Effect of Bankruptcy on State Court Litigation in California

The state court should have given effect to the bankruptcy court's orders. By going further, the state court exceeded its jurisdiction, even if the state court believed that Rutz had valid grounds to object to the orders.

In this case, the bankruptcy court did apparently make express findings which were not made in Savage. So Savage does not stand for the proposition that a state court may ignore a federal bankruptcy court’s express findings. Once again, Plaintiff’s remedy, if he seeks to challenge the bankruptcy court’s findings, would be in federal court, not state court.

In this case, the bankruptcy court did apparently make express findings which were not made in Savage. So Savage does not stand for the proposition that a state court may ignore a federal bankruptcy court’s express findings. Once again, Plaintiff’s remedy, if he seeks to challenge the bankruptcy court’s findings, would be in federal court, not state court.

Kim (“Plaintiffs KIM”), filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code, Case No. 8:19-bk-11414-ES in the United States Bankruptcy Court for the Central District of California (“Bankruptcy Action”).

Subsequently, the bankruptcy court converted the proceeding to one under chapter 11. Gruntz moved to dismiss the criminal prosecution on the ground that the state court proceedings were in violation of the bankruptcy court's automatic stay. The state trial court denied the motion, and the matter proceeded to trial. Gruntz was convicted. On appeal in the state court, Gruntz argued that the criminal case was subject to the automatic stay.

On April 7, 2023, Grand Pacific filed a notice of order approving stipulation for limited relief from stay to proceed with state court litigation (Stipulation). The Stipulation was approved by a federal bankruptcy judge in a related bankruptcy action involving Hawthorne.

At issue here is the effect of the settlement, approved by the Bankruptcy Court, between Petitioners and the BR trustee on the Petitioners bankruptcy claim (based on the Order for Writ of Attachment) against Respondent McQueen in the pending state court action, the Ventura Action The Court concludes there is no res judicata effect precluding Respondent's pending motion for summary judgment. 1.

The bankruptcy court added that none of these attempts have been successful and that Plaintiff Manesh may have potentially exposed himself to sanctions and of malicious prosecution in state court. ( Id . at 11-12.) Based on the excerpts of this ruling, this Court is confident that the bankruptcy court provided every opportunity to Plaintiffs to litigate and present all relevant evidence in support of their position, including the alleged second COA.

Discussion Defendants contend that this Court has the authority to decide the motion for judgment on the pleadings despite the pending bankruptcy on two grounds: 1) this Court has concurrent jurisdiction with the Bankruptcy Court over Ramirez’s claims, and 2) the automatic stay does not preclude a defensive action commenced by a debtor in state court. The Court finds Defendants’ argument well-taken.

On May 21, 2018, the parties were ordered to file Status Reports advising the Court as to the status of the bankruptcy stay. No Status Reports have been received. The Court notes that Plaintiff has filed a document entitled Notice to State Court of Removal of Action by Defendants, informing the Court that on June 26, 2018, Plaintiff filed a Notice of Removal of this action to the United States Bankruptcy Court.

DENY the judgment on the pleadings a to the fourth cause of action for fraud as the evaluation of that tort is a state court matter and not an issue of compensation for services as described in Bankruptcy Code §327 et seq. GRANT the request for judicial notice as to the records from the bankruptcy court: the notice of filing and the two pleadings filed in the bankruptcy docket. Ev. Code §452(d).

“The existence of federal sanctions for the filing of frivolous and malicious bankruptcy pleadings must be read as an implicit rejection of state court remedies. The mere possibility of being sued in tort in state court, with the potential for substantial damage awards, could deter persons from exercising their rights in bankruptcy. Thus, it is for Congress and the federal courts, not state courts, to decide what incentives and penalties shall be utilized in the bankruptcy process. [Citations Omitted.]”

The order provided that plaintiff ‘may proceed in the non-bankruptcy forum to final judgment (including any appeals) in accordance with applicable non-bankruptcy law.’ Since the bankruptcy court was made aware that plaintiff already had a ‘final judgment’ by way of default against the debtor, it would have been easy for the bankruptcy court to limit its order to collection efforts (see Para 6) but it did not do so.

