Rubin v. Ross

• Decision Date: 04 June 2021
• Docket Number: E074210
• Court: California Court of Appeals Court of Appeals
• Parties: Jason RUBIN, as Trustee, etc. et al., Plaintiffs and Respondents, v. David ROSS, Defendant and Appellant.

65 Cal.App.5th 153

279 Cal.Rptr.3d 385

Jason RUBIN, as Trustee, etc. et al., Plaintiffs and Respondents,

v.David ROSS, Defendant and Appellant.

E074210

Court of Appeal, Fourth District, Division 2, California.

Filed June 4, 2021

Law Offices of Michael L. Tusken and Michael L. Tusken for Defendant and Appellant.

Hemar, Rousso & Heald and J. Alexandra Rhim for Plaintiffs and Respondents.

OPINION

FIELDS, J.

I. INTRODUCTION

In 2007, plaintiffs and respondents Jason Rubin and Cira Ross, as cotrustees of the Cira Ross Qualified Domestic Trust (judgment creditors) obtained a civil judgment against defendant and appellant David Ross (judgment debtor). On January 13, 2009, judgment debtor filed for voluntary bankruptcy under chapter 7 of the United States Bankruptcy Code. ( 11 U.S.C. § 701 et seq. )¹ In April 2019, following an order denying judgment debtor a discharge in bankruptcy, judgment creditors filed for renewal of their judgment pursuant to Code of Civil Procedure sections 683.120 and 683.130.

Judgment debtor moved to vacate the judgment on the ground that judgment creditors failed to seek renewal within the 10-year time period proscribed in Code of Civil Procedure section 683.130. The trial court denied the motion, concluding that judgment creditor's renewal was timely because title 11 United States Code section 108(c) provided for an extension of time within which to seek renewal.

Judgment debtor appeals, arguing that judgment creditors were not precluded from seeking renewal by his bankruptcy proceeding and, therefore, section 108(c)² does not apply to provide an extension of time to seek renewal of their judgment. We agree that judgment creditors were not barred from seeking statutory renewal of their judgment during the pendency of judgment debtor's bankruptcy proceeding but conclude that the extension provided for in section 108(c) applies regardless, and we affirm the order.

II. FACTS AND PROCEDURAL HISTORY

On February 22, 2007, judgment creditors obtained a judgment against judgment debtor in a civil action. The judgment was subsequently amended on March 11 and October 9, 2008.

On January 13, 2009, judgment debtor filed for voluntary bankruptcy under chapter 7 of the United States Bankruptcy Code ( 11 U.S.C. § 701 et seq. ) in the United States Bankruptcy Court for the Central District of California (Bankruptcy Court). On March 19, 2019, the Bankruptcy Court granted judgment creditors relief from the bankruptcy stay for the purpose of seeking renewal of their judgment, but it also specified that all other efforts to seek enforcement of the judgment remained stayed. Following a trial, the Bankruptcy Court denied discharge and gave notice of its order on April 1, 2019.

On April 11, 2019, judgment creditors filed an application for renewal of their judgment in the superior court, and notice of renewal of the judgment was issued and filed that same date.

On June 11, 2019, judgment debtor filed a motion to vacate the renewed judgment on the ground that judgment creditors failed to seek renewal within the 10-year time period proscribed in Code of Civil Procedure section 683.130. On September 25, 2019, after a careful review of all of the issues before it, the trial court denied the motion, concluding that pursuant to title 11 United States Code section 108(c), judgment creditors had until 30 days after the expiration of any bankruptcy stay to seek renewal of the judgment.

III. DISCUSSION

A. Applicable Legal Principles and Standard of Review

"Code of Civil Procedure [s]ection 683.020, which defines the period for enforceability of judgments, provides after the expiration of 10 years after the date of entry of a money judgment ... the judgment may not be enforced. One way to preserve such a judgment is to file an application for renewal under the terms of Code of Civil Procedure sections 683.120 and 683.130 before the expiration of the 10-year enforceability period. Such application automatically renews the judgment for a period of 10 years." ( Kertesz v. Ostrovsky (2004) 115 Cal.App.4th 369, 372-373, 8 Cal.Rptr.3d 907 ( Kertesz ).)

Pursuant to Code of Civil Procedure section 683.170, subdivision (a), a "renewal of a judgment ... may be vacated on any ground that would be a defense to an action on the judgment." "The judgment debtor bears the burden of proving, by a preponderance of the evidence, that he or she is entitled to relief under [Code of Civil Procedure] section 683.170. [Citations.] On appeal, we examine the evidence in a light most favorable to the order under review and the trial court's ruling for an abuse of discretion." ( Fid. Creditor Serv. v. Browne (2001) 89 Cal.App.4th 195, 199, 106 Cal.Rptr.2d 854 ( Fid. Creditor Serv. ).) Nevertheless, "the abuse of discretion standard does not allow trial courts to apply an incorrect rule of law. [Citation.] Consequently, a trial court's resolution of a question of law is subject to independent (i.e., de novo) review on appeal." ( County of Kern v. T.C.E.F., Inc. (2016) 246 Cal.App.4th 301, 316, 200 Cal.Rptr.3d 714.)

