People's Bail Bonds v. Dobos (In Re Dobos)People's Bail Bonds v. Dobos (In Re Dobos)
Appearances: Michael D. Kwasigroch argued for appellants People‘s Bail Bonds and Harry Kassabian; Andrew E. Smyth argued for appellee Agneta Dobos.
Before: FARIS, LAFFERTY, and KURTZ, Bankruptcy Judges.
INTRODUCTION
Creditors People‘s Bail Bonds and Harry Kassabian (collectively, “the bail bondsmen“) appeal the bankruptcy court‘s order dismissing their adversary complaint
We agree with Ms. Dobos that the bail bondsmen‘s judgment has expired, so they can no longer enforce the judgment. Therefore, the court was correct to dismiss their nondischargeability complaint, and we AFFIRM. We publish to explain the effect of bankruptcy law on the duration of a prebankruptcy judgment.
FACTUAL BACKGROUND2
A. Prepetition events
Sometime before 2007, Ms. Dobos was arrested, and the bail bondsmen posted a bond to secure her release from custody. Upon meeting Ms. Dobos, Mr. Kassabian realized that she was a “risk” and “immediately . . . revoked her bond and . . . took her back to jail.” Hе stated that he refunded all of her money.
Ms. Dobos filed suit against the bail bondsmen in state court, which resulted in a $52,000 judgment for attorneys’ fees in favor of the bail bondsmen on January 11, 2007.3 The bail bondsmen recorded the judgment, which created a lien against Ms. Dobos’ real property located in Tujunga, California.
B. Ms. Dobos’ chapter 7 petition
Over six years later, on October 25, 2013, Ms. Dobos filed a chapter 7 petition. She scheduled as a secured debt the 2007 judgment debt owed to the bail bondsmen totaling $52,437.98. Hеr mailing matrix included the bail bondsmen‘s address stated on the 2007 abstract of judgment and the name and address of the attorney, Marshall E. Rosenbach, who had represented the bail bondsmen during the state court proceedings.
Ms. Dobos filed a motion to avoid the bail bondsmen‘s lien on her residence (“Motion to Avoid Lien“). She alleged that the residence was worth $250,000 and was subject to a $125,000 first lien in favor of the Los Angeles Housing Authority. She claimed a $175,000 homestead exemрtion. She sought avoidance of the bail bondsmen‘s lien under
Ms. Dobos served the Motion to Avoid Lien via certified mail on Mr. Rosenbach (as “Attorneys for Harry Kassabian“) at his Beverly Hills, California address and on the bail bondsmen at the Northridge,
The bail bondsmen did not oppose the Motion to Avoid Lien.
The bankruptcy court entered an order (“Lien Avoidance Order“) granting the motion. Ms. Dobos received her discharge on February 3, 2014, and the bankruptcy court closed her сase.
Over a year later, on September 1, 2015, Mr. Kassabian filed a motion to reopen Ms. Dobos’ bankruptcy case (“Motion to Reopen“). He claimed that he was not served with the notice of the bankruptcy, the Motion to Avoid Lien, or the Lien Avoidance Order, because the addresses that Ms. Dobos used for him and Mr. Rosenbach, while accurate in 2007, were no longer correct nearly seven years later. He stated that he wanted to filе an opposition to the Motion to Avoid Lien, a motion to set aside the Lien Avoidance Order, and a nondischargeability complaint. In the Motion to Reopen, Mr. Kassabian emphasized that the reopening “lacks independent legal significance and determines nothing with respect to the merits of the case.”
Inexplicably, Mr. Kassabian took no steps to prosecute the Motion to Reopen for more than two years. In Januаry 2018, before the court reopened the case, the bail bondsmen filed their adversary complaint. A clerk‘s note on the docket sheet indicates that the clerk then told the bail bondsmen‘s counsel to obtain a hearing on the Motion to Reopen, and counsel did so.
Ms. Dobos did not respond to the Motion to Reopen or appear at the hearing on that motion. The bankruptcy court granted the Motion to Reopen on Marсh 19, 2018.
C. The adversary proceeding
The adversary complaint, filed January 2, 2018, sought to declare the judgment debt nondischargeable under
The complaint did not clearly lay out the bail bondsmen‘s claims. The key paragraph reads as follows:
Not only was [Ms. Dobos] to pay for [the bail bondsmen‘s] services, she was to grant a lien on her house in favor of [the bail bondsmen], but after judgment [the bail bondsmen] also had a judgment lien. [Ms. Dobos] contracted to grant a lien and implied therein is the duty to safeguard the “res” which she has not, and obtained the agreement to get the bail bond by fraud by agreeing to all of the terms verbally, with no intent to perform, and manipulating the circumstances to attempt to get out of the contract. [Ms. Dobos] has committed malicious prosecution against [the bail bondsmen]. The duty to hold the property and grant the lien for payment to [the bail bondsmen] was a fiduciary duty.
