Bankruptcy Court Denies Debtor Claims, Grants HOA Motions

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April 22, 2026 Get Citation Alerts Download PDF Add Note

In re Claude Dennis Wilkes v. The Santana Row-Forest Building Condominium Homeowners Association, et al.

United States Bankruptcy Court, N.D. California

• Citations: None known
• Docket Number: 25-05016

• Precedential Status: Unknown Status

• Opinion

• Authorities (15)

• Cited By (0)

• Summaries (0)

• Similar Cases (5.5K)

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Trial Court Document

U.S. BANKRUPTCY COURT SS NG
NORTHERN DISTRICT OF CALIFORNIA □□□□
□□□□
1 Signed and Filed: April 22, 2026 □□□
2
ahs
4
5 DENNIS MONTALI
U.S. Bankruptcy Judge
6
7
g UNITED STATES BANKRUPTCY COURT
9 NORTHERN DISTRICT OF CALIFORNIA
) Bankruptcy Case
10 |jIn re ) No. 11-51135-DM
)

11 ||CLAUDE DENNIS WILKES, ) Chapter 13
)
12 )
Ss
)
13 Debtor. )
)
14 )
15 || CLAUDE D. WILKES, Adversary Proceeding
No. 25-05016-DM
16 Plaintiff,
v. )
17 )

18 || THE SANTANA ROW-DEFOREST
BUILDING CONDOMINIUM HOMEOWNERS
19 ||ASSOCIATION, et al.,
20 Defendants.
2 Ja.
22 MEMORANDUM DECISION REGARDING SUBMITTED MATTERS
23 INTRODUCTION
Claude Dennis Wilkes (“Debtor”) petitioned for relief under
95 |}chapter 13 of the Bankruptcy Code,! thereby commencing this case
26 |jover fifteen years ago.
————__ im i ——
1 Unless otherwise indicated, all chapter, section, and
28 llrule references are to the Bankruptcy Code (the “Code”), 11

1 The primary question here, and in the related Adversary
2 Proceeding No. 25-5016 (the “AP”), is whether a pre-petition
3 special assessment owed to Debtor’s former homeowner
4 association, the DeForest Building Condominium Owners
5 Association (the “HOA”), was discharged when Debtor received his
6 discharge, and if so, whether the HOA violated the discharge
7 injunction when it failed to cease litigating a case in state
8 court that began after this case was previously closed without
9 a discharge.
10 Before the court are three motions:
11 (1) the HOA’s Motion for Partial Summary Judgment;
12 Mandatory and Permissive Abstention (“MPSJ”) (AP Dkt 68) filed
13 in the AP;
14 (2) Debtor’s Opposition to Defendant’s Motion for Partial
15 Summary Judgment and Cross-Motion for Summary Judgment (“CMSJ”)
16 (AP Dkt 71) also filed in the AP; and
17 (3) the HOA’s Motion for Ordering Confirming Creditor’s
18 Right to Offset or Recoup Post-Petition (“Offset Motion”) (BK
19 Dkt 128) filed in the main bankruptcy case.2
20 21 U.S.C. §§ 101-1532, and to the Federal Rules of Bankruptcy
22
Procedures, Rules 1001-9037.
2 The main bankruptcy case was initially assigned to the
23 Honorable Arthur S. Weissbrodt. After Judge Weissbrodt’s
retirement, the case was re-assigned to the Honorable M.
24 Elaine Hammond in July 2015. When Judge Hammond retired, the
case was then re-assigned to the Honorable Dennis Montali in
25
November 2025. At the time of Judge Hammond’s retirement, the
26 court had held a hearing on the HOA’s Offset Motion and taken
it under submission. The court had not yet heard oral
27 argument for the HOA’s MPSJ and Debtor’s CMSJ. After
reassignment, Judge Montali held a hearing on both matters.
28
By this decision, the court is disposing of all three matters
1 The court concludes that Debtor’s claims in his Amended
2 Complaint (AP Dkt 11) that, inter alia, the HOA violated the
3 discharge injunction to be unavailing. Debtor has not identified
4 any conduct by the HOA which occurred after he received his
5 discharge that would give rise to a claim under § 524(a)(2), and
6 the other causes of action he has pled in his Amended Complaint
7 are either untimely or inapplicable.
8 Additionally, the court concludes that the HOA has offset
9 rights associated with the discharged debt because Debtor has
10 returned to the fray by pursuing litigation in this court and
11 state court and he may be liable for damages incurred by the
12 HOA. In any event the HOA is entitled to any affirmative
13 defenses that do not threaten Debtor’s discharge but would reduce
14 or eliminate any of Debtor’s claims against it.
15 The HOA’s MPSJ will be granted3, Debtor’s CMSJ will be
16 denied, and the HOA’s Offset Motion will be granted.
17 The court is concurrently entering an order in the HOA’s
18 favor and a separate order on the Offset Motion in the main case.
19 There are two unrepresented individuals, Jurgen Weller and
20 Suzie Mize, named as defendants in the AP. The record reflects
21 a series of submissions by Debtor and orders by the court leading
22 to the present situation. Neither defendant has been properly
23 served, the court is denying all relief to Debtor against the
24 HOA, and a final judgment should be entered in the AP, for lack
25

