Freshko Produce Services, Inc. v. A.L.L. Groups, Inc. et al

Filing 23

ORDER signed by Judge Kimberly J. Mueller on 11/16/15 ORDERING that Freshko shall file a status report within 90 days to advise the court of the status of the bankruptcy filings; the 11/12/15 status conference is VACATED,nunc pro tunc, and his action is STAYED pending further order of the court. (Benson, A)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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FRESHKO PRODUCE SERVICES, INC.,
a California corporation,
Plaintiff,

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ORDER
v.

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No. 2:15-cv-00234-KJM-AC

A.L.L Groups, Inc., a California
corporation d/b/a VIC’S DISCOUNT
MARKET and d/b/a VIC’S Market;
ASHWANI KUMAR MAYER, an
individual,
Defendants.

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I.

INTRODUCTION
On October 27, 2015, Freshko Produce Services, Inc. (“Freshko”) notified the

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court of defendant A.L.L. Groups, Inc.’s (“A.L.L.”) bankruptcy filing. ECF No. 19. On October

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29, 2015, Freshko notified the court of defendant Ashwani Kumar Mayer’s bankruptcy filing.

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ECF No. 20. Also on October 29, 2015, Freshko filed a unilateral status report based on the

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court’s minute order dated August 24, 2015, ECF No. 21, filing unilaterally rather than jointly

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because no appearances have been made by A.L.L. and Mayer. Id.

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In light of the bankruptcy filings by A.L.L. and Mayer, Freshko requested the
court vacate the status conference it had set for November 12, 2015.
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II.

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BACKGROUND
Plaintiff filed its complaint alleging violation of the Perishable Agricultural

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Commodities Act (“PACA”), 7 U.S.C. § 499e, et seq., breach of contract, breach of fiduciary

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duty, and unjust enrichment against A.L.L., J&S Partners, Jagjit Singh Saini, Sukhpreet Kaur

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Saini and Mayer on January 27, 2015. ECF No. 1. On January 29, 2015, plaintiff served

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defendants. ECF Nos. 5, 6. On February 18, 2015, plaintiff voluntarily dismissed J&S Partners,

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Jagjit Singh Saini, and Sukhpreet Kaur Saini as defendants. ECF No. 7. On February 27, 2015,

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plaintiff moved for entry of default to be entered against the remaining defendants. ECF No. 8.

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On March 2, 2015, the clerk of the court then entered default against defendants. ECF No. 9. On

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May 7, 2015, plaintiff moved for default judgment. ECF No. 12. On June 29, 2015, the

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magistrate judge recommended that plaintiff’s motion for default judgment be granted. ECF

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No. 16 at 8. On October 29, 2015, plaintiff filed the pending status report. ECF No. 21.

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III.

LEGAL STANDARD

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The filing of a bankruptcy petition under 11 U.S.C. § 301, as here, operates as an

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automatic stay as to all entities of the “commencement or continuation, including the issuance or

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employment process, of a judicial, administrative, or other action or proceeding against the debtor

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that arose before the commencement of the case under this title, or to recover a claim against the

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debtor that arose before the commencement of the case under this title.” 11 U.S.C. § 362(a). The

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policy behind § 362 is to “protect the estate from being depleted by creditors' lawsuits and

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seizures of property . . . to provide the debtor breathing room to reorganize.” In re Palmdale

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Hills Property, LLC., 423 B.R. 655, 663 (9th Cir.2009) (citing In re White, 186 B.R. 700, 704

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(9th Cir.1995)). Although the scope of the automatic stay is broad, it applies only to proceedings

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originally brought against the debtor. In re Miller, 397 F.3d 726, 729–30 (9th Cir.2005).

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While the initiation of a bankruptcy proceeding by a debtor can lead to the

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issuance of an automatic stay, a district court maintains “jurisdiction to determine the

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applicability of the automatic stay.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1106 (9th Cir.

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2005). Specifically, a district court has jurisdiction to decide whether the Bankruptcy Code’s

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automatic stay applies to a proceeding pending before it, over which it would otherwise have

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jurisdiction. 11 U.S.C. § 362.

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IV.

DISCUSSION

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Here, Freshko contends the defendants’ bankruptcy petitions triggered the

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automatic stay set forth in 11 U.S.C. § 362(a). Both bankruptcy filings were filed voluntarily.

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Thus, the filings fall under 11 U.S.C. § 301. The court finds that 11 U.S.C § 362(a) has been

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triggered. The automatic stay is applicable to this action.

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V.

CONCLUSION

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For the reasons stated above, IT IS HEREBY ORDERED THAT:

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(1) Freshko shall file a status report within ninety (90) days of this order to advise
the court of the status of the bankruptcy filings;

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(2) The status conference currently set for November 12, 2015 is VACATED,
nunc pro tunc,

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(3) This action is STAYED pending further order of the court.

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IT IS SO ORDERED.

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DATED: November 16, 2015.

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UNITED STATES DISTRICT JUDGE

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