2 FILED & ENTERED
4 MAR 16 2020
CLERK U.S. BANKRUPTCY COURT 6 C Be Yn w t r e a s l l D e yi s t r i c Dt E o Pf UC Ta Yli f Cor Ln Eia RK 7 UNITED STATES BANKRUPTCY COURT 8 CENTRAL DISTRICT OF CALIFORNIA 9 LOS ANGELES DIVISION 10
11 In re: CHAPTER 7
12 Jose Antonio Zamora Case No.: 2:17-bk-22698-BB Adv No: 2:19-ap-01139-BB Martha Delia Zamora 13
ORDER DENYING DEFENDANT DANNIEL 14 DE LA MADRID’S MOTION FOR LEAVE TO Debtor(s). 15 APPEAL IN FORMA PAUPERIS UNDER 28 U.S.C. §§ 753(f) and 1915 16
17 Rosendo Gonzalez [No hearing]
18 Plaintiff(s),
19 v.
20 Muziknewum Nevada Irrevocable 21 Spendthrift Trust dba Muzikneum, LTD 22
23 Defendant(s).
24 On March 12, 2020, Danniel de la Madrid (“Appellant”), the defendant and 25 judgment debtor in the above adversary proceeding, filed a motion entitled, “Motion and 26 Affidavit for Leave to Appeal in Forma Pauperis” under 28 U.S.C. §§ 753(f) and 1915 27 (the “Motion”) [Docket No. 60]. By way of the Motion, Appellant requests an order from 28 this court (1) authorizing him to prosecute an appeal without prepayment of fees and 1 costs or security therefor and (2) requiring the United States government to bear the 2 cost of preparing a Court Reporter’s transcript in connection with his appeal of this 3 Court’s January 30, 2020 order granting default judgment against him [Docket No. 47]. 4 First, based on controlling Ninth Circuit authority, bankruptcy judges, who are 5 Article I judges (referring to their appointment under authority granted under Article I of 6 the United States Constitution), lack the ability to grant forma pauperis status under 28 U.S.C. § 1915(a). Perroton v. Gray (In re Perroton), 958 F.2d 889, 896 (9th Cir. 1992).1 7 Thus, this Court cannot grant Appellant’s request to proceed in forma pauperis under 28 8 U.S.C. § 1915(a). Appellant has elected to have his appeal heard by the United States 9 District Court, the judges of which have authority to grant such applications. Appellant 10 should refile the Motion before the District Court if he would like to obtain the requested 11 relief. 12 With regard to Appellant’s second request – that the government be required to 13 bear the cost of preparation of a Court Reporter’s transcript, “The grant of in forma 14 pauperis status under § 1915(a) is an essential element to qualify for payment of the 15 United States for transcripts for the appeal.” Price v. Price (In re Price), 410 B.R. 51, 57 16 (Bankr. E.D. Cal. 2009). The statutory authority for Appellant’s request is set forth in 28 17 U.S.C. § 753(f), which provides that, “Fees for transcripts furnished . . . to persons 18 permitted to appeal in forma pauperis shall also be paid by the United States if the trial 19 judge or a circuit judge certifies that the appeal is not frivolous (but presents a 20 substantial question).” 28 U.S.C. § 753(f). As Appellant has not sought and obtained 21 permission from an Article III Court to proceed in forma pauperis, he is not eligible for 22 relief under section 753(f). 23 However, even if the Appellant had been authorized to proceed in forma pauperis 24 by an Article III court, pursuant to 28 U.S.C. § 753(f), the United States government 25 could not be required to pay for the cost of a transcript for the appeal unless “the trial 26 27 1 28 U.S.C. § 1930(f)(3), which authorizes the bankruptcy court to waive certain fees for debtors, provides that this 28 section does not restrict the district court or the bankruptcy court from waiving fees for other debtors and creditors, in accordance with Judicial Conference Policy, but the Judicial Conference has not adopted a policy authorizing bankruptcy courts to waive fees for creditors or other nondebtors. 1 judge or a circuit judge certifies that the appeal is not frivolous (but presents a 2 substantial question),” and, in this case, the required certification is unwarranted. 3 Appellant offers the following description of the issues he intends to present on 4 appeal in the Motion: 5 a. The court lacked personal service as I was served by mail at an address 6 that is not my business address per FRBP 7004(b)(1). b. The Court lacked personal jurisdiction because I am a forum-state 7 resident and due process requires personal service. 8 c. The bankruptcy court lacks subject matter jurisdiction over this 548 action 9 as I denied consent in every filing. 10 Motion, at ¶1. To determine whether an appeal presents a “substantial question,” the 11 court can review the statement of issues and related materials. Price, 410 B.R. at 59. 