In re: Sarkis Antabian, CC-16-1085-PaKiF CCâ€"16â€"1129â€"PaKiF

Debtor Sarkis Antabian filed Chapter 11 after Wells Fargo scheduled a trustee’s sale of commercial real property securing a ~ $1.5M loan. Debtor alleged a prior mutual release extinguished Wells Fargo’s lien and sued in an adversary proceeding to invalidate the lien and obtain declaratory relief.
Wells Fargo obtained relief from the automatic stay and later answered and counterclaimed; the adversary proceeded to discovery and mediation scheduling.
Debtor’s counsel experienced serious health problems (surgeries and prolonged recovery) and repeatedly missed deadlines, failed to timely lodge a mediation request, did not cooperate on scheduling, and failed to appear for a deposition or produce documents.
Wells Fargo moved to dismiss the adversary under Civil Rule 41(b)/Bankruptcy Rule 7041 for failure to prosecute and violation of court orders; the bankruptcy court entered findings and dismissed the adversary with prejudice (subject to a short cure window), which became final when no settlement was reached.
After briefing on appeal, the Property sold at foreclosure to a third party; Wells Fargo argued the appeals were moot. The Bankruptcy Appellate Panel retained jurisdiction and affirmed dismissal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Mootness from post-appeal sale of property	Antabian sought to avoid Wells Fargo’s lien; sale does not eliminate possibility of meaningful relief (e.g., recovery of sale proceeds or declaratory relief on debt status).	Wells Fargo argued sale to a third party renders appeal moot because property cannot be restored.	Appeal not moot: court can award monetary relief (recover proceeds) or declaratory relief about the debt and release; case-or-controversy remains.
Dismissal for failure to prosecute under Rule 41(b)/Rule 7041	Delays were caused by counsel’s serious health problems; Debtor and counsel took some prosecutorial steps and attempted settlement/sale efforts; dismissal was too harsh.	Wells Fargo argued repeated, protracted noncompliance and lack of meaningful prosecution justified dismissal; court scheduling and prejudice concerns.	Affirmed: court did not abuse discretion. It found unreasonable delay, docket management impact, insufficient non-frivolous excuse (counsel’s health did not fully explain delays), and that lesser sanctions were inadequate.
Responsibility for counsel’s failures (client vs attorney delay)	Debtor argued delays were counsel’s fault and should not bar the client’s claims.	Wells Fargo contended client bears consequences of chosen counsel’s conduct.	Held for Wells Fargo: under Link, a client is responsible for acts/omissions of retained counsel; dismissal permissible.

Link v. Wabash R.R. Co., 370 U.S. 626 (1962) (client is responsible for attorney’s conduct; dismissal permissible for counsel’s failures)
Moneymaker v. Coben (In re Eisen), 31 F.3d 1447 (9th Cir. 1994) (articulates five-factor test for dismissal for failure to prosecute)
Henderson v. Duncan, 779 F.2d 1421 (9th Cir. 1986) (same framework for dismissal considerations)
In re Phenylpropanolamine (PPA) Prod. Liab. Litig., 460 F.3d 1217 (9th Cir. 2006) (discusses dismissal and consideration of alternative sanctions)
I.R.S. v. Pattullo (In re Pattullo), 271 F.3d 898 (9th Cir. 2001) (mootness principles for appeals after events occur during pendency)
Motor Vehicle Cas. Co. v. Thorpe Insulation Co. (In re Thorpe Insulation Co.), 677 F.3d 869 (9th Cir. 2012) (appellate power to fashion relief despite changed circumstances)
Spirtos v. Moreno (In re Spirtos), 992 F.2d 1004 (9th Cir. 1993) (appeal not moot where distribution of funds to party can be undone)
Preiser v. Newkirk, 422 U.S. 395 (1975) (test for whether declaratory relief remains justiciable)