In re Robert Van Zandt

Filing 14

ORDER ORDER AFFIRMING DECISIONS OF BANKRUPTCY COURT AND DENYING MOTION TO WITHDRAW REFERENCE. ***Civil Case Terminated.*** Signed by Judge Claudia Wilken on 1/27/2014. (Attachments: # 1 Certificate/Proof of Service)(ndr, COURT STAFF) (Filed on 1/27/2014)

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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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ROBERT FRANKLIN VAN ZANDT,

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Nos. C 13-00702
13-01568
13-02765
13-04200

Debtor.
Bk. No.

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United States District Court
For the Northern District of California

12-32655 HB

ORDER AFFIRMING
DECISIONS OF BANKRUPTCY
COURT AND DENYING MOTION
TO WITHDRAW REFERENCE

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CW
CW
CW
CW

________________________________/

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Pro se Debtor Robert Franklin Van Zandt has filed appeals of
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four of the bankruptcy court’s orders in this case and a motion to
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withdraw the reference.1

Appellees have filed responding briefs

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and Debtor has filed replies.

Having considered the papers filed

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by the parties, the Court AFFIRMS the Bankruptcy Court’s orders
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and DENIES the motion to withdraw the reference.
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JURISDICTION AND STANDARD OF REVIEW
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The district court has jurisdiction over these appeals under
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28 U.S.C. § 158(a).

The bankruptcy court's conclusions of law are

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reviewed de novo and its findings of fact under the clearly
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erroneous standard.

Fed. R. Bankr. 8013; In re Wegner, 839 F.2d

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Debtor filed two additional appeals from interlocutory
orders, which this Court dismissed on May 1, 2013. See Case No.
13-1513, Docket No. 6; Case No. 13-1888, Docket No. 4. Debtor
appealed the dismissals, and the Ninth Circuit dismissed those
appeals for lack of jurisdiction. See Case No. 13-1513, Docket
No. 11; Case No. 13-1888, Docket No. 8. Debtor has also filed two
more recent appeals, which have not yet been briefed. See Case
Nos. 13-5947, 13-5948.

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533, 536 (9th Cir. 1988).

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from the automatic stay is reviewed for an abuse of discretion.

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In re Arnold, 806 F.2d 937, 938 (9th Cir. 1986).

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The decision to grant or deny relief

BACKGROUND

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Debtor, then represented by counsel, filed a voluntary

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Chapter 7 Petition on September 17, 2012.

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1.

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his Social Security Insurance Benefits, Veteran’s Disability

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Benefits and Veteran’s Vocational Rehabilitation Benefits.

Bankruptcy Docket No.

The only sources of income Debtor listed on his Petition were

Id.

United States District Court
For the Northern District of California

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Debtor claimed various property, including a Veteran’s Benefit

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Account and miscellaneous personal property, all of which he

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claimed as exempt.

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his petition:

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Mazzaferri, the Trustee of the Fiorani Living Trust, for “Pending

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litigation in San Francisco County regarding alleged breach of

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trust”; M. Consentino for a judgment “stayed by court order”; and

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William Parisi for “Pending litigation in San Francisco County

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regarding alleged breach of trust.”

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2012, the Chapter 7 Trustee reported that

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Id.

Debtor listed four unsecured creditors on

Bank of America for credit card purchases; Edith

Id. at 40-41.

On October 25,

I have neither received any property nor paid any money
on account of this estate; that I have made a diligent
inquiry into the financial affairs of the debtor(s) and
the location of the property belonging to the estate;
and that there is no property available for distribution
from the estate over and above that exempted by law.
Pursuant to Fed R Bank P 5009, I hereby certify that the
estate of the above-named debtor(s) has been fully
administered. I request that I be discharged from any
further duties as trustee. Key information about this
case as reported in schedules filed by the debtor(s) or
otherwise found in the case record: This case was
pending for 1 months [sic]. Assets Abandoned (without
deducting any secured claims): $ 3104.49, Assets Exempt:
$ 36718.51, Claims Scheduled: $ 14053.55, Claims
Asserted: Not Applicable, Claims scheduled to be
discharged without payment (without deducting the value
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of collateral or debts excepted from discharge):
$ 14053.55. Meeting of Creditors Held.
Bankruptcy Docket Entry for October 25, 2012.

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On December 21, 2013, Mazzaferri filed an adversary

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proceeding against Debtor, objecting to the recommendation of

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discharge.

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23, 2013, Parisi also filed an adversary proceeding against

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Debtor, objecting to the recommendation of discharge.

