In re: Walter R. Pineda, 9th Cir. BAP (2013)

7/25/2019 In re: Walter R. Pineda, 9th Cir. BAP (2013)

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*Thi s di sposi t i on i s not appr opr i at e f or publ i cat i on.Al t hough i t may be ci t ed f or what ever per suasi ve val ue i t mayhave ( see Fed. R. App. P. 32. 1) , i t has no pr ecedent i al val ue.See 9t h Ci r . BAP Rul e 8013- 1.

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

I n r e: ) BAP No. EC- 11- 1719- MkDJ u)

WALTER R. PI NEDA, ) Bk. No. 10- 91936)

Debt or . ) Adv. No. 10- 09060______________________________)

)WALTER R. PI NEDA, )

)Appel l ant , )

)

v. ) MEMORANDUM*

)BANK OF AMERI CA, N. A. ; )RECONTRUST COMPANY, N. A. ; BANK)OF NEW YORK MELLON, N. A. , )I NC, ; GSR MORTGAGE LOAN TRUST )2003- 9; GOLDMAN SACHS, I NC. ; )UNI TED STATES TRUSTEE; GARY )FARRAR, Chapt er 7 Trustee, )

)Appel l ees. )

______________________________)

Ar gued and Submi t t ed on Mar ch 22, 2013at Sacr ament o, Cal i f or ni a

Fi l ed Apr i l 23, 2013

Appeal f r om t he Uni t ed St at es Bankrupt cy Cour tf or t he Easter n Di str i ct of Cal i f or ni a

Honor abl e Ronal d H. Sar gi s, Bankrupt cy J udge, Pr esi di ng

Appear ances: Appel l ant Wal t er R. Pi neda ar gued on hi s ownbehal f ; Andr ea McDonal d Hi cks of Br yan Cave, LLP

ar gued f or Appel l ees Bank of Amer i ca, N. A. ,Recont r ust Company, N. A. , Bank of New Yor k Mel l on,N. A. , I nc. , Gol dman Sachs, I nc. and GSR Mort gageLoan Trust 2003- 9.

FILED

APR 23 2013

SUSAN M SPRAUL, CLERKU.S. BKCY. APP. PANELOF THE NINTH CIRCUIT


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1Unl ess speci f i ed ot her wi se, al l chapt er and sect i onr ef er ences are t o t he Bankrupt cy Code, 11 U. S. C. 101- 1532, andal l Rul e r ef er ences ar e t o t he Feder al Rul es of Bankrupt cyPr ocedur e, Rul es 1001- 9037. Al l Ci vi l Rul e ref er ences ar e t ot he Feder al Rul es of Ci vi l Pr ocedur e.

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

INTRODUCTION

Chapt er 71 debt or Wal t er R. Pi neda ( Pi neda) commenced an

adver sar y pr oceedi ng ( Adver sar y Proceedi ng) agai nst Bank ofAmer i ca and ot her s r egar di ng t he or i gi nat i on and secur i t i zat i on

of hi s home l oan ( Loan) and r egardi ng enf orcement of t hat Loan,

par t i cul ar l y t he commencement of f or ecl osure pr oceedi ngs. The

bankrupt cy cour t di smi ssed Pi neda s f i r st amended compl ai nt

( FAC) wi t hout pr ej udi ce and wi t h l eave t o amend ( Fi r st

Di smi ssal Or der ) . Af t er Pi neda f i l ed a second amended compl ai nt

( SAC) , t he bankrupt cy cour t di smi ssed t he ent i r e adver sary

pr oceedi ng wi t hout pr ej udi ce and wi t hout l eave t o amend, but

subj ect t o a f i nal deci si on on whet her t he cour t shoul d abst ai n

under 28 U. S. C. 1334( c) ( 1) ( Second Di smi ssal Or der ) . Pi neda

appeal ed t hat r ul i ng. Lat er , t he bankrupt cy cour t ent er ed an

abst ent i on or der ( Abst ent i on Or der ) , whi ch f ul l y and f i nal l y

di sposed of t he Adver sary Pr oceedi ng. Pi neda di d not f i l e anot i ce of appeal af t er ent r y of t he Abst ent i on Or der , but he di d

f i l e a mot i on f or l eave t o appeal .

I t i s debat abl e whet her Pi neda t ook any act i on t hat shoul d

count as an appeal of t he Abst ent i on Or der . I f t her e was no

t i mel y appeal of t he Abst ent i on Or der , Pi neda s appeal of t he

Second Di smi ssal Or der shoul d be di smi ssed as moot . We wi l l ,

however , er r on t he si de of det er mi ni ng t hi s mat t er on t he


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2We have der i ved most of t he f act s r eci t ed her ei n f r om t heal l egat i ons of Pi neda s compl ai nt s and f r om t he pr ocedur alhi st or y of Pi neda s Adver sar y Pr oceedi ng, whi ch i s not subj ect t ol egi t i mat e di sput e.

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mer i t s, so we wi l l t r eat Pi neda s mot i on f or l eave t o appeal as

i f i t wer e a not i ce of appeal f r om t he Abst ent i on Or der . We

AFFI RM t he bankrupt cy cour t s Abst ent i on Or der . Because we ar e

af f i r mi ng t he Abst ent i on Or der and because both of t he bankr upt cycour t s di smi ssal or der s wer e wi t hout pr ej udi ce, we do not r each

any subst ant i ve i ssues r el at ed t o t he di smi ssal or der s.

FACTS2

A. The Loan and Pinedas Bankruptcy Case

Pi neda admi t s t hat , on or about August 13, 2002, i n exchange

f or t he Loan, he execut ed a pr omi ssory note ( Note) and a deed

of t r ust ( Tr ust Deed) agai nst hi s r esi dence l ocat ed i n Sonor a,

Cal i f or ni a ( Pr oper t y) . Pi neda does not di sput e t hat he st opped

maki ng payment s on t he Loan i n 2008, or t hat f orecl osur e

pr oceedi ngs were commenced agai nst t he Proper t y i n J anuary 2010,

wi t h t he r ecor di ng of a Not i ce of Def aul t .

Pi neda at t r i but es hi s f i nanci al condi t i on t o a combi nat i on

of f act or s i ncl udi ng acut e heal t h pr obl ems, whi ch at t i mes haver equi r ed hospi t al i zat i on, and t he nat i onal f i nanci al cri si s,

whi ch he i n par t bl ames on the def endant s named i n t he Adver sar y

Proceedi ng.

Appar ent l y i n r esponse t o a schedul ed f or ecl osur e sal e of

t he Pr oper t y, Pi neda f i l ed hi s chapt er 7 bankrupt cy case i n May

2010. Gary Far r ar was appoi nt ed t o serve as chapt er 7 t r ust ee

( Trust ee) . On hi s Schedul e C, pr oper t y cl ai med as exempt ,


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Pi neda l i st ed as an asset Pr epar at i on of ci vi l compl ai nt agai nst

Bank of Amer i ca et al f or f r aud, br each of cont r act , vi ol at i ons

of t r ut h I n Lendi ng Act . He di d not l i st t hese cl ai ms on hi s

Schedul e B of per sonal pr oper t y, but hi s Stat ement of Fi nanci alAf f ai r s l i st ed a pendi ng l awsui t ( St at e Cour t Lawsui t ) he and

hi s wi f e had f i l ed i n Tuol umne Count y Super i or Cour t agai nst Bank

of Amer i ca and ReconTr ust t o enj oi n f or ecl osur e, f or decl ar at or y

r el i ef and f or an account i ng ( case no. CV 55686) .

I n August 2010, t he Tr ust ee f i l ed hi s f i nal r epor t

r ef l ect i ng t hat t her e wer e no non- exempt asset s of any val ue f or

hi m t o admi ni st er , l i qui dat e or di st r i but e. Lat er t hat same

year , i n November 2010, Pi neda f i l ed an Amended Schedul e B of

per sonal pr oper t y whi ch cont ai ned t he f ol l owi ng ent r y: Ci vi l

Lawsui t Agai nst Bank of Amer i ca, Gol dman Sachs, Bank of New Yor k

Mel l on Est i mat ed val ue 1 - 10 mi l l i on dol l ar s. He al so l i st ed

t hi s same asset on hi s Amended Schedul e C, but he di d not l i st

t her e any exempt i on val ue or any asset val ue. Pi neda never f i l edpr oof of ser vi ce r ef l ect i ng any ser vi ce of not i ce of hi s amended

schedul es, but hi s f or m not i ce of amended schedul es cont ai ned hi s

si gned cer t i f i cat i on st at i ng t hat he had gi ven not i ce of t he

f i l i ng of hi s schedul e amendment s t o t he Tr ust ee and al l ot her

i nt er est ed par t i es.

The Tr ust ee never amended hi s f i nal r epor t . Nor di d he

t ake any act i on r el at ed t o the cl ai ms agai nst Bank of Amer i ca and

ot her s unt i l J ul y 2011, when he si gned of f on a document ent i t l ed

St i pul at i on t o Abandon ( St i pul at i on To Abandon) whi ch Pi neda

appar ent l y pr epar ed. Among other t hi ngs, t he Tr ust ee st at ed i n

t he St i pul at i on To Abandon t hat he was aut hor i zi ng Pi neda t o


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3The December 2010 st i pul at i on f ur t her provi ded t hat ,because t he St ate Cour t Lawsui t essent i al l y concerned t he same

( cont i nued. . . )

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pr osecut e al l of t he cl ai ms al l eged i n t he Adver sary Pr oceedi ng

and al so t hat he was abandoni ng al l r i ght s t hat wer e t he subj ect

of t he Adver sary Pr oceedi ng. Af t er t he Tr ust ee si gned of f on t he

St i pul at i on To Abandon, Pi neda f i l ed i t i n t he Adver sar yProceedi ng.

B. Pinedas Adversary Proceeding

Meanwhi l e, Pi neda commenced t he Adversary Proceedi ng i n

August 2010. Over t he next year , he went t hr ough t hr ee ver si ons

of hi s compl ai nt . The f i r st one, f i l ed when he commenced t he

Adver sary Pr oceedi ng, cont ai ned t he f ol l owi ng t hr ee cl ai ms f or

r el i ef : ( 1) f or vi ol at i on of t he Feder al Fai r Debt Col l ecti on

Pr act i ces Act , Pub. L. No. 95- 109, 91 St at . 874 ( 1977) ( codi f i ed

at 15 U. S. C. 1692, et seq. ) ( Fed. FDCPA) ; ( 2) f or a

det er mi nat i on of t he val i di t y of Bank of Amer i ca s cl ai med l i en

agai nst t he Pr oper t y; and ( 3) f or f r aud. Pi neda conceded i n hi s

or i gi nal compl ai nt t hat he owed an obl i gat i on t o someone on

account of t he Loan, but he asser t ed t hat , as a r esul t of t hesecur i t i zat i on of hi s Loan and/ or because of cer t ai n payment s

def endant s al l egedl y recei ved f r om t he Tr oubl ed Asset Rel i ef

Progr am, or TARP, none of t he def endant s cont i nued t o have any

r i ght or ent i t l ement t o enf or ce t he Not e or t he Tr ust Deed.

