Procedural Posture

Defendant bank filed a motion to dismiss plaintiff Chapter 7 debtors’ complaint, which alleged that the bank violated the automatic stay, 11 U.S.C.S. § 362(a)(3), when it refused to disburse monies owed by the bank for two prepetition demand amounts in which the debtors asserted an exemption.

Table of Contents

Overview

The debtors asserted that they held and owned two prepetition deposit accounts at the bank. When the debtors attempted to access the monies after commencing the Chapter 7 case, the bank placed a hold on the two accounts and sent a letter to the Chapter 7 trustee requesting instructions for payment of the monies for the two bank accounts. The debtors claimed a violation of § 362(a)(3), based solely on the bank’s refusal to disburse the monies in the two accounts directly to the debtors. The court held that the obligations owed by the bank were property of the estate and that claiming an exemption in the accounts did not remove them from the bankruptcy estate. The court held that the Chapter 7 trustee had the right to possession and control of the accounts, and that the debtors did not have standing to assert the violation of the automatic stay alleged in the complaint. The debtors could not assert any of the alleged monetary or equitable claims against the bank for refusing to comply with the debtors’ directions to deliver property of the estate directly to the debtors. Parties’ litigation attorneys California appeal.

Outcome

The court granted the bank’s motion. The debtors were granted leave to file an amended complaint within 20 days of the entry of the court’s order.

Plaintiff software manufacturer filed an amended complaint against defendant information technology advisor, alleging claims for defamation of character and trade libel. The advisor moved to dismiss the complaint.

Overview

A statement that the manufacturer’s product and another manufacturer’s product were the same was not defamatory as the statement was too general, and thus, was non-actionable opinion. The magic quadrant ratings were also non-actionable opinion as the review specifically stated that the ratings were opinions, most of the opinions were based at least in part on facts, and a given vendor’s placement on a chart reflected the advisor’s interpretation and opinion. The court rejected the argument that the opinions implied statements of fact as the alleged defamatory statement could not be read to imply any specific facts that could be proved true or false. The manufacturer was denied leave to amend as it offered no indication of what additional facts it might have pled or theories it might have asserted. The court could discern no way in which additional factual allegations could have placed the alleged defamatory statements outside the protections of the First Amendment.