Barragan v. Brazil (In re Barragan)

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
11 years 6 months ago

Citation:

In re Barragan, BAP No. NC 13 1558 KuDJu (9th Cir. B.A.P. Aug. 26, 2014).

Tag(s):

Ruling:

A bankruptcy court lacks jurisdiction over an adversary proceeding having no relation to a bankruptcy case pending when the complaint was filed, even if the plaintiff files a bankruptcy petition after filing the complaint. Not-for-publication memorandum decision.

Procedural context:

In October 2013, Maria Barragan filed an adversary proceeding. She did not file a bankruptcy petition before commencing the adversary proceeding, and the proceeding had no relation to a pending bankruptcy case. After she filed the proceeding and before a hearing on the bankruptcy court’s sua sponte motion to show cause why the proceeding should not be dismissed for lack of subject-matter jurisdiction, she filed a chapter 13 petition. The bankruptcy court dismissed the proceeding, and the BAP affirmed.

Facts:

The appeal was not moot, and Barragan had standing to appeal, because (1) she would have to pay an additional filing fee to re-file the proceeding, and (2) it is conceivable that, sometime after commencing the proceeding, claims asserted in it had become time-barred, such that commencing a new action would prejudice her. Bankruptcy jurisdiction hinges on the existence of a bankruptcy case, and jurisdiction is assessed as of the date on which the complaint is filed. Thus, the later filing of the petition did not cure the jurisdictional defect. Barragan could have invoked FRCP 15(d) by obtaining authority to file a supplemental pleading describing the commencement of her bankruptcy case. But the bankruptcy court was not required to grant sua sponte leave to supplement the complaint.

Judge(s):

Frank L. Kurtz, Randall L. Dunn, and Meredith A. Jury, Bankruptcy Judges.

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