31 F.3d 1447 (9th Cir. 1994), 92-15947, In re Eisen

Docket Nº:92-15947, 92-15948.
Citation:31 F.3d 1447
Party Name:In re William EISEN, Debtor. Richard MONEYMAKER, Appellant, v. Melvyn J. CoBEN, Appellee.
Case Date:August 09, 1994
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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31 F.3d 1447 (9th Cir. 1994)

In re William EISEN, Debtor.

Richard MONEYMAKER, Appellant,

v.

Melvyn J. CoBEN, Appellee.

Nos. 92-15947, 92-15948.

United States Court of Appeals, Ninth Circuit

August 9, 1994

Argued and Submitted Oct. 4, 1993.

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[Copyrighted Material Omitted]

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William Eisen, in pro. per.

Vincent J. Quigg, Los Angeles, CA, for appellant.

Cindy Lee Hill, Sacramento, CA, for appellee.

Appeal from the Ninth Circuit Bankruptcy Appellate Panel.

Before: HUG, FARRIS, and BRUNETTI, Circuit Judges.

BRUNETTI, Circuit Judge:

In this appeal, we must decide whether the bankruptcy court properly dismissed this case for failure to prosecute under Fed.R.Civ.P. 41(b). We have jurisdiction under 28 U.S.C. Sec. 1293(a). Because we find dismissal warranted in this case, we affirm the decision of the Bankruptcy Appellate Panel, which affirmed the bankruptcy court's dismissal of the action.

I. FACTS AND PRIOR PROCEEDINGS

On February 18, 1982, an involuntary petition in bankruptcy under Chapter 11 was filed on behalf of Golden Plan of California, Inc. and its related entities ("Golden"). Appellee Melvyn CoBen ("CoBen") is the trustee of the Golden bankruptcy estate. Numerous deeds of trust were included in the estate's assets, including several against the properties which are the subject of the instant appeal. In or around 1984, Golden began foreclosure proceedings against those properties.

On September 12, 1984, William Eisen ("Eisen") filed a Chapter 11 petition in bankruptcy. On December 18, 1984, this Chapter 11 petition was converted to a Chapter 7, and Appellant Richard Moneymaker ("Moneymaker") became the trustee of the Eisen bankruptcy estate.

On December 20, 1985, CoBen filed an adversary proceeding against Eisen in Golden's bankruptcy case seeking a declaration that Golden was the owner of the subject deeds of trust and properties and that Golden's bankruptcy was the proper forum for determining its interest. CoBen, as trustee, also sought turnover of the subject properties and an order finding defendant Eisen in

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contempt for violating the automatic stay imposed in Golden's bankruptcy case. 1

In or about March 1986, Moneymaker filed three adversary proceedings in Golden's bankruptcy case against Golden and other beneficiaries, asserting an interest in certain properties and assets of the Golden estate. These three adversary proceedings, which are the subject of the instant appeal, are the cases dismissed by the bankruptcy court for failure to prosecute. Through these actions, Moneymaker sought to avoid or rescind certain real estate transactions that resulted in liens in favor of Golden on property in which the Eisen estate claimed an interest.

Moneymaker filed these actions in the Bankruptcy Court for the Central District of California. Upon CoBen's motion, the court transferred the venue to the Eastern District of California where Golden's bankruptcy was pending. The Eastern District received the files for Moneymaker's actions on December 15, 1986. Moneymaker filed a notice for leave to appeal the venue change, which the court denied on or about July 2, 1986. This is the only action Moneymaker took with the court until after CoBen filed his first motion to dismiss over four years later.

On August 31, 1990, CoBen filed a motion to dismiss one of Moneymaker's actions for failure to prosecute. CoBen alleged that Moneymaker had done nothing to prosecute that action for four years and that the pendency of the action prevented him from selling the property involved and from completing the Golden bankruptcy.

In opposition to the motion to dismiss, Moneymaker asserted that he had taken action to prosecute and that the parties were contemplating settlement, as evidenced by letters from April and June 1990. Further, Moneymaker alleged that CoBen had failed to prosecute his own adversary proceedings in Golden's bankruptcy, involving some of the same properties as the Moneymaker actions. Moneymaker also claimed that the cost of litigation in Sacramento, due to the change of venue, and the fact that his attorney retained the case on a contingency basis hindered prosecution. Finally, Moneymaker argued that the court should not dismiss since CoBen had failed to show actual prejudice and since the court had not warned Moneymaker of the possibility of dismissal.

