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

Ute Mesa, a Colorado real estate developer, received a multi-million dollar loan to construct a single family home on property it owned in Aspen. To secure the loan, United Western Bank prepared a deed of trust incorrectly identifying Ute Mesa's sole member as the owner rather than Ute Mesa. The Bank filed suit seeking a reformation of the deed of trust and a declaration that it had a first priority lien on the property. Days later, the Bank filed notice of lis pendens in the county real property records. Ute Mesa filed for Chapter 11 bankruptcy relief, and continued as debtor-in-possession of the property. Ute Mesa then filed an adversary proceeding against the Bank to avoid the lis pendens as a preferential transfer. The bankruptcy court granted the Bank's motion to dismiss, and the federal district court affirmed. Ute Mesa argued on appeal that a "transfer of an interest in property" occurs when a bona fide purchaser cannot acquire an interest superior to that of a creditor. According to Ute Mesa, because the lis pendens prevented a bona fide purchaser from acquiring an interest in the property superior to the Bank’s interest, the lis pendens qualified as a transfer of an interest in the property. The Tenth Circuit affirmed the district court's decision, finding that a lis pendens is "merely a notice" and does not constitute a lien, therefore, no transfer occurred. View "Ute Mesa Lot 1, LLC v. First Citizens Bank & Trust, et al" on Justia Law

Debtor-Appellant Market Center East Retail Property, Inc. appealed the Bankruptcy Appellate Panel's affirming of the bankruptcy court's award of attorney's fees to Appellees Barak Lurie and his firm, Lurie & Park. Lurie was Market Center’s attorney in completing the sale of a retail shopping center to Lowe’s Home Center. Market Center argued: (1) the bankruptcy court erred in calculating the amount of attorney’s fees because the bankruptcy court should have used the lodestar approach in its calculations; (2) that the 11 U.S.C. 330(a)(3) factors were an exhaustive list of factors that the bankruptcy court was required to consider; and (3) that Congress intended 11 U.S.C. 330(a) to be construed consistently with case law for awarding attorney's fees under federal fee-shifting statutes such as 42 U.S.C. 1988. While the Tenth Circuit did not agree with Market Center in all regards, the Court nonetheless reversed and remanded for reconsideration of the fees. View "Market Center East Retail Prop, et al v. Lurie, et al" on Justia Law

Plaintiffs Richard and Susan Queen sued Defendant TA Operating, LLC for an injury Mr. Queen sustained when he slipped and fell in a parking lot operated by TA. During the court of the proceedings, the Queens filed for Chapter 7 bankruptcy, but did not disclose this case in its bankruptcy pleadings. TA learned of the omission and brought it to the attention of the bankruptcy trustee. The Queens amended their bankruptcy petition, providing an estimate of the value of its litigation with TA for the slip and fall. The Queens were ultimately granted a no-asset discharge in bankruptcy. TA then moved the district court to dismiss on the grounds of judicial estoppel because the Queens did not disclose the lawsuit in their bankruptcy proceedings. The district court granted TA summary judgment, and the Queens appealed, arguing the district court erred in applying judicial estoppel. Because the Queens adopted an inconsistent position that was accepted by the bankruptcy court, and because the Queens would receive an unfair advantage if not estopped from pursuing the district court action, the Tenth Circuit concluded it was not an abuse of discretion to grant TA summary judgment. View "Queen, et al v. TA Operating, LLC" on Justia Law

Plaintiff David Newsome, a litigation trustee appointed by the bankruptcy court, administered the legal claims of Mahalo Energy (USA), Inc. He brought suit against the corporation's former directors and officers for alleged breaches of fiduciary duty. All defendants are Canadian citizens. The defendants moved to have the case dismissed for lack of personal jurisdiction. The district court granted that motion. At issue before the Tenth Circuit was whether or not the district court erred in granting that motion. The Tenth Circuit concluded that defendants cultivated sufficient contacts with the US (specifically, Oklahoma) to justify getting sued there. Furthermore, the Court held that the "fiduciary shield doctrine" did not apply in this case. The Court reversed as to individual defendants, and remanded the case for further proceedings. However, the Court affirmed dismissal with regard to the company's law firm: as an out-of-state firm that performed all of its relevant services out-of-state on an out-of-state transaction, it did not meet the minimum threshold of contact with the forum state to justify personal jurisdiction there. View "Newsome, et al v. Gallacher, et al" on Justia Law