26 for the completion of the record and conclusion of the AP and
the only pending matter in the main case.
27 3 Despite the word “Partial” in the Motion, this Memorandum
Decision and the order and Judgment that follow, support
28
disposing of it in its entirety.
1 of prosecution as to those persons. If Debtor in good faith
2 believes he is entitled to any relief against Mr. Weller or Ms.
3 Mize, the court will give him one more chance to do so. A final
4 judgment disposing of the entire AP will be entered two weeks
5 from the date of this Memorandum Decision unless, prior to then
6 Debtor files a request for an alias summons and requests a
7 scheduling conference to be held on June 26, 2026 at 1:30 pm.
8 If Debtor is willing to abandon these efforts before then, he
9 should file a statement to that effect within two weeks and the
10 court will issue the judgment.
11 II. BACKGROUND
12 Debtor purchased real property in San Jose (the “Condo”)
13 over twenty years ago. The Condo is located in a common interest
14 development managed by the HOA. Debtor was responsible for
15 paying the HOA regular dues and assessments.
16 Debtor’s transaction was originally financed by a mortgage
17 loan from Washington Mutual Bank and later taken over by JPMorgan
18 Chase Bank, N.A. (“JPMorgan”), who eventually initiated
19 foreclosure proceedings on the Condo which led Debtor to file
20 this chapter 13.
21 Per his schedules, Debtor listed the value of the Condo as
22 $650,000, encumbered by a senior deed of trust held by JPMorgan,
23 securing a debt in the amount of $980,000, and a junior lien for
24 $15,000 owed to the HOA based on arrears.
25 Based on this over-encumbrance, Debtor filed a motion
26 (“Avoidance Motion”) (BK Dkt 48) asking the court to hold that
27 the HOA had a wholly unsecured lien junior to JPMorgan
28 (“Avoidance Action”). The HOA did not oppose the Avoidance
1 Motion, and it was granted by the court. Debtor did not contest
2 the deficiency claim that followed, nor did Debtor challenge the
3 validity of the HOA’s lien but only its secured status.
4 The court confirmed Debtor’s Chapter 13 Plan in December
5 2011 and in October 2016, the Chapter 13 Trustee (“Trustee”)
6 notified the court that Debtor had completed all plan payments.
7 However, the Trustee stated that Debtor was not entitled to a
8 discharge because he had not completed a required personal
9 financial management course and had not complied with certain
10 non-standard provisions in the confirmed plan. The case was
11 closed in November 2016 without a discharge.
12 While this case was closed, JPMorgan foreclosed on the Condo
