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Garibay v. American Home Mortgage Corp.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


November 13, 2009

CYNTHIA GARIBAY, AN INDIVIDUAL, PLAINTIFF,
v.
AMERICAN HOME MORTGAGE CORP., A NEW YORK CORPORATION, WELLS FARGO HOME MORTGAGE, INC., A CALIFORNIA CORPORATION & DOES 1 THROUGH 20, DEFENDANTS.

The opinion of the court was delivered by: Hayes, Judge

ORDER

On July 7, 2009, Plaintiffs initiated this action by filing the Complaint in this Court. (Doc. # 1).

On October 29, 2009, Defendant Wells Fargo Home Mortgage, Inc. filed a Motion to Dismiss Or Alternatively Motion for a More Definite Statement ("Motion to Dismiss"). (Doc. # 5).

On October 29, 2009, Defendant American Home Mortgage Corp. filed a "Suggestion of Bankruptcy" with this Court. (Doc. # 8). The Suggestion of Bankruptcy notified the Court that on August 6, 2007, American Home Mortgage Corp. filed a voluntary petition with the United States Bankruptcy Court of the District of Delaware, Bankruptcy case number 07-11051.

Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a), operates as an automatic stay of the commencement or continuation of a judicial proceeding against the debtor, commenced prior to the filing of bankruptcy. However, "[i]n the absence of special circumstances, stays pursuant to section 362(a) are limited to debtors and do not include non-bankrupt co-defendants." Ingersoll-Rand Fin. Corp. v. Miller Mining Co., Inc., 817 F.2d 1424, 1427 (9th Cir. 1987) (citations omitted). The Ninth Circuit explained that under "special circumstances," the bankruptcy court may extend to stay to other entities pursuant to 11 U.S.C. § 105(a) ("The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title."). Ingersoll-Rand Fin. Corp., 817 F.2d at 1427. The Ninth Circuit held that in "the absence of any order from the bankruptcy court staying proceedings as to the [non-bankrupt co-defendants]," a plaintiff's action may proceed against the non-bankrupt co-defendants. Id.

No filing in this Court has indicated that the bankruptcy stay which applies to Defendant American Home Mortgage Corp. has been extended to co-Defendant Wells Fargo Home Mortgage, Inc.

IT IS HEREBY ORDERED that the action in this Court is STAYED as to Defendant American Home Mortgage Corp. only. This action is NOT STAYED as to Plaintiff's claims against all other Defendants.

Any opposition to the pending Motion to Dismiss (Doc. # 5) must be filed no later than December 4, 2009. Any reply must be filed no later than December 11, 2009. There will be no oral argument on the Motion to Dismiss.

Defendant American Home Mortgage Corp. is ORDERED to notify the Court in writing of any changes in the bankruptcy case relevant to this action, including but not limited to a discharge or dismissal of the bankruptcy case. The Clerk of the Court shall mail a copy of this Order to counsel for Defendant American Home Mortgage Corp., as listed in the Suggestion of Bankruptcy. (Doc. # 8 at 2).

WILLIAM Q. HAYES United States District Judge

20091113

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