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COLETTE F. STONE, ESQ. (SBN: 129773)

RONALD F. BERESTKA, JR. ESQ. (SBN: 155707

LYDIA V. KO, ESQ. (SBN: 272588)

STONE & ASSOCIATES

A Professional Corporation

2125 Ygnacio Valley Road, Suite 101

Walnut Creek, CA 94598

Telephone: (925) 938-1555

Facsimile: (925) 938-2937

Email: cstone@stonelawoffice.com

rberestka@stonelawoffice.com

Attorneys for Defendants,

GEORGE M. VLAZAKIS; MARIA BARBIS; JOHN BARBIS; 

and ATHANASIA V. VLAZAKIS

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In Re:

PG&E CORPORATION, 

And

PACIFIC GAS AND ELECTRIC COMPANY,

Debtors,

 Affects PG&E Corporation

 Affects Pacific Gas and Electric Company

 Affects Both Debtors

*All papers shall be filed in the Lead Case, no. 

19-30088 (DM)

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CASE NO. 19-30088 (DM)

Chapter 11

MOTION AS TO INAPPLICABILITY 

OF STAY, AND IN THE 

ALTERNATIVE FOR RELIEF FROM 

STAY

Title 11 U.S.C. §§362(a)(1) and (d)

Date: December 17, 2019

Time: 10:00 a.m.

Dept.: 17

450 Golden Gate Ave

San Francisco, CA 94102

Judge: Dennis Montali

Objection Deadline: December 12, 2019

Time: 4:00 p.m. (Pacific Time)

I. INTRODUCTION/SUMMARY OF ARGUMENT

On January 29, 2019, PG & E Corporation and Pacific Gas & Electric Company filed for 

Chapter 11 bankruptcy protection. Four months later, on June 4, 2019, Pacific Gas & Electric 

Company (PG & E) filed a lawsuit in the California Superior Court, County of Alameda, Case 

number RG19021463, against Athanasia Vlazakis, George Vlazakis, John Barbis and Maria Barbis 

(collectively Vlazakis defendants). PG & E through its state court lawsuit claims that the 

Vlazakises are trespassing and have created a nuisance by continuing to utilize a common party 

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wall attached to PG & E’s building to support the roof structure of Vlazakis’ adjoining building. 

PG & E seeks injunctive relief for removal of the alleged encroachment of the Vlazakis’s building; 

essentially PG & E wishes to gain court approval to tear down the party wall which will cause the 

Vlazakis’ building to collapse. Significantly, these adjoining structures have been in place for 

more than 60 years. 

The Vlazakises answered the complaint and sought to file an affirmative cross-complaint 

against PG & E, including a quiet title claim in which they seek to establish legal and equitable 

rights to continued use of the party wall. PG & E claims that such a cross-complaint—which is a 

compulsory cross-complaint under California law—is barred by the automatic stay. The crosscomplaint is compulsory because the claims therein are directly related to those asserted in PG & 

E’s lawsuit, and it seeks to resolve the very same issue posited by PG & E’s complaint, to wit, 

whether the Vlazakises have a right to the continued use of the party wall or whether their conduct 

amounts to a trespass and/or nuisance. Significantly, the claims sought to be asserted in the 

Vlazakis’ compulsory cross-complaint will be forever barred if the stay prohibits its filing.

Ironically, PG & E seeks to pursue injunctive relief at the state trial court level in equity to 

tear the wall down, while at the same time barring the Vlazakises from filing a mandatory crosscomplaint to assert their right to continued use of the party wall, which if established, would bar 

PG & E’s claim. 

Here, PG & E refuses to acknowledge that the stay is inapplicable as the current lawsuit is 

a post-bankruptcy filing, nor will PG & E stipulate to relief from the stay for this action to permit 

an orderly and fair process by which the Vlazakises could defend themselves and their property 

rights by showing a continued right to use of the wall.

II. RELIEF REQUESTED

By this application the Vlazakises seek the following:

A. A determination by the Bankruptcy Court that the automatic stay does not apply to the 

state court action filed by PG &E and the Vlazakis’ proposed compulsory crosscomplaint, as both occurred after PG & E’s bankruptcy filing and the Vlazakises had no 

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reason to file a lawsuit, much less the proposed cross-complaint, until after PG & E 

filed suit. See 11 USC §362 (a)(1); or in the alternative:

B. For an order lifting the bankruptcy stay for “cause” under basic concepts of equity and 

fairness, as the causes of action in PG & E’s state court action are directly related to 

those contained in the Vlazakis’ proposed compulsory cross-complaint, the Vlazakis’

asserted legal and equitable claims will be forever barred if the cross-complaint cannot 

be filed, and the stay will deny the Vlazakis’ right to a trial by jury on issues therein

guaranteed under the California Constitution. 11 USC §362 (d)(1); Cal. Civ. Proc. 

