In re: William F. Garlock ( 2017 )


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  •                                                             FILED
    MAR 22 2017
    1                          NOT FOR PUBLICATION
    SUSAN M. SPRAUL, CLERK
    U.S. BKCY. APP. PANEL
    2                                                         OF THE NINTH CIRCUIT
    3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
    4                            OF THE NINTH CIRCUIT
    5   In re:                        )       BAP No.    NC-16-1092-KuBS
    )
    6   WILLIAM F. GARLOCK,           )       Bk. No.    3:12-bk-30802
    )
    7                  Debtor.        )       Adv. No.   3:13-ap-03172
    ______________________________)
    8                                 )
    LEDESMA VENTURES, LLC,        )
    9                                 )
    Appellant,     )
    10                                 )
    v.                            )       MEMORANDUM*
    11                                 )
    WILLIAM F. GARLOCK,           )
    12                                 )
    Appellee.      )
    13   ______________________________)
    14                  Argued and Submitted on January 19, 2017
    at San Francisco, California
    15
    Filed – March 22, 2017
    16
    Appeal from the United States Bankruptcy Court
    17                   for the Northern District of California
    18            Honorable Dennis Montali, Bankruptcy Judge, Presiding
    19   Appearances:      David M. Wiseblood argued for appellant Ledesma
    Ventures, LLC; Zachary Tyson of Nova Law Group
    20                     argued for appellee William F. Garlock.
    21
    Before: KURTZ, BRAND and SPRAKER,** Bankruptcy Judges.
    22
    23
    24
    *
    This disposition is not appropriate for publication.
    25   Although it may be cited for whatever persuasive value it may
    26   have (see Fed. R. App. P. 32.1), it has no precedential value.
    See 9th Cir. BAP Rule 8024-1.
    27
    **
    Hon. Gary A. Spraker, Chief United States Bankruptcy Judge
    28   for the District of Alaska, sitting by designation.
    1                                INTRODUCTION
    2        Ledesma Ventures, LLC appeals from an order dismissing its
    3   nondischargeability adversary proceeding and from an order
    4   denying its motion for relief from dismissal under Civil
    5   Rule 60(b)(1).1
    6        The bankruptcy court dismissed the adversary proceeding for
    7   lack of prosecution after many months’ delay and after Ledesma
    8   Ventures more than once failed to comply with the court’s service
    9   requirements, thereby further delaying prosecution of the action.
    10   While the bankruptcy court did not make explicit findings on the
    11   five factors typically considered before dismissing for lack of
    12   prosecution, the record supports the bankruptcy court’s decision.
    13   The record establishes that the public's interest in expeditious
    14   litigation, the court's need to control its docket, the risk of
    15   prejudice to the defendant and the availability of less drastic
    16   sanctions, all militated in favor of dismissal.
    17            The bankruptcy court also denied for lack of prosecution
    18   Ledesma Ventures’ motion for relief from the dismissal.     After
    19   six months’ delay in prosecuting the motion, Ledesma Ventures
    20   admitted that its principal had not been available to work on the
    21   resolution of the litigation and that it was not immediately
    22   prepared either to proceed on the merits of the motion or to
    23   settle the action.     Instead, Ledesma Ventures advised the court
    24   that it wanted to retain new counsel and wanted a further
    25
    1
    26         Unless specified otherwise, all chapter and section
    references are to the Bankruptcy Code, 
    11 U.S.C. §§ 101-1532
    , and
    27   all "Rule" references are to the Federal Rules of Bankruptcy
    Procedure, Rules 1001-9037. All "Civil Rule" references are to
    28   the Federal Rules of Civil Procedure.
    2
    1   continuance, without offering any assurance that Ledesma Ventures
    2   would diligently and expeditiously take the steps necessary to
    3   move the matter forward towards completion.
    4        We AFFIRM.
    5                                  FACTS
    6        An order for relief was entered against involuntary debtor
    7   William F. Garlock in July 2012, and Ledesma Ventures timely
    8   filed a nondischargeability complaint against Garlock in June
    9   2013.   After the denial of Garlock’s motion to dismiss, Garlock
    10   never filed an answer to the complaint.   As a result, Ledesma
    11   Ventures obtained entry of default against Garlock in September
    12   2013.
