Court Opinion

ID: 206261
Source: CourtListenerOpinion
Date Created: 2011-03-09 01:03:21+00
Date Added: 2024-06-11T17:27:51.229107
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                MAR 08 2011

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

In the Matter of: CALSOL, INC.,                  No. 09-56389

              Debtor,                            D.C. No. 2:08-cv-07003-FMC

FIREMAN’S FUND INSURANCE                         MEMORANDUM*
COMPANY,

              Appellant,

  v.

ERNEST JAMES BRADY; et al.,

              Appellees.

                   Appeal from the United States District Court
                       for the Central District of California
                 Florence-Marie Cooper, District Judge, Presiding

                           Submitted February 8, 2011**
                              Pasadena, California

Before: PREGERSON, WARDLAW, and BEA, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
       Fireman’s Fund Insurance Company (“FFIC”) appeals the district court’s

order affirming the bankruptcy court’s order, which granted a group of plaintiffs

(“Appellees”) relief from the automatic stay to assert claims against Calsol, Inc.

(“Calsol”), a debtor in a Chapter 7 bankruptcy proceeding, but limiting Appellees’

recovery to proceeds of insurance. We have jurisdiction under 28 U.S.C.

§ 158(d)(1). We review de novo the district court’s decision on an appeal from the

bankruptcy court and review for abuse of discretion the bankruptcy court’s

decision to grant relief from the automatic stay. Benedor Corp. v. Conejo Enters.,

Inc. (In re Conejo Enters., Inc.), 96 F.3d 346, 351 (9th Cir. 1996). We affirm.

       The bankruptcy court did not abuse its discretion when it granted relief from

the automatic stay. See 11 U.S.C. § 362(d)(1) (allowing the bankruptcy court to

grant relief from the automatic stay for cause). Appellees presented sufficient

evidence to establish that it would be more efficient to allow their claims to

proceed in state court. In support of their motion for relief from the automatic stay,

Appellees submitted the declaration of Raphael Metzger (“Declaration”). This

Declaration included three exhibits: (1) copies of the complaints filed by Appellees

in their state court actions, (2) a list of the other defendants in the state court

actions, and (3) a list of the insurance carriers and policy numbers that relate to

Appellees’ claims against Calsol. Neither FFIC, Calsol, nor any other party to this

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action objected to this declaration and the bankruptcy court made no rulings

striking the content of the Declaration. Hence, the Declaration and its

accompanying exhibits satisfied the evidentiary requirements necessary for relief

from the automatic stay.

       Furthermore, because a desire to permit a state action to proceed in a state

tribunal has been recognized as a proper cause to grant relief from the automatic

stay, see Piombo Corp. v. Castlerock Props. (In re Castlerock Props.), 781 F.2d

159, 163 (9th Cir. 1986), the bankruptcy court did not abuse its discretion when it

granted relief for this reason.

      Appellees’ motion for sanctions on the ground that FFIC’s appeal is

frivolous is granted. Because the outcome of this appeal was obvious, sanctions

are warranted under Federal Rule of Appellate Procedure 38. See Grimes v.

Comm’r, 806 F.2d 1451, 1454 (9th Cir. 1986) (per curiam).

      AFFIRMED, Appellees’ motion for sanctions for a frivolous appeal is

GRANTED, and the matter is REFERRED to the Appellate Commissioner for

determination of a just amount for sanctions.

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