In re Ayers Bath (U.S.A.), Co.

1

In re: AYERS BATH (U.S.A.), CO., LTD., Debtor.

No. 2:14-cv-00188-SVW-RZ

Bankruptcy No. 2:13-bk-17409-RK

United States Bankruptcy Court, C.D. California, Los Angeles Division

September 19, 2022

Chapter 7

NOTICE OF SUBMISSION OF MATTER BASED ON REPORT AND RECOMMENDATION OF UNITED STATES BANKRUPTCY COURT TO THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA ON THE RENEWED MOTION OF FOREMOST GROUPS, INC., TO AMEND JUDGMENT OF THE BANKRUPTCY COURT TO ADD TANGSHAN AYERS BATH EQUIPMENT CO., LTD. AS A JUDGMENT DEBTOR PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 9033, AND BY ANALOGY RULE L.R. 72-3.5 OF THE LOCAL RULES OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA AND ORDER

TO THE HONORABLE STEPHEN V. WILSON, UNITED STATES DISTRICT JUDGE, FOREMOST GROUPS, INC., AND TANGSHAN AYERS BATH EQUIPMENT CO., LTD., THE PARTIES TO THE CONTESTED MATTER OF FOREMOST GROUPS, INC.'S RENEWED MOTION TO AMEND JUDGMENT, AND THEIR COUNSEL OF RECORD:

ROBERT KWAN, UNITED STATES BANKRUPTCY JUDGE

Pursuant to Federal Rule of Bankruptcy Procedure 9033, and by analogy Rule L.R. 72-3.5 of the Local Rules of the United States District Court for the Central District of California, the undersigned United States Bankruptcy Judge on behalf of the United States Bankruptcy Court for the Central District of California hereby makes this order submitting the matter of the renewed motion of Foremost Groups, Inc. ("Foremost"), to amend judgment of the bankruptcy court to add Tangshan Ayers Bath Equipment Co., Ltd. ("Tangshan Ayers"), as an additional judgment debtor.

The undersigned United States Bankruptcy Judge issued a report and recommendation on the matter, which was filed and entered in the bankruptcy court on September 22, 2021. Bankruptcy Case Docket No. 271. The report and recommendation was served on the parties on September 22, 2021. Id.^[1] The 14-day deadline to file objections to the report and recommendation under Federal Rule of Bankruptcy Procedure 9033 was October 6, 2021. This deadline was extended to October 20, 2021, upon Foremost's motion filed on September 29, 2021, and order thereon of the bankruptcy court entered later that day. Bankruptcy Case Docket Nos. 272 and 274. On October 20, 2021, Foremost filed its objection to the report and recommendation. Bankruptcy Case Docket No. 277. On November 3, 2021, Tangshan Ayers filed its response to Foremost's objection. Bankruptcy Case Docket No. 278. The report and recommendation was referred to the United States District Court

On August 12, 2022, the District Court issued and entered an order referring the matter back to the bankruptcy court directing that the bankruptcy court address Foremost's objections and Tangshan Ayers's response thereto and submit its response to the District Court. Bankruptcy Case Docket No. 281. This further referral order stated that the bankruptcy court issued a report and recommendation, that plaintiff filed objections to it with the bankruptcy court, to which defendant responded, but

"[H]owever, the bankruptcy court never issued any response or revisions to the recommendation in light of Plaintiff's objection." Further Referral Order issued Aug. 12, 2022, Bankruptcy Case Docket No. 281.

Following the District Court's further referral order docketed by the bankruptcy court in this case on August 16, 2022, the undersigned United States Bankruptcy Judge issued an order entered on August 18, 2022 authorizing the parties to file optional supplemental briefs in response to the Foremost's objections and Tangshan Ayers's response thereto on or before September 9, 2022. Bankruptcy Case Docket No. 282. This supplemental briefing order stated that in carrying out its responsibilities to the District Court pursuant to Federal Rule of Bankruptcy Procedure 9033, the bankruptcy court stated that it believes it may be helpful to have such supplemental briefing in case there have been recent legal developments that may relate to the issues in this contested matter since Foremost filed its objections on October 20, 2021 and Tangshan Ayers filed its response thereto on November 3, 2021. Id. On September 9, 2022, Tangshan Ayers filed its brief in response to the bankruptcy court's order for supplemental briefing. Bankruptcy Case Docket No. 285. Foremost did not file a brief.

