In re: Raj Singh, 9th Cir. BAP (2013)

7/25/2019 In re: Raj Singh, 9th Cir. BAP (2013)

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2 Unl ess ot her wi se i ndi cat ed, al l chapt er and sect i onr ef er ences ar e t o t he Bankrupt cy Code, 11 U. S. C. 101- 1532, andal l r ul e r ef er ences ar e t o t he Feder al Rul es of Bankrupt cyPr ocedur e, Rul es 1001- 9037. The Feder al Rul es of Ci vi l Pr ocedur ear e r ef er r ed t o as Ci vi l Rul es.

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Bef ore: DUNN, J URY and MARKELL, Bankr upt cy J udges.

Af t er debt or Raj Si ngh ( Mr . Si ngh) deni ed an i nt er est i n a

2009 t ax r ef und check ( Tax Ref und) i ssued i n hi s name by t he St at

of Cal i f or ni a Fr anchi se Tax Boar d ( Tax Boar d) , t he chapt er 132

t r ust ee (Tr ust ee) f i l ed an i nt er pl eader act i on ( I nt er pl eader

Act i on) t o determi ne who among other cl ai mant s was ent i t l ed t o t he

pr oceeds ( Pr oceeds) of t he Tax Ref und. Mr . Si ngh f i l ed an answer

denyi ng he had any i nt er est i n t he Proceeds, but asser t i ng t hat t he

Proceeds bel onged t o hi s f or mer spouse, Kar en Si ngh ( Ms. Si ngh) .Ms. Si ngh f ai l ed t o f i l e an answer , and def aul t was ent er ed agai nst

her . The bankrupt cy cour t r ul ed t hat Mr . Si ngh had no st andi ng t o

asser t Ms. Si ngh s cl ai m and deni ed hi s mot i on t o vacat e t he def aul

ent er ed agai nst Ms. Si ngh. I n l i ght of Mr . Si ngh s answer denyi ng

any i nt er est i n t he Proceeds, t he bankrupt cy cour t appr oved a

set t l ement bet ween the remai ni ng par t i es who di d cl ai m an i nt er est

i n t he Proceeds and ent ered j udgment ( J udgment ) awardi ng t he

Proceeds as st at ed i n t he set t l ement . Mr . Si ngh appeal ed t he

J udgment . We AFFI RM.

I . FACTS

A. Pr i or Appeal s.

Mr . Si ngh i s no st r anger t o t hi s Panel . Over t he past t hr ee

year s he has f i l ed t he f ol l owi ng appeal s:


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BAP No. EC- 10- 1116 - Raj Si ngh v. Lawr ence Lohei t , et al .

Mr . Si ngh f i l ed t hi s appeal Apr i l 15, 2010 i n a pr i or

bankrupt cy case. The appeal was f r omt he di smi ssal of t he case on

t he t r ust ee s mot i on f or unr easonabl e del ay pr ej udi ci al t o

credi t or s. The appeal i t sel f was di smi ssed af t er Mr . Si ngh f ai l ed

t o f i l e hi s openi ng br i ef . Mr . Si ngh s mot i on t o r eopen t he appeal

was deni ed by t he mot i ons panel upon a f i ndi ng that Mr . Si ngh had

not pr ovi ded any good r eason why the br i ef was not f i l ed ear l i er o

why t hi s appeal shoul d be rei nst at ed. BAP No. EC- 10- 1290 - Raj Si ngh v. Lawr ence Lohei t , et al .

Mr . Si ngh f i l ed a decl ar at or y j udgment act i on agai nst Kar en

Si ngh ( hi s ex- wi f e) seeki ng a decl ar at i on t hat he was not Kaus Si ng

or Suman Meht a. The bankr upt cy cour t hel d an evi dent i ary hear i ng o

Mr . Si ngh s mot i on f or def aul t j udgment and deni ed al l r el i ef

sought . Mr . Si ngh f i l ed hi s Not i ce of Appeal on August 5, 2010.

Pr i or t o t he November 2011 ar gument , t he mer i t s panel i ssued an

or der : Thi s appeal i s set f or or al ar gument on November 16, 2011 i

Sacrament o, Cal i f or ni a. Wi t hout a t r anscr i pt of [ t he evi dent i ar y]

hear i ng, i t does not appear t hat t he Panel wi l l be abl e t o consi der

whether t he bankr upt cy cour t err ed i n ent er i ng t he j udgment on

appeal . Accor di ngl y, appel l ant shal l have unt i l Fr i day, November 4

2011 t o f i l e a copy of t he J ul y 13, 2010 t r anscr i pt wi t h t he BAP

Cl er k' s Of f i ce. Mr . Si ngh r esponded t hat no t r anscr i pt was

necessary. He appear ed at argument . The Panel i ssued a deci si on o

t he mer i t s vi a a memorandum di smi ss i ng the appeal based on a

def i ci ent r ecor d. Mr . Si ngh appeal ed t o t he 9t h Ci r cui t , whi ch


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3 Thi s appeal act ual l y was f i l ed subsequent t o t he cur r entappeal .

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deni ed hi s r equest t o pr oceed i n f orma pauper i s. When Mr . Si ngh

f ai l ed t o meet t he deadl i ne t o pay t he f i l i ng f ee, t he ci r cui t

di smi ssed hi s appeal .

BAP No. EC- 10- 1471 - Raj Si ngh v. Lawr ence Lohei t , et al .

On November 30, 2010, Mr . Si ngh f i l ed a not i ce of appeal f r om

t he al l eged di smi ssal of hi s second bankrupt cy case. The cl er k s

not i ce when t he document s were f orwarded t o t he BAP i ndi cat ed t hat

no di smi ssal order had been si gned. The BAP cl erk i ssued an order

advi si ng Mr . Si ngh t hat unl ess he obt ai ned a si gned or der f r om t hebankrupt cy cour t , t he appeal woul d be di smi ssed f or l ack of

j ur i sdi ct i on. No or der was ent er ed, and t hi s appeal was di smi ssed.

