Case Updates

Summary: In Badea v. Schwartzer (In re Badea),No. NV-18-1038-BTaL, 2018 WL 4441731 (9th Cir. BAP Sept. 17, 2018), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit ("BAP") vacated the order of a bankruptcy court holding the debtor in contempt and expunging a mechanics' lien recorded post-petition by the debtor after the chapter 7 trustee avoided the debtor's transfer of that property and remanded the matter with instructions to the parties and the court to consider the effect of 11 U.S.C. section 546(b). Read more

Summary: In In re Jeffrey Mark Freeman 2018 WL 4216653 (Bankr. C.D. Cal, 2018), the United States Bankruptcy Court for the Central District of California, Los Angeles Division held that the debtor had not met his burden to show any knowing violation of the discharge injunction. A copy of the decision can be reviewed here. Read more

Summary: The California Supreme Court has held that a foreclosure purchaser cannot serve a three-day notice to quit on a commercial tenant until the foreclosure trustee’s deed is recorded, despite a statute providing that the sale is “deemed perfected” on the sale date if the deed is recorded within 15 days. The decision may inadvertently imperil foreclosure sales followed by bankruptcy petitions filed in the gap between the sale date and the recording date. [Dr. Leevil, LLC, vs. Westlake Health Care Center, 2018 Westlaw 6597341 (Cal.).] Read more

Summary: The Ninth Circuit has held that a borrower's claims for rescission under TILA and for damages under state law are governed by the analogous state statute applicable to actions for breach of contract, rather than by TILA itself. [Hoang vs. Bank of America, N.A., 2018 Westlaw 6367268 (9th Cir.).] Read more

Summary: A California appellate court has held that a post-judgment examination of a non-debtor third-party is restricted to matters involving the judgment debtor's property held by that third party or debts owed to the judgment debtor. [Finance Holding Co., LLC vs. American Inst. of Certified Tax Coaches, Inc., 2018 Westlaw 6257480 (Cal.App.).] Read more

Summary: A California appellate court has held that a lender could not recover its attorney’s fees against a sublessor for breach of the settlement agreement because the lender failed to introduce its invoices or to authenticate them under the "business records" exception to the hearsay rule. [Copenbarger vs. Morris Cerullo World Evangelism, Inc., 2018 Westlaw 5921229 (Cal.App.).] Read more

The following is a case update prepared by Professor Dan Schechter, Loyola Law School, Los Angeles, analyzing a recent decision of interest: SUMMARY: A district court in California has held that when a software developer intentionally covered up the shortcomings in its custom software project, its client could invoke California's Unfair Competition Law to recover the payments it made to the developer for the worthless work product. [Copart, Inc., vs. Sparta Consulting, Inc., 2018 Westlaw 4293023 (E.D. Cal.).] FACTS: A… Read more

Summary: A California appellate court has held that even though a third deed of trust was recorded prior to an assessment lien, the HOA took priority over the lender due to a subordination clause contained in the recorded CC&Rs. [Bear Creek Master Association vs. Southern California Investors, Inc., 2018 Westlaw 5659789 (Cal.App.).] Read more

Summary: A district court in New York has held that a group of junior creditors who supported a Chapter 11 debtor's cramdown plan did not breach their obligations to the senior creditors under the terms of an intercreditor agreement because the juniors held both secured and unsecured claims, and the agreement did not prohibit the juniors from exercising their rights as unsecured creditors. [In re MPM Silicones, LLC, 2018 Westlaw 6324842 (S.D.N.Y.).] Read more

Summary: The Ninth Circuit has held that a trial court correctly ordered equitable restitution of $1.27 billion due to a payday lender's deceptive practices. [Federal Trade Commission vs. AMG Capital Management, LLC, 2018 Westlaw 6273036 (9th Cir.).] Read more