Bank of America, N.A. v. Greg James Ventures LLC et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
GREG JAMES VENTURES LLC, No. 07-11434
Debtor(s).
______________________________________/
BANK OF AMERICA, N.A.,
Plaintiff(s),
v. A.P. No. 08-1016
GREG JAMES VENTURES LLC, et al.,
Defendant(s).
_______________________________________/
Memorandum on Motion to Dismiss Bank’s Counterclaims
_________________
During the courts of litigation over cash collateral rights, several issues arose between debtor in
possession and defendant Greg James Ventures LLC and creditor and plaintiff Bank of America which could
only properly be adjudicated in an adversary proceeding. The Bank commenced this adversary proceeding in
order to resolve these issues. The Bank did name third parties as defendants, but only to determine if they
had any rights in the Bank’s collateral. Most of them readily stipulated to judgment.
The debtor answered the complaint and added a counterclaim against the Bank seeking its own
declaratory relief and seeking to avoid a lien held by the bank. Up to this point, everything was necessary and
proper.
On April 9, 2008, the Bank filed an answer to the debtor’s counterclaim and added its own
“counterclaim” against the debtor and several of the individuals it had named in its complaint. This pleading
seeks a determination as to the rights of the Bank against these third parties and a judicial determination that a
Entered on Docket
June 30, 2008
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 08-01016 Doc# 27 Filed: 06/28/08 Entered: 06/30/08 08:43:45 Page 1 of 3

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plan of reorganization filed by the debtor is not confirmable because it tramples on the Bank’s alleged rights.
It further seeks to enjoin attempts to confirm a plan which contains provisions which the Bank says violate its
rights.
Even assuming that a counterclaim to a counterclaim is permitted by FRCP 7, the Bank’s
counterclaim must still be dismissed. There is state court litigation pending between the Bank and the third
parties which is a perfectly proper forum for adjudication of issues between them, and adjudication of those
issues are not necessary to the bankruptcy proceedings.
Moreover, the Bank’s attempt to enjoin plan confirmation proceedings is patently improper. FRBP
7001 specifies what issues are to be litigated in the context of an adversary proceeding, and plan confirmation
is not among them; the Bank cannot turn confirmation into an adversary proceeding by seeking declaratory or
injunctive relief as to plan confirmation issues. Section 1129(a) of the Bankruptcy Code provides for
mandatory confirmation of any plan meeting the requirements of that section. Reference to any other rights or
claims is therefore irrelevant to the plan confirmation process and § 1129 cannot be circumvented through an
adversary proceeding.
For the foregoing reasons the court will abstain, pursuant to 28 U.S.C. § 1334(c)(1) and (2), from
adjudicating the Bank’s counterclaims against all non-debtor parties except the counterclaim for injunctive
relief. As to the non-debtors the Bank’s counterclaims, except the counterclaim for injunctive relief, will be
dismissed without prejudice. Insofar as the Bank’s counterclaim seeks injunctive relief barring the filing or
attempt to confirm any plan, it will be dismissed with prejudice as to all defendants.
Counsel for the debtor shall submit an appropriate form of order.
Dated: June 28, 2008
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 08-01016 Doc# 27 Filed: 06/28/08 Entered: 06/30/08 08:43:45 Page 2 of 3

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CERTIFICATE OF MAILING
I, the undersigned, a regularly appointed deputy clerk of the United States Bankruptcy Court for the Northern
District of California, at Santa Rosa, hereby certify:
That I, in the performance of my duties as such clerk, served a copy of the foregoing document by depositing
it in the regular United States mail at Santa Rosa, California on the date shown below, in a sealed envelope
bearing the lawful frank of the Bankruptcy Judge, addressed as listed below.
Dated: June 30, 2008 By : Katie Andersen
Katie Andersen
Deputy Clerk
Greg James Ventures, LLC
doing business as
San Rafael Cadillac
2 Shoreline Parkway
San Rafael, CA 94901
Greg James Ventures, LLC
doing business as
San Rafael Chevrolet
2 Shoreline Parkway
San Rafael, CA 94901
Greg James Ventures, LLC
doing business as
San Rafael Hyundai
2 Shoreline Parkway
San Rafael, CA 94901
Greg James Ventures, LLC
doing business as
San Rafael Hummer
2 Shoreline Parkway
San Rafael, CA 94901
Greg James Ventures, LLC
doing business as
San Rafael Saab
2 Shoreline Parkway
San Rafael, CA 94901
Lucien Friere
505 Vineland Marina Court
Fairfield, CA 94534
Case: 08-01016 Doc# 27 Filed: 06/28/08 Entered: 06/30/08 08:43:45 Page 3 of 3