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In re Sui

United States District Court, Ninth Circuit

April 29, 2013

In re: Yan Sui

CIVIL MINUTES - GENERAL PROCEEDINGS (IN CHAMBERS): ORDER DISCHARGING ORDER TO SHOW CAUSE [16], AND AFFIRMING BANKRUPTCY COURT ORDER

MICHAEL W. FITZGERALD, District Judge.

Debtor-Appellant Yan Sui filed this bankruptcy appeal from the Order Granting Motion (1) to Dismiss Complaint; and (2) to Strike Complaint (the "Bankruptcy Court Order") filed and entered on November 19, 2012. (Docket No. 15). The Court has read and considered the papers filed on this bankruptcy appeal and deems the matter appropriate for decision without oral argument. See Fed.R.Civ.P. 78(b); Local rule 7-15. For the reasons stated below, the Bankruptcy Court Order is AFFIRMED.

As a preliminary matter, on January 11, 2013, the Court issued an Order to Show Cause Re: Dismissal for Lack of Prosecution. (Docket No. 16). On January 23, 2013, Mr. Sui filed a response (the "Response"). (Case No. SA 12-01501, Docket No. 9). The Court has reviewed that Response, and the Order to Show Cause (Docket No. 16) is hereby DISCHARGED.

Background

By now, the facts are well known to the parties and the Bankruptcy Court. On July 27, 2011, Mr. Sui filed a voluntary bankruptcy petition under Chapter 7 of the United States Bankruptcy Code. On the same day, Richard A. Marshack was appointed as the Chapter 7 Trustee for Mr. Sui's estate.

On August 22, 2011, the Trustee retained David M. Goodrich as general counsel for the Trustee to investigate Mr. Sui's potential assets, including the personal residence located in Costa Mesa, California, that eventually became the subject of an adversary proceeding and related appeal. ( See Case No. SA 12-01501). The Bankruptcy Court for the Central District of California (the Honorable Catherine Bauer) entered an order approving the Trustee's retention of Mr. Goodrich as general counsel for the Trustee. ( See Excerpts of Record ("ER") 72 (Docket No. 20)).

On August 21, 2012, Mr. Sui filed a Complaint in California Superior Court against Mr. Goodrich and certain individuals involved with the "2176 Homeowners Association, " the community in which the Costa Mesa residence is located (the "Superior Court Action"). Before filing his bankruptcy petition, Mr. Sui had filed a number of lawsuits against the 2176 Homeowners Association. Mr. Goodrich had substituted into these lawsuits and settled the prepetition claims as property of the estate. On August 10, 2012, the Bankruptcy Court had issued an order approving this settlement. ( See ER 72). Indeed, on August 13, 2012, Mr. Sui had appealed the Bankruptcy Court's order approving this settlement to the Bankruptcy Appellate Panel for the Ninth Circuit. ( See id. )

On September 21, 2012, Mr. Goodrich removed the Superior Court Action to the Bankruptcy Court. (ER 38-50). On the same day, Mr. Goodrich filed the Motion (1) to Dismiss Complaint; and (2) to Strike Complaint ("Motion to Dismiss"). (ER 51-71). On October 30, 2012, the Bankruptcy Court held a hearing and granted the Motion to Dismiss with respect to Mr. Goodrich on the basis of quasi-judicial immunity. (ER 108-18). Apparently, the Superior Court Action was remanded with respect to the remaining defendants. ( See ER 116-17). Thereafter, the Bankruptcy Court Order, granting the Motion to Dismiss as to Mr. Goodrich, was filed and entered on November 19, 2012. (Docket No. 15). Mr. Sui timely appealed.

Jurisdiction

The Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 158. The Bankruptcy Court had jurisdiction over the removed Superior Court Action pursuant to 28 U.S.C. § 1334 and 11 U.S.C. § 157(b)(1).

The Superior Court Action "concern[ed] the administration of the estate" and consequently was a core proceeding under Section 157(b)(2)(A). See also 11 U.S.C. § 157(b)(2)(O) ("Core proceedings include... other proceedings affecting the liquidation of the assets of the estate....").

Mr. Goodrich properly removed the Superior Court Action pursuant to 28 U.S.C. § 1452. See In re Law, 435 F.Appx. 702, 703 (9th Cir. 2011) ("[T]he bankruptcy court had jurisdiction over the removed state-law claims against the trustee because they concerned the administration of the bankruptcy estate.").

Furthermore, pursuant to Section 157(b)(1), the Bankruptcy Court has subject matter jurisdiction over all pre-trial matters in core proceedings. See In re Bellingham Ins. Agency, Inc., 702 F.3d 553, 558 (9th Cir. 2011) (finding that a bankruptcy court may retain jurisdiction over all pre-trial matters in core ...


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