1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

FILED

NOV 28 2016

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. EC-16-1087-KuMaJu

 )

ADVANCED MEDICAL SPA INC., ) Bk. No. 15-27456

 )

Debtor. )

________________________________)

 )

MAUREEN YVONNE LAPIERRE, )

 )

Appellant, )

 )

v. ) MEMORANDUM*

 )

ADVANCED MEDICAL SPA INC.; )

ERIC J. NIMS, Chapter 7 Trustee,)

 )

Appellees. )

________________________________)

Argued and Submitted on October 20, 2016

at Sacramento, California

Filed – November 28, 2016

Appeal from the United States Bankruptcy Court

for the Eastern District of California

Honorable Christopher D. Jaime, Bankruptcy Judge, Presiding

 

Appearances: Appellant Maureen Yvonne Lapierre argued pro se;

J. Luke Hendrix argued for Appellee Eric J. Nims,

Chapter 7 Trustee.

 

Before: KURTZ, MARTIN** and JURY, Bankruptcy Judges.

*This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8024-1.

**Hon. Brenda K. Martin, United States Bankruptcy Judge for

the District of Arizona, sitting by designation.
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

INTRODUCTION

Maureen Yvonne Lapierre appeals from an order denying her

motion for relief from the automatic stay. Lapierre sought to

proceed with her pending arbitration proceeding against

chapter 71 debtor Advanced Medical Spa Inc. and to collect any

resulting arbitration award to the extent liability insurance

proceeds were available to pay the award.

The bankruptcy court denied Lapierre’s stay relief motion

because, according to the court, continuation of Lapierre’s

efforts to obtain an arbitration award and to collect that award

from available insurance proceeds would interfere with the

orderly administration of Advanced Medical Spa’s bankruptcy

estate. In so holding, however, the bankruptcy court applied an

incorrect standard of proof. The bankruptcy court, in balancing

the relative harms to the parties, stated that Lapierre had not

met her burden of proof to establish cause for relief from stay. 

The bankruptcy court’s statement demonstrates that it did not

apply the correct standard of proof to Lapierre’s relief from

stay motion, as mandated by § 362(g). 

Accordingly, we VACATE and REMAND so that the bankruptcy

court can apply the correct standard of proof.

FACTS

Lapierre, a former client of Advanced Medical Spa, filed a

state court action against the medical clinic and its president

1Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all "Rule" references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037.

2
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

and primary physician Efrain Gonzalez in 2012 stating causes of

action for medical malpractice and medical battery.2 Lapierre

alleged that Gonzalez was supposed to perform a laser vaginal

rejuvenation procedure and a labiaplasty. Lapierre further

alleged that Gonzalez performed different surgical procedures

than those to which she had consented and that he botched the

procedures. As a result of the botched procedures, Lapierre

claimed, Gonzalez burned, mutilated and disfigured her causing

her a great deal of physical and mental pain and suffering, which

is ongoing.

Advanced Medical Spa filed its chapter 7 bankruptcy petition

in September 2015. At the time of its bankruptcy filing,

Lapierre’s prepetition action had been set for mandatory binding

arbitration in November 2015, but the automatic stay prevented

the arbitration from occurring as scheduled.3

In January 2016, Lapierre filed, pro se, the stay relief

2The parties have not provided us with complete excerpts of

record. But we can and will take judicial notice of the parties’

bankruptcy filings, as reflected in the bankruptcy court’s

electronic docket. See O'Rourke v. Seaboard Sur. Co. (In re E.R.

Fegert, Inc.), 887 F.2d 955, 957–58 (9th Cir. 1989).

3Lapierre filed a prior motion for relief from stay in

October 2015, but that relief from stay motion was denied without

prejudice in November 2015. We do not know the specific reasons

for the denial of this first relief from stay motion because none

of the parties to this appeal obtained the transcript from the

November 10, 2015 relief from stay hearing, at which the

bankruptcy court stated its findings of facts and conclusions of

law orally on the record. According to Lapierre’s opening brief,

that motion was denied because her counsel at the time committed

“procedural errors”. In any event, it is clear from the record

that the parties and the bankruptcy court relied on evidence from

the first relief from stay motion in considering the second

relief from stay motion. We will do the same.

