Court Opinion

ID: 206078
Source: CourtListenerOpinion
Date Created: 2011-03-05 01:05:38+00
Date Added: 2024-06-11T17:27:50.539463
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             MAR 04 2011

                                                                        MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                      U .S. C O U R T OF APPE ALS

                             FOR THE NINTH CIRCUIT

In the Matter of: MORRY WAKSBERG,                No. 09-56405
M.D., INC.,
                                                 D.C. No. 2:08-cv-07399-MMM
               Debtor - In Re,

                                                 MEMORANDUM *
MORRY WAKSBERG, M.D., INC.,

               Debtor - Appellant,

  v.

LEVENE, NEALE, BENDER, RANKIN
& BRILL L.L.P.,

               Appellees.

                    Appeal from the United States District Court
                       for the Central District of California
                   Margaret M. Morrow, District Judge, Presiding

                            Submitted February 15, 2011 **

Before:        CANBY, FERNANDEZ, and M. SMITH, Circuit Judges.

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
          **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      Morry Waksberg, M.D., Inc. (“the corporation”) appeals from the district

court’s order dismissing its appeal from the bankruptcy court’s order granting

Levene, Neale, Bender, Rankin & Brill L.L.P.’s application for compensation in

underlying Chapter 7 proceedings. We have jurisdiction under 28 U.S.C. § 158(d).

We review for an abuse of discretion. Nat’l Bank of Long Beach v. Donovan (In re

Donovan), 871 F.2d 807, 808 (9th Cir. 1989) (per curiam). We vacate and remand.

      The district court dismissed the appeal partly because of the corporation’s

apparent noncompliance with Bankruptcy Rule 8006. The corporation’s principal,

Morry Waksberg, had filed one of the requisite documents in his related, individual

bankruptcy appeal—proceeding before the same district court and involving the

same opposing party—under the mistaken assumption that it was redundant to file

the same document in both cases. However, the district court gave no warning

before dismissal that the corporation was procedurally delinquent. Under these

circumstances, it was an abuse of discretion to dismiss the action based on

procedural noncompliance. See Ehrenberg v. Cal. State Univ. (In re Beachport

Entm’t), 396 F.3d 1083, 1087 (9th Cir. 2005) (before dismissal, the court should

consider whether informed review is possible in light of the record that has been

provided); Myers v. Shekter (In re Hill), 775 F.2d 1385, 1387 (9th Cir. 1985) (per

curiam) (“[W]hen any court is considering the imposition of sanctions for

                                          2                                   09-56405
non-jurisdictional, procedural defaults and deficiencies in the management of

litigation, the selection of the sanction to be imposed must take into consideration

the impact of the sanction and the alternatives available to achieve assessment of

the penalties in conformity with fault.”).

      The district court also relied in part on the determination that the corporation

was not represented by counsel. However, with the consent of the district court,

counsel appeared for the corporation over a month before the dismissal. Cf. United

States v. High Country Broadcasting Co., 3 F.3d 1244, 1245 (9th Cir. 1993) (per

curiam) (affirming dismissal of action where the corporation failed to retain

licensed counsel after the district court ordered it to do so).

      Finally, the district court based its dismissal in part on the corporation’s

suspended status under California law. However, the corporation revived its good

standing while the appeal was still before the district court. Accordingly, it was an

abuse of discretion to bar the corporation from litigating the merits of its appeal

because of its previously-suspended status. See Gough v. Titus (In re Christian &

Porter Aluminum Co.), 584 F.2d 326, 331 (9th Cir. 1978) (the law under which a

corporation is organized determines its capacity to litigate in federal court);

Peacock Hill Ass’n v. Peacock Lagoon Constr. Co., 503 P.2d 285, 287 (Cal. 1972)

(under California law, the revival of corporate powers either pre- or post-judgment

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has the effect of validating the corporation’s earlier acts and permitting it to

proceed with the action).

      The parties shall bear their own costs on appeal.

      VACATED and REMANDED.

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