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Gens v. Kaelin

United States District Court, N.D. California, San Jose Division

July 19, 2017

LAURA A. GENS, Appellant,
v.
DORIS KAELIN, Appellee.

          ORDER DENYING DEBTOR'S MOTION FOR RECONSIDERATION OF ORDER DENYING STAY PENDING APPEAL [Re: ECF 8]

          BETH LABSON FREEMAN United States District Judge

         On July 14, 2017, Debtor filed an “Ex Parte Emergency Application for a Temporary Restraining Order Pending Appeal of Orders Authorizing and Confirming Sale of Appellant's Residence Free and Clear of Lis Pendens, ” which the Court construed as a motion for stay pending appeal of the bankruptcy court's Order Granting Trustee's Motions to (1) Sell Real Property and Pay Fees, Costs, Taxes, and Commissions, Other than the Lien of Wells Fargo, and (2) Sell Free and Clear of Claims, Liens, and Interests (“Sale Order”); and Order Granting Trustee's Motion to Expunge, or, Alternatively, Sell Real Property Free and Clear of Lis Pendens (“Expungement Order”). See Stay Motion, ECF 4. The Court denied that motion on July 18, 2017. See Order Denying Debtor's Motion for Stay Pending Appeal, ECF 7.

         On July 19, Debtor filed a “Revised Ex Parte Emergency Application for a Temporary Restraining Order Pending Appeal of Orders Authorizing and Confirming Sale of Appellant's Residence Free and Clear of Lis Pendens, which the Court construes as a motion for reconsideration. See Motion for Reconsideration, ECF 8. The motion for reconsideration is DENIED for the reasons discussed below.

         In order to obtain reconsideration of an interlocutory order, the moving party “must specifically show reasonable diligence in bringing the motion” and also must show one of the following: (1) “a material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration is sought”; (2) “[t]he emergence of new material facts or a change of law occurring after the time of such order”; or (3) “[a] manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court before such interlocutory order.” Civ. L.R. 7-9(a), (b).

         Debtor has not identified any material difference in fact or law as required under the first prong, or the emergence of new material facts or a change of law as required under the second prong. Debtor does appear to argue that the Court failed to consider material facts or dispositive legal arguments as required under the third prong. The Court addresses those arguments below.

         Debtor asserts that the Court denied her Stay Motion because of her failure to analyze the abuse of discretion standard. Motion for Reconsideration at 2, ECF 8. Debtor's failure to analyze the correct legal standard was not the basis for the Court's ruling. To the contrary, the Court set forth the applicable abuse of discretion standard, explaining that the Court reviews the bankruptcy court's conclusions of law de novo and its factual findings for clear error. See Order Denying Debtor's Motion for Stay Pending Appeal at 3, ECF 7. The Court expressly determined that the bankruptcy court has applied the correct legal standards and had not committed clear error in its factual findings. See Id. at 3-5. Importantly here, the Court concluded that the bankruptcy court made a factual finding that Debtor's stay motion filed in the bankruptcy court was a rehash of arguments previously made and rejected; the bankruptcy court's factual finding was supported by the record and thus was not clearly erroneous; and the bankruptcy court's factual finding provided a sufficient legal basis for the bankruptcy court's determination that Debtor had not established a likelihood of success on the merits. See Id. at 5. The Court's ruling was based on those substantive determinations and not on the procedural deficiencies in Debtor's Stay Motion. Debtor has not presented any factual or legal basis for reconsideration of the substantive determinations upon which the Court's denial of her Stay Motion was based.

         While the above conclusion is determinative of Debtor's motion for reconsideration, the Court briefly addresses Debtor's argument that the bankruptcy court lacked jurisdiction to expunge the lis pendens which Debtor had recorded with the County Clerk. That jurisdictional argument was presented to and expressly rejected by the bankruptcy court prior to its issuance of the Expungement Order. See Tr. of Hearing on Motion to Expunge 20:1 - 23:22, Exh. to Motion for Reconsideration, ECF 8. Thus Debtor's reiteration of the jurisdictional argument in moving the bankruptcy court for a stay pending appeal properly was rejected by the bankruptcy court as a rehash of arguments previously made and rejected.

         Moreover, Debtor's jurisdictional argument is incorrect as a matter of law. Under California law, which Debtor asserts applies (and which the bankruptcy court did apply), a party who asserts a real property claim in any action may record a lis pendens, that is, a notice of pendency of action, “in the office of the recorder of each county in which all or part of the real property is situated.” Cal. Civ. P. Code § 405.20. “At any time after notice of pendency of action has been recorded, any party, or any nonparty with an interest in the real property affected thereby, may apply to the court in which the action is pending to expunge the notice.” Cal. Civ. P. Code § 405.20. Debtor argues that the “court in which the action is pending” is the district court, and that as a result the bankruptcy court lacks authority to expunge a lis pendens. However, the “action” at issue is the bankruptcy case which was commenced in the bankruptcy court and will remain “pending” until final determination on ...


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