GMAC n.k.a. Ally Financial, Inc. v. McClaren

OCR transcription for search; preserved printed pages are authoritative

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ENTERED
NOT FOR PUBLICATION | sp 3.5 91

4 CLERK US. BANKRUPTCY COURT

SEP 30 20i1 UNITED STATES BANKRUPTCY COURT Srl OTRIST OF CALFoRN

Ceputy Clark

LCUBRK US: BANKRUPTCY COURT, |CENTRAL DISTRICT OF CALIFORNIA
Aly: Deputy Clerk

LOS ANGELES DIVISION

In re: Case No. 2:10-bk-52240-PC

MARQUITA HELEN McCLAREN, Adv. No. 2:1 1-ap-01717-PC

Debtor. Chapter 7

GMAC n.k.a. ALLY FINANCIAL, INC.,

Plaintiff,
MEMORANDUM DECISION
v.

MARQUITA HELEN McCLAREN,

Defendant.

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Nee! Set! Sager!” Seed See” Se!” Seat! “See! Smee! See” Se! Se! ee!” See! Sere” ee!

By motion filed pursuant to F.R.Civ.P. 60(b)(1),' Plaintiff, GMAC n.k.a. Ally Financial,
Inc. (“GMAC”) seeks relief from an Order of Dismissal (“Order”) entered in the above
referenced adversary proceeding on August 25, 2011. For the reasons set forth in this
Memorandum Decision, the motion is denied.

I, STATEMENT OF FACTS

On October 1, 2010, Marquita Helen McClaren (“Debtor”) filed a voluntary petition for
relief under chapter 7 of the Bankruptcy Code. The deadline to file a complaint objecting to the
Debtor's discharge or the nondischargeability of a particular debt was January 4,2011. On

November 5, 2010, Debtor attended a meeting of creditors which thereafter was concluded by the

¥ Unless otherwise indicated, all “Code,” “chapter” and “section” references are to the
Bankruptcy Code, 11 U.S.C. §§ 101-1330 after its amendment by the Bankruptcy Abuse
26 | Prevention and Consumer Protection Act of 2005, Pub. L. 109-8, 119 Stat. 23 (2005). “Rule”
references are to the Federal Rules of Bankruptcy Procedure (“FRBP”), which make applicable
27 | certain Federal Rules of Civil Procedure (“F.R.Civ.P.”). “LBR” references are to the Local
Bankruptcy Rules of the United States Bankruptcy Court for the Central District of California.

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trustee. On the last day within which to file a complaint under § 523, Debtor and GMAC
stipulated to an extension of the deadline for GMAC to file a complaint to determine the
nondischargeability of a debt from January 4, 2011 to March 4, 2011. On January 6, 2011, the
trustee filed a Chapter 7 Trustee’s Report of No Distribution. On January 21, 2011, Debtor filed
a certificate reflecting completion of the course in personal financial management required for
discharge. Debtor received a discharge on February 3, 2011, and the case was closed on
February 14, 2011.

On March 4, 2011, GMAC filed a complaint seeking a judgment that Debtor’s debt to
GMAC is nondischargeable under § 523(a)(2) and § 523(a)(6). The complaint alleged, in
pertinent part, that (1) Debtor purchased a 2009 GMC Yukon from Moreno Valley Pontiac of
Moreno Valley, California, for the sum of $44,667.37 pursuant to a Retail Installment Contract
between the parties; (2) after purchasing the vehicle, Debtor turned over possession of the vehicle
to a third party who was not on the contract; (3) Debtor did not make the payments required by
the contract; (4) GMAC, as assignee of the contract, was unaware that Debtor was ostensibly
purchasing the vehicle for a third party and did not consent to the arrangement, (5) GMAC
obtained a default judgment in state court shortly before the Debtor’s bankruptcy for the balance
due under the contract and for possession of the vehicle; and (6) Debtor made material false
representations and omissions to GMAC, as assignee of the contract, to secure the loan, and
intentionally, willfully and maliciously converted GMAC’s interest in the vehicle by transferring
it to a third party without GMAC’s knowledge or consent. On April 4, 2011, Debtor was served
with a summons together with a copy of the complaint. The deadline to file an answer or other
response to the complaint was April 29, 2011. Debtor did not respond nor did GMAC seek entry
of a default pursuant to F.R.Civ.P. 55(a) due to the failure to respond.