    13        Initially, a default judgment prove-up hearing was set for
    14   October 13, 2013, at which the bankruptcy court directed Ledesma
    15   Ventures to notify the court whether it wished to proceed further
    16   and obtain a continued hearing date for the prove-up hearing.
    17   Why the court gave this direction to Ledesma Ventures is not
    18   entirely clear.   Neither party provided us with a written
    19   transcript of the October 13, 2013 hearing.   However, comments by
    20   counsel and the court at subsequent hearings suggest that the
    21   prove-up needed to be put over because of evidentiary gaps in
    22   Ledesma Ventures’ presentation.
    23        Close to a year elapsed, but Ledesma Ventures never notified
    24   the court as directed at the October 13, 2013 hearing.
    25   Consequently, in September 2014, the bankruptcy court entered its
    26   first order to show cause why the adversary proceeding should not
    27   be dismissed for failure to prosecute.    Ledesma Ventures did not
    28   file a response to the order to show cause.   It did file a one
    3
    1   sentence notice attempting to reset the default judgment prove-up
    2   for hearing on October 28, 2014, but there was no proof of
    3   service accompanying the notice.
    4        At the October 28, 2014 hearing, the bankruptcy court
    5   pointed out the absence of a written response to the order to
    6   show cause and the absence of a proof of service of Ledesma
    7   Ventures’s notice regarding the prove-up hearing.2    Moreover,
    8   Ledesma Ventures never offered any specific explanation for the
    9   one-year delay in putting the prove-up hearing back on calendar.
    10   Ledesma Ventures noted that, on October 17, 2014, the bankruptcy
    11   court closed Garlock’s bankruptcy case without granting him a
    12   discharge.   But that event does not explain Ledesma Ventures’s
    13   one-year delay, inasmuch as the case closure (without discharge)
    14   occurred after the delay already had occurred.
    15        Also, it is apparent that Ledesma Ventures was not
    16   immediately prepared at the time of the prove-up hearing, as
    17   noticed, to actually conduct the default judgment prove-up.
    18   Instead, counsel for Ledesma Ventures represented that his
    19   client’s principal was out of the country, and he had not yet had
    20   a chance to consult with his client’s principal regarding the
    21   potential impact of the case closure (without discharge).
    22        In spite of Ledesma Ventures’ deficiencies in prosecuting
    23   the adversary proceeding, the bankruptcy court discharged the
    24   first order to show cause and, at Ledesma Ventures’ request,
    25   agreed to continue the prove-up hearing because the
    26
    27
    2
    Notwithstanding the absence of a proof of service, Garlock
    28   did appear at the October 28, 2014 hearing in pro per.
    4
    1   nondischargeability adversary proceeding was moot unless Garlock
    2   reopened his bankruptcy case and took the procedural steps
    3   necessary to obtain a discharge.3
    4        The bankruptcy court set a continued prove-up hearing for
    5   December 11, 2014, and directed Ledesma Ventures to serve on
    6   Garlock written notice of the continued prove-up hearing and to
    7   file a certificate of service.   The court obviously felt that
    8   written notice to Garlock was important.   The court twice stated
    9   its service direction to Ledesma Ventures’ counsel, who
    10   acknowledged the direction and said that he understood it.   In
    11   addition, the docket entry for the October 28 hearing noted the
    12   continuance of the hearing to December 11, 2014, and also noted
    13   the court’s direction to Ledesma Ventures that it needed to serve
    14   notice of the continued hearing on Garlock “by the end of this
    15   week.”