3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

motion from which this appeal arose. By way of the motion,

Lapierre sought to have the automatic stay modified in order to

permit her to prosecute her arbitration proceeding to conclusion

and to enforce any resulting arbitration award only against any

available liability insurance proceeds.

Both the debtor and the chapter 7 trustee opposed Lapierre’s

stay relief motion. The bankruptcy court held a hearing on the

stay relief motion in February 2016 and permitted the parties to

file supplemental briefs. Initially, the court set a continued

hearing on Lapierre’s stay relief motion; however, after

receiving the parties’ supplemental briefs, the bankruptcy court

vacated the continued hearing date and took the matter under

submission without further hearing.

In March 2016, the bankruptcy court issued its written

decision holding that granting Lapierre’s request for relief from

the stay would interfere with the orderly and proper

administration of Advanced Medical Spa’s chapter 7 estate.

According to the bankruptcy court, Advanced Medical Spa’s

bankruptcy schedules indicated that the medical clinic had at

least 35 prepetition creditors – most of them medical malpractice

claimants. Some of those medical malpractice claims were covered

by a CNA Insurance Companies policy, some by a Lancet Indemnity

Insurance policy and some by no insurance.

The bankruptcy court noted that Lapierre’s claim fell under

the CNA policy, which had a per claim limit of $1 million and an

aggregate limit of $3 million per policy period. The policy

period applicable to Lapierre’s claim was December 31, 2011 to

December 31, 2012. The bankruptcy court further noted that the

4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CNA policy was a “wasting policy,” meaning that the costs of

litigating claims made under the policy depleted the proceeds

available to pay those claims. According to the bankruptcy

court, in addition to Lapierre’s case, there were five other

pending medical malpractice cases in which the claimants were

asserting claims against the CNA policy. The bankruptcy court

explained that the total aggregate amount sought by all of the

CNA claimants was unknown but that it likely would equal or

exceed the $3 million aggregate limit – without even taking into

account potential litigation costs.

The bankruptcy court weighed Lapierre’s claims of grievous

injury and her asserted need to expeditiously conclude her

prepetition arbitration against the potential prejudice the

estate would suffer if the court lifted the stay. The court

concluded that the potential prejudice to the estate outweighed

Lapierre’s alleged injuries and need. As the court explained, if

it were to allow Lapierre to proceed with her arbitration, the

limited insurance resources available to compensate the CNA

claimants would be diminished by the costs of litigation incurred

in Lapierre’s arbitration proceeding and effectively would permit

Lapierre to obtain preferential treatment for her claim to the

detriment of the five other CNA claimants. As the court further

explained, allowing Lapierre to proceed could prejudice all of

Advanced Medical Spa’s creditors to the extent the CNA policy

proceeds were exhausted without fully compensating the CNA

claimants.

The court also expressed a great deal of concern that the

continuation of Lapierre’s arbitration proceeding could start “a

5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

race to the courthouse” and could “open the litigation

floodgates” which in turn would deplete the insurance proceeds

and/or cause the estate to incur significant administrative

expenses that otherwise possibly could be avoided.

Citing Truebro, Inc. v. Plumberex Specialty Prods., Inc.

(In re Plumberex Specialty Prods., Inc.), 311 B.R. 551, 559–60

(Bankr. C.D. Cal. 2004), the bankruptcy court stated that

Lapierre had the initial burden to establish a prima facie case 

of cause for relief from the automatic stay and that Lapierre had

not met this burden. As the bankruptcy court put it:

Ms. LaPierre has not met her burden of establishing

cause. Ms. LaPierre has not met her burden because the

court is not persuaded that the potential hardship to

Ms. LaPierre outweighs the potential for prejudice to

the debtor, the estate, and all other unsecured

creditors, particularly those similarly-situated to

Ms. LaPierre, if the motion is granted. 

Order Denying Stay Relief (March 30, 2016) at 4-5.

On March 30, 2016, the bankruptcy court entered its order

denying Lapierre’s stay relief motion, and Lapierre timely

appealed.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(G). An order denying relief from the

automatic stay is a final and appealable order, so we have

jurisdiction under 28 U.S.C. § 158. See Benedor Corp. v. Conejo

Enters., Inc. (In re Conejo Enters., Inc.), 96 F.3d 346, 351 (9th

Cir. 1996).

