GEORGE NIELSEN, Chief Judge, Bankruptcy
This proceeding, involving a civil complaint removed from the District Court of the Navajo Nation, Judicial District of Tuba City, Arizona, by defendants, was tried to the court as a bench trial on February 11-13, and April 3, 2002. Closing memoranda were subsequently filed. An interim order was entered on May 16, 2002, announcing the court's decision.
The court has considered the stipulated joint pretrial statement filed September 26, 2001, closing briefs, the declarations and testimony of witnesses, admitted exhibits and the facts and circumstances of this proceeding. The following findings and conclusions are entered:
FINDINGS OF FACT
1. Davis Chevrolet, Inc. was a debtor in possession, having filed a voluntary Chapter 11 bankruptcy case in the District of Arizona on September 16, 1997. Debtor made a speaking motion to convert to a Chapter 7 liquidation on May 15, 1998. Mins. of May 15, 1998, administrative docket no. ("Dk") 98. The motion was granted that day. Id. At the time, an involuntary motion to convert the case to Chapter 7 by creditor General Motors Acceptance Corporation ("GMAC") was pending. Dk 83.
2. Earlier on April 23, 1998, secured creditor GMAC filed an emergency motion for return of estate property and, inter alia, an examination of all of debtor's records. Dk 77. The attached affidavit of Mary Bradley, an unsecured creditor who resided next to the Davis Chevrolet dealership, reported that she personally observed Ben Hatch ("Hatch" or "plaintiff") and Jonathan Claw loading items from the dealership's parts department into a trailer during the evening of April 22, 1998. Id. at affidavit;see also Tr. of Apr. 23, 1998, at 2-8. Jonathan Claw is the son-in-law of Don Davis, debtor's president. Affidavit, supra.
Ben Hatch was debtor's sales manager. Since the automatic stay of 11 U.S.C. § 362(a) was ordered to lift as of April 23, 1998, at 5:00 p.m., GMAC argued the reported activities were attempts to frustrate its collateral enforcement rights in debtor's parts inventory, furniture, fixtures, inventory vehicles, trailers and accounts receivable. GMAC motion, supra, at 3-5.
Order of March 2, 1998, Dk 69A; mins. of Feb. 23, 1998 stay lift hearing. Dk 68.
Movant sought entry of an order on an emergency basis requiring persons acting on behalf of debtor, including Ben Hatch, "Anita" [sic] Cunningham, Jonathan Claw and others to return debtor's property and records. Id. at 5. Additional requested relief included allowing creditor inspection of all books and records of debtor and all property and assets located at the dealership.Id.
3. An emergency hearing on the motion was conducted. Mins. of Apr. 23, 1998, Dk 76. Counsel for debtor, GMAC, creditor General Motors ("GM") and the unsecured creditors committee were present. Debtor did not oppose the inspection. The automatic stay was formally lifted in favor of GMAC. After an extensive number of interlineations were added, the court issued an April 23 order.Id.
4. The order, inter alia, (1) required return of all property removed by debtor or its employees, including Ben Hatch and Juanita Cunningham, (2) allowed GM, GMAC and the official creditors committee to inspect all property and assets at the dealership, and (3) authorized GM's counsel to immediately remove, catalog and deliver all of debtor's books and records to debtor's Phoenix counsel. Dk 78.
GM's counsel explained he volunteered his firm's services to retrieve and transport the books and records because of his firm's size and resources, including a trained paralegal that had the background to accomplish the task. Tr. of Apr. 23, 1998 hearing at 21-22. See also direct trial test. of Donald L. Gaffney of Apr. 3, 2002.
5. At the April 23, 1998 hearing, the court sua sponte announced there had been an ex parte contact on the evening of April 22. GM counsel had called the court at home to seek an emergency hearing the next day. Hearing tr. at 11. Counsel was able to contact this judge through the intervention of another Phoenix bankruptcy judge. Cross-exam. test. of Donald L. Gaffney of Apr. 3, 2002.
6. During the hearing, the court inquired whether personal relations at the dealership were such that assistance in executing the order should be sought from the United States Marshal. Tr. at 27. Difficulties were not anticipated, although the unsecured creditors committee reported distrust and some ill will between former employees and debtor's officers. The committee's counsel had been in contact with Tribal police and the county sheriff's office and was assured officers would respond if necessary. Id. at 27-28.
