in re: marcelo britto gomez, 9th cir. bap (2012)

7/25/2019 In re: Marcelo Britto Gomez, 9th Cir. BAP (2012)

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1 Whi l e t he BAP docket i s capt i oned wi t h t he cor r ectspel l i ng of t he Appel l ant s name Car t er St ephens, t hebankrupt cy docket i s capt i oned i ncor r ect l y as Car t er St evens.

2 Thi s di sposi t i on i s not appropr i at e f or publ i cat i on.Al t hough i t may be ci t ed f or what ever per suasi ve val ue i t mayhave ( see Fed. R. App. P. 32. 1) , i t has no pr ecedent i al val ue.See 9t h Ci r . BAP Rul e 8013- 1.

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UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

I n r e: ) BAP No. CC- 12- 1144- DHKi)

MARCELO BRI TTO GOMEZ, ) Bk. No. 11- 26905- TBD)

Debt or . ) Adv. No. 11- 02360- TBD______________________________)

)CARTER STEPHENS, 1 )

)Appel l ant , )

)

v. )MEMORANDUM

2

)LORI SMI TH, ESQ. ; )MARCELO BRI TTO GOMEZ, )

)Appel l ees. )

______________________________)

Ar gued and Submi t t ed on November 15, 2012at Pasadena, Cal i f or ni a

Fi l ed - November 28, 2012

Appeal f r om t he Uni t ed St at es Bankrupt cy Cour tf or t he Cent r al Di str i ct of Cal i f or ni a

Honorabl e Thomas B. Donovan, Bankr upt cy J udge, Presi di ng

Appear ances: The Appel l ant , Car t er St ephens, ar gued pr o se;Dougl as Cr owder , Esq. argued f or Appel l ee Marcel oBr i t t o Gomez.

___________________________________

Bef or e: DUNN, HOLLOWELL, and KI RSCHER, Bankr upt cy J udges.

FILED

NOV 28 2012

SUSAN M SPRAUL, CLERKU.S. BKCY. APP. PANELOF THE NINTH CIRCUIT


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3 Unl ess ot her wi se i ndi cat ed, al l chapt er , sect i on andr ul e r ef erences are t o t he Bankrupt cy Code, 11 U. S. C. 101-1532, and the Federal Rul es of Bankr upt cy Procedur e, Rul es 1001-9037. The Feder al Rul es of Ci vi l Pr ocedur e ar e r ef er r ed t o asCi vi l Rul es .

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Pl ai nt i f f , Car t er St ephens (" Appel l ant ") , f i l ed an

adver sar y compl ai nt ( Adver sary Pr oceedi ng) seeki ng to except

f r omdi schar ge debt s owed t o Appel l ant by debt or def endant

Mar cel o Br i t t o Gomez ( "Appel l ee") under 523( a) ( 2) ( A)3

and( a) ( 6) on t he bases t hat t he debt s ar ose f r om Appel l ee s f al se

pr et enses and caused Appel l ant wi l l f ul and mal i ci ous i nj ur y,

r espect i vel y. Due t o t he f ai l ur e of Appel l ant ' s at t or ney t o

f i l e st at us r epor t s t i mel y, appear at st at us conf er ence

hear i ngs, and r espond t o di scover y r equest s on sever al

occasi ons, as wel l as Appel l ant ' s f ai l ur e t o f i nd new counsel ,

t he bankrupt cy cour t di smi ssed the Adver sary Proceedi ng f or

f ai l ur e t o pr osecut e. Appel l ant f i l ed t wo subsequent mot i ons

f or r econsi der at i on, bot h of whi ch t he bankrupt cy cour t

summar i l y deni ed wi t hout maki ng separ at e f i ndi ngs of f act or

concl usi ons of l aw. Appel l ant t hen appeal ed f r om t he di smi ssal

and t he deni al of t he f i r st mot i on f or r econsi der at i on.

However , t he BAP mot i ons panel ( 1) determi ned t hat appel l atej ur i sdi ct i on exi st ed onl y t o hear t he appeal f r om t he deni al of

t he f i r st mot i on f or r econsi der at i on because Appel l ant di d not

t i mel y appeal t he di smi ssal or der and ( 2) or der ed t hat t he scope

of t he appeal be l i mi t ed t o deni al of t he f i r st mot i on f or

r econsi derat i on. We VACATE t he bankr upt cy cour t s or der on t he

f i r st mot i on f or r econsi der at i on and REMAND f or f i ndi ngs of f act

and concl usi ons of l aw.


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4 The procedur al and subst ant i ve det ai l s of t he mot i onspanel ' s deci si on t o l i mi t t he scope of r evi ew ar e di scussed infraat not es 7 and 8.

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I. FACTS

The l i mi t ed r ecor d present ed i n t hi s appeal i s not ver y

hel pf ul or i l l umi nat i ng. To ai d our det er mi nat i ons, t he Panel

has r evi ewed t he docket and document s f i l ed i n the Adver sar yProceedi ng, Case No. 11- 02360- TBD. See O Rour ke v. Seaboar d

Sur . Co. ( I n r e E. R. Feger t , I nc. ) , 887 F. 2d 955, 958 ( 9t h Ci r .

