United States District Court, S.D. California
ALBINA G. LUMETTA, Appellant,
ARBORLAKE HOMEOWNERS ASSOCIATION, Appellee.
ORDER AFFIRMING THE BANKRUPTCY COURT'S
Anthony J. Battaglia United States District Judge
Albina G. Lumetta (“Lumetta”) appeals the United
States Bankruptcy Court's Order denying her Application
for an Order to Show Cause (“OSC”). (Doc. No. 1.)
Lumetta contends that Appellee Arborlake Homeowners
Association's (“AHA”) affirmative action of
sending out a case management conference letter after
Lumetta's debts had been discharged is a willful
violation of the discharge injunction. (See
generally Doc. No. 33.) Specifically, on appeal, Lumetta
asserts that AHA had an unqualified duty to dismiss her state
court action, an OSC should have been issued, Lumetta had no
duty to mitigate her damages, and that it was improper for
the bankruptcy court to deny Lumetta discovery.
(Id.) For the reasons stated more fully below, the
Court AFFIRMS the bankruptcy court's ruling denying the
January 8, 2014, AHA sued Lumetta and her husband, John Paul
Lumetta (“Mr. Lumetta”), in San Diego County
Superior Court (the “State Court Action”) for
numerous causes of action and seeking damages for delinquent
monthly assessments, late charges, pre-judgment interest, and
attorney's fees and costs. (Doc. No. 3-1 at 328; Doc. No.
33 at 4; Doc. No. 39 at 9.) On August 25, 2014, Lumetta
retained Doan Law Firm (“Doan”) to file for
Chapter 7 relief. (Doc. No. 3-1 at 328; Doc. No. 33 at 4.)
Thereafter, on September 4, 2014, Doan sent AHA a cease and
desist order indicating that Lumetta would soon be seeking
bankruptcy protection. (Doc. No. 3-1 at 130.) AHA responded
to the cease and desist letter via email on September 12,
2014. (Doc. No. 33 at 4.)
then filed her Chapter 7 petition, without her husband as a
co-debtor, on October 31, 2014. (Doc. No. 3-1 at 9.) AHA
received notice of the bankruptcy filing on November 5, 2014.
(Id. at 138.) Two days later, AHA filed a notice of
stay of proceedings as to Lumetta in the State Court Action.
(Id. at 228.)
January 9, 2015, the state court held a trial readiness
conference in which it indicated that because Lumetta and Mr.
Lumetta were married, it wished to stay the entire action as
to both of them. (Id. at 142, 148-150, 328.)
Accordingly, AHA then filed a second notice of stay of
proceedings as to the entire case on January 14, 2015.
(Id. at 226.) Despite the second stay, Lumetta
continued to receive various state court documents between
January 9, 2015, and January 21, 2015. (Id. at 328.)
Lumetta's bankruptcy then continued to follow its normal
course with discharge entered on February 9, 2015.
(Id. at 80.)
March 11, 2015, AHA, through its attorney Elizabeth
(“Ms. Call”), filed a Notice of Termination or
Modification of Stay (the “Notice of
Termination”) in the superior court. (Id. at
158; Doc. No. 41-1 at 9.) Ms. Call signed this notice as the
“declarant” and under penalty of perjury.
(Id.) Moreover, under question three, Ms. Call
stated that the January 14, 2015 notice was vacated by the
order of another court. (Id.) Additionally, under
question five, Ms. Call represented that the stay had been
vacated, was no longer in effect, or was modified with regard
to all parties. (Id.) Lastly, the Notice of
Termination included a printout from Lumetta's bankruptcy
docket showing that her debts were discharged. (Doc. No. 3-1
10, 2015, Ms. Call attended a status conference. (Doc. No. 33
at 6; Doc. No. 39 at 9.) Neither Lumetta nor Mr. Lumetta
attended. (Doc. No. 39 at 9.) During this status conference,
AHA contends that Ms. Call told Judge Timothy Taylor that
Lumetta's discharge had been entered. (Id.;
Doc. No. 3-1 at 259-60.) Judge Taylor then continued the case
status conference to August 21, 2015, and ruled that if
Lumetta and Mr. Lumetta did not appear at the continued
status conference that their answers would be striken. (Doc.
