603 B.R. 31
9th Cir. BAP2019Background
- In 2007 California state court entered a ~$52,000 judgment in favor of bail bondsmen (People’s Bail Bonds / Kassabian) and recorded an abstract of judgment creating a lien on Debtor Agneta Dobos’ residence.
- Dobos filed Chapter 7 on October 25, 2013, listed the judgment as a secured claim, and moved to avoid the bondsmen’s lien under § 522(f); she served the motion at addresses shown on the 2007 abstract and on the state-court attorney’s 2007 address.
- The bondsmen did not oppose; the bankruptcy court granted the lien-avoidance motion, Dobos received a discharge February 3, 2014, and the case was closed.
- Kassabian filed to reopen on September 1, 2015 claiming lack of notice; the case was reopened March 19, 2018. Meanwhile, on January 2, 2018 the bondsmen filed an adversary complaint seeking nondischargeability under § 523.
- Dobos moved to dismiss the adversary complaint arguing (1) notice to bondsmen was proper, (2) the complaint was untimely under Rule 4007(c), and (3) the 2007 state judgment had expired under Cal. Civ. Proc. Code § 683.020 and therefore was unenforceable. The bankruptcy court granted the motion; the bondsmen appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court erred in treating post-answer motion as not converted to summary judgment | Bondsmen: motion to dismiss filed after answer should be treated as summary judgment and they needed chance to submit evidence | Dobos: motion may be treated as judgment on the pleadings; court may judicially notice bankruptcy and judgment documents | Court: motion properly considered as judgment on the pleadings; judicially noticeable documents considered; no error |
| Whether bondsmen’s adversary complaint was time-barred or untimely | Bondsmen: they lacked notice and filed promptly once aware; renewal deadline protected by bankruptcy law | Dobos: state judgment expired and § 108(c) did not extend renewal right beyond statutory date; thus no enforceable claim existed | Court: judgment expired before adversary was filed; § 108(c) does not indefinitely suspend expiration; complaint dismissed |
| Effect of reopening the bankruptcy case on timeliness/substantive rights | Bondsmen: reopening implied approval of timeliness and preserved rights to litigate | Dobos: reopening is ministerial and does not decide merits or timeliness | Court: reopening is ministerial and did not decide timeliness or revive expired judgment |
| Adequacy of notice to bondsmen of the avoidance motion | Bondsmen: service used old addresses so notice was improper | Dobos: service to addresses on abstract and counsel was proper; bondsmen failed to present evidence they lacked notice | Court: relied on judicially noticeable service evidence; bondsmen offered no contrary admissible evidence; no need to resolve notice because judgment had expired |
Key Cases Cited
- Narayanan v. British Airways, 747 F.3d 1125 (9th Cir.) (de novo review standard for Rule 12(b)(6))
- Elvig v. Calvin Presbyterian Church, 375 F.3d 951 (9th Cir.) (post-answer 12(b) should be treated as Rule 12(c) judgment on the pleadings)
- Spirtos v. Moreno, 221 F.3d 1079 (9th Cir.) (interpretation of § 108(c) in relation to California judgment renewal)
- Banks v. Gill Distribution Centers, Inc., 263 F.3d 862 (9th Cir.) (distinction between filing state action and reducing to judgment for dischargeability inquiries)
- Cusano v. Klein, 264 F.3d 936 (9th Cir.) (reopening a bankruptcy case is a ministerial act)