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Warren C. Havens v. Net Radio Group Communications


December 29, 2010


San Francisco City &County Super. Ct. No. 419807

The opinion of the court was delivered by: Banke, J.

Havens v. Net Radio Group Communications CA1/1


California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Plaintiff Warren C. Havens, representing himself in propria persona, appeals from an order quashing service of the summons and complaint as to defendants Joseph Worley, Montgomery Rhodes and Charles Hewitt. Havens contends a bankruptcy stay was in effect at the time the superior court ruled on the motions to quash and therefore the court had no power to hear or grant the motions. We affirm.


We recite only the facts germane to the bankruptcy stay issue raised on appeal.

On April 25, 2003, Havens filed a complaint for declaratory and other relief against Net Radio Group Communications (NRG) and four individuals, Steve Chevalier, Charles Hewitt, Montgomery Rhodes, and Joseph Whorley. Havens alleged he was one of the founders of NRG, a company which sought to obtain and develop radio communications systems for wireless communication. Havens claimed he lent money to NRG which was not repaid, and that NRG also did not repay a loan from another company, Suncom, in which he had an ownership interest. Havens alleged theft and conversion of property, theft and conversion of the loan proceeds, forgery and perjury, and demanded arbitration.

The four individual defendants moved to quash service of the summons and complaint due to lack of personal jurisdiction. NRG filed an answer denying all allegations and asserting 28 affirmative defenses.

Court minutes for August 4, 2003, August 25, 2003, and September 8, 2003, indicate no opposition was filed to the motions by Hewitt, Rhodes, and Whorley and the motions were granted September 8, 2003.*fn1 The parties apparently had intended that the motions to quash be taken off calendar while they discussed settlement, and pursuant to stipulation, the court vacated its ruling granting the motions and reset them for hearing on November 3, 2003. The hearing was subsequently continued to January 5, 2004.

On December 31, 2003, Havens, by "federal bankruptcy counsel," filed a "Suggestion of Bankruptcy." The notice stated an involuntary bankruptcy petition had been filed against NRG, "the Debtor," in the Delaware Bankruptcy Court and "[p]ursuant to Section 362 of the Bankruptcy Code, the filing of an involuntary bankruptcy petition pursuant to section 303 of the Bankruptcy Code automatically stays all proceedings."

On January 5, 2004, the court heard and granted Hewitt's, Rhodes's, and Whorley's still unopposed motions to quash.

On January 6, 2004, Havens, by his federal bankruptcy counsel, filed an "Amended Suggestion of Bankruptcy," which was substantively identical to the first "Suggestion."

On January 26, 2004, the trial court issued an order canceling the next scheduled case conference and ordering Havens to appear and show cause why the case should not be dismissed. Havens filed a response stating the only remaining defendant was NRG, which was in involuntary bankruptcy and as to which an automatic stay was in place. Havens asserted his case should not be dismissed, but should be stayed.

On March 24, 2004, the court issued its written order granting Hewitt's, Rhodes's, and Whorley's motions to quash. On March 31, 2004, defense counsel served Havens with notice of entry of the order. On May 21, 2004, Havens filed a timely notice of appeal from the order granting the motions to quash.


Havens contends the superior court had no authority to rule on the individual defendants' motions to quash because of the automatic stay in the Delaware bankruptcy proceeding.

Generally, the "automatic stay" that arises from a bankruptcy proceeding applies only to actions against the debtor, and not to actions against third parties. (Parry v. Mohawk Motors of Michigan, Inc. (6th Cir. 2000) 236 F.3d 299, 314.) "[A]bsent unusual circumstances the stay ' "does not extend . . . to separate legal entities such as corporate affiliates, partners in debtor partnerships, or to co-defendants in pending litigation." ' " (Ibid., quoting Patton v. Bearden (6th Cir. 1993) 8 F.3d 343, 349; accord, In re Chugach Forest Product, Inc. (9th Circ. 1994) 23 F.3d 241, 246.) However, even where the debtor is not a named party, the stay extends to actions " 'which would inevitably have an adverse impact upon the property of the [bankrupt] estate.' " (In re National Century Financial Enterprises, Inc. (6th Cir. 2005) 423 F.3d 567, 578.) The stay can be "extended" to other entities or individuals, but this requires a showing of "unusual circumstances" by the proponent of the stay. (Parry, supra, 236 F.3d at pp. 314-315.)

Here, Havens's "Suggestion of Bankruptcy" and "Amended Suggestion of Bankruptcy" identified only NRG as the "debtor" and stated the Delaware involuntary bankruptcy proceeding was filed against NRG. Under the general rule, the stay did not extend to the individual defendants. Havens made no request, and thus no showing of "unusual circumstances," that would support any "extension" of the stay to the other defendants. Indeed, he never made any objection below that the trial court could not entertain the individual defendants' motions.

Accordingly, that automatic stay applied only to NRG, and no stay precluded the superior court from hearing and ruling on the individual defendants' motions to quash. As we have noted, Havens makes no other argument on appeal as to the propriety of the ruling on the motions.


The order granting the motions of Charles Hewitt, Montgomery Rhodes, and Joseph Whorley to quash service of summons and the complaint for lack of personal jurisdiction is affirmed.

We concur:

Marchiano, P. J.

Margulies, J.

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