1989) ( cour t may t ake j udi ci al not i ce of under l yi ng bankrupt cy

r ecor ds) .

Thi s appeal i s compl i cat ed procedur al l y, as not ed above,

because, al t hough Appel l ant appeal ed f r om bot h t he or der

di smi ss i ng t he Adver sar y Pr oceedi ng and an order denyi ng

Appel l ant ' s f i r st mot i on f or r econsi der at i on of t he di smi ssal

or der , t he mot i ons panel l i mi t ed t he scope of r evi ew t o deni al

of t he mot i on f or r econsi der at i on f i l ed on Febr uar y 27, 2012

( Mot i on) , as t he not i ce of appeal was unt i mel y as t o t he

di smi ssal or der . 4 Ther ef or e, t he f act s set f or t h bel ow ar e

l i mi t ed t o t hose bear i ng on t he Mot i on.On Apr i l 19, 2011, Appel l ee f i l ed a vol unt ar y pet i t i on f or

chapt er 7 r el i ef . On J une 15, 2011, Appel l ant f i l ed t he

Adver sar y Proceedi ng.

On Sept ember 1, 2011, t he bankr upt cy cour t hel d a f i r st

st at us conf er ence i n t he Adver sary Pr oceedi ng. Appel l ant s

at t or ney, Lor i Smi t h ( Smi t h) , f ai l ed t o appear or f i l e t he

r equi r ed pr e- hear i ng st at us repor t . However , Appel l ant di d

appear and i ndi cat ed t hat Appel l ant bel i eved t hat Smi t h woul d


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5 The mot i on al so was brought pur suant t o Local Rul e7041- 1( a) whi ch pr ovi des t hat [ a] pr oceedi ng t hat has beenpendi ng f or an unr easonabl e per i od of t i me wi t hout any act i onhavi ng been taken therei n may be di smi ssed f or want ofpr osecut i on upon not i ce and oppor t uni t y t o r equest a hear i ng.

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appear and was handl i ng t he case. Appel l ant al so expr essed

concer n about Smi t h s f ai l ur e t o communi cat e wi t h Appel l ant and

f ai l ur e to appear , causi ng Appel l ant t o pr oceed wi t hout counsel .

The bankr upt cy cour t expl ai ned t o Appel l ant t he nat ure of t her equi r ed st at us r epor t and t hat Appel l ant coul d ei t her t er mi nat e

Smi t h s r epr esent at i on and obt ai n new counsel or appear pr o se.

The bankr upt cy cour t f ur t her war ned Appel l ant t hat [ o] ne way or

t he ot her , [ Appel l ant has] t o do somet hi ng t o move t hi s case

ahead . . . , and t hat af t er t er mi nat i ng Smi t h, Appel l ant woul d

have per sonal r esponsi bi l i t y t o pr osecut e t he Adver sary

Pr oceedi ng i n an ef f ect i ve way. Hr g Tr . ( Sept . 1, 2011) at

7: 12- 13; 11: 3- 8. The bankrupt cy cour t emphasi zed t hat f ai l ur e

t o f i l e t he st at us r epor t was a gr ound f or di smi ssal and t hat a

st atus r eport woul d be requi r ed t wo weeks i n advance of t he

cont i nued hear i ng whi ch the bankr upt cy cour t woul d schedul e.

On J anuar y 13, 2012, Appel l ee f i l ed a mot i on t o di smi ss t he

Adver sar y Pr oceedi ng f or l ack of pr osecut i on under Rul e 7041.5

On Febr uary 2, 2012, t he bankr upt cy cour t hel d a cont i nued

st at us conf er ence i n t he Adver sary Pr oceedi ng and al so

consi der ed Appel l ee s mot i on t o di smi ss. Agai n, Smi t h f ai l ed t o

f i l e t he r equi r ed st at us r epor t , but di d appear at t he hear i ng.

The bankr upt cy cour t began by not i ng t hat t he case was seven

mont hs ol d. The cour t t hen out l i ned t he st andar ds requi r ed f or

di l i gent pr osecut i on of t he case under t he l ocal r ul es i ncl udi ng


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shar i ng i nf or mat i on and communi cat i on bet ween t he par t i es. I t

concl uded t hat [ t he cour t ] pr et t y consi st ent l y [ had] not had

much of a showi ng of any compl i ance wi t h st andards t hat I ve

j ust out l i ned f r om t he Pl ai nt i f f s si de. I d. at 1: 21- 25,2: 1- 8.

