All posts in Courts

Do you have to add three days to the notice period when serving by mail – or not?

I noticed the following tentative ruling continuing a motion for relief hearing recently:

The Motion [for relief] was . . . served on Debtor by mail, and set for hearing exactly 21 days later.   While LBR 9013-1(d)(2) specifies that notice must be filed and served not later than 21 days before the hearing date, FRBP 9006(f) requires that an additional 3 days be provided for motions served by mail.

I recalled several years ago being told by a judge that the three day rule doesn’t apply to MFR.  Yikes.  Have I been neglecting a defense since it seems to be more common these days that these motions are served on exactly 21 days notice?

No – FRBP 9006(f) applies only to certain motions.  FRBP 9006(f) states:

When there is a right or requirement to act or undertake some proceedings within a prescribed period after being served and that service is by mail . . . three days are added after the prescribed period would otherwise expire under Rule 9006(a).

Meaning?  When the motion tells the debtor he must do something within a certain am0unt of time after being served, he gets three more days if served by mail.  Most of our motions require a response within 14 days of the hearing, not within some amount of time after being served.  So the additional three days doesn’t apply to most motions.

On a side note:  a year or so ago I was served with a MFR on a very large piece of property, we thought worth $25 million.  The big-firm creditor lawyers gave us exactly 21 days notice – giving me 7 days to prepare the opposition.  When I complained (a little) to the judge at the hearing he scowled at me and I immediately dropped the comment.  The scowl told me – “why didn’t you file a motion for continuance?”  “You can’t just show up at the hearing and complain about the short time.”  I’m pretty sure he would have granted the request for a continuance.

Serving the Debtor with motions, even when Debtor is represented by counsel

About once a month I search for the local rule in the Central District of California that says movant has to serve the debtor personally with the motion, even if the debtor is represented by counsel.

LBR 9013-1(d) Time Limits for Service and Filing of Motions.
(1) Persons or Entities to be Served with the Notice and Motion. Except for a motion under LBRs 2014-1(b), 2016-1(a)(2), 3015-1(w) and (x), 7026-1(c), and 9075-1, and subject to LBR 2002-2(a) and FRBP 9034, a motion and notice thereof must be served upon the adverse party (by serving the adverse party’s attorney of record, if any; or if the adverse party is the debtor, by serving the debtor and the debtor’s attorney, if any; or the adverse party, if there is no attorney of record)

Judge Richie Neiter, RIP

News from Judge Sheri Bluebond today,

Retired bankruptcy judge Richard Neiter passed away yesterday.  The funeral will be Monday, January 13, at 2 PM at Hillside Memorial Park

I appeared in front of him many times.  He was a gentleman and a scholar.

Message from Kailey Wright:

It is with sorrow that we announce the loss of one of the pillars of our bankruptcy community, Hon. Richard M. Neiter (1937-2020).  Richard Neiter served as a United States Bankruptcy Judge for the Central District of California for ten (10) years until his retirement from the bench in 2016.  His chambers was in Los Angeles.  He began his distinguished legal career in 1963 as a member of the prestigious firm of Stutman Treister & Glatt, PC, a Los Angeles based law firm with a national practice specializing in bankruptcy reorganization and creditor rights where he stayed until he became a judge in 2006.  While at Stutman, he worked on many significant reorganization cases and frequently mediated cases in Delaware and in California.  A graduate of USC Law Center, he served as a board member of its Law Review and also served as a member of the Board of Trustees of its Alumni Association in 1986. Read more…

Following up on Taggart

In Taggart, you may recall, the 9th Circuit said that a good faith belief that the discharge injunction doesn’t apply preempts contempt even when the “good faith belief” is “unreasonable.”  Huh?  One of the more surprising aspects of the proceeding at the Supreme Court was that both sides agreed – before oral argument – that the 9th Circuit got it wrong.  Well, thankfully the Supreme Court agreed and reversed saying that contempt is appropriate unless there is “a fair ground of doubt,” as to whether the discharge applies to the creditor or not.   The 9th Circuit test of “good faith works even if it’s not good faith,” was pitched out.  The Supremes sent it back to the 9th Circuit for further review.

Where does it stand now?

A brief history is necessary.  The creditor sought attorneys fees in state court based on post-discharge litigation involving a prepetition debt.  The creditor told the state court postpetition that the debtor was an “indispensable party” and that it needed a particular order against the debtor but otherwise was not trying to collect the debt as it knew the debt had been discharged.  This is not terribly unusual.  When the creditor later “won” and got the state court order it requested, it then asked for attorneys fees against the debtor for the postpetition litigation using the contract (which was discharged).  This is also not terribly unusual.  The creditor argues that the debtor “returned to the fray,” that is, participated in the postpetition litigation and therefore should be liable for the fees under the contract for the postpetition litigation. Read more…

Judge Whitman Holt takes the bench in the Eastern District of Washington

Whitman HoltJudge Marty Barash and new Judge Whitman Holt.  This appointment is so deserved.  Whitman attended most of the cdcbaa events even though the programs had little to do with his personal practice.  He simply has a huge taste for and love of learning.   Congratulations Whit.  We are going to miss you.  Our loss is Washington’s gain.

If you’re not sure where Yakima is, look here.

Below is the notice from the 9th Circuit Court of Appeals.  

