Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

The case involves statements made by plaintiff Vehicle Market Research, Inc. (VMR) in a breach of contract case that were allegedly inconsistent with earlier statements by its sole owner, John Tagliapietra. VMR developed and owned certain intellectual property, including a software system to calculate the value of a total loss of an automobile for the purposes of the automobile insurance industry and certain “pre-existing software tools, utilities, concepts, techniques, text, research or development” used in the development of the software. When Mr. Tagliapietra filed for personal bankruptcy, he asserted that his shares in VMR were worth nothing. A few years later, as the bankruptcy was winding down, VMR sued Mitchell International, Inc., a company which held an exclusive license to VMR's technology. That case sought $4.5 million in damages for the alleged misappropriation of that technology. The question this case presented to the Tenth Circuit was whether the statements by VMR and Mr. Tagliapietra in the litigation against Mitchell were so clearly contrary to the statements made by Mr. Tagliapietra in his bankruptcy proceeding that VMR should have been judicially estopped from proceeding with its suit against Mitchell. After review, the Court concluded that neither VMR’s litigation claim for payments nor Mr. Tagliapietra’s deposition testimony in that lawsuit was clearly inconsistent with his valuation of 0.00 for his VMR stock at the time of his bankruptcy petition in 2005, the date when the initial bankruptcy representations were made. "If there were grounds for judicial estoppel, it would have to be based on a duty by Mr. Tagliapietra to amend his bankruptcy pleadings to report a possible increased value for his VMR stock at least as of the time that VMR filed its suit against Mitchell in 2009. However, our precedent is not clear on whether a debtor has a continuing duty to amend his bankruptcy schedules when the estate’s assets change in value. Given our reluctance to invoke judicial estoppel, and keeping in mind that judicial estoppel is an affirmative defense that its proponent must prove, we conclude that in this case Mitchell has not met its burden of showing any clearly inconsistent statements that would warrant that relief." View "Vehicle Market Research v. Mitchell International" on Justia Law

This appeal stemmed from an adversary proceeding initiated by Appellant James Vaughn within his Chapter 11 bankruptcy. Appellant sought a declaration that his taxes assessed for the years 1999 and 2000 were dischargeable. After a trial, the bankruptcy court determined the taxes were not dischargeable because Appellant had filed a fraudulent tax return and sought to evade those taxes. The bankruptcy court's decision was affirmed by the federal district court on appeal. Appellant appealed the district court's order affirming the bankruptcy court's decision. Finding no reversible error, the Tenth Circuit affirmed the district court's affirming of the bankruptcy court's decision. View "In re: Vaughn, et al" on Justia Law

Thomas Hale filed for bankruptcy in 2005. During the course of that bankruptcy, he allegedly lied under oath and attempted to conceal from the bankruptcy trustee an agreement to sell property. After his relationship with the trustee became antagonistic, Hale sent her a package with unidentified material and a note that said, "Possible Haz-mat? Termites or Hanta virus [sic] from mice?" In 2013, Hale was convicted of making a materially false statement under oath in a bankruptcy case, concealing a contract from the bankruptcy trustee and creditors, and perpetrating a hoax regarding the transmission of a biological agent. Upon review of Hale's appeal, the Tenth Circuit affirmed in part and reversed in part: "instead of charging Hale with 'making a false declaration, certificate, verification, or statement under penalty of perjury' with regard to his representations in [his bankruptcy petition,] Hale was charged with falsely answering a temporally ambiguous question that inquired about numerous filings and was asked nearly a year after the documents were submitted. We do not think it proper to condone the prosecution’s creation of this ambiguity. We thus conclude that the error 'seriously affects the fairness, integrity, or public reputation of judicial proceedings.'" The Court reversed the conviction with regard to the false statement, but affirmed in all other respects. View "United States v. Hale" on Justia Law

In August 2007, C.W. Mining, an entity operating a coal mine in Utah, deposited $362,000 with the Bank of Utah; in turn, the Bank issued a certificate of deposit to C.W. Mining for that same amount. In January 2008, creditors filed an involuntary Chapter 11 bankruptcy petition against C.W. Mining. The Chapter 11 proceeding was converted to a Chapter 7. The Bank liquidated the certificate of deposit, which then had a value of $383,099. Utilizing its common-law right of offset, it applied the proceeds to the balance owing on two of three promissory notes executed by C.W. Mining in favor of the Bank in 2005, 2006, and 2007. Although the Bank knew of the bankruptcy proceeding when it liquidated the certificate of deposit, it did not inform the Trustee. The Trustee became aware of the transfer after the Bank assigned its remaining secured interest in the promissory notes and loan agreements to a third party and the third party sought payment from the Estate. The Trustee then commenced an adversary proceeding seeking to recover $383,099 from the Bank. The parties filed cross-motions for summary judgment. In his motion, the Trustee argued the transfer should be avoided under 11 U.S.C. 549 as an unauthorized post-petition transfer and he should have been permitted to recover the $383,099 pursuant to 11 U.S.C. 550. In the alternative, he sought a declaration the transfer was void as a violation of the automatic stay under 11 U.S.C. 362(a) and an order for turnover pursuant to 11 U.S.C. 542. After considering all of these arguments, the bankruptcy court entered summary judgment in favor of the Bank. Finding no reversible error, the Tenth Circuit affirmed the grant of summary judgment to the Bank. View "C.W. Mining Company, et al v. Bank of Utah, et al" on Justia Law

