Attorney or Party Name, Address, Telephone & FAX Numbers, and California State Bar Number

FOR COURT USE ONLY

Jeff D. Kahane (CSB No. 223329)
Duane Morris LLP
865 S. Figueroa Street, Suite 3100
Los Angeles, CA 90017-5450
Telephone: (213) 689-7400
Facsimile: (213) 689-7401
Email: JKahane@duanemorris.com
D Individual appearing without counsel
[g] Attorney for: ACE American Insurance Company, et al.
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re:
CHAPTER: 11
Westcliff Medical Laboratories, Inc.
CASE NO.: 8:10-bk-16743-TA
Debtor(s).
DATE: November 29, 2011
In re:
TIME: 10:30 a.m.
BioLabs, Inc.
CTRM: 5B
Debtor(s). FLOOR: 5
th
Floor
NOTICE OF MOTION AND MOTION FOR RELIEF FROM THE AUTOMATIC STAY
UNDER 11 U.S.C. 362 (with supporting declarations)
(MOVANT: ACE American Insurance Company, et al.)
(Personal Property)
1. NOTICE IS HEREBY GIVEN to the Debtor(s) and Trustee (if any)("Responding Parties"), their attomeys (if any), and other interested
parties that on the above date and time and in the indicated courtroom, Movant in the above-captioned matter will move this Court for
an Order granting relief from the automatic stay as to Oebtor(s) and Debtor's(s') bankruptcy estate on the grounds set forth in the
attached Motion.
2. Hearing Location: D 255 East Temple Street, Los Angeles
D 21041 Burbank Boulevard, Woodland Hills
D 3420 T w ~ l f t h Street, Riverside
[g] 411 West Fourth Street, Santa Ana
D 1415 State Street, Santa Barbara
3. a. [g] This Motion is being heard on REGULAR NOTICE pursuant to Local Bankruptcy Rule 9013-1. If you wish to oppose this
Motion, you must file a written response to this Motion with the Bankruptcy Court and serve a copy of it upon the Movant's
attorney (or upon Movant, if the Motion was filed by an unrepresented individual) at the address set forth above no less than
14 days before the above hearing and appear at the hearing of this Motion.
b. D This Motion is being heard on SHORTENED TIME. If you wish to oppose this Motion, you must appear at the hearing. Any
written response or evidence must be filed and served:
D at the hearing D at least __ court days before the hearing.
(1) D A Motion for Order Shortening Time was not required (according to the calendaring procedures of the assigned judge).
(2) D A Motion for Order Shortening Time was filed per Local Bankruptcy Rule 9075-1 (b) and was granted by the Court.
(3) D A Motion for Order Shortening Time has been filed and remains pending. Once the Court has ruled on that Motion, you
will be served with another notice or an order that will specify the date, time and place of the hearing on the attached
Motion and the deadline for filing and serving a written opposition to the Motion.
4. You may contact the Bankruptcy Clerk's Office to obtain a copy of an approved court form for use in preparing your response (Optional
Court Form F 4001-1M.RES), or you may prepare your response using the format required by Local Bankruptcy Rule 9004-1 and the
Court Manual
(Continued on next page)
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1 M.PP
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Motion for Relief from Stay (Personal Property) - Page 2 of 9
F 4001-1M.PP
In re (SHORT TITLE)
CHAPTER: 11
Westcliff Medical Laboratories, Inc.
Debtor(s). CASE NO.: 8:10-bk-16743-TA
5. If you fail to file a written response to the Motion or fail to appear at the hearing, the Court may treat such failure as a waiver of your
right to oppose the Motion and may grant the requested relief .
. Dated: October 31,2011
DUANE MORRIS LLP
Print Law Firm Name (if applicable)
Jeff D. Kahane /s/ Jeff D. Kahane
Print Name of Individual Movant or Attorney for Movant Signature of Individual Movant or Attorney for Movant
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1 M.PP
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Main Document Page 2 of 9
Motion for Relief from Stay (Personal Property) - Page 3 of 9
F 4001-1M.PP
In re (SHORT TITLE)
CHAPTER: 11
Westcliff Medical Laboratories, Inc.
Debtor(s). CASE NO.: 8:10-bk-16743-TA
MOTION FOR RELIEF FROM STAY
(MOVANT: ACE AMERICAN INSURANCE COMPANY)
1. The Property at Issue: Movant moves for relief from the automatic stay with respect to the following personal property (the "Property"):
D Vehicle (describe year, manufacturer, type, and model):
Vehicle Identification Number:
Location of vehicle (if known):
D Equipment (describe manufacturer, type, and characteristics):
Serial number(s):
Location (if known):
[ZJ Other Personal Property (describe type, identifying information, and location):
Payment of a settlement award between ACE American Insurance Company, ACE Property and Casualty
Insurance Company and the affiliated insurance and reinsurance companies (collectively, "ACE") and Fariba and
Kevin Fahkeri (the "Fahkeris") under Debtor's Policy H08049610.
