All posts in Courts

Where Does The Word “Bankruptcy” Come From?

There are two possibilities according to BankruptcyData:  the first and most recognized is that “bankruptcy” is a combination of Bancus (latin for bench or table) and Ruptus (broken).  Back in the days a banker would do his trading on an open marketplace bench.  If the banker would no longer be able to meet his obligations then his bench was physically broken as a symbolic gesture to show his failure and inability to negotiate or do business.  This phrase carried over to Italy where the term morphed into “banco rotto” which means broken bank.  The other source of origin for the word is believed to be from the French “banque route” which means a table trace which was a metaphor for a sign left at the banker’s table that was once in business but not is gone.

Will the Retirement of Anthony Kennedy Change the Makeup of the Court?

I could sit for hours and listen to Prof.  Erwin Chemerinski talk about anything.  He did his Review of the Supreme Court last week for the 9th Circuit Judicial Conf.  Before he spoke, Judge Jay Bybee put a whole bunch of statistics about the last Supreme Court term on the screen.  One statistic that kind of jumped out is that on every 5-4 vote last term, Kennedy voted with the “conservatives.”  That suggests that replacing Kennedy with a “conservative” judge will not change, significantly for sure, the judicial makeup of the court.

When Chemerinski spoke then he commented on that fact and said that Kennedy typically joined the “liberals” of the court in five specific areas and in those areas, the new makeup will be significant.  The five areas are:

  • Abortion
  • Affirmative Axtion
  • Gay rights
  • Exclusionary rule
  • Limits on the death penalty

More on Reaffirmation Agreements

I had a short very enlightening conversation on reaffirmation agreements with a bankruptcy judge at the 9th Circuit Judicial Conf last week.  The conversation started with my comment at the program I was doing that I don’t sign – ever – the attorney declaration in 524(c)(3).  The conversation was about the consequences of not signing it.  I now have a new way of looking at the whole process.

Section 524(c) states that a reaffirmation agreement is not enforceable unless:

(3) such agreement has been filed with the court and, if applicable, accompanied by a declaration or an affidavit of the attorney that represented the debtor during the course of negotiating an agreement under this subsection, which states that—
(A) such agreement represents a fully informed and voluntary agreement by the debtor;
(B) such agreement does not impose an undue hardship on the debtor or a dependent of the debtor; and
(C) the attorney fully advised the debtor of the legal effect and consequences of—
(i) an agreement of the kind specified in this subsection; and
(ii) any default under such an agreement;

(5) the provisions of subsection (d) of this section have been complied with; and
(6) (A) in a case concerning an individual who was not represented by an attorney during the course of negotiating an agreement under this subsection, the court approves such agreement as—

(i) not imposing an undue hardship on the debtor or a dependent of the debtor; and
(ii) in the best interest of the debtor.

So far so good.  If I sign the declaration, the agreement is enforceable.  If I don’t, it’s unenforceable.  Can’t the court approve it anyway?  That is certainly what I and I’m sure 99% of consumer bankruptcy lawyers think.  But the debtor is still “represented by an attorney” – me – so (c)(6) doesn’t seem to apply. Read more…

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. Read more…

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…

“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….

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.”

Public Counsel Reaffirmation Clinic – June 28, 2018

Email from Christian Cooper,

Did you know that bankruptcy filers with auto loans can not only keep their cars, but may be able to lower their payments substantially? Learn how at Public Counsel’s “Reaffirmation and Redemption in Chapter 7 Bankruptcy” MCLE program next Thursday in Downtown L.A. There is no cost to attend, and lunch is provided.

More info: surveymonkey.com/r/reaffmcle

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Judge Zurzolo Brown Bag on May 14, 2018

Judge Vincent Zurzolo will host a Brown Bag discussion on Monday May 14th at 12:15 p.m. in his courtroom at the Los Angeles Division.

The specific topic is his new procedure to advance the hearing date on confirmation of a chapter 13 plan for chapter 13 cases over which he presides.

In addition, attendees can ask questions about chapter 13 procedures or other general court matters. Please see the flyer and 4 exhibits that will be discussed by clicking the link below.

To view this announcement and the exhibits please click here.