On 4/10/2023, plaintiffs filed a Motion for Relief from Automatic Stay in the Bankruptcy Action, stating the following, “Movants are requesting that the Court grant relief from stay to permit the parties’ return to state court to resolve the state law issues raised by the Pre-Bankruptcy Litigation operative [FAC], so that it can proceed against [CRAMG] insurance and the non-bankruptcy defendants to liquidate its claim.” (UMF 5, emphasis added.)

VST asks this court to interpret a bankruptcy order, but such interpretation must be done by the bankruptcy court. DENIED.

The Court notes that the federal court or bankruptcy court has exclusive jurisdiction to terminate, annul or modify the stay. Any order by a state court involving the automatic stay is not binding. (11 U.S.C. sec. 362(d); In re Gruntz (9th Cir. 2000) 202 F.3d 1074, 1079-1084.) Because this Court does not have jurisdiction to strike or terminate a bankruptcy stay, substantively, the motion is unpersuasive. The motion to strike is DENIED.

“The normal rules of res judicata and collateral estoppel apply to the decisions of bankruptcy courts.” (Martin v. Martin (1970) 2 Cal.3d 752, 758.) “An order of the bankruptcy court, excluding a bankrupt’s obligation to his former wife under a property settlement from the discharge in bankruptcy, can be challenged solely by way of direct attack in the federal court; it may not be collaterally attacked in a proceeding in state court.” (Id. at p. 754.)

The automatic stay is core bankruptcy proceeding and a State court modifying that stay “would constitute unauthorized infringement upon the bankruptcy court’s jurisdiction to enforce the stay.” (In re Gruntz (2000) 202 F. 3d 1074, 1082.) It appears that any action by this Court on the matters before it would interfere with the rights of the parties currently before the Bankruptcy Court. The Bankruptcy Court has a hearing on this matter set for June 13, 2018. III.

Doe Council 1 Plaintiff’s motion to lift the bankruptcy stay is DENIED. This Court does not have jurisdiction to lift the bankruptcy stay. “A state court does not have concurrent jurisdiction to determine the scope and applicability of the automatic stay with respect to a core bankruptcy proceeding…Bankruptcy courts have the sole authority to determine the scope of the automatic stay imposed by title 11 United States Code section 362(a), subject to federal appellate review.”

This is an issue for the bankruptcy court to decide, not this state court. At present, the enforceability/dischargability of the WeCosign judgments is an open issue. According to the memoranda on file, the issue is presently before the bankruptcy court, with no decision having yet been made. If the debts are dischargeable, they will be resolved in whole within the bankruptcy proceeding (and plaintiff’s adversary claims).

However, a state court does not have concurrent jurisdiction to determine the scope and applicability of a stay with respect to a core bankruptcy proceeding. (In re Marriage of Sprague & Spiegel-Sprague (2003) 105 Cal.App.4th 215, 219.) Further, because the bankruptcy court has exclusive jurisdiction over objections to discharge, state court judgments construing the scope of the bankruptcy discharge are not preclusive. (In re Pavelich (9th Cir. BAP 1999) 222 BR 777, 783.)

In Pauletto and Ross , the issue was whether the plaintiffs could bring malicious prosecution state court actions when the underlying proceedings were bankruptcy proceedings authorized by federal law. ( Satten v.

” ( Ibid. ) The bankruptcy court therefore denied Plaintiff Fateh Manesh’s request to stay distribution while Plaintiff Fateh Manesh pursued his claims in state court. ( Ibid. ) In Nathanson v. Hecker (2002) 99 Cal.App.4th 1158 ( Nathanson ), the Heckers filed a petition for bankruptcy while the parties were engaged in litigation in state court. ( Id. at p. 1161.) Nathanson filed a proof of claim in the bankruptcy court, and the court allowed his claim.

” ( Ibid. ) The bankruptcy court therefore denied Plaintiff Fateh Manesh’s request to stay distribution while Plaintiff Fateh Manesh pursued his claims in state court. ( Ibid. ) In Nathanson v. Hecker (2002) 99 Cal.App.4th 1158 ( Nathanson ), the Heckers filed a petition for bankruptcy while the parties were engaged in litigation in state court. ( Id. at p. 1161.) Nathanson filed a proof of claim in the bankruptcy court, and the court allowed his claim.