2. Case History:
a. [ZJ A voluntary D An involuntary petition under Chapter D 7 [ZJ 11 D 12 D 13
was filed on (specify date): 5/19/10
b. D An Order of Conversion to Chapter
was entered on (specify date):
c. D Plan was confirmed on (specify date):
D 7 D 11 D 12 D 13
d. D Other bankruptcy cases affecting this Property have been pending within the past two years. See attached Declaration.
3. Grounds for Relief from Stay:
a. [ZJ Pursuant to 11 U.S.C. 362(d)(1), cause exists to grant Movant the requested relief from stay as follows:
(1) D Movant's interest in the Property is not adequately protected.
(a) D Movant's interest in the collateral is not protected by an adequate equity cushion.
(b) D The fair market value of the Property is declining and payments are not being made to Movant sufficient to protect
Movant's interest against that decline. .
(c) D No proof of insurance re Movant's collateral has been provided to Movant, despite borrower( s )'s obligation to insure
the collateral under the terms of Movant's contract with Debtor(s).
(d) D Payments have not been made as required by an Adequate Protection Order previously granted in this case.
(2) D The bankruptcy case was filed in bad faith to delay, hinder or defraud Movant.
(a) D Movant is the only creditor or one of very few creditors listed on the master mailing matrix.
(b) D The Property was transferred to Debtor(s) either just before the bankruptcy filing or since the filing.
(c) D Non-individual entity was created just prior to bankruptcy filing for the sole purpose of filing bankruptcy.
(d) D Other bankruptcy cases have been filed asserting an interest in the same Property.
(e) D The Debtor( s) filed what is commonly referred to as a "face sheet" filing of only a few pages consisting of the Petition
and a few other documents. No Schedules or Statement of Affairs (or Chapter 13 Plan, if appropriate) has been filed.
(Continued on next page)
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1M.PP
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Main Document Page 3 of 9
Motion for Relief from Stay (Personal Property) - Page 4 of 9
F 4001-1 M.PP
In re (SHORT TITLE) CHAPTER: 11
Westcliff Medical Laboratories, Inc.
Debtor(s). CASE NO.: 8:10-bk-16743-TA
(3) D (Chapter 12 or 13 cases only)
(a) D Postconfirmation plan payments have not been made to the standing trustee.
(b) D Postconfirmation payments required by the confirmed plan have not been made to Movant.
(4) D The lease has been rejected or deemed rejected by operation of law.
(5) [8] For other cause for relief from stay, see attached continuation page.
b. D Pursuant to 11 U.S.C. 362(d)(2)(A), Debtor(s) has/have no equity in the Property; and pursuant to 362(d)(2)(B), the
Property is not necessary for an effective reorganization.
4. D Movant also seeks annulment of the stay so that the filing of the bankruptcy petition does not affect postpetition acts, as specified
in the attached Declaration(s).
5. Evidence in Support of Motion: (Important Note: Dec/aration(s) in support of the Motion MUST be attached hereto;)
a. D Movant submits the attached Declaration(s) on the Court's approved forms (if applicable) to provide evidence in support of
this Motion pursuant to Local Bankruptcy Rules.
b. [8] Movant submits the attached supplemental Declaration(s) under penalty of p e ~ u r y , to provide additional admissible evidence
in support of this Motion.
c. D Movant requests that the Court consider as admissions the statements made by Debtor(s) under penalty of p e ~ u r y conceming
Movant's claims and the Property set forth in Debtor's(s') Schedules. Authenticated copies of the relevant portions of the
Schedules are attached as Exhibit __
d. D Other' evidence (specify):
6. [8] An optional Memorandum of Points and Authorities is attached to this Motion.
WHEREFORE, Movant prays that this Court issue an Order terminating or modifying the stay and grar:ating the following (specify
forms of relief requested):
1. [8] Relief from the stay allowing Movant (and any successors or assigns) to proceed under applicable non-bankruptcy law to enforce
its remedies to ropossess and sell the Property.
2. D Annulment of the stay so that the filing of the bankruptcy petition does not affect postpetition acts, as specified in the attached
Declaration( s).
3. Additional provisions requested:
a. [8] That the Order be binding and effective despite any conversion of this bankruptcy case to a case under any other chapter of
Title 11 of the United States Code.
b. [8] That the 14-day stay prescribed by Bankruptcy Rule 4001 (a)(3) be waived.
c. D That Extraordinary Relief be granted as set forth in the Attachment (attach Optional Court Form F 4001-1 M.ER).
d. D For other relief requested, see attached continuation page.
