1 2 POSTED ON WEBSITE 3 NOT FOR PUBLICATION 4 5 UNITED STATES BANKRUPTCY COURT 6 EASTERN DISTRICT OF CALIFORNIA 7 8 9 10 In re ) Case No. 22-22864-E-13 ) Docket Contol No. DPC-3 11 NATHANIEL BASOLA SOBAYO, ) ) 12 Debtor. ) ) 13 ) NATHANIEL BASOLA SOBAYO, ) Adv. Proc. No. 23-2001 14 ) Docket Control No. CAE-1 Plaintiff, ) 15 ) This Memorandum Opinion and Decision and v. ) Order Relating Thereto Are Filed in Both the 16 ) Bankruptcy Case and Adversary Proceeding, the THE BANK OF NEW YORK MELLON, ) Motion Having Been Filed in Both 17 et al., ) ) 18 Defendants. ) ___________________________________) 19 This Memorandum Decision is not appropriate for publication. 20 It may be cited for persuasive value on the matters addressed. 21 MEMORANDUM OPINION AND DECISION DENYING 22 MOTION FOR RECONSIDERATION AND 23 MOTION FOR CONTINUANCE OF ALL RELATED PROCEEDINGS 24 The court has provided this extensive and detailed Memorandum Opinion and Decision to 25 the Motion for Reconsideration and Continuance for several reasons. First, for the court to provide 26 the Debtor with a complete explanation of why the court is not granting the ex parte relief. Debtor 27 failed to attend the hearings on several Objections to Confirmation, hearings he sought to have 28 continued, and was not present when the court addressed this is open court. 1 Second, this is not the first or second bankruptcy case that has been filed by Debtor. Debtor 2 has three prior cases dating back to December 2018 during which the grounds asserted for 3 Reconsideration and For Continuance of All Related Proceedings has been made to the courts. The 4 court reviews this history in this Memorandum Opinion and Decision. 5 Third, based on the Debtor’s Schedules, he has assets of substantial value, with nonexempt 6 equity, that are in the Bankruptcy Estate in his current bankruptcy case. The Chapter 13 Trustee has 7 a motion pending to convert this case to one under Chapter 7 so that a Chapter 7 trustee administers 8 those assets and the nonexempt equity recovered for Debtor’s creditors, and those assets are not lost 9 through the filing and ineffective prosecution of multiple bankruptcy cases by Debtor. This would 10 also prevent the Debtor from losing exempt assets to foreclosure sales. 11 MOTION FOR RECONSIDERATION AND CONTINUANCE 12 Debtor Nathaniel Sobayo commenced his current bankruptcy case, 22-22864 (Debtor’s 13 “Current Fourth Bankruptcy Case”) on November 3, 2022. On January 24, 2023, the same day as 14 several objections to confirmation of the proposed Chapter 13 Plan filed by Debtor Nathaniel 15 Sobayo were to be heard, Debtor filed an ex parte motion titled: 16 Notice of Ex Parte Motion and Motion for Reconsideration of Order granting Relief 17 From Automatic Stay to Gordon Property Management San Francisco ET AL; January 10, 2023and Notice of Experte [sic] Motion and Motion for Continuance of 18 all Related Proceedings in These Cases In Order to Hire A Lawyer For Competent and Zealous Representation, to Represent Debtor and Plaintiff [Debtor having 19 commenced an Adversary Proceeding, 23-2001, on January 3, 2023]. 20 Ex Parte Motion, filed in this Debtor’s Current Fourth Bankruptcy Case, Dckt. 108; and Debtor’s 21 Current Adversary Proceeding, 23-2001, Dckt. 11. 22 At the January 24, 2023 hearings, the court orally addressed the Debtor’s Ex Parte Motion 23 For Continuance of All Related Proceedings. The Debtor did not appear at the hearings. The court 24 orally stated that it was denying the Ex Parte Motion For Continuance. 25 OVERVIEW OF DEBTOR’S PRIOR BANKRUPTCY CASES 26 Debtor has three prior bankruptcy cases that were dismissed. These cases are: 27 a. Eastern District of California Chapter 13 Case 22-20063 (Debtor’s “Third Bankruptcy Case”): 28 1 i. Filed..........................January 11, 2022 ii. Dismissed...........................September 14, 2022 2 iii. Debtor was represented by counsel when the Third Bankruptcy Case was filed. Said counsel withdrew from representation of Debtor, with Debtor 3 stating at the hearing that he did not oppose the withdrawal of counsel and that Debtor was seeking new counsel. 22-20063; July 7, 2022 Order, 4 Dckt. 73. 5 iv. On July 28, 2022, Debtor filed an Ex Parte Application For Order of Continuance of Trustee’s Motion to Dismiss in Order to Permit Adequate 6 Time to Hire a Lawyer for Competent and Zealous Representation. Id.; Dckt. 74. 7 (1) Debtor requested that the hearing on the Trustee’s Motion to Dismiss 8 be continued from August 2, 2022, to September 19, 2022. 