BAP No. EC- 12- 1036 - Raj Si ngh v. Davi d Cusi ck, et al . 3

The bankrupt cy cour t ul t i mat el y ent er ed i t s or der on t he

Tr ust ee s 2010 mot i on t o di smi ss on December 21, 2011. Mr . Si ngh

f i l ed hi s not i ce of appeal f r om t hat or der on J anuar y 13, 2012. Th

appeal was di smi ssed as unt i mel y on March 30, 2012. The BAP l ater

deni ed Mr . Si ngh s mot i on f or r econsi der at i on. Hi s f ur t her appeal

t o t he 9t h Ci r cui t was di smi ssed af t er Mr . Si ngh agai n f ai l ed t o pa

hi s f i l i ng f ee.

B. The Cur r ent Appeal .

On J une 22, 2010, t he Tr ust ee recei ved a check f r omt he Tax

Boar d i n the amount of $13, 881. 68, r epr esent i ng a r ef und due and

owi ng t o Rhaghvendra Si ngh f or over payment of 2009 t axes. On


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4 A r el at i vel y l i mi t ed r ecor d was pr ovi ded by the par t i es.We r evi ewed document s on t he bankrupt cy cour t docket whi ch woul del uci dat e t he f act s. See O Rour ke v. Seaboar d Sur . Co. ( I n r e E. R.

Feger t , I nc. ) , 887 F. 2d 955, 957- 58 ( 9t h Ci r . 1988) ( pr ovi di ng t hatt he BAP may t ake j udi ci al not i ce of t he under l yi ng bankr upt cyr ecor ds wi t h r espect t o an appeal ) ; At wood v. Chase Manhat t anMor t gage Co. ( I n r e At wood) , 293 B. R. 227, 233, n. 9 ( 9t h Ci r . BAP2003) ( We have obt ai ned copi es [ of t he rel evant document s] f r om t hecl er k of t he bankrupt cy cour t , and t ake j udi ci al not i ce of t hem. ) ,ci t i ng Feger t , 887 F. 2d at 957- 58.

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Febr uar y 22, 2011, t he Tr ust ee f i l ed t he I nt er pl eader Act i on seeki n

a det er mi nat i on f r om t he bankrupt cy cour t as t o whom t he Pr oceeds

shoul d be di sbur sed. The Compl ai nt al l eged t hat Mr . Si ngh di d not

schedul e a pr oper t y i nt er est i n t he Tax Ref und i n hi s bankrupt cy

case. The Compl ai nt named as pot ent i al cl ai mant s: Mr . Si ngh, base

upon hi s cl ai m or demand on t he Trust ee; Ms. Si ngh, based on

Mr . Si ngh s r epr esent at i ons t hat t he Proceeds may bel ong t o her ; t h

Tax Board, based on i t s cl ai m t hat t he Tax Ref und was pai d t o t he

Tr ust ee i n er r or ; appel l ee Empl oyment Devel opment Depar t ment( EDD) , pur suant t o a Febr uar y 11, 2011 l evy f or an out st andi ng

obl i gat i on owed by Mr . Si ngh; and appel l ee St ephen Li pwor t h

( Mr . Li pwor t h) , pur suant t o a J ul y 28, 2010 l evy based on

Mr . Li pwor t h s pr epet i t i on j udgment agai nst Mr . Si ngh.

The Tax Board f i l ed an answer , asser t i ng t hat pur suant t o Cal .

Ci v. Code 2223 or 2224, t he Tr ust ee was a const r uct i ve t r ust ee

of t he Proceeds f or t he benef i t of t he Tax Boar d. The Tax Boar d

r equest ed t hat t he bankrupt cy cour t di r ect t he Tr ust ee t o pay t he

Proceeds t o t he Tax Boar d. [ Docket #104] .

The EDD f i l ed an answer , al so asser t i ng t hat pur suant t o Cal .


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Ci v. Code 2223 or 2224, t he Tr ust ee was a const r uct i ve t r ust ee

of t he Proceeds f or t he benef i t of t he Tax Boar d. The EDD f ur t her

asser t ed t hat Cal i f or ni a s I nt er agency I nt er cept Col l ect i on Pr ogr am

( Cal . Gov. Code 12419. 5) r equi r ed t he Tax Boar d t o pay t he

Proceeds t o EDD t o sat i sf y Mr . Si ngh s unpai d debt f or unempl oyment

i nsurance cont r i but i ons. The EDD s answer admi t t ed t hat t he Tax

Ref und i ssued i n the name of Rhaghvendra Si ngh bel onged to

Mr . Si ngh. [ Docket #9] .

Mr . Li pwor t h f i l ed an answer , admi t t i ng t hat t he Tax Ref undi ssued i n the name of Rhaghvendr a Si ngh bel onged t o Mr . Si ngh,

aver r i ng t hat t he Pr oceeds wer e subj ect t o l evy by Mr . Si ngh s

cr edi t or s, and r equest i ng j udgment i n Mr . Li pwor t h s f avor r equi r i n

t he Tr ust ee to di sbur se the Pr oceeds t o hi m as a credi t or . [ Docket

#13] .

Mr . Si ngh f i l ed an answer , st at i ng Debt or di d not cont r i but e

anythi ng t o thi s check and accor di ngl y, t hi s check does not bel ong

t o debt or . Mr . Si ngh s answer al so deni ed t hat t he bankrupt cy

cour t had j ur i sdi ct i on over t he I nt er pl eader Act i on wher e i t

pr evi ousl y had announced t hat Mr . Si ngh s chapt er 13 bankr upt cy case

woul d be di smi ssed. Mr . Si ngh s answer al t er nat i vel y asser t ed t hat

i f t he bankr upt cy cour t di d have j ur i sdi ct i on, and i f any par t of

t he Tax Ref und bel onged t o Mr . Si ngh, t hen al l par t i es t o t he

I nt er pl eader Act i on, except f or Mr . Si ngh and Ms. Si ngh, wer e

vi ol at i ng t he aut omat i c st ay i n t r yi ng t o col l ect t he Pr oceeds.

