Olomi v. Tukhi (In Re Tukhi), 568 B.R. 107

Debtor Ahmad Tukhi filed chapter 7; creditor/plaintiff Abdul Olomi sued in adversary proceeding under §523(a)(6) alleging willful, malicious injury (auto strike).
Court set a pretrial conference and required a jointly prepared pretrial stipulation under Local Rule 7016-1(b),(c); multiple warnings in scheduling order and at status conference stressed strict enforcement and possible dismissal.
Plaintiff’s counsel mistakenly filed a joint status report instead of the required joint pretrial stipulation and appeared at the pretrial conference without having filed/served the stipulation.
The bankruptcy court dismissed Olomi’s adversary proceeding at the pretrial conference, citing Local Rule 7016-1(f)(4); the court found counsel’s noncompliance was “fault” but not willful or in bad faith.
Olomi moved for reconsideration under Rule 9024 (Rule 60(b)); the bankruptcy court denied reconsideration, treating it as a Rule 59(e) motion and alternatively analyzing dismissal as for failure to prosecute under Civil Rule 41(b).
The BAP vacated the dismissal, holding the bankruptcy court applied incorrect standards and the record did not support terminating sanctions either for local-rule violation or failure to prosecute; remanded for completion of pretrial proceedings and trial scheduling.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether dismissal was proper as a sanction for violation of Local Rule 7016-1	Olomi: one-time mistake/excusable neglect; counsel misread rules; dismissal disproportionate	Tukhi: court’s strict enforcement and warnings justified dismissal to secure compliance	Reversed — dismissal improper; local-rule sanctions require higher culpability (willfulness/recklessness/gross negligence) and proportionality, which record did not support
Whether dismissal was proper for failure to prosecute (Civ. R. 41(b))	Olomi: short delay excused; prejudice minimal; lesser sanctions available; Pioneer factors (excusable neglect) apply	Tukhi: delay and need to manage docket justified dismissal; pretrial procedures important	Reversed — application of Henderson factors showed only docket-management and slight public-interest concerns favored dismissal; risk of prejudice and availability of lesser sanctions did not; merits policy weighed against dismissal

Pioneer Inv. Servs. v. Brunswick Assocs., 507 U.S. 380 (1993) (standard for "excusable neglect" in late filings)
Zambrano v. City of Tustin, 885 F.2d 1473 (9th Cir. 1989) (local-rule based terminating sanctions require heightened culpability and proportionality)
United States v. Hinkson, 585 F.3d 1247 (9th Cir. 2009) (abuse-of-discretion review: correct legal standard de novo; factual findings for clear error)
Henderson v. Duncan, 779 F.2d 1421 (9th Cir. 1986) (five-factor test for dismissal for failure to prosecute)
Moneymaker v. CoBEN (In re Eisen), 31 F.3d 1447 (9th Cir. 1994) (deference to trial court on docket-management factor)
Yourish v. Cal. Amplifier, 191 F.3d 983 (9th Cir. 1999) (district court best positioned to evaluate docket impact; prior warnings may substitute for lesser sanctions)
Pagtalunan v. Galaza, 291 F.3d 639 (9th Cir. 2002) (warnings may substitute for consideration of lesser sanctions when tied to prior noncompliance)
Malone v. United States Postal Serv., 833 F.2d 128 (9th Cir. 1987) (delay caused by party can constitute prejudice to opponent)