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In re Kupfer

United States Court of Appeals, Ninth Circuit

December 29, 2016

In re Konstantin Kupfer; Margarita Kupfer, Debtors.
v.
Karim Salma; Robert Salma, as Trustees of the Salma Family Trust; Lindsey S. Bruel; Riyad R. Salma; Laith K. Salma, Creditors-Appellees. Konstantin Kupfer; Margarita Kupfer, Debtors-Appellants,

          Argued and Submitted October 17, 2016 San Francisco, California

         Appeal from the United States District Court for the Northern District of California, D.C. No. 3:14-cv-00668-WHO William Horsley Orrick III, District Judge, Presiding

          Reno F.R. Fernandez III (argued), Iain A. Macdonald, and Matthew J. Olson, Macdonald Fernandez LLP, San Francisco, California, for Debtors-Appellants.

          Merle C. Meyers (argued) and Michele Thompson, Meyers Law Group P.C., San Francisco, California, for Creditors-Appellees.

          Before: Susan P. Graber and Mary H. Murguia, Circuit Judges, and Mark W. Bennett, [*] District Judge.

         SUMMARY [**]

         Bankruptcy

         The panel filed (1) an order redesignating a memorandum disposition as an opinion, with modifications, and (2) an opinion vacating the district court's affirmance of the bankruptcy court's order allowing a claim.

         Creditors filed a proof of claim for a pre-petition arbitration award (1) assessing damages against bankruptcy debtors for breaches of leases and (2) awarding attorney fees and arbitration fees.

         The panel held that the statutory cap on a landlord's claims against a tenant in bankruptcy, set forth in 11 U.S.C. § 502(b)(6), applies only to claims that result directly from the termination of a lease, but not to collateral claims. The panel held that fees attributable to litigating the creditors' claims for future rent were capped, because such claims would not arise were the leases not terminated. But fees attributable to litigating claims for past rent were not capped. To the extent that the debtors' counterclaims in the breach-of-lease litigation concerned ordinary alleged breaches, independent of a lease termination, the associated fees and costs were not capped, either.

         The panel vacated the district court's judgment and remanded for further proceedings.

         ORDER

         The request to publish the unpublished Memorandum disposition is GRANTED. The Memorandum disposition filed October 27, 2016, is redesignated as an authored Opinion by Judge Graber with modifications.

          OPINION

          GRABER, ...


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