Lillie v. Rosania ( 2000 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
NOV 3 2000
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
In re: GLENN MILLER,
Debtor,
No. 98-1481
LINDA LILLIE RIGGS, as personal (D.C. No. 98-K-2143)
representative of the estate of (D. Colo.)
MICHAEL W. LILLIE; CURT
LeROSSIGNOL,
Appellants,
v.
JOSEPH G. ROSANIA; TURKEY
CREEK LIMITED LIABILITY
COMPANY,
Appellees.
ORDER AND JUDGMENT *
Before BRORBY, PORFILIO, and MURPHY , Circuit Judges.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
Appellants Linda Lillie Riggs 1
and Curt LeRossignol [hereinafter
“appellants”] appeal from the district court’s order dismissing on jurisdictional
grounds their bankruptcy appeal. Our jurisdiction arises under 28 U.S.C.
§§ 158(d) and 1291.
I. Background facts and proceedings
Appellants claim to be creditors and/or interest holders in the bankruptcy
estate of Glenn Miller. In September 1998 appellants filed a motion for equitable
relief in Miller’s bankruptcy proceeding pursuant to Bankruptcy Rules 9023 and
9024. The motion sought modification of the bankruptcy court’s May 13, 1998
order approving a settlement agreement between the parties to this appeal. The
settlement agreement provided that appellee Joseph G. Rosania [hereinafter “the
Trustee”] would market the estate’s 6000 acres of real property appraised at
1
Ms. Riggs and Mr. LeRossignol filed a suggestion of death of Michael W.
Lillie in this court. They requested substitution of Ms. Riggs as a party to the
appeal and that the caption be modified to reflect that substitution. We will grant
that motion. Ms. Riggs also adopted the brief filed by Mr. LeRossignol’s counsel
of record and gave notice that Mr. LeRossignol’s counsel would represent both
parties upon the granting of the motion to substitute.
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$45,000,000; that the property would be sold by October 1, 1998; and that the
proceeds would be distributed according to the agreement. The agreement also
provided that if the property did not sell by October 1, 1998, the Trustee would
allow creditor/appellee Turkey Creek, L.L.C. to foreclose its $26,000,000 lien,
and all of the estate’s interest in the property would go to Turkey Creek.
Appellants expressed their approval of the agreement at a hearing on the matter.
After the settlement agreement was approved, another entity known as the
Tucker Group filed a claim with the bankruptcy court, alleging that it, and not the
estate, owned 1700 acres of the property, thereby placing a cloud on the title. In
July 1998 the court held a hearing on what the Trustee could sell in light of the
Tucker Group’s claims and entered an order approving a sale of the estate’s
interests in the property. Appellants did not object to the order. On September 4,
1998, the court entered an order authorizing the Trustee to accept a bid of
$34,000,000 for the estate property.
On September 14, 1998, appellants filed a motion objecting to the
September 4th order and also objecting, for the first time, to the orders approving
the settlement agreement and the sale of the property. They asked for
modification of the settlement agreement and the setting aside of the July 22 and
September 4 orders approving the sale of the property. The basis of appellants’
request was their claim that the settlement agreement had been entered into and
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approved on the mistaken understanding of all parties that the estate owned, free
of any other ownership claims, the full 6,000 acres of land. After a lengthy
hearing, the bankruptcy court orally made several findings and conclusions,
denied the motion, and issued a written minute order on September 22, 1998. See
R. Doc. 1 attachment. The next day, the bankruptcy court filed a separate order
on the matter, adopting its oral findings and conclusions and dating it nunc pro
tunc to September 22. See id. Doc. 12 attachment.
Appellants filed both a notice of appeal and (in case the bankruptcy court’s
order was not considered to be a final, appealable order) a motion for leave to file
an interlocutory appeal in the district court. They attached only the September 22
minute order to their motion. See id. Doc. 1. Appellees objected to the motion on
jurisdictional grounds, arguing that the order was not reviewable because
(1) appellants had failed to comply with the requirements of Bankruptcy Rule
8003, which requires the moving party to submit a statement of issues and relief
sought and (2) appellants had failed to present sufficient legal justification for
leave to appeal from an interlocutory order. In response, appellants submitted a
statement of issues and changed their basis for review to an argument that the
appeal was in fact one from a final order. The district court summarily denied the
motion for leave to file an interlocutory appeal and dismissed the appeal without
explanation.
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Appellants filed a motion for reconsideration of the decision to dismiss the
appeal, directing the court’s attention to their claim that they had timely appealed
from a final order. In response, appellees argued that the bankruptcy court order
was not final because it was not set forth in a separate document as required by
Bankruptcy Rule 9021. In reply, appellants submitted the bankruptcy court’s
separate order prepared on September 23 but filed nunc pro tunc to September 22.
However, even though the district court had given appellants until November 30
to reply to appellees’ response, without explanation the district court summarily
denied the motion for reconsideration on November 23, before receiving
appellants’ reply with its attachment.
