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Parties Involved:
Jerome Griggs Beery
Appellant
Lloyd C. Swartz
Appellee

Document Text:

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FI LED 

UNITED STATES COURT OF APPEALS 

United Stat'!s Court of Appeals 

T~t!.1 Ci:cuir 

TENTH CIRCUIT 

IN RE: JEROME GRIGGS BEERY, 

doing business as JEROME G. 

BEERY BROWNVILLE GRAIN COMPANY, 

Debtor. 

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JEROME GRIGGS BEERY, doing 

business as JEROME G. BEERY 

BROWNVILLE GRAIN COMPANY, 

Appellant, 

v. 

LLOYD C. SWARTZ, Trustee, 

Appellee. 

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FEB 1 1 91 

ROBERT L. HOECKER 

Clerk 

Consolidated Nos.: 

90-3206 

90-3212 

90-3213 

District Court Nos.: 

87-4163-R 

88-4167-R 

88-4246-R 

(District of Kansas) 

ORDER AND JUDGMENT* 

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 

assi st the determination of this appeal. See Fed. R. App. P. 

3 4(a); 10th Cir. R. 34.1.9. The cause is therefore ordered 

s ubmitted without oral argument. 

These are three prose appeals by Jerome Griggs Beery from 

o r ders of the district court affirming decisions of the bankruptcy 

* This order and judgment has no precedential value and shall 

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

exce pt for purposes of establishing the doctrines of the law of 

t he case, res judicata, or collateral estoppel. 10th Cir. R. 

36 . 3 . 

Appellate Case: 90-3213 Document: 010110098411 Date Filed: 02/01/1991 Page: 1 
f court. Beery's bankruptcy proceedings, which include a criminal 

conviction for fraudulently concealing assets, United States v. 

Beery, 752 F.2d 499 (10th Cir. 1985), United States v. Beery, 678 

F.2d 856 (10th Cir. 1982), and a subsequent order denying him a 

discharge in bankruptcy pursuant to 11 U.S.C. § 32(c)(l), are now 

in their fifteenth year. An outline of the history of the 

proceedings is contained in the June 4, 1990, Memorandum and Order 

of the district court in appeal docket no. 90-3206, which we have 

attached hereto and incorporate by this reference. R. Vol. I, Tab 

13. Mr. Beery's opposition has been unremitting, as exemplified 

by the three appeals now before us, which we have companioned for 

purposes of disposition. In support of these appeals Beery 

essentially relies upon memoranda which he filed in the district 

court. The trustee has declined to file any brief. We affirm the 

district court in each appeal. 

APPEAL NO. 90-3206 

In this appeal Beery contends that objections to discharge 

were not timely filed by the correct parties, that the bankruptcy 

court's five year delay in setting a trial date violated the rules 

(referring primarily to an excerpt from the Trustee's handbook), 

and that objections to discharge were not raised and heard in a 

timely fashion (specifically, that the bankruptcy court was not 

entitled to grant the continuances which it granted). Beery also 

claims on appeal that his "civil rights have been violated by 

Judge Rogers for over 14 years and [he] should be allowed to 

appear in person before the 10th Circuit and present [his] 

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complaints.'' Appellant's Opening Brief at 4. The latter 

contention was not raised in the courts below and we do not 

address it here. 

The district court addressed each of the contentions just 

outlined in a detailed Memorandum and Order dated June 4, 1990, R. 

Vol. I, Tab 13, a copy of which is attached hereto. We have 

examined the record and Mr. Beery's arguments, and we are in 

complete agreement with the district court. Accordingly, we 

affirm on the grounds and for the reasons set forth in the 

district court's Memorandum and Order referred to above. 

APPEAL NO. 90-3212 

In September, 1987, the trustee prepared and filed federal 

and state income tax returns for the bankruptcy estate for the 

years 1976 through 1986. In those returns the trustee made 

substantial loss carryover use of sizeable prepetition losses 

arising from Beery's business. Beery filed an objection to the 

returns in the form of a "Motion for Stay of All Proceedings Until 

Question of Fraudulent Tax Returns Filed by the Trustee is 

Resolved and Request for Evidentiary Hearing on this Motion." The 

amounts of the losses to be carried forward were arrived at in 

settlement between the Internal Revenue Service and the trustee, 

Order of United States Bankruptcy Court for the District of 

Kansas, July 6, 1988, R. Vol. II, Doc. 2124 at p.l, and the 

resulting returns are in no way fraudulent. 