Ms. Dobos filed an answer generally denying the principal allegations. She asserted a single affirmative defense: “This Complaint is barred by the applicable statute of limits [sic]
Three months later, Ms. Dobos filed a motion to dismiss the adversary complaint
Second, she contended that the adversary proceeding was untimely under
Third, Ms. Dobos argued that the 2007 judgment was no longer enforceable, because under
The only evidence that Ms. Dobos offered in support of hеr motion was a declaration of her attorney, Andrew Smyth, authenticating copies of the judgment and documents filed in Ms. Dobos’ bankruptcy case.
The notice of motion attached to the Motion to Dismiss advised the bail bondsmen that, pursuant to Local Bankruptcy Rule 9013-1, any opposition was due fourteen days prior to the hearing. The bail bondsmen did not timely file an opposition to the Motion to Dismiss.
The day before the hearing on the Motion to Dismiss, the bail bondsmen filed an objection to the motion. They argued that the Motion to Dismiss was actually a motion for summary judgment masquerading as a motion to dismiss. They argued that, if it were treated as a motion to dismiss under
The opposition to the Motion to Dismiss did not include Mr. Kassabian‘s declaration attesting to any fact. Instead, it included a declaration by Michael Kwasigroch, his attorney, which merely attached a copy of the answer.
D. The hearing on the Motion to Dismiss and the court‘s ruling
At the hearing on the Motion to Dismiss, the bankruptcy court immediately stated that the opposition to the Motion to Dismiss was untimely and thаt it would not consider it. In addition, the court said that the arguments raised in the opposition concerning summary judgment “border[ed] on being frivolous.”
It rejected the bail bondsmen‘s arguments that the Motion to Dismiss was really a summary judgment motion. As for the issue preclusion argument, the court stated that reopening the case was a ministerial act.
The court further stated that the bail bondsmen failed to put forth any evidence that notice was improper. As such, it could only consider the evidence presented in the Motion to Dismiss. The court concluded that the Motion to Dismiss established that the Motion to Avoid Lien was properly served.
The court entered an order in Ms. Dobos’ favor, granting the Motion to Dismiss. The bail bondsmen timely appealed.
JURISDICTION
The bankruptcy court had jurisdiction pursuant to
ISSUE
Whether the bankruptcy court erred dismissing the bail bondsmen‘s adversary complaint.
STANDARD OF REVIEW
“We review de novo the [trial] court‘s grant of a motion to dismiss under [Civil]
We may affirm on any basis fairly supported by the record. Caviata Attached Homes, LLC v. U.S. Bank, N.A. (In re Caviata Attached Homes, LLC), 481 B.R. 34, 44 (9th Cir. BAP 2012).
DISCUSSION
A. The bankruptcy court could consider the Motion to Dismiss as a motion for judgment on the pleadings.
The bail bondsmen argue that the Motion to Dismiss was untimely because it was filed after Ms. Dobos answered the adversary complaint. They contend that the court should have converted the Motion to Dismiss to a motion for summary judgment and that it erred by denying them the opportunity to submit further facts in response to the summary judgment motion, failing to consider the complaint and Mr. Kassabian‘s declaration, granting Ms. Dobos summary judgment on insufficient evidence, and granting summary judgment by default. All of these arguments are mеritless.
It is true that a
Therefore, the bankruptcy court correctly declined to treat the Motion to Dismiss as a motion for summary judgment.
Construing the motion as a motion for judgment on the pleadings left the bankruptcy court free to consider all of the materials attached to the Motion to Dismiss (with one immaterial exception). The copies of the judgment and papers filed in Ms. Dobos’ bankruptcy case were all properly subject to judicial notice. See Walsh v. Diamond (In re Century City Doctors Hosp., LLC), BAP No. CC-09-1235-MkJaD, 2010 WL 6452903, at *6 (9th Cir. BAP Oct. 29, 2010) (“[C]ourt documents filed in an underlying bankruptcy case are subject to judicial notice in related adversary proceedings and district court lawsuits.” (citing O‘Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957-58 (9th Cir. 1989))). The only other attachments were copies of certified mail receipts showing that Ms. Dobos’ counsel mailed the Motion to Avoid Lien to the bail bondsmen and their state court counsel at their 2007 addresses. But, as we will explain in the following section, the bail bondsmen‘s judgment expired before they filed their adversary proceeding, so Ms. Dobos was еntitled to prevail even if she failed to give proper notice of the Motion to Avoid Lien (or of the bankruptcy case).
