisom
Trustee(s):
Steven M Speier (TR) Pro Se
2:00 PM
2:00 PM
Adv#: 6:14-01070 Law Office of Andrew S. Bisom et al v. Howell
From: 5/14/14, 7/2/14, 12/10/14, 3/18/15, 4/22/15, 5/20/15, 7/22/15, 10/28/15, 12/2/15, 2/17/16, 3/2/16, 3/16/16, 4/27/16, 9/21/16, 12/14/16
Also #21 EH
Docket 1
- NONE LISTED -
Debtor(s):
Nancy Ann Howell Pro Se
Defendant(s):
Nancy Ann Howell Pro Se
Plaintiff(s):
Eisenberg Law Firm, APC Represented By Andrew S Bisom
Law Office of Andrew S. Bisom Represented By
Andrew S Bisom
Trustee(s):
Steven M Speier (TR) Pro Se
12:30 PM
Adv#: 6:17-01054 Amarillo College of Hairdressing, Inc. v. Lopez
EH
Docket 0
- NONE LISTED -
Debtor(s):
Javier Lopez Represented By
Christopher Hewitt
Defendant(s):
Javier Lopez Pro Se
Joint Debtor(s):
Carmen Lopez Represented By Christopher Hewitt
Plaintiff(s):
Amarillo College of Hairdressing, Represented By
Eamon Jafari
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Adv#: 6:17-01054 Amarillo College of Hairdressing, Inc. v. Lopez
From: 5/11/17 Also #1
EH
Docket 1
- NONE LISTED -
Debtor(s):
Javier Lopez Represented By
Christopher Hewitt
Defendant(s):
Javier Lopez Pro Se
Joint Debtor(s):
Carmen Lopez Represented By Christopher Hewitt
Plaintiff(s):
Amarillo College of Hairdressing, Represented By
Eamon Jafari
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #4 EH
Docket 16
Summary of the Motion:
TENTATIVE
Trinity requests additional time to obtain an appraisal of the Property; and
Trinity asserts that the loan payoff statement provided by the Debtors as Exhibit "A" which sets forth the amount of the first mortgage is hearsay and alternatively, that it indicates there may have been a loan modification with the potential for loan forgiveness as to a portion of the loan principal
First, the Court is inclined to grant Trinity’s request for additional time. Separately, the Court overrules Trinity’s hearsay objection but finds that Trinity’s request for the Debtors to indicate whether any portion of the loan principal has been forgiven is reasonable.
APPEARANCES REQUIRED.
12:30 PM
Debtor(s):
Gilberto Herrera Represented By Todd L Turoci
Joint Debtor(s):
Monica Herrera Represented By Todd L Turoci
Movant(s):
Monica Herrera Represented By Todd L Turoci
Gilberto Herrera Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Gilberto Herrera Represented By Todd L Turoci
Joint Debtor(s):
Monica Herrera Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
$12,630, Expenses: $532.53 Also #6
EH
Docket 74
The Court is inclined to APPROVE the requested fees of $12,630 and the requested expenses of $532.53.
APPEARANCES WAIVED. Movant to lodge order within seven days. If opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Movant(s):
Charles W Daff (TR) Represented By Lynda T Bui
Melissa Davis Lowe Elyza P Eshaghi Brandon J Iskander
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #5 EH
Docket 78
6/22/17
Notice/Service
Local Rule 2016-(1)(c)(4)(A) requires thirty days notice of intent to file final report. Trustee provided twenty-eight days notice, and then set the hearing exactly twenty-one days after the filing of his final fee app. Aggregate notice period is therefore short by two days.
Local Rule 2016-(1)(c)(4)(B) requires professionals to file their fee application within twenty-one days of the filing of Trustee’s notice of intent. Trustee filed his fee application seven days late.
It is not clear whether Local Rule 2016 should be applicable to this application because it is really designed for the filing of a Trustee’s final report.
Background
This case was a Chapter 7 case that was converted to Chapter 13. The conversion order stated that both the chapter 7 trustee and his attorney were to file claims for administrative fees, subject to Debtor’s right to object. The filing of fee applications by Trustee and Trustee’s attorney followed.
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11 U.S.C. § 330(a)(3) (2005) provides factors to be considered in determining the reasonableness of requested compensation. The Court has reviewed the requested fees and expenses of Trustee and finds them to be generally reasonable. Furthermore, Debtor has declined to oppose the Trustee’s application, and the Court deems the absence of opposition to be consent to the relief requested pursuant to Local Rule 9013-1(h).
Legal Analysis
11 U.S.C. § 326(a), however, imposes a statutory maximum on a Trustee’s compensation in a Chapter 7 case. The statute states:
In a case under chapter 7 or 11, the court may allow reasonable compensation under section 330 of this title of the trustee for the trustee’s services, payable after the trustee renders such services, not to exceed 25 percent on the first $5,000 or less, 10 percent on any amount in excess of
$5,000 but not in excess of $50,000, 5 percent on any amount in excess of
$50,000 but not in excess of $1,000,000, and reasonable compensation not to exceed 3 percent of such moneys in excess of $1,000,000, upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but including holders of secured claims.
11 U.S.C. §326(a).
"Although the language of section 326(a) seems straightforward, it ‘becomes the source of controversy when a former Chapter 7 Trustee seeks compensation in a case that is converted to one under Chapter 13 prior to the disbursement of any monies by the trustee in the Chapter 7 case.’" In re Pivinski, 366 B.R. 285, 289 (Bankr. D. Del. 2007) (quoting In re Silvus, 329 B.R. 193, 207 (Bankr. E.D. Va. 2005). As the Court noted in Pivinski, there are at least six different interpretations of the operation of § 326(a) when a case is converted to Chapter 13. See id. ((1) quantum meruit; (2) multiple trustee theory; (3) no award permitted; (4) separate cases; (5) constructive disbursement theory; (6) awarding fees pursuant to § 105(a)); see also In re Philips, 507 B.R. 2, 5 (Bankr. N.D. Ga. 2014) ("The Code is silent regarding how to calculate this cap when a case has been converted, as opposed to a fully administered Chapter 7 case. This silence has led to a variety of irreconcilable reported court decisions, which
12:30 PM
are based on as many as six different discernible theories."); 329 B.R. at 206-13 (providing an in-depth analysis of each of the six different theories).
As noted by the case law split, and in the absence of any binding authority, the Court is presented with the following legal questions: Is the Court allowed to award compensation to a Trustee outside of the confines of § 326(a)? If such an award is permissible, what is the appropriate legal standard for the award of compensation in such a situation? If such an award is not permissible, does § 326(a) allow compensation in this situation? In order to answer the posited questions, it is necessary to survey and evaluate the different approaches adopted by bankruptcy courts.
Quantum Meruit
Courts that have adopted the quantum meruit standard generally cited policy considerations. To wit:
We adopt the reasoning of In re Berry and hold that the chapter 7 trustee should be compensated on a quantum meruit basis in a case that is not fully administered, through no fault of the trustee, where the trustee performs substantial services that result in discovery of assets for the benefit of creditors. Conversely, the court does not envision windfalls for the trustee merely because a debtor converts for reasons unrelated to action by the trustee. We are further convinced that the effect of this decision will be to discourage a debtor’s intentional concealment of assets and encourage a trustee’s diligent discovery of assets.
In re Moore, 235 B.R. 414, 416-17 (Bankr. W.D. Ky. 1999). The Moore court determined that the award should be "based on the reasonable value of the actual and necessary services rendered by the trustee" and that the burden was on the trustee to justify the requested fee. Id. at 417.
While In re Moore approvingly cited the reasoning of In re Berry, its holding is technically distinct. While In re Berry does sound in quantum meruit, its holding falls into the "multiple trustee" approach discussed in section III.B, infra. See generally 166 B.R. 932, 935 (Bankr. D. Or. 1994) ("The court agrees with other courts that have
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considered this issue, the trustee is entitled to compensation based upon the reasonable value of the actual and necessary services which were rendered by the trustee on a quantum meruit basis."). This distinction illustrates the problem with the approach adopted by In re Moore: while other courts have advanced a quasi- quantum meruit philosophy to the issue, their reasoning has been grounded in an alternative approach. In re Moore, on the other hand, states the following:
A literal application of section 326(a) would appear to provide that if no funds were disbursed by the trustee to creditors, there are no funds to which the percentage formula may be applied. Most bankruptcy courts addressing this question, however, decline to apply a literal reading of § 326(a) and restrict application of the section to fully administered cases only. Rather, where a case is converted or dismissed, several courts have authorized compensation to the trustee upon a showing that the trustee has provided substantial services which benefit the estate. One court denied the trustee compensation, but explained that the denial of fees was premised on the minimal services actually performed by the trustee.
The above reasoning indicates that In re Moore, the primary source of the quantum meruit approach in In re Silvus’s survey, did not intend to create a unique, distinct approach to the issue, as it did not advance any new legal theory or reasoning. In re Moore, furthermore, did not offer an explanation as to why quantum meruit would be uniquely available to a Chapter 7 trustee of a dismissed or converted case. This reasoning is critical, because the general consensus is that § 326(a) is not simply a guide, but a statutory maximum. See, e.g., In re Hance Meyer, Inc., 161 B.R. 839, 840 (Bankr. N.D. Cal. 1993) ("The court’s discretion ends at the maximum ceiling.") (citing In re Fin. Corp. of Am., 114 B.R. 221, 224 (B.A.P. 9th Cir. 1990); see also In re Wire Cloth Prods., Inc., 130 B.R. 798, 811 (Bankr. N.D. Ill. 1991) ("The maximum statutory fee is indeed a ceiling, not a floor."). Absent an explanation of why it is legally permissible to invoke quantum meruit despite the operation of § 326(a), the theory is not compelling.1 And the cases that have offered such an explanation fall into the different approaches outlined in section III.B, infra.2
Multiple Trustees, Multiple Cases, and Constructive Disbursement
12:30 PM
The three approaches that were referred to by In re Silvus as "multiple or composite trustee theory," "separate and distinct case theory," and "constructive disbursement," all share one common theme: the disbursements made to or by the Chapter 13 trustee should be attributed, at least to some extent, and, possibly, with some deduction, to the Chapter 7 trustee. The multiple trustee theory invokes § 326(c), which states:
(c) If more than one person serves as trustee in the case, the aggregate compensation of such persons for such service may not exceed the maximum compensation prescribed for a single trustee by subsection (a) or (b) of this section, as the case may be.
Thus, the court in In re Rodriguez, 240 B.R. 912 (Bankr. D. Colo. 1999) utilized this provision, attributed the disbursements made by the Chapter 13 trustee to the Chapter 7 trustee, and then subtracted the amount of compensation the Chapter 13 trustee would receive from the statutory calculation in § 326(a).
While it is true that § 326(c) simply applies to a case with multiple trustees, regardless of the chapter the case is proceeding under, application of the rule in converted cases is problematic. Section 326(c) states that the compensation cannot exceed the maximum "prescribed for a single trustee by subsection (a) or (b)." Technically, the request would be governed by § 326(b) if the case was, at the time under chapter 12 or 13, and governed by § 326(a), if the case was under chapter 7 or 11. Therefore, under this reading, the chapter 7 trustee would be eligible to receive the difference between the chapter 13 statutory cap, and the amount of compensation actually received by the chapter 13 trustee.
More importantly, section § 326(c) does not appear to be an independent source of awarding compensation. Its plain language serves to limit the amount of compensation trustees can receive in a single case, not provide an independent calculation for cases with multiple trustees. The chapter 7 trustee would still have to point to authority permitting the award of fees, and it is not clear that this interpretation resolves the inappropriateness of awarding fees under § 326(a) in this situation. Quite simply, this theory does not explain how any disbursements would be made "[i]n a case under chapter 7 or 11" as required by § 326(a).
The constructive disbursement approach also attributes disbursements made by the
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chapter 13 trustee to the chapter 7 trustee, but concludes that § 326(c) is inapplicable, and, therefore, no subtraction equivalent to the chapter 13 trustee’s compensation is warranted. See generally In re Hages, 252 B.R. 789 (Bankr. N.D. Cal. 2000). This approach is subject to the same concerns as the multiple trustee theory: it is not clear what would be the basis for the award. By its language, § 326(a) applies to "a case under chapter 7 or 11," and this is not such a case.
The final approach is the separate case theory. Under this theory, the funds turned over to the second trustee by the first trustee are inputted into the statutory calculation of § 326(a). Notably, this theory appears to have been developed in a case that was converted to chapter 7 from chapter 11. See In re Fin. Corp. of Am., 114 B.R. 221, 222 (B.A.P. 9th Cir. 1990). In both a chapter 7 case and a chapter 11 case, § 326(a) serves as the basis for trustee compensation. Here, however, the case has been converted to chapter 13, and, therefore, is no longer a "a case under chapter 7 or 11." Nevertheless, under this theory it could be argued that disbursements were made (or money turned over) in a case under chapter 7 or 11 (the disbursements by the chapter 7 trustee to the chapter 13).
Ultimately, the Court finds that the multiple trustee, and constructive disbursement theories lack compelling legal justification. Section 326(a) is applicable in a "case under chapter 7 or 11," yet these two approaches input disbursements made by a chapter 13 trustee in a chapter 13 case into the § 326(a) calculation. The plain language of the status indicates that it is § 326(b), not § 326(a), that is applicable to disbursements made in a chapter 13 case.
Nevertheless, the Court finds that the multiple case approaches is not subjected to the above problem and provides a plausible basis upon which to award fees. It can be reasonably argued that a chapter 7 trustee is disbursing (or turning over) funds to a party in interest (the chapter 13 trustee) at the time of conversion, and that, therefore, such funds can be used in the § 326(a) statutory calculation.
Strict Interpretation
Finally, the bankruptcy courts that have declined to adopt any of the approaches outlined above have simply concluded that the plain language of the statute prohibits
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compensation of a chapter 7 trustee in these circumstances. See In re Silvus, 329 B.R. 193, 214 (Bankr. E.D. Va. 2005) ("Upon consideration of the numerous theories discussed above, this Court concludes the more compelling position is that which precludes awarding compensation based upon the plain language of Section 326(a). This Court finds, as did the courts in Fischer, Woodworth, Murphy, Celano, and Meadows, that Congress has spoken clearly in Section 326(a), and thus, it would be inappropriate for this Court to look beyond the bounds of the statute to formulate a basis upon which to award Ruby compensation.").
Analysis
Here, the chapter 7 trustee has not made any argument regarding which standard the Court should apply, and does not otherwise indicate what mechanism allows for payment to a Chapter 7 trustee in this situation where the distribution contemplated by
§ 326(a) is not done.
Notwithstanding, fee descriptions for services for 2/10/17 to 4/11/17 appear vague or otherwise describe services that were or should have been performed by counsel.
Also, the Court inclined to reduced fees for the preparation of the form fee application to 0.6 hours. Therefore, subject to discussion as to an applicable legal basis to award trustee fees, the Court is inclined to grant the requested fees in the reduced amount of
$1485, and costs of $2.06.
APPEARANCES REQUIRED.
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Movant(s):
Charles W Daff (TR) Represented By Lynda T Bui
Melissa Davis Lowe Elyza P Eshaghi Brandon J Iskander
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 16
- NONE LISTED -
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling
Movant(s):
Semone Ramone Monroe Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 19
6/22/17
Background:
On February 13, 2017, Christopher and Theresa Murphy ("Debtors") filed a Chapter 13 voluntary petition. On March 21, 2017, the IRS filed a priority claim in the amount of $4,663 ("Claim 3"). On April 6, 2017, Debtors’ Chapter 13 plan was confirmed. On May 4, 2017, Debtors filed a notice of submission of 2016 tax returns to Chapter 13 Trustee. On May 16, 2017, Debtors filed an objection to Claim 3 on the basis that their tax delinquency had been cured.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing
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upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Claim 3 states that Debtors owed $4,663.40 in relation to their 2016 tax returns. Debtors do not dispute that they owed the amount stated on Claim 3 at the time that it was filed. Instead, Debtors’ declaration states that they filed their tax return on April 17, 2017, and that, therefore, the claim should be amended or withdrawn. While the motion argues that no tax is due on account of the 2016 returns, there is no evidence presented to support this argument.
Tentative Ruling
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The Court is inclined to OVERRULE the objection without prejudice.
APPEARANCES REQUIRED.
Debtor(s):
Ryan Christopher Murphy Represented By Jenny L Doling
Joint Debtor(s):
Theresa Marie Murphy Represented By Jenny L Doling
Movant(s):
Theresa Marie Murphy Represented By Jenny L Doling
Ryan Christopher Murphy Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Luis A Jovel Represented By
Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Robert P Guerrero Jr. Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Kristin Lynn Robles Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jose Carlos Pina Represented By Bryn C Deb
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Sam Venero Represented By
Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Hermelinda Diaz Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Darrell Glenn Brown Represented By Julie J Villalobos
Joint Debtor(s):
Susan Marie Brown Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Luis Chavez Pro Se
Joint Debtor(s):
Esperanza Chavez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Richard J Sarenana Jr Represented By Cynthia A Dunning
Joint Debtor(s):
Maria Sarenana Represented By Cynthia A Dunning
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #18.1 EH
Docket 0
- NONE LISTED -
Debtor(s):
Teresa A Salvail Represented By Julie J Villalobos
Joint Debtor(s):
Michael D Salvail Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: UNITED CATHOLICS FEDERAL CREDIT UNION
From: 6/20/17 Also #18
EH
Docket 15
- NONE LISTED -
Debtor(s):
Teresa A Salvail Represented By Julie J Villalobos
Joint Debtor(s):
Michael D Salvail Represented By Julie J Villalobos
Movant(s):
United Catholics Federal Credit Represented By Alana B Anaya
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
John Empey Represented By
Christopher Hewitt
Joint Debtor(s):
Madeleine Tappe Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Suzanne Berry Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Lopez Garcia Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Caesar A Rodriguez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Harris Miller Represented By
Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Robert Bruce Dunham Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Osbaldo Concencion Martinez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Rafael Chavez Perez Represented By Manfred Schroer
Joint Debtor(s):
Catalina Chavez Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Stephanie Lobato Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Tyra Bagby Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Esteban David Stremiz Represented By Robert J Spitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kaleo Mehia Roque Leopoldo Represented By Nicholas M Wajda
Joint Debtor(s):
Andrea Ann Leopoldo Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Christopher Grosey Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gerald E Miller Represented By Paul Y Lee
Joint Debtor(s):
Shirley Miller Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joshua Aguilar Represented By Paul Y Lee
Joint Debtor(s):
Cynthia Rodriguez Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Andre J Booker Represented By Paul Y Lee
Joint Debtor(s):
Carrie L Booker Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gabriel Valencia Jr. Represented By Paul Y Lee
Joint Debtor(s):
Maricela Valencia Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Alfredo G Castro Represented By James T Lillard
Joint Debtor(s):
Bibiana L Castro Represented By James T Lillard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 19
- NONE LISTED -
Debtor(s):
Lubna Shiraz Ahmed Represented By Joshua L Sternberg
Movant(s):
Lubna Shiraz Ahmed Represented By Joshua L Sternberg
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 59
- NONE LISTED -
Debtor(s):
Robert B Eppley Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 146
- NONE LISTED -
Debtor(s):
Josue Luna Represented By
Jenny L Doling Summer M Shaw
Joint Debtor(s):
Fabiola Luna Represented By
Jenny L Doling Summer M Shaw
Trustee(s):
John P Pringle (TR) Pro Se
12:31 PM
EH
Docket 118
- NONE LISTED -
Debtor(s):
Jimmie Lee Bracy Jr. Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 97
- NONE LISTED -
Debtor(s):
James Lange Represented By
Michael Smith
Joint Debtor(s):
Michelle Lange Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 94
- NONE LISTED -
Debtor(s):
Sortan Melvin Prior Sr. Represented By Jenny L Doling
Joint Debtor(s):
Janna Renee Prior Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 147
- NONE LISTED -
Debtor(s):
Michael Brian Goodrich Sr. Represented By Christopher J Langley
Joint Debtor(s):
Kimberly JoAnn Carter Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 64
- NONE LISTED -
Debtor(s):
Edgardo Aranda Represented By Paul Y Lee
Joint Debtor(s):
Kelley Aranda Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 59
- NONE LISTED -
Debtor(s):
Donald Leroy Woodruff Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 41
- NONE LISTED -
Debtor(s):
Natalie G Massie Represented By Kevin M Cortright
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 36
- NONE LISTED -
Debtor(s):
Timothy Wade Jones Represented By Norma Duenas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 44
- NONE LISTED -
Debtor(s):
Oscar Chavez Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 30
- NONE LISTED -
Debtor(s):
Cresencio Villamayor Irasusta III Represented By
Carey C Pickford
Joint Debtor(s):
Jennifer P Irasusta Represented By Carey C Pickford
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 33
- NONE LISTED -
Debtor(s):
Isaias Melo Represented By
Rebecca Tomilowitz
Joint Debtor(s):
Rosa Melo Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 21
- NONE LISTED -
Debtor(s):
Ana M. Oliver Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 26
- NONE LISTED -
Debtor(s):
Timothy Leonard Johnson Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 33
- NONE LISTED -
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 29
- NONE LISTED -
Debtor(s):
Joe Nathan Banks Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 31
- NONE LISTED -
Debtor(s):
Juana Santiago Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 20
- NONE LISTED -
Debtor(s):
Jose Liborio Avila Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 20
- NONE LISTED -
Debtor(s):
Sandra Lorena Parra Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 29
- NONE LISTED -
Debtor(s):
Allison Laurie Merrifield Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 19
- NONE LISTED -
Debtor(s):
Dennis Wiley Donahoo Represented By Todd L Turoci
Joint Debtor(s):
Catherine Lavern Fitch Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
Adv#: 6:09-01235 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
DOES 1 through 100, inclusive Pro Se
Empire Partners, Inc., a California Represented By
David Loughnot Jonathan A Loeb Jeffrey Rosenfeld
2:00 PM
Plaintiff(s):
RICHARD K. DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
2:00 PM
Adv#: 6:10-01319 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
01/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Paul Roman Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
O'Melveny & Myers, LLP Represented By Howard Steinberg
2:00 PM
P Sabin Willett
Peter T. Healy Represented By Howard Steinberg P Sabin Willett
Neil M Miller Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Larry Day Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Peter M Bransten John P Reitman Michael I Gottfried
Aleksandra Zimonjic Monica Rieder Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By
2:00 PM
Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
2:00 PM
Adv#: 6:10-01329 DIAMOND v. Empire Partners, Inc., a California Corporation et
(Defendant - Empire Partners, Inc) HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Previti Realty Fund, L.P. Represented By Jonathan A Loeb Jeffrey Rosenfeld
The James Previti Family Trust Represented By Jonathan A Loeb Jeffrey Rosenfeld
2:00 PM
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
10:00 AM
MOVANT: WESTLAKE FINANCIAL SERVICES
EH
Docket 113
Debtor(s):
Amir El-Jamil McNeely Represented By Steven A Alpert
Joint Debtor(s):
Veronica Guadalupe McNeely Represented By Steven A Alpert
Movant(s):
Westlake Financial Services Represented By Robert P Zahradka
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: BAYVIEW LOAN SERVICING LLC AS SERVICING AGENT FOR M&T BANK
From: 1/24/17, 4/11/17, 4/25/17 EH
Docket 162
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - DISBARRED - Steven L Bryson
Movant(s):
Bayview Loan Servicing, LLC as Represented By
Kristin A Zilberstein
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
From: 5/30/17 EH
Docket 98
Debtor(s):
Alfredo Manzo Arrieta Represented By Andy C Warshaw
Joint Debtor(s):
Mayte Hernandez- Arrieta Represented By Andy C Warshaw
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WILMINGTON SAVINGS FUND SOCIETY
From: 5/16/17 EH
Docket 39
Debtor(s):
Dexter Humphrey Represented By Michael J Hemming
Movant(s):
Wilmington Savings Fund Society, Represented By
Bonni S Mantovani Diana Torres-Brito Cassandra J Richey
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
EH
Docket 34
Debtor(s):
Carlos Gutierrez Represented By Patricia A Mireles
Joint Debtor(s):
Josefina Gutierrez Represented By Patricia A Mireles
Movant(s):
Wells Fargo Bank, N.A. Represented By
Kristin A Zilberstein
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICAN HONDA FINANCE CORPORATION
EH
Docket 26
Debtor(s):
Thong Huu Nguyen Represented By Yoon O Ham
Movant(s):
AMERICAN HONDA FINANCE Represented By
Vincent V Frounjian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
EH
Docket 27
Debtor(s):
John W Wells Represented By Daniel King
Movant(s):
U.S. BANK NATIONAL Represented By April Harriott Sean C Ferry
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 40
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST COMPANY
EH
Docket 19
Debtor(s):
Kayla Marie Rojas Represented By Kris Crawford
Movant(s):
DEUTSCHE BANK NATIONAL Represented By
Angie M Marth
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: WESCOM CREDIT UNION
EH
Docket 12
Debtor(s):
Leticia Olivares Represented By Paul Y Lee
Movant(s):
Wescom Credit Union Represented By Karel G Rocha
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 13
Debtor(s):
Cristian E Vargas Pro Se
Movant(s):
Toyota Motor Credit Corporation Represented By
Tyneia Merritt
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: FORD MOTOR CREDIT COMPANY LLC
EH
Docket 12
Debtor(s):
Billy Joe Woodson Represented By Patricia M Ashcraft
Joint Debtor(s):
Kimra Lyn Woodson Represented By Patricia M Ashcraft
Movant(s):
Ford Motor Credit Company LLC Represented By
Sheryl K Ith
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
BERNARDINO, CA 92407 . , Motion for Relief from Co-Debtor Stay MOVANT: WELLS FARGO BANK, N.A.
CASE DISMISSED 5/26/17
EH
Docket 12
Debtor(s):
Hermelinda Diaz Pro Se
Movant(s):
WELLS FARGO BANK, N.A. Represented By Jason C Kolbe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
26484 Highway #58, Barstow, CA 92311; 25494 Agate Rd., Barstow, CA 92311 Under 11 U.S.C. § 362 (with supporting declarations) (Real Property)
MOVANT: SAN BERNARDINO COUNTY TREASURER AND TAX COLLECTOR
From: 6/27/17 EH
Docket 10
Debtor(s):
Osbaldo Concencion Martinez Pro Se
Movant(s):
c/o Barry S. Glaser San Bernardino Represented By
Barry S Glaser
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ANDREW FONTI AND JANET R. FONTI
CASE DISMISSED 5/26/17
EH
Docket 16
Debtor(s):
Jane R Mary Engel Represented By Peter L Nisson
Movant(s):
Andrew Fonti, An Unmarried Man, Represented By
Andrew J Miller
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
Docket 266
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
United States Trustee (RS) Represented By Michael J Bujold
Abram Feuerstein esq Everett L Green
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
From: 11/8/16, 12/6/16, 1/10/17, 3/7/17,4/4/17, 4/25/17 EH
Docket 83
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01279 Allied Injury Management, Inc. v. One Stop Multi-Specialty Medical Group
From: 1/24/17, 3/7/17, 4/25/17 EH
Docket 1
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Nor Cal Pain Management Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
2:00 PM
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
From: 11/15/16, 12/6/16, 12/20/16, 2/28/17, 4/25/17
EH
Docket 1
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
2:00 PM
Sunkist Imaging Medical Center Pro Se
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
EH
Docket 65
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
Allied Injury Management, Inc. Represented By
2:00 PM
Alan W Forsley
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
EH
Docket 67
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
2:00 PM
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
EH
Docket 69
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
2:00 PM
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
EH
Docket 71
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
2:00 PM
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
EH
Docket 73
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
2:00 PM
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
From: 2/14/17 EH
Docket 4
Debtor(s):
TNC, Inc. Represented By
Stephen R Wade
11:00 AM
Docket 135
6/28/17
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 4,750.00 Trustee Expenses: $ 45.66
Attorney Fees: $ 16,960 Attorney Costs:$ 136.70
Accountant Fees:$ 750.00
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Manuel Edward Galvan Represented By Dina Farhat
Joint Debtor(s):
11:00 AM
Irma Galvan Represented By
Dina Farhat
Trustee(s):
Charles W Daff (TR) Represented By Reem J Bello
11:00 AM
Docket 23
6/28/17
No opposition has been filed.
Service was Proper in the circumstances
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 833.00 Trustee Expenses: $ 85.02
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Sylvia Estrada Represented By Steven A Alpert
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
Docket 18
6/28/17
No opposition has been filed.
Service was Proper in the circumstances
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,497.70 Trustee Expenses: $ 77.88
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Sylvia Guadalupe Esquerra Represented By Steven A Alpert
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
FROM: 5/3/17, 5/17/17, 5/31/17
EH
Docket 46
06/28/2017
BACKGROUND
On August 30, 2016 ("Petition Date"), Dispatch Transportation LLC ("Debtor") filed its petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee").
On April 6, 2017, USA Waste of California, Inc. ("USA Waste") filed its Motion for an Order Authorizing the Examination of Craig Johnson and the Issuance of Subpoenas Duces Tecum to Commodity Trucking Acquisition, LLC ("CTA") and Craig Johnson Pursuant to Fed.R. Bankr.P. 2004 ("Motion"). USA Waste brings its Motion on the basis that it believes that the Debtor’s case was filed in bad faith.
Specifically, it appears that USA Waste believes the Debtor’s asserts were transferred prepetition to CTA so that the Debtor could then file bankruptcy and discharge debts without having to liquidate its assets. In support, USA Waste asserts that CTA is run by the same managers, at the same location, with the same assets, and with representation of the same counsel as the Debtor.
The initially scheduled hearing was continued by stipulation of the parties and was subsequently continued by the Court to June 28, 2017. On May 3, 2017, oppositions to the Motion were filed by CTA and by Craig Johnson. A reply to the oppositions was filed on May 24, 2017.
11:00 AM
USA Waste asserts by its Motion that under the broad scope of FRBP 2004,
examination of Craig Johnson and subpoena of records in CTA’s and Craig Johnson’s possession is justified because these parties have access to information that USA Waste requires to evaluate the Debtor’s assets, liabilities, and prepetition activities in incurring the liabilities of the estate. (Motion at 3:25-28). Additionally, the initial Motion included a declaration from the Trustee indicating that he waived the Debtor’s attorney-client privilege as to communications between the Debtor and Craig Johnson for purposes of the requested examinations. (Daff Decl. ¶3).
In opposition to the Motion, CTA generally asserts that the Motion should be denied because: (1) the Motion is moot because the Trustee retracted the waiver of the Debtor’s attorney-client privilege with Mr. Johnson; (2) CTA obtained the Debtor’s assets through a "commercially reasonable" Article 9 sale; (3) the Motion is itself only an attempt by USA Waste to obtain privileged information via the bankruptcy process that it could not otherwise obtain and use in connection with currently stayed state court litigation; (4) USA Waste is hoping to obtain privileged information in preparation for the filing of suit against CTA. The Court’s Docket reflects that on May 3, 2017, the Trustee filed his Notice of Withdrawal of Waiver of Privilege. (Docket No. 59).
The Manning Pit dispute
In 2004, pursuant to a settlement agreement, the City of Irwindale was bound by a "Prioritization" provision which set forth the rules regarding which city quarries could be filled, when they could be filled, and by whom. In 2004, USA Waste obtained rights to fill a city quarry referred to by the parties as the "Arrow Pit". On or about 2007, the Debtor obtained a contract to fill a separate quarry – the "Manning Pit." A dispute subsequently arose about whether the Debtor’s contract and work violated the Prioritization provision.
The Article 9 Sale
CTA alleges that it acquired the Debtor’s assets via an Article 9 sale after the Debtor defaulted on debts owed to its first priority secured creditor, Comerica Bank. CTA asserts that Comerica effectuated a foreclosure sale on September 14, 2011 under Michigan law at which CTA was the buyer. CTA purchased the Debtor’s assets for $12 million, which included its equipment, trade names, business names, leases, contracts etc. CTA notes that the individuals who shared management or ownership interests in both the Debtor and CTA did so because they made capital contributions
11:00 AM
for such interests. In support of their assertion that CTA’s purchase of the Debtor’s assets was proper, CTA and Mr. Johnson point to the decision of the San Bernardino Superior Court in which a different party attempted to bring suit against CTA as an alleged alter ego of the Debtor, and in which the Superior Court found no alter ego liability. This Court, however, notes that the decision of the Superior Court may have no preclusive effect in this case.
The Basis for USA Waste’s claim against the Debtor
In 2013, USA Waste commenced a lawsuit against the Debtor for Intentional Interference with Contractual Relations and for Unfair Competition. Discover was conducted and a motion for summary judgment was filed by the Debtor which was denied by the trial court. The Superior Court scheduled trial for August 2016 but then trailed the trial to September 2016. The instant petition was filed on August 30, 2016
– staying USA Waste’s litigation against the Debtor.
DISCUSSION
Bankruptcy Rule 2004 is a broadly construed discovery device which permits any party in interest in a bankruptcy proceeding to move for a court order to examine any entity so long as the examination relates to "acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge." Fed.R.Bankr.P. 2004(b). The scope of inquiry permitted under a Rule 2004 examination is generally very broad and can "legitimately be in the nature of a ‘fishing expedition.’ " In re Wilcher, 56 B.R. 428, 433 (Bankr.N.D.Ill.1985). Such an examination, however, cannot be " ‘used for purposes of abuse or harassment’ and it ‘cannot stray into matters which are not relevant to the basic inquiry.’ " In re Table Talk, 51 B.R. 143, 145 (Bankr.D.Mass.1985) (quoting In re Mittco, Inc., 44 B.R. 35, 36 (Bankr.E.D.Wis.1984)). If the party to be examined makes a motion to quash a Rule 2004 subpoena, the examiner must show that there is good cause for taking the requested discovery. In re Wilcher, 56 B.R. at 434.
The Court now turns to its analysis of whether production and examination under Rule 2004 are warranted:
As to CTA, USA Waste specifically requests production of the following:
11:00 AM
Request 1
"… all data storage devices, including hard drives, containing information or documents concerning the Manning Pit, any former assets of the Debtor that were acquired by CTA, and/or the division of CTA referred to as "Dispatch Transportation" by CTA or CTA’s agents, employees or managers such as Kim Pugmire."
The Court disagrees with CTA’s objection that the requested documents do not relate to the administration of the bankruptcy estate. Specifically, the information regarding the Manning Pit is directly related to USA Waste’s claim in the Debtor’s bankruptcy. The remaining request appears to concern USA Waste’s contention that CTA and the Debtor colluded to shield assets from USA Waste and to prevent it from being able to establish its claim against the Debtor. On this point, based on the evidence in the record, it does not appear that the Superior Court’s prior adjudication of the Article 9 sale issues precludes USA Waste from potentially asserting alter ego claims against CTA, and its officers/managers or owners in connection with the Debtor’s bankruptcy case for the benefit of the estate’s creditors. However, the Court is inclined to limit the request to providing copies of the relevant documents rather than requiring provision of actual devices or hard drives.
As to Craig Johnson, USA Waste requests:
Request 1
All e-mails or other documents (excluding those documents which are part of the public record of proceedings) that you authored, transmitted, or received on behalf of Debtor concerning USA Waste of California, Inc. v. City of Irwindale, et al., Los Angeles Superior Court Case No. KC066276
Request 2
All documents for which Debtor invoked the attorney-client privilege in USA Waste of California, Inc. v. City of Irwindale, et al., Los Angeles Superior Court Case No. KC066276 as reflected in the Privilege Log attached hereto as Exhibit A.
Request 3
All documents concerning the Manning Pit.
Request 4
All documents concerning the division of CTA referred to as "Dispatch
11:00 AM
Transportation" by CTA or CTA’s agents, employees or managers such as Kim Pugmire.
As to Craig Johnson, the Court is unpersuaded that the Pugmire testimony constitutes a waiver of the attorney-client privilege. Hernandez v. Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010). Disclosing a privileged communication or raising a claim that requires disclosure of a protected communication results in waiver as to all other communications on the same subject. United States v. Nobles, 422 U.S. 225, 239-40, 95 S.Ct. 2160, 45 L.Ed.2d 141 (1975); Weil v. Inv./Indicators, Research & Mgmt., 647 F.2d 18, 24 (9th Cir.1981) ("[V]oluntary disclosure of the content of a privileged attorney communication constitutes waiver of the privilege as to all other such communications on the same subject."); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir.1992) ("Where a party raises a claim which in fairness requires disclosure of the protected communication, the privilege may be implicitly waived."). The Court, having reviewed Exhibit E of the Pugmire testimony, finds that Mr.
Pugmire was asked and frequently responded to general questions regarding who was representing the Debtor as to specific transactions, to which he frequently made reference to Mr. Johnson. However, it is not clear from the general questioning that Mr. Pugmire ever uttered a statement that would specifically waive the attorney-client privileges attached to communications with Mr. Johnson. Moreover, the rule regarding waiver as to disclosed communications is limited to "communications on the same subject." Nobles at 439-40. However, here, USA Waste’s examination requests are broad and include no limitations as to subject, or otherwise. At a minimum, to prevail USA Waste would need to point to each specific statement in the deposition testimony that it contends effectuates a privilege waiver and separately identify which subject is not protected by the privilege. Having failed to go through this exercise, the Court finds the general references to Mr. Johnson’s representation and to Mr. Pugmire’s general statements regarding his interactions with Mr. Johnson unpersuasive as a basis to conclude that there has been a waiver of the attorney-client privilege.
Based on the foregoing, the Court finds that USA Waste’s Motion must be denied as to all requests made to Mr. Johnson to the extent that the attorney-client privilege is asserted, so specifically as to requests 1 and 2. However, the Court agrees that the third and fourth requests generally request information regarding the Manning Pit and CTA’s "Dispatch Transportation" division, which appears relevant. Mr.
11:00 AM
Johnson is free to provide a privilege log in response.
TENTATIVE RULING
The Motion is GRANTED IN PART and DENIED IN PART.
GRANTED (but limited) as to USA Waste’s request to CTA for documents related to the Manning Pit, and to documents related to CTA’s purchase of the Debtor’s assets.
DENIED as to USA Waste’s 1st and 2nd requests to Craig Johnson, and GRANTED as to requests 3 and 4.
APPEARANCES REQUIRED.
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
11:00 AM
EH
Docket 29
6/28/17
This mattered was continued from May 31, 2017, for Debtor to properly serve Capital One pursuant to Fed. R. Bankr. P. Rule 7004(h). Debtor's proof of service for the amended motion indicates service at:
"Capital One Bank N.A., Attn:63001-0125 Address: 15000 Capital One Drive, Richmond, VA 23238"
The above does not satisfy the standards of Fed. R. Bankr. P. Rule 7004(h). APPEARANCES REQUIRED.
05/31/2017
BACKGROUND
On October 30, 2013 ("Petition Date"), Ronald and Alicia Stearns (collectively, "Debtors") filed their petition for chapter 7 relief. Among the assets of the estate is real property located at 7573 Honeysuckle Street in Fontana, CA 92336 (the "Property"). The Debtors received a discharge and the case was closed on February 11, 2014.
On January 10, 2017, the Court granted the Debtors’ request to reopen the case
11:00 AM
for the purpose of avoiding judgment liens recorded against the Property. On February 2, 2017, the Debtor filed motions to avoid the liens of Capital One Bank ("Capital One") and Merchants Financial Guardian ("Merchants") pursuant to 11 U.S.C. § 522 (f). At the hearing on the Debtors initial motions, the Court denied both motions due to various technical issues with the motions. The tentative ruling indicated as follows:
The Court is inclined to DENY the motion without prejudice for a variety of technical reasons. Primarily, the filing that is actually set for hearing is Docket No. 17, which is simply a "notice" that does not attach, contain, incorporate, or reference a motion. Second, the earlier motion filed by Debtors, Docket No. 16, contains no admissible evidence regarding the value of the first lien as of the petition date.
Third, the Court notes that Local Rule 4003-(2)(b)(1) prevents Debtors from bringing one motion to avoid two lines under 11 U.S.C. § 522(f). Fourth, the earlier motion contains multiple, material factual inconsistencies, including the amount of the claimed exemption and the fair market value of the property.
Tentative Ruling on Motion to Avoid Liens, March 29, 2017.
On April 21, 2017, the Debtors refiled their motions to avoid the liens of Capital One Bank and Merchants. On May 18, 2017, the Debtors withdrew their motion to avoid the lien of Merchants. The only motion currently pending is the motion to avoid the lien of Capital One Bank (the "Motion").
DISCUSSION
As a threshold matter, the Motion was not properly served on Capital One via FRBP 7004(h) which requires service on a FDIC insured entity via certified mail and to the attention of an officer at the address indicated for the institution on the FDIC website. The Debtors did not comply with any of these requirements for service.
Section 522(f)(1)(A) provides in relevant part: "the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled ... if such lien is
a judicial lien." 11 U.S.C. § 522(f)(1)(A) (emphasis supplied).
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Section 522(f)(2) prescribes a formula for calculating whether an exemption is impaired:
(2)(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of—
the lien;
all other liens on the property; and
the amount of the exemption that the debtor could claim if there were no liens on the property; exceeds the value that the debtor's interest in the property would have in the absence of any liens.
In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph
(A) with respect to other liens.
(C) This paragraph shall not apply with respect to a judgment arising out of a mortgage foreclosure.
11 U.S.C. § 522(f)(2) (emphasis supplied). That is, an exemption is impaired if the sum of all of liens and the exemption yields a total that is greater than the fair market value of the property. See In re Meyer, 373 B.R. 84, 89 (9th Cir. BAP 2007).
Here, the Debtors assert that the first lien on the Property is $173,433.90, that the Property is next encumbered by the lien of Merchants in the amount of
$48,351.02, and by the lien of Capital One in the amount of $3,928.15. The Debtors have asserted an exemption in the Property of $100,000. However, the Debtors Schedule C indicates that they have exempted $76,566.10 in the Property and have not sought to amend their schedules. Nevertheless, assuming the values are correct, the total of the liens and exemption is $302,279.17 which is greater than the fair market value of the Property of $270,000 as asserted by the appraisal obtained by the Debtors. These figures would indicate that the lien of Capital One impairs the exemption of the Debtors.
TENTATIVE RULING
Based on the foregoing, the Court is inclined CONTINUE the hearing on the Motion to June 28, 2017, at 11:00 a.m., for the Debtor to properly serve Capital One per FRBP 7004(h) with an amended Notice of Motion and Motion as indicated above.
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APPEARANCES WAIVED. Movant to file and serve the amended notice of motion and motion.
Debtor(s):
Ronald Leroy Stearns Represented By John F Mansour
Joint Debtor(s):
Alicia Gay Stearns Represented By John F Mansour
Movant(s):
Ronald Leroy Stearns Represented By John F Mansour
Trustee(s):
Lynda T. Bui (TR) Pro Se
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EH
Docket 107
- NONE LISTED -
Debtor(s):
Michael Sevilla Santos Represented By Jeffrey B Smith
Joint Debtor(s):
Maricar Domingo Santos Represented By Jeffrey B Smith
Movant(s):
Larry D Simons (TR) Represented By
Larry D Simons (TR) Wesley H Avery
Trustee(s):
Larry D Simons (TR) Represented By
Larry D Simons (TR) Wesley H Avery
11:00 AM
Also #6 EH
Docket 110
- NONE LISTED -
Debtor(s):
Michael Sevilla Santos Represented By Jeffrey B Smith
Joint Debtor(s):
Maricar Domingo Santos Represented By Jeffrey B Smith
Movant(s):
Larry D Simons (TR) Represented By
Larry D Simons (TR) Wesley H Avery
Trustee(s):
Larry D Simons (TR) Represented By
Larry D Simons (TR) Wesley H Avery
11:00 AM
EH
Docket 12
- NONE LISTED -
Debtor(s):
Modern Properties, LLC Represented By Robert L Firth
Movant(s):
Larry D Simons (TR) Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
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From: 3/1/17, 5/3/17, 6/14/17 Also #10 - #13
EH
Docket 440
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
Also #9 - #13 EH
Docket 318
PROCEDURAL BACKGROUND
On October 20, 2013, Douglas Jay Roger, MD, Inc., ("Debtor") filed a Chapter 7 voluntary petition. On October 20, 2015, Trustee filed two complaints. The first complaint (‘First Complaint") named OIC Medical Corp. ("OIC"), Liberty Orthopedic Corp. ("LOC"), and University Orthopaedic Group ("UOG") as defendants, and was for avoidance, recovery, and preservation of preferential and fraudulent transfers. The second complaint ("Second Complaint") named Douglas J. Roger, M.D., Inc. Defined Benefit Plan ("DJRI Benefit Plan") (OIC, LOC, UOG, and DJRI Benefit Plan, collectively, "Defendants") as defendant, and also was for avoidance, recovery, and preservation of preferential transfers.
On April 6, 2016, the Trustee filed two motions to approve compromise (collectively, the "Original Compromise Motions"), corresponding to the two complaints identified above. On April 18, 2016, Kajan Mather & Barish ("KMB") filed oppositions to the motions for compromise. On April 25, 2016, Revere Financial Corporation ("Revere") filed objections to the motions for compromise, joining the opposition of KMB. On May 4, 2016, Trustee filed replies to KMB’s oppositions and Revere’s objections. On May 9, 2016, KMB withdrew its opposition.
On May 11, 2016, a hearing was held on the matter, however, based on the representations of the parties, the hearing was continued. On May 25, 2016,
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Defendants filed joinders in the motions for compromise. The hearing was repeatedly continued to allow for discussions between Trustee and Revere.
On November 5, 2016, Defendants filed motions to enforce their respective settlement agreements with Trustee (collectively, the "Enforcement Motions"). Nevertheless, the Original Compromise Motions and the Enforcement Motions were again continued by stipulation.
On January 18, 2017, Revere filed oppositions to the motions to enforce, and Trustee joined in the oppositions. On January 19, 2017, KMB filed joinders to the motions to enforce.
On January 31, 2017, Revere and Trustee filed a joint motion to approve a settlement between Trustee and Revere (the "New Compromise Motion"). On February 1, 2017, hearings were held on the Original Compromise Motions and the Enforcement Motions. In light of the New Compromise Motion, the Court continued the matter.
On February 14, 2017, Bank of Southern California, N.A. ("BSC") filed an objection to the New Compromise Motion. On June 14, 2017, Defendants and KMB filed separate oppositions to the New Compromise Motion. On June 21, 2017, Revere filed a reply in support of the New Compromise Motion.
FACTUAL BACKGROUND
There are two distinct settlement motions under consideration: (1) the New Compromise Motion; and (2) the Original Compromise Motions (and the corresponding Enforcement Motions).
New Compromise Motions
The New Compromise Motion1 creates four categories of assets: (1) cash held by Trustee and in which Revere claims a security interest; (2) cash currently held by Revere, previously distributed by Trustee; (3) tax refunds; and (4) claims. Revere proposes to grant a carve-out of 100 percent of category one ($183,480.95) and
$43,493 in category two, totaling $226,973.95, in addition to a carve out of any tax refunds.
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In return, the settlement agreement provides that Trustee will agree to allow Revere a claim of $5,500,000.00, of which $4,000,000.00 will be treated as secured. Trustee also waives the right to challenge the validity or priority of Revere’s security interest, and abandons any remaining interest in Revere’s collateral. Revere is also granted the right to prosecute all claims owned by the bankruptcy estate that are not prosecuted by the Trustee or the contemplated liquidating trustee, and Revere is granted relief from stay to prosecute all such actions.
The settlement agreement contemplates the creation of a liquidating trust. As part of the creation of such a trust, the Trustee is to withdraw from all pending settlements for avoidance actions. Revere (or its nominee) will act as trustee of the liquidating trust.
The rights to pursue Debtor’s causes of action will be assigned to the liquidating trust, and Revere will have full discretion to determine which claims to pursue. Revere will cover the costs incurred by the liquidating trust. With some caveats, any proceeds recovered by the liquidating trust will be split 75/25 between Revere and the bankruptcy estate.
The settlement agreement also contains a clause that it is voidable if it not approved as is.
Original Compromise Motions
The Original Compromise Motions consist of two separate compromises: (1) a compromise with OIC, LOC, and UOG; and (2) a compromise with DJRI Benefit Plan. The first compromise contemplated Trustee dismissing adversary proceeding 6:15-1307 in return for $30,000. The second compromise contemplated Trustee dismissing adversary proceeding 6:15-1309 in return for $50,000.
DISCUSSION
Legal Standard for Approving Compromise
Rule 9019(a) authorizes the bankruptcy court to approve a compromise or settlement on the trustee's motion and after notice and a hearing. The bankruptcy court must
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consider all "factors relevant to a full and fair assessment of the wisdom of the proposed compromise." Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424, 88 S. Ct. 1157, 20 L. Ed. 2d 1 (1968). In
other words, the bankruptcy court must find that the settlement is "fair and equitable" in order to approve it. Martin v. Kane (In re A & C Props.), 784 F.2d 1377, 1381 (9th Cir. 1986).
In conducting this inquiry, the bankruptcy court must consider the following factors:
the probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises.
Id.
The bankruptcy court enjoys broad discretion in approving a compromise because it "is uniquely situated to consider the equities and reasonableness [of it] " United
States v. Alaska Nat'l Bank (In re Walsh Construction, Inc.), 669 F.2d 1325, 1328 (9th Cir. 1982). As stated in A & C Props.:
The purpose of a compromise agreement is to allow the trustee and the creditors to avoid the expenses and burdens associated with litigating sharply contested and dubious claims. The law favors compromise and not litigation for its own sake, and as long as the bankruptcy court amply considered the various factors that determined the reasonableness of the compromise, the court's decision must be affirmed.
Id. (citations omitted).
On the other hand, even though the bankruptcy court has wide latitude in approving compromises, its discretion is not completely unfettered. See Woodson v. Fireman's Fund Ins. Co. (In re Woodson), 839 F.2d 610, 620 (9th Cir. 1988). The trustee bears the burden of proving to the bankruptcy court that the settlement is fair and equitable
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and should be approved. In re A&C Props., 784 F.2d at 1382.
The Court shall first apply the A&C factors to the Original Compromise Motion in isolation.
The OIC, LOC, and UOG Compromise
The Probability of Success in the Underlying Litigation
The record is neutral as to the probability of success. In particular, the Trustee has identified the arguments being made by OIC, LOC and UOG in defense of the avoidance actions but has provided scant information with which to gauge the strength of the respect tive positions. This factor is neutral.
Difficulty of Collection
The Trustee’s Supplemental Declaration provides strong evidence underscoring the potential difficulty in collecting from OIC or LOC. In particular, the Trustee has determined that these entities are no longer going concerns and have no assets. This factor favors settlement.
Complexity, Cost, Inconvenience and Delay of Litigation
The difficulty in collection against OIC and LOC leaves UOG as the primary means for collection of any judgment. The action against UOG would require the Trustee to establish successor/alter ego liability. The Trustee concedes, however, that there is no evidence showing that any assets or customers were transferred to UOG from OIC, and UOG has indicated it acquired its contracts through a professional service.
Further, the Trustee indicated that many of the transfers originally alleged to have been recoverable are either duplicative, were paid out on behalf of the Debtor by OIC, or were not paid by the Debtor to OIC at all, such that the remaining amount of the approximately $1.1 million is approximately $600,000. Based on this information, the Trustee has demonstrated that the complexity and costs of litigation weigh in favor of settlement.
Interest of Creditors
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Based on the Trustee’s representation that the cost of litigation is likely to exceed any additional benefit to the Estate, the Trustee has established that settlement is in the best interests of creditors. This factor weighs in favor of settlement.
The DJRI Benefit Plan Compromise
The Probability of Success in the Underlying Litigation
The Trustee has provided evidence that success was predicated on a showing that DJRI Benefit Plan was an insider of the Debtor, and that DJRI Benefit Plan raised credible arguments to contest such a showing. This factor weighs in favor of settlement.
Difficulty of Collection
There are no specifics provided to indicate that collection would be particularly difficult. This factor is neutral.
Complexity, Cost, Inconvenience and Delay of Litigation
There is insufficient information provided to indicate that the litigation would be more complex, costly or inconvenient than what is customary. This factor is neutral.
Interest of Creditors
Based on the Trustee’s representation that DJRI Benefit Plan possesses strong arguments diminishing the probability of success for the Trustee, coupled with the certainty of the Estate receiving $50,000 for the benefit of the estate through this settlement, the settlement appears to be fair and equitable. This factor weighs in favor of settlement.
Motions to Enforce & the New Compromise
Defendants filed motions to enforce the settlement and requested that the court grant
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the motions to compromise. Defendants contend that the settlement agreement constitutes a valid contract, that the contract is valid unless the court rejects it, and that Revere’s involvement in the proceedings is for the purpose of harassment and to increase attorney’s fees. Revere responded by contending that the settlement agreement does not constitute a valid contract, that Trustee can sell the adversary, and that Trustee has a duty to consider higher bids. Additionally, Revere has essentially offered its own bid by filing the New Compromise Motion.
Regarding, Revere’s contention that Trustee has the ability to sell or assign an avoidance action to a creditor, the Courts findings that In re P.R.T.C., Inc., 177 F.3d 774, 781 (9th Cir. 1999) and In re Prof’l Inv. Props. of Am., 955 F.2d 623, 625 (9th Cir. 1992) support Revere’s contention that the avoidance actions can be assigned. The limitations arguably imposed by these line of cases, that the assignment(s) occur pursuant to a plan of reorganization, or when a creditor is pursing interests common to all creditors, does not bar assignment of the avoidance actions at issue, since the recovery of preferential or fraudulent transfers is an interest common to all creditors.
While Defendants raise a variety of arguments against the New Compromise Motion in their opposition, there is no contention that Trustee lacks the legal authority to transfer the avoidance action.
KMB has objected that the proposed assignment is legally prohibited, but its argument is largely inaccurate. Citing In re Lahjani, 325 B.R. 282, 285 (B.A.P. 9th Cir. 2005), KMB asserts that there are three requirements for such a sale, and then argues that two of those requirements have not been met. First, KMB argues that the sale must be for a sum certain. While KMB allots one page to a subsection on this argument, there is no authority justifying the assertion. While Lahjani stated that "trustee avoiding powers may be transferred for a sum certain," it did not impose such a requirement, and the case it cited with regards to the statement, In re P.R.T.C., Inc., 177 F.3d 781- 82, did not mention such a requirement. Id. Therefore, the Court declines to read this statement by Lahjani as imposing a requirement. Likewise, KMB argues that that the assignment must benefit the entire estate. While it is true that such an assignment must benefit the estate, this argument does not assist the Court’s analysis since if there is no benefit to the estate, the New Compromise Motion will clearly not be considered an "overbid."
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A more novel and complex issue is presented by the process that has led to the proposed assignment of the avoidance actions. Specifically, Trustee entered into a settlement with Defendants that would have resolved the actions, Defendants moved to enforce the actions, then Trustee entered into a second settlement, this time with Revere. To complicate matters further, the second settlement is much more expansive in the rights it affects.
First, as is noted by Defendants, the Court must approve the compromise of a claim before the agreement becomes enforceable. See Fed. R. Bankr. P. Rule 9019.
Nevertheless, there is case law that concludes Trustee does not have authority to unilaterally repudiate the settlement agreement. See, e.g., In re Seminole Walls & Ceilings Corp. 388 B.R. 386, 391-96 (Bankr. M.D. Fla. 2008) ("To the extent there is a split of authority, the Court finds the better-reasoned view is that the parties to a settlement agreement may not unilaterally repudiate it after approval of it has been sought pursuant to Rule 9019.") (collecting cases). The fact that Trustee cannot repudiate the settlement agreement does not mean that the Trustee must continue to actively support the agreement. See, e.g., In re Martin 91 F.3d 389, 394 (3rd Cir. 1996) ("The trustee may even opt not to argue in favor of the stipulation, as was done here, if she no longer believes the settlement to be in the best interest of the estate."). But the Court, nevertheless, has the authority to approve the settlement agreement over a trustee’s objection. See id. ("The trustee does not breach any term of the stipulation by [not supporting the agreement], for the bankruptcy court may nonetheless approve the settlement.").
As argued by Revere, however, the Court must consider preferable alternative offers, despite the Original Compromise Motions. Revere primarily cites to In re Mickey Thompson Entm’t Group, a case which stated:
We agree with the Third Circuit that the disposition by way of ‘compromise’ of a claim that is an asset of the estate is the equivalent of a sale of the intangible property represented by the claim, which transaction simultaneously implicates the ‘sale’ provisions under section 363 as implemented by Rule 6004 and the ‘compromise procedure of Rule 9019(a).
292 B.R. 415, 421 (B.A.P. 9th Cir. 2003). By analogizing the Original Compromise Motions to sale motions, Revere is arguing that the proposed compromise be
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compared to other bids, instead of merely being compared to continuation of the underlying litigation. See, e.g., id. at 421-22 ("When confronted with a motion to approve a settlement under Rule 9019(a), a bankruptcy court is obliged to consider, as part of the ‘fair and equitable’ analysis, whether any property of the estate that would be disposed of in connection with the settlement might draw a higher price through a competitive process and be the proper subject of a section 363 sale. The possibility
that someone else may be willing to pay a higher price triggers the prospect of an auction that could yield an even higher price."). Nevertheless, the Court must be able to ascertain that the New Compromise Motion offered by Revere actually constitutes an overbid.
Comparison of the Original Compromise & the New Compromise
The majority of the briefing has, directly or indirectly, related to whether Revere has, in fact, tendered an overbid. As the Court said towards the beginning of the most recent hearing on the matter, on February 1, 2017:
Those [the Original Compromise Motions] were done I want to say nine, ten months ago, and then the motion was filed maybe seven, eight months ago roughly, and there’s been all this delay, and then less than 24 hours ago we get a massive stack of a new settlement from the Trustee and Revere that I think everyone would agree is very much not apples to apples. We’re now apples to oranges.
My preference would be, I mean, so much of this is coming very late. My preference would be that really given the time that’s passed and this, we’ll call it speculative nature of that new settlement, which I did not digest other than a very quick review, and it’s certainly far more complex than what was initially proposed, was really just to open up the pending motions to overbidder, and the, I was involved the Mickey Thompson case. I do believe that 9019 is subject to a 363 overbidding. I think that’s the right result. I’m not saying that a trustee can never, or a party can never, counter a straight dollar bid with a different more complex bid, and that’s certainly in the Trustee’s discretion or largely in the Trustee’s discretion, but these circumstances are a little bit different. There’s been such a passage of time, and the new settlement is so complex and speculative related to what’s here, and as a backdrop against this,
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given the administrative expenses, I’m not comfortable that there’s going to be anything for anyone under any of these scenarios. So I feel the cleanest way is just to open up the pending settlement and if Revere believes they’re worth more, that’s fine. I understand the settlement is more expansive than that. The settlement can be revised to carve those out.
[Dkt. #454, p. 5-6]. In addition to the Court’s concern regarding the disparate nature of the New Compromise Motion compared to the Original Compromise Motions, the following concerns were among those raised at the hearing on February 1, 2017: (1) that the settlement agreement provided that it was voidable if modified by the Court; and (2) that the nature, extent, and priority of Revere’s lien, from which a carve-out was to be granted, were possibly subject to disputed. The Court later expressed its concerns to the parties regarding the operation of § 550 if Revere was successful in an avoidance action. The opposition of KMB and Defendants have largely questioned the value of Revere’s "overbid," and KMB has asserted that the Court does not have adequate information to compare the settlements.
Therefore, the Court must engage in the following two-step analysis: (1) does the New Compromise offer more value than the Original Compromise Motions; and (2) do concessions made to Revere in the New Compromise Motion sufficiently reduce the value provided by Revere as to prevent the New Compromise Motion from being an overbid.
There are also two secondary considerations that inform the Court’s deliberations. First, as noted by KMB, in making its determination, the Court must be presented with sufficient evidence to formulate an informed and intelligent opinion.
Nevertheless, as noted by Revere, the Court should not conduct a mini-trial on every disputed issue, for that would eliminate the utility of a settlement altogether.
Second, the Court is cognizant of the uniqueness of this situation. On one hand, the primary opposition to the New Compromise Motion comes from the Defendants, parties whose interest, if not exactly adverse to, are certainly not synonymous with the interests of the estate. On the other hand, if the New Compromise Motion provides a much greater benefit to the estate, as Revere contends, then it should have been relatively simple to bifurcate the New Compromise Motion to create two agreement:
(1) an overbid on the subject matter of the Original Compromise Motions; and (2) a
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settlement governing the remainder of the material in the New Compromise Motion. Yet, despite exhortations from the Court to that effect at the hearing on February 1, 2017, Revere has declined to adjust its position. This is even more concerning because the Court expressed skepticism regarding the characterization of the New Compromise Motion as an "overbid" at the hearing on February 1, 2017, then, later, expressed additional concerns that made the New Compromise Motion even less palatable, yet Revere has offered no clear response to the issues raised by the Court.
Returning to the two-step analysis identified above, the first consideration for the Court is to address the proposed Revere "carve-out." Importantly, if this "carve-out" was instead cash, the analysis today would be simpler. Therefore, the Court must consider why this distinction is important, and determine the consequences of the distinction. As noted in page 8 of Defendants’ opposition, there are two concerns in this respect: (1) whether Revere actually has a security interest in the carve-out funds; and (2) whether there is a senior security interest in those funds. Regarding the latter, page 7 of Revere’s reply appears to contain a warranty that if there is a senior secured interest, then Revere will provide funds to replace any value lost to the estate.2 This would appear to eliminate concerns regarding the priority of Revere’s security interest in the carve-out, if any. Regarding the former, a cursory review of Revere’s proof of claim (claim #11), establishes that Revere contends that it has a blanket lien on Debtor’s assets. The only remaining dispute would be whether the underlying security agreement is valid and enforceable against the estate. If it is, assuming the Court’s interpretation of Revere’s guarantee, outlined in footnote 1, is correct, it would appear that Revere has demonstrated it is offering more value than offered in the Original Compromise Motions.
But Revere is also requesting more in return. Specifically, not only would the avoidance actions underlying the Original Compromise Motions be assigned to a liquidating trust controlled by Revere, but all causes of action would be assigned. Specifically, the New Compromise Motion, at § 4.25, defines "liquidating trust assets" as:
all causes of action, claims, choses in action, and any rights of recovery whatsoever that the DJRI Estate now owns or owns in the future, except the tax attributes of DJRI.
The New Compromise Motion also states that the Trustee will allow Revere a
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$5,500,000 claim, of which $4,000,000 will be treated as secured. Additionally, the New Compromise Motion states that the Trustee will not contest the validity, perfection, and scope of the DJRI Security Agreement. Furthermore, the agreement provides that the Trustee grants Revere relief from stay to prosecute any claims of the bankruptcy estate, as well as Revere’s state-court action. Ultimately these three assets concessions are summarized as follows: (1) Revere’s claim is fixed at a certain amount; (2) all recovery rights of Trustee are assigned to a liquidating trust controlled by Revere; and (3) Revere has full freedom to prosecute any claims of the estate.
Regarding the fixing of Revere’s claim, Revere filed proof of claim number 11 which makes the contradictory statements that the amount of the claim is $2,935,429.17, that the secured claim is $4,768,638.29, and that the unsecured claim is $805,354.20.
While not objected to in the instant case, a similar and overlapping claim was filed in Debtor’s principal’s individual case, and is currently subject to a claim objection.
Trustee’s claim objection requested that the Court reduce the claim to $527,910, and hold an evidentiary hearing to determine how much of the claim is secured. While Trustee’s objection was withdrawn after reaching a resolution with Revere, the claim remains subject to dispute due to an objection filed by Debtor. While Debtor, or any other party, would appear to maintain the right to object to Revere’s claim, the New Compromise Motion, by its terms, appears to attempt to give Revere a blanket, first priority lien over all the estate’s assets by attempting to provide an adequate protection lien that relates back to 2007.
Second, regarding the prosecution of actions through the utilization of a liquidating trust, the open-ended nature of the settlement makes a valuation of such a right inherently speculative. The Court lacks sufficient evidence that would enable the formation of even a rough estimate.
Third, the blanket grant of relief from stay presents problems. For instance, the New Compromise Motion, at the first sentence of § III.A.3.d, states: "[t]he liquidating trustee has full discretion to decide which Liquidating Trust Assets to investigate, which Liquidating Trust Assets to advance litigation expenses/costs to pursue, and which Liquidating Trust Assets to liquidate." Then, the second clause of § III.B.8 states: "[t]he DJRI Trustee grants RFC relief from stay to prosecute all claims that the bankruptcy estate owns and that neither the Liquidating Trustee nor the DJRI Trustee choose to prosecute." These two statements, read in conjunction3, appear to indicate
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that Revere, in its unlimited discretion, would have the contractual right to decline to bring any actions through the liquidating trust, and then bring any action, in bankruptcy or state court, in its own name. In such a situation, the result would be that the Trustee agrees to receive $226,973.95 (all of which would likely go towards administrative claims, since, at the previous hearing, Trustee’s counsel stated its fees were already over $400,000) in return for essentially abdicating its role as Trustee, while Revere would, for all intents and purposes, own Debtor. Essentially, the result would be that Revere purchased Debtor from Trustee.
Ignoring the myriad potential problems with the above scenario, the situation illustrates the dilemma at issue here. Given the unwieldy administrative claims in this case, in order for there to be any distribution to unsecured creditors, Revere would have to recover, at a minimum, in excess of approximately $1,000,000. If such an amount were recovered, the New Compromise Motion would represent a great bargain for Revere, and Revere would easily recoup its cost. If such an amount is not recovered, then the unsecured creditors other than Revere will not be paid a penny, which reflects Revere’s apparent leverage over Trustee under the settlement. And, ultimately, the question becomes, what is being given up by Revere in the New Compromise Motion? A carve-out, representing approximately 5% of the collateral, based on a security agreement which is in dispute, a dispute the settlement attempts to close the door on.
While Revere, citing Lahijani, contends that the Court should estimate the value of each component of the New Compromise Motion, and that an "apples to oranges" overbid should be considered, the Court requires evidence upon which it can formulate an informed, intelligent estimate of the value of the different components. Here, the comprehensive and complicated nature of the settlement precludes such an estimate. While the Court acknowledges that it could attempt to evaluate an "apples to oranges" overbid, that is not what has been presented. Instead, the New Compromise Motion constitutes an "apples to kangaroos" overbid.
Finally, while Revere contends that deference to Trustee’s business judgment is necessary, the Court’s standard approach to settlement agreements is altered by the line of reasoning expressed in In re Seminole Walls & Ceilings Corp. 388 B.R. 386, 391-96 (Bankr. M.D. Fla. 2008). The Court concludes that, rather than simply deferring to Trustee’s business judgment, the Court must determine whether the New
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Compromise Motion constitutes an overbid compared to the Original Compromise Motions. And, on the record before the Court, such a determination is infeasible.
Nevertheless, as the Court expressed at the previous hearing, if the New Compromise Motion is so clearly more beneficial to the bankruptcy estate than the Original Compromise Motions, Revere should have no trouble bifurcating the agreement to produce an overbid, and a remainder agreement, the latter of which, in the absence of a pre-existing competing settlement, would be assessed under the default, general Fed.
R. Bankr. P. Rule 9019 standards. Therefore, the Court is inclined to schedule an auction to allow Revere to overbid on the adversary proceedings related to the Original Compromise Motions. While such an overbid need not necessarily come in the form of "apples to apples," "apples to kangaroos" will be subject to the same concerns repeatedly expressed by the Court.
TENTATIVE RULING
Subject to discussion from the parties, the Court is inclined to schedule an auction.
APPEARANCES REQUIRED.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By
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Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
Also #9 - #13 EH
Docket 320
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
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Also #9 - #13 EH
Docket 404
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
OIC Medical Corporation Represented By Summer M Shaw
LIBERTY ORTHOPEDIC Represented By Summer M Shaw
UNIVERSAL ORTHOPAEDIC Represented By Summer M Shaw
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
11:00 AM
D Edward Hays Franklin R Fraley Jr
11:00 AM
Also #9 - #12 EH
Docket 403
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Douglas J Roger, MD, Inc. Defined Represented By
Summer M Shaw
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
Adv#: 6:15-01304 Cisneros v. Kajan Mather & Barish, a professional corporation
A. Cisneros against Kajan Mather & Barish, a professional corporation, MATHER KUWADA, a limited liability partnership, MATHER LAW CORPORATION, a California corporation, LAW OFFICE OF KENNETH M. BARISH, Steven R. Mather, Kenneth M. Barish. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 1/13/16, 3/30/16, 4/6/16, 5/4/16, 5/25/16, 9/28/16, 11/2/16, 11/9/16, 12/14/16, 1/11/17, 5/17/17, 6/7/17
EH
Docket 1
12/14/2016
The instant Status Conference is CONTINUED to January 11, 2017, at 2:00 p.m., to be heard in conjunction with Defendants' Motion for Summary Judgment
APPEARANCES WAIVED.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
Steven R. Mather Pro Se
11:00 AM
Kenneth M. Barish Pro Se MATHER LAW CORPORATION, Represented By
Michael S Kogan
Kajan Mather & Barish, a Represented By Michael S Kogan
MATHER KUWADA, a limited Represented By
Michael S Kogan
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes Franklin R Fraley Jr Sue-Ann L Tran Jasmine W Wetherell
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
(Holding date)
MOVANT: JERRY WANG, STATE COURT RECEIVER
From: 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16, 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17, 6/14/17
Also #16 EH
Docket 423
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Movant(s):
Jerry Wang, Duly-Appointed State Represented By
Jeffrey K Garfinkle Anthony J Napolitano
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
(Holding date)
From: 10/1/14, 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 10/21/15, 11/18/15, 12/16/15, 1/13/16, 3/2/16, 5/4/16, 6/1/16, 9/28/16, 11/16/16,
2/1/17, 2/16/17, 5/3/17, 6/14/17
Also #15 EH
Docket 333
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
(Holding date)
From: 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17, 6/14/17
Also #18 EH
Docket 10
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Movant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
11:00 AM
Jerry Wang Represented By
Franklin R Fraley Jr Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
From: 11/26/14, 1/26/15, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16, 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17, 6/14/17
Also #17 EH
Docket 1
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
Jerry Wang Represented By
Franklin R Fraley Jr
11:00 AM
Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:17-01006 Pringle v. Qadir et al
From: 3/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Najlla Qadir Represented By
Batkhand Zoljargal
Marym Qadir Represented By
Batkhand Zoljargal
Walie A. Qadir Represented By Batkhand Zoljargal
Plaintiff(s):
John P. Pringle Represented By Carmela Pagay Todd A Frealy
2:00 PM
Trustee(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:15-01314 Simons v. The Law Office of Don C. Burns et al
From: 12/30/15, 2/10/16, 5/11/16, 6/8/16, 6/22/16, 10/19/16, 12/14/16, 2/15/17, 4/26/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Baleine LP Represented By
Summer M Shaw
Defendant(s):
Don C. Burns Pro Se
The Law Office of Don C. Burns Pro Se
Plaintiff(s):
Larry D. Simons Represented By Carmela Pagay
Trustee(s):
Larry D Simons (TR) Represented By
2:00 PM
Carmela Pagay Todd A Frealy
2:00 PM
Adv#: 6:17-01039 United States Trustee for the Central District of v. Quintero et al
From: 4/26/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Ricardo Horacio Quintero Pro Se
Defendant(s):
Araceli Cantu Pro Se
Ricardo Horacio Quintero Pro Se
Joint Debtor(s):
Araceli Cantu Pro Se
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Howard B Grobstein (TR) Pro Se
2:00 PM
Adv#: 6:16-01143 Simons v. Caffery Financial, inc. et al
From: 9/7/16, 12/7/16, 1/11/17, 2/15/17, 4/26/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Defendant(s):
Kim Caffery Pro Se
Caffery Family Trust Pro Se
Caffery Financial, inc. Pro Se
Joe G. Caffery Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Plaintiff(s):
Larry D Simons Represented By
2:00 PM
Trustee(s):
Sarah Cate Hays D Edward Hays
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
2:00 PM
Adv#: 6:15-01206 Speier v. Simmons et al
From: 9/23/15, 2/10/16, 5/25/16, 9/28/16, 11/16/16, 1/11/17, 3/29/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Hilary D Hill Represented By
Matthew D Resnik
Defendant(s):
Hilary D Hill Pro Se
David Schanhals Pro Se
Angela Simmons Pro Se
Plaintiff(s):
Steven M Speier Represented By Robert P Goe
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
Elizabeth A LaRocque
2:00 PM
EH
Docket 33
6/28/17
Discharge having been vacated June 13, 2017, parties to discuss conditions to be contained in conversion order.
APPEARANCES REQUIRED.
04/05/17
BACKGROUND
On August 30, 2016 ("Petition Date"), Efren Estrada ("Debtor"), filed his petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). On December 12, 2016, the Debtor received a chapter 7 discharge.
2:00 PM
On March 14, 2017 (or approximately 7 months after the Petition Date and
post-discharge), the Debtors filed their motion for conversion of their case to a case under chapter 13 ("Motion"). On March 22, 2017, the Trustee filed opposition to the Debtors’ Motion ("Opposition"). On March 29, 2017, the Debtors filed their reply ("Reply").
DISCUSSION
The Trustee argues that the Debtor’s Motion should be denied because it has been filed in bad faith and because the Debtor’s chapter 7 discharge precludes conversion pursuant to this Court’s holding in In re Santos, 561 B.R. 825, 829 (C.D. Cal. 2017).
In response, the Debtor asserts that he will propose a chapter 13 plan that would pay the creditors whose debts have presumably already been discharged in this case. The only basis advanced by the Debtor to support his contention that a Debtor can propose to pay already discharged debts in a post-discharge converted chapter 13 case is that a different Judge in the Central District permitted such conversion in another case known to Counsel for the Debtor. The Debtor, however, has not indicated the legal basis for this other court’s ruling and such ruling would not be binding on this Court. Separately, the Court notes that although not expressly discussed in the Memorandum Decision on Santos, the Debtors in that case had also proposed to pay creditors whose debts had already been discharged at 100% through a confirmed chapter 13 plan. However, the bare promise that such a plan will be proposed where the Debtor’s chapter 7 debts have already been discharged has no binding effect.
Having failed to distinguish Santos, the Court declines to reach the issues raised by the Trustee regarding alleged bad faith of the Debtor in failing to properly identify the nature of his interest in the Property.
TENTATIVE RULING
Based on the foregoing, and following the Santos holding, the Court finds that "cause"
2:00 PM
exists to deny the Debtor’s request for conversion because the Debtor has received the benefits of a chapter 7 discharge and now seeks to avoid the concomitant burden of allowing the Trustee to administer the Debtor’s assets for the benefit of creditors.
APPEARANCES REQUIRED.
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Movant(s):
Efren Diaz Estrada Represented By
W. Derek May
W. Derek May
W. Derek May
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brianna L Frazier Rika Kido
Ryan D ODea
12:30 PM
Docket 129
7/6/17
Dana Travis ("Applicant") substituted into the case at the time when Debtors were attempting to convert to Chapter 13 (on 1/31/17). The motion to convert was filed the same day, was opposed by the Chapter 7 trustee, and a hearing was set for March 1, 2017. The hearing was continued for Debtors to provide evidence of new employment that would enable a plan to be confirmed. Evidence was filed with the Court on March 7, 2017, and, after stipulation between Debtors and the Chapter 7 trustee, the case was converted to Chapter 13 on April 4, 2017.
On April 12, 2017, Debtors filed their Chapter 13 plan, and the plan was confirmed on May 22, 2017. On May 23, 2017, Applicant filed the instant fee application. On June 5, 2017, Trustee filed comments, taking no position on the application. On June 12, 2017, the Court set the matter for hearing.
11 U.S.C. § 330(a)(3) (2005) provides factors to be considered in determining the reasonableness of requested compensation.
First, the Court notes that Local Rule 3015-(1)(v)(5) and Local Rule 2016-(1) outline directions when filing a supplemental fee application. Here, Applicant has not filed an application that conforms with Local Rule 2016-(1), but has simply provided the Court with an itemized invoice and a cover sheet.
Second, the Court notes that adding up the itemized amounts (the final column) in the invoice produces a figure of $6,970, yet Applicant has requested $7,650.
Therefore, the Court will reduce fees by $680.
12:30 PM
Finally, the Court has reviewed the fee application and finds the fees to be generally reasonable and necessary. Nevertheless, the Court makes the following reductions:
a reduction of $500 for two entries that simply state "consultation clients" (dated 1/30 and 2/20). In the absence of further information, the Court finds the entries to be vague;
a reduction of $200 related to preparation of the motion to convert (entry dated 1/30). The Court has reviewed the motion, which was relatively straightforward, and finds 1.5 hours to be excessive;
a reduction of $180 corresponding to the time entries related to the continued hearing on the motion to convert (dated 4/5 and 4/6). At the time of these two time entries, the hearing had been vacated and, therefore, these entries are unreasonable and unclear.
The Court is inclined to APPROVE the application in the reduced amount of
$6,090.
APPEARANCES REQUIRED.
Debtor(s):
Jeffrey Fagin Represented By
Dana Travis
Joint Debtor(s):
Theresa Fagin Represented By Dana Travis
Movant(s):
Theresa Fagin Represented By Dana Travis
Jeffrey Fagin Represented By
Dana Travis
12:30 PM
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
EH
Docket 64
7/6/17
11 U.S.C. § 330(a)(3) (2005) provides factors to be considered in determining the reasonableness of requested compensation.
Wells Fargo Bank filed a motion for relief from stay (real property), seeking relief under § 362(d)(1) because Debtors were six months behind on their post- confirmation payments. Debtors filed a standard opposition, stating that they would cure or enter into an adequate protection agreement. The hearing was continued twice, and then the parties entered into an adequate protection agreement.
Trustee’s opposition is generic and does not identify any specific time entries which the Trustee believes are unreasonable or excessive. All of the entries are either for 0.1 or 0.2 hours, except for three entries regarding attendance at the two hearings and the filing of the opposition, all of which are either 0.3 or 0.35 hours. While there are a number of entries for 0.1 or 0.2 hours, the entries that relate to entering into an adequate protection payment appear reasonable.
There are also four entries, totaling 0.6 hours, which appear to reflect time Applicant spent helping the client make their monthly mortgage payments (on 4/11/17 and 5/15/17). The Court will reduce these entries by 0.3 hours, totaling
$118.50, because it is unclear why Applicant needed to consult with their client about the mortgage payments, and it seems unreasonable to bill the client $39.50 for transmitting the monthly mortgage payment.
12:30 PM
The Court is inclined to APPROVE the application in a reduced amount of
$1,087.25.
APPEARANCES REQUIRED.
Debtor(s):
Jesus Manuel Gomez Represented By Dana Travis
Joint Debtor(s):
Maria Gomez Represented By Dana Travis
Movant(s):
Maria Gomez Represented By Dana Travis
Jesus Manuel Gomez Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #4 EH
Docket 29
- NONE LISTED -
Debtor(s):
Noel Mallari Represented By
David L Nelson
Movant(s):
Noel Mallari Represented By
David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #3 EH
Docket 24
- NONE LISTED -
Debtor(s):
Noel Mallari Represented By
David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 34
7/6/17
Background:
On July 15, 2016, Anthony & Cynthia Parker ("Debtors") filed a Chapter 13 voluntary petition. On July 18, 2016, Cavalry SPV II, LLC ("Creditor") filed proof of claim #1, an unsecured claim in the amount of $1,209.03 ("Claim 1"). On September 1, 2016, Debtors’ Chapter 13 plan was confirmed. On November 18, 2016, Creditor filed proof of claim #10, an unsecured claim in the amount of $873.10 ("Claim 10").
On June 6, 2017, Debtors filed a claim objection to Claim 1 and Claim 10.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223
12:30 PM
F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
11 U.S.C. § 502(b)(1) states:
(b) Except as provided in subsections (e)(2), (f), (g), (h) and (i) of this section, if such objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim in lawful currency of the United States as
12:30 PM
of the date of the filing of the petition, and shall allow such claim in such amount, except to the extent that –
(1) such claim is unenforceable against the debtor and property of the debtor, under any agreement or applicable for a reason other than because such claim is contingent or unmatured.
Cal. Code Civ. P. § 337 provides a statute of limitations of four years for debts founded on written contracts, book accounts, accounts stated based upon account in writing, "balance of mutual, open and current account in writing," and rescission of written contract. Once the statute of limitations has passed, the claim is unenforceable.
Claim 1 and Claim 10 are both based on credit cards, and, therefore, fall within the scope of Cal Code Civ. P. § 337. The statement of account for Claim 1 states that the last payment was made on August 3, 2009, and that the account was charged off on March 12, 2010. The statement of account for Claim 10 states that the last payment was made on July 31, 2009, and that the account was charged off on March 3, 2010. No activity with regard to either claim occurred within the four years prior the filing of the bankruptcy petition, and, therefore, the statute of limitations has expired.
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-(1)(h).
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
12:30 PM
Debtor(s):
Anthony James Parker Represented By Michael E Clark Barry E Borowitz
Joint Debtor(s):
Cynthia Parker Represented By Michael E Clark Barry E Borowitz
Movant(s):
Cynthia Parker Represented By Michael E Clark Barry E Borowitz
Anthony James Parker Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #7 EH
Docket 57
BACKGROUND
On October 24, 2016, Patricia Morales ("Debtor") filed a Chapter 13 voluntary petition. On January 24, 2017, Debtor’s Chapter 13 plan was confirmed.
On April 3, 2017, Trustee’s motion to dismiss was granted after no opposition was properly filed. On April 6, 2017, Debtor filed a motion to vacate dismissal (the "First Motion"). Trustee filed his disapproval on April 10, 2017. On April 21, 2017, Debtor filed a late reply that was not served
The Court posted a tentative prior to the hearing on April 27, 2017, that outlined a variety of technical and substantive deficiencies, both legal and factual. At the hearing, Debtor’s counsel withdrew the motion. On May 5, 2017, Debtor filed a new motion to vacate dismissal (the "Second Motion").
12:30 PM
DISCUSSION
While the Court notes that Debtor appears to have made some attempt to remedy the deficiencies noted in the Court’s previous tentative ruling, the Second Motion still contains significant technical and substantive deficiencies, both legal and factual.
First of all, service of the Second Motion is improper. Debtor’s service list abruptly cuts off at the letter "L" (creditors listed in alphabetical order).
Second of all, the Second Motion was not calendared and noticed correctly. The motion was set on "regular notice" but Debtor only provided thirteen days notice of the hearing. This is especially concerning because the reason the case was dismissed was because Debtor’s opposition to the motion to dismiss was calendared incorrectly.
Third, the Second Motion contains the same general factual deficiencies as the First Motion. Once again, Debtor identifies her failure to file a responsive pleading to Trustee’s motion for dismiss as the act to which a 60(b) analysis applies. As the Court noted in its previous tentative, however, Debtor did file an opposition to that motion, but a hearing was not set because Debtor selected incorrect hearing information. Yet, Debtor has opted to include the same assertions in the Second Motion.
Fourth, the majority of Debtor’s motion discusses the payment history of Debtor, Debtor’s account of which was disputed by Trustee in his opposition to the First Motion. Once again, the exhibits included are not authenticated. Additionally, the Second Motion removes the declaration of Debtor. Instead, in its place, is a declaration of Debtor’s counsel, which is simply a verbatim copy of the motion, and otherwise lacks foundation and personal knowledge.
Fifth, while the Second Motion appears to make an attempt to remedy the legal
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deficiencies of the First Motion, that attempt is inadequate. While the Second Motion, unlike the First Motion, does identify the appropriate legal standard, it is still far from adequate. The motion appears to include two statements that could be characterized as legal, and that are relevant in this matter. The first sentence states: "[T]he court has the authority to grant the relief sought herein pursuant F.R.C.P. 60(b) States: (1) Mistake, inadvertence, surprise, or excusable neglect." The second statement, which occurs before the first, states: "Debtor respectfully requests the court to vacate dismissal and reinstate the bankruptcy case on the following grounds that the reason for her failure to file a responsive opposition to the motion to dismiss was excusable."
Regarding the first sentence, apart from the fact that it is clearly not a sentence, the motion contains no further discussion of the legal standard or how to apply 60(b) to the facts of this case. Regarding the second sentence, apart from the fact that it is grammatically defective, the Court notes, once again, that Debtor did file an opposition to Trustee’s motion to dismiss. The second sentence simply misrepresents the record and lacks credibility.
Debtor’s previous four filings in this case (the Second Motion, the First Motion and Debtor’s reply, and the opposition to Trustee’s motion to dismiss) contain numerous technical and substantive deficiencies, are far from legally adequate, and are factually inaccurate. Multiple filings were noticed incorrectly and multiple filings were served incorrectly. More importantly, despite the fact the Court posted a tentative that informed Debtor why the First Motion was inadequate, Debtor has, for the most part, repeated the deficiencies in the Second Motion. The two sentences outlined above appear to constitute the steps taken to respond to the Court’s tentative, and those two sentences are simply inadequate.
Tentative Ruling:
For the foregoing reasons, the Court is inclined to CONTINUE the hearing for movant to file/serve amended pleadings and to coincide with a hearing on an order to show cause why Movant’s counsel should not be sanctioned.
12:30 PM
APPEARANCES REQUIRED.
Debtor(s):
Patricia Morales Represented By Michael C Maddux
Movant(s):
Patricia Morales Represented By Michael C Maddux
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #6 EH
Docket 0
- NONE LISTED -
Debtor(s):
Patricia Morales Represented By Michael C Maddux
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Renard Louis Hamilton Represented By
D Justin Harelik
Joint Debtor(s):
Regina Elizabeth Hamilton Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Angel Benavidez Represented By William P Mullins
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
David B. Hertsgaard Represented By Timothy S Huyck
Trustee(s):
Arturo Cisneros (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Christina Hill Represented By Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Mark R. Smith Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Richard J Sarenana Jr Represented By Cynthia A Dunning
Joint Debtor(s):
Maria Sarenana Represented By Cynthia A Dunning
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Constantino Orea Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Michael Robert Tucker Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Lubna Shiraz Ahmed Represented By Joshua L Sternberg
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Benjamin John Ramos Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jane R Mary Engel Represented By Peter L Nisson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Elmer Arnold Tompkins Represented By Scott Kosner
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Christopher Ramirez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Douglas M Horbelt Represented By Gary J Holt
Joint Debtor(s):
Elizabeth R Horbelt Represented By Gary J Holt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Lashanda Moniek Shelton Represented By Lionel E Giron
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Willa Henderson Childress Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
David Loronzo Cheshier Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Enza Daniela Puma Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Tracy R. Franco Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Reginald McClure Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joseph Wesley Gordon Jr Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Chadwick Otieno Ochieng Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Candice Maria Borrego Represented By Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
William Thomas Winn Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Librada Salazar Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kimberly A. Miller Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Esther Martinez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 75
- NONE LISTED -
Debtor(s):
Gildardo R Herrera Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Stephanie D Herrera Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 57
- NONE LISTED -
Debtor(s):
Agnes Smith Represented By
James T Lillard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 53
- NONE LISTED -
Debtor(s):
William Meineke Represented By Todd B Becker
Joint Debtor(s):
Kathie Meineke Represented By Todd B Becker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
James Leonard Blow Jr. Represented By Jonathan D Doan
Joint Debtor(s):
Amanda Joyce Atkinson-Blow Represented By Jonathan D Doan
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 21
- NONE LISTED -
Debtor(s):
Ana M. Oliver Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 33
- NONE LISTED -
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 28
- NONE LISTED -
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 31
- NONE LISTED -
Debtor(s):
Juana Santiago Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
EH
Docket 87
July 11, 2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) based on post-petition failure to make payments. GRANT waiver of 4001(a)(3) stay and requests under ¶¶ 3 and 12.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Scott Ray Pena Represented By Chris A Mullen
Joint Debtor(s):
Adriana Pena Represented By
Chris A Mullen
Movant(s):
Wells Fargo Bank, N.A. Represented By
Kristin A Zilberstein
10:00 AM
Trustee(s):
Kelly M Raftery
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: WESTLAKE FINANCIAL SERVICES
From: 6/27/17 EH
Docket 113
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under
¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Amir El-Jamil McNeely Represented By Steven A Alpert
Joint Debtor(s):
Veronica Guadalupe McNeely Represented By Steven A Alpert
10:00 AM
Movant(s):
Westlake Financial Services Represented By Robert P Zahradka
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 112
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on Debtor’s failure to make required postpetition payments. GRANT waiver of 4001(a)(3) stay. GRANT relief under ¶2 and ¶3. DENY relief under ¶13 as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Blanca Estela Flores Represented By John F Brady Lisa H Robinson
Movant(s):
Wells Fargo Bank, N.A. Represented By Alexander K Lee
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
10:00 AM
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: BAYVIEW LOAN SERVICING LLC AS SERVICING AGENT FOR M&T BANK
From: 1/24/17, 4/11/17, 4/25/17, 6/27/17 EH
Docket 162
Tentative Ruling:
Service is Proper Opposition: Yes
Given the amount of equity as well as the Trustee’s pending adversary related to the property, the Court is inclined to CONTINUE the hearing on the motion.
APPEARANCES REQUIRED.
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - DISBARRED - Steven L Bryson
Movant(s):
Bayview Loan Servicing, LLC as Represented By
Kristin A Zilberstein
10:00 AM
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
From: 5/30/17, 6/11/17 EH
Docket 98
Service is Proper Opposition: Yes
Parties to advise Court regarding adequate protection discussions. APPEARANCES REQUIRED.
Debtor(s):
Alfredo Manzo Arrieta Represented By Andy C Warshaw
Joint Debtor(s):
Mayte Hernandez- Arrieta Represented By Andy C Warshaw
Movant(s):
Wells Fargo Bank, N.A. Represented By
10:00 AM
Trustee(s):
Darlene C Vigil
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WILMINGTON SAVINGS FUND SOCIETY
From: 5/16/17, 6/27/17 EH
Docket 39
05/16/2017
Service: Proper Opposition: Yes
The Debtor acknowledges the missed payments and asserts that he intends to take money from his 401k to bring the arrears current. The Debtor indicates he has $10,000 to pay towards the arrears now and is requesting an additional 45 days for cure the remainder.
APPEARANCES REQUIRED.
Debtor(s):
Dexter Humphrey Represented By Michael J Hemming
Movant(s):
Wilmington Savings Fund Society, Represented By
Bonni S Mantovani Diana Torres-Brito Cassandra J Richey
10:00 AM
Trustee(s):
Asya Landa
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 64
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on Debtor’s failure to make required postpetition payments. GRANT relief pursuant to ¶2, ¶3, ¶6 and ¶12.
GRANT waiver of 4001(a)(3) stay. DENY Relief under ¶13 as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Gracey Hunter Represented By Todd L Turoci
Movant(s):
NATIONSTAR MORTGAGE LLC Represented By
Erica T Loftis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
From: 6/27/17 EH
Docket 34
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT relief from the § 1301(a) stay. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3 and 12.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Carlos Gutierrez Represented By Patricia A Mireles
Joint Debtor(s):
Josefina Gutierrez Represented By Patricia A Mireles
10:00 AM
Movant(s):
Wells Fargo Bank, N.A. Represented By
Kristin A Zilberstein Kelly M Raftery Oneika White-Dovlo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CAPITAL ONE AUTO FINANCE, A DIVISION OF CAPITAL ONE N.A.
EH
Docket 31
July 11, 2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). DENY request for relief from the stay under § 362(d)(2) based on a lack of cause shown. GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Jeremy Joseph Salas Represented By Robert W Ripley
Joint Debtor(s):
Ronda-Sue Alice Marie Salas Represented By Robert W Ripley
Movant(s):
Capital One Auto Finance Represented By
10:00 AM
Trustee(s):
Marian Garza Bret D. Allen
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICAN HONDA FINANCE CORPORATION
From: 6/27/17 EH
Docket 26
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under
¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Thong Huu Nguyen Represented By Yoon O Ham
Movant(s):
AMERICAN HONDA FINANCE Represented By
Vincent V Frounjian
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: QUALITY ACCEPTANCE, LLC
EH
Docket 41
- NONE LISTED -
Debtor(s):
Ricky Antonio Scott Represented By Marc E Grossman
Joint Debtor(s):
Shemida Shiloni Scott Represented By Marc E Grossman
Movant(s):
Quality Acceptance, LLC Represented By Robert S Lampl
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
From: 6/27/17 EH
Docket 27
07/11/2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
John W Wells Represented By Daniel King
Movant(s):
U.S. BANK NATIONAL Represented By April Harriott Sean C Ferry
10:00 AM
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST COMPANY
From: 6/27/17
EH
Docket 19
7/11/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(4). Court finds that bankruptcy case was part of a scheme to hinder, delay and defraud creditors based on multiple bankruptcy filings and unauthorized transfers affecting this property. The Court makes no finding of specific bad faith as to the Debtor. GRANT waiver of 4001(a)(3) stay. GRANT pursuant to ¶ 3. DENIED as to § 362(d)(2) and ¶11(b) for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Kayla Marie Rojas Represented By Kris Crawford
10:00 AM
Movant(s):
DEUTSCHE BANK NATIONAL Represented By
Angie M Marth
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: MARTHA E GUERRERO AND EDUARDO E GUERRERO FROM: 4/25/17, 5/30/17
EH
Docket 11
Debtor’s opposition argues that the real estate contract is an executory contract that can be rejected in bankruptcy. While providing an applicable citation for that assertion, Debtor does not apply the legal standard to the facts of this case.
Nevertheless, it appears that Debtor’s characterization of the contract as "executory" may have merit. While Movant, in the motion, states that "all contingencies had been removed," and, in the reply, states that they "dutifully removed all their contractual contingencies," the state court complaint submitted to support their motion states, in paragraph 23: "Plaintiffs have fully performed all conditions, covenants, and promises required by them on their part to be performed in accordance with the terms and conditions of the contract, except the final payment for the purchase of the Property." (emphasis added). While Movants appear to have made the initial deposit into escrow, it does not appear that the final purchase price was tendered.
"[A]n ‘executory contract’ that can be rejected in bankruptcy is a contract on which performance remains due on both sides at the time of the bankruptcy petition." Matter of Newcomb, 744 F.2d 621, 624 (8th Cir. 1984); see also In re Texscan Corp., 976 F.2d 1269-1271-72 (9th Cir. 1992). In Newcomb, the Court held that when the funds had already been transferred into escrow, there was no executory contract – no material obligations remained on the part of the grantor. See id.
10:00 AM
In the Ninth Circuit, a real estate sales contract remains executory until the full purchase price is deposited into escrow by the purchaser. See In re Hertz, 536 B.R. 434, 439-41 (Bankr. C.D. Cal. 2015) (an extended discussion on when a purchase contract loses its executory nature).
Given that the real estate purchase contract may be an executory contract that shortly will be rejected by operation of law under 11 U.S.C. § 365(d)(1), and that Movants are seeking a state court order for specific performance under the contract, granting relief from stay would be improper because the state court proceedings would interfere with the bankruptcy court proceedings. Interference with the administration of the estate is the most important consideration when considering a motion for relief from stay to proceed with state court litigation. See In re Roger, 539 B.R. 837, 845 C.D. Cal. 2015) ("According to the court in Curtis, the most importance factor in determining whether to grant relief from the automatic stay to permit litigation against the debtor in another forum is the effect of such litigation on the administration of the estate. Even slight interference with the administration may be enough to preclude relief in the absence of a commensurate benefit."). Here, there is a possibility of significant interference with the bankruptcy estate.
Tentative Ruling:
For the foregoing reasons, the Court is inclined to DENY the motion. APPEARANCES REQUIRED.
Debtor(s):
AMANDO MORALES Represented By William D Gurney
Joint Debtor(s):
ALICIA MALDONADO JIMENEZ Represented By
William D Gurney
Movant(s):
Eduardo E. Guerrero Represented By
10:00 AM
Trustee(s):
Christopher J Langley
Charles W Daff (TR) Represented By Brandon J Iskander Lynda T Bui
10:00 AM
MOVANT: WESCOM CREDIT UNION
From: 6/27/17 EH
Docket 12
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Leticia Olivares Represented By Paul Y Lee
Movant(s):
Wescom Credit Union Represented By Karel G Rocha
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
From: 6/27/17 EH
Docket 13
7/11/2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Cristian E Vargas Pro Se
Movant(s):
Toyota Motor Credit Corporation Represented By
Tyneia Merritt
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST COMPANY
EH
Docket 10
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2) based on inadequate equity cushion of (-40.57%) and Debtor’s negative equity of (-$171,669.74). GRANT relief under ¶2. GRANT waiver of 4001(a)(3) stay. DENY relief under ¶13 as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
William Thomas Oglesby Represented By
H. Christopher Heritage
Movant(s):
DEUTSCHE BANK NATIONAL Represented By
Sean C Ferry
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: FORD MOTOR CREDIT COMPANY LLC
From: 6/27/17 EH
Docket 12
7/11/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Billy Joe Woodson Represented By Patricia M Ashcraft
Joint Debtor(s):
Kimra Lyn Woodson Represented By Patricia M Ashcraft
Movant(s):
Ford Motor Credit Company LLC Represented By
Sheryl K Ith
10:00 AM
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK, NA AS LEGAL TITLE TRUSTEE FOR TRUMAN 2016 SC6 TITLE TRUST
From: 6/20/17 EH
Docket 23
June 20, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Ryan Keith Richardson Represented By Ronald B Talkov
Joint Debtor(s):
Joyce Nanette Richardson Represented By Ronald B Talkov
10:00 AM
Movant(s):
U.S. BANK, NA AS LEGAL TITLE Represented By
Diane Weifenbach
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: FORD MOTOR CREDIT COMPANY LLC
EH
Docket 8
July 11, 2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Octavio N Harguindeguy Represented By Neil R Hedtke
Movant(s):
Ford Motor Credit Company LLC Represented By
Sheryl K Ith
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: WILMINGTON TRUST, NATIONAL ASSOCIATION
CASE DISMISSED 6/8/17
EH
Docket 15
- NONE LISTED -
Debtor(s):
Stephen Paul Gibson Pro Se
Movant(s):
Wilmington Trust, National Represented By Nichole Glowin
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK
From: 5/30/17, 6/20/17 EH
Docket 18
Service is Proper Opposition: None
While cause arguably exists to lift the stay, Movant to discuss the status of this motion given that Movant withdrew its bad faith objection to confirmation at Debtor’s confirmation hearing on May 18, 2017.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Menendez Represented By Sunita N Sood
Movant(s):
WELLS FARGO BANK, N.A. Represented By
Dane W Exnowski
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICAN HONDA FINANCE CORPORATION
EH
Docket 9
July 11, 2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Lucerito M Peralta Represented By Paul Y Lee
Movant(s):
AMERICAN HONDA FINANCE Represented By
Vincent V Frounjian
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: TD AUTO FINANCE LLC
EH
Docket 12
July 11, 2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on a lack of adequate protection. Equity cushion is below 20%. DENY request under §362(d)(2) based on lack of cause shown. There is equity in the Property. GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Jose Hernandez Jr. Represented By Christopher Hewitt
Movant(s):
TD Auto Finance LLC Represented By Sheryl K Ith
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
CASE DISMISSED 5/26/17
From: 6/27/17 EH
Docket 12
07/11/2017
Service: Improper Opposition: None
Once improper service is remedied, the tentative ruling is to GRANT relief from the stay under §§ 362(d)(1) and 362(d)(4) based on the following: Debtor has not paid mortgage for over two years, Movant is one of two creditors listed in case commencement documents, Debtor filed only a few case commencement documents and schedules, and the statement of financial affairs have not been filed. Additionally, the Debtor’s failure to file required documents resulted in dismissal of the case on May 26, 2017. Debtor has also filed two previous bankruptcies with respect to the property in 2016 which were dismissed. Based on the foregoing, the Court is inclined to GRANT relief pursuant to ¶2, ¶5, ¶7b, and ¶9b. Court is also inclined to GRANT relief that Movant may provide and enter into potential forbearance agreement; confirming that no stay is in effect pursuant to § 362(c)(4). GRANT waiver of 4001(a)
stay.
As reflected above, while the court is inclined to grant relief from stay, service was improper due to Movant’s failure to serve Debtor. Specifically, the Debtor’s address
10:00 AM
of record is 3865 Vermont St., San Bernardino, CA 92407, however, Movant served the Debtor at 865 Vermont St., San Bernardino, CA 92407. Based on the foregoing, the hearing will be continued to August 1, 2017, at 10:00 a.m.
APPEARANCES WAIVED. Movant to file and serve an amended Notice of Motion and Motion on the Debtor at the correct address no later than July 12, 2017.
Debtor(s):
Hermelinda Diaz Pro Se
Movant(s):
WELLS FARGO BANK, N.A. Represented By Jason C Kolbe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
CA 92347; 26484 Highway #58, Barstow, CA 92311; 25494 Agate Rd., Barstow, CA 92311 Under 11 U.S.C. § 362 (with supporting declarations) (Real Property)
MOVANT: SAN BERNARDINO COUNTY TREASURER AND TAX COLLECTOR
From: 6/27/17 EH
Docket 10
- NONE LISTED -
Debtor(s):
Osbaldo Concencion Martinez Pro Se
Movant(s):
c/o Barry S. Glaser San Bernardino Represented By
Barry S Glaser
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BMW BANK OF NORTH AMERICA
EH
Docket 21
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on an insufficient equity cushion. GRANT waiver of 4001(a)(3) stay. GRANT relief under ¶2.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Michelle Meredith Represented By Patricia M Ashcraft
Movant(s):
BMW Bank of North America Represented By Timothy J Silverman
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
MOVANT: ANDREW FONTI AND JANET R. FONTI
CASE DISMISSED 5/26/17
From: 6/27/17 EH
Docket 16
07/11/2017
Service: Proper Opposition: None
GRANT relief from the stay under §362(d)(1) based on (1) a lack of fire insurance required by contract and (2) unauthorized transfer to Debtor two days after filing for bankruptcy. GRANT relief from stay under 362(d)(4) based on multiple bankruptcies filed in order to avoid foreclosure and unauthorized transfer of an interest in the Property to Debtor without the consent of Movant. GRANT relief under ¶2, ¶8b, ¶9, and ¶10b. Relief DENIED under ¶11b for lack of cause shown. Relief under ¶13 is DENIED as moot. GRANT waiver of 4001(a)(3) stay.
APPEARANCES REQUIRED.
Debtor(s):
Jane R Mary Engel Represented By Peter L Nisson
10:00 AM
Movant(s):
Andrew Fonti, An Unmarried Man, Represented By
Andrew J Miller
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ROC III CA TERRACINA, LLC, MCDONNELL TERRACINA, LLC, KAPPE TERRACINA, LLC
EH
Docket 9
- NONE LISTED -
Debtor(s):
Efren Gutierrez Pro Se
Movant(s):
ROC III CA Terracina, LLC, Represented By Joseph Cruz
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: ROYAL PALMS APARTMENTS
EH
Docket 13
July 11, 2017
Service: Ok Opposition: Yes
The Debtor does not controvert the bases for relief from stay. She only requests that there be no lock out prior to September 1, 2017. Debtor further asserts that there was insufficient notice to her and that the Movant did not provide proof of service on the Debtor or Trustee. However, the Trustee receives notice via NEF which is noted on the Motion’s proof of service. Additionally, the Motion indicates that Debtor was served at 2568 Baseline St, Apt 109 in Highland, CA (the same address indicated by the Debtor on her petition). In fact, Movant served Debtor on June 20 (although the Motion was not filed until June 23) and thus provided nearly three weeks notice of the hearing, and the Court's procedures permit an unlawful detainer relief from stay motion to be filed with only 5 days notice. As such, notice was sufficient.
Absent further evidence, the Court is inclined to GRANT the Motion in its entirety.
APPEARANCES REQUIRED.
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Debtor(s):
Jeanne Southerland Pro Se
Movant(s):
Royal Palms Apartments Represented By Kevin H Mello
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: SUSAN DUYNSTEE
EH
Docket 13
The Debtor has provided sufficient evidence of a change in financial circumstances to warrant granting of the Motion. Service is sufficient and no opposition has been filed. Based on the foregoing, the Court is inclined to GRANT the motion and continue the stay as to all creditors.
APPEARANCES REQUIRED.
Debtor(s):
Susan E Duynstee Represented By Paul Y Lee
Movant(s):
Susan E Duynstee Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
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From: 3/7/17 Also #33 & #34 EH
Docket 630
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
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From: 3/7/17 Also #32 & #34 EH
Docket 630
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
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From: 3/7/17 Also #32 & #33 EH
Docket 630
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
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From: 6/7/16, 8/30/16, 11/1/16,3/7/17, 4/18/17, 4/25/17, 5/9/17
EH
Docket 4
- NONE LISTED -
Debtor(s):
Welch Management Corporation Represented By
Stephen R Wade
W. Derek May
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MOVANT: ROIC CALIFORNIA LLC
EH
Docket 60
The Court is inclined to GRANT relief pursuant to § 362(d)(1). GRANT requests under ¶¶ 2 and 6. GRANT request under ¶9 upon recording of a copy of this order or giving appropriate notice of its entry in compliance with applicable nonbankruptcy law. DENY requests under ¶ 3 and 7 for lack of cause shown. DENY alternative request for adequate protection as moot.
The case was converted to Chapter 7 after the motion was filed, however, so the hearing will need to be continued for service on Chapter 7 trustee.
APPERANCES REQUIRED.
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
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Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
ROIC California, LLC Represented By Robert C Thorn
Trustee(s):
Arturo Cisneros (TR) Pro Se
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Also #38 EH
Docket 266
BACKGROUND
On May 11, 2016, Debtor filed a Chapter 11 voluntary petition. Debtor operated a medical account receivable collection service. On November 30, 2016, a Chapter 11 trustee was appointed.
On June 2, 2017, UST filed a motion to dismiss the Chapter 11 case for failure to pay quarterly fees of either $9,750 or $6,825, which were delinquent as of May 1, 2017. On June 13, 2017, the Chapter 11 trustee filed opposition to the motion to dismiss.
DISCUSSION
11 U.S.C. § 1112(b) provides that a case may be dismissed or converted for cause. Section 1112(b)(4) enumerates certain examples of cause, including "failure to pay
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any fees or charges required under chapter 123 of title 28." 28 USC § 1930(a)(6) imposed the statutory fees for Chapter 11 cases. Therefore, cause exists to convert the case when Chapter 11 quarterly fees are not paid.
The Chapter 11 trustee states, however, that $6,000 of the past due fees were paid on June 12, 2017, and that the Chapter 11 trustee will pay the remaining balance.
TENTATIVE RULING
Chapter 11 trustee to inform the Court whether the Chapter 11 quarterly fees have been paid in full.
APPEARANCES REQUIRED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
United States Trustee (RS) Represented By Michael J Bujold
Abram Feuerstein esq Everett L Green
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
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From: 11/8/16, 12/6/16, 1/10/17, 3/7/17,4/4/17, 4/25/17, 6/27/17
Also #37 EH
Docket 83
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
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Adv#: 6:16-01279 Allied Injury Management, Inc. v. One Stop Multi-Specialty Medical Group
From: 1/24/17, 3/7/17, 4/25/17, 6/27/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Nor Cal Pain Management Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
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Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
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Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
From: 6/27/17 Also #41 - #45
EH
Docket 65
FACTUAL BACKGROUND:
Allied Injury Management, Inc. ("Debtor") provides billing and collection services to medical service providers, including Myelin Diagnostics and Dr. Silvia De La Llana, CEO of Myelin Diagnostics ("Defendants"). As part of the written business agreement ("Written Agreement") with Defendants, Debtor in the normal course of business opened a for-the- benefit-of account ("FBO Account") for Defendants in which Debtor would deposit the money collected ("Receivables"). Pursuant to the Written Agreement, Debtor is entitled to a monthly fixed fee of $12,800 and 45% of the monthly gross collection.
The Written Agreement has the following relevant clauses:
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Trustee alleges an oral agreement was entered into in which Debtor advanced the portion of the Receivables to which Defendant was entitled to and now Debtor is entitled to 100% of the receivables ("Oral Agreement").
On May 11, 2016, Debtor filed a Chapter 11 bankruptcy. As a result Debtor had to close all pre-bankruptcy petition FBO Accounts. Debtor requested documents from Defendants in order to open new FBO Accounts. Defendant failed to supply the requested documents. As a result Debtor was unable to open the FBO Account. Debtor was in possession of checks to be deposited into the FBO Account. Debtor was unable to deposit and distribute the receivables pursuant to the Written and Oral Agreement. Trustee now asserts that Debtor was able to open an FBO account for Defendants.
Debtor filed a Complaint for Interpleader and Declaratory Relief ("Complaint") on September 21, 2016. On October 27, 2016, the Court granted an order allowing Debtor to deposit $10,244.19 in the Court’s Registry for Defendants.
Defendants were to file an Answer by October 24, 2016. To date, Defendants have not filed an Answer. On November 4, 2016, Default was entered against Defendants. On May 25, 2017, Chapter 11 Trustee ("Trustee") filed this Motion for Default Judgment ("Motion") and served Defendants.
Trustee requests that the Court establish (1) "Parties rights and obligations are governed by the [Written Agreement and Oral Agreement]" (2) Payment structure under the [Written Agreement and the Oral Agreement] and (3) a judgment authorizing Debtor to open an account and deposit the funds.
In support of this Motion, Trustee has filed a Declaration by Ms. Tina Shoemaker, employee of Debtor affiliate Titanium Resource Company.
DISCUSSION:
Subject Matter Jurisdiction
A court has subject matter jurisdiction over "all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11" and may
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enter appropriate orders and judgments. 28 U.S.C. § 157. Core proceedings include any "matters concerning the administration of the estate." 28 U.S.C. § 157 (b)(2).
The matter before the Court is regarding a matter concerning the Debtor’s
Estate.
Default
"When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default." Fed. R. Civ. P. 55(a).
Here, Defendants were to file an Answer by October 24, 2016. Defendants have not made an appearance in this case. Default was entered against Defendants on November 4, 2016.
Default Judgment
A court may grant default judgment after an entry of default. Fed. R. Civ. P.
55. A Motion for Default Judgment must also satisfy Local Bankruptcy Rule 7055-1 by identifying the party against whom default was entered, the date of entry of default, by stating if the defaulting party is an infant or incompetent person, by stating if the defaulting party is on active duty in the armed forces, and by serving the motion on the defaulting party pursuant to Fed. R. Civ. P. 55(b)(2). LBR 7055-1.
Here, Defendants have not appeared in the case. Default was entered against Defendants on November 4, 2016. Motion for Default Judgement was filed on May 25, 2017. The Motion named Defendants, stated the date of entry of default, and stated Defendants are not infants, incompetent, or on active duty. Defendants were served with Motion for Default Judgment on May 25, 107.
A default judgment is not a right but rather the court has discretion to enter a default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir.1980). In exercising discretion the court may consider: (1) possibility of prejudice to the plaintiff, (2) merits of plaintiff’s substantive claims, (3) sufficiency of complaint, (4) sum of money at stake in action, (5) possibility of dispute concerning material facts, (6) whether defendants default was product of excusable neglect, (7) strong public policy favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir 1986).
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Possibility of prejudice to the Plaintiff
To determine whether there is prejudice to the plaintiff the court should look at whether the plaintiff’s ability to pursue his claim will be hindered by not granting a default judgment. Falk v. Allen, 739 F.2d 461, 462 (9th Cir. 1984).
Here, Trustee is unable to collect the money it has earned without declaratory relief. As a result the Trustee is unable to take possession of the money and administer the estate.
Debtor has successfully petitioned the Court to deposit the checks into the Court’s Registry. Trustee has not been able to recover the money earned by Debtor from collecting the Receivables and will not be able to recover until the Court orders release of the funds to the appropriate parties. Therefore, the possibility of prejudice to the Trustee is high and warrants default judgment.
Merits of plaintiff’s substantive claims and sufficiency of complaint
The general rule is that after default is entered, the factual allegations asserted in the complaint are taken as true, with the exception of facts regarding damages. Geddes v. United Fin. Grp.¸ 559 F.2d 557, 560 (9th Cir. 1977). A pleading must contain a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2).
"Under the second and third Eitel factors the Court must examine whether the Plaintiff has plead facts sufficient to establish and succeed upon its claims." Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1055 (N.D. Cal. 2010).
Declaratory Relief
A court "may declare the rights and other legal relations of any interested party seeking such declaration" when there is a case of actual controversy regarding a matter within its jurisdiction. 28 U.S.C. § 2201. Declaratory relief was created to protect defendants from adversarial threats of impending litigation by giving parties an opportunity to prevent potential damages. Societe de Conditionnement en Aluminium
Hunter Eng’g Co.,Inc., 655 F.2d 938, 943 (9th Cir. 1981)(citing Japan Gas Lighter Assoc. v. Ronson Corp., 257 F. Supp. 219, 237 (D.N.J 1966).
An actual controversy exists if "the facts alleged, under all the circumstances; show that there is a substantial controversy, between parties having adverse legal
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interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). Once the court has determined whether there is an actual controversy, the court must decide whether to exercise jurisdiction and grant declaratory relief. Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 668 (9th Cir. 2005).
Declaratory relief is appropriate if the judgment would "serve a useful purpose in clarifying and settling the legal relation in issue" and "terminate and afford relief from the uncertainty, insecurity and controversy giving rise to the proceeding." Eureka Fed. Sav. & Loan Ass'n v. Am. Cas. Co., 873 F.2d 229, 231 (9th Cir. 1989). Furthermore, the court should avoid needless determination of state law, discourage forum shopping, and avoid duplicate litigation. Gov’t Emp. Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1988).
Here, Trustee claims two controversies. The first is regarding the amount to be disbursed to each party from the Receivables collected by Debtor. The second controversy involves Defendants’ assertion "that they have done all they are required to do under the agreements" and Debtor’s assertion that "Defendants have failed to provide the necessary documents to open" the FBO Account.
When a plaintiff no longer wishes to or is no longer able to engage in the activity for which plaintiff seeks declaratory relief, no actual controversy exists. Gator.com Corp. v. L.L. Bean, Inc., 398 F.3d 1125, 1129 (9th Cir. 2005). Given that Trustee has successfully opened an FBO Account for Defendants, the second controversy alleged does not satisfy the actual controversy requirement and does not warrant declaratory relief.
Trustee alleges that an actual controversy has arisen regarding the portion of the Receivables due to each party. Trustee has provided a copy of the Written Agreement and evidence of an Oral Agreement modifying said Written Agreement. The agreements each provide a different distribution of the Receivables collected by Debtor. The Written Agreement awards only 45% to the Debtor, while the Oral Agreement would award 100%, a 55% difference. However, to satisfy the actual controversy requirement, a claim must present substantial controversy and also present sufficient immediacy and reality.
A substantial controversy is present when a substantial monetary amount will change hands and when a legal claim concededly worth at least that much will be foregone. Golden v. Cal. Emergency Physicians Med. Grp., 782 F.3d 1083, 1088- 1089 (9th Cir. 2015).
A claim may present sufficient immediacy and reality when adjudicating an
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issue would end the lawsuit and would make the money be paid in the present. Golden at 1088-1089. In Principal Life, the Court found sufficient immediacy and reality was present when a party suffered an inability to make reasonable business decisions due to an unresolved lease agreement dispute. Principal Life Ins. Co. at 669.
Trustee’s inability to dispose of the money earned by Debtor, currently deposited in the Court Registry appears to satisfy the "sufficient immediacy and reality" needed to order declaratory relief. Trustee is presently unable to pay itself the portion of the money Debtor has earned and cannot pay third parties. Similar to the plaintiff in Principal Life who could not make reasonable business decisions as a result of the dispute over the terms of the lease agreement, Trustee is unable to go on with daily business transactions due to the questions regarding the agreements. Trustee’s effort to reorganize is being hindered by Defendants’ failure to provide the documents requested in a timely manner so Trustee could open the FBO Account and by Defendants’ subsequent failure to respond to the present Complaint.
Furthermore, under 11 U.S.C. § 704 (a)(1), it is the Trustee’s duty to "close the estate as expeditiously as is compatible with the best interests of parties in interest." At this point the Trustee is unable to take possession of money which Debtor has earned and distribute the money among the parties in interest. Adjudicating this claim would allow for the money currently sitting in the Court Registry to be disbursed to the Trustee and subsequently to Debtor’s creditors. Depending on the courts determination of whether Debtor is entitled to 45% or 100%, Trustee is unable to access between $4,609.88 and $10,244.19. By adjudicating this issue the Trustee could take control of the money, distribute the funds, and close the estate.
The Court finds that an actual controversy does exist and must now determine if it will exercise its discretion, based on the standard set in Eureka, and award declaratory relief.
A useful purpose may be served when declaratory relief would solve "a complex and long-lasting dispute over critical aspects of the parties rights and responsibilities under the treaty." U.S. v. State of Wash., 759 F.2d 1353, 1364 (9th Cir. 1985). In Newcal Indus., Inc., declaratory relief was found to have a useful purpose because it established a right to recover. Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1057 (9th Cir. 2008). Declaratory relief may afford relief from uncertainty, insecurity and controversy when relief would settle uncertainty regarding the validity of a legal theory. Newcal Indus., Inc. at 1057.
Here, declaratory relief would serve a useful purpose in determining whether Debtor should be paid and the Trustee able to access money which may belong to the
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Debtor’s Estate in accordance with the Written Agreement or the Oral Agreement. While the dispute at hand is not presented as complex or long-lasting, the uncertainty regarding this agreement has had a negative effect on the Trustee’s ability to carry out his statutory duties. Currently the Receivables collected by Debtor are sitting in the Court Registry. Declaratory relief would establish the rights of Debtor and Defendants. By granting declaratory relief the Court will allow for the Receivables to be disbursed appropriately, thus allowing the Trustee to take possession of the funds.
The Court finds that declaratory relief would afford relief from uncertainty, insecurity, and controversy by determining whether the Oral Agreement alleged by Trustee or the Written Agreement should be the basis for distribution of the Receivables.
Based on the foregoing, declaratory relief is appropriate. The Court now turns to the Plaintiff’s claim that the Oral Agreement, and not the Written Agreement, should guide the distribution of the Receivables.
State Contract Law: Oral Modification of Written Agreement
A written contract may be modified by an executed oral agreement. Cal. Civ. Code § 1698 (b). An executed oral agreement will serve as a modification even if the original contract requires that all changes be approved in writing. Miller v. Brown, 136 Cal. App. 2d 763, 775 (1955). An oral modification to a written agreement must be proved by a preponderance of the evidence. Barrett v. Bank of Am., 183 Cal. App 3d 1362, 1371 (1980).
An executed contract is one which has been fully performed. Fannucchi & Limi Farms v. United Agri Prod., 414 F.3d 1075, 1080 (9th Cir. 2005). "To come within the provision permitting modification by an executed oral agreement the plaintiffs' evidence must be sufficient to establish all the elements of a contract and a contract which is capable of execution, at least unilaterally." Goodman v. Citizens Life & Cas. Ins. Co., 253 Cal. App. 2d 807, 817 (1967). Whether a written agreement has been modified by an executed oral agreement is a question of fact. Keeble v. Brown, 123 Cal. App. 2d 126, 132 (1954).
Here, Trustee presents the Written Agreement entered into by Debtor and Defendants. The Written Agreement states that Debtor will receive from Defendant monthly fixed fees totaling $12,800 plus an additional 45% of the monthly gross collection. The Written Agreement contains a clause stating that the written agreement may only be amended in writing.
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However, Trustee provides evidence that an Oral Agreement was entered into in which Debtor was to advance to Defendant the amount of Receivables to which Defendant was entitled. In turn Debtor would be entitled to 100% of the Receivables.
As set forth in Barrett¸ Trustee has failed to prove by a preponderance of the evidence that the Oral Agreement exists and that said agreement was executed in order to serve as a valid modification pursuant to Cal. Civ. Code § 1698. As evidence that the Oral Agreement exists Trustee provides a declaration from Titanium Resource Company employee, Ms. Tina Shoemaker. Titanium Resource Company is an affiliate of Debtor. Ms. Shoemaker asserts that she is aware that the Oral Agreement supersedes the Written Agreement because she spoke with Defendants "on this subject on multiple occasions…" Trustee asserts that Defendant was advanced the amount due to Defendant under the Oral Agreement. However, while an oral agreement may be enforceable even if the contract requires all changes to be in writing, Trustee failed to plead the allegation in the Complaint or provide evidence of the payment made to Defendant. As such, Trustee has not established the oral agreement was fully performed.
Sum of money at stake in action
Under this factor, "the court must consider the amount of money at stake in relation to the seriousness of Defendant's conduct." PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1176 (C.D. Cal. 2002). When plaintiff only seeks damages proportional to the breach of the contract, the amount of money at stake does not preclude default judgment. NewGen, LLC v. SafeCig, LLC¸ 840 F.3d 606, 617 (9th Cir. 2016). "Default judgment is disfavored where the sum of money at stake is too large or unreasonable in relation to defendants conduct." Vogel v. Rite Aid Corp., 992 F.Supp.2d 998, 1012 (C.D. Cal. 2014)(citing Truong Giang Corp. v Twinstar Tea Corp.¸ No. C 06-03594 JSW, 2007 WL 1545173, *12 (N.D. Cal. 2007).
Here, although the Trustee is seeking declaratory relief there is still money at stake. The Court’s declaration could result in a monetary award to the Trustee of anywhere between $4,609.88 and $10,244.19. This amount is what has been collected by the Debtor in Receivables for the Defendants. The proportionately minimal sum of money at stake weighs in favor of entry of default judgment.
Possibility of dispute concerning material facts
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The general rule is that after default is entered, all well-pleaded factual allegations are taken as true, with the exception of facts regarding damages. PepsiCo, Inc. at 1177.
Defendants’ were properly served and had a full opportunity to respond to the factual allegations asserted in the Complaint. Thus, default judgment may be appropriate.
Whether defendants’ default was product of excusable neglect
When a party is properly served and ignores the deadline to respond to the complaint there is no excusable neglect. NewGen, LLC v. SafeCig LLC, 840 F.3d 606, 616 (9th Cir. 2016).
Here, Defendants were properly served with the Complaint on September 30, 2016. Defendants were served with the Motion for Default Judgment on May 25, 2017. Defendants have had ample opportunity to be heard and has yet to make an appearance in the present case. Therefore, Defendants’ default is unlikely to be a result of excusable neglect.
Strong public policy favoring decisions on the merits
Generally default judgments are disfavored and a case should be decided on the merits. Eitel, 728 F.2d at1472. When the Defendant makes the termination of a case impossible or impracticable, default judgment is permitted. PepsiCo, Inc. at 1174.
Here, Defendants were properly served and have not made any appearance in the case. Defendants’ failure to make an appearance and failure to file any response or opposition weigh in favor of the entry of default judgment.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT Trustee’s Motion for Default Judgment. The Court finds that distribution of the Receivables should be in accordance with the Written Agreement.
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Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
Allied Injury Management, Inc. Represented By Alan W Forsley
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
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Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
Javier Torres From: 6/27/17 Also #40 - #45
EH
Docket 71
On May 11, 2016, Allied Injury Management, Inc. ("Debtor") filed a voluntary petition under Chapter 11 commencing the current bankruptcy case. On September 21, 2016, the Debtor commenced this adversary proceeding seeking interpleader and declaratory relief (the "Complaint") against Dr. Javier Torres (the "Defendant"). The clerk entered default on November 4, 2016. On November 30, 2016, the Court ordered the appointment of a Chapter 11 Trustee, David M. Goodrich, (the "Trustee") to assume control of the estate. The Trustee was appointed on December 7, 2016, and filed this motion for default judgment only on the declaratory relief claim on May 25, 2017 (the "Motion"). No opposition has been filed.
According to the Complaint, the Debtor’s business provided billing and collection services to medical providers pursuant to written and oral medical service agreements (collectively, "MSAs"). In this case, Debtor allegedly had an oral MSA with the Defendant to open a "for-the-benefit of account." The Debtor holds a security interest in and is the attorney-in-fact of this trust account, and it would deposit the Defendant’s receivables into the account either before or after subtracting its fee. The Debtor collected $7,063.73 in receivables. Debtor asserts that it has advanced an amount equal to the portion of the receivables to which the Defendant would be entitled and that the estate is entitled to 100% of these receivables per its verbal MSA
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with the Defendant. Upon commencing the bankruptcy case, Debtor had to close these accounts and open new accounts that comported with debtor-in-possession requirements imposed by the Trustee. The Debtor was unable to open an account for the Defendant because he did not provide the documentation required by the bank.
Meanwhile, the Debtor was still collecting receivables for these providers but could not deposit the checks. Therefore, the Debtor filed the Complaint to establish the estate’s rights and obligations under the MSAs notwithstanding its inability to open the required Trustee-approved bank accounts, and on October 10, 2016, filed a motion to deposit the collected checks with the Court’s registry pending the outcome of the Complaint in order to ensure that the checks did not expire. The Court approved the Court registry order, and now, the Trustee seeks a default judgment on the declaratory relief claim.
Service of process is governed by FRBP 7004(b)(1), which states that service must be made within the US by first class mail postage prepaid as follows:
Upon an individual other than an infant or incompetent, by mailing a copy of the summons and complaint to the individual’s dwelling house or usual place of abode or to the place where the individual regularly conducts a business or profession.
Notice was served on Dr. Javier Torres. Service is proper.
Under the Federal Rules of Civil Procedure ("FRCP") 55, a default judgment is granted after the entry of default. The rule states, "When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default."
As stated above, the clerk entered default on November 4, 2016, satisfying this requirement.
In addition, the relevant requirements of the Local Bankruptcy Rules ("LBR") 7055-1 must be satisfied: (A) identity of the party whom default was entered and the
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date of entry of default, (B) whether the defaulting party is an infant or incompetent person, (C) whether the individual defendant is currently on active duty, (D) when individual is debtor…, (E) that notice of the motion has been served on defaulting party, if required by FRCP 55(b)(2).
These requirements have all been met.
Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include:
the possibility of prejudice to the plaintiff, (b) the merits of the plaintiff’s substantive claim [declaratory relief in this case as governed by FRCP 57 and 28 U.S.C § 2201(a)], (c) the sufficiency of the complaint, (d) the sum of money at stake in the action, (e) the possibility of dispute concerning material facts, (f) whether the default was due to excusable neglect, and (g) the strong policy disfavoring decisions on the merits underlying the FRCP. (Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
The general rule is that upon default the factual allegations of the complaint, excepting those relating to the amount of damages, will be taken as true. TeleVideo Systems Inc.v. Heidenthal 826 F.2d 915, 917-18 (9th Cir. 1987); See also Geddes v. United Financial Group, 559 F.2d 557, 560 (9th Cir. 1977).
Further, a "default establishes the well-pleaded allegations of a complaint unless they are…contrary to facts judicially noticed or to uncontroverted material in the file. Facts that are not well pleaded include allegations that are ‘made indefinite or erroneous by other allegations in the same complaint, allegations which are contrary to facts of which the court will take judicial notice, or which are not susceptible of proof by legitimate evidence, or which are contrary to uncontroverted material in the file of the case.’" In Re McGee, 359 B.R. 764, 772 (9th Cir. BAP 2006). Ultimately,
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claims that are not well-pleaded, meaning they allege no basis for liability, cannot support a default judgment. Marshall v. Baggett, 616 F.3d 849, 854 (8th Cir. 2010); See also Alan Neuman Productions Inc. v. Albright, 862 F.2d 1388, 1292 (9th Cir. 1988). In addition, failure to allege a valid claim against the defendant is not cured by evidence presented at a default "prove-up" hearing. Alan Neuman Productions 862 F.2d at 1393.
In this case, the Trustee is seeking declaratory relief in order to establish the estate’s rights and obligations under the verbal MSA between Debtor and Defendant. Declaratory relief is governed by FRCP 57 and 28 U.S.C. § 2201(a), the Declaratory Judgment Act. There are two parts to achieving relief under the Declaratory Judgment Act.
First, the Trustee must demonstrate that it is entitled to relief by satisfying the elements of 28 U.S.C. § 2201(a). The Declaratory Judgment Act states, "In a case of actual controversy within its jurisdiction…any court of the US may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." Said case or controversy must refer to cases and controversies that are justiciable under Article III. American States Ins. Co v.
Kearns. 15 F.3d 142, 143 (9th Cir. 1994). To demonstrate that a case or controversy exists, "a declaratory judgment plaintiff must prove that the facts alleged, ‘under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’" (28 U.S.C 2201(a)). The issues presented must be "definite and concrete, not hypothetical or abstract." Thomas v. Anchorage Equal Rights Com’n, 220 F.3d 1134, 1139 (9th Cir. 2000). Where a dispute hangs on "future contingencies that may or may not occur," Clinton v. Acequia, Inc. 94 F.3d 568, 572 (9th Cir. 1996), it may be too "impermissibly speculative" to present a justiciable controversy. Portland Police Ass’n v. City of Portland, 658 F.2d1272, 1273 (9th Cir. 1981).
Sufficient immediacy is present when the value of an item, like a lease agreement, would be significantly diminished if the dispute were not promptly resolved by the courts, and any continued attempts to ascertain the value by the parties
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without declaratory relief would likely waste time and resources. Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 671-72 (9th Cir. 2005). However, if "adjudicating the question presented…will determine whether the lawsuit ends and the money is paid in the present," then sufficient immediacy and reality to warrant resolution is established. Golden v. California Emergency Physicians Medical Group, 782 F.3d 1083, 1088 (9th Cir. 2015). Immediacy is not present, however, when the "Plaintiffs appear to seek judicial declaration not as a preventative measure, but as a remedial measure to address previously alleged…claims." United Safeguard Distributors Asociation, Inc. v. Safeguard Business Systems, Inc., 145 F.3d 932 (C.D.Ca 2015).
Second, the court must determine that it is appropriate to exercise its discretion by weighing certain factors. By doing so, the court essentially "balances the concerns of judicial administration, comity and fairness." Chamberlain v. Allstate Ins. Co, 931 F.2d 1361, 1367 (9th Cir. 1991). The factors are as follows: (a) whether the declaratory action will settle all aspects of the controversy, (b) whether the declaratory action will serve a useful purpose in clarifying the legal relations at issue, (c) whether the declaratory action is being sought merely for the purposes of procedural fencing or to obtain a ‘res judicata’ advantage, (d) or whether the use of a declaratory action will result in entanglement between the federal and state court systems. (e) In addition, the district court might also consider the convenience of the parties, and (f) the availability and relative convenience of other remedies. American States Ins. Co v.
Kearns. 15 F.3d 142, 143 (9th Cir. 1994); See also Brillhart v. Excess Ins. Co., 316
U.S. 491, 62 S.Ct. 1173, 86 L.Ed 1620 (1942).
"Under California law, a binding oral contract may arise ‘when all the terms are definitely understood’ and agreed to by both parties." Errico v. Pacific Capital Bank, N.A., 753 F.Supp.2d 1034, 1045 (N.D.Ca 2010), quoting Khajavi v. Feather
River Anesthesia Medical Group, 84 Cal.App.4th 61,100 Cal.Rptr.2d 627 (Cal.App.3d Dist.2000).
When it comes to the requirements for declaratory relief under the first prong, the only evidence of a "substantial controversy, between parties having adverse legal interest, of sufficient immediacy and reality to warrant the issuance of a declaratory
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judgment" is shown in the Complaint stating that:
Defendants assert that they have done all they are required to do under the agreements and are entitled to a portion of the receivables. An actual controversy has arisen and now exists between Plaintiff and Defendants in that Plaintiff allege Defendants have failed to provide Plaintiff the necessary documents to open the Unopened accounts and regarding the amounts to be disbursed to Defendants. (Complaint 6:6-11).
In Aetna Life Ins. Co. of Hartford. Conn. v. Haworth, an actual controversy was found because once the plaintiff presented its claim, the defendant responded with "an equally definite claim that the alleged basic fact did not exist." Aetna Life Ins. Co. of Hartford. Conn. v. Haworth, 300 U.S. 227, 242 (1937). The Court decided to grant declaratory relief because "such dispute is manifestly susceptible of judicial determination." Id. It calls, not for an advisory opinion upon a hypothetical basis, but for an adjudication of present right upon established facts." Id. In this case, the Trustee asserts that the Defendant has failed to provide the necessary documentation as required by the MSA in order to open the account. However, Defendant asserts, according to the Complaint, that he has done all that is required under the MSA and is entitled to his receivables. These facts evidence a dispute that is not hypothetical or abstract. Rather, according to the Complaint, the controversy is real, ongoing, and relates to the legal rights of the parties to the receivables due under the MSA. Therefore, a substantial controversy is present.
SUFFICIENT IMMEDIACY
In the Complaint, the only evidence of sufficient immediacy was the assertion that the checks would expire if accounts were not opened immediately. This would allegedly prevent the estate from getting certain fees from the receivables, and the Trustee indicated that he would dismiss the Debtor’s case if the unopened accounts remained unopened. However, because the checks have been deposited with the Court’s registry and the bank account has now been opened in the Defendant’s name, as stated in the Motion, these allegations are no longer true.
Additionally, the Trustee is now in charge of this bankruptcy proceeding and adversary proceeding, so there is no longer a threat that the case will be dismissed by him. Therefore, there is no longer an immediacy based upon a fear that the checks will lose their value because they have all been deposited with the Court, a fact which
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could establish immediacy under the standard utilized by the Court in Principal Life Ins. Co. v. Robinson. Because these facts are no longer true and no other facts are alleged in the Complaint, there is no support for the entry of declaratory relief based on the Complaint because there is no other immediacy pleaded. Therefore, under the standard for pleading under In re McGee above, this is not well-pleaded.
However, the new cause for immediacy, although not explicitly claimed as such in the Motion, is that the Trustee cannot deliver Defendant’s share of the receivables because he has not received a judicial determination of the respective rights of Plaintiff and Defendant. (Motion 4:10-13). This is an issue because once money is deposited into the Court’s registry under 28 U.S.C. § 2041, a party cannot withdraw the money while the case is proceeding. According to 28 U.S.C. § 2042, money deposited with the court can only be removed by a court order to the rightful owner upon "full proof of the right thereto." (28 U.S.C. § 2042).
Under the sufficient immediacy standard utilized in Golden v. California Emergency Physicians Medical Group, sufficient immediacy is established if the granting of relief will end the lawsuit and ensure payment occurs in the present. Golden, 782 F.3d at 1088. According to the Complaint, this is exactly what a default judgment for declaratory relief in this case would do because once the default judgment is granted, the lawsuit would end and the Trustee would be able to collect the funds out of the Court’s registry. Therefore, a substantial controversy of sufficient immediacy is present in this case.
WEIGHING THE DISCRETIONARY FACTORS FOR DECLARATORY RELIEF
Once the elements of declaratory relief are established, the court weighs the following discretionary factors in order to determine if it should grant relief. The factors are as follows:
(a) whether the declaratory action will settle all aspects of the controversy, (b) whether the declaratory action will serve a useful purpose in clarifying the legal relations at issue, (c) whether the declaratory action is being sought merely for the purposes of procedural fencing or to obtain a ‘res judicata’ advantage, (d) or whether the use of a declaratory action will result in entanglement between the federal and state court systems. (e) In addition, the district court might also consider the convenience of the parties, and (f) the availability and relative convenience of other remedies. American States Ins.
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Co v. Kearns. 15 F.3d 142, 143 (9th Cir. 1994); See also Brillhart v. Excess Ins. Co., 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed 1620 (1942).
Because there is evidence of a controversy, granting declaratory relief will likely settle this controversy and serve a useful purpose in clarifying the legal relations at issue. This judgment would establish the rights and obligations of each party under the MSA. In addition, it is convenient to the Trustee to receive a judgment now because it will provide access to the money deposited in the Court’s registry after the time period for an appeal has passed. In re United Ins. Management, Inc., 14 F.3d 1380, 1386 (9th Cir. 1994) (A trustee "has a statutory obligation to ‘investigate the financial affairs of the debtor, collect and reduce to money the property of the estate and close such estate as expeditiously as is compatible with the best interests of parties in interest.’") The judgment also does not appear to be sought merely for the purpose of procedural fencing because neither the Trustee nor the Debtor are a party to an action that involves the legal issues sought to be determined by this judgment.
See Grand Trunk Western R. Co. v. Consolidated Rail Corp., 746 F.2d 323, 326 (6th Cir. 1984) (Holding that declaratory relief is not appropriate when it would interfere with state court litigation and is sought as a means to provide another arena for a race for res judicata). Therefore, these factors all weigh in favor of granting declaratory relief. Overall, the interests of judicial administration, comity, and fairness weigh in favor of GRANTING declaratory relief.
"The court does not have to presume the truth of any factual allegations related to the amount of damages." (TeleVideo Sys. Inc v. Heidenthal, 826 F.2d 915).
Further, According to FRCP 55, the amount of damages must be shown by affidavit.
Here, the amount of damages is supported by a declaration by Tina Shoemaker ("Shoemaker"), an employee of the Debtor, of the details of the oral MSA, which stipulates that the Trustee is entitled to $7,063.73, which also happens to be 100% of the receivables, because the Debtor has already advanced to the Defendant an amount
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equal to the portion of the receivables to which Defendant would be entitled.
There is the possibility of prejudice to the Trustee because without a judgment; he will be delayed from receiving and being able to distribute a portion of the bankruptcy estate. Further, the Trustee "has a statutory obligation to ‘investigate the financial affairs of the debtor, collect and reduce to money the property of the estate and close such estate as expeditiously as is compatible with the best interests of parties in interest.’" In re United Ins. Management, Inc., 14 F.3d at 1386. Therefore, the possibility of prejudice to the Trustee in expeditiously closing the bankruptcy estate weighs in favor of granting a default judgment. In addition, there is no evidence that the entry of default was due to excusable neglect on the part of the Defendant.
Therefore, this factor also weighs in favor of GRANTING default judgment.
Service: Proper
The Court will GRANT default judgment as the following discretionary factors weigh in favor of granting relief: (1) the possibility of prejudice to the plaintiff, (2) the merits of the plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the amount of damages and (5) whether the default was due to excusable neglect.
APPEARANCES REQUIRED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
2:00 PM
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
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Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
From: 6/27/17 Also #40 - #45
EH
Docket 73
On May 11, 2016, Allied Injury Management, Inc. ("Debtor") filed a voluntary petition under Chapter 11 commencing the current bankruptcy case. On September 21, 2016, the Debtor commenced this adversary proceeding seeking interpleader and declaratory relief (the "Complaint") against Shoreline Medical Inc. (the "Defendant"). The clerk entered default on November 4, 2016. On November 30, 2016, the Court ordered the appointment of a Chapter 11 Trustee, David M. Goodrich, (the "Trustee") to assume control of the estate. The Trustee was appointed on December 7, 2016, and filed this motion for default judgment only on the declaratory relief claim on May 25, 2017 (the "Motion"). No opposition has been filed.
According to the Complaint, the Debtor’s business provided billing and collection services to medical providers pursuant to written and oral medical service agreements (collectively, "MSAs"). In this case, Debtor allegedly had an oral MSA with the Defendant to open a "for-the-benefit of account." The Debtor holds a security interest in and is the attorney-in-fact of this trust account, and it would deposit the Defendant’s receivables into the account either before or after subtracting its fee. The Debtor collected $2,400 in receivables. Debtor asserts it is entitled to 50% of these receivables per its verbal MSA with the Defendant. Upon commencing the bankruptcy case, Debtor had to close these accounts and open new accounts that comported with
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debtor-in-possession requirements imposed by the Trustee. The Debtor was unable to open an account for the Defendant because it did not provide the documentation required by the bank. Meanwhile, the Debtor was still collecting receivables for these providers but could not deposit the checks. Therefore, the Debtor filed the Complaint to establish the estate’s rights and obligations under the MSAs notwithstanding its inability to open the required Trustee-approved bank accounts, and on October 10, 2016, filed a motion to deposit the collected checks with the Court’s registry pending the outcome of the Complaint in order to ensure that the checks did not expire. The Court approved the Court registry order, and now, the Trustee seeks a default judgment on the declaratory relief claim.
Service of process is governed by FRBP 7004(b)(3), which states that service must be made within the US by first class mail postage prepaid as follows:
Upon a domestic or foreign corporation or upon a partnership or other unincorporated association, by mailing a copy of the summons and complaint to the attention of an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defendant..
Notice was served on Shoreline Medical and upon Randolph Taylor who is the agent for service of process according to the California Secretary of State records.
Service is proper.
Under the Federal Rules of Civil Procedure ("FRCP") 55, a default judgment is granted after the entry of default. The rule states, "When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default."
As stated above, the clerk entered default on November 4, 2016, satisfying this requirement.
In addition, the relevant requirements of the Local Bankruptcy Rules ("LBR")
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7055-1 must be satisfied: (A) identity of the party whom default was entered and the date of entry of default, (B) whether the defaulting party is an infant or incompetent person, (C) whether the individual defendant is currently on active duty, (D) when individual is debtor…, (E) that notice of the motion has been served on defaulting party, if required by FRCP 55(b)(2).
These requirements have all been met.
Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include:
the possibility of prejudice to the plaintiff, (b) the merits of the plaintiff’s substantive claim [declaratory relief in this case as governed by FRCP 57 and 28 U.S.C § 2201(a)], (c) the sufficiency of the complaint, (d) the sum of money at stake in the action, (e) the possibility of dispute concerning material facts, (f) whether the default was due to excusable neglect, and (g) the strong policy disfavoring decisions on the merits underlying the FRCP. (Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
The general rule is that upon default the factual allegations of the complaint, excepting those relating to the amount of damages, will be taken as true. TeleVideo Systems Inc.v. Heidenthal 826 F.2d 915, 917-18 (9th Cir. 1987); See also Geddes v. United Financial Group, 559 F.2d 557, 560 (9th Cir. 1977).
Further, a "default establishes the well-pleaded allegations of a complaint unless they are…contrary to facts judicially noticed or to uncontroverted material in the file. Facts that are not well pleaded include allegations that are ‘made indefinite or erroneous by other allegations in the same complaint, allegations which are contrary to facts of which the court will take judicial notice, or which are not susceptible of proof by legitimate evidence, or which are contrary to uncontroverted material in the file of the case.’" In Re McGee, 359 B.R. 764, 772 (9th Cir. BAP 2006). Ultimately,
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claims that are not well-pleaded, meaning they allege no basis for liability, cannot support a default judgment. Marshall v. Baggett, 616 F.3d 849, 854 (8th Cir. 2010); See also Alan Neuman Productions Inc. v. Albright, 862 F.2d 1388, 1292 (9th Cir. 1988). In addition, failure to allege a valid claim against the defendant is not cured by evidence presented at a default "prove-up" hearing. Alan Neuman Productions 862 F.2d at 1393.
In this case, the Trustee is seeking declaratory relief in order to establish the estate’s rights and obligations under the verbal MSA between Debtor and Defendant. Declaratory relief is governed by FRCP 57 and 28 U.S.C. § 2201(a), the Declaratory Judgment Act. There are two parts to achieving relief under the Declaratory Judgment Act.
First, the plaintiff must demonstrate that it is entitled to relief by satisfying the elements of 28 U.S.C. § 2201(a). The Declaratory Judgment Act states, "In a case of actual controversy within its jurisdiction…any court of the US may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." Said case or controversy must refer to cases and controversies that are justiciable under Article III. American States Ins. Co v.
Kearns. 15 F.3d 142, 143 (9th Cir. 1994). To demonstrate that a case or controversy exists, "a declaratory judgment plaintiff must prove that the facts alleged, ‘under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’" (28 U.S.C 2201(a)). The issues presented must be "definite and concrete, not hypothetical or abstract." Thomas v. Anchorage Equal Rights Com’n, 220 F.3d 1134, 1139 (9th Cir. 2000). Where a dispute hangs on "future contingencies that may or may not occur," Clinton v. Acequia, Inc. 94 F.3d 568, 572 (9th Cir. 1996), it may be too "impermissibly speculative" to present a justiciable controversy. Portland Police Ass’n v. City of Portland, 658 F.2d1272, 1273 (9th Cir. 1981).
Sufficient immediacy is present when the value of an item, like a lease agreement, would be significantly diminished if the dispute were not promptly resolved by the courts, and any continued attempts to ascertain the value by the parties
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without declaratory relief would likely waste time and resources. Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 671-72 (9th Cir. 2005). However, if "adjudicating the question presented…will determine whether the lawsuit ends and the money is paid in the present," then sufficient immediacy and reality to warrant resolution is established. Golden v. California Emergency Physicians Medical Group, 782 F.3d 1083, 1088 (9th Cir. 2015). Immediacy is not present, however, when the "Plaintiffs appear to seek judicial declaration not as a preventative measure, but as a remedial measure to address previously alleged…claims." United Safeguard Distributors Asociation, Inc. v. Safeguard Business Systems, Inc., 145 F.3d 932 (C.D.Ca 2015).
Second, the court must determine that it is appropriate to exercise its discretion by weighing certain factors. By doing so, the court essentially "balances the concerns of judicial administration, comity and fairness." Chamberlain v. Allstate Ins. Co, 931 F.2d 1361, 1367 (9th Cir. 1991). The factors are as follows: (a) whether the declaratory action will settle all aspects of the controversy, (b) whether the declaratory action will serve a useful purpose in clarifying the legal relations at issue, (c) whether the declaratory action is being sought merely for the purposes of procedural fencing or to obtain a ‘res judicata’ advantage, (d) or whether the use of a declaratory action will result in entanglement between the federal and state court systems. (e) In addition, the district court might also consider the convenience of the parties, and (f) the availability and relative convenience of other remedies. American States Ins. Co v.
Kearns. 15 F.3d 142, 143 (9th Cir. 1994); See also Brillhart v. Excess Ins. Co., 316
U.S. 491, 62 S.Ct. 1173, 86 L.Ed 1620 (1942).
"Under California law, a binding oral contract may arise ‘when all the terms are definitely understood’ and agreed to by both parties." Errico v. Pacific Capital Bank, N.A., 753 F.Supp.2d 1034, 1045 (N.D.Ca 2010), quoting Khajavi v. Feather
River Anesthesia Medical Group, 84 Cal.App.4th 61,100 Cal.Rptr.2d 627 (Cal.App.3d Dist.2000).
When it comes to the requirements for declaratory relief under the first prong, the only evidence of a "substantial controversy, between parties having adverse legal interest, of sufficient immediacy and reality to warrant the issuance of a declaratory
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judgment" is shown in the Complaint stating that:
Defendants assert that they have done all they are required to do under the agreements and are entitled to a portion of the receivables. An actual controversy has arisen and now exists between Plaintiff and Defendants in that Plaintiff allege Defendants have failed to provide Plaintiff the necessary documents to open the Unopened accounts and regarding the amounts to be disbursed to Defendants. (Complaint 6:6-11).
In Aetna Life Ins. Co. of Hartford. Conn. v. Haworth, an actual controversy was found because once the plaintiff presented its claim, the defendant responded with "an equally definite claim that the alleged basic fact did not exist." Aetna Life Ins. Co. of Hartford. Conn. v. Haworth, 300 U.S. 227, 242 (1937). The Court decided to grant declaratory relief because "such dispute is manifestly susceptible of judicial determination." Id. It calls, not for an advisory opinion upon a hypothetical basis, but for an adjudication of present right upon established facts." Id. In this case, the Trustee asserts that the Defendant has failed to provide the necessary documentation as required by the MSA in order to open the account. However, Defendant asserts, according to the Complaint, that it has done all that is required under the MSA and is entitled to its receivables. These facts evidence a dispute that is not hypothetical or abstract. Rather, according to the Complaint, the controversy is real, ongoing, and relates to the legal rights of the parties to the receivables due under the MSA. Therefore, a substantial controversy is present.
SUFFICIENT IMMEDIACY
In the Complaint, the only evidence of sufficient immediacy was the assertion that the checks would expire if accounts were not opened immediately. This would allegedly prevent the estate from getting certain fees from the receivables, and the Trustee indicated that he would dismiss the Debtor’s case if the unopened accounts remained unopened. However, because the checks have been deposited with the Court’s registry and the bank account has now been opened in the Defendant CEO’s name, as stated in the Motion, these allegations are no longer true.
Additionally, the Trustee is now in charge of this bankruptcy proceeding and adversary proceeding, so there is no longer a threat that the case will be dismissed by him. Therefore, there is no longer an immediacy based upon a fear that the checks will lose their value because they have all been deposited with the Court, a fact which could establish immediacy under the standard utilized by the Court in Principal Life
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Ins. Co. v. Robinson. Because these facts are no longer true and no other facts are alleged in the Complaint, there is no support for the entry of declaratory relief based on these allegations because there is no other immediacy pleaded. Therefore, under the standard for pleading under In re McGee above, this is not well-pleaded.
However, the new cause for immediacy, although not explicitly claimed as such in the Motion, is that the Trustee cannot deliver Defendant’s share of the receivables because he has not received a judicial determination of the respective rights of Plaintiff and Defendant. (Motion 4:10-13). This is an issue because once money is deposited into the Court’s registry under 28 U.S.C. § 2041, a party cannot withdraw the money while the case is proceeding. According to 28 U.S.C. § 2042, money deposited with the court can only be removed by a court order to the rightful owner upon "full proof of the right thereto." (28 U.S.C. § 2042).
Under the sufficient immediacy standard utilized in Golden v. California Emergency Physicians Medical Group, sufficient immediacy is established if the granting of relief will end the lawsuit and ensure payment occurs in the present. Golden, 782 F.3d at 1088. According to the Complaint, this is exactly what a default judgment for declaratory relief in this case would do because once the default judgment is granted, the lawsuit would end and the Trustee would be able to collect the funds out of the Court’s registry. Therefore, a substantial controversy of sufficient immediacy is present in this case.
WEIGHING THE DISCRETIONARY FACTORS FOR DECLARATORY RELIEF
Once the elements of declaratory relief are established, the court weighs the following discretionary factors in order to determine if it should grant relief. The factors are as follows:
(a) whether the declaratory action will settle all aspects of the controversy, (b) whether the declaratory action will serve a useful purpose in clarifying the legal relations at issue, (c) whether the declaratory action is being sought merely for the purposes of procedural fencing or to obtain a ‘res judicata’ advantage, (d) or whether the use of a declaratory action will result in entanglement between the federal and state court systems. (e) In addition, the district court might also consider the convenience of the parties, and (f) the availability and relative convenience of other remedies. American States Ins. Co v. Kearns. 15 F.3d 142, 143 (9th Cir. 1994); See also Brillhart v. Excess
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Ins. Co., 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed 1620 (1942).
Because there is evidence of a controversy, granting declaratory relief will likely settle this controversy and serve a useful purpose in clarifying the legal relations at issue. This judgment would establish the rights and obligations of each party under the MSA. In addition, it is convenient to the Trustee to receive a judgment now because it will provide access to the money deposited in the Court’s registry after the time period for an appeal has passed. In re United Ins. Management, Inc., 14 F.3d 1380, 1386 (9th Cir. 1994) (A trustee "has a statutory obligation to ‘investigate the financial affairs of the debtor, collect and reduce to money the property of the estate and close such estate as expeditiously as is compatible with the best interests of parties in interest.’")
The judgment also does not appear to be sought merely for the purpose of procedural fencing because neither the Trustee nor the Debtor are a party to an action that involves the legal issues sought to be determined by this judgment. See Grand Trunk Western R. Co. v. Consolidated Rail Corp., 746 F.2d 323, 326 (6th Cir. 1984) (Holding that declaratory relief is not appropriate when it would interfere with state court litigation and is sought as a means to provide another arena for a race for res judicata). Therefore, these factors all weigh in favor of granting declaratory relief.
Overall, the interests of judicial administration, comity, and fairness weigh in favor of GRANTING declaratory relief.
"The court does not have to presume the truth of any factual allegations related to the amount of damages." (TeleVideo Sys. Inc v. Heidenthal, 826 F.2d 915).
Further, According to FRCP 55, the amount of damages must be shown by affidavit.
Here, the amount of damages is supported by a declaration by Tina Shoemaker ("Shoemaker"), an employee of the Debtor, of the details of the oral MSA, which stipulates that the Trustee is entitled to $1,200, which also happens to be 50% of the receivables, as a fee.
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There is the possibility of prejudice to the Trustee because without a judgment; he will be delayed from receiving and being able to distribute a portion of the bankruptcy estate. Further, the Trustee "has a statutory obligation to ‘investigate the financial affairs of the debtor, collect and reduce to money the property of the estate and close such estate as expeditiously as is compatible with the best interests of parties in interest.’" In re United Ins. Management, Inc., 14 F.3d at 1386. Therefore, the possibility of prejudice to the Trustee in expeditiously closing the bankruptcy estate weighs in favor of granting a default judgment. In addition, there is no evidence that the entry of default was due to excusable neglect on the part of the Defendant.
Therefore, this factor also weighs in favor of GRANTING default judgment.
Service: Proper
The Court will GRANT default judgment as the following discretionary factors weigh in favor of granting relief: (1) the possibility of prejudice to the plaintiff, (2) the merits of the plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the amount of damages and (5) whether the default was due to excusable neglect.
APPEARANCES REQUIRED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
2:00 PM
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
From: 6/27/17 Also #40 - #45
EH
Docket 69
7/11/2017
Factual Background:
Allied Injury Management, Inc. ("Debtor") provides billing and collection services to medical service providers, including Justin Paquette ("Defendant"). As part of the written business agreement ("Written Agreement") with Defendant, Debtor in the normal course of business opened a for-the- benefit-of account ("FBO Account") for Defendant in which Debtor would deposit the money collected ("Receivables"). Pursuant to the Written Agreement, Debtor is entitled to 50% of the monthly gross collection.
The Written Agreement has the following relevant clauses:
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On May 11, 2016, Debtor filed a Chapter 11 bankruptcy. As a result Debtor had to close all pre-bankruptcy petition FBO Accounts. Debtor requested documents from Defendant in order to open a new FBO Account. Defendant failed to supply the requested documents. As a result Debtor was unable to open the FBO Account. Debtor was in possession of checks to be deposited into the FBO Account. Debtor was unable to deposit and distribute the receivables pursuant to the Written Agreement. Trustee now asserts that Debtor was able to open an FBO account for Defendant.
Debtor filed a Complaint for Interpleader and Declaratory Relief ("Complaint") on September 21, 2016. On October 27, 2016, the Court granted an order allowing Debtor to deposit $666.00 in the Court’s Registry for Defendant.
Defendant was to file an Answer by October 24, 2016. To date, Defendant has not filed an Answer. On November 4, 2016, Default was entered against Defendant. On May 25, 2017, Chapter 11 Trustee ("Trustee") filed this Motion for Default Judgment ("Motion") and served Defendant.
Trustee requests that the Court establish (1) "Parties rights and obligations are governed by the [Written Agreement]" (2) Payment structure under the [Written Agreement] and (3) a judgment authorizing Debtor to open an account and deposit the funds.
In support of this Motion, Trustee has filed a Declaration by Ms. Tina Shoemaker, employee of Debtor affiliate Titanium Resource Company.
Discussion:
Subject Matter Jurisdiction
A court has subject matter jurisdiction over "all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11" and may enter appropriate orders and judgments. 28 U.S.C. § 157. Core proceedings include any "matters concerning the administration of the estate." 28 U.S.C. § 157 (b)(2).
The matter before the Court is regarding a matter concerning the Debtor’s
Estate.
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Default
"When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default." Fed. R. Civ. P. 55(a).
Here, Defendant was to file an Answer by October 24, 2016. Defendant has not made an appearance in this case. Default was entered against Defendant on November 4, 2016.
Default Judgment
A court may grant default judgment after an entry of default. Fed. R. Civ. P.
A Motion for Default Judgment must also satisfy Local Bankruptcy Rule 7055-1 by identifying the party against whom default was entered, the date of entry of default, by stating if the defaulting party is an infant or incompetent person, by stating if the defaulting party is on active duty in the armed forces, and by serving the motion on the defaulting party pursuant to Fed. R. Civ. P. 55(b)(2). LBR 7055-1.
Here, Defendant has not appeared in the case. Default was entered against Defendant on November 4, 2016. Motion for Default Judgement was filed on May 25, 2017. The Motion named the Defendant, stated the date of entry of default, and stated Defendant is not an infant, incompetent, or on active duty. Defendant was served with Motion for Default Judgment on May 25, 107.
A default judgment is not a right but rather the court has discretion to enter a default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir.1980). In exercising discretion the court may consider: (1) possibility of prejudice to the plaintiff, (2) merits of plaintiff’s substantive claims, (3) sufficiency of complaint, (4) sum of money at stake in action, (5) possibility of dispute concerning material facts, (6) whether defendants default was product of excusable neglect, (7) strong public policy favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir 1986).
Possibility of prejudice to the Plaintiff
To determine whether there is prejudice to the plaintiff the court should look at whether the plaintiff’s ability to pursue his claim will be hindered by not granting a
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default judgment. Falk v. Allen, 739 F.2d 461, 462 (9th Cir. 1984).
Here, Trustee is unable to collect the money Debtor has earned without declaratory relief. As a result the Trustee is unable to take possession of the money and administer the estate.
Debtor has successfully petitioned the Court to deposit the checks into the Court’s Registry. Trustee has not been able to recover the money earned by Debtor from collecting the Receivables and will not be able to recover until the Court orders release of the funds to the appropriate parties. Therefore, the possibility of prejudice to the Trustee is high and warrants default judgment.
Merits of plaintiff’s substantive claims and sufficiency of complaint
The general rule is that after default is entered, the factual allegations asserted in the complaint are taken as true, with the exception of facts regarding damages. Geddes v. United Fin. Grp.¸ 559 F.2d 557, 560 (9th Cir. 1977). A pleading must contain a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2).
"Under the second and third Eitel factors the Court must examine whether the Plaintiff has plead facts sufficient to establish and succeed upon its claims." Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1055 (N.D. Cal. 2010).
A. Declaratory Relief
A court "may declare the rights and other legal relations of any interested party seeking such declaration" when there is a case of actual controversy regarding a matter within its jurisdiction. 28 U.S.C. § 2201. Declaratory relief was created to protect defendants from adversarial threats of impending litigation by giving parties an opportunity to prevent potential damages. Societe de Conditionnement en Aluminium
v. Hunter Eng’g Co.,Inc., 655 F.2d 938, 943 (9th Cir. 1981)(citing Japan Gas Lighter Assoc. v. Ronson Corp., 257 F. Supp. 219, 237 (D.N.J 1966).
An actual controversy exists if "the facts alleged, under all the circumstances; show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). Once the court has determined whether there is an actual controversy, the court must decide whether to exercise jurisdiction and grant declaratory relief. Principal Life Ins. Co. v.
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Robinson, 394 F.3d 665, 668 (9th Cir. 2005).
Declaratory relief is appropriate if the judgment would "serve a useful purpose in clarifying and settling the legal relation in issue" and "terminate and afford relief from the uncertainty, insecurity and controversy giving rise to the proceeding." Eureka Fed. Sav. & Loan Ass'n v. Am. Cas. Co., 873 F.2d 229, 231 (9th Cir. 1989). Furthermore, the court should avoid needless determination of state law, discourage forum shopping, and avoid duplicate litigation. Gov’t Emp. Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1988).
Here, Trustee claims two controversies. The first is regarding the amount to be disbursed to each party from the Receivables collected by Debtor. The second controversy involves Defendant’s assertion "that they have done all they are required to do under the agreements" and Debtor’s assertion that "Defendants have failed to provide the necessary documents to open" the FBO Account.
When a plaintiff no longer wishes to or is no longer able to engage in the activity for which plaintiff seeks declaratory relief, no actual controversy exists. Gator.com Corp. v. L.L. Bean, Inc., 398 F.3d 1125, 1129 (9th Cir. 2005). Given that Trustee has successfully opened an FBO Account for Defendant, the second controversy alleged does not satisfy the actual controversy requirement and does not warrant declaratory relief.
In the Complaint, Debtor alleges that an actual controversy has arisen regarding the portion of the Receivables due to each party. Under Geddes, once default has been entered the factual allegations stated in the complaint are taken as true. Debtor has provided a copy of the Written Agreement, which states the compensation for Debtor’s work is 50% of the Receivables.
A substantial controversy is present when a substantial monetary amount will change hands and when a legal claim concededly worth at least that much will be foregone. Golden v. Cal. Emergency Physicians Med. Grp., 782 F.3d 1083, 1088- 1089 (9th Cir. 2015).
A claim may present sufficient immediacy and reality when adjudicating an issue would end the lawsuit and would make the money be paid in the present. Golden at 1088-1089. In Principal Life, the Court found sufficient immediacy and reality was present when a party suffered an inability to make reasonable business decisions due to an unresolved lease agreement dispute. Principal Life Ins. Co. at 669.
Trustee’s inability to dispose of the money earned by Debtor, currently deposited in the Court Registry appears to satisfy the "sufficient immediacy and reality" needed to order declaratory relief. Trustee is presently unable to pay itself the
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portion of the money due to Debtor and cannot pay third parties. Similar to the plaintiff in Principal Life who could not make reasonable business decisions as a result of the dispute over the terms of the lease agreement, Trustee is unable to go on with daily business transactions due to the dispute over the portion of the Receivables due to each party. Trustee’s effort to reorganize is being hindered by Defendant’s failure to provide the documents requested in a timely manner so Trustee could open the FBO Account and by Defendant’s subsequent failure to respond to the present Complaint.
Furthermore, under 11 U.S.C. § 704 (a)(1), it is the Trustee’s duty to "close the estate as expeditiously as is compatible with the best interests of the parties in interest." At this point the Trustee is unable to take possession of money which Debtor has earned and distribute the money among the parties in interest. Adjudicating this claim would allow for the money currently sitting in the Court Registry to be disbursed to the Trustee and subsequently to Debtor’s creditors. The Trustee is unable to access $333.00. By adjudicating this issue the Trustee could take control of the money, distribute the funds, and close the estate.
The Court finds that an actual controversy does exist and must now determine if it will exercise its discretion, based on the standard set in Eureka, and award declaratory relief.
A useful purpose may be served when declaratory relief would solve "a complex and long-lasting dispute over critical aspects of the parties rights and responsibilities under the treaty." U.S. v. State of Wash., 759 F.2d 1353, 1364 (9th Cir. 1985). In Newcal Indus., Inc., declaratory relief was found to have a useful purpose because it established a right to recover. Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1057 (9th Cir. 2008). Declaratory relief may afford relief from uncertainty, insecurity and controversy when relief would settle uncertainty regarding the validity of a legal theory. Newcal Indus., Inc. at 1057.
Here, declaratory relief would serve a useful purpose in determining whether Debtor should be paid according to the Written Agreement and by allowing Trustee to take possession of the money and the Trustee will be able to distribute the Receivables pursuant to the written agreement in the future. While the dispute at hand is not presented as complex or long-lasting, the uncertainty regarding this agreement has had a negative effect on the Trustee’s ability to carry out his statutory duties. Currently the Receivables collected by Debtor are sitting in the Court Registry and will not be disbursed until a determination regarding the rights of each party is determined by the Court. By granting declaratory relief the Court will allow for the Receivables to be
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disbursed appropriately, thus allowing the Trustee to take possession of the funds.
Based on the foregoing, declaratory relief is appropriate. The Court now turns to determine if the Receivables should be distributed according to the Written Agreement.
Trustee has provided in support of this Motion a copy of the Written Agreement between Debtor and Defendant. The Written Agreement outlines a detailed payment schedule for Debtor’s services. The payment schedule awards Debtor 50% of the monthly gross collection.
There are sufficient facts regarding the merits and potential success of the substantive claims. This weighs in favor of granting default judgment.
Sum of money at stake in action
Under this factor, "the court must consider the amount of money at stake in relation to the seriousness of Defendant's conduct." PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1176 (C.D. Cal. 2002). When plaintiff only seeks damages proportional to the breach of the contract, the amount of money at stake does not preclude default judgment. NewGen, LLC v. SafeCig, LLC¸ 840 F.3d 606, 617 (9th Cir. 2016). "Default judgment is disfavored where the sum of money at stake is too large or unreasonable in relation to defendants conduct." Vogel v. Rite Aid Corp., 992 F.Supp.2d 998, 1012 (C.D. Cal. 2014)(citing Truong Giang Corp. v Twinstar Tea Corp.¸ No. C 06-03594 JSW, 2007 WL 1545173, *12 (N.D. Cal. 2007).
Here, although Trustee is seeking declaratory relief there is still money at stake. The Court’s declaration would award $333.00 to the Trustee. The proportionately minimal sum of money at stake weighs in favor of entry of default judgment.
Possibility of dispute concerning material facts
The general rule is that after default is entered, all well-pleaded factual allegations are taken as true, with the exception of facts regarding damages. PepsiCo, Inc. at 1177.
Defendant was properly served and had a full opportunity to respond to the factual allegations asserted in the Complaint. Thus, default judgment may be appropriate.
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Whether defendant’s default was product of excusable neglect
When a party is properly served and ignores the deadline to respond to the complaint there is no excusable neglect. NewGen, LLC v. SafeCig LLC, 840 F.3d 606, 616 (9th Cir. 2016).
Here, Defendant was properly served with the Complaint on September 30, 2016. Defendant was served with the Motion for Default Judgment on May 25, 2017. Defendant has had ample opportunity to be heard and has yet to make an appearance in the present case.
Strong public policy favoring decisions on the merits
Generally default judgments are disfavored and a case should be decided on the merits. Eitel, 728 F.2d at1472. When the Defendant makes the termination of a case impossible or impracticable, default judgment is permitted. PepsiCo, Inc. at 1174.
Here, Defendant was properly served and has not made an appearance in the case. Defendant’s failure to make an appearance and failure to file any response or opposition weigh in favor of the entry of default judgment.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT Trustee’s Motion for Default Judgment.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se
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Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
From: 6/27/17 Also #40 - #45
EH
Docket 67
FACTUAL BACKGROUND:
Allied Injury Management, Inc. ("Debtor") provides billing and collection services to medical service providers, including Sunkist Imaging Medical Center, a California professional corporation ("Defendant"). Debtor’s business provided billing and collection services pursuant to written and oral medical service agreements (collectively, "MSAs"). Under the MSAs, the Debtor agreed to collect receivables owed to providers, retain a portion of the collected receivables as compensation, and remit the balance to the providers. The Debtor’s principal assets are the MSAs and the receivables owed thereunder. On September 21, 2016, the Debtor commenced this adversary proceeding seeking interpleader and declaratory relief (the "Complaint") against the Defendant. The clerk entered default on November 4, 2016. On November 30, 2016, the Court ordered the appointment of a Chapter 11 Trustee, David M. Goodrich, (the "Trustee") to assume control of the estate. The Trustee was appointed on December 7, 2016, and filed this motion for default judgment only on the declaratory relief claim on May 25, 2017 (the "Motion"). No opposition has been filed.
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The Defendant and Debtor have a written MSA ( the "Written Agreement). Pursuant to the Written Agreement, Debtor is entitled to 30% of the monthly gross receivables ("Receivables"). Presently, the Trustee has deposited the sum of $1,100 of the Defendant’s Receivables in the Court’s registry. Pursuant to the MSA, the Trustee asserts that the Estate is entitled to $330, or 30% of the Receivables.
The Trustee is seeking a judgment authorizing disbursement of the Receivables out of the Court’s registry; permitting the Trustee to take possession of the Receivables and authorizing the Trustee to deposit the same in a for-the-benefit account associated with the Defendant; and authorizing the Trustee to administer the Receivables in accordance with the medical service agreement entered into between the Debtor and Defendant.
DISCUSSION:
Default
"When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default." Fed. R. Civ. P. 55(a).
Here, Defendant was to file an Answer by October 24, 2016. Defendant has not made an appearance in this case. Default was entered against Defendant on November 4, 2016.
Default Judgment
A court may grant default judgment after an entry of default. Fed. R. Civ. P.
A Motion for Default Judgment must also satisfy Local Bankruptcy Rule 7055-1 by identifying the party against whom default was entered, the date of entry of default, by stating if the defaulting party is an infant or incompetent person, by stating if the defaulting party is on active duty in the armed forces, and by serving the motion on the defaulting party pursuant to Fed. R. Civ. P. 55(b)(2). LBR 7055-1.
Here, Defendant has not appeared in the case. Default was entered against Defendant on November 4, 2016. Motion for Default Judgement was filed on May 25, 2017. The Motion named Defendant, stated the date of entry of default, stated Defendant is not an infants, incompetent, or on active duty. Defendant was served
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with Motion for Default Judgment on May 25, 2017.
A default judgment is not a right but rather the court has discretion to enter a default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir.1980). In exercising discretion the court may consider: (1) possibility of prejudice to the plaintiff, (2) merits of plaintiff’s substantive claims, (3) sufficiency of complaint, (4) sum of money at stake in action, (5) possibility of dispute concerning material facts, (6) whether defendants default was product of excusable neglect, (7) strong public policy favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir 1986).
Possibility of prejudice to the Plaintiff
To determine whether there is prejudice to the plaintiff the court should look at whether the plaintiff’s ability to pursue his claim will be hindered by not granting a default judgment. Falk v. Allen, 739 F.2d 461, 462 (9th Cir. 1984).
Here, Trustee is unable to collect the money earned by the Debtor without declaratory relief. As a result the Trustee is unable to take possession of the money and administer the estate.
Trustee has successfully petitioned the Court to deposit the checks into the Court’s Registry. Trustee has not been able to recover the money earned from collecting the Receivables and will not be able to recover until the Court orders release of the funds to the appropriate parties. Therefore, the possibility of prejudice to the Plaintiff is high and warrants default judgment.
Merits of plaintiff’s substantive claims and sufficiency of complaint
The general rule is that after default is entered, the factual allegations asserted in the complaint are taken as true, with the exception of facts regarding damages. Geddes v. United Fin. Grp.¸ 559 F.2d 557, 560 (9th Cir. 1977). A pleading must contain a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2).
"Under the second and third Eitel factors the Court must examine whether the Plaintiff has plead facts sufficient to establish and succeed upon its claims." Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1055 (N.D. Cal. 2010).
A. Declaratory Relief
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A court "may declare the rights and other legal relations of any interested party seeking such declaration" when there is a case of actual controversy regarding a matter within its jurisdiction. 28 U.S.C. § 2201. Declaratory relief was created to protect defendants from adversarial threats of impending litigation by giving parties an opportunity to prevent potential damages. Societe de Conditionnement en Aluminium
v. Hunter Eng’g Co.,Inc., 655 F.2d 938, 943 (9th Cir. 1981)(citing Japan Gas Lighter Assoc. v. Ronson Corp., 257 F. Supp. 219, 237 (D.N.J 1966).
An actual controversy exists if "the facts alleged, under all the circumstances; show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). Once the court has determined whether there is an actual controversy, the court must decide whether to exercise jurisdiction and grant declaratory relief. Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 668 (9th Cir. 2005).
Declaratory relief is appropriate if the judgment would "serve a useful purpose in clarifying and settling the legal relation in issue" and "terminate and afford relief from the uncertainty, insecurity and controversy giving rise to the proceeding." Eureka Fed. Sav. & Loan Ass'n v. Am. Cas. Co., 873 F.2d 229, 231 (9th Cir. 1989). Furthermore, the court should avoid needless determination of state law, discourage forum shopping, and avoid duplicate litigation. Gov’t Emp. Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1988).
Here, there is an existing controversy regarding the amount to be disbursed to each party from the Receivables collected by the Trustee/Debtor. A claim may present sufficient immediacy and reality when adjudicating an issue would end the lawsuit and would make the money be paid in the present. Golden at 1088-1089. In Principal Life, the Court found sufficient immediacy and reality was present when a party suffered an inability to make reasonable business decisions due to an unresolved lease agreement dispute. Principal Life Ins. Co. at 669.
Trustee’s inability to dispose of the money earned, currently deposited in the Court Registry appears to satisfy the "sufficient immediacy and reality" needed to order declaratory relief. Trustee is presently unable to disburse to itself or to Defendant the portions of Receivables due under the Written Agreement. Similar to the plaintiff in Principal Life who could not make reasonable business decisions as a result of the dispute over the terms of the lease agreement, Trustee is unable to go on with daily business transactions due to the questions regarding the agreement.
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Furthermore, under 11 U.S.C. § 704 (a)(1), it is the Trustee’s duty to "close the estate as expeditiously as is compatible with the best interests of parties in interest." At this point the Trustee is unable to take possession of money which Debtor has earned and distribute the money among the parties in interest. Adjudicating this claim would allow for the money currently sitting in the Court Registry to be disbursed to the Trustee and subsequently to Debtor’s creditors.
The Court finds that an actual controversy does exist and that it should exercise its discretion to enter default judgment under the facts presently before the Court.
Sum of money at stake in action
Under this factor, "the court must consider the amount of money at stake in relation to the seriousness of Defendant's conduct." PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1176 (C.D. Cal. 2002). When plaintiff only seeks damages proportional to the breach of the contract, the amount of money at stake does not preclude default judgment. NewGen, LLC v. SafeCig, LLC¸ 840 F.3d 606, 617 (9th Cir. 2016). "Default judgment is disfavored where the sum of money at stake is too large or unreasonable in relation to defendants conduct." Vogel v. Rite Aid Corp., 992 F.Supp.2d 998, 1012 (C.D. Cal. 2014)(citing Truong Giang Corp. v Twinstar Tea Corp.¸ No. C 06-03594 JSW, 2007 WL 1545173, *12 (N.D. Cal. 2007).
Here, although the Plaintiff is seeking declaratory relief there is still money at stake. The Court’s declaration could result in a monetary award to the Debtor’s estate of $330. The proportionately minimal sum of money at stake weighs in favor of entry of default judgment.
Possibility of dispute concerning material facts
The general rule is that after default is entered, all well-pleaded factual allegations are taken as true, with the exception of facts regarding damages. PepsiCo, Inc. at 1177.
Defendant was properly served and had a full opportunity to respond to the factual allegations asserted in the Complaint. Thus, default judgment is appropriate.
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Whether defendants’ default was product of excusable neglect
When a party is properly served and ignores the deadline to respond to the complaint there is no excusable neglect. NewGen, LLC v. SafeCig LLC, 840 F.3d 606, 616 (9th Cir. 2016).
Here, Defendant was properly served with the Complaint on September 30, 2016. Defendant was served with the Motion for Default Judgment on May 25, 2017. Defendant has had ample opportunity to be heard and has yet to make an appearance in the present case. Therefore, Defendant’s default is unlikely to be a result of excusable neglect.
Strong public policy favoring decisions on the merits
Generally default judgments are disfavored and a case should be decided on the merits. Eitel, 728 F.2d at1472. When the Defendant makes the termination of a case impossible or impracticable, default judgment is permitted. PepsiCo, Inc. at 1174.
Here, Defendant was properly served and has not made any appearance in the case. Defendant’s failure to make an appearance and failure to file any response or opposition weighs in favor of the entry of default judgment.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT Trustee’s Motion for Default Judgment as requested in the Motion.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se
2:00 PM
Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Movant(s):
David M. Goodrich Represented By Victor A Sahn Jason Balitzer
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
From: 11/15/16, 12/6/16, 12/20/16, 2/28/17, 4/25/17, 6/27/17 Also #40 - #44
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
2:00 PM
Myelin Diagnostics Pro Se
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
10:00 AM
EH
Docket 12
- NONE LISTED -
Debtor(s):
Brenda Gonzalez Represented By Patricia A Mireles
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
EH
Docket 9
- NONE LISTED -
Debtor(s):
Linda E Long Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
EH
Docket 10
- NONE LISTED -
Debtor(s):
Santino J Carbone Represented By Daniel King
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
EH
Docket 9
- NONE LISTED -
Debtor(s):
William E Simpson Jr Pro Se
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
EH
Docket 10
- NONE LISTED -
Debtor(s):
ANTOINETTE M BUENO Represented By
Lisa F Collins-Williams
Trustee(s):
Charles W Daff (TR) Pro Se
11:00 AM
EH
Docket 9
- NONE LISTED -
Debtor(s):
Jason Lee Fraser Pro Se
Trustee(s):
Charles W Daff (TR) Pro Se
11:00 AM
(3) Granting Related Relief From: 5/17/17, 5/31/17
EH
Docket 39
BACKGROUND
On October 16, 2016 ("Petition Date"), Charles David Arthur and Claire Blanza Arthur (collectively, "Debtors") filed their petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the Debtors’ bankruptcy estate ("Estate") is real property located at 35965 Carlton Road in Wildomar, CA (the "Property").
On April 25, 2017, the Trustee filed a Motion seeking (1) authority for a short sale of the Estate’s right, title, and interest in the Property free and clear of the interests; (2) approving payment of broker commission; and (3) granting related relief ("Motion").
No opposition has been filed.
DISCUSSION
Sale of Estate Property Pursuant to Section 363(b)
The trustee, after notice and a hearing, may sell property of the estate. 11
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U.S.C. § 363(b)(1); see also Commodity Futures Trading Comm’n v. Weintraub, 471
U.S. 343, 352 (1985). The sale must be in the best interests of the estate and the price must be fair and reasonable. In re Canyon Partnership, 55 B.R. 520 (Bankr. S.D. Cal. 1985); see also In re Wilde Horse Enterprises, Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal. 1991)(sale must have fair/reasonable price, accurate/reasonable notice to creditors and sale made in good faith). The trustee must articulate some "business justification" for selling estate property out of the "ordinary course of business" before the court may approve the transaction. In re Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983); In re Ernst Home Ctr., Inc., 209 B.R. 974, 979 (Bankr. W.D. Wash. 1997). Objections to sale that are based on inadequacy of price are often resolved the court ordering an auction, which may occur in open court. Simantrob v. Claims Prosecutor, LLC (In re Lahijani), 325 B.R. 282, 287 (9th Cir. BAP 2005) citing Fed. R. Bankr. P. 6004(f).1
Here, the Trustee asserts that the short sale will result in the estate being paid a fee of approximately $21,750. The declarations of Karina Jimenez and Anthony Silva (the "Buyers") indicate that the estate will be paid a fee of $21,750, in addition to the purchase price of $350,000. However, the Motion is not clear as to what underlies the "fee" being paid. Instead, it appears that the "fee" is actually a part of the purchase price. The framework proposed by the Trustee appears to indicate bad faith because he provides no basis rooted in bankruptcy for the Estate to charge a fee in exchange for the sale of an asset of the Estate.
a) Sale Free and Clear of non-Debtor Interests
A trustee may sell estate property "free and clear" of third party interests in the property, such as co-ownership interest, liens, claims and encumbrances. See 11
U.S.C. § 363(f). A sale free and clear of third party interests pursuant to section 363 is authorized only if one of the following conditions is met: (1) sale authorized by applicable nonbankruptcy law; (2) third party whose interest will be affected consents;
the affected interest is a lien and the sale price is greater than total value of all liens on the property; (4) the affected interest is a bona fide dispute; or (5) the third party whose interest will be affected could be compelled to accept a money satisfaction of the interest. 11 U.S.C. § 363(f)(1)-(5).
