EDWARD J. EMMONS, CLERK iar) □□ U.S. BANKRUPTCY COURT 2 □□□□ □ NORTHERN DISTRICT OF CALIFORNIA □□ □□□ is Lis □□ | 2 The following constitutes the order of the Court. Signed: March 30, 2020 3 4 LES Re SO oo 5 CharlesNovack = U.S. Bankruptcy Judge 6 7 UNITED STATES BANKRUPTCY COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 In re: Case No. 11-45982 CN 10 CYNTHIA CREWS, Chapter 13 11 Debtor. 12 E € 13|| CYNTHIAM. QUINTANILLA, Adversary No. 19-4027 CN
O 44 Plaintiff, MEMORANDUM DECISION AFTER TRIAL © I5] vs. 5 16 |} CARL M. CREWS,
17 Defendant. v 5 5 18 2 19 On February 12, 2020, this court conducted a trial in this adversary proceeding. All
20 || appearances were noted on the record. The following constitutes this court’s findings of fact and
21 || conclusions of law under Federal Rule of Bankruptcy Procedure 7052(a)(1). 22 Plaintiff Cynthia Quintanilla (“Quintanilla”) and defendant Carl. M. Crews (“Crews”) are e: 23 || spouses who divorced in 2010. While both parties were represented by counsel during the early 24 || stages of the dissolution action (which Quintanilla filed in February 2008), they apparently were pre 25 || se parties on December 14, 2010 when the Alameda County Superior Court entered their Dissolutic 26 || Judgment. The parties’ dissolution action (the “Dissolution Action”) contained the usual twists anc 27 || turns. Quintanilla’s gross monthly income ($6,131.00) was greater than Crews’ monthly income 28 || ($2,050.00), and the Alameda County Superior Court (by order dated February 9, 2010) awarded hi
MEMORANDUM OF DECISION AFTER TRIAL
1 temporary monthly spousal support of $416. The parties had two minor children and Quintanilla 2 was awarded full physical custody and child support. The parties asserted community property 3 interests in four properties: the marital residence (3440 Oak Knoll Boulevard, Oakland), rental 4 properties at 6325 MacArthur Boulevard, Oakland, and 852 Dolores Street, San Leandro, and 5 property located at 221 Virginia Street in Hayward where Quintanilla operated an adult care 6 boarding facility. Crews owned Oak Knoll as his separate property before the parties married, and 7 he conveyed fee title to Quintanilla in 2002 to help smooth over certain marital indiscretions. 8 During the Dissolution Action, the parties may have disputed the characterization of these properties 9 and the family businesses, and one of Crews’ attorneys asserted that Crews was entitled to a “right of 10 reimbursement” for Oak Knoll. While these (and other issues) were raised in the Dissolution Action, 11 there is no evidence indicating that the Superior Court formally addressed them. Instead, the parties 12 voluntarily divided their real and personal property assets and resolved their child and spousal 13 support obligations via a consensual Dissolution Judgment. The Dissolution Judgment (Exhibit 1) is 14 a 17 page Judicial Council of California form completed by the parties. In pertinent part, the 15 Dissolution Judgment (see paragraph 1 of the “Property Order Attachment to Judgment”) awarded to 16 Quintanilla fee title to all of the real properties along with the furniture in those properties, certain 17 vacation timeshares, the family businesses, including their inventory and assets, and her jewelry and 18 the vehicles in her possession. This award was “subject to an equalizing, non-taxable payment as 19 stated herein below.” Crews received the furniture and jewelry in his possession, a 1973 Porsche, 20 and 1998 Mercedes Benz. 21 Paragraph 3 of the Property Order Attachment addressed the equalization payment referenced 22 in paragraph 1. Paragraph 3 states that Quintanilla shall pay Crews “108,000.00 payable as follows: 23 nontaxable payment of $3000 per month, commencing August 1, 2010 over 36 months.” The 24 Dissolution Judgment also contained a “Spousal, Partner Or Family Support Order Attachment” in 25 which both parties waived