ISSUE

Did the bankruptcy court abuse its discretion when it denied

Lapierre’s relief from stay motion?

6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

STANDARDS OF REVIEW

We review the bankruptcy court’s denial of relief from the

automatic stay for an abuse of discretion. Id.

A bankruptcy court abuses its discretion if it applies an

incorrect legal standard or if its factual findings are

illogical, implausible or not supported by the record. United

States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).

DISCUSSION

Under § 362, the automatic stay arises upon the filing of

the debtor’s bankruptcy petition. Among other things, the stay

prohibits creditors from continuing to prosecute prepetition

litigation against the debtor. § 362(a)(1); see also

In re Conejo Enterprises, Inc., 96 F.3d at 351. This aspect of

the automatic stay protects both the debtor and the debtor’s

creditors. Id. Without the stay:

certain creditors would be able to pursue their own

remedies against the debtor's property. Those who

acted first would obtain payment of the claims in

preference to and to the detriment of other creditors.

Bankruptcy is designed to provide an orderly

liquidation procedure under which all creditors are

treated equally. A race of diligence by creditors for

the debtor's assets prevents that.

Id. at 352 (quoting H.R. Rep. No. 95-595, at 340, as reprinted in 

1978 U.S.C.C.A.N. 5787, 6297.9).

A creditor seeking to proceed postpetition with litigation

against the debtor typically must request and obtain relief from

the automatic stay. Id. Such relief is granted only upon a

showing of cause. § 362(d)(1); In re Conejo Enterprises, Inc.,

96 F.3d at 351. However, the Bankruptcy Code does not specify

what constitutes cause in this context, so bankruptcy courts must

7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

determine whether cause exists on a case-by-case basis. Id.;

Kronemyer v. Am. Contractors Indemn. Co. (In re Kronemyer),

405 B.R. 915, 921 (9th Cir. BAP 2009).

In In re Kronemyer, this Panel upheld the bankruptcy court’s

consideration of the factors articulated in In re Curtis, 40 B.R.

795, 799–800 (Bankr. D. Utah 1984), for the purpose of

determining whether cause existed to lift the stay to permit the

creditor to proceed with prepetition litigation against the

debtor. In re Kronemyer, 405 B.R. at 921. As the Kronemyer

court stated, “We agree that the Curtis factors are appropriate,

nonexclusive, factors to consider in deciding whether to grant

relief from the automatic stay to allow pending litigation to

continue in another forum.” Id.

The Curtis factors consist of the following twelve

nonexclusive factors:

1. Whether the relief will result in a partial or

complete resolution of the issues;

2. The lack of any connection with or interference with

the bankruptcy case;

3. Whether the foreign proceeding involves the debtor

as a fiduciary;

4. Whether a specialized tribunal has been established

to hear the particular cause of action and whether that

tribunal has the expertise to hear such cases;

5. Whether the debtor's insurance carrier has assumed

full financial responsibility for defending the

litigation;

6. Whether the action essentially involves third

parties, and the debtor functions only as a bailee or

conduit for the goods or proceeds in question;

7. Whether the litigation in another forum would

prejudice the interests of other creditors, the

creditors' committee and other interested parties;

8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8. Whether the judgment claim arising from the foreign

action is subject to equitable subordination under

Section 510(c);

9. Whether movant's success in the foreign proceeding

would result in a judicial lien avoidable by the debtor

under Section 522(f);

10. The interests of judicial economy and the

expeditious and economical determination of litigation

for the parties;

11. Whether the foreign proceedings have progressed to

the point where the parties are prepared for trial, and

12. The impact of the stay on the parties and the

"balance of hurt,"

In re Plumberex Specialty Prods., Inc., 311 B.R. at 559–60

(quoting In re Curtis, 40 B.R. at 799–800).