II. Discussion
A. Jurisdiction. The first issue we must address is appellees’ contention
that we do not have jurisdiction because the bankruptcy court’s September 22
minute order was not a final order under the separate document rule. Although
appellees concede that the bankruptcy court’s order filed nunc pro tunc to
September 22 is a final order, see Appellees’ Answer Br. at 13, appellees argue
that appellants appealed only from the minute order and not from the separate
final order. We disagree. Although appellants erred in attaching the wrong order
to their motion to file an interlocutory appeal, their notice of appeal refers to the
bankruptcy court’s “September 22, 1998 [order] denying Movants’ motion for
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equitable relief.” The bankruptcy court’s final order was dated nunc pro tunc to
September 22. Appellants subsequently submitted the correct order to the district
court to clear up any confusion. The district court had jurisdiction to review the
final, appealable order of the bankruptcy court and erred in dismissing the appeal.
The district court’s order dismissing the appeal from the bankruptcy court’s final
order is also a final, appealable order, and we thus have jurisdiction to review the
bankruptcy court’s order. See § 158(d); State Gov’t Creditors’ Comm. for
Property Damage Claims v. McKay, (In re Johns-Manville Corp. ), 920 F.2d 121,
126-27 (2d Cir. 1990) (discussing two-step determination of jurisdiction over
bankruptcy appeals); cf. In re Andreuccetti , 975 F.2d 413, 419 (7th Cir. 1992)
(reversing district court’s dismissal of bankruptcy appeal and affirming
bankruptcy court’s final order on merits because appellate court “may affirm the
judgment of a lower court on any nonwaived ground supported by the record” as
long as the merits have been fully briefed and are capable of resolution by the
appellate court) .
B. Rule 9024 motion. The bankruptcy court ultimately decided the motion
for equitable relief under Bankruptcy Rule 9024. See Supplemental R. Vol. II at
198-200, 207. This rule incorporates Federal Rule of Civil Procedure 60, and a
decision made pursuant to it is reviewed under the same standard, which is for
abuse of discretion. See Golfland Entertainment Ctrs., Inc. v. Peak Inv., Inc. (In
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re BCD Corp.) , 119 F.3d 852, 857 (10th Cir. 1997); Gill v. Winn (In re Perma
Pac., Properties) , 983 F.2d 964, 966 (10th Cir. 1992) (stating that appellate court
applies the same standards of review in bankruptcy cases as those governing
appellate review in other cases). In conducting that review, the factual findings
of the bankruptcy court are reviewed for clear error and its legal conclusions are
reviewed de novo. See id. We will reverse the bankruptcy court’s determination
based upon the exercise of its discretion under Rule 60(b) “only if we find a
complete absence of a reasonable basis and are certain that the . . . decision is
wrong.” State Bank of S. Utah v. Gledhill (In re Gledhill) , 76 F.3d 1070, 1080
(10th Cir. 1996) (quotations omitted).
Appellants did not cite to that part of the record containing the bankruptcy
court’s challenged findings of fact and conclusions of law. Indeed, they argue
only in their reply brief (without citation) that the court’s conclusion that the
impact of an alleged mistake was not material to the marketing of the real estate
was “contrary to reason” and “based upon the self serving statements of the real
estate salesman hired to market the property and . . . colored by the [bankruptcy]
court’s desire to see a sale conclude,” Appellants’ Rep. Br. at 6. We are not
persuaded by appellants’ arguments.
The bankruptcy court assumed, for the purposes of deciding the motion,
that a mutual mistake regarding knowledge of the Tucker claims had been made at
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the time of the settlement agreement. See R. Supp. Vol. II, at 202. The court also
noted that no one had ever objected to its September 4 factual findings that the
sales process had proceeded in accordance with the court’s July 22 order, and that
“the highest and best offer had been received in accordance with that procedure.”
Id. at 199. In denying the motion, the court observed that there was “no
contradictory evidence that any purchase offer was lost or reduced because of the
Tucker cloud on the title.” Id. at 204. Appellants do not challenge that finding.
The court then found persuasive the testimony of the real estate agent who did the
marketing both before and after the July 22 order “that the Tucker cloud was not a
big issue with regard to offers to purchase the property,” id. , notwithstanding
appellants’ claim that the testimony was somehow “self serving.” It is undisputed
that all parties were aware of the Tucker “cloud” by June of 1998, but no one
objected to the July 22, 1998 order regarding what the Trustee could sell in light
of those claims. See id. at 203. As a result, the court concluded that “the
interested parties who made those conscious choices [of failing to object to the
settlement agreement or the July order approving the sale of the property] have
not demonstrated that they should be relieved from the consequences which were
reasonably foreseeable at the time the choice was made.” Id. at 201. It also
concluded that “the equities do not favor either modification or reformation” of
those orders. Id. The bankruptcy court’s findings of fact are not clearly
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erroneous, and its conclusions are not contrary to law. Accordingly, the
bankruptcy court did not abuse its discretion in denying the motion for equitable
relief.
Appellants’ motion to substitute Ms. Riggs for Michael W. Lillie as a party,
to modify the caption accordingly, and to allow Ms. Riggs to join the brief filed
by Mr. LeRossignol is GRANTED. Appellees’ motion for leave to file an
appendix is GRANTED. The order of the United States District Court for the
District of Colorado is hereby vacated and the matter is remanded with directions
to enter judgment for appellees affirming the September 22, 1998 order of the
Bankruptcy Court.
Entered for the Court
Michael R. Murphy
Circuit Judge
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