    16        On December 5, 2014, over one month later, having not
    17   received from Ledesma Ventures a certificate of service
    18   reflecting the required service of notice on Garlock, the
    19   bankruptcy court entered an order taking the prove-up hearing off
    20   calendar and issued its second order to show cause directing
    21   Ledesma Ventures to explain why the case should not be dismissed
    22   for lack of prosecution.   As the court put it:
    23        Plaintiff has not complied with the court’s October 28,
    2014, order on the record that it serve defendant with
    24
    25        3
    Eventually, Garlock did take the steps necessary to reopen
    26   his bankruptcy case and obtain a discharge order. The bankruptcy
    court entered its standard form discharge order in April 2015.
    27   Of course, the discharge order was subject to Ledesma Ventures’
    nondischargeability adversary proceeding, which was still pending
    28   at the time the discharge order was entered.
    5
    1        notice of a continued prove-up hearing . . . .
    2        Regrettably, this is the second time the court has had
    to order plaintiff to show cause regarding its lack of
    3        prosecution of this case. It will not do it again.
    The court will dismiss this adversary proceeding with
    4        prejudice for lack of prosecution unless, by
    December 18, 2014, plaintiff files and serves a
    5        satisfactory and convincing explanation why dismissal
    is not appropriate.
    6
    7   Order Removing Matter from Calendar and Second Order to Show
    8   Cause re Dismissal (Dec. 8, 2014) at pp. 1-2.
    9        In response to the second order to show cause, Ledesma
    10   Ventures’ counsel filed a two-page declaration in which he
    11   claimed that, because Garlock was present at the hearing, he
    12   perhaps had misunderstood the bankruptcy court and did not
    13   realize that he was required to give written notice of the
    14   continued prove-up hearing.   Even though this explanation seems
    15   inadequate and unconvincing on its face, the bankruptcy court
    16   once again exercised restraint and set a continued status
    17   conference for March 27, 2015.
    18        At the March 27, 2015 continued status conference, the
    19   bankruptcy court set a half-day prove-up hearing for May 11,
    20   2015, and once again directed Ledesma Ventures’ counsel to serve
    21   written notice of the continued prove-up hearing on Garlock.
    22        Once again, Ledesma Ventures did not comply with the court’s
    23   directions regarding service of written notice.   Consequently, on
    24   May 4, 2015, the bankruptcy court entered an order dismissing the
    25   adversary proceeding for lack of prosecution.   The bankruptcy
    26   court noted its two prior orders to show cause and Ledesma
    27   Ventures’ unfulfilled promises to diligently prosecute the
    28   adversary proceeding.   The bankruptcy court further noted that it
    6
    1   had set the default prove-up hearing for May 11, 2015, and had
    2   ordered Ledesma Ventures to serve notice of the prove-up hearing
    3   on Garlock, which Ledesma Ventures had failed to do.    Based on
    4   Ledesma Ventures’ repeated lack of diligence, the bankruptcy
    5   court held that dismissal for lack of prosecution was
    6   appropriate.
    7        Ledesma Ventures timely filed a motion for relief from
    8   judgment under Rule 9024 and Civil Rule 60(b)(1).   Ledesma
    9   Ventures argued that the court should excuse its lack of
    10   diligence for four reasons: (1) it was working on a proposed
    11   settlement with Garlock and, in fact, was about to request a
    12   continuance of the prove-up hearing when it received the court’s
    13   dismissal order; (2) the court did not state that the adversary
    14   proceeding would be dismissed if Ledesma Ventures failed to serve
    15   written notice on Garlock; (3) its counsel claimed that he once
    16   again had misunderstood what the court had required regarding
    17   service of notice; and (4) its counsel claimed that he had been
    18   personally and professionally affected by the alleged murder of
    19   one of his clients in March 2015.
    20        After full briefing and several aborted attempts to hold a
    21   hearing on the motion for relief, the bankruptcy court entered an
    22   order on August 25, 2015, pointing out that it was unclear
    23   whether the parties had reached an agreement in principle
    24   regarding settlement and that, if the parties confirmed to the
    25   court by no later than noon on August 27, 2015 that such an
    26   agreement in principle had been reached, then the August 28, 2015
    27   hearing on the motion for relief would be taken off calendar.
    28   The parties apparently did so confirm their reaching an agreement
    7
    1   in principle, because the hearing was taken off calendar.