In weighing the relevant factors, the bankruptcy court is

not required to give equal weight to all factors. In fact, the

balancing of potential harm to the creditor on the one hand and

to the debtor and the bankruptcy estate on the other hand

frequently is dispositive. Compare Green v. Brotman Med. Ctr.,

Inc. (In re Brotman Med. Ctr., Inc.), 2008 WL 8444797, at *6

(Mem. Dec.) (9th Cir. BAP Aug. 15, 2008) (“the bankruptcy court

must balance the potential hardship that will be incurred by the

party seeking relief if the stay is not lifted against the

potential prejudice to the debtor and the bankruptcy estate”)

with In re Curtis, 40 B.R. at 806 ("The most important factor in

determining whether to grant relief from the automatic stay to

permit litigation against the debtor in another forum is the

effect of such litigation on the administration of the estate. 

Even slight interference with the administration may be enough to

preclude relief in the absence of a commensurate benefit.").

In this appeal, the most critical issue we must address is

9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the bankruptcy court’s comments on the burden of proof. While

neither the Ninth Circuit Court of Appeals nor this Panel have

issued a published decision addressing the standard of proof for

establishing cause for stay relief under § 362(d)(1), the

bankruptcy courts within the circuit that have squarely addressed

the issue are trending in a single direction. That trend is

well-represented by the following quote from Plumberex:

The burden of proof on a motion to modify the automatic

stay is a shifting one. To obtain relief from the

automatic stay, the party seeking relief must first

establish a prima facie case that “cause” exists for

relief under § 362(d)(1). Once a prima facie case has

been established, the burden shifts to the debtor to

show that relief from the stay is unwarranted. If the

movant fails to meet its initial burden to demonstrate

cause, relief from the automatic stay should be denied.

Id. at 557 (citations and footnotes omitted). Accord, Wang v.

Votteler (In re Wang), 2010 WL 6259970 at *6 (Mem. Dec.) (9th

Cir. BAP Sept. 23, 2010); In re Am. Spectrum Realty, Inc.,

540 B.R. 730, 737 (Bankr. C.D. Cal. 2015); In re Smith, 389 B.R.

902, 918 (Bankr. D. Nev. 2008).4

Even though there seems to be a consensus regarding the

above-referenced standard of proof, there is no consensus on what

constitutes a prima facie case of cause for relief. This is

hardly surprising. Because cause for relief from the stay must

be decided on a case-by-case basis, In re Conejo Enterprises,

4This trend is consistent with § 362(g), which places the

burden of proof on the debtor on all issues except for the issue

of debtor’s equity in property (when relevant). As one leading

treatise explains, § 362(g) deals with the ultimate burden of

persuasion, whereas the rule requiring the party seeking relief

from stay to present a prima facie case of cause deals only with

the initial burden of production. See 3 Collier on Bankruptcy

¶ 362.10 (16th ed. 2016).

10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Inc., 96 F.3d at 351, it is impossible to define for all relief

from stay motions what will constitute a prima facie case of

cause. Therefore, bankruptcy courts ordinarily must rely upon

generic statements regarding what constitutes a prima facie case

– or prima facie evidence – like the following: “A party's

production of enough evidence to allow the fact-trier to infer

the fact at issue and rule in the party's favor.” Black's Law

Dictionary (10th ed. 2014); see also In re Planned Sys., Inc.,

78 B.R. 852, 860 n.7 (Bankr. S.D. Ohio 1987) (“‘prima facie

evidence’ is such evidence, in judgment of law, as is sufficient

to establish the fact; and, if not rebutted, remains sufficient

for that purpose.”).

Here, we disagree with the bankruptcy court’s statement that

Lapierre had not established a prima facie case of cause for

relief from the automatic stay. The undisputed facts presented

to the bankruptcy court established that Lapierre was a

prepetition medical malpractice claimant who had pending at the

time the bankruptcy petition was filed an arbitration proceeding

against the debtor and Gonzalez that already was scheduled for

hearing. 

On the issue of Lapierre’s harm, Lapierre had presented some

evidence indicating that she was experiencing ongoing pain and

suffering and that she hoped to undergo corrective surgical

procedures to remedy her pain and suffering if she could obtain

an arbitration award sufficient to pay for the corrective

surgical procedures. The bankruptcy court’s decision indicates

that, for purposes of the relief from stay motion, it accepted as

11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

true Lapierre’s statements on the harm she was suffering.5

On the issue of harm to Advanced Medical Spa’s bankruptcy

estate, Lapierre represented in her motion that she only sought

relief from stay for the purpose of collecting whatever insurance

proceeds were available to pay any arbitration award she was able

to obtain, which necessarily would limit the potential impact on

Advanced Medical Spa’s estate.