Mr . Si ngh t hen f i l ed a mot i on ( St ay Vi ol at i on Mot i on) based on

t hese same gr ounds i n whi ch he request ed t hat t he bankr upt cy cour t


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( 1) di r ect t hat t he Pr oceeds be r et ur ned t o Kar en Si ngh/ Raj

Si ngh and ( 2) awar d Mr . Si ngh sanct i ons, i ncl udi ng puni t i ve

damages, f or vi ol at i on of t he aut omat i c st ay, agai nst ever y

vi ol at or and vi ol at or s at t or ney.

Ms. Si ngh f i l ed no answer t o t he Compl ai nt .

On Apr i l 28, 2011, t he bankrupt cy cour t hel d a hear i ng on t he

St ay Vi ol at i on Mot i on. Because i t addr esses ever y i ssue Mr . Si ngh

r ai ses i n t he appeal cur r ent l y bef or e t he Panel , we quot e i n det ai l

t he subst ance of t he bankrupt cy cour t s ci vi l mi nut es of t hehear i ng.

[ Debt or s] pr i nci pal ar gument seems t o be t hat t he cour tdoes not have j ur i sdi ct i on i n t hi s mat t er because the mai nbankr upt cy case has been di smi ssed. Whi l e t he cour t hasannounced i t s deci si on to di smi ss t he mai n bankrupt cycase, t he cour t has not yet ent er ed an or der act ual l ydi smi ssi ng t he case. The del ay r el at es t o t he ext ensi vef i ndi ngs of f act and concl usi ons of l aw i n t hi s case: t hecour t cur r ent l y [ i s] pr epar i ng t he f i nal r evi si on of t hi si mpor t ant document t hat out l i nes t he cour t s r easoni ng.See gener al l y, Fed. R. Ci v. P. 52.

I n any event , t he cour t has j ur i sdi ct i on over t hi s cor epr oceedi ng whi ch [ ar ose] i n and i s r el at ed t o [ Si ngh s]bankrupt cy case. 28 U. S. C. 157( b) ( 2) ( O) , 1334( a) ;E. D. Cal . Gen. Or der 223 ( Oct . 22, 1987) . Even i f t heparent bankr upt cy case had been di smi ssed, t he cour t coul dr et ai n j ur i sdi ct i on t o deci de t he mat t er . I n r e Car r aher ,971 F. 2d 327, 328 ( 9t h Ci r . 1992) . I n doi ng so, t he cour tmust consi der economy, conveni ence, f ai r ness andcomi t y . . . . I d. As t hi s i ssue has not been f ul l ybr i ef ed by the par t i es, and t he [ Tax Boar d] expr essed att he [ cour t s] hear i ng consi der i ng an or der t o show causei n t he mai n bankrupt cy case i t s st r ong opi ni on t hat t hi swas t he pr oper f or um t o r esol ve t hi s di sput e, t he cour tdecl i nes t o deci de t hi s i ssue at t hi s j unct ur e. Themot i on t o r et ur n t he f unds and f or a decl ar at i on i sdeni ed.

[ Debt or s] mot i on f or sanct i ons f or vi ol at i ons of t heaut omat i c st ay i s al so deni ed. As t he cour t haspr evi ousl y and repeat edl y addr essed, t her e was no


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aut omat i c st ay i n t hi s case f or any par t y to vi ol at e.11 U. S. C. 362( c) ( 4) . Debt or i s caut i oned t hat unl ess hecan show t hat :

1. t he f i l i ng of t he mot i on i s not bei ngpr esent ed f or any i mpr oper pur pose, such as t oharass or t o cause unnecessary del ay or[ needl essl y] i ncrease . . . t he cost ofl i t i gat i on, and

2. t he cl ai ms, def enses, and ot her l egalcont ent i ons t her ei n ar e war r ant ed by exi st i ngl aw or by a nonf r i vol ous argument f or t heext ensi on, modi f i cat i on, or r ever sal of exi st i ngl aw or t he est abl i shment of new l aw,

t hen he may be subj ect t o sanct i ons. See Fed. R. Bankr .P. 9011. Repeat ed f i l i ng of a mot i on t hat t he cour t hasal r eady resol ved agai nst Debt or does not meet hi sobl i gat i ons under t he l aw. I d.

Addi t i onal l y, t he Debt or has st at ed numer ous t i mes i n anumber of pl eadi ngs . . . t hat he has no i nt er est i n t hemoni es whi ch have been deposi t ed wi t h t he cour t . I n hi smot i on t he Debt or err oneousl y st at es t hat t he cour t hasdet er mi ned t hat t he Debt or has no i nt er est i n t he check.Rather , si nce the Debt or has r epeat edl y di savowed anyr i ght t o t he moni es, not wi t hst andi ng t he St at e ofCal i f or ni a havi ng det er mi ned t hat he was [ owed] t her ef und, t he cour t woul d not al l ow t he Debt or t o cl ai mmi l l i ons of dol l ar s i n sancti ons f or al l eged vi ol at i ons oft he aut omat i c st ay wi t h r espect t o t hese moni es. I n t hi sl atest mot i on, t he Debt or now r equest s t hat t he moneyshoul d be gi ven ei t her t o Kar en Si ngh, whom i s i dent i f i edas hi s ex- wi f e, or t he Debt or , who cont ends he has nor i ght t o t he moni es. Kar en Si ngh has not br ought t hi smot i on, nor has she asser t ed any r i ght s i n t hei nt er pl eader act i on t o cl ai m an i nt er est i n t he moni es.