Ninth Circuit Court of Appeals Appoints New Bankruptcy Judge for Eastern District of Washington SAN FRANCISCO —

Whitman L. Holt has been appointed as the next judge of the U.S. Bankruptcy Court for the Eastern District of Washington.  He begins his 14-year term today, November 1, 2019, and will maintain chambers in Yakima.  His appointment was made by the judges of the U.S. Court of Appeals for the Ninth Circuit. Read more…

Small Business Task Force – Central District

Email from Chief Judge Maureen Tighe:

Dear Bar Advisory Board members:

As I mentioned at our last meeting, I am seeking nominations for members of a small business task force I am setting up for January 2020.  You may send nominations to the email address below.  The task force will be in furtherance of the court’s goal to be as accessible as possible to business cases.  We will focus in the task force on the small family businesses and other small businesses in the district.  The group will define the term “small business” more as part of its work, but the total liabilities are likely under $3 million.  I will be selecting a broad range of people from around the entire district and encourage you to nominate people with connections to various communities and small business groups in the district, whether or not they have bankruptcy experience.  There will be monthly meetings and community outreach, discussion and report writing involved, so it should be someone able to commit sufficient time to the project.  If you could tell me a little bit about anyone you nominate, that would be helpful.  To give your more guidance, I list the goals of our soon to be final strategic plan below:  Outreach for Businesses. Ensure that businesses know how to appropriately access bankruptcy resources

Strategies:

- Have sufficient outreach and public education to ensure that businesses in financial distress are aware of bankruptcy laws, referral resources, and bankruptcy-related fraudulent schemes

- Understand the difference between omnichannel vs multi-channel and how to elevate your customer experience strategy.
- Investigate and identify barriers that prevent small businesses from accessing court resources
- Maintain and develop relationships with a diverse range of organizations, community groups, and bar associations
- Study the existing business bankruptcy procedures to see whether there are barriers to business access

The recently enacted Small Business Reorganization Act will be considered as part of this task force, as we would like to see that word gets out about this new law and that the court implement it well.  The scope of the task force is broader than the new law, however.  Because the task force likely will not complete its work until late 2020, the Rules Committee we will be addressing separately and much sooner whether any new rule or form changes are required before the Act goes into effect in February.  Judge Scott Clarkson, Chair of the court’s Rules Committee, is currently gathering suggestions from the bar of any changes you believe are required for any of the recently enacted bankruptcy legislation. Please send your comments directly to him at Scott_Clarkson@cacb.uscourts.gov. And send nominations for the Task Force to Email address: CACB_SBTF@cacb.uscourts.gov

Maureen Tighe, Chief Bankruptcy Judge United States Bankruptcy Court,Central District of California

Judge Scott Clarkson website on Rembrandt van Rijn — Bankrupt Printmaker, Art, love and insolvency in the 17th Century

Judge Scott Clarkson has a great website you need to visit - Rembrandt van Rijn — Bankrupt Printmaker, Art, love and insolvency in the 17th Century.   As is said on the website, “Judge Clarkson’s hour-long lecture and PowerPoint presentation of the life and 1656 Bankruptcy of the Dutch artist Rembrandt van Rijn paints a unique picture of art, personality, the loves of his life, and his overwhelming financial successes and failures.  Scott will take his unique show to American University on November 1, 2019.

Take a look at the picture of the US Capitol that Scott uses for the background of the announcement.    The picture was taken by my son Desmond (who also created and maintains this blog for me).   Des and I were at the Space Museum late in the afternoon  a few years ago and we walked out and the sun was shining through on the capitol on what was otherwise a very gloomy day.  Thanks to Scott for thinking of Des.

Supreme Court Stat Pack available at Scotusblog

If you are a numbers nerd, be prepared to blow an hour just scrolling through the 46 pages of numbers.  You can get the final package for the last term here.

One statistic I found intriguing is the makeup of the 5-4 decisions.  Last term 20 cases were decided 5-4.  That is out of 66 cases in total – so 28% of the total.  You would think that the 5-4 decisions were all the five “conservatives” v. the four “liberals.”  But that was the lineup on only seven of the 20.  Justice Gorsuch voted with the four liberals in four cases to make the 5-4 majority.  Justice Roberts voted with the four liberals in two cases.  Justice Thomas and Justice Ginsburg were on the same side in three of the 5-4 cases!  Thomas and Sotomayor were on the same side in two of the 5-4 cases.

Another stat that jumps out at me is that Justice Kavenaugh voted with the majority 89% of the time.   He and Roberts voted together 92% of the time.

I better get to work.  Have fun.

Update on In re Brace – pending at the California Supreme Court

This is the case where the California Supremes will decide whether property held by husband and wife as joint tenants is owned 50-50 by each or is owned as community property.   California law presumes both.  The BAP agreed with Judge Scott Yun and ruled that the ”record title presumption of Cal. Evid. Code § 662″ does not trump “the community property presumption of Cal. Fam. Code § 760″ citing Valli v. Valli (In re Marriage of Valli), 58 Cal. 4th 1396 (2014).

The 9th Circuit punted the issue over to the California Supreme Court.  They are still doing briefing so we are probably a ways from a result.  The Supremes must rule within 90 days after oral argument but there is no deadline re when oral argument must be set.

 IN RE CLIFFORD ALLEN BRACE, JR. 
Case Number S252473 (See docket below) Read more…

Ransom – My ABA summary of the Supreme Court case

I forgot about this summary I wrote for the ABA on the Ransom case at the Supreme Court.  http://sblog.s3.amazonaws.com/wp-content/uploads/2010/10/ABA-Preview.Ransom.pdf