Tensions included creditor GM's belief debtor was unduly influenced by the Ames Brothers' Ford dealership in Winslow, Arizona, and through relationships with debtor's employees, such as plaintiff Ben Hatch and Juanita Cunningham. Gaffney direct and cross-exam. In addition, GMAC employee Newel F. Knight had been stationed at the dealership six days a week for two years, starting in 1996, because of debtor's failure to pay GMAC liens when vehicles were sold. This "out of trust" situation started before plaintiff Ben Hatch became Davis's sales manager. Knight direct test. of Feb. 11, 2002.
7. On Thursday, April 23, 1998, following entry of the order, GM's counsel instructed defendant Ute-Karin Reding, a law firm paralegal with ten years of experience, to immediately travel to the dealership, located on the Navajo Nation reservation. She was to retrieve, catalog and remove all records. She was given no instructions regarding the personal records of individuals at the property. Ms. Reding had twice before led a document search team. Her experience included the American Continental case, involving millions of documents located in a huge warehouse. Defendant Reding asked paralegal Karen Lyons to assist in the inspection and document retrieval. Since it was an emergency, the women borrowed clothing for the trip. Ms. Lyons started with the firm in December of 1997. She had never participated in a records search or received training on this subject. Her instructions were to take all documents and not exercise discretion. Lyons direct and cross-exam. test. of Feb. 12, 2002; Reding test. of April 3, 2002. Ms. Reding chose Ms. Lyons for this project because she had been defendant's assistant for four months and had originally been hired by defendant. Reding cross-exam.
8. The paralegals arrived at the dealership on Thursday evening, April 23, at approximately 8:00 or 8:30 p.m. after flying to Flagstaff, Arizona, from Phoenix and driving by rental car to Tuba City. A moving van ordered by the law firm was parked outside the location with two professional movers. Lyons, Reding test., supra.
Juanita Cunningham, who was waiting for the paralegals at the dealership, places their arrival at around 9:30 p.m. Direct test. of Feb. 11, 2002.
9. Ms. Cunningham, officer manager for Davis Chevrolet since 1996, had been asked by Ben Hatch to meet the creditor's paralegals that evening. She agreed to do so, and returned to the dealership at 7:00 p.m., after working 8:00 a.m. to 5:00 p.m. that day. She lived in a trailer directly behind the dealership. Direct test. of Feb. 11 and 12, 2002. That afternoon, she learned from debtor's attorney, S. Matt Collins, that a secured creditor was expected to arrive to conduct an emergency retrieval of debtor's records. She was instructed by Collins to be cooperative. She was disgusted that she was required to wait at the dealership from 7:00 to 9:00 or 9:30 p.m., until the Phoenix paralegals arrived. Direct test. of Feb. 12, 2002.
10. Although aware of the impending records search, Ben Hatch did not remain at the dealership Friday evening. Instead, he left the site for his Winslow home around 5:00 p.m on April 23, to begin preparing for an annual Ford barbecue the following Saturday. He traditionally cooked for the event. His brother, Marvin Hatch, owned the Ford dealership in Winslow. Hatch previously worked for this dealership, known as Ames Brothers Ford. He became acting sales manager for Davis Chevrolet in September of 1996, and permanent sales manager in March or April of 1997, at the request of Don Davis, debtor's owner.
To save expenses, plaintiff Hatch lived in an upstairs room at the dealership Monday through Friday. He normally returned to his Winslow home on weekends. Plaintiff had no written lease with debtor for this room. Information about the arrangement did not appear in the bankruptcy records. However, GMAC employees Newell F. Knight and Rich Johnson knew of the private room. No evidence was presented which established that any of the present defendants had knowledge of the existence of plaintiff's private room prior to the search of April 23, 1998. Test. of Newell F. Knight; test. of Cynthia Yazzie; Feb. 11, 2002 test. of Juanita Cunningham; cross-exam. of S. Matt Collins; Feb. 12, 2002 test. of Ben Hatch.