The bankrupt cy cour t i ni t i al l y war ned t hat [ t he l at e

f i l i ng of r epor t s] i s unaccept abl e, and i f t hat happens one mor e

t i me i n t hi s case, t hi s [ Adver sar y Pr oceedi ng] wi l l be

di smi ssed. I d. at 2: 11- 13. Fur t her , t he cour t made cl ear t hat

i f , [ Smi t h f ai l s] t o f ol l ow our r ul es and pr ocedur es, as

out l i ned i n our Local r ul es, and as I ve announced i n t hi s cour t

t o you bef or e, one mor e t i me, t hi s case wi l l be di smi ssed f or

l ack of di l i gent pr osecut i on. I d. at 2: 14- 17. Bef or e hear i ng

f r om Smi t h, t he cour t concl uded by sayi ng t hat t hi s case i s

wast i ng a l ot of t he Def endant s t i me. Thi s case i s wast i ng a

l ot of t he Cour t s t i me, and t hi s i s pr obabl y one of t he busi est

cour t s i n t he count r y. I d. at 4: 2- 5.Smi t h f i r st al l eged t hat t her e has been a compl et e and

i r r edeemabl e br eakdown of r el at i onshi p bet ween t he cl i ent and

t he at t or ney. I d. at 4: 16- 18. Smi t h f ur t her t ol d t he cour t

that:

[ Appel l ant ] has r ef used t o - - t o si gn a subst i t ut i onof at t or ney. [ Appel l ant ] has made a t er r or i st t hr eatagai nst me. [ Appel l ant ] has been al l eged t o have

sexual l y assaul t ed, on t wo separ at e occasi ons, one oft he women t hat was worki ng on hi s case. [ Appel l ant ]has f i l ed a compl ai nt agai nst me wi t h t he St at e Bar . .. . I ve been advi sed t o get out of any cases I mwi t h [ Appel l ant ] as soon as possi bl e. I d. at 5: 20- 25,5: 1- 2.

Smi t h t hen asked t he bankrupt cy cour t i f a cour t secur i t y

of f i cer coul d accompany Smi t h out of t he cour t r oom because Smi t h


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6 Though t he r ecor d i s not ent i r el y cl ear , t he ot hercour t hear i ngs ar e pr esumabl y hear i ngs i n whi ch Smi t h was t oappear as Appel l ant s at t or ney i n t he rel at ed pr epet i t i on st at ecour t f r aud case agai nst Appel l ee.

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was af r ai d of Appel l ant . The bankrupt cy cour t assur ed Smi t h

t hat an escor t woul d be pr ovi ded. Fi nal l y, Smi t h al l eged t hat

Appel l ant and Smi t h di d not have a f ee agr eement whi ch covered

f ees r el at ed t o t r i al and t hat Appel l ant i nsi st ed t hat Smi t h got o t r i al wi t hout f ur t her payment .

The bankrupt cy cour t t hen gave Appel l ant an oppor t uni t y t o

speak t o t he al l egat i ons t o whi ch t he Appel l ant r esponded t hat

100- per cent t hey r e l i es. I d. at 6: 21. Appel l ant t ol d t he

cour t t hat Appel l ant had pai d Smi t h an $8, 500 r et ai ner , whi ch

Smi t h had r equest ed, and Smi t h had f ai l ed t o appear at si x

hear i ngs, i ncl udi ng hear i ngs bef or e t he bankrupt cy cour t and

hear i ngs i n ot her cour t s. 6 Appel l ant concl uded, r equest i ng

f r om t he cour t t i me t o f i nd new counsel , sayi ng t hat :

I m goi ng t o need counsel , and si nce Ms. Smi t h has notf ul f i l l ed her obl i gat i on f or t he r et ent i on and t her et ai ni ng by me gi vi ng her money, I woul d l i ke t hat t he r et ai ner back so that I can obt ai n counsel t hatar e vi abl e, ver y r el i abl e counsel , so t hat I cancont i nue t hi s. I d. at 8: 22 - 9: 5.

The bankrupt cy cour t t hen proceeded t o di smi ss t he

Adver sar y Pr oceedi ng f or l ack of di l i gent pr osecut i on. As bases

f or i t s r ul i ng, t he bankrupt cy cour t not ed t hat t he case had

been pendi ng f or seven mont hs, and f or t he cour t t o l ear n of t he

f ai l ed r el at i onshi p bet ween Smi t h and Appel l ant at t hi s l at e

st age was an i nexcusabl e bur den on t he [Appel l ee] , and on t he

l egal pr ocess, and on t hi s Cour t . I d. at 9: 13- 20. On Febr uar y


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7 The mot i ons panel det er mi ned t hat because t he Mot i onpur suant t o Ci vi l Rul e 59 or Ci vi l Rul e 60, made appl i cabl e i nadver sar y pr oceedi ngs by Rul e 9023 and Rul e 9024 respect i vel y,was not f i l ed wi t hi n f our t een days af t er t he Di smi ssal Or der wasent er ed, t he f our t een day t i me l i mi t t o f i l e a not i ce of appealwas not t ol l ed pur suant t o Rul e 8002( b) . Ther ef or e, t he mot i onspanel hel d t hat no j ur i sdi ct i on exi st ed t o hear t he appeal of t heDi smi ssal Or der . However , because t he deni al of t he Mot i oni t sel f was appeal ed wi t hi n f our t een days, pur suant t oRul e 8002( a) , j ur i sdi ct i on was pr oper as t o deni al of t he Mot i on.