spousal support. Paragraph 10 of this Attachment states that “Spousal 26 support has been waived by both parties in final settlement of all issues. [Crews] receives a 27 disproportionate share of property buy out in lieu of spousal support.” The parties signed a 28 stipulation acknowledging that they agreed to the Dissolution Judgment’s terms and requested that 1 The Superior Court enter it, which it did. 2 During trial, neither Crews nor Quintanilla coherently explained how they determined the 3 amount and duration of the equalization payments. Quintanilla testified that Crews proposed this 4 amount to her attorney and that it may have reflected the marital community’s equity interest in the 5 Oak Knoll property, which equity (via cash-out refinances) was apparently used to renovate that 6 property and help purchase some of the other real properties. Quintanilla stated, however, that she 7 knew little about the value of the Oak Knoll property, and this court concludes that her entire 8 testimony on this issue is conjecture.1 Crews’ testimony was equally unenlightening. He stated that 9 Quintanilla’s attorney presented him with the terms, which he believed were derived in part from the 10 Disso Master program.2 While he acknowledged that he waived spousal support, he stated that he 11 did so because he believed that Quintanilla would live up to her end of the bargain (i.e., make the 12 $3,000 monthly payments). In other words, Crews was more than willing to accept these payments, 13 which would have more than doubled his monthly income, regardless of their character. Both Crews 14 and Quintanilla were unaware how a bankruptcy filing could affect Crews’ right to collect these 15 payments. 16 The documentary evidence also does not explain these terms. Neither the Dissolution Action 17 pleadings introduced into evidence nor the bankruptcy schedules filed in this court reveal any equity 18 in the real properties, and the total value of the remaining community property (as listed by 19 Quintanilla in her soon to be filed Chapter 13 and as testified to by Crews) was far less than 20 $108,000.3 Nor could Quintanilla afford these monthly payments, since her net income was 21 $4,713.00 (as listed in the Spousal Support Order Attachment).4 Quintanilla made only one 22 23 1 Given the amount of the equalization payments and the significant financial stress they imposed on her, Quintanilla’s inability to explain their calculation is surprising. 24 2 Quintanilla’s family law attorney did not testify at trial. 25 3 Quintanilla’s most significant asset was her ACERA retirement account, which was her 26 separate property. 27 4 Her soon to be filed Chapter 13 listed substantially different gross income and expense 28 amounts, but with the same result: little excess income to make such a large monthly payment to 1 $3,000/month payment to Crews. 2 Quintanilla filed a Chapter 13 bankruptcy in August 2011. She listed her debt to Crews on 3 her Bankruptcy Schedule F as a dischargeable obligation representing the “Amount ... awarded ex- 4 husband Carl Crews to equalize the community property based [on] the marital settlement between 5 Debtor and ex-husband (stipulated judgment).” Her Chapter 13 plan proposed monthly payments of 6 $300, and did not treat the equalization payments as a non-dischargeable debt. Crews timely filed a 7 proof of claim which asserted that the equalization payments constituted a priority, non- 8 dischargeable domestic support obligation as defined by Bankruptcy Code § 101(14A). Quintanilla 9 objected to his proof of claim, and the parties ultimately stipulated to return to Alameda County 10 Superior Court to resolve this issue (the “Stipulation”). The Stipulation’s recitals and terms are 11 illuminating. The Stipulation, which the parties executed in early March 2012, provides in pertinent 12 part: 13 “Creditor filed on July 7, 2011, a claim (Claim No.
