April 2020 Archives

Structuring Offers of Compromise for Multiple Defendants: The Offer Cannot be Conditioned on Acceptance by All Defendants

In Anthony v. Li, 2020 Cal. App. LEXIS 302 (April 13, 2020, the California Court of Appeal held that under Cal. Code of Civ. Pro. ("CCP") § 998, an offer of compromise ("offer") to multiple defendants must be apportioned and not conditioned on acceptance by all defendants. CCP § 998 is a cost-shifting statute which encourages the settlement of actions, by penalizing parties who fail to accept reasonable pretrial settlement offers. For example, if a defendant refuses a reasonable pretrial settlement offer and subsequently fails to obtain a "more favorable judgment," that defendant is penalized by a loss of prevailing party costs and an award of costs in the plaintiff's favor, and vice versa. Furthermore, CCP § 998 has specific requirements for the structuring and acceptance of this offer. Pursuant to CCP § 998, the written offer must contain: (1) a statement of the offer which lays out the terms and conditions of the judgment; and (2) a provision that allows the party to indicate acceptance by signing a statement that the offer is accepted. Additionally, any offer must be clear and specific and must be written with sufficient specificity because the trial court lacks the authority to adjudicate the terms of the settlement. 

Summary Judgment Granted For Non-Dischargeability Based on State Court Judgment

In In re Zuckerman (Zuckerman v. Crigler), Case No. CC-19-1200-TaFS, published on April 10, 2020, the Ninth Circuit Bankruptcy Appellate Panel ("BAP") upheld the Bankruptcy Court's summary judgment for non-dischargeability under Section 523(a)(2) based on an underlying state court judgment against the debtor.

Fraudulently Transferred Property Remains Part of Estate Upon Conversion from Chapter 13 to 7

In In re Brown (Brown v. Barclay), No. 18-60029 (March 23, 2020), the Ninth Circuit Court of Appeals held that property transferred in bad faith by the Debtor during the pendency of a Chapter 13 case was property of the estate upon conversion of the case to Chapter 7. Generally, only assets that remain in the debtor's control or possession upon conversion from Chapter 13 to Chapter 7 become property of the estate. Further, pursuant to Section 348(f)(1)(A), assets acquired after the Chapter 13 filing do not become property of the estate upon conversion to Chapter 7.

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