” ( Ibid. ) The bankruptcy court therefore denied Plaintiff’s request to stay distribution while Plaintiff pursued his claims in state court. ( Ibid. ) In Nathanson v. Hecker (2002) 99 Cal.App.4th 1158 ( Nathanson ), the Heckers filed a petition for bankruptcy while the parties were engaged in litigation in state court. ( Id. at p. 1161.) Nathanson filed a proof of claim in the bankruptcy court, and the court allowed his claim.

If the bankruptcy court later decides that the state court was incorrect, the state court proceedings in violation of the stay are void. See, e.g., In re Schwartz, 954 F.2d 569 (9th Cir.1992); In re Shamblin, 890 F.2d 123 (9th Cir.1989). On the other hand, if the state court is correct in deciding that the stay does not apply, the state court proceedings are not void. Gruntz, 202 F.3d at 1087.

Attached to the notice was a proposed order granting the motion for relief from the automatic stay under 11 U.S.C. § 362 that was lodged with the bankruptcy court after the hearing. The proposed order provides that the automatic stay of 11 U.S.C. § 362(a) is terminated as to the debtor and the debtor’s bankruptcy estate, and that there is no automatic stay in place as to the non-debtor co-defendants in this state court action.

The Bankruptcy Court stated: “So it appears to me that the state court is trying to respect the automatic stay and the court’s jurisdiction. I appreciate that very much and believe, you know, we try to—the two courts try to get along and I do appreciate it. But by granting this motion for relief from the automatic stay I am saying to the state court judge, the state court whichever judge is presiding, you may do whatever you think you should do or not do with respect to the judgment.” [Ex.

There is no showing that the Butlers’ bankruptcy proceedings are likely to resolve any issues in this action. The only showing is that the bankruptcy proceedings may result in a set-off of damages in the event liability is found in this action. More generally, defendants have not shown that any party will be prejudiced by the eventual determination of the Butlers’ bankruptcy.

Bankruptcy Court Case # 1:13-bk-12106-MT, In re Adolfo Flores, and in particular the "Order Pursuant to 11 U.S.C. of the Bankruptcy Code Approving Stipulation Granting Relief from the Automatic Stay" granted by United States Bankruptcy Judge Maureen Tighe and entered on May 6, 2014 (copy attached).

Status of the appeal to the 9th Circuit on the bankruptcy issue. 3. Even if Mr. Allen receives a favorable ruling in the pending appeal of the disgorgement/disallowance of fees issue, has there been a determination made as to whether the bankruptcy court or the state court has jurisdiction to rule on Allen's request for fees. 4. Has a formal order ever been entered staying the state court proceeding pending the outcome of the bankruptcy appeal.

There is no indication that the automatic bankruptcy stay has ended, or that moving party obtained leave from the bankruptcy court to seek withdrawal; lack of opposition from the bankruptcy trustee is insufficient. (In re Marriage of Sprague & Spiegel-Sprague, supra at 220 [“Booth therefore could proceed in state court ... only by first obtaining relief from the automatic stay from the bankruptcy court,” but “failed to do so ... [m]erely serving the bankruptcy trustee ... was not enough”].)

Instead, [creditors] counsel in the state court suit against [debtor] received a Notice of Injunction from [debtors] counsel which stated that a bankruptcy petition had been filed and that the state court suit would be subject to the automatic stay. This notice did not contain any deadline dates, and [creditors] counsel assumed that further notices would be forthcoming from the bankruptcy court. (Id. at p. 98.)

In In re Beeney (9th Cir. 1992) 142 B.R. 360, 364, after receiving notice of discharge in a no asset case, plaintiff filed a motion to reopen the bankruptcy case and for an order allowing him to proceed with the state court case. The bankruptcy court denied his motion, stating there was no need to reopen his case, but implying that he should have taken action when the bankruptcy matter was open and thus could not proceed with the state case.

The time has expired for seeking relief in state court from the judgment pursuant to California Code of Civil Procedure § 473. Any relief from Plaintiff's collection of a discharged debt must be sought from the federal bankruptcy court. The bankruptcy court must make the determination of whether the judgment lien created by the abstract of judgment recorded in November 2009 remains valid.

