Goodrich, Chapter 7 Trustee v. Hunt et al

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UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re:
ROBERT W. HUNT, M.D., a medical
corporation,
Debtor.
____________________________________
DAVID M. GOODRICH, Chapter 7
Trustee,
Plaintiff,
v.
PELI POPOVICH HUNT, individually and
as Trustee of the Robert and Peli
Hunt Living Trust,
Defendant.
Case No. 2:11-bk-58228 ER
Chapter 7
Adv. No. 2:12-ap-01988 ER
MEMORANDUM OF DECISION REGARDING
DEFENDANTS’ RIGHT TO JURY TRIAL
On July 17, 2013, the Court entered an Order Vacating Trial Date
and Setting Briefing Schedule on Issue of Defendants’ Right to Jury
Trial (“Order”). Pursuant to the Order, the Court, in part, required
FILED & ENTERED
OCT 16 2013
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	gonzalez
Case 2:12-ap-01988-ER Doc 173 Filed 10/16/13 Entered 10/16/13 10:57:29 Desc
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briefing on the issue of Defendants’ right to a jury trial on the
remaining issues to be tried, which the Court identified as
declaratory relief claims regarding:
1. whether Defendant, Peli Hunt (“P. Hunt”) in her capacity as an
individual interfered with the chapter 7 trustee’s (“Trustee”)
administration of assets of the estate by unreasonably and
improperly exercising dominion and control over property of the
estate;
2. whether P. Hunt’s actions violated 11 U.S.C. § 362(a)(3); and
3. whether the accounts receivable and medical liens at issue are
property of the estate or of the Robert and Peli Hunt Living
Trust (“Trust”).
The Court took this issue under submission as of September 17, 2013.
I
SUMMARY OF BRIEFS
A. Defendants’ Brief.
Defendants’ Brief is unclear and difficult to understand.
Defendants appear to make substantive arguments regarding the issues
set forth above (i.e., Debtor asserts that the accounts receivables
were assigned to the Robert and Peli Hunt Living Trust (“Trust”)), and
to object to issues already determined by the Court (i.e., issues
regarding the Trustee’s bond and the sustaining of the proof of claim
of certain doctors). Defendants’ Brief at 5, 7, 9, 12-13 and 16. These
arguments and objections are irrelevant to the issue of whether
Defendant is entitled to a jury trial. Notwithstanding, it appears
that Defendants’ main argument supporting the jury trial demand is
that this action involves contracts, and that the “right to a jury
trial on a contract claim is an undeniable right.” Defendants’ Brief
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at 12 (citation omitted). Defendants appear to identify the contracts
at issue as those “arising out of employment disputes [with] the
creditor doctors,” and accounts receivables. Defendants’ Brief at 2,
3, 6 and 13.
B. The Trustee’s Brief.
In response, the Trustee asserts that Defendants’ Brief is
nonresponsive to the issue of their entitlement to a jury trial with
respect to the issues identified in the Order. The crux of this action
is to prevent P. Hunt from interfering with the accounts receivable
and lien claims which Debtor scheduled as assets of the estate. The
Trustee believes that it is clear from Defendants’ Brief, however,
that Defendants wish to relitigate the issues which P. Hunt lost in
state court against certain doctors, who ultimately obtained a $3.5
million judgment against her and the Debtor. See Defendants’ Brief at
2; Trustee’s Brief at 5.
The Trustee argues that a jury trial is not warranted herein,
because the “underlying matters to be tried are all statutory and/or
equitable claims for which there would be no right to a jury trial
under federal law if they had been filed in a federal non-bankruptcy
proceeding.” Trustee’s Brief at 5. The Trustee further contends that
this action is akin to a quiet title action, because he is seeking a
“judicial determination that his title [in the account receivables and
lien claims] is paramount, free of the adverse claims.” Trustee’s
Brief at 6. Because the declaratory relief claims are equitable in
nature, no right to a jury trial exists.
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II
DISCUSSION
As noted above, the only discernible basis for a jury trial
asserted by Defendants is that this adversary proceeding involves
contract claims and that there is an “undeniable” right to a jury
trial in a contract action. However, there are no contract claims
asserted by the Trustee against Defendant; rather, this action seeks
to stop P. Hunt from interfering with the Trustee’s administration of
accounts receivables and liens claims. Moreover, the mere, possible
involvement of “contracts arising out of employment disputes as [to]
the creditor doctors,” and/or accounts receivables which the Defendant
refers to as “simple contracts” does not give rise to a right to a
jury trial. Defendant’s Brief at 2 and 6. “A party has a Seventh
Amendment right to [a] jury trial in a breach of contract action to
determine whether the contract has been breached and the extent of the
damages.” Infor Global Solutions (Michigan), Inc. v. St. Paul Fire
and Marine Ins.Co., 2009 WL 5909257 *1 (N.D.Cal.) (citations omitted).
There are no allegations of breach or damages asserted herein.
Moreover, the right to a jury trial attaches to legal claims,
“whereas no right to a jury exists for equitable claims. In
determining whether the jury right attaches to a particular claim for
relief, courts consider whether the rights and remedies at stake are
legal or equitable in nature.” Openwave Systems Inc. v. Myriad France
S.A.S., 2011 WL 2580991 *1 (N.D.Cal.). The Court agrees with the
Trustee that the remaining declaratory relief claims identified in the
Order and set forth above are more akin to a quiet title action and
are, therefore, equitable in nature. Specifically, the Trustee
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essentially seeks to prevent P. Hunt from interfering with the
administration of account receivables and lien claims, by obtaining a
determination that these assets do not belong to her and/or the Trust.
This is similar to a quiet title action because the Trustee “seeks a
judicial determination that his title is paramount, free of the
adverse claims.” Trustee’s Brief at 6. Because only an equitable
claim is involved herein, there is no right to a jury trial.
Openwave, 2011 WL 2580991 *2 (holding that no jury trial attached to
claim which was similar to quiet title claim).
III
CONCLUSION
Based on the foregoing, the Court finds that Defendant has no
right to a jury trial herein. The Court shall prepare an order
consistent with this Memorandum of Decision.
###
Date: October 16, 2013
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NOTICE OF ENTERED ORDER AND SERVICE LIST
Notice is given by the court that a judgment or order entitled (specify) MEMORANDUM OF DECISION
REGARDING DEFENDANTS’ RIGHT TO JURY TRIAL was entered on the date indicated as
AEntered@ 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
October 15, 2013, 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.
David M Goodrich (TR) trusteedg@marshackhays.com,
c116@ecfcbis.com;aconnell@marshackhays.com;dmg@trustesolutions.net
David Gould dgould@gglawllp.com
Kelly L Pexton kelly@pextonlaw.com, kelly.pexton@hotmail.com
James R Selth jim@wsrlaw.net, jselth@yahoo.com;megan@wsrlaw.net
United States Trustee (LA) ustpregion16.la.ecf@usdoj.gov
Service information continued on attached page
II. 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 U.S. Mail to the following person(s) and/or entity(ies) at the address(es)
indicated below:
Robert L Jarrett
106 1/2 Judge John Aiso #202
Los Angeles, CA 90012
Franklin P Jeffries
106 1/2 Judge John Aiso Ste 340
Los Angeles, CA 90012
Service information continued on attached page
III. TO BE SERVED BY THE LODGING PARTY: Within 72 hours after receipt of a copy of this
judgment or order which bears an AEntered@ stamp, the party lodging the judgment or order will
serve a complete copy bearing an AEntered@ 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:
Service information continued on attached page
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