Given the lapse of time since the bankruptcy court issued its report and recommendation and this notice of submittal of the report and recommendation after considering objections, the bankruptcy court provides the following explanation for not issuing a response to the report and recommendation in light of plaintiff's objections as noted in the Further Referral Order, the undersigned did not have the understanding that the bankruptcy court needed to respond to the objections when the bankruptcy court referred the report and recommendation to the District Court pursuant to Federal Rule of Bankruptcy Procedure 9033 because the Federal Rules of Civil Procedure, the Federal Rules of Bankruptcy Procedure and the local rules of the District Court and the bankruptcy court do not explicitly provide for the bankruptcy court to issue a response to objections to its report and recommendation under Federal Rule of Bankruptcy Procedure 9033.

Before the undersigned issued the report and recommendation and ordered it transmitted to the District Court after being entered on the docket of the bankruptcy court on September 22, 2021, the undersigned researched whether the Federal Rules of Civil Procedure, the Federal Rules of Bankruptcy Procedure, the Local Rules of the United States District Court for the Central District of California and the Local Bankruptcy Rules explicitly addressed the procedures for the responsibilities of a bankruptcy judge and a district judge after the bankruptcy judge issues a report and recommendation under Federal Rule of Bankruptcy Procedure 9033 and did not find any such procedures.

Chapter IV of the Local Rules of the United States District Court for the Central District of California sets forth the local rules governing bankruptcy appeals, cases and proceedings before the District Court, but none of the rules in Chapter IV pertaining to bankruptcy cases specifically addresses a report and recommendation of a bankruptcy judge submitted to the District Court pursuant to Federal Rule of Bankruptcy Procedure 9033.^[2] That is, the local District Court rules do not explicitly address the procedures for the responsibilities of a bankruptcy judge and a district judge after the bankruptcy judge issues a report and recommendation under Federal Rule of Bankruptcy Procedure 9033.

The applicable Federal Rule of Bankruptcy Procedure, Rule 9033, and the Local Bankruptcy Rules also do not explicitly address the procedures for the responsibilities of a bankruptcy judge and a district judge after the bankruptcy judge issues a report and recommendation under Rule 9033. Federal Rule of Bankruptcy Procedure 9033(b) provides:

(b) Objections; Time for Filing: Within 14 days after being served with a copy of the proposed findings of fact and conclusions of law [of the bankruptcy judge] a party may serve and file with the clerk written objections which identify the specific proposed findings or conclusions objected to and state the grounds for such objection. A party objecting to the bankruptcy judge's proposed findings or conclusions shall arrange promptly for the transcription of the record, or such portions of it as all parties may agree upon or the bankruptcy judge deems sufficient, unless the district judge otherwise direct.

Federal Rule of Bankruptcy Procedure 9033(d) provides:

(d) Standard of Review: The district judge shall make a de novo review upon the record or, after additional evidence, of any portion of the bankruptcy judge's findings of fact or conclusions of law to which specific objections has been made in accordance with the rule. The district judge may accept, reject, or modify the proposed findings of fact or conclusions of law, receive further evidence, or recommit the matter to the bankruptcy judge with instructions.

None of these or other subsections of Federal Rule of Bankruptcy Procedure explicitly address the procedures for the responsibilities of a bankruptcy judge and a district judge after the bankruptcy judge issues a report and recommendation under Rule 9033. Likewise, the Local Bankruptcy Rules do not explicitly address the procedures for the responsibilities of a bankruptcy judge and a district judge after the bankruptcy judge issues a report and recommendation under Federal Rule of Bankruptcy Procedure 9033 as there is no provision in the Local Bankruptcy Rules relating to Federal Rule of Bankruptcy Procedure 9033 governing the submission of proposed findings of fact and conclusions of a bankruptcy judge for review by a district judge, which is analogous to Federal Rule of Civil Procedure 72 governing the submission of a recommended disposition of a dispositive matter, including proposed findings of fact, of a magistrate judge for review by a district judge.

However, the local District Court rules prescribe specific procedures for the responsibilities of a magistrate judge and a district judge after the magistrate judge issues a report and recommendation on a dispositive matter in L.R. 72-3 of the Local Rules of the United States District Court for the Central District of California, which implements Federal Rule of Civil Procedure 72. L.R. 72-3.5 provides:

L.R. 72-3.5 Determination of Objections by District Judge. If no objections are filed within the time allowed, the Magistrate Judge shall submit the matter to the District Judge on the basis of the original report. If objections are timely filed, the Magistrate Judge may

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