1.MOTION RE: BANKRUPTCY DISCHARGE This the continued hearing of certain defendants’ Motion/Application regarding Bankruptcy Discharge. The Court has considered the original papers and arguments, as well as the supplemental papers filed by Christine Stonger, specially-appearing at this time. Other parties have not filed supplemental papers.

The bankruptcy court sustained Rockwell’s objection to the exemption, but that order was reversed on appeal. On remand, the bankruptcy court ruled that the cause of action was exempt and gave Ybarra the option of either accepting $17,500 in full satisfaction and release of all claims against Rockwell or taking ownership of the lawsuit. Ybarra elected the latter and successfully persuaded the state court to set aside the dismissal.

Land Title Co., 994 F.2d 1433 (1993), but it concerned a debtor’s motion made to a bankruptcy court to reopen his bankruptcy case. This is not such a motion and this Court does not decide matters of reopening bankruptcy proceedings. If Defendants are invoking a defense of a bankruptcy discharge, two issues surface which are not properly addressed. The first is the jurisdiction of the Court to consider any such matter.

On 02/13/20, defendant Tucker filed the pending motion to set aside the Judgment as being in violation of the bankruptcy stay (and thus void). On 02/20/20, plaintiffs filed in the bankruptcy action a motion for relief from the automatic stay. On 03/18/20, the bankruptcy court granted plaintiffs’ motion for relief from the stay and took the relatively unusual step of annulling the stay retroactive to the date the bankruptcy petition was filed.

There is no reason to believe that these other claims will be resolved by the bankruptcy appeal, as there are no similar claims raised in the bankruptcy case. Even if the Bankruptcy Appeals Court were to grant plaintiffs’ appeal of the order denying their motion to void the unlawful detainer judgment, it would not resolve plaintiffs’ other state court claims.

CU24-07944 Motion for Summary Judgment TENTATIVE RULING Plaintiff recently notified the court that Defendant has filed a bankruptcy petition, and that an automatic stay applies to this state court civil action. Plaintiffs summary judgment motion cannot be heard at this time, and is therefore taken off calendar. The case management conference set for September 29, 2025 at 9:00 a.m. remains on calendar at this time.

CU24-07944 Motion for Summary Judgment TENTATIVE RULING Plaintiff recently notified the court that Defendant has filed a bankruptcy petition, and that an automatic stay applies to this state court civil action. Plaintiffs summary judgment motion cannot be heard at this time, and is therefore taken off calendar. The case management conference set for September 29, 2025 at 9:00 a.m. remains on calendar at this time.

CU24-07944 Motion for Summary Judgment TENTATIVE RULING Plaintiff recently notified the court that Defendant has filed a bankruptcy petition, and that an automatic stay applies to this state court civil action. Plaintiffs summary judgment motion cannot be heard at this time, and is therefore taken off calendar. The case management conference set for September 29, 2025 at 9:00 a.m. remains on calendar at this time.

CU24-07944 Motion for Summary Judgment TENTATIVE RULING Plaintiff recently notified the court that Defendant has filed a bankruptcy petition, and that an automatic stay applies to this state court civil action. Plaintiffs summary judgment motion cannot be heard at this time, and is therefore taken off calendar. The case management conference set for September 29, 2025 at 9:00 a.m. remains on calendar at this time.

CU24-07944 Motion for Summary Judgment TENTATIVE RULING Plaintiff recently notified the court that Defendant has filed a bankruptcy petition, and that an automatic stay applies to this state court civil action. Plaintiffs summary judgment motion cannot be heard at this time, and is therefore taken off calendar. The case management conference set for September 29, 2025 at 9:00 a.m. remains on calendar at this time.

CU24-07944 Motion for Summary Judgment TENTATIVE RULING Plaintiff recently notified the court that Defendant has filed a bankruptcy petition, and that an automatic stay applies to this state court civil action. Plaintiffs summary judgment motion cannot be heard at this time, and is therefore taken off calendar. The case management conference set for September 29, 2025 at 9:00 a.m. remains on calendar at this time.