Or der of Mot i ons Panel r e mot i on f or extensi on of t i me, scope ofappeal & compl et i on of t he r ecor d ( Li mi t i ng Or der ) ( gr ant ed i npart ) , May 7, 2012.

8 On J une 7, 2012, Appel l ant f i l ed a Request f or BAP t oConsi der Di smi ssal whi ch t he mot i ons panel consi dered as anunt i mel y mot i on f or r econsi der at i on of t he Li mi t i ng Or der .Though unt i mel y, t he mot i ons panel addressed t he mer i t s of t he

( cont i nued. . . )

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8, 2012, t he bankrupt cy cour t ent er ed a wr i t t en or der di smi ssi ng

( Di smi ssal Or der ) t he Adver sary Pr oceedi ng f or t he reasons

st at ed on t he r ecor d at t he Febr uar y 2, 2012 hear i ng.

On Febr uar y 27, 2012, Appel l ant i n pr o se f i l ed t he Mot i on,ni net een days af t er t he dat e of ent r y of t he Di smi ssal Or der .

On March 1, 2012, t he cour t summar i l y deni ed t he Mot i on by

wr i t i ng Mot i on deni ed i n handwr i t i ng i n t he upper - r i ght cor ner

of t he f i r st page of t he Mot i on, dat ed and i ni t i al ed i mmedi at el y

bel ow. No f i ndi ngs of f act or concl usi ons of l aw wer e docket ed

separ at el y, nor wr i t t en on t he f ace of t he Mot i on.

On Mar ch 13, 2012, Appel l ant f i l ed a not i ce of appeal

( Not i ce) f r om t he Di smi ssal Or der and t he March 1, 2012 deni al

of t he Mot i on. On May 7, 2012, t he mot i ons panel l i mi t ed t he

scope of t he appeal t o revi ew of t he Mot i on because t he Not i ce

of Appeal was unt i mel y as t o t he Di smi ssal Or der , 7 but not as t o

t he Mot i on. 8


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8( . . . cont i nued)mot i on and deni ed t he mot i on by order ent ered on August 20, 2012.Or der of Mot i ons Panel r e Appel l ant s r equest f or BAP t o

consi der di smi ssal ( deni ed) , August 20, 2012.9 The Ci vi l Rul es do not r ecogni ze mot i ons f or

r econsi der at i on. Capt ai n Bl yther s, I nc. v. Thompson ( I n r eCapt ai n Bl yt her s, I nc. ) , 311 B. R. 530, 539 ( 9t h Ci r . BAP 2004) .The Ci vi l Rul es do provi de, however , t wo avenues t hrough whi ch apar t y may obt ai n post - j udgment r el i ef : ( 1) a mot i on t o al t er oramend j udgment under Ci vi l Rul e 59; and ( 2) a mot i on f or r el i eff r om j udgment under Ci vi l Rul e 60.

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II. JURISDICTION

The bankrupt cy cour t had j ur i sdi ct i on under 28 U. S. C.

1334 and 157( b) ( 2) ( I ) . We have j ur i sdi ct i on under 28 U. S. C.

158.III. ISSUES

1. Whet her t he bankrupt cy cour t f ai l ed t o make suf f i ci ent

f i ndi ngs of f act and concl usi ons of l aw t o al l ow f or meani ngf ul

r evi ew.

2. Whet her t he bankrupt cy cour t abused i t s di scr et i on i n

denyi ng t he Mot i on.

IV. STANDARDS OF REVIEW

We r evi ew t he bankrupt cy cour t ' s deni al of t he Mot i on f or

abuse of di scr et i on. 9 Ar r ow El ecs. , I nc. v. J ust us

( I n r e Kaypr o) , 218 F. 3d 1070, 1073 ( 9t h Ci r . 2000) ; Sewel l v.

MGF Fundi ng, I nc. ( I n r e Sewel l ) , 345 B. R. 174, 178 ( 9t h Ci r .

BAP 2007) . We appl y a t wo- par t t est t o det er mi ne obj ect i vel y

whet her t he bankrupt cy cour t abused i t s di scr et i on. Uni t edSt at es v. Hi nkson, 585 F. 3d 1247, 1261- 62 ( 9t h Ci r .

2009) ( en banc) . Fi r st , we det ermi ne de novo whether t he

bankr upt cy cour t i dent i f i ed t he cor r ect l egal r ul e t o appl y t o


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t he r el i ef r equest ed. I d. Second, we exami ne t he bankrupt cy

cour t s f act ual f i ndi ngs under t he cl ear l y er r oneous st andar d.

I d. at 1262 & n. 20. De novo means r evi ew i s i ndependent , wi t h

no def er ence gi ven t o t he t r i al cour t ' s concl usi on. See Fi r stAve. W. Bl dg. , LLC v. J ames ( I n r e Onecast Medi a, I nc. ) ,

439 F. 3d 558, 561 ( 9t h Ci r . 2006) .

Wher e a par t y f i l es a mot i on f or r econsi der at i on wi t hi n

14 days f ol l owi ng t he dat e of ent r y of t he j udgment or or der ,

t he mot i on i s t r eat ed as a mot i on t o al t er or amend the j udgment

under Ci vi l Rul e 59( e) . Am. I r onwor ks & Er ect or s, I nc. v.