(Continued on next page)
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1 M.PP
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Motion for Relief from Stay (Personal Property) - Page 5 of 9
F 4001-1 M.PP
In re (SHORT TITLE)
CHAPTER: 11
Westcliff Medical Laboratories, Inc.
Debtor(s). CASE NO.: 8:10-bk-16743-TA
4. If relief from stay is not granted, Movant respeotfully requests the Court to order adequate proteotion.
Dated: October 31,2011 Respectfully submitted,
ACE American Insurance Company and ACE Property &
Casualty Insurance Company
Movant Name
DUANE MORRIS LLP
Firm Name of Attorney for Movant (if applicable)
By: /s/ Jeff D. Kahane
Signature
Name: Jeff D. Kahane
Typed Name of Individual Movant or Attorney for Movant
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1 M.PP
Case 8:10-bk-16743-TA Doc 606 Filed 10/31/11 Entered 10/31/11 16:12:18 Desc
Main Document Page 5 of 9
Motion for Relief from Stay (Personal Property) - Page 6 of 9
F 4001-1M.PP
In re (SHORT TITLE)
CHAPTER: 11
Westcliff Medical Laboratories, Inc.
Oebtor(s). CASE NO.: 8:10-bk-16743-TA
CONTINUATION
(This Attachment is the continuation page for page 4 of the Motion for Relief From Stay, Ground for Relief
paragraph 3(a)(5).)
There is cause to grant this motion. ACE provided auto insurance to the Debtors under policy H0804961 0 (the
. "Policy") from October 1, 2009 until June 17, 2010. During the Policy period, an accident took place which involved
Debtors' employee and the Fakheris.
ACE and the Fakheris reached a settlement in the amount of $13,500.00 (the "Settlement"). Insurance policies are
property of the Estate. If coverage for the Settlement is property of the estate, then ACE cannot satisfy the Settlement
unless it is granted a relief from automatic stay under Section 362 of the Bankruptcy Code. The Fakheris have agreed
that upon payment of the Settlement, they would waive all their claims against the Estate. Cause exists to lift the stay,
because if ACE does not pay the Settlement, then the claimants may have rights against other assets of the Debtors'
estate.
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1 M.PP
Case 8:10-bk-16743-TA Doc 606 Filed 10/31/11 Entered 10/31/11 16:12:18 Desc
Main Document Page 6 of 9
Motion for Relief from Stay (Personal Property) - Page 7 of 9
F 4001-1 M.PP
In re (SHORT TITLE)
CHAPTER: 11
Westcliff Medical Laboratories, Inc.
Oebtor(s). CASE NO.: 8:10-bk-16743-TA
NOTE: When using this form to indicate service of a proposed order, DO NOTlist any person or entity in Category I.
Proposed orders do not generate an NEF because only orders that have been entered are placed on a CM/ECF docket.
PROOF OF SERVICE OF DOCUMENT,
I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is:
865 S. Figueroa Street, Suite 3100, Los Angeles, CA 90017-5450
A true and correct copy of the foregoing document described as: Notice of and Motion for Relief of Automatic Stay
'Under 11 U.S.C. 362 (with supporting declarations); Memorandum of Points and Authorities in Support of ACE
American Insurance Company's Motion for Relief from Automatic Stay for the Purpose of Payment of Settlement
Award and Declaration of Helen Heifets in Support of Motion for Relief of Automatic Stay for the Purpose of
Payment of Settlement Award
__________________________ will be served or was served (a) on the judge
in chambers in the form and manner required by LBR 5005-2(d), and (b) in the manner indicated below:
'I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING ("NEF") - Pursuant to controlling General
Order(s) and Local Bankruptcy Rule(s) ("LBR"), the foregoing document will be served by the court via NEF and hyperlink to
the document. On October 31, 2011 I checked the CM/ECF docket for this bankruptcy case or adversary
proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at
the email addressed indicated below:
l?SI Service information continued on attached page
II. SERVED BY'U.S. MAIL OR OVERNIGHT MAIL (indicate method for each person or entity served):
On October 31,2011 I served the following person(s) and/or entity(ies) at the last known address(es) in this
bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States
Mail, first class, postage prepaid, and/or with an overnight mail service addressed as follow. Listing the judge here constitutes
a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed.
l?SI Service information continued on attached page
III. SERVED BY PERSONAL DELIVERY, FACSIMILE TRANSMISSION OR EMAIL (indicate method for each person or entity
served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on I served the following person(s)
and/or entity(ies) by personal delivery, or (for those who consented in writing to such service method) by facsimile transmission
and/or email as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later
than 24 hours after the document is filed.
o Service information continued on attached page
I declare under penalty of perjury under the laws of the United States of America th t the foregoing is true and correct.