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EDWARD J. EMMONS, CLERK iar) □□ U.S. BANKRUPTCY COURT 2 □□□□ □ NORTHERN DISTRICT OF CALIFORNIA □□ □□□ is Lis □□ | 2 The following constitutes the order of the Court. Signed: March 30, 2020 3 4 LES Re SO oo 5 CharlesNovack = U.S. Bankruptcy Judge 6 7 UNITED STATES BANKRUPTCY COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 In re: Case No. 11-45982 CN 10 CYNTHIA CREWS, Chapter 13 11 Debtor. 12 E € 13|| CYNTHIAM. QUINTANILLA, Adversary No. 19-4027 CN
O 44 Plaintiff, MEMORANDUM DECISION AFTER TRIAL © I5] vs. 5 16 |} CARL M. CREWS,
17 Defendant. v 5 5 18 2 19 On February 12, 2020, this court conducted a trial in this adversary proceeding. All
20 || appearances were noted on the record. The following constitutes this court’s findings of fact and
21 || conclusions of law under Federal Rule of Bankruptcy Procedure 7052(a)(1). 22 Plaintiff Cynthia Quintanilla (“Quintanilla”) and defendant Carl. M. Crews (“Crews”) are e: 23 || spouses who divorced in 2010. While both parties were represented by counsel during the early 24 || stages of the dissolution action (which Quintanilla filed in February 2008), they apparently were pre 25 || se parties on December 14, 2010 when the Alameda County Superior Court entered their Dissolutic 26 || Judgment. The parties’ dissolution action (the “Dissolution Action”) contained the usual twists anc 27 || turns. Quintanilla’s gross monthly income ($6,131.00) was greater than Crews’ monthly income 28 || ($2,050.00), and the Alameda County Superior Court (by order dated February 9, 2010) awarded hi
MEMORANDUM OF DECISION AFTER TRIAL
1 temporary monthly spousal support of $416. The parties had two minor children and Quintanilla 2 was awarded full physical custody and child support. The parties asserted community property 3 interests in four properties: the marital residence (3440 Oak Knoll Boulevard, Oakland), rental 4 properties at 6325 MacArthur Boulevard, Oakland, and 852 Dolores Street, San Leandro, and 5 property located at 221 Virginia Street in Hayward where Quintanilla operated an adult care 6 boarding facility. Crews owned Oak Knoll as his separate property before the parties married, and 7 he conveyed fee title to Quintanilla in 2002 to help smooth over certain marital indiscretions. 8 During the Dissolution Action, the parties may have disputed the characterization of these properties 9 and the family businesses, and one of Crews’ attorneys asserted that Crews was entitled to a “right of 10 reimbursement” for Oak Knoll. While these (and other issues) were raised in the Dissolution Action, 11 there is no evidence indicating that the Superior Court formally addressed them. Instead, the parties 12 voluntarily divided their real and personal property assets and resolved their child and spousal 13 support obligations via a consensual Dissolution Judgment. The Dissolution Judgment (Exhibit 1) is 14 a 17 page Judicial Council of California form completed by the parties. In pertinent part, the 15 Dissolution Judgment (see paragraph 1 of the “Property Order Attachment to Judgment”) awarded to 16 Quintanilla fee title to all of the real properties along with the furniture in those properties, certain 17 vacation timeshares, the family businesses, including their inventory and assets, and her jewelry and 18 the vehicles in her possession. This award was “subject to an equalizing, non-taxable payment as 19 stated herein below.” Crews received the furniture and jewelry in his possession, a 1973 Porsche, 20 and 1998 Mercedes Benz. 21 Paragraph 3 of the Property Order Attachment addressed the equalization payment referenced 22 in paragraph 1. Paragraph 3 states that Quintanilla shall pay Crews “108,000.00 payable as follows: 23 nontaxable payment of $3000 per month, commencing August 1, 2010 over 36 months.” The 24 Dissolution Judgment also contained a “Spousal, Partner Or Family Support Order Attachment” in 25 which both parties waived spousal support. Paragraph 10 of this Attachment states that “Spousal 26 support has been waived by both parties in final settlement of all issues. [Crews] receives a 27 disproportionate share of property buy out in lieu of spousal support.” The parties signed a 28 stipulation acknowledging that they agreed to the Dissolution Judgment’s terms and requested that 1 The Superior Court enter it, which it did. 2 During trial, neither Crews nor Quintanilla coherently explained how they determined the 3 amount and duration of the equalization payments. Quintanilla testified that Crews proposed