    2        By March 1, 2016, six months later, neither party had filed
    3   anything with the court indicating that the settlement had been
    4   finalized or that the motion for relief could be dispensed with
    5   and the adversary proceeding closed.   Accordingly, on that date,
    6   the bankruptcy court entered it third order to show cause against
    7   Ledesma Ventures.    The order directed Ledesma Ventures to appear
    8   and file a written explanation why the motion for relief should
    9   not be denied for lack of prosecution.
    10        Ledesma Ventures filed a two-page response to the third
    11   order to show cause.   According to Ledesma Ventures, each side
    12   had prepared its own draft settlement agreement during the
    13   intervening six months but neither side had agreed to sign off on
    14   the other’s version.   Ledesma Ventures’ counsel represented that
    15   Ledesma Ventures’ principal “was not available” for several
    16   months and that, when counsel informed the principal of the
    17   court’s third order to show cause, counsel was instructed to
    18   inform the court that Ledesma Ventures desired to complete the
    19   settlement but that it planned on retaining new counsel to
    20   complete the task.   In other words, Ledesma Ventures’ counsel
    21   advised the court that Ledesma Ventures was not prepared at that
    22   time either to finalize the settlement or to proceed with the
    23   motion for relief.   Instead, Ledesma Ventures proposed either
    24   another continuance or simply discharging the order to show cause
    25   without offering any assurance of when it might be in position to
    26   move forward either with the settlement or with the motion for
    27   relief.
    28        At the hearing on the order to show cause, Garlock was
    8
    1   represented by new counsel who advised the bankruptcy court that
    2   he personally had sent a ready-to-sign draft settlement agreement
    3   to Ledesma Ventures nine months ago, that Ledesma Ventures never
    4   responded to that draft settlement agreement, and that – when he
    5   later inquired regarding its status – Ledesma Ventures’ counsel
    6   informed him that the failure to respond was “due to his client.”
    7   Garlock’s counsel further advised the court that, given the time
    8   which had elapsed, his client no longer was willing to settle for
    9   the terms offered nine months before.    Ledesma Ventures’ counsel
    10   did not challenge any of these representations, except to
    11   indicate that it had not been nine months since Garlock had sent
    12   his draft settlement agreement, but he did admit that it had been
    13   “too long” and that he never before had represented a client who
    14   “disappeared” on him.
    15        Based on the facts as represented by both counsel, the
    16   bankruptcy court held that it would deny Ledesma Ventures’ motion
    17   for relief from the adversary proceeding dismissal order.   The
    18   court stated its reasoning as follows:
    19        I don’t think – whatever the reason is, Mr. Garlock,
    although he has some other things to deal with, he’s
    20        entitled to a fresh start. Ledesma has had time and
    time and time again to prosecute. I’m going to go
    21        ahead and deny the motion for relief from the order
    without – I won’t say without prejudice; I won’t say
    22        with prejudice – it’s denied. If Mr. Garlock wants to
    remain a party to the agreement that his lawyer sent,
    23        then that’s fine, and he and Ledesma can make peace.
    If he doesn’t want to, Mr. Tyson, I suggest you notify
    24        Ledesma of your client’s position on it, and we’ll let
    nature take its course. If Ledesma wants to get new
    25        counsel and come in and try again to revive this case,
    so be it, but I’m not going to – this can’t go on.
    26
    27   Hr’g Tr. (March 18, 2016) at 7:17-8:5.
    28        The bankruptcy court entered its order denying the motion
    9
    1   for relief on March 18, 2016, and Ledesma Ventures timely
    2   appealed.
    3                                JURISDICTION
    4        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
    5   §§ 1334 and 157(b)(2)(I), and we have jurisdiction under
    6   
    28 U.S.C. § 158
    .
    7                                   ISSUES
    8   1.   Did the bankruptcy court abuse its discretion when it
    9        dismissed Ledesma Ventures’ adversary proceeding for lack of
    10        prosecution?