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Adversary Case No. 12-3184.

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Bankrupcty Adversary Case No. 12-3183.

On December

Bankruptcy

On December 24, 2012, Parisi filed a motion for relief from

United States District Court
For the Northern District of California

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the stay, seeking to proceed with his litigation against Debtor in

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San Francisco Superior Court.

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motion, lifting the stay to allow the litigation to proceed, but

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ordered that Parisi could not seek to enforce any judgment

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obtained in his favor without an order of the Bankruptcy Court.

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On February 1 2013, Debtor filed a notice of appeal of this order

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and elected to have the appeal heard by the district court.

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appeal is docketed in this Court as Docket Number 13-702.

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The Bankruptcy Court granted the

The

On February 13, 2013, Debtor filed in the Bankruptcy Court a

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motion to withdraw the reference of his Chapter 7 bankruptcy

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proceeding to the Bankruptcy Court.

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Bankruptcy Court entered an order recommending that the district

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court deny the motion to withdraw the reference.

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2013, the Bankruptcy Court transmitted the motion to withdraw and

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the Bankruptcy Court’s recommendation to this Court.

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to withdraw was docketed as part of case number 13-702 in this

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Court.

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On February 25, 2013, the

On February 26,

The motion

On March 5, 2013, Mazzaferri filed a motion for relief from
the stay, seeking to proceed with her litigation against Debtor in
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San Francisco Superior Court.

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granted the motion for relief from the stay, allowing Mazzaferri

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to proceed with her litigation against Debtor, but prohibiting her

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from seeking to enforce any judgment in her favor without an order

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from the Bankruptcy Court.

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notice of appeal of the Bankruptcy Court’s order granting the

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motion for relief from the stay and elected to have the appeal

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heard by the district court.

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as Docket Number 13-1568.

On April 1, the Bankruptcy Court

On April 3, 2013, Debtor filed a

The appeal is docketed in this Court

United States District Court
For the Northern District of California

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On April 11, 2013, Mazzaferri filed a motion for leave to

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collect on a judgment obtained in the state court proceedings.

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Debtor opposed the motion, arguing that the state court judgment

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was obtained in violation of the automatic stay and accordingly

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void.

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“Neither the request for, nor the issuance of, the Abstracts of

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Judgment issued on March 25, 2013 in San Francisco Superior Court

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Case No. CGC-10-500462 are violations of the 11 U.S.C. 362

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automatic stay.”

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notice of appeal of the Bankruptcy Court’s order denying the

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motion for leave to collect a judgment and elected to have the

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appeal heard by the district court.

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Bankruptcy Court’s order as granting the motion in part and

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denying it in part.

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Docket Number 13-2765.

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The Bankruptcy Court denied Mazzaferri’s motion but found,

Bankruptcy Court Docket No. 75.

Debtor filed a

Debtor characterizes the

The appeal is docketed in this Court as

On July 23, 2013, Debtor filed a pro se motion for sanctions

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against Mazzaferri and her attorney, Russell Stanaland.

The

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Bankruptcy Court denied the motion on August 22, 2013.

Debtor

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filed a notice of appeal of the Bankruptcy Court’s order denying
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his motion for sanctions and elected to have the appeal heard by

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the district court.

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Docket Number 13-4200.

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I.

The appeal is docketed in this Court as

DISCUSSION
Grant of Parisi’s Motion for Relief from Stay and Debtor’s
Motion to Withdraw Reference--Case No. 13-702
Debtor appeals the grant of Parisi’s motion for relief from

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stay based on an alleged denial of his right to due process.

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First, he argues that he was not provided with proper notice of

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the motion.

Second, he argues that Parisi’s counsel did not

United States District Court
For the Northern District of California

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appear for the hearing on the motion for relief from stay, but the

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order granting the motion states that counsel appeared.

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purported inconsistency is also the basis of Debtor’s motion to

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withdraw the reference to the Bankruptcy Court of the entire

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Chapter 7 case.

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This

Debtor’s argument regarding the lack of notice of the motion

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is without merit.

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Case Filing user who is listed as attorney of record in the

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bankruptcy proceeding.2

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electronically prior to the January 14, 2013 hearing.

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no evidence to the contrary.

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Debtor’s attorney is a registered Electronic

Accordingly, counsel was served
Debtor has

Debtor’s argument regarding the inconsistency between the

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transcript for the hearing on the motion for relief from stay and

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the order on that motion is also unavailing.

