Eising

Eising v. Locke (In re Wescot International, Inc.)

Good Law

236 B.R. 27·42 Collier Bankr. Cas. 2d 644·44 Fed. R. Serv. 3d 481·1999 U.S. Dist. LEXIS 10830

United States District Court, Northern District of CaliforniaJuly 15, 1999Civ. Nos. C 98-4332 SC, C 9-98-0080 SC, C 9-98-0079 SC; Bankruptcy No. 1-90-01470; Adversary No. 96-1131California2,671 words

Opinion

Lead Opinion

Conti, J.

ORDER RE: APPEAL

I. INTRODUCTION

PlaintiffrAppellee Christoph Eising (“Eising”) filed a complaint in Bankruptcy Court seeking to set aside a $1 million stipulated judgment entered against him by Defendani/Appellant Jeffrey Locke (“Locke”), for defaulting on a $50,000.00 promissory note. Locke sold the judgment to Defendant/Appellant Susan Vineyard (“Vineyard”), who seeks enforcement. The Bankruptcy Court permanently enjoined enforcement of the $1 million judgment. The Court ruled that Locke is es-topped from denying that he had agreed to set aside the $1 million stipulated judgment if Eising satisfied the promissory note. The Court also held that the $1 million judgment amounted to an unconscionable penalty, out of proportion to the original claims. It awarded Vineyard judgment against Eising in an amount representing the money still owing on the $50,000 promissory note. Vineyard appeals to this Court from the judgment of the Bankruptcy Court.

II. BACKGROUND

Wescot International, Inc. (“Wescot”), filed for bankruptcy in 1990. Appellee Eising is a former principal of Wescot. Appellant Locke is the Chapter 7 trustee of the Wescot estate. Locke brought suit in 1992 against…

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