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The Trustee has not obtained consent from the first priority secured lender.
Without such consent, the Court cannot grant the Motion free and clear of this lien. As to the remaining junior liens, the Trustee proposes that a hypothetical foreclosure sale situation satisfies Section 363(f)(5). However, the Court believes that the analysis provided in Dishi & Sons v. Bay Condos LLC, 510 B.R. 696, 711 (S.D.N.Y. 2014) provides the better view of whether a hypothetical foreclosure sale can be a basis for granting free and clear under 363(f)(5).
narrow interpretation [of 363(f)(5)] provides a limited role for paragraph (5), but avoids rendering the remaining paragraphs mere surplusage. See In re PW, 391 B.R. 25, 44 (9th Cir. BAP 2008) ("[A]ny interpretation of paragraph (5) must satisfy the requirement that the various paragraphs of subsection (f) work harmoniously and with little overlap."). Other courts have therefore limited the scope of paragraph
(5) to those scenarios where the trustee or debtor, not any third party, is the actor. See, e.g., In re Ricco, Inc., 2014 WL 1329292, *3 (Bankr.N.D.W.Va. Apr. 1, 2014) ("[T]he only logical interpretation of
... § 363(f)(5) is that the statute requires that the trustee or debtor be the party able to compel monetary satisfaction for the interest which is the subject of the sale.") (quoting In re Haskell, 321 B.R. at 9); In re Scott, 2013 WL 4498987, *2–3 (Bankr.E.D.Ky. Aug. 21, 2013) (paragraph
(5) does not refer to foreclosure proceedings because they are initiated by creditors, not the debtor); In re Haskell, 321 B.R. at 9 (paragraph (5) does not encompass eminent domain proceedings because the trustee must be the party capable of compelling the interest holder to accept a money satisfaction). This Court agrees that paragraph (5) should be read to reach only those legal or equitable proceedings that could be brought by the trustee as owner of the property. A foreclosure by a third-party mortgagee is not such a proceeding. And as Dishi has not suggested any other hypothetical proceedings by which the trustee could compel TGM to accept a money satisfaction in exchange for extinguishment of its interest, the Court holds that paragraph (5) does not authorize a sale free and clear of TGM's rights. In re Daufuskie Island Props., LLC, 431 B.R. 626, 637 (Bankr.D.S.C.2010)
11:00 AM
Dishi & Sons at 711 (S.D.N.Y. 2014)(emphasis added).
Here, the Court is inclined to agree with the rationale of Dishi & Sons that 363 (f)(5) should be read narrowly to encompass only legal or equitable proceedings that could be brought by the trustee as the owner of the property. For this reason, the Court is inclined to deny the Trustee’s request to permit a sale free and clear of the junior liens against the Property.
TENTATIVE RULING
Based on the foregoing analysis, the Court is inclined to DENY the Motion.
APPEARANCES REQUIRED.
Debtor(s):
Charles David Arthur Represented By Anerio V Altman
Joint Debtor(s):
Claire Bigornia Blanza Arthur Represented By Anerio V Altman
Movant(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
Trustee(s):
Charles W Daff (TR) Represented By
11:00 AM
Lynda T Bui Rika Kido
11:00 AM
Docket 27
07/12/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
FEES $936.31 EXPENSES $79.63
The application for compensation is approved and the trustee may submit on the tentative.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Marlyne F Youssef Represented By Hani S Bushra
Trustee(s):
Todd A. Frealy (TR) Pro Se
11:00 AM
11:00 AM
HOLDING DATE
From: 1/4/17, 4/5/17 EH
Docket 23
04/05/17
The US Trustee has indicated that a deposition of the alleged BPP, Laguna, is currently scheduled for April 19, 2017. Based on the ongoing settlement negotiations between the UST and Laguna, as well as the ongoing discovery efforts, the UST has requested a continuance of the hearing for 120 days for an evidentiary hearing. Absent objection by Laguna at the hearing, the Court is inclined to approve the UST's proposed briefing schedule and set an evidentiary hearing on July 10, 2017, at 11:00 a.m.
APPEARANCES REQUIRED. Telephonic appearance by the UST is approved.
Debtor(s):
Jesus Ramirez Guillen Pro Se
Joint Debtor(s):
Yovana Mondagron Guillen Pro Se
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
11:00 AM
Trustee(s):
Arturo Cisneros (TR) Pro Se
11:00 AM
Docket 20
07/12/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
FEES $611.28 EXPENSES $73.90
The application for compensation is approved and the trustee may submit on the tentative.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Armando G Ybarra Jr. Represented By Michael Smith
Joint Debtor(s):
Melissa K Ybarra Represented By Michael Smith
11:00 AM
Trustee(s):
Larry D Simons (TR) Pro Se
11:00 AM
From: 6/21/17 EH
Docket 72
APPEARANCES REQUIRED.
Debtor(s):
Kai Lin Wu Represented By
Paul Y Lee
Trustee(s):
John P Pringle (TR) Represented By Wesley H Avery
11:00 AM
Docket 52
07/12/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and the Trustee’s professionals have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the Applications of the associated professionals, the following administrative claims will be allowed:
Fees Requested $1,500
Expenses Requested (tab summary of expenses) $28.43
Fees Requested $9,550
Expenses Requested (tab summary of expenses) $669.07
Fees Requested $5,056.27
Expenses Requested (tab summary of expenses) $226
11:00 AM
Fees Requested $1,510.65
Expenses Requested (tab summary of expenses) $81.54
The applications for compensation and other administrative claims set forth in the Trustee’s Final Report are approved and the trustee and associated professionals may submit on the tentative.
APPERANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Mehra N. Newby Represented By Joseph M Tosti
Trustee(s):
Larry D Simons (TR) Represented By Toan B Chung James K Sweeney
11:00 AM
Docket 200
- NONE LISTED -
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - DISBARRED - Steven L Bryson
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander
11:00 AM
From: 4/26/17, 5/10/17, 6/7/17 Also #15
EH
Docket 35
- NONE LISTED -
Debtor(s):
Laureen Martha Harley Represented By
James M Powell - DISBARRED - Michael H Raichelson
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
11:00 AM
From: 6/7/17 Also #14
EH
Docket 29
- NONE LISTED -
Debtor(s):
Laureen Martha Harley Represented By
James M Powell - DISBARRED - Michael H Raichelson
Movant(s):
Steven M Speier (TR) Represented By Robert P Goe
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
11:00 AM
EH
Docket 465
07/12/2017
BACKGROUND
On December 18, 2013, Nabeel Slaieh ("Debtor" or "Defendant") filed for chapter 7 relief. Larry D. Simons is the duly appointed chapter 7 trustee ("Trustee").
Among the assets of the bankruptcy estate is certain real property located at 40834 Baccarat Rd., Temecula, CA ("Property").
On August 29, 2014, the Office of the United States Trustee ("UST") filed a Complaint Objecting to Discharge or, Alternatively, Seeking Dismissal of the Case for Abuse ("Complaint"). An Answer was filed on October 21, 2014. On July 10, 2016, the UST sought Court authority to file a supplemental Complaint and extend the discovery and dispositive motion deadline. On September 10, 2015, the Court entered its order authorizing the filing of the Supplemental Complaint. The Supplemental Complaint was filed on September 16, 2015. The Supplemental Complaint added the Sixth and Seventh Claims for Relief under §§ 727(a)(2) and (d)(1). On June 28, 2016, the Court Granted the Defendant’s Motion to Dismiss the Seventh Claim under § 727 (d)(1).
On July 8, 2016, the UST filed a Motion for Final Order to Enter Partial Summary Judgement or in the Alternative, Summary Adjudication of Material Facts as to the Sixth Claim for Relief. On October 21, 2016, the Court entered its order granting the UST’s Motion for a Final Order and on October 25, 2016, entered final judgment on the Sixth Claim for Relief (the "Judgment"), denying the Debtor his discharge. The Debtor did not seek reconsideration and did not timely appeal the Court’s Judgment.
11:00 AM
On January 27, 2017, the UST filed a Motion to Dismiss Unresolved Claims Without Prejudice (the "Request to Dismiss Remaining Claims"). In its Request to Dismiss Remaining Claims, the UST indicated that the Debtor disputed whether the Court’s Judgment was final because it did not address all of the claims raised by the Complaint and, relatedly, whether the time for Debtor to appeal the denial of discharge had lapsed. On March 22, 2017, the Court granted the UST’s Request to Dismiss Remaining Claims. The Debtor then filed his Notice of Appeal of the Court’s Judgment on April 1, 2017. The Debtor did not request a stay pending appeal.
On June 19, 2017, CFFC, Inc. and Brian Ostler, Sr., Esq. ("Movant") filed a motion for determination of whether stay in favor of the Debtor terminated pursuant to 11 U.S.C. § 362(c)(2)(C), upon entry of judgment denying discharge ("Motion"). The Motion indicates that Debtor’s counsel and the Debtor were served by US Mail on June 14, 2017. Based on the proof of service, in addition to the correspondence between Mr. Saba and Movant, the Court finds that Debtor had sufficient due process. Despite having been served with the Motion, no opposition has been filed by the Debtor.
DISCUSSION
Movant indicates that he filed an action in Pomona Superior Court against the Debtor for fraudulent transfer, conspiracy to fraudulently transfer and recovery for violation of Business and Professions Code § 17200 et seq. (the "State Court Action") on November 30, 2016. The State Court Action was served on the Debtor on January 3, 2017, and a default was entered against the Debtor on February 21, 2017.
On June 5, 2017, the Movant received correspondence from Debtor’s counsel demanding that the default in the State Court Action be set aside, and asserting that failure to do so would result in the Debtor filing an adversary action seeking damages for violation of the automatic stay. (Exhibit 3).
Movant further asserts and provides copies of email correspondences indicating that Debtor’s counsel argued to Movant prior to the filing of the instant Motion that the Judgment denying the Debtor his discharge had been appealed and was "without any force and/or effect." (Exhibit 5).
11:00 AM
Movant requests that this Court confirm that the steps already taken in the State Court Action have not and will not violate the stay and that there is no stay in effect.
The automatic stay of acts against debtor in personam expires when the debtor is granted or denied a discharge. 11 U.S.C. § 362(c)(2)(C). Acts against property of the estate remain stayed until the earliest of the time when the bankruptcy case is closed, dismissed, or the property ceases to be property of the estate. 11 U.S.C. § 362(c).
Here, the Movant is correct that the Court denied the Debtor his discharge pursuant to the October 25, 2016, Judgment. Thus, the Court finds that the automatic stay of acts against the Debtor, in personam, expired on the date the Judgment was entered.
In contrast, acts against property of the estate remain stayed. However, the State Court Action appears to clearly state that "it does not seek to obtain possession of property of the Bankruptcy Estate or of property from the Bankruptcy Estate or to exercise control over property of the Bankruptcy Estate, or to create, perfect, or enforce any lien against property of the Bankruptcy Estate." (Ex. 2 at 2, ¶3).
TENTATIVE RULING
As set forth above, the Court finds that pursuant to § 362(c)(2)(C), the automatic stay terminated as to Movant (as to non-estate property) as of October 25, 2016. As such, the actions initiated by the Movant against the Debtor as of November 2016 with respect to the State Court Action do not violate the automatic stay, and shall not violate the automatic stay as long as Movant makes no attempt to obtain possession/control of estate property.
APPEARANCES REQUIRED.
Debtor(s):
Nabeel Slaieh Represented By
11:00 AM
Movant(s):
George A Saba
CFFC, Inc Represented By
Brian C Ostler Sr
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:17-01064 Jabro v. Kim et al
From: 5/17/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Mee Soon Kim Represented By Minh Duy Nguyen
Defendant(s):
Tae Young Kim Pro Se
Mee Soon Kim Pro Se
Plaintiff(s):
Hikmat Jabro Represented By
Michael H Jabro
Trustee(s):
Larry D Simons (TR) Represented By David Seror Michael W Davis
2:00 PM
Adv#: 6:17-01012 Simons v. Kim
U.S.C. §§ 544, 548(a)(1)(A) and (B), 550(a)(1) and (2); and, California Civil Code § 3439, et seq.] Nature of Suit: (13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other)),(91 (Declaratory judgment)
FROM: 3/29/17, 5/3/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Mee Soon Kim Represented By Minh Duy Nguyen
Defendant(s):
Tae Young Kim Pro Se
Plaintiff(s):
Larry Simons Represented By
Michael W Davis
Trustee(s):
Larry D Simons (TR) Represented By David Seror Michael W Davis
2:00 PM
Adv#: 6:17-01003 Cisneros v. Castro, Jr.
SETTLED
From: 3/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Luz Ampelia Castro Represented By George P Hobson Jr
Defendant(s):
Enrique Castro Jr. Represented By
C Scott Rudibaugh
Plaintiff(s):
Arturo M. Cisneros Represented By Carmela Pagay Todd A Frealy
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
2:00 PM
Adv#: 6:17-01050 United States Trustee for the Central District of v. Pryor
From: 5/3/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Defendant(s):
Jack C Pryor Represented By
Linda J DeVore
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
2:00 PM
Adv#: 6:17-01085 PRINGLE v. Winn et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
Home Security Stores, Inc. Represented By Winfield S Payne III
Defendant(s):
Steven B Knoch Represented By Seth W Wiener
Stacy Winn Pro Se
Natalia V Knoch Represented By Seth W Wiener
Ralph Winn Pro Se
Sterling Security Service, Inc. Represented By Seth W Wiener
Plaintiff(s):
JOHN P PRINGLE Represented By
2:00 PM
Trustee(s):
Charity J Miller
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
2:00 PM
Adv#: 6:16-01265 Whitmore (TR) v. Davol, Inc. et al
(Holding date)
From: 1/4/17, 2/1/17, 3/1/17, 4/12/17, 6/7/17, 6/21/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jesus M. Tapia Represented By Michael Smith
Defendant(s):
C.R. Bard, Inc. Represented By Christopher O Rivas
Bard Devices, Inc. Represented By Christopher O Rivas
Davol, Inc. Represented By
Christopher O Rivas
Plaintiff(s):
Robert Whitmore (TR) Represented By Troy A Brenes
2:00 PM
Trustee(s):
Robert Whitmore (TR) Represented By Douglas A Plazak Troy A Brenes
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
HOLDING DATE
From: 6/7/17 EH
Docket 21
07/12/2017
At the prior hearing on the Defendant’s motion to set aside default ("Motion"), the Court indicated it would grant the motion conditioned upon the Defendant paying Plaintiff’s fees incurred for opposing the Motion and for preparation of the Motion for Default Judgment that would become moot as a result of the order setting aside the default, subject to any objection from Defendant as to the reasonableness of the fees.
The Court required that a declaration from Plaintiff re: fees would be due by June 28, 2017, and that any response/objection to the fees would be due by July 7, 2017. The Declaration re: Fees and Objection were timely filed.
The Court has reviewed the billing records provided by Plaintiff and finds several entries to be unreasonably high. Specifically,
The duplicative and excessive entries for research regarding elements, etc. of default judgments constitute two separate entries of approximately 7 hours each. The total for these two entries is thus approximately 14 hours regarding research for a default judgment motion on April 13 and April 14. The Court finds these research amounts unreasonably high. ($1,762.50 + $1,675=
$3,437.50)
A related conference between the associate preparing the motion and the partner on the case, Mr. Franklin Fraley, for a total of nearly 5 hours on April 19 appears excessive. ($1,237.50)
2:00 PM
The April 21 revisions and conference with Mr. Fraley for a total of 5.2 hours
inappropriately lumps amounts for distinct tasks together and warrants striking as well. ($1,300)
The May 9 and 10 entries to review/analyze for preparation of the opposition to the Defendant’s Motion are duplicative and should be stricken. ($1,250 +
$1,125=$2,375)
The May 24 entries that total 7.75 hours improperly lump tasks making it difficult to gauge the reasonableness of the fees. Overall the Court finds that the amount billed for the tasks set forth appear unreasonably high. This entry shall be stricken. ($1,937.50)
Striking the above amounts, the Court finds that a reduction of $10,287.50 is appropriate.
Based on the foregoing, the Court is inclined to find the remaining figure of $8,673.75 to be a reasonable amount of fees for the actions taken by Plaintiff in opposing the Motion and in drafting the Motion for Default Judgment.
APPEARANCES REQUIRED.
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Represented By Don C Burns
Movant(s):
Don Cameron Burns Represented By Don C Burns Don C Burns
2:00 PM
Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01307 Cisneros v. OIC MEDICAL CORPORATION, a California corporation
A. Cisneros against OIC MEDICAL CORPORATION, a California corporation, LIBERTY ORTHOPEDIC CORPORATION, a California corporation, UNIVERSAL ORTHOPAEDIC GROUP, a California corporation. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 2/24/16, 4/13/16, 6/22/16, 8/24/16, 11/2/16, 2/1/17, 3/8/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
UNIVERSAL ORTHOPAEDIC Represented By Summer M Shaw George Hanover
LIBERTY ORTHOPEDIC Represented By Summer M Shaw George Hanover
2:00 PM
OIC MEDICAL CORPORATION, a Represented By
Summer M Shaw George Hanover
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01309 Cisneros v. DOUGLAS J. ROGER, M.D., INC. DEFINED BENEFIT PLAN
A. Cisneros against DOUGLAS J. ROGER, M.D., INC. DEFINED BENEFIT PLAN. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential Transfer (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(14 (Recovery of money/property - other))
From: 12/30/15, 2/24/16, 4/13/16, 6/22/16, 8/24/16, 11/2/16, 2/1/17, 3/8/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
DOUGLAS J. ROGER, M.D., INC. Represented By
Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
From: 11/2/16, 2/1/17, 2/15/17, 4/26/17, 5/17/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 6/7/17 Also #28
EH
Docket 208
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Movant(s):
Charles Edward Schrader Pro Se
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17, 4/5/17, 6/7/17
Also #27 EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
12:30 PM
Also #2 EH
Docket 100
7/13/17
Background:
On November 6, 2014, Liliana Gomez ("Debtor") filed a Chapter 13 voluntary petition. On November 13, 2014, Castle Credit Corporation ("Creditor") filed a claim in the amount of $6,461.71, of which $3,000 was secured ("Claim 1"). On January 8, 2015, Debtor’s Chapter 13 plan was confirmed. On April 10, 2017, Creditor amended Claim 1 to reduce the claim to $3,461.71, eliminating the secured portion. On June 8, 2017, Debtor filed a claim objection.
The basis of Creditor’s claim is the sale of a Puronics water treatment system. Debtor states that she returned the system after two months. Furthermore, Debtor states that she paid Creditor $3,000 in settlement of the claim in February 2017. Finally, Debtor argues that Creditor has not provided sufficient evidence of its claim, because the contract underlying is in Spanish.
Applicable Law:
12:30 PM
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Section 14 of contract underlying Creditor’s claim contains a choice of law provision
12:30 PM
identifying North Dakota law as the controlling law. Debtor has not raised an argument regarding the validity of this choice of law provision, and, therefore, the Court will apply North Dakota law. North Dakota’s version of UCC Article 2-209,
N.D. Cent. Code § 41-02-16(3), governing the modification to a contract for the sale of goods, states : "The requirements of the statute of frauds of this chapter must be satisfied if the contract as modified is within its provision." UCC Article 2-201, adopted by North Dakota, includes an exception to the status of frauds for part performance, recognized by North Dakota. See Hofmann v. Stoller, 320 N.W.2d 786, 790 (N.D. 1982).
The part performance exception to the statute of frauds requirement has been subjected to different interpretations in different contexts and states. See, e.g., N.D. Cent. Code §9-09-06 (outside UCC, alteration of written contract by oral agreement requires that the agreement be "executed"); see also Cal. Com. Code § 2209, California Code Comment (describing California cases dealing with execution of oral agreements modifying written contracts within purview of UCC). Nevertheless, the Court need not reach the issue because Debtor has not satisfied its burden here.
Debtor must demonstrate by a preponderance of the evidence that the alleged modification took place. See Hofmann v. Stoller, 320 N.W. 2d at 790. The only evidence provided by Debtor is hearsay – statements made to Debtor by her former attorney regarding conversations with Creditor. Furthermore, given the UCC fixture filing attached to Creditor’s proof of claim, it is not clear to the Court that the $3,000 payment to Creditor through escrow is more consistent with the alleged oral modification than with the existing contract.
Debtor’s remaining arguments lack merit. Absent a contractual provision providing a right of rescission, Debtor’s obligations under the contract were not extinguished by returning the water treatment system. Furthermore, the fact that the underlying contract is written in Spanish is irrelevant; Debtor could have filed a translated copy. Therefore, the Court declines to hold that the contract is invalid as evidence of Creditor’s claim.
12:30 PM
Tentative Ruling
The Court is inclined to OVERRULE the objection.
APPEARANCES REQUIRED.
Debtor(s):
Liliana Gomez Represented By Christopher J Langley
Movant(s):
Liliana Gomez Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #1 EH
Docket 92
- NONE LISTED -
Debtor(s):
Liliana Gomez Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 7/6/17 Also #4
EH
Docket 29
- NONE LISTED -
Debtor(s):
Noel Mallari Represented By
David L Nelson
Movant(s):
Noel Mallari Represented By
David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #3 EH
Docket 24
- NONE LISTED -
Debtor(s):
Noel Mallari Represented By
David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 87
Wells Fargo Bank filed a motion for relief from stay (real property), seeking relief under § 362(d)(1) because Debtors were three months behind on their post- confirmation payments. Debtors filed a standard opposition, stating that they would cure or enter into an adequate protection agreement. The hearing was continued once, and then the parties entered into an adequate protection agreement.
Trustee’s opposition does not identify any specific time entries which the Trustee believes are unreasonable or excessive. All of the entries are for fifteen minutes or less, except for one entry regarding the preparation of the opposition, which is listed at twenty-one minutes. There are multiple, somewhat generic time entries related to the motion for relief from stay and the adequate protection order, including for discussions with the client and opposing counsel. Those entries appear excessive given the simplicity of the relief from stay opposition and the adequate protection order, and given that the adequate protection order was prepared by Bank’s counsel. As such, the Court will reduce the fees requested by
$200 as an approximation in this regard.
There is also one entry, for $40, which appears to reflect time Applicant spent
12:30 PM
helping the client make their monthly mortgage payments (on 5/8/17). The Court will eliminate this entry, because it is unclear why Applicant needed to consult with their client about the mortgage payments, and it seems unreasonable to bill the client $40.00 for transmitting the monthly mortgage payment.
The Court is inclined to APPROVE the application in a reduced amount of $895. APPEARANCES REQUIRED.
Debtor(s):
Edward Edmund Zozaya Represented By Dana Travis
Joint Debtor(s):
Georgia Parrilla Zozaya Represented By Dana Travis
Movant(s):
Georgia Parrilla Zozaya Represented By Dana Travis
Edward Edmund Zozaya Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Lawrence D Leavingston Sr. Represented By Gilbert A Diaz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Blanca Resendez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Velasquez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Walter Lemus Represented By Gary S Saunders
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Cirenio Merida Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Silvia Alvarez Represented By
Filemon Kevin Samson III
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ernesto Ayon Lopez Represented By
James Geoffrey Beirne
Joint Debtor(s):
Dolores Millan Sanchez Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gail Katherine Stump Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
April E Diggs Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
CASE DISMISSED 5/26/17
EH
Docket 28
- NONE LISTED -
Debtor(s):
Jane R Mary Engel Represented By Peter L Nisson
Movant(s):
Jane R Mary Engel Represented By Peter L Nisson Peter L Nisson Peter L Nisson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 102
- NONE LISTED -
Debtor(s):
Juana Judith Mejia Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 180
- NONE LISTED -
Debtor(s):
Jaelyn R Young Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 95
- NONE LISTED -
Debtor(s):
Sean A. Davis Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 37
- NONE LISTED -
Debtor(s):
Pablo Flores Represented By
Anthony P Cara
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 21
- NONE LISTED -
Debtor(s):
Ana M. Oliver Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 29
- NONE LISTED -
Debtor(s):
Joe Nathan Banks Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 28
- NONE LISTED -
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
From: 2/28/17, 4/11/17 EH
Docket 6
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
2:00 PM
Adv#: 6:17-01002 BOSNIAN WAND AIRLINES v. Eddington
From: 3/8/17, 3/22/17, 4/5/17 EH
Docket 1
Debtor(s):
William Mark Eddington Represented By Jenny L Doling
Defendant(s):
William Mark Eddington Represented By Summer M Shaw
Plaintiff(s):
BOSNIAN WAND AIRLINES Represented By
John T Van Geffen
Trustee(s):
Todd A. Frealy (TR) Pro Se
2:00 PM
Adv#: 6:17-01019 Frealy v. Arnold et al
From: 4/5/17 EH
Docket 1
Debtor(s):
Kelly Arnold Represented By
Todd L Turoci
Defendant(s):
Larry Arnold Pro Se
Kelly Arnold Pro Se
Plaintiff(s):
Todd Frealy Represented By
Carmela Pagay
Trustee(s):
Todd A. Frealy (TR) Pro Se
12:30 PM
From: 2/9/17, 3/9/17, 5/11/17 EH
Docket 63
Debtor(s):
Emilio Aispuro Represented By Clifford Bordeaux
Joint Debtor(s):
Luz Angelica Aispuro Represented By Clifford Bordeaux
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
From: 5/11/17 Also #
EH
Docket 57
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
From: 5/11/17 Also #
EH
Docket 62
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Movant(s):
James W Smith Sr. Represented By Jenny L Doling Jenny L Doling
Cynthia Smith Represented By Jenny L Doling Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
Docket 69
Debtor(s):
Gustavo C Madrigal Represented By Jenny L Doling
Joint Debtor(s):
Magdaline E M Madrigal Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
Docket 104
Debtor(s):
Donald Mark Prather Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Docket 64
Debtor(s):
ROBERT A HAGUE Represented By Manfred Schroer
Joint Debtor(s):
DIANNE L HAGUE Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 61
Debtor(s):
Ryan J Sperry Represented By
Samer A Nahas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 69
Debtor(s):
Rosa Alvarez Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 136
Debtor(s):
Ernest B Galante Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Susan D Galante Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 144
Debtor(s):
Claudia Veronica Reyes-Olivares Represented By
Anthony E Contreras
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 55
Debtor(s):
Araceli Canela Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 73
Debtor(s):
Dinah Green Represented By
Tyson Takeuchi
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR) Rod (DS) Danielson (TR)
1:00 PM
Docket 123
Debtor(s):
Clinton Jerome White Represented By Michael E Clark Barry E Borowitz
Joint Debtor(s):
Dolores Estelle Green Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 60
Debtor(s):
Magadaleno Aguilar Martinez Represented By Frank J Alvarado
Lauro Nick Pacheco Jr.
Joint Debtor(s):
Sara Aguilar Ruiz Represented By Frank J Alvarado
Lauro Nick Pacheco Jr.
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 112
Debtor(s):
Luis Antonio Palomino Represented By David Lozano
Joint Debtor(s):
Mariella Roxana Palomino Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 64
Debtor(s):
Robert Pasquale Voce Represented By Michael E Clark Barry E Borowitz
Joint Debtor(s):
Kristine Raeanne Voce Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 124
Debtor(s):
Antonio Saavedra Represented By
Rabin J Pournazarian
Joint Debtor(s):
Genoveva Saavedra Represented By
Rabin J Pournazarian
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 51
Debtor(s):
Adolfo Ayala Represented By
Anthony Wilaras
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 35
Debtor(s):
Kyle Patrick Quisenberry Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 60
Debtor(s):
Desmond Anthony Townsend Represented By April E Roberts
Joint Debtor(s):
Lillian Carmen Townsend Represented By April E Roberts
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 73
Debtor(s):
Darrin Hammond Represented By Julie J Villalobos
Joint Debtor(s):
Sandra Hammond Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Wilbert F Anderson Represented By Hector C Perez
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 63
Debtor(s):
Jeanette Johnson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 60
Debtor(s):
Jesus Garcia Represented By
Luis G Torres
Joint Debtor(s):
Olivia Garcia Represented By
Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 59
Debtor(s):
James Randal Kenley Represented By Robert J Spitz
Joint Debtor(s):
Kathern Elizabeth Kenley Represented By Robert J Spitz
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 43
Debtor(s):
John Joseph Vasquez Represented By Tyson Takeuchi
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 110
Debtor(s):
Cecilia R Rodas Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
1:00 PM
Docket 65
Debtor(s):
Enrique Lopez Matias Represented By John F Brady Lisa H Robinson
Joint Debtor(s):
Teresa Duarte Matias Represented By John F Brady Lisa H Robinson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 134
Debtor(s):
Francisco Javier Medina Represented By Tamar Terzian
Joint Debtor(s):
Maria Guadalupe Medina Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 109
Debtor(s):
Carlos Enrique Mendoza Represented By John F Brady Lisa H Robinson
Joint Debtor(s):
Michelle Lea Mendoza Represented By John F Brady Lisa H Robinson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 61
Debtor(s):
David R. Roberts Represented By Javier H Castillo
Joint Debtor(s):
Crystal A Roberts Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 110
Debtor(s):
Ruben Estevan Avalos Represented By Todd L Turoci
Joint Debtor(s):
Lorraine Connie Avalos Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 75
Debtor(s):
Jennifer L. Kurtz Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 78
Debtor(s):
Gildardo R Herrera Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Stephanie D Herrera Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 51
Debtor(s):
Carlos Vincent Valdez Represented By Gregory M Shanfeld
Joint Debtor(s):
Grace G. Valdez Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 53
Debtor(s):
Thomas Michael Plouffe Sr. Represented By William Radcliffe
Joint Debtor(s):
Pamela Ann Plouffe Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 143
Debtor(s):
Clarence White Represented By Steven A Wolvek
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 149
Debtor(s):
Josue Luna Represented By
Jenny L Doling Summer M Shaw
Joint Debtor(s):
Fabiola Luna Represented By
Jenny L Doling Summer M Shaw
Trustee(s):
John P Pringle (TR) Pro Se
1:00 PM
Docket 176
Debtor(s):
Mildred Goodridge Crawford Represented By Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 80
Debtor(s):
Jose Castellanos Represented By Mark E Brenner
Joint Debtor(s):
Hiliana Castellanos Represented By Mark E Brenner
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 78
Debtor(s):
Norma E Pizana Represented By Ronald W Ask
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 40
Debtor(s):
Dennis Lynn Campbell Represented By Edward G Topolski
Joint Debtor(s):
Dawn Monique Campbell Represented By Edward G Topolski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 53
Debtor(s):
Hector M Rodriguez Represented By Michael A Younge
Joint Debtor(s):
Mary L Rodriguez Represented By Michael A Younge
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 118
Debtor(s):
Mitchell Jeffrey Summers Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Terra Carolina Summers Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 61
Debtor(s):
Armando Alonso Represented By
Ghada Helena Philips
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 64
Debtor(s):
Jacqulyn Ann Deniston Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 75
Debtor(s):
Ronnie Elroy Carter Represented By Michael E Clark Barry E Borowitz
Joint Debtor(s):
Cassandra Jean Carter Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 65
Debtor(s):
Jacob J Cannon Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Danielle M Cannon Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 60
Debtor(s):
Robert Anthony Maruffo Represented By Carey C Pickford
Joint Debtor(s):
Allison Marie Maruffo Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 58
Debtor(s):
Agnes Smith Represented By
James T Lillard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 60
Debtor(s):
Geofrey J Kitilya Represented By Tina H Trinh
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 110
Debtor(s):
Robert Wayne Cook Sr. Represented By Steven A Alpert
Joint Debtor(s):
Kelly Danielle Cook Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 67
Debtor(s):
Arnel De Castro Represented By Paul Y Lee
Joint Debtor(s):
Anna De Castro Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 108
Debtor(s):
Kalenga Patrick Munongo Represented By Paul Y Lee
Joint Debtor(s):
Janelle Nicole Munongo Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 115
Debtor(s):
Simon E. Williams Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 67
Debtor(s):
Raafat Georgy Represented By
Joseph R Manning Jr
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 137
Debtor(s):
Jimmie Lee Bracy Jr. Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 62
Debtor(s):
Silvia Vargas Represented By
Matthew D Resnik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 67
Debtor(s):
Tony P Trujillo Represented By Michael Smith
Joint Debtor(s):
Carlen M Trujillo Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 48
Debtor(s):
Deborah Lynn Gordon Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 58
Debtor(s):
John C Tapocik Represented By Stephen R Wade
W. Derek May
Joint Debtor(s):
Arisia D Tapocik Represented By Stephen R Wade
W. Derek May
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 92
Debtor(s):
Maricella Garcia Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 71
Debtor(s):
Remell J Johnson Represented By
Andrew Edward Smyth Stephen S Smyth William J Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 92
Debtor(s):
Diane Marie Harris Represented By M Erik Clark
Michael E Clark Nancy B Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 181
Debtor(s):
Jaelyn R Young Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 49
Debtor(s):
Sylvia Jimenez Gomez Represented By Leonard J Cravens
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 50
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 45
Debtor(s):
William J English Represented By Eric C Morris
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 75
Debtor(s):
Nicholas M. Morales Represented By George J Paukert
Joint Debtor(s):
Bertha A. Galvan Represented By George J Paukert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 98
Debtor(s):
Jose A Garcia Partida Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 65
Debtor(s):
David J Macias Represented By Marjorie M Johnson
Joint Debtor(s):
Martha Macias Represented By Marjorie M Johnson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 68
Debtor(s):
Alex Soto Represented By
Natalie A Alvarado
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 106
Debtor(s):
Derrick C Albalos Represented By David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 126
Debtor(s):
Leslie R Williams Represented By Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 42
Debtor(s):
Ernesto Alonso Gomez Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 51
Debtor(s):
Kenneth Mcewing Huff Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 75
Debtor(s):
Rosalie Estella Crouch Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 51
Debtor(s):
Benjamin A. Omaiye Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Susan G. Omaiye Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 40
Debtor(s):
Jose Luis Gutierrez Represented By Kelly Warren
Joint Debtor(s):
Patricia Gutierrez Represented By Kelly Warren
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 62
Debtor(s):
Jose Angel Gutierrez Hernandez Represented By
Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 85
Debtor(s):
Dennis Williams Represented By Nima S Vokshori
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 54
Debtor(s):
Richard Lee Harris Represented By Michael G Spector
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 66
Debtor(s):
Sheila Marie Dejesa Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 51
Debtor(s):
Jeffrey Dean Paxson Represented By Gregory M Shanfeld
Joint Debtor(s):
Connie Sue Paxson Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Siosifa Ma Ahoia Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 95
Debtor(s):
Martin Caballero Represented By Luis G Torres
Joint Debtor(s):
Clementina Caballero Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 60
Debtor(s):
Delfina Ramos Hernandez Represented By Edward G Topolski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 113
Debtor(s):
Rosa Partida Represented By
Mathew Alden
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 83
Debtor(s):
Leonardo Martinez Represented By
Inez Tinoco-Vaca
Joint Debtor(s):
Rosa Martinez Represented By
Inez Tinoco-Vaca
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 85
Debtor(s):
Richard Goodwin Jr Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
1:00 PM
Docket 64
Debtor(s):
Imelda Tapia Represented By
Anthony Wilaras
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 50
Debtor(s):
Matilde Lopez Represented By Luis G Torres
Joint Debtor(s):
Rene Zamora Represented By
Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 33
Debtor(s):
Raul Ruelas Represented By
Patricia M Ashcraft
Joint Debtor(s):
Laura Ruelas Represented By
Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 105
Debtor(s):
Rigoberto Aguilar Represented By Rebecca Tomilowitz
Joint Debtor(s):
Maria Aguilar Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 38
Debtor(s):
Gary Thomas Sanderson Represented By Todd L Turoci
Joint Debtor(s):
Mari Lucianne Sanderson Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 62
Debtor(s):
Thomas Rodriguez Alcala Represented By Halli B Heston
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 108
Debtor(s):
James Lange Represented By
Michael Smith Sundee M Teeple Craig K Streed
Joint Debtor(s):
Michelle Lange Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 48
Debtor(s):
Michelle Ann Maki Represented By Joel M Feinstein
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 49
Debtor(s):
Wilfred David Pascual Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 164
Debtor(s):
Vivian Munson Represented By Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 55
Debtor(s):
Evelyn Espudo McCorkle Represented By Lazaro E Fernandez
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 103
Debtor(s):
Liliana Gomez Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 112
Debtor(s):
Frederick Arnett Mikel Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 81
Debtor(s):
Michael Lee Barnes Represented By Todd L Turoci
Joint Debtor(s):
Belinda Ann Barnes Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 86
Debtor(s):
Rula Nino Represented By
Devin Sawdayi
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 69
Debtor(s):
Timm Bruce Bennett Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 106
Debtor(s):
Alan G Olsen Represented By
Michael Smith Craig K Streed
Joint Debtor(s):
Pamela J Olsen Represented By Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 71
Debtor(s):
Carlos Alberto Garcia Represented By Manfred Schroer
Joint Debtor(s):
Maria Gonzalez-Garcia Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 57
Debtor(s):
Jesus Padilla Simental Represented By Bryn C Deb
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 126
Debtor(s):
Keith Raynard Burton Represented By
Rabin J Pournazarian
Joint Debtor(s):
Brigette Michelle Burton Represented By
Rabin J Pournazarian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 64
Debtor(s):
William Meineke Represented By Todd B Becker
Joint Debtor(s):
Kathie Meineke Represented By Todd B Becker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 77
Debtor(s):
Juan C Rodriguez Represented By Michael Smith
Joint Debtor(s):
Cynthia J Rodriguez Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Jose Agustin Nuno-Anaya Represented By April E Roberts
Joint Debtor(s):
Nelly Nuno Represented By
April E Roberts
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Michael Lionel Story Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 86
Debtor(s):
Jose L Rangel Represented By
Lisa H Robinson John F Brady
Joint Debtor(s):
Rosa M Rangel Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 53
Debtor(s):
Patricia Eagan Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 26
Debtor(s):
Roque Campos Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 52
Debtor(s):
Eduardo Nuno Represented By James B Smith
Joint Debtor(s):
Lilia Briseno Represented By
James B Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 144
Debtor(s):
Christopher John Helme Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 80
Debtor(s):
Trinidad Galindo Represented By Michael Smith
Joint Debtor(s):
Erika R. Galindo Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 81
Debtor(s):
Joseph Levi Riddle Represented By
L. Tegan Rodkey
Joint Debtor(s):
Jessica Sue Riddle Represented By
L. Tegan Rodkey
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 74
Debtor(s):
Joe A Pickens II Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 50
Debtor(s):
Maria Isabel Aguirre-Ordaz Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Edilberto Aguirre-Mendoza Represented By Matthew D Resnik
Joint Debtor(s):
Alba Zacarias-Cebrero Represented By Matthew D Resnik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 52
Debtor(s):
Leslie A. Larson Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 38
Debtor(s):
Kathleen A Madero Represented By Yoon O Ham
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 72
Debtor(s):
Anthony E Turkson Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Dale Nohre Represented By
Gary J Holt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 140
Debtor(s):
Jose Ceja Jr Represented By
Dana Travis
Joint Debtor(s):
Chasity Ann Ceja Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Presciliano Perez Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 54
Debtor(s):
Ramiro J Cruz Represented By Summer M Shaw Jenny L Doling
Joint Debtor(s):
Norma Idalia Cruz Represented By Summer M Shaw Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 66
Debtor(s):
Christopher Lee Sumners Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 30
Debtor(s):
Irene L. Edeza Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 55
Debtor(s):
Vincent K Jones Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 132
Debtor(s):
Vonetta M Mays Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 80
Debtor(s):
Alvin Brown Represented By
Daniel King
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Alfonso Arzola Represented By David Lozano
Joint Debtor(s):
Mary Arzola Represented By
David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 61
Debtor(s):
Franklin Merl Thomas King Represented By Daniel King
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 45
Debtor(s):
Anita R Giroth Represented By Arturo A Burga
Trustee(s):
Rod (MH) Danielson (TR) Represented By Arturo A Burga
1:00 PM
Docket 80
Debtor(s):
Efrain Falcon Represented By Daniela P Romero
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 75
Debtor(s):
William R Parker Represented By Julie J Villalobos
Joint Debtor(s):
Cheryl Parker Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 49
Debtor(s):
David Anthony Lopez Jr. Represented By Heather J Canning Barry E Borowitz
Joint Debtor(s):
Linda Cristine Lopez Represented By Heather J Canning Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 51
Debtor(s):
Allen J Sheerin Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Rafael Bello Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 33
Debtor(s):
Delkys Hyde Represented By
David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 55
Debtor(s):
George P. Solorio Jr. Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 30
Debtor(s):
John Stephen Puddy Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
James Anthony Fenwrick Represented By Marjorie M Johnson
Joint Debtor(s):
Stacey Pleasant Fenwrick Represented By Marjorie M Johnson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Brenda Morgan Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 46
Debtor(s):
Elmer H Brady Represented By Julie J Villalobos
Joint Debtor(s):
Judy L Brady Represented By
Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 118
Debtor(s):
Angelica Teresa Anguiano Represented By
Rabin J Pournazarian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 154
Debtor(s):
Michael Brian Goodrich Sr. Represented By Christopher J Langley
Joint Debtor(s):
Kimberly JoAnn Carter Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 98
Debtor(s):
Cresencio Ramirez Ramirez Represented By John F Brady
Joint Debtor(s):
Maria Olga Ramirez Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 40
Debtor(s):
Maria C. Ignacio Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 52
Debtor(s):
Joe Roger Montes Represented By Stephen R Wade
W. Derek May
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 38
Debtor(s):
Angelique Camille Miranda-Viola Represented By
Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 98
Debtor(s):
Sean A. Davis Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 173
Debtor(s):
Eduardo Javier Meza Represented By Dana Travis
Joint Debtor(s):
Margaret Ruth Morales Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 75
Debtor(s):
Genaro Flores Represented By Luis G Torres
Joint Debtor(s):
Salome Flores Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 48
Debtor(s):
Carol Elizabeth Tenney Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Jesus Aguilar Represented By
Luis G Torres
Joint Debtor(s):
Maria G Aguilar Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 27
Debtor(s):
Philipp Johannes Borner Represented By
D Justin Harelik
Joint Debtor(s):
Audrey Faustorilla Borner Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 53
Debtor(s):
Juan M Madueno Carrizoza Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Miguel Vivar Represented By
Rebecca Tomilowitz
Joint Debtor(s):
Maria Vivar Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 37
Debtor(s):
Jose R. Gonzalez Represented By Juanita V Miller
Joint Debtor(s):
Maria S. Gonzalez Represented By Juanita V Miller
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 54
Debtor(s):
Zachary Lee Nowak Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 37
Debtor(s):
Lilia Ivethe Fong Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 50
Debtor(s):
Rama Cokrohadian Suhari Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 90
Debtor(s):
Marquis George Powell Pro Se
Joint Debtor(s):
Judy Ann Powell Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Lewis Halfbreed Morris Represented By David Lozano
Joint Debtor(s):
Debra Denise Morris Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 38
Debtor(s):
Sergio Contreras Contreras Sr. Represented By David Lozano
Joint Debtor(s):
Myrian Iliana Contreras Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 45
Debtor(s):
Robert R. Gentile Represented By Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 43
Debtor(s):
Gregorio Orozco Sotelo Represented By
Lisa F Collins-Williams
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 43
Debtor(s):
Eric Kissell Represented By
William J Howell
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 27
Debtor(s):
Primitivo Salvador Hernandez Represented By
James Geoffrey Beirne
Joint Debtor(s):
Maria D Salvador Hernandez Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 49
Debtor(s):
Guillermo Jorge Fitzmaurice Represented By Ronald W Ask
Joint Debtor(s):
Emilia Fitzmaurice Represented By Ronald W Ask
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 43
Debtor(s):
Daniel J Hedlund Represented By David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Tony Sutor Represented By
Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 77
Debtor(s):
Eddie Hernandez Represented By Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 85
Debtor(s):
Adrienne J Garcelli Represented By Andy C Warshaw
Joint Debtor(s):
Paul Garcelli Represented By
Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 139
Debtor(s):
Chi Kan Yu Represented By
Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 37
Debtor(s):
Gabriel Francisco Nieves Represented By Brian J Soo-Hoo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 27
Debtor(s):
Mark A. Aceves Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 78
Debtor(s):
Pablo Javier Solis Jr. Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Norma Alicia Solis Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 72
Debtor(s):
Shyla L. Montgomery Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 50
Debtor(s):
Lyle W Fields Represented By
Lauren Rode
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 32
Debtor(s):
Lisa L Hughes Represented By David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 89
Debtor(s):
Jonathan William Nicastro Represented By
Rabin J Pournazarian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 34
Debtor(s):
Catherine L Mires Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 83
Debtor(s):
Donald Leroy Woodruff Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 51
Debtor(s):
Margaret Crain Represented By Lauren Rode
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 46
Debtor(s):
Saul Lara Sanchez Represented By Brian J Soo-Hoo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Cecilia Orozco Represented By Majid Safaie
Joint Debtor(s):
Sergio Orozco Represented By Majid Safaie
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 49
Debtor(s):
Melvin T. Marks Represented By
James D. Hornbuckle
Joint Debtor(s):
Maria S Peponas Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 45
Debtor(s):
Adolfo Gonzalez Represented By Luis G Torres
Joint Debtor(s):
Angelica Gonzalez Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 60
Debtor(s):
Shahla Salamat Represented By Amid Bahadori
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 62
Debtor(s):
Juan Manuel Plascencia De La Torre Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 59
Debtor(s):
Joanne Casillas Represented By Paul Horn
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Ronald Wilbur Lake Represented By David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 55
Debtor(s):
Jose D Quinones Represented By
Jessica De Anda Leon
Joint Debtor(s):
Ana M Quinones Represented By
Jessica De Anda Leon
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Efrain Figueroa Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 45
Debtor(s):
Janel M Faulks Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 57
Debtor(s):
Lynn Anne Rellins Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Abdolreza Panahandeh Represented By Javier H Castillo
Joint Debtor(s):
Nosratolmolook Panahandeh Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 69
Debtor(s):
ROBERT A HAGUE Represented By Manfred Schroer
Joint Debtor(s):
DIANNE L HAGUE Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 74
Debtor(s):
Garan Bales Represented By
Amanda G Billyard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Juan Figueroa Represented By
Inez Tinoco-Vaca
Joint Debtor(s):
Nancy Figueroa Represented By
Inez Tinoco-Vaca
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 55
Debtor(s):
Juana Mora Represented By
Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 39
Debtor(s):
Darna Poole Represented By
Todd B Becker
Joint Debtor(s):
Jerry Poole Represented By
Todd B Becker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 47
Debtor(s):
Maria Lourdes Magallon Represented By Leonard Pena
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 27
Debtor(s):
Jessica Megan Gillen Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 34
Debtor(s):
Gustavo Valadez Represented By Eliza Ghanooni
Joint Debtor(s):
Elizabeth Ann Valadez Represented By Eliza Ghanooni
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 44
Debtor(s):
Valicia LaShawn Fennell Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 70
Debtor(s):
Jose Luis Ceballos Represented By David Lozano
Joint Debtor(s):
Edelmira Castro Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 34
Debtor(s):
Ernestine Steppes Represented By Mathew Alden
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 43
Debtor(s):
Michael Joseph Fodor Represented By Michael R Totaro
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 32
Debtor(s):
Maria Madrid Represented By Lauren Rode
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Ryan J. Watson Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 23
Debtor(s):
Jose Luis Beltran Represented By Carey C Pickford
Joint Debtor(s):
Martha Mora Represented By
Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 32
Debtor(s):
Arturo Villagrana Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 60
Debtor(s):
Willie Sanford Jr. Represented By Gary J Holt
Joint Debtor(s):
Tiera M Williams Represented By Gary J Holt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 52
Debtor(s):
Natalie G Massie Represented By Kevin M Cortright
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 23
Debtor(s):
Kenneth L Salser Represented By Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 62
Debtor(s):
Efren Rubio Represented By
Inez Tinoco-Vaca
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 43
Debtor(s):
Ruby Lee Frazier Represented By Michael R Totaro
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 53
Debtor(s):
Teresa M. Dearmond Represented By Amanda G Billyard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 46
Debtor(s):
Horacio Valdez Represented By David Lozano
Joint Debtor(s):
Leticia Isabel Valdez Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Michael J. Covington II Represented By Ronald W Ask
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 42
Debtor(s):
Sherry Ann Beardsley Represented By Jeffrey D Larkin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 42
Debtor(s):
Alberto Plascencia Represented By Paul Y Lee
Joint Debtor(s):
Martina Plascencia Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 34
Debtor(s):
Robert P Contreras Represented By Michael Smith
Joint Debtor(s):
Marie G Contreras Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 36
Debtor(s):
Noel Mallari Represented By
David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Benito Gonzalez Cardenas Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 23
Debtor(s):
Deborah D. Pierce Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 47
Debtor(s):
Martin Linares Represented By Michael Smith Craig K Streed
Joint Debtor(s):
Elvia Linares Represented By
Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 58
Debtor(s):
Donald L Maddox Represented By Michael Smith Sundee M Teeple
Joint Debtor(s):
Lisa A Maddox Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 25
Debtor(s):
Charles M. Wallace Jr. Represented By Robert W Ripley
Joint Debtor(s):
Raquel A. Wallace Represented By Robert W Ripley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Sally Michelle Greene Represented By Sunita N Sood
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 32
Debtor(s):
Donald Leslie Ogden Represented By Timothy S Huyck
Joint Debtor(s):
Susan Kay Ogden Represented By Timothy S Huyck
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 57
Debtor(s):
Brent Duane Larson Represented By Carey C Pickford
Joint Debtor(s):
Sarah Marnet Larson Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 44
Debtor(s):
Juan Rene Fullen Jr. Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 24
Debtor(s):
Samuel Garcia Represented By
James Geoffrey Beirne
Joint Debtor(s):
Claudia Garcia Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Richard M. Orellano II Represented By Patricia M Ashcraft
Joint Debtor(s):
Tifany Orellano Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Arlene Wilson Jackson Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 40
Debtor(s):
Charles Bowen Blanton Represented By Michael E Clark
Joint Debtor(s):
Heddy Maria Blanton Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 45
Debtor(s):
Pablo Flores Represented By
Anthony P Cara
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 28
Debtor(s):
David Becerra Represented By
Glenn Ward Calsada
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 57
Debtor(s):
Jesus Danny Ontiveros III Represented By Gary S Saunders
Joint Debtor(s):
Marie Irene Ontiveros Represented By Gary S Saunders
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 49
Debtor(s):
Dexter Humphrey Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 54
Debtor(s):
Donald Lloyd Maki Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 25
Debtor(s):
Rigoberto Damian Ceja Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 91
Debtor(s):
Steven C. Alvarez Represented By Michael Jay Berger
Joint Debtor(s):
Catalina J Alvarez Represented By Michael Jay Berger
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 77
Debtor(s):
Roger C Jefferson Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 37
Debtor(s):
Nicholas Asamoa Represented By Stephen S Smyth William J Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Kendra Susan Lewkow Represented By Morton J Grabel
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 62
Debtor(s):
Peter J. Giummo Represented By Bruce D White
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 51
Debtor(s):
Raul Navarrette Represented By Paul Y Lee
Joint Debtor(s):
Leslie Navarrette Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 42
Debtor(s):
Matthew Thomas Harper Represented By Norma Duenas
Joint Debtor(s):
Robin Jean Harper Represented By Norma Duenas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 37
Debtor(s):
Tanyua A Gates-Holmes Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 37
Debtor(s):
Anthony James Parker Represented By Michael E Clark Barry E Borowitz
Joint Debtor(s):
Cynthia Parker Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 23
Debtor(s):
Russell Steven Morrill Represented By Phillip Myer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 28
Debtor(s):
Zoraida Molina Represented By Samer A Nahas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 64
Debtor(s):
Timothy Wade Jones Represented By Norma Duenas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 24
Debtor(s):
Tony Apodaca Represented By Julie J Villalobos
Joint Debtor(s):
Lydia Apodaca Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 49
Debtor(s):
Oscar Chavez Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 98
Debtor(s):
Edward Edmund Zozaya Represented By Dana Travis
Joint Debtor(s):
Georgia Parrilla Zozaya Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 36
Debtor(s):
Frank Tan Represented By
Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 52
Debtor(s):
Anderson L Pepper Represented By Nancy Korompis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 71
Debtor(s):
Cynthia L Tucker Represented By Claudia L Phillips
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 73
Debtor(s):
Katrina Renee McDowell Represented By
S Renee Sawyer Blume Christopher J Langley Matthew D Resnik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 36
Debtor(s):
Carmen Saucedo Represented By Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 63
Debtor(s):
Willie Elvin Chambers Represented By Heather J Canning Barry E Borowitz
Joint Debtor(s):
Marlene Shirley Chambers Represented By Heather J Canning Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 44
Debtor(s):
Mary Jones Represented By
S Renee Sawyer Blume Matthew D Resnik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 47
Debtor(s):
Ashley Douglas Faulstich Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 76
Debtor(s):
Elizabeth T Baker Represented By Nancy Korompis
Trustee(s):
John P Pringle (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Robert Gene Brantley Represented By Steven A Alpert
Joint Debtor(s):
Kim Yvette Brantley Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 24
Debtor(s):
Moises Martinez Represented By
Inez Tinoco-Vaca
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 33
Debtor(s):
Jeanie Sullivan Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Marc Meisenheimer Represented By Lionel E Giron Kevin Tang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 50
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 54
Debtor(s):
Juan Jose Franco Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 68
Debtor(s):
Jose Luis Rojas Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Isaias Melo Represented By
Rebecca Tomilowitz
Joint Debtor(s):
Rosa Melo Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 24
Debtor(s):
Ana M. Oliver Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 32
Debtor(s):
Alexis I Barahona Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 38
Debtor(s):
John Wesley Wilson Jr. Represented By Julie J Villalobos
Joint Debtor(s):
Michelle Janet Wilson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 36
Debtor(s):
Victor Quito Rabara Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 39
Debtor(s):
Chase D Chung Represented By Daniel C Sever
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 55
Debtor(s):
Pedro Canchola Represented By Leonard Pena
Joint Debtor(s):
Esther Valle Canchola Represented By Leonard Pena
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 34
Debtor(s):
John D Castro Jr Represented By Chris A Mullen
Joint Debtor(s):
Jennifer Manda Castro Represented By Chris A Mullen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Ingeborg Margarete Preisendanz Represented By
Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Alfredo Navas Represented By Sunita N Sood
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Barbara Rammell Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 34
Debtor(s):
Debora Susan Johnson Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 25
Debtor(s):
Octavio Rubio Mata Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 19
Debtor(s):
Pamela Lynn King Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 20
Debtor(s):
Sharon Burnom Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Jerome D Williams Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 39
Debtor(s):
Melanie Lourdes Davis Represented By Gary S Saunders
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 23
Debtor(s):
Sonia Galicia Represented By
Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 30
Debtor(s):
Timothy Leonard Johnson Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Fonda Cormier Represented By Phillip Myer
Trustee(s):
Robert Whitmore (TR) Pro Se
1:00 PM
Docket 36
Debtor(s):
Jeremy Joseph Salas Represented By Robert W Ripley
Joint Debtor(s):
Ronda-Sue Alice Marie Salas Represented By Robert W Ripley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Charles Mickey Alligood Represented By Neil R Hedtke
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Richard LaFayatte Sellers Represented By Marjorie M Johnson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 28
Debtor(s):
Deborah Catherine Hamernik Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Sandra M. Hankins Represented By Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Donald John Hanson Represented By Manfred Schroer
Joint Debtor(s):
Mary Merzella Hanson Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 36
Debtor(s):
Robert Ibay Orina Represented By
Timothy L McCandless
Joint Debtor(s):
Emmyruth Amizola Orina Represented By
Timothy L McCandless
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 21
Debtor(s):
David J Darling Represented By April E Roberts
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Matthew Bruce Represented By Christopher Hewitt
Joint Debtor(s):
Scott Bruce Represented By
Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 26
Debtor(s):
Gabriel Cruz Represented By
Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 28
Debtor(s):
Joseph Paul Nassef Represented By
Bryant C MacDonald
Joint Debtor(s):
Lynne Marie Nassef Represented By
Bryant C MacDonald
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 27
Debtor(s):
Ana I Murguia Owens Represented By Brian J Soo-Hoo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 24
Debtor(s):
Winnie Marie Quanstrom Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 48
Debtor(s):
David Paul Zamarripa Represented By Javier H Castillo
Joint Debtor(s):
Ruth Zamarripa Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 33
Debtor(s):
Lisa Allison Wells Represented By Roland D Tweed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 26
Debtor(s):
Idalia Temblador-Baisa Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 30
Debtor(s):
Thong Huu Nguyen Represented By Yoon O Ham
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 24
Debtor(s):
Christopher Higgs Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 25
Debtor(s):
Irma Hernandez Represented By David T Egli
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 20
Debtor(s):
Reynauldo J Pennywell Represented By Michael Smith
Joint Debtor(s):
Joyce D Pennywell Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 26
Debtor(s):
Don Stevie Gurule Represented By Dana Travis
Joint Debtor(s):
Elaine Louise Gurule Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 27
Debtor(s):
Gabriel Simon Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 33
Debtor(s):
Luis Fernando Buenrostro Represented By Sunita N Sood
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Bartholemew James Ratner Represented By
H Christopher Coburn
Joint Debtor(s):
Pamela J Armijo-Ratner Represented By
H Christopher Coburn
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 41
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 32
Debtor(s):
Grady Singleton III Represented By Paul Y Lee
Joint Debtor(s):
Michelle Singleton Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 20
Debtor(s):
Juan Carlos Lopez Represented By Stephen D Brittain
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Tracie Cornett-Martin Represented By Nathan Fransen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 27
Debtor(s):
Steven Leimel Represented By Paul Y Lee
Joint Debtor(s):
Adela Leimel Represented By
Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 25
Debtor(s):
Loreen J. Traister Represented By Dina Farhat
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 29
Debtor(s):
Gabriel Cortes Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 32
Debtor(s):
Norma Brennan Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 18
Debtor(s):
Patricia Lynn Fickes Represented By Nancy Korompis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 18
Debtor(s):
Felipe Morales Represented By Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 36
Debtor(s):
Joe Nathan Banks Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 24
Debtor(s):
Joanne Saycon Represented By Terrence Fantauzzi
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 31
Debtor(s):
Jose E Toledo Represented By
James Geoffrey Beirne
Joint Debtor(s):
Antonia Toledo Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 19
Debtor(s):
Xiomara Swiatkowski Represented By Robert W Ripley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 44
Debtor(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 32
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 23
Debtor(s):
William Fuentes Represented By Marlin Branstetter
Joint Debtor(s):
Martha C Orozco de Fuentes Represented By Marlin Branstetter
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Willie J Brooks Represented By Kevin Tang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 33
Debtor(s):
Manuel Huertas Represented By Marcella Lucente
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 24
Debtor(s):
Guillermo Zamudio Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 28
Debtor(s):
Brian Tafolla Represented By
Paul Y Lee
Joint Debtor(s):
Katie Tafolla Represented By
Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 37
Debtor(s):
Frank Castodio Represented By Lauren Rode
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 35
Debtor(s):
Michael Montoya Represented By Suzette Douglas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 27
Debtor(s):
Luis A Jovel Represented By
Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Docket 22
Debtor(s):
Gilbert R Nava Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
3:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
From: 5/30/17, 6/19/17 Also #347
EH
Docket 37
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Represented By Kevin R Carlin
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
3:00 PM
Gotte Electric, Inc. Pro Se
Employment Development Represented By
Elisa B Wolfe-Donato
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Movant(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
3:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
From: 5/16/17, 6/19/17 Also #346
EH
Docket 1
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Represented By Kevin R Carlin
Bangerter Frazier & Graff PC Represented By
3:00 PM
Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
Employment Development Represented By
Elisa B Wolfe-Donato
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Another Meridian Company, LLC Represented By
James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr
3:00 PM
From: 3/7/17, 7/11/17 Also #349 & #350
EH
Docket 630
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
3:00 PM
From: 3/7/17, 7/11/17 Also #348 & #350
EH
Docket 630
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
3:00 PM
From: 3/7/17, 7/11/17 Also #348 & #349
EH
Docket 630
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
10:00 AM
MOVANT: USA BANK NATIONAL ASSOCIATION
From: 4/4/17, 5/16/17, 6/20/17 EH
Docket 68
- NONE LISTED -
Debtor(s):
Dina Guadalupe Garay Represented By Aalok Sikand
Vito Torchia - DISBARRED -
Movant(s):
U.S. BANK NATIONAL Represented By Megan E Lees
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST CO
From: 5/9/17, 6/20/17 EH
Docket 110
Service is Proper Opposition: Yes
Subject to cure or APO discussions, the Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Zerry B Holefield Represented By
Dale Parham - INACTIVE - Michael Smith
Movant(s):
Deutsche Bank National Trust Represented By
Joely Khanh Linh Bui Mark T. Domeyer Daniel K Fujimoto
10:00 AM
Trustee(s):
Caren J Castle
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA
From: 6/20/17 EH
Docket 92
June 20, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and ¶3. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Mark A Rowley Represented By
Don E Somerville Tate C Casey
Joint Debtor(s):
Catherine C Rowley Represented By
Don E Somerville Tate C Casey
10:00 AM
Movant(s):
HSBC Bank USA, National Represented By Alexander K Lee
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: DITECH FINANCIAL LLC
EH
Docket 80
July 25, 2017
Service: Proper Opposition: Yes
Subject to adequate protection discussions, the Court is inclined to GRANT relief from the stay under § 362(d)(1) based on failure to make post-petition payments. GRANT waiver of 4001(a)(3) stay and request under ¶ 3. Request for APO is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Raphael A Lavine Represented By Frank X Ruggier Steven A Alpert
Joint Debtor(s):
Marcia Eurita Lavine Represented By Frank X Ruggier Steven A Alpert
10:00 AM
Movant(s):
Ditech Financial LLC Represented By Jeff Rawlings Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
EH
Docket 92
July 25, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on failure to make post-petition payments. GRANT waiver of 4001(a)(3) stay and requests under ¶¶ 3 and 12. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Mercedes S Damoo Represented By Rehan Saeed
Joint Debtor(s):
Muralledharan Damoo Represented By Rehan Saeed
Movant(s):
WELLS FARGO BANK, N.A. Represented By
Dane W Exnowski
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 5/9/17, 6/20/17 EH
Docket 47
Service is Proper Opposition: Yes
Parties to advise Court regarding adequate protection discussions.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
10:00 AM
Movant(s):
WELLS FARGO BANK, N. A. Represented By
Dane W Exnowski Melissa A Anderson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FCI LENDER SERVICES, INC.
EH
Docket 48
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on Debtor’s failure to make required postpetition payments. DENY relief under § 362(d)(2) based on Debtor’s lack of equity in the property because Movant failed to fill in the required information in ¶11(h) of the Real Property Declaration from Debtor’s attached schedules. GRANT relief under ¶2 and ¶3. GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Mario Eduardo Rojo Represented By Phillip Myer
Joint Debtor(s):
Lourdes Rojo Represented By Phillip Myer
Movant(s):
FCI Lender Services, Inc., servicing Represented By
10:00 AM
Trustee(s):
Edward G Schloss
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
From: 4/25/17, 6/20/17 EH
Docket 46
Tentative Ruling:
Service is Proper Opposition: Yes
While relief from stay appears warranted, parties to discuss adequate protection if amounts in default are not fully cured by hearing.
APPEARANCES REQUIRED.
Debtor(s):
Antoine Williams Represented By Gary Leibowitz
Movant(s):
U.S. Bank National Association, as Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
10:00 AM
MOVANT: PNC BANK NATIONAL ASSOCIATION
EH
Docket 26
July 25, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on failure to make post-petition payments. GRANT waiver of 4001(a)(3) stay and requests under ¶¶ 3, 6, and 12.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Kendra Susan Lewkow Represented By Morton J Grabel
Movant(s):
PNC Bank, National Association Represented By
Kristin A Zilberstein Sarah C McClain Kelly M Raftery
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SETERUS, INC.
EH
Docket 41
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on Debtor’s insufficient equity cushion. GRANT relief under ¶2, ¶3, and ¶12. GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Gena Grossman Represented By Robert L Firth
Movant(s):
Seterus Inc. as the authorized Represented By James F Lewin
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
From: 6/27/17, 7/11/17 EH
Docket 34
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT relief from the § 1301(a) stay. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3 and 12.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Carlos Gutierrez Represented By Patricia A Mireles
Joint Debtor(s):
Josefina Gutierrez Represented By Patricia A Mireles
10:00 AM
Movant(s):
Wells Fargo Bank, N.A. Represented By
Kristin A Zilberstein Kelly M Raftery Oneika White-Dovlo Nancy L Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: USA WASTE OF CALIFORNIA, INC
EH
Docket 77
07/25/2017
BACKGROUND
On August 30, 2016 ("Petition Date"), Dispatch Transportation LLC ("Debtor") filed its petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee").
On April 6, 2017, USA Waste of California, Inc. ("USA Waste") filed its Motion for an Order Authorizing the Examination of Craig Johnson and the Issuance of Subpoenas Duces Tecum to Commodity Trucking Acquisition, LLC ("CTA") and Craig Johnson Pursuant to Fed.R. Bankr.P. 2004 ("2004 Motion"). USA Waste brought its Motion on the basis that it believes the Debtor’s case was filed in bad faith. Specifically, USA Waste believes the Debtor’s asserts were transferred prepetition to CTA so that the Debtor could then file bankruptcy and discharge debts without having to liquidate its assets. In support, USA Waste asserts that CTA is run by the same managers, at the same location, with the same assets, and with representation of the same counsel as the Debtor.
In 2013, USA Waste commenced a lawsuit against the Debtor for Intentional Interference with Contractual Relations and for Unfair Competition (the "State Court Action"). Discovery was conducted and a motion for summary judgment was filed by the Debtor which was denied by the trial court. The Superior Court scheduled trial for August 2016 but then trailed the trial to September 2016. The instant petition was filed on August 30, 2016 – staying USA Waste’s litigation against the Debtor.
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On June 27, 2017, USA Waste filed its Motion for Relief from the Automatic Stay – Action in Non-Bankruptcy Forum ("Motion") seeking an order modifying the automatic stay to permit USA Waste to proceed under nonbankruptcy law to enforce its remedies to proceed to final judgment in the State Court Action with the express limitation that enforcement of any final judgment shall be limited to proceeding against the Debtor as to property or earnings that are not property of the bankruptcy estate. (Docket No. 80, Proposed Order).
On July 11, 2017, the Debtor and CTA filed oppositions to the Motion. On July 18, 2017, USA Waste filed an Omnibus Reply. (Note: initially, an opposition had also been filed by interested party L.A. Arena Funding, LLC. However, that opposition was subsequently withdrawn.)
LEGAL STANDARD
To obtain relief from the automatic stay, the party seeking relief must first establish a prima facie case that "cause" exists for relief under § 362(d)(1). Id. Once a prima facie case has been established, the burden shifts to the debtor to show that relief from the stay is unwarranted. Id. If the movant fails to meet its initial burden to demonstrate cause, relief from the automatic stay should be denied. Id.
The Curtis Factors
Courts have identified various factors relevant to determining whether the stay should be lifted to allow a creditor to continue pending litigation in a non-bankruptcy forum. The bankruptcy court in the case of In re Curtis, 40 B.R. 795 (Bankr. D. Utah 1984) set forth a non-exclusive 12-factor test established to determine whether relief from stay to permit the pending litigation to continue in another forum is appropriate. Id. at 799-80 (cited with approval in In re Plumberex Specialty Prod., Inc., 311 B.R. 551, 559 (Bankr. C.D. Cal. 2004) and Kronemyer v. American Contractors Indem. Co. (In re Kronemyer), 405 B.R. 915, 921 (9th Cir. BAP 2009)).
The twelve factors include:
Whether the relief will result in a partial or complete resolution of the issues;
The lack of any connection with or interference with the bankruptcy case;
Whether the foreign proceeding involves the debtor
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as a fiduciary;
Whether a specialized tribunal has been established to hear the particular cause of action and whether that tribunal has the expertise to hear such cases;
Whether the debtor's insurance carrier has assumed full financial responsibility for defending the litigation;
Whether the action essentially involves third parties, and the debtor functions only as a bailee or conduit for the goods or proceeds in question;
Whether the litigation in another forum would prejudice the interests of other creditors, the creditors' committee and other interested parties;
Whether the judgment claim arising from the foreign action is subject to equitable subordination under Section 510(c);
Whether movant's success in the foreign proceeding would result in a judicial lien avoidable by the debtor under Section 522(f);
The interests of judicial economy and the expeditious and economical determination of litigation for the parties;
Whether the foreign proceedings have progressed to the point where the parties are prepared for trial, and
The impact of the stay on the parties and the "balance of hurt."
In re Curtis, 40 B.R. at 799-80. Not all of the twelve Curtis factors are relevant in every case. In re Plumberex Specialty Prod., Inc., 311 B.R. at 560 (citations omitted). Nor is a court required to give each of the Curtis factors equal weight in making its determination. Id. Furthermore, the Ninth Circuit has held that grounds for granting relief to proceed in another forum are left to discretion of judge. In re Castlerock Properties, 781 F.2d 159,163 (9th Cir. 1986).
DISCUSSION
As a threshold matter, the Court need not resolve the factual disputes related to whether misrepresentations have been made about CTA’s running of the Manning Pit
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and other related disputes. The Court shall instead turn to the Curtis factors to determine whether relief from stay is warranted at this juncture:
Whether the relief will result in a partial or complete resolution of the issues As to this first factor, the Court finds that adjudication of the State Court Action is likely to result in a complete resolution of the issues between USA Waste and the bankruptcy estate. What will remain unresolved is the issue of enforcement of any judgment against third parties – including CTA. However, given that no cognizable argument has made that the dispute between CTA and USA Waste is likely to impact the bankruptcy estate other than by potentially reducing any potential claim it has against the estate, this factor weighs in favor of granting relief from stay.
The lack of any connection with or interference with the bankruptcy case The Debtor asserts that there is no reason why the dispute between the parties cannot be resolved via the bankruptcy claims objection process. However, the Debtor’s characterization of the dispute is not so simple. There has been no dispute that the dispute between USA Waste and the Debtor was at the trial stage in the Superior Court. As such, it is logical that the Superior Court is in a better position to finally resolve any issues related to the claim of USA Waste than the bankruptcy court. This factor weighs in favor of granting relief from stay.
Whether the foreign proceeding involves the debtor as a fiduciary
This factor is not applicable here.
Whether a specialized tribunal has been established to hear the particular cause of action and whether that tribunal has the expertise to hear such cases
The Superior Court has had the benefit of developing specific knowledge regarding the issues related to the dispute between the parties since the State Court Action was filed in 2013. Its specific knowledge of the issues in dispute weighs in favor of the granting of relief.
Whether the debtor's insurance carrier has assumed full financial responsibility for defending the litigation
There is no assertion that the Debtor has any insurance available to pay claims that are the subject of the dispute. However, USA Waste has agreed to limit
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enforcement of any judgment against only non-estate property. This factor weighs in favor of granting relief from stay.
Whether the action essentially involves third parties, and the debtor functions only as a bailee or conduit for the goods or proceeds in question;
The State Court Action directly involves the Debtor. This factor weighs against granting relief from stay. The Court is cognizant that as a defunct corporation with few, if any, assets available to the defense of the State Court Action, that the Debtor may be at a disadvantage at trial in the Superior Court. Additionally, at present it appears that the Trustee is unlikely to expend estate resources on the defense of the Debtor. However, given CTA’s strong interest in defending the Debtor in the State Court Action to avoid future litigation as to any potential successor and/or alter ego claims by USA Waste, the Court finds that this factor weighs in favor of granting relief from the automatic stay.
Whether the litigation in another forum would prejudice the interests of other creditors, the creditors' committee and other interested parties
There has been no indication that any party would suffer legal prejudice from permitting the State Court Action to proceed.
Whether the judgment claim arising from the foreign action is subject to equitable subordination under Section 510(c)
Seemingly this factor is inapplicable.
Whether movant's success in the foreign proceeding would result in a judicial lien avoidable by the debtor under Section 522(f)
Seemingly this factor is inapplicable.
The interests of judicial economy and the expeditious and economical determination of litigation for the parties;
As noted above, the State Court Action is at an advanced stage of litigation whereas this Court is only now becoming familiar with the facts regarding the protracted dispute between the parties. As such, judicial economy weighs in favor of granting relief from the automatic stay.
Whether the foreign proceedings have progressed to the point where the parties are prepared for trial, and
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The parties were prepared for trial when the bankruptcy petition was filed. The Debtor’s claims that no one will defend the Debtor in the State Court Action and that default judgment will be entered against it are unpersuasive. In fact, the Debtor and CTA have both filed numerous pleadings in opposition to motions by USA Waste in the bankruptcy case and as noted above, CTA has a substantial interest in defending the Debtor’s interests given that USA Waste’s arguments thus far invariably point to a looming successor or alter ego claim against CTA.
The impact of the stay on the parties and the "balance of hurt."
On balance, the Court perceives no harm to the bankruptcy estate from permitting the State Court Action to continue. As to the remaining parties, the Court expects that denial of the Motion would result in more litigation in the bankruptcy court between the parties which would likely increase the costs of litigation for all parties. This factor appears neutral.
In addition to the foregoing, CTA and the Debtor have argued that the alter ego/successor claims USA Waste seeks to bring against CTA are exclusively claims of the estate, and that in seeking to assert these claims USA Waste may be interfering with the rights that the Trustee is currently trying to sell to CTA. The Court is unpersuaded by the arguments of CTA and the Debtor. While not technically before the Court as USA Waste has not filed a proposed amended complaint for the Court to review asserting alter ego or successor theories, in Ahcom, Ltd. v. Smeding, the Ninth Circuit held that if there is injury to the corporation that gives the corporation a right of action against the shareholders (e.g., where a shareholder converts or fraudulently transfers corporate assets), that claim is property of the bankruptcy estate. But absent a corporate right of action, a claim that shareholders treated the corporation as their alter ego to the detriment of a corporate creditor may be asserted only by the injured creditor. (9th Cir. 2010) 623 F3d 1248, 1251-1252 (applying Calif. law). Here, there has been no indication that USA Waste intends to bring an alter ego action on the basis of a particularized injury to the Debtor corporation. As such, there is no basis on which to conclude that USA Waste’s potential action against CTA will interfere with/ or otherwise prejudice rights in claims owned by the bankruptcy estate.
TENTATIVE RULING
The Court’s tentative ruling is to grant relief from the automatic stay to USA Waste as
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set forth in its proposed order. The Court does not opine on whether an amended complaint requires relief from the automatic stay.
APPEARANCES REQUIRED.
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
10:00 AM
MOVANT: CREDITOR TRINITY FINANCIAL SERVICES
From: 5/30/17, 6/20/17 EH
Docket 25
Service is Improper Opposition: None
The Court is inclined to CONTINUE the hearing for service on Debtor pursuant to Local Rule 4001-(1)(c)(C)(i).
APPEARANCES REQUIRED.
Debtor(s):
Fonda Cormier Represented By Phillip Myer
Movant(s):
Trinity Financial Services LLC Represented By Henry D Paloci
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: JPMORGAN CHASE BANK NA
EH
Docket 31
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) based on Movant’s assertion that Movant regained possession of property prepetition on November 11, 2016, and Debtor’s failure to make required postpetition payments. GRANT waiver of 4001(a)
stay. GRANT relief under ¶2. DENY relief under ¶11 as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Lisa Allison Wells Represented By Roland D Tweed
Movant(s):
JPMorgan Chase Bank, N.A. Represented By Drew A Callahan
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DEVELOPER'S CAPITAL INC
From: 5/9/17, 6/20/17 EH
Docket 34
Service is Proper Opposition: Yes
The Court is inclined to DENY the motion without prejudice. Movant’s request for relief only requests relief under § 362(d)(2). Section 362(d)(2) requires Movant to show that the property is unnecessary to an effective reorganization and that Debtors have no equity in the property. This case is a Chapter 13 proceeding and the property at issue is Debtors’ primary residence. In this situation, absent any indication to the contrary, the property is necessary to an effective reorganization. Furthermore, Movant does not identify the fair market value of the property or whether there are any additional liens on the property, and, therefore, has not demonstrated that Debtors have no equity in the property.
APPEARANCES REQUIRED.
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
10:00 AM
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
Movant(s):
Developers Capital, Inc., Employees Represented By
Russel T Little
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: MARTHA E GUERRERO AND EDUARDO E GUERRERO FROM: 4/25/17, 5/30/17, 7/11/17
EH
Docket 11
Debtor’s opposition argues that the real estate contract is an executory contract that can be rejected in bankruptcy. While providing an applicable citation for that assertion, Debtor does not apply the legal standard to the facts of this case.
Nevertheless, it appears that Debtor’s characterization of the contract as "executory" may have merit. While Movant, in the motion, states that "all contingencies had been removed," and, in the reply, states that they "dutifully removed all their contractual contingencies," the state court complaint submitted to support their motion states, in paragraph 23: "Plaintiffs have fully performed all conditions, covenants, and promises required by them on their part to be performed in accordance with the terms and conditions of the contract, except the final payment for the purchase of the Property." (emphasis added). While Movants appear to have made the initial deposit into escrow, it does not appear that the final purchase price was tendered.
"[A]n ‘executory contract’ that can be rejected in bankruptcy is a contract on which performance remains due on both sides at the time of the bankruptcy petition." Matter of Newcomb, 744 F.2d 621, 624 (8th Cir. 1984); see also In re Texscan Corp., 976 F.2d 1269-1271-72 (9th Cir. 1992). In Newcomb, the Court held that when the funds had already been transferred into escrow, there was no executory contract – no material obligations remained on the part of the grantor. See id.
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In the Ninth Circuit, a real estate sales contract remains executory until the full purchase price is deposited into escrow by the purchaser. See In re Hertz, 536 B.R. 434, 439-41 (Bankr. C.D. Cal. 2015) (an extended discussion on when a purchase contract loses its executory nature).
Given that the real estate purchase contract may be an executory contract that shortly will be rejected by operation of law under 11 U.S.C. § 365(d)(1), and that Movants are seeking a state court order for specific performance under the contract, granting relief from stay would be improper because the state court proceedings would interfere with the bankruptcy court proceedings. Interference with the administration of the estate is the most important consideration when considering a motion for relief from stay to proceed with state court litigation. See In re Roger, 539 B.R. 837, 845 C.D. Cal. 2015) ("According to the court in Curtis, the most importance factor in determining whether to grant relief from the automatic stay to permit litigation against the debtor in another forum is the effect of such litigation on the administration of the estate. Even slight interference with the administration may be enough to preclude relief in the absence of a commensurate benefit."). Here, there is a possibility of significant interference with the bankruptcy estate.
Tentative Ruling:
For the foregoing reasons, the Court is inclined to DENY the motion. APPEARANCES REQUIRED.
Debtor(s):
AMANDO MORALES Represented By William D Gurney
Joint Debtor(s):
ALICIA MALDONADO JIMENEZ Represented By
William D Gurney
Movant(s):
Eduardo E. Guerrero Represented By
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Trustee(s):
Christopher J Langley
Charles W Daff (TR) Represented By Brandon J Iskander Lynda T Bui
10:00 AM
MOVANT: MEDALLION BANK
EH
Docket 12
July 25, 2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Paul David Caballero Represented By Mona V Patel
Joint Debtor(s):
Tami Cirrincione Caballero Represented By Mona V Patel
Movant(s):
Medallion Bank Represented By Tyneia Merritt
10:00 AM
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: BAYVIEW LOAN SERVICING LLC
EH
Docket 14
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on Debtor’s inadequate equity cushion. The Court also GRANTS relief from stay under § 362(d)(2) as there is no equity in the Property. GRANT relief under ¶2 and ¶3. GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Russell R. Riggs Represented By
Robert Jeffrey Gerber
Joint Debtor(s):
Dalene M. Riggs Represented By
Robert Jeffrey Gerber
Movant(s):
BAYVIEW LOAN SERVICING, Represented By
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Trustee(s):
Nichole Glowin
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK, NA AS LEGAL TITLE TRUSTEE FOR TRUMAN 2016 SC6 TITLE TRUST
From: 6/20/17, 7/11/17 EH
Docket 23
June 20, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Ryan Keith Richardson Represented By Ronald B Talkov
Joint Debtor(s):
Joyce Nanette Richardson Represented By Ronald B Talkov
10:00 AM
Movant(s):
U.S. BANK, NA AS LEGAL TITLE Represented By
Diane Weifenbach
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA NATIONAL ASSOCIATION
EH
Docket 16
July 25, 2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Gloria Del Carmen Bolanos Pro Se
Movant(s):
HSBC BANK USA NATIONAL Represented By
April Harriott Sean C Ferry
Trustee(s):
Lynda T. Bui (TR) Pro Se
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CA 92347; 26484 Highway #58, Barstow, CA 92311; 25494 Agate Rd., Barstow, CA 92311 Under 11 U.S.C. § 362 (with supporting declarations) (Real Property)
MOVANT: SAN BERNARDINO COUNTY TREASURER AND TAX COLLECTOR
CASE DISMISSED 5/30/17
From: 6/27/17, 7/11/17 EH
Docket 10
07/25/2017
BACKGROUND
On May 12, 2017, Osbaldo Martinez ("Debtor") filed for chapter 13 relief. The Debtor’s case was dismissed on May 30, 2017, for failure to file information. On June 2, 2017, the San Bernardino County Treasurer & Tax Collector ("County") filed its Motion for Relief from Stay seeking in rem relief ("Motion") as to certain properties located at 1567 Riverside Drive, Barstow, CA 92311; 860 Nancy St., Barstow, CA 92311; 36891 Livingston Ln., Hinkley, CA 92347; 26484 Highway #58, Barstow, CA (the "Properties").
The Motion was set for hearing on July 11, 2017. Prior to the hearing on the Motion, the Court vacated the matter specifically given the filing of the Motion subsequent to the dismissal of the case. The County notified the Court that it intended to appear at the July 11, 2017, hearing to request a ruling. At the hearing, the County argued that the Court’s dismissal order specifically retained its jurisdiction over issues arising under § 362. However, the Court indicated that it was problematic to permit
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motions to be filed after the case had been dismissed without any limiting factor as to when such a motion could be filed. The Court continued the hearing and required further briefing regarding whether the Court has jurisdiction to enter an order on a motion requesting in rem relief which is filed after the bankruptcy case has been dismissed.
DISCUSSION
The County has cited two cases in support of its position. The first case is In re Cruz, 516 B.R. 594 (9th Cir. BAP 2014), an appeal from a ruling of this Court. Here, the Court finds that Cruz is inapplicable to the facts of the case at bar. Although the BAP referenced the Court’s retention of jurisdiction of issues arising under § 362 in its decision, the BAP’s decision permitting the post-dismissal grant of relief from stay also considered that Cruz involved a request for annulment of the stay. In Cruz, a foreclosure sale of property that was potentially property of the debtor’s estate had been sold in the short period between the filing of the case and dismissal. Thus, annulment was appropriate even after dismissal for the creditor to ensure that its actions taken while the stay was still pending, could be ratified by the Court. The instant Motion contains no request for annulment and makes no assertion that any actions were taken during the pendency of the bankruptcy case.
The other case cited by the County is Sinclair v. Bank of Am., N.A. (In re Sinclair), 2013 Bankr. LEXIS 4657, *4 (B.A.P. 9th Cir. May 28, 2013), similar to Cruz involves a post-dismissal request for annulment to address actions taken during the pendency of a bankruptcy. Again, this situation is plainly distinguishable from the instant Motion which involves no request for annulment. Moreover, Sinclair, undercuts the County’s argument in that it recognizes that there must be limits on post-dismissal bankruptcy jurisdiction:
Post-dismissal bankruptcy jurisdiction is generally limited. The bankruptcy court retains jurisdiction to dispose of ancillary matters, including construing and interpreting its orders. [Aheong v. Mellon Mortgage Co. (In re Aheong), 276 B.R. 233, 241 (9th Cir. BAP 2002)]. It may not, however, "grant new relief independent of its prior rulings once the underlying action has been dismissed." Tsafaroff v. Taylor (In re Taylor), 884 F.2d 478, 481 (9th Cir. 1989) (citing Armel Laminates, Inc. v. Lomas & Nettleton Co. (In re Income Prop. Builders, Inc.), 699
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F.2d 963, 964 (9th Cir. 1982)); see also Beneficial Trust Deeds v. Franklin (In re Franklin), 802 F.2d 324, 327 (9th Cir. 1986).
Sinclair at *6-*7.
TENTATIVE RULING
Based on the foregoing, the Court finds that exercise of jurisdiction on a motion for relief from stay filed post-dismissal which exclusively seeks prospective relief is inappropriate and on that basis the tentative ruling is to DENY the County’s request.
APPEARANCES REQUIRED.
Debtor(s):
Osbaldo Concencion Martinez Pro Se
Movant(s):
c/o Barry S. Glaser San Bernardino Represented By
Barry S Glaser
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: TD AUTO FINANCE LLC
EH
Docket 16
July 25, 2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on a lack of equity cushion and intention to surrender. GRANT relief from stay under § 362 (d)(2) based on lack of equity. GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Victor George Represented By Richard G Heston
Joint Debtor(s):
Manju Pudussery Represented By Richard G Heston
Movant(s):
TD Auto Finance LLC Represented By Sheryl K Ith
10:00 AM
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: FORD MOTOR CREDIT COMPANY LLC
CASE DISMISSED 6/26/17
EH
Docket 12
- NONE LISTED -
Debtor(s):
Silvia Alvarez Represented By
Filemon Kevin Samson III
Movant(s):
Ford Motor Credit Company LLC Represented By
Sheryl K Ith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: 5700 VAN BUREN BLVD LLC
CASE DISMISSED 7/5/17
EH
Docket 11
Service: Proper Opposition: No
The Court GRANTS Relief under § 362(d)(1) based on the following: (1) Debtor failed to pay rent, (2) Movant gave appropriate notice to Debtor of their intention to terminate Debtor’s tenancy if Debtor did not pay overdue rent, (3) Debtor failed to pay overdue rent, and (4) Movant affirmed their intention to terminate the tenancy by filling a complaint for unlawful detainer. Therefore, "Cause" is established under § 362(d)(1) because Debtor’s lease is terminated and the Debtor retains only a possessory interest with regard to the leased property. In re Windmill Farms, Inc., 841 F.2d 1467, 1469-71 (9th Cir. 1988) (Holding that a lease of real property is terminated under California law when the lessor affirms his election to terminate the lease as expressed in a notice to pay rent or quit which the lessor has previously served upon the lessee); See also In re Perl, 513 B.R. 566, 576 (9th Cir. BAP 2014) (Holding that physical occupation of a Residence constitutes a possessory interest under California law that is protected by the automatic stay, making a motion for relief from stay necessary). The Court is also inclined to GRANT relief under § 362(d)(2) as Debtor has no equity in the property. GRANT relief under ¶2. DENY relief under ¶4, ¶7a, ¶ 9a, ¶10 and ¶11 for lack of cause shown. DENY relief under ¶12b as moot.
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APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Jun Seok Lee Represented By
Young K Chang
Movant(s):
5700 VAN BUREN BLVD., LLC Represented By
Gary D Fidler
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: CIT BANK, N.A.
CASE DISMISSED 7/11/17
EH
Docket 7
July 25, 2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and 362(d)(4). Court finds bad faith and scheme to delay and hinder based on five prior bankruptcy cases affecting the property and four unauthorized transfers of 5% property interests. GRANT waiver of 4001(a)(3) stay and requests under ¶¶ 3, 4, and 12. GRANT request under ¶ 9. Grant request under ¶10 upon proper recording and notice. DENY request under ¶ 11(a) for lack of cause shown. Request for APO is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Min Joo Choi Pro Se
Movant(s):
CIT Bank, N.A. Represented By
Dane W Exnowski
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: MEGHAN MCCONAGHY
EH
Docket 13
July 25, 2017
Service: Not Proper
Debtor’s prior case was dismissed for failure to file schedules and plan. Debtor alleges attorney negligence. Debtor asserts the filing of schedules and proposed plan is evidence that the present case was filed in good faith.
Movant has failed to properly serve secured creditors pursuant to Fed. R. Bankr. P. 7004 (b)(3), by failing to mail a copy of the summons and complaint to the attention of an officer, a managing or general agent, or to any other agent authorized. Movant has also failed to provide evidence of telephonic notice to interested parties.
The Court is inclined to DENY the Motion. APPEARANCES REQUIRED.
Debtor(s):
Meghan McConaghy Represented By Nicholas M Wajda
Movant(s):
Meghan McConaghy Represented By Nicholas M Wajda
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FOOTHILLS AT OLD TOWN LLC
EH
Docket 14
Service: Proper Opposition: None
The Court GRANTS Relief under § 362(d)(1) based on the following: (1) Debtor failed to pay rent, (2) Movant gave appropriate notice to Debtor of its intention to terminate Debtor’s tenancy if Debtor did not pay overdue rent, (3) Debtor failed to pay overdue rent, and (4) Movant affirmed its intention to terminate the tenancy by filling a complaint for unlawful detainer. Therefore, "Cause" is established under § 362(d)(1) because Debtor’s lease is terminated and the Debtor retains only a possessory interest with regard to the leased property. In re Windmill Farms, Inc., 841 F.2d 1467, 1469- 71 (9th Cir. 1988) (Holding that a lease of real property is terminated under California law when the lessor affirms his election to terminate the lease as expressed in a notice to pay rent or quit which the lessor has previously served upon the lessee); See also In re Perl, 513 B.R. 566, 576 (9th Cir. BAP 2014) (Holding that physical occupation of a Residence constitutes a possessory interest under California law that is protected by the automatic stay, making a motion for relief from stay necessary). The Court is also inclined to GRANT relief under § 362(d)(2) as Debtor has no equity in the property and the property is not necessary for an effective reorganization. GRANT relief under
¶¶ 2 and 6.
10:00 AM
APPEARANCES REQUIRED.
Debtor(s):
Tracy Marie Roche Pro Se
Movant(s):
Foothills at Old Town, LLC Represented By Scott Andrews
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
MOVANT: FRANK RISELY AKA FRANK RISELEY
EH
Docket 37
July 25, 2017
Service: Not Proper Opposition: None
Although Movant has obtained a judgment in the state court Unlawful Detainer action, the judgement was obtained post-bankruptcy petition without relief from stay. Relief from stay would not be proper without seeking annulment.
Movant has also failed to properly serve Debtor. Debtor was served on July 18, 2017 via overnight mail. Under the Court’s rules, notice must be received five (5) court days prior to the hearing. Movant’s notice would only provide for four (4) days prior to the hearing. In addition, Movant failed to give telephonic notice per the Court’s self-calendaring instructions.
Based on the foregoing, the Court is inclined to DENY the Motion. APPEARANCES REQUIRED.
Debtor(s):
Michelle Meredith Represented By Patricia M Ashcraft
10:00 AM
Movant(s):
Frank Riseley aka Frank Risely Represented By Helen G Long
Trustee(s):
Howard B Grobstein (TR) Pro Se
2:00 PM
From: 2/28/17, 4/11/17, 7/18/17 EH
Docket 6
- NONE LISTED -
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
2:00 PM
Also #30 EH
Docket 89
07/25/2017
On November 10, 2016 ("Petition Date"), B & B Family, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. The Debtor is owned by Patricia Forte (who owns 50% of shares) and by Randall and Marianne Richey, husband and wife, who own the remaining 50% of shares in the Debtor (collectively, "Shareholders")
Debtor operates Oggi’s Pizza and Brewing Company in Apple Valley, California. Debtor has fifty-five employees. The Debtor’s Schedules show that it had approximately $114,662.50 in assets as of the Petition Date. The Debtor’s assets consist primarily of leased equipment, business licenses, and liquid assets in the form of cash and accounts.
On March 31, 2017, Debtor filed its Disclosure Statement and Chapter 11 Plan of Reorganization. On May 2, 2017, Comerica Bank filed a Limited Response to the Debtor’s Disclosure Statement pointing simply to the Debtor’s omission of its franchise agreement as an executory contract being assumed. In response, the Debtor amended its Disclosure Statement and Plan on May 2, 2017 (the "Amended DS and Plan"). Additionally, on May 3, 2017, the Debtor filed redline versions of the Amended DS and Plan reflecting the changes made since the March 31, 2017, filings.
Following the May 2017, hearing on the Disclosure Statement, the Debtor filed amended pleadings on June 13, 2017. Service was proper and no objections to
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the Debtor’s Second Amended Disclosure Statement have been filed.
Adequate Information
A Chapter 11 disclosure statement is required to contain "adequate information" pursuant to 11 U.S.C. § 1125(b). Section 1125(f)(2) provides that: "the court may approve a disclosure statement submitted on standard forms approved by the court or adopted under section 2075 of title 28." The United States Courts have devised a disclosure statement template for small businesses, Form B25B, which Debtor generally adopted as to format.
As to the substance of a disclosure statement, 11 U.S.C. § 1125(a)(1) defines "adequate information" as:
information of a kind, and in sufficient detail as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor’s books and records, including a discussion of the potential material Federal tax consequences of the plan to the debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims or interests in the case, that would enable such a hypothetical investor of the relevant class to make an informed judgment about the plan, but adequate information need not include such information about any other possible or proposed plan and in determining whether a disclosure statement provides adequate information, the court shall consider the complexity of the case, the benefit of additional information to creditors and other parties in interest, and the cost of providing additional information
The type of information required varies with the circumstances. See, e.g., In re Jeppson, 66 B.R. 269, 292 (Bankr. D. Utah 1986) (listing nineteen categories of information commonly required); see also In re Malek, 35 B.R. 443, 443-44 (Bankr.
E.D. Mich. 1983) (listing minimum requirements).
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Plan Feasibility
"There are numerous decisions which hold that where a plan is on its face nonconfirmable, as a matter of law, it is appropriate for the court to deny approval of the disclosure statement describing the nonconfirmable plan." In re Silberkraus, 253
B.R. 890, 899 (Bankr. C.D. Cal. 2000) (collecting cases).
The Chapter 11 Plan’s proposed effective date is the first day of the first full month after entry of the final order confirming plan (but no earlier than 8/01/17). Classes of claims are categorized as follows:
Claims Classification
Administrative Claims:
UST Fees - $4,875 (estimated), in full on effective date
Turoci Firm - $40,000 (estimated)/Terms: in full on effective date
Priority Tax Claims:
IRS: $5,251.48/ Terms: in full on effective date
California BOE: $125,750.40/Terms: 48 months, 7% interest, $3,011.25/ mo.
Class 1: Comerica Bank (Impaired)
Nature of lien: first priority security interest in all of Debtor’s assets (D values at $150,000)
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· Claim: $494,123.90
Treatment: Bifurcated claim – Secured claim of $150,000, Unsecured Claim of
$344,123.90
Secured Claim Terms: 60 months, 6% interest, $2,899.92/mo.
Unsecured Claim treated with Class 6 GUCs
Class 2: FC Marketplace aka Pioneer Park (Impaired)
Nature of lien: second priority security interest in all Debtor’s assets
Unsecured claim of $88,963.76
Treatment: treated with Class 6 GUCs
Plan proposes to avoid the lien of FC Marketplace on entry of confirmation order
Class 3: Oggi’s Corporate (Impaired)
Nature of lien: third priority lien in all Debtor’s assets
Unsecured claim of $54,106.12
Treatment: paid with Class 6 GUCs
Plan proposes to avoid the lien of Oggi’s Corporate on entry of confirmation order
Class 4: Financial Pacific Leasing
Secured as to leased restaurant equipment which D values at $2,000
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Secured Claim of $2,000, Treatment: Paid in full on effective date (unimpaired)
Unsecured Claim of $42,864.40 (paid with class 6 GUCs) (impaired)
Plan proposes to avoid the lien of FPL on payment in full.
Class 5: High Desert Prime, LP (Impaired)
Landlord
Debtor is assuming the lease and proposes to cure the arrears owed to landlord
· Claim: $178,499.98
Treatment: 48 months, 0% interest (per agreement with HDP), $3,718.75/mo.
Class 6: General Unsecured Creditors (Impaired)
· Total Claims: $636,718.69
· Dividend: 17% or $120,000
Treatment: $1,000/mo. for first 48 months and $6,000 for months 48-60
Note: Pawnee lease for bar stools, dishwasher etc., will be rejected and Pawnee filed an unsecured claim and will be treated as such.
Insiders/Equity Holders
No Insider Claims
Equity to retain stock subject to Section VII (which provides potentially for new value of $10,000)
2:00 PM
Plan Funding and Feasibility
Debtor indicates it will have $60,000 cash on hand as of the Effective Date ($35,000 cash on hand and $25,000 to be accumulated between now and Effective date). This amount appears sufficient to cover payments due on the Effective Date.
Disposable income projection is $6,400 per month based on average net disposable income since December 2016 (and after payments of $2,204.17 to Comerica and
$3,206.78 to Sysco Foods) for a total of $11,810.95 for plan payments. This amount appears sufficient to cover the proposed plan payments of approximately $10,632 per month
Management
Patricia Forte (50% owner) is current CEO and will step down as CEO Randall Richey will remain Secretary
Marianne Richey, current CFO will become CEO and CFO post-confirmation with day-to-day responsibility for overseeing the financial affairs.
Other Terms
D will be disbursing agent with no compensation unclaimed distributions to revert to reorganized Debtor.
Executory Contracts
Debtor shall assume the commercial property lease for the restaurant at 19201 Bear Valley Road in Apple Valley and shall assume the Franchise Agreement with Oggie’s Corporate.
Debtor shall reject two leases for restaurant equipment.
2:00 PM
Liens
Liens of FC and Oggi’s Corporate will be extinguished upon confirmation and liens of Comerica and FPL will be extinguished on payment in full of their allowed secured claims.
Tentative Ruling
The Court has examined the Debtor’s Amended DS and Plan to determine whether "adequate information has been provided and has identified the following issues to be addressed:
· The DS and Plan contemplate bifurcation of Comerica and FPL’s claims and avoidance of remaining junior liens. A Motion to Value was filed on July 24.
· The Declaration of Marianne Richey makes reference to Exhibit E and purports to authenticate this Exhibit as the "Annual Projected Cash Flow" for the Debtor based on monthly operating reports from December 2016 to April 2017. However, the "Annual Projected Cash Flow" is Exhibit D, not Exhibit E as indicated in the declaration.
There is no need for a further hearing. Once the Debtor has amended the disclosure statement the Debtor may lodge a proposed order approving the disclosure statement, as modified.
APPEARANCES REQUIRED.
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
2:00 PM
From: 12/13/16, 3/7/17, 5/30/17 Also #29
EH
Docket 8
NONE LISTED -
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
2:00 PM
EH
Docket 0
BACKGROUND
Rio Rancho Super Mall, LLC ("Debtor") is a California Limited Liability Corporation. Debtor owns and operates a commercial property, Rio Rancho Super Mall, located at 25211 Sunnymead Blvd., Moreno Valley, CA 92553 ("Property"). The Property is improved with a commercial building (approx. 100,750 sq. ft.) with retail space for 87 retail tenants. On February 13, 2017, Debtor filed a voluntary Chapter 11 Petition. This is the Debtor’s second chapter 11 case. The Debtor’s prior case was dismissed on December 27, 2016, based on the Debtor’s material default in its compliance with the terms of the previously confirmed chapter 11 plan.
Related Documents:
On June 13, 2017, Debtor filed its Disclosure Statement (Docket #69) and its Chapter 11 Plan of Reorganization (Docket #70).
On July 10, 2017, creditor Butterfield Valley Partners filed its Objection to Disclosure Statement and Plan (Docket #75).
On July 11, 2017, creditor DSD Note Investors, LLC filed its Opposition/Objection to the Disclosure Statement (Docket #76).
On July 11, 2017, creditor Pacific City Bank filed its Objection to the Disclosure Statement (Docket #77) and a Request for Judicial Notice in connection with its Objection (Docket # 78).
Ownership and Management of Debtor:
Debtor has two owners
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Eric Sang Yul Kim ("Mr. Kim") is the managing member and owns 87.5%
Kwang Sung Kim ("Mrs. Kim"), Debtor’s wife, owns the remaining 12.5%
DSD:
Debtor’s primary secured creditor is DSD Note Investors, Inc. ("DSD") which
the Debtor asserts fully encumbers the Property. On January 31, 2017, DSD filed a complaint for breache of contract and foreclosure and also moved the Superior Court for the appointment of a receiver.
Motivation for filing a Chapter 11:
Debtor contends that the instant filing was precipitated by the dismissal of its prior case due, in part, to poor market conditions which did not sufficiently improve, and due also to problems with the Debtor’s confirmed plan which failed to account for certain liens; and also due to the aggressive collection efforts of DSD.
DISCUSSION
Before a disclosure statement may be approved after notice and a hearing, the court must find that the proposed disclosure statement contains "adequate information" to solicit acceptance or rejection of a proposed plan of reorganization. 11 U.S.C. § 1125(b).
"Adequate information" means information of a kind, and in sufficient detail, so far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records, that would enable a hypothetical reasonable investor typical of the holders of claims against the estate to make a decision on the proposed plan of reorganization. 11 U.S.C. § 1125(a).
There is no set list of required elements to provide adequate information per se. A case may arise where previously enumerated factors are not sufficient to provide adequate information. Conversely, a case may arise where previously enumerated factors are not required to provide adequate information. In re Metrocraft Pub. Services, Inc., 39 B.R. 567 (Bankr. N.D.Ga. 1984). "Adequate information" is a flexible concept that permits the degree of disclosure to be tailored to the particular situation, but there is an irreducible minimum, particularly as to how the plan will be
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implemented. In re Michelson, 141 B.R. 715, 718-19 (Bankr. E.D.Cal. 1992).
Courts have developed lists of relevant factors for the determination of adequate disclosure. See, e.g., In re A.C. Williams Co., 25 B.R. 173, 176 (Bankr.
N.D. Ohio 1982), In re Ferretti, 128 B.R. 16, 18–19 (Bankr. D.N.H. 1991), In re Malek, 10 C.B.C.2d 189, 35 B.R. 443, 443–44 (Bankr. E.D. Mich. 1983), In re Metrocraft, 39 B.R. 567, 568 (Bankr. N.D.Ga. 1984), In re Scioto Valley Mortgage Co., 88 B.R. 168, 170–71 (Bankr. S.D. Ohio 1988), In re U.S. Brass Corp., 194 B.R. 420, 424–25 (Bankr. E.D. Tex. 1996).
This Court should determine what factors are relevant and required in light of the facts and circumstances surrounding each particular case. In re East Redley Corp., 16 B.R. 429 (Bankr. E.D.Pa. 1982).
PLAN SUMMARY
The Debtor proposes an Effective Date of November 1, 2017
Funding
Debtor intends to fund the plan with regular business income estimated by the Debtor at approximately $110,920 per month.
Debtor asserts it will have $45,000 on the Effective Date from rental income and capital contributions
Law Offices of Langley & Chang: $25,000
Clerk’s Office: $0
US Trustee Fees: $975 Total: $25,975
Priority Tax Claims: (Unimpaired) Paid in full on Effective Date
CA Franchise Tax Board: $800
· IRS $2,711.88
Total: $3,511.88
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Principal balance/allowed claim: $12,000,000
Claim allowed per stipulation including agreement by DSD to extend loan maturity date
Terms: $55,000 per month at 4.25% interest for 35 years
o Additional quarterly payments of greater of $10,000 or net cash flow for quarter
Class 2: Riverside County Tax (Unimpaired)
Principal balance/allowed claim: $45,000/$100,000
Terms: $1,801.85 per month at 18% interest for 120 months
Class 5: General Unsecured Creditors (Impaired)
Debtor proposes to pay 0% (i.e. no payments to general unsecured creditors)
Class 6: Equity Interest Holders
Mr. Kim and Mrs. Kim will retain their interests
Liquidation Value
Debtor estimates its liquidation value is $7,533,400 and thus after payment of the secured claim of DSD in the amount of $12,000,000 and even assuming funds are available to pay administrative claims and priority tax claims, no funds would remain for other creditors.
Feasibility
Debtor will fund the plan through regular business income and the cash contribution. Debtor states it will have $45,000 on effective date to pay $29,486.88 due on Effective Date.
Cash on hand: $10,000 (DIP Account)
Capital Contributions: $35,000 Total: $45,000
Balance remaining after paying initial amount of Effective Date: $15,513.12
OBJECTIONS
All objections were timely filed. The Debtor has filed no replies.
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Inaccurate descriptions of property value, maturity date, and interest rate;
DSD asserts FMV of the Property should be 12 million in accordance with terms of the Stipulation and that as to the maturity date, the forbearance is for a period of 36 months, not 35 years;
DSD seeks to receive its Note interest rate of 8.625%, not the 4.25% indicated in the DS and Plan;
The Debtor’s figures for the Riverside County Tax Collector’s claim conflicts with the filed proofs of claim (Claim No. 2 and Claim No. 4), and the Stipulation of DSD and Debtor requires that Debtor remain current on property tax payments;
DSD asserts that Debtor has not fully disclosed its management/ownership structure and specifically points to its belief that Yeon Ju Kim and John Seung Kyun Lee are also members of the Debtor.
PCB contends that the maximum value that DSD can assert as a first priority lienholder is $10,422,000 and that PCB is in second priority once that cap is reached;
PCB further asserts that the DS’s estimate of the fair market value of the Property is unsupported by any evidence and belies "basic knowledge of the trajectory of real estate prices in Southern California" considering the fact that in the prior case, Debtor asserted a fair market value of $8,060,000 (i.e. more than the current asserted value of $7,500,000) at a time when the real estate values were depressed in the area (PCB Obj. at Ex. A);
The proposed plan violates the absolute priority rule in that it allows equity to retain their ownership interests despite the fact that unsecured creditors will receive nothing and equity proposes no new value.
The DS indicates at page 13 that the Debtor intends to reject the agreements between Butterfield and the Debtor. Butterfield asserts that these agreements run with the land and are not executory contracts capable of rejection under the
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bankruptcy code and has provided some authority for this proposition. Debtor, for its part has not rebutted Butterfield’s contentions;
The Debtor’s estimated expenses understates the estimated amount of CAM payments which are currently $9,3000, not $5,000 as set forth in the Debtor’s projections;
Butterfield wants additional language added to indicate that any confirmed plan will not alter current or future obligations due under the terms of the CAM;
Butterfield also disputes that DSD can assert any claim greater than
$10,422,000;
Butterfield objects to the valuation of the Property asserted by the Debtor;
Tentative Ruling:
Debtor’s Disclosure Statement and Plan are defective for the following reasons:
Debtor’s DS indicates in Section IV.A.2.b. that Classes 1 and 3 are impaired. However, Section III.C. indicates that Classes 1 and 5 are impaired. In fact, there appears to be no Class 3 and 4 at all;
In Section IV.A.8, Debtor indicates that it seeks cramdown on Classes 1-3 but makes no mention of Class 5, which is impaired, and then contradictorily indicates that it does not intend to cramdown as to Class 1;
The DS does not indicate the current tenancy rates of the Property. Additionally, the Debtor should indicate the risks, if any, associated with the proposed increase in rents, and how did the Debtor determine the appropriate percentage increase in rents. The Court notes that in its prior case, the Debtor disclosed that certain tenants were behind on rental payments. The Debtor should disclose whether it has encountered any difficulties in collecting rents and whether any tenants have exhibited a tendency to pay late or to miss payments;
The DS and Plan provide no information regarding the avoidance of junior liens and the impact of avoidance on the liabilities of the Debtor;
The Court otherwise concurs that the Debtor must fully disclose the
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management/ownership structure of the Debtor and amend its DS and Plan to properly account for properly filed claims, including the claims of the Riverside County Tax Authority noted by DSD;
The Court is concerned that the increase in the monthly CAM expense indicates that as proposed the Plan may be infeasible, and otherwise the historical information presented does not support the projected income;
The DS asserts that the Debtor will have $35,000 in "capital contributions" on the Effective Date. Does this figure represent "new value" from the equity interest holders? This is not disclosed.
In addition to the foregoing, the Court agrees with the creditors that many of the objections to language of the DS and Plan revolve around the Debtor’s as-yet unfiled motion to value, although creditors will need to place their objections to DSD’s claim before the Court. In any event, for the foregoing reasons, the Court’s tentative ruling is to DENY approval of the Disclosure Statement as not containing adequate information.
APPEARANCES REQUIRED.
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
2:00 PM
From: 3/28/17, 5/30/17 Also #31
EH
Docket 6
- NONE LISTED -
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
2:00 PM
Adv#: 6:16-01148 Pringle v. O. Allen Alpay, Trustee of the Alpay Living Trust
From: 8/31/16, 10/5/16, 10/11/16, 1/11/17, 1/24/17, 2/8/17, 5/10/17 6/21/17
EH
Docket 1
10/05/2016
This matter is being CONTINUED to October 11, 2016, at 3:00 p.m. The parties received telephonic notice of the continuance from the Court.
APPEARANCES WAIVED.
Debtor(s):
Manors San Bernardino Ave LLC Represented By
Gaurav Datta
Defendant(s):
Manors Construction & Pro Se
O. Allen Alpay, Trustee of the Alpay Represented By
Stephen B Goldberg Renee De Golier John L Bailey
Plaintiff(s):
John P. Pringle Represented By
2:00 PM
Trustee(s):
Scott Talkov Douglas A Plazak
John P Pringle (TR) Represented By Larry D Simons Scott Talkov Frank X Ruggier
2:00 PM
Adv#: 6:17-01019 Frealy v. Arnold et al
From: 4/5/17, 7/19/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Kelly Arnold Represented By
Todd L Turoci
Defendant(s):
Kelly Arnold Pro Se
Larry Arnold Pro Se
Plaintiff(s):
Todd Frealy Represented By
Carmela Pagay
Trustee(s):
Todd A. Frealy (TR) Represented By Carmela Pagay
2:00 PM
EH
Docket 29
6/28/17
This mattered was continued from May 31, 2017, for Debtor to properly serve Capital One pursuant to Fed. R. Bankr. P. Rule 7004(h). Debtor's proof of service for the amended motion indicates service at:
"Capital One Bank N.A., Attn:63001-0125 Address: 15000 Capital One Drive, Richmond, VA 23238"
The above does not satisfy the standards of Fed. R. Bankr. P. Rule 7004(h). APPEARANCES REQUIRED.
05/31/2017
BACKGROUND
On October 30, 2013 ("Petition Date"), Ronald and Alicia Stearns (collectively, "Debtors") filed their petition for chapter 7 relief. Among the assets of the estate is real property located at 7573 Honeysuckle Street in Fontana, CA 92336 (the "Property"). The Debtors received a discharge and the case was closed on February 11, 2014.
On January 10, 2017, the Court granted the Debtors’ request to reopen the case
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for the purpose of avoiding judgment liens recorded against the Property. On February 2, 2017, the Debtor filed motions to avoid the liens of Capital One Bank ("Capital One") and Merchants Financial Guardian ("Merchants") pursuant to 11 U.S.C. § 522 (f). At the hearing on the Debtors initial motions, the Court denied both motions due to various technical issues with the motions. The tentative ruling indicated as follows:
The Court is inclined to DENY the motion without prejudice for a variety of technical reasons. Primarily, the filing that is actually set for hearing is Docket No. 17, which is simply a "notice" that does not attach, contain, incorporate, or reference a motion. Second, the earlier motion filed by Debtors, Docket No. 16, contains no admissible evidence regarding the value of the first lien as of the petition date.
Third, the Court notes that Local Rule 4003-(2)(b)(1) prevents Debtors from bringing one motion to avoid two lines under 11 U.S.C. § 522(f). Fourth, the earlier motion contains multiple, material factual inconsistencies, including the amount of the claimed exemption and the fair market value of the property.
Tentative Ruling on Motion to Avoid Liens, March 29, 2017.
On April 21, 2017, the Debtors refiled their motions to avoid the liens of Capital One Bank and Merchants. On May 18, 2017, the Debtors withdrew their motion to avoid the lien of Merchants. The only motion currently pending is the motion to avoid the lien of Capital One Bank (the "Motion").
DISCUSSION
As a threshold matter, the Motion was not properly served on Capital One via FRBP 7004(h) which requires service on a FDIC insured entity via certified mail and to the attention of an officer at the address indicated for the institution on the FDIC website. The Debtors did not comply with any of these requirements for service.
Section 522(f)(1)(A) provides in relevant part: "the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled ... if such lien is
a judicial lien." 11 U.S.C. § 522(f)(1)(A) (emphasis supplied).
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Section 522(f)(2) prescribes a formula for calculating whether an exemption is impaired:
(2)(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of—
the lien;
all other liens on the property; and
the amount of the exemption that the debtor could claim if there were no liens on the property; exceeds the value that the debtor's interest in the property would have in the absence of any liens.
In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph
(A) with respect to other liens.
(C) This paragraph shall not apply with respect to a judgment arising out of a mortgage foreclosure.
11 U.S.C. § 522(f)(2) (emphasis supplied). That is, an exemption is impaired if the sum of all of liens and the exemption yields a total that is greater than the fair market value of the property. See In re Meyer, 373 B.R. 84, 89 (9th Cir. BAP 2007).
Here, the Debtors assert that the first lien on the Property is $173,433.90, that the Property is next encumbered by the lien of Merchants in the amount of
$48,351.02, and by the lien of Capital One in the amount of $3,928.15. The Debtors have asserted an exemption in the Property of $100,000. However, the Debtors Schedule C indicates that they have exempted $76,566.10 in the Property and have not sought to amend their schedules. Nevertheless, assuming the values are correct, the total of the liens and exemption is $302,279.17 which is greater than the fair market value of the Property of $270,000 as asserted by the appraisal obtained by the Debtors. These figures would indicate that the lien of Capital One impairs the exemption of the Debtors.
TENTATIVE RULING
Based on the foregoing, the Court is inclined CONTINUE the hearing on the Motion to June 28, 2017, at 11:00 a.m., for the Debtor to properly serve Capital One per FRBP 7004(h) with an amended Notice of Motion and Motion as indicated above.
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APPEARANCES WAIVED. Movant to file and serve the amended notice of motion and motion.
Debtor(s):
Ronald Leroy Stearns Represented By John F Mansour
Joint Debtor(s):
Alicia Gay Stearns Represented By John F Mansour
Movant(s):
Ronald Leroy Stearns Represented By John F Mansour
Trustee(s):
Lynda T. Bui (TR) Pro Se
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(3) Granting Related Relief From: 5/17/17, 5/31/17, 7/12/17 EH
Docket 39
BACKGROUND
On October 16, 2016 ("Petition Date"), Charles David Arthur and Claire Blanza Arthur (collectively, "Debtors") filed their petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the Debtors’ bankruptcy estate ("Estate") is real property located at 35965 Carlton Road in Wildomar, CA (the "Property").
On April 25, 2017, the Trustee filed a Motion seeking (1) authority for a short sale of the Estate’s right, title, and interest in the Property free and clear of the interests; (2) approving payment of broker commission; and (3) granting related relief ("Motion").
No opposition has been filed.
DISCUSSION
Sale of Estate Property Pursuant to Section 363(b)
The trustee, after notice and a hearing, may sell property of the estate. 11
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U.S.C. § 363(b)(1); see also Commodity Futures Trading Comm’n v. Weintraub, 471
U.S. 343, 352 (1985). The sale must be in the best interests of the estate and the price must be fair and reasonable. In re Canyon Partnership, 55 B.R. 520 (Bankr. S.D. Cal. 1985); see also In re Wilde Horse Enterprises, Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal. 1991)(sale must have fair/reasonable price, accurate/reasonable notice to creditors and sale made in good faith). The trustee must articulate some "business justification" for selling estate property out of the "ordinary course of business" before the court may approve the transaction. In re Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983); In re Ernst Home Ctr., Inc., 209 B.R. 974, 979 (Bankr. W.D. Wash. 1997). Objections to sale that are based on inadequacy of price are often resolved the court ordering an auction, which may occur in open court. Simantrob v. Claims Prosecutor, LLC (In re Lahijani), 325 B.R. 282, 287 (9th Cir. BAP 2005) citing Fed. R. Bankr. P. 6004(f).1
Here, the Trustee asserts that the short sale will result in the estate being paid a fee of approximately $21,750. The declarations of Karina Jimenez and Anthony Silva (the "Buyers") indicate that the estate will be paid a fee of $21,750, in addition to the purchase price of $350,000. However, the Motion is not clear as to what underlies the "fee" being paid. Instead, it appears that the "fee" is actually a part of the purchase price. The framework proposed by the Trustee appears to indicate bad faith because he provides no basis rooted in bankruptcy for the Estate to charge a fee in exchange for the sale of an asset of the Estate.
a) Sale Free and Clear of non-Debtor Interests
A trustee may sell estate property "free and clear" of third party interests in the property, such as co-ownership interest, liens, claims and encumbrances. See 11
U.S.C. § 363(f). A sale free and clear of third party interests pursuant to section 363 is authorized only if one of the following conditions is met: (1) sale authorized by applicable nonbankruptcy law; (2) third party whose interest will be affected consents;
the affected interest is a lien and the sale price is greater than total value of all liens on the property; (4) the affected interest is a bona fide dispute; or (5) the third party whose interest will be affected could be compelled to accept a money satisfaction of the interest. 11 U.S.C. § 363(f)(1)-(5).
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The Trustee has not obtained consent from the first priority secured lender.
Without such consent, the Court cannot grant the Motion free and clear of this lien. As to the remaining junior liens, the Trustee proposes that a hypothetical foreclosure sale situation satisfies Section 363(f)(5). However, the Court believes that the analysis provided in Dishi & Sons v. Bay Condos LLC, 510 B.R. 696, 711 (S.D.N.Y. 2014) provides the better view of whether a hypothetical foreclosure sale can be a basis for granting free and clear under 363(f)(5).
narrow interpretation [of 363(f)(5)] provides a limited role for paragraph (5), but avoids rendering the remaining paragraphs mere surplusage. See In re PW, 391 B.R. 25, 44 (9th Cir. BAP 2008) ("[A]ny interpretation of paragraph (5) must satisfy the requirement that the various paragraphs of subsection (f) work harmoniously and with little overlap."). Other courts have therefore limited the scope of paragraph
(5) to those scenarios where the trustee or debtor, not any third party, is the actor. See, e.g., In re Ricco, Inc., 2014 WL 1329292, *3 (Bankr.N.D.W.Va. Apr. 1, 2014) ("[T]he only logical interpretation of
... § 363(f)(5) is that the statute requires that the trustee or debtor be the party able to compel monetary satisfaction for the interest which is the subject of the sale.") (quoting In re Haskell, 321 B.R. at 9); In re Scott, 2013 WL 4498987, *2–3 (Bankr.E.D.Ky. Aug. 21, 2013) (paragraph
(5) does not refer to foreclosure proceedings because they are initiated by creditors, not the debtor); In re Haskell, 321 B.R. at 9 (paragraph (5) does not encompass eminent domain proceedings because the trustee must be the party capable of compelling the interest holder to accept a money satisfaction). This Court agrees that paragraph (5) should be read to reach only those legal or equitable proceedings that could be brought by the trustee as owner of the property. A foreclosure by a third-party mortgagee is not such a proceeding. And as Dishi has not suggested any other hypothetical proceedings by which the trustee could compel TGM to accept a money satisfaction in exchange for extinguishment of its interest, the Court holds that paragraph (5) does not authorize a sale free and clear of TGM's rights. In re Daufuskie Island Props., LLC, 431 B.R. 626, 637 (Bankr.D.S.C.2010)
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Dishi & Sons at 711 (S.D.N.Y. 2014)(emphasis added).
Here, the Court is inclined to agree with the rationale of Dishi & Sons that 363 (f)(5) should be read narrowly to encompass only legal or equitable proceedings that could be brought by the trustee as the owner of the property. For this reason, the Court is inclined to deny the Trustee’s request to permit a sale free and clear of the junior liens against the Property.
TENTATIVE RULING
Based on the foregoing analysis, the Court is inclined to DENY the Motion.
APPEARANCES REQUIRED.
Debtor(s):
Charles David Arthur Represented By Anerio V Altman
Joint Debtor(s):
Claire Bigornia Blanza Arthur Represented By Anerio V Altman
Movant(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
Trustee(s):
Charles W Daff (TR) Represented By
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Lynda T Bui Rika Kido
2:00 PM
Adv#: 6:12-01498 Morschauser v. Continental Capital LLC et al
Also #6 EH
Docket 1
- NONE LISTED -
Debtor(s):
Devore Stop Represented By
Hutchison B Meltzer
Devore Stop A General Partners Represented By
Arshak Bartoumian - DISBARRED - Newton W Kellam
Defendant(s):
American Business Investments Represented By Lawrence J Kuhlman
Autumn D Spaeth ESQ
Mohammed Abdizadeh Pro Se
Jesse Bojorquez Represented By Lawrence J Kuhlman
Autumn D Spaeth ESQ
Continental Capital LLC Represented By
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Cara J Hagan
Stephen Collias Represented By Cara J Hagan
Plaintiff(s):
William G Morschauser Represented By Hutchison B Meltzer Reid A Winthrop
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
Adv#: 6:12-01498 Morschauser v. Continental Capital LLC et al
HOLDING DATE
From: 3/11/15, 5/20/15, 7/29/15, 12/16/15, 2/3/16, 3/16/16, 5/11/16, 8/31/16, 11/2/16, 11/16/16, 3/8/17, 6/7/17
Also #5 EH
Docket 1
- NONE LISTED -
Debtor(s):
Devore Stop Represented By
Hutchison B Meltzer
Devore Stop A General Partners Represented By
Arshak Bartoumian - DISBARRED - Newton W Kellam
Defendant(s):
American Business Investments Represented By Lawrence J Kuhlman
Autumn D Spaeth ESQ
Mohammed Abdizadeh Pro Se
Jesse Bojorquez Represented By
2:00 PM
Lawrence J Kuhlman Autumn D Spaeth ESQ
Continental Capital LLC Represented By Cara J Hagan
Stephen Collias Represented By Cara J Hagan
Plaintiff(s):
William G Morschauser Represented By Hutchison B Meltzer Reid A Winthrop
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
Adv#: 6:17-01050 United States Trustee for the Central District of v. Pryor
Also #8 EH
Docket 14
07/26/2017
Factual Background
On October 13, 2015, Jack C. Pryor ("Defendant") filed a voluntary Chapter
11 bankruptcy, case number 6:15-19998 ("Bankruptcy Case"). The case was subsequently converted to a Chapter 7. Defendant is being represented by Trent Thompson ("Thompson") in the Bankruptcy Case.
In the Bankruptcy Case, the Court ordered Defendant to turn over solar panels to the Trustee ("Turnover Order"). On January 12, 2017, the Court found Defendant was in contempt for violating the Turnover Order.
On February 28, 2017, the United States Trustee ("Plaintiff") filed a Complaint to Deny Discharge ("Complaint") pursuant to 11 U.S.C. §§ 727(a)(2) and (a)(6). Defendant was served with the Complaint on March 9, 2017 and an answer, if any, was due by March 31, 2017. Default was entered against Defendant on April 17, 2017.
Defendant has now filed a Motion to Set Aside the Entry for Default ("Motion"). In support of this Motion, Defendant presents as evidence a declaration from Thompson, who asserts he was not Defendant’s counsel at the time the Complaint was filed or when default was entered. Defendant alleges that Thompson acted with excusable neglect. Defendant alleges that he received the Complaint and
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Defendant’s wife sent the Complaint to Thompson via e-mail on or about March 1, 2017. Thompson did not review the e-mail and alleges he was not aware of the Complaint until April 27, 2017, when he received another e-mail from Defendant’s wife. This Motion was filed on July 3, 2017.
Opposition
On July 12, 2017, Plaintiff filed an opposition ("Opposition") with the Court. Plaintiff alleges Defendant has failed to meet his burden of proof to set aside entry of default. Plaintiff asserts that Defendant intentionally failed to respond to the Complaint and Defendant is attempting to manipulate the Court in order to avoid compliance. Furthermore, Plaintiff contends that Defendant has not raised any grounds which would present evidence of a meritorious defense. Plaintiff asserts that setting aside the entry of default would result in prejudice by allowing Defendant to continue to evade the Turnover Order.
Reply
On July 19, 2017, Defendant filed a reply ("Reply") to Plaintiff’s Opposition,
including a response to the evidentiary objections. Defendant alleges that Plaintiff’s Opposition is erroneous and improper. Defendant asserts that Plaintiff has misinterpreted Thompson’s declaration, particularly paragraph 11. Defendant attempts to clarify by stating that the paragraph was meant to convey that there was insufficient time to file this Motion before July and was not a strategic move to intentionally fail to respond to the Complaint. Defendant asserts that there was no decision to intentionally ignore the Complaint and that the necessary requirements for a motion to set aside entry of default have been met.
Discussion
Evidentiary Objections
On July 14, 2017, Plaintiff filed seven specific evidentiary objections to
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Thompson’s Declaration. Federal Rules of Evidence apply to bankruptcy court, cases, and proceedings. Fed. R. Evid. 1101.
Objection 1
Plaintiff objects to Thompson’s testimony that, "On or about 3/1/2017, I received an email from Maxine Miller."[Dock. 23 quoting Thompson Dec. ¶4, lines 10-11] as hearsay (Fed. R. Evid. 801), for lack of foundation (Fed. R. Evid. 602), and based on the best evidence rule (Fed. R. Evid. 1003).
The objection is sustained.
Objection 2
Plaintiff objects to Thompson’s testimony that:
"On or about 04/27/2017, I became aware of the email which had been sent to me on 03/01/2017. On or about 04/27/2017, I received another email from Ms. Miller discussing her proposed Answer to the Adversary Complaint which she had drafted for Jack Pryor."
[Dock. 23 quoting Thompson Dec. ¶6, lines 15-19]. Plaintiff objects to the testimony as hearsay (Fed. R. Evid. 801), for lack of foundation (Fed. R. Evid. 602), and based on the best evidence rule. (Fed. R. Evid. 1003).
This objection is sustained.
Objection 3
Plaintiff objects to Thompson’s testimony that "The email message stated that Ms. Miller had forgotten a deadline for filing of the proposed Answer to the Adversary complaint, and she claimed that she has missed the deadline ‘with so many things going on.’" [Dock. 23 quoting Thompson Dec. ¶7, lines 20-22]. Plaintiff objects to the testimony as hearsay (Fed. R. Evid. 801), for lack of foundation (Fed. R. Evid. 602), and under the best evidence rule (Fed. R. Evid. 1003).
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The Objections are sustained.
Objection 4
Plaintiff objects to Thompson’s testimony that, "Despite the communication from Ms. Miller, I take full responsibility for failing to timely respond to the Adversary complaint on Jack Pryor’s behalf." [Dock. 23 quoting Thompson Dec. ¶8, lines 24-25]. Plaintiff objects to the testimony as hearsay (Fed. R. Evid. 801), for lack of foundation (Fed. R. Evid. 602), best evidence (Fed. R. Evid. 1003), and prejudice (Fed. R. Evid. 403).
This objection is sustained.
Objection 5
Plaintiff objects to Thompson’s testimony declaring that "The Adversary Complaint was never served upon my office by the U.S. Trustee’s Office." [Dock. 23 quoting Thompson Dec. ¶9, lines 1-2]. Plaintiff grounds the objection to the testimony as lacking relevance (Fed. R. Evid. 402).
The objection is sustained.
Objection 6
Plaintiff objects to Thompson’s testimony asserting that "However, as stated above, I became aware of the Adversary Complaint on or about 04/27/2017." [Dock. 23 quoting Thompson Dec. ¶9, lines 2-3]. Plaintiff objects to the testimony as hearsay (Fed. R. Evid. 801), for lack of foundation (Fed. R. Evid. 602), and pursuant to the best evidence rule (Fed. R. Evid. 1003).
The objection is sustained.
Objection 7
Plaintiff objects to Thompson’s testimony, declaring:
"I realize that I should have become aware of the Adversary Complaint on or about 3/1/2017, when it was sent to me via email by Maxine Miller. Had I seen the email, I could have
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discussed with Jack Pryor what he wanted me to do."
[Dock. 23 quoting Thompson Dec. ¶10, lines 5-7]. Plaintiff objects to the testimony as being hearsay (Fed. R. Evid. 801), lacking foundation (Fed. R. Evid. 602), best evidence (Fed. R. Evid. 1003), speculation (Fed. R. Evid. 601 & 602), and as an improper opinion (Fed. R. Evid. 701).
The objection is sustained.
Motion to Set Aside Entry of Default
An entry of default may be set aside for good cause. Fed. R. Civ. P. 55(c). Fed.
R. Civ. P. 55(c) is made applicable to bankruptcy proceedings by Fed. R. Bankr. P. 7055. Fed. R. Bankr. P. 7055. When setting aside an entry of default the court has "especially broad" discretion. Brady v. U.S., 211 F.3d 499, 504 (9th Cir. 2000). However, a case should be decided on the merits whenever possible. Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984).
Good cause can be determined by evaluating three factors (1) whether the defaulting party engaged in culpable conduct leading to the default, (2) whether the defaulting party has failed to present a meritorious defense, or (3) whether the non- defaulting party would be prejudiced by setting aside the default. U.S. v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (citing Franchise Holding II, 375 F.3d at 925-926). These factors are in the disjunctive and thus the Court may deny this Motion if any one of the factors is present. Franchise Holding II, LLC. V. Huntington Rest. Grp. Inc.¸ 375 F.3d 922, 926 (9th Cir. 2004) (citing Am. Ass’n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1108 (9th Cir. 2000)).
Culpable Conduct
Culpable conduct may be found when the defendant has received actual or constructive notice of the complaint and intentionally failed to answer. Mesle, 615 F.3d at 1092. Intentional, in this context, means that the defendant had the "intention to take advantage of the opposing party, interfere with judicial decision making, or
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otherwise manipulate the legal process." Id. However, when a party is legally sophisticated, intention may be presumed because the party has an understanding of the consequences of its actions. Id. at 1093.
Here, Defendant asserts that failure to answer was the result of Thompson’s excusable neglect. Defendant’s wife e-mailed Thompson the Complaint or about the date it was filed with the Court but Thompson did not see the e-mail. A second e-mail was sent to Thompson in which Defendant’s wife attached a proposed answer. Thompson, however, asserts he did not think of himself as Defendant’s attorney.
Plaintiff counters that Defendant’s conduct was culpable, as it was an attempt to manipulate the bankruptcy system. Plaintiff alleges Defendant and counsel are deliberately creating uncertainty regarding the Debtor’s represented status. Plaintiff asserts that Defendant was aware of the consequences of failing to respond. Defendant instead of answering the Complaint chose to contest the Turnover Order in the Bankruptcy Case.
Both Defendant and Thompson assert that there was no agreement between them for representation in this proceeding. It is unclear at what point, if at any, Thompson was retained in this matter. Since no agreement was made between Defendant and Thompson, Thompson’s conduct is of no significance given that it was up to Defendant to respond to the Complaint. Thus, the Court will look at the conduct of the Defendant in evaluating whether the Defendant engaged in culpable conduct leading to the entry of default.
The Ninth Circuit has made a distinction regarding culpable conduct between parties who are legally sophisticated and those which are not. A legally sophisticated party can be found when the party has access to outside counsel or "understands the dangers of failing to file an answer." Lakeview Cheese Co., LLC v. Nelson-Ricks Creamery Co., 296 F.R.D 649, 653 (D. Idaho 2013). In Meadows, the court found that a foreign entity was "sufficiently sophisticated" to protect its interests, where the party
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had been involved "in other actions in United States courts." Meadows v. Dominican Republic, 817 F.2d 517, 522 (9th Cir. 1987). Here, the Court finds Defendant to be a legally sophisticated party. Defendant has been involved in other court actions, has indicated in past proceedings before this Court that he has owned and/or managed more than one business, has filed four bankruptcy cases, and has filed pro per responses in his bankruptcy case (the Court takes judicial notices of responsive pleadings filed by Jack Pryor). At the time Defendant was served with this Complaint, Defendant had counsel representing him in the Bankruptcy Case (Stephen Wade substituted out of the case on May 2, 2017 per Docket No. 260). Furthermore, among other things, Debtor had been previously admonished by this Court for failing to observe deadlines. Pursuant to LBR 2090-1 (a)(3)(A), an attorney in a chapter 7 case "advises the debtor about the possibility of any additional proceedings related to or arising from the underlying bankruptcy case." Defendant thus presumably had access to counsel from Mr. Wade or could have engaged Mr. Thompson at the time the Complaint was filed. Notwithstanding even assuming the Defendant did not receive legal advice regarding the Complaint, the Court finds that as a legally sophisticated party, Defendant’s intentional failure to answer can be presumed. Mesle, 615 F.3d at 1093.
Even assuming, arguendo, Defendant was not a legally sophisticated party, Defendant’s culpable conduct led to the default. Defendant’s actions are culpable when "there is no explanation of the default inconsistent with a devious, deliberate, willful, or bad faith failure to respond." TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d. 691, 698 (9th Cir. 2001). Here, Defendant provides no explanation as to why he failed to respond. Defendant only asserts via inadmissible evidence that his wife sent the Complaint to Thompson (who was not even engaged as counsel at the time), and appears to be attempting to couch the missed deadline in terms of a miscommunication between Thomson and Pryor regarding the scope of representation. However, assuming the Court accepts Defendant’s argument, the Motion contains no evidence by the Defendant as to why he specifically did not respond to the Complaint and importantly, no statement by the Defendant as to whether and why he believed Thompson was responsible for representing him in the adversary proceeding.
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Under Fed. R. Bankr. P. 7012, "[i]f a complaint is duly served, the defendant shall serve an answer within 30 days after the issuance of the summons, except when a different time is prescribed by the court. Fed. R. Bankr. P. 7012. The rules is clear Defendant "shall" serve an answer, serving and filing an answer is not an option but rather a requirement. The summons was issued on March
The Court finds that Defendant’s culpable conduct led to the default. Therefore, pursuant to Franchise Holding II¸ this alone is a basis to deny the Motion.
Meritorious Defense
The meritorious defense factor is not "extraordinarily heavy," but rather requires only that defendant allege sufficient facts that, when taken as true, would create a defense. Mesle, 615 F.3d at 1094.
Plaintiff alleges that Defendant’s refusal to comply with the Court’s Turnover Order requires the court to deny discharge under 11 U.S.C. §727(a)(6). Defendant asserts that he has a meritorious defense in that it was impossible for Defendant to comply with the Turnover Order because the solar panels had been sold, and thus it was not an intentional violation of a court order. Furthermore, Defendant asserts that the Turnover Order did not call for turnover of the sale proceeds.
Plaintiff also alleged in the Complaint that Defendant concealed the sale of property of the estate with the intent to hinder, delay or defraud creditors or an officer of the estate. Therefore, arguing that the Court should deny discharge under 11 U.S.C.
§727(a)(2)(B). Plaintiff must show that the Defendant held an actual intent to hinder, delay, or defraud. In re Devers¸759 F.2d 751, 753 (9th Cir. 1985). Thus, a meritorious
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defense would include facts demonstrating that Defendant had no actual intent.
Defendant asserts that he has a meritorious defense to this claim. Defendant asserts that he did not believe the solar panels were property of the estate, did not intend to defraud his personal creditors, and only removed the solar panels belonging to Access Solar to pay himself and his wife wages owed to them.
However, as Defendant has not provided any evidence whatsoever (merely allegations) in support of the Motion, the Court finds that Defendant has failed to establish facts that may create a defense as to Plaintiff’s claims. As such, this factor supports denying the request to set aside of the entry of default.
Prejudice against non-defaulting party
In order for prejudice to bar setting aside an entry of default, the prejudice suffered by the non-defaulting party must be more than a delay of the resolution of the case. Mesle, 615 F.3d 1095. "The standard is whether [plaintiff’s] ability to pursue his claim will be hindered." Falk, 739 F.2d at 463. However, a delay is prejudicial if it would result "in tangible harm such as loss of evidence, increased difficulties of discovery, or greater opportunity for fraud or collusions." TCI Grp.¸ 244 F.3d. at 701.
Here, Defendant asserts that Plaintiff would not be prejudiced by setting aside the entry of default. However, Plaintiff counters he will suffer prejudice by allowing Defendant to continue to evade the Turnover Order.
Plaintiff’s assertion that prejudice would be suffered by allowing Defendant to continue to evade the Turnover Order is not sufficient. To the contrary, the record of the case indicates that the chapter 7 trustee is competently pursuing enforcement of
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the Court’s Turnover Order.
The Court finds that the non-defaulting party would not suffer prejudice by setting aside the entry of default. However, the Mesle test is in the disjunctive.
As set forth above, the Court is inclined to DENY the Motion based on the Defendant’s culpable conduct which resulted in the entry of default against him, and because of Debtor’s failure to establish a meritorious defense. In particular, the record supports a finding that the Debtor is a legally sophisticated party that knew or should have known that he had a duty to respond to the Complaint. Notwithstanding this knowledge, the Debtor failed to respond. In response, the Debtor has provided largely inadmissible evidence that there a response was contemplated but not effectuated due to a miscommunication regarding the scope of representation of the Debtor by his counsel, Thompson. Similarly, Debtor has failed to present any evidence to support the existence of a meritorious defense.
APPEARANCES REQUIRED.
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Defendant(s):
Jack C Pryor Represented By
Linda J DeVore
Movant(s):
Jack C Pryor Represented By
Linda J DeVore
2:00 PM
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
2:00 PM
Adv#: 6:17-01050 United States Trustee for the Central District of v. Pryor
From: 5/3/17, 7/12/17 Also #7
EH
Docket 1
- NONE LISTED -
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Defendant(s):
Jack C Pryor Represented By
Linda J DeVore
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe
2:00 PM
Brandon J Iskander
2:00 PM
Adv#: 6:16-01211 Olivares v. Dason
From: 11/2/16, 1/4/17, 3/1/17, 3/8/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Sam Daniel Dason Represented By Robert G Uriarte
Defendant(s):
Sam Daniel Dason Represented By Robert G Uriarte
Joint Debtor(s):
Greeta Sam Dason Represented By Robert G Uriarte
Plaintiff(s):
Juddy Olivares Represented By Lazaro E Fernandez
Trustee(s):
Lynda T. Bui (TR) Represented By Brett Ramsaur
2:00 PM
Adv#: 6:16-01176 Simons v. Navarro
From: 9/7/16, 11/9/16, 1/11/17, 3/8/17, 4/12/17, 5/17/17, 6/7/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Jose Antonio Hernandez Represented By
Jessica De Anda Leon
Defendant(s):
Carolina Villalobos Navarro Represented By Christopher J Langley
Plaintiff(s):
Larry D Simons Represented By Frank X Ruggier
Trustee(s):
Larry D Simons (TR) Represented By Frank X Ruggier
2:00 PM
Adv#: 6:17-01002 BOSNIAN WAND AIRLINES v. Eddington
From: 3/8/17, 3/22/17, 4/5/17, 7/19/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
William Mark Eddington Represented By Jenny L Doling
Defendant(s):
William Mark Eddington Represented By Summer M Shaw
Plaintiff(s):
BOSNIAN WAND AIRLINES Represented By
John T Van Geffen
Trustee(s):
Todd A. Frealy (TR) Pro Se
2:00 PM
Adv#: 6:16-01286 Apostolakis v. Neiderhiser
Also #13 EH
Docket 13
04/26/2017
The Court is inclined to DENY the Motion for Default Judgment as moot based on the Court’s granting of the MSA.
Debtor(s):
Patricia Glenn Apostolakis Represented By Todd L Turoci
Defendant(s):
Patricia Neiderhiser Represented By Phillip Myer
Movant(s):
Patricia Apostolakis Represented By Todd L Turoci
Plaintiff(s):
Patricia Apostolakis Represented By Todd L Turoci
2:00 PM
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:16-01286 Apostolakis v. Neiderhiser
From: 2/8/17, 3/29/17, 4/26/17, 6/21/17 Also #12
EH
Docket 1
- NONE LISTED -
Debtor(s):
Patricia Glenn Apostolakis Represented By Todd L Turoci
Defendant(s):
Patricia Neiderhiser Represented By Phillip Myer
Plaintiff(s):
Patricia Apostolakis Represented By Todd L Turoci
Trustee(s):
Karl T Anderson (TR) Pro Se
12:30 PM
EH
Docket 96
- NONE LISTED -
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Movant(s):
Deborah Ann Stoddard Represented By Matthew D Resnik Matthew D Resnik David Brian Lally David Brian Lally
Brad Stoddard Represented By Matthew D Resnik Matthew D Resnik David Brian Lally David Brian Lally
12:30 PM
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 77
DISCUSSION
Applicant seeks supplemental fees of $750, the standard no-look fee for work related to a Motion to Modify filed on January 27, 2017. The Trustee filed comments indicating his disapproval based on the following:
The case is in month 68 and payments under the plan have been completed;
On May 4, 2017, Trustee filed a Notice of Intent to File a Final Report and Account;
On April 21, 2017, Trustee issued the Debtors a refund of excess plan payments in the amount of $1,016.43;
Debtors have filed their Certificate of compliance (completion of plan payments); and
Trustee has no funds with which to pay allowed administrative claims.
Applicant requests that the Court approve the fees and permit the fees to be paid outside of the plan prior to the entry of discharge.
TENTATIVE RULING
The Court is inclined to allow the fees. APPEARANCES REQUIRED.
12:30 PM
Debtor(s):
Robert W Mesa Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Mary G Mesa Represented By
Jenny L Doling Summer M Shaw
Movant(s):
Mary G Mesa Represented By
Jenny L Doling Jenny L Doling Summer M Shaw Summer M Shaw
Robert W Mesa Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
From: 5/11/17, 7/20/17 Also #4
EH
Docket 62
- NONE LISTED -
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Movant(s):
Cynthia Smith Represented By Jenny L Doling Jenny L Doling
James W Smith Sr. Represented By Jenny L Doling Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
From: 5/11/17, 7/20/17 Also #3
EH
Docket 57
- NONE LISTED -
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
From: 7/20/17 Also #6
EH
Docket 69
- NONE LISTED -
Debtor(s):
Gustavo C Madrigal Represented By Jenny L Doling
Joint Debtor(s):
Magdaline E M Madrigal Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
Also #5 EH
Docket 77
- NONE LISTED -
Debtor(s):
Gustavo C Madrigal Represented By Jenny L Doling
Joint Debtor(s):
Magdaline E M Madrigal Represented By Jenny L Doling
Movant(s):
Magdaline E M Madrigal Represented By Jenny L Doling
Gustavo C Madrigal Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
EH
Docket 72
- NONE LISTED -
Debtor(s):
John Walter Green Represented By Marc A Duxbury
Joint Debtor(s):
Janice Sotto Lopez Green Represented By Marc A Duxbury
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
From: 2/9/17, 3/9/17, 5/11/17, 7/20/17 EH
Docket 63
- NONE LISTED -
Debtor(s):
Emilio Aispuro Represented By Clifford Bordeaux
Joint Debtor(s):
Luz Angelica Aispuro Represented By Clifford Bordeaux
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
EH
Docket 64
- NONE LISTED -
Debtor(s):
April S Flores Represented By
Javier H Castillo
Joint Debtor(s):
Gregory P Flores Represented By Javier H Castillo
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 73
- NONE LISTED -
Debtor(s):
Tang Pham Represented By
Carey C Pickford
Joint Debtor(s):
Kina Pham Represented By
Carey C Pickford
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 59
- NONE LISTED -
Debtor(s):
Reynaldo Gutierrez Represented By Steven J Diamond
Joint Debtor(s):
Corinna Delgado-Gutierrez Represented By Steven J Diamond
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
12:31 PM
Docket 57
- NONE LISTED -
Debtor(s):
Ronald Gene Sundvall Represented By Hector C Perez
Joint Debtor(s):
Bonnie Lyn Sundvall Represented By Hector C Perez
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 69
- NONE LISTED -
Debtor(s):
Rory P Renish Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Karen S Renish Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
From: 7/20/17 EH
Docket 104
- NONE LISTED -
Debtor(s):
Donald Mark Prather Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 69
- NONE LISTED -
Debtor(s):
Veronica Nolasco Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jose Carlos Pina Represented By Bryn C Deb
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 32
- NONE LISTED -
Debtor(s):
Teresa A Salvail Represented By Julie J Villalobos
Joint Debtor(s):
Michael D Salvail Represented By Julie J Villalobos
Movant(s):
Michael D Salvail Represented By Julie J Villalobos
Teresa A Salvail Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 33
07/27/2017
Background:
On May 10, 2017 ("Petition Date"), Teresa and Michael Salvail (collectively, "Debtors") filed for chapter 13 relief. Rod Danielson is the duly appointed chapter 13 trustee ("Trustee").
On June 13, 2017, the California Franchise Tax Board (the "State") filed Claim No. 3-1 ("Claim No. 3") in the amount of $26,951.45. On June 26, 2017, the Debtors filed their Objection to the State’s claim ("Objection"). On July 12, 2017, the State filed its Opposition to the Objection ("Opposition"). The Debtors have filed no reply.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing
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upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis
The Debtors assert that Claim No. 3 must be amended because the unsecured non-priority debt owed to the State was discharged in the Debtors’ prior chapter 7 case, in which a discharge was received on May 10, 2017. In response, the State asserts that the underlying debts are for: (1) taxes that are not dischargeable pursuant to 11 U.S.C. § 523(a)(1) as to tax claims for 2012 and 2013 which were filed in 2016; and (2) for penalties which are not dischargeable under 11 U.S.C. § 523(a)(7).
Here, the Court finds that the Debtors failed to provide sufficient evidence to overcome the prima facie case that Claim No. 3 is valid at the outset. In particular, the Debtors’ bare argument that the State’s tax claims were discharged in the Debtor’s prior case without any citation to applicable legal authority and with no reference to
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any specific aspects of the claims is insufficient to shift the burden back to the State. However, assuming, arguendo, the Debtors had succeeded in shifting the burden, the State has returned with sufficient evidence and legal authority for the Court to find that Claim No. 3 is valid and that the underlying claims were not discharged in the prior case pursuant to §§ 523(a)(1) and 523(a)(7), by a preponderance of the evidence. Moreover, when confronted with the State’s evidence and legal authority, the Debtors failed to respond or otherwise to address the State’s Opposition.
Tentative Ruling
For the foregoing reasons, the Objection is OVERRULED as to Claim No. 3.
APPEARANCES REQUIRED.
Debtor(s):
Teresa A Salvail Represented By Julie J Villalobos
Joint Debtor(s):
Michael D Salvail Represented By Julie J Villalobos
Movant(s):
Michael D Salvail Represented By Julie J Villalobos
Teresa A Salvail Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
MOVANT: UNITED CATHOLICS FEDERAL CREDIT UNION
From: 6/20/17, 6/22/17 Also #17, 18 & 20
EH
Docket 15
- NONE LISTED -
Debtor(s):
Teresa A Salvail Represented By Julie J Villalobos
Joint Debtor(s):
Michael D Salvail Represented By Julie J Villalobos
Movant(s):
United Catholics Federal Credit Represented By Alana B Anaya
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #17, 18 & 19 EH
Docket 0
- NONE LISTED -
Debtor(s):
Teresa A Salvail Represented By Julie J Villalobos
Joint Debtor(s):
Michael D Salvail Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Harris Miller Represented By
Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Michael Robert Tucker Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Walter Lemus Represented By Gary S Saunders
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ernesto Ayon Lopez Represented By
James Geoffrey Beirne
Joint Debtor(s):
Dolores Millan Sanchez Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Lawrence D Leavingston Sr. Represented By Gilbert A Diaz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Miriam Guadalupe Fricks Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 6/30/17
Also #28 EH
Docket 12
07/27/2017
BACKGROUND
On June 12, 2017 ("Petition Date"), Maria Hurtado (the "Debtor") filed her petition for chapter 13 relief.
The docket reflects that the Debtor has filed numerous prior cases as follows:
Case Number 17-13778, Chapter 13 filed in California Central Bankruptcy on 05/05/2017 , Dismissed for Failure to File Information on 05/23/2017;
Case Number 17-10118, Chapter 13 filed in California Central Bankruptcy on 01/06/2017 , Dismissed for Failure to File Information on 01/24/2017;
Case Number 14-24995, Chapter 7 filed in California Central Bankruptcy on 12/16/2014, Standard Discharge on 03/30/2015; and
Case Number 01-10331, Chapter 7 filed in California Central Bankruptcy on 01/09/2001, Standard Discharge on 06/19/2001.
On June 30, 2017, the Debtor’s instant case was dismissed for failure to file information. On the same date, the Office of the United States Trustee ("UST") filed a Motion to Dismiss Chapter 7 Case with a Re-Filing Bar (the "Motion"). No opposition has been filed.
As a threshold matter, the Court notes that the case has already been dismissed. As such the request for dismissal is moot. Nevertheless, the Court shall consider the UST’s request for a bar to re-filing pursuant to §§ 349 and 105(a) to
12:32 PM
prevent further abuse of the bankruptcy system.
DISCUSSION
Here, the UST argues that dismissal of the Debtor’s case is insufficient because the Debtor is a serial filer who filed three cases in 2017 alone, all of which were dismissed for failure to file documents. Additionally, in the Debtor’s instant case she failed to disclose her prior cases in her sworn petition and is ineligible for a chapter 13 discharge due to her having received a chapter 7 discharge on March 30, 2015. Finally, the Debtor’s petition indicates that the Debtor’s purpose in filing the instant case is only to forestall a foreclosure. Coupled with the Debtor’s ineligibility for a discharge under either chapter 7 or 13, the Court finds that the UST has established that the case was filed in bad faith.
Based on the foregoing facts, including a record of noncompliance with the duties of a debtor, the UST has established that a one-year bar under the Court’s § 105 and § 349 authority is appropriate.
TENTATIVE RULING
The Court’s tentative ruling is to GRANT the request for a one-year re-filing bar. The request to dismiss the case is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Maria Fernandez Hurtado Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 6/30/17
Also #27 EH
Docket 0
- NONE LISTED -
Debtor(s):
Maria Fernandez Hurtado Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Roger James Gardner Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Rafael Davalos Represented By Jenny L Doling
Joint Debtor(s):
Rosario B. Davalos Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joan Eleanor Demiany Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Louis Lee Brown III Represented By Jenny L Doling
Joint Debtor(s):
Teri Claudette Brown Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gilberto Martinez Villa Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 7/5/17
EH
Docket 0
- NONE LISTED -
Debtor(s):
Christopher Charles Grosey Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ruben Lopez Represented By
Terrence Fantauzzi
Joint Debtor(s):
Jessica Lopez Represented By Terrence Fantauzzi
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gwendolyn Washington Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 7/7/17
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ida Mary Valencia Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Keith F Keating Represented By Sundee M Teeple Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Luis Palos Valenzuela Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Romeo C. Torres Represented By Ryan A Stubbe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Susan E Duynstee Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 7/11/17
EH
Docket 0
- NONE LISTED -
Debtor(s):
Min Joo Choi Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Trevor D. Washington Represented By Julie J Villalobos
Joint Debtor(s):
Sandra Washington Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 92
- NONE LISTED -
Debtor(s):
Liliana Gomez Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 59
- NONE LISTED -
Debtor(s):
Delfina Ramos Hernandez Represented By Edward G Topolski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 71
- NONE LISTED -
Debtor(s):
Jesus Manuel Gomez Represented By Dana Travis
Joint Debtor(s):
Maria Gomez Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 34
- NONE LISTED -
Debtor(s):
Richard John Arceneaux Represented By Gregory M Shanfeld
Joint Debtor(s):
Nina Marie Arceneaux Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 64
- NONE LISTED -
Debtor(s):
ROBERT A HAGUE Represented By Manfred Schroer
Joint Debtor(s):
DIANNE L HAGUE Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 45
- NONE LISTED -
Debtor(s):
Joseph John Vargas Represented By Dana Travis
Joint Debtor(s):
Lydia Vargas Represented By
Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 29
- NONE LISTED -
Debtor(s):
Marc Meisenheimer Represented By Lionel E Giron
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 27
- NONE LISTED -
Debtor(s):
Aaron M. Flake Represented By Amanda G Billyard
Joint Debtor(s):
Jeanie M. Flake Represented By Amanda G Billyard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 29
- NONE LISTED -
Debtor(s):
Joe Nathan Banks Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 28
- NONE LISTED -
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:00 PM
FROM: 5/3/17, 5/17/17, 5/31/17, 6/28/17
Also #2 EH
Docket 46
06/28/2017
BACKGROUND
On August 30, 2016 ("Petition Date"), Dispatch Transportation LLC ("Debtor") filed its petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee").
On April 6, 2017, USA Waste of California, Inc. ("USA Waste") filed its Motion for an Order Authorizing the Examination of Craig Johnson and the Issuance of Subpoenas Duces Tecum to Commodity Trucking Acquisition, LLC ("CTA") and Craig Johnson Pursuant to Fed.R. Bankr.P. 2004 ("Motion"). USA Waste brings its Motion on the basis that it believes that the Debtor’s case was filed in bad faith.
Specifically, it appears that USA Waste believes the Debtor’s asserts were transferred prepetition to CTA so that the Debtor could then file bankruptcy and discharge debts without having to liquidate its assets. In support, USA Waste asserts that CTA is run by the same managers, at the same location, with the same assets, and with representation of the same counsel as the Debtor.
The initially scheduled hearing was continued by stipulation of the parties and was subsequently continued by the Court to June 28, 2017. On May 3, 2017, oppositions to the Motion were filed by CTA and by Craig Johnson. A reply to the
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oppositions was filed on May 24, 2017.
USA Waste asserts by its Motion that under the broad scope of FRBP 2004, examination of Craig Johnson and subpoena of records in CTA’s and Craig Johnson’s possession is justified because these parties have access to information that USA Waste requires to evaluate the Debtor’s assets, liabilities, and prepetition activities in incurring the liabilities of the estate. (Motion at 3:25-28). Additionally, the initial Motion included a declaration from the Trustee indicating that he waived the Debtor’s attorney-client privilege as to communications between the Debtor and Craig Johnson for purposes of the requested examinations. (Daff Decl. ¶3).
In opposition to the Motion, CTA generally asserts that the Motion should be denied because: (1) the Motion is moot because the Trustee retracted the waiver of the Debtor’s attorney-client privilege with Mr. Johnson; (2) CTA obtained the Debtor’s assets through a "commercially reasonable" Article 9 sale; (3) the Motion is itself only an attempt by USA Waste to obtain privileged information via the bankruptcy process that it could not otherwise obtain and use in connection with currently stayed state court litigation; (4) USA Waste is hoping to obtain privileged information in preparation for the filing of suit against CTA. The Court’s Docket reflects that on May 3, 2017, the Trustee filed his Notice of Withdrawal of Waiver of Privilege. (Docket No. 59).
The Manning Pit dispute
In 2004, pursuant to a settlement agreement, the City of Irwindale was bound by a "Prioritization" provision which set forth the rules regarding which city quarries could be filled, when they could be filled, and by whom. In 2004, USA Waste obtained rights to fill a city quarry referred to by the parties as the "Arrow Pit". On or about 2007, the Debtor obtained a contract to fill a separate quarry – the "Manning Pit." A dispute subsequently arose about whether the Debtor’s contract and work violated the Prioritization provision.
The Article 9 Sale
CTA alleges that it acquired the Debtor’s assets via an Article 9 sale after the Debtor defaulted on debts owed to its first priority secured creditor, Comerica Bank. CTA asserts that Comerica effectuated a foreclosure sale on September 14, 2011 under Michigan law at which CTA was the buyer. CTA purchased the Debtor’s assets for $12 million, which included its equipment, trade names, business names, leases,
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contracts etc. CTA notes that the individuals who shared management or ownership interests in both the Debtor and CTA did so because they made capital contributions for such interests. In support of their assertion that CTA’s purchase of the Debtor’s assets was proper, CTA and Mr. Johnson point to the decision of the San Bernardino Superior Court in which a different party attempted to bring suit against CTA as an alleged alter ego of the Debtor, and in which the Superior Court found no alter ego liability. This Court, however, notes that the decision of the Superior Court may have no preclusive effect in this case.
The Basis for USA Waste’s claim against the Debtor
In 2013, USA Waste commenced a lawsuit against the Debtor for Intentional Interference with Contractual Relations and for Unfair Competition. Discover was conducted and a motion for summary judgment was filed by the Debtor which was denied by the trial court. The Superior Court scheduled trial for August 2016 but then trailed the trial to September 2016. The instant petition was filed on August 30, 2016
– staying USA Waste’s litigation against the Debtor.
DISCUSSION
Bankruptcy Rule 2004 is a broadly construed discovery device which permits any party in interest in a bankruptcy proceeding to move for a court order to examine any entity so long as the examination relates to "acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge." Fed.R.Bankr.P. 2004(b). The scope of inquiry permitted under a Rule 2004 examination is generally very broad and can "legitimately be in the nature of a ‘fishing expedition.’ " In re Wilcher, 56 B.R. 428, 433 (Bankr.N.D.Ill.1985). Such an examination, however, cannot be " ‘used for purposes of abuse or harassment’ and it ‘cannot stray into matters which are not relevant to the basic inquiry.’ " In re Table Talk, 51 B.R. 143, 145 (Bankr.D.Mass.1985) (quoting In re Mittco, Inc., 44 B.R. 35, 36 (Bankr.E.D.Wis.1984)). If the party to be examined makes a motion to quash a Rule 2004 subpoena, the examiner must show that there is good cause for taking the requested discovery. In re Wilcher, 56 B.R. at 434.
The Court now turns to its analysis of whether production and examination under Rule 2004 are warranted:
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As to CTA, USA Waste specifically requests production of the following:
Request 1
"… all data storage devices, including hard drives, containing information or documents concerning the Manning Pit, any former assets of the Debtor that were acquired by CTA, and/or the division of CTA referred to as "Dispatch Transportation" by CTA or CTA’s agents, employees or managers such as Kim Pugmire."
The Court disagrees with CTA’s objection that the requested documents do not relate to the administration of the bankruptcy estate. Specifically, the information regarding the Manning Pit is directly related to USA Waste’s claim in the Debtor’s bankruptcy. The remaining request appears to concern USA Waste’s contention that CTA and the Debtor colluded to shield assets from USA Waste and to prevent it from being able to establish its claim against the Debtor. On this point, based on the evidence in the record, it does not appear that the Superior Court’s prior adjudication of the Article 9 sale issues precludes USA Waste from potentially asserting alter ego claims against CTA, and its officers/managers or owners in connection with the Debtor’s bankruptcy case for the benefit of the estate’s creditors. However, the Court is inclined to limit the request to providing copies of the relevant documents rather than requiring provision of actual devices or hard drives.
As to Craig Johnson, USA Waste requests:
Request 1
All e-mails or other documents (excluding those documents which are part of the public record of proceedings) that you authored, transmitted, or received on behalf of Debtor concerning USA Waste of California, Inc. v. City of Irwindale, et al., Los Angeles Superior Court Case No. KC066276
Request 2
All documents for which Debtor invoked the attorney-client privilege in USA Waste of California, Inc. v. City of Irwindale, et al., Los Angeles Superior Court Case No. KC066276 as reflected in the Privilege Log attached hereto as Exhibit A.
Request 3
All documents concerning the Manning Pit.
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Request 4
All documents concerning the division of CTA referred to as "Dispatch Transportation" by CTA or CTA’s agents, employees or managers such as Kim Pugmire.
As to Craig Johnson, the Court is unpersuaded that the Pugmire testimony constitutes a waiver of the attorney-client privilege. Hernandez v. Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010). Disclosing a privileged communication or raising a claim that requires disclosure of a protected communication results in waiver as to all other communications on the same subject. United States v. Nobles, 422 U.S. 225, 239-40, 95 S.Ct. 2160, 45 L.Ed.2d 141 (1975); Weil v. Inv./Indicators, Research & Mgmt., 647 F.2d 18, 24 (9th Cir.1981) ("[V]oluntary disclosure of the content of a privileged attorney communication constitutes waiver of the privilege as to all other such communications on the same subject."); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir.1992) ("Where a party raises a claim which in fairness requires disclosure of the protected communication, the privilege may be implicitly waived."). The Court, having reviewed Exhibit E of the Pugmire testimony, finds that Mr.
Pugmire was asked and frequently responded to general questions regarding who was representing the Debtor as to specific transactions, to which he frequently made reference to Mr. Johnson. However, it is not clear from the general questioning that Mr. Pugmire ever uttered a statement that would specifically waive the attorney-client privileges attached to communications with Mr. Johnson. Moreover, the rule regarding waiver as to disclosed communications is limited to "communications on the same subject." Nobles at 439-40. However, here, USA Waste’s examination requests are broad and include no limitations as to subject, or otherwise. At a minimum, to prevail USA Waste would need to point to each specific statement in the deposition testimony that it contends effectuates a privilege waiver and separately identify which subject is not protected by the privilege. Having failed to go through this exercise, the Court finds the general references to Mr. Johnson’s representation and to Mr. Pugmire’s general statements regarding his interactions with Mr. Johnson unpersuasive as a basis to conclude that there has been a waiver of the attorney-client privilege.
Based on the foregoing, the Court finds that USA Waste’s Motion must be denied as to all requests made to Mr. Johnson to the extent that the attorney-client
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privilege is asserted, so specifically as to requests 1 and 2. However, the Court agrees that the third and fourth requests generally request information regarding the Manning Pit and CTA’s "Dispatch Transportation" division, which appears relevant. Mr.
Johnson is free to provide a privilege log in response.
TENTATIVE RULING
The Motion is GRANTED IN PART and DENIED IN PART.
GRANTED (but limited) as to USA Waste’s request to CTA for documents related to the Manning Pit, and to documents related to CTA’s purchase of the Debtor’s assets.
DENIED as to USA Waste’s 1st and 2nd requests to Craig Johnson, and GRANTED as to requests 3 and 4.
APPEARANCES REQUIRED.
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
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Also #1 EH
Docket 82
- NONE LISTED -
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
Charles W Daff (TR) Represented By Toan B Chung
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
2:00 PM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
(Holding date)
From: 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17, 6/14/17, 6/28/17
Also #4 EH
Docket 10
07/31/2017
BACKGROUND
On October 25, 2013, Douglas Jay Roger ("Debtor") filed his petition for chapter 7 relief. On September 22, 2014, Revere Financial Corporation ("Revere") and Jerry Wang ("Receiver") filed a complaint for determination of the dischargeability of debts pursuant to §§ 523(a)(2)(B), 523(a)(2)(A), 523(a)(4)(A), 523(a)(4) & 523(a)(6); and objecting to the Debtor’s discharge pursuant to §§727(a)(3), 727(a)(4)(A), 727(a) (4)(B), 727(a)(5), & 727(a)(7) ("Complaint").
On October 6, 2014, the Debtor filed a Motion to Dismiss, to Strike, and for a More Definite Statement ("Motion"). The operative pleadings are as follows:
Memorandum by Jerry Wang in Opposition to Motion (Docket No. 13);
Memorandum by Secured Creditor Revere in Opposition to Motion (Docket No. 14);
Reply of Debtor to Jerry Wang’s Opposition (Docket No. 15);
Reply of Debtor to Revere & Jerry Wang’s Opposition (Docket No. 16);
Debtor’s Supplemental Brief (Docket No. 19); and
Chapter 7 Trustee’s Opposition to Motion (Docket No. 34).
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DISCUSSION
Civil Rule 12(b)(6) standards
Under Civil Rule 12(b)(6), made applicable in adversary proceedings through Rule 7012, a bankruptcy court may dismiss a complaint if it fails to "state a claim upon which relief can be granted." In reviewing a Civil Rule 12(b)(6) motion, the trial court must accept as true all facts alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.
2001). However, the trial court need not accept as true conclusory allegations in a complaint or legal characterizations cast in the form of factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007);
Hartman v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008).
To avoid dismissal under Civil Rule 12(b)(6), a plaintiff must aver in the complaint "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). It is axiomatic that a claim cannot be plausible when it has no legal basis. A dismissal under Civil Rule 12(b)(6) may be based either on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson
Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir.2008).
The Debtor asserts primarily that (1) the Receiver has no "authority" to bring the action; and (2) to the extent that Revere’s claim for damages includes fees and expenses incurred by the Receiver in its claim for damages, such claim is not proper because neither the Debtor nor Revere is obligated for the Receiver’s fees and expenses. To the extent the Debtor prevails on this second argument, the Debtor also requests that the claim of Revere for fees and expenses incurred by the Receiver be stricken, and that Revere be required to set forth a more definite statement of its damages.
The Receiver’s "Authority" to Bring the Action Against the Debtor
A. The Receiver Needed Authority from the Appointing Court to bring an Action
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Once a court appoints a receiver, "[i]t is the rule that: ‘The functions and powers
of a receiver are controlled by statute, by the order appointing him, and by orders subsequently made by the court. He has no powers beyond those so
conferred.’ Downtown Sunnyvale Residential LLC v. Wells Fargo Bank, N.A., No. H038572, 2015 WL 263727, at *9 (Cal. Ct. App. Jan. 20, 2015) (citing 42 Cal.Jur.2d, Receivers, § 73; and see authority there collected.)" (Morand v. Superior Court (1974) 38 Cal.App.3d 347, 351 (Morand ).) "Where a receiver's powers and duties are not directly prescribed by statute, they are dependent upon the court's order of appointment." (Nulaid Farmers Assn. v. LaTorre (1967) 252 Cal.App.2d 788, 791.) A receiver's powers " ‘may be expanded or contracted by subsequent court order.’ " (Resolution Trust Corp. v. Bayside Developers (9th Cir.1994) 43 F.3d 1230, 1242 (Resolution Trust Corp.), citing to Cal–American Income Property Fund VII v. Brown Development Corp. (1982) 138 Cal.App.3d 268, 273 (Cal–American ).)
The Debtor cites to Cal. C.C.P. § 568 (CCP 568) and to Morand regarding the powers of receivers for the proposition that the Receiver has no authority to bring the instant action. CCP 568 provides, in pertinent part, that
The receiver has, under the control of the Court, power to bring and defend actions in his own name, as receiver; to take and keep possession of the property, to receive rents, collect debts, to compound for and compromise the same, to make transfers, and generally to do such acts respecting the property as the Court may authorize.
The Debtor argues that because the order appointing the Receiver did not enumerate the authority to file lawsuits as a power authorized by the Court, that the Receiver is without such authority until such time as he receives authorization from the Superior Court to file this action. Although authorities are scant, the authorities cited by the Debtor and found by this Court support the conclusion that for the Receiver to institute an action, the order appointing the Receiver must at a minimum contain language generally, if not specifically, authorizing/directing the commencement of actions. See e.g.
Harting v. Cebrian, 10 Cal. App. 2d 10, 51 P.2d 195 (1935).
The Receiver, for his part, argues that he was directed to manage the receivership estate, including to "take possession, custody, and control" of various
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assets that comprise the "Receivership Estate" and to "[c]ollect all proceeds of the Receivership Estate, whether equity, income, payments, rents, revenue, sale, or otherwise." (Receiver Opp’n at 2). This language, however, is insufficient for the purpose of authorizing the Receiver to initiate legal actions. See e.g. Harting v.
Cebrian, 10 Cal. App. 2d 10, 51 P.2d 195 (1935). In support of its position, the
Receiver cites Title Ins. & Tr. Co. v. Grider, 152 Cal. 746, 94 P. 601 (1908). However, Grider dealt with two issues not present in the instant action – first, an attack on the underlying basis for the appointment of a receiver, and second, an assertion that the property at issue was not property that the Receiver was authorized to collect. Neither issue resolves the issue of whether the language of a receivership order authorizes the initiation of an action.
Based on the foregoing, the Court finds that the failure of the Receiver to allege that the receivership order provided him with the authority to initiate actions on behalf of the Receivership Estate is grounds for dismissal.
Although moot, assuming the Receiver did have authority to file the Complaint, as to the Receiver’s claim for damages the Receiver has clarified that it does not seek its own fees, expenses, and costs. Instead, it seeks recovery of receivership assets. To the extent the Receiver’s claim for damages is limited to recovery of assets of the receivership estate, such damages appear to fall squarely within the bounds of the Order Appointing Receiver. As such, the Receiver would need to amend the Complaint to clarify that its request for damages is limited to recovering assets of the receivership estate.
Revere is Not Liable to the Receiver for Fees and Costs and Thus Cannot Seek to Recover Such Fees and Costs as Damages
The Debtor argues that Revere has no basis to include fees and expenses of the Receiver. In response, Revere has cited to authorities indicating that in the event that the receivership estate is insufficient to pay the Receiver’s fees and expenses, courts have, in some cases, found third parties liable to the receivers for the deficiency. The Debtor asserts that Atl. Tr. Co. v. Chapman, 208 U.S. 360, 374, 28 S. Ct. 406, 410, 52
L. Ed. 528 (1908), is dispositive of this issue.
The Supreme Court, in Atlantic Trust, acknowledged that third parties may be
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held liable in certain circumstances but indicated that such cases were rare. The Supreme Court stated, in pertinent part:
It is true that cases are cited in which the party bringing a suit in which a receiver is appointed has been held liable for expenses incurred by the receiver in excess of the proceeds arising from the sale of the property. But in most, if not in all, of those cases, the circumstances were peculiar and were such as to make it right and equitable, in the opinion of the court, that that should be done.
Id. As the Debtor acknowledges, the Supreme Court did not hold that a third party could under no circumstances be liable for a receiver’s fees and expenses. Instead, the Debtor asserts only that the specific cases cited by Revere in which a third party was held liable are not applicable to the facts alleged in the instant case. Here, the Debtor does not address the broad language of the Commercial Security Agreement (Complaint at Ex. 3 at 42) in which Revere has pointed to provisions of Debtor’s loan documentation, which may provide Revere with a basis to recover for fees and expenses owed to the Receiver for his services. However, notwithstanding this point, the Complaint does not include allegations that the receivership estate will not have funds to fully compensate the Receiver such that Revere could claim any liability for his costs and fees. Nor does the Complaint set forth a claim based on the contractual language cited by Revere in its opposition. As such, the Court finds that the Complaint does not contain sufficient factual allegations to support a plausible claim for damages based on the Receiver’s fees and costs.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the Motion as to dismissal of the Receiver, and as to striking Revere’s claim for damages to the extent it includes fees and costs owed to the Receiver.
The Motion is DENIED as to it request for dismissal without leave to amend. There has been no showing by Debtor to justify dismissal with prejudice. The Receiver and Revere shall have 60 days from the date of entry of the order on the Motion to amend the Complaint.
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Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Movant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
Jerry Wang Represented By
Franklin R Fraley Jr Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
From: 11/26/14, 1/26/15, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16, 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17, 6/14/17, 6/28/17
Also #3 EH
Docket 1
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
Jerry Wang Represented By
Franklin R Fraley Jr
2:00 PM
Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
EH
Docket 51
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on Debtor’s failure to make required post-petition payments. GRANT waiver of 4001(a)(3) stay. GRANT relief under ¶2, ¶3, and ¶12. Relief DENIED under ¶13 as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Sergio Reyes Represented By
Patricia A Mireles
Joint Debtor(s):
Maria De Los Angeles Reyes Represented By Patricia A Mireles
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
10:00 AM
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: DITECH FINANCIAL LLC
EH
Docket 61
- NONE LISTED -
Debtor(s):
Sean Paul Crandell Represented By Arnold H Wuhrman
Joint Debtor(s):
Gina Rosario Crandell Represented By Arnold H Wuhrman
Movant(s):
Ditech Financial LLC Represented By Andrew Kussmaul James F Lewin Renee M Parker
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR DEUTSCHE ALT-B SECURITIES, MORTGAGE LOAN TRUST, SERIES 2006- AB2
EH
Docket 94
August 1, 2017 Service: Proper Opposition: Yes
Subject to adequate protection discussions, the Court is inclined to GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request under § 13 is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
William Raymond Gayler Represented By Norma Duenas
Joint Debtor(s):
Donna Nan Ling Gayler Pro Se
Movant(s):
HSBC Bank USA, National Represented By Ryan P Spitalnick
10:00 AM
Trustee(s):
April Harriott Seth Greenhill Sean C Ferry
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 114
Service: Proper Opposition: Yes
Movant has established sufficient grounds to support relief from stay under § 362(d)
(1) based on Debtor’s failure to make required post-petition payments. Debtor alleges that more payments have been made to the Movant then the Motion accounts for and that some payments have been misapplied by the Movant, but provides no specificity or detail to support his assertions.
APPEARANCES REQUIRED.
Debtor(s):
Robert Wayne Cook Sr. Represented By Steven A Alpert
Joint Debtor(s):
Kelly Danielle Cook Represented By Steven A Alpert
Movant(s):
Wells Fargo Bank, N.A . Represented By
Dane W Exnowski
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FCI LENDER SERVICES, INC.
From: 7/25/17 EH
Docket 48
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on Debtor’s failure to make required postpetition payments. DENY relief under § 362(d)(2) based on Debtor’s lack of equity in the property because Movant failed to fill in the required information in ¶11(h) of the Real Property Declaration from Debtor’s attached schedules. GRANT relief under ¶2 and ¶3. GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Mario Eduardo Rojo Represented By Phillip Myer
Joint Debtor(s):
Lourdes Rojo Represented By Phillip Myer
10:00 AM
Movant(s):
FCI Lender Services, Inc., servicing Represented By
Edward G Schloss
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ROSA BRYANT
From: 5/30/17 EH
Docket 32
- NONE LISTED -
Debtor(s):
YBF Tax, Inc. Represented By Ronald W Ask
Movant(s):
Rosa Bryant Represented By
Michael F Chekian
Trustee(s):
Karl T Anderson (TR) Represented By Lovee D Sarenas
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
CASE DISMISSED 5/26/17
From: 6/27/17, 7/11/17 EH
Docket 12
07/11/2017
Service: Improper Opposition: None
Once improper service is remedied, the tentative ruling is to GRANT relief from the stay under §§ 362(d)(1) and 362(d)(4) based on the following: Debtor has not paid mortgage for over two years, Movant is one of two creditors listed in case commencement documents, Debtor filed only a few case commencement documents and schedules, and the statement of financial affairs have not been filed. Additionally, the Debtor’s failure to file required documents resulted in dismissal of the case on May 26, 2017. Debtor has also filed two previous bankruptcies with respect to the property in 2016 which were dismissed. Based on the foregoing, the Court is inclined to GRANT relief pursuant to ¶2, ¶5, ¶7b, and ¶9b. Court is also inclined to GRANT relief that Movant may provide and enter into potential forbearance agreement; confirming that no stay is in effect pursuant to § 362(c)(4). GRANT waiver of 4001(a)
(3) stay.
As reflected above, while the court is inclined to grant relief from stay, service was improper due to Movant’s failure to serve Debtor. Specifically, the Debtor’s address
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of record is 3865 Vermont St., San Bernardino, CA 92407, however, Movant served the Debtor at 865 Vermont St., San Bernardino, CA 92407. Based on the foregoing, the hearing will be continued to August 1, 2017, at 10:00 a.m.
APPEARANCES WAIVED. Movant to file and serve an amended Notice of Motion and Motion on the Debtor at the correct address no later than July 12, 2017.
Debtor(s):
Hermelinda Diaz Pro Se
Movant(s):
WELLS FARGO BANK, N.A. Represented By Jason C Kolbe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICREDIT FINANCIAL SERVICES, INC.
EH
Docket 10
August 1, 2017 Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on a lack of equity cushion. GRANT relief from stay under § 362 (d)(2) based on lack of equity. GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Kerry Neville Morgan Represented By
Richard Komisars III
Joint Debtor(s):
April Bathsheba Bethea-Morgan Represented By
Richard Komisars III
Movant(s):
AmeriCredit Financial Services, Inc. Represented By
Mandy D Youngblood
10:00 AM
Trustee(s):
Sheryl K Ith
Howard B Grobstein (TR) Pro Se
2:00 PM
EH
Docket 266
BACKGROUND
On May 11, 2016, Debtor filed a Chapter 11 voluntary petition. Debtor operated a medical account receivable collection service. On November 30, 2016, a Chapter 11 trustee was appointed.
On June 2, 2017, UST filed a motion to dismiss the Chapter 11 case for failure to pay quarterly fees of either $9,750 or $6,825, which were delinquent as of May 1, 2017. On June 13, 2017, the Chapter 11 trustee filed opposition to the motion to dismiss.
DISCUSSION
11 U.S.C. § 1112(b) provides that a case may be dismissed or converted for cause. Section 1112(b)(4) enumerates certain examples of cause, including "failure to pay any fees or charges required under chapter 123 of title 28." 28 USC § 1930(a)(6) imposed the statutory fees for Chapter 11 cases. Therefore, cause exists to convert the
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case when Chapter 11 quarterly fees are not paid.
The Chapter 11 trustee states, however, that $6,000 of the past due fees were paid on June 12, 2017, and that the Chapter 11 trustee will pay the remaining balance.
TENTATIVE RULING
Chapter 11 trustee to inform the Court whether the Chapter 11 quarterly fees have been paid in full.
APPEARANCES REQUIRED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
United States Trustee (RS) Represented By Michael J Bujold
Abram Feuerstein esq Everett L Green Mohammad Tehrani
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
MOVANT: ROIC CALIFORNIA LLC
From: 7/11/17 EH
Docket 60
The Court is inclined to GRANT relief pursuant to § 362(d)(1). GRANT requests under ¶¶ 2 and 6. GRANT request under ¶9 upon recording of a copy of this order or giving appropriate notice of its entry in compliance with applicable nonbankruptcy law. DENY requests under ¶ 3 and 7 for lack of cause shown. DENY alternative request for adequate protection as moot.
The case was converted to Chapter 7 after the motion was filed, however, so the hearing will need to be continued for service on Chapter 7 trustee.
APPERANCES REQUIRED.
Debtor(s):
Malik Muhammad Asif Represented By
2:00 PM
Todd L Turoci
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
ROIC California, LLC Represented By Robert C Thorn
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
From: 7/12/17 EH
Docket 9
- NONE LISTED -
Debtor(s):
Linda E Long Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
From: 3/1/17, 5/3/17, 6/14/17, 6/28/17 Also #3,4,5 & 6
EH
Docket 440
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
10:00 AM
From: 6/28/17 Also #2,4,5 & 6 EH
Docket 318
PROCEDURAL BACKGROUND
On October 20, 2013, Douglas Jay Roger, MD, Inc., ("Debtor") filed a Chapter 7 voluntary petition. On October 20, 2015, Trustee filed two complaints. The first complaint (‘First Complaint") named OIC Medical Corp. ("OIC"), Liberty Orthopedic Corp. ("LOC"), and University Orthopaedic Group ("UOG") as defendants, and was for avoidance, recovery, and preservation of preferential and fraudulent transfers. The second complaint ("Second Complaint") named Douglas J. Roger, M.D., Inc. Defined Benefit Plan ("DJRI Benefit Plan") (OIC, LOC, UOG, and DJRI Benefit Plan, collectively, "Defendants") as defendant, and also was for avoidance, recovery, and preservation of preferential transfers.
