R. Meruelo v. Meruelo Maddux Properties, Inc. (In re Meruelo Maddux Properties, Inc.)

BAP No. CC-12-1304-TaMoMk (B.A.P. 9th Cir. May 6, 2013) (NOT FOR PUBLICATION)
The Bankruptcy Appellate Panel of the Ninth Circuit VACATED the bankruptcy court's order disallowing Claims (only with respect to guaranty liabilities and bankruptcy legal fees) and REMANDED the matter to the bankruptcy court so that it may make required findings regarding those particular aspects of the claim. The panel, however, AFFIRMED the bankruptcy court's order disallowing Claims (only with respect to the payment on a judgment), as that aspect of Claims was not addressed by appellant in his statement of issues on appeal, in his opening or reply brief, or in a substantive fashion at oral argument. (A) The record showed that the bankruptcy court made no findings in relation to either of the pre-petition agreements. The absence of such findings and general inability to glean such information from the record hampered the panel's ability to conduct a proper reivew of the relevant agreements. Therefore, the panel could not complete a de novo review of whether one or both of the agreements established a basis for Claims. The panel remanded the matter with instructions that the bankruptcy court make findings as required by Fed. R. Civ. P. 52(a), as incorporated by Fed. R. Bankr. P. 7052 (B) As to the claim based on the payment of a judgment, appellant waived his arguments. Although the bankruptcy court may or may not have rendered sufficient findings on the judgment claim, appellant bore the burden of articulating a basis for reversal. His simply appealing the disallowance order in its entirety was insufficient to support his challenge as to this aspect of Claims.
Procedural context:
Debtors objected to proofs of claim filed by appellant ("Claims") and moved for disallowance. The bankruptcy court granted Debtors' motion and this appeal ensued.
Appellant asserted Claims for indemnification for liabilities that appellant incurred in defending actions and proceedings based on guaranties that he executed for the benefit of Debtors, for fees he incurred in connection with Debtors' bankruptcies, and for payment on a judgment. Debtors moved for disallowance of Claims, arguing that neither of two pre-petition agreements formed a basis for appellant's reimbursement claims and that disallowance under section 502(e)(1)(B) was warranted because Claims were contingent. Appellant submitted an amended proof of claim, changing the amounts owed, but still asserting a right to reimbursement and indemnification based on the agreements. Because Debtors did not properly serve appellant with the disallowance motion, the matter was continued and Debtors renewed their prior objections but also asserted arguments based on waiver and other contractual issues. Debtors further argued that the claim based on the judgment was unenforceable because the judgment creditor did not file a proof of claim and that the claim based on the legal fees should be disallowed because the law firm had direct claims against Debtors. After hearing the disallowance motion, the bankruptcy court granted it in its entirety. It disallowed the claim for legal fees because the fees were not related to an indemnification purpose; disallowed guaranty liabilities for other attorney's fees because the law firm that incurred those fees was previously disqualified; and disallowed the claim based on the judgment because it was unenforceable in the bankruptcy case.
TAYLOR, MONTALI (sitting by designation), and MARKELL

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3511 in the system

3392 Summarized

5 Being Processed