Johnson v. Albertsons Cos. (In re Johnson)

1

In re: BRENDA M. JOHNSON, Debtor.

BRENDA M. JOHNSON, Appellant, v. ALBERTSONS COMPANIES, INC.; AMAZON.COM SERVICES, LLC; EQUIFAX INFORMATION SERVICES, LLC; PUYALLUP TRIBAL GAMING ENTERPRISES, INC. dba EMERALD QUEEN CASINO & HOTEL; THE TRAVELERS INDEMITY COMPANY; STATE OF WASHINGTON, Appellees.

Adv. No. 3:23-ap-04031-BDL

Nos. WW-23-1190-BSG, WW-23-1195-BSG, WW-23-1199-BSG

Bk. No. 3:15-bk-41795-BDL

United States Bankruptcy Appellate Panel of the Ninth Circuit

September 9, 2024

NOT FOR PUBLICATION

Appeal from the United States Bankruptcy Court for the Western District of Washington Brian D. Lynch, Bankruptcy Judge Presiding

Before: BRAND, SPRAKER, and GAN, Bankruptcy Judges.

MEMORANDUM ^[*]

INTRODUCTION

Appellant Brenda Johnson^[1]appeals several orders from the bankruptcy court: orders denying and granting requests to shorten time an order dismissing her complaint with leave to amend; an order to show cause why she should not be declared a vexatious litigant; an order dismissing her later amended complaint with prejudice and dismissing her adversary proceeding; and an order declaring her a vexatious litigant and imposing filing restrictions. Ms. Johnson has not articulated any substantive argument for how the bankruptcy court erred or abused its discretion in these decisions. Our review of the record reveals none, and we AFFIRM.

FACTS

Ms. Johnson filed a chapter 7^[2] bankruptcy case on April 17, 2015. She received a discharge and the case was closed.

Eight years later, Ms. Johnson, pro se, filed an adversary complaint against multiple defendants seeking damages for contempt for their alleged violation of the discharge injunction. Her Second Amended Complaint is one of the two operative complaints at issue. In support, Ms. Johnson submitted documents filed in other tribunals involving cases between her and many of the same defendants named in the adversary action, including filings from a 1999 family law case involving her former husband.

Of the 50 named defendants, several responded by filing motions to dismiss under Civil Rule 12(b)(6), including Albertson's Companies, Inc. ("Albertsons"), Amazon.com Services LLC ("Amazon"), Equifax Information Services, LLC ("Equifax"), Puyallup Tribal Gaming Enterprises, Inc. dba Emerald Queen Casino & Hotel ("Emerald Queen"), and the State of Washington. They argued that the Second Amended Complaint failed to state a claim for contempt related to the discharge injunction.^[3] Precisely, they argued that the Second Amended Complaint did not specify the nature of the alleged violation(s) or set forth any facts showing what any of the defendants had done to violate the discharge order. At best, they argued, it contested some wage garnishments under a domestic support order that were not subject to the discharge injunction.

Meanwhile, Ms. Johnson requested that a default be entered against all defendants. Her position appeared to be that the defendants were required to file an "answer" and that motions to dismiss were not a proper response.

The bankruptcy court granted the motions to dismiss the Second Amended Complaint with leave to amend ("First Dismissal Order").^[4] The court warned Ms. Johnson that if her amended complaint did not assert a factual basis for a contempt claim against the defendants, the adversary action would be dismissed. The court also told Ms. Johnson that it was issuing an order to show cause why she should not be declared a vexatious litigant.

On November 11, 2023, Ms. Johnson filed her Third Amended Complaint, the other operative complaint at issue. It contained more detail, but it added no specific facts to support a claim against any of the defendants for violation of the discharge injunction.

The bankruptcy court then entered an order to show cause ("OSC") why Ms. Johnson should not be declared a vexatious litigant. The court noted that the nine cases she had filed in the district and appellate courts since her discharge in 2015 contained many of the same claims she was attempting to litigate in her adversary action against nearly all of the same defendants. A district court case dismissed with prejudice in 2020 had raised the same claims, and Ms. Johnson had recently sought to reopen that case so she could file a contempt action. Ms. Johnson filed a response to the OSC. It did not address the court's concerns but rather alleged misconduct by the court.

Ms. Johnson appealed the order denying the State of Washington's motion for order shortening time, the First Dismissal Order, and the OSC ("Appeal 1190").