9 (a) Debtor states that the prior time granted by the court “is not reasonably sufficient for debtor to secure a competent and 10 zealous attorney. . . .” Id., p. 1:27-28. Debtor continues listing seven lawyers or Legal Services/Senior Adult Legal 11 Assistant referrals he received. 12 (2) The Motion continues, appearing to include portions from a prior pleading. 13 (3) The court granted the Ex Parte Motion, continuing the hearing on the 14 Trustee’s Motion to Dismiss to September 13, 2022. Id.; Order, Dckt 82. 15 v. Previously in the Third Bankruptcy Case, on June 15, 2022, Debtor filed a 16 pro se Opposition to the Trustee’s Motion to Dismiss. Id. Dckt. 62. In the accompanying Memorandum with his Opposition, Debtor requested: (1) a 17 jury trial on the Motion to Dismiss, and (2) that the hearing on the Motion to Dismiss be continued at least 120 days from the then set July 7, 2022 hearing 18 date, so that Debtor can hire “a new lawyer to zealously, represent me, the same debtor, petitioner and plaintiff. . . .” Id.; Memorandum, Dckt. 62. 19 vi. The court granted Debtor’s Motion to Continue the July 7, 2022 hearing date, 20 continuing it to August 2, 2022. Id.; Order, Dckt. 72. 21 vii. The court then continued the hearing on the Motion to Dismiss again, to the September 6, 2022 hearing date. Id.; Order, Dckt. 82. Debtor requested the 22 further continuance; Id.; Ex Parte Motion, Dckt. 74; with Debtor stating that the time previously given was not sufficient for “debtor to secure a 23 competent and zealous representation attorney.” 24 viii. The court denied the request for a further continuance, and granted the Trustee’s Motion to Dismiss the Third Bankruptcy Case. Id.; Order, 25 Dckt. 92. 26 Looking at just Debtor’s Third and Fourth Bankruptcy Cases in the Eastern District of California, 27 Debtor has been seeking to “secure a competent and zealous attorney” since June 15, 2022, here in 28 the Eastern District of California. Debtor has had now more than seven (7) months to secure such 1 counsel. 2 b. Northern District of California Chapter 13 Case 19-50887 (Debtor’s “Second 3 Bankruptcy Case”): 4 i. Filed..........................April 20, 2019 5 ii. Dismissed...........................August 18, 2022. 6 iii. Debtor was represented by counsel in his Second Bankruptcy Case. 7 iv. On July 8, 2019, the Chapter 13 Trustee in Debtor’s Second Bankruptcy case filed a Motion to Dismiss the case; 19-50887; Motion, Dckt. 31. 8 (1) The Trustee Motion grounds stated in the Motion include: 9 (a) Debtor failed to provide proof of Debtor being current on all 10 Post-Petition payments on a Class 1 Secured Claim under the proposed plan. Id., p. 1. 11 (b) Debtor’s proposed plan included a nonstandard provision to 12 pay the Class 1 Claim (a secured claim with prepetition defaults to be cured) directly rather than through the Plan as 13 otherwise required for Class 1 claims. 14 (c) General Order 34 of the Northern District Bankruptcy Court requires that debtors seeking to use that nonstandard 15 provision to provide evidence that such payments have been made. 16 (2) Debtor responded on July 22, 2019, to the Motion to Dismiss with a 17 Motion to Continue the Chapter 13 Bankruptcy Case Proceeding; Id.; Dckt. 36, which grounds included the following grounds (the below 18 listing not recounting all of the statements and allegations in the Motion to Continue): 19 (a) It has become apparent to Debtor that his bankruptcy counsel 20 in the Second Bankruptcy Case is “not enthusiastic, passionate, nor zealous about the debtor’s case. . . .” Id., p. 21 1. 22 (b) Debtor has claims against “some Predatory, Fruadulent [sic] and Malicious Illegal Lenders . . . Yet, the attorney of 23 records, continues to ignore, any such plea, nor all other series of pleas. . . .” Id., p. 2. 24 (c) Thus, Debtor requested of the court in his Second Bankruptcy 25 Case: 26 [g]rant this debtor 120 days of continuance from the date of the granting of debtor's motion, or from the date of the hearing to dismiss case as scheduled 27 by the Chapter 13 Trustee. It is also estimated that, seeking and getting approval of a pro bono bankruptcy law firm and or other attorney or attorneys 28 to handle and help to handle and cure all errors of deficiencies as claimed by 1 the chapter 13 trustee, in order to be enabled to protect debtor's ; STATE OF CALIFORNIA AND UNITED STATES FEDERAL 2 CONSTITUTIONAL LEGAL PROTECTIONS, but not limited to a comprehensive legal bankruptcy rights, civil rights, in efforts; to secure relief 3 and peace in debtor's life, this will take, in the minimum, 120 days or longer, without creating and any harm what so ever to any and all legally bonafide 4 creditors. 