October 31, 2011 Greta Clark
~ ~ ~ ~ - - - - - - - - - -
Date Type Name
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1 M.PP
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Main Document Page 7 of 9
Motion for Relief from Stay (Personal Property) - Page 8 of 9
F 4001-1 M.PP
In re (SHORT TITLE)
CHAPTER: 11
Westcliff Medical Laboratories, Inc.
Oebtor(s). CASE NO.: 8:10-bk-16743-TA
SERVICE LIST
TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING ("NEF")
Raymond G Alvarado - ralvarado@alvaradosmith.com '
Todd M Arnold - tma@lnbyb.com
Phillip Ashman - mgolod@mcqueenashman.com,
pashman@mcqueenashman.com;bkumamoto@mcqueenashman.com
Richard L Barnett - rick@barnettrubin.com, rlbsec@barnettrubin.com
Ron Bender - rb@lnbyb.com
Eric S Bershatski - ericbershatski@tilemlaw.com
Ronald K Brown - rkbgwhw@aoLcom
Jennifer Witherell Crastz - jcrastz@hemar-rousso.com
Ryan S Fife - ryan.fife@dbr.com, mary.avila@dbr.com;dockeUa@dbr.com
Carol J Fogleman - mfrost@bwslaw.com
Anthony A Friedman - aaf@lnbrb.com
John-patrick M Fritz - jpf@lnbrb.com
Jeffrey K Garfinkle - bkgroup@buchalter.com, jgarfinkle@buchalter.com;jmealey-
hatch@buchalter.com;docket@buchalter.com
Fredric Glass - fglass@fairharborcapitaLcom
Nancy S Goldenberg - nancy.goldenberg@usdoj.gov
D Edward Hays - ehays@marshackhays.com, ecfmarshackhays@gmaiLcom
Michael J Heyman - michaeLheyman@klgates.com
Mark D Houle - mark.houle@pillsburylaw.com
Jacqueline L James - jlj@lnbyb.com
Jeff D Kahane - jkahane@duanemorris.com
Andy Kong - Kong.Andy@ArentFox.com
Rodger M Landau - rlandau@lgbfirm.com, kmoss@lgbfirm.com
Matthew A Lesnick - matt@lesnicklaw.com
Michael B Lubic - michaeLlubic@klgates.com
Frank F McGinn - ffm@bostonbusinesslaw.com
Elissa Miller - emiller@sulmeyerlaw.com, asokolowski@sulmeyerlaw.com
Kerry A Moynihan - kerry.moynihan@hro.com, rauLmorales@hro.com
Aram Ordubegian - ordubegian.aram@arentfox.com
Ernie Zachary Park - ernie.park@bewleylaw.com
Richard Park - Richard.Park@usdoj.gov
Justin E Rawlins - jrawlins@winston.com, docketla@winston.com
Benjamin Seigel- bseigel@buchalter.com, IFS_filing@buchalter.com
David B Shemano - dshemano@pwkllp.com
Philip E Strok - pstrok@wgllp.com
United States Trustee (SA) - ustpregion16.sa.ecf@usdoj.gov
Howard J Weg - hweg@pwkllp.com
Sharon Z Weiss - sharon.weiss@hro.com, rauLmorales@hro.com
Joseph M Welch - jwelch@buchalter.com, jmealey-hatch@buchalter.com;docket@buchalter.com
Johnny White - seb@blakeleyllp.com;bblakeley@blakeleyllp.com;rclifford@blakeleyllp.com
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1 M.PP
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Main Document Page 8 of 9

Motion for Relief from Stay (Personal Property) - Page 9 of 9
F 4001-1M.PP
In re (SHORT TITLE)
CHAPTER: 11
Westcliff Medical Laboratories, Inc.
Callahan & Blaine
3 Hutton Centre Dr #900
Santa Ana, CA 92707
Department of Health Care Services
Office of Legal Services
Attn: Steven A. Oldham, Staff
Attorney
MS 0010, P.O. Box 997413
Sacramento, CA 95899-7413
Kirkland & Ellis LLP
300 N LaSalle St
Chicago, IL 60654
TR Capital Management, LLC
336 Atlantic Avenue, Suite 302
East Rockaway, NY 11518
Debtor(s). CASE NO.: 8:10-bk-16743-TA
SERVICE LIST (continued)
