Short Bio of Judge Maureen Tighe from the Insolvency Law Committee

The link to the bio is here.  The link also has the past bios created by the ILC.

Nice Explanation from the BAP of the Mechanics of Property Tax Sales in California

Judge Jury lays out the process very nicely in County of Imperial Treasurer Tax Collector v. Stadtmueller (In re RW Meridian LLC), — B.R. — (9th Cir. BAP February 2017)

California’s statutory scheme for tax sales Taxes on real property are secured by and serve as a lien on the real property for which they are assessed. Secured property taxes that remain unpaid at the close of the fiscal year (June 30) are deemed to be in default. Tax Code § 3436.  Properties which have been tax defaulted for a minimum of five years are subject to the county tax collector’s power to sell them to satisfy the outstanding defaulted taxes. Tax Code § 3691. [per FN 5, For nonresidential commercial property, the period is three years. Tax Code § 3691]  Sale is to the highest bidder at a public auction.  Public auction includes the internet. Tax Code § 3693.  Various notices and publication are required prior to the tax sale. Tax Code §§ 3351, 3361, 3371, 3701, 3704.7. Read more…

Nice Definition of “Clear Error” from the BAP

Sitting here on Saturday morning reading unpublished BAP decisions.  Great quote on what does clear error mean.

“To be clearly erroneous, a decision must strike us as more than just maybe or probably wrong; it must . . . strike us as wrong with the force of a five-week-old, unrefrigerated dead fish.” Papio Keno Club, Inc. v. City of Papillion (In re Papio Keno Club, Inc.), 262 F.3d 725, 729 (8th Cir. 2001) (quoting Parts & Elec. Motors, Inc. v. Sterling Elec., Inc., 866 F.2d 228, 233 (7th Cir. 1988)); see Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985) (A factual finding is clearly erroneous if, after examining the evidence, the reviewing court “is left with the definite and firm conviction that a mistake has been committed.”).  The bankruptcy court’s choice among multiple plausible views of the evidence cannot be clear error. United States v. Elliott, 322 F.3d 710, 714 (9th Cir. 2003).  (my emphasis added)

Diamond v. Mesisca Riley & Kretenberg, LLP (In re Castle Trading, Inc.)(unpublished) CC-16-1322-FTaKu, 2:13-bk-15021-BB (BAP May 31, 2017)

In re Sundquist – $45 million in Punis Sounds About Right to Me

I hereby nominate Judge Christopher Klein for Super Judge.  This is my brief of the 109 page Memorandum.

Sundquist v. Bank of America (In re Sundquist) 566 B.R. 563, 14-02278 CN (Bkrtcy, E. D. Cal. May, 2017) Klein, J.

Issue:   Given that Bank of America violated the automatic stay, what is the proper amount of damages under section 362(k)?

Holding:   Actual damages of $1,074,000 plus $5 million of punitive damages, further punitive damages awarded of $40 million payable to two consumer organizations and five law schools.

Judge Christopher Klein

The debtors here had attempted unsuccessfully prepetition to do loan mods with Bank of America.  They finally filed chapter 13 to stop the foreclosure sale.  Notwithstanding that it had notice, the bank conducted the foreclosure sale the next day anyway.  “Bank of America committed at least six further automatic stay violations by the end of August 2010 as it bulled forward.”  This included bringing an unlawful detainer.  About the same time, a different department of the bank recognized the error and notified the foreclosure company.  But upon receiving the three day notice, the debtors panicked and immediately moved.  “Although Bank of America knew on August 20, 2010, and beyond cavil by September 7, 2010, that the foreclosure would be rescinded, it did not withdraw the unlawful detainer action or tell the Sundquists the action would be dismissed.”  Six months later, the bank finally rescinded the foreclosure sale but did not tell the debtors nor their counsel.  The debtors learned about the rescission a month or two later and asked for the keys back.  The bank gave them the keys.  When they moved back into the property, the tress were dead, appliances gone, the place was ransacked, and the HOA had assessed a $20,000 penalty for not taking care of the place.  The bank not only refused to pay for the damages but demanded that the debtors pay the mortgage for the time when it owned the property.  Read more…

9th Cir En Banc Gets It Right in Sunnyslope

The 9th Circuit en banc panel has reversed the three judge panel in Sunnyslope thankfully.  The issue was how to value a building that had restrictive covenants that reduced the value of the property to the debtor.  The en banc panel said that the words in section 506(a) that the value is “determined in light of the purpose of the valuation and of the proposed disposition or use of such property,” have meaning.  The previous panel and the dissent to the en banc ruling tried to squeeze the Supreme Court ruling on valuation of a truck in Rash into the valuation of a building with affordable care covenants.