B. The bankruptcy court did not err in dismissing the adversary complaint, because the state court judgment had expired.
In her Motion to Dismiss, Ms. Dobos аrgued that she was not indebted to the bail bondsmen any longer because the bail bondsmen had not renewed the judgment that they recovered in 2007. While Ms. Dobos’ interpretation of the law and calculation of dates are wrong, we agree with her conclusion that the state court judgment had expired.
Except as otherwise provided by statute, upon the expiration of 10 years after the date of entry of a money judgment or a judgment for possession оr sale of property:
(a) The judgment may not be enforced.
(b) All enforcement procedures pursuant to the judgment or to a writ or order issued pursuant to the judgment shall cease.
(c) Any lien created by an enforcement procedure pursuant to the judgment is extinguished.
The creditor may renew the judgment for an additional ten years: “[t]he period of enforceability of a money judgment or a judgment for possession or sale of property may be extended by renewal of the judgment аs provided in this article.”
(c) . . . [I]f applicable nonbankruptcy law . . . fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor, . . . and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of –
(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or
(2) 30 days after notice of the termination or expiration of the stay under section 362, 922, 1201, or 1301 of this title, as the case may be, with respect to such claim.
This statute requires us to ascertain the dates specified by
The relevant date under
The relevant date under
Thus, the time by which the bail bondsmen could renew their judgment expired on January 11, 2017. Because the bail bondsmen did not renew their judgment by that date, the judgmеnt expired before they filed their adversary complaint. See Wussler v. Silva (In re Silva), 215 B.R. 73, 76 (Bankr. D. Idaho 1997) (calculating
Ms. Dobos argues that
The bail bondsmen do not claim that they ever renewed the judgment.7 They only argue that, “as long as the debt was not barred prior to bankruptcy, state statutes of limitations are ignored in determining dischargeability of a debt.” They state that “[t]he renewal of the judgment had not passed when the bankruptcy was filed and so it is alive and well. . . . Further, the renewal of judgment issue was not raised in the answer.”
The bail bondsmen are patently mistaken. Their argument implies that, if a judgment debtor seeks bankruptcy protection, a California judgment never expires. They offer no authority for this proposition, and no such authority exists.
The only authority they cite in support of their position, Banks v. Gill Distribution Centers, Inc., 263 F.3d 862 (9th Cir. 2001), is inapplicable to the present case. There, the Ninth Circuit stated that “[t]he questions before us are whether the state court action was timely filed, and whether the filing of that action, without reducing it to judgment, was sufficient to establish a debt . . . .” 263 F.3d at 868 (emphases added). Here, there is no question that the state court action was timely filed and that the claim was reduced to judgment.
The bail bondsmen also contend that Ms. Dobos failed to raise the expiration of the judgment in her answer. But Ms. Dobos denied paragraph 12 of the adversary complaint, which contained the bail bondsmen‘s general allegations concerning the judgment and incorporated Mr. Kassabian‘s attached declaration that alleged that Ms. Dobos owed him over $100,000. She also raised the “statute of
Accordingly, because the judgment expired long before the bail bondsmen filed their adversary proceeding, they can no longer enforce the debt. The bankruptcy court did not err in dismissing the adversary complaint.8
C. The bankruptcy court did not decide the timeliness of the adversary complaint when reopening the case.
The bail bondsmen contend that the bankruptcy court approvеd the timeliness of the adversary complaint by granting the Motion to Reopen. This argument is frivolous.
The bail bondsmen themselves stated, in their Motion to Reopen, that reopening a case has no legal significance. As the bankruptcy court pointed out, the act of reopening a bankruptcy case is ministerial. See Cusano v. Klein, 264 F.3d 936, 948 (9th Cir. 2001) (“the mere reopening of a bankruptcy case is a ministerial act that ‘lacks independent legal significance and dеtermines nothing with respect to the merits of the case‘” (quoting Menk v. Lapaglia (In re Menk), 241 B.R. 896, 913 (9th Cir. BAP 1999))); Lopez v. Speciality Restaurants Corp. (In re Lopez), 283 B.R. 22, 26 (9th Cir. BAP 2002) (“[R]eopening a case is typically ministerial and ‘presents only a narrow range of issues: whether further administration appears to be warranted; whether a trustee should be appointed; and whether the circumstances of reopening necessitate payment of another filing fee.‘” (quoting In re Menk, 241 B.R. at 916-17)). The bankruptcy court did not make any substantive ruling on any aspect of the bail bondsmen‘s claims when reopening the case. Accordingly, the decision to reopen the case had no bearing on the order granting the Motion to Dismiss.
CONCLUSION
The bankruptcy court did not err in dismissing the adversary complaint. Accordingly, we AFFIRM.