Picerne Constr. v. Castellino Villas, No. 12-57186 (9th Cir. 2016)
Annotate this CaseCastellino hired Picerne, a general contractor, to construct an apartment complex on Castellino's property. After Castellino defaulted on its obligations and failed to pay Picerne and its subcontractors, Picerne filed a demand for arbitration and a mechanic’s lien against the apartment complex. The parties eventually entered into arbitration and, on the same day the superior court confirmed the arbitration award, Castellino filed a Chapter 11 petition for bankruptcy. On appeal, Picerne contends that the bankruptcy court erred in denying its motion for post-discharge attorneys’ fees. The court concluded that, under the circumstances of this case, Picerne could “fairly or reasonably contemplate” that it would have a claim for attorneys’ fees if it prevailed in the state litigation before Castellino filed its petition for bankruptcy. Therefore, the district court correctly determined that the claim was discharged when the bankruptcy court confirmed Castellino’s plan. Accordingly, the court affirmed the judgment.
Court Description: Bankruptcy. The panel affirmed the district court’s affirmance of the bankruptcy court’s order denying a motion for post-discharge attorneys’ fees arising from state court litigation filed by the plaintiff against the debtor. The panel held that attorneys’ fees incurred by the plaintiff during litigation after confirmation of the debtor’s Chapter 11 bankruptcy plan were discharged by that bankruptcy. Plaintiff’s claim for attorneys’ fees arose before the debtor filed its bankruptcy petition, and plaintiff’s post- discharge conduct did not amount to a whole new course of litigation. Accordingly, under the circumstances of this case, the attorneys’ fees claim was discharged. IN RE CASTELLINO VILLAS 3
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