On May 24, 2011, the court held a status conference in this adversary proceeding.

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GMAC did not timely file a status report prior to the status conference.” GMAC’s counsel
appeared by telephone at the status conference, at which time the court and counsel had the
following exchange:

COURT: It looks like an answer was due on April 29th. I have not received a request for
entry of default or a motion for default judgment.

COUNSEL: Ah yes, your honor, and we did file a status conference statement, but it was
yesterday so I assume you haven’t seen it. Ah, there was some confusion over whether or
not Ms. McClaren would be defended by her attorney in the underlying case or not who
we have worked with. Ah, in this situation its a case where Ms. McClaren, well we
allege that she purchased a vehicle using her credit, but immediately turned it over to a
third party. Ah, however we’ve been withholding moving the case forward cause if we
find the vehicle we will likely dismiss the case and we’ve been working in good faith to
try to do that. So, that’s kind of why we haven’t done anything. We would request a
little more time to keep on going down that path, if possible.

COURT: I will continue the matter for you to file a request for entry of default and a
motion for default judgment.

COUNSEL: Ah, I’m sorry, so do we...

COURT: Lam not going to simply continue the matter indefinitely . . .

COUNSEL: Okay.

COURT: The complaint was filed on March 4th. Summons has been properly served.
There’s been no response. I did not receive the status conference statement, by the way.
But normally I expect the request for entry of default to be made prior to the status
conference if no answer has been filed. Here, an answer was due on April 29th. We’re
now at the end of May and there is no activity in the case. So, I will give you 60 days to
seek entry of default and once that’s done, and the matter has yet to be settled, to file a
motion for default judgment.

COUNSEL: Understood.

COURT: August 23rd?

COUNSEL: August 23rd, at 9:30 again?

COURT: Yes.

COUNSEL: Thank you, your honor. We'll let, I’Il let all the parties know.

» LBR 7016-1(a)(2) requires that a status report be filed not later than 14 days prior to the date of
each status conference. GMAC filed its status report on May 23, 2011 — the afternoon before the
status conference. The court did not have GMAC’s status report at the time of the status
conference.

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On August 23, 2011, the court held a continued status conference in this adversary
proceeding. GMAC failed to file a status report with the court 14 days prior to the continued
status conference as required by LBR 7016-1(a)(2), and failed to appear at the continued status
conference as required by LBR 7016-1(a)(1). The court noted on the record that GMAC had not
appeared nor filed a status report prior to the continued status conference, and that according to
the docket there had been no activity in the adversary proceeding since the preceding status
conference. The court dismissed the adversary proceeding at the status conference pursuant to
LBR 7016-1(£)() & (g).’ The Order was entered on August 25, 2011.

On August 30, 2011, GMAC filed a Motion for an Order Setting Aside Order Dismissing
Adversary Proceeding (“Motion”). GMAC seeks relief from the Order pursuant to Rule 60(6)(1)
alleging excusable neglect. Specifically, GMAC states:

This Court dismissed GMAC’s adversary proceeding due to a lack of prosecution and the

failure to [sic] GMAC to appear at the status conference. As will be explained below, the

lack of prosecution was justified by efforts to resolve this case through a search for the
missing vehicle that caused the adversary proceeding. The failure to appear at the status
conference was due to a calendaring error by GMAC’s counsel. As this was [sic] failure
was due to excusable neglect, and as this Court never indicated that it was about to

dismiss the case for lack of prosecution, the Court should set aside the order dismissing
the adversary proceeding.“

GMAC gave 14-days notice of an opportunity to request a hearing on the motion pursuant to

¥ LBR 7016-1(£)(3) states, in pertinent part: “In addition to the sanctions authorized by
F.R.Civ.P. 16(f), if a status conference statement . . . is not filed within the times set forth in
subsections (a) . . . of this rule, the court may order . . .[ajn award of non-monetary sanctions . . .
. Non-monetary sanctions may include the entry of a judgment of dismissal . . . .

