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Case 5:11-cv-00137-DDP Document 22 Filed 07/30/13 Page 1 of 5 Page ID #:345

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O

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. EDCV 11-00137 DDP
ORDER AFFIRMING BANKRUPTCY COURT

[US Bankruptcy Court,
6:10-48795 CB]

IN RE ERMA LEE MARSHALL,
ERMA LEE MARSHALL,

Plaintiffs,

v.

DAN Z. BOCHNER,

Defendant.

___________________________

I. Background

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Erma Marshall has filed for bankruptcy. In re Erma Lee

Marshall, Case No. 10-48795. Erma Marshall and Greta Curtis, who
is Ms. Marshall’s attorney, have appealed two bankruptcy orders
from two cases. (See generally 11-137, Appellants’ Opening brief,
Docket No. 14.)1 The first case is In re: Erma Lee Marshall, which
had the adversary case number 10-1710 (“the 10-1710 case”) in

cc: US Bankruptcy Court & US Trustee’s Office

1Appellants filed the same brief in both appeals (Case Nos. CV 11-137 and

11-146) before this Court.

Case 5:11-cv-00137-DDP Document 22 Filed 07/30/13 Page 2 of 5 Page ID #:346

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bankruptcy proceedings, and the second was In re: Erma Lee
Marshall, which had the bankruptcy adversary case number 10-1711
(“the 10-1711 case”). On December 21, 2010, the Bankruptcy Court
heard appellee Dan Z. Bochner’s Motions to Remand and for Attorney
Fees in both cases. (11-137, AER Ex. H.)2 On appeal, the district
court case number for the 10-1710 case is 11-137, and the district
court case number for the 10-1711 case is 11-146.

The 10-1710 case involved an unlawful detainer action that was

filed in state court by appellee Dan Z. Bochner against Mt. Zion
Missionary Baptist Church. (See generally 11-137, AER Ex. B.) Ms.
Marshall was a non-party to this suit. (See id.; see generally id.
Ex. H.) However, a lien on Ms. Marshall’s home served as
collateral for a loan that Mr. Bochner gave to Mt. Zion–a loan that
was allegedly in default. (Id.) The 10-1710 case was “on the eve
of trial” when Ms. Marshall removed the case to bankruptcy court.
(AER, Ex. H at 157:22.) The Bankruptcy Court remanded the 10-1710
case and ordered Ms. Curtis, who served as Ms. Marshall’s attorney,
to pay attorney’s fees to Mr. Bochner in the amount of $1,945.
(See generally 11-137, AER Ex. A.) A verdict has since been
rendered in Appellants favor in this case. (See generally 11-137,
Request for Judicial Notice, Exs. A and B, Docket No. 17.) The 10-
1711 case involved various claims and cross claims related to Mr.
Bochner’s loan to the church, the foreclosure on it, and the lien
against Ms. Marshall’s property. (See generally 11-146 AER Ex. B.)
The Bankruptcy Court remanded this case, as well, and emphasized

2Citations to the record will first cite the relevant district court case.

The same transcript applies the hearings in both motions.

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that “all claims alleged in the complaints and cross-complaints are
solely state law claims . . .” (Id. Ex. A at 2:2-3.)
II. Analysis

The order granting remand in the 10-1710 case is silent about
the grounds for doing so. (See generally 11-137 AER Ex. A.) The
order granting remand in 10-1711 mentions 28 U.S.C. § 1452(b),
which permits a bankruptcy court to remand a case on “any equitable
grounds,” as a grounds for remand. (11-146, Ex. A at 3:8-11.) The
Court construes the remand in 10-1710 to also be on equitable
remand grounds.

Although the order in 10-1710 does not explain why remand was
granted, the transcript from the hearing offers some clues. (See
generally 11-137, AER Ex. H.) The Bankruptcy Court at several
times discusses how mandatory abstention precluded it from
exercising jurisdiction over the case. (Id. at 157:19-25, 158:11-
17, 160:20-23.) Mandatory abstention, though, would not apply in
this case, because the case was removed from state court, and,
therefore, there was no pending state court action. Hendricks v.
Detroit Diesel Corp., No. C-09-3939 EMC, 2009 WL 4282812, at *7
(N.D. Cal. Nov. 25, 2009) (holding that “mandatory abstention does
not apply to removed cases because there is no parallel court
proceeding”) (citing Schulman v. California (In re Lazar), 237 F.3d
967, 981-82 (9th Cir. 2001). When bankruptcy courts make a
mandatory abstention decision in the incorrect context, as is the
case here, reviewing courts may treat the decision as one
pertaining to equitable remand under 28 U.S.C. § 1452(b). Sec.
Farms v. Int'l Broth. of Teamsters, Chauffers, Warehousemen &
Helpers, 124 F.3d 999, 1010 (9th Cir. 1997) (“[W]e treat the denial