Though he i s a ver y exper i enced l i t i gant havi ng f i l edmul t i pl e Cal i f or ni a Super i or Cour t cases, mul t i pl e appeal sbef or e t he Cal i f or ni a Di st r i ct Cour t of Appeal , mul t i pl er equest s f or cer t i or ar i f r om t he Cal i f or ni a Supr eme Cour t ;mul t i pl e bankrupt cy cases, adver sary pr oceedi ngs, andcont est ed mat t er s i n t hi s cour t ; mul t i pl e appeal s . . . t ot he Bankrupt cy Appel l at e Panel , [ an] appeal t o t he Thi r dCi r cui t Cour t of Appeal , [ an] appeal t o t he Uni t ed St at esDi st r i ct Cour t f or t he Di st r i ct of Del awar e, andpr osecut i on of [ a] cl ai m i n t he Uni t ed St at es Bankrupt cyCour t f or t he Di st r i ct of Del awar e, t he Debt or has notof f er ed any evi dence i n suppor t of hi s cur r ent mot i on.


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The cour t cannot and wi l l not grant r el i ef mer el y becausea pl eadi ng i s f i l ed aski ng t o get pai d money.

The mot i on i s deni ed.

[ Docket #22] . The bankrupt cy cour t ent er ed a ci vi l mi nut e or der on

May 4, 2011, denyi ng t he St ay Vi ol at i on Mot i on. No appeal was take

f r om t hat order .

On J une 1, 2011, Mr . Si ngh f i l ed a mot i on ( Show Cause Mot i on

f or an or der t o show cause and t o r ef er t he case f or i nvest i gat i on

by the Cal i f or ni a St at e Bar and t he Amer i can Bar Associ at i on.Thr ough t he Show Cause Mot i on, Mr . Si ngh sought an or der r equi r i ng

Mr . Li pwort h and hi s at t orney t o show cause why t hey di d not have

t he determi nat i on of t he owner of t he subj ect pr opert y and why they

mi sr epr esent ed t o t hi s cour t i n t hei r decl ar at i ons t hat Raj Si ngh

f i l ed Chapt er 7 bankrupt ci es. The bankrupt cy cour t deni ed t he Sho

Cause Mot i on by Ci vi l Mi nut e Or der ent er ed J ul y 5, 2011.

On August 5, 2011, Mr . Li pwor t h r equest ed ( Fi r st Def aul t

Request ) t hat t he bankrupt cy cour t ent er def aul t agai nst Ms. Si ngh

based on her f ai l ur e t o f i l e an answer . [ Docket #44] . On

August 25, 2011, t he EDD, t he Tax Boar d and Mr . Li pwor t h j oi nt l y

f i l ed a mot i on ( 1) t o appr ove a set t l ement agr eement t hey had

r eached wi t h t he Tr ust ee and ( 2) f or ent r y of j udgment i n t he

I nt er pl eader Act i on ( Fi r st Request f or J udgment ) .

Mr . Si ngh opposed t he Fi r st Request f or J udgment , al l egi ng

( 1) t he case was moot because Mr . Lohei t no l onger was t he case


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5 Davi d Cusi ck had been appoi nt ed successor t r ust ee i nMr . Si ngh s bankr upt cy case.

6 Mr . Si ngh al so asser t ed t hat t he bankrupt cy cour t had noj ur i sdi ct i on t o awar d t he Pr oceeds t o anyone ot her t han Mr . Si ngh.

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Tr ust ee; 5 ( 2) t he bankrupt cy cour t had no j ur i sdi ct i on over t he

I nt erpl eader Act i on because t he Tax Ref und had been i ssued i n

error; 6 ( 3) t hat t he check was wr i t t en t o Mr . Si ngh, so i t bel onged

t o hi m; ( 4) t he pl eadi ngs of t he Tax Boar d, t he EDD, and

Mr . Li pwor t h al l st at e t hat t he Pr oceeds bel onged t o Mr . Si ngh, so

t he bankr upt cy cour t coul d not award the Pr oceeds t o anyone el se;

and ( 5) as a chapt er 13 debt or , Mr . Si ngh was ent i t l ed t o handl e

t he Proceeds. Mr . Si ngh al so st at ed t hat awar di ng t he Proceeds t o

Mr . Li pwor t h and t he EDD woul d r esul t i n mul t i pl e l awsui t s, andasser t ed t her e i s no pr oof t hat Ms. Si ngh had been served.

Mr . Si ngh concl uded by r est at i ng hi s bel i ef t hat t he bankrupt cy

cour t shoul d penal i ze t he Tax Boar d, t he EDD, and Mr . Li pwor t h f or

at t empt i ng t o col l ect t he Pr oceeds i n vi ol at i on of t he aut omat i c

st ay. Mr . Si ngh made each of t hese ar gument s i n hi s opposi t i on t o

Mr . Li pwor t h s mot i on f or ent r y of def aul t agai nst Ms. Si ngh,

t oget her wi t h t he f ol l owi ng ar gument s: a co- def endant had no

st andi ng t o r equest ent r y of def aul t agai nst anot her co- def endant ,

t he al l egat i ons i n t he mot i on f or def aul t j udgment wer e i ncor r ect ,

Ms. Si ngh does not appear t o have been ser ved, and f i nal l y, because

t he al l egat i ons i n t he Compl ai nt and t he Tax Ref und bot h st at e that

t he money bel ongs onl y t o Mr . Si ngh, Ms. Si ngh di d not need t o

answer t he compl ai nt .


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7 I t appear s t hat t he Cl er k deni ed t he i ni t i al r equest f orent r y of Ms. Si ngh s def aul t , bel i evi ng t hat onl y t he Tr ust ee, aspl ai nt i f f , coul d make t hat r equest . The bankrupt cy cour t made cl eaat t he hear i ng t hat any par t y coul d r equest def aul t and def aul tj udgment be ent er ed agai nst any ot her par t y. Mr . Si ngh const r uest he bankrupt cy cour t s pr ocedur al di scussi ons as i mpr oper l y hel pi ngMr . Li pwor t h.

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The bankrupt cy cour t deni ed t he Fi r st Request f or J udgment on

t he basi s t hat unl ess and unt i l a def aul t j udgment had been ent er ed

agai nst Ms. Si ngh, she r emai ned a cl ai mant t o t he Proceeds. 7

[ Docket #57] .