SERVED BY U.S. MAIL
City and County of San Francisco
Office of the Treasurer/Tax Collector
Legal Section
Attn: Robert L. Fletcher, Jr.,
P.O. Box B 7426
San Francisco, CA 94120-7426
David W Gee
Garvey Schubert Barer
1191 Second Ave 18th FI
Seattle, WA 98101-2939
Orange County Treasurer-Tax
Collector
Hall of Administration
333 W. Santa Ana Blvd.
Santa Ana, CA 92701
Debt Acquisition Company of
America V, LLC
1565 Hotel Circle South, Suite 310
San Diego, CA 92108
Recy Hernandez
27615 Glasser Ave
Canyon Country, CA 91351
Riverside Claims
Post Office Box 626
Planetarium Station
New York, NY 10024-0540
This form is mandatory by Order of the United States Bankruptcy Court for the Central District of California.
December 2009 F 4001-1M.PP
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Main Document Page 9 of 9
1 JEFF D. KAHANE (SBN 223329)
DUANE MORRIS LLP
2 865 S. Figueroa Street Suite 3100
Los Angeles, CA 90017-5450
3 Telephone: (213) 689-7400
Facsimile: (213) 689-7401
4 E-mail: jkahane@duanemorris.com
5 Attorneys for ACE American Insurance Company, ACE
Property & Casualty Insurance Company, and the
6 affiliated insurers and reinsurers
7
8
9
10
11
12
In re:
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SANTA ANA DIVISION
Case No.: 8:10-bk-16743-TA
WESTCLIFF MEDICAL LABORATORIES,
13 INC.,
Chapter 11
(Jointly Administered with
14 Debtor.
I l - - - - - - - - - - - - - - - - - - - - - - - ~ ~ ~ ~ ~
Case No. 8:10-bk-16746)
15 In re: MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF ACE
AMERICAN INSURANCE COMPANY'S
MOTION FOR RELIEF FROM THE
AUTOMATIC STAY FOR THE PURPOSE
OF PAYMENT OF SETTLEMENT
AWARD
16 BIOLABS, INC.,
17
18
19
20
21
22
23
24
25
26
27
28
Debtor.
I I - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~
ACE American Insurance Company, ACE Property and Casualty Insurance
Company and the affiliated insurance and reinsurance companies (collectively, "ACE"), by and
through their undersigned counsel, hereby move to for relief from automatic stay for the purpose of
payment of a claim to Fariba and Kevin Fahkeri ("the Fahkeris") and respectfully state as follows:
INTRODUCTION
The Court should fmd there is cause to grant this motion because ACE seeks relief
from the stay to pay claims that might otherwise have to be satisfied from assets of the estate.
ACE provided auto insurance to WestcliffMedical Laboratories ("Westcliff') under
policy H08049610 ("Policy") from October 1, 2009 until June 17,2010. (Declaration of Helen
DM3\1 567995. I
DECLARATION IN SUPPORT OF ACE'S MOTION FOR RELIEF FROM THE AUTOMATIC STAY
1
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Memorandum of Points and Authorities in Support of Motion for Automatic Stay Page 1 of 4
1 Heifets in Support of Motion for Relief from the Automatic Stay for the Purpose of Payment of
2 Settled Claim ("Heifets Dec. "), filed contemporaneously herewith, During the period when the
3 Policy was in effect, an accident took place involving an employee of Westcliff insured under the
4 Policy, and the Fahlceris. (Id.,
5
ACE and the Fahkeris reached a settlement in the amount of$13,500
6 resolving the Fahkeri's claims. (Id., Attached to the Heifets Dec. is a stipulation agreed by ACE
7 and the Fahkeris ("StipUlation"). (Id.) In the Stipulation, the Fahkeris agreed to waive their claims
8 against the estate upon payment of the Settlement. (Id.) Thus, payment of the Settlement by ACE is
9 in the best interests of the estate since it preserves the assets of the estate.
10
Insurance policies are property of the estate. Although cancellation of the Policy was
11 approved by the Court on January 3, 2011, see Order Granting Stipulations Resolving Relief From
12 Stay Motion was signed and entered (Docket No. 342), the claims were made before the Policy's
13 cancellation. (Heifets Dec. If the insurance coverage for payment of the Settlement involves
14 property of the estate, then ACE cannot pay the Settlement unless it is granted relief from the
15 automatic stay.
16
For these reasons, ACE requests that this Court grant relief from the stay to ACE,
17 pursuant to 11 U.S.C. 362(d), so that ACE can pay the Settlement.
18 However, should the Court find that the insurance coverage for payment of the Settlement is
19 no longer property of the estate, then, in the alternative, ACE respectfully requests that the Court
20 find that ACE's payment of the Settlement is not barred by the stay.