Pro se appellant John Schoppe petitioned the Tenth Circuit for review of a Tax Court decision that found him liable for tax deficiencies for the years 2002-2007. While the case was proceeding before the Tenth Circuit, Petitioner filed a voluntary bankruptcy petition. That filing prompted the Court to request a supplemental briefing from the parties on whether the automatic bankruptcy stay would apply to appellant's appeal before the Tenth Circuit. Finding that 11 U.S.C. 362(a)(1) of the Bankruptcy Code did not stay this appeal, the Court reviewed the Tax Court decision and affirmed it. View "Schoppe v. CIR" on Justia Law

Plaintiff-Appellant Eric Rajala, Trustee of the bankruptcy estate of Generation Resources Holding Company, LLC (GRHC), appealed a district court order which granted motions by Defendants-Appellees FreeStream Capital, LLC (FreeStream) and Lookout Windpower Holding Co., LLC (LWHC) to distribute approximately $9 million held in escrow. The amount represented part of the purchase price of a wind power project allegedly developed by GRHC. The Trustee claimed that GRHC had been left with $5 million in debt while the individual Defendants-Appellees and their affiliated entities received some $13 million in proceeds from the sale of several wind power projects, unburdened by the debt. The issue on appeal before the Tenth Circuit was what constituted property of the bankruptcy estate and whether allegedly fraudulently transferred property was subject to the Bankruptcy Code's automatic stay before a trustee recovers the property through an avoidance action. The district court held that allegedly fraudulently transferred property was not part of the bankruptcy estate until recovered and therefore was beyond the reach of the automatic stay. Upon review, the Tenth Circuit affirmed: "[i]n the end, we need not pass upon the constitutionality of such a broad reading. . . . This interpretation gives Congress's chosen language its ordinary meaning, and abides by the rule against surplusage. Further, our reading does not undermine the Bankruptcy Code's goal of equitable distribution, as there exist[s] alternative means of protecting estate assets." View "Rajala v. Garnder" on Justia Law

The issue before the Tenth Circuit in this case was one of first impression: whether the 2005 amendments to the Bankruptcy code exempted Chapter 11 debtors from the absolute priority rule. The bankruptcy court answered this question affirmatively, and therefore confirmed the Debtors' proposed plan of reorganization over certain creditors' objections that the plan violated the absolute priority rule. On appeal, the bankruptcy appellate panel certified the case for direct appeal. The Tenth Circuit reversed the bankruptcy court's order confirming the plan: "here, the statutory language and legislative history lack any clear indication that Congress intended to erode a pillar of creditor bankruptcy protection." The case was remanded for further proceedings. View "Dill Oil Company, LLC, et al v. Stephens, et al" on Justia Law

William Satterfield brought suit against Patrick J. Malloy III, the court-appointed trustee of Satterfield's Chapter 7 bankruptcy estate. The district court concluded that the suit was barred because Satterfield's claims were based on actions Malloy took as trustee and Satterfield did not first obtain permission from the bankruptcy court. Satterfield contended that the controlling case law did not apply because Malloy's actions were ultra vires. Upon review, the Tenth Circuit rejected this contention; because Malloy's allegedly wrongful actions were conducted as part of Malloy's duties as trustee. Furthermore, the Court held that Satterfield's action was not authorized by 28 U.S.C. 959 because Malloy was not carrying on the business of the estate, but simply administering its liquidation. View "Satterfield v. Malloy" on Justia Law

Debtor Peter Woodman filed two timely notices of appeal from an adverse decision by the bankruptcy court. One appeal was heard by the bankruptcy appellate panel (BAP), which dismissed the appeal a month later for failure to prosecute. The other was heard by the district court, which decided to consider the matter despite the prior BAP ruling but ruled against Mr. Woodman on the merits. He appealed the district court's judgment. Finding that the district court lacked jurisdiction to hear his appeal, the Tenth Circuit Court of Appeals vacated the district court's judgment. View "Woodman v. Aspen Hills Properties, et al" on Justia Law

Debtor Fred Fausett Cranmer filed a Chapter 13 repayment plan, which excluded Social Security income (SSI) from the projected disposable income calculation. The bankruptcy trustee objected to the plan on that basis. The bankruptcy court denied confirmation of the plan, concluding, inter alia, SSI must be included in the projected disposable income calculation and Cranmer's failure to do so meant he did not propose his plan in good faith. Cranmer appealed and the district court reversed. Upon review, the Tenth Circuit Court of Appeals concluded that SSI need not be included in the calculation of projected disposable income and Cranmer's failure to include it was not grounds for finding he did not propose his plan in good faith. View "Anderson v. Cranmer" on Justia Law