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In re Agha

United States District Court, E.D. California

March 15, 2017

In re SALMA H. AGHA, Debtor. No. 10-16183 DCN: RHS-1

          RECOMMENDATION FOR WITHDRAWAL OF THE REFERENCE FOR THE ABOVE CAPTIONED CHAPTER 7 CASE NO. 10-16183 28 U.S.C. § 157(D) (CORE PROCEEDINGS BANKRUPTCY CASE)

          RONALD H. SARGIS, BANKRUPTCY COURT JUDGE

         The Clerk of the Bankruptcy Court shall transmit to the Hon. Lawrence J. O'Neill, Chief Judge of the Unites States District Court for the Eastern District of California, a copy of this Recommendation of Ronald H. Sargis, Chief Judge of the Bankruptcy Court for the Eastern District of California, for the Withdrawal of the Reference of the Above Captioned Bankruptcy Case.

         SUMMARY OF RECOMMENDATION FOR WITHDRAWAL OF REFERENCE FOR CHAPTER 7 BANKRUPTCY CASE NO. 10-16183

         The undersigned Chief Bankruptcy Judge makes this recommendation to the Chief Judge of the United States District Court for the Eastern District of California (“District Court”) to withdraw the Chapter 7 bankruptcy case filed by Salma H. Agha, M.D. (“Debtor”), Bankr. E.D. Cal. No. 10-16183, (“Bankruptcy Case”) which has been referred to this United States Bankruptcy Court for the Eastern District of California (“Bankruptcy Court”) pursuant to 28 U.S.C. § 157(a). Though the bankruptcy case itself constitutes a “core proceeding” (11 U.S.C. § 157(b)), a review of the files in this Bankruptcy Case discloses that there are few, if any, proceedings relating to the prosecution of the bankruptcy case itself. Instead, all of the “proceedings” relate to claims asserted by Debtor that her rights and interests were violated in the bankruptcy case.

         Debtor received her Chapter 7 discharge in 2010, and the Chapter 7 case was first closed on January 7, 2010.

         In September 2012, the U.S. Trustee requested that the bankruptcy case be reopened and a Chapter 7 trustee reappointed to administer what were asserted to be undisclosed assets of the Debtor which continued to be property of the bankruptcy estate. This issue was hotly contested, with the bankruptcy judge ultimately determining that the assets had not been disclosed and were property of the bankruptcy estate, and then authorized the sale of said assets by the Chapter 7 Trustee.

         As addressed in the Discussion section of this Recommendation, Debtor has continued to contest the reopening of this case, the determination that there was undisclosed assets, and the sale of those assets by the Chapter 7 Trustee. Debtor's contest of the reopening of the Bankruptcy Case and orders of the bankruptcy judges have not been by appeals, but indirectly through adversary proceedings and other proceedings to have all orders in the Bankruptcy Case and adversary proceedings vacated.

         First, Debtor filed judicial complaints against, sought the disqualification of, and the removal of the bankruptcy judges assigned the Bankruptcy Case.[1] Second, Debtor has commenced three separate adversary proceedings asserting misconduct by the U.S. Trustee, the bankruptcy judges, attorneys, and various other persons. The first adversary proceeding was dismissed by the bankruptcy judge. For the second and third adversary proceedings, the referral of those adversary proceedings to the bankruptcy judges in this District were withdrawn by the District Court Chief Judge pursuant to 28 U.S.C. § 157(d). Third, Debtor has filed motions to vacate orders of the court and to stay all proceedings in the Bankruptcy Case.

         A review of the file in this Bankruptcy Case discloses that there are no “core” proceedings being presented to the Bankruptcy Court. There are no assets being administered and the Debtor is not seeking any further relief under the Bankruptcy Code. Rather, she is challenging the decisions and conduct of the bankruptcy judges and the bankruptcy court process itself through the various adversary proceedings. In surveying the motions filed by Debtor since this case was reopened (the first time on the motion of the U.S. Trustee and the second time on the motion of Debtor), the motions seek to stay any proceedings in the Bankruptcy Case, reverse prior orders in the Bankruptcy Case, and disqualify the bankruptcy judge from conducting any proceedings in the Bankruptcy Case. Further Debtor has filed a Petition for Writ of Mandamus with the Ninth Circuit Court of Appeals, requesting that the Ninth Circuit Court of Appeals order that everything done in the Bankruptcy Case was void and transfer the case to another District. Ninth Cir. No. 16-73883. The Ninth Circuit recently dismissed Debtor's Petition for Mandamus.

         Because there are no “bankruptcy issues” being presented, there is no property of the estate being administered, and the Debtor is seeking to stay any proceedings from being conducted in the Bankruptcy Case, the undersigned concludes that there are no substantive “bankruptcy law matters” to be adjudicated in the Bankruptcy Case. Having the bankruptcy case sitting in the Bankruptcy Court, with the adversary proceedings removed to the District Court and various appeals and petitions filed with the Ninth Circuit Court of Appeals, the parties are currently spread over three different levels of the federal judicial systems. Further, given the nature of the motions filed in the Bankruptcy Case, which overlap with the allegations in the adversary proceedings before the District Court and the appeals and petitions to the Ninth Circuit, having three courts issuing decisions on the overlapping issues unduly increases the risk of inconsistent rulings and the unnecessary duplicative expenditure of judicial and party resources.

