Odes Kim v. Dome Entertainment Center, Inc

Case: 15-10967 Document: 00513642456 Page: 1 Date Filed: 08/18/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 15-10967
Fifth Circuit
FILED
August 18, 2016
In The Matter of: ODES HO KIM Lyle W. Cayce
Clerk
Debtor
ODES HO KIM; CHONG ANN KIM,
Appellants
v.
DOME ENTERTAINMENT CENTER, INCORPORATED,
Appellee
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:15-CV-452
Before DAVIS, ELROD, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:*
This appeal, which stems from Odes Ho Kim’s involuntary bankruptcy
proceeding, concerns whether this court, in a previous judgment, awarded
relief to Mr. Kim’s wife, Chong Ann Kim. We affirm the district court’s
conclusion that in our previous decision, Kim v. Dome Entertainment Center,
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 15-10967
Inc. (In re Kim), 748 F.3d 647, 650 (5th Cir. 2014), this court did not award the
Kims relief as contemplated by the parties’ settlement agreement.
I.
As described in our earlier decision, In re Kim, 748 F.3d 647, Dome
Entertainment Center, Inc. prevailed in a civil suit against Odes Ho Kim,
resulting in a $5,000,000 judgment. During that litigation, the Kims
purchased a $1,048,028.36 home. After the final judgment, Dome filed an
involuntary petition for relief against Mr. Kim under Chapter 7 of the
Bankruptcy Code. The bankruptcy court then ordered relief for Dome, and
Mr. Kim converted the case to a Chapter 11 proceeding. During the Chapter
11 proceeding, Mr. Kim claimed an unlimited homestead exemption under
Texas law and 11 U.S.C. § 522(b)(3)(A) for the home they purchased during the
litigation. Following Dome’s objection, the bankruptcy court limited the
exemption to $136,875 under § 522(p)—the provision adopted by Congress to
override state law allowing for full exemptions of property in a bankruptcy
proceeding due to homestead interests. Mr. Kim then sought a declaratory
judgment in the bankruptcy court to determine Mrs. Kim’s rights and claims
by virtue of her separate homestead interest under Texas law and 11 U.S.C.
§ 541. The bankruptcy court granted partial summary judgment for Dome,
holding that Mrs. Kim did not have “a separate and distinct exempt homestead
interest in the property that would entitle her to compensation or to prevent
the sale of the Property.” 1 The bankruptcy court found that there was a fact
issue as to whether some share of the residence was not community property
and thus not part of the bankruptcy estate pursuant to § 541. The Kims
appealed, and the district court granted both parties leave to file an
interlocutory appeal.
1 In re Kim, 405 B.R. 179, 188 (N.D. Tex. Bankr. 2009).
2
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During the appeal to the district court, the parties entered into a
settlement agreement, under which Mr. Kim executed a promissory note
payable to Dome. The amount of the note was contingent on the outcome of
the adversary proceeding as described in the Note Adjustment Agreement.
The relevant provisions of the agreement provided for a specified reduction in
the note payable if the final order of the proceedings awarded Mrs. Kim
monetary compensation. Most relevant to this appeal, the agreement also
provided for reduction in the note payable if the final order awarded Mrs. Kim
nonmonetary relief:
In the event that a final order disposing of Adversary No. 08-03440
does not award [Chong Ann Kim (“CAK”)] monetary compensation
for her homestead interest in the Property as of December 21,
2007, but instead awards CAK relief, other than monetary
compensation, for her alleged homestead interest in the Property
as of December 21, 2007, the value of which such order does not
define, and the parties cannot agree on the valuation of such relief,
then, on the written demand of either party, [Odes Ho Kim
(“OHK”)] and [Dome Entertainment Center, Inc. (“DEC”)] shall
each select a competent and disinterested appraiser and notify the
other party of the identity of the selected appraiser within twenty
(20) days of such demand. The selected appraisers shall first select
and agree upon one competent and disinterested “umpire” for the
purpose of resolving a difference of opinion among the two
appraiser[s]. . . . The appraisers shall then determine the fair
market value of the Debtor’s and the Estate’s interest in the
Property as of December 21, 2007 as encumbered by the non-
monetary relief awarded to CAK (the “Property Value”); and
failing to agree, shall submit their differences, only, to the umpire.
...
The district court upheld the bankruptcy court’s summary judgment,
concluding that Mrs. Kim’s homestead interest did not prevent the property
from being subject to § 522(p) and that her homestead interest was not a
property right that would prevent the forced sale of the residence without just
3
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compensation. The Kims timely appealed to this court, which affirmed. In re
Kim, 748 F.3d at 650.