11. Hatch kept personal papers in his room, as well as copies of debtor's business records, such as "recap" sheets. Hatch testified he kept overnight, in his room, cash from debtor's daily business operations. He claims to also have kept personal cash in his private room in amounts ranging from nearly zero to $30,000 under a mattress. By October of 1996, he alleges he possessed $55,000 in cash that he buried in his backyard in Winslow. This money was accumulated, plaintiff testified, by a $49,000 loan secured by a second mortgage on his home, assorted loans from his brother's businesses, including Ames Brothers Ford, cash draws from credit cards and personal savings. The original purpose of placing the second mortgage was to finance construction of a separate residence constructed of straw bales. The loan proceeds were not used for this purpose, however. When he needed cash, plaintiff testified he would return to his Winslow home and retrieve it from his backyard, where it was kept in one hundred dollar bills in a buried glass jar.
Direct test. of Feb. 12, 2002. His February 13 testimony was a range of cash under his mattress of $800 to $30,000.
At the time of the April document search, plaintiff asserts he had $10,000 each in two envelopes and a single envelope with $9,000 under his mattress in his private room. Although at least a portion of this $29,000 cash sum came from plaintiff's backyard, he did not list his yard as a source of the funds in his interrogatory answer number six. See ex. E at 2. Plaintiff has no explanation for failing to provide this information in his interrogatory answer. He denies using the backyard buried cash as a convenient explanation for sources of the missing $29,000. He buried money because he does not trust banks, although he maintained both a checking and a savings account in a bank. While not trusting banks, he kept as much as $30,000 in a bank savings account for several months. Hatch test. of Feb. 12, 13, 2002. His bank was a mile from the dealership. Cunningham cross-exam. of Feb. 12, 2002. The court does not find plaintiff's testimony credible concerning the existence and source of the missing funds.
12. Although plaintiff was an employee of Davis Chevrolet, holding no ownership interest, he nonetheless started in October 1996, making undocumented, interest-free loans to the dealership. None of these transactions were reported to the bankruptcy court in debtor's monthly financial reports or through compliance with Fed. Bankr. R. 4001 (c). If the dealership was short of funds for a parts delivery, office staff would ask Hatch for between $200 and $2,500 to pay the delivery agent. He also advanced cash for debtor's payroll in an unrecalled amount. Cunningham test. of Feb. 12, 2002.
Cunningham cross-exam. of Feb. 12, 2001.
Some of plaintiff's short-term loans were in cash. Others were in the form of personal checks. Toward the end of debtor's operations, plaintiff and office manager Cunningham were paid in cash. Nine days before the document seizure, plaintiff received a $12,000 check drawn on debtor's bank account. Ex. 18. Although Ms. Cunningham signed the check, she does not recall why it was issued to plaintiff . Shortly before the document seizure, Don Davis wrote an April 20, 1998 letter — allowing plaintiff to take title to a vehicle in exchange for payments benefiting debtor. Ex. 5; Hatch test. of Feb. 13, 2002. Ms. Cunningham, who was responsible for preparing the financial records for debtor's monthly bankruptcy reports, does not know why she did not report these transactions. Plaintiff stated to her that he had provided approximately $21,000 in cash to debtor in 1998 to purchase a pickup truck for resale. Ms. Cunningham was not personally involved in the transaction; she was only told about it later. Test. of Feb. 12, 2002.
Plaintiff testified he would be repaid for his loans in one to two weeks. Direct test. of Feb. 12, 2002. He did not keep written records of his loans. Instead, he kept the accounts in his head. Plaintiff denies the testimony of his own witness, Juanita Cunningham, that he kept written records of his loans. Hatch's brother Marvin also supplied cash to plaintiff from Ames Brothers Ford to help debtor. Hatch claims to have used his own cash to obtain cashier's checks for debtor's business, but has no independent evidence to establish this.
Plaintiff's affidavit of June 8, 1998 states that on April 21, 1998 he wrote a check for $11,090 to purchase a 1996 Ford truck titled in his own name. Ex. 6, at 2, para. f. It is his testimony that he deposited $11,000 in cash to cover this check and still had $29,000 in remaining cash that he left in his private room two days later. Hatch test. of Feb. 13, 2002.
Ms. Cunningham kept a paper record of plaintiff's loans to debtor in her desk. Test. of Feb. 11, 2002. However, these records were removed during the document search and not returned. Test. of Feb. 12, 2002. As a consequence, plaintiff cannot produce independent documentary evidence of large amounts of personal cash maintained in the private room.
The court finds testimony that plaintiff had $29,000 in cash in his private room at the dealership on April 23, 1998 not credible. Hatch test. of Feb. 12, 13, 2002.