N. Am. Const r . Cor p. , 248 F. 3d 892, 898- 99 ( 9t h Ci r . 2001)

( ci t at i on omi t t ed) . Such a mot i on i s anal ogous t o a mot i on f or

new t r i al or t o al t er or amend t he j udgment pur suant t o [Ci vi l

Rul e] 59 as i ncorporated by Rul e 9023. Uni t ed St udent Funds,

I nc. v. Wyl i e ( I n r e Wyl i e) , 349 B. R. 204, 209 ( 9t h Ci r . BAP

2006) .

However , where the f our t een day t i me f or appeal hasexpi r ed, a mot i on f or r econsi der at i on shoul d be const r ued as a

mot i on f or r el i ef f r om j udgment under Ci vi l Rul e 60( b) . Negr et e

v. Bl eau ( I n r e Negr et e) , 183 B. R. 195, 197 ( 9t h Ci r . BAP

1995) ( ci t i ng I n r e Cl eanmast er I ndus. , I nc. , 106 B. R. 628, 630

( 9t h Ci r . BAP 1989) ( i nt er nal ci t at i ons omi t t ed) ) . Ci vi l

Rul e 60( b) pr ovi des t hat r el i ef may be gr ant ed f r om an or der f or

sever al r easons, i ncl udi ng ( 1) mi st ake, i nadver t ence, sur pr i se,

or excusabl e negl ect ; ( 2) newl y di scover ed evi dence; and ( 3) any


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10

Ci vi l Rul e 60( b) pr ovi des t hat :

On mot i on and j ust t er ms, t he cour t may r el i eve a par t yor i t s l egal r epr esent at i ve f r om a f i nal j udgment ,or der , or pr oceedi ng f or t he f ol l owi ng r easons:

( 1) mi st ake, i nadver t ence, sur pr i se, or excusabl enegl ect ;( 2) newl y di scover ed evi dence t hat , wi t h r easonabl edi l i gence, coul d not have been di scover ed i n t i me t omove f or a new t r i al under Rul e 59( b) ;

( 3) f r aud ( whet her pr evi ousl y cal l ed i nt r i nsi c orext r i nsi c) , mi sr epr esent at i on, or mi sconduct by anopposi ng part y;( 4) t he j udgment i s voi d;( 5) t he j udgment has been sat i sf i ed, r el eased, ordi schar ged; i t i s based on an ear l i er j udgment t hat hasbeen r ever sed or vacat ed; or appl yi ng i t pr ospect i vel yi s no l onger equi t abl e; or( 6) any ot her r eason t hat j ust i f i es r el i ef .

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ot her r eason t hat j ust i f i es rel i ef . 10 Rel i ef f r om j udgment f or

any ot her r eason under Ci vi l Rul e 60( b) ( 6) shoul d be l i mi t ed

onl y t o except i onal or ext r aor di nar y ci r cumst ances, and t he

movi ng par t y bear s t he bur den of est abl i shi ng t he exi st ence of

such ci r cumst ances. Negr et e, 183 B. R. at 197. I n t he

ci r cumst ances of t hi s appeal , we concl ude t hat anal ysi s under

Ci vi l Rul e 60( b) appl i es.

A mot i on f or r econsi der at i on of an or der di smi ssi ng an

adver sar y pr oceedi ng i s a cont est ed mat t er under Rul e 9014,

subj ect t o Ci vi l Rul e 52( a) by i ncor por at i on under Rul e 7052,

whi ch r equi r es t he bankrupt cy cour t t o f i nd t he f act s

speci f i cal l y and st at e i t s concl usi ons of l aw separ at el y. I n

t he absence of compl et e f i ndi ngs, we may vacat e a j udgment and

r emand t he case t o the bankr upt cy cour t t o make t he requi r ed

f i ndi ngs or devel op f ur t her evi dence. I n r e Fi r st Yor kshi r e


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Hol di ngs, I nc. , 470 B. R. 864, 871 ( 9t h Ci r . BAP 2012) ( ci t i ng

Uni t ed St at es. v. Amel i ne, 409 F. 3d 1073, 1079 ( 9t h Ci r . 2005) ) ;

Rul e 8013.

V. DISCUSSION

The bankr upt cy cour t f ai l ed t o make speci f i c f i ndi ngs of f actand concl usi ons of l aw i n denyi ng t he Mot i on.

1. Ar gument s on Appeal

Appel l ant ar gues on appeal t hat gr oss negl i gence of counsel

i s an appr opr i at e gr ound f or r el i ef pur suant t o Ci vi l Rul e 60( b)

f r om an or der of di smi ssal f or f ai l ur e t o pr osecut e, and,

t her ef or e, t he bankrupt cy cour t abused i t s di scr et i on by denyi ng

t he Mot i on on t he f act s present ed.

For suppor t , Appel l ant f i r st ci t es Cmt y. Dent al Ser vs. v.

