Spear v. Schafler (In Re Schafler)

263 B.R. 296, 46 Collier Bankr. Cas. 2d 826, 2001 U.S. Dist. LEXIS 7987, 2001 WL 681533
CourtDistrict Court, N.D. California
DecidedJune 12, 2001
DocketC 01-0380 MMC, C 01-0535 MMC
StatusPublished
Cited by8 cases

This text of 263 B.R. 296 (Spear v. Schafler (In Re Schafler)) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spear v. Schafler (In Re Schafler), 263 B.R. 296, 46 Collier Bankr. Cas. 2d 826, 2001 U.S. Dist. LEXIS 7987, 2001 WL 681533 (N.D. Cal. 2001).

Opinion

ORDER DENYING DEBTOR’S MOTION TO DISMISS TRUSTEE’S APPEAL; AFFIRMING JUDGMENT OF BANKRUPTCY COURT

CHESNEY, District Judge.

Before the Court are two related bankruptcy appeals filed, respectively, by Pepi Schafler (“Debtor”) and by Richard J. Spear (“Trustee”). Debtor appeals the judgment entered on an order granting summary judgment in favor of Trustee, and Trustee appeals the order granting Debtor’s motion to extend time to file a notice of appeal from that judgment. Also before the Court is Debtor’s motion to dismiss Trustee’s appeal, and Debtor’s renewed motion for a stay pending appeal.

Having reviewed the briefs filed in connection with both appeals, as well as the papers submitted in support and in opposition to the motions, the Court deems all matters suitable for decision without oral argument. Accordingly, Debtor’s requests for oral argument are hereby DENIED, and the July 6, 2001 hearing on Debtor’s motion to dismiss Trustee’s appeal is hereby VACATED.

BACKGROUND

On March 26, 1996, Debtor filed a petition for relief pursuant to Chapter 7 of the Bankruptcy Code. (Appellant’s Record (“AR”) 9, Ex. I.) 1 Debtor attached to the petition Schedule B — Personal Property, and listed the following asset: “Trustee of trust, the beneficiaries of whom are debt- or’s adult children. Debtor interest: 1.00. Location: In debtor possession.” (AR 9, Ex. I, Sched. B at ¶ 19.) Debtor also attached to the petition a Statement of Financial Affairs, in which she stated that she had not transferred any property “within one year immediately preceding the commencement of this case.” (AR 19, Attachment of Evid. at 23.) In her petition, Debtor declared “under penalty of perjury that the information provided in [the] petition [was] true and correct.” (AR 9, Ex 1 at 2.) On July 5, 1996, the Bankruptcy Court entered a Discharge Order. (AR 9, Ex. M at 1.) A final decree was entered on July 9, 1996, and the case was closed. (Id.)

*299 On April 28, 1998, Trustee moved to reopen the case for the purposes of allowing Trustee to investigate and pursue recovery of potential bankruptcy estate assets which may have been undisclosed. (AR 9, Ex. L.) On May 7, 1998, the Bankruptcy Court granted the motion. (AR 9, Ex. M at 1.) On May 5, 1999, Trustee instituted an adversary proceeding by filing a complaint in the reopened bankruptcy case. (AR 1.) On November 3, 1999, Trustee filed a First Amended Complaint. (AR 2.) The First Amended Complaint sought, inter alia, a declaration that certain assets, specifically stock certificates and a condominium, held by the above-referenced trust (hereafter “Max Family Trust”) were the assets of the bankruptcy estate. (AR 2 at ¶¶ 8-14, Prayer for Relief at ¶ 1.) Trustee alleged that the Max Family Trust was a sham, that Debtor had transferred her assets for no consideration into the Max Family Trust before filing for bankruptcy, and that Debtor thereafter used the assets of the Max Family Trust as her own property. (AR 2 at ¶¶ 8, 10.)

On November 3, 2000, Debtor filed a motion for summary judgment. (AR 5.) Debtor argued, inter alia, that Trustee’s cause of action for declaratory relief lacked merit because the bankruptcy estate had irrevocably abandoned such assets to her when the bankruptcy case was closed in 1996. (AR 5 at 7-8.)

