In re: William F. Garlock
NC-16-1092-KuBS
| 9th Cir. BAP | Mar 22, 2017Background
- Involuntary bankruptcy against William Garlock in July 2012; Ledesma Ventures filed a nondischargeability adversary complaint in June 2013 and obtained default entry in Sept. 2013 after Garlock did not answer.
- A default-judgment prove-up was set in Oct. 2013 but Ledesma failed to follow the court’s direction to notify whether it would proceed; significant delays followed.
- The bankruptcy court repeatedly ordered Ledesma to serve written notice of continued prove-up hearings on Garlock and to file proofs of service; Ledesma repeatedly failed to comply.
- After two orders to show cause and further delay, the court dismissed the adversary proceeding for lack of prosecution in May 2015.
- Ledesma moved for relief under Civil Rule 60(b)(1) (Rule 9024); the parties reported an agreement in principle but did not finalize it, and after six months of inactivity the court denied relief for lack of prosecution in March 2016.
- The BAP affirmed, concluding the court did not abuse its discretion in dismissing for lack of prosecution or in denying relief where delays were lengthy, explanations were inadequate, and prior warnings had been given.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal for lack of prosecution was an abuse of discretion | Ledesma argued delays were excusable (settlement efforts, misunderstanding of service requirement) | Court/Garlock argued delays and repeated failure to follow service orders justified dismissal | Affirmed: dismissal not an abuse of discretion given lengthy delay, failure to serve, prior warnings, and prejudice risk |
| Whether dismissal violated due process | Ledesma argued it was dismissed without adequate notice or opportunity to respond | Court argued Ledesma received orders to show cause and hearings and thus adequate notice | Affirmed: no due-process violation — Ledesma had notice and opportunity and was not prejudiced by procedure |
| Whether denial of 60(b)(1) relief was an abuse of discretion | Ledesma argued excusable neglect under Pioneer (delay due to settlement and counsel issues) | Court argued denial was for lack of prosecution (inactivity, no assurance of diligence), not on Pioneer merits | Affirmed: denial for lack of prosecution appropriate; Pioneer analysis not reached because motion was not prosecuted |
| Whether lesser sanctions were required before dismissal | Ledesma argued court should have used lesser sanctions or provided more explicit warning | Court noted explicit orders to show cause and a warning that dismissal could follow; egregious pattern excused need for lesser sanctions | Affirmed: prior warnings and egregious noncompliance made dismissal appropriate without further lesser sanctions |
Key Cases Cited
- Oliva v. Sullivan, 958 F.2d 272 (9th Cir. 1992) (standard of abuse-of-discretion review for dismissals)
- Moneymaker v. CoBEN (In re Eisen), 31 F.3d 1447 (9th Cir. 1994) (five-factor test for dismissal for failure to prosecute)
- Henderson v. Duncan, 779 F.2d 1421 (9th Cir. 1986) (upholding dismissal for inordinate delay)
- Rio Properties, Inc. v. Rio Int’l Interlink, 284 F.3d 1007 (9th Cir. 2002) (public policy favoring decisions on merits does not bar dismissal where other factors support sanction)
- Ferdik v. Bonzelet, 963 F.2d 1258 (9th Cir. 1992) (no need to consider lesser sanctions when party warned or previously noncompliant)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (U.S. 1950) (due process notice standard)
- Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (U.S. 1993) (standard for excusable neglect under Rule 60(b))