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Title: In Re Joanna Kelley

November 20, 2012

TITLE: IN RE JOANNA KELLEY


Bankr. Case No. 11-27648-ES

The opinion of the court was delivered by: The Honorable David O. Carter, Judge

O

JS-6

CIVIL MINUTES -- GENERAL

PRESENT: THE HONORABLE DAVID O. CARTER, JUDGE

Julie Barrera N/A Courtroom Clerk Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFF: ATTORNEYS PRESENT FOR DEFENDANT: None Present None Present

PROCEEDING: (IN CHAMBERS): ORDER AFFIRMING THE BANKRUPTCY COURT'S DENIAL OF RELIEF FROM STAY FOR THE PURPOSE OF OFFSETTING ATTORNEY'S FEES AND COSTS

Before the Court is Appellant-Creditor Erik Aaron's appeal from the United States Bankruptcy Court for the Central District of California's order denying relief from an automatic stay for the purpose of offsetting attorney's fees and costs. The order was entered on March 26, 2012, the Honorable Erithe A. Smith presiding. After reviewing the record, the Court AFFIRMS.*fn1

I.Background

Appellant-Creditor Erik Aaron ("Creditor") entered into a contract with Appellee-Debtor Joanna Kelley ("Debtor") to purchase the property located at 27732 Emerald, Unit 15, Mission Viejo, CA ("the property"). Appellant Br. (Dkt. 13) at 1. Debtor had purchased the property on May 6, 2009, prior to her marriage to Richard Kelley. Appellee Br. (Dkt. 15) at 2. Subsequent to signing the contract for sale, Debtor chose not to sell the property, and Creditor brought an action in the Superior Court seeking specific performance on June 17, 2010. Appellant Br. (Dkt. 13) at 2.

a.Judgment Granting Specific Performance

On October 13, 2011, the Superior Court of California entered an order granting Creditor specific performance. Appellant Br. (Dkt. 13) at 2. The judgment was recorded on October 26, 2011. Id. On the same day as the recording of the judgment, the Creditor filed two motions with the Superior Court: (1) Motion for Incidental Costs and (2) Motion for Award of Attorney's Fees. Id. On December 9, 2011, Creditor was awarded incidental costs of $9,600 ("incidental fees award") and attorney's fees in the amount of $53,116.54 ("attorney's fees award"). Id. Debtor filed a Notice of Appeal regarding the attorney's fees award. Id. The appeal was resolved on September 6, 2012; the Court of Appeal affirmed the attorney's fees award. Appellant Req. for Judicial Notice (Dkt. 17) at 8.

b.Bankruptcy Filing

On December 28, 2011, Debtor filed a petition for bankruptcy under Chapter 7. Appellant Br. (Dkt. 13) at 2. Because the Debtor commenced the bankruptcy proceeding, Creditor was required to file a Motion for Relief from Stay to enforce the judgment and the fee awards against Debtor. Id. at 2.

c. Order Granting Relief from Stay

On March 26, 2012, the United States Bankruptcy Court for the Central District of California ("Bankruptcy Court") entered an order granting in part and denying in part Appellant's Motion for Relief from Stay to enforce the judgment against Debtor. Appellant Br. (Dkt. 13) at 1. The Bankruptcy Court granted relief from stay for the purpose of allowing the sale of the property and allowing the incidental fees award to be deducted, or "set off", from the property sale price. Id. The Bankruptcy Court, however, denied enforcement of the attorney's fees award and did not allow the ...


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