What If 3rd Party Ignores Your Subpoena For Documents?

You are in an adversary and need documents from a third person (not a party to the lawsuit).  You issue upon him a subpoena with the discovery request for documents (subpoena duces tecum).  He ignores it.  What do you need to do?  If your knee-jerk reaction was “…I’d file a motion to compel!” then you’d be wrong.  The answer is ….

Read more…

Burden of Proof – Preponderance v. Clear and Convincing

I had coffee with an evidence professor and after we finished discussing my wife’s homemade burrata, we moved onto burden of proof.   He reminded me, there are 2 parts the plaintiff has to establish — (a) burden of production and (b) burden of proof.

The first goes towards whether the plaintiff is able to show evidence to prove their case (i.e. did you put forth any documents, witnesses, tangible items?).  The second goes towards whether what you put forth reaches the level of persuasion necessary to convince the court you should win (see below).  A good way the professor summarized it is the first part is “what did plaintiff actually show?” and the latter is “was it enough?” Albeit it looks obvious, he said most plaintiff’s do not meet the first burden which should automatically preclude them from meeting the second.

In adversary proceedings re: 523/727, plaintiff must persuade the court by preponderance of the evidence which asks “is it more likely than not that what plaintiff says to be true or not?”  (~51%).  Clear and convincing standard is higher and asks “is it substantially likely that what plaintiff says to be true or not?) (~70%).

I had essayist Chris Hitchen’s quote written in my law school notebook — “what can be asserted without evidence can be dismissed without evidence.”  This has come to be called Hitchens’s Razor (like Ockham’s razor).

Personal Liability for Business Sales Tax – What Was The Point Of Having Corporation?

You can be held personally liable for the unpaid sales or use tax of your corporate business.   Bankruptcy does not solve this.

For instance, you own a retail business and get audited by the state.  The Board of Equalization says “your business owes $100,000 in sales tax that you failed to send to us.”  You decide to close the business and walk away because you cannot pay that.  The state can assess that $100,000 liability against you personally!  You will then complain to me “…but I had a corporation, isn’t a corporation supposed to protect me?  what was the point of having a corporation?!”

Then you calm down and say “….ok, I will file chapter 7 bankruptcy.”  The state can hold the “responsible person” personally liable.  The definition of “responsible person” is broad and can include the business’s CPA!  The standard is if the “responsible person” willfully fails to pay the tax.

Let’s take a look at the law and break it down….

Here is the California law on this… (I parsed it out). Read more…

California Lawyers Association Annual Meeting – September 12-15, 2018 in San Diego

This meeting previously was the California Bar Assn annual meeting.  The MCLE arm of the state bar however separated from the state bar effective the beginning of this year calling itself the California Lawyers Association.  The CLA education programs this year can be found here.  No bankruptcy programs but there are several programs that look interesting including several ethics programs.

The purpose of this letter … is to provide notice of a current crisis [In the Eastern District]

Since not all of us are members of the Eastern District, I wanted to share a letter signed by all nine sitting district court judges in the Eastern District. I have attached a copy to this blog. Judgeship+Letter+June+2018

Read more…

What did you spend $140,000 on? “Wine, Women, and Song”

Section 727(a)(5) says you can be denied a discharge if you (debtor) cannot explain how you lost your assets.  One court in Connecticut denied a 70+ year old debtor a discharge when he said he spent $140,000 on “wine, women and song” and carried all that money in rolled up one hundred dollar bills.  The court said that is dubious.  Regardless, I would like to meet this gigolo!

“Notice” per Rule 2002 versus “Service” per Rule 7004

Some practitioners give “notice” of their contested motion on a corporation when they have to “serve” it.  What’s the difference?  Let’s take a look….

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2018 Honor Roll Reception July 21, 2018

Email this morning from Barbara Sanchez, Neighborhood Legal Services

Good morning!

In recognition of your support of pro se litigants, the United States Bankruptcy Court invites you to the 2018 Honor Roll reception.