On April 6, 2016, the Trustee filed two motions to approve compromise (collectively, the "Original Compromise Motions"), corresponding to the two complaints identified above. On April 18, 2016, Kajan Mather & Barish ("KMB") filed oppositions to the motions for compromise. On April 25, 2016, Revere Financial Corporation ("Revere") filed objections to the motions for compromise, joining the opposition of KMB. On May 4, 2016, Trustee filed replies to KMB’s oppositions and Revere’s objections. On May 9, 2016, KMB withdrew its opposition.
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On May 11, 2016, a hearing was held on the matter, however, based on the representations of the parties, the hearing was continued. On May 25, 2016, Defendants filed joinders in the motions for compromise. The hearing was repeatedly continued to allow for discussions between Trustee and Revere.
On November 5, 2016, Defendants filed motions to enforce their respective settlement agreements with Trustee (collectively, the "Enforcement Motions"). Nevertheless, the Original Compromise Motions and the Enforcement Motions were again continued by stipulation.
On January 18, 2017, Revere filed oppositions to the motions to enforce, and Trustee joined in the oppositions. On January 19, 2017, KMB filed joinders to the motions to enforce.
On January 31, 2017, Revere and Trustee filed a joint motion to approve a settlement between Trustee and Revere (the "New Compromise Motion"). On February 1, 2017, hearings were held on the Original Compromise Motions and the Enforcement Motions. In light of the New Compromise Motion, the Court continued the matter.
On February 14, 2017, Bank of Southern California, N.A. ("BSC") filed an objection to the New Compromise Motion. On June 14, 2017, Defendants and KMB filed separate oppositions to the New Compromise Motion. On June 21, 2017, Revere filed a reply in support of the New Compromise Motion.
FACTUAL BACKGROUND
There are two distinct settlement motions under consideration: (1) the New Compromise Motion; and (2) the Original Compromise Motions (and the corresponding Enforcement Motions).
New Compromise Motions
The New Compromise Motion1 creates four categories of assets: (1) cash held by Trustee and in which Revere claims a security interest; (2) cash currently held by Revere, previously distributed by Trustee; (3) tax refunds; and (4) claims. Revere proposes to grant a carve-out of 100 percent of category one ($183,480.95) and
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$43,493 in category two, totaling $226,973.95, in addition to a carve out of any tax refunds.
In return, the settlement agreement provides that Trustee will agree to allow Revere a claim of $5,500,000.00, of which $4,000,000.00 will be treated as secured. Trustee also waives the right to challenge the validity or priority of Revere’s security interest, and abandons any remaining interest in Revere’s collateral. Revere is also granted the right to prosecute all claims owned by the bankruptcy estate that are not prosecuted by the Trustee or the contemplated liquidating trustee, and Revere is granted relief from stay to prosecute all such actions.
The settlement agreement contemplates the creation of a liquidating trust. As part of the creation of such a trust, the Trustee is to withdraw from all pending settlements for avoidance actions. Revere (or its nominee) will act as trustee of the liquidating trust.
The rights to pursue Debtor’s causes of action will be assigned to the liquidating trust, and Revere will have full discretion to determine which claims to pursue. Revere will cover the costs incurred by the liquidating trust. With some caveats, any proceeds recovered by the liquidating trust will be split 75/25 between Revere and the bankruptcy estate.
The settlement agreement also contains a clause that it is voidable if it not approved as is.
Original Compromise Motions
The Original Compromise Motions consist of two separate compromises: (1) a compromise with OIC, LOC, and UOG; and (2) a compromise with DJRI Benefit Plan. The first compromise contemplated Trustee dismissing adversary proceeding 6:15-1307 in return for $30,000. The second compromise contemplated Trustee dismissing adversary proceeding 6:15-1309 in return for $50,000.
DISCUSSION
Legal Standard for Approving Compromise
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Rule 9019(a) authorizes the bankruptcy court to approve a compromise or settlement on the trustee's motion and after notice and a hearing. The bankruptcy court must consider all "factors relevant to a full and fair assessment of the wisdom of the proposed compromise." Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424, 88 S. Ct. 1157, 20 L. Ed. 2d 1 (1968). In
other words, the bankruptcy court must find that the settlement is "fair and equitable" in order to approve it. Martin v. Kane (In re A & C Props.), 784 F.2d 1377, 1381 (9th Cir. 1986).
In conducting this inquiry, the bankruptcy court must consider the following factors:
the probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises.
Id.
The bankruptcy court enjoys broad discretion in approving a compromise because it "is uniquely situated to consider the equities and reasonableness [of it] " United
States v. Alaska Nat'l Bank (In re Walsh Construction, Inc.), 669 F.2d 1325, 1328 (9th Cir. 1982). As stated in A & C Props.:
The purpose of a compromise agreement is to allow the trustee and the creditors to avoid the expenses and burdens associated with litigating sharply contested and dubious claims. The law favors compromise and not litigation for its own sake, and as long as the bankruptcy court amply considered the various factors that determined the reasonableness of the compromise, the court's decision must be affirmed.
Id. (citations omitted).
On the other hand, even though the bankruptcy court has wide latitude in approving compromises, its discretion is not completely unfettered. See Woodson v. Fireman's
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Fund Ins. Co. (In re Woodson), 839 F.2d 610, 620 (9th Cir. 1988). The trustee bears the burden of proving to the bankruptcy court that the settlement is fair and equitable and should be approved. In re A&C Props., 784 F.2d at 1382.
The Court shall first apply the A&C factors to the Original Compromise Motion in isolation.
The OIC, LOC, and UOG Compromise
The Probability of Success in the Underlying Litigation
The record is neutral as to the probability of success. In particular, the Trustee has identified the arguments being made by OIC, LOC and UOG in defense of the avoidance actions but has provided scant information with which to gauge the strength of the respect tive positions. This factor is neutral.
Difficulty of Collection
The Trustee’s Supplemental Declaration provides strong evidence underscoring the potential difficulty in collecting from OIC or LOC. In particular, the Trustee has determined that these entities are no longer going concerns and have no assets. This factor favors settlement.
Complexity, Cost, Inconvenience and Delay of Litigation
The difficulty in collection against OIC and LOC leaves UOG as the primary means for collection of any judgment. The action against UOG would require the Trustee to establish successor/alter ego liability. The Trustee concedes, however, that there is no evidence showing that any assets or customers were transferred to UOG from OIC, and UOG has indicated it acquired its contracts through a professional service.
Further, the Trustee indicated that many of the transfers originally alleged to have been recoverable are either duplicative, were paid out on behalf of the Debtor by OIC, or were not paid by the Debtor to OIC at all, such that the remaining amount of the approximately $1.1 million is approximately $600,000. Based on this information, the Trustee has demonstrated that the complexity and costs of litigation weigh in favor of settlement.
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Interest of Creditors
Based on the Trustee’s representation that the cost of litigation is likely to exceed any additional benefit to the Estate, the Trustee has established that settlement is in the best interests of creditors. This factor weighs in favor of settlement.
The DJRI Benefit Plan Compromise
The Probability of Success in the Underlying Litigation
The Trustee has provided evidence that success was predicated on a showing that DJRI Benefit Plan was an insider of the Debtor, and that DJRI Benefit Plan raised credible arguments to contest such a showing. This factor weighs in favor of settlement.
Difficulty of Collection
There are no specifics provided to indicate that collection would be particularly difficult. This factor is neutral.
Complexity, Cost, Inconvenience and Delay of Litigation
There is insufficient information provided to indicate that the litigation would be more complex, costly or inconvenient than what is customary. This factor is neutral.
Interest of Creditors
Based on the Trustee’s representation that DJRI Benefit Plan possesses strong arguments diminishing the probability of success for the Trustee, coupled with the certainty of the Estate receiving $50,000 for the benefit of the estate through this settlement, the settlement appears to be fair and equitable. This factor weighs in favor of settlement.
Motions to Enforce & the New Compromise
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Defendants filed motions to enforce the settlement and requested that the court grant the motions to compromise. Defendants contend that the settlement agreement constitutes a valid contract, that the contract is valid unless the court rejects it, and that Revere’s involvement in the proceedings is for the purpose of harassment and to increase attorney’s fees. Revere responded by contending that the settlement agreement does not constitute a valid contract, that Trustee can sell the adversary, and that Trustee has a duty to consider higher bids. Additionally, Revere has essentially offered its own bid by filing the New Compromise Motion.
Regarding, Revere’s contention that Trustee has the ability to sell or assign an avoidance action to a creditor, the Courts findings that In re P.R.T.C., Inc., 177 F.3d 774, 781 (9th Cir. 1999) and In re Prof’l Inv. Props. of Am., 955 F.2d 623, 625 (9th Cir. 1992) support Revere’s contention that the avoidance actions can be assigned. The limitations arguably imposed by these line of cases, that the assignment(s) occur pursuant to a plan of reorganization, or when a creditor is pursing interests common to all creditors, does not bar assignment of the avoidance actions at issue, since the recovery of preferential or fraudulent transfers is an interest common to all creditors.
While Defendants raise a variety of arguments against the New Compromise Motion in their opposition, there is no contention that Trustee lacks the legal authority to transfer the avoidance action.
KMB has objected that the proposed assignment is legally prohibited, but its argument is largely inaccurate. Citing In re Lahjani, 325 B.R. 282, 285 (B.A.P. 9th Cir. 2005), KMB asserts that there are three requirements for such a sale, and then argues that two of those requirements have not been met. First, KMB argues that the sale must be for a sum certain. While KMB allots one page to a subsection on this argument, there is no authority justifying the assertion. While Lahjani stated that "trustee avoiding powers may be transferred for a sum certain," it did not impose such a requirement, and the case it cited with regards to the statement, In re P.R.T.C., Inc., 177 F.3d 781- 82, did not mention such a requirement. Id. Therefore, the Court declines to read this statement by Lahjani as imposing a requirement. Likewise, KMB argues that that the assignment must benefit the entire estate. While it is true that such an assignment must benefit the estate, this argument does not assist the Court’s analysis since if there is no benefit to the estate, the New Compromise Motion will clearly not be considered
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an "overbid."
A more novel and complex issue is presented by the process that has led to the proposed assignment of the avoidance actions. Specifically, Trustee entered into a settlement with Defendants that would have resolved the actions, Defendants moved to enforce the actions, then Trustee entered into a second settlement, this time with Revere. To complicate matters further, the second settlement is much more expansive in the rights it affects.
First, as is noted by Defendants, the Court must approve the compromise of a claim before the agreement becomes enforceable. See Fed. R. Bankr. P. Rule 9019.
Nevertheless, there is case law that concludes Trustee does not have authority to unilaterally repudiate the settlement agreement. See, e.g., In re Seminole Walls & Ceilings Corp. 388 B.R. 386, 391-96 (Bankr. M.D. Fla. 2008) ("To the extent there is a split of authority, the Court finds the better-reasoned view is that the parties to a settlement agreement may not unilaterally repudiate it after approval of it has been sought pursuant to Rule 9019.") (collecting cases). The fact that Trustee cannot repudiate the settlement agreement does not mean that the Trustee must continue to actively support the agreement. See, e.g., In re Martin 91 F.3d 389, 394 (3rd Cir. 1996) ("The trustee may even opt not to argue in favor of the stipulation, as was done here, if she no longer believes the settlement to be in the best interest of the estate."). But the Court, nevertheless, has the authority to approve the settlement agreement over a trustee’s objection. See id. ("The trustee does not breach any term of the stipulation by [not supporting the agreement], for the bankruptcy court may nonetheless approve the settlement.").
As argued by Revere, however, the Court must consider preferable alternative offers, despite the Original Compromise Motions. Revere primarily cites to In re Mickey Thompson Entm’t Group, a case which stated:
We agree with the Third Circuit that the disposition by way of ‘compromise’ of a claim that is an asset of the estate is the equivalent of a sale of the intangible property represented by the claim, which transaction simultaneously implicates the ‘sale’ provisions under section 363 as implemented by Rule 6004 and the ‘compromise procedure of Rule 9019(a).
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292 B.R. 415, 421 (B.A.P. 9th Cir. 2003). By analogizing the Original Compromise Motions to sale motions, Revere is arguing that the proposed compromise be compared to other bids, instead of merely being compared to continuation of the underlying litigation. See, e.g., id. at 421-22 ("When confronted with a motion to approve a settlement under Rule 9019(a), a bankruptcy court is obliged to consider, as part of the ‘fair and equitable’ analysis, whether any property of the estate that would be disposed of in connection with the settlement might draw a higher price through a competitive process and be the proper subject of a section 363 sale. The possibility
that someone else may be willing to pay a higher price triggers the prospect of an auction that could yield an even higher price."). Nevertheless, the Court must be able to ascertain that the New Compromise Motion offered by Revere actually constitutes an overbid.
Comparison of the Original Compromise & the New Compromise
The majority of the briefing has, directly or indirectly, related to whether Revere has, in fact, tendered an overbid. As the Court said towards the beginning of the most recent hearing on the matter, on February 1, 2017:
Those [the Original Compromise Motions] were done I want to say nine, ten months ago, and then the motion was filed maybe seven, eight months ago roughly, and there’s been all this delay, and then less than 24 hours ago we get a massive stack of a new settlement from the Trustee and Revere that I think everyone would agree is very much not apples to apples. We’re now apples to oranges.
My preference would be, I mean, so much of this is coming very late. My preference would be that really given the time that’s passed and this, we’ll call it speculative nature of that new settlement, which I did not digest other than a very quick review, and it’s certainly far more complex than what was initially proposed, was really just to open up the pending motions to overbidder, and the, I was involved the Mickey Thompson case. I do believe that 9019 is subject to a 363 overbidding. I think that’s the right result. I’m not saying that a trustee can never, or a party can never, counter a straight dollar bid with a different more complex bid, and that’s certainly in the Trustee’s discretion or largely in the Trustee’s discretion, but these circumstances are a little bit
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different. There’s been such a passage of time, and the new settlement is so
complex and speculative related to what’s here, and as a backdrop against this, given the administrative expenses, I’m not comfortable that there’s going to be anything for anyone under any of these scenarios. So I feel the cleanest way is just to open up the pending settlement and if Revere believes they’re worth more, that’s fine. I understand the settlement is more expansive than that. The settlement can be revised to carve those out.
[Dkt. #454, p. 5-6]. In addition to the Court’s concern regarding the disparate nature of the New Compromise Motion compared to the Original Compromise Motions, the following concerns were among those raised at the hearing on February 1, 2017: (1) that the settlement agreement provided that it was voidable if modified by the Court; and (2) that the nature, extent, and priority of Revere’s lien, from which a carve-out was to be granted, were possibly subject to disputed. The Court later expressed its concerns to the parties regarding the operation of § 550 if Revere was successful in an avoidance action. The opposition of KMB and Defendants have largely questioned the value of Revere’s "overbid," and KMB has asserted that the Court does not have adequate information to compare the settlements.
Therefore, the Court must engage in the following two-step analysis: (1) does the New Compromise offer more value than the Original Compromise Motions; and (2) do concessions made to Revere in the New Compromise Motion sufficiently reduce the value provided by Revere as to prevent the New Compromise Motion from being an overbid.
There are also two secondary considerations that inform the Court’s deliberations. First, as noted by KMB, in making its determination, the Court must be presented with sufficient evidence to formulate an informed and intelligent opinion.
Nevertheless, as noted by Revere, the Court should not conduct a mini-trial on every disputed issue, for that would eliminate the utility of a settlement altogether.
Second, the Court is cognizant of the uniqueness of this situation. On one hand, the primary opposition to the New Compromise Motion comes from the Defendants, parties whose interest, if not exactly adverse to, are certainly not synonymous with the interests of the estate. On the other hand, if the New Compromise Motion provides a much greater benefit to the estate, as Revere contends, then it should have been
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relatively simple to bifurcate the New Compromise Motion to create two agreement:
(1) an overbid on the subject matter of the Original Compromise Motions; and (2) a settlement governing the remainder of the material in the New Compromise Motion. Yet, despite exhortations from the Court to that effect at the hearing on February 1, 2017, Revere has declined to adjust its position. This is even more concerning because the Court expressed skepticism regarding the characterization of the New Compromise Motion as an "overbid" at the hearing on February 1, 2017, then, later, expressed additional concerns that made the New Compromise Motion even less palatable, yet Revere has offered no clear response to the issues raised by the Court.
Returning to the two-step analysis identified above, the first consideration for the Court is to address the proposed Revere "carve-out." Importantly, if this "carve-out" was instead cash, the analysis today would be simpler. Therefore, the Court must consider why this distinction is important, and determine the consequences of the distinction. As noted in page 8 of Defendants’ opposition, there are two concerns in this respect: (1) whether Revere actually has a security interest in the carve-out funds; and (2) whether there is a senior security interest in those funds. Regarding the latter, page 7 of Revere’s reply appears to contain a warranty that if there is a senior secured interest, then Revere will provide funds to replace any value lost to the estate.2 This would appear to eliminate concerns regarding the priority of Revere’s security interest in the carve-out, if any. Regarding the former, a cursory review of Revere’s proof of claim (claim #11), establishes that Revere contends that it has a blanket lien on Debtor’s assets. The only remaining dispute would be whether the underlying security agreement is valid and enforceable against the estate. If it is, assuming the Court’s interpretation of Revere’s guarantee, outlined in footnote 1, is correct, it would appear that Revere has demonstrated it is offering more value than offered in the Original Compromise Motions.
But Revere is also requesting more in return. Specifically, not only would the avoidance actions underlying the Original Compromise Motions be assigned to a liquidating trust controlled by Revere, but all causes of action would be assigned. Specifically, the New Compromise Motion, at § 4.25, defines "liquidating trust assets" as:
all causes of action, claims, choses in action, and any rights of recovery whatsoever that the DJRI Estate now owns or owns in the future, except the tax attributes of DJRI.
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The New Compromise Motion also states that the Trustee will allow Revere a
$5,500,000 claim, of which $4,000,000 will be treated as secured. Additionally, the New Compromise Motion states that the Trustee will not contest the validity, perfection, and scope of the DJRI Security Agreement. Furthermore, the agreement provides that the Trustee grants Revere relief from stay to prosecute any claims of the bankruptcy estate, as well as Revere’s state-court action. Ultimately these three assets concessions are summarized as follows: (1) Revere’s claim is fixed at a certain amount; (2) all recovery rights of Trustee are assigned to a liquidating trust controlled by Revere; and (3) Revere has full freedom to prosecute any claims of the estate.
Regarding the fixing of Revere’s claim, Revere filed proof of claim number 11 which makes the contradictory statements that the amount of the claim is $2,935,429.17, that the secured claim is $4,768,638.29, and that the unsecured claim is $805,354.20.
While not objected to in the instant case, a similar and overlapping claim was filed in Debtor’s principal’s individual case, and is currently subject to a claim objection.
Trustee’s claim objection requested that the Court reduce the claim to $527,910, and hold an evidentiary hearing to determine how much of the claim is secured. While Trustee’s objection was withdrawn after reaching a resolution with Revere, the claim remains subject to dispute due to an objection filed by Debtor. While Debtor, or any other party, would appear to maintain the right to object to Revere’s claim, the New Compromise Motion, by its terms, appears to attempt to give Revere a blanket, first priority lien over all the estate’s assets by attempting to provide an adequate protection lien that relates back to 2007.
Second, regarding the prosecution of actions through the utilization of a liquidating trust, the open-ended nature of the settlement makes a valuation of such a right inherently speculative. The Court lacks sufficient evidence that would enable the formation of even a rough estimate.
Third, the blanket grant of relief from stay presents problems. For instance, the New Compromise Motion, at the first sentence of § III.A.3.d, states: "[t]he liquidating trustee has full discretion to decide which Liquidating Trust Assets to investigate, which Liquidating Trust Assets to advance litigation expenses/costs to pursue, and which Liquidating Trust Assets to liquidate." Then, the second clause of § III.B.8 states: "[t]he DJRI Trustee grants RFC relief from stay to prosecute all claims that the
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bankruptcy estate owns and that neither the Liquidating Trustee nor the DJRI Trustee choose to prosecute." These two statements, read in conjunction3, appear to indicate that Revere, in its unlimited discretion, would have the contractual right to decline to bring any actions through the liquidating trust, and then bring any action, in bankruptcy or state court, in its own name. In such a situation, the result would be that the Trustee agrees to receive $226,973.95 (all of which would likely go towards administrative claims, since, at the previous hearing, Trustee’s counsel stated its fees were already over $400,000) in return for essentially abdicating its role as Trustee, while Revere would, for all intents and purposes, own Debtor. Essentially, the result would be that Revere purchased Debtor from Trustee.
Ignoring the myriad potential problems with the above scenario, the situation illustrates the dilemma at issue here. Given the unwieldy administrative claims in this case, in order for there to be any distribution to unsecured creditors, Revere would have to recover, at a minimum, in excess of approximately $1,000,000. If such an amount were recovered, the New Compromise Motion would represent a great bargain for Revere, and Revere would easily recoup its cost. If such an amount is not recovered, then the unsecured creditors other than Revere will not be paid a penny, which reflects Revere’s apparent leverage over Trustee under the settlement. And, ultimately, the question becomes, what is being given up by Revere in the New Compromise Motion? A carve-out, representing approximately 5% of the collateral, based on a security agreement which is in dispute, a dispute the settlement attempts to close the door on.
While Revere, citing Lahijani, contends that the Court should estimate the value of each component of the New Compromise Motion, and that an "apples to oranges" overbid should be considered, the Court requires evidence upon which it can formulate an informed, intelligent estimate of the value of the different components. Here, the comprehensive and complicated nature of the settlement precludes such an estimate. While the Court acknowledges that it could attempt to evaluate an "apples to oranges" overbid, that is not what has been presented. Instead, the New Compromise Motion constitutes an "apples to kangaroos" overbid.
Finally, while Revere contends that deference to Trustee’s business judgment is necessary, the Court’s standard approach to settlement agreements is altered by the line of reasoning expressed in In re Seminole Walls & Ceilings Corp. 388 B.R. 386,
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391-96 (Bankr. M.D. Fla. 2008). The Court concludes that, rather than simply deferring to Trustee’s business judgment, the Court must determine whether the New Compromise Motion constitutes an overbid compared to the Original Compromise Motions. And, on the record before the Court, such a determination is infeasible.
Nevertheless, as the Court expressed at the previous hearing, if the New Compromise Motion is so clearly more beneficial to the bankruptcy estate than the Original Compromise Motions, Revere should have no trouble bifurcating the agreement to produce an overbid, and a remainder agreement, the latter of which, in the absence of a pre-existing competing settlement, would be assessed under the default, general Fed.
R. Bankr. P. Rule 9019 standards. Therefore, the Court is inclined to schedule an auction to allow Revere to overbid on the adversary proceedings related to the Original Compromise Motions. While such an overbid need not necessarily come in the form of "apples to apples," "apples to kangaroos" will be subject to the same concerns repeatedly expressed by the Court.
TENTATIVE RULING
Subject to discussion from the parties, the Court is inclined to schedule an auction.
APPEARANCES REQUIRED.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
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Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
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FROM: 6/28/17
Also #2,3,5 & 6 EH
Docket 320
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
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From: 6/28/17 Also #2,3,4 & 6 EH
Docket 404
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
OIC Medical Corporation Represented By Summer M Shaw
LIBERTY ORTHOPEDIC Represented By Summer M Shaw
UNIVERSAL ORTHOPAEDIC Represented By Summer M Shaw
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Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
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From: 6/28/17 Also #2,3,4 & 5 EH
Docket 403
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Douglas J Roger, MD, Inc. Defined Represented By
Summer M Shaw
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
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Docket 41
8/2/2017
Service: Proper Opposition: None
The Court has reviewed the motion, and good cause appearing, the Court is inclined to GRANT the motion, avoiding the lien of Safeco Insurance Company of America.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Clyde Lee Jaso Represented By Gregory J Doan Cheryl R Lee John F Brady
Joint Debtor(s):
Marie Lupe Jaso Represented By
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Movant(s):
Gregory J Doan Cheryl R Lee John F Brady
Marie Lupe Jaso Represented By Gregory J Doan Cheryl R Lee John F Brady
Clyde Lee Jaso Represented By Gregory J Doan Cheryl R Lee John F Brady
Trustee(s):
Robert Whitmore (TR) Pro Se
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EH
Docket 12
- NONE LISTED -
Debtor(s):
Modern Properties, LLC Represented By Robert L Firth
Movant(s):
Larry D Simons (TR) Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
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EH
Docket 0
- NONE LISTED -
Debtor(s):
Joycee Dalene Bowen Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
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Docket 33
8/2/17
Background:
On July 20, 2016, Ryan and Courtney Miller ("Debtors") filed a Chapter 7 voluntary petition. On December 8, 2016, Ford Motor Credit ("Creditor") filed a claim in the amount of $2,008.71 ("Claim 1"). On June 8, 2017, Trustee filed a "claim objection," which, instead of requesting that Claim 1 be disallowed, requested that Claim 1 be allowed as fully secure.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
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When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
11 U.S.C. § 502(a) states: "A claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest, including a creditor of a general partner in a partnership that is a debtor under chapter 7 of this title, objects." Therefore, Claim 1 is allowed in accordance with the proof of claim until an objection is filed with the Court.
Here, while Creditor indicated on Claim 1 that at least part of its claim was secured, it did not complete the portion of the proof of claim that would identify whether Claim 1 was wholly or partly secured. As a result, Claim 1 was entered in the claims register as an unsecured claim.
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Now Trustee requests that the Court treat Claim 1 as a fully secured claim. Fed. R. Bankr. P. Rule 3012 states:
The court may determine the value of a claim secured by a lien on property in which the estate has an interest on motion of any party in interest and after a hearing on notice to the holder of the secured claim and any other entity as the court may direct.
Trustee seeks to have the claim treated as fully secured so no distribution need be paid. Despite being served with the objection, creditor has not objected, and thus is deemed to consent to the relief requested pursuant to Local Rule 9013-(1)(h).
Tentative Ruling
The Court is inclined to SUSTAIN the claim objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Ryan David Miller Represented By Andrew Nguyen
Joint Debtor(s):
Courtney Renee Miller Represented By Andrew Nguyen
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Movant(s):
Robert Whitmore (TR) Pro Se
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
Docket 497
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
Docket 105
8/2/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 20,896.75 Trustee Expenses: $ 236.55
Attorney Fees: $ 65,098.08 Attorney Costs:$ 1,931.23
Accountant Fees:$ 4,017 Accountant Costs: $ 64.50
United States Bankruptcy Court: $600 United States Treasury: $361.05
The $1,670 reduction in accountant fees is due to the elimination of the following time entries:
$460 for 11/26/14. This entry includes lumping (the entry corresponds to four tasks), and appears unclear and possibly unnecessary. The entry appears to
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include 2.3 hours of review of calculations and related materials, despite the fact that the remainder of the time entries do not evidence any significant (possibly any) calculations occurring close in time to this review.
2) $500 for 1.30/17, $330 for 2/2/17, and $380 for 2/6/17. These three entries appear excessive or unnecessary. All three entries are for review of tax
documents which were already prepared, and the length of time and hourly rate billed appear unreasonable, especially considering that there is no indication that any revisions were required or completed.
Movant may elect not to appear and submit on the tentative, or may appear to argue the reductions noted in the tentative.
Debtor(s):
Roberta Louise Clark Represented By Robert L Firth
Trustee(s):
Todd A. Frealy (TR) Represented By Robert P Goe
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Docket 107
8/2/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and Counsel for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,629.50 Trustee Expenses: $ 352.30
Attorney Fees: $ 3,000 Attorney Costs: $ 595.82
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
JORGE V LAZARO Represented By Daniel S March
Joint Debtor(s):
YESSENIA M LAZARO Represented By Daniel S March
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Trustee(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman
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Docket 27
8/2/17
No opposition has been filed.
Service was proper under the circumstances.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expense:
Trustee Fees: $ 846.00
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Raymundo Carlos Jr. Represented By Donald M Medeiros
Joint Debtor(s):
Mili Dianely Carlos Represented By Donald M Medeiros
Trustee(s):
Howard B Grobstein (TR) Pro Se
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EH
Docket 35
08/02/2017
Factual Background
On June 3, 2016 ("Petition Date"), Barbara Ellen Dunn-Leonard ("Debtor") filed a chapter 7 petition. Discharge was granted on September 12, 2016. Larry D. Simons ("Trustee") is the duly appointed chapter 7 trustee.
Debtor’s Schedule A/B lists Debtor’s interest in a whole-life-policy-with-an- irrevocable-trust, Barbara Dunn-Leonard Insurance Trust ("Policy"). The beneficiaries to the Policy are listed as Ralph Edwards Production ("Ralph Edwards"), Daughter, and Son. The Policy has a cash value of $120,949.35. Debtor claims a $14,325.00 exemption pursuant to C.C.P. § 703.140 (b)(8) and a $18,149.00 exemption pursuant to C.C.P. § 703.140 (b)(5) on the Policy.
On October 7, 2016, Trustee sent an e-mail to Debtor’s counsel, Leslie K. Kaufman. In said e-mail Trustee asked "if there were any documents which would evidence the security interest in the life insurance policy as asserted by the debtor?" ("October 7 E-mail"). Trustee alleges that no response was received. Trustee then e- mailed Debtor’s counsel again on April 28, 2017 with a similar inquiry ("April 28 E- mail"). Trustee alleges no response was received from Debtor’s counsel regarding the April 28 E-mail. Trustee concedes that he is in possession of the Policy.
On July 5, 2016, Trustee filed a Motion for Order Compelling Turnover of Debtor’s Books and Records ("Motion"). Trustee alleges that Debtor has failed to comply with 11 U.S.C. §§ 521 and 542. Trustee requests that the Court compel Debtor to turnover books and records relating or pertaining to the Debtor’s interest in
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the cash surrender value of the Property and books and records relating to or pertaining to the security interest of Ralph Edwards in and to the Policy and its cash surrender value.
Opposition
On July 19, 2017, Debtor filed an opposition ("Opposition") to Trustee’s Motion. Debtor asserts that Trustee’s Motion is improper and a misrepresentation of the events leading to the Motion. Debtor asserts that she has fully complied with each of Trustee’s requests and there is no other information or documents to be turned over. Debtor asserts that, through counsel, she has spent more than a year trying to determine whether Debtor could do anything else to assist Trustee. Debtors attempts were ignored by Trustee and Trustee’s counsel.
In support of Debtor’s Opposition, Debtor provides as evidence a series of e- mails. The e-mails are outlined below:
Date | Sender | Content |
07/08/2016 | Debtor’s Counsel | E-mail containing letter explaining Ralph Edwards’ interest in the trust, as well as the 2015 Policy statement |
10/07/2016 | Trustee | Request for any further information about the Policy/Trust |
10/11/2016 | Debtor’s Counsel | Debtor is unaware of any security interest documents outside those set forth in the Trust |
11/29/2016 | Debtor’s Counsel | Request for call to discuss the Trust |
11/29/2016 | Trustee’s Counsel | Counsel states "I will reach out to you in the next day or so" |
12/13/2016 | Debtor’s Counsel | Counsel states "I have still not received any communication from you other than your email of November 29th. Please call me at your earliest convenience." |
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12/13/2016 | Trustee’s Counsel | Counsel states "I left a voicemail for you a week or two ago, I cannot recall. I will reach out again, but you can always send me an email with your inquiry and I will respond." |
12/13/2016 | Debtor’s Counsel | Counsel writes "There was no voicemail message. My November 28th email appears at the bottom of this chain below. Please call me at your earliest convenience." |
04/28/2016 | Debtor’s Counsel | Counsel writes " Despite the passage of almost six months I have still not received any substantive communication from you. I left messages on your voicemail on March 15, 2017 at 4:40 PM; and on April 26,2017 at 12:01 PM, but have yet to receive a return call. Please contact me at your earliest convenience so that we may discuss the above referenced bankruptcy matter." |
Each e-mail sent by Debtor’s counsel was sent to the attorney of record for Trustee as well as to the Trustee. Debtor’s counsel also requested to be advised if there had been a change of counsel or if it was best to communicate directly with Trustee.
Furthermore, Debtor asserts that Trustee’s representation that Debtor never responded to the request made via the October 7 E-mail is incorrect. Debtor responded to the request on October 11, 2017. Debtor also contends that the April 28 E-mail presented by Trustee in the Motion, was in fact a response to an e-mail sent by Debtor’s counsel and not a stand-alone inquiry made by Trustee.
Debtor requests that the Court award attorney fees and costs needed to oppose the Motion.
Reply
On July 26, 2017, the Trustee filed his reply to the Opposition asserting, correctly, that no direct evidence has been provided to support the explanations
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referenced by Debtor’s Counsel in her declaration.
Discussion
Motion for Order Compelling Turnover of Records
A debtor must cooperate with the trustee as necessary to enable the trustee to perform his statutory duties. 11 U.S.C. § 521(a)(3). Among those duties is the trustee’s duty to "collect and reduce to money the property of the estate for which the trustee serves, and close the estate as expeditiously as is compatible with the best interests of parties in interest." 11 U.S.C. § 704 (a)(1). Furthermore the trustee must "investigate the financial affairs of the debtor." 11 U.S.C § 704 (a)(4).
A debtor must surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers relating to the property of the estate. 11 U.S.C. § 521(a)(4). Property of the estate includes "all legal or equitable interests of the debtor is property as of the commencement of the case." 11 U.S.C. § 541(a)(1). Life insurance policies are not excluded from becoming part of the bankruptcy estate. Gladstone v. U.S. Bancorp¸ 811 F.3d 1133, 1140 (9th Cir. 2016).
Here, Debtor has presented in her Schedule A/B the Policy with a cash value of $120,949.35. Pursuant to 11 U.S.C. § 541(a)(1), the Policy is property of the estate. Debtor must surrender all books, document, records and papers relating to the Policy pursuant to 11 U.S.C. § 521(a)(4). Debtor asserts all documents have been surrendered.
Under 11 U.S.C. § 542(a), an entity in "possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title or that the debtor may exempt under section 522 of this title, shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate." 11 U.S.C. § 542(a). Trustee asserts that Debtor has failed comply with § 542 in that she has failed to deliver to Trustee the records pertaining to the Policy, Debtor’s interest in the cash value, and Ralph Edwards’ interest in the Policy.
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Trustee concedes that he is in possession of the Policy and the irrevocable trust. However, Trustee alleges that he needs to review any records pertaining to Ralph Edwards’ interest in the Policy in order to determine the validity of Ralph Edwards’ interest in the Policy. According to Trustee, Debtor has failed to cooperate with Trustee and those documents have been denied to him. Furthermore, Trustee needs the additional records to determine if Ralph Edwards’ interest is a preferential transfer or a fraudulent conveyance. This information is relevant to a determination of whether Ralph Edwards’ interest may be avoided for the benefit of the estate.
Debtor alleges that all documents requested by Trustee were turned over to Trustee on July 8, 2017. Debtor contends that there are no other documents which can be provided to Trustee and Trustee was informed of this on October 11, 2017. However, the Trustee correctly points out that the Debtor has not provided direct evidence from the Debtor regarding the underlying facts asserted in the Opposition. Specifically, the Opposition provides only second-hand hearsay evidence by Debtor’s counsel regarding the non-existence of documents responsive to the Trustee’s request for turnover and although the Opposition purports to provide an explanation of the facts surrounding the grant of a security interest to Ralph Edwards Productions by the Debtor in her Life Insurance Trust, there is no declaration by the Debtor to support these facts nor is Counsel able to testify to their veracity.
Debtor’s Request for Attorney’s Fees and Cost
Debtor fails to provide any statutory authority under which attorney’s fees and costs may be awarded. Thus, this request is denied.
Based on the foregoing, the Court is inclined to GRANT the Trustee’s Motion and order turnover of the documents. Alternatively, the Court may set the matter for an evidentiary hearing for the Debtor to testify regarding the facts described in the Opposition.
APPEARANCES REQUIRED.
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Debtor(s):
Barbara Ellen Dunn-Leonard Represented By Leslie K Kaufman
Movant(s):
Larry D Simons (TR) Represented By Daniel A Lev
Trustee(s):
Larry D Simons (TR) Represented By Daniel A Lev
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EH
Docket 18
Background 08/02/2017
On April 18, 2017, Gloria Carmen Bolanos ("Debtor") filed a voluntary petition under Chapter 7 commencing the current bankruptcy case. Lynda T. Bui ("Trustee") was appointed as the Chapter 7 trustee.
On April 20, 2017, the Trustee received a letter from Wells Fargo identifying a bank account owned by the Debtor with a value of $6,075.33. No bank account was identified in the Debtor’s bankruptcy schedules. On May 23, 2017, the Debtor failed to appear at the initial 341(a) meeting of creditors. The Debtor also failed to appear at the continued meetings on June 2, 2017 and June 20, 2017.
On June 28, 2017, the Trustee filed this motion to compel the Debtor’s attendance at a continued 341(a) meeting of creditors and cooperate with the Trustee ("Motion"). Currently, a continued 341(a) meeting is scheduled for July 25, 2017, and the Trustee has indicated that she would dismiss the motion if the Debtor attended. No opposition has been filed.
Discussion
The Bankruptcy Code and Federal Rules of Bankruptcy Procedure ("FRBP") impose several duties on Chapter 7 debtors. The debtor’s general duties in a bankruptcy case are set forth in Bankruptcy Code section 521. Federal and local bankruptcy rules specify how these duties are to be carried out.
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Bankruptcy Code section 343 states that "the debtor shall appear and submit to examination under oath at the meeting of creditors under section 341(a) of this title." 11 U.S.C. § 343 (emphasis added). FRBP 4002 also provides that a "debtor shall: (1) attend and submit to an examination at the times ordered by the court" and "(4) cooperate with the trustee in … the administration of the estate". FRBP 4002 (emphasis added). In other words, the debtor has a mandatory obligation to submit to examination at the 341(a) meeting of creditors and to cooperate with the Trustee in administration of the estate.
In this case, the Trustee has presented evidence in the form of a declaration that Debtor has failed to attend the initial 341(a) meeting and two continued 341(a) meetings. Further, the Trustee needs to examine the Debtor in order to determine if the Wells Fargo account is available for administration. As such, the Debtor has violated her duty to cooperate with the Trustee in her administration of the estate. Accordingly, the Debtor will be compelled to appear at the next scheduled 341(a) meeting, assuming the Debtor has failed to attend the meeting currently scheduled for July 25, 2017.
Tentative Ruling
Based on the foregoing, the Motion is GRANTED, and the Debtor is ordered to appear at the next 341(a) meeting of creditors scheduled by the Trustee.
APPEARANCES WAIVED. Movant to lodge order within 7 days.
Debtor(s):
Gloria Del Carmen Bolanos Pro Se
Movant(s):
Lynda T. Bui (TR) Pro Se
Trustee(s):
Lynda T. Bui (TR) Pro Se
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EH
Docket 34
- NONE LISTED -
Debtor(s):
William A. Mendez II Represented By Thomas J Polis
Joint Debtor(s):
Shawna D. Mendez Represented By Thomas J Polis
Movant(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
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CASE DISMISSED 3/6/17
From: 4/6/17, 4/26/17 EH
Docket 70
04/26/2017
BACKGROUND
On May 16, 2016 ("Petition Date"), Jina Soo Choi ("Debtor") filed her petition for chapter 13 relief. On August 4, 2016, the case was converted to a case under chapter 7. On January 6, 2017, the Debtor moved the Court for an order dismissing her case. The case was dismissed on March 6, 2017.
On March 10, 2017, the Office of the United States Trustee ("UST") filed its Motion of United States Trustee For An Order Disgorging Fees, Assessing Damages, And Imposing Fines And Against Bankruptcy Petition Preparer Sandra Cooper Pursuant to 11 U.S.C. § 110 ("Motion"). The Motion was amended on March 29, 2017.
On April 5, 2017, Sandra Cooper ("Cooper") filed her opposition to the Motion ("Opposition"). On April 19, 2017, the UST filed its reply to the Opposition ("Reply").
DISCUSSION
The Motion asserts that Cooper violated 11 U.S.C. § 110 by failing to disclose her identity as required by statute, by executing the Debtor’s signature, and by failing to furnish copies of the filed bankruptcy documents to the Debtor. Based thereon, the
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UST requests disgorgement of fees, statutory damages of $2,000 pursuant to § 110(i), and payment of fines to the UST in the total sum of $21,000 ($6,000 for individual violations in failing to disclose her identity as required under § 110(b)(1) and 110(c) (1), as tripled pursuant to §110(l)(1) for a total of $18,000, in addition to $3,000 for failing to furnish copies of the bankruptcy documents to the Debtor as required under
§110(d)). (Note: the Reply indicates that the UST will not pursue an additional $3,000 in fines requested by the Motion for executing documents on behalf of the Debtor unless the Court determines that an evidentiary hearing is appropriate).
By her Opposition, Cooper disputes that she is a bankruptcy petition preparer (a "BPP"). Cooper asserts that her assistance was limited to filing the bankruptcy petition ("walking in his paperwork") on behalf of Hee Chang Choi (the Debtor’s husband). (Opposition at ¶ 5). Cooper further asserts that she never met the Debtor and instead that she was asked to assist the Debtor’s husband with obtaining a loan modification (Id. at ¶¶2-3). Cooper disputes the allegation that she received any money either from the Debtor or from the Debtor’s husband (Id. at ¶ F) and instead repeatedly asserts that she was only assisting the Debtor’s husband on the request of an unidentified third party who had been helping the Debtor’s husband with a "Free and Clear" program. (Cooper Declaration).
In In re Reynoso, the Ninth Circuit provided examples of cases in which a party has been properly deemed a bankruptcy petition preparer. As the Ninth Circuit explained,
It goes without saying that the customer must provide data to the preparer, and the customer's role in printing or otherwise reproducing the forms before filing does not alter the role of the preparer.
Moreover, § 110 does not require that bankruptcy petition preparers have in-person interactions with their customers. Cf. Ferm v. U.S. Trustee (In re Crowe ), 243 B.R. 43, 49-50 (9th Cir. BAP 2000) (holding that the author of an instructional book on bankruptcy petitions who guaranteed buyers of the book that he would complete their forms for free if they were unable to do so themselves was, in fact, presenting himself as a bankruptcy petition preparer as defined by
§ 110(a)(1)), aff'd, 246 F.3d 673 (9th Cir.2000) (unpublished table decision); In re Doser, 281 B.R. 292, 303-04 (Bankr.D.Idaho 2002) (reasoning that a franchisor who receives information that was solicited
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in a face-to-face interaction between the franchisee and the customer and uses that information to prepare bankruptcy documents, but never meets with the customer directly, is a bankruptcy petition preparer), aff'd, 412 F.3d 1056.
In re Reynoso, 477 F.3d 1117, 1123–24 (9th Cir. 2007).
The Cooper Opposition and supporting declaration are vague as to the details of how or why Cooper was engaged to work with the Debtor’s husband. Cooper repeatedly makes reference to a third party that was a point of contact between the Debtor’s husband and her. However, this third party is never identified. Additionally, Cooper indicates she was only helping the alleged third party but disputes that she ever received money in connection with her assistance and disputes that she did anything other than "walk in" the petition documents to the Court. Cooper’s assertions, however, are not credible. There is no indication of the nature of Cooper’s relationship with the alleged third party and no detail as to why she would assist the Debtor’s husband or the alleged third party agent without any compensation. The Choi Declaration provided by the UST makes reference to a third party who the Debtor asserted was a patient of the Debtor’s husband. The Debtor’s declaration asserts that the patient referred her husband to Cooper for the purpose of negotiating a loan modification. (Mot. at Exh. 1, Choi Decl. ¶7). Cooper correctly points out that the information regarding the third party/patient is hearsay. However, the remainder of the Choi declaration unequivocally identifies Cooper, and only Cooper, as the point of contact for all communications regarding the filing of the bankruptcy for the Debtor. (Id. at ¶¶8-19).
As to the remaining allegations of the Motion, Cooper by her Opposition has specifically denied all of the allegations of the Motion, including that she executed the petition documents for the Debtor. In an effort to controvert the allegation that she did not disclose her identity, Cooper notes that she was asked for a copy of her driver’s license when filing the petition and provided it. Cooper’s willingness to provide her Driver’s license to the clerk when filing the petition, however, does not overcome her failure to provide specific identifying information on the petition itself as required pursuant to § 110, such as an address and social security number. Thus, assuming the Court finds that Cooper is a BPP within the meaning of the statute, the Court is inclined to GRANT the Motion pursuant to the reduced figure requested by the UST
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in its Reply.
TENTATIVE RULING
APPEARANCES REQUIRED.
Debtor(s):
Jina Soo Choi Represented By
Nicholas S Nassif
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani Everett L Green
Trustee(s):
Howard B Grobstein (TR) Pro Se
2:00 PM
Adv#: 6:17-01028 Frealy, Chapter 7 Trustee v. Tanaka et al
From: 4/5/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Sheri Tanaka Christopher Represented By Brian J Soo-Hoo
Defendant(s):
Leora Linda Tanaka Represented By David L Prince
Estate of Yaeko Sato, a California Represented By
David L Prince
Ryan Satoshi Tanaka Represented By David L Prince
Ronald Howard Tanaka Represented By David L Prince
2:00 PM
Carolyn Naomi Tanaka Represented By David L Prince
Plaintiff(s):
Todd A Frealy, Chapter 7 Trustee Represented By
Monserrat Morales
Trustee(s):
Todd A. Frealy (TR) Represented By Monserrat Morales
2:00 PM
Adv#: 6:15-01370 Speier v. Test-Rite Products Corp. et al
§ 3439.04(a)(1) and Recovery of Avoided Transfers Pursuant to 11 U.S.C. § 550; (2) Fraudulent Transfer Pursuant to 11 U.S.C. § 548(a)(1)(A) and Recovery of Avoided Transfers Pursuant to 11 U.S.C. § 550; (3) Fraudulent Transfer Pursuant to 11 U.S.C. § 544(b) and Cal. Civ. Code §§ 3439.04(a)(2), 3439.05 and Recovery of Avoided Transfers Pursuant to 11 U.S.C. § 550; (4) Fraudulent Transfer Pursuant to 11 U.S.C. § 548(a)(1)(B) and Recovery of Avoided Transfers Pursuant to 11 U.S.C. § 550; (5) Conversion; (6) Unlawful Payment of Dividends; (7) Breach of Fiduciary Duty by Officer; (8) Breach of Fiduciary Duty by Controlling Shareholder; and (9) Declaratory Relief as to Alter Ego Nature of Suit: (13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 3/2/16, 4/6/16, 4/27/16, 6/29/16, 7/20/16, 8/3/16, 9/28/16, 11/9/16, 3/29/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Master Design Inc Represented By Eric M Sasahara John Y Kim
Defendant(s):
Christina Ma Represented By
2:00 PM
Julie A Garcia Joon M Khang Aaron S Craig Brian Wheeler
Test-Rite International (US) Co. Ltd. Represented By
Joon M Khang Julie A Garcia John Y Kim Aaron S Craig Brian Wheeler
Test-Rite Products Corp. Represented By Joon M Khang Julie A Garcia John Y Kim Aaron S Craig
Chester Lee Represented By
Julie A Garcia Joon M Khang Aaron S Craig Brian Wheeler
Test-Rite Products Corp. Represented By Julie A Garcia John Y Kim Aaron S Craig Brian Wheeler
Test-Rite International (U.S) Co. Represented By
Julie A Garcia John Y Kim Aaron S Craig
Test-Rite International Co. Ltd. Represented By Julie A Garcia Aaron S Craig Joon M Khang
2:00 PM
John Y Kim Brian Wheeler
Plaintiff(s):
Steven M Speier Represented By Robert P Goe Marc C Forsythe
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe Marc C Forsythe Donald Reid
2:00 PM
Adv#: 6:17-01064 Jabro v. Kim et al
EH
Docket 0
- NONE LISTED -
Debtor(s):
Mee Soon Kim Represented By Minh Duy Nguyen
Defendant(s):
Tae Young Kim Pro Se
Mee Soon Kim Pro Se
Plaintiff(s):
Hikmat Jabro Represented By
Michael H Jabro
Trustee(s):
Larry D Simons (TR) Represented By David Seror Michael W Davis
2:00 PM
Adv#: 6:17-01064 Jabro v. Kim et al
From: 5/17/17, 6/7/17, 7/12/17 Also #21
EH
Docket 1
- NONE LISTED -
Debtor(s):
Mee Soon Kim Represented By Minh Duy Nguyen
Defendant(s):
Tae Young Kim Pro Se
Mee Soon Kim Pro Se
Plaintiff(s):
Hikmat Jabro Represented By
Michael H Jabro
Trustee(s):
Larry D Simons (TR) Represented By David Seror Michael W Davis
2:00 PM
Adv#: 6:14-01340 Leong v. Strait
EH
Docket 51
08/02/2017
BACKGROUND
On September 11, 2014 David Joe Strait ("Debtor") filed his petition for chapter 7 relief. On December 14, 2014, a suit was filed by Brenda Leong ("Plaintiff") against the Debtor. The Plaintiff’s original suit was amended on May 29, 2015, and that pleading now constitutes the operative complaint (the "Complaint"). The Complaint alleges that:
Debtor has engaged in a pattern of fraud, deceit, and breach of fiduciary duty.
Debtor is owner of Double O Academy, LLC, Cal Arms Inc., and Spygear4less, Inc.
Debtor has used the assets of these corporations for his personal use without regard to the existence of the corporate entity. These LLCs and corporation are "mere shells."
In reliance on Debtor’s representations, Plaintiff invested $125,000 into Cal Arms and Spygear after Debtor proposed verbal and written agreements offering a percentage of shares to Plaintiff. Debtor was Plaintiff’s business partner. Plaintiff also invested an additional $50,000 with Debtor.
Debtor breached his fiduciary duty to Plaintiff by failing to disclose true nature of corporations’ financial affairs and to pay Plaintiff each year 40% of net
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profits of Double O and 45% of net profits of Cal Arms and Spygear as promised.
Plaintiff has received no net profits or return on her investments or refund of her initial investment.
Debtor has fraudulently transferred assets of the Corporations in an effort to avoid the enforcement of any judgment.
Plaintiff holds an aggregate of 4,500 common share of stock in both Cal Arms and Spygear. Both have 10,000 outstanding shares each. Plaintiff owns 33.5% of both Cal Arms and Spygear.
Plaintiff seeks money damages in the amount of $175,000 plus interest, an accounting of all of Debtor’s corporations, attorney’s fees and costs, and a determination that the debt is nondischargable.
On June 18, 2015, the case was dismissed for Plaintiff’s failure to prosecute.
Plaintiff filed a motion to reopen the adversary proceeding on January 7, 2016. Plaintiff lodged an order to reopen the case on June 9, 2016. On January 6, 2017, the Court set aside the default and reinstated the adversary proceeding. On February 7, 2017, Plaintiff filed a Motion for Default Judgment. Said motion was denied without prejudice based on the following: (1) Plaintiff’s failure to file a memorandum of points and authorities and (2) Plaintiff’s failure to properly serve the Debtor with notice of the motion and hearing. On June 21, 2017, the Plaintiff filed the current Motion for Default Judgment ("Motion"). The Motion is unopposed.
DISCUSSION
Entry of Default
Federal Rule of Civil Procedure 55 states that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party’s default." Fed. R. Civ. P. 55(a). Per LBR 7055-1(b)(1), a motion for entry of default judgment shall contain the following:
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When and against what party default was entered
Whether defaulting party is an infant or incompetent person – (N/A)
Whether the defaulting party is currently on active duty – (N/A)
Whether notice has been served on defaulting party, if required by FRCP 55(b)(2)
Admissions
Pursuant to FRBP 7008(b)(6), failure to deny an allegation of the Complaint where a responsive pleading is required constitutes an admission of the allegation.
Default Judgment
Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute considering material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the FRCP favoring decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
Proper Service of Summons and Complaint
The Motion was served on the Debtor at the address specified on the Court’s Docket on June 21, 2017. (See Motion at ¶3). Further, Debtor was also served at his personal email on June 21, 2017. Therefore, service is proper
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Whether the Default was due to Excusable Neglect
No opposition to the motion has been filed. Therefore, there is no evidence before the Court to suggest that Default has been entered due to excusable neglect.
Sufficiency of the Complaint & Merits of Plaintiff’s claim Upon default, the factual allegations of the complaint, except those
relating to the amount of damages, will be taken as true. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); "The defendant, by his default, admits the plaintiff's well-pleaded allegations of facts, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established." Nishimatsu Construction Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (emphasis added); Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir.
1978); Cotton v. Massachusetts Mut. Life Ins. Co., 402 F.3d 1267, 1278(11th Cir. 2005) (do not have to take as true facts that are not well-pleaded or conclusions of law). The Complaint generally alleges claims against the Debtor pursuant to 11 U.S.C.
§ 523(a)(2)(A) and 11 U.S.C. § 523(a)(4). In the Motion, the Plaintiff only alleges a claim under 11 U.S.C. § 523(a)(2)(A). Under § 532(a)(2)(A), a debt for services obtained by the debtor under "false pretenses, a false representation, or actual fraud" is nondischargable. 11 U.S.C. § 523(a)(2)(A). The movant bears the burden of proving the applicability of § 523(a)(2)(A) by a preponderance of the evidence. In re Sabban, 600 f.3d 1219, 1222 (9th Cir. 2010) (citing Turtle Rock Meadows Homeowners Ass’n v. Slyman (In re Slyman), 234 F.3d 1081, 1085 (9th Cir. 2000)). The elements of a claim under 11 U.S.C. § 523(a)(2)(A) are:
the debtor made representations;
that at the time the debtor knew were false;
the debtor made those representations with the intention and purpose of deceiving the creditor;
2:00 PM
the creditor justifiably relied on these representations; and
the creditor sustained losses as a proximate result of the debtor’s representations.
Am. Express Travel Related Servs. Co. v. Hashemi (In re Hashemi), 104 F.3d 1122, 1125 (9th Cir. 1996) (quoting Britton v. Price (In re Britton), 950 F.2d 602, 604 (9th Cir. 1991)). A debtor's knowledge and intent to deceive may be inferred by circumstantial evidence and from the debtor's conduct. Edelson v. Comm'r of Internal Revenue, 829 F.2d 828, 832 (9th Cir.1987); Donaldson v. Hayes (In re Hayes), 315 B.R. 579, 587 (Bankr.C.D.Cal.2004). The alleged misrepresentation must have occurred at the inception of the debt as an inducement for the debt. See New Falls Corp. v. Boyajian (In re Boyajian), 367 B.R. 138, 147 (B.A.P. 9th Cir.2007). In the Ninth Circuit, there is no requirement that the debtor "have received a direct or indirect benefit from his or her fraudulent activity in order to make out a violation of § 523(a)(2)(A)." Muegler v. Bening, 413 F.3d 980, 983-84 (9th Cir. 2005).
According to Plaintiff’s Motion, Plaintiff’s Complaint alleges that "the Debtor misrepresented the nature and extent of his business operations for the sole purpose of obtaining her money." (See Memorandum of Points and Authorities 5:4-5). Plaintiff is most likely referring to the following allegation: "At all times Debtor has used the assets of these corporations for his personal use without regard to the existence of the corporate entity," (See Complaint at ¶4). The Plaintiff provides more evidence of the Debtor’s fraudulent representations in the form of her Declaration, alleging that the Debtor purported to be an experienced business man with expertise in creating and operating successful and profitable businesses. (See Declaration at ¶3). Plaintiff alleges that the Debtor promised her that he would operate the businesses in a profitable manner and, at a minimum, repay the Plaintiff for the total amount of her investment, $175,000.00. (Declaration at ¶16). The Debtor also provided the Plaintiff with a "profit and loss" statement, which showed an anticipated profit level which would provide the funds sufficient to pay the Plaintiff back for her investment (See Exhibit 5 from Declaration). Debtor relied on these statements and later found out that Debtor’s representations were false and intended to induce the Plaintiff to provide Debtor funds for his personal use. (Declaration at ¶19). Plaintiff has received no net profits, return on investment, or refund on initial investment.
2:00 PM
These allegations are sufficiently pled to establish the elements of fraud under
§ 523(a)(2)(A).
The possibility of a dispute considering material facts
No opposition to the motion has been filed. Therefore, there is no evidence before the Court to suggest that there is the possibility of a dispute considering material facts nor do the allegations of the Complaint contain discrepancies to indicate any inconsistency or dispute in the facts.
Sum of money at stake in the action
According to the Complaint, Motion, and Declaration, the Plaintiff invested
$50,000 in Double O Academy LLC for a 40% interest in the company and $125,000 in Cal Arms, Inc. and Spygear4less, Inc. for an aggregate of 4,500 shares of stock in both. This information is supported by a copy of Plaintiff’s check to Double O Academy LLC (See Exhibit 3 from Memo of Points and Authorities), a copy of the Double O Operating Agreement naming Plaintiff as the owner of a 40% interest, (See Exhibit 4 from Memo of Points and Authorities), and a copy of Plaintiff’s 4,500 shares in Cal Arms, Inc. (See Exhibit 6 from Memo of Points and Authorities).
Therefore, the Plaintiff requests a non-dischargeable default judgment in the amount of $175,000.00. This amount is not de minimus and weighs against the granting of default judgment.
The strong policy underlying the FRCP favoring decisions on the merits
The federal rules of civil procedure favor a decision on the merits. Here, the Motion though properly served on the Debtor, was unopposed. Additionally, prior to entering default judgment, the Court required that the Debtor submit a memorandum
2:00 PM
of points and authorities as well as evidence in support of the request for default judgment. The prove-up provided has sufficiently established that the Debtor is liable to the Plaintiff in the amount of $175,000 and that the Debtor procured funds from the Plaintiff by means of fraud. Based on the foregoing, the Court’s decision is on the merits and this factor weighs in favor of entering default judgment.
TENATIVE RULING
The Court’s tentative ruling is to GRANT the Motion and enter default and default judgment in favor of Plaintiff in the amount of $175,000.
The Plaintiff must lodge a proposed order granting the motion and a proposed judgment.
APPEARANCES REQUIRED.
Debtor(s):
David Joe Strait Represented By Brian J Soo-Hoo
Defendant(s):
David Joe Strait Pro Se
Movant(s):
Brenda Leong Represented By Marc E Grossman
Plaintiff(s):
Brenda Leong Represented By Marc E Grossman
2:00 PM
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:14-01340 Leong v. Strait
From: 2/8/17, 3/22/17, 6/21/17 Also #23
EH
Docket 1
- NONE LISTED -
Debtor(s):
David Joe Strait Represented By Brian J Soo-Hoo
Defendant(s):
David Joe Strait Pro Se
Plaintiff(s):
Brenda Leong Represented By Marc E Grossman
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
EH
Docket 36
- NONE LISTED -
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Represented By Don C Burns
Movant(s):
Don Cameron Burns Represented By Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns
2:00 PM
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
From: 8/31/16, 11/2/16, 1/11/17, 3/8/17, 6/7/17 Also #25
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Represented By Don C Burns
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske
2:00 PM
Arjun Sivakumar Carmela Pagay Franklin R Fraley Jr
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 6/7/17, 7/12/17 Also #28
EH
Docket 208
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Movant(s):
Charles Edward Schrader Pro Se
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17, 4/5/17, 6/7/17, 7/12/17
Also #27 EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:17-01051 ALJINDI v. US DEPARTMENT OF EDUCATION ET AL
EH
Docket 14
- NONE LISTED -
Debtor(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Defendant(s):
US DEPARTMENT OF Represented By Elan S Levey
Movant(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Plaintiff(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Trustee(s):
Lynda T. Bui (TR) Pro Se
3:00 PM
Adv#: 6:09-01235 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17, 6/26/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
DOES 1 through 100, inclusive Pro Se
Empire Partners, Inc., a California Represented By
David Loughnot
3:00 PM
Jonathan A Loeb Jeffrey Rosenfeld
Plaintiff(s):
RICHARD K. DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
3:00 PM
Adv#: 6:10-01319 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
01/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17
From: 6/26/17 EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Paul Roman Represented By
3:00 PM
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
O'Melveny & Myers, LLP Represented By Howard Steinberg P Sabin Willett
Peter T. Healy Represented By Howard Steinberg P Sabin Willett
Neil M Miller Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Larry Day Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Peter M Bransten John P Reitman Michael I Gottfried
Aleksandra Zimonjic
3:00 PM
Trustee(s):
Monica Rieder Cynthia M Cohen Roye Zur
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
3:00 PM
Adv#: 6:10-01329 DIAMOND v. Empire Partners, Inc., a California Corporation et
(Defendant - Empire Partners, Inc) HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17, 6/26/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Previti Realty Fund, L.P. Represented By Jonathan A Loeb Jeffrey Rosenfeld
3:00 PM
The James Previti Family Trust Represented By Jonathan A Loeb Jeffrey Rosenfeld
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
3:00 PM
Best Best & Krieger Franklin C Adams Thomas J Eastmond
12:30 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
Claudie Gene West Represented By Todd L Turoci
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 42
BACKGROUND
On November 9, 2016, Fonda Cormier ("Debtor") filed a Chapter 13 voluntary petition. On December 28, 2016, Debtor’s Chapter 13 plan was confirmed, and was modified twice subsequently.
On June 30, 2017, Debtor filed a notice of conversion to Chapter 7, and the case was converted approximately two hours and fifteen minutes later. Approximately one hour and thirty minutes later, Debtor filed a motion to vacate the conversion order. The motion was filed on negative notice. On July 20, 2017, the Court set the matter for hearing.
Debtor’s argument is, essentially, that Debtor changed its mind and no longer wants to be in Chapter 7. Specifically, Debtor states that after it filed the notice of conversion it had discussions with Trinity Financial, a lienholder on Debtor’s principal residence, and learned that Trinity Financial would likely file a motion for relief from stay if the case were converted to Chapter 7.
12:30 PM
DISCUSSION
As a preliminary matter, the proof of service included in Debtor’s motion is not signed, and Debtor has not served all parties in interest pursuant to Local Rule 1017.
Additionally, Debtor’s motion contains no legal standard or analysis. Relief from a judgment or order is governed by Fed. R. Civ. P. Rule 60, incorporated into bankruptcy proceedings by Fed. R. Bankr. P. Rule 9024. Debtor has not provided any argument relating to that standard.
Furthermore, the declaration of Debtor’s attorney appears to misrepresent the factual situation. First, the reasons for Debtor converting to Chapter 7 are not given. The primary argument presented by Debtor in support of this motion is that counsel learned, after filing a notice of conversion and having further discussions with Trinity Financial, that Trinity Financial would likely file a motion for relief from stay if the case was converted to Chapter 7. Trinity Financial had, however, in fact filed a motion for relief from stay on May 9, 2017, and an order approving the stipulation of the parties was entered on June 27, 2017. Section 10 of that order states: "This order is binding and effective despite any conversion of this bankruptcy case to a case under any other chapter of the Bankruptcy Code." The parties chose not to include language that would provide for relief from stay upon conversion of the case. Therefore, it is unclear how the conversion of the case could have any effect on the automatic stay as it relates to Trinity Financial.
As an aside, the Court notes that Debtor is ineligible for a Chapter 7 discharge under
§ 727(a)(8) by virtue of a Chapter 7 discharge on September 25, 2009.
TENTATIVE RULING
12:30 PM
Given the legal and factual deficiencies of the motion, in addition to the motion’s improper service, the Court will DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Fonda Cormier Represented By Phillip Myer
Movant(s):
Fonda Cormier Represented By Phillip Myer
Trustee(s):
Robert Whitmore (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Rafael Chavez Perez Represented By Manfred Schroer
Joint Debtor(s):
Catalina Chavez Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Joshua Aguilar Represented By Paul Y Lee
Joint Debtor(s):
Cynthia Rodriguez Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Gabriel Valencia Jr. Represented By Paul Y Lee
Joint Debtor(s):
Maricela Valencia Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Lubna Shiraz Ahmed Represented By Joshua L Sternberg
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Joan Eleanor Demiany Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #9 EH
Docket 21
Summary of the Motion:
TENTATIVE
The Court is inclined to GRANT the motion, avoiding the junior lien of Option One Mortgage Corporation upon receipt of a Chapter 13 discharge.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Gwendolyn Washington Represented By Julie J Villalobos
12:30 PM
Movant(s):
Gwendolyn Washington Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #8 EH
Docket 0
- NONE LISTED -
Debtor(s):
Gwendolyn Washington Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Trevor D. Washington Represented By Julie J Villalobos
Joint Debtor(s):
Sandra Washington Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Robert Douglas Lawson Represented By Gary S Saunders
Joint Debtor(s):
Cindy Louise Lawson Represented By Gary S Saunders
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Naima Namiah Narumi Chambers Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Guadalupe Rodriguez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Gabriel Sahagun Jr. Represented By Richard G Heston
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Elena Arriaga Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kathleen M Banuelos Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Meghan McConaghy Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Alex Perez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Cary Lee Surface Represented By Lionel E Giron
Joint Debtor(s):
Amber Dawn Surface Represented By Lionel E Giron
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Shane Morgan Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Oscar Avila Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Thanaa Victor Fransis Represented By
Rabin J Pournazarian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 106
- NONE LISTED -
Debtor(s):
Carlos Enrique Mendoza Represented By John F Brady Lisa H Robinson
Joint Debtor(s):
Michelle Lea Mendoza Represented By John F Brady Lisa H Robinson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 117
- NONE LISTED -
Debtor(s):
Mitchell Jeffrey Summers Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Terra Carolina Summers Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 67
- NONE LISTED -
Debtor(s):
Arnel De Castro Represented By Paul Y Lee
Joint Debtor(s):
Anna De Castro Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 49
- NONE LISTED -
Debtor(s):
Wilfred David Pascual Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 103
- NONE LISTED -
Debtor(s):
Liliana Gomez Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 68
- NONE LISTED -
Debtor(s):
Timm Bruce Bennett Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 145
- NONE LISTED -
Debtor(s):
Vonetta M Mays Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 90
- NONE LISTED -
Debtor(s):
Marquis George Powell Pro Se
Joint Debtor(s):
Judy Ann Powell Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
Robert R. Gentile Represented By Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 88
- NONE LISTED -
Debtor(s):
Jonathan William Nicastro Represented By
Rabin J Pournazarian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 72
- NONE LISTED -
Debtor(s):
Jose Luis Ceballos Represented By David Lozano
Joint Debtor(s):
Edelmira Castro Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 47
- NONE LISTED -
Debtor(s):
Martin Linares Represented By Michael Smith Craig K Streed
Joint Debtor(s):
Elvia Linares Represented By
Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 36
- NONE LISTED -
Debtor(s):
Nicholas Asamoa Represented By Stephen S Smyth William J Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 31
- NONE LISTED -
Debtor(s):
Raul Navarrette Represented By Paul Y Lee
Joint Debtor(s):
Leslie Navarrette Represented By Paul Y Lee
Movant(s):
CitiMortgage, Inc. Represented By
William F McDonald III Cheryl A Knapmeyer Carol M Turek
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 81
- NONE LISTED -
Debtor(s):
Katrina Renee McDowell Represented By
S Renee Sawyer Blume Christopher J Langley Matthew D Resnik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 22
- NONE LISTED -
Debtor(s):
Pamela Lynn King Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 23
- NONE LISTED -
Debtor(s):
Sonia Galicia Represented By
Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 22
- NONE LISTED -
Debtor(s):
Sandra M. Hankins Represented By Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 24
- NONE LISTED -
Debtor(s):
Raul Montez Represented By
Paul Y Lee
Joint Debtor(s):
Adelaida Montez Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 32
- NONE LISTED -
Debtor(s):
Grady Singleton III Represented By Paul Y Lee
Joint Debtor(s):
Michelle Singleton Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
4:00 PM
Docket 135
- NONE LISTED -
Debtor(s):
Matthew Joseph Pautz Represented By Stephen D Brittain
Joint Debtor(s):
Alice Louise Pautz Represented By Stephen D Brittain
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
11:00 AM
EH
Docket 55
Debtor(s):
Manuel Jose Saldana Represented By Robert G Uriarte
Trustee(s):
Lynda T. Bui (TR) Represented By Leonard M Shulman Elyza P Eshaghi
11:00 AM
EH
Docket 1
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
11:00 AM
(Holding Date)
FROM: 5/3/17, 5/17/17, 5/31/17, 6/28/17, 7/31/17
EH
Docket 46
06/28/2017
BACKGROUND
On August 30, 2016 ("Petition Date"), Dispatch Transportation LLC ("Debtor") filed its petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee").
On April 6, 2017, USA Waste of California, Inc. ("USA Waste") filed its Motion for an Order Authorizing the Examination of Craig Johnson and the Issuance of Subpoenas Duces Tecum to Commodity Trucking Acquisition, LLC ("CTA") and Craig Johnson Pursuant to Fed.R. Bankr.P. 2004 ("Motion"). USA Waste brings its Motion on the basis that it believes that the Debtor’s case was filed in bad faith.
Specifically, it appears that USA Waste believes the Debtor’s asserts were transferred prepetition to CTA so that the Debtor could then file bankruptcy and discharge debts without having to liquidate its assets. In support, USA Waste asserts that CTA is run by the same managers, at the same location, with the same assets, and with representation of the same counsel as the Debtor.
The initially scheduled hearing was continued by stipulation of the parties and was subsequently continued by the Court to June 28, 2017. On May 3, 2017, oppositions to the Motion were filed by CTA and by Craig Johnson. A reply to the oppositions was filed on May 24, 2017.
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USA Waste asserts by its Motion that under the broad scope of FRBP 2004, examination of Craig Johnson and subpoena of records in CTA’s and Craig Johnson’s possession is justified because these parties have access to information that USA Waste requires to evaluate the Debtor’s assets, liabilities, and prepetition activities in incurring the liabilities of the estate. (Motion at 3:25-28). Additionally, the initial Motion included a declaration from the Trustee indicating that he waived the Debtor’s attorney-client privilege as to communications between the Debtor and Craig Johnson for purposes of the requested examinations. (Daff Decl. ¶3).
In opposition to the Motion, CTA generally asserts that the Motion should be denied because: (1) the Motion is moot because the Trustee retracted the waiver of the Debtor’s attorney-client privilege with Mr. Johnson; (2) CTA obtained the Debtor’s assets through a "commercially reasonable" Article 9 sale; (3) the Motion is itself only an attempt by USA Waste to obtain privileged information via the bankruptcy process that it could not otherwise obtain and use in connection with currently stayed state court litigation; (4) USA Waste is hoping to obtain privileged information in preparation for the filing of suit against CTA. The Court’s Docket reflects that on May 3, 2017, the Trustee filed his Notice of Withdrawal of Waiver of Privilege. (Docket No. 59).
The Manning Pit dispute
In 2004, pursuant to a settlement agreement, the City of Irwindale was bound by a "Prioritization" provision which set forth the rules regarding which city quarries could be filled, when they could be filled, and by whom. In 2004, USA Waste obtained rights to fill a city quarry referred to by the parties as the "Arrow Pit". On or about 2007, the Debtor obtained a contract to fill a separate quarry – the "Manning Pit." A dispute subsequently arose about whether the Debtor’s contract and work violated the Prioritization provision.
The Article 9 Sale
CTA alleges that it acquired the Debtor’s assets via an Article 9 sale after the Debtor defaulted on debts owed to its first priority secured creditor, Comerica Bank. CTA asserts that Comerica effectuated a foreclosure sale on September 14, 2011 under Michigan law at which CTA was the buyer. CTA purchased the Debtor’s assets for $12 million, which included its equipment, trade names, business names, leases, contracts etc. CTA notes that the individuals who shared management or ownership
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interests in both the Debtor and CTA did so because they made capital contributions for such interests. In support of their assertion that CTA’s purchase of the Debtor’s assets was proper, CTA and Mr. Johnson point to the decision of the San Bernardino Superior Court in which a different party attempted to bring suit against CTA as an alleged alter ego of the Debtor, and in which the Superior Court found no alter ego liability. This Court, however, notes that the decision of the Superior Court may have no preclusive effect in this case.
The Basis for USA Waste’s claim against the Debtor
In 2013, USA Waste commenced a lawsuit against the Debtor for Intentional Interference with Contractual Relations and for Unfair Competition. Discover was conducted and a motion for summary judgment was filed by the Debtor which was denied by the trial court. The Superior Court scheduled trial for August 2016 but then trailed the trial to September 2016. The instant petition was filed on August 30, 2016
– staying USA Waste’s litigation against the Debtor.
DISCUSSION
Bankruptcy Rule 2004 is a broadly construed discovery device which permits any party in interest in a bankruptcy proceeding to move for a court order to examine any entity so long as the examination relates to "acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge." Fed.R.Bankr.P. 2004(b). The scope of inquiry permitted under a Rule 2004 examination is generally very broad and can "legitimately be in the nature of a ‘fishing expedition.’ " In re Wilcher, 56 B.R. 428, 433 (Bankr.N.D.Ill.1985). Such an examination, however, cannot be " ‘used for purposes of abuse or harassment’ and it ‘cannot stray into matters which are not relevant to the basic inquiry.’ " In re Table Talk, 51 B.R. 143, 145 (Bankr.D.Mass.1985) (quoting In re Mittco, Inc., 44 B.R. 35, 36 (Bankr.E.D.Wis.1984)). If the party to be examined makes a motion to quash a Rule 2004 subpoena, the examiner must show that there is good cause for taking the requested discovery. In re Wilcher, 56 B.R. at 434.
The Court now turns to its analysis of whether production and examination under Rule 2004 are warranted:
As to CTA, USA Waste specifically requests production of the following:
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Request 1
"… all data storage devices, including hard drives, containing information or documents concerning the Manning Pit, any former assets of the Debtor that were acquired by CTA, and/or the division of CTA referred to as "Dispatch Transportation" by CTA or CTA’s agents, employees or managers such as Kim Pugmire."
The Court disagrees with CTA’s objection that the requested documents do not relate to the administration of the bankruptcy estate. Specifically, the information regarding the Manning Pit is directly related to USA Waste’s claim in the Debtor’s bankruptcy. The remaining request appears to concern USA Waste’s contention that CTA and the Debtor colluded to shield assets from USA Waste and to prevent it from being able to establish its claim against the Debtor. On this point, based on the evidence in the record, it does not appear that the Superior Court’s prior adjudication of the Article 9 sale issues precludes USA Waste from potentially asserting alter ego claims against CTA, and its officers/managers or owners in connection with the Debtor’s bankruptcy case for the benefit of the estate’s creditors. However, the Court is inclined to limit the request to providing copies of the relevant documents rather than requiring provision of actual devices or hard drives.
As to Craig Johnson, USA Waste requests:
Request 1
All e-mails or other documents (excluding those documents which are part of the public record of proceedings) that you authored, transmitted, or received on behalf of Debtor concerning USA Waste of California, Inc. v. City of Irwindale, et al., Los Angeles Superior Court Case No. KC066276
Request 2
All documents for which Debtor invoked the attorney-client privilege in USA Waste of California, Inc. v. City of Irwindale, et al., Los Angeles Superior Court Case No. KC066276 as reflected in the Privilege Log attached hereto as Exhibit A.
Request 3
All documents concerning the Manning Pit.
Request 4
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All documents concerning the division of CTA referred to as "Dispatch Transportation" by CTA or CTA’s agents, employees or managers such as Kim Pugmire.
As to Craig Johnson, the Court is unpersuaded that the Pugmire testimony constitutes a waiver of the attorney-client privilege. Hernandez v. Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010). Disclosing a privileged communication or raising a claim that requires disclosure of a protected communication results in waiver as to all other communications on the same subject. United States v. Nobles, 422 U.S. 225, 239-40, 95 S.Ct. 2160, 45 L.Ed.2d 141 (1975); Weil v. Inv./Indicators, Research & Mgmt., 647 F.2d 18, 24 (9th Cir.1981) ("[V]oluntary disclosure of the content of a privileged attorney communication constitutes waiver of the privilege as to all other such communications on the same subject."); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir.1992) ("Where a party raises a claim which in fairness requires disclosure of the protected communication, the privilege may be implicitly waived."). The Court, having reviewed Exhibit E of the Pugmire testimony, finds that Mr.
Pugmire was asked and frequently responded to general questions regarding who was representing the Debtor as to specific transactions, to which he frequently made reference to Mr. Johnson. However, it is not clear from the general questioning that Mr. Pugmire ever uttered a statement that would specifically waive the attorney-client privileges attached to communications with Mr. Johnson. Moreover, the rule regarding waiver as to disclosed communications is limited to "communications on the same subject." Nobles at 439-40. However, here, USA Waste’s examination requests are broad and include no limitations as to subject, or otherwise. At a minimum, to prevail USA Waste would need to point to each specific statement in the deposition testimony that it contends effectuates a privilege waiver and separately identify which subject is not protected by the privilege. Having failed to go through this exercise, the Court finds the general references to Mr. Johnson’s representation and to Mr. Pugmire’s general statements regarding his interactions with Mr. Johnson unpersuasive as a basis to conclude that there has been a waiver of the attorney-client privilege.
Based on the foregoing, the Court finds that USA Waste’s Motion must be denied as to all requests made to Mr. Johnson to the extent that the attorney-client privilege is asserted, so specifically as to requests 1 and 2. However, the Court agrees that the third and fourth requests generally request information regarding the Manning
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Pit and CTA’s "Dispatch Transportation" division, which appears relevant. Mr. Johnson is free to provide a privilege log in response.
TENTATIVE RULING
The Motion is GRANTED IN PART and DENIED IN PART.
GRANTED (but limited) as to USA Waste’s request to CTA for documents related to the Manning Pit, and to documents related to CTA’s purchase of the Debtor’s assets.
DENIED as to USA Waste’s 1st and 2nd requests to Craig Johnson, and GRANTED as to requests 3 and 4.
APPEARANCES REQUIRED.
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
12:30 PM
Adv#: 6:17-01029 Cohen v. Bank of America, NA et al
From: 4/6/17, 5/11/17, 6/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard H Brown Jr. Represented By Gary J Holt
Defendant(s):
Ocwen Loan Servicing, LLC Pro Se
Bank of America, NA Pro Se
Plaintiff(s):
Amrane Cohen Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 72
Claim No.: 5-2
Claimant: JPMorgan Chase ("Claimant")
Claim Amount: $61,418.32
Objection:
The Debtors’ case was commenced on April 20, 2012. On July 24, 2012, the Claimant filed Claim 5-1 in the amount of $0.00. The Debtors’ chapter 13 plan was confirmed on August 8, 2012. On December 8, 2014, the Claimant filed a notice of withdrawal of proof of claim indicating that its withdrawal was "without prejudice to refiling at a later date". (Docket No. 51). On October 14, 2015, Claimant filed an "amended" Claim No. 5-2 asserting a claim in the amount of $61,418.32.
On May 24, 2017, the chapter 13 trustee, Amrane Cohen (the "Trustee"), filed objection to Claim No. 5 (the "Objection"). The Trustee objects on the grounds that:
the Objection was extinguished when withdrawn; and (2) the "amended" Claim No. 5-2 is untimely because it was filed after the claims bar date of August 29, 2012.
Claimant, for its part, despite having been properly served with the Objection has failed to file any opposition or response.
Discussion:
As a threshold matter, the Court deems the failure of the Claimant to file a response or opposition as consent to sustaining of the Objection. LBR 9013-1(f)
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Federal Rule of Bankruptcy Procedure 3001(f) and 11 U.S.C. § 502(a) provide that a claim or interest as to which proof is filed is "deemed allowed," the burden of initially going forward with the evidence as to the validity and the amount of the claim is that of the objector to that claim. In short, the allegations of the proof of claim are taken as true. If those allegations set forth all the necessary facts to establish a claim and are not self-contradictory, they prima facie establish the claim. In re Holm, 931 F.2d 620 (9th Cir. 1991).
Should objection be taken, the objector is then called upon to produce evidence and show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves. But the ultimate burden of persuasion is always on the claimant. Thus, it may be said that the proof of claim is some evidence as to its validity and amount. It is strong enough to carry over a mere formal objection without more. Id. at 623 (emphasis added).
Further, "creditors have an obligation to respond to formal or informal requests for information." Id. at 436. The request for information can "come in the form of a claims objection, if it is sufficiently specific about the information required." Id.
The Trustee asserts correctly that the Advisory Committee Notes to FRBP 3006, which governs withdrawal of claims, indicates that it has been generally held that FRCP 41 regarding dismissal of actions, governs the withdrawal of a proof of claim. Pursuant to FRCP 41, dismissal of a complaint before an answer is filed (or in the bankruptcy context, before the filing of an objection to claim or related complaint), is without prejudice. However, nothing in rule 41 or FRBP 3006 indicates that the claims bar deadline is tolled by a withdrawal nor has the Claimant filed any response or opposition indicating any legal basis permitting the filing of a late-filed claim. Here, the Court finds that when Claimant withdrew Claim No. 5-1, that claim was terminated. When the Claimant filed the "amended" claim, the claims bar deadline had lapsed. Absent authority indicating that the "amended" claim relates back to the original (but withdrawn claim), the Court is inclined to treat the amended Claim No. 5-2 as a new claim which does not relate back to the original Claim No. 5-1 and which was filed by the Claimant beyond the deadline for filing proofs of claim.
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Tentative Ruling
Based on the foregoing, the Court SUSTAINS the Trustee’s Objection. Claim No. 5-2 shall be disallowed in its entirety as untimely.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
John Walter Green Represented By Marc A Duxbury
Joint Debtor(s):
Janice Sotto Lopez Green Represented By Marc A Duxbury
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 116
- NONE LISTED -
Debtor(s):
Donald Vinson Frantz Represented By Jenny L Doling
Joint Debtor(s):
Donna Peck Frantz Represented By Jenny L Doling
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Also #4 EH
Docket 121
08/17/2017
Summary of the Motion:
TENTATIVE
The Debtors’ case was filed on May 30, 2012. On August 21, 2012, the Debtors’ plan was confirmed. The plan provided, in pertinent part, "Bank of America, N.A.: Debtor
(s) intend to avoid lien." (Plan at V.F. Miscellaneous provisions). A proof of claim indicating that the secured junior lien scheduled by Debtors as BOFA was actually held by Bank of New York Mellon. (Proof of Claim No. 8, filed 10/17/2012).
On May 30, 2017, the Trustee filed a Motion to Dismiss due to Material Default based on the Debtors’ failure to file the lien avoidance motion indicated in the plan.
In response, five years after they said they would, Debtors filed their Motion to Avoid the Lien of Bank of New York Mellon ("Motion"). The Motion seeks to avoid the lien of Bank of New York Mellon ("Bank"). The Motion is deficient in that it contains insufficient evidence of the fair market value of the Property which is supported only
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by the opinion (without foundation) of the Debtor.
The Debtors assert that they should be permitted to avoid the lien at issue because the confirmed plan contemplated such avoidance and because the Bank agreed to its treatment at the time (the Bank’s counsel has since indicated that the servicer has changed since the time of the Bank’s original consent and as such no stipulation is currently forthcoming). Separately, Debtor underscores that the Bank has not opposed the Motion and that such failure to file opposition should be deemed consent.
On August 4, 2017, the Trustee filed comments recommending disapproval of the Motion based on (1) unreasonable delay by the Debtors; (2) the plan would be rendered infeasible by an order avoiding the lien of the Bank (it appears that Trustee treated the Bank’s claim as secured due to the lack of an order avoiding the lien and has thus only paid the Bank’s arrears through the plan (or $1,924.18), however, if the lien is now avoided, the estate would need to pay 69.64% of the Bank’s claim or approx. $29,043.33, plus trustee’s fees; (3) the plan is already in month 62; (3) between 2012 and 2014, Debtors received Proof of Claim No. 8, and "several notices" from the Trustee indicating that the Trustee was only making the payments on the Bank’s arrears through the plan but delayed until the end of the plan to take action.
In Reply, the Debtors assert that (1) the Trustee has no standing to object to the Motion; (2) the Bank has already received more than it would have received as an unsecured creditor (presumably, had the Trustee not increased the dividend to the other creditors based on the failure by Debtors to timely avoid the Bank’s lien); and
the Trustee never sought to modify the chapter 13 plan to propose a higher dividend be paid to unsecured creditors.
Here, the Court has reviewed the holding in In re Chagolla, 544 B.R. 676 (9th Cir. BAP 2016) and finds that it persuasively provides support for the untimely filing of a motion to avoid lien. Moreover, where here, the Motion appears to have been filed prior to the entry of discharge or the closing of the case, avoidance appears to be legally permissible. Additionally, as pointed out by the Debtors, the Bank has filed no opposition or response. However, the Motion is insufficient on its face because there is insufficient evidence as to the fair market value of the Property.
Separately, although the Trustee’s comments do not provide a sufficient basis
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upon which to deny the Motion itself, the Trustee’s may suffice to support dismissal of the case, which the Court shall consider separately in connection with Matter No. 4.
APPEARANCES REQUIRED.
Debtor(s):
Donald Vinson Frantz Represented By Jenny L Doling
Joint Debtor(s):
Donna Peck Frantz Represented By Jenny L Doling
Movant(s):
Donna Peck Frantz Represented By Jenny L Doling Jenny L Doling
Donald Vinson Frantz Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 106
- NONE LISTED -
Debtor(s):
James J Alvarado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Pamela P Alvarado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Movant(s):
Pamela P Alvarado Represented By
Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Michael Smith
Michael Smith Michael Smith Michael Smith Sundee M Teeple
12:30 PM
Sundee M Teeple Sundee M Teeple Sundee M Teeple
James J Alvarado Represented By
Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Michael Smith
Michael Smith Michael Smith Michael Smith Michael Smith Sundee M Teeple Sundee M Teeple Sundee M Teeple Sundee M Teeple Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Docket 75
- NONE LISTED -
Debtor(s):
Yvonne Alaniz Represented By
Art Hoomiratana - SUSPENDED -
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 88
- NONE LISTED -
Debtor(s):
Larry J Neilsen Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Brenda J Neilsen Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 39
- NONE LISTED -
Debtor(s):
Ginger L Kearney Represented By Stephen B Mashney
Movant(s):
Amrane (RS) Cohen (TR) Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
From: 6/8/17 EH
Docket 140
- NONE LISTED -
Debtor(s):
Michael L Anderson Represented By Javier H Castillo
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 90
- NONE LISTED -
Debtor(s):
James Edward Bierly Represented By Hector C Perez
Joint Debtor(s):
Betty Ann Bierly Represented By Hector C Perez
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 63
- NONE LISTED -
Debtor(s):
Jess G. Caudillo Represented By
Dale Parham - INACTIVE - Sundee M Teeple
Joint Debtor(s):
Patricia D. Caudillo Represented By
Dale Parham - INACTIVE - Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 99
- NONE LISTED -
Debtor(s):
Jesus Sandoval Represented By Rebecca Tomilowitz
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 118
- NONE LISTED -
Debtor(s):
Thomas D Felch Represented By Michael F Chekian
Joint Debtor(s):
Michelle M Felch Represented By Michael F Chekian
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
12:31 PM
Docket 101
- NONE LISTED -
Debtor(s):
John Raymond Elbers Pro Se
Joint Debtor(s):
Nancy Ann Elbers Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 119
- NONE LISTED -
Debtor(s):
Michael Duane Cummings Represented By Devin Sawdayi
Joint Debtor(s):
Sauna Denise Cummings Represented By Devin Sawdayi
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 110
- NONE LISTED -
Debtor(s):
Blanca Estela Flores Represented By John F Brady Lisa H Robinson
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:32 PM
Adv#: 6:17-01054 Amarillo College of Hairdressing, Inc. v. Lopez
From: 5/11/17, 6/22/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Javier Lopez Represented By
Christopher Hewitt
Defendant(s):
Javier Lopez Pro Se
Joint Debtor(s):
Carmen Lopez Represented By Christopher Hewitt
Plaintiff(s):
Amarillo College of Hairdressing, Represented By
Eamon Jafari
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 50
- NONE LISTED -
Debtor(s):
James M. DiBari Represented By Michael Salanick
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #19 EH
Docket 51
- NONE LISTED -
Debtor(s):
James M. DiBari Represented By Michael Salanick
Movant(s):
James M. DiBari Represented By Michael Salanick Michael Salanick
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 142
- NONE LISTED -
Debtor(s):
Chi Kan Yu Represented By
Christopher J Langley
Movant(s):
Chi Kan Yu Represented By
Christopher J Langley Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Efren Diaz Estrada Represented By
W. Derek May
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 59
- NONE LISTED -
Debtor(s):
Jimmy Radu Vianu Represented By Andrew Nguyen
Joint Debtor(s):
Milagros Vianu Represented By Andrew Nguyen
Movant(s):
Milagros Vianu Represented By Andrew Nguyen
Jimmy Radu Vianu Represented By Andrew Nguyen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 47
- NONE LISTED -
Debtor(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Movant(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #27 EH
Docket 21
08/17/17
Background:
On February 8, 2017 ("Petition Date"), Ester Cruz (the "Debtor") filed for chapter 13 relief.
On July 17, 2017, the Debtor filed an Objection to Claim No. 9-1 (the "Objection") of Portfolio Recovery Associates, LLC ("Claimant"). The Objection was served on Claimant at the address it has provided on Claim No. 9 where notices should be sent. No opposition has been filed.
Claim #: 9
Amount: $1,984.37
Objection:
The Debtor objects to the claim on the grounds Claimant has failed to attach
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evidence of the assignment from the original creditor to the claimant.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
Rebuttal of the Prima Facie Proof of Claim
12:32 PM
Here, the Court has examined Proof of Claim No. 9-1 and has compared it to
the Debtor’s schedules wherein the Debtor listed a claim of Capital One (the predecessor in interest to Claimant per the Proof of Claim) for $1,948 (where Claim No. 9 is for $1,984.37), and which both the Debtor and Claimant confirmed was last active on February 18, 2016. Based on the corroborating evidence contained in the Debtor’s schedules, the Court finds that Proof of Claim No. 9 is prima facie valid and the Debtor has not come forward with evidence to overcome that validity.
TENTATIVE RULING
The Court is inclined to OVERRULE the Debtor’s objection in its entirety.
APPEARANCES REQUIRED.
Debtor(s):
Ester Cruz Represented By
Christopher J Langley
Movant(s):
Ester Cruz Represented By
Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #26 EH
Docket 22
08/17/17
Background:
On February 8, 2017 ("Petition Date"), Ester Cruz (the "Debtor") filed for chapter 13 relief.
On July 17, 2017, the Debtor filed an Objection to Claim No. 10-1 (the "Objection") of Portfolio Recovery Associates, LLC ("Claimant"). The Objection was served on Claimant at the address it has provided on Claim No. 10 where notices should be sent. No opposition has been filed.
Claim #: 10
Amount: $1,738.30
Objection:
The Debtor objects to the claim on the grounds Claimant has failed to attach
12:32 PM
evidence of the assignment from the original creditor to the claimant.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
Rebuttal of the Prima Facie Proof of Claim
12:32 PM
Here, the Court has examined Proof of Claim No. 10-1 and has compared it to the Debtor’s schedules wherein the Debtor listed a claim of Comenity Bank (the predecessor in interest to Claimant per the Proof of Claim). Given that the amounts indicated by the Debtor in his schedules and the account number do not match the information in Claim No. 10, it appears that these two debts represent distinct claims. As such, having failed to file opposition or response, the Court finds that Claimant has failed to provide sufficient information to establish their standing to file Claim No.
10-1.
TENTATIVE RULING
The Court is inclined to SUSTAIN the Debtor’s objection in its entirety.
APPEARANCES REQUIRED.
Debtor(s):
Ester Cruz Represented By
Christopher J Langley
Movant(s):
Ester Cruz Represented By
Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Joshua Aguilar Represented By Paul Y Lee
Joint Debtor(s):
Cynthia Rodriguez Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Lubna Shiraz Ahmed Represented By Joshua L Sternberg
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 35
08/17/2017
BACKGROUND
On May 22, 2017, Jane Mary Engel ("Debtor") filed for chapter 13 relief.
The petition reflects that the Debtor was assisted in the filing of the bankruptcy case by Peter Nisson of Nisson & Nisson ("Counsel").
On May 26, 2017, the case was dismissed for failure of the Debtor to file schedules.
On July 12, 2017, the Office of the United States Trustee ("UST") filed its Notice of Motion and Motion for Order Compelling Attorney to File Disclosure of compensation Pursuant to 11 U.S.C. § 329 ("Motion"). Service was proper and the Motion is unopposed.
DISCUSSION
Section 329(a) provides, in pertinent part that:
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Any attorney representing a debtor in a case under this title, or in connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation
11 U.S.C. § 329(a).
Subsequent to dismissal of the case, the Debtor filed her Opposition to Case Dismissal as Docket No. 32 (the "Opposition"). The Opposition was filed by the Debtor without the assistance of counsel. In her Opposition, the Debtor indicated that Counsel had abandoned her despite having received a promissory note in the amount of $5,000 from the Debtor’s sister in exchange for representing the Debtor. (Ex.4). The UST has established that Counsel failed to file a Statement of Attorney Compensation despite evidence indicating that he received undisclosed compensation from the Debtor’s sister. Counsel, for his part, has failed to file any opposition or response. The UST has correctly pointed out that although the case has been dismissed, the Court reserves jurisdiction over issues related to fees and compensation.
TENTATIVE RULING
For the foregoing reasons, the Motion is GRANTED in its entirety. Counsel is ordered to file a Statement of Attorney Compensation and the Court shall continue to retain jurisdiction over issues relating to § 329 arising from the instant Motion.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Jane R Mary Engel Represented By Peter L Nisson
Movant(s):
United States Trustee (RS) Represented By
12:32 PM
Trustee(s):
Abram Feuerstein esq
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Miriam Guadalupe Fricks Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 7/5/17
EH
Docket 8
08/17/2017
BACKGROUND
On June 16, 2017 ("Petition Date"), Christopher Grosey (the "Debtor") filed his petition for chapter 13 relief. On July 5, 2017, the Debtor’s case was dismissed for failure to file information. Subsequent to dismissal, on July 7, 2017, the Office of the United States Trustee ("UST") filed a Motion to impose a Re-Filing Bar (the "Motion"). No opposition has been filed.
The docket reflects and the UST has confirmed that the Debtor has filed two prior cases: (1) Case Number 17-14183 filed on May 18, 2017, and dismissed on June 5, 2017, for failure to file information; and (2) Case Number 17-13153 filed on April 17, 2017, and dismissed on May 5, 2017, for failure to file information.
As a threshold matter, the Court notes that the case has already been dismissed and the UST’s request is limited to imposition of a bar to re-filing pursuant to §§ 349 and 105(a) to prevent further abuse of the bankruptcy system.
DISCUSSION
Here, the UST argues that dismissal of the Debtor’s case is insufficient and requests a one year bar to refiling because the Debtor is abusing the bankruptcy process. Specifically, the UST underscores that the Debtor has now filed three consecutive cases between April and June of 2017, all of which have been dismissed for failure to file schedules. Additionally, the Debtor failed to disclose his prior cases in the current case. The UST argues that the Debtor’s conduct indicates an attempt to
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frustrate creditors which warrants a finding of bad faith and imposition of a refiling bar.
In light of the foregoing facts, and taking judicial notice of the dockets of the two prior cases, the Court agrees with the UST that the Debtor should not be permitted to abuse the bankruptcy system by consecutive filing of bankruptcy cases without any indication that he is seeking to reorganize his debts and otherwise to comply with the duties imposed on debtors by the bankruptcy code. The UST has established that a one-year bar under the Court’s § 105 and § 349 authority is appropriate.
However, it is unclear if the Court has jurisdiction where the Motion was filed after the case was dismissed. Query, how long after a case is dismissed does the Court have jurisdiction to entertain such a motion?
TENTATIVE RULING
Movant to address the foregoing points at the hearing.
APPEARANCES REQUIRED.
Debtor(s):
Christopher Charles Grosey Pro Se
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 17
08/17/2017
Summary of the Motion:
TENTATIVE
The Motion is deficient for the following reasons:
Service of the Motion was improper because the Debtors failed to serve the Motion to the attention of an officer for both Trojan and Dreambuilder Investments pursuant to FRBP 7004; and
The appraisal attached to the Motion as Exhibit "4" is not supported by a declaration of the appraiser, without which the appraisal is hearsay.
Based on the foregoing, the Court is inclined to CONTINUE the hearing for the Debtor to obtain a declaration of the appraiser and for the Debtor to file and properly serve notice of the continuance and the moving papers on Trojan and Dreambuilder.
The hearing shall be continued to September 21, 2017, at 12:30 p.m. The amended motion and notice of continuance must be filed on or before August 31, 2017.
APPEARANCES WAIVED.
12:32 PM
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Movant(s):
Kathy A Neilsen Represented By Julie J Villalobos
John E Neilsen Sr Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Meghan McConaghy Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jeannine Michon Norman Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Regino Perez Jaurequi Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Mandy Catron Represented By Stephen S Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Steven Rodriguez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Michelle D Harris Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Elida Soto Represented By
William G Cort
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Andrew Diaz Rodriguez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Rita Maria Maldonado Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
James Michael Young Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jesus Angel Acosta Represented By
James Geoffrey Beirne
Joint Debtor(s):
Maria Teresa Acosta Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Franklin R. Meza Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Miguel A Angulo Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Willa Henderson Childress Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
William Martin Farber Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Alfredo Loera Represented By Paul Y Lee
Joint Debtor(s):
Veronica O Loera Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Stasha Lauran Sill Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Silvia Alvarez Represented By
Filemon Kevin Samson III
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
William Henry ONeil Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maria G Penunuri Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Joseph Manuel Ruiz Represented By April E Roberts
Joint Debtor(s):
Shannon Elizabeth Ruiz Represented By April E Roberts
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 128
- NONE LISTED -
Debtor(s):
Kenneth Vernell Hawkins Represented By
Craig J Beauchamp
Joint Debtor(s):
Brenda A Hawkins Represented By
Craig J Beauchamp
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:33 PM
EH
Docket 63
- NONE LISTED -
Debtor(s):
Jeanette Johnson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:33 PM
Docket 63
- NONE LISTED -
Debtor(s):
David R. Roberts Represented By Javier H Castillo
Joint Debtor(s):
Crystal A Roberts Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 179
- NONE LISTED -
Debtor(s):
Mildred Goodridge Crawford Represented By Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 137
- NONE LISTED -
Debtor(s):
Jimmie Lee Bracy Jr. Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 128
- NONE LISTED -
Debtor(s):
Leslie R Williams Represented By Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 106
- NONE LISTED -
Debtor(s):
James Lange Represented By
Michael Smith Sundee M Teeple Craig K Streed
Joint Debtor(s):
Michelle Lange Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 170
- NONE LISTED -
Debtor(s):
Deborah L. Hill Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 57
- NONE LISTED -
Debtor(s):
Kevin S. Klose Represented By Patricia M Ashcraft
Joint Debtor(s):
Diana K. Klose Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 74
- NONE LISTED -
Debtor(s):
Anthony E Turkson Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 145
- NONE LISTED -
Debtor(s):
Vonetta M Mays Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 75
- NONE LISTED -
Debtor(s):
William R Parker Represented By Julie J Villalobos
Joint Debtor(s):
Cheryl Parker Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 49
- NONE LISTED -
Debtor(s):
David Anthony Lopez Jr. Represented By Heather J Canning Barry E Borowitz
Joint Debtor(s):
Linda Cristine Lopez Represented By Heather J Canning Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 45
- NONE LISTED -
Debtor(s):
Eric Kissell Represented By
William J Howell
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 47
- NONE LISTED -
Debtor(s):
Maria Lourdes Magallon Represented By Leonard Pena
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 46
- NONE LISTED -
Debtor(s):
Valicia LaShawn Fennell Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 72
- NONE LISTED -
Debtor(s):
Jose Luis Ceballos Represented By David Lozano
Joint Debtor(s):
Edelmira Castro Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 32
- NONE LISTED -
Debtor(s):
Arturo Villagrana Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 45
- NONE LISTED -
Debtor(s):
Sherry Ann Beardsley Represented By Jeffrey D Larkin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 47
- NONE LISTED -
Debtor(s):
Martin Linares Represented By Michael Smith Craig K Streed Sundee M Teeple
Joint Debtor(s):
Elvia Linares Represented By
Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 60
- NONE LISTED -
Debtor(s):
Donald L Maddox Represented By Michael Smith Sundee M Teeple
Joint Debtor(s):
Lisa A Maddox Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 29
- NONE LISTED -
Debtor(s):
Kendra Susan Lewkow Represented By Morton J Grabel
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 37
- NONE LISTED -
Debtor(s):
Anthony James Parker Represented By Michael E Clark Barry E Borowitz
Joint Debtor(s):
Cynthia Parker Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 49
- NONE LISTED -
Debtor(s):
Oscar Chavez Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
From: 8/3/17 EH
Docket 81
- NONE LISTED -
Debtor(s):
Katrina Renee McDowell Represented By
S Renee Sawyer Blume Christopher J Langley Matthew D Resnik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 38
- NONE LISTED -
Debtor(s):
John Wesley Wilson Jr. Represented By Julie J Villalobos
Joint Debtor(s):
Michelle Janet Wilson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 36
- NONE LISTED -
Debtor(s):
Victor Quito Rabara Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 22
- NONE LISTED -
Debtor(s):
Pamela Lynn King Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 29
- NONE LISTED -
Debtor(s):
Julio C. Davila Represented By Michael Jay Berger
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 30
- NONE LISTED -
Debtor(s):
Don Stevie Gurule Represented By Dana Travis
Joint Debtor(s):
Elaine Louise Gurule Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 27
- NONE LISTED -
Debtor(s):
Gabriel Simon Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 37
- NONE LISTED -
Debtor(s):
Grady Singleton III Represented By Paul Y Lee
Joint Debtor(s):
Michelle Singleton Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Also #86 EH
Docket 32
- NONE LISTED -
Debtor(s):
Grady Singleton III Represented By Paul Y Lee
Joint Debtor(s):
Michelle Singleton Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 30
- NONE LISTED -
Debtor(s):
Maria I Alcaraz Represented By Manfred Schroer
Joint Debtor(s):
Eduardo D Alcaraz Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 29
- NONE LISTED -
Debtor(s):
Ethel N Odimegwu Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: USA BANK NATIONAL ASSOCIATION
From: 4/4/17, 5/16/17, 6/20/17, 7/25/17 EH
Docket 68
- NONE LISTED -
Debtor(s):
Dina Guadalupe Garay Represented By Aalok Sikand
Vito Torchia - DISBARRED -
Movant(s):
U.S. BANK NATIONAL Represented By Megan E Lees Alexander K Lee
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA
From: 6/20/17, 7/25/17 EH
Docket 92
June 20, 2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and ¶3. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Mark A Rowley Represented By Tate C Casey
Joint Debtor(s):
Catherine C Rowley Represented By Tate C Casey
10:00 AM
Movant(s):
HSBC Bank USA, National Represented By Alexander K Lee
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
10:00 AM
MOVANT: DITECH FINANCIAL LLC
From: 7/25/17 EH
Docket 80
July 25, 2017
Service: Proper Opposition: Yes
Subject to adequate protection discussions, the Court is inclined to GRANT relief from the stay under § 362(d)(1) based on failure to make post-petition payments. GRANT waiver of 4001(a)(3) stay and request under ¶ 3. Request for APO is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Raphael A Lavine Represented By Frank X Ruggier Steven A Alpert
Joint Debtor(s):
Marcia Eurita Lavine Represented By Frank X Ruggier
10:00 AM
Movant(s):
Steven A Alpert
Ditech Financial LLC Represented By Jeff Rawlings Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 113
Hearing Date: 8/22/17 Service: Proper Opposition: Yes
Subject to discussion re adequate protection terms, the Court is inclined to GRANT relief from the stay under § 362(d)(1).
GRANT waiver of 4001(a)(3) stay.
GRANT Movant leave to offer/provide/enter into a potential forbearance, loan modification, refinance agreement or other loan workout.
GRANT relief requested that upon entry of this Order, for purposes of Cal. Civ. Code
§ 2923.5, the debtor is a borrower as defined in Cal. Civ. Code § 2920.5(C)(2)(C). Request for APO is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Cecilia R Rodas Represented By Michael Smith Sundee M Teeple
10:00 AM
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 5/9/17, 6/20/17, 7/25/17 EH
Docket 47
Service is Proper Opposition: Yes
Parties to advise Court regarding adequate protection discussions.
APPEARANCES REQUIRED.
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
10:00 AM
Movant(s):
WELLS FARGO BANK, N. A. Represented By
Dane W Exnowski Melissa A Anderson Oneika White-Dovlo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: PHH MORTGAGE CORPORATION AND ITS SUCCESSORS
EH
Docket 44
Hearing Date: 8/22/17 Service: Proper Opposition: Yes
Tenative ruling is to GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT authority to offer loan workout options.
Parties to confirm cure of arrears. APPEARANCES REQUIRED.
Debtor(s):
Michael O'Cull Represented By Julie J Villalobos
Movant(s):
PHH Mortgage Corporation, its Represented By Christina J O
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WALTER J OKON
EH
Docket 56
08/22/2017
Service: Proper Opposition: Yes
Debtor asserts that Movant is not the actual holder or current assignee of the Note, is not the real party in interest, and has no legal standing to bring this Motion. Debtor further disputes the amount owing to Movant of $98,319.99 as no evidence was provided by Movant, and Debtor has not received a mortgage statement in years.
There is no declaration by the Debtor or Debtor's attorney provided nor any evidence provided in support thereof.
A party seeking relief from the stay "need only establish that it has a colorable claim to enforce a right against property of the estate." In re Pak, 2011 WL 7145763 (9th Cir.BAP (Cal.) 2011). A showing by a party that it is a person entitled to enforce the note at issue or that it holds some ownership or other interest in the note translates to a colorable claim. Id. In this case, the Deed of Trust and Assignment of Deed of Trust were both recorded on September 23, 2014 and both show the original lender as "Val- Chris Investments Inc., a California Corporation." The Trust Deed assignment shows all beneficial interest under the Deed of Trust was transferred to Movant. The Note Secured By A Deed of Trust dated 9/9/14 also shows the same original lender, and the Promissory Note Endorsement indicates all beneficial interest under the Note was transferred to Movant. Based on this evidence attached to the Motion, Movant has established that it has a colorable claim sufficient to provide it standing to seek relief from stay.
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A motion for stay relief is a summary proceeding. In re Santa Clara County Fair Ass'n, Inc., 180 B.R. 564 (9th Cir.BAP (Cal.) 1995) (citing In re Computer Communications, Inc., 824 F.2d 725, 729 (9th Cir.1987)). In a summary proceeding, the court's discretion is broad. Courts may consider the factor of judicial economy when deciding lift stay issues. Id.
The only triable issues in a Motion for Relief from Stay are (1) lack of adequate protection; (2) the debtor's equity in the property; and (3) the necessity of the property to an effective reorganization of the debtor, or (4) the existence of other cause for relief from the stay. In re Computer Communications, Inc., 824 F.2d 725, 729.
Here, the issues and defenses surrounding the validity of the underlying security do not directly relate to the lifting of the stay, and accordingly they are not issues that are before the bankruptcy court. The irregularities raised by the Debtor are more properly considered by a state court in the determination of an unlawful detainer action.
The Movant, for its part, has demonstrated that "cause" exists to lift the stay based on the Debtor's continuing nonpayment of the regular mortgage payments. The Court's tentative ruling is to GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and GRANT authority for Movant to offer loan workout options.
APPEARANCES REQUIRED.
Debtor(s):
Jacqueline Armitage Represented By Ashishkumar Patel
Movant(s):
WALTER J OKON, Trustee of the Represented By
Julian K Bach
Trustee(s):
Lynda T. Bui (TR) Represented By Rosendo Gonzalez
10:00 AM
MOVANT: BANK OF AMERICA, N.A.
EH
Docket 33
Hearing Date: 8/22/17 Service: Proper Opposition: Yes
The Debtor has provided evidence that more payments have been made than are accounted for by the Movant. However, even with the additional payments, the Debtor does not dispute that he remains delinquent by at least two payments.
APPEARANCES REQUIRED.
Debtor(s):
Efrain Figueroa Represented By
Raj T Wadhwani
Movant(s):
Bank of America, N.A. Represented By
William F McDonald III Asya Landa
Bonni S Mantovani Cassandra J Richey
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
From: 4/25/17, 6/20/17, 7/25/17 EH
Docket 46
Tentative Ruling:
Service is Proper Opposition: Yes
While relief from stay appears warranted, parties to discuss adequate protection if amounts in default are not fully cured by hearing.
APPEARANCES REQUIRED.
Debtor(s):
Antoine Williams Represented By Gary Leibowitz
Jacqueline D Serrao
Movant(s):
U.S. Bank National Association, as Represented By
Dane W Exnowski
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BANK OF AMERICA, N.A.
CASE DISMISSED 8/17/17
EH
Docket 53
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay.
GRANT termination of the co-debtor stay.
GRANT Movant leave to offer/provide/enter into a potential forbearance, loan modification, refinance agreement or other loan workout.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Oscar Chavez Represented By Julie J Villalobos
Movant(s):
BANK OF AMERICA, N.A. Represented By
10:00 AM
Trustee(s):
Christina J O
Melissa A Vermillion
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ROSA BRYANT
From: 5/30/17, 8/1/17 EH
Docket 32
- NONE LISTED -
Debtor(s):
YBF Tax, Inc. Represented By Ronald W Ask
Movant(s):
Rosa Bryant Represented By
Michael F Chekian
Trustee(s):
Karl T Anderson (TR) Represented By Lovee D Sarenas
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 41
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Melanie Lourdes Davis Represented By Gary S Saunders
Movant(s):
Toyota Motor Credit Corporation Represented By
Erin M McCartney Tyneia Merritt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: PENNYMAC LOAN SERVICES, LLC
CASE DISMISSED 8/17/17
EH
Docket 30
Hearing Date: 8/22/17 Service: Proper Opposition: Yes
Parties to advise Court regarding status of stipulation for adequate protection. APPEARANCES REQUIRED.
Debtor(s):
Julio C. Davila Represented By Michael Jay Berger
Movant(s):
PennyMac Loan Services, LLC Represented By Theron S Covey
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 28
- NONE LISTED -
Debtor(s):
Suzanne Shumway Carter Represented By Todd L Turoci
Movant(s):
Nationstar Mortgage LLC Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BAYVIEW LOAN SERVICING LLC
EH
Docket 34
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay.
GRANT Movant leave to offer/provide/enter into a potential forbearance, loan modification, refinance agreement or other loan workout.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Matthew Bruce Represented By Christopher Hewitt
Joint Debtor(s):
Scott Bruce Represented By
Christopher Hewitt
10:00 AM
Movant(s):
BAYVIEW LOAN SERVICING, Represented By
Edward G Schloss
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WESTLAKE SERVICES dba WESTLAKE FINANCIAL SERVICES
EH
Docket 29
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1).
GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Mario Mondragon Represented By Michael Smith Sundee M Teeple
Movant(s):
Westlake Services dba Westlake Represented By
Robert P Zahradka
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: MARTHA E GUERRERO AND EDUARDO E GUERRERO FROM: 4/25/17, 5/30/17, 7/11/17, 7/25/17
EH
Docket 11
Debtor’s opposition argues that the real estate contract is an executory contract that can be rejected in bankruptcy. While providing an applicable citation for that assertion, Debtor does not apply the legal standard to the facts of this case.
Nevertheless, it appears that Debtor’s characterization of the contract as "executory" may have merit. While Movant, in the motion, states that "all contingencies had been removed," and, in the reply, states that they "dutifully removed all their contractual contingencies," the state court complaint submitted to support their motion states, in paragraph 23: "Plaintiffs have fully performed all conditions, covenants, and promises required by them on their part to be performed in accordance with the terms and conditions of the contract, except the final payment for the purchase of the Property." (emphasis added). While Movants appear to have made the initial deposit into escrow, it does not appear that the final purchase price was tendered.
"[A]n ‘executory contract’ that can be rejected in bankruptcy is a contract on which performance remains due on both sides at the time of the bankruptcy petition." Matter of Newcomb, 744 F.2d 621, 624 (8th Cir. 1984); see also In re Texscan Corp., 976 F.2d 1269-1271-72 (9th Cir. 1992). In Newcomb, the Court held that when the funds had already been transferred into escrow, there was no executory contract – no material obligations remained on the part of the grantor. See id.
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In the Ninth Circuit, a real estate sales contract remains executory until the full purchase price is deposited into escrow by the purchaser. See In re Hertz, 536 B.R. 434, 439-41 (Bankr. C.D. Cal. 2015) (an extended discussion on when a purchase contract loses its executory nature).
Given that the real estate purchase contract may be an executory contract that shortly will be rejected by operation of law under 11 U.S.C. § 365(d)(1), and that Movants are seeking a state court order for specific performance under the contract, granting relief from stay would be improper because the state court proceedings would interfere with the bankruptcy court proceedings. Interference with the administration of the estate is the most important consideration when considering a motion for relief from stay to proceed with state court litigation. See In re Roger, 539 B.R. 837, 845 C.D. Cal. 2015) ("According to the court in Curtis, the most importance factor in determining whether to grant relief from the automatic stay to permit litigation against the debtor in another forum is the effect of such litigation on the administration of the estate. Even slight interference with the administration may be enough to preclude relief in the absence of a commensurate benefit."). Here, there is a possibility of significant interference with the bankruptcy estate.
Tentative Ruling:
For the foregoing reasons, the Court is inclined to DENY the motion. APPEARANCES REQUIRED.
Debtor(s):
AMANDO MORALES Represented By William D Gurney
Joint Debtor(s):
ALICIA MALDONADO JIMENEZ Represented By
William D Gurney
Movant(s):
Eduardo E. Guerrero Represented By
10:00 AM
Trustee(s):
Christopher J Langley
Charles W Daff (TR) Represented By Brandon J Iskander Lynda T Bui
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 22
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) and (d)(4). Court finds that the bankruptcy case was part of a scheme to hinder, delay and defraud creditors based on multiple bankruptcy filings and unauthorized transfers affecting this property.
Based on a finding of bad faith, GRANT request for extraordinary relief as to ¶10. DENY request for extraordinary relief as to ¶¶ 8 and 11 for lack of cause shown.
GRANT waiver of 4001(a)(3) stay. GRANT termination of the co-debtor stay.
GRANT Movant leave to offer/provide/enter into a potential forbearance, loan modification, refinance agreement or other loan workout.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Isabel M Gutierrez Pro Se
10:00 AM
Movant(s):
Nationstar Mortgage LLC as Represented By Nancy L Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION AS TRUSTEE FOR JP MORGAN MORTGAGE ACQUISITION CORP
EH
Docket 20
08/22/17
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2).
GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days
Debtor(s):
Jorge Enrique Garcia Orta Represented By Brian J Soo-Hoo
Joint Debtor(s):
Maria Elena Herrera Reyes Represented By Brian J Soo-Hoo
Movant(s):
U.S. BANK NATIONAL Represented By Sean C Ferry
10:00 AM
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 21
- NONE LISTED -
Debtor(s):
John P Morris Represented By
Michael Smith Sundee M Teeple
Joint Debtor(s):
Cassandra M Morris Represented By Michael Smith Sundee M Teeple
Movant(s):
TOYOTA MOTOR CREDIT Represented By Mark D Estle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
CASE DISMISSED 5/26/17
From: 6/27/17, 7/11/17, 8/1/17 EH
Docket 12
08/22/17
The hearing on the Motion was continued for the Movant to file and serve the Motion and Notice of Continued hearing to the Debtor at the correct address. Service now appears proper and no opposition has been filed. Based on the foregoing, the Court is inclined to GRANT the Motion as set forth in the tentative ruling for 7/11/2017.
APPEARANCES WAIVED. Movant to lodge an order within 7 days. 07/11/2017
Service: Improper Opposition: None
Once improper service is remedied, the tentative ruling is to GRANT relief from the stay under §§ 362(d)(1) and 362(d)(4) based on the following: Debtor has not paid mortgage for over two years, Movant is one of two creditors listed in case commencement documents, Debtor filed only a few case commencement documents and schedules, and the statement of financial affairs have not been filed. Additionally, the Debtor’s failure to file required documents resulted in dismissal of the case on May 26, 2017. Debtor has also filed two previous bankruptcies with respect to the
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property in 2016 which were dismissed. Based on the foregoing, the Court is inclined to GRANT relief pursuant to ¶2, ¶5, ¶7b, and ¶9b. Court is also inclined to GRANT relief that Movant may provide and enter into potential forbearance agreement; confirming that no stay is in effect pursuant to § 362(c)(4). GRANT waiver of 4001(a)
(3) stay.
As reflected above, while the court is inclined to grant relief from stay, service was improper due to Movant’s failure to serve Debtor. Specifically, the Debtor’s address of record is 3865 Vermont St., San Bernardino, CA 92407, however, Movant served the Debtor at 865 Vermont St., San Bernardino, CA 92407. Based on the foregoing, the hearing will be continued to August 1, 2017, at 10:00 a.m.
APPEARANCES WAIVED. Movant to file and serve an amended Notice of Motion and Motion on the Debtor at the correct address no later than July 12, 2017.
Debtor(s):
Hermelinda Diaz Pro Se
Movant(s):
WELLS FARGO BANK, N.A. Represented By Jason C Kolbe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICREDIT FINANCIAL SERVICES, INC
EH
Docket 10
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2).
GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Ruben Michael Muniz Represented By Alexander Pham
Movant(s):
Americredit Financial Services, Inc. Represented By
Sheryl K Ith
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 13
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2).
GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Luis Javier Donan Sotelo Represented By Alec L Harshey
Joint Debtor(s):
Alejandra B. Donan Leyva Represented By Alec L Harshey
Movant(s):
TOYOTA MOTOR CREDIT Represented By Mark D Estle
10:00 AM
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA AS TRUSTEE ON BEHALF OF THE HOLDERS OF HARBORVIEW MORTGAGE
EH
Docket 17
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001(a)(3) stay.
DENY relief requested under ¶3 for lack of cause shown.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
BRIAN JOSEPH MCCARTHY Pro Se
Movant(s):
Wells Fargo Bank, N.A., as trustee, Represented By
Daniel K Fujimoto Alexander K Lee
10:00 AM
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: DAIMLER TRUST
EH
Docket 8
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1).
GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Lori Teal Represented By
Andrew Nguyen
Movant(s):
Daimler Trust Represented By
Sheryl K Ith
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
CASE DISMISSED 7/11/17
EH
Docket 9
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(4). Court finds bad faith and scheme to delay and hinder based on two bankruptcy filings and two unauthorized transfers of 5% property interests.
GRANT waiver of 4001(a)(3) stay. GRANT termination of the co-debtor stay.
GRANT request under ¶9(b) that the Order is binding and effective in any bankruptcy case commenced by or against any debtor who claims any interest in the Property for a period of a 180 days from the hearing of this Motion, upon recording of a copy of this order .
DENY request under ¶7 [A designated law enforcement officer may evict the Debtor and any other occupant from the Property regardless of any future bankruptcy filing concerning the Property for a period of 180 days from the hearing on this Motion] for lack of cause shown;
DENY request under ¶10 [Order is binding and effective in any future bankruptcy
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case, no matter who the debtor may be, upon recording of a copy of this order] for lack of cause shown.
GRANT relief requested under ¶11 that upon entry of this Order, for purposes of Cal. Civ. Code § 2923.5, the debtor is a borrower as defined in Cal. Civ. Code § 2920.5(C) (2)(C).
APPEARANCES REQUIRED.
Debtor(s):
Min Joo Choi Pro Se
Movant(s):
WELLS FARGO BANK, N.A. Represented By Jason C Kolbe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
CASE DISMISSED 7/18/17
EH
Docket 11
Hearing Date: 8/22/17 Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(4). Court finds bad faith and scheme to delay and hinder based on three bankruptcy filings and two unauthorized transfers of ownership of, or other interest in the Property.
GRANT waiver of 4001(a)(3) stay. GRANT termination of the co-debtor stay.
GRANT request under ¶10(b) that the Order is binding and effective in any bankruptcy case commenced by or against any debtor who claims any interest in the Property for a period of a 180 days from the hearing of this Motion, upon recording of a copy of this order .
DENY request under ¶8 and ¶11 for lack of cause shown; APPEARANCES REQUIRED.
Debtor(s):
Oscar Avila Pro Se
10:00 AM
Movant(s):
Wells Fargo Bank, N.A. Represented By Nancy L Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: COUNTY OF RIVERSIDE
EH
Docket 13
08/22/2017
Service: Proper Opposition: Yes
The Debtor responds to the Motion with arguments that indicate misapprehensions of the bankruptcy system. In particular, while the Debtor has correctly pointed to the policy reasons underlying the bankruptcy stay, section 362(d) provides creditors with a legal basis to seek the lifting of the automatic stay. Here, as a threshold matter, the Debtor had a prior case dismissed on July 28, 2016, and thus had a case pending within the previous year. Pursuant to § 362(c)(3), the Debtor had a thirty day period following the filing of the instant case within which to seek continuation of the automatic stay. Having failed to seek a continuance of the automatic stay, the stay terminated as a matter of law on or about July 30, 2017. On this basis, the Movant's request for termination of the stay may be denied as moot because the stay has already terminated.
The Court now turns to the request for prospective relief based on bad faith. As to the Movant's requests for prospective relief, the Court notes that the Debtor filed no declaration in support of his assertions that the prior filings were based on recommendations of prior counsel. There is additionally no detail contained in his arguments and no detail or explanation provided as to why his prior cases were dismissed. Here, given the lack of evidence, the Court finds that the record sufficiently demonstrates a history of the Debtor's abusing the bankruptcy process to
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delay or hinder creditors.
On that basis, the Court is inclined to GRANT relief from the stay under (d)(4). Court finds bad faith and scheme to delay and hinder based on four previous bankruptcies with respect to the property, all of which were dismissed.
GRANT waiver of 4001(a)(3) stay.
GRANT request under ¶10(b) that the Order is binding and effective in any bankruptcy case commenced by or against any debtor who claims any interest in the Property for a period of a 180 days from the hearing of this Motion, upon recording of a copy of this order .
APPEARANCES REQUIRED.
Debtor(s):
Douglas Alan Knowles Pro Se
Movant(s):
County of Riverside Treasurer-Tax Represented By
Ronak N Patel
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: LIVEBYTHEPARK PALM SPRINGS
EH
Docket 9
- NONE LISTED -
Debtor(s):
Catherine Lucille Laff Pro Se
Movant(s):
LivebythePark Palm Springs Represented By Barry L O'Connor
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SAMUEL AND SUZANNE SAAVEDRA
EH
Docket 16
08/22/2017
Service was proper
The Debtors have established that the instant case has been filed in good faith. The Debtors have provided sufficient evidence that they nearly completed their prior chapter 13 case but for issues that arose at the end of the 60-month period. Based on the Debtors’ history of timely paying into a chapter 13 plan, the Court finds cause to continue the automatic stay.
The Motion is GRANTED and the stay is CONTINUED as to Wells Fargo Home Mortgage.
APPEARANCES WAIVED. Movant to file an order within 7 days.
Debtor(s):
Samuel T Saavedra Represented By Michael R Totaro
Joint Debtor(s):
Suzanne M Saavedra Represented By Michael R Totaro
10:00 AM
Movant(s):
Suzanne M Saavedra Represented By Michael R Totaro
Samuel T Saavedra Represented By Michael R Totaro
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
EH
Docket 266
BACKGROUND
On May 11, 2016, Debtor filed a Chapter 11 voluntary petition. Debtor operated a medical account receivable collection service. On November 30, 2016, a Chapter 11 trustee was appointed.
On June 2, 2017, UST filed a motion to dismiss the Chapter 11 case for failure to pay quarterly fees of either $9,750 or $6,825, which were delinquent as of May 1, 2017. On June 13, 2017, the Chapter 11 trustee filed opposition to the motion to dismiss.
DISCUSSION
11 U.S.C. § 1112(b) provides that a case may be dismissed or converted for cause. Section 1112(b)(4) enumerates certain examples of cause, including "failure to pay any fees or charges required under chapter 123 of title 28." 28 USC § 1930(a)(6) imposed the statutory fees for Chapter 11 cases. Therefore, cause exists to convert the
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case when Chapter 11 quarterly fees are not paid.
The Chapter 11 trustee states, however, that $6,000 of the past due fees were paid on June 12, 2017, and that the Chapter 11 trustee will pay the remaining balance.
TENTATIVE RULING
Chapter 11 trustee to inform the Court whether the Chapter 11 quarterly fees have been paid in full.
APPEARANCES REQUIRED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
United States Trustee (RS) Represented By Michael J Bujold
Abram Feuerstein esq Everett L Green Mohammad Tehrani
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
(Dismissed as to Nor Cal Pain Management Medical Group, Inc.)
From: 11/15/16, 12/6/16, 12/20/16, 2/28/17, 4/25/17, 6/27/17, 7/11/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Justin Paquette Pro Se
Javier Torres Pro Se
One Stop Multi-Specialty Medical Pro Se Nor Cal Pain Management Medical Pro Se Paramount Family Health Center Pro Se
Myelin Diagnostics Pro Se
2:00 PM
Sylvia De La Llana Pro Se
Shoreline Medical Group, Inc. Pro Se
Sunkist Imaging Medical Center Pro Se
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley Jason Balitzer
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Also #34 EH
Docket 139
08/22/2017
BACKGROUND
On November 10, 2016 ("Petition Date"), B&B Family, Incorporated (the "Debtor") filed for chapter 11 relief. The Debtor has three loans that are secured by essentially all personal property assets owned by the Debtor (the "Property"). The following is a list of secured claims in order of priority:
1. Comerica Bank: $494,123.90;
FC Marketplace: $88,963.76;
Oggie’s Corporate: $54,106.12
On July 31, 2017, the Debtor filed its Motion to Value Personal Property and Modify Lien of Comerica Bank and Extinguish Liens of Pioneer Park, LLC aka FC Marketplace, LLC aka Funding Circle Partners, LLC ("FC Marketplace") and Oggie’s Pizza & Brewing Co., Inc. ("Oggie’s Corporate") (the "Motion"). Service was proper and the Motion is unopposed.
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DISCUSSION
Section 506(a) ‘operates to bifurcate [an under] secured creditor's allowed claim into secured and unsecured interests based upon the bankruptcy court's valuation of the secured property. 11 U.S.C. § 506; In re 1441 Veteran Street Co., 144 F.3d 1288, 1291 (9th Cir.1998); Shook v. CBIC (In re Shook), 278 B.R. 815, 822 (9th
Cir. BAP 2002).
The Debtor has provided evidence to establish that the current fair market auction value of the Property is $20,000 ($50,000 - $60,000 if the restaurant is sold as a going concern, not including the franchise agreement). (Pope Decl. ¶4). Separately, the Debtor has provided evidence of its CFO, Marianne Richey, by which she approximates the value of the franchise agreement at $90,000 - $100,000. (Richey Decl. ¶3). Based on these figures, the Debtor seeks an order:
setting the value of its assets (assuming a sale as a going concern) at
$150,000;
bifurcating the claim of Comerica into a secured claim in the amount of
$150,000 and an unsecured claim in the amount of $344,123.90;
extinguishing the liens of FC Marketplace and Oggie’s Corporate on confirmation of the plan;
treating the claims of FC Marketplace and Oggie’s Corporate as general unsecured non-priority claims in accordance with the terms of the proposed plan; and
providing that on payment of the $150,000 in full of Comerica’s claim, that the lien of Comerica will become void and will no longer constitute an encumbrance against the Property.
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Here, the Debtor has provided sufficient evidence to establish a value of
$150,000 for all of its assets. Comerica, Oggie’s Corporate and FC Marketplace, though properly served, have not filed any response or opposition to the proposed valuation. Based on the foregoing, the Court finds that the Debtor’s proposed valuation is appropriate pursuant to § 506(a), that pursuant to § 502, the claims of Oggie’s Corporate and FC Marketplace are allowed as fully unsecured claims only, and that the claim of Comerica is allowed as a secured claim in the amount of
$150,000 and as an unsecured claim in the amount of $344,123.90 .
TENTATIVE RULING
For the foregoing reasons, the Motion is GRANTED in its entirety.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
Movant(s):
B & B Family, Incorporated Represented By Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
2:00 PM
EH
Docket 128
08/22/2017
Background:
On November 10, 2016 ("Petition Date"), B&B Family, Incorporated (the "Debtor") filed for chapter 11 relief.
On July 19, 2017, the Debtor filed an Objection to Claim No. 6 (the "Objection") of Commerce & Industry Insurance Company, Lexington Insurance Company, and Other Subsidiaries of AIG Property Casualty, Inc. ("Claimant"). The Objection was served on Claimant at the address it has provided on Claim No. 7 where notices should be sent and pursuant to FRBP 7004. No opposition has been filed.
Claim #: 6
Amount: $16,707
Objection:
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The Debtor objects to the claim on the grounds that the claim is beyond the
statute of limitations under state law.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
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Rebuttal of the Prima Facie Proof of Claim
In this case, the Debtor asserts that Claims No. 6 should be disallowed as time barred. Section 502(b)(1) provides that a claim is deemed allowed, unless such claim is unenforceable against the debtor and property of the debtor under applicable law.
The statute of limitations applicable to common counts is four years if the action is founded upon a contract or other writing (e.g., "book account" (¶ 3:398), "account stated" (¶ 3:400), or money lent on a note), and the statute of limitations is generally four years from the date of the last item in the account. CCP § 337(1),(2); Armstrong Petroleum Corp. v. Tri–Valley Oil & Gas Co., 116 CA 4th 1375, 1396, FN. 9 (Cal. App. 2004). Here, page 7 attached to Claim No. 6, indicates that at least two of the policies expired or were otherwise terminated in 2008 and 2009. As two these two policies, the Debtor has met its burden of demonstrating that the claim is unenforceable under state law because it appears that Claimant is seeking to enforce the claims for these terminated policies after the statute of limitations has lapsed. The burden now shifts to Claimant. Claimant, however, though properly served, has failed to offer any opposition which this Court deems as consent to the granting of the requested relief pursuant to LBR 9013-1(h).
As to the third policy, it is does not appear that Claimant is asserting any prepetition claim. The Court’s review of the Claim indicates that the amounts asserted by Claimant as unpaid related only to the 2008 and 2009 policies ($9,633 + $7,074 = 16,707). (Claim No. 6 at pp 8-9). Thus, the objection appears unnecessary as to any 2016 policy.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to SUSTAIN the Debtor’s objection as to the $16,707 related to the 2008 and 2009 policies. Claim No. 6 is disallowed in its entirety.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
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Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
Movant(s):
B & B Family, Incorporated Represented By Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
2:00 PM
EH
Docket 80
NONE LISTED -
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
Movant(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
2:00 PM
Also #35 & #37 EH
Docket 0
BACKGROUND
Rio Rancho Super Mall, LLC ("Debtor") is a California Limited Liability Corporation. Debtor owns and operates a commercial property, Rio Rancho Super Mall, located at 25211 Sunnymead Blvd., Moreno Valley, CA 92553 ("Property"). The Property is improved with a commercial building (approx. 100,750 sq. ft.) with retail space for 87 retail tenants. On February 13, 2017, Debtor filed a voluntary Chapter 11 Petition. This is the Debtor’s second chapter 11 case. The Debtor’s prior case was dismissed on December 27, 2016, based on the Debtor’s material default in its compliance with the terms of the previously confirmed chapter 11 plan.
Related Documents:
On August 2, 2017, Debtor filed its First Amended Disclosure Statement (Redlined) (Docket #88) and its First Amended Chapter 11 Plan of Reorganization (Redlined) (Docket #89).
On August 8, 2017, creditor Butterfield Valley Parnters filed its Opposition/Objection to the First Amended Disclosure Statement and First Amended Plan (Docket #93).
On August 9, 2017, creditor Pacific City Bank filed its Limited Joinder to the Objection of Butterfield
Ownership and Management of Debtor:
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Debtor has two owners
Eric Sang Yul Kim ("Mr. Kim") is the managing member and owns 87.5%
Kwan Sung Kim ("Mrs. Kim"), Debtor’s wife, owns the remaining 12.5%
The Debtor is managed by Dennis Park and Kwang Sung Kim. Mrs. Hyang Hwa Kim is the sister of Eric Sang Yul Kim and is providing uncompensated services to the Debtor. The Debtor proposes to begin paying Mrs. Hyang Kim a regular salary of $3,000 per month "if the market is stable".
DSD:
Debtor’s primary secured creditor is DSD Note Investors, Inc. ("DSD") which
the Debtor asserts fully encumbers the Property. On January 31, 2017, DSD filed a complaint for breach of contract and foreclosure and also moved the Superior Court for the appointment of a receiver.
Motivation for filing a Chapter 11:
Debtor contends that the instant filing was precipitated by the dismissal of its prior case due, in part, to poor market conditions which did not sufficiently improve, and due also to problems with the Debtor’s confirmed plan which failed to account for certain liens; and also due to the aggressive collection efforts of DSD.
DISCUSSION
Before a disclosure statement may be approved after notice and a hearing, the court must find that the proposed disclosure statement contains "adequate information" to solicit acceptance or rejection of a proposed plan of reorganization. 11 U.S.C. § 1125(b).
"Adequate information" means information of a kind, and in sufficient detail, so far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records, that would enable a hypothetical reasonable investor typical of the holders of claims against the estate to make a decision on the proposed plan of reorganization. 11 U.S.C. § 1125(a).
There is no set list of required elements to provide adequate information per se. A case may arise where previously enumerated factors are not sufficient to
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provide adequate information. Conversely, a case may arise where previously enumerated factors are not required to provide adequate information. In re Metrocraft Pub. Services, Inc., 39 B.R. 567 (Bankr. N.D.Ga. 1984). "Adequate information" is a flexible concept that permits the degree of disclosure to be tailored to the particular situation, but there is an irreducible minimum, particularly as to how the plan will be implemented. In re Michelson, 141 B.R. 715, 718-19 (Bankr. E.D.Cal. 1992).
Courts have developed lists of relevant factors for the determination of adequate disclosure. See, e.g., In re A.C. Williams Co., 25 B.R. 173, 176 (Bankr.
N.D. Ohio 1982), In re Ferretti, 128 B.R. 16, 18–19 (Bankr. D.N.H. 1991), In re Malek, 10 C.B.C.2d 189, 35 B.R. 443, 443–44 (Bankr. E.D. Mich. 1983), In re Metrocraft, 39 B.R. 567, 568 (Bankr. N.D.Ga. 1984), In re Scioto Valley Mortgage Co., 88 B.R. 168, 170–71 (Bankr. S.D. Ohio 1988), In re U.S. Brass Corp., 194 B.R. 420, 424–25 (Bankr. E.D. Tex. 1996).
This Court should determine what factors are relevant and required in light of the facts and circumstances surrounding each particular case. In re East Redley Corp., 16 B.R. 429 (Bankr. E.D.Pa. 1982).
PLAN SUMMARY
The Debtor proposes an Effective Date of November 1, 2017
Funding
Debtor intends to fund the plan with regular business income estimated by the Debtor at approximately $110,920 per month. As of August 1, 2017, Debtor anticipates generating monthly gross rental income of $123,197 from an increase in rent.
Debtor asserts it will have $45,000 on the Effective Date from rental income and capital contributions
Law Offices of Langley & Chang: $25,000
Clerk’s Office: $0
US Trustee Fees: $975 Total: $25,975
Priority Tax Claims: (Unimpaired)
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Paid in full on Effective Date
CA Franchise Tax Board: $800
· IRS $2,711.88
Total: $3,511.88
Principal balance/allowed claim: $12,000,000
Secured claim allowed per stipulation including agreement by DSD to extend loan maturity date (notwithstanding Debtor assertion that Property value is
$7,000,000).
Terms: $55,000 per month at 5.75% interest for 48 months
o Additional quarterly payments of $7,500 per quarter for 48 months, thereafter loan is due in full.
Class 2: Riverside County Tax (Impaired)
Principal balance/allowed claim: $295,813
Terms: $5,330.11 per month at 18% interest for 120 months
Class 3: General Unsecured Creditors (Impaired)
Debtor proposes to pay 0% (i.e. no payments to general unsecured creditors).
Class 4: Equity Interest Holders
Mr. Kim and Mrs. Kim will retain their interests
New Value
At confirmation, the equity holders will make a one-time capital contribution of
$35,000
Liquidation Value
Debtor estimates its liquidation value is $7,028,400 and thus after payment of the secured claim of DSD in the amount of $12,000,000 and even assuming funds are available to pay administrative claims and priority tax claims, no funds would remain for other creditors.
Feasibility
EFFECTIVE DATE
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Debtor will fund the plan through regular business income and the cash contribution. Debtor states it will have $45,000 on effective date to pay $29,486.88 due on Effective Date.
Cash on hand: $10,000 (DIP Account)
Capital Contributions: $35,000 Total: $45,000
Balance remaining after paying initial amount of Effective Date: $15,513.12
FEASIBILITY THROUGHOUT LIFE OF PLAN
The Debtor asserts it will have $123,197 in gross monthly income from rents. It estimates expenses plus plan payments will cost Debtor $123,152.11 per month. At this level, the Debtor is expected to have an approximate shortfall of $44.89 per month.
OBJECTIONS
All objections were timely filed. The Debtor has filed no replies.
Butterfield disputes that DSD can assert any claim greater than $10,422,000 per the limitations contained in the DSD Deed of Trust;
Butterfield seeks additional language to make clear that the Plan will not place limits on the "ongoing effectiveness of the CAM Agreement"
Objects to being classified as a "unsecured" claimant where the motion to value has not yet been resolved and objects because the Plan makes no reference to the claim of Butterfield asserted in its proof of claim -
$741,664.74 (the Redline DS, Exhibit F fails to indicate the amounts of filed claims although several have been filed since the drafting of the original DS)
Butterfield also appears to object to any DS which does not provide for the contingency that at least some junior lienholders, including itself, may be fully or partially secured depending on the outcome of the motion to value.
1. PCB joins Butterfield’s objection that the maximum value that DSD can assert as a first priority lienholder is $10,422,000
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Tentative Ruling:
08/22/2017
Debtor’s Disclosure Statement and Plan are defective for the following reasons:
The Debtor refers to Mrs. Kwang Sung Kim as "Kwan Sun Kim" in the introductory paragraph to the DS. One of these spellings contains typos;
Based on the terms indicated by the Debtor for payment of DSD’s claim, it appears that the Debtor anticipates making a balloon payment to DSD at the end of the plan. The Plan should clearly indicate the Debtor’s estimate of how large this payment will be and the source of funding to pay the balloon payment;
On page 20, under the section entitled"C. Feasibility", the DS did not indicate that priority tax claims will also be paid on the Effective Date, which would alter the Debtor’s calculation of the balance of cash after making payment due on the Effective Date.
The current projections of the plan indicate there will be a monthly shortfall of approximately $44.89 per month (not including the 18% interest due to Riverside County on a monthly basis which is not accounted for in the Debtor’s 5-Year Projection). This shortfall is particularly problematic where the Debtor is expected to make an additional quarterly payment to DSD of
$7,500 until the end of the plan, plus a balloon payment of as yet unspecified amount at the end of the plan.
Based on the foregoing, the Court’s tentative ruling is to CONTINUE the hearing on approval of the First Amended DS to the date of the expected evidentiary hearing on the related Motion to Value for: (1) Debtor to address the issues raised by the Court;
for a determination of how the outcome of the Motion to Value hearing will impact the need for further revisions to the DS.
APPEARANCES REQUIRED.
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
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From: 3/28/17, 5/30/17, 7/25/17 Also #35 & #36
EH
Docket 6
- NONE LISTED -
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
10:00 AM
EH
Docket 15
- NONE LISTED -
Debtor(s):
Raul L Amaya Represented By Daniel King
Joint Debtor(s):
Leslie Amaya Represented By Daniel King
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
re: 2011 Dodge Ram 1500 $9807.44 EH
Docket 11
- NONE LISTED -
Debtor(s):
Chris J. Hoisington Represented By
James D. Hornbuckle
Trustee(s):
Karl T Anderson (TR) Pro Se
11:00 AM
EH
Docket 14
- NONE LISTED -
Debtor(s):
Tena Renee Fry Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
11:00 AM
EH
Docket 6
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
Mark Hayek Represented By
Erwin J Shustak
11:00 AM
From: 8/16/17 Also #4
EH
Docket 1
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
11:00 AM
EH
Docket 15
BACKGROUND
On June 29, 2017, Denise Valeski ("Debtor") filed a Chapter 7 voluntary petition. On July 5, 2017, the case was dismissed for failure to file a creditor’s matrix.
Subsequently, on July 21, 2017, Debtor filed a motion to reconsider dismissal, which is set for hearing on August 30, 2017.
On July 14, 2017, UST filed a motion for an order compelling attorney to file disclosure of compensation pursuant to 11 U.S.C. § 329.
DISCUSSION
11 U.S.C. § 329(a) states:
Any attorney representing a debtor in a case under this title, or in connection
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with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation.
Fed. R. Bankr. P. Rule 2016(b) provides further details regarding the requirements imposed by § 329. Here, Debtor’s counsel has failed to file the required disclosure of compensation. The Court has authority to enter an order directing the disclosure of such compensation, and will direct Debtor’s counsel to file the required disclosure. See, e.g., In re Shuma, 124 B.R. 668, 677 (Bankr. W.D. Pa. 1991).
TENTATIVE RULING
It appears that Debtor’s attorney filed the Statement of Attorney Compensation. Therefore, it appears that the matter is MOOT.
APPEARANCES REQUIRED.
Debtor(s):
Denise Lynn Valeski Represented By Gordon L Dayton
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
Docket 6
- NONE LISTED -
Debtor(s):
Alpine Industries LLC Pro Se
Trustee(s):
Todd A. Frealy (TR) Pro Se
11:00 AM
EH
Docket 15
PROCEDURAL BACKGROUND
On June 19, 2017, Claudia Acevedo ("Debtor") filed a Chapter 7 voluntary petition. On July 7, 2017, the case was dismissed for failure to file case commencement documents. On July 31, 2017, Debtor filed a motion for remedies for violation of stay by GW San Diego Properties, LLC ("GW"), and Wells Fargo Bank, National Association ("Wells Fargo"). On August 9, 2017, Wells Fargo filed its opposition.
FACTUAL BACKGROUND
The motion at issue relates to the foreclosure sale of certain property located at 16462 Ridge Field Drive, Riverside, CA 92503 (the "Property"). A brief history of the property is necessary to understand the respective rights in the Property.
On June 23, 2006, Carlos Vera ("Vera") obtained the property through a loan from Wells Fargo. On October 20, 2006, Vera executed a grant deed, conveying the Property to Jose Guerrero ("Guerrero"). The deed was recorded on May 25, 2007. A
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notice of default was issued on January 26, 2009, and recorded on January 29, 2009. During the first half of 2010, Guerrero filed three bankruptcies, all of which were summarily dismissed, and Vera filed one, in which Wells Fargo obtained relief from stay.
On May 23, 2012, Guerrero executed a grant deed, conveying the Property to himself and Jose Jimenez ("Jimenez") as joint tenants, one day before a scheduled foreclosure sale. Jimenez had, at the time, a pending Chapter 13 bankruptcy. On August 8, 2012, Guerrero executed another grant deed, conveying his interest to HACBED, Inc. ("HACBED"). The grant deed was recorded on January 19, 2013.
On October 16, 2016, Guerrero filed another bankruptcy, which was, again, summarily dismissed. A second foreclosure sale was later scheduled for June 19, 2017. Earlier, on May 14, 2017, HACBED executed a warranty deed, transferring a 10% interest in the Property to Debtor. The warranty deed was recorded on June 29, 2017. Less than three weeks later, Debtor filed the instant bankruptcy case the same day as the foreclosure, which was summarily dismissed. The bankruptcy case was filed a matter of minutes after the recording of the deed from HACBED and a matter of minutes before the scheduled foreclosure sale. Debtor faxed a notice of the bankruptcy filing to Wells Fargo three minutes before the scheduled foreclosure sale. Debtor also states that telephonic notice was provided to Wells Fargo prior to the sale, but a specific time is not provided.
After the foreclosure sale was held, on June 27, 2017, GW filed an unlawful detainer case in state court. Debtor requests the reconveyance of the property, dismissal of the unlawful detainer action, $10,000 in punitive damages, and $2,755 in actual damages.
DISCUSSION
11 U.S.C. § 362(a)(3), (4) states
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Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)
of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of –
(3) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate
(5) any act to create, perfect, or enforce any lien against property of the estate
Debtor argues that Wells Fargo and GW violated the automatic stay through holding a post-petition foreclosure sale, and, subsequently filing an unlawful detainer action, respectively. Wells Fargo raises the following four arguments in opposition to Debtor’s motion: (1) that Debtor did not have an interest in the Property; (2) there is cause for annulment of the automatic stay; (3) Wells Fargo’s actions were not willful; and (4) no damages were suffered.
Property Interest
The basis for Wells Fargo’s argument that Debtor did not have an interest in the Property is unclear. It appears to hinge on the following assertion, from page 7 of the opposition: "Vera transferred his entire interest to Guerrero, who in turn transferred his entire interest to himself and Jimenez as joint tenants. Therefore, Guerrero could not transfer the entire interest to HACBED without Jimenez also transferring his joint tenant interest." The grant deed transferring an interest in the Property to HACBED does not, however, purport to transfer the entire interest in the Property, but, instead, states that the grantor, Guerrero, is transferring the entirety of his interest. Even if Guerrero had attempted to also transfer the interest of Jimenez, that would not render the entire grant deed void, but would simply result in a finding that the attempt to transfer Jimenez’s interest was void.
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Annulment of Automatic Stay
11 U.S.C. § 362(d) permits a court to retroactively annul, modify, or condition the automatic stay. See, e.g., In re Schwartz, 954 F.2d 569, 572-73 (9th Cir. 1992). As Wells Fargo asserts, if a court retroactively annuls the automatic stay with respect to specific actions, then those actions would cease to be a violation of the automatic stay.
Wells Fargo sets forth, in detail, its argument why cause exists for annulment of the automatic stay. An opposition to a motion is not, however, the appropriate place to request that relief. Because of due process concerns, the Court will continue Debtor’s motion for sanctions and equitable relief to allow Wells Fargo to file, and set for hearing, a motion to annul the stay.
GW
GW has not filed any opposition to the motion under consideration. Debtor contends that GW violated the automatic stay through the filing of an unlawful detainer action eight days after Debtor’s commencement of the instant bankruptcy proceeding. If the filing of the unlawful detainer action is, in fact, a violation of the automatic stay, and, therefore, void, the consequence would not be a reconveyance of the Property. To obtain a reconveyance of the Property, Debtor must establish that the foreclosure sale conducted by Wells Fargo was a violation of the automatic stay. Nevertheless, the remainder of Debtor’s requested remedies may be applicable if Debtor is successful in its motion with regard to GW, but unsuccessful in its motion with regard to Wells Fargo.
As noted by Wells Fargo, however, § 362(k) imposes a requirement that a violation be willful in order for an aggrieved debtor to recover damages. 11 U.S.C. § 362(k)(1).
Generally, the willfulness requires the presence of two factors: (1) the party knows of the automatic stay; and (2) the actions taken in violation of the automatic were intentional. See, e.g., Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210, 1215 (9th Cir.
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2002). Here, there is no evidence in the record that GW knew of the bankruptcy filing. Instead it appears that Debtor only notified Wells Fargo of the commencement of the bankruptcy. Therefore, Debtor has failed to provide evidence establishing that the requirements of § 362(k)(1) are satisfied.
Debtor also requests that GW "be ordered to dismiss the unlawful detainer case." As noted by Debtor, an act that violates the automatic stay is void. See, e.g., In re Schwartz, 954 F.2d 569, 571 (9th Cir. 2002). "This rule applies to judicial
proceedings." Leetien, 309 F.3d at 1215; see also In re Gruntz, 202 F.3d 1074, 1082 (9th Cir. 2000). Therefore, GW’s filing of the unlawful detainer action may be void, and the state court may have lacked jurisdiction over the unlawful detainer action. See In re Gruntz, 202 F.3d at 1083 ("[A] reverse Rooker-Feldman situation is presented when state courts decide to proceed in derogation of the stay, because it is the state court which is attempting impermissibly to modify the federal court’s injunction.). If the state court lacked jurisdiction to hear the unlawful detainer, then the unlawful detainer action must be dismissed.
If Wells Fargo is successful, however, in annulling the stay, however, then the foreclosure sale of June 19, 2017, will be valid. If the foreclosure sale is valid, then it would appear that the automatic stay provisions cited by Debtor, § 363(a)(3) & (5), would not be applicable, since the Property, at the time of the filing of the unlawful detainer action, would not have been property of the debtor or property of the estate. Furthermore, § 362(a)(1) would be inapplicable, because the foreclosure sale having been held post-petition, GW’s unlawful detainer action is not an action that "could have been commenced before the commencement" of the bankruptcy case. Therefore, the validity of the unlawful detainer action filed by GW depends upon Wells Fargo’s success in obtaining annulment of the automatic stay.
TENTATIVE RULING
The Court is inclined to CONTINUE the matter for Wells Fargo to file a motion to annul the automatic stay.
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APPERANCES REQUIRED.
Debtor(s):
Claudia Acevedo Represented By Richard McAndrew
Movant(s):
Claudia Acevedo Represented By Richard McAndrew
Trustee(s):
Karl T Anderson (TR) Pro Se
11:00 AM
EH
Docket 12
BACKGROUND
On May 23, 2017, Lyne Aguilar ("Debtor") filed a voluntary Chapter 7 petition.
On July 28, 2017, UST filed a motion for the entry of an order disgorging fees and imposing fines against bankruptcy petition preparers Michael Landrum ("Landrum") and Time Lawyers, requesting an aggregate of $22,100. According to UST’s motion, Landrum failed to identify himself on the prepared documents, provided Debtor legal advice, and engaged in prohibited advertising using the word "legal".
DISCUSSION
Bankruptcy Petition Preparer
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11 U.S.C. § 110(a)(1) defines "bankruptcy petition preparer" as "a person, other than an attorney for the debtor or an employee of such attorney under the direct supervision of such attorney, who prepares for compensation a document for filing." "Document for filing" is defined as "a petition or any other document prepared for filing by a debtor in a United States bankruptcy court or a United States district court in connection with a case under this title. Id.
Here, UST has provided the declaration of Debtor stating that Landrum prepared a document for filing, and was compensated for such preparation. Furthermore, there is no direct evidence that Landrum is an attorney, or works under the supervision of an attorney. Therefore, Landrum is a bankruptcy petition preparer subject to the requirements of § 110.
Identification of BPP
11 U.S.C. § 110(b)(1) requires bankruptcy petition preparers to place their name and address on documents they prepare for filing. Furthermore, 11 U.S.C. § 110(c) requires individual bankruptcy petition preparers to include their social security number on documents they prepare for filing. Finally, 11 U.S.C. § 110(h)(2) provides that a bankruptcy petition preparer must disclose compensation received from the debtor within the previous twelve months.
Here, UST has provided the declaration of Debtor which suggests1 that Landrum prepared the entirety of the bankruptcy paperwork in this case. Furthermore, UST has provided authenticated copies of the filed documents, establishing that Landrum did not identify himself in any form on the filed documents, or disclose the compensation he received.
Misleading Advertising
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11 U.S.C. § 110(f) states: "[a] bankruptcy petition preparer shall not use the word ‘legal’ or any similar term in any advertisements, or advertise under any category that includes the word ‘legal’ or any similar term."
Here, UST has provided Landrum’s business card which is titled "Time Lawyers," identifies Landrum as a "license paralegal," identifies his email as timelawyers@aol.com, and states "Trial Lawyers Association Member" and "Bar License by American Bar Association." This egregiously false advertising is clearly a violation of § 110(f).
Legal Advice
11 U.S.C. § 110(e)(2)(A) states: "[a] bankruptcy petition preparer may not offer a potential bankruptcy debtor any legal advice, including any legal advice described in subparagraph (B)." 11 U.S.C. § 110(e)(2)(B) identifies several common categories of advice that fit within the definition of legal advice in the context of § 110(e)(2).
Here, UST states that "Landrum unlawfully provided legal advice by completing the documents for the Debtor, explaining them, and then instructing her to sign the petition even though she did not understand the documents." It is not clear whether the last two categories, explaining documents and instructing Debtor to sign documents, constitute legal advice in this case. Furthermore, it is not clear that completing the documents for Debtor constitutes "advice" in any sense. Nevertheless, it would be illogical to conclude that a bankruptcy petition preparer is prohibited from advising a debtor regarding how to characterize property, but is permitted to unilaterally characterize the property. Therefore, the Court interprets Landrum’s completion of the documents as legal advice, and Debtor’s signing of the documents to be Debtor’s acceptance of Landrum’s legal advice.
Damages
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First, Section 110(i)(1) states:
(i)(1) If a bankruptcy petition preparer violates this section or commits any act that that the court finds to be fraudulent, unfair, or deceptive, on the motion of the debtor, trustee, United States trustee (or the bankruptcy administrator, if any), and after notice and a hearing, the court shall order the bankruptcy petition preparer to pay to the debtor-
the debtor’s actual damages;
the greater of—
(i) $2,000; or
(ii) twice the amount paid by the debtor to the bankruptcy petition preparer for the preparer’s services; and
reasonable attorneys’ fees and costs in moving for damages under this subsection.
The use of the word ‘shall’ in § 110(i)(1) indicates that the bankruptcy court has no discretion in deciding whether to impose statutory damages of $2,000 once it found a violation of § 110. First, however, the Court must determine that Ortega committed a "fraudulent, unfair, or deceptive" act. See, e.g., In re Doser, 412 F.3d 1056, 1064 (9th Cir. 1005); see also In re Kangarloo, 250 B.R. 115 (Bankr. C.D. Cal 2000). Engaging in the unauthorized practice of law has routinely been held to be a "fraudulent, unfair, or deceptive" act under the statute. See, e.g., In re Monson, 522 B.R. 340, 355 (Bankr.
Utah 2014) ("Offering legal advice to debtors can constitute a fraudulent, unfair or deceptive act within the context of § 110(i)(1).") (collecting cases); In re Bagley, 433
B.R. 325, 334 (Bankr. D. Mont. 2010). Furthermore, given that Landrum provided Debtor with a business card blatantly misrepresenting his credentials, the Court concludes that Landrum has engaged in a "fraudulent, unfair, or deceptive" act," and, therefore, the $2,000 damages requested are appropriate.
Second, 11 U.S.C. § 110(h)(3)(B) states: "[a]ll fees charged by a bankruptcy petition
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preparer may be forfeited in any case in which the bankruptcy petition preparer fails to comply with this subsection or subsection (b), (c), (d), (e), (f), or (g)."
Here, UST has requested the disgorgement of $600, $300 received by Landrum for this case, and $300 received by Landrum for the filing of a previous case, within the prior twelve months. The plain language of the statute is not unambiguous regarding whether the Court can order disgorgement of compensation received in an earlier case. Courts have previously utilized the provision to order disgorgement of fees received in other cases. See, e.g., In re Bagley, 433 B.R. 325, 334 (Bankr. D. Mont. 2010).
Here, however, the Court will reach the same result through a more clearly applicable provision, § 110(h)(3)(A)(i), which allows the Court to order disgorgement of fees received in the previous twelve months which were defective in light of the services provided. Here, Landrum received $300 for filing a facially defective petition that was summarily dismissed. The Court considers the value of Landrum’s services in the previous case to be worth $0, and, therefore, disgorgement is appropriate. See, e.g., In re Pilot, 286 B.R. 157, 162 (Bankr. C.D. Cal. 2002) ("Because of the unauthorized practice of law, the reasonable value of the services provided is zero.").
Third, 11 U.S.C. § 110(l)(1) provides: "[a] bankruptcy petition preparer who fails to comply with any provision of subsection (b), (c), (d), (e), (f), (g), or (h) may be fined not more than $500 for each such failure." The quoted provision instructs the Court to determine how many violations of the enumerated subsections have occurred, and multiply the number of violations by $500. UST asserts that, in this case, there are thirteen such violations. Implicit in UST’s calculation is that multiple violations of the same subsection are aggregate, as is one document’s violation of multiple subsections.
The statute is unclear regarding the method by which the number of violations is to be determined. There are two questions critical to the resolution of this issue: (1) whether multiple documents or acts that violate the same provision constitute multiple violations; and (2) whether one document or act that violates multiple provisions constitutes multiple violations. Some courts have answered in the affirmative to both questions, rapidly multiplying the assessed fine. See, e.g., In re Bowyer, 489 B.R. 798, 814 (Bankr. N.D. Ind. 2013) (fifty-four violations); In re Bradshaw, 233 B.R. 315, 332-34 (Bankr. D.N.J. 1999) (193 total violations). Other courts seem to have answered in the negative to both questions, and based their finding on the number of enumerated subsections violated, regardless of how many times it may have been
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violated. See, e.g., In re France, 271 B.R. 748, 757 (Bankr. E.D.N.Y. 2002); In re Chamberland, 190 B.R. 972, 977 (Bankr. M.D. Fla. 1996); see also In re Kangarloo, 250 B.R. 115, 125 (Bankr. C.D. Cal. 2000) ("In accordance with the authorities, this court orders Arotionians to pay a fine of $500 for each subsection violated.").
Endorsing the principle that one document can constitute multiple violations, and one provision can be violated multiple times, would create a situation where the number of violations is essentially uncountable. While the number of documents filed can be easily ascertained, the other primary subsections, relating to providing legal advice and legal advertising, are more difficult to assess. See, e.g., In Monson, 522 B.R. 340, 355 (Bankr. D. Utah 2014) (each instance of providing legal advice is a separate violation). Here, as noted above, the Court has concluded that the completion of the case commencement documents constituted the providing of legal advice. Under the theory that a subsection can be violated multiple times, the case commencement documents filed in this case could be considered to constitute hundreds of violations. And it is plausible to speculate that § 110(f), relating to misleading advertising, could have been violated on dozens, if not hundreds, of occasions. While the Court does not believe the requested relief to be necessarily excessive in this case, the reasonableness of the relief requested does not, a priori, determine the reasonableness of the principle upon which the relief is based. The principle implicitly adopted here is simply untenable.
The Court acknowledges that 11 U.S.C. § 110 was designed to remedy the perceived abuses committed by bankruptcy petition preparers. 2 Collier on Bankruptcy ¶ 110.01 (16th ed. 2015) ("[S]ection 110 was enacted to remedy what was perceived to be widespread fraud and unauthorized practice of law by non-attorneys who prepared bankruptcy documents for consumer debtors.") (citing In re Crawford, 194 F.3d 954 (9th Cir. 1999)). Yet, ballooning the fees to be paid to UST does not seem to be the appropriate remedy. Therefore, the Court concludes that the number of violations is equivalent to the number of subsections violated (in this case five). The Court finds that UST has demonstrated the applicability of § 110(l)(2)(d), and, therefore, the statutory fine will be tripled, resulting in a fine of $7,500. Furthermore, in light of the egregious misrepresentations by Landrum on his business card, the Court will issue an order to show cause why Landrum should not be enjoined from serving as a bankruptcy petition preparer in the future.
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TENTATIVE RULING
The Court is inclined to GRANT the motion in the reduced amount of $10,100, of which $2,600 is to be payable to Debtor, and $7,500 is to be payable to the United States Trustee and will issue an order to show cause why Michael Landrum should not be enjoined as a bankruptcy petition preparer.
APPEARANCES REQUIRED.
Debtor(s):
Lyne Tan Aguilar Pro Se
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
Trustee(s):
Charles W Daff (TR) Pro Se
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EH
Docket 10
BACKGROUND
On May 15, 2017, Mayra Huerta ("Debtor") filed a Chapter 7 voluntary petition. The initial case documents included a declaration of bankruptcy petition preparer and a disclosure of compensation of bankruptcy petition preparer, both completed by Ricardo Lopez ("Lopez").
On July 26, 2017, UST filed a motion for an order disgorging fees, assessing damages, and imposing fines against Lopez and the Paralegal Group pursuant to 11
U.S.C. § 110, requesting an aggregate of $3,200. According to UST’s motion, Lopez prepared Debtor’s bankruptcy documents and provided Debtor legal advice regarding classification of claims and selection of exemptions. UST further asserts that Lopez has been enjoined as a bankruptcy petition preparer since July 27, 2016.
DISCUSSION
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Bankruptcy Petition Preparer
11 U.S.C. § 110(a)(1) defines "bankruptcy petition preparer" as "a person, other than an attorney for the debtor or an employee of such attorney under the direct supervision of such attorney, who prepares for compensation a document for filing." "Document for filing" is defined as "a petition or any other document prepared for filing by a debtor in a United States bankruptcy court or a United States district court in connection with a case under this title.
Here, Lopez’s completion and filing of the declaration of bankruptcy petition preparer and the disclosure of compensation of bankruptcy petition preparer establish that he is a bankruptcy petition preparer subject the requirements of § 110.
Advertisement of Legal Services
11 U.S.C. § 110(f) states: "[a] bankruptcy petition preparer shall not use the word ‘legal’ or any similar term in any advertisements, or advertise under any category that includes the word ‘legal’ or any similar term." Here, UST argues that Lopez’s use of the name "Paralegal Group" on his business card constitutes a violation of § 110(f).
The Bankruptcy Appellate Panel of the Ninth Circuit has previously stated"
Several courts, including the Panel, have held that a BPP’s use of the word "paralegal" violates § 100(f), not only because it actually contains the prohibited word "legal," but also because it promotes the BPP’s specialized legal expertise or knowledge and misleads lay persons into believing legal services are being provided.
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In re Wojcik, 560 B.R. 763, 770 (B.A.P. 9th Cir. 2016) (collecting cases). The Court agrees, and finds that the use of "paralegal" in advertising violates the requirements of
§ 110(f). Furthermore, the Court finds that the distribution of business cards constitutes an advertisement. Therefore, Lopez has violated § 110(f).
Legal Advice
11 U.S.C. § 110(e)(2)(A) states: "[a] bankruptcy petition preparer may not offer a potential bankruptcy debtor any legal advice, including any legal advice described in subparagraph (B)." 11 U.S.C. § 110(e)(2)(B) identifies several common categories of advice that fit within the definition of legal advice in the context of § 110(e)(2). The authenticated transcript of Debtor’s meeting of creditors establishes that UST questioned Debtor concerning whether Lopez has provided the advice prohibited by
§ 110(e)(2)(B). Debtor, in response to the several of the questions, stated that Lopez had, in fact, provided the prohibited advice. Therefore, Lopez has violated § 110(e).
11 U.S.C. § 110(l)(1) provides for a discretionary fine of up to $500 for a violation of
§ 110(e). Given that Lopez provided a variety of prohibited legal advice, and given the lack of any opposition to the motion, the Court finds the requested fine to be reasonable.
Disgorgement of Compensation
11 U.S.C. § 110(h)(3)(B) provides the Court with discretion to order disgorgement of compensation received when a bankruptcy petition fails to comply with § 110(b)-(g). Here, as noted above, Lopez failed to comply with the statutory requirements. Given that this is not Lopez’s first violation of the requirements for bankruptcy petition preparers, and given the lack of opposition to UST’s motion, the Court finds disgorgement of the $200 received to be appropriate.
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Statutory Damages
Section 110(i)(1) states:
(i)(1) If a bankruptcy petition preparer violates this section or commits any act that that the court finds to be fraudulent, unfair, or deceptive, on the motion of the debtor, trustee, United States trustee (or the bankruptcy administrator, if any), and after notice and a hearing, the court shall order the bankruptcy petition preparer to pay to the debtor-
the debtor’s actual damages;
the greater of—
(i) $2,000; or
(ii) twice the amount paid by the debtor to the bankruptcy petition preparer for the preparer’s services; and
reasonable attorneys’ fees and costs in moving for damages under this subsection.
The use of the word ‘shall’ in § 110(i)(1) indicates that the bankruptcy court has no discretion in deciding whether to impose statutory damages of $2,000 once it found a violation § 110(f). First, however, the Court must determine that Ortega committed a "fraudulent, unfair, or deceptive" act. See, e.g., In re Doser, 412 F.3d 1056, 1064 (9th Cir. 1005). Engaging in the unauthorized practice of law has routinely been held to be a "fraudulent, unfair, or deceptive" act under the statute. See, e.g., In re Monson, 522
B.R. 340, 355 (Bankr. D. Utah 2014) ("Offering legal advice to debtors can constitute a fraudulent, unfair or deceptive act within the context of § 110(i)(1).") (collecting cases); In re Bagley, 433 B.R. 325, 334 (Bankr. D. Mont. 2010). Given that Lopez provided Debtor with a business card advertising his association with the Paralegal Group and listing a variety of legal topics, the Court concludes that Lopez has engaged in a "fraudulent, unfair, or deceptive" act," and, therefore, the $2,000 damages requested are appropriate.
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TENTATIVE RULING
The Court is inclined to GRANT the motion and order Lopez to pay Debtor $2,200 and pay a fine to the United States Trustee in the amount of $1,000.
APPEARANCES REQUIRED.
Debtor(s):
Mayra Huerta Pro Se
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
Trustee(s):
Karl T Anderson (TR) Pro Se
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EH
Docket 27
- NONE LISTED -
Debtor(s):
Ricardo Enciso Represented By Speros P Maniates
Joint Debtor(s):
Sonia Gamez Represented By
Speros P Maniates
Movant(s):
Larry D Simons (TR) Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
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Also #11 EH
Docket 23
- NONE LISTED -
Debtor(s):
Ricardo Enciso Represented By Speros P Maniates
Joint Debtor(s):
Sonia Gamez Represented By
Speros P Maniates
Movant(s):
Larry D Simons (TR) Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
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Docket 92
BACKGROUND
Debtor obtained a discharge in a Chapter 7 case filed on November 30, 2010. Between February 14, 2013 and September 18, 2015, Debtor filed four Chapter 13 cases, all of which were dismissed within one year.
On August 5, 2016, Elizabeth Baker ("Debtor") filed a Chapter 13 voluntary petition. On October 26, 2016, Debtor’s Chapter 13 plan was confirmed. On June 9, 2017, unaware that she was ineligible for a Chapter 7 discharge, Debtor converted her case to Chapter 7. On July 24, 2017, Debtor filed a motion to reconvert to Chapter 13.
DISCUSSION
11 U.S.C. § 706(a) states: "The debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title." Here, Debtor’s case was previously converted under § 1307.
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"Courts are divided as to whether the debtor can re-convert a case that has been previously converted." Ginsberg & Martin on Bankruptcy § 12.13[A] (5th ed. 2017-2); see also In re Masterson, 141 B.R. 84, 87 (Bankr. E.D. Pa. 1992) ("The courts appear to be evenly divided on the issue of whether a ‘second conversion’ of a case previously converted to Chapter 7 is ever permissible.") (collecting cases). The courts that have determined that § 706(a) bars subsequent reconversion have primarily relied upon the plain language of the statute, but have also considered the legislative history. See In re Banks, 252 B.R. 399, 400 (Bankr. E.D. Mich. 2000). One court has stated the following:
Unfortunately, for the debtor, the language of Section 706 clearly bars a debtor from converting a case from Chapter 7 to Chapter 13 more than once.
Subsection (a) of that section states in relevant part that a "debtor may convert a case under this chapter to a case under Chapter 11 or 13 of this title at any time, if the case has not been converted under Section 1112 or 1307 of this title. The language of this statute is not discretionary. By its plain meaning it bars the debtor from this second attempt at conversion. Moreover, there is no case law supporting a discretionary right. At least one other bankruptcy court has arrived at this conclusion, In re Bumpass, 28 B.R. 597 (Bankr. S.D.N.Y. 1983), and this Court shares that view.
In re Nimai Kumar Ghosh, 38 B.R. 600, 603 (Bankr. E.D.N.Y. 1984) (footnote omitted).
As the court implicitly concluded in Nimai Kumar Ghosh, the phrase appears "if the case has not been converted" appears to modify the entirety of the first clause, not simple the language "at any time." The phrase "at any time" is not set off from the remainder of the clause in any fashion. Therefore, §706(a) is only applicable if the case has not been converted previously. The remaining question is, if § 706(a) is inapplicable, can the Debtor resort to any other mechanism in order to convert her case?
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Courts that have permitted a reconversion appear to fall into two categories. First, some courts appear to believe that, when § 706(a) is inapplicable, the default position is that the Court has discretion to allow conversion based on policy grounds. See, e.g., In re Masterson, 141 B.R. at 88. Other courts have turned to § 706(c). See, e.g., Matter of Johnson, 116 B.R. 224, 225 (Bankr. Idaho 1990); In re Sensibaugh, 9 B.R. 45, 46 (Bankr. E.D. Va. 1981). Section 706(c) states: "[t]he court may not convert a case under this chapter to a case under chapter 12 or 13 of this title unless the debtor requests or consents to such conversion." While the plain language of § 706(c) indicates that it operates as a restraint on the court’s authority, not as a source of authority, courts that have utilized this provision appear to conclude that if the debtor consents to or requests conversion, the court has discretion to permit such conversion.
A third possibility is that a debtor could seek voluntary dismissal or conversion under
§ 707, consent to conversion, and allow the Court to determine whether dismissal or conversion was more appropriate in the circumstances. This approach would have the disadvantage of possibly resulting in dismissal of the case, but it would seem to solve the statutory interpretation issues encountered by the alternative approaches.
Nevertheless, the Court need not determine whether reconversion is permitted under § 706(a) because, if the Court were to conclude that reconversion is discretionary, Debtor has not demonstrated that the exercise of such discretion would be appropriate. Debtor has had four Chapter 13 cases dismissed in the previous five years. More importantly, at the time Debtor converted to Chapter 7, there was an outstanding motion to dismiss pending for failure to make plan payments. Debtor appears to have chosen to convert the case to Chapter 7 rather than resolve the Chapter 13 Trustee’s pending motion to dismiss.
Given Debtor’s history in bankruptcy, the absence of any legal argument in Debtor’s motion, and the absence of any evidence suggesting a change in circumstances which would allow Debtor to be successful in a Chapter 13 proceeding, the reconversion of the case, even if the Court were to conclude that such reconversion was legally permissible, would be inappropriate.
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TENTATIVE RULING
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Elizabeth T Baker Represented By Nancy Korompis
Movant(s):
Elizabeth T Baker Represented By Nancy Korompis
Trustee(s):
John P Pringle (TR) Pro Se
11:00 AM
Docket 36
BACKGROUND
On April 6, 2016, Luz Castro ("Debtor") filed a Chapter 7 voluntary petition. On January 9, 2017, Trustee filed an adversary proceeding against Enrique Castro ("Defendant") for: (1) avoidance of fraudulent transfer; and (2) recovery of avoided transfer. The subject of the adversary proceeding was certain real property located at 2035 Caseros Drive, San Jacinto, California 92592 (the "Property").
According to Trustee, Defendant acquired the Property shortly before the marriage of Defendant and Debtor. During the marriage, however, community property income was used to make mortgage payments, causing the community estate to acquire an interest in the Property. On March 31, 2015, Debtor transferred her interest in the property to Defendant. Trustee asserts that Debtor did not receive reasonably equivalent value for the transfer.
On July 6, 2017, Trustee filed a motion to approve compromise pursuant to Fed. R. Bankr. P. Rule 9019. Trustee proposes to settle the adversary proceeding for $10,000. On July 28, 2017, the matter was set for hearing.
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DISCUSSION
Fed. R. Bankr. P. Rule 9019 provides that:
On motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct.
The Ninth Circuit Court of Appeals have previously outlined the factors to be considered in approving a compromise pursuant to Rule 9019: (1) the probability of success in the litigation; (2) the difficulties to be encountered in the matter of collection; (3) the complexity, expense, inconvenience and delay of litigation; and (4) the interest of creditors with deference to their reasonable. See In re A&C Props., 784 F.2d 1377, 1381 (9th Cir. 1986). The listed factors assist the Court in determining "the fairness, reasonableness and adequacy of a proposed settlement agreement." Id.
Trustee’s compromise motion does not provide the information the Court requires to apply the A&C Properties factors or to assess the reasonableness of the settlement. First and foremost, the motion fails to identify the value of the Property or the value of the community estate’s interest in the property, rendering it impossible to determining the reasonableness of the settlement amount. Additionally, the motion addresses the A&C Properties factors in cursory, boiler-plate language. Regarding factor (1), the motion simply states that success in the adversary is not guaranteed. Regarding factor (2), the motion states that Trustee would have to sell the Property if the adversary proceeding were successful. Regarding factor (3), the motion states that the adversary is "not overly complex" but additional fees would result. Regarding factor (4), the motion states that the settlement would provide funds for creditors.
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In the absence of any evidence regarding the value of the Property or the value of the community estate’s interest in the Property, the Court cannot approve the compromise when only general arguments have made in its support.
TENTATIVE RULING
The Court is inclined to DENY the motion or CONTINUE for supplemental pleading to allow the Court to evaluate the reasonableness of the proposed settlement amount.
APPEARANCES REQUIRED.
Debtor(s):
Luz Ampelia Castro Represented By George P Hobson Jr
Movant(s):
Arturo Cisneros (TR) Represented By Todd A Frealy Carmela Pagay
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy Carmela Pagay
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EH
Docket 134
BACKGROUND
On March 13, 2014, Erma Dorn ("Debtor") filed a Chapter 7 voluntary petition. Prior to the filing of the petition, Debtor was involved in state court litigation in Riverside. Debtor retained the Southwick Law Firm ("Southwick") to assist in the state court litigation, and, according to Trustee, at the time of the filing of the petition, Southwick held $10,000 in a client trust account.
After more than a year of attempting to reach a resolution with Southwick, Trustee filed a motion for order directing Southwick to turn over property of the estate pursuant to 11 U.S.C. § 542 on July 24, 2017. On August 9, 2017, Southwick filed its opposition. Southwick makes three arguments in opposition: (1) Trustee is required to bring an adversary proceeding; (2) Southwick has earned the funds in the client trust account and the funds are no longer property of the estate; and (3) the motion should be denied on the basis of laches and estoppel.
DISCUSSION
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11 U.S.C. § 542(a) states:
Except as provided in subsection (c) or (d) of this section, an entity, other than a custodian, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title, or that the debtor may exempt under section 522 of this title, shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate.
Procedurally, Southwick argues that an adversary proceeding is required to secure turnover of property. Fed. R. Bankr. P. Rule 7001(1) states that an adversary proceeding is required for "a proceeding to recover money or property other than a proceeding to compel the debtor to deliver property to the trustee, or a proceeding under § 554(b) or § 725 of the Code, Rule 2017, or Rule 6002." Courts have held that Rule 7001(1) mandates that an adversary proceeding be commenced when a trustee seeks § 542 turnover from a party other than the debtor. For example, the Seventh Circuit Court of Appeals has previously stated:
A turnover action is an adversary proceeding which must be commenced by a properly filed and served complaint. The Roukas, however, entered the matter by filing a motion. A turnover proceeding commenced by motion rather than by complaint will be dismissed; and a turnover order entered in an action commenced by motion will be vacated.
Matter of Perkins, 902 F.2d 1254, 1258 (7th Cir. 1990); see also In re Wheeler Tech., Inc., 139 B.R. 235, 239 (B.A.P. 9th Cir. 1992) ("Bankruptcy Rule 7001 explicitly states that an action to recover money or property is an adversary proceeding, subject to the procedural rules therein.").
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Here, because Trustee is attempting to secure turnover of estate property from a party other than Debtor, Fed. R. Bankr. P. Rule 7001(1) requires the commencement of an adversary proceeding. Southwick has not waived the procedural requirement, and, therefore, the Court must dismiss Trustee’s motion.
TENTATIVE RULING
The Court is inclined to DISMISS the motion.
APPEARANCES REQUIRED, although Trustee may decline to appear and would be deemed to submit to the tentative.
Debtor(s):
Erma Fay Dorn Represented By Patricia M Ashcraft
Movant(s):
Arturo Cisneros (TR) Represented By William Malcolm Kiana Khajeh Dane W Exnowski Katelyn R Knapp
Trustee(s):
Arturo Cisneros (TR) Represented By William Malcolm Kiana Khajeh Dane W Exnowski Katelyn R Knapp
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Docket 247
8/23/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 5,635.20 Trustee Expenses: $ 611.75
Attorney Fees: $ 8,395.89 Attorney Costs: $ 363.02
Accountant Fees: $ 1,167.89 Accountant Costs: $ 260.03
Court Costs: $350.00
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Heinrich Franz Brinkmann Represented By
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Stephen H Darrow
Joint Debtor(s):
Ina Anneliese Brinkmann Represented By Stephen H Darrow
Trustee(s):
John P Pringle (TR) Represented By Toan B Chung
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(f) (1) Authorizing Sale of Estate's Right, Title and Interest in Real Property Free and Clear of Liens of US Bank as Custodian for PFS Financial I, LLC, Cheswold (TL), LLC, BMO Harris Bank, N.A., Propel Financial 1, LLC, and the City of Rochester; (2) Approving Overbid Procedure; and (3) Approving Payment of Commissions; Declarations in Support.
EH
Docket 440
BACKGROUND
On October 24, 2013, Baleine, LP ("Debtor") filed a Chapter 7 voluntary petition. On Schedule A, Debtor listed certain real property located at 40 Ferndale Crescent, Rochester, New York 14609 (the "Property"). On October 25, 2016, the Court authorized the employment of Nathan Genovese and Hunt Real Estate-ERA (collectively, "Broker)" as real estate broker.
On August 2, 2017, Trustee filed a motion for an order: (1) authorizing the sale of estate’s right, title and interest in real property free and clear of liens of U.S. Bank as custodian for PFS Financial I, LLC, Cheswold (TL), LLC, BMO Harris Bank, N.A., Propel Financial 1, LLC, and the City of Rochester; (2) approving overbid procedure; and (3) approving payment of commissions. Trustee proposes to sell the property for
$25,000 to the current lessee, Antonio Santiago. There are four tax liens (collectively, "Tax Liens") on the property, two recorded lis pendens (collectively, "Lis Pendens"), and various property taxes and utility obligations outstanding. The proposed distribution of proceeds is $6,262 for taxes and utility charges, and $2,000 in closing
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costs, with the remainder to be received by the estate.
DISCUSSION
Sale of Estate Property
11 U.S.C. § 363(b)(1) allows a trustee to sell property of the estate outside of the ordinary course, after notice and a hearing. A sale pursuant to § 363(b) requires a demonstration that the sale has a valid business justification. In re 240 North Brand Parners, Ltd., 200 B.R. 653, 659 (B.A.P. 9th Cir. 1996). "In approving any sale outside the ordinary course of business, the court must not only articulate a sufficient business reason for the sale, it must further find it is in the best interest of the estate,
i.e. it is fair and reasonable, that it has been given adequate marketing, that it has been negotiated and proposed in good faith, that the purchaser is proceeding in good faith, and that it is an "arms-length" transaction." In re Wilde Horse Enters., Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal.).
