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Judgment creditor request for attorney’s fee for bankruptcy court efforts.

I found this in a tentative by the very thoughtful Judge Ernest Robles.  Can judgment creditors get attorneys fees for their efforts in bankruptcy court?  Yes, but they have to do it right.

In re Harris, 2:20-12839

B. The Attorneys’ Fees Motion is Denied

The Attorneys’ Fees Motion is denied without prejudice because the Court lacks jurisdiction to award attorneys’ fees under 42 U.S.C. § 1988 on account of the Judgment.

The Bankruptcy Court has jurisdiction over “all cases under title 11.” 28 U.S.C. § 1334(a). “Generally, in the bankruptcy context, the word ‘case’ is a term of art which refers to ‘that which is commenced by the filing of a petition; it is the “whole ball of wax,” the chapter 7, 9, 11, 12 or 13 case.’” Blevins Elec., Inc. v. First Am. Nat’l Bank (In re Blevins Elec., Inc.), 185 B.R. 250, 253 (Bankr. E.D. Tenn. 1995). Read more…

Watch 9th Circuit oral argument in the Taggart case

You might have thought Taggart was resolved by the Supreme Court, eh?  No “it goes on Judah,” from my favorite movie Ben Hur.

The Supreme Court reversed the prior ruling of the 9th Circuit in Taggart and sent it back to the 9th Circuit.  The 9th Circuit required new briefs, basically starting the appeal over.  They are back to reviewing the ruling by the BAP that the creditor here did not violate the discharge injunction when it asked for postpetition attorneys fees in state court litigation that had begun prepetition.  The BAP had ruled that the creditor had a reasonable belief that he was not violating the discharge injunction.  The 9th Circuit had affirmed saying it’s purely subjective, even if the subjective belief is unreasonable.  The Supreme Court reversed saying it is not purely subjective – the test is whether there is a fair ground of doubt.

Dan Geyser argues for the debtor.  You may recall he came to Los Angeles from his home in Texas last summer to do a program with Prof Dan Bussell and me for the Central District Consumer Bankruptcy Attorney’s Assn (cdcbaa).   He had just finished arguing four cases that term at the Supreme Court.  You can watch the oral argument here.  https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000017600

Consequences of leaving something out of the record on appeal

I have wondered what the consequences are of failing to include something in the record on appeal.  Here is a footnote from a recent BAP case.  I have read a lot of opinions and memorandums and have never seen this.  The BAP here just looked up what was missing and sort of snidely told the appellant that he’s lucky they are good guys.  I assume with the ease of looking things up these days, the result will likely be the same in future cases, meaning, no harm, no foul.

Zuckerman v. Crigler (In re Zuckerman), — B.R. —  (9th Cir. BAP  Mar, 2020)

Mr. Zuckerman omitted from his excerpts of the record the bankruptcy court’s prior ruling (“Ruling”) that included its reasoning for entering the Order on appeal and key evidentiary rulings.  As the omitted Ruling is a necessary portion of the record, we are entitled to presume that its contents are harmful to his position and to affirm or dismiss his appeal summarily.  See Rule 8018(b)(1); Cmty. Commerce Bank v. O’Brien (In re O’Brien), 312 F.3d 1135, 1137 (9th Cir. 2002); Gionis v. Wayne (In re Gionis), 170 B.R. 675, 680–81 (9th Cir. BAP 1994).  Nonetheless, we obtained a copy of the Ruling and will take judicial notice of it and other documents filed in the bankruptcy court’s dockets, as appropriate.  See Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).

What is a “contingent” debt for chapter 13 eligibility purposes

I love this definition from a recent BAP case, Fountain v. Deutsche Bank National Trust Company (In re Fountain), — B.R. —  (9th Cir. BAP  Mar, 2020)

A debt is contingent when “the debtor will be called upon to pay [it] only upon the occurrence or happening of an extrinsic event which will trigger the liability of the debtor to the alleged creditor.” Fostvedt v. Dow (In re Fostvedt), 823 F.2d 305, 306 (9th Cir. 1987). If “all events giving rise to liability occurred prior to the filing of the bankruptcy petition,” the claim is not contingent. In re Nicholes, 184 B.R. at 88. A dispute over liability for a claim does not make the debt contingent. Id. at 89 (citing In re Dill, 30 B.R. 546, 549 (9th Cir. BAP 1983))

In my world, this comes up most often when an individual has guaranteed his business loans, i.e., corporate debts.  Is his personal obligation to the bank contingent?  Of course says I.  And the above quote supports that position.  The individual is called on to pay the debt only when the corporate entity has failed to pay it.  But in fairness, you have to read the words of the “guaranty.”  In commercial corporate guarantees, the ones I have read at least, the individual typically waives any rights he may have to require that the bank go after the corp first.  The guaranty is likely to say that the bank can ignore the actual borrower entirely and go after the individual if that’s what it chooses to do.   That may not be a contingent debt.