5 Id., p. 4. 6 (d) The bankruptcy judge did not grant the continuance and ordered the case dismissed by an Order entered on August 6, 7 2019. Id.; Dckt. 39. 8 v. On August 23, 2019, Debtor filed an Ex Parte Motion to Vacate the court’s order dismissing the Second Bankruptcy Case. Id.; Dckt. 40. 9 (1) Debtor’s grounds for vacating the Order Dismissing the Case 10 included (but are not limited to): 11 (a) Reference is made to Debtor being the victim of 12 (i) “series of illegal lynching by a group of predatory lenders, probable money launders, fraudsters, and 13 tricksters, for the past 27 months and still counting hitherto.” Id., p. 2:6-8. 14 (b) Debtor seeks to: 15 [c]orrect possible conflicting errors caused by the manipulations of this 16 debtor's enemies in series of their DIABOLICAL TACTICS USED TO DECEIVE THIS HONORABLE COURT AND THE CHAPTER 13 TRUSTEE IN DISMISSING 17 A GOOD FAITH EFFORTS TO RE-ORGANIZE THIS DEBTOR'S FINANCIAL CONDITIONS FOR SUCCESS AND A PEACEFUL LIFE. 18 Id., p. 2:14-19. 19 (2) Identified state court proceedings were not stayed by the state court 20 judge after the Second Bankruptcy Case was filed. 21 (3) That Debtor’s lawyers were not providing “Zealous, Competent, and Or Loyal Legal Representation” for the Debtor. Id., p. 4:2-8. 22 (4) Improper rulings have been issued in the various state court actions. 23 (5) Parties in the state court actions failed to comply with the meet and 24 confer requirements. 25 (6) Much of the grounds are stated as collateral attacks on various state court rulings and proceedings. Much of the pleading reads as if it 26 were written to be filed in state court proceedings or copy and pasted from such pleading into the Motion to Vacate. 27 /// 28 /// 1 (7) In addition to vacating the order dismissing the case, all proceedings in the Second Bankruptcy Case should be continued to afford Debtor 2 time for: 3 Searching, Interviewing, Investigating, Making of Decisions; and For; Hiring Competent and Zealous Lawyers; With the Required Loyalty of this Debtor 4 Petitioner. . . . 5 Id., p. 30:7-15. 6 When this earlier date of July 22, 2019, when Debtor stated he was seeking “Zealous” and 7 “Loyal” counsel, is cobbled onto the periods of the Third Bankruptcy Case and the Current Fourth 8 Bankruptcy Case, Debtor has been on this search for forty (40) Months (August 2019 through 9 January 24, 2023). 10 vi. On September 8, 2019, the bankruptcy judge denied the Motion to Vacate the Order Dismissing the Bankruptcy Case. Id.; Dckt. 43. In the Order the 11 court: 12 (1) States that the bankruptcy case was dismissed not only due to the failure of Debtor to document that the post-petition payments had 13 been made to the Class 1 creditor, but that Debtor had also failed to make any Chapter 13 Plan payments and that Debtor exceeded the 14 debt limits for a Chapter 13 case. Id.; 2:13-17. Further, Debtor had not disputed these facts. 15 (2) The court then provided a discussion, including the applicable legal 16 authorities, that the federal court did not have authority to review, and overrule, determinations in state court judicial proceedings. Id., 17 p. 2:18-22, 3:1-3. 18 vii. On September 16, 2019, Debtor filed a Notice of Appeal of the Order Denying the Motion to Vacate. Bankruptcy Appellate Panel No. NC-19- 19 1231. 20 (1) The Bankruptcy Appellate Panel affirmed the bankruptcy court’s order denying the Motion to Vacate. Sobayo v. Derham-Burk (In re 21 Sobayo), 9th Cir. Bankruptcy Appellate Panel No. NC-19-1231, 2020 Bankr. LEXIS 1403 (B.A.P. 9th Cir. 2020). 22 (a) In sustaining the bankruptcy court, the Bankruptcy Appellate 23 Panel’s decision includes the following: 24 Mr. Sobayo has never advanced a relevant argument supporting reconsideration of the dismissal of his case. He did not assert, nor 25 does the record reflect, any circumstances that would constitute mistake, inadvertence, surprise, or excusable neglect under Civil Rule 26 60(b)(1). While he states on appeal that the three bankruptcies he filed were "needlessly, negligently, and abusively dismissed without 27 merits" due to "mistakes" of the bankruptcy court and the trustee, he failed to specifically identify any "mistakes" warranting 28 reconsideration. Nor did he offer newly discovered evidence under 1 Civil Rule 60(b)(2), argue that the dismissal order was void under Civil Rule 60(b)(4), or argue that it had been satisfied, discharged, or 2 released under Civil Rule 60(b)(5). At best, his desire for adversary proceedings to address alleged issues in state court matters could be 3 considered under the catch-all provision, Civil Rule 60(b)(6). But, his desire to file adversary proceedings does not excuse his missed plan 4 payments, noncompliance with local rules, and chapter 13 ineligibility. 