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IN RE HARLESTON

BAP Nos. CC-01-1417-BKMa, Bankruptcy No. LA 98-14264 VZ, Adversary No. LA-01-01905.

275 B.R. 546 (2002)

In re Jerry C. HARLESTON and Donna Harleston, Debtors. State of California, State Board of Equalization, Appellant, v. Jerry C. Harleston and Donna L. Harleston, Appellees.

United States Bankruptcy Appellate Panel of the Ninth Circuit.

Filed March 25, 2002.

Attorney(s) appearing for the Case

Herbert A. Levin, Deputy Attorney General, State of California Department of Justice, Los Angeles, CA, for State of California Board of Equalization.

Naomi R. Bernstein, Bernstein Law Corporation, Rancho Cucamonga, CA, for Jerry and Donna Harleston.

Before BRANDT, KLEIN, and MARLAR, Bankruptcy Judges.

OPINION

BRANDT, Bankruptcy Judge.

Debtors filed an adversary proceeding against the California Board of Equalization ("Board") seeking a declaration that their debt to the Board was discharged in their chapter 71 proceeding. The bankruptcy court denied the Board's motion for judgment on the pleadings based on sovereign immunity. Holding that the adversary proceeding is ancillary to the case in which the Board waived its immunity...

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