LBR 7016-1(g) further states, in pertinent part: “The failure of a party’s counsel . . . to appear
before the court at the status conference... , or to complete the necessary preparations therefor, .
.. may be considered an abandonment or failure to prosecute or defend diligently, and judgment
may be entered against the defaulting party either with respect to a specific issue or as to the
entire proceeding, or the proceeding may be dismissed.”

* Motion, 3:3-9.

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LBR 9013-1(0). On September 21, 2011, GMAC filed a Declaration Re: Entry of Order Without
Hearing Pursuant to LBR 9013-1(0) stating that it has received no opposition to the motion and
requesting that the relief sought in the motion be granted without a hearing.
II. DISCUSSION
Reconsideration of an order in a bankruptcy case may be sought under either FRBP 9023

or 9024, which incorporate F.R.Civ.P. 59(e) and 60(b), respectively. See Fuller v, M.G. Jewelry,

950 F.2d 1437, 1442 (9th Cir. 1991). Rule 60(b)(1) authorizes court to grant a party relief from
an order based on evidence of “mistake, inadvertence, surprise, or excusable neglect.”
F.R.Civ.P. 60(b)(1). GMAC correctly observes that “[t]he determination of whether neglect is

excusable is an equitable one, taking into account all relevant circumstances surrounding the

% When the motion is filed within 14 days of entry of the final order, it should be treated as a
Rule 59(e) motion to alter or amend judgment. See Am. Ironworks & Erectors, Inc. v. N. Am.
Constr. Corp., 248 F.3d 892, 898-99 (9th Cir. 2001) (construing former Rule 59(e) in which the
deadline to file a reconsideration motion was 10 days from entry of the order).

Reconsideration under Rule 59(e) is “an ‘extraordinary remedy, to be used sparingly in
the interests of finality and conservation of judicial resources.”” Carroll v. Nakatani, 342 F.3d
934, 945 (9th Cir. 2003) (citation omitted), Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877,
890 (9th Cir. 2000) (citation omitted). In the Ninth Circuit, “‘a motion for reconsideration
should not be granted, absent highly unusual circumstances, unless the district court is presented
with newly discovered evidence, committed clear error, or if there is an intervening change in the
controlling law.” Kona Enters., 229 F.3d at 890 (quoting 389 Orange Street Partners v. Arnold,
179 F.3d 656, 665 (9th Cir. 1999)). Reconsideration may also be granted “as necessary to
prevent manifest injustice.” Navajo Nation v. Confederated Tribes & Bands of the Yakima
Indian Nation, 331 F.3d 1041, 1046 (9th Cir. 2003).

In this case, the Order was entered on August 25, 2011. GMAC’s motion was filed on
August 28, 2011 — within 14 days of entry of the Judgment. Although timely, GMAC’s motion
would be denied under Rule 59(e) because the motion and supporting declaration do not establish
a prima facie case for relief under Rule 59(e). GMAC’s motion does not allege newly discovered
evidence nor an intervening change in controlling law. Nor do GMAC’s papers establish that the
court committed clear error in dismissing the adversary proceeding or that reconsideration is
necessary to prevent manifest injustice.

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party’s omission.”° The Supreme Court enunciated the standard for determining “excusable

neglect” in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship., 507 U.S. 380 (1993).’

* Motion, 6:26-27

1 In Pioneer, Brunswick Associates, Ltd., Clinton Associates Limited Partnership, Ft. Oglethorpe
Associates Limited Partnership, and West Knoxville Limited Partnership (collectively,
“Brunswick”), creditors of Pioneer Investment Services Company (“Pioneer”), received a
“Notice for Meeting of Creditors” in Pioneer’s chapter 11 bankruptcy setting a creditors’ meeting
for May 5, 1989. The notice also contained a bar date of August 3, 1989, to file proofs of claim
in the case. Brunswick retained Marc Richards (“Richards”) to represent them in the bankruptcy,
and Brunswick delivered to Richards the notice and a file containing all pertinent documents
regarding their claims at least two months prior to the claims deadline. Brunswick also
specifically asked Richards whether there was a deadline to file claims, to which Richards
incorrectly responded that no such date had been set by the court.