Code §426.30; Arciero Ranches v. Meza, 17 Cal.App.4th 114, 125-126 (1993)

III. FACTUAL BACKGROUND

A. The PG & E and Vlazakis Properties

In 2015, plaintiff, Pacific Gas and Electric Company, (PG & E) purchased property in 

Oakland, California, with street addresses of 205-209 Brush Street (parcel APN 001-0111-005)

(Exhibits 1 and 2 attached to the Declaration of Ronald F. Berestka, JR.)

1 PG & E alleges that it 

purchased this property in order to construct a natural gas pipeline substation. (Exhibit 1) PG & 

E’s property is adjacent to, and shares an entire city block with, property owned by the Vlazakises, 

which have street addresses of 225-229 Brush Street and 751 Third Street (APN 001-0111-001 and 

001-0111-002). (Exhibits 1 and 2) (Declaration of Maria Barbis ¶2) 

Located on PG & E’s property is a long-standing brick building that is fronted on Third 

Street roughly to the north. (Declaration of Maria Barbis ¶3) The eastern-facing wall of PG & E’s 

brick building runs along the property line with the Vlazakis’ property and is adjacent to the 

Vlazakis’ 751 Third Street building. (Declaration of Maria Barbis ¶3) The 751 Third Street 

building has a series of three support I-beams, all on the Vlazakis’ property, which are bolted to 

the brick wall of PG & E’s building, and act to support the Vlazakis’ building. (Exhibtt 1) These 

braces have been in place for at least 50 years, pre-dating the Vlazakises purchase of their property 

in 1960. (Declaration of Maria Barbis ¶3) 

1 All references to exhibits herein shall be to the evidence attached to the Declaration of Ronald F. Berestka Jr., unless 

otherwise noted.

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At some point in time, PG & E determined that it would be necessary to demolish its brick

building in order to construct the substation. Given that the east-facing wall of the brick building 

acts to support the Vlazakis’ 751 Third Street building, PG & E approached the Vlazakises and 

proposed a solution which essentially required a lot line adjustment extending the Vlazakis’ 

property to include the entire subject brick wall, with PG & E agreeing to shore up that wall so that 

it would continue to support the Vlazakis’ 751 Third Street building. (Exh. 1 Complaint with 

Contract attached thereto as Exhibit B) This agreement was reduced to a written contract that was 

signed by PG & E and the Vlazakis defendants. (Exh. 1 Complaint with Contract attached thereto 

as Exhibit B) The Vlazakises satisfied their obligations under the contract, PG & E obtained 

permits to conduct the shoring work, and the lot line adjustment was submitted for approval. 

(Exh. 2; Exh.7, City of Oakland for approval of lot line adjustment)

Subsequently, PG & E notified the Vlazakises that it could not move forward with the 

promised lot line adjustment and shoring of the brick wall, stating that the proposed structural 

repair of the common wall was unfeasible. 

Only recently was it discovered that the reason PG & E failed to honor the agreement was 

that it miscalculated the amount of space that it would need to construct the vault to house its 

natural gas substation. (Berestka Declaration ¶7) PG & E either did not account for size of, or 

miscalculated the space necessary for the footing required to shore up the wall that supports the 

Vlazakis’ building. 

C. PG & E Files for Chapter 11 Bankruptcy Protection

On January 29, 2019, PG & E filed for Chapter 11 bankruptcy protection.

D. PG & E Files Lawsuit in California State Court

On June 4, 2019, PG & E sued the Vlazakis family defendants alleging that the support I 

beams attached to the brick wall constituted a nuisance and a trespass, and PG & E sought 

injunctive relief to permit the demolition of the common party brick wall, which would cause the 

collapse of the Vlazakis’ 751 Third Street building. (Exh. 1) This matter is set for a bench trial set 

to commence on May 12, 2020. The trial court has determined that the current pleadings permit 

trial of the “equitable” issue of the permanent injunction sought by PG & E, first.