Trustee asserts that the sale price represents the fair market value of the property and the estate will receive approximately $16,738 and, therefore, sound business reasons exist for the sale. Because the sale will generate proceeds for distribution to unsecured creditors, the Court finds that Trustee has met his burden of demonstrating a valid business justification.
Sale Free & Clear of Liens
11 U.S.C. § 363(f) (2010) states:
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The trustee may sell property under subsection (b) or (c) of this section free and clear of any interest in such property of an entity other than the estate, only if-
applicable nonbankruptcy law permits sale of such property free and clear of such interest;
such entity consents;
such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property;
such interest is in bona fide dispute; or
such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest.
Trustee contends that the Tax Liens and Lis Pendens were recorded post-petition, in violation of the automatic stay, and, therefore, are in bona fide dispute. 11 U.S.C. § 362(d)(4) stays "any act to create, perfect, or enforce any lien against property of the estate." 11 U.S.C. § 362(b)(18) contains one of the exceptions to the automatic stay:
(b) The filing of a petition under section 301, 302, or 303 of this title, or of an application under section 5(a)(3) of the Securities Investor Protection Act of 1970, does not operate as a stay –
(18) under subsection (a) of the creation or perfection of a statutory lien for an ad valorem property tax, or a special tax or special assessment on real property whether or not ad valorem, imposed by a governmental unit, if such tax or assessment comes due after the date of the filing of the petition.
11:00 AM
The Seventh Circuit has previously explained the purpose of the § 362(b)(18) exception:
The exception’s intent was to reverse decisions that had held that the automatic stay blocked local governments from attaching statutory liens for property taxes that accrued subsequent to a bankruptcy filing. Because local governments rely on such taxes as one of their principal sources of revenue usually secured via statutory liens, certain court decisions created a windfall for secured lenders, who otherwise be subordinated to such tax liens, and significantly impaired revenue collection. Congress intended this section to overrule such cases and allow local municipalities to use their property tax liens to secure payment of property taxes.
Here, the evidence before the Court is not conclusive regarding the applicability of the
§ 362(b)(18) exception. The tax lien certificate relating to the lien sold to US Bank as custodian for FFS Financial 1, is illustrative of the lack of clarify. The certificate states that the rights being sold arise from "an unpaid tax, special ad valorem levy, special assessment or other charge imposed upon certain real property."
"The trustee has the burden of establishing the existence of a bona fide dispute." In re Terrace Chalet Apartments, Ltd., 159 B.R. 821, 828 (N.D. Ill. 1993). "[C]ourts must determine ‘whether there is an objective basis for either a factual or legal dispute as to the validity of the debt." In re Gaylord Grain L.L.C., 306 B.R. 624, 627 (B.A.P. 8th Cir. 2004) (quoting In re Busick, 831 F.2d 745, 750 (7th Cir. 1987)). "Courts utilizing this definition have held the parties to an evidentiary standard and evidence must be provided to show factual grounds that there is an objective basis for the dispute." Id. Here, while Trustee has provided evidence to suggest that it is plausible the tax lien were recorded in violation of the automatic stay, that same evidence suggests that it is plausible the tax liens fit within the exception to the automatic stay outlined above.
The uncertainty arises not from a factual dispute, but from the absence of any evidence regarding the specific character of the lien. Because it not the evidence that creates the ambiguity, but the lack thereof, the Court concludes that a bona fide dispute has not been established.
11:00 AM
Trustee advances an alternative argument under § 362(f): that the purchase price of the property exceeds the aggregate value of all liens on the property, satisfying § 363 (f)(3). Here, Trustee has provided evidence that establishes that the purchase price of the Property is $25,000, and that the aggregate value of the liens on the property is less than $25,000. Therefore, § 363(f)(3) has been satisfied, and the sale shall be free and clear of liens with such liens to attach to sale proceeds to the same extent, validity and priority as such liens attached to the property prior to the sale.
Overbid Procedures & Brokers Commission
The Court has reviewed the proposed overbid procedures finds the procedures to be reasonable. See, e.g., In re Fridman, 2016 WL 3961303 at *8 (B.A.P. 9th Cir. 2016) (reviewing overbid procedures for reasonableness). The Court has also reviewed the proposed real estate brokers’ commission and finds it to be reasonable.
14-Day Stay
Fed. R. Bankr. P. Rule 6004(h) states: "An order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise." The Court deems the absence of objections to be consent to the relief requested, pursuant to Local Rule 9013-(1)(h), and, therefore, will waive the stay of Rule 6004(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion in its entirety.
11:00 AM
APPEARANCES REQUIRED.
Debtor(s):
Baleine LP Represented By
Summer M Shaw
Movant(s):
Larry D Simons (TR) Represented By Carmela Pagay Todd A Frealy
Trustee(s):
Larry D Simons (TR) Represented By Carmela Pagay Todd A Frealy
11:00 AM
EH
Docket 472
Debtor’s motion indicates that Brian Ostler was to be served by the Court via Notice of Electronic Filing. Brian Ostler, is not, however, on the Electronic Mail Notice List to receive NEF transmission. Therefore, the Court is inclined to CONTINUE the matter to September 20, 2017, at 11:00 a.m. for proper service on Brian Ostler and his law office. Movant to serve the motion and notice of hearing on Mr. Ostler and his law firm.
APPEARANCES WAIVED.
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Movant(s):
Nabeel Slaieh Represented By George A Saba George A Saba
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:17-01019 Frealy v. Arnold et al
From: 4/5/17, 7/19/17, 7/26/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Kelly Arnold Represented By
Todd L Turoci
Defendant(s):
Kelly Arnold Pro Se
Larry Arnold Pro Se
Plaintiff(s):
Todd Frealy Represented By
Carmela Pagay
Trustee(s):
Todd A. Frealy (TR) Represented By Carmela Pagay
2:00 PM
Adv#: 6:17-01039 United States Trustee for the Central District of v. Quintero et al
From: 4/26/17, 6/28/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Ricardo Horacio Quintero Represented By Christopher J Langley
Defendant(s):
Araceli Cantu Pro Se
Ricardo Horacio Quintero Pro Se
Joint Debtor(s):
Araceli Cantu Represented By Christopher J Langley
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
2:00 PM
Trustee(s):
Howard B Grobstein (TR) Pro Se
2:00 PM
Adv#: 6:17-01085 PRINGLE v. Winn et al
From: 7/12/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Home Security Stores, Inc. Represented By Winfield S Payne III
Defendant(s):
Steven B Knoch Represented By Seth W Wiener
Stacy Winn Pro Se
Natalia V Knoch Represented By Seth W Wiener
Ralph Winn Pro Se
Sterling Security Service, Inc. Represented By Seth W Wiener
2:00 PM
Plaintiff(s):
JOHN P PRINGLE Represented By Charity J Miller
Trustee(s):
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
2:00 PM
Adv#: 6:16-01128 Frealy v. Trotochau et al
From: 7/20/16, 9/28/16, 1/11/17, 3/8/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
M. A. Tabor Represented By
Judith Runyon
Defendant(s):
Pacific Mortgage Exchange, Inc. Represented By
Salvatore Bommarito
Robin Sherrie Trotochau Pro Se
Plaintiff(s):
Todd A. Frealy Represented By Anthony A Friedman
2:00 PM
Trustee(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman Lindsey L Smith
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
Also #24 & #25 EH
Docket 36
BACKGROUND
On June 23, 2016, Revere Financial Corporation ("Revere") filed a complaint against Don Burns ("Burns"), and, on June 30, 2016, the complaint was amended. After Burns failed to answer or otherwise respond to the complaint, the clerk entered default against Burns on November 16, 2016.
On April 21, 2017, Revere filed a motion for default judgment. On May 4, 2017, Burns filed a motion to set aside default and an answer. On May 24, 2017, Revere filed its opposition to the motion to set aside default. At a hearing on June 7, 2017, the Court instructed the parties that it would conditionally grant the motion to set aside default upon payment of reasonable costs, and requested further briefing regarding Revere’s costs incurred as a result of Burns’s delay. At a continued hearing on July 12, 2017, after the Court posted a tentative ruling reducing the fees requested by Revere, the Court continued the motion to set aside default to allow further briefing from parties. The fee dispute has not yet been resolve and no order has been entered
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related to the motion to set aside default.
On June 30, 2017, Burns filed a motion to dismiss. On August 9, 2017, Revere filed their opposition to the motion to dismiss.
DISCUSSION
Despite the fact that Burns is still in default, neither party has briefed the impact of that status on Burns’s motion to dismiss. A legal scholar previous wrote that "the defaulting party loses his standing to contest the truth of all facts that are ‘well- pleaded’ in the non-defaulting party’s complaint." Peter H. Bresnan & James P. Cornelio, Relief from Default Judgments Under Rule 60(b) – A Study of Federal Case Law, 49 Fordham L. Rev. 956, 959-60 (1981) (collecting cases); see also Thomson v. Wooster, 114 U.S. 104, 112-14 (1885) ("From the authorities cited, and the express language of our own rules in equity, it seems clear that the defendants, after the entry of the decree pro confesso, and while it stood unrevoked, were absolutely barred and precluded from alleging anything in derogation of, or in opposition to, the said decree, and that they are equally barred, and precluded from questioning its correctness here on appeal, unless on the face of the bill it appears manifest that it was erroneous and improperly granted."). Burns’s motion to dismiss raises a legal argument, however, not a factual argument.
Courts appear willing to simultaneously grant motions to set aside default and dismiss the case. See, e.g., Mineo Yoshida v. Daikokuya Co., Ltd., 2008 WL 11338257 (C.D. Cal. 2007). Other courts have been more specific with regard to the order in which the motion to set aside default and the motion to dismiss must be considered. See Everest Indem. Ins. Co. v. Demarco, 2013 WL 12136578 at *2 (C.D. Cal. 2013) ("Before the Court can consider their motion to dismiss, the default must be set aside pursuant to Fed. R. Civ. P. Rule 55(c)."). Where, as is the case here, the Court has merely orally indicated that it will set aside default upon the occurrence of a condition which has not yet been defined, and may or may not come to pass, the Court considers it improper to rule on the motion to dismiss. Therefore, the Court will continue the matter for Burns to obtain a setting aside of the default.
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TENTATIVE RULING
The Court is inclined to CONTINUE the matter for fee payment, if any, to be made, and an order to be entered setting aside the default.
APPEARANCES REQUIRED.
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Represented By Don C Burns
Movant(s):
Don Cameron Burns Represented By Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
2:00 PM
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
HOLDING DATE
From: 6/7/17, 7/12/17 Also #23 & #25
EH
Docket 21
Background
At a hearing on the Defendant’s motion to set aside default ("Motion"), the Court indicated it would grant the motion conditioned upon the Defendant paying Plaintiff’s fees incurred for opposing the Motion and for preparation of the Motion for Default Judgment that would become moot as a result of the order setting aside the default, subject to any objection from Defendant as to the reasonableness of the fees.
The Court required that a declaration from Plaintiff regarding fees would be due by June 28, 2017, and that any response or objection to the fees would be due by July 7, 2017. On June 28, 2017, Plaintiff filed a declaration regarding fees, and, on July 7, 2017, Defendant filed its objection. At the hearing on July 12, 2017, the Court continued the matter to August 23, 2017, to allow for supplemental briefing to be filed by Plaintiff and Defendant. On July 26, 2017, Plaintiff filed a supplemental declaration in support of its requested fees. On August 9, 2017, Defendant filed a
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supplemental objection.
Summary of Fees
Since the last hearing, and in light of supplemental briefing on the issue, the Court has supplemented its review of the billing records provided by Plaintiff and finds several entries to be unreasonably high. Specifically,
The duplicative and excessive entries for research regarding elements, etc. of default judgments constitute two separate entries of approximately 7 hours each. The total for these two entries is thus approximately 14 hours regarding research for a default judgment motion on April 13 and April 14. The Court finds these research amounts unreasonably high. ($1,762.50 + $1,675=
$3,437.50)
A related conference between the associate preparing the motion and the partner on the case, Mr. Franklin Fraley, for a total of nearly 5 hours on April 19 appears excessive. ($1,237.50)
The April 21 revisions and conference with Mr. Fraley for a total of 5.2 hours inappropriately lumps amounts for distinct tasks together and warrants striking as well. ($1,300)
The May 9 and 10 entries to review/analyze for preparation of the opposition to the Defendant’s Motion are duplicative and should be stricken. ($1,250 +
$1,125=$2,375)
The May 24 entries that total 7.75 hours improperly lump tasks making it difficult to gauge the reasonableness of the fees. Overall the Court finds that the amount billed for the tasks set forth appear unreasonably high. This entry shall be stricken. ($1,937.50)
The entry of October 20, 2016, that totals .8 hours including lumping of multiple tasks and appears excessive. Given that the other entry that date implies that the conference was for .05 hours, the Court interprets the other task, researching the procedure for entering a default, to be for the remaining
0.75 hours. Given that the procedure is relatively straightforward, and there are multiple other entries for the same task, the entry appears unreasonable and
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will be stricken. ($180).
The entry of November 3, 2016, for 2 hours improperly lumps several tasks making it difficult to gauge the reasonableness of the fees. Furthermore, the entry appears vague and duplicative of other entries. This entry shall be stricken ($450)
The entry of May 11, 2017, for 2.5 hours improperly lumps several tasks making it difficult to gauge the reasonableness of the fees. This entry shall be stricken ($625)
The entry of May 12, 2017, for 4.25 hours appears unreasonable excessive. Plaintiff’s opposition memorandum [Dkt No. 26] was relatively straightforward, and, therefore, this entry will be stricken. ($1,062.50).
The entry of May 23, 2017, for 2.45 hours contains impermissible lumping of several tasks, is duplicative of the previous entries, and appears excessive. This entry shall be stricken ($612.50)
The entry of June 2, 2017, for 1.1 hours appears unreasonable excessive. Specifically, the reply of Defendant [Dkt. 30] was less than four pages long and contained no legal argument or legal citations. This entry shall be stricken ($275)
The entry of June 28, 2017, for 1.75 hours was outside the scope of the Court’s order allowing reasonable costs for bringing the motion for default judgment and opposing the motion to set aside default. This entry shall be stricken ($875)
Striking the above amounts, the Court finds that a reduction of $14,367.50 is appropriate.
Based on the foregoing, the Court is inclined to find the remaining figure of $4,593.75 to be a reasonable amount of fees for the actions taken by Plaintiff in opposing the Motion and in drafting the Motion for Default Judgment.
Plaintiff’s Legal Argument & Discussion
2:00 PM
Plaintiff’s supplemental declaration argues, in part, that the Court: (1) lacks the authority to review Plaintiff’s fee award altogether; and (2) improperly reduced Plaintiff’s fee award. The Court will briefly address Plaintiff’s arguments.
In support of its argument that the Court lacks the authority to reduce attorney fees sua sponte, Plaintiff cites U.S. v. Eleven Vehicles, 200 F.3d 203, 211 (3rd Cir. 2000), and two non-bankruptcy cases in this district. This situation is wholly distinguishable from the Eleven Vehicles case. First, in the Eleven Vehicles case, the party requesting fees made the request on the basis of a fee-shifting statute that stated, in part, that "a court shall award." See id.; 28 U.S.C. § 2412(d)(1)(A). In contrast, there is no statute in the present case directing the Court to award Plaintiff fees, rather the Court has found it equitable to provide Plaintiff some reimbursement for the costs incurred.
Additionally, the bankruptcy statute dealing with compensation, 11 U.S.C. § 330, clearly instructs the Court to consider "all relevant factors" when determining "reasonable compensation" and prohibits the Court from awarding compensation in certain circumstances. 11 U.S.C. § 330 (3)-(4). Plaintiff’s argument that the Court cannot award fees conflicts with the statutory directive that the Court is to consider the reasonableness of fees. And the Court is to undertake this review even when no party has objected, because it is well established that it is the applicant’s burden to demonstrate the reasonableness of the fees. See, e.g., In re Fibermark, Inc., 349 B.R. 385, 395 (Bankr. D. Vt. 2006); see also 3 Collier on Bankruptcy ¶ 330.03[2] (16th ed. 2015) ("Once services are determined to be compensable, the applicant must demonstrate that his work was necessary and reasonable.").
Furthermore, Plaintiff is requesting fees not according to a statutory fee shifting provision or 11 U.S.C. § 330, but only upon the tentative conditions imposed by the Court. Plaintiff’s argument that the Court cannot review the fees amounts to an argument that the Court lacks the authority to interpret its own instructions, and such an argument lacks merit.
2:00 PM
Plaintiff also offers a variety of arguments as to why each of the reductions noted in the Court’s previous tentative ruling was mistaken. Plaintiff offers three arguments as to why the various reductions were inappropriate: (1) that the Court misunderstood the entries; (2) that block-billing is not a reason to reduce or strike a fee entry; and (3) that excessive or duplicative fees should not be stricken in their entirety. The Court will briefly address Plaintiff’s arguments.
The Court will address the first two arguments in conjunction. Regarding (1), the Court did not misunderstand Plaintiff’s billing entries, but, rather, because of the extent of lumping in Plaintiff’s time entries, the Court chose to identify the entries in its tentative ruling by reference to the first task listed in the entry. Regarding (2), Plaintiff argues that block-billing refers to entries that document the total daily time working on a case and (a) that Plaintiff did not block bill; but (b) that block billing is not a reason to strike fees nevertheless. While the Court agrees that block billing, or lumping, should not invariably result in a fee reduction or elimination, the Court notes that, in bankruptcy, a fee applicant has the burden of demonstrating that its requested fees are reasonable. Given that lumping may prevent a Court from being able to ascertain the reasonableness of the fees requested, lumping may be cause for reduction or elimination of fees in bankruptcy. See, e.g., In re Thomas, 2009 WL 7751299 at *5 (B.A.P. 9th Cir. 2009) ("Lumping services in a single billing entry in a fee application is universally disapproved by bankruptcy courts.") (quotation omitted); In re Baker, 374 B.R. 489, 494 (Bankr. E.D.N.Y. 2007) ("Also the billing of practice of aggregating multiple tasks into one billing entry, typically referred to as ‘block billing,’ is routinely disallowed. This is because the practice of block billing makes it exceedingly difficult for a Court to determine the reasonableness of the time spent on each of the individual services or tasks provided. Consequently, courts will summarily disallow time for discrete legal services merged together in a fee application.").
Plaintiff also argues that the elimination of fee entries that the Court concluded were duplicative or excessive was incorrect. Once again, Plaintiff cites a non-bankruptcy case that dealt with a mandatory fee-shifting statute. In bankruptcy, the Court is clearly directed by statute to disallow duplicative time entries under 11 U.S.C. § 330 (a)(4)(a)(i) and to review the reasonableness of the requested fees under 11 U.S.C. § 330(a)(3). Therefore, this argument lacks merit.
2:00 PM
Ultimately, Plaintiff’s rigorous defense of its requested fees fails as a matter of law because of the following: (1) there is no mandatory fee-shifting statute; (2) the Bankruptcy Code directs the Court to review the reasonableness of fees; and (3) Plaintiff is requesting fees pursuant to the discretionary condition of the Court. This final point merits brief elaboration. In reviewing the Motion, the Court thought it equitable to condition the setting aside of default on the reimbursement by Defendant of reasonable costs incurred as a result of Defendant’s delay. Instead of simply selecting a figure that the Court thought was fair, the Court made the decision to allow the parties to submit evidence and brief the issue of the appropriate payment. The Court could have decided to simply grant the motion or choose a figure itself. There is no mandatory fee-shifting statute and the Plaintiff has no entitlement to any fees.
In light of the highly adversarial nature of the briefing surrounding this fee dispute, and in consideration of the evidence and arguments of both parties, the Court elects to modify its previous instructions and will, instead, condition the setting aside of Defendant’s default on Defendant’s payment of $5,000 to Plaintiff. The Court believes that this number represents equitable and just compensation given Defendant’s delay in seeking to set aside default.
APPEARANCES REQUIRED.
07/12/2017
At the prior hearing on the Defendant’s motion to set aside default ("Motion"), the Court indicated it would grant the motion conditioned upon the Defendant paying Plaintiff’s fees incurred for opposing the Motion and for preparation of the Motion for Default Judgment that would become moot as a result of the order setting aside the default, subject to any objection from Defendant as to the reasonableness of the fees.
The Court required that a declaration from Plaintiff re: fees would be due by June 28, 2017, and that any response/objection to the fees would be due by July 7, 2017. The Declaration re: Fees and Objection were timely filed.
The Court has reviewed the billing records provided by Plaintiff and finds several entries to be unreasonably high. Specifically,
2:00 PM
The duplicative and excessive entries for research regarding elements, etc. of default judgments constitute two separate entries of approximately 7 hours each. The total for these two entries is thus approximately 14 hours regarding research for a default judgment motion on April 13 and April 14. The Court finds these research amounts unreasonably high. ($1,762.50 + $1,675=
$3,437.50)
A related conference between the associate preparing the motion and the partner on the case, Mr. Franklin Fraley, for a total of nearly 5 hours on April 19 appears excessive. ($1,237.50)
The April 21 revisions and conference with Mr. Fraley for a total of 5.2 hours
inappropriately lumps amounts for distinct tasks together and warrants striking as well. ($1,300)
The May 9 and 10 entries to review/analyze for preparation of the opposition to the Defendant’s Motion are duplicative and should be stricken. ($1,250 +
$1,125=$2,375)
The May 24 entries that total 7.75 hours improperly lump tasks making it difficult to gauge the reasonableness of the fees. Overall the Court finds that the amount billed for the tasks set forth appear unreasonably high. This entry shall be stricken. ($1,937.50)
Striking the above amounts, the Court finds that a reduction of $10,287.50 is appropriate.
Based on the foregoing, the Court is inclined to find the remaining figure of $8,673.75 to be a reasonable amount of fees for the actions taken by Plaintiff in opposing the Motion and in drafting the Motion for Default Judgment.
APPEARANCES REQUIRED.
Debtor(s):
Douglas Jay Roger Represented By
2:00 PM
Summer M Shaw
Defendant(s):
Don Cameron Burns Represented By Don C Burns
Movant(s):
Don Cameron Burns Represented By Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
From: 8/31/16, 11/2/16, 1/11/17, 3/8/17, 6/7/17, 8/2/17 Also #23 & #24
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Represented By Don C Burns
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar
2:00 PM
Carmela Pagay Franklin R Fraley Jr
12:30 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
From: 5/4/17 EH
Docket 13
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
12:30 PM
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
HOLDING DATE
From: 5/4/17 EH
Docket 44
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
2:00 PM
#3.00 OSC re Order To Docket Information In Support Of Bodily Detention Request Under Seal; And order Issuing Bodily Detention Request for Marla Perez
EH
Docket 68
- NONE LISTED -
Debtor(s):
Denise Barrow Pro Se
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
From: 6/21/17 EH
Docket 263
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
2:00 PM
(Holding Date) From: 7/31/17 EH
Docket 82
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
Charles W Daff (TR) Represented By Toan B Chung
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
EH
Docket 33
Service is Proper Opposition: Limited
Parties to discuss possible adequate protection terms. APPEARANCES REQUIRED.
Debtor(s):
Diana Cescolini Represented By John F Brady
Movant(s):
U.S. BANK NATIONAL Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 6/27/17 EH
Docket 40
- NONE LISTED -
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMBER CHRISS
EH
Docket 53
"It is appropriate for bankruptcy courts to avoid incursions into family law matters out of considerations of court economy, judicial restraint, and deference to our state court brethren and their established expertise in such matters." In re Stanwyck, 2008 WL 8448839 at *4 (B.A.P. 9th Cir. 2008) (quoting In re MacDonald, 755 F.2d 715, 717 (9th Cir. 1985)). Furthermore, 11 U.S.C. § 362(b)(2)(A)(ii)-(iv) provides exceptions to the automatic for certain matters that are within the scope of the motion.
There are, however, requests contained within the motion that extend beyond the scope of the exceptions and the Stanwyck decision, requests that involve "the division of property that is property of the estate." The appropriate balance is to allow the state court to conduct equitable distribution proceedings in state court, while this Court retains jurisdiction over distributions from, and claims against, the estate. See, e.g., In re Robbins, 964 F.2d 342, 345-46 (4th Cir. 1992) ("[T]he bankruptcy court correctly placed equitable distribution disputes in the category of cases in which state courts have a special expertise and for which federal courts owe significant deference . . . .
Other courts that have considered the issue of lifting an automatic stay in order to let equitable distribution proceedings conclude in state court have sensibly done so while retaining jurisdiction to make the subsequent distributions from the estate."); In re Roger, 539 B.R. 837, 845 (C.D. Cal. 2015) ("According to the court in Curtis, the most important factor in determining whether to grant relief from the automatic stay to
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permit litigation against the debtor in another forum is the effect of such litigation on the administration of the estate."). The factors the Court should consider on a motion for relief from stay to proceed in a non-bankruptcy forum are the Curtis factors. See, e.g., In re Roger, 539 B.R. 837, 844-45 (C.D. Cal. 2015). The application of these factors in a divorce dissolution proceeding, such as this, generally results in a finding that granting relief from stay is proper. See, e.g., In re Taub, 438 B.R. 39, 45-50 (Bankr. E.D.N.Y. 2010) (applying Sonnax factors, which are identical to the Curtis factors).
In accordance with the legal standard outlined above, the Court is inclined to GRANT the motion. Movant will be allowed to proceed in state court to a final judgment. The stay will remain in effect with respect to the enforcement of any judgment against Debtor or property of the bankruptcy estate, subject to the exceptions outlined in § 362(b)(2)(A)(ii)-(iv), and this Court retains jurisdiction over distributions from, and claims against property, property of the estate.
Movant’s motion does not make clear, however, what steps Movant seeks to take if granted relief from stay. Parties to discuss status of divorce proceeding.
APPEARANCES REQUIRED.
Debtor(s):
Bryan D. Chriss Represented By Michael Smith Cynthia L Gibson Sundee M Teeple
Movant(s):
Amber Chriss Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 11
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Brenda Arlene Lee Represented By David Lozano
Movant(s):
Wells Fargo Bank, N.A., d/b/a Wells Represented By
Jennifer H Wang
Trustee(s):
Steven M Speier (TR) Pro Se
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MOVANT: NISSAN MOTOR ACCEPTANCE CORPORATION
EH
Docket 21
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Yvonne L Sanchez Pro Se
Joint Debtor(s):
Oscar Sanchez Pro Se
Movant(s):
NISSAN MOTOR ACCEPTANCE Represented By
Michael D Vanlochem
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Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
MOVANT: OSCAR AVILA
EH
Docket 8
APPEARANCES REQUIRED.
Debtor(s):
Oscar Avila Represented By
Sanaz S Bereliani
Movant(s):
Oscar Avila Represented By
Sanaz S Bereliani Sanaz S Bereliani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
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MOVANT: ELIZABETH JUCABAN TUASON
EH
Docket 18
The Court is inclined to DENY the motion. First of all, the Court notes that a motion to continue the automatic stay requires fourteen days notice, but, here, Debtor has only provided twelve days notice. Second, the motion does not provide clear and convincing evidence regarding Debtor’s financial situation, specifically with regard to: (1) how much money was sent to Debtor’s brother and whether further money might be sent; (2) whether Debtor may continue to assist her children (Debtor’s schedules state that her adult son and daughter in law live with her, along with two grandchildren); (3) when she stopped work (evidence presented indicates May 17, 2017, however Trustee’s motion to dismiss was filed prior to May 17); and (4) why Debtor did not oppose Trustee’s motion to dismiss.
APPEARANCES REQUIRED.
Debtor(s):
Elizabeth Jucaban Tuason Represented By Brad Weil
Movant(s):
Elizabeth Jucaban Tuason Represented By Brad Weil
10:00 AM
Trustee(s):
Brad Weil Brad Weil
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: MORGAN PICKS TWO LLC
EH
Docket 11
Service is Proper Opposition: None
The Court is inclined to GRANT the motion, as the subject property was sold at foreclosure prior to the petition date and the deed was recorded timely pursuant to state law. Movant’s alternative request, that the automatic is not applicable under § 362(b)(22)-(23), lacks merit because Movant has not commenced any eviction, unlawful detainer action, or similar proceeding, nor do Debtors reside at the property under a lease or rental agreement, and, therefore, the alternative request is DENIED.
APPEARANCES REQUIRED.
Debtor(s):
Timothy Marvin Witherspoon Represented By Steven A Alpert
Joint Debtor(s):
Deidra Latrece Witherspoon Represented By Steven A Alpert
10:00 AM
Movant(s):
Morgan Picks Two, LLC Represented By Barry L O'Connor
Trustee(s):
Lynda T. Bui (TR) Pro Se
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MOVANT: CLAUDIA ACEVEDO
EH
Docket 8
The Court is inclined to DENY the motion. Debtor bears the burden to prove, through clear and convincing evidence, that the case was not filed in bad faith. As is outlined in U.S. Bank’s opposition, certain real property located at 16462 Ridge Field Dr., Riverside, CA 92503, has been the subject of multiple unauthorized grant deeds and at least seven bankruptcy cases since 2010. Moreover, secured creditors were not served pursuant to Rule 7004. For those reasons, and as otherwise set forth in the opposition, Debtor has failed to demonstrate that this case was filed in good faith pursuant to § 362(c)(3)(B).
APPEARANCES REQUIRED.
Debtor(s):
Claudia Acevedo Represented By Richard McAndrew
Movant(s):
Claudia Acevedo Represented By Richard McAndrew
Trustee(s):
Steven M Speier (TR) Pro Se
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MOVANT:U.S. BANK NATIONAL ASSOCIATION
EH
Docket 23
8/29/2017
This matter is related to matters #9 and 11. Please see the corresponding tentative rulings for further information.
8The motion at issue relates to the foreclosure sale of certain property located at 16462 Ridge Field Drive, Riverside, CA 92503 (the "Property"). A brief history of the property is necessary to understand the respective rights in the Property.
On June 23, 2006, Carlos Vera ("Vera") obtained the property through a loan from Wells Fargo. On October 20, 2006, Vera executed a grant deed, conveying the Property to Jose Guerrero ("Guerrero"). The deed was recorded on May 25, 2007. A notice of default was issued on January 26, 2009, and recorded on January 29, 2009. During the first half of 2010, Guerrero filed three bankruptcies, all of which were summarily dismissed, and Vera filed one, in which Wells Fargo obtained relief from stay.
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On May 23, 2012, Guerrero executed a grant deed, conveying the Property to himself and Jose Jimenez ("Jimenez") as joint tenants, one day before a scheduled foreclosure sale. Jimenez had, at the time, a pending Chapter 13 bankruptcy. On August 8, 2012, Guerrero executed another grant deed, conveying his interest to HACBED, Inc. ("HACBED"). The grant deed was recorded on January 19, 2013.
On October 16, 2016, Guerrero filed another bankruptcy, which was, again, summarily dismissed. A second foreclosure sale was later scheduled for June 19, 2017. Earlier, on May 14, 2017, HACBED executed a warranty deed, transferring a 10% interest in the Property to Debtor. The warranty deed was recorded on June 29, 2017. Less than three weeks later, Debtor filed the instant bankruptcy case the same day as the foreclosure, which was summarily dismissed. The bankruptcy case was filed a matter of minutes after the recording of the deed from HACBED and a matter of minutes before the scheduled foreclosure sale. Debtor faxed a notice of the bankruptcy filing to Wells Fargo three minutes before the scheduled foreclosure sale. Debtor also states that telephonic notice was provided to Wells Fargo prior to the sale, but a specific time is not provided.
After the foreclosure sale was held, on June 27, 2017, GW filed an unlawful detainer case in state court. Debtor requests the reconveyance of the property, dismissal of the unlawful detainer action, $10,000 in punitive damages, and $2,755 in actual damages.
11 U.S.C. § 362(d) states:
(d) On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided, under subsection (a) of this section such as by terminating, annulling, modifying, or condition such stay –
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(emphasis added); see also In re Schwartz, 954 F.2d 569, 573 (9th Cir. 1992) ("If a creditor obtains retroactive relief under section 362(d), there is no violation of the automatic stay, and whether violations of the stay are void or voidable is not at issue.").
The BAP, in In re Fjeldsted, noted the absence of a clear standard for annulment of the automatic stay. 293 B.R. 12, 21 (B.A.P. 9th Cir. 2003) ("There is less appellate clarity, however, in enunciating a test for retroactive stay relief. Inconsistent standards have thus developed, which run the gamut from such relief being justified only in ‘extreme circumstances’ to giving the court ‘wide latitude’ to ‘balance the equities’ on a case-by-case basis."). The BAP’s most recent announcement of the standard for annulment of the automatic stay stated the following:
Determining whether cause exists to annul the stay is a case-by-case inquiry based on a balance of the equities. In conducting this inquiry the bankruptcy court, among other factors, should consider whether the creditor knew of the bankruptcy when violating the stay and whether the debtor’s conduct was unreasonable, inequitable or prejudicial to the creditor.
In Fjeldsted, we approved additional factors for consideration in assessing the equities. The twelve nonexclusive factors are: (1) number of filings; (2) whether, in a repeat filing case, the circumstances indicate an intention to delay and hinder creditors; (3) a weighing of the extent of prejudice to creditors or third parties if the stay relief is not made retroactive, including whether harm exists to a bona fide purchaser; (4) the debtor’s overall good faith (totality of circumstances test); (5) whether creditors knew of stay but nonetheless took action, thus compounding the problem; (6) whether the debtor has complied, and is otherwise complying, with the Bankruptcy Code and Rules; (7) the relative ease of restoring parties to the status quo ante; (8)
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the costs of annulment to debtors and creditors; (9) how quickly creditors moved for annulment, or how quickly debtor moved to set aside the sale or violative conduct; (10) whether, after learning of the bankruptcy, creditors proceeded to take steps in continued violation of the stay, or whether they moved expeditiously to gain relief; (11) whether annulment of the stay will
cause irreparable injury to the debtor; and (12) whether stay relief will promote judicial economy or other efficiencies. The Panel in Fjeldsted cautioned that the twelve factors are merely a framework for analysis and not a scorecard, and that in any given case, one factor may so outweigh the others as to be dispositive.
In re Estavan Capital LLC, 2015 WL 7758494 at *5 (B.A.P. 9th Cir. 2015) (citations and quotations omitted).
While Fjeldsted cautioned that the enumerated factors are not a scorecard, it is clear that the majority of the factors, including, in particular, Debtor’s lack of good faith, weigh in favor of annulling the stay. One factor that is not entirely clear is when, and by what method, Wells Fargo learned of the bankruptcy filing. According to Wells Fargo, it did not learn of the bankruptcy until eighteen days after dismissal of the bankruptcy (coincidentally, the day the case was dismissed) and Wells Fargo asserts that it learned of the bankruptcy from the third-party purchaser. On the other hand, Debtor has asserted that she faxed notice of the bankruptcy to Wells Fargo three minutes before the scheduled foreclosure sale. Finally, "Wells Fargo Home Mortgage" was listed on Debtor’s creditors matrix and received various notices in the case, while the third-party purchaser was not listed and does not appear to have received any direct notice of the bankruptcy.
Putting aside the issue whether Wells Fargo learned of the bankruptcy, at most, a few minutes before the scheduled foreclosure, the remainder of the factors strongly lean towards annulment of the stay. First and foremost, Debtor’s actions in receiving a fractionalized interest, recording the transfer, and faxing Wells Fargo minutes before the foreclosure sale were clearly "unreasonable, inequitable or prejudicial to the creditor." These actions indicate an intention to "hinder and delay" creditors, are
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indicative of bad faith, and, if allowed to stand, would cause prejudice to the bona fide purchaser. Furthermore, the instant bankruptcy case, as well as several previous bankruptcy cases affecting the property after a notice of default was first recorded (in 2009), was summarily dismissed for failure to comply with the Bankruptcy Code and Rules. Overall, this web of transfers and bankruptcy filings have helped to delay foreclosure on the subject property for nearly eight years. Weighing against these considerations is Debtor’s assertion that a fax was sent to Wells Fargo alerting them of the bankruptcy three minutes before the foreclosure sale. It is not clear that this fax was directly to an appropriate department or individual, and, even if it was, it is not clear that the fax was sent early enough for any appropriate action to be taken.
Moreover, the evidence presented by Debtor as to telephonic notice of the bankruptcy filing is lacking in detail and is not reliable. Therefore, after considering the Fjeldsted factors asserted above, the Court is inclined to ANNUL the automatic stay.
To the extent Movant requests further relief that is not retroactive in nature, the Court will DENY that relief, including in rem relief, because the case has already been dismissed. The Court does not have jurisdiction to entertain prospective requests for relief filed after the dismissal of the bankruptcy case.
APPEARANCES REQUIRED.
Debtor(s):
Claudia Acevedo Represented By Richard McAndrew
Movant(s):
U.S. Bank National Association, as Represented By
Alexander K Lee
Trustee(s):
Karl T Anderson (TR) Pro Se
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From: 8/23/17 EH
Docket 15
PROCEDURAL BACKGROUND
On June 19, 2017, Claudia Acevedo ("Debtor") filed a Chapter 7 voluntary petition. On July 7, 2017, the case was dismissed for failure to file case commencement documents. On July 31, 2017, Debtor filed a motion for remedies for violation of stay by GW San Diego Properties, LLC ("GW"), and Wells Fargo Bank, National Association ("Wells Fargo"). On August 9, 2017, Wells Fargo filed its opposition.
FACTUAL BACKGROUND
The motion at issue relates to the foreclosure sale of certain property located at 16462 Ridge Field Drive, Riverside, CA 92503 (the "Property"). A brief history of the property is necessary to understand the respective rights in the Property.
On June 23, 2006, Carlos Vera ("Vera") obtained the property through a loan from
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Wells Fargo. On October 20, 2006, Vera executed a grant deed, conveying the Property to Jose Guerrero ("Guerrero"). The deed was recorded on May 25, 2007. A notice of default was issued on January 26, 2009, and recorded on January 29, 2009. During the first half of 2010, Guerrero filed three bankruptcies, all of which were summarily dismissed, and Vera filed one, in which Wells Fargo obtained relief from stay.
On May 23, 2012, Guerrero executed a grant deed, conveying the Property to himself and Jose Jimenez ("Jimenez") as joint tenants, one day before a scheduled foreclosure sale. Jimenez had, at the time, a pending Chapter 13 bankruptcy. On August 8, 2012, Guerrero executed another grant deed, conveying his interest to HACBED, Inc. ("HACBED"). The grant deed was recorded on January 19, 2013.
On October 16, 2016, Guerrero filed another bankruptcy, which was, again, summarily dismissed. A second foreclosure sale was later scheduled for June 19, 2017. Earlier, on May 14, 2017, HACBED executed a warranty deed, transferring a 10% interest in the Property to Debtor. The warranty deed was recorded on June 29, 2017. Less than three weeks later, Debtor filed the instant bankruptcy case the same day as the foreclosure, which was summarily dismissed. The bankruptcy case was filed a matter of minutes after the recording of the deed from HACBED and a matter of minutes before the scheduled foreclosure sale. Debtor faxed a notice of the bankruptcy filing to Wells Fargo three minutes before the scheduled foreclosure sale. Debtor also states that telephonic notice was provided to Wells Fargo prior to the sale, but a specific time is not provided.
After the foreclosure sale was held, on June 27, 2017, GW filed an unlawful detainer case in state court. Debtor requests the reconveyance of the property, dismissal of the unlawful detainer action, $10,000 in punitive damages, and $2,755 in actual damages.
DISCUSSION
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11 U.S.C. § 362(a)(3), (4) states
Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)
(3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of –
(3) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate
(5) any act to create, perfect, or enforce any lien against property of the estate
Debtor argues that Wells Fargo and GW violated the automatic stay through holding a post-petition foreclosure sale, and, subsequently filing an unlawful detainer action, respectively. Wells Fargo raises the following four arguments in opposition to Debtor’s motion: (1) that Debtor did not have an interest in the Property; (2) there is cause for annulment of the automatic stay; (3) Wells Fargo’s actions were not willful; and (4) no damages were suffered.
Property Interest
The basis for Wells Fargo’s argument that Debtor did not have an interest in the Property is unclear. It appears to hinge on the following assertion, from page 7 of the opposition: "Vera transferred his entire interest to Guerrero, who in turn transferred his entire interest to himself and Jimenez as joint tenants. Therefore, Guerrero could not transfer the entire interest to HACBED without Jimenez also transferring his joint tenant interest." The grant deed transferring an interest in the Property to HACBED does not, however, purport to transfer the entire interest in the Property, but, instead, states that the grantor, Guerrero, is transferring the entirety of his interest. Even if Guerrero had attempted to also transfer the interest of Jimenez, that would not render the entire grant deed void, but would simply result in a finding that the attempt to transfer Jimenez’s interest was void.
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Annulment of Automatic Stay
11 U.S.C. § 362(d) permits a court to retroactively annul, modify, or condition the automatic stay. See, e.g., In re Schwartz, 954 F.2d 569, 572-73 (9th Cir. 1992). As Wells Fargo asserts, if a court retroactively annuls the automatic stay with respect to specific actions, then those actions would cease to be a violation of the automatic stay.
Wells Fargo sets forth, in detail, its argument why cause exists for annulment of the automatic stay. An opposition to a motion is not, however, the appropriate place to request that relief. Because of due process concerns, the Court will continue Debtor’s motion for sanctions and equitable relief to allow Wells Fargo to file, and set for hearing, a motion to annul the stay.
GW
GW has not filed any opposition to the motion under consideration. Debtor contends that GW violated the automatic stay through the filing of an unlawful detainer action eight days after Debtor’s commencement of the instant bankruptcy proceeding. If the filing of the unlawful detainer action is, in fact, a violation of the automatic stay, and, therefore, void, the consequence would not be a reconveyance of the Property. To obtain a reconveyance of the Property, Debtor must establish that the foreclosure sale conducted by Wells Fargo was a violation of the automatic stay. Nevertheless, the remainder of Debtor’s requested remedies may be applicable if Debtor is successful in its motion with regard to GW, but unsuccessful in its motion with regard to Wells Fargo.
As noted by Wells Fargo, however, § 362(k) imposes a requirement that a violation be willful in order for an aggrieved debtor to recover damages. 11 U.S.C. § 362(k)(1).
Generally, the willfulness requires the presence of two factors: (1) the party knows of
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the automatic stay; and (2) the actions taken in violation of the automatic were intentional. See, e.g., Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210, 1215 (9th Cir. 2002). Here, there is no evidence in the record that GW knew of the bankruptcy filing. Instead it appears that Debtor only notified Wells Fargo of the commencement of the bankruptcy. Therefore, Debtor has failed to provide evidence establishing that the requirements of § 362(k)(1) are satisfied.
Debtor also requests that GW "be ordered to dismiss the unlawful detainer case." As noted by Debtor, an act that violates the automatic stay is void. See, e.g., In re Schwartz, 954 F.2d 569, 571 (9th Cir. 2002). "This rule applies to judicial
proceedings." Leetien, 309 F.3d at 1215; see also In re Gruntz, 202 F.3d 1074, 1082 (9th Cir. 2000). Therefore, GW’s filing of the unlawful detainer action may be void, and the state court may have lacked jurisdiction over the unlawful detainer action. See In re Gruntz, 202 F.3d at 1083 ("[A] reverse Rooker-Feldman situation is presented when state courts decide to proceed in derogation of the stay, because it is the state court which is attempting impermissibly to modify the federal court’s injunction.). If the state court lacked jurisdiction to hear the unlawful detainer, then the unlawful detainer action must be dismissed.
If Wells Fargo is successful, however, in annulling the stay, however, then the foreclosure sale of June 19, 2017, will be valid. If the foreclosure sale is valid, then it would appear that the automatic stay provisions cited by Debtor, § 363(a)(3) & (5), would not be applicable, since the Property, at the time of the filing of the unlawful detainer action, would not have been property of the debtor or property of the estate. Furthermore, § 362(a)(1) would be inapplicable, because the foreclosure sale having been held post-petition, GW’s unlawful detainer action is not an action that "could have been commenced before the commencement" of the bankruptcy case. Therefore, the validity of the unlawful detainer action filed by GW depends upon Wells Fargo’s success in obtaining annulment of the automatic stay.
TENTATIVE RULING
The Court is inclined to CONTINUE the matter for Wells Fargo to file a motion to
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annul the automatic stay.
APPERANCES REQUIRED.
Debtor(s):
Claudia Acevedo Represented By Richard McAndrew
Movant(s):
Claudia Acevedo Represented By Richard McAndrew
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:16-01225 Cambridge Medical Funding Group II, LLC v. Allied Injury Management,
From: 11/1/16, 12/6/16, 1/31/17, 2/28/17, 3/28/17, 5/30/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
John C. Larson Pro Se
Allied Injury Management, Inc. Represented By Alan W Forsley
Plaintiff(s):
Cambridge Medical Funding Group Represented By
Kenneth Hennesay
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
2:00 PM
EH
Docket 266
BACKGROUND
On May 11, 2016, Debtor filed a Chapter 11 voluntary petition. Debtor operated a medical account receivable collection service. On November 30, 2016, a Chapter 11 trustee was appointed.
On June 2, 2017, UST filed a motion to dismiss the Chapter 11 case for failure to pay quarterly fees of either $9,750 or $6,825, which were delinquent as of May 1, 2017. On June 13, 2017, the Chapter 11 trustee filed opposition to the motion to dismiss.
DISCUSSION
11 U.S.C. § 1112(b) provides that a case may be dismissed or converted for cause. Section 1112(b)(4) enumerates certain examples of cause, including "failure to pay any fees or charges required under chapter 123 of title 28." 28 USC § 1930(a)(6) imposed the statutory fees for Chapter 11 cases. Therefore, cause exists to convert the
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case when Chapter 11 quarterly fees are not paid.
The Chapter 11 trustee states, however, that $6,000 of the past due fees were paid on June 12, 2017, and that the Chapter 11 trustee will pay the remaining balance.
TENTATIVE RULING
Chapter 11 trustee to inform the Court whether the Chapter 11 quarterly fees have been paid in full.
APPEARANCES REQUIRED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
United States Trustee (RS) Represented By Michael J Bujold
Abram Feuerstein esq Everett L Green Mohammad Tehrani
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
From: 6/7/16, 8/30/16, 9/14/16, 10/20/16, 10/25/16, 12/6/16, 1/10/17, 2/28/17, 3/28/17, 5/30/17
EH
Docket 7
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
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Docket 315
08/30/2017
The total statutory fees requested by the Trustee and Predecessor Trustee equals
$391,169.82. However, based on the Court’s recalculation of amounts permitted to be paid based on amounts distributed, the cap of funds available for distribution to the Trustees is $390,985.32. The discrepancy is apparently created because, although the Summary of the Trustee Final Report indicates total receipts of $12,257,844.09, the Trustee’s computation of compensation indicates that total disbursements were
$12,263,994.09. To address this, the Court has reduced the fee for each Trustee by the pro-rata percentage of the $184.50 difference. The Trustee expenses and Applications for compensation by the Trustee’s professionals are otherwise allowed and approved as follows:
Fees $216,897.30
Expenses $495
Fees $174,088.02
Expenses $387.64
Fees $4,665 ($124,737 already paid)
Expenses $0
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Fees $17,950
Expenses $156.32
Fees $34,481.50
Expenses $628.80
APPEARANCES REQUIRED.
Debtor(s):
1st Centennial Bancorp Represented By Mark C Schnitzer Robert S Cooper
Trustee(s):
Larry D Simons (TR) Represented By Leonard M Shulman William K Mills
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Docket 102
08/30/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee and his professionals has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, and the applications of the Trustee’s professionals, the following administrative claims will be allowed:
TRUSTEE
Fees $2,702.93
Expenses $0
COUNSEL FOR TRUSTEE Fees $17,839.97
Expenses $935.38
ACCOUNTANT
Fees $1,305.03
Expenses $19.26
APPEARANCES WAIVED. The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
Debtor(s):
William G Decker Represented By John M Boyko
11:00 AM
Trustee(s):
Howard B Grobstein (TR) Represented By Nina Z Javan
Meghann A Triplett
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Docket 35
08/30/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 1,365.27
APPEARANCES WAIVED. The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
Debtor(s):
Blanca Alicia Alvillar-Mamlouk Represented By
William Radcliffe
Joint Debtor(s):
Debbie Leon-Alvillar Represented By William Radcliffe
Trustee(s):
Howard B Grobstein (TR) Pro Se
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Docket 91
08/30/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee and his professionals has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, and the applications of the Trustee’s professionals, the following administrative claims will be allowed:
TRUSTEE
Fees $6,000
Expenses $153
COUNSEL FOR TRUSTEE
Fees $25,000
Expenses $1,302.67
ACCOUNTANT
Fees $1,377
Expenses $231.90
APPEARANCES WAIVED. The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
Debtor(s):
Kenneth Edward Peardon Represented By Javier H Castillo
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Trustee(s):
Todd A. Frealy (TR) Represented By Lindsey L Smith
Levene Neale Bender Yoo & Brill LLP Irving M Gross
Anthony A Friedman
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CASE DISMISSED 3/6/17
From: 4/6/17, 4/26/17, 8/2/17 EH
Docket 70
08/30/2017
On July 18, 2017, the UST filed a Supplemental Declaration of Hee Chang Choi. The Supplemental Declaration asserts unequivocally that it was Sandra Cooper’s idea to file the bankruptcy case, that the bankruptcy filing was made in connection with services paid by the Debtor and her husband to Ms. Cooper in exchange for loan modification services, and that Ms. Cooper filed the bankruptcy without the authorization of the Debtor and her husband.
Ms. Cooper has failed to respond to the Supplemental Declaration. Based on the facts set forth in the Declarations of the Debtor and her husband, the Court finds that Ms. Cooper performed bankruptcy petition preparer services and is a BPP within the meaning of §110. Thus, for the reasons set forth in the Motion of the UST, the Court’s tentative ruling is that the Motion be granted and that Ms. Cooper be ordered to:
Pay statutory damages of $2,000,
Disgorge $2,000 paid to Ms. Cooper by the Debtor and her husband; and
Pay fines directly to the UST in the sum of $21,000.
APPEARANCES REQUIRED.
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04/26/2017
BACKGROUND
On May 16, 2016 ("Petition Date"), Jina Soo Choi ("Debtor") filed her petition for chapter 13 relief. On August 4, 2016, the case was converted to a case under chapter 7. On January 6, 2017, the Debtor moved the Court for an order dismissing her case. The case was dismissed on March 6, 2017.
On March 10, 2017, the Office of the United States Trustee ("UST") filed its Motion of United States Trustee For An Order Disgorging Fees, Assessing Damages, And Imposing Fines And Against Bankruptcy Petition Preparer Sandra Cooper Pursuant to 11 U.S.C. § 110 ("Motion"). The Motion was amended on March 29, 2017.
On April 5, 2017, Sandra Cooper ("Cooper") filed her opposition to the Motion ("Opposition"). On April 19, 2017, the UST filed its reply to the Opposition ("Reply").
DISCUSSION
The Motion asserts that Cooper violated 11 U.S.C. § 110 by failing to disclose her identity as required by statute, by executing the Debtor’s signature, and by failing to furnish copies of the filed bankruptcy documents to the Debtor. Based thereon, the UST requests disgorgement of fees, statutory damages of $2,000 pursuant to § 110(i), and payment of fines to the UST in the total sum of $21,000 ($6,000 for individual violations in failing to disclose her identity as required under § 110(b)(1) and 110(c) (1), as tripled pursuant to §110(l)(1) for a total of $18,000, in addition to $3,000 for failing to furnish copies of the bankruptcy documents to the Debtor as required under
§110(d)). (Note: the Reply indicates that the UST will not pursue an additional $3,000 in fines requested by the Motion for executing documents on behalf of the Debtor unless the Court determines that an evidentiary hearing is appropriate).
By her Opposition, Cooper disputes that she is a bankruptcy petition preparer (a "BPP"). Cooper asserts that her assistance was limited to filing the bankruptcy petition ("walking in his paperwork") on behalf of Hee Chang Choi (the Debtor’s husband). (Opposition at ¶ 5). Cooper further asserts that she never met the Debtor and instead that she was asked to assist the Debtor’s husband with obtaining a loan modification (Id. at ¶¶2-3). Cooper disputes the allegation that she received any
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money either from the Debtor or from the Debtor’s husband (Id. at ¶ F) and instead repeatedly asserts that she was only assisting the Debtor’s husband on the request of an unidentified third party who had been helping the Debtor’s husband with a "Free and Clear" program. (Cooper Declaration).
In In re Reynoso, the Ninth Circuit provided examples of cases in which a party has been properly deemed a bankruptcy petition preparer. As the Ninth Circuit explained,
It goes without saying that the customer must provide data to the preparer, and the customer's role in printing or otherwise reproducing the forms before filing does not alter the role of the preparer.
Moreover, § 110 does not require that bankruptcy petition preparers have in-person interactions with their customers. Cf. Ferm v. U.S. Trustee (In re Crowe ), 243 B.R. 43, 49-50 (9th Cir. BAP 2000) (holding that the author of an instructional book on bankruptcy petitions who guaranteed buyers of the book that he would complete their forms for free if they were unable to do so themselves was, in fact, presenting himself as a bankruptcy petition preparer as defined by
§ 110(a)(1)), aff'd, 246 F.3d 673 (9th Cir.2000) (unpublished table decision); In re Doser, 281 B.R. 292, 303-04 (Bankr.D.Idaho 2002) (reasoning that a franchisor who receives information that was solicited in a face-to-face interaction between the franchisee and the customer and uses that information to prepare bankruptcy documents, but never meets with the customer directly, is a bankruptcy petition preparer), aff'd, 412 F.3d 1056.
In re Reynoso, 477 F.3d 1117, 1123–24 (9th Cir. 2007).
The Cooper Opposition and supporting declaration are vague as to the details of how or why Cooper was engaged to work with the Debtor’s husband. Cooper repeatedly makes reference to a third party that was a point of contact between the Debtor’s husband and her. However, this third party is never identified. Additionally, Cooper indicates she was only helping the alleged third party but disputes that she ever received money in connection with her assistance and disputes that she did anything other than "walk in" the petition documents to the Court. Cooper’s assertions, however, are not credible. There is no indication of the nature of Cooper’s
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relationship with the alleged third party and no detail as to why she would assist the Debtor’s husband or the alleged third party agent without any compensation. The Choi Declaration provided by the UST makes reference to a third party who the Debtor asserted was a patient of the Debtor’s husband. The Debtor’s declaration asserts that the patient referred her husband to Cooper for the purpose of negotiating a loan modification. (Mot. at Exh. 1, Choi Decl. ¶7). Cooper correctly points out that the information regarding the third party/patient is hearsay. However, the remainder of the Choi declaration unequivocally identifies Cooper, and only Cooper, as the point of contact for all communications regarding the filing of the bankruptcy for the Debtor. (Id. at ¶¶8-19).
As to the remaining allegations of the Motion, Cooper by her Opposition has specifically denied all of the allegations of the Motion, including that she executed the petition documents for the Debtor. In an effort to controvert the allegation that she did not disclose her identity, Cooper notes that she was asked for a copy of her driver’s license when filing the petition and provided it. Cooper’s willingness to provide her Driver’s license to the clerk when filing the petition, however, does not overcome her failure to provide specific identifying information on the petition itself as required pursuant to § 110, such as an address and social security number. Thus, assuming the Court finds that Cooper is a BPP within the meaning of the statute, the Court is inclined to GRANT the Motion pursuant to the reduced figure requested by the UST in its Reply.
TENTATIVE RULING
APPEARANCES REQUIRED.
Debtor(s):
Jina Soo Choi Represented By
Nicholas S Nassif
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani Everett L Green
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Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
Docket 148
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Movant(s):
Hilder & Associates Represented By
Lei Lei Wang Ekvall
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
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EH
Docket 56
08/30/2017
BACKGROUND
On March 6, 2017, Armando Morales and Alicia Maldonado Jimenez (collectively, the "Debtors") filed their petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the Debtors’ estate is their ownership interest in real property located at 9288 Martha Way, Riverside, CA 92503 (the "Property"). Prepetition, the Property was the subject of a lawsuit (the "State Court Action") commenced by Martha and Eduardo Guerrero (the "Guerreros"). The State Court Action concerns a disputed contract for the sale of the Property. The Guerreros filed for relief from the automatic stay to pursue the State Court Action where they have obtained entry of defaults against the Debtors. The Debtors opposed the Guerreros’ Motion for Relief from Stay, which the Trustee joined. In his Joinder, the Trustee asserted that he had reached an agreement with the Debtors to sell the Property in exchange for a carve-out to the Estate from the Debtors’ Homestead Exemption (in exchange for a waiver from the Trustee of the requirement that the Debtors reinvest homestead proceeds). The hearing on the Motion for Relief from Stay is currently set for October 24, 2017, at 11:00 a.m.
Now, the Debtors, the Guerreros, and the Trustee seek to resolve their disputes by way of settlement. On August 9, 2017, the Trustee filed his Motion to Approve Compromise under Rule 9019 (the "Motion"). Service was proper and no opposition has been filed.
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DISCUSSION
APPROVAL OF COMPROMISE PURSUANT TO RULE 9019
Rule 9019(a) authorizes the bankruptcy court to approve a compromise or settlement on the trustee's motion and after notice and a hearing. The bankruptcy court must consider all "factors relevant to a full and fair assessment of the wisdom of the proposed compromise." Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424, 88 S. Ct. 1157, 20 L. Ed. 2d 1 (1968). In
other words, the bankruptcy court must find that the settlement is "fair and equitable" in order to approve it. Martin v. Kane (In re A & C Props.), 784 F.2d 1377, 1381 (9th Cir. 1986).
In conducting this inquiry, the bankruptcy court must consider the following
factors:
Id.
the probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises.
The bankruptcy court enjoys broad discretion in approving a compromise
because it "is uniquely situated to consider the equities and reasonableness [of it] . . .
." United States v. Alaska Nat'l Bank (In re Walsh Construction, Inc.), 669 F.2d 1325, 1328 (9th Cir. 1982). As stated in A & C Props.:
The purpose of a compromise agreement is to allow the trustee and the creditors to avoid the expenses and burdens associated with litigating sharply contested and dubious claims. The law favors compromise and not litigation for its own sake, and as long as the bankruptcy court amply considered the various factors that determined the reasonableness of the compromise, the court's decision must be
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affirmed.
Id. (citations omitted).
On the other hand, even though the bankruptcy court has wide latitude in approving compromises, its discretion is not completely unfettered. See Woodson v. Fireman's Fund Ins. Co. (In re Woodson), 839 F.2d 610, 620 (9th Cir. 1988). The trustee bears the burden of proving to the bankruptcy court that the settlement is fair and equitable and should be approved. In re A&C Props., 784 F.2d at 1382.
Sufficiency of Evidence
The Court shall address the evidence in support of each of the A & C Props. factors.
At the hearing on the Motion for Relief from Stay on May 30, 2017, the Court and the parties discussed the Debtors’ arguments that the Guerreros’ purchase and sale agreement for the Property may be an executory contract capable of rejection in the bankruptcy. The Court indicated that additional facts were needed to make a determination as to whether the purchase and sale agreement met the Ninth Circuit requirements for an executory contract. The need for additional evidence and argument, and the uncertainty surrounding the arguments as to the Motion for Relief from Stay support the Trustee’s request for approval of settlement of the issues between the Estate and the Guerreros. Additionally, as indicated by the Trustee, absent settlement there is a possibility of extended litigation regarding the amount of the Debtors’ homestead exemption.
The Trustee indicates that the risk that the Debtors may spend the exempt funds may hamper collection efforts. The Court is not persuaded that the Trustee could not obtain a legal mechanism to prevent such expenditure such that collection would be difficult. This factor weighs against settlement.
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Although the issues involved in the litigation do not appear overly complex, the Court acknowledges that the amounts involved and the potential net benefit to the Estate from the settlement outweighs the potential benefits of engaging in costly litigation over a relatively small amount of funds for the Estate. This factor weighs heavily in favor of settlement.
The proposed settlement is estimated by the Trustee to yield approximately
$35,000 in funds available for the Estate. The Property represents the only asset of the Estate likely to yield any distribution in this case. Given the anticipated costs of continued litigation, the Trustee’s agreement with the Debtors for 50% of the net proceeds from the sale of the Property is reasonable and in the best interests of creditors.
The trustee, after notice and a hearing, may sell property of the estate. 11
U.S.C. § 363(b)(1); see also Commodity Futures Trading Comm’n v. Weintraub, 471
U.S. 343, 352 (1985). The sale must be in the best interests of the estate and the price must be fair and reasonable. In re Canyon Partnership, 55 B.R. 520 (Bankr. S.D. Cal. 1985); see also In re Wilde Horse Enterprises, Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal. 1991)(sale must have fair/reasonable price, accurate/reasonable notice to creditors and sale made in good faith). The trustee must articulate some "business justification" for selling estate property out of the "ordinary course of business" before the court may approve the transaction. In re Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983); In re Ernst Home Ctr., Inc., 209 B.R. 974, 979 (Bankr. W.D. Wash. 1997).
The Trustee’s proposed justification for the sale of the Property is that the Property and net proceeds from a sale represents likely the only source of funds for distribution to creditors. Based on the Trustee’s representations, a sale of the Property
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is justified.
Generally, bidding procedures must be untainted by self-dealing, encourage bidding and be fair/reasonable/serve the best interests of the estate. See In re Crown Corp., 679 F.2d 774 (9th Cir. 1982).
Here, as part of his compromise motion with the Guerreros, the Trustee contemplates a sale not subject to overbidding. Given that the Court has found the resolution of the legal issues between the Guerreros and the Estate is warranted under Rule 9019, the Court finds that the sale to the Guerreros, not subject to overbidding, is in the best interests of the estate under the specific circumstances of this case.
The proposed sale has been brought in good faith and has been negotiated on an "arms- length" basis. The court, in Wilde Horse Enterprises, set forth the factors in considering whether a transaction is in good faith. The court stated:
‘Good faith’ encompasses fair value, and further speaks to the integrity of the transaction. Typical ‘bad faith’ or misconduct, would include collusion between the seller and buyer, or any attempt to take unfair advantage of other potential purchasers. And, with respect to making such determinations, the
court and creditors must be provided with sufficient information to allow them to take a position on the proposed sale.
Id. at 842 (citations omitted).
The Court finds that the sale encompasses fair value based on the added risk of litigation which is likely to diminish the value of net proceeds absent a sale to the
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Guerreros as proposed by the Trustee.
TENTATIVE RULING
Based on the foregoing, the Trustee has demonstrated that the settlement is fair and equitable and the Motion is GRANTED and the settlement is APPROVED as follows:
Approving the Agreement attached as Exhibit 1 to the Motion;
Authorizing sale of the Property to the Guerreros pursuant to the terms and conditions of the Agreement;
Authorizing the Trustee to execute any and all necessary documents to carry out the provisions contemplated in the Agreement as set forth in ¶4 of the prayer for relief; and
Authorizing waiver of the 6004(h) stay of the sale to the Guerreros.
APPEARANCES REQUIRED.
Debtor(s):
AMANDO MORALES Represented By William D Gurney
Joint Debtor(s):
ALICIA MALDONADO JIMENEZ Represented By
William D Gurney
Movant(s):
Charles W Daff (TR) Represented By Brandon J Iskander Lynda T Bui
Trustee(s):
Charles W Daff (TR) Represented By Brandon J Iskander Lynda T Bui
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Docket 17
On June 29, 2017, Denise Valeski ("Debtor") filed her petition for chapter 7 relief. On June 30, 2017, the Debtor was issued a Notice of Dismissal if Required Documents are Not Filed (Docket No. 5) for failure to provide a master mailing list of creditors. The Debtor was given 72 hours to cure the deficiency. On July 5, 2017, the Debtor’s case was dismissed for failure to file the require document.
On July 21, 2017, the Debtor filed a Motion to Reconsider the Dismissal ("Motion"). The Motion is unopposed.
DISCUSSION
FRBP 9024 (incorporating FRCP 60), permits the filing of a motion for reconsideration.
In support of the Motion, the Debtor has provided a declaration of Gordon Dayton, the Debtor’s counsel, acknowledging the failure to file the Creditor Matrix and indicating that the failure to cure the deficiency prior to the dismissal was owing to the issuance of the Notice on Friday, June 30, 2017, preceding the July 4th holiday.
Here, the Court finds that the failure to file the Creditor Matrix is excusable under the circumstances.
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TENTATIVE RULING
The Court’s tentative ruling is to GRANT the Motion conditioned upon the Debtor’s filing of the Creditor Matrix prior to lodging of the order vacating the order of dismissal.
APPEARANCES WAIVED. Movant to file the Creditor Matrix and lodge an order within 7 days.
Debtor(s):
Denise Lynn Valeski Represented By Gordon L Dayton
Movant(s):
Denise Lynn Valeski Represented By Gordon L Dayton Gordon L Dayton
Trustee(s):
Robert Whitmore (TR) Pro Se
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Adv#: 6:16-01235 Grobstein v. Hewitt
For an Accounting; For Turnover of Property of the Estate; and, To Avoid and Recover Fraudulent Transfers Nature of Suit: (91 (Declaratory judgment, (Approval of sale of property of estate and of a co-owner - 363(h) (Other (e.g. other actions that would have been brought in state court if unrelated to bankruptcy (11 (Recovery of money/property - 542 turnover of property
From: 12/7/16, 5/31/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Gregory William Hewitt Represented By Annie Verdries Lovee D Sarenas
Defendant(s):
Pamela Hewitt Represented By Annie Verdries
Plaintiff(s):
Howard B. Grobstein Represented By Michael W Davis Nina Z Javan
2:00 PM
Trustee(s):
Howard B Grobstein (TR) Represented By Michael W Davis David Seror Reed Bernet Nina Z Javan
2:00 PM
Adv#: 6:17-01021 Whitmore v. E*Trade Securities, LLC et al
From: 4/5/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
William Redfield Barlow III Represented By Michael E Clark Heather J Canning
Defendant(s):
E*Trade Financial Corporation Pro Se
E*Trade Securities, LLC Pro Se
Joint Debtor(s):
Lindsay Marie Barlow Represented By Michael E Clark Heather J Canning
Plaintiff(s):
Robert Whitmore Represented By Julie Philippi
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Trustee(s):
Robert Whitmore (TR) Represented By Julie Philippi Todd L Turoci
2:00 PM
Adv#: 6:17-01121 Smedman et al v. STATE BOARD OF EQUALIZATION
$350.00). Joint Plaintiff Veronica Lee Wilkins Nature of Suit: (91 (Declaratory judgment)),(72 (Injunctive relief - other))
EH
Docket 1
- NONE LISTED -
Debtor(s):
Garrick Craig Smedman Represented By Neil C Evans
Defendant(s):
STATE BOARD OF Pro Se
Joint Debtor(s):
Veronica Lee Wilkins Represented By Neil C Evans
Plaintiff(s):
Veronica Lee Wilkins Pro Se
Craig Smedman Represented By Neil C Evans
Trustee(s):
Arturo Cisneros (TR) Pro Se
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Adv#: 6:15-01206 Speier v. Simmons et al
From: 9/23/15, 2/10/16, 5/25/16, 9/28/16, 11/16/16, 1/11/17, 3/29/17, 6/28/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Hilary D Hill Represented By
Matthew D Resnik
Defendant(s):
Hilary D Hill Pro Se
David Schanhals Pro Se
Angela Simmons Pro Se
Plaintiff(s):
Steven M Speier Represented By Robert P Goe
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
Elizabeth A LaRocque
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Adv#: 6:17-01006 Pringle v. Qadir et al
From: 3/8/17, 6/28/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Najlla Qadir Represented By
Batkhand Zoljargal
Marym Qadir Represented By
Batkhand Zoljargal
Walie A. Qadir Represented By Batkhand Zoljargal
Plaintiff(s):
John P. Pringle Represented By Carmela Pagay Todd A Frealy
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Trustee(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
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Adv#: 6:16-01199 Revere Financial Corporation v. Bank of Southern California, N.A.
Docket 61
08/30/2017
BACKGROUND
On July 29, 2016, Revere Financial Corporation ("RFC" or "Revere"), acting as Liquidating Trustee for the bankruptcy estate of Douglas J. Roger ("Debtor"), filed a complaint for avoidance and recovery of certain transfers made to Bank of Southern California, N.A. ("Defendant" or "BSC"), prepetition. On September 7, 2016, in response to a Motion to Dismiss filed by Defendant, RFC indicated its intent to exercise its right under FRCP 15 to file an amended complaint rather than file opposition to the Defendant’s motion.
On September 21, 2016, RFC filed its First Amended Complaint (the "FAC"), alleging the following claims as to Defendant: (1) Intentional Fraudulent Transfer (Count One – Receiver Order); (2) Intentional Fraudulent Transfer (Count Two – Statutory); (3) Preferential Transfer; (4) Unjust Enrichment; and (5) Money Had and Received. At issue is a single August 28, 2013, transfer from OIC Medical Corporation ("OIC") to Defendant of $408,947 (the "Transfer"). On December 13, 2016, the Court dismissed the FAC with leave to amend. On February 1, 2017, RFC filed its Second Amended Complaint (the "SAC"). On April 7, 2017, the Court granted BSC’s Motion to Dismiss the SAC as to all causes of action, with leave to amend as to the First, Second, and Third Causes of Action, and without leave to amend as to the Fourth and Fifth Causes of Action. On July 5, 2017, Revere filed its Third Amended Complaint (the "TAC"). The TAC is again based on the premise that OIC - the Debtor's wholly-owned and controlled medical corporation, held the Transfer solely for the Debtor's benefit or was a mere conduit for the Debtor’s attempt to shield the Transfer from the receivership order entered in state court as to Dr.
Roger’s assets.
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On August 4, 2017, BSC filed its Motion to Dismiss the TAC ("Motion").
RFC filed opposition on August 16, 2017 ("Opposition") and a reply to the opposition was filed by BSC on August 23, 2017 ("Reply").
DISCUSSION
Under Civil Rule 12(b)(6), made applicable in adversary proceedings through Rule 7012, a bankruptcy court may dismiss a complaint if it fails to "state a claim upon which relief can be granted." In reviewing a Civil Rule 12(b)(6) motion, the trial court must accept as true all facts alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.
2001). However, the trial court need not accept as true conclusory allegations in a complaint or legal characterizations cast in the form of factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007);
Hartman v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008).
To avoid dismissal under Civil Rule 12(b)(6), a plaintiff must aver in the complaint "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). It is axiomatic that a claim cannot be plausible when it has no legal basis. A dismissal under Civil Rule 12(b)(6) may be based either on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson
Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir.2008).
The Court, in its tentative rulings on BSC’s prior Motions to Dismiss, found that RFC could not prevail on its First through Fifth Claims for Relief because it had not alleged sufficient facts to set forth plausible claims where the funds at issue in the Transfer were transferred to BSC by OIC, not by the Debtor. In its prior analysis, the Court agreed with BSC that because OIC is a distinct legal entity from the Debtor, absent facts indicating that OIC did not have legal dominion over the funds at issue, RFC could not prevail in its claims. Exhibit 1 to the Motion is a redline version of the
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TAC which sets forth the allegations added to the SAC by RFC in an attempt to address the Court’s concerns.
The Ninth Circuit has adopted the more restrictive dominion test and not the "more lenient" control test regarding the theory of whether an entity is a "mere conduit":
Under the control test, an examining court must evaluate a transaction in its entirety and make a "logical and equitable" determination as to whether "the banks actually controlled the funds or merely served as conduits, holding money that was in fact controlled by either the transferor or the real transferee." Therefore, while similar, "[t]he dominion test focuses on whether the recipient of funds has legal title to them and the ability to use them as he sees fit. The control test takes a more gestalt view of the entire transaction to determine who, in reality, controlled the funds in question."
Id. Here, the Court agrees that many of RFC’s additions to the TAC are conclusory and are thus not helpful. However, RFC has made some specific allegations, which if true, may support a theory that OIC did not have "dominion" over the funds deposited by Roger/Ebarb because it would not have had the ability to use the funds in any way it wanted. Specifically, the TAC now includes allegations that:
Roger instructed OIC that OIC could not use the money that comprised the Roger Conduit Transfers for any corporate purpose, but only for Roger’s personal purposes as and when Roger would instruct OIC (TAC at ¶28.r);
Roger instructed OIC that OIC could not use the money that comprised the OIC/BSC Transfer for any corporate purpose, but only for Roger’s personal purposes as [sic] and when Roger would instruct OIC (Id. at ¶28.t); and
Roger instructed OIC, as Roger’s agent/depository, to use the money that comprised the OIC/BSC Transfer, which came from the Roger Conduit Transfers to pay Roger’s alleged personal debt to BSC.
Although the Court questions whether RFC has information to support these allegations, the Court recognizes that the credibility of RFC’s amendments is not at issue on a motion to dismiss. Instead, based on the allegations added in the TAC, it
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appears at least plausible that OIC could not exercise dominion over the funds at issue because it had received specific instructions on how to and how not to dispose of the funds.
However, even assuming the Court finds that the TAC alleges facts to support the "mere conduit" theory, Martinez v. Hutton (In re Harwell), 628 F.3d 1312, 1323 (11th Cir. 2010) cited by BSC, undercuts the legal theory that OIC is a "mere conduit" and not a transferee under § 550. Specifically, Harwell describes the "mere conduit" theory as an exception to the statutory language of § 550 and indicates that "the conduit rule presumes that the facilitator of funds acts without bad faith, and is simply an innocent participant to the underlying fraud." Id. The Harwell Court goes on to hold that a party with "intimate and thorough knowledge of the transactions and their desired effect" cannot be classified as a mere conduit. Id.
On this point, the allegations of the TAC actually contradict the claim that OIC is a mere conduit because in Section E, ¶28 of the TAC, RFC asserts that:
OIC was 100% controlled by Roger;
OIC had no corporate officers other than Roger;
OIC had no employees other than Roger;
Roger personally made all decisions regarding OIC’s receiving and holding the Roger Conduit Transfers as agent and depository for Roger, and solely for Roger’s benefit, not OIC’s.
These facts indicate that OIC could not have been an innocent participant to the underlying fraud and that instead based on the allegations of the TAC it is not plausible that OIC was a mere conduit, because it had intimate and thorough knowledge of the transactions and their desired effect. (TAC, Section E, ¶28).
The Opposition fails to address or distinguish the Harwell case, or any of the other cases cited by BSC in its Motion/Reply regarding the requirement that OIC act in good faith to qualify as a "mere conduit". Based on the foregoing, the Court is inclined to GRANT the Motion because RFC has again failed to set forth a plausible claim that property of the Debtor was transferred to BSC where the Transfer was made by the distinct legal entity, OIC.
TENTATIVE RULING
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Based on the foregoing, the Court is inclined to GRANT the Motion and DISMISS the TAC in its entirety. Additionally, RFC has amended the complaint three times since the filing of the initial complaint by the Trustee on July 29, 2016.
RFC has now had numerous opportunities to advance a plausible legal theory on which to pursue the Transfer made to BSC and has failed to cure the issues which have been repeatedly addressed by this Court. The Court finds that amendment would be futile at this juncture and that further amendments would inequitably prejudice BSC, and as such, the Court is inclined to dismiss without leave to amend.
APPEARANCES REQUIRED.
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Bank of Southern California, N.A. Represented By
Kathryn M.S. Catherwood
Movant(s):
Bank of Southern California, N.A. Represented By
Kathryn M.S. Catherwood Kathryn M.S. Catherwood Kathryn M.S. Catherwood Kathryn M.S. Catherwood
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By
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Laurel R Zaeske Arjun Sivakumar Carmela Pagay Franklin R Fraley Jr
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Adv#: 6:14-01070 Law Office of Andrew S. Bisom et al v. Howell
EH
Docket 168
- NONE LISTED -
Debtor(s):
Nancy Ann Howell Pro Se
Defendant(s):
Nancy Ann Howell Pro Se
Plaintiff(s):
Eisenberg Law Firm, APC Represented By Andrew S Bisom
Law Office of Andrew S. Bisom Represented By
Andrew S Bisom
Trustee(s):
Steven M Speier (TR) Pro Se
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Adv#: 6:17-01066 Gumbs et al v. Davis, Jr et al
Docket 5
08/30/2017
TENTATIVE RULING
Plaintiff seeks default judgment be entered against Defendant Richard Earl Davis, Jr. (the "Debtor"). Service of the Motion AND of the Summons and Complaint were all effectuated on the Debtor at "2280 Market Street #220 in Riverside, CA". However, the Debtor’s bankruptcy petition indicates his place of residence as "9325 Sunridge Drive in Riverside, CA 92508".
The Court’s tentative ruling is to DENY the Motion without prejudice. Movant to lodge an order denying the motion and requesting that the Court issue an alias summons for Movant to serve the summons and complaint at the Debtor’s residence as indicated on the bankruptcy petition. Deadlines shall be reset accordingly.
APPEARANCES REQUIRED.
Debtor(s):
Richard Earl Davis Jr Represented By Todd L Turoci
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Defendant(s):
Two6 Sports Management Pro Se
Richard Earl Davis Jr Pro Se
Movant(s):
Angelo M Gumbs Represented By Alexander B Boris
Plaintiff(s):
Kandis Gumbs Represented By Alexander B Boris
Angelo M Gumbs Represented By Alexander B Boris
Trustee(s):
Steven M Speier (TR) Pro Se
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Adv#: 6:17-01066 Gumbs et al v. Davis, Jr et al
From: 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard Earl Davis Jr Represented By Todd L Turoci
Defendant(s):
Two6 Sports Management Pro Se
Richard Earl Davis Jr Pro Se
Plaintiff(s):
Kandis Gumbs Represented By Alexander B Boris
Angelo M Gumbs Represented By Alexander B Boris
Trustee(s):
Steven M Speier (TR) Pro Se
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Adv#: 6:17-01072 Grobstein, Chapter 7 Trustee v. Barreto Tapia et al
Docket 15
08/30/2017
BACKGROUND
On January 12, 2017 ("Petition Date"), Ever Ramirez Barreto ("Debtor") filed his petition for chapter 7 relief. Howard Grobstein is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the Debtor’s bankruptcy estate is certain real property located at 5592 Ivanhoe Avenue in Riverside, CA (the "Property"). On April 6, 2017, the Trustee filed his Complaint for avoidance of transfer of the Property against Magdalena and Iban Barreto (collectively, "Defendants") pursuant to § 548(a) (1)(A) for actual fraud, and pursuant to § 548(a)(1)(B) as constructive fraud, for recovery of the same pursuant to § 550, and for turnover of the Property pursuant to § 542(a) (the "Complaint"). The Court’s Docket reflects that the summons and Complaint were executed on April 7, 2017. Service appears proper. An answer by the Defendants was due on or before May 8, 2017. No answer was filed. The Clerk entered default against both Defendants on May 15, 2017.
On August 8, 2017, the Trustee filed his Motion for Default Judgment ("Motion") and Request for Judicial Notice. The Motion is unopposed.
DISCUSSION
Entry of Default
Federal Rule of Civil Procedure 55 states that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as
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provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party’s default." Fed. R. Civ. P. 55(a). Per LBR 7055-1(b)(1), a motion for entry of default judgment shall contain the following:
When and against what party default was entered
Whether defaulting party is an infant or incompetent person – (N/A)
Whether the defaulting party is currently on active duty – (N/A)
Whether notice has been served on defaulting party, if required by FRCP 55(b)(2)
Admissions
Pursuant to FRBP 7008(b)(6), failure to deny an allegation of the Complaint where a responsive pleading is required constitutes an admission of the allegation.
Default Judgment
Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute considering material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the FRCP favoring decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
Proper Service of Summons and Complaint
The Motion and Summons and Complaint were served on the Defendants at the address of the Property which was transferred to them via Grant Deed by the Debtor on November 10, 2016.
2:00 PM
Whether the Default was due to Excusable Neglect
Here, no opposition to the Motion has been filed and as such, there is no evidence before the Court to suggest that Default has been entered due to excusable neglect.
Sufficiency of the Complaint & Merits of Plaintiff’s claim
Upon default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true. TeleVideo Systems, Inc. v.
Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); "The defendant, by his default, admits the plaintiff's well-pleaded allegations of facts, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established." Nishimatsu Construction Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (emphasis added); Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir.
1978); Cotton v. Massachusetts Mut. Life Ins. Co., 402 F.3d 1267, 1278(11th Cir. 2005) (do not have to take as true facts that are not well-pleaded or conclusions of law).
Here, the facts of the Complaint support the entry of default judgment against the Defendants under either a § 548(a)(1)(B) or 548(a)(1)(A) theory. As set forth more fully in the Motion, the Defendants are close relations of the Debtor, the Debtor transferred the entirety of her interest in the Property to the Defendants a short three months prior to the Petition Date, the transfer of the Property was made as a gift for no consideration, and the timing and form of the transfer indicate an intent to divert assets away from the Debtor’s creditors. Based on the facts asserted by the Trustee, the documents filed in support of the Motion, and the failure of the Defendants to file any opposition or response, the Court finds that the Trustee has met his burden in establishing that the Complaint and the merits of the claims warrant the entry of default judgment against the Defendants.
2:00 PM
The possibility of a dispute considering material facts
The documents provided by the Trustee unequivocally support the inference
that the Debtor transferred her interest in the Property, prepetition, in an effort to delay, hinder or defraud her creditors by denying her bankruptcy estate access to the only asset of value to potentially provide for a distribution to creditors.
The strong policy underlying the FRCP favoring decision on the merits Although default judgments are ordinarily disfavored, termination of a case
before hearing the merits is allowed when a defendant fails to defend an action under Fed. R. Civ. P. 55. Here, there has been no defense advanced by the Defendants to this action and the record before this Court strongly favors the entry of default judgment to prevent an injustice worked upon the Debtor’s creditors by the Debtor’s actions in attempting to divert valuable assets from the bankruptcy estate.
TENTATIVE RULING
Based on the Memorandum of Points and Authorities submitted by the Trustee, the evidence filed in support of the Motion, and the analysis set forth above, the Court is inclined to GRANT the Motion in its entirety. The Trustee is to lodge an order granting the Motion, and separately, a proposed judgment in his favor.
APPEARANCES REQUIRED.
Debtor(s):
Ever Ramirez Barreto Represented By
Scott D McDonald
2:00 PM
Defendant(s):
Iban Barreto Hernandez Pro Se
Magdalena Barreto Tapia Pro Se
Movant(s):
Howard B. Grobstein, Chapter 7 Represented By
Noreen A Madoyan
Plaintiff(s):
Howard B. Grobstein, Chapter 7 Represented By
Noreen A Madoyan
Trustee(s):
Howard B Grobstein (TR) Represented By Noreen A Madoyan Craig G Margulies
2:00 PM
Adv#: 6:17-01072 Grobstein, Chapter 7 Trustee v. Barreto Tapia et al
§ 548(a)(1)(A)]; (2) Avoidance of Constructive Fraudulent Transfer [11 U.S.C. § 548(a)(1)(B)]; (3) Recovery of Avoided Transfer [11 U.S.C. § 550]; and (4) Turnover [11 U.S.C. § 542(a)
From: 6/21/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Ever Ramirez Barreto Represented By
Scott D McDonald
Defendant(s):
Iban Barreto Hernandez Pro Se
Magdalena Barreto Tapia Pro Se
Plaintiff(s):
Howard B. Grobstein, Chapter 7 Represented By
Noreen A Madoyan
Trustee(s):
Howard B Grobstein (TR) Represented By Noreen A Madoyan Craig G Margulies
2:00 PM
11:00 AM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
Also #3 EH
Docket 26
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
12:30 PM
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
From: 5/4/17, 8/24/17 Also #2
EH
Docket 13
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By
12:30 PM
Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 73
BACKGROUND
On August 30, 2016, Efren Estrada ("Debtor") filed a Chapter 7 voluntary petition. On December 12, 2016, Estrada received a discharge.
On December 21, 2016, the Court granted Trustee’s application to employ Shulman Hodges & Bastian ("SHB") as general counsel.
On June 13, 2017, the Court granted Debtor’s motion to vacate discharge, and, on July 11, 2017, the case was converted to Chapter 13.
On August 10, 2017, SHB filed its motion for order allowing and authorizing payment of attorney’s fees and expenses to SHB as an administrative expense pursuant to 11
U.S.C. § 503(b)(1). SHB requests $24,339 in fees and $1,141.31 in expenses.
12:30 PM
DISCUSSION
SHB’s motion appears to indicate that it is requesting treatment as an administrative claim pursuant to § 503(b)(1)(A), although its legal argument is vague and somewhat unclear. SHB asserts that its services preserved assets for the benefit of creditors, were a substantial contribution, and that its requested fees are reasonable. SHB’s arguments appear to meld a variety of different legal standards without clearly delineating what legal standard it believes to be appropriate.
SHB’s reference to and reliance on § 503(b)(1)(A) appears misplaced. The standard for an administrative claim under § 503(b)(1)(A) is that the claim "(1) arose from a transaction with the debtor-in-possession as opposed to the preceding entity (or alternatively, that the claim gave consideration to the debtor-in-possession); and (2) directly and substantially benefitted the estate."
In re DAK Indus., Inc., 66 F.3d 1091, 1094 (9th Cir. 1995) (quoting In re White Motor Corp., 831 F.2d 106, 110 (6th Cir. 1987). "The purpose of administrative priority status is to encourage third parties to contract with the bankruptcy estate for the benefit of the estate as a whole." In re Ybarra, 424 F.3d 1018, 1026 (9th Cir. 2005). In re Weibel, Inc. stated:
If compensation cannot be awarded under Section 503(b)(2), then the question is whether it can be awarded under Section 503(b)(1). McCutchen argues that it can. However, such an interpretation of Section 503 renders Section 503(b) (2), as well as Section 327, nugatory. Indeed, the language behind both Sections is remarkably similar. Section 503(b)(2) essentially incorporates the language of Section 330, that reasonable compensation can be allowed for actual, necessary services rendered by the attorney based on the nature, extent and value of such services. Section 503(b)(1) provides for payment, as administrative claim, of the actual necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the commencement of the case.
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For an attorney, the test for receiving compensation would appear nearly identical under both Sections. It is reasonable then, to construe Section 503(b) (2), with its specific reference to compensation to professionals under Section 330, as the only part of Section 503(b) under which such professional can receive compensation.
176 B.R. 209, 213 (B.A.P. 9th Cir. 1994). See also In re Marshall, 2015 WL 5735220
at *3 (Bankr. C.D. Cal. 2015) (attorney’s fees inappropriate under § 503(b)(1)(A)); 4 Collier on Bankruptcy ¶ 503.06[2] (16th ed. 2015) (providing examples of services that are within the scope of § 503(b)(1)(A). Therefore, SHB is not entitled to an administrative award pursuant to § 503(b)(1)(A). And the Ninth Circuit has explicitly stated that until a fee award is made under § 330, an applicant is not entitled to an administrative claim pursuant to § 503(b)(2). See In re Riverside-Linden Inv. Co., 945 F.2d 320, 324 (9th Cir. 1991).
Here, Movant moves under § 503(b)(1), when it first needs to seek approval of compensation under § 330, and then seek an administrative expense under § 503(b) (2). Parties to discuss deeming Movant’s request as being made pursuant to § 330.
TENTATIVE RULING
Subject to discussion, the Court is inclined to DENY the motion without prejudice.
APPEARANCES REQUIRED.
Debtor(s):
Efren Diaz Estrada Represented By
12:30 PM
Movant(s):
W. Derek May
Lynda T. Bui Represented By
Lynda T Bui Ryan D ODea
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 41
BACKGROUND
On September 9, 2016, Marc Meisenheimer ("Debtor") filed a Chapter 13 voluntary petition. On October 26, 2016, Debtor’s Chapter 13 plan was confirmed.
On June 28, 2017, Trustee filed a motion to dismiss for delinquency. On July 12, 2017, Debtor filed his opposition. No appearance was made on behalf of Debtor at the hearing on July 27, 2017, and the case was dismissed.
On August 10, 2017, Debtor filed a motion to vacate and set aside order dismissing Debtor’s Chapter 13 case and reinstate the Debtor’s Chapter 13 bankruptcy case nunc pro tunc. On August 15, 2017, Trustee filed a conditional approval, on the condition that Debtor tender $804 by the hearing and submit copies of his 2016 tax returns.
Additionally, Trustee disagrees with nunc pro tunc relief.
DISCUSSION
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Debtor asserts that no appearance was made at the hearing on July 27, 2017, because Debtor had cured the delinquency by the hearing and thought that the matter was resolved. The Court finds that the conditions outlined in Trustee’s condition approval of Debtor’s motion to be reasonable, and, therefore, will vacate the dismissal order pursuant to Fed. R. Bankr. P. Rule 9024, on the grounds of excusable neglect, assuming that Debtor has complied with the applicable provisions.
Regarding Debtor’s request that the vacation of the dismissal order be nunc pro tunc, however, the Court agrees with the Trustee that such relief is not appropriate.
Debtor’s motion does not contain legal authorities that directly support the proposition that the reinstatement of a case can, or should, be ordered nunc pro tunc. It is also not clear why Debtor has made such a request, although Trustee appears to assume that Debtor wishes to have the automatic stay retroactively imposed.
The general rule is "that the reinstatement of a dismissed bankruptcy case does not retroactively reimpose the automatic stay." In re Lomagno, 320 B.R. 473, 479 (B.A.P. 1st Cir. 2005) (collecting cases); see also In re Nagel, 245 B.R. 657, 662 (D. Ariz.
1999) ("By ‘undoing’ the return to the status quo ante through the retroactive application of the stay, the bankruptcy court engaged in a kind of judicial time travel that cannot be reconciled with the law.")
As discussed in In re Lomagno, courts have recognized an exception when there is a violation of due process rights. See generally 320 B.R. at 480 ("Several courts have concluded that reinstatement of a dismissed bankruptcy case does not affect the validity of a creditor’s actions taken during the period the case was dismissed, unless there was a violation of due process rights.) (emphasis in original). Here, there is no indication that the situation fits within the exception to the general rule.
TENTATIVE RULING
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The Court is inclined to GRANT IN PART Debtor’s motion, reinstating the case without the requested nunc pro tunc relief.
APPEARANCES REQUIRED.
Debtor(s):
Marc Meisenheimer Represented By Lionel E Giron Kevin Tang
Movant(s):
Marc Meisenheimer Represented By Lionel E Giron Kevin Tang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
HOLDING DATE
From: 5/4/17, 8/24/17 EH
Docket 44
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
12:30 PM
From: 8/17/17 EH
Docket 59
- NONE LISTED -
Debtor(s):
Jimmy Radu Vianu Represented By Andrew Nguyen
Joint Debtor(s):
Milagros Vianu Represented By Andrew Nguyen
Movant(s):
Milagros Vianu Represented By Andrew Nguyen
Jimmy Radu Vianu Represented By Andrew Nguyen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 57
BACKGROUND
On March 6, 2015, Leslie Larson ("Debtor") filed a Chapter 13 voluntary petition. On May 11, 2015, Debtor’s Chapter 13 plan was confirmed.
On July 10, 2017, Trustee filed a motion to dismiss for failure to submit tax returns/ refunds. That same day, Debtor filed her opposition, indicating that Debtor had mailed her tax returns to Trustee.
On July 24, 2017, a hearing was held on Trustee’s motion to dismiss. No appearance was made on behalf of Debtor and the case was dismissed. Debtor’s counsel indicates that he had two clients with the last name "Larson" with hearings on motions to dismiss for failure to submit tax returns/refunds. Debtor’s counsel additionally asserts that when the hearing for his other client was called, and Trustee withdrew the motion, he erroneously believed that the motion to dismiss for Debtor had been withdrawn.
12:30 PM
On July 27, 2017, Debtor filed a motion to vacate dismissal. On July 31, 2017, Trustee filed comments indicating conditional approval, on the condition that Debtor make payment to become current with plan payments ($2,169).
DISCUSSION
Fed. R. Bankr. P. Rule 9024, incorporating Fed. R. Civ. P. Rule 60(b)(1), provides for relief from an order for, among other things, "mistake, inadvertence, surprise, or excusable neglect." Debtor’s counsel states that it is his recollection that Trustee stated he would withdraw the motion to dismiss on the date of the hearing.
Given the conditional approval of the Trustee and the evidence submitted by Debtor, the Court finds that the requested relief is proper assuming that the condition has been satisfied.
TENTATIVE RULING
The Court is inclined to GRANT the motion in accordance with the terms in Trustee’s comments.
APPEARANCES REQUIRED.
Debtor(s):
Leslie A. Larson Represented By Carey C Pickford
12:30 PM
Movant(s):
Leslie A. Larson Represented By Carey C Pickford Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 42
BACKGROUND
On November 9, 2016, Fonda Cormier ("Debtor") filed a Chapter 13 voluntary petition. On December 28, 2016, Debtor’s Chapter 13 plan was confirmed, and was modified twice subsequently.
On June 30, 2017, Debtor filed a notice of conversion to Chapter 7, and the case was converted approximately two hours and fifteen minutes later. Approximately one hour and thirty minutes later, Debtor filed a motion to vacate the conversion order. The motion was filed on negative notice. On July 20, 2017, the Court set the matter for hearing.
Debtor’s argument is, essentially, that Debtor changed its mind and no longer wants to be in Chapter 7. Specifically, Debtor states that after it filed the notice of conversion it had discussions with Trinity Financial, a lienholder on Debtor’s principal residence, and learned that Trinity Financial would likely file a motion for relief from stay if the case were converted to Chapter 7.
12:30 PM
DISCUSSION
As a preliminary matter, the proof of service included in Debtor’s motion is not signed, and Debtor has not served all parties in interest pursuant to Local Rule 1017.
Additionally, Debtor’s motion contains no legal standard or analysis. Relief from a judgment or order is governed by Fed. R. Civ. P. Rule 60, incorporated into bankruptcy proceedings by Fed. R. Bankr. P. Rule 9024. Debtor has not provided any argument relating to that standard.
Furthermore, the declaration of Debtor’s attorney appears to misrepresent the factual situation. First, the reasons for Debtor converting to Chapter 7 are not given. The primary argument presented by Debtor in support of this motion is that counsel learned, after filing a notice of conversion and having further discussions with Trinity Financial, that Trinity Financial would likely file a motion for relief from stay if the case was converted to Chapter 7. Trinity Financial had, however, in fact filed a motion for relief from stay on May 9, 2017, and an order approving the stipulation of the parties was entered on June 27, 2017. Section 10 of that order states: "This order is binding and effective despite any conversion of this bankruptcy case to a case under any other chapter of the Bankruptcy Code." The parties chose not to include language that would provide for relief from stay upon conversion of the case. Therefore, it is unclear how the conversion of the case could have any effect on the automatic stay as it relates to Trinity Financial.
As an aside, the Court notes that Debtor is ineligible for a Chapter 7 discharge under
§ 727(a)(8) by virtue of a Chapter 7 discharge on September 25, 2009.
TENTATIVE RULING
12:30 PM
Given the legal and factual deficiencies of the motion, in addition to the motion’s improper service, the Court will DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Fonda Cormier Represented By Manfred Schroer
Movant(s):
Fonda Cormier Represented By Manfred Schroer
Trustee(s):
Robert Whitmore (TR) Pro Se
12:30 PM
EH
Docket 28
8/31/17
Background:
On January 27, 2017, Xiomara Swiatkowski filed a Chapter 13 voluntary petition. On March 15, 2017, Debtor’s Chapter 13 plan was confirmed.
On March 8, 2017, Peter Swiatkowski filed a claim in the amount of $118,291, of which $61,741 was classified as secured ("Claim 2"). On July 24, 2017, Debtor filed an objection to Claim 2. The Court notes that the claim objection contains no proof of service.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy
12:30 PM
Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
First of all, Debtor’s claim of objection does not appear to have been properly served. Additionally, Debtor’s claim objections contains no legal argument, but instead simply states that it is based on various exhibits, exhibits which are not properly authenticated. Therefore, Debtor has failed to submit the required evidence, pursuant to Local Rule 3007, in order for the Court to find that Debtor has satisfied its burden of proof under the legal standards recited above.
12:30 PM
Tentative Ruling
The Court is inclined to OVERRULE the objection.
APPEARANCES REQUIRED.
Debtor(s):
Xiomara Swiatkowski Represented By Robert W Ripley
Movant(s):
Xiomara Swiatkowski Represented By Robert W Ripley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 58
BACKGROUND
On January 27, 2017, Kisha Stegall-Hill ("Debtor") filed a Chapter 13 voluntary petition. On June 13, 2017, Debtor’s Chapter 13 plan was confirmed.
On July 5, 2017, Trustee filed a motion to dismiss for failure to submit tax returns or refunds. On July 11, 2017, Debtor filed her opposition. According to Debtor, on July 20, 2017, Debtor’s counsel sent Trustee the tax returns and indicated that the IRS had intercepted any expected refund.
On July 24, 2017, a hearing was held on Trustee’s motion to dismiss. No appearance was made on behalf of Debtor and the case was dismissed.
On July 28, 2017, Debtor filed a motion to vacate dismissal. On July 31, 2017, Trustee filed comments indicating conditional approval, on the condition that Debtor make payment to become current with plan payments ($3,135.18) and either tender the tax returns, totaling $6,103, or provide evidence that such returns were intercepted.
12:30 PM
DISCUSSION
Fed. R. Bankr. P. Rule 9024, incorporating Fed. R. Civ. P. Rule 60(b)(1), provides for relief from an order for, among other things, "mistake, inadvertence, surprise, or excusable neglect." Debtor’s counsel states that it is his recollection that Trustee stated he would withdraw the motion to dismiss on the date of the hearing.
Given the conditional approval of the Trustee and the evidence submitted by Debtor, the Court finds that the requested relief is proper assuming that the conditions have been satisfied.
TENTATIVE RULING
The Court is inclined to GRANT the motion in accordance with the terms in Trustee’s comments.
APPEARANCES REQUIRED.
Debtor(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Movant(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 37
8/31/17
Background:
On January 28, 2017, Miriam Preisendanz ("Debtor") filed a Chapter 13 voluntary petition. Debtor’s Chapter 13 plan was confirmed on March 15, 2017.
On May 16, 2017, American Express Bank, FSB ("American Express") filed an unsecured claim in the amount of $11,316.57 ("Claim 10"). On July 22, 2017, Debtor filed an objection to Claim 10. On August 16, 2017, American Express filed a response.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy
12:30 PM
Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Debtors argue that the statute of limitations is four years for Creditor’s claim and that Creditor’s claim is therefore barred. Cal. Code Civ. P. § 337(2) provides for a statute of limitations of four years for:
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An action to recover (1) upon a book account whether consisting of one or
more entries; (2) upon an account stated based upon an account in writing, but the acknowledgement of the account stated need not be in writing; (3) a balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that where an account stated is based upon an account of one item, the time shall begin to run from the date of said item, and where an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.
Cal. Code Civ. P. § 337(1) provides that the statute of limitations is also four years for claims based upon a contract.
American Express’s response is that the Cash Rebate Cardmember Agreement includes a choice of law provision that identifies Utah as the governing law. American Express further asserts that the statute of limitations for its claim is six years under Utah law, and that, therefore, its claim is not barred. The Cash Rebate Cardmember Agreement states, under the section applicable law:
This Agreement and your Account, and all questions about their legality, enforceability and interpretation, are governed by the laws of the State of Utah (without regard to internal principles of conflicts of law), and by applicable federal law. We are located in Utah, hold your Account in Utah, and entered into this Agreement with you in Utah.
As is noted by American Express, the Ninth Circuit, relying on the Restatement (Second) of Conflict of Laws § 142, previously stated:
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The application of § 142 compels the conclusion that California’s shorter
statute of limitations does not apply here, because the case presents the sort of "exceptional circumstances" under which the 1988 version of the Second Restatement looks past the law of the forum, and applies a longer foreign limitations period. The Restatement, to be sure, does not provide an exhaustive or technical definition of an exceptional circumstance. Nevertheless, the comment to the 1988 version of § 142 makes clear that the present case comes within that category. Indeed, this case is on all fours with the Restatement’s only example of what would constitute such a "special," "unjust" circumstance: "[W]hen through no fault of the plaintiff an alternative forum is not available as, for example, where jurisdiction could not be obtained over the defendant in any [other] state . . ."
In re Sterba, 852 F.3d 1175, 1180 (9th Cir. 2017). In the absence of any argument to the contrary, the Court finds that Utah law provides the applicable statute of limitations.
While American Express argues that the statute of limitations in Utah for credit card debt is six years, Utah’s statutes are unclear. The Court of Appeals of Utah has recently stated:
As both parties agree, the question of which limitations period applies to actions on credit card accounts is an issue of first impression in Utah. Stocks argues that the four-year period applicable to "open store account[s] for [the purchase of] any good, wares, or merchandise" and to "open account[s] for work, labor or services rendered, or materials furnished," see Utah Code Ann.
§ 78B-2-307, is the correct one; Asset Acceptance contends that it should be the six-year period applicable to "any contract, obligation, or liability founded upon an instrument in writing," see id. § 78B-2-309. In other jurisdictions where a similar issue has been addressed, the results have been mixed and often involve statutory language that differs from our own in ways that may or
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may not be significant. And the question presented here is an important one
that deserves attention, whether judicial or legislative, given the universality of credit cards in our society and the number of collection cases involving credit card debt that make their way into our courts. But precisely because the issue is important and may have widespread impact, we decline to attempt to resolve an issue of first impression in a case with the sort of procedural deficits this one contains.
Asset Acceptance LLC v. Stocks, 376 P.3d 322, 327 (Ct. App. Utah 2016) (footnotes omitted). Utah Code Ann. § 78B-2-307(1) states:
An action may be brought within four years:
after the last charge is made or the last payment is received:
upon a contract, obligation, or liability not founded upon an instrument in writing
on an open store account for any goods, wares, or merchandise; or
on an open account of work, labor or services rendered, or materials furnished.
And Utah Code. Ann. § 78B-2-309(2) states:
An action may be brought within six years:
upon any contract, obligation, or liability founded upon an instrument in writing, except those mentioning in Section 78B-2-
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311
In equivocating upon the statute of limitations, the Court of Appeals of Utah left a footnote identifying several states that had addressed the situation. Stocks, 376 P.3d 322, 327 n.3. The split identified by the Court of Appeals of Utah appears to center on whether the reviewing court believed that a credit card agreement should be interpreted as a written contract or an oral contract; i.e. whether a credit card agreement was sufficient to satisfy the formalities of contract formation. Compare, e.g., Portfolio Acquisitions LLC v. Feltman, 391 Ill. App. 3d. 642, 651-52 (App. Ct.
Ill. 2009) ("Accordingly, the contract at issue is considered to be an oral contract for purpose of the statute of limitations and the five-year period of section 13-205 applies.") with Hill v. Am. Express, 289 Ga. App. 576, 577-78 (Ct. App. Ga. 2008) (credit card agreement is written contract).
Despite not alerting the Court to the unsettled nature of the question in Utah, American Express appears to have anticipated this analysis, including in its opposition a brief argument that Utah law recognizes a credit card agreement as a written contract. See In re Cluff, 313 B.R. 323, 334 (Bankr. D. Utah. 2004) ("Under the test this Court has articulated, these credit card debts are based on writing."). This argument is unconvincing, primarily because In re Cluff was not interpreting Utah law, but, rather, the Federal Rules of Bankruptcy Procedure.1 Id.
The Court notes, however, that Utah Code Ann. § 25-5-4(2)(e) states:
A credit agreement is binding and enforceable without any signature by the party to be charged if:
the debtor is provided with a written copy of the terms of the agreement;
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the agreement provides that any use of the credit offered shall constitute acceptance of those terms;
after the debtor receives the agreement, the debtor, or a person authorized by the debtor, requests funds pursuant to the credit agreement or otherwise uses the credit offered.
Here, the agreement clearly satisfied the second requirement. The Court lacks an evidentiary record to determine whether the debtor was provided with a written copy of the agreement and requested funds after receiving the agreement. If the requirements of Utah Code Ann. § 25-5-4(2)(e) were satisfied, the Court concludes that a Utah court would find the credit agreement enforceable, per the statute. See MBNA Am. Bank, N.A. v. Goodman, 140 P.3d 589, 592 (Ct. App. Utah 2006). If the credit agreement is enforceable, then the claim of American Express would appear to be founded upon an instrument in writing, and the six year statute of limitations would apply.
Exhibit A provided by American Express, however, indicates that on April 18, 2011, there was a $15 agency remittance, which is referred to by American Express as a "payment." It is unclear if this is in fact a payment. If it is not a payment, to adopt American Express’s argument that this "agency remittance" tolls the statute of limitations would allow a creditor the means to unilaterally toll the statute of limitations indefinitely.
Furthermore, the Court notes that Exhibit A to American Express’s opposition is not the same form as is included in the proof of claim. Claim 10 shows activity for 2012, indicates that the last transaction was in June 2008, that the account was charged off in January 2009, and that the last payment was made in April 2011.
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Parties to address the nature of the April 18, 2011, "agency remittance."
Tentative Ruling
APPEARANCES REQUIRED.
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Movant(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 23
BACKGROUND
On February 13, 2017, Ryan & Theresa Murphy ("Debtor") filed a Chapter 13 voluntary petition. On April 6, 2017, Debtors’ Chapter 13 plan was confirmed.
On March 21, 2017, the IRS filed a priority claim in the amount of $4,663 ("Claim 3"). On May 16, 2017, Debtors filed an objection to Claim 3. On June 22, 2017, approximately one hour before the hearing, and after the Court had published a tentative ruling indicating that it was inclined to overrule the objection for lack of evidence, Debtors withdrew the objection.
On June 28, 2017, Debtors’ counsel, Jenny Doling ("Counsel"), filed an application for compensation, requesting $950 for the preparation of the claim objection. The next day, Trustee filed comments objecting to the requested compensation, and asserting that the services rendered were of no benefit to the estate. On July 31, 2017, Doling filed a reply and set the matter for hearing. Doling’s reply states that "the work was still completed at the request and representation of the Debtors and Counsel should be compensated for such work." In the alternative, Doling requests the Court to enter an
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order, granting the fees to be paid outside the plan.
DISCUSSION
The language of 11 U.S.C. § 329(b) instructs the court to reduce requested compensation if such compensation exceeds the reasonable value of the provided services. See also Hale v. U.S. Trustee, 509 F.3d 1139, 1147 (9th Cir. 2007) ("Under
§ 329(b), a bankruptcy court may examine the reasonableness of a debtor’s attorney fees and, ‘[i]f such compensation exceeds the reasonable value of any such services, the court may cancel agreement, or order the return of any such payment, to the extent excessive.") "In making the ‘reasonable value’ determination, the bankruptcy court is to be guided by section 330 of the Bankruptcy Code, which sets forth a number of factors that Congress deemed relevant to an assessment of the value of professional services." Matter of Geraci, 138 F.3d 314, 318 (7th Cir. 1998).
Here, the Court agrees with Trustee that the services provided by Counsel did not have ANY benefit to the estate. The claim objection, as outlined by the Court previously, did not contain evidence suggesting that the IRS’s claim was inaccurate. Further, there is no evidence as to the basis for the withdrawal of the claim objection; i.e., that Debtor called Counsel the day of the hearing and stated the tax returns now needed to be amended. As such, the claim objection did not satisfy the evidentiary standard of Local Rule 3007. It is not that the filing of an objection to Claim 3 could not have had any benefit to the estate – rather the claim objection that was filed was inadequate on its face.
Counsel’s request that the Court enter an order granting the fees, but instructing that the fees be paid outside the plan, lacks legal foundation. Whether the fees are to be paid directly by Debtor or through the plan does not affect the legal standard applied by the Court. Instead, Fed. R. Bankr. P. Rule 2017(b) suggests that the two situations are to be analyzed the same. Therefore, the Court declines to grant this alternative request.
12:30 PM
TENTATIVE RULING
The Court is inclined to DENY the requested fees.
APPEARANCES REQUIRED, or Counsel may not appear and be deemed to submit to the tentative.
Debtor(s):
Ryan Christopher Murphy Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Theresa Marie Murphy Represented By Jenny L Doling Summer M Shaw
Movant(s):
Theresa Marie Murphy Represented By Jenny L Doling Summer M Shaw
Ryan Christopher Murphy Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 47
8/31/17
Background:
On February 27, 2017, Jose Lara-Pena & Yanisleidy Sanchez-Quinonez ("Debtors") filed a Chapter 13 voluntary petition. On May 23, 2017, Debtors’ Chapter 13 plan was confirmed.
On July 5, 2017, Pinnacle Credit Services, LLC filed an unsecured proof of claim in the amount of $969.99 ("Claim 7"). On July 29, 2017, Debtors filed an objection to Claim 7.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223
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F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Debtors argue that the statute of limitations is four years for Creditor’s claim and that Creditor’s claim is therefore barred. Cal. Code Civ. P. § 337(2) provides for a statute of limitations of four years for:
An action to recover (1) upon a book account whether consisting of one or
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more entries; (2) upon an account stated based upon an account in writing, but the acknowledgement of the account stated need not be in writing; (3) a balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that where an account stated is based upon an account of one item, the time shall begin to run from the date of said item, and where an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.
Cal. Code Civ. P. § 337(1) provides that the statute of limitations is also four years for claims based upon a contract.
The Court has reviewed Creditor’s proof of claim and it appears that the applicable statute of limitations is four years pursuant to Cal. Code Civ. P. § 337. It additionally appears that Debtors have not made a payment on the claim in more than six years, and, therefore, the statute of limitations has expired.
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Jose Alberto Lara-Pena Represented By Luis G Torres
Joint Debtor(s):
Yanisleidy Sanchez-Quinonez Represented By
12:30 PM
Movant(s):
Luis G Torres
Yanisleidy Sanchez-Quinonez Represented By Luis G Torres
Jose Alberto Lara-Pena Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Harris Miller Represented By
Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ernesto Ayon Lopez Represented By
James Geoffrey Beirne
Joint Debtor(s):
Dolores Millan Sanchez Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jeannine Michon Norman Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Franklin R. Meza Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maria A Holguin Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kath Boonklun Represented By Charles Martin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Cynthia Ann Sawyer Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #23 EH
Docket 15
Summary of the Motion:
TENTATIVE
The Court having reviewed the motion, finding notice and service to be proper, the Court is inclined to GRANT the motion, avoiding the junior lien of Specialized Loan Servicing, LLC, upon receipt of a Chapter 13 discharge.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
12:30 PM
Debtor(s):
Maria Artemisa Griffith Represented By Carey C Pickford
Movant(s):
Maria Artemisa Griffith Represented By Carey C Pickford Carey C Pickford Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #22 EH
Docket 0
- NONE LISTED -
Debtor(s):
Maria Artemisa Griffith Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jeffrey P Hamblin Represented By Solomon A Cheifer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Paul Hiram Jones Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Conchita C Ang Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Robert R McDonald Represented By Stephen L Burton
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Julie Gamido Represented By
Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Stacy N Reagor Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Nadia M. Lipscomb Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Daniel Garcia Represented By Rebecca Tomilowitz
Joint Debtor(s):
Maria Garcia Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Juan Guerrero Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Karsten Sanders Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Esther Martinez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Allan Omar Ramos Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maria Susana Snavely Represented By Michael Salanick
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gerardo Garibay Represented By Alberto Carranza
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Abel Gonzalez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose Guadalupe Rodriguez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
William Richard Newborg Represented By
Ramiro Flores Munoz
Joint Debtor(s):
Serina Rae Newborg Represented By
Ramiro Flores Munoz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Catherine Lucille Laff Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jessie Romero Jr Represented By Bruno Flores
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ruben Quintero Palafox Jr. Represented By Yoon O Ham
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Samuel T Saavedra Represented By Michael R Totaro
Joint Debtor(s):
Suzanne M Saavedra Represented By Michael R Totaro
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Francisco Lopez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Coe Lamoureux Represented By
W. Derek May
Joint Debtor(s):
Julie Lamoureux Represented By
W. Derek May
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: KALENGA PATRICK MUNONGO AND JANELLE NICOLE MUNONGO
EH
Docket 14
APPEARANCES REQUIRED.
Debtor(s):
Kalenga Patrick Munongo Represented By Paul Y Lee
Joint Debtor(s):
Janelle Nicole Munongo Represented By Paul Y Lee
Movant(s):
Janelle Nicole Munongo Represented By Paul Y Lee Paul Y Lee
Kalenga Patrick Munongo Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
Rod (MJ) Danielson (TR) Pro Se
12:30 PM
12:31 PM
Docket 211
- NONE LISTED -
Debtor(s):
Brandon Kent Blevins Represented By
Raj T Wadhwani
Joint Debtor(s):
Teresa Taylor Blevins Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 138
- NONE LISTED -
Debtor(s):
Willia Roberta Burch-Jones Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 63
- NONE LISTED -
Debtor(s):
Jeanette Johnson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:31 PM
EH
Docket 134
- NONE LISTED -
Debtor(s):
Francisco Javier Medina Represented By Tamar Terzian
Joint Debtor(s):
Maria Guadalupe Medina Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 63
- NONE LISTED -
Debtor(s):
David R. Roberts Represented By Javier H Castillo
Joint Debtor(s):
Crystal A Roberts Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 52
- NONE LISTED -
Debtor(s):
Porfirio Macias Castro Represented By Leonard J Cravens
Joint Debtor(s):
Maria Lopez Castro Represented By Leonard J Cravens
Trustee(s):
Lynda T. Bui (TR) Pro Se
12:31 PM
EH
Docket 48
- NONE LISTED -
Debtor(s):
Deborah Lynn Gordon Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 50
- NONE LISTED -
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 52
- NONE LISTED -
Debtor(s):
Robert M Lopez Represented By Anthony Wilaras
Joint Debtor(s):
Ashley Lopez Represented By Anthony Wilaras
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 86
- NONE LISTED -
Debtor(s):
Rula Nino Represented By
Devin Sawdayi
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 90
- NONE LISTED -
Debtor(s):
Jose L Rangel Represented By
Lisa H Robinson John F Brady
Joint Debtor(s):
Rosa M Rangel Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 57
- NONE LISTED -
Debtor(s):
Kevin S. Klose Represented By Patricia M Ashcraft
Joint Debtor(s):
Diana K. Klose Represented By Patricia M Ashcraft
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 74
- NONE LISTED -
Debtor(s):
Anthony E Turkson Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 41
- NONE LISTED -
Debtor(s):
Ramon Urrutia Represented By
C Scott Rudibaugh
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 145
- NONE LISTED -
Debtor(s):
Vonetta M Mays Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 30
- NONE LISTED -
Debtor(s):
John Stephen Puddy Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 48
- NONE LISTED -
Debtor(s):
Carol Elizabeth Tenney Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 93
- NONE LISTED -
Debtor(s):
Donald Leroy Woodruff Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 49
- NONE LISTED -
Debtor(s):
Melvin T. Marks Represented By
James D. Hornbuckle
Joint Debtor(s):
Maria S Peponas Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 60
- NONE LISTED -
Debtor(s):
Shahla Salamat Represented By Amid Bahadori
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 69
- NONE LISTED -
Debtor(s):
ROBERT A HAGUE Represented By Manfred Schroer
Joint Debtor(s):
DIANNE L HAGUE Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 42
- NONE LISTED -
Debtor(s):
Tanyua A Gates-Holmes Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 30
- NONE LISTED -
Debtor(s):
Zoraida Molina Represented By Samer A Nahas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 36
- NONE LISTED -
Debtor(s):
Carmen Saucedo Represented By Michael Smith Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 38
- NONE LISTED -
Debtor(s):
John Wesley Wilson Jr. Represented By Julie J Villalobos
Joint Debtor(s):
Michelle Janet Wilson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 27
- NONE LISTED -
Debtor(s):
Aaron M. Flake Represented By Amanda G Billyard Andy C Warshaw
Joint Debtor(s):
Jeanie M. Flake Represented By Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 22
- NONE LISTED -
Debtor(s):
Pamela Lynn King Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 48
- NONE LISTED -
Debtor(s):
Jerome D Williams Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 45
- NONE LISTED -
Debtor(s):
Melanie Lourdes Davis Represented By Gary S Saunders
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 26
- NONE LISTED -
Debtor(s):
Gabriel Cruz Represented By
Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 34
- NONE LISTED -
Debtor(s):
Jose Liborio Avila Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 27
- NONE LISTED -
Debtor(s):
Sandra Lorena Parra Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
EH
Docket 10
Debtor(s):
Maria A Holguin Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:00 PM
Adv#: 6:13-01111 Vega v. Barrios
Docket 35
Debtor(s):
Carmen Elisabeth Barrios Represented By David H Chung
Defendant(s):
Carmen Elisabeth Barrios Represented By
Andrew Edward Smyth
Plaintiff(s):
Crystal Vega Pro Se
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
From: 8/1/17 EH
Docket 51
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1) based on Debtor’s failure to make required post-petition payments. GRANT waiver of 4001(a)(3) stay. GRANT relief under ¶2, ¶3, and ¶12. Relief DENIED under ¶13 as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Sergio Reyes Represented By
Patricia A Mireles
Joint Debtor(s):
Maria De Los Angeles Reyes Represented By Patricia A Mireles
10:00 AM
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR DEUTSCHE ALT-B SECURITIES, MORTGAGE LOAN TRUST, SERIES 2006- AB2
From: 8/1/17 EH
Docket 94
August 1, 2017 Service: Proper Opposition: Yes
Subject to adequate protection discussions, the Court is inclined to GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request under § 13 is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
William Raymond Gayler Represented By Norma Duenas
Joint Debtor(s):
Donna Nan Ling Gayler Pro Se
10:00 AM
Movant(s):
HSBC Bank USA, National Represented By Ryan P Spitalnick April Harriott Seth Greenhill Sean C Ferry
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 8/1/17 EH
Docket 114
Service: Proper Opposition: Yes
Movant has established sufficient grounds to support relief from stay under § 362(d)
(1) based on Debtor’s failure to make required post-petition payments. Debtor alleges that more payments have been made to the Movant then the Motion accounts for and that some payments have been misapplied by the Movant, but provides no specificity or detail to support his assertions.
APPEARANCES REQUIRED.
Debtor(s):
Robert Wayne Cook Sr. Represented By Steven A Alpert
Joint Debtor(s):
Kelly Danielle Cook Represented By Steven A Alpert
10:00 AM
Movant(s):
Wells Fargo Bank, N.A . Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: THE BANK OF NEW YORK MELLON
EH
Docket 91
09/12/17
GRANT relief from the stay under §§ 362(d)(1) and (d)(4). Court finds that bankruptcy case was part of a scheme to hinder, delay and defraud creditors based on multiple bankruptcy filings and unauthorized transfers affecting this property.
GRANT waiver of 4001(a)(3) stay and GRANT as to ¶10(b). DENIED as to ¶ 11(a) for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Richard Goodwin Jr Pro Se
Movant(s):
The Bank of New York Mellon FKA Represented By
Mark D Estle
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 55
09/12/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 3 permitting Movant to offer Debtor loan workout options.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Margaret Crain Represented By Lauren Rode
Movant(s):
Wells Fargo Bank, N.A. Represented By Jamie D Hanawalt Jessica L Carter
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST COMPANY
EH
Docket 31
- NONE LISTED -
Debtor(s):
Patricia Daniels Represented By Benjamin R Heston
Movant(s):
Deutsche Bank National Trust Represented By
Kristin A Zilberstein Nancy L Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
EH
Docket 38
09/12/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 3 permitting Movant to offer Debtor loan workout options.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Juana Santiago Represented By Rebecca Tomilowitz
Movant(s):
U.S. Bank National Association, as Represented By
Jamie D Hanawalt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BOSCO CREDIT LLC
EH
Docket 39
09/12/2017
Service: Proper Opposition: Yes
Subject to discussions regarding an APO, the Court is inclined to GRANT relief based on the number of missed payments.
APPEARANCES REQUIRED.
Debtor(s):
Teresa Julia Chavez Represented By Manfred Schroer
Movant(s):
BOSCO CREDIT LLC, its Represented By Nichole Glowin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 40
09/12/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Ryan Keith Richardson Represented By Ronald B Talkov
Joint Debtor(s):
Joyce Nanette Richardson Represented By Ronald B Talkov
Movant(s):
Wells Fargo Bank, N.A. dba Wells Represented By
Sheryl K Ith
10:00 AM
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: MMCA LEASE LTD
EH
Docket 9
09/12/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Felipe Ernesto LeFranc Sr Pro Se
Joint Debtor(s):
Ligia Elizabeth LeFranc Pro Se
Movant(s):
MMCA Lease LTD Represented By Scott S Weltman
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: LOUIS J SILVESTRI AND LINDA SILVESTRI, TRUSTEE OF THE LOUIS J SILVESTRI AND LINDA SILVESTRI FAMILY TRUST EST. 2/5/81
EH
Docket 23
09/12/2017
Service: Proper Opposition: Yes
Movant has established cause to GRANT relief from the stay under § 362(d)(1) based on the Debtor’s failure to make postpetition payments and GRANT waiver of 4001(a)
(3) stay the request for termination of the co-debtor stay. Parties to discuss adequate protection and timing and likelihood of sale.
APPEARANCES REQUIRED.
Debtor(s):
Roger James Gardner Represented By Jenny L Doling Summer M Shaw
Movant(s):
Louis J Silvestri and Linda Silvestri, Represented By
Julian K Bach
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA, NATIONAL ASSOCIATION
EH
Docket 12
09/12/17
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. GRANT relief under ¶2 of request for relief.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Namal De Silva Represented By Lionel E Giron
Movant(s):
HSBC Bank USA, National Represented By Daniel K Fujimoto Caren J Castle
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
MOVANT: BANK OF AMERICA NA
EH
Docket 11
09/12/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Joseph Luc Bernard Represented By Marjorie M Johnson
Movant(s):
Bank of America, N.A. Represented By Megan E Lees
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: NISSAN MOTOR ACCEPTANCE
EH
Docket 12
09/12/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Hector Paez Valdez Represented By Carey C Pickford
Joint Debtor(s):
Yolanda Garcia Valdez Represented By Carey C Pickford
Movant(s):
NISSAN MOTOR ACCEPTANCE Represented By
Michael D Vanlochem
10:00 AM
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: THE IRVINE COMPANY, LLC
EH
Docket 25
On July 12, 2017, a Chapter 7 involuntary petition was filed against Integrated Wealth Management Inc. ("Debtor"). On August 11, 2017, the Court, upon stipulation of Debtor and the Petitioning Creditors, extended the deadline for Debtor to respond to the involuntary petition until September 12, 2017.
On August 21, 2017, the Irvine Company (the "Landlord") filed a motion for relief from stay.
On September 7, 2017, the Landlord and Debtor filed a stipulation resolving the motion, which obligates Debtor to turn over possession of leased premises, and for relief from stay to permit setoff of security deposit and termination of lease. The Court is inclined to APPROVE the stipulation, EXCEPT for the setoff provision, which the Court believes is improvident, given Debtor's status as an involuntary debtor, until a Chapter 7 Trustee is appointed.
APPEARANCES REQUIRED.
10:00 AM
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
The Irvine Company, LLC Represented By
R Gibson Pagter Jr.
10:00 AM
MOVANT: STATE FARM BANK FSB
EH
Docket 13
09/12/2017
Service: Proper Opposition: None
The Debtor had two prior cases pending and dismissed within the prior year. On this basis, the Court grants Movant’s request for an order confirming that there is no stay currently in effect as to the Debtor. Based on the multiple bankruptcies affecting the Property, the Court GRANTs relief from the stay under §§ 362(d)(1) and (d)(4).
GRANT waiver of 4001(a)(3) stay. The Court further GRANTS relief under ¶¶ 3, 6, 9(b), and 11. Relief is DENIED under ¶10(b) for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Silvia Alvarez Represented By
Filemon Kevin Samson III
Movant(s):
State Farm Bank, F.S.B. Represented By Jason C Kolbe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
CASE DISMISSED 8/21/17
EH
Docket 10
09/12/17
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(4). Court finds that bankruptcy case was part of a scheme to hinder, delay and defraud creditors based on multiple bankruptcy filings ALSO affecting this property. The Court finds bad faith as to the Debtor. GRANT waiver of 4001(a)(3) stay. GRANT pursuant to ¶¶ 3, 6, and 12.
APPEARANCES REQUIRED.
Debtor(s):
Sergio F Cisneros Pro Se
Movant(s):
U.S. Bank National Association Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: JASON R. OROPEZA
EH
Docket 13
09/12/17
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1). GRANT waiver of 4001(a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Brandon Geoffrey Bosch Represented By Glenn Park
Movant(s):
Jason R. Oropeza Represented By William E Windham
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: BANK OF THE WEST
EH
Docket 12
09/12/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. GRANT relief from the co-debtor stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Luis Desantiago Jr. Pro Se
Movant(s):
BANK OF THE WEST Represented By
Mary Ellmann Tang
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA
CASE DISMISSED 9/1/17
EH
Docket 10
09/12/2017
Service: Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1), (d)(2), and (d)(4). GRANT waiver of 4001(a)(3) stay. As to the Movant’s request for an order confirming the stay is not in effect, the Court finds that the stay terminated on September 1, 2017, when the instant case was dismissed. As to whether a stay was in effect prior to dismissal, the order granting in rem relief in Case No. 2:17-17471-NB was entered on August 15, 2017, but Movant has not provided that the order was recorded so as to effectuate the grant of in rem relief therein, and Movant has not otherwise presented argument as to why the stay would not be in effect.
As to annulment, the Movant has not identified any action taken prior to the entry of the order dismissing the case to warrant such relief. The request for annulment is therefore DENIED.
Court finds that bankruptcy case was part of a scheme to hinder, delay and defraud creditors based on multiple bankruptcy filings and unauthorized transfers affecting this property.
10:00 AM
GRANT waiver of 4001(a)(3) stay. GRANT pursuant to ¶¶ 6, 7(b), 8, 9(b), and 11 of the prayer for relief. DENIED as to ¶¶ 10(b) and 13 for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Carla Lindo Pro Se
Movant(s):
HSBC Bank USA, National Represented By Jason C Kolbe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: JAELYN YOUNG
EH
Docket 13
09/12/2017
The Debtor has provided sufficient evidence that the current chapter 13 plan is proposed in good faith based on her substantial increase in income following a period of unemployment at the end of her prior chapter 13 case, and on that basis will GRANT the Motion and continue the stay.
*The Court notes that on Page 5 of the Motion there is what appears to be a particularly striking typo where the Movant asserts as a basis for good faith that the Debtor is "not gainfully employed".
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Jaelyn Roylene Young Represented By Christopher J Langley
Movant(s):
Jaelyn Roylene Young Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: STASHA LAURAN SILL
EH
Docket 13
- NONE LISTED -
Debtor(s):
Stasha Lauran Sill Represented By Paul Y Lee
Movant(s):
Stasha Lauran Sill Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: GW SAN DIEGO PROPERTIES LLC
EH
Docket 31
09/12/2017
The Debtor’s case was dismissed on 07/07/2017 and the stay terminated on that date. Debtor asserts that the Motion should be denied on this basis as moot. However, the Motion seeks annulment of the stay to validate acts undertaken postpetition and prior to the dismissal. On 09/11/2017, the Court entered a related order annulling the stay as to US Bank to validate the sale of the Property to Movant. To the extent the Property was still subject to the stay after annulment was granted to US Bank, granting of the instant Motion to validate the postpetition Unlawful Detainer acts of Movant is appropriate and consistent with the 09/11/2017 order. The Court is inclined to GRANT the Motion under § 362(d)(1), GRANT Waiver of the 14-day stay, GRANT as to ¶¶ 3, 4, and 11. The Motion is DENIED as to ¶¶ 7, 9 and 10 for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Claudia Acevedo Represented By Richard McAndrew
10:00 AM
Movant(s):
GW San Diego Properties, LLC Represented By Helen G Long
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Also #24 EH
Docket 266
BACKGROUND
On May 11, 2016, Debtor filed a Chapter 11 voluntary petition. Debtor operated a medical account receivable collection service. On November 30, 2016, a Chapter 11 trustee was appointed.
On June 2, 2017, UST filed a motion to dismiss the Chapter 11 case for failure to pay quarterly fees of either $9,750 or $6,825, which were delinquent as of May 1, 2017. On June 13, 2017, the Chapter 11 trustee filed opposition to the motion to dismiss.
DISCUSSION
11 U.S.C. § 1112(b) provides that a case may be dismissed or converted for cause. Section 1112(b)(4) enumerates certain examples of cause, including "failure to pay
2:00 PM
any fees or charges required under chapter 123 of title 28." 28 USC § 1930(a)(6) imposed the statutory fees for Chapter 11 cases. Therefore, cause exists to convert the case when Chapter 11 quarterly fees are not paid.
The Chapter 11 trustee states, however, that $6,000 of the past due fees were paid on June 12, 2017, and that the Chapter 11 trustee will pay the remaining balance.
TENTATIVE RULING
Chapter 11 trustee to inform the Court whether the Chapter 11 quarterly fees have been paid in full.
APPEARANCES REQUIRED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
United States Trustee (RS) Represented By Michael J Bujold
Abram Feuerstein esq Everett L Green Mohammad Tehrani
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer
2:00 PM
Victor A Sahn
2:00 PM
From: 11/8/16, 12/6/16, 1/10/17, 3/7/17,4/4/17, 4/25/17, 6/27/17, 7/11/17
Also #23 EH
Docket 83
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Adv#: 6:16-01279 Allied Injury Management, Inc. v. One Stop Multi-Specialty Medical Group
From: 1/24/17, 3/7/17, 4/25/17, 6/27/17, 7/11/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Nor Cal Pain Management Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
2:00 PM
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
10:00 AM
From: 8/23/17 EH
Docket 15
- NONE LISTED -
Debtor(s):
Raul L Amaya Represented By Daniel King
Joint Debtor(s):
Leslie Amaya Represented By Daniel King
Trustee(s):
Todd A. Frealy (TR) Pro Se
11:00 AM
Docket 19
BACKGROUND
On August 4, 2017, Steven Arzola ("Debtor") filed a Chapter 7 voluntary petition. That same day, Debtor’s attorney, Paul Lee, filed an electronic filing declaration and a statement about social security number, however, the two documents included information for a different debtor. On August 7, 2017, the court issued a notice of dismissal if required documents are not filed within 72 hours. The case was dismissed on August 11, 2017.
On August 14, 2017, Debtor filed a motion to vacate dismissal. The next day, Debtor filed the correct copies of the electronic filing declaration and the statement about your social security number.
DISCUSSION
While Debtor has requested the dismissal be vacated pursuant to Fed. R. Civ. P. Rule 60(b) or 61, or 11 U.S.C. § 105(a), the Central District of California has a local rule governing this situation. Local Rule 1017-(2)(c)(1) states:
11:00 AM
Any motion requesting that the dismissal of a case for failure to timely file a required document or for failure to appear at the meeting of creditors be vacated must include as exhibits to the motion all of the documents that were not timely filed and must be supported by a declaration under penalty of perjury establishing a sufficient explanation why the documents were not timely filed. The motion may be ruled on without further notice or hearing pursuant to LBR 9013-1(q).
Here, while Debtor did not abide by the applicable rule, the documents were separately uploaded. Under Local Rule 1017-(2)(c)(1), a motion to vacate dismissal in this situation can be ruled on without a hearing. For the same rationale as the above rule is founded upon, and in the absence of any opposition, the Court is inclined to grant the motion.
TENTATIVE RULING
The Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Steven Anthony Arzola Represented By Paul Y Lee
Movant(s):
Steven Anthony Arzola Represented By Paul Y Lee
11:00 AM
Trustee(s):
Larry D Simons (TR) Pro Se
11:00 AM
Docket 8
BACKGROUND
On July 25, 2017, Laura Montoya ("Debtor") filed a Chapter 7 voluntary petition. Debtor had previously filed four bankruptcies in the previous two years, all of which were summarily dismissed. On August 9, 2017, UST filed a motion to dismiss case with a re-filing bar.
DISCUSSION
Dismissal
11 U.S.C. § 707(b)(1) permits the Court to dismiss a Chapter 7 case for abuse. 11
U.S.C. § 707(b)(3)(A) states:
(3) In considering under paragraph (1) whether the granting of relief would be an abuse of the provisions of this chapter in a case in which the presumption in
11:00 AM
paragraph (2)(A)(i) does not arise or is rebutted, the court shall consider –
whether the debtor filed the petition in bad faith
In determining whether a case should be dismissed under § 707(b)(3)(A), the Court considers the totality of the circumstances, but is ultimately instructed to consider whether "the debtor’s intention in filing a bankruptcy petition is inconsistent with the Chapter 7 goals of providing a ‘fresh start’ to debtors and maximizing the return to creditors." In re Mitchell, 357 B.R. 142, 154-55 (Bankr. C.D. Cal. 2006) (listing factors to be considered in making that determination).
The majority of the Mitchell factors are inapplicable when, as here, a debtor files a skeletal petition that does not provide the Court with sufficient information to apply the Mitchell test. Only factor seven (history of bankruptcy filings) and, possibly, factor nine (egregious behavior) can be assessed when a debtor files a skeletal petition. Both those factors weigh in favor of dismissal when, as here, a debtor repeatedly files skeletal petitions during a short period of time, and does not disclose previous filings. While § 707(a)(1) and (3) provide for dismissal when a debtor fails to fulfill his duties under the Bankruptcy Code, when a debtor repeatedly filed bankruptcy and fails to evince any attempt to comply with the filing requirements, it can be inferred, absent any indication to the contrary, that the debtor’s purpose in filing bankruptcy is not to take advantage of the fresh start. See, e.g., In re Craighead, 377 B.R. 648, 655 (Bankr.
N.D. Cal. 2007) ("Courts generally hold that when a debtor repeatedly files bankruptcy petitions and then repeatedly fails to file schedules or to comply with other requirements, this pattern of behavior is evidence of bad faith and an attempt to abuse the system."). Dismissal under § 707(b)(3) is appropriate in those circumstances.
Re-Filing Bar
The court is empowered to impose a refiling bar under 11 U.S.C. § 349(a). As Collier
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notes, courts’ analysis of this section is somewhat confused due to confounding "dismissal with prejudice" with "dismissal with injunction against future filings." Collier on Bankruptcy ¶ 349.02[3]; compare In re Garcia, 479 B.R. 488 (Bankr. N.D. Ind. 2012) (denying motion for dismissal with prejudice, but imposing three-year refiling bar) with In re Craighead, 377 B.R. 648 (Bankr. N.D. Cal. 2007) (appearing to equate dismissal with prejudice with an injunction against refiling).
There is also a circuit split concerning whether an injunction on refiling for more than 180 days is allowed under the Bankruptcy Code. Compare In re Frieouf, 938 F.2d 1099 (10th Cir. 1991) (180 days is maximum allowed length of refiling injunction) with Casse v. Key Bank Nat. Ass’n, 198 F.3d 327 (2nd Cir. 1999) (injunction against filing for more than 180 days permissible). 11 U.S.C. § 349(a) reads:
Unless, the court, for cause, orders otherwise, the dismissal of a case under this title does not bar the discharge, in a later case under this title, of debts that were dischargeable in the case dismissed; nor does the dismissal of a case under this title prejudice the debtor with regard to the filing of a subsequent petition under this title, except as provided in section 109(g) of this title.
The disagreement revolves around whether the qualifier "Unless, the court, for cause, orders otherwise" modifies the content after the semi-colon. In re Leavitt noted this disagreement, but since the court was dealing with a dismissal with prejudice, rather than an injunction against refiling, it did not resolve the issue. 209 B.R. 935, 942 (9th Cir. B.A.P. 1997). Within the Ninth Circuit, it appears the trend is to adopt the reasoning of the Second Circuit and allow injunctions for more than 180 days. See e.g. In re Velasques, 2012 WL 8255582 at *3 (Bankr. E.D. Cal. 2012).
Here, Debtor has filed four skeletal bankruptcies in the previous two years and failed to disclose the previous filings. As noted above, the Court has determined that Debtor’s behavior is sufficient to warrant dismissal for bad faith and the Court finds the requested two year refiling bar to be appropriate.
Moreover, Debtor’s failure to oppose is deemed consent to the relief requested pursuant to Local Rule 9013-1(h).
11:00 AM
TENTATIVE RULING
The Court is inclined to GRANT the motion.
APPEARANCES REQUIRED.
Debtor(s):
Laura Montoya Pro Se
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
Trustee(s):
Charles W Daff (TR) Pro Se
11:00 AM
EH
Docket 12
- NONE LISTED -
Debtor(s):
Modern Properties, LLC Represented By Robert L Firth
Movant(s):
Larry D Simons (TR) Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
11:00 AM
EH
Docket 43
BACKGROUND
On April 4, 2017, William & Shawna Mendez ("Debtors") filed a Chapter 7 voluntary petition. On June 13, 2017, the Court authorized the employment of Levene, Neale, Bender, Yoo & Brill L.L.P. as counsel for Trustee.
On July 12, 2017, the Court approved the stipulation of Trustee and Debtors to extend the deadline to file a complaint objecting to discharge until September 1, 2017. On August 23, 2017, Trustee filed a motion for extension of time to file a complaint objecting to discharge. The basis for Trustee’s motion is that, despite three continuances of the meeting of creditors, Debtors have not yet fully complied with Trustee’s requests for information.
DISCUSSION
Fed. R. Bankr. P. Rule 4004(a) states:
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In a chapter 7 case, a complaint, or a motion under § 727(a)(8) or (9) of the Code, objecting to the debtor’s discharge shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). In a chapter 11 case, the complaint shall be filed no later than the first date set for the hearing on confirmation. In a chapter 13 case, a motion objecting to the debtor’s discharge under § 1328(f) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). At least 28 days’ notice of the time so fixed shall be given to the United States trustee and all creditors as provided in Rule 2002(f) and (k) and to the trustee and the trustee’s attorney.
And Fed. R. Bankr. P. Rule 4004(b) states:
On motion of any party in interest, after notice and hearing, the court may for cause extend the time to object to discharge. Except as provided in subdivision (b)(2), the motion shall be filed before the time has expired.
A motion to extent the time to object to discharge may be filed after the time for objection has expired and before discharge is granted if (A) the objection is based on facts that, if learned after the discharge, would provide a basis for revocation under § 727(d) of the Code, and (B) the movant did not have knowledge of those facts in time to permit an objection. The motion shall be filed promptly after the movant discovers the facts on which the objection is based.
Here, Debtor’s delay in providing the requested information constitutes sufficient cause to extend the deadline. See Collier on Bankruptcy ¶ 4004.03[2] (16th ed. 2013) ("A debtor’s delays in responding to discovery may be sufficient cause. Obviously, a delay in the meeting of creditors to a date close to or after the deadline may constitute such cause.") (citing In re McCormack, 244 B.R. 203 (Bankr. D. Conn. 2000)).
Moreover, Debtor’s failure to oppose may be deemed consent to the relief requested pursuant to Local Rule 9013-1(h).
TENTATIVE RULING
11:00 AM
The Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
William A. Mendez II Represented By Thomas J Polis
Joint Debtor(s):
Shawna D. Mendez Represented By Thomas J Polis
Movant(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
11:00 AM
Also #5 EH
Docket 44
BACKGROUND
On April 4, 2017, William & Shawna Mendez ("Debtors") filed a Chapter 7 voluntary petition. On June 13, 2017, the Court authorized the employment of Levene, Neale, Bender, Yoo & Brill L.L.P. as counsel for Trustee.
On June 23, 2017, Trustee filed a notice of intention to release documents. On July 7, 2017, Andrew Hadra & Vertical Partners LLC ("Plaintiffs") filed a non- dischargeability complaint against Debtors. On August 23, 2017, Trustee filed a motion seeking authorization to release Debtors’ documents and records to Plaintiffs. Trustee appears to have filed the motion because, at a continued meeting of creditors on July 17, 2017, Debtors indicated that they objected to the release of the documents. Trustee states that Debtors indicated they may have been willing to consent to a release if a confidentiality agreement was in place, but Debtors have not yet signed the confidentiality agreement prepared by Trustee.
DISCUSSION
11:00 AM
11 U.S.C. § 704(a)(7) states:
The trustee shall –
(7) unless the court orders otherwise, furnish such information concerning the estate and the estate’s administration as is requested by a party in interest
Debtors have not opposed the motion and thus are deemed to consent to the relief requested pursuant to Local Rule 9013-(1)(h).
TENTATIVE RULING
Here, it is unclear from the evidence presented whether the requested documents fall within the definition of § 704(a)(7). Subject to representation from the Trustee in the affirmative, the Court is inclined to GRANT the motion.
APPEARANCES REQUIRED.
Debtor(s):
William A. Mendez II Represented By Thomas J Polis
Joint Debtor(s):
Shawna D. Mendez Represented By
11:00 AM
Movant(s):
Thomas J Polis
Arturo Cisneros (TR) Represented By Todd A Frealy
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
11:00 AM
Docket 26
BACKGROUND
On March 28, 2017, Javier Olivas & Gloria Olguin ("Debtors") filed a Chapter 7 voluntary petition. On July 10, 2017, Debtors received a discharge, and the case was closed on July 11, 2017. On July 24, 2017, Alan Gatto ("Gatto") filed a motion for relief from stay. Gatto received a notice to filer stating that the motion was filed in a closed case and no action would be taken. On August 15, 2017, Gatto filed a motion to reopen the case, and amended the motion the next day.
DISCUSSION
11 U.S.C. § 350(b) states: "A case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause." Paragraph six of Gatto’s declaration appears to indicate that he wishes to file a motion to annul the stay to validate the a state court judgment in an unlawful detainer case.
Gatto’s declaration states that the judgment was entered on June 28, 2016, however, his attached exhibit indicates that the judgment was entered on June 8, 2017.
Motions to reopen bankruptcy cases "should be routinely granted." In re Dodge, 138
11:00 AM
B.R. 602, 605 (Bankr. E.D. Cal. 1992). "While the Code does not define ‘other cause’ for purposes of reopening a case under section 350(b), the decision to reopen is discretionary with the court, which may consider numerous factors, including equitable concerns, and ought to emphasize substance over technical considerations." 3 Collier on Bankruptcy ¶ 350.03[5] (16th ed. 2016). Here, Gatto attempted to file a motion for relief from stay shortly after the case was closed, it does not appear Gatto was noticed of the bankruptcy filing, and this Court is the only court that can provide the requested relief.
Furthermore, the Court deems failure to oppose to be consent to the requested relief.
TENTATIVE RULING
The Court is inclined to GRANT the motion and REOPEN the case for a period of sixty days.
APPEARANCES WAIVED. Movant to lodge an order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued,
Debtor(s):
Javier Ruiz Olivas Represented By Aldo A Flores
Joint Debtor(s):
Gloria Olguin Represented By Aldo A Flores
Movant(s):
Alan Gatto Represented By
Helen G Long
11:00 AM
Trustee(s):
Steven M Speier (TR) Pro Se
11:00 AM
Docket 32
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 914.80 Trustee Expenses: $ 98.76
The Court’s reduction in the requested Trustee’s fees are based on the following: (1) Trustee’s calculation identifies $2,599.81 in proposed distributions (see page 4 of supplemental declaration), yet Trustee’s only proposes $2,576.88 in distributions (see page 9).
Trustee may decline to appear and will be deemed to submit to the tentative, or may appear and argue the proposed reduction.
Debtor(s):
Leila Osiris Lopez Zavala Represented By Curtis R Aijala
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
Docket 74
PROCEDURAL BACKGROUND
On January 11, 2016, Ferdinand Castillo ("Debtor") filed a Chapter 7 voluntary petition. On April 25, 2016, Debtor received a discharge.
On November 3, 2016, the Court authorized the employment of Malcolm Cisneros as Trustee’s counsel. On December 14, 2016, Trustee filed a motion to approve compromise. On December 21, 2016, Trustee filed a motion to sell certain real property located at 2326 Canyon Park Dr., Diamond Bar, CA 91765 (the "Diamond Bar Property"). On January 9, 2017, the Court granted Trustee’s motion to approve compromise and on January 13, 2017, Trustee’s sale motion was granted.
On August 11, 2017, Trustee filed a motion for turnover of property of the estate pursuant to §§ 521(a)(4) and 542(a). Specifically, Trustee requests turnover of rental payments totaling $23,400 and copies of twelve months of bank statements leading up to the petition date.
FACTUAL BACKGROUND
11:00 AM
Initially, Debtor did not list the Diamond Bar Property on Schedules A/B, however, the Diamond Bar Property was referenced through the identification of a Schedule D claim, in the amount of $288,000, secured by the Diamond Bar Property. After Trustee learned that Debtor was on the title to the Diamond Bar Property, Debtor amended Schedules A/B to include the Diamond Bar Property. Debtor included an attachment to the amended schedules that stated the Diamond Bar Property was owned by his son, who resided there, that Debtor was on the title "for purposes of loan application and security only" and that the down payment on the Diamond Bar Property came from his son’s personal injury settlement. Debtor claimed an exemption of $83,600 in the Diamond Bar Property.
Later, after further investigation by Trustee, Debtor indicated that he and his would surrender the Diamond Bar Property for the Trustee to sell. On August 23, 2016, Debtor amended Schedule C, removing the claimed exemption in the Diamond Bar Property. On January 13, 2017, the Court approved a sale of the Diamond Bar Property for $380,000.
Later, Trustee became aware that Debtor’s son did not reside at the Diamond Bar Property, but, instead, Debtor had renting the property to tenants since August 2015, collecting said rents, and concealing the rents from Trustee. Trustee requests turnover of thirteen monthly rental payments of $1,800, and disclosure of Debtor’s bank statements for the year prior to the petition date.
DISCUSSION
11 U.S.C. § 541(a)(1) states:
(a) The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all of the following property,
11:00 AM
wherever located and by whomever held:
Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.
Furthermore, 11 U.S.C. § 541(a)(6) including within the category of property of the estate: "[p]roceeds, product, offspring, rents, or profits of or from property of the estate, except such as are earnings from services performed by an individual debtor after the commencement of the case." Under § 541(a)(1), Debtor’s interest in the Diamond Bar Property because property of the estate, and, under § 541(a)(6), the monthly rent payments became property of the estate.
11 U.S.C. § 521(a)(4) states:
The debtor shall –
(4) if a trustee is serving in the case or an auditor is serving under section 586(f) of title 28, surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers, relating to property of the estate, whether or not immunity is granted under section 344 of this title.
Here, as is noted above, the rental payments are property of the estate. Pursuant to § 521(a)(4), Debtor is required to turn over property of the estate and recorded information related thereto. Furthermore, the Court deems the Debtor’s non- opposition to be consent to the requested relief pursuant to Local Rule 9013-(1)(h).
TENTATIVE RULING
11:00 AM
The Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Ferdinand D Castillo Represented By Walter Scott
Movant(s):
Arturo Cisneros (TR) Represented By William Malcolm Christina J O
Trustee(s):
Arturo Cisneros (TR) Represented By William Malcolm Christina J O
11:00 AM
From: 5/11/16, 6/8/16, 6/29/16, 8/31/16, 10/5/16, 11/9/16, 2/1/17, 5/3/17
EH
Docket 322
05/11/2016
Based on the representations made to the Court by counsel for the Parties that negotiations are ongoing, and based on the consent of the Parties to a continuance, the Court shall CONTINUE the hearing on the Motion to June 8, 2016 at 11:00 a.m.
APPEARANCES ARE WAIVED.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
11:00 AM
D Edward Hays Franklin R Fraley Jr
11:00 AM
From: 4/26/17, 5/10/17, 6/7/17, 7/12/17 EH
Docket 35
- NONE LISTED -
Debtor(s):
Laureen Martha Harley Represented By
James M Powell - DISBARRED - Michael H Raichelson
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
2:00 PM
Adv#: 6:17-01129 Hadra et al v. Mendez et al
- 523(a)(4), fraud as fiduciary, embezzlement, larceny, 68 - Dischargeability - 523(a)(6), willful and malicious injury
EH
Docket 1
- NONE LISTED -
Debtor(s):
William A. Mendez II Represented By Thomas J Polis
Defendant(s):
Shawna D Mendez Represented By Thomas J Polis
William A. Mendez Represented By Thomas J Polis
Joint Debtor(s):
Shawna D. Mendez Represented By Thomas J Polis
Plaintiff(s):
Vertical Partners LLC Represented By Peter W Lianides
Andrew C. Hadra Represented By Peter W Lianides
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
2:00 PM
Adv#: 6:17-01012 Simons v. Kim
U.S.C. §§ 544, 548(a)(1)(A) and (B), 550(a)(1) and (2); and, California Civil Code § 3439, et seq.] Nature of Suit: (13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other)),(91 (Declaratory judgment)
FROM: 3/29/17, 5/3/17, 7/12/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Mee Soon Kim Represented By Minh Duy Nguyen
Defendant(s):
Tae Young Kim Pro Se
Plaintiff(s):
Larry Simons Represented By
Michael W Davis
Trustee(s):
Larry D Simons (TR) Represented By David Seror Michael W Davis
2:00 PM
Adv#: 6:16-01310 Swift Financial Corporation d.b.a. Swift Capital v. Castillo
From: 5/3/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Francisco Javier Castillo Represented By Joseph M Tosti
Defendant(s):
Francisco Javier Castillo Pro Se
Plaintiff(s):
Swift Financial Corporation d.b.a. Represented By
Lazaro E Fernandez
Trustee(s):
Robert Whitmore (TR) Pro Se
2:00 PM
Adv#: 6:16-01211 Olivares v. Dason et al
From: 11/2/16, 1/4/17, 3/1/17, 3/8/17, 6/7/17, 7/26/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Sam Daniel Dason Represented By Robert G Uriarte
Defendant(s):
Sam Daniel Dason Represented By Robert G Uriarte
Joint Debtor(s):
Greeta Sam Dason Represented By Robert G Uriarte
Plaintiff(s):
Juddy Olivares Represented By Lazaro E Fernandez Robert P Goe Charity J Miller
2:00 PM
Trustee(s):
Lynda T. Bui (TR) Represented By Brett Ramsaur
2:00 PM
Adv#: 6:16-01122 Johnson v. NELNET LOAN SERVICES INC et al
From: 7/6/16, 10/5/16, 12/7/16, 3/22/17, 6/21/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Clifford Patrick Johnson Pro Se
Defendant(s):
Educational Credit Management Represented By
Timothy P Burke NELNET LOAN SERVICES INC Pro Se
Plaintiff(s):
Clifford Patrick Johnson Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
2:00 PM
Adv#: 6:16-01199 Revere Financial Corporation v. Bank of Southern California, N.A.
From: 10/19/16, 11/9/16, 11/30/16, 4/12/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Bank of Southern California, N.A. Represented By
Kathryn M.S. Catherwood
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01307 Cisneros v. OIC MEDICAL CORPORATION, a California corporation
A. Cisneros against OIC MEDICAL CORPORATION, a California corporation, LIBERTY ORTHOPEDIC CORPORATION, a California corporation, UNIVERSAL ORTHOPAEDIC GROUP, a California corporation. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 2/24/16, 4/13/16, 6/22/16, 8/24/16, 11/2/16, 2/1/17, 3/8/17, 7/12/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
UNIVERSAL ORTHOPAEDIC Represented By Summer M Shaw George Hanover
LIBERTY ORTHOPEDIC Represented By Summer M Shaw
2:00 PM
George Hanover
OIC MEDICAL CORPORATION, a Represented By
Summer M Shaw George Hanover
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01309 Cisneros v. DOUGLAS J. ROGER, M.D., INC. DEFINED BENEFIT PLAN
A. Cisneros against DOUGLAS J. ROGER, M.D., INC. DEFINED BENEFIT PLAN. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential Transfer (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(14 (Recovery of money/property - other))
From: 12/30/15, 2/24/16, 4/13/16, 6/22/16, 8/24/16, 11/2/16, 2/1/17, 3/8/17, 7/12/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
DOUGLAS J. ROGER, M.D., INC. Represented By
Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01303 Cisneros v. AMERICAN EXPRESS
A. Cisneros against AMERICAN EXPRESS. (Charge To Estate $350). For Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 1/13/16, 3/23/16, 5/25/16, 6/29/16, 8/31/16, 11/2/16, 2/1/17,
5/3/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
AMERICAN EXPRESS Represented By Robert S Lampl Chad V Haes
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01308 Cisneros v. BWI CONSULTING, LLC et al
A. Cisneros against BWI CONSULTING, LLC, Black and White, Inc., BLACK AND WHITE BILLING COMPANY, BLACK AND WHITE INK, MEHRAN DEVELOPMENT CORPORATION. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(14 (Recovery of money/property - other))
From: 1/13/16, 3/23/16, 5/25/16, 7/27/16, 8/31/16, 11/2/16, 2/1/17, 5/3/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
BLACK AND WHITE INK Pro Se
MEHRAN DEVELOPMENT Pro Se
BLACK AND WHITE BILLING Pro Se
BWI CONSULTING, LLC Pro Se
Black and White, Inc. Pro Se
2:00 PM
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01265 Pringle v. Clements-Biehl
From: 2/1/17, 3/29/17, 5/31/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - DISBARRED - Steven L Bryson
Defendant(s):
Rene Clements-Biehl Represented By Allan D Sarver
Plaintiff(s):
John P. Pringle Represented By Elyza P Eshaghi
Brandon J Iskander
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi
2:00 PM
Brandon J Iskander Lynda T Bui
2:00 PM
Adv#: 6:12-01498 Morschauser v. Continental Capital LLC et al
From: 7/26/17 Also #24
EH
Docket 1
09/13/2017
On August 16, 2017, the Court entered its Order Imposing Sanctions ("Sanctions Order") as to Defendant/Cross-Defendants Continental Capital, LLC, Stephen Collias, and their Counsel, for failure to comply with the deadlines imposed by the Court in its May 16, 2017, Order to Show Cause ("OSC"). The Sanctions Order included: (1) a sanction payable to the Court of $500; and (2) attorney’s fees for time spent attending the July 26, 2017, hearing and for time spent preparing declarations in support of the fee sanctions. The Court docketed receipt of the $500 sanctions due to the Court on August 28, 2017.
On August 16, 2017, the sanctioned parties filed their request that the Court reverse its Sanctions Order as to attorney fees, and their alternative opposition to the reasonableness of the fees sought by Bojorquez and Morschauser. The fees sought by each party is set forth below:
2:00 PM
BOJORQUEZ FEE BREAKDOWN
Hourly Rate for Lawrence Kuhlman: $350/hr
Preparation for Status Conference, including call with client re: same – 1.7 hours Travel to/Attendance at Status Conference – 3.9 hours
Draft Declaration re: Fees - .3 hours Total: 5.9 hour x 350 =$2,065 MORSCHAUSER FEE BREAKDOWN
Hourly Rate for Reid Winthrop: $595
Preparation for Status Conference, including call with client re: same – 2.8 hours Travel to/Attendance at Status Conference - 4.3 hours
Draft Declaration re: Fees - .5 hours
Total: 7.6 hours x $595 = $4,522 (Note: a miscalculation of the summation resulted in a request of $4,581.50 for 7.7 hours in the Winthrop Declaration).
As a threshold matter, the sanctioned parties seek reversal of the fee sanctions award. However, there is no authority or analysis provided as to why the modification of the Court’s sanctions award is appropriate under Rule 60. Separately, the Court is not satisfied that the explanation for why the error occurred would warrant setting aside of the sanctions award. Additionally, although the sanctioned parties argue that the "Status Conference" on the OSC would have occurred with or without the error, the Court disagrees that no time was wasted. In particular, the late filing of the responsive pleading by the sanctioned parties necessitated a further hearing for the other parties to reply in order to provide the Court and parties with all of the briefing to permit an informed discussion regarding the bounds of an evidentiary hearing.
2:00 PM
Finally, as to the fees requested, the Court finds that the billing rates are
reasonable and the sanctioned parties have provided no evidence to controvert the reasonableness of the hourly rates. However, the Court shall reduce the fee requests for travel time and time expended in preparation for the July 26 hearing, based on reasonableness of the time entries, reducing 3 hours for Mr. Winthrop and 1.5 hours for Mr. Kuhlman, for a total reduction of $1,758 as to Mr. Winthrop’s fees and a reduction of $525 as to Mr. Kuhlman.
Thus, Mr. Kuhlman’s fee shall be reduced by $525 to $1,540, and Mr.
Winthrop’s fee shall be reduced by $1,785 to $2,737.
APPEARANCES REQUIRED.
Debtor(s):
Devore Stop Represented By
Hutchison B Meltzer
Devore Stop A General Partners Represented By
Arshak Bartoumian - DISBARRED - Newton W Kellam
Defendant(s):
American Business Investments Represented By Lawrence J Kuhlman
Autumn D Spaeth ESQ
Mohammed Abdizadeh Pro Se
Jesse Bojorquez Represented By Lawrence J Kuhlman
Autumn D Spaeth ESQ
Continental Capital LLC Represented By Cara J Hagan
2:00 PM
Stephen Collias Represented By Cara J Hagan
Plaintiff(s):
William G Morschauser Represented By Hutchison B Meltzer Reid A Winthrop
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
Adv#: 6:12-01498 Morschauser v. Continental Capital LLC et al
HOLDING DATE
From: 3/11/15, 5/20/15, 7/29/15, 12/16/15, 2/3/16, 3/16/16, 5/11/16, 8/31/16, 11/2/16, 11/16/16, 3/8/17, 6/7/17, 7/26/17
Also #23 EH
Docket 1
- NONE LISTED -
Debtor(s):
Devore Stop Represented By
Hutchison B Meltzer
Devore Stop A General Partners Represented By
Arshak Bartoumian - DISBARRED - Newton W Kellam
Defendant(s):
American Business Investments Represented By Lawrence J Kuhlman
Autumn D Spaeth ESQ
Mohammed Abdizadeh Pro Se
Jesse Bojorquez Represented By
2:00 PM
Lawrence J Kuhlman Autumn D Spaeth ESQ
Continental Capital LLC Represented By Cara J Hagan
Stephen Collias Represented By Cara J Hagan
Plaintiff(s):
William G Morschauser Represented By Hutchison B Meltzer Reid A Winthrop
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
#1.00 CONT OSC re Order To Docket Information In Support Of Bodily Detention Request Under Seal; And order Issuing Bodily Detention Request for Marla Perez
From: 8/24/17
EH
Docket 68
- NONE LISTED -
Debtor(s):
Denise Barrow Pro Se
Trustee(s):
Howard B Grobstein (TR) Pro Se
12:30 PM
Adv#: 6:17-01029 Cohen v. Bank of America, NA et al
From: 4/6/17, 5/11/17, 6/8/17, 8/17/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard H Brown Jr. Represented By Gary J Holt
Defendant(s):
Ocwen Loan Servicing, LLC Pro Se
Bank of America, NA Pro Se
Plaintiff(s):
Amrane Cohen Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Docket 66
09/14/2017
Background:
On April 13, 2012 ("Petition Date"), Domingo and Maria Solorzano (collectively, the "Debtors") filed for chapter 13 relief. Amrane Cohen is the duly appointed chapter 13 trustee ("Trustee").
On July 11, 2017, the Trustee filed an Objection to Claim No. 6 (the "Objection") of Navient CFC (the "Claimant"). Claimant filed no opposition.
Claim #: 6
Amount: $5,821.56
Objection:
The Trustee objects on the basis that the proof of claim of Claimant was filed more than four years after the claims bar date and after payments under the plan have been completed.
12:30 PM
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
Here, the docket reflects that the claims bar date was August 22, 2012.
Claimant filed its proof of claim on June 5, 2017.
TENTATIVE RULING
The Court agrees with the Trustee’s Objection that the claim must be disallowed based on the Claimant’s failure to timely file a proof of claim. Additionally, the failure of Claimant to file any response or opposition is deemed as consent to the granting of the relief requested pursuant to LBR 9013-1(h).
APPEARANCES REQUIRED.
Debtor(s):
Domingo R Solorzano Represented By William E Windham
Joint Debtor(s):
Maria Josefina Solorzano Represented By William E Windham
12:30 PM
Movant(s):
Amrane (RS) Cohen (TR) Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
Docket 121
09/14/2017
BACKGROUND
On May 31, 2012, Edgar Villegas ("Debtor") filed for chapter 13 relief.
Amrane Cohen is the duly appointed chapter 13 trustee ("Trustee"). On December 28, 2016, the Trustee filed a motion to dismiss the case due to a material default ("MTD"). Specifically, the MTD was based on the failure to provide tax returns and any net refunds for 2012, 2013, 2014, and 2015. The Debtor filed no opposition. At the hearing, the Trustee indicated there had been no opposition and noted that the Debtor’s plan was now entering month 65 (i.e. beyond the statutory period permitted for a chapter 13 plan’s completion). Based thereon, the Court dismissed the case. On August 11, 2017, the Debtor moved this Court to vacate the dismissal ("Motion").
The Debtor asserts that his prior counsel did not inform him of the need to submit tax returns and indicates that around the time that the case was dismissed, his wife passed away and he did not learn of the dismissal until he received notice of the dismissal from the Court. Since learning of the dismissal, Debtor’s counsel asserts that he has the outstanding tax returns which reflects no refunds have been received by the Debtor and that he is prepared to forward those to the Trustee. Additionally, the Debtor’s counsel is holding certified funds in the amount of $5,660.95 to tender towards completion of the plan.
On August 17, 2017, the Trustee filed comments indicating his recommendation that the Motion be granted conditioned on the following:
Debtor providing the 2012, 2013, 2014, and 2015 tax returns; and
Payment of the remaining plan base balance of $3,805.38 (separate from the
$5,660.95 in certified funds which is also necessary to pay the plan off).
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TENTATIVE RULING
Given that the statutory plan period has expired, the Trustee’s conditions are extremely reasonable. The Court’s tentative ruling is to GRANT the Motion on fulfillment of the Trustee’s conditions.
APPEARANCES REQUIRED.
Debtor(s):
Edgar Villegas Represented By Ivette Teran Luis G Torres
Movant(s):
Edgar Villegas Represented By Ivette Teran Luis G Torres
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 160
09/14/2017
Service: Improper. The Motion does not reflect service on Fannie Mae, to which JPMorgan transferred its interest in the lien on the Property as reflected in the claims register on March 25, 2014. Fannie Mae should have been served at the address indicated on the claims register and in accordance with FRBP 7004. Additionally, Wells Fargo was also not served with the Motion.
Separately, the Notice of Motion incorrectly indicates that service was in accordance with LBR 9013-1(q) which regards motions to convert or dismiss, and not, motions to refinance which requires notice under LBR 9013-1(p) and (w). Finally, affected parties are not named in the Notice of Motion.
Background:
Debtor seeks authority to refinance the real property located at 1454 Sycamore Lane in San Bernardino, CA 92408 ("Property"). By his Motion, the Debtor seeks authority to borrow $90,000 from Private Money Lenders, Inc. The following will be paid from proceeds of the loan: a portion of the Wells Fargo lien ($4,432.02) on the Property which was bifurcated pursuant to this Court’s 6/19/2017 Order on Motion to Value (Docket No. 152). There will remain $60,566.45 after payment of the Wells Fargo lien.
Trustee Comments:
The Trustee recommends disapproval for the following reasons:
The Trustee believes based on documents filed in the case that the Debtor still owes
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$4,728.28 in arrears to Fannie Mae (the first lien on the Property). When the case was originally filed, Fannie Mae’s proof of claim indicated that it was owed $26,776.09 in arrears. (Claim No. 8).
Debtors’ Response
The Debtor has made no response to the Trustee’s concern.
TENTATIVE RULING
The Court’s tentative ruling is to DENY the Motion without prejudice based on the foregoing.
Debtor(s):
Michael L Anderson Represented By Javier H Castillo
Movant(s):
Michael L Anderson Represented By Javier H Castillo
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Also #5 EH
Docket 154
- NONE LISTED -
Debtor(s):
Michael L Anderson Represented By Javier H Castillo
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
$750.00, Expenses: $0.00 EH
Docket 67
- NONE LISTED -
Debtor(s):
Jesse Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Rocio Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Movant(s):
Rocio Delgado Represented By
Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Michael Smith
Michael Smith Michael Smith Sundee M Teeple Sundee M Teeple
12:30 PM
Sundee M Teeple
Jesse Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (SA) Cohen (TR)
12:30 PM
From: 8/17/17 EH
Docket 106
09/14/2017
The hearing on this Supplemental Fee Application was continued for the Applicant to provide supplemental evidence in support of its fee request. The Court notes at the outset that the supplement, which is not admissible evidence, includes 1 hour for "attorney representation at hearing" for the May 2, 2017, hearing. However, the Court reviewed the record of the May 2, 2017, hearing and found that there was, in fact, no appearance by counsel for the Debtor at that hearing. For that reason, and as otherwise noted on the record at the 8/17/17 hearing on the Application, the Court is inclined to DENY the Application in its entirety.
APPEARANCES REQUIRED, or Applicant may not appear and be deemed to submit to the tentative.
Debtor(s):
James J Alvarado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple Cynthia L Gibson
Joint Debtor(s):
Pamela P Alvarado Represented By
Dale Parham - INACTIVE -
12:30 PM
Movant(s):
Michael Smith Sundee M Teeple Cynthia L Gibson
Pamela P Alvarado Represented By
Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Michael Smith
Michael Smith Michael Smith Michael Smith Sundee M Teeple Sundee M Teeple Sundee M Teeple Sundee M Teeple Cynthia L Gibson Cynthia L Gibson Cynthia L Gibson Cynthia L Gibson
James J Alvarado Represented By
Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Michael Smith
Michael Smith Michael Smith Michael Smith Michael Smith Sundee M Teeple Sundee M Teeple Sundee M Teeple
12:30 PM
Trustee(s):
Sundee M Teeple Sundee M Teeple Cynthia L Gibson Cynthia L Gibson Cynthia L Gibson Cynthia L Gibson Cynthia L Gibson
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
From: 7/27/17 EH
Docket 73
- NONE LISTED -
Debtor(s):
Tang Pham Represented By
Carey C Pickford
Joint Debtor(s):
Kina Pham Represented By
Carey C Pickford
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 59
- NONE LISTED -
Debtor(s):
Vito Bommarito Represented By
C Scott Rudibaugh
Joint Debtor(s):
Sandra Bommarito Represented By
C Scott Rudibaugh
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
12:31 PM
EH
Docket 99
- NONE LISTED -
Debtor(s):
Jesus Sandoval Represented By Rebecca Tomilowitz
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
EH
Docket 121
- NONE LISTED -
Debtor(s):
Thomas D Felch Represented By Michael F Chekian
Joint Debtor(s):
Michelle M Felch Represented By Michael F Chekian
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
12:31 PM
Also #12 EH
Docket 118
- NONE LISTED -
Debtor(s):
Thomas D Felch Represented By Michael F Chekian
Joint Debtor(s):
Michelle M Felch Represented By Michael F Chekian
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
12:31 PM
Docket 106
- NONE LISTED -
Debtor(s):
Michael Anthony Estrada Represented By John F Brady Lisa H Robinson
Joint Debtor(s):
Laura Estrada Represented By John F Brady Lisa H Robinson
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
12:31 PM
Docket 74
- NONE LISTED -
Debtor(s):
Jose Luis Navarro Represented By Todd L Turoci
Joint Debtor(s):
Alma Gloria Navarro Represented By Todd L Turoci
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
EH
Docket 119
- NONE LISTED -
Debtor(s):
Michael Duane Cummings Represented By Devin Sawdayi
Joint Debtor(s):
Sauna Denise Cummings Represented By Devin Sawdayi
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:32 PM
HOLDING DATE
From: 5/4/17, 8/24/17, 8/31/17 EH
Docket 44
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
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Adv#: 6:16-01277 Reynoso v. Goodman et al
Also #19 & #20 EH
Docket 40
09/14/2017
BACKGROUND
On September 12, 2016, Douglas and Anne Goodman (collectively, "Debtors") filed their petition for chapter 13 relief.
On November 11, 2016, Mark and Natasha Reynoso (collectively, "Plaintiffs") filed a complaint seeking determination of the dischargeability of a debt pursuant to 11 U.S.C. § 523(a)(2)(A) (the "Complaint"). Specifically, Plaintiffs allege that in 2015, they purchased real property located at 1656 West Lisbon Street in Upland, CA (the "Property") from the Debtors, and that a sale was consummated on the misrepresentations of the Debtors’ agent, Theresa Mann, that the Property was 3,231 square feet while Plaintiffs assert that the Property is actually 2,713 square feet (or a difference of 518 square feet). Plaintiffs also assert that they were led to believe that a water leak in the upstairs bathroom had been repaired. Plaintiffs allege that the Debtors knew or should have known that their agent was making false and misleading representations to Plaintiffs. The initial Complaint was dismissed on March 31, 2017, and a first amended complaint filed on April 19, 2017 (the "FAC").
On June 5, 2017, the Debtors filed a Cross-Complaint against Jose Pastora and Theresa Mann (collectively, "Cross-Defendants"), their former real estate agents who they allege were hired to handle the sales transactions and who made the alleged misrepresentations (the "Cross-Complaint").
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On July 18, 2017, the Cross-Defendants filed a Motion to Dismiss the Cross- Complaint ("Motion"). On August 31, 2017, the Debtors filed opposition to the Motion ("Opposition"), and on September 7, 2017, the Cross-Defendants filed their reply ("Reply").
Under Civil Rule 12(b)(6), made applicable in adversary proceedings through Rule 7012, a bankruptcy court may dismiss a complaint if it fails to "state a claim upon which relief can be granted." In reviewing a Civil Rule 12(b)(6) motion, the trial court must accept as true all facts alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.
2001). However, the trial court need not accept as true conclusory allegations in a complaint or legal characterizations cast in the form of factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007);
Hartman v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008).
To avoid dismissal under Civil Rule 12(b)(6), a plaintiff must aver in the complaint "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). It is axiomatic that a claim cannot be plausible when it has no legal basis. A dismissal under Civil Rule 12(b)(6) may be based either on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson
Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir.2008).
DISCUSSION
The primary thrust of the Motion is that a settlement agreement between the Plaintiffs and Cross-Defendants was approved by the Superior Court of San Bernardino ("State Court") on April 4, 2017 (the "Settlement Order"). The Settlement Order purports to bind the Debtors to an agreement that the Cross-Defendants cannot be sued for indemnity in the instant matter.
A [bankruptcy] petition … operates as a stay, applicable to all entities, of:
· The commencement or continuation, including the issuance or employment
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of process, of a judicial, administrative, or other action or proceeding against
the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title. 11 U.S.C. § 362(a)(1); and
· Any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate. 11 U.S.C. § 362(a)(3).
Violations of the automatic stay are void. In re Schwartz, 954 F.2d 569, 571 (9th Cir. 1992). Here, the Court finds that the continuation of the State Court litigation by the Plaintiffs and Respondents without first having sought relief from stay from this Court to continue the litigation resulted in a violation of the stay under both §§ 362(a)(1) and (a)(3). Moreover, the Application for, and thus, entry of the Settlement Order, effectuated deprivation of the estate’s right to pursue an indemnity claim against Respondents in violation of 11 U.S.C. § 362(a)(3). Based on these violations and the failure of Plaintiffs and Respondents to seek obtain relief from stay, the Settlement Order appears to violate the automatic stay, notwithstanding the fact that the Debtors may have received notice of the Application to the State Court. The plain fact is that whether or not the Debtors received notice that Respondents and Plaintiffs were seeking to enter into a settlement in State Court, that Debtors’ rights to respond/object cannot have been abridged by State law because the automatic stay operated to toll any rights of the Debtors under state law during the pendency of the bankruptcy case. Thus, to the extent that the Settlement Order purported to curtail the Debtors’ rights to pursue indemnification, the Settlement Order must be void.
Additionally, the Court underscores that the docket reflects no motion for relief from stay by either the Plaintiffs or the Cross-Defendants seeking to permit them to continue the action against the Debtors in the State Court. Based on the foregoing, the Court is inclined to DENY the Motion to the extent it seeks to dismiss the Cross-Complaint as violative of the Settlement Order.
As to the alternative grounds for dismissal, the Cross-Defendants assert that the Cross-Complaint does not contain sufficient facts to maintain actions for indemnification. However, although the Cross-Defendants are correct that read in isolation the Cross-Complaint does not contain sufficient factual content to survive a motion to dismiss, the Cross-Complaint references the allegations of the FAC regarding false representations made by Theresa Mann regarding the Property.
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Separately, as to Joe Pastora, the Court notes that neither the FAC nor the Cross- Complaint make any specific allegations regarding Joe Pastora’s actions or conduct to sustain any cause of action against him.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to DENY the Motion as to Respondent’s argument that the Settlement Order bars litigation against the Respondents.
Separately, the Court is inclined to GRANT the Motion without prejudice as to Joe Pastora for failure to state a claim; and GRANT the Motion as to Theresa Mann, without prejudice to Debtors right to amend the Cross-Complaint to more specifically incorporate or otherwise restate the allegations contained in the FAC regarding Ms.
Mann’s alleged misrepresentations to the Plaintiffs.
APPEARANCES REQUIRED.
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
12:32 PM
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Jose Pastora Represented By
Andrew L Leff
Theresa Mann Represented By Andrew L Leff
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
From: 8/31/17 Also #18 & #20 EH
Docket 26
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By
12:32 PM
Samer A Nahas Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
(Holding Date)
From: 5/4/17, 8/24/17, 8/31/17 Also #18 & #19
EH
Docket 13
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Douglas Edward Goodman Represented By Edward T Weber
12:32 PM
Anne Louise Goodman Represented By Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 100
- NONE LISTED -
Debtor(s):
Martin Caballero Represented By Luis G Torres
Joint Debtor(s):
Clementina Caballero Represented By Luis G Torres
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 51
09/14/2017
BACKGROUND
On June 2, 2015, Anita Giroth ("Debtor") filed her petition for chapter 13 relief. Rod Danielson is the duly appointed chapter 13 trustee ("Trustee"). On July 6, 2017, a hearing was held on the Trustee’s Motion to Dismiss the Debtor’s Case ("MTD"). The MTD requested dismissal for failure by the Debtor to submit 2016 state tax returns to the Trustee. At the hearing, there was no appearance on behalf of the Debtor and no opposition to the MTD. An order dismissing the case was entered on July 25, 2017.
On August 11, 2017, the Debtor filed her motion to vacate dismissal ("Motion"). On August 15, 2017, the Trustee filed comments recommending approval on the following conditions:
Immediate forwarding to the Trustee of a copy of the 2016 return; and
Debtor to be fully current by the hearing date where Debtor’s counsel must be able to certify he is holding the $2,714.80 necessary to come current (funds to be forwarded to the Trustee after the order vacating the dismissal is entered)
TENTATIVE RULING
The Court finds the Trustee’s conditions reasonable. On representation by the Debtor at the hearing that the Debtor has complied with the Trustee’s conditions, the Court’s tentative ruling is to GRANT the Motion and reinstate the case.
APPEARANCES REQUIRED.
12:32 PM
Debtor(s):
Anita R Giroth Represented By Arturo A Burga
Movant(s):
Anita R Giroth Represented By Arturo A Burga
Trustee(s):
Rod (MH) Danielson (TR) Represented By Arturo A Burga
12:32 PM
EH
Docket 39
09/14/2017
DISCUSSION
Applicant seeks $750 in fees for opposing and reaching an APO on a motion for relief from stay. The Chapter 13 Trustee recommends that Applicant receive $525 as the usual and customary fee for similar tasks. The Court notes that there is no set "no look fee" for an opposition to a motion for relief from stay. However, the Trustee has previously recommended $550 as the usual and customary fee for similar tasks and in the interests of consistency the Court is amenable to allowing fees in the amount of $550.
Here, the Court finds that $550 is reasonable. In particular, when comparing the opposition and stipulation on a motion for relief from stay to similar tasks set forth in the "No Look Fee" schedule, the schedule contemplates $750 or more for motions filed by the Debtor such as a motion to extend/impose stay and a motion to avoid lien under §522(f). The schedule provides only one "no look fee" for an opposition - $350 for opposing a motion to dismiss. In recommending $550/$525, the Trustee has properly recognized that opposing a motion for relief from stay and coming to agreement with opposing counsel on terms of an APO requires more than opposition to a motion to dismiss but less than the work required to file and serve a motion seeking affirmative relief. Finally, the Application itself contains no explanation to indicate that resolution of the Motion for Relief from Stay was out of the ordinary such as to justify a fee above the usual and customary fee being awarded by the Trustee for opposition to motions for relief from stay.
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TENTATIVE RULING
Based on the foregoing, the Court is inclined to allow fees in the amount of $550 as set forth above.
APPEARANCES REQUIRED, or Applicant may not appear and be deemed to submit on the tentative.
Debtor(s):
Ricardo Menendez Represented By Sunita N Sood
Movant(s):
Ricardo Menendez Represented By Sunita N Sood
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 25
- NONE LISTED -
Debtor(s):
Kaleo Mehia Roque Leopoldo Represented By Nicholas M Wajda
Joint Debtor(s):
Andrea Ann Leopoldo Represented By Nicholas M Wajda
Movant(s):
BOPTI Federal Credit Union Represented By
A. Lysa Simon
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #26 & #27 EH
Docket 15
- NONE LISTED -
Debtor(s):
Cary Lee Surface Represented By Lionel E Giron Kevin Tang
Joint Debtor(s):
Amber Dawn Surface Represented By Lionel E Giron Kevin Tang
Movant(s):
Amber Dawn Surface Represented By Lionel E Giron Kevin Tang
Cary Lee Surface Represented By Lionel E Giron Kevin Tang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #25 & #27 EH
Docket 16
- NONE LISTED -
Debtor(s):
Cary Lee Surface Represented By Lionel E Giron Kevin Tang
Joint Debtor(s):
Amber Dawn Surface Represented By Lionel E Giron Kevin Tang
Movant(s):
Amber Dawn Surface Represented By Lionel E Giron Kevin Tang
Cary Lee Surface Represented By Lionel E Giron Kevin Tang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #25 & #26 EH
Docket 0
- NONE LISTED -
Debtor(s):
Cary Lee Surface Represented By Lionel E Giron Kevin Tang
Joint Debtor(s):
Amber Dawn Surface Represented By Lionel E Giron Kevin Tang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Silvia Alvarez Represented By
Filemon Kevin Samson III
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 8/31/17
Also #30 EH
Docket 12
09/14/2017
BACKGROUND
On July 18, 2017, Conchita Ang ("Debtor") filed her petition for chapter 13 relief. The Debtor’s petition commenced her second case pending within the same year as Case No. 16-16362 which was dismissed for abuse on October 12, 2016.