    11   2.   Did the bankruptcy court violate Ledesma Ventures’ due
    12        process rights when the court dismissed Ledesma Ventures’
    13        adversary proceeding?
    14   3.   Did the bankruptcy court abuse its discretion when it denied
    15        Ledesma Ventures’ motion for relief from the dismissal
    16        order?
    17                             STANDARDS OF REVIEW
    18        We review the bankruptcy court’s dismissal order for an
    19   abuse of discretion.   Oliva v. Sullivan, 
    958 F.2d 272
    , 274 (9th
    20   Cir. 1992).   We also review for abuse of discretion the
    21   bankruptcy court's denial of Ledesma Ventures’s motion for relief
    22   under Civil Rule 60(b).    Alonso v. Summerville
    23   (In re Summerville), 
    361 B.R. 133
    , 139 (9th Cir. BAP 2007).
    24        The bankruptcy court abused its discretion only if it
    25   applied an incorrect legal rule or its findings of fact were
    26   illogical, implausible or without support in the record.    United
    27   States v. Hinkson, 
    585 F.3d 1247
    , 1262 (9th Cir. 2009) (en banc).
    28        We review de novo whether the procedure employed by the
    10
    1   bankruptcy court satisfied the requirements of due process.
    2   In re Summerville, 
    361 B.R. at 139
    .
    3                               DISCUSSION
    4   1.   Dismissal of Adversary Proceedings For Lack of Prosecution
    5        Bankruptcy courts have inherent authority to sua sponte
    6   dismiss adversary proceedings for lack of prosecution.    See
    7   Tenorio v. Osinga (In re Osinga), 
    91 B.R. 893
    , 894 (9th Cir. BAP
    8   1988)(citing Henderson v. Duncan, 
    779 F.2d 1421
     (9th Cir. 1986)).
    9        Before dismissing an action for lack of prosecution under
    10   Rule 41(b) (made applicable in adversary proceedings by
    11   Rule 7041), the court typically must consider five factors:
    12   (1) the public's interest in expeditious resolution of
    13   litigation; (2) the court's need to manage its docket; (3) the
    14   risk of prejudice to the defendant; (4) the public policy
    15   favoring disposition of cases on their merits; and (5) the
    16   availability of less drastic sanctions.    See Moneymaker v. CoBEN
    17   (In re Eisen), 
    31 F.3d 1447
    , 1451 (9th Cir. 1994); In re Osinga,
    18   
    91 B.R. at 894
    .
    19        The court may dismiss for failure to prosecute even if some
    20   of the five factors are not present.     See, e.g., Rio Properties,
    21   Inc. v. Rio Int'l Interlink, 284 F3d 1007, 1022 (9th Cir. 2002)
    22   (indicating that the policy in favor of a decision on the merits
    23   does not preclude imposition of dismissal against plaintiff or
    24   default judgment against defendant if other four factors support
    25   the trial court’s sanction); Malone v. United States Postal
    26   Serv., 
    833 F.2d 128
    , 132 (9th Cir. 1987) (noting that the
    27   existence of "egregious circumstances" renders it unnecessary for
    28   the trial court to consider alternative lesser sanctions);
    11
    1   Henderson, 
    779 F.2d at 1425
     (holding that absence of prejudice
    2   not dispositive in the face of “inordinate delay”).
    3   Additionally, the trial court need not explicitly consider
    4   alternative lesser sanctions if the plaintiff was warned of the
    5   potential for dismissal or the court previously attempted
    6   alternatives to dismissal in response to the plaintiff’s prior
    7   noncompliant conduct.    Ferdik v. Bonzelet, 
    963 F.2d 1258
    , 1262
    8   (9th Cir. 1992); Malone, 
    833 F.2d at 132
    .
    9          When, as here, the trial court does not explicitly consider
    10   the relevant factors, we can independently review the record to
    11   determine whether the order of dismissal was an abuse of
    12   discretion.    In re Eisen, 
    31 F.3d at 1451
    ; Malone, 
    833 F.2d at
    13   130.
