In Re Debtor Peter Brown Kleidman

CourtDistrict Court, C.D. California
DecidedJanuary 21, 2022
Docket2:21-cv-03287
StatusUnknown

This text of In Re Debtor Peter Brown Kleidman (In Re Debtor Peter Brown Kleidman) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Debtor Peter Brown Kleidman, (C.D. Cal. 2022).

Opinion

Case 2:21-cv-03287-JFW Document 41 Filed 01/21/22 Page 1 of 9 Page ID #:1677

UNITED STATES DISTRICT COURT JS-6 CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES -- GENERAL Case No. CV 21-3287-JFW Date: January 21, 2022 Title: In Re Debtor Peter Brown Kleidman Peter Brown Kleidman -v- Hilton and Hyland Real Estate, Inc.

PRESENT: HONORABLE JOHN F. WALTER, UNITED STATES DISTRICT JUDGE Shannon Reilly None Present Courtroom Deputy Court Reporter ATTORNEYS PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS: None None PROCEEDINGS (IN CHAMBERS): ORDER AFFIRMING BANKRUPTCY COURT’S AUGUST 21, 2020 JUDGMENT, MARCH 31, 2021 ORDER DENYING MOTION TO RECONSIDER SUMMARY JUDGMENT IN FAVOR OF DEFENDANTS, AND APRIL 5, 2021 AMENDED JUDGMENT On April 16, 2021, Appellant Peter Brown Kleidman (“Appellant” or “Debtor”) filed an appeal from the United States Bankruptcy Court’s August 21, 2020 Judgment, March 31, 2021 Order Denying Motion to Reconsider Summary Judgment in Favor of Defendants, and April 5, 2021 Amended Judgment. On October 29, 2021, Appellant filed his Opening Brief. On November 29, 2021, Appellees Hilton & Hyland Real Estate, Inc., Joshua Altman, and Matthew Altman (collectively, “Appellees”) filed their Brief. On December 27, 2021, Appellant filed a Reply Brief. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court found the matter appropriate for submission on the papers without oral argument. The matter was, therefore, removed from the Court’s January 10, 2021 hearing calendar and the parties were given advance notice. After considering the moving, opposing, and reply papers, and the arguments therein, the Court rules as follows: I. Factual and Procedural Background The Bankruptcy Court’s August 21, 2020 Judgment, March 31, 2021 Order Denying Motion to Reconsider Summary Judgment in Favor of Defendants, and April 5, 2021 Amended Judgment at issue on this appeal were entered in an adversary proceeding that was commenced on January 30, 2017, when Appellant filed his original Complaint against the Appellees. Since the commencement of the adversary proceeding, Appellant filed four different versions of his Complaint, conducted extensive discovery, and filed numerous motions. Indeed, the extraordinary Page 1 of 9 Initials of Deputy Clerk sr Case 2:21-cv-03287-JFW Document 41 Filed 01/21/22 Page 2 of 9 Page ID #:1678