On August 15, 2017, the Debtor filed her Application for Legal Determination/Clarification of Automatic Stay ("Application") apparently seeking an advisory opinion of the Court regarding the extent of the automatic stay in her case. The question appears to arise from the Debtor’s receipt of a "Notice of Bankruptcy Case Filing" from the Court which indicates to debtors that "[u]nder certain circumstances, the stay may be limited to 30 days or not exist at all, although the debtor can request the court to extend or impose a stay."
As a threshold matter, the Application does not appear to request relief that the Court can grant. In particular, the Court is not permitted to provide litigants with advisory opinions. Golden v. Zwickler, 394 U.S. 103, 108, 89 S. Ct. 956, 959, 22 L. Ed. 2d 113 (1969) ((T)he federal courts established pursuant to Article III of the Constitution do not render advisory opinions.). Alternatively, even if the Court were to construe the Application as a request to continue or impose the automatic stay, the Application would be deficient in that it was not served on any creditors and did not
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otherwise comply with the requirements for motions filed pursuant to LBR 9013-1.
For these reasons, and for the reasons stated in the Opposition, the Application is DENIED.
Debtor(s):
Conchita C Ang Pro Se
Movant(s):
Conchita C Ang Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
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(IV) For Sanctions
CASE DISMISSED 8/31/17
Also #29 EH
Docket 14
09/14/2017
BACKGROUND
On July 18, 2017 ("Petition Date"), Conchita Ang ("Debtor") filed her petition for chapter 13 relief. The Debtor’s petition commenced her second case pending within the same year as Case No. 16-16362, which was dismissed for abuse on October 12, 2016.
On August 18, 2017, the Debtor filed her Motion and Notice of Motion for Turnover of Property and: (I) To Enforce the Automatic Stay; (II) For an Order to Show Cause (OSC); (III) To Compel Compliance with the Court Order; (IV) For Sanctions ("Motion").
By her Motion, the Debtor asserts that Clear Recon Corp. and Wells Fargo Bank, N.A. violated the automatic stay by holding a foreclosure sale on the Petition Date. Although it is not clear from the Motion, the foreclosure appears to regard the property located at 2150 Horse Trail Drive in Redlands, CA 92373 (the "Property").
On August 31, 2017, Wells Fargo Bank and Clear Recon Corp. ("Respondents") filed their opposition to the Motion ("Opposition"). The Opposition asserts, in pertinent part, that: (1) a motion for relief from stay which included in rem
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relief was granted on May 18, 2017, (2) that order was recorded on August 10, 2017; and (3) that the Debtor has not asserted any actual damages.
DISCUSSION
As a threshold matter, the Court concurs that the Debtor’s service of her Motion was deficient in that Respondents were not served in accordance with Rule 7004. Nevertheless, Respondents had the opportunity to file their opposition and did so timely. There appearing to be no prejudice to Respondents stemming from the deficiency in service, the Court is disinclined to deny the Motion on this basis.
The Motion seeks issuance of an OSC based on the alleged foreclosure of the Property in violation of the automatic stay.
"A ‘willful violation’ does not require a specific intent to violate the automatic stay. Rather, the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant's actions which violated the stay were intentional. Whether the party believes in good faith that it had a right to the property is not relevant to whether the act was ‘willful’ or whether compensation must be awarded."
Pinkstaff v. United States (In re Pinkstaff), 974 F.2d at 115 (quoting Goichman v. Bloom (In re Bloom), 875 F.2d 224, 227 (9th Cir.1989)) (emphasis added).
Here, the record indicates that the petition was filed at approximately 12:50
p.m. on July 18, 2017. The foreclosure sale was scheduled to begin at 1:00 p.m. that same day (although the Court notes that the Exhibit O which purportedly indicates the sale date and time was not filed with the Court). The Debtor’s declaration is vague as to when she provided notice of the filing to Respondents. Her inauthenticated and inadmissible exhibits do not necessarily help her because they appear to indicate that notice was faxed by her at 1:04 p.m. at the earliest, which is after the sale began. Nevertheless, the foreclosure sale appears to be a technical violation of the stay.
In response to the Motion, the Respondents indicate an in rem order was entered in May 2017 by Judge Zurzolo. However, Respondents did not take appropriate steps to record the order in the county where the Property is located prior
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to the Petition Date (the In Rem Order was not recorded until August 10, 2017, postpetition), and as such the automatic stay was in place at the time of the foreclosure. Based on this failure by the Respondents, issuance of an OSC re: Violation of the Automatic Stay is appropriate because, notwithstanding that holding the foreclosure sale may not have been a willful violation (given the ambiguity surrounding whether Respondents received effective notice prior to holding the sale), the failure to restore title to the Property to the Debtor or to otherwise seek annulment likely constitutes a continuing violation of the stay which Respondents did not cure during the remaining pendency of the Debtor’s case (Respondents do not acknowledge when they had notice of the bankruptcy but also do not dispute that they received notice at some point). In re Wallace, 2014 WL 1244792, at *6 (B.A.P. 9th Cir. Mar. 26, 2014)(discussing the interplay between an action for damages under 362
with related orders annulling the stay).
Based on the foregoing, the Court’s tentative ruling is to issue an Order to Show Cause Why:
The foreclosure sale should not be set aside as a void act taken in violation of the automatic stay; and
Why the Debtor should not be awarded actual damages under either § 362(k) or § 105(a) to compensate her for damages stemming from the violation.
APPEARANCES REQUIRED.
Debtor(s):
Conchita C Ang Pro Se
Movant(s):
Conchita C Ang Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Daniel Garcia Represented By Rebecca Tomilowitz
Joint Debtor(s):
Maria Garcia Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 10
09/14/2017
BACKGROUND
On July 24, 2017 ("Petition Date"), Jose Guadalupe Rodriguez (the "Debtor") filed his petition for chapter 13 relief.
On August 11, 2017, the Office of the United States Trustee ("UST") filed a Motion to Dismiss Chapter 13 Case with a Re-Filing Bar (the "Motion"). No opposition has been filed.
DISCUSSION
As set forth by the Ninth Circuit in In re Leavitt, 171 F.3d 1219, 1224 (9th Cir.
1999), bad faith, as cause for the dismissal of a Chapter 13 petition with prejudice, involves the application of the "totality of the circumstances" test. In re Eisen, 14 F.3d 469, 470 (9th Cir.1994). The Ninth Circuit has instructed courts deciding whether to dismiss a Chapter 13 petition to consider the following factors:
whether the debtor "misrepresented facts in his [petition or] plan, unfairly manipulated the Bankruptcy Code, or otherwise [filed] his Chapter 13 [petition or] plan in an inequitable manner," id. (citing In re Goeb, 675 F.2d 1386, 1391 (9th Cir.1982));
"the debtor's history of filings and dismissals," id. (citing In re Nash, 765 F.2d 1410, 1415 (9th Cir.1985));
whether "the debtor only intended to defeat state court litigation," id. (citing In re Chinichian, 784 F.2d 1440, 1445–46 (9th Cir.1986)); and
whether egregious behavior is present, In re Tomlin, 105 F.3d 933, 937 (4th
12:32 PM
Cir.1997); In re Bradley, 38 B.R. 425, 432 (Bankr.C.D.Cal.1984).
A finding of bad faith does not require fraudulent intent by the debtor.
[N]either malice nor actual fraud is required to find a lack of good faith. The bankruptcy judge is not required to have evidence of debtor ill will directed at creditors, or that debtor was affirmatively attempting to violate the law-malfeasance is not a prerequisite to bad faith.
In re Powers, 135 B.R. 980, 994 (Bankr.C.D.Cal.1991) (relying on In re Waldron, 785 F.2d 936, 941 (11th Cir.1986)).
Here, the UST asserts as grounds for dismissal that:
The Debtor filed a skeletal petition on July 24, 2017;
The Debtor filed three prior cases: Case No. 16-18169, Case No. 17-15323, and Case No. 99-15080, which the Debtor failed to disclose in his instant petition;
The Debtor’s most recent prior case, Case No. 17-15323 was dismissed for failure to file information;
The Debtor received a discharge on December 27, 2016 and is not eligible to receive a discharge in the current case; and
The Debtor’s master mailing matrix lists only one mortgage/foreclosure related creditor.
The UST asserts that based on the Debtor’s ineligibility to a discharge, the dismissal of his prior case for failure to file documents, the failure of the Debtor to disclose prior filings in sworn statements, and the filing of the instant case seemingly for no other purpose than to frustrate creditors seeking foreclosure, dismissal with a bar is warranted.
Here, for the reasons set forth by the UST, the Court finds that cause exists to dismiss the Debtor’s case. Additionally, the Debtors ineligibility for discharge and apparent attempts to file bankruptcy for the sole purpose of forestalling a foreclosure warrants a one-year bar under the Court’s § 105 and § 349 authority as requested by the UST.
12:32 PM
TENTATIVE RULING
Based on the foregoing, including the Debtor’s failure to file opposition which this Court deems as consent to the granting of the Motion under LBR 9013-1(h), the Court is inclined to GRANT the Motion in its entirety.
APPEARANCES REQUIRED.
Debtor(s):
Jose Guadalupe Rodriguez Pro Se
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #32 EH
Docket 0
- NONE LISTED -
Debtor(s):
Jose Guadalupe Rodriguez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ruben Quintero Palafox Jr. Represented By Yoon O Ham
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Samuel T Saavedra Represented By Michael R Totaro
Joint Debtor(s):
Suzanne M Saavedra Represented By Michael R Totaro
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 2
- NONE LISTED -
Debtor(s):
Ty Nicholas Garner Sr. Represented By Richard E Chang
Joint Debtor(s):
Diane Lynn Garner Represented By Richard E Chang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Christopher Ramirez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 10
- NONE LISTED -
Debtor(s):
William Robert Bakal Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Fernando Gomez Represented By Majid Safaie
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Juana Rodriguez Represented By Alon Darvish
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sergio F Cisneros Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 2
- NONE LISTED -
Debtor(s):
Oscar Avila Represented By
Sanaz S Bereliani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Elizabeth Jucaban Tuason Represented By Brad Weil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #45 EH
Docket 23
09/14/2017
BACKGROUND
On August 3, 2017 ("Petition Date"), Adriana Brodie ("Debtor") filed her petition for chapter 13 relief. Rod Danielson is the duly appointed chapter 13 trustee ("Trustee").
On August 8, 2017, the case was dismissed for failure by the Debtor to file initial schedules by the Court imposed deadline. Specifically, the Court had issued a notice on August 4, 2017, that the case would be dismissed if the Debtor did not provide a statement of social security number, electronic filing declaration, and master mailing matrix list of creditors within 72 hours. The Court clarified in a Notice to Filer that although the Statement of Social Security and Declaration of Electronic Filing had been filed, that they had not been signed. The Debtor did not correct the deficiencies and the case was dismissed.
The Debtor attempted to cure the deficiencies and filed an "Emergency Motion to Vacate Dismissal" on August 8, 2017 (the same date as the dismissal). On August 11, 2017, the Court denied the Debtor’s Emergency Motion because the Debtor only cured two of the deficiencies for which the case was dismissed – having filed an amended Statement of Social Security and Electronic Filing Declaration but no creditor mailing matrix.
On August 14, 2017, the Debtor filed a second Emergency Motion to Vacate Dismissal (the "Motion"). The Trustee filed comments on August 15, 2017,
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recommending disapproval and indicated that Counsel for the Debtor has failed to provide an explanation which would warrant vacating the dismissal.
TENTATIVE RULING
The Court has confirmed with the Clerk’s office that the three deficiencies which resulted in the dismissal have now been cured. However, the Debtor’s case was filed as skeletal on the Petition Date and since the dismissal of the case the balance of schedules has come due.
The Court is inclined to GRANT the Motion conditioned on the Debtor filing all remaining schedules which have come due since the case was dismissed.
APPEARANCES REQUIRED.
Debtor(s):
Adriana Brodie Represented By Aalok Sikand
Movant(s):
Adriana Brodie Represented By Aalok Sikand
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 8/8/17
Also #44 EH
Docket 0
- NONE LISTED -
Debtor(s):
Adriana Brodie Represented By Aalok Sikand
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Elena Louise Gutierrez Represented By Lionel E Giron
Trustee(s):
Larry D Simons (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Raul R Robles Represented By Jose Perez
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 11
- NONE LISTED -
Debtor(s):
Antoine Hossein Babai Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Frank Ramirez Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Robert Bruce Dunham Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 2
- NONE LISTED -
Debtor(s):
Salvador Caridad Rodriguez Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 6
- NONE LISTED -
Debtor(s):
Cindy Louise Lawson Represented By Gary S Saunders
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Larry Gene Hannah Represented By Leslie Richards
Joint Debtor(s):
Susan Harris Hahhah Represented By Leslie Richards
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 13
- NONE LISTED -
Debtor(s):
Kathleen Flynn Represented By Freddie V Vega
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Anisha Christel Wilson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kalenga Patrick Munongo Represented By Paul Y Lee
Joint Debtor(s):
Janelle Nicole Munongo Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
Rod (MJ) Danielson (TR) Pro Se
12:33 PM
Docket 57
- NONE LISTED -
Debtor(s):
Douglas Lee Blair Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 151
- NONE LISTED -
Debtor(s):
Ronald Andrew Lopez Represented By David Lozano
Joint Debtor(s):
Lisa Darlene Lopez Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:33 PM
EH
Docket 63
- NONE LISTED -
Debtor(s):
David R. Roberts Represented By Javier H Castillo
Joint Debtor(s):
Crystal A Roberts Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 50
- NONE LISTED -
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 128
- NONE LISTED -
Debtor(s):
Leslie R Williams Represented By Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 74
- NONE LISTED -
Debtor(s):
Anthony E Turkson Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 75
- NONE LISTED -
Debtor(s):
William R Parker Represented By Julie J Villalobos
Joint Debtor(s):
Cheryl Parker Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 45
- NONE LISTED -
Debtor(s):
Eric Kissell Represented By
William J Howell
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 44
- NONE LISTED -
Debtor(s):
Darna Poole Represented By
Todd B Becker
Joint Debtor(s):
Jerry Poole Represented By
Todd B Becker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 72
- NONE LISTED -
Debtor(s):
Jose Luis Ceballos Represented By David Lozano
Joint Debtor(s):
Edelmira Castro Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
Sherry Ann Beardsley Represented By Jeffrey D Larkin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 108
- NONE LISTED -
Debtor(s):
Edward Edmund Zozaya Represented By Dana Travis
Joint Debtor(s):
Georgia Parrilla Zozaya Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 22
- NONE LISTED -
Debtor(s):
Pamela Lynn King Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 31
- NONE LISTED -
Debtor(s):
Sandra M. Hankins Represented By Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 29
- NONE LISTED -
Debtor(s):
Gabriel Cruz Represented By
Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
EH
Docket 135
Debtor(s):
Matthew Joseph Pautz Represented By Stephen D Brittain
Joint Debtor(s):
Alice Louise Pautz Represented By Stephen D Brittain
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
10:00 AM
MOVANT: CONSUMER PORTFOLIO SERVICES, INC.
EH
Docket 36
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under
¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Beatriz Esqueda Represented By Rebecca Tomilowitz
Movant(s):
Consumer Portfolio Services, Inc. Represented By
Ryan M Davies
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HONDA LEASE TRUST
EH
Docket 9
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Jose Cruz Ramirez Represented By Stephen B Mashney
Joint Debtor(s):
Gilda Roxana Ramirez Represented By Stephen B Mashney
Movant(s):
HONDA LEASE TRUST Represented By
10:00 AM
Trustee(s):
Vincent V Frounjian
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: DITECH FINANCIAL LLC
EH
Docket 11
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Marcus Edward Kanavalov Sr Pro Se
Movant(s):
Ditech Financial LLC Represented By Alexander K Lee
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: SUNNYMEAD RANCH PLANNED COMMUNITY ASSOCIATION
EH
Docket 24
9/19/17
Discussion:
On June 29, 2017, at 7:48 a.m., Meghan McConaghy ("Debtor") filed a Chapter 13 voluntary petition. At 9:00 a.m. of the same day, Debtor’s residence was foreclosed upon. At 9:58 a.m., Debtor faxed notice of her bankruptcy filing to the Riverside County Sheriff. At 3:04 p.m., Debtor faxed notice of her bankruptcy filing to Movant’s counsel. The instant bankruptcy case was the second time in six months that Debtor filed bankruptcy within twenty-four hours of a scheduled foreclosure sale.
On August 11, 2017, Movant filed a motion to annul the automatic stay. On September 5, 2017, Debtor filed her opposition to the motion.
11 U.S.C. § 362(d) states:
10:00 AM
On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided, under subsection (a) of this section such as by terminating, annulling, modifying, or condition such stay –
(emphasis added); see also In re Schwartz, 954 F.2d 569, 573 (9th Cir. 1992) ("If a creditor obtains retroactive relief under section 362(d), there is no violation of the automatic stay, and whether violations of the stay are void or voidable is not at issue.").
The BAP, in In re Fjeldsted, noted the absence of a clear standard for annulment of the automatic stay. 293 B.R. 12, 21 (B.A.P. 9th Cir. 2003) ("There is less appellate clarity, however, in enunciating a test for retroactive stay relief. Inconsistent standards have thus developed, which run the gamut from such relief being justified only in ‘extreme circumstances’ to giving the court ‘wide latitude’ to ‘balance the equities’ on a case-by-case basis."). The BAP’s most recent announcement of the standard for annulment of the automatic stay stated the following:
Determining whether cause exists to annul the stay is a case-by-case inquiry based on a balance of the equities. In conducting this inquiry the bankruptcy court, among other factors, should consider whether the creditor knew of the bankruptcy when violating the stay and whether the debtor’s conduct was unreasonable, inequitable or prejudicial to the creditor.
In Fjeldsted, we approved additional factors for consideration in assessing the equities. The twelve nonexclusive factors are: (1) number of filings; (2) whether, in a repeat filing case, the circumstances indicate an intention to delay and hinder creditors; (3) a weighing of the extent of prejudice to creditors or third parties if the stay relief is not made retroactive, including whether harm exists to a bona fide purchaser; (4) the debtor’s overall good
10:00 AM
faith (totality of circumstances test); (5) whether creditors knew of stay but nonetheless took action, thus compounding the problem; (6) whether the debtor has complied, and is otherwise complying, with the Bankruptcy Code and Rules; (7) the relative ease of restoring parties to the status quo ante; (8) the costs of annulment to debtors and creditors; (9) how quickly creditors moved for annulment, or how quickly debtor moved to set aside the sale or violative conduct; (10) whether, after learning of the bankruptcy, creditors proceeded to take steps in continued violation of the stay, or whether they moved expeditiously to gain relief; (11) whether annulment of the stay will
cause irreparable injury to the debtor; and (12) whether stay relief will promote judicial economy or other efficiencies. The Panel in Fjeldsted cautioned that the twelve factors are merely a framework for analysis and not a scorecard, and that in any given case, one factor may so outweigh the others as to be dispositive.
In re Estavan Capital LLC, 2015 WL 7758494 at *5 (B.A.P. 9th Cir. 2015) (citations and quotations omitted).
While Fjeldsted cautioned that the enumerated factors are not a scorecard, it is clear that the majority of the factors, including, in particular, Debtor’s lack of good faith, weigh in favor of annulling the stay. Specifically, this is a repeat filing case, with both bankruptcy filings occurring shortly before a scheduled foreclosure sale. The evidence indicates that Movant was not informed of the bankruptcy filing prior to the foreclosure sale, and that Movant did not take further steps in violation of the automatic stay after the foreclosure sale. Finally, the property was purchased at a foreclosure sale, and harm will exist to the purchaser if the stay is not annulled.
In its opposition, Debtor cites and applies an incorrect legal standard. Relying on In re Am. Spectrum Realty, Inc., 540 B.R. 730 (Bankr. C.D. Cal. 2015), Debtor argues that the Curtis factors apply and that the factors weigh in favor of denying the motion. The Curtis factors do not apply to a motion to annul the automatic stay. The case relied upon by Debtor contains two different sections, one dealing with relief from the automatic stay, and the other dealing with annulment of the automatic stay. In the
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former, the Court cites the Curtis factors and, in the latter, the Court cites the
Fjeldsted factors. Debtor’s reliance on the Curtis factors here is misplaced.
In light of the absence of any pre-sale notice to Movant of Debtor’s bankruptcy filing, and Debtor’s multiple bankruptcy filings on the eve of foreclosure sales, among other reasons, the Court is inclined to GRANT the motion and ANNUL the automatic stay retroactive to the petition date.
APPEARANCES REQUIRED.
Debtor(s):
Meghan McConaghy Represented By Nicholas M Wajda
Movant(s):
Sunnymead Ranch Planned Represented By Erin A Maloney
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: JARNNE J. GARDNER
EH
Docket 28
Service is Proper in the circumstances Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES REQUIRED.
Debtor(s):
Denise Lynn Valeski Represented By Gordon L Dayton
Movant(s):
Jarnne J. Gardner Represented By Barry L O'Connor
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: SANTANDER CONSUMER USA INC
EH
Docket 10
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Martha Lorena Soto Jimenez Represented By Marlin Branstetter
Movant(s):
Santander Consumer USA Inc. dba Represented By
Sheryl K Ith
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: FIRST INVESTORS FINANCIAL SERVICES
EH
Docket 14
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Luis Desantiago Jr. Pro Se
Movant(s):
First Investors Financial Services Represented By
Sheryl K Ith
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: STASHA LAURAN SILL
From: 9/12/17 EH
Docket 13
The Court is inclined to DENY the motion for lack of cause shown. Specifically, Debtor’s previous Chapter 13 case was dismissed because: (1) Debtor was incarcerated at the time of the confirmation hearing; and (2) Debtor’s proposed plan was clearly infeasible. While Debtor is no longer incarcerated, she has not yet obtained employment. As a substitution, Debtor has provided declarations from her mother and brother indicating that they will contribute more than $7,000/month to fund her plan. The evidence submitted, however, does not substantiate the amount identified. Regarding Debtor’s mother, the statement of contribution lists
$5,000/month from working as a real estate broker and $1,000/month from music royalties. The payment statements attached, however, indicate that Debtor’s receives approximately $1,100/month from broker services and approximately $245/month from music royalties. Regarding Debtor’s brother, the statement of contribution lists net income of $2,900/month, however, the payment statements attached, while varying in amount, indicates Debtor’s brother receives less than half that amount.
Therefore, Debtor has failed to establish she has the means to propose a feasible plan.
APPEARANCES REQUIRED.
10:00 AM
Debtor(s):
Stasha Lauran Sill Represented By Paul Y Lee
Movant(s):
Stasha Lauran Sill Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: LIVEBYTHEPARK PALM SPRINGS
EH
Docket 9
Service: Improper Opposition: None
Notice is improper. The notice of motion indicates opposition is due both fourteen days before the hearing, and at the hearing. Subject to opposition at the hearing, the Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. GRANT request under ¶ 9 upon recording of order. DENY requests under ¶¶ 7 and 11 for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Catherine Lucille Laff Pro Se
Movant(s):
LivebythePark Palm Springs Represented By Barry L O'Connor
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
Also #11 & #12 EH
Docket 81
9/19/2017
On January 30, 2017, Bausman & Company, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. On April 5, 2017, Procopio, Cory, Hargeaves & Savitch LLP ("Applicant") filed an employment application seeking authorization of its employment nunc pro tunc as of January 30, 2017. Applicant’s employment application was approved by the Court on May 18, 2017.
On June 30, 2017, Applicant filed the instant fee application.
The Court has reviewed the requested fees and, noting that the absence of any opposition, considers the fees to be generally reasonable. The Court notes the following three issues with the fee application:
2:00 PM
Applicant requested that its employment be approved nunc pro tunc to January 30, 2017. Nevertheless, Applicant has billed $1,494.30 for services provided before the authorization of its employment. These entries have been eliminated below.
Applicant has billed for the preparation of a few motions that do not appear to have been filed. In addition to three time entries on January 29, 2017, which were already counted above, Applicant lists a 1.7 hour entry on May 3, 2017, for preparation of "multiple procedural motions" and 2.5 hours on May 4, 2017, for preparation of a motion to convert. The former entry is vague and unclear; the latter entry appears excessive since the conversion motion is a form motion that required simply checking a few boxes. These two entries, totaling $1,205, have been eliminated below.
The majority of the early billing entries of Applicant’s paralegal contain lumping. While this practice appears to have been corrected in early April, the court notes that for each of the following thirteen time entries, the reasonableness of the entry cannot be ascertained, or it appears that the requested fee is unreasonable:
a) February 1, 2017 ($652.50)
b) February 3, 2017 ($922.50)
c) February 6, 2017 ($843.75)
d) February 7, 2017 ($472.50)
e) February 7, 2017 ($720.00)
f) February 14, 2017 ($652.50)
g) February 15, 2017 ($337.50)
h) February 22, 2017 ($247.50)
i) February 27, 2017 ($787.50)
j) February 28, 2017 ($787.50)
k) March 2, 2017 ($270.00)
l) March 3, 2017 ($337.50)
m) March 7, 2017 ($315.00)
These thirteen entries, totaling $7,346.25, have been eliminated in the total below.
2:00 PM
Overall, the Court is inclined to reduce the requested fees by $10,045.55 for the reasons stated above. The Court is inclined to ALLOW the remaining fees of
$96,565.70 and expenses of $3,936.82, without prejudice to Applicant’s ability to seek approval of additional fees. The request for payment of allowed fees and expenses is DENIED without prejudice to Applicant’s right to seek payment after conversion.
APPEARANCE REQUIRED.
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
Movant(s):
Bausman and Company Incorporated Represented By
William A Smelko
2:00 PM
EH
Docket 83
BACKGROUND
On January 30, 2017, Bausman & Company, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. Debtor has not yet filed its disclosure statement or a Chapter 11 plan. On June 30, 2017, Debtor filed a motion to convert to Chapter 7, citing inability to confirm a plan, cancellation of insurance, and ongoing operating losses.
DISCUSSION
11 U.S.C. § 1112(a) states:
The debtor may convert a case under this chapter to a case under chapter 7 of this title unless –
the debtor is not a debtor in possession;
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the case originally was commenced as an involuntary case under this chapter; or
the case was converted to a case under this chapter other than on the debtor’s request
None of the three conditions listed above are applicable in this case. When none of the three listed conditions are applicable, Debtor has an absolute right to conversion. See, e.g., In re Dieckhaus Stationers of King of Prussia, Inc., 73 B.R. 969, 971 (Bankr.
E.D. Pa. 1987) ("The former provision [§ 1112(a)], by its terms, gives the debtor an absolute right to convert, unless the case is governed by one of the enumerated exceptions. The legislative history confirms Congress’ intent to give debtors an absolute right to convert from chapter 11 to chapter 7."). Furthermore, no opposition to Debtor’s motion has been filed.
TENTATIVE RULING
The Court is inclined to GRANT the motion and CONVERT the case to Chapter 7.
APPERANCES REQUIRED.
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
Movant(s):
Bausman and Company Incorporated Represented By
William A Smelko
2:00 PM
From: 2/28/17, 4/11/17, 7/18/17, 7/25/17 Also #10 & #11
EH
Docket 6
- NONE LISTED -
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
11:00 AM
Docket 32
09/20/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 1,546
APPEARANCES WAIVED. The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
Debtor(s):
David Richard Hernandez Represented By William S Tilton
Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
Docket 37
09/20/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 1,090.02
APPEARANCES WAIVED. The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
Debtor(s):
Amanda L. Davis Represented By Mathew Alden
Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
EH
Docket 36
BACKGROUND
On April 6, 2016, Luz Castro ("Debtor") filed a Chapter 7 voluntary petition. On January 9, 2017, Trustee filed an adversary proceeding against Enrique Castro ("Defendant") for: (1) avoidance of fraudulent transfer; and (2) recovery of avoided transfer. The subject of the adversary proceeding was certain real property located at 2035 Caseros Drive, San Jacinto, California 92592 (the "Property").
According to Trustee, Defendant acquired the Property shortly before the marriage of Defendant and Debtor. During the marriage, however, community property income was used to make mortgage payments, causing the community estate to acquire an interest in the Property. On March 31, 2015, Debtor transferred her interest in the property to Defendant. Trustee asserts that Debtor did not receive reasonably equivalent value for the transfer.
At the hearing on August 23, 2017, the Court required supplemental evidence regarding the value of the Property or the value of the community estate’s interest in the Property to evaluate the reasonableness of the proposed settlement. On August 29,
11:00 AM
2017, the Trustee filed his supplemental points and authorities. No opposition has been filed.
DISCUSSION
Fed. R. Bankr. P. Rule 9019 provides that:
On motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct.
The Ninth Circuit Court of Appeals have previously outlined the factors to be considered in approving a compromise pursuant to Rule 9019: (1) the probability of success in the litigation; (2) the difficulties to be encountered in the matter of collection; (3) the complexity, expense, inconvenience and delay of litigation; and (4) the interest of creditors with deference to their reasonable. See In re A&C Props., 784 F.2d 1377, 1381 (9th Cir. 1986). The listed factors assist the Court in determining "the fairness, reasonableness and adequacy of a proposed settlement agreement." Id.
The Court has reviewed the Trustee’s supplemental declaration. Based on the Trustee’s calculation of the estate’s interest in the Property at the time of the transfer of $17,387, and accounting for the fact that the Debtor received $2,100 from the refinance of the Property, it appears that the Debtor’s estate is entitled to approximately $15,287 from the Property. The Trustee has indicated that the proposed settlement shall yield $10,000 for the estate within 60 days of the Court’s entry of an order approving the settlement. Here, given the likelihood that attorney’s fees for prosecution of the adversary would likely exceed the difference between the settlement amount and the $15,287 figure, the Court finds that the Trustee’s judgment is reasonable and the Motion comports with the standard set forth in In re A&C Props, 784 F.2d 1377, 1381.
11:00 AM
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the motion in its entirety.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
8/23/17
BACKGROUND
On April 6, 2016, Luz Castro ("Debtor") filed a Chapter 7 voluntary petition. On January 9, 2017, Trustee filed an adversary proceeding against Enrique Castro ("Defendant") for: (1) avoidance of fraudulent transfer; and (2) recovery of avoided transfer. The subject of the adversary proceeding was certain real property located at 2035 Caseros Drive, San Jacinto, California 92592 (the "Property").
According to Trustee, Defendant acquired the Property shortly before the marriage of Defendant and Debtor. During the marriage, however, community property income was used to make mortgage payments, causing the community estate to acquire an interest in the Property. On March 31, 2015, Debtor transferred her interest in the property to Defendant. Trustee asserts that Debtor did not receive reasonably equivalent value for the transfer.
11:00 AM
On July 6, 2017, Trustee filed a motion to approve compromise pursuant to Fed. R. Bankr. P. Rule 9019. Trustee proposes to settle the adversary proceeding for $10,000. On July 28, 2017, the matter was set for hearing.
DISCUSSION
Fed. R. Bankr. P. Rule 9019 provides that:
On motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct.
The Ninth Circuit Court of Appeals have previously outlined the factors to be considered in approving a compromise pursuant to Rule 9019: (1) the probability of success in the litigation; (2) the difficulties to be encountered in the matter of collection; (3) the complexity, expense, inconvenience and delay of litigation; and (4) the interest of creditors with deference to their reasonable. See In re A&C Props., 784 F.2d 1377, 1381 (9th Cir. 1986). The listed factors assist the Court in determining "the fairness, reasonableness and adequacy of a proposed settlement agreement." Id.
Trustee’s compromise motion does not provide the information the Court requires to apply the A&C Properties factors or to assess the reasonableness of the settlement. First and foremost, the motion fails to identify the value of the Property or the value of the community estate’s interest in the property, rendering it impossible to determining the reasonableness of the settlement amount. Additionally, the motion addresses the A&C Properties factors in cursory, boiler-plate language. Regarding factor (1), the motion simply states that success in the adversary is not guaranteed. Regarding factor (2), the motion states that Trustee would have to sell the Property if the adversary
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proceeding were successful. Regarding factor (3), the motion states that the adversary is "not overly complex" but additional fees would result. Regarding factor (4), the motion states that the settlement would provide funds for creditors.
In the absence of any evidence regarding the value of the Property or the value of the community estate’s interest in the Property, the Court cannot approve the compromise when only general arguments have made in its support.
TENTATIVE RULING
The Court is inclined to DENY the motion or CONTINUE for supplemental pleading to allow the Court to evaluate the reasonableness of the proposed settlement amount.
APPEARANCES REQUIRED.
Debtor(s):
Luz Ampelia Castro Represented By George P Hobson Jr
Movant(s):
Arturo Cisneros (TR) Represented By Todd A Frealy Carmela Pagay
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy Carmela Pagay
11:00 AM
EH
Docket 148
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Movant(s):
Hilder & Associates Represented By
Lei Lei Wang Ekvall
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
11:00 AM
From: 8/23/17 EH
Docket 472
The 8/23/17 tentative ruling required that Movant file and serve an amended notice of hearing on Brian Ostler. Movant did not appear at the 8/23/17 hearing and having now failed to comply with the Court's prior tentative ruling, the Court's tentative ruling is to deny the Motion.
Debtor’s motion indicates that Brian Ostler was to be served by the Court via Notice of Electronic Filing. Brian Ostler, is not, however, on the Electronic Mail Notice List to receive NEF transmission. Therefore, the Court is inclined to CONTINUE the matter to September 20, 2017, at 11:00 a.m. for proper service on Brian Ostler and his law office. Movant to serve the motion and notice of hearing on Mr. Ostler and his law firm.
APPEARANCES WAIVED.
11:00 AM
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Movant(s):
Nabeel Slaieh Represented By George A Saba George A Saba
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
11:00 AM
(Holding date)
From: 10/1/14, 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 10/21/15, 11/18/15, 12/16/15, 1/13/16, 3/2/16, 5/4/16, 6/1/16, 9/28/16, 11/16/16,
2/1/17, 2/16/17, 5/3/17, 6/14/17, 6/28/17
EH
Docket 333
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
11:00 AM
From: 3/1/17, 5/3/17, 6/14/17, 6/28/17, 8/2/17 EH
Docket 440
6/28/17
See tentative for matter #10.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:17-01138 Musharbash et al v. Musharbbash et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
Issa M Musharbash Represented By Brian J Soo-Hoo
Defendant(s):
Amal Musharbbash Pro Se
Issa M Musharbbash Pro Se
Joint Debtor(s):
Amal Issa Musharbash Represented By Brian J Soo-Hoo
Plaintiff(s):
Violette Musharbash Pro Se
Phillip Musharbash Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:17-01050 United States Trustee for the Central District of v. Pryor
From: 5/3/17, 7/12/17, 7/26/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Defendant(s):
Jack C Pryor Represented By
Linda J DeVore
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
12:30 PM
Docket 53
BACKGROUND
On April 15, 2016, Alberto & Martina Plascencia ("Debtors") filed a Chapter 13 voluntary petition. On June 1, 2016, Debtors’ Chapter 13 plan was confirmed.
On June 13, 2017, Trustee filed a motion to dismiss for failure to submit 2016 tax returns/refunds. On June 16, 2016, Debtors filed an opposition. The case was dismissed on July 25, 2017.
Debtors state that their tax "refunds" were sent in around June 16, 2016, but that their state returns were not processed until July 26, 2017. Trustee has filed comments indicating approval of the motion, if Debtors cure delinquency in the amount of
$612.08.
DISCUSSION
Fed. R. Bankr. P. Rule 9024, incorporating Fed. R. Civ. P. Rule 60(b)(1), provides for
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relief from an order for, among other things, "mistake, inadvertence, surprise, or excusable neglect." Debtor’s counsel states that it is his recollection that Trustee stated he would withdraw the motion to dismiss on the date of the hearing.
Given the conditional approval of the Trustee and the evidence submitted by Debtor, the Court finds that the requested relief is proper assuming that the condition has been satisfied.
TENTATIVE RULING
The Court is inclined to GRANT the motion in accordance with the terms in Trustee’s comments.
APPEARANCES REQUIRED.
Debtor(s):
Alberto Plascencia Represented By Paul Y Lee
Joint Debtor(s):
Martina Plascencia Represented By Paul Y Lee
Movant(s):
Martina Plascencia Represented By Paul Y Lee
Alberto Plascencia Represented By
12:30 PM
Trustee(s):
Paul Y Lee
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 35
9/21/17
Background:
On November 30, 2016, Diana Cescolini ("Debtor") filed a Chapter 13 voluntary petition. On January 24, 2017, Debtor’s Chapter 13 plan was confirmed.
On April 12, 2017, Real Time Resolutions, Inc. ("Creditor") filed an unsecured proof of claim in the amount of $46,776.25 ("Claim 17"). On August 15, 2017, Debtors filed an objection to Claim 17.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223
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F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Debtors argue that the statute of limitations is four years for Creditor’s claim and that Creditor’s claim is therefore barred. Cal. Code Civ. P. § 337(2) provides for a statute of limitations of four years for:
An action to recover (1) upon a book account whether consisting of one or
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more entries; (2) upon an account stated based upon an account in writing, but the acknowledgement of the account stated need not be in writing; (3) a balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that where an account stated is based upon an account of one item, the time shall begin to run from the date of said item, and where an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.
Cal. Code Civ. P. § 337(1) provides that the statute of limitations is also four years for claims based upon a contract.
The Court has reviewed Creditor’s proof of claim and it appears that the applicable statute of limitations is four years pursuant to Cal. Code Civ. P. § 337. Creditor’s proof of claim does not provide any evidence regarding the date of the last payment on the claim. Debtor’s objection to claim indicates that she has not made payment on the claim since 2007, and, therefore, that the claim is barred by the statute of limitations.
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-(1)(h).
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
12:30 PM
Debtor(s):
Diana Cescolini Represented By John F Brady
Movant(s):
Diana Cescolini Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 8/17/17 Also #4 & #5 EH
Docket 17
08/17/2017
Summary of the Motion:
TENTATIVE
The Motion is deficient for the following reasons:
Service of the Motion was improper because the Debtors failed to serve the Motion to the attention of an officer for both Trojan and Dreambuilder Investments pursuant to FRBP 7004; and
The appraisal attached to the Motion as Exhibit "4" is not supported by a declaration of the appraiser, without which the appraisal is hearsay.
Based on the foregoing, the Court is inclined to CONTINUE the hearing for the Debtor to obtain a declaration of the appraiser and for the Debtor to file and properly serve notice of the continuance and the moving papers on Trojan and Dreambuilder.
12:30 PM
The hearing shall be continued to September 21, 2017, at 12:30 p.m. The amended motion and notice of continuance must be filed on or before August 31, 2017.
APPEARANCES WAIVED.
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Movant(s):
Kathy A Neilsen Represented By Julie J Villalobos
John E Neilsen Sr Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #3 & #5 EH
Docket 24
TENTATIVE
The Court having reviewed the motion, finding notice and service to be proper and reviewed the opposition, the Court is inclined to DENY the motion without prejudice. Specifically, as is noted in the opposition, Debtors have not submitted evidence which clearly establishes the amount owing on the senior security interest. Debtors have submitted a payoff quote, dated July 20, 2017, which states that the total amount due is $347,890.95. Debtors have additionally submitted a letter, dated May 17, 2017, which states that the remaining deferred principal amount is $129,872.54. Debtors’ motion adds the two above amounts together, and asserts that the sum is the total amount due.
Nevertheless, the relationship between the two documents submitted by Debtors is unclear. The payoff quote submitted is dated approximately two months later than the letter, and, therefore, the letter cannot refer to the payoff quote. Because of this lack of clarity, Debtors have not established the amount owing on the senior security interest.
APPEARANCES REQUIRED.
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
12:30 PM
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Movant(s):
Kathy A Neilsen Represented By Julie J Villalobos
John E Neilsen Sr Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #3 & #4 EH
Docket 0
- NONE LISTED -
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Meghan McConaghy Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jessie Romero Jr Represented By Bruno Flores
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gary Ramirez Represented By
Ethan Kiwhan Chin
Joint Debtor(s):
Christina Faith Ramirez Represented By
Ethan Kiwhan Chin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Carla Lindo Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Francisco Javier Martinez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Pedro N Ibanez Represented By
James D. Hornbuckle
Joint Debtor(s):
Celia S. Ibanez Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Artush Stepanian Represented By
James D. Hornbuckle
Joint Debtor(s):
Wendy L. Wilkie Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Lisa Tompkins Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Frank Ochoa Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
William R. Martin Represented By
James D. Hornbuckle
Joint Debtor(s):
Judy L. Martin Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Diana Lynn Chavez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 17
TENTATIVE
The Court having reviewed the motion and opposition, the Court is inclined to CONTINUE the motion to allow U.S. Bank National Association an opportunity to obtain a verified appraisal of the subject real property.
APPEARANCES REQUIRED.
Debtor(s):
Jaelyn Roylene Young Represented By Christopher J Langley
Movant(s):
Jaelyn Roylene Young Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #17 EH
Docket 0
- NONE LISTED -
Debtor(s):
Jaelyn Roylene Young Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
(9/20/17 - Case remains deficient for Employee Income Records)
EH
Docket 22
APPEARANCES REQUIRED.
Debtor(s):
Eugene Myers Represented By Paul Y Lee
Joint Debtor(s):
Deborah Myers Represented By Paul Y Lee
Movant(s):
Deborah Myers Represented By Paul Y Lee
Eugene Myers Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 83
- NONE LISTED -
Debtor(s):
Chang Y Park Represented By
M Teri Lim
Joint Debtor(s):
Kyoung S Park Represented By M Teri Lim
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:31 PM
Docket 62
- NONE LISTED -
Debtor(s):
Donald Lloyd Maki Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 62
- NONE LISTED -
Debtor(s):
Juan Jose Franco Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 35
- NONE LISTED -
Debtor(s):
Barbara Rammell Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 84
- NONE LISTED -
Debtor(s):
Michael Anthony Rivera Represented By Michael A Rivera
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 48
- NONE LISTED -
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 8/22/17 EH
Docket 113
Hearing Date: 8/22/17 Service: Proper Opposition: Yes
Subject to discussion re adequate protection terms, the Court is inclined to GRANT relief from the stay under § 362(d)(1).
GRANT waiver of 4001(a)(3) stay.
GRANT Movant leave to offer/provide/enter into a potential forbearance, loan modification, refinance agreement or other loan workout.
GRANT relief requested that upon entry of this Order, for purposes of Cal. Civ. Code
§ 2923.5, the debtor is a borrower as defined in Cal. Civ. Code § 2920.5(C)(2)(C). Request for APO is DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Cecilia R Rodas Represented By Michael Smith Sundee M Teeple
10:00 AM
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
10:00 AM
MOVANT: BANK OF AMERICA, N.A.
From: 8/22/17 EH
Docket 33
Hearing Date: 8/22/17 Service: Proper Opposition: Yes
The Debtor has provided evidence that more payments have been made than are accounted for by the Movant. However, even with the additional payments, the Debtor does not dispute that he remains delinquent by at least two payments.
APPEARANCES REQUIRED.
Debtor(s):
Efrain Figueroa Represented By
Raj T Wadhwani
Movant(s):
Bank of America, N.A. Represented By
William F McDonald III Asya Landa
Bonni S Mantovani
10:00 AM
Trustee(s):
Cassandra J Richey Alexander G Meissner
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: PACIFIC COMMUNITY CREDIT UNION
EH
Docket 45
09/26/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT ¶¶ 3 and 12. Request for APO DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Movant(s):
PACIFIC COMMUNITY CREDIT Represented By
Nichole Glowin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BOSCO CREDIT LLC
From: 9/12/17 EH
Docket 39
09/12/2017
Service: Proper Opposition: Yes
Subject to discussions regarding an APO, the Court is inclined to GRANT relief based on the number of missed payments.
APPEARANCES REQUIRED.
Debtor(s):
Teresa Julia Chavez Represented By Manfred Schroer
Movant(s):
BOSCO CREDIT LLC, its Represented By Nichole Glowin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: LAKEVIEW LOAN SERVICING LLC
EH
Docket 26
09/26/2017
Service: Proper Opposition: Yes
Court’s tentative ruling is to GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and relief requested under ¶3.
APPEARANCES REQUIRED.
Debtor(s):
Toni N. Ephraim Represented By Paul Y Lee
Movant(s):
Lakeview Loan Servicing LLC Represented By Daniel K Fujimoto
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: GATEWAY ONE LENDING & FINANCE
EH
Docket 10
09/26/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Page Heffner Represented By
Ahren A Tiller
Movant(s):
Gateway One Lending & Finance Represented By
Austin P Nagel
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: CHRIS RISENMAY; JAMES BRAY; NICK CUNNINGTON; DAVID THATCHER; CLARK PENNEY; SHATTUCK LAMM; STEPHEN BIESINGER; MARK THATCHER; BRANDT KUHN; MICHELE SARNA; MARK HAYEK, AND MIKE MCCONNELL
EH
Docket 27
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
Mark Hayek Represented By
Erwin J Shustak
10:00 AM
MOVANT: CALIFORNIA HOUSING FINANCE AGENCY
CASE DISMISSED 8/15/17
EH
Docket 11
09/26/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and request under ¶2,3 and 6. Additionally, based on the Debtor’s failure to file complete schedules, the dismissal of the Debtor’s case on 8/15/17, and for the reasons set forth in the Motion, the Court finds that an evaluation of the Fjelsted factors warrants annulling the automatic stay to validate the postpetition foreclosure sale of the Property, and also GRANTS on that basis..
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Francisco Lopez Pro Se
Movant(s):
California Housing Finance Agency Represented By
Mark S Krause
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: GW SAN DIEGO PROPERTIES, LLC
EH
Docket 21
09/26/2017
Service is Proper Opposition: None
As noted in the Court’s prior tentative ruling of 8/29/2017, when considering the Debtor’s Motion to Impose/Continue Stay in the instant case (Docket No. 8), the Property has been the subject of multiple unauthorized grant deeds and at least seven bankruptcy cases since 2010. Additionally, the Trustee’s Deed of Sale following foreclosure was recorded on 6/29/2017. Based on the history of unauthorized transfers and bankruptcy filings, the Court finds that Movant has demonstrated sufficient bad faith grounds to justify granting relief from the stay under §§ 362(d)(1) and (d)(2) and (d)(4). The Court further GRANTs waiver of 4001(a)(3) stay and GRANTS Movant’s requests under ¶¶ 7, 9 and 11, except that the request under ¶¶ 7 and 9 are modified to require recordation. Movant’s requests under ¶¶3 and 10 are DENIED for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Claudia Acevedo Represented By Richard McAndrew
Movant(s):
GW SAN DIEGO PROPERTIES, Represented By
10:00 AM
Trustee(s):
Helen G Long
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: ONTARIO-MONTCLAIR SCHOOL EMPOYEES FEDERAL CREDIT UNION
EH
Docket 16
NONE LISTED -
Debtor(s):
Kathleen Flynn Represented By Freddie V Vega
Movant(s):
Ontario-Montclair School Represented By
Bruce P. Needleman
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ANNETTE CULPEPPER
EH
Docket 12
09/26/2017
In her prior case, Debtor fell behind in payments owed to the First and Second lienholders on her primary residence (lienholders had obtained APOs as to each). Relief from stay was entered as to the Second Priority lienholder immediately prior to the Debtor voluntarily dismissing the case. Debtor has now paid off her car which has increased her disposable income for the current plan. Her disposable income in the current plan is $795. In her prior chapter 13, she was only able to pledge $584.35.
Based on her increase in disposable income Debtor seeks to pledge into her plan, the Debtor has demonstrated that the current plan is filed in good faith.
Additionally, service on the secured creditors in the case complies with Rule 7004 and no opposition to the Motion has been filed
Based on the foregoing, the Court’s tentative ruling is to GRANT the Motion and continue the stay as to all creditors.
APPEARANCES REQUIRED.
Debtor(s):
Annette Culpepper Represented By Nathan Fransen
10:00 AM
Movant(s):
Annette Culpepper Represented By Nathan Fransen Nathan Fransen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
(2) Requiring Status Report EH
Docket 8
NONE LISTED -
Debtor(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein
2:00 PM
Adv#: 6:16-01238 Allied Injury Management, Inc. v. De La Llana et al
(Dism by Stip/Judgment - Nor Cal Pain Management Medical Group, Inc.) (Judgment as to Shoreline Medical Group, Inc)
(Judgment as to Justin Paguette)
(Judgment as to Sunkist Imaging Medical Center) (Judgment as to Dr. Javier Torres)
(Judgment as to Sylvia De La Llana and Myelin Diagnostics)
(Dismissed as to One Stop Multi-Specialty Medical Group & Therapy Inc) (Dismissed as to Paramount Family Health Center)
From: 11/15/16, 12/6/16, 12/20/16, 2/28/17, 4/25/17, 6/27/17, 7/11/17, 8/22/17
EH
Docket 1
NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Javier Torres Pro Se
2:00 PM
Justin Paquette Pro Se
Nor Cal Pain Management Medical Pro Se Shoreline Medical Group, Inc. Pro Se
Sylvia De La Llana Pro Se
Myelin Diagnostics Pro Se
Sunkist Imaging Medical Center Pro Se
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley Jason Balitzer
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
From: 5/30/17, 6/19/17, 7/24/17 Also #15
EH
Docket 37
PROCEDURAL BACKGROUND
On September 20, 2013, ASR Constructors, Inc. ("Debtor") filed a Chapter 11 voluntary petition. On October 23, 2013, related entities Another Meridian Company, LLC ("Meridian") and Inland Machinery, Inc. ("Inland") (collectively, "Debtors") filed Chapter 11 voluntary petitions. On November 1, 2013, the Court ordered joint administration of the estates of Debtor, Meridian and Inland.
Prior to the filing of the bankruptcy petition, Gotte Electric, Inc. ("Gotte") filed a state court complaint against Debtors and Federal Insurance Company ("FIC") to set aside a fraudulent transfer. Upon Debtor’s filing of a Chapter 11 petition, the action was removed to the bankruptcy court.
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On November 17, 2015, Debtors filed a motion to approve compromise. On November 24, 2015, UST filed an objection. On December 1, 2015, Insurance Company of the West ("ICW") filed an objection. After further briefing, the Court granted the motion to approve the compromise, and an order was entered approving the compromise on December 30, 2015.
On January 8, 2016, Debtors’ bankruptcy cases were dismissed. On February 13, 2017, Debtors’ bankruptcy cases were reopened. On March 14, 2017, upon request by Debtors the Court modified the seventh paragraph of its dismissal order as follows:
7. Except for the claims asserted in the declaratory relief action filed by ICW and/or Gotte pursuant to the Settlement Agreement, this Court shall retain exclusive jurisdiction to enforce the provisions of the Settlement Agreement, 9019 Order and this Dismissal Order and to resolve any dispute(s) concerning the Settlement Agreement, the 9019 Order and/or this Dismissal Order or the rights and duties of the parties hereunder or thereunder or any issues relating to the Settlement Agreement, the 9019 Order and/or this Dismissal Order, including, interpretation of the terms, conditions and provisions thereof, and all issues and disputes arising in connection with the relief authorized under Settlement Agreement, the 9019 Order and/or this Dismissal Order.
On March 17, 2017, Debtors filed a complaint in interpleader against Gotte and other parties. On May 8, 2017, Debtors filed a motion for authorization to deposit disputed funds and for interpleader relief. At a status conference on May 16, 2017, the Court expressed some concerns with the relief requested, and Debtors filed a modification to motion on June 5, 2017.
FACTUAL BACKGROUND
Debtor was a general contractor. In connection with Debtor’s work, FIC issues a number of surety performance and payment bonds on Debtor’s behalf. Debtors and
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their principals, in return, executed various indemnity and collateral agreements in favor of FIC.
Gotte was Debtor’s sub-contractor on three projects. On May 28, 2013, Gotte obtained a state court judgment against Debtor in the amount of $6,655,486.47, and on July 1, 2013, Gotte filed a UCC judgment lien against Debtor. On February 1, 2010, while the state court litigation was pending, Debtor transferred certain real property (the "Meridian Property") to Meridian for $3,100,000 and certain equipment and machinery (the "Equipment") to Inland for $3,780,458. These transfers were the subject the of the fraudulent transfer action commenced by Gotte. FIC has a lien on the Meridian Property, the Equipment, and Debtor’s accounts receivable.
On December 17, 2013, the Court authorized the sale of that part of the Meridian Property located in the city of Riverside for a purchase price of $3,150,000. Net proceeds of the sale, totaling $1,790,000 were held in a DIP account, subject to the claims of Gotte, FIC, Berkley Regional Insurance Company ("BRIC") and ICW. Additionally, net proceeds of the sale of certain real property located in Phelan, totaling $50,000, were held in a DIP account subject to the claims of FIC and BRIC, and net proceeds of an auction sale of the Equipment, totaling $1,006,000, were held in a DIP account subject to the lien of FIC. The total amount of funds on hand at the time of the filing of the compromise motion was $3,152,360.28.
As part of the compromise motion, FIC agreed to grant a carve-out from its collateral in the amount of $200,000 plus 45% of net proceeds from the sale of the remainder of the Meridian Property. The various parties’ respective rights to the FIC carve-out were not determined by the compromise motion.
On December 24, 2015, ICW filed a complaint in state court for declaratory relief and interpleader. On February 9, 2016, the IRS filed a notice of removal, removing the case to federal district court. On May 24, 2016, the district court dismissed the case upon motion of the IRS for lack of subject matter jurisdiction. As such, it is not clear that the interpleader action can be heard in either state court or federal district court.
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DISCUSSION
Debtors request two categories of relief: (1) authority to deposit the funds constituting the FIC carve-out (the "Funds") into the court registry; and (2) various interpleader relief.
Deposit of Funds in Court Registry
Fed. R. Bankr. P. Rule 7067 incorporates Fed. R. Civ. P. Rule 67. FRCP Rule 67(a) states:
If any part of the relief sought is a money judgment or the disposition of a sum of money or some other deliverable thing, a party – on notice to every other party and by leave of court – may deposit with the court all or part of the money or thing, whether or not that party claims any of it. The depositing party must deliver to the clerk a copy of the order permitting deposit.
FRCP Rule 67 is properly invoked when there is a live dispute regarding the entitlement to the funds in question. See generally Alstom Caribe, Inc. v. George P. Reintjes Co., Inc., 484 F.3d 106, 113 (1st Cir. 2007) ("The core purpose of Rule 67 is to relieve a party who holds a contested fund from responsibility for disbursement of that fund among those claiming some entitlement thereto."); see also Garrick v.
Weaver, 888 F.2d 687, 694 (10th Cir. 1989) ("The language of Rule 67 leaves to the discretion of the district court the decision as to whether to permit the deposit of funds in court. The magistrate acted well within his discretionary authority in allowing
the funds to be paid into court and excusing the defendants. His decision both ensured that the settlement fund would be available for disbursement and facilitated judicial
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economy by permitting the defendants, who no longer had an interest in the funds or in these proceedings, to withdraw.").
Here, there is clearly a live dispute regarding entitlement to the Funds.
Interpleader Relief
Debtors’ original motion requested that the Court grant the following five forms of relief: (1) discharge Debtors from further liability to the named defendants; (2) dismissal of Debtors, with prejudice, from the adversary; (3) entry of a permanent injunction preventing Defendants from asserting claims against Debtor relating to the settlement funds; (4) requiring the named defendants to litigate between themselves;
an award of costs and reasonable attorney fees. Debtors’ modification to the motion withdrew the last request, and modified the second request to reduce Debtors’ role in the action to that of a monitoring capacity.
"In an interpleader action, the ‘stakeholder’ of a sum of money sues all those who might have claim to the money, deposits the money with the district court, and lets the claimants litigate who is entitled to the money." Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1265 (9th Cir. 1992). Procedurally,
An interpleader action typically involves two stages. In the first stage, the district court decides whether the requirements for rule or statutory interpleader action have been met by determining if there is a single fund at issue and whether there are adverse claimants to that fund. If the district court finds that the interpleader action has been properly brought the district court will then make a determination of the respective rights of the claimants.
Rhoades v. Casey, 196 F.3d 592, 600 (5th Cir. 1999) (citations omitted).
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Here, Debtors are relying on rule interpleader. Fed. R. Civ. P. Rule 22(a)(1), incorporated into bankruptcy proceedings by Fed. R. Bankr. P. Rule 7022(a), states:
the claims of the several claimants, or the titles on which their claims depend, lack a common origin or are adverse and independent rather than identical; or
the plaintiff denies liability in whole or in part to any or all of the claimants.
Here, the various defendants’ actual or potential claims to the Funds may expose Debtors to multiple liability. Therefore, an interpleader action is appropriate.
In cases where an interpleader action is appropriate, Collier states the following:
By turning over the fund or the property as directed by the court, the plaintiff may be discharged from the proceeding and any further liability. There may be an injunction issued to prevent the adverse claimants from further pursuing the stakeholder. On a finding that interpleader is proper, the court will then enter an order requiring the claimants to the fund or property to interplead.
10 Collier on Bankruptcy ¶ 7022.01 (16th ed. 2013); see also 28 U.S.C. § 2361. Here, Debtors’ requests closely track the language identified in Collier’s and, in the absence of opposition, appear appropriate here.
Jurisdictional Statement
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Bankruptcy Court Jurisdiction
Nevertheless, the Court must determine whether it has subject matter jurisdiction. See, e.g., In re Strawberry, 464 B.R. 443, 447 (Bankr. N.D. Fla. 2012). This complaint in interpleader was filed in a dismissed bankruptcy case and would result in litigation over non-bankruptcy claims between non-debtor parties.
28 U.S.C. § 157 provides for four categories of cases which the district court may refer to the bankruptcy court: (1) cases under title 11; (2) proceedings arising under title 11; (3) proceedings arising in a case under title 11; and (4) proceedings related to a case under title 11. See, e.g., In re S&M Constructors, Inc., 144 B.R. 855, 858 (Bankr. W.D. Mo. 1992). Additionally, 28 U.S.C. § 157(b) divides matters into core and non-core proceedings.
The first category, cases under title 11, refers to the bankruptcy case commenced by the filing of the petition. See, e.g., In re Wood, 825 F.2d 90, 92 (5th Cir. 1987). This category is inapplicable here, as the matter at issue is a complaint in interpleader.
The second category, proceedings arising under title 11, refers to those actions that are expressly created by title 11. See, e.g., In re Wolverine Radio Co., Inc., 930 F.2d 1132, 1141, n.14 (6th Cir. 1991). This category is inapplicable here – the underlying liability is premised upon state law claims.
The third category1, proceedings arising in a case under title 11, refers to claims that, although not created by title 11, would have no existence absent the bankruptcy, such as administrative matters. See, e.g., In re Repository Techs., Inc., 601 F.3d 710, 719 (7th Cir. 2010). This category is inapplicable here.
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The fourth category, proceedings related to a case under title 11, contains two different subsets: (1) causes of action owned by the debtor that become property of the estate under § 541; and (2) suits between third parties which in one way or another affect the administration of the bankruptcy case. Id. It is only the latter category that is potentially invoked by this proceeding.
The primary test for related to jurisdiction is the Third Circuit’s Pacor test:
The usual articulation of the test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.
Thus, the proceeding need not necessarily be against the debtor or against the debtor’s property. An action is related to bankruptcy if the outcome could alter the debtor’s rights, liabilities, options, or freedom of action . . . and which in any way impacts upon the handling and administration of the bankrupt estate.
Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3rd Cir. 1984). The Supreme Court previously acknowledged the prevalence of the Pacor test:
In attempting to strike an appropriate balance, the Third Circuit in Pacor, Inc.
v. Higgins, 743 F.2d 984 (1984), devised the following test for determining the existence of "related to" jurisdiction:
[Excerpt quoted above] . . .
The First, Fourth, Fifth, Sixth, Eight, Ninth, Tenth, and Eleventh Circuits have adopted the Pacor test with little or no variation. The Second and Seventh Circuits, on the other hand, seem to have adopted a slightly different test. But whatever test is used, these cases make clear that bankruptcy courts have no
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jurisdiction over proceedings that have no effect on the estate of the debtor.
Celotex Corp. v. Edwards, 514 U.S. 300, 308 n.6 (1995) (citations omitted).
The Ninth Circuit has recently reiterated its approval of the Pacor test for pre- confirmation matters:
The test for post-confirmation "related to" jurisdiction was modified from the seminal pre-confirmation Pacor test for "related to" jurisdiction, which had been previously adopted by the Ninth Circuit in In re Fietz, 852 F.2d 455, 457 (9th Cir. 1988). Surveying the courts that had applied a limited version of the Pacor test in the post-confirmation context, we recognized that the Pacor test of whether the outcome of the proceeding could conceivably have any effect on the estate being administered in bankruptcy . . . If the outcome could alter the debtor’s rights, liabilities, options, or freedom of action . . . and which in any way impacts upon the handling and administration of the bankruptcy estate was somewhat overbroad in the post-confirmation context.
In re Wilshire Courtyard, 729 F.3d 1279, 1287 (9th Cir. 2013) (citations and quotations omitted).
First, it is unclear whether the complaint in interpleader would affect the administration of the bankruptcy estate, if a bankruptcy estate was being administered, Second, the Court must consider whether it can ever have "related to" jurisdiction in an action filed in a dismissed case because there is no estate to administer, and, consequently, such an action cannot affect administration of the estate.
The Effect of Dismissal on "Related to" Jurisdiction
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The Pacor test includes two requirements: (1) the action must alter the rights or obligations of the debtor; and (2) the action must have an effect on the administration of the estate. See, e.g., In re Bass, 171 F.3d 1016, 1022 (5th Cir. 1999). This second prong becomes an issue when an action is filed in a dismissed case. See, e.g., id. ("The second prong, however, is problematical. Although the injunction would have an impact on the Debtor, it could not have any effect whatsoever on his estate in bankruptcy or its administration. First and foremost, such an estate no longer exists.").
A different situation arises when, after an action is commenced, the underlying bankruptcy case is dismissed. Courts have generally concluded that in such a situation, retention of jurisdiction is discretionary, and based on principles of equity and judicial economy. See, e.g., In re Smith, 866 F.2d 576, 580 (3rd Cir. 1989) ("Drawing upon an analogy to the disposition of ancillary and pendent claims, the courts have held that they may consider a number of factors to determine whether jurisdiction should be retained."). Such a situation is, however, fundamentally different from the situation here. See id. ("Appellees fail, however, to distinguish between the determination of the existence of jurisdiction at the outset of these proceedings and the determination of whether ‘related’ claims should be dismissed with the dismissal of the bankruptcy case or the discharge of the debtor."); In re Fietz, 852 F2.d 455, 457 n.2 (9th Cir. 1988) ("Subject matter jurisdiction should be determined as of the date that the complaint, or in this case the cross-claim, was filed.").
In developing a standard for when a bankruptcy court should retain jurisdiction following the dismissal of the underlying case, courts have analogized the situation to a district court’s retention of pendent state claims following dismissal of the federal claims. See, e.g., In re Porges, 44 F.3d 159, 162-63 (2nd Cir. 1995); In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992); In re Casamont Investors, Ltd., 196 B.R. 517, 522 (B.A.P. 9th Cir. 1996) ("In determining whether the bankruptcy court abused its discretion by retaining jurisdiction over related proceedings, the Ninth Circuit and several other circuits have analogized to cases concerning the propriety of district courts retaining jurisdiction over pendent state law claims after federal claims have been dismissed."). Applying that analogy and the applicable standard to the matter at issue here reveals the fundamental problem: a district court can never exercise pendent jurisdiction over state law claims when, at their commencement, there is no
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existing federal claim for the state claims to supplement. In the bankruptcy context, the Court cannot exercise related to jurisdiction if there is no bankruptcy case for the complaint to relate to.
Ancillary or Retained Jurisdiction
Attempts have been made to avoid this issue by arguing for the existence of supplemental or retained jurisdiction. See In re Bass, 171 F.3d 1016, 1023-242 (5th Cir. 1999) (supplemental) ("Congress has gone to great lengths to determine what proceedings may be tried by bankruptcy courts, and the exercise of ancillary and pendent jurisdiction by bankruptcy courts could subsume the more restrictive ‘related to’ and ‘arising in’ jurisdiction, such that the latter would be rendered substantially, if not entirely, superfluous."); id. at 1025 (retained) ("[B]efore a court can exercise its discretion to ‘retain’ jurisdiction over a ‘related proceeding,’ the court must have had jurisdiction over that proceeding in the first place. The Denneys did not file their suit in Texas until after the bankruptcy case in Utah had been closed. From a purely temporal standpoint, there was no proceeding over which bankruptcy court jurisdiction could be ‘retained.’"); see also In re Morris, 950 F.2d 1531, 1534 (11th Cir. 1992) (same). The Ninth Circuit has previously discussed the application of supplemental, or ancillary, jurisdiction in the context of interpreting a settlement agreement in a Chapter 11 structured dismissal:
Here, when Sea Hawk filed its adversary proceeding, VFDA’s Chapter 11 case had been dismissed and a final decree entered. . . .
The bankruptcy court has no role in the resolution of the creditors’ dispute, and it is involved only fortuitously because the dispute implicates the terms of a settlement agreement approved by the court as a precondition of the dismissal of VFDA’s bankruptcy. . . .
The bankruptcy court did not consider dismissal of VFDA’s bankruptcy to automatically divest it of jurisdiction over a related case. It reasoned that after
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dismissal, the court has discretion to retain jurisdiction over a related proceeding, citing In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992). . . .
Carraher does not support the bankruptcy court’s decision. It stands for the proposition that a bankruptcy court may retain jurisdiction over a related proceeding pending at the time of the dismissal of the bankruptcy case. It does not support the assertion of bankruptcy jurisdiction over a proceeding initiated subsequent to the dismissal of the bankruptcy case.
In re Valdez Fisheries Dev. Ass’n, Inc., 439 F.3d 545, 547-48 (9th Cir. 2006). Valdez Fisheries, however, made clear that the result may have been different had the Court’s dismissal order explicitly retained jurisdiction over the dispute in question. See id. at 549 ("Ancillary jurisdiction may rest on one of two bases: (1) to permit disposition by a single court of factually interdependent claims, and (2) to enable a court to vindicate its authority and effectuate its decrees.") (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 79-80 (1994)). The second purpose of Kokkonen’s retained, related-to jurisdiction is at issue here.
Nevertheless, the second prong of the Kokkonen test has its limits. See, e.g., In re Ray, 624 F.3d 1124, 1136 (9th Cir. 2010) ("In short, hearing a breach of contract claim predicated on evidence that came to light after a bankruptcy case had closed, its creditors paid, and the debtor discharged, stretches the limits of the bankruptcy court’s ancillary jurisdiction too far, going beyond what is necessary for the bankruptcy court to ‘effectuate its decrees." . . . Reopening of the bankruptcy case is rare, and only used when necessary to resolve bankruptcy issues, not to adjudicate state law claims that can be adjudicated in state court.") (citation omitted). Importantly, an explicit retention of jurisdiction is only valid to the extent that jurisdiction is retained over claims that could have been heard at the time that jurisdiction was retained. See, e.g., In re Nobel Group, Inc., 529 B.R. 284, 292 (Bankr. N.D. Cal. 2015). To conclude otherwise would be to allow bankruptcy courts to craft their own jurisdictional authority. See, e.g., In re Resorts Int’l, Inc., 372 F.3d 154, 161 (3rd Cir. 2004) ("[N] either the bankruptcy court nor the parties can write their own jurisdictional ticket.
When a court lacks subject matter jurisdiction over a dispute, the parties cannot create it by agreement even in a plan of reorganization.").
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First, there appears to be a problem in that jurisdiction was not conferred until the time of the dismissal order. Here, the retention of jurisdiction over the interpleader action was concurrent with dismissal of the case, and, as such, the claim for which jurisdiction was retained could not have been filed until after the case was dismissed. As stated above, related to jurisdiction is determined at the time the claim is filed, but, importantly, is premised upon the existence of a case that the claim can be related to. Therefore, because the jurisdiction in question was only conferred in a dismissal order, there would no existing bankruptcy case at the time an interpleader action could have been filed, so as to confer related to jurisdiction. The Court is aware of the confusing nature of the issue.
Second, even if the retention of jurisdiction had been in the settlement order, and, as such, the retention of jurisdiction would have arisen in the context of an existing case, allowing related to jurisdiction to exist2, it would be unclear, possibly unlikely, that the Court would have subject matter jurisdiction over the complaint in interpleader.
As briefly alluded to in section B, supra, the Ninth Circuit has limited the Pacor "related to" test to pre-confirmation matters, and has imposed a more demanding test for post-confirmation matters. See In re Pegasus Gold Corp., 394 F.3d 1189, 1194 (9th Cir. 2005). The rationale for this distinction is that the bankruptcy estate ceases to exist post confirmation. See generally id. Pegasus Gold, therefore, replaced the more liberal Pacor test with a "close nexus" test after the dissolution of the bankruptcy estate. See id. The "close nexus" test requires that the matter be directly affect the bankruptcy proceeding for subject matter jurisdiction to be present. See id. It is difficult to ascertain how the "close nexus" test could be satisfied when the basis for the complaint in interpleader, the settlement agreement, also contemplates that the bankruptcy proceedings will cease.
Furthermore, even if Debtors had modified the settlement order and could show that the "close nexus" test was satisfied, the pendent jurisdiction test alluded to in section B, supra, may also merit consideration. This test instructs the Court to consider the interests of "economy, convenience, fairness and comity." See In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992).
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The Court need not reach the "close nexus" or pendent jurisdiction tests at this point, however, for the following two reasons: (1) the modification of the dismissal order does not properly appear to confer jurisdiction on the Court, and (2) the settlement order expressly disclaims jurisdiction over the interpleader action.
TENTATIVE RULING
Based on the foregoing, the Court believes dismissal of the adversary for lack of subject matter jurisdiction is appropriate. The Court will consider whether to, on its own motion, amend the dismissal order to delete the retention of jurisdiction, and at the request of the parties, may continue the hearing for further briefing in light of the foregoing.
APPEARANCES REQUIRED.
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Represented By Kevin R Carlin
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By
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Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
Employment Development Represented By
Elisa B Wolfe-Donato
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Movant(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Melissa Davis Lowe
Another Meridian Company, LLC Represented By
James C Bastian Jr Melissa Davis Lowe
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Melissa Davis Lowe
Another Meridian Company, LLC Represented By
James C Bastian Jr Melissa Davis Lowe
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
From: 5/16/17, 6/19/17, 7/24/17 Also #14
EH
Docket 1
NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Represented By
2:00 PM
Kevin R Carlin
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
Employment Development Represented By
Elisa B Wolfe-Donato
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Melissa Davis Lowe
Another Meridian Company, LLC Represented By
James C Bastian Jr Melissa Davis Lowe
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
From: 3/7/17, 7/11/17, 7/24/17 Also #17 & #18
EH
Docket 630
NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
From: 3/7/17, 7/11/17, 7/24/17 Also #16 & #18
EH
Docket 630
NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
From: 3/7/17, 7/11/17, 7/24/17 Also #16 & #17
EH
Docket 630
NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
Also #20 EH
Docket 89
07/25/2017
On November 10, 2016 ("Petition Date"), B & B Family, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. The Debtor is owned by Patricia Forte (who owns 50% of shares) and by Randall and Marianne Richey, husband and wife, who own the remaining 50% of shares in the Debtor (collectively, "Shareholders")
Debtor operates Oggi’s Pizza and Brewing Company in Apple Valley, California. Debtor has fifty-five employees. The Debtor’s Schedules show that it had approximately $114,662.50 in assets as of the Petition Date. The Debtor’s assets consist primarily of leased equipment, business licenses, and liquid assets in the form of cash and accounts.
On March 31, 2017, Debtor filed its Disclosure Statement and Chapter 11 Plan of Reorganization. On May 2, 2017, Comerica Bank filed a Limited Response to the Debtor’s Disclosure Statement pointing simply to the Debtor’s omission of its franchise agreement as an executory contract being assumed. In response, the Debtor amended its Disclosure Statement and Plan on May 2, 2017 (the "Amended DS and Plan"). Additionally, on May 3, 2017, the Debtor filed redline versions of the Amended DS and Plan reflecting the changes made since the March 31, 2017, filings.
Following the May 2017, hearing on the Disclosure Statement, the Debtor filed amended pleadings on June 13, 2017. Service was proper and no objections to the Debtor’s Second Amended Disclosure Statement have been filed.
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Adequate Information
A Chapter 11 disclosure statement is required to contain "adequate information" pursuant to 11 U.S.C. § 1125(b). Section 1125(f)(2) provides that: "the court may approve a disclosure statement submitted on standard forms approved by the court or adopted under section 2075 of title 28." The United States Courts have devised a disclosure statement template for small businesses, Form B25B, which Debtor generally adopted as to format.
As to the substance of a disclosure statement, 11 U.S.C. § 1125(a)(1) defines "adequate information" as:
information of a kind, and in sufficient detail as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor’s books and records, including a discussion of the potential material Federal tax consequences of the plan to the debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims or interests in the case, that would enable such a hypothetical investor of the relevant class to make an informed judgment about the plan, but adequate information need not include such information about any other possible or proposed plan and in determining whether a disclosure statement provides adequate information, the court shall consider the complexity of the case, the benefit of additional information to creditors and other parties in interest, and the cost of providing additional information
The type of information required varies with the circumstances. See, e.g., In re Jeppson, 66 B.R. 269, 292 (Bankr. D. Utah 1986) (listing nineteen categories of information commonly required); see also In re Malek, 35 B.R. 443, 443-44 (Bankr.
E.D. Mich. 1983) (listing minimum requirements).
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Plan Feasibility
"There are numerous decisions which hold that where a plan is on its face nonconfirmable, as a matter of law, it is appropriate for the court to deny approval of the disclosure statement describing the nonconfirmable plan." In re Silberkraus, 253
B.R. 890, 899 (Bankr. C.D. Cal. 2000) (collecting cases).
The Chapter 11 Plan’s proposed effective date is the first day of the first full month after entry of the final order confirming plan (but no earlier than 8/01/17). Classes of claims are categorized as follows:
Claims Classification
Administrative Claims:
UST Fees - $4,875 (estimated), in full on effective date
Turoci Firm - $40,000 (estimated)/Terms: in full on effective date
Priority Tax Claims:
IRS: $5,251.48/ Terms: in full on effective date
California BOE: $125,750.40/Terms: 48 months, 7% interest, $3,011.25/ mo.
Class 1: Comerica Bank (Impaired)
Nature of lien: first priority security interest in all of Debtor’s assets (D values at $150,000)
· Claim: $494,123.90
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Treatment: Bifurcated claim – Secured claim of $150,000, Unsecured Claim of
$344,123.90
Secured Claim Terms: 60 months, 6% interest, $2,899.92/mo.
Unsecured Claim treated with Class 6 GUCs
Class 2: FC Marketplace aka Pioneer Park (Impaired)
Nature of lien: second priority security interest in all Debtor’s assets
Unsecured claim of $88,963.76
Treatment: treated with Class 6 GUCs
Plan proposes to avoid the lien of FC Marketplace on entry of confirmation order
Class 3: Oggi’s Corporate (Impaired)
Nature of lien: third priority lien in all Debtor’s assets
Unsecured claim of $54,106.12
Treatment: paid with Class 6 GUCs
Plan proposes to avoid the lien of Oggi’s Corporate on entry of confirmation order
Class 4: Financial Pacific Leasing
Secured as to leased restaurant equipment which D values at $2,000
Secured Claim of $2,000, Treatment: Paid in full on effective date (unimpaired)
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Unsecured Claim of $42,864.40 (paid with class 6 GUCs) (impaired)
Plan proposes to avoid the lien of FPL on payment in full.
Class 5: High Desert Prime, LP (Impaired)
Landlord
Debtor is assuming the lease and proposes to cure the arrears owed to landlord
· Claim: $178,499.98
Treatment: 48 months, 0% interest (per agreement with HDP), $3,718.75/mo.
Class 6: General Unsecured Creditors (Impaired)
· Total Claims: $636,718.69
· Dividend: 17% or $120,000
Treatment: $1,000/mo. for first 48 months and $6,000 for months 48-60
Note: Pawnee lease for bar stools, dishwasher etc., will be rejected and Pawnee filed an unsecured claim and will be treated as such.
Insiders/Equity Holders
No Insider Claims
Equity to retain stock subject to Section VII (which provides potentially for new value of $10,000)
Plan Funding and Feasibility
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Debtor indicates it will have $60,000 cash on hand as of the Effective Date ($35,000 cash on hand and $25,000 to be accumulated between now and Effective date). This amount appears sufficient to cover payments due on the Effective Date.
Disposable income projection is $6,400 per month based on average net disposable income since December 2016 (and after payments of $2,204.17 to Comerica and
$3,206.78 to Sysco Foods) for a total of $11,810.95 for plan payments. This amount appears sufficient to cover the proposed plan payments of approximately $10,632 per month
Management
Patricia Forte (50% owner) is current CEO and will step down as CEO Randall Richey will remain Secretary
Marianne Richey, current CFO will become CEO and CFO post-confirmation with day-to-day responsibility for overseeing the financial affairs.
Other Terms
D will be disbursing agent with no compensation unclaimed distributions to revert to reorganized Debtor.
Executory Contracts
Debtor shall assume the commercial property lease for the restaurant at 19201 Bear Valley Road in Apple Valley and shall assume the Franchise Agreement with Oggie’s Corporate.
Debtor shall reject two leases for restaurant equipment.
Liens
Liens of FC and Oggi’s Corporate will be extinguished upon confirmation and liens of
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Comerica and FPL will be extinguished on payment in full of their allowed secured claims.
Tentative Ruling
The Court has examined the Debtor’s Amended DS and Plan to determine whether "adequate information has been provided and has identified the following issues to be addressed:
· The DS and Plan contemplate bifurcation of Comerica and FPL’s claims and avoidance of remaining junior liens. A Motion to Value was filed on July 24.
· The Declaration of Marianne Richey makes reference to Exhibit E and purports to authenticate this Exhibit as the "Annual Projected Cash Flow" for the Debtor based on monthly operating reports from December 2016 to April 2017. However, the "Annual Projected Cash Flow" is Exhibit D, not Exhibit E as indicated in the declaration.
There is no need for a further hearing. Once the Debtor has amended the disclosure statement the Debtor may lodge a proposed order approving the disclosure statement, as modified.
APPEARANCES REQUIRED.
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
2:00 PM
From: 12/13/16, 3/7/17, 5/30/17, 7/25/17 Also #19
EH
Docket 8
- NONE LISTED -
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci
11:00 AM
Docket 49
9/27/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1883.20 Trustee Expenses: $ 130.16
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Donald A Nelson Represented By
H. Christopher Heritage
Trustee(s):
Arturo Cisneros (TR) Pro Se
11:00 AM
Docket 16
- NONE LISTED -
Debtor(s):
Carlos Manuel Torres Represented By Priscilla C Solario
Joint Debtor(s):
Sandra Castaneda Represented By Priscilla C Solario
Movant(s):
Sandra Castaneda Represented By Priscilla C Solario
Carlos Manuel Torres Represented By Priscilla C Solario Priscilla C Solario
Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
Docket 28
9/27/17
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1228.00
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
James Edwin Horn Pro Se
Joint Debtor(s):
Nam-Yong Horn Pro Se
Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
Also #5 EH
Docket 92
BACKGROUND
Debtor obtained a discharge in a Chapter 7 case filed on November 30, 2010. Between February 14, 2013 and September 18, 2015, Debtor filed four Chapter 13 cases, all of which were dismissed within one year.
On August 5, 2016, Elizabeth Baker ("Debtor") filed a Chapter 13 voluntary petition. On October 26, 2016, Debtor’s Chapter 13 plan was confirmed. On June 9, 2017, unaware that she was ineligible for a Chapter 7 discharge, Debtor converted her case to Chapter 7. On July 24, 2017, Debtor filed a motion to reconvert to Chapter 13.
DISCUSSION
11 U.S.C. § 706(a) states: "The debtor may convert a case under this chapter to a case
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under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title." Here, Debtor’s case was previously converted under § 1307.
"Courts are divided as to whether the debtor can re-convert a case that has been previously converted." Ginsberg & Martin on Bankruptcy § 12.13[A] (5th ed. 2017-2); see also In re Masterson, 141 B.R. 84, 87 (Bankr. E.D. Pa. 1992) ("The courts appear to be evenly divided on the issue of whether a ‘second conversion’ of a case previously converted to Chapter 7 is ever permissible.") (collecting cases). The courts that have determined that § 706(a) bars subsequent reconversion have primarily relied upon the plain language of the statute, but have also considered the legislative history. See In re Banks, 252 B.R. 399, 400 (Bankr. E.D. Mich. 2000). One court has stated the following:
Unfortunately, for the debtor, the language of Section 706 clearly bars a debtor from converting a case from Chapter 7 to Chapter 13 more than once.
Subsection (a) of that section states in relevant part that a "debtor may convert a case under this chapter to a case under Chapter 11 or 13 of this title at any time, if the case has not been converted under Section 1112 or 1307 of this title. The language of this statute is not discretionary. By its plain meaning it bars the debtor from this second attempt at conversion. Moreover, there is no case law supporting a discretionary right. At least one other bankruptcy court has arrived at this conclusion, In re Bumpass, 28 B.R. 597 (Bankr. S.D.N.Y. 1983), and this Court shares that view.
In re Nimai Kumar Ghosh, 38 B.R. 600, 603 (Bankr. E.D.N.Y. 1984) (footnote omitted).
As the court implicitly concluded in Nimai Kumar Ghosh, the phrase appears "if the case has not been converted" appears to modify the entirety of the first clause, not simple the language "at any time." The phrase "at any time" is not set off from the remainder of the clause in any fashion. Therefore, §706(a) is only applicable if the case has not been converted previously. The remaining question is, if § 706(a) is inapplicable, can the Debtor resort to any other mechanism in order to convert her
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case?
Courts that have permitted a reconversion appear to fall into two categories. First, some courts appear to believe that, when § 706(a) is inapplicable, the default position is that the Court has discretion to allow conversion based on policy grounds. See, e.g., In re Masterson, 141 B.R. at 88. Other courts have turned to § 706(c). See, e.g., Matter of Johnson, 116 B.R. 224, 225 (Bankr. Idaho 1990); In re Sensibaugh, 9 B.R. 45, 46 (Bankr. E.D. Va. 1981). Section 706(c) states: "[t]he court may not convert a case under this chapter to a case under chapter 12 or 13 of this title unless the debtor requests or consents to such conversion." While the plain language of § 706(c) indicates that it operates as a restraint on the court’s authority, not as a source of authority, courts that have utilized this provision appear to conclude that if the debtor consents to or requests conversion, the court has discretion to permit such conversion.
A third possibility is that a debtor could seek voluntary dismissal or conversion under
§ 707, consent to conversion, and allow the Court to determine whether dismissal or conversion was more appropriate in the circumstances. This approach would have the disadvantage of possibly resulting in dismissal of the case, but it would seem to solve the statutory interpretation issues encountered by the alternative approaches.
Nevertheless, the Court need not determine whether reconversion is permitted under § 706(a) because, if the Court were to conclude that reconversion is discretionary, Debtor has not demonstrated that the exercise of such discretion would be appropriate. Debtor has had four Chapter 13 cases dismissed in the previous five years. More importantly, at the time Debtor converted to Chapter 7, there was an outstanding motion to dismiss pending for failure to make plan payments. Debtor appears to have chosen to convert the case to Chapter 7 rather than resolve the Chapter 13 Trustee’s pending motion to dismiss.
Given Debtor’s history in bankruptcy, the absence of any legal argument in Debtor’s motion, and the absence of any evidence suggesting a change in circumstances which would allow Debtor to be successful in a Chapter 13 proceeding, the reconversion of the case, even if the Court were to conclude that such reconversion was legally
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permissible, would be inappropriate.
TENTATIVE RULING
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Elizabeth T Baker Represented By Nancy Korompis
Movant(s):
Elizabeth T Baker Represented By Nancy Korompis
Trustee(s):
John P Pringle (TR) Pro Se
11:00 AM
Also #4 EH
Docket 98
- NONE LISTED -
Debtor(s):
Elizabeth T Baker Represented By Nancy Korompis
Movant(s):
Elizabeth T Baker Represented By Nancy Korompis
Trustee(s):
John P Pringle (TR) Pro Se
11:00 AM
(Holding Date)
From: 7/31/17, 8/28/17 EH
Docket 82
- NONE LISTED -
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
Charles W Daff (TR) Represented By Toan B Chung
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
11:00 AM
Docket 49
9/27/17
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,950 Trustee Expenses: $ 414.51
Tax Preparer: $1,000
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
William Mark Eddington Represented By Jenny L Doling
Trustee(s):
Todd A. Frealy (TR) Pro Se
11:00 AM
Docket 53
9/27/17
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,527.75 Trustee Expenses: $ 204.64
Tax Preparer: $1,000
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Gena Grossman Represented By Robert L Firth
Trustee(s):
Arturo Cisneros (TR) Pro Se
11:00 AM
From: 8/2/17 EH
Docket 35
08/02/2017
Factual Background
On June 3, 2016 ("Petition Date"), Barbara Ellen Dunn-Leonard ("Debtor") filed a chapter 7 petition. Discharge was granted on September 12, 2016. Larry D. Simons ("Trustee") is the duly appointed chapter 7 trustee.
Debtor’s Schedule A/B lists Debtor’s interest in a whole-life-policy-with-an- irrevocable-trust, Barbara Dunn-Leonard Insurance Trust ("Policy"). The beneficiaries to the Policy are listed as Ralph Edwards Production ("Ralph Edwards"), Daughter, and Son. The Policy has a cash value of $120,949.35. Debtor claims a $14,325.00 exemption pursuant to C.C.P. § 703.140 (b)(8) and a $18,149.00 exemption pursuant to C.C.P. § 703.140 (b)(5) on the Policy.
On October 7, 2016, Trustee sent an e-mail to Debtor’s counsel, Leslie K. Kaufman. In said e-mail Trustee asked "if there were any documents which would evidence the security interest in the life insurance policy as asserted by the debtor?" ("October 7 E-mail"). Trustee alleges that no response was received. Trustee then e- mailed Debtor’s counsel again on April 28, 2017 with a similar inquiry ("April 28 E- mail"). Trustee alleges no response was received from Debtor’s counsel regarding the April 28 E-mail. Trustee concedes that he is in possession of the Policy.
On July 5, 2016, Trustee filed a Motion for Order Compelling Turnover of Debtor’s Books and Records ("Motion"). Trustee alleges that Debtor has failed to
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comply with 11 U.S.C. §§ 521 and 542. Trustee requests that the Court compel Debtor to turnover books and records relating or pertaining to the Debtor’s interest in the cash surrender value of the Property and books and records relating to or pertaining to the security interest of Ralph Edwards in and to the Policy and its cash surrender value.
Opposition
On July 19, 2017, Debtor filed an opposition ("Opposition") to Trustee’s Motion. Debtor asserts that Trustee’s Motion is improper and a misrepresentation of the events leading to the Motion. Debtor asserts that she has fully complied with each of Trustee’s requests and there is no other information or documents to be turned over. Debtor asserts that, through counsel, she has spent more than a year trying to determine whether Debtor could do anything else to assist Trustee. Debtors attempts were ignored by Trustee and Trustee’s counsel.
In support of Debtor’s Opposition, Debtor provides as evidence a series of e- mails. The e-mails are outlined below:
Date | Sender | Content |
07/08/2016 | Debtor’s Counsel | E-mail containing letter explaining Ralph Edwards’ interest in the trust, as well as the 2015 Policy statement |
10/07/2016 | Trustee | Request for any further information about the Policy/Trust |
10/11/2016 | Debtor’s Counsel | Debtor is unaware of any security interest documents outside those set forth in the Trust |
11/29/2016 | Debtor’s Counsel | Request for call to discuss the Trust |
11/29/2016 | Trustee’s Counsel | Counsel states "I will reach out to you in the next day or so" |
12/13/2016 | Debtor’s Counsel | Counsel states "I have still not received any communication from you other than your email of November 29th. Please call me at your earliest convenience." |
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12/13/2016 | Trustee’s Counsel | Counsel states "I left a voicemail for you a week or two ago, I cannot recall. I will reach out again, but you can always send me an email with your inquiry and I will respond." |
12/13/2016 | Debtor’s Counsel | Counsel writes "There was no voicemail message. My November 28th email appears at the bottom of this chain below. Please call me at your earliest convenience." |
04/28/2016 | Debtor’s Counsel | Counsel writes " Despite the passage of almost six months I have still not received any substantive communication from you. I left messages on your voicemail on March 15, 2017 at 4:40 PM; and on April 26,2017 at 12:01 PM, but have yet to receive a return call. Please contact me at your earliest convenience so that we may discuss the above referenced bankruptcy matter." |
Each e-mail sent by Debtor’s counsel was sent to the attorney of record for Trustee as well as to the Trustee. Debtor’s counsel also requested to be advised if there had been a change of counsel or if it was best to communicate directly with Trustee.
Furthermore, Debtor asserts that Trustee’s representation that Debtor never responded to the request made via the October 7 E-mail is incorrect. Debtor responded to the request on October 11, 2017. Debtor also contends that the April 28 E-mail presented by Trustee in the Motion, was in fact a response to an e-mail sent by Debtor’s counsel and not a stand-alone inquiry made by Trustee.
Debtor requests that the Court award attorney fees and costs needed to oppose the Motion.
Reply
On July 26, 2017, the Trustee filed his reply to the Opposition asserting, correctly, that no direct evidence has been provided to support the explanations
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referenced by Debtor’s Counsel in her declaration.
Discussion
Motion for Order Compelling Turnover of Records
A debtor must cooperate with the trustee as necessary to enable the trustee to perform his statutory duties. 11 U.S.C. § 521(a)(3). Among those duties is the trustee’s duty to "collect and reduce to money the property of the estate for which the trustee serves, and close the estate as expeditiously as is compatible with the best interests of parties in interest." 11 U.S.C. § 704 (a)(1). Furthermore the trustee must "investigate the financial affairs of the debtor." 11 U.S.C § 704 (a)(4).
A debtor must surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers relating to the property of the estate. 11 U.S.C. § 521(a)(4). Property of the estate includes "all legal or equitable interests of the debtor is property as of the commencement of the case." 11 U.S.C. § 541(a)(1). Life insurance policies are not excluded from becoming part of the bankruptcy estate. Gladstone v. U.S. Bancorp¸ 811 F.3d 1133, 1140 (9th Cir. 2016).
Here, Debtor has presented in her Schedule A/B the Policy with a cash value of $120,949.35. Pursuant to 11 U.S.C. § 541(a)(1), the Policy is property of the estate. Debtor must surrender all books, document, records and papers relating to the Policy pursuant to 11 U.S.C. § 521(a)(4). Debtor asserts all documents have been surrendered.
Under 11 U.S.C. § 542(a), an entity in "possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title or that the debtor may exempt under section 522 of this title, shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate." 11 U.S.C. § 542(a). Trustee asserts that Debtor has failed comply with § 542 in that she has failed to deliver to Trustee the records pertaining to the Policy, Debtor’s interest in the cash value, and Ralph Edwards’ interest in the Policy.
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Trustee concedes that he is in possession of the Policy and the irrevocable trust. However, Trustee alleges that he needs to review any records pertaining to Ralph Edwards’ interest in the Policy in order to determine the validity of Ralph Edwards’ interest in the Policy. According to Trustee, Debtor has failed to cooperate with Trustee and those documents have been denied to him. Furthermore, Trustee needs the additional records to determine if Ralph Edwards’ interest is a preferential transfer or a fraudulent conveyance. This information is relevant to a determination of whether Ralph Edwards’ interest may be avoided for the benefit of the estate.
Debtor alleges that all documents requested by Trustee were turned over to Trustee on July 8, 2017. Debtor contends that there are no other documents which can be provided to Trustee and Trustee was informed of this on October 11, 2017. However, the Trustee correctly points out that the Debtor has not provided direct evidence from the Debtor regarding the underlying facts asserted in the Opposition. Specifically, the Opposition provides only second-hand hearsay evidence by Debtor’s counsel regarding the non-existence of documents responsive to the Trustee’s request for turnover and although the Opposition purports to provide an explanation of the facts surrounding the grant of a security interest to Ralph Edwards Productions by the Debtor in her Life Insurance Trust, there is no declaration by the Debtor to support these facts nor is Counsel able to testify to their veracity.
Debtor’s Request for Attorney’s Fees and Cost
Debtor fails to provide any statutory authority under which attorney’s fees and costs may be awarded. Thus, this request is denied.
Based on the foregoing, the Court is inclined to GRANT the Trustee’s Motion and order turnover of the documents. Alternatively, the Court may set the matter for an evidentiary hearing for the Debtor to testify regarding the facts described in the Opposition.
APPEARANCES REQUIRED.
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Debtor(s):
Barbara Ellen Dunn-Leonard Represented By Leslie K Kaufman
Movant(s):
Larry D Simons (TR) Represented By Daniel A Lev
Trustee(s):
Larry D Simons (TR) Represented By Daniel A Lev
11:00 AM
Docket 50
9/27/17
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 3,181.00 Trustee Expenses: $ 357.94
Accountant Fees: $ 3,557.50 Accountant Costs: $ 514.16
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Victor Manuel Monterroso Represented By Timothy S Huyck
Joint Debtor(s):
Maria Hilda Monterroso Represented By Timothy S Huyck
11:00 AM
Trustee(s):
Lynda T. Bui (TR) Pro Se
11:00 AM
EH
Docket 29
BACKGROUND
On July 12, 2017, an involuntary Chapter 7 petition was filed against Integrated Wealth Management, Inc. ("Debtor"). After an extension of the applicable deadline, Debtor filed its answer on September 12, 2017.
Prior to the answer being filed, One El Paseo North, LLC ("Landlord") filed a motion for immediate payment of its gap rent claim pursuant to § 502(f). Landlord asserts that it holds a gap rent claim totaling $27,776.73, covering the time period between the filing of the involuntary petition, on July 12, 2017, and the time Debtor abandoned the premises, on August 18, 2017.
DISCUSSION
11 U.S.C. § 502(f) states:
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(f) In an involuntary case, a claim arising in the ordinary course of the debtor’s business or financial affairs after the commencement of the case but before the earlier of the appointment of the appointment of a trustee and the order for relief shall be determined as of the date such claim arises, and shall be allowed under subsection (a), (b), or (c) of this section or disallowed under subsection
(d) or (e) of this section, the same as if such claim had arisen before the date of the filing of the petition.
While Landlord is correct that the Bankruptcy Code allows payment of ordinary course business claims that accrue during the gap period, it is unclear what the legal justification is for Landlord’s request that the Court order the gap claim to be paid immediately. 11 U.S.C. § 507(a)(3) specifically affords debts incurred pursuant to § 502(f) third-priority status. If the estate is administratively insolvent, or does not have funds to pay all first, second, and third-priority claims, then Landlord would not receive full payment of its claim. Because Landlord may not receive full payment of its claim, it would be inappropriate to order immediate payment of its claim.
Debtor further objects to the issuance of an order allowing Landlord’s claim, asserting that a motion to allow a claim for an unpaid § 502(f) claim is procedurally improper. The Court disagrees with Debtor’s contention that a party cannot seek allowance of an administrative claim separate from filing a proof of claim. As an order for relief has not yet been entered, however, the relief requested is premature, since, among other things, a Chapter 7 trustee has not had the opportunity to vet the request. As an aside, the Court notes that Landlord has filed a proof of claim, but it did not request administrative priority.
TENTATIVE RULING
The Court will DENY the motion.
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APPEARANCES REQUIRED.
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
One El Paseo North, LLC Represented By Thomas J Polis
11:00 AM
EH
Docket 213
BACKGROUND
On September 30, 2013, Charles Biehl ("Debtor") filed a Chapter 7 voluntary petition. On September 21, 2015, Trustee filed an adversary proceeding against Rene
Clements-Biehl ("Defendant") for: (1) avoidance and recovery of intentional fraudulent transfer; (2) avoidance and recovery of constructively fraudulent transfer;
(3) avoidance and recovery of preferential transfer; (4) disallowance of claims; (5) unjust enrichment; (6) declaratory relief. The subject of the adversary proceeding was certain real property located at 6 Dover Ct., Rancho Mirage, CA 92270 and 3338 Tempe Dr., Huntington Beach, CA 92649, and certain furniture located therein.
According to Trustee, pursuant to a marital settlement agreement, a state court entered a judgment confirming a property division on October 30, 2012. Later, on November 21, 2012, Debtor transferred to Defendant the real property located in Huntington Beach pursuant to an interspousal grant deed.
On August 15, 2017, Trustee filed a motion to approve compromise pursuant to Fed.
R. Bankr. P. Rule 9019. Trustee proposes to settle the adversary proceeding for either payment of $229,000 within four months, or payment of $256,000 over four years. On
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September 7, 2017, the matter was set for hearing.
DISCUSSION
Fed. R. Bankr. P. Rule 9019 provides that:
On motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct.
The Ninth Circuit Court of Appeals have previously outlined the factors to be considered in approving a compromise pursuant to Rule 9019: (1) the probability of success in the litigation; (2) the difficulties to be encountered in the matter of collection; (3) the complexity, expense, inconvenience and delay of litigation; and (4) the interest of creditors with deference to their reasonable. See In re A&C Props., 784 F.2d 1377, 1381 (9th Cir. 1986). The listed factors assist the Court in determining "the fairness, reasonableness and adequacy of a proposed settlement agreement." Id.
Trustee’s compromise motion does not provide the information the Court requires to apply the A&C Properties factors or to assess the reasonableness of the settlement because the motion fails to identify the value of the Property or estimate the value of Debtor’s interest in the property, rendering it impossible to determining the reasonableness of the settlement amount.
In the absence of any evidence regarding the value of the Property or the value of the community estate’s interest in the Property, the Court cannot approve the compromise
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when only general arguments have advanced in support of the compromise.
TENTATIVE RULING
The Court is inclined to CONTINUE the matter for Trustee to file a supplemental declaration.
APPEARANCES REQUIRED.
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - DISBARRED - Steven L Bryson
Movant(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander Lynda T Bui
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander Lynda T Bui
2:00 PM
Adv#: 6:16-01176 Simons v. Navarro
From: 9/7/16, 11/9/16, 1/11/17, 3/8/17, 4/12/17, 5/17/17, 6/7/17, 7/26/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Jose Antonio Hernandez Represented By
Jessica De Anda Leon
Defendant(s):
Carolina Villalobos Navarro Represented By Christopher J Langley
Plaintiff(s):
Larry D Simons Represented By Frank X Ruggier
Trustee(s):
Larry D Simons (TR) Represented By Frank X Ruggier
2:00 PM
Adv#: 6:16-01128 Frealy v. Trotochau et al
From: 7/20/16, 9/28/16, 1/11/17, 3/8/17, 6/7/17, 8/23/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
M. A. Tabor Represented By
Judith Runyon
Defendant(s):
Pacific Mortgage Exchange, Inc. Represented By
Salvatore Bommarito
Robin Sherrie Trotochau Pro Se
Plaintiff(s):
Todd A. Frealy Represented By Anthony A Friedman
2:00 PM
Trustee(s):
Todd A. Frealy (TR) Represented By Anthony A Friedman Lindsey L Smith
2:00 PM
Adv#: 6:15-01206 Speier v. Simmons et al
From: 9/23/15, 2/10/16, 5/25/16, 9/28/16, 11/16/16, 1/11/17, 3/29/17, 6/28/17, 8/30/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Hilary D Hill Represented By
Matthew D Resnik
Defendant(s):
Hilary D Hill Represented By
David Brian Lally
David Schanhals Represented By David Brian Lally
Angela Simmons Represented By David Brian Lally
Plaintiff(s):
Steven M Speier Represented By Robert P Goe
Trustee(s):
Steven M Speier (TR) Represented By
2:00 PM
Robert P Goe Elizabeth A LaRocque
2:00 PM
Adv#: 6:17-01121 Smedman et al v. STATE BOARD OF EQUALIZATION
EH
Docket 0
- NONE LISTED -
Debtor(s):
Garrick Craig Smedman Represented By Neil C Evans
Defendant(s):
STATE BOARD OF Pro Se
Joint Debtor(s):
Veronica Lee Wilkins Represented By Neil C Evans
Plaintiff(s):
Veronica Lee Wilkins Pro Se
Craig Smedman Represented By Neil C Evans
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
Adv#: 6:17-01121 Smedman et al v. STATE BOARD OF EQUALIZATION
From: 8/30/17 Also #16
EH
Docket 1
- NONE LISTED -
Debtor(s):
Garrick Craig Smedman Represented By Neil C Evans
Defendant(s):
STATE BOARD OF Pro Se
Joint Debtor(s):
Veronica Lee Wilkins Represented By Neil C Evans
Plaintiff(s):
Veronica Lee Wilkins Pro Se
Craig Smedman Represented By Neil C Evans
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
HOLDING DATE
From: 6/7/17, 7/12/17, 8/2/17 Also #19
EH
Docket 208
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Movant(s):
Charles Edward Schrader Pro Se
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17, 4/5/17, 6/7/17, 7/12/17,
8/2/17
Also #18 EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
12:30 PM
From: 9/27/17 Also #2
EH
Docket 98
09/28/2017
BACKGROUND
On August 5, 2016, Elizabeth Baker ("Debtor") filed her petition for chapter 13 relief. The Debtor’s chapter 13 plan was confirmed on October 26, 2016. Rod Danielson was the duly appointed chapter 13 trustee ("Trustee"). On June 9, 2017, the Debtor filed a motion to convert the case from a chapter 13 to a case under chapter 7. The case was converted by the Court on the same date, pursuant to §1307(a) (the "Conversion Order").
On July 11, 2017, the Court issued to the Debtor a Notice of non-entitlement to discharge pursuant to 11 U.S.C. § 727(a)(8) or (9) because the Debtor had received a chapter 7 discharge in March 2011.
On July 24, 2017, the Debtor filed a motion to reconvert the case to a case under chapter 13. At the hearing on the Motion to Reconvert, the Court noted that courts are divided regarding a Debtor’s ability to reconvert and, separately, noted that even assuming the Court was convinced that reconversion was authorized under §706, that the Debtor’s filing history and the absence of a change in financial circumstances weighed against conversion. The Court, however, permitted the Debtor an opportunity to file a motion to seek to vacate the conversion order.
On September 6, 2017, the Debtor filed a motion to vacate the Conversion
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Order ("Motion"). The Motion includes a declaration by the Debtor’s counsel in which she concedes that in filing the motion to convert, she did not take into account the Debtor’s prior filings and as a result did not realize that the Debtor would not be entitled to a discharge in a chapter 7 case.
DISCUSSION
The Court may find grounds to vacate the Conversion Order based on the Debtor’s counsel’s declaration and a finding that "excusable neglect" resulted in the conversion. However, the Court is concerned that the Debtor is not able to continue making payments in a reconverted chapter 13. Specifically, when the Debtor’s case was converted, a motion to dismiss was already pending for a $576 delinquency as of May 31, 2017. Additionally, on June 13, 2017 (presumably before realizing the case had been converted), the Trustee filed a Motion to Dismiss the chapter 13 case for failure to submit 2016 Federal and State Tax Returns and any corresponding refunds due to the Trustee.
TENTATIVE RULING
The Court is inclined to GRANT the Motion conditioned on the Debtor curing the issues raised by the Trustee in his prior motions to dismiss and in the Debtor’s counsel holding sufficient certified funds to bring the plan current.
However, the Court notes that the Motion was not served on any of the Debtor’s creditors. As such, the Court is inclined to CONTINUE the hearing for proper service on creditors and for Debtor to file a supplemental declaration indicating it is prepared to cure the issues outlined herein.
APPEARANCES REQUIRED.
09/28/2017
BACKGROUND
On August 5, 2016, Elizabeth Baker ("Debtor") filed her petition for chapter 13 relief. The Debtor’s chapter 13 plan was confirmed on October 26, 2016. Rod Danielson was the duly appointed chapter 13 trustee ("Trustee"). On June 9, 2017, the Debtor filed a motion to convert the case from a chapter 13 to a case under chapter 7. The case was converted by the Court on the same date, pursuant to §1307(a) (the "Conversion Order").
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On July 11, 2017, the Court issued to the Debtor a Notice of non-entitlement to discharge pursuant to 11 U.S.C. § 727(a)(8) or (9) because the Debtor had received a chapter 7 discharge in March 2011.
On July 24, 2017, the Debtor filed a motion to reconvert the case to a case under chapter 13. At the hearing on the Motion to Reconvert, the Court noted that courts are divided regarding a Debtor’s ability to reconvert and, separately, noted that even assuming the Court was convinced that reconversion was authorized under §706, that the Debtor’s filing history and the absence of a change in financial circumstances weighed against conversion. The Court, however, permitted the Debtor an opportunity to file a motion to seek to vacate the conversion order.
On September 6, 2017, the Debtor filed a motion to vacate the Conversion Order ("Motion"). The Motion includes a declaration by the Debtor’s counsel in which she concedes that in filing the motion to convert, she did not take into account the Debtor’s prior filings and as a result did not realize that the Debtor would not be entitled to a discharge in a chapter 7 case.
DISCUSSION
The Court may find grounds to vacate the Conversion Order based on the Debtor’s counsel’s declaration and a finding that "excusable neglect" resulted in the conversion. However, the Court is concerned that the Debtor is not able to continue making payments in a reconverted chapter 13. Specifically, when the Debtor’s case was converted, a motion to dismiss was already pending for a $576 delinquency as of May 31, 2017. Additionally, on June 13, 2017 (presumably before realizing the case had been converted), the Trustee filed a Motion to Dismiss the chapter 13 case for failure to submit 2016 Federal and State Tax Returns and any corresponding refunds due to the Trustee.
TENTATIVE RULING
The Court is inclined to GRANT the Motion conditioned on the Debtor curing the issues raised by the Trustee in his prior motions to dismiss and in the Debtor’s counsel holding sufficient certified funds to bring the plan current.
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However, the Court notes that the Motion was not served on any of the Debtor’s creditors. As such, the Court is inclined to CONTINUE the hearing for proper service on creditors and for Debtor to file a supplemental declaration indicating it is prepared to cure the issues outlined herein.
APPEARANCES REQUIRED.
Debtor(s):
Elizabeth T Baker Represented By Nancy Korompis
Trustee(s):
John P Pringle (TR) Pro Se
12:30 PM
Also #1 EH
Docket 92
BACKGROUND
Debtor obtained a discharge in a Chapter 7 case filed on November 30, 2010. Between February 14, 2013 and September 18, 2015, Debtor filed four Chapter 13 cases, all of which were dismissed within one year.
On August 5, 2016, Elizabeth Baker ("Debtor") filed a Chapter 13 voluntary petition. On October 26, 2016, Debtor’s Chapter 13 plan was confirmed. On June 9, 2017, unaware that she was ineligible for a Chapter 7 discharge, Debtor converted her case to Chapter 7. On July 24, 2017, Debtor filed a motion to reconvert to Chapter 13.
DISCUSSION
11 U.S.C. § 706(a) states: "The debtor may convert a case under this chapter to a case
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under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title." Here, Debtor’s case was previously converted under § 1307.
"Courts are divided as to whether the debtor can re-convert a case that has been previously converted." Ginsberg & Martin on Bankruptcy § 12.13[A] (5th ed. 2017-2); see also In re Masterson, 141 B.R. 84, 87 (Bankr. E.D. Pa. 1992) ("The courts appear to be evenly divided on the issue of whether a ‘second conversion’ of a case previously converted to Chapter 7 is ever permissible.") (collecting cases). The courts that have determined that § 706(a) bars subsequent reconversion have primarily relied upon the plain language of the statute, but have also considered the legislative history. See In re Banks, 252 B.R. 399, 400 (Bankr. E.D. Mich. 2000). One court has stated the following:
Unfortunately, for the debtor, the language of Section 706 clearly bars a debtor from converting a case from Chapter 7 to Chapter 13 more than once.
Subsection (a) of that section states in relevant part that a "debtor may convert a case under this chapter to a case under Chapter 11 or 13 of this title at any time, if the case has not been converted under Section 1112 or 1307 of this title. The language of this statute is not discretionary. By its plain meaning it bars the debtor from this second attempt at conversion. Moreover, there is no case law supporting a discretionary right. At least one other bankruptcy court has arrived at this conclusion, In re Bumpass, 28 B.R. 597 (Bankr. S.D.N.Y. 1983), and this Court shares that view.
In re Nimai Kumar Ghosh, 38 B.R. 600, 603 (Bankr. E.D.N.Y. 1984) (footnote omitted).
As the court implicitly concluded in Nimai Kumar Ghosh, the phrase appears "if the case has not been converted" appears to modify the entirety of the first clause, not simple the language "at any time." The phrase "at any time" is not set off from the remainder of the clause in any fashion. Therefore, §706(a) is only applicable if the case has not been converted previously. The remaining question is, if § 706(a) is inapplicable, can the Debtor resort to any other mechanism in order to convert her
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case?
Courts that have permitted a reconversion appear to fall into two categories. First, some courts appear to believe that, when § 706(a) is inapplicable, the default position is that the Court has discretion to allow conversion based on policy grounds. See, e.g., In re Masterson, 141 B.R. at 88. Other courts have turned to § 706(c). See, e.g., Matter of Johnson, 116 B.R. 224, 225 (Bankr. Idaho 1990); In re Sensibaugh, 9 B.R. 45, 46 (Bankr. E.D. Va. 1981). Section 706(c) states: "[t]he court may not convert a case under this chapter to a case under chapter 12 or 13 of this title unless the debtor requests or consents to such conversion." While the plain language of § 706(c) indicates that it operates as a restraint on the court’s authority, not as a source of authority, courts that have utilized this provision appear to conclude that if the debtor consents to or requests conversion, the court has discretion to permit such conversion.
A third possibility is that a debtor could seek voluntary dismissal or conversion under
§ 707, consent to conversion, and allow the Court to determine whether dismissal or conversion was more appropriate in the circumstances. This approach would have the disadvantage of possibly resulting in dismissal of the case, but it would seem to solve the statutory interpretation issues encountered by the alternative approaches.
Nevertheless, the Court need not determine whether reconversion is permitted under § 706(a) because, if the Court were to conclude that reconversion is discretionary, Debtor has not demonstrated that the exercise of such discretion would be appropriate. Debtor has had four Chapter 13 cases dismissed in the previous five years. More importantly, at the time Debtor converted to Chapter 7, there was an outstanding motion to dismiss pending for failure to make plan payments. Debtor appears to have chosen to convert the case to Chapter 7 rather than resolve the Chapter 13 Trustee’s pending motion to dismiss.
Given Debtor’s history in bankruptcy, the absence of any legal argument in Debtor’s motion, and the absence of any evidence suggesting a change in circumstances which would allow Debtor to be successful in a Chapter 13 proceeding, the reconversion of the case, even if the Court were to conclude that such reconversion was legally
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permissible, would be inappropriate.
TENTATIVE RULING
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Elizabeth T Baker Represented By Nancy Korompis
Movant(s):
Elizabeth T Baker Represented By Nancy Korompis
Trustee(s):
John P Pringle (TR) Pro Se
12:30 PM
Docket 61
09/28/2017
BACKGROUND
On November 9, 2016, Fonda Cormier ("Debtor") filed her petition for chapter 13 relief. Rod Danielson was the duly appointed chapter 13 trustee ("Trustee"). The Debtor’s chapter 13 plan was confirmed on December 28, 2016. On June 30, 2017, the Debtor filed a notice to conversion and the Court converted the case on the same date pursuant to § 1307(a) ("Conversion Order"). At approximately 4:23 p.m. of the same day, the Debtor sought to vacate the Conversion Order.
The Court set a hearing on the Debtor’s motion to vacate the Conversion Order and issued a tentative ruling prior to the hearing indicating as follows:
As a preliminary matter, the proof of service included in Debtor’s motion is not signed, and Debtor has not served all parties in interest pursuant to Local Rule 1017.
Additionally, Debtor’s motion contains no legal standard or analysis. Relief from a judgment or order is governed by Fed. R. Civ. P. Rule 60, incorporated into bankruptcy proceedings by Fed. R. Bankr. P. Rule 9024. Debtor has not provided any argument relating to that standard.
Furthermore, the declaration of Debtor’s attorney appears to misrepresent the factual situation. First, the reasons for Debtor converting to Chapter 7 are not given. The primary argument presented by Debtor in support of this motion is that counsel learned, after filing a notice of conversion and having further discussions with Trinity
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Financial, that Trinity Financial would likely file a motion for relief from stay if the case was converted to Chapter 7. Trinity Financial had, however, in fact filed a motion for relief from stay on May 9, 2017, and an order approving the stipulation of the parties was entered on June 27, 2017. Section 10 of that order states: "This order is binding and effective despite any conversion of this bankruptcy case to a case under any other chapter of the Bankruptcy Code." The parties chose not to include language that would provide for relief from stay upon conversion of the case. Therefore, it is unclear how the conversion of the case could have any effect on the automatic stay as it relates to Trinity Financial.
As an aside, the Court notes that Debtor is ineligible for a Chapter 7 discharge under § 727(a)(8) by virtue of a Chapter 7 discharge on September 25, 2009.
Tentative Ruling, August 31, 2017.
On June 6, 2017, the Debtor filed a new Motion to Vacate Order or to Reconvert to Original Chapter 13 ("Motion"). The Motion was filed by the Debtor’s new counsel. The Motion indicates that the conversion was a mistake of prior counsel and that it was one which could have severe consequences for the Debtor.
DISCUSSION
The Court is cognizant, here, that the Debtor’s chapter 13 plan was already confirmed and the mistake was clearly negligent on the part of her prior counsel. However, the Court further notes that a motion to dismiss filed by the Trustee was pending at the time of conversion for a delinquency of $1,147.50.
TENTATIVE RULING
The Court is inclined to GRANT the request to vacate the conversion order conditioned upon the Debtor’s ability to bring her plan current.
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Separately, based on the Debtor’s assertion that she paid her prior counsel $1,000 for the motion to convert her case to a chapter 7, the Court is inclined to issue on OSC re: disgorgement as to Phillip Myer.
APPEARANCES REQUIRED.
Debtor(s):
Fonda Cormier Represented By Manfred Schroer
Trustee(s):
Robert Whitmore (TR) Pro Se
12:30 PM
Docket 18
09/28/2017
Background:
On May 10, 2017 ("Petition Date"), John Empey and Madeleine Tappe (collectively, the "Debtors") filed their petition for chapter 13 relief.
On August 23, 2017, the Debtors filed an Objection to Claim No. 4 (the "Objection") of Bank of America ("Claimant"). Service was proper and no opposition has been filed.
Claim #: 4 Amount: $15,316.80 Objection:
The Debtors object to the claim on the basis that the statute of limitations for this claim has expired.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie
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evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
Rebuttal of the Prima Facie Proof of Claim
In this case, the Debtors assert that the Claim should be disallowed as time barred.
Section 502(b)(1) provides that a claim is deemed allowed, unless such claim is unenforceable against the debtor and property of the debtor under applicable law. The statute of limitations applicable to common counts is four years if the action is founded upon a contract or other writing (e.g., "book account" (¶ 3:398), "account stated" (¶ 3:400), or money lent on a note), and the statute of limitations is generally four years from the date of the last item in the account. CCP § 337(1),(2); Armstrong Petroleum Corp. v. Tri–Valley Oil & Gas Co., 116 CA 4th 1375, 1396, FN. 9 (Cal.
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App. 2004).
Here, the Debtors have asserted under penalty of perjury that they have made no payments on the Claim since September 2012. Thus, the statute of limitations appears to have expired. Moreover, Claimant, though properly served, has failed to respond, which may be deemed as consent to the relief requested under LBR 9013-1(h). Thus, as the ultimate burden of persuasion remains on the Claimant, the Objection must be sustained.
Tentative Ruling
The Objection is SUSTAINED. Claim #4 is disallowed in its entirety.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
John Empey Represented By
Christopher Hewitt
Joint Debtor(s):
Madeleine Tappe Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 9/14/17 EH
Docket 25
09/28/2017
The Court has reviewed the Errata Stipulation filed as Docket No. 38 and is satisfied that the Creditor shall receive payments pro rata with other creditors during the pendency of the Debtors' chapter 13 plan and that the amount to be paid thereafter is consistent with the $400 in disposable income being paid now. Based on the foregoing, the Court is inclined to approve the Stipulation except that the Court finds the language excepting the debt from discharge unnecessary and duplicative given that a prior court has already approved langugage excepting the debt from discharge in future cases. The Stipulation is otherwise approved. Movant may lodge an order.
APPEARANCES WAIVED.
Debtor(s):
Kaleo Mehia Roque Leopoldo Represented By Nicholas M Wajda
Joint Debtor(s):
Andrea Ann Leopoldo Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 33
09/28/2017
BACKGROUND
On July 12, 2017, Alfredo and Veronica Loera (collectively, the "Debtors") filed their petition for chapter 13 relief. The Debtors’ chapter 13 plan was confirmed on August 29, 2017. On September 11, 2017, the Court dismissed the Debtors’ case for a failure to file copies of payment advices required under § 521(i)(1).
On September 14, 2017, the Debtors filed a Motion to Vacate Dismissal ("Motion") and an Application for Order Setting the hearing on shortened time. On September 15, 2017, the Court set the Motion for hearing on shortened time ("OST").
The Court notes several issues with the Notice of Hearing documents filed with the Court. Given the numerous notice filed, it is apparent that counsel for the Debtors realized that the creditors had not been properly served in accordance with the Court’s OST. Nevertheless, the supplemental declaration of Paul Lee filed on September 26, 2017, indicates that creditors were served via overnight mail with the papers on September 21, 2017. The OST required service by overnight mail by September 15, 2017. However, given the nature of the dismissal based solely on the mistaken filing of pay advices, the Court is inclined to accept the service as sufficient under the circumstances.
DISCUSSION
Debtors’ counsel, Paul Yee, by his declaration has indicated that as a result of his office’s failure to choose the correct event code when filing the Debtors’ pay stubs, the case was dismissed. The Court has confirmed that the pay advices were filed by the Debtors prior to the case dismissal on July 20, 2017 as Docket No. 22. As a result of the mistake indicated by the Debtors’ counsel, Docket No. 22, references a
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Notice of Section 341(a) meeting instead of the pay advices.
TENTATIVE RULING
The Court finds that the mistake which resulted in dismissal warrants a finding of excusable neglect. As such, the Court is inclined to GRANT the Motion and vacate the dismissal.
APPEARANCES REQUIRED.
Debtor(s):
Alfredo Loera Represented By Paul Y Lee
Joint Debtor(s):
Veronica O Loera Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Rickey Hernando Waddington Represented By Jonathan D Doan
Joint Debtor(s):
Elrena Victoria Waddington Represented By Jonathan D Doan
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Marion Wright Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jaime Gomez Vivanco Represented By Summer M Shaw
Joint Debtor(s):
Yuriria Vivanco Represented By Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Peter Lawrence Schenk Represented By Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Stasha Lauran Sill Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Angel Felix Ruiz Represented By Edward G Topolski
Joint Debtor(s):
Gladis Del Rosario Ruiz Represented By Edward G Topolski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Anna C. Hopson Represented By Julie J Villalobos
Joint Debtor(s):
George E. Hopson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Richard Ramirez Represented By Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Antonio Silveria Lourenco Represented By Neil R Hedtke
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Louise Laster Represented By
Neil R Hedtke
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ruben O. Perez Represented By
W. Derek May
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Paulette M Gonzales Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Bryan Dale Reid Represented By Paul Y Lee
Joint Debtor(s):
Cristi Mishael Reid Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Eugene Myers Represented By Paul Y Lee
Joint Debtor(s):
Deborah Myers Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Noel Mallari Represented By
David L Nelson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Thomas Milton Bell Represented By Ronald W Ask
Joint Debtor(s):
Guadalupe Bell Represented By Ronald W Ask
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 41
- NONE LISTED -
Debtor(s):
Jose Jesus Reveles Represented By Donald M Medeiros
Joint Debtor(s):
Joanna Reveles Represented By Donald M Medeiros
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 53
- NONE LISTED -
Debtor(s):
David Anthony Lopez Jr. Represented By Heather J Canning Barry E Borowitz
Joint Debtor(s):
Linda Cristine Lopez Represented By Heather J Canning Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 89
- NONE LISTED -
Debtor(s):
Garan Bales Represented By
Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 44
- NONE LISTED -
Debtor(s):
Darna Poole Represented By
Todd B Becker
Joint Debtor(s):
Jerry Poole Represented By
Todd B Becker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
Sherry Ann Beardsley Represented By Jeffrey D Larkin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
11:00 AM
From: 7/27/17 Also #2
EH
Docket 96
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Movant(s):
Deborah Ann Stoddard Represented By Matthew D Resnik Matthew D Resnik David Brian Lally David Brian Lally
Brad Stoddard Represented By Matthew D Resnik Matthew D Resnik David Brian Lally
11:00 AM
Trustee(s):
David Brian Lally
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
11:00 AM
(Holding date) From: 8/31/17 Also #1
EH
Docket 110
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: BANK OF NEW YORK MELLON
EH
Docket 56
- NONE LISTED -
Debtor(s):
Adolfo Ayala Represented By
Anthony Wilaras
Movant(s):
The Bank Of New York Mellon Fka Represented By
Jonathan J Damen Lisa Thomas Anita F Robertson Robert P Zahradka
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
10:00 AM
MOVANT: DITECH FINANCIAL LLC
EH
Docket 67
- NONE LISTED -
Debtor(s):
Jeffrey Michael Berger Represented By Jenny L Doling
Joint Debtor(s):
Debra Lynn Berger Represented By Jenny L Doling
Movant(s):
DITECH FINANCIAL LLC Represented By Natalie E Lea Jamie D Hanawalt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 60
Service is Proper Opposition: Limited
Subject to discussion from the parties regarding adequate protection, the Court is inclined to GRANT the motionb based on the post-confirmation defaults.
APPEARANCES REQUIRED.
Debtor(s):
Zachary Lee Nowak Represented By John F Brady
Movant(s):
WELLS FARGO BANK, N.A. Represented By Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 53
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 12. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Nicholas Asamoa Represented By Stephen S Smyth William J Smyth
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CONSUMER PORTFOLIO SERVICES, INC.
From: 9/19/17 EH
Docket 36
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under
¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Beatriz Esqueda Represented By Rebecca Tomilowitz
Movant(s):
Consumer Portfolio Services, Inc. Represented By
Ryan M Davies
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FEDERAL NATIONAL MORTGAGE/SETERUS
EH
Docket 35
Service is Proper Opposition: Yes
Subject to cure by Debtor or discussion from the parties, the Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT relief from § 1301(a) stay. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 12.
DENY ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Maria I Alcaraz Represented By Manfred Schroer
Joint Debtor(s):
Eduardo D Alcaraz Represented By Manfred Schroer
Movant(s):
Seterus, Inc. as the authorized Represented By Nichole Glowin
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HONDA LEASE TRUST
EH
Docket 36
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Fernando Fabrigas Sr. Represented By
R Creig Greaves
Joint Debtor(s):
Estela F. Fabrigas Represented By
R Creig Greaves
Movant(s):
HONDA LEASE TRUST Represented By
10:00 AM
Trustee(s):
Vincent V Frounjian
Charles W Daff (TR) Represented By Lynda T Bui Brandon J Iskander
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
From: 9/5/17 EH
Docket 10
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (4) based on multiple bankruptcy filings and unauthorized transfers. GRANT relief from
§ 1301(a) stay. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 9,
11. DENY requests under ¶ 7 and 10 for lack of cause shown. DENY request under § 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Maria A Holguin Pro Se
Movant(s):
U.S. Bank National Association, as Represented By
Jason C Kolbe
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NISSAN MOTOR ACCEPTANCE CORPORATION
EH
Docket 13
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Dolores Duran Represented By Christopher J Lauria
Movant(s):
NISSAN MOTOR ACCEPTANCE Represented By
Michael D Vanlochem
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: US BANK NATIONAL ASSOCIATION
EH
Docket 12
- NONE LISTED -
Debtor(s):
Deborah Stevenson Pro Se
Movant(s):
U.S. Bank National Association as Represented By
Dane W Exnowski
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: STEPHEN A BRUNELLO AS TRUSTEE OF THE STEPHEN BRUNELLO LIVING TRUST
EH
Docket 8
- NONE LISTED -
Debtor(s):
Eugene Charles Harris Pro Se
Movant(s):
Stephen A. Brunello as Trustee of Represented By
Carol G Unruh
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: PACIFIC COMMUNITY CREDIT UNION
From: 9/26/17 EH
Docket 45
09/26/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT ¶¶ 3 and 12. Request for APO DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Movant(s):
PACIFIC COMMUNITY CREDIT Represented By
Nichole Glowin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
Adv#: 6:16-01225 Cambridge Medical Funding Group II, LLC v. Allied Injury Management,
From: 11/1/16, 12/6/16, 1/31/17, 2/28/17, 3/28/17, 5/30/17, 8/29/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
John C. Larson Pro Se
Allied Injury Management, Inc. Represented By Alan W Forsley
Plaintiff(s):
Cambridge Medical Funding Group Represented By
Kenneth Hennesay
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Steven Werth
2:00 PM
Also #13.1 & #14 EH
Docket 6
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
Mark Hayek Represented By
Erwin J Shustak
2:00 PM
MOVANT: CHRIS RISENMAY; JAMES BRAY; NICK CUNNINGTON; DAVID THATCHER; CLARK PENNEY; SHATTUCK LAMM; STEPHEN BIESINGER; MARK THATCHER; BRANDT KUHN; MICHELE SARNA; MARK HAYEK, AND MIKE MCCONNELL
From: 9/26/17 Also #13 & #14 EH
Docket 27
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
Mark Hayek Represented By
Erwin J Shustak
2:00 PM
From: 8/16/17, 8/23/17 Also #13 & #13.1
EH
Docket 1
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
10:00 AM
EH
Docket 18
- NONE LISTED -
Debtor(s):
Ronald Lee Vigil Represented By
James D. Hornbuckle
Joint Debtor(s):
Toni Lee Vigil Represented By
James D. Hornbuckle
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
EH
Docket 14
- NONE LISTED -
Debtor(s):
Forrest Clayton Martz Represented By Aaron Lloyd
Joint Debtor(s):
Aubreeanna Ellen Martz Represented By Aaron Lloyd
Trustee(s):
Lynda T. Bui (TR) Pro Se
11:00 AM
Docket 23
10/04/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 1,127.75 Trustee Expenses: $ 63.74
The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Jason A Sandstrom Represented By Julie J Villalobos
Joint Debtor(s):
Vanessa J Sandstrom Represented By Julie J Villalobos
Trustee(s):
Larry D Simons (TR) Pro Se
11:00 AM
11:00 AM
Also #5 EH
Docket 157
- NONE LISTED -
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
Commodity Trucking Acquisition, Represented By
Sharon Z. Weiss
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
11:00 AM
Reconsideration of the Order Granting Relief from the Automatic Stay Also #4
EH
Docket 150
- NONE LISTED -
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
Commodity Trucking Acquisition, Represented By
Sharon Z. Weiss
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
11:00 AM
EH
Docket 56
BACKGROUND
On May 19, 2017 ("Petition Date"), Michelle Meredith ("Debtor") filed her petition for chapter 7 relief. Howard Grobstein is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the bankruptcy estate is the Debtor’s beneficial interest in distributions from the trusts of her grandparents, George J. Heath and Margaret J. Heath. The original trust established by her grandparents was the Heath Family Trust (the "Heath Trust"). In 2002, following the death of George Heath, Margaret created the Margaret J Heath Revocable Living Trust, 2002 (the "Margaret Trust") (collectively, the "Trusts"). Pursuant to the terms of the Margaret Trust, on the death of Margaret Heath the trustee of the Margaret Trust was directed to distribute all assets without restriction. In March 2017, prepetition, Margaret Heath passed away.
On September 13, 2017, the Trustee filed his Motion for Order: (1) Requiring Turnover of Property of the Estate Pursuant to 11 U.S.C. § 542; and (2) Compelling the Debtor's Cooperation with the Trustee Pursuant to 11 U.S.C. § 521 ("Motion").
The Motion was properly served on the Debtor and no opposition has been filed.
DISCUSSION
Under the Bankruptcy Code, a debtor has a duty to surrender property of the estate to the trustee. § 521(4). Furthermore, a trustee has the duty to "collect and reduce to money the property of the estate for which such trustee serves " § 704(1).
Finally, "any entity, other than a custodian, in possession, custody or control of property that the trustee may use, sell, or lease under section 363 of this title shall
deliver to the trustee, and account for, such property or the value of such property "
11:00 AM
Id. § 542(a).
The Trustee seeks an order directing the Debtor to turn over to him distributions received from the Trusts since the Petition Date, directing the Debtor to turn over any future distributions from the Trusts, and ordering the Debtor to turn over the following documents within five days of entry of the order: (1) a full copy of the trust documents and all amendments, (2) an accounting of distributions from the Trusts from the Petition Date to the present, and (3) copies of the Debtor’s bank statements for the period of January 2017 through the present.
In support of the Motion, the Trustee asserts that he sought turnover of Trusts’ distributions but the Debtor asserted that Trusts’ distributions were not part of the bankruptcy estate because they were shielded by the Trusts’ valid spendthrift provisions. (Ex. 7 and Ex. 9). To the extent a debtor holds a beneficial interest in a trust, that beneficial interest becomes property of the estate, unless it is protected by a valid spendthrift provision. 11 U.S.C. § 541(a)(1) and (c)(2). "Assets transferred to an irrevocable trust do not become part of a bankruptcy estate unless the transfer or the trust is invalid." United States v. Lawrence, 189 F.3d 838, 845 (9th Cir.1999). The Trustee asserts that the Heath Trust contained a spendthrift provision but that such provision did not apply to the Debtor and instead specifically indicates that it applies to the "principal beneficiary" of the Heath Trust – which are defined in Article 2 of the Heath Trust as "Class composed of the settlors for their joint lives" (i.e. Margaret and George Heath). Additionally, although the Trustee did not have a copy of the Margaret Trust at the time of the filing of the Motion, Debtor has since provided a copy of the Margaret Trust to the Trustee which was filed with this Court on September 28, 2017 and is Exhibit "1" of the Trustee’s Supplemental Declaration. The Trustee notes that the Margaret Trust also appears to contain no spendthrift provision which would apply to Debtor and to the contrary appears to contemplate full distribution of the Margaret Trust principal on the death of Margaret Heath. The Court has reviewed the Trust documents and agrees with the Trustee’s legal analysis. Based on these facts and arguments asserted by the Trustee, there appears to be no remaining legal issue which would prevent distributions from the Trusts from coming into the Debtor’s bankruptcy estate. Additionally, the Debtor has failed to file opposition to the Trustee’s Motion which this Court deems as consent to the granting of the relief requested pursuant to LBR 9013-1(h).
11:00 AM
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the Motion as follows:
Directing the Debtor to turn over to the Trustee distributions received from the Trust since the Petition Date,
Directing the Debtor to turn over any future distributions from the Trust, and
Ordering the Debtor to turn over the documents requested by the Trustee to the extent not already produced (as set forth in the Trustee’s supplemental declaration filed on September 28, 2017 as Docket No. 65.).
Parties to discuss deadline for turnover. APPEARANCES REQUIRED.
Debtor(s):
Michelle Meredith Represented By Patricia M Ashcraft
Movant(s):
Howard B Grobstein (TR) Represented By Noreen A Madoyan
Trustee(s):
Howard B Grobstein (TR) Represented By Noreen A Madoyan
11:00 AM
EH
Docket 12
BACKGROUND
On June 4, 2017 ("Petition Date"), Timothy and Lisa Lambert (collectively, the "Debtors") filed for chapter 7 relief.
On September 7, 2017, the Office of the United States Trustee ("UST") filed a Motion for Extension of Time to File a Complaint Objecting to Discharge ("Motion"). In support of the Motion, the UST asserts that the Debtors’ schedules indicate that they did not earn income in 2017 and earned less than $7,500 in 2016. The UST further asserts that the Debtors did not appear at the July 10 or August 10, 2017, meetings of creditors. The UST seeks an extention of time to file a complaint objecting to discharge while it investigates the Debtors’ financial condition and specifically issues related to the Debtors’ limited liability corporation, Rainbow Recovery, LLC.
Service of the Motion was proper and no opposition has been filed.
DISCUSSION
Pursuant to Federal Rule of Bankruptcy Procedure ("FRBP") 4004 and 1017, Trustee seeks to extend the deadline for Trustee and U.S. Trustee to file a complaint objecting to Debtor’s discharge under 11 U.S.C. § 727 and the deadline to seek dismissal under § 707 , for an additional 60 days to November 7, 2017..
Under FRBP 4004(a) and 1017(e), on a motion of any party in interest, the court may for cause extend the time to object to discharge or to seek dismissal. Fed. R. Bankr. P. 4004, 1017.
11:00 AM
As a matter of practice what constitutes "cause" rests within the discretion of the bankruptcy court. See In re James, 187 B.R. 395, 397 (Bankr. N.D. Ga. 1995).
Also, Courts are generally unified in the view that the term "for cause" should receive a liberal construction. Id. Notwithstanding that fact, however, a creditor must exhibit some minimum degree of due diligence prior to seeking such an extension, and the Court should not allow the motion to serve as license for a baseless "fishing expedition." Id; See also In re Leary, 185 B.R. 405, 406 (Bankr. D. Mass. 1995). To establish cause movant must (1) show that he had, with reasonable diligence, attempted to investigate the facts and circumstances, and (2) offer a reasonable explanation of why that investigation could not be completed within the allotted time. See Bomarito, 448 B.R. at 251.
The Trustee has presented evidence that Debtors have not presented themselves for examination, and that issues regarding the Debtors’ income in the years preceding the bankruptcy filing have yet to be fully investigated. Without such information, the UST and Trustee cannot determine whether the filing of either a motion to dismiss the case or a complaint to deny discharge are appropriate. For these reasons, the UST’s request for extension constitutes sufficient "cause" for granting of the Motion.
TENTATIVE RULING
Accordingly, the Court is inclined to GRANT the relief requested and provide the UST an extension of 60 days for the filing of a complaint under § 727, and/or for the filing of a motion to dismiss under § 707.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Timothy Wayne Lambert Represented By Edgar P Lombera
Joint Debtor(s):
Lisa Renee Lambert Represented By Edgar P Lombera
11:00 AM
Movant(s):
United States Trustee (RS) Represented By Everett L Green
Trustee(s):
John P Pringle (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17, 4/5/17, 6/7/17, 7/12/17, 8/2/17, 9/27/17
Also #9 EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
HOLDING DATE
From: 6/7/17, 7/12/17, 8/2/17, 9/27/17 Also #8
EH
Docket 208
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Movant(s):
Charles Edward Schrader Pro Se
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
(Holding date)
From: 11/5/14, 12/3/14, 12/15/14, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17, 6/14/17, 6/28/17, 7/31/17
Also #11 EH
Docket 10
07/31/2017
BACKGROUND
On October 25, 2013, Douglas Jay Roger ("Debtor") filed his petition for chapter 7 relief. On September 22, 2014, Revere Financial Corporation ("Revere") and Jerry Wang ("Receiver") filed a complaint for determination of the dischargeability of debts pursuant to §§ 523(a)(2)(B), 523(a)(2)(A), 523(a)(4)(A), 523(a)(4) & 523(a)(6); and objecting to the Debtor’s discharge pursuant to §§727(a)(3), 727(a)(4)(A), 727(a) (4)(B), 727(a)(5), & 727(a)(7) ("Complaint").
On October 6, 2014, the Debtor filed a Motion to Dismiss, to Strike, and for a More Definite Statement ("Motion"). The operative pleadings are as follows:
Memorandum by Jerry Wang in Opposition to Motion (Docket No. 13);
Memorandum by Secured Creditor Revere in Opposition to Motion (Docket No. 14);
Reply of Debtor to Jerry Wang’s Opposition (Docket No. 15);
Reply of Debtor to Revere & Jerry Wang’s Opposition (Docket No. 16);
Debtor’s Supplemental Brief (Docket No. 19); and
Chapter 7 Trustee’s Opposition to Motion (Docket No. 34).
2:00 PM
DISCUSSION
Civil Rule 12(b)(6) standards
Under Civil Rule 12(b)(6), made applicable in adversary proceedings through Rule 7012, a bankruptcy court may dismiss a complaint if it fails to "state a claim upon which relief can be granted." In reviewing a Civil Rule 12(b)(6) motion, the trial court must accept as true all facts alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.
2001). However, the trial court need not accept as true conclusory allegations in a complaint or legal characterizations cast in the form of factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007);
Hartman v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008).
To avoid dismissal under Civil Rule 12(b)(6), a plaintiff must aver in the complaint "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). It is axiomatic that a claim cannot be plausible when it has no legal basis. A dismissal under Civil Rule 12(b)(6) may be based either on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson
Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir.2008).
The Debtor asserts primarily that (1) the Receiver has no "authority" to bring the action; and (2) to the extent that Revere’s claim for damages includes fees and expenses incurred by the Receiver in its claim for damages, such claim is not proper because neither the Debtor nor Revere is obligated for the Receiver’s fees and expenses. To the extent the Debtor prevails on this second argument, the Debtor also requests that the claim of Revere for fees and expenses incurred by the Receiver be stricken, and that Revere be required to set forth a more definite statement of its damages.
The Receiver’s "Authority" to Bring the Action Against the Debtor
A. The Receiver Needed Authority from the Appointing Court to bring an Action
2:00 PM
Once a court appoints a receiver, "[i]t is the rule that: ‘The functions and powers
of a receiver are controlled by statute, by the order appointing him, and by orders subsequently made by the court. He has no powers beyond those so
conferred.’ Downtown Sunnyvale Residential LLC v. Wells Fargo Bank, N.A., No. H038572, 2015 WL 263727, at *9 (Cal. Ct. App. Jan. 20, 2015) (citing 42 Cal.Jur.2d, Receivers, § 73; and see authority there collected.)" (Morand v. Superior Court (1974) 38 Cal.App.3d 347, 351 (Morand ).) "Where a receiver's powers and duties are not directly prescribed by statute, they are dependent upon the court's order of appointment." (Nulaid Farmers Assn. v. LaTorre (1967) 252 Cal.App.2d 788, 791.) A receiver's powers " ‘may be expanded or contracted by subsequent court order.’ " (Resolution Trust Corp. v. Bayside Developers (9th Cir.1994) 43 F.3d 1230, 1242 (Resolution Trust Corp.), citing to Cal–American Income Property Fund VII v. Brown Development Corp. (1982) 138 Cal.App.3d 268, 273 (Cal–American ).)
The Debtor cites to Cal. C.C.P. § 568 (CCP 568) and to Morand regarding the powers of receivers for the proposition that the Receiver has no authority to bring the instant action. CCP 568 provides, in pertinent part, that
The receiver has, under the control of the Court, power to bring and defend actions in his own name, as receiver; to take and keep possession of the property, to receive rents, collect debts, to compound for and compromise the same, to make transfers, and generally to do such acts respecting the property as the Court may authorize.
The Debtor argues that because the order appointing the Receiver did not enumerate the authority to file lawsuits as a power authorized by the Court, that the Receiver is without such authority until such time as he receives authorization from the Superior Court to file this action. Although authorities are scant, the authorities cited by the Debtor and found by this Court support the conclusion that for the Receiver to institute an action, the order appointing the Receiver must at a minimum contain language generally, if not specifically, authorizing/directing the commencement of actions. See e.g.
Harting v. Cebrian, 10 Cal. App. 2d 10, 51 P.2d 195 (1935).
The Receiver, for his part, argues that he was directed to manage the receivership estate, including to "take possession, custody, and control" of various
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assets that comprise the "Receivership Estate" and to "[c]ollect all proceeds of the Receivership Estate, whether equity, income, payments, rents, revenue, sale, or otherwise." (Receiver Opp’n at 2). This language, however, is insufficient for the purpose of authorizing the Receiver to initiate legal actions. See e.g. Harting v.
Cebrian, 10 Cal. App. 2d 10, 51 P.2d 195 (1935). In support of its position, the
Receiver cites Title Ins. & Tr. Co. v. Grider, 152 Cal. 746, 94 P. 601 (1908). However, Grider dealt with two issues not present in the instant action – first, an attack on the underlying basis for the appointment of a receiver, and second, an assertion that the property at issue was not property that the Receiver was authorized to collect. Neither issue resolves the issue of whether the language of a receivership order authorizes the initiation of an action.
Based on the foregoing, the Court finds that the failure of the Receiver to allege that the receivership order provided him with the authority to initiate actions on behalf of the Receivership Estate is grounds for dismissal.
Although moot, assuming the Receiver did have authority to file the Complaint, as to the Receiver’s claim for damages the Receiver has clarified that it does not seek its own fees, expenses, and costs. Instead, it seeks recovery of receivership assets. To the extent the Receiver’s claim for damages is limited to recovery of assets of the receivership estate, such damages appear to fall squarely within the bounds of the Order Appointing Receiver. As such, the Receiver would need to amend the Complaint to clarify that its request for damages is limited to recovering assets of the receivership estate.
Revere is Not Liable to the Receiver for Fees and Costs and Thus Cannot Seek to Recover Such Fees and Costs as Damages
The Debtor argues that Revere has no basis to include fees and expenses of the Receiver. In response, Revere has cited to authorities indicating that in the event that the receivership estate is insufficient to pay the Receiver’s fees and expenses, courts have, in some cases, found third parties liable to the receivers for the deficiency. The Debtor asserts that Atl. Tr. Co. v. Chapman, 208 U.S. 360, 374, 28 S. Ct. 406, 410, 52
L. Ed. 528 (1908), is dispositive of this issue.
The Supreme Court, in Atlantic Trust, acknowledged that third parties may be
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held liable in certain circumstances but indicated that such cases were rare. The Supreme Court stated, in pertinent part:
It is true that cases are cited in which the party bringing a suit in which a receiver is appointed has been held liable for expenses incurred by the receiver in excess of the proceeds arising from the sale of the property. But in most, if not in all, of those cases, the circumstances were peculiar and were such as to make it right and equitable, in the opinion of the court, that that should be done.
Id. As the Debtor acknowledges, the Supreme Court did not hold that a third party could under no circumstances be liable for a receiver’s fees and expenses. Instead, the Debtor asserts only that the specific cases cited by Revere in which a third party was held liable are not applicable to the facts alleged in the instant case. Here, the Debtor does not address the broad language of the Commercial Security Agreement (Complaint at Ex. 3 at 42) in which Revere has pointed to provisions of Debtor’s loan documentation, which may provide Revere with a basis to recover for fees and expenses owed to the Receiver for his services. However, notwithstanding this point, the Complaint does not include allegations that the receivership estate will not have funds to fully compensate the Receiver such that Revere could claim any liability for his costs and fees. Nor does the Complaint set forth a claim based on the contractual language cited by Revere in its opposition. As such, the Court finds that the Complaint does not contain sufficient factual allegations to support a plausible claim for damages based on the Receiver’s fees and costs.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the Motion as to dismissal of the Receiver, and as to striking Revere’s claim for damages to the extent it includes fees and costs owed to the Receiver.
The Motion is DENIED as to it request for dismissal without leave to amend. There has been no showing by Debtor to justify dismissal with prejudice. The Receiver and Revere shall have 60 days from the date of entry of the order on the Motion to amend the Complaint.
2:00 PM
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Movant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
Jerry Wang Represented By
Franklin R Fraley Jr Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:14-01248 Revere Financial Corporation, a California corpora v. Roger, MD
From: 11/26/14, 1/26/15, 1/28/15, 4/15/15, 7/22/15, 9/23/15, 1/27/16, 6/29/16, 9/28/16, 11/16/16, 2/1/17, 2/16/17, 5/3/17, 6/14/17, 6/28/17, 7/31/17
Also #10 EH
Docket 1
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Douglas J Roger MD Represented By Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
Chad V Haes
D Edward Hays
Jerry Wang Represented By
Franklin R Fraley Jr
2:00 PM
Anthony J Napolitano
Revere Financial Corporation, a Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:17-01156 Daff v. Fabrigas, Jr.
3439.04, 3439.07, 3439.08]; 2) AVOIDANCE OF CONSTRUCTIVE FRAUDULENT TRANSFERS AND RECOVERY OF SAME [11 U.S.C. §§ 544, 548, 550, 551; CAL. CIV. CODE §§ 3439.04, 3439.05, 3439.07, 3439.08,
3439.09]; 3) DISALLOWANCE OF CLAIMS [11 U.S.C. §502(d)]; 4) UNJUST
ENRICHMENT [11 U.S.C. § 105]; 5) DECLARATORY RELIEF [11 U.S.C. §§
541, 544; FRBP 7001(9)]; AND 6) TURNOVER OF PROPERTY OF THE
ESTATE [11 U.S.C. § 542] Nature of Suit: (13 (Recovery of money/property - 548 fraudulent transfer)),(91 (Declaratory judgment)),(11 (Recovery of money/property - 542 turnover of property)) (Iskander, Brandon)
EH
Docket 1
- NONE LISTED -
Debtor(s):
Fernando Fabrigas Sr. Represented By
R Creig Greaves
Defendant(s):
Fernando Fabrigas, Jr. Pro Se
Joint Debtor(s):
Estela F. Fabrigas Represented By
R Creig Greaves
2:00 PM
Plaintiff(s):
Charles W. Daff Represented By Brandon J Iskander
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brandon J Iskander
11:30 AM
EH
Docket 32
- NONE LISTED -
Debtor(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein
12:30 PM
Also #2 EH
Docket 48
10/05/2017
Background:
On July 14, 2016, Tanyua Gates-Holmes ("Debtor") filed a Chapter 13 voluntary petition. On September 1, 2016, Debtor’s Chapter 13 plan was confirmed.
On July 15, 2016, Wescom Credit Union ("Creditor") filed a proof of claim for an unsecured claim in the amount of $1,122.30 ("Claim 1"). On August 30, 2016, Debtor filed an objection to Claim 1.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223
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F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
On September 6, 2017, Creditor filed a withdrawal of Claim 1. Therefore, Debtor’s claim objection is DENIED as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
12:30 PM
Tanyua A Gates-Holmes Represented By John F Brady
Movant(s):
Tanyua A Gates-Holmes Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #1 EH
Docket 49
10/05/2017
Background:
On July 14, 2016, Tanyua Gates-Holmes ("Debtor") filed a Chapter 13 voluntary petition. On September 1, 2016, Debtor’s Chapter 13 plan was confirmed.
On September 21, 2016, Palisades Collections, LLC ("Creditor") filed a proof of claim for an unsecured claim in the amount of $10,606.07 ("Claim 7"). On August 30, 2016, Debtor filed an objection to Claim 7.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223
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F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Debtor argues that the statute of limitations is four years for Creditor’s claim and that Creditor’s claim is therefore barred. Cal. Code Civ. P. § 337(2) provides for a statute of limitations of four years for:
An action to recover (1) upon a book account whether consisting of one or more entries; (2) upon an account stated based upon an account in writing, but the acknowledgement of the account stated need not be in writing; (3) a
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balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that where an account stated is based upon an
account of one item, the time shall begin to run from the date of said item, and where an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.
Cal. Code Civ. P. § 337(1) provides that the statute of limitations is also four years for claims based upon a contract.
The Court has reviewed Creditor’s proof of claim and it appears that the applicable statute of limitations is four years pursuant to Cal. Code Civ. P. § 337. It additionally appears that Debtor had not made a payment on the claim in more than eight years at the time of the petition, and, therefore, the statute of limitations has expired.
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-(1)(h).
Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
12:30 PM
Debtor(s):
Tanyua A Gates-Holmes Represented By John F Brady
Movant(s):
Tanyua A Gates-Holmes Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 9/21/17 Also #5
EH
Docket 24
TENTATIVE
The Court having reviewed the motion, finding notice and service to be proper and reviewed the opposition, the Court is inclined to DENY the motion without prejudice. Specifically, as is noted in the opposition, Debtors have not submitted evidence which clearly establishes the amount owing on the senior security interest. Debtors have submitted a payoff quote, dated July 20, 2017, which states that the total amount due is $347,890.95. Debtors have additionally submitted a letter, dated May 17, 2017, which states that the remaining deferred principal amount is $129,872.54. Debtors’ motion adds the two above amounts together, and asserts that the sum is the total amount due.
Nevertheless, the relationship between the two documents submitted by Debtors is unclear. The payoff quote submitted is dated approximately two months later than the letter, and, therefore, the letter cannot refer to the payoff quote. Because of this lack of clarity, Debtors have not established the amount owing on the senior security interest.
APPEARANCES REQUIRED.
12:30 PM
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Movant(s):
Kathy A Neilsen Represented By Julie J Villalobos
John E Neilsen Sr Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #4 EH
Docket 0
- NONE LISTED -
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jeannine Michon Norman Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
From: 9/14/17 EH
Docket 23
09/14/2017
BACKGROUND
On August 3, 2017 ("Petition Date"), Adriana Brodie ("Debtor") filed her petition for chapter 13 relief. Rod Danielson is the duly appointed chapter 13 trustee ("Trustee").
On August 8, 2017, the case was dismissed for failure by the Debtor to file initial schedules by the Court imposed deadline. Specifically, the Court had issued a notice on August 4, 2017, that the case would be dismissed if the Debtor did not provide a statement of social security number, electronic filing declaration, and master mailing matrix list of creditors within 72 hours. The Court clarified in a Notice to Filer that although the Statement of Social Security and Declaration of Electronic Filing had been filed, that they had not been signed. The Debtor did not correct the deficiencies and the case was dismissed.
The Debtor attempted to cure the deficiencies and filed an "Emergency Motion to Vacate Dismissal" on August 8, 2017 (the same date as the dismissal). On August 11, 2017, the Court denied the Debtor’s Emergency Motion because the Debtor only cured two of the deficiencies for which the case was dismissed – having filed an amended Statement of Social Security and Electronic Filing Declaration but no creditor mailing matrix.
On August 14, 2017, the Debtor filed a second Emergency Motion to Vacate Dismissal (the "Motion"). The Trustee filed comments on August 15, 2017,
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recommending disapproval and indicated that Counsel for the Debtor has failed to provide an explanation which would warrant vacating the dismissal.
TENTATIVE RULING
The Court has confirmed with the Clerk’s office that the three deficiencies which resulted in the dismissal have now been cured. However, the Debtor’s case was filed as skeletal on the Petition Date and since the dismissal of the case the balance of schedules has come due.
The Court is inclined to GRANT the Motion conditioned on the Debtor filing all remaining schedules which have come due since the case was dismissed.
APPEARANCES REQUIRED.
Debtor(s):
Adriana Brodie Represented By Aalok Sikand
Movant(s):
Adriana Brodie Represented By Aalok Sikand
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Francis Adam Waldschmitt Represented By Suzette Douglas
Trustee(s):
Robert Whitmore (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose E. Toledo Represented By Moises A Aviles
Joint Debtor(s):
Antonia Toledo Represented By Moises A Aviles
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Violeta Perola Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Catherine Lucille Laff Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Corinthia A. Williams Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sara Ann Garcia Represented By Lionel E Giron
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Luis Fernando Montoya Jr. Represented By Anthony B Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Fernando Farias Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
David Kevin Davidson Represented By Michael E Clark
Joint Debtor(s):
Lisa Marie Davidson Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Thomas Lee Abercrombie Represented By
Rabin J Pournazarian
Joint Debtor(s):
Rebecca Anne Abercrombie Represented By
Rabin J Pournazarian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Deborah Thomas Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 61
09/28/2017
BACKGROUND
On November 9, 2016, Fonda Cormier ("Debtor") filed her petition for chapter 13 relief. Rod Danielson was the duly appointed chapter 13 trustee ("Trustee"). The Debtor’s chapter 13 plan was confirmed on December 28, 2016. On June 30, 2017, the Debtor filed a notice to conversion and the Court converted the case on the same date pursuant to § 1307(a) ("Conversion Order"). At approximately 4:23 p.m. of the same day, the Debtor sought to vacate the Conversion Order.
The Court set a hearing on the Debtor’s motion to vacate the Conversion Order and issued a tentative ruling prior to the hearing indicating as follows:
As a preliminary matter, the proof of service included in Debtor’s motion is not signed, and Debtor has not served all parties in interest pursuant to Local Rule 1017.
Additionally, Debtor’s motion contains no legal standard or analysis. Relief from a judgment or order is governed by Fed. R. Civ. P. Rule 60, incorporated into bankruptcy proceedings by Fed. R. Bankr. P. Rule 9024. Debtor has not provided any argument relating to that standard.
Furthermore, the declaration of Debtor’s attorney appears to misrepresent the factual situation. First, the reasons for Debtor converting to Chapter 7 are not given. The primary argument presented
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by Debtor in support of this motion is that counsel learned, after filing a notice of conversion and having further discussions with Trinity Financial, that Trinity Financial would likely file a motion for relief from stay if the case was converted to Chapter 7. Trinity Financial had, however, in fact filed a motion for relief from stay on May 9, 2017, and an order approving the stipulation of the parties was entered on June 27, 2017. Section 10 of that order states: "This order is binding and effective despite any conversion of this bankruptcy case to a case under any other chapter of the Bankruptcy Code." The parties chose not to include language that would provide for relief from stay upon conversion of the case. Therefore, it is unclear how the conversion of the case could have any effect on the automatic stay as it relates to Trinity Financial.
As an aside, the Court notes that Debtor is ineligible for a Chapter 7 discharge under § 727(a)(8) by virtue of a Chapter 7 discharge on September 25, 2009.
Tentative Ruling, August 31, 2017.
On June 6, 2017, the Debtor filed a new Motion to Vacate Order or to Reconvert to Original Chapter 13 ("Motion"). The Motion was filed by the Debtor’s new counsel. The Motion indicates that the conversion was a mistake of prior counsel and that it was one which could have severe consequences for the Debtor.
DISCUSSION
The Court is cognizant, here, that the Debtor’s chapter 13 plan was already confirmed and the mistake was clearly negligent on the part of her prior counsel. However, the Court further notes that a motion to dismiss filed by the Trustee was pending at the time of conversion for a delinquency of $1,147.50.
TENTATIVE RULING
The Court is inclined to GRANT the request to vacate the conversion order conditioned upon the Debtor’s ability to bring her plan current.
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Separately, based on the Debtor’s assertion that she paid her prior counsel $1,000 for the motion to convert her case to a chapter 7, the Court is inclined to issue on OSC re: disgorgement as to Phillip Myer.
APPEARANCES REQUIRED.
Debtor(s):
Fonda Cormier Represented By Manfred Schroer
Movant(s):
Fonda Cormier Represented By Manfred Schroer
Trustee(s):
Robert Whitmore (TR) Pro Se
12:31 PM
EH
Docket 134
- NONE LISTED -
Debtor(s):
Francisco Javier Medina Represented By Tamar Terzian
Joint Debtor(s):
Maria Guadalupe Medina Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 50
- NONE LISTED -
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 109
- NONE LISTED -
Debtor(s):
Martin Caballero Represented By Luis G Torres
Joint Debtor(s):
Clementina Caballero Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 36
- NONE LISTED -
Debtor(s):
Jackqueline D Mitchell Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 71
- NONE LISTED -
Debtor(s):
Lucianna P Wais Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 40
- NONE LISTED -
Debtor(s):
Carlos Gutierrez Represented By Patricia A Mireles
Joint Debtor(s):
Josefina Gutierrez Represented By Patricia A Mireles
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 52
- NONE LISTED -
Debtor(s):
Marc Meisenheimer Represented By Lionel E Giron Kevin Tang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 40
- NONE LISTED -
Debtor(s):
Charles Mickey Alligood Represented By Neil R Hedtke
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 26
- NONE LISTED -
Debtor(s):
Gabriel Cruz Represented By
Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 50
- NONE LISTED -
Debtor(s):
Diana Cescolini Represented By John F Brady
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 32
- NONE LISTED -
Debtor(s):
Brenda Joelle Rue Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 25
- NONE LISTED -
Debtor(s):
Gail Katherine Stump Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
9:30 AM
Adv#: 6:14-01116 Verbree v. Sanderson
EH
Docket 1
Debtor(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Defendant(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Plaintiff(s):
Margaret Verbree Represented By Stephen A Madoni
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
Adv#: 6:14-01116 Verbree v. Sanderson
From: 10/16/17 EH
Docket 1
Debtor(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Defendant(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Plaintiff(s):
Margaret Verbree Represented By Stephen A Madoni
Trustee(s):
Arturo Cisneros (TR) Pro Se
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EH
Docket 80
NONE LISTED -
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
Movant(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
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HOLDING DATE
From: 7/25/17, 8/22/17 Also #1 & #3
EH
Docket 88
BACKGROUND
Rio Rancho Super Mall, LLC ("Debtor") is a California Limited Liability Corporation. Debtor owns and operates a commercial property, Rio Rancho Super Mall, located at 25211 Sunnymead Blvd., Moreno Valley, CA 92553 ("Property"). The Property is improved with a commercial building (approx. 100,750 sq. ft.) with retail space for 87 retail tenants. On February 13, 2017, Debtor filed a voluntary Chapter 11 Petition. This is the Debtor’s second chapter 11 case. The Debtor’s prior case was dismissed on December 27, 2016, based on the Debtor’s material default in its compliance with the terms of the previously confirmed chapter 11 plan.
Related Documents:
On August 2, 2017, Debtor filed its First Amended Disclosure Statement (Redlined) (Docket #88) and its First Amended Chapter 11 Plan of Reorganization (Redlined) (Docket #89).
On August 8, 2017, creditor Butterfield Valley Parnters filed its Opposition/Objection to the First Amended Disclosure Statement and First Amended Plan (Docket #93).
On August 9, 2017, creditor Pacific City Bank filed its Limited Joinder to the Objection of Butterfield
Ownership and Management of Debtor:
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Debtor has two owners
Eric Sang Yul Kim ("Mr. Kim") is the managing member and owns 87.5%
Kwan Sung Kim ("Mrs. Kim"), Debtor’s wife, owns the remaining 12.5%
The Debtor is managed by Dennis Park and Kwang Sung Kim. Mrs. Hyang Hwa Kim is the sister of Eric Sang Yul Kim and is providing uncompensated services to the Debtor. The Debtor proposes to begin paying Mrs. Hyang Kim a regular salary of $3,000 per month "if the market is stable".
DSD:
Debtor’s primary secured creditor is DSD Note Investors, Inc. ("DSD") which
the Debtor asserts fully encumbers the Property. On January 31, 2017, DSD filed a complaint for breach of contract and foreclosure and also moved the Superior Court for the appointment of a receiver.
Motivation for filing a Chapter 11:
Debtor contends that the instant filing was precipitated by the dismissal of its prior case due, in part, to poor market conditions which did not sufficiently improve, and due also to problems with the Debtor’s confirmed plan which failed to account for certain liens; and also due to the aggressive collection efforts of DSD.
DISCUSSION
Before a disclosure statement may be approved after notice and a hearing, the court must find that the proposed disclosure statement contains "adequate information" to solicit acceptance or rejection of a proposed plan of reorganization. 11 U.S.C. § 1125(b).
"Adequate information" means information of a kind, and in sufficient detail, so far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records, that would enable a hypothetical reasonable investor typical of the holders of claims against the estate to make a decision on the proposed plan of reorganization. 11 U.S.C. § 1125(a).
There is no set list of required elements to provide adequate information per
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se. A case may arise where previously enumerated factors are not sufficient to provide adequate information. Conversely, a case may arise where previously enumerated factors are not required to provide adequate information. In re Metrocraft Pub. Services, Inc., 39 B.R. 567 (Bankr. N.D.Ga. 1984). "Adequate information" is a flexible concept that permits the degree of disclosure to be tailored to the particular situation, but there is an irreducible minimum, particularly as to how the plan will be implemented. In re Michelson, 141 B.R. 715, 718-19 (Bankr. E.D.Cal. 1992).
Courts have developed lists of relevant factors for the determination of adequate disclosure. See, e.g., In re A.C. Williams Co., 25 B.R. 173, 176 (Bankr.
N.D. Ohio 1982), In re Ferretti, 128 B.R. 16, 18–19 (Bankr. D.N.H. 1991), In re Malek, 10 C.B.C.2d 189, 35 B.R. 443, 443–44 (Bankr. E.D. Mich. 1983), In re Metrocraft, 39 B.R. 567, 568 (Bankr. N.D.Ga. 1984), In re Scioto Valley Mortgage Co., 88 B.R. 168, 170–71 (Bankr. S.D. Ohio 1988), In re U.S. Brass Corp., 194 B.R. 420, 424–25 (Bankr. E.D. Tex. 1996).
This Court should determine what factors are relevant and required in light of the facts and circumstances surrounding each particular case. In re East Redley Corp., 16 B.R. 429 (Bankr. E.D.Pa. 1982).
PLAN SUMMARY
The Debtor proposes an Effective Date of November 1, 2017
Funding
Debtor intends to fund the plan with regular business income estimated by the Debtor at approximately $110,920 per month. As of August 1, 2017, Debtor anticipates generating monthly gross rental income of $123,197 from an increase in rent.
Debtor asserts it will have $45,000 on the Effective Date from rental income and capital contributions
Law Offices of Langley & Chang: $25,000
Clerk’s Office: $0
US Trustee Fees: $975 Total: $25,975
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Priority Tax Claims: (Unimpaired) Paid in full on Effective Date
CA Franchise Tax Board: $800
· IRS $2,711.88
Total: $3,511.88
Principal balance/allowed claim: $12,000,000
Secured claim allowed per stipulation including agreement by DSD to extend loan maturity date (notwithstanding Debtor assertion that Property value is
$7,000,000).
Terms: $55,000 per month at 5.75% interest for 48 months
o Additional quarterly payments of $7,500 per quarter for 48 months, thereafter loan is due in full.
Class 2: Riverside County Tax (Impaired)
Principal balance/allowed claim: $295,813
Terms: $5,330.11 per month at 18% interest for 120 months
Class 3: General Unsecured Creditors (Impaired)
Debtor proposes to pay 0% (i.e. no payments to general unsecured creditors).
Class 4: Equity Interest Holders
Mr. Kim and Mrs. Kim will retain their interests
New Value
At confirmation, the equity holders will make a one-time capital contribution of
$35,000
Liquidation Value
Debtor estimates its liquidation value is $7,028,400 and thus after payment of the secured claim of DSD in the amount of $12,000,000 and even assuming funds are available to pay administrative claims and priority tax claims, no funds would remain for other creditors.
Feasibility
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EFFECTIVE DATE
Debtor will fund the plan through regular business income and the cash contribution. Debtor states it will have $45,000 on effective date to pay $29,486.88 due on Effective Date.
Cash on hand: $10,000 (DIP Account)
Capital Contributions: $35,000 Total: $45,000
Balance remaining after paying initial amount of Effective Date: $15,513.12
FEASIBILITY THROUGHOUT LIFE OF PLAN
The Debtor asserts it will have $123,197 in gross monthly income from rents. It estimates expenses plus plan payments will cost Debtor $123,152.11 per month. At this level, the Debtor is expected to have an approximate shortfall of $44.89 per month.
OBJECTIONS
All objections were timely filed. The Debtor has filed no replies.
Butterfield disputes that DSD can assert any claim greater than $10,422,000 per the limitations contained in the DSD Deed of Trust;
Butterfield seeks additional language to make clear that the Plan will not place limits on the "ongoing effectiveness of the CAM Agreement"
Objects to being classified as a "unsecured" claimant where the motion to value has not yet been resolved and objects because the Plan makes no reference to the claim of Butterfield asserted in its proof of claim -
$741,664.74 (the Redline DS, Exhibit F fails to indicate the amounts of filed claims although several have been filed since the drafting of the original DS)
Butterfield also appears to object to any DS which does not provide for the contingency that at least some junior lienholders, including itself, may be fully or partially secured depending on the outcome of the motion to value.
1. PCB joins Butterfield’s objection that the maximum value that DSD can assert as a first priority lienholder is $10,422,000
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Tentative Ruling:
08/22/2017
Debtor’s Disclosure Statement and Plan are defective for the following reasons:
The Debtor refers to Mrs. Kwang Sung Kim as "Kwan Sun Kim" in the introductory paragraph to the DS. One of these spellings contains typos;
Based on the terms indicated by the Debtor for payment of DSD’s claim, it appears that the Debtor anticipates making a balloon payment to DSD at the end of the plan. The Plan should clearly indicate the Debtor’s estimate of how large this payment will be and the source of funding to pay the balloon payment;
On page 20, under the section entitled"C. Feasibility", the DS did not indicate that priority tax claims will also be paid on the Effective Date, which would alter the Debtor’s calculation of the balance of cash after making payment due on the Effective Date.
The current projections of the plan indicate there will be a monthly shortfall of approximately $44.89 per month (not including the 18% interest due to Riverside County on a monthly basis which is not accounted for in the Debtor’s 5-Year Projection). This shortfall is particularly problematic where the Debtor is expected to make an additional quarterly payment to DSD of
$7,500 until the end of the plan, plus a balloon payment of as yet unspecified amount at the end of the plan.
Based on the foregoing, the Court’s tentative ruling is to CONTINUE the hearing on approval of the First Amended DS to the date of the expected evidentiary hearing on the related Motion to Value for: (1) Debtor to address the issues raised by the Court;
for a determination of how the outcome of the Motion to Value hearing will impact the need for further revisions to the DS.
APPEARANCES REQUIRED.
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
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From: 3/28/17, 5/30/17, 7/25/17, 8/22/17 Also #1 & #2
EH
Docket 6
- NONE LISTED -
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
10:00 AM
Adv#: 6:14-01116 Verbree v. Sanderson
From: 10/17/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Defendant(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Plaintiff(s):
Margaret Verbree Represented By Stephen A Madoni
Trustee(s):
Arturo Cisneros (TR) Pro Se
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(Holding date)
From: 8/31/17, 10/2/17 Also #6
EH
Docket 110
BACKGROUND
On January 28, 2011, Brad & Deborah Stoddard ("Debtors") filed a Chapter 13 voluntary petition. On May 24, 2011, Debtors’ Chapter 13 plan was confirmed. The plan contained the following provision, section V.F.: "The debt of american Education Services will be discharged; the school has been stripped of accreditation and is on probation." On December 5, 2016, Debtors received a discharge, and, on January 13, 2017, the case was closed.
On May 11, 2017, Debtors filed a motion for an order to show cause why creditor American Educational Services ("AES") should not be held in contempt court, and for damages and attorney’s fees, for intentionally violating the discharge injunction.
Because of inadequate service, the motion was originally denied without prejudice, and Debtors refiled the motion on June 1, 2017. AES filed its opposition on June 8, 2017. At a hearing on the matter on July 27, 2017, the Court continued the matter to
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October 2, 2017.
On July 31, 2017, the Court issued its Order to Show Cause why Matthew Resnik ("Resnik"), Brad Stoddard, and Deborah Stoddard should not be sanctioned for including a prohibited provision in a Chapter 13 plan (the "OSC"). Debtors filed their opposition on August 14, 2017. Resnik filed his opposition on August 17, 2017. AES filed its reply on August 24, 2017. Resnick filed supplemental responses on September 21 and 22, 2017.
DISCUSSION
Introduction
The OSC is issued in light of, and accordance with, the Supreme Court’s decision in United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010). In Espinosa, the bankruptcy court had confirmed a Chapter 13 plan which purported to discharge student loan debt without complying with the applicable procedural requirements.
After intercepting debtor’s income tax refund to use towards payment of student loans, the creditor argued that the bankruptcy court’s order confirming the debtor’s Chapter 13 plan should be declared void. The Supreme Court held that, absent a jurisdictional or due process violation (which was not present) the bankruptcy court’s legal error in confirming the Chapter 13 plan with a provision that impermissibly discharged student loan debt, did not render the order void. At the conclusion of its opinion, the Supreme Court opined:
We acknowledge the potential for bad-faith litigation tactics. But expanding the availability of relief under Rule 60(b)(4) is not an appropriate prophylaxis. As we stated in Taylor v. Freeland & Kronz, 503 U.S. 638 (1992), "debtors and their attorneys face penalties under various provisions for engaging in improper conduct in bankruptcy proceedings." Id. at 644; see also Fed. R. Bankr. P. Rule 9011. The specter of such penalties should deter bad-faith attempts to discharge student loan debt without the undue hardship finding
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Congress required.
Espinosa, 559 U.S. at 278. Here, the Court is tasked with interpreting and implementing the guidance provided by the Supreme Court in Espinosa.
Debtors and Resnick have filed separate responses to the Court’s OSC. Debtors have raised five arguments in their opposition: (1) that the Court already found that the plan was filed in good faith; (2) that the plan must be given res judicata effect; (3) that the Court is exceeding its discretionary sanctioning authority; (4) that the OSC is an illegal ex post facto law; and (5) that Fed. R. Bankr. P. Rule 9011 is inapplicable.
Resnick offers the following categories of arguments in his opposition: (1) use of the Court’s inherent sanctioning authority is inappropriate here; (2) Rule 9011 sanctions require a contempt finding; (3) Section 105 is inapplicable; and (4) the plan provision at issue is not prohibited. The Court will analyze the respondents’ arguments separately.
Debtors’ Opposition
The Court’s Good Faith Finding
11 U.S.C. § 1325(a)(3) states:
Except as provided in subsection (b), the court shall confirm a plan if –
the plan has been proposed in good faith and not by any means forbidden by law
Debtors argue that: "[i]t necessarily follows [from § 1325(a)(3)] that the Court has
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already made an express finding that the Plan was filed in good faith." This result does not necessarily follow from the language of the statute. The plain language of § 1325
(a) operates to eliminate the discretion of the court if the court finds that the debtor has satisfied the nine subsections of § 1325(a); the provision does not state the consequences of a finding that some, but not all, of the § 1325(a) subsections have been satisfied. As is stated by the leading bankruptcy treatise:
The standards set forth in section 1325(a), however, are not requirements that must be met in every case before a plan can be confirmed. Unlike section 1322 (a), section 1325(a) does not state that "the plan shall" comply with its listed criteria. Nor does it state, as does section 1129(a), that the court shall confirm the plan only if certain requirements are met. Instead it states only that if its criteria are met the court must confirm the plan. Therefore, the court has discretion to confirm a plan that does not comply with all of the standards of section 1325(a), particularly if no party objects.
8 Collier on Bankruptcy ¶ 1325.01 (16th ed. 2016) (footnotes omitted).
Despite the plain language of the statute, the Ninth Circuit Court of Appeals, without any independent analysis, and relying on an out of circuit bankruptcy court decision, has determined that the requirements of § 1325(a) are mandatory for Chapter 13 plan confirmation. See In Chinichian, 784 F.2d 1440, 1443-44 (9th Cir. 1986) ("For a court to confirm a plan, each of the requirements of section 1325 must be present and the debtor has the burden of proving that each element has been met.") (citing In re Elkind, 11 B.R. 473, 476 (Bankr. D. Colo. 1981)). While it remains unclear from where the mandatory characterization of § 1325(a) arose, a variety of courts have, in passing, assumed that the § 1325(a) standards are mandatory for plan confirmation.
See, e.g., Assocs. Comm. Corp. v. Rash, 520 U.S. 953, 956 (1997) ("To qualify for confirmation under Chapter 13, the Rashes’ plan had to satisfy the requirements set forth in § 1325(a) of the Code."); Shaw v. Aurgroup Fin. Credit Union, 552 F.3d 447, 459 (6th Cir. 2009) ("Numerous district and bankruptcy courts outside the Fifth, Ninth, Tent, and Eleventh Circuits, including courts within this circuit, have also held, suggested, or assumed that the provision in § 1325(a) are mandatory.") (collecting cases). But see In re Szostek, 886 F.2d 1405, 1411 (3rd Cir. 1989) ("On the other hand, if the conditions of § 1325 are not met, although the requirements of § 1322 are fulfilled, the court has the discretion to confirm the plan. If Congress had intended for
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§ 1325(a) to be mandatory, it could have included that requirement with the requirements already listed in § 1322); see also Matter of Escobedo, 28 F.3d 34, 34 (7th Cir. 1994) ("We note, however, as did the court in Szostek, that while the provisions of § 1325(a)(5) may be discretionary[,] the requirements of § 1322(a)(2) are mandatory.). Indeed, even Espinosa appears to implicitly assume that the § 1325
(a) requirements are mandatory. See 559 U.S. 260, 277 ("That is because § 1325(a) instructs a bankruptcy court to confirm a plan only if the court finds, inter alia, that the plan complies with the ‘applicable provisions’ of the Code.") (emphasis added). Therefore, it would appear that binding case law suggests that the § 1325(a) requirements, including good faith, are mandatory requirements for confirmation.
Res Judicata
While the Court accepts Debtors’ argument that, by confirming their Chapter 13 plan, the Court implicitly found that the plan was filed in good faith, the Court rejects Debtors’ argument that that finding is res judicata with regard to the Court. 11 U.S.C.
§ 1327(a) states: "The provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan." The Court is not a creditor and Debtors have advanced no argument as to how § 1327
(a) would prevent the Court from revisiting its finding of good faith. In fact, the Ninth Circuit Court of Appeals opinion that concluded the § 1325(a) requirements were mandatory stated the following: "Because section 1325(a)(3) of Title 11 requires the Chinichians to propose their plan in good faith, the bankruptcy court has jurisdiction to revoke a plan if the plan was not filed in good faith." In re Chinichian, 784 F.2d 1440, 1442 (9th Cir. 1986). The Ninth Circuit’s further comments indicate that it believed such powers were expansive:
The Chinichians argue, however, that because section 1330 is a specific statute it should govern the more general section 105. The Mancari rationale that a specific statute cannot be nullified by a more general one is only applicable where a conflict exists.
Section 1330 provides a method of revoking a confirmation order "on request
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of a party in interest." While it does not specifically authorize such a revocation by the court sua sponte, it does not prohibit such action. Section
105 constitutes authority for the court to issue any order necessary to carry out the provisions of the Code. That reservoir of power in no manner conflicts with the authority to act upon the request of an interested party, but constitutes a supplemental method of revocation in the event of fraud. It would be absurd to hold that the bankruptcy court is powerless to correct a fraud unless first requested by an interested party, and that is not what section 1330 provides.
Section 105 sets out the power of the bankruptcy court to fashion orders as necessary pursuant to the purposes of the Bankruptcy Code.
Further, a bankruptcy court is a court of equity. As a court of equity, it may look through form to the substance of a transaction and devise new remedies where those at law are inadequate. Further, it can modify or vacate its order so long as no intervening right has become vested in reliance thereon. Thus, the bankruptcy court had equitable power to revoke its order partially confirming the Chinichians’ plan once it recognized the Chinichians did not file their plan in good faith as required by section 1325(a)(3).
Id. at 1442-43 (citations omitted).
Debtors’ argument that § 1327 operates to prevent the Court from modifying its implicit good faith finding when confirming the plan lacks merit. The statute states that the terms of the provisions of a confirmed plan are binding on the debtor and creditors. The Court is not a creditor or a debtor nor is the Court’s good faith finding a provision of a confirmed plan. Nor does res judicata prevent a court from revoking or amending its own order. Such a principle would eliminate the ability to revoke or modify a judgment altogether, rendering obsolete Fed. R. Civ. P. Rules 59 & 60, in addition to many others legal provisions. Debtors’ argument that the Court is bound by its own previous finding due to res judiciata is not compelling.
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The Court Lacks Authority to Issue Sanctions
Debtors’ argument that the Court lacks authority to issue sanctions can be summarized in the following: (1) the Court is precluded from finding that the plan was proposed in bad faith due to res judicata; and (2) the Court must find that the plan was proposed in bad faith for sanctions to be warranted. Because the Court rejects (1), as outlined above, Debtors’ argument must fail.
The OSC is an "Illegal Ex Post Facto Law"
In their fourth argument, Debtors argue that this OSC is an ex post facto law. As noted by Debtors, Art. 1 §§ 9 & 10 of the Constitution prohibit ex post facto laws. Article 1 of the Constitution deals with the legislative branch – the branch of the government that makes laws. The Judicial Branch does not make laws. Debtors’ argument that a court order is an ex post facto law is therefore, necessarily, invalid.
Rule 9011 is Inapplicable
Fed. R. Bankr. P. Rule 9011(b)(2) states:
By presenting to the court (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, --
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the
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establishment of new law
Fed. R. Bankr. P. Rule 9011(c)(1)(B) states: "[O]n its own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto."
Debtors’ nine subsection argument why Fed. R. Bankr. P. Rule 9011 is inapplicable is rather chaotic and disorganized. Regardless, the Court acknowledges that, as to Debtors, Rule 9011 sanctions are inapplicable due to the operation of Rule 9011(c)(2) (A). Therefore, the Court agrees that Rule 9011 cannot operate as the source of sanctions against Debtors.
III. Resnick’s Opposition
Inherent Sanctioning Authority
The Supreme Court has stated: "it is firmly established that the power to punish for contempts is inherent in all courts." Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991) (quoting Ex parte Robinson, 19 Wall. 505, 510 (1874)); see also Fink v. Gomez, 239 F.3d 989, 992 (9th Cir. 2001) ("[T]he district court has the inherent authority to impose sanctions for bad faith, which includes a broad range of willful improper conduct."). The Ninth Circuit has stated: "Itel teaches that sanctions are justified when a party acts for an improper purpose – even if the act consists of making a truthful statement or a non-frivolous argument or objection. Fink, 239 F.3d at 922; see also In re Dyer, 322 F.3d 1178, 1196 (9th Cir. 2003) (discussing bad faith and willful misconduct).
Nevertheless, as Resnick states: "when there is bad-faith conduct in the course of litigation that could be adequately sanctioned under the Rules, the court ordinarily
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should rely on the Rules rather than the inherent power." Chambers, 501 U.S. at 50. Because the Court believes that the existing framework provides an adequate basis for sanctions in this type of situation, the Court need not rely on its inherent sanctioning authority.
Rule 9011
When imposing sanctions, sua sponte, under Fed. R. Bankr. P. Rule 9011, "sanctions ‘will ordinarily be imposed only in situations that are akin to a contempt of court.’" United Nat’l Ins. Co. v. R&D Latex Corp., 242 F.3d 1102, 1116 (9th Cir. 2001) (citing Barber v. Miller, 146 F.3d 707, 711 (9th Cir. 1998); see also Fed. R. Civ. P. Rule 11, Advisory Committee Notes ("Since show cause orders will ordinarily be issued only in situations that are akin to a contempt of court, the rule does not provide a ‘safe harbor’ to a litigant for withdrawing a claim, defense, etc., after a show cause has been issued on the court’s own initiative."). "[P]rior to imposing court-initiated sanctions, the district court is required to determine whether counsel’s conduct is ‘akin to contempt.’" Gonzalez v. Texaco Inc., 344 Fed. Appx. 304, 308 (9th Cir. 2009) (quoting R&D Latex Corp., 242 F.3d 1102, 1118)).
