Allen v. Loveridge ( 2007 )

FILED
United States Court of Appeals
Tenth Circuit
December 3, 2007
UNITED STATES COURT OF APPEALSElisabeth A. Shumaker
Clerk of Court
FOR THE TENTH CIRCUIT
In re:
LOG FURNITURE, INC.,
Debtor. Nos. 07-4041, 07-4042,
07-4043 & 07-4044
(Nos. UT-06-050 &
CARI ALLEN, UT-06-051)
(BAP)
Appellant,
v.
ELIZABETH R. LOVERIDGE,
Trustee; GOLDEN MEADOWS
PROPERTIES, LLC; NUPETCO
ASSOCIATES,
Appellees.
ORDER AND JUDGMENT *
Before TYMKOVICH, BALDOCK, and EBEL, 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not binding precedent, except under the doctrines of law of the case, res judicata,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.
In these four appeals, consolidated for briefing purposes only, Cari Allen,
proceeding pro se, challenges several determinations of the Bankruptcy Appellate
Panel (BAP). We affirm the BAP’s orders and judgments.
GENERAL BACKGROUND
Ms. Allen is a frequent litigant in the Chapter 7 bankruptcy proceedings
involving debtor Log Furniture, Inc., an insolvent manufacturer of log furniture.
See Allen v. Chapter 7 Tr., 223 F. App’x 770, 771-72 (10th Cir. 2007)
(concerning an unsuccessful attempt to remove bankruptcy trustee);
Log Furniture, Inc. v. Call, 180 F. App’x 785, 786-87 (10th Cir. 2006)
(concerning an unsupported claim of illegality in the filing of the bankruptcy
petition, with the court’s observation that Ms. Allen has been party “to no less
than nine separate legal actions raising these same issues”), cert. denied,
127 S. Ct. 938 (2007). Ms. Allen describes herself as a “creditor, displaced
officer, director and management [sic] of Log Furniture . . . and pledgor of her
own personal Log Furniture stock.” Aplt. Br. at 2.
The present cases arise from a settlement reached by the trustee of Log
Furniture’s bankruptcy estate, Elizabeth Loveridge, and three related creditors,
Nupetco Associates (which had a secured claim of $551,073.43), Neuman Petty,
and Golden Meadows Properties, LLC. The parties’ settlement agreement
resolved three disputes: (1) the trustee’s adversary proceeding to set aside a
prepetition assignment to Nupetco of Log Furniture’s claims against its landlord,
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(2) the bankruptcy estate’s claims against Petty, and (3) the validity of Nupetco’s
asserted lien on $53,980.69 of liquidation-auction proceeds. Ms. Allen objected
to the trustee’s motion to approve the settlement agreement, arguing that the
estate would be able to pay the unsecured creditors if the trustee properly pursued
the litigation and managed the liquidation of Log Furniture’s property. She
claimed that the trustee had “committed bankruptcy crimes.” Aplt. App., Vol. I
at 210-11.
The bankruptcy court held an evidentiary hearing to marshal the relevant
facts for its determination on the proposed settlement. The trustee provided
testimony concerning the parties’ competing claims for relief, the potential costs
of litigation, and an accountant’s damage report. Ms. Allen argued against the
settlement, accusing the trustee of “malfeasance, misfeasance, de[re]liction of
duty and conspiratorial conduct,” without objecting to the trustee’s evidence or
introducing relevant evidence of her own. Id. at 212.
Because the settlement involved potential legal claims, the bankruptcy
court analyzed the evidence in light of four factors: (1) the chance of success of
the litigation on the merits; (2) the possible problems in collecting a judgment;
(3) the expense and complexity of the litigation; and (4) the interests of creditors.
See Kopp v. All Am. Life Ins. Co. (In re Kopexa Realty Venture Co.), 213 B.R.
1020, 1022 (B.A.P. 10th Cir. 1997). Based on its evaluation of the relevant
factors, the bankruptcy court approved a modified version of the agreement.
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As modified, the agreement required the trustee to pay the creditors
$29,980.69 from auction proceeds, abandon unliquidated equipment and inventory
assets, dismiss the adversary proceeding, transfer the claims against the landlord
to the creditors, and release Mr. Petty from any claims the estate may have
against him. In return, the creditors would release their liens on the remaining
auction proceeds and accept the funds paid to them in full satisfaction of their
claims against the estate.
Months after approval of the settlement agreement, creditors Golden
Meadows and Nupetco filed amended proofs of claim. Ms. Allen objected,
asserting that these claims were inconsistent, contradictory, and unsupported. She
also argued that the amended claims demonstrated that the settlement agreement
was based on inaccurate information. Therefore, she reasoned, the court should
set aside the agreement as invalid.
The creditors later admitted that the agreement had resolved all their claims
and moved to withdraw the amended claims. After holding a hearing, the
bankruptcy court found that the creditors did not object to disallowance of the
amended claims, which were subsumed into the settlement agreement.
