Trustee Blog

Issue Preclusion in Bankruptcy

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Last Month our Riverside Chapter 7 Trustee Larry Simons spoke at the California Bankruptcy Forum’s seminar on issue preclusion. Mr. Simons drew the 400pm seminar slot on Saturday which was the last seminar of a three day conference. He was paired with a San Diego Judge and another person from Santa Ana, CA.

I attended the seminar and the following are the tips that I gleaned from their presentation:

Issue Preclusion and Claim Preclusion are similar terms but mean different things. When trying to obtain summary judgment in the Bankruptcy Court on issues that were tried in the State Court, there are several elements that must be shown to the Bankruptcy Judge.

Issue Preclusion

State Court issue

Is it the same issue and was it actually litigated

Have to have findings in the State Court and adopted

by the Court. Also have all the elements been adopted.

Privity–Same parties

Assignment still privity

Need a final judgment for issue preclusion

Not final if appealing is pending

Not a judgement if not confirmed

Do not use the State Court Forms for default judgment

— The bankruptcy court wants to know which one of the causes of action was the award on.

— If there are no specific findings– then it is worthless to BK judge then on summary Judgment

–Set the elements out in the judgment so that a potential bankruptcy Judge can see that the issues and the elements are the same.

The State Court Judgment forms are ones where you check boxes, but this does not help a bankruptcy Judge and the matter will have to be Litigated again.

Mr. Simons and the panel gamely presented the information and then the panel decided to adjourn early to the resounding applause of the audience.

Practice Pointer: If you plan to file a summary judgement motion in Bankruptcy Court, do your research and make it a easy as possible for your Bankruptcy Judge.


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