this 4 amount to her attorney and that it may have reflected the marital community’s equity interest in the 5 Oak Knoll property, which equity (via cash-out refinances) was apparently used to renovate that 6 property and help purchase some of the other real properties. Quintanilla stated, however, that she 7 knew little about the value of the Oak Knoll property, and this court concludes that her entire 8 testimony on this issue is conjecture.1 Crews’ testimony was equally unenlightening. He stated that 9 Quintanilla’s attorney presented him with the terms, which he believed were derived in part from the 10 Disso Master program.2 While he acknowledged that he waived spousal support, he stated that he 11 did so because he believed that Quintanilla would live up to her end of the bargain (i.e., make the 12 $3,000 monthly payments). In other words, Crews was more than willing to accept these payments, 13 which would have more than doubled his monthly income, regardless of their character. Both Crews 14 and Quintanilla were unaware how a bankruptcy filing could affect Crews’ right to collect these 15 payments. 16 The documentary evidence also does not explain these terms. Neither the Dissolution Action 17 pleadings introduced into evidence nor the bankruptcy schedules filed in this court reveal any equity 18 in the real properties, and the total value of the remaining community property (as listed by 19 Quintanilla in her soon to be filed Chapter 13 and as testified to by Crews) was far less than 20 $108,000.3 Nor could Quintanilla afford these monthly payments, since her net income was 21 $4,713.00 (as listed in the Spousal Support Order Attachment).4 Quintanilla made only one 22 23 1 Given the amount of the equalization payments and the significant financial stress they imposed on her, Quintanilla’s inability to explain their calculation is surprising. 24 2 Quintanilla’s family law attorney did not testify at trial. 25 3 Quintanilla’s most significant asset was her ACERA retirement account, which was her 26 separate property. 27 4 Her soon to be filed Chapter 13 listed substantially different gross income and expense 28 amounts, but with the same result: little excess income to make such a large monthly payment to 1 $3,000/month payment to Crews. 2 Quintanilla filed a Chapter 13 bankruptcy in August 2011. She listed her debt to Crews on 3 her Bankruptcy Schedule F as a dischargeable obligation representing the “Amount ... awarded ex- 4 husband Carl Crews to equalize the community property based [on] the marital settlement between 5 Debtor and ex-husband (stipulated judgment).” Her Chapter 13 plan proposed monthly payments of 6 $300, and did not treat the equalization payments as a non-dischargeable debt. Crews timely filed a 7 proof of claim which asserted that the equalization payments constituted a priority, non- 8 dischargeable domestic support obligation as defined by Bankruptcy Code § 101(14A). Quintanilla 9 objected to his proof of claim, and the parties ultimately stipulated to return to Alameda County 10 Superior Court to resolve this issue (the “Stipulation”). The Stipulation’s recitals and terms are 11 illuminating. The Stipulation, which the parties executed in early March 2012, provides in pertinent 12 part: 13 “Creditor filed on July 7, 2011, a claim (Claim No. 7) in Debtor’s Chapter 13 bankruptcy case alleging that Debtor owes him $108,000, and alleges therein 14 that the claim is entitled to priority as a domestic support obligation. Debtor objected to Claim 7 alleging that the amount allegedly owed by Debtor to 15 Creditor is a community property distribution award not entitled to priority and dischargeable in Debtor’s Chapter 13 case. Creditor admits that he waived 16 spousal support as part of the stipulations made before entry of the Judgment of Dissolution, but alleges that such a waiver was based on a mistake of fact 17 and law and that the entire amount awarded him in the Judgment of Dissolution for community property distribution is actually “in the nature of support” and 18 that he is entitled to claim the $108,000 allegedly owed by Debtor as a domestic support obligation. The parties agree the issue of whether all, part or 19 none of the community property distribution is “in the nature of support” or “in lieu of support” as well as related issues are best determined by the Superior 20 Court of California, County of Alameda, where the Judgment of Dissolution was entered due to the expertise of the Family Law Court in such matters. 