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

ROSA MAY VS MERCEDES-BENZ USA LLC

Plaintiff has provided no authority that suggests that MBUSA’s failure to properly remove the District Court case to the Bankruptcy Court would somehow revert jurisdiction back to this Court—somehow skipping the District Court (the court that certainly had jurisdiction over the claim) entirely. Plaintiff points out that the District Court case “was closed.” However, Plaintiff presents no authority that a District Court closing a case grants the State Court jurisdiction.

  • Hearing

    Sep 19, 2019

LUGLI V. MEDICAL INVESTOR HOLDINGS, LLC ET AL.

But where such a petition is heard in a California state court, it is heard without a jury trial (CCP § 1281.2). The state procedural rule is not preempted because it serves to further, rather than impede, the objectives of arbitration. (Rosenthal, supra, 14 Cal.4th at 410.)

  • Hearing

    Sep 10, 2019

ROMEX TEXTILES, INC. VS MOSH COMPANY, INC.

In Shaoxing County, “[a] creditor of a bankrupt corporation sought to recover payment in state court from an individual based on an alter ego theory of liability. The individual argued that the alter ego claim belonged to the bankruptcy estate, because it alleged general injuries to the corporation that could establish a basis of liability for all corporate debts, and therefore, the state court action should be stayed.” (Shaoxing County, supra, 191 Cal.App.4th p. 1193.)

  • Hearing

    Aug 27, 2019

  • Judge

    James E. Blancarte or Serena R. Murillo

  • County

    Los Angeles County, CA

WESTLAKE SERVICES, LLC VS PENA'S MOTORS, INC., A CORPORATION, ET AL.

Defendants argue that Exhibits 1 and 7-10 are properly the subject of judicial notice because the documents are records from a California state court or United States court of record. As to Exhibits 2-4 and 11-12, Defendants assert that judicial notice is appropriate because the documents contain “facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” The request is GRANTED.

  • Hearing

    Aug 16, 2019

  • Type

    Contract

  • Sub Type

    Breach

STEA VS. JP MORGAN CHASE

Howard Memorial Hospital, however, the Court of Appeal affirmed the decision of the trial court, which dismissed appellant physician’s three separate state court actions against respondents, hospital and named individuals. ((1992) 6 Cal.App.4th 1396.) In state and federal actions appellant claimed numerous tortious causes of action.

  • Hearing

    Jul 25, 2019

CVRALPH THEODULE ET AL VS BANK OF AMERICA VS. BANK OF AMERICA

In Ming Yu Chau, the district court seemingly used the term “standing” to represent the concept of Article III standing as well as the concept as it exists in state court. (Ming Yu Chau, supra, 2018 WL 4680127.)

  • Hearing

    Jul 18, 2019

J C BOUCHER V. WALSH DELANEY ATTORNEYS, ET AL.

The president of the landscape contractor asked the attorney about filing a notice to perfect the mechanic’s liens with the bankruptcy court, but the attorney advised that the procedure would not be effective. (Ibid.) The landscape contractor then hired its second attorney and in October 1995 filed state court proceedings to foreclose the mechanic’s liens. (Id. at pp. 32-33.) In January 1996, the landscape contractor in Village Nurseries filed proofs of claims in the developer’s bankruptcy case.

  • Hearing

    Jul 16, 2019

PADILLA V. WECOSIGN, INC.

The good news for plaintiff is that WeCosign’s decision to pursue Chapter 7 instead of Chapter 11 means the debts are still in existence; the bad news for plaintiff is that any money found belonging to WeCosign pre-petition belongs to the bankruptcy court/trustee. See FRBP 3002(c). How then may plaintiff maintain a civil action here in state court for conduct implicating funds belonging to a party protected by the warm embrace of the bankruptcy court?

  • Hearing

    Jun 27, 2019

COVEY V. RESPONSE 1 MEDICAL STAFFING, INC.

To hold that a bankruptcy court order related to an administrative expense claim does not bar re-litigation of that same claim in State court after the Bankruptcy Court has ruled on the merits of the claimed damages would interfere with the federal bankruptcy law by effectively rendering moot the ruling on the recoverable amount of the claim for damages that has priority of payment in the bankruptcy proceeding. The U.S.

  • Hearing

    Jun 21, 2019

THE BANK OF NEW YORK MELLON AS TRUSTEE FOR STRUCTURED ASSET SECURITIES CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-16 V. HORNER

Thus, the question in this case is whether Perl had any remaining legal or equitable possessory interest in the property after Eden Place properly recorded the trustee's deed from the non-judicial foreclosure sale, and after the state court fully adjudicated in the unlawful detainer proceedings Perl's remaining possessory interest in the premises. See id.” (In re: Pearl (9th Cir. 2016) 811 F.3d 1120, 1127.) “We look to state law to determine property interests in bankruptcy proceedings. See Butner v.

  • Hearing

    May 30, 2019

MERIBEAR PRODUCTIONS INC VS BRETT BAER

. § 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. City Lights has filed an objection to the notice, stating that it does not accurately reflect the bankruptcy court’s order.

  • Hearing

    May 28, 2019

KOSI VS. LITTMAN

Also, any fees to attend or monitor legal hearings or bankruptcy hearings by lenders attorneys will be paid for by borrower even if attorneys fees are not awarded. This dispute has been fought out in this state-court action, in a federal district court case, and in several iterations of a bankruptcy case.