12 “There is a ‘substantial question’ when the issue before the appellate court is 13 reasonably debatable.” Id. (citations omitted). However, none of the issues presented 14 by Appellant is even debatable. 15 The address at which Appellant was served with the summons and complaint 16 that commenced this action is the address that Appellant himself uses on papers that he 17 files with this Court, including the Motion itself – 7220 South Western Avenue, Los 18 Angeles, CA 90047. Appellant has never used another address in any paper filed with 19 the Court in this adversary proceeding. The Court is entitled to presume that the 20 address that Appellant himself provides as his mailing address is a valid mailing 21 address for him. 22 Second, Appellant is mistaken when he asserts that he is entitled to personal 23 service. Federal Rule of Civil Procedure 7004(b)(1) unambiguously permits service 24 upon an individual by first class mail postage prepaid, which is how Appellant was 25 served in this adversary proceeding. 26 Lastly, although a defendant’s consent is required to enable the bankruptcy court 27 to enter final orders in a fraudulent transfer action, the Court does not need the 28 defendant’s express consent to enter a final judgment in the form of a default judgment in an adversary proceeding. Numerous bankruptcy court decisions handed down after 1 || the Supreme Court decided Wellness Int'l Network, Ltd. v. Sharif, 135 S.Ct. 1932 2 (2015), have held that bankruptcy judges may enter default judgments based on implied 3 || consent resulting from a defendant's failure to respond to a summons and complaint. 4 || See, e.g., Kravitz v. Deacons (In re Advance Watch Co.), 587 B.R. 598 (Bankr. 5 S.D.N.Y. 2018); Campbell v. Carruthers (In re Campbell), 553 B.R. 448 (Bankr. M.D. 6 Ala. 2016); and Hopkins v. M&A Ventures (In re Hoku Corp.), Nos. 13-40838-JDP, 15- 7 08043-JDP, 2015 Bankr. LEXIS 4172 (Bankr. D. Idaho Dec. 10, 2015).
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2 FILED & ENTERED
4 MAR 16 2020
CLERK U.S. BANKRUPTCY COURT 6 C Be Yn w t r e a s l l D e yi s t r i c Dt E o Pf UC Ta Yli f Cor Ln Eia RK 7 UNITED STATES BANKRUPTCY COURT 8 CENTRAL DISTRICT OF CALIFORNIA 9 LOS ANGELES DIVISION 10
11 In re: CHAPTER 7
12 Jose Antonio Zamora Case No.: 2:17-bk-22698-BB Adv No: 2:19-ap-01139-BB Martha Delia Zamora 13
ORDER DENYING DEFENDANT DANNIEL 14 DE LA MADRID’S MOTION FOR LEAVE TO Debtor(s). 15 APPEAL IN FORMA PAUPERIS UNDER 28 U.S.C. §§ 753(f) and 1915 16
17 Rosendo Gonzalez [No hearing]
18 Plaintiff(s),
19 v.
20 Muziknewum Nevada Irrevocable 21 Spendthrift Trust dba Muzikneum, LTD 22
23 Defendant(s).
24 On March 12, 2020, Danniel de la Madrid (“Appellant”), the defendant and 25 judgment debtor in the above adversary proceeding, filed a motion entitled, “Motion and 26 Affidavit for Leave to Appeal in Forma Pauperis” under 28 U.S.C. §§ 753(f) and 1915 27 (the “Motion”) [Docket No. 60]. By way of the Motion, Appellant requests an order from 28 this court (1) authorizing him to prosecute an appeal without prepayment of fees and 1 costs or security therefor and (2) requiring the United States government to bear the 2 cost of preparing a Court Reporter’s transcript in connection with his appeal of this 3 Court’s January 30, 2020 order granting default judgment against him [Docket No. 47]. 4 First, based on controlling Ninth Circuit authority, bankruptcy judges, who are 5 Article I judges (referring to their appointment under authority granted under Article I of 6 the United States Constitution), lack the ability to grant forma pauperis status under 28 U.S.C. § 1915(a). Perroton v. Gray (In re Perroton), 958 F.2d 889, 896 (9th Cir. 1992).1 7 Thus, this Court cannot grant Appellant’s request to proceed in forma pauperis under 28 8 U.S.C. § 1915(a). Appellant has elected to have his appeal heard by the United States 9 District Court, the judges of which have authority to grant such applications. Appellant 10 should refile the Motion before the District Court if he would like to obtain the requested 11 relief. 12 With regard to Appellant’s second request – that the government be required to 13 bear the cost of preparation of a Court Reporter’s transcript, “The grant of in forma 14 pauperis status under § 1915(a) is an essential element to qualify for payment of the 15 United States for transcripts for the appeal.” Price v. Price (In re Price), 410 B.R. 51, 57 16 (Bankr. E.D. Cal. 2009). The statutory authority for Appellant’s request is set forth in 28 17 U.S.C. § 753(f), which provides that, “Fees for transcripts furnished . . . to persons 18 permitted to appeal in forma pauperis shall also be paid by the United States if the trial 19 judge or a circuit judge certifies that the appeal is not frivolous (but presents a 20 substantial question).” 