In this situation, the Court defers to Bankruptcy Judge TeSelle:
At the hearing on the motions to dismiss conducted by the Court in these cases on May 2, 2000, it was clear to the Court that debtors’ counsel included these plan provisions in the hope that they would trap an unwary student loan creditor. If a plan containing a student loan discharge provision is confirmed, debtors and their counsel argue that the student loan obligation is discharged under the theory of res judicata, improperly relying on a skewed interpretation of the opinion of the Tenth Circuit Court of Appeals in In re Andersen, 179 F.3d 1253 (10th Cir. 1999) to support their position. If an objection to confirmation is raised by either the Trustee or the student loan creditor, the offending language is simply removed from the plan, and debtors are no worse off for their attempt. The Court will not permit this type of gamesmanship on the part of debtors and their counsel to continue. Conduct such as this has no
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place in the practice of bankruptcy law, and will not be tolerated by this Court.
The citation of the opinion of the Tenth Circuit in Andersen, supra, as authority for the practice of intentionally inserting language in a chapter 13 plan that violates the Bankruptcy Code and Rules, and as authorizing counsel to stand by silently and thereby induce the Court to confirm a plan that contains a provision that counsel knows violates the Bankruptcy Code and Rules, is at once offensive and specious. Counsel appearing before this Court are officers of the Court and are ethically obligated to inform the Court if they are aware of the existence of a plan provision that renders the plan non- confirmable.
Rather than recognizing their obligations to the Court and to opposing counsel, counsel for debtors in these cases go so far as to suggest that they are compelled by Andersen to recommend that their clients include these unlawful plan provisions, implying that their failure to do so might be an act of professional negligence. The Court does not believe that a fair reading of the opinion of the Tenth Circuit in Andersen can reasonably lead one to conclude that the Tenth Circuit intended to encourage the practice of intentionally inserting unlawful plan provisions in the hope that confirmation of the plan will occur and the time for appeal will pass before such provisions are noticed so that debtors and their counsel can then claim res judicata. Such a skewed reading of Andersen fails to account for the ethical obligations owed by members of the bar to the Court and to each other.
This is particularly true given the volume of chapter 13 filings in this district, and the fact that the Court does not have the time to independently review every chapter 13 plan and confirmation order to determine whether an attempt to unlawfully discharge a student loan obligation is being made. Because the Court has apparently been unable to rely on the ethical conduct of some of the counsel representing chapter 13 debtors appearing before it, the Court, up to his point in time, has been forced to rely on a party in interest other than the debtor to point out those instances in which such student loan discharges have been attempted through plan provisions. Where the Court has become aware of such attempts, either through objections by the student loan creditor or through the inclusion of such a provision in the order confirming the chapter 13 plan,
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the Court has refused to confirm the plan containing such language, and has
stricken language from confirmation orders attempting to effect a discharge of student loan indebtedness in this manner.
. . .
In light of the existing case law concerning the impropriety of the inclusion of such student loan discharge provisions in chapter 13 plans, and the unambiguous language of the Bankruptcy Code and Rules, the Court believes that the inclusion of such a provision in a chapter 13 plan and/or order confirming a chapter 13 plan is both unethical and sanctionable conduct pursuant to Bankruptcy Rule 9011. Bankruptcy Rule 9011(b) concerns representations made to the Court. It states that by presenting a paper to the Court, an attorney or unrepresented party certifies to the best of his or her knowledge, information and belief, formed after a reasonable inquiry under the circumstances, that the legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. See Fed. R. Bankr. P. Rule 9011 (b)(2).
. . .
The Court refuses to allow counsel for debtors to turn the inclusion of a student loan discharge provision in a chapter 13 plan into a "can’t lose" proposition. The Court therefore concludes that Andersen provides no protection from the imposition of sanctions under Rule 9011(b) in cases in which a student loan discharge provision is included in a confirmed chapter 13 plan.
In re Hensley, 249 B.R. 318, 320-323 (Bankr. W.D. Okla. 2000).
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Section 105
11 U.S.C. § 105(a) states:
The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary to enforce or implement court orders or rules, or to prevent an abuse of process.
Resnick offers a single argument in support of his position that § 105(a) is inapplicable: that the provision only applies to violations of a specific court order. Resnick cites In re Dyer in support of this statement. 322 F.3d 1178, 1196 (9th Cir. 2003) ("Civil contempt authority allows a court to remedy a violation of a specific order (including ‘automatic’ orders, such as the automatic stay or discharge injunction).").
Dyer does not explicitly state that § 105(a) is strictly limited to remedying violations of specific court orders, nor does it cite any authority from which it could be inferred that the Dyer court had such an opinion. Indeed § 105(a) explicitly mentions, in addition to court orders, rules and "abuse of process"; the latter might be invoked in the absence of a specific court order.
The Supreme Court, on two occasions after Dyer, has written an opinion which
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indicates that § 105 is not strictly limited to correcting violations of specific court orders. First, in Marrama v. Citizens Bank of Mass., the Supreme Court wrote:
On the contrary, the broad authority granted to bankruptcy judges to take any action that is necessary or appropriate to prevent an abuse of process described in § 105(a) of the Code, is surely adequate to authorize an immediate denial of a motion to convert filed under § 706 in lieu of a conversion order that merely postpones the allowance of equivalent relief and may provide a debtor with an opportunity to take action prejudicial to creditors.
549 U.S. 365, 375 (2007) (footnote omitted). The "abuse of process" referenced in Marrama was not a violation of a specific court order, but, rather, "an unmeritorious attempt to qualify as a debtor under Chapter 13." Id.
Second, in Law v. Siegel, the Supreme Court stated: "Section 105(a) confers authority to ‘carry out’ the provisions of the Code." This statement is natural, since the first sentence of § 105(a) states: "[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title."
Here, the Court concludes that a specific and definite court order has not been violated. Nevertheless, the reconciliation of Dyer and Marrama helps illustrate the proper approach forward. The Ninth Circuit Court of Appeal’s instructions that sanctions under § 105(a) are appropriate for violation of a specific and definite court order is derived from the non-bankruptcy standard for civil contempt. See F.T.C. v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999) (quoting Stone v. City & Cnty. of S.F., 968 F.2d 850, 856 n.9 (9th Cir. 1992)) ("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."). Nevertheless, as illustrated by Marrama, the Court’s authority under § 105(a) is not strictly limited to issuing sanctions for civil contempt. While a civil contempt finding under § 105(a) may not be appropriate in these circumstances, it does not follow that the Court lacks the ability to adequately and equitably resolve this situation.
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TENTATIVE RULING
The Court is inclined to CONTINUE the hearing for approximately thirty days to allow Debtors to file a supplemental brief addressing why they should not be sanctioned pursuant to the Court’s inherent sanctioning authority. No further briefing from Resnick is requested.
APPEARANCES REQUIRED.
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
From: 7/27/17, 10/2/17 Also #5
EH
Docket 96
BACKGROUND
On January 28, 2011, Brad & Deborah Stoddard ("Debtors") filed a Chapter 13 voluntary petition and plan. Debtors’ plan contained a provision, in section V.F, that stated: "The debt of american Education Services will be discharged; the school has been stripped of accreditation and is on probation." The plan was served on American Education Services at P.O. Box 2461, Harrisburg, PA 17105-2461.
On March 14, 2011, "Brazos/US Bank Natnl" filed a proof of claim ("Claim 5") for an unsecured claim in the amount of $35,080.90 on the basis of a student loan. The proof of claim indicating that notices should be sent to "AES/PHEAA, PO Box 8181, Harrisburg, PA 17105." On March 17, 2011, the Court summarily confirmed Debtors’ plan on the basis of the trustee’s recommendation. On March 30, 2011, AES/PHEAA filed a transfer of claim agreement, stating that Claim 5 was being transferred to AEA/PHEAA, and that notices should be sent to "AES/PHEAA, PO Box 8147,
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Harrisburg, PA 17105." On May 24, 2011, the Court entered an order confirming Debtors’ plan.
On December 5, 2016, Debtors received a discharge. On June 1, 2017, Debtors filed a motion for an order to show cause why American Educational Services ("AES") should not be held in contempt for violating the discharge injunction. On June 8, 2017, AES filed its opposition. Debtors allege that the AES violated the discharge injunction through various attempts to collect on Claim 5 after Debtors received a discharge. AES asserts that they did not violate the discharge injunction because: (1) AES was not a creditor at the time Debtor filed their plan; (2) the provision at issue in Debtors’ plan was unclear; and (3) Debtors’ failure to utilize the appropriate procedure precludes the relief sought.
After a hearing on July 27, 2017, the Court issued an order to show cause why Debtors and their former counsel, Matthew Resnik ("Resnik"), should not be sanctioned for including a prohibited provision in a Chapter 13 plan (the "OSC"). On August 14, 2017, Debtors filed their opposition. On August 17, 2017, Resnik filed his opposition. On August 24, 2017, AES filed a reply. After a hearing on August 31, 2017, the Court continued the matter to October 2, 2017. On September 21 & 22, 2017, Resnik supplemented his response.
DISCUSSION
A person who knowingly violates the discharge injunction can be held in contempt under § 105(a) of the Bankruptcy Code. See In re Bennett, 298 F.3d 1059, 1069 (9th Cir. 2002). The moving party has the burden of showing by clear and convincing evidence that the contemnors knowingly and willfully violated a specific and definite order of the court. Id. In addition, the moving party must prove that the creditor: (1) knew the discharge injunction was applicable; and (2) intended the actions which violated the injunction in order to justify sanctions. Id.
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Here, the critical issue is whether Debtors’ plan effectively resulted in a discharge of the debt upon which AES subsequently attempted to collect. There are three distinct issues that warrant attention in connection with the above issue: (1) whether Debtors’ plan was sufficiently clear regarding the debt to be discharged; (2) whether holding that Claim 5 was discharged would violate principles of due process; and (3) whether, and to what extent, it would be appropriate for the Court to exercise its equitable remedies.
The Plan Provision
The plan provision at issue states: "The debt of american Education Services will be discharged; the school has been stripped of accreditation and is on probation." It is crucial that a miscellaneous provision included within a Chapter 13 plan both identify the creditor and claim to be affected by the plan, and explain the proposed treatment of the debtor’s claim. Here, it is not clear that the above provision was adequate in either respect.
First, at the time of the petition date, at the time of the filing of the plan containing the above provision, and at the time of the confirmation hearing, AES was not the holder of Claim 5, but was merely the servicer of Claim 5. While AES subsequently acquired the claim, after the confirmation hearing but before the confirmation order was entered, that subsequent acquisition does not change the fact that AES was not a creditor of Debtors at the time of confirmation, or at the time that service of the plan was made. Although AES did acquire a claim against Debtor between the confirmation hearing and the entry of the confirmation order, such acquisition occurred too late for AES to have an opportunity to timely object to the subject plan provision.
Nor does the fact that Claim 5 identified AES as the party to be noticed affect who was the actual creditor of Debtors. While that identification affects the propriety of the notice given, it does not affect the characterization of AES as a loan servicer, rather
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than a creditor. A loan servicer is not a proper defendant is a non-dischargeability adversary proceeding, see In re Kleckner, 560 B.R. 172, 177 (Bankr. E.D. Pa. 2016), and, likewise, it is not the proper party in a "discharge by declaration."
Furthermore, the contractual interpretation canon that ambiguous language is to be construed against the drafter is appropriate in this circumstance. See generally Maryland Cas. Co. v. Knight, 96 F.3d 1284, 1291 (9th Cir. 1996) (identifying canon). The actual holder of the claim, "Brazos/US Bank Natnl," had no reason to object to the proposed plan, because they were not identified in the plan. Even if "Brazos/US Bank Natnl" were aware that AES was the loan servicer, AES services many loans, and it is entirely possible, indeed probably common, that AES services multiple loans for many individuals. See, e.g., In re Kleckner, 560 B.R. 172, 173 n.1 (Bankr. E.D. Pa. 2016) (AES was servicer for loans held by six different entities). Furthermore, "Brazos/US Bank Natnl" was not served with the plan or noticed of the confirmation hearing, and, therefore, was denied due process. AES meanwhile was not a creditor at the time the plan was served, and would have had no reason to object to plan confirmation; indeed, it is not even clear that AES was a party in interest with standing to object.
Finally, the subject plan provision is unclear regarding the proposed treatment of the "claim." While the plan provision indicates that the claim "will be discharged" it does not indicate any timeframe or conditions for discharge.
While at first glance it may seem that the phrase means the claim is to be discharged upon plan completion, the situation is not so simple. What would have been the effect if Debtors had stated that the claim was to be discharged immediately upon plan confirmation? While such a premature discharge violates the Code, a discharge of a student loan debt at plan completion, without an adversary proceeding and an "undue hardship" determination, also violates the Code. But by using the word "will," a future tense verb, Debtors appear to have intended that the claim would be discharged at some future time, after some further event. Is that future event the completion of plan payments? Or is that event the successful prosecution of an adversary proceeding?
Given such ambiguity, in construing such ambiguous language against the draft, the Court determines that it is appropriate to adopt the most legally appropriate interpretation, that discharge here is subject to an unperformed condition precedent (i.e. the filing of a non-dischargeability complaint), and the condition has not been
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satisfied, as a complaint has not been filed..
In accordance with the above, the Court finds that the subject plan provision, in the absence of a subsequent adversary proceeding, was inadequate to discharge Claim 5.
Notice & Due Process
As is noted in section I, supra, there are three different PO boxes in Harrisburg, Pennsylvania that are relevant here: (1) PO Box 8181, the address located on Claim 5;
PO Box 8147, the address located on the claim transfer filed with the Court; and
PO Box 2461, the address where Debtors served their plan. The record does not detail the precise function of each of these PO boxes, but, presumably, each PO Box is associated with a different department at AES.1
Assuming, arguendo, AES was a creditor at the time of the service of the plan, or if Debtors’ plan provision were to have properly identified the debt, would AES have received due process through the service effectuated by Debtors? The Supreme Court, in Espinosa, deferred to the traditional recitation of due process in this situation: "[d] ue process requires notice ‘reasonable calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 272 (2010) (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). In Espinosa, the Supreme Court concluded that the creditor had received actual notice ostensibly because United Student Aid Funds, Inc. filed a proof of claim. Id. at 265. Here, the same situation is present – Claim 5 was filed prior to the confirmation hearing and appears to be evidence that the holder of Claim 5 had actual notice of the bankruptcy filing prior to confirmation.
Equitable Remedies
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Even before the Supreme Court decided Espinosa, the Ninth Circuit was of the position that a creditor was precluded from challenging a confirmation order, even if the confirmation order contained an illegal provision, if that creditor failed to object during the confirmation process. See, e.g., In re Pardee, 193 F.3d 1083, 1086 (9th Cir. 1999) (citing Trulis v. Barton, 107 F.3d 685, 691 (9th Cir. 1995); In re Gregory, 705 F.2d 1118, 1121 (9th Cir. 1983)). The Ninth Circuit’s approach was the minority approach. See, e.g., In re Escobedo, 28 F.3d 34, 35 (7th Cir. 1994) (confirmed plan that failed to comply with Code’s requirements was "nugatory"); see also 8 Collier on Bankruptcy ¶ 1325.01 (16th ed. 2016) (endorsing the Ninth Circuit’s approach, but collecting cases which indicate that the Second, Fourth, Sixth, and Seventh Circuits disagreed).
While Espinosa declared that a confirmation order was not void simply because it contained an illegal provision, and Ninth Circuit precedent indicates that a creditor is estopped from challenging a confirmation order after the fact, a review of the case law from the previously dissenting circuits illustrates the procedural mechanisms available to the Court, rather than a creditor. For instance, one court, in reconsidering and vacating a confirmed Chapter 13 plan stated the following:
Relief from judgment under Rule 60(b) may be granted sua sponte by the court. A decision under Rule 60(b) is a matter of the court’s discretion. The Rule’s requirement that relief be granted within a ‘reasonable time’ also rests within the sound discretion of the court. While relief under Rule 60(b) is discretionary, it is warranted only upon a showing of extraordinary circumstances that create a substantial danger that the underlying judgment was unjust. The court should also look to whether any intervening rights have been affected by the passage of time since entry of the original judgment.
In re Burgess, 138 B.R. 56, 59 (Bankr. W.D. Wis. 1991); see also In re Carr, 318
B.R. 517 (Bankr. W.D. Wis. 2004) (utilizing the Court’s discretion to revoke, on equitable grounds, a confirmation order that violated the Code). There is no strict timeline for relief from a judgment or order pursuant to Fed. R. Civ. P. Rule 60(b)(4)- (6). See, e.g., In re Hanson, 397 F.3d 482 (7th Cir. 2005) (modifying discharge order to exclude student loan creditor nearly six years later).
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The Court is cognizant of the fact that, unlike most of the cases above, in this situation the Chapter 13 plan was completed, Debtors received a discharge, and the case was closed. The length of time that has elapsed would be a critical factor in any analysis considering whether to revoke or modify the Chapter 13 confirmation order pursuant to Rule 60(b)(6). Currently, there is no motion filed by AES pending before the Court implicating a Rule 60(b)(6) analysis, and because the Court finds that Debtors’ drafting errors precludes a finding that Claim 5 was discharged, the Court declines to undertake such analysis at the current time.
CONCLUSION
In accordance with Section II.I, supra, the Court concludes that Claim 5 was not discharged. Because Claim 5 was not discharged, there can be no violation of the discharge injunction, and, therefore, the motion is DENIED.
APPEARANCES REQUIRED.
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Movant(s):
Deborah Ann Stoddard Represented By Matthew D Resnik
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Matthew D Resnik David Brian Lally David Brian Lally
Brad Stoddard Represented By Matthew D Resnik Matthew D Resnik David Brian Lally David Brian Lally
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
2:00 PM
EH
Docket 135
- NONE LISTED -
Debtor(s):
Matthew Joseph Pautz Represented By Stephen D Brittain
Joint Debtor(s):
Alice Louise Pautz Represented By Stephen D Brittain
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
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Adv#: 6:17-01029 Cohen v. Bank of America, NA et al
From: 4/6/17, 5/11/17, 6/8/17, 8/17/17, 9/14/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard H Brown Jr. Represented By Gary J Holt
Defendant(s):
Ocwen Loan Servicing, LLC Pro Se
Bank of America, NA Pro Se
Plaintiff(s):
Amrane Cohen Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
From: 5/11/17, 7/20/17, 7/27/17 Also #3
EH
Docket 57
- NONE LISTED -
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
EH
Docket 72
- NONE LISTED -
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Movant(s):
Cynthia Smith Represented By Jenny L Doling Jenny L Doling
James W Smith Sr. Represented By Jenny L Doling Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
Also #5 EH
Docket 116
- NONE LISTED -
Debtor(s):
Donald Vinson Frantz Represented By Jenny L Doling
Joint Debtor(s):
Donna Peck Frantz Represented By Jenny L Doling
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
From: 8/17/17 Also #4
EH
Docket 121
08/17/2017
Summary of the Motion:
TENTATIVE
The Debtors’ case was filed on May 30, 2012. On August 21, 2012, the Debtors’ plan was confirmed. The plan provided, in pertinent part, "Bank of America, N.A.: Debtor
(s) intend to avoid lien." (Plan at V.F. Miscellaneous provisions). A proof of claim indicating that the secured junior lien scheduled by Debtors as BOFA was actually held by Bank of New York Mellon. (Proof of Claim No. 8, filed 10/17/2012).
On May 30, 2017, the Trustee filed a Motion to Dismiss due to Material Default based on the Debtors’ failure to file the lien avoidance motion indicated in the plan.
In response, five years after they said they would, Debtors filed their Motion to Avoid the Lien of Bank of New York Mellon ("Motion"). The Motion seeks to avoid the lien
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of Bank of New York Mellon ("Bank"). The Motion is deficient in that it contains insufficient evidence of the fair market value of the Property which is supported only by the opinion (without foundation) of the Debtor.
The Debtors assert that they should be permitted to avoid the lien at issue because the confirmed plan contemplated such avoidance and because the Bank agreed to its treatment at the time (the Bank’s counsel has since indicated that the servicer has changed since the time of the Bank’s original consent and as such no stipulation is currently forthcoming). Separately, Debtor underscores that the Bank has not opposed the Motion and that such failure to file opposition should be deemed consent.
On August 4, 2017, the Trustee filed comments recommending disapproval of the Motion based on (1) unreasonable delay by the Debtors; (2) the plan would be rendered infeasible by an order avoiding the lien of the Bank (it appears that Trustee treated the Bank’s claim as secured due to the lack of an order avoiding the lien and has thus only paid the Bank’s arrears through the plan (or $1,924.18), however, if the lien is now avoided, the estate would need to pay 69.64% of the Bank’s claim or approx. $29,043.33, plus trustee’s fees; (3) the plan is already in month 62; (3) between 2012 and 2014, Debtors received Proof of Claim No. 8, and "several notices" from the Trustee indicating that the Trustee was only making the payments on the Bank’s arrears through the plan but delayed until the end of the plan to take action.
In Reply, the Debtors assert that (1) the Trustee has no standing to object to the Motion; (2) the Bank has already received more than it would have received as an unsecured creditor (presumably, had the Trustee not increased the dividend to the other creditors based on the failure by Debtors to timely avoid the Bank’s lien); and
the Trustee never sought to modify the chapter 13 plan to propose a higher dividend be paid to unsecured creditors.
Here, the Court has reviewed the holding in In re Chagolla, 544 B.R. 676 (9th Cir. BAP 2016) and finds that it persuasively provides support for the untimely filing of a motion to avoid lien. Moreover, where here, the Motion appears to have been filed prior to the entry of discharge or the closing of the case, avoidance appears to be legally permissible. Additionally, as pointed out by the Debtors, the Bank has filed no opposition or response. However, the Motion is insufficient on its face because there is insufficient evidence as to the fair market value of the Property.
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Separately, although the Trustee’s comments do not provide a sufficient basis upon which to deny the Motion itself, the Trustee’s may suffice to support dismissal of the case, which the Court shall consider separately in connection with Matter No. 4.
APPEARANCES REQUIRED.
Debtor(s):
Donald Vinson Frantz Represented By Jenny L Doling
Joint Debtor(s):
Donna Peck Frantz Represented By Jenny L Doling
Movant(s):
Donna Peck Frantz Represented By Jenny L Doling Jenny L Doling
Donald Vinson Frantz Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 67
- NONE LISTED -
Debtor(s):
Karen Patricia Boyd Represented By David Lozano
Movant(s):
Karen Patricia Boyd Represented By David Lozano David Lozano
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
From: 7/27/17 EH
Docket 59
- NONE LISTED -
Debtor(s):
Reynaldo Gutierrez Represented By Steven J Diamond
Joint Debtor(s):
Corinna Delgado-Gutierrez Represented By Steven J Diamond
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
12:31 PM
Docket 102
- NONE LISTED -
Debtor(s):
James Edward Bierly Represented By Hector C Perez
Joint Debtor(s):
Betty Ann Bierly Represented By Hector C Perez
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
EH
Docket 142
- NONE LISTED -
Debtor(s):
Jesse Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Rocio Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (SA) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (SA) Cohen (TR)
12:31 PM
EH
Docket 145
- NONE LISTED -
Debtor(s):
Jesse Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Rocio Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (SA) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (SA) Cohen (TR)
12:31 PM
EH
Docket 148
BACKGROUND
On September 21, 2012, Jesse & Rocio Delgado ("Debtors") filed a Chapter 13 voluntary petition. On December 11, 2012, Debtors’ Chapter 13 plan was confirmed.
The plan has been modified four time since confirmation.
On August 29, 2017, Trustee filed a motion to dismiss for material default. On the same day, Debtors amended their Schedule D. On September 13, 2017, Debtors filed opposition to the Trustee’s motion to dismiss, stating that, pursuant to the terms of the confirmed plan, Debtors were to filed a lien avoidance motion, avoiding a lien with Springleaf Financial, which would resolve Trustee’s motion to dismiss. On September 13, 2017, Debtors also filed their lien avoidance motion.
Debtors’ motion seeks to avoid a lien in amount of $3,807. The collateral for this lien is not completely clear. Debtors’ declaration states that the security is "household goods and furnishings." Exhibit C of Debtors’ motion, titled Personal Property Appraisal Form, seems to indicate that the lien is secured by two televisions, with an aggregate value of $2,500. The actual Loan Agreement references the Personal
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Property Appraisal Form, and it appears that the extent of the collateral is the two televisions.
DISCUSSION
11 U.S.C. § 522(f)(1)(B)(i) states:
(f)(1) Notwithstanding any waiver of exemptions but subject to paragraph (3), the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is –
a nonpossessory, nonpurchase-money security interest in any –
household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, or jewelry that are held primarily for the personal, family, or household of the debtor or dependent of the debtor
There are several issues in applying the above provision to the situation here. First of all, the lien to be avoided must impair an exemption of the Debtors. Debtors’ motion states that they have exempted the property pursuant to Cal. Code Civ. P. § 703.140 (b)(3), which states:
(b) The following exemptions may be elected as provided in subdivision (a):
(3) The debtor’s interest, not to exceed six hundred dollars ($600) in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
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Debtors have listed the value of the televisions at $525 each. 11 U.S.C. § 522(f)(4)(A) (v), however, specifically states that the term "household goods," for purposes of
§ 522(f)(1)(B)(i), is limited to one television. Debtors’ attempt to avoid the lien with respect to multiple televisions would appear to be statutorily impermissible.
As such, Debtors may only avoid the lien as to one television, but have not identified either television with any specificity (i.e., serial number).
Finally, Debtors’ Schedule D specifically refers to the secured claim of Springleaf Financial as a "purchase money security," which appears to prevent the lien from being avoidable under § 522(f)(1)(B), because that provision only applies to "nonpossessory, nonpurchase-money security interest(s)."
TENTATIVE RULING
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Jesse Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
12:31 PM
Joint Debtor(s):
Rocio Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Movant(s):
Rocio Delgado Represented By
Dale Parham - INACTIVE - Dale Parham - INACTIVE - Dale Parham - INACTIVE - Michael Smith
Michael Smith Michael Smith Sundee M Teeple Sundee M Teeple Sundee M Teeple
Jesse Delgado Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (SA) Cohen (TR)
12:31 PM
Docket 67
- NONE LISTED -
Debtor(s):
Michael Wayne Branning Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 43
- NONE LISTED -
Debtor(s):
Jose M Munguia-Hernandez Represented By
D Justin Harelik Steven A Alpert
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR) Amrane (SA) Cohen (TR)
12:31 PM
Docket 59
- NONE LISTED -
Debtor(s):
Kurtis Freeman Bottorf Represented By James D Zhou
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
EH
Docket 119
- NONE LISTED -
Debtor(s):
Michael Duane Cummings Represented By Devin Sawdayi
Joint Debtor(s):
Sauna Denise Cummings Represented By Devin Sawdayi
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:32 PM
Adv#: 6:17-01054 Amarillo College of Hairdressing, Inc. v. Lopez
From: 5/11/17, 6/22/17, 8/17/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Javier Lopez Represented By
Christopher Hewitt
Defendant(s):
Javier Lopez Pro Se
Joint Debtor(s):
Carmen Lopez Represented By Christopher Hewitt
Plaintiff(s):
Amarillo College of Hairdressing, Represented By
Eamon Jafari
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
From: 8/31/17 EH
Docket 37
8/31/17
Background:
On January 28, 2017, Miriam Preisendanz ("Debtor") filed a Chapter 13 voluntary petition. Debtor’s Chapter 13 plan was confirmed on March 15, 2017.
On May 16, 2017, American Express Bank, FSB ("American Express") filed an unsecured claim in the amount of $11,316.57 ("Claim 10"). On July 22, 2017, Debtor filed an objection to Claim 10. On August 16, 2017, American Express filed a response.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in
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interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Debtors argue that the statute of limitations is four years for Creditor’s claim and that Creditor’s claim is therefore barred. Cal. Code Civ. P. § 337(2) provides for a statute of limitations of four years for:
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An action to recover (1) upon a book account whether consisting of one or more entries; (2) upon an account stated based upon an account in writing, but the acknowledgement of the account stated need not be in writing; (3) a balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that where an account stated is based upon an account of one item, the time shall begin to run from the date of said item, and where an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.
Cal. Code Civ. P. § 337(1) provides that the statute of limitations is also four years for claims based upon a contract.
American Express’s response is that the Cash Rebate Cardmember Agreement includes a choice of law provision that identifies Utah as the governing law. American Express further asserts that the statute of limitations for its claim is six years under Utah law, and that, therefore, its claim is not barred. The Cash Rebate Cardmember Agreement states, under the section applicable law:
This Agreement and your Account, and all questions about their legality, enforceability and interpretation, are governed by the laws of the State of Utah (without regard to internal principles of conflicts of law), and by applicable federal law. We are located in Utah, hold your Account in Utah, and entered into this Agreement with you in Utah.
As is noted by American Express, the Ninth Circuit, relying on the Restatement (Second) of Conflict of Laws § 142, previously stated:
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The application of § 142 compels the conclusion that California’s shorter statute of limitations does not apply here, because the case presents the sort of "exceptional circumstances" under which the 1988 version of the Second Restatement looks past the law of the forum, and applies a longer foreign limitations period. The Restatement, to be sure, does not provide an exhaustive or technical definition of an exceptional circumstance. Nevertheless, the comment to the 1988 version of § 142 makes clear that the present case comes within that category. Indeed, this case is on all fours with the Restatement’s only example of what would constitute such a "special," "unjust" circumstance: "[W]hen through no fault of the plaintiff an alternative forum is not available as, for example, where jurisdiction could not be obtained over the defendant in any [other] state . . ."
In re Sterba, 852 F.3d 1175, 1180 (9th Cir. 2017). In the absence of any argument to the contrary, the Court finds that Utah law provides the applicable statute of limitations.
While American Express argues that the statute of limitations in Utah for credit card debt is six years, Utah’s statutes are unclear. The Court of Appeals of Utah has recently stated:
As both parties agree, the question of which limitations period applies to actions on credit card accounts is an issue of first impression in Utah. Stocks argues that the four-year period applicable to "open store account[s] for [the purchase of] any good, wares, or merchandise" and to "open account[s] for work, labor or services rendered, or materials furnished," see Utah Code Ann.
§ 78B-2-307, is the correct one; Asset Acceptance contends that it should be the six-year period applicable to "any contract, obligation, or liability founded upon an instrument in writing," see id. § 78B-2-309. In other jurisdictions
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where a similar issue has been addressed, the results have been mixed and
often involve statutory language that differs from our own in ways that may or may not be significant. And the question presented here is an important one that deserves attention, whether judicial or legislative, given the universality of credit cards in our society and the number of collection cases involving credit card debt that make their way into our courts. But precisely because the issue is important and may have widespread impact, we decline to attempt to resolve an issue of first impression in a case with the sort of procedural deficits this one contains.
Asset Acceptance LLC v. Stocks, 376 P.3d 322, 327 (Ct. App. Utah 2016) (footnotes omitted). Utah Code Ann. § 78B-2-307(1) states:
An action may be brought within four years:
after the last charge is made or the last payment is received:
upon a contract, obligation, or liability not founded upon an instrument in writing
on an open store account for any goods, wares, or merchandise; or
on an open account of work, labor or services rendered, or materials furnished.
And Utah Code. Ann. § 78B-2-309(2) states:
An action may be brought within six years:
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upon any contract, obligation, or liability founded upon an instrument in writing, except those mentioning in Section 78B-2- 311
In equivocating upon the statute of limitations, the Court of Appeals of Utah left a footnote identifying several states that had addressed the situation. Stocks, 376 P.3d 322, 327 n.3. The split identified by the Court of Appeals of Utah appears to center on whether the reviewing court believed that a credit card agreement should be interpreted as a written contract or an oral contract; i.e. whether a credit card agreement was sufficient to satisfy the formalities of contract formation. Compare, e.g., Portfolio Acquisitions LLC v. Feltman, 391 Ill. App. 3d. 642, 651-52 (App. Ct.
Ill. 2009) ("Accordingly, the contract at issue is considered to be an oral contract for purpose of the statute of limitations and the five-year period of section 13-205 applies.") with Hill v. Am. Express, 289 Ga. App. 576, 577-78 (Ct. App. Ga. 2008) (credit card agreement is written contract).
Despite not alerting the Court to the unsettled nature of the question in Utah, American Express appears to have anticipated this analysis, including in its opposition a brief argument that Utah law recognizes a credit card agreement as a written contract. See In re Cluff, 313 B.R. 323, 334 (Bankr. D. Utah. 2004) ("Under the test this Court has articulated, these credit card debts are based on writing."). This argument is unconvincing, primarily because In re Cluff was not interpreting Utah law, but, rather, the Federal Rules of Bankruptcy Procedure.1 Id.
The Court notes, however, that Utah Code Ann. § 25-5-4(2)(e) states:
(e) A credit agreement is binding and enforceable without any signature by the party to be charged if:
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the debtor is provided with a written copy of the terms of the agreement;
the agreement provides that any use of the credit offered shall constitute acceptance of those terms;
after the debtor receives the agreement, the debtor, or a person authorized by the debtor, requests funds pursuant to the credit agreement or otherwise uses the credit offered.
Here, the agreement clearly satisfied the second requirement. The Court lacks an evidentiary record to determine whether the debtor was provided with a written copy of the agreement and requested funds after receiving the agreement. If the requirements of Utah Code Ann. § 25-5-4(2)(e) were satisfied, the Court concludes that a Utah court would find the credit agreement enforceable, per the statute. See MBNA Am. Bank, N.A. v. Goodman, 140 P.3d 589, 592 (Ct. App. Utah 2006). If the credit agreement is enforceable, then the claim of American Express would appear to be founded upon an instrument in writing, and the six year statute of limitations would apply.
Exhibit A provided by American Express, however, indicates that on April 18, 2011, there was a $15 agency remittance, which is referred to by American Express as a "payment." It is unclear if this is in fact a payment. If it is not a payment, to adopt American Express’s argument that this "agency remittance" tolls the statute of limitations would allow a creditor the means to unilaterally toll the statute of limitations indefinitely.
Furthermore, the Court notes that Exhibit A to American Express’s opposition is not the same form as is included in the proof of claim. Claim 10 shows activity for 2012, indicates that the last transaction was in June 2008, that the account was charged off in January 2009, and that the last payment was made in April 2011.
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Parties to address the nature of the April 18, 2011, "agency remittance."
Tentative Ruling
APPEARANCES REQUIRED.
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Movant(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 25
APPEARANCES REQUIRED.
Debtor(s):
Ernie Macias Represented By
Alon Darvish
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 26
10/19/17
Background:
On March 9, 2017, Gregory Vit ("Debtor") filed a Chapter 13 voluntary petition. On May 9, 2017, Debtor’s Chapter 13 plan was confirmed. On May 16, 2017, The Bank of New York Mellon ("Creditor") filed a secured claim in the amount of $401,998.25 ("Claim 1").
On September 15, 2017, Debtor filed an objection to Claim 1. Debtor argued that the deferred principal balance should not be included in the amount to cure default, and requested that Claim 1 be amended. On October 4, 2017, Creditor amended Claim1 to satisfy Debtor’s request.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy
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Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Creditor has amended Claim 1 to indicate that $105,216.79 is necessary to cure the default, satisfying Debtor’s request.
Tentative Ruling
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The Court will DISMISS the claim objection as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Gregory Dwight Vit Represented By Christopher J Langley
Movant(s):
Gregory Dwight Vit Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 22
- NONE LISTED -
Debtor(s):
Joan Eleanor Demiany Represented By Jenny L Doling
Movant(s):
Joan Eleanor Demiany Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 19
10/19/17
Background:
On June 16, 2017, Ruben & Jessica Lopez ("Debtors") filed a Chapter 13 voluntary petition. On July 3, 2017, the County of San Bernardino ("Creditor") filed a secured claim in the amount of $6,916.41 ("Claim 2"). On August 2, 2017, Debtors’ Chapter 13 plan was confirmed. On September 13, 2017, Debtor filed an objection to Claim 2, arguing that they were current on their payments to Creditor.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving
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rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Claim 2 appears to indicate that it is based on projected 2017 property taxes. Debtors have provided two documents in its claim objection: (1) a mortgage statement, which is not directly relevant; and (2) a tax bill for what appears to be 2014 or 2015, although the header of the tax bill states that it is "as of 8/28/2017."
On the other hand Claim 2 is unclear. Claim 2 references a projected indebtedness; it is not clear whether the claim evidences a pre-petition debt or whether Debtors currently owe any money to Creditor. Furthermore, the evidence submitted by Debtors does indicate that Debtors have an impound account and are current on their mortgage.
Furthermore, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-1(h).
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Tentative Ruling
The Court is inclined to SUSTAIN the objection.
APPEARANCES REQUIRED.
Debtor(s):
Ruben Lopez Represented By
Terrence Fantauzzi
Joint Debtor(s):
Jessica Lopez Represented By Terrence Fantauzzi
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #22 EH
Docket 21
Summary of the Motion:
TENTATIVE
The Court has reviewed the motion and notice appearing proper and good cause appearing, the Court is inclined to GRANT the motion, AVOIDING the lien of Bank of New York Mellon conditioned upon Debtors obtaining a Chapter 13 discharge.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Anna C. Hopson Represented By
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Julie J Villalobos
Joint Debtor(s):
George E. Hopson Represented By Julie J Villalobos
Movant(s):
George E. Hopson Represented By Julie J Villalobos
Anna C. Hopson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #21 EH
Docket 0
- NONE LISTED -
Debtor(s):
Anna C. Hopson Represented By Julie J Villalobos
Joint Debtor(s):
George E. Hopson Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #24 EH
Docket 0
- NONE LISTED -
Debtor(s):
Jeffrey Elkins Represented By Anthony P Cara
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
MOVANT: JEFFREY ELKINS
Also #23 EH
Docket 19
10/19/2017
The Court will DENY the motion.11 U.S.C. § 362(c)(3)(B) requires that the hearing be held within thirty days of the petition date. This hearing was scheduled forty-seven days after the hearing date, and, therefore, Debtor’s request is legally prohibited.
APPEARANCES REQUIRED.
Debtor(s):
Jeffrey Elkins Represented By Anthony P Cara
Movant(s):
Jeffrey Elkins Represented By Anthony P Cara
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kathern Jennifer Toiney Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Annette Culpepper Represented By Nathan Fransen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Norma Hermosillo Hernandez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Harvey Everett Mosely Represented By Paul Y Lee
Joint Debtor(s):
Jean Ann Mosely Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kevin William Dixon Represented By Paul Y Lee
Joint Debtor(s):
Leticia Dixon Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Shaun E Duncan Represented By Paul Y Lee
Joint Debtor(s):
Danielle M Duncan Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Martha Viveros Rangel Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Terry Neil Gaia Represented By Edward G Topolski
Joint Debtor(s):
Tamara Marie Devalle-Gaia Represented By Edward G Topolski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kendra Susan Lewkow Represented By Morton J Grabel
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Edgar Eduardo Diaz Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Danny Howard Weeks Represented By Stephen S Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Raul R Robles Represented By Jose Perez
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
CASE DISMISSED 9/19/17
Also #38 EH
Docket 13
BACKGROUND
On September 11, 2017, Judy Ortega ("Debtor") filed a Chapter 13 voluntary petition. The case was dismissed for failure to file case commencement documents on September 19, 2017.
On September 26, 2017, UST filed a motion to disgorge attorney’s fees under 11
U.S.C. § 329. The motion is based on the failure to Debtor’s counsel, Alon Darvish ("Counsel") to file the required statement of attorney compensation, which UST asserts that Counsel has regularly failed to do. On October 17, 2017, Counsel filed a disclosure of compensation.
DISCUSSION
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11 U.S.C. § 329 states:
Any attorney representing a debtor in a case under this title, or in connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after on year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation.
Fed. R. Bankr. P. Rule 2016(b) states:
Every attorney for a debtor, whether or not the attorney applies for compensation, shall file and transmit to the United States trustee within 14 days after the order for relief, or at another time as the court may direct, the statement required by § 329 of the Code including whether the attorney has shared or agreed to share the compensation with any other entity. The statement shall include the particulars of any such sharing or agreement to share by the attorney, but the details of any agreement for the sharing of the compensation with a member or regular associate of the attorney’s law firm shall not be required. A supplemental statement shall be filed and transmitted to the United States trustee within 14 days after any payment or agreement not previously discussed.
The Ninth Circuit has stated:
To facilitate the court’s policing responsibilities, the Bankruptcy Code and Federal Rules of Bankruptcy Procedure impose several disclosure requirements on attorneys who seek to represent a debtor and who seek to recover fees. Thus, failure to comply with the disclosure rules is a
sanctionable violation, even if proper disclosure would have shown that the attorney had not actually violated any Bankruptcy Code provision or any Bankruptcy Rule.
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In re Park-Helena Corp., 63 F.3d 877, 880 (9th Cir. 1995). Furthermore, "[T]he disclosure rules are applied literally, even if the results are sometimes harsh.
Negligent or inadvertent omissions ‘do not vitiate the failure to disclose.’" Id. at 881.
When an attorney fails to satisfy the disclosure requirements of § 329, the Court is authorized to order disgorgement of fees. See, e.g., In re Lewis, 113 F.3d 1040, 1045 (9th Cir. 1997) ("An attorney’s failure to obey the disclosure and reporting requirements of the Bankruptcy Code and Rules gives the bankruptcy court the discretion to order disgorgement of attorney’s fees. In reaching this conclusion, we do not mean to say that the excessiveness or reasonableness of those fees is irrelevant in all cases; in appropriate circumstances, a bankruptcy court should inquire into these subjects as part of deciding whether and to what extent to order disgorgement."); see also In re Lee, 1999 WL 61900 (9th Cir. 1999) ("An attorney’s failure to obey the disclosure and reporting requirements of the Bankruptcy Code and Rules gives the bankruptcy court the discretion to order disgorgement of attorney’s fees."). Here, UST states that Counsel has repeatedly violated the disclosure requirements in proceedings before this Court and, therefore, disgorgement is appropriate. Under 11 U.S.C. § 105
(a) (2010), the Court is empowered to "issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title." Therefore, the Court has the authority to issue an order directing disgorgement of fees and such an order is appropriate in this case.
Furthermore, the failure of Counsel to oppose may be deemed consent pursuant to Local Rule 9013-1(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion, ordering disgorgement of the entirety of the fees paid by Debtor.
APPEARANCES REQUIRED.
12:32 PM
Debtor(s):
Judy Carmen Ortega Represented By Alon Darvish
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Also #37 EH
Docket 0
- NONE LISTED -
Debtor(s):
Judy Carmen Ortega Represented By Alon Darvish
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Constantino Orea Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Eugene Charles Harris Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jorge Luis Luviano Represented By
James Geoffrey Beirne
Joint Debtor(s):
Giovanna Toledo De Luviano Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Justin Lee Martin Represented By Todd L Turoci
Joint Debtor(s):
Ashley Ann Martin Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 49
- NONE LISTED -
Debtor(s):
Gustavo Valadez Represented By Eliza Ghanooni
Joint Debtor(s):
Elizabeth Ann Valadez Represented By Eliza Ghanooni
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 37
- NONE LISTED -
Debtor(s):
Jeanie Sullivan Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 176
- NONE LISTED -
Debtor(s):
Vivian Munson Represented By Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
11:00 AM
Adv#: 6:17-01050 United States Trustee for the Central District of v. Pryor
EH
Docket 34
BACKGROUND
On October 13, 2015, Jack Pryor ("Debtor") filed a Chapter 11 voluntary petition. On February 25, 2016, Debtor’s case was converted to Chapter 7. The Court extended the time to file a complaint objecting to discharge on three occasions: (1) on June 8, 2016 (Dkt. No. 135); (2) on July 12, 2016 (Dkt. No. 141); and (3) on February 3, 2017
(Dkt. No. 245).
On February 28, 2017, UST filed a complaint against Debtor for denial of discharge pursuant to § 727(a)(6) and 727(a)(2)(B). On April 17, 2017, default was entered against Debtor. On July 3, 2017, Debtor filed a motion to set aside default. UST filed their opposition on July 12, 2017. On August 21, 2017, Debtor’s motion was denied. On September 19, 2017, UST filed a motion for default judgment.
UST’s complaint arises out of Debtor’s removal of solar panels from certain real property located at 19024 Ruppert St., Palm Springs, CA (the "Property"). According to UST, the Chapter 7 trustee inspected the property on March 1, 2016, and identified
11:00 AM
approximately 96 solar panels affixed to the Property. In June 2016, Debtor notified Trustee that he had removed the solar panels. On October 19, 2016, after motion by the Trustee, the Court entered an order directing Debtor to turn over the solar panels. Debtor did not file opposition to the motion for turnover, and, after entry of the order, did not comply with the Court’s order. On December 6, 2016, Trustee filed a motion for contempt, and, on December 15, 2016, the Court issued an order to show cause.
Debtor did not respond to the order to show cause, and, on January 12, 2017, the Court entered an order holding Debtor in civil contempt.
DISCUSSION
Entry of Default
Fed. R. Civ. P. Rule 55 states that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party’s default." Fed. R. Civ. P. 55(a). Local Rule 7055-1 provides further requirements relating to a motion for entry of default judgment, and those requirements have been substantially satisfied here.
Motion for Default Judgment
Proper Service of Summons and Complaint
Fed. R. Bankr. P. Rule 7004(b)(1) states, in part:
ervice may be made within the United States by first class mail postage prepaid as follows:
11:00 AM
Upon an individual other than an infant or incompetent, by mailing a copy of the summons and complaint to the individual’s dwelling house or usual place of abode or to the place where the individual regularly conducts a business or profession.
Here, Plaintiff properly served Debtor and his counsel at their addresses of record.
Merits of Plaintiff’s claim
Upon default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); see also Almog v. Golden Summit Investors Group, Ltd., 2012 WL 12867972 at *4 (C.D. Cal. 2012) ("When reviewing a motion for default judgment, the Court must accept the well-pleaded allegations of the complaint relating to liability as true.").
Here, the complaint includes two causes of action: § 727(a)(2)(B) and § 727(a)(6)
Regarding § 727(a)(2)(B), that provision states:
a) The court shall grant the debtor a discharge, unless –
The debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed destroyed, mutilated, or
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concealed –
property of the estate, after the date of the filing of the petition
Here, UST has asserted that the solar panels were property of the estate, that the solar panels were removed or sold by Debtor after the petition date, and that Debtor concealed his actions with the intent to hinder, delay, or defraud creditors or an officer of the estate. As such, UST has satisfied the elements of § 727(a)(2)(B).
Regarding § 727(a)(6), that provision states:
The court shall grant the debtor a discharge, unless –
(6) the debtor has refused in the case –
Section 727(a)(6) contains three further disjunctive provisions, and UST has not cited a specific provision. Section 727(a)(6)(A) relates to the failure to a debtor to obey a lawful order of the court, and UST asserts that Debtor "refused to obey a lawful order of the court." Specifically, UST asserts that Debtor failed to comply with the Court’s turnover order entered on October 19, 2016. This Court, in its order finding Debtor in civil contempt, has already held that Debtor willfully violated its Court order.
Therefore, the elements of § 727(a)(6) have been satisfied.
Amount of Damages
Here, UST is not requesting any damages, and, therefore, no evidence is required
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establishing the amount of damages.
TENTATIVE RULING
The Court is inclined to GRANT the motion, DENYING Debtor a discharge.
APPEARANCES REQUIRED.
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Defendant(s):
Jack C Pryor Represented By
Linda J DeVore
Movant(s):
United States Trustee for the Central Represented By
Everett L Green
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
11:00 AM
Adv#: 6:17-01050 United States Trustee for the Central District of v. Pryor
From: 5/3/17, 7/12/17, 7/26/17, 9/20/17 Also #1
EH
Docket 1
- NONE LISTED -
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Defendant(s):
Jack C Pryor Represented By
Linda J DeVore
Plaintiff(s):
United States Trustee for the Central Represented By
Everett L Green
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe
11:00 AM
Brandon J Iskander
11:00 AM
From: 6/21/17, 8/28/17 EH
Docket 263
- NONE LISTED -
Debtor(s):
Jack C Pryor Represented By
Trent Thompson
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Brandon J Iskander
10:00 AM
MOVANT: KISHA EUGENA STEGALL-HILL
EH
Docket 8
The Court is inclined to GRANT the motion, IMPOSING the automatic stay with regard to all creditors.
APPEARANCES REQUIRED.
Debtor(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Movant(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: MEI ZHAO
EH
Docket 8
- NONE LISTED -
Debtor(s):
Lauren Nicole Pancucci Pro Se
Movant(s):
MEI ZHAO Represented By
Barry L O'Connor
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: EUGENE AND DEBORAH MYERS
EH
Docket 16
The Court is inclined to GRANT the motion, CONTINUING the automatic stay with regard to all creditors except Welk Resort Group.
APPEARANCES REQUIRED.
Debtor(s):
Eugene Myers Represented By Paul Y Lee
Joint Debtor(s):
Deborah Myers Represented By Paul Y Lee
Movant(s):
Deborah Myers Represented By Paul Y Lee
Eugene Myers Represented By
10:00 AM
Trustee(s):
Paul Y Lee
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMAYDA VANESSA PALOMARES
EH
Docket 10
- NONE LISTED -
Debtor(s):
Amayda Vanessa Palomares Represented By
Timothy L McCandless
Movant(s):
Amayda Vanessa Palomares Represented By
Timothy L McCandless Timothy L McCandless
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: RAMON GABRIEL ALVAREZ
EH
Docket 17
The Court is inclined to DENY the motion. First, Debtor did not serve the motion on the affected creditor pursuant to Fed. R. Bankr. P. Rule 7004. Second, Debtor has not overcome the presumption of bad faith by "clear and convincing evidence." See 11
U.S.C. § 362(c)(3)(C). The evidence provided by Debtor regarding his current financial situation, and how this situation differs from that of his previous unsuccessful case, lacks detail and is not "clear and convincing."
APPEARANCES REQUIRED.
Debtor(s):
Ramon Gabriel Alvarez Represented By Devin Sawdayi
Movant(s):
Ramon Gabriel Alvarez Represented By Devin Sawdayi
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HOLLYVALE RENTAL HOLDINGS LLC
CASE DISMISSED 10/23/17
EH
Docket 7
Service is Proper Opposition: None
DENY requests under ¶¶ 7 and 10 for lack of cause shown. DENY request under ¶ 8 – Movant is not a creditor, nor has either requirement of § 362(d)(4) been met. DENY requests under ¶¶ 1, 2, and 6 as MOOT because the case was dismissed on October 23, 2017.
APPEARANCES REQUIRED.
Debtor(s):
Timothy G Klepeis Pro Se
Movant(s):
Hollyvale Rental Holdings, LLC Represented By
Sam Chandra
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DCCM INVESTMENT CORP
EH
Docket 8
- NONE LISTED -
Debtor(s):
Sonia Garcia Pro Se
Movant(s):
DCCM Investment Corp Represented By William E Windham
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
CASE DISMISSED 9/29/17
EH
Docket 15
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to § 362(d)
(1) and (4) based on multiple recent bankruptcy filings affecting the property. The Court is inclined to GRANT requests under ¶¶ 2, 3, 10 and 12. DENY requests under
¶¶ 8 and 11 for lack of cause shown. DENY request under ¶ 14 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Raul R Robles Represented By Jose Perez
Movant(s):
Wells Fargo Bank, N.A. Represented By Nancy L Lee
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: TD AUTO FINANCE LLC
EH
Docket 13
- NONE LISTED -
Debtor(s):
Elpidio Berumen Represented By Patricia M Ashcraft
Joint Debtor(s):
Erika G. Berumen Represented By Patricia M Ashcraft
Movant(s):
TD Auto Finance LLC Represented By Sheryl K Ith
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: NISSAN MOTOR ACCEPTANCE CORPORATION
EH
Docket 18
Service is Proper Opposition: Yes
Parties to discuss adequate protection. APPEARANCES REQUIRED.
Debtor(s):
Luis Fernando Montoya Jr. Represented By Anthony B Vigil
Movant(s):
NISSAN MOTOR ACCEPTANCE Represented By
Michael D Vanlochem
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICAN HONDA FINANCE CORPORATION
EH
Docket 10
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to § 362(d)
(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Al Rodriguez Represented By
Freddie V Vega
Movant(s):
AMERICAN HONDA FINANCE Represented By
Vincent V Frounjian
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
U.S.C. 362(j) or That No Stay is in Effect under 11 U.S.C. 362(c)(4)(A)(ii) 851 Via Concepcion, Riverside, CA 92506-3634
MOVANT: CITIMORTGAGE INC
EH
Docket 34
Service is Proper Opposition: None
Debtors had a previous bankruptcy case dismissed on June 8, 2017, for failure to make plan payments. The instant case was filed on August 9, 2017. On august 16, 2017, Debtors filed a motion for an order continuing the automatic stay, and, at a hearing on August 31, 2017, the Court orally denied the motion.
11 U.S.C. § 362(c)(3) provides that if a debtor had a previous case dismissed within a year of the instant case, then, absent court order, the automatic stay terminates thirty days after the petition date. Here, the Court did not continue the automatic stay, and, therefore, the automatic stay terminated on September 8, 2017. Therefore, the Court is inclined to GRANT the motion, confirming that the automatic stay is not in effect.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
10:00 AM
Debtor(s):
Kalenga Patrick Munongo Represented By Paul Y Lee
Joint Debtor(s):
Janelle Nicole Munongo Represented By Paul Y Lee
Movant(s):
CitiMortgage, Inc. Represented By Robert P Zahradka
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
Rod (MJ) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK TRUST, N.A.
EH
Docket 19
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to § 362(d)
(1) and (2). GRANT relief from the automatic stay pursuant to § 362(d)(4) based on multiple recent bankruptcy cases affecting the property, multiple recent unauthorized transfers, and the fact that Debtor received the property through an unauthorized warranty deed three days before filing the instant bankruptcy case. GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES REQUIRED.
Debtor(s):
Claudia Acevedo Represented By Richard McAndrew
Movant(s):
U.S. Bank Trust, N.A., as Trustee Represented By
Christina J O
10:00 AM
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: DOUGLAS AND DEANNA PEARSON
EH
Docket 19
Service is Improper Opposition: None
The Court is inclined to DENY the motion. Movant did not serve the motion on the Chapter 7 Trustee, the United States Trustee, or the Debtor pursuant to Local Rule 4001-(1)(c)(1)(C). Furthermore, Movant’s attorney’s declaration requests annulment of the automatic stay to validate certain post-petition acts, however, there is no description of what acts were taken in violation of the automatic stay. Finally, the details of the state court action are unclear. Specifically, it is not clear what role Debtor has in the litigation, and, while Movant appears to wish to proceed against applicable insurance, the motion also seems to indicate that it is unclear whether there is any applicable insurance.
APPEARANCES REQUIRED.
Debtor(s):
Chad Priest Construction, Inc., Represented By Jonathan R Preston
10:00 AM
Movant(s):
Douglas Pearson Represented By Alan J Carnegie
Deanna Pearson Represented By Alan J Carnegie
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: ALLY BANK
EH
Docket 21
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Allan Omar Ramos Represented By Julie J Villalobos
Movant(s):
Ally Bank Represented By
Adam N Barasch
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
CASE DISMISSED 8/31/17
EH
Docket 31
On July 18, 2017, Conchita Ang ("Debtor") filed a Chapter 13 voluntary petition. Debtor had a previous bankruptcy case dismissed on October 12, 2016. As such, pursuant to § 362(c)(3), the automatic stay was to terminate thirty days after the petition absent an order from the Court.
On August 15 and 18, respectively, Debtor filed an "application for legal determination/clarification of automatic stay" (the "Application") and a motion to, in part, enforce the automatic stay (the "Enforcement Motion"). On August 31, 2017, Debtor’s case was dismissed with a six-month refiling bar. On September 14, 2017, Debtor’s Application was denied, and the Court continued the Enforcement Motion.
On September 22, 2017, Wells Fargo Bank filed a motion for relief from the automatic stay (the "Annulment Motion"), requesting, in part, retroactive annulment of the automatic stay. Because Wells Fargo’s motion was filed after the case was dismissed, the Court deems all Wells Fargo’s requests that are not retroactive in
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nature to be moot. On October 10, 2017, Debtor filed her opposition to the Annulment Motion.
11 U.S.C. § 362(d) states:
On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided, under subsection (a) of this section such as by terminating, annulling, modifying, or condition such stay –
(emphasis added); see also In re Schwartz, 954 F.2d 569, 573 (9th Cir. 1992) ("If a creditor obtains retroactive relief under section 362(d), there is no violation of the automatic stay, and whether violations of the stay are void or voidable is not at issue.").
The BAP, in In re Fjeldsted, noted the absence of a clear standard for annulment of the automatic stay. 293 B.R. 12, 21 (B.A.P. 9th Cir. 2003) ("There is less appellate clarity, however, in enunciating a test for retroactive stay relief. Inconsistent standards have thus developed, which run the gamut from such relief being justified only in ‘extreme circumstances’ to giving the court ‘wide latitude’ to ‘balance the equities’ on a case-by-case basis."). The BAP’s most recent announcement of the standard for annulment of the automatic stay stated the following:
Determining whether cause exists to annul the stay is a case-by-case inquiry based on a balance of the equities. In conducting this inquiry the bankruptcy court, among other factors, should consider whether the creditor knew of the bankruptcy when violating the stay and whether the debtor’s conduct was unreasonable, inequitable or prejudicial to the creditor.
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In Fjeldsted, we approved additional factors for consideration in assessing the equities. The twelve nonexclusive factors are: (1) number of filings; (2) whether, in a repeat filing case, the circumstances indicate an intention to delay and hinder creditors; (3) a weighing of the extent of prejudice to creditors or third parties if the stay relief is not made retroactive, including whether harm exists to a bona fide purchaser; (4) the debtor’s overall good faith (totality of circumstances test); (5) whether creditors knew of stay but nonetheless took action, thus compounding the problem; (6) whether the debtor has complied, and is otherwise complying, with the Bankruptcy Code and Rules; (7) the relative ease of restoring parties to the status quo ante; (8) the costs of annulment to debtors and creditors; (9) how quickly creditors moved for annulment, or how quickly debtor moved to set aside the sale or violative conduct; (10) whether, after learning of the bankruptcy, creditors proceeded to take steps in continued violation of the stay, or whether they moved expeditiously to gain relief; (11) whether annulment of the stay will cause irreparable injury to the debtor; and (12) whether stay relief will promote judicial economy or other efficiencies. The Panel in Fjeldsted cautioned that the twelve factors are merely a framework for analysis and not a scorecard, and that in any given case, one factor may so outweigh the others as to be dispositive.
In re Estavan Capital LLC, 2015 WL 7758494 at *5 (B.A.P. 9th Cir. 2015) (citations and quotations omitted).
While Fjeldsted cautioned that the enumerated factors are not a scorecard, it is clear that the majority of the factors, including, in particular, Debtor’s lack of good faith, weigh in favor of annulling the stay. Specifically, as is noted by Wells Fargo, this is the sixteenth bankruptcy affecting the property, and this is also the tenth bankruptcy filed by Debtor. Debtor commenced the instant bankruptcy case several minutes before a scheduled foreclosure sale. And Debtor’s bankruptcy case was dismissed at the confirmation hearing, with a re-filing bar, after Debtor failed to satisfy her basic obligations as a debtor.
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Furthermore, there is no evidence that Wells Fargo was aware of the bankruptcy filing at the time it undertook the acts in question, nor is there any evidence that Wells Fargo violated the automatic stay once it learned of the filing. Furthermore, Wells Fargo has at least a colorable argument that the automatic stay was not effective in this case. Certainly, if Wells Fargo had not made an error in the location in which it recorded a previous in rem order granting relief from the automatic stay, there would have been no need to seek annulment.
Given the history of Debtor’s bankruptcy filings, the history of filings affecting the property, the timing of the filing in this case, Debtor’s non-fulfillment of her legal obligations, the absence of timely notice of the bankruptcy filing to Wells Fargo, Wells Fargo’s previous obtainment of an in rem order and recording (albeit incorrectly) of that order, Wells Fargo’s prompt action in seeking annulment of the automatic stay, and Debtor’s overall bad faith, the Court is inclined to GRANT the motion, annulling the automatic stay.
Because Wells Fargo filed its motion after dismissal of the instant bankruptcy case, all requests other than retroactive § 362(d)(1) relief are DENIED as moot.
APPEARANCES REQUIRED.
Debtor(s):
Conchita C Ang Represented By Richard W Snyder
Movant(s):
WELLS FARGO BANK, N.A. Represented By Jonathan C Cahill
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICREDIT FINANCIAL SERVICES
EH
Docket 22
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT relief from 1301(a) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Lawrence D Leavingston Sr. Represented By Gilbert A Diaz
Movant(s):
AmeriCredit Financial Services, Inc. Represented By
Mandy D Youngblood Sheryl K Ith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: THE BANK OF NEW YORK MELLON
EH
Docket 22
Service is Proper Opposition: Yes
Subject to cure by Debtor or adequate protection discussions, the Court is inclined to GRANT relief from the automatic stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under § 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Lashanda Moniek Shelton Represented By Lionel E Giron Kevin Tang
Movant(s):
The Bank of New York Mellon FKA Represented By
Robert P Zahradka
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CITIMORTGAGE, INC.
EH
Docket 118
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
CitiMortgage, Inc. Represented By
10:00 AM
Trustee(s):
Robert P Zahradka
Arturo Cisneros (TR) Represented By Thomas H Casey
10:00 AM
MOVANT: U.S. BANK TRUST, N.A.
EH
Docket 18
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (4) based on an unauthorized, unrecorded grant deed transferring the property to Debtor.. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 5.
APPEARANCES REQUIRED.
Debtor(s):
Ellen R. Kennedy Represented By Patricia M Ashcraft
Movant(s):
U.S. Bank Trust, N.A., As Trustee Represented By
Darlene C Vigil
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: LAKEVIEW LOAN SERVICING LLC
From: 9/26/17 EH
Docket 26
09/26/2017
Service: Proper Opposition: Yes
Court’s tentative ruling is to GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and relief requested under ¶3.
APPEARANCES REQUIRED.
Debtor(s):
Toni N. Ephraim Represented By Paul Y Lee
Movant(s):
Lakeview Loan Servicing LLC Represented By Daniel K Fujimoto Caren J Castle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: INTERESTED PARTY ALAN GATTO
EH
Docket 36
Service is Proper Opposition: None
The Court is inclined to CONTINUE the matter for Movant to file a supplemental declaration. Specifically, while Movant has checked the appropriate box stating that post-petition acts taken in violation of the automatic stay were taken before Movant knew of the bankruptcy filing, there is no supplemental declaration explaining when and how Movant obtained knowledge of the bankruptcy filing. Section 12 of the form motion explicitly contemplates the inclusion of a supplemental declaration when filing a motion to annul the automatic stay.
APPEARANCES REQUIRED.
Debtor(s):
Javier Ruiz Olivas Represented By Aldo A Flores
Joint Debtor(s):
Gloria Olguin Represented By Aldo A Flores
10:00 AM
Movant(s):
Alan Gatto Represented By
Helen G Long
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: MARTHA E GUERRERO AND EDUARDO E GUERRERO FROM: 4/25/17, 5/30/17, 7/11/17, 7/25/17, 8/22/17
EH
Docket 11
Debtor’s opposition argues that the real estate contract is an executory contract that can be rejected in bankruptcy. While providing an applicable citation for that assertion, Debtor does not apply the legal standard to the facts of this case.
Nevertheless, it appears that Debtor’s characterization of the contract as "executory" may have merit. While Movant, in the motion, states that "all contingencies had been removed," and, in the reply, states that they "dutifully removed all their contractual contingencies," the state court complaint submitted to support their motion states, in paragraph 23: "Plaintiffs have fully performed all conditions, covenants, and promises required by them on their part to be performed in accordance with the terms and conditions of the contract, except the final payment for the purchase of the Property." (emphasis added). While Movants appear to have made the initial deposit into escrow, it does not appear that the final purchase price was tendered.
"[A]n ‘executory contract’ that can be rejected in bankruptcy is a contract on which performance remains due on both sides at the time of the bankruptcy petition." Matter of Newcomb, 744 F.2d 621, 624 (8th Cir. 1984); see also In re Texscan Corp., 976 F.2d 1269-1271-72 (9th Cir. 1992). In Newcomb, the Court held that when the funds had already been transferred into escrow, there was no executory contract – no
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material obligations remained on the part of the grantor. See id.
In the Ninth Circuit, a real estate sales contract remains executory until the full purchase price is deposited into escrow by the purchaser. See In re Hertz, 536 B.R. 434, 439-41 (Bankr. C.D. Cal. 2015) (an extended discussion on when a purchase contract loses its executory nature).
Given that the real estate purchase contract may be an executory contract that shortly will be rejected by operation of law under 11 U.S.C. § 365(d)(1), and that Movants are seeking a state court order for specific performance under the contract, granting relief from stay would be improper because the state court proceedings would interfere with the bankruptcy court proceedings. Interference with the administration of the estate is the most important consideration when considering a motion for relief from stay to proceed with state court litigation. See In re Roger, 539 B.R. 837, 845 C.D. Cal. 2015) ("According to the court in Curtis, the most importance factor in determining whether to grant relief from the automatic stay to permit litigation against the debtor in another forum is the effect of such litigation on the administration of the estate. Even slight interference with the administration may be enough to preclude relief in the absence of a commensurate benefit."). Here, there is a possibility of significant interference with the bankruptcy estate.
Tentative Ruling:
For the foregoing reasons, the Court is inclined to DENY the motion. APPEARANCES REQUIRED.
Debtor(s):
AMANDO MORALES Represented By William D Gurney
Joint Debtor(s):
ALICIA MALDONADO JIMENEZ Represented By
William D Gurney
10:00 AM
Movant(s):
Eduardo E. Guerrero Represented By Christopher J Langley
Trustee(s):
Charles W Daff (TR) Represented By Brandon J Iskander Lynda T Bui
10:00 AM
MOVANT: ALASKA USA FEDERAL CREDIT UNION
EH
Docket 26
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Daniel Reyes Represented By
Rebecca Tomilowitz
Movant(s):
Alaska USA Federal Credit Union Represented By
Cassandra J Richey
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICAN HONDA FINANCE CORPORATION
EH
Docket 34
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Brian Scott Bunnell Represented By Todd L Turoci
Joint Debtor(s):
Wendi Lynn Bunnell Represented By Todd L Turoci
Movant(s):
AMERICAN HONDA FINANCE Represented By
10:00 AM
Trustee(s):
Vincent V Frounjian
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CONSUMER PORTFOLIO SERVICES, INC.
From: 9/19/17, 10/3/17 EH
Docket 36
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under
¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Beatriz Esqueda Represented By Rebecca Tomilowitz
Movant(s):
Consumer Portfolio Services, Inc. Represented By
Ryan M Davies
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: PACIFIC COMMUNITY CREDIT UNION
From: 9/26/17, 10/3/17 EH
Docket 45
09/26/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT ¶¶ 3 and 12. Request for APO DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Movant(s):
PACIFIC COMMUNITY CREDIT Represented By
Nichole Glowin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SETERUS, INC.
EH
Docket 45
Service is Proper Opposition: Yes
Debtors had two bankruptcy cases dismissed in the year prior to filing the instant case. The first case was dismissed on July 25, 2016, for failure to make plan payments. The second case was dismissed on October 24, 2016, for failure to file information.
11 U.S.C. § 362(c)(4)(A)(ii) provides that if a debtor had two previous cases dismissed within a year of the instant case, then, absent court order, the automatic stay does not go into effect. Here, the Court did not impose the automatic stay, and, therefore, the automatic stay was never effective in this case. Therefore, the Court is inclined to GRANT the motion, confirming that the automatic stay is not in effect.
APPEARANCES REQUIRED.
10:00 AM
Debtor(s):
Bartholemew James Ratner Represented By
H Christopher Coburn
Joint Debtor(s):
Pamela J Armijo-Ratner Represented By
H Christopher Coburn
Movant(s):
SETERUS, INC. as the authorized Represented By
James F Lewin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BANK OF AMERICA, N.A.
EH
Docket 52
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Eric S Kim Represented By
David L Speckman
Movant(s):
Bank of America, N.A. Represented By Christina J O
Trustee(s):
Howard B Grobstein (TR) Represented By Reem J Bello
10:00 AM
MOVANT: CIT BANK, N.A.
EH
Docket 38
Service is Proper Opposition: Yes
Parties to discuss adequate protection terms. APPEARANCES REQUIRED.
Debtor(s):
Jeanie Sullivan Represented By Christopher Hewitt
Movant(s):
CIT BANK, N.A. Represented By Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BAYVIEW LOAN SERVICING, LLC
EH
Docket 93
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
James Lloyd Walker Pro Se
Movant(s):
BAYVIEW LOAN SERVICING, Represented By
Edward G Schloss
Trustee(s):
Robert Whitmore (TR) Represented By Franklin C Adams
10:00 AM
MOVANT: WELLS FARGO BANK
EH
Docket 159
Service is Proper Opposition: Yes
The evidence presented by Debtor does not controvert the evidence presented by Movant, nor does Debtor contest that she is in default. Nor does Debtor provide evidence of value to establish an equity cushion. Subject to adequate protection discussions, the Court is inclined to GRANT the motion under § 362(d)(1) and as otherwise requested.
APPEARANCES REQUIRED.
Debtor(s):
Vonetta M Mays Represented By Christopher J Langley
Movant(s):
Wells Fargo Bank, N.A. Represented By Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
EH
Docket 86
Service is Proper Opposition: Limited
Subject to discuss from the parties regarding an adequate protection order, the Court is inclined to GRANT relief from stay pursuant to § 362(d)(1). GRANT waiver of 4001 (a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Jacob J Cannon Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Danielle M Cannon Represented By Lisa H Robinson
10:00 AM
Movant(s):
John F Brady
NATIONSTAR MORTGAGE LLC Represented By
Andrew Kussmaul Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
EH
Docket 103
- NONE LISTED -
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
Movant(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
2:00 PM
Docket 303
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
From: 5/30/17, 6/19/17, 7/24/17, 9/26/17 Also #37
EH
Docket 37
PROCEDURAL BACKGROUND
On September 20, 2013, ASR Constructors, Inc. ("Debtor") filed a Chapter 11 voluntary petition. On October 23, 2013, related entities Another Meridian Company, LLC ("Meridian") and Inland Machinery, Inc. ("Inland") (collectively, "Debtors") filed Chapter 11 voluntary petitions. On November 1, 2013, the Court ordered joint administration of the estates of Debtor, Meridian and Inland.
Prior to the filing of the bankruptcy petition, Gotte Electric, Inc. ("Gotte") filed a state court complaint against Debtors and Federal Insurance Company ("FIC") to set aside a fraudulent transfer. Upon Debtor’s filing of a Chapter 11 petition, the action was removed to the bankruptcy court.
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On November 17, 2015, Debtors filed a motion to approve compromise. On November 24, 2015, UST filed an objection. On December 1, 2015, Insurance Company of the West ("ICW") filed an objection. After further briefing, the Court granted the motion to approve the compromise, and an order was entered approving the compromise on December 30, 2015.
On January 8, 2016, Debtors’ bankruptcy cases were dismissed. On February 13, 2017, Debtors’ bankruptcy cases were reopened. On March 14, 2017, upon request by Debtors the Court modified the seventh paragraph of its dismissal order as follows:
7. Except for the claims asserted in the declaratory relief action filed by ICW and/or Gotte pursuant to the Settlement Agreement, this Court shall retain exclusive jurisdiction to enforce the provisions of the Settlement Agreement, 9019 Order and this Dismissal Order and to resolve any dispute(s) concerning the Settlement Agreement, the 9019 Order and/or this Dismissal Order or the rights and duties of the parties hereunder or thereunder or any issues relating to the Settlement Agreement, the 9019 Order and/or this Dismissal Order, including, interpretation of the terms, conditions and provisions thereof, and all issues and disputes arising in connection with the relief authorized under Settlement Agreement, the 9019 Order and/or this Dismissal Order.
On March 17, 2017, Debtors filed a complaint in interpleader against Gotte and other parties. On May 8, 2017, Debtors filed a motion for authorization to deposit disputed funds and for interpleader relief. At a status conference on May 16, 2017, the Court expressed some concerns with the relief requested, and Debtors filed a modification to motion on June 5, 2017.
FACTUAL BACKGROUND
Debtor was a general contractor. In connection with Debtor’s work, FIC issues a number of surety performance and payment bonds on Debtor’s behalf. Debtors and
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their principals, in return, executed various indemnity and collateral agreements in favor of FIC.
Gotte was Debtor’s sub-contractor on three projects. On May 28, 2013, Gotte obtained a state court judgment against Debtor in the amount of $6,655,486.47, and on July 1, 2013, Gotte filed a UCC judgment lien against Debtor. On February 1, 2010, while the state court litigation was pending, Debtor transferred certain real property (the "Meridian Property") to Meridian for $3,100,000 and certain equipment and machinery (the "Equipment") to Inland for $3,780,458. These transfers were the subject the of the fraudulent transfer action commenced by Gotte. FIC has a lien on the Meridian Property, the Equipment, and Debtor’s accounts receivable.
On December 17, 2013, the Court authorized the sale of that part of the Meridian Property located in the city of Riverside for a purchase price of $3,150,000. Net proceeds of the sale, totaling $1,790,000 were held in a DIP account, subject to the claims of Gotte, FIC, Berkley Regional Insurance Company ("BRIC") and ICW. Additionally, net proceeds of the sale of certain real property located in Phelan, totaling $50,000, were held in a DIP account subject to the claims of FIC and BRIC, and net proceeds of an auction sale of the Equipment, totaling $1,006,000, were held in a DIP account subject to the lien of FIC. The total amount of funds on hand at the time of the filing of the compromise motion was $3,152,360.28.
As part of the compromise motion, FIC agreed to grant a carve-out from its collateral in the amount of $200,000 plus 45% of net proceeds from the sale of the remainder of the Meridian Property. The various parties’ respective rights to the FIC carve-out were not determined by the compromise motion.
On December 24, 2015, ICW filed a complaint in state court for declaratory relief and interpleader. On February 9, 2016, the IRS filed a notice of removal, removing the case to federal district court. On May 24, 2016, the district court dismissed the case upon motion of the IRS for lack of subject matter jurisdiction. As such, it is not clear that the interpleader action can be heard in either state court or federal district court.
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DISCUSSION
Debtors request two categories of relief: (1) authority to deposit the funds constituting the FIC carve-out (the "Funds") into the court registry; and (2) various interpleader relief.
Deposit of Funds in Court Registry
Fed. R. Bankr. P. Rule 7067 incorporates Fed. R. Civ. P. Rule 67. FRCP Rule 67(a) states:
If any part of the relief sought is a money judgment or the disposition of a sum of money or some other deliverable thing, a party – on notice to every other party and by leave of court – may deposit with the court all or part of the money or thing, whether or not that party claims any of it. The depositing party must deliver to the clerk a copy of the order permitting deposit.
FRCP Rule 67 is properly invoked when there is a live dispute regarding the entitlement to the funds in question. See generally Alstom Caribe, Inc. v. George P. Reintjes Co., Inc., 484 F.3d 106, 113 (1st Cir. 2007) ("The core purpose of Rule 67 is to relieve a party who holds a contested fund from responsibility for disbursement of that fund among those claiming some entitlement thereto."); see also Garrick v.
Weaver, 888 F.2d 687, 694 (10th Cir. 1989) ("The language of Rule 67 leaves to the discretion of the district court the decision as to whether to permit the deposit of funds in court. The magistrate acted well within his discretionary authority in allowing
the funds to be paid into court and excusing the defendants. His decision both ensured that the settlement fund would be available for disbursement and facilitated judicial
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economy by permitting the defendants, who no longer had an interest in the funds or in these proceedings, to withdraw.").
Here, there is clearly a live dispute regarding entitlement to the Funds.
Interpleader Relief
Debtors’ original motion requested that the Court grant the following five forms of relief: (1) discharge Debtors from further liability to the named defendants; (2) dismissal of Debtors, with prejudice, from the adversary; (3) entry of a permanent injunction preventing Defendants from asserting claims against Debtor relating to the settlement funds; (4) requiring the named defendants to litigate between themselves;
an award of costs and reasonable attorney fees. Debtors’ modification to the motion withdrew the last request, and modified the second request to reduce Debtors’ role in the action to that of a monitoring capacity.
"In an interpleader action, the ‘stakeholder’ of a sum of money sues all those who might have claim to the money, deposits the money with the district court, and lets the claimants litigate who is entitled to the money." Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1265 (9th Cir. 1992). Procedurally,
An interpleader action typically involves two stages. In the first stage, the district court decides whether the requirements for rule or statutory interpleader action have been met by determining if there is a single fund at issue and whether there are adverse claimants to that fund. If the district court finds that the interpleader action has been properly brought the district court will then make a determination of the respective rights of the claimants.
Rhoades v. Casey, 196 F.3d 592, 600 (5th Cir. 1999) (citations omitted).
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Here, Debtors are relying on rule interpleader. Fed. R. Civ. P. Rule 22(a)(1), incorporated into bankruptcy proceedings by Fed. R. Bankr. P. Rule 7022(a), states:
the claims of the several claimants, or the titles on which their claims depend, lack a common origin or are adverse and independent rather than identical; or
the plaintiff denies liability in whole or in part to any or all of the claimants.
Here, the various defendants’ actual or potential claims to the Funds may expose Debtors to multiple liability. Therefore, an interpleader action is appropriate.
In cases where an interpleader action is appropriate, Collier states the following:
By turning over the fund or the property as directed by the court, the plaintiff may be discharged from the proceeding and any further liability. There may be an injunction issued to prevent the adverse claimants from further pursuing the stakeholder. On a finding that interpleader is proper, the court will then enter an order requiring the claimants to the fund or property to interplead.
10 Collier on Bankruptcy ¶ 7022.01 (16th ed. 2013); see also 28 U.S.C. § 2361. Here, Debtors’ requests closely track the language identified in Collier’s and, in the absence of opposition, appear appropriate here.
Jurisdictional Statement
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Bankruptcy Court Jurisdiction
Nevertheless, the Court must determine whether it has subject matter jurisdiction. See, e.g., In re Strawberry, 464 B.R. 443, 447 (Bankr. N.D. Fla. 2012). This complaint in interpleader was filed in a dismissed bankruptcy case and would result in litigation over non-bankruptcy claims between non-debtor parties.
28 U.S.C. § 157 provides for four categories of cases which the district court may refer to the bankruptcy court: (1) cases under title 11; (2) proceedings arising under title 11; (3) proceedings arising in a case under title 11; and (4) proceedings related to a case under title 11. See, e.g., In re S&M Constructors, Inc., 144 B.R. 855, 858 (Bankr. W.D. Mo. 1992). Additionally, 28 U.S.C. § 157(b) divides matters into core and non-core proceedings.
The first category, cases under title 11, refers to the bankruptcy case commenced by the filing of the petition. See, e.g., In re Wood, 825 F.2d 90, 92 (5th Cir. 1987). This category is inapplicable here, as the matter at issue is a complaint in interpleader.
The second category, proceedings arising under title 11, refers to those actions that are expressly created by title 11. See, e.g., In re Wolverine Radio Co., Inc., 930 F.2d 1132, 1141, n.14 (6th Cir. 1991). This category is inapplicable here – the underlying liability is premised upon state law claims.
The third category1, proceedings arising in a case under title 11, refers to claims that, although not created by title 11, would have no existence absent the bankruptcy, such as administrative matters. See, e.g., In re Repository Techs., Inc., 601 F.3d 710, 719 (7th Cir. 2010). This category is inapplicable here.
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The fourth category, proceedings related to a case under title 11, contains two different subsets: (1) causes of action owned by the debtor that become property of the estate under § 541; and (2) suits between third parties which in one way or another affect the administration of the bankruptcy case. Id. It is only the latter category that is potentially invoked by this proceeding.
The primary test for related to jurisdiction is the Third Circuit’s Pacor test:
The usual articulation of the test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.
Thus, the proceeding need not necessarily be against the debtor or against the debtor’s property. An action is related to bankruptcy if the outcome could alter the debtor’s rights, liabilities, options, or freedom of action . . . and which in any way impacts upon the handling and administration of the bankrupt estate.
Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3rd Cir. 1984). The Supreme Court previously acknowledged the prevalence of the Pacor test:
In attempting to strike an appropriate balance, the Third Circuit in Pacor, Inc.
v. Higgins, 743 F.2d 984 (1984), devised the following test for determining the existence of "related to" jurisdiction:
[Excerpt quoted above] . . .
The First, Fourth, Fifth, Sixth, Eight, Ninth, Tenth, and Eleventh Circuits have adopted the Pacor test with little or no variation. The Second and Seventh Circuits, on the other hand, seem to have adopted a slightly different test. But whatever test is used, these cases make clear that bankruptcy courts have no
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jurisdiction over proceedings that have no effect on the estate of the debtor.
Celotex Corp. v. Edwards, 514 U.S. 300, 308 n.6 (1995) (citations omitted).
The Ninth Circuit has recently reiterated its approval of the Pacor test for pre- confirmation matters:
The test for post-confirmation "related to" jurisdiction was modified from the seminal pre-confirmation Pacor test for "related to" jurisdiction, which had been previously adopted by the Ninth Circuit in In re Fietz, 852 F.2d 455, 457 (9th Cir. 1988). Surveying the courts that had applied a limited version of the Pacor test in the post-confirmation context, we recognized that the Pacor test of whether the outcome of the proceeding could conceivably have any effect on the estate being administered in bankruptcy . . . If the outcome could alter the debtor’s rights, liabilities, options, or freedom of action . . . and which in any way impacts upon the handling and administration of the bankruptcy estate was somewhat overbroad in the post-confirmation context.
In re Wilshire Courtyard, 729 F.3d 1279, 1287 (9th Cir. 2013) (citations and quotations omitted).
First, it is unclear whether the complaint in interpleader would affect the administration of the bankruptcy estate, if a bankruptcy estate was being administered, Second, the Court must consider whether it can ever have "related to" jurisdiction in an action filed in a dismissed case because there is no estate to administer, and, consequently, such an action cannot affect administration of the estate.
The Effect of Dismissal on "Related to" Jurisdiction
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The Pacor test includes two requirements: (1) the action must alter the rights or obligations of the debtor; and (2) the action must have an effect on the administration of the estate. See, e.g., In re Bass, 171 F.3d 1016, 1022 (5th Cir. 1999). This second prong becomes an issue when an action is filed in a dismissed case. See, e.g., id. ("The second prong, however, is problematical. Although the injunction would have an impact on the Debtor, it could not have any effect whatsoever on his estate in bankruptcy or its administration. First and foremost, such an estate no longer exists.").
A different situation arises when, after an action is commenced, the underlying bankruptcy case is dismissed. Courts have generally concluded that in such a situation, retention of jurisdiction is discretionary, and based on principles of equity and judicial economy. See, e.g., In re Smith, 866 F.2d 576, 580 (3rd Cir. 1989) ("Drawing upon an analogy to the disposition of ancillary and pendent claims, the courts have held that they may consider a number of factors to determine whether jurisdiction should be retained."). Such a situation is, however, fundamentally different from the situation here. See id. ("Appellees fail, however, to distinguish between the determination of the existence of jurisdiction at the outset of these proceedings and the determination of whether ‘related’ claims should be dismissed with the dismissal of the bankruptcy case or the discharge of the debtor."); In re Fietz, 852 F2.d 455, 457 n.2 (9th Cir. 1988) ("Subject matter jurisdiction should be determined as of the date that the complaint, or in this case the cross-claim, was filed.").
In developing a standard for when a bankruptcy court should retain jurisdiction following the dismissal of the underlying case, courts have analogized the situation to a district court’s retention of pendent state claims following dismissal of the federal claims. See, e.g., In re Porges, 44 F.3d 159, 162-63 (2nd Cir. 1995); In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992); In re Casamont Investors, Ltd., 196 B.R. 517, 522 (B.A.P. 9th Cir. 1996) ("In determining whether the bankruptcy court abused its discretion by retaining jurisdiction over related proceedings, the Ninth Circuit and several other circuits have analogized to cases concerning the propriety of district courts retaining jurisdiction over pendent state law claims after federal claims have been dismissed."). Applying that analogy and the applicable standard to the matter at issue here reveals the fundamental problem: a district court can never exercise pendent jurisdiction over state law claims when, at their commencement, there is no
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existing federal claim for the state claims to supplement. In the bankruptcy context, the Court cannot exercise related to jurisdiction if there is no bankruptcy case for the complaint to relate to.
Ancillary or Retained Jurisdiction
Attempts have been made to avoid this issue by arguing for the existence of supplemental or retained jurisdiction. See In re Bass, 171 F.3d 1016, 1023-242 (5th Cir. 1999) (supplemental) ("Congress has gone to great lengths to determine what proceedings may be tried by bankruptcy courts, and the exercise of ancillary and pendent jurisdiction by bankruptcy courts could subsume the more restrictive ‘related to’ and ‘arising in’ jurisdiction, such that the latter would be rendered substantially, if not entirely, superfluous."); id. at 1025 (retained) ("[B]efore a court can exercise its discretion to ‘retain’ jurisdiction over a ‘related proceeding,’ the court must have had jurisdiction over that proceeding in the first place. The Denneys did not file their suit in Texas until after the bankruptcy case in Utah had been closed. From a purely temporal standpoint, there was no proceeding over which bankruptcy court jurisdiction could be ‘retained.’"); see also In re Morris, 950 F.2d 1531, 1534 (11th Cir. 1992) (same). The Ninth Circuit has previously discussed the application of supplemental, or ancillary, jurisdiction in the context of interpreting a settlement agreement in a Chapter 11 structured dismissal:
Here, when Sea Hawk filed its adversary proceeding, VFDA’s Chapter 11 case had been dismissed and a final decree entered. . . .
The bankruptcy court has no role in the resolution of the creditors’ dispute, and it is involved only fortuitously because the dispute implicates the terms of a settlement agreement approved by the court as a precondition of the dismissal of VFDA’s bankruptcy. . . .
The bankruptcy court did not consider dismissal of VFDA’s bankruptcy to automatically divest it of jurisdiction over a related case. It reasoned that after
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dismissal, the court has discretion to retain jurisdiction over a related proceeding, citing In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992). . . .
Carraher does not support the bankruptcy court’s decision. It stands for the proposition that a bankruptcy court may retain jurisdiction over a related proceeding pending at the time of the dismissal of the bankruptcy case. It does not support the assertion of bankruptcy jurisdiction over a proceeding initiated subsequent to the dismissal of the bankruptcy case.
In re Valdez Fisheries Dev. Ass’n, Inc., 439 F.3d 545, 547-48 (9th Cir. 2006). Valdez Fisheries, however, made clear that the result may have been different had the Court’s dismissal order explicitly retained jurisdiction over the dispute in question. See id. at 549 ("Ancillary jurisdiction may rest on one of two bases: (1) to permit disposition by a single court of factually interdependent claims, and (2) to enable a court to vindicate its authority and effectuate its decrees.") (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 79-80 (1994)). The second purpose of Kokkonen’s retained, related-to jurisdiction is at issue here.
Nevertheless, the second prong of the Kokkonen test has its limits. See, e.g., In re Ray, 624 F.3d 1124, 1136 (9th Cir. 2010) ("In short, hearing a breach of contract claim predicated on evidence that came to light after a bankruptcy case had closed, its creditors paid, and the debtor discharged, stretches the limits of the bankruptcy court’s ancillary jurisdiction too far, going beyond what is necessary for the bankruptcy court to ‘effectuate its decrees." . . . Reopening of the bankruptcy case is rare, and only used when necessary to resolve bankruptcy issues, not to adjudicate state law claims that can be adjudicated in state court.") (citation omitted). Importantly, an explicit retention of jurisdiction is only valid to the extent that jurisdiction is retained over claims that could have been heard at the time that jurisdiction was retained. See, e.g., In re Nobel Group, Inc., 529 B.R. 284, 292 (Bankr. N.D. Cal. 2015). To conclude otherwise would be to allow bankruptcy courts to craft their own jurisdictional authority. See, e.g., In re Resorts Int’l, Inc., 372 F.3d 154, 161 (3rd Cir. 2004) ("[N] either the bankruptcy court nor the parties can write their own jurisdictional ticket.
When a court lacks subject matter jurisdiction over a dispute, the parties cannot create it by agreement even in a plan of reorganization.").
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First, there appears to be a problem in that jurisdiction was not conferred until the time of the dismissal order. Here, the retention of jurisdiction over the interpleader action was concurrent with dismissal of the case, and, as such, the claim for which jurisdiction was retained could not have been filed until after the case was dismissed. As stated above, related to jurisdiction is determined at the time the claim is filed, but, importantly, is premised upon the existence of a case that the claim can be related to. Therefore, because the jurisdiction in question was only conferred in a dismissal order, there would no existing bankruptcy case at the time an interpleader action could have been filed, so as to confer related to jurisdiction. The Court is aware of the confusing nature of the issue.
Second, even if the retention of jurisdiction had been in the settlement order, and, as such, the retention of jurisdiction would have arisen in the context of an existing case, allowing related to jurisdiction to exist2, it would be unclear, possibly unlikely, that the Court would have subject matter jurisdiction over the complaint in interpleader.
As briefly alluded to in section B, supra, the Ninth Circuit has limited the Pacor "related to" test to pre-confirmation matters, and has imposed a more demanding test for post-confirmation matters. See In re Pegasus Gold Corp., 394 F.3d 1189, 1194 (9th Cir. 2005). The rationale for this distinction is that the bankruptcy estate ceases to exist post confirmation. See generally id. Pegasus Gold, therefore, replaced the more liberal Pacor test with a "close nexus" test after the dissolution of the bankruptcy estate. See id. The "close nexus" test requires that the matter be directly affect the bankruptcy proceeding for subject matter jurisdiction to be present. See id. It is difficult to ascertain how the "close nexus" test could be satisfied when the basis for the complaint in interpleader, the settlement agreement, also contemplates that the bankruptcy proceedings will cease.
Furthermore, even if Debtors had modified the settlement order and could show that the "close nexus" test was satisfied, the pendent jurisdiction test alluded to in section B, supra, may also merit consideration. This test instructs the Court to consider the interests of "economy, convenience, fairness and comity." See In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992).
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The Court need not reach the "close nexus" or pendent jurisdiction tests at this point, however, for the following two reasons: (1) the modification of the dismissal order does not properly appear to confer jurisdiction on the Court, and (2) the settlement order expressly disclaims jurisdiction over the interpleader action.
TENTATIVE RULING
Based on the foregoing, the Court believes dismissal of the adversary for lack of subject matter jurisdiction is appropriate. The Court will consider whether to, on its own motion, amend the dismissal order to delete the retention of jurisdiction, and at the request of the parties, may continue the hearing for further briefing in light of the foregoing.
APPEARANCES REQUIRED.
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Represented By Kevin R Carlin
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By
2:00 PM
Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
Employment Development Represented By
Elisa B Wolfe-Donato
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Movant(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Melissa Davis Lowe
Another Meridian Company, LLC Represented By
James C Bastian Jr Melissa Davis Lowe
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Melissa Davis Lowe
Another Meridian Company, LLC Represented By
James C Bastian Jr Melissa Davis Lowe
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
Adv#: 6:17-01059 ASR Constructors Inc a California Corporation et a v. Gotte Electric, Inc. et
From: 5/16/17, 6/19/17, 7/24/17, 9/26/17 Also #36
EH
Docket 1
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Defendant(s):
UNITED STATES OF AMERICA Represented By
Charles Parker Western Alliance Bank, an Arizona Pro Se
Carlin Law Group APC Represented By
2:00 PM
Kevin R Carlin
Bangerter Frazier & Graff PC Represented By Daniel P Wilde
Ledcor Construction, Inc., a Represented By Daniel P Scholz
Insurance Company Of The West Represented By
Jennifer Leland David B Shemano
Gotte Electric, Inc. Pro Se
Employment Development Represented By
Elisa B Wolfe-Donato
Steven Schonder Pro Se
Angela Denise McKnight Pro Se
Plaintiff(s):
Inland Machinery, Inc. Represented By James C Bastian Jr
Melissa Davis Lowe
Another Meridian Company, LLC Represented By
James C Bastian Jr Melissa Davis Lowe
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
Also #39 - #41
EH
Docket 671
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
Movant(s):
Inland Machinery, Inc. Represented By Melissa Davis Lowe James C Bastian Jr
Another Meridian Company, LLC Represented By
Melissa Davis Lowe James C Bastian Jr
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
From: 3/7/17, 7/11/17, 7/24/17, 9/26/17 Also #38 - #41
EH
Docket 630
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
From: 3/7/17, 7/11/17, 7/24/17, 9/26/17 Also #38 - #41
EH
Docket 630
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
2:00 PM
From: 3/7/17, 7/11/17, 7/24/17, 9/26/17 Also #38 - #40
EH
Docket 630
- NONE LISTED -
Debtor(s):
ASR Constructors Inc a California Represented By
James C Bastian Jr Melissa Davis Lowe
11:00 AM
Docket 85
10/25/2017
No opposition has been filed.
Service was Proper.
The applications for compensation of the Trustee and Counsel for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 14,124.59 Trustee Expenses: $ 91.14
Attorney Fees: $ 27,778.50 Attorney Costs: $ 371.58
Bankruptcy Court: $350
Reid & Hellyer Trust Account: $160,000 Troy Brenes: $2,212.57
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Jesus M. Tapia Represented By Michael Smith
Trustee(s):
Robert Whitmore (TR) Represented By
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Douglas A Plazak Troy A Brenes
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Docket 81
10/25/17
No opposition has been filed.
Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,838.00 Trustee Expenses: $ 256.93
Accountant Fees: $ 1,000.00
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Donna Smith Represented By
Julie J Villalobos
Trustee(s):
Todd A. Frealy (TR) Pro Se
11:00 AM
Docket 77
10/25/17
No opposition has been filed.
Service was Proper.
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 2,981.31 Attorney Fees: $ 9,626.26 Accountant Fees: $ 1,862.50
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Taik Hoon Kim Represented By Arnold H Wuhrman
Trustee(s):
Howard B Grobstein (TR) Represented By Rosendo Gonzalez
11:00 AM
Docket 41
10/25/17
No opposition has been filed.
Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,322.00 Trustee Expenses: $ 116.82
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Ryan David Miller Represented By Andrew Nguyen
Joint Debtor(s):
Courtney Renee Miller Represented By Andrew Nguyen
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
Docket 29
10/25/17
No opposition has been filed.
Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,318.60
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Alfonso Garibay Represented By
James Geoffrey Beirne
Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
Docket 18
10/25/17
No opposition has been filed.
Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,067.00 Trustee Expenses: $ 27.00
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Maria Elena Zuniga Represented By Candace J Arroyo
Trustee(s):
Larry D Simons (TR) Pro Se
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EH
Docket 22
BACKGROUND
On January 24, 2010, Scott & Karen Bosco ("Debtors") filed a Chapter 7 voluntary petition. On May 11, 2011, Debtors received a discharge, and on May 26, 2011, the case was closed.
On October 19, 2016, the case was reopened upon motion of UST. On March 14, 2017, Trustee filed an application to employ Aylstock, Witkin, Kreis & Overholtz ("Aylstock") as special counsel. On July 28, 2017, Trustee amended the application to request the employment of the Pulaski Law Firm, Osborne & Associates, and Anapol Weiss in addition to Aylstock. After originally filing the application on negative notice, the matter was set for hearing on August 23, 2017.
DISCUSSION
Trustee’s application refers to § 327(e), which states:
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The trustee, with the court’s approval, may employ, for a specified special purpose, other than to represent the trustee in conducting the case, an attorney that has represented the debtor, if in the best interest of the estate, and if such attorney does not represent or hold any interest adverse to the debtor or to the estate with respect to the matter on which such attorney is to be employed.
While Trustee has included the required statements of disinterestedness, it is unclear why it is necessary to employ four law firms. Specifically, the application does not delineate the tasks and responsibility of the different law firms; indeed, each declaration is identical in so far as it describes the tasks to be accomplished. Nor does the application discuss the history of the litigation or each of the law firms’ previous roles. Additionally, each of the four declarations states that the law firm of the declarant shall be entitled to a 40% contingency fee, which is obviously impossible.
TENTATIVE RULING
Trustee to explain the nature of the proposed employment, the need for four separate counsel, and allocation of fees between counsel.
APPEARANCES REQUIRED.
Debtor(s):
Scott Leon Bosco Represented By Richard H Travis Dana Travis
Joint Debtor(s):
Karen Lee Bosco Represented By Richard H Travis
11:00 AM
Movant(s):
Dana Travis
Robert Whitmore (TR) Pro Se
Trustee(s):
Robert Whitmore (TR) Pro Se
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From: 9/2717 EH
Docket 213
BACKGROUND
On September 30, 2013, Charles Biehl ("Debtor") filed a Chapter 7 voluntary petition. On September 21, 2015, Trustee filed an adversary proceeding against Rene
Clements-Biehl ("Defendant") for: (1) avoidance and recovery of intentional fraudulent transfer; (2) avoidance and recovery of constructively fraudulent transfer;
(3) avoidance and recovery of preferential transfer; (4) disallowance of claims; (5) unjust enrichment; (6) declaratory relief. The subject of the adversary proceeding was certain real property located at 6 Dover Ct., Rancho Mirage, CA 92270 and 3338 Tempe Dr., Huntington Beach, CA 92649, and certain furniture located therein.
According to Trustee, pursuant to a marital settlement agreement, a state court entered a judgment confirming a property division on October 30, 2012. Later, on November 21, 2012, Debtor transferred to Defendant the real property located in Huntington Beach pursuant to an interspousal grant deed.
On August 15, 2017, Trustee filed a motion to approve compromise pursuant to Fed.
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R. Bankr. P. Rule 9019. Trustee proposes to settle the adversary proceeding for either payment of $229,000 within four months, or payment of $256,000 over four years. On September 7, 2017, the matter was set for hearing.
DISCUSSION
Fed. R. Bankr. P. Rule 9019 provides that:
On motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct.
The Ninth Circuit Court of Appeals have previously outlined the factors to be considered in approving a compromise pursuant to Rule 9019: (1) the probability of success in the litigation; (2) the difficulties to be encountered in the matter of collection; (3) the complexity, expense, inconvenience and delay of litigation; and (4) the interest of creditors with deference to their reasonable. See In re A&C Props., 784 F.2d 1377, 1381 (9th Cir. 1986). The listed factors assist the Court in determining "the fairness, reasonableness and adequacy of a proposed settlement agreement." Id.
Trustee’s compromise motion does not provide the information the Court requires to apply the A&C Properties factors or to assess the reasonableness of the settlement because the motion fails to identify the value of the Property or estimate the value of Debtor’s interest in the property, rendering it impossible to determining the reasonableness of the settlement amount.
In the absence of any evidence regarding the value of the Property or the value of the
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community estate’s interest in the Property, the Court cannot approve the compromise when only general arguments have advanced in support of the compromise.
TENTATIVE RULING
The Court is inclined to CONTINUE the matter for Trustee to file a supplemental declaration.
APPEARANCES REQUIRED.
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - DISBARRED - Steven L Bryson
Movant(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander Lynda T Bui
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr Elyza P Eshaghi Brandon J Iskander Lynda T Bui
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Docket 170
BACKGROUND
On November 14, 2013, Josue & Fabiola Luna ("Debtors") filed a Chapter 13 voluntary petition. On January 31, 2014, Debtors’ Chapter 13 plan was confirmed. After three plan modifications, Debtors converted their case to Chapter 7 on June 21, 2017.
On September 25, 2017, the Chapter 7 Trustee filed a motion for an extension of time to file a complaint objecting to discharge. Trustee states that at the initial Chapter 7 meeting of creditors he discovered that Debtor-husband transferred a 25% share in a closely held corporation to his father during the Chapter 13 case. Trustee states that, after continuing the meeting of creditors, Debtors failed to appear at the next two meetings. Trustee seeks an extension of the deadline to allow for further investigation into Debtors’ finances and to acquire additional documentation.
DISCUSSION
Fed. R. Bankr. P. Rule 4004(a) states:
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(1) In a chapter 7 case, a complaint, or a motion under § 727(a)(8) or (9) of the Code, objecting to the debtor’s discharge shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). In a chapter 11 case, the complaint shall be filed no later than the first date set for the hearing on confirmation. In a chapter 13 case, a motion objecting to the debtor’s discharge under § 1328(f) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). At least 28 days’ notice of the time so fixed shall be given to the United States trustee and all creditors as provided in Rule 2002(f) and (k) and to the trustee and the trustee’s attorney.
And Fed. R. Bankr. P. Rule 4004(b) states:
On motion of any party in interest, after notice and hearing, the court may for cause extend the time to object to discharge. Except as provided in subdivision (b)(2), the motion shall be filed before the time has expired.
A motion to extent the time to object to discharge may be filed after the time for objection has expired and before discharge is granted if (A) the objection is based on facts that, if learned after the discharge, would provide a basis for revocation under § 727(d) of the Code, and (B) the movant did not have knowledge of those facts in time to permit an objection. The motion shall be filed promptly after the movant discovers the facts on which the objection is based.
Here, Debtors’ delay in providing the information requested by the Trustee, and their absence at the last two meetings of creditors, constitutes sufficient cause to extend the deadline. See Collier on Bankruptcy ¶ 4004.03[2] (16th ed. 2013) ("A debtor’s delays in responding to discovery may be sufficient cause. Obviously, a delay in the meeting of creditors to a date close to or after the deadline may constitute such cause.") (citing In re McCormack, 244 B.R. 203 (Bankr. D. Conn. 2000)).
Moreover, Debtor’s failure to oppose shall be deemed consent to the relief requested pursuant to Local Rule 9013-1(h).
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TENTATIVE RULING
The Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Josue Luna Represented By
Jenny L Doling Summer M Shaw
Joint Debtor(s):
Fabiola Luna Represented By
Jenny L Doling Summer M Shaw
Movant(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
Trustee(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
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Also #11 - #13
EH
Docket 25
10/25/2017
Background:
On January 28, 2015, Crossfire Marketing Group ("Debtor") filed a Chapter 7 voluntary petition. On September 14, 2015, Durham Commercial Cleaning ("Creditor") filed a priority unsecured claim in the amount of $850.00 ("Claim 3"). On September 12, 2017, Trustee filed an objection to Claim 3, contending that Claim 3 is not entitled to priority status.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing
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upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Claim 3 states that it is entitled to priority status under 11 U.S.C. § 507(a)(7). 11
U.S.C. § 507(a)(7) states:
(a) The following expenses and claims have priority in the following order:
(7) Seventh, allowed unsecured claims of individuals, to the extent of
$2,850 for each such individual, arising from the deposit, before the commencement of the case, of money in connection with the purchase, lease, or rental of property, or the purchase of services, for the personal, family, or household use of such individuals, that were not delivered or provided.
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The above priority provision is clearly inapplicable here. First of all, Creditor is not an individual. Additionally, it appears that Creditor provided services to Debtor without receiving compensation. Section 507(a)(7) is applicable when a Creditor makes a payment towards property or services that are to be provided or performed by Debtor, which is not the case here.
Finally, the Court deems failure to oppose to be consent to the relief requested pursuant to Local Rule 9013-(1)(h).
Tentative Ruling
The Court is inclined to SUSTAIN the objection. Claim 3 is allowed as a general unsecured claim not entitled to priority status.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Crossfire Marketing Group LLC Represented By
Douglas A Plazak
Movant(s):
John P Pringle (TR) Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
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Also #10 - #13
EH
Docket 27
10/25/2017
Background:
On January 28, 2015, Crossfire Marketing Group ("Debtor") filed a Chapter 7 voluntary petition. On January 25, 2016, JP Upland ("Creditor") filed a general unsecured claim in the amount of $1,920.70 ("Claim 8"). The claims bar deadline was November 30, 2015. On September 12, 2017, Trustee filed an "objection" to Claim 8, contending that Claim 8 should be allowed as a timely filed claim.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing
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upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
11 U.S.C. § 726(a)(2) states:
(a) Except as provided in section 510 of this title, property of the estate shall be distributed –
second, in payment of any allowed unsecured claim, other than a claim of a kind specified in paragraph (1), (3), or (4) of this subsection, proof of which is –
timely filed under section 501(a) of this title;
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timely filed under section 501(b) or 501(c) of this title; or
tardily filed under section 501(a) of this title, if –
the creditor that holds such claim did not have notice or actual knowledge of the case in time for timely filing of a proof of such claim under section 501(a) of this title; and
proof of such claim is filed in time to permit payment of such claim
third, in payment of any allowed unsecured claim proof of which is tardily filed under section 501(a) of this title, other than a claim of the king specified in paragraph (2)(C) of this subsection
Here, there are two issues with Trustee’s request. First, Trustee’s request, made without reference to specific authority, that the claim be treated as timely filed is precluded by the above statue. While § 726(a)(2) allows tardily filed claims to be treated equally with timely filed claims in certain circumstances, here Trustee is asking the Court to allow an untimely claim as timely, when her presumably should be requesting the untimely claim be paid pro rata pursuant to § 726(a)(2)(C)(i). Second, to that point, there is no evidence upon which the Court could conclude that the requirements of § 726(a)(2)(C)(i) have been satisfied. Specifically, Creditor clearly received notice of the bankruptcy filing at some point prior to the filing of the proof of claim. The record does not establish whether the time when Creditor received actual knowledge of the case was early enough to permit Creditor to file a timely proof of claim.
Rather, without more, it appears this claim should be subordinated pursuant to § 726 (a)(3).
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Tentative Ruling
The Court is inclined to OVERRULE the objection.
APPEARANCES REQUIRED.
Debtor(s):
Crossfire Marketing Group LLC Represented By
Douglas A Plazak
Movant(s):
John P Pringle (TR) Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
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Also #10 - #13
EH
Docket 31
10/25/2017
Background:
On January 28, 2015, Crossfire Marketing Group ("Debtor") filed a Chapter 7 voluntary petition. On January 26, 2016, Sasha Wilson ("Creditor") filed a general unsecured claim in the amount of $1,235 ("Claim 9"). The claims bar deadline was November 30, 2015. On September 13, 2017, Trustee filed an "objection" to Claim 9, contending that Claim 9 should be allowed as a timely filed claim.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing
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upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
11 U.S.C. § 726(a)(2) states:
(a) Except as provided in section 510 of this title, property of the estate shall be distributed –
second, in payment of any allowed unsecured claim, other than a claim of a kind specified in paragraph (1), (3), or (4) of this subsection, proof of which is –
timely filed under section 501(a) of this title;
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timely filed under section 501(b) or 501(c) of this title; or
tardily filed under section 501(a) of this title, if –
the creditor that holds such claim did not have notice or actual knowledge of the case in time for timely filing of a proof of such claim under section 501(a) of this title; and
proof of such claim is filed in time to permit payment of such claim
third, in payment of any allowed unsecured claim proof of which is tardily filed under section 501(a) of this title, other than a claim of the king specified in paragraph (2)(C) of this subsection
Here, there are two issues with Trustee’s request. First, Trustee’s request, made without reference to specific authority, that the claim be treated as timely filed is precluded by the above statue. While § 726(a)(2) allows tardily filed claims to be treated equally with timely filed claims in certain circumstances, here Trustee is asking the Court to allow an untimely claim as timely, when her presumably should be requesting the untimely claim be paid pro rata pursuant to § 726(a)(2)(C)(i). Second, to that point, there is no evidence upon which the Court could conclude that the requirements of § 726(a)(2)(C)(i) have been satisfied. Specifically, Creditor clearly received notice of the bankruptcy filing at some point prior to the filing of the proof of claim. The record does not establish whether the time when Creditor received actual knowledge of the case was early enough to permit Creditor to file a timely proof of claim.
Rather, without more, it appears this claim should be subordinated pursuant to § 726 (a)(3).
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Tentative Ruling
The Court is inclined to OVERRULE the objection.
APPEARANCES REQUIRED.
Debtor(s):
Crossfire Marketing Group LLC Represented By
Douglas A Plazak
Movant(s):
John P Pringle (TR) Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
11:00 AM
Also #10 - #12
EH
Docket 34
10/25/2017
Background:
On January 28, 2015, Crossfire Marketing Group ("Debtor") filed a Chapter 7 voluntary petition. On March 28, 2016, Gary Wachs ("Creditor") filed a priority unsecured claim in the amount of $2,212.50 ("Claim 10"). The claims bar deadline was November 30, 2015. On September 13, 2017, Trustee filed an "objection" to Claim 10, contending that Claim 10 should be allowed as a timely filed claim but should not be entitled to priority status.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP
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9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
Regarding whether Claim 10 should be entitled to priority status, Claim 10 cites § 507 (a)(1)(C) as the basis for claiming priority status. That provision refers to administrative expenses of the trustee, and is clearly inapplicable to Claim 10.
11 U.S.C. § 726(a)(2) states:
(a) Except as provided in section 510 of this title, property of the estate
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shall be distributed –
second, in payment of any allowed unsecured claim, other than a
claim of a kind specified in paragraph (1), (3), or (4) of this subsection, proof of which is –
timely filed under section 501(a) of this title;
timely filed under section 501(b) or 501(c) of this title; or
tardily filed under section 501(a) of this title, if –
the creditor that holds such claim did not have notice or actual knowledge of the case in time for timely filing of a proof of such claim under section 501(a) of this title; and
proof of such claim is filed in time to permit payment of such claim
third, in payment of any allowed unsecured claim proof of which is tardily filed under section 501(a) of this title, other than a claim of the king specified in paragraph (2)(C) of this subsection
Here, there are two issues with Trustee’s request. First, Trustee’s request, made without reference to specific authority, that the claim be treated as timely filed is precluded by the above statue. While § 726(a)(2) allows tardily filed claims to be treated equally with timely filed claims in certain circumstances, here Trustee is asking the Court to allow an untimely claim as timely, when her presumably should be requesting the untimely claim be paid pro rata pursuant to § 726(a)(2)(C)(i). Second, to that point, there is no evidence upon which the Court could conclude that the requirements of § 726(a)(2)(C)(i) have been satisfied. Specifically, Creditor clearly received notice of the bankruptcy filing at some point prior to the filing of the proof of claim. The record does not establish whether the time when Creditor received actual knowledge of the case was early enough to permit Creditor to file a timely proof of
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claim.
Rather, without more, it appears this claim should be subordinated pursuant to § 726 (a)(3).
Tentative Ruling
The Court is inclined to SUSTAIN IN PART and OVERRULE IN PART the claim objection. Claim 10 is not entitled to priority and is not entitled to be treated as a timely filed claim.
APPEARANCES REQUIRED.
Debtor(s):
Crossfire Marketing Group LLC Represented By
Douglas A Plazak
Movant(s):
John P Pringle (TR) Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
11:00 AM
EH
Docket 93
BACKGROUND
On April 28, 2015, Home Security Stores, Inc. ("Debtor") filed a Chapter 7 voluntary petition. On May 28, 2015, the Court authorized the employment of Goe & Forsythe, LLP as general counsel to Trustee. On July 2, 2015, the Court authorized the employment of Hahn Fife & Co. LLP as accountants for Trustee. On July 17, 2015, the Court authorized the employment of Credit Management Association as auctioneer for Trustee.
On April 20, 2016, the Court extended the deadline for Trustee to file avoidance actions by six months, to October 28, 2017. On April 28, 2017, the Trustee filed an avoidance action. On October 4, 2017, Trustee filed another motion to extend the deadline for Trustee to file avoidance actions, requesting an additional six months.
At the initial meeting of creditors, the Trustee learned that Debtor’s two shareholders, Ralph and Stacy Winn (the "Winns"), had physically removed Debtor’s servers and some computers, on which Debtor’s financials were recorded. Trustee asserts that Debtor engaged in transfers to insiders after the cessation of its operations. After recovering the servers, Trustee learned that the information had been removed.
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Trustee has requested corporate records from Debtor, and while such records appear to have been received, Trustee contends that the records are vast, yet incomplete.
Trustee obtained an order authorizing a 2004 examination of Debtor’s non-bankruptcy attorney, Harry Histen ("Histen"), however, according to Trustee, it is not clear that Histen fully complied with the order. Trustee requests additional time to continue his investigation of Debtor’s finances.
DISCUSSION
11 U.S.C. § 546 requires that an avoidance action be brought within two years of the entry of the order for relief. That deadline, however, can be extended. See, e.g., In re United Ins. Mgmt., Inc., 14 F.3d 1380, 1384 (9th Cir. 1994). The current deadline in this case is April 28, 2017, which Trustee seeks to extend for six months to and including October 28, 2017.
Fed. R. Bankr. P. Rule 9006(b) states:
Except as provided in paragraphs (2) and (3) of this subdivision, when an act is required or allowed to be done at or within a specified period by these rules or by a notice given thereunder or by order of court, the court for cause shown may at any time in its discretion (1) with or without motion or notice order the period enlarged if the request therefor is made before the expiration of the period originally prescribed or as extended by a previous order or (2) on motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect.
The Court adopts a "for cause" standard when determining whether to utilized Fed. R. Bankr. P. Rule 9006(b) to extend a deadline. See In re Fundamental Long Term Care, Inc., 501 B.R. 784, 789 (Bankr. M.D. Fla. 2013). In this case, Trustee’s motion indicates that Histen and Debtor have not been fully cooperative with, and possibly obstructive of, Trustee’s attempt to investigate Debtor’s financial affairs. Trustee indicates that he does not yet have the information necessary to assess whether further
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avoidance actions are necessary, and it appears that such delay is through no fault of Trustee.
Moreover, the Court deems lack of opposition as consent to the relief requested pursuant to Local Rule 9013-(1)(h).
TENTATIVE RULING
For the foregoing reasons, the Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Home Security Stores, Inc. Represented By Winfield S Payne III
Movant(s):
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
Trustee(s):
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
11:00 AM
EH
Docket 140
BACKGROUND
On February 26, 2016, Sam & Greeta Dason ("Debtors") filed a Chapter 7 voluntary petition. On Schedule A, Debtors listed certain commercial real property located at 944 Via Lata, Colton, California 92324 (the "Property"). On February 22, 2017, the Court approved Trustee’s application to employ Ramsaur Law Office as general insolvency counsel. On March 6, 2017, the Court approved Trustee’s application to employ Glassratner Brokerage Services ("Broker") as real estate broker. On March 7, 2017, the Court approved Trustee’s application to employ Karl Anderson as accountant. On April 5, 2017, the Court approved a compromise between Debtors and Trustee relating to certain non-exempt assets.
On September 28, 2017, Trustee filed a motion for an order: (1) approving the sale of estate propery free and clear of liens pursuant to Bankruptcy Code § 363(b)(1) and (f), subject to overbids; (2) approving payment of real estate commission and other costs; and (3) granting related relief. The proposed sale price is $1,250,000. Trustee proposes to pay $100,000 as costs of sale, approximately $560,000 to Bank of America on the first trust deed (paying it off in full), approximately $90,000 to Bank of America on the second trust deed (paying it off in full), and approximately $50,000 on account of Bank of America’s cross-collateralization provision securing the total
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amount of $700,000.1 The remaining $450,000 will accrue to the bankruptcy estate.
DISCUSSION
Sale of Estate Property
11 U.S.C. § 363(b)(1) allows a trustee to sell property of the estate outside of the ordinary course, after notice and a hearing. A sale pursuant to § 363(b) requires a demonstration that the sale has a valid business justification. In re 240 North Brand Parners, Ltd., 200 B.R. 653, 659 (B.A.P. 9th Cir. 1996). "In approving any sale outside the ordinary course of business, the court must not only articulate a sufficient business reason for the sale, it must further find it is in the best interest of the estate,
i.e. it is fair and reasonable, that it has been given adequate marketing, that it has been negotiated and proposed in good faith, that the purchaser is proceeding in good faith, and that it is an "arms-length" transaction." In re Wilde Horse Enters., Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal.).
While Broker originally attempted to sell the property for $1,599,000, after more than six months of marketing the property, the best offer received by Broker is for
$1,250,000. Given the extensive marketing of the property, the fact that the sale appears to be a good faith, arms-length transaction, and the fact that the estate would receive $450,000 for distribution to unsecured creditors, the Court concludes that Trustee has articulated an adequate business reason for the sale.
Sale Free & Clear of Liens
11 U.S.C. § 363(f) (2010) states:
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The trustee may sell property under subsection (b) or (c) of this section free and clear of any interest in such property of an entity other than the estate, only if-
applicable nonbankruptcy law permits sale of such property free and clear of such interest;
such entity consents;
such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property;
such interest is in bona fide dispute; or
such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest.
Trustee contends that § 363(f)(3)-(4) are applicable. First, Trustee contends that aggregate value of all liens on the property is $700,000, which is exceeded by the purchase price of $1,250,000. Furthermore, Trustee contends that to the extent there are remaining unidentified and unresolved liens at closing, those liens are in bona fide dispute.
Because Trustee has established that § 363(f)(3) is applicable, and in the absence of any objection, Trustee has met its burden in securing a sale free and clear of liens.
14-Day Stay
Fed. R. Bankr. P. Rule 6004(h) states: "An order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise." The Court deems the absence of
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objections to be consent to the relief requested, pursuant to Local Rule 9013-(1)(h), and, therefore, will waive the stay of Rule 6004(h).
Miscellaneous
The Court has reviewed the remainder of Trustee’s miscellaneous requests, including for a determination that the buyer is a good faith purchaser under § 363(m). The Court is inclined to grant all requests, however, the Court notes that there is no evidence in the motion to support a § 363(m) determination.
TENTATIVE RULING
The Court is inclined to GRANT the motion in its entirety conditioned on Movant filing a declaration establishing that the purchaser is a good-faith purchaser under § 363(m).
APPEARANCES REQUIRED.
Debtor(s):
Sam Daniel Dason Represented By Robert G Uriarte
Joint Debtor(s):
Greeta Sam Dason Represented By Robert G Uriarte
Movant(s):
Lynda T. Bui (TR) Represented By
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Trustee(s):
Brett Ramsaur
Lynda T. Bui (TR) Represented By Brett Ramsaur
11:00 AM
EH
Docket 70
BACKGROUND
On May 19, 2017, Michelle Meredith ("Debtor") filed a Chapter 7 voluntary petition. On September 13, 2017, Trustee filed a motion for turnover, and, on September 28, 2017, Trustee’s attorney, Noreen Madoyan filed a supplemental declaration in support of the turnover motion. Trustee’s motion was granted at a hearing on October 4, 2017, and an order was entered to that effect on October 10, 2017.
On October 13, 2017, Debtor filed a motion to reconsider the supplemental declaration of Noreen Madoyan. On October 17, 2017, Trustee filed his opposition.
As a preliminary matter, the Court notes that service and notice of this motion is improper. Regarding notice, Debtor has scheduled this hearing on twelve days notice, instead of the twenty-one days required by Local Rule 9013-(1)(d)(2). Furthermore, Debtor has signed the proof of service herself, despite the fact that the proof of service begins by stating: "I am over the age of 18 and not a party to this bankruptcy case."
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DISCUSSION
Debtor’s motion primarily provides a detailed description of Debtor’s recent personal and financial circumstances, and an account that would appear to depict a pattern of negligent or unprofessional conduct by her attorney, Patricia Ashcraft. At the conclusion of Debtor’s motion, she requests that the court "reconsider any rulings made or orders issued based on the false allegations and misstatements made regarding my conduct, regard for this court and instructions issued by all parties involved with this case."
For several reasons, the Court deems it appropriate to continue this matter. First, Debtor has scheduled this hearing on shortened time without filing an application shortening time. Second, it is not clear what Debtor is requesting, and it appears Debtor is not sure herself. More specifically, the only docket entry that is explicitly objected to by Debtor is a declaration of Trustee’s attorney and, clearly, the Court’s cannot "reconsider" a declaration. While the Court could construe Debtor’s motion as a request to reconsider the turnover order, the Court declines to do so at this time for two reasons: (1) Debtor’s motion admits that she has not seen the order, at least as of the time of the filing of the motion, and thus, necessarily, it would be unclear what parts Debtor wants reconsidered; and (2) Debtor’s motion indicates that she is attempting to obtain new counsel.
TENTATIVE RULING
In light of the foregoing, the Court is inclined to continue the matter for Debtor to obtain new counsel or, alternatively, for Debtor to file a supplemental declaration explaining what ruling she wants the Court to reconsider.
APPEARANCES REQUIRED.
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Debtor(s):
Michelle Meredith Represented By Patricia M Ashcraft
Movant(s):
Michelle Meredith Represented By Patricia M Ashcraft
Trustee(s):
Howard B Grobstein (TR) Represented By Noreen A Madoyan
11:00 AM
EH
Docket 40
BACKGROUND
On August 15, 2016, Jesus & Yovana Guillen ("Debtors") filed a Chapter 7 voluntary petition. On November 23, 2016, UST filed a motion for order requiring Hugo Laguna ("Laguna") to pay fines to the UST, pay damages to Debtor, and disgorge fees received. On December 16, 2016, Debtors filed a declaration clarifying answers that were provided at the meeting of creditors. On December 22, 2016, Hugo Laguna ("Laguna") filed a late declaration. After continuing the hearing, Laguna and UST eventually stipulated to a resolution of the matter. The Court entered an order on April 19, 2017, requiring Laguna to pay $100 to Debtors within thirty days, and to pay $250 to UST within sixty days. Laguna was to file a compliance declaration regarding the former within forty-five days.
On May 23, 2017, the case was closed. On September 22, 2017, the case was reopened, and on September 25, 2017, UST filed a motion to fine and enjoin Laguna. UST asserts that Laguna has not complied with the Court order of April 19, 2017. On October 20, 2017, Laguna filed a late response. Laguna asserts that he paid $250 to UST shortly after filing the instant motion.
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DISCUSSION
11 U.S.C. § 110(j)(3) states: "The court, as part of its contempt power, may enjoin a bankruptcy petition preparer that has failed to comply with a previous order issued under this section. The injunction under this paragraph may be issued on the motion of the court, the trustee, or the United States trustee."
As noted by UST, in order to obtain civil contempt sanctions, a movant must demonstrate: (1) violation of a court order; (2) beyond substantial compliance; (3) not based on a good faith and reasonable interpretation of the order; and (4) by clear and convincing evidence. See Labor/Cmty. Strategy Ctr. V. L.A. Cnty. Metro. Transp.
Auth., 564 F.3d 1115, 1123 (9th Cir. 2009). As is evidenced by the docket and UST’s motion, Laguna has failed to comply with the Court’s order. The Court’s order was simple and unambiguous, and there is clear and convincing evidence that Laguna has not complied. Therefore, the Court will issue the requested injunction.
11 U.S.C. § 110(h)(5) states: "A bankruptcy petition preparer shall be fined not more than $500 for each failure to comply with a court order to turn over funds within 30 days of service of such order." Here, the Court’s order was entered over six months ago, and was straightforward, requiring payment of a total of $350. The order was entered in response to a stipulation between UST and Laguna, and, therefore, Laguna was certainly aware of the order.
TENTATIVE RULING
The Court is inclined to GRANT the motion to the extent that the motion seeks an injunction enjoining Laguna from providing bankruptcy preparer services. Parties to address Laguna’s compliance with payment obligations.
APPEARANCES REQUIRED.
11:00 AM
Debtor(s):
Jesus Ramirez Guillen Pro Se
Joint Debtor(s):
Yovana Mondagron Guillen Pro Se
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
Trustee(s):
Arturo Cisneros (TR) Pro Se
11:00 AM
EH
Docket 46
BACKGROUND
On January 11, 2017, Ariel Flores ("Debtor") filed a Chapter 7 voluntary petition. On January 30, 2017, the case was dismissed for failure to file case commencement documents. On February 10, 2017, the dismissal was vacated. On June 30, 2017, Debtor obtained a discharge. On August 11, 2017, the Court approved Trustee’s application to employ Neiman Realty as real estate broker.
On October 2, 2017, Trustee filed a motion for turnover of property. Trustee states that he e-mailed Debtor’s counsel on September 20, 2017 inquiring regarding access to certain real property located at 1254 Hardt Street, San Bernardino, CA 92408 (the "Property"). Trustee states that, in response, he received an e-mail stating that the employment application was not properly served, and that Debtor’s wife’s community property interest in the Property was not part of the bankruptcy estate. Based upon this response, Trustee requests authorization to put a lockbox on the Property.
On October 19, 2017, Debtor filed a late objection to Trustee’s motion.
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DISCUSSION
11 U.S.C. § 542(a) states:
Except as provided in subsection (c) or (d) of this section, an entity, other than a custodian, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title, or that the debtor may exempt under section 522 of this title, shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate.
The standard for a turnover action is well established:
"To prevail in a turnover action under § 542, the party seeking turnover must establish (1) that the property is or was in the possession, custody or control of an entity during the pendency of the case, (2) that the property may be used by the trustee in accordance with § 363 or exempted by the debtor under § 522; and (3) that the property has more than inconsequential value or benefit to the estate."
In re Bailey, 380 B.R. 486, 490 (B.A.P. 6th Cir. 2008); see also In re Newman, 487
B.R. 193 (B.A.P. 9th Cir. 2013). Here, it is clear that Debtor is in possession of the property, and Debtor has in fact exempted the property in part. The last prong is less than clear from the evidence before the Court. Debtor has claimed an exemption of
$20,000 in the property and identified a secured claim in the amount of $93,000. Debtor interest in the Property is identified in Schedules A, C, and D, as $110,339,
$123,000, and $145,000 respectively. Given the assertions in Trustee’s motion, it is unclear if that amount reflects only Debtor’s interest in the property or instead reflects the interests of Debtor and his wife.
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In any event, the most accurate determination of the value of an asset is established through marketing the asset. While the evidence before the Court does not conclusively establish that the Property has consequential value to the estate, there appears to be sufficient equity to warrant a sale. Therefore, the Court is inclined to grant Trustee’s request.
The exact nature of Trustee’s request is unclear. In his conclusion, Trustee requests "access" and
"cooperation." In the motion, Trustee provides more detail, however, that detail is not abundantly clear. While the Court is inclined to issue an order granting Trustee’s motion, further discussion about the contents of that order is required.
TENTATIVE RULING
The Court is inclined to GRANT the motion to allow Trustee sufficient access to market the property. Parties to further discuss details of the access requested.
APPEARANCES REQUIRED.
Debtor(s):
Ariel A. Flores Represented By Stefan R Pancer
Movant(s):
Larry D Simons (TR) Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
11:00 AM
11:00 AM
EH
Docket 29
BACKGROUND
On March 9, 2017, David & Carol Norwood ("Debtors") filed a Chapter 7 voluntary petition. On July 12, 2017, the Court approved Trustee’s application to employ Shulman Hodges & Bastian as counsel. On August 14, 2017, Debtors received a discharge.
On October 4, 2017, Trustee filed a motion for sale of property of the estate under Section 363(b). Trustee proposes to sell 10,000 shares (the "Shares") in a privately held penny stock company called Shades Unlimited back to Shades Unlimited for
$37,500.
DISCUSSION
Sale of Estate Property
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11 U.S.C. § 363(b)(1) allows a trustee to sell property of the estate outside of the ordinary course, after notice and a hearing. A sale pursuant to § 363(b) requires a demonstration that the sale has a valid business justification. In re 240 North Brand Parners, Ltd., 200 B.R. 653, 659 (B.A.P. 9th Cir. 1996). "In approving any sale outside the ordinary course of business, the court must not only articulate a sufficient business reason for the sale, it must further find it is in the best interest of the estate,
i.e. it is fair and reasonable, that it has been given adequate marketing, that it has been negotiated and proposed in good faith, that the purchaser is proceeding in good faith, and that it is an "arms-length" transaction." In re Wilde Horse Enters., Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal.).
Here, the unique nature of the asset to be sold renders makes a § 363(b) analysis implausible. Trustee concedes that there was no attempt to market the Shares, and that no appraisal of the shares was undertaken. The only evidence in the motion relating to the value of the shares is that Debtors purchased the Shares in 1992 for $10,000.1
Nevertheless, Trustee has notified creditors of the sale, has posted the sale on the Court’s website, and has opened up the sale to potential overbids. These actions appear appropriate and adequate for the circumstances. Furthermore, given that general unsecured claims presently total $27,281.24, it would appear that an increase in sale price may result in a surplus accruing to Debtors, who have been notified of the sale. Therefore, the Court finds that Trustee has articulated an adequate business reason for the sale.
14-Day Stay
Fed. R. Bankr. P. Rule 6004(h) states: "An order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise." The Court deems the absence of objections to be consent to the relief requested, pursuant to Local Rule 9013-(1)(h), and, therefore, will waive the stay of Rule 6004(h).
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Overbid Procedures
The Court has reviewed the proposed overbid procedures and finds the procedures to be reasonable. See, e.g., In re Fridman, 2016 WL 3961303 at *8 (B.A.P. 9th Cir. 2016) (reviewing overbid procedures for reasonableness).
Miscellaneous
The Court has reviewed the remainder of Trustee’s miscellaneous requests, including for a determination that the buyer is a good faith purchaser under § 363(m). The Court is inclined to grant all requests,
TENTATIVE RULING
The Court is inclined to GRANT the motion in its entirety.
APPEARANCES REQUIRED.
Debtor(s):
David Leroy Norwood Represented By Jenny L Doling
Joint Debtor(s):
Carol Ann Norwood Represented By Jenny L Doling
11:00 AM
Movant(s):
Karl T Anderson (TR) Represented By Brandon J Iskander Leonard M Shulman
Trustee(s):
Karl T Anderson (TR) Represented By Brandon J Iskander Leonard M Shulman
11:00 AM
Docket 19
BACKGROUND
On April 28, 2017, Paula Ayon ("Debtor") filed a Chapter 7 voluntary petition. On August 7, 2017, Debtor obtained a discharge, and the case was closed the following day.
On September 27, 2017, the case was reopened. On October 4, 2017, Ally Bank filed a motion to extend time to file a reaffirmation agreement.
DISCUSSION
Fed. R. Bankr. P. Rule 4008(a) states:
A reaffirmation agreement shall be filed no later than 60 days after the first date set for the meeting of creditors under §341(a) of the Code. The reaffirmation agreement shall be accompanied by a cover sheet, prepared as prescribed by the appropriate Official Form. The court may, at any time and in
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its discretion, enlarge the time to file a reaffirmation agreement.
Here, the initial meeting of creditors was scheduled for June 2, 2017, making the deadline to file a reaffirmation agreement August 1, 2017.
11 U.S.C. § 524(c)(1), however, states:
An agreement between a holder of a claim and the debtor, the consideration for which, in whole or in part, is based on a debt that is dischargeable in a case under this title is enforceable only to any extent enforceable under applicable nonbankruptcy law, whether or not discharge of such debt is waived, only if –
such agreement was made before the granting of the discharge under section 727, 1141, 1228, or 1328 of this title;
The Court’s ability to extend the time to file a reaffirmation agreement, pursuant to Rule 4008(a), is circumscribed by § 524(c)(1), which renders a reaffirmation non- enforceable if entered into after discharge. Fed. R. Bankr. P. Rule 4004(c)(1)(J) provides for an automatic delay of a discharge if a motion to enlarge the time to file a reaffirmation agreement is pending. The Federal Rules of Bankruptcy Procedure are subordinate to the Bankruptcy Code, and Rule 4008(a) must be interpreted as allowing the Court to extend the deadline stated in that rule, not the directive in the Bankruptcy Code that reaffirmation agreements must be entered into before discharge.
Furthermore, if Rule 4008(a) were to be interpreted to permit a court to approve a reaffirmation agreement entered into after discharge, Rule 4004(c)(1)(J) would be nonsensical.
TENTATIVE RULING
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The Court will DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Paula Ayon Represented By
Michael Smith
Movant(s):
Ally Bank Represented By
Adam N Barasch Brenda Groschen
Trustee(s):
Lynda T. Bui (TR) Pro Se
11:00 AM
EH
Docket 52
- NONE LISTED -
Debtor(s):
John E. Tackett Represented By Stefan R Pancer
Joint Debtor(s):
Ellen O. Tackett Represented By Stefan R Pancer
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
2:00 PM
Adv#: 6:17-01085 PRINGLE v. Winn et al
From: 7/12/17, 8/23/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Home Security Stores, Inc. Represented By Winfield S Payne III
Defendant(s):
Steven B Knoch Represented By Seth W Wiener
Stacy Winn Represented By
Douglas A Plazak
Natalia V Knoch Represented By Seth W Wiener
Ralph Winn Represented By
Douglas A Plazak
Sterling Security Service, Inc. Represented By
2:00 PM
Seth W Wiener
Plaintiff(s):
JOHN P PRINGLE Represented By Charity J Miller
Trustee(s):
John P Pringle (TR) Represented By Robert P Goe Charity J Miller
2:00 PM
Adv#: 6:17-01003 Cisneros v. Castro, Jr.
SETTLED
From: 3/8/17, 7/12/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Luz Ampelia Castro Represented By George P Hobson Jr
Defendant(s):
Enrique Castro Jr. Represented By
C Scott Rudibaugh
Plaintiff(s):
Arturo M. Cisneros Represented By Carmela Pagay Todd A Frealy
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:16-01295 Abbasi v. Surace et al
From: 2/15/17, 5/17/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Marym Qadir Represented By
Batkhand Zoljargal
Walie Qadir Represented By
Batkhand Zoljargal
Jaison Vally Surace Represented By Batkhand Zoljargal
Plaintiff(s):
Setareh Abbasi Represented By
Bruce Dannemeyer
2:00 PM
Trustee(s):
Bruce Dannemeyer
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:16-01200 Chicago Title Insurance Company v. Tyes
From: 10/19/16, 11/9/16, 1/11/17, 6/21/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Yolanda Yvette Tyes Pro Se
Defendant(s):
Yolanda Yvette Tyes Pro Se
Plaintiff(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:17-01138 Musharbash et al v. Musharbbash et al
EH
Docket 9
BACKGROUND
On April 11, 2017, Issa & Amal Musharbash ("Debtors") filed a Chapter 7 voluntary petition. On July 17, 2017, Phillip & Violette Musharbash ("Plaintiffs") filed a non- dischargeability complaint against Debtors. On August 16, 2017, Debtors filed an answer. On September 20, 2017, an initial status conference was held.
On September 29, 2017, Plaintiffs filed a motion for leave to file an amended complaint.
DISCUSSION
Fed. R. Civ. P. Rule 15(a)(1)-(2) states:
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A party may amend its pleading once as a matter of course within:
21 days after serving it, or
if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f) whichever is earlier
In all other cases, a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.
Here, Debtors’ answer was filed on August 12, 2017, and, therefore, the standard of Fed. R. Civ. P. Rule 15(a)(2) applies.
As is noted by Plaintiffs, "leave to amend should be granted unless amendment would cause prejudice to the opposing party, is sought in bad faith, is futile, or creates undue delay." Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992).
Here, Plaintiffs timely moved to amend their complaint after the initial status conference. There is no indication of bad faith on the part of Plaintiffs and Debtors have not argued that leave to amend would be prejudicial. The Federal Rules of Civil Procedure instruct the Court to "freely give leave when justice so requires." Here, in litigation between two pro se parties, when Plaintiff has promptly moved to amend the complaint early in litigation, and soon after learning of the pleading’s deficiency, justice requires leave to amend.
TENTATIVE RULING
The Court is inclined to GRANT the motion.
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APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Issa M Musharbash Represented By Brian J Soo-Hoo
Defendant(s):
Amal Musharbbash Pro Se
Issa M Musharbbash Pro Se
Joint Debtor(s):
Amal Issa Musharbash Represented By Brian J Soo-Hoo
Movant(s):
Violette Musharbash Pro Se
Phillip Musharbash Pro Se
Plaintiff(s):
Violette Musharbash Pro Se
Phillip Musharbash Pro Se
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
EH
Docket 90
PROCEDURAL BACKGROUND
On December 18, 2013, Nabeel Slaieh ("Debtor") filed a Chapter 7 voluntary petition. On August 31, 2016, Trustee filed a complaint against Debtor and Joanne Fraleigh (collectively, "Defendants") (Joanne Fraleigh individually, "Fraleigh") for avoidance and recovery of an unauthorized post-petition transfer. On December 16, 2016, Defendants filed an answer, as well as a counter-claim against Trustee and various of Trustee’s professionals (collectively, "Counter-Defendants"). On January 17, 2017, Counter-Defendants filed a motion to dismiss the counter-claim, which was granted on March 6, 2017. Prior to entry of the order, Debtor filed another, more limited counter-claim, on March 3, 2017. On March 24, 2017, the remaining Counter- Defendants filed another motion to dismiss, and that motion was granted on June 28, 2017.
On September 13, 2017, Trustee filed a motion for summary judgment. On October 2, 2017, Debtor filed his opposition. On October 11, 2017, Trustee filed a reply.
FACTUAL BACKGROUND
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On May 7, 2016, while Debtor’s bankruptcy case was still proceeding, and with a sale motion of the Trustee pending1, Debtor transferred his interest in certain real property located at 40834 Baccarat Rd., Temecula, California (the "Property") to Fraleigh via grant deed (the "Grant Deed").
DISCUSSION
Fed. R. Civ. P. Rule 56(a), incorporated into bankruptcy proceedings by Fed. R. Bankr. Rule 7056, states:
A party may move for summary judgment, identifying each claim or defense – or the part of each claim or defense – on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court should state on the record the reasons for granting or denying the motion.
Here, Trustee’s complaint contains a single cause of action: avoidance, recovery, and preservation of an unauthorized post-petition transfer pursuant to 11 U.S.C. §§ 549-
551. 11 U.S.C. § 549(a) states:
Except as provided in subsection (b) or (c) of this section, the trustee may avoid a transfer of property of the estate –
That occurs after the commencement of the case; and
(A) that is authorized only under section 303(f) or 542(c) of this title; or
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that is not authorized under this title or by the court.
Fed. R. Bankr. P. Rule 6001 states: "Any entity asserting the validity of a transfer under § 549 of the Code shall have the burden of proof."
As a preliminary matter, in order for a transfer to be avoidable, there must be: (1) a transfer of (2) property of the estate that (3) occurs after the commencement of the case. 11 U.S.C. § 101(54) defines a "transfer" expansively. Here, the Grant Deed constitutes a transfer of property pursuant to the Code. Likewise, the Property was clearly property of the estate at the time of the transfer – Debtor listed himself as sole owner of the Property on Schedule A and no meaningful argument has made that the Property was not property of the estate.2 Finally, the face of the Grant Deed indicates that the transfer occurred on May 7, 2016 – after the commencement of the case.
Therefore, it is abundantly clear that the preliminary requirements for an avoidance action under § 549 have been satisfied.
Furthermore, the Grant Deed was not made pursuant to court or Code authorization; no argument has been presented asserting that court authorization was obtained, or that the Grant Deed was authorized by the Code. Additionally, the exceptions outlined in § 549(b)-(c) are inapplicable because: (1) the case is not an involuntary case; and
Fraleigh clearly had knowledge of the commencement of the case because she was ordered to appear, and did appear, at a Rule 2004 examination in 2014, more than a year and a half prior to the execution of the Grant Deed.3
Instead of advancing an argument relating to the above factors, Debtor has provided evidence that Fraleigh transferred the property back to Debtor, via a second grant deed (the "Second Transfer"), on June 16, 2017. Debtor appears to argue that Trustee’s § 549 action is now moot because of the Second Transfer. In Trustee’s reply, Trustee argues that the Second Transfer does not change the fact that the Grant Deed is avoidable, and that absent a judgment, Debtor may attempt to argue that the Property is post-petition property, and, therefore, not property of the estate. It is clear that the Second Transfer does not nullify the Grant Deed and that the Grant Deed, despite the
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Second Transfer, still meets the requirements for avoidance pursuant to § 549.
11 U.S.C. § 550(a)(1) provides that the Trustee may recover, for the benefit of the estate, from the initial transferee of the transfer avoided. Here, Fraleigh is initial transferee of the Grant Deed, and, therefore, the Property can be recovered.4 Finally, 11 U.S.C. § 551 provides that property recovered is preserved for the benefit of the estate.
Trustee has also requested summary judgment on Defendants’ three affirmative defenses. Affirmative defenses are not separately litigated, and it is not clear what Trustee is requesting. Trustee must overcome Defendants’ affirmative defenses, and, for the reasons outlined above, such a showing has been made. More specifically, Defendants’ three affirmative defenses are: (1) failure to state a claim; (2) lack of subject matter jurisdiction in removing Fraleigh’s state court action; and (3) the bona fide purchaser exception. Regarding (1), Trustee has clearly proven each element of a
§ 549(a) avoidance action. Defendants’ second affirmative defense is irrelevant to this action. Regarding (3), as outlined above, the evidence clearly demonstrates that Fraleigh had knowledge of the commencement of the case more than a year and a half prior to the execution of the Grant Deed. Therefore, Defendants’ affirmative defenses have been overcome.
Trustee has also presented eight evidentiary objections to the declaration of Debtor’s counsel. The Court declines to rule on the evidentiary objections, because the subject declaration simply does not affect the Court’s ruling on the matter.
TENTATIVE RULING
The Court is inclined to GRANT the motion and issue a judgment AVOIDING the Grant Deed.
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APPEARANCES REQUIRED.
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
David A. Wood Pro Se
Joanne Fraleigh Represented By George A Saba
Nabeel Naiem Slaieh Represented By George A Saba
Movant(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:14-01081 Albrecht v. Slaieh
W.E. Jon Albrecht against Nabeel Slaieh. willful and malicious injury))
HOLDING DATE
From: 10/19/16, 12/14/16, 2/15/17, 3/29/17, 6/7/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
Nabeel Slaieh Represented By Stephen B Mashney Bruce A Boice George A Saba
Plaintiff(s):
W E Jon Albrecht Represented By William L Miltner Robert C Harvey
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood
2:00 PM
Matthew Grimshaw
3:00 PM
Adv#: 6:09-01235 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17, 6/26/17, 8/2/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
DOES 1 through 100, inclusive Pro Se
Empire Partners, Inc., a California Represented By
David Loughnot
3:00 PM
Jonathan A Loeb Jeffrey Rosenfeld
Plaintiff(s):
RICHARD K. DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
3:00 PM
Adv#: 6:10-01319 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
01/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17, 8/2/17
From: 6/26/17 EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Paul Roman Represented By
3:00 PM
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
O'Melveny & Myers, LLP Represented By Howard Steinberg P Sabin Willett
Peter T. Healy Represented By Howard Steinberg P Sabin Willett
Neil M Miller Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Larry Day Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Peter M Bransten John P Reitman Michael I Gottfried
Aleksandra Zimonjic
3:00 PM
Trustee(s):
Monica Rieder Cynthia M Cohen Roye Zur
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
3:00 PM
Adv#: 6:10-01329 DIAMOND v. Empire Partners, Inc., a California Corporation et
(Defendant - Empire Partners, Inc) HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17, 6/26/17, 8/2/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Previti Realty Fund, L.P. Represented By Jonathan A Loeb Jeffrey Rosenfeld
3:00 PM
The James Previti Family Trust Represented By Jonathan A Loeb Jeffrey Rosenfeld
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
3:00 PM
Best Best & Krieger Franklin C Adams Thomas J Eastmond
12:30 PM
Docket 65
BACKGROUND
On May 30, 2013, James & Kathern Kenley ("Debtors") filed a Chapter 13 voluntary petition. On September 17, 2013, Debtors’ Chapter 13 plan was confirmed.
On June 13, 2017, Trustee filed a motion to dismiss for failure to provide tax returns/receipts. Debtors did not file an opposition, Trustee’s motion was granted, and the case was dismissed on July 25, 2017.
Debtors motion asserts that copies of the tax returns were faxed to Trustee on June 19, 2017, and were faxed again, although to the wrong number, on July 24, 2017.
Trustee has approves vacating dismissal, conditioned on Debtors making the Chapter 13 payments that came due when the case was dismissed, totaling $3,618.34.
DISCUSSION
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Fed. R. Bankr. P. Rule 9024, incorporating Fed. R. Civ. P. Rule 60(b)(1), provides for relief from an order for, among other things, "mistake, inadvertence, surprise, or excusable neglect." Debtors state that the tax returns were faxed to Trustee shortly after the Trustee filed a motion to dismiss, and that Debtors attempted to fax the returns again on July 24, 2017.
Given the conditional approval of the Trustee and the evidence submitted by Debtor, the Court finds that the requested relief is proper assuming that the condition has been satisfied.
TENTATIVE RULING
The Court is inclined to GRANT the motion in accordance with the terms in Trustee’s comments.
APPEARANCES REQUIRED.
Debtor(s):
James Randal Kenley Represented By Robert J Spitz
Joint Debtor(s):
Kathern Elizabeth Kenley Represented By Robert J Spitz
Movant(s):
Kathern Elizabeth Kenley Represented By Robert J Spitz
12:30 PM
James Randal Kenley Represented By Robert J Spitz
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:30 PM
From: 9/27/17, 9/28/17 Also #3
EH
Docket 98
09/28/2017
BACKGROUND
On August 5, 2016, Elizabeth Baker ("Debtor") filed her petition for chapter 13 relief. The Debtor’s chapter 13 plan was confirmed on October 26, 2016. Rod Danielson was the duly appointed chapter 13 trustee ("Trustee"). On June 9, 2017, the Debtor filed a motion to convert the case from a chapter 13 to a case under chapter 7. The case was converted by the Court on the same date, pursuant to §1307(a) (the "Conversion Order").
On July 11, 2017, the Court issued to the Debtor a Notice of non-entitlement to discharge pursuant to 11 U.S.C. § 727(a)(8) or (9) because the Debtor had received a chapter 7 discharge in March 2011.
On July 24, 2017, the Debtor filed a motion to reconvert the case to a case under chapter 13. At the hearing on the Motion to Reconvert, the Court noted that courts are divided regarding a Debtor’s ability to reconvert and, separately, noted that even assuming the Court was convinced that reconversion was authorized under §706, that the Debtor’s filing history and the absence of a change in financial circumstances weighed against conversion. The Court, however, permitted the Debtor an opportunity to file a motion to seek to vacate the conversion order.
On September 6, 2017, the Debtor filed a motion to vacate the Conversion
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Order ("Motion"). The Motion includes a declaration by the Debtor’s counsel in which she concedes that in filing the motion to convert, she did not take into account the Debtor’s prior filings and as a result did not realize that the Debtor would not be entitled to a discharge in a chapter 7 case.
DISCUSSION
The Court may find grounds to vacate the Conversion Order based on the Debtor’s counsel’s declaration and a finding that "excusable neglect" resulted in the conversion. However, the Court is concerned that the Debtor is not able to continue making payments in a reconverted chapter 13. Specifically, when the Debtor’s case was converted, a motion to dismiss was already pending for a $576 delinquency as of May 31, 2017. Additionally, on June 13, 2017 (presumably before realizing the case had been converted), the Trustee filed a Motion to Dismiss the chapter 13 case for failure to submit 2016 Federal and State Tax Returns and any corresponding refunds due to the Trustee.
TENTATIVE RULING
The Court is inclined to GRANT the Motion conditioned on the Debtor curing the issues raised by the Trustee in his prior motions to dismiss and in the Debtor’s counsel holding sufficient certified funds to bring the plan current.
However, the Court notes that the Motion was not served on any of the Debtor’s creditors. As such, the Court is inclined to CONTINUE the hearing for proper service on creditors and for Debtor to file a supplemental declaration indicating it is prepared to cure the issues outlined herein.
APPEARANCES REQUIRED.
09/28/2017
BACKGROUND
On August 5, 2016, Elizabeth Baker ("Debtor") filed her petition for chapter 13 relief. The Debtor’s chapter 13 plan was confirmed on October 26, 2016. Rod Danielson was the duly appointed chapter 13 trustee ("Trustee"). On June 9, 2017, the Debtor filed a motion to convert the case from a chapter 13 to a case under chapter 7. The case was converted by the Court on the same date, pursuant to §1307(a) (the "Conversion Order").
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On July 11, 2017, the Court issued to the Debtor a Notice of non-entitlement to discharge pursuant to 11 U.S.C. § 727(a)(8) or (9) because the Debtor had received a chapter 7 discharge in March 2011.
On July 24, 2017, the Debtor filed a motion to reconvert the case to a case under chapter 13. At the hearing on the Motion to Reconvert, the Court noted that courts are divided regarding a Debtor’s ability to reconvert and, separately, noted that even assuming the Court was convinced that reconversion was authorized under §706, that the Debtor’s filing history and the absence of a change in financial circumstances weighed against conversion. The Court, however, permitted the Debtor an opportunity to file a motion to seek to vacate the conversion order.
On September 6, 2017, the Debtor filed a motion to vacate the Conversion Order ("Motion"). The Motion includes a declaration by the Debtor’s counsel in which she concedes that in filing the motion to convert, she did not take into account the Debtor’s prior filings and as a result did not realize that the Debtor would not be entitled to a discharge in a chapter 7 case.
DISCUSSION
The Court may find grounds to vacate the Conversion Order based on the Debtor’s counsel’s declaration and a finding that "excusable neglect" resulted in the conversion. However, the Court is concerned that the Debtor is not able to continue making payments in a reconverted chapter 13. Specifically, when the Debtor’s case was converted, a motion to dismiss was already pending for a $576 delinquency as of May 31, 2017. Additionally, on June 13, 2017 (presumably before realizing the case had been converted), the Trustee filed a Motion to Dismiss the chapter 13 case for failure to submit 2016 Federal and State Tax Returns and any corresponding refunds due to the Trustee.
TENTATIVE RULING
The Court is inclined to GRANT the Motion conditioned on the Debtor curing the issues raised by the Trustee in his prior motions to dismiss and in the Debtor’s counsel holding sufficient certified funds to bring the plan current.
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However, the Court notes that the Motion was not served on any of the Debtor’s creditors. As such, the Court is inclined to CONTINUE the hearing for proper service on creditors and for Debtor to file a supplemental declaration indicating it is prepared to cure the issues outlined herein.
APPEARANCES REQUIRED.
Debtor(s):
Elizabeth T Baker Represented By Nancy Korompis
Movant(s):
Elizabeth T Baker Represented By Nancy Korompis
Trustee(s):
John P Pringle (TR) Pro Se
12:30 PM
(Holding Date)
From: 8/23/17, 9/27/17, 9/28/17 Also #2
EH
Docket 92
BACKGROUND
Debtor obtained a discharge in a Chapter 7 case filed on November 30, 2010. Between February 14, 2013 and September 18, 2015, Debtor filed four Chapter 13 cases, all of which were dismissed within one year.
On August 5, 2016, Elizabeth Baker ("Debtor") filed a Chapter 13 voluntary petition. On October 26, 2016, Debtor’s Chapter 13 plan was confirmed. On June 9, 2017, unaware that she was ineligible for a Chapter 7 discharge, Debtor converted her case to Chapter 7. On July 24, 2017, Debtor filed a motion to reconvert to Chapter 13.
DISCUSSION
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11 U.S.C. § 706(a) states: "The debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title." Here, Debtor’s case was previously converted under § 1307.
"Courts are divided as to whether the debtor can re-convert a case that has been previously converted." Ginsberg & Martin on Bankruptcy § 12.13[A] (5th ed. 2017-2); see also In re Masterson, 141 B.R. 84, 87 (Bankr. E.D. Pa. 1992) ("The courts appear to be evenly divided on the issue of whether a ‘second conversion’ of a case previously converted to Chapter 7 is ever permissible.") (collecting cases). The courts that have determined that § 706(a) bars subsequent reconversion have primarily relied upon the plain language of the statute, but have also considered the legislative history. See In re Banks, 252 B.R. 399, 400 (Bankr. E.D. Mich. 2000). One court has stated the following:
Unfortunately, for the debtor, the language of Section 706 clearly bars a debtor from converting a case from Chapter 7 to Chapter 13 more than once.
Subsection (a) of that section states in relevant part that a "debtor may convert a case under this chapter to a case under Chapter 11 or 13 of this title at any time, if the case has not been converted under Section 1112 or 1307 of this title. The language of this statute is not discretionary. By its plain meaning it bars the debtor from this second attempt at conversion. Moreover, there is no case law supporting a discretionary right. At least one other bankruptcy court has arrived at this conclusion, In re Bumpass, 28 B.R. 597 (Bankr. S.D.N.Y. 1983), and this Court shares that view.
In re Nimai Kumar Ghosh, 38 B.R. 600, 603 (Bankr. E.D.N.Y. 1984) (footnote omitted).
As the court implicitly concluded in Nimai Kumar Ghosh, the phrase appears "if the case has not been converted" appears to modify the entirety of the first clause, not simple the language "at any time." The phrase "at any time" is not set off from the remainder of the clause in any fashion. Therefore, §706(a) is only applicable if the
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case has not been converted previously. The remaining question is, if § 706(a) is inapplicable, can the Debtor resort to any other mechanism in order to convert her case?
Courts that have permitted a reconversion appear to fall into two categories. First, some courts appear to believe that, when § 706(a) is inapplicable, the default position is that the Court has discretion to allow conversion based on policy grounds. See, e.g., In re Masterson, 141 B.R. at 88. Other courts have turned to § 706(c). See, e.g., Matter of Johnson, 116 B.R. 224, 225 (Bankr. Idaho 1990); In re Sensibaugh, 9 B.R. 45, 46 (Bankr. E.D. Va. 1981). Section 706(c) states: "[t]he court may not convert a case under this chapter to a case under chapter 12 or 13 of this title unless the debtor requests or consents to such conversion." While the plain language of § 706(c) indicates that it operates as a restraint on the court’s authority, not as a source of authority, courts that have utilized this provision appear to conclude that if the debtor consents to or requests conversion, the court has discretion to permit such conversion.
A third possibility is that a debtor could seek voluntary dismissal or conversion under
§ 707, consent to conversion, and allow the Court to determine whether dismissal or conversion was more appropriate in the circumstances. This approach would have the disadvantage of possibly resulting in dismissal of the case, but it would seem to solve the statutory interpretation issues encountered by the alternative approaches.
Nevertheless, the Court need not determine whether reconversion is permitted under § 706(a) because, if the Court were to conclude that reconversion is discretionary, Debtor has not demonstrated that the exercise of such discretion would be appropriate. Debtor has had four Chapter 13 cases dismissed in the previous five years. More importantly, at the time Debtor converted to Chapter 7, there was an outstanding motion to dismiss pending for failure to make plan payments. Debtor appears to have chosen to convert the case to Chapter 7 rather than resolve the Chapter 13 Trustee’s pending motion to dismiss.
Given Debtor’s history in bankruptcy, the absence of any legal argument in Debtor’s motion, and the absence of any evidence suggesting a change in circumstances which would allow Debtor to be successful in a Chapter 13 proceeding, the reconversion of
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the case, even if the Court were to conclude that such reconversion was legally permissible, would be inappropriate.
TENTATIVE RULING
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Elizabeth T Baker Represented By Nancy Korompis
Movant(s):
Elizabeth T Baker Represented By Nancy Korompis
Trustee(s):
John P Pringle (TR) Pro Se
12:30 PM
Docket 28
10/26/17
Background:
On March 8, 2017, Larry & Elizabeth Egan ("Debtors") filed a Chapter 13 voluntary petition. On May 9, 2017, Debtors’ Chapter 13 plan was confirmed.
On June 1, 2017, 1st Valley Credit Union ("Creditor") filed a proof of claim for an unsecured claim in the amount of $8,780.14 ("Claim 10"). On September 19, 2017, Creditor amended Claim 10, increasing the amount to $18,948.70. On September 21, 2017, Debtors filed an objection to Claim 10. On October 12, 2017, Creditor filed its opposition to Debtors’ claim objection.
Debtors argue that the amendment is not properly an amendment to Claim 10, but rather a second, distinct claim held by Creditor which was filed late. Creditor attempts to argue that the timely filing of the original claim 10 constitutes an informal proof of claim that Creditor subsequently amended.
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Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
Analysis:
As is noted by Debtors, the claims bar date in this case was July 19, 2017, while
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Creditor amended Claim 10 on September 19, 2017. Creditor argues that Claim 10 is an informal proof of claim, which it is entitled to amend, and, alternatively, that Debtors are not prejudiced by the late amendment.
Claim 10 is clearly not an informal proof of claim. It is a formal proof of claim for the amount of $8,780.14. As is noted by Creditor, the Bankruptcy Appellate Panel has repeatedly laid out the elements required for an informal proof of claim: (1) presentment of a writing; (2) within the time for the filing of claims; (3) by or on behalf of the creditor; (4) bringing to the attention of the court; (5) the nature and amount of a claim asserted against the estate. See, e.g., In re Gianulias, 2013 WL 1397430 at *9 (B.A.P. 9th Cir. 2013).
Creditor’s attempt to have this Court construe the proof of claim as a formal claim with regard to $8,780.14 and an informal proof of claim with regard to other similar claims held by Creditor, while creative, is unpersuasive. It is simply impossible to conclude that the timely filed proof of claim brought to the attention of the Court the amount that Creditor would later assert against the estate. If the Court were to accept Creditor’s invitation, then the timely filed Claim 10 would evidence a formal proof of claim for $8,780.14 and an informal proof of claim for $0.1
Creditor’s second argument is that it should be allowed to amend its timely filed proof of claim, and, in support of its argument, Creditor generally avers that Debtors cannot demonstrate legal prejudice. This argument, however, fails to address the fact that an amendment to a claim is only appropriate when such amendment clarifies the earlier filed claim; an "amendment" is not appropriate when the Creditor wishes to assert a second, different claim. See generally In re Roberts Farms Inc., 980 F.2d 1248, 1252 (9th Cir. 1992); see also In re Metro Transp. Co., 117 B.R. 143, 147 (Bankr. E.D. Pa. 1990) ("In other words, ‘if a new claim is being asserted subsequent to the bar date, an objection to its filing must be sustained.’") (collecting cases.)
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Here, the basis for Creditor’s original proof of claim appears to be an installment loan dated May 23, 2016. The basis for the additional amount in Creditor’s amended claim appears to be a credit card issued in 2005. These two claims are separate and distinct.
Tentative Ruling
The Court is inclined to SUSTAIN the objection, DISALLOWING the amendment to Claim 10.
APPEARANCES REQUIRED.
Debtor(s):
Larry Patrick Egan Represented By Dana Travis
Joint Debtor(s):
Elizabeth Ann Egan Represented By Dana Travis
Movant(s):
Elizabeth Ann Egan Represented By Dana Travis
Larry Patrick Egan Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
CASE DISMISSED 8/31/17
From: 9/14/17 EH
Docket 14
09/14/2017
BACKGROUND
On July 18, 2017 ("Petition Date"), Conchita Ang ("Debtor") filed her petition for chapter 13 relief. The Debtor’s petition commenced her second case pending within the same year as Case No. 16-16362, which was dismissed for abuse on October 12, 2016.
On August 18, 2017, the Debtor filed her Motion and Notice of Motion for Turnover of Property and: (I) To Enforce the Automatic Stay; (II) For an Order to Show Cause (OSC); (III) To Compel Compliance with the Court Order; (IV) For Sanctions ("Motion").
By her Motion, the Debtor asserts that Clear Recon Corp. and Wells Fargo Bank, N.A. violated the automatic stay by holding a foreclosure sale on the Petition Date. Although it is not clear from the Motion, the foreclosure appears to regard the property located at 2150 Horse Trail Drive in Redlands, CA 92373 (the "Property").
On August 31, 2017, Wells Fargo Bank and Clear Recon Corp. ("Respondents") filed their opposition to the Motion ("Opposition"). The Opposition asserts, in pertinent part, that: (1) a motion for relief from stay which included in rem
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relief was granted on May 18, 2017, (2) that order was recorded on August 10, 2017; and (3) that the Debtor has not asserted any actual damages.
DISCUSSION
As a threshold matter, the Court concurs that the Debtor’s service of her Motion was deficient in that Respondents were not served in accordance with Rule 7004. Nevertheless, Respondents had the opportunity to file their opposition and did so timely. There appearing to be no prejudice to Respondents stemming from the deficiency in service, the Court is disinclined to deny the Motion on this basis.
The Motion seeks issuance of an OSC based on the alleged foreclosure of the Property in violation of the automatic stay.
"A ‘willful violation’ does not require a specific intent to violate the automatic stay. Rather, the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant's actions which violated the stay were intentional. Whether the party believes in good faith that it had a right to the property is not relevant to whether the act was ‘willful’ or whether compensation must be awarded."
Pinkstaff v. United States (In re Pinkstaff), 974 F.2d at 115 (quoting Goichman v. Bloom (In re Bloom), 875 F.2d 224, 227 (9th Cir.1989)) (emphasis added).
Here, the record indicates that the petition was filed at approximately 12:50
p.m. on July 18, 2017. The foreclosure sale was scheduled to begin at 1:00 p.m. that same day (although the Court notes that the Exhibit O which purportedly indicates the sale date and time was not filed with the Court). The Debtor’s declaration is vague as to when she provided notice of the filing to Respondents. Her inauthenticated and inadmissible exhibits do not necessarily help her because they appear to indicate that notice was faxed by her at 1:04 p.m. at the earliest, which is after the sale began. Nevertheless, the foreclosure sale appears to be a technical violation of the stay.
In response to the Motion, the Respondents indicate an in rem order was entered in May 2017 by Judge Zurzolo. However, Respondents did not take appropriate steps to record the order in the county where the Property is located prior
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to the Petition Date (the In Rem Order was not recorded until August 10, 2017, postpetition), and as such the automatic stay was in place at the time of the foreclosure. Based on this failure by the Respondents, issuance of an OSC re: Violation of the Automatic Stay is appropriate because, notwithstanding that holding the foreclosure sale may not have been a willful violation (given the ambiguity surrounding whether Respondents received effective notice prior to holding the sale), the failure to restore title to the Property to the Debtor or to otherwise seek annulment likely constitutes a continuing violation of the stay which Respondents did not cure during the remaining pendency of the Debtor’s case (Respondents do not acknowledge when they had notice of the bankruptcy but also do not dispute that they received notice at some point). In re Wallace, 2014 WL 1244792, at *6 (B.A.P. 9th Cir. Mar. 26, 2014)(discussing the interplay between an action for damages under 362
with related orders annulling the stay).
Based on the foregoing, the Court’s tentative ruling is to issue an Order to Show Cause Why:
The foreclosure sale should not be set aside as a void act taken in violation of the automatic stay; and
Why the Debtor should not be awarded actual damages under either § 362(k) or § 105(a) to compensate her for damages stemming from the violation.
APPEARANCES REQUIRED.
Debtor(s):
Conchita C Ang Represented By Richard W Snyder
Movant(s):
Conchita C Ang Represented By Richard W Snyder
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jaime Gomez Vivanco Represented By Summer M Shaw Jenny L Doling
Joint Debtor(s):
Yuriria Vivanco Represented By Summer M Shaw Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 24
- NONE LISTED -
Debtor(s):
Jose E. Toledo Represented By Moises A Aviles
Joint Debtor(s):
Antonia Toledo Represented By Moises A Aviles
Movant(s):
Antonia Toledo Represented By Moises A Aviles Moises A Aviles
Jose E. Toledo Represented By Moises A Aviles Moises A Aviles
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 13
- NONE LISTED -
Debtor(s):
Sara Ann Garcia Represented By Lionel E Giron
Movant(s):
Sara Ann Garcia Represented By Lionel E Giron
Trustee(s):
Lynda T. Bui (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Oracio Rosales Hernandez Represented By Aalok Sikand
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Julie Graham Represented By
Michael Avanesian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
David Loronzo Cheshier Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose L Garcia Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gerald Curtis Collins Represented By
M Wayne Tucker
Joint Debtor(s):
Valerie Cecelia Collins Represented By
M Wayne Tucker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Anthony J McPike Represented By Nima S Vokshori
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sonia Garcia Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Arturo Olvera Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Latina Conley Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Fatana Aziz Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Arinel Gonzalez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ignacio Figueroa Represented By
Ghada Helena Philips
Joint Debtor(s):
Nadia Elizabeth Figueroa Represented By
Ghada Helena Philips
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 220
- NONE LISTED -
Debtor(s):
Brandon Kent Blevins Represented By
Raj T Wadhwani
Joint Debtor(s):
Teresa Taylor Blevins Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 125
- NONE LISTED -
Debtor(s):
Carlos Enrique Mendoza Represented By John F Brady Lisa H Robinson
Joint Debtor(s):
Michelle Lea Mendoza Represented By John F Brady Lisa H Robinson
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 98
- NONE LISTED -
Debtor(s):
Bryan K. Harrison Represented By April E Roberts
Joint Debtor(s):
Dawn Harrison Represented By April E Roberts
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 44
- NONE LISTED -
Debtor(s):
Miguel Vivar Represented By
Rebecca Tomilowitz
Joint Debtor(s):
Maria Vivar Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 51
- NONE LISTED -
Debtor(s):
Elliott Howard Blue Jr Represented By Michael E Clark Barry E Borowitz
Joint Debtor(s):
Yvette Blue Represented By
Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 36
- NONE LISTED -
Debtor(s):
Arthur Leo Gent Represented By April E Roberts
Joint Debtor(s):
Wanda Sue Gent Represented By April E Roberts
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 32
- NONE LISTED -
Debtor(s):
Ana I Murguia Owens Represented By Brian J Soo-Hoo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 62
- NONE LISTED -
Debtor(s):
Diana Cescolini Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 38
- NONE LISTED -
Debtor(s):
Idalia Temblador-Baisa Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 36
- NONE LISTED -
Debtor(s):
Gregory A. King Represented By Michael Jay Berger
Joint Debtor(s):
Jessica A. King Represented By Michael Jay Berger
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 25
- NONE LISTED -
Debtor(s):
Daniel Reyes Represented By
Rebecca Tomilowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 22
- NONE LISTED -
Debtor(s):
Heather Marie Smith Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 26
- NONE LISTED -
Debtor(s):
Maisha Lenette Ghant-Elie Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 29
- NONE LISTED -
Debtor(s):
Toni N. Ephraim Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 30
- NONE LISTED -
Debtor(s):
Roger James Gardner Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: JULIO C. DAVILA
EH
Docket 10
- NONE LISTED -
Debtor(s):
Julio C. Davila Represented By Michael Jay Berger
Movant(s):
Julio C. Davila Represented By Michael Jay Berger
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA, NATIONAL ASSOCIATION
EH
Docket 9
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). DENY relief under § 362(d)(2) for lack of cause shown. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 11.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Marguerite Elaine Dayton Pro Se
Movant(s):
HSBC BANK USA Represented By Jason C Kolbe
10:00 AM
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: BALBOA THRIFT AND LOAN
EH
Docket 15
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Rhonda Lynn Hale Pro Se
Movant(s):
Balboa Thrift & Loan Represented By Keith E Herron
10:00 AM
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: FORD MOTOR CREDIT COMPANY LLC
EH
Docket 16
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Mark Scheirer Represented By Patricia M Ashcraft
Joint Debtor(s):
Randall Harrison Represented By Patricia M Ashcraft
10:00 AM
Movant(s):
Ford Motor Credit Company LLC Represented By
Sheryl K Ith
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: AMERICAN HONDA FINANCE CORPORATION
EH
Docket 22
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Brandon Geoffrey Bosch Represented By Glenn Park
Movant(s):
AMERICAN HONDA FINANCE Represented By
Vincent V Frounjian
10:00 AM
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST COMPANY
EH
Docket 12
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Mohamed Abdelghany El Biali Represented By Gary S Saunders
Movant(s):
Deutsche Bank National Trust Represented By Sean C Ferry
10:00 AM
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 19
On July 27, 2017, Maria Trinidad ("Debtor") filed a Chapter 7 voluntary petition. Debtor had a previous bankruptcy case dismissed two days earlier for failure to file case commencement documents. As such, pursuant to § 362(c)(3), the automatic stay was to terminate thirty days after the petition absent an order from the Court. The Court did not issue such an order, and, therefore, the automatic stay terminated on August 26, 2017.
On October 5, 2017, Wells Fargo Bank filed a motion for relief from the automatic stay (the "Annulment Motion"), requesting, in part, retroactive annulment of the automatic stay.
11 U.S.C. § 362(d) states:
(d) On request of a party in interest and after notice and a hearing, the court
10:00 AM
shall grant relief from the stay provided, under subsection (a) of this section such as by terminating, annulling, modifying, or condition such stay –
(emphasis added); see also In re Schwartz, 954 F.2d 569, 573 (9th Cir. 1992) ("If a creditor obtains retroactive relief under section 362(d), there is no violation of the automatic stay, and whether violations of the stay are void or voidable is not at issue.").
The BAP, in In re Fjeldsted, noted the absence of a clear standard for annulment of the automatic stay. 293 B.R. 12, 21 (B.A.P. 9th Cir. 2003) ("There is less appellate clarity, however, in enunciating a test for retroactive stay relief. Inconsistent standards have thus developed, which run the gamut from such relief being justified only in ‘extreme circumstances’ to giving the court ‘wide latitude’ to ‘balance the equities’ on a case-by-case basis."). The BAP’s most recent announcement of the standard for annulment of the automatic stay stated the following:
Determining whether cause exists to annul the stay is a case-by-case inquiry based on a balance of the equities. In conducting this inquiry the bankruptcy court, among other factors, should consider whether the creditor knew of the bankruptcy when violating the stay and whether the debtor’s conduct was unreasonable, inequitable or prejudicial to the creditor.
In Fjeldsted, we approved additional factors for consideration in assessing the equities. The twelve nonexclusive factors are: (1) number of filings; (2) whether, in a repeat filing case, the circumstances indicate an intention to delay and hinder creditors; (3) a weighing of the extent of prejudice to creditors or third parties if the stay relief is not made retroactive, including whether harm exists to a bona fide purchaser; (4) the debtor’s overall good faith (totality of circumstances test); (5) whether creditors knew of stay but
10:00 AM
nonetheless took action, thus compounding the problem; (6) whether the debtor has complied, and is otherwise complying, with the Bankruptcy Code and Rules; (7) the relative ease of restoring parties to the status quo ante; (8) the costs of annulment to debtors and creditors; (9) how quickly creditors moved for annulment, or how quickly debtor moved to set aside the sale or violative conduct; (10) whether, after learning of the bankruptcy, creditors proceeded to take steps in continued violation of the stay, or whether they moved expeditiously to gain relief; (11) whether annulment of the stay will
cause irreparable injury to the debtor; and (12) whether stay relief will promote judicial economy or other efficiencies. The Panel in Fjeldsted cautioned that the twelve factors are merely a framework for analysis and not a scorecard, and that in any given case, one factor may so outweigh the others as to be dispositive.
In re Estavan Capital LLC, 2015 WL 7758494 at *5 (B.A.P. 9th Cir. 2015) (citations and quotations omitted).
While Fjeldsted cautioned that the enumerated factors are not a scorecard, it is clear that the majority of the factors, including, in particular, Debtor’s lack of good faith, weigh in favor of annulling the stay. Specifically, as is noted by Wells Fargo, this is the eight bankruptcy affecting the property, and the property has been the subject of multiple unauthorized transfers. Debtor commenced the instant bankruptcy case five days before a scheduled foreclosure sale, and received the subject property via an unauthorized transfer the same day she filed the petition. Furthermore, there is no evidence that Wells Fargo was aware of the bankruptcy filing at the time it undertook the acts in question, nor is there any evidence that Wells Fargo violated the automatic stay once it learned of the filing.
Given all of the factors noted above, the Court is inclined to GRANT annulment of the automatic stay retroactive to the petition date, and otherwise GRANT the motion in its entirety, with the exception of ¶ 14, which is DENIED as moot.
10:00 AM
APPEARANCES REQUIRED.
Debtor(s):
Maria Armina Policarpio Trinidad Pro Se
Movant(s):
WELLS FARGO BANK, N.A. Represented By Alexander K Lee Sean C Ferry
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: LOUIS J SILVESTRI AND LINDA SILVESTRI, TRUSTEE OF THE LOUIS J SILVESTRI AND LINDA SILVESTRI FAMILY TRUST EST. 2/5/81
From: 9/12/17 EH
Docket 23
09/12/2017
Service: Proper Opposition: Yes
Movant has established cause to GRANT relief from the stay under § 362(d)(1) based on the Debtor’s failure to make postpetition payments and GRANT waiver of 4001(a)
stay the request for termination of the co-debtor stay. Parties to discuss adequate protection and timing and likelihood of sale.
APPEARANCES REQUIRED.
Debtor(s):
Roger James Gardner Represented By Jenny L Doling Summer M Shaw
Movant(s):
Louis J Silvestri and Linda Silvestri, Represented By
Julian K Bach
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CAPITAL ONE AUTO FINANCE
EH
Docket 38
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Sam Venero Represented By
Edward T Weber
Movant(s):
Capital One Auto Finance, a division Represented By
Zann R Welch Bret D. Allen
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: INTERESTED PARTY ALAN GATTO
From: 10/24/17 EH
Docket 36
Service is Proper Opposition: None
The Court is inclined to CONTINUE the matter for Movant to file a supplemental declaration. Specifically, while Movant has checked the appropriate box stating that post-petition acts taken in violation of the automatic stay were taken before Movant knew of the bankruptcy filing, there is no supplemental declaration explaining when and how Movant obtained knowledge of the bankruptcy filing. Section 12 of the form motion explicitly contemplates the inclusion of a supplemental declaration when filing a motion to annul the automatic stay.
APPEARANCES REQUIRED.
Debtor(s):
Javier Ruiz Olivas Represented By Aldo A Flores
Joint Debtor(s):
Gloria Olguin Represented By
10:00 AM
Movant(s):
Aldo A Flores
Alan Gatto Represented By
Helen G Long
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 34
Service is Proper Opposition: Yes
Parties to discuss adequate protection. Otherwise, the Court is inclined to GRANT relief from the automatic stay pursuant to § 362(d)(1). GRANT requests under ¶¶ 2, 3 and 6. DENY request for confirmation that no stay is in effect for lack of cause shown. DENY alternative request under ¶ 12 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Guillermo Zamudio Represented By Paul Y Lee
Movant(s):
Wells Fargo Bank, NA Represented By Jason C Kolbe
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 6/27/17, 8/29/17 EH
Docket 40
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and
12. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling Summer M Shaw
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
10:00 AM
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: SUN WEST MORTGAGE COMPANY INC
EH
Docket 26
- NONE LISTED -
Debtor(s):
Shawn Michel Smigel Represented By Jenny L Doling Summer M Shaw
Movant(s):
Sun West Mortgage Company, Inc. Represented By
Jason C Kolbe
Trustee(s):
Robert Whitmore (TR) Represented By Julie Philippi
10:00 AM
MOVANT: WELLS FARGO BANK
EH
Docket 82
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Nicholas M. Morales Represented By George J Paukert
Joint Debtor(s):
Bertha A. Galvan Represented By George J Paukert
10:00 AM
Movant(s):
WELLS FARGO BANK, N.A. Represented By
Armin M Kolenovic
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 8/1/17, 9/12/17 EH
Docket 114
Service: Proper Opposition: Yes
Movant has established sufficient grounds to support relief from stay under § 362(d)
based on Debtor’s failure to make required post-petition payments. Debtor alleges that more payments have been made to the Movant then the Motion accounts for and that some payments have been misapplied by the Movant, but provides no specificity or detail to support his assertions.
APPEARANCES REQUIRED.
Debtor(s):
Robert Wayne Cook Sr. Represented By Steven A Alpert
Joint Debtor(s):
Kelly Danielle Cook Represented By Steven A Alpert
10:00 AM
Movant(s):
Wells Fargo Bank, N.A . Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 72
- NONE LISTED -
Debtor(s):
Jose Antonio Velasco Represented By Daniel King
Joint Debtor(s):
Lilian Micaela Velasco Represented By Daniel King
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: DEUTSCHE BANK NATIONAL TRUST COMPANY
EH
Docket 54
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). DENY relief under § 362(d)(2) for lack of cause shown. GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Chaunnon Matthew Goldberg Represented By Todd L Turoci
Amelia Puertas-Samara
Joint Debtor(s):
Danyale Dawn Goldberg Represented By
10:00 AM
Movant(s):
Todd L Turoci
DEUTSCHE BANK NATIONAL Represented By
Sean C Ferry
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
2:00 PM
EH
Docket 303
10/31/2017
The hearing on the Motion is continued to November 28, 2017, at 2:00 p.m. as a holding date.
APPEARANCES WAIVED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
MOVANT: CHRIS RISENMAY; JAMES BRAY; NICK CUNNINGTON; DAVID THATCHER; CLARK PENNEY; SHATTUCK LAMM; STEPHEN BIESINGER; MARK THATCHER; BRANDT KUHN; MICHELE SARNA; MARK HAYEK, AND MIKE MCCONNELL
From: 9/26/17, 10/3/17 Also #20 & #21
EH
Docket 27
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
Mark Hayek Represented By
Erwin J Shustak
2:00 PM
Also #19 & #21 EH
Docket 6
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
Mark Hayek Represented By
Erwin J Shustak
2:00 PM
From: 8/16/17, 8/23/17, 10/3/17 Also #19 & #20
EH
Docket 1
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
2:00 PM
Also #23 EH
Docket 118
BACKGROUND
On November 10, 2016, B&B Family, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. On March 31, 2017, Debtor filed its Chapter 11 plan and disclosure statement. On April 7, 2017, Debtor filed a motion to extend the deadline to obtain plan confirmation, which was, at the time, set for May 15, 2017. On May 2, 2017, after receiving an objection to plan confirmation, Debtor filed an amended Chapter 11 plan and disclosure statement.
Debtor did not lodge a proposed order for its motion to extend the deadline for plan confirmation until May 18, 2017. After the order was lodged, the Court denied the motion, noting that an order extending the deadline for plan confirmation must be signed before the expiration of the existing deadline. Nevertheless, the Court noted that the filing of an amended Chapter 11 plan may restart the plan confirmation deadline.
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On June 13, 2017, Debtor filed another amended Chapter 11 plan (the "Plan") and disclosure statement. On July 10, 2017, Debtor filed another motion to extend the deadline for plan confirmation. The Court granted that motion, and extended the deadline for plan confirmation to October 26, 2017.
On July 31, 2017, Debtor filed another amended disclosure statement, which was approved on August 3, 2017. On August 25, 2017, Debtor filed a motion to continue the plan confirmation hearing, which was granted on August 28, 2017.1 On October 11, 2017, Debtor filed a brief in support of plan confirmation. No objections to confirmation have been received by the Court.
