Melikian Enterprises, LLLP v. McCormick

The Eighth Circuit affirmed the district court's decision affirming the bankruptcy court's sustaining of debtors' objection to the proof of claim. The court held that 8 U.S.C. 502 does not preempt Arizona Revised Statute section 33-814, which sets a 90-day limit for commencing or continuing a civil action in Arizona state court. In this case, the 90-day limit had not expired before debtors filed their Chapter 11 petition. The court also held that, because creditor's state court action was dismissed shortly after the trustee's sale for failure to perfect service on defendants, it was not "maintained" within the meaning of Valley Nat'l Bank of Ariz. v. Kohlhase, 897 P.2d 738, 741 (Ariz. Ct. App. 1995). In Kohlhase, the court adopted an Arizona district court's holding that an action on the debt qualified as a deficiency action under A.R.S. section 33-814 even though the creditor filed the action before the trustee's sale and did not amend the complaint to allege a deficiency after the trustee's sale. View "Melikian Enterprises, LLLP v. McCormick" on Justia Law