C. Pinedas FAC

Pur suant t o st i pul at i ons bet ween t he par t i es f i l ed i n

December 2010 and J anuary 2011, Pi neda f i l ed hi s FAC i n Febr uary

2011. 3 The FAC gr eat l y el abor at ed on t he def endant s al l eged


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3( . . . cont i nued)subj ect mat t er as t he Adver sary Pr oceedi ng, t he par t i es agr eed t odi smi ss t he St at e Cour t Lawsui t wi t hout prej udi ce. Thebankrupt cy cour t s December 24, 2010 or der based on t he December2010 st i pul at i on di d not addr ess t hi s aspect of t he par t i es

st i pul at i on. That order mer el y set deadl i nes f or f i l i ng t he FACand t he response t her et o and set a cont i nued hear i ng dat e f or t hei ni t i al st at us conf er ence.

4The bankr upt cy cour t i ssued memor anda of deci si on i nconj unct i on wi t h i t s di smi ssal s of t he FAC and t he SAC. Thesememoranda i ncl uded detai l ed descr i pt i ons of both compl ai nt s andt hei r al l egat i ons. I n l i ght of our anal ysi s and r esol ut i on oft hi s appeal , no pur pose woul d be ser ved by our i ncl udi ng i n t hi sdeci si on a l engt hy descr i pt i on of t he al l egat i ons of ei t hercompl ai nt .

5Pi neda al l eged wi t hi n t he f our cl ai ms f or r el i ef t hat t hedef endant s had vi ol at ed t he f ol l owi ng Cal i f or ni a and f eder al l awsamong ot her s: ( 1) t he Tr ut h i n Lendi ng Act , 15 U. S. C. 1600, etseq. ; ( 2) Fed. FDCPA; ( 3) t he Real Est at e Set t l ement Pr ocedur esAct , 12 U. S. C. 2605( e) ; ( 4) Cal i f or ni a s Unf ai r Compet i t i onLaw, Cal . Bus. & Pr of s. Code 17200, et seq. ; ( 5) Cal Ci v. Code 2924( a) ( wr ongf ul f or ecl osur e) ; and ( 6) Cal . Ci v. Code 1709( f r aud and decei t ) .

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mi sconduct . 4 The FAC cont ai ns onl y f our cl ai ms f or r el i ef , f or

f r aud, br each of cont r act , unj ust enr i chment and decl ar at or y

r el i ef . But wi t hi n each cl ai m f or r el i ef Pi neda al l eged t hat t he

def endant s vi ol at ed a host of Cal i f or ni a and f eder al ( non-bankrupt cy) l aws. 5 These vi ol at i ons al l egedl y occur r ed as a par t

of t he f ol l owi ng act i vi t i es: ( 1) when Bank of Amer i ca or i gi nat ed

t he l oan; ( 2) when Bank of Amer i ca or i t s whol l y- owned subsi di ar y

Bank of Amer i ca Cor p. LP ( j oi nt l y, BOA) col l ect ed Pi neda s Loan

payment s; ( 3) when BOA pur por t ed t o sel l t he Loan t o Gol dman

Sachs, I nc. and/ or def endant Gol dman Sachs Mort gage Secur i t i es

Corp. ( j oi nt l y, Gol dman Sachs) ; ( 4) when Gol dman Sachs pai d BOA

f or or i gi nat i ng and pur por t i ng t o sel l t he Loan; ( 5) when Gol dman


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Sachs f or med Gol dman Sachs Ri sk Mor t gage Trust 2003- 09

( Tr ust ) ; ( 6) When Gol dman Sachs aggr egated t he Loan wi t h other

home l oans t o f or m a por t f ol i o of l oans t hat pur por t edl y became

pr oper t y of t he Tr ust ; ( 7) When Gol dman Sachs sol d f r act i onali nt er est s i n t he Tr ust t o t hi r d- par t y i nvest or s; ( 8) when BOA

r ef used t o pr oper l y, accur at el y and/ or t i mel y respond t o Pi neda s

r equest s f or a l oan modi f i cat i on, f or an account i ng, and f or

other i nf ormat i on r egardi ng t he Loan; and ( 9) when BOA and

ReconTr ust Company commenced f or ecl osur e proceedi ngs under t he

Tr ust Deed.

D. Dismissal of the FAC, and the Courts Warnings Regarding

Standing and Abstention

Al l of t he named def endant s ( col l ect i vel y, Def endant s)

f i l ed a mot i on t o di smi ss t he FAC, whi ch t he bankr upt cy cour t

gr ant ed wi t hout pr ej udi ce and wi t h l eave t o amend. On J une 24,

2011, t he bankr upt cy cour t ent ered a memorandum deci si on and

or der expl ai ni ng i n det ai l i t s r easoni ng f or di smi ssi ng t he FAC( FAC Di smi ssal Memor andum) . I n t he FAC Di smi ssal Memor andum,

t he bankrupt cy cour t i ni t i al l y poi nt ed out t hat , even t hough t he

FAC cont ai ned 28 pages and 131 paragr aphs of al l egat i ons, i t was

shor t on t he speci f i cs r egardi ng who har med Pi neda and how he was

harmed. I nst ead, much of t he FAC f ocused on how t he al l eged

conduct of Def endant s and others i nvol ved i n t he secondary

mor t gage market har med t hose who i nvest ed i n t hat market , caused

a nat i onwi de f i nanci al cri si s and pr eci pi t at ed a si gni f i cant dr op

i n r eal est at e val ues, i ncl udi ng t he val ue of Pi neda s Pr oper t y.

The bankrupt cy cour t l ooked at each of Pi neda s f our cl ai ms

f or r el i ef as wel l as many of t he al l eged vi ol at i ons of


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Cal i f or ni a and f eder al l aw and det er mi ned t hat Pi neda had not

st at ed any pl ausi bl e cl ai ms f or r el i ef . As t o each cl ai m and

al l eged vi ol at i on, t he cour t hel d t hat Pi neda had f ai l ed t o

al l ege essent i al el ement s.Mor e i mpor t ant l y f or our pur poses, t he bankr upt cy cour t

di scussed i n t he FAC Di smi ssal Memorandum Pi neda s apparent l ack

of st andi ng t o pr osecut e t he Adver sar y Proceedi ng and whether i t

mi ght be appr opr i at e f or t he cour t t o abst ai n under 28 U. S. C.

1334( c) ( 1) . Wi t h r espect t o st andi ng, t he cour t poi nt ed out

t hat Pi neda s cl ai ms agai nst t he Def endant s wer e pr oper t y of t he

est at e under 541( a) and t hat onl y t he Tr ust ee had st andi ng t o

pr osecut e t he cl ai ms on behal f of t he est at e. The cour t not ed

t hat , whi l e Pi neda had di scl osed t he exi st ence of t he cl ai ms on

hi s or i gi nal Schedul e C and hi s Amended Schedul e B, t he Tr ust ee

had not t aken any st eps t o f ormal l y abandon t he cl ai ms or t o

per mi t Pi neda t o pur sue t hem on behal f of t he est at e. The cour t

st at ed t hat i t woul d not r ul e on st andi ng gr ounds at t hat poi nt ,but i t advi sed Pi neda that he needed t o take act i on t o obt ai n

f r om t he Tr ust ee ei t her f or mal abandonment of t he cl ai ms or

aut hor i zat i on f or Pi neda t o pur sue t hem.

As f or di scr et i onar y abst ent i on under 28 U. S. C.

1334( c) ( 1) , t he cour t opi ned t hat i t was aut hor i zed t o sua

spont e consi der whet her i t shoul d exer ci se i t s di scret i on t o

abst ai n. The cour t noted t hat Pi neda al r eady had been gr ant ed

hi s chapt er 7 di schar ge and t hat t he Tr ust ee al r eady had i ssued a

noasset r epor t i ndi cat i ng t hat t her e wer e no assets t o

admi ni st er on behal f of t he est at e. Consequent l y, t he cour t

sai d, t here di d not appear t o be any reason f or t he bankrupt cy


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cour t t o exer ci se j ur i sdi ct i on over t he Adver sar y Pr oceedi ng,

except as a remnant of Pi neda s compl eted chapt er 7 case.

Accor di ngl y, t he cour t war ned Pi neda:

I f t he Pl ai nt i f f el ect s t o f i l e a second amendedcompl ai nt , he must be . . . pr epared t o addr ess whyt hi s cour t shoul d not abst ai n f r om hear i ng t hi sadversar y pr oceedi ng. No Bankr upt cy Code i ssues appeart o r emai n i n t hi s case, nor any asset s t o beadmi ni st er ed by the t r ust ee or t he Pl ai nt i f f t hr oughany pl an.

FAC Di smi ssal Memorandum ( J un. 24, 2011) at 32.

I n J ul y 2011, j ust bef or e he f i l ed hi s SAC, Pi neda at t empt ed

t o addr ess t he bankrupt cy cour t s st andi ng concer ns by obt ai ni ng

t he Tr ust ee s s i gnat ur e on t he St i pul at i on To Abandon and by

f i l i ng i t i n t he Adver sar y Pr oceedi ng. But t he bankrupt cy cour t

never ent ered any or der appr ovi ng t he St i pul at i on t o Abandon or

aut hor i zi ng t he Tr ust ee s abandonment of Pi neda s cl ai ms agai nst

t he Def endant s. Among other pr obl ems, t here was no pr oof of

servi ce i ndi cat i ng t hat ei t her t he Tr ust ee or Pi neda gave anyone

not i ce of t he Tr ust ee s pr oposed abandonment of Pi neda s cl ai ms.E. Pinedas SAC

Pi neda t hen f i l ed hi s SAC. The SAC st at ed si gni f i cant l y

f ewer al l egat i ons of gener al mi sconduct agai nst t he Def endant s,

but many of t he same t hemes f r omt he FAC were st i l l pr esent .

Fi r st , Pi neda al l eged t hat BOA as or i gi nat or of t he Loan l i ed t o

Pi neda about t he sour ce of f unds i t used t o make t he Loan and

l at er r ef used t o di scl ose t he t r ue sour ce of f unds f or t he Loan.