DISCUSSION
Ballots
Pursuant to declaration filed September 1, 2017, Debtor timely transmitted its disclosure statement, Chapter 11 plan, ballots, and notice of all relevant dates. Debtor provides ballots received from: (1) Comerica Bank; (2) High Desert Prime LLC; (3) Pawnee Leasing Corporation; (4) a second ballot from Comerica Bank; (5) a ballot from Financial Pacific Leasing; and (6) a final ballot which appears to have not been submitted to the Court. Debtor’s ballot summary lists a seventh ballot received, which is not identified in Debtor’s brief or in Exhibit 2. Debtor asserts that all classes have voted to accept the plan, although the evidence submitted to the Court, namely Exhibit 2 of Debtor’s confirmation brief, without more, demonstrates Class 6 rejecting the plan.
Classes
Class 1: senior secured claim of Comerica Bank, secured by Debtor’s assets.
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Class 4: secured claim of Financial Pacific Leasing, secured by specific equipment.
Class 5: landlord’s claim for arrears.
Class 6: non-priority, non-insider unsecured claims, including the unsecured portions of the claims held by the entities in Class 1 and 4. This class includes Pawnee Leasing Corporation, Comerica Bank, Financial Pacific Leasing (ostensibly), and a fourth unsecured creditor not identified in the confirmation brief or ballot summary.
Class 7: "interest holders of Debtor."
Plan Confirmation
"The bankruptcy court must confirm a Chapter 11 debtor’s plan of reorganization if the debtor provides by a preponderance of the evidence either (1) that the Plan satisfies all thirteen requirements of 11 U.S.C. § 1129(a), or (2) if the only condition not satisfied is the eighth requirement, 11 U.S.C. § 1129(a)(8), the Plan satisfies the ‘cramdown’ alternative to this condition found in 11 U.S.C. § 1129(b), which requires that the Plan ‘does not discriminate unfairly’ against and ‘is fair and equitable’ towards each impaired class that has not accepted the plan." In re Ambanc La Mesa Ltd. P’ship, 115 F.3d 650, 653 (9th Cir. 1997).
As a preliminary matter, the Court notes that Debtor has not directly provided any evidence in support of confirmation. Neither Debtor’s confirmation brief nor Debtor’s proposed plan contains a declaration or any authentication of the attached exhibits.
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Debtor’s disclosure statement, which has been approved by this Court, contains a declaration of Debtor’s principal, however, the exhibits appended to that declaration are not authenticated either.
A. 11 U.S.C. § 1129(a) requirements
1129(a)(1): "The plan complies with the applicable provisions of this title." The legislative history indicates that this requirement primarily refers to the requirements of 11 U.S.C. §§ 1122 and 1123. See In re Multiut Corp., 449 B.R. 323, 333 (Bankr.
N.D. Ill. 1984). Section 1122 deals with the classification of claims, and requires that claims in a single class be substantially similar. Here, Debtor has formed five distinct classes: (1) senior secured creditor; (2) junior secured creditor; (3) landlord; (4) general unsecured; and (5) Debtor’s interest holders. The Court finds that the demarcation of classes is proper. Section 1123 deals with the contents of a plan, and identifies certain mandatory and permissive provisions. It appears that Debtor is in compliance with § 1123(a)(1)-(4), (7)-(8). Regarding § 1123(a)(6), Debtor’s confirmation brief seems to concede that an explicit provision conforming to the Code is required, and Debtor has agreed to insert such a provision into any plan confirmation order. Regarding § 1123(a)(5), the absence of admissible evidence precludes the Court from addressing whether Debtor has demonstrated that there are adequate means provided for the plan’s implementation.
1129(a)(2): "The proponent of the plan complies with the applicable provisions of this title." The legislative history indicates that this requirement primarily refers to the disclosure requirements in § 1125. See In re Capitol Lakes, Inc., 2016 WL 3598536 at
*2 (Bankr. W.D. Wis. 2016). Here, the Court has approved Debtor’s disclosure statement, and Debtor has provided a service declaration indicating that the required documents were served on creditors, and, therefore, it appears that this requirement has been satisfied.
1129(a)(3): Fed. R. Bankr. P. Rule 3020(b)(2) provides that: "If no objection is timely filed, the court may determine that the plan has been proposed in good faith and not by any means forbidden by law without receiving evidence on such issues." Here, no objection has been timely filed, and, as such, the Court deems the Plan to have been
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filed in good faith and not by any means forbidden by law. Therefore, this requirement is satisfied.
1129(a)(4): Article 1(A) of the Plan states: "Professional fees may only be paid upon application to an approval by the court." Therefore, it appears that this requirement has been satisfied.
1129(a)(5): Article V(B) of the Plan describes the proposed post-confirmation management of Debtor, and, as such, it appears that this requirement has been satisfied.
1129(a)(6): This requirement deals with government regulation of the rates of the Debtor and is not applicable to the instant case.
1129(a)(7): Debtor’s confirmation brief asserts that, if the case were converted to Chapter 7, the case would be a no-asset case. Furthermore, Debtor has provided ballots accepting the Plan from all creditors other than Class 6 creditors, who are unsecured creditors. Therefore, it would appear that all creditors have either accepted the Plan or will receive at least as much as would be received in a Chapter 7 liquidation.
1129(a)(8): Based upon the ballot summary provided by Debtor, Classes 1, 4, and 5 (each of which contains a single creditor) have accepted the Plan. As is noted in the Ballot section above, the Ballot results of Class 6 are unclear. The ballot summary (and confirmation brief) provided by Debtor assert that Class 6 has accepted the Plan, while the individual ballots appended to the brief, without more, indicate Class 6 has rejected the Plan. As such, Debtor has failed to demonstrate that § 1129(a)(8) has been satisfied.
1129(a)(9): Article I of the Plan appears to state that all administrative claims and
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priority claims will either be paid in full on the Effective Date of the Plan, or that the holder of the claim has consented to different treatment. The only administrative or priority claim (other than the fees for Debtor’s counsel) that is not to be paid immediately upon the effective date of the Plan is the tax claim held by the California State Board of Equalization, which is to be paid over four years with 7% interest.
Debtor asserts that the California State Board of Equalization’s failure to object to the proposed treatment constitutes acceptance.
1129(a)(10): The ballot summary and ballots submitted by Debtor appear to indicate that at least one impaired class has accepted the Plan, and, therefore, it appears that this requirement is satisfied.
1129(a)(11): This provision requires Debtor to demonstrate that "[c]onfirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization." Debtor has not provided any admissible evidence to the Court that would enable the Court to undertake the required review.
1129(a)(12): Article V(B) of the Plan provides that the quarterly fees of UST will be paid on the effective date of the Plan, and, as such, this provision appears to be satisfied.
1129(a)(13): Debtor has not addressed this provision, ostensibly because it is inapplicable in the instant case.
1129(a)(14): Debtor has not addressed this provision, ostensibly because it is inapplicable in the instant case.
1129(a)(15): Debtor is not an individual, and, therefore, this provision is inapplicable in the instant case.
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1129(a)(16): Debtor asserts that the Plan does not contemplate any transfer of property (other than money), and, as such, that this provision has been satisfied.
Summary of Confirmation Issues:
-First and foremost, Debtor has not provided any evidence in support of confirmation. To the extent that that lack of evidence is particularly important, the absence of supporting evidence is noted below.
-There is no evidence of any confirmation requirements under § 1129.
-Debtor has not provided any evidence of the cash on hand available to make the payments the Plan contemplates being made immediately upon the effective date, which appears to total $58,251.48.
-Debtor has not provided any evidence of its historical financials. As a result, the Court is unable to effectively review the feasibility of the Plan.
-The Plan appears to have incorrectly labelled Exhibit A and Exhibit B.
-Because of the absence of evidence in support of confirmation, Debtor has not demonstrated that it possesses adequate means for the Plan’s confirmation.
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-The ballots submitted to the Court indicate that Class 6 has rejected the Plan. Debtor has only submitted two ballots from Class 6, one indicating acceptance and one indicating rejection. § 1126(c) requires that a majority of the claim holders in a class accept the plan, and that has not occurred here.
-Debtor has not addresses the alternative cram-down mechanism, much less satisfied it.
APPEARANCES REQUIRED.
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci Julie Philippi
2:00 PM
From: 12/13/16, 3/7/17, 5/30/17, 7/25/17, 9/26/17
Also #22 EH
Docket 8
- NONE LISTED -
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci Julie Philippi
11:00 AM
R. Bankr. P. 2004 Also #14
EH
Docket 172
- NONE LISTED -
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
11:00 AM
EH
Docket 148
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Movant(s):
Hilder & Associates Represented By
Lei Lei Wang Ekvall
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
11:00 AM
Docket 80
11/01/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and his Counsel have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
First, as requested in the Application of BB&K, the fees of Trustee’s Counsel are allowed in full as a final order. Separately, pursuant to the Trustee Final Report, the following amounts may be paid by the Trustee from funds on hand,
Counsel Fees: $499.46
The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Cynthia M Lucero Represented By Stephen R Wade
W. Derek May
Trustee(s):
Robert Whitmore (TR) Represented By
11:00 AM
Franklin C Adams Cathy Ta
2:00 PM
Adv#: 6:17-01156 Daff v. Fabrigas, Jr.
EH
Docket 13
11/01/2017
BACKGROUND
On May 1, 2017 ("Petition Date"), Fernando Fabrigas Sr. and Estela Fabrigas (collectively, the "Debtors") filed their petition for chapter 7 relief. Charles Daff is the duly appointed chapter 7 trustee ("Trustee"). Among the potential assets of the Debtors’ bankruptcy estate on the Petition Date is certain real property located at 231 Arden Street in Hemet, CA (the "Property").
On July 31, 2017, the Trustee filed a complaint for avoidance of transfer pursuant to §§ 544, 548, 550, and 551 as intentional and constructive transfers; for disallowance of claims pursuant to § 502, to prevent unjust enrichment pursuant to § 105, for declaratory relief pursuant to §§ 541, 544, and 548, and for turnover of the Property pursuant to § 542 ("Complaint") against Fernando Fabrigas Jr. ("Defendant"). On October 11, 2017, default was entered as against the Defendant. On that same date, the Trustee filed and served his Motion for Default Judgment. Service appears proper and no opposition has been filed.
DISCUSSION
Entry of Default
Federal Rule of Civil Procedure 55 states that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party’s default." Fed. R. Civ. P. 55(a). Per LBR 7055-1(b)(1), a
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motion for entry of default judgment shall contain the following:
When and against what party default was entered
Whether defaulting party is an infant or incompetent person –
Whether the defaulting party is currently on active duty –
Whether notice has been served on defaulting party, if required by FRCP 55(b)(2)
(Daff Decl. ¶8).
Admissions
Pursuant to FRBP 7008(b)(6), failure to deny an allegation of the Complaint where a responsive pleading is required constitutes an admission of the allegation.
The Complaint alleges, in pertinent part, that:
Debtors testified at the initial June 8, 2017, 341(a) Meeting of Creditors that they owned the real property located at 231 Arden Street in Hemet, California, 92543 (Compl. at ¶12);
Title in the Property was vested in the Debtors as "Wife and Husband as Community Property," Document Number 2013-0291659 as of June 19, 2013 (Id. at ¶11);
Pursuant to a Quitclaim Deed recorded in connection with the Property on May 11, 2015 in the Riverside County Recorder’s Office as Document Number 2015-0194114, the Trustee is informed and believes that the Defendant acquired and took title to the Property a first time (Id. at ¶14, Ex 3);
On February 25, 2016, Defendant transferred the Property back to the Debtors pursuant to a Grant Deed recorded in the Riverside County Recorder’s Office as Document Number 2016-0075152 (Id. at ¶15, Ex. 4);
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A Quitclaim Deed was recorded in connection with the Property on October 14, 2016, in the Riverside County Recorder’s Office as Document Number 2016-0451368 by which Trustee is informed and believes that Defendant acquired and took title to the Property a second time (Id. at ¶16, Ex. 5) (the "Transfer");
The Trustee is informed and believes that no or nominal consideration was paid in connection with the Transfer. Trustee is further informed and believed and thereon alleges that the Debtors received no or nominal value in exchange for the Transfer (Id. at ¶17).
Default Judgment
Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute considering material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the FRCP favoring decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
Proper Service of Summons and Complaint
Trustee served the Defendant at the address of the Property and asserts in his declaration that the Defendant, at all relevant times, resided at the Property. (Iskander Decl. ¶4).
Merits of Plaintiff’s claim
Upon default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); "The defendant, by his default, admits the plaintiff's well-pleaded allegations of facts, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established." Nishimatsu Construction Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th
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Cir. 1975) (emphasis added); Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978); Cotton v. Massachusetts Mut. Life Ins. Co., 402 F.3d 1267, 1278(11th Cir. 2005) (do not have to take as true facts that are not well-pleaded or conclusions of law).
First Claim: Intentional Fraudulent Transfer under § 548(a)(1)(A)
The Trustee has the burden of proving, by preponderance of the evidence, that the Property was property of the Debtors, that the transfer of such Property occurred within one year prior to the filing of the Debtors’ bankruptcy petition, and that such transfer was made with the actual intent to hinder, delay, or defraud the Debtors’ creditors. In re Brobeck, Phleger & Harrison LLP, 408 B.R. 318, 338-339 (Bankr.
N.D. Cal. 2009)(internal citations omitted).
As to the Trustee’s First Claim for relief, based on the allegations of the Complaint indicating that the transfer was made to the Defendant – an insider of the Debtors and their son (Daff Decl. ¶4), that the Debtors retained possession or control of the Property, that the timing of the second transfer in October 2016, was less than one year prior to Petition Date, that Debtors schedules indicate that their non-real property assets are de minimis (Ex. B), and finally based on the allegations that the Debtors have received less than reasonably equivalent value for the Transfer, the Trustee has demonstrated that the badges of fraud are sufficient to permit a finding that the Property was transferred with an actual intent to hinder, delay or defraud the Debtors’ creditors. Further, the Transfer occurred within one year prior to the filing of the petition. Based on the foregoing, the Court GRANTS the Motion as to the First Claim.
Second Claim: Constructive Fraudulent Transfer under § 548(a)(1)(B)
At trial, and on his motion, the Trustee has the burden of proving, by preponderance of the evidence, that: (1) Debtors had an interest in the Property; (2) a transfer of that interest occurred within one year of the filing of the bankruptcy petition; (3) Debtors were insolvent at the time of the transfer or became insolvent as a result thereof; and (4) Debtors received "less than a reasonably equivalent value in exchange for" the Property. Brobeck at 340–41.
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As to the Second Claim, the Trustee’s Complaint and Motion demonstrate that the Debtors had a prepetition interest in the Property, that the Transfer occurred within one year of the filing of the petition, that Debtors were insolvent at the time of the transfer or likely became insolvent as a result thereof given that absent the real property, the Debtors debts exceed their assets by approximately $21,522. Finally, the Trustee has alleged and the grant deeds attached to the Complaint support a finding that the Transfer was for less than reasonably equivalent value. Based on the foregoing findings, the Court GRANTS the Motion as to the Second Claim.
Recovery of Property pursuant to § 550
Section 550 provides in relevant part that:
[T]o the extent that a transfer is avoided under section 544, 545, 547, 548, 549, 553(b), or 724(a) of this title, the trustee may recover, for the benefit of the estate, the property transferred, or, if the court so orders, the value of such property, from
the initial transferee of such transfer or the entity for whose benefit such transfer was made; or
any immediate or mediate transferee of such initial transferee.
11 U.S.C. § 550(a)(1)-(2). Put simply, § 550 identifies the parties liable for repayment of the avoided or avoidable transfer, and empowers the trustee to recover the property transferred or its value for the benefit of the estate. See Crafts Plus+, Inc. v. Foothill Capital Corp. (In re Crafts Plus+), 220 B.R. 331, 334 (Bankr.W.D.Tex.1998).
Here, it is undisputed that the Defendant is the initial transferee and, having found that the Defendant’s October 14, 2016, Quitclaim Deed is avoidable under § 548, the Trustee may recover, for the benefit of the estate, the Property pursuant to § 550.
Third Claim: Disallowance of Claim pursuant to §502(d)
Section 502(d) provides that … "the court shall disallow any claim of any entity from which property is recoverable under section 542, 543, 550, or 553 of this title or that is a transferee of a transfer avoidable under section 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of this title, unless such entity or transferee has paid the amount, or turned over any such property, for which such entity or transferee is liable under section 522(i), 542, 543, 550, or 553 of this title.
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The plain language of § 502(d) contemplates the filing of a proof of claim by the Defendant in the Debtors’ bankruptcy estate. It is the Court’s ruling that disallowance such a claim is premature at this juncture and the Trustee has not demonstrated cause for the granting of such prospective relief. The Motion is DENIED as to the Third Claim.
Fifth Claim: Declaratory Relief re Community Property
The Trustee seeks an adjudication that the Property is community property and property of the estate. This claim is duplicative of the findings necessary to a ruling as to the Trustee’s Sixth Claim for turnover. As such, the Court is inclined to DENY the Fifth Claim as moot.
Sixth Claim: Turnover under § 542
Section 542 of the Bankruptcy Code provides in pertinent part the following:
... an entity, other than a custodian, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title, or that the debtor may exempt under section 522 of this title, shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate.
11 U.S.C. § 542(a). To support a cause of action for turnover pursuant to Section 542 of the Bankruptcy Code, the bankruptcy trustee has the burden of proof, by a preponderance of the evidence, to establish that: (1) the property is in the possession, custody or control of a noncustodial third party entity; (2) the property constitutes property of the estate; (3) the property is of the type that the trustee could use, sell or lease pursuant to Code Section 363 or that the debtor could exempt under section 522, and (4) that the property is not of inconsequential value or benefit to the estate. In re Shapphire Res., LLC, No. 2:10-BK-57493-RK, 2016 WL 320823, at *5 (Bankr. C.D.
Cal. Jan. 25, 2016) (citing Resnick and Sommer, Collier on Bankruptcy, ¶ 542.02 at 542–8—542–9 (16th ed.2015); see also In re Labib, 2013 WL 5934326, slip op. at *4 (Bankr.C.D.Cal.2013), citing 5 Resnick and Sommer, Collier on Bankruptcy, ¶ 542.02 at 542–5 (16th ed.2013).
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Here, the Property is in the possession of the Defendant because the Trustee
has alleged that Defendant also resides at the Property. Additionally, based on the allegations of the Complaint, the Property constitutes property of the estate based on the chain of title and also based on the testimony of the Debtors as set forth in the Complaint. Further, the Property is real property that could be sold by the Trustee pursuant to 11 U.S.C. § 363. Finally, the Trustee has provided evidence that the value of the Property is approximately $310,000 which exceeds the secured amount owed on the Property of $228,534. Based on the foregoing, the Court finds that the Trustee has met his burden as to turnover. The Motion is GRANTED as to the Sixth Claim.
The possibility of a dispute considering material facts
Defendant was properly served with the summons and complaint. Defendant has failed to respond or to otherwise provide evidence to support any dispute as to material facts. Additionally, here, the Trustee has provided declaratory evidence and judicially noticeable documents (which this court deems admitted), which support the Trustee’s factual assertions. Therefore, no dispute of material facts exists to preclude granting default judgment.
Whether the default was due to excusable neglect
Defendant was properly served with summons and complaint. Defendant failed to respond. Furthermore, Defendant had the opportunity to file opposition to the instant Motion and failed to do so. Finally, Defendant has not filed a motion to set aside the entry of default, nor responded with any written objection. Thus, the Court finds that the default was not due to excusable neglect.
The strong policy underlying the FRCP favoring decision on the merits Although default judgments are ordinarily disfavored, termination of a case
before hearing the merits is allowed when a defendant fails to defend an action under Fed. R. Civ. P. 55. Here, the Defendant’s apparent lack of interest in defending
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himself militates in favor of default judgment being entered.
TENTATIVE RULING
Based on the foregoing, the Court GRANTS the Motion as to the First, Second, and Sixth claims for relief; and the Court DENIES the Motion as to the Third and Fifth Claims.
The Transfer of the Property is avoided and the Trustee may recover the Property pursuant to § 550. Separately, the Court orders turnover of the Property pursuant to § 542.
APPEARANCES REQUIRED.
Debtor(s):
Fernando Fabrigas Sr. Represented By
R Creig Greaves
Defendant(s):
Fernando Fabrigas, Jr. Pro Se
Joint Debtor(s):
Estela F. Fabrigas Represented By
R Creig Greaves
Movant(s):
Charles W. Daff Represented By Brandon J Iskander
2:00 PM
Plaintiff(s):
Charles W. Daff Represented By Brandon J Iskander
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brandon J Iskander
2:00 PM
Adv#: 6:17-01051 ALJINDI v. US DEPARTMENT OF EDUCATION ET AL
document(s)1 Adversary case 6:17-ap-01051. . Nature of Suit: (63 (Dischargeability - 523(a)(8), student loan)) filed by Plaintiff AHMAD JAMALEDDIN ALJINDI
From: 6/7/17 EH
Docket 5
- NONE LISTED -
Debtor(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Defendant(s):
US DEPARTMENT OF Represented By Elan S Levey
Plaintiff(s):
AHMAD JAMALEDDIN ALJINDI Pro Se
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Adv#: 6:17-01066 Gumbs et al v. Davis, Jr et al
From: 6/7/17, 8/30/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard Earl Davis Jr Represented By Todd L Turoci
Defendant(s):
Richard Earl Davis Jr Pro Se
Two6 Sports Management Pro Se
Plaintiff(s):
Angelo M Gumbs Represented By Alexander B Boris
Kandis Gumbs Represented By Alexander B Boris
Trustee(s):
Steven M Speier (TR) Pro Se
2:00 PM
Adv#: 6:17-01006 Pringle v. Qadir et al
From: 3/8/17, 6/28/17, 8/30/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Walie A. Qadir Represented By Batkhand Zoljargal
Marym Qadir Represented By
Batkhand Zoljargal
Najlla Qadir Represented By
Batkhand Zoljargal
Plaintiff(s):
John P. Pringle Represented By Carmela Pagay Todd A Frealy
2:00 PM
Trustee(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:16-01212 Pringle v. Smyth
From: 11/2/16, 1/11/17, 4/26/17, 6/21/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
William Dillingham Smyth Represented By Kevin M Cortright
Defendant(s):
Elena Smyth Represented By
C Scott Rudibaugh
Plaintiff(s):
John P. Pringle Represented By Melissa Davis Lowe Rika Kido
Trustee(s):
John P Pringle (TR) Represented By Leonard M Shulman Melissa Davis Lowe
2:00 PM
Adv#: 6:14-01116 Verbree v. Sanderson
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Defendant(s):
Allen Dale Sanderson Represented By
Robert K McKernan
Plaintiff(s):
Margaret Verbree Represented By Stephen A Madoni
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
Adv#: 6:16-01200 Chicago Title Insurance Company v. Tyes
EH
Docket 50
- NONE LISTED -
Debtor(s):
Yolanda Yvette Tyes Pro Se
Defendant(s):
Yolanda Yvette Tyes Pro Se
Movant(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Plaintiff(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:16-01200 Chicago Title Insurance Company v. Tyes
From: 10/19/16, 11/9/16, 1/11/17, 6/21/17, 10/25/17
Also #10 EH
Docket 1
- NONE LISTED -
Debtor(s):
Yolanda Yvette Tyes Pro Se
Defendant(s):
Yolanda Yvette Tyes Pro Se
Plaintiff(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Trustee(s):
Larry D Simons (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
HOLDING DATE
From: 6/7/17, 7/12/17, 8/2/17, 9/27/17, 10/4/17 Also #13
EH
Docket 208
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Movant(s):
Charles Edward Schrader Pro Se
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17, 4/5/17, 6/7/17, 7/12/17, 8/2/17, 9/27/17, 10/4/17
Also #12 EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
R. Bankr. P. 2004 Also #1
EH
Docket 172
On October 6, 2017, USA Waste renewed its request for a 2004 examination (the "Motion"). In connection with its Motion, USA Waste seeks an order under Rule 2004 permitting it: (a) to issue subpoenas duces tecum to Commodity Trucking Acquisition, LLC ("CTA") and Craig Johnson; (b) to conduct examinations of Craig Johnson and John Sullivan, III; and (c) to conclude the examination of Kim Pugmire. Kim Pugmire is the president of both the Debtor and CTA. Craig Johnson is an attorney who is alleged to have represented and provided advice to the Debtor, CTA and their principals. John Sullivan III is the CFO/COO of CTA.
The request directed to CTA seeks five categories of documents:
Documents related to the Manning Pit operations;
Documents concerning the Article 9 sale;
Documents related to corporate ownership and running of CTA;
Documents related to CTA’s relationship and "contribution payment" to the City of Irwindale; and
Documents/Communications related to the bankruptcy specifically.
The request directed to Craig Johnson ("Johnson") includes requests related to:
Documents concerning the Article 9 sale;
2:00 PM
Documents related to the Manning Pit;
Documents regarding payments made to Johnson by Pugmire, Degler and their affiliates;
Documents related to and Communications regarding the bankruptcy;
Communications with the City of Irwindale related to the Manning Pit;
Communications concerning the settlement of the Dispatch Action; and
Common interest agreements or conflict waivers between Johnson, Debtor, CTA, Pugmire, Degler, or Pugmire and Degler’s affiliates.
Oppositions to the Motion were timely filed by CTA, Johnson, and the Debtor (collectively, the "Oppositions"). USA Waste timely filed its reply to the Oppositions on October 25, 2017 ("Reply").
DISCUSSION
As a threshold matter, the Court examines the Motion cognizant of the existence of a parallel proceeding in Superior Court. On August 15, 2017, this Court granted USA Waste relief from the automatic stay to proceed with its action in state court, titled USA Waste of California, Inc. v. City of Irwindale, et al., Los Angeles Superior Court Case No. KC066276 (the "Dispatch Action"). Following the entry of relief from stay, USA Waste filed and served an amended complaint in the Dispatch Action naming CTA as a party to that action. (Beehler Decl., Ex. 6).
Whether there Exists Good Cause to Conduct Proposed Rule 2004 Examinations
The purpose of a Bankruptcy Rule 2004 examination is "to allow inquiry into the debtor’s acts, conduct or financial affairs so as to discover the existence and location of assets of the estate." In re Dinubilo, 177 B.R. 932, 940 (E.D. Cal. 1993); see also In re Fearn, 96 B.R. 135, 138 (Bankr. S.D. Ohio 1989) (rule’s primary purpose is to ascertain "the extent and location of the estate’s assets [and] such examination is not limited to the debtor or his agents, but may properly extend to creditors and third parties who have had dealings with the debtor") (internal citations omitted). The scope of an examination permitted under Bankruptcy Rule 2004 is broader than discovery allowed under the Federal Rules of Civil Procedure and may be in the nature of a "fishing expedition." In re Duratech Industries, Inc., 241 B.R.
283, 289 (E.D.N.Y.
1999). This broad inquiry extends to "unearthing frauds" and "determining whether
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wrongdoing has occurred." See In re N. Plaza LLC, 395 B.R. 113, 122 n. 9 (S.D. Cal. 2008) (purpose of Rule
2004 examination is "discovering assets and unearthing frauds"); In re Strecker, 251
B.R. 878,
882 (Bankr. D. Colo. 2000) ("[E]xaminations under Rule 2004 are allowed for the purpose of
discovering assets, examining transactions, and determining whether wrongdoing has occurred."). Indeed, Bankruptcy Rule 2004 examinations are often used to investigate potential fraudulent transfer claims and related issues. See, e.g., In re Washington Mut., Inc., 408 B.R. 45, 49 (Bankr. D. Del. 2009) (granting motion to conduct Rule 2004 examination of third party regarding potential claims for business tort, fraudulent transfer, turnover, and preferential transfer); In re Irwin, 2010 WL 4976226, at *1-2 (Bkrtcy. E.D. Pa. 2010) (authorizing Rule 2004 examinations seeking "information relating to asset transfers that may be avoidable as fraudulent transfers"); Matter of Sun Medical Management, Inc., 104 B.R. 522, 524 (Bkrtcy.
M.D. Ga. 1989) (authorizing 2004 examinations to investigate potential fraudulent transfer claims).
USA Waste indicates that good cause exists to conduct the proposed examinations because (1) the examinations are necessary to investigate the value of the estate and its claims, (2) the examinations are necessary to unearth any fraud or wrongdoing in connection with Debtor’s pre-2011 operations, the Article 9 Sale, assets of the estate, and potentially the bankruptcy itself, (3) the availability of discovery in the Dispatch Action does not bar the examinations, and (4) denial of the examinations would cause USA Waste undue hardship and injustice. (Reply at 6:15- 20). As to "good cause", the Court is not persuaded that USA Waste has demonstrated that the information sought in the Motion preserves its rights or is otherwise likely to bring assets back into the estate. The Motion makes frequent reference to "bad faith" and "fraud". However, it is not clear what USA Waste seeks to accomplish in the bankruptcy context should it succeed in uncovering evidence to support its allegations. Assuming that USA Waste’s allegations are proven to be true, it appears that CTA and its principals/officers may be liable for USA Waste’s claims against the Debtor. These are issues, however, being addressed in the Dispatch Action. Further, the Article 9 Sale which resulted in the transfer of the Debtor’s assets to CTA occurred in 2011 and USA Waste has not articulated under which legal theory, or bankruptcy code provision, it could unravel the sale to bring assets back into the bankruptcy estate for the benefit of the Debtor’s creditors. Without more, the Court
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finds that USA Waste has failed to demonstrate good cause exists to permit further discovery via Rule 2004 at this point.
The Availability of Discovery via a Pending Proceeding
Next, the Court has reviewed the Oppositions and is persuaded that under the "pending proceeding" rule, the Motion should be DENIED as to those factual issues being addressed in the Dispatch Action. In particular, a review of USA Waste’s Second Amended Complaint ("SAC") as provided by CTA indicates that the litigation in the Dispatch Action shall address factual issues related to the Manning Pit operations, the Article 9 sale, the corporate ownership and running of CTA (which the SAC refers to as an alter ego of the Debtor), and the relationships between CTA, the Debtor, and their principals with the City of Irwindale (specifically with regard to the settlement and contribution payment made to the City of Irwindale).
In its Reply to the Oppositions, USA Waste argues that the availability of discovery in the Dispatch Action does not bar the proposed examinations. In support, USA Waste argues that discovery in the Dispatch Action is (1) "limited to the two discrete commercial tort claims in the timeframe alleged and matters relevant to those claims or otherwise admissible in the action" and (2) that "financial discovery would not be permitted in the Dispatch Action absent a finding of liability." (Reply at 9:5-16; 10:2-14). In support of its position, USA Waste cites to In re International Fibercom, Inc., 283 B.R. 290, 292-293 (Bankr. D. Ariz. 2002), In re Analytical Sys., Inc., 71
B.R. 408, 413 (Bankr. N.D. Ga. 1987), In re Buick, 174 B.R. 299, 305 (Bankr. D.
Colo. 1994), and Kerner v. Superior Court, 206 Cal. App. 4th 84, 119 (2012) (pretrial discovery of a defendant’s financial condition is prohibited absent a court order permitting such discovery under California Civil Code § 3295).
International Fibercom simply reiterates the general rule that where pending litigation exists, a court should consider whether the information sought under rule 2004 "relates to" the pending litigation. If the information sought relates not to the pending litigation, but to another matter, then the "pending proceeding" rule does not apply. International Fibercom at 292. Further, the court holds the ultimate discretion whether to permit the use of Rule 2004, and courts have for various reasons done so despite the existence of other pending litigation. Id. Here, the Court acknowledges that it is not compelled to follow the "pending proceeding" rule. Nevertheless, the striking similarity between the allegations of the SAC and the
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documents/communications sought by the Motion, indicate that USA Waste is attempting to obtain by means of the bankruptcy, documents and communications which it cannot or is unlikely to obtain via the more narrow discovery rules in the California courts. Strategically, this makes perfect sense. This Court, however, is not persuaded that USA Waste has provided a sufficient basis to permit it to obtain discovery in the bankruptcy at this time.
The Court is further not persuaded that the documents and communications sought regarding the Article 9 sale, the Manning Pit, the City of Irwindale, and corporate ownership of CTA are "beyond the scope" of the issues in the Dispatch Action. See Buick at 305. In fact, USA Waste’s tort claims specifically reference an "active" alleged conspiracy between the City of Irwindale, CTA, and its principals as well as the alleged fraudulent and intentional disposition of valuable assets from Debtor to CTA as bases for its first cause of action for intentional interference with contractual relations. (SAC at ¶93). Finally, USA Waste’s argument that financial documents are not available via the Dispatch Action is unavailing. In Kerner v.
Superior Court, 206 Cal. App. 4th 84, 119, 141 Cal. Rptr. 3d 504, 531 (2012), as modified (May 21, 2012), the rule prohibiting such discovery specifically relates to discovery of a defendant’s financial condition in connection with a claim for punitive damages. Kerner, however, is distinguishable from the instant case, where USA Waste has placed the financial transactions between the Proposed Examinees at issue in the Dispatch Action as supportive of their claim for intentional interference with contractual relations.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to DENY the Motion without prejudice for lack of good cause shown and, alternatively, the Court has determined USA Waste may instead pursue discovery in connection with the Dispatch Action and with the due process safeguards that the California rules of evidence and civil procedure provide.
APPEARANCES REQUIRED.
2:00 PM
Debtor(s):
Dispatch Transportation LLC Represented By Leonard M Shulman Elyza P Eshaghi
Movant(s):
USA Waste of California, Inc. Represented By Paul J Laurin
Trustee(s):
Charles W Daff (TR) Represented By Toan B Chung
12:30 PM
Also #2 EH
Docket 69
- NONE LISTED -
Debtor(s):
Silvia Vargas Represented By
Matthew D Resnik
S Renee Sawyer Blume
Movant(s):
Silvia Vargas Represented By
Matthew D Resnik
S Renee Sawyer Blume
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 82
- NONE LISTED -
Debtor(s):
Silvia Vargas Represented By
Matthew D Resnik
S Renee Sawyer Blume
Movant(s):
Silvia Vargas Represented By
Matthew D Resnik
S Renee Sawyer Blume
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ignacio Figueroa Represented By
Ghada Helena Philips
Joint Debtor(s):
Nadia Elizabeth Figueroa Represented By
Ghada Helena Philips
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Patricia Marie Pergl Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Timothy G Klepeis Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Annie Marie Cordero Represented By Edward G Topolski
Joint Debtor(s):
Lena Renee Bushong Represented By Edward G Topolski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Tony Lopez Sr Represented By Edgar P Lombera
Joint Debtor(s):
Nelida Aguilar Represented By Edgar P Lombera
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jason L Gregg Represented By Christopher Hewitt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Millie Marie Miller Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Hugo Sanchez Cruz Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ramon Gabriel Alvarez Represented By Devin Sawdayi
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Amayda Vanessa Palomares Represented By
Timothy L McCandless
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose M Gaxiola Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jorge Manuel Azmitia Represented By Nicholas M Wajda
Joint Debtor(s):
Yoshiko Azmitia Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: JULIO C. DAVILA
EH
Docket 32
11/2/17
Tentative Ruling:
The Court is inclined to DENY the motion. Section 362(c)(3)(C) creates a presumption that this case was not filed in good faith, and Debtor has not rebutted the presumption by clear and convincing evidence. Specifically, while Debtor has indicated that his previous Chapter 13 case was dismissed for failure to make plan payments, and while Debtor has provided evidence of his current income, there is no evidence regarding Debtor’s income during his previous case. In the absence of this evidence, the Court is precluded from determining whether there is a material change in Debtor’s financial circumstances.
APPEARANCES REQUIRED.
Debtor(s):
Julio C. Davila Represented By Michael Jay Berger
Movant(s):
Julio C. Davila Represented By Michael Jay Berger
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 109
- NONE LISTED -
Debtor(s):
Martin Caballero Represented By Luis G Torres
Joint Debtor(s):
Clementina Caballero Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 67
- NONE LISTED -
Debtor(s):
Thomas Rodriguez Alcala Represented By Halli B Heston
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 71
- NONE LISTED -
Debtor(s):
Lucianna P Wais Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 47
- NONE LISTED -
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 51
- NONE LISTED -
Debtor(s):
Michael Ray Sandoval Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SETERUS INC
EH
Docket 180
11/07/2017
Service: Proper Opposition: Yes, 10/19
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay and GRANT relief sought under ¶3 of prayer for relief.
APPEARANCES REQUIRED.
Debtor(s):
Deborah L. Hill Represented By Michael Smith Sundee M Teeple
Movant(s):
Seterus, Inc. as the authorized Represented By Nichole Glowin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DITECH FINANCIAL LLC
From: 10/3/17 EH
Docket 67
- NONE LISTED -
Debtor(s):
Jeffrey Michael Berger Represented By Jenny L Doling
Joint Debtor(s):
Debra Lynn Berger Represented By Jenny L Doling
Movant(s):
DITECH FINANCIAL LLC Represented By Natalie E Lea Jamie D Hanawalt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
From: 10/3/17 EH
Docket 60
Service is Proper Opposition: Limited
Subject to discussion from the parties regarding adequate protection, the Court is inclined to GRANT the motionb based on the post-confirmation defaults.
APPEARANCES REQUIRED.
Debtor(s):
Zachary Lee Nowak Represented By John F Brady
Movant(s):
WELLS FARGO BANK, N.A. Represented By Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 44
11/07/2017
Service: Proper
Opposition: Yes, filed 10/11
Parties to indicate whether they have reached agreement regarding the terms of an APO.
APPEARANCES REQUIRED.
Debtor(s):
Lilia Ivethe Fong Represented By John F Brady
Movant(s):
Wells Fargo Bank N.A. Represented By Vanessa A Cole Bruce E Brown Senique Moore
Deborah L Rothschild Alexander K Lee
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORP
EH
Docket 56
- NONE LISTED -
Debtor(s):
Eric Kissell Represented By
William J Howell
Movant(s):
TOYOTA MOTOR CREDIT Represented By Mark D Estle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 71
- NONE LISTED -
Debtor(s):
Diana Cescolini Represented By John F Brady
Movant(s):
TOYOTA MOTOR CREDIT Represented By Mark D Estle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: THE BANK OF NEW YORK MELLON
From: 10/24/17 EH
Docket 22
Service is Proper Opposition: Yes
Subject to cure by Debtor or adequate protection discussions, the Court is inclined to GRANT relief from the automatic stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under § 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Lashanda Moniek Shelton Represented By Lionel E Giron Kevin Tang
Movant(s):
The Bank of New York Mellon FKA Represented By
Robert P Zahradka
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: STATE FARM BANK FSB
From: 9/12/17 EH
Docket 13
09/12/2017
Service: Proper Opposition: None
The Debtor had two prior cases pending and dismissed within the prior year. On this basis, the Court grants Movant’s request for an order confirming that there is no stay currently in effect as to the Debtor. Based on the multiple bankruptcies affecting the Property, the Court GRANTs relief from the stay under §§ 362(d)(1) and (d)(4).
GRANT waiver of 4001(a)(3) stay. The Court further GRANTS relief under ¶¶ 3, 6, 9(b), and 11. Relief is DENIED under ¶10(b) for lack of cause shown.
APPEARANCES REQUIRED.
Debtor(s):
Silvia Alvarez Represented By
Filemon Kevin Samson III
Movant(s):
State Farm Bank, F.S.B. Represented By Jason C Kolbe
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BMW BANK OF NORTH AMERICA
Also #10 EH
Docket 24
11/07/2017
Service is Proper
Opposition: Debtor filed nonopposition to Motion on 11/01/17
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. GRANT relief from the co-debtor stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Luis Fernando Montoya Jr. Represented By Anthony B Vigil
Movant(s):
BMW Bank of North America Represented By Bret D. Allen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: NISSAN MOTOR ACCEPTANCE CORPORATION
From: 10/24/17 Also #9
EH
Docket 18
Service is Proper Opposition: Yes
Parties to discuss adequate protection. APPEARANCES REQUIRED.
Debtor(s):
Luis Fernando Montoya Jr. Represented By Anthony B Vigil
Movant(s):
NISSAN MOTOR ACCEPTANCE Represented By
Michael D Vanlochem
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: 21ST MORTGAGE CORPORATION
EH
Docket 11
11/07/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Lidia Alicia Acosta Represented By
Ramiro Flores Munoz
Movant(s):
21st Mortgage Corporation Represented By Diane Weifenbach
Trustee(s):
Lynda T. Bui (TR) Pro Se
2:00 PM
Also #13 EH
Docket 118
BACKGROUND
On November 10, 2016, B&B Family, Incorporated ("Debtor") filed a Chapter 11 voluntary petition. On March 31, 2017, Debtor filed its Chapter 11 plan and disclosure statement. On April 7, 2017, Debtor filed a motion to extend the deadline to obtain plan confirmation, which was, at the time, set for May 15, 2017. On May 2, 2017, after receiving an objection to plan confirmation, Debtor filed an amended Chapter 11 plan and disclosure statement.
Debtor did not lodge a proposed order for its motion to extend the deadline for plan confirmation until May 18, 2017. After the order was lodged, the Court denied the motion, noting that an order extending the deadline for plan confirmation must be signed before the expiration of the existing deadline. Nevertheless, the Court noted that the filing of an amended Chapter 11 plan may restart the plan confirmation deadline.
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On June 13, 2017, Debtor filed another amended Chapter 11 plan (the "Plan") and disclosure statement. On July 10, 2017, Debtor filed another motion to extend the deadline for plan confirmation. The Court granted that motion, and extended the deadline for plan confirmation to October 26, 2017.
On July 31, 2017, Debtor filed another amended disclosure statement, which was approved on August 3, 2017. On August 25, 2017, Debtor filed a motion to continue the plan confirmation hearing, which was granted on August 28, 2017.1 On October 11, 2017, Debtor filed a brief in support of plan confirmation. No objections to confirmation have been received by the Court.
DISCUSSION
Ballots
Pursuant to declaration filed September 1, 2017, Debtor timely transmitted its disclosure statement, Chapter 11 plan, ballots, and notice of all relevant dates. Debtor provides ballots received from: (1) Comerica Bank; (2) High Desert Prime LLC; (3) Pawnee Leasing Corporation; (4) a second ballot from Comerica Bank; (5) a ballot from Financial Pacific Leasing; and (6) a final ballot which appears to have not been submitted to the Court. Debtor’s ballot summary lists a seventh ballot received, which is not identified in Debtor’s brief or in Exhibit 2. Debtor asserts that all classes have voted to accept the plan, although the evidence submitted to the Court, namely Exhibit 2 of Debtor’s confirmation brief, without more, demonstrates Class 6 rejecting the plan.
Classes
Class 1: senior secured claim of Comerica Bank, secured by Debtor’s assets.
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Class 4: secured claim of Financial Pacific Leasing, secured by specific equipment.
Class 5: landlord’s claim for arrears.
Class 6: non-priority, non-insider unsecured claims, including the unsecured portions of the claims held by the entities in Class 1 and 4. This class includes Pawnee Leasing Corporation, Comerica Bank, Financial Pacific Leasing (ostensibly), and a fourth unsecured creditor not identified in the confirmation brief or ballot summary.
Class 7: "interest holders of Debtor."
Plan Confirmation
"The bankruptcy court must confirm a Chapter 11 debtor’s plan of reorganization if the debtor provides by a preponderance of the evidence either (1) that the Plan satisfies all thirteen requirements of 11 U.S.C. § 1129(a), or (2) if the only condition not satisfied is the eighth requirement, 11 U.S.C. § 1129(a)(8), the Plan satisfies the ‘cramdown’ alternative to this condition found in 11 U.S.C. § 1129(b), which requires that the Plan ‘does not discriminate unfairly’ against and ‘is fair and equitable’ towards each impaired class that has not accepted the plan." In re Ambanc La Mesa Ltd. P’ship, 115 F.3d 650, 653 (9th Cir. 1997).
As a preliminary matter, the Court notes that Debtor has not directly provided any evidence in support of confirmation. Neither Debtor’s confirmation brief nor Debtor’s proposed plan contains a declaration or any authentication of the attached exhibits.
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Debtor’s disclosure statement, which has been approved by this Court, contains a declaration of Debtor’s principal, however, the exhibits appended to that declaration are not authenticated either.
A. 11 U.S.C. § 1129(a) requirements
1129(a)(1): "The plan complies with the applicable provisions of this title." The legislative history indicates that this requirement primarily refers to the requirements of 11 U.S.C. §§ 1122 and 1123. See In re Multiut Corp., 449 B.R. 323, 333 (Bankr.
N.D. Ill. 1984). Section 1122 deals with the classification of claims, and requires that claims in a single class be substantially similar. Here, Debtor has formed five distinct classes: (1) senior secured creditor; (2) junior secured creditor; (3) landlord; (4) general unsecured; and (5) Debtor’s interest holders. The Court finds that the demarcation of classes is proper. Section 1123 deals with the contents of a plan, and identifies certain mandatory and permissive provisions. It appears that Debtor is in compliance with § 1123(a)(1)-(4), (7)-(8). Regarding § 1123(a)(6), Debtor’s confirmation brief seems to concede that an explicit provision conforming to the Code is required, and Debtor has agreed to insert such a provision into any plan confirmation order. Regarding § 1123(a)(5), the absence of admissible evidence precludes the Court from addressing whether Debtor has demonstrated that there are adequate means provided for the plan’s implementation.
1129(a)(2): "The proponent of the plan complies with the applicable provisions of this title." The legislative history indicates that this requirement primarily refers to the disclosure requirements in § 1125. See In re Capitol Lakes, Inc., 2016 WL 3598536 at
*2 (Bankr. W.D. Wis. 2016). Here, the Court has approved Debtor’s disclosure statement, and Debtor has provided a service declaration indicating that the required documents were served on creditors, and, therefore, it appears that this requirement has been satisfied.
1129(a)(3): Fed. R. Bankr. P. Rule 3020(b)(2) provides that: "If no objection is timely filed, the court may determine that the plan has been proposed in good faith and not by any means forbidden by law without receiving evidence on such issues." Here, no objection has been timely filed, and, as such, the Court deems the Plan to have been
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filed in good faith and not by any means forbidden by law. Therefore, this requirement is satisfied.
1129(a)(4): Article 1(A) of the Plan states: "Professional fees may only be paid upon application to an approval by the court." Therefore, it appears that this requirement has been satisfied.
1129(a)(5): Article V(B) of the Plan describes the proposed post-confirmation management of Debtor, and, as such, it appears that this requirement has been satisfied.
1129(a)(6): This requirement deals with government regulation of the rates of the Debtor and is not applicable to the instant case.
1129(a)(7): Debtor’s confirmation brief asserts that, if the case were converted to Chapter 7, the case would be a no-asset case. Furthermore, Debtor has provided ballots accepting the Plan from all creditors other than Class 6 creditors, who are unsecured creditors. Therefore, it would appear that all creditors have either accepted the Plan or will receive at least as much as would be received in a Chapter 7 liquidation.
1129(a)(8): Based upon the ballot summary provided by Debtor, Classes 1, 4, and 5 (each of which contains a single creditor) have accepted the Plan. As is noted in the Ballot section above, the Ballot results of Class 6 are unclear. The ballot summary (and confirmation brief) provided by Debtor assert that Class 6 has accepted the Plan, while the individual ballots appended to the brief, without more, indicate Class 6 has rejected the Plan. As such, Debtor has failed to demonstrate that § 1129(a)(8) has been satisfied.
1129(a)(9): Article I of the Plan appears to state that all administrative claims and
2:00 PM
priority claims will either be paid in full on the Effective Date of the Plan, or that the holder of the claim has consented to different treatment. The only administrative or priority claim (other than the fees for Debtor’s counsel) that is not to be paid immediately upon the effective date of the Plan is the tax claim held by the California State Board of Equalization, which is to be paid over four years with 7% interest.
Debtor asserts that the California State Board of Equalization’s failure to object to the proposed treatment constitutes acceptance.
1129(a)(10): The ballot summary and ballots submitted by Debtor appear to indicate that at least one impaired class has accepted the Plan, and, therefore, it appears that this requirement is satisfied.
1129(a)(11): This provision requires Debtor to demonstrate that "[c]onfirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization." Debtor has not provided any admissible evidence to the Court that would enable the Court to undertake the required review.
1129(a)(12): Article V(B) of the Plan provides that the quarterly fees of UST will be paid on the effective date of the Plan, and, as such, this provision appears to be satisfied.
1129(a)(13): Debtor has not addressed this provision, ostensibly because it is inapplicable in the instant case.
1129(a)(14): Debtor has not addressed this provision, ostensibly because it is inapplicable in the instant case.
1129(a)(15): Debtor is not an individual, and, therefore, this provision is inapplicable in the instant case.
2:00 PM
1129(a)(16): Debtor asserts that the Plan does not contemplate any transfer of property (other than money), and, as such, that this provision has been satisfied.
Summary of Confirmation Issues:
-First and foremost, Debtor has not provided any evidence in support of confirmation. To the extent that that lack of evidence is particularly important, the absence of supporting evidence is noted below.
-There is no evidence of any confirmation requirements under § 1129.
-Debtor has not provided any evidence of the cash on hand available to make the payments the Plan contemplates being made immediately upon the effective date, which appears to total $58,251.48.
-Debtor has not provided any evidence of its historical financials. As a result, the Court is unable to effectively review the feasibility of the Plan.
-The Plan appears to have incorrectly labelled Exhibit A and Exhibit B.
-Because of the absence of evidence in support of confirmation, Debtor has not demonstrated that it possesses adequate means for the Plan’s confirmation.
2:00 PM
-The ballots submitted to the Court indicate that Class 6 has rejected the Plan. Debtor has only submitted two ballots from Class 6, one indicating acceptance and one indicating rejection. § 1126(c) requires that a majority of the claim holders in a class accept the plan, and that has not occurred here.
-Debtor has not addresses the alternative cram-down mechanism, much less satisfied it.
APPEARANCES REQUIRED.
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci Julie Philippi
2:00 PM
From: 12/13/16, 3/7/17, 5/30/17, 7/25/17, 9/26/17, 10/31/17
Also #12 EH
Docket 8
- NONE LISTED -
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci Julie Philippi
10:00 AM
EH
Docket 13
- NONE LISTED -
Debtor(s):
LaWanda Jenelle Elzy Pro Se
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
EH
Docket 8
- NONE LISTED -
Debtor(s):
Phillip Wayne Gallagher Sr Pro Se
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
EH
Docket 9
- NONE LISTED -
Debtor(s):
Noelle E. Sandoval Represented By
James D. Hornbuckle
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
Also #5 EH
Docket 13
- NONE LISTED -
Debtor(s):
Indolfo Banos Represented By Daniel King
Joint Debtor(s):
Esmeralda Banos Represented By Daniel King
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
Also #4 EH
Docket 15
- NONE LISTED -
Debtor(s):
Indolfo Banos Represented By Daniel King
Joint Debtor(s):
Esmeralda Banos Represented By Daniel King
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
EH
Docket 12
- NONE LISTED -
Debtor(s):
Ruth Kathryn Wardschenk Represented By James P Doan
Joint Debtor(s):
Cheri Lee Wardschenk Represented By James P Doan
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
Docket 9
- NONE LISTED -
Debtor(s):
Jose Alfredo Rodriguez Represented By Daniel King
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
EH
Docket 17
- NONE LISTED -
Debtor(s):
Maurice Anson Harris Pro Se
Joint Debtor(s):
Crystal Ann Harris Pro Se
Trustee(s):
Robert Whitmore (TR) Pro Se
11:00 AM
Corporate Resolution Authorizing Filing of Petition
Corporate Ownership Statement EH
Docket 15
- NONE LISTED -
Debtor(s):
Chooza, LLC Represented By
Jerome S Demaree
Trustee(s):
Larry D Simons (TR) Pro Se
11:00 AM
Docket 22
11/8/2017
No opposition has been filed.
Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,306.24 Trustee Expenses: $ 121.20
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Scott MacGregor Whitehurst Represented By Robert W Ripley
Joint Debtor(s):
Erin Marie Pollock Represented By Robert W Ripley
Trustee(s):
Charles W Daff (TR) Pro Se
11:00 AM
From: 10/25/17 EH
Docket 40
BACKGROUND
On August 15, 2016, Jesus & Yovana Guillen ("Debtors") filed a Chapter 7 voluntary petition. On November 23, 2016, UST filed a motion for order requiring Hugo Laguna ("Laguna") to pay fines to the UST, pay damages to Debtor, and disgorge fees received. On December 16, 2016, Debtors filed a declaration clarifying answers that were provided at the meeting of creditors. On December 22, 2016, Hugo Laguna ("Laguna") filed a late declaration. After continuing the hearing, Laguna and UST eventually stipulated to a resolution of the matter. The Court entered an order on April 19, 2017, requiring Laguna to pay $100 to Debtors within thirty days, and to pay $250 to UST within sixty days. Laguna was to file a compliance declaration regarding the former within forty-five days.
On May 23, 2017, the case was closed. On September 22, 2017, the case was reopened, and on September 25, 2017, UST filed a motion to fine and enjoin Laguna. UST asserts that Laguna has not complied with the Court order of April 19, 2017. On October 20, 2017, Laguna filed a late response. Laguna asserts that he paid $250 to UST shortly after filing the instant motion.
11:00 AM
DISCUSSION
11 U.S.C. § 110(j)(3) states: "The court, as part of its contempt power, may enjoin a bankruptcy petition preparer that has failed to comply with a previous order issued under this section. The injunction under this paragraph may be issued on the motion of the court, the trustee, or the United States trustee."
As noted by UST, in order to obtain civil contempt sanctions, a movant must demonstrate: (1) violation of a court order; (2) beyond substantial compliance; (3) not based on a good faith and reasonable interpretation of the order; and (4) by clear and convincing evidence. See Labor/Cmty. Strategy Ctr. V. L.A. Cnty. Metro. Transp.
Auth., 564 F.3d 1115, 1123 (9th Cir. 2009). As is evidenced by the docket and UST’s motion, Laguna has failed to comply with the Court’s order. The Court’s order was simple and unambiguous, and there is clear and convincing evidence that Laguna has not complied. Therefore, the Court will issue the requested injunction.
11 U.S.C. § 110(h)(5) states: "A bankruptcy petition preparer shall be fined not more than $500 for each failure to comply with a court order to turn over funds within 30 days of service of such order." Here, the Court’s order was entered over six months ago, and was straightforward, requiring payment of a total of $350. The order was entered in response to a stipulation between UST and Laguna, and, therefore, Laguna was certainly aware of the order.
TENTATIVE RULING
The Court is inclined to GRANT the motion to the extent that the motion seeks an injunction enjoining Laguna from providing bankruptcy preparer services. Parties to address Laguna’s compliance with payment obligations.
11:00 AM
APPEARANCES REQUIRED.
Debtor(s):
Jesus Ramirez Guillen Pro Se
Joint Debtor(s):
Yovana Mondagron Guillen Pro Se
Movant(s):
United States Trustee (RS) Represented By Mohammad Tehrani
Trustee(s):
Arturo Cisneros (TR) Pro Se
11:00 AM
EH
Docket 54
- NONE LISTED -
Debtor(s):
Walter Ray Henderson Represented By Alec L Harshey
Joint Debtor(s):
Anne Budell Henderson Represented By Alec L Harshey
Movant(s):
Lynda T. Bui (TR) Pro Se
Trustee(s):
Lynda T. Bui (TR) Pro Se
11:00 AM
Docket 1
- NONE LISTED -
Debtor(s):
Joshua Cord Richardson Pro Se
2:00 PM
Adv#: 6:17-01191 Frealy v. Cebadas et al
A. Frealy against Armando Cebadas, Jose Alfredo Cebadas Soto, Victor Armando Cebadas Soto, Martha Lorena Soto Jimenez. (Charge To Estate). (Attachments: # 1 Adversary Coversheet) Nature of Suit: (91 (Declaratory judgment)),(14 (Recovery of money/property - other)),(13 (Recovery of money/property - 548 fraudulent transfer)),(31 (Approval of sale of property of estate and of a co-owner - 363(h))),(11 (Recovery of money/property - 542 turnover of property))(Pagay, Carmela)
EH
Docket 1
- NONE LISTED -
Debtor(s):
Martha Lorena Soto Jimenez Represented By Marlin Branstetter
Defendant(s):
Armando Cebadas Pro Se
Jose Alfredo Cebadas Soto Pro Se
Victor Armando Cebadas Soto Pro Se
Martha Lorena Soto Jimenez Pro Se
Plaintiff(s):
Todd A. Frealy Represented By Carmela Pagay
2:00 PM
Trustee(s):
Todd A. Frealy (TR) Represented By Carmela Pagay
2:00 PM
Adv#: 6:17-01156 Daff v. Fabrigas, Jr.
2) Avoidance of Constructive Fraudulent Transfers and Recovery of Same [11 U.S.C. §§ 544, 548, 550, 551; CAL. CIV. CODE §§ 3439.04, 3439.05, 3439.07, 3439.08, 3439.09]; 3) Disallowance of Claims [11 U.S.C. §502(d)]; 4) Unjust Enrichment [11 U.S.C. § 105]; 5) Declaratory Relief [11 U.S.C. §§ 541, 544; FRBP 7001(9)]; AND 6) Turnover of Property of the Estate [11 U.S.C. § 542] Nature of Suit: (13 (Recovery of money/property - 548 fraudulent transfer)),(91 (Declaratory judgment)),(11 (Recovery of money/property - 542 turnover of property)) (Iskander, Brandon)
EH
Docket 1
- NONE LISTED -
Debtor(s):
Fernando Fabrigas Sr. Represented By
R Creig Greaves
Defendant(s):
Fernando Fabrigas, Jr. Pro Se
Joint Debtor(s):
Estela F. Fabrigas Represented By
R Creig Greaves
Plaintiff(s):
Charles W. Daff Represented By
2:00 PM
Trustee(s):
Brandon J Iskander
Charles W Daff (TR) Represented By Lynda T Bui Brandon J Iskander
2:00 PM
Adv#: 6:16-01310 Swift Financial Corporation d.b.a. Swift Capital v. Castillo
From: 5/3/17, 9/13/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Francisco Javier Castillo Represented By Joseph M Tosti
Defendant(s):
Francisco Javier Castillo Pro Se
Plaintiff(s):
Swift Financial Corporation d.b.a. Represented By
Lazaro E Fernandez
Trustee(s):
Robert Whitmore (TR) Pro Se
2:00 PM
Adv#: 6:17-01190 Speier v. U.S. Trust, Bank of America Private Wealth Managem
EH
Docket 1
- NONE LISTED -
Debtor(s):
Hilary D Hill Represented By
Matthew D Resnik David Brian Lally
Defendant(s):
U.S. Trust, Bank of America Private Represented By
Benjamin Nachimson
Hilary D Hill Represented By
David Brian Lally
Plaintiff(s):
Steven M Speier Represented By Robert P Goe Donald Reid
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
2:00 PM
Elizabeth A LaRocque
2:00 PM
Adv#: 6:15-01370 Speier v. Test-Rite Products Corp. et al
§ 3439.04(a)(1) and Recovery of Avoided Transfers Pursuant to 11 U.S.C. § 550; (2) Fraudulent Transfer Pursuant to 11 U.S.C. § 548(a)(1)(A) and Recovery of Avoided Transfers Pursuant to 11 U.S.C. § 550; (3) Fraudulent Transfer Pursuant to 11 U.S.C. § 544(b) and Cal. Civ. Code §§ 3439.04(a)(2), 3439.05 and Recovery of Avoided Transfers Pursuant to 11 U.S.C. § 550; (4) Fraudulent Transfer Pursuant to 11 U.S.C. § 548(a)(1)(B) and Recovery of Avoided Transfers Pursuant to 11 U.S.C. § 550; (5) Conversion; (6) Unlawful Payment of Dividends; (7) Breach of Fiduciary Duty by Officer; (8) Breach of Fiduciary Duty by Controlling Shareholder; and (9) Declaratory Relief as to Alter Ego Nature of Suit: (13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 3/2/16, 4/6/16, 4/27/16, 6/29/16, 7/20/16, 8/3/16, 9/28/16, 11/9/16, 3/29/17, 8/2/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Master Design Inc Represented By Eric M Sasahara John Y Kim
Defendant(s):
Test-Rite Products Corp. Represented By
2:00 PM
Julie A Garcia John Y Kim Aaron S Craig Brian Wheeler
Test-Rite International (U.S) Co. Represented By
Julie A Garcia John Y Kim Aaron S Craig
Test-Rite International Co. Ltd. Represented By Julie A Garcia Aaron S Craig Joon M Khang John Y Kim Brian Wheeler
Chester Lee Represented By
Julie A Garcia Joon M Khang Aaron S Craig Brian Wheeler
Christina Ma Represented By
Julie A Garcia Joon M Khang Aaron S Craig Brian Wheeler
Test-Rite International (US) Co. Ltd. Represented By
Joon M Khang Julie A Garcia John Y Kim Aaron S Craig Brian Wheeler
Test-Rite Products Corp. Represented By Joon M Khang Julie A Garcia
2:00 PM
John Y Kim Aaron S Craig
Plaintiff(s):
Steven M Speier Represented By Robert P Goe Marc C Forsythe
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe Marc C Forsythe Donald Reid
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
Also #20 EH
Docket 36
BACKGROUND
On June 23, 2016, Revere Financial Corporation ("Revere") filed a complaint against Don Burns ("Burns"), and, on June 30, 2016, the complaint was amended. After Burns failed to answer or otherwise respond to the complaint, the clerk entered default against Burns on November 16, 2016.
On April 21, 2017, Revere filed a motion for default judgment. On May 4, 2017, Burns filed a motion to set aside default and an answer. On May 24, 2017, Revere filed its opposition to the motion to set aside default. At a hearing on June 7, 2017, the Court instructed the parties that it would conditionally grant the motion to set aside default upon payment of reasonable costs, and requested further briefing regarding Revere’s costs incurred as a result of Burns’s delay. At a continued hearing on July 12, 2017, after the Court posted a tentative ruling reducing the fees requested by Revere, the Court continued the motion to set aside default to allow further briefing from parties. The fee dispute has not yet been resolve and no order has been entered
2:00 PM
related to the motion to set aside default.
On June 30, 2017, Burns filed a motion to dismiss. On August 9, 2017, Revere filed their opposition to the motion to dismiss.
DISCUSSION
Despite the fact that Burns is still in default, neither party has briefed the impact of that status on Burns’s motion to dismiss. A legal scholar previous wrote that "the defaulting party loses his standing to contest the truth of all facts that are ‘well- pleaded’ in the non-defaulting party’s complaint." Peter H. Bresnan & James P. Cornelio, Relief from Default Judgments Under Rule 60(b) – A Study of Federal Case Law, 49 Fordham L. Rev. 956, 959-60 (1981) (collecting cases); see also Thomson v. Wooster, 114 U.S. 104, 112-14 (1885) ("From the authorities cited, and the express language of our own rules in equity, it seems clear that the defendants, after the entry of the decree pro confesso, and while it stood unrevoked, were absolutely barred and precluded from alleging anything in derogation of, or in opposition to, the said decree, and that they are equally barred, and precluded from questioning its correctness here on appeal, unless on the face of the bill it appears manifest that it was erroneous and improperly granted."). Burns’s motion to dismiss raises a legal argument, however, not a factual argument.
Courts appear willing to simultaneously grant motions to set aside default and dismiss the case. See, e.g., Mineo Yoshida v. Daikokuya Co., Ltd., 2008 WL 11338257 (C.D. Cal. 2007). Other courts have been more specific with regard to the order in which the motion to set aside default and the motion to dismiss must be considered. See Everest Indem. Ins. Co. v. Demarco, 2013 WL 12136578 at *2 (C.D. Cal. 2013) ("Before the Court can consider their motion to dismiss, the default must be set aside pursuant to Fed. R. Civ. P. Rule 55(c)."). Where, as is the case here, the Court has merely orally indicated that it will set aside default upon the occurrence of a condition which has not yet been defined, and may or may not come to pass, the Court considers it improper to rule on the motion to dismiss. Therefore, the Court will continue the matter for Burns to obtain a setting aside of the default.
2:00 PM
TENTATIVE RULING
The Court is inclined to CONTINUE the matter for fee payment, if any, to be made, and an order to be entered setting aside the default.
APPEARANCES REQUIRED.
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Represented By Don C Burns
Movant(s):
Don Cameron Burns Represented By Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns Don C Burns
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
2:00 PM
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar Carmela Pagay
Franklin R Fraley Jr
2:00 PM
Adv#: 6:16-01163 Revere Financial Corporation v. Burns
From: 8/31/16, 11/2/16, 1/11/17, 3/8/17, 6/7/17, 8/2/17, 8/23/17
Also #19 EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas Jay Roger Represented By Summer M Shaw
Defendant(s):
Don Cameron Burns Represented By Don C Burns
Plaintiff(s):
Revere Financial Corporation Represented By Franklin R Fraley Jr
Trustee(s):
Helen R. Frazer (TR) Represented By Laurel R Zaeske Arjun Sivakumar
2:00 PM
Carmela Pagay Franklin R Fraley Jr
12:30 PM
EH
Docket 76
11/09/2017
Background:
On November 30, 2012 ("Petition Date"), Jacquelyn Anna Palmer ("Debtor") filed for chapter 13 relief. Amrane Cohen is the duly appointed chapter 13 trustee ("Trustee"). On September 27, 2017, Debtor filed her Objection to Claims # 7-1 of Tidewater Finance Company ("Claimant").
Service was proper and no opposition or response has been filed.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord
12:30 PM
Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
The Debtor objects only to the "secured" portion of Claim No. 7-1.
Specifically, the Debtor asserts, without legal citation or authority, that because she "gave her furniture to a co-worker who had lost everything in a fire" and is "no longer in possession of the furniture" the secured amount should be disallowed.
Tentative Ruling
Having failed to provide legal authority for the proposition that the gifting of property subject to a security interest suffices to extinguish such lien, the tentative ruling is that the Objection be OVERRULED.
APPEARANCES REQUIRED.
Debtor(s):
Jacquelyn Anna Palmer Represented By Steven A Alpert
Movant(s):
12:30 PM
Jacquelyn Anna Palmer Represented By Steven A Alpert
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
From: 9/14/17 EH
Docket 154
- NONE LISTED -
Debtor(s):
Michael L Anderson Represented By Javier H Castillo
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 56
- NONE LISTED -
Debtor(s):
Mary Black-Williams Represented By Marjorie M Johnson
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 47
- NONE LISTED -
Debtor(s):
Arthur D Garcia Represented By James T Lillard
Joint Debtor(s):
Kathy L Garcia Represented By James T Lillard
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 71
- NONE LISTED -
Debtor(s):
Penelope Ann Young Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 62
- NONE LISTED -
Debtor(s):
Victor M. Menez Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Marilee J. Menez Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:32 PM
HOLDING DATE
From: 5/4/17, 8/24/17, 8/31/17, 9/14/17 EH
Docket 44
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
12:32 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
From: 8/31/17, 9/14/17 Also #9
EH
Docket 26
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Joint Debtor(s):
Anne Louise Goodman Represented By
12:32 PM
Samer A Nahas Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
(Holding Date)
From: 5/4/17, 8/24/17, 8/31/17, 9/14/17 Also #8
EH
Docket 13
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
Theresa Mann Represented By Andrew L Leff
12:32 PM
Jose Pastora Represented By
Andrew L Leff
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Adv#: 6:17-01054 Amarillo College of Hairdressing, Inc. v. Lopez
EH
Docket 24
On November 18, 2016, Javier and Carmen Lopez (collectively, "Debtors") filed a Chapter 13 voluntary petition. On March 6, 2017, Amarillo College of Hairdressing, Inc. ("Plaintiff") filed a non-dischargeability complaint against Debtors. No answer has been filed.
Plaintiff specifically seeks to amend the complaint to join the Javier Lopez’s wife as a co-defendant and asserts that the amendment will not include changes to the factual allegations or claims. Service of the Motion was proper and no opposition has been filed.
DISCUSSION
Fed. R. Civ. P. Rule 15(a)(1)-(2) states:
A party may amend its pleading once as a matter of course within:
12:32 PM
21 days after serving it, or
if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f) whichever is earlier
In all other cases, a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.
Here, the standard of Fed. R. Civ. P. Rule 15(a)(2) applies.
As is noted by Plaintiff, "leave to amend should be granted unless amendment would cause prejudice to the opposing party, is sought in bad faith, is futile, or creates undue delay." Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992).
Here, Plaintiff has timely moved to amend its complaint. There is no indication of bad faith on the part of Plaintiff and Debtors have not argued that leave to amend would be prejudicial. The Federal Rules of Civil Procedure instruct the Court to "freely give leave when justice so requires." Here, where Plaintiff has promptly moved to amend the complaint prior to the filing of any responsive pleading by the Defendant, justice requires the Court grant leave to amend.
TENTATIVE RULING
The Court is inclined to GRANT the motion. Plaintiff to lodge an order indicating that the Motion is granted and that the Clerk of Court shall issue an alias summons to be served on Carmen Lopez by the Plaintiff.
APPEARANCES REQUIRED.
12:32 PM
Debtor(s):
Javier Lopez Represented By
Christopher Hewitt
Defendant(s):
Javier Lopez Represented By
Christopher Hewitt
Joint Debtor(s):
Carmen Lopez Represented By Christopher Hewitt
Movant(s):
Amarillo College of Hairdressing, Represented By
Eamon Jafari
Plaintiff(s):
Amarillo College of Hairdressing, Represented By
Eamon Jafari
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Adv#: 6:17-01054 Amarillo College of Hairdressing, Inc. v. Lopez
From: 5/11/17, 6/22/17, 8/17/17, 10/19/17
Also #10 EH
Docket 1
- NONE LISTED -
Debtor(s):
Javier Lopez Represented By
Christopher Hewitt
Defendant(s):
Javier Lopez Represented By
Christopher Hewitt
Joint Debtor(s):
Carmen Lopez Represented By Christopher Hewitt
Plaintiff(s):
Amarillo College of Hairdressing, Represented By
Eamon Jafari
12:32 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
From: 9/21/17, 10/5/17 Also #13
EH
Docket 24
TENTATIVE
The Court having reviewed the motion, finding notice and service to be proper and reviewed the opposition, the Court is inclined to DENY the motion without prejudice. Specifically, as is noted in the opposition, Debtors have not submitted evidence which clearly establishes the amount owing on the senior security interest. Debtors have submitted a payoff quote, dated July 20, 2017, which states that the total amount due is $347,890.95. Debtors have additionally submitted a letter, dated May 17, 2017, which states that the remaining deferred principal amount is $129,872.54. Debtors’ motion adds the two above amounts together, and asserts that the sum is the total amount due.
Nevertheless, the relationship between the two documents submitted by Debtors is unclear. The payoff quote submitted is dated approximately two months later than the letter, and, therefore, the letter cannot refer to the payoff quote. Because of this lack of clarity, Debtors have not established the amount owing on the senior security interest.
APPEARANCES REQUIRED.
12:32 PM
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Movant(s):
John E Neilsen Sr Represented By Julie J Villalobos
Kathy A Neilsen Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
John E Neilsen Sr Represented By Julie J Villalobos
Joint Debtor(s):
Kathy A Neilsen Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
EH
Docket 24
11/09/2017
BACKGROUND
On September 6, 2017, Oracio Hernandez ("Debtor") filed for chapter 13
relief.
The petition reflects that Debtor was assisted with the instant filing by the Law Office of Aalok Sikand ("Counsel"). On September 26, 2017, the case was dismissed for failure of the Debtor to file schedules.
On October 2, 2017, the Office of the United States Trustee ("UST") filed its Notice of Motion and Motion for Order Compelling Attorney to File Disclosure of compensation Pursuant to 11 U.S.C. § 329 ("Motion"). Service was proper and the Motion is unopposed.
DISCUSSION
Section 329(a) provides, in pertinent part that:
Any attorney representing a debtor in a case under this title, or in
12:32 PM
connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation
11 U.S.C. § 329(a).
The UST indicates that Counsel failed to file a Statement of Attorney Compensation (Ex. 3), which thereby prevents the Court and parties in interest an opportunity to review the reasonableness of the fees charged. Moreover, section 329 is a mandatory provision of the code.
TENTATIVE RULING
Based on the foregoing, the Motion is GRANTED in its entirety. Counsel is ordered to file a Statement of Attorney Compensation and the Court shall continue to retain jurisdiction over issues relating to § 329 arising from the instant Motion.
Debtor(s):
Oracio Rosales Hernandez Represented By Aalok Sikand
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Eugene Myers Represented By Paul Y Lee
Joint Debtor(s):
Deborah Myers Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ricardo Munoz Represented By Michael E Clark
Joint Debtor(s):
Roseann Munoz Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maria Leticia Estrada Represented By Raymond Perez
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Francisco R Tamayo Represented By Alla Tenina
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Lauren Nicole Pancucci Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Arnel L Ganzon Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maisha Tamu Mesa Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Julio C. Davila Represented By Michael Jay Berger
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kisha Eugena Stegall-Hill Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 81
- NONE LISTED -
Debtor(s):
Robert B Eppley Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 134
- NONE LISTED -
Debtor(s):
Francisco Javier Medina Represented By Tamar Terzian
Joint Debtor(s):
Maria Guadalupe Medina Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 73
- NONE LISTED -
Debtor(s):
LARON P TAYLOR Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 74
- NONE LISTED -
Debtor(s):
Agnes Smith Represented By
James T Lillard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 50
- NONE LISTED -
Debtor(s):
Ricardo Pimentel Represented By Tamar Terzian
Joint Debtor(s):
Maria Pimentel Represented By Tamar Terzian
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 245
- NONE LISTED -
Debtor(s):
Jose N Recinos Represented By Michael Smith Sundee M Teeple
Joint Debtor(s):
Patricia Recinos Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
EH
Docket 36
- NONE LISTED -
Debtor(s):
Jackqueline D Mitchell Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 68
- NONE LISTED -
Debtor(s):
Eugene S Aguirre Represented By James T Lillard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 30
- NONE LISTED -
Debtor(s):
Kenneth L Salser Represented By Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 66
- NONE LISTED -
Debtor(s):
Donald L Maddox Represented By Michael Smith Sundee M Teeple
Joint Debtor(s):
Lisa A Maddox Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 28
- NONE LISTED -
Debtor(s):
William Fuentes Represented By Marlin Branstetter
Joint Debtor(s):
Martha C Orozco de Fuentes Represented By Marlin Branstetter
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 44
- NONE LISTED -
Debtor(s):
Frank Castodio Represented By Lauren Rode
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 40
- NONE LISTED -
Debtor(s):
Ethel N Odimegwu Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:33 PM
Docket 23
- NONE LISTED -
Debtor(s):
Michael Robert Tucker Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
11:00 AM
EH
Docket 135
Debtor(s):
Matthew Joseph Pautz Represented By Todd L Turoci Julie Philippi
Joint Debtor(s):
Alice Louise Pautz Represented By Todd L Turoci Julie Philippi
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
12:30 PM
Docket 216
Debtor(s):
Brandon Kent Blevins Represented By
Raj T Wadhwani
Joint Debtor(s):
Teresa Taylor Blevins Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 153
Debtor(s):
Stacey Jo West Represented By Arnold H Wuhrman
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
12:30 PM
Docket 110
Debtor(s):
Juana Judith Mejia Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 46
Debtor(s):
John Douglas Bacon Represented By Andrew Moher
Joint Debtor(s):
Monica Marie Bacon Represented By Andrew Moher
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 91
Debtor(s):
Steven L Ross Represented By Manfred Schroer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 65
Debtor(s):
Adam Lee Miederhoff Represented By Dana Travis
Joint Debtor(s):
Cheri Catherine Miederhoff Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 143
Debtor(s):
Clarence White Represented By Steven A Wolvek
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 80
Debtor(s):
Jose Castellanos Represented By Mark E Brenner
Joint Debtor(s):
Hiliana Castellanos Represented By Mark E Brenner
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 65
Debtor(s):
Jacob J Cannon Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Danielle M Cannon Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 57
Debtor(s):
Percival Inciong Represented By Brian C Miles
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 66
Debtor(s):
Sheila Marie Dejesa Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 81
Debtor(s):
Michael Lee Barnes Represented By Todd L Turoci
Joint Debtor(s):
Belinda Ann Barnes Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 69
Debtor(s):
Timm Bruce Bennett Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 64
Debtor(s):
William Meineke Represented By Todd B Becker
Joint Debtor(s):
Kathie Meineke Represented By Todd B Becker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 77
Debtor(s):
Juan C Rodriguez Represented By Michael Smith
Joint Debtor(s):
Cynthia J Rodriguez Represented By Michael Smith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 53
Debtor(s):
Patricia Eagan Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 144
Debtor(s):
Christopher John Helme Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 74
Debtor(s):
Joe A Pickens II Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 62
Debtor(s):
Chris Maddox Represented By Sanaz S Bereliani
Joint Debtor(s):
Christie Michelle Maddox Represented By Sanaz S Bereliani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 66
Debtor(s):
Scott Allan Oswald Represented By Richard Lynn Barrett
Joint Debtor(s):
Lisa Frances Oswald Represented By Richard Lynn Barrett
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 86
Debtor(s):
Ricardo Fabian Zorrilla Represented By Jeffrey N Wishman Leon D Bayer
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 105
Debtor(s):
Randall Meier Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 173
Debtor(s):
Eduardo Javier Meza Represented By Dana Travis
Joint Debtor(s):
Margaret Ruth Morales Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 75
Debtor(s):
Genaro Flores Represented By Luis G Torres
Joint Debtor(s):
Salome Flores Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 72
Debtor(s):
Edgardo Aranda Represented By Paul Y Lee
Joint Debtor(s):
Kelley Aranda Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 50
Debtor(s):
Carl J Charlot Represented By
Michael A Younge
Joint Debtor(s):
Jacinta S Charlot Represented By Michael A Younge
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 65
Debtor(s):
Eugene S Aguirre Represented By James T Lillard
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 43
Debtor(s):
Eric Kissell Represented By
William J Howell
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 85
Debtor(s):
Adrienne J Garcelli Represented By Andy C Warshaw
Joint Debtor(s):
Paul Garcelli Represented By
Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 40
Debtor(s):
Robert Allan Gloeckner Represented By Jenny L Doling
Joint Debtor(s):
Lucia Ann Gloeckner Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 46
Debtor(s):
Horacio Valdez Represented By David Lozano
Joint Debtor(s):
Leticia Isabel Valdez Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 58
Debtor(s):
Donald L Maddox Represented By Michael Smith Sundee M Teeple
Joint Debtor(s):
Lisa A Maddox Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 24
Debtor(s):
Samuel Garcia Represented By
James Geoffrey Beirne
Joint Debtor(s):
Claudia Garcia Represented By
James Geoffrey Beirne
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 40
Debtor(s):
Charles Bowen Blanton Represented By Michael E Clark
Joint Debtor(s):
Heddy Maria Blanton Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 54
Debtor(s):
Donald Lloyd Maki Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 42
Debtor(s):
Matthew Thomas Harper Represented By Norma Duenas
Joint Debtor(s):
Robin Jean Harper Represented By Norma Duenas
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 31
Debtor(s):
Marc Meisenheimer Represented By Lionel E Giron
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 24
Debtor(s):
Ana M. Oliver Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 32
Debtor(s):
Alexis I Barahona Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 34
Debtor(s):
John D Castro Jr Represented By Chris A Mullen
Joint Debtor(s):
Jennifer Manda Castro Represented By Chris A Mullen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 31
Debtor(s):
Barbara Rammell Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 24
Debtor(s):
Gary Lynn Thompson Represented By Edward G Topolski
Joint Debtor(s):
Rebecca Lynn Thompson Represented By Edward G Topolski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 35
Debtor(s):
Charles Mickey Alligood Represented By Neil R Hedtke
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 21
Debtor(s):
David J Darling Represented By April E Roberts
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 26
Debtor(s):
Idalia Temblador-Baisa Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 41
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 8/1/17, 9/12/17, 10/31/17 EH
Docket 114
Service: Proper Opposition: Yes
Movant has established sufficient grounds to support relief from stay under § 362(d)
(1) based on Debtor’s failure to make required post-petition payments. Debtor alleges that more payments have been made to the Movant then the Motion accounts for and that some payments have been misapplied by the Movant, but provides no specificity or detail to support his assertions.
APPEARANCES REQUIRED.
Debtor(s):
Robert Wayne Cook Sr. Represented By Steven A Alpert
Joint Debtor(s):
Kelly Danielle Cook Represented By Steven A Alpert
10:00 AM
Movant(s):
Wells Fargo Bank, N.A . Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SETERUS, INC.
EH
Docket 32
- NONE LISTED -
Debtor(s):
Duane C Lowrey Represented By
W. Derek May
Joint Debtor(s):
Joan M Lowrey Represented By
W. Derek May
Movant(s):
Federal National Mortgage Represented By
Andrew David Goldberg Renee M Parker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BANK OF AMERICA NA
EH
Docket 49
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Richard John Arceneaux Represented By Gregory M Shanfeld
Joint Debtor(s):
Nina Marie Arceneaux Represented By Gregory M Shanfeld
Movant(s):
Bank of America, N.A. Represented By
10:00 AM
Trustee(s):
Christina J O Bonni S Mantovani Asya Landa Cassandra J Richey
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: GATEWAY ONE LENDING & FINANCE
EH
Docket 39
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Sharon Burnom Represented By Christopher Hewitt
Movant(s):
Gateway One Lending & Finance Represented By
Austin P Nagel
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: SETERUS, INC.
From: 10/24/17 EH
Docket 45
Service is Proper Opposition: Yes
Debtors had two bankruptcy cases dismissed in the year prior to filing the instant case. The first case was dismissed on July 25, 2016, for failure to make plan payments. The second case was dismissed on October 24, 2016, for failure to file information.
11 U.S.C. § 362(c)(4)(A)(ii) provides that if a debtor had two previous cases dismissed within a year of the instant case, then, absent court order, the automatic stay does not go into effect. Here, the Court did not impose the automatic stay, and, therefore, the automatic stay was never effective in this case. Therefore, the Court is inclined to GRANT the motion, confirming that the automatic stay is not in effect.
APPEARANCES REQUIRED.
10:00 AM
Debtor(s):
Bartholemew James Ratner Represented By
H Christopher Coburn
Joint Debtor(s):
Pamela J Armijo-Ratner Represented By
H Christopher Coburn
Movant(s):
SETERUS, INC. as the authorized Represented By
James F Lewin
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
EH
Docket 56
- NONE LISTED -
Debtor(s):
Michael Ray Sandoval Represented By Michael E Clark Barry E Borowitz
Movant(s):
Wells Fargo Bank, N.A. as trustee Represented By
Mark D Estle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: FREEDOM MORTGAGE CORPORATION
EH
Docket 41
- NONE LISTED -
Debtor(s):
Fernando Fabrigas Sr. Represented By
R Creig Greaves
Joint Debtor(s):
Estela F. Fabrigas Represented By
R Creig Greaves
Movant(s):
FREEDOM MORTGAGE Represented By Jason C Kolbe
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brandon J Iskander
10:00 AM
MOVANT: CALIFORNIA COAST CREDIT UNION
EH
Docket 28
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY request under ¶ 3 for lack of cause shown. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Tracy Marie Roche Represented By Pamela KleinKauf
Movant(s):
California Coast Credit Union Represented By Lisa S Yun
10:00 AM
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
MOVANT: ST JUDE HERITAGE MEDICAL GROUP
Also #9.1 EH
Docket 66
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
St. Jude Heritage Medical Group, Represented By
Elaine Nguyen Daniel J Weintraub James R Selth
10:00 AM
From: 8/16/17, 8/23/17, 10/3/17, 10/31/17, Advanced From: 11/28/17 Also #9
EH
Docket 1
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
10:00 AM
MOVANT: FREEDOM MORTGAGE CORPORATION
EH
Docket 49
Service is Proper Opposition: Yes
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Alfredo Loera Represented By Paul Y Lee
Joint Debtor(s):
Veronica O Loera Represented By Paul Y Lee
10:00 AM
Movant(s):
Freedom Mortgage Corporation Represented By
Erin M McCartney
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DOUGLAS AND DEANNA PEARSON
From: 10/24/17 EH
Docket 19
Service is Improper Opposition: None
The Court is inclined to DENY the motion. Movant did not serve the motion on the Chapter 7 Trustee, the United States Trustee, or the Debtor pursuant to Local Rule 4001-(1)(c)(1)(C). Furthermore, Movant’s attorney’s declaration requests annulment of the automatic stay to validate certain post-petition acts, however, there is no description of what acts were taken in violation of the automatic stay. Finally, the details of the state court action are unclear. Specifically, it is not clear what role Debtor has in the litigation, and, while Movant appears to wish to proceed against applicable insurance, the motion also seems to indicate that it is unclear whether there is any applicable insurance.
APPEARANCES REQUIRED.
Debtor(s):
Chad Priest Construction, Inc., Represented By Jonathan R Preston
10:00 AM
Movant(s):
Deanna Pearson Represented By Alan J Carnegie
Douglas Pearson Represented By Alan J Carnegie
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 8
Service is Proper Opposition: Yes
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES REQUIRED.
Debtor(s):
Irma Alicia Ortiz Perez Pro Se
Movant(s):
Toyota Motor Credit Corporation Represented By
Austin P Nagel
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: PNC EQUIPMENT FINANCE LLC
EH
Docket 11
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Joshua Anthony Beltran Represented By Neil R Hedtke
Joint Debtor(s):
Mabel Paz Beltran Represented By Neil R Hedtke
10:00 AM
Movant(s):
PNC EQUIPMENT FINANCE, Represented By
Raffi Khatchadourian
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
Docket 23
- NONE LISTED -
Debtor(s):
Timothy Wayne Lambert Represented By Edgar P Lombera
Joint Debtor(s):
Lisa Renee Lambert Represented By Edgar P Lombera
Trustee(s):
John P Pringle (TR) Pro Se
2:00 PM
From: 11/8/16, 12/6/16, 1/10/17, 3/7/17,4/4/17, 4/25/17, 6/27/17, 7/11/17, 9/12/17
EH
Docket 83
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
Adv#: 6:16-01279 Allied Injury Management, Inc. v. One Stop Multi-Specialty Medical Group
From: 1/24/17, 3/7/17, 4/25/17, 6/27/17, 7/11/17, 9/12/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
Nor Cal Pain Management Medical Represented By
Maria K Pum Maria C Armenta
2:00 PM
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
EH
Docket 1
- NONE LISTED -
Debtor(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein
2:00 PM
EH
Docket 27
- NONE LISTED -
Debtor(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein
Movant(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein Robert B Rosenstein Robert B Rosenstein
2:00 PM
From: 10/5/17 Also #16 - #19
EH
Docket 32
- NONE LISTED -
Debtor(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein
Movant(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein Robert B Rosenstein Robert B Rosenstein
2:00 PM
From: 9/26/17 Also #16 - #18
EH
Docket 8
- NONE LISTED -
Debtor(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein
11:00 AM
Docket 39
11/15/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 1,006.29 Trustee Expenses: $ 143.24
The application for compensation is approved and the trustee may submit on the tentative.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Pedro M Flores Pro Se
Joint Debtor(s):
Sandra Flores Pro Se
Trustee(s):
Charles W Daff (TR) Pro Se
11:00 AM
Docket 31
11/15/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 937.54 Trustee Expenses: $ 66.17
The application for compensation is approved and the trustee may submit on the tentative.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Delia Victoria Ruiz Represented By Frank Amador
Trustee(s):
Charles W Daff (TR) Pro Se
11:00 AM
EH
Docket 120
11/15/17
Amounts Requested:
Fees: $18,130 Costs: $538.65
Service of the Application was Proper. The US Trustee filed objection to the Application on 10/31/17. In particular, the US Trustee argues that Applicant’s fees should be reduced by 50% where the mismanagement of the case from its inception undercuts any benefit conferred by Applicant’s services.
In support of the UST’s Objection, the Court takes judicial notice of the record of the June 20, 2017, hearing at which the Debtors’ motions regarding cash collateral were denied. At that same hearing, the Court, primarily on the objections to the use of cash collateral, found that the conduct of the Debtors in using cash collateral without authorization as well as the overall record of the problems with the Debtors’ gross management of the franchises warranted sua sponte conversion of the case. Applicant conceded at the hearing that the case was filed quickly and without a full understanding of the financial situation of the Debtors.
Further, Applicant for its part has opted not to respond to the UST’s objection. Based on the foregoing, the Court tentatively finds that the 50% reduction in fees is appropriate.
APPEARANCES REQUIRED.
11:00 AM
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
Malik Muhammad Asif Represented By Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
Zobia Asif Represented By
Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci
Trustee(s):
Arturo Cisneros (TR) Represented By Thomas H Casey
2:00 PM
Adv#: 6:15-01307 Cisneros v. OIC MEDICAL CORPORATION, a California corporation
A. Cisneros against OIC MEDICAL CORPORATION, a California corporation, LIBERTY ORTHOPEDIC CORPORATION, a California corporation, UNIVERSAL ORTHOPAEDIC GROUP, a California corporation. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 2/24/16, 4/13/16, 6/22/16, 8/24/16, 11/2/16, 2/1/17, 3/8/17, 7/12/17, 9/13/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
OIC MEDICAL CORPORATION, a Represented By
Summer M Shaw George Hanover
LIBERTY ORTHOPEDIC Represented By Summer M Shaw
2:00 PM
George Hanover
UNIVERSAL ORTHOPAEDIC Represented By Summer M Shaw George Hanover
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01309 Cisneros v. DOUGLAS J. ROGER, M.D., INC. DEFINED BENEFIT PLAN
A. Cisneros against DOUGLAS J. ROGER, M.D., INC. DEFINED BENEFIT PLAN. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential Transfer (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(14 (Recovery of money/property - other))
From: 12/30/15, 2/24/16, 4/13/16, 6/22/16, 8/24/16, 11/2/16, 2/1/17, 3/8/17, 7/12/17, 9/13/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
DOUGLAS J. ROGER, M.D., INC. Represented By
Summer M Shaw
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:17-01085 PRINGLE v. Winn et al
EH
Docket 23
On April 28, 2015, Home Security Stores, Inc. ("Debtor") filed its petition for chapter 7 relief. Ralph and Stacy Winn (the "Winns") are the sole shareholders and officers of the Debtor company. Prepetition, the Debtor also employed the Winns’ daughter and their nephew, Stephen Knoch. John P. Pringle is the duly appointed chapter 7 trustee ("Trustee").
On April 28, 2017, the Trustee filed a Complaint for avoidance of transfers, for breach of fiduciary duty for declaratory relief as to ownership of certain property, for violations of the automatic stay, for trademark infringement, and for disallowance of claims (the "Complaint"). The Complaint names the Winns, certain of their relatives, and Sterling Security Products, Inc., as defendants.
On October 19, 2017, the Winns filed a motion to quash (the "Motion"), or, in the alternative, to modify subpoena served upon Accent Computer Solutions, Inc. ("ACS"). ACS is a company the Debtor paid for off-site data storage and backup of the Debtor’s servers, prepetition. The Motion generally asserts that the Trustee has subpoenaed documents from ACS which are protected by the attorney-client privilege. On this basis, the Winns request that the Court quash the subpoena, or in the alternative, that it modify the subpoena to direct ACS to produce any correspondence related to Mr. Winn his counsel to review and redact and/or withhold as necessary
2:00 PM
(subject to the Winns’ counsel providing a detailed privilege log setting forth the specific basis for any redaction or withholding of a particular document).
On November 1, 2017, the Trustee filed his opposition to the Motion and evidentiary objections to the declaration of Ralph Winn (the "Opposition"). On November 8, 2017, the Winns filed their reply ("Reply").
DISCUSSION
As a threshold matter, the Court notes that the Motion to Quash fails to adequately provide the Court with facts supportive of the Motion. Additionally, the Motion is itself inadequate in terms of stating the applicable law.
In the absence of authority to the contrary, it appears that the federal common law of attorney-client privilege applies. In an action based on federal law, the federal common law of attorney-client privilege applies. See FED.R.EVID. 501; Admiral Insurance Co. v. United States District Court, 881 F.2d 1486, 1492 (9th Cir.1989). In particular, the allegations of the Complaint specifically set forth several allegations regarding postpetition conduct of the defendants. Thus, the action appears to be based in federal law. In re Mortg. & Realty Tr., 212 B.R. 649, 652 (Bankr. C.D. Cal. 1997).
Under Ninth Circuit law, the attorney-client privilege under Rule 501 of the Federal Rules of Evidence applies if the following conditions are met:
legal advice of any kind is sought
from a professional legal adviser in his capacity as such,
the communications relating to that purpose,
made in confidence
by the client,
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are at this instance permanently protected
from disclosure by himself or by the legal adviser,
unless the protection has been waived.
Admiral Insurance, 881 F.2d at 1492. The claimant of the attorney-client
privilege must carry the burden of establishing the applicability of the privilege.
United States v. Osborn, 561 F.2d 1334, 1339 (9th Cir.1977).
The attorney-client privilege is waived when the communication between the attorney and client is made in the presence of a third party. United States v. Landof, 591 F.2d 36 (9th Cir.1978) (holding that the attorney-client privilege was waived as to a conversation, where an attorney for a third party attended the meeting). Similarly, the voluntary delivery of a privileged communication by a holder of the privilege to someone not a party to the privilege waives the privilege. United States v. Zolin, 809 F.2d 1411, 1415 (9th Cir.1987) (holding that the contents of certain tapes were privileged because the non-party present at the time the tapes were recorded had a common interest with the party involved in litigation), aff'd in relevant part, 491 U.S. 554, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989).
In support of the Motion, the only first-hand evidence to establish the applicability of the privilege is a declaration of Ralph Winn. In his declaration, Mr. Winn states generally that there is a "strong possibility" that he sent and/or received emails on his desktop computer at the Debtor from Harry Histen and William Simon, both attorneys representing him. (Winn Decl. ¶4). He further states that as a result of his telephone conversations with Mr. Knoch, and on information and belief, there is a substantial possibility that the emails sent to and/or received from Harry Histen and William Simon are stored by ACS and will be produced by ACS pursuant to the Trustee’s subpoena. In Opposition, the Trustee has provided evidence that the Winns identified both Histen and Simon as attorneys for the Debtor.
As to whether Mr. Winn has provided sufficient evidence to establish that he was the "client" when sending communications to the named attorneys through his desktop computer at the offices of the Debtor, US v. Graf is instructive. 610 F.3d
2:00 PM
1148, 1155 (9th Cir. 2010). In Graf, the Ninth Circuit specifically evaluated a trial court’s finding regarding the fifth element of the eight-part test – the identity of the client in a corporate context:
"The administration of the attorney-client privilege in the case of corporations ... presents special problems. As an inanimate entity, a corporation must act through agents. A corporation cannot speak directly to its lawyers." Commodity Futures Trading Comm'n v.
Weintraub, 471 U.S. 343, 348, 105 S.Ct. 1986, 85 L.Ed.2d 372 (1985);
accord Admiral Ins. Co. v. U.S. Dist. Court, 881 F.2d 1486, 1492 (9th Cir.1989) ("As fictitious entities, corporations can seek and receive legal advice and communicate with counsel only through individuals empowered to act on behalf of the corporation."). One of these special problems is that corporate officers, directors, and employees who communicate with corporate counsel on behalf of the corporation may later attempt to claim a personal attorney-client privilege regarding those communications after the corporation has waived its own privilege.
Id. at 1155. In Graf, the trial court determined that the principal of a corporation did not have a reasonable subjective belief, communicated to the named attorneys, that he was represented by the attorneys in his individual capacity. The Ninth Circuit in Graf, indicated that the appropriate test to determine whether a corporate employee sought personal legal advice from the corporate attorneys is the "Bevill test," which it has adopted in situations such as the assertion of attorney-client privilege asserted by the Winns. Id. citing Matter of Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120 (3d Cir. 1986). Under the Bevill test, individual corporate officers or employees seeking to assert a personal claim of attorney-client privilege must affirmatively show five factors:
They must show they approached counsel for the purpose of seeking legal advice.
They must demonstrate that when they approached counsel they made it clear that they were seeking legal advice in their individual rather than in their representative capacities.
They must demonstrate that the counsel saw fit to communicate with them in their individual capacities, knowing that a possible conflict
2:00 PM
could arise.
They must prove that their conversations with counsel were confidential.
And they must show that the substance of their conversations with counsel did not concern matters within the company or the general affairs of the company.
Bevill at 123, 125 (internal citations omitted).
Here, there is no dispute that the Winns as sole shareholders and officers of the Debtor also acted as its agents in their communications with third parties. The declaration of Mr. Winn broadly describes all of his communications with Messrs Histen and Simon as establishing the privilege. However, Mr. Winn’s statements are overbroad and do not specify the type of legal advice being sought nor are his statements supported by declarations of the professionals to corroborate his claims that the communications between himself and Messrs Histen and Simon were related to personal representation as opposed to communications regarding the Debtor or general affairs of the Debtor (for which the Trustee now holds the privilege).
Finally, although the Court need not reach the issue of whether the Winns waived any privilege by using the Debtor’s computers, the Court is inclined to agree with the authorities cited by the Winns which indicate that absent an internal policy by the Debtor indicating that the company could disclose the email communications of its employees, use of the Debtor’s equipment to communicate with the attorneys does not of itself establish a waiver of the attorney-client privilege.
TENTATIVE RULING
The Court’s tentative ruling is that under the Bevill test, the Winns have not established that a personal attorney-client privilege exists over any of Mr. Winn’s communications with the above attorneys and the Motion should be DENIED on that basis.
2:00 PM
APPEARANCES REQUIRED.
Debtor(s):
Home Security Stores, Inc. Represented By Winfield S Payne III
Defendant(s):
Ralph Winn Represented By
Douglas A Plazak
Sterling Security Service, Inc. Represented By Seth W Wiener
Natalia V Knoch Represented By Seth W Wiener
Steven B Knoch Represented By Seth W Wiener
Stacy Winn Represented By
Douglas A Plazak
Movant(s):
Ralph Winn Represented By
Douglas A Plazak
Stacy Winn Represented By
Douglas A Plazak
Plaintiff(s):
JOHN P PRINGLE Represented By Charity J Miller Robert P Goe
Trustee(s):
John P Pringle (TR) Represented By
2:00 PM
Robert P Goe Charity J Miller
2:00 PM
Adv#: 6:17-01197 Itria Ventures, LLC v. Asif et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Defendant(s):
Malik Muhammad Asif Pro Se
Zobia Asif Pro Se
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Plaintiff(s):
Itria Ventures, LLC Represented By Michael F Chekian
Trustee(s):
Arturo Cisneros (TR) Represented By Thomas H Casey
2:00 PM
Adv#: 6:17-01196 Grobstein, Chapter 7 Trustee v. Polacek, as Trustee of the Margaret J. Heath
Declaratory Relief; (2) Accounting; and (3) Turnover of Property of the Estate by Noreen A Madoyan on behalf of Howard B Grobstein, Chapter 7 Trustee against Sharon Polacek, as Trustee of the Margaret J. Heath Revocable Living Trust, 2002, Amended July 1, 2016, or any successor Trustee. (RE: related document(s)1 Adversary case 6:17-ap-01196. Complaint by Howard B Grobstein, Chapter 7 Trustee against Sharon Polacek, as Trustee of the Margaret J. Heath Revocable Living Trust, 2002, Amended July 1, 2016, or any successor Trustee. (Charge To Estate $350.00). Complaint for: (1) Declaratory Relief; (2) Accounting; and (3) Turnover of Property of the Estate (Attachments: # 1 Adversary Cover Sheet) Nature of Suit: (91 (Declaratory judgment)),(11 (Recovery of money/property - 542 turnover of property)) (Madoyan, Noreen) Modified on 9/15/2017. filed by Plaintiff Howard B Grobstein, Chapter 7 Trustee). (Madoyan, Noreen)
EH
Docket 3
- NONE LISTED -
Debtor(s):
Michelle Meredith Represented By Summer M Shaw
Defendant(s):
Sharyn Polacek, as Trustee of the Pro Se
Plaintiff(s):
Howard B Grobstein, Chapter 7 Represented By Noreen A Madoyan
2:00 PM
Trustee(s):
Howard B Grobstein (TR) Represented By Noreen A Madoyan
2:00 PM
Adv#: 6:16-01200 Chicago Title Insurance Company v. Tyes
From: 11/1/17 Also #10
EH
Docket 50
11/15/17
BACKGROUND
On April 25, 2016, Yolanda Yvette Tyes ("Debtor" or "Defendant") filed her petition for chapter 7 relief. Among the creditors of the Debtor’s estate is Chicago Title Insurance Company ("Plaintiff"), the holder of a default judgment obtained against the Debtor, prepetition. On August 1, 2016, Plaintiff filed its complaint for determination of nondischargeability of debt against the Debtor under § 523(a)(2) (the "Complaint").
On October 16, 2009, prepetition, Plaintiff filed a complaint against the Debtor in the Superior Court of California ("State Court Action"). Subsequently, upon Debtor’s default and Plaintiff’s prove-up, the State Court entered a default judgment in favor of the Plaintiff and against the Debtor on January 25, 2010 (the "Judgment"). Plaintiff initially sought relief in this Court by motion for default judgment and collateral estoppel. However, the Court granted the Debtor’s request to set aside the entry of default prior to ruling on the Plaintiff’s default judgment motion. Debtor filed her answer to the Complaint on November 16, 2016. The Debtor has at all times throughout the course of the instant litigation represented herself in pro per.
On September 11, 2017, the Plaintiff filed a Motion for Summary Judgment ("the Motion"). The Debtor, though properly served, has failed to file response or
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opposition to the Motion.
DISCUSSION
Summary judgment should be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c) (made applicable to adversary proceedings by Fed. R. Bankr. P. 7056).
The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts that show a genuine issue for trial. Id. at
324. The court must view the evidence in the light most favorable to the nonmoving party. Bell v. Cameron Meadows Land Co., 669 F.2d 1278, 1284 (9th Cir. 1982). All reasonable doubt as to the existence of a genuine issue of fact should be resolved against the moving party. Hector v. Wiens, 533 F.2d 429, 432 (9th Cir. 1976). The inference drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Valadingham v. Bojorquez, 866 F.2d 1135, 1137 (9th Cir. 1989). Where different ultimate inferences may be drawn, summary judgment is inappropriate. Sankovich v. Insurance Co. of N. Am., 638 F.2d 136, 140 (9th Cir. 1981).
If the moving party meets its initial burden, the non-moving party must set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial. Id. However, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material fact…." Matsushita Electrical Industry Co. v. Zenith Radio Corp., 475 U.S. 574, 586-587 (1986).
A fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
The primary thrust of Plaintiff’s Complaint is that the Debtor in 2006,
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fraudulently obtained two loans in her name and her then-husband’s name from Washington Mutual Bank (for $360,000 and $90,000), by among other things, forging her husband’s name on the loan documents, and then keeping all of the refinancing proceedings, to refinance her then property located at 428 Daisy Avenue, Unit #2, in Long Beach, CA ("Subject Property"). After paying the prior liens on the Property, the Debtor received the difference between the amount of the new loans and the payoff of the prior loans. The result is that the Debtor received a windfall of approximately
$118,500 to the detriment of her ex-husband who then recovered the $118,500 from the Plaintiff. This action was commenced by the Plaintiff to recover those funds from the Debtor.
Section 523(a)(2)(A) provides in relevant part that a discharge under section 727 does not discharge an individual debtor from any debt for obtaining money, property, services, or an extension, renewal, or refinance of credit by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition. 11 U.S.C. § 523(a)(2)(A). In order to maintain a claim for actual fraud, the plaintiff must provide sufficient factual content from which a court can derive that:
the debtor made the representations; (2) that at the time he knew they were false; (3) that he made them with the intention and purpose of deceiving the creditor; (4) that the creditor relied on such representations, and (5) that the creditor sustained the alleged loss and damage as the proximate result of the representations having been made.
In re Taylor, 514 F.2d 1370, 1373 (9th Cir.1975).
The evidence filed in connection with the Motion, and in particular the deposition exerpts of Victor Johnson, Janine Soule-Washington, and the Debtor support the following findings of fact:
The refinance loans paid off the then existing loans on the Subject Property and the surplus amounts served as a cash-out that was deposited into escrow for the benefit of the borrowers;
Plaintiff issued a lender’s title insurance policy to Washington Mutual Bank in connection with both refinance loans consummated on August 31, 2006;
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Co-borrower Victor Johnson’s signatures were forged on all the Washington Mutual Bank refinance loan documents, and that the named notary public whose notary stamp was on the documents, Ms. Janine K. Soule-Washington, was not in fact present when the documents were allegedly signed by Victor Johnson;
The Deed of Trust dated August 31, 2006, securing a loan for $360,000.00 with Washington Mutual Bank against the Subject Property, contained Defendant’s genuine signature and initials;
Plaintiff issued payment to Victor Johnson in the amount of $118,500.00 in order to settle any claims he had against lender Washington Mutual Bank, which represents the approximate difference between the amount of the then existing loans on the Subject Property and the two August 31, 2006 Washington Mutual Bank refinance loans;
Defendant was aware at all times that the documents signed in connection with seeking the refinance funds contained forged initials and signatures of Victor Johnson;
The Deed of Trust and related dated August 31, 2006 securing a loan of
$90,000.00 with Washington Mutual Bank against the Subject Property, and related refinance documents, contained Victor Johnson’s forged signature and initials;
The Deed of Trust dated August 31, 2006, securing a loan for $90,000.00 with Washington Mutual Bank against the Subject Property, and related refinance documents, contained Defendant’s genuine signature and initials;
Neither Defendant nor Victor Johnson personally appeared before notary public Janine Soule-Washington when either the Deed of Trust dated August 31, 2006 securing a loan of $360,000.00 against the Subject Property, or the Deed of Trust dated August 31, 2006, securing a loan for $90,000.00 with Washington Mutual Bank against the Subject Property were executed and notarized;
Defendant participated in the effort to have the initials and signatures of Victor Johnson forged in order to obtain the refinance of the Subject Property;
Defendant received funds after the two August 31, 2006 Washington Mutual Bank loan refinance transactions closed;
The document containing instructions to wire the proceeds from the two August 31, 2006 Washington Mutual Bank loan refinance transactions contained Defendant’s genuine signature;
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Victor Johnson did not receive any portion of the proceeds from the two August 31, 2006 Washington Mutual Bank loan refinance transactions, and thus Defendant kept all the cash-out proceeds for herself;
Victor Johnson informed Defendant prior to her submitting and signing the refinance documents that he would not agree to the second refinance of the Subject Property and demanded instead that Defendant sell the Subject Property;
Victor Johnson had no contact with Defendant between May 2006 and approximately September 2006, when the two August 31, 2006 Washington Mutual Bank loan refinance transactions involving the Subject Property were consummated;
Defendant admitted she had never discussed the two August 31, 2006 Washington Mutual Bank loan refinance transactions with Victor Johnson before they closed;
Victor Johnson did not authorize either of the two August 31, 2006 Washington Mutual Bank loan refinance transactions wherein Defendant and himself were the named borrowers;
Defendant admitted to Victor Johnson that she was involved in the two August 31, 2006 Washington Mutual Bank loan refinance transactions;
Notary public Janine Soule-Washington has never personally notarized any documents for either Defendant or Victor Johnson;
Notary public Janine Soule-Washington let Alvin Colbert borrow her notary journal for purposes of notarizing the August 31, 2006 loan documents, and she was not present when the August 31, 2006 loan documents were executed and notarized;
Alvin Colbert was Defendant’s ex-boyfriend going back to the 1980’s and with whom Defendant had two children prior to meeting Victor Johnson;
Defendant likely forged Victor Johnson’s signature in the two August 31, 2006 Washington Mutual Bank loan refinance transactions because Victor Johnson had good credit;
Fingerprint analysis conducted by the Long Beach Police Department Latent Prints Office in or around June 2007 revealed that the fingerprint impressions next to Defendant’s name in Janine Soule-Washington’s notary journal matched with Defendant’s fingerprint impressions;
Fingerprint analysis conducted by the Long Beach Police Department Latent Prints Office in or around June 2007 revealed that the fingerprint impressions
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next to Victor Johnson’s name in Janine Soule-Washington’s notary journal did not match Victor Johnson’s fingerprint impressions. Based thereon, the
Long Beach Police Department concluded that "it appears Johnson was not the person who was present during the signing of the loan documents";
On January 25, 2010, Judge Geoffrey T. Glass of the California Superior Court, County of Orange, entered a Judgment in favor of Plaintiff and against Debtor in the 2009 State Court Action in the amount of $118,500;
The allegations of the State Court Action are incorporated into Plaintiff’s Complaint for nondischargeability and are supported by the evidence filed in connection with the instant Motion.
Based on the above findings of fact, the Court concludes that (1) the Debtor made false representations to Plaintiff and the associated lending institutions when she knowingly submitted refinance paperwork containing forgeries of her ex-husband Victor Johnson; (2) that at the time the loan documents were submitted, the Debtor knew that her ex-husband’s signature and consent to the refinance had been falsified; (3) that the Debtor worked in concert with her ex-boyfriend, Alvin Colbert, to forge Victor Johnson’s signature and employed the notary journal of Alvin Colbert’s then girlfriend, Janine Soule Washington with the intent and purpose of deceiving the Plaintiff and associated lending institutions; (4) that the Plaintiff and associated lending institutions relied on such representations, assuming them to be true and accurate, when they approved the loans and when Plaintiff extended its title insurance in connection with the transactions, and (5) that the Plaintiff sustained the loss and damage in the amount of $118,500 as the proximate result of the Debtor’s false representations and forgeries having been made.
TENTATIVE RULING
The Court finds that the pleadings, depositions, failure to answer interrogatories, and additional evidence filed in connection with the Motion show that there is no genuine issue as to any material fact and that the Plaintiff is entitled to a judgment as a matter of law. On this basis, the Court GRANTS Summary Judgment in favor of the Plaintiff on the § 523(a)(2)(A) claim in the amount of $118,500.
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Note: Although the Motion makes reference to § 523(a)(6), relief under this provision of the code has was not sought in the Plaintiff’s Complaint. As such, any request for relief under § 523(a)(6) is DENIED without prejudice.
APPEARANCES REQUIRED.
Debtor(s):
Yolanda Yvette Tyes Pro Se
Defendant(s):
Yolanda Yvette Tyes Pro Se
Movant(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Plaintiff(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Trustee(s):
Larry D Simons (TR) Pro Se
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Adv#: 6:16-01200 Chicago Title Insurance Company v. Tyes
From: 10/19/16, 11/9/16, 1/11/17, 6/21/17, 10/25/17, 11/1/17
Also #9 EH
Docket 1
- NONE LISTED -
Debtor(s):
Yolanda Yvette Tyes Pro Se
Defendant(s):
Yolanda Yvette Tyes Pro Se
Plaintiff(s):
Chicago Title Insurance Company Represented By
Charles C H Wu Thanh-Thuy T Luong Vikram M Reddy
Trustee(s):
Larry D Simons (TR) Pro Se
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From: 7/27/17, 10/2/17, 10/18/17 Also #11.1
EH
Docket 96
BACKGROUND
On January 28, 2011, Brad & Deborah Stoddard ("Debtors") filed a Chapter 13 voluntary petition and plan. Debtors’ plan contained a provision, in section V.F, that stated: "The debt of american Education Services will be discharged; the school has been stripped of accreditation and is on probation." The plan was served on American Education Services at P.O. Box 2461, Harrisburg, PA 17105-2461.
On March 14, 2011, "Brazos/US Bank Natnl" filed a proof of claim ("Claim 5") for an unsecured claim in the amount of $35,080.90 on the basis of a student loan. The proof of claim indicating that notices should be sent to "AES/PHEAA, PO Box 8181, Harrisburg, PA 17105." On March 17, 2011, the Court summarily confirmed Debtors’ plan on the basis of the trustee’s recommendation. On March 30, 2011, AES/PHEAA filed a transfer of claim agreement, stating that Claim 5 was being transferred to AEA/PHEAA, and that notices should be sent to "AES/PHEAA, PO Box 8147,
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Harrisburg, PA 17105." On May 24, 2011, the Court entered an order confirming Debtors’ plan.
On December 5, 2016, Debtors received a discharge. On June 1, 2017, Debtors filed a motion for an order to show cause why American Educational Services ("AES") should not be held in contempt for violating the discharge injunction. On June 8, 2017, AES filed its opposition. Debtors allege that the AES violated the discharge injunction through various attempts to collect on Claim 5 after Debtors received a discharge. AES asserts that they did not violate the discharge injunction because: (1) AES was not a creditor at the time Debtor filed their plan; (2) the provision at issue in Debtors’ plan was unclear; and (3) Debtors’ failure to utilize the appropriate procedure precludes the relief sought.
After a hearing on July 27, 2017, the Court issued an order to show cause why Debtors and their former counsel, Matthew Resnik ("Resnik"), should not be sanctioned for including a prohibited provision in a Chapter 13 plan (the "OSC"). On August 14, 2017, Debtors filed their opposition. On August 17, 2017, Resnik filed his opposition. On August 24, 2017, AES filed a reply. After a hearing on August 31, 2017, the Court continued the matter to October 2, 2017. On September 21 & 22, 2017, Resnik supplemented his response.
DISCUSSION
A person who knowingly violates the discharge injunction can be held in contempt under § 105(a) of the Bankruptcy Code. See In re Bennett, 298 F.3d 1059, 1069 (9th Cir. 2002). The moving party has the burden of showing by clear and convincing evidence that the contemnors knowingly and willfully violated a specific and definite order of the court. Id. In addition, the moving party must prove that the creditor: (1) knew the discharge injunction was applicable; and (2) intended the actions which violated the injunction in order to justify sanctions. Id.
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Here, the critical issue is whether Debtors’ plan effectively resulted in a discharge of the debt upon which AES subsequently attempted to collect. There are three distinct issues that warrant attention in connection with the above issue: (1) whether Debtors’ plan was sufficiently clear regarding the debt to be discharged; (2) whether holding that Claim 5 was discharged would violate principles of due process; and (3) whether, and to what extent, it would be appropriate for the Court to exercise its equitable remedies.
The Plan Provision
The plan provision at issue states: "The debt of american Education Services will be discharged; the school has been stripped of accreditation and is on probation." It is crucial that a miscellaneous provision included within a Chapter 13 plan both identify the creditor and claim to be affected by the plan, and explain the proposed treatment of the debtor’s claim. Here, it is not clear that the above provision was adequate in either respect.
First, at the time of the petition date, at the time of the filing of the plan containing the above provision, and at the time of the confirmation hearing, AES was not the holder of Claim 5, but was merely the servicer of Claim 5. While AES subsequently acquired the claim, after the confirmation hearing but before the confirmation order was entered, that subsequent acquisition does not change the fact that AES was not a creditor of Debtors at the time of confirmation, or at the time that service of the plan was made. Although AES did acquire a claim against Debtor between the confirmation hearing and the entry of the confirmation order, such acquisition occurred too late for AES to have an opportunity to timely object to the subject plan provision.
Nor does the fact that Claim 5 identified AES as the party to be noticed affect who was the actual creditor of Debtors. While that identification affects the propriety of the notice given, it does not affect the characterization of AES as a loan servicer, rather
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than a creditor. A loan servicer is not a proper defendant is a non-dischargeability adversary proceeding, see In re Kleckner, 560 B.R. 172, 177 (Bankr. E.D. Pa. 2016), and, likewise, it is not the proper party in a "discharge by declaration."
Furthermore, the contractual interpretation canon that ambiguous language is to be construed against the drafter is appropriate in this circumstance. See generally Maryland Cas. Co. v. Knight, 96 F.3d 1284, 1291 (9th Cir. 1996) (identifying canon). The actual holder of the claim, "Brazos/US Bank Natnl," had no reason to object to the proposed plan, because they were not identified in the plan. Even if "Brazos/US Bank Natnl" were aware that AES was the loan servicer, AES services many loans, and it is entirely possible, indeed probably common, that AES services multiple loans for many individuals. See, e.g., In re Kleckner, 560 B.R. 172, 173 n.1 (Bankr. E.D. Pa. 2016) (AES was servicer for loans held by six different entities). Furthermore, "Brazos/US Bank Natnl" was not served with the plan or noticed of the confirmation hearing, and, therefore, was denied due process. AES meanwhile was not a creditor at the time the plan was served, and would have had no reason to object to plan confirmation; indeed, it is not even clear that AES was a party in interest with standing to object.
Finally, the subject plan provision is unclear regarding the proposed treatment of the "claim." While the plan provision indicates that the claim "will be discharged" it does not indicate any timeframe or conditions for discharge.
While at first glance it may seem that the phrase means the claim is to be discharged upon plan completion, the situation is not so simple. What would have been the effect if Debtors had stated that the claim was to be discharged immediately upon plan confirmation? While such a premature discharge violates the Code, a discharge of a student loan debt at plan completion, without an adversary proceeding and an "undue hardship" determination, also violates the Code. But by using the word "will," a future tense verb, Debtors appear to have intended that the claim would be discharged at some future time, after some further event. Is that future event the completion of plan payments? Or is that event the successful prosecution of an adversary proceeding?
Given such ambiguity, in construing such ambiguous language against the draft, the Court determines that it is appropriate to adopt the most legally appropriate interpretation, that discharge here is subject to an unperformed condition precedent (i.e. the filing of a non-dischargeability complaint), and the condition has not been
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satisfied, as a complaint has not been filed..
In accordance with the above, the Court finds that the subject plan provision, in the absence of a subsequent adversary proceeding, was inadequate to discharge Claim 5.
Notice & Due Process
As is noted in section I, supra, there are three different PO boxes in Harrisburg, Pennsylvania that are relevant here: (1) PO Box 8181, the address located on Claim 5;
PO Box 8147, the address located on the claim transfer filed with the Court; and
PO Box 2461, the address where Debtors served their plan. The record does not detail the precise function of each of these PO boxes, but, presumably, each PO Box is associated with a different department at AES.1
Assuming, arguendo, AES was a creditor at the time of the service of the plan, or if Debtors’ plan provision were to have properly identified the debt, would AES have received due process through the service effectuated by Debtors? The Supreme Court, in Espinosa, deferred to the traditional recitation of due process in this situation: "[d] ue process requires notice ‘reasonable calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 272 (2010) (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). In Espinosa, the Supreme Court concluded that the creditor had received actual notice ostensibly because United Student Aid Funds, Inc. filed a proof of claim. Id. at 265. Here, the same situation is present – Claim 5 was filed prior to the confirmation hearing and appears to be evidence that the holder of Claim 5 had actual notice of the bankruptcy filing prior to confirmation.
Equitable Remedies
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Even before the Supreme Court decided Espinosa, the Ninth Circuit was of the position that a creditor was precluded from challenging a confirmation order, even if the confirmation order contained an illegal provision, if that creditor failed to object during the confirmation process. See, e.g., In re Pardee, 193 F.3d 1083, 1086 (9th Cir. 1999) (citing Trulis v. Barton, 107 F.3d 685, 691 (9th Cir. 1995); In re Gregory, 705 F.2d 1118, 1121 (9th Cir. 1983)). The Ninth Circuit’s approach was the minority approach. See, e.g., In re Escobedo, 28 F.3d 34, 35 (7th Cir. 1994) (confirmed plan that failed to comply with Code’s requirements was "nugatory"); see also 8 Collier on Bankruptcy ¶ 1325.01 (16th ed. 2016) (endorsing the Ninth Circuit’s approach, but collecting cases which indicate that the Second, Fourth, Sixth, and Seventh Circuits disagreed).
While Espinosa declared that a confirmation order was not void simply because it contained an illegal provision, and Ninth Circuit precedent indicates that a creditor is estopped from challenging a confirmation order after the fact, a review of the case law from the previously dissenting circuits illustrates the procedural mechanisms available to the Court, rather than a creditor. For instance, one court, in reconsidering and vacating a confirmed Chapter 13 plan stated the following:
Relief from judgment under Rule 60(b) may be granted sua sponte by the court. A decision under Rule 60(b) is a matter of the court’s discretion. The Rule’s requirement that relief be granted within a ‘reasonable time’ also rests within the sound discretion of the court. While relief under Rule 60(b) is discretionary, it is warranted only upon a showing of extraordinary circumstances that create a substantial danger that the underlying judgment was unjust. The court should also look to whether any intervening rights have been affected by the passage of time since entry of the original judgment.
In re Burgess, 138 B.R. 56, 59 (Bankr. W.D. Wis. 1991); see also In re Carr, 318
B.R. 517 (Bankr. W.D. Wis. 2004) (utilizing the Court’s discretion to revoke, on equitable grounds, a confirmation order that violated the Code). There is no strict timeline for relief from a judgment or order pursuant to Fed. R. Civ. P. Rule 60(b)(4)- (6). See, e.g., In re Hanson, 397 F.3d 482 (7th Cir. 2005) (modifying discharge order to exclude student loan creditor nearly six years later).
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The Court is cognizant of the fact that, unlike most of the cases above, in this situation the Chapter 13 plan was completed, Debtors received a discharge, and the case was closed. The length of time that has elapsed would be a critical factor in any analysis considering whether to revoke or modify the Chapter 13 confirmation order pursuant to Rule 60(b)(6). Currently, there is no motion filed by AES pending before the Court implicating a Rule 60(b)(6) analysis, and because the Court finds that Debtors’ drafting errors precludes a finding that Claim 5 was discharged, the Court declines to undertake such analysis at the current time.
CONCLUSION
In accordance with Section II.I, supra, the Court concludes that Claim 5 was not discharged. Because Claim 5 was not discharged, there can be no violation of the discharge injunction, and, therefore, the motion is DENIED.
APPEARANCES REQUIRED.
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Movant(s):
Brad Stoddard Represented By Matthew D Resnik
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Matthew D Resnik David Brian Lally David Brian Lally
Deborah Ann Stoddard Represented By Matthew D Resnik Matthew D Resnik David Brian Lally David Brian Lally
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
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(Holding date)
From: 8/31/17, 10/2/17, 10/18/17 Also #11
EH
Docket 110
BACKGROUND
On January 28, 2011, Brad & Deborah Stoddard ("Debtors") filed a Chapter 13 voluntary petition. On May 24, 2011, Debtors’ Chapter 13 plan was confirmed. The plan contained the following provision, section V.F.: "The debt of american Education Services will be discharged; the school has been stripped of accreditation and is on probation." On December 5, 2016, Debtors received a discharge, and, on January 13, 2017, the case was closed.
On May 11, 2017, Debtors filed a motion for an order to show cause why creditor American Educational Services ("AES") should not be held in contempt court, and for damages and attorney’s fees, for intentionally violating the discharge injunction.
Because of inadequate service, the motion was originally denied without prejudice, and Debtors refiled the motion on June 1, 2017. AES filed its opposition on June 8, 2017. At a hearing on the matter on July 27, 2017, the Court continued the matter to
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October 2, 2017.
On July 31, 2017, the Court issued its Order to Show Cause why Matthew Resnik ("Resnik"), Brad Stoddard, and Deborah Stoddard should not be sanctioned for including a prohibited provision in a Chapter 13 plan (the "OSC"). Debtors filed their opposition on August 14, 2017. Resnik filed his opposition on August 17, 2017. AES filed its reply on August 24, 2017. Resnick filed supplemental responses on September 21 and 22, 2017.
DISCUSSION
Introduction
The OSC is issued in light of, and accordance with, the Supreme Court’s decision in United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010). In Espinosa, the bankruptcy court had confirmed a Chapter 13 plan which purported to discharge student loan debt without complying with the applicable procedural requirements.
After intercepting debtor’s income tax refund to use towards payment of student loans, the creditor argued that the bankruptcy court’s order confirming the debtor’s Chapter 13 plan should be declared void. The Supreme Court held that, absent a jurisdictional or due process violation (which was not present) the bankruptcy court’s legal error in confirming the Chapter 13 plan with a provision that impermissibly discharged student loan debt, did not render the order void. At the conclusion of its opinion, the Supreme Court opined:
We acknowledge the potential for bad-faith litigation tactics. But expanding the availability of relief under Rule 60(b)(4) is not an appropriate prophylaxis. As we stated in Taylor v. Freeland & Kronz, 503 U.S. 638 (1992), "debtors and their attorneys face penalties under various provisions for engaging in improper conduct in bankruptcy proceedings." Id. at 644; see also Fed. R. Bankr. P. Rule 9011. The specter of such penalties should deter bad-faith attempts to discharge student loan debt without the undue hardship finding
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Congress required.
Espinosa, 559 U.S. at 278. Here, the Court is tasked with interpreting and implementing the guidance provided by the Supreme Court in Espinosa.
Debtors and Resnick have filed separate responses to the Court’s OSC. Debtors have raised five arguments in their opposition: (1) that the Court already found that the plan was filed in good faith; (2) that the plan must be given res judicata effect; (3) that the Court is exceeding its discretionary sanctioning authority; (4) that the OSC is an illegal ex post facto law; and (5) that Fed. R. Bankr. P. Rule 9011 is inapplicable.
Resnick offers the following categories of arguments in his opposition: (1) use of the Court’s inherent sanctioning authority is inappropriate here; (2) Rule 9011 sanctions require a contempt finding; (3) Section 105 is inapplicable; and (4) the plan provision at issue is not prohibited. The Court will analyze the respondents’ arguments separately.
Debtors’ Opposition
The Court’s Good Faith Finding
11 U.S.C. § 1325(a)(3) states:
Except as provided in subsection (b), the court shall confirm a plan if –
(3) the plan has been proposed in good faith and not by any means forbidden by law
Debtors argue that: "[i]t necessarily follows [from § 1325(a)(3)] that the Court has
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already made an express finding that the Plan was filed in good faith." This result does not necessarily follow from the language of the statute. The plain language of § 1325
operates to eliminate the discretion of the court if the court finds that the debtor has satisfied the nine subsections of § 1325(a); the provision does not state the consequences of a finding that some, but not all, of the § 1325(a) subsections have been satisfied. As is stated by the leading bankruptcy treatise:
The standards set forth in section 1325(a), however, are not requirements that must be met in every case before a plan can be confirmed. Unlike section 1322 (a), section 1325(a) does not state that "the plan shall" comply with its listed criteria. Nor does it state, as does section 1129(a), that the court shall confirm the plan only if certain requirements are met. Instead it states only that if its criteria are met the court must confirm the plan. Therefore, the court has discretion to confirm a plan that does not comply with all of the standards of section 1325(a), particularly if no party objects.
8 Collier on Bankruptcy ¶ 1325.01 (16th ed. 2016) (footnotes omitted).
Despite the plain language of the statute, the Ninth Circuit Court of Appeals, without any independent analysis, and relying on an out of circuit bankruptcy court decision, has determined that the requirements of § 1325(a) are mandatory for Chapter 13 plan confirmation. See In Chinichian, 784 F.2d 1440, 1443-44 (9th Cir. 1986) ("For a court to confirm a plan, each of the requirements of section 1325 must be present and the debtor has the burden of proving that each element has been met.") (citing In re Elkind, 11 B.R. 473, 476 (Bankr. D. Colo. 1981)). While it remains unclear from where the mandatory characterization of § 1325(a) arose, a variety of courts have, in passing, assumed that the § 1325(a) standards are mandatory for plan confirmation.
See, e.g., Assocs. Comm. Corp. v. Rash, 520 U.S. 953, 956 (1997) ("To qualify for confirmation under Chapter 13, the Rashes’ plan had to satisfy the requirements set forth in § 1325(a) of the Code."); Shaw v. Aurgroup Fin. Credit Union, 552 F.3d 447, 459 (6th Cir. 2009) ("Numerous district and bankruptcy courts outside the Fifth, Ninth, Tent, and Eleventh Circuits, including courts within this circuit, have also held, suggested, or assumed that the provision in § 1325(a) are mandatory.") (collecting cases). But see In re Szostek, 886 F.2d 1405, 1411 (3rd Cir. 1989) ("On the other hand, if the conditions of § 1325 are not met, although the requirements of § 1322 are fulfilled, the court has the discretion to confirm the plan. If Congress had intended for
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§ 1325(a) to be mandatory, it could have included that requirement with the requirements already listed in § 1322); see also Matter of Escobedo, 28 F.3d 34, 34 (7th Cir. 1994) ("We note, however, as did the court in Szostek, that while the provisions of § 1325(a)(5) may be discretionary[,] the requirements of § 1322(a)(2) are mandatory.). Indeed, even Espinosa appears to implicitly assume that the § 1325
(a) requirements are mandatory. See 559 U.S. 260, 277 ("That is because § 1325(a) instructs a bankruptcy court to confirm a plan only if the court finds, inter alia, that the plan complies with the ‘applicable provisions’ of the Code.") (emphasis added). Therefore, it would appear that binding case law suggests that the § 1325(a) requirements, including good faith, are mandatory requirements for confirmation.
Res Judicata
While the Court accepts Debtors’ argument that, by confirming their Chapter 13 plan, the Court implicitly found that the plan was filed in good faith, the Court rejects Debtors’ argument that that finding is res judicata with regard to the Court. 11 U.S.C.
§ 1327(a) states: "The provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan." The Court is not a creditor and Debtors have advanced no argument as to how § 1327
(a) would prevent the Court from revisiting its finding of good faith. In fact, the Ninth Circuit Court of Appeals opinion that concluded the § 1325(a) requirements were mandatory stated the following: "Because section 1325(a)(3) of Title 11 requires the Chinichians to propose their plan in good faith, the bankruptcy court has jurisdiction to revoke a plan if the plan was not filed in good faith." In re Chinichian, 784 F.2d 1440, 1442 (9th Cir. 1986). The Ninth Circuit’s further comments indicate that it believed such powers were expansive:
The Chinichians argue, however, that because section 1330 is a specific statute it should govern the more general section 105. The Mancari rationale that a specific statute cannot be nullified by a more general one is only applicable where a conflict exists.
Section 1330 provides a method of revoking a confirmation order "on request
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of a party in interest." While it does not specifically authorize such a revocation by the court sua sponte, it does not prohibit such action. Section
105 constitutes authority for the court to issue any order necessary to carry out the provisions of the Code. That reservoir of power in no manner conflicts with the authority to act upon the request of an interested party, but constitutes a supplemental method of revocation in the event of fraud. It would be absurd to hold that the bankruptcy court is powerless to correct a fraud unless first requested by an interested party, and that is not what section 1330 provides.
Section 105 sets out the power of the bankruptcy court to fashion orders as necessary pursuant to the purposes of the Bankruptcy Code.
Further, a bankruptcy court is a court of equity. As a court of equity, it may look through form to the substance of a transaction and devise new remedies where those at law are inadequate. Further, it can modify or vacate its order so long as no intervening right has become vested in reliance thereon. Thus, the bankruptcy court had equitable power to revoke its order partially confirming the Chinichians’ plan once it recognized the Chinichians did not file their plan in good faith as required by section 1325(a)(3).
Id. at 1442-43 (citations omitted).
Debtors’ argument that § 1327 operates to prevent the Court from modifying its implicit good faith finding when confirming the plan lacks merit. The statute states that the terms of the provisions of a confirmed plan are binding on the debtor and creditors. The Court is not a creditor or a debtor nor is the Court’s good faith finding a provision of a confirmed plan. Nor does res judicata prevent a court from revoking or amending its own order. Such a principle would eliminate the ability to revoke or modify a judgment altogether, rendering obsolete Fed. R. Civ. P. Rules 59 & 60, in addition to many others legal provisions. Debtors’ argument that the Court is bound by its own previous finding due to res judiciata is not compelling.
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The Court Lacks Authority to Issue Sanctions
Debtors’ argument that the Court lacks authority to issue sanctions can be summarized in the following: (1) the Court is precluded from finding that the plan was proposed in bad faith due to res judicata; and (2) the Court must find that the plan was proposed in bad faith for sanctions to be warranted. Because the Court rejects (1), as outlined above, Debtors’ argument must fail.
The OSC is an "Illegal Ex Post Facto Law"
In their fourth argument, Debtors argue that this OSC is an ex post facto law. As noted by Debtors, Art. 1 §§ 9 & 10 of the Constitution prohibit ex post facto laws. Article 1 of the Constitution deals with the legislative branch – the branch of the government that makes laws. The Judicial Branch does not make laws. Debtors’ argument that a court order is an ex post facto law is therefore, necessarily, invalid.
Rule 9011 is Inapplicable
Fed. R. Bankr. P. Rule 9011(b)(2) states:
By presenting to the court (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, --
the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the
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establishment of new law
Fed. R. Bankr. P. Rule 9011(c)(1)(B) states: "[O]n its own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto."
Debtors’ nine subsection argument why Fed. R. Bankr. P. Rule 9011 is inapplicable is rather chaotic and disorganized. Regardless, the Court acknowledges that, as to Debtors, Rule 9011 sanctions are inapplicable due to the operation of Rule 9011(c)(2) (A). Therefore, the Court agrees that Rule 9011 cannot operate as the source of sanctions against Debtors.
Resnick’s Opposition
Inherent Sanctioning Authority
The Supreme Court has stated: "it is firmly established that the power to punish for contempts is inherent in all courts." Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991) (quoting Ex parte Robinson, 19 Wall. 505, 510 (1874)); see also Fink v. Gomez, 239 F.3d 989, 992 (9th Cir. 2001) ("[T]he district court has the inherent authority to impose sanctions for bad faith, which includes a broad range of willful improper conduct."). The Ninth Circuit has stated: "Itel teaches that sanctions are justified when a party acts for an improper purpose – even if the act consists of making a truthful statement or a non-frivolous argument or objection. Fink, 239 F.3d at 922; see also In re Dyer, 322 F.3d 1178, 1196 (9th Cir. 2003) (discussing bad faith and willful misconduct).
Nevertheless, as Resnick states: "when there is bad-faith conduct in the course of litigation that could be adequately sanctioned under the Rules, the court ordinarily
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should rely on the Rules rather than the inherent power." Chambers, 501 U.S. at 50. Because the Court believes that the existing framework provides an adequate basis for sanctions in this type of situation, the Court need not rely on its inherent sanctioning authority.
Rule 9011
When imposing sanctions, sua sponte, under Fed. R. Bankr. P. Rule 9011, "sanctions ‘will ordinarily be imposed only in situations that are akin to a contempt of court.’" United Nat’l Ins. Co. v. R&D Latex Corp., 242 F.3d 1102, 1116 (9th Cir. 2001) (citing Barber v. Miller, 146 F.3d 707, 711 (9th Cir. 1998); see also Fed. R. Civ. P. Rule 11, Advisory Committee Notes ("Since show cause orders will ordinarily be issued only in situations that are akin to a contempt of court, the rule does not provide a ‘safe harbor’ to a litigant for withdrawing a claim, defense, etc., after a show cause has been issued on the court’s own initiative."). "[P]rior to imposing court-initiated sanctions, the district court is required to determine whether counsel’s conduct is ‘akin to contempt.’" Gonzalez v. Texaco Inc., 344 Fed. Appx. 304, 308 (9th Cir. 2009) (quoting R&D Latex Corp., 242 F.3d 1102, 1118)).
In this situation, the Court defers to Bankruptcy Judge TeSelle:
At the hearing on the motions to dismiss conducted by the Court in these cases on May 2, 2000, it was clear to the Court that debtors’ counsel included these plan provisions in the hope that they would trap an unwary student loan creditor. If a plan containing a student loan discharge provision is confirmed, debtors and their counsel argue that the student loan obligation is discharged under the theory of res judicata, improperly relying on a skewed interpretation of the opinion of the Tenth Circuit Court of Appeals in In re Andersen, 179 F.3d 1253 (10th Cir. 1999) to support their position. If an objection to confirmation is raised by either the Trustee or the student loan creditor, the offending language is simply removed from the plan, and debtors are no worse off for their attempt. The Court will not permit this type of gamesmanship on the part of debtors and their counsel to continue. Conduct such as this has no
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place in the practice of bankruptcy law, and will not be tolerated by this Court.
The citation of the opinion of the Tenth Circuit in Andersen, supra, as authority for the practice of intentionally inserting language in a chapter 13 plan that violates the Bankruptcy Code and Rules, and as authorizing counsel to stand by silently and thereby induce the Court to confirm a plan that contains a provision that counsel knows violates the Bankruptcy Code and Rules, is at once offensive and specious. Counsel appearing before this Court are officers of the Court and are ethically obligated to inform the Court if they are aware of the existence of a plan provision that renders the plan non- confirmable.
Rather than recognizing their obligations to the Court and to opposing counsel, counsel for debtors in these cases go so far as to suggest that they are compelled by Andersen to recommend that their clients include these unlawful plan provisions, implying that their failure to do so might be an act of professional negligence. The Court does not believe that a fair reading of the opinion of the Tenth Circuit in Andersen can reasonably lead one to conclude that the Tenth Circuit intended to encourage the practice of intentionally inserting unlawful plan provisions in the hope that confirmation of the plan will occur and the time for appeal will pass before such provisions are noticed so that debtors and their counsel can then claim res judicata. Such a skewed reading of Andersen fails to account for the ethical obligations owed by members of the bar to the Court and to each other.
This is particularly true given the volume of chapter 13 filings in this district, and the fact that the Court does not have the time to independently review every chapter 13 plan and confirmation order to determine whether an attempt to unlawfully discharge a student loan obligation is being made. Because the Court has apparently been unable to rely on the ethical conduct of some of the counsel representing chapter 13 debtors appearing before it, the Court, up to his point in time, has been forced to rely on a party in interest other than the debtor to point out those instances in which such student loan discharges have been attempted through plan provisions. Where the Court has become aware of such attempts, either through objections by the student loan creditor or through the inclusion of such a provision in the order confirming the chapter 13 plan,
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the Court has refused to confirm the plan containing such language, and has
stricken language from confirmation orders attempting to effect a discharge of student loan indebtedness in this manner.
. . .
In light of the existing case law concerning the impropriety of the inclusion of such student loan discharge provisions in chapter 13 plans, and the unambiguous language of the Bankruptcy Code and Rules, the Court believes that the inclusion of such a provision in a chapter 13 plan and/or order confirming a chapter 13 plan is both unethical and sanctionable conduct pursuant to Bankruptcy Rule 9011. Bankruptcy Rule 9011(b) concerns representations made to the Court. It states that by presenting a paper to the Court, an attorney or unrepresented party certifies to the best of his or her knowledge, information and belief, formed after a reasonable inquiry under the circumstances, that the legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. See Fed. R. Bankr. P. Rule 9011 (b)(2).
. . .
The Court refuses to allow counsel for debtors to turn the inclusion of a student loan discharge provision in a chapter 13 plan into a "can’t lose" proposition. The Court therefore concludes that Andersen provides no protection from the imposition of sanctions under Rule 9011(b) in cases in which a student loan discharge provision is included in a confirmed chapter 13 plan.
In re Hensley, 249 B.R. 318, 320-323 (Bankr. W.D. Okla. 2000).
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Section 105
11 U.S.C. § 105(a) states:
The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary to enforce or implement court orders or rules, or to prevent an abuse of process.
Resnick offers a single argument in support of his position that § 105(a) is inapplicable: that the provision only applies to violations of a specific court order. Resnick cites In re Dyer in support of this statement. 322 F.3d 1178, 1196 (9th Cir. 2003) ("Civil contempt authority allows a court to remedy a violation of a specific order (including ‘automatic’ orders, such as the automatic stay or discharge injunction).").
Dyer does not explicitly state that § 105(a) is strictly limited to remedying violations of specific court orders, nor does it cite any authority from which it could be inferred that the Dyer court had such an opinion. Indeed § 105(a) explicitly mentions, in addition to court orders, rules and "abuse of process"; the latter might be invoked in the absence of a specific court order.
The Supreme Court, on two occasions after Dyer, has written an opinion which
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indicates that § 105 is not strictly limited to correcting violations of specific court orders. First, in Marrama v. Citizens Bank of Mass., the Supreme Court wrote:
On the contrary, the broad authority granted to bankruptcy judges to take any action that is necessary or appropriate to prevent an abuse of process described in § 105(a) of the Code, is surely adequate to authorize an immediate denial of a motion to convert filed under § 706 in lieu of a conversion order that merely postpones the allowance of equivalent relief and may provide a debtor with an opportunity to take action prejudicial to creditors.
549 U.S. 365, 375 (2007) (footnote omitted). The "abuse of process" referenced in Marrama was not a violation of a specific court order, but, rather, "an unmeritorious attempt to qualify as a debtor under Chapter 13." Id.
Second, in Law v. Siegel, the Supreme Court stated: "Section 105(a) confers authority to ‘carry out’ the provisions of the Code." This statement is natural, since the first sentence of § 105(a) states: "[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title."
Here, the Court concludes that a specific and definite court order has not been violated. Nevertheless, the reconciliation of Dyer and Marrama helps illustrate the proper approach forward. The Ninth Circuit Court of Appeal’s instructions that sanctions under § 105(a) are appropriate for violation of a specific and definite court order is derived from the non-bankruptcy standard for civil contempt. See F.T.C. v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999) (quoting Stone v. City & Cnty. of S.F., 968 F.2d 850, 856 n.9 (9th Cir. 1992)) ("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."). Nevertheless, as illustrated by Marrama, the Court’s authority under § 105(a) is not strictly limited to issuing sanctions for civil contempt. While a civil contempt finding under § 105(a) may not be appropriate in these circumstances, it does not follow that the Court lacks the ability to adequately and equitably resolve this situation.
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TENTATIVE RULING
The Court is inclined to CONTINUE the hearing for approximately thirty days to allow Debtors to file a supplemental brief addressing why they should not be sanctioned pursuant to the Court’s inherent sanctioning authority. No further briefing from Resnick is requested.
APPEARANCES REQUIRED.
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Docket 32
BACKGROUND
On June 8, 2017, Gail Stump ("Debtor") filed a Chapter 13 voluntary petition. On July 26, 2017, Debtor’s Chapter 13 plan was confirmed.
On September 12, 2017, Trustee filed a motion to dismiss for delinquency. On September 27, 2017, Debtor filed her opposition, stating that she would cure the delinquency or file a motion to modify plan. Debtor did not appear at the hearing on the motion to dismiss, Trustee’s motion was granted, and the case was dismissed on October 5, 2017.
On October 13, 2017, Debtor filed a motion to vacate dismissal. On October 16, 2017, Trustee filed comments recommending approval if Debtor cured the plan delinquency. Trustee’s comments identify a delinquency of $1,533.48, although the comments were filed one month ago.
DISCUSSION
12:30 PM
Fed. R. Bankr. P. Rule 9024, incorporating Fed. R. Civ. P. Rule 60(b)(1), provides for relief from an order for, among other things, "mistake, inadvertence, surprise, or excusable neglect." Debtor’s attorney states that the failure to appear at the hearing on the motion to dismiss was a result of attorney neglect.
Given the conditional approval of the Trustee and the evidence submitted by Debtor, the Court finds that the requested relief is proper assuming that the condition has been satisfied.
TENTATIVE RULING
The Court is inclined to GRANT the motion conditioned on Debtor curing the plan delinquency in full.
APPEARANCES REQUIRED.
Debtor(s):
Gail Katherine Stump Represented By Michael E Clark
Movant(s):
Gail Katherine Stump Represented By Michael E Clark Michael E Clark
12:30 PM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Bouchra Bernichi Represented By Nicholas S Nassif
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gregorio Orozco Sotelo Represented By
Lisa F Collins-Williams
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jennifer Marie Silva Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Helen Roque Robles Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Leonel Villa Represented By
Luis G Torres
Joint Debtor(s):
Lucila Pineda Represented By Luis G Torres
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Larry Gene Hannah Pro Se
Joint Debtor(s):
Susan Harris Hannah Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Victor Manuel Rosales Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Manuel Mayorga Represented By Curtis R Aijala
Joint Debtor(s):
Teodora Mayorga Represented By Curtis R Aijala
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maria Del Carmen Alvarez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Chiu Ng Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: PATRICIA MORALES
EH
Docket 14
Based on evidence establishing failure of prior case was the fault of prior counsel, the Court is inclined to GRANT the motion, continuing the automatic stay as to all creditors. The notice, however, does not provide any direction regarding opposition.
APPEARANCES REQUIRED.
Debtor(s):
Patricia Morales Represented By Dana Travis
Movant(s):
Patricia Morales Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 55
- NONE LISTED -
Debtor(s):
Sylvia Jimenez Gomez Represented By Leonard J Cravens
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 176
- NONE LISTED -
Debtor(s):
Vivian Munson Represented By Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 86
- NONE LISTED -
Debtor(s):
Michael Lee Barnes Represented By Todd L Turoci
Joint Debtor(s):
Belinda Ann Barnes Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 93
- NONE LISTED -
Debtor(s):
Jesus Manuel Gomez Represented By Dana Travis
Joint Debtor(s):
Maria Gomez Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 164
- NONE LISTED -
Debtor(s):
Jose Ceja Jr Represented By
Dana Travis
Joint Debtor(s):
Chasity Ann Ceja Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 65
- NONE LISTED -
Debtor(s):
Ramiro J Cruz Represented By Summer M Shaw Jenny L Doling
Joint Debtor(s):
Norma Idalia Cruz Represented By Summer M Shaw Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 110
- NONE LISTED -
Debtor(s):
Sortan Melvin Prior Sr. Represented By Jenny L Doling Summer M Shaw
Joint Debtor(s):
Janna Renee Prior Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 54
- NONE LISTED -
Debtor(s):
Carol Elizabeth Tenney Represented By David Lozano
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 62
BACKGROUND
On June 22, 2016, Dexter Humphrey ("Debtor") filed a Chapter 13 voluntary petition. On August 3, 2016, Debtor’s Chapter 13 plan was confirmed.
On July 5, 2017, Trustee filed a motion to dismiss for failure to provide tax returns/receipts. On July 14, 2017, Debtor filed his opposition, stating that he had received an extension on his federal tax returns, and would submit the returns when completed. Debtor did not appear at the hearing on the motion to dismiss, Trustee’s motion was granted, and the case was dismissed on July 25, 2017. Debtor states that he e-mailed the tax returns to Trustee that same day.
On August 3, 2017, Debtor filed a motion to vacate dismissal. On September 28, 2017, Trustee filed comments recommending approval if the motion was properly noticed and if Debtor cured the plan delinquency. Trustee’s comments identify a delinquency of $8,539, although the comments were filed more than one month ago.
DISCUSSION
12:31 PM
Fed. R. Bankr. P. Rule 9024, incorporating Fed. R. Civ. P. Rule 60(b)(1), provides for relief from an order for, among other things, "mistake, inadvertence, surprise, or excusable neglect." Debtors state that the tax returns were e-mailed to Trustee the day the case was dismissed, and that Debtor miscalendared the hearing date.
Given the conditional approval of the Trustee and the evidence submitted by Debtor, the Court finds that the requested relief is proper assuming that the condition has been satisfied.
TENTATIVE RULING
The Court is inclined to GRANT the motion conditioned on Debtor curing the plan delinquency in full.
APPEARANCES REQUIRED.
Debtor(s):
Dexter Humphrey Represented By Michael J Hemming
Movant(s):
Dexter Humphrey Represented By Michael J Hemming
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
12:31 PM
EH
Docket 47
- NONE LISTED -
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 56
- NONE LISTED -
Debtor(s):
Grady Singleton III Represented By Paul Y Lee
Joint Debtor(s):
Michelle Singleton Represented By Paul Y Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 45
- NONE LISTED -
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 26
- NONE LISTED -
Debtor(s):
Bruce Howard Ruggles Represented By John F Brady
Joint Debtor(s):
Ann Marie Ruggles Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 51
- NONE LISTED -
Debtor(s):
Michael Ray Sandoval Represented By Michael E Clark Barry E Borowitz
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 26
- NONE LISTED -
Debtor(s):
Lashanda Moniek Shelton Represented By Lionel E Giron Kevin Tang
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 20
- NONE LISTED -
Debtor(s):
Mandy Catron Represented By Stephen S Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 95
- NONE LISTED -
Debtor(s):
Gildardo R Herrera Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Stephanie D Herrera Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 63
- NONE LISTED -
Debtor(s):
Tanyua A Gates-Holmes Represented By John F Brady
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 216
- NONE LISTED -
Debtor(s):
Brandon Kent Blevins Represented By
Raj T Wadhwani
Joint Debtor(s):
Teresa Taylor Blevins Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
1:30 PM
EH
Docket 115
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
Trustee(s):
Robert Whitmore (TR) Represented By Franklin C Adams
1:00 PM
Adv#: 6:09-01235 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17, 6/26/17, 8/2/17, 10/25/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
DOES 1 through 100, inclusive Pro Se
Empire Partners, Inc., a California Represented By
David Loughnot
1:00 PM
Jonathan A Loeb Jeffrey Rosenfeld
Plaintiff(s):
RICHARD K. DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
1:00 PM
Adv#: 6:10-01319 DIAMOND v. Empire Partners, Inc., a California Corporation et
Advanced From: 11/29/17 Also #3
EH
Docket 424
11/27/2017
On April 23, 2010, the duly appointed chapter 7 trustee for the estate of Empire Land, LLC (the "Debtor"), Richard K Diamond (the "Trustee") filed the instant adversary proceeding ("EPI 2"). The complaint asserts claims for breach of fiduciary duty, avoidance of fraudulent conveyances, respondeat superior liability, professional negligence, aiding and abetting breach of fiduciary duty ("Complaint") against Larry Day, Empire Partners, Inc., Neil Miller, James Previti, and Paul Roman (collectively, "Defendants").
On October 18, 2017, the Trustee filed a Motion for Order Determining that Defendants have Consented to the Bankruptcy Court's Entry of a Final Order ("Motion"). On November 13, 2017, Defendants filed their opposition to the Motion ("Opposition"). A reply to the Opposition was filed on November 21, 2017 ("Reply").
The Court notes the following dates and facts and filings in the EPI 2 case for the record:
Defendants filed a Motion to Dismiss ("MTD") on July 2, 2010. That motion indicated that Defendants would not consent to the entry of final orders or
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judgments by the bankruptcy judge. (MTD at 2:17-19);
On January 9, 2012, Defendants filed their motion to withdraw the reference with the District Court ("First Withdrawal Motion").
Defendants filed their answer to the Complaint on April 6, 2012 ("Answer"). The Answer indicates at ¶ 31 that they do not consent to the entry of final orders or judgment by the Bankruptcy Court;
On March 7, 2014, Defendants filed a Motion for Order Barring the Trustee from Seeking Damages and to Compel the Trustee to Respond Further to Interrogatories and to Produce Communications with a Third Party ("First Discovery Motion");
On June 12, 2014, Defendants filed a Motion to Enforce Court’s May 15, 2014, Order on the First Discovery Motion ("Motion to Compel");
On July 17, 2014, Defendants filed their Motion for Summary Judgment (the "MSJ");
On September 10, 2014, Defendants filed their Motion to Bar Trustee from
Using Jeffrey E. Brandlin as an Expert Witness … "at any trial or hearing" (the "Second Discovery Motion");
On May 27, 2015, the District Court denied the First Withdrawal Motion without prejudice and instructing that any renewed motion by Defendants address the effect of Wellness Int'l Network, Ltd. v. Sharif, 135 S. Ct. 1932, 1948 (2015) on the ability to seek withdrawal in EPI 2;
On June 29, 2015, Defendants filed their renewed Motion for Withdrawal (the "Second Withdrawal Motion");
The Second Withdrawal Motion was denied by the District Court on October 7, 2016.
Separately, the Court takes judicial notice of the motions for summary judgment also filed in the Trustee’s related cases against Defendants (EPI 1 and EPI 3). The Defendants filed a request for summary judgment in EPI 1 on July 30, 2014, and in EPI 3 on August 13, 2014.
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DISCUSSION
The issue of Defendants’ right to a jury trial is not properly before this Court and as such the Court need not address it here.
Procedural Posture of the Motion
As a threshold matter, the Opposition correctly points out that a bankruptcy court may not hear or determine a motion to withdraw the reference. The Trustee in his Reply agrees with this point. However, the Trustee does not address or provide authority to support the procedural posture of its request for relief. The District Court certainly indicated that this Court was the proper forum to conduct the analysis regarding the issue of implied consent but did not remand this issue to the bankruptcy court for determination. Moreover, the Trustee has not couched his Motion as a request for declaratory relief or as any other cognizable request for relief. Instead, the request itself appears premature absent a request for a final order by the Trustee such as the filing of a summary judgment motion, or as a pretrial motion. In the absence of such a request for specific relief, the Trustee’s Motion appears procedurally improper and may be denied on this basis.
Implied Consent
Parties' consent to the issuance of a final judgment by a bankruptcy court may be express or implied. In Wellness, the Supreme Court found that "nothing in the Constitution requires that consent to adjudication by a bankruptcy court be express. Nor does the relevant statute, 28 U.S.C. § 157, mandate express consent." Wellness, 135 S. Ct. at 1947–48. However, the Supreme Court stated that "a litigant's consent— whether express or implied—must still be knowing and voluntary." Id. at 1948. The key inquiry that the bankruptcy court must make is whether "the litigant or counsel was made aware of the need for consent and the right to refuse it, and still voluntarily appeared to try the case" before the bankruptcy court. Roell v. Withrow, 538 U.S. 580, 590 (2003). This standard reflects multiple "pragmatic virtues," including the increasing of judicial efficiency, the limiting of gamesmanship among the parties involved in the proceeding, and the honoring of the Article III right to have claims decided before judges free from potential domination by other branches of government. Wellness, 135 S. Ct. at 1948; Roell, 538 U.S. at 590–91. Passive and unwitting participation is not sufficient to find consent. In re Pringle, 495 B.R. 447, 461 (9th Cir. BAP 2013). Overall, a determination of whether a party consented to the bankruptcy court's jurisdiction requires "a deeply factbound analysis of the procedural
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history" in the proceeding. Wellness, 135 S. Ct. at 1949; In re Empire Land, LLC v. Empire Partners, Inc., 2016 WL 5890062, at *2 (C.D. Cal. Oct. 7, 2016); In re Saenz, 2016 WL 9021733, at *4 (Bankr. S.D. Tex. Dec. 19, 2016).
The Trustee cites to various cases in support of the argument that Defendants have impliedly consented to the Court’s entry of final judgment in the instant case. The Court shall evaluate the Trustee’s foremost cases. First, In re Clean Burn Fuels, LLC ("Conti"), 540 B.R. 195, 211 (Bankr. M.D.N.C. 2015), amended, No. 11-80562,
2016 WL 5874964 (Bankr. M.D.N.C. Oct. 7, 2016), amended, No. 11-80562, 2017
WL 1194452 (Bankr. M.D.N.C. Mar. 30, 2017), the Conti court provided the following analysis as to the effect of filing of a summary judgment motion on the issue of consent:
In its Amended Answer, Perdue did not consent to this Court's entry of a final judgment. See Perdue's Amended Answer, ¶ [Doc. No. 17].
However, Perdue later requested this Court to enter final judgment in its Motion for Summary Judgment. The Supreme Court, in allowing parties to impliedly consent to bankruptcy courts' jurisdiction, noted that such a rule promotes the "pragmatic virtue[ ]" of "checking gamesmanship." Wellness, 135 S.Ct. at 1948; see also Haley v. Barlays Bank Del. (In re Carter), 506 B.R. 83, 88 (Bankr.D.Ariz.2014) ("If a Stern objection were not deemed waived by the party making it seeking summary judgment, then the party could seek or permit a substantive ruling by the Bankruptcy Court, and then waive that objection if the ruling is favorable but insist on it if unfavorable, and get a second bite at the apple."). To prevent the gamesmanship described in Haley, this Court will interpret Perdue's Motion for Summary Judgment as its consent to this Court's entry of a final judgment.
Conti at n. 2. The Haley Court, in turn, found that the filing of the summary judgment amounted to sandbagging and found implied consent on that basis. Haley at 88. In Haley, the Court opined that:
Obviously if judgment is favorable to the objector he will then waive it, but will insist upon it if judgment is unfavorable. That strategy would be available even if the Stern objector is vociferously making the objection, as loudly as Bre'r Rabbit, even while trying the case to the Bankruptcy Court. Perhaps to avoid such litigation strategy it will be necessary for courts to adopt a rule that the Stern objection is waived or forfeited unless the objector promptly moves for withdrawal
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of the reference and prosecutes that motion to conclusion in the District Court, as the Bellingham defendant apparently failed to do.
Haley at 88-89. Here, Defendants’ conduct (notwithstanding their statements to the contrary) evinces implied consent. Thus, by their conduct, Defendants must have waived or forfeited their right to have the District Court hear the case in order for this Court to assert jurisdiction for entry of final orders. See Pringle, 495 B.R. at 462.
In Pringle, the Ninth Circuit BAP concluded that while "sandbagging" may be sufficient for consent, it is not necessary to find implied consent. Id. at 458. In Pringle, the BAP evaluated whether in the absence of sandbagging, implied consent under Bellingham requires a finding that a party forfeited or waived its right to have an Article III court hear the case. Here, it cannot be argued that the Defendants forfeited their objection because they raised their non-consent early on. Instead, pursuant to Pringle, the issue before this Court is whether the Defendants, by their conduct, waived their right to have their case heard by an Article III court – i.e., whether they intentionally relinquished or abandoned a known right. Id. at 460. In Pringle, the record was "replete with instances of … conscious engagement and use of the bankruptcy court and the services of [the] Panel to resolve the Trustee's claim … undertaken against an almost unavoidable backdrop which called the bankruptcy court's authority into question. Id. at 459. In this case, the Court is not persuaded that the Defendants impliedly waived their objection to this Court’s authority to enter final orders. In particular, unlike the situation described in Pringle, the Defendants demanded an Article III judge soon after the case was filed. The District Court then took the matter under submission for an extended period of time. During that time, the Court acknowledges that the Defendants could have sought a stay of the proceedings in this Court. However, neither Stern, Bellingham Wellness, nor 28 U.S.C. § 157 requires such action by Defendants. To the contrary, § 157 permits a bankruptcy judge to hear a proceeding that is not a core proceeding (as here). The statute only prohibits the entry of a final order or judgment. 28 U.S.C. §157(c)(1). Defendants did seek summary judgment in this case. However, none of the cases cited by the Trustee involves a situation where the party objecting to the court’s authority did so expressly in their summary judgment or motion to dismiss moving papers.
Defendants motion for summary judgment (although at times inconsistent in its usage of the correct verbiage) more than once mentioned that their request for relief was limited to what they believed this Court was empowered to grant – namely, the issuance of proposed findings and conclusions for consideration by the District
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Court. Additionally, apart from the statements made in the moving papers, the transcript of the hearing underscores the fact that both sides and the Judge all agreed that granting of the motion for summary judgment could and would only result in the issuance of a recommendation to the District Court. (Mot. at Ex. 5, pp 582-585). This is in stark contrast to the facts True Traditions, LC v. Wu, 552 B.R. 826 (N.D. Cal.
2015), appeal dismissed (Aug. 29, 2016):
Appellant then filed a cross-motion for summary judgment affirmatively seeking judgment in its favor. The motion did not raise the issue of consent. See ER Exh. 12. Indeed, no party mentioned consent until the bankruptcy court revived the issue sua sponte on the record at the May 5, 2014 hearing on the parties' cross-motions for summary judgment. There, the bankruptcy court queried whether Appellant had impliedly consented to the bankruptcy court's entry of final judgment by filing a cross-motion for summary judgment.
Id at 837. Further, the Court is not persuaded by the Trustee’s argument that any motion brought under Rule 56 in a non-core matter necessarily compels implied consent by waiver. Such a holding would appear to conflict with the plain language of
§ 157(c)(1) which accords bankruptcy courts the ability to hear non-core matters but submit proposed findings of fact and conclusions of law to the district court for the entry of a final order or judgment – which is precisely what Defendants requested in their motion for summary judgment. Indeed, all of Defendants actions up to this point, including the discovery motions referenced by the Trustee and the summary judgment motion, constitute pretrial matters which a bankruptcy court may hear notwithstanding that the case may eventually end up in the district court. See In re Healthcentral.com, 504 F.3d 775, 788 (9th Cir.2007) (holding that even where there is a Seventh Amendment right to a jury trial in the district court, the bankruptcy court may retain jurisdiction over the case for pretrial matters).
The strongest support of the Trustee’s argument is the Haley Court’s dictum suggesting a rule requiring parties objecting to bankruptcy court authority to wait to proceed in trying a case until their motion to withdraw the reference has been filed and ruled on by a district court. Haley at 88-89. Under this view, the Defendants’ filing of a summary judgment (notwithstanding their statements that their request was limited to seeking findings of fact and recommendations for the District Court) would likely constitute implied consent because Defendants could have sought a stay of proceedings in this Court or in the District Court pending the resolution of the Motion to Withdraw the Reference. Instead, Defendants chose to continue to litigate in EPI I, II and III not merely in a defensive capacity but also, as indicated by the Trustee, by seeking affirmative relief in all three cases. This Court, however, is not persuaded that the policies underlying § 157, or the policy of judicial efficiency, would be served by
1:00 PM
the rule suggested in Haley. As has been acknowledged by Ninth Circuit, the current system promotes judicial economy and efficiency by making use of the bankruptcy court's unique knowledge of Title 11 and familiarity with the actions before them … [and] … only by allowing the bankruptcy court to retain jurisdiction over the action until trial is actually ready do we ensure that our bankruptcy system is carried out.
Healthcentral.com at 788.
For these reasons, the Court finds that Defendants have not impliedly consented to the entry of final orders by this Court and the Court’s tentative ruling is to DENY the Motion.
TENTATIVE RULING
Based on the foregoing, the Court’s tentative ruling is to DENY the Motion as procedurally improper, and on alternative grounds on the merits because the record does not evince implied consent under Bellingham and Roell.
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
James P Previti Represented By
1:00 PM
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Larry Day Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Neil M Miller Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Paul Roman Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
O'Melveny & Myers, LLP Represented By Howard Steinberg P Sabin Willett
Peter T. Healy Represented By Howard Steinberg P Sabin Willett
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Peter M Bransten John P Reitman Michael I Gottfried
Aleksandra Zimonjic Monica Rieder Cynthia M Cohen Roye Zur
1:00 PM
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
1:00 PM
Adv#: 6:10-01319 DIAMOND v. Empire Partners, Inc., a California Corporation et
HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
01/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17, 8/2/17, 10/25/17
From: 6/26/17 Also #2
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
1:00 PM
Defendant(s):
Peter T. Healy Represented By Howard Steinberg P Sabin Willett
O'Melveny & Myers, LLP Represented By Howard Steinberg P Sabin Willett
Paul Roman Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Neil M Miller Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Larry Day Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Peter M Bransten John P Reitman
1:00 PM
Trustee(s):
Michael I Gottfried Aleksandra Zimonjic Monica Rieder Cynthia M Cohen Roye Zur
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
1:00 PM
Adv#: 6:10-01329 DIAMOND v. Empire Partners, Inc., a California Corporation et
(Defendant - Empire Partners, Inc) HOLDING DATE
From: 3/6/13, 6/5/13, 9/11/13, 11/13/13,12/18/13, 2/5/14, 3/12/14, 4/9/14, 4/16/14, 5/21/14, 8/27/14, 8/28/14, 9/10/14, 9/29/14, 11/10/14, 11/19/14,
1/21/15, 1/28/15, 2/19/15, 3/24/15, 5/28/15, 6/23/15, 8/12/15, 9/18/15, 10/6/15,
12/8/15, 1/20/16, 2/18/16, 3/23/16, 4/5/16, 4/13/16, 4/22/16, 6/6/16, 7/25/16,
10/3/16, 11/14/16, 1/23/17, 2/27/17, 4/24/17, 6/26/17, 8/2/17, 10/25/17
EH
Docket 1
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
The James Previti Family Trust Represented By Jonathan A Loeb Jeffrey Rosenfeld
1:00 PM
Previti Realty Fund, L.P. Represented By Jonathan A Loeb Jeffrey Rosenfeld
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Michael I Gottfried
Aleksandra Zimonjic Monica Rieder
John P Reitman Peter M Bransten Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
1:00 PM
Best Best & Krieger Franklin C Adams Thomas J Eastmond
1:00 PM
EH
Docket 135
APPEARANCES WAIVED. Per consent of the parties, the Court will issue an order continuing the matter for approximately 30 days.
Debtor(s):
Matthew Joseph Pautz Represented By Todd L Turoci Julie Philippi
Joint Debtor(s):
Alice Louise Pautz Represented By Todd L Turoci Julie Philippi
Trustee(s):
Karl T Anderson (TR) Represented By Leonard M Shulman Melissa Davis Lowe Samuel J Romero
10:00 AM
MOVANT: HSBC BANK USA, NATIONAL ASSOCIATION
EH
Docket 100
11/28/2017
Service: Proper Opposition: Yes
Debtors have provided evidence that regular payments were made between May 2016 and November 1, 2017 (with the exception of the August 2016 and December 2016 payments for which Debtors are seeking evidence). Exhibit 5, which is the Movant’s summary of post-petition payments reflects numerous debits for 2016 payments which appears to corroborate Debtors’ assertion that refunds were made due to a mix-up in payments being made by the Trustee’s office.
APPEARANCES REQUIRED.
Debtor(s):
Achilles A. LaSalle Jr. Represented By Lazaro E Fernandez
Joint Debtor(s):
Elsie LaSalle Represented By
Lazaro E Fernandez
Movant(s):
HSBC Bank USA, National Represented By
10:00 AM
Trustee(s):
Armin M Kolenovic
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: HSBC BANK USA
EH
Docket 79
11/28/2017
Service: Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT authority to offer loan workout options, and request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Jose Luis Navarro Represented By Todd L Turoci
Joint Debtor(s):
Alma Gloria Navarro Represented By Todd L Turoci
Movant(s):
HSBC Bank USA, National Represented By
Erin M McCartney
10:00 AM
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
10:00 AM
MOVANT: BANK OF NEW YORK MELLON
From: 10/3/17 EH
Docket 56
- NONE LISTED -
Debtor(s):
Adolfo Ayala Represented By
Anthony Wilaras
Movant(s):
The Bank Of New York Mellon Fka Represented By
Jonathan J Damen Lisa Thomas Anita F Robertson Robert P Zahradka
Trustee(s):
Rod (MH) Danielson (TR) Represented By
Rod (MH) Danielson (TR)
10:00 AM
MOVANT: WELLS FARGO BANK
From: 10/31/17 EH
Docket 82
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Nicholas M. Morales Represented By George J Paukert
Joint Debtor(s):
Bertha A. Galvan Represented By George J Paukert
10:00 AM
Movant(s):
WELLS FARGO BANK, N.A. Represented By
Armin M Kolenovic
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SETERUS, INC.
From: 11/14/17 EH
Docket 32
- NONE LISTED -
Debtor(s):
Duane C Lowrey Represented By
W. Derek May
Joint Debtor(s):
Joan M Lowrey Represented By
W. Derek May
Movant(s):
Federal National Mortgage Represented By
Andrew David Goldberg Renee M Parker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA NATIONAL ASSOCIATION
EH
Docket 69
- NONE LISTED -
Debtor(s):
Ramiro J Cruz Represented By Summer M Shaw Jenny L Doling
Joint Debtor(s):
Norma Idalia Cruz Represented By Summer M Shaw Jenny L Doling
Movant(s):
HSBC Bank USA, National Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: US BANK
EH
Docket 49
- NONE LISTED -
Debtor(s):
Robert Allan Gloeckner Represented By Jenny L Doling
Joint Debtor(s):
Lucia Ann Gloeckner Represented By Jenny L Doling
Movant(s):
U.S. Bank NA, successor trustee to Represented By
Caren J Castle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 10/3/17 EH
Docket 53
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the stay pursuant to § 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 12. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Nicholas Asamoa Represented By Stephen S Smyth William J Smyth
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CIT BANK, N.A.
From: 10/24/17 EH
Docket 38
Service is Proper Opposition: Yes
Parties to discuss adequate protection terms. APPEARANCES REQUIRED.
Debtor(s):
Jeanie Sullivan Represented By Christopher Hewitt
Movant(s):
CIT BANK, N.A. Represented By Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
From: 6/27/17, 8/29/17, 10/31/17 EH
Docket 40
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and
12. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Semone Ramone Monroe Represented By Jenny L Doling Summer M Shaw
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
10:00 AM
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: BANK OF NEW YORK MELLON
EH
Docket 33
11/28/2017
Service: Proper Opposition: Yes
Parties to indicate whether arrears have been cured or alternatively, whether APO agreement has been reached.
APPEARANCES REQUIRED.
Debtor(s):
Gregory Dwight Vit Represented By Christopher J Langley
Movant(s):
Bank Of New York Mellon FKA Represented By
Erin M McCartney
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SANTANDER CONSUMER USA INC
EH
Docket 30
11/28/2017
Service is Proper Opposition: Yes
The Debtor has not provided evidence that regular monthly payments (as opposed to payments on arrears owed) have been made to Movant. The Court is inclined to GRANT the Motion under § 362(d)(1) for failure to make postpetition regular payments and GRANT as to waiver of 4001 stay. The Court is also inclined to DENY as to cause based on a lack of insurance coverage and as to the request for APO as moot.
APPEARANCES REQUIRED.
Debtor(s):
Isabel M Gutierrez Pro Se
Movant(s):
Santander Consumer USA Inc. Represented By Sheryl K Ith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CAB WEST LLC
EH
Docket 128
11/28/2017
Service is Proper Opposition: None
GRANT relief from the stay under § 362(d)(1). GRANT waiver of 4001(a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Movant(s):
CAB WEST, LLC Represented By Jennifer H Wang Sheryl K Ith
10:00 AM
Trustee(s):
Arturo Cisneros (TR) Represented By Thomas H Casey
10:00 AM
MOVANT: THE BANK OF NEW YORK MELLON
EH
Docket 20
- NONE LISTED -
Debtor(s):
Keith F Keating Represented By Sundee M Teeple Craig K Streed
Movant(s):
The Bank of New York Mellon FKA Represented By
Mark D Estle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WILMINGTON SAVINGS FUND SOCIETY FSB
EH
Docket 23
11/28/2017
Service: Proper Opposition: Yes, 11/14/17
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. GRANT as to ¶3 of prayer for relief.
APPEARANCES REQUIRED.
Debtor(s):
Beatrice A Diaz Pro Se
Movant(s):
Wilmington Savings Fund Society, Represented By
Robert P Zahradka
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: FREEDOM MORTGAGE CORPORATION
From: 11/14/17 EH
Docket 49
Service is Proper Opposition: Yes
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Alfredo Loera Represented By Paul Y Lee
Joint Debtor(s):
Veronica O Loera Represented By Paul Y Lee
10:00 AM
Movant(s):
Freedom Mortgage Corporation Represented By
Erin M McCartney
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVAN: JOSE E TOLEDO AND ANTONIA TOLEDO
EH
Docket 6
11/28/2017
The Movant improperly checked the box under ¶3(b)(3) in the Notice of Motion. This box indicates to parties that may oppose that an application for order shortening time is pending before the Court and that notice of a time and place of the hearing with an opposition deadline will be served at a later time. No such application is pending as to the instant motion. As such, parties opposing the motion would not have known that they needed to file opposition or appear at the hearing.
Based on the lack of due process, the Motion must be denied. Separately, the prior case was dismissed because the Debtors failed to provide 2016 tax returns, several creditors were omitted from the mailing matrix, and multiple other deficiencies in the filing. Additionally, Counsel for the Debtors in the second case is also current counsel, and the Motion makes no reference to the mistakes that led to dismissal of the second case, and further, provides no explanation as to why he made no appearance at the confirmation hearing where the second case was dismissed on the Trustee’s recommendation.
The Movant has simply not established via competent evidence that the current case was filed in good faith.
Debtor(s):
Jose E. Toledo Represented By Moises A Aviles
10:00 AM
Joint Debtor(s):
Antonia Toledo Represented By Moises A Aviles
Movant(s):
Jose E. Toledo Represented By Moises A Aviles Moises A Aviles
Antonia Toledo Represented By Moises A Aviles Moises A Aviles
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SANTANDER CONSUMER USA INC
Also #19 EH
Docket 10
11/28/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Timothy Dale Bashor Represented By Stephen H Darrow
Joint Debtor(s):
Pamela Joy Bashor Represented By Stephen H Darrow
Movant(s):
Santander Consumer USA Inc. Represented By
10:00 AM
Trustee(s):
Sheryl K Ith
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: SANTANDER CONSUMER USA INC
Also #18 EH
Docket 11
11/28/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. Request for APO is DENIED as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Timothy Dale Bashor Represented By Stephen H Darrow
Joint Debtor(s):
Pamela Joy Bashor Represented By Stephen H Darrow
Movant(s):
Santander Consumer USA Inc. Represented By
10:00 AM
Trustee(s):
Sheryl K Ith
Lynda T. Bui (TR) Pro Se
10:00 AM
MOVANT: BMW BANK OF NORTH AMERICA
EH
Docket 12
11/28/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Oswaldo Yanez Canton Represented By Frank X Ruggier
Joint Debtor(s):
Alex Sanchez Represented By Frank X Ruggier
Movant(s):
BMW BANK OF NORTH Represented By Bret D. Allen
10:00 AM
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: UNIFY FINANCIAL FEDERAL CREDIT UNION
EH
Docket 9
11/28/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Luis Padilla Represented By
Terrence Fantauzzi
Movant(s):
UNIFY Financial Federal Credit Represented By
Brett P Ryan
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: WIND CHIME PROPERTIES LP
CASE DISMISSED 10/31/17
EH
Docket 10
- NONE LISTED -
Debtor(s):
Chiu Ng Pro Se
Movant(s):
WIND CHIME PROPERTIES, LP Represented By
Helen G Long
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ALLIANT CREDIT UNION
Also #24 EH
Docket 10
11/28/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. DENY request for APO as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Carlos Lemus Represented By John H Belton
Joint Debtor(s):
Susana Lemus Represented By John H Belton
Movant(s):
Alliant Credit Union Represented By
10:00 AM
Trustee(s):
Yuri Voronin
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: ALLIANT CREDIT UNION
Also #23 EH
Docket 11
11/28/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1) and (d)(2). GRANT waiver of 4001 (a)(3) stay. DENY request for APO as moot.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Movant to lodge order within 7 days.
Debtor(s):
Carlos Lemus Represented By John H Belton
Joint Debtor(s):
Susana Lemus Represented By John H Belton
Movant(s):
Alliant Credit Union Represented By
10:00 AM
Trustee(s):
Yuri Voronin
Robert Whitmore (TR) Pro Se
10:00 AM
MOVANT: ANTONIO SILVERIA LOURENCO
EH
Docket 14
11/28/2017
The Notice of Motion improperly indicates that the Motion was filed on regular notice under ¶3(a). Regular notice requires a motion be filed 21 days prior to the scheduled hearing. The instant motion was filed 15 days before the hearing and as such, the Notice of Motion incorrectly indicates to creditors that opposition was due the day after the Motion was filed. The Notice is further deficient in that it does not specifically name the creditors affected by the Motion – Alaska USA Federal Credit Union and Chase. Last, the Motion was not served per FRBP 7004 because it was not served on an officer/director of the credit union.
As to the merits, the prior case was voluntarily dismissed prior to the confirmation hearing because the Debtor had failed to include a contribution being made by the Debtor’s girlfriend which is used to make payments on the second vehicle. Schedule I now reflects that Debtor is receiving $500 in monthly contributions from his girlfriend.
The Court finds that the evidence is sufficient to demonstrate good faith. However, the Court is inclined to DENY the Motion based on the notice deficiencies identified above.
APPEARANCES REQUIRED.
10:00 AM
Debtor(s):
Antonio Silveria Lourenco Represented By Neil R Hedtke
Movant(s):
Antonio Silveria Lourenco Represented By Neil R Hedtke Neil R Hedtke Neil R Hedtke
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SANTIAGO COMMUNITIES, INC.
EH
Docket 13
11/28/2017
Service is Proper Opposition: Yes
The Debtor opposes the Motion on the basis that Movant allegedly illegally foreclosed on her interest in the Property. She requests a continuance to hire an attorney who is currently out of town for the holidays.
The Debtor has provided no evidence to support the request. Additionally, the Judgment on Movant’s Unlawful Detainer was entered prepetition and Debtor has provided no support for the proposition that the estate has retained any interest in the Property. For these reasons, the Court is inclined to GRANT relief from the stay under §§ 362(d)(1) and (d)(2) based on the prepetition judgment as well as based on the filing of two prior cases affecting the Property which provide support for Movant’s argument that the instant case has been filed in bad faith. GRANT waiver of 4001(a)(3) stay. Also, GRANTED as to ¶¶7b, 9b and 11 of the prayer for relief.
APPEARANCES REQUIRED.
Debtor(s):
Alma Delia Ramos Pro Se
10:00 AM
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
MOVANT: PAT DE SANTIS
EH
Docket 6
11/28/2017
Service is Proper Opposition: None
GRANT relief from the stay under §§ 362(d)(1), (d)(2) and (d)(4). Court finds that bankruptcy case was part of a scheme to hinder, delay and defraud creditors based on multiple bankruptcy filings affecting this property. GRANT waiver of 4001(a)(3) stay. GRANT pursuant to ¶ 3. GRANT as to ¶4 because this is the third case pending within the year and no motion to impose the automatic stay has been filed. Request for APO is DENIED as moot.
APPEARANCES WAIVED. Movant to lodge order within 7 days.
Debtor(s):
Alpine Industries LLC Pro Se
Movant(s):
Pat De Santis, a Married Man as his Represented By
10:00 AM
Trustee(s):
Edward T Weber
Karl T Anderson (TR) Pro Se
11:00 AM
MOVANT: WELLS FARGO BANK
From: 10/24/17 EH
Docket 159
Service is Proper Opposition: Yes
The evidence presented by Debtor does not controvert the evidence presented by Movant, nor does Debtor contest that she is in default. Nor does Debtor provide evidence of value to establish an equity cushion. Subject to adequate protection discussions, the Court is inclined to GRANT the motion under § 362(d)(1) and as otherwise requested.
APPEARANCES REQUIRED.
Debtor(s):
Vonetta M Mays Represented By Christopher J Langley
Movant(s):
Wells Fargo Bank, N.A. Represented By Alexander K Lee
11:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
Docket 154
- NONE LISTED -
Debtor(s):
Wade Jeffery Osborn Represented By Steven P Chang
Joint Debtor(s):
Petrina Y Osborn Represented By Steven P Chang
Movant(s):
United States Trustee (RS) Represented By
Abram Feuerstein esq Casper J Rankin Mohammad Tehrani
2:00 PM
Docket 63
- NONE LISTED -
Debtor(s):
Ricks Patio, Inc Represented By
Robert B Rosenstein
Movant(s):
United States Trustee (RS) Represented By Everett L Green
2:00 PM
From: 11/8/16, 12/6/16, 1/10/17, 3/7/17,4/4/17, 4/25/17, 6/27/17, 7/11/17, 9/12/17, 11/14/17
Also #31 & #32 EH
Docket 83
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
Also #30 & #32 EH
Docket 303
10/31/2017
The hearing on the Motion is continued to November 28, 2017, at 2:00 p.m. as a holding date.