5 We acknowledge the sincerity of Mr. Sobayo's view that he has been 6 ill-served by his attorneys, lenders, and others. And we do not underestimate the difficulties that he has faced in navigating through 7 disputes in several courts. But there is no basis consistent with controlling law for a reversal of the bankruptcy court's decision to 8 deny the Reconsideration Motion. 9 Sobayo v. Derham-Burk (In re Sobayo), 2020 Bankr. LEXIS 1403, *2-3. 10 c. Northern District of California Chapter 13 Case 18-52678 (Debtor’s “First Bankruptcy Case”): 11 i. Filed..........................December 5, 2018 12 ii. Dismissed...........................February 4, 2019 13 iii. Debtor was represented by counsel in his First Bankruptcy Case. 14 iv. The First Bankruptcy Case was dismissed when Debtor failed to file, after having been granted an extension of time, required documents (amended 15 Schedules, Amended Statement of Financial Affairs, and Chapter 13 Plan) and federal income tax returns. 18-52678; Order, Dckt. 33. See, Motion for 16 Extension of time; Id., Dckt. 7. 17 REVIEW OF CURRENT FOURTH BANKRUPTCY CASE 18 Debtor has been in this, his Current Fourth Bankruptcy Case, since he filed it on 19 November 3, 2022. A Chapter 13 Plan was filed on November 16, 2022. Dckt. 20. The basic terms 20 of the Plan are: 21 A. The Term of the Plan is twelve (12) months. Plan, ¶ 2.03. 22 B. Debtor’s monthly plan payment is $160. Id., ¶ 2.01. 23 C. Debtor is to sell the 2112 Lincoln Street, East Palo Alto, California property as additional funding for the Chapter 13 Plan. 24 D. For creditors to be paid through the Chapter 13 Plan, it provides: 25 1. Class 1 Secured Claim with pre-petition defaults, Plan ¶ 3.07(c) 26 a. None 27 /// 28 /// 1 2. Class 2 Secured Claims to be paid through the Plan, Plan ¶ 3.08(d) 2 a. None 3 3. Class 3 Secured Claims for surrender of collateral, Plan ¶ 3.09. 4 a. None 5 4. Class 4 Secured Claims for which there are no defaults and are not modified by the Plan, Plan ¶ 3.10. 6 a. Carrington Mortgage...........$1,641.10 Current Monthly Installment 7 b. Santander Consumer USA/Auto........$528.77 Current Monthly 8 Installment 9 5. Class 5 Priority Unsecured claims, Plan ¶ 3.12. 10 a. None 11 6. Class 6 Unsecured Claims for special treatment (such as a third-party co-obligor), Plan ¶ 3.13. 12 a. None. 13 7. Class 7 General Unsecured Claims, Plan ¶ 3.14. 14 a. 100% dividend for projected $71,800.00 in claims. 15 16 The proposed Plan includes a nonstandard provision, ¶ 7.01, that modifies ¶ 2.01, stating that 17 Debtor will list and sell the East Palo Alto, California property and that Debtor “intends” to close 18 escrow within twelve months. Id., p. 7. The proceeds will pay the Select Portfolio and Wells Fargo 19 Bank, N.A. secured claims, and is “expected” to pay all “acceptable” unsecured and priority claims, 20 “if any will paid accordingly.” Id. 21 Review of Schedules 22 On his Schedule D, Debtor lists two creditors asserting secured claims against him: 23 Carrington Mortgage Services ($241,000) Disputed Claim Secured by “Real Estate Property” 24 (the collateral not identified) 25 Select Portfolio Serv’g ($224,000) Disputed Claim Secured by “Real Estate Property” 26 (the collateral not identified) 27 Schedule D, Dckt. 19 at 15. 28 On Schedule E, Debtor states that he has no creditors who are asserting priority unsecured 1 claims against him. Id. at 18. 2 Review of Claims Register 3 The Claims Register for this Current Fourth Bankruptcy Case includes the following Proofs 4 of Claim filed by creditors who are asserting such claims against Debtor: 5 A. Proof of Claim 2-1 filed by Santander Consumer USA, Inc. 6 1. ($19,546.21) secured claim 7 a. Collateral 2020 Mitsubis Outlander SP 8 B. Proof of Claim 3-1 filed by the Internal Revenue Service 9 1. ($162,514.18) Secured Claim 10 a. Collateral: Real Estate Motor Vehicles, “*All of debtor(s) right, title and interest to property - 26 U.S.C. §6321.” 11 2. ($95,422.38) Priority Unsecured Claim 12 3. ($87,719.41) General Unsecured Claim 13 C. Proof of Claim 4-1 filed by American Credit Acceptance 14 1. ($8,943.66) Secured Claim 15 a. Collateral: 07 BMW 3 Series, Notice of Lien 16 D. Proof of Claim 5-1 filed by Bank of New York Mellon, as Trustees, with Carrington 17 Mortgage Services, LLC listed as the loan servicer. 18 1. ($241,696.95) Secured Claim 19 a. Collateral: 519 Granite Way, Vacaville, CA. 20 E. Proof of Claim 6-1 filed by Wheels Financial Group LLC, dba 1-800LoanMart. 