The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
Plaintiffs Eduardo and Eloida Baltazar ("Plaintiffs") filed a Complaint against Defendants Luther Burbank Savings and Fidelity National Title Company ("Defendants") in Sacramento Superior Court, alleging thirteen violations of state law, including fraud and breach of fiduciary duty. The dispute arises from Defendants executing a valid promissory note and deed of trust on property Plaintiffs owned after their debts remained unpaid.
Simultaneously, Plaintiffs are undergoing Chapter Eleven proceedings in the United States Bankruptcy Court, Eastern District of California (Case No. 09-25829-c-11 DCN CLH-005), where Defendants are classified as secured creditors as part of Plaintiffs' bankruptcy and reorganization.
Defendants removed the case to this Court for the following reasons: (1) On August 2, 2010, the Bankruptcy Court issued an order approving the Second Amended Plan of Reorganization (the "Plan"), which provides for a plan to organize and resolve Plaintiffs' financial obligations to Defendants; (2) In approving the Plan, the Bankruptcy Court specifically declined to retain jurisdiction to resolve disputes related to the Plan, including enforcing claims that could be raised by either party; and as such, (3) the Plan has the effect of final judgment, Plaintiffs' claims in the complaint are duplicative of the issues raised in the Plan, and the Bankruptcy case generally, and Plaintiffs should be precluded from asserting such duplicative actions in state court.
Currently before the Court are two motions: Defendant Luther Burbank Savings' Motion to Dismiss the Complaint, and their Motion for Sanctions against Plaintiffs. The Motions are unopposed by Plaintiffs.
Based on Defendants' assertions and the Bankruptcy Court's Plan, the Court can find no reason to either remand the case, or interfere with the Bankruptcy Court's order. The issues presented in Plaintiffs' complaint are addressed in the Bankruptcy Court Plan.
Therefore, this case is Dismissed with prejudice. Defendants' Motions to Dismiss and for Sanctions (ECF Nos. 4 and 5, respectively) are DENIED as moot. The clerk is ordered to close the case.
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