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transcript that encompasses the proceedings between 1:05:22 PM and

Debtor submits a

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Debtor’s counsel is still listed as attorney of record on
the Bankruptcy Court docket. However, counsel has not filed
anything on that docket since March 19, 2013 and, since that time,
Debtor has filed multiple documents pro se.
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1:05:32 PM and indicates that neither he nor counsel for Parisi

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appeared for the hearing when the case was called at that time.

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Plaintiff also submits the order granting the motion for relief

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from stay, which indicates that counsel for Parisi appeared at the

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hearing.

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Withdraw Reference clearly explains that Parisi’s counsel appeared

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late and the Bankruptcy Court docket clearly indicates that a

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hearing was held on January 14, 2013.

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docket and order support a finding that Parisi’s counsel appeared

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United States District Court
For the Northern District of California

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after 1:05:32 PM, at which time, the Bankruptcy Court conducted a

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hearing on the motion.

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contrary.

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or to appear at the hearing.

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provide any basis aside from the alleged due process violation for

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reversing the Bankruptcy Court’s order, whether or not Parisi’s

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counsel was present.

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Court’s grant of Parisi’s motion for relief from stay.

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The Bankruptcy Court’s Recommendation Re: Motion to

The Bankruptcy Court’s

Debtor presents no evidence to the

Moreover, Debtor failed to oppose the motion in writing
Even now, on appeal, Debtor fails to

Accordingly the Court AFFIRMS the Bankruptcy

Debtor’s motion to withdraw the reference is based on the

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same alleged denial of his due process rights.

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above, the Court finds Debtor’s due process allegations

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unavailing.

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withdraw the reference.

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II.

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As discussed

Accordingly, the Court DENIES Debtor’s motion to

Grant of Mazzaferri’s Motion for Relief From Stay--Case No.
13-1568
Debtor next appeals the Bankruptcy Court’s order granting

Mazzaferri relief from the automatic bankruptcy stay.

As noted

above, the Bankruptcy Court granted Mazzaferri’s motion for
relief, allowing her to pursue her San Francisco Superior Court
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case, but prohibited her from seeking to enforce any favorable

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judgment obtained in that case, without leave of the Bankruptcy

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Court.

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request of a party in interest and after notice and a hearing, the

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court shall grant relief from the stay . . . such as by

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terminating, annulling, modifying, or conditioning such stay for

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cause, including the adequate protection of an interest in

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property of such party in interest.”3

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definition of what constitutes ‘cause,’ discretionary relief from

Title 11 U.S.C. § 362(d)(1) provides in relevant part, “On

“Because there’s no clear

United States District Court
For the Northern District of California

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the stay must be determined on a case by case basis.”

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Donald, 755 F.2d 715, 717 (9th Cir. 1985).

In re Mac

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A.

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Debtor first argues that Mazzaferri’s motion for relief from

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stay “presented no facts or authority establishing how or why she

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would be entitled to such relief.”

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6.

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Failure to State Grounds

Appellant’s Opening Brief at

However, Mazzaferri’s motion asserted that
cause exists for relief from stay because 1) there is no
property in the bankruptcy estate to be protected,
2) movant believes and thereon alleges that the debtor
filed the bankruptcy in bad faith for the improper
purposes of delaying and hindering the state court
actions against him currently pending in San Francisco,
of harassing the beneficiary’s counsel and of
discouraging the trustee and beneficiary pursuing their
matters against him; and 3) any claim ultimately
liquidated will be subject to nondischarge under 11
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Debtor argues that Mazzaferri is not entitled to relief
under 11 U.S.C. § 362(d)(1) because she “does not have any
interest in any specific property.” Appellant’s Opening Brief at
8. However, § 362(d)(1) clearly states that relief may be granted
for “cause, including the adequate protection of an interest in
property of such party in interest.” 11 U.S.C. § 362(d)(1)
(emphasis added). Accordingly, the protection of an interest in
property is only one example of the type of cause for which relief
may be granted.
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U.S.C. § 523(a)(4) because the debtor conspired with and
aided and abetted the former trustee to fraudulently
misappropriate trust assets, and the debtor personally
committed actual fraud and larceny within the meaning of
the statute.
Mazzaferri Motion for Relief from Stay at 2-3.

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Debtor argues here, as he argued in the Bankruptcy Court,
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that Mazzaferri’s motion for relief failed to provide sufficient
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evidence to support her allegations of bad faith and fraud.4
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However, the Bankruptcy Court did not rely on a finding that
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Debtor filed the bankruptcy proceedings for the purpose of
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delaying the state court proceeding or that Mazziferri’s claim
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United States District Court
For the Northern District of California

against him would be subject to discharge.