13. Plaintiff was told by Don Davis he held the only key to the bedroom/private room. Test. of Feb. 12. He learned from a fax from debtor's attorney that people were coming on April 23 to collect records from the dealership. Nonetheless, he left the dealership for Winslow at approximately 5:00 p.m. without giving Juanita Cunningham any special instructions regarding his private room, which contained $29,000 in cash.
Plaintiff testified he did not understand that his private room was going to be searched even though: (1) The order of April 23 specifically mentioned his name, and authorized inspection of all dealership property, Dk 78, at 2; (2) Prior to Hatch's departure, GMAC representative Rick Johnson requested plaintiff remove guns kept in his private room in preparation for the search, which plaintiff agreed to do, and (3) Even though Johnson asked Hatch to be permitted to personally search a box of dirty laundry Hatch had removed from his private room and placed in his truck for the Winslow departure. Plaintiff permitted the laundry search, then departed with his guns, but forgot his $29,000 in cash. Test. of Feb. 13. He left the dirty laundry at the dealership "in case anyone else wanted to inspect it," but left no instructions regarding any other inspections of his personal property. He did not provide Ms. Cunningham with a method to reach him over the weekend. He failed to check to see if any of debtor's books and records were in his room before he left. Cross-exam. of Feb. 13. The court does not find this testimony and conduct credible.
Since Hatch left no instructions with Ms. Cunningham regarding his room, nor provided a way to contact him over the weekend, she called plaintiff's brother to report defendant Reding was attempting to enter and search the locked room. Test. of Feb. 12. Plaintiff spoke to his brother at the Saturday barbecue, but cannot recall if he was told Ms. Cunningham was trying to reach him. Hatch direct test. of Feb. 13.
14. During that weekend, Hatch was visited at his Winslow home by GMAC employee Newell F. Knight on Saturday. Knight informed plaintiff that his private room had been searched. Plaintiff did nothing concerning the search and did not return to the Tuba City dealership earlier than his usual Monday arrival time. Although he did not return to the dealership earlier than usual, he did request Knight accompany him to his private room to see if his money was still there. Cross-exam., id.; test. of Newell F. Knight of Feb. 11. The court does not find this conduct credible.
15. Upon her arrival on Thursday night, defendant Reding discovered a locked upstairs room. Ms. Cunningham informed her that it was plaintiff's private room. Ms. Cunningham denied having a key. Following telephonic contact with attorney Gaffney, she learned a locksmith was coming to unlock the door. Ms. Cunningham testified she asked to be present when the door was unlocked, even though she had been given no instructions regarding Hatch's room. Reding direct; Cunningham cross-exam. of Feb. 12. Ms. Reding saw no reason to include a "neutral" person when she finally entered the private room. At this time, Ms. Cunningham was very angry. Reding, id. Ms. Cunningham was "disgusted" she had waited at the dealership more than two hours Thursday evening for the paralegals to arrive. She had to cancel personal appointments for Friday and Saturday, felt she was mistreated and had verbal confrontations with defendant. Cunningham test. of Feb. 12. Because of what she viewed as Ms. Cunningham's interference and lack of cooperation, defendant threatened to call for law enforcement assistance to induce Ms. Cunningham to "back off." Reding direct. Commercial mover Thomas Gruislak witnessed a lack of cooperation from Ms. Cunningham. Gruislak test.
Given the personal animosity, the lack of authority of Ms. Cunningham to represent Hatch's interests, and the fact Ms. Reding was operating under a court order, the court does not find the lack of a representative of debtor or plaintiff to be included in the search of the private room to be unreasonable under the circumstances.
As noted, supra, Ms. Cunningham was a named party, directed by the order to return any estate property she might have removed. Finding of fact no. 4, Dk 78.
16. During the Thursday evening initial inspection, Ms. Reding discovered a much greater number of documents to be removed than expected. The commercial mover estimated it would take two to three days. Reding cross-exam. Yet, Ms. Cunningham constantly pushed the team to finish quickly. Koren Lyons direct and redirect of Feb. 13, 2002.
Following a Thursday night walk through the premises with defendant Reding, commercial mover Gruislak acquired more men for his work crew and started at 9:00 a.m. the next day. The moving team worked only in pairs, which is normal company procedure in a seizure. A 21-page inventory, listing the items and their locations, was created. Ex. A. Defendant law firm Snell Wilmer was charged $7,434.89 for work between April 23 and 26 to pack, remove and transport the documents. Two vehicles and a daily four or five-person crew were required to complete the job. Ex. B. Gruislak test.
