862 F.3d 740 (9th Cir. 2014), 12-15618, Burton v. Infinity Capital Management
|Citation:||862 F.3d 740|
|Opinion Judge:||Sidney R. Thomas, Chief Judge|
|Party Name:||FREDDY JOE BURTON; JAN PAUL KOCH, Plaintiffs-Appellees, v. INFINITY CAPITAL MANAGEMENT; ANNE PANTELAS; SALVATORE C. GUGINO, Defendants-Appellants, and RONALD J. ISRAEL, Defendant|
|Attorney:||Kenneth R. Lund (argued) and Brian K. Terry, Thorndal Armstrong Delk Balkenbush & Eisinger, Las Vegas, Nevada, for Defendant-Appellant Salvatore C. Gugino. Daniel R. McNutt (argued), Carbajal & McNutt LLP, Las Vegas, Nevada, for Defendants-Appellants Infinity Capital Management and Anne Pantelas....|
|Judge Panel:||Before: Sidney R. Thomas, Chief Judge, Ronald Lee Gilman[*], and Johnnie B. Rawlinson, Circuit Judges.|
|Case Date:||June 04, 2014|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Argued and Submitted, San Francisco, California, November 7, 2013.
Amended July 10, 2017
Appeal from the United States District Court for the District of Nevada. D.C. No. 2:11-cv-01129-RCJ-PAL. Robert Clive Jones, Chief District Judge, Presiding.
The panel filed an amended opinion, affirming the district court's denial of a defendant's motion for summary judgment and holding that an attorney was not entitled to absolute quasi-judicial immunity on a claim of violation of the automatic stay provision of the Bankruptcy Code.
Kenneth R. Lund (argued) and Brian K. Terry, Thorndal Armstrong Delk Balkenbush & Eisinger, Las Vegas, Nevada, for Defendant-Appellant Salvatore C. Gugino.
Daniel R. McNutt (argued), Carbajal & McNutt LLP, Las Vegas, Nevada, for Defendants-Appellants Infinity Capital Management and Anne Pantelas.
Jan Paul Koch (argued), Law Office of Jan Paul Koch, Las Vegas, Nevada; Robert J. Kossack, Kossack Law Offices, Las Vegas, Nevada, for Plaintiffs-Appellees Freddy Joe Burton and Jan Paul Koch.
Before: Sidney R. Thomas, Chief Judge, Ronald Lee Gilman[*], and Johnnie B. Rawlinson, Circuit Judges.
Sidney R. Thomas, Chief Judge
This case requires us to decide whether an attorney sued for violation of a bankruptcy automatic stay is entitled to absolute quasi-judicial immunity. Under the circumstances presented by this case, we hold that he is not. We affirm the judgment of the district court, albeit on different grounds.
Freddy Joe Burton (" Burton" ) was injured in a bicycle-automobile collision. He incurred $271,101.87 in related medical expenses and loans and retained Jan Paul Koch (" Koch" ) to file a lawsuit on his behalf. Burton granted certain creditors, including Valley Hospital Medical Center, liens on his personal injury claim. Valley Hospital then sold its account receivable to Infinity Capital Management (" Infinity" ), the president of which is Anne Pantelas (" Pantelas" ). Koch settled Burton's personal injury claim for $185,000.
Koch placed the settlement funds in his client trust fund account and paid himself his attorney fee and costs. Koch then recommended that Burton declare bankruptcy and hire bankruptcy attorney David Crosby. After paying a retainer fee to Crosby and receiving his personal injury settlement exemption, Burton had $104,088.10 left of his settlement in the trust fund account.
That same month, Nancy Alf, who represented Infinity at the time, told Koch that a state interpleader action would resolve the interests of the lien holders more quickly than the bankruptcy court. Infinity filed an interpleader lawsuit in state court against all other similarly situated lien holders making a claim upon Burton's settlement. Neither Burton nor Koch was named as a party in the state interpleader case. The Honorable Ronald Israel was assigned to the case. Salvatore Gugino was substituted for Alf as Infinity's attorney of record.
Crosby filed Burton's bankruptcy petition in bankruptcy court. Four days later, Judge Israel held a status hearing on the state interpleader case, and Koch attended that hearing at Judge Israel's request. At the hearing, Gugino appeared for Infinity, and Steven Baker appeared for one of the defendants in the case. Judge Israel questioned Koch as to why he had not interpled all of the funds that Burton had received for his settlement to the court clerk as required by Michel v. Eighth Judicial District Court ex rel. Cnty. of Clark, 117 Nev. 145, 17 P.3d 1003 (Nev. 2001). Koch informed Judge Israel that Burton had filed for bankruptcy and that Koch would be depositing the remaining settlement funds with the bankruptcy clerk. Those present at the hearing were confused about the proper course to take given the bankruptcy proceeding and the fact that Burton was neither a plaintiff nor a defendant in interpleader. Both Gugino and Baker voiced concern about the interpleader case moving forward in light of the bankruptcy. Judge Israel ordered the parties to appear approximately two months later for a status hearing regarding the state of the bankruptcy proceeding.
Three days before the status hearing, Gugino sent all parties to the interpleader case and Koch a letter with a copy of the minutes from the prior hearing and an update on the bankruptcy case, including both an explanation of his initial attempt to resolve the interpleader issue with the trustee and confirmation that Koch had deposited the settlement funds with the trustee.
Koch did not appear at the status hearing. At the hearing, Gugino handed a copy of his letter to Judge Israel, and he informed the court that Koch had deposited the settlement funds with the bankruptcy trustee. Judge Israel responded, " I ordered Mr. Koch to place all the funds in here. . . . I'm going to issue an order to show cause. I want Mr. Koch to appear and show -- tell us why he didn't deposit his attorney's fees into -- pursuant to Michel. . . . I want him to personally appear and tell why he hasn't; otherwise, I'll hold him in contempt." Neither Gugino nor Baker voiced any opposition to Judge Israel in light of the bankruptcy. In...
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