Marieann Christman

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AC TZA
(Rev. WK2)

AUTHENTICATED
U.S. GOVERNMENT

INFORMATIO
GPO

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U.S. Bankruptcy Court
District of Idaho
Filed: November 16, 2004

at 2:00 PM
By: 10
IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF IDAHO

IN RE
CHRISTMAN, MARIEANN Case No. 04-03418

Debtor. MEMORANDUM OF DECISION

Net ee ee eee et

Marieann Christman (“Debtor”) filed her petition for chapter 7 relief on
September 21, 2004. On October 8, 2004, Debtor filed six motions under
§ 522(f)(1)(A) to void judicial liens allegedly impairing her homestead exemption.
See Doc. Nos. 4-9, Four of those motions have already been granted by the Court
and orders entered. Two of the motions, Doc. No. 4 (“Dunson Motion”) and Doc.
No. 9 (“Citibank Motion”), have not. Those motions were served only on the state
court lawyers who represented the creditors in obtaining the judgments that formed

the basis for the judicial liens, neither of whom appeared in the bankruptcy case.

' While the Dunson Motion was served only on a Boise, Idaho attorney, the
judgment attached to this motion indicates that Dunson was representing himself in the
pre-bankruptcy litigation. Assuming this lawyer represented Dunson, the service was
inadequate far the reasons set out below. If he was not Dunson’s lawyer, the error is even
more glaring.

MEMORANIDUM OF DECISION - 1

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This Court held in 47 re Lancaster, 03.1 1.B.C.R. 31, 2003 WL 109205
(Bankr. D. Idaho 2003), that the service requirements of Fed. R. Bankr. P. 7004
applied to contested matters including, but not limited to, motions to avoid judicial
liens under § 522(f). /¢@ at 31 (citing Fed. R. Bankr. P. 4003(d), 9014). Lancaster
cautioned that serving a § 522(f)(1)(A) motion only an the state court lawyer for the
judgment creditor would not meet Rule 7004 service requirements un/ess that
lawyer made an appearance in the bankruptcy case sufficient to support the
conclusion that he or she was authorized to accept service on behalf of the
creditor? /o. at 32 (citing /a re Kae, 286 B.R. 675 (Bankr. N.D. Ind. 2002) and
Citicorp Mortgage, inc. v. Brooks (in re Ex-Cel Concrete Co.), 178 B.R. 198, 203-04
(9th Cir. BAP 1995)).

The BAP recently came to the same conclusion in Seneticial Calitarnia Inc.
v. Villar fin re Villar), —_ B.R. (9th Cir. BAP October 20, 2004) availab/e at
http:/Awww.ce9. uscourts. gov/Web/bap.nsf (as of Nov. 16, 2004). ViVar dealt with
the avoidance of a judicial lien under § 522(f}(1)(A), and whether the debtor

established that service was properly effected."

* The decision in Lancaster, and this one, address the sufficiency of service on the
lawyer alone. There certainly would not be any prohibition on serving the § 522(f} motion
on the creditor, consistent with Rule 7004 requirements, aad sending a copy of the
pleadings to the state court lawyer for such creditor, even if only as a matter of professional
courtesy.

* The Panel held that the service requirements of Fed. R. Bankr. P. 7004(b}(3)
applied to the corporate creditor because Fed. R. Bankr. P. 4003(d) invokes Fed. R. Bankr.
P. 9014, and Rule 9014(b) requires service consistent with Rule 7004. /d at n.6; accord

(continued...)

MEMORANDUM OF DECISION - 2

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The debtor there served the motion on the corporate creditor by mail,
directed simply to the creditor’s post office box. The BAP held that “The service to
[the creditor’s] post office box does not comply with the requirement to serve the
Motion to the attention of an officer or other agent authorized as provided in Rule
7004(b)(3).”. The BAP emphasized that “strict” and “literal” compliance with the
Rule was a small burden when due process considerations and the special privilege
of first class mail service were considered. Accord Lancaster, 03.11.B.C.R, at 32.

The BAP did not decide whether addressing the service to the attention of an
officer or managing or general agent, without specifically naming that officer or
agent, was adequate. It instead held:

In the matter on appeal, Debtor’s service on [the creditor] does nat

specify a person or even an office. The service was insufficient under

the plain words of Rule 7004(b)(3), In order to assure that the party

being served is apprised of the pendency of an action, valid service

requires more than to address the document to a post office box.
fd. at 8. Accore In re Egan, 02.4 |.B.C.R. 177, 178 (Bankr. D. Idaho 2002) (service
found inadequate where “not directed to any particular individual, and . . .
certainly not addressed to any officer, manager or agent.”).

