FILED APR 11 2016 1 NOT FOR PUBLICATION 2 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. CC-15-1262-TaKuD ) 6 YAN SUI, ) Bk. No. 8:11-bk-20448-CB ) 7 Debtor. ) Adv. No. 8:13-ap-01246-CB ______________________________) 8 ) YAN SUI, ) 9 ) Appellant,* ) 10 ) v. ) MEMORANDUM** 11 ) ) 12 RICHARD A. MARSHACK, Chapter 7) Trustee; 2176 PACIFIC ) 13 HOMEOWNERS ASSOCIATION; ) SCOTTSDALE INSURANCE COMPANY; ) 14 JOHN CHANCE, Avenue Realty & ) Lending; ERIC F. KING; ) 15 MCKENNA, LONG AND ALDRIDGE, ) LLP; MISTY VANARKEL, ) 16 Executive Mortgage Specialist,) Wells Fargo Home Mortgage, ) 17 ) Appellees.*** ) 18 ______________________________) 19 * 20 Pei-Yu Yang also signed the opening appellate brief. Although she is the named plaintiff in the underlying adversary 21 proceeding, the order on appeal was not entered against Yang; thus, she is not a party to this appeal. 22 ** 23 This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may 24 have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8024-1(c)(2). 25 *** 26 Only three appellees filed briefs on appeal: Richard A. Marshack, Chapter 7 Trustee; 2176 Pacific Homeowners 27 Association; and Scottsdale Insurance Company. The remaining appellees waived their rights to appear in this case pursuant to 28 the conditional waiver order entered by the BAP Clerk of Court. 1 Argued and Submitted on March 17, 2016 at Pasadena, California 2 Filed – April 11, 2016 3 Appeal from the United States Bankruptcy Court 4 for the Central District of California 5 Honorable Catherine E. Bauer, Bankruptcy Judge, Presiding 6 Appearances: Appellant Yan Sui argued pro se; Chad V. Haes of 7 Marshack Hayes LLP argued for appellee Richard A. Marshack, Chapter 7 Trustee; Allyson Suzanne 8 Ascher of Bonne Bridges Mueller O’Keefe & Nichols argued for appellee 2176 Pacific Homeowners 9 Association; Meka Moore of Selman Breitman LLP argued for appellee Scottsdale Insurance Company. 10 11 Before: TAYLOR, KURTZ, and DUNN, Bankruptcy Judges. 12 13 INTRODUCTION 14 Chapter 71 debtor Yan Sui, pro se, appeals from a 15 bankruptcy court order denying his motion requesting an order to 16 show cause why the chapter 7 trustee, trustee’s counsel, 17 2176 Pacific Homeowners Association, and Scottsdale Insurance 18 Company, among others, should not be held in civil contempt 19 under § 105(a) for violating his § 524(a) discharge injunction. 20 The bankruptcy court denied the Debtor’s motion based on a 21 determination that the Debtor lacked standing. 22 We disagree with the bankruptcy court’s determination 23 regarding standing. Nonetheless, on other grounds apparent from 24 the record, we AFFIRM. 25 26 27 1 Unless otherwise indicated, all chapter and section 28 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
2 1 FACTS 2 Shortly after the Debtor filed a chapter 7 petition, his 3 trustee, Richard A. Marshack, learned of the Debtor’s pre- 4 petition transfer of his interest in real property located in 5 Costa Mesa, California (the “Property”) to Pei-Yu Yang. 6 Although the record is not clear, it appears that Yang is the 7 Debtor’s wife, ex-wife, or longtime domestic partner. 8 The Trustee commenced an adversary proceeding against Yang 9 (the “Avoidance Proceeding”) and successfully avoided the 10 transfer as a fraudulent conveyance. The Avoidance Proceeding 11 order, in addition to avoiding the transfer, characterized the 12 Debtor’s interest in the Property as property of the estate; 13 provided that the estate and Yang held title to the Property as 14 joint tenants; and authorized the Trustee to recover and 15 administer the estate’s interest in the Property for the benefit 16 of creditors.2 17 In the meantime, the Debtor received a chapter 7 discharge. 18 The Trustee then commenced a second adversary proceeding 19 against Yang, and sought to compel turnover of the Property, 20 sell it pursuant to § 363, and surcharge Yang’s interest in the 21 Property (the “Turnover Proceeding”). The Trustee also 22 prevailed in the Turnover Proceeding. A resulting order, among 23 other things, required immediate turnover of the Property and 24 authorized the Trustee to sell the Property, including any 25 26 2 Yang appealed this order to the Ninth Circuit, which 27 affirmed. As a result, the determination that the Debtor fraudulently transferred his interest in the Property is now 28 final.