In support of his motion Beery argued that loss carryovers 

were not property of the estate, citing Segal v. Rochelle, 382 

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U.S. 375 (1966), and could not be used against the income of the 

estate since "in the absence of express statutory provisions, 

[loss carryovers] may not ordinarily be offset against income of 

another taxpayer.'' Memorandum in Support of Motion for Stay of 

All Proceedings, R. Vol. II, Doc. 2038. On appeal, Beery cites 

Davis v. Commissioner, 69 T.C. 814 (1978), in further support of 

the proposition that net operating loss carryovers are not 

transferable and, therefore, cannot be property of the bankruptcy 

estate of an individual. 

We agree with the district court that Segal is distinguishable essentially for reasons set forth both in Segal and in Davis. 

In Davis the tax court pointed out that the loss carryover in that 

case could produce nothing for the creditors, that the use of loss 

carryovers in bankruptcy might prolong bankruptcy proceedings, and 

that the use of loss carryovers would assist the bankrupt in the 

bankrupt's fresh start, and encourage the bankrupt to earn more 

after discharge in order to have earnings against which the losses 

could be offset. Davis v. Commissioner, 69 T.C. at 828-29. In 

the case before us the trustee was able to make substantial use of 

the loss carryovers, to the benefit of creditors; Beery has been 

denied discharge; and, Beery has failed to advance any evidence 

that he could have used the carryovers personally. 

We are unpersuaded by Beery's reference to the position of 

the tax court in Davis that prepetition losses of an individual 

cannot become property of the individual's estate in bankruptcy. 

We need not decide that question of law here. The order of the 

bankruptcy court makes it clear that the IRS has worked with the 

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trustee with respect to the loss carryovers in question, arrived 

at a settlement as to the appropriate amount, and has accepted the 

returns as filed. It is not for Mr. Beery to assume the position 

of the IRS in this matter. The IRS is perfectly capable of 

assessing whether it will or will not accept the loss carryovers 

as property of the estate, usable in offsetting income of the 

estate, all to the benefit of the creditors. We will not permit a 

collateral attack upon those dealings between the trustee and the 

IRS. The place for Beery to pursue the claim he raises here is in 

his own tax returns, just as was done in Davis. He can raise his 

legal arguments in any resulting dispute with the IRS in that 

context. We note that the loss carryovers have long since 

expired, and Beery has made no showing that he has been deprived 

of the use of the loss carryovers in question, either in whole or 

in part, and, if so, why, how, and to what extent such alleged 

deprivation has occurred. 

Beery's contention that the district judge is biased against 

him and should be disqualified was not raised below and is not 

before us. 

Accordingly, substantially for the reasons set forth in the 

district court's opinion in this case, supplemented by the 

observations set forth above, we affirm the judgment of the 

district court. 

APPEAL NO. 90-3213 

In this appeal Beery raises the same three issues which he 

raised before the district court: (1) whether debtor may object to 

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claims at any time during the pendency of the bankruptcy; (2) 

whether stipulations entered into between the trustee and 

creditors are valid without the express approval of the nondischarged debtor; and (3) whether the payment of $170,000 in 

attorney's fees to Dan Turner was proper. The district court 

found that the first two contentions were improperly before the 

court because they had not been raised in the first instance in 

the bankruptcy court. Beery does not contest that conclusion in 

his pleadings on appeal. 

With respect to the attorney's fees issue Beery argued before 

the district court that the bankruptcy rules (Rule 219) were 

violated because an application for compensation and a detailed 

accounting of the work performed were not furnished. He also 

argued before the district court tpat the fees were an "under-thetable deal in which Turner agreed to withdraw his appeal if the 

current trustee would ask the court for a payment of $170,00 (sic) 

with no accounting from Turner as to what the payment was for. 

This is not surprising since Judge Pusateri and Turner have been 

close friends for years." Memorandum In Support Of Appeal, 

attached to Appellant's Opening Brief filed in no. 90-3213. 

