Kwang-Wei Han v. James J Joseph, No. 8:2008cv00075 - Document 28 (C.D. Cal. 2009)
Court Description: ORDER AFFIRMING THE BANKRUPTCY COURT DECISIONS by Judge Dean D. Pregerson (Made JS-6. Case Terminated.) (lc)
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1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 In re Kwang-wei Han 12 Kwang-wei Han, Appellant. 13 v. 14 15 James J. Joseph, Respondent. ___________________________ ) ) ) ) ) ) ) ) ) ) Case No. SA CV 08-00075 DDP ORDER AFFIRMING THE BANKRUPTCY COURT DECISIONS 16 17 I. 18 BACKGROUND Appellant Kwang-wei Han, an individual, filed a voluntary 19 petition for bankruptcy under Chapter 7 of the Bankruptcy Code on 20 April 14, 1997. 21 appointed as the Chapter 7 trustee of Han s bankruptcy estate. 22 the commencement of the bankruptcy proceedings, Han was the 23 trustor, trustee, and beneficiary of the Kwang-wei Han Revocable 24 Trust (the Han Trust ). 25 shares of stock in McGaw Property Management, Inc. ( MPM ), a 26 California corporation. 27 cc: US Bankruptcy Court 28 cc: Appellee James J. Joseph (the Trustee ) was US Trustee s Office At The Han Trust was the sole owner of all Han was the sole director and officer of 1 MPM. 2 for bankruptcy under Chapter 11. 3 entered an order confirming a plan of reorganization, and leaving 4 Han as a debtor-in-possession.1 5 separate from Han s Chapter 7 bankruptcy estate and the orders at 6 issue on this appeal. 7 was title to commercial property located in Irvine, California (the 8 McGaw Property ). 9 In 1990, before Han s Chapter 7 bankruptcy filing, MPM filed In 1992, the bankruptcy court MPM s bankruptcy estate is Before MPM was dissolved, its primary asset On October 20, 1997, the Trustee filed a motion requesting 10 authorization to (1) revoke the Han Trust and (2) use the property 11 of Han s bankruptcy estate outside the ordinary course of business. 12 (See Ex. 29 at 1669.) 13 hearing, the bankruptcy court entered an order on March 25, 1998, 14 granting the Trustee s motion to revoke the Han Trust and use the 15 property of Han s bankruptcy estate ( 1998 Trust Revocation & Use 16 of Assets Order ), including its 100% shareholder interest in MPM. 17 (See Ex. 29 at 1666.) 18 Appellate Panel for the Ninth Circuit ( BAP ), but the appeal was 19 ultimately dismissed for lack of prosecution on August 12, 1998. 20 (See Ex. 29 at 1760.) 21 the validity of the 1998 Trust Revocation & Use of Assets Order, 22 including on the instant consolidated appeal. 23 After receiving briefing and holding a Han appealed this order to the Bankruptcy Nevertheless, Han has repeatedly contested Presently, Han appeals three distinct bankruptcy court orders 24 from the Chapter 7 , one from 2007 and two from 2008. 25 Appellee s request, these appeals were consolidated. 26 A. Appeal of January 29, 2007 Order: At Han and CV 07-00189 DDP 27 1 28 In 1999, MPM s Chapter 11 bankruptcy case was ordered dismissed. 2 1 On October 4, 2006, the Trustee filed a motion seeking 2 authorization to use the bankruptcy estate s 100% shareholder 3 interest in MPM to sell the McGaw Property and to dissolve MPM. 4 (See Ex. 1.) 5 granting the Trustee s motion. 6 motion for relief from this order. 7 denied Han s motion on January 29, 2007. 8 9 On November 17, 2006, the court entered an order (See Exs. 7, 57.) (Ex. 8.) Han then filed a The bankruptcy court (Ex. 14.) The January 29, 2007 order denying relief is the basis of Appellants first appeal. 10 B. 11 On May 30, 2007, the Trustee filed an interim application for Appeal of First January 8, 2008 Order: CV 08-00075 DDP 12 his fees ( Interim Fee Application ). 13 several rounds of supplemental briefing, the bankruptcy court 14 issued an order granting the Trustee s Interim Fee Application on 15 October 4, 2007. 16 order (Ex. 45), as well as an amended application to amend the 17 October 4, 2007 Order (Ex. 52). 18 (Ex. 40.) (See Ex. 20, 21.) After Han then filed a motion to amend this On January 8, 2008, the bankruptcy court entered an order (1) 19 denying Han s motion to amend the October 4, 2007 order and (2) 20 sustaining the Trustee s evidentiary objections to evidence 21 supplied by Han on the motion. 22 23 (Exs. 55, 61.) The (first) January 8, 2008 order is the subject of Han s second appeal. 24 C. 25 On September 27, 2007, the Trustee filed (1) an application Appeal of Second January 8, 2008 Order: CV 08-00282 DDP 26 for compensation by the Trustee s counsel, (2) a second application 27 for the Trustee s accountants fees, and (3) a motion authorizing a 28 final distribution to the creditors of Han s bankruptcy estate. 3 1 (See Exs. 34, 36, 38.) 