Thus, this Court concludes that any determination as to whether the automatic stay caused by RCBS’ bankruptcy filing extends to non-debtor SFHS is a determination for the Bankruptcy Court. Indeed, even if this Court had the authority to make such a determination, the Bankruptcy Court presiding over RCBS’ bankruptcy is far more suited to resolve the issues raised by Defendants.

“[A]ccording to the plain language of these statutes, the state court's jurisdiction is suspended when the defendant seeking removal gives notice to the state court clerk, and it is reacquired when the district court clerk gives notice to the state court clerk in the form of a certified copy of the remand order.” (Spanair S.A. v. McDonnell Douglas Corp. (2009) 172 Cal.App.4th 348, 356.)

The order provided that plaintiff “may proceed in the non-bankruptcy forum to final judgment (including any appeals) in accordance with applicable nonbankruptcy law.” Since the bankruptcy court was made aware that plaintiff already had a “final judgment” by way of default against the debtor, it would have been easy for the bankruptcy court to limit its order to collection efforts (see Para 6) but it did not do so.

Are any of the defendants in the TMCC, BMO or Compass bank suits named defendants in the pending Florida bankruptcy suit? 2. Is this state court action stayed as a result of the pending Florida bankruptcy suit involving Momentum Automotive Group? 3. As USRECH is a party to the Florida bankruptcy action in its suit against Momentum Automotive Group, can USRECH appear in this case? And, if USRECH is the beneficiary of a DACA, can USRECH receive monies outside of bankruptcy? 3.

In Opposition, Plaintiff maintains that the Bankruptcy Order does not apply to Defendant because Defendant was not the debtor subject to the Bankruptcy Order nor an affiliate of the debtor. Generally, state and federal courts have concurrent jurisdiction to decide whether a claim within a discharge order is a discharged debt. (28 U.S.C. §1334(b).) [A] state court may consider the applicability of a bankruptcy discharge when it is raised as a defense to an action. ( Flores v.

Bankruptcy courts, and not state courts, have jurisdiction over all claims of willful violations of bankruptcy stays. Hicks v. E. T. Legg & Assocs . (2001) 89 Cal. App. 4th 496, 513. Parties are not permitted to avail themselves of state court remedies, to circumvent federal remedies for their opponents' alleged misuse of the bankruptcy process. Saks v. Parilla (1998) 67 Cal. App. 4th 565, 573-74.

This issue is distinct from whether the bankruptcy court can stay state court proceedings in its discretion.” (Id. at p. 336.) “It is clear that § 362 does not stay the hand of the trustee from continuing to prosecute a pre-bankruptcy lawsuit instituted by the debtor.” (Id. at p. 337.)

Previously, the motion had been continued for moving party to file the brief filed 5/5/23, addressing the issue whether the deponents notice of bankruptcy discharge has any effect on pursuing the deposition. The Court now concludes that the Bankruptcy Court order contemplated a Judgment in this case subject to a Bankruptcy action to determine if the debt is dischargeable. Cf . Higgins v. Superior Ct . (2017) 15 Cal.

Merrick involved Defendants’ motion to dismiss the debtor’s state court action (as opposed to a debtor’s continued prosecution of the case) and Shah involved a Chapter 11 debtor in possession action (as opposed to a Chapter 7 action where the estate is controlled by bankruptcy trustee). Although the trustee abandoned Plaintiff’s case on 11/24/14, Plaintiff was under the mistaken belief that he had to wait for all of the bankruptcy issues to be resolved before he could continue the action.

Defendants filed for bankruptcy on November 11, 2022. These state proceedings were and are automatically stayed. The last review hearing in this case was held September 6, 2023, and it was noted the bankruptcy is proceeding under Chapter 13 with a repayment plan of 3-5 years. If no change in status, no appearance necessary and the Court will continue the status review, which is a voluntary appearance in this state court action, to September 5, 2025, at 8:15 AM.

Jafroodi to shield these records in the bankruptcy case, which itself was filed to avoid adjudication of Plaintiffs’ Labor Code claims in this state court. Finally, Plaintiffs note that all other protections in the protective orders will remain in place. In light of Plaintiffs’ arguments and the lack of opposition, the motion is granted.

