Evans v. Bank of New York Trust Co., N.A. , 506 F. App'x 741 ( 2012 )

FILED
United States Court of Appeals
Tenth Circuit
December 20, 2012
UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
In the Matter of: PATRICIA ANN
EVANS,
Debtor,
____________________________
PATRICIA ANN EVANS,
Appellant,
v. No. 12-1223
THE BANK OF NEW YORK TRUST (BAP No. 10-031-CO)
COMPANY, N.A., as successor to
JPMorgan Chase Bank, N.A., as
Trustee,
Appellee.
ORDER AND JUDGMENT *
Before MURPHY, EBEL, and HARTZ, Circuit Judges.
*
After examining the briefs and appellate record, this panel has determined
unanimously to honor 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. This order and judgment is not binding
precedent except under the doctrines of law of the case, res judicata, and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.
Patricia Ann Evans appeals an order by the Bankruptcy Appellate Panel of
the Tenth Circuit (BAP) denying her motion to set aside three earlier orders of the
BAP on the ground that the orders were void because the BAP lacked jurisdiction
over her original appeal to that court. One of the three earlier orders denied
Evans’s appeal on the merits; one denied rehearing on the merits determination;
and one sanctioned Evans for filing a frivolous appeal. Although we agree with
Evans that her original appeal was moot when decided, we hold that her challenge
to the first two BAP orders is a moot question over which we lack jurisdiction,
and that the BAP’s sanctions order is not subject to collateral attack on the
ground raised by Evans. Accordingly, we dismiss the appeal in part and affirm
the BAP in part.
I. BACKGROUND
This appeal has its origins in a house located at 1933 South Downing Street
in Denver, Colorado. The house formerly belonged to Evans’s daughter, Vicki
Dillard-Crowe, who is not a party to this case. When these proceedings
commenced, Evans resided in the home as a guest. The Bank of New York Trust
Co. had purchased the house at a foreclosure auction and initiated eviction
proceedings in Colorado state court against Dillard-Crowe and any other
occupants. The state court granted the Bank a judgment of possession on
February 11, 2010. The next day, Evans filed the Chapter 7 bankruptcy petition
that eventually led to this appeal, listing the house as her primary residence
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although she did not own it. The Bank sought relief from the automatic stay, see
11 U.S.C. § 362(d), in order to proceed against the house. The district court
granted relief from the automatic stay on May 13, and Evans appealed to the BAP
a day later.
The bankruptcy court granted Evans a discharge on July 9, 2010, before the
BAP issued a decision on Evans’s appeal. In that decision, handed down on
January 4, 2011, the BAP rejected the Bank’s argument that because the discharge
had terminated the automatic stay, the appeal was moot. It affirmed the
bankruptcy court’s order granting the Bank relief from the automatic stay. In
addition, it ordered Evans to show cause why she should not be sanctioned for
filing a frivolous appeal. It denied her motion for rehearing on February 4; and
on March 11, 2011, it ordered her to pay $4,737.50 as a sanction for filing a
frivolous appeal.
Evans appealed to this court, but her notice of appeal designated only the
February 4, 2011, order denying rehearing. We dismissed the appeal for lack of
appellate jurisdiction because Evans’s discharge from bankruptcy during the
pendency of her BAP appeal mooted any issues relating to the automatic stay.
See Evans v. Bank of New York Trust Co. (In re Evans) (Evans I), 465 F. App’x
763, 767 (10th Cir. 2012). 1 We held that we were precluded from reviewing the
1
We had authority to order the BAP to vacate its order denying rehearing,
see U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18, 21 (1994); but
(continued...)
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BAP’s January 4, 2011, order affirming relief from the stay and the BAP’s March
11, 2011, sanctions order because the notice of appeal did not encompass them.
See id. at 766–68.
Evans then filed with the BAP a “Motion to Set Aside/Vacate Void
Judgment,” which invoked Fed. R. Civ. P. 60(b)(4). R., Vol. 1 at 82. She
contended that our decision to dismiss her appeal as moot necessarily implied that
the BAP had lacked jurisdiction to hear and determine her original appeal and to
impose sanctions against her in connection with that appeal. The BAP rejected
this motion in an order issued April 23, 2012, stating that the sanctions order was
proper even if the case was moot.
II. DISCUSSION
Evans’s motion to the BAP challenged three orders issued by the BAP: the
January 4, 2011, order affirming on the merits the bankruptcy court’s order
granting relief from the stay; the February 4, 2011, order denying rehearing of the
merits determination; and the March 11, 2011, order sanctioning her for filing a
frivolous appeal. The first two orders no longer have any real-world
consequences because there is no longer an automatic stay in the underlying
bankruptcy case. Whether the orders were valid is therefore a moot issue that we
lack jurisdiction to consider. See Citizens for Responsible Gov’t State Political
1
(...continued)
we did not do so.