Second, Pi neda al l eged t hat BOA t wi ce pur por t ed t o assi gn t he

Loan cr eat i ng uncer t ai nt y as t o who owned t he Loan. Thi r d,

Pi neda al l eged t hat , as a r esul t of BOA s act i ons and a

successi on of pur por t ed owner s of t he Loan and t r ust ees of t he


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Tr ust , uncer t ai nty exi st ed as t o who was ent i t l ed t o enf or ce t he

Loan and who was ent i t l ed t o act as t hei r agent . And f our t h,

Pi neda al l eged t hat BOA s and ReconTrust s Loan enf orcement

act i vi t i es, i ncl udi ng t hei r commencement of nonj udi ci alf or ecl osur e pr oceedi ngs, wer e f r audul ent , i l l egal and f ul l of

i naccur aci es and pr ocedur al er r or s.

Based on t hese al l egat i ons, t he SAC cont ai ned t he f ol l owi ng

f our cl ai ms f or rel i ef : ( 1) f or decl arat ory rel i ef ; ( 2) f or

f or ecl osur e f r aud; ( 3) f or wr ongf ul f or ecl osur e; and ( 4) f or

r esci ssi on of cont r act .

The SAC s prayer f or r el i ef r equest ed t he f ol l owi ng: ( 1) an

evi dent i ar y hear i ng t o det er mi ne t he r i ght s and obl i gat i ons of

t he par t i es; ( 2) a f i ndi ng of f or ecl osur e f r aud gi vi ng r i se t o

puni t i ve damages; ( 3) a f i ndi ng of wr ongf ul f or ecl osur e;

( 4) r esci ssi on of cont r act based on l ack of consi der at i on and

mut ual assent ; ( 5) a decl ar at i on t hat t he Not e ef f ect i vel y was

unsecur ed; ( 6) puni t i ve damages; ( 7) a decl ar at i on t hatDef endant s had br eached var i ous agr eement s and had vi ol ated t he

Real Est at e Set t l ement Pr ocedur es Act and Cal i f or ni a s Unf ai r

Compet i t i on Law; ( 8) a f i ndi ng of f r audul ent f or ecl osur e agai nst

BOA and ReconTrust ; and ( 9) a f i ndi ng t he nei t her BOA nor

ReconTrust had aut hor i t y under Cal i f orni a l aw t o commence

f or ecl osur e pr oceedi ngs agai nst Pi neda.

F. Dismissal of the SAC, and the Courts Further Consideration

of Abstention

On Sept ember 26, 2011, t he Def endants moved t o di smi ss t he

SAC, and i n December 2011, t he bankr upt cy cour t grant ed t hat

mot i on. On December 6, 2011, t he bankr upt cy cour t i ssued a


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memor andum deci si on and or der expl ai ni ng i n det ai l i t s r easoni ng

f or di smi ss i ng t he SAC ( SAC Di smi ssal Memorandum) . I n t he SAC

Di smi ssal Memorandum, t he bankr upt cy cour t determi ned t hat Pi neda

had f ai l ed t o st at e any pl ausi bl e cl ai ms f or r el i ef i n hi s SAC.The cour t car ef ul l y eval uat ed each of t he SAC s cl ai ms f or r el i ef

and concl uded t hat each cl ai m f or r el i ef was mi ssi ng al l egat i ons

of one or more essent i al el ement s.

Mor e i mpor t ant l y, t he cour t once agai n r ai sed t he i ssue of

di scr et i onar y abst ent i on. The cour t not ed t hat i t pr evi ousl y had

r ai sed t he abst ent i on i ssue i n i t s ear l i er FAC Di smi ssal

Memorandum, t hat i t had di r ect ed Pi neda to addr ess t he abst ent i on

i ssue i f he f i l ed an SAC, and t hat Pi neda had not addr essed t he

abst ent i on i ssue ei t her i n hi s SAC or i n hi s opposi t i on t o t he

Def endant s di smi ssal mot i on. The cour t hel d t hat Pi neda s

Adver sar y Pr oceedi ng had nothi ng t o do wi t h hi s chapt er 7

bankrupt cy case, any of Pi neda s r i ght s as a chapt er 7 debt or , or

t he admi ni st r at i on of est at e asset s. The cour t f ur t her opi ned:The Pl ai nt i f f f ai l s t o provi de t he cour t wi t h anysubst ant i al ar gument s as t o why hi s l i t i gat i on of st at eand non- bankrupt cy i ssues shoul d be t r i ed i n t hi sspeci al i zed cour t r at her t han pr oper l y i n ei t her t hest at e cour t or di st r i ct cour t , each bei ng cour t s ofgener al j ur i sdi ct i on. Though bankrupt cy cour t sr egul ar l y pr esi de over mat t er s ar i si ng under st at e l aw,such i s done t o f ur t her t he pur poses of t he Bankrupt cyCode and st atut ory scheme pr ovi di ng f or debt ors andcr edi t or s enact ed by Congr ess.

SAC Di smi ssal Memorandum ( Dec. 6, 2011) , at p. 22.

On the one hand, t he bankr upt cy cour t st ated i n the SAC

Di smi ssal Memor andum t hat i t i s appr opr i at e f or t he cour t t o

abst ai n. I d. On t he ot her hand, t he cour t st at ed t hat i t woul d

i ssue an Or der t o Show Cause why t he cour t shoul d not abst ai n,


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t her eby i ndi cat i ng a wi l l i ngness t o gi ve Pi neda one l ast chance

t o addr ess t he i ssue and t o at t empt t o per suade t he cour t t hat

abst ent i on was i nappr opr i at e.

Consi st ent wi t h t he SAC Di smi ssal Memorandum, t he bankr upt cycourt ent ered t he Second Di smi ssal Or der on December 6, 2011,

gr ant i ng t he Def endant s mot i on t o di smi ss t he SAC. That or der

pr ovi ded f or : ( 1) t he di smi ssal of t he case wi t hout pr ej udi ce and

wi t hout l eave t o amend; and ( 2) t he i ssuance of an order t o show

cause why t he cour t shoul d not abst ai n under 28 U. S. C.

1334( c) ( 1) . I n addi t i on, t he SAC Di smi ssal Or der pr ohi bi t ed

Pi neda f r om f i l i ng anot her amended compl ai nt and f r om f i l i ng a

mot i on t o amend pendi ng t he hear i ng on t he order t o show cause.

G. Order to Show Cause re Abstention and Pinedas Response

The bankrupt cy cour t t hereaf t er i ssued i t s or der t o show

cause why i t shoul d not abst ai n f r om hear i ng t he Adver sary

Proceedi ng, and Pi neda f i l ed a memorandum of poi nt s and

aut hor i t i es expl ai ni ng why he t hought abst ent i on wasi nappr opr i ate. Ci t i ng McDani el v. ABN Amr o Mort g. Gr oup,

364 B. R. 644, 650 ( S. D. Ohi o 2007) , Pi neda st at ed t hat t her e wer e

t hi r t een f act or s t he cour t shoul d consi der bef or e abst ai ni ng

under 28 U. S. C. 1334( c) ( 1) . Pi neda cont ended t hat al l of t he

McDani el f act or s mi l i t at ed agai nst abst ent i on. We i dent i f y bel ow

each of t hese f act or s and t he reason ( i f any) Pi neda gave why

each f act or mi l i t at ed agai nst abst ent i on.

1. The effect or lack of effect on the efficient

administration of the estate if a court abstains

Accor di ng t o Pi neda, hi s cl ai ms agai nst t he Def endant s

i mpacted t he bankr upt cy est ate because no not i ce was gi ven t o


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6Thi s ar gument i s par t i cul ar l y i r oni c. The r ecor d r ef l ect st hat Pi neda f i l ed t he St i pul at i on To Abandon on behal f of t heTr ust ee but di d not f i l e any proof of ser vi ce al ong wi t h t hatst i pul at i on. Pi neda needed t o est abl i sh hi s standi ng t opr osecut e t he Adver sar y Pr oceedi ng, but hi s argument agai nstabst ent i on ser i ousl y under mi nes hi s ef f or t s t o est abl i sh hi sst andi ng.

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credi t or s or any ot her i nt er est ed par t i es of t he Tr ust ee s i nt ent

t o abandon as r ef l ect ed i n t he St i pul at i on To Abandon. 6

Pi neda f ur t her asser t ed t hat hi s bei ng subj ect ed t o

f i nanci al doubl e j eopar dy and t he cl oud on t i t l e t o t heProper t y al so i mpact ed t he est at e, but he di d not expl ai n how t he

est ate was i mpacted. Nor was any i mpact on t he est ate evi dent .

He al r eady had r ecei ved hi s chapt er 7 di schar ge f r om hi s

pr epet i t i on l i abi l i t i es and i t was obvi ous t he Tr ust ee had no

i nt ent i on of admi ni st er i ng t he Pr oper t y or t he Adver sar y

Proceedi ng cl ai ms.

Fi nal l y, Pi neda ment i ons cer t ai n al l egedl y i nconsi st ent

exhi bi t s and decl ar at i on t est i mony pr esent ed by t he Def endant s i n

t he cour se of hi s l i t i gat i on agai nst t hem, but once agai n Pi neda

di d not i n any way t i e these concer ns t o the bankr upt cy est at e.

2. The extent to which state law issues predominate over

bankruptcy issues

Pi neda di d not i dent i f y a si ngl e bankr upt cy cl ai m or i ssuef r om hi s SAC. I nst ead, Pi neda i n essence ar gued t hat t he

Tr ust ee s f ai l ure t o ef f ect i vel y abandon t he Adversar y Pr oceedi ng

cl ai ms meant t hat t hey t echni cal l y st i l l wer e pr oper t y of t he

est at e. Thus, Pi neda suggest ed t hat because t he Adver sary

Pr oceedi ng Cl ai ms wer e st i l l est at e pr oper t y, t hose cl ai ms

cl ai ms expl i ci t l y based on Cal i f or ni a and f eder al non- bankrupt cy


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l aw somehow became cl ai ms based on bankr upt cy l aw f or pur poses

of t hi s f act or .

3. The difficulty or unsettled nature of the applicable

state law

Accor di ng t o Pi neda, hi s compl ai nt pr esent ed no di f f i cul t or

unset t l ed st at e l aw i ssues.

4. The presence of a related proceeding commenced in state

court or other non-bankruptcy court

Accordi ng to Pi neda, t her e no l onger was any pendi ng act i on

i n st at e cour t . But he di d not pr esent anyt hi ng t o t he

bankrupt cy cour t demonst r at i ng that t he St at e Cour t Lawsui t

actual l y had been di smi ssed.

5. The jurisdictional basis, if any, other than 28 U.S.C.

1334

Pi neda di d not r eal l y gi ve any reason why t hi s f act or

mi l i t at ed agai nst abst ent i on. He mer el y r ei t er at ed hi s bel i ef

t hat bankrupt cy cour t j ur i sdi ct i on was appr opr i at e under28 U. S. C. 1334 and 157( b) ( 2) ( K) .