3 1 interest held by Yang, free and clear of all interests.3 2 In order to effectuate the Turnover Order, the Trustee 3 moved for a “writ of assistance,” seeking authorization to evict 4 all occupants from the Property. The bankruptcy court granted 5 the motion, resulting in the Debtor’s (and Yang’s) eviction from 6 the Property. The Trustee also successfully obtained an order 7 approving a sale of the Property under § 363(b) and (m).4 8 The Debtor responded with a motion for an order to show 9 cause why the Trustee, his attorneys, and a number of other 10 parties should not be held in civil contempt for violating the 11 discharge injunction (“OSC Motion”). In the OSC Motion, the 12 Debtor argued that the Trustee violated his discharge injunction 13 through his actions with regard to the Avoidance Proceeding, the 14 Turnover Proceeding, the eviction of the Debtor and Yang, and 15 the sale of the Property. He also argued that the other parties 16 violated his discharge injunction through their participation in 17 the sale, through representation of the Trustee, or by failing 18 to withdraw proofs of claim filed in the Debtor’s bankruptcy 19 case. In short, he argued exclusively that activity to collect, 20 liquidate, and administer his bankruptcy estate and to evidence 21 claims against his bankruptcy estate violated the discharge in 22 23 3 Yang appealed the order to this Panel, which dismissed 24 the appeal as moot. See BAP No. 14-1498. Yang then appealed the dismissal order to the Ninth Circuit, where it remains 25 pending. See 9th Cir. No. 15-60066. 26 4 The Debtor appealed from the sale order. See BAP 27 No. 15-1200. The Panel dismissed that appeal as moot. An appeal of the dismissal order is currently pending before the 28 Ninth Circuit. See 9th Cir. No. 15-60065.
4 1 his bankruptcy case. 2 At a hearing, the bankruptcy court denied the OSC Motion. 3 It explained that the Debtor was not a party to the Turnover 4 Proceeding and, thus, that he lacked standing to bring the OSC 5 Motion. The bankruptcy court also patiently explained that a 6 bankruptcy trustee can sometimes have “years of work” after 7 entry of a debtor’s discharge in a bankruptcy case and that the 8 discharge related only to the Debtor’s personal liability for 9 debts. 10 Following the bankruptcy court’s entry of the order denying 11 his motion, the Debtor timely appealed. 12 JURISDICTION 13 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 14 §§ 1334 and 157(b)(2). We have jurisdiction under 28 U.S.C. 15 § 158. 16 ISSUES 17 Whether the Debtor had standing to file the OSC Motion; if 18 so, whether the bankruptcy court abused its discretion in 19 denying the motion. 20 STANDARDS OF REVIEW 21 Standing is an issue that we review do novo. Paine v. 22 Dickey (In re Paine), 250 B.R. 99, 104 (9th Cir. BAP 2000). 23 We review the bankruptcy court’s decision to deny the OSC 24 Motion for an abuse of discretion. Hilao v.