17. Defendant's locked private room was discovered by the two paralegals and the mover on the Thursday evening walk-through. The room was opened by a Flagstaff, Arizona locksmith on Friday evening, April 24, 1998, at a cost of $272.50 to the law firm. Ex. F. Defendant Reding entered the opened room alone for a few moments, then Ms. Lyons was called in and shown various documents to be retrieved the following day. Nothing was removed that evening. Ms. Reding locked the door and retained all keys. The creditor party then left for the evening and Ms. Cunningham locked the dealership property. Lyons test.; Reding test.
Saturday morning, April 25, 1998, Ms. Reding unlocked plaintiff's room and instructed Ms. Lyons and one of the movers, Eric, to search and retrieve records. Property removed from the room was identified in the inventory as coming from "Ben's Bedroom." Ex. A at 7D00515; Ex. C at 7D0049. Eric and Ms. Lyons remained in the room together, with the possible exception of Ms. Lyons leaving the room to report finding three envelopes of cash in a jacket pocket to Ms. Reding. Test. of Gruislak ("Eric and Corrine packed in the room and were always together"); Lyons test. ("I knew we were supposed to be together in the room, can't recall if I left the room to call defendant to the room or called to defendant from the upstairs room."); Reding test. (Cannot recall if Ms. Lyons called her up to the room to show the money found in the jacket or came downstairs and got her.)
The cash in the three envelopes ranged in amounts from $213.64 to more than $700.00. Ex. C at 7D0049. The cash and documents found in the envelopes were counted, inventoried and returned to the jacket. Id., Lyons Test. Documents and papers found in the room were inventoried and removed. Some papers were copies of debtor's records; others were plaintiff's personal papers. Some, but not all of plaintiff's personal papers were later returned. Hatch test. of Feb. 13.
Ms. Lyons searched plaintiff's personal clothing, opened drawers and even untucked his socks in her search for documents. She searched extensively, as her instructions were to take all documents and not exercise discretion. She and Eric looked under plaintiff's bed and felt under his mattress. They did not find or take the $29,000 allegedly hidden under plaintiff's mattress. Lyons test. See also test. of Gruislak ("No one on movers team showed signs of sudden wealth after the job.") The court finds this testimony credible.
18. When defendant Reding initially entered plaintiff's locked room, it appeared neat and tidy. She observed documents and papers, but did not read them, given her instructions to collect all records. Saturday morning, April 25, Ms. Reding unlocked the room and instructed Ms. Lyons and Eric, from the moving company, to search the room as a team. She instructed paralegal Lyons to collect all documents, as it was not their job to differentiate. She did not remain in the room, but returned downstairs to supervise search, collection and inventory activities in the rest of the dealership. When informed the bedroom search was completed, she locked the room. She opened the room one last time, as the team was departing, with Tom Gruislak to ensure it was in order. She might have stepped in to straighten the bedspread. She did not personally supervise the private room search as she had no prior information that a large amount of cash was kept there. Further, she trusted Ms. Lyons, whom she had hired for the firm and was busy with the job of cataloging and removing more than 450 boxes of documents from the rest of the dealership. Additional challenges were posed by tensions with Ms. Cunningham and a bomb threat on the dealership, which required a complete evacuation and search of the premises by the Navajo Tribal Police. She denies testimony of Ms. Cunningham that she returned alone to the private room several times.
The creditor team searched all desks and cabinets. Ms. Reding first introduced herself to debtor's employees on Friday morning, made the court's search order available and allowed employees to remove their personal records and property in boxes, after the boxes were searched. At the time, she was unaware plaintiff's personal papers had been removed from his private room and packed. She would have provided plaintiff the same opportunity to remove his personal property and cash, had he chosen to be present during the search. Reding test. The court finds this testimony credible.
19. She returned to Phoenix and assembled the records at her law firm. Id., Gaffney test. Access to the records was provided to other parties. Ultimately, they were removed by the Arizona Department of Revenue.
The two new locksmith keys were given to Ms. Cunningham by defendant as the team departed. Defendant denies Ms. Cunningham's testimony that she refused the keys and defendant instead placed them on plaintiff's downstairs desk. Had Ms. Cunningham refused the keys, defendant would have taken them with her to Phoenix. Because of her prior experience with large-scale record retrieval, defendant insisted that all searches at the dealership were conducted in teams, to avoid charges of theft or damage.