Here, both parties agree the issues presented on this appeal are strictly issues of law and therefore subject to de novo review. The parties do not dispute that judgment creditors submitted their application for renewal of their judgment within 30 days of the expiration of any applicable bankruptcy stay. They only dispute whether statutory renewal was barred by the automatic stay imposed during the pendency of the judgment debtor's bankruptcy action, and whether section 108(c) extends the time within which to seek renewal of the judgment as a result. Thus, we are presented with two issues of law subject to our de novo review: (1) whether an automatic stay pursuant to title 11 United States Code section 362 precludes a party from seeking a statutory renewal of a judgment under Code of Civil Procedure sections 683.120 and 683.130, and (2) whether title 11 United States Code section 108(c) operates to extend³ the time within which a party has to seek renewal of a judgment.

The parties contend there are no California authorities addressing either of these issues, and our independent research has found no published California cases specific to the statutory renewal of judgment process. Instead, the parties cite to competing opinions issued by federal district courts and the bankruptcy appellate panel of the Ninth Circuit.⁴ The case most factually on point appears to be In re Lobherr (Bankr. C.D.Cal. 2002) 282 B.R. 912 ( Lobherr ), in which a bankruptcy court concluded that section 362 preempts California law with respect to statutory renewal of judgments and, as a result, section 108(c) extends the time within which a judgment creditor has to seek renewal.

However, decisions of lower federal courts are not binding on us, even on questions of federal law. ( Barriga v. 99 Cents Only Stores LLC (2020) 51 Cal.App.5th 299, 316, fn. 8, 265 Cal.Rptr.3d 1.) Instead, "lower federal court decisions on federal questions are persuasive authority ...." ( Credit Managers Assn. of California v. Countrywide Home Loans, Inc. (2006) 144 Cal.App.4th 590, 598, 50 Cal.Rptr.3d 259 ; see People ex rel. Lungren v. Comty. Redevelopment Agency (1997) 56 Cal.App.4th 868, 885, fn. 10, 65 Cal.Rptr.2d 786.) Upon consideration of the issues presented, we disagree with the bankruptcy court in Lobherr to the extent it concluded title 11 United States Code section 362 preempts and precludes a party from seeking statutory renewal of a judgment under the Code of Civil Procedure, but we ultimately agree with its conclusion that title 11 United States Code section 108(c) extends the time within which a party has to seek renewal of a judgment. Accordingly, we find no error warranting reversal of the trial court's order denying judgment debtor's motion to vacate.

B. Judgments May Be Renewed During Pendency of a Bankruptcy Stay

The Code of Civil Procedure expressly provides that "[a] judgment may be renewed notwithstanding any stay of enforcement of the judgment, but the renewal of the judgment does not affect the stay of enforcement." ( Code Civ. Proc., § 683.210.) Generally, the filing of a bankruptcy action imposes a stay under title 11 United States Code section 362. " Section 362(a) ‘provides for a broad stay of litigation, lien enforcement and other actions, judicial or otherwise, that are attempts to enforce or to collect prepetition claims. It also stays a wide range of actions that would affect or interfere with property of the estate, property of the debtor or property in the custody of the estate.’ " ( Kertesz, supra , 115 Cal.App.4th at p. 373, 8 Cal.Rptr.3d 907.) "While the scope of the automatic stay is broad, ‘[t]he requisite showing of interference with the [debtor's bankruptcy] estate must be present ... to stay an action....’ " ( Grant v. Clampitt (1997) 56 Cal.App.4th 586, 590, 65 Cal.Rptr.2d 727.) The question we are asked to decide is not whether the stay provisions of section 362 apply to this action generally. We have no doubt that it does. Instead, the question is properly framed as whether the stay imposed by section 362 operates to prohibit the specific act of renewing a judgment as authorized under Code of Civil Procedure section 683.210. We conclude that it does not.

"[T]he supremacy clause vests Congress with the power to preempt state law. ‘Congress may exercise that power by enacting an express preemption provision, or courts may infer preemption under one or more of three implied preemption doctrines: conflict, obstacle, or field preemption.’ " ( People ex rel. Harris v. Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 777, 174 Cal.Rptr.3d 626, 329 P.3d 180.) "Express preemption occurs when Congress defines the extent to which its enactments preempt state law. [Citation.] Conflict preemption is found when it is impossible to comply with both state and federal law simultaneously. [Citation.] Obstacle preemption occurs when state law stands as an obstacle to...