In re Paxton

596 B.R. 686
United States Bankruptcy Court, N.D. California·Decided January 29, 2019·No. Case No. 12-33036 HLB·Published·Cited by 3 cases

Opinion

HANNAH L. BLUMENSTIEL, U.S. Bankruptcy Judge

I. INTRODUCTION

This case came before the court on August 17, 2018 for trial on Debtors John and Elizabeth Paxton's Motion for Contempt (the "Motion" ). [Dkt. 88.] The Motion is directed at: Mr. Brendan Quinlan, Mr. Andrew Zacks, Mr. James Kraus, Mr. Scott Freedman, Mr. William Murphy; and the law firms of Zacks Freedman & Patterson, P.C. and Dillingham & Murphy, LLP (collectively, the "Respondents").

Mr. and Mrs. Paxton's Motion demands that the court hold the Respondents in contempt for violating the automatic stay imposed by section 362(a)1 by: commencing and prosecuting an action against Mr. Paxton in the San Francisco Superior Court, Case No. CGC-13-535986 (the "Declaratory Relief Action "); obtaining a judgment against Mr. Paxton in that action; and obtaining and recording an abstract of that judgment. The Paxtons' Motion also demands that the court declare the judgment in the Declaratory Relief Action void.

Still further, Mr. and Mrs. Paxton's Motion demands that the court hold one or more of the Respondents in contempt for violating the stay by commencing and prosecuting a small claims action against Mr. Paxton in San Francisco Superior Court, Case No. 15-851380 (the "Small Claims Action "); by obtaining a judgment against Mr. Paxton in the Small Claims Action; by obtaining and recording an abstract of that judgment; and by obtaining and serving an order in the Small Claims Action requiring Mr. Paxton to appear for a judgment debtor examination. Mr. and Mrs. Paxton also demanded that the court declare the judgment issued in the Small Claims Action void. In a detailed oral ruling issued after the conclusion of Mr. and Mrs. Paxton's case-in-chief, the court denied *690the Motion as it pertained to the Small Claims Action, pursuant to Rule 52(c) of the Federal Rules of Civil Procedure and Bankruptcy Rules 9014(c) and 7052. The court incorporates here by reference its oral ruling on the Motion as it pertains to the Small Claims Action.

At trial, Mr. James Michel appeared on behalf of Mr. and Mrs. Paxton; Mr. Mark Romeo and Mr. J. Cross Creason appeared on behalf of the Respondents. After both sides presented their testimony and evidence, the court took the matter under submission.2

This memorandum decision constitutes the court's findings of facts and conclusions of law as required by Rule 52(a)(1) of the Federal Rules of Civil Procedure, which applies in this proceeding pursuant to Rules 9014(c) and 7052 of the Federal Rules of Bankruptcy Procedure.

II. JURISDICTION

The court has jurisdiction over this action pursuant to 28 U.S.C. § 1334(b), 28 U.S.C. § 157(a), and General Order 24 of the United States District Court for the Northern District of California. Damage claims predicated on violations of the automatic stay arise under Title 11 and fall squarely within this court's subject matter jurisdiction. In re Davis , 177 B.R. 907, 912 (9th Cir. BAP 1995). A claim for violation of the automatic stay constitutes a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(A), which pertains to matters concerning the administration of the estate. Taxel v. Electronic Sports Research (In re Cinematronics, Inc. ), 111 B.R. 892, 896 (Bankr. S.D. Cal. 1990). Venue is proper under 28 U.S.C. § 1408(a).

III. FINDINGS OF FACT

a. Background

In 1986, Mr. Paxton entered into a residential lease agreement (Ex. 101 at 14; the "Lease "), pursuant to which he rented real property at 330 Presidio Avenue, Unit 5, San Francisco, California (the "Property"). At the time Mr. Paxton entered into the Lease, he had occupied the Property for more than ten years. Between 2005 and 2015, Mr. Brendan Quinlan owned the Property and served as Mr. and Mrs. Paxton's landlord, subject to the Lease.

The Lease allowed Mr. Paxton to approve or disapprove of the quality of repairs and replacement fixtures in the Property. [Ex. 101 at 15.]3 The events giving rise to the matter before this court result from Mr. Paxton's attempt to wield this power over Mr. Quinlan.

For nearly nine years, Mr. Paxton attempted to force Mr. Quinlan to make lavish alterations and improvements to the Property. During this time, Messrs. Paxton and Quinlan went back and forth in disagreement about the extent of repairs, scope of work, and quality of replacement materials and craftsmanship necessitated by the Lease. In 2009, Mr. Paxton reported the condition of the Property to the San Francisco Department of Building Inspection. As a result, the Department of Building Inspection issued a Notice of Violation, citing San Francisco Housing Code (the "Code ") sections 1001, 1301, and 1306, which obligated Mr. Quinlan to make certain *691repairs or improvements to the Property in order to bring into compliance with the Code.4 [Ex. 101 at 26.]

Mr. Quinlan made several attempts to enter the Property to make the repairs. Apart from repairs to the heating ducts, windows, dishwasher, and garbage disposal, Mr. Paxton refused to allow Mr. Quinlan access to the Property to make many of the necessary repairs, citing his right to control the color, style, and quality of the repairs.

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In re Paxton, 596 B.R. 686 (Cal. 2019).

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