US BANK NATIONAL ASSOCIATION v. White

[2] 3 FILED & ENTERED [4] DEC 03 2019 [5] 6 CLERK U.S. BANKRUPTCY COURT Central District of California BY h a w k i n s o DEPUTY CLERK [7] 8 UNITED STATES BANKRUPTCY COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 RIVERSIDE DIVISION [11] 12 In re: Case No.: 6:19-bk-19432-WJ 13 HASAN MUSTAFA, CHAPTER 7 14 Debtor. Adv. Proc. No. 6:19-ap-01166-WJ [15] U.S. BANK NATIONAL ASSOCIATION, MEMORANDUM OF DECISION 16 SUA SPONTE REMANDING UNLAWFUL Plaintiff. DETAINER PROCEEDING TO STATE 17 COURT v. [18] HASAN MUSTAFA, [19] Defendant. [21] 22 On October 25, 2019, Hasan Mustafa (“Debtor”) filed an incomplete chapter 7 bankruptcy 23 case. It appears the Debtor filed the incomplete bankruptcy case to stall an eviction proceeding 24 pending in state court: U.S. Bank, National Association v. Hasan Mustafa, San Bernardino County 25 Superior Court, Case No. UDFS1903219 (“Eviction Proceeding”). In response, the plaintiff filed 26 an immediate motion for relief from stay [docket #13] which the Court granted by an order entered 27 on November 21, 2019 [docket #16]. The motion for relief from stay was unopposed. [28] 2 the Eviction Proceeding from state court to this Court on November 27, 2019. For the following 3 reasons, the Court hereby sua sponte remands the Eviction Proceeding back to state court. 4 First, the chapter 7 bankruptcy case has been dismissed. When the Debtor failed to file all 5 case initiation documents, the clerk of the Court issued a notice and an order1 indicating that the 6 case would be dismissed if the Debtor failed to file all case initiation documents by November 8, 7 2019. The Debtor did not do so.2 8 Instead, on November 8, 2019, the Debtor filed a motion to extend the deadline to 9 November 21, 2019 [docket #10]. However, the Debtor failed to file any case initiation documents 10 by November 21, 2019. Therefore, the motion was moot and denied on that basis. The clerk of the 11 Court then dismissed the case (pursuant to the deficiency notice and order) on December 3, 2019. 12 Under such circumstances, all adversary proceedings normally become moot and should be 13 dismissed. See California Practice Guide, Bankruptcy, (The Rutter Group 2012) § 1:995 (“[T]he 14 general rule is that related proceedings ordinarily should be dismissed following termination of the 15 underlying case.”); Porges v. Gruntal & Co., Inc., 44 F.3d 159, 162 (2nd Cir. 1995) (“We join 16 several other circuits in adopting the general rule that related proceedings ordinarily should be 17 dismissed following the termination of the underlying bankruptcy case. This general rule favors 18 dismissal because a bankruptcy court’s jurisdiction over such related proceedings depends on the 19 proceedings’ nexus to the underlying bankruptcy case. See In re Querner, 7 F.3d 1199 , 1201-02 20 (5th Cir.1993); In re Morris, 950 F.2d 1531 , 1533 (11th Cir.1992); In re Smith, 866 F.2d 576 , 580 21 (3d Cir.1989).”). [23] 24 1 See Docket #1-2 and 1-3. [25] 2 The Debtor has established a pattern of filing pro se incomplete bankruptcy cases which are then dismissed due to a failure to file the remaining case initiation documents or which fail for other reasons. See Case Number 1917882, Chapter 7 filed in California Central Bankruptcy on 09/06/2019, Dismissed for Failure to File Information on [26] 09/24/2019; Case Number 11-29086, Chapter 7 filed in California Central Bankruptcy on 06/10/2011, Case Number 11-32465, Chapter 13 filed in California Central Bankruptcy on 07/12/2011, Dismissed for Failure to File Information [27] on 08/09/2011 (Admin) (Entered: 10/28/2019); Dismissed for Failure to File Information on 07/01/2011; Case Number 14-18787, Chapter 13 filed in California Central Bankruptcy on 07/08/2014, Dismissed for Other Reason on 28 07/17/2014; Case Number 11-36790, Chapter 7 filed in California Central Bankruptcy on 08/22/2011. 