Opinion
Case No. 09-12113-PB7 Adv. No. 11-90424-PB
04-29-2014
In re QUALITYBUILT.COM, a California corporation, Debtors, LESLIE T. GLADSTONE, Chapter 7 Trustee, Plaintiff, v. STAN LUHR, an individual, Defendant.
WRITTEN DECISION - NOT FOR PUBLICATION
ORDER ON PLAINTIFF'S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
On March 17, 2014, the Court heard argument on the Trustee's motion for leave to file a First Amended Complaint and took the matter under submission. In a subsequent review of the materials, the Court has come across a potentially dispositive issue which had not been addressed by the parties. Additional briefing is required.
Resolution of the Trustee's motion hinges, in part, upon whether some or all of the proposed claims for relief are barred by the time limitations of § 546(a). Section 546(a) provides:
(a) An action or proceeding under section 544, 545, 547, 548, or 553 of this title may not be commenced after the earlier of--
(1) the later of--
(A) 2 years after the entry of the order for relief; or
(B) 1 year after the appointment or election of the first trustee under section 702, 1104, 1163, 1202, or 1302 of this title if such appointment or such election occurs before the expiration of the period specified in subparagraph (A); or
(2) the time the case is closed or dismissed.
The Trustee does not contend that the FAC, first proposed on January 10, 2014, is timely under § 546(a). Rather, she contends that the FAC relates back to the complaint originally filed by the Debtor. The Defendant disagrees. Both parties briefed that issue and addressed it at oral argument. The issues which were not addressed, however, are whether the original complaint was timely, and if not, how that impacts the current motion.
The order for relief in this case was entered on August 14, 2009, when Debtor filed its petition under chapter 11. See Bankruptcy Code § 301. Thus, the two-year time limitation of § 546(a) appears to have expired no later than August 15, 2011. The original complaint was not filed until August 30, 2011, apparently after expiration of the time limitations of § 546.
The one-year limitation of § 546(a)(1)(B) is not applicable since the Trustee was appointed after the two-year period of § 546(a)(1)(A) had expired.
In his answer Defendant included as an affirmative defense "Plaintiff's claims are barred by the applicable statute(s) of limitations." However, the Court is not aware of any other challenge to the timeliness of the original complaint.
The Court is not aware of any agreement by the Defendant to waive or extend the limitations of § 546. On August 2, 2011, the Court entered an order approving a stipulation between the Debtor and Elizabeth Michaelis that the "limitations period provided by 11 U.S.C. § 546(a)(1) for the commencement of an avoidance action to avoid and recover alleged preferential transfers against Elizabeth Michaelis is extended up to and including August 14, 2012." See Docket No. 255. A similar stipulation was entered into between the Debtor and Science Buildings Partners, LLC. See Docket No. 256. However, so far as the Court can tell, no such stipulation was entered into between the Debtor and Luhr.
As noted, the Trustee and Defendant disagreed about whether the FAC should relate back to the original complaint, and both sides briefed and argued the issue. However, neither party addressed the fact that the original complaint appears to have been filed outside the two-year limitation of § 546(a).
Before the Court will decide whether the FAC relates back, the issue of to what it would relate back must be addressed. Accordingly the Court hereby orders that the Trustee and the Defendant file briefs addressing this issue. Concurrent briefs shall be filed within thirty (30) days of the service of this order. No replies shall be filed. When the briefs are filed, the matter will be re-taken under submission.
IT IS SO ORDERED.
DATED: APRIL 29, 2014
/s/_________
PETER W. BOWIE, Judge
United States Bankruptcy Court
CERTIFICATE OF MAILING
The undersigned, a regularly appointed and qualified clerk in the office of the United States Bankruptcy Court for the Southern District of California, at San Diego, hereby certifies that a true copy of the attached document, to wit:
ORDER ON PLAINTIFF'S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
was enclosed in a sealed envelope bearing the lawful frank of the bankruptcy judges and mailed to each of the parties at their respective addresses listed below: Geraldine A. Valdez
401 Via Del Norte
La Jolla, CA 92037
K. Todd Curry
525 B Street, Ste. 1500
San Diego, CA 92101
Said envelope(s) containing such document was deposited by me in a regular United States Mail Box in the City of San Diego, in said District on April 29, 2014.
/s/_________
Lisa Cruz, Deputy Clerk
Notice Recipients
| District/Off: 0974-3 | User: | melimu | Date Created: 4/29/2014 |
| Case: 11-90424-PB | Form | ID: pdfO1 | Total: 6 |
Recipients of Notice of Electronic Filing:
tr Leslie T. Gladstone candic@flgsd.com
aty Geraldine A. Valdez geraldinev@flgsd.com
aty K. Todd Curry tcurry@currylegal.com
aty L. Scott Keehn scottk@keehnlaw.com
TOTAL: 4
Recipients submitted to the BNC (Bankruptcy Noticing Center):
pla Qualitybuilt.com 1939 Friendship Drive, Ste. E El Cajon, CA 92020
dft Stan Luhr 1939 Friendship Drive Suite E El Cajon, CA 92020
TOTAL: 2