Westhoff Vertriebsges mbH v. Berg
- Proceeding
- district
- Area
- civil
Analysis
The court considered Plaintiff Westhoff's motion to lift the automatic stay imposed due to Defendants' bankruptcy filings. The court granted the motion to lift the stay and ordered corporate defendant BlueSkye to retain new counsel within 45 days or face default judgment.
| What the court decided | The model |
|---|---|
Motion to lift stay granted“Accordingly, the Court GRANTS the Motion. (/d.)” | agree with court The order recites that the bankruptcy court, which has exclusive jurisdiction over stay relief under 11 U.S.C. § 362, has already granted relief from the stay for specific causes of action. The district court's decision to lift the stay is consistent with the bankruptcy court's order and the procedural posture described. |
Order requiring BlueSkye to retain counsel or face default“BlueSkye is hereby ORDERED to retain new counsel within forty-five (45) days of the date of this order, or risk default judgment.” | agree with court The court correctly identifies that corporations must appear through counsel. The order to retain counsel within a specific timeframe, with a warning of default, is a standard procedural mechanism to ensure the case can proceed and is supported by the cited Ninth Circuit authority regarding default judgments for failure to comply with such orders. |
The order itself: sound — The order is procedurally sound. It correctly relies on the bankruptcy court's prior order to lift the stay. It correctly applies the well-established rule that corporations must be represented by counsel and cites appropriate Ninth Circuit precedent for the consequence of failing to do so (default judgment). The reasoning is concise but sufficient for the procedural actions taken.
Opinion
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 WESTHOFF VERTRIESBGSGES Case No. 22-cv-0938-BAS-SBC MBH, 12 ORDER LIFTING STAY Plaintiff, 13 v. (ECF No. 88) 14 CHRISTOPHER BERG; BLUESKYE 15 CREATIVE, INC.; and DOES 1–10, 16 Defendants. 17 18 This Court entered an automatic stay of the instant proceeding nearly nine months 19 ago after Defendants Berg and BlueSkye filed for bankruptcy. (ECF No. 84.) The Court 20 also permitted BlueSkye’s counsel, Gordon Rees Scully Mansukhani, LLP (“GRSM”) to 21 withdraw as counsel for Defendants, leaving BlueSkye, a corporation, without 22 representation in the stayed case. (Id.) Plaintiff now informs the Court that the bankruptcy 23 court has granted “relief from stay and for reconsideration as to the accounting, fraud and 24 breach of fiduciary duty causes of action, along with the entirety of Plaintiff’s motion for 25 attorneys’ fees and costs.” (ECF No. 88 at 7.) Accordingly, Plaintiff Westhoff now moves 26 to lift the stay in this action. (Id.) 27 The bankruptcy court in the related proceeding has already granted Plaintiff 28 Westhoff’s motion for stay relief and to proceed to final judgment in this Court with respect 1 ||to the accounting, fraud, and breach of fiduciary duty causes of action. (/d., Ex. A.) 2 || Accordingly, the Court GRANTS the Motion. (/d.) 3 However, BlueSkye cannot proceed in this case without representation. See CivLR 4 83.3Q); see also CE Res., Inc. v. Magellan Grp., LLC, No. 2:08-CV-02999MCEKJM, 2009 5 || WL 3367489, at *2 (E.D. Cal. Oct. 14, 2009) (“It is a longstanding rule that corporations 6 || and other incorporated associations must appear in court through an attorney.” (citing Jn re 7 W. Airlines, 40 F.3d 1058, 1059 (9th Cir. 1994)). BlueSkye is hereby ORDERED to 8 ||retain new counsel within forty-five (45) days of the date of this order, or risk default 9 ||judgment. See United States v. High Country Broad. Co., 3 F.3d 1244, 1245 (9th Cir. 10 || 1993) (affirming a default judgment against a corporate defendant that failed to comply 11 |} with a court order requiring it to retain new counsel). 12 Within fourteen days of the date BlueSkye’s counsel has entered an appearance, 13 ||parties are ORDERED to contact the Magistrate Judge’s chambers to schedule both a 14 settlement conference and case management conference. BlueSkye is warned that if it 15 || does not retain counsel within the time period required by the Court, the Court may 16 place BlueSkye in default. 17 IT IS SO ORDERED. 18 19 || DATED: December 13, 2024 ( itl A (Liphan 6 20 United States District Judge 21 22 23 24 25 26 27 28 4.