Under the specific circumstances of this case, we hold that

the above-referenced facts constituted a prima facie case of

cause for relief from the automatic stay. Our holding is

consistent with the legislative comments Congress made at the

time the Bankruptcy Code was enacted. As Congress expressed, “a

5We acknowledge that the evidence Lapierre presented on this

point potentially was subject to legitimate objection. For

instance, we could not find in the relief from stay record any

declaration testimony by Lapierre in which she simply stated that

she was experiencing ongoing pain and suffering as a result of

the procedures Gonzalez conducted on her and that she hoped to

undergo corrective procedures if she could obtain sufficient

funds to pay for the procedures by way of an arbitration award

against the debtor and/or Gonzalez. Instead, she relied on a

declaration in which she only stated that her exhibits were true

and correct copies. In turn, her unauthenticated exhibits

frequently contained multiple layers of hearsay and also

contained many, many alleged facts that were irrelevant to the

key points Lapierre needed to prove to establish her prima facie

case of cause for relief from the automatic stay.

Because the parties opposing Lapierre’s relief from stay

motion – and the bankruptcy court – seemed to accept as true

Lapierre’s statements of harm for purposes of resolving the

relief from stay motion, we decline to resolve this appeal on the

basis of any evidentiary defects in Lapierre’s presentation of

evidence in support of her prima facie case. That being said,

Lapierre must understand that, on remand, she as a pro se

litigant can be held to the same evidentiary standards that

represented parties are held to.

12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

desire to permit an action to proceed to completion in another

tribunal may provide . . . cause” for stay relief, and “it will

often be more appropriate to permit proceedings to continue in

their place of origin, when no great prejudice to the bankruptcy

estate would result, in order to leave the parties to their

chosen forum and to relieve the bankruptcy court from many duties

that may be handled elsewhere.” H.R. Rep. 95-595, 341, as

reprinted in 1978 U.S.C.C.A.N. 5963, 6297 (emphasis added).6

In light of our holding that Lapierre established a prima

facie case of cause for relief from the automatic stay, the

bankruptcy court should have shifted the burden to Advanced

Medical Spa and to the bankruptcy trustee to establish that the

stay should remain in place. As a result, when the bankruptcy

court balanced the respective harms of the parties, the

bankruptcy court incorrectly stated that Lapierre had “not met

her burden because the court is not persuaded that the potential

hardship to Ms. LaPierre outweighs the potential for prejudice to

the debtor, the estate, and all other unsecured creditors

. . . .” (Emphasis added.) Given that Lapierre met her burden

of production, the ultimate burden of persuasion was on the

debtor and the trustee to demonstrate that Advanced Medical Spa’s

harm outweighed Lapierre’s harm. § 362(g); 3 Collier on

Bankruptcy, supra, at ¶ 362.10. 

6Furthermore, we disagree with the notion that Lapierre

needed to establish irreparable harm. But see In re Curtis,

40 B.R. at 801-03. Under the circumstances of this case, it was

sufficient for Lapierre’s prima facie case to include evidence

tending to show that she was experiencing ongoing pain and

suffering, which she might be able to remedy if she were

permitted to proceed with the arbitration to its conclusion.

13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

We are not persuaded that this error regarding the standard

of proof was harmless. If the bankruptcy court – in balancing

the parties’ respective harms – had correctly assigned the

ultimate burden of persuasion to the parties opposing Lapierre’s

stay relief motion, it might have balanced those harms in favor

of Lapierre. The facts presented to the bankruptcy court at the

time it ruled on Lapierre’s relief from stay motion indicated a

close call on the issue of balancing the harms. On the one hand,

the court was faced with Lapierre’s claims of ongoing pain and

suffering which she hoped to ameliorate through corrective

surgery funded by way of an arbitration award to be paid from the

CNA policy. On the other hand, the bankruptcy court was faced

with an estate with thirty-plus medical malpractice claims – six

of which (the court was told) were claims against the CNA

insurance policy. The bankruptcy court further was told that the

six claims against the CNA policy might exceed the policy limits

and that allowing Lapierre to proceed might cause a creditor

“race to the courthouse” and also might diminish estate funds

available to pay claims of creditors not making claims against

the CNA policy.