Tani , 282 F. 3d 1164, 1168 ( 9th Ci r . 2002) , where t he Ni nth

Ci r cui t hel d t hat a def aul t j udgment may be set asi de under t he

cat ch al l cl ause of Ci vi l Rul e 60( b) ( 6) . Speci f i cal l y, t he

cour t hel d t hat a par t y mer i t s r el i ef under Rul e 60( b) ( 6) i f hedemonst r ates ' ext r aor di nary ci r cumst ances whi ch pr event ed or

r ender ed hi m unabl e t o pr osecut e [ hi s case] . ' I d. ( ci t i ng

Mart el l a v. Mar i ne Cooks & St ewards Uni on, 448 F. 2d 729, 730

( 9t h Ci r . 1971) ( per cur i am) ) . To be ent i t l ed t o r el i ef , t he

part y must demonst r ate both i nj ur y and ci r cumst ances beyond hi s

cont r ol t hat pr event ed hi m f r om pr oceedi ng wi t h t he pr osecut i on

or def ense of t he act i on i n a pr oper f ashi on. Tani , 282 F. 3d

at 1168 ( ci t i ng Uni t ed St at es v. Al pi ne Land & Reservoi r Co. ,

984 F. 2d 1047, 1049 ( 9t h Ci r . 1993) ) .

I n hol di ng t hat gr oss negl i gence of counsel may pr ovi de a

basi s f or r el i ef , t he Tani cour t di st i ngui shed negl i gent act s of


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counsel , whi ch ar e at t r i but abl e t o t he cl i ent under an agency

t heor y, f r om t he mor e unusual case of ext r eme or gr oss

negl i gence whi ch i s negl ect so gr oss t hat i t i s i nexcusabl e.

I d. at 1168. For exampl e, t he Tani cour t ci t ed L. P. St euar t ,I nc. v. Mat t hews, 329 F. 2d 234, 235 ( D. C. Ci r . 1964) , f or t he

pr oposi t i on t hat [ Ci vi l Rul e] 60( b) ( 6) ' i s br oad enough t o

per mi t r el i ef when as i n t hi s case per sonal pr obl ems of counsel

cause hi m gr ossl y t o negl ect a di l i gent cl i ent ' s case and

mi sl ead t he cl i ent . ' Tani , 282 F. 3d at 1169. Fur t her , even

t hough a cl i ent choosi ng i ncompet ent counsel t ypi cal l y r i sks

suf f er i ng any negat i ve consequences as a r esul t , a cl i ent shoul d

not suf f er t he ul t i mat e sanct i on of l osi ng hi s case wi t hout any

consi der at i on of t he mer i t s because of hi s at t or ney' s negl ect

and i nat t ent i on, f or exampl e wher e t her e i s evi dence of

counsel ' s bl at ant di sregar d f or expl i ci t [ cour t ] or der s. I d.

at 1168- 69 ( ci t i ng Shepar d Cl ai ms Ser v. , I nc. v. Wi l l i am Dar r ah

& Assocs. , 796 F. 2d 190, 195 ( 6t h Ci r . 1986) ; Car t er v. Al ber tEi nst ei n Med. Ct r . , 804 F. 2d 805, 806 ( 3d Ci r . 1986) ) .

Because t he appel l ant ' s l awyer i n t he Tani case vi r t ual l y

abandoned t he cl i ent by f ai l i ng, i nt er al i a, t o pr oceed despi t e

cour t or der s, t o at t end hear i ngs and f i l e paper s, and most

especi al l y, by dupi ng t he cl i ent by repr esent i ng t o t he cl i ent

t hat t he case was pr oceedi ng pr oper l y, t he Ni nt h Ci r cui t

ul t i mat el y r ever sed t he t r i al cour t , whi ch had hel d t he

appel l ant r esponsi bl e f or t he l awyer ' s f ai l ur es, and hel d t hat

t he unknowi ng cl i ent shoul d not be hel d l i abl e on t he basi s of

a def aul t j udgment r esul t i ng f r om an at t or ney' s gr ossl y

negl i gent conduct , and t hat i n such cases sanct i ons shoul d be


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The Ni nth Ci r cui t al so di sagr eed wi t h t he di st r i ctcour t t hat t he appel l ant ' s r emedy shoul d be a separ at e act i on f ormal pr act i ce, r at her t han r el i ef f r om t he def aul t j udgment . TheNi nt h Ci r cui t r easoned t hat whi l e mal pr act i ce was a possi bi l i t y,t he remedy was i nsuf f i ci ent due t o del ay, i ncr eased l oad on t hecour t s, and t he uncer t ai nt y of r ecei vi ng a money j udgment i n amal pr act i ce act i on, whi l e t he cl i ent may have t o pay outsubst ant i al sums bef or e the act i on concl udes many year s i n t hef ut ur e. I d. at 1171.

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i mposed on t he l awyer , r at her t han on t he f aul t l ess cl i ent .