2 entered two orders (1) granting the creditor distribution, and (2) 3 granting the applications for attorneys fees and compensation to 4 the Trustee s accountants (Exs. 48, 49). 5 filed a Motion to Amend the October 31, 2007 Orders. 6 On January 8, 2008, the bankruptcy court entered an order denying 7 Han s motion to amend. 8 9 10 After a hearing, the bankruptcy court On November 13, 2007, Han (See Ex. 51.) (Ex. 56.) The (second) January 8, 2008 order is the subject of Han s third appeal. II. LEGAL STANDARD 11 Under 28 U.S.C. § 158(a), federal district courts have 12 jurisdiction to review appeals from final orders and judgments of 13 bankruptcy courts. 14 of law are reviewed de novo, while its findings of fact are 15 reviewed for clear error. 16 F.3d 992, 994 (9th Cir. 2005); Fed. R. Bankr. P. 8013. 17 addition, a bankruptcy court s denial of a motion for 18 reconsideration is reviewed under an abuse of discretion standard. 19 Weiner v. Perry, Settles & Lawson (In re Weiner), 161 F.3d 1216, 20 1218 (9th Cir. 1998). 21 III. DISCUSSION In general, the bankruptcy court s conclusions Salazar v. McDonald (In re Salazar), 430 In 22 A. 1998 Trust Revocation & Use of Assets Order 23 Almost all of Appellant s arguments address the 1998 Trust 24 Revocation & Use of Assets Order. However, the bankruptcy court s 25 March 25, 1998 order is not reviewable on this appeal. 26 was issued over 10 years ago, and an appeal must be taken within 10 27 days of the final order of the bankruptcy court. 28 8002(a). Fed. R. Bank. P. This time limit is jurisdictional on appeal. 4 The order In re 1 Slimick, 928 F.2d 304, 307 (9th Cir. 1990). 2 already appealed this order to the BAP, where the appeal was 3 dismissed for failure to prosecute. 4 Furthermore, Han has Therefore, Han s attempt to appeal this order through the 5 present consolidated appeals is untimely, and this Court does not 6 have jurisdiction to hear it. 7 B. 8 On November 17, 2006, the bankruptcy court issued an order 9 2007 Order Denying Relief from Dissolution & Sale that authorized the Trustee to use Han s Chapter 7 bankruptcy 10 estate s shareholder interest in MPM to sell the McGaw Property and 11 to dissolve MPM. 12 bankruptcy court issued an order deny Han s motion for relief from 13 the November 17, 2006 order, which Han appealed. 14 (Exs. 14, 57.) On January 29, 2007, the Han s motion for reconsideration was made pursuant to 15 Bankruptcy Rule 9024, which applies Federal Rule of Civil Procedure 16 60 in bankruptcy cases. 17 Ins. Co. v. Int'l Fibercom, Inc. (In re Int'l Fibercom, Inc.), 503 18 F.3d 933, 940 (9th Cir. 2007). 19 2006 order was invalid due to fraud under Rule 60(b)(3) and under 20 (b)(6) for other reasons justifying relief. 21 In the hearing where the bankruptcy court explained the reasoning 22 behind its order, the court first noted its difficulty in 23 understanding Han s arguments, including the arguments Han made at 24 the hearing. 25 arguments for reconsideration: 26 lacked jurisdiction, and (2) that the bankruptcy estate had 27 mismanaged a $2,000,000 loan taken out on the McGaw Property. 28 58 at 2833.) See Fed. R. Bankr. P. 9024; Zurich Am. Han argued that the November 17, (See Ex. 8 at 327.) It then determined that Han had presented two (1) that the bankruptcy court (Ex. The bankruptcy court found neither argument caused it 5 1 to reconsider its order. 2 that there had been no withdrawal of reference to the case by the 3 district court, and therefore that the bankruptcy court s 4 jurisdiction was undisturbed. 5 $2,000,000 loan was not at issue in the underlying November 17, 6 2006 order authorizing sale of the McGaw Property and dissolution 7 of MPM, and therefore was not proper grounds for reconsideration. 8 (Id.) On the first issue, the court determined (Id.) The court next found that the 9 On appeal, Han does not address either of these findings, and 10 instead argues that the denial of relief was incorrect because the 11 March 25, 1998 order revoking the Han Trust and permitting use of 12 its assets (and, specifically, sole ownership of all MPM shares) 13 was invalid. 14 have standing to sell the McGaw Property or dissolve MPM. 15 Consequently, according to Han, the Trustee did not This argument fails for two reasons. First, Han is attempting 16 to appeal the March 25, 1998 order, which this Court does not have 17 jurisdiction to hear. 18 court s decision to deny Han s motion for reconsideration. 19 provided no evidence of jurisdictional defect, fraud by any party, 20 or any other argument or evidence upon which the bankruptcy court 21 could reverse its decision of November 17, 2006. 