         Therefore, the undersigned Chief Bankruptcy Judge recommends that the District Court withdraw the Salma H. Agha Chapter 7 Bankruptcy Case, 10-16183, from this Bankruptcy Court and assign the Chapter 7 Bankruptcy Case to a District Court Judge. The undersigned further recommends that it be assigned to a judge to whom has been assigned one of the adversary proceedings.

         DISCUSSION OF GROUNDS FOR RECOMMENDATION

         On May 30, 2010, Debtor commenced a voluntary Chapter 7 bankruptcy case in the Eastern District of California (Bakersfield Division). Debtor's counsel who filed and formerly prosecuted the Chapter 7 case is William R. Cumming. Debtor herself has been appearing in pro se in the Chapter 7 case since October 1, 2014, when she began filing pleadings herself.

         A motion for relief from the automatic stay was filed by Aurora Loan Servicing, LLC relating to real property in Las Vegas, Nevada, which relief was granted. July 20, 2010 filed Order, Dckt. 30. Debtor's First Meeting of Creditors was concluded on August 27, 2010. August 30, 2010 Docket Entry Report by Chapter 7 Trustee.

         In September 2010, two more motions for relief from the automatic stay were filed. Relief was granted pursuant to one motion relating to real property located in Bakersfield, California (and denied as moot as to the debtor, the discharge having been entered and the automatic stay terminated as to Debtor by operation of law). Order, Dckt. 65. Relief was denied as to the second, the court determining that the vehicle that was the subject of the motion was leased by the Debtor, the lease was not assumed, and the stay had terminated by operation of law. Order, Dckt. 63.

         On September 23, 2010, the bankruptcy discharge was entered for Debtor.

         In October 2010, another motion for relief from the automatic stay was filed relating to property in Las Vegas, Nevada. Relief was granted pursuant to that motion for one of the motions with respect to the rights of a creditor in another Las Vegas, Nevada Property as to the bankruptcy estate (and denied as to the debtor, the automatic stay having terminated as to the Debtor by operation of law with the entry of the discharge). Order, Dckt. 65.

         On January 7, 2011, the court closed the bankruptcy case.

         2012 Reopening of the Bankruptcy Case

         In September 2012, the U.S. Trustee filed a motion to reopen the bankruptcy case. Dckt. 68. The case was reopened by order of the court filed on September 18, 2012. Dckt. 70. A Chapter 7 trustee was reappointed and that Trustee then sought authorization from the court to sell what he asserted were formerly undisclosed assets of the Debtor. The Chapter 7 Trustee asserted that such undisclosed assets continued to be property of the bankruptcy estate, notwithstanding the prior closing of the Bankruptcy Case, and under the Trustee's control. Highly contentious litigation ensued, with the bankruptcy judge ultimately issuing an order determining that the assets were property of the bankruptcy estate and authorizing the sale of the assets by the Chapter 7 Trustee. Civil Minutes for January 23, 2013 hearing, Dckt. 110; and Order, Dckt. 111.

         Debtor vigorously opposed the Motion to Sell and has contested the validity of the bankruptcy case being reopened. On August 1, 2013, Debtor commenced Adversary Proceeding No. 13-01086 asserting claims for violation of the automatic stay. That Adversary Proceeding was dismissed on February 19, 2015. On December 5, 2015, Debtor, in pro se, filed a Motion to Reopen the Adversary Proceeding. That Motion was denied. 13-01086; Order, Dckt. 281.

         On October 1, 2014, Debtor, in pro se, filed an ex parte Motion (the court having denied the motion for order shortening time and no certificate of service filed) titled:

MOTION [hand written]
DEBTOR'S NOTICE OF DOCKET FRAUD PERPETRATED BY U.S. TRUSTEE JEFFREY VETTER, HIS ATTORNEYS LISA HOLDER, KDG LAW FIRM AND JUDGE FREDRICK CLEMENT WHO INTENTIONALLY, FRAUDILENTLY [sic] AND REPEATEDLY ALTERED PLAINTIFF'S BANKRUPTCY MATTER DOCKET BY
1. CREATING A NEW CASE NUMBER FOR FILINGS
2. MISFILINGS UNDER THIS NEW CASE NUMBER
3. MISLABELING OF TRANSCRIPT TITLES
4. MISREPORTING OF TITLES ON MOTIONS, FILINGS AND HEARINGS . . . .

Dckt. 126. The court denied the ex parte Motion on November 4, 2014. Dckt. 141.

         On October 2, 2014, Debtor, in pro se, filed an ex parte Motion titled:

MOTION: DEBTOR'S REQUEST FOR NOTICE REGARDING AMBUSHED FRAUDULENT HIRING OF ATTORNEYS SEEKING REVENGE AGAINST DEBTOR ALLOWED BY JUDGE CLEMENT ACTING UNDER COLOR OF OFFICIAL RIGHT TO COMMIT GRAND THEFT FELONY OF STEALING DEBTOR'S PROPERTIES . . . .

Dckt. 129. The court denied the ex parte Motion on November 4, 2014. Dckt. 138.

         On December 31, 2014, Debtor, in pro se, filed a Motion which she sought to have heard on January 8, 2015, using the caption from Adversary Proceeding 13-01086, for Bankruptcy Court Judge Richard Lee to disqualify himself in Debtor's bankruptcy case and Adversary Proceeding 13-01086. Dckt. 144. That Motion was denied on January 8, 2015. Order, Dckt. 175.

         On December 31, 2014, Debtor, in pro se, filed a second Motion in this Bankruptcy Case (though identifying herself as “Plaintiff-Debtor, ” which would ...


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