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In re Larry Cossio Dba Cossio Insurance Agency and Marcela Cossio

filed: January 24, 1994.

IN RE LARRY COSSIO DBA COSSIO INSURANCE AGENCY AND MARCELA COSSIO, DEBTORS. LARRY COSSIO DBA COSSIO INSURANCE AGENCY, APPELLANT,
v.
CHRISTOPHER W. CATE, APPELLEE.



Appeal from the United States Bankruptcy Court for the Southern District of California. BK No. 91-12067-A7, Adv. No. 92-90042. Honorable Louise DeCarl Adler, Bankruptcy Judge, Presiding

Before: Volinn, Ollason, and Ashland, Bankruptcy Judges.

Author: Volinn

VOLINN, Bankruptcy Judge:

The debtor moved to vacate a default judgment of nondischargeability and dismiss the underlying complaint based on defective service of process. At issue was whether the debtor's attorney was served with a copy of the summons and complaint as required by Fed.R.Bankr.P. 7004(b)(9), which provides for service on the debtor by mailing copies of the summons and complaint to the debtor and to his attorney. The trial court found adequate service to have been effected and denied the motion. For the reasons set forth below, we AFFIRM.

FACTS AND PROCEEDINGS BELOW

Appellants are debtors Larry Cossio, dba Cossio Insurance Agency, and Marcela Cossio (Cossio). The Notice of Commencement of Case ("the case commencement notice") issued by the clerk of the bankruptcy court states Cossio's attorney to be:

John D. Rittenhouse

Karp & Richardson

110 West "C" St., Suite 1811

San Diego, California 92101-3992

According to Rittenhouse, the above suite number is incorrect; his proper mailing address when the case was filed was Suite 1015 in care of the firm of Karp & Richardson at the same street address.*fn1 Rittenhouse left Karp & Richardson in December of 1991. On January 6, 1992, he opened his own practice at a new address on "B" Street. On January 23, 1992, Rittenhouse filed a substitution of attorney and a request for change of address with the bankruptcy court in Cossio's case. He did not serve notice of the change on Appellee Christopher W. Cate (Cate).

Cate holds a judgment against Cossio arising from a state arbitration award based on fraud. Cate commenced an adversary proceeding against Cossio to determine the debt nondischargeable on January 23, 1992, the same day Rittenhouse filed the substitution of attorney form that noted his new address.

Cate states that he served copies of the summons and complaint on both Cossio and Rittenhouse by first-class mail on January 24, 1992, at Cossio's address and at Rittenhouse's post-office address as they were listed on the case commencement notice and that neither service was returned by the post office. Cossio admits receipt of service; Rittenhouse contends he never received the copy mailed to him.

Cate filed a proof of service on January 24, 1992 indicating service on Cossio. This proof of service did not indicate that Rittenhouse had been served. Rittenhouse learned of the suit when Cossio informed him that he had received a summons and complaint. After hearing from Cossio regarding the adversary proceeding, Rittenhouse checked the case file in February and discovered that no proof of service had been filed regarding service on him. Rittenhouse concluded that service was defective pursuant to Rule 7004(b)(9), which requires service on the debtor's attorney of record as well as the debtor. Having made this determination, Rittenhouse decided to take no action. He did not file a notice of appearance or answer the complaint.

Cate thereafter applied for a default on March 4, 1992. Realizing that he had not as yet filed an affidavit showing service on Rittenhouse, Cate filed an amended proof of service on March 4, which included the January 24, 1992 service on Rittenhouse at Suite 1811 at the "C" Street address. Default was entered on March 10, and a default judgment was entered on August 18. After the court ...


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