2 bankruptcy system. See, e.g., In re Smith, 105 B.R. 50 , 53 & 55 (Bankr. C.D. Cal. 1989) 3 (describing cases filed to delay an eviction as “abusive” and designed to “delay improperly the 4 landlord from obtaining possession of his property.”). 5 Third, this is not the first bankruptcy case filed to prevent eviction. A prior bankruptcy case 6 was also filed. The prior bankruptcy case is discussed in the motion for relief from stay 7 [docket #13] on pages 13 and 14. 8 Fourth, the timing of the removal also appears manipulative. The motion for relief from 9 stay indicates that a continued trial date in the unlawful detainer action is set for December 3, 2019. 10 By filing the notice of removal last Wednesday, the Debtor appears to seek to delay the trial. 11 Fifth, according to the motion for relief from stay in the prior bankruptcy case, the Eviction 12 Proceeding was filed after a foreclosure sale that occurred in 2018. Therefore, the evidence 13 indicates the Debtor no longer has any ownership interest nor any possessory interest in the real 14 property at issue. 15 Sixth, the removed proceeding pertains to an unlawful detainer action and, in general, 16 “[b]ecause an unlawful detainer action is a summary proceeding designed to facilitate owners in 17 obtaining possession of their real property, cross-complaints, countercomplaints, and affirmative 18 defenses are inadmissible.” Lebbos v. Judges of Superior Court, Santa Clara County, 883 F.2d 810 , 19 815 (9th Cir. 1989); see also Thomas v. Housing Authority of the County of Los Angeles, 2005 20 WL 6136432 , at *9 (C.D. Cal. June 3, 2005) (“California does not permit a tenant in an unlawful 21 detainer action to assert counterclaims.”). 22 Seventh, bankruptcy courts have the power to sua sponte remand lawsuits removed to the 23 bankruptcy court. In re Bisno, 433 B.R. 753, 756-58 (Bankr. C.D. Cal. 2010)); see also California 24 Practice Guide, Bankruptcy, (The Rutter Group 2012) § 1:946 (“Sua sponte by bankruptcy court: 25 The bankruptcy court may remand a removed action sua sponte. [In re Bisno (BC CD CA 2010) [26] 433 BR 753, 758 ; Scherer v. Carroll (D VT 1993) 150 BR 549, 552 ; In re Ramada Inn-Paragould 27 Gen. Partnership (BC ED AR 1992) 138 BR 63, 65 ]”). [28] ] As aresult, when debtors remove eviction proceedings from state court to federal court, the 2 courts in this district have often sua sponte remanded them back to state court. See, e.g., EPDE v. 3 Pena, District Court Case 2:15-cv-00821-FMO-JPR (C.D. Cal. 2015) (sua sponte remand order 4 entered on February 9, 2015); Moreno Valley v. One Up Holistic, Adv. No. 6:16-ap-01226-MJ 5 (sua sponte remand order entered on September 2, 2016); Watson v. Sing, Adv. No. 6:16-ap6 01210-SY (sua sponte remand order entered on August 31, 2016); U.S. Bank Association v. 7 Bhakta, Adv. No. 6:15-ap-01279-MJ (Bankr. C.D. Cal. 2015) (sua sponte remand order entered on 8 October 7, 2015); Kim v. Kim, Adv. No. 2:14-ap-01482-NB (Bankr. C.D. Cal. 2014) (sua sponte 9 remand order entered on July 17, 2014); Federal National Mortgage Association v. Flores, Adv. 10 No. 6:11-ap-01047-MJ (Bankr. C.D. Cal. 2011) (sua sponte remand order entered on January 26, 11 2011); Blue Sea Blue Sky Inc. v. Wray, Adv. No. 6:09-ap-1700-MJ (Bankr. C.D. Cal. 2009) (sua 12 sponte remand order entered December 3, 2009); HSBC Bank USA, N.A. v. Powell, Adv. No. 13 6:10-ap-01084-MJ (Bankr. C.D. Cal. 2010) (sua sponte remand order entered on March 2, 2010); 14 Robles v. Abelian, Adv. No. 2:14-ap-01390-SK (Bankr. C.D. Cal. 2014) (sua sponte remand order 15 entered on June 18, 2014); Federal Home Loan Mortgage Corporation v. Hernandez, Adv. No. 16 2:14-ap-01067-WB (Bankr. C.D. Cal. 2014) (sua sponte remand order entered on July 10, 2014). 17 Accordingly, the Court shall enter a separate order remanding this adversary proceeding 18 back to state court. 19 Hitt [24] 25 . Date: December 3, 2019 Ip sa 28 United States Bankruptcy Judge