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Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 

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URITBD STA.TBS COURT OF APPEALS 'I'enth r.ircui, . . . -

TER'l'II CIRCUIT 

In re; SCOTT'S AUTO SUPPLY, INC., ) 

) 

_________________ Debtor. ) ) 

) 

PETER WOODS , ) 

) 

Plaintiff-Appellant, ) 

) 

v. ) 

) 

SCOTT'S AUTO SUPPLY, INC., ) 

) 

Defendant-Appellee. ) 

ORDER AND JUDGMENT* 

JAN 141991 

ROBERT L. HOEC:~R 

Clerk 

No. 90-2027 

(D. New Mexico) 

(D.C. No. 88-1063) 

Before ANDERSON, BALDOCK, and EBEL, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

Peter Woods appeals from a judgment in which the district 

court found that: 1) Woods was without standing to appeal a bankruptcy court order that denied his motion to dismiss a corporate 

Chapter 11 proceeding filed by Scott's Auto Supply, Inc. and 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppal. 10th Cir. R. 

36.3. 

Appellate Case: 90-2027 Document: 010110076385 Date Filed: 01/14/1991 Page: 1 
J 

confirmed a plan for reorganizing the debtor's business; and 2) 

the plan for reorganizing Scott's Auto was filed in good faith. 

We agree with the district court's decision as to standing and, 

therefore, do not reach the merits of the good faith issue. 

The origins of this action date back to 1985, when Lloyd and 

Annette Scott and Peter Woods entered into a stipulated judgment 

against the Scotts personally and in favor of Woods. The judgment 

provided that in December of 1986 Woods would begin to collect 

money owed to him by the Scotts. When the Scotts did not pay in 

accordance with the stipulation, Woods caused a writ of garnishment to be served on Lloyd and Annette Scott's employer, Scott's 

Auto Supply, Inc. In February of 1987, after Scott's Auto failed 

to respond to the writ, the_ New Mexico district court entered a 

default judgment against the corporation for approximately 

$151,000. 

A writ of execution was then directed against Scott's Auto, 

and the local sheriff seized the property. Three days later, 

Lloyd and Annette Scott, as individuals, filed for Chapter 11 

protection. The following month, Scott's Auto Supply, Inc. 

petitioned for Chapter 11 relief. The store was then reopened and 

Woods' collection efforts stayed. 

In December of 1987, the bankruptcy court dismissed Lloyd and 

Annette Scott's personal Chapter 11 petition as a bad faith filing 

in a one-debtor/one-creditor proceeding. On May 5, 1988, it 

rendered summary judgment in the corporate Chapter 11 proceeding 

in favor of Scott's Auto and voided the 1985 stipulated judgment 

between Peter Woods and the Scotts as a fraudulent obligation 

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under S 548 of the Bankruptcy Code. On July 25, 1988, the court 

disallowed two of Woods' claims against Scott's Auto, based on the 

previous summary judgment. Woods did not appeal either the May or 

July orders. 

Woods filed a motion to dismiss the corporate Chapter 11 

petition as a bad faith filing on August 25, 1988. Treating the 

motion both as an objection to confirmation and as a motion to 

dismiss, the bankruptcy court overruled all grounds for objection, 

denied the motion, and confirmed the debtor's reorganization plan. 

On September 6, 1988, Woods appealed to the district court, 

which found that Woods lacked standing to appeal and that, even if 

he were found to have standing, the debtor's corporate reorganization plan was filed in good _ faith. Woods now appeals to t _his 

court. 

The requirement of appellate standing in bankruptcy cases has 

its roots in section 39(c) of the Bankruptcy Code of 1898, which 

permitted appeal by a "person aggrieved by an order of a referee." 

11 u.s.c. S 67(c) (1976) (repealed 1978). While there is no 

statutory provision comparable to section 39(c) in the current 

Code, the Tenth Circuit has specifically adopted the aggrieved 

person standard as the governing principle in determining 

appellate standing in bankruptcy proceedings. Holmes v. Silver 

Wings Aviation, 881 F.2d 939, 940 (10th Cir. 1989). Under this 

standard, the litigant must be "directly and adversely affected 

pecuniarily by an order of the bankruptcy court," and the order 

must "diminish the debtor's property, increase his burdens, or 

detrimentally affect his rights." Fondiller v. Robertson (In re 

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Fondiller), 707 F.2d 441, 442 (9th Cir. 1983); see also In re El 

San Juan Hotel, 809 F.2d 151 (1st Cir. 1987) (overview of appellate standing in bankruptcy proceedings). 

~n this case, Peter Woods was an aggrieved party with standing to appeal when the bankruptcy court rendered summary judgment 

for Scott's Auto Supply, Inc. and voided the judgment he had 

obtained in the prior state court proceeding. Plainly, Woods' 

pecuniary rights had been "directly and adversely affected" by the 

bankruptcy court's decision of May 5, 1988. It was, therefore, 

incumbent upon Woods to timely appeal that decision, for only 

through filing an appeal could Woods preserve his status as an 

aggrieved party and, thus, his standing to raise the issue of bad 

faith. When Woods failed to appeal, the summary judgment became 

final. Woods lost his status as an aggrieved party and, with it, 

his standing to object to the proposed reorganization plan. 

Because the district court was correct in its ruling that 

Woods was without standing to appeal the bankruptcy court order 

that denied his motion to dismiss, we dismiss the appeal without 

reaching Woods' contention that the plan for reorganizing Scott's 

Auto was filed in bad faith. 

APPEAL DISMISSED • . The mandate shall issue forthwith. 

ENTERED FOR THE COURT 

Stephen H. Anderson 

Circuit Judge 

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