    14          a.   Consideration of Dismissal Factors – Public Interest in
    Expeditious Litigation Resolution and the Court’s Need
    15               to Manage its Docket
    16          The delay resulting from Ledesma Ventures’ conduct was
    17   lengthy.    In assessing this delay, Ledesma Ventures would have us
    18   focus solely on its failure to serve on Garlock written notice of
    19   the May 11, 2015 default prove-up hearing.    The bankruptcy court
    20   did not so limit its focus, and neither will this Panel.    As a
    21   result of Ledesma Ventures’ pattern and practice of failing to
    22   expeditiously prosecute the litigation and failure to serve
    23   written notices as ordered by the court, final resolution of the
    24   adversary proceeding was delayed for roughly 19 months – from the
    25   date of Ledesma Ventures’ first attempt to prove-up its
    26   entitlement to a default judgment in October 2013 until the court
    27   dismissed the action in May 2015.
    28          Moreover, the reasons Ledesma Ventures offered for the delay
    12
    1   were exceedingly weak at best and nonexistent at worst.     Ledesma
    2   Ventures never really attempted to explain the one-year delay
    3   that elapsed between the initial prove-up hearing and the
    4   bankruptcy court’s first order to show cause.    As for Ledesma
    5   Ventures’ repeated failures to comply with the court’s directions
    6   regarding service, Ledesma Ventures’ counsel claimed that he must
    7   have misunderstood the court’s service directions.    We are
    8   perplexed by this claim.    We cannot conceive how such a
    9   misunderstanding could have occurred.    The court repeatedly
    10   stated that written service of notice was required.    In fact,
    11   Ledesma Ventures’ counsel specifically acknowledged some of the
    12   court’s service directions at the time the court made them.      In
    13   short, to the limited extent Ledesma Ventures attempted to
    14   explain its delay and its noncompliant conduct, those
    15   explanations ring hollow.
    16        Ledesma Ventures alternately argues that its service
    17   failures were harmless because Garlock knew about the hearings.
    18   We disagree.   The bankruptcy court was concerned that Garlock –
    19   who was not represented by counsel at either the October 28, 2014
    20   hearing or at the March 27, 2015 hearing – should be served with
    21   written notice of the subsequent prove-up hearings.    And the
    22   court unequivocally and repeatedly stated that such service was
    23   required and not waived.    As a result of Ledesma Ventures’
    24   service failures, the court felt compelled under the
    25   circumstances to take the prove-up hearings off calendar, which
    26   caused a significant amount of delay.
    27        Accordingly, the public interest in expeditious litigation
    28   resolution and the court's need to manage its docket both
    13
    1   militated in favor of dismissal.
    2          b.   Consideration of Dismissal Factors – the Risk of
    Prejudice to the Defendant
    3
    4          In the Civil Rule 41(b) context, prejudice is not weighed in
    5   a vacuum.    Instead, the bankruptcy court typically must weigh the
    6   extent of and reason for the plaintiff’s delay against any
    7   showing of a risk of prejudice.    Nealey v. Transportacion
    8   Maritima Mexicana, S.A., 
    662 F.2d 1275
    , 1280-81 (9th Cir. 1980).
    9   Sometimes, the Ninth Circuit has been willing to infer this risk
    10   from inordinate and unreasonable delay; at other times, it has
    11   not.    Compare Morris v. Morgan Stanley & Co., 
    942 F.2d 648
    , 651
    12   (9th Cir. 1991), with Mir v. Fosburg, 
    706 F.2d 916
    , 919, fn.2
    13   (9th Cir. 1983); see also Henderson, 
    779 F.2d at 1425
     (holding
    14   that the absence of prejudice is not dispositive in the face of
    15   “inordinate delay”).
    16          We think the better rule to follow in adversary proceedings
    17   arising in bankruptcy cases is that followed in Morris and
    18   Henderson.    The expeditious resolution of adversary proceedings
    19   and bankruptcy cases typically is critical to achieving the
    20   cornerstone bankruptcy goal of a fresh start for the debtor.