Following this court’s affirmance, Dome filed a motion for summary
declaratory judgment in the bankruptcy court, seeking determination
whether this court awarded monetary or nonmonetary relief to Mrs. Kim
under the settlement agreement. The bankruptcy court granted that motion,
holding that this court did not award Mrs. Kim such relief. The Kims again
appealed, and the district court affirmed the bankruptcy court’s order. This
appeal followed.
II.
We review the bankruptcy court’s summary judgment de novo. Shcolnik
v. Rapid Settlements Ltd. (In re Shcolnik), 670 F.3d 624, 627 (5th Cir. 2012).
We apply the same standard as the district court, affirming summary
judgment if the evidence, taken in the light most favorable to the nonmovant,
creates a genuine dispute of material fact. Id.; Fed. R. Civ. P. 56(a).
In reviewing the summary judgment, we must determine whether this
court awarded Mrs. Kim nonmonetary relief in In re Kim, 748 F.3d 647, which
would be cognizable under the above-described settlement agreement. 2 The
Kims acknowledge that this court affirmed the district court’s holding that
Mrs. Kim had no right to prevent the forced sale of the property and was only
entitled to the capped homestead interest under § 522(p). Therefore, it
appears to us, as it did to the bankruptcy and district courts, that this court
did not award any form of relief to Mrs. Kim in the previous appeal. The Kims’
only argument to the contrary is that this court awarded nonmonetary relief
through its conclusion—which differed from the reasoning of the bankruptcy
and district courts—that “[h]omestead rights have some value to a spouse,
2 The Kims do not argue that this court awarded Mrs. Kim monetary compensation.
4
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separate and apart from an ownership interest in the real property on which
homestead rights are impressed,” In re Kim, 748 F.3d at 661.
To address the Kims’ argument, we first look to the text of the Note
Adjustment Agreement. Whether we apply Texas law or the general
principles of contract interpretation, we look to the express language of the
writing to determine the intention of the parties. See Houston v. Holder (In
re Omni Video, Inc.), 60 F.3d 230, 232 (5th Cir. 1995) (discussing application
of state or federal law in bankruptcy cases); United States v. Chromalloy Am.
Corp., 158 F.3d 345, 350 (5th Cir. 1998) (applying general principles of
contract interpretation); Pirani v. Baharia (In re Pirani), --- F.3d ---, 2016 WL
3063261, at *5 (5th Cir. May 27, 2016) (applying Texas law). The express
language of the agreement is clear, and our court’s previous final judgment
did not award the Kims any relief under that clear language. 3 See Relief,
Black’s Law Dictionary (10th ed. 2014) (“The redress or benefit, esp. equitable
in nature (such as an injunction or specific performance), that a party asks of
a court.”).
The Kims are correct that our previous conclusion that “homestead
rights have some value to a spouse” was contrary to the bankruptcy and
district courts’ holdings that Mrs. Kim did not have a vested property interest
in the homestead exemption allowing for possession of the property or
compensation from a forced sale. In re Kim, 748 F.3d at 661. This court
recognized that Mrs. Kim had “a possessory interest in the real property by
virtue of its homestead character.” Id. at 661. Despite that difference, we
affirmed the district court’s judgment, concluding that the Kims failed to
3 Even if we were to conclude that “relief” was ambiguous, the only extrinsic evidence
the Kims put forth to support their argument is an email that expressly anticipated that this
court could conclude that the home could not be sold as part of the estate, which this court
did not hold. In re Kim, 748 F.2d at 663.
5
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adequately brief whether “the determination by Congress to permit an
exemption of $136,875 for a debtor such as Mr. Kim would not be just
compensation for Mrs. Kim’s homestead interest since $136,875 in proceeds
would be impressed with her homestead rights,” or to address the applicability
of 11 U.S.C. § 363(j). 4 Id. at 663. This court also explicitly rejected the
argument that Mrs. Kim’s homestead interest precluded the forced sale of the
property. Id. at 654–56. Therefore this court did not award Mrs. Kim any
monetary compensation, above and beyond the $136,875 already awarded to
Mr. Kim, and by affirming the district court’s judgment, it did not award
Mrs. Kim any relief at all. We conclude that this court’s final judgment did
not award Mrs. Kim any relief as contemplated by the express language of the
settlement agreement.
III.
We AFFIRM the district court’s affirmance of the bankruptcy court’s
summary judgment for Dome Entertainment Center, Inc.
4The parties stipulated that the property was not Mrs. Kim’s separate property, which
precluded the discussion of whether the property was not part of the estate under § 541. In
re Kim, 748 F.3d at 656.
6