21
22
JURISDICTION AND VENUE
This Court has jurisdiction over this Motion pursuant to 28 U.S.C. 157 and 1334. This
23 matter is a core proceeding within the meaning of 28 U.S.C. I57(b)(2)(A) & 157(b)(2)(O).
24 Venue is appropriate in this Court pursuant to 28 U.S.C. 1408 and 1409.
25
26
27
28
ARGUMENT
The Court should grant this motion because there is cause for relief from the automatic stay.
The filing of the bankruptcy case stays all acts to exercise control over property of the estate.
DM3\J 567995.1
DECLARATION TN SUPPORT OF ACE'S MOTION FOR RELIEF FROM THE AUTOMATIC STAY
2
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Memorandum of Points and Authorities in Support of Motion for Automatic Stay Page 2 of 4
1 11.U.S.C. 362(a); Gruntz v. County of Los Angeles (In re Gruntz), 202 F.3d 1074, 1081-82 (9
th
2 Cir. 2000) (en banc). Insurance policies are property of the Debtor's estate. In re Minoco Group 0
3 Cos., 799 F .2d 517, 519 (9
th
Cir. 1986). Although the ACE Policy has been cancelled, the payment
4 of the Settlement by ACE would confer a benefit upon the estate by paying claims that would
5 otherwise be entitled to estate assets.
6 Relief from the stay may be granted for cause shown. 11 U.S.C. 362(d)(I). The word
7 "cause" is not defined in the Bankruptcy Code. Scripps GSB 1, LLC v. A. Partners, LLC (In re A
8 Partners LLC), 344 B.R. 114, 127 (BanIa. B.D. Cal. 2006). However, "[t]he term 'cause' as used in
9 362(d)(1) is a broad and flexible concept which permits a bankruptcy court, as a court of equity, to
10 respond to inherently fact-sensitive situations." In re Indian River Estates; Inc., 293 B.R. 429k, 433
11 (Bankr. N.D. Ohio 2003) (citing In re Texas State Optical, Inc., 188 B.R. 552, 556 (Bankr. B.D. Tex.
12 1995)). Hence, a decision to lift the automatic stay for cause is within the Court's discretion. In re
13 Delaney-Morin, 304 B.R. 365,369-70 (9
th
Cir. BAP 2003); In re Leisure Corp., 234 B.R. 916,920
14 (9
th
Cir. BAP 1999); Mataya v. Kissinger (In re Kissinger), 72 F.3d 107, 108-109 (9
th
Cir. 1995).
15 Should the coverage for the payment of the Settlement be property of the estate, there is
16 cause to grant relief from the stay because without such relief, ACE cannot pay the Settlement, and
17 the claimants would be entitled to relief from the Debtor's estate.
18 However, if the coverage for the Claim is not property of the estate because the ACE Policy
19 was cancelled, then in the alternative, ACE respectfully requests that the Court find that the stay
20 does not bar ACE from paying the Settlement.
21 RESERVATION OF RIGHTS
22 ACE expressly reserves and does not waive any and all of its rights, defenses, limitations
23 andlor exclusions under the Policy and applicable law. ACE further reserves all rights to assert any
24 and all such rights, defenses, limitations andlor exclusions in any appropriate manner or forum
25 whatsoever (including without limitation arbitration, the United States District Courts or any state
26 court).
27 Nothing contained in this Memorandum or the Motion shall be construed as an
28 acknowledgment the Policy, or any other insurance policy issued by ACE to Westcliff covers or
DM311567995.I
DECLARATION IN SUPPORT OF ACE'S MOTION FOR RELIEF FROM THE AUTOMATIC STAY
3
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Memorandum of Points and Authorities in Support of Motion for Automatic Stay Page 3 of 4
1 otherwise applied to any claims, losses, or damages on account of any claims or causes of action,
2 other than the claim that gave rise to the Settlement, are eligible for payment. ACE reserves all of its
3 rights to object to any claim for coverage under any of the ACE policies issued to the Debtors and/or
4 any claims for coverage under any settlement agreements, other than the claim that gave rise to the
5 Settlement.
6 ACE expressly reserves and does not waive any of its rights, defenses, limitations and/or
7 exclusions under the policies issued by ACE to the Debtor, including but not limited to the Policy,
8 and the applicable law. ACE further reserves all rights to assert any and all such rights, defenses,
9 limitations and/or exclusions in any appropriate manner or forum whatsoever (including without
10 limitations arbitration, United States District Court, or any State Court).
11 CONCLUSION
12 WHEREFORE, ACE respectfully requests that this Court enter an Order granting relief from
13 the automatic stay for the purpose of allowing ACE to satisfy the Settlement by paying to Fariba and
14 Kevin Fahkeri an amount of $13,500.00, or, in the altemative, finding that ACE's payment of the
15 Settlement is not barred by automatic stay.
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17 Dated: October 31,2011
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Of Counsel:
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BAZELON LESS & FELDMAN, P.C.
