Note from Nancy Clark, President of cdcbaa

Central District Consumer Bankruptcy Attorneys Assn.

Dear Members:

 As the 2014 Holiday Season gets underway, it is never too soon to renew your CDCBAA membership.  We have had a wonderful 2014.  Our seminars have included the Eighth Annual Review of the Ninth Circuit, When is Conversion Kosher, Who is the US Trustee, Meet the Chapter 13 Trustee’s Attorneys,Meet the Judge’s Clerks, Ask the Chapter 7 Trustee and Litigating Contempt. Our first Annual James T. King Bankruptcy Symposium: In Re Bellingham from the Insiders was a great success.  As always, the Earle Hagen Golf, Tennis and Poker Tournament was not only a great success raising a record amount of money for Public Counsel but it was also a lot of fun.  Finally, our Annual Calvin Ashland Award Dinner was well attended by not only our members but also the judges and trustees and honored our soon to be appointed Chief Judge Sheri Bluebond.

 Desmond Hayes has been hard at work on our website and has made a new renewal page for 2015.  He has added a slide to the home page.  The new page also allows members to pay for other members.  There is a link next to the paypal button that allows members to search for other members to add to their order.

 The 2015 CDCBAA Board is already hard at work preparing for 2015.  Jonathan Hayes will kick off our seminars on January 24, 2015 with the Ninth Annual Review of the Ninth Circuit with Judge Victoria Kaufman and newly appointed Judge Martin Barash.  Roksana Moradi is hard at work putting together seminars on HOAs, Drafting Effective Settlement Agreements, and the Unscheduled Lawsuit.  Jonathan Hayes is hard at work on the second Annual James T. King Bankruptcy Symposium which will be titled “Dear Congress!”  Stella Havkin and Michael Gouveia are hard at work on our next CDCBAA Newsletter that will include valuable information.  And if that were not enough, our listserve is an invaluable opportunity to share interesting issues with fellow members.

 For all of the reasons listed above, please consider renewing your CDCBAA membership early.  For those of you looking for a wonderful holiday gift for a colleague, consider the gift of CDCBAA membership.  Finally, for those loyal members, consider introducing colleagues to the CDCBAA and encourage them sign up for what promises to be a fantastic 2015.

 Happy Holidays to you all!!!

Nancy B. Clark
Attorney at Law
Borowitz & Clark, LLP

Passing the Gavel – Judge Sheri Bluebond to Take Over as Chief Judge on January 29, 2015


Great Article on Bankruptcy 101 by Retired Judge Lisa Hill Fenning

This article, written for the Association of Corporate Counsel, is directed at “investors.”  You can access it here.

Marty Barash appointed to be the new Bankruptcy Judge in Woodland Hills.

Marty Barash has been appointed by the 9th Circuit to be the new Bankruptcy Judge in Woodland Hills.  He is a great choice.  He is a partner at Klee, Tuchin, Bogdanov & Stern LLP.  He should actually take the bench in March – April 2015.

Until then, the two remaining judges, Maureen Tighe and Victoria Kaufman, will be doing double duty with the help of the retired judges there.  The problem is that the retired judges have no staff.  So the staffs of the two sitting judges must do the work that was previously done by three staffs.

Schwartz-Tallard to be Reviewed En Banc by 9th Circuit

The 9th Circuit has decided to review the Schwartz-Tallard case en banc.  The issue in Schwartz-Tallard is the right of a debtor to get attorneys fees for a contempt/violation of the automatic stay.  Sternberg v. Johnson says the right to attorney’s fees ends when the contempt ends.  After that the “American rule” applies, i.e., no attorneys fees.  Schwartz-Tallard said that the debtor can get attorneys fees defending an appeal of an Order for Contempt even though the contempt has ended.  The Order granting en banc vacates the 9th Circuit ruling.  I suspect the oral argument will be some time in March.

B.A.P. Holds Judge Does Not Have Authority To Prevent Debtor From Adding An Exemption to the Schedules (In re Gray et al., 9th Cir. B.A.P. 2014)

The 9th Circuit B.A.P. recently held that a bankruptcy judge does not have the authority to prevent a debtor from adding an exemption to his or her court papers based solely on the judge’s finding they had acted in bad faith.  The Panel intricately cites U.S. Supreme Court’s decision in Law v. Siegel in reaching its conclusion.

Summary holding:  Bankruptcy courts have no discretion under federal law to deny debtors leave to amend their exemptions absent express statutory authority.  The panel reversed a ruling to disallow an amended exemption.   In re Gray et al.; Gray et al. v. Warfield, No. 13-1502, 2014 WL 6972522 (B.A.P. 9th Cir. Dec. 9, 2014).

Time to Calendar Seventh Annual Earle Hagen Golf Tournament

An email from Jeff Hagen:

To Everyone:

The Earle Hagen Memorial Golf Tennis And Poker Tournament Committee wishes you and yours the most joyful, safe, healthy and prosperous of HOLIDAYS and NEW YEAR.  May your 2015 exceed all of your expectations.

That’s it…thanks…and…oh!…I almost forgot…the SEVENTH Annual Earle Hagen Memorial Golf, Tennis And Poker Tournament is coming on Monday September 21, 2015…at the Porter Valley Country Club in Northridge.

