ATTENTION ALL CM/ECF USERS:
Attached please find a listing of CM/ECF event code updates that will become effective on Monday, May 7, 2012.
Please contact the ECF Help Desk at: ECF_Support@cacb.uscourts.gov with any questions you may have.
Best regards,
ECF Help Desk
(213) 894-2365
Dietz v. Ford (In re Deitz), — B.R. — (9th Cir. BAP April, 2012)
Issue: May the bankruptcy court enter a final judgment for money in a non-dischargeability action given Stern v. Marshall? Did the bankruptcy court properly find fraud on these facts?
Holding: Yes on both Judge Richard Ford, Eastern District of CA
Pappas, Dunn, Markell
Opinion by Pappas, concurring opinion by Markell
The debtor, a contractor, agreed to do work on Fords’ home. His license was suspended at the time and, in any event, he collected 25% more than the contract price and ultimately did only about 65% of the work. At trial, the bankruptcy court found fraud under 523(a)(2) as well as under 523(a)(4) and willful and malicious injury under 523(a)(6). He entered judgment against the debtor for $368,000. On appeal, the debtor argues that under Stern v. Marshall, the bankruptcy court cannot enter a final judgment either as to the dischargeability of the debt or the amount of the debt.
The BAP affirmed. As to the court’s power to enter final judgment, the BAP said that non-dischargeability “claims arose under the Bankruptcy Code, subject matter jurisdiction existed in the district court, and by its referral, in the bankruptcy court, as well. Moreover, “determinations as to the dischargeability of particular debts . . .” are expressly included in the statutory list of core proceedings. 28 U.S.C. § 157(b)(2)(I). As a result, Congress has provided that the bankruptcy court may enter a final judgment on exception to discharge claims, subject only to appellate review. 28 U.S.C. § 157(b)(2)(I). Indeed, since 1970, the bankruptcy court, via the reference from the district court, has had the exclusive authority to determine the dischargeability of debts under § 523(a)(2), (4) and (6). See § 523(c)”
As to entry of a monetary judgment, the BAP said, “The Ninth Circuit has also expressly held, pre-Stern, that a bankruptcy court may enter a monetary judgment on a disputed state law fraud claim in the course of determining that the debt is nondischargeable. Cowen v. Kennedy (In re Kennedy), 108 F.3d 1015 (9th Cir. 1997).” It comments that it must follow the 9th circuit unless the Supreme Court unless it is “clearly irreconcilable.” As to the finding of fraud, the BAP said the court’s findings were not clearly erroneous.
The transcript of oral argument yesterday can be accessed here. It sure looks to me like secured creditors are going to retain the right to credit bid. Kennedy asked no questions.
ATTENTION:
A new Public Notice – PN 12-008 Re: Comprehensive Report On Self-Represented Litigants In the Central District of California Bankruptcy Court- has been posted on the Court’s website and is attached here for your convenience.
Any questions may be directed to the ECF Help Desk at: ECF_support@cacb.uscourts.gov.
Best regards,
ECF Help Desk
(213) 894-2365
| Docket No. | Op. Below | Argument | Opinion | Vote | Author | Term |
|---|---|---|---|---|---|---|
| 11-166 | 7th Cir. | Apr 23, 2012 | TBD | TBD | TBD | OT 2011 |
I spent an hour or so this morning in Judge Robert Kwan’s courtroom. He had about 30 stay relief motions that he went through fairly quickly. He continued 5 or 6 matters because there were no tabs on the pleadings he received. What is surprising about that is that 6 out of 30 is 20% of all the motions. The judges complain about this so often I would have been surprised if it was 6 in a month. Also, he was continuing matters where he was not sure if the junior lienholders had been properly noticed. He wants the address on the FDIC website if it’s a bank; he doesn’t want to depend on the address in the debtor’s schedules. Finally, he was asking questions about the chain of title documents, i.e., the assignment of the note. He questioned one attorney asking who the “declarant” was as the motion simply said something like “Asset Manager” and he quite properly asked, “Asset Manager for whom.” On one motion he wanted a recorded copy of the trust deed. The point is he is sua sponte reviewing the supporting documentation creditors are putting in these motions to make sure there is sufficient foundation even where there is no objection by the debtor. Nice.
