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Consequences of leaving something out of the record on appeal

By | June 6, 2020 | Appeals, Cases | No comments

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

By | May 26, 2020 | Cases, Chapter 13 | No comments

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

By | May 20, 2020 | Cases, Chapter 7, Supreme Court | No comments

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

By | May 19, 2020 | Cases, Programs | No comments

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

By | May 18, 2020 | Cases, Judges Corner | No comments

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

By | May 8, 2020 | Appeals, Cases | No comments

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

By | April 15, 2020 | Appeals, Cases, Supreme Court | No comments

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?

By | March 3, 2020 | Appeals | No comments

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”).

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

By | February 20, 2020 | Cases, Courts | 1 Comment

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.

Attorney’s fee orders in bankruptcy are judgments

By | February 10, 2020 | Cases | No comments

A thanks to Alan Wenokur in Seattle for this post on another list serve:

In In re Lawson, 156 B.R. 43 (9th Cir. BAP 1993), the BAP addressed a nearly identical fact pattern.  The debtor’s counsel, Mr. Tilem and Mr. Schwartz, withdrew from a bankruptcy case and then applied for compensation.  They were awarded final attorney’s fees. The bankruptcy case was then dismissed.  Former counsel petitioned the bankruptcy court to grant them formal judgments based on their fee awards. The bankruptcy court did so. The BAP, per Judge Volinn, affirmed. The court held that orders related to final fee awards are part of the bankruptcy court’s ancillary jurisdiction that is unaffected by the dismissal of the case:

Actions are said to be ancillary to the original suit when brought in aid of an execution or to effectuate a judgment entered in the prior suit. Jones v. Nat’l Bank of Commerce, 157 F.2d 214, 215 (8th Cir. 1946). Such an action is dependent upon a judgment or a decree in the original suit which is complete and determines the rights of the parties. Id. (citations omitted.) In the present case, the fee awards granted Tilem and Schwartz are final, and the present action therefore is ancillary in nature.  In re Lawson, supra, 156 B.R. at 46.

Critically, the BAP noted that final fee awards are judgments under the Bankruptcy Rules: “Both the Tilem and Schwartz fee awards are final judgments as defined in Bankruptcy Rules 9001(7) (‘Judgment’ means any appealable order) and 9002(5) (‘Judgment’ includes any order appealable to an appellate court).” Id.  See, also, In re Yermakov, 718 F.2d 1465, 1469 (9th Cir. 1983) (fee award under § 330 constitutes a final judgment, order or decree.) Read more…

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