21 1. ($23,498.72) Secured Claim 22 a. Motor Vehicle, Secured Title Loan 23 F. Proof of Claim 10-1 filed by Wells Fargo Bank, N.A., as Trustee, with Select Portfolio Servicing, Inc. listed as the loan servicer. 24 1. ($862,700.56) Secured Claim 25 a. Collateral 2112 Lincoln Street, East Palo Alto, California. 26 27 Debtor’s Prosecution of the Current Fourth Chapter 13 Case 28 Since the November 3, 2022 filing of this Current Fourth Bankruptcy Case and the 1 November 6, 2022 filing of the Chapter 13 Plan, and November 8, 2022 filing of a Motion to Extend 2 the Automatic Stay, it does not appear that Debtor has taken any steps in prosecuting this case. The 3 majority of Debtor’s filings have been to continue hearings and all proceedings in this Current 4 Fourth Bankruptcy Case based on him continuing to try and find “zealous” counsel to represent him. 5 In the Internal Revenue Service’s Objection to Confirmation of the Debtor’s Plan (Dckt. 63), 6 the grounds include: 7 A. Debtor has not filed tax returns for: 8 1. 2021, 9 2. 2020, and 10 3. 2019. 11 B. Debtor’s Plan does not provide for the Internal Revenue Service secured, priority, 12 and general unsecured tax liabilities. 13 In the Trustee’s Objection to Confirmation (Dckt. 72), the Trustee’s grounds include: 14 (1) Debtor not providing the Trustee with the required business questionnaire, six months of bank 15 statements, and tax returns. Additionally, Debtor does not provide information as to how he will, 16 under the Plan, market and sell the East Palo Alto property, and whether such net proceeds will be 17 sufficient to pay the secured, unsecured, and priority unsecured claims. 18 Wells Fargo Bank, N.A. (“Creditor WFB”) filed its Objection to Confirmation (Dckt. 76), 19 which grounds include: (1) Debtor fails to provide for any payments on its secured claim, other than 20 from proceeds from a future sale of property; (2) Creditor WFB has been trying to foreclose on its 21 collateral since 2018, and has been derailed by the series of unsuccessful bankruptcy cases filed by 22 Debtor; and (3) Debtor’s proposed plan is for another 12-month period sale of property to fund a 23 plan (in Debtor’s Second Bankruptcy Case, the Plan provided for the sale of the 329 Hawk Ridge 24 Drive property within 12 months to fund that Plan; 19-50887, Plan ¶ 2.02, Dckt. 11; and in Debtor’s 25 Third Bankruptcy Case the Plan filed on January 18, 2022, provided for the sale of the East Palo 26 Alto Property within six months to fund the Plan, 22-20062, Plan ¶¶ 2.02, 2.03). 27 Though the Debtor’s Third Bankruptcy Case filed in the Eastern District of California 28 required the Plan to be completed and the East Palo Alto Property to be sold within six months, 1 during the nine months the case was pending, nothing on the Docket reflects any efforts by Debtor 2 to hire a real estate professional or sell the property. 3 In the Current Fourth Bankruptcy Case, Debtor has not sought the employment of a real 4 estate professional or the sale of the East Palo Alto Property. 5 DENIAL OF MOTION TO VACATE AND FOR CONTINUANCE OF ALL RELATED PROCEEDINGS 6 Denial of Motion for Reconsideration/Vacate Order 7 Granting Relief From the Stay 8 The court first addresses Debtor’s request that the Court Reconsider the court’s prior order 9 granting relief from the automatic stay. Though Debtor does not state the grounds and legal 10 authority for this court “Reconsidering” the granting of relief from the stay so that the Gordon 11 Property Management San Francisco could enforce any rights to obtain possession of the apartment 12 rented by Debtor and others in Sunnyvale, California, the court applies the applicable law pursuant 13 to Federal Rule of Civil Procedure 60(b) and Federal Rule of Bankruptcy Procedure 9024. 14 This applying of the correct law, notwithstanding Debtor identifying it and stating grounds 15 relating thereto, is the same as the Bankruptcy Court for the Northern District of California and the 16 Bankruptcy Appellate panel did when Debtor sought Reconsideration of that Bankruptcy Court’s 17 order terminating the automatic stay. In those decisions, the correct law and what is required for 18 such relief is explained by those courts. Unfortunately, the Debtor did not use that information in 19 making the current request. 