It took me a while to understand the Rash argument.  I had a hard time getting past what seemed to be the obvious and straight forward language of the code.   Read more…

February 2017 Bar Pass Rates Announced

The announcement from the Bar with bar exam statistics is here.  The overall pass rate for the February 2017 exam was 34.5% (the lowest in over a decade for a February administration).  The in-state ABA first time pass rate average was 45% and the California Accredited Law School (CALS) first time pass rate average was 18%.

The University of West Los Angeles where I teach had a first time pass rate of 26% (5/19 examinees).     Read more…

Interview with Judge Alex Kozinski

The highlight of the Insolvency Conference on Coronado Island this year was the interview of Judge Alex Kozinski on Friday afternoon.  Judge Peter Bowie (Ret.) started off by asking Judge Kozinski for a word that describes who he is and what he is all about.  The word? – handsome!  He asked Judge Kozinski about his early life in Romania and his life after that in Vienna – when he first tasted ice cream and “immediately became a capitalist.”

After clerking for 9th Circuit Judge Anthony Kennedy and US Supreme Court Justice Warren Burger, his first job was with Quittner, Stutman, Triester & Glatt.  He was sworn in as a US citizen sometime in those years by Judge Harry Pregerson, then a district court judge, now his colleague on the 9th Circuit.   Judge Kozinski gushed about what a great judge William Lazarow was and determined to be like him.  After joining the 9th Circuit himself in 1985 at 35 years old, he somehow wangled himself the the job of running Judge Lisa Fenning’s calendar while she was off on maternity leave.   He described the effort as “the hordes coming at your.”  He was not derisive in the slightest.  The bankruptcy world has a lot of people who need help and the bankruptcy judge deals with that every day.  He said that bankruptcy “brings order from chaos.”  For that reason it is important.

There is a great hour-log interview with Judge Kozinski on youtube here.  Pretty fun.

29th Insolvency Conference May 2017

The California Bankruptcy Forum was kind to permit me to audit the Insolvency Conference this weekend on Coronado Island.  As a member of the State Bar Bankruptcy Specialist Commission, I am permitted to audit programs.  About a third of the Central District Bankruptcy Judges were there I would guess and several judges from other districts in California.  The value of sitting at tables and around the chairs in the lobby with the judges you appear in front of every day cannot be overstated.  The programs were great.  I highly recommend it.  Next year the meeting will be somewhere around Lake Tahoe.

Especially fun was the Brutzkus Gubner clambake at the Hotel Del Coronado on Friday night.  A special thanks to Steve Gubner for that.

Adequate Protection and Takings Issue?

Ever thought about “adequate protection” as being a 5th Amendment Takings Violation?

I never thought about it like this, but the bankruptcy concept of “adequate protection” presents an inherent constitutional 5th amendment takings issue!  Doesn’t it?  Think — a creditor who has a lien has both (a) right to payment [contract right] and (b) an interest in property of the debtor securing that right to payment [property right].   We all know that the Fifth Amendment protects this interest in property such that a persons interest in property cannot be deprived without due process or just compensation.

So my nerdy bankruptcy friends — isn’t Congress’s exercise of its bankruptcy powers under Article I subject to the Fifth Amendment?  In dealing with whether or not a creditor’s interest is “adequately protected” is Congress not prospectively regulating your property rights?   The answer after the jump….

Read more…

LACBA Event – Judge Ernest M. Robles: Pet Peeves and Best Practices 6/15/17

Join United States Bankruptcy Judge Ernest M. Robles and moderator J. Scott Bovitz as they discuss Judge Robles’ pet peeves, reveal the best way to handle the most common motions/trials in Judge Robles’ court, and make suggestions for improving practice in consumer and business cases.

Speakers:
Hon. Ernest M. Robles
, United States Bankruptcy Court
J. Scott Bovitz, Bovitz & Spitzer

Read more…