Judge: Jon R. Takasugi, Case: 21STCV36897, Date: 2022-08-23 Tentative Ruling

Case Number: 21STCV36897    Hearing Date: August 23, 2022    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Plaintiffs’ motion for a preliminary injunction is GRANTED.

On 10/6/2021, Plaintiffs Kamran Sadeghian and Shima Nikfarjam (collectively, Plaintiffs) filed suit against Arain Eghbali, Enrich Financial, Inc., and Peak Foreclosure Services, Inc., alleging: (1) quiet title; (2) cancellation of written instrument based upon fraud; (3) cancellation of written instrument based upon non-delivery; (4) recission; (5) slander; (6) fraud; (7) violation of California Business and Professions Code; (8) declaratory relief; and (9) injunctive relief.

On 6/6/2022, Plaintiff’s motion for preliminary injunction to prevent the trustee foreclosure sale was continued, after it was learned that Plaintiff Sadeghian had filed bankruptcy.  Defendants’ Counsel was directed to file briefing regarding the bankruptcy, how the filing of bankruptcy by one spouse affects the other spouse, and whether the entire action should be stayed.

In supplemental briefing, Defendants argue that this stay should apply to both Plaintiffs pursuant to 11 U.S. Code section 1301 (emphasis added) which provides:

(a) Except as provided in subsections (b) and (c) of this section, after the order for relief under this chapter, a creditor may not act, or commence or continue any civil action, to collect all or any part of a consumer debt of the debtor from any individual that is liable on such debt with the debtor, or that secured such debt, unless—

(1) such individual became liable on or secured such debt in the ordinary course of such individual’s business; or

(2) the case is closed, dismissed, or converted to a case under chapter 7 or 11 of this title.

            However, the purpose of this statute is to prevent a creditor from seeking to collect a "consumer debt" from any individual who is liable along with the debtor. Here, this action is not a creditor action to collect “all or any part of a consumer debt of the debtor from any individual that is liable on such debt.” Rather, this is an action initiated by the debtors. As such, the statute on its face does not apply here. The automatic stay was not intended to prevent debtors from prosecuting actions against others. (See Shah v. Glendale Federal Bank (1996) 44 Cal.App.4th 1371.) (“Both California and the federal circuit courts have held that the automatic stay in bankruptcy under 11 U.S.C. § 362(a)(1) [bankruptcy petition operates as stay of judicial proceedings “against the debtor”] is inapplicable to actions initiated by the debtor.”)

            Defendant has not advanced any other grounds for opposing the preliminary injunction.

            Based on the foregoing, Plaintiffs’ motion for a preliminary injunction is granted.

It is so ordered.

Dated:  August    , 2022

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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