Perez v. Kubie (In Re Perez) , 535 F. App'x 731 ( 2013 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT October 9, 2013
Elisabeth A. Shumaker
Clerk of Court
In re: CHERYL L. PEREZ,
Debtor.
------------------------------ No. 12-1388
(D.C. No. 1:11-CV-02743-CMA)
CHERYL L. PEREZ, (D. Colo.)
Appellant,
v.
KEVIN P. KUBIE, individually and in his
official capacity as the Chapter 7 Trustee
of the Bankruptcy Estate of Cheryl L.
Perez, Case No. 05-25535-ABC,
Appellee.
ORDER AND JUDGMENT*
Before HOLMES, HOLLOWAY, and BACHARACH, Circuit Judges.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Cheryl L. Perez appeals from the district court’s order dismissing her
bankruptcy appeal for lack of standing. Because we determine that Ms. Perez lacks
standing to appeal to this court, we dismiss her appeal.
Ms. Perez filed for relief under Chapter 11 of the United States Bankruptcy
Code but soon converted the case to one under Chapter 7. Kevin P. Kubie was then
appointed Chapter 7 trustee of Ms. Perez’s bankruptcy estate. Five years after his
appointment as trustee, Mr. Kubie filed his Final Report showing that after he
liquidated property and paid administrative expenses and approved distributions, a
balance of $573,558.80 was left in Ms. Perez’s bankruptcy estate. The report also
showed that the amount in allowable claims was in excess of the amount collected
from liquidating Ms. Perez’s property, owing largely to a state-court judgment of
approximately $710,000 entered against Ms. Perez before she filed for bankruptcy.
In short, the Final Report showed that Ms. Perez was insolvent. Along with the Final
Report, Mr. Kubie submitted an application for $46,377.58 in compensation and
expenses.
Ms. Perez filed an adversary complaint against Mr. Kubie as well as an
objection to his application for compensation. The bankruptcy court held a hearing
and dismissed Ms. Perez’s objection to the application for compensation for lack of
standing because her estate was insolvent and she thus had no economic stake in the
estate. The court did, however, reserve judgment on her adversary complaint against the
trustee.
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Ms. Perez appealed the dismissal to the district court, but the district court
concluded she lacked standing to bring the appeal. The court noted that appellate review
is only available to a “person aggrieved,” and a debtor may only be a “person aggrieved”
when the estate is solvent and the excess will eventually go to the debtor. See Weston v.
Mann (In re Weston), 18 F.3d 860, 863-64 (10th Cir. 1994). Despite the insolvency of
her estate and, thus, apparent lack of standing, Ms. Perez argued that her adversary
complaint—at that time still pending in the bankruptcy court—created standing for her to
bring the appeal. However, she presented no authority to support her position. Instead,
she contended that our holding in Sherr v. Winkler, 552 F.2d 1367, 1375 (10th Cir. 1977),
that a trustee is not liable for mistakes in judgment where discretion is allowed, was
wrongly decided and should be overturned. The district court found this argument was
not only meritless but irrelevant to the issue of her standing to appeal a dismissal of her
objection to the trustee’s application for compensation. The court therefore dismissed
Ms. Perez’s appeal. Ms. Perez now appeals to this court.
We review the bankruptcy court’s factual findings for clear error and conclusions
of law de novo. Broitman v. Kirkland (In re Kirkland), 86 F.3d 172, 174 (10th Cir.
1996). Ms. Perez argues that the bankruptcy court erred because a favorable judgment on
the merits of her adversary complaint could somehow restore her estate to solvency,
thereby giving her standing in this case. But she identifies no law or facts to suggest this
is so. She instead raises the same argument about Sherr v. Winkler as she did in the
district court, inviting us to reverse a case that does not pertain to her circumstances. We
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decline this invitation. As the district court determined, Ms. Perez is not a person
aggrieved by the bankruptcy court’s decision to grant Mr. Kubie’s application for
compensation. The Final Report confirmed that Ms. Perez’s estate is insolvent. Thus,
regardless of whether compensation was granted to Mr. Kubie, there was no excess in the
estate that could eventually go back to her. She therefore cannot be a person “whose
rights or interests are directly and adversely affected pecuniarily” by the bankruptcy
court’s order. Holmes v. Silver Wings Aviation, Inc., 881 F.2d 939, 940 (10th Cir. 1989)
(internal quotation marks omitted).
Accordingly, this appeal is dismissed for lack of standing.
Entered for the Court
William J. Holloway, Jr.
Circuit Judge
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