In re: Richard James Swintek

CourtUnited States Bankruptcy Appellate Panel for the Ninth Circuit
DecidedDecember 18, 2015
DocketCC-14-1569-KiTaKu
StatusPublished

This text of In re: Richard James Swintek (In re: Richard James Swintek) is published on Counsel Stack Legal Research, covering United States Bankruptcy Appellate Panel for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re: Richard James Swintek, (bap9 2015).

Opinion

FILED DEC 18 2015 1 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT

3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. CC-14-1569-KiTaKu ) 6 RICHARD JAMES SWINTEK, ) Adv. No. 8:13-01106-TA ) 7 Debtor. ) Bk. No. 8:10-22458-TA ) 8 ) ) 9 KAREN M. GOOD, ) ) 10 Appellant, ) ) 11 v. ) O P I N I O N ) 12 CHARLES W. DAFF, Chapter 7 ) Trustee, ) 13 ) Appellee. ) 14 ______________________________) 15 Argued and Submitted on November 19, 2015, at Pasadena, California 16 Filed - December 18, 2015 17 Appeal from the United States Bankruptcy Court 18 for the Central District of California 19 Honorable Theodor C. Albert, Bankruptcy Judge, Presiding 20 21 22 Appearances: Roya Rohani argued for appellant Karen M. Good; Arjun Sivakumar of Brown Rudnick LLP argued for 23 appellee Charles W. Daff, Chapter 7 Trustee. 24 25 Before: KIRSCHER, TAYLOR and KURTZ, Bankruptcy Judges. 26 27 28 1 KIRSCHER, Bankruptcy Judge: 2 3 Appellant and judgment creditor Karen Good appeals an order 4 wherein the bankruptcy court determined that § 108(c)1 did not 5 toll or extend the one-year expiration period for Good's lien 6 under CAL. CODE CIV. P. ("CCP") § 708.110(d). This precise question 7 of law is a matter of first impression before the Panel. We hold 8 that § 108(c) tolled the one-year expiration period imposed under 9 CCP § 708.110. Therefore, we VACATE AND REMAND. 10 I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY 11 A. Prepetition events 12 In 2001, two law firms obtained money judgments totaling 13 approximately $300,000 against Richard J. Swintek, a former 14 certified public accountant, for unpaid legal fees. In 2009, Good 15 acquired the money judgments by assignment. She renewed the 16 judgments in 2010 and began collection efforts. 17 On June 30, 2010, the state court issued an Application and 18 Order for Appearance and Examination ("ORAP") to Swintek pursuant 19 to CCP § 708.110. Good claims she personally served Swintek with 20 the ORAP on that same date. Swintek was ordered to appear for 21 examination on August 19, 2010. 22 In July 2010, Good instructed the Orange County Sheriff to 23 levy upon several deposit accounts and certificates of deposit 24 held in the name of Swintek and/or his wife. The sheriff took 25 custody of approximately $67,000. 26 27 1 Unless specified otherwise, all chapter, code and rule references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and 28 the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.

-2- 1 Swintek failed to appear for the ordered examination, 2 resulting in the state court continuing it until October 14 and 3 issuing a bench warrant for his arrest. Good claims she served 4 Swintek with the new notice. 5 B. Postpetition events 6 Swintek filed a chapter 7 bankruptcy case on September 2, 7 2010. He identified Good as a secured creditor with an execution 8 lien valued at $2,900, and he identified her as an unsecured 9 creditor holding a claim for $310,000 for "attorney's fees." 10 Notably, Good is Swintek's only creditor. Trustee Charles W. Daff 11 was appointed to Swintek's case. 12 Trustee eventually acquired the $67,000 in levied funds. 13 Good claimed all rights to them in her filed proof of claim. 14 Thereafter, upon Swintek's motion under § 522(f), the bankruptcy 15 court avoided Good's execution lien to the extent it impaired 16 Swintek's allowed exemption of $21,725. Trustee was to hold the 17 balance of the levied funds, $45,274.79 plus any accrued interest. 18 1. Good's first adversary complaint 19 In 2013, Good filed an adversary complaint against Trustee 20 seeking a determination on the priority of her lien and 21 declaratory relief. Good alleged that upon serving Swintek with 22 the ORAP, she obtained a lien (the "ORAP Lien") on all of his 23 personal property assets for one year under CCP § 708.110. Good 24 alleged that all funds held by Trustee were subject to her ORAP 25 Lien, yet he was refusing to distribute them to her. 26 In his motion to dismiss, Trustee argued that Good's ORAP 27 Lien, issued on June 30, 2010, expired one year after the date of 28 the order; thus, any lien created by service of the ORAP expired

