B3 Capital Venture v. Crystal Waterfalls

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 25, 2019
• Docket: 17-56759
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 25 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

In re: CRYSTAL WATERFALLS, LLC, No. 17-56759 DBA Park Inn By Radisson, D.C. No. 2:17-cv-02730-JAK Debtor, ______________________________ MEMORANDUM* B3 CAPITAL VENTURE, LLC,

Plaintiff-Appellant,

v.

CRYSTAL WATERFALLS, LLC, DBA Park Inn By Radisson,

Defendant-Appellee.

Appeal from the United States District Court for the Central District of California John A. Kronstadt, District Judge, Presiding

Argued and Submitted March 7, 2019 Pasadena, California

Before: THOMAS, Chief Circuit Judge, and GILMAN** and NGUYEN, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Ronald Lee Gilman, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. Creditor B3 Capital Venture, LLC appeals from the district court’s judgment

affirming the bankruptcy court’s order granting in part and denying in part B3’s

oversecured claim against the estate of debtor Crystal Waterfalls, LLC. We have

jurisdiction under 28 U.S.C. § 158(d), and we affirm.

We review the bankruptcy court’s factual findings for clear error and its

determinations of law, including the disallowance of a claim, de novo. In re

Thorpe Insulation Co., 671 F.3d 1011, 1019–20 (9th Cir. 2012). We may affirm

the district court’s order affirming the bankruptcy court “on any ground finding

support in the record.” In re Crystal Props., Ltd., 268 F.3d 743, 755 (9th Cir.

2001) (quoting Laboa v. Calderon, 224 F.3d 972, 981 n.7 (9th Cir. 2000)). “We

will not disturb a bankruptcy court’s award of attorneys’ fees unless the

bankruptcy court abused its discretion or erroneously applied the law.” In re

Hoopai, 581 F.3d 1090, 1095 (9th Cir. 2009) (quoting In re Kord Enters. II, 139

F.3d 684, 686 (9th Cir. 1998)).

1. The bankruptcy court did not err by denying B3’s claim for default

interest prior to the date that B3 assumed the loan. First Commercial Bank

(“FCB”) waived any right to default interest by accepting late payments without

objection, see Cal. Civ. Proc. Code § 2076; Talbot v. Gadia, 267 P.2d 436, 440

(Cal. Ct. App. 1954), and by providing Crystal Waterfalls an estimated payoff

2 amount that was inconsistent with an intent to impose default interest, see Crystal

Props., 268 F.3d at 753.

The loan agreement’s anti-waiver clause did not vitiate FCB’s waiver as to

past payments; it merely preserved any right that FCB had to collect default

interest in the future. See Bettelheim v. Hagstrom Food Stores, Inc., 249 P.2d 301,

305 (Cal. Ct. App. 1952). Nor is B3 a holder in due course because it took the note

with “notice that the instrument [was] overdue,” Cal. Com. Code §§ 3302(a)(2)(C),

3304(b)(3). Next, the bankruptcy court did not abuse its discretion by allowing

Crystal Waterfalls the opportunity to supplement its reply brief on account of B3’s

late opposition brief. Finally, the court did not violate B3’s due process rights by

rejecting as untimely evidence that B3 should have submitted prior to its motion

for reconsideration. See Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890

(9th Cir. 2000).

2. The bankruptcy court also did not err in finding that B3 is not entitled to

post-2016 attorney’s fees. B3 filed an untimely amended proof of claim on

January 16, 2017, nine days before the hearing, in which it claimed fees only

through 2016. The bankruptcy court denied B3’s request to amend its proof of

claim for a second time based on the court’s reasonable finding that the cost of

post-hearing proceedings would prejudice the estate and other creditors. This

ruling was not an abuse of discretion. See In re Roberts Farms Inc., 980 F.2d

3 1248, 1251 (9th Cir. 1992) (“The crucial inquiry is whether the opposing party

would be unduly prejudiced by the amendment.”).

AFFIRMED.