APPEARANCES WAIVED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Steven Werth
2:00 PM
From: 6/7/16, 8/30/16, 9/14/16, 10/20/16, 10/25/16, 12/6/16, 1/10/17, 2/28/17, 3/28/17, 5/30/17, 8/29/17
Also #30 & #31 EH
Docket 7
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
Adv#: 6:16-01279 Allied Injury Management, Inc. v. One Stop Multi-Specialty Medical Group
From: 1/24/17, 3/7/17, 4/25/17, 6/27/17, 7/11/17, 9/12/17, 11/14/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
One Stop Multi-Specialty Medical Represented By
Maria K Pum Maria C Armenta
Nor Cal Pain Management Medical Represented By
Maria K Pum Maria C Armenta
2:00 PM
Plaintiff(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
Adv#: 6:16-01225 Cambridge Medical Funding Group II, LLC v. Allied Injury Management,
From: 11/1/16, 12/6/16, 1/31/17, 2/28/17, 3/28/17, 5/30/17, 8/29/17, 10/3/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Defendant(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
John C. Larson Pro Se
Plaintiff(s):
Cambridge Medical Funding Group Represented By
Kenneth Hennesay
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Steven Werth
2:00 PM
MOVANT: CHRIS RISENMAY; JAMES BRAY; NICK CUNNINGTON; DAVID THATCHER; CLARK PENNEY; SHATTUCK LAMM; STEPHEN BIESINGER; MARK THATCHER; BRANDT KUHN; MICHELE SARNA; MARK HAYEK, AND MIKE MCCONNELL
From: 9/26/17, 10/3/17, 10/31/17 Also #36 & #37
EH
Docket 27
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
Mark Hayek Represented By
Erwin J Shustak
2:00 PM
Also #35 & #37 EH
Docket 6
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
Movant(s):
Mark Hayek Represented By
Erwin J Shustak
2:00 PM
From: 8/16/17, 8/23/17, 10/3/17, 10/31/17
Also #35 & #36 EH
Docket 1
- NONE LISTED -
Debtor(s):
Integrated Wealth Management Inc Represented By
Andrew B Levin
10:00 AM
From: 11/8/17 EH
Docket 9
- NONE LISTED -
Debtor(s):
Noelle E. Sandoval Represented By
James D. Hornbuckle
Trustee(s):
Charles W Daff (TR) Pro Se
11:00 AM
Docket 55
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and Counsel for the Trustee, have been set for hearing on the notice required by LBR 2016-1.
The only receipts in this case were generated through a settlement approved by the Court on June 13, 2017 [Dkt No. 49; settlement motion, Dkt. No. 46] Paragraph 11 of the settlement motion’s statement of facts states the following:
The application also provided that payment of the Fees and Expenses shall be subject to the terms of the application and the approval of the Bankruptcy Court after the filing of either a combined motion for Bankruptcy Court approval of the settlement and the payments of the Fees and Expenses or a separate fee application in accordance with 11 U.S.C. §§ 328 and 330 and Local Bankruptcy Rules.
Paragraph 12 of the settlement motion states the following:
By an order entered on April 20, 2017, the Court granted the application but modified the terms of employment by providing that the payments of the Fees and Expenses shall be subject to the approval of the Bankruptcy Court after the filing of a separate fee application in accordance with 11 U.S.C. §§ 328 and 330 and Local Bankruptcy Rules.
11:00 AM
As acknowledged by Trustee, this Court’s order authorizing the employment of the Phillips Law Firm as special counsel explicitly required, through the Court’s modification of Trustee’s proposed order, the filing of a separate fee application if Trustee was to make any payments to the firm. Yet, such an application was not filed.
In the absence of the required fee application, the Court cannot approve the Trustee’s proposed distribution to the extent that that proposed distribution includes payments to the Phillips Law Firm. The Trustee’s final report, however, does not appear to contemplate payments to the Phillips Law Firm, but, rather, it appears that such payments have already been made in violation of this Court’s order.
Given that the majority of the gross receipts in this case appear to have already been paid from the estate in violation of Court order, no further distributions can be authorized at this time.
APPEARANCES REQUIRED.
Debtor(s):
William Scott Graham Represented By Edward G Topolski
Joint Debtor(s):
Rebecca Sue Graham Represented By Edward G Topolski
Trustee(s):
Karl T Anderson (TR) Represented By Robert A Hessling
11:00 AM
EH
Docket 88
BACKGROUND
On October 26, 2009, Pamela Carmichael ("Debtor") filed a Chapter 13 voluntary petition. On January 13, 2010, Debtor’s Chapter 13 plan was confirmed. On April 23, 2010, the case was converted to Chapter 7. On August 16, 2010, Debtor received a discharge, and, three days later, the case was closed.
On March 21, 2016, the case was reopened to administer assets upon the motion of UST. Specifically, the asset to be administered was the proceeds from a class action judgment. After payment of all claims in Debtor’s case, there was a surplus of
$28,825.67 to be returned to Debtor. According to Debtor’s attorney, she received a check from Trustee in the amount of $28,825.67 on July 11, 2017. Debtor’s attorney states that she had "numerous conversations" with the class-action attorney and the trustee, and that, "[u]ltimately, it was determined that new checks needed to be issued. Specifically, Debtor’s attorney requests three checks: (1) $3,000 for Doling Shaw & Hanover, APC (of which $1,500 is for "work completed to assist the bankruptcy estate in distributing the surplus funds"); (2) $12,912.84 to George Charles Carmichael; and
$12,912.84 to Pamela Ehrlich. The Court notes that the total amount of the three
11:00 AM
checks is $28,825.68 – essentially the same amount as the originally issued check.
On November 7, 2017, the Trustee filed a notice of non-opposition.
DISCUSSION
The division of Debtor’s probate estate as between successors, and resolution of claims against the probate estate, are matters of probate law, not bankruptcy law. The Trustee’s responsibility, and this Court’s supervisory duty, is limited to assuring that the Trustee issues the surplus check to Debtor. The subsequent division of those funds does not appear to be a matter for the bankruptcy court, but is a matter for probate law. While it is unclear whether Court approval of fees is required, no such approval is requested here. Last, importantly, it does not appear the motion has been noticed to or served upon a representative of the probate estate or upon Debtor’s heirs.
APPEARANCES REQUIRED.
Debtor(s):
Pamela J. Carmichael Represented By Jenny L Doling
Movant(s):
Pamela J. Carmichael Represented By Jenny L Doling
Trustee(s):
Helen R. Frazer (TR) Pro Se
11:00 AM
EH
Docket 45
11/29/2017
The Court is inclined to allow the parties the opportunity to obtain appraisals or other valuations of the subject property.
Alternatively, Debtor’s evidence of the amount of the lien of Wells Fargo refers to the balance as of the filing of the motion. While Debtor is free to brief the appropriate time for determining the amount of a lien, in the absence of any argument on the issue, the Court concludes that the appropriate date is the petition date.
APPEARANCES REQUIRED.
Debtor(s):
Hilary D Hill Represented By
Matthew D Resnik David Brian Lally
Movant(s):
Hilary D Hill Represented By
11:00 AM
Trustee(s):
Matthew D Resnik David Brian Lally
Steven M Speier (TR) Represented By Robert P Goe
Elizabeth A LaRocque
11:00 AM
Docket 75
11/29/2018
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and Counsel for the Trustee, have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 2,787.49 Trustee Expenses: $ 157.77
Attorney Fees: $ 16,130.12 Attorney Costs: $ 612.77
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Olga L Morales Represented By
Craig J Beauchamp
Trustee(s):
Robert Whitmore (TR) Represented By Franklin C Adams
11:00 AM
Cathy Ta
11:00 AM
EH
Docket 44
On March 22, 2017, Denny Rinehart ("Debtor") filed a Chapter 7 voluntary petition. On June 8, 2017, the Court approved the employment application of Shulman Hodges & Bastian LLP ("Applicant") to serve as Trustee’s counsel effective May 4, 2017.
On September 14, 2017, the Court approved a settlement between Debtor and the bankruptcy estate whereby the Debtor would pay $50,000 to the estate in order to retain $75,000 in unexempt equity in certain real property located in Montclair, California, and $13,144.02 in certain unexempt insurance policies.
On November 6, 2017, the Court authorized the employment of Donald Fife as accountant for the estate. On November 8, 2017, Applicant filed the instant fee application. That same day, Trustee filed a declaration stating that he did not oppose this fee application. On November 14, 2017, Applicant filed a declaration stating that, after discussions with UST, Applicant had agreed to voluntary reduce their fees by $287.
Local Rule 2016-(1)(a)(2)(A) states, in part:
In all cases where the employment of more than one professional person has been authorized by the court, a professional person who files an application for interim fees must give other professional
11:00 AM
Debtor(s):
persons employed in the case not less than 45 days notice of the date and time of the hearing.
Here, there was more than one professional person employed, yet Applicant did not comply with the above rule. Therefore, the Court is inclined to CONTINUE the hearing for approximately 60 days for Applicant to comply with the above rule.
APPEARANCES REQUIRED.
Denny L Rinehart Represented By Michael Smith Sundee M Teeple
Movant(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Rika Kido
11:00 AM
Declaration of Todd Frealy EH
Docket 27
BACKGROUND
On July 27, 2017, Martha Jimenez ("Debtor") filed a Chapter 7 voluntary petition.
On September 8, 2017, Trustee filed a complaint against Debtor and three other individuals for: (1) declaratory relief; (2) avoidance of voidable transfer; (3) recovery of avoided transfer; ($) sale of interest of co-owner in property of the estate; and (5) turnover of property. On October 3, 2017, the Court approved the employment of Levene, Neal, Bender, Yoo & Brill as bankruptcy counsel for the estate.
On October 30, 2017, the Chapter 7 Trustee filed a motion for an extension of time to file a complaint objecting to discharge. The Court notes that the meeting of creditors has been continued five times. Trustee notes that Debtor has not appeared at the last two meetings of creditors, and has not substantially complied with Trustee’s requests for documents. Trustee requests that the deadline to file a complaint objecting to discharge be extended to January 29, 2018.
11:00 AM
DISCUSSION
Fed. R. Bankr. P. Rule 4004(a) states:
In a chapter 7 case, a complaint, or a motion under § 727(a)(8) or (9) of the Code, objecting to the debtor’s discharge shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). In a chapter 11 case, the complaint shall be filed no later than the first date set for the hearing on confirmation. In a chapter 13 case, a motion objecting to the debtor’s discharge under § 1328(f) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). At least 28 days’ notice of the time so fixed shall be given to the United States trustee and all creditors as provided in Rule 2002(f) and (k) and to the trustee and the trustee’s attorney.
And Fed. R. Bankr. P. Rule 4004(b) states:
On motion of any party in interest, after notice and hearing, the court may for cause extend the time to object to discharge. Except as provided in subdivision (b)(2), the motion shall be filed before the time has expired.
A motion to extent the time to object to discharge may be filed after the time for objection has expired and before discharge is granted if (A) the objection is based on facts that, if learned after the discharge, would provide a basis for revocation under § 727(d) of the Code, and (B) the movant did not have knowledge of those facts in time to permit an objection. The motion shall be filed promptly after the movant discovers the facts on which the objection is based.
Here, Debtors’ delay in providing the information requested by the Trustee, and their absence at the last two meetings of creditors, constitutes sufficient cause to extend the deadline. See Collier on Bankruptcy ¶ 4004.03[2] (16th ed. 2013) ("A debtor’s delays in responding to discovery may be sufficient cause. Obviously, a delay in the meeting of creditors to a date close to or after the deadline may constitute such cause.") (citing In re McCormack, 244 B.R. 203 (Bankr. D. Conn. 2000)).
11:00 AM
Moreover, Debtor’s failure to oppose shall be deemed consent to the relief requested pursuant to Local Rule 9013-1(h).
TENTATIVE RULING
The Court is inclined to GRANT the motion, extending the deadline for Trustee to file a complaint objecting to discharge to January 29, 2018.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Martha Lorena Soto Jimenez Represented By Marlin Branstetter
Movant(s):
Todd A. Frealy (TR) Represented By Carmela Pagay
Trustee(s):
Todd A. Frealy (TR) Represented By Carmela Pagay
11:00 AM
Docket 12
BACKGROUND
On September 29, 2017, Shannon Harrell ("Debtor") filed a skeletal Chapter 7 voluntary petition. On October 11, 2017, Debtor filed the balance of her case commencement documents. The second page of Form 122A-1, however, was missing. On October 17, 2017, the Court dismissed the case for failure to file required documents.
On October 31, 2017, Debtor filed a motion to vacate dismissal.
DISCUSSION
Local Rule 1017-(2)(c) states:
Any motion requesting that the dismissal of a case for failure to timely file a required document or for failure to appear at the meeting of creditors be vacated must include as exhibits to the motion all of the documents that were
11:00 AM
not timely filed and must be supported by a declaration under penalty of perjury establishing a sufficient explanation why the documents were not timely filed. The motion may be ruled on without further notice or hearing pursuant to LBR 9013-(1)(q).
Here, Debtor did not comply with the above rule and has not yet filed the missing second page of Form 122A-1. Given that Debtor has substantially complied with the filing requirements, and has not previously had any bankruptcy case dismissed, the Court is inclined to waive the requirements of Local Rule 1017-(2)(c).
TENTATIVE RULING
The Court is inclined to GRANT the motion conditioned on Debtor’s filing of the second page of Form 122A-1 within fourteen days.
APPEARANCES REQUIRED.
Debtor(s):
Shannon L Harrell Pro Se
Movant(s):
Shannon L Harrell Pro Se
Trustee(s):
Todd A. Frealy (TR) Pro Se
11:00 AM
Docket 9
BACKGROUND
On October 12, 2017, Walter Roman ("Debtor") filed a skeletal Chapter 7 voluntary petition. Debtor had filed five previous bankruptcy since 2011, all of which were summarily dismissed. Debtor did not file the balance of the case commencement documents, and, on October 30, 2017, the case was dismissed.
On October 31, 2017, Debtor filed a motion to vacate dismissal and extend time to file schedules. Subsequently, on November 13, 2017, Debtor filed a Chapter 13 voluntary petition, case no. 17-bk-19406-MH.
DISCUSSION
Local Rule 1017-(2)(c) states:
Any motion requesting that the dismissal of a case for failure to timely file a required document or for failure to appear at the meeting of creditors be
11:00 AM
vacated must include as exhibits to the motion all of the documents that were not timely filed and must be supported by a declaration under penalty of perjury establishing a sufficient explanation why the documents were not timely filed. The motion may be ruled on without further notice or hearing pursuant to LBR 9013-(1)(q).
Here, Debtor did not comply with the above rule. Nor has Debtor filed any of the required documents in the twenty-nine days since he filed the motion to vacate dismissal. For those reasons, and because of Debtor’s previous bankruptcy filing history, the Court will not vacate the dismissal.
TENTATIVE RULING
The Court will DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Walter Roman Pro Se
Movant(s):
Walter Roman Pro Se
Trustee(s):
Todd A. Frealy (TR) Pro Se
2:00 PM
Adv#: 6:17-01205 PRINGLE v. Rizzo et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
Scott Leigh Baumann Represented By Jenny L Doling
Defendant(s):
Michael R Rizzo Pro Se
Linda M Rizzo Pro Se
Joint Debtor(s):
Holly Lynn Baumann Represented By Jenny L Doling
Plaintiff(s):
JOHN P PRINGLE Represented By Carmela Pagay
Trustee(s):
John P Pringle (TR) Represented By
2:00 PM
Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:17-01003 Cisneros v. Castro, Jr.
SETTLED
From: 3/8/17, 7/12/17, 10/25/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Luz Ampelia Castro Represented By George P Hobson Jr
Defendant(s):
Enrique Castro Jr. Represented By
C Scott Rudibaugh
Plaintiff(s):
Arturo M. Cisneros Represented By Carmela Pagay Todd A Frealy
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy Carmela Pagay
2:00 PM
Adv#: 6:16-01176 Simons v. Navarro
From: 9/7/16, 11/9/16, 1/11/17, 3/8/17, 4/12/17, 5/17/17, 6/7/17, 7/26/17, 9/27/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Jose Antonio Hernandez Represented By
Jessica De Anda Leon
Defendant(s):
Carolina Villalobos Navarro Represented By Christopher J Langley
Plaintiff(s):
Larry D Simons Represented By Frank X Ruggier
Trustee(s):
Larry D Simons (TR) Represented By Frank X Ruggier
2:00 PM
Adv#: 6:10-01319 DIAMOND v. Empire Partners, Inc., a California Corporation et
EH
Docket 424
- NONE LISTED -
Debtor(s):
Empire Land, LLC Represented By James Stang Robert M Saunders Michael I Gottfried
------ O'melveny & Myers Dean A Ziehl
Jonathan A Loeb P Sabin Willett
Richard K Diamond (TR) Jeffrey Rosenfeld
Defendant(s):
Empire Partners, Inc., a California Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
James P Previti Represented By Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
2:00 PM
Larry Day Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Neil M Miller Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
Paul Roman Represented By
Jonathan A Loeb Jeffrey Rosenfeld P Sabin Willett
O'Melveny & Myers, LLP Represented By Howard Steinberg P Sabin Willett
Peter T. Healy Represented By Howard Steinberg P Sabin Willett
Movant(s):
RICHARD K DIAMOND Represented By Richard S Berger Peter M Bransten Michael I Gottfried
Aleksandra Zimonjic Monica Rieder Cynthia M Cohen Roye Zur
Richard K Diamond (TR) Represented By Cynthia M Cohen Michael I Gottfried Peter M Bransten
2:00 PM
Plaintiff(s):
RICHARD K DIAMOND Represented By Richard S Berger Peter M Bransten Michael I Gottfried
Aleksandra Zimonjic Monica Rieder Cynthia M Cohen Roye Zur
Trustee(s):
Richard K Diamond (TR) Represented By Michael I Gottfried Richard S Berger Rodger M Landau Richard K Diamond Peter M Bransten
Aleksandra Zimonjic Monica Rieder
Lisa N Nobles Peter J Gurfein Paul Hastings Roye Zur Amy Evans
Best Best & Krieger Franklin C Adams Thomas J Eastmond
2:00 PM
EH
Docket 36
BACKGROUND
On November 2, 2016, Jaison Surace ("Debtor") filed a Chapter 7 voluntary petition. On December 15, 2016, Setareh Abbasi ("Plaintiff") filed a complaint against Debtor, and Walie & Marym Qadir (collectively, the "Qadirs") for: (1) determination that debt is non-dischargeable (523(a)(2) & (4)); (2) breach of contract; (3) quiet title; (4) cancellation of instrument based on voidable transfer; (5) false promise; (6) violation of Penal Code 496; (7) unjust enrichment; and (8) money had and received.1 On March 27, 2017, Plaintiff filed an unsecured claim in the amount of $311,564 ("Claim 17").
On November 7, 2017, the Trustee filed a motion to approve compromise. A brief summary of the factual background is necessary to understand the details of the settlement.
Prior to the petition date, Debtor owned certain real property located in Corona, California (the "Corona Property") and Lake Elsinore, California (the "Lake Elsinore Property"). In the year prior to the petition date, both the Corona Property and the Lake Elsinore Property were transferred to the Qadirs. In May 2016, however,
2:00 PM
Plaintiff failed a state court complaint against the Qadirs on the basis that Plaintiff had entered into an agreement with Debtor to purchase the Corona Property. The state court complaint was not resolved prior to Debtor’s filing of bankruptcy.
Trustee, by adversary proceeding filed January 11, 2017, sought, and obtained, avoidance and recovery of the transfers of the Corona Property and Lake Elsinore Property. Trustee has indicated that he intends to market and sell both properties.
In August 2017, Plaintiff and the Qadirs went to mediation and reached a settlement of this adversary proceeding. The settlement provides that Claim 17 will be allowed as a secured claim in the amount of $155,000 to be paid after sale of the Corona Property, that both Plaintiff and the Qadirs will cooperate with the sale of the Corona Property, and that Plaintiff, who is currently residing in the Corona Property, will be responsible for the homeowners’ association dues and property taxes until the property is sold. The Trustee has estimated that the net proceeds to the estate for the sale of the Corona Property will be $70,400 (after subtracting the payment to be made pursuant to this settlement agreement), and that the net proceeds to the estate after the sale of the Lake Elsinore Property will be $369,400.
DISCUSSION
Fed. R. Bankr. P. Rule 9019(a) states: "On motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct." The Court may grant approval if it determines that the compromise is "fair and equitable." See In re Berkeley Delaware Court, LLC, 834 F.3d 1036, 1039 (9th Cir. 2016). In determining whether the compromise is fair and equitable, the Court applies a four-factor test. See In re DiCostanzo, 399 Fed. Appx. 307, 308 (9th Cir. 2010). The test was originally outlined in In re A & C Props., and provides for consideration of
The probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it;
2:00 PM
the paramount interest of the creditors and a proper deference to their reasonable views in the premises.
784 F.2d 1377, 1381 (9th Cir. 1986) (quotation omitted). "The bankruptcy court has great latitude in approving compromise agreements." In re Woodson, 839 F.2d 610, 620 (9th Cir. 1988). Typically, "a compromise should be approved unless it falls below the lowest point in the range of reasonableness." In re Art & Architecture Books of the 21st Century, 2016 WL 1118742 at *25 (Bankr. C.D. Cal. 2016) (quotation omitted).
Regarding the first three factors, it would appear that Plaintiff and the Trustee are settling the dispute for approximately half of the amount claimed by Plaintiff, as reflected by Claim 17. A review of the complaint in the adversary proceeding reveals that this case is factually complicated and potentially involves significant evidence and events that occurred outside this country, specifically, in Afghanistan. Given the uncertainty and apparent complexity of the litigation, the Court finds that settling the claim for approximately half the amount claimed is reasonable. Regarding the final factor, the interests of creditors, Trustee has represented that unsecured creditors will be paid in full if both the Corona Property and Lake Elsinore Property are sold.
Therefore, this factor also weighs in favor of approval.
TENTATIVE RULING
Notice being proper and no opposition having been filed, the Court will GRANT the motion approving the compromise.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
2:00 PM
Movant(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
Anthony A Friedman
Trustee(s):
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
Anthony A Friedman
2:00 PM
Adv#: 6:16-01295 Abbasi v. Surace et al
From: 2/15/17, 5/17/17, 6/7/17, 10/25/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Defendant(s):
Jaison Vally Surace Represented By Batkhand Zoljargal
Walie Qadir Represented By
Batkhand Zoljargal
Marym Qadir Represented By
Batkhand Zoljargal
Plaintiff(s):
Setareh Abbasi Represented By
Bruce Dannemeyer
2:00 PM
Trustee(s):
Bruce Dannemeyer
John P Pringle (TR) Represented By Todd A Frealy Carmela Pagay
Anthony A Friedman
3:00 PM
Adv#: 6:17-01187 Henry v. Real Time Resolutions Inc et al
EH
Docket 38
- NONE LISTED -
Debtor(s):
Luevina Henry Represented By Nancy Korompis
Defendant(s):
Real Time Resolutions Inc Represented By Renee M Parker
THE BANK OF NEW YORK Represented By Renee M Parker
Riverside County Sheriff Represented By Ronak N Patel
Riverside County Sheriff Stanley Represented By
Ronak N Patel
Tavares Pro Se
Rod Danielson Pro Se
County Of Riverside Represented By Ronak N Patel
JPMorgan Chase Bank, N.A. Represented By Matthew S Henderson
3:00 PM
Movant(s):
Luevina Henry Pro Se
Plaintiff(s):
Luevina Henry Pro Se
Trustee(s):
Rod (MJ) Danielson (TR) Pro Se
12:30 PM
Docket 70
11/30/2017
On November 9, 2016, Fonda Cormier ("Debtor") filed her petition for chapter 13 relief. Rod Danielson was the duly appointed chapter 13 trustee ("Trustee"). The Debtor’s chapter 13 plan was confirmed on December 28, 2016.
On May 9, 2017, Trinity Financial Services LLC ("Trinity") filed a motion for relief from stay ("MFR"). An adequate protection order on the stipulation of the Debtor and Trinity was filed resolving the MFR on June 27, 2017. On June 30, 2017, the Debtor filed a notice to conversion and the Court converted the case on the same date pursuant to § 1307(a) ("Conversion Order").
On September 6, 2017, the Debtor filed a Motion to Vacate Order or to Reconvert to Original Chapter 13. The reconversion request was granted by the Court and the case reconverting the case to a case under chapter 13 was entered on October 6, 2017.
On October 27, 2017, Trinity filed its motion to vacate, in part, the order confirming plan (the "Motion"). Specifically, Trinity objects to receipt of payments via the Trustee through conduit payments and instead seeks an order permitting the Debtor to make direct payments.
DISCUSSION
The Court has reviewed the arguments by both sides regarding the applicability of conduit payments. The Court agrees with the Trustee that this case presents a situation where conduit payments were appropriate given the extent of Debtor’s history of nonpayment to Trinity based on the filed proof of claim. The Court does not find that the Trustee’s recommendation to require conduit payments
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was adverse to Trinity based on the history of nonpayment. At this point, however, given that Trinity has asserted that direct payments are in its best interest - whether because their accounting system is not able to track conduit payments or because, as Trinity indicates it may want to take a less aggressive tack with respect to delinquent payments – the Court finds that a request by Trinity to receive direct payments going forward is justified.
TENTATIVE RULING
The Court is not inclined to vacate the confirmation – which would purportedly have a retroactive effect. Instead, it appears more appropriate to construe the instant motion as a motion to modify and modify the confirmation order such that payments to Trinity shall be paid directly by the Debtor on a prospective basis.
APPEARANCES REQUIRED.
Debtor(s):
Fonda Cormier Represented By Manfred Schroer
Movant(s):
Trinity Financial Services LLC Represented By Henry D Paloci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
11/30/17
BACKGROUND
On February 21, 2017, Ernie Macias ("Debtor") filed his petition for chapter 13 relief. The Debtor’s case was filed by Alon Darvish ("Darvish"). On March 13, 2017, the Debtor’s case was dismissed for failure to file information.
On March 24, 2017, the Office of the United States Trustee ("UST") filed a Motion to Disgorge Attorney’s Fees ("Disgorgement Motion"). On June 13, 2017, the Court granted in part and denied in part the UST’s Disgorgement Motion (the "Disgorgement Order"). The Disgorgement Order required Darvish to file his disclosure of compensation, and to disgorge fees received from the Debtor back to him.
On September 20, 2017, the UST filed its Motion For An Order To Show Cause Why Alon Darvish Should Not Be Held In Contempt Of Court Pursuant To 11
U.S.C. § 105 And Federal Rule Of Bankruptcy Procedure 9020 (the "Motion for OSC"). The Motion for OSC specifically asserted that Darvish had failed to comply with any part of the Disgorgement Order. The UST’s Motion for OSC further asserted that Darvish had repeatedly failed to disclose compensation and had been sanctioned for such conduct under similar circumstances in at least 6 other cases. (Motion for OSC at 9).
On October 20, 2017, the Court granted the Motion for OSC and ordered Darvish to show cause why he should not be held in contempt (the "OSC"). Darvish filed his response to the OSC on November 16, 2017 ("Response"). On November 21, 2017, the UST replied to the Response.
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DISCUSSION
In his Response, Darvish indicated that his practice includes the filing of skeletal petitions for chapter 13 debtors for the purpose of stopping foreclosures. He indicated that when such skeletal petitions are filed, his software does not file the Disclosure of Compensation. Darvish asserts that he is a solo practitioner who is overwhelmed and understaffed and who is trying to rectify the issues in his practice. In Reply, the UST objects particularly to Darvish’s failure to outline specific steps he intends to take to remedy the issues at his firm. The UST is also concerned that Darvish has essentially admitted that his practice includes the filing of abusive petitions intended solely to avoid foreclosures. The UST requests that the Court continue the matter for Darvish to set forth specific remedial actions as ordered. The UST also requests that the Court separately consider whether a separate order to show cause is justified based on Darvish’s inherently abusive prevention practice.
TENTATIVE RULING
The Court agrees with the UST that Darvish’s explanation is insufficient. Darvish’s Response indicates clearly the reason for the failure to file disclosure of compensation forms. Despite this fact, he does not explain the ongoing failure to file these forms, particularly where he has previously been sanctioned for failing to disclose his compensation. The ongoing failure to file required documents, despite having already been sanctioned, supports the UST’s request for a specific plan of remediation. Absent such plan, Darvish may simply continue to rely on his thus far unreliable bankruptcy filing software.
Separately, the UST’s concern regarding Darvish’s practice of filing skeletal petitions is well-taken. In particular, if Darvish is advising his clients to file abusive petitions to delay foreclosure, such conduct may warrant further sanctions/discipline.
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APPEARANCES REQUIRED.
Debtor(s):
Ernie Macias Represented By
Alon Darvish
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 30
11/30/2017
DISCUSSION
On September 2, 2017 ("Petition Date"), Jeffrey Elkins ("Debtor") filed his petition for chapter 13 relief. Rod Danielson is the duly appointed chapter 13 trustee ("Trustee"). The Debtor’s petition was initially filed as incomplete. As such, the Docket reflects that a Case Commencement Deficiency Notice was issued on the Petition Date indicating "YOUR CASE MAY BE DISMISSED IF YOU FAIL TO CURE THE FOLLOWING DEFICIENCIES." Among the documents indicated was the Declaration regarding income received within 60 days of the Petition Date pursuant to 11 U.S.C. § 521(a)(1)(B)(iv). (Docket 1-2). The deadline to file the deficient documents was September 18, 2017. On September 11, 2017, the Debtor filed the § 521 declaration but incorrectly attached the pay advices for Megan Elkins, and not for the Debtor.
On October 23, 2017, the case was dismissed for failure of the Debtor to file the pay advices required pursuant to 11 U.S.C. § 521(a)(1)(B)(iv).
On October 26, 2017, the Debtor filed a motion to vacate the dismissal ("Motion") and on the same date filed the Debtor’s pay advice. On October 27, 2017, the Trustee filed comments indicating his conditional approval of the Motion.
Specifically, the Trustee recommended approval on the following conditions:
Due process (i.e. notice) to all creditors pursuant to LBR 9013-1; and
Debtor must be able to certify that he is holding all outstanding plan payments at the time of the hearing to be tendered to the Trustee on entry of the order granting the Motion.
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TENTATIVE RULING
Finding service proper, the Court is inclined to GRANT the Motion on the Trustee’s conditions.
APPEARANCES REQUIRED.
Debtor(s):
Jeffrey Elkins Represented By Anthony P Cara
Movant(s):
Jeffrey Elkins Represented By Anthony P Cara
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Arturo Olvera Represented By William Radcliffe
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ramon Gabriel Alvarez Represented By Devin Sawdayi
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jorge Manuel Azmitia Represented By Nicholas M Wajda
Joint Debtor(s):
Yoshiko Azmitia Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ricardo Munoz Represented By Michael E Clark
Joint Debtor(s):
Roseann Munoz Represented By Michael E Clark
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Francisco R Tamayo Represented By Alla Tenina
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Julio C. Davila Represented By Michael Jay Berger
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Manuel Mayorga Represented By Curtis R Aijala
Joint Debtor(s):
Teodora Mayorga Represented By Curtis R Aijala
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gregory O. Ouma Represented By
James D. Hornbuckle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #13 EH
Docket 23
11/30/2017
Summary of the Motion:
TENTATIVE
Based on the Debtor’s evidence of value of the Property, which supports the Debtor’s request to avoid the junior lien on the Property, the Court is inclined to GRANT upon receipt of a chapter 13 discharge.
APPEARANCE IS WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued to the next Chapter 13 calendar.
PREVAILING PARTY SHOULD SUBMIT THE FORM ORDER WITHIN 7 DAYS, A BLANK COPY OF WHICH MAY BE DOWNLOADED FROM THE FORMS SECTION ON THE COURT’S WEBSITE.
Debtor(s):
Daniel Robert Shapiro Pro Se
12:30 PM
Movant(s):
Daniel Robert Shapiro Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Also #12 EH
Docket 0
- NONE LISTED -
Debtor(s):
Daniel Robert Shapiro Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Martha Mata Represented By
Inez Tinoco-Vaca
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jacqueline Hurtado Represented By Rhonda Walker
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Rafael Alvarado Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sergio Alvarez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Michael Phillip Young Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Patricia Morales Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Josephine Theobald Represented By Emilia N McAfee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jules Andre Nelson Represented By Emilia N McAfee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Edgar Raymond Domingue Sr. Represented By Gregory M Shanfeld
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Roman Negrete Manrriquez Represented By Patricia A Mireles
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Michelle Crain Represented By Roland D Tweed
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Virginia Fonseca Represented By Andy C Warshaw
Joint Debtor(s):
Jesus Fonseca III Represented By Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Eva Quintero Martinez Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jonathan Siqueiros Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Rafeek Nehman Hamada Represented By
Eric Bensamochan
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Fernando Macias Perez Represented By Edgar P Lombera
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Gilbert Richard Enriquez Represented By
Raj T Wadhwani
Joint Debtor(s):
Lisa Lynn Enriquez Represented By
Raj T Wadhwani
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Maisha Tamu Mesa Pro Se
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:30 PM
MOVANT: ANTHONY J MCPIKE
EH
Docket 11
11/30/2017
The Motion seeks to continue the stay as to all creditors. However, the proof of service appears to indicate that only the secured creditors were served with the Motion.
The Court finds that service on Toyota was not proper. Rule 7004 requires service to the attention of an officer. Although Debtor employed a PO Box indicated in a proof of claim filed in a prior case, the creditor has not yet made an appearance in the instant case and must thus be served at its corporate office to the attention of an officer.
Service on Carrington Mortgage Services is not proper. Carrington should have been served per FRBP 7004 at its address as indicated on the California Secretary of State Website. That address is in Anaheim, CA. Instead, Carrington was served at a PO Box indicated on correspondence it sent to the Debtor prepetition. Additionally, the Service List does not reflect service on Carrington to the attention of an officer.
The California Secretary of State Website indicates an address for Bungalows at Old School House Association in Murrieta, CA. Service on Bungalows is also improper.
As to the merits, the Debtor has explained why it did not have sufficient funds to tender a plan payment on the date of the confirmation hearing. However, the Debtor’s
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Motion does not indicate why the Debtor was late on his October postpetition mortgage payment. The postpetition mortgage delinquency was a second basis for dismissal of the case at the confirmation hearing.
Nor has Debtor named any of the secured creditors in the caption of the notice.
Regardless of the merits, failure to give notice per Rule 7004 is fatal, and there is an insufficient notice period remaining to continue the hearing. On that basis, the Court’s tentative ruling is to DENY the Motion.
APPEARANCES REQUIRED.
Debtor(s):
Anthony J McPike Represented By Dana Travis
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 117
- NONE LISTED -
Debtor(s):
Juana Judith Mejia Represented By Javier H Castillo
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 94
- NONE LISTED -
Debtor(s):
Silvia Vargas Represented By
Matthew D Resnik
S Renee Sawyer Blume
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 245
- NONE LISTED -
Debtor(s):
Jose N Recinos Represented By Michael Smith Sundee M Teeple
Joint Debtor(s):
Patricia Recinos Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 98
- NONE LISTED -
Debtor(s):
Bryan K. Harrison Represented By April E Roberts
Joint Debtor(s):
Dawn Harrison Represented By April E Roberts
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 66
- NONE LISTED -
Debtor(s):
Scott Allan Oswald Represented By Richard Lynn Barrett
Joint Debtor(s):
Lisa Frances Oswald Represented By Richard Lynn Barrett
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 32
- NONE LISTED -
Debtor(s):
Alexis I Barahona Represented By Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 34
- NONE LISTED -
Debtor(s):
John D Castro Jr Represented By Chris A Mullen
Joint Debtor(s):
Jennifer Manda Castro Represented By Chris A Mullen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 26
- NONE LISTED -
Debtor(s):
Gabriel Cruz Represented By
Christopher J Langley
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 25
- NONE LISTED -
Debtor(s):
Howard Lamar Sanders Represented By
D Justin Harelik
Joint Debtor(s):
Jenique B. Sanders Represented By
D Justin Harelik
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 36
- NONE LISTED -
Debtor(s):
Gwendolyn Washington Represented By Julie J Villalobos
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
EH
Docket 20
- NONE LISTED -
Debtor(s):
Mandy Catron Represented By Stephen S Smyth
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 31
- NONE LISTED -
Debtor(s):
Maria Artemisa Griffith Represented By Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 102
- NONE LISTED -
Debtor(s):
Garan Bales Represented By
Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
12:31 PM
Docket 40
- NONE LISTED -
Debtor(s):
Jennifer Mae White Represented By Steven A Alpert
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
HOLDING DATE
From: 7/25/17, 8/22/17, 10/18/17 Also #2 & #3
EH
Docket 88
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
10:00 AM
From: 3/28/17, 5/30/17, 7/25/17, 8/22/17, 10/18/17
Also #1 & #3 EH
Docket 6
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
10:00 AM
From: 10/18/17 Also #1 & #2 EH
Docket 80
Debtor(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
Movant(s):
Rio Rancho Super Mall LLC Represented By Christopher J Langley Steven P Chang
10:00 AM
MOVANT: NATIONSTAR MORTGAGE LLC
From: 10/24/17
EH
Docket 86
Service is Proper Opposition: Limited
Subject to discuss from the parties regarding an adequate protection order, the Court is inclined to GRANT relief from stay pursuant to § 362(d)(1). GRANT waiver of 4001 (a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Jacob J Cannon Represented By Lisa H Robinson John F Brady
10:00 AM
Joint Debtor(s):
Danielle M Cannon Represented By Lisa H Robinson John F Brady
Movant(s):
NATIONSTAR MORTGAGE LLC Represented By
Andrew Kussmaul Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: DITECH FINANCIAL LLC
From: 10/3/17, 11/7/17 EH
Docket 67
- NONE LISTED -
Debtor(s):
Jeffrey Michael Berger Represented By Jenny L Doling
Joint Debtor(s):
Debra Lynn Berger Represented By Jenny L Doling
Movant(s):
DITECH FINANCIAL LLC Represented By Natalie E Lea Jamie D Hanawalt
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
From: 10/3/17, 11/7/17 EH
Docket 60
Service is Proper Opposition: Limited
Subject to discussion from the parties regarding adequate protection, the Court is inclined to GRANT the motionb based on the post-confirmation defaults.
APPEARANCES REQUIRED.
Debtor(s):
Zachary Lee Nowak Represented By John F Brady
Movant(s):
WELLS FARGO BANK, N.A. Represented By Alexander K Lee
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK, N.A.
From: 11/7/17 EH
Docket 44
11/07/2017
Service: Proper
Opposition: Yes, filed 10/11
Parties to indicate whether they have reached agreement regarding the terms of an APO.
APPEARANCES REQUIRED.
Debtor(s):
Lilia Ivethe Fong Represented By John F Brady
Movant(s):
Wells Fargo Bank N.A. Represented By Vanessa A Cole Bruce E Brown Senique Moore
Deborah L Rothschild Alexander K Lee
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: JUDDY OLIVARES
EH
Docket 148
On January 24, 2013, Juddy Olivares ("Olivares") filed state court litigation against Sam Dason ("Debtor") and his dental practice. Trial was held on February 25, 2016, and Olivares obtained judgment against Debtor and his dental practice. On February 26, 2016, three material events occurred: (1) the state court signed the proposed judgment; (2) Debtor filed bankruptcy; and (3) the state court docketed the proposed judgment. The evidence indicates that Debtor filed bankruptcy at 12:23 p.m. and that the state court judgment was docketed at 2:43 p.m. It is unclear when the state court judgment was signed, but, clearly it was signed prior to the judgment being docketed.
On August 22, 2016, Olivares filed an adversary complaint against Debtor and his dental practice for non-dischargeability under § 523(a)(6).
On November 14, 2017, Olivares filed a motion for relief from the automatic stay. Olivares appears to request an order holding that that the entry of judgment by the state court was merely a ministerial act, or, in the alternative, an order annulling the automatic stay, or, in the alternative, relief from the automatic stay to, presumably, obtain a new judgment. On November 20, 2017, Debtor filed his opposition to the
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motion as well as evidentiary objections. The following day, Debtor filed an amended opposition to the automatic stay. Debtor argues that annulment of the automatic stay is not warranted, and that there is no cause for relief from the automatic stay because the state court judgment will not be preclusive on Olivares’s adversary proceeding.
Olivares cites In re Pettit for the proposition that ministerial acts do not violate the automatic stay. 217 F.3d 1072, 1080 (9th Cir. 2000) ("We now adopt the ministerial act exception for this circuit and apply it the case before us."). While the Court acknowledges that there is a ministerial act exception, it is less than clear that this exception applies to the case at hand. Pettit states: "Applying the logic of the exception, the judicial proceeding in this case ended once Judge Illston signed the order to release the funds. The clerk of the court had no discretion as to whether to issue the check to the Trust Funds and her act was, therefore, purely ministerial." Id. Therefore, while Pettit concluded that various administrative actions taken after the signing of the order were ministerial, it is implied that the signing of the order itself was not ministerial. As Pettit stated: "Ministerial acts or automatic occurrences that entail no deliberation, discretion, or judicial involvement do not constitute continuations of such a proceeding." Id. The signing of the judgment, however, does entail deliberation, discretion, and judicial involvement. Therefore, the signing of the order is not a ministerial act.
Debtor has not provided adequate evidence establishing that the judgment was signed prior to Debtor’s filing of bankruptcy. Debtor provides a transcript of the state court hearing which includes the following:
The Court: All right. Prepare everything for the Court’s signature.
Mr. Panitz: I will do that. And if I submit it overnight, will the Court sign and enter it first thing in the morning?
The Court: Sure.
This evidence simply does not establish that the state court judgment was, in fact, signed before 12:23 p.m. In the absence of evidence establishing that the state court judgment was in fact signed before 12:23 p.m., Olivares cannot establish that the ministerial act exception applies.1
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Olivares alternatively argues that grounds exist for the Court to annul the automatic stay. In determining whether cause exists to retroactively annul the automatic stay, this Court looks to the equities and the Fjelsted factors:
Determining whether cause exists to annul the stay is a case-by-case inquiry based on a balance of the equities. In conducting this inquiry the bankruptcy court, among other factors, should consider whether the creditor knew of the bankruptcy when violating the stay and whether the debtor’s conduct was unreasonable, inequitable or prejudicial to the creditor.
In Fjeldsted, we approved additional factors for consideration in assessing the equities. The twelve nonexclusive factors are: (1) number of filings; (2) whether, in a repeat filing case, the circumstances indicate an intention to delay and hinder creditors; (3) a weighing of the extent of prejudice to creditors or third parties if the stay relief is not made retroactive, including whether harm exists to a bona fide purchaser; (4) the debtor’s overall good faith (totality of circumstances test); (5) whether creditors knew of stay but nonetheless took action, thus compounding the problem; (6) whether the debtor has complied, and is otherwise complying, with the Bankruptcy Code and Rules; (7) the relative ease of restoring parties to the status quo ante; (8) the costs of annulment to debtors and creditors; (9) how quickly creditors moved for annulment, or how quickly debtor moved to set aside the sale or violative conduct; (10) whether, after learning of the bankruptcy, creditors proceeded to take steps in continued violation of the stay, or whether they moved expeditiously to gain relief; (11) whether annulment of the stay will cause irreparable injury to the debtor; and (12) whether stay relief will promote judicial economy or other efficiencies. The Panel in Fjeldsted cautioned that the twelve factors are merely a framework for analysis and not a scorecard, and that in any given case, one factor may so outweigh the others as to be dispositive.
In re Estavan Capital LLC, 2015 WL 7758494 at *5 (B.A.P. 9th Cir. 2015) (citations and quotations omitted).
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As noted in the first paragraph of the above excerpt, the two most prominent factors considered by the Court are the good faith of the party violating the automatic stay, and the good faith of the debtor. Here, the party that potentially violated the automatic stay was the state court – and we can presume that the state court did not have notice of the automatic stay when the violation occurred. Furthermore, the timing of the filing of Debtor’s bankruptcy petition, which was filed after trial was concluded but before judgment was docketed, is clearly "unreasonable, inequitable or prejudicial to the creditor."
The totality of the circumstances here are strongly in favor of granting annulment: the violation of the automatic stay, if any, was done by the state court, a party whose good faith can be presumed, while the timing of Debtor’s filing indicates that the bankruptcy petition was clearly intended to frustrate the collection efforts of Olivares. Furthermore, given the status of the state court proceedings at the time of the bankruptcy filing (post-trial), and the nature of the underlying suit (non-bankruptcy related), Olivares has clearly established cause for relief from the automatic stay distinct from demonstrating cause for annulment. Requiring Olivares to return to state court to obtain a new signed judgment is a grossly inefficient use of judicial resources.
Therefore, the Court is inclined to GRANT annulment of the automatic stay and waiver of the 4001(a)(3) stay and DENY request under ¶ 2 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Sam Daniel Dason Represented By Robert G Uriarte
Joint Debtor(s):
Greeta Sam Dason Represented By Robert G Uriarte
Movant(s):
Juddy Olivares Represented By Lazaro E Fernandez
10:00 AM
Trustee(s):
Charity J Miller Robert P Goe
Lynda T. Bui (TR) Represented By Brett Ramsaur
10:00 AM
MOVANT: U.S. BANK N.A.
EH
Docket 32
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Irma Hernandez Represented By David T Egli
Movant(s):
U.S. Bank N.A., as trustee, on behalf Represented By
Daniel K Fujimoto Caren J Castle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: BMW BANK OF NORTH AMERICA
EH
Docket 51
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Fernando Fabrigas Sr. Represented By
R Creig Greaves
Joint Debtor(s):
Estela F. Fabrigas Represented By
R Creig Greaves
Movant(s):
BMW Bank of North America Represented By Zann R Welch Bret D. Allen
10:00 AM
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brandon J Iskander
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
EH
Docket 24
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT relief pursuant to § 362(d)(4) based on multiple bankruptcy filings and multiple unauthorized transfers. GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 10. DENY request under ¶ 11 for lack of cause shown. DENY request under ¶ 14 as moot.
APPEARANCES REQUIRED.
Debtor(s):
Maria Armina Policarpio Trinidad Pro Se
Movant(s):
U.S. Bank National Association, as Represented By
Angie M Marth
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: HSBC BANK USA NATIONAL ASSOCIATION
EH
Docket 33
Service is Proper Opposition: Yes
Debtor to confirm she is current and parties to discuss adequate protection. APPEARANCES REQUIRED.
Debtor(s):
Jaelyn Roylene Young Represented By Christopher J Langley
Movant(s):
HSBC Bank USA, National Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: AMERICREDIT FINANCIAL SERVICES, INC.
EH
Docket 17
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Tabatha Reece Represented By Patricia M Ashcraft
Movant(s):
Americredit Financial Services, Inc., Represented By
Sheryl K Ith
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 15
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Elena Navarro Arriaga Represented By Gary S Saunders
Movant(s):
Wells Fargo Bank, N.A. Represented By
Armin M Kolenovic
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 14
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Joshua Anthony Beltran Represented By Neil R Hedtke
Joint Debtor(s):
Mabel Paz Beltran Represented By Neil R Hedtke
Movant(s):
Toyota Motor Credit Corporation Represented By
Robert S Lampl
10:00 AM
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
Silverado 1500 Crew Cab LT 2WD
MOVANT: BMW FINANCIAL SERVICES NA, LLC
EH
Docket 10
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Yvette Arzate Represented By Timothy W Combs
Movant(s):
BMW Financial Services NA, LLC Represented By
Bret D. Allen Alka Pawar
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
MOVANT: AMERICREDIT FINANCIAL SERVICES, INC.
EH
Docket 8
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Jose C. Ollarsaba Represented By Christopher J Langley
Movant(s):
AmeriCredit Financial Services, Inc. Represented By
Sheryl K Ith
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
U.S.C. 362(j) or That No Stay is in Effect under 11 U.S.C. 362(c)(4)(A)(ii) MOVANT: WELLS FARGO BANK NA
EH
Docket 7
Service is Proper Opposition: None
Debtors had two bankruptcy cases dismissed in the year prior to filing the instant case. The first case was dismissed on June 26, 2017, for failure to file case commencement documents. The second case was dismissed on October 23, 2017, for failure to file case commencement documents. This case was dismissed on November 27, 2017, for failure to file case commencement documents.
11 U.S.C. § 362(c)(4)(A)(ii) provides that if a debtor had two previous cases dismissed within a year of the instant case, then, absent court order, the automatic stay does not go into effect. Here, the Court did not impose the automatic stay, and, therefore, the automatic stay was never effective in this case. Therefore, the Court is inclined to GRANT the motion.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
10:00 AM
Debtor(s):
Arnel L Ganzon Pro Se
Movant(s):
WELLS FARGO BANK, N.A. Represented By
Dane W Exnowski
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ANDY CHOU
EH
Docket 7
Service is Improper Opposition: Yes
This matter was set on shortened notice pursuant to the Court’s self-calendaring procedures. The self-calendaring procedures require that telephonic notice be provided at least five court days prior to the hearing, and that proof of telephonic notice be filed at least three court days prior to the hearing. Here, rather than file a separate declaration of telephonic notice, Movant has indicated on its proof of service that telephonic notice was provided to Debtor. Movant has listed an incorrect phone number, however, and, therefore, it is unclear whether effective telephonic notice was provided. Movant further indicated on the proof of service that telephonic notice was given on February 21, 2017, which is clearly incorrect. The Court is inclined to CONTINUE the matter for proper service on Debtor.
APPEARANCES REQUIRED.
Debtor(s):
Kai Kyung Dong Lee Pro Se
10:00 AM
Movant(s):
Andy Chou Represented By
Luke P Daniels
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: ALFREDO MANZO ARRIETA AND MAYTE HERNANDEZ-ARRIETA
EH
Docket 13
Service: Proper Opposition: None
The Court having reviewed the motion, and Debtor having presented clear and convincing evidence sufficient to rebut the presumption that the case was not filed in good faith, the Court is inclined to GRANT the motion, CONTINUING the automatic stay as to Wells Fargo.
APPEARANCES REQUIRED.
Debtor(s):
Alfredo Manzo Arrieta Represented By Andy C Warshaw
Joint Debtor(s):
Mayte Hernandez- Arrieta Represented By Andy C Warshaw
Movant(s):
Alfredo Manzo Arrieta Represented By
10:00 AM
Andy C Warshaw
Mayte Hernandez- Arrieta Represented By Andy C Warshaw
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
$515.37
EH
Docket 179
On November 10, 2016, B&B Family, Inc. ("Debtor") filed a Chapter 11 voluntary petition. On November 30, 2016, the Court entered an order authorizing the employment of The Turoci Firm ("Applicant") as Debtor’s general bankruptcy counsel effective November 10, 2016. On November 14, 2016, Debtor’s second amended Chapter 11 plan was confirmed.
On November 8, 2016, Applicant filed a final fee application. The Court notes that Local Rule 2016-1(c)(3)(A) states that the final fee application should be filed promptly after confirmation, although the Court will waive the requirement because Applicant is not requesting fees for any work done during that six day period.
The Court has reviewed Applicant’s final fee application and notes that Applicant has numerous time entries for which it has waived any charge to Debtor, and, while not set forth explicitly in the application, it also appears that Applicant likely waived many expense charges. Nevertheless, in reviewing the final fee application, the Court notes two areas of concern that apply to the reasonableness of many of the entries: (1) billing for repetitive activities; (2) billing rate for non- substantive activities or form documents.
Regarding (1), the Court notes that for those filings that required revisions or periodic filings, the time entries for the later entry often appear excessive given the amount of revision that occurred. For example, Applicant has a time entry on
2:00 PM
January 19, 2017, in the amount of $1,520 (3.8 hours), for "draft Motion to
continue use of cash collateral." This was not the first cash collateral motion in the case, however, and after comparing the motion from January 2017 with the motion from November 2016, the two motions appear almost identical. As another example, Applicant has two time entries, totaling $1,920 (4.8 hours), on May 1 and 2, 2017, for revisions to the Chapter 11 plan and disclosure statement. Those revisions, however, were minimal, as evidenced by the redlined versions [Docket Nos. 100 & 101].
Regarding (2), the courts notes that, according to Applicant’s timekeeper summary, 77% of the hours worked in this case were worked by Julie Philippi, an attorney. As a result of the high percentage of entries billing at the hourly rate of an attorney, rather than a paralegal, there are a number of entries that appear to be excessive, given the work required. For instance, an entry on March 6, 2017, indicates that Applicant billed $200 for "Amend[ing] Schedule F to add Creditor Joseph Miranda." Likewise, on June 6, 2017, Applicant billed $200 for "Prepar [ing] Notice of continued CMC," which included a sentence identifying the continued hearing date and time.
Given the complexity of Chapter 11 proceedings and the difficult in assessing the most significant billing entries, the drafting and revising of the Chapter 11 plan and disclosure statement, the Court is inclined to propose a 20% reduction in fees
– a reduction in the amount of $11,097.50 – and approve the remaining $44,390 in requested fees.
Applicant may consent to the above reduction and upload a proposed order, or the Court will continue the hearing to issue a detailed tentative ruling addressing individual time entries.
APPEARANCES REQUIRED.
Debtor(s):
B & B Family, Incorporated Represented By Todd L Turoci Julie Philippi
2:00 PM
Movant(s):
B & B Family, Incorporated Represented By Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Todd L Turoci Julie Philippi Julie Philippi Julie Philippi Julie Philippi Julie Philippi Julie Philippi Julie Philippi
11:00 AM
Docket 37
12/06/2017
Pursuant to the Trustee’s Final Report, the Trustee has waived his statutory fee for this case. There are no other professionals to be paid. As there are no fees to be approved/paid and the Court does not per se approve the final report, there does not appear to be any action for the Court to take, and this hearing will go off calendar.
APPEARANCES WAIVED. If Movant desires some relief Movant may appear telephonically.
Debtor(s):
Michael Ann Vasquez Represented By
Matthew E Faler - SUSPENDED -
Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
Docket 132
12/06/2017
The hearing on the Trustee's Final Report and related Fee Applications is CONTINUED to December 13, 2017, at 11:00 a.m.
APPEARANCES WAIVED.
Debtor(s):
Michael Sevilla Santos Represented By Jeffrey B Smith
Joint Debtor(s):
Maricar Domingo Santos Represented By Jeffrey B Smith
Trustee(s):
Larry D Simons (TR) Represented By
Larry D Simons (TR) Wesley H Avery
11:00 AM
Docket 51
12/06/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 790.20
The TFR is approved and the trustee may submit on the tentative. APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Silvana Escobar Represented By Greg C Ojeda
Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
Docket 27
12/06/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 443.78
The TFR is approved and the trustee may submit on the tentative. APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Darci Marie Guzman Pro Se
Trustee(s):
Howard B Grobstein (TR) Pro Se
11:00 AM
EH
Docket 150
- NONE LISTED -
Debtor(s):
Sam Daniel Dason Represented By Robert G Uriarte
Joint Debtor(s):
Greeta Sam Dason Represented By Robert G Uriarte
Movant(s):
Lynda T. Bui (TR) Represented By Brett Ramsaur
Trustee(s):
Lynda T. Bui (TR) Represented By Brett Ramsaur
11:00 AM
Also #5 EH
Docket 151
- NONE LISTED -
Debtor(s):
Sam Daniel Dason Represented By Robert G Uriarte
Joint Debtor(s):
Greeta Sam Dason Represented By Robert G Uriarte
Movant(s):
Lynda T. Bui (TR) Represented By Brett Ramsaur
Trustee(s):
Lynda T. Bui (TR) Represented By Brett Ramsaur
11:00 AM
Docket 82
12/06/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the Applications of the associated professionals, the following administrative claims will be allowed:
Trustee Fees: | $ 15,250 |
Trustee Expenses: | $ 201.55 |
Attorney Fees: | $28,000 |
Attorney Costs: | $1,313.40 |
Accountant Fees: | $1,782 |
Accountant Costs: | $253.10 |
The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
APPEARANCES WAIVED.
Debtor(s):
Michael Stephen Williams Represented By
Michael R Lewis - SUSPENDED -
11:00 AM
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy Carmela Pagay
11:00 AM
EH
Docket 43
12/06/2017
BACKGROUND
On January 30, 2017, Hiep Huu Phan ("Debtor") filed his petition for chapter 7 relief. Karl Anderson is the duly appointed chapter 7 trustee ("Trustee"). Among the assets of the Debtor’s estate is certain real property located at 3073 Coventry Street in Corona, CA (the "Property").
On November 10, 2017, the Trustee filed a motion seeking court authorization to sell the Property ("Motion"). The Motion indicates that the Property is held by the Debtor and his wife, Whitney Nguyen, husband and wife as joint tenants. In response to the Motion, the nonfiling spouse filed an opposition indicating that she does not oppose sale of the Property but that she has a pending divorce action and seeks to have any funds payable to her segregated into a Trust Fund pending resolution in family court regarding her "rightful share" of the $75,000 proposed payment to the Debtor in exempt funds.
DISCUSSION
In reviewing the Motion, the Court notes that the Debtor’s nonfiling spouse is indicated as holding a joint tenancy with the Debtor as to the Property. (Motion at 7:8- 9). Notwithstanding this fact, the Court has no indication from the Trustee that he has sought to sell the Property free of the nonfiling spouse’s interest in compliance with 11 U.S.C. § 363(h) and no adversary has been filed by the Trustee. In re Reed, 940 F.2d 1317, 1323–32 (9th Cir. 1991) (In bankruptcy a trustee can sell the entire property rather than just the joint-tenant's interest, provided certain conditions are
11:00 AM
met)(citing 11 U.S.C. § 363(h)). To the contrary, the Motion appears to indicate that the Trustee contemplates paying the Debtor and his nonfiling spouse the total amount of the exemption claimed by the Debtor in his amended Schedule C, without paying the nonfiling spouse the value of a joint tenancy interest in the Property. (Mot. at 12). Based on the opposition of the nonfiling spouse, it appears that she is not clear about what amount she may be owed from the sale of the Property. To avoid a potential future dispute regarding the funds, the Trustee should follow the customary procedure of seeking a sale consistent with the requirements of § 363(h).
TENTATIVE RULING
Based on the foregoing, the Court is inclined to DENY the Motion for the Trustee to demonstrate compliance with the requirements of 11 U.S.C. § 363(h).
APPEARANCES REQUIRED.
Debtor(s):
Hiep Huu Phan Represented By Toby T Tran
Movant(s):
Karl T Anderson (TR) Represented By
Misty A Perry Isaacson
Trustee(s):
Karl T Anderson (TR) Represented By
Misty A Perry Isaacson
11:00 AM
Docket 1
- NONE LISTED -
Debtor(s):
Joshua C Richardson Represented By Amid Bahadori
Trustee(s):
Robert Whitmore (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
HOLDING DATE
From: 6/7/17, 7/12/17, 8/2/17, 9/27/17, 10/4/17, 11/1/17 Also #11
EH
Docket 208
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Movant(s):
Charles Edward Schrader Pro Se
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17, 4/5/17, 6/7/17, 7/12/17, 8/2/17, 9/27/17, 10/4/17, 11/1/17
Also #10 EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:16-01170 California Solar Thermal, Inc. v. Rothman
From: 9/7/16, 1/11/17, 5/17/17, 6/7/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Richard G Rothman Represented By Daniel J Winfree
Defendant(s):
Richard G Rothman Represented By Daniel J Winfree
Joint Debtor(s):
Shari A Randall Represented By Daniel J Winfree
Plaintiff(s):
California Solar Thermal, Inc. Represented By Douglas A Plazak
2:00 PM
Trustee(s):
Howard B Grobstein (TR) Pro Se
2:00 PM
Adv#: 6:17-01156 Daff v. Fabrigas, Jr.
2) Avoidance of Constructive Fraudulent Transfers and Recovery of Same [11 U.S.C. §§ 544, 548, 550, 551; CAL. CIV. CODE §§ 3439.04, 3439.05, 3439.07, 3439.08, 3439.09]; 3) Disallowance of Claims [11 U.S.C. §502(d)]; 4) Unjust Enrichment [11 U.S.C. § 105]; 5) Declaratory Relief [11 U.S.C. §§ 541, 544; FRBP 7001(9)]; AND 6) Turnover of Property of the Estate [11 U.S.C. § 542] Nature of Suit: (13 (Recovery of money/property - 548 fraudulent transfer)),(91 (Declaratory judgment)),(11 (Recovery of money/property - 542 turnover of property)) (Iskander, Brandon)
From: 11/8/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Fernando Fabrigas Sr. Represented By
R Creig Greaves
Defendant(s):
Fernando Fabrigas, Jr. Pro Se
Joint Debtor(s):
Estela F. Fabrigas Represented By
R Creig Greaves
2:00 PM
Plaintiff(s):
Charles W. Daff Represented By Brandon J Iskander
Trustee(s):
Charles W Daff (TR) Represented By Lynda T Bui Brandon J Iskander
2:00 PM
Adv#: 6:17-01197 Itria Ventures, LLC v. Asif et al
From: 11/15/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Malik Muhammad Asif Represented By Todd L Turoci
Defendant(s):
Malik Muhammad Asif Represented By David T Egli
Zobia Asif Represented By
David T Egli
Joint Debtor(s):
Zobia Asif Represented By
Todd L Turoci
Plaintiff(s):
Itria Ventures, LLC Represented By Michael F Chekian
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Represented By Thomas H Casey
3:00 PM
ALSO #16
EH
Docket 7
- NONE LISTED -
Debtor(s):
Auto Strap Transport, LLC Represented By Todd L Turoci
Movant(s):
Auto Strap Transport, LLC Represented By Todd L Turoci
3:00 PM
EH
Docket 5
- NONE LISTED -
Debtor(s):
Auto Strap Transport, LLC Represented By Todd L Turoci
Movant(s):
Auto Strap Transport, LLC Represented By Todd L Turoci
3:30 PM
EH
Docket 129
- NONE LISTED -
Debtor(s):
Bausman and Company Incorporated Represented By
William A Smelko
Movant(s):
Robert Whitmore (TR) Represented By Franklin C Adams Best Best & Krieger
Trustee(s):
Robert Whitmore (TR) Represented By Franklin C Adams Best Best & Krieger
9:30 AM
Adv#: 6:17-01046 Chapman v. U.S. Bank, NA et al
Docket 0
Debtor(s):
Bernadette Chapman Represented By Todd L Turoci
Defendant(s):
U.S. Bank, NA Represented By
Sonia Plesset Edwards Gwen H Ribar
Wenjing Dai Represented By
Robert O Marshall
Plaintiff(s):
Bernadette Chapman Represented By Todd L Turoci Julie Philippi
10:00 AM
MOVANT: US BANK
From: 11/28/17 EH
Docket 49
Debtor(s):
Robert Allan Gloeckner Represented By Jenny L Doling
Joint Debtor(s):
Lucia Ann Gloeckner Represented By Jenny L Doling
Movant(s):
U.S. Bank NA, successor trustee to Represented By
Caren J Castle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 28
Debtor(s):
Maria Armina Policarpio Trinidad Pro Se
Movant(s):
WELLS FARGO BANK, N.A. Represented By Alexander K Lee Sean C Ferry Kevin A Harris
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
EH
Docket 18
- NONE LISTED -
Debtor(s):
Rhonda Lynn Hale Pro Se
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
Also #3 EH
Docket 7
- NONE LISTED -
Debtor(s):
Grace Nallely Ponce Pro Se
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
Also #2 EH
Docket 13
- NONE LISTED -
Debtor(s):
Grace Nallely Ponce Pro Se
Trustee(s):
Lynda T. Bui (TR) Pro Se
10:00 AM
EH
Docket 11
- NONE LISTED -
Debtor(s):
Luis Ramon Villarreal Garcia Represented By George P Hobson Jr
Joint Debtor(s):
Carina Garcia Represented By George P Hobson Jr
Trustee(s):
Larry D Simons (TR) Pro Se
10:00 AM
Also #6 EH
Docket 16
- NONE LISTED -
Debtor(s):
Eric Jabbar Norwood Represented By Marc A Duxbury
Joint Debtor(s):
Linda Lee Norwood Represented By Marc A Duxbury
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
Also #5 EH
Docket 18
- NONE LISTED -
Debtor(s):
Eric Jabbar Norwood Represented By Marc A Duxbury
Joint Debtor(s):
Linda Lee Norwood Represented By Marc A Duxbury
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
EH
Docket 11
- NONE LISTED -
Debtor(s):
Sandy Samboeun Nuon Represented By Dana Travis
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
EH
Docket 7
- NONE LISTED -
Debtor(s):
Fabian Rodriguez Pro Se
Joint Debtor(s):
America Rodriguez Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
10:00 AM
EH
Docket 9
- NONE LISTED -
Debtor(s):
Ricardo Chavez Pro Se
Trustee(s):
Robert Whitmore (TR) Pro Se
10:00 AM
EH
Docket 10
- NONE LISTED -
Debtor(s):
MARY RUTH STEPHENS Represented By Mark D Edelbrock
Trustee(s):
Arturo Cisneros (TR) Pro Se
10:00 AM
EH
Docket 9
- NONE LISTED -
Debtor(s):
Jason William Weller Pro Se
Joint Debtor(s):
Amy Lynn Weller Pro Se
Trustee(s):
John P Pringle (TR) Pro Se
11:00 AM
From: 11/29/17 EH
Docket 88
BACKGROUND
On October 26, 2009, Pamela Carmichael ("Debtor") filed a Chapter 13 voluntary petition. On January 13, 2010, Debtor’s Chapter 13 plan was confirmed. On April 23, 2010, the case was converted to Chapter 7. On August 16, 2010, Debtor received a discharge, and, three days later, the case was closed.
On March 21, 2016, the case was reopened to administer assets upon the motion of UST. Specifically, the asset to be administered was the proceeds from a class action judgment. After payment of all claims in Debtor’s case, there was a surplus of
$28,825.67 to be returned to Debtor. According to Debtor’s attorney, she received a check from Trustee in the amount of $28,825.67 on July 11, 2017. Debtor’s attorney states that she had "numerous conversations" with the class-action attorney and the trustee, and that, "[u]ltimately, it was determined that new checks needed to be issued. Specifically, Debtor’s attorney requests three checks: (1) $3,000 for Doling Shaw & Hanover, APC (of which $1,500 is for "work completed to assist the bankruptcy estate
11:00 AM
in distributing the surplus funds"); (2) $12,912.84 to George Charles Carmichael; and
$12,912.84 to Pamela Ehrlich. The Court notes that the total amount of the three checks is $28,825.68 – essentially the same amount as the originally issued check.
On November 7, 2017, the Trustee filed a notice of non-opposition.
DISCUSSION
The division of Debtor’s probate estate as between successors, and resolution of claims against the probate estate, are matters of probate law, not bankruptcy law. The Trustee’s responsibility, and this Court’s supervisory duty, is limited to assuring that the Trustee issues the surplus check to Debtor. The subsequent division of those funds does not appear to be a matter for the bankruptcy court, but is a matter for probate law. While it is unclear whether Court approval of fees is required, no such approval is requested here. Last, importantly, it does not appear the motion has been noticed to or served upon a representative of the probate estate or upon Debtor’s heirs.
APPEARANCES REQUIRED.
Debtor(s):
Pamela J. Carmichael Represented By Jenny L Doling
Movant(s):
Pamela J. Carmichael Represented By Jenny L Doling
Trustee(s):
Helen R. Frazer (TR) Pro Se
11:00 AM
Docket 45
12/13/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and Counsel for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the applications of the associated professionals, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 3,225 Trustee Expenses: $ 4.75
Attorney Fees: $ 10,300 Attorney Costs:$ 382.71
The approved attorney fees incorporate two reductions. First, there is a reduction in
$1,032.50 corresponding to the amount requested for an appearance at the hearing on December 13, 2017. Counsel is not permitted to be reimbursed for defending their requested fees, and the defense of their requested fees is the only reason why an appearance would be made at the hearing on December 13, 2017. Second, there is a reduction of $1,698.50 related to two time entries on March 1, 2017 for the drafting of a settlement motion. No settlement motion, however, was filed until May 2017, and there are future time entries documenting the time spent drafting the settlement motion. Because it is unclear what the March 1, 2017, time entries are for, or how those efforts could have been benefited the estate, and given that the attorney’s fees are noticeably higher than distributions to unsecured creditors, the Court will disallow these entries as unreasonable.
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Movant may decline to appear and submit on the tentative or appear to argue the tentative.
Debtor(s):
Rochelle A Lara Represented By Brian C Fenn
Trustee(s):
Karl T Anderson (TR) Represented By Robert A Hessling
11:00 AM
Docket 18
BACKGROUND
On August 4, 2017, Julio Negrete ("Debtor") filed a Chapter 7 voluntary petition. On October 18, 2017, the Court authorized a Rule 2004 examination of Debtor by Daniel’s Jewelers ("Creditor"). On November 7, 2017, Creditor filed a motion to extend the § 523 deadline for filing a non-dischargeability complaint and postpone discharge.
Creditor’s motion asserts that in September 2016 Debtor purchased a pair of Movado watches and certain earrings for a total of $3,445.15. Debtor made the purchase on credit and Creditor retained a security interest in the jewelry. Debtor did not, however, list the jewelry on his schedules, nor did he identify the jewelry as gifted or lost on his schedules.
Creditor states that at the Rule 2004 examination, Debtor stated he made the purchase for, and on behalf of, his cousin. Creditor states that Debtor did not provide any accurate information that would allow Creditor to contact Debtor’s cousin or verify Debtor’s account. Creditor requests a 45 day extension of the §§ 523 & 727 deadlines to allow Creditor to attempt to verify Debtor’s account of the location of the jewelry.
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DISCUSSION
Fed. R. Bankr. P. Rule 4007(c) states:
Except as otherwise provided in subdivision (d), a complaint to determine the dischargeability of a debt under § 523(c) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). The court shall give all creditors no less than 30 days’ notice of the time so fixed in the manner provided in Rule 2002. On motion of a party in interest, after hearing on notice, the court may for cause extend the time fixed under this subdivision. The motion shall be filed before the time has expired.
Here, Creditor timely filed a motion to extend the deadline. The Court finds that Creditor has established cause for an extension under Rule 4007(c). Specifically, Creditor has established that it moved promptly to determine the location and status of the jewelry identified in the background section above. Nevertheless, despite those efforts, Creditor has not provided adequate information that would enable Creditor to locate the jewelry in which it retains a security interest. Debtor’s lack of full cooperation in Creditor’s discovery efforts constitutes cause for a brief extension. See, e.g., In re McCormack, 244 B.R. 203, 208 (Bankr. D. Conn. 2000). Therefore, the Court finds that Creditor’s requested forty-five day extension is warranted.
Regarding Creditor’s additional request that Debtor’s discharge be postponed, the Court finds Creditor’s request lacks a proper legal basis. Fed. R. Bankr. P. Rule 4004
(c) provides a list of situations and events that will result in a delay of the granting of a discharge. Here, the fact that Debtor is contemplating the filing of a non- dischargeability complaint does not warrant the postponement of Debtor’s discharge. Bankruptcy courts routinely adjudicate non-dischargeability complaints after a discharge has been granted and, therefore, Creditor’s contention that an extension of the deadline to file a non-dischargeability complaint should naturally postpone the granting of a discharge, is unwarranted.
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TENTATIVE RULING
The Court is inclined to GRANT the motion IN PART, extending the deadline to file a non-dischargeability complaint until December 22, 2017. The Court is inclined to DENY the request to postpone discharge.
APPEARANCES REQUIRED.
Debtor(s):
Julio Cesar Suarez Negrete Represented By Keith Q Nguyen
Movant(s):
DANIELS JEWELERS Represented By Richard W Snyder
Trustee(s):
John P Pringle (TR) Pro Se
11:00 AM
From: 5/11/16, 6/8/16, 6/29/16, 8/31/16, 10/5/16, 11/9/16, 2/1/17, 5/3/17, 9/13/17
EH
Docket 322
05/11/2016
Based on the representations made to the Court by counsel for the Parties that negotiations are ongoing, and based on the consent of the Parties to a continuance, the Court shall CONTINUE the hearing on the Motion to June 8, 2016 at 11:00 a.m.
APPEARANCES ARE WAIVED.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Movant(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
Trustee(s):
Arturo Cisneros (TR) Represented By
11:00 AM
Chad V Haes
D Edward Hays Franklin R Fraley Jr
11:00 AM
EH
Docket 148
- NONE LISTED -
Debtor(s):
Dean L. Springer Sr. Pro Se
Joint Debtor(s):
Tami Jo Springer Pro Se
Movant(s):
Hilder & Associates Represented By
Lei Lei Wang Ekvall
Trustee(s):
Larry D Simons (TR) Represented By Richard A Marshack Sarah Cate Hays
D Edward Hays
11:00 AM
Docket 31
12/13/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the Court is inclined to APPROVE the following administrative expenses:
Trustee Fees: $ 1,400.74 Trustee Expenses: $ 123.27
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Flaviano Lopez Represented By Robert W Ripley
Joint Debtor(s):
Maria del Carmen Lopez Represented By Robert W Ripley
Trustee(s):
Todd A. Frealy (TR) Pro Se
11:00 AM
Adv#: 6:15-01241 Simons v. Precision Mechanical & Refrigeration Services, Inc
Docket 25
- NONE LISTED -
Debtor(s):
J. T. Site Development, Inc. Represented By Andrew S Bisom
Defendant(s):
Precision Mechanical & Pro Se
Movant(s):
Larry D Simons Represented By Frank X Ruggier Allan D Sarver
Plaintiff(s):
Larry D Simons Represented By Frank X Ruggier Allan D Sarver
Trustee(s):
Larry D Simons (TR) Represented By Frank X Ruggier
11:00 AM
EH
Docket 47
- NONE LISTED -
Debtor(s):
Monica Faye Wooley Represented By
Filemon Kevin Samson III
Trustee(s):
Helen R. Frazer (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16 EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:15-01303 Cisneros v. AMERICAN EXPRESS
A. Cisneros against AMERICAN EXPRESS. (Charge To Estate $350). For Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 1/13/16, 3/23/16, 5/25/16, 6/29/16, 8/31/16, 11/2/16, 2/1/17,
5/3/17 9/13/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
AMERICAN EXPRESS Represented By Robert S Lampl Chad V Haes
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01304 Cisneros v. Kajan Mather & Barish, a professional corporation
A. Cisneros against Kajan Mather & Barish, a professional corporation, MATHER KUWADA, a limited liability partnership, MATHER LAW CORPORATION, a California corporation, LAW OFFICE OF KENNETH M. BARISH, Steven R. Mather, Kenneth M. Barish. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)),(14 (Recovery of money/property - other))
From: 12/30/15, 1/13/16, 3/30/16, 4/6/16, 5/4/16, 5/25/16, 9/28/16, 11/2/16, 11/9/16, 12/14/16, 1/11/17, 5/17/17, 6/7/17, 6/28/17
EH
Docket 1
12/14/2016
The instant Status Conference is CONTINUED to January 11, 2017, at 2:00 p.m., to be heard in conjunction with Defendants' Motion for Summary Judgment
APPEARANCES WAIVED.
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
Kajan Mather & Barish, a Represented By
2:00 PM
Michael S Kogan
MATHER KUWADA, a limited Represented By
Michael S Kogan
MATHER LAW CORPORATION, Represented By
Michael S Kogan
Steven R. Mather Pro Se
Kenneth M. Barish Pro Se
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes Franklin R Fraley Jr Sue-Ann L Tran Jasmine W Wetherell
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:15-01308 Cisneros v. BWI CONSULTING, LLC et al
A. Cisneros against BWI CONSULTING, LLC, Black and White, Inc., BLACK AND WHITE BILLING COMPANY, BLACK AND WHITE INK, MEHRAN DEVELOPMENT CORPORATION. (Charge To Estate $350). for Avoidance, Recovery, and Preservation of Preferential and Fraudulent Transfers (with Adversary Proceeding Cover Sheet) Nature of Suit: (12 (Recovery of money/property - 547 preference)),(14 (Recovery of money/property - other))
From: 1/13/16, 3/23/16, 5/25/16, 7/27/16, 8/31/16, 11/2/16, 2/1/17, 5/3/17, 9/13/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Douglas J Roger, MD, Inc., A Represented By Summer M Shaw Michael S Kogan George Hanover
Defendant(s):
BWI CONSULTING, LLC Pro Se
Black and White, Inc. Pro Se
BLACK AND WHITE BILLING Pro Se
BLACK AND WHITE INK Pro Se
MEHRAN DEVELOPMENT Pro Se
2:00 PM
Plaintiff(s):
A. Cisneros Represented By
D Edward Hays Chad V Haes
Trustee(s):
Arturo Cisneros (TR) Represented By Chad V Haes
D Edward Hays Franklin R Fraley Jr
2:00 PM
Adv#: 6:17-01121 Smedman et al v. STATE BOARD OF EQUALIZATION
From: 8/30/17, 9/27/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Garrick Craig Smedman Represented By Neil C Evans
Defendant(s):
STATE BOARD OF Pro Se
Joint Debtor(s):
Veronica Lee Wilkins Represented By Neil C Evans
Plaintiff(s):
Craig Smedman Represented By Neil C Evans
Veronica Lee Wilkins Pro Se
2:00 PM
Trustee(s):
Arturo Cisneros (TR) Pro Se
2:00 PM
Adv#: 6:15-01206 Speier v. Simmons et al
EH
Docket 1
- NONE LISTED -
Debtor(s):
Hilary D Hill Represented By
Matthew D Resnik David Brian Lally
Defendant(s):
Angela Simmons Represented By David Brian Lally
David Schanhals Represented By David Brian Lally
Hilary D Hill Represented By
David Brian Lally
Plaintiff(s):
Steven M Speier Represented By Robert P Goe
Trustee(s):
Steven M Speier (TR) Represented By Robert P Goe
Elizabeth A LaRocque
2:00 PM
2:00 PM
Adv#: 6:17-01129 Hadra et al v. Mendez et al
- 523(a)(4), fraud as fiduciary, embezzlement, larceny, 68 - Dischargeability - 523(a)(6), willful and malicious injury
From: 9/13/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
William A. Mendez II Represented By Thomas J Polis
Defendant(s):
William A. Mendez Represented By Thomas J Polis
Shawna D Mendez Represented By Thomas J Polis
Joint Debtor(s):
Shawna D. Mendez Represented By Thomas J Polis
Plaintiff(s):
Andrew C. Hadra Represented By Peter W Lianides Alan Droste
2:00 PM
Vertical Partners LLC Represented By Peter W Lianides Alan Droste
Trustee(s):
Arturo Cisneros (TR) Represented By Todd A Frealy
11:00 AM
EH
Docket 44
On July 18, 2017 ("Petition Date"), Conchita Ang ("Debtor") filed her petition for chapter 13 relief. Rod Danielson was the duly appointed chapter 13 trustee ("Trustee"). On August 18, 2017, the Debtor filed a Motion for Turnover of Property
to Enforce the Automatic Stay; (II) for an Order to Show Cause (OSC); (III) to Compel Compliance with the Court Order; (IV) and for Sanctions (the "Turnover Motion") as to Wells Fargo Bank, N.A. ("Wells") based on its alleged wrongful foreclosure of the Debtor’s real property located at 2150 Horse Trail Drive in Redlands, CA (the "Property").
On August 31, 2017, a confirmation hearing was held as to the Debtor’s chapter 13 plan of reorganization. For the reasons stated on the record in open court, the Court dismissed the Debtor’s chapter 13 case with a 180 day bar ("Dismissal Order").
An initial hearing on the Turnover Motion was held on September 14, 2017, at which the Court indicated that although it appeared a violation of the automatic stay occurred, continuance was warranted based on the representation by Wells that it would seek annulment of the stay. The hearing on the Turnover was continued to October 26, 2017.
On September 22, 2017, Wells filed a motion for relief from the automatic stay (the "RFS Motion") as to the Property. A hearing on the RFS Motion was held on October 24, 2017, at which the Court’s oral ruling was to grant the RFS Motion, in
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part and deny it in part. On October 26, 2017, at the continued hearing on the Debtor’s Turnover Motion, the Court denied the Turnover Motion as moot based on its October 24, 2017, oral ruling granting Wells’s request for annulment. On November 6, 2017, the Court entered its order granting the RFS Motion (the "RFS Order"). On November 17, 2017, the Court entered its Order Denying Motion for Turnover of Property ("Turnover Order").
On November 16, 2017, the Debtor filed her "Motion with Notice to Reconsider The Material Facts and Order of the Hearing Held by Movant on October 24, 2017; For Sanctions on Respondents; To Reopen this Case and Allow Filing an Adversary Proceeding and Evidentiary Hearing to Disclose Fraud on the Court" (the "Motion"). Subsequently, the Court issued an order setting a hearing on the Debtor’s Motion for December 14, 2017.
On November 27, 2017, Wells timely filed opposition to the Motion ("Opposition"). Debtor filed no reply.
DISCUSSION
As a threshold matter, the Debtor makes various allegations regarding alleged misconduct and/or bias on the part of the Court. However, the Debtor provides no evidence to substantiate her allegations and as such, the Court disregards and otherwise strikes the Debtor’s allegations of judicial misconduct/bias.
MOTION TO REOPEN CASE
The Debtor seeks to reopen her case. However, the case has remained open due to various pending motions in the case since dismissal and, as of December 14, 2017, remains open. Thus, the Court’s tentative ruling is to DENY the Debtor’s request to reopen the case as moot.
Alternatively, to the extent that the Court construes the Motion as seeking an order vacating the dismissal rather than an order simply reopening the case, the Motion does not address the bases for dismissal of the Debtor’s chapter 13 case or why reconsideration of the Dismissal Order is warranted. As such, any request to
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vacate dismissal of the case is also DENIED and is not properly before the Court.
MOTION FOR SANCTIONS
The basis advanced for issuance of sanctions against Wells is the Debtor’s assertion that Wells failed to comply with an issued order to show cause. (Mot. at 5:4- 6, 7:3-6) However, as indicated in the above background section, the Debtor’s request for an order to show cause was encapsulated within her Turnover Motion. The Turnover Motion was denied on November 17, 2017, and in connection with that denial, no order to show cause ever issued as to Wells. Moreover, the Court notes that the Debtor made no appearance at the continued hearing on the Turnover Motion which took place on October 26, 2017. [FN.1]. Based on the foregoing, the Debtor’s instant request for sanctions based on alleged noncompliance is misplaced because the Debtor has failed to demonstrate that Wells failed to comply with any Court order.
FN.1: It appears that the Debtor misapprehended the Court’s tentative ruling for an actual order. The Court’s tentative ruling issued prior to the September 14, 2017, hearing had indicated that the Court was inclined to issue an order to show cause. However, a tentative ruling is "tentative" (i.e. "not fixed or certain") until and unless it is adopted by the Court as its final ruling and attached to the Court’s final order.
Alternatively, to the extent that the instant Motion can be construed as a renewed motion for sanctions against Wells based on allegations that Wells violated the automatic stay, such a request is not properly before the Court because the Court previously denied the Debtor’s request for an order to show cause in the Turnover Order. Thus, based on the prior denial, the Debtor must comply with LBR 9013-1(l) regarding "Motions Previously Denied", and has failed to do so. Alternatively, the Debtor could have sought reconsideration of the Court’s Turnover Order which the Debtor also has not done.
MOTION FOR RECONSIDERATION OF RELIEF FROM STAY ORDER
Civil Rule 60(b), made applicable through Federal Bankruptcy Rule 9024,
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provides that the bankruptcy court may relieve a party from an order for the following reasons:
mistake, inadvertence, surprise, or excusable neglect;
newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under [Civil] Rule 59(b);
fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
the judgment is void;
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 equitable; or
any other reason that justifies relief.
FRBP 60(b). Debtor’s Motion fails to indicate which enumerated basis for reconsideration underlies her Motion. However, the Court construes the Debtor’s Motion as falling within Rule 60(b)(3) based on the Debtor’s allegations that Wells has "perpetrated a fraud on this Court" and "misled the Court" (Mot. at 4:5-9) and that Wells’s foreclosure actions constitute a "total misrepresentation and fraud perpetrated on this Court" (Mot. at 6:1-2).
To prevail on a motion under Rule 60(b)(3), the moving party must prove by clear and convincing evidence that the [order] 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 Mach., Inc., 206 F.3d 874, 880 (9th Cir. 2000). Rule 60(b)(3) "is aimed at judgments which were unfairly obtained, not at those which are factually incorrect." Id.
Here, the crux of Debtor’s allegation of fraud is that Wells "persuaded and wrongfully influence[d] this Court to believe they are the real party in interest." As to the Debtor’s allegations of fraud generally, the Court agrees with the Opposition that
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the Debtor’s allegations of fraud are not pled with specificity as required under FRCP 9 and those allegations are thus insufficient to establish fraud to justify relief under Rule 60(b)(3). Separately, as to Wells’s standing (which the Debtor now contests), Exhibit 5 to the RFS Motion is a copy of the Trustee’s Deed Upon Sale which clearly identifies Wells Fargo Bank, N.A. as the successful purchaser at the foreclosure sale of the Property held on July 18, 2017. Notwithstanding the fact that the Debtor did not object to Wells’s standing in her opposition to the RFS Motion, the Court notes that the Trustee’s Deed Upon Sale conferred standing on Wells for purposes of the RFS Motion. In re Pak, 2011 WL 7145763 (9th Cir. BAP (Cal.) 2011) (A party seeking relief from the stay "need only establish that it has a colorable claim to enforce a right against property of the estate.". A showing by a party that it is a person entitled to enforce the note at issue or that it holds some ownership or other interest in the note translates to a colorable claim.).
REQUEST TO SET ASIDE THE FORECLOSURE SALE
Section V of the Motion seeks an order setting aside the foreclosure sale. However, when the Court granted Wells’s RFS Motion, it specifically granted the request for annulment of the stay to validate the postpetition actions of Wells in purchasing the Property and in recordation of the Trustee’s Deed Upon Sale. In re Fjeldsted, 293 B.R. 12, 21 (9th Cir. BAP 2003) (holding that the bankruptcy court's authority to make exceptions to the general operation of the stay includes authority to annul the stay thereby providing retroactive relief, which, if granted, moots any issue as to whether the violating sale was void because, then, there would have been no actionable stay violation.).
TENTATIVE RULING
Based on the foregoing, the Court is inclined to DENY the Motion in its entirety.
APPEARANCES REQUIRED.
Debtor(s):
Conchita C Ang Represented By Richard W Snyder
11:00 AM
Movant(s):
Conchita C Ang Represented By Richard W Snyder
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 94
- NONE LISTED -
Debtor(s):
Gary Lee Powell Represented By Alfred J Verdi
Joint Debtor(s):
Veronica Ellen Powell Represented By Alfred J Verdi
Movant(s):
Gary Lee Powell Represented By Alfred J Verdi
Veronica Ellen Powell Represented By Alfred J Verdi
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 123
On May 8, 2012, John and Nancy Elbers (collectively, "Debtors") filed their petition for chapter 13 relief. Amrane Cohen is the duly appointed chapter 13 trustee ("Trustee"). At the inception of the case, the Debtors were represented by Samuel Kelsall ("Kelsall"). On behalf of the Debtors, Kelsall filed the petition and took various actions in the case on behalf of the Debtors, including prosecution of a motion to avoid lien through an evidentiary hearing. The Trustee’s records indicate that Kelsall incurred and received $12,000 in total for his bankruptcy services on behalf of the Debtors.
On November 14, 2017, the Debtors filed a Motion For Sanctions/Disgorgement of Attorneys' Fees re Samuel Kelsall (the "Motion"). The Motion asserts that:
Kelsall received $1,460 from Hyatt Legal Plans ("Hyatt") on behalf of the Debtors, and that check is dated August 17, 2012 (the "Hyatt Payment");
Kelsall received an additional $40 from Hyatt which Kelsall asserts was for a consultation;
Kelsall filed a Disclosure of Compensation of Attorney for Debtor on May 8, 2012;
Kelsall did not file a supplement to his disclosed compensation at any time during the pendency of the case; and
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At a hearing on August 17, 2012, on a Trustee’s Motion to Dismiss, the Debtors represented to the Trustee that Kelsall had received an additional
$1,500 from Hyatt which Kelsall had failed to disclose.
Based on the alleged nondisclosure by Kelsall of the Hyatt Payment, the
Trustee seeks an order requiring him to disgorge $13,500 (or the total amount paid by the Debtors for the bankruptcy-related services). The requested disgorgement is sought under FRBP 2016(b) which requires disclosure of compensation and supplemental statements regarding amounts paid but not previously disclosed.
On December 5, 2017, Kelsall filed opposition to the Motion ("Opposition"). As regards the merits of the Motion, Kelsall asserts that the Trustee’s evidence of the Hyatt Payment is deficient in that the records produced by Hyatt are not accompanied by a record or other documentation indicating which case the payment was made on (i.e. does not identify the Debtors or their case). Kelsall further argues that the numbers do not add up. In support, he asserts that the fee for a couples’ bankruptcy filing would be a total of $1,500, not including the additional $40 for the consultation. Thus, the check for $1,460 plus the $40 consultation fee cannot have been for payment towards the Debtors’ case because the actual amount owed by Hyatt on behalf of the Debtors would have been $1,500 plus $40.
In reply to Kelsall, the Trustee notes that Kelsall has indicated he cannot identify on whose behalf the Hyatt Payment was made. The Trustee argues that Kelsall’s response further compounds the problems identified in the Motion because it demonstrates Kelsall’s failure to properly account for funds received by his firm on behalf of his clients as required by the California Rules of Professional Conduct.
DISCUSSION
There is no legal dispute regarding the applicability of FRBP 2016. Instead, the instant matter is solely a factual dispute regarding whether or not Kelsall received the Hyatt Payment on behalf of the Debtors which would have triggered his duty to disclose compensation. Kelsall disputes that he received funds from Hyatt on behalf of the Debtors. Although Kelsall is correct that the check proffered by the Trustee does not identify the Debtors on the check, he does not provide evidence to indicate
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that the check was definitively received by his office on behalf of other clients. Moreover, the evidence indicates that the check was issued in 2012. Thus, several years have lapsed in the interim and the Trustee correctly points out that during that time it was Kelsall’s duty to properly account for the Hyatt Payment. Finally, the letter from Hyatt dated April 26, 2017 provides evidence the funds were paid to Kelsall (and Kelsall has failed to object to this evidence). As such, Kelsall failed in his duty to disclose all compensation received.
TENTATIVE RULING
Based on the foregoing, the Court is inclined GRANT the Motion and order disgorgement.
APPEARANCES REQUIRED.
Debtor(s):
John Raymond Elbers Pro Se
Joint Debtor(s):
Nancy Ann Elbers Pro Se
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Also #3 EH
Docket 118
As a threshold matter, the Court incorporates and takes judicial notice of the pleadings filed in connection with Docket No. 123, the Trustee’s Motion for Disgorgement, and of the factual allegations made therein as they may regard the instant matter.
On September 26, 2017, the Trustee filed his Notice of Intent to File Trustee’s Final Report and Account (the "Notice"). On October 25, 2017, the Debtors filed their objection to the Notice ("Objection"). The Debtors’ objection specifically argues that
Kelsall’s fees received in the case exceeded reasonable and customary fees and should not have been awarded, (2) Debtors did not receive service by mail (purportedly of the Fee Applications) filed by Kelsall and therefore did not have an opportunity to object, and (3) that Kelsall failed to disclose the $1,500 received from Hyatt on behalf of the Debtors. Based on these allegations, the Debtors seek disgorgement.
DISCUSSION
As a threshold matter, the Debtors’ Objection is not properly before the Court because the Debtors are seeking affirmative relief from Mr. Kelsall in an objection to the Trustee’s Notice of Intent to File his Final Report. However, given that Mr.
Kelsall filed a response and that the Debtors are in pro per, the Court will briefly
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address the arguments made.
The mailbox rule provides that the proper and timely mailing of a document raises a rebuttable presumption that the document has been received by the addressee in the usual time. It is a settled feature of the federal common law. Hagner v. United States, 285 U.S. 427, 430, 52 S.Ct. 417, 76 L.Ed. 861 (1932); Rosenthal v. Walker,
111 U.S. 185, 193, 4 S.Ct. 382, 28 L.Ed. 395 (1884); Lewis v. United States, 144 F.3d
1220, 1222 (9th Cir.1998).
Because the common law mailbox rule operates as a rebuttable presumption, the factfinder must determine whether Mr. Kelsall has presented sufficient evidence of mailing to invoke the presumption of receipt and, if so, whether the Debtors have presented sufficient evidence of non-receipt to rebut the presumption. Schikore v.
BankAmerica Supplemental Ret. Plan, 269 F.3d 956, 963 (9th Cir. 2001).
Here, Mr. Kelsall has provided Ex. 10, the Application for Supplemental Fees, Ex. 12, the Notice of Hearing on Application for Payment of Interim or Final Fees, both with corresponding proofs of service. Both documents are signed under penalty of perjury and contain attached mailing lists which indicate that the Debtors were served at their residence. In contrast, the Debtors have provided no evidence to controvert the proofs of service. As such, the Court must find that the Debtors have failed to rebut Mr. Kelsall’s evidence of mailing and therefore that the Debtors are presumed to have received Mr. Kelsall’s applications for fees.
Next, having found that the Debtors received proper notice and service of Mr.
Kelsall’s fee applications, the Debtors cannot now object to Mr. Kelsall’s fees. The time to object to the reasonableness of fees was when they received notice of the applications. As such, the Court need not address whether Mr. Kelsall’s fees were reasonable.
Finally, the Debtors have raised the issue of Mr. Kelsall’s nondisclosure of the
$1,500 in payments from Hyatt. This matter is being concurrently addressed by the
12:30 PM
Trustee’s Motion for Disgorgement. As such, there is no need to address the matter further on this Objection.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to OVERRULE the Debtor’s Objection as not properly brought before the Court, and as an alternate grounds, on the merits for the reasons stated herein.
APPEARANCES REQUIRED.
Debtor(s):
John Raymond Elbers Pro Se
Joint Debtor(s):
Nancy Ann Elbers Pro Se
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
From: 11/9/17 Also #6
EH
Docket 76
11/09/2017
Background:
On November 30, 2012 ("Petition Date"), Jacquelyn Anna Palmer ("Debtor") filed for chapter 13 relief. Amrane Cohen is the duly appointed chapter 13 trustee ("Trustee"). On September 27, 2017, Debtor filed her Objection to Claims # 7-1 of Tidewater Finance Company ("Claimant").
Service was proper and no opposition or response has been filed.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing
12:30 PM
upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." United States v. Offord Fin., Inc., (In re Medina), 205 B.R. 216,222 (9th Cir. BAP 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Ashford v.
Consol. Pioneer Mort. (In re Consol. Pioneer Mort.), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant.
Lundell, 223 F.3d at 1039; Holm, 931 F.2d at 623.
Analysis:
The Debtor objects only to the "secured" portion of Claim No. 7-1.
Specifically, the Debtor asserts, without legal citation or authority, that because she "gave her furniture to a co-worker who had lost everything in a fire" and is "no longer in possession of the furniture" the secured amount should be disallowed.
Tentative Ruling
Having failed to provide legal authority for the proposition that the gifting of property subject to a security interest suffices to extinguish such lien, the tentative ruling is that the Objection be OVERRULED.
APPEARANCES REQUIRED.
12:30 PM
Debtor(s):
Jacquelyn Anna Palmer Represented By Steven A Alpert
Movant(s):
Jacquelyn Anna Palmer Represented By Steven A Alpert
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
EH
Docket 79
- NONE LISTED -
Debtor(s):
Jacquelyn Anna Palmer Represented By Steven A Alpert
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:30 PM
Also #8 EH
Docket 66
- NONE LISTED -
Debtor(s):
Victor M. Menez Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Marilee J. Menez Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Movant(s):
Victor M. Menez Represented By
Dale Parham - INACTIVE - Dale Parham - INACTIVE - Michael Smith
Michael Smith Sundee M Teeple Sundee M Teeple
Marilee J. Menez Represented By
12:30 PM
Trustee(s):
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Amrane (RS) Cohen (TR) Pro Se
12:30 PM
From: 11/9/17 Also #7
EH
Docket 62
- NONE LISTED -
Debtor(s):
Victor M. Menez Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Marilee J. Menez Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
From: 5/11/17, 7/20/17, 7/27/17, 10/19/17
EH
Docket 57
- NONE LISTED -
Debtor(s):
James W Smith Sr. Represented By Jenny L Doling
Joint Debtor(s):
Cynthia Smith Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
EH
Docket 116
- NONE LISTED -
Debtor(s):
Donald Vinson Frantz Represented By Jenny L Doling
Joint Debtor(s):
Donna Peck Frantz Represented By Jenny L Doling
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
From: 9/14/17, 11/9/17 EH
Docket 154
- NONE LISTED -
Debtor(s):
Michael L Anderson Represented By Javier H Castillo
Movant(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
12:31 PM
Docket 104
- NONE LISTED -
Debtor(s):
Mark A Rowley Represented By Tate C Casey
Joint Debtor(s):
Catherine C Rowley Represented By Tate C Casey
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
From: 10/19/17 EH
Docket 67
- NONE LISTED -
Debtor(s):
Michael Wayne Branning Represented By Jenny L Doling
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
Docket 45
- NONE LISTED -
Debtor(s):
James A. Omoto Represented By Carey C Pickford
Joint Debtor(s):
Margarita Omoto Represented By Carey C Pickford
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:31 PM
EH
Docket 76
- NONE LISTED -
Debtor(s):
Sean Paul Crandell Represented By Arnold H Wuhrman
Joint Debtor(s):
Gina Rosario Crandell Represented By Arnold H Wuhrman
Trustee(s):
Amrane (RS) Cohen (TR) Pro Se
12:32 PM
Docket 75
12/14/17
On Trustee's recommendation, the Motion to Vacate Dismissal is granted on the conditions set forth in the Trustee's Comments requiring certification by Debtors' attorney that he is holding the total amount of funds necessary to bring the plan current.
Debtor(s):
David R. Roberts Represented By Javier H Castillo
Joint Debtor(s):
Crystal A Roberts Represented By Javier H Castillo
Movant(s):
David R. Roberts Represented By Javier H Castillo
Crystal A Roberts Represented By Javier H Castillo
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
EH
Docket 46
12/14/17
Per the consent of the parties, which was informally provided to the Court via electronic mail, the hearing on the Objection to Claim is CONTINUED to 12/21/17 at 12:30 p.m.
APPEARANCES WAIVED.
Debtor(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Movant(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Julie Lynn Salazar Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Also #17 EH
Docket 0
- NONE LISTED -
Debtor(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ramon Gabriel Alvarez Represented By Devin Sawdayi
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Jorge Manuel Azmitia Represented By Nicholas M Wajda
Joint Debtor(s):
Yoshiko Azmitia Represented By Nicholas M Wajda
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Gregorio Orozco Sotelo Represented By
Lisa F Collins-Williams
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Daniel Robert Shapiro Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Martha Mata Represented By
Inez Tinoco-Vaca
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Rafeek Nehman Hamada Represented By
Eric Bensamochan
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jon Peter Rutherig Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Martin Warren Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Juan Hernandez Represented By Rebecca Tomilowitz
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Dane Harmon Represented By Timothy S Huyck
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Brian Anthony Paciorkowski Represented By Kristin R Lamar
Joint Debtor(s):
Donna Ann Paciorkowski Represented By Kristin R Lamar
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ernesto Sanchez Represented By Jerry Rulsky
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Antonio Silveria Lourenco Represented By Neil R Hedtke
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Samuel Siggson Represented By Terrence Fantauzzi
Joint Debtor(s):
Kellie Jonay Siggson Represented By Terrence Fantauzzi
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Deborah Cuellar Represented By Natalie A Alvarado
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Kenneth Collier Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Also #36 EH
Docket 0
- NONE LISTED -
Debtor(s):
Arnel L Ganzon Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
MOVANT: ARNEL L. GANZON
Also #35 EH
Docket 11
- NONE LISTED -
Debtor(s):
Arnel L Ganzon Pro Se
Movant(s):
Arnel L Ganzon Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Anthony J McPike Represented By Dana Travis
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Carolyn Maxine Bodden Represented By Edward G Topolski
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jennifer Marie Silva Represented By Raymond Perez
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sandra Lorena Parra Represented By Christopher Hewitt
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jacqueline Hurtado Represented By Rhonda Walker
Trustee(s):
Rod Danielson (TR) Pro Se
12:32 PM
Docket 0
- NONE LISTED -
Debtor(s):
Sheryl Welsh Represented By
Hayk Grigoryan
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 55
- NONE LISTED -
Debtor(s):
Maria Aguilar Represented By Abel H Fernandez
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 41
- NONE LISTED -
Debtor(s):
Charles R Campbell II Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Joint Debtor(s):
Ruth Urie-Campbell Represented By
Dale Parham - INACTIVE - Michael Smith
Sundee M Teeple
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 117
- NONE LISTED -
Debtor(s):
Juana Judith Mejia Represented By Javier H Castillo
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 197
- NONE LISTED -
Debtor(s):
Mildred Goodridge Crawford Represented By Michael Smith Craig K Streed Sundee M Teeple
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 69
- NONE LISTED -
Debtor(s):
Donnita M. Oliver Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 74
- NONE LISTED -
Debtor(s):
Delfina Ramos Hernandez Represented By Edward G Topolski
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 67
- NONE LISTED -
Debtor(s):
Thomas Rodriguez Alcala Represented By Halli B Heston
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 245
- NONE LISTED -
Debtor(s):
Jose N Recinos Represented By Michael Smith Sundee M Teeple
Joint Debtor(s):
Patricia Recinos Represented By Michael Smith Sundee M Teeple
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 98
- NONE LISTED -
Debtor(s):
Bryan K. Harrison Represented By April E Roberts
Joint Debtor(s):
Dawn Harrison Represented By April E Roberts
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 95
- NONE LISTED -
Debtor(s):
Jose Luis Ceballos Represented By David Lozano
Joint Debtor(s):
Edelmira Castro Represented By David Lozano
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 40
- NONE LISTED -
Debtor(s):
Fabiola Puttre Represented By Paul Y Lee
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 35
- NONE LISTED -
Debtor(s):
Ana M. Oliver Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Also #54 EH
Docket 24
- NONE LISTED -
Debtor(s):
Ana M. Oliver Represented By Michael Smith Sundee M Teeple Craig K Streed
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 32
- NONE LISTED -
Debtor(s):
Alexis I Barahona Represented By Christopher J Langley
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 103
- NONE LISTED -
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 26
- NONE LISTED -
Debtor(s):
Gabriel Cruz Represented By
Christopher J Langley
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 45
- NONE LISTED -
Debtor(s):
Miriam Louise Preisendanz Represented By Danny K Agai
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 28
- NONE LISTED -
Debtor(s):
William Fuentes Represented By Marlin Branstetter
Joint Debtor(s):
Martha C Orozco de Fuentes Represented By Marlin Branstetter
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 26
- NONE LISTED -
Debtor(s):
Bruce Howard Ruggles Represented By John F Brady
Joint Debtor(s):
Ann Marie Ruggles Represented By John F Brady
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 44
- NONE LISTED -
Debtor(s):
Frank Castodio Represented By Lauren Rode
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 32
- NONE LISTED -
Debtor(s):
Katina Deneen Edwards Represented By Paul Y Lee
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 45
- NONE LISTED -
Debtor(s):
Kaleo Mehia Roque Leopoldo Represented By Nicholas M Wajda
Joint Debtor(s):
Andrea Ann Leopoldo Represented By Nicholas M Wajda
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 26
- NONE LISTED -
Debtor(s):
Lawrence D Leavingston Sr. Represented By Gilbert A Diaz
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
EH
Docket 36
- NONE LISTED -
Debtor(s):
Gwendolyn Washington Represented By Julie J Villalobos
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 34
- NONE LISTED -
Debtor(s):
Susan E Duynstee Represented By Paul Y Lee
Trustee(s):
Rod Danielson (TR) Pro Se
12:33 PM
Docket 24
- NONE LISTED -
Debtor(s):
Nadia M. Lipscomb Represented By
James D. Hornbuckle
Trustee(s):
Rod Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK N.A.
From: 12/5/17 EH
Docket 32
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2 and 3. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Irma Hernandez Represented By David T Egli
Movant(s):
U.S. Bank N.A., as trustee, on behalf Represented By
Daniel K Fujimoto Caren J Castle
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: TOYOTA MOTOR CREDIT CORPORATION
EH
Docket 30
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). DENY request for relief from the automatic under § 362(d)(2) because the Court does not have evidence that the vehicle is not necessary for an effective reorganization. DENY relief from § 1301(a) stay for failure to serve co-debtor.
GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Rizal Ligayo Represented By
Paul Y Lee
Movant(s):
Toyota Motor Credit Corporation, Represented By
Austin P Nagel
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: U.S. BANK NATIONAL ASSOCIATION
EH
Docket 46
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 12.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Mary Tejuoso Chapin Represented By
David A Akintimoye
Movant(s):
U.S. Bank National Association, as Represented By
Nancy L Lee
Trustee(s):
Howard B Grobstein (TR) Pro Se
10:00 AM
Sedan 4D E350
MOVANT: EXETER FINANCE LLC
EH
Docket 42
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (d)(2). GRANT relief from § 1301(a) co-debtor stay. GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Gwendolyn Washington Represented By Julie J Villalobos
Movant(s):
Exeter Finance LLC Represented By Bret D. Allen
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK N.A.
EH
Docket 34
Service is Proper Opposition: Yes
Movant to confirm cure, and parties to discuss adequate protection. APPEARANCES REQUIRED.
Debtor(s):
Elizabeth Jucaban Tuason Represented By Brad Weil
Movant(s):
Wells Fargo Bank, N.A. Represented By Darlene C Vigil
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK NA
EH
Docket 9
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 12.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Pedro Montes Represented By
James Geoffrey Beirne
Joint Debtor(s):
Bertha Alicia Montes Represented By
James Geoffrey Beirne
Movant(s):
Wells Fargo Bank, N.A. Represented By Austin P Nagel
10:00 AM
Trustee(s):
Todd A. Frealy (TR) Pro Se
10:00 AM
MOVANT: SYSTEMS & SERVICES TECHNOLOGIES, INC.
EH
Docket 22
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Eric Jabbar Norwood Represented By Marc A Duxbury
Joint Debtor(s):
Linda Lee Norwood Represented By Marc A Duxbury
Movant(s):
Systems & Services Technologies, Represented By
Austin P Nagel
10:00 AM
Trustee(s):
Steven M Speier (TR) Pro Se
10:00 AM
MOVANT: DRIVE TIME CARSALES COMPANY LLC
EH
Docket 19
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). DENY request for relief from the automatic stay under § 362(d)(2) because the Court has not been provided with any evidence that this vehicle is not necessary to an effective reorganization. GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY request under ¶ 3 for lack of cause shown.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Thomas Lee Abercrombie Represented By
Rabin J Pournazarian
Joint Debtor(s):
Rebecca Anne Abercrombie Represented By
Rabin J Pournazarian
10:00 AM
Movant(s):
DriveTime Carsales Company LLC Represented By
Caren J Castle
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: THE BANK OF NEW YORK MELLON
EH
Docket 14
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT requests under ¶¶ 2, 3, and 12. DENY alternative request under ¶ 13 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Michael Allen Cushman Represented By Brian J Soo-Hoo
Movant(s):
THE BANK OF NEW YORK Represented By Angie M Marth
Trustee(s):
John P Pringle (TR) Pro Se
10:00 AM
MOVANT: TD AUTO FINANCE LLC
EH
Docket 17
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Martha Mata Represented By
Inez Tinoco-Vaca
Movant(s):
TD Auto Finance LLC Represented By Sheryl K Ith
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: WELLS FARGO BANK
EH
Docket 9
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶¶ 2. DENY alternative request under ¶ 11 as moot.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Marisela Hernandez Represented By Brian J Soo-Hoo
Movant(s):
Wells Fargo Bank, N.A. dba Wells Represented By
Sheryl K Ith
Trustee(s):
Charles W Daff (TR) Pro Se
10:00 AM
MOVANT: ALLY FINANCIAL INC.
CASE DISMISSED: 12/13/17
EH
Docket 16
- NONE LISTED -
Debtor(s):
Dane Harmon Represented By Timothy S Huyck
Movant(s):
Ally Financial Inc. Represented By Adam N Barasch
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CORPORATE AMERICA FAMILY CREDIT UNION
EH
Docket 16
Service is Proper Opposition: None
The Court is inclined to GRANT relief from the automatic stay pursuant to 11 U.S.C.
§ 362(d)(1) and (2). GRANT waiver of 4001(a)(3) stay. GRANT request under ¶ 2.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Brian Anthony Paciorkowski Represented By Kristin R Lamar
Joint Debtor(s):
Donna Ann Paciorkowski Represented By Kristin R Lamar
Movant(s):
Corporate America Family Credit Represented By
Scott S Weltman
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: LARRY G HANNAH AND SUSAN H. HANNAH
EH
Docket 13
Service: Proper Opposition: None
The Court having reviewed the motion, and Debtor having presented clear and convincing evidence sufficient to rebut the presumption that the case was not filed in good faith, the Court is inclined to GRANT the motion, IMPOSING the automatic stay as to all creditors.
APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.
Debtor(s):
Larry Gene Hannah Represented By Todd L Turoci
Joint Debtor(s):
Susan Harris Hannah Represented By Todd L Turoci
10:00 AM
Movant(s):
Larry Gene Hannah Represented By Todd L Turoci
Susan Harris Hannah Represented By Todd L Turoci
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: ALEJANDRO SALINAS JR.
EH
Docket 12
Service: Improper Opposition: None
The Court has reviewed the motion and notes that service is improper. Specifically, creditors, including the main secured creditor, were served at PO boxes, instead of pursuant to FRBP 7004. Therefore, the Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Movant(s):
Alejandro Salinas Jr. Represented By Nicholas M Wajda
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: CARRINGTON MORTGAGE SERVICES LLC
EH
Docket 15
Service: Improper Opposition: None
First, the Court notes that notice of the motion was improper. The Court’s self- calendaring procedures allow a motion to continue the automatic stay to be set on shortened notice only if fourteen days notice is provided to creditors. Here, however, Debtor did not provide fourteen days notice. Additionally, pursuant to § 362(c)(3)(C) (i)(II)(cc) this case was presumptively filed in bad faith as to all creditors, and Debtor has not provided clear and convincing evidence to the contrary. Specifically, Debtor’s previous Chapter 13 case was dismisses less than one year into the plan for failure to make plan payments, and Debtor has not provided any evidence that she is currently in a better financial situation. Therefore, the Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Barbara Rammell Represented By Carey C Pickford
10:00 AM
Movant(s):
Barbara Rammell Represented By Carey C Pickford Carey C Pickford Carey C Pickford
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: KATRINA RENEE MCDOWELL
EH
Docket 12
Service: Proper Opposition: None
The Court is inclined to DENY the motion. The Court notes that pursuant to § 362(c) (3)(C)(i)(II)(cc) this case was presumptively filed in bad faith as to all creditors, and Debtor has not provided clear and convincing evidence to the contrary. Specifically, Debtor’s previous Chapter 13 case was dismisses approximately one year into the plan for failure to make plan payments. Debtor has generally averred that her income has increased and that she is capable of making plan payments, and that her income will increase once she passes the state bar examination. Such a general assertion, however, fails to satisfy the "clear and convincing" standard of § 362(c)(3)(C).
APPEARANCES REQUIRED.
Debtor(s):
Katrina Renee McDowell Represented By Jenny L Doling
Movant(s):
Katrina Renee McDowell Represented By Jenny L Doling
10:00 AM
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
10:00 AM
MOVANT: SIMON E WILLIAMS
EH
Docket 4
Service: Proper Opposition: None
The Court is inclined to DENY the motion. First, notice to the law firm that represented the secured creditor (the primary party at whom the motion is directed) does not include the handling lawyers’ names. As such notice is problematic as it will be delayed getting into the proper hands. Second, the prior case was not dismissed because of an ordinary payment default, as the motion implies, but because of failure to turn over tax refunds. Third, Debtor does not need the stay to seek a loan modification. Last, any equity in the Debtor’s residence will be recovered, on sale by the Trustee (not the Debtor) for the benefit of the estate, and the Trustee has not joined this request. Thus, Debtor has failed to rebut the presumption of lack of good faith as to U.S. Bank pursuant to § 362(c)(3)(C)(ii).
APPEARANCES REQUIRED.
Debtor(s):
Simon E. Williams Represented By Jenny L Doling
10:00 AM
Movant(s):
Simon E. Williams Represented By Jenny L Doling Jenny L Doling
Trustee(s):
Karl T Anderson (TR) Pro Se
11:00 AM
#19.00 CONT OSC re Order To Docket Information In Support Of Bodily Detention Request Under Seal; And order Issuing Bodily Detention Request for Marla Perez
From: 8/24/17, 9/14/17
EH
Docket 68
- NONE LISTED -
Debtor(s):
Denise Barrow Pro Se
Trustee(s):
Howard B Grobstein (TR) Pro Se
2:00 PM
Also #21 EH
Docket 306
- NONE LISTED -
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
Fredman Lieberman Pearl LLP Represented By Alan W Forsley
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
2:00 PM
Also #20 EH
Docket 303
10/31/2017
The hearing on the Motion is continued to November 28, 2017, at 2:00 p.m. as a holding date.
APPEARANCES WAIVED.
Debtor(s):
Allied Injury Management, Inc. Represented By Alan W Forsley
Movant(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn Steven Werth
Trustee(s):
David M Goodrich (TR) Represented By Mark S Horoupian Jason Balitzer Victor A Sahn
2:00 PM
Steven Werth
2:00 PM
EH
Docket 42
BACKGROUND
On December 1, 2017, Auto Strap Transport, LLC ("Debtor") filed a Chapter 11 voluntary petition. On the same day, Debtor filed a motion to use cash collateral and an application for a hearing on shortened notice. The Court held a hearing on Debtor’s motion to use cash collateral on December 6, 2017, and, on December 14, 2017, the Court entered an order granting Debtor’s motion on an interim basis. A continued hearing on Debtor’s motion to use cash collateral is currently set for January 9, 2018.
Pursuant to the Court’s instructions at the hearing on December 6, 2016, Debtor filed a stipulation regarding use of cash collateral and adequate protection between Debtor and Nations Fund I ("Creditor") on December 11, 2017. The deadline for opposition was December 15, 2017, and no timely opposition was received.
According to the stipulation, Creditor has a perfected security interest in all of Debtor’s assets, securing a debt of $9,930,645.47. The stipulation provides that Debtor make adequate protection payments to Creditor in the amount of $65,000 twice a month. Furthermore, Debtor has agreed to provide Creditor with replacement
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liens.
DISCUSSION
A. Cash Collateral
11 U.S.C. § 363(c)(1)-(2) (2010) states:
(c)(1) If the business of the debtor is authorized to be operated under section 721, 1108, 1203, 1204, or 1304 of this title and unless the court orders otherwise, the trustee may enter into transactions, including the sale or lease of property of the estate, in the ordinary course of business, without notice or a hearing, and may use property of the estate in the ordinary course of business without notice or a hearing.
The trustee may not use, sell, or lease cash collateral under paragraph (1) of this subsection unless-
each entity that has an interest in such cash collateral consents; or
the court, after notice and a hearing, authorizes such use, sale, or lease in accordance with the provisions of this section.
11 U.S.C. § 363(a) defines cash collateral as:
cash, negotiable instruments, documents of title, securities, deposit accounts, or other cash equivalents whenever acquired in which the estate and an entity other than the estate have an interest and includes the proceeds, products,
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offspring, rents, or profits of property and the fees, charges, accounts or other payments for the use or occupancy of rooms and other public facilities in hotels, motels, or other lodging properties subject to a security interest as provided in section 552(b) of this title, whether existing before or after the commencement of a case under this title.
Here, as evidenced by the stipulation presented to the Court, Creditor has consented to the use of its cash collateral. Because Creditor is a party to the stipulation, the Court declines to analyze whether Creditor is adequately protected under the standard of 11
U.S.C. § 361.
The Court notes that the stipulation between Debtor and Creditor does not waive, modify, or alter the rights of any other secured creditor. To the extent any other secured creditor has an interest in cash collateral, Debtor must secure the consent of such entity, or authorization from the Court, before using the applicable cash collateral.
TENTATIVE RULING
The Court is inclined to APPROVE the stipulation between Auto Strap Transport, LLC and Nations Fund I, LLC.
APPEARANCES REQUIRED.
Debtor(s):
Auto Strap Transport, LLC Represented By Todd L Turoci
2:00 PM
Movant(s):
Auto Strap Transport, LLC Represented By Todd L Turoci
11:00 AM
Docket 43
12/20/2017
No opposition has been filed. Service was Proper.
The applications for compensation of the Trustee and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the Applications of the associated professionals, the following administrative claims will be allowed:
Trustee Fees: | $ 2,250 |
Trustee Expenses: | $ 65.12 |
Accountant Fees: | $1,685.50 |
Accountant Costs: | $112.65 |
The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Dianne D. Reese Represented By Donald S Edgar
Trustee(s):
Helen R. Frazer (TR) Pro Se
11:00 AM
11:00 AM
Docket 37
12/20/2017
No opposition has been filed. Service was Proper.
The application for compensation of the Trustee has been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report, the following administrative claims will be allowed:
Trustee Fees: $ 2,596.30 Trustee Expenses: $ 33.81
The TFR is approved and the trustee may submit on the tentative.
APPEARANCES WAIVED. If written or oral opposition is presented at the hearing, the hearing may be continued. Trustee to lodge order within 7 days.
Debtor(s):
Robert M. Rubalcaba Represented By Lazaro E Fernandez
Joint Debtor(s):
Brasenia Rubalcaba Represented By David L Nelson
Lazaro E Fernandez
11:00 AM
Trustee(s):
Steven M Speier (TR) Pro Se
11:00 AM
Docket 194
12/20/17
The applications for compensation of the Trustee, Counsel for the Trustee, Accountant for the Trustee, and Special Counsel have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the Applications of the associated professionals, the following administrative claims will be allowed:
Trustee Fees: $ 44,188.13 Trustee Expenses: $ 1,729.67
Goe & Forsythe Fees: $107,961 (per Stip with UST) + $13,219 Holdback from First Fee Application
Attorney Costs: | $6,099 |
Accountant Fees: | $20,506 |
Accountant Costs: | $519.40 |
Special Counsel Fees: $43,166.50 Special Counsel Costs:$2,410.02
The applications for compensation are approved and the trustee and associated professionals may submit on the tentative.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
HN Engineering, Inc. Represented By
11:00 AM
Trustee(s):
Martha A Warriner
Todd A. Frealy (TR) Represented By Robert P Goe Rew R Goodenow
11:00 AM
Docket 56
12/20/17
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. As to the Attorney fees, the extent of work regarding the § 724 issue appears excessive, given the record provided in the Application, and the work regarding preparation of the settlement motion and agreement also appears excessive given the lack of complexity of the issues. As such the Court finds that a further reduction of
$2,000 is appropriate. Pursuant to the Trustee's Final Report and the Applications of the associated professionals, the following administrative claims will be allowed:
Trustee Fees: | $ 3,150 |
Trustee Expenses: | $ 26.91 |
Attorney Fees: | $9,202.50 |
Attorney Costs: | $410.04 |
Accountant Fees: | $2,492.50 |
Accountant Costs: | $359.32 |
The applications for compensation are approved and the trustee and associated professionals may submit on the tentative or may appear and argue the tentative.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Steven A. Smelser Represented By Timothy S Huyck
11:00 AM
Trustee(s):
Lynda T. Bui (TR) Represented By Leonard M Shulman Brandon J Iskander
11:00 AM
EH
Docket 132
12/20/17
Although the lodestar approach is customary for attorney fee calculations, the Ninth Circuit has held that it is not required in the bankruptcy context where it would "not realistically quantify to numerical precision" the fee award. Unsecured Creditors' Comm. v. Puget Sound Plywood, Inc., 924 F.2d 955, 960 (9th Cir.1991).
The records of Trustee’s Counsel contains numerous examples of "lumping". LBR 2016 specifically indicates that fee applications may not lump tasks performed.
Lumping is prohibited specifically because it makes the task of determining reasonableness of counsel’s time spent on specific tasks more difficult to achieve.
Here, the entries on February 23, 2016, March 11, 2016, April 5, 2016, April 14, 2016, and April 28, 2016, are samples of unacceptable lumping contained in the application. The difficulty in ascertaining reasonableness of fees when balanced against the amount recovered by Counsel for the Estate warrants a 10% further reduction (the Court acknowledges that fees were already reduced by stipulation with the Trustee by 7%) in fees of $6,385.40 for a total fee award of $57,469.10. While the Court believes there are other issues of reasonableness, given the totality of the circumstances, the Court is satisfied with a 10% reduction.
The applications for compensation of the Trustee, Counsel for the Trustee, and Accountant for the Trustee have been set for hearing on the notice required by LBR 2016-1. Pursuant to the Trustee's Final Report and the Applications of the associated professionals, the following administrative claims will be allowed:
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Trustee Fees: | $ 23,935.24 |
Trustee Expenses: | $ 131.17 |
Attorney Fees: | $57,469.10 |
Attorney Costs: | $644.95 |
Accountant Fees: | $3,717 |
Accountant Costs: | $250.74 |
The applications for compensation are approved (as modified above) and the trustee and associated professionals may submit on the tentative by their nonappearance and lodgment of an order.
APPEARANCES WAIVED. Movant to lodge an order within 10 days or may appear and argue the tentative.
12/06/2017
The hearing on the Trustee's Final Report and related Fee Applications is CONTINUED to December 13, 2017, at 11:00 a.m.
APPEARANCES WAIVED.
Debtor(s):
Michael Sevilla Santos Represented By Jeffrey B Smith
Joint Debtor(s):
Maricar Domingo Santos Represented By Jeffrey B Smith
Trustee(s):
Larry D Simons (TR) Represented By
Larry D Simons (TR) Wesley H Avery
11:00 AM
Docket 54
On January 11, 2017 ("Petition Date"), Ariel Flores ("Debtor") filed her petition for chapter 7 relief. Larry Simons is the duly appointed chapter 7 trustee ("Trustee"). On October 26, 2017, the Debtor amended schedules A/B and C [Docket Numbers 51 and 52] (the "Amended Schedules"). The Debtor’s Amended Schedules seek to exempt $8,336 for 2016 Tax Returns as well as the $13,117 asserted value of a 2012 Honda Civic.
On November 21, 2017, the Trustee filed his Objection to Debtor’s Claimed Exemptions ("Objection"). The Objection is timely and no opposition has been filed. Service appears proper under the circumstances.
DISCUSSION
The Tax Refunds
The Debtor claimed an exemption in 2016 tax refunds under California Code of Civil Procedure §§ 704.080, 704.070 and 706.051. Here, the Court is persuaded by the Trustee that § 704.080 (which applies to public benefits), § 704.070 (which applies to "paid earnings"), and § 706.051 (exempting from levy earnings necessary for support) are inapplicable to tax refunds. Additionally, the Debtor, for his part has not filed opposition or come forward with any legal authority indicating that the exemption is proper under either of the three subsections asserted in Amended Schedule C. For these reasons, the Court is inclined to SUSTAIN the Objection of the
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Trustee as to the claimed exemption in tax refunds.
The 2012 Honda Civic
The Debtor claimed an exemption in the 2012 Honda Civic under California Code of Civil Procedure §§ 704.010 and 704.060. First, although § 704.010 applies to the value of motor vehicles, the Trustee has pointed out that this exemption is capped at $3,050, and the Debtor has already claimed this exemption to cover two other vehicles – a 2000 Hyundai Accent and a 2015 Mazda SUV – for which the combined value of these vehicles totals $5,033. Thus, the Debtor’s § 704.010 cap for motor vehicles has been reached and cannot be applied to safeguard the 2012 Honda Civic. Second, the Debtor attempts to exempt the Civic under § 704.060 (applicable to commercial vehicles). As to this second exemption, the Trustee correctly points out that the Debtor has provided no evidence that the Civic classifies as a "commercial vehicle" or that it can otherwise qualify as a "tool of the trade" vehicle such that this exemption would apply. Based on the foregoing, the Court is inclined to SUSTAIN the Objection of the Trustee as to the claimed exemption in the 2012 Honda Civic.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to SUSTAIN the Trustee’s Objection in its entirety.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Ariel A. Flores Represented By Stefan R Pancer
Movant(s):
Larry D Simons (TR) Pro Se
11:00 AM
Trustee(s):
Larry D Simons (TR) Pro Se
11:00 AM
EH
Docket 30
On July 27, 2017, Martha Lorena Soto Jimenez ("Debtor") filed her petition for chapter 7 relief. Todd Frealy is the duly appointed chapter 7 trustee ("Trustee").
On November 28, 2017, the Trustee filed his Motion to Compel the Debtor to Appear for Her Meeting of Creditors and to Produce Documents Requested by Trustee ("Motion"). Service was proper and no opposition has been filed.
DISCUSSION
The Trustee has provided evidence that the Debtor at the initial meeting of creditors on August 31, 2017. At the initial meeting of creditors where the Trustee requested that she provide (1) mortgage statements for real property located at 1475 Capri Lane in San Jacinto, CA ("Property"), (2) proof of insurance for the Property, and (3) copies of judgments or orders issued by state court in connection with a pending dissolution action between the Debtor and Armando Cabadas.
The Debtor appeared at the continued meeting of creditors on September 18, 2017, without her counsel but did not produce the documents and indicated that she had provided the documents to her counsel. The Trustee continued the meeting. The Trustee has continued the meeting of creditors a total of three times since her last appearance on September 18, 2017, and the Debtor has failed to appear at all three
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continued meetings of creditors. Additionally, the Debtor has failed to provide any of the documents requested by the Trustee at the initial meeting in August 2017.
Based on the foregoing, the Trustee seeks an order compelling the Debtor’s appearance at her Section 341(a) meeting of creditors, and compelling the Debtor to produce the requested documents to the Trustee within 10 days of entry of an order granting the Motion.
Section 521(a)(3) of the Bankruptcy Code requires a Debtor’s cooperation with the Trustee and §§ 521(a)(4) and 542 require the Debtor to turn over records relating to estate property. Here, the Debtor’s failure to cooperate or turn over documents requested by the Trustee constitute represent an unacceptable unwillingness to comply with the duties concomitant to entitlement to a chapter 7 discharge.
TENTATIVE RULING
Based on the foregoing, the Court is inclined to GRANT the Motion in its entirety.
APPEARANCES WAIVED. Movant to lodge an order within 7 days.
Debtor(s):
Martha Lorena Soto Jimenez Represented By Marlin Branstetter
Movant(s):
Todd A. Frealy (TR) Represented By Carmela Pagay
Trustee(s):
Todd A. Frealy (TR) Represented By Carmela Pagay
11:00 AM
(Holding date)
From: 8/31/17, 10/2/17, 10/18/17, 11/15/17
Also #8.1 EH
Docket 110
BACKGROUND
On January 28, 2011, Brad & Deborah Stoddard ("Debtors") filed a Chapter 13 voluntary petition. On May 24, 2011, Debtors’ Chapter 13 plan was confirmed. The plan contained the following provision, section V.F.: "The debt of american Education Services will be discharged; the school has been stripped of accreditation and is on probation." On December 5, 2016, Debtors received a discharge, and, on January 13, 2017, the case was closed.
On May 11, 2017, Debtors filed a motion for an order to show cause why creditor American Educational Services ("AES") should not be held in contempt court, and for damages and attorney’s fees, for intentionally violating the discharge injunction.
Because of inadequate service, the motion was originally denied without prejudice, and Debtors refiled the motion on June 1, 2017. AES filed its opposition on June 8, 2017. At a hearing on the matter on July 27, 2017, the Court continued the matter to
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October 2, 2017.
On July 31, 2017, the Court issued its Order to Show Cause why Matthew Resnik ("Resnik"), Brad Stoddard, and Deborah Stoddard should not be sanctioned for including a prohibited provision in a Chapter 13 plan (the "OSC"). Debtors filed their opposition on August 14, 2017. Resnik filed his opposition on August 17, 2017. AES filed its reply on August 24, 2017. Resnick filed supplemental responses on September 21 and 22, 2017.
DISCUSSION
Introduction
The OSC is issued in light of, and accordance with, the Supreme Court’s decision in United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010). In Espinosa, the bankruptcy court had confirmed a Chapter 13 plan which purported to discharge student loan debt without complying with the applicable procedural requirements.
After intercepting debtor’s income tax refund to use towards payment of student loans, the creditor argued that the bankruptcy court’s order confirming the debtor’s Chapter 13 plan should be declared void. The Supreme Court held that, absent a jurisdictional or due process violation (which was not present) the bankruptcy court’s legal error in confirming the Chapter 13 plan with a provision that impermissibly discharged student loan debt, did not render the order void. At the conclusion of its opinion, the Supreme Court opined:
We acknowledge the potential for bad-faith litigation tactics. But expanding the availability of relief under Rule 60(b)(4) is not an appropriate prophylaxis. As we stated in Taylor v. Freeland & Kronz, 503 U.S. 638 (1992), "debtors and their attorneys face penalties under various provisions for engaging in improper conduct in bankruptcy proceedings." Id. at 644; see also Fed. R. Bankr. P. Rule 9011. The specter of such penalties should deter bad-faith attempts to discharge student loan debt without the undue hardship finding
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Congress required.
Espinosa, 559 U.S. at 278. Here, the Court is tasked with interpreting and implementing the guidance provided by the Supreme Court in Espinosa.
Debtors and Resnick have filed separate responses to the Court’s OSC. Debtors have raised five arguments in their opposition: (1) that the Court already found that the plan was filed in good faith; (2) that the plan must be given res judicata effect; (3) that the Court is exceeding its discretionary sanctioning authority; (4) that the OSC is an illegal ex post facto law; and (5) that Fed. R. Bankr. P. Rule 9011 is inapplicable.
Resnick offers the following categories of arguments in his opposition: (1) use of the Court’s inherent sanctioning authority is inappropriate here; (2) Rule 9011 sanctions require a contempt finding; (3) Section 105 is inapplicable; and (4) the plan provision at issue is not prohibited. The Court will analyze the respondents’ arguments separately.
Debtors’ Opposition
The Court’s Good Faith Finding
11 U.S.C. § 1325(a)(3) states:
Except as provided in subsection (b), the court shall confirm a plan if –
the plan has been proposed in good faith and not by any means forbidden by law
Debtors argue that: "[i]t necessarily follows [from § 1325(a)(3)] that the Court has
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already made an express finding that the Plan was filed in good faith." This result does not necessarily follow from the language of the statute. The plain language of § 1325
(a) operates to eliminate the discretion of the court if the court finds that the debtor has satisfied the nine subsections of § 1325(a); the provision does not state the consequences of a finding that some, but not all, of the § 1325(a) subsections have been satisfied. As is stated by the leading bankruptcy treatise:
The standards set forth in section 1325(a), however, are not requirements that must be met in every case before a plan can be confirmed. Unlike section 1322 (a), section 1325(a) does not state that "the plan shall" comply with its listed criteria. Nor does it state, as does section 1129(a), that the court shall confirm the plan only if certain requirements are met. Instead it states only that if its criteria are met the court must confirm the plan. Therefore, the court has discretion to confirm a plan that does not comply with all of the standards of section 1325(a), particularly if no party objects.
8 Collier on Bankruptcy ¶ 1325.01 (16th ed. 2016) (footnotes omitted).
Despite the plain language of the statute, the Ninth Circuit Court of Appeals, without any independent analysis, and relying on an out of circuit bankruptcy court decision, has determined that the requirements of § 1325(a) are mandatory for Chapter 13 plan confirmation. See In Chinichian, 784 F.2d 1440, 1443-44 (9th Cir. 1986) ("For a court to confirm a plan, each of the requirements of section 1325 must be present and the debtor has the burden of proving that each element has been met.") (citing In re Elkind, 11 B.R. 473, 476 (Bankr. D. Colo. 1981)). While it remains unclear from where the mandatory characterization of § 1325(a) arose, a variety of courts have, in passing, assumed that the § 1325(a) standards are mandatory for plan confirmation.
See, e.g., Assocs. Comm. Corp. v. Rash, 520 U.S. 953, 956 (1997) ("To qualify for confirmation under Chapter 13, the Rashes’ plan had to satisfy the requirements set forth in § 1325(a) of the Code."); Shaw v. Aurgroup Fin. Credit Union, 552 F.3d 447, 459 (6th Cir. 2009) ("Numerous district and bankruptcy courts outside the Fifth, Ninth, Tent, and Eleventh Circuits, including courts within this circuit, have also held, suggested, or assumed that the provision in § 1325(a) are mandatory.") (collecting cases). But see In re Szostek, 886 F.2d 1405, 1411 (3rd Cir. 1989) ("On the other hand, if the conditions of § 1325 are not met, although the requirements of § 1322 are fulfilled, the court has the discretion to confirm the plan. If Congress had intended for
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§ 1325(a) to be mandatory, it could have included that requirement with the requirements already listed in § 1322); see also Matter of Escobedo, 28 F.3d 34, 34 (7th Cir. 1994) ("We note, however, as did the court in Szostek, that while the provisions of § 1325(a)(5) may be discretionary[,] the requirements of § 1322(a)(2) are mandatory.). Indeed, even Espinosa appears to implicitly assume that the § 1325
(a) requirements are mandatory. See 559 U.S. 260, 277 ("That is because § 1325(a) instructs a bankruptcy court to confirm a plan only if the court finds, inter alia, that the plan complies with the ‘applicable provisions’ of the Code.") (emphasis added). Therefore, it would appear that binding case law suggests that the § 1325(a) requirements, including good faith, are mandatory requirements for confirmation.
Res Judicata
While the Court accepts Debtors’ argument that, by confirming their Chapter 13 plan, the Court implicitly found that the plan was filed in good faith, the Court rejects Debtors’ argument that that finding is res judicata with regard to the Court. 11 U.S.C.
§ 1327(a) states: "The provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan." The Court is not a creditor and Debtors have advanced no argument as to how § 1327
(a) would prevent the Court from revisiting its finding of good faith. In fact, the Ninth Circuit Court of Appeals opinion that concluded the § 1325(a) requirements were mandatory stated the following: "Because section 1325(a)(3) of Title 11 requires the Chinichians to propose their plan in good faith, the bankruptcy court has jurisdiction to revoke a plan if the plan was not filed in good faith." In re Chinichian, 784 F.2d 1440, 1442 (9th Cir. 1986). The Ninth Circuit’s further comments indicate that it believed such powers were expansive:
The Chinichians argue, however, that because section 1330 is a specific statute it should govern the more general section 105. The Mancari rationale that a specific statute cannot be nullified by a more general one is only applicable where a conflict exists.
Section 1330 provides a method of revoking a confirmation order "on request
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of a party in interest." While it does not specifically authorize such a revocation by the court sua sponte, it does not prohibit such action. Section
105 constitutes authority for the court to issue any order necessary to carry out the provisions of the Code. That reservoir of power in no manner conflicts with the authority to act upon the request of an interested party, but constitutes a supplemental method of revocation in the event of fraud. It would be absurd to hold that the bankruptcy court is powerless to correct a fraud unless first requested by an interested party, and that is not what section 1330 provides.
Section 105 sets out the power of the bankruptcy court to fashion orders as necessary pursuant to the purposes of the Bankruptcy Code.
Further, a bankruptcy court is a court of equity. As a court of equity, it may look through form to the substance of a transaction and devise new remedies where those at law are inadequate. Further, it can modify or vacate its order so long as no intervening right has become vested in reliance thereon. Thus, the bankruptcy court had equitable power to revoke its order partially confirming the Chinichians’ plan once it recognized the Chinichians did not file their plan in good faith as required by section 1325(a)(3).
Id. at 1442-43 (citations omitted).
Debtors’ argument that § 1327 operates to prevent the Court from modifying its implicit good faith finding when confirming the plan lacks merit. The statute states that the terms of the provisions of a confirmed plan are binding on the debtor and creditors. The Court is not a creditor or a debtor nor is the Court’s good faith finding a provision of a confirmed plan. Nor does res judicata prevent a court from revoking or amending its own order. Such a principle would eliminate the ability to revoke or modify a judgment altogether, rendering obsolete Fed. R. Civ. P. Rules 59 & 60, in addition to many others legal provisions. Debtors’ argument that the Court is bound by its own previous finding due to res judiciata is not compelling.
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The Court Lacks Authority to Issue Sanctions
Debtors’ argument that the Court lacks authority to issue sanctions can be summarized in the following: (1) the Court is precluded from finding that the plan was proposed in bad faith due to res judicata; and (2) the Court must find that the plan was proposed in bad faith for sanctions to be warranted. Because the Court rejects (1), as outlined above, Debtors’ argument must fail.
The OSC is an "Illegal Ex Post Facto Law"
In their fourth argument, Debtors argue that this OSC is an ex post facto law. As noted by Debtors, Art. 1 §§ 9 & 10 of the Constitution prohibit ex post facto laws. Article 1 of the Constitution deals with the legislative branch – the branch of the government that makes laws. The Judicial Branch does not make laws. Debtors’ argument that a court order is an ex post facto law is therefore, necessarily, invalid.
Rule 9011 is Inapplicable
Fed. R. Bankr. P. Rule 9011(b)(2) states:
By presenting to the court (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, --
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the
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establishment of new law
Fed. R. Bankr. P. Rule 9011(c)(1)(B) states: "[O]n its own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto."
Debtors’ nine subsection argument why Fed. R. Bankr. P. Rule 9011 is inapplicable is rather chaotic and disorganized. Regardless, the Court acknowledges that, as to Debtors, Rule 9011 sanctions are inapplicable due to the operation of Rule 9011(c)(2) (A). Therefore, the Court agrees that Rule 9011 cannot operate as the source of sanctions against Debtors.
Resnick’s Opposition
Inherent Sanctioning Authority
The Supreme Court has stated: "it is firmly established that the power to punish for contempts is inherent in all courts." Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991) (quoting Ex parte Robinson, 19 Wall. 505, 510 (1874)); see also Fink v. Gomez, 239 F.3d 989, 992 (9th Cir. 2001) ("[T]he district court has the inherent authority to impose sanctions for bad faith, which includes a broad range of willful improper conduct."). The Ninth Circuit has stated: "Itel teaches that sanctions are justified when a party acts for an improper purpose – even if the act consists of making a truthful statement or a non-frivolous argument or objection. Fink, 239 F.3d at 922; see also In re Dyer, 322 F.3d 1178, 1196 (9th Cir. 2003) (discussing bad faith and willful misconduct).
Nevertheless, as Resnick states: "when there is bad-faith conduct in the course of litigation that could be adequately sanctioned under the Rules, the court ordinarily
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should rely on the Rules rather than the inherent power." Chambers, 501 U.S. at 50. Because the Court believes that the existing framework provides an adequate basis for sanctions in this type of situation, the Court need not rely on its inherent sanctioning authority.
Rule 9011
When imposing sanctions, sua sponte, under Fed. R. Bankr. P. Rule 9011, "sanctions ‘will ordinarily be imposed only in situations that are akin to a contempt of court.’" United Nat’l Ins. Co. v. R&D Latex Corp., 242 F.3d 1102, 1116 (9th Cir. 2001) (citing Barber v. Miller, 146 F.3d 707, 711 (9th Cir. 1998); see also Fed. R. Civ. P. Rule 11, Advisory Committee Notes ("Since show cause orders will ordinarily be issued only in situations that are akin to a contempt of court, the rule does not provide a ‘safe harbor’ to a litigant for withdrawing a claim, defense, etc., after a show cause has been issued on the court’s own initiative."). "[P]rior to imposing court-initiated sanctions, the district court is required to determine whether counsel’s conduct is ‘akin to contempt.’" Gonzalez v. Texaco Inc., 344 Fed. Appx. 304, 308 (9th Cir. 2009) (quoting R&D Latex Corp., 242 F.3d 1102, 1118)).
In this situation, the Court defers to Bankruptcy Judge TeSelle:
At the hearing on the motions to dismiss conducted by the Court in these cases on May 2, 2000, it was clear to the Court that debtors’ counsel included these plan provisions in the hope that they would trap an unwary student loan creditor. If a plan containing a student loan discharge provision is confirmed, debtors and their counsel argue that the student loan obligation is discharged under the theory of res judicata, improperly relying on a skewed interpretation of the opinion of the Tenth Circuit Court of Appeals in In re Andersen, 179 F.3d 1253 (10th Cir. 1999) to support their position. If an objection to confirmation is raised by either the Trustee or the student loan creditor, the offending language is simply removed from the plan, and debtors are no worse off for their attempt. The Court will not permit this type of gamesmanship on the part of debtors and their counsel to continue. Conduct such as this has no
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place in the practice of bankruptcy law, and will not be tolerated by this Court.
The citation of the opinion of the Tenth Circuit in Andersen, supra, as authority for the practice of intentionally inserting language in a chapter 13 plan that violates the Bankruptcy Code and Rules, and as authorizing counsel to stand by silently and thereby induce the Court to confirm a plan that contains a provision that counsel knows violates the Bankruptcy Code and Rules, is at once offensive and specious. Counsel appearing before this Court are officers of the Court and are ethically obligated to inform the Court if they are aware of the existence of a plan provision that renders the plan non- confirmable.
Rather than recognizing their obligations to the Court and to opposing counsel, counsel for debtors in these cases go so far as to suggest that they are compelled by Andersen to recommend that their clients include these unlawful plan provisions, implying that their failure to do so might be an act of professional negligence. The Court does not believe that a fair reading of the opinion of the Tenth Circuit in Andersen can reasonably lead one to conclude that the Tenth Circuit intended to encourage the practice of intentionally inserting unlawful plan provisions in the hope that confirmation of the plan will occur and the time for appeal will pass before such provisions are noticed so that debtors and their counsel can then claim res judicata. Such a skewed reading of Andersen fails to account for the ethical obligations owed by members of the bar to the Court and to each other.
This is particularly true given the volume of chapter 13 filings in this district, and the fact that the Court does not have the time to independently review every chapter 13 plan and confirmation order to determine whether an attempt to unlawfully discharge a student loan obligation is being made. Because the Court has apparently been unable to rely on the ethical conduct of some of the counsel representing chapter 13 debtors appearing before it, the Court, up to his point in time, has been forced to rely on a party in interest other than the debtor to point out those instances in which such student loan discharges have been attempted through plan provisions. Where the Court has become aware of such attempts, either through objections by the student loan creditor or through the inclusion of such a provision in the order confirming the chapter 13 plan,
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the Court has refused to confirm the plan containing such language, and has
stricken language from confirmation orders attempting to effect a discharge of student loan indebtedness in this manner.
. . .
In light of the existing case law concerning the impropriety of the inclusion of such student loan discharge provisions in chapter 13 plans, and the unambiguous language of the Bankruptcy Code and Rules, the Court believes that the inclusion of such a provision in a chapter 13 plan and/or order confirming a chapter 13 plan is both unethical and sanctionable conduct pursuant to Bankruptcy Rule 9011. Bankruptcy Rule 9011(b) concerns representations made to the Court. It states that by presenting a paper to the Court, an attorney or unrepresented party certifies to the best of his or her knowledge, information and belief, formed after a reasonable inquiry under the circumstances, that the legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. See Fed. R. Bankr. P. Rule 9011 (b)(2).
. . .
The Court refuses to allow counsel for debtors to turn the inclusion of a student loan discharge provision in a chapter 13 plan into a "can’t lose" proposition. The Court therefore concludes that Andersen provides no protection from the imposition of sanctions under Rule 9011(b) in cases in which a student loan discharge provision is included in a confirmed chapter 13 plan.
In re Hensley, 249 B.R. 318, 320-323 (Bankr. W.D. Okla. 2000).
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Section 105
11 U.S.C. § 105(a) states:
The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary to enforce or implement court orders or rules, or to prevent an abuse of process.
Resnick offers a single argument in support of his position that § 105(a) is inapplicable: that the provision only applies to violations of a specific court order. Resnick cites In re Dyer in support of this statement. 322 F.3d 1178, 1196 (9th Cir. 2003) ("Civil contempt authority allows a court to remedy a violation of a specific order (including ‘automatic’ orders, such as the automatic stay or discharge injunction).").
Dyer does not explicitly state that § 105(a) is strictly limited to remedying violations of specific court orders, nor does it cite any authority from which it could be inferred that the Dyer court had such an opinion. Indeed § 105(a) explicitly mentions, in addition to court orders, rules and "abuse of process"; the latter might be invoked in the absence of a specific court order.
The Supreme Court, on two occasions after Dyer, has written an opinion which
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indicates that § 105 is not strictly limited to correcting violations of specific court orders. First, in Marrama v. Citizens Bank of Mass., the Supreme Court wrote:
On the contrary, the broad authority granted to bankruptcy judges to take any action that is necessary or appropriate to prevent an abuse of process described in § 105(a) of the Code, is surely adequate to authorize an immediate denial of a motion to convert filed under § 706 in lieu of a conversion order that merely postpones the allowance of equivalent relief and may provide a debtor with an opportunity to take action prejudicial to creditors.
549 U.S. 365, 375 (2007) (footnote omitted). The "abuse of process" referenced in Marrama was not a violation of a specific court order, but, rather, "an unmeritorious attempt to qualify as a debtor under Chapter 13." Id.
Second, in Law v. Siegel, the Supreme Court stated: "Section 105(a) confers authority to ‘carry out’ the provisions of the Code." This statement is natural, since the first sentence of § 105(a) states: "[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title."
Here, the Court concludes that a specific and definite court order has not been violated. Nevertheless, the reconciliation of Dyer and Marrama helps illustrate the proper approach forward. The Ninth Circuit Court of Appeal’s instructions that sanctions under § 105(a) are appropriate for violation of a specific and definite court order is derived from the non-bankruptcy standard for civil contempt. See F.T.C. v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999) (quoting Stone v. City & Cnty. of S.F., 968 F.2d 850, 856 n.9 (9th Cir. 1992)) ("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."). Nevertheless, as illustrated by Marrama, the Court’s authority under § 105(a) is not strictly limited to issuing sanctions for civil contempt. While a civil contempt finding under § 105(a) may not be appropriate in these circumstances, it does not follow that the Court lacks the ability to adequately and equitably resolve this situation.
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TENTATIVE RULING
The Court is inclined to CONTINUE the hearing for approximately thirty days to allow Debtors to file a supplemental brief addressing why they should not be sanctioned pursuant to the Court’s inherent sanctioning authority. No further briefing from Resnick is requested.
APPEARANCES REQUIRED.
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
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Also #8 EH
Docket 137
- NONE LISTED -
Debtor(s):
Brad Stoddard Represented By Matthew D Resnik David Brian Lally
Joint Debtor(s):
Deborah Ann Stoddard Represented By Matthew D Resnik David Brian Lally
Movant(s):
AES/PHEAA Represented By
Scott A Schiff
Trustee(s):
Amrane (RS) Cohen (TR) Represented By
Amrane (RS) Cohen (TR)
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HOLDING DATE
From: 5/4/17, 8/24/17, 8/31/17, 9/14/17, 11/9/17 EH
Docket 44
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Trustee(s):
Rod Danielson (TR) Pro Se
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Adv#: 6:16-01277 Reynoso v. Goodman et al
Advanced From: 12/21/17 Also #11 & #12
EH
Docket 54
BACKGROUND
On December 21, 2016, Mark & Natasha Reynoso ("Plaintiffs") filed a complaint to determine non-dischargeability of debt pursuant to 11 U.S.C. § 523(a)(2)(A) against Douglas & Anne Goodman ("Debtors"). On February 3, 2017, the complaint was dismissed with leave to amend, and, on February 28, 2017, Plaintiffs filed an amended complaint. On March 31, 2017, Debtors filed another motion to dismiss, which was orally denied on May 4, 2017, although it does not appear that an order was ever lodged by Plaintiffs.
On June 5, 2017, Debtors filed an answer ("Answer") and what was characterized as a "cross-claim" against Jose Pastora ("Pastora") and Theresa Mann ("Mann"). On July 18, 2017, Mann & Pastora filed a motion to dismiss the "cross-complaint," and, on September 25, 2017, the "cross-complaint" was dismissed with leave to amend. On October 16, 2017, Debtors filed an amended "cross-complaint". On November 6, 2017, Pastora & Mann filed another motion to dismiss for failure to state a claim
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based on a variety of technical legal arguments. On December 6, 2017, Debtors filed their opposition to the motion to dismiss.
The factual basis of the non-dischargeability complaint is as follows: on February 12, 2015, Plaintiffs purchased certain real property located in Upland, California from Debtors. Mann and Remax Masters Realty worked as "dual agents" for Plaintiffs and Debtors. Plaintiffs contend that Mann represented that the square footage of the real property was 3,231 square feet, when in fact the actual square footage was only 2,713. Plaintiffs contend that Debtors (or at least Ms. Goodman) ratified this representation. Plaintiffs also allege that Ms. Goodman represented that a water leak in the bathroom had been repaired, but that the leak was not repaired. Debtors contend that no misrepresentations were made, and, alternatively, that if any misrepresentations were made, those misstatements were only made by Mann or Pastora.
DISCUSSION
Motion to Dismiss
Mann & Pastora make three arguments in their motion to dismiss: (1) that the amended third-party complaint should be dismissed based on binding admissions of Debtors; (2) that the amended complaint should be dismissed as a matter of state law; and (3) that Pastora is not a proper third-party defendant.
Regarding the first argument, Mann & Pastora identify portions of Debtors’ Answer to the first amended complaint where Debtors generally denied Plaintiff’s allegations, including denying that any misrepresentations were made to Plaintiffs. Mann & Pastora then provide the following analysis in their motion:
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¶¶¶ 8-10 cites what is alleged in the First Amended Complaint, but what a plaintiff alleges are merely inadmissible allegations, but what a party alleges are legally binding on said party. ¶¶¶¶ 11, 18, 28, and 35, claim that
GOODMAN never made any such misrepresentations. This does establish wrongdoing by Cross-Defendants, as GOODMAN has admitted that Plaintiffs do not have a case.
There are a variety of problems with the above line of argument. First, the analysis provided by Mann & Pastora is nonsensical to the extent it can be comprehended. Second, the argument of Mann & Pastora, that "[s]tatements made in any pleading, [sic] are judicial admissions that bind the party making the admission throughout the litigation," is overly broad. This is especially true given that the final sentence of Mann & Pastora’s analysis begins with: "[t]his does establish wrongdoing by Cross- Defendants," a statement which, under the interpretation advanced by Mann & Pastora, would appear to conclusively resolve the third-party complaint against them.
Apart from the serious drafting errors in the motion to dismiss, the argument is fundamentally flawed for several reasons –most notably because the denials in Debtors’ answer are not admissions. An admission is defined as: "A statement in which someone admits that something is true or that he or she has done something wrong; any statement or assertion made by a party to a case and offered against that party; an acknowledgment that facts are true." Black’s Law Dictionary (10th ed.
2014). Here the alleged admissions in the answer do not admit the truth of a fact, do not admit wrongdoing, and are not directed against the party making the statement. In fact, the statements are quite the opposite of an admission – they are a denial.
To illustrate why an admission and a denial are different, the Court points to the pertinent and thoughtful opinion on the matter in In re Applin, 108 B.R. 253, 258 (Bankr. E.D. Cal. 1989), which included the following:
Thus, the statement is no more than an argumentative assertion of a defense in
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a paper that, taken in its context, has the tenor of merely announcing that the debtors intended to put the moving party to its proof. It was the equivalent of an inconsistent plea.
Judicial admissions are not made upon ambiguous, ‘assuming arguendo’ comments by counsel and are not made upon inconsistent pleas.
See also id. at n.7 (providing a clear description of judicial admissions).
Finally, the Court notes that "[a] trial has discretion whether to accept a judicial admission." Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997). If there remains any doubt whether the subject statements are a judicial admission, the Court notes that it, alternatively, exercises its discretion to not accept the statements as a judicial admission.
Mann & Pastora’s second argument is that the third-party complaint should be dismissed pursuant to California law, specifically Cal. Civ. Code § 1088. This argument lacks a valid legal basis because California law is not at issue in this proceeding. As noted above, Fed. R. Civ. P. Rule 14(a)(1) allows a defending party to bring a third-party complaint against "a nonparty who is or may be liable to it for all or part of the claim against it." There is no claim under California law against Debtors at this time, and, therefore, no claim under California law against Mann & Pastora at this time. Therefore, the elements and defenses that may arise under California law are irrelevant.
The third argument is that Pastora should be dismissed from the action. Among other things, the arguments point out that the amended third-party complaint does not raise any allegations against Pastora, but, instead, merely states that Pastora was involved in the sale and worked with Mann. The amended third-party complaint appears to contend that because Pastora worked with Mann he is also responsible for any statements Mann made. Specifically, the amended third-party complaint states: "[t] hese representations, and any alleged misrepresentations, were made by MANN,
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Remax Masters Realty, and therefore PASTORA as well since PASTORA was also working through Remax Masters Realty on this particular transaction."
To avoid dismissal under Fed. R. Civ. P. Rule 12(b)(6), a plaintiff must aver in the complaint ‘sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). It is axiomatic that a claim cannot be plausible when it has no legal basis. A dismissal under Fed. R. Civ. P. Rule 12(b)(6) may be based either on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir.2008).
Here, the amended third-party complaint lacks a cognizable legal theory to support a cause of action against Pastora. The assertions in the amended third-party complaint, if taken as true, do not support a cause of action against Pastora. Therefore, the Court is inclined to dismiss Pastora from the action.
Jurisdictional Issues
Additionally, the Court notes that there are significant, complicated jurisdictional concerns related to this "cross-complaint." As will be outlined below, the case law on the issue is sparse and does not directly resolve the issue.
As a preliminary matter, Plaintiffs complaint against Debtor was filed under 11 U.S.C.
§ 523(a)(2)(A) states:
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt –
for money, property, services, or an extension, renewal, or
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refinancing of credit, to the extent obtained by –
false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
Therefore, Plaintiffs are requesting that the Court determine that their claim against Debtors is excepted from Debtor’s discharge, if a discharge is received by Debtors, because their claim falls under the above exception. Additionally, Plaintiffs appear to be requesting a money judgment against Debtors.1 The Court notes that while there is a split in authority regarding a bankruptcy’s jurisdiction to enter a money judgment in a non-dischageability proceeding, within the Ninth Circuit that question is answered in the affirmative. See In re Kennedy, 108 F.3d 1015 (9th Cir. 1997). But see 4 Collier’s on Bankruptcy ¶ 523.32 (16th 3d. 2009) ("Courts are divided as to whether the bankruptcy court has subject matter jurisdiction to enter a money judgment in a nondischargeability determination."). The Ninth Circuit has been persuaded that the determination of dischargeability and the fixing of the amount of the non- dischargeable debt are inseparable functions. See id. at 1017-18 (quoting In re Devitt, 126 B.R. 212, 215 (Bankr. D. Md. 1991) ("If it is acknowledge as beyond question that a complaint to determine dischargeability of a debt is exclusively within the equitable jurisdiction of the bankruptcy court, then it must follow that the bankruptcy court may also render a money judgment in an amount certain without the assistance of a jury. This is true not merely because equitable jurisdiction attaches to the entire cause of action but more importantly because it is impossible to separate the determination of dischargeability function from the function of fixing the amount of the non-dischargeable debt.").
As a second preliminary matter, the "cross-complaint" at issue here is not a cross- complaint. The Federal Rules of Civil Procedure, unlike the California Code of Civil Procedure, explicitly distinguishes between counter-claims (FRCP 13(a)-(e)), cross- claims (FRCP 13(g)), and third-party complaints (FRCP 14(a)). But see Cal. Code.
Civ. P. § 428.10 (referring to them all as "cross-claims"). Fed. R. Civ. P. Rules 13 and 14 are applicable in adversary proceedings. See Fed. R. Bankr. P. Rule 7013-7014.
The "cross-complaint" at issue here is actually a third-party complaint. Fed. R. Civ. P. Rule 14(a)(1) states:
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A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may liable to it for all or part of the claim
against it. But the third-party plaintiff must, by motion, obtain the court’s leave if it files the third-party complaint more than 14 days after serving its original answer.
The concept of a third-party complaint in a non-dischargeability proceeding raises immediate issues. First and foremost, that part of Plaintiffs’ complaint that requests that their claim be excepted from Debtor’s discharge is clearly not the appropriate subject for a third-party complaint. See, e.g., In re Narumanchi, 221 B.R. 311, 315 n.9 (Bankr. D. Conn. 1998) ("Indeed the Court questions whether an entity could ever be secondarily liable to a bankruptcy debtor in connection with a determination of the dischargeability of a debt, given that pure dischargeability actions are declaratory in nature."). Furthermore, it is unclear if this Court has jurisdiction to consider the third- party complaint even where the non-dischageability complaint also seeks a money judgment.
There appear to be only three cases that cite Fed. R. Bankr. P. Rule 7014 in the context of a non-dischargeability proceeding. In the first, In re Narumanchi, 221 B.R. 311 (Bankr. D. Conn.), the bankruptcy court abstained from hearing that part of the non-dischargeability complaint which requested a money judgment, limiting its review to the dischargeability of the debt. The bankruptcy court then, sua sponte, dismissed the third-party complaint as improper. In the second, In re McCarter, 289
B.R. 759 (Bankr. D.N.M. 2002), the bankruptcy court noted that the debtors had received a discharge and their Chapter 7 case had been fully administered. The bankruptcy court then reasoned that it either could not or would not exercise jurisdiction to hear the request for a money judgment, and consequently dismissed the third-party complaint as improper. And, in the third, In re Pompa, 2013 WL 2286080 (Bankr. W.D. Pa. 2013), the bankruptcy court noted that the non-dischargeability complaint did not include a request for a money judgment, and it dismissed the third- party complaint as improper. None of these three cases clearly resolves the issue here, and the jurisdictional question requires a more nuanced analysis.
A return to the nature of the non-dischargeability complaint and the third-party complaint is necessary to more thoroughly articulate the jurisdictional issues. The
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non-dischargeability complaint was filed pursuant to § 523(a)(2)(A), and the elements of that provision are well established: (1) the debtor made a false representation to deceive the creditor; (2) the creditor relief on the misrepresentation; (3) the reliance was justified; and (4) the plaintiff sustained a loss as a result of the misrepresentation. See, e.g., In re White, 550 B.R. 615, 620 (Bankr. N.D. Ga. 2016).
Therefore, in the absence of a false representation attributable to Debtors, the non- dischargeability complaint would not be successful, and there would no need for a third-party complaint. If there is a false representation attributable to Debtors, the implication would be that Debtors could be characterized as intentional tortfeasors. See 4 Collier’s on Bankruptcy ¶ 523.08[1][d] (16th ed. 2016) ("The frauds included in the portion of section 523(a)(2)(A) under discussion are those that in fact involve moral turpitude or intentional wrong; fraud implied in law, which may be established without imputation or immorality, is insufficient."). This raises an additional issue because "third-party complaints for indemnification routinely are dismissed where the defendant/third-party plaintiff may be liable on the primary complaint only if he or she is an intentional wrongdoer." In re Pompa at *4 (citing United Orient Bank, et. al. v.
Green, 207 B.R. 762 (S.D.N.Y. 1997)). In California, however, comparative equitable indemnification is permitted, at least in some circumstances, among joint intentional tortfeasors. See In re First Alliance Mortg. Co., 471 F.3d 977 (9th Cir. 2006); State Compensation Ins. Fund v. Drobot, 2015 WL 12712320 (C.D. Cal. 2015); Baird v.
Jones, 21 Cal. App.4th 684 (Cal. Ct. App. 1993).
California’s allowance of comparative equitable indemnification in the context of joint intentional tortfeasors does not, however, definitely resolve the jurisdictional question. As discussed above, the Ninth Circuit has recognized a bankruptcy court’s jurisdiction to enter a money judgment on a state law claim in conjunction with a non- dischargeability proceeding, but the legal basis for that jurisdiction is somewhat unclear. In re Kennedy, 108 F.3d 1015 (9th Cir. 1997) (primarily focusing on practical concerns); see also 4 Collier’s on Bankruptcy ¶ 523.32 (16th ed. 2009) (outlining the conflicting opinions on a bankruptcy court’s jurisdiction to enter a money judgment). While liquidating the amount of Plaintiffs’ claim may be necessary in the non- dischargeability proceeding, determining the liability of Mann & Pastora, and assigning comparative fault appear to go beyond the scope of a typical non- dischargeability proceeding. A determination of the latter issues would require the Court to hold a trial on the interactions between two non-debtor parties (Plaintiffs and Mann), and to review the statements made by a non-debtor party, when only the statements of the Debtors are clearly relevant in a non-dischargeability proceeding.
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The pragmatic considerations that have been referenced in decisions affording bankruptcy courts jurisdiction to enter a money judgment in a non-dischargeability proceeding do not appear to be present here.
More importantly, however, while Plaintiffs have requested a money judgment in their first amended complaint, they do not appear to have provided any legal basis for their request – i.e. there is no state law basis to enter a money judgment. 11 U.S.C. § 523(a)
(2) is not a basis to enter a money judgment; the plain language of the statute provides that it is a basis for finding a debt to be non-dischargeable. If Plaintiffs want a money judgment, they need to provide a non-bankruptcy law basis for their request.2 Without that basis, it is impossible to determine what comparative equitable indemnification laws apply (or, as identified above, what state law affirmative defenses may apply), and, therefore, whether the third-party complaint is legally permissible.
Because Plaintiffs’ amended complaint only contains a cause of action pursuant to 11
U.S.C. § 523(a)(2)(A), it would appear that there is no legal basis for a money judgment to be entered in the non-dischargeability complaint. Because there appears to be no legal basis for a money judgment to be entered in the non-dischargeability complaint, it would appear that the third-party complaint is improper.
TENTATIVE RULING
The Court is inclined to GRANT the motion to the extent the motion seeks to have Pastora dismissed from the action and DENY the motion otherwise. In connection with any future motion to dismiss, parties to include briefing on the jurisdictional and procedural issues raised in this tentative ruling.
APPEARANCES REQUIRED.
2:00 PM
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Movant(s):
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
2:00 PM
Trustee(s):
Rod Danielson (TR) Pro Se
2:00 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
From: 8/31/17, 9/14/17, 11/9/17 Also #10 - #12
EH
Docket 26
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Joint Debtor(s):
Anne Louise Goodman Represented By
2:00 PM
Samer A Nahas Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod Danielson (TR) Pro Se
2:00 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
(Holding Date)
From: 5/4/17, 8/24/17, 8/31/17, 9/14/17, 11/9/17 Also #10 & #11
EH
Docket 13
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
Theresa Mann Represented By Andrew L Leff
2:00 PM
Jose Pastora Represented By
Andrew L Leff
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod Danielson (TR) Pro Se
2:00 PM
Adv#: 6:16-01224 Simons (TR) v. Slaieh et al
From: 11/2/16, 2/1/17, 2/15/17, 4/26/17, 5/17/17, 6/7/17, 7/12/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Nabeel Slaieh Represented By George A Saba
Defendant(s):
Nabeel Naiem Slaieh Represented By George A Saba
Joanne Fraleigh Represented By George A Saba
David A. Wood Pro Se
Plaintiff(s):
Larry D. Simons (TR) Represented By David Wood
Matthew Grimshaw
2:00 PM
Trustee(s):
Larry D Simons (TR) Represented By
D Edward Hays David Wood Matthew Grimshaw
2:00 PM
Adv#: 6:15-01265 Pringle v. Clements-Biehl
From: 2/1/17, 3/29/17, 5/31/17, 6/7/17, 9/13/17 EH
Docket 1
- NONE LISTED -
Debtor(s):
Charles Frederick Biehl Represented By
Daryl L Binkley - DISBARRED - Steven L Bryson
Defendant(s):
Rene Clements-Biehl Represented By Allan D Sarver
Plaintiff(s):
John P. Pringle Represented By Elyza P Eshaghi
Brandon J Iskander
Trustee(s):
John P Pringle (TR) Represented By James C Bastian Jr
2:00 PM
Elyza P Eshaghi Brandon J Iskander Lynda T Bui Leonard M Shulman
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
HOLDING DATE
From: 6/7/17, 7/12/17, 8/2/17, 9/27/17, 10/4/17, 11/1/17, 12/6/17
EH
Docket 208
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Movant(s):
Charles Edward Schrader Pro Se
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
2:00 PM
Adv#: 6:13-01171 Schrader v. Sangha
From: 7/8/15, 11/4/15, 3/2/16, 12/14/16, 12/13/17, 4/5/17, 6/7/17, 7/12/17, 8/2/17, 9/27/17, 10/4/17, 11/1/17, 12/6/17
EH
Docket 1
- NONE LISTED -
Debtor(s):
Narinder Sangha Represented By Deepalie M Joshi
Defendant(s):
Narinder Sangha Represented By Deepalie M Joshi Ryan F Thomas
Plaintiff(s):
Charles Edward Schrader Pro Se
Trustee(s):
Karl T Anderson (TR) Pro Se
12:30 PM
Adv#: 6:16-01277 Reynoso v. Goodman et al
EH
Docket 54
- NONE LISTED -
Debtor(s):
Douglas Edward Goodman Represented By Samer A Nahas Edward T Weber
Defendant(s):
Douglas Edward Goodman Represented By Edward T Weber
Anne Louise Goodman Represented By Edward T Weber
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Joint Debtor(s):
Anne Louise Goodman Represented By Samer A Nahas Edward T Weber
12:30 PM
Movant(s):
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Theresa Mann Represented By Andrew L Leff
Jose Pastora Represented By
Andrew L Leff
Plaintiff(s):
Mark & Natasha Reynoso Represented By Michael J Hemming
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Adv#: 6:17-01213 Winegardner Masonry, Inc. v. Salazar
EH
Docket 1
- NONE LISTED -
Debtor(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Defendant(s):
Julie Lynn Salazar Represented By
Joseph C Markowitz
Plaintiff(s):
Winegardner Masonry, Inc. Represented By William A Smelko
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Also #4 EH
Docket 186
12/21/17
Background:
On October 24, 2014, Vivian Munson ("Debtor") filed a Chapter 13 voluntary petition. On December 5, 2014, Debtor’s Chapter 13 plan was confirmed. Six days later, the case was dismissed for failure to file copies of payment advices. The next day, Debtor filed a motion to vacate dismissal. On January 6, 2015, dismissal was vacated, and, three days later, another order confirming plan was entered. The plan has been modified once since confirmation.
On March 13, 2015, the IRS filed a claim in the amount of $73,494.83, of which amount $28,652.56 was identified as secured ("Claim 5"). On May 15, 2015, the IRS amended Claim 5 to assert a claim of $37,350.59, of which $20,231.20 was identified as secured. On March 4, 2016, the IRS again amended Claim 5, this time to assert a claim of $28,880.97, of which $20,761.34 was identified as secured. On November 2, 2017, Debtor filed an objection to Claim 5. On December 7, 2017, the IRS filed its opposition.
Debtor previously received a Chapter 7 discharge on September 2, 2014, and Debtor
12:30 PM
argues that the personal liability for Claim 5 was eliminated by that discharge. The IRS has responded by stating that Fed. R. Bankr. P. Rule 7001(6) requires Debtor to bring an adversary proceeding to determine the dischargeability of Claim 5.
Applicable Law:
Pursuant to 11 U.S.C. § 502(a), a proof of claim is deemed allowed unless a party in interest objects. Absent an objection, a proof of claim constitutes prima facie evidence of the validity and amount of the claim under Federal Rule of Bankruptcy Procedure ("FRBP") 3001(f). See Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). When a party files an objection to a proof of claim, that filing "creates a dispute which is a contested matter" within the meaning of FRBP 9014 and the Court must resolve the matter after notice and opportunity for hearing upon a motion for relief. Id.
When a creditor has filed a proof of claim that complies with the rules (thereby giving rise to the presumption of validity), the burden shifts to the objecting party who must "present evidence to overcome the prima facie case." In re Medina, 205 B.R. 216, 222 (9th Cir. B.A.P. 1996). To defeat the claim, the objecting party must provide sufficient evidence and "show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell, 223 F.3d at 1039 (quoting In re Holm, 931 F.2d 620, 623 (9th Cir. 1991)). "The objector must produce evidence, which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency." Lundell, 223 F.3d at 1040 (quoting In re Allegheny Int’l, Inc., 954 F.2d 167, 173-74 (3d Cir. 1992)). If the objecting party produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts back to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re Consol. Pioneer Mort, 178 B.R. 222, 226 (9th Cir. BAP 1995), aff’d, 91 F.3d 151 (9th Cir. 1996) (quoting Allegheny Int’l, 954 F.2d at 173-74). The ultimate burden of persuasion remains at all times on the claimant. See Lundell, 223 F.3d at 1039; see also Holm, 931 F.2d at 623.
12:30 PM
Analysis:
Fed. R. Bankr. P. Rule 7001(6) states:
An adversary proceeding is governed by the rules of this Part VII. The following are adversary proceedings:
(6) a proceeding to determine the dischargeability of debt.
The above provision not only applies to creditors who wish to have a debt determined to be non-dischargeable, it also applies to debtors who wish to secure a determination that a debt is dischargeable. See, e.g., In re Galey, 230 B.R. 898 (Bankr. S.D. Ga.
1999); In re Horn, 169 B.R. 218 (Bankr E.D. Okla. 1994) (pre-petition tax liability); see also 10 Collier’s on Bankruptcy ¶ 7001.07 (16th ed. 2016) ("Similarly, if there is a question as to whether a particular debt is excepted from discharge, the debtor may desire to have the court determine its dischargeability. In either instance, the Bankruptcy Rules require that the request for such a determination take the form of an adversary proceeding.").
Here, the IRS has asserted Fed. R. Bankr. P. Rule 7001(6) in its opposition and, therefore, the procedural requirement is not waived. If Debtor wishes to have Claim 5 deemed to have been previously discharged, Debtor is required to file an adversary proceeding.
Tentative Ruling
12:30 PM
The Court is inclined to DENY the motion.
APPEARANCES REQUIRED.
Debtor(s):
Vivian Munson Represented By Amanda G Billyard Andy C Warshaw
Movant(s):
Vivian Munson Represented By Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
EH
Docket 180
- NONE LISTED -
Debtor(s):
Vivian Munson Represented By Amanda G Billyard Andy C Warshaw
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
From: 12/14/17 Also #6
EH
Docket 46
12/14/17
Per the consent of the parties, which was informally provided to the Court via electronic mail, the hearing on the Objection to Claim is CONTINUED to 12/21/17 at 12:30 p.m.
APPEARANCES WAIVED.
Debtor(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Movant(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Julie Lynn Salazar Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
12:30 PM
Also #5 EH
Docket 0
- NONE LISTED -
Debtor(s):
Julie Lynn Salazar Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ramon Gabriel Alvarez Represented By Devin Sawdayi
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Bouchra Bernichi Represented By Nicholas S Nassif
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Also #10 EH
Docket 22
The Court is inclined to DENY the motion for a variety of reasons. First, the motion identifies the hearing time as "12:30 a.m.". Second, while the proof of services states "[c]ertified mail required for service on a national bank," Debtor has served national banks by regular mail. Third, Debtor has not served the secured creditors pursuant to Fed. R. Bankr. P. Rule 7004. Finally, section 3 of the motion, which identifies the liens, states that the junior lien "is not to be avoided," meaning that the motion technically does not request any relief.
APPEARANCES REQUIRED.
Debtor(s):
Roman Negrete Manrriquez Represented By Patricia A Mireles
Movant(s):
Roman Negrete Manrriquez Represented By Patricia A Mireles Patricia A Mireles Patricia A Mireles Patricia A Mireles
12:30 PM
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Also #9 EH
Docket 0
- NONE LISTED -
Debtor(s):
Roman Negrete Manrriquez Represented By Patricia A Mireles
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
EH
Docket 0
- NONE LISTED -
Debtor(s):
Ernesto Sanchez Represented By Jerry Rulsky
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Beverley June Marshall Represented By Arthur H Lampel
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Martin Leland Napier Represented By Aaron Lloyd
Joint Debtor(s):
Clasina Hendrika Napier Represented By Aaron Lloyd
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Walter Roman Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Helen Roque Robles Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Ryan Eddie Hinojosa Represented By Steven A Alpert
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Edward Uy Hidalgo Represented By Keith F Rouse
Joint Debtor(s):
Trixie Quijada Represented By Keith F Rouse
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Jose E. Toledo Represented By Moises A Aviles
Joint Debtor(s):
Antonia Toledo Represented By Moises A Aviles
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Cynthia Ramos Represented By Hayk Grigoryan
Trustee(s):
Rod Danielson (TR) Pro Se
12:30 PM
Docket 0
- NONE LISTED -
Debtor(s):
Rodrigo Fernando Ramirez Guinea Represented By
James Geoffrey Beirne
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 143
- NONE LISTED -
Debtor(s):
Richard Joseph Adams Sr. Represented By Steven A Alpert
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 92
- NONE LISTED -
Debtor(s):
Jacob J Cannon Represented By Lisa H Robinson John F Brady
Joint Debtor(s):
Danielle M Cannon Represented By Lisa H Robinson John F Brady
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 179
- NONE LISTED -
Debtor(s):
John Alexander Jay Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 144
- NONE LISTED -
Debtor(s):
Jimmie Lee Bracy Jr. Represented By Gregory M Shanfeld
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
EH
Docket 55
- NONE LISTED -
Debtor(s):
Sylvia Jimenez Gomez Represented By Leonard J Cravens
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 86
- NONE LISTED -
Debtor(s):
Bonnie Jean Conant Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 123
- NONE LISTED -
Debtor(s):
Cresencio Ramirez Ramirez Represented By John F Brady
Joint Debtor(s):
Maria Olga Ramirez Represented By John F Brady
Movant(s):
Rod (MH) Danielson (TR) Pro Se
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
EH
Docket 102
- NONE LISTED -
Debtor(s):
Garan Bales Represented By
Amanda G Billyard Andy C Warshaw
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 54
- NONE LISTED -
Debtor(s):
Darna Poole Represented By
Todd B Becker
Joint Debtor(s):
Jerry Poole Represented By
Todd B Becker
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 66
- NONE LISTED -
Debtor(s):
James Leonard Blow Jr. Represented By Jonathan D Doan
Joint Debtor(s):
Amanda Joyce Atkinson-Blow Represented By Jonathan D Doan
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
EH
Docket 40
- NONE LISTED -
Debtor(s):
Fabiola Puttre Represented By Paul Y Lee
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 27
- NONE LISTED -
Debtor(s):
Brenda Fleming Bell Represented By Thomas Watkins
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
EH
Docket 42
- NONE LISTED -
Debtor(s):
Matthew Thomas Harper Represented By Norma Duenas
Joint Debtor(s):
Robin Jean Harper Represented By Norma Duenas
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 122
- NONE LISTED -
Debtor(s):
Edward Edmund Zozaya Represented By Dana Travis
Joint Debtor(s):
Georgia Parrilla Zozaya Represented By Dana Travis
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
EH
Docket 32
- NONE LISTED -
Debtor(s):
Alexis I Barahona Represented By Christopher J Langley
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
EH
Docket 103
- NONE LISTED -
Debtor(s):
Pamula Raye St Dennis Represented By Cynthia A Dunning
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
From: 7/24/17, 8/31/17, 10/5/17, 11/30/17, 12/14/17
EH
Docket 26
- NONE LISTED -
Debtor(s):
Gabriel Cruz Represented By
Christopher J Langley
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 69
- NONE LISTED -
Debtor(s):
Frank A Horzen Represented By Paul Y Lee
Joint Debtor(s):
Barbara A Horzen Represented By Paul Y Lee
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 39
- NONE LISTED -
Debtor(s):
Guillermo Zamudio Represented By Paul Y Lee
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
EH
Docket 25
- NONE LISTED -
Debtor(s):
Howard Lamar Sanders Represented By
D Justin Harelik
Joint Debtor(s):
Jenique B. Sanders Represented By
D Justin Harelik
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 34
- NONE LISTED -
Debtor(s):
William J Schaefer Represented By Patricia M Ashcraft
Joint Debtor(s):
Jennifer L. Schaefer Represented By Patricia M Ashcraft
Trustee(s):
Rod Danielson (TR) Pro Se
12:31 PM
Docket 21
- NONE LISTED -
Debtor(s):
Chadwick Otieno Ochieng Represented By John F Brady
Trustee(s):
Rod Danielson (TR) Pro Se
1:30 PM
MOVANT: SIMON E WILLIAMS
From: 12/19/17 EH
Docket 4
Service: Proper Opposition: None
The Court is inclined to DENY the motion. First, notice to the law firm that represented the secured creditor (the primary party at whom the motion is directed) does not include the handling lawyers’ names. As such notice is problematic as it will be delayed getting into the proper hands. Second, the prior case was not dismissed because of an ordinary payment default, as the motion implies, but because of failure to turn over tax refunds. Third, Debtor does not need the stay to seek a loan modification. Last, any equity in the Debtor’s residence will be recovered, on sale by the Trustee (not the Debtor) for the benefit of the estate, and the Trustee has not joined this request. Thus, Debtor has failed to rebut the presumption of lack of good faith as to U.S. Bank pursuant to § 362(c)(3)(C)(ii).
APPEARANCES REQUIRED.
Debtor(s):
Simon E. Williams Represented By Jenny L Doling
1:30 PM
Movant(s):
Simon E. Williams Represented By Jenny L Doling Jenny L Doling
Trustee(s):
Karl T Anderson (TR) Pro Se
1:30 PM
MOVANT: KATRINA RENEE MCDOWELL
From: 12/19/17 EH
Docket 12
Service: Proper Opposition: None
The Court is inclined to DENY the motion. The Court notes that pursuant to § 362(c) (3)(C)(i)(II)(cc) this case was presumptively filed in bad faith as to all creditors, and Debtor has not provided clear and convincing evidence to the contrary. Specifically, Debtor’s previous Chapter 13 case was dismisses approximately one year into the plan for failure to make plan payments. Debtor has generally averred that her income has increased and that she is capable of making plan payments, and that her income will increase once she passes the state bar examination. Such a general assertion, however, fails to satisfy the "clear and convincing" standard of § 362(c)(3)(C).
APPEARANCES REQUIRED.
Debtor(s):
Katrina Renee McDowell Represented By Jenny L Doling
1:30 PM
Movant(s):
Katrina Renee McDowell Represented By Jenny L Doling
Trustee(s):
Rod (MH) Danielson (TR) Pro Se
2:00 PM
EH
Docket 39
- NONE LISTED -
Debtor(s):
Shawn Michel Smigel Represented By Jenny L Doling Summer M Shaw
Trustee(s):
Robert Whitmore (TR) Represented By Julie Philippi Todd L Turoci