The 14-day stay of the order under Federal Rule of Bankruptcy Procedure 4001 (a) (3) is waived. No other relief is awarded.” (Ibid.) De Arkos has not shown compliance with the bankruptcy court’s order. Therefore, the motion is DENIED.  DBC’s counsel is directed to submit a written order to the court consistent with this ruling and in compliance with Cal. Rules of Court, Rule 3.1312.

The sanctions are sought in part due to the Mazgani Parties alleged fraudulent concealment and fact suppression from the bankruptcy court. ( Id. at p. 4.) These sanctions are requested to offset the ongoing sanctions imposed by the bankruptcy court, which has failed to respect the state court orders issued by Hon. Berle on November 2, 2023, and Hon. Long on March 14, 2024. ( Id. at p. 5.)

Gerry’s actions were in violation of the bankruptcy court’s stay order, any contempt proceedings would have to be brought in the bankruptcy court.

“Any state court modification of the automatic stay would constitute an unauthorized infringement upon the bankruptcy court’s jurisdiction to enforce the stay.” (Id. at 1082.) Ruling The motion to set aside the trustee’s sale is denied. Next dates: Notice:

Thus, the parties stand in the position as if no bankruptcy had been filed. The bankruptcy was not terminated until October 31, 2013. Defendant relies on Stewart v. U.S. Bancorp (9th Cir. 2002) 297 F. 3d 953, in which the district court dismissed the plaintiffs second case because of res judicata, even though the court had not stated whether that first case was dismissed with or without prejudice.

Injunctive Relief Defendant demurs to all causes of action on the grounds that this Court has no jurisdiction over the subject matter of this action because the Bankruptcy Court has exclusive jurisdiction over these claims. 28 U.S.C. §1134(a) provides the Bankruptcy Court with original and exclusive jurisdiction over cases under title 11. 28 U.S.C. §1134(e) gives the Bankruptcy Court exclusive jurisdiction over property of debtors bankruptcy cases.

Accordingly, this motion is stayed pending potential proceedings in bankruptcy or district court, and this case is set for a Case Management Conference on February 27, 2018 at 8:30 a.m. The parties should file and serve reports by February 22 as to the status of matters (if any) in the bankruptcy arena.

The arguments as to whether a state court has authority to question the Bankruptcy Courts jurisdiction over the Sale Order is of no consequence. As argued by Plaintiffs, the issues presented in this Set Aside Action are not to affect or set aside the Bankruptcy Sale. As detailed above, this Set Aside Action is to determine whether the Resulting Trust Judgment is void.

Elba Oil Co. (1942) 21 Cal.2d 188, 205 (“Our state courts give full faith and credit to the final judgments and orders of the United States District Courts” which “establish… the conclusiveness of the bankruptcy proceedings … in this state court action”); People v.

The Court also notes that the bankruptcy proceeding is taking place in California. Thus, the proceedings related to the FACC are stayed pending final resolution of the bankruptcy adversary proceeding.

A state court does not have concurrent jurisdiction to determine the scope and applicability of the automatic stay with respect to a core bankruptcy proceeding. Bankruptcy courts have the sole authority to determine the scope of the automatic stay imposed by 11 United States Code section 362(a), subject to federal appellate review. In re Marriage of Sprague & Spiegel-Sprague (2003) 105 Cal. App. 4th 215, 219.

In other words, at no point in time could Plaintiff, on her own authority, have timely brought her claims in state court. From the time the claims allegedly accrued until the trustee abandoned them, the claims were the property of the estate. Once abandonment occurred, the statute of limitations had effectively expired due to the fact that bankruptcy law ordinarily restores owners nunc pro tunc as of the filing of the bankruptcy petition.

The question then becomes whether or not the action prosecuted by corporate plaintiff Affiliated Professional Services, Inc. can proceed where the sole shareholder has filed for bankruptcy protection. - Bankruptcy Stay Does not Apply to Actions Prosecuted by Debtor in Bankruptcy The automatic stay does not bar actions prosecuted by debtors-in-bankruptcy and the cause of action of the debtor-in-bankruptcy becomes an asset of the bankruptcy estate.

However, the authorities cited by Omidi Defendants and Top Surgeon Defendants relating to the procedures for substitution of parties do not involve whether a Chapter 7 Bankruptcy Trustee, the real party in interest of the Plaintiffs’ claims, is required to substitute in as plaintiff in state court proceedings commenced prior to the bankruptcy.

