Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_94-cv-05414/USCOURTS-caed-1_94-cv-05414-3/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Property Damage

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UNITED STATES DISTRICT COURT

 EASTERN DISTRICT OF CALIFORNIA

NATIONAL UNION FIRE

INSURANCE COMPANY OF

PITTSBURGH, PA,

Plaintiff,

v.

CHESTER S. GARBER AND

EMILIA T. GARBER,

Defendants.

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DISTRICT COURT CASE

NO. 94-5414 AWI DLB

BANKRUPTCY COURT CASE

NO. 94-14422-A-7

BANKRUPTCY ADVERSARY

PROCEEDING

NO. 94-1361-A

ORDER RE: MOTION TO REFER

PROCEEDING BACK TO BANKRUPTCY

COURT

This case has a long and complex background. The court refers to the detailed history set

forth in the July 18, 2006 Order written by Judge Robert E. Coyle. Doc. 343. In summary, the

Garbers executed certain promissory notes in 1984 for which National Union acted as surety. 

The Garbers subsequently defaulted. National Union sued the Garbers and was ultimately

awarded $155,637.39 in damages (Case No. CV-F-88-0088 REC). The Garbers did not pay the

civil judgment and filed for bankruptcy. National Union alleges that they fraudulently transferred

their assets to Betty Ting, a family member. National Union then filed this suit to avoid the

transfers and enforce payment of the previous civil judgment. Simultaneously, they filed

Adversary Proceeding No. 94-1361 in the Garbers’ bankruptcy, asserting that the civil judgment

is nondischargeable. In the course of prosecuting this case, the relation to the adversary

proceeding was raised by the parties. In 1995, Judge Coyle ruled that “this court, although not

Case 1:94-cv-05414-AWI-DLB Document 368 Filed 08/29/07 Page 1 of 3
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familiar with the facts underlying National Union’s claims of fraudulent transfer, is very familiar

with the facts underlying the entry of the original judgment. Moreover, if the court retains the

Counterclaim and Third Party Complaint in order to resolve the various motions to dismiss, it

will be more judicially expeditious to have this court hear both the adversary proceeding and the

Complaint. Consequently, the court concludes that it will withdraw the reference to the

bankruptcy court of the adversary proceeding filed by National Union.” Doc. 69, at 13:13-22. 

The case then proceeded for several years. In the July 18, 2006 Order, Judge Coyle

clearly stated, “the court concludes that the satisfaction of the judgment in the Bond Case [the

$155,637.39] moots all issues in this action except those issues relating to the sanction to be

imposed on Betty Ting because of her spoilation of evidence and those issues relating to National

Union’s request for an award of attorneys’ fees and costs against the Garbers and Ting.” Doc.

343, at 23:20-24:2. National Union has appealed this Order to the Ninth Circuit. Doc. 346. 

National Union now asks the court to refer the adversary proceeding to the bankruptcy

court. Doc. 357. National Union argues:

Following the withdraw of the reference of the adversary proceeding, it does not appear

that a separate district court case number was ever assigned to the action. Furthermore,

none of the parties to the adversary proceeding took any action with respect to the

proceeding. It was National Union’s position that there was no need to proceed with the

adversary proceeding until there was a final determination with respect to the fraudulent

transfer action because, depending on the outcome in, there may have been no need to

proceed with the adversary proceeding. This court has now rendered its decision with

respect to the fraudulent transfer action and National Union has decided that the

adversary proceeding now must move forward.

Doc. 358, at 3:1-8. National Union characterizes the adversary proceeding as one which “seeks

to deny the Garbers their discharge and seeks a determination that certain debts owing by the

Garbers to National Union are non-dischargeable.” Doc. 358: at 2:14-15. In the adversary

compliant filed in bankruptcy court, National Union stated “National Union has suffered a loss in

an amount in excess of $155,637.39, which includes post-judgment costs, attorney’s fees and

interest accrued to date. By reason of the foregoing, National Union is entitled to an order that

the obligation of Defendant to National Union is nondischargeable.” See Doc. 1 in Bankruptcy

File No. 94-1361, at 8:2-7. In this district court case, National Union’s complaint states,

“National Union was and still is entitled to judgment against the Garbers in the amount of

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$155,637.39. In addition, Notional Union is entitled to interest accrued from the date of original

entry of the judgment, as well as costs accrued and incurred in enforcing such judgment....

National Union prays for judgment as follows: Voiding the Garbers’ transfer of the stock

certificates of Emilia Chua Ting, M.D., Incorporated to Betty Ting and allowing enforcement of

the original judgment entered against the Garbers together with interest and costs, against such

property, less any applicable exemptions and superior liens.” Doc. 1, Complaint, at 8:25-10:17. 

The two complaints essentially ask for the same relief. 

Given the fact that the existing district court case and the adversary proceeding shared the

exact same subject matter, National Union is mistaken in its contention that the withdrawn

adversary proceeding should have become its own case with its own case number. The court

believes that Judge Coyle’s order withdrew the adversary proceeding directly into the present

district court case, effectively consolidating it. Judge Coyle’s July 18, 2006 Order was a ruling

on all substantive matters in the case. This court finds that order encompasses the adversary

proceeding. Since the July 18, 2006 Order is on appeal to the Ninth Circuit, this court lacks the 

jurisdiction to revisit the merits of the case. See Pyrodyne Corp. v. Pyrotronics Corp., 847 F. 2d

1398, 1403 (9th Cir. 1988). 

The motion is DENIED for lack of jurisdiction. 

IT IS SO ORDERED.

Dated: August 29, 2007 /s/ Anthony W. Ishii 

0m8i78 UNITED STATES DISTRICT JUDGE

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