On Oct ober 7, 2011, Mr . Li pwor t h renewed hi s r equest f or ent r y

of def aul t , based upon whi ch t he Cl erk ent er ed Ms. Si ngh s def aul t

on Oct ober 18, 2011, and di r ect ed t hat an appl i cat i on f or a def aul t

j udgment shoul d be f i l ed wi t hi n 30 days of t he dat e t he def aul t was

ent er ed, whi ch shoul d be set f or a prove- up hear i ng consi st entwi t h t he cour t s l ocal r ul es. [ Docket #61] . On Oct ober 27, 2011,

Mr . Si ngh f i l ed a mot i on t o set asi de t he def aul t , asser t i ng t hat

t he Cl er k coul d ent er def aul t onl y on t he r equest of Pl ai nt i f f .

Mr . Si ngh sai d i f t he Cl er k can i n f act ent er def aul t based on t he

r equest of a co- def endant ( Mr . Li pwor t h) , t hen t he Cl er k al so coul d

set asi de t he def aul t on t he r equest of anot her co- def endant

( Mr . Si ngh) . Subst ant i vel y, Mr . Si ngh asser t ed t hat t he def aul t

agai nst Ms. Si ngh was pr ej udi ci al not onl y t o her , but al so t o hi m

and ot her def endant s. On November 3, 2011, t he EDD and t he Tax

Boar d j oi nt l y f i l ed a mot i on f or a def aul t j udgment agai nst

Ms. Si ngh ( Mot i on f or Def aul t J udgment ) . Al so on November 3,


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2011, t he EDD, t he Tax Boar d, and Mr . Li pwor t h j oi nt l y f i l ed a

r enewed mot i on ( Second Request f or J udgment ) ( 1) t o appr ove a

set t l ement agr eement t hey had r eached wi t h the Tr ust ee and (2) f or

ent r y of j udgment i n t he I nt er pl eader Act i on. [ Docket #68] .

Fi nal l y, on November 3, 2011, Mr . Li pwor t h f i l ed an appl i cat i on f or

j udgment on t he pl eadi ngs ( Mot i on f or J udgment Agai nst Mr . Si ngh)

r equest i ng t hat j udgment be ent er ed agai nst Mr . Si ngh i n t he

I nt er pl eader Act i on, wher e Mr . Si ngh had made no cl ai m t o t he

Proceeds and t hat any cl ai m Mr . Si ngh mi ght have i n t he Pr oceeds wapar t of hi s bankr upt cy est at e avai l abl e f or di st r i but i on t o

cr edi t or s. [ Docket #73] . The bankrupt cy cour t hel d t he ul t i mat e

hear i ng i n t he I nt erpl eader Act i on on December 1, 2011 ( December 1

Hear i ng) , at whi ch t i me al l of t hese pendi ng mot i ons were

consi der ed.

At t he December 1 Hear i ng, t he bankr upt cy cour t r ecount ed t hat

t he I nt er pl eader Act i on was f i l ed af t er Mr . Si ngh had di savowed an

i nt er est i n t he Tax Ref und. The I nt er pl eader Act i on pr ovi ded t he

oppor t uni t y f or anyone, i ncl udi ng Mr . Si ngh, who cl ai med an i nt er est

i n t he Proceeds t o st ep f or war d and make t hat cl ai m. Mr . Si ngh di d

not . I nst ead, Mr . Si ngh t ook t he vi ew t hat t he ot her par t i es wer e

r equi r ed t o pr ove t hat t he f unds af f i r mat i vel y bel onged t o

Mr . Si ngh. I f t hey f ai l ed t o do t hat , t hey coul d not have t he

Pr oceeds; i f t hey succeeded, t hey wer e not ent i t l ed t o t he Pr oceeds

because the aut omat i c st ay woul d pr ecl ude t hem f r om r eachi ng

Mr . Si ngh s pr oper t y. The bankrupt cy cour t r ul ed t hat because

Mr . Si ngh di d not make a cl ai m t o t he Proceeds i n hi s own behal f ,


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t he ot her co- def endant s wer e ent i t l ed t o j udgment agai nst Mr . Si ngh

t o pr ecl ude hi m f r om shar i ng i n any di st r i but i on of t he Pr oceeds.

On t hat basi s, t he bankrupt cy cour t gr ant ed Mr . Li pwor t h s mot i on o

t he pl eadi ngs.

The bankrupt cy cour t next addressed t he def aul t enter ed agai nst

Ms. Si ngh, not i ng t hat Ms. Si ngh had not chal l enged ent r y of def aul

agai nst her . The bankrupt cy cour t f ound si gni f i cant Ms. Si ngh s

f ai l ur e t o asser t a cl ai m t o t he Pr oceeds by ei t her f i l i ng an answe

or seeki ng r el i ef f r om t he def aul t ent er ed agai nst her . Thebankrupt cy cour t expl ai ned t hat a def aul t j udgment agai nst Ms. Si ng

had no i mpact on Mr . Si ngh s r i ght s, not wi t hst andi ng hi s cont ent i on

t hat i t di d, such t hat he had no st andi ng t o seek to set asi de t he

def aul t ent er ed agai nst Ms. Si ngh.

Fi nal l y, t he bankrupt cy cour t appr oved t he set t l ement pur suant

t o whi ch Mr . Li pwor t h and t he EDD woul d shar e t he Proceeds and

grant ed j udgment t o Mr . Li pwor t h and t he EDD based upon t he t erms o

t he set t l ement . I n appr ovi ng t he set t l ement , t he bankrupt cy cour t

st at ed i t was f ai r as t o Mr . Si ngh i n t hat hi s debt s wer e bei ng pai

wi t h t he Pr oceeds. Dur i ng t he cour se of t he di scussi on r egar di ng

t he set t l ement , Mr . Si ngh gave away hi s t r ue mot i vat i on, whi ch

cl ear l y was t o pr ecl ude any r ecover y by Mr . Li pwort h on t he j udgment

he hel d agai nst Mr . Si ngh: I have no pr obl em i f [ t he Proceeds ar e

gi ven t o EDD. Tr . of Dec. 1 Hear i ng at 19: 19- 20.

