Summary
The Ninth Circuit held that a judgment creditor's one-year period to execute on an ORAP (Order for Appearance and Examination) lien under California law is tolled by 11 U.S.C. § 108(c) during the bankruptcy automatic stay. The court reasoned that executing on the lien constitutes "continuing a civil action" against the debtor, as the lien is supplemental to the original judgment and enforcement was barred by the stay under § 362(a). This extends the panel's prior precedent in *Spirtos* (judgment renewal) and *Hunters Run* (mechanic's lien enforcement) to ORAP liens. The dissent argued that an ORAP lien is merely a post-judgment enforcement tool, not a continuation of the civil action, and that § 108(c) does not apply to priority disputes.
Topics
Practice areas
Questions Presented
- Whether an ORAP lien falls within the scope of 11 U.S.C. § 108(c)'s tolling provision, i.e., whether the period in which a creditor may execute on an ORAP lien constitutes 'commencing or continuing a civil action' under the tolling provision.
Holdings
- The period in which a creditor may enforce a judgment by executing on a lien constitutes the continuation of the original action that resulted in the judgment and is thus tolled during the automatic stay.
Key quotations
“We now expressly adopt it and hold that the period in which a creditor may enforce a judgment by executing on a lien constitutes the continuation of the original action that resulted in the judgment.” (at 1100-14)
“[S]ection 108(c) extends the limitations period so long as the creditor is barred by the automatic stay from enforcing its judgment against the property of the estate.” (at 1100-13)
Factual background
Good obtained two money judgments against Swintek, assigned to her, and renewed them. She obtained an ORAP in June 2010, served it, creating a one-year lien on the debtor's personal property under California law. The debtor filed a Chapter 7 bankruptcy petition in August 2010. Good filed proofs of claim and later commenced an adversary proceeding seeking a declaration that her ORAP lien had priority superior to the trustee. The bankruptcy court granted summary judgment to the trustee, holding that the ORAP lien expired because Good failed to renew it under state law and that § 108(c) did not toll the period. The BAP reversed.
Procedural history
The bankruptcy court granted summary judgment in favor of the trustee, holding that the tolling provision does not apply to ORAP liens. The BAP reversed, concluding that In re Spirtos controls. The trustee appealed to the Ninth Circuit.
Remand instructions
Remanded for further proceedings consistent with the opinion.