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E. The Vlazakis’ Answer and Proposed Cross-Complaint

The Vlazakises answered plaintiff’s complaint denying PG & E’s claims. The Vlazakises 

assert a right to damages for PG & E’s breach of contract with regard to the disputed property 

which would have given the Vlazakis’ ownership of the disputed common party wall. Further, the 

Vlazakises contend that they possess a right to use of the wall as it is a common party wall 

pursuant to California Civil Code §801(12). (Exh. 2) The Vlazakises also have prepared and 

intend to file an amended answer that also includes the affirmative defenses of consent, right to 

easement, privilege, private necessity, and accord and satisfaction.

Moreover, the Vlazakises allege in their proposed cross-complaint, among other things, a 

claim to quiet title based on adverse possession and prescriptive easement, a claim that the brick 

wall with the attached braces is a common party wall, and that the Vlazakises are entitled to 

specific performance and damages for PG & E’s breach of contract which required PG & E to 

transfer ownership of the wall to the Vlazakises. (Exh. 3)

Significantly, the Vlazakises will be entitled to a jury trial as to the prescriptive easement 

and adverse possession claims - before equitable issues of the current May 12, 2020 trial - if the 

cross-complaint is permitted. This would then require resetting this action for a jury trial in the 

state court.

F. California Trial Court Refuses to Allow Filing of Cross-Complaint Citing 

Potential Bankruptcy Stay

On November 4, 2019, the Vlazakis defendants sought leave to file their compulsory crosscomplaint against PG & E. PG & E opposed the application arguing that the bankruptcy stay 

prohibited the filing of the cross-complaint. (Berestka Decl. ¶10) The trial court denied the 

Vlazakis’ request without prejudice, stating that it would not make the determination as to whether 

the automatic bankruptcy stay was applicable in this instance. The court instructed defense 

counsel to petition the bankruptcy court for adjudication of the applicability of the stay, and/or to 

obtain relief from the stay. The instant motion followed.

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IV.LEGAL DISCUSSION/BASIS FOR RELIEF REQUESTED

A. Bankruptcy Stay Inapplicable to Proposed Cross-Claims in a Lawsuit Filed After PG 

& E’s Bankruptcy Petition

Title 11 USC 362 (a) states that the filing of a bankruptcy petition operates as an automatic

stay of:

(1) the commencement or continuation, including the issuance or employment of process, 

of a judicial, administrative, or other action or proceeding against the debtor that was or 

could have been commenced before the commencement of the case under this title, or 

to recover a claim against the debtor that arose before the commencement of the case 

under this title;

Simply put, the stay does not apply to the present action and the proposed cross-complaint.

Here, PG & E filed it bankruptcy petition on January 29, 2019. Four months later, on 

June 4, 2019, PG & E initiated suit against the Vlazakises in California state court. The Vlazakises 

now seek to file a compulsory cross-claim against PG & E in the state court action filed after PG & 

E declared bankruptcy. Clearly the Vlazakises did not commence or continue an action before PG 

& E’s bankruptcy petition.

Undoubtedly PG & E will argue that somehow the Vlazakises should have divined PG & 

E’s intent and motivation prior to PG & E’s bankruptcy petition, anticipated a claim, or could have

filed some type of preemptive suit against PG & E. This is absurd. 

First, prior to PG & E initiating its state court lawsuit—months after it had petitioned for 

bankruptcy—the Vlazakises had no reason to sue PG & E. There simply was no reason to assert 

the claims contained in the cross-complaint until after PG & E had declared bankruptcy. 

Here the proposed cross-claims under a quiet title action are in response to PG & E failing 

to assert its title to the property as against the Vlazakises. Ordinarily there is no reason for one to 

assert a quiet title claim until a dispute regarding the title or use of the premises arises. Moreover, 

under California law, the adverse possession vests as a matter of law when specific conditions are 

met. See Marriage v. Keener, 26 Cal.App.4th 186, 190-191 (1994) (citing Richmond Cedar 

Works v. Pinnix, 208 F. 785, 795 (D.N.C. 1913) ["[i]t is said that the ground upon which the 

disseisor acquires title by adverse possession is the laches of the owner"] and Berger v. Horsfield,

188 A.D. 649 [176 N.Y.S. 854, 856] (1919) ["title gained by adverse possession rests upon the 

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laches of the real owner who fails to assert his title against the one claiming adversely ...."].)” 