Mr . Si ngh f i l ed hi s not i ce of appeal on December 8, 2011

[ Docket #93] , notwi t hst andi ng that no j udgment yet had been ent ered

Ci vi l mi nut e or der s grant i ng and denyi ng t he mot i ons heard at t he


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December 1 Hear i ng wer e ent er ed on t he docket on December 19, 2011.

The J udgment was ent er ed on December 22, 2011, per f ect i ng t he

appeal . [ Docket #100] . The J udgment ( 1) det ermi ned t hat Mr . Si ngh

Ms. Si ngh, and t he Tax Boar d each had no r i ght t o recei ve payment o

t he Pr oceeds, ( 2) awarded t he EDD $7, 381. 68 of t he Pr oceeds,

( 3) awar ded Mr . Li pwor t h $6, 500. 00 of t he Proceeds, and ( 4) di r ect e

t he Cl er k to di sbur se t he i nt er pl ed f unds i n accor dance wi t h t he

J udgment .

I I . J URI SDI CTI ONThe bankrupt cy cour t had j ur i sdi ct i on under 28 U. S. C. 1334

and 157( b) ( 2) ( O) . We have j ur i sdi ct i on under 28 U. S. C. 158.

I I I . I SSUES

Whet her t he bankrupt cy cour t err ed i n i t s awar d of t he

Proceeds.

Whether t he bankr upt cy cour t er r ed when i t determi ned t hat no

aut omat i c st ay exi st ed i n t he bankrupt cy case.

I V. STANDARDS OF REVI EW

A t r i al cour t ' s deni al of a mot i on t o set asi de ei t her def aul t

under Rul e 55( c) or def aul t j udgment under Rul e 60( b) ( 1) i s r evi ewe

f or abuse of di scr et i on. Br andt v. Am. Banker s I ns. Co. Of Fl a. ,

653 F. 3d 1108, 1110 ( 9t h Ci r . 2011) . We appl y a t wo- par t t est t o

det er mi ne whet her t he bankrupt cy cour t abused i t s di scr et i on.

Uni t ed St at es v. Hi nkson, 585 F. 3d 1247, 1261- 62 ( 9t h Ci r . 2009)

( en banc) . Fi r st , we consi der de novo whet her t he bankr upt cy cour t

appl i ed t he cor r ect l egal st andar d t o t he r el i ef r equest ed. I d.

Then, we r evi ew t he bankrupt cy cour t s f act f i ndi ngs f or cl ear


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er r or . I d. at 1262 & n. 20. We must af f i r m t he bankrupt cy cour t s

f act f i ndi ngs unl ess we concl ude t hat t hey ar e ( 1) i l l ogi cal ,

( 2) i mpl ausi bl e, or ( 3) wi t hout suppor t i n i nf er ences t hat may b

dr awn f r om t he f act s i n t he r ecor d. I d.

We r evi ew j udgment s on t he pl eadi ngs made under Ci vi l

Rul e 12( c) de novo. Lyon v. Chase Bank USA, N. A. , 656 F. 3d 877

( 9t h Ci r . 2011) . De novo r evi ew i s i ndependent , wi t h no def er ence

gi ven t o t he t r i al cour t ' s concl usi on. See Fi r st Ave. W. Bl dg. , LL

v. J ames ( I n r e Onecast Medi a, I nc. ) , 439 F. 3d 558, 561 ( 9t h Ci r .2006) .

The scope or appl i cabi l i t y of t he aut omat i c st ay under 362 i

a quest i on of l aw, whi ch i s r evi ewed de novo. Sal azar v. McDonal d

( I n r e Sal azar ) , 430 F. 3d 992, 994 ( 9t h Ci r . 2005) ( We r evi ew t he

[ bankrupt cy cour t s] i nt er pr et at i on of t he bankrupt cy code as a

quest i on of l aw and, t her ef or e, r evi ew i t de novo. ) .

V. DI SCUSSI ON

I . The Bankr upt cy Cour t Di d Not Er r I n I t s Ent r y of t he J udgment

A. Mr . Si ngh Had No St andi ng To Seek To Vacat e t he Def aul tEnt er ed Agai nst Ms. Si ngh

A pr udent i al pr i nci pl e of st andi ng i s t hat [ i ] n t heor di nar y case, a par t y i s deni ed st andi ng t o asser t t her i ght s of t hi r d per sons. Ar l i ngt on Hei ght s v. Met r o.Hous. Dev. Cor p. , 429 U. S. 252, 263, 97 S. Ct . 555, 50L. Ed. 2d 450 ( 1977) . However , cour t s wi l l al l ow anexcept i on t o t he t hi r d- par t y st andi ng pr ohi bi t i on i nsi t uat i ons wher e ( 1) t he l i t i gant suf f er ed some sor t ofi nj ur y- i n- f act, ( 2) t her e exi st s some sor t of r el at i onshi pbet ween t he l i t i gant and t he per son whose r i ght s t hel i t i gant seeks t o asser t , and ( 3) some obst acl e hi nder st he speaker ' s abi l i t y t o asser t per sonal r i ght s. Power sv. Ohi o, 499 U. S. 400, 411, 111 S. Ct . 1364, 113 L. Ed. 2d411 ( 1991) .


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8 I n f act , t he onl y pr ej udi ce t o Mr . Si ngh i n not vacat i nt he def aul t i s t hat t he I nt er pl eader Act i on was al l owed t o r each

( cont i nued. . .

