Unpublished Disposition, 867 F.2d 613 (9th Cir. 1988)Annotate this Case
Bob J. SMITH; Deloris Smith, Plaintiffs-Appellants,v.R & H LEASING, INC.; Ted Dress, Defendants-Appellees.
United States Court of Appeals, Ninth Circuit.
Submitted* Jan. 13, 1989.Decided Jan. 20, 1989.
Before JAMES R. BROWNING, BEEZER and KOZINSKI, Circuit Judges.
Bob and Deloris Smith appeal from the district court's grant of summary judgment in favor of R & H Leasing, Inc. and Ted Dress, its president, affirming a similar grant of summary judgment by the bankruptcy court. We affirm.
* The Smiths borrowed $500,000 from R & H Leasing in 1982. The loan was secured by a deed of trust to a ranch owned by the Smiths. The Smiths defaulted on the loan. In April 1984, the Smiths filed a Chapter 11 proceeding in bankruptcy court. In October 1984, the Smiths and R & H Leasing signed a settlement agreement, according to which the Smiths had "until December 26, 1984," to cure their default. Appellees' Excerpts of Record at 7. The agreement was approved by the bankruptcy court.
The Smiths never paid. R & H Leasing sold the property at a trustee's sale on December 26, 1984. On April 1, 1985, the Smiths sued in state court, seeking to set aside the trustee's sale and recover damages. The Smiths served the complaint on the appellees on April 8, 1985. On May 3, 1985, R & H Leasing and Dress filed a petition for removal to the bankruptcy court in which the Smiths' Chapter 11 proceeding was pending. The bankruptcy court granted appellees' motion for summary judgment on June 3, 1985. The Smiths appealed to the district court, which affirmed after a remand to the bankruptcy court for findings of fact and conclusions of law. Smith v. R & H Leasing (In re Smith), No. CV-S-85-1033-RAR (E.D. Cal. Nov. 24, 1986) [dist. ct. op.]; Smith v. R & H Leasing (In re Smith), No. 285-0153-D-11 (Bankr.E.D. Cal. Sept. 25, 1986) [bankr. ct. op.].
The Smiths raise three issues on appeal. They claim that the bankruptcy court lacked jurisdiction over the case; that the bankruptcy court should have abstained from exercising jurisdiction; and that the bankruptcy court erred on the merits in granting summary judgment because a substantial issue of fact remains unresolved.
We review questions of removal jurisdiction de novo. Local Union 598 v. J.A. Jones Constr. Co., 846 F.2d 1213, 1215 (9th Cir.), aff'd mem., 109 S. Ct. 210 (1988). The Smiths claim that the bankruptcy court lacked jurisdiction because the notice of removal included the wrong docket number and because the appellees failed to post a bond.
A petition for removal of a civil action to federal court must be filed within thirty days after the defendant receives a copy of the complaint. 28 U.S.C. § 1446(b) (1982). The appellees were served with the complaint on April 8; they filed the petition for removal on May 3, within the thirty-day limit. The petition included the correct docket number. Appellees promptly served a copy of the petition on the Smiths. See id. at Sec. 1446(e). The copy also contained the correct docket number. Prompt service of the copy of the petition constituted full compliance with all notice requirements. See Bankruptcy Rule 9027(c).
Appellees made a mistake, however: They attached to the copy of the petition a short "Notice of Filing of Petition for Removal" which included the docket number of an earlier action filed by the Smiths. The earlier action had been dismissed in 1984. The Smiths were quick to spot the error; they brought it to the attention of the bankruptcy court at the June 3 hearing on the summary judgment motion, claiming that the mistake deprived the bankruptcy court of jurisdiction. The following day, appellees filed a corrected notice in state court.
Both courts below found that the incorrect docket number did not prejudice the Smiths in any way. Dist. ct. op. at 7; bankr. ct. op. at 3. We agree. The notice with the incorrect number was attached to the petition it was noticing, and the petition included the right number. Also attached were copies of the pleadings, all of which sported the correct number. A minor technical defect which causes a debtor no prejudice in a document not required by statute or the Bankruptcy Rules cannot defeat the jurisdiction of a bankruptcy court.
The Smiths also claim that the bankruptcy court was without jurisdiction because the appellees did not post a bond as required by 28 U.S.C. § 1446(d) (1982) and Bankruptcy Rule 9027(b). Failure to post a bond is not a jurisdictional defect; the issue is waived if not raised before the bankruptcy court. Sulger v. Pochyla, 397 F.2d 173, 177-78 (9th Cir.), cert. denied, 393 U.S. 981 (1968). The Smiths did not raise the issue before the bankruptcy court.
The Smiths claim that the bankruptcy court should have abstained from exercising its jurisdiction under 28 U.S.C. § 1334(c) (2) (Supp.IV 1986). Remarkably, there are at least three distinct reasons why the Smiths cannot prevail on this claim. First, when a case is removed from state court to bankruptcy court, the decision of the bankruptcy court not to abstain from exercising its jurisdiction is unreviewable on appeal. 28 U.S.C. § 1452 (Supp.IV 1986). Second, section 1334(c) (2) does not apply to cases related to bankruptcy proceedings pending on the section's effective date, July 10, 1984. Pub. L. 98-353, Sec. 122(b), 98 Stat. 346 (1984). The Smiths filed their bankruptcy proceeding in April 1984. Third, section 1334(c) (2) requires that a party make a timely motion for abstention; the Smiths did not make such a motion in the bankruptcy court.1
Finally, the Smiths claim that the courts below erred in finding summary judgment appropriate, because an issue of fact exists as to whether the appellees held the trustee's sale a day too early. We review a grant of summary judgment de novo. Rosenthal v. Fonda, No. 87-5659, slip op. 15169, 15172 (9th Cir. Dec. 13, 1988).
The Smiths contend that the language in the settlement agreement giving them "until December 26, 1984," to cure their default means that they had at least a substantial part of December 26 in which to pay, and that the sale of their property accordingly should not have been held until December 27. In a declaration filed with the bankruptcy court, however, Bob Smith swore that the settlement agreement would "extend the foreclosure sale to December 26, 1984." Appellees' Excerpts of Record at 20. Peter Van Gelder, Smith's attorney at the time, likewise declared that "the trustee's foreclosure sale will be continued to December 26, 1984." Id. at 22. A party cannot create a triable issue of fact merely by contradicting earlier admissions. Mesirow v. Pepperidge Farm, Inc., 703 F.2d 339, 344 (9th Cir.), cert. denied, 464 U.S. 820 (1983).
Moreover, under California law a debtor cannot challenge a foreclosure sale unless the debtor has tendered the amount owed. Karlsen v. American Savings & Loan Ass'n, 15 Cal. App. 3d 112, 117, 92 Cal. Rptr. 851 (1971); In re Worcester, 811 F.2d 1224, 1230 (9th Cir. 1987). The Smiths have never tendered payment.
Appellees advise us that they intend to seek attorneys' fees under the terms of the agreement between the parties and section 1717 of the California Civil Code. Appellees will have 21 days from the date of this memorandum to file a formal application. Appellants will have 14 days to file a response.
The bankruptcy court was correct in exercising jurisdiction and granting appellees' summary judgment motion. The judgment of the district court is accordingly affirmed.
The panel unanimously finds this case suitable for decision without oral argument. Fed. R. App. P. 34(a); 9th Cir.R. 34-4
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
We need not reach a possible fourth ground for rejecting the Smith's claim of error, that the suit against appellees was a core proceeding to which section 1334(c) (2) does not apply