Adams v. Newport Crest Homeowners Assoc., Inc.
- Summarized by Lars Fuller , BakerHostetler
- 4 years 9 months ago
- Case Type:
- Consumer
- Case Status:
- Affirmed in part and Reversed in part
- Citation:
- BAP No. CC-17-1224-KuFS (9th Circuit, Aug 07,2018) Not Published
- Tag(s):
-
- Ruling:
- BAP for 9th Cir. affirmed in part and reversed in part ruling of bankruptcy court (CD Cal.) granting summary judgment to creditor on 11 USC 523 claim and claim of setoff and recoupment. Under "return to the fray doctrine," creditor could not have foreseen future claim for attorney's fees prior to expiration of 523 deadline. While claim "arose" prepetition, creditor had sufficient cause to reopen closed bankruptcy and obtain summary judgment. BAP vacated summary judgment on claims for setoff and recoupment based on lack of jurisdiction, directing that they be dismissed without prejudice.
- Procedural context:
- Bankruptcy court (CD Cal.) granted creditor's motion for summary judgment on multiple claims. Debtor appealed to BAP for 9th Cir.
- Facts:
- Prior to filing bankruptcy, debtor sued HOA and others in California state court seeking damages and remediation of her condo due to water intrusion, mold, and other issues. The parties mediated a settlement and dismissed case, however HOA failed to perform agreed remediation. Debtor moved to enforce settlement, but state court denied motion based on dismissal. Debtor appealed and at the same time filed second action to enforce the settlement agreement. With both matters pending, she filed bankruptcy. Postpetition, California appellate court affirmed denial of motion in dismissed action. Debtor received her chapter 7 discharge, and bankruptcy court closed case. Creditor moved for fees and costs in state court asserting it was prevailing party in motion to enforce settlement agreement and appeal of denial of motion. State court awarded fees and costs, and debtor appealed. State appellate court affirmed. HOA moved again for fees, and state court again awarded them. Meanwhile, in second lawsuit, following a trial, jury awarded debtor damages for HOA's breach of settlement agreement. HOA then moved to reopen bankruptcy case to file nondischargeability adversary to except fee awards from discharge, and for setoff and recoupment of attorney fee award against debtor's judgment for damages. HOA filed motion for summary judgment, and bankruptcy court granted summary judgment on 523 claim, setoff, and recoupment.
- Judge(s):
- Kurtz, Faris, Spraker
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