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Action Comm. v. Davidson, 236 F.3d 1174, 1182 (10th Cir. 2000) (“The crucial
question [in determining mootness] is whether granting a present determination of
the issues offered will have some effect in the real world.” (ellipsis and internal
quotation marks omitted)); Evans I, 465 F. App’x at 767.
The third order is the BAP’s order imposing sanctions on Evans. The
validity of that order is not a moot issue, and we exercise jurisdiction under
28 U.S.C. § 158(d). Evans did not appeal the order and now mounts a collateral
attack on it. She argues that the BAP lacked jurisdiction when it issued the
sanctions order and relies on Fed. R. Civ. P. 60(b)(4), which provides: “On
motion and just terms, the court may relieve a party or its legal representative
from a final judgment, order, or proceeding for the following reasons: . . . (4) the
judgment is void.” She contends that Rule 60(b)(4) applies to the BAP because of
Federal Rule of Bankruptcy Procedure 9024, which states that “Rule 60
F.R.Civ.P. applies in cases under the [Bankruptcy] Code” except in enumerated
circumstances not present here.
We need not determine whether Rule 60 applies to BAP proceedings,
because our analysis is essentially the same if we simply review Evans’s motion
to the BAP as a motion to recall the mandate. Federal courts have an inherent
power to recall their mandates. See Calderon v. Thompson, 523 U.S. 538, 549
(1998) (recognizing inherent power of courts of appeals); 16 Charles A. Wright,
et al., Federal Practice and Procedure §3938 (2d ed. 1996) (Federal Practice).
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Rule 60 codifies that authority for federal district courts; and “[a]lthough the
Appellate Rules do not include provisions that parallel Rule 60, the courts of
appeal have generally adhered to equally strict standards to protect the need for
finality and repose.” Federal Practice, supra at 724–25 (footnote omitted). In
Ute Indian Tribe of the Uintah & Ouray Reservation v. Utah, 114 F.3d 1513,
1522 (10th Cir. 1997), we cited Greater Boston Television Corp. v. FCC, 463
F.2d 268 (D.C. Cir. 1971), as “discussing particular grounds for recalling a
mandate.” Greater Boston stated the general rule as “‘good cause,’” meaning
“the showing of need to avoid injustice,” 463 F.2d at 277, although “‘exceptional
circumstances’” must be shown, id. at 278.
We now turn to Evans’s challenge to the BAP’s sanctions order as “void.”
In light of our decision on Evans’s prior appeal, she may well be correct that the
BAP lacked subject-matter jurisdiction to issue the sanctions order. She could
have pursued the matter on direct appeal. See Depex Reina 9 P’ship v. Texas Int’l
Petroleum Corp., 897 F.2d 461, 464 (10th Cir. 1990) (allowing challenge to
subject-matter jurisdiction before judgment is final).
Lack of subject-matter jurisdiction does not, however, necessarily render a
judgment “void” for purposes of a collateral attack. To the contrary, the law
appears to be well-settled that once an order has “bec[o]me final on direct
review,” the subject-matter jurisdiction of the court issuing the order can almost
never be successfully raised. Travelers Indem. Co. v. Bailey, 557 U.S. 137, 152
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(2009). In general, “[a] party that has had an opportunity to litigate the question
of subject-matter jurisdiction may not reopen that question in a collateral attack
upon an adverse judgment.” Id. at 153 (ellipsis and internal quotation marks
omitted).
We have said that a judgment can be collaterally attacked under Rule
60(b)(4) as void for lack of jurisdiction “only where there is a plain usurpation of
power, when a court wrongfully extends its jurisdiction beyond the scope of its
authority,” not when the court merely made “an error of law in determining
whether it ha[d] jurisdiction.” Gschwind v. Cessna Aircraft Co., 232 F.3d 1342,
1346 (10th Cir. 2000) (internal quotation marks omitted). And it is hard to
conceive of such a usurpation actually occurring. One leading treatise states,
“[I]n almost every case, courts would conclude that an erroneous decision to
exercise jurisdiction was within a court’s power to determine its own
jurisdiction.” 12 James Wm. Moore et al., Moore’s Federal Practice and
Procedure § 60.44[2][d] (3d ed. 2011). The Supreme Court has acknowledged the
possibility of collateral attacks, but only in extreme (and highly unlikely) cases.
See Travelers Indem. Co., 557 U.S. at 154 n.6 (“This is not a situation, for
example, in which a bankruptcy court decided to conduct a criminal trial, or to
resolve a custody dispute, matters so plainly beyond the court’s jurisdiction that a
different result might be called for.” (internal quotation marks omitted)).
