Amborn, Trustee v. Szanto

CourtUnited States Bankruptcy Court, D. Oregon
DecidedMay 5, 2025
Docket24-03063
StatusUnknown

This text of Amborn, Trustee v. Szanto (Amborn, Trustee v. Szanto) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amborn, Trustee v. Szanto, (Or. 2025).

Opinion

Nay Vo, □□□□ Clerk, U.S. Bankruptcy Court

Below is an opinion of the court.

vr C. McKITTRICK U.S. Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF OREGON

In re Bankruptcy Case No. 16-33185-pem7 PETER SZANTO, Debtor. Adv. Proc. No. 24-3063-pem CANDACE AMBORN, TRUSTEE, Plaintiff, y MEMORANDUM DECISION!

PETER SZANTO, Defendant.

This disposition is specific to this case and is not intended for publication or to have a controlling effect on other cases. It may, however, be cited for whatever persuasive value it may have.

Page 1 -MEMORANDUM DECISION

Plaintiff, the trustee in the chapter 72 bankruptcy case of Peter Szanto (Defendant or Debtor), moves for summary judgment on the claims, defenses and counterclaims asserted in this adversary proceeding. The court determines that a hearing is not necessary. LBR 7007-1(d). For the reasons explained below, the court will enter summary judgment in favor of the plaintiff,

although it will not grant all the relief requested in the complaint. BACKGROUND AND FACTS Candace Amborn (the Trustee or Plaintiff) filed a Complaint for Injunctive Relief Prohibiting Peter Szanto from Violating the Barton Doctrine and Establishing Contempt Procedures (the Complaint). ECF No. 1. Plaintiff asserts one claim for relief in the Complaint: “Plaintiff seeks a permanent injunction staying any future litigation of the Debtor against the Former Trustee, Trustee, and their professionals under 11 U.S.C. § 105(a) and Fed. R. Bankr. P. 7065, unless such litigation complies with the Barton doctrine.”3 ECF No. 1. As is explained in more detail below, the Barton doctrine requires that, before a suit can be brought against a

bankruptcy trustee or the trustee’s professionals in a court other than the appointing court, leave of the bankruptcy court must be obtained. Plaintiff alleges that Defendant’s history of litigation in this and other courts warrants issuance of an injunction. Defendant filed an answer in which he raises numerous defenses, some of which he identifies as jurisdictional, and asserts two counterclaims. ECF No. 32. In his first counterclaim, Defendant argues that the Trustee violated § 704, which governs the duties of a chapter 7 trustee,

by commencing a bankruptcy case in Singapore. In his second counterclaim, Defendant argues

2 Unless otherwise noted, all references to chapters and sections are to the Bankruptcy Code, 11 U.S.C. § 101, et. seq.

3 The Former Trustee is Stephen P. Arnot. that Trustee improperly paid legal fees to a law firm that represented the Trustee in the Singapore action. Defendant timely filed a First Amended Answer.4 ECF No. 41. The amended answer asserts two new defenses and omits Defendant’s counterclaims. Because it is not clear whether Defendant intended to abandon his counterclaims when he failed to include them in his amended

answer, the court will assume that Defendant did not intend to abandon his counterclaims. JURISDICTION AND AUTHORITY TO ENTER FINAL JUDGMENT The federal district courts have “original and exclusive jurisdiction” of all cases under the Bankruptcy Code. 28 U.S.C. § 1334(a). The federal district courts also have "original but not

exclusive jurisdiction" of all civil proceedings arising under the Bankruptcy Code or arising in or related to cases under the Bankruptcy Code. 28 U.S.C. § 1334(b). As permitted by 28 U.S.C. § 157(a), the United States District Court for the District of Oregon (the District Court) has referred to this court all cases under the Bankruptcy Code and all proceedings arising under the Bankruptcy Code or arising in or related to a bankruptcy case. District Court LR 2100-2(a). The terms “arising under title 11” and “arising in a case under title 11” are terms of art which the courts have defined. Wilshire Courtyard v. Cal. Franchise Tax Bd. (In re

4 Defendant filed his amended answer within the time permitted by Fed. R. Civ. P. 15(a)(1), which provides:

(a) Amendments Before Trial. (1) Amending as a Matter of Course. A party may amend its pleading once as a matter of course no later than: (A) 21 days after serving it, or (B) if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading . . . whichever is earlier. Fed. R. Civ. P. 15 is made applicable by Fed. R. Bankr. P. 7015. Wilshire Courtyard), 729 F.3d 1279, 1285 (9th Cir. 2013). A proceeding “arises under” title 11 if it presents claims for relief created or controlled by title 11. Id. In contrast, the claims for relief in a proceeding “arising in” a title 11 case are not explicitly created or controlled by title 11, but such claims nonetheless would have no existence outside of a bankruptcy case. Id. In re GACN, Inc., 555 B.R. 684, 693 (9th Cir. BAP 2016). The court has jurisdiction over Plaintiff’s claim and Defendant’s counterclaims because, at the very least, they arise in a case under title 11. All the claims “could not exist independently of” Defendant’s chapter 7 bankruptcy case.5 In re Harris¸590 F.3d 730, 738 (9th Cir. 2009). A bankruptcy judge to whom a case has been referred may enter final judgment in any core proceeding arising under the Bankruptcy Code or arising in a case under the Bankruptcy Code. 28 U.S.C. § 157(b)(1). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (B) (matters concerning administration of the estate and allowance of claims against the estate). Thus, the court has statutory authority to enter final judgment in this proceeding. Plaintiff consents to entry of final judgment by the court; Defendant does not consent. A party’s consent to exercise of the court’s jurisdiction is relevant only where a proceeding is outside of a bankruptcy court’s constitutional authority as analyzed by the Supreme Court in Stern v. Marshall, 131 S. Ct. 2594 (2011). The claims in this adversary proceeding stem from the bankruptcy itself and thus are within the Court’s constitutional authority. Stern, 131 S. Ct. at 2618. See also 10 COLLIER ON BANKRUPTCY ¶ 7008.02 (Richard Levin & Henry J. Sommer

eds., 16th ed.)(if claim arises from bankruptcy itself, bankruptcy judge may enter final judgment without consent of parties). Therefore, the court has constitutional authority to, and will, enter final judgment despite Defendant’s lack of consent.

5 Defendant’s counterclaims likely arise under title 11 because they appear to be “created or determined by the bankruptcy code.” In re Harris¸590 F.3d 730, 737 (9th Cir. 2009). SUMMARY JUDGMENT STANDARD

Fed. R. Civ. P.

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