Ms. Cunningham's testimony that she refused to accept the keys to plaintiff's room is difficult to credit, given her previous actions to protect the room's privacy, even without instructions or authorization from plaintiff: She called debtor's attorney Collins to object to the proposed unlocking of the room by a locksmith, she requested to be present during the room's search, she requested to look inside a box containing material removed from the room, she wrote an April 25, 1998 letter to the court complaining, inter alia, of the search of the room and she called plaintiff's brother Marvin on Saturday in an attempt to alert plaintiff to the room's search. Test. of Feb. 12; Ex. 3, at 1-2. Strangely, although protective of the room, she did not check to verify the door was locked on Saturday after the search team left and she was locking the dealership. Strangest of all, she never thought to alert defendant Reding that plaintiff kept cash in his room. Test.
When she discovered the locked room, she notified attorney Gaffney. He subsequently advised her that the bankruptcy court had authorized entry into the locked room and he had arranged for a locksmith. Reding cross-exam.; Gaffney direct test.
20. At a hearing the following Monday, April 27, 1998, the court sua sponte reported an emergency ex parte contact with attorney Gaffney, which resulted in the court's verbal authorization to enter the locked room. Mins. of Apr. 27, 1998; Apr. 27, 1998 tr. at 3, 6-8, 11-12, 15; Dk 79; Gaffney test.
21. When plaintiff returned to work Monday morning, he immediately went to his room with Newell Knight. He testified he found the room unlocked and in a disheveled condition. His $29,000 was missing, he claims.
22. Ms. Cunningham does not know whether anyone actually took plaintiff's cash. She does not know why plaintiff would keep nearly $30,000 in cash in his room when his bank was less than a mile away. Cross-exam. Plaintiff Hatch does not know who took his $29,000. Test. of Feb. 13. He denies stating to investigating Tuba City police officers that he was principally making a theft report so he could make a $29,000 insurance claim. Test., but cf. Ex. 10, at 2.
23. On July 20, 1999, defendants Snell Wilmer, L.L.C., Reding, GMAC and GM removed to United States Bankruptcy Court plaintiff's lawsuit TC-CV-094-99 previously filed in the Navajo Judicial District Court. Adversary Dk 1.
24. On November 17, 1999, the court conducted oral argument on plaintiff's motion to remand the proceeding to the tribal court. Mins. of Nov. 17, 1999, adversary Dk 27; hearing Tr., Dk 28. While refusing to rule that the tribal court would lack jurisdiction over this suit by a non-Indian against other non-Indians, the court nevertheless denied the remand request. Tr. of Nov. 17, 1999, at 2-8. The court concluded it had jurisdiction to determine whether, as plaintiff charged, defendants exceeded or abused either the court's order or the access the court granted to enter private property for a search. The court found an overriding interest in determining whether its orders were violated or exceeded. Tr. at 7. The court also found it had the necessary factual background, through the pending bankruptcy case, to handle this factually complex matter. Finally, the court concluded tribal courts would not have a superior interest in resolving the litigation, as no tribal members or tribal operations were implicated. Id. at 7-8.
25. At a May 18, 2000 oral argument on cross-motions for summary judgment, the court concluded its order of April 23, 1998 conferred quasi-judicial immunity on the remaining defendants. Tr. of May 18, 2000, at 18, Dk 53. However, the court reserved for trial factual issues (1) whether this immunity should be limited due to the possible negligence of Ms. Reding in conducting the search, specifically, in her absence from the of the search of personal items and clothing in the room limited defendants' immunity. Id. at 18-19.
26. The court finds that the actions of defendant Reding in supervising the dealership search, collection, inventorying of over 450 boxes of over 20 years of records under time constraints and a hostile environment, including a bomb threat was not negligent. Accordingly, defendants are not deprived of quasi-judicial immunity. The court further finds defendant's absence from the private room during the search, given the multiple demands on her time, does not defeat immunity. Further, the court finds that the obtrusiveness of the search of the private room, including searching closed drawers and articles of clothing, does not eliminate immunity, given the clear instructions to retrieve all documents and the prior allegations of removal of bankruptcy estate property by debtor's officers, including plaintiff.