This year’s reception is sponsored by the CDCBAA, and will be held immediately prior to the Fifth Annual James T. King Bankruptcy Symposium.  Please see the attached invitation for further details. Pro Bono Invitation-2018   To attend, please RSVP to Jennifer_Kohout@cacb.uscourts.gov by July 17, 2018.

Your willingness to volunteer your time and expertise provides a tremendous resource for Self-Help visitors, giving them direction, comfort, and relief in a difficult time. Please allow us to express our appreciation prior to the James T. King event.

With sincere thanks for all you do,

Barbara

Resnik Hayes Moradi LLP Firm Announcement

Matt Resnik, Jon Hayes and Roksana Moradi-Brovia are happy to announce the opening of their new firm.

Attorneys are:

Matthew D. Resnik*
M. Jonathan Hayes*
Roksana D. Moradi-Brovia*
Russell Stong (Los Angeles Office)
David Kritzer
Pardis Akhavan

*Certified Bankruptcy Specialist, State Bar of California, Board of Legal Specialization

Paralegals are:

Los Angeles Office

Susie Segura
Max Bonilla
Rudy Segura

Encino Office

Rosario Zubia
Priscilla Bueno
Ja’Nita Fischer
Rebeca Benitez

Resnik Hayes Moradi LLP will continue to represent debtors in all chapters of bankruptcy.  We will also represent creditors and defendants in all types and forms of bankruptcy litigation. We also represent trustees and the occasional chapter 11 creditor’s committee.

Resnik Hayes Moradi LLP will continue to represent homeowners in wrongful foreclosure litigation, all parties in real estate litigation and other civil litigation, and landlords and tenants in unlawful detainer litigation.

Jon Hayes will continue to represent all parties in appeals, bankruptcy as well as state court appeals.  He will continue to be a pro bono mediator as his time permits. Read more…

Is Fraud under California Law the Same as Fraud under 523(a)(2)? Yes says Judge Maureen Tighe.

In Moussighi v. Talasazan (In re Talasazan), 1:16-ap-01119-MT (Bkrcy June 2018, C.A. Cal Tighe J.), Judge Tighe said,

Fraud under California law and § 523(a)(2)(A) are identical for purposes of collateral estoppel. In re Younie, 211 B.R. 367, 373 (B.A.P. 9th Cir. 1997), aff’d, 163 F.3d 609 (9th Cir. 1998); In re Jung Sup Lee, 335 B.R. 130, 136 (B.A.P. 9th Cir. 2005).

This came up in an argument I had with someone recently re res judicata.  I stated that a state court judgment that says ONLY “Plaintiff wins $1 million based on the fraud of defendant,” is res judicata in bankruptcy court whether entered by default or not.   I was told I was mistaken in no uncertain terms because fraud under California law is not the same as fraud under 523(a)(2).  Wrong!

By the way, the judgment example above IS res judicata as to the amount owed in any event – at least for claims purposes.  The typical state court judgment says “Plaintiff wins $1 million” (nothing else).  Collateral estoppel in that case as to fraud still MIGHT apply depending on whether it was actually litigated etc.  Underlying documents, rulings etc are needed.  But the judgment ITSELF is res judicata as to how much defendant/debtor owes the creditor.  That statement does NOT mean that if there was fraud, the damages for fraud are $1 million.  But it does mean debtor owes creditor $1 million (which is discharged unless 523(a) applies).

The Talasazan matter has an interesting twist.  The debtor moved for summary judgment on the grounds that fraud was litigated in state court and the ruling was in the debtor’s favor and therefore could not be relitigated.  The problem is that the state court judge did not say that.   Judge Tighe wrote:

“[W]hile fraud was pled, argued, and briefed after trial, the Third Amended Judgment does not include fraud in the list of causes of action on which Plaintiffs prevailed.

It appears that the Superior Court ruled in Plaintiffs’ favor on the negligent misrepresentation cause of action rather than fraud.

For purposes of collateral estoppel, as detailed below, the Superior Court’s silence with respect to the fraud action, in the context of undisputed evidence from both sides that the issue was fully litigated, was a ruling in favor of the Debtor and not the Plaintiffs.”