In re Brace oral argument – watch it here

The you tube oral argument at the California Supreme Court was released today.  The link posted by the Supreme Court is here.  

A YouTube video of Ed Hays arguing for the bankruptcy trustee is here.  

SFVBA Bankruptcy Section Meeting, Friday May 22, 2020, at 12 noon: Program: Really Interesting Bankruptcy Matters Emphasizing Consumer Issues: By ZOOM

Email from Steve Fox.  I think I’ll sign up for this one.  My two partners are among the presenters.

Dear All:

This is a fun program.  I have asked a lot of different bankruptcy attorneys and one judge to each contribute one case or topic that interests each of them and to take 5 to 10 minutes to speak about the matter.  For example, Jim Selth will speak about a recent unpublished opinion by one of our local judges which considered the means test, a high income individual and non-consumer debt in the context of a motion by the UST to convert.  Judge Ahart will speak about recent changes to the CA exemption laws and their impact on debtors.  Shai Oved will discuss a fascinating local case in Santa Ana where a family law attorney objected to a debtor’s discharge, lost and then what happened when the debtor sought attorneys’ fees of about $1,000,000 from the objecting family law attorney under Section 523(d) for the cost of defense.  Jeremy Rothstein looks at a recent BAP opinion on the ability of the bankruptcy court to modify a plan near the end of the 5 year term where the debtor has received unexpected monies.   Our other speakers include Matt Resnik and Roksana Moradi, Jeff Hagen and Stella Havkin, Lew Landau and Richard Brownstein, all on consumer issues. Read more…

Judge’s tentative awards $60,000 in attys fees for failure to admit requested admissions

A tentative today from Judge Saltzman:

The Plaintiffs demonstrate how the Debtor fails to admit several requests for admission that were later proved to be true. Most of the requests that the Debtor failed to admit were not objectionable, the requested admissions were material, the Debtor had no reasonable ground to believe that he might prevail on the fact of the admission, and there is no other good reason for the Debtor to have failed to admit. See Fed. R. Civ. P. 37(c)(2).

The Debtor makes no attempt to challenge any law or authorities for why the Plaintiffs are entitled to attorney’s fees. The Debtor argues that he should have prevailed on the motion for summary judgment. The Debtor tries to make technical arguments, twisting the meaning of “personal knowledge” to something utterly absurd. The Debtor’s attempts to justify his frivolous denials and objections to requests for admission are all unpersuasive, and none of those arguments explain why the Plaintiffs are not entitled to attorney’s fees for the continued litigation regarding their anti-SLAPP judgment. Read more…

Oral argument at 9th Circuit set in Taggart – June 16, 2020

The 9th Circuit is going to hear oral argument in the Taggart case on June 16, 2020 at 10:00am.  The hearing will be telephonic.  My post about what the dispute is exactly at this point is here.  The 9th Circuit is looking at the BAP’s ruling (again).  The BAP ruled for the creditor saying it did not violate the discharge injunction because it believed the injunction didn’t apply to it.  The 9th Circuit agreed saying – essentially – that it’s impossible to violate the discharge injunction.    The Supremes reversed thankfully saying there has to be a fair ground of doubt about whether the injunction applies.  We’ll see.

In re Brace to be argued at the California Supreme Court on May 5, 2020

An email from the California Supreme Court:

IN RE CLIFFORD ALLEN BRACE, JR.
Case: S252473, Supreme Court of California

Date (YYYY-MM-DD): 2020-04-15
Event Description: Case ordered on calendar

Notes: To be argued on Tuesday, May 5, 2020, at 1:30 pm, in San Francisco. Counsel to appear via video or teleconference per Administrative Orders 2020-03-13 (March 16, 2020) and 2020-03-27 (March 27, 2020).

For more information on this case, go to:
https://appellatecases.courtinfo.ca.gov/search/case/dockets.cfm?dist=0&doc_id=2269894&doc_no=S252473&request_token=OCIwLSEmXkw7WyBZSCItSENIUEA0UDxTJiI%2BVz1TTDtJCg%3D%3D

Standing to appeal?

Another case I want to remember.  Seems to come up all the time.

Palmdale Hills Prop., LLC v. Lehman Commer. Paper, Inc., 654 F.3d 868, 874 (9th Cir. 2011) (“those persons who are directly and adversely affected pecuniarily by an order of the bankruptcy court . . . have standing to appeal that order”).