In Re: Alicia Hernandez Hernandez, 5:23-cv-01730

Alicia Hernandez owned property in Perris, California, which became subject to a state court receivership.
On January 24, 2022, a receiver (California Receivership Group, Inc., through Mark S. Adams) was appointed over the property by the Riverside County Superior Court.
The receivership court approved the sale of the property in March 2023.
Hernandez filed for Chapter 7 bankruptcy on March 8, 2023, triggering an automatic stay under 11 U.S.C. § 362.
The receiver sought court approval to retain bankruptcy counsel and filed a monthly accounting after the bankruptcy commenced.
Hernandez filed a motion for sanctions against Adams and the receiver's counsel, alleging willful violation of the automatic stay, which was denied by the bankruptcy court. She then appealed.

Issue	Hernandez's Argument	Adams/Receiver's Argument	Held
Whether requesting approval to retain counsel in receivership court violates the automatic stay	Filing the request in non-bankruptcy court violated the stay	Retaining counsel to participate in bankruptcy did not violate the stay	No violation; permissible conduct
Whether filing monthly accountings in the receivership post-petition violates the stay	Such filings were acts in violation of the stay	Filing routine reports merely maintained status quo, not violating the stay	No violation; status quo maintained
Whether these acts warranted sanctions for willful stay violation	Sought damages, fees, and sanctions for alleged violations	Opposed, arguing conduct did not violate or abuse the stay	Court denied sanctions in entirety
Appeal of bankruptcy court's order denying sanctions	Decision should be reversed due to stay violations	Affirmation of the bankruptcy court's finding of no violation	Affirmed; bankruptcy court correct

In re Mwangi, 764 F.3d 1168 (9th Cir. 2014) (defines purpose and scope of automatic stay, including de novo review standard)
In re Roach, 660 F.2d 1316 (9th Cir. 1981) (non-harassing litigation that maintains status quo does not violate automatic stay)
In re Perryman, 631 B.R. 899 (B.A.P. 9th Cir. 2021) (routine procedural activity in nonbankruptcy court generally doesn't violate the stay)