Opinion
NOT FOR PUBLICATION
Argued and Submitted at Seattle, Washington, May 23, 2007
Appeal from the United States Bankruptcy Court for the Western District of Washington. Honorable Samuel J. Steiner, Bankruptcy Judge, Presiding. Bk. No. 06-10093. Adv. No. 06-01331.
Before: KLEIN, MONTALI and RIBLET, Bankruptcy Judges.
MEMORANDUM
The debtor, Dean S. Kalivas, appeals from an order that dismissed his adversary complaint in which he asserted that the appellees, D. Gerard and Lucille McAleese and G& L McAleese Properties, Inc. violated the automatic stay. We agree with the bankruptcy court that the automatic stay was not offended and AFFIRM.
FACTS
The following facts have been distilled from the materially incomplete record provided by Kalivas, who is a lawyer, and, in view of the incomplete record, the dockets of the United States District Court for the District of Oregon and the United States Bankruptcy Courts for the Districts of Nevada and Washington.
In June 2003, appellees filed a complaint in the United States District Court for the District of Oregon against Kalivas alleging fraud, malpractice, breach of fiduciary duty, and racketeering. McAleese et al. v. Kalivas, No. 03-cv-00865 (filed 6/27/03). Default was entered. By order entered March 17, 2004, the district court denied Kalivas' motion to vacate default and directed that the parties proceed towards trial on the question of damages. A bench trial on the question of damages was scheduled for 9:00 a.m. on Tuesday, May 31, 2005.
Four days before the scheduled trial, on Friday, May 27, 2005, Kalivas filed a bankruptcy case in the United States Bankruptcy Court for the District of Nevada, Reno Division, No. 05-51655. Initially filed as a chapter 13 case, he voluntarily converted it to chapter 7 on August 10, 2005.
The damages trial in the district court was scheduled to begin at 9:00 a.m. on May 31, 2005. Kalivas did not appear. Although Kalivas contends that he attempted to notify the district court on the morning of May 31 that he had filed a bankruptcy case in Nevada (he asserts that his fax machine notes a 9:05 a.m. transmission), it is conceded that the district court did not learn of the existence of the bankruptcy filing until after it had taken evidence and announced a damages award in favor of the plaintiffs on the fraud and racketeering counts for about $4 million, together with attorney's fees and costs.
Upon learning of the bankruptcy filing, the district court did not proceed further until after relief from stay was obtained in the bankruptcy court. The district court's civil docket reflects that it ordered the plaintiffs to file a status report by the earlier of a date certain or the lifting of the bankruptcy automatic stay.
On August 11, 2005, appellees filed an ex parte request with the district court for findings of fact and conclusions of law, and for entry of judgment. No action was taken before March 17, 2006, with respect to that filing.
On October 12, 2005, the appellees filed a motion for relief from automatic stay in the Nevada bankruptcy court to permit the district court in Oregon to enter judgment against Kalivas.
On November 28, 2005, the appellees filed a motion to transfer the Kalivas bankruptcy case to the Western District of Washington.
The final hearing on the stay relief motion and the hearing on the transfer motion occurred on December 21, 2005.
By order entered January 5, 2006, the Nevada bankruptcy court transferred the bankruptcy case to the Western District of Washington, where it was assigned No. 06-10093.
Also by order entered January 5, 2006, the Nevada bankruptcy court denied the stay relief motion without prejudice, making four findings:
The court finds that, after the Debtor sent his bankruptcy petition to this court by messenger service on May 26, 2005 and was notified that the petition was on file on May 27, 2005, he did not take any steps to attempt to notify the United States District Court for the District of Oregon or the McAleeses of this bankruptcy case until May 31, 2005 after the hearing had commenced in that court. The court finds that, but for the entry of an order transferring this case to the United States District Court for the Western District of Washington, it would grant the Motion in its entirely. The court finds that, solely because it is transferring venue and to eliminate procedural issues that may arise by this court granting the Motion, the court is denying the Motion.
Order Denying Motion For Relief From Automatic Stay Without Prejudice, U.S. Bankr. Ct., D. Nev. (No. N-05-51655-GWZ 1/5/06).
The transferred case was docketed by the bankruptcy court in the Western District of Washington on January 17, 2006. The appellees filed their renewed motion for relief from stay on January 19, 2006.
By order signed March 13 and entered March 14, 2006, the bankruptcy court granted relief from stay to permit the district court to proceed to judgment.
On March 16, 2006, the appellees filed in the district court in Oregon a supplemental status report and request for entry of findings of fact and conclusions of law and for entry of judgment
On March 17, 2006, the district court in Oregon entered findings of fact and conclusions of law and entered a judgment (which was appealed to the Ninth Circuit as No. 06-35327).
On July 25, 2006, Kalivas filed an adversary proceeding against the appellees alleging two violations of the automatic stay provisions of 11 U.S.C. § 362. Kalivas alleged that the automatic stay was violated by the conduct of the damages trial in the district court on May 31, 2005. Kalivas also alleged that the appellees violated the stay when they filed their initial ex parte request to enter findings of fact and conclusions of law and ex parte request for entry of the district court judgment. Kalivas demanded " damages for contempt in the amount of $10,000."
