In re ORANGE COAST REAL ESTATE INVESTMENTS, INC., Debtor.
RICHARD K. DIAMOND, Trustee, Plaintiff(s),
v.
DORA LAND, Defendant(s).
No. 2:13-bk-19479-RK
Adv No. 2:14-ap-01113-RK
United States Bankruptcy Court, Central District of California, Los Angeles Division
May 5, 2014
ORDER GRANTING IN PART DEFENDANT'S MOTION (1) FOR A MORE DEFINITE STATEMENT; (2) TO STRIKE; AND (3) TO DISMISS, VACATING HEARING, AND CONTINUING STATUS CONFERENCE
Robert Kwan, United States Bankruptcy Judge
Pending before the court is the motion of defendant Dora Land (1) for a more definite statement, (2) to strike, and (3) to dismiss the adversary complaint of the Chapter 7 trustee, which is now set for hearing on May 6, 2014. Having reviewed and considered the moving and opposing papers, pursuant to Local Bankruptcy Rule 9013-1 G)(3), the court dispenses with oral argument, takes the motion under submission, vacates tine hearing on May 6, 2014 and rules on the motion as follows:
1. Pursuant to
Fed.R.Civ.P. 12(e), the court determines that defendant's motion for a more definite statement should be granted in order to enforce the requirement of
Fed.R.Civ.P. 8 and
10(b) that the pleadings should be "clear and concise" and that each claim founded on a separate transaction should be stated as a separate count. Trustee's complaint "mushes" (i.e., improperly combines) the two alleged transactions or transfers together rather than pleading separate causes of action, making it difficult for defendant to respond to the complaint. Therefore, the motion for more definite statement is granted, and leave is granted to Trustee to serve and file an amended complaint within 14 days of entry of this order. Defendant may respond to the amended complaint within the time period permitted by
Fed.R.Bankr.P. 7012(a) (i.e., within 14 days after service of a more definite statement).
2. Leave to amend the complaint will afford Trustee an opportunity to remedy his violation of Local Bankruptcy Rule 7008-1 in the complaint, which requires that Trustee as plaintiff plainly state in the first numbered paragraph of the document the statements required by
Fed.R.Bankr.P. 7008(a) and
7012(b). Making this correction will obviate the need for defendant's motion to strike in part. The court expects Trustee to comply with the Local Bankruptcy Rules, including Rule 7008-1, and his continued failure to comply with Rule 7008-1 may result in granting a renewed motion to strike and/or imposition of sanctions.
3. Because the court grants defendant's motion for more definite statement, the court determines that it is unnecessary to rule upon the alternative motions to strike and/or dismiss at this time.
4. Although the court does not reach the merits of defendant's motion to dismiss at this time, the court makes preliminary comments regarding the issues raised by such motion which may be renewed in response to the amended complaint. The court notes that the case law is divided as to whether the running of the state statute of limitations after the commencement of the case will or will not deprive the trustee of a claim under
11 U.S.C. § 544(b) as long as the trustee brings the claim within the period prescribed by
11 U.S.C. § 546(a).
Compare In re McGoldrick, 117 B.R. 554 (Bankr. CD. Cal. 1990)
with Salven v. Mendez, 2008 Bankr. LEXIS 653 (Bankr. E.D. Cal. 2008). The court is skeptical of Trustee's assertion that he has standing to assert a cause of action for conspiracy here.
In re Viola, 469 B.R. 1, 7-9 (9th Cir. BAP 2012);
In re Hamilton Taft & Co., 176 B.R. 895, 902 (Bankr. N.D. Cal. 1995). The court is also skeptical that a conspiracy claim may be based on
11 U.S.C. § 105(a).
See Law v. Siegal, 134 S.Ct. 1188, 1194-1198 (2014). The court has no comments at this time regarding the issues raised by Trustee's prayers for punitive damages and provisional relief.
5. The court notes that plaintiff by counsel filed and served his opposition late in violation of Local Bankruptcy Rule 9013-1 (f), which requires that an opposition to a motion be filed at least 14 days in advance of the date designated for the hearing and that such late filing and service are without prior leave of court or are not otherwise excused. While the late filing and service of papers may be deemed by the court to be consent to the granting of the motion, the court exercises its discretion not to impose such a drastic terminating sanction at this time. Instead, the court admonishes Trustee and his counsel that their papers must be served and filed on time and in compliance with the court's rules and that further transgressions of this and other rules may subject them to the imposition of sanctions.
6. The hearing on defendant's motion (1) for a more definite statement, (2) to strike, and (3) to dismiss, and the continued status conference set for May 6, 2014 at 3:00 p.m. is hereby vacated, and no appearances are required on that date and at that time.
7. The court sets a further status conference in this adversary proceeding for June 17, 2014 at 1:30 p.m., and the parties are ordered to comply with Local Bankruptcy Rule 7016-1, including the preparation and filing of a joint status report, which must be filed on or before June 10, 2014.
IT IS SO ORDERED.