Valencia
Valencia v. Rodriguez ( In re Rodriguez)
Opinion
Lead Opinion
MEMORANDUM **
In this adversary proceeding brought by the Debtors Jose and Martha Rodriguez, Jorge Sandoval appeals from the district court’s decision affirming the denial of his motion to dismiss and motion for summary judgment. We have jurisdiction under 28 U.S.C. § 158 (d), and affirm.
A. Preclusive Effect of the 1998 Settlement Agreement
It is undisputed that the bankruptcy court did not approve the parties’ July 27, 1998 settlement agreement, and that the Debtors’ creditors did not have notice of that settlement. Thus, the 1998 settlement agreement violated the automatic stay, see 11 U.S.C. § 362 (a), 1 rendering it void regardless of whether the Debtors challenged its validity in the bankruptcy court, see In re Schwartz, 954 F.2d 569, 571 (9th Cir.1992). We agree with the district court that the state court judgment enforcing the 1998 settlement agreement is necessarily void as well. See In re Gruntz, 202 F.3d 1074 , 1082 n. 6 (9th Cir.2000) (en banc) (“judicial proceedings in violation of the stay are void ab initio ”). Accordingly, the bankruptcy court was under no obligation to give that judgment preclusive effect in this adversary proceeding. See id. (“Infirm…