Los Robles Care Center, Inc. v. Secretary of U.S. Department of Health & Human Services

ORDER AFFIRMING BANKRUPTCY COURT’S DISMISSAL OF PLAINTIFF’S COMPLAINT

Presently before the Court is Plaintiffs appeal from a dismissal by the Bankruptcy Court of its complaint for lien determination. (Dkt. Nos. 1, 8.) Having considered the parties’ submissions, the Court adopts the following order.

I. BACKGROUND

Defendant United State Small Business Administration (“SBA”) is a federal government entity that held, as security for certain small business loans, liens against some of Plaintiffs commercial property. Plaintiff filed for Chapter 11 bankruptcy in 2009. (See generally Bankruptcy Case No. 9:09-bk-13125-RR.) While that bankruptcy was pending, in August 2013 the United States Treasury Department applied certain Medicare receivables owed to Plaintiff to offset Plaintiffs debt to.SBA. (Appellant’s Opening Br. at 4.)

Plaintiff argues that this direct action on the debt constitutes an “election of remedies” under CaLCode Civ. P. § 726. See, e.g., Walker v. Cmby. Bank, 10 Cal.3d 729, 733 , 111 Cal.Rptr. 897 , 518 P.2d 329 (1974) (“[W]here the creditor sues on the obligation and seeks a personal money judgment against the debtor ... he makes an election of remedies, electing…