Helen Heifets
1515 Market Street, Suite 700
24 Philadelphia, P A 19102-1907
Telephone: 215-568-1155
25 Facsimile: 215-568-9319
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Respectfully submitted,
DUANE MORRIS LLP
By: /s/ JeffD. Kahane
Attorneys/or ACE American Insurance Company, ACE
Property & Casualty Insurance Company, and the
affiliated insurers and reinsurers
DECLARATION IN SUPPORT OF ACE's MOTION FOR RELIEF FROM THE AUTOMATIC STAY
DM3\1567995.1 4
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1 JEFF D. KAHANE (SBN 223329)
DUANE MORRIS LLP
2 865 S. Figueroa Street Suite 3100
Los Angeles, CA 90017-5450
3 Telephone: (213) 689-7400
Facsimile: (213) 689-7401
4 E-mail: jkahane@duanemorris.com
5 Attorneys for ACE American Insurance Company, ACE
Property & Casualty Insurance Company, and the
6 affiliated insurers and reinsurers
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UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SANTA ANA DIVISION
In re:
WESTCLIFF MEDICAL LABORATORIES,
13 INC.,
14 Debtor.
- - - - - - - - - - - - - - - - - - - - - - - - - = ~ ~ ~
15 Inre:
16 BIOLABS, INC.,
17 Debtor. II _______________________ ~ ~ ~ ~ _ J
18
I, Helen Heifets, declare as follows:
Case No.: 8:10-bk-16743-TA
Chapter 11
(Jointly Administered with
Case No. 8:10-bk-16746)
DECLARATION OF HELEN HEIFETS IN
SUPPORT OF MOTION FOR RELIEF
FROM AUTOMATIC STAY FOR THE
PURPOSE OF PAYMENT OF SETTLED
CLAIMS
19
20 1. I am a shareholder at Bazelon Less & Feldman, P.C., a law firm located at 1515
21 Market Street, Suite 700, Philadelphia, PA 19102. I represent ACE American Insurance Company,
22 ACE Property & Casualty Insurance Company, and their affiliated insurers and reinsurers
23 (collectively, "ACE"). I have personal knowledge of the facts set forth herein, which were gained
24 through that representation and through my review of ACE books and records in the course of that
25 representation. If called as a witness, I could and would competently testify to all facts set forth
26 herein.
27 2. ACE provided auto insurance to the Debtors under policy H08049610 (the "Policy")
28 from October 1,2009 until June 17,2010.
DM3\1567995.l
DECLARATION IN SUPPORT OF ACE'S MOTION FOR RELIEF FROM THE AUTOMATIC STAY
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1 3.
During the period when the Policy was in effect, an accident took place involving an
2 employee of Westcliff insured under the Policy, and Fariba and Kevin Fahkeri ("the Fahkeris").
3
4.
ACE and the Fahkeris reached a settlement in the amount of$13,SOO (hereinafter, the
4 "Settlement") resolving the Fahlceri's claims. Attached hereto as Exhibit A is a true and correct copy
5 of a stipulation agreed to by ACE and the Fahkeris ("Stipulation"). In the Stipulation, the Fahkeris
6 agreed that upon payment of the Settlement, they would waive all claims against the estate.
7
5.
On December 10, 2010, ACE filed a Motion for Relief From Automatic Stay for the
8 Purpose of Retroactive Cancellation ofInsurance Policies (Docket No. 323). A StipUlation and
9 Order Resolving Relief From Stay was signed by the parties and filed on December 21, 2010
10 (Docket No. 334). On January 3, 2011, the Order Granting Stipulation Resolving Relief From Stay
11 Motion was signed and entered (Docket No. 342).
12
I declare under penalty of perjury under the law of the United States of America that
13 the foregoing is true and correct.
14
Dated: October 24, 2011
15
By:
Helen Heifets
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DM3\lS6799S.1
DECLARATION IN SUPPORT OF ACE'S MOTION FOR RELIEF FROM THE AUTOMATIC STAY
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JEFF D. KAHANE (SBN 223329)
DUANE MORRlS LLP
865 S. Figueroa Street Suite 3100
Los Angeles, CA 90017-5450
Telephone: (213) 689-7400
Facsimile: (213) 689-7401
E-mail: jkahane@duanemorris.com
A ttomeys jar ACE American Insurance Company,
A CE Property & Casualty Insurance Company,
and the qUiliated insurers and reinsurers
UNITED STATES BANKRUPTCY COURT
. CENTRAL DISTRICT OF CALIFORNIA
SANTA ANA DIVISION
In re: ) Lead Case No. 8:10-bk-16743-TA
WESTCLIFF MEDICAL ~
LABORATORIES, INC., .