number of motions filed by Appellant resulted in the Bankruptcy Court granting in part the Appellees’ Motion for an Order Requiring Plaintiff to Seek Leave of Court Before Filing Any Further Motions (“Motion Requiring Leave”). At the time the Appellees filed their Motion Requiring Leave, Appellant had filed five motions for leave to amend his Complaint and fourteen discovery motions. In light of the extensive record in the adversary proceeding, the parties are well aware of the factual and procedural history of this matter and the Court will only discuss those facts necessary to resolve the instant appeal. A. The Parties Appellant is a sophisticated and experienced businessman who graduated from Cambridge University with a Ph.D. in mathematics and worked for several years at Goldman Sachs, Bankers Trust, Dresdner Bank AG, ABN AMRO Bank and HSBC Bank, principally as a financial analyst. In the early 2000s, Appellant began purchasing real property in Southern California, including properties that he “flipped” for a profit. For example, Appellant purchased the property located at 21942 Pacific Coast Highway, Malibu, California for $2.9 million, renovated the property, and then sold it for approximately $13.4 million. Appellant also purchased the property located at 22420 Pacific Coast Highway, Malibu, California for $15.5 million, renovated the property, and then sold it for approximately $18.9 million. Hilton & Hyland Real Estate, Inc. (“Hilton & Hyland”) is a luxury real estate brokerage firm located in Beverly Hills, California. Joshua Altman and Matthew Altman (the “Altmans”) were real estate agents with Hilton & Hyland until approximately 2015. B. The Property In 2006, Appellant purchased the property located at 9380 Sierra Mar Drive, Los Angeles, California (the “Property”), which is the subject of the adversary proceeding. In May 2010, the Property was appraised at $4.25 million. In 2011, Appellant signed a listing agreement with Sun Heritage Real Estate (“Sun Heritage”), and listed the Property for $4.2 million. In February 2012, Appellant obtained an appraisal that indicated that the current value of the Property was only $3.8 million, noting that the “[i]nterior finish does not match the quality of the basic construction,” and advising that “[m]ost buyers of this home will look to remodel most of the interior with a new kitchen, bathrooms, flooring and HVAC” because “[t]here is functional obsolescence not only associated with the pool and spa but with the interior improvements.” As a result of the appraisal, Appellant reduced the price of the Property to $3.9 million. Although Appellant received multiple offers, they were insufficient to satisfy the existing liens and those offers were rejected by the secured lenders. C. Bankruptcy On February 8, 2012, Appellant filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. Appellant’s Bankruptcy Schedules valued the Property at $3.8 million. On October 18, 2012, Appellant amended his Bankruptcy Schedules and increased the valuation of the Property to $4.2 million. During the pendency of his bankruptcy, Appellant contacted multiple real estate agents about selling the Property, but he declined to retain any of them because they advised Appellant the Property could not be sold for more than the existing liens. Appellant Page 2 of 9 Initials of Deputy Clerk sr Case 2:21-cv-03287-JFW Document 41 Filed 01/21/22 Page 3 of 9 Page ID #:1679

ultimately decided to list the Property with Dustin Cumming, Aaron Kirman, and Danelle Lavin (the “Listing Agents”) at Hilton & Hyland because they advised Appellant that they believed that they could market and sell the Property and avoid a short sale. On December 1, 2012, Appellant and Hilton & Hyland entered into a Residential Listing Agreement (“RLA”) to list the Property for $5,495,000. On January 24, 2013, Appellant filed an application to employ the Listing Agents and Hilton & Hyland to sell the Property (the “Employment Application”) with the Bankruptcy Court. On January 30, 2013, the Bankruptcy Court approved the Employment Application. Hilton & Hyland advertised the Property in The Los Angeles Times, the MLS Broker Caravan, and Christie’s International Real Estate syndicates. The Listing Agents held “open houses” and showed the Property eighteen times, including to developers and “flippers.” The Listing Agents kept Appellant informed of the showings and buyer interest, and Appellant assisted Hilton & Hyland in marketing the Property by providing the Listing Agents with a property survey and floor plans for the then-existing house on the Property, which Appellant and the Listing Agents believed would be of interest to developers and flippers. Appellant received multiple offers for the Property that were below the listing price, including an all cash offer of $5,000,000 by Bruce Makowsky (“Makowsky”) on January 20, 2013. In light of the offers, Appellant determined that if he could sell the Property for $5,300,000, he would be able to cover all the liens, commissions, closing costs, and realize a small profit. As a result, Appellant countered all of the offers at $5,299,000. Although the potential buyers refused to accept Appellant’s counteroffer of $5,299,9991, Makowsky eventually agreed to purchase the Property for $5,300,000 with no contingencies.

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Bluebook (online)
In Re Debtor Peter Brown Kleidman, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-debtor-peter-brown-kleidman-cacd-2022.