21 THE PARTIES TO THIS STIPULATION HEREBY STIPULATE AND 22 AGREE AS FOLLOWS: 23 1. Debtor and Creditor agree to request that the Superior Court of California, County of Alameda (“Family Law Court”), set aside the 24 Judgment of Dissolution entered in Case No. RF08370376 on December 10, 2010, on the basis of mutual mistake of fact and law by 25 the parties, except for the entry of the dissolution of the marriage and custody of the minor children of the marriage. Creditor will file the 26 motion to set aside Judgment of Dissolution within 21 days from the 27 28 Crews. There was no testimony regarding the accuracy of Quintanilla’s Schedules I and J. 1 date the Stipulation is approved by the Bankruptcy Court. 2 2. Debtor will pay Creditor $450 per month as temporary spousal support for six months on or before the 15th day of each calendar month, 3 commencing March 15, 2012. 4 3. The parties agree that the waiver of spousal support by Creditor may be set aside by the Family Law Court because of mutual mistake of fact 5 and law by the parties. 6 4. Any award of spousal and/or child support shall be from January 1, 2011 and Debtor shall be entitled to credit for any payments to Creditor 7 on or after January 1, 2011, including the temporary spousal support mentioned in paragraph 2 hereinabove. The date to determine the value 8 of the community property for distribution between the parties shall be January 1, 2011. The current income of the parties shall be used to 9 determine any support to be awarded. 10 5. The Family Law Court shall determine spousal support, child support and community property distribution due on and after January 1, 2011, 11 if any. 12 9. In the event the Family Law Court denies the motion to set aside the Judgment of Dissolution, this Stipulation shall be null and void and 13 objection filed by Debtor to Creditor’s Claim No. 7 shall be immediately set for trial again in the Bankruptcy Court. 14 10. Debtor stipulates that approval of this Stipulation by the Bankruptcy 15 Court may include relief from the automatic stay for the purpose of setting aside the Judgment of Dissolution and proceeding to have the 16 Family Law Court determine the issues of support and distribution of the community property of the marriage. 17 11. Within 10 days of entry of an order by the Family Law Court setting 18 aside the Judgment of Dissolution, Creditor shall withdraw Claim 7 and the Objection to the Confirmation of the Plan filed by Creditor. 19 12. Each party shall bear their own attorneys’ fees and costs incurred 20 related to this Stipulation, except as may be awarded to one of the parties hereto by the Bankruptcy Court in case of a breach of this 21 Stipulation.” 22 While Crews did file a motion to modify the Dissolution Judgment in Superior Court, 23 nothing became of it. The motion was continued several times and eventually was dropped by the 24 Superior Court on January 22, 2013 when neither party attended a continued hearing. Moreover, 25 Crews ignored paragraph 11 of the Stipulation and withdrew his proof of claim (and his objection to 26 plan confirmation) on June 19, 2012, resulting in the confirmation of Quintanilla’s second amended 27 28 1 Chapter 13 plan by order dated July 2, 2012.5 Quintanilla proceeded to make her plan payments and, 2 on May 15, 2014, filed her “Debtor’s Certification in Support of Discharge” (the “Certification”) in 3 which she averred that she had not “been required to pay a domestic support obligation as that term 4 is defined in 11 U.S.C. § 101(14A) by any order of a court or administrative agency or by any 5 statute.” The Certification was served on all creditors and provided them with a 21 day “scream or 6 die” notice to object to it. No one objected, and this court entered Quintanilla’s Chapter 13 7 discharge on June 10, 2014. Crews was listed on the BNC service list for the Certification at three 8 addresses: The Oak Knoll property (where he did not reside), P.O. Box 2116 in Castro Valley, and 9 the office address of his one-time and present counsel, Damian Rickert.6 10 In May 2018, Crews renewed his efforts to collect his equalization payments by filing a 11 motion in Alameda County Superior Court to compel Quintanilla to pay him the remaining $105,000 12 due under the Dissolution Judgment. In his declaration in support of the motion, Crews states that 13 he “is only seeking his interest of [sic] property received in the dissolving of the party’s marriage 14 several years ago.” After several hearings, the Superior Court (by minute order entered on 15 November 26, 2018) requested that