Oebtor. )
------------)
lnre:
BIOLABS, INC.
Debtors.
)
)
)
)
)
-----------------)
181 Affects All Debtors
o Affects Westc1iff Medical Laboratories,
Inc. only
)
)
)
)
)
o Affects Biolabs, Inc. only )
Ir--------------)
(Jointly Administered with
Case No. 8:1O-bk-16746-TA)
Chapter 11
STIPULATION FOR RELIEF FROM THE
AUTOMATIC STAY REGARDING
INSURANCE COVERAGE
Westcliff Medical Laboratories, Inc. ("Westcliff') and Biolabs, Inc. ("Biolabs" and,
together with Westcliff, the "Debtors"), ACE American Insurance Company, ACE Property and
Casualty Insurance Company, and/or possibly other affiliated members of the ACE group of
companies (collectively "ACE") and Fariba and Kevin Fahkeri ("the Fahkeris") hereby enter into
this stipUlation (the "StipUlation") based on the following recitals of fact:
RECITALS
A. On May 19, 2010, Westcliff filed a voluntary petition for relief under Chapter 11
of Title ] 1, United States Code (the "Bankruptcy Code"). No trustee has been appointed, and
1
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Exhibit A to Declaration of Helen Heifets Page 1 of 3
1 Westcliff continues to manage its financial affairs as debtor in possession pursuant to Sections
2 11 07 and 11 08 of the Bankruptcy Code.
3 B. ACE provided auto insmance to Westcliffunder policy H08049610 (the "Policy")
4 from October 1,2009 until June 17,2010, at 12:01 a.m.
5 C. During the period when the Policy was in effect, an accident (the "Accident")
6 took place involving an employee ofWestcliffinsmed under the Policy, and the Fahkeris.
7 D. ACE and the Fahkeris reached a settlement in the amount of $13,500 (hereinafter,
8 the "Settlement").
9 E. The Policy is the property of the Estate. Therefore, ACE advised Westcliff and
10 the Fahkeris that ACE cannot satisfy the Settlement unless it is granted a relief from automatic
11 stay (the "Stay") under Section 362 oftlle Bankruptcy Code.
12 F. Payment of the Settlement by ACE is in the best interests of the Estate since it
13 preserves the assets of the Estate.
14 BASED UPON THE FOREGOING, IT IS HEREBY STIPULATED, CONSENTED
15 AND AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:
16 STIPULATION
17 WHEREFORE, based on the foregoing recitals of fact, the parties hereto hereby
18 stipulate as follows:
19 1. The Stay shall be lifted to allow ACE to satisfy the Settlement.
20 2. The Fahkeris shall be deemed to have waived all claims against the Debtors and
21 any right to receive any distributions or payments from the Debtors or their bankruptcy estates.
22 3. Nothing in this StipUlation shall be construed as an acknowledgment that the
23 Policy, or any other insurance policy issued by ACE to the Debtors, covers or otherwise applies
24 to any claims, losses, or damages on account of any claims or otherwise, other than the claim that
25 gave rise to the Settlement, or that any such claims or causes of action, other than the claim that
26 gave lise to the Settlement, are eligible for payment. ACE reserves all of its rights to object to
27 any claim for coverage under any of the ACE policies issued to the Debtors and/or any claims
28 for coverage under any settlement agreements, other than the claim that gave rise to the
2
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Exhibit A to Declaration of Helen Heifets Page 2 of 3
1 Settlement.
2 4. ACE expressly reserves and does not waive any of its rights, defenses, limitations
3 andlor exclusions under the policies issued by ACE to the Debtor, including but not limited to
4 the Policy, and the applicable law. ACE further reserves all rights to assert any and aU such
5 rights, defenses, limitations andlor exclusions in any appropriate manner or forum whatsoever
6 (including without limitation arbitration, United States District Court, or any State Court).
7 5. Nothing in tlris Stipulation shall be construed as a waiver of any claims the
8 Debtors may have against ACE or any defenses to such claims.
9 6. This Stipulation may be executed in counterparts, originals, facsimiles or e-mail,
10 each of which taken together shall constitute one and the same instrument.
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SO STIPULATED.
Dated: October 1!:f--, 20 II
BAZELON LESS & FELDMAN, P.C.
Attomeys for ACE American Insurance Company,
Dated: OctObJ' 2011
ACE Property and Casualty Insurance Company, J{w
and/or possibJy other affiliated members of the .
ACE group of companies !
Dated: October ,2011
KEVIN F AHKERl
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