Charlie Y., Inc. v. Carey (In Re Carey)
446 B.R. 384
| 9th Cir. BAP | 2011Background
- Appellant Charlie Y., Inc. sued Debtor Robert J. Carey in adversary proceeding to except debt from discharge under 11 U.S.C. § 523(a)(2)(B) based on a Replacement Guarantee.
- The underlying transaction involved a Promissory Note for $90,000 with 8% interest secured by personal guarantees.
- Zebny and George initially guaranteed the note; in 2005 Carey replaced George as guarantor via a Replacement Guarantee.
- The Replacement Guarantee obligated Carey and Zebny to be responsible for liability under the note as members of SGBD and individually for the Guarantee.
- Appellant obtained a judgment for $35,000 against Carey in the bankruptcy court after trial on the § 523(a)(2)(B) claim; costs and attorney's fees were separately sought.
- Carey opposed Appellant’s Fee Motion for attorney’s fees; the bankruptcy court dismissed it as failing to state a claim under Rule 7008(b); the panel vacates and remands for fee determination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of appeal | Appellant argues notice of appeal timely via August 17, 2010 filing of the Minute Order. | Debtor contends appeal was untimely because judgment was May 13, 2010 and no fee order was appealable. | Timely; appellate period run from August 13 minute Order |
| Rule 7008(b) adequacy of notice for attorney's fees | Complaint provided notice and basis for attorney's fees under Promissory Note and Replacement Guarantee. | Complaint did not plead attorney's fees with required specificity under Rule 7008(b). | Complaint adequately stated a claim for attorney's fees; remand for fee determination |
Key Cases Cited
- Travelers Cas. & Sur. Co. v. Pacific Gas & Elec. Co., 549 U.S. 443 (U.S. 2007) (attorney's fees in bankruptcy governed by contract or statute; not mandatory statute-based)
- Conley v. Gibson, 355 U.S. 41 (U.S. 1957) (liberal notice pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 129 S. Ct. 1937 (U.S. 2009) (pleading standards applied to state a plausible claim)
- In re Slimick, 928 F.2d 304 (9th Cir. 1990) (timing of appeals when unappealed order precedes judgment)
- In re Odom, 113 B.R. 623 (Bankr. C.D. Cal. 1990) (fee claims must be pleaded in complaint)
- In re Ramsey, 424 B.R. 217 (Bankr. N.D. Miss. 2009) (fee requests raised at trial can be improper if not in complaint)