SPIRTOS v MORENO, 9855101
U.S. 9th Circuit Court of Appeals
SPIRTOS v MORENO
9855101
In re: BASIL N. SPIRTOS,
Debtor.
No. 98-55101
THELMA V. SPIRTOS, D.C. No.
Appellant, CV-97-03570-JGD
v. OPINION
IRENE MORENO,
Appellee.
Appeal from the United States District Court
for the Central District of California
John G. Davies, District Judge, Presiding
Argued and Submitted
September 16, 1999--Pasadena, California
Filed August 4, 2000
Before: James R. Browning, Alex Kozinski and
Kim McLane Wardlaw, Circuit Judges.
Opinion by Judge Kozinski
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COUNSEL
Michelle Spirtos argued the cause for Appellant. On the briefs
were Jon J. Eardley, Santa Monica, California, and John B.
Spirtos, Kirkpatrick & Lockhart, Washington, D.C.
Ronald A. Cher, Los Angeles, California, argued the cause for
Appellee. With him on the brief was Joseph L. Shalant.
_________________________________________________________________
OPINION
KOZINSKI, Circuit Judge.
In 1983, Irene Moreno won a medical malpractice judg-
ment against Dr. Basil Spirtos. See Moreno v. Beverly Hosp.,
No. C242972 (L.A. Super. Ct. Apr. 18, 1983). Four years
later, Basil declared bankruptcy. Moreno filed three proofs of
claim based on the judgment in Basil's bankruptcy estate.
Basil was granted a discharge in April 1996, one month
before his death.
Following the discharge, the trustee of Basil's estate filed
an objection to Moreno's claims on the ground that they were
duplicative. The bankruptcy court agreed and allowed only
one claim, for the judgment amount plus interest, less the pay-
ments Basil's estate had already made. Thelma Spirtos,
Basil's ex-wife, then objected to Moreno's claim as party in
interest.1 She argued that the judgment was void under the
California statute of duration, which provides that a judgment
becomes unenforceable after ten years. See Cal. Civ. Pro.
Code S 683.020. The ten-year period expired in 1993, after
Basil had filed for bankruptcy but before the claim was
allowed. Because Moreno failed to renew the judgment under
Cal. Civ. Pro. Code S 683.110, Thelma argued, her claim
must be disallowed. See 11 U.S.C. S 502(b)(1) (court shall not
allow claims that are "unenforceable against the debtor and
property of the debtor, under . . . applicable law").
[1] The bankruptcy court overruled Thelma's objection and
the district court affirmed, finding that the automatic stay of
11 U.S.C. S 362(a) precluded Moreno from renewing the
judgment. Moreover, the district court held that 11 U.S.C.
S 108(c) extended the ten-year statute of duration while Basil
remained in bankruptcy, and that Moreno was enjoined by 11
U.S.C. S 524 from filing for renewal once Basil was dis-
charged. Thelma appeals.
We confine our analysis to section 108(c), which provides:
[I]f applicable nonbankruptcy law . . . fixes a period
for commencing or continuing a civil action in a
court other than a bankruptcy court on a claim
against the debtor . . . , then such period does not
expire until . . . 30 days after notice of the termina-
tion or expiration of the stay under section 362 . .. .
On its face, section 108(c) appears to cover our situation. The
California statute of duration is a nonbankruptcy law that
applies to the Moreno judgment. The statute fixes a ten-year
period during which Moreno had to keep the judgment from
expiring by filing for renewal. Under section 108(c), then, the
limitations period does not expire until 30 days after the end
of the automatic stay.
Pursuant to 11 U.S.C. S 362(c)(1), the automatic stay
remains in force with respect to property of the estate "until
such property is no longer property of the estate. " So long as
there are assets in the estate, then, the stay remains in effect,
preventing Moreno from collecting her judgment by attaching
those assets. See 3 Collier on BankruptcyS 362.06(1) (15th
ed.) ("In the case of an act against property of the estate, the
stay continues until the property is no longer property of the
estate."). Thus, the period of duration under Cal. Civ. Pro.
