ANtotosr.,n Seyta oter PBaarrt yN No.a &m Ee,m Aadild Aredsdsr,e Tsse lephone & FAX F OR COURT USE ONLY WILLIAM R. SCHUCHMAN 3812 Sepulveda Blvd., FILED & ENTERED Suite #220 Torrance, CA 90505 Tel. No.(310) 373-8633 Fax No.(310) 933-6981 DEC 30 2019 Bar No.62685 Email: [email protected] CLERK U.S. BANKRUPTCY COURT Central District of California BY g h a l t c h i DEPUTY CLERK CHANGES MADE BY COURT Debtor appearing without attorney Attorney for: Debtor Chapter 13 trustee UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA -LOS ANGELES DIVISION In re: CASE NO.: 2:17-bk-10379-NB

CHAP TER: 13

ORDER ON:

DEBTOR’S MOTION TO MODIFY PLAN OR SUSPEND PLAN PAYMENTS DEBTOR’S MOTION FOR AUTHORITY TO REFINANCE REAL PROPERTY

DEBTOR’S MOTION FOR AUTHORITY TO SELL REAL PROPERTY DEBTOR’S MOTION FOR AUTHORITY TO

ENTER INTO LOAN MODIFICATION SANDRA LISA SANDOVAL OTHER: MOVANT’S MOTION FOR COURT APPROVAL OF PROPOSED MARITAL SETTLEMENT AGREEMENT BETWEEN DEBTOR AND MOVANT FOR CASE NO. BD541456 IN LOS ANGELES SUPERIOR COURT No hearing held Hearing held DATE: TIME: COURTROOM: PLACE: Debtor(s). Based on Debtor’s creditor Jose Mejia’s motion filed on (date) 12/03/2019 as docket entry number 96 (the “Settlement Motion”), it is ordered that Debtor’s motion the Settlement Motion is:

Granted Denied

Granted on the terms set forth in the chapter 13 trustee’s comments on or objection to Debtor’s motion

Granted on the following conditions:

Set for hearing on (date) January 23, 2020 at (time) 8:30 a.m. .

TENTATIVE RULING. This Court’s tentative ruling is to deny the Settlement Motion for the following reasons.

(1) Background This Court’s prior orders (dkt. 58, 91) granted limited relief from the automatic stay as follows: Any characterization of property (as community or separate property) and any division of property shall be treated for bankruptcy purposes as a proposed resolution between the debtor and the non-debtor spouse/former spouse. To assure that there is an opportunity for other parties in interest in this bankruptcy case to object to any undue prejudice that may result from such a proposed resolution, it shall be treated as a proposed compromise or settlement (even if it is embodied in a nonbankruptcy judgment) that must be the subject of adequate notice and an opportunity for a hearing under Rule 9019 (Fed. R. Bankr. P.) before final relief from the automatic stay to make any such resolution effective. [Dkt. 58, at PDF pp. 4-5]

(2) Inadequate service The proof of service attached to the Settlement Motion (dkt. 96, end) does not reflect service on all creditors. Under Rule 2002(a)(3) (Fed. R. Bankr. P.), service on all creditors is required (unless excused by this Court).

(3) Lack of stated grounds for approval As noted in the posted Procedures of the undersigned Bankruptcy Judge (available at www.cacb.uscourts.gov), when filing a motion for approval of a settlement, Declaration(s) should support each of the four factors in In re A & C Properties,

(9th Cir. 1986). The four A&C factors are: (a) The probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises. [Id.] The Settlement Motion does not address any of these factors.

(4) Grounds for disapproval As this Court understands the proposed settlement, (a) title to the property at 14029 Leibacher Avenue, Norwalk, CA (the “Leibacher Property”) is now held by “Jose Mejia [Debtor’s former husband] and Sandra I. Mejia [Debtor], Husband and Wife as Joint Tenants” (dkt. 96, Ex. 1, at PDF p. 6, Recital “C”); (b) Debtor’s former husband will be paid $70,000 by Debtor’s father, Jamie Cardiel, (c) Debtor and her former husband will transfer title to the Leibacher Property to Debtor’s father (or alternatively the property will be sold and Debtor’s former husband and her father will receive all proceeds), and (d) Debtor’s bankruptcy estate will receive nothing. Dkt. 96, Ex. 1, at PDF pp. 8 & 11-12, ¶¶ 1, 2, & 14. The Settlement Motion does not address why Debtor’s bankruptcy estate – i.e., her creditors – will receive nothing on account of Debtor’s record ownership of the Leibacher Property. In the parlance of A&C, the Settlement Motion does not address the “probability of success” (the first A&C factor) in any claim by Debtor’s estate that it would be entitled to more than nothing. The closest the Settlement Motion comes to addressing that issue is that Debtor and her parents expressly deny that former husband Jose Mejia has “any interest in the Leibacher Property,” and implicitly they deny that Debtor herself has any interest in the Leibacher Property, on the grounds that “the Leibacher Property was originally purchased by [Debtor’s] parents and continued to be their property.” Dkt. 96, Ex. 1, at PDF p. 6, Recital “E”. But the Settlement Motion is not supported by any declarations showing that, for example, all mortgage payments and all other expenses of the Leibacher Property were made by Debtor’s parents (which might be one basis to assert that, despite Debtor’s record title to the Leibacher Property, she did not in fact have any legal (5) Conclusion This Court’s prior orders (dkt. 58, 91) noted that there is the potential for marital settlements to constitute avoidable transfers, or to cause other problems. Therefore, those orders required that any proposed division or characterization of property in the divorce proceedings be presented as a settlement under Rule 9019. But the Settlement Motion was not served on all creditors, nor is it supported by declarations and analysis addressing the A&C factors. the tentative ruling is that the Settlement Motion will be DENIED. tHE

Date: December 30, 2019 NellW.Basn © United States Bankruptcy Judge

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