    21          Here, while no specific evidence of actual prejudice was set
    22   forth in the record, the relevant dismissal factor refers to the
    23   “risk” of prejudice and not to actual prejudice.    It also is
    24   worth noting that the bankruptcy court, in denying Ledesma
    25   Ventures’ Civil Rule 60(b) motion, indicated that the lengthy and
    26   unreasonable delay in resolving the adversary proceeding had the
    27   potential to hamper Garlock’s fresh start.    On this record, we
    28   agree with the bankruptcy court’s finding and consider the risk
    14
    1   of hampering Garlock’s fresh start sufficient to satisfy the
    2   prejudice factor for purposes of our Civil Rule 41(b) analysis.
    3        c.     Consideration of Dismissal Factors – the Public Policy
    Favoring Disposition of Cases on Their Merits
    4
    5        As we noted at the outset, the public policy favoring merits
    6   decisions does not by itself preclude dismissal of a lawsuit for
    7   lack of prosecution.   See Rio Properties, Inc., 284 F.3d at 1022.
    8        Here, in fact, the applicability of this public policy is
    9   attenuated, at best.   Ledesma Ventures was not seeking to proceed
    10   towards a trial on the merits.    At most, Ledesma Ventures wanted
    11   to keep the adversary proceeding alive long enough either to
    12   obtain a favorable settlement or to complete its default judgment
    13   prove-up.
    14        In any event, in light of the other factors militating in
    15   favor of dismissal, to the extent the public policy favoring
    16   merits decisions applied here, it did not preclude the bankruptcy
    17   court from dismissing for lack of prosecution.
    18        d.     Consideration of Dismissal Factors – Alternative Lesser
    Sanctions and Warning of Dismissal
    19
    20        In light of Ledesma Ventures’ disregard for the bankruptcy
    21   court’s service requirements, combined with the aggregate delay
    22   attributable to Ledesma Ventures, “egregious circumstances” are
    23   evident, and they rendered it unnecessary for the bankruptcy
    24   court to consider alternative lesser sanctions.    See In re Eisen,
    25   
    31 F.3d at 1454-55
    ; Malone, 
    833 F.2d at 132
    .
    26        Moreover, the trial court specifically warned Ledesma
    27   Ventures of the potential for imminent dismissal when it issued
    28   its second order to show cause.    Indeed, the potential for
    15
    1   dismissal was expressly based on Ledesma Ventures’ first service
    2   failure.   Thus, Ledesma Ventures cannot legitimately claim that
    3   it was taken by surprise when the court dismissed its adversary
    4   proceeding after its second service failure.    Given the prior
    5   warning, it was not necessary for the bankruptcy court to have
    6   considered alternative lesser sanctions before it dismissed the
    7   adversary proceeding.    Ferdik, 963 F.2d at 1262; Malone, 
    833 F.2d 8
       at 132-33.
    9        e.    Consideration of Dismissal Factors – Conclusion
    10        Other than the public policy favoring disposition of cases
    11   on their merits, all of the other dismissal factors militate in
    12   favor of dismissal.    Therefore, the bankruptcy court did not
    13   abuse its discretion when it dismissed Ledesma Ventures’
    14   adversary proceeding for lack of prosecution.
    15   2.   Ledesma Ventures’ Due Process Argument
    16        According to Ledesma Ventures, even if the bankruptcy court
    17   did not abuse its discretion when it dismissed the adversary
    18   proceeding, the bankruptcy court violated Ledesma Ventures’ due
    19   process rights.   Ledesma Ventures in essence asserts that the
    20   dismissal occurred without any warning and that, as a result, it
    21   did not have a reasonable opportunity to respond to the grounds
    22   for dismissal the bankruptcy court relied upon.    Due process
    23   requires that parties be given “notice reasonably calculated,
    24   under all the circumstances, to apprise interested parties of the
    25   pendency of the action and afford them an opportunity to present
    26   their objections.”    Mullane v. Cent. Hanover Bank & Trust Co.,
    27   
    339 U.S. 306
    , 314 (1950).
