- Case Type:
- Case Status:
- BAP No. CC-19-1265-TaFL (9th Circuit, Jul 08,2020) Not Published
- BAP for 9th Cir. affirmed ruling of bankruptcy court (CD Cal.) awarding fraudulent transfer plaintiff-assignee damages, fees, and costs on 11 USC 544, 548, and 550 claims. Bankruptcy court did not err by excluding defendant's rebuttal expert witness or awarding fees. Bankruptcy court did not abuse discretion in finding defendant failed to act diligently to comply with expert disclosure deadline. Fee award based on prevailing party contract provision was appropriate based on c0-defendant's prior position it was entitled to fees when it prevailed on summary judgment on alter ego claim.
- Procedural context:
- Bankruptcy court (CD Cal.) entered judgment against defendant on fraudulent transfer claim. Defendant appealed to BAP for 9th Cir.
- Prepetition, Javedanfar, debtor, and Neman, MBN’s manager, invested in three parcels of real estate. Debtor obtained a partial fee interest in one of them and also acquired a partial interest in a limited liability company and a limited partnership that owned the others. Later and while insolvent, he transferred these interests to MBN under sale agreements; Neman was the MBN’s manager at that time. Within the year after the transfers, Debtor filed a chapter 7 petition. The chapter 7 Trustee timely filed an adversary proceeding against Neman and MBN to recover the transferred assets or their value. A year later, the Trustee sold and assigned the adversary proceeding claims to a third party, which then assigned them to JLAMP. Standing in the shoes of the Trustee, JLAMP filed a First Amended Complaint and alleged that Neman was liable as MBN’s alter ego. Thereafter, however, the bankruptcy court granted Neman summary judgment on JLAMP’s alter ego claim. Neman capped his victory with a motion seeking attorneys’ fees as the prevailing party. He argued that, even though he was not a signatory to the operative sales agreements, the attorneys’ fee provision contained in each agreement entitled him to fees under CCC § 17173 and California Code of Civil Procedure § 1021. While JLAMP opposed Neman’s request for fees on the grounds that he was not a signatory to the sale agreements, it did not otherwise dispute his entitlement argument. The bankruptcy court granted Neman's fee motion. After the summary judgment on the alter ego claim, the litigation continued. Two months after the deadline for designating rebuttal experts, MBN moved to requested JLAMP's agreement to allow it to untimely designate rebuttal experts, including an appraiser. The bankruptcy court denied the request. Following trial, bankruptcy court entered judgment against MBN and Neman, and awarded JLAMP its fees and costs.
- Taylor, Faris, Lafferty
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