6. The degree of relatedness or remoteness of the

proceeding to the main bankruptcy case

Pi neda ar gued t hat t he Adver sar y Pr oceedi ng cl ai ms were

i nt er r el ated wi t h t he bankrupt cy case because the cl ai ms woul d i n

essence det er mi ne the i ssue of who was ent i t l ed t o enf or ce the

Loan. But Pi neda of f ered no expl anat i on why t hat i ssue was of

any rel evance t o t he bankr upt cy case, when Pi neda al r eady had

been di scharged and t he Trust ee obvi ousl y had no i nt ent i on of

admi ni st er i ng the Pr oper t y whi ch secur ed the Loan.


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7. The substance rather than form of an asserted core

proceeding

Accordi ng t o Pi neda, t he subst ance of t he cor e pr oceedi ng

woul d be t he det er mi nat i on of who was ent i t l ed t o enf or ce theLoan. However , Pi neda di d not i dent i f y any genui ne connect i on

between t hi s pur port edl y cor e pr oceedi ng and hi s bankr upt cy case.

8. The feasibility of severing state law claims from core

bankruptcy matters to allow judgments to be entered in state

court with enforcement left to the bankruptcy court

Pi neda asser t ed t hat t he pur por t edl y cor e cl ai ms coul d not

be sever ed f r om hi s st at e l aw cl ai ms because of t he t ai nt ed

document s submi t t ed by t he def endant s. Pi neda s asser t i on i s

i ncompr ehensi bl e, nonsensi cal , or bot h.

9. The burden on this court's docket

Accor di ng t o Pi neda, whi l e there mi ght be some bur den, t he

bankrupt cy cour t shoul d t ake i nt o account t he f act t hat i t

al r eady was ver y f ami l i ar wi t h hi s Adver sary Proceedi ng, wher easany st at e cour t pr esi di ng over t he mat t er woul d be st ar t i ng f r om

scr at ch. Pi neda i gnor es t he f act t hat , af t er over a year of

bankr upt cy cour t l i t i gat i on and af t er havi ng f i l ed t hr ee ver si ons

of hi s compl ai nt , hi s Adver sar y Pr oceedi ng had not got t en past

t he pl eadi ng st age. Nor had di scover y commenced. Even i f t he

bankrupt cy cour t had been wi l l i ng t o gi ve hi m another chance t o

amend hi s compl ai nt , t he bankrupt cy cour t l i t i gat i on was st i l l

ver y much j ust begi nni ng.


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10. The likelihood that the commencement of the proceeding

in bankruptcy court involves forum shopping by one of the

parties.

Pi neda cl ai med t her e was no i ndi cat i on of f or um shoppi ng onhi s par t . The bankrupt cy cour t f ound ot her wi se, as we di scuss

bel ow.

11. The existence of a right to a jury trial

Pi neda di d not di r ect l y answer t he quest i on of whet her any

of t he par t i es t o t he Adver sar y Pr oceedi ng st i l l mi ght cl ai m a

r i ght t o a j ur y t r i al . I nst ead, he mer el y st at ed t hat he had not

r equest ed a j ur y t r i al .

12. The presence in the proceeding of non-debtor parties

Pi neda di d not di r ect l y addr ess t hi s f act or ei t her . He

mer el y st at ed t hat [ n] o i ssues of non- debt or par t i es i s

pr esent l y a f act or . Pi neda i gnor ed t he f act t hat al l of t he

Def endant s wer e non- debt or part i es, and that none of t hem had

f i l ed pr oof s of cl ai ms or ot her wi se par t i ci pat ed i n hi sbankrupt cy case, except as par t i es t o t he adver sar y pr oceedi ng.

13. Any unusual or other significant factors

Pi neda di d not i dent i f y any unusual f act or s, but he di d

cl ai m t hat t he cour t coul d aut hor i ze hi m t o pr osecut e t he

Adver sary Pr oceedi ng on behal f of t he est at e as i f he wer e

debt or - i n- possessi on. Thi s i s si mpl y wr ong. Ther e i s no such

t hi ng as a chapt er 7 debt or i n possessi on.

H. The Abstention Hearing and the Abstention Ruling

On Febr uary 22, 2012, t he bankr upt cy cour t hel d a hear i ng on

t he Or der t o Show Cause dur i ng whi ch t he cour t engaged i n a

l engt hy col l oquy wi t h Pi neda r egar di ng t he pr opr i et y of


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abst ent i on. At t he concl usi on of t he col l oquy, t he cour t r ul ed

t hat i t was goi ng t o sust ai n i t s Or der t o Show Cause and t hat i t

was goi ng t o abst ai n f r om hear i ng the Adver sary Pr oceedi ng.

The cour t s r easoni ng suppor t i ng i t s abst ent i on r ul i ng i sset f or t h i n a mi nut e ent r y dat ed Febr uar y 22, 2012 ( Abst ent i on

Mi nut e Ent r y) . I n t he Abst ent i on Mi nut e Ent r y, af t er

summari zi ng t he pr ocedur al hi st ory of t he bankr upt cy case and t he

cont ent s of t he SAC, t he bankr upt cy cour t noted once agai n t hat

t he bankr upt cy case was compl et ed some t i me ago, when Pi neda

r ecei ved hi s di schar ge and when t he t r ust ee det er mi ned t hat t her e

wer e no assets wor t h admi ni st er i ng on behal f of t he est at e. The

cour t acknowl edged t hat t he Trust ee had not f ormal l y abandoned

t he Adver sary Pr oceedi ng cl ai ms, t hat t he St i pul at i on t o Abandon

was not ef f ect i ve t o abandon t hem f or mal l y, and so t he Adver sary

Pr oceedi ng cl ai ms t echni cal l y wer e st i l l est at e asset s. But t he

cour t f ound t hat , dur i ng t he more t han 21 mont hs t he bankr upt cy

case had been open, nei t her t he Trust ee nor any credi t ors hadshown any i nt er est i n havi ng the cl ai ms prosecut ed on behal f of

and f or t he benef i t of t he est at e. Hence, t he cour t r easoned, i t

was cl ear t hat t he Adver sar y Pr oceedi ng cl ai ms woul d be

pr osecut ed, i f at al l , by Pi neda f or hi s own per sonal benef i t .

Ci t i ng Chr i st ensen v. Tucson Est at es, I nc. ( I n r e Tucson Est at es,

I nc. ) , 912 F. 2d 1162, 1167 ( 9t h Ci r . 1990) , t he bankrupt cy cour t

st at ed t hat t he Ni nt h Ci r cui t had adopt ed f act or s t o gui de the

abst ent i on anal ysi s i dent i cal t o t he abst ent i on f act or s Pi neda

had dr awn f r omMcDani el . Set f or t h bel ow i s a summary of t he

cour t s consi der at i on of each of t hese f act or s.


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1. The effect or lack thereof on the efficient

administration of the estate if a Court recommends

abstention

The bankrupt cy cour t poi nted out t hat , by f i l i ng hi s noasset r epor t and by si gni ng of f on t he St i pul at i on t o Abandon,

t he Tr ust ee had i ndi cated many mont hs bef ore t hat he was f i ni shed

admi ni st er i ng t he bankrupt cy est at e. Consequent l y, t he

pr osecut i on of t he Adver sar y Pr oceedi ng cl ai ms woul d have no

bear i ng on est at e admi ni st r at i on regar dl ess of wher e and whet her

Pi neda pr osecut ed t he cl ai ms f or hi s own benef i t .

2. The extent to which state law issues predominate over

bankruptcy issues

Accordi ng t o the bankrupt cy cour t , t he SAC r ai sed no

bankrupt cy l aw i ssues. Mor eover , t he bankrupt cy cour t f ound, t he

Adver sar y Pr oceedi ng woul d not af f ect t he est ate i n any way.

3. The difficulty or unsettled nature of the applicable law

The bankrupt cy cour t agreed wi t h Pi neda t hat Cal i f or ni a l awgover ni ng f or ecl osur e pr ocedur es i s gener al l y wel l set t l ed.

However , t he cour t poi nt ed out t hat Pi neda s SAC di d not l i mi t

i t sel f t o an at t ack on t he f or ecl osur e pr ocedur es ut i l i zed by BOA

and ReconTr ust . Rat her , Pi neda at t empt ed t o assert i n t he SAC

r el at i vel y novel l egal t heor i es pur por t edl y ent i t l i ng hi m t o

i nval i dat e l i en r i ght s i f t he Def endant s ( 1) f ai l ed t o accur at el y

di scl ose t o hi m t he sour ce of f unds f or hi s Loan or

( 2) t r ansf er r ed t he r i ght s under t he Loan t o a mor t gage l oan

secur i t i zat i on t r ust.


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4. The presence of a related proceeding commenced in state

court or other nonbankruptcy court

The bankrupt cy cour t noted t hat , even i f t he Stat e Cour t

Lawsui t no l onger was pendi ng, t here was no bar t o Pi nedacommenci ng a new act i on i n st ate cour t .

5. The jurisdictional basis, if any, other than 28 U.S.C.

1334

The bankrupt cy cour t noted t hat Pi neda had not posi t ed any

basi s f or f eder al cour t j ur i sdi ct i on ot her t han 28 U. S. C. 1334.

6. The degree of relatedness or remoteness of the

proceeding to the main bankruptcy case

The bankrupt cy cour t f ound t hat t her e was no connect i on

between t he Adver sar y Proceedi ng and Pi neda s bankr upt cy case.

As t he bankrupt cy cour t put i t , t he Tr ust ee had demonst r at ed t hat

he had no i nt ent i on of ei t her pr osecut i ng t he Adver sary

Pr oceedi ng cl ai ms or ot her wi se admi ni st er i ng t hem f or t he benef i t

of t he est at e. The cour t al so ment i oned t hat Pi neda was notseeki ng t o r eor gani ze i n a chapt er 11 or r ehabi l i t at e i n a

chapt er 13.

7. The substance rather than form of an asserted core

proceeding

The bankrupt cy cour t r ul ed t hat none of t he Adver sar y

Pr oceedi ng cl ai ms const i t ut ed a cor e pr oceedi ng. Accor di ng t o

t he bankr upt cy cour t , t he Adver sary Pr oceedi ng was a r el at ed- t o

mat t er i n whi ch al l of t he cl ai ms were based on non- bankr upt cy

l aw and were based on event s t hat arose pr i or t o and/ or

i ndependent of Pi neda s bankr upt cy case.


