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IN RE CHRISTIANSON

United States District Court, S.D. California


September 15, 2005.

In re ROGER C. CHRISTIANSON, Debtor. ROGER C. CHRISTIANSON, Appellant,
v.
BERNADETTE SHAYOTA, Appellee.

The opinion of the court was delivered by: DANA M. SABRAW, District Judge

ORDER AFFIRMING BANKRUPTCY COURT'S ORDER DENYING MOTION FOR CONTEMPT
Pending before the Court is an appeal from a minute order of the United States Bankruptcy Court, the Honorable James W. Meyers presiding, entered on September 28, 2004. The challenged minute order denied Appellant's motion for contempt against Appellee and her counsel. For the reasons discussed below, the order is AFFIRMED.

I.

  FACTUAL AND PROCEDURAL BACKGROUND

  In 1994, Creditor-Appellee Bernadette Shayota ("Shayota" or Appellee") obtained a judgment in the amount of $79,742.27 against Debtor-Appellant Roger C. Christianson ("Debtor" or "Appellant") in San Diego Superior Court. Shayota then recorded an abstract of judgment, thereby encumbering Christianson's residence at 2496 Colinas Paseo, El Cajon, California, 92018 (the "Property").

  On September 12, 1995, Christianson commenced his voluntary Chapter 13 bankruptcy case. On April 30, 1997, Shayota filed her Proof of Claim in the bankruptcy case in the amount of the state court judgment plus interest for a total of $103,664.95. Christianson objected to Shayota's claim, but the bankruptcy court eventually allowed it, and thereafter entered Christianson's discharge.

  In October 2000, Christianson filed a motion to avoid Shayota's lien in the bankruptcy case. On March 21, 2002, the bankruptcy court denied the motion, and stated Shayota "may proceed to execution on her state court judgment against Debtor and the Property." (In re Christianson, Case No. 95-09833-LA, March 21, 2002 Order at 5) (strikeout in original). The Ninth Circuit Bankruptcy Appellate Panel affirmed that decision on October 20, 2003, and the Ninth Circuit dismissed Christianson's subsequent appeal.

  On February 13, 2004, Shayota filed a Notice of Renewal of Judgment in San Diego Superior Court. In response, Christianson filed a motion to vacate the renewal of judgment. To resolve that motion, the Superior Court directed the parties to seek clarification from the bankruptcy court on two issues: (1) the effect of the 2001 discharge of Christianson's debts in bankruptcy on the bankruptcy court's March 21, 2002 Order stating Shayota may proceed to execution on her state court judgment against the Property, and (2) whether the renewal of judgment adversely affects Christianson or Shayota's rights.

  On May 20, 2004, Shayota filed the motion for clarification. The bankruptcy court clarified its March 21, 2002 Order on July 8, 2004.

  On August 30, 2004, Christianson filed a motion for contempt in the bankruptcy court against Shayota and her counsel arguing that Shayota's renewal of the judgment violated the bankruptcy court's discharge order. The bankruptcy court denied that motion in a minute order dated September 28, 2004. Christianson now appeals that ruling. II.

  DISCUSSION

  The parties agree the issue in this appeal is whether the bankruptcy court erred in denying Christianson's motion for contempt. Neither party addresses in detail whether this Court has jurisdiction to hear this appeal or the appropriate standard of review. Nevertheless, the Court considers each of these issues below.

  A. Jurisdiction

  Title 28 U.S.C. § 158(a) and Federal Rule of Bankruptcy Procedure 8001(a) provide a mechanism by which a party to a bankruptcy proceeding may appeal an order of the United States Bankruptcy Court to the district court or to a Bankruptcy Appellate Panel. Appellant elected to have this Court hear the appeal, as permitted by 28 U.S.C. § 158(c)(1)(a) and Federal Rule of Bankruptcy Procedure 8001(e).

  This Court has jurisdiction over appeals from final orders of a bankruptcy court pursuant to 28 U.S.C. § 158(a)(1). A "final" order is one which ends litigation, or disposes of a complete claim for relief, and leaves nothing for the court to do but execute the judgment. See In re Four Seasons Properties, Inc., 979 F.2d F.2d 1358, 1362 (9th Cir. 1992). The challenged order in this case consists of a denial of a motion for contempt, which is a final order. See 10-9020 Collier on Bankruptcy ¶ 9020.04 (Lawrence P. King et al. Eds., 15th ed. rev. 2002) ("Contempt orders, like other orders resulting from contested matters, are final orders subject to appeal.") Consequently, this Court has jurisdiction to consider the merits of the appeal pursuant to 28 U.S.C. § 158(a)(1).