On July 3, 2018, the Chapter 7 bankruptcy case was closed so that the Judgment Lien could be addressed in the Chapter 11 case and/or in state court proceedings. (Complaint, ¶ 30.) After it became clear that the Judgment Lien would have to be addressed in state court, Plaintiff retained new counsel to assist him in his efforts to set aside the default judgment in the Original Action. (Id., ¶ 31.)

o Defendant also argues in this Los Angeles County action, there is a misjoinder of the United States Bankruptcy Trustee given Plaintiffs current Chapter 13 bankruptcy where the assigned United States Trustee the real party in interest and has the authority and duty to pursue the causes of action as an asset of the bankruptcy estate in this state court action as a matter of law.

The second issue is the bankruptcy stay. 11 USC §362 imposes an automatic stay upon the filing of a bankruptcy petition. “[A]ctions taken in violation of the automatic stay are void.” (In re Gruntz (9th Cir. 2000) 202 F.3d 1074, 1082.) The parties do not dispute that Watkins has filed for bankruptcy and the bankruptcy matter is still pending. Watkins argues that this motion should not be heard due to the automatic bankruptcy stay.

The second issue is the bankruptcy stay. 11 USC §362 imposes an automatic stay upon the filing of a bankruptcy petition. “[A]ctions taken in violation of the automatic stay are void.” (In re Gruntz (9th Cir. 2000) 202 F.3d 1074, 1082.) The parties do not dispute that Watkins has filed for bankruptcy and the bankruptcy matter is still pending. Watkins argues that this motion should not be heard due to the automatic bankruptcy stay.

The second issue is the bankruptcy stay. 11 USC §362 imposes an automatic stay upon the filing of a bankruptcy petition. “[A]ctions taken in violation of the automatic stay are void.” (In re Gruntz (9th Cir. 2000) 202 F.3d 1074, 1082.) The parties do not dispute that Watkins has filed for bankruptcy and the bankruptcy matter is still pending. Watkins argues that this motion should not be heard due to the automatic bankruptcy stay.

Even if a personal injury debt has been discharged in bankruptcy, Plaintiff may sue and then seek to recover under any applicable insurance policy if one exists and on its terms continues to apply post-bankruptcy. (Forsyth v. Jones (1997) 57 Cal.App.4th 776, 781 [doctor whose debts were discharged in bankruptcy could still be sued as a nominal defendant for malpractice in order for plaintiff/claimant to proceed against debtor’s insurer].)

The Court of Appeal ultimately concluded that the creditor’s “claims based on alter ego liability were not the property of [corporation]’s bankruptcy estate and, therefore, the action was not subject to the automatic stay of the bankruptcy proceedings.” (Id. p. 1199.) Likewise, here, Golan is not in a bankruptcy proceeding and the claims against him are directed at his personal assets, which is not subject to a bankruptcy proceeding.

Upon the filing of a bankruptcy proceeding, federal bankruptcy law imposes an automatic stay on all state and federal proceedings outside the bankruptcy court against the debtor and the debtors property. ( Shaoxing County Huayue Import & Export v. Bhaumik (2011) 191 Cal.App.4 th 1189, 1196.) The automatic stay is self-executing and is effective upon filing the bankruptcy petition. ( Ibid .) Judicial proceedings in violation of the automatic stay are void. ( Sindler v.

However, since plaintiff has at least a theory of liability, and since very few courts have had occasion to consider (let alone decide) whether the remedy for a Yvanova violation is limited to monetary relief, or if the plaintiff can actually get the property back, this Court must first defer to the bankruptcy court for whether the issues are ready for resolution here in the state court.

Plaintiff implies Defendants made no claim against the bankruptcy estate, but does not actually state this. Moreover, even assuming without supporting evidence that the facts are as Plaintiff asserts, they do not support a finding the proposed amendment is futile. Plaintiff cites legal authority which states "offset cannot be used to revive in a state court proceeding a debt already discharged in bankruptcy." (In re Marriage of Williams (1984) 157 Cal.App.3d 1215, 1224.)