On these facts, the balancing of the harms reasonably could

have been determined in favor of either side, particularly if the

court had properly assigned the ultimate burden of persuasion to

the parties opposing the relief from stay motion. Consequently,

we must VACATE the the bankruptcy court’s order denying relief

from stay and must REMAND so that the bankruptcy court can apply

the correct standard of proof.

Other facts have come to light during the course of this

14
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

appeal – not presented to the bankruptcy court at the time it

ruled on the relief from stay motion – which tend to undermine

the contention of potential harm to the bankruptcy estate if

Lapierre were to proceed with the prosecution of her arbitration

proceeding. Foremost among them, the bankruptcy trustee admitted

during oral argument before this panel that the bankruptcy estate

is administratively insolvent and that it has few if any assets

to administer. In light of this fact, we cannot conceive how

Lapierre’s completion of her arbitration proceeding and her

collection of any resulting arbitration award from the CNA policy

proceeds could have any impact on Advanced Medical Spa’s

bankruptcy estate or on the estate’s general unsecured creditors. 

Put bluntly, it is impossible to diminish an estate with no

assets.7

In addition, numerous proofs of claim were filed in the

bankruptcy court on March 16 and 17, 2016, on behalf of roughly

40 medical malpractice claimants. Among other things, the

information contained in some of these proofs of claims arguably

7It was undisputed in the underlying relief from stay

proceeding that the CNA policy proceeds were not estate property

and were not available to satisfy the claims of Advanced Medical

Spa’s creditors – except for those entitled to make claims

directly against the CNA policy. Therefore, it is unnecessary

for us to consider whether or when liability insurance policy

proceeds might qualify as property of a debtor’s bankruptcy

estate. For a thorough discussion of the issue, see

In re Endoscopy Ctr. of S. Nevada, LLC, 451 B.R. 527, 541–47

(Bankr. D. Nev. 2011); but see also 3 Collier on Bankruptcy

¶ 362.07[3][a] (16th ed. 2016) (“the better approach is to

consider the policy proceeds to be property of the estate, at

least for purposes of requiring relief from the stay in order to

recover from the insurer on the policy.”)

15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

calls into question the number and amount of the claims made

against the CNA policy that are within the same policy period as

Lapierre. While the number and amount of CNA policy claims as

represented by Gonzalez in his declaration (and as adopted by the

bankruptcy court) are not immediately reconcilable on their face

with the claim amounts and claim dates set forth in the proofs of

claim, this does not necessarily mean that they cannot be

reconciled at all. For instance, the claim amounts might differ

because the proofs of claim might only take into account the

creditors’ claims against Advanced Medical Spa, and not claims

against Gonzalez, even though claims against both parties

presumably would be covered by the CNA policy. Similarly, the

date of the malpractice creditors’ state court complaints might

or might not reflect the date of their claims for purposes of

determining whether the claims are covered by a particular CNA

insurance policy coverage period.

To be clear, we are not saying that any of the above facts

that have come to light while this matter has been on appeal

should have been accounted for by the bankruptcy court before it

ruled on Lapierre’s relief from stay motion. There is nothing in

the record to indicate that these facts were presented to the

bankruptcy court for consideration in conjunction with Lapierre’s

relief from stay motion, and we generally do not consider

documents and evidence not presented to the bankruptcy court for

consideration. See Oyama v. Sheehan (In re Sheehan), 253 F.3d

507, 512 n.5 (9th Cir. 2001); Kirschner v. Uniden Corp. of Am.,

842 F.2d 1074, 1077–78 (9th Cir. 1988). Even so, we are saying

that, on remand, the bankruptcy court might need to address one

16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

or more of these facts because they appear quite pertinent to

determining whether (and to what extent) Advanced Medical Spa’s

estate might be harmed by continued prosecution of Lapierre’s

arbitration proceeding.

CONCLUSION

For the reasons set forth above, we VACATE the bankruptcy

court’s denial of Lapierre’s relief from stay motion, and we

REMAND for further proceedings.

17