Note that we changed the date–not so much because we really wanted to have it on the same day as the autumnal equinox, although that was a big factor, but so as to not conflict with the National Conference Of Bankruptcy Judges…so the Tournament is NOT on Monday September 28, 2015…or Monday September 28, 2014…it’s on Monday September 21, 2015.

That’s only 249 days away! The way time flies–and you can quote me on that–it’s practically right around the corner!  Sign up early!

Future blasts will include a flyer, which itself will include a registration form.  Can you just show up unannounced, i.e., sans reservation?  Of course!  Everyone who brings enough money is welcome!

Read more…

Tentative Ruling Gives Nice Lesson on Annulment of the Stay

More excellent work from Judge Scott Clarkson:

United States Bankruptcy Court
Central District of California
Judge Scott Clarkson, Presiding

Tuesday, December 09, 2014 Hearing Room 126
10:00 AM

6:14-22665 James Joseph Panzarello and Hilyam Panzarello Chapter 7

Motion for Relief from Stay


Tentative for 12/9/2014 is to GRANT pursuant to 11 U.S.C. §362(d)(1) with 4001(a)(3) waiver.  The request for an annulment is GRANTED.

This matter was continued from 11/25/2014 where debtor appeared, but filed no written opposition. It is the Debtor’s burden, even on annulment, to file a timely opposition.

Section 362(d) provides authorization to annul the automatic stay, which, in effect, retroactively ratifies or validates acts that otherwise violated the stay. Lone Star Sec. & Video, Inc. v. Gurrola (In re Gurrola), 328 B.R. 158, 172 (9th Cir. BAP 2005). Determining whether cause exists to annul the stay retroactively a case-by-case inquiry based on a balance of the equities. Nat’l Envtl. Waste Corp. v. City of Riverside (In re Nat’l Envtl. Waste Corp.), 129 F.3d 1052, 1055 (9th Cir. 1997). In making this determination, the bankruptcy court considers 12 factors, including:
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 debtors 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;
12.Whether stay relief will promote judicial economy or other efficiencies. In re Fjeldsted, 293 B.R. 12, 25 (B.A.P. 9th Cir. 2003).

Read more…

Tentative Ruling on Contempt for Violation of the Discharge Injunction

Judge Ted Albert’s usual excellent work.

United States Bankruptcy Court
Central District of California
Judge Theodor Albert, Presiding
Courtroom 5B Calendar
Santa Ana
Tuesday, December 09, 2014 Hearing Room 5B
11:00 AM

8:10-23458 Carlos Antonio Bernal Chapter 7
#14.00 Order To Show Cause RE: Contempt Against *************

This is a hearing on the OSC re contempt issued by the court 10/29/14 at the request of the debtor.  There is proof of service upon attorney Silverstein but not as to the other alleged contemnor, Grand Commerce Center, LLC.  Only attorney Silverstein has responded.  First, the discharge injunction is effective as to all discharged debts.  While Attorney Silverstein alleges that he was not listed in the petition and schedules, the certificate of notice dated 9/26/10 suggests that his client was.  Moreover, in no-asset cases all debts are discharged whether listed or not.  In re Heilman, 430 B.R. 213, 218 (9th Cir. BAP 2010).  Therefore, every aspect of the garnishment obtained on a judgment issued after the 1/13/2011 is potentially a contempt.  But unlike stay violations which make all violations automatically void, violation of the discharge injunction is treated as contempt, so damages and penalties resulting must be considered in terms of the willfulness of the violation.  Attorney Silverstein tries to make an issue of the corporate vs individual status under §362(k), but this is misplaced since clearly the debtor (which is the only status that matters) is an individual, and discharge injunction violations are judged on a different standard anyway.  Attorney Silverstein submits a declaration indicating he knew nothing about the bankruptcy and stopped immediately the garnishment once he learned of it. He also mentions the monies garnished were refunded or never obtained (it is unclear which).  But the exact timing of all of this is left vague.  The court notes that several wage statements are attached as exhibits showing that garnishments continued for several pay periods including as late as 9/26, although Mr. Spector’s letter to attorney Silverstein is dated August 8, 2014.  So, absent another explanation, it would seem at the very least that Attorney Silverstein was slow in responding. Also conspicuously absent in Attorney Silverstein’s papers is any recognition that ongoing garnishment imposes a real hardship on a debtor struggling to obtain his fresh start. Lastly, the court expects attorneys, particularly ones involved in debt collection practice who must know of these principles, will adhere to higher standards. Different considerations (and potentially higher consequences) may apply as to Grand Commerce, if service can be effected.

Damages equal to attorney’s fees and reopening fee incurred post discharge.

Self-Calendaring System for Judge Ahart Cases (U.S. Bankruptcy Court — Central District of California — San Fernando Valley Division)

Judge Ahart (U.S. Bankruptcy Court — Central District of California — San Fernando Valley Division) will retire in January of 2015 and Judges Tighe (“MT”) and Kaufman (“VK”) will divide up his cases by number, until the new judge takes the bench.

Please see attached instructions re self-calendaring pleadings for Judge Ahart cases. Beginning on January 1, 2015, NEW instructions for self-calendaring hearings are on page 5.

The Court has informed us that all Judge Ahart (“AA”) cases will remain “AA” in the case number: e.g., 14-bk-12345-AA. Hovever, MT or VK will hear all matters, all pleadings will be addressed to MT or VK, and mailed to MT or VK.