Unpublished Disposition, 911 F.2d 737 (9th Cir. 1990)

MEMORANDUM^** 

Benjamin and Linda Allustiarte are debtors in a proceeding under Chapter XII of the now repealed Bankruptcy Act of 1898. The bankruptcy court provisionally found the Allustiartes to be vexatious litigants and preliminarily enjoined them from pursuing frivolous claims regarding the property of their bankruptcy estate. The district court affirmed. The Allustiartes appeal pro se.

FACTS

The primary assets of the bankruptcy estate are three ranches. The bankruptcy court authorized their sale; we dismissed the appeals from those orders as moot because they had been sold. In re Allustiarte, Nos. 89-15324, 89-16163 (consolidated) (memorandum disposition 9th Cir. April 26, 1990).

Unable to get title insurance because of the debtors' litigious history, the trustee obtained a preliminary injunction to prevent the debtors from relitigating the ownership, sale and hypothecation of the ranches. Under the preliminary injunction the bankruptcy court screens all proposed complaints, allowing prosecution of colorable claims.

DISCUSSION

1. The Allustiartes argue that the bankruptcy court no longer had jurisdiction to grant the preliminary injunction because an appeal was pending before the district court. The subject of the May 1988 appeal was the bankruptcy court's orders allowing the sales of the ranches. Because issues outside the subject of an appeal remain within the court's jurisdiction, see In re Thorp, 655 F.2d 997, 998 (9th Cir. 1981) (per curiam), the court retained the power to enjoin frivolous litigation.

2. The All Writs Act, 28 U.S.C. § 1651 (1982), authorizes federal courts to reinforce judgments which are res judicata by issuing injunctions against repetitive litigation. Wood v. Santa Barbara Chamber of Commerce, Inc., 705 F.2d 1515, 1524 (9th Cir. 1983). The Allustiartes are repetitive litigants. Through thirty-odd appeals, the debtors have demonstrated their intention to relitigate issues resolved in prior lawsuits. This appeal is no exception.¹  The issues covered by the injunction are res judicata: The ownership of the properties has been fully litigated, see In re Allustiarte, 786 F.2d 910 (9th Cir. 1986), cert. denied, 479 U.S. 847 (1987), and the propriety of the sale was resolved by the bankruptcy court.² 

3. A party may obtain a preliminary injunction by showing a likelihood of success on the merits and a serious threat of irreparable injury. Apple Computer, Inc. v. Formula Int'l Inc., 725 F.2d 521, 523 (9th Cir. 1984). The trustee demonstrated the likelihood of successfully proving the Allustiartes to be vexatious litigants. The bankruptcy court preliminarily found that the debtors' litigious behavior was calculated to vex, harass and annoy the trustee. As discussed above, the vast number of repetitive appeals suggests that the debtors intend to relitigate resolved claims. There is also a serious threat of irreparable injury. The properties could not be sold because title insurance companies were reluctant to issue title insurance for fear that the debtors would file frivolous claims. Because the debtors are insolvent, they will be unable to compensate the title holders and insurance companies for damages arising out of such litigation.

4. The injunction saves the plaintiff and the courts the time and expense of retrying claims resolved in prior lawsuits and protects the estate's assets from being depleted by litigation costs. At the same time, the injunction does not prevent the Allustiartes from pursuing colorable claims. The district court did not abuse its discretion. See DeNardo v. Murphy, 781 F.2d 1345, 1348 (9th Cir. 1986).

5. Lastly, the Allustiartes contend that they received insufficient notice. Fed. R. Civ. P. 65(a) (1), which governs bankruptcy proceedings through Bankruptcy Rule 7065, requires notice to be given to the adverse party in a preliminary injunction hearing but leaves the sufficiency of notice to the discretion of the court. United States v. Alabama, 791 F.2d 1450, 1458 (11th Cir. 1986), cert. denied, 479 U.S. 1085 (1987). Although service of process was unsuccessful, the debtors received adequate notice to file their timely opposition and appear at the hearing, and they did in fact appear. The district court did not abuse its discretion in finding the notice adequate.

AFFIRMED.