20 This court provides a detailed Ruling for the granting of the Motion for Relief From the 21 Automatic Stay. Civil Minutes; Dckt. 96. This court delayed the effective date of the relief from 22 stay twenty-five days to afford Debtor the opportunity to address that situation and prosecute the 23 Current Fourth Bankruptcy Case. Though granting relief from the stay, the Debtor still has the right 24 and opportunity to assert his various claims and defenses in any unlawful detainer litigation. 25 Federal Rule of Civil Procedure Rule 60(b), as made applicable by Federal Rule of 26 Bankruptcy Procedure 9024, governs the reconsideration of a judgment or order. Grounds for relief 27 from a final judgment, order, or other proceeding are limited to: 28 (1) mistake, inadvertence, surprise, or excusable neglect; 1 (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); 2 (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or 3 misconduct by an opposing party; 4 (4) the judgment is void; 5 (5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it 6 prospectively is no longer equitable; or 7 (6) any other reason that justifies relief. 8 FED. R. CIV. P. 60(b). A Rule 60(b) motion may not be used as a substitute for a timely appeal. 9 Latham v. Wells Fargo Bank, N.A., 987 F.2d 1199, 1203 (5th Cir. 1993). The court uses equitable 10 principles when applying Rule 60(b). See 11 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE 11 AND PROCEDURE § 2857 (3d ed. 1998). The so-called catch-all provision, Federal Rule of Civil 12 Procedure 60(b)(6), is “a grand reservoir of equitable power to do justice in a particular case.” Uni- 13 Rty Corp. V. Guangdong Bldg., Inc., 571 F. App’x 62, 65 (2d Cir. 2014) (citation omitted). While 14 the other enumerated provisions of Rule 60(b) and Rule 60(b)(6) are mutually exclusive, relief under 15 Rule 60(b)(6) may be granted in extraordinary circumstances. Liljeberg v. Health Servs. Acquisition 16 Corp., 486 U.S. 847, 863 & n.11 (1988). 17 A condition of granting relief under Rule 60(b) is that the requesting party show that there 18 is a meritorious claim or defense. This does not require a showing that the moving party will or is 19 likely to prevail in the underlying action. Rather, the party seeking the relief must allege enough 20 facts that, if taken as true, allow the court to determine if it appears that such defense or claim could 21 be meritorious. 12 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE ¶¶ 60.24[1]–[2] (3d ed. 22 2010); see also Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). 23 Review of Grounds Stated in Ex Parte Motion 24 The grounds stated in the Motion for Reconsideration and For Continuance of all Related 25 Proceedings (Current Fourth Bankruptcy Case Dckt. 108; Adv. 23-2001, Dckt. 111) are summarized 26 27 1 The one motion and supporting pleadings thereto have been filed in both the Bankruptcy Case and Adversary Proceeding, since the request has been made in connection with the Bankruptcy Case and 28 the Adversary Proceeding. 1 by the court as follows: 2 A. Reconsideration is sought pursuant to 11 U.S.C. § 502(j) and Federal Rule of Bankruptcy Procedure 3008 which provide for the reconsideration of the allowance 3 or disallowance of a claim for cause. Motion, p. 2:3-7. 4 B. An outstanding settlement offer was made, a counter offer made by Debtor, and no response to the counter offer has been delivered to Debtor. Therefore, Debtor 5 concludes that the settlement offer was not made in good faith. Id., p. 2:8-12. 6 C. If the continuance is granted to allow Debtor to obtain the services of an “excellent professional lawyer,” such lawyer would be able to show all of the errors “inherent 7 during the status conference” at which the court granted relief from the automatic stay. Id., p. 2:13-16. 8 D. Extraordinary Circumstances Exist for Reconsideration, which are: 9 1. Debtor will be denied due process of law, because he has not yet obtained 10 “competent legal representation.” Id., p. 2:21-23. 11 2. Debtor is not clear if the court’s order is an interlocutory or final order, so the motion is being presented under Federal Rule of Bankruptcy Procedure 2023 12 and Federal Rule of Bankruptcy Procedure 2024. Id., p. 2:25-27. 13 3. Debtor is 77 years old and needs “a zealous legal representation” to present controlling law and all new evidence. Id.; p.3:2-3. 14 4. Opposing sides have “employed trickeries” which have caused “mistakes, 15 inadvertence, surprise, excusable neglect,” and “possible void judgment.” Id., p. 3:5-8. Reparations are required for Debtor. 16 17 In this part of the Motion, Debtor parrots the words from Federal Rule of Civil Procedure 60(b), but 18 only the legal conclusion and not any alleged facts or grounds. 