Plaintiff contends that the default judgment is void because it was entered while defendant Flores was in bankruptcy. Entry of a judgment entered by a state court while a debtor is in bankruptcy violates the automatic stay of 11 U.S.C. § 362(a) and is void as a matter of law. Both the court and Plaintiff were unaware of Floress bankruptcy because Flores failed to file a Notice of Stay. Defendant Hernandez also filed a bankruptcy case after the judgment was entered.

Bankruptcy Court Orders It appears this motion is based upon clarification from the bankruptcy court regarding its initial order lifting the stay of this action but disallowing motions for attorney fees. The bankruptcy court ordered: “The moving party shall have relief from stay to pursue through judgment the pending state-court litigation identified in the motion. The moving party may also file post- judgment motions, and appeals.

Defendant Brent removed the action to the bankruptcy court into Adversary Proceeding 1:16-ap-01105-MB, in the United States Bankruptcy Court for the Central District of California and assigned to Judge Martin R. Barash. (Compl., ¶ 27.) On January 13, 2017, the Bankruptcy Court remanded the case back to the state court due to lack of jurisdiction. (Compl. ¶ 28, Ex. E, F.) On January 11, 2016, Defendant Brent filed another action entitled Case No. LC103757, Ramin Zarrin-Ehteram v.

“The automatic stay is an injunction issuing from the authority of the bankruptcy court, and bankruptcy court orders are not subject to collateral attack in other courts.” (In re Gruntz (9th Cir. 2000) 202 F.3d 1074, 1082.) “Any state court modification of the automatic stay would constitute an unauthorized infringement upon the bankruptcy court's jurisdiction to enforce the stay.” (Ibid.) As such, this Court does not have jurisdiction to expand the scope of the bankruptcy stay.

Bankruptcy Court No. 19-5062 MEH: Granted. Page 6 of 6

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Jurisdiction of Bankruptcy Court State court jurisdiction is not proper to accomplish the adjustment of rights and duties within the bankruptcy process itself, which should be uniquely and exclusively federal (e.g., debtors' petitions, creditors' claims, disputes over reorganization plans, disputes over discharge, and such other proceedings). Satten v. Webb (2002) 99 Cal. App. 4th 365, 384. "...

General Order 13-05 simply provides the procedure and authority to bring the district court case to the bankruptcy courts. 28 USC § 157 provides authority for Bankruptcy judges to hear claims. Rule 9027 is explained above, and provides the steps a party must take to remove a case to the bankruptcy courts (from either state or district courts).

The Bankruptcy Courts exclusive jurisdiction over all of the debtors property is a critical feature of every bankruptcy proceeding. ( Central Virginia Community College v. Katz (2006) 546 U.S. 356, 363-364.) Mahvash Mazganis bankruptcy proceedings are still pending. Modas sole avenue for relief from the automatic bankruptcy stay is through the Bankruptcy Court. No judgment enforcement is currently possible with respect to the properties because that judgment is against only Mahvash Mazgani.

Plaintiff further argues that he can “seek a state court judgment for willful misconduct and enforce it outside the scope of insurance proceeds once the automatic stay is lifted when the bankruptcy case is closed.” (Opposition, p. 5:8-10.) This is a misreading of the Bankruptcy Order.

R&R filed for Chapter 11 bankruptcy in July 2024. The bankruptcy court granted Weller’s motion for relief from stay on September 20, 2024, authorizing her to proceed in state court solely to liquidate her claim. R&R’s Chapter 11 plan was confirmed in December 2024, and the discharge became effective in January 2025. In March 2025, the bankruptcy court denied R&R’s motion to hold Weller in contempt, finding that her continued prosecution of this action did not violate the discharge injunction.

Accordingly, the records from the bankruptcy proceeding are proper subjects of judicial notice. The parties’ requests are GRANTED. IV. Merits of Motion Bank of America argues Plaintiffs lack standing and are barred from pursuing their claim due to their Chapter 13 bankruptcy proceeding. The Court first summarizes the bankruptcy proceeding before addressing each argument in turn. A. Bankruptcy Proceeding Plaintiffs filed a bankruptcy petition under Chapter 13 in October 2011. (RJN, Ex. 1 [docket].)