“California law does not require a plaintiff to bring an action to perfect his or her claim of adverse 

possession. Rather, it is the record owner - not the intruder - who must bring an action within five 

years after adverse possession commences in order to recover the property. (Code Civ. Proc., 

§ 318.) ‘Occupancy for the [five-year] period prescribed by the Code of Civil Procedure as 

sufficient to bar any action for the recovery of the property confers a title thereto, denominated a 

title by prescription, which is sufficient against all ....’ (Civ. Code, § 1007.) ‘[W]hen fee is once 

acquired by a [sic] five years' adverse possession it continues in the possessor till conveyed in the 

manner prescribed for the conveyance of titles acquired in other modes ....’ (Cannon v. Stockmon

(1869) 36 Cal. 535, 541)” Keener, 26 Cal.App.4th at 191-192.

Here it is undisputed that the Vlazakises owned the premises adjacent to the brick wall at 

issue, along with the structure depending on the wall for support since at least 1960. Any claimed 

easement or adverse possession then would have vested and there was no claim for them to file 

until their right was challenged by PG & E’s lawsuit in June of 2019, well after PG & E’s 

bankruptcy petition. At that point, it was PG & E’s obligation to file suit, not the Vlazakises.

Similarly, there was no reason to assert a breach of contract claim, or the other causes of 

action now contained in the proposed cross-complaint given that these potential claims were not 

factually ripe—the Vlazakises had no reason to file suit until events developed indicating that PG 

& E was wrongly breaching the contract and that PG & E may have engaged in bad faith conduct

to support its claim that the agreement was not feasible, which in this instance, was the result of 

PG & E’s own failure to properly calculate the space required for its substation. Certainly, it is not 

the policy of our judicial system to encourage that lawsuits be filed before one has determined 

actual cause to assert a claim.

Second, there was no complaint against the Vlazakises by PG & E to which they could 

have filed a cross-complaint (which by definition, requires a complaint in the first instance), until 

PG & E’s state court lawsuit which, as shown above, was several months post-bankruptcy petition. 

In sum, the Vlazakis’ claims in its proposed cross-complaint were not commenced before 

PG & E’s bankruptcy petition, nor “could” they have been. Anyone “could” file a lawsuit at any 

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time, even without good cause, or a good faith belief in a claim. Here, the cause to file a claim 

against PG & E was not apparent and the Vlazakises had no good faith basis to file a lawsuit until 

after the bankruptcy petition. As such, the automatic stay is inapplicable here.

B. In the Alternative, Cause Exists to Lift the Stay to Ensure that the Vlazakis’

Substantive Legal Rights are not forever Barred, and to Protect their right to a Jury 

Trial in the State Court Action

Title 11 U.S.C. § 362(d)(1) of the Bankruptcy Code provides that "[o]n request of a party 

in interest and after notice and a hearing, the court shall grant relief from the stay provided under 

subsection (a) of this section, such as by terminating, annulling, modifying or conditioning such 

stay, ... for cause, including the lack of adequate protection of an interest in property of such party 

in interest."

“Cause” as used in Bankruptcy Code §362(d)(1), “has no clear definition and is determined 

on a case-by-case basis.” Christensen v. Tucson Estates, Inc., 912 F.2d 1162, 1166 (9th Cir. 

1990); accord In re Castlerock Properties, 781 F.2d 159, 161 (9th Cir. 1986); In re Beguelin, 220 

B.R. 94, 97-98 (9th Cir. BAP 1998). “Cause” warranting relief from the automatic stay is an 

intentionally broad and flexible concept, made so in order to permit courts to respond in equity to 

inherently fact-sensitive situation. In re Sentry Park Ltd., 87 B.R. 427, 430 (BK. W.D. Tex. 1988). 

In determining whether “cause” exists to terminate and vacate the automatic stat requires an 

inquiry into the totality of the facts and circumstances of a particular case and a balancing of the 

equities between the parties. In re Barrows, 15 B.R. 338, 341 (Bankr. M.D. Pa. 1981)(“[a]s a 

court of equity, the Bankruptcy Court must consider the impact of the stay on the parties and the 

‘balance of hurt’ in fashioning relief”). A judge may determine cause on a case-by-case basis, and 

may grant relief from stay on any basis, including but not limited to statutory causes. In re Tucson 

Estates, Inc., 912 F.2d 1162 (9th Cir. 1990); In re Santa Clara County Fair Ass 'n, 180 B.R. 564 

(B.A.P. 9th Cir. (Cal.) 1995).