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FILED APR 11 2016 1 NOT FOR PUBLICATION 2 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. CC-15-1262-TaKuD ) 6 YAN SUI, ) Bk. No. 8:11-bk-20448-CB ) 7 Debtor. ) Adv. No. 8:13-ap-01246-CB ______________________________) 8 ) YAN SUI, ) 9 ) Appellant,* ) 10 ) v. ) MEMORANDUM** 11 ) ) 12 RICHARD A. MARSHACK, Chapter 7) Trustee; 2176 PACIFIC ) 13 HOMEOWNERS ASSOCIATION; ) SCOTTSDALE INSURANCE COMPANY; ) 14 JOHN CHANCE, Avenue Realty & ) Lending; ERIC F. KING; ) 15 MCKENNA, LONG AND ALDRIDGE, ) LLP; MISTY VANARKEL, ) 16 Executive Mortgage Specialist,) Wells Fargo Home Mortgage, ) 17 ) Appellees.*** ) 18 ______________________________) 19 * 20 Pei-Yu Yang also signed the opening appellate brief. Although she is the named plaintiff in the underlying adversary 21 proceeding, the order on appeal was not entered against Yang; thus, she is not a party to this appeal. 22 ** 23 This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may 24 have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8024-1(c)(2). 25 *** 26 Only three appellees filed briefs on appeal: Richard A. Marshack, Chapter 7 Trustee; 2176 Pacific Homeowners 27 Association; and Scottsdale Insurance Company. The remaining appellees waived their rights to appear in this case pursuant to 28 the conditional waiver order entered by the BAP Clerk of Court. 1 Argued and Submitted on March 17, 2016 at Pasadena, California 2 Filed – April 11, 2016 3 Appeal from the United States Bankruptcy Court 4 for the Central District of California 5 Honorable Catherine E. Bauer, Bankruptcy Judge, Presiding 6 Appearances: Appellant Yan Sui argued pro se; Chad V. Haes of 7 Marshack Hayes LLP argued for appellee Richard A. Marshack, Chapter 7 Trustee; Allyson Suzanne 8 Ascher of Bonne Bridges Mueller O’Keefe & Nichols argued for appellee 2176 Pacific Homeowners 9 Association; Meka Moore of Selman Breitman LLP argued for appellee Scottsdale Insurance Company. 10 11 Before: TAYLOR, KURTZ, and DUNN, Bankruptcy Judges. 12 13 INTRODUCTION 14 Chapter 71 debtor Yan Sui, pro se, appeals from a 15 bankruptcy court order denying his motion requesting an order to 16 show cause why the chapter 7 trustee, trustee’s counsel, 17 2176 Pacific Homeowners Association, and Scottsdale Insurance 18 Company, among others, should not be held in civil contempt 19 under § 105(a) for violating his § 524(a) discharge injunction. 20 The bankruptcy court denied the Debtor’s motion based on a 21 determination that the Debtor lacked standing. 22 We disagree with the bankruptcy court’s determination 23 regarding standing. Nonetheless, on other grounds apparent from 24 the record, we AFFIRM. 25 26 27 1 Unless otherwise indicated, all chapter and section 28 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
2 1 FACTS 2 Shortly after the Debtor filed a chapter 7 petition, his 3 trustee, Richard A. Marshack, learned of the Debtor’s pre- 4 petition transfer of his interest in real property located in 5 Costa Mesa, California (the “Property”) to Pei-Yu Yang. 6 Although the record is not clear, it appears that Yang is the 7 Debtor’s wife, ex-wife, or longtime domestic partner. 8 The Trustee commenced an adversary proceeding against Yang 9 (the “Avoidance Proceeding”) and successfully avoided the 10 transfer as a fraudulent conveyance. The Avoidance Proceeding 11 order, in addition to avoiding the transfer, characterized the 12 Debtor’s interest in the Property as property of the estate; 13 provided that the estate and Yang held title to the Property as 14 joint tenants; and authorized the Trustee to recover and 15 administer the estate’s interest in the Property for the benefit 16 of creditors.2 17 In the meantime, the Debtor received a chapter 7 discharge. 18 The Trustee then commenced a second adversary proceeding 19 against Yang, and sought to compel turnover of the Property, 20 sell it pursuant to § 363, and surcharge Yang’s interest in the 21 Property (the “Turnover Proceeding”). The Trustee also 22 prevailed in the Turnover Proceeding. A resulting order, among 23 other things, required immediate turnover of the Property and 24 authorized the Trustee to sell the Property, including any 25 26 2 Yang appealed this order to the Ninth Circuit, which 27 affirmed. As a result, the determination that the Debtor fraudulently transferred his interest in the Property is now 28 final.
