California Court Discusses Law of the Case in Bankruptcy Proceedings

Under California law, it is well-established that parties only get “one bite of the apple.” In other words, they only have one chance to assert a claim, and if they receive an unfavorable verdict, they cannot attempt to relitigate the claim before another court. This was demonstrated in a recent bankruptcy ruling, in which the court affirmed the dismissal of a debtor’s adversary proceeding. If you are interested in seeking debt relief, it is in your best interest to contact a trusted California bankruptcy lawyer to evaluate your options.

The Procedural History of the Case

It is alleged that the debtor filed a pro se adversary proceeding against the defendant. The details regarding her filing were not reported by the court. Regardless, the defendant filed a motion to dismiss, arguing that the claims asserted had previously been litigated. The bankruptcy court granted the motion and dismissed the debtor’s proceeding. She appealed, and the bankruptcy appellate panel affirmed the bankruptcy court’s decision. The debtor then appealed to the United States Court of Appeals for the Ninth Circuit. The Court of Appeals ultimately affirmed the bankruptcy appellate panel’s decision.

The Law of the Case

In its opinion, the Court of Appeals explained that it reviewed bankruptcy appellate panel decisions de novo and applied the same standard of review that the panel applied to the bankruptcy court’s opinion. In doing so, the Court of Appeals ultimately determined that the bankruptcy court and panel ruled correctly.

Specifically, the Court of Appeals noted that the debtor’s claims against the defendant were previously litigated in the debtor’s bankruptcy proceeding. As such, pursuant to the law of the case doctrine, her claims were barred. The Court of Appeals explained that the law of the case doctrine dictates that a court typically is precluded from evaluating an issue that it previously decided or had been resolved by a higher court in the same case.

In the subject case, the bankruptcy court’s ruled in favor of the defendant on the claims asserted by the debtor in the debtor’s proceedings. As such, the court could not consider them. The court also declined to adopt the debtor’s argument that the bankruptcy court committed an abuse of discretion by considering her prior bankruptcy proceedings, or that the consideration of those proceedings converted the defendant’s motion to dismiss into a motion for summary judgment. As such, the Court of Appeals affirmed the bankruptcy appellate panel’s decision.

Meet With a Capable Bankruptcy Attorney

Bankruptcy has helped many people gain financial independence, but parties involved in bankruptcy proceedings must abide by the applicable rules and laws, which among other things, means they can only litigate issues once.  If you wish to reduce your debts via bankruptcy, it is smart to speak to an attorney to discuss your options. Matthew D. Roy is a capable California bankruptcy lawyer who can advise you of your rights and aid you in seeking the best outcome possible under the facts of your case. You can contact Mr. Roy through the form online or by calling (916) 361-6028 to set up a meeting.