On December 4, 2000, Trustee filed opposition and a cross-motion for summary judgment. (AR 7, 8.) With respect to Trustee’s declaratory relief cause of action, Trustee argued that Debtor, in 1996, fraudulently concealed her interest in the stock certificates and condominium, and therefore such assets were never properly scheduled. (AR 7 at 19-21: AR 8 at 19.) Trustee argued that under such circumstances, no technical abandonment occurred, and the property remained the assets of the estate. (Id.)

At a hearing held December 18, 2000, the Bankruptcy Court made, inter alia, the following findings: (1) there was no genuine issue of material fact that the Max Family Trust “was nothing but a sham and a fraud on the Debtor’s creditors,” (AR 22 at 16:24-25) because the assets of the Max Family Trust were always treated by Debtor as her personal property; and (2) the assets were not “technically abandoned” to Debtor upon closure of the case because “Debtor failed to disclose in her schedules the true value of her interest in the trust which was one hundred percent of over five hundred thousand dollars in stock and a Florida condominium. Instead she listed her interest as being worth one dollar.” (AR 22 at 18:1-7.) The Bankruptcy Court granted summary judgment in favor of Trustee on the declaratory relief cause of action. (AR 22 at 18:22-24.)

On December 21, 2000, the Bankruptcy Court filed its Judgment After Cross-Motions for Summary Judgment (“Judgment”), whereby judgment was entered in favor of Trustee on Trustee’s claim for declaratory relief, and the following properties were declared the property of the bankruptcy estate: (1) all stocks and bonds held by Trustee that had been turned over to Trustee by Debtor; (2) all stocks and bonds owned by the Max Family Trust as of March 26, 1996, and the proceeds of such stocks and bonds; (3) a Florida condominium as more fully described in an exhibit to the Judgment; and (4) all other property held by Debtor in the name of the Max Family Trust as of March 26, 1996, and its proceeds. (AR 21.)

On January 16, 2001, Debtor filed a motion to extend time to file a notice of appeal pursuant to Rule 8002(c)(2). *300 (Trustee’s AR 4.) 2 On January 17, 2001, the Bankruptcy Court held a hearing to consider Debtor’s motion, at which time it granted the motion. (Trustee’s AR 12). The Bankruptcy Court also ordered counsel for Debtor to pay $1,000 to counsel for Trustee to compensate Trustee for its costs incurred in opposing the motion. (Trustee’s AR 12 at 18:2-9.) After the hearing, the Bankruptcy Court filed its Order Extending Time to File Notice of Appeal. (Trustee’s AR 10).

On January 17, 2001, Debtor filed a Notice of Appeal from the Judgment. On January 24, 2001, Trustee filed a Notice of Appeal from the Order Extending Time to File Notice of Appeal.

DISCUSSION

A. Trustee’s Appeal

1. Debtor’s Motion to Dismiss

Debtor argues that Trustee’s appeal should be dismissed on the ground that counsel for Trustee accepted from counsel for Debtor $1,000, which the Bankruptcy Court ordered to be paid as a sanction. Debtor contends that by accepting the $1,000 payment, Trustee “accepted the benefits of the order from which he appeals manifesting an intention to bring the matter to a definite conclusion.” (See Debtor’s Mot. to Dismiss at 1:23-24.)

“[W]hen a party accepts the benefits of a judgment under circumstances which indicate an intention to finally compromise and settle a disputed claim, an appeal may be foreclosed.” Hawaiian Paradise Park Corp. v. Friendly Broadcasting Co., 414 F.2d 750, 752 (9th Cir.1969). “In such a case, it is ...

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Bluebook (online)
263 B.R. 296, 46 Collier Bankr. Cas. 2d 826, 2001 U.S. Dist. LEXIS 7987, 2001 WL 681533, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spear-v-schafler-in-re-schafler-cand-2001.