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Doe No. 1 v. Reed, 697 F. 3d 1235, 1245 n. 3 ( 9t h Ci r . 2012) ( Smi t h,

N. R. , Ci r cui t J udge, concur r i ng) .

The bankrupt cy cour t probed Mr . Si ngh on t he basi s f or hi s

st andi ng. The bur den was on Mr . Si ngh t o est abl i sh an except i on t o

t he gener al r ul e t hat a par t y cannot asser t t he r i ght s of t hi r d

per sons. We wi l l not assume t hat f ormer spouses have a suf f i ci ent

r el at i onshi p t o al l ow one to advocat e on behal f of anot her .

Fur t her , Mr . Si ngh di d not pr ovi de evi dence of any obst acl e t o

Ms. Si ngh s abi l i t y t o asser t her own r i ght s. To t he cont r ar y, t hebankrupt cy cour t r eci t ed on t he r ecord t hat Ms. Si ngh had

par t i ci pat ed i n her own behal f i n an ear l i er pr oceedi ng.

Addi t i onal l y, Ci vi l Rul e 55( c) pr ovi des a bankr upt cy cour t wi t

di scr et i on t o set asi de a def aul t f or good cause. Mr . Si ngh di d

not provi de evi dence of any cause based upon whi ch Ms. Si ngh was

ent i t l ed t o r el i ef f r om ent r y of t he def aul t .

I t i s t r ue t hat t her e i s a pr ef er ence f or r esol vi ng di sput es o

t he mer i t s rat her t han by def aul t adj udi cat i ons. However , set t i ng

asi de Ms. Si ngh s def aul t woul d not have f ur t her ed t hi s goal ; Ms.

Si ngh di d not f i l e an answer and t hereby di d not make hersel f

avai l abl e f or par t i ci pat i on i n t he pr oceedi ngs. Mr . Si ngh s

concer ns about pr ej udi ce t o hi m not wi t hst andi ng, t her e was no way

f or t he I nt er pl eader Act i on t o move f or war d unl ess Ms. Si ngh ei t her

appear ed or was def aul t ed. 8 Accor di ngl y, wi t hout her pr esence and


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8( . . . cont i nued)r esol ut i on.

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par t i ci pat i on, def aul t was appr opr i at e.

The bankrupt cy cour t di d not abuse i t s di scr et i on i n not

set t i ng asi de t he def aul t agai nst Ms. Si ngh i n t hese ci r cumst ances.

B. Mr . Si ngh Wai ved Hi s Ri ght t o Cont est t he J udgment

I n hi s Openi ng Br i ef , Mr . Si ngh asser t s as hi s f i r st i ssue on

appeal onl y t hat t he bankrupt cy cour t er r ed when i t ent ered t he

J udgment di vi di ng t he Pr oceeds bet ween t he EDD and Mr . Li pwor t h.

However , t he ar gument wi t h r espect t o thi s i ssue on appeal i s

couched wi t h r epeat ed st atement s t hat t he Pr oceeds shoul d have beenawarded t o Mr . Si ngh, because:

1. Mr . Si ngh cont r ol s t he f i nances.

2. The bankrupt cy cour t shoul d have di smi ssed t he under l yi ng

bankrupt cy case; because i t di d not , al l pr oceedi ngs af t er t he

di smi ssal had been r equest ed shoul d be voi ded.

3. The bankrupt cy cour t had no j ur i sdi ct i on t o r ul e on t he

di sposi t i on of t he Pr oceeds, f or t he reason t hat t he bankrupt cy

cour t di d di smi ss t he under l yi ng bankrupt cy case bef or e t he

I nt er pl eader Act i on was f i l ed,

4. At t he t i me of t r i al , Mr . Lohei t no l onger was Tr ust ee

and no l onger had t he Pr oceeds.

5. The J udgment i s a def aul t j udgment ; as such, i t was l i mi t e

t o t he r el i ef r equest ed. Because ever yone asser t ed i n t hei r

pl eadi ngs t hat t he Tax Ref und was Mr . Si ngh s, t he Pr oceeds shoul d


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have been awar ded to hi m.

6. The Tax Ref und was i ssued i n er r or ; t her ef or e, t he

bankrupt cy cour t had no j ur i sdi ct i on over t he Pr oceeds.

At oral argument , Mr . Si ngh asser t ed t hat t he Bankr upt cy Code

pr ovi ded t hat t he debt or was t o r emai n i n possessi on of al l pr oper t

of t he est at e. As t he Panel poi nt ed out t o Mr . Si ngh, such

possessi on i s subj ect t o super vi si on by t he Tr ust ee and t he

bankrupt cy cour t . Mr . Si ngh f ur t her appear ed t o ar gue t hat on

di smi ssal al l f unds hel d by the Tr ust ee wer e t o be pai d t o t hedebt or . The pr obl em f or Mr . Si ngh i n t hi s regar d i s that t he f unds

no l onger wer e hel d by t he Tr ust ee, t hey wer e i n t he cour t r egi st r y

subj ect t o t he compet i ng cl ai ms bei ng l i t i gat ed i n t he I nt er pl eader

Acti on.

Fromhi s ar gument , i t i s cl ear t hat Mr . Si ngh bel i eves t he

J udgment was ent er ed i n er r or onl y because t he Pr oceeds wer e not

awar ded t o hi m. Unf or t unat el y, i n hi s ef f or t t o keep t he Pr oceeds

f r om r eachi ng Mr . Li pwor t h, Mr . Si ngh deni ed i n hi s answer t hat he

had any pr oper t y i nt er est i n t he Pr oceeds. An i nt er pl eader act i on

i s f i l ed t o sor t out compet i ng cl ai ms t o pr oper t y. See Ci vi l

Rul e 22. As poi nt ed out by t he bankr upt cy cour t , t he def endant s i n

t he I nt er pl eader Act i on wer e char ged t o pr esent t hei r cl ai ms t o t he

Pr oceeds. Mr . Si ngh, st r at egi cal l y, di d not do so. A j udgment o

t he pl eadi ngs i s pr oper l y gr ant ed when, t aki ng al l t he al l egat i ons

i n t he pl eadi ngs as t r ue, [ a] par t y i s ent i t l ed t o j udgment as a

mat t er of l aw. Dunl ap v. Cr edi t Pr ot . Ass' n, L. P. , 419 F. 3d 1011

1012 n. 1 ( 9t h Ci r . 2005) ( per cur i am) ( quot i ng Owens v. Kai ser


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Found. Heal t h Pl an, I nc. , 244 F. 3d 708, 713 ( 9t h Ci r . 2001) ) . By not

maki ng a cl ai m t o t he Proceeds i n hi s Answer , Mr . Si ngh wai ved hi s

cl ai m t o t he Pr oceeds, t oget her wi t h hi s r i ght t o appeal any

deci si on t hat di d not awar d t he Proceeds t o hi m.

