IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
JOHN S. EVERDING, No. 92-12027
Memorandum of Decision
Claimant Craig Campbell is a medical doctor who treated the debtor in relation to personal
injuries suffered before the debtor filed his Chapter 7 petition. After the filing, the trustee
compromised the debtor's lawsuit for the injuries and now holds about $7,000.00. The
remainder of the $45,000.00 settlement was paid to the attorney who handled the case and to
the debtor on account of his claim of exemption.
Campbell claims he is entitled to a lien on the proceeds for the full amount of his services,
$5,141.00. The trustee, who evidently learned of this and other lien claims only after he had
agreed to turn over most of the settlement proceeds to the debtor and his counsel, takes the
position that Campbell is entitled only to a proration of his claim. The trustee has tendered
$3,429.07, which Campbell has refused. Thus, the amount in dispute here is about $1,700.00.
On June 15, 1995, Campbell's motion for relief from the stay came before the court.
Campbell sought leave to bring an action to enforce his lien. The court granted the motion, so
long as the suit was commenced in this court.
When Campbell filed his motion for relief from the automatic stay, he also filed a motion
to compel the trustee to abandon the proceeds of the settlement. The motion was noticed to be
heard on June 30, 1995, and came before the court on that date. A full 28 days notice of the
hearing was given to the trustee and all creditors.
When the court prepared for the June 30 calendar, it found no opposition to the motion filed
by any party and therefore did not review the motion in detail. The trustee's law firm, which
has been practicing in this court for over 30 years, appeared and announced for the first time
that the trustee opposed the motion. Counsel admitted that no written opposition had been
filed, notwithstanding Local Rule 7-914(c)(1) which requires, when 28 days notice of a hearing
are given, that any opposition be filed at least 14 days before the hearing.
Because counsel for the trustee was experienced and should have known better, and because
there was only a small amount of money at issue, the court treated the motion as unopposed and
granted it. The trustee's motion for reconsideration is now before the court.
The present motion is based on a false statement. Counsel for the trustee says that he did
not file opposition to the abandonment motion because at the June 15 hearing the abandonment
motion "was discussed and summarily disposed of wherein the Court ruled that it would grant
relief from the stay but it would not order abandonment of the lien proceeds." The court has
listened to the tape (which was available to counsel for a nominal fee) of the June 15 hearing.
The court made no ruling at all as to the abandonment motion, which was discussed only once,
by Campbell's counsel, only to state that it had been filed.
The court does not like to dispose of disputes on procedural grounds instead of the merits.
However, in this case counsel for the trustee is very experienced and should have known better
than to ignore the local rule requiring a written objection to the motion. By so doing, he caused
Campbell to incur additional attorney's fees and inconvenienced the court. Since the amount
in dispute was not large, the court chose to treat the motion as unopposed rather than hold
further hearings to fix the amount of sanctions. The court still feels that this was appropriate
under the circumstances. The motion for reconsideration will accordingly be denied.
Because the basis for the motion for reconsideration was not true, in that the court had done
nothing on June 15 which could have been construed as a "summary disposition" of the
abandonment motion, the court orders counsel for the trustee to pay to Campbell the additional
sum of $350.00 pursuant to FRBP 9011.
Counsel for Campbell shall submit an appropriate form of order.
Dated: August 29, 1995 _______________________