In re CANTER 0156151

Docket Nº:0156151
Party Name:In re CANTER
Case Date:March 07, 2002
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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In re CANTER 0156151

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: DEBORAH M. CANTER, aka D. Maristina Canter, Debtor, ALAN CANTER; CANTER FAMILY TRUST, Creditors-Appellants, v. DEBORAH M. CANTER, aka D. Maristina Canter, Debtor-Appellee, and EDWINA E. DOWELL, Chapter 13 Trustee, Trustee.

No. 01-56151; D.C. No. CV 00-1185-R

OPINION

Appeal from the United States District Court for the Central District of California

Manuel L. Real, District Judge, Presiding

Argued and Submitted March 7, 2002—Pasadena, California

Filed August 15, 2002

Before: Sidney R. Thomas and Johnnie B. Rawlinson, Circuit Judges, and Saundra Brown Armstrong,* District Judge.

*The Honorable Saundra Brown Armstrong, United States District Judge for the Northern District of California, sitting by designation.

Opinion by Judge Rawlinson

COUNSEL

Herbert Katz, Kelly Lytton & Vann LLP, Los Angeles, Cali-fornia, for the creditors-appellants.

Andrew E. Smyth, Smyth Law Office, Los Angeles, Califor-nia, for the debtor-appellee.

OPINION

RAWLINSON, Circuit Judge:

Creditors/Appellants Alan ("Alan") and Elizabeth ("Elizabeth") Canter, and the Canter Family Trust ("Canter Trust") appeal the district court’s sua sponte withdrawal of reference, and its order denying their motion to vacate the stay of the municipal court’s judgment in an unlawful detainer action against Deborah M. Canter ("Deborah").

Because the district court erred when it sua sponte withdrew the reference to the bankruptcy court without showing cause, and improperly enjoined the enforcement of the municipal court judgment, we vacate the withdrawal of reference and stay order, and remand the matter to the bankruptcy court.

BACKGROUND

On September 11, 1991, Alan and Elizabeth Canter purchased 446 S. Highland Avenue, Los Angeles, California ("446 S. Highland") as an investment. Alan’s and Elizabeth’s son, Gary Canter ("Gary"), and Gary’s wife Deborah resided in Alan’s and Elizabeth’s house from September 25, 1991, until February 24, 1999, when Gary and Deborah separated. Since purchasing the property in 1991, Alan and Elizabeth have been the only persons with legal or equitable title to the property. They transferred title to the Canter Family Trust in 1997.

In Gary and Deborah’s divorce proceedings, neither was found to have any ownership interest in the property. When Deborah filed for bankruptcy once in 1992 and twice in 1996, she never claimed an interest in the property, although she listed the property as her residence in both 1996 proceedings. In Deborah’s 1999 bankruptcy, she listed the property under schedule A as property in which she had an interest, but did not claim an exemption for it.

When Gary and Deborah separated, Gary moved out of his parents’ house. Although Gary consistently paid rent to his father during his residency, Alan has not received a rent payment since shortly after Gary moved out. On August 13, 1999, Alan filed an unlawful detainer action against Deborah, seeking her eviction and $5,000 past due rent. The matter was set for trial on October 26, 1999, but the proceedings were stayed when Deborah filed her Chapter 13 bankruptcy petition twenty-four minutes before trial was to begin. On January 26, 2000, the bankruptcy court lifted the stay at the Canter Trust’s request, thereby allowing pursuit of the unlawful detainer action. Alan and Deborah subsequently signed a stipulated judgment providing that Deborah vacate the premises. The municipal court entered a judgment pursuant to the stipulation on February 7, 2000, and ordered that Alan recover possession of the realty from Deborah.

On February 17, 2000, the district court withdrew the reference to the bankruptcy court, and on February 29, 2000, stayed enforcement of the municipal courts judgment. The district court twice denied the Canter Trusts motion to lift the stay. When the Canter Trust inquired why the...

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