The debtor in Vifaralso mailed the motion to the lawyer representing the

creditor in the state court action giving rise lo the judgment. The BAP concluded

that the debtor had failed to show this lawyer “was either explicitly or implicitly

3, .continued}
Lancaster, 03.1 |.B.C.R. at 31. Vi/aralso observed that “[fhe litigant attempting to effect
service is responsible for proper service and bears the burden of proof.”

MEMORANDUM OF DECISION - 3

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appointed by [the creditor] to receive service of process on its behalf.” The Panel
stated:
Debtor no doubt served {counsel] with the motion because [counsel]
represented [the creditor] in the state court action which gave rise to the
judicial lien. That is not enough by itself to establish implicit authority
for [counsel] to accept service of process in matters involving Debtor's
bankruptcy. An implied agency to receive service is not established by
representing a client in an earlier action. We cannot presume from
[counsel’s] handling the litigation that resulted in the judicial lien that
he is also authorized to accept service for a motion to avoid the judicial
lien.
(citations omitted). Vi//arthus requires that the two instant Motions, served only on
such counsel, be denied.
The Ninth Circuit Court of Appeals in Aubin v Pringle (in re Focus Media,
Inc.), No, 03-55858, 2004 WL 2435496 (Sth Cir. Nov. 2, 2004}, also recently
reached the same basic conclusion. The issue there was service of process in an
adversary proceeding on an attorney who had represented the defendant in the
underlying bankruptcy case. The court construed Fed. R. Bankr. P. 7004(b)(8)* and
concluded that service would be proper “if (1) the agent [for service] is the attorney
representing the party in the related bankruptcy proceeding, and (2) the totality of

the surrounding circumstances demonstrates the intent of the client to convey such

authority”. /@ at*4. The court concluded that the authorization of the agent to

* The language in Rule 7004(b){8) at issue in Focus Media (related to “an agent...
authorized by appointment or by law to receive service”) is identical ta the language in
Rule 7004(b)(3) at issue in fgan, Lancaster, Villar, and here.

MEMORANDUM OF DECISION - 4

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accept service cannot be implied solely from the act of appearing as counsel but
requires additional facts or circumstances. See fd at *4-*5,

There is no evidence in the present case of any implied authorization of
Dunson’s or Citibank’s state court counsel to accept service generally or in
connection with this bankruptcy case. The service on these creditors’ previous
state court attorneys, without additional proof of express or adequately implied
authority that they were or could act as agents for purposes of service of process, is
inadequate. Therefore, the Dunson Motion and the Citibank Motion must be
denied.

A separate order will be entered.

Dated this 16th day of November, 2004.

TERRY L. MYERS
CHIEF U. 5. BANKRUPTCY JUDGE

MEMORANDUM OF DECISION - 5

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CERTIFICATE OF SERVICE

|, the undersigned, hereby certify that | served by the method indicated below, a true copy of the dexcument te which
this certificate is attached, to the following named person(s) at the following address(es), on the date shown below:

DATED: Novernber 16, 2004
Case No. 04-03418 (Marieann Christman)

Office of the U5, Trustee
ME Central Plaza
720 Park Blyd., Suite 220
Boise, ID 83712
jefe. howegpusdo) pov
Bary .ncclendon@usdo) pay
GUS. Mail 0 Facsimile ~ Ernail

C. Grant King
King Law Offices
5440 Franklin Road, Suite 100
Baise, ID 63705
¥ US. Mail O Facsimile 1 Emuit

Dennis Cain
Beer & Cain
Attorneys At Law
302 W. Idaho St.
Boise 1D 83702
deaingbbeer-cainlaw.com
OWS, Mail U Facsirniles / Email

Citibank (Arizona)
c/o Frank —. Chalfant, JR
8O5 W. Idaho Ste 412
POB 798
Boise 1D 83701
7 U5, Mail CO Feacnirriile: 1 Email

Richard E. Crawfarth, Trustee
410 South Orchard Ste 172
Baise ID 63705
rorawlorth@g atbleone net
0 U.S, Mail (4 Facsimile v Email

Marieann Christman
3440 West Elm Creek Drive
Meridian ID 83642
v U5, Mail NM Farsimile C Emait

aa

Ann B. Canderiun
dicial Assistant to Judge Myers

Note to Email service; A PDF version of the above decision/order was electronically transmitted to the
parties indicated above, Ernail service iy provided as a courtesy only upon request of a party. To review an
electronic image of the original of this document, ar to subscribe for email service of future
decisionvorders from the Bankruptcy Judge, please access the Court’s Internet web site,
www. id. uscourtipoy,

MEMORANDUM OF DECISION - 6

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