In re: Rodolfo Velasquez

FILED 1 NOT FOR PUBLICATION FEB 24 2015 2 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. NC-14-1237-TaPaJu ) 6 RODOLFO VELASQUEZ, ) Bk. No. 14-30344 ) 7 Debtor. ) Adv. No. 14-03031 ______________________________) 8 ) RODOLFO VELASQUEZ, ) 9 ) Appellant, ) 10 ) v. ) MEMORANDUM* 11 ) BANK OF AMERICA, N.A, ) 12 ) Appellee. ) 13 ______________________________) 14 Submitted Without Oral Argument** on February 19, 2015 15 Filed - February 24, 2015 16 Appeal from the United States Bankruptcy Court 17 for the Northern District of California 18 Honorable Dennis Montali, Bankruptcy Judge, Presiding 19 Appearances: Rodolfo Velasquez, pro se, on brief; Andrea M. Hicks, Monique Jewett-Brewster and Katherine 20 Keating of Bryan Cave LLP on brief for appellee Bank of America, N.A. 21 22 * 23 This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may 24 have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8024-1(c)(2). 25 ** 26 After examination of the briefs and record, and after notice to the parties, in an order entered October 30, 2014, the 27 Panel unanimously determined that oral argument was not needed for this appeal. See Fed. R. Bankr. P. 8019(b); 9th Cir. BAP 28 Rule 8019-1. 1 Before: TAYLOR, PAPPAS, and JURY, Bankruptcy Judges. 2 3 Chapter 131 debtor Rodolfo Velasquez appeals from the 4 bankruptcy court’s dismissal of his adversary proceeding against 5 Bank of America N.A. We AFFIRM. 6 FACTS 7 The Debtor filed a chapter 13 petition and his schedules.2 8 The Debtor, however, did not file a Statement of Current Monthly 9 Income and Means Test Calculation (“B22 Form”). As a result, 10 the bankruptcy court issued an order (“Order”) providing for 11 automatic case dismissal unless on or before April 21, 2014, the 12 Debtor filed the B22 Form or obtained either a filing extension 13 or an order excusing the filing. 14 The Debtor’s schedules reflected ownership of real property 15 located in San Francisco, California (the “Property”). Bank of 16 America N.A. (“BOFA”) holds obligations secured by deeds of 17 trust against the Property. 18 Notwithstanding the Order, the Debtor did not focus 19 exclusively on filing his B22 Form and complying with the Order; 20 instead, he also commenced an adversary proceeding against BOFA, 21 alleging a number of California state law claims. It was the 22 Debtor’s fourth action against BOFA. BOFA promptly moved to 23 24 1 Unless otherwise indicated, all chapter and section 25 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532. 26 2 We exercise our discretion to take judicial notice of 27 documents electronically filed in the bankruptcy case. See Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R. 28 227, 233 n.9 (9th Cir. BAP 2003). 2 1 dismiss the adversary proceeding under Civil Rule 12(b)(6). 2 The “drop dead date” under the Order came and went without 3 further action by the Debtor. As a result, the bankruptcy court 4 dismissed the chapter 13 case on April 22, 2014. Following 5 dismissal of the bankruptcy case, the bankruptcy court sua 6 sponte dismissed the adversary proceeding (“Adversary Dismissal 7 Order”). It determined, based on the chapter 13 dismissal, that 8 the interests of economy, convenience, fairness, and equity 9 weighed in favor of declining to exercise jurisdiction over the 10 adversary proceeding. While it expressly made no determination 11 on the merits of the motion to dismiss, the bankruptcy court 12 also noted that BOFA’s motion to dismiss appeared well taken. 13 The Debtor timely appealed from the Adversary Dismissal Order. 14 The Debtor subsequently filed the B22 Form in the chapter 15 13 case and moved for reconsideration of the chapter 13 case 16 dismissal; he asserted that he complied with the Order by 17 mailing the B22 Form in mid-April. While the bankruptcy court 18 did not agree that the mailing date was dispositive, it 19 ultimately granted the Debtor’s motion and vacated the chapter 20 13 case dismissal order. To the Panel’s knowledge, the chapter 21 13 case remains pending. 22 JURISDICTION 23 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 24 §§ 1334 and 157(b)(2)(B) and (K). We have jurisdiction under 25 28 U.S.C. § 158. 26 ISSUE 27 Whether the bankruptcy court abused its discretion in 28 declining to exercise jurisdiction over the adversary 3 1 proceeding. 2 STANDARD OF REVIEW 3 We review the bankruptcy court’s decision to decline to 4 exercise jurisdiction over an adversary proceeding for an abuse 5 of discretion. Carraher v. Morgan Elec., Inc. (In re Carraher), 6 971 F.2d 327, 328 (9th Cir. 1992). A bankruptcy court abuses 7 its discretion if it applies the wrong legal standard, 8 misapplies the correct legal standard, or if its factual 9 findings are illogical, implausible, or without support in 10 inferences that may be drawn from the facts in the record. See 11 TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832 12 (9th Cir. 2011) (citing United States v. Hinkson, 585 F.3d 1247, 13 1262 (9th Cir. 2009) (en banc)). 14 DISCUSSION 15 Dismissal of an underlying bankruptcy case does not 16 automatically divest the bankruptcy court of jurisdiction over a 17 related adversary proceeding seeking recovery on state law 18 theories. In re Carraher, 971 F.2d at 328. In deciding whether 19 to retain jurisdiction, the bankruptcy court must consider 20 economy, convenience, fairness, and comity. Id. 21 The record shows that the bankruptcy court appropriately 22 applied the correct legal standard. Citing In re Carraher, it 23 considered and weighed the pertinent interests in the context of 24 a dismissed bankruptcy case and an adversary proceeding 25 consisting solely of state law claims.3 In particular, the 26 3 27 To the extent the bankruptcy court opined that issue preclusion possibly barred the Debtor’s claims, such observation 28 (continued...) 4 1 bankruptcy court noted that the adversary proceeding was then 2 pending for only one month and determined that dismissal would 3 not cause undue delay. Nothing in the record suggests an abuse 4 of discretion. 5 All of the Debtor’s arguments on appeal relate to the 6 allegations in the adversary complaint; that is, BOFA’s alleged 7 improper conduct and the United States Trustee’s alleged 8 obligation to prosecute the adversary proceeding. These 9 arguments concern the merits of the adversary proceeding and, 10 thus, are beyond the scope of this appeal. Therefore, we do not 11 address them. 12 To the extent the Debtor argues that the bankruptcy court 13 was required to sua sponte vacate the Adversary Dismissal Order 14 after reinstating the chapter 13 case, we reject the argument. 15 As a litigant, the Debtor was responsible for prosecuting and 16 defending his position in the adversary proceeding. The Debtor 17 bore the burden of moving for reconsideration of the Adversary 18 Dismissal Order; he did not do so. His successful 19 reconsideration motion reinstating the chapter 13 case was not 20 filed in the adversary proceeding and did not specifically 21 request reinstatement of the adversary proceeding. The 22 bankruptcy court was not required to vacate the Adversary 23 Dismissal Order in the absence of a motion from the Debtor. 24 CONCLUSION 25 Based on the foregoing, we AFFIRM. 26 3 27 (...continued) was dicta, as it expressly stated that it made no determination 28 on the merits of BOFA’s motion to dismiss. 5