On September 21, 1990, Moneymaker filed motions to set trial dates for all three of his actions. CoBen responded with oppositions and counter-motions to dismiss for failure to prosecute the two remaining Moneymaker actions. After a hearing on September 25, 1990, the bankruptcy court dismissed the first Moneymaker action, finding that the plaintiff's failure to act for four years was egregious and too long for the prosecution to remain dormant. At the hearing, the court did not discuss alternative sanctions to dismissal or other factors it might have considered in ordering dismissal; however, in the subsequent order of dismissal, the court asserted its reasons for dismissal and its belief that monetary or lesser sanctions would not compensate Golden. On October 23, 1990, the court dismissed the two remaining Moneymaker actions and denied Moneymaker's motions to set trial dates. The court gave the same reasons for dismissal.

Moneymaker filed motions for reconsideration of the orders of dismissal in all three actions. The court denied these motions, finding that a notice of intent to dismiss was not required before dismissing Moneymaker's actions and that with a four-year delay prejudice to the defendant could be presumed. Further, the court expressed concern that Golden's bankruptcy had been pending for almost nine years.

Moneymaker appealed to the Bankruptcy Appellate Panel ("BAP") which affirmed the orders granting dismissal of the actions. The BAP discussed the factors that we have established for reviewing dismissals for failure to prosecute and held that the bankruptcy court had not abused its discretion, since "[t]he four-year delay in the prosecution

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of [the Moneymaker actions] simply cannot be excused." Subsequently, Moneymaker and Eisen, the debtor, filed this appeal. 2

II. DISCUSSION

Under Rule 41(b), a defendant may move for dismissal of an action for failure of the plaintiff to prosecute. Fed.R.Civ.P. 41(b). We review a district court's dismissal of an action for lack of prosecution for an abuse of discretion. Morris v. Morgan Stanley & Co., 942 F.2d 648, 650 (9th Cir.1991); Carey v. King, 856 F.2d 1439, 1440 (9th Cir.1988) (per curiam). We have stated that "[a] rule of thumb as to the meaning of the abuse of discretion standard provides that the trial court's exercise of discretion should not be disturbed unless there is 'a definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors.' " Nealey v. Transportacion Maritima Mexicana, S.A., 662 F.2d 1275, 1278 (9th Cir.1980) (quoting Anderson v. Air West, Inc., 542 F.2d 522, 524 (9th Cir.1976)).

We require the district court to weigh five factors to determine whether to dismiss a case for lack of prosecution: (1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to the defendants; (4) the public policy favoring the disposition of cases on their merits; and (5) the availability of less drastic sanctions. Henderson v. Duncan, 779 F.2d 1421, 1423 (9th Cir.1986) (citing Ash v. Cvetkov, 739 F.2d 493, 496 (9th Cir.1984), cert. denied, 470 U.S. 1007, 105 S.Ct. 1368, 84 L.Ed.2d 387 (1985)). Although beneficial to the reviewing court, a district court is not required to make specific findings on each of the essential factors. Henderson, 779 F.2d at 1424. If a district court does not make explicit findings, we "review the record independently to determine whether the court abused its discretion." Id.; Ash, 739 F.2d at 496.

In this case, the bankruptcy court discussed the factors in its order dismissing the actions. We will address each factor.

  1. Expeditious resolution of litigation

    In dismissing a case for lack of prosecution, the court must find unreasonable delay. Henderson, 779 F.2d at 1423. A reviewing court will give deference to the district court to decide what is unreasonable "because it is in the best position to determine what period of delay can be endured before its docket becomes unmanageable." Id. (citing Ash, 739 F.2d at 496).

    In this matter, the bankruptcy court found that Moneymaker had taken no action to prosecute in four years and that this delay was "inherently unreasonable." According to the court, Moneymaker excused the delay based on insufficient funds to proceed with discovery and the fact that his attorney was on a contingency basis and thus was "unable or unwilling to advance the costs of such discovery." The court held that these excuses

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    did not explain why the actions were not brought to trial. Moneymaker "made no effort to provide a reasonable explanation for [the] delay; therefore, the delay is completely unexcused."

    The four-year delay in this case is clearly unreasonable. In In re Osinga, 91 B.R. 893 (9th Cir. BAP 1988), the BAP found that a twenty-nine month delay was unreasonable and justified the bankruptcy court's sua sponte dismissal of a case because of the length of time, the importance in resolving bankruptcy matters, and the need to define the debtor's interests. In the instant matter, Moneymaker took no action for four years, which interfered with the expeditious resolution of bankruptcy matters and hindered the bankruptcy court's ability to manage its caseload. In addition, financial...

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