No. 3-1 at 239.) Judge Taylor then ordered Ms. Call to serve
a notice of his ruling on Lumetta. (Id. at 239,
received the Notice of Case Management Conference statement
(the “Notice of CMC”) on July 13,
2015. (Id. at 160-61.) The letter
stated that: (1) a status conference was held on July 10,
2015; (2) there was no appearance by Lumetta or Mr. Lumetta;
(3) a case management conference was set for August 21, 2015;
(4) the stay would be lifted; and (5) if Lumetta and Mr.
Lumetta failed to appear that their answers would be striken
and AHA would be permitted to enter default against them
receiving these notices, Lumetta contacted Doan on July 15,
2015. (Doc. No. 33 at 7.) Attorney Michael Doan, who was out
of the country at the time, tried to assure Lumetta that the
lawsuit was not proper. (Id.) Doan then contacted
AHA on August 7, 2015, and demanded that they dismiss the
State Court Action. (Id.) AHA responded
electronically on August 10, 2015, and filed the dismissal on
the same day. (Doc. No. 3-1 at 329; Doc. No. 41-1 at 21-23.)
The state court did not enter the dismissal until August 11,
2015, and Doan and Lumetta received notice of the dismissal
on August 28, 2015. (Doc. No. 3-1 at 329.)
August 26, 2015, Lumetta applied for an OSC with the
bankruptcy court to determine why AHA should not be held in
contempt for violating the discharge injunction.
(Id. at 84-85.) Lumetta asserts that as a result of
AHA's failure to immediately dismiss the State Court
Action with prejudice, she ended up receiving: (1) numerous
documents from state court; and (2) the Notice of CMC.
(Id. at 86-90; Doc. No. 33 at 8.) This then
allegedly caused Lumetta a variety of damages including: (1)
actual damages for emotional distress, aggravation, exam
resetting, delayed employment, and wasted time working on the
lawsuit; (2) lost wages; (3) medical expenses; (4) damages
similar to those recoverable in an action under the Rosenthal
Fair Debt Collection Practices Act; and (5) attorney's
fees and costs. (Doc. No. 3-1 at 90-93.)
October 5, 2015, after the bankruptcy court heard initial
arguments on this matter, it issued a tentative ruling
stating that it was inclined to grant the OSC and requested
that both parties attend the hearing to discuss the deadlines
for submitting evidence and briefing on the matter.
(Id. at 193.) On December 23, 2015, the bankruptcy
court requested additional briefing from both parties. (Doc.
No. 33 at 9.) On February 24, 2016, the bankruptcy court
continued the matter until the testimony of Ms. Call could be
taken. (Doc. No. 3-1 at 241.)
March 17, 2016, Ms. Call testified that she served the Notice
of CMC at the state court's request. (Id. at
261; Doc. No. 43 at 13.) Specifically, Ms. Call stated that
she was not in the practice of challenging a state court
judge's direct order. (Doc. No. 3-1 at 263.) Nor was it
Ms. Call's custom to reengage Judge Taylor and correct
him in regards to his rulings. (Id.) After Ms.
Call's testimony, closing arguments were made by both
parties and the matter was taken under submission.
(Id. at 245.)
3, 2016, the bankruptcy court denied Lumetta's
application for an OSC even though it agreed that a technical
discharge violation was committed. (Id. at 338.)
Specifically, the bankruptcy court denied Lumetta's
application because it found that AHA had satisfied its
burden in demonstrating why it was unable to comply with the
discharge injunction and that Lumetta failed to mitigate her
damages. (Id. at 338-339.)
14, 2016, Lumetta filed a notice of appeal from the
bankruptcy appellate panel with this Court. (Doc. No. 1.) On
September 3, 2016, AHA filed a motion to dismiss for lack of
jurisdiction, (Doc. No. 5), which was denied on February 3,
2017, after the Court requested supplemental briefing. (Doc.
Nos. 10, 18.)
February 13, 2017, Lumetta filed a motion for sanctions,
(Doc. No. 20), and on March 10, 2017, filed an objection.
(Doc. No. 28.) On March 12, 2017, AHA filed a motion to
strike Lumetta's late filed Reply brief to her motion for
sanctions. (Doc. No. 30.) On March 23, 2017, Lumetta filed an
ex parte motion for extension of time to file her Reply in
support of her motion for sanctions. (Doc. No. 35.) On April
19, 2017, the Court denied Lumetta's motion for
sanctions, granted AHA's motion to strike, denied
Lumetta's ex parte application, and denied AHA's
cross-motion for sanctions. (See generally Doc. No.
50.) Briefing for this appeal was completed on April 3, 2017.
(Doc. No. 45.) This Order follows.