How Does Bankruptcy Affect State Court Litigation?

Useful Rulings on Bankruptcy’s Effect on State Law

Recent Rulings on Bankruptcy’s Effect on State Law

(NO CASE NAME AVAILABLE)

On April 24, 2020, the BK Court entered an order modifying the automatic stay to allow the parties to the State Court Action – the Ko Faction, the Choi Faction, and WKPC – to proceed with this lawsuit to final judgments or orders as to the following issues: “who has current control over physical access to the real property for church services, who can examine books and records, who can use Debtor's name, who can speak for Debtor, who can make agreements for Debtor, who has signing authority over its bank accounts

  • Hearing

BEAU CAMERON VS. AHNZEY BARANTSEVICH ET. AL.

Code section 1441 concerns the removal of civil actions from state court to federal court and 28 U.S. Code section 1446 concerns foreclosure against the United States. Plaintiff provides evidence that Defendant dismissed the bankruptcy case on February 25, 2019. (See Ex. T. at 1, 35 (Dkt. 178.) Defendant had about nine months from February 25, 2019 to prosecute the case. The deadline to bring this case to trial was therefore in November of 2019.

  • Hearing

  • Type

    Other

  • Sub Type

    Intellectual Property

SK VISION, LLC VS US BANK TRUST NA, ET AL.

“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.)

  • Hearing

  • Type

    Contract

  • Sub Type

    Breach

THRESSA D. YOUNG VS BLUE SKY CAPITAL REALTY INC., ET AL.

“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:

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

  • Judge

    Maurice A. Leiter or Salvatore Sirna

  • County

    Los Angeles County, CA

GILBERT-BONNAIRE V. DEMERJIAN

For example, although not disclosed on the schedule, Plaintiff submitted a declaration to the bankruptcy court in Case No. 8:18-ap-01124-ES (PRJN; Exhibit C) that state is part, “I would like to contest this matter in Bankruptcy Court and State Court. I was forced to hurry to sign a paper by this Plaintiff . . . I am the victim and have been cheated out of my house.” (PRJN; Exhibit C.)

  • Hearing

LEV INVESTMENTS, LLC VS RUVIN FEYGENBERG, ET AL.

Therefore, as the RV claims, including those against moving parties, have been remanded to state court, this Court has jurisdiction over them and this motion. Defendants’ contentions are not well-taken. C.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

BUTLER AMERICA LLC VS BALLARD SPAHR LLP

Shortly thereafter, the bankruptcy court approved an allocation order to pay secured creditors and the trustee submitted a reorganization plan providing that mechanic’s lienholders, including the plaintiff, would be paid. (Ibid.) In August 1996, the second attorneys were substituted out as counsel for the plaintiff in the state court actions and the first attorney was rehired both for the bankruptcy and in the state court actions. (Ibid.)

  • Hearing

  • Judge Donna Geck
  • County

    Santa Barbara County, CA

RANCHO NUEVO HARVESTING, INC., ET AL V MELONCO, LLC

Courts have held in any event that the FAA does not completely strip a state court of equitable powers to grant provisional relief pending arbitration, although it is usually held to apply to situations “shown to be necessary in order to preserve the status quo so the dispute can be arbitrated and the arbitration decision can have effect. . . .” (Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435, 450.)

  • Hearing

PATRICK BROOKS VS PINNACLE FINANCIAL CORPORATION

Defendant also requests that the Court take judicial notice of various filings and orders made in Bankruptcy cases filed by Plaintiff, as well as the Complaint and orders made in numerous other federal and state court cases. The Court may take judicial notice of records of any Court of the United States. Evid. Code § 452(d). Thus, Defendant’s request for judicial notice of various recorded instruments and various court records is granted pursuant to Evidence Code section 452(c)(d) and (h).

  • Hearing

ROSA SAUCEDO VS. SERGIO SAN VICENTE, ET AL

In opposition, Plaintiff argues Defendant has waived his ability to contest the underlying judgment in state court or challenge the authority of the bankruptcy court to enter a final judgment because he consented to the bankruptcy court’s authority to enter a final judgment and/or order. (See Exhibit 5.) Plaintiff failed to cite any legal authority in support of their argument, which renders their position unsubstantiated.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

  • Judge

    Paul A. Bacigalupo or Virginia Keeny

  • County

    Los Angeles County, CA

MARIA SAUCEDO VS SERGIO SAN VICENTE, ET AL

In opposition, Plaintiff argues Defendant has waived his ability to contest the underlying judgment in state court or challenge the authority of the bankruptcy court to enter a final judgment because he consented to the bankruptcy court’s authority to enter a final judgment and/or order. (See Exhibit 8.) Plaintiff failed to cite any legal authority in support of their argument, which renders their position unsubstantiated.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

  • Judge

    Paul A. Bacigalupo or Virginia Keeny

  • County

    Los Angeles County, CA

KUTAS V. REHAB FITNESS, INC.

On 01/23/20, at 5:50pm, defendant Todd Tucker (only) filed a Chapter 13 bankruptcy case (8:20-bk-10229-CB). On 01/24/20, this Court signed and entered Judgment against all defendants in plaintiffs’ favor in the aggregate amount of $578,926.32. On 01/28/20, at 5:27pm, defendant Tucker gave notice of his having filed for bankruptcy protection and requested an automatic stay of these state court proceedings. On 01/30/20, at 10:18am, this Court served on plaintiffs’ counsel Notice of Entry of Judgment.