Code S 683.020 will not expire until 30 days after all the
assets in Basil's estate have been finally distributed, an event
that has not yet occurred.
The Second Circuit reached the same conclusion in In re
Morton, 866 F.2d 561 (2d Cir. 1989). Morton concerned the
validity of a bank's judgment lien against a debtor's property.
Like the Moreno judgment, the lien had a ten-year life under
state law. The limitations period expired while the debtor was
in bankruptcy, and the debtor argued that the lien became
unenforceable because the bank had failed to renew it. The
bank countered that section 108(c) preserved the lien beyond
the ten-year period. Relying on the "specific language of the
statute," the court held that the bank had 30 days after termi-
nation of the stay to renew its lien. Id. at 566; accord Rogers
v. Corrosion Prods., Inc., 42 F.3d 292, 297 (5th Cir. 1995) (if
no federal or state law suspends the statute of duration, "a
party must file suit within the thirty-day grace period after the
end of the stay"); Aslanidis v. United States Lines, Inc., 7 F.3d
1067, 1073 (2d Cir. 1993) (section 108(c) "calls for applica-
ble time deadlines to be extended for 30 days after notice of
the termination of a bankruptcy stay, if any such deadline
would have fallen on an earlier date").
In re Hunters Run Ltd. Partnership, 875 F.2d 1425 (9th
Cir. 1989), is entirely consistent. In Hunter's Run, a creditor
recorded a mechanic's lien against a debtor's property. The
property was transferred to Hunters Run, which declared
bankruptcy. Because the creditor failed to enforce its lien
within eight months, as required by state law, Hunters Run
argued the lien was void. We rejected this argument, holding
that section 108(c) extended the period during which the cred-
itor could enforce its lien. See id. at 1428. In so doing, we
found that the "[a]pplicability of section 108(c) in this case
hinges on the applicability of . . . the automatic stay provi-
sions of 11 U.S.C. S 362." Id. at 1427. Thelma relies on this
language to argue that Moreno may not avail herself of sec-
tion 108(c) unless Moreno was barred by the section 362 stay
from renewing her judgment--which Thelma argues Moreno
was not. See Checkers Drive-In Restaurants, Inc. v. Commis-
sioner, 51 F.3d 1078, 1083-84 (D.C. Cir. 1995); In re Larson,
979 F.2d 625, 627 (8th Cir. 1992).
Thelma reads too much into Hunters Run. The case stands
for the proposition that section 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.
In Hunters Run, the creditor was barred from enforcing a lien
against a specific asset of the estate. Here, Moreno is barred
by the automatic stay from collecting on a judgment by
attaching the debtor's assets which have become property of
the estate. It is the creditor's inability to enforce the judgment
for a portion of the ten-year period that keeps the period of
duration open under section 108(c). Whether the automatic
stay also precluded the creditor from renewing the judgment
--an issue we need not decide--is beside the point. Morton
reached the same conclusion, even though it held that section
362 did not bar the creditor from renewing its judgment. See
Morton, 866 F.2d at 564-65; accord Rogers , 42 F.3d at 297
(analyzing 108(c) without regard to whether section 362 stay
barred action against debtor).
The period during which Moreno may renew her judgment
does not expire until 30 days after notice of the termination
or expiration of the stay in Basil's estate. Thelma's contention
that allowance of Moreno's claim violates the Fifth, Tenth
and Eleventh Amendments is without merit.
AFFIRMED.
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FOOTNOTES
1 In addition to being a creditor in Basil's estate, Thelma is involved in
bankruptcy proceedings of her own. She assumed half of the Moreno debt
pursuant to her Marriage Settlement Agreement with Basil, and also
objects to Moreno's claim in her own estate. We reject this contention in
a memorandum disposition filed concurrently herewith. See In re Thelma
V. Spirtos, No. 98-55106.