Accordingly, the court entered an order disallowing the amended claims and
specifically stating “that nothing in this Order shall be construed to modify the
terms of validity of this Court’s Order Approving Settlement Agreement.” Aplt.
App., Vol. II at 590.
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Ms. Allen filed a motion for a new trial, again arguing that the
disallowance of the claims required the court to vacate the order approving
settlement. The bankruptcy court summarily denied the motion. Ms. Allen
appealed to the BAP, which affirmed the bankruptcy court rulings and also denied
a procedural motion. In this court, she has filed four separate appeals of the BAP
rulings.
DISCUSSION
No. 07-4041
In No. 07-4041, Ms. Allen seeks reversal of the bankruptcy court’s grant of
her own motion to disallow the creditors’ claims. As the BAP aptly stated,
“[b]ecause the bankruptcy court disallowed the claims as [Ms.] Allen requested,
her appeal goes not to the result but apparently to the bankruptcy court’s
underlying reasoning.” R., doc. 4 at 7. “We independently review the decision
of the Bankruptcy Court . . . , not that of the BAP.” Rupp v. United Sec. Bank
(In re Kunz), 489 F.3d 1072, 1077 (10th Cir. 2007). We consider “the bankruptcy
court’s legal determinations de novo and its factual findings under the clearly
erroneous standard.” Houlihan Lokey Howard & Zukin Capital v. Unsecured
Creditors’ Liquidating Trust (In re Commercial Fin. Servs., Inc.), 427 F.3d 804,
810 (10th Cir. 2005) (quotation omitted).
Ms. Allen argues that the bankruptcy court should have vacated the order
approving the settlement when it disallowed the amended proofs of claim.
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We see no error in the bankruptcy court’s determination to disallow the claims
and re-affirm its order approving the settlement agreement. Settlement
agreements are interpreted under the general rules of contract law. Flying J Inc.
v. Comdata Network, Inc., 405 F.3d 821, 831 (10th Cir. 2005), cert. denied,
126 S.Ct. 1331 (2006). As a matter of law, the bankruptcy court correctly
concluded that the approved settlement agreement encompassed the creditors’
claims.
No. 07-4042
Ms. Allen’s next appeal is directed to a BAP procedural order entered in
her appeal of the bankruptcy court’s decision to disallow the creditors’ notice of
claims. The BAP denied Ms. Allen’s motion to reconsider its refusal to extend
time and allow her to file an oversized reply brief and supplemental appendix.
Ms. Allen contends that the BAP should have given her an opportunity to reply to
her adversaries’ misrepresentations and support her argument with supplemental
material.
Matters such as this are left to the discretion of the court. Nielsen v. Price,
17 F.3d 1276, 1277 (10th Cir. 1994) (finding no abuse of discretion in dismissing
bankruptcy appeal because of untimely-filed brief); cf. Panis v. Mission Hills
Bank, N.A., 60 F.3d 1486, 1494 (10th Cir. 1995) (finding no abuse of discretion
in permitting late filing). We perceive no abuse of discretion in the denial of
Ms. Allen’s reconsideration motion.
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No. 07-4043
Case No. 07-4043 raises Ms. Allen’s fundamental issue: whether the
bankruptcy court properly approved the parties’ settlement agreement.
“A bankruptcy court’s approval of a compromise may be disturbed only when
it achieves an unjust result amounting to a clear abuse of discretion. The
bankruptcy court’s decision to approve the settlement, however, must be an
informed one based upon an objective evaluation of developed facts.” Reiss v.
Hagmann, 881 F.2d 890, 891-92 (10th Cir. 1989) (citation omitted).
Ms. Allen argues that the settlement represents an unjust result because the
parties engaged in fraud and conspiracy, but she failed to introduce evidence to
support her contentions. Our review of the record convinces us that the
bankruptcy court’s decision was informed, properly analyzed, and a reasonable
exercise of discretion.
No. 07-4044
Ms. Allen again challenges the BAP’s denial of her motion for
reconsideration, this time as entered in her BAP appeal of the approval of the
settlement agreement. In No. 07-4042, we concluded that her appeal of the
BAP’s ruling was meritless. For the same reasons, we also reject her arguments
in No. 07-4044.
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CONCLUSION
The judgments of the Bankruptcy Appellate Panel are AFFIRMED in all
respects. We GRANT Ms. Allen’s requests to proceed in forma pauperis.
We note, however, that her appeals border on the frivolous: that is, “lack[ing]
an arguable basis in either law or fact.” Thompson v. Gibson, 289 F.3d 1218,
1222 (10th Cir. 2002). We caution Ms. Allen against filing similarly meritless
appeals in the future.
Entered for the Court
Bobby R. Baldock
Circuit Judge
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