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Chepel v. Law Office of Frederick S. Cohen

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA


November 2, 2010

IGOR CHEPEL; ROOF VERA CHEPEL, AS GUARDIAN AD LITEM FOR MINORS, ERICK CHEPEL, JASON CHEPEL, AND ASHLEY CHEPEL, PLAINTIFFS,
v.
THE LAW OFFICE OF FREDERICK S. COHEN; FREDERICK S. COHEN, INDIVIDUALLY; MARY ROSS; DR. LARRY NICHOLAS; AND DOES 1 THROUGH 20, DEFENDANTS.

The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge

ORDER

Presently before the court is a "Motion for Relief From Order Vacating Motions and Motion for Attorneys' Fees/Costs [F.R.C.P. 60, Cal. Civ. Proc. § 425.16]" filed by defendants Frederick S. Cohen, The Law Office of Frederick S. Cohen, and Mary Ross" (collectively, "Cohen Defendants"). (Dkt. No. 16.) For the reasons that follow, the undersigned will vacate the hearing on the Cohen Defendants' motion, which is currently set for November 4, 2010, and order that the parties file status reports with the court regarding the impact of plaintiff Igor Chepel's Chapter 7 bankruptcy petition on the pending motion.

On August 30, 2010, plaintiff Igor Chepel, who was then the only remaining plaintiff in this action,*fn1 filed a "Notice of Dismissal Without Prejudice," seeking dismissal of this action without prejudice pursuant to Federal Rule of Civil Procedure 41. (Dkt. No. 14.) Although Mr. Chepel did not specify a particular subsection of Rule 41 under which the notice of dismissal was filed, the court construed the notice as being filed pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i) because the opposing parties had not filed answers or motions for summary judgment. (Order, Sept. 8, 2010, Dkt. No. 15.) In so construing plaintiff's notice, the court noted that no court order was required for plaintiff to effectuate a voluntary dismissal without prejudice.*fn2 (See id.) Nevertheless, for the sake of clarity, the court entered an order on September 8, 2010, which acknowledged the effect of plaintiff's voluntary dismissal, vacated the pending dates in this matter, including the hearing date related to a special motion to strike filed by the Cohen Defendants, and directed that the case be closed. (See id.) Accordingly, this case was closed on September 8, 2010.

On September 27, 2010, the Cohen Defendants filed the pending motion for relief from the court's September 8, 2010 order pursuant to Federal Rule of Civil Procedure 60, which also seeks attorneys' fees and costs pursuant to California's Anti-SLAPP statute, Cal. Civ. Proc. Code § 425.16, despite the fact that the court has not passed upon the merits of the Cohen Defendants' special motion to strike filed pursuant to the Anti-SLAPP statute.*fn3 On October 19, 2010, plaintiff filed a written opposition to the Cohen Defendants' motion that, among other things, indicates that plaintiff has filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Eastern District of California, which is proceeding under case number 10-41945.*fn4 (Dkt. No. 22.) Plaintiff contends that his bankruptcy petition, which was filed on August 18, 2010, automatically stays the motion pending before this court and that, in any event, defendants' and/or defendants' counsel's claims to attorneys' fees pursuant to California's AntiSLAPP statute will be discharged in the bankruptcy proceeding. He also notes that the Cohen Defendants' initially filed their special motion to strike pursuant to the Anti-SLAPP statute prior to effectuation of service of the summons or complaint in this matter on any of the defendants. The Cohen Defendants have not filed a reply brief in response to plaintiff's written opposition.

Plaintiff's notice of voluntary dismissal and his opposition to the Cohen Defendants' pending motion raise concerns regarding, among other things, this court's jurisdiction to hear the Cohen Defendants' motion for relief pursuant to Rule 60 and their motion for fees and costs pursuant to the Anti-SLAPP statute. Setting aside whether the notice of voluntary dismissal deprives the court of jurisdiction, the court is concerned that an automatic stay attendant to the filing of a bankruptcy petition might preclude it from considering the Cohen Defendants' motion for relief and for fees and costs, and that, in any event, the claims for fees and costs asserted by the Cohen Defendants might be discharged in the bankruptcy proceeding. Based on the court's review of plaintiff's opposition and the bankruptcy court's docket in case number 10-41945, it appears that the bankruptcy trustee has concluded that plaintiff's bankruptcy estate has been fully administered, and that the trustee has filed a "Notice of Filing Report of No Distribution" in regards to plaintiff's Chapter 7 petition. (U.S. Bankr. Court for the E. Dist. of Cal., No. 10-41945, Dkt. Entry dated Oct. 18, 2010, and Dkt. Nos. 29, 30.) It also appears that the last day to file an objection to the trustee's action is November 18, 2010. (U.S. Bankr. Court for the E. Dist. of Cal., No. 10-41945, Dkt. Nos. 29, 30.) Because of the potential impact of the bankruptcy proceedings on the matter before this court, the undersigned will order that the parties provide status reports to the court after November 18, 2010, and that the court may thereafter address any outstanding issues that relate to the Cohen Defendants' motion for relief from the September 8, 2010 order of this court and its motion for fees and costs pursuant to the AntiSLAPP statute.

Accordingly, it is HEREBY ORDERED that:

1. The hearing on the Cohen Defendants' motion for relief pursuant to Federal Rule of Civil Procedure 60 and for fees and costs pursuant to California's Anti-SLAPP statute, Cal. Civ. Proc. Code § 425.16 (Dkt. No. 16), which is presently set for November 4, 2010, at 10:00 a.m., is vacated.

2. On or before December 2, 2010, plaintiff shall file a written document with the court that provides a status update regarding the impact of plaintiff's Chapter 7 bankruptcy petition on the Cohen Defendants' and/or their counsel's claim for attorneys fees' and costs sought pursuant to California Code of Civil Procedure 425.16. Plaintiff's status report shall specifically address whether the Cohen Defendants' and/or their counsel's claim for attorneys' fees has been discharged or otherwise resolved through the bankruptcy proceeding. Plaintiff may attach copies of pertinent court documents as necessary. Plaintiff shall also serve this status report on all defendants in this action.

3. On or before December 9, 2010, the Cohen Defendants shall file a written document a with the court that provides defendants' view of the impact of plaintiff's Chapter 7 bankruptcy petition on the Cohen Defendants' and/or their counsel's claim for attorneys' fees and costs. The Cohen Defendants shall indicate whether they concur with plaintiff's position and, if not, the reasons why not.

4. After receipt of the parties' respective status reports, the undersigned will issue an order addressing the Cohen Defendants' motion for relief pursuant to Rule 60 and for fees and costs pursuant California Code of Civil Procedure 425.16, or, if necessary, set the matter for a hearing.

IT IS SO ORDERED.


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