Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-92-05076/USCOURTS-ca10-92-05076-0/pdf.json

Parties Involved:
Jean M. Anderson
Appellant
Lifeline Healthcare Group, Ltd.
Appellee

Document Text:

FIL ,._ .. J 

United States Co1i ~t qf Appeali, 

UNITED STATES COURT OF APPEALS '1'enth C1r,.:u1t 

FOR THE TENTH CIRCUIT FEB 1 8 1993 

JEAN M. ANDERSON, 

Plaintiff-Appellant, 

v . 

LIFELINE HEALTHCARE GROUP, LTD., 

Defendant-Appellee. 

ROBERT L. HOECKER 

Clerk 

No . 92-5076 

(D.C . No . 91-C-810-B) 

(N . D. Okla. ) 

ORDER AND JUDGMENT* 

Before ANDERSON and EBEL, Circuit Judges, and BRIMMER,** District 

Judge. 

**Honorable Clarence A. District Court for the 

designation. 

Brimmer, 

District 

District Judge, United States 

of Wyomi ng, sitting by 

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 . 

submitted without oral argument. 

* 

The case is therefore ordered 

This o r der and judgment has no precedential value and shall 

not be c i ted, 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 c ollat eral estoppel . 10th Cir. R. 

36 .3. 

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Plaintiff appeals the district court's affirmance of the 

bankruptcy court's holding regarding the disposition of profit 

sharing funds in which plaintiff claims an interest. Plaintiff's 

ex-husband, Michael Anderson, was president of the defendant 

debtor corporation. A wholly owned subsidiary of debtor 

corporation established a profit sharing trust, in which Michael 

Anderson had an account worth approximately $88,700 . 00 as of 

September 1990 . Plaintiff filed a divorce petition in Oklahoma 

state court in May 1990. At that time, the state court issued an 

order prohibiting Michael Anderson from transferring or otherwise 

disposing of any property held in either his or his wife's name , 

or in which either party claimed an interest. 

Prior to the bankruptcy filing, a special master was 

appointed to take control of the affairs of defendant debtor in 

connection with a separate case which was then pending in federal 

district court (SEC proceeding) . Also prior to commencement of 

the bankruptcy, Michael Anderson entered into a stipulation of 

settlement and release with the special master in connection with 

the SEC proceeding. In that settlement, Anderson waived any 

right, title, or interest he may have had in the profit sharing 

funds, in favor of defendant debtor corporation. The stipulation 

acknowledged plaintiff's claim to the funds in connection with the 

divo rce proceedings, and it stated that the special master 

disputed the claim of plaintiff. On September 6, 1990, de fendant 

filed a voluntary Chapter 11 bankruptcy proceeding. Shortly 

the reafter, the Oklahoma state court entered a modified orde r in 

the divorce proceeding spe c i fically prohibiting Michae l Anderson 

2 

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from transferring or disposing of his interest in the pro fit 

sharing account. 

On February 7, 1991, defendant debtor filed a motion in the 

bankruptcy court, requesting the court to approve the stipulation 

of settlement and release regarding Michael Anderson, dated 

September 6, 1990. The motion, along with a copy of the court's 

standing order regarding notice and opportunity for hearing, was 

sent to all creditors, including plaintiff. Neither plaintiff nor 

any other creditor objected to the 

settlement agreement within the 

motion for approval of the 

time set forth in the standing 

order and, consequently, the bankruptcy court entered its order 

approving the stipulation of settlement and release regarding 

Michael Anderson on March 5, 1991. 

The special master filed his plan of reorganization for 

defendant debtor on February 25, 1991, and he filed an amended 

disclosure statement for the reorganization plan on April 5, 1991. 

These documents clearly stated that, upon confirmation, all 

property would vest in the special master free and clear of all 

other claims or interest, and that the proceeds from the 

settlement with Michael Anderson (his interest in the profit 

sharing account) were a source of cash for the reorganization 

plan. Plaintiff did not object to the plan; in fact, she voted to 

accept the plan on May 13, 1991 . The plan of reorganization was 

confirmed by order of the bankruptcy court on May 23, 1991. 