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We recognize that the court in IAL Aircraft Holding, Inc. v. FAA, 216 F.3d
1304, 1306 (11th Cir. 2000), stated: “Although it is rather unusual for a court to
learn, after its mandate issues, that its prior decision lacked a jurisdictional basis,
the few courts confronting this issue uniformly have vacated their prior
decisions.” But the supporting authority cited by the opinion is slim. IAL
Aircraft cites Snow v. United States, 118 U.S. 346 (1886), in which the Supreme
Court held that it had no jurisdiction to hear the case and then vacated the
judgment and recalled the mandate in a similar case in which jurisdiction had
been lacking but the question of jurisdiction had not been raised or considered,
see id. at 354–55. The case in which the mandate was recalled, however, had
been decided during the same term of court, which gave the Court plenary power
to change the judgment. See id. at 354 (“[A]s the case was decided at the present
term, . . . we have decided to vacate our judgment, and recall the mandate . . . .”);
Federal Practice, supra at 712–13 (discussing former power of courts over their
mandates during term of court). The only other case cited by IAL Aircraft in
which the mandate was recalled because the case had been moot when decided
was the three-sentence order in United States v. Pressman (In re Grand Jury
Proceedings), 593 F.2d 906 (9th Cir. 1979). 2 In light of the broad language in
2
IAL Aircraft cited Bumpus v. Clark, 702 F.2d 826 (9th Cir. 1983), but
Bumpus says nothing about the court’s recalling its mandate; apparently the
decision was rendered after a petition for rehearing and the mandate had not
previously issued. It also cited United States v. Londono, 100 F.3d 236 (2d Cir.
(continued...)
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Travelers Indem. Co., we choose not to follow the earlier lower-court decision in
IAL Aircraft. We see no exceptional circumstance requiring the BAP to recall its
mandate for lack of jurisdiction.
Evans had her opportunity to appeal the BAP’s sanctions order, but she did
not pursue that relief. We affirm the BAP’s denial of Evans’s motion to set aside
its sanctions order.
III. CONCLUSION
We AFFIRM the BAP’s decision refusing to set aside its sanctions order
and otherwise DISMISS the appeal.
ENTERED FOR THE COURT
Harris L Hartz
Circuit Judge
2
(...continued)
1996); but the court in that case ruled that the case was not moot.
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No. 12-1223, Evans v. Bank of N.Y. Trust Co.
MURPHY, Circuit Judge, concurring in the judgment.
The BAP did not abuse its discretion in refusing to recall its mandate.
Calderon v. Thompson, 523 U.S. 538, 550 (1998) (noting appellate court’s power
to recall its mandate “can be exercised only in extraordinary circumstances” to
prevent “grave, unforeseen contingencies”). Thus, I wholly join the Order and
Judgment, with particular emphasis on the holding that this court “need not
determine whether Rule 60 applies to BAP proceedings.” Majority Op. at 5.
Nevertheless, the concurring opinion contains extensive discussion of the
issue expressly not necessary for the resolution of this appeal—namely, the
dubious assertion Fed. R. Civ. P. 60(b) is applicable to proceedings in the BAP.
Concurring Op. at 1 (opining that “Evans may be correct that Fed. R. Civ. P. 60
applies to BAP proceedings”). For authority, the concurrence relies upon a
singular extant opinion, an unpublished decision of the Ninth Circuit providing no
analysis. Concurring Op. at 1-2 (citing Smith v. Webre (In re Smith), 335 F.
App’x 667, 668 (9th Cir. 2009)). This court has, however, in an unpublished
decision, expressed doubt as to the wholesale applicability of the Federal Rules of
Civil Procedure to the BAP. Taumoepeau v. Mfrs. & Traders Trust Co. (In re
Taumoepeau), 523 F.3d 1213, 1218 (10th Cir. 2008) (“[W]e do not in any way
suggest that the Federal Rules of Civil Procedure apply wholesale to proceedings
before the BAP.”). There is good reason for such doubt. The Federal Rules of
Civil Procedure are generally rules governing trial court proceedings, not
appellate proceedings such as bankruptcy appeals, and have a scope and
articulation consistent with such a specific role. 1 The BAP’s own rules are clear:
only Part VIII of the Federal Rules of Bankruptcy Procedure apply to the BAP.
Tenth Circuit BAP L.R. 8018-1. Thus, by local rule, Rule 60(b) is inapplicable to
BAP proceedings. Furthermore, Tenth Circuit BAP L.R. 8018-1 is fully
consistent with Federal Rule of Bankruptcy Procedure 8018. See Fed. R. Bankr.
P. 8018 (providing that “[c]ircuit councils which have authorized bankruptcy
appellate panels . . . may . . . make and amend rules governing practice and
procedure for appeals from orders or judgments of bankruptcy judges to the
respective bankruptcy appellate panel”).