Cause exits to grant relief from automatic stay in this instance as it is manifestly 

inequitable to allow Debtor in possession PG & E to pursue an affirmative lawsuit as a plaintiff in 

a state court action while at the same time utilizing the automatic stay to deny the defendants the 

right to assert defenses to that claim and pursue a compulsory cross-claim that arises out of the 

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same facts as those which form the basis for the Debtor’s action. Indeed, if the Vlazakises are not 

permitted to file and pursue their compulsory cross-complaint now, those claims are forever barred

under California law. Cal. Code Civ. Proc. §426.30. No greater prejudice can be imagined.

Here it is indisputable that the claims set forth in the Vlazakis’ proposed cross-complaint 

meet the very definition of a statutory compulsory cross-complaint. Under California law, a

defendant in an action is required to assert as a "cross-complaint" any "related cause of action." 

Cal.Civ.Proc.Code § 426.30. A related cause of action is defined as "a cause of action which arises 

out of the same transaction, occurrence, or a series of transactions or occurrences as the cause of 

action which the plaintiff alleges in his complaint." Cal.Civ.Proc.Code § 426.10. As noted above, 

failure to bring the compulsory cross-complaint results in a waiver of those causes of action. 

Given that the proposed cross-complaint relates solely to the brick wall and legal and equitable 

rights to the use thereof, the cross-complaint indisputably arises out of the transaction, occurrences 

and events giving rise to the allegations contained in PG & E complaint.

Given these facts, permitting PG & E to use the bankruptcy stay to bar the Vlazakis’

compulsory cross complaint would not only force them to fight PG & E’s action with both hands 

tied behind their back, it would also forever prohibit the Vlazakises from establishing legal and 

equitable rights to the subject brick wall, whether they be contractual, via easement or adverse 

possession, any one of which would defeat the claims asserted in PG & E’s complaint. 

Moreover, not only would barring the Vlazakis’ cross-complaint be patently unjust, it 

would deprive them of their right to a jury trial and Due Process rights under the 14th Amendment 

to the United States Constitution. The law is well-established that a claim for a prescriptive 

easement or adverse possession entitles the party asserting such rights to a trial by jury in 

California. (Arciero Ranches v. Meza, 17 Cal.App.4th 114 (1993) (claim for prescriptive easement 

seeks common law legal remedy entitling party to jury trial before equitable remedies to the 

property can be addressed)). As such, a refusal to lift the stay would not only deprive the 

Vlazakises of substantive legal rights to pursue their claims, it would deprive them of their 

constitutional right to a jury trial in California. Id. at 125-126 (common law legal remedy required 

to be tried by jury before equitable issues under California Constitution)

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The Vlazakises did not pick this fight, rather they were dragged into court by PG & E. As 

such, PG & E should not be permitted to use the Vlazakises as a punching bag and expect not to

get punched back. As a court in equity, this court should afford the Vlazakises relief from stay 

and allow them to prove their right to ownership or continued use of the brick wall in order to save 

the structure that exists on the Vlazakis’s premises from destruction, and to ensure that they are not 

deprived of their right to a jury trial under the California Constitution.

V. CONCLUSION

PG & E is seeking to use the bankruptcy stay as both a shield and a sword. It filed a state 

court action regarding the subject brick wall and then claims that the bankruptcy stay prohibits the 

Vlazakises from proving that they possess legal and equitable rights to continued use of the wall. 

In doing so, PG & E looks to forever bar the Vlazakises from asserting their rights to ownership or

use of the subject brick wall as required by the compulsory cross-complaint statute, and rob the 

Vlazakises of their right to a jury trial in this matter. This is outrageous to say the least.

As set forth herein, the Vlazakises respectfully request that this court deem the automatic 

stay inapplicable to the pending state court action which PG & E filed several months after its 

bankruptcy petition. In the alternative, the Vlazakises respectfully request that the stay be lifted to 

permit the fair, just and complete resolution of all claims asserted by both PG & E and the 

Vlazakises with regard to the property at issue.

DATED: November 21, 2019 STONE & ASSOCIATES

By 

COLETTE F. STONE

RONALD F. BERESTKA, JR.

LYDIA V. KO

Attorneys for Defendants

GEORGE M. VLAZAKIS; MARIA A. BARBIS;

JOHN A. BARBIS; and ATHANASIA V. 

VLAZAKIS

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