On August 23, 1989, Brunswick filed their proofs of claim together with a motion under
Rule 9006(b)(1) seeking a 20-day enlargement of the deadline to file claims on the ground of
excusable neglect. FRBP 9006(b)(1). In support of the motion, Richards claimed that he did not
have access to his file and was unaware of the bar date because the deadline “came at a time
when he was experiencing ‘a major and significant disruption’ in his professional life caused by
his withdrawal from his former law firm on July 31, 1989.” Id. at 384. The bankruptcy court
denied Brunswick’s motion, finding that Richards had actual notice of the claims deadline and
that the reason for the delay was not outside his control. Id. at 385-86. The bankruptcy court
further found that Richards was negligent in failing to file the proofs of claim prior to the bar
date, stating that Richards’ “actions indicated an indifference to the bar date and the orders of the
court.” Brunswick Assocs. Ltd. P’ship. v. Pioneer Inv. Servs. Co. (In re Pioneer Inv. Servs. Co.),
943 F.2d 673, 677 (6th Cir. 1991), aff'd, 507 U.S. 380 (1993). The district court affirmed.
Pioneer, 507 U.S. at 386.

The Court of Appeals for the Sixth Circuit reversed and remanded, holding that the
record supported a finding of excusable neglect. In so holding, the Sixth Circuit found “it
significant that the notice containing the bar date was incorporated in a document entitled “Notice
for Meeting of Creditors’,” and that creditors had not been given a specific notice of the claims
deadline on Form 16. Brunswick Assocs., 943 F.2d at 678. The Sixth Circuit stated:

While we do not suggest that the court was obligated to notify creditors in precisely this
form, the comparison between this Form 16 notice and the notice actually given in this
case suggests the dramatic ambiguity of the latter. This ambiguity is exacerbated by the
fact that the notice was simply and inconspicuously labeled “Bar date” without any
reference to its significance as a deadline for the filing of proof of claims. Even persons
experienced in bankruptcy might confuse such a label for other deadlines.

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The Court explained that the issue of whether admitted neglect can be excused is an equitable
determination that incorporates al! relevant factors, including (1) danger of prejudice to the non-
movant; (2) length of delay and its potential impact on judicial proceedings; (3) the reason for the
delay, including whether it was within the reasonable control of the movant, and (4) whether the

movant acted in good faith. Id, at 395. However, the Supreme Court reiterated in Pioneer that

“inadvertence, ignorance of the rules, or mistakes construing the rules do not usually constitute
‘excusable’ neglect.” Id. at 392. The Court also clarified that clients must be “held accountable
for the acts and omissions of their chosen counsel.” Id, at 396.

Following Pioneer, the Ninth Circuit in Pincay v, Andrews, 389 F.3d 853 (9th Cir. 2004)

(en banc), cert. denied, 544 U.S. 961 (2005), ruled that an attorney's culpable conduct is not “per
se” inexcusable, noting that “[a]ny rationale suggesting that misinterpretation of an unambiguous
rule can never be excusable neglect” is inconsistent with Pioneer. Id, at 859. In Pincay, an
attorney who had negligently delegated to a paralegal the responsibility for properly calculating

and calendaring an appeal deadline, failed to timely file a notice of appeal and filed a motion

Id. (emphasis added).

The Supreme Court affirmed, holding that a finding of “excusable neglect” was “not
limited strictly to omissions caused by circumstances beyond the control of the movant,” but was
an “elastic concept” that included, in appropriate circumstances, errors resulting from negligence,
including inadvertence, mistake or carelessness. Pioneer, 507 U.S. at 392. In reaching its
conclusion in Pioneer, the Supreme Court gave “little weight” to Richards’ excuse that he was
“experiencing upheaval in his law practice at the time of the bar date.” Id. at 398. The Court,
like the Sixth Circuit, focused on the ambiguous form of the bar date notice, coupled with the
lack of any evidence of bad faith, prejudice to the debtor, or delay in the judicial administration
of the case, stating that:

“the ‘peculiar and inconspicuous placement of the bar date in a notice regarding a
creditors[‘] meeting,’ without any indication of the significance of the bar date, left a
‘dramatic ambiguity’ in the notification.”