13 in June 2022. Whatever secured rights the HOA had—
14 notwithstanding the Avoidance Action—were thus eliminated by
15 operation of the foreclosure.4
16 During the period that this case was closed without a
17 discharge, the HOA began collection efforts against Debtor for
18 delinquent assessments and in April 2018, the HOA filed a
19 complaint in Santa Clara County Superior Court (the “State Court
20 Action”) captioned The Santana Row-Deforest Building Residential
21 Condominium Owners Association v. Claude Wilkes et al,
22 18CV326162) seeking to foreclose on the Condo. Debtor filed a
23 cross-complaint (“State Cross-Complaint”) in the State Court
24
25
4 Debtor has repeatedly argued that the HOA has an invalid
26 lien, citing state law. But Debtor has conceded that no state
or federal court has ever invalidated the HOA’s lien.
27 Regardless, whatever lien arguments Debtor contends are
relevant became moot after JPMorgan foreclosed on the
28
collateral property.
1 Action based on slander of title and breach of the Davis-Stirling
2 Act.
3 A year and a half later, and over eight years from when
4 this case was closed without discharge, Debtor returned to this
5 court and filed an application to re-open the case so that he
6 could resolve the outstanding requirements to obtain his
7 discharge. After the case was re-opened and Debtor provided the
8 requisite documents, he was granted a discharge on April 29,
9 2024 and the case was closed.
10 Another year went by and Debtor once again sought to re-
11 open the case, this time for the purpose of removing the State
12 Court Action to the bankruptcy court and to file an adversary
13 complaint against the HOA. Over the HOA’s opposition, this case
14 was re-opened in May 2025, and Debtor initiated the AP.
15 III. LEGAL STANDARDS
16 Federal Rule of Civil Procedure 56(c), made applicable in
17 adversary proceedings by Federal Rule of Bankruptcy Procedure
18 7056, mandates entry of summary judgment where a moving party
19 demonstrates the absence of a genuine issue of material fact and
20 entitlement to judgment as a matter of law. Thrifty Oil Co. v.
21 Bank of Am. Nat’l Tr. & Sav. Ass’n, 322 F.3d 1039, 1045 (9th
22 Cir. 2003). The movant has the burden of proof. See N. Slope
23 Borough v. Rogstad (In re Rogstad), 126 F.3d 1224, 1227 (9th
24 Cir. 1997).
25 As there are no material facts in dispute, summary judgment
26 is appropriate and the court will dispose both the MPSJ and CMSJ.
27 //
28 //
1 IV. DISCUSSION
2 A. Summary Judgment – MPSJ and CMSJ
3 Debtor pled nine causes of action in his Amended Complaint:
4 (1) Count I – Violation of discharge injunction (11
U.S.C. § 524 (a)(2));
5

