Christina Roth v. Brian Budsberg

FILED
NOT FOR PUBLICATION MAY 04 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: CHRISTINA ROTH, No. 09-60027
Debtor, BAP No. WW-08-1292-HMoJu
WILLIAM J. HAGLER, MEMORANDUM*
Appellant,
v.
BRIAN L. BUDSBERG; JANE DOE
BUDSBERG,
Appellees.
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Hollowell, Montali, and Glover, Bankruptcy Judges, Presiding
Submitted May 2, 2011**
Seattle, Washington
Before: SCHROEDER, McKEOWN, and CALLAHAN, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
William Hagler appeals the Bankruptcy Appellate Panel’s (“BAP”) decision
affirming the Bankruptcy Court’s grant of summary judgment in his 11 U.S.C.
§ 332(b) action alleging that Brian Budsberg, as trustee of Debtor Christina Roth’s
bankruptcy estate, negligently failed to secure assets for the estate. We have
jurisdiction under 28 U.S.C. § 158(d)(1) and we affirm.
We review de novo decisions of the BAP and Bankruptcy Court granting
summary judgment. See Gill v. Stern (In re Stern), 345 F.3d 1036, 1040 (9th Cir.
2003). We review for abuse of discretion a bankruptcy court’s decision to grant a
motion for reconsideration. See Arrow Elecs., Inc. v. Justus (In re Kaypro), 218
F.3d 1070, 1073 (9th Cir. 2000).
Judge Glover’s decision to reconsider Judge Snyder’s denial of summary
judgment was not an abuse of discretion. Denial of summary judgment is
“generally interlocutory and [thus] subject to reconsideration by the court at any
time.” Preaseau v. Prudential Ins. Co. of Am., 591 F.2d 74, 79-80 (9th Cir. 1979)
(internal quotation marks omitted). When one federal judge denies a motion for
summary judgment and the case is transferred to another judge, the second judge
has discretion to revisit the prior judge’s ruling. See Castner v. First Nat’l Bank,
278 F.2d 376, 380 (9th Cir. 1960). Judge Snyder denied summary judgment
without prejudice, noting that he was not familiar with the Washington statute of
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limitations, and that he was open to additional briefing on that point. It was thus
not an abuse of discretion for Judge Glover, who ruled as a matter of law, to
reconsider Judge Snyder’s order. See Watson v. Shandell (In re Watson), 192 B.R.
739, 750 (B.A.P. 9th Cir. 1996) (noting that manifest error of law is an appropriate
ground for reconsideration).
We agree with the BAP that Hagler’s complaint was untimely and that
tolling under Washington’s discovery doctrine is inapplicable as a matter of law.
See Ernst & Young v. Matsumoto (In re United Insurance Management, Inc.), 14
F.3d 1380, 1385 (9th Cir. 1994) (noting that although tolling of the statute of
limitations is generally a factual inquiry, “when [the] application of equitable
tolling turns on plaintiff’s diligence in discovering a cause of action, courts may
hold, as a matter of law, that the doctrine does not apply”). Hagler’s claim is based
on 11 U.S.C. § 322(b). Because § 322(b) does not have its own limitations period,
we look to the most analogous state cause of action. See Briley v. California, 564
F.2d 849, 854 (9th Cir. 1977). Here, the most analogous cause of action, Wash.
Rev. Code § 4.16.080, has a three-year statute of limitations.
The latest possible date that Hagler’s cause of action arguably accrued was
March 15, 2004—the date the Bankruptcy Court denied Budsberg’s motion to
reopen the bankruptcy case, which effectively precluded the asset from ever being
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part of the bankruptcy estate. Under Washington law, Hagler’s complaint needed
to be filed by March 14, 2007—three years after the Bankruptcy Court denied the
motion. Hagler, however, did not file his complaint until almost nine months later
on December 31, 2007.
Although Washington follows the discovery doctrine, which tolls the statute
of limitations when a plaintiff could not have reasonably known about the facts
giving rise to the cause of action, Allen v. State, 826 P.2d 200, 203 (Wash. 1992),
the doctrine does not apply here because Hagler failed to establish that he
exercised due diligence in pursuing his rights. “The general rule in Washington is
that when a plaintiff is placed on notice by some appreciable harm occasioned by
another’s wrongful conduct, the plaintiff must make further diligent inquiry to
ascertain the scope of actual harm. The plaintiff is charged with what a reasonable
inquiry would have discovered.” Green v. A.P.C., 960 P.2d 912, 916 (Wash.
1998).
The record demonstrates that Hagler and his attorney knew that the asset was
about to be distributed and that Budsberg’s motion to reopen was pending. Yet
Hagler did nothing to further pursue his rights and instead waited to investigate
until the debtor’s uncle told him in January 2005 that the asset had been
distributed. Hagler’s investigation at that time, which amounted to a simple
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internet search, revealed that the motion to reopen had been denied, and thus the
asset had been effectively lost, some nine months earlier. Failure to diligently
pursue one’s rights does not toll the statute of limitations. Hagler’s complaint was
untimely and therefore barred by the statute of limitations.
AFFIRMED.
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