Citations
- 42 Cal. App. 4th 1086
Full opinion text
Opinion
PREMO, Acting P. J.
Plaintiffs John Billmeyer, trustee for the bankruptcy estate of Coast Range Transport, Inc. (hereafter, Coast Range), and Dennis and Nancy Kendall sued defendants Plaza Bank of Commerce (now Comerica Bank-Califomia) (hereafter, Plaza) and Pamela Bogle for losses allegedly caused by defendants’ lending practices which forced Coast Range into bankruptcy. The trial court granted defendants’ motion for summary judgment holding that (1) Billmeyer’s claims were barred by res judicata (and federal exclusive jurisdiction principles), and (2) the Kendalls’ claims were barred by the statute of limitations and standing principles. On appeal, plaintiffs dispute the trial court’s application of the law. We affirm the judgment.
Scope of Review
The parties agree on the material facts. Defendants were therefore entitled to judgment if their contentions as to the applicability of the law are correct. (Pacific Auto. Ins. Co. v. Wolff (1977) 72 Cal.App.3d 537, 540 [140 Cal.Rptr. 164].)
Background
The Kendalls owned Coast Range, a trucking business that they began in 1981. Plaza obtained Coast Range’s banking business in 1986. In 1988, federal deregulation of the trucking business required those in the industry to cut costs to compete. Plaza assisted Coast Range in cost-saving measures so as to prevent Coast Range’s credit line loans from going into default. According to plaintiffs, Plaza’s assistance was intrusive and restrictive. Coast Range defaulted on the loans. It filed a voluntary petition under chapter 11 of the United States Bankruptcy Code in December 1988.
Coast Range’s statement of financial affairs, filed in connection with the petition, listed Plaza as a secured creditor as to $190,000 and an unsecured creditor as to approximately $5,400. It did not indicate that these debts were contingent, unliquidated, or disputed as required by the bankruptcy rules if this was, in fact, the case. Nor did it disclose as an asset any claim or counterclaim against Plaza.
On March 2, 1989, the bankruptcy court ordered Plaza relieved from the automatic stay of proceedings against a bankruptcy debtor as the stay pertained to the personal property that secured Plaza’s loans to Coast Range. The order authorized Plaza to proceed with “any and all actions and legal proceedings effecting [sic] the Collateral,” such as foreclosure, taking possession, and liquidation. The order described the collateral as: “All of the debtor’s pre-petition accounts receivable, inventory, money, deposit accounts, equipment, vehicles, trailers, machinery, fixtures, office equipment, furniture, furnishings, tools, dies, jigs, general intangibles, and all proceeds therefrom.” The order also expressly bound all parties to the bankruptcy proceeding, their heirs, assigns, and successors, including any trustee appointed in any converted or superseding bankruptcy case.
On June 8, 1989, the bankruptcy court ordered the case converted from chapter 11 (reorganization) to chapter 7 (liquidation). It appointed Billmeyer as trustee at some point.
On June 12, 1989, via stipulation between Plaza and Coast Range made before the case was converted, the bankruptcy court ordered a lien in favor of Plaza against the postpetition assets of Coast Range (chiefly accounts receivable) in consideration for certain postpetition payments made by Plaza on behalf of Coast Range. The court specified that the lien was of the same type already held by Plaza under its loan agreements with Coast Range. In this regard it found that Coast Range had defaulted under the terms of the loan agreements by failing to make loan payments and cure overdrafts, making a total amount due Plaza of $63,922.
On August 18, 1989, Plaza filed a proof of claim pursuant to the Bankruptcy Code setting forth a claim against Coast Range in the amount of $60,093.15. Coast Range made no objection to this claim, and the claim therefore became “allowed” by operation of law.
Also on August 18, 1989, Billmeyer filed a report of no distribution which asserted that Billmeyer had (1) neither received any property nor paid any money on account of the estate, and (2) made diligent inquiry into the whereabouts of property belonging to the estate and found no property available for distribution.
On February 9, 1990, the bankruptcy court approved Billmeyer’s report and ordered the estate closed.
On May 2, 1990, Coast Range and the Kendalls filed this action alleging various causes of action, such as breach of the loan agreements and fraud, arising from the course of dealing between Coast Range and Plaza. The gist of the complaint focused upon alleged improper activities that served as the catalyst for the bankruptcy filing. Plaza successfully demurred to the bulk of the complaint on the basis that the claims belonged to the bankruptcy estate. The trial court granted the Kendalls leave to amend as to individual claims for interference with economic relationship, intentional infliction of emotional distress, and negligent infliction of emotional distress.
On December 7, 1990, upon Billmeyer’s application, the bankruptcy court ordered the chapter 7 case reopened. The application stated in total: “Comes now John Billmeyer, Trustee and respectfully represents: [H Applicant was the duly appointed, qualified, and acting trustee of the estate of the above named debtor corporation. [*fl] That applicant files herewith his application to reopen the within proceedings. [^Q There are no funds held in trust by applicant, [‘JQ Wherefore, applicant prays for an order that the case be reopened and that the filing fee be waived.”
On February 1, 1991, Billmeyer applied to the bankruptcy court for authorization to employ special counsel. The application asserted, in relevant part: “Among the creditors of the Debtor is Plaza Bank of Commerce .... A dispute has arisen between the Debtor and Plaza .... Debtor, through its authorized representatives, believes that it has suffered damages as a consequence of acts, representations or omissions of Plaza . . . .” The application then recites that the debtor and trustee agreed to permit the employment of an attorney “to pursue litigation against Plaza” and the attorney had agreed “to represent the interest of the estate of the Debtor on the following conditions: [