this court determine whether the equalization payments 16 constituted a domestic support obligation.7 17 Quintanilla filed this adversary proceeding on May 15, 2019 seeking declaratory relief that 18 Crews is barred from collecting the equalization payments. She contends that 1) she discharged her 19 equalization payment obligation; 2) Crews’ attempt to litigate this issue is barred by the doctrine of 20 issue preclusion; and 3) the doctrine of laches further bars Crews from collecting this debt. 21 I. Quintanilla Has Discharged the Equalization Payments 22 Put simply, the Bankruptcy Code divides family law payment obligations into two categories: 23 24 5 The court takes judicial notice of Crews’ withdrawal of his proof of claim and the order confirming the second amended Chapter 13 plan. See Federal Rule of Evidence 1001. 25 6 Rickert was also served by email under this court’s ECF protocol. 26 27 7 The court takes judicial notice of the Alameda County Superior Court minute order, which is an exhibit to the Motion to Reopen Case and Request Ruling on $108,000 Property Equalization 28 on Claim 7 filed by Quintanilla (Docket Entry #113). 1 those that are domestic support obligations (“DSO”) under Bankruptcy Code § 101(14A) which are 2 non-dischargeable in Chapter 7 and 13 cases; and those that are not DSOs, which, while non- 3 dischargeable in Chapter 7s, are dischargeable in Chapter 13 cases. See Bankruptcy Code 4 §§ 101(14A), 523(a)(5), 523(a)(15), 1328(a)(2). Crews has the burden of demonstrating by a 5 preponderance of the evidence that the equalization payment obligation was a DSO. See Maudsley v. 6 Maudsley (In re Maudsley), 2006 Bankr.LEXIS 4833, at *24-25 (B.A.P. 9th Cir. Jan. 20, 2006). 7 Crews has not met this burden. 8 The term “Domestic Support Obligation” is defined in Bankruptcy Code § 101(14A): 9 “The term ‘domestic support obligation’ means a debt that accrues before, on, or after the date of the order for relief in a case under this title, including interest that accrues on 10 that debt as provided under applicable nonbankruptcy law notwithstanding any other provision of this title, that is - 11 (A) owed to or recoverable by - 12 (I) a spouse, former spouse, or child of the debtor or such child’s parent, 13 legal guardian, or responsible relative; or 14 (ii) a governmental unit; 15 (B) in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor 16 or such or such child’s parent, without regard to whether such debt is expressly so designated; 17 (C) established or subject to establishment before, on , or after the date of the 18 order for relief in a case under this title, by reason of applicable provisions of - 19 (I) a separation agreement, divorce decree, or property settlement agreement; 20 (ii) an order of a court of record; or 21 (iii) a determination made in accordance with applicable nonbankruptcy 22 law by a governmental unit; and 23 (D) not assigned to a nongovernmental entity, unless that obligation is assigned voluntarily by the spouse, former spouse, child of the debtor, or such child’s parent, legal 24 guardian, or responsible relative for the purpose of collecting the debtor.” 25 The element at issue herein is whether the equalization payments were in the nature of 26 spousal support. This question is a matter of bankruptcy law, and the intent of the parties when the 27 settlement agreement (here, a consensual Dissolution Judgment) is executed is dispositive. See In re 28 1 Sternberg, 85 F.3d 1400 (9th Cir. 1996); overruled on other grounds by In re Bammer, 131 F.3d 788 2 (9th Cir. 1997). Bankruptcy courts frequently consider several factors when determining intent, 3 including: 4 1) Whether the recipient spouse actually needed spousal support at the time of the divorce; 5 2) Whether there was an imbalance in the relative income of the parties; 6 3) The amount and outcome of any property division; 7 4) Whether the obligation terminates on the payee’s death or remarriage; 8 5) The number and frequency of payments; 9 6) Whether the agreement contained a spousal support waiver; 10 7) Whether the parties could modify the obligation or enforce it through contempt 11 proceedings; 12 8) The tax treatment of the obligation; and 13 9) Whether the parties labeled the payments. 14 Sternberg, supra at 1405. 