  B. Standard of Review

  A bankruptcy court's decision to grant or deny a motion for contempt is reviewed for abuse of discretion. Oliner v. Kontrabecki, 305 B.R. 510, 521 (N.D. Cal. 2004). An abuse of discretion is "a plain error, discretion exercised to an end not justified by the evidence, a judgment that is clearly against the logic and effect of the facts as found." Wing v. Asarco, Inc., 114 F.3d 986, 988 (9th Cir. 1997). Nonetheless, any determination underlying the bankruptcy court's denial of a motion for contempt is reviewed under the standard that applies to that determination: the underlying factual findings are reviewed for clear error and conclusions of law are reviewed de novo. Ting v. AT&T, 319 F.3d 1126, 1134-35 (9th Cir.), cert. denied, 540 U.S. 811 (2003); Biodiversity Legal Found. v. Badgley, 309 F.3d 1166, 1176 (9th Cir. 2002). A lower court's decision evidences "clear error" when the reviewing court has "a definite and firm conviction that a mistake has been committed." Easley v. Cromartie, 532 U.S. 234, 242 (2001); McLure v. Thompson, 323 F.3d 1233, 1240 (9th Cir.), cert. denied by McClure v. Belleque, 540 U.S. 1051 (2003). As noted above, de novo review means this Court views the case from the same position as the bankruptcy court. See League of Wilderness Defenders/Blue Mountains Biodiversity Project v. Forsgren, 309 F.3d 1181, 1183 (9th Cir. 2002).

  C. Denial of Motion for Contempt

  As mentioned above, Christianson filed a motion for contempt against Shayota and her counsel on the ground that Shayota's renewal of judgment violated the bankruptcy court's discharge order. "`The standard for finding a party in civil contempt is well settled: The moving party has the burden of showing by clear and convincing evidence that the contemnors violated a specific and definite order of the court.'" Oliner, 305 B.R. at 520 (quoting F.T.C. v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999)). Here, the bankruptcy court implicitly found Shayota's attempted execution of her state court judgment against Christianson's real property was not avoidable by Christianson in the discharge order, therefore her renewal of that judgment was not a contemptuous act.

  In an effort to show that decision was an abuse of discretion, Christianson argues Shayota's renewal of the judgment was a violation of 11 U.S.C. § 524(a)(2).*fn1 Specifically, he asserts Shayota's renewal of the judgment was a "continuation of an action[,]" which is enjoined by Section 524(a)(2). However, Section 524(a)(2) enjoins the continuation of an action "as a personal liability of the debtor[.]" 11 U.S.C. § 524(a)(2). Here, Shayota applied for a renewal of her judgment pursuant to Forms EJ 190 and EJ 195, each of which is pre-printed and pre-authorized by the Judicial Council of California. These forms do not provide a space for explaining any limitations on the judgment, and on their face, do not prevent Shayota from pursuing the subject debt "as a personal liability of the debtor." However, it is evident Shayota and her counsel do not intend to enforce the judgment against anything other than the Property, and especially not Christianson in his personal capacity. Indeed, Shayota's counsel acknowledged that if she attempted to enforce the judgment on anything other than the Property, Christianson would have "a remedy of going into state court, quashing the levy pursuant to the bankruptcy court orders, and getting attorney's fees or whatever for an improper levy and bringing a contempt motion in bankruptcy court at that time." (In re Christianson, Case No. 95-09833-LA, Mot. for Contempt Hr'g Tr. 11, Sep. 28, 2004.) The bankruptcy court also held, in denying Christianson's earlier motion, that Shayota may proceed with execution on her judgment against "the Property." (In re Christianson, Case No. 95-09833-LA, March 21, 2002 Order at 5.) The court did not authorize enforcement of the judgment in any other way.

  Thus, although the renewed judgment, on its face, could be construed as an action against Christianson in his personal capacity, which would subject Shayota to contempt sanctions, it is clear from the record that the bankruptcy court and all parties understood its enforcement would be limited to the Property. As such, the renewed judgment, in substance, is not an action against Christianson personally, and it is not enjoined by Section 524(a)(2). It is simply the legal mechanism by which Shayota could renew her original judgment, so as to preserve her rights to execute the judgment (as limited by the bankruptcy court) for an additional ten-year period.*fn2 Absent such renewal, Shayota would lose her right to enforce the judgment against Christianson's real property. See Cal. Civ. P. Code § 683.020(c) ("any lien created by an enforcement procedure pursuant to the judgment is extinguished" upon the expiration of 10 years after the date of entry of the judgment). The bankruptcy court's determination in favor of Shayota was therefore not an abuse of discretion.

  The sole remaining argument Christianson raises to make this showing is that Shayota's renewal of the judgment violates the stay provision of the bankruptcy code. In support, Christianson relies on In re Lobherr, 282 B.R. 912 (C.D. Cal. 2002). In that case, the court found that a creditors' renewal of a state court judgment was a violation of the automatic stay provision of 11 U.S.C. § 362(a)(1). 282 B.R. at 916. However, the creditors in Lobherr applied for renewal of their judgment before the bankruptcy court discharged the debtor. Id. at 913-14. Here, Shayota applied for and received a renewal of her state court judgment after the bankruptcy court entered its discharge order. Because the discharge order lifted the automatic stay, see 11 U.S.C. § 362(c), Shayota's renewal of her state court judgment was not a violation of Section 362(a)(1). Accordingly, this argument does not show the bankruptcy court abused its discretion in denying Christianson's motion for contempt.*fn3

  III.

  CONCLUSION AND ORDER

  For these reasons, the order of the bankruptcy court is hereby AFFIRMED. The Clerk of Court shall enter judgment accordingly.

  IT IS SO ORDERED.

20050915

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