The appellees filed a Motion to Dismiss the complaint on the ground that the district court in Oregon did not act on any request for entry of findings of fact and conclusions of law until March 17, 2006, which was after bankruptcy court in Washington granted relief from stay to permit judgment to be entered.
At the hearing, the court dismissed the adversary proceeding, making the following ruling:
THE COURT: Well, I tell you, as I see it, when I entered that order granting relief from the stay, then the plaintiffs in the Oregon suit could go ahead and get their judgment entered. I also feel that that order granting relief from the stay, for all intents and purposes, annulled the stay retroactively throughout the entire suit.
I am going to dismiss the Kalivas lawsuit against the McAleeses based on the violation of the automatic stay.
Tr. of Hearing 8/11/06, at p. 30.
A motion for reconsideration was filed within ten days of entry of the dismissal order and was denied.
This timely appeal ensued.
JURISDICTION
The bankruptcy court had jurisdiction via 28 U.S.C. § 1334(b). We have jurisdiction under 28 U.S.C. § 158(a)(1) and (c)(1).
ISSUE
Whether the bankruptcy court erred when it dismissed Kalivas' adversary complaint.
STANDARD OF REVIEW
The bankruptcy court's decision to dismiss the debtor's adversary complaint is reviewed de novo. Zimmer v. PSB Lending Corp. (In re Zimmer), 313 F.3d 1220, 1222 (9th Cir. 2002). A complaint should not be dismissed unless it appears beyond doubt that the debtor can prove no set of facts in support of his claim that would entitle him to relief. Educ. Credit Mgmt. Corp. v. McBurney (In re McBurney), 357 B.R. 536, 539 (9th Cir. BAP 2006).
DISCUSSION
At the oral argument of this appeal, Kalivas made two basic contentions and one concession. First, he contended that the filing in the United States District Court in Oregon of a request for entry of findings of fact and conclusions of law and of judgment, violated the automatic stay. Second, he contended that the language of the stay relief order entered March 14, 2006, permitting appellees " to pursue entry of the Judgment" did not also authorize entry of findings of fact and conclusions of law. Finally, when asked what defense he would have to a motion to annul the stay, he was unable to articulate a defense. We address these points in order.
I
The filing of the request for entry of findings of fact and conclusions of law in the district court in Oregon on August 11, 2005, was, in the light most favorable to Kalivas, harmless. The district court declined to act until after relief from stay was obtained. The docket of the district court reflects that Kalivas filed nothing in response.
The sole allegation of damages is the assertion in paragraph 11 of the Amended Complaint that " failure to correct these violations has damaged Plaintiff by causing him to seek redress through the filing of this complaint."
Beyond doubt, there is no set of facts alleged in the Amended Complaint that would entitle Kalivas to relief on this theory.
II
Next, Kalivas contends that the bankruptcy court's order granting relief from stay permitting the appellees to " pursue entry of judgment" did not also permit entry of findings of fact and conclusions of law to support the judgment.
The language of the order is as follows:
IT IS HEREBY ORDERED that relief from the automatic stay is granted to creditors to pursue entry of the Judgment against the debtor in the case tried on May 31, 2005, before the United States District Court for the District of Oregon, entitled Denis Gerard McAleese, Lucille McAleese, and McAleese, Inc. v. Dean Kalivas, aka " Dean Kalivas, attorney at law" (USDC(OR)No. CV 03 865 BR), wherein the Honorable Anna J. Brown found in favor of the plaintiffs in their fraud and racketeering claims.
The direct answer is that an order granting relief from stay " to pursue entry of judgment" necessarily subsumes those matters that are part of the process of obtaining a judgment. A judgment following a bench trial must be supported by findings of fact and conclusions of law. Fed.R.Civ.P. 52(a). In other words, the order modified the automatic stay in a manner that permitted entry of findings of fact and conclusions of law appropriate to support the judgment.
Beyond doubt, there is no set of facts alleged in the Amended Complaint that would entitle Kalivas to relief on this theory.
III
Finally, we can affirm for any reason supported by the record. Dittman v. California, 191 F.3d 1020, 1027 n.3 (9th Cir. 1999); Donald v. Curry (In re Donald), 328 B.R. 192, 204 (9th Cir. BAP 2005).
Kalivas conceded that merely annulling the automatic stay would retroactively cure the defects about which he complains. 11 U.S.C. § 362(d)(1). See 40235 Washington St. Corp. v. Lusardi, 329 F.3d 1076, 1080 n.2 (9th Cir.), cert. denied, 540 U.S. 983, 124 S.Ct. 469, 157 L.Ed.2d 374 (2003).
When asked what defense he would have to a motion to annul the stay, he was unable to articulate a defense to annulling the stay.
The bankruptcy court noted in its ruling, " I also feel that that order granting relief from the stay, for all intents and purposes, annulled the stay retroactively throughout the entire suit." The court is entitled to construe the meaning of an order that it enters.
This view by the court indicating that it intended its order to operate so as to annul the stay, coupled with the concession that there would not be an effective defense to a motion annulling the stay, confirms, beyond doubt, that Kalivas has alleged no set of facts that would entitle him to relief.
CONCLUSION
The bankruptcy court did not err when it dismissed the Kalivas adversary complaint and did not err when it denied the Kalivas motion for reconsideration. This appeal lacks substantial merit. AFFIRMED.