15 Crews has not persuaded this court that the equalization payments were in the nature of 16 spousal support. While Crews certainly needed to supplement his disability payments in some 17 fashion, his temporary support payments were only $416/month. Given this, no one credibly 18 explained how the $3,000 amount and the payments’ duration were determined. At $416/month, the 19 $108,000 amount represented more than 20 years of payments without any present value calculation 20 to reflect a compressed three year payout. Given that 1) Quintanilla’s Disso Master net income was 21 not significantly greater than Crews’ (tax free) disability payments, and 2) her personal expenses 22 exceeded his, there was no evidence justifying such large support payments. Moreover, these 23 payments were tax-free and did not terminate upon his death or remarriage, Crews explicitly waived 24 spousal support (after having received temporary support during the latter portion of the Dissolution 25 Action), and the parties labeled these payments as equalization payments. While Crews was happy 26 to accept these terms, it is his burden to demonstrate that they were in the nature of support. He has 27 28 1 not.8 2 II. QUINTANILLA’S AFFIRMATIVE DEFENSES 3 While this court’s dischargeability determination moots Quintanilla’s laches and issue 4 preclusion arguments, the court addresses them to complete the record. Both affirmative defenses 5 are rejected. Laches requires Quintanilla to demonstrate by a preponderance that Crews did not 6 diligently pursue his DSO argument and that she was prejudiced by the delay. Kansas v. Colorado, 7 514 U.S. 673, 687, 115 S. Ct. 1733, 1742 (1995). Notwithstanding Crews’ failure to pursue to 8 conclusion his motion to modify the Dissolution Judgment, Quintanilla has not demonstrated that 9 she was prejudiced by the delay. Quintanilla contends that Crew’s inaction impeded her ability to 10 present evidence necessary to defeat his claim. The court disagrees. Crews timely filed his proof of 11 claim in her Chapter 13, and Quintanilla promptly objected to his characterization of the equalization 12 payments. The Stipulation was executed in March 2012, and the parties were soon thereafter 13 litigating the merits of Crews’ motion to modify in Alameda County Superior Court. Quintanilla, 14 who was represented by counsel in her Chapter 13, had the opportunity and incentive to investigate 15 his claim and preserve the fruits of her investigation when the relevant events were still fresh in her 16 mind. No evidence indicated that she did so. 17 Quintanilla also contends that her inability to modify the equalization payment obligation 18 (should it be a DSO) constitutes actionable prejudice. California Family Code § 3651(1) states in 19 pertinent part that “a support order may not be modified or terminated as to an amount that accrued 20 before the date of the filing of the notice of motion or order to show cause to modify or terminate.9” 21 See also In re Marriage of Murray (2002) 101 Cal.App.4th 581, 595 [124 Cal.Rptr.2d 342]. Since 22 the equalization payments were all due by August 2013, Quintanilla cannot modify this obligation. 23 Quintanilla’s argument is unavailing. Crews promptly filed his proof of claim, Quintanilla 24 objected to it, and she could have addressed this deadline by including appropriate language in the 25 26 8 The paucity of evidence also leaves this court ill-equipped to determine whether some 27 portion of the $3,000/month payment falls within the DSO ambit. 28 9 See also Cal.Family Code §§ 3653, 3651, 3603. 1 Stipulation or by filing a protective motion in Superior Court to hedge her bets on dischargeability. 2 In this instance, it was Quintanilla who sat on her rights. 3 The court also rejects the issue preclusion affirmative defense.10 Issue preclusion bars the re- 4 litigation of an issue decided in an earlier judicial or administrative proceeding, provided that the 5 losing party had a full and fair opportunity to litigate the issue in the prior proceeding. See, e.g., 6 Allen v. McCurry, 449 U.S. 90, 96, 101 S. Ct. 411, 66 L. Ed. 2d 308, (1980); Mermelstein v. Elder 7 (In re Elder), 262 B.R. 799, 806 (C.D. Cal. 2001). Federal courts generally treat the preclusive 8 effects of federal judgments or orders as a matter of federal law. In re Zaharescu, 2013 U.S. Dist. 9 LEXIS 99423, 2013 WL 3762285, at *2 (C.D. Cal. July 11, 2013). 10 Quintanilla argues that the entry of her Chapter 13 discharge bars Crews from contesting the 11 dischargeability of the equalization payments. She contends that her Certification put Crews on 12 notice of her assertion that she “ha[d] not been required to pay a domestic support obligation,” and 13 Crews’ failure to object to it bars him from litigating this issue. 