Marciano v. Chapnick (In re Marciano)

No. 11-60070 (9th Cir. February 27, 2013)
The court held that (1) Debtor's motion to dismiss for improper service was properly denied, and (2) although on appeal, an unstayed judgment of a state court constitutes a claim against the debtor that is not contingent as to liability or the subject of a bona fide dispute as to liability or amount.
Procedural context:
Bankruptcy Court for the Central District of California (1) denied Debtor's motion to dismiss involuntary petition for defective service, and (2) granted summary judgment, holding that Petitioning Creditors did not file the involuntary petition in bad faith. The 9th Circuit BAP affirmed. Debtor appeals.
The petition and summons were served at the address listed by Debtor with the California Secretary of State as the place where he could be served with process as the agent for four of his businesses. Debtor appealed three judgments (for defamation and intentional infliction of emotional distress) by the trial court in favor of Petitioning Creditors, but did not post a bond, as required by state law, to stay them during appeal. Under state law, absent a stay, the claims are not contingent as to liability or amount, entitling Petitioning Creditors to immediate payment, and Petitioning Creditors possessed fully vested property interests in the claims.
Kirscher, Markell, and Dunn.

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