- BAP No. CC-13-1145-TaDKi
- The BAP affirmed the bankruptcy court’s decision. The BAP denied the Appellant’s request for Judicial Notice stating that it did not enhance the BAP’s view or otherwise assist in the appeal. Moreover, the BAP held the contempt Order was interlocutory; therefore, it merged with the award of sanction, thus per se expanding the scope of the appeal. Appellant conceded to the willful prong of the stay violation analysis. In regarding to the intentional prong, the BAP determined the Appellants continued pursuit in the state court action after receiving the notice of bankruptcy was intentional. The BAP further held that the Appellant’s argument regarding the award of sanctions is not controlling because the Debtor is not an individual.
- Procedural context:
- The bankruptcy court held appellants Rediger Investments Corp. (“Rediger”) and its counsel (collectively “Appellants”) in civil contempt for violation of the automatic stay. As a result of the bankruptcy court entered sanctions against Appellants in the amount of $23,072.09. The Appellant requested that the BAP take Judicial notice of certain documents filed in state court. The Debtor asserted that the Appellants appeal regarding the contempt Order was untimely. Appellant asserts that Debtor is not entitled to an award of sanctions for fees/costs incurred in pursuing dates for stay violation.
- Prior to H Grandos Communications (“Debtor”) commencing a Chapter 11, the Appellants were pursuing an unlawful detainer action in state court. Rediger was listed on the Debtor’s list of 20 largest unsecured creditors and the master mailing matrix; therefore, Rediger received prompt and proper notice of the bankruptcy. The Debtor additionally filed a Notice of Bankruptcy in state court. Thus Rediger’s state court counsel was also aware of the bankruptcy. One month after the case commenced Rediger, by and through the local sheriff, levied the Debtor’s debtor-in-possession account in the amount of $27,941.26. Debtor moved for an order to show cause why Appellants should not be held in contempt for willful violation of the automatic stay. In the interim, the Debtor further attempted to remedy / limit the harm of the stay violation. Approximately 60 days after the levy the funds were returned to the Debtor.
- Hon. Taylor, Dunn, and Kirscher
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