    28        Notwithstanding its protestations to the contrary, Ledesma
    16
    1   Ventures received adequate notice of the impending dismissal when
    2   it received the bankruptcy court’s second order to show cause,
    3   and Ledesma Ventures was given an opportunity to appear at the
    4   March 27, 2015 hearing to explain why its adversary proceeding
    5   should not be dismissed for lack of prosecution.   It was not an
    6   absence of due process that shortly thereafter caused the court
    7   to enter its dismissal order; rather, it was Ledesma Ventures’
    8   continuing delay and continuing failure to comply with the
    9   court’s service requirements.
    10        Even if we perceived some due process deficiency in the
    11   procedures employed by the bankruptcy court leading up to the
    12   dismissal (which we do not), there is no indication of any
    13   prejudice resulting from any such deficiency.   The absence of
    14   prejudice is fatal to Ledesma Ventures’ due process claim.
    15   See Rosson v. Fitzgerald (In re Rosson), 
    545 F.3d 764
    , 776–77
    16   (9th Cir. 2008).
    17   3.   Denial of Motion for Relief from Dismissal Order
    18        Ledesma Ventures argues on appeal that the bankruptcy court
    19   abused its discretion when it denied Ledesma Ventures’s Civil
    20   Rule 60(b)(1) motion because the court did not properly consider
    21   the factors articulated in Pioneer Invest. Servs. Co. v.
    22   Brunswick Assocs. Ltd. P'ship, 
    507 U.S. 380
    , 395 (1993).
    23        Ledesma Ventures’ reliance on Pioneer is misplaced.   The
    24   bankruptcy court never ruled on the merits of the Civil
    25   Rule 60(b)(1) motion.   Instead, the court denied the motion for
    26   lack of prosecution.    The bankruptcy court’s third order to show
    27   cause   required Ledesma Ventures to file a response, appear at
    28   the March 18, 2016 hearing, and explain why the motion for relief
    17
    1   should not be denied for lack of prosecution.   At the hearing,
    2   the bankruptcy court did not address the Pioneer factors.
    3   Instead, the court focused on Ledesma Ventures’ lengthy delays in
    4   prosecuting and resolving the litigation.   It further was
    5   apparent, at the time of the hearing, that Ledesma Ventures was
    6   not prepared either to proceed with settlement or to proceed with
    7   the merits of its Civil Rule 60(b)(1) motion.   In fact, Ledesma
    8   Ventures effectively admitted: (1) its principal had been
    9   unavailable to address resolution of the litigation during much
    10   of the previous six months; (2) it wanted to retain new counsel
    11   before moving forward; and (3) it sought either a further
    12   continuance or a discharge of the third order to show cause
    13   without offering any sort of assurance that, for the first time
    14   in the three-year history of the lawsuit, it would diligently and
    15   expeditiously take the steps necessary to move the action forward
    16   towards resolution.
    17        Ledesma Ventures’ appeal brief does not contain any argument
    18   explaining why, on these facts, it was an abuse of discretion for
    19   the court to deny the motion for lack of prosecution, nor are we
    20   obliged to go searching for error.   See Christian Legal Soc'y
    21   Chapter of Univ. of Cal. v. Wu, 
    626 F.3d 483
    , 487–88 (9th Cir.
    22   2010); Brownfield v. City of Yakima, 
    612 F.3d 1140
    , 1149 n.4 (9th
    23   Cir. 2010).   The bankruptcy court had authority to deny Ledesma
    24   Ventures’ motion for lack of prosecution.   See, e.g., TKG Europe,
    25   LP v. Lehman Bros. Holdings, Inc. (In re Cent. European Indus.
    26   Dev. Co.), 
    2005 WL 6960169
    , at *4 (Mem. Dec.) (9th Cir. BAP
    27   Apr. 12, 2005) (upholding bankruptcy court’s denial of abstention
    28   motion for lack of prosecution).
    18
    1                              CONCLUSION
    2        For the reasons set forth above, the bankruptcy court’s
    3   orders dismissing the adversary proceeding and denying Ledesma
    4   Ventures relief from the dismissal are AFFIRMED.
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