Articles Posted in US Court of Appeals for the Ninth Circuit

by
Debtors appealed the district court's order vacating the bankruptcy court's confirmation of their chapter 13 plan. The Ninth Circuit dismissed the appeal, holding that, under Bullard v. Blue Hills Bank, 135 S. Ct. 1686 (2015), the district court's order vacating confirmation was not a final appealable order because the district court did not finally dispose of a discrete dispute. The panel also held that debtors had other opportunities to seek circuit court review pursuant to the certification methodologies in the general interlocutory appeals statute, 28 U.S.C. 1292(b), and the bankruptcy-specific certification procedures, 28 U.S.C. 158(d)(2). View "Bank of New York Mellon v. Watt" on Justia Law

by
A bankruptcy estate is entitled to the full amount of spendthrift trust distributions due to be paid as of the petition date. But the estate may not access any portion of that money the beneficiary needs for his support or education, as long as the trust instrument specifies that the funds are for that purpose. The estate may also reach 25 percent of expected future payments from the spendthrift trust, reduced by the amount the beneficiary needs to support himself and his dependents. In this case, the Ninth Circuit reversed the Bankruptcy Appellate Panel's decision after the California Supreme Court's answer to a certified question regarding whether the creditors of the beneficiary of a spendthrift trust may reach the trust distributions. The panel remanded so that the bankruptcy court could apply the teachings of Carmack v. Reynolds, 391 P.3d 625, 628 (Cal. 2017). View "Frealy v. Reynolds" on Justia Law

by
The County of Los Angeles may not enforce a lien on the personal property of a Chapter 11 debtor in possession when the County has failed to perfect the lien as against a bona fide purchaser. In this case, the Ninth Circuit rejected Mainline's argument that this appeal was mooted by the disbursal of Mainline's bankruptcy estate and dismissal of the Chapter 11 case; 11 U.S.C. 545(2) allows a Chapter 11 debtor in possession to set aside liens against its estate; under section 545(2), Mainline may avoid the County's liens; and Cty. of Humboldt v. Grover (In re Cummins), 656 F.2d 1262 (9th Cir. 1981), remained good law. View "Los Angeles County Treasurer & Tax Collector v. Mainline Equipment, Inc." on Justia Law

by
The County of Los Angeles may not enforce a lien on the personal property of a Chapter 11 debtor in possession when the County has failed to perfect the lien as against a bona fide purchaser. In this case, the Ninth Circuit rejected Mainline's argument that this appeal was mooted by the disbursal of Mainline's bankruptcy estate and dismissal of the Chapter 11 case; 11 U.S.C. 545(2) allows a Chapter 11 debtor in possession to set aside liens against its estate; under section 545(2), Mainline may avoid the County's liens; and Cty. of Humboldt v. Grover (In re Cummins), 656 F.2d 1262 (9th Cir. 1981), remained good law. View "Los Angeles County Treasurer & Tax Collector v. Mainline Equipment, Inc." on Justia Law

by
11 U.S.C. 363(f), which authorizes a trustee to sell a debtor's assets free and clear of third-party interests, applied to the facts of this case, and did not conflict with section 365(h), which protects the rights of lessees, because the trustee did not "reject" the leases. Therefore, the Ninth Circuit affirmed the district court's judgment affirming the bankruptcy court's decision that a bankruptcy trustee's sale of debtor's property was free and clear of unexpired leases. View "Pinnacle Restaurant at Big Sky, LLC v. CH SP Acquisitions, LLC" on Justia Law

by
The Ninth Circuit filed an amended opinion affirming the denial of defendant's motion for summary judgment. The panel held that Infinity's attorney, who sued for violation of a bankruptcy automatic stay, was not entitled to quasi-judicial immunity for acts other than drafting the order at the judge's request—an issue the court need not reach because the order was never filed. View "Burton v. Infinity Capital Management" on Justia Law

by
The Bankruptcy Code's automatic stay provision, 11 U.S.C. 362, does not operate to prevent the government's collection of criminal restitution under the Mandatory Victims Restitution Act (MVRA). In this case, debtor pleaded guilty to embezzlement and theft of labor union assets, for which she served eighteen months in prison and agreed to pay $193,337.33 in criminal restitution. After debtor's bankruptcy filing, the government offset payments made as income to debtor against the balance of the restitution debt. The Ninth Circuit affirmed the bankruptcy appellate panel's decision affirming the bankruptcy court's denial of debtor's motion to hold the government in contempt for violating the automatic stay through its collection efforts. View "Partida v. DOJ" on Justia Law

by
The Ninth Circuit affirmed the Bankruptcy Appellate Panel's affirmance of the bankruptcy court's grant of appellees' motion to dismiss Rosanna Mac Turner's and David Turner's Adversary Complaint without leave to amend. The panel held that the Turners' claims for wrongful foreclosure, breach of contract and the implied covenant of good faith and fair dealing under the Pooling and Servicing Agreement, and violation of the Unfair Competition Law were correctly dismissed without leave to amend because the Turners' lack of standing could not be cured by amendment. The panel also held that the district court correctly dismissed the Turners' claims for breach of contract and the implied covenant of good faith and fair dealing under the Deed of Trust (DOT) and violation of Cal. Civ. Code 2923.5 without leave to amend because any amendment would be futile. The panel explained that the DOT permitted the substitution of the Trustee, the Turners cannot allege that they suffered damages for the alleged breach of the implied covenant of good faith and fair dealing under the DOT, and appellees have complied with Section 2923.5, leaving the Turners no remedy. View "Turner v. Wells Fargo Bank NA" on Justia Law

by
The one-year filing deadline imposed by 11 U.S.C. 727(e)(1) was a non-jurisdictional claim-processing rule. Debtor filed a Chapter 7 bankruptcy petition that fraudulently omitted his home, a key asset. Because no one notice, debtor subsequently received a discharge of his debts under 11 U.S.C. 727(a). The panel held that a non-jurisdictional time bar was an affirmative defense that may be forfeited if not timely raised, and debtor forfeited the defense by failing to raise it in the bankruptcy court. On the merits, the bankruptcy court's determination that debtor fraudulently concealed his ownership interest in the home was plainly correct. Therefore, the panel reversed the bankruptcy court's judgment dismissing the trustee's request for relief under section 727(d)(1) and remanded with instructions. View "Weil v. Elliott" on Justia Law