-3- 1 on June 30, 2011. Trustee contended the one-year durational 2 period in CCP § 708.110(d) was not extended or tolled by § 108(c), 3 citing In re Gbadebo, 431 B.R. 222, 226 n.4 (Bankr. N.D. Cal. 4 2010). 5 Rejecting the "dictum" in Gbadebo that § 108(c) did not apply 6 to ORAP liens and relying on Kipperman v. Proulx (In re Burns), 7 291 B.R. 846, 849 n.4 (9th Cir. BAP 2003), the bankruptcy court 8 ruled that § 108(c) applied to Good's ORAP Lien. Therefore, 9 because Good had stated a claim for declaratory relief, Trustee's 10 motion to dismiss was denied. 11 2. Good's amended adversary complaint and the motions for summary judgment 12 13 Good filed an amended complaint against Trustee and the 14 parties filed multiple motions for summary judgment. Good 15 contended her ORAP Lien constituted an "enforcement" lien under 16 California law and remained stayed by § 362 until the levied funds 17 were no longer property of the estate. Because she was not 18 allowed to continue with her enforcement efforts once Swintek 19 filed bankruptcy, Good argued that § 108(c) tolled the one-year 20 enforcement period of her ORAP Lien, citing Miner Corp. v. Hunters 21 Run Ltd. P'ship (In re Hunters Run Ltd. P'ship), 875 F.2d 1425 22 (9th Cir. 1989), In re Burns, 291 B.R. at 849, and S. Cal. Bank v. 23 Zimmerman (In re Hilde), 120 F.3d 950 (9th Cir. 1997). 24 Trustee contended that Good's ORAP Lien expired by its own 25 terms on June 30, 2011, before her adversary complaint was filed, 26 and that § 108(c) did not toll the one-year period. Trustee 27 argued that § 108(c) did not apply to an ORAP lien because it is 28 created by service and does not involve a "commencement" or a

-4- 1 "continuation" of a civil action, as § 108(c) requires. In 2 support of his position, Trustee noted a recent case, Wolfe v. 3 Palladino (In re Harris), Adv. No. 8:13-01125 (Bankr. C.D. Cal. 4 Apr. 29, 2014), wherein the same bankruptcy court determined that 5 an ORAP lien is not a "commencement" or "continuation" of a civil 6 action, but rather is an "anomalous lien" arising after judgment 7 has been entered and an ORAP properly served; thus, § 108(c) did 8 not toll an ORAP lien's one-year expiration period. 9 In ruling for Trustee, the bankruptcy court acknowledged that 10 no appellate court within the Ninth Circuit has addressed the 11 issue of whether § 108(c) tolls the one-year expiration period of 12 an ORAP lien. A split in persuasive authority also exists among 13 bankruptcy courts. Ultimately, the bankruptcy court decided to 14 adopt its prior ruling in Harris: § 108(c) does not toll the one- 15 year expiration period of an ORAP lien. Accordingly, because Good 16 had not renewed her ORAP Lien prior to the expiration date in June 17 2011, it had expired. Therefore, she had no claim against the 18 levied funds; summary judgment for Trustee was appropriate. 19 Good timely appealed. 20 II. JURISDICTION 21 The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 22 and 157(a)(2)(K). We have jurisdiction under 28 U.S.C. § 158. 23 III.

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