Harleston

Jerry and Donna Harleston commenced an adversary proceeding against the Cali *701 fornia Board of Equalization for a declaratory judgment that their debt to the Board was discharged in a previous bankruptcy proceeding in which the Board had filed a proof of claim. The Board moved for judgment on the pleadings on the ground that it enjoyed sovereign immunity. The bankruptcy court denied the motion. The Bankruptcy Appellate Panel affirmed, concluding that the Board had waived its sovereign immunity by filing a proof of claim in the bankruptcy proceeding. We affirm.

I. BACKGROUND

The Harlestons filed a Chapter 13 bankruptcy petition in February 1998. The Board filed a proof of claim, alleging a fully secured debt. The Harlestons objected that the debt was unsecured. The bankruptcy court entered an order (the “Order”) stating that the claim was not a priority claim under 11 U.S.C. § 507 (a)(8), and set an evidentiary hearing to determine the extent of the claim’s secured status. The court converted the case to Chapter 7 status in March 1999 and entered a discharge order in June 1999. The evidentiary hearing that had been set was struck for want of prosecution after the conversion to…