14 The federal doctrine of issue preclusion contains four elements: 1) The issue sought to be 15 precluded must be the same as that involved in the prior action; 2) The issue must have been litigated 16 in the prior action; 3) The issue must have been determined by a valid and final judgment; and 4) 17 The determination must have been essential to the final judgment. Genel Co. v. Bowen (In re 18 Bowen), 198 B.R. 551, 555 (B.A.P. 9th Cir. 1996). Quintanilla bears the burden of demonstrating 19 each of these elements by a preponderance of the evidence. To demonstrate that her DSO contention 20 was “actually litigated,” Quintanilla must prove that Crews had the opportunity to litigate the merits 21 of this issue and chose not to do so. FDIC v. Daily (In re Daily), 47 F.3d 365, 368 (9th Cir. 1995). 22 Quintanilla falls short here, because she has not established that she served the Certification on 23 Crews. Absent this, Crews did not have the opportunity to dispute her allegation that she had no 24 DSO liability. 25 The Certification was sent to Crews at three addresses: the Oak Knoll address, a Castro 26 27 10 Issue preclusion is an affirmative defense and the party asserting preclusion has the burden of proof. See Federal Rule of Bankruptcy Procedure 7008; see also In re Naemi 128 B.R. 273, 28 277(Bankr.S.D.Cal. 1991). 1 Valley P.O. Box, and Rickert’s law office address. Quintanilla has not demonstrated that this service 2 was reasonably calculated, under all of the circumstances, to notify Crews of his right to object to the 3 Certification. Crews was not residing at the Oak Knoll property in May 2014, and Quintanilla has 4 not demonstrated that Crews was using the P.O. Box at that time. Nor has Quintanilla proven that 5 service on Rickert was sufficient. Federal Rule of Bankruptcy Procedure 7004 authorized 6 Quintanilla to serve Crews under the applicable laws of the State of California. Service on a 7 person’s attorney may constitute good service under Cal Civ. Proc., § 416.90. “The question is 8 whether service can be upheld on the theory that a close connection between the agent and the party 9 made it highly probable the party would receive actual notice of the service of process on the agent 10 on his or her behalf.” Estate of Moss (2012) 204 Cal.App.4th 521, 522 [139 Cal.Rptr.3d 94]. 11 Quintanilla has no demonstrated that Rickert was such an agent for Crews in May 2014. Crews 12 retained Rickert in 2011 to object to plan confirmation, file his proof of claim, and litigate its 13 allowance. Rickert withdrew the proof of claim on June 19, 2012 and Quintanilla’s Chapter 13 plan 14 was confirmed days later. While Rickert represented Crews in Alameda County Superior Court after 15 the parties returned there (post-Stipulation) in 2012, Crews’ motion to modify the Dissolution 16 Judgment was dropped from the Superior Court’s calendar by minute order dated January 22, 2013 17 due to all parties’ non-appearance. When Crews resurrected his Superior Court motion to modify in 18 2018, he did so pro se. “An attorney’s representation of a client ordinarily ends when the client 19 discharges the attorney or consents to a withdrawal, the court consents to the attorney’s withdrawal, 20 or upon completion of the tasks for which the client retained the attorney.” GoTek Energy, Inc. v. 21 SoCal IP Law Group, LLP (2016) 3 Cal.App.5th 1240, 1246. While Rickert obviously represents 22 Crews in this adversary proceeding, Quintanilla has not adequately demonstrated that their attorney- 23 client relationship continued uninterrupted after the Superior Court dropped the motion to modify 24 from its calendar in January 2013. Given Crews’ limited income, this court can just as easily 25 conclude that he discharged Rickert at or around that time because he could not pay his fees. 26 The court’s analysis of Rickert’s duties under the Rules of Professional Conduct is also 27 unavailing. An attorney owes limited duties to a former client, and keeping the former client 28 apprised of the status of ongoing litigation does not appear to be one of them. Compare Rules 1.4 1 and 1.9 of the California Rules of Professional Conduct. 2 Accordingly, Quintanilla has not demonstrated that service on Rickert “made it highly 3 probable” that Crews would receive actual notice of the Certification. 4 Quintanilla shall submit an appropriate Order consistent with this memorandum decision. 5 * * * END OF ORDER * * * 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 COURT SERVICE LIST 2 3 Recipients are ECF participants 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28