In re Pacific Gas & Electric Co.

331 B.R. 915, 63 Fed. R. Serv. 3d 43, 2005 Bankr. LEXIS 1975, 2005 WL 2573955
CourtUnited States Bankruptcy Court, N.D. California
DecidedJune 1, 2005
DocketNo. 01-30923DM
StatusPublished

This text of 331 B.R. 915 (In re Pacific Gas & Electric Co.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.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 Pacific Gas & Electric Co., 331 B.R. 915, 63 Fed. R. Serv. 3d 43, 2005 Bankr. LEXIS 1975, 2005 WL 2573955 (Cal. 2005).

Opinion

MEMORANDUM DECISION ON MOTION TO VACATE ENFORCEMENT ORDER

DENNIS MONTALI, Bankruptcy Judge.

I. Introduction

The City of Oakland (“City”) filed a motion (the “Motion To Vacate”) for an [917]*917order vacating the Order Enforcing Order Confirming PG & E’s Plan of Reorganization (the “Enforcement Order”) entered on September 3, 2004. Debtor, Pacific Gas & Electric Company (“PG & E”), opposed the Motion To Vacate. The court held a hearing on April 25, 2005, and appearances were noted on the record. During the course of that hearing the court indicated to counsel for City that its complaint in the Motion To Vacate about PG & E’s failure to serve its Omnibus Motion To Enforce Order Confirming PG & E’s Plan of Reorganization (“Motion To Enforce”) filed on July 29, 2004, was well taken and that the court would grant the Motion To Vacate as long as City could show that it had a meritorious defense to the Motion To Enforce.

City was given time to submit proof that its failure to file a proof of claim based upon its cross-complaint for indemnity and contribution against PG & E in Dickinson, et al. v. PG & E, et al., Alameda County Superior Court No. 830495-5 (the “State Court Action”), was the result of excusable neglect. On May 9, 2005, City filed declarations of Barbara Parker, Latonda Simmons and a supplemental declaration of Jannie L. Wong. On May 23, 2005, PG & E filed its supplemental opposition to City’s Motion To Vacate, submitting the matter for decision.

After reviewing all of the papers presented and the arguments of counsel, the court has determined that the Motion To Vacate should be denied because City has not shown excusable neglect for its failure to file a proof of claim based upon the State Court Action by the October 3, 2001, deadline for the filing of proofs of claim by governmental entities. Thus it would be unable to defeat the Motion To Enforce.

II. Discussion

When PG & E filed and served its Motion To Enforce it did not comply with the requirements of Fed. R. Bankr.P. 7004(b)(6), which provides as follows:

(b) Service by first class mail. Except as provided in subdivision (h) ... service may be made within the United States by first class mail postage prepaid as follows:
******
(6) Upon a state or municipal corporation or other governmental organization thereof subject to suit, by mailing a copy of the summons and complaint to the person or office upon whom process is prescribed to be served by the law of the state in which service is made when an action is brought against such a defendant in the courts of general jurisdiction of that state, or in the absence of designation of any such person or office by state law, then to the chief executive office thereof.

Under California law, service on a governmental and municipal entity is controlled by California Code of Civil Procedure § 416.50, which provides as follows:

(a) A summons may be served on a public entity by delivering a copy of the summons and complaint to the clerk, the secretary, president, presiding officer or other head of its governing body.

PG & E served the Motion To Enforce addressed to the attention of Jannie Wong, Esq., the attorney representing the City in the State Court Action, incorrectly identifying her as “Attorneys (sic) for Mark Dickinson.” There was, therefore, no compliance with Fed. R. Bankr.P. 7004(b)(6). This failure by PG & E would normally entitle City to the granting of the Motion To Vacate and relief from the Enforcement Order if it could show how it would defeat the Motion To Enforce. See Beneficial California, Inc. v. Villar (In re Villar) 317 B.R. 88 (9th Cir. BAP 2004).

[918]*918In the Motion To Vacate, City argues that even if the Motion To Vacate was properly served (which it was not), Fed. R. Bankr.P. 9024, incorporating Fed.R.Civ.P. 60(b), provides a basis for relief, subject to three important considerations, the first two of which are not relevant. The final one, supporting relief from a default, presumes that the movant has a meritorious defense. City cites Fed. R. Civ. P 60(b)(1) and (6), but the court will focus only on the former subsection, recognizing that the latter is not a catchall to suffice where other subsections cannot be satisfied. Lafarge Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d 1334, 1338 (9th Cir.1986).

The inquiry thus turns on whether City really has a meritorious defense to the Motion To Enforce. The Motion To Vacate is construed as a motion for relief from the Enforcement Order and is based on excusable neglect pursuant to Fed. R. Civ. p. 60(b)(1). Fed.R.Civ.P. 60(b)(1) provides:

On Motion and upon such terms as are just, the court may relieve a party ... from a final ... order for the following reasons:
(1)mistake, inadvertence, surprise, or excusable neglect ...
... The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the ... order ..., was entered or taken.

The test for determining “excusable neglect” is well established: it is “at bottom, an equitable one, taking account of all relevant circumstances surrounding the party’s omission.” Pioneer Investment Sens. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993). Such an analysis requires the weighing or balancing of relevant factors, including the following four:

(1) the danger of prejudice to the debt- or,
(2) the length of the delay and its potential impact on judicial proceedings,
(3) the reason for the delay, including whether it was within the reasonable control of the movant, and
(4) whether the movant acted in good faith.

Id. at 395, 113 S.Ct. 1489; Pincay v. Andrews, 389 F.3d 853, 855 (9th Cir.2004). The non-exclusive factors discussed in the above quotation provide a framework for determining whether City has demonstrated “excusable neglect” in this case.

In the Ninth Circuit “excusable neglect” is construed liberally under Fed. R.Civ.P. 60(b). Fasson v. Magouirk (In re Magouirk), 693 F.2d 948 (9th Cir.1982). In Pincay

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331 B.R. 915, 63 Fed. R. Serv. 3d 43, 2005 Bankr. LEXIS 1975, 2005 WL 2573955, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-pacific-gas-electric-co-canb-2005.