Finally, on the underlying alleged theft, the court finds that while plaintiff established a prior practice of making unreported and undocumented loans through cash and checks to debtor, plaintiff did not credibly establish that cash amounting to $29,000 was in existence in his room, but forgotten by him, when he departed the dealership on April 23, 1998.
27. To the extent any of the following conclusions of law should be considered findings of fact, they are hereby incorporated by reference.
CONCLUSIONS OF LAW
1. To the extent any of the above findings of fact should be considered conclusions of law, they are hereby incorporated by reference.
2. Pursuant to 28 U.S.C. § 1334(a), jurisdiction of this bankruptcy case is vested in the United States District Court for the District of Arizona. That court has referred, under 28 U.S.C. § 157(a), all cases under Title 11 and all adversary proceedings arising under Title 11 or related to a bankruptcy case to this court. (Amended General Order, May 20, 1985). This proceeding having been appropriately referred, this court has jurisdiction to enter a final order determining whether defendants are entitled to immunity for their actions in executing the order of April 23, 1998.
3. Jurisdiction of the bankruptcy court is based on the distinction between core and non-core matters. Core matters are those arising under Title 11 of the United States Code or arising in a case filed under Title 11. The term "arising inn refers to administrative matters that are based not on any right expressly created by Title 11, but would nonetheless have no existence outside of bankruptcy. "Arising under" denotes a cause of action created or determined by a provision in Title 11. Aheong v. Mellon Mortgage Co. (In re Aheong), 276 B.R. 233, 243 (9th Cir. Bankr. 2002); Bethlahmy v. Kuhlman (In re ACI-HDT Supply Co.), 205 B.R. 231, 234-35 (9th Cir. Bankr. 1997). Execution of a court order to preserve and protect bankruptcy estate property and records is a core proceeding.
4. The interpretation or enforcement of an order resulting from a core proceeding is itself a core proceeding. Williams v. Citifinancial Mortgage Co. (In re Williams), 256 B.R. 885, 892 (8th Cir. Bankr. 2001); In re Kewanee Boiler Corp., 270 B.R. 912, 917 (Bankr. N.D. Ill. 2002) (citing cases). The court concludes this is a core proceeding. A final order will therefore be issued. See 28 U.S.C. § 157(b) (1).
5. Conclusions of law are reviewed de novo. Factual findings are reviewed for clear error. American Law Center PC v. Stanley (In re Jastrem), 253 F.3d 438, 441 (9th Cir. 2001).
6. Ex parte proceedings are appropriate only in a narrow set of circumstances. United States v. Real Property Located at 22 Santa Barbara Drive, 264 F.3d 860, 870 (9th Cir. 2001). Opportunities for legitimate ex parte applications are extremely limited. One such opportunity is where there is genuine urgency, such that immediate and irreparable injury, loss or damage will occur before the adverse party can be heard in opposition.Gumport v. China International Trust and Investment Corp. (In re Intermagnetics America, Inc.), 101 B.R. 191, 193 (C.D. Ca. 1989).
In this case, two ex parte contacts occurred. The first was a contact to arrange an emergency hearing to consider creditor's application for the order of April 23. The hearing itself was not ex parte. The context of the contact was explained at the April 23 hearing. The second contact was to obtain verbal authorization to enter the recently discovered locked room. The circumstances were subsequently discussed on the record at the April 27 hearing, which again was not held ex parte. The court reaffirms its earlier conclusion that these contacts were permissible, given the special circumstances of this case.
7. Defendants' cross-motion for summary judgment established a prima facie case for quasi-judicial immunity. To rebut this case and prevail on the elements remaining in his complaint, plaintiff had to establish a case of negligence, either directly or through the circumstantial evidence theory of res ipsa loquitur. The burden of proof for all negligence actions, except medical malpractice, is a preponderance of the evidence. Harvest v. Craig, 195 Ariz. 521, 990 P.2d 1080, 1082 (Ariz.App. 1999). The court concludes plaintiff failed to meet this burden.
ORDER
1. The court finds for all defendants and against plaintiff. Plaintiff's complaint and cause of action will be dismissed, with prejudice.
2. Defendants' cross-motion for summary judgment is granted. Defendants' speaking motion for judgment on partial findings is denied as moot.
3. Defendants will serve and lodge a proposed judgment within five days of the date of this order. Plaintiff will have five days from service to object to its form.
ORDERED ACCORDINGLY.