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7I n t hi s r egar d, Pi neda s comment s at t he Febr uar y 22, 2012abst ent i on hear i ng seemed t o conf i r m t he cour t s f or um shoppi ngsuspi ci ons, as f ol l ows:

MR. PI NEDA: But I t hi nk i t ' s mor al l y wr ong, yourHonor , t o al l ow t he bank to basi cal l y - -

THE COURT: Then go t o cour t t hat proper l y hasj ur i sdi ct i on t o exerci se t he Stat e Cour t ' s - - Super i orCour t [ s] have gener al j ur i sdi ct i on wher e you can r ai sei t . I f you have a f eder al - -

MR. PI NEDA: They' ve al r eady t aken j udi ci al not i ce oft he bogus assi gnment . I ' m goi ng t o go i n t her e dead on


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8. The feasibility of severing state law claims from core

bankruptcy matters to allow judgments to be entered in state

court with enforcement left to the bankruptcy court

Accordi ng t o t he bankrupt cy cour t , Pi neda had not st at ed anycor e bankr upt cy cl ai ms t o sever .

9. The burden on [the bankruptcy court's] docket

The cour t st at ed t hat i t s docket was si gni f i cant l y i mpact ed

and t hat , wi t h al l of t he mat t er s i t had genui nel y ar i si ng under

Ti t l e 11, ar i si ng i n cases under Ti t l e 11, or i n r el at ed- t o

mat t er s act ual l y i mpact i ng t he bankrupt cy case, i t was i n no

posi t i on t o hear t he Adver sar y Proceedi ng.

10. The likelihood that the commencement of the proceeding

in bankruptcy court involves forum shopping by one of the

parties

The bankrupt cy cour t f ound t hat Pi neda was seeki ng t o f or um

shop based on t wo gr ounds: ( 1) t he advant ages of t he aut omat i c

st ay, and ( 2) an appar ent bel i ef t hat he was l ess l i kel y t opr evai l i f he pr osecut ed hi s cl ai ms i n st at e cour t . 7


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7( . . . cont i nued)ar r i val .

Hr g Tr . ( Feb 22, 2012) at 16: 6- 14.

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11. The existence of a right to a jury trial

The bankrupt cy cour t acknowl edged t hat t he Def endant s had

not f i l ed an answer yet , so i t was unknown whether t hey woul d

cl ai m a r i ght t o a j ur y t r i al . But t he bankr upt cy cour t poi nt edout t hat t he cl ai ms wer e t he t ype f or whi ch j ur y t r i al r i ght s

exi st.

12. The presence in the proceeding of nondebtor parties

Cur i ousl y, t he cour t st at ed t hat t he Adver sary Pr oceedi ng

onl y i nvol ved Pi neda and BOA. The bankr upt cy cour t di d not

ment i on t he ot her Def endant s or t he f act t hat none of t he

Def endant s had f i l ed a pr oof of cl ai m or ot her wi se par t i ci pat ed

i n Pi neda s bankrupt cy case, except as def endant s i n t he

Adver sar y Pr oceedi ng.

Separ at e and apar t f r om t he Tucson f act or s, t he bankrupt cy

cour t al so not ed t he conundr um Pi neda f aced r egar di ng st andi ng.

As t he cour t put i t , t he Adver sar y Pr oceedi ng cl ai ms t echni cal l y

wer e st i l l est at e pr oper t y and appar ent l y woul d r emai n est at epr oper t y unt i l t he bankrupt cy case was cl osed. As such, Pi neda

st i l l l acked st andi ng t o pr osecut e t he cl ai ms. Whi l e Pi neda

coul d have at t empt ed t o cur e hi s l ack of st andi ng by taki ng

addi t i onal st eps t owar ds f or mal abandonment of t he cl ai ms, t hi s

onl y woul d have served t o f ur t her under mi ne any l i nger i ng

t echni cal connect i on between t he cl ai ms and hi s bankr upt cy case.

At t he concl usi on of i t s abst ent i on anal ysi s, t he bankrupt cy


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cour t st at ed:

For t hi s bankrupt cy cour t t o cont i nue wi t h t hel i t i gat i on woul d have i t make a det er mi nat i on on new,unchar t ed st at e l aw t heor i es, i nval i dat e not es anddeeds of t r ust , t er mi nat e r i ght s i n r eal pr oper t y, and

award act ual and puni t i ve damages t o [ Pi neda] , al l ofwhi ch has no i mpact on t he bankr upt cy est at e. To do sodi sr egar ds t he Cal i f or ni a Super i or Cour t s as t he st at ecour t of gener al j ur i sdi ct i on t o addr ess t hose i ssues,and i nt r udes bankrupt cy j ur i sdi ct i on when i t has noi mpact on t he bankr upt cy case.

Abst ent i on Mi nut e Ent r y ( Feb. 22, 2012) at p. 6.

On Febr uar y 27, 2012, t he bankrupt cy cour t ent er ed i t s

Abst ent i on Or der . I n addi t i on t o abst ai ni ng f r om hear i ng t he

Adver sary Pr oceedi ng pur suant t o 28 U. S. C. 1334( c) ( 1) , t he

cour t al so di r ect ed t he cl er k of cour t t o cl ose t he adver sar y

pr oceedi ng and pr ohi bi t ed Pi neda f r om f i l i ng any f ur t her

compl ai nt s or mot i ons seeki ng r el i ef f r om t he bankrupt cy cour t .

I. Pinedas Filing of a Notice of Appeal and a Motion for Leave

to Appeal

On December 20, 2011, Pi neda t i mel y f i l ed a not i ce of appealf r omt he December 6, 2011 Second Di smi ssal Or der . Pi neda di d not

f i l e ei t her a new not i ce of appeal or an amended not i ce of appeal

af t er t he cour t ent er ed t he Abst ent i on Or der . But i n r esponse t o

an or der f r om t hi s Panel i ssued on Febr uar y 16, 2012, quest i oni ng

t he f i nal i t y of t he Second Di smi ssal Or der , Pi neda f i l ed on

March 7, 2012, a mot i on f or l eave t o appeal . We di scuss bel ow

t he i mpl i cat i ons of t hese f i l i ngs on our j ur i sdi cti on.

JURISDICTION

Gener al l y speaki ng, we have j ur i sdi ct i on t o r evi ew f i nal

bankr upt cy cour t orders and j udgment s under 28 U. S. C. 158, and

t he bankrupt cy cour t s j ur i sdi ct i on i s based on 28 U. S. C. 1334.


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We f ur t her addr ess our j ur i sdi ct i on and t he bankrupt cy cour t s

j ur i sdi ct i on i n t he di scussi on sect i on of t hi s deci si on.

ISSUES

1. Do we have j ur i sdi ct i on t o r evi ew t he Abst ent i on Or der ?2. Di d t he bankr upt cy cour t abuse i t s di scr et i on by abst ai ni ng

f r omhear i ng t he Adver sar y Pr oceedi ng under 28 U. S. C.

1334( c) ( 1) ?

3. Do any of Pi neda s ar gument s on appeal j ust i f y r ever sal ?

STANDARDS OF REVIEW

We must r ai se sua spont e i ssues r egar di ng our appel l at e

j ur i sdi ct i on, and we r evi ew t hose i ssues de novo. See Bel l i v.

Temki n ( I n r e Bel l i ) , 268 B. R. 851, 853- 54 ( 9t h Ci r . BAP 2001) .

We revi ew t he bankrupt cy cour t ' s Abst ent i on Or der f or an

abuse of di scr et i on. I n r e Bankr. Pet i t i on Pr epar er s who ar e not

Cer t i f i ed Pur suant t o Requi r ement s of Ar i z. Sup. Ct . ,

307 B. R. 134, 140 ( 9t h Ci r . BAP 2004) . Under t he abuse of

di scr et i on st andar d of r evi ew, we f i r st "det er mi ne de novowhet her t he [ bankr upt cy] cour t i dent i f i ed t he cor r ect l egal r ul e

t o appl y t o t he r el i ef r equest ed. " Uni t ed St at es v. Hi nkson,

585 F. 3d 1247, 1262 ( 9t h Ci r . 2009) ( en banc) . And i f t he

bankr upt cy cour t i dent i f i ed t he cor r ect l egal r ul e, we t hen

det er mi ne under t he cl ear l y er r oneous st andar d whet her i t s

f actual f i ndi ngs and i t s appl i cat i on of t he f act s t o t he r el evant

l aw wer 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 be dr awn f r om t he f act s i n t he recor d. "

I d. ( i nt er nal quot at i on mar ks omi t t ed) .


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DISCUSSION

A. Appellate Jurisdiction

As ment i oned above, Pi neda t i mel y f i l ed a not i ce of appeal

f r om t he Second Di smi ssal Or der on December 20, 2011. However ,t he Second Di smi ssal Or der was not a f i nal or der because i t di d

not f ul l y and f i nal l y di spose of t he Adver sar y Pr oceedi ng. The

Second Di smi ssal Or der expl i ci t l y l ef t open f or f ut ur e

det er mi nat i on t he i ssue of abst ent i on, and t he bankrupt cy cour t

cl ear l y ant i ci pat ed f ur t her pr oceedi ngs on t he abst ent i on i ssue

at t he t i me i t ent er ed t he Second Di smi ssal Or der . Consequent l y,

t he Second Di smi ssal Or der was i nt er l ocut or y not f i nal

because i t di d not mani f est t he cour t s i nt ent t o be i t s f i nal

act i n t he mat t er . See Br own v. Wi l shi r e Cr edi t Cor p.

( I n r e Br own) , 484 F. 3d 1116, 1120 ( 9t h Ci r . 2007) ; Mul l en v.

Haml i n ( I n r e Haml i n) , 465 B. R. 863, 868 ( 9t h Ci r . BAP 2012) .

We gener al l y l ack j ur i sdi ct i on t o hear appeal s f r om

i nt er l ocut or y or der s unl ess we gr ant l eave t o appeal . SeeGi esbr echt v. Fi t zger al d ( I n r e Gi esbr echt ) , 429 B. R. 682, 687

( 9t h Ci r . BAP 2010) . On Febr uar y 16, 2012, t he Panel i ssued an

or der advi si ng Pi neda of t he f i nal i t y def ect and di r ect i ng hi m

ei t her t o f i l e a mot i on f or l eave t o appeal or t o t ake ot her

act i on t o est abl i sh t hat t he Panel had j ur i sdi ct i on over hi s

appeal . I n r esponse, Pi neda f i l ed bot h a mot i on f or l eave t o

appeal and a responsi ve br i ef expl ai ni ng why he bel i eved t he

Second Di smi ssal Or der was a f i nal or der . He f i l ed t hese

document s wi t h t he Panel on March 6, 2012, and i n the adver sar y

proceedi ng on March 7, 2012.

