Hunt, Ortmann, Blasco, Palffy & Rossell, Inc. v. Jim L. Shetakis Distributing Co. (In Re Jim L. Shetakis Distributing Co.) , 401 F. App'x 249 ( 2010 )

FILED
NOT FOR PUBLICATION OCT 27 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re JIM L. SHETAKIS DISTRIBUTING No. 09-15944
CO., dba Shetakis Wholesalers, Inc.,
D.C. No. 2:08-cv-00832-RLH-
Debtor. GWF
_________________
HUNT, ORTMANN, BLASCO, PALFFY MEMORANDUM*
& ROSSELL, INC., a California
corporation,
Appellant,
v.
JIM L. SHETAKIS DISTRIBUTING CO.,
a Nevada corporation, dba Shetakis
Wholesalers, Inc.; et al.,
Appellees.
Appeal from the United States District Court
for the District of Nevada
Roger L. Hunt, Chief District Judge, Presiding
Argued and Submitted October 7, 2010
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: KLEINFELD and GRABER, Circuit Judges, and CARNEY,** District
Judge.
Appellant Hunt, Ortmann, Blasco, Palffy & Rossell, Inc. (“Hunt Ortmann”),
a creditor, appeals the district court’s decision affirming the bankruptcy court’s
grant of summary judgment in an adversary proceeding arising from the re-opened
Chapter 11 bankruptcy case of Appellee Jim L. Shetakis Distributing Co., dba
Shetakis Wholesalers, Inc. (“Shetakis”). In the adversary proceeding, Hunt
Ortmann sought to recover a lease and option to purchase a property that Shetakis,
the debtor, had transferred to Appellee NV Lease Option, LLC (“NVLO”), prior to
the bankruptcy court’s confirmation of the reorganization plan. Hunt Ortmann
sought a declaration that the transfer was void because it was made without the
notice and hearing required by 11 U.S.C. § 363(b)(1) or, alternatively, to set aside
the transfer under 11 U.S.C. § 549.1 We review the bankruptcy court’s grant of
summary judgment de novo and any of its factual findings for clear error. Zurich
Am. Ins. Co. v. Int’l Fibercom, Inc. (In re Int’l Fibercom, Inc.), 503 F.3d 933, 940
(9th Cir. 2007). We affirm.
**
The Honorable Cormac J. Carney, United States District Judge for the
Central District of California, sitting by designation.
1
Unless otherwise noted, all statutory references are to the United States
Bankruptcy Code, 11 U.S.C. §§ 101–1532.
2
The bankruptcy court correctly determined that Shetakis’ transfer of the
lease and option to NVLO was voidable, rather than void. Unauthorized transfers
of property initiated by the debtor are voidable by the trustee under § 549. Such
transfers are not void like transfers of the debtor’s property by creditors or other
third parties. Burkart v. Coleman (In re Tippett), 542 F.3d 684, 691–92 (9th Cir.
2008). The automatic stay provisions of § 362 void transfers of the debtor’s
property by creditors and other third parties in order to protect the debtor from all
collection efforts while it attempts to regain its financial footing. Schwartz v.
United States (In re Schwartz), 954 F.2d 569, 572 (9th Cir. 1992). Such protection
is obviously not necessary for transfers initiated by the debtor itself. See Tippett,
542 F.3d at 691.
The bankruptcy court also correctly determined that Hunt Ortmann’s claim
to avoid the transfer of the lease and option under § 549 was barred by the two-
year statute of limitations. It was undisputed that Shetakis transferred the lease and
option to NVLO in March 2001 and that Shetakis’ bankruptcy case was closed in
July 2002. Section 549 required Hunt Ortmann to assert its claim to avoid the
transfer within two years of the transfer or before the close of the bankruptcy case,
whichever was earlier. See 11 U.S.C. § 549(d). Hunt Ortmann, however, did not
bring its claim until July 2007. This was several years too late.
3
Finally, the bankruptcy court correctly concluded that the two-year statute of
limitations was not equitably tolled until November 2006, when Hunt Ortmann
claimed that it finally knew enough about the transfer to NVLO and its
implications to bring its adversary proceeding. It was undisputed that by
November 2004 Hunt Ortmann knew about Shetakis’ bankruptcy and Shetakis’
transfer of the lease and option to NVLO, because its own lawyer asked questions
about these issues in a deposition of Shetakis’ Chief Financial Officer. Despite this
knowledge, Hunt Ortmann did nothing to investigate the transfer for almost three
years. A party cannot invoke equitable tolling when it fails to investigate its claim
in a reasonable, diligent manner. Mangum v. Action Collection Serv., Inc., 575
F.3d 935, 946 (9th Cir. 2009). Had Hunt Ortmann acted with reasonable diligence
in November 2004, it would have discovered that Shetakis improperly transferred
the lease and option without notifying the bankruptcy court. The two-year statute
of limitations is not tolled beyond November 2004, so the district court properly
determined that Hunt Ortmann’s July 2007 action to set aside the transfer is time-
barred.
AFFIRMED.
4