The district court reviewed the record and found that Beery 

had not provided any persuasive basis for vacating the bankruptcy 

court's award of attorney's fees to Dan Turner, and that the rules 

were not violated in the request for fees. The district court 

found further that the record fully supports the award provided by 

the bankruptcy court. In his pleadings on appeal Beery does not 

challenge any of those specific findings by the district court, 

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and we are disinclined to speculate on Beery's behalf as to the 

basis upon which those findings may be infirm. We have examined 

the entire record designated by Beery for our review of this issue 

and find no basis therein to overturn the discretion of the 

bankruptcy court in awarding attorney's fees, or the findings of 

the district court in that regard. Accordingly, we affirm the 

district court substantially for the reasons set forth in the 

court's June 6, 1990, Memorandum and Order in this case. 

AFFIRMED. 

ENTERED FOR THE COURT 

Stephen H. Anderson 

Circuit Judge 

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IN RE: 

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IN THE UNITED STATES DISTRICT cou~ 

FOR THE DISTRICT OF KANSAS 

·!:f'\f1EJY;D <.:,,~ THC ~f)Gi<f.T 

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U.S. DISTRICT COURT 

DISTFIGT [:F ~ \~SAS 

JUN 4 3 53 frj '90 

8 Y L.::11\{).,,J!.,.tv: ·: ? U TY ,-,•1 ·; .. ,. I.:.:. :. ~t ,: , :~. 

JEROME GRIGGS BEERY, 

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Case No. 87-4163 

Debtor. ___________________ ) 

MEMORANDUM AND ORDER 

This is a bankruptcy appeal. The bankrupt, Jerome G. Beery, 

appeals from an order denying him a discharge pursuant to 11 u.s.c. 

§ 32(c)(l). 1 Having carefully reviewed the background of this 

case, the court is now prepared to rule. 

In this appeal, Beery contends that the bankruptcy court erred 

in denying him a discharge for three reasons. First, he asserts 

that the trustee's objections to discharge were not timely filed. 

Second, he argues that bankruptcy court failed to follow the 

bankruptcy rules in setting the hearing on the objections to the 

discharge. Finally, he contends that the bankruptcy court 

improperly delayed the hearing on the objections to the discharge. 

The background of this appeal is as follows. on January 16, 

1976, Beery filed a voluntary petition seeking relief under Chapter 

XI of the Bankruptcy Act. A receiver was appointed on January 19, 

1976. On April 15, 1976, the proceeding was converted to one of 

straight bankruptcy, and Beery was adjudicated a bankrupt when he 

failed to file the required verified statements and schedules. On 

1 This case is governed by the Bankruptcy Act of 1898 because 

the bankrupt filed his voluntary petition for bankruptcy in 1976, 

prior to the passage of the Bankruptcy Reform Act of 1978. 

Appellate Case: 90-3213 Document: 010110098411 Date Filed: 02/01/1991 Page: 8 
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May 13, 1976, the bankruptcy court, sua sponte, ~xtended the time 

for filing objections to discharge to November 5, 1976. Beery then 

filed a motion to reconsider the adjudication of bankruptcy. On 

November 1, 1976, the trustee filed his first motion for extension 

of time to file his objection to discharge. This motion was 

granted by the bankruptcy court. The trustee subsequently filed 

a series of motions requesting extensions of time to file his 

objection to discharge. In each instance, the motion was granted 

by the bankruptcy court. The last motion was filed by the trustee 

on August 30, 1978. This motion was also granted by the bankruptcy 

court and allowed the trustee until October 16, 1978 in which to 

file his objection to discharge. 

In July 1977, the bankruptcy court vacated the April 1976 

order so that an evidentiary hearing could be held on the issue of 

whether Beery was a farmer when he filed his Chapter XI petition. 

In August 1977, the bankruptcy court recommended to this court that 

the case be partially withdrawn for a trial on this issue. This 

court subsequently entered an order partially withdrawing the case, 

and an evidentiary hearing was held in September 1977. on October 

5, 1977, this court entered an order concluding that Beery was not 

a farmer as defined by the Bankruptcy Act and overruling Beery's 

motion for reconsideration of the bankruptcy judge's orders 

converting the case to a straight bankruptcy proceeding and 

adjudicating Beery a bankrupt. Beery appealed this order. 