I n r el evant par t , t he l eave mot i on r ef er ences t he bankrupt cy


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cour t s abst ent i on r ul i ng and r espect f ul l y r equest s t hi s

Honor abl e Panel gr ant l eave t o appeal t he abst ent i on r ul i ng.

Af t er r evi ewi ng Pi neda s r esponse, our mot i ons panel i ssued an

or der deemi ng t he f i nal i t y def ect sat i sf i ed as a r esul t of t hebankrupt cy cour t s ent r y of t he Abst ent i on Or der on Febr uar y 27,

2012.

The ent r y of t he Abst ent i on Or der cur ed t he f i nal i t y

def ect associ at ed wi t h Pi neda s appeal of t he Second Di smi ssal

Or der . See Par ks v. Dr ummond ( I n r e Par ks) , 475 B. R. 703, 706

( 9t h Ci r . BAP 2012) ; see al so Rai ns v. Fi nn ( I n r e Rai ns) ,

428 F. 3d 893, 901 ( 9t h Ci r 2005) ; Cat o v. Fr esno Ci t y, 220 F. 3d

1073, 1074- 75 ( 9t h Ci r . 2000) ; Dannenberg v. Sof t ware Tool works,

I nc. , 16 F. 3d 1073, 1075 ( 9t h Ci r . 1994) .

Nonet hel ess, even i f t he ent r y of t he Abst ent i on Or der

ef f ect i vel y gave us j ur i sdi ct i on t o r evi ew t he Second Di smi ssal

Or der , our r evi ew of t hat or der woul d be moot unl ess Pi neda al so

appeal ed t he Abst ent i on Or der . I n ot her wor ds, unl ess we al sohave j ur i sdi ct i on over t he Abst ent i on Or der , t her e i s no way we

coul d pr ovi de any meani ngf ul r el i ef wi t h r espect t o any rul i ngs

i n t he Second Di smi ssal Or der . See, e. g. , I n r e Par ks, 475 B. R.

at 706; Omoto v. Ruggera ( I n re Omoto) , 85 B. R. 98, 99100 (9t h

Ci r . BAP 1988) .

I n or der t o appeal t he Abst ent i on Or der , Pi neda shoul d have

f i l ed pur suant t o Rul es 8001 and 8002 ei t her a new not i ce of

appeal or an amended not i ce of appeal wi t hi n t he t i me l i mi t s

speci f i ed i n Rul e 8002. I n t he absence of ei t her , our

j ur i sdi ct i on woul d be l i mi t ed t o r evi ewi ng t he Second Di smi ssal

Or der . See, e. g. , Uni t ed Comput er Sys. , I nc. v. AT & T Cor p. ,


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8Rul e 8001( a) st at es i n r el evant par t :

The not i ce of appeal shal l ( 1) conf or m subst ant i al l y t ot he appr opr i at e Of f i ci al For m, ( 2) cont ai n t he names ofal l par t i es t o the j udgment , or der , or decr ee appeal edf r om and the names, addresses, and tel ephone numbers oft hei r r espect i ve at t or neys, and ( 3) be accompani ed byt he pr escr i bed f ee.

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298 F3d 756, 761 ( 9t h Ci r . 2002) ( l i mi t i ng r evi ew t o t i mel y

appeal ed j udgment ) ; Paci f i c Empl oyer s I ns. Co. v. Domi no' s Pi zza,

I nc. , 144 F3d 1270, 1278 ( 9t h Ci r . 1998) ( same) ; see gener al l y

Rul e 8002( b) ( 4) ( A par t y i nt endi ng t o chal l enge an al t er at i on oramendment of t he j udgment , or der , or decr ee shal l f i l e a not i ce,

or an amended not i ce, of appeal wi t hi n the t i me pr escr i bed by

t hi s Rul e 8002 measured f r om t he ent r y of t he or der di sposi ng of

t he l ast such mot i on out st andi ng. ) .

On t he ot her hand, bef or e the expi r at i on of t he t i me to

appeal t he Abst ent i on Or der , Pi neda f i l ed hi s mot i on f or l eave t o

appeal . The l eave mot i on expl i ci t l y r equest ed t hat t he Panel

gr ant Pi neda per mi ssi on t o appeal t he Abst ent i on Or der . Whi l e

not f or mal l y ent i t l ed a not i ce of appeal , t her e i s l i t t l e doubt

t hat Pi neda expr essed an i nt ent t o appeal t he Abst ent i on Or der .

And whi l e hi s l eave mot i on di d not sat i sf y al l of t he

r equi r ement s f or a not i ce of appeal under Rul e 8001( a) , 8 t hat

r ul e does not i ndi cat e t hat t hose r equi r ement s necessar i l y appl yt o an amended not i ce of appeal .

I n l i ght of t he above ci r cumst ances, t he l i ber al

const r uct i on gi ven t o not i ces of appeal , and t he gener al pol i cy

f avor i ng deci si ons on t he mer i t s, we wi l l const r ue Pi neda s l eave

mot i on as an amended not i ce of appeal seeki ng r evi ew of t he


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9

We not e that t he appel l ant s i n Smi t h and Br annan were pr ose l i t i gant s. We al so not e t hat Pi neda, whi l e nomi nal l y a pr o sel i t i gant , was f or mer l y an at t or ney. I t i s quest i onabl e whet hert he l i ber al i t y af f or ded t o pr o ses wi t hout f or mal l egal t r ai ni ngshoul d be ext ended t o Pi neda, who obvi ousl y had such t r ai ni ng andwho obvi ousl y knew how t o f i l e a not i ce of appeal . I n t he f i nalanal ysi s, however , t hese concer ns ar e not suf f i ci ent t o cause ust o depar t f r om our concl usi on t hat we have j ur i sdi ct i on t o r evi ewt he Abst ent i on Or der .

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Abst ent i on Or der . See, e. g. , Smi t h v. Bar r y, 502 U. S. 244,

248- 50 ( 1992) ( const r ui ng pr o se s appel l at e br i ef as a pot ent i al

not i ce of appeal ) ; Br annan v. U. S. , 993 F. 2d 709 ( 9t h Ci r . 1993)

( const r ui ng pr o se s l et t er chal l engi ng di st r i ct cour t or der as anot i ce of appeal ) . 9 Even t hough Pi neda i nt ended t he l eave mot i on

t o ser ve as a r equest f or l eave to appeal under Rul e 8003( a) ,

t hi s does not mean t hat t he l eave mot i on coul d not al so serve as

an amended not i ce of appeal f or pur poses of Rul es 8001 and 8002.

See Smi t h, 502 U. S. at 249.

Accor di ngl y, we wi l l pr oceed t o exami ne the mer i t s of t he

Abst ent i on Or der .

B. Review of Abstention Order

By way of di st r i ct cour t r ef er r al , bankrupt cy cour t s have

or i gi nal but not excl usi ve j ur i sdi ct i on over al l ci vi l

pr oceedi ngs ar i si ng under t i t l e 11, or ar i si ng i n or r el at ed t o

cases under t i t l e 11. See 28 U. S. C. 1334( b) ; 28 U. S. C.

157( a) . A pr oceedi ng ar i ses under t i t l e 11 i f i t s asser t s ar i ght t o r el i ef cr eat ed by t he Bankrupt cy Code. See Cal .

Franchi se Tax Bd. v. Wi l shi r e Cour t yar d ( I n r e Wi l shi r e

Cour t yar d) , 459 B. R. 416, 424 ( 9t h Ci r . BAP 2011) . A pr oceedi ng

ar i ses i n a case under t i t l e 11 i f i t i s an admi ni st r at i ve


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10Rul e 5011( b) at one t i me pr ohi bi t ed bankrupt cy cour t s f r oment er i ng f i nal abst ent i on or der s, but t hat Rul e was amended i n1991 expl i ci t l y f or t he pur pose of endi ng t hat pr ohi bi t i on. SeeAdvi sor y Commi t t ee Notes Accompanyi ng Rul e 5011. I n addi t i on,cour t s have hel d t hat bankrupt cy cour t s have aut hor i t y to ent er


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mat t er t hat onl y coul d occur i n a bankr upt cy case and woul d have

no exi st ence out si de of bankrupt cy. See i d. ; Kr asnof f v.

Mar shack ( I n r e Gener al Car r i er s Cor p. ) , 258 B. R. 181, 189 ( 9t h

Ci r . BAP 2001) . Meanwhi l e, a pr oceedi ng t ypi cal l y i s consi der edr el at ed t o a case under t i t l e 11 pr oceedi ng i f i t pot ent i al l y

wi l l have some i mpact on t he bankr upt cy case or t he bankr upt cy

est at e, but i t does not i nvoke a r i ght t o r el i ef creat ed by t he

Bankrupt cy Code and coul d exi st out si de of bankrupt cy. I d.

I n an ef f or t t o def i ne whi ch t ypes of pr oceedi ngs

non- Ar t i cl e- I I I bankrupt cy j udges coul d hear and det er mi ne by

f i nal j udgment , Congr ess cr eat ed a non- exhaust i ve l i st of

so- cal l ed cor e pr oceedi ngs. See 28 U. S. C. 157( b) ( 2) ; see

al so Exec. Benef i t s I ns. Agency v. Ar ki son ( I n r e Bel l i ngham I ns.

Agency, I nc. ) , 702 F. 3d 553, 565 ( 9t h Ci r . 2012) .

Not wi t hst andi ng t he br oad j ur i sdi ct i onal gr ant af f or ded t o

bankr upt cy cour t s under 28 U. S. C. 1334( b) and 157( a) , Congr ess

al so has gi ven bankrupt cy cour t s di scr et i onar y aut hor i t y toabst ai n f r om hear i ng cer t ai n mat t er s:

. . . not hi ng i n t hi s secti on pr event s a di st r i ct cour ti n t he i nt er est of j ust i ce, or i n t he i nt er est ofcomi t y wi t h St at e cour t s or r espect f or St at e l aw, f r omabst ai ni ng f r om hear i ng a par t i cul ar pr oceedi ng ar i si ngunder t i t l e 11 or ar i si ng i n or r el at ed t o a case undert i t l e 11.

28 U. S. C. 1334( c) ( 1) . 10


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10( . . . cont i nued)f i nal or der s f or di scr et i onar y abst ent i on under 28 U. S. C.

1334( c) ( 1) , even i n non- cor e pr oceedi ngs. See Hol t zcl aw v.St at e Far m Fi r e and Casual t y Co. ( I n r e Hol t zcl aw) , 131 B. R. 162,164 ( E. D. Cal . 1991) ( ci t i ng cases) . I n any event , by notobj ect i ng t o t he bankrupt cy cour t ent er i ng a f i nal deci si on andby al l of hi s other conduct bef or e t he bankrupt cy cour t and onappeal , Pi neda has f or f ei t ed any obj ect i on he ot her wi se mi ghthave made to the bankrupt cy cour t s ent r y of a f i nal abst ent i onor der . See I n r e Bel l i ngham I ns. Agency, I nc. , 702 F. 3d at566- 70.