3 1 interest held by Yang, free and clear of all interests.3 2 In order to effectuate the Turnover Order, the Trustee 3 moved for a “writ of assistance,” seeking authorization to evict 4 all occupants from the Property. The bankruptcy court granted 5 the motion, resulting in the Debtor’s (and Yang’s) eviction from 6 the Property. The Trustee also successfully obtained an order 7 approving a sale of the Property under § 363(b) and (m).4 8 The Debtor responded with a motion for an order to show 9 cause why the Trustee, his attorneys, and a number of other 10 parties should not be held in civil contempt for violating the 11 discharge injunction (“OSC Motion”). In the OSC Motion, the 12 Debtor argued that the Trustee violated his discharge injunction 13 through his actions with regard to the Avoidance Proceeding, the 14 Turnover Proceeding, the eviction of the Debtor and Yang, and 15 the sale of the Property. He also argued that the other parties 16 violated his discharge injunction through their participation in 17 the sale, through representation of the Trustee, or by failing 18 to withdraw proofs of claim filed in the Debtor’s bankruptcy 19 case. In short, he argued exclusively that activity to collect, 20 liquidate, and administer his bankruptcy estate and to evidence 21 claims against his bankruptcy estate violated the discharge in 22 23 3 Yang appealed the order to this Panel, which dismissed 24 the appeal as moot. See BAP No. 14-1498. Yang then appealed the dismissal order to the Ninth Circuit, where it remains 25 pending. See 9th Cir. No. 15-60066. 26 4 The Debtor appealed from the sale order. See BAP 27 No. 15-1200. The Panel dismissed that appeal as moot. An appeal of the dismissal order is currently pending before the 28 Ninth Circuit. See 9th Cir. No. 15-60065.
4 1 his bankruptcy case. 2 At a hearing, the bankruptcy court denied the OSC Motion. 3 It explained that the Debtor was not a party to the Turnover 4 Proceeding and, thus, that he lacked standing to bring the OSC 5 Motion. The bankruptcy court also patiently explained that a 6 bankruptcy trustee can sometimes have “years of work” after 7 entry of a debtor’s discharge in a bankruptcy case and that the 8 discharge related only to the Debtor’s personal liability for 9 debts. 10 Following the bankruptcy court’s entry of the order denying 11 his motion, the Debtor timely appealed. 12 JURISDICTION 13 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 14 §§ 1334 and 157(b)(2). We have jurisdiction under 28 U.S.C. 15 § 158. 16 ISSUES 17 Whether the Debtor had standing to file the OSC Motion; if 18 so, whether the bankruptcy court abused its discretion in 19 denying the motion. 20 STANDARDS OF REVIEW 21 Standing is an issue that we review do novo. Paine v. 22 Dickey (In re Paine), 250 B.R. 99, 104 (9th Cir. BAP 2000). 23 We review the bankruptcy court’s decision to deny the OSC 24 Motion for an abuse of discretion. Hilao v. Estate of Marcos, 25 103 F.3d 762, 764 (9th Cir. 1996). A bankruptcy court abuses 26 its discretion if it applies the wrong legal standard, 27 misapplies the correct legal standard, or if its factual 28 findings are illogical, implausible, or without support in
5 1 inferences that may be drawn from the facts in the record. See 2 TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832 3 (9th Cir. 2011) (citing United States v. Hinkson, 585 F.3d 1247, 4 1262 (9th Cir. 2009) (en banc)). 5 We may affirm on any basis supported by the record. See 6 Johnson v. Neilson (In re Slatkin), 525 F.3d 805, 810 (9th Cir. 7 2008). 8 DISCUSSION5 9 The bankruptcy court denied the OSC Motion based on a 10 determination that the Debtor was not a party to the Turnover 11 Proceeding and the conclusion that the Debtor, thus, lacked 12 standing to bring the OSC Motion. We disagree with this 13 conclusion. A debtor invariably has standing to assert claims 14 based on an alleged violation of his discharge injunction. 