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Choy v. Redland Insurance Company11/14/2002
e cited place no emphasis upon the circumstance that the questioned proceeding was brought "by or against a debtor." What they do clearly emphasize is the principle that no authorized proceeding in bankruptcy can be questioned in a state court or used as the basis for the assertion of a tort claim in state court against any defendant. However, Choy's claim is that Shamrock was allegedly "induced" to file a bankruptcy petition. Yet, Shamrock clearly had a legal right to do so under bankruptcy law; such filing was an "authorized proceeding." That Shamrock may have had a claim against the insurer defendants for their "bad faith" rejection of Choy's settlement offer is not helpful to Choy. If a bad faith claim against the insurer defendants was one of Shamrock's assets, it was for the bankruptcy trustee to pursue it. Choy was free to file a claim in bankruptcy and have that claim approved or adjudicated (which he did by virtue of the settlement described in footnote 7, ante) and, if such claim exceeded the relevant policy limits of the insurer defendants, to request that the trustee pursue a claim for an excess judgment against the insurer defendants. In short, the "authorized proceeding" in bankruptcy was not only exclusive, it was adequate.
Finally, to allow Choy to proceed against the insurer defendants or the attorney defendants because his state court action was not "by or against a debtor" would serve only as an impermissible circumvention of the prohibition on direct bad faith actions against insurers by third party claimants. (Moradi-Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287, 304.) Choy's claims for emotional distress and abuse of process are simply thinly disguised attempts to plead around Moradi-Shalal, as both claims, at bottom, are based upon his assertion that the insurer defendants unreasonably refused to accept Choy's policy limits settlement offer. This is a claim he neither owns nor, on the record before us, is entitled to prosecute.
As did the court in Saks, we conclude that the gist of Choy's complaint is that the defendants misused the bankruptcy process by causing Shamrock to file a petition in bankruptcy. Choy had a number of potential remedies available to him in the bankruptcy court, but chose not to use them. He cannot use state court tort remedies to circumvent well established federal rules relating to redress for the misuse of the bankruptcy process.
DISPOSITION
The judgment of dismissal is affirmed. The several defendants shall recover their costs on appeal.
CERTIFIED FOR PUBLICATION
We Concur:
KITCHING, J.
ALDRICH, J.
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