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Her e, t he bankrupt cy cour t consi der ed Pi neda s SAC, t he

r el evant ci r cumst ances f r om Pi neda s bankrupt cy case and t he

per mi ssi ve abst ent i on f act or s r eci t ed i n I n r e Tucson Est at es,

I nc. , 912 F. 2d at 1167. I t t her eaf t er concl uded t hat i t woul dabst ai n under 28 U. S. C. 1334( c) ( 1) .

I t bear s r epeat i ng at t hi s poi nt t hat , under t he abuse of

di scret i on st andar d of r evi ew, i f t he bankr upt cy cour t i dent i f i ed

t he cor r ect l egal r ul e t o appl y, we onl y wi l l over t ur n i t s

deci s i on i f i t s f act ual f i ndi ngs or i t s appl i cat i on of f act s to

t he l aw wer e i l l ogi cal , i mpl ausi bl e or wi t hout suppor t i n

i nf er ences t hat may be dr awn f r om f act s i n t he r ecor d. Hi nkson,

585 F. 3d at 1262.

I n t hi s case, t he bankrupt cy cour t appl i ed t he cor r ect l aw.

I t consi der ed, among ot her f act or s, t he Tucson Est at es f act or s.

We al r eady have gone over i n detai l both Pi neda s assessment of

t hese f act or s and t he bankrupt cy cour t s assessment of t hese

f act or s. I t suf f i ces f or us to say her e t hat we di sagr ee wi t hmost of Pi neda s assessment and t hat we agr ee wi t h subst ant i al l y

al l of t he bankrupt cy cour t s assessment . We cer t ai nl y do not

see anythi ng i n t he bankrupt cy cour t s assessment t hat i s


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i l l ogi cal , i mpl ausi bl e or wi t hout suppor t i n t he r ecor d. Nor

does anyt hi ng i n Pi neda s openi ng appeal br i ef persuade us

ot her wi se, as we expl ai n bel ow.

Fur t her mor e, we al so agr ee wi t h t he bankrupt cy cour t soverarchi ng assessment t hat t he Adver sar y Proceedi ng woul d not

have any i mpact on ei t her t he bankr upt cy est ate or t he bankr upt cy

case, gi ven t hat Pi neda al r eady had r ecei ved hi s di schar ge and

gi ven t hat t he Trust ee had cl ear l y demonst r ated t hat he had no

i nt er est i n admi ni st er i ng ei t her t he Pr oper t y or t he Adver sar y

Pr oceedi ng cl ai ms on behal f of and f or t he benef i t of t he est at e.

I n shor t , we see no r ever si bl e er r or i n t he bankrupt cy

cour t s abst ent i on r ul i ng.

C. Pinedas Arguments on Appeal

I n addi t i on t o Pi neda s di f f er i ng assessment of t he Tucson

Est at es f act or s, whi ch we addr essed above, Pi neda s openi ng

appeal br i ef makes f our other argument s why we shoul d r everse t he

bankrupt cy cour t s abst ent i on or der . We wi l l addr ess each oft hese ar gument s i n t ur n.

1. 28 U.S.C. 157(b)(2)(K)

Fi r st , Pi neda has argued on appeal t hat t he bankrupt cy cour t

er r ed i n ent er i ng t he Abst ent i on Or der because t he bankrupt cy

cour t di d not acknowl edge that hi s Adver sary Pr oceedi ng i n par t

sought a det er mi nat i on of t he val i di t y of l i ens agai nst t he

Proper t y. Consequent l y, Pi neda ar gues, t he Adver sary Proceedi ng

was a cor e pr oceedi ng under 28 U. S. C. 157( b) ( 2) ( K) , so t he

bankr upt cy cour t shoul d not have abst ai ned.

But Pi neda s r el i ance on t he nomi nal l y cor e nat ur e of hi s

l i en val i di t y cl ai m i s mi spl aced. Sect i on 1334( c) ( 1) and t he


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Tucson Est at es f act or s per mi t di scr et i onar y abst ent i on even when

t he l i t i gat i on i ncl udes cor e as wel l as non- cor e cl ai ms. I ndeed,

one of t he Tucson Est at es f act or s cal l ed upon t he bankrupt cy

cour t t o assess t he subst ance r at her t han t he f or m of anyasser t ed cor e cl ai m.

Her e, as r ef l ect ed i n t he r ecor d, t he bankrupt cy cour t was

wel l awar e t hat , t echni cal l y, al l of t he Adver sar y Pr oceedi ng

cl ai ms and t he Pr oper t y wer e st i l l pr oper t y of t he est at e, so t he

l i en val i di t y cl ai m at l east nomi nal l y woul d qual i f y as a

28 U. S. C. 157( b) ( 2) ( K) cor e pr oceedi ng. But t he cour t al so

consi der ed t he f act t hat nei t her t he Pr oper t y nor t he Adver sary

Proceedi ng cl ai ms were goi ng to have any i mpact on ei t her t he

bankr upt cy case or t he bankr upt cy est ate because t he bankr upt cy

case essent i al l y was compl et ed. Pi neda al r eady had r ecei ved hi s

chapt er 7 di schar ge, and t he Tr ust ee had made i t cl ear t hat he

had no i nt ent i on of admi ni st er i ng t he Pr oper t y, t he Adver sary

Pr oceedi ng cl ai ms or any ot her est at e asset s. Consequent l y, t hebankr upt cy cour t f ound t hat t here was no subst ance to Pi neda s

so- cal l ed cor e cl ai m. We cannot say t hat t hi s f i ndi ng was

i l l ogi cal , i mpl ausi bl e or wi t hout suppor t i n t he r ecor d.

2. Violation of Stay

Second, Pi neda has argued on appeal t hat t he bankr upt cy

cour t er r ed i n ent er i ng t he Abst ent i on Or der because he has a

cl ai m agai nst t he Def endant s pur suant t o 362( k) f or vi ol at i on

of t he aut omat i c st ay. Accor di ng t o Pi neda, somet i me i n ear l y

2011, t he Def endant s r eschedul ed a f or ecl osure sal e on t he

Proper t y f or Mar ch 15, 2011. Pi neda now asser t s t hat he i s

ent i t l ed t o damages under 362( k) because t he aut omat i c st ay i n


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hi s bankr upt cy case was st i l l i n ef f ect .

Assumi ng wi t hout deci di ng t hat Pi neda has a cl ai m f or r el i ef

under 362( k) , t hi s ar gument st i l l f ai l s. None of Pi neda s

compl ai nt s ever at t empt ed t o st at e a cl ai m f or r el i ef under 362( k) . Nor di d Pi neda ment i on t hi s pr ospect i ve cl ai m i n hi s

r esponse to t he or der t o show cause r e abst ent i on. Nor di d he

ment i on i t at t he abst ent i on hear i ng. Si mpl y put , Pi neda di d not

pr esent hi s pr ospect i ve 362( k) cl ai m t o the bankrupt cy cour t

f or consi der at i on, so we wi l l not consi der i t her e on appeal .

We t ypi cal l y wi l l not consi der i ssues r ai sed f or t he f i r st

t i me on appeal when t he bankr upt cy cour t had no oppor t uni t y t o

consi der t hem. See Uni t ed St udent Ai d Funds, I nc. v. Espi nosa,

559 U. S. 260, __ _ n. 9, 130 S. Ct . 1367, 1376 n. 9 ( 2010) ( "We need

not set t l e t hat quest i on, however , because t he par t i es di d not

r ai se i t i n t he cour t s bel ow. ") ; Scovi s v. Henr i chsen

( I n r e Scovi s) , 249 F. 3d 975, 984 ( 9t h Ci r . 2001) ( hol di ng t hat

cour t woul d not consi der i ssue r ai sed f or t he f i r st t i me onappeal absent except i onal ci r cumst ances) . Nor wi l l we consi der

f act s and document s not bef ore t he bankr upt cy court . See Oyama

v. Sheehan ( I n r e Sheehan) , 253 F. 3d 507, 512 n. 5 ( 9t h Ci r .

2001) ; Ki r schner v. Uni den Corp. of Am. , 842 F. 2d 1074, 107778

( 9t h Ci r . 1988) . As stat ed by t he Ni nt h Ci r cui t i n Ki r schner ,

We ar e her e concer ned onl y wi t h t he r ecor d bef ore t he t r i al

j udge when hi s deci si on was made. Ki r schner , 842 F. 2d at 1077

( quot i ng Uni t ed St at es v. Wal ker , 601 F. 2d 1051, 1055 ( 9t h Ci r .

1979) ) .

Pi neda cont ends t hat except i onal ci r cumst ances j ust i f y our

consi der at i on of hi s pr ospect i ve 362( k) cl ai m i n t he f i r st


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i nst ance. But we are unpersuaded t hat t here are any

ci r cumst ances, except i onal or ot her wi se, t hat woul d j ust i f y our

consi der at i on of t hi s cl ai m. To t he cont r ar y, al l of t he

r el evant ci r cumst ances mi l i t at e agai nst such consi der at i on.Pi neda has admi t t ed t hat he knew of t he al l eged st ay vi ol at i on i n

or around March 2011. Even t hough he f i l ed hi s SAC i n August

2011, he di d not i ncl ude i n t he SAC hi s pr ospect i ve 362( k)

cl ai m. He al so di d not r equest l eave t o f ur t her amend hi s

compl ai nt t o add t hat cl ai m af t er he f i l ed t he SAC.

We acknowl edge t hat , i n December 2011, when the bankrupt cy

cour t i ssued t he Second Di smi ssal Or der , t he cour t pr ohi bi t ed

Pi neda f r om t her eaf t er f i l i ng anot her amended compl ai nt or f r om

r equest i ng l eave t o do so, at l east unt i l t he cour t hear d t he

or der t o show cause r e abst ent i on. But Pi neda has not expl ai ned

why he coul d not have amended hi s compl ai nt t o add t hat cl ai m

bef ore December 2011, especi al l y when he has admi t t ed t o knowi ng

of t he al l eged st ay vi ol at i on i n or ar ound Mar ch 2011. Evenaf t er December 2011, by way of t he or der t o show cause r e

abst ent i on, t he bankrupt cy cour t di r ect ed Pi neda t o f i l e a

r esponsi ve br i ef expl ai ni ng al l r easons why he t hought abst ent i on

was i nappr opr i at e. Pi neda coul d have ment i oned hi s pr ospect i ve

362( k) cl ai m i n t hat br i ef , or at l east at t he abst ent i on

hear i ng, but he di d not do so. Accor di ngl y, we wi l l not consi der

t he pr ospect i ve 362( k) cl ai m as pot ent i al gr ounds f or r ever sal

of t he Abst ent i on Or der .