  • Hearing

    May 24, 2019

SERGEO GOMEZ VS VER, ET AL.

Discharge in bankruptcy of a cause of action asserted in state court litigation is a defense. (Ibid. [discharge in bankruptcy is a recognized defense under state law]; Harrell v. Hoagland (1937) 18 Cal.App.2d 721, 722.) Thus, a state court may consider the applicability of a bankruptcy discharge when it is raised as a defense to an action. (Local Loan Co. v.

  • Hearing

    May 16, 2019

  • Type

    Employment

  • Sub Type

    Wrongful Term

WOO VS. SALVESON

“It is well settled that such a fiduciary cannot be sued in state court without leave of the bankruptcy court for acts done in his official capacity and within his authority as an officer of the court.” (Id.) While a limited exception exists “with respect to any of their acts or transactions in carrying on business connected with such property,” “this section was not intended to apply to a breach of a fiduciary duty in the administration of a bankruptcy estate.” (Id. at 970.)

  • Hearing

    May 14, 2019

WOO VS. SALVESON

“It is well settled that such a fiduciary cannot be sued in state court without leave of the bankruptcy court for acts done in his official capacity and within his authority as an officer of the court.” (Id.) While a limited exception exists “with respect to any of their acts or transactions in carrying on business connected with such property,” “this section was not intended to apply to a breach of a fiduciary duty in the administration of a bankruptcy estate.” (Id. at 970.)

  • Hearing

    May 14, 2019

PASSI V. CHISICK

In state court, “a defendant-indemnitee will simply join his indemnitor by cross-complaint [under sections 428.10 and 428.20 of the Code of Civil Procedure].” (Cal. Law Revision Com. com., 14 West's Ann. Civ. Proc.Code, supra, § 389, at p. 224.)

  • Hearing

    May 10, 2019

PADILLA V. WECOSIGN, INC.

The good news for plaintiff is that WeCosign’s decision to pursue Chapter 7 instead of Chapter 11 means the debts are still in existence; the bad news for plaintiff is that any money found belonging to WeCosign prepetition belongs to the bankruptcy court/trustee. See FRBP 3002(c). How then may plaintiff maintain a civil action here in state court for conduct implicating funds belonging to a party protected by the warm embrace of the bankruptcy court?

  • Hearing

    May 09, 2019

MARHAMAT V. WU, ET AL.

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.)

  • Hearing

    May 02, 2019

THE LAW FIRM OF FOX & FOX VS GRETEL GONZALES

Gonzales points to a case in which, after a bankruptcy court allowed a landlord to prosecute claims against a debtor tenant in bankruptcy proceedings, a state court granted the landlord’s motion for summary judgment against that debtor tenant on similar claims based on the res judicata effect of the bankruptcy action. (Motion at p. 6, citing Nathonson v. Hecker (2003) 99 Cal.App.4th 1158.) But the present action is not one against a bankruptcy debtor, but a third party.

  • Hearing

    Apr 29, 2019

PADILLA V. WECOSIGN, INC.

The good news for plaintiff is that WeCosign’s decision to pursue Chapter 7 instead of Chapter 11 means the debts are still in existence; the bad news for plaintiff is that any money found belonging to WeCosign pre-petition belongs to the bankruptcy court/trustee. See FRBP 3002(c). How then may plaintiff maintain a civil action here in state court for conduct implicating funds belonging to a party protected by the warm embrace of the bankruptcy court?

  • Hearing

    Apr 25, 2019

SHANGHAI OVERSEAS AFFAIRS SERVICE VS OASIS GROWTH PARTNERS

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.

  • Hearing

    Apr 19, 2019

TIFFANY BESTANI V. BAYSHORE SOFTWARE TECHNOLOGIES, INC., ET AL.

myself clear in connection with the first motion that the Trustee has not abandoned the domain names, and I view the matter of the state court litigation as a matter of standing, and that is that – I’ll try to make myself clear again.

  • Hearing

    Apr 18, 2019

  • Judge

    Presiding

  • County

    Santa Clara County, CA

ELITE OF LOS ANGELS INC VS CRYSTAL VISION ENTERPRISES LLC

S. 187, 190, 191, the Court held that "[i]t will be for the State court, when the case gets back there, to determine what shall be done with pleadings filed and testimony taken during the pendency of the suit in the other jurisdiction." Despite the Court's previous ruling, this Court generally honors pleadings filed in a different jurisdiction, prior to transfer.

  • Hearing

    Apr 11, 2019

  • Type

    Collections

  • Sub Type

    Collections

ELITE OF LOS ANGELS INC VS CRYSTAL VISION ENTERPRISES LLC

S. 187, 190, 191, the Court held that "[i]t will be for the State court, when the case gets back there, to determine what shall be done with pleadings filed and testimony taken during the pendency of the suit in the other jurisdiction." Despite the Court's previous ruling, this Court generally honors pleadings filed in a different jurisdiction, prior to transfer.

  • Hearing

    Apr 11, 2019

  • Type

    Collections

  • Sub Type

    Collections

LISA MARIE BROOKS VS LARA E FIELDING

Further, no motion in the state court is required for removal. (See 28 U.S. Code § 1446.) To sum, the argument that the case “will be” removable to a federal court does not justify staying the action unless and until the case is actually removed. Moving party is ordered to give notice.

  • Hearing

    Mar 20, 2019

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