Keith Speir v. 2425 W. Fifth St., Cre, LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: September 25, 2019
• Docket: 18-55731
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 25 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

In the Matter of: No. 18-55731

KEITH GRADY SPEIR; RHONDA LYNN D.C. No. 2:17-cv-06871-DOC SPEIR,

------------------------------ MEMORANDUM*

KEITH GRADY SPEIR; RHONDA LYNN SPEIR,

Appellants,

v.

2425 WEST FIFTH STREET, CRE LLC,

Appellee.

Appeal from the United States District Court for the Central District of California David O. Carter, District Judge, Presiding

Argued and Submitted September 10, 2019 Pasadena, California

Before: WARDLAW, BENNETT, and MILLER, Circuit Judges.

Keith and Rhonda Speir appeal from the district court’s judgment affirming

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. the bankruptcy court’s dismissal of the Speirs’ adversary complaint against 2425

West Fifth Street, CRE, LLC (2425 LLC). We have jurisdiction under 28 U.S.C.

§§ 158(d)(1) and 1291, and we affirm.

The bankruptcy court held that the Speirs did not have standing to bring an

adversary claim because the Speirs did not have a pecuniary interest in the

outcome. See Fondiller v. Robertson (In re Fondiller), 707 F.2d 441, 442–43 (9th

Cir. 1983). The bankruptcy court nevertheless reached the merits of the Speirs’

challenge and held that because 2425 LLC’s secured claim arose from a judgment

against the Speirs in California state court before the Speirs’ bankruptcy petition, it

accrued interest under the California postjudgment rate of 10%, not the lower rate

advocated by the Speirs. See Cal. Civ. Proc. Code § 685.010(a).

Unlike Article III standing, bankruptcy standing is not an element of subject-

matter jurisdiction. We therefore may assume without deciding that the Speirs have

standing. See Steel Co. v. Citizens for Better Env’t, 523 U.S. 83, 94–96 (1998).

On the merits, we agree with the bankruptcy court’s alternative holding that

the correct interest rate on 2425 LLC’s claim is the 10% rate specified by

California law. 11 U.S.C. § 506(b) allows 2425 LLC to collect “interest on such

claim, and any reasonable fees, costs, or charges provided for under the agreement

or State statute under which such claim arose.” The Speirs do not contest that 2425

LLC’s claim is oversecured and thus subject to section 506, but instead argue that

2 “interest” in section 506(b) must be defined by reference to 28 U.S.C. § 1961(a).

Section 1961(a)’s general definition of a rate of interest cannot override section

506(b)’s specific grant of interest “provided for under the agreement or State

statute under which” 2425 LLC’s secured claim arises. See RadLAX Gateway

Hotel, LLC v. Amalgamated Bank, 566 U.S. 639, 646–47 (2012). The Speirs rely

on Onink v. Cardelucci (In re Cardelucci), 285 F.3d 1231 (9th Cir. 2002), but that

decision addressed the rate of interest applicable to an unsecured claim under 11

U.S.C. § 726(a), rather than the rate of interest applicable to a secured claim under

section 506(b).

AFFIRMED.