1
The concurring opinion places great stock in the fact both the D.C. Circuit
and Charles A. Wright’s Practice and Procedure treatise draw comparisons
between factors appellate courts might utilize in deciding whether to recall a
mandate and factors set out in Rule 60(b) empowering district courts to set aside
judgments previously entered. While there may be common considerations as to
whether an appellate court should recall its mandate and a trial court set aside a
judgment, that does not mean Rule 60(b) is applicable to the BAP. In particular,
this court has described one of the D.C. Circuit cases relied upon by the
concurrence as supporting the following limited rule: “[A]n appellate court has
power to set aside at any time a mandate that was procured by fraud or act to
prevent an injustice, or to preserve the integrity of the judicial process. Although
the rule is stated in broad terms, the appellate courts have emphasized that the
power to recall or modify a mandate is limited and should be exercised only in
extraordinary circumstances.” Ute Indian Tribe of the Uintah & Ouray
Reservation v. Utah, 114 F.3d 1513, 1522 (10th Cir. 1997) (quotation and
citations omitted). No court, specifically including those cited in the
concurrence, has ever considered whether each and every ground for relief set out
in Rule 60(b) is also available as a ground for an appellate court to recall its
mandate. Likewise, no court has considered whether the limitations on granting
relief set out in Rule 60 apply to an appellate court’s discretion to recall its
mandate.
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Because resolution of the issue is not necessary to resolve this appeal, the
parties’ briefing of the issue is not remotely helpful or informative, and the
resolution of the issue is far from clear, the better course would be to avoid
opining on the issue. I offer up my own comments on the issue for the very
limited purpose of providing some of the considerations indicating Fed. R. Civ. P.
60 does not apply to BAP proceedings.
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12-1223 - Evans v. Bank of New York Trust
HARTZ, Circuit Judge, concurring:
I write separately to comment on an issue raised by appellant Evans but not
addressed in the panel opinion.
Evans may be correct that Fed. R. Civ. P. 60 applies to BAP proceedings.
Bankruptcy Rule 1001 states that the “Bankruptcy Rules and Forms govern
procedure in cases under title 11 of the United States Code.” One might assume
that “cases” refers only to trial matters, not appellate proceedings. But Part VIII
of the Rules sets forth rules for appeals to the district court or BAP, so such
proceedings must have been considered by the enacters of the Rules as “cases
under title 11.” Moreover, Part IX of the Rules, which includes Rule 9024,
includes no scope provision limiting its application to bankruptcy courts. 1 And
the apparent anomaly of applying Rule 60 to the BAP is perhaps not so strange
when one notes that the Federal Rules of Civil Procedure do not appear to exclude
bankruptcy appeals to the district court from the district-court matters to which
Rule 60 applies. See Fed. R. Civ. P. 81 (setting forth certain district-court
proceedings to which the Rules of Civil Procedure do not apply or apply only in
part); cf. id. Rule 81(a)(2) (stating, “[t]hese rules apply to bankruptcy proceedings
to the extent provided by the Federal Rules of Bankruptcy Procedure,” thereby
1
I should also note that a local rule cannot override a Federal Rule of
Bankruptcy Procedure.
coming full circle and leaving to the bankruptcy rules whether Rule 60 applies to
bankruptcy appeals to the district court). It is thus not totally surprising that an
unpublished opinion of the Ninth Circuit appears to have applied Rule 60 to a
BAP proceeding, although without any analysis. See Smith v. Webre (In re
Smith), 335 F. App’x 667, 668 (9th Cir. 2009).
Although the rules committees may wish to clarify this point, almost
nothing turns on it. The panel opinion in this case is limited in scope; it states
only that a motion to set aside the BAP’s prior sanctions order on the ground that
the BAP lacked subject-matter jurisdiction is rejected for essentially the same
reason whether the motion is considered to be a motion under Rule 60(b)(4) or a
motion to recall the mandate. But the congruence between Rule 60 and the
doctrine on recalling a mandate extends much further than just consideration of a
challenge to subject-matter jurisdiction. The circumstances in which a mandate
can be recalled that are discussed in Greater Boston Television Corp. v. FCC, 463
F.2d 268, 277–80 (D.C. Cir. 1971)—a decision we endorsed in Ute Indian Tribe
of Uintah & Ouray Reservation v. Utah, 114 F.3d 1513, 1522 (10th Cir.
1997)—and in 16 Charles A. Wright, et al., Federal Practice and Procedure §
3938 (2d ed. 1996), are redolent of the circumstances set forth in Rule 60. I agree
with the D.C. Circuit, which has “long treated motions to recall mandates as the
equivalent of Rule 60(b) motions.” N. Cal. Power Agency v. Nuclear Regulatory
Comm’n, 393 F.3d 223, 225 (D.C. Cir. 2004).
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