Brugnara Properties VI. v. Brugnara et al
Filing
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ORDER DENYING LUKE BRUGNARA'S MOTIONS (re 52 55 ). Signed by Judge Alsup. (whalc2, COURT STAFF) (Filed on 10/29/2019)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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In re:
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For the Northern District of California
United States District Court
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BRUGNARA PROPERTIES VI
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No. C 18-02787 WHA
ORDER DENYING LUKE
BRUGNARA’S MOTIONS
Debtor.
/
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In this (now closed) bankruptcy appeal involving debtor Brugnara Properties VI’s
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(“BPVI”) challenge to the bankruptcy court’s conversion of its case from Chapter 11 to a
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Chapter 7 — In re Brugnara Properties VI, No. 17-30501 DM — BPVI’s former president,
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Luke Brugnara, filed an “Emergency Request for Continued Stay of Any Eviction of Brugnara
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Family from Sea Cliff; Request for Rulings on Pending Appeal of Nominee Lien Ruling and
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Motion to Rescind ‘Settlement Agreement’; and Affirmation of Sea Cliff Leasehold” (Dkt. Nos.
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53–55). He further seeks to proceed in forma pauperis, have his notice of appeal and request
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for a stay sent to our court of appeals, and “be placed in custody of the US Marshal at Parumph”
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(Dkt. Nos. 52; 57 at 4–5). All requests are DENIED.
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Prior orders have set forth the background of this case (see, e.g., Case No. 18-2822, Dkt.
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Nos. 55, 68, 75). In short, in May 2018, BPVI filed the instant appeal (as did BPVI’s principal
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and shareholder, Kay Brugnara, in related dismissed appeals) of the conversion of its case to
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Chapter 7. It then immediately sought an emergency stay of the sale of its sole asset, the Sea
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Cliff property, where Kay Brugnara and her family then-resided (Dkt. No. 2). An order dated
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June 7, 2018, granted the request to stay the sale of the property pending a ruling by the
bankruptcy court on the nominee liens (asserted by the IRS and FTB) issue (Dkt. No. 21). On
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July 22, 2019, the bankruptcy court granted the taxing authorities’ motion for summary
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judgment on the nominee liens issue in Brugnara Properties VI v. United States of America,
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Department of Treasury, Internal Revenue Service; State of California, Franchise Tax Board,
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Adversary Proceeding No. 17-03071 (see Dkt. No. 41). The parties subsequently reached a
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settlement and Trustee Janina Hoskins filed a “Motion to Compromise Controversy (Kay
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Brugnara, Brugnara Properties VI)” before the bankruptcy court. On August 19, Trustee
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Hoskins and her counsel Attorney Michael Isaacs, BPVI and its counsel Attorney Ruth
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Auerbach, Kay Brugnara (appearing on behalf of herself, individually), the IRS, and the FTB
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appeared before the bankruptcy court regarding said motion. The following day, the bankruptcy
court granted the motion, which order authorized, inter alia, Trustee Hoskins to pay Kay
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For the Northern District of California
United States District Court
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Brugnara $20,000 (to be used solely for expenses directly related to vacating the property at
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issue) and list the property for sale (id. at 3–4). Pursuant to the settlement agreement, the
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parties stipulated to dismissal of the instant appeal and the appeal before our court of appeals
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(Dkt. No. 50). BPVI also agreed to waive its right to appeal the bankruptcy court’s judgment
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on the nominee liens issue (Dkt. No. 56-1 ¶ 4(g)). An order dated August 21 dismissed the
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instant appeal pursuant to the parties’ stipulated request and vacated the order staying the sale
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of the Seal Cliff property (Dkt. No. 51). On October 6, Kay Brugnara vacated the property
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(Dkt. No. 56-1 ¶ 4(d)).
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Now, Luke Brugnara — Kay Brugnara’s husband and former president of BPVI — filed
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the instant motions, taking issue with the bankruptcy court’s ruling on the nominee liens issue
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and requesting again to stay the sale of the Sea Cliff property (Dkt. No. 53 at 1). He asserts that
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the settlement agreement is invalid because he did not approve it. But Luke Brugnara himself
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states that he has not been president of BPVI since 2014 (ibid.). Rather, Kay Brugnara has been
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president and sole shareholder during the relevant time period (see Dkt. No. 3 ¶ 1). Luke
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Brugnara fails to sufficiently show why his approval of the settlement was required.
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Furthermore, this attempt to appeal the bankruptcy court’s nominee lien ruling is
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procedurally improper. As the Trustee points out, Luke Brugnara has failed to comply with
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Federal Rule of Bankruptcy Procedure 8007 by failing to move before the bankruptcy court first
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in seeking a stay. Nor has he complied with Federal Rule of Bankruptcy Procedure 8009, as
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there is no evidence that he filed with the bankruptcy clerk “a designation of the items to be
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included in the record on appeal and a statement of the issues to be presented.” Fed. R. Bankr.
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P. 8009(a)(1)(A). His pro se status does not negate his procedural obligations.
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The Court has leaned over backwards to protect the Sea Cliff home from premature sale
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and insisted that the nominee liens issue be resolved before any trustee sale, which resolution
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eventually occurred. Kay Brugnara (the current president of BPVI) has now settled the matter.
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There is now absolutely no basis for the Court to interfere further in the proceedings before the
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bankruptcy court.
Luke Brugnara is currently incarcerated. He claims he “should be released from Texas
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For the Northern District of California
United States District Court
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Beaumont prison to the RRC by mid-October” and further claims that “[t]he First Step Act
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Federal Law allows [him] immediate home confinement from the RRC, so [his] US Probation,
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Jennifer James, has already approved Sea Cliff for” him (Dkt. No. 55 at 1). To be clear, Luke
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Brugnara does not have a “[f]ederal legal right[] to occupy Sea Cliff,” as he contends (see Dkt.
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No. 55 at 2). No federal law entitles anyone to live in a multi-million dollar home, as part of
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“home confinement,” to which he does not have title. At bottom, the ultimate relief Luke
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Brugnara seeks is moot, as the Brugnaras have already vacated the property. And, his
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complaints of “BOP Beaumont” (see Dkt. No. 57) in this bankruptcy appeal are misdirected and
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improper. No more motions in the instant appeal (or any related dismissed appeals) will be
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entertained.
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IT IS SO ORDERED.
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Dated: October 29, 2019.
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE
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