In September 1978, Beery was indicted by a grand jury on three 

counts of concealing assets from the bankruptcy trustee and one 

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count of withholding a document from the bankruptcy trustee in 

violation of 18 u.s.c. § 152. He was also charged with perjury 

before a grand jury in violation of 18 u.s.c. § 1623. Beery was 

tried before a jury and convicted on the concealment and 

withholding counts and acquitted of perjury. Beery appealed his 

conviction. 

On October 2, 1978, the trustee filed his objection to 

discharge. The bankruptcy court immediately scheduled a pretrial 

conference on the objection for December 1, 1978. On November 1, 

1978, Beery filed a motion to dismiss the trustee's objection and 

requested that the objection to discharge be stayed until his 

appeal of this court's order of October 5, 1977 was decided by the 

Tenth Circuit. Beery subsequently failed to attend the pretrial 

conference on December 1, 1978. , On June 11, 1981, the trustee 

filed a motion to reschedule the hearing on his objection to 

discharge. The bankruptcy court granted the trustee's motion and 

scheduled the pretrial conference for November 3, 1981. In the 

order granting the trustee's motion, the bankruptcy court noted 

that "[t]he trial of (the trustee's] objection was held in abeyance 

pending a number of trials and appellate proceedings." On November 

3, 1981, the pretrial conference was continued. The bankruptcy 

court informed the parties that it would wait to conduct the 

pretrial conference after the Tenth Circuit's ruling on the October 

5, 1977 order. Beery did not object to the continuance. 

On May 14, 1982, the Tenth Circuit Court of Appeals vacated 

the criminal convictions and remanded the case to the district 

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court for further proceedings. United States v;· Beery, 678 F.2d 

856 (10th Cir. 1982). Also on May 14, 1982, the Court of Appeals 

affirmed this court's order of October 5, 1977 in the bankruptcy 

proceeding. Matter of Beery, 680 F.2d 705 (10th Cir. 1982), cert. 

denied, 459 U.S. 1037 (1982). On June 14, 1983, an evidentiary 

hearing was held in district court in Beery' s criminal case. 

Following the hearing, the district court reinstated Beery's 

convictions. Beery again appealed. 

On August 29, 1983, following denial of certiorari by the 

United States Supreme Court in Matter of Beery, the trustee filed 

a motion for hearing on his objection to discharge. On September 

6, 1983, the bankruptcy court scheduled the hearing for November 

28 and 29, 1983. Beery informed the court on November 9, 1983 that 

the hearing on the trustee's objection to discharge should not be 

held until the appellate proceedings on his criminal case were 

concluded. The hearing was subsequently continued until June 11, 

1984. On June 1, 1984, Beery again objected to the scheduling of 

the hearing prior to the completion of his criminal case. Beery 

also filed a motion to dismiss on that date in which he contended 

that the trustee's objection should be dismissed because of the 

long delay by the trustee in filing the objection. On June 11, 

1984, the bankruptcy court notified the parties that the hearing 

would proceed. On June 12, the bankruptcy court denied Beery's 

motion for a continuance of the hearing. Following the hearing, 

the bankruptcy court ordered the parties to submit findings of fact 

and conclusions of law by August 13, 1984. On August 14, 1984, 

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Beery filed his suggested findings of fact and c0.nclusions of law 

and again argued that it was premature to consider the trustee's 

objection to discharge prior to a decision by the Tenth Circuit in 

his criminal case. 

On January 9, 1985, the Tenth Circuit affirmed Beery's 

criminal convictions. United States v. Beery. 752 F.2d 499 (10th 

Cir. 1985), cert. denied, 471 U.S. 1066 (1985). The bankruptcy 

court subsequently issued an order directing Beery to show cause 

why his discharge should not be denied. on May 11, 1987, the 

bankruptcy court denied Beery's discharge pursuant to 11 u.s.c. § 

32(c) (1). Beery followed with this appeal. 

With this background, we shall proceed to the issues raised 

by Beery. He first argues that the objections to discharge filed 

by the trustee were not timely filed. He points out that 

objections to discharge are required by 11 u.s.c. § 32(b) (1) to be 

filed within thirty to ninety days after the first meeting of the 

creditors, and the trustee did not file his objections until 

October 1978 after receiving an extension to file such objections 

in August 1978. 

