B3 Capital Venture v. Crystal Waterfalls ( 2019 )


Menu:
  •                            NOT FOR PUBLICATION                           FILED
    UNITED STATES COURT OF APPEALS                        APR 25 2019
    MOLLY C. DWYER, CLERK
    U.S. COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    In re: CRYSTAL WATERFALLS, LLC,                 No.    17-56759
    DBA Park Inn By Radisson,
    D.C. No. 2:17-cv-02730-JAK
    Debtor,
    ______________________________
    MEMORANDUM*
    B3 CAPITAL VENTURE, LLC,
    Plaintiff-Appellant,
    v.
    CRYSTAL WATERFALLS, LLC, DBA
    Park Inn By Radisson,
    Defendant-Appellee.
    Appeal from the United States District Court
    for the Central District of California
    John A. Kronstadt, District Judge, Presiding
    Argued and Submitted March 7, 2019
    Pasadena, California
    Before: THOMAS, Chief Circuit Judge, and GILMAN** and NGUYEN, Circuit
    Judges.
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by Ninth Circuit Rule 36-3.
    **
    The Honorable Ronald Lee Gilman, United States Circuit Judge for
    the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
    Creditor B3 Capital Venture, LLC appeals from the district court’s judgment
    affirming the bankruptcy court’s order granting in part and denying in part B3’s
    oversecured claim against the estate of debtor Crystal Waterfalls, LLC. We have
    jurisdiction under 
    28 U.S.C. § 158
    (d), and we affirm.
    We review the bankruptcy court’s factual findings for clear error and its
    determinations of law, including the disallowance of a claim, de novo. In re
    Thorpe Insulation Co., 
    671 F.3d 1011
    , 1019–20 (9th Cir. 2012). We may affirm
    the district court’s order affirming the bankruptcy court “on any ground finding
    support in the record.” In re Crystal Props., Ltd., 
    268 F.3d 743
    , 755 (9th Cir.
    2001) (quoting Laboa v. Calderon, 
    224 F.3d 972
    , 981 n.7 (9th Cir. 2000)). “We
    will not disturb a bankruptcy court’s award of attorneys’ fees unless the
    bankruptcy court abused its discretion or erroneously applied the law.” In re
    Hoopai, 
    581 F.3d 1090
    , 1095 (9th Cir. 2009) (quoting In re Kord Enters. II, 
    139 F.3d 684
    , 686 (9th Cir. 1998)).
    1. The bankruptcy court did not err by denying B3’s claim for default
    interest prior to the date that B3 assumed the loan. First Commercial Bank
    (“FCB”) waived any right to default interest by accepting late payments without
    objection, see 
    Cal. Civ. Proc. Code § 2076
    ; Talbot v. Gadia, 
    267 P.2d 436
    , 440
    (Cal. Ct. App. 1954), and by providing Crystal Waterfalls an estimated payoff
    2
    amount that was inconsistent with an intent to impose default interest, see Crystal
    Props., 
    268 F.3d at 753
    .
    The loan agreement’s anti-waiver clause did not vitiate FCB’s waiver as to
    past payments; it merely preserved any right that FCB had to collect default
    interest in the future. See Bettelheim v. Hagstrom Food Stores, Inc., 
    249 P.2d 301
    ,
    305 (Cal. Ct. App. 1952). Nor is B3 a holder in due course because it took the note
    with “notice that the instrument [was] overdue,” 
    Cal. Com. Code §§ 3302
    (a)(2)(C),
    3304(b)(3). Next, the bankruptcy court did not abuse its discretion by allowing
    Crystal Waterfalls the opportunity to supplement its reply brief on account of B3’s
    late opposition brief. Finally, the court did not violate B3’s due process rights by
    rejecting as untimely evidence that B3 should have submitted prior to its motion
    for reconsideration. See Kona Enters., Inc. v. Estate of Bishop, 
    229 F.3d 877
    , 890
    (9th Cir. 2000).
    2. The bankruptcy court also did not err in finding that B3 is not entitled to
    post-2016 attorney’s fees. B3 filed an untimely amended proof of claim on
    January 16, 2017, nine days before the hearing, in which it claimed fees only
    through 2016. The bankruptcy court denied B3’s request to amend its proof of
    claim for a second time based on the court’s reasonable finding that the cost of
    post-hearing proceedings would prejudice the estate and other creditors. This
    ruling was not an abuse of discretion. See In re Roberts Farms Inc., 
    980 F.2d
                                            3
    1248, 1251 (9th Cir. 1992) (“The crucial inquiry is whether the opposing party
    would be unduly prejudiced by the amendment.”).
    AFFIRMED.
    4