28 U.S.C. § 753(f). As Appellant has not sought and obtained 21 permission from an Article III Court to proceed in forma pauperis, he is not eligible for 22 relief under section 753(f). 23 However, even if the Appellant had been authorized to proceed in forma pauperis 24 by an Article III court, pursuant to 28 U.S.C. § 753(f), the United States government 25 could not be required to pay for the cost of a transcript for the appeal unless “the trial 26 27 1 28 U.S.C. § 1930(f)(3), which authorizes the bankruptcy court to waive certain fees for debtors, provides that this 28 section does not restrict the district court or the bankruptcy court from waiving fees for other debtors and creditors, in accordance with Judicial Conference Policy, but the Judicial Conference has not adopted a policy authorizing bankruptcy courts to waive fees for creditors or other nondebtors. 1 judge or a circuit judge certifies that the appeal is not frivolous (but presents a 2 substantial question),” and, in this case, the required certification is unwarranted. 3 Appellant offers the following description of the issues he intends to present on 4 appeal in the Motion: 5 a. The court lacked personal service as I was served by mail at an address 6 that is not my business address per FRBP 7004(b)(1). b. The Court lacked personal jurisdiction because I am a forum-state 7 resident and due process requires personal service. 8 c. The bankruptcy court lacks subject matter jurisdiction over this 548 action 9 as I denied consent in every filing. 10 Motion, at ¶1. To determine whether an appeal presents a “substantial question,” the 11 court can review the statement of issues and related materials. Price, 410 B.R. at 59. 12 “There is a ‘substantial question’ when the issue before the appellate court is 13 reasonably debatable.” Id. (citations omitted). However, none of the issues presented 14 by Appellant is even debatable. 15 The address at which Appellant was served with the summons and complaint 16 that commenced this action is the address that Appellant himself uses on papers that he 17 files with this Court, including the Motion itself – 7220 South Western Avenue, Los 18 Angeles, CA 90047. Appellant has never used another address in any paper filed with 19 the Court in this adversary proceeding. The Court is entitled to presume that the 20 address that Appellant himself provides as his mailing address is a valid mailing 21 address for him. 22 Second, Appellant is mistaken when he asserts that he is entitled to personal 23 service. Federal Rule of Civil Procedure 7004(b)(1) unambiguously permits service 24 upon an individual by first class mail postage prepaid, which is how Appellant was 25 served in this adversary proceeding. 26 Lastly, although a defendant’s consent is required to enable the bankruptcy court 27 to enter final orders in a fraudulent transfer action, the Court does not need the 28 defendant’s express consent to enter a final judgment in the form of a default judgment in an adversary proceeding. Numerous bankruptcy court decisions handed down after 1 || the Supreme Court decided Wellness Int'l Network, Ltd. v. Sharif, 135 S.Ct. 1932 2 (2015), have held that bankruptcy judges may enter default judgments based on implied 3 || consent resulting from a defendant's failure to respond to a summons and complaint. 4 || See, e.g., Kravitz v. Deacons (In re Advance Watch Co.), 587 B.R. 598 (Bankr. 5 S.D.N.Y. 2018); Campbell v. Carruthers (In re Campbell), 553 B.R. 448 (Bankr. M.D. 6 Ala. 2016); and Hopkins v. M&A Ventures (In re Hoku Corp.), Nos. 13-40838-JDP, 15- 7 08043-JDP, 2015 Bankr. LEXIS 4172 (Bankr. D. Idaho Dec. 10, 2015). As none of the 8 issues raised by Appellant is even debatable, the court concludes that Appellant’s 9 appeal is frivolous and does not satisfy the substantial question requirement of 28 40 U.S.C. § 753(f). 44 Therefore, even if Appellant had obtained authority to proceed in forma pauperis, 49 his request that the government be required to pay the costs association with the preparation of a transcript should be denied as his appeal does not present a "8 substantial question. And, as discussed above, this Court lacks the authority to grant " Appellant's request to proceed in forma pauperis. Accordingly, his Motion should be 1 denied in its entirety. 16 IT IS SO ORDERED. 17 18 HH 19 20 21 22 23 24 CH Z 25 Date: March 16, 2020 haa bs Al 26 Sheri Bluebond United States Bankruptcy Judge 27 28