19 5. “Manifest Injustice” must be prevented, the court has been misled, and the order granted “by ways of subterfuges and obfuscations of the opposing 20 sides.” Id., p. 3:10-13. 21 Again, Debtor states general conclusions, but no grounds as they related to a Motion for Relief From 22 the Stay by a landlord to go to state court and litigate the landlord’s right to possession to the 23 property and Debtor’s contentions why he is owed money and does not have to pay rent. 24 6. Debtor needs from 90 to 180 days to obtain counsel, and process all of the “data intakes,” Id., p.4:12-18. 25 7. Debtor has filed an Adversary Proceeding, and there are $3,000,000 of assets 26 at issue. Id., p. 6:4-11. 27 Here, Debtor’s various reasons to have the Order “Reconsidered” does not provide grounds 28 for any of the Rule 60(b) provisions. Debtor believes that granting relief should be further delayed 1 with the automatic stay reinstated because Debtor has not yet been able to find “Zealous” and 2 “Loyal” counsel to represent him. Additionally, all of the wrongs done to him in state court 3 proceedings and that this court should review those state court proceedings and rulings, and will find 4 them invalid. That is not a basis under Rule 60(b)(1)-(5) and is an “any other reason that justifies” 5 such relief under Rule 60(b)(6). 6 As discussed below in connection with Debtor’s request for continuance of all related 7 proceedings and the above review of the Debtor’s Second, Third, and now Fourth Current 8 Bankruptcy Case, Debtor has been on his quest to find the right “Zealous” and “Loyal” counsel for 9 forty (40) months. During that almost three and one-half years, Debtor has failed to find a counsel 10 to his liking. It may be that he has had a series of bad luck and did not connect with one of the many 11 attorneys in the Northern District or Eastern District of California who successfully and zealously 12 represent debtors and debtors in possession in a multitude of bankruptcy cases. Or, it may be a 13 situation where Debtor has expectations and is convinced that he has rights and claims to assert with 14 which the various attorneys and legal services he has consulted with do not agree. 15 The Order granting relief from the stay is a separate matter based on the evidence and law 16 submitted in support and opposition. All of the conclusions by Debtor that unidentified Injustice, 17 Misrepresentation, Fraud, and other improper conduct have occurred in other proceedings, 18 apparently most in state court, and that persons are purporting to be creditors by improperly 19 asserting that they have claims against Debtor, must be adjudicated in proceedings other than this 20 Motion for Relief From the Stay. 21 The Order granting the relief from stay is not an order allowing or disallowing a claim. It 22 merely allows the lessor to take the lease dispute and asserted right to possession to the appropriate 23 state court for an unlawful detainer action. Debtor’s citation to 11 U.S.C. § 502(j) and Federal Rule 24 of Bankruptcy Procedure 3008 are inapplicable to a motion for relief from the automatic stay. 25 Additionally, the Debtor has the right to not only oppose such relief, but also assert any 26 rights and claims for affirmative relief. Those disputes are well beyond the scope of a motion for 27 relief from the automatic stay. As stated by the Bankruptcy Appellate Panel, relief from stay 28 proceedings are summary proceedings that address issues arising only under 11 U.S.C. Section 1 362(d). Hamilton v. Hernandez (In re Hamilton), No. CC-04-1434-MaTK, 2005 Bankr. LEXIS 2 3427, at *8–9 (B.A.P. 9th Cir. Aug. 1, 2005) (citing Johnson v. Righetti (In re Johnson), 756 F.2d 3 738, 740 (9th Cir. 1985)). The court does not determine underlying issues of ownership, contractual 4 rights of Case Number: 2022-21528 Filed: 10/18/2022 Doc # 100 parties, or issue declaratory relief 5 as part of a motion for relief from the automatic stay in a Contested Matter (Federal Rule of 6 Bankruptcy Procedure 9014). 