Instead, the

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Bankruptcy Court relied on its findings that the state court
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proceedings involved parties and causes of action over which the
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Bankruptcy Court had limited or no jurisdiction and judicial
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economy provided cause for granting relief from the stay.
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The Ninth Circuit has recognized that allowing state court
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proceedings to proceed to resolve state court claims over which
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the Bankruptcy Court has no jurisdiction constitutes cause.

See

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In re Castlerock Properties, 781 F.2d 159, 163 (9th Cir. 1986);
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see also, S. Rep. No. 989, 95th Cong., 2d Sess. 50, reprinted in
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1978 U.S.C.C.A.N. 5836 (“It will often be more appropriate to
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permit proceedings to continue in their place of origin, when no
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great prejudice to the bankruptcy estate would result, in order to
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leave the parties to their chosen forum and to relieve the
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bankruptcy court from many duties that may be handled
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Debtor also states that the Bankruptcy Court should have
sanctioned Mazzaferri for this alleged failure to present evidence
to support her motion for relief. However, nothing in the record
indicates that Debtor moved for such sanctions.
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elsewhere.”).

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appropriate where, as here, there are non-debtor co-defendants in

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the state court proceeding against whom the state court action is

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not stayed.

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weighs in favor of allowing Mazzaferri to proceed with her claim

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against Debtor in state court along with her claims against the

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non-Debtor state court defendants and then to return to the

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Bankruptcy Court to litigate the issue of whether the liquidated

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claim is dischargeable.

Deferring to the state court is particularly

As the Bankruptcy Court found, judicial economy

See, e.g., In re Castlerock Properties,

United States District Court
For the Northern District of California

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781 F.2d at 163 (holding that cause existed where “a state court

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trial is about to take place involving the very same issues”).

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The Bankruptcy Court also relied on its earlier order,

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granting the unopposed motion for relief from stay filed by

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Parisi.

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same operative facts as Mazzaferri’s state court claims.

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Accordingly, the Bankruptcy Court found that “judicial economy

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will be best served if these related cases proceed together in

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state court.”

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adopted by the Bankruptcy Court at Docket No. 51).

Parisi’s state court claims against Debtor arise from the

Bankruptcy Docket No. 49 at 3 (tentative ruling,

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B.

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Debtor next argues that Mazzaferri lacked standing to seek

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Proof of Claim

relief from the stay because her claim against the bankruptcy

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estate was invalid.5

Debtor first argues that Mazzaferri’s claim

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was late.

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within ninety days of the first meeting of creditors as required

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by Federal Rule of Bankruptcy Procedure 3002(c).

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However, she filed her claim on December 21, 2012,

Debtor next

suggests that the proof of claim was invalid because it did not

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list an amount of claim as of the date the bankruptcy case was
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filed.

However, the Proof of Claim indicates that the claim was

“Contingent and Unliquidated.”

Indeed, 11 U.S.C. § 101(5)(A)

United States District Court
For the Northern District of California

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defines “claim” as “right to payment, whether or not such right is

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reduced to judgment, liquidated, unliquidated, fixed, contingent,

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matured, unmatured, disputed, undisputed, legal, equitable,

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secured, or unsecured.”

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Debtor listed Mazzaferri as a creditor on

his bankruptcy petition, indicating that she had a disputed claim

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for an unknown amount based on “Pending litigation in San
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Francisco County regarding alleged breach of trust.”

Bankruptcy

Court Docket No. 1 at 26.

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Debtor also argues that Mazzaferri lacked standing to seek
relief from the stay because she has failed “to present any
evidence or argument establishing she is the real party in
interest.” Appellant’s opening brief at 15. Debtor further
argues that Mazzaferri has failed to demonstrate that Mazzaferri
personally, rather than the trust for which she is trustee, has
any claim against Debtor. However, Debtor’s original bankruptcy
petition indicates that Mazzaferri has a claim against his estate,
and she has clearly appeared in this case and the underlying state
claim as the trustee for the Fiorani Living Trust, not as an
individual. Debtor does not dispute that the Fiorani Living Trust
has a claim against his estate, or that Mazzaferri is the trustee
for that trust.
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C.

State Court Claims

Debtor further argues that Mazzaferri’s state court claims

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are time-barred.

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entitled to relief from the Bankruptcy Court stay to pursue those

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claims.