Lef t wi t h onl y t wo cl ai mant s t o t he Pr oceeds, t he bankrupt cy

cour t di d not er r when i t appr oved t he set t l ement between t hemand

ent ered J udgment i n accor dance wi t h t hat set t l ement .

I I . The I ssue of Whet her t he Appel l ees Vi ol at ed t he Aut omat i cSt ay I s Not Proper l y Bef or e t he Panel

The Panel need not , i n f act cannot , address Mr . Si ngh s i ssue

on appeal t hat t he bankrupt cy cour t er r ed i n not det er mi ni ng t hat

t he Appel l ees vi ol at ed t he aut omat i c st ay. I n t he Ci vi l Mi nut es of

t he St ay Rel i ef Mot i on t he bankrupt cy cour t caut i oned Mr . Si ngh f or

br i ngi ng t he mot i on i n l i ght of i t s pr i or f i ndi ng i n t he mai n

bankrupt cy case t hat no aut omat i c st ay exi st ed i n t he case. That

det er mi nat i on i s f ound i n t he Ci vi l Mi nut es ent er ed i n t he mai n cas

on March 15, 2011, r eci t ed here:

NO AUTOMATIC STAY IN EFFECT IN THE INSTANT BANKRUPTCY CASE

Mr . Si ngh has f i l ed mul t i pl e bankrupt cy cases i n t hi scour t dur i ng a one- year per i od. The f i r st case was f i l edon November 9, 2009, wi t h t hat case bei ng di smi ssed onNovember 25, 2009. Mr . Si ngh f i l ed hi s second bankr upt cycase on November 24, 2009, whi ch was di smi ssed by t hecour t on Apr i l 5, 2010. Mr . Si ngh f i l ed t he i nst ant caseon Apr i l 2, 2010.

The Bankr upt cy Code was amended by Congress i n 2005. Theamendment s i ncl uded sever al pr ovi si ons t o addr essper cei ved abuses ar i si ng f r om r epeat bankrupt cy f i l i ngs bydebt or s. 11 U. S. C. 362( c) ( 4) provi des t hat i f t wo ormore bankr upt cy cases f or a debt or were pendi ng wi t hi n thepr evi ous year , and had been di smi ssed, t he aut omat i c st ayshal l not go i nt o ef f ect i n t he subsequent case.


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11 U. S. C. 362( c) ( 3) pr ovi des t hat i f t her e was a si ngl eother case pendi ng f or t he debt or whi ch was di smi ssed i nt he year pr i or t o t he subsequent case, t hen t he aut omat i c

st ay t ermi nates t hi r t y ( 30) days af t er t he commencement oft he subsequent case, unl ess t he debt or f i l es a mot i on andhas a hear i ng wi t hi n t he 30- day per i od on a mot i on t oext end t he st ay.

For t hi s Debt or , t wo pr i or cases wer e pendi ng anddi smi ssed i n t he one year per i od pr ecedi ng t he Apr i l 2,2010, commencement of t he cur r ent case. No aut omat i c st aywent i nt o ef f ect i n t hi s case. Addi t i onal l y, t he Debt orhas not sought and di d not obt ai n an order t o ext end t hest ay, t o t he extent he cont ends [ onl y] one [ pr i or case]exi st ed, as r equi r ed under 11 U. S. C. 362( c) ( 3) .

DECISION

. . .

[ T] her e i s no aut omat i c st ay i n t hi s case whi ch coul d bevi ol ated . . . .

[ Mai n case Docket #177] . A Ci vi l Mi nut e Or der was ent ered March 17

2011 denyi ng t he rel i ef sought i n t he mot i on f or sanct i ons t hat had

i ni t i at ed t he Ci vi l Mi nut es quot ed above. [ Mai n case Docket #178] .

Mr . Si ngh di d not appeal t hat or der . He consequent l y wai ved hi s

r i ght t o asser t i n any f ut ur e pr oceedi ng t hat t he aut omat i c st ay

exi st ed, and he coul d not l egi t i mat el y cl ai m any st ay vi ol at i on.

VI . CONCLUSI ON

Mr . Si ngh had no st andi ng t o seek t o vacat e the def aul t ent er e

agai nst Ms. Si ngh. Fur t her , he f ai l ed t o asser t hi s cl ai m t o t he

Pr oceeds i n hi s answer , st at i ng i nst ead t hat t he Pr oceeds bel onged

t o Ms. Si ngh. He wai ved hi s r i ght t o compl ai n t hat t he bankrupt cy

cour t er r ed when i t gr ant ed j udgment agai nst hi m based on hi s

answer . Havi ng cl ai med no i nt er est i n t he Proceeds, he cannot now

asser t on appeal t hat t he bankrupt cy cour t er r ed by awar di ng t he


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Pr oceeds t o Appel l ees.

Fi nal l y, Mr . Si ngh di d not appeal t he bankrupt cy cour t s Mar ch

2011 det er mi nat i on t hat no aut omat i c st ay was i n ef f ect i n hi s case

That det er mi nat i on became f i nal , such t hat Mr . Si ngh cannot now

compl ai n t hat t he bankrupt cy j udge rel i ed on i t when denyi ng t he

St ay Mot i on.

We AFFI RM t he J udgment of t he bankr upt cy cour t .

Documents

In re: Raj Singh, 9th Cir. BAP (2013)