6 (2) Count II – Violation of automatic stay (11 U.S.C. §
362 (a)(6));
7
(3) Count III – Declaratory relief that the HOA’s claims
8
were discharged and that continued collection
9 efforts violate federal law;

10 (4) Count IV – Violation of the Fair Debt Collection
Practices Act (FDCPA) (15 U.S.C. §§ 1692e, 1692f);
11

12 (5) Count V – Violation of the Rosenthal Act (Cal. Civ.
Code § 1788.17);
13
(6) Count VI – Tortious interference with prospective
14
economic advantage;
15
(7) Count VII – Civil harassment (Cal. Civ. Proc. §
16 527.6);

17 (8) Count VIII – Violation of the Davis-Stirling Act
18 (Cal. Civ. Code §§ 4515, 5655, 5976); and

19 (9) Count IX – Defamation (slander per se) and invasion
of privacy (Cal. Civ. Code § 46).
20
21 In its MPSJ, the HOA argues that the majority of Debtor’s
22 causes of action are time-barred as a matter of law. In the
23 court’s Order Denying Defendant’s Motion to Dismiss (AP Dkt 63),
24 Judge Hammond agreed with the HOA and concluded that most of
25 Debtor’s causes of action were untimely. The court here
26 incorporates Judge Hammond’s ruling and reiterates that under
27 the applicable statutes of limitation, Counts 4 through 9 are
28
1 untimely and/or inapplicable here.5 Although Debtor did not
2 appeal or seek reconsideration of the court’s conclusion
3 regarding timeliness, he has since argued that Rule 15’s relation
4 back doctrine saves the untimely counts.
5 Only Debtor’s claims for violation of the automatic stay
6 under § 362(c) and violation of the discharge injunction under
7 § 524(a) survived.
8 Section 362(c)’s automatic stay terminates when a case is
9 closed. 11 U.S.C. § 362 (c)(2)(A). This case closed on November
10 23, 2016 and was not re-opened until January 23, 2024. Since
11 there was no stay in effect during this period, the HOA was free
12 to act without violating § 362(c). Additionally, whether the
13 Avoidance Action was still effective was an open question that
14 could be dealt with in the Superior Court or this court but is
15 now moot.
16 Section 524 deals with the effect of a discharge. It
17 provides that “[a] discharge in a case under this title […]
18 operates as an injunction against the commencement or
19 continuation of an action, the employment of process, or an act,
20 to collect, recover or offset any such debt as a personal
21 liability, whether or not discharge of such debt is waived.” 11 22 U.S.C. § 524 (a)(2). However, when a case is closed without a
23 discharge, the injunction does not apply and a creditor may
24 collect on the debt.
25
5 Counts 4 and 5 have 1-year statutes of limitations;
26 Counts 6 and 9 have 2-year statutes of limitations; Count 7
has a 3-year statute of limitation; and Count 8 is governed by
27 a 5-year statute of limitation. All the conduct alleged in
the Amended Complaint as to Counts 4 through 9 occurred in
28
2019 at the latest.
1 Here, the HOA initiated the State Court Action in April
2 2018, during the time that this case was closed without a
3 discharge. When this case closed, Debtor still owed the HOA for
4 his delinquent assessments. The lien strip affected by the
5 Avoidance Action did not wipe out the debt owed to the HOA; the
6 underlying debt still existed, albeit in an unsecured status as
7 of the date the Avoidance Motion was granted. Debtor conceded
8 that status in the Avoidance Motion and has never questioned the
9 existence of that status since, but only that the HOA did not
10 file an unsecured claim. More importantly, when Debtor did
11 finally receive his discharge in April 2024, the debt owed to
12 the HOA was discharged and any activity by the HOA to collect on
13 this debt post-April 2024 would have violated § 524(a)(2).
14 But the HOA’s failure to dismiss the State Court Action and
15 its continued filings in this case do not constitute such a
16 violation. Section 524(a)(2)’s injunctive provision is intended
17 to be used as a shield to protect the debtor rather than a sword
18 against the creditor. In re Irigoyen, 659 B.R. 1, 12-13 (9th
19 Cir. BAP 2024); see also, In re Watson, 192 B.R. 739, 749 (9th
20 Cir. BAP 1996); In re Getzoff, 180 B.R. 572, 575 (9th Cir. BAP
21 1995).
