Diane S. Blodgett v. John R. Stoebner , 343 F. App'x 171 ( 2009 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 08-3577
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In re: T.G. Morgan, Inc., *
*
Debtor, *
____________________ *
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Diane S. Blodgett, *
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Appellant, *
* Appeal from the United States
v. * Bankruptcy Appellate Panel
* for the Eighth Circuit.
John R. Stoebner, *
* [UNPUBLISHED]
Appellee, *
____________________ *
*
Edward Clement; Audrey Florence; *
Tom Lingenfelter, *
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Appellants, *
*
v. *
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John R. Stoebner, *
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Appellee, *
____________________ *
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Diane S. Blodgett; Edward Clement; *
Audrey Florence; Tom Lingenfelter, *
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Appellants, *
*
v. *
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John R. Stoebner, *
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Appellee. *
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Submitted: June 11, 2009
Filed: August 27, 2009
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Before MELLOY, BEAM, and COLLOTON, Circuit Judges.
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PER CURIAM.
Diane S. Blodgett, Edward Clement, Audrey Florence, and Tom Lingenfelter
appeal a decision of the Bankruptcy Appellate Panel (“BAP”) affirming the
bankruptcy court’s* denial of their objections to the Chapter 7 Trustee’s Final Report
and of their motion under Federal Rule of Civil Procedure 60(b). This appeal arises
out of the involuntary bankruptcy of T.G. Morgan, Inc., a rare coin investment group
that was sued by the Federal Trade Commission and eventually reached a settlement
with the Commission. Appellants have been parties to various disputes in the
bankruptcy proceedings, which began over seventeen years ago and have resulted in
several previous appeals to this court. See, e.g., Lingenfelter v. Stoebner, 188 F.
App’x 554 (8th Cir. 2006); Stoebner v. Lingenfelter, 115 F.3d 576 (8th Cir. 1997);
Stoebner v. Blodgett, No. 96-1083, 1996 WL 563881 (8th Cir. Oct. 4, 1996); Stoebner
v. Parry, Murray, Ward & Moxley, 91 F.3d 1091 (8th Cir. 1996).
*
The Honorable Robert J. Kressel, United States Bankruptcy Judge for the
District of Minnesota.
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On July 23, 2007, the Chapter 7 trustee, John R. Stoebner, submitted his Final
Report and Proposed Distribution, which sought to distribute the remaining funds in
the bankruptcy estate to pay the claims of unsecured creditors and administrative
expenses, including trustee’s and attorney’s fees. Appellants objected to the final
report, arguing that the Trustee had breached his fiduciary duties and taken other
illegal actions throughout the bankruptcy proceedings. On August 27, 2007, the
Trustee responded to the objections and gave notice of a hearing on the objections
before the bankruptcy court on September 5, 2007. On the same day as the hearing,
at which the appellants did not appear, the bankruptcy court overruled their objections
and approved the Trustee’s report. Appellants appealed the order to the BAP.
Appellants subsequently argued in correspondence to the bankruptcy court that
they had not received notice of the hearing, and they eventually filed a Rule 60(b)
motion seeking relief from the order overruling their objections. The BAP remanded
the pending appeal to the bankruptcy court for the limited purpose of ruling on the
Rule 60(b) motion. Following a hearing, the bankruptcy court denied the motion.
Appellants moved for reconsideration, which the bankruptcy court denied. Appellants
appealed, and the BAP consolidated the two appeals.
The BAP affirmed the orders of the bankruptcy court. See Blodgett v. Stoebner
(In re T.G. Morgan, Inc.), 394 B.R. 478 (8th Cir. BAP 2008). It held that the
bankruptcy court properly overruled appellants’ objections to the final report and
denied their Rule 60(b) motion. The BAP concluded that appellants lacked standing
to object to the report and that their claims were barred by res judicata and collateral
estoppel. Id. at 483-85. With respect to their claims of lack of notice, the BAP held
that appellants were not entitled to notice, because they lacked standing, and that even
if they were entitled to notice, the bankruptcy court did not err in finding that the
notice was proper under the circumstances. Id. at 485-86.
Having carefully reviewed the record, we affirm the judgment of the bankruptcy
court for the reasons stated in the BAP’s opinion. See 8th Cir. Rule 47B.
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