Tani , 282 F. 3d at 1168, 1171. Under l yi ng t he hol di ng, t he Tani

cour t expl ai ned t hat because def aul t i s an ext r eme measure, t he

j udi ci al syst em l oses cr edi bi l i t y as wel l as t he appear ance off ai r ness, i f t he r esul t i s t hat an i nnocent par t y i s f or ced t o

suf f er dr ast i c consequences. I d. at 1170. 11

Appel l ant f ur t her ar gues t hat an at t or ney' s f ai l ur e t o

pr osecut e a case on behal f of t he pl ai nt i f f i s an ext r aor di nar y

ci r cumst ance under Ci vi l Rul e 60( b) war r ant i ng r el i ef f r om an

or der of di smi ssal , ci t i ng Lal v. Cal . , 610 F. 3d 518, 524 ( 9t h

Ci r . 2010) . I n Lal , t he Ni nt h Ci r cui t appr ovi ngl y ci t ed Tani

wi t h r espect t o def aul t j udgment s and appl i ed t he Tani r easoni ng

t o gr oss negl i gence of counsel r esul t i ng i n di smi ssal wi t h

pr ej udi ce f or f ai l ur e t o pr osecut e. I d. The cour t r easoned

t hat [ d] i smi ssal wi t h pr ej udi ce under [ Ci vi l ] Rul e 41( b) f or

f ai l ur e t o pr osecut e i s the conver se of a def aul t j udgment . I n

bot h i nst ances, t he consequence of t he at t or ney' s act i on ( ori nact i on) i s a l oss of t he case on t he mer i t s. The onl y

si gni f i cant di f f er ence i s t hat t he pl ai nt i f f r at her t han t he

def endant suf f er s t he adver se j udgment . I d. I n Lal , t he

pl ai nt i f f ' s counsel f ai l ed t o make di scl osur es, at t end st at us


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conf er ences, and at t end hear i ngs. I d. at 525. I n addi t i on, as

i n Tani , t he at t or ney i n Lal del i ber at el y mi sl ed t he cl i ent

r egar di ng t he st at us of t he case. I d. The Lal cour t r ever sed

t he t r i al cour t and hel d t hat t he Ci vi l Rul e 60( b) mot i on f orr el i ef shoul d have been gr ant ed. I d. at 527.

Appel l ant al l eges by decl ar at i on on appeal t hat Appel l ant s

at t or ney, Smi t h, f ai l ed t o f i l e st at us r epor t s, f ai l ed t o show

up f or sever al hear i ngs, f ai l ed t o oppose t he mot i on t o di smi ss,

f ai l ed t o r espond t o di scover y r equest s, f ai l ed t o r et ur n phone

cal l s, and was unt r ut hf ul about t he st at us of t he case.

St ephens Dec. ( J ul y 2012) at 2. Fur t her , Smi t h decl ar ed t hat

she was f ound gui l t y by the St at e Bar of Cal i f or ni a f or , i nt er

al i a, not pr oper l y communi cat i ng wi t h t he Appel l ant and not

r espondi ng to di scover y wi t h respect t o t he Adver sary

Proceedi ng. Smi t h Dec. ( J une 11, 2012) at 3. Smi t h f ur t her

st at es t hat Appel l ant f i l ed t he St at e Bar compl ai nt pr i or t o t he

Febr uary 2, 2012 hear i ng at whi ch Smi t h f ai l ed to pr oduce ast at us r epor t , f ai l ed adequat el y t o expl ai n t he f ai l ur e t o

pr oduce di scover y, and al l eged a t otal br eakdown of

communi cat i ons wi t h Appel l ant . I d. at 2. Smi t h st at es

f i nal l y t hat [ b] ecause of my behavi or , Mr . St ephens was unabl e

t o pr esent or have pr esent ed hi s case pr oper l y. . . . I d. at

5.

I n r esponse, Appel l ee f i r st ar gues t hat t he Mot i on shoul d

be t r eat ed as a mot i on pur suant t o Ci vi l Rul e 59 r at her t han

Ci vi l Rul e 60 because, accor di ng t o Appel l ee wi t hout r ef er ence

t o any dat es i n Appel l ee' s Openi ng Br i ef , Appel l ant f i l ed t he

Mot i on wi t hi n t he f our t een day appeal per i od. However , Appel l ee


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i s i n er r or because, as not ed above, t he Mot i on was f i l ed on

Febr uary 27, 2012, ni net een days af t er t he Di smi ssal Or der was

ent er ed. Next , Appel l ee argues that t he bankr upt cy cour t

pr oper l y deni ed t he Mot i on under Ci vi l Rul e 60( b) , ar gui ng t hatAppel l ant f ai l ed t o show t hat any of t he Ci vi l Rul e 60( b)

condi t i ons wer e pr esent i n t hi s case. Appel l ee al l eges that

Appel l ant pr oduced no new evi dence, nor evi dence of f r aud, nor

t hat t he or der i s voi d, nor f i nal l y t hat t he or der has been

sat i sf i ed, r el eased, or di schar ged. Appel l ee st at es t hat

because Appel l ant had ampl e t i me, af t er war ni ng f r om t he

bankr upt cy cour t , t o change counsel dur i ng t he ei ght mont hs

whi l e t he case was pendi ng, Appel l ant was not deni ed ef f ect i ve

assi st ance of counsel . Appel l ee f ur t her cont ends t hat under t he

r easoni ng of I n r e Wi l l i ams, 287 B. R. 787 ( 9t h Ci r . 2002) ,

hol di ng t hat Appel l ant has t he bur den of pr ovi di ng an adequat e

r ecor d on appeal , t he appeal shoul d be di smi ssed because t he

r ecor d i s i nadequate t o show t hat t he bankr upt cy cour t abusedi t s di scret i on.