22 The HOA’s conduct has largely been defensive. After Debtor
23 received his discharge, the HOA did not appear before the
24 bankruptcy court nor file any moving papers. It was only when
25 Debtor filed his motion to re-open the case in April 2025—with
26 the stated purpose of seeking affirmative relief against the
27 HOA—that the HOA appeared and filed an opposition.
28
1 Similarly, the HOA’s posture in the State Court Action has
2 been defensive. The HOA has only filed two documents in the
3 State Court Action since Debtor received his discharge: a notice
4 of no opposition to Debtor’s attorney’s motion to withdraw as
5 counsel in the State Court Action, and a related proof of
6 service. The HOA even admits that it is only still in the State
7 Court Action because Debtor refuses to drop his State Cross
8 Complaint
9 In sum, the unsecured obligation owed to the HOA was
10 discharged when Debtor received his discharge. But Debtor has
11 not provided any undisputed material facts which show that the
12 HOA has tried to collect on that discharged debt which would
13 give rise to a claim under § 524(a).
14 Lastly, as there is no private right of action to enforce
15 a discharge injunction violation, the commencement of Debtor’s
16 adversary proceeding against the HOA is the wrong avenue for
17 relief even if the HOA had violated § 524(a). See, Walls v.
18 Wells Fargo Bank, N.A., 276 F.3d 502, 509 (9th Cir. 2002);
19 Barrientos v. Wells Fargo Bank, N.A., 633 F.3d 1186, 1191 (9th
20 Cir. 2011).
21 That is not to say that Debtor has no available paths for
22 recourse if the HOA ever does violate the discharge injunction
23 in the future; if that does occur, Debtor may always return to
24 this court and move for contempt.
25 B. The HOA’s Affirmative Defenses
26 The HOA has alleged two different but related affirmative
27 defenses: the equitable right to offset and the “return to the
28 fray” doctrine.
1 1. Offset
2 The bankruptcy law allows a creditor to offset a claim that
3 the debtor owes it against a claim that it owes the debtor, as
4 long as both debts arose before the bankruptcy. In re De
5 Laurentiis Group Inc., 963 F.2d 1269, 1274 (9th Cir. 1992), cert.
6 denied, 506 U.S. 918 (1992). The offset right is allowed as a
7 defense to a claim brought by the debtor against a creditor and
8 the creditor can claim only an amount large enough to offset its
9 debt and cannot collect anything further from debtor. Id. at
10 1277.
11 For example, “if the debtor and the creditor each owed the
12 other $20, they could set those debts off against each other,
13 rather than attempting to collect from each other.” Id. at 1274.
14 The policy underlying the offset right is to avoid ‘the absurdity
15 of making A pay B when B owes A.’” Citizens Bank of Maryland v.
16 Strumpf, 516 U.S. 16, 18 (1995) (quoting Studley v. Boylston
17 Nat’l Bank, 229 U.S. 523, 528 (1913)).
18 In the present case, the HOA’s claims of offset rights are
19 permissible as they are based on mutual, pre-petition
20 obligations between Debtor and the HOA. In re Fu, Case No. 17-
21 41205 CN, 2020 WL 9211230, at 4 (Bankr. N.D. Cal. Sept. 25,
22 2020). (citing In re Pieri, 86 B.R. 208, 210 (9th Cir. BAP
23 1988)). In other words, under § 553(a), the HOA is required to
24 establish two elements: timing and mutuality. In re Verco
25 Industries, 704 F.2d 1134, 1139 (9th Cir. 1983).
26 The court concludes that both criteria have been satisfied
27 in this case.
28
1 As a clarifying matter, the underlying debt owed to the HOA
2 was not extinguished by the Avoidance Motion. In filing that
3 motion, Debtor never disputed the underlying debt owed to the
4 HOA and after the court granted the Avoidance Motion that debt
5 became an unsecured obligation owed to the HOA that was
6 eventually discharged in 2024. There was no need for HOA to
7 file a proof of claim.
8 The timing element requires that both claims arose pre-
9 petition. Both Debtor’s counterclaims in Superior Court against
10 the HOA for slander of title and breach of the Davis-Stirling
11 Act and the HOA’s breach of contract claim are pre-petition
12 claims. This conclusion derives from the Code’s expansive