3. Bias/Due Process

Thi r d, Pi neda has ar gued on appeal t hat t he cour t was bi ased

agai nst hi m, and as a r esul t of t hat bi as he was deni ed due


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pr ocess. As a t hr eshol d mat t er , we not e t hat Pi neda i s emphat i c

he i s not ar gui ng t hat t he bankrupt cy j udge had a dut y t o recuse

hi msel f . I n hi s r epl y br i ef on appeal , Pi neda st at es:

Appel l ees [ si c] counsel s ar gument of Appel l ant sr equest f or r ecusal i s . . . mi spl aced. Appel l ant si ssue of vi ol at i on of a f ai r hear i ng has beenmi sconst r ued by Appel l ees [ si c] counsel as a r equestf or r ecusal .

Apl t Repl y Br . ( J un. 18, 2012) at p. 4 ( emphasi s added) . Pi neda

al so st at es:

The Honor abl e Ronal d H. Sar gi s [ si c] deci si ons havebeen f avor abl e t o bot h si des. Appel l ant s cl ai ms ofvi ol at i on of due pr ocess r i ght t o f ai r hear i ng i nvol ves

Appel l ee s submi ssi on of f al se decl ar at i on andi nt ent i onal vi ol at i on of [ ] 362.

I d. at n. 2.

Consequent l y, Pi neda has wai ved any r ecusal argument he

otherwi se coul d have made on appeal . See Bur net t v. Resurgent

Capi t al Ser vs. ( I n r e Bur net t ) , 435 F. 3d 971, 975- 76 ( 9t h Ci r .

2006) ; Gol den v. Chi cago Ti t l e I ns. Co. ( I n r e Choo) , 273 B. R.

608, 613 ( 9t h Ci r . BAP 2002) .As f or Pi neda s due pr ocess cl ai m, due pr ocess r equi r es

r easonabl e not i ce and a meani ngf ul opport uni t y t o be hear d. See

Mul l ane v. Cent . Hanover Bank & Trust Co. , 339 U. S. 306, 314

( 1950) ; see al so Mat hews v. El dr i dge, 424 U. S. 319, 333 (1976)

( "The f undament al r equi r ement of due pr ocess i s t he oppor t uni t y

t o be hear d at a meani ngf ul t i me and i n a meani ngf ul manner . " ) ;

Ber r y v. U. S. Tr ust ee ( I n r e Sust ai t a) , 438 B. R. 198, 210 ( 9t h

Ci r . BAP 2010) , af f ' d, 460 Fed. Appx. 627 ( 9t h Ci r . 2011) ( "pr i or

t o sanct i oni ng a par t y, t he cour t must pr ovi de t he par t y to be

sanct i oned wi t h par t i cul ar i zed not i ce t o compor t wi t h due

pr ocess. " )


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Here, Pi neda had an abundance of not i ce and opport uni t y t o

be hear d on t he abst ent i on i ssue. The bankrupt cy cour t r ai sed

t he abst ent i on i ssue sever al t i mes, i ncl udi ng but not l i mi t ed t o

i n the FAC Di smi ssal Memor andum, i n the SAC Di smi ssal Memor andumand i n t he or der t o show cause r e abst ent i on. Each t i me, t he

bankr upt cy cour t asked Pi neda t o expl ai n why abst ent i on was

i nappr opr i at e. The bankrupt cy cour t al so hel d hear i ngs on t he

FAC, on t he SAC and on the or der t o show cause r e abst ent i on

dur i ng whi ch Pi neda had t he oppor t uni t y t o or al l y ar gue t he

abst ent i on i ssue. I n sum, Pi neda had mont hs of not i ce and a

number of hear i ngs t o addr ess t he abst ent i on i ssue. Thi s i s wel l

beyond t he l evel of not i ce and oppor t uni t y f or hear i ng t hat due

pr ocess r equi r ed.

Whi l e not ent i r el y cl ear , Pi neda appar ent l y cont ends t hat

t he bankr upt cy j udge s al l eged bi as r ender ed t he not i ce and

hear i ngs meani ngl ess. We di sagr ee. Pi neda has not poi nt ed us t o

anythi ng i n t he recor d t hat woul d l ead us t o concl ude that t hej udge was bi ased agai nst Pi neda. Pi neda pr i mar i l y poi nt s t o t wo

event s t hat he cont ends est abl i sh bi as. One of t hese was t he

cour t s st at ement at a hear i ng as f ol l ows:

Her e' s t he ot her quest i on I had f or t he two of you.Thi s i s st i l l si t t i ng i n a Chapter 7, probabl y get t i ngcl ose to a di smi ssal dat e, but t her e was a request f ora TRO.

I s the aut omat i c st ay not i n ef f ect i n t hi s case? Ordo you j ust say, J udge, I know t he case wi l l cl ose andt he aut omat i c st ay i s goi ng t o go away, so I j ust wantt o go ahead and gi ve you a heads up and l et ' s getst ar t ed on t he i nj unct i on.

Hr g Tr . ( Apr i l 6, 2011) at 55: 12- 20.

Accordi ng t o Pi neda, t he bankrupt cy cour t demonst r at ed i t s


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bi as because i t was of f er i ng pot ent i al excuses f or t he

Def endant s al l eged st ay vi ol at i on. We di sagr ee. I n par t , t he

hear i ng was hel d t o addr ess Pi neda s r equest f or a t empor ar y

r est r ai ni ng or der t o pr event a f or ecl osur e on t he Pr oper t y. Theonl y l ogi cal const r uct i on of t he cour t s st at ement , t aken i n

cont ext , i s t hat t he cour t was perpl exed why Pi neda needed a

r est r ai ni ng or der when t he aut omat i c st ay or di nar i l y shoul d have

been i n ef f ect and nor mal l y woul d have bar r ed f or ecl osure

pr oceedi ngs agai nst t he Propert y. I f anythi ng, t he comment

hel ped Pi neda because i t suggest ed t o Pi neda anot her pot ent i al

gr ound f or chal l engi ng t he Def endant s act i ons: a pot ent i al

act i on f or vi ol at i on of t he aut omat i c st ay.

I n any event , t he cour t had l egi t i mat e gr ounds f or i nqui r i ng

r egar di ng t he st at us of t he aut omat i c st ay. I f t he st ay was

st i l l i n ef f ect , Pi neda had no i mmedi at e need f or a t empor ar y

r est r ai ni ng or der .

Pi neda f ur t her cont ends t hat t he bankrupt cy cour t al sodemonst r ated i t s bi as because i t never enf or ced Rul e 7007. 1,

whi ch i n r el evant par t r equi r es any par t y who i s a cor por at i on t o

f i l e a di scl osur e st at ement i dent i f yi ng any cor por at i on t hat owns

10% or mor e of i t s st ock. But a pr ocedur al omi ssi on of t hi s

nat ur e si mpl y does not amount t o a showi ng of bi as by i t sel f . I f

Pi neda had f i l ed a mot i on r equest i ng any sor t of r el i ef based on

t he Def endant s noncompl i ance wi t h Rul e 7007. 1, and i f t he

bankrupt cy cour t had deni ed t hat r el i ef , t he bankrupt cy cour t s

af f i r mat i ve r ef usal t o enf or ce Rul e 7007. 1 mi ght have r ai sed some

l egi t i mat e concer ns. But Pi neda has not poi nt ed us t o anythi ng

i n t he r ecor d r ef l ect i ng t hat t he cour t af f i r mat i vel y r ef used t o


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11Pi neda al so ar gues t hat , because the bankrupt cy cour t di dnot enf or ce Rul e 7007. 1 sua spont e, t hat f ai l ur e by i t sel f i s

r ever si bl e er r or . For t he same r eason we r ej ect ed above Pi neda sbi as argument based on Rul e 7007. 1, we al so rej ect hi s r ever si bl eer r or argument based on Rul e 7007. 1.

12For i nst ance, on page 23 of hi s openi ng appeal br i ef ,Pi neda st at ed: The cour t ' s or der pr ohi bi t i ng Appel l ant t he r i ghtt o pur sue r el i ef f or Appel l ees [ si c] i nt ent i onal vi ol at i on of11 U. S. C. 362( a) const i t ut es an abuse of di scr et i on and al soer r or , as a mat t er of l aw.

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enf orce Rul e 7007. 1. Nor have we our sel ves f ound anyt hi ng i n t he

r ecor d al ong t hese l i nes. As a r esul t , we do not per cei ve any

conduct whi ch demonst r ates bi as. 11

4. Prohibition Against Future Filings

Fi nal l y, whi l e Pi neda di d not devot e any si gni f i cant por t i on

of hi s appel l at e br i ef i ng t o t he i ssue, Pi neda does compl ai n i n

passi ng about t he pr ovi si on i n t he bankrupt cy cour t s Abst ent i on

Or der pr ohi bi t i ng hi m f r om f i l i ng any f ur t her compl ai nt s or

mot i ons seeki ng r el i ef f r om t he bankrupt cy cour t . 12 Whi l e t he

bankrupt cy cour t s pr ohi bi t i on seems br oad i n i sol at i on, we hol d

t hat i t must be const r ued i n t he cont ext i n whi ch i t was made and

l i mi t ed on t hat basi s. We const r ue t hi s pr ohi bi t i on as onl y

appl yi ng t o t he Adver sar y Pr oceedi ng and t he Adver sar y Pr oceedi ng

cl ai ms. Gi ven t hat l i mi t ed const r uct i on of t he pr ohi bi t i on and

gi ven our hol di ng t hat t he bankrupt cy cour t pr oper l y abst ai ned

f r om hear i ng t he Adver sary Pr oceedi ng cl ai ms, we hol d t hat t he

bankrupt cy cour t di d not commi t r ever si bl e er r or by i ncl udi ng t hepr ohi bi t i on i n i t s Abst ent i on Or der .


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13On August 9, 2012, Pi neda f i l ed i n t he BAP Cl er k s Of f i cea r equest t o suppl ement t he r ecor d. That r equest mi ght be morepr oper l y char act er i zed as a not i ce of suppl ement al aut hor i t i es.Regardl ess of how we character i ze i t , we hereby DENY t hatr equest . The suppl ement al aut hor i t y ci t ed i n t he r equest i si r r el evant t o bot h t he ar gument s i n Pi neda s openi ng br i ef and t o

CONCLUSION

For t he reasons set f or t h above, we AFFI RM. 13

Documents

In re: Walter R. Pineda, 9th Cir. BAP (2013)