Id. at 398.

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seeking an extension of time. Counsel described the reason for the delay as “the failure of a
‘carefully designed’ calendaring system operated by experienced paralegals that heretofore had
worked flawlessly.” Id. The district court found excusable neglect and granted the motion. Id.
at 855-56. The Ninth Circuit ultimately affirmed, holding that the district court did not abuse its
discretion in finding excusable neglect and permitting the filing of the notice of appeal based

upon its application of the Pioneer factors. Id. at 860. Pincay stands for the proposition that a

trial court has wide discretion in weighing and applying the nonexclusive Pioneer factors and in

deciding whether to excuse the “lapse.” Id. at 859.

Pioneer requires that the issue of excusable neglect be determined in the context of the
particular case. Pincay, 389 F.3d at 859 (stating that the “question is whether there [is] enough in
the context of [the] case to bring a determination of excusable neglect within the . . . court's
discretion”). The burden of presenting facts demonstrating excusable neglect is on the movant.

Key Bar Investments, Inc. v. Cahn (In re Cahn), 188 B.R. 627, 631 (9th Cir, BAP 1995); In re

Pac. Gas & Elec. Co., 311 B.R. 84, 89 (Bankr. N.D. Cal. 2004). Because Pioneer’s four factors

are non-exclusive, the court is permitted to take “account of all relevant circumstances
surrounding the party’s omission” in making an equitable determination. Pioneer, 507 U.S. at

395. Pioneer mandated a balancing test for divining excusable neglect, but Pioneer did not

assign the weight to be accorded by the court to each of its non-exclusive factors in making an
equitable determination. See Pincay, 389 F.3d at 860 (stating that “we leave the weighing of

Pioneer’s equitable factors to the discretion of the . . . court in every case”); Lowry v. McDonnell

Douglas Corp., 211 F.3d 457, 463 (8" Cir. 2000) (stating that “[t]he four Pioneer factors do not
carry equal weight”), cert. denied, 531 U.S. 929 (2000).

A. Danger of Prejudice to the Non-moving Party.

Citing Nealey v. Transportacion Maritima Mexicana. $.A., 662 F.2d 1275, 1281 (9th Cir.

1980), GMAC argues that the Debtor will not be prejudiced because “neither loss of evidence

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nor loss of memory by a witness prejudices [the Debtor].’* The court notes that Nealey preceded
the Supreme Court’s decision in Pioneer. But even Nealey acknowledges, consistent with
Pioneer, that “neither delay nor prejudice can be viewed in isolation.” Id. at 1280.

One year has passed since the Debtor filed her bankruptcy petition. According to the
docket, Debtor filed all requisite schedules, statements, documents and certificates, cooperated
with the trustee, attended her creditors’ meeting, and received a discharge. Debtor’s case was
closed 7 months ago. The only remaining impediment preventing Debtor from enjoying the fresh
start earned upon her discharge in bankruptcy was the pending adversary proceeding filed by
GMAC. Objections to the nondischargeability of debts are strictly construed against the

objecting party and liberally construed in favor of the debtor. Quarre v. Saylor (In re Saylor). 108

F.3d 219, 221 (9" Cir. 1997). Expeditious adjudication of such objections promotes the fresh
start policy of the Code.

Having filed a complaint alleging that its claim against the Debtor was nondischargeable
under § 523(a)(2) and (6), GMAC had the responsibility to diligently pursue its causes of action
to judgment. Instead, GMAC did not prosecute its claims admitting both in the Motion and
previously in open court that it “would prefer to have the vehicle rather than a judgment against a
pro per Debtor with limited income.” GMAC’s lien on the subject vehicle survived the Debtor’s
discharge and the closing of Debtor’s bankruptcy case. GMAC has the right to take immediate
possession of the vehicle, to foreclose its lien, and to apply the proceeds to the remaining amount
due on the contract. GMAC does not need this adversary proceeding to exercise those rights. In

the court’s view, GMAC’s failure to diligently prosecute its claims was prejudicial to the

¥ Motion, 7:16-17.

* Motion, 5:15-16.

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Debtor’s fresh start.'® Therefore, this factor weighs in favor of the unrepresented Debtor.