13 definition of the terms “claim” and “debt.” Buckenmaier, 127
14 B.R. at 238. Section 101(11) defines “debt” as a “liability on
15 a claim” and a “claim” is defined by § 101(4)(A) as a “right to
16 payment, whether or not such right is reduced to judgment,
17 liquidated, unliquidated, fixed, contingent, matured, unmatured,
18 disputed, undisputed, legal, equitable, secured or unsecured.”
19 11 U.S.C. §§ 101 (11), 101(4)(A). Here, the claims arise from
20 Debtor’s 2007 purchase of the Condo and the related contract
21 between Debtor and the HOA. Therefore, they are pre-petition
22 claims.
23 With respect to mutuality, in order for debts to be mutual,
24 “something must be ‘owed’ by both sides” Buckenmaier, 127 B.R.
25 at 238. The requirement of mutuality is easily met here: the
26 Debtor and the HOA are the same parties and the dispute here
27 arose out of the purchase of the Condo.
28
1 With the requirements of timing and mutuality being
2 satisfied here, the question is whether the HOA’s offset rights
3 survived Debtor’s 2024 discharge. The court concludes that it
4 does.
5 A majority of courts have held that a valid offset claim
6 cannot be defeated by a discharge and a creditor’s right to
7 offset a mutual, pre-petition debt survives even the discharge
8 of the debtor. See, 5 COLLIER ON BANKRUPTCY ¶ 553.08 (16th ed.
9 2026); De Laurentiis, 963 F.2d at 1276-78; In re Luongo, 259 10 F.3d 323 (5th Cir. 2001); In re Davidovich, 901 F.3d 1533, 1537
11 (10th Cir. 1990); In re Buckenmaier, 127 B.R. 233, 236-37 (9th
12 Cir. BAP 1991).
13 As such, it appears clear to the court that the entire
14 accrued amount of Debtor’s underlying pre-petition discharged
15 debt then owed may be used to offset any amount he may recover
16 against the HOA in the future.
17 2. Return to the Fray
18 In addition to its right to offset, the HOA has also
19 contended that it would be entitled to post-petition attorneys’
20 fees under the so-called “return to the fray” doctrine.
21 The Ninth Circuit has held that “post-petition attorney fee
22 awards are not discharged where post-petition, the debtor
23 voluntarily ‘pursue[d] a whole new course of litigation,’
24 commenced litigation, or ‘return[ed] to the fray.’ Voluntarily.”
25 In re Ybarra, 424 F.3d 1018, 1024 (9th Cir. 2005) (quoting Siegel
26 v. Federal Home Loan Mortg. Corp., 143 F.3d 525, 533-35 (9th
27 Cir. 1998)). In Ybarra, the Ninth Circuit endorsed the “notion
28 that by voluntarily continuing to pursue litigation post-
1 petition that had been initiated pre-petition, a debtor may be
2 held personally liable for attorney fees and costs that result
3 from that litigation.” Ybarra, 424 F.3d at 1024.
4 The Ninth Circuit BAP extended the Ybarra rule to litigation
5 that begins post-petition regardless of the forum in which the
6 post-petition litigation takes place. In re Gillespie, 516 B.R.
7 586, 591-92 (9th Cir. BAP 2014). The focus of the Ybarra inquiry
8 is on the debtor’s motivation for engaging in the post-petition
9 litigation and “whether the debtor ‘returned to the fray’ to
10 press his disputed claims and property interests or for some
11 other purpose.” Gillespie, 516 B.R. at 592; see also, Ybarra,
12 414 F.3d at 1023-24.
13 Here, the court concludes that Debtor is not entitled to a
14 discharge of the HOA’s post-petition attorneys’ fees given that
15 he chose to resume his participation in the State Court Action
16 and in this court post-petition. After receiving his discharge
17 in 2024, instead of using the discharge as a fresh start, Debtor
18 took affirmative steps to voluntarily continue the State Court
19 Action as well as re-opening this bankruptcy case to litigate
20 against the HOA.
21 V. CONCLUSION
22 For the foregoing reasons, Debtor’s CMSJ is DENIED, the
23 HOA’s MPSJ is GRANTED, and the HOA’s Offset Motion is GRANTED.
24 *END OF MEMORANDUM DECISION**
25

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1 COURT SERVICE LIST
2 Via U.S. Mail:
3 Claude D. Wilkes Jr.
4 4683 Flagstaff Dr.
5 Folsom, CA 95630
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7 Via ECF:
8 All ECF Recipients
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