Amazon, Albertsons, Emerald Queen, and Equifax moved to dismiss the Third Amended Complaint with prejudice under Civil Rule 12(b)(6), arguing that it too failed to state a claim for contempt for violation of the discharge injunction against any of the defendants. The dismissal motions filed by Amazon, Albertsons, and Emerald Queen were set for December 13, 2023, the continued hearing date for the State of Washington's earlier motion to dismiss. The bankruptcy court granted Emerald Queen's motion for order shortening time so that its dismissal motion could be heard with the others. Ms. Johnson appealed Emerald Queen's order shortening time and the order denying the State of Washington's motion for order shortening time that was already part of Appeal 1190 ("Appeal 1195").

At the joint hearing on the motions to dismiss the Third Amended Complaint and the OSC, defendants argued that in her 84 filings in the adversary proceeding, Ms. Johnson had not made any allegations relating to a violation of the discharge injunction by the defendants. The court independently noted that none of the defendants, other than perhaps Ms. Johnson's former husband, was even a creditor in her 2015 bankruptcy. Thus, in the court's opinion, it did not appear that any of them could have violated the discharge injunction. As for the domestic support obligation debt, the court explained to Ms. Johnson that the discharge did not eliminate that debt nor would the discharge injunction apply to it.

The bankruptcy court granted the motions to dismiss the Third Amended Complaint with prejudice ("Final Dismissal Order"). It found that Ms. Johnson again failed to state factual allegations which would support a claim for contempt for violation of the discharge injunction. Under the circumstances, the court found that granting leave for further amendment would be futile. Additionally, the court ruled that Ms. Johnson was a vexatious litigant given her history of repetitive, bad faith, and harassing litigation over the same claims against the same defendants in other tribunals and now in the bankruptcy court, which lacked jurisdiction ("Vexatious Litigant Order"). Ms. Johnson appealed the Final Dismissal Order and the Vexatious Litigant Order ("Appeal 1199").

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and 157(b)(2)(A). We have jurisdiction under 28 U.S.C. § 158.

ISSUES

1. Did the bankruptcy court abuse its discretion in denying the State of Washington's motion for order shortening time?

2. Did the bankruptcy court err in granting the motions to dismiss the Second Amended Complaint with leave to amend and entering the First Dismissal Order?

3. Did the bankruptcy court abuse its discretion in entering the OSC?

4. Did the bankruptcy court abuse its discretion in granting Emerald Queen's motion for order shortening time?

5. Did the bankruptcy court err in granting the motions to dismiss the Third Amended Complaint with prejudice and entering the Final Dismissal Order?

6. Did the bankruptcy court abuse its discretion in entering the Vexatious Litigant Order?

STANDARDS OF REVIEW

Whether a party has standing is a question of law we review de novo. All. United Ins. Co. v. Krasnoff (In re Venegas), 623 B.R. 555, 560 (9th Cir. BAP 2020). We review de novo the bankruptcy court's grant of a Civil Rule 12(b)(6) motion to dismiss. Calise v. Meta Platforms, Inc., 103 F.4th 732, 738 (9th Cir. 2024). De novo review means that we review the matter anew, as if the bankruptcy court had not previously decided it. Francis v. Wallace (In re Francis), 505 B.R. 914, 917 (9th Cir. BAP 2014).

We review a dismissal without leave to amend and with prejudice for abuse of discretion. Tracht Gut, LLC v. Cnty. of L.A. (In re Tracht Gut, LLC), 503 B.R. 804, 810 (9th Cir. BAP 2014), aff'd, 836 F.3d 1146 (9th Cir. 2016). We review the bankruptcy court's procedural rulings for abuse of discretion. Phillips v. Ornoski, 673 F.3d 1168, 1179 (9th Cir. 2012). We review for an abuse of discretion a bankruptcy court's decision to issue pre-filing orders. Koshkalda v. Schoenmann (In re Koshkalda), 622 B.R. 749, 757 (9th Cir. BAP 2020) (citing Ringgold-Lockhart v. Cnty. of L.A., 761 F.3d 1057, 1062 (9th Cir. 2014); Molski v. Evergreen Dynasty Corp., 500 F.3d 1047, 1056 (9th Cir. 2007)). A bankruptcy court abuses its discretion if it applies an incorrect legal standard, misapplies the correct legal standard, or makes factual findings that are illogical, implausible, or not supported by the record. United States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en banc).

DISCUSSION

A. Appeal 1190

Ms. Johnson appeals three orders in this appeal. The first is the court's denial of the State of Washington's motion for order shortening time.

Contrary to some appellees' argument, this interlocutory order became final and appealable once the Final Dismissal Order was entered. See Hall v. City of L.A., 697 F.3d 1059, 1070-71 (9th Cir. 2012) (noting general rule that interlocutory rulings merge into the final judgment and are within the appellate court's jurisdiction to review on appeal from that judgment).

Ms Johnson has failed to establish that she has both ...