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Accordingly, Debtor argues, Mazzaferri is not

However, as the Bankruptcy Court found, the question of

whether the state court claims are timely is an issue to be raised

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in the state court proceedings.
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United States District Court
For the Northern District of California

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D.

Purpose of the Automatic Stay

Finally, Debtor cites a number of cases discussing the

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function of the automatic stay and its importance to the

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bankruptcy system.

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argument applicable to his case.

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However, he does not provide any specific

The Court AFFIRMS the Bankruptcy Court’s grant of

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Mazzaferri’s motion for relief from stay.
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III. Mazzaferri’s Motion to Collect on Judgment--Case No. 13-2765
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On April 11, 2013, Mazzaferri filed a motion arguing that she

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was entitled to collect on a judgment for attorneys’ fees

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sanctions obtained in the state court proceeding and seeking the

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Bankruptcy Court’s permission to record the abstract of judgment

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she obtained in state court.

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On May 23, 2013, the Bankruptcy

Court entered an order (1) denying the motion and (2) finding that

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Mazzaferri did not violate the § 362 automatic stay when she
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requested the abstract of judgment in state court or when it

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issued.

Debtor now appeals, challenging the finding that the

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request for the issuance of an abstract of judgment by Mazzaferri
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was not in violation of the automatic bankruptcy stay.

Debtor has

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waived this argument.

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the judgment, the Bankruptcy Court stated, among other things, “I

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don’t think we have a violation of the automatic stay.”

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Debtor’s counsel was asked whether he had any response, counsel

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At the hearing on the motion to collect on

stated, “No, Your Honor.

When

I’m actually in full agreement with you-

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-with your decision.”

Bankruptcy Court Transcript of May 16, 2013

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Proceedings at 4.
Accordingly, the Court AFFIRMS the Bankruptcy Court’s May 23,

United States District Court
For the Northern District of California

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2013 order.

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IV.

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Denial of Motion for Sanctions--Case No. 13-4200
Finally, Debtor appeals the Bankruptcy Court’s denial of his

motion for sanctions.

Debtor moved for sanctions arguing that

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Mazzaferri recorded the abstract of judgment she obtained in state
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court in violation of the Bankruptcy Court’s order denying her
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motion to collect on a judgment.

However, as the Bankruptcy Court

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found, Mazzaferri only recorded the abstract of judgment as to

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Debtor’s two co-defendants in the state court proceeding, not as

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to Debtor.

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order denying Debtor’s motion for sanctions.6

Accordingly, the Court AFFIRMS the Bankruptcy Court’s

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Debtor also filed a motion to strike Mazzaferri’s
description of the underlying state court proceedings in her
brief, arguing that those proceedings “have nothing to do with and
are irrelevant to the issue on appeal.” Case No. 13-4200, Docket
No. 8 at 2. Debtor further moves for sanctions against
Mazzaferri’s attorney for including the description of the state
court proceedings and for seeking to incorporate by reference
arguments made in Mazzaferri’s brief in response to Debtor’s
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CONCLUSION
Debtor has not demonstrated that the Bankruptcy Court erred

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in any way.

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motion for relief from stay (Case No. 13-702); granting

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Mazzaferri’s motion for relief from stay (Case No. 13-1568);

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denying Mazzaferri’s motion for leave to collect on a judgment

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(Case No. 13-2765); and denying Debtor’s motion for sanctions are

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AFFIRMED (Case No. 13-4200).

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reference is DENIED (Case No. 13-702).

United States District Court
For the Northern District of California

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The Bankruptcy Court’s orders granting Parisi’s

Debtor’s motion to withdraw the
Debtor’s motion to strike

and for sanctions is DENIED.

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IT IS SO ORDERED.

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Dated:

1/27/2014

CLAUDIA WILKEN
United States District Judge

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appeal of the Bankruptcy Court’s denial of her motion for relief
from the automatic stay discussed above. The Court DENIES
Debtor’s motion. Case No. 13-4200, Docket No. 8. Debtor is
appealing from the denial of his motion for sanctions related to
the recording of an abstract of judgment in the underlying state
court proceedings. Accordingly, those proceedings are relevant to
the issues on appeal. In addition, Debtor cites Ninth Circuit
Rule 28-1 in support of his argument that Mazzaferri’s counsel
should be sanctioned for incorporating by reference arguments from
a related appeal. Assuming without finding that the Ninth Circuit
Rules apply to this case, the Court finds that any violation of
the rule does not warrant the imposition of sanctions.
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