7 Debtor has not show grounds for vacating the Order granting relief from the automatic stay. 8 Additionally, as discussed in connection with the Request For Continuance of All Related 9 Proceedings, Debtor’s quest for “Zealous” and “Loyal” counsel has been going on for forty (40) 10 months now. It has spanned three bankruptcy cases. This is not a situation where a less 11 sophisticated debtor stumbles into a bankruptcy case pro se, and then falls victim to an overly 12 aggressive creditor who seeks relief from the stay shortly after the case is filed. Then before the less 13 sophisticated pro se debtor can understand the bankruptcy process, the need for representation, and 14 attempt to prosecute the bankruptcy case, the court “rubber stamps” an order for relief from the 15 automatic stay. 16 Here, Debtor demonstrates that he is sophisticated and has substantial investment assets - 17 stating that there are more than $3,300,000.00 in real property assets. On Schedule I, Debtor states 18 that he and his non-debtor spouse have gross monthly income of $11,551.00. Dckt. 19 at 28-29.2 19 On Schedule I, Debtor states that he is working to get a “Top Level Executive Job Position,” for 20 which his monthly income would be $12,000.00 to $20,000.00 a month. Debtor is not a simple, 21 minimum wage worker. He includes rental or business income on Schedule I. 22 No “any other reason that justifies relief” grounds exist. 23 Denial of Motion For Continuance of All Related Proceedings 24 Debtor fails to provide grounds For Continuance of All Related Proceedings. Debtor has 25 26 2 On Schedule I, Debtor does not list any deductions for income taxes. On Schedule J, Debtor 27 lists no expense for paying income taxes. Id. at 30-31. It is not clear how Debtor would not have Federal and State Income taxes on $138,623.00 of gross income. If none is owed, that may show an even greater 28 sophistication of Debtor. 1 effectively used forty-five (45) months; running from the April 20, 2019 filing of Debtor’s Second 2 Bankruptcy Case through the January 24, 2023 filing of the present Motion in the Current Fourth 3 Bankruptcy Case; of non-productive bankruptcy filings in which he has had the protection of the 4 automatic stay. For the last forty (40) months Debtor has stated that he is seeking the “Zealous” and 5 “Loyal” attorney to represent him in the bankruptcy cases and other litigation to address the 6 injustices done upon him. 7 After forty-five (45) months of bankruptcy proceedings, Debtor has not shown why a 8 Continuance of All Related Proceedings is proper. For whatever reason, Debtor cannot find counsel 9 that he wants to represent him. In the various cases filed by Debtor, his “plan” stated in his 10 proposed Chapter 13 Plans is to get real property sold in six months in the Third Bankruptcy Case, 11 or twelve (12) months in the Second and Current Fourth Bankruptcy Cases. However, nothing in 12 the Second, Third, or Current Fourth Bankruptcy Cases indicates that he has taken any action 13 required of a Chapter 13 debtor to try and get property sold. 14 Rather than seeking to properly prosecute a Chapter 13 case as required by the Bankruptcy 15 Code, it appears that Debtor believes that he has the right to stay all of his creditors (some of which 16 he disputes their claims) and not have to actively enforce his non-bankruptcy rights, with the 17 automatic stay providing Debtor with a never-ending injunction until he finds an attorney who will 18 do Debtor’s bidding. 19 Based on the lack of prosecution of the Debtor’s Current Fourth Bankruptcy Case, his Third 20 Bankruptcy Case filed in this District, and the Second Bankruptcy Case filed in the Northern 21 District, the court can see no good faith, bona fide basis for putting the Current Fourth Bankruptcy 22 Case and All Related Proceedings on hold. There is nothing to indicate that after any continuance 23 period would run, that the Debtor would not just be requesting yet a further continuance – as has 24 occurred through the past forty (40) months in the Second, Third, and Current Fourth Bankruptcy 25 Cases filed by Debtor. 26 The Motion For Continuance of All Related Proceedings is denied. 27 /// 28 /// 1 The court shall issue a separate order denying the Ex Parte Motion for Reconsideration and 2 || Ex Parte Motion For Continuance of All Related Proceedings. 3 Dated: February 02, 2023 By the Court 4 5 () AL) Ronald H. Sargis,Jhdgy 7 United’ States Bankruptcy Court 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17
1 Instructions to Clerk of Court 2 3 Service List - Not Part of Order/Judgment 4 The Clerk of Court is instructed to send the Order/Judgment or other court generated 5 document transmitted herewith to the parties below. The Clerk of Court will send the document via the BNC or, if checked ____, via the U.S. mail. 6 7 Debtor(s) / Plaintiff-Debtor(s) Attorney for the Debtor(s) / Plaintiff- Debtor(s) (if any) 8 9 Bankruptcy Trustee (if appointed in the Office of the U.S. Trustee 10 case) Robert T. Matsui United States Courthouse 501 I Street, Room 7-500 11 Sacramento, CA 95814 12 Attorney(s) for the Trustee (if any) All On Court’s Mailing List [Bankruptcy Case and Adversary Proceeding] 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28