B. Length of the Delay and its Potential Impact on Judicial Proceedings.

The Order was entered on August 25, 2011, and the Motion was filed on August 30,
2011. The Motion was timely. The delay was not significant and GMAC’s action in seeking
relief from the Order does not, in and of itself, adversely affect judicial proceedings.

C. Reason for the Delay, Including Whether it was Within the Reasonable Contro of the Movant.

Of the four factors, the reason for the delay is preeminent. See United States v. Torres,

372 F.3d 1159, 1163 (10th Cir. 2004) (“fault in the delay remains a very important factor —
perhaps the most important single factor — in determining whether neglect is excusable.’’)
(quoting City of Chanute v. Williams Natural Gas Co., 31 F.3d 1041, 1046 (10th Cir. 1994));

Graphic Comme’ns Int’] Union vy. Quebecor Printing Providence, Inc., 270 F.3d 1, 5 (1st Cir.

2001) (“We have observed that the four Pioneer factors do not carry equal weight; the excuse

given for the late filing must have the greatest import.) (internal quotation marks and bracket
omitted).

It is undisputed that GMAC failed to file a status report with the court prior to the August
23rd status conference as required by LBR 7016-1(a)(2), and then failed to attend the August
23rd status conference as required by LBR 7016-1(a)(1). GMAC’s repeated violation of LBR
7016-1(a)(2), by failing to file a status report with the court not later than 14 days prior to each

status conference, coupled with its failure to attend the status conference in violation of LBR

8” GMAC also contends that Debtor has “conceded liability” by failing to answer or respond to
GMAC’s complaint. Motion, 7:19-20. However, GMAC did not request an entry of default.
Only an entry of default cuts off the defendant’s right to appear in the action or to present
evidence. Cohen v. Murphy, 2004 WL 2779942 (N.D. Cal. 2004); see In re Uranium Antitrust
Litigation, 473 F.Supp. 382, 386 (N.D. Ill. 1979) (stating that “the defaulting defendant loses his
standing to defend on the merits”). More importantly, GMAC had the burden to establish the
nondischargeability of its debt notwithstanding the Debtor’s failure to file an answer. See All
Points Capital Corp. v. Meyer (In re Meyer}, 373 B.R. 84, 88 (9" Cir. BAP 2007) (“[I]t is black-
letter law that entry of default does not entitle a plaintiff to a judgment as a matter of right or as a
matter of law.”). GMAC did not prosecute its claims.

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7016-1(a\(1), was grounds for dismissal of the adversary proceeding under LBR 7016-1(f)G3) &
(g). GMAC’s counsel argues that his failure to do so was excusable.

GMAC’s counsel admits that his culpability was the sole reason for the delay and that the
delay was squarely within his control.’ GMAC’s counsel did not miss the deadlines due to ill
health or disability, a delay in the mai!, a miscommunication or failure to communicate with his
client, a misguided instruction from a court clerk or judicial officer, or a “dramatic ambiguity”
between relevant procedural rules. Nor was GMAC’s counsel the unwitting victim of an
aberration in an otherwise fail-safe calendaring system, as in Pincay. “While a court ‘may
properly find excusable neglect [where the language of a rule is ambiguous or susceptible to
multiple interpretations or where an apparent conflict exists between two rules], . . . [the] failure

to follow the clear dictates of a court rule will generally not constitute such excusable neglect.

Ceridian Corp. v. SCSC_Corp., 212 F.3d 398, 404 (8th Cir. 2000) (quoting Canfield v. Van Atta

Buick/GMC Truck, Inc., 127 F.3d 248, 250 (2d Cir. 1997), cert. denied, 522 U.S. 1117 (1998)).

