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In Re: William Ernesto Reyes v. William Ernesto Reyes

July 14, 2011


Appeal from the United States Bankruptcy Court for the Central District of California Honorable Sheri Bluebond, Bankruptcy Judge, Presiding Bk. No. LA 08-18248-BB Adv. No. LA 08-01732-BB



Submitted Without Oral Argument on June 13, 2011*fn2

Filed - July 14, 2011

Before: KIRSCHER, DUNN, and MARKELL, Bankruptcy Judges.

Appellant, First National Bank of Omaha ("First National"), appeals two orders from the bankruptcy court: one dismissing its adversary proceeding against chapter 7*fn3 debtor, William Ernesto Reyes ("Reyes"), for failure to prosecute ("Dismissal Order"), and the other denying First National's motion to reconsider the Dismissal Order ("Reconsideration Order"). We AFFIRM.


Reyes filed a voluntary chapter 7 petition for relief on June 10, 2008. On September 8, 2008, the last day for filing an exception to discharge complaint, First National filed a complaint against Reyes seeking to except from discharge an approximately $9,000 credit card debt under section 523(a)(2)(A). First National contended that Reyes had obtained money by false pretenses, false representation, or actual fraud. Reyes failed to file an answer, so First National requested an entry of default.

Thereafter, on January 20, 2009, First National moved for a default judgment against Reyes. Reyes finally appeared and opposed the default judgment and moved to set aside the default. On May 15, 2009, the bankruptcy court denied First National's motion for default judgment and granted Reyes's motion to set aside the default. Reyes then filed an answer to First National's complaint on June 3, 2009. Reyes denied even having a credit card with First National, that he had made any charges on such card, or that he had defrauded First National.

In July 2009, the parties submitted respective status 1 reports. Reyes expressed an interest in mediating the matter; 2 First National did not wish to mediate. The bankruptcy court held 3 a status conference on July 14, 2009. The court ordered that a 4 joint status report be filed by October 20, 2009. The status 5 hearing was continued to November 3, 2009.

On November 10, 2009, the bankruptcy court issued an order 7 imposing sanctions of $150.00 against Dennis Winters, Esq. 8 ("Winters"), counsel for First National, for failing to appear at 9 the continued status conference on November 3, and for failing to 10 participate in the preparation of a joint status report.

The 11 sanction order also set a pretrial conference for December 15, 12 2009, and directed the parties to file a pretrial order by 13 December 1, 2009. The parties were also to lodge an order 14 appointing a mediator by November 23, 2009, and to complete one 15 day of mediation by December 15, 2009.

16 No order appointing a mediator was lodged by November 23 as 17 ordered. No pretrial order was filed by December 1 as ordered. 18 However, on December 8, 2009, Winters untimely filed a Declaration 19 re Unilateral Pre-Trial Order in which he stated that on 20 December 3, 2009, he sent a fax to Reyes's counsel, Diane Carey, 21 Esq. ("Carey"), but that as of December 8 he had not yet heard 22 from her. Nonetheless, Winters stated that he would continue his 23 efforts to contact Carey in order to cause a joint pretrial order 24 to be filed, but, in the meantime, he was submitting a proposed 25 unilateral pretrial order.

26 The bankruptcy court held the continued status conference on 27 December 15, 2009. The court's tentative ruling on that date 28 states: "Dismiss action for failure to prosecute." According to 1 the docket minutes, the court ordered that a joint pretrial order 2 be filed by February 16, 2010, that an order appointing a mediator 3 be filed by December 30, 2009, and that the parties complete one 4 day of mediation by March 2, 2010. The status conference was 5 continued to March 2, 2010, and was later continued to April 6, 6 2010. The court's tentative ruling dated March 2, 2010, states:

7 "If this matter has not been settled, issue OSC why action should 8 not be dismissed for failure to prosecute."

9 An order appointing a mediator was timely filed on 10 December 29, 2009. However, on March 22, 2010, the mediator filed 11 a notice of non-compliance with the mediation program stating that 12 Winters had failed to appear at the scheduled mediation.

After 13 the continued status conference hearing on April 6, the bankruptcy 14 court issued an order on April 9, 2010, imposing sanctions of 15 $150.00 on Winters for failing to appear at the mediation without 16 any satisfactory explanation. A continued status conference was 17 set for May 25, 2010. The parties were ordered to file a joint 18 pretrial order by May 11, 2010, and to complete at least one day 19 of mediation by May 25, 2010.

20 No mediation occurred, and no joint pretrial order was filed 21 by May 11, 2010. However, on May 21, 2010, Winters untimely filed 22 another Declaration re Pre-Trial Order. Winters stated that, as 23 ordered by the court at the last hearing, he attempted to contact 24 Carey on several occasions to create a joint pretrial order but 25 she was unresponsive. Winters had also proposed several dates for 26 mediation to Carey, but the dates had passed without him receiving 27 any response from her.

28 The continued status conference took place on May 25, 2010.

The bankruptcy court noted that the parties failed to lodge a 2 pretrial order by May 11, 2010. As a result, it again continued 3 the status conference to June 8, 2010.

4 According to the bankruptcy court's tentative and final 5 rulings dated June 8, 2010, Winters appeared for the June 8 6 continued status conference but Carey did not. Specifically, the 7 June 8 final ruling stated:

8 Parties will lodge a joint pretrial order by June 15. If for any reason they are unable to agree on the form of a 9 joint pretrial order, plaintiff shall lodge a unilateral pretrial order and file a declaration attesting to 10 efforts to agree upon form of joint order.

11 Its tentative ruling for that date states: "Dismiss adversary 12 proceeding for failure to prosecute." The bankruptcy court again 13 continued the status conference to June 29, 2010. 14 No pretrial order was filed by June 15. On June 23, 2010, 15 First National untimely filed Plaintiff's Proposed Pre-Trial 16 Statement and Declaration re Pre-Trial Order. Winters stated in 17 his declaration that he had made numerous phone calls and sent 18 numerous emails and faxes to Carey regarding a joint pretrial 19 order but got no reply. As a result, he was unsuccessful in 20 getting Carey to agree to a joint pretrial order, so he did as the 21 court ordered and filed a unilateral pretrial order.

22 The continued status conference hearing went as scheduled on 23 June 29, 2010. The bankruptcy court, sua sponte, dismissed the 24 adversary proceeding for failure to prosecute. The bankruptcy 25 court's tentative ruling from that date states:

26 As of June 18, 2010, the docket does not reflect the filing of a declaration or a notice of continuance and no 27 joint or unilateral pretrial has been ...

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