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|DO NOT PUBLISH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.
JOSEPH COSIO-BARRON, No. 90-10820
v. A.P. No. 00-1176
JOHN WARNER, et al.,
Memorandum re Remand
Debtor Joseph Cosio-Baron filed a Chapter 7 bankruptcy petition a decade ago. The case was
concluded in 1991. In those proceedings, a nondischargeable judgment was entered against Cosio-Barron in an adversary proceeding brought by William Walters.
In 1999, Walters assigned the uncollected judgment to Andrew Musaelian. He proceeded to
levy against three cars he alleged were owned by Cosio-Barron. After considerable wrangling and while
an appeal was pending, Musaelian and Cosio-Barron reached a settlement which finally resolved the
Shortly after the settlement, plaintiff William Walters re-appeared. He moved the court for an
order revoking his assignment to Musaelian. On July 7, 2000, this court held a hearing in which it ruled
that it would abstain from hearing the dispute between Walters and Musaelian. As the court explained
at the time:
This is not about discharge of debt. This is not about any
estate's right. It's just a private dispute with no public interest
whatsoever. . . . From a jurisdictional standpoint, between Dr.
Walters and Musaelian, I don't have any jurisdiction over that. That
is not in any way, shape or form arising out of or related to the
On July 28, 2000, the court entered its order of abstention. It maintained the status quo for a brief time
while Walters commenced a state court action, and left the door open to future proceedings in this
court only if the state court ruled that Musaelian had exceeded his authority under the assignment when
he agreed to the settlement with Cosio-Barron.
Walters filed his state court suit on July 14, 2000. All of the actions alleged in the complaint
took place nine years after the end of the bankruptcy case. Except for Cosio-Barron himself, none of
the defendants were debtors in bankruptcy. Cosio-Barron's allegedly improper conduct took place ten
years after he filed his petition and nine years after his discharge.
On August 14, 2000, Musaelian and John Warner, attorney for Cosio-Barron, removed the
matter to federal district court on the basis of alleged diversity jurisdiction. When the district court
rejected that argument, Musaelian and Warner attempted to argue bankruptcy jurisdiction. The district
court then transferred the matter to this court.
As the court has repeatedly explained to all parties, there is no bankruptcy jurisdiction over this
dispute. It does not involve the bankruptcy estate. It does not involve the debtor's discharge rights.
Only one of the six defendants has ever even been a debtor in bankruptcy, and his alleged conduct is in
no way protected by his discharge. This is not a case a bankruptcy court may properly hear. In re
, 66 F.3d 1002, 1005 (9th Cir.1995). (1)
Even if the court could hear it, there is no sound basis for it to do so. There is no public interest
in this dispute. It involves only state law. Its relation to the 10-year-old bankruptcy, as disingenuously
argued by Warner, is beyond tenuous. The matter can be timely adjudicated in state court. Abstention
would be mandatory pursuant to 28 U.S.C. § 1334(c)(2).
Even if the court had jurisdiction, and even if abstention was not mandatory, this court would
still abstain pursuant to 28 U.S.C. § 1334(c)(1) for the reasons set forth above.
Given this court's prior rulings and the lame attempt to establish diversity jurisdiction, the
removal was clearly not done in good faith. However, a finding of bad faith is not necessary to justify
an award of attorneys' fees and costs. Moore v. Permanente Medical Group, Inc.
, 981 F.2d 443, 446
Cir. 1992). In this case, it appears entirely appropriate to award Walters his claimed fees and
expenses of $2,642.45. (2)
For the foregoing reasons, the court will remand the matter back to state court, with an an
award of fees and costs in the amount of $2,642.65. A separate order will be entered.
Dated: October 20, 2000 ___________________________
U.S. Bankruptcy Judge
1. In fact, the court may not even have had jurisdiction to enforce its judgment. See "Enforcing
Nondischargeable Money Judgments: The Bankruptcy Courts' Dubious Jurisdiction," 74 Am.Bankr.L.J.
115 (2000). At least, however, that was part of the original dischargeability case and not an
2. The amount claimed is so eminently reasonable that a further hearing regarding the amount is