Furthermore, the court explained to GMAC’s counsel at the May 24th status conference
that it expected the case to be prosecuted diligently and continued the status conference to
August 23, 2011, to “give [GMAC] 60 days to seek entry of default and once that’s done, and the
matter has yet to be settled, to file a motion for default judgment.” GMAC’s counsel stated on
the record at the May 24th status conference that he “understood” the court’s instructions, as well
as the date and time of the continued status conference on August 23, 2011. The 60-day period
following the May 24th status conference expired on or about July 25, 2011. GMAC did not
request entry of default, as instructed by the court. Nor did GMAC file a motion for default
judgment. Stalled settlement talks do not excuse counsel’s inattention to the adversary

proceeding. See In re Enron Corp., 419 F.3d 115, 126 (2d Cir. 2005) (creditor’s failure to timely

” “Unfortunately, due to a calendaring error on my part, the continued status conference was not
calendared.” Declaration of Bernard J. Kornberg, 3:12-13. “The failure to file a joint status
report or to appear at the status conference is due to a calendaring error by me.” Id. at 4:16-17.

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file a proof of claim “solely from inadvertence” because its counsel was heavily focused on
negotiations with debtor’s subsidiary was not excusable neglect of the type sufficient to justify
extending the claims bar deadline) (emphasis added). Counsel’s admission that he was “planning
to submit a request for entry of default the very day the Court dismissed this matter” indicates
that the court’s instructions on May 24th were understood then ignored.'’ Therefore, the court

weighs this Pioneer factor heavily in favor of the Debtor.

D. Good Faith.
There is no reason to attribute any bad faith or gamesmanship to the actions of GMAC or
its counsel in making the Motion.
III. CONCLUSION

“The bankruptcy court has broad discretion to apply its local rules strictly or to overlook

any transgressions.” Nunez v. Nunez (In re Nunez), 196 B.R. 150, 157 (9th Cir. BAP 1996); see
Miranda v. S. Pac. Transp. Co., 710 F.2d 516, 521 (9th Cir. 1983) (“District courts have broad

discretion in interpreting and applying their local rules.”). The failure to adhere to a court’s local
rules is grounds for dismissal. Ghazali v. Moran, 46 F.3d 52, 53 (9th Cir. 1995). While two
factors tip in favor of GMAC, the court balances the totality of the Pioneer factors in favor of the
Debtor and finds that GMAC has not discharged its burden to establish that its failure to file a
status conference report, to appear at the status conference, and to diligently prosecute the
adversary proceeding was the result of excusable neglect. Accordingly, GMAC’s Motion is
denied.

The court will enter a separate order consis

Dated: September 30, 2011

PETER H. CARROLL
United States Bankruptcy Judge

48 Declaration of Bernard J. Kornberg, 4:17-18.

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Case 2:11-ap-01717-PC Doc12 Filed 09/30/11 Entered 09/30/11 17:37:08 Desc
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In re:
CHAPTER:

Debtar(s). CASE NUMBER:

NOTICE OF ENTERED ORDER AND SERVICE LIST

Notice is given by the court that a judgment or order entitled (specify _ MEMORANDUM DECISION __was entered on the
date indicated as “Entered” on the first page of this judgment or order and will be served in the manner indicated below:

I. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING {“NEF”} - Pursuant to controlling General Order(s) and
Local Bankruptcy Rule(s), the foregoing document was served on the following person(s) by the court via NEF and hyperlink to
the judgment or order. As of _9-30-2011_, the following person(s) are currently on the Electronic Mail Notice List for this
bankruptcy case or adversary proceeding to receive NEF transmission at the email address(es) indicated below.

e Bernard J Kornberg bjk@severson.com
e United States Trustee (LA} ustpregion16.la.ecf@usdoj.gov

CO Service information continued on attached page

ll. SERVED BY THE COURT VIA U.S. MAIL: A copy of this notice and a true copy of this judgment or order was sent by
United States Mail, first class, postage prepaid, to the following person(s) and/or entity(ies) at the address(es) indicated below:

Marquita Helen McClaren
2171 West 30th St.
Los Angeles, CA 90018

CL] Service information continued on attached page

Ill. TO BE SERVED BY THE LODGING PARTY: Within 72 hours after receipt of a copy of this judgment or order which bears
an “Entered” stamp, the party lodging the judgment or order will serve a complete copy bearing an “Entered” stamp by U.S.
Mail, overnight mail, facsimile transmission or email and file a proof of service of the entered order on the following person(s)
and/or entity(ies) at the address(es), facsimile transmission number(s), and/or email address(es) indicated below:

C] Service information continued on attached page

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

January 2009 F 9021-1.1