Section 32(b) (1) does provide that the bankruptcy court shall 

fix a time for the filing of objections to a bankrupt's discharge 

within thirty to ninety days after the first date set for the first 

meeting of creditors. However, Bankruptcy Rule 404(c) allows the 

court for cause, on its own initiative or on application of any 

party in interest, to extend the time for filing a complaint 

objecting to discharge. Rule 404 (c) must be broadly read to 

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authorize the bankruptcy court, at its discretion, to extend the 

discharge date, either before or after expiration of the deadline 

originally set. Recile v. Ward, 496 F.2d 675, 680-81 (5th Cir. 

1974), modified on other grounds, 503 F.2d 1374 (5th Cir. 1974). 

The bankruptcy court granted the trustee several extensions 

of time to file his objection to discharge. On each occasion, the 

trustee demonstrated good cause for the granting of the extension. 

The trustee noted that additional time was necessary to complete 

audits and to investigate transfers, unreported assets and other 

financial affairs of Beery. This was an enormously complex 

bankruptcy which was made more complex by Beery' s efforts to 

conceal assets. We find no abuse of discretion in the decisions 

of the bankruptcy court to provide the trustee with extensions of 

time in which to file his objection to discharge. The 

circumstances of this case dictated the trustee's delay in filing 

his objection to discharge. Accordingly, we find no merit to the 

argument made by Beery. 

Beery next contends that the delay in setting a hearing on 

the trustee's objections to discharge violated the Bankruptcy 

Rules. The Bankruptcy Rules provide that the bankruptcy court 

shall set a hearing if any objections to discharge are filed "at 

such time as will give the bankrupt and the objecting parties a 

reasonable opportunity to be fully heard." 11 u.s.c. § 32(b) (2). 

Under the peculiar circumstances of this case, we do not find 

any violation of the rules by the bankruptcy court. The rules do 

not establish a specific time period for setting the hearing on the 

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objections to discharge. The setting by the 1ankruptcy court 

complied with the provisions of 11 U.S.C. § 32(b) (2) in that both 

sides were given a reasonable opportunity to be fully heard. Beery 

made repeated requests for continuances of the hearing. Beery 

cannot continuously seek continuances and stays and then argue that 

the hearing was improperly delayed. 

Finally, we consider Beery's last argument. He contends that 

the bankruptcy court improperly delayed the hearing on the 

objections to discharge. He relies upon Wolfe v. Tri-State 

Insurance Co., 407 F.2d 16 (10th cir. 1969) and Matter of Stafos, 

666 F.2d 1343 {10th Cir. 1981) for support. 

In Wolfe, the Tenth circuit found that the bankrupt was 

entitled to discharge on unconscionability grounds due to the long 

delay between the filings of objections to discharge and the 

hearing on those objections. The Court stated: 

[T]he unconscionable delay of over 5 years clearly 

violated Order 32 of General Orders in Bankruptcy, 11 

u.s.c. page 2013, which directs that a time should be 

fixed for objections to a discharge; and the courts have 

held that the bankrupt is entitled to prompt hearings on 

application for a discharge, and that the judge will hear 

the matter at the "earliest opportunity." In re Karp. 

11 F.Supp. 129 (D.C.Conn. 1935). The record is silent 

as to the reasons why there was no earlier opportunity 

for the judge to hear this matter. The objecting 

creditors offer no explanation for this delay. The 

bankrupts should not be made to answer for it. 

407 F.2d at 20. 

In Stafos, the bankrupt sought to rely upon Wolfe in arguing 

that the long delay from his filing for bankruptcy in December 1970 

to the bankruptcy court's denial of discharge in January 1979 

entitled him to discharge on unconscionability grounds. The Tenth 

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~ Circuit, however, distinguished Wolfe. 666 F.2d;at 1347-48. The 

Court found that much of the delay in Stafos was caused by the 

bankrupt. Id. at 1348. Accordingly, the Court concluded that 

delay was not unconscionable and did not entitle the bankrupt to 

a discharge. Id. 

The instant case is similar to Stafos. The bankruptcy court 

noted that most of the delays in this case were caused by Beery. 

We agree. The record is replete with examples of delays caused by 

the bankrupt. Accordingly, we find no merit to the argument raised 

by Beery. 

In sum, the bankruptcy court's decision denying the bankrupt's 

discharge must be affirmed. 

IT IS SO ORDERED. 

Dated this 4 rl day of June, 1990 at Topeka, Kansas. 

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