United States Bankruptcy Court Central District of California
San Fernando Valley
Tuesday, March 27, 2012 Hearing Room 302
9:00 am
1:11-15373 David Darzian Chapter 13
Second Amended Motion to avoid junior lien on Principal Residence ***
Docket #: 27
On October 2, 2009, David Darzian (“Debtor”) filed a voluntary chapter 7 petition. Debtor received a discharge in that case on February 10, 2010. Subsequently on May 1, 2011, Debtor filed a voluntary chapter 13 petition. This in turn resulted in what is colloquially known as a chapter 20 case. Now, Debtor has filed a Motion to Avoid (“Motion to Avoid”) the junior lien on his principal residence held by J.P. Morgan Chase Bank, N.A. (“JP Morgan”). An opposition has not been filed. At the January 24, 2012 continued hearing, Debtor was instructed to file additional briefing by February 22, 2012 addressing this Court’s previous ruling in In re Winitzky, 2009 Bankr. Lexis 2430 (Bankr. C.D. Cal. 2009). There, this Court held that chapter 20 debtors are not entitled to avoid junior liens because of their inability to obtain a discharge. Debtor was asked to address why this Court should permit this chapter 20 debtor to avoid the junior lien of JP Morgan. The Court noted that subsequent to its ruling in In re Winitzky, several cases have come down and conflicting rulings have been reached. On February 22, 2012, Debtor filed his Brief. Based on an analysis of subsequent cases, the Court will re-consider its position with respect to avoiding junior liens in chapter 20 cases.
Based on an analysis of further discussions of this subject, the court is inclined to agree that the controlling event, then, is not discharge but rather completion of plan payments. Discharge in chapter 13 and an individual chapter 11 is only granted once the plan payments have been completed. It is also dispositive that a discharge does not, in and of itself, strip a lien; instead, discharge simply operates as a statutory injunction against the “commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor.” In re Oksosisi, 451 B.R. 90, (Bankr. D. Ne 2011), In re Frazier, 448 B.R. 803, 809, and 11 U.S.C. § 524(a)(2). Other courts, as discussed below, identify the completion of plan payments as the controlling event governing permanence of lien avoidance and modification of rights.
The Central District Insider thanks Christina Wilton for this tentative ruling and hopes she lets us know what happened. (I think Judge Albert got it right by the way. There has to be something more than the UST thinks the house payment is too high).
Tentative Ruling
This is the motion of creditor for dismissal under 11 U.S.C. §707(b)(3)(A) or (B). This requires the court to evaluate alternatively whether the filing of this bankruptcy was in good faith, or if in the totality of the circumstances abuse is demonstrated. The standard is not as the debtor has argued. Just because under the “means test” a presumption of abuse does not arise, the converse is not necessarily true, i.e. a case where the presumption is not triggered may still be determined under all of the circumstances to have been in bad faith or an abuse. Otherwise subsection (b)(3) would be superfluous. See e.g. In re Reed, 422 B.R. 214, 215, 230 (Dist. C.D. Cal. 2009). The real question is whether under these circumstances the various expenses claimed by the debtor make this case abusive. There are several expenses which have provoked comment. For example, the debtor pays for both his home mortgage and for an RV for another $2,745 per Read more…
ATTENTION ALL CM/ECF USERS RE: Changing Password Information on Third Party Software
For attorneys who use Third Party Software, i.e, Best Case, etc., it is imperative that if you are changing your password in CM/ECF, you also update any password requirements in your software. Doing so will prevent you from being locked out of CM/ECF for unsuccessful login attempts.
Best regards,
ECF Help Desk
213) 894-2365
Effective April 2, 2012, Chief Judge Peter H. Carroll will move from courtroom 1539/chambers 1534 on the fifteenth floor, to courtroom 1468/chambers 1460 on the fourteenth floor of the Roybal Building & Courthouse at the Los Angeles Division. Telephone numbers in Chief Judge Peter H. Carroll’s chambers have not changed.
Effective April 2, 2012, all matters which have been scheduled or noticed for hearing in courtroom 1539 will be heard in courtroom 1468.
Also effective April 2, 2012, judge’s copies for Judge Peter H. Carroll must be delivered to the bin outside of his new chambers 1460.
All hearing notices for matters to be heard on or after April 2, 2012, must contain the new courtroom location.