15 Thus, the bankruptcy court erred. 16 On this record, however, the error was harmless; the 17 Debtor’s allegations of discharge violative conduct are without 18 19 5 In his opening brief and reply brief on appeal, the 20 Debtor apparently requests that we take judicial notice of the 21 excerpts of record filed in several other appeals to this Panel (BAP Nos. CC-14-1022, CC-14-1498, CC-14-1439, and CC-15-1200), 22 as part of the record in this appeal. We deny the Debtor’s requests. In reviewing the bankruptcy court’s decision here, we 23 consider only those documents presented to it in connection with 24 the order on appeal. See Kirshner v. Uniden Corp. of Am., 842 F.2d 1074, 1077 (9th Cir. 1988). 25 We do, however, exercise our discretion to take judicial notice of the existence of certain related appeals and documents 26 electronically filed in the adversary proceeding, the underlying 27 bankruptcy case, and the related appeals, to the extent pertinent. See Atwood v. Chase Manhattan Mortg. Co. 28 (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).
6 1 merit.
2 A debtor’s discharge injunction does not preclude his
3 trustee from initiating recovery actions or from seeking to sell
4 or obtain possession of estate assets. Once a debtor’s trustee
5 prevails in a recovery action or obtains the right to possession
6 or sale of estate assets, a debtor’s discharge does not bar the
7 trustee from implementing the resulting orders. Similarly, a
8 debtor’s discharge does not bar his pre-petition creditors from
9 filing and maintaining claims against estate assets in the case
10 from which the discharge issues. Ultimately, the Debtor’s
11 allegations of discharge violations are meritless because the
12 Trustee and other appellees acted consistent with the Bankruptcy
13 Code, the Federal Rules of Bankruptcy Procedure, or bankruptcy
14 court orders.
15 In seeking to avoid the Debtor’s fraudulent transfer to
16 Yang, to recover physical possession of the Property, and to
17 sell the Property for the benefit of creditors, the Trustee
18 carried out his duties as the administrator of the bankruptcy
19 estate under § 704(a)(1). Indeed, in the absence of a sale,
20 only the Trustee could pursue fraudulent transfer claims under
21 the Bankruptcy Code. See, e.g., Stoll v. Quintanar
22 (In re Stoll), 252 B.R. 492, 495 (9th Cir. BAP 2000).
23 Further, in connection with the eviction and sale, the
24 Trustee acted as authorized by bankruptcy court order. These
25 actions consistent with the obligation to “collect and reduce to
26 money the property of the estate” did not violate the Debtor’s
27 discharge injunction - there was no collection, recovery, or
28 offset of a debt as a personal liability against the Debtor.
7 1 This reasoning applies with equal force to the Trustee’s agents
2 and to those who purchased the Property as allowed by bankruptcy
3 court order.
4 At oral argument, appellees 2176 Pacific Homeowners
5 Association and Scottsdale Insurance Company made clear that
6 neither took any collection action independent of the filing of
7 a proof of claim as allowed by § 501(a). As the Debtor received
8 a discharge only in the underlying bankruptcy case, his
9 creditors did not violate the discharge injunction when they
10 filed timely proofs of claim and refrained from withdrawing them
11 after discharge issued.
12 In sum, none of the appellees’ actions violated the
13 § 524(a) injunction.
14 CONCLUSION
15 Based on the foregoing, we AFFIRM the bankruptcy court’s
16 denial of the OSC Motion.
17 18 19 20 21 22 23 24 25 26 27 28