2. New Evi dence i n t he Mot i on f or Reconsi der at i on

I n t he Mot i on, Appel l ant ur ged t he cour t t o consi der t hat

t he or der had been gr ant ed wi t hout f ul l f act s bei ng pr esent ed

i n t he case. Though many of t he f act s asser t ed i n t he Mot i on

ar e si mpl y reasser t i ons of f act s t hat Appel l ant al l eged dur i ng

t he t wo st at us conf er ence hear i ngs or i n ot her f i l i ngs,

Appel l ant al l eged t hat af t er sever al r equest s f or r et ur n of

Appel l ant s f i l e, Smi t h r ef used t o r et ur n Appel l ant s compl et e

f i l e. Appel l ant f ur t her al l eged t hat Appel l ant di d sear ch f or

other at t orneys and t hat at t orneys wi t h whomhe spoke gave


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12 On March 9, 2012, Appel l ant f i l ed a second mot i on f orr econsi der at i on of t he di smi ssal of t he Adver sary Pr oceedi ng

( cont i nued. . . )

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Appel l ant addi t i onal i nf or mat i on wi t h r espect t o Smi t h s

di f f i cul t i es ser vi ng cl i ent s. Appel l ant al so al l eged t hat on a

weekl y basi s, Appel l ant asked Smi t h s of f i ce t o pr ovi de st at us

i nf or mat i on and a l i st of compl et ed act i vi t i es wi t h r espect t ot he Adver sary Proceedi ng, whi ch Appel l ant f ur t her al l eges was

pr ovi ded, but whi ch was f al si f i ed t o i ncl ude compl et i on of t asks

not act ual l y per f or med.

I n addi t i on, Appel l ant gave mor e speci f i c i nf or mat i on about

t he l ar ger scope of Smi t h s di f f i cul t i es and Appel l ant s

knowl edge of t hose i ssues by al l egi ng t hat not unt i l wel l i nt o

our hi st or y di d Appel l ant l ear n t hat Smi t h had been r epor t ed

[ by f our ( 4) ] ot her cl i ent s, wi t h [ el even] i nci dent s, f or l ack

of doi ng her j ob . . . .

3. Bankrupt cy Court ' s Hol di ng

The cour t deni ed t he Mot i on by wr i t i ng Mot i on deni ed i n

handwr i t i ng i n t he upper - r i ght hand cor ner of t he Mot i on paper s

and i ni t i al i ng i mmedi at el y bel ow, wi t h not hi ng mor e. Nosepar at e f i ndi ngs of f act or concl usi ons of l aw wer e docket ed,

nor wr i t t en on t he f ace of t he Mot i on. Because t he bankrupt cy

cour t di d not make any f i ndi ngs of f act or concl usi ons of l aw

wi t h r egar d t o t he Mot i on, t he Panel does not have a basi s f or

eval uat i ng whet her t he bankrupt cy cour t abused i t s di scr et i on i n

t hi s appeal . Theref ore, t he mat t er i s VACATED and REMANDED t o

t he bankrupt cy cour t f or f i ndi ngs of f act and concl usi ons of l aw

pur suant t o Rul es 7052 and 9014. 12


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( . . . cont i nued)( Second Mot i on) . On March 23, 2012, t he bankr upt cy cour tdeni ed t he Second Mot i on by wr i t t en or der st at i ng i n one l i net hat Mr . St ephens' Mot i on f or Reconsi der at i on of t he or derdenyi ng hi s Mot i on f or Reconsi der at i on i s her eby DENI ED. Thoughnot bef or e us, t he Panel woul d not be abl e t o revi ew adequat el ydeni al of t he Second Mot i on any more than t he deni al of t heMot i on i n t hi s appeal due t o t he same l ack of f i ndi ngs of f actand concl usi ons of l aw.

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VI. CONCLUSION

The bankrupt cy cour t f ai l ed t o make speci f i c f i ndi ngs of

f act and concl usi ons of l aw on t he r ecor d suf f i ci ent t o al l ow

r evi ew of i t s deni al of t he Mot i on when i t made onl y ahandwr i t t en st at ement on t he f ace of t he Mot i on t hat t he Mot i on

was deni ed. Accor di ngl y, we VACATE t he order denyi ng t he Mot i on

and REMAND f or f i ndi ngs of f act and concl usi ons of l aw

consi st ent wi t h t hi s Memor andum di sposi t i on.

in re: marcelo britto gomez, 9th cir. bap (2012)

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