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Case 5:11-cv-00137-DDP Document 22 Filed 07/30/13 Page 4 of 5 Page ID #:348

of abstention in this case as a decision not to remand . . .
[pursuant to] 28 U.S.C. § 1452(b).”). In deciding whether to apply
equitable remand, a court will consider the following factors:
whether remand would prevent uneconomical use of
judicial resources, what effect remand would have on
the administration of the bankruptcy estate, whether
the case involves questions of state law better
addressed by state court, comity, prejudice to
involuntarily removed parties, whether remand will
lessen the possibility of inconsistent results, and
the expertise of the court in which the action
originated.

Doss v. Chrysler Group, LLC, No. CV-09-02130-PHX-DGC, 2009 WL
4730932, at *4 (D. Ariz. Dec. 7, 2009). The issues pertaining to
equitable remand were present in the Bankruptcy Court’s discussion
of mandatory abstention:

There's a mandatory abstention on my part. These cases
involve parties that are not the Debtor. They are
third parties. They are state law matters. It was
filed on the eve of trial. It looks -- it has all the
indications of being an attempt to delay a creditor.
This is not the proper use of bankruptcy.

(AER Ex. H at 157:19-25.)

Section 1452(b) “is an unusually broad grant of authority,”
and remands granted pursuant to this statute are reviewed on an
abuse of discretion standard. In re McCarthy, 230 B.R. 414, 417
(B.A.P. 9th Cir. 1999). Here, it cannot be said that the
Bankruptcy Court abused its discretion. Both cases exclusively
involved state law claims. Moreover, the 10-1710 case was on the
eve of trial when it was removed. Appellants do not address such
concerns in their brief. For these reasons the Bankruptcy Court’s
///
///

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orders granting remand are AFFIRMED.3 This was a clear case for
equitable remand, so the attorneys fees awarded in 10-1710 are also
AFFIRMED.4

IT IS SO ORDERED.

Dated: July 30, 2013

DEAN D. PREGERSON
United States District Judge

3Appellants contend that the Bankruptcy Court improperly referred to

other-related proceedings in making its decision. (11-137, Appellants’ Opening
Brief at 10-11.) However, the Bankruptcy Court merely took judicial notice of
other-related actions. (11-146, AER Ex. A at 2:18-28.) Regardless, Appellants’
claim that they suffered prejudice as a result fails. Despite Appellants’
contention, the order in the 10-1711 case shows the Bankruptcy Court was aware
the Ms. Marshall had filed cross-claims. (11-146, AER Ex. A at 2:10-17.)

4Appellee seems to suggest that the 10-1710 case was dismissed pursuant to
subject matter jurisdiction grounds. As discussed, the Bankruptcy Court’s order
regarding remand is silent on its grounds for doing so. (11-137, AER Ex. A at
4-8.) As also stated, the transcript is replete with references to mandatory
abstention, which, when applied in the incorrect context, may be interpreted as
a granting of equitable remand. Additionally, in light of Appellant’s own
bankruptcy action, the Bankruptcy Court’s “related to” jurisdiction suggests
that jurisdiction might have properly been exercised over the unlawful detainer
action. In re Fietz, 852 F.2d 455, 457 (9th Cir. 1988) (“The usual articulation
of the test for determining whether a civil proceeding is related to bankruptcy
is whether the outcome of the proceeding could conceivably have any effect on
the estate being administered in bankruptcy.”) (quoting Pacor, Inc. v. Higgins,
743 F.2d 984, 994 (3d Cir.1984) (emphasis in original); see also Bankruptcy Law
Manual § 2:9 (5th ed. 2012) (“Celotex demonstrates, the related to jurisdiction
of the bankruptcy court is exceptionally broad. For example, it makes no
difference whether the debtor is a party to the proceeding; disputes between
nondebtor third parties can be related to the bankruptcy case if they meet the
circuit's articulated test for related to jurisdiction, such as, for example,
where the outcome of the dispute could create an indemnification claim against
the debtor. A suit may be related to a bankruptcy case even though it does not
involve debtor's property.”) (citing numerous cases).

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