Contractors' State License Board of California v. Dunbar (In re Dunbar)

We are asked to decide whether the decision of a state administrative law judge (“ALJ”) regarding the scope of the automatic stay in bankruptcy precludes consideration of the issue by the federal bankruptcy court. We hold that pursuant to Gruntz v. County of Los Angeles (In re Gruntz), 202 F.3d 1074 (9th Cir.2000) (en banc), the decision of the state ALJ does not preclude the bankruptcy court’s independent review.

I.

In September 1993, Robert Dunbar (“Dunbar”), on behalf of Concrete & Masonry Construction, Inc., entered into a written contract with Frank and Denise Martin (“Martins”) to install a concrete driveway, walkway, and patio at their home for $16,630. By the time Dunbar had completed the job in November 1993, the contract price had increased to $18,070, which the Martins paid in full. Almost two years later, on May 15, 1995, Dunbar and his wife, Kimberly Dunbar, (“debtors”) filed a voluntary Chapter 13 bankruptcy petition. The debtors did not list the Martins on their petition schedules.

In early 1996, the Martins noted that the concrete was beginning to crumble. The Martins requested Dunbar to repair the concrete or to pay for the cost of the repair. After…