22 evidence that the bankruptcy court s jurisdiction had been removed, 23 such as by a withdrawal of reference, and does not dispute that 24 MPM s management of its loans were never raised by the parties in 25 the Trustee s original motion to sell the McGaw Property and 26 dissolve MPM. 27 28 Second, the record supports the bankruptcy Han Han provided no Therefore, the bankruptcy court s denial of Han s motion on January 29, 2007 did not constitute an abuse of discretion. 6 1 C. 2 2008 Orders Denying Han s Motions for Amendment and Reconsideration 3 4 The bankruptcy court jointly considered Han s motions for 5 amendment and reconsideration in a hearing on December 18, 2007. 6 The subject of these motions was reconsideration or amendment of 7 the court s orders granting the Trustee s fee applications and 8 final creditor disbursement. 9 motions to amend and reconsider were made pursuant to Bankruptcy 10 Rule 9023, which incorporates Federal Rule of Civil Procedure 59. 11 Fed. R. Bankr. P. 9023; 12 946. 13 Chapter 7 estate had violated the single estate rule and (2) the 14 Trustee lacked standing to receive fees, again based on the 15 invalidity of the 1998 Trust Revocation & Use of Assets Order. 16 responding to these arguments, the bankruptcy court noted that 17 reconsideration is only appropriate if the court is (1) presented 18 with newly discovered evidence, (2) committed clear error or the 19 initial decision was manifestly unjust, or (3) if there is an 20 intervening change in controlling law. 21 ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). 22 court first found that there was no newly discovered evidence, 23 despite a declaration submitted by Han of an attorney who stated a 24 legal opinion supporting Han, as this constituted argument rather 25 than new evidence. 26 estate rule did not apply, because there were two separate 27 bankruptcy debtors - Han (under Chapter 7) and MPM (under Chapter 28 11). (See Exs. 45, 51, 52.) All of Han s In re Int'l Fibercom, Inc., 503 F.3d at On his motions, Han argued that (1) the Trustee of his In See Sch. Dist. No. 1J v. The bankruptcy The court next determined that the single Finally, the bankruptcy court responded to Han s argument 7 1 that the Trustee lacked standing, due to the invalidity of the 1998 2 Trust Revocation & Use of Assets Order. 3 Han Trust s shareholder interest in MPM was actually part of MPM s 4 bankruptcy estate, and was protected from any use by the Chapter 11 5 automatic stay injunction. 6 bankruptcy estate is comprised of . . . all legal or equitable 7 interests of the debtor in property as of the commencement of the 8 case. ). 9 previously adjudicated, was a final order, and could not be 10 11 Han had argued that the See 11 U.S.C. § 541(a)(1) (the debtor s The bankruptcy court stated that this issue had been revisited.2 (See Ex. 62 at 2986-991.) Han s arguments on appeal of this order are the same as those 12 described above - that the March 25, 1998 order revoking the Han 13 Trust and permitting use its assets was invalid and that, 14 consequently, the Trustee did not have standing. 15 argument fails for two reasons. 16 the March 25, 1998 order, which this Court does not have 17 jurisdiction to hear. 18 court s decision to deny Han s motion for amendment or 19 reconsideration. 20 estates with one debtor, does not apply because the two estates at 21 issue were distinct - Han s and MPM s. 22 117 B.R. 531, 534 (B.A.P. 9th Cir. 1990)(discussing the 23 applicability of the single estate rule). Again, this First, Han is attempting to appeal Second, the record supports the bankruptcy Han s main argument, that there were simultaneous See, e.g., In re Grimes, Han pointed to no other 24 25 26 27 28 2 The bankruptcy court also found that, upon examination of the MPM reorganization plan, Han s argument was incorrect. Ownership of the MPM shares were not a part of MPM s Chapter 11 bankruptcy, because MPM did not own its own shares; and instead the Han Trust owned them. Therefore, these assets were not protected by the automatic stay or included in MPM s Chapter 11 bankruptcy estate. 8 1 new evidence or errors of law in support of his motions to amend or 2 for reconsideration, other than general and unsupported allegations 3 of fraud and mismanagement of MPM by the Trustee. 4 Therefore, the bankruptcy court s denial of Han s motions on 5 October 15 and December 4, 2007 did not constitute an abuse of 6 discretion. 7 IV. 8 9 CONCLUSION For the foregoing reasons, the orders of the bankruptcy court are AFFIRMED. 10 11 IT IS SO ORDERED. 12 13 14 Dated: September 29, 2009 15 DEAN D. PREGERSON 16 United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 9
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