  • Hearing

MAHVASH MAZGANI VS HOFFMAN LA BREA LLC ET AL

On July 22, 2020, Plaintiff filed a notice of removal of this action and the consolidated case BC622117 to bankruptcy court. When a state court action is removed to bankruptcy court, the state court loses jurisdiction and cannot act unless and until the bankruptcy court remands the action. (Fed. R. Bank. Proc. 9027, subd. (c); In re Princess Louise Corp. (Bank. Ct. C.D. Cal. 1987) 77 B.R. 766, 771.)

  • Hearing

  • Type

    Real Property

  • Sub Type

    Quiet Title

KHORASANI. VS. LUBERSKI, INC.

One from the Bankruptcy court telling Crevier to give the car to Plaintiffs and the other a State court order from a writ of attachment that said the owner of the car was the Luberski parties. "The tort of conversion is an act of dominion wrongfully exerted over another's personal property in denial or inconsistent with his rights therein.

  • Hearing

PAUL EDALAT VS JOHN J. E. MARKHAM, II, ET AL.

Upon remand, the court noted that although both parties fully briefed the issues based on the Amended Complaint filed on 9/5/19 in Federal Court, the State court docket had no record of the Amended Complaint. Accordingly, the court instructed Plaintiff to file the Amended Complaint forthwith so that the State court docket is complete. The Amended Complaint is deemed filed as of 9/5/19. (See Laguna Village, Inc. v. Laborers' Internat.

  • Hearing

  • Judge

    Lori Ann Fournier or Olivia Rosales

  • County

    Los Angeles County, CA

ANDREW M. EGBE VS SELECT PORTFOLIO SERVICING, INC., ET AL.

The property owner then filed a new action in state court for damages caused by the demolition, and the trial court sustained the city’s demurrer without leave to amend, ruling claim preclusion barred the new action. On appeal, the property owner claimed that claim preclusion did not prevent him from bringing the second action because in the first action he sought to enjoin the demolition of the structure while in the second action he sought compensation for the actual demolition.

  • Hearing

CAROLINA RAMIREZ, ET AL. V. CLEARWATER NURSERY, INC., ET AL.

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.

  • Hearing

CHAPTER ONE LAND TRUST VS SELECT PORTFOLIO SERVICING, INC., ET AL.

This Court notes that no published opinion in California state court has defined what material means. As such, the Court concludes that Plaintiff has sufficiently pled that Defendant’s actions were in material violation of the act and plaintiff provides such evidence by noting that Defendant recorded a Notice of Trustee’s Sale before Plaintiff had completed her application.

  • Hearing

  • Type

    Real Property

  • Sub Type

    Foreclosure

MICHAEL KEITH WILLIAMS VS DRAKE BUCHANAN

Under federal decisional authority, a chapter 7 debtor may not prosecute on his or her own a cause of action belonging to the bankruptcy estate unless the claim has been abandoned by the trustee. Griffin v. Allstate Ins. Co., (C.D.Cal. 1996) 920 F. Supp. 127. The trustee controls the bankruptcy estate, therefore, she or he is the real party in interest with standing to sue. Ibid. California state court authority is consistent with federal law.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

KRISTIE DOYLE, ET AL. V. IMERYS TALC AMERICA INC., ET AL.

Ultimately, the federal court denied removal and remanded the case back to the state court. On August 9, 2019, trial was scheduled for May 11, 2020. On January 27, 2020, J&J filed a motion for summary judgment set for hearing on April 9, 2020. On February 28, 2020, J&J submitted an ex parte request for a hearing on a motion for forum non conveniens. The Court was unable to accommodate the request for a hearing date prior to trial. The request was denied.

  • Hearing

LOS ANGELES UNIFIED SCHOOL DISTRICT VS ABBOTT, MARISA

However, Defendant Das has not demonstrated how why the statute would apply to her, as she is not a debtor who filed a petition for bankruptcy. In addition, Defendant Das has not supported with legal authority, that the federal statute, asserted by a defendant who did not file a bankruptcy petition herself, is applicable in state court. Thus, Defendant Das’ request for sanctions is DENIED.

  • Hearing

(NO CASE NAME AVAILABLE)

However, Defendant Das has not demonstrated how why the statute would apply to her, as she is not a debtor who filed a petition for bankruptcy. In addition, Defendant Das has not supported with legal authority, that the federal statute, asserted by a defendant who did not file a bankruptcy petition herself, is applicable in state court. Thus, Defendant Das’ request for sanctions is DENIED.

  • Hearing

MYRNA KAWAKITA VS GEORGE TASHJIAN MD ET AL

There, however, debtor’s professional liability insurance carrier became insolvent and was placed in receivership, which was followed by debtor’s Chapter 7 bankruptcy and discharge. Significantly, plaintiffs did not dispute that debtor’s personal liability on any debt arising out of their state court action was discharged in debtor’s bankruptcy case and that they were barred from seeking to collect from debtor personally.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Medical Malpractice

SCOTT LAMBERT VS PATRICK GOLDBERG MCMAHON, ET AL.

Defendants appear to seek a receiver to shield their interests in the LLC from claims of creditors, and have the receivership function as a state court bankruptcy. The court is not persuaded that appointment of a receiver would or should have that effect. For example, the court would not be inclined to authorize a receiver to sell assets free of liens and encumbrances merely to prefer the LLC member’s interests over those of creditors. Defendants appear to overstate the authority of a receiver.

  • Hearing

JAMALL ROBINSON ET AL. VS GOLF CREEKSIDE LLC ET AL.

Defendants are in bankruptcy proceedings and Plaintiffs have been provided with notice of a stay in state court proceedings. Plaintiffs’ motion is denied. In light of the circumstances, Plaintiffs appear to be misusing the discovery process and may be subject to sanctions. The case management conference scheduled for April 6, 2020 at 8:30 a.m. in Department 11B will remain. Ross 2/18/2020

  • Hearing

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