In consolidated appeals from two Chapter 13 bankruptcy proceedings, the Debtors challenged the district court’s order reversing confirmation of their reorganization plans and remanding their cases to the bankruptcy court for further proceedings. Because the Tenth Circuit concluded it lacked jurisdiction to consider these appeals, the Court dismissed them. View "Gordon, et al v. Bank of America, N.A., et al" on Justia Law

Appellant First National Bank of Durango appealed the Bankruptcy Appellate Panel's (BAP's) decision to affirm the bankruptcy court's confirmation of the Chapter 12 bankruptcy plan of Appellees Reson and Shaun Woods. Although First National Bank raised several issues on appeal, the Tenth Circuit only reached the first: whether the Debtors were permitted to seek relief under Chapter 12 as "family farmers." The issue was one of first impression for the Tenth Circuit: when does a debt "for" a principal residence "arise[] out of a farming operation"? Upon review, the Court concluded that such a debt so arises if it is directly and substantially connected to any of the activities constituting a "farming operation" within the meaning of 11 U.S.C. 101(21). If the loan proceeds were used directly for or in a farming operation, the debt "arises out of" that farming operation. Because the Court concluded that the bankruptcy court did not apply the proper legal standard and test in its analysis of Debtors' eligibility for Chapter 12 relief, the Court remanded the case back to the bankruptcy court so that the correct law could be applied to the facts of this case. View "First National Bank of Durango, et al v. Woods, et al" on Justia Law

In this appeal, the Tenth Circuit considered a novel question: Does issue preclusion apply in bankruptcy court to a final determination in district court that a party waived an issue? Upon review of the circumstances of this case and the applicable statutes, the Court concluded issue preclusion did not apply to the waiver finding here. The Court reversed the judgment of the Bankruptcy Appellate Panel and remanded this case for the bankruptcy court to reinstate its order. View "Clark v. Zwanziger" on Justia Law

C.W. Mining Company filed for Chapter 7 bankruptcy. This case arose from the sale of assets from the company's bankruptcy estate. The four appellants did business with C.W. Mining before its involuntary bankruptcy. Appellants claimed bankruptcy trustee should not have sold certain assets to plaintiff Rhino Energy, LLC. The Tenth Circuit surmised that the question for each appellant in this case was whether relief could be granted that would not impact the sale's validity. The Court: (1) dismissed Rhino and its wholly owned subsidiary, Castle Valley Mining, LLC, from the appeals, finding no appeal sought any relief affecting either entity; (2) agreed with the district court with regard to appellee Kenneth Rushton (the bankruptcy trustee in this case), that ANR Company's appeal, COP Coal Development Company's first appeal, and Hiawatha Coal Company's first appeal were all moot; (3) affirmed the district court on COP's and Hiawatha's second appeals; and (4) reversed with regard to Charles Reynolds' appeal. View "ANR Company, Inc. v. C.O.P. Coal Development Co." on Justia Law

The sole issue presented to the Tenth Circuit in this appeal stemmed on whether the bankruptcy trustee could avoid an entire annual transfer or only a portion exceeding 15% a restricted debtor's gross annual income to a religious or charitable organization. The bankruptcy court and Bankruptcy Court of Appeals (BAP) said circumstances here only permitted the trustee to avoid the portion of the transfer exceeding 15%. Because that result was contrary to the plain language of the statute, the Tenth Circuit reversed. View "Wadsworth v. The Word of Life Center" on Justia Law

Cross-Appellee/Appellant Eloisa Taylor appealed a decision of the Bankruptcy Appellate Panel of the Tenth Circuit (BAP) that affirmed a United States Bankruptcy Court decision. The bankruptcy court granted summary judgment in favor of Eloisa’s former spouse, Matthew Taylor. The bankruptcy court determined that a $50,660.59 debt Eloisa owed to Matthew for overpayment of spousal support was nondischargeable because Eloisa incurred the debt “in connection with a separation agreement.” Matthew’s assertion that the debt was nondischargeable under 11 U.S.C. 523(a)(5) as a “domestic support obligation” was previously dismissed by the bankruptcy court for failure to state a claim. Matthew filed a cross appeal from that ruling and from the BAP’s ruling that neither it, nor the bankruptcy court, had authority under the parties’ divorce settlement agreement to award Matthew attorney fees that he incurred during the bankruptcy proceeding. The Tenth Circuit agreed with the bankruptcy court’s ruling that the debt was nondischargeable under section 523(a)(15). With regard to Matthew’s cross appeal, the Court affirmed both the bankruptcy court’s ruling that the debt was not excepted from discharge under 523(a)(5), and the BAP’s denial of Matthew’s request for attorney fees. View "Taylor v. Taylor" on Justia Law