The Oklahoma state court entered an order in the divorce 

proceedings on August 29, 1991, awarding to plaintiff as her sole 

and separate property" [a]ny and all of the profit sharing plan of 

3 

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Lifeline Homecare which may hereafter be recovered." App. to 

Opening Br. of Appellant at 122-23. Debtor corporation filed a 

motion with the bankruptcy court for authority to terminate the 

profit sharing trust and distribute the funds on August 12, 1991. 

Plaintiff did file an objection to that motion, claiming that her 

marital interest in Michael Anderson's profit sharing account 

survived both Anderson's assignment of his interest and its 

vesting in the special master free and clear of all claims as 

provided in the order confirming the reorganization plan. 

The bankruptcy court granted debtor corporation's motion for 

authority to terminate the profit sharing trust and distribute the 

funds, and it overruled plaintiff's objection to that motion. The 

court found that plaintiff "had knowledge of any and all of the 

activities of the Special Master, and by her inaction consented to 

the acts and activities and the approval of the disposition of the 

Profit Sharing Plan and is, accordingly, precluded and estopped 

from asserting an interest in the [profit sharing funds]." App. 

to Appellee's Answer Br., tab 8 at 44. 

The district court affirmed the bankruptcy court's ruling, 

finding that plaintiff submitted herself and her marital claim to 

the profit sharing funds, to the jurisdiction of the bankruptcy 

court by filing her claims with that court. The district court 

further found that, after the reorganization plan was confirmed, 

there remained no residue of the profit sharing funds to which the 

order of the Oklahoma state court could apply. 

We review findings of fact made by the bankruptcy court for 

clear error. Ames v. Sundance State Bank (In re Ames), 973 F.2d 

4 

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849, 850 (10th Cir.), petition for cert. filed, 61 U.S.L.W. 3446 

{U.S. Dec. 2, 1992) {No. 92-942). Legal determinations made by the 

bankruptcy court are reviewed de novo. Id. 

"Property of the estate" is broadly defined to include all 

property in which the debtor has a legal or equitable interest as 

of the commencement of the case. 11 U.S.C. § 541{a) (1). Debtor's 

profit sharing trust held legal title to the profit sharing funds, 

and, pursuant to Michael Anderson's assignment, debtor also 

alleged an equitable interest in the funds in Michael Anderson's 

profit sharing account. Because debtor had both a legal and an 

alleged equitable interest in the profit sharing funds, they were 

properly included as property of the estate. 1 Consequently, the 

bankruptcy court had jurisdiction over the dispute regarding the 

funds. See Gardner v. United States (In re Gardner). 913 F.2d 

1515, 1518 (10th Cir. 1990). Further, plaintiff submitted herself 

to the equitable power of the bankruptcy court when she filed a 

claim in the bankruptcy proceeding, asserting a marital interest 

in Michael Anderson's profit sharing account. See Bayless v. 

Adams ex rel. Crabtree, 108 B.R. 299, 304 {W.D. Okla. 1989), 

aff'd, 930 F.2d 32 {10th Cir. 1991) {table). 

The amended disclosure statement for the reorganization plan 

indicated that the profit sharing funds were to be used in the 

reorganization. Plaintiff did not object to confirmation of the 

plan; in fact, she specifically voted to accept the plan. The 

1 The record does not indicate, and neither party discloses, 

whether this profit sharing trust was a qualified Employee 

Retirement Income Security Act (ERISA) plan. Consequently, we 

express no opinion on ERISA nonalienability of the plan. 

5 

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reorganization plan disposed of plaintiff's claims against the 

profit sharing funds, and it specifically provided that all 

creditors were bound by the provisions of the plan and were barred 

from asserting claims that arose prior to the date of entry of the 

plan, as did the confirmation order. App. to Opening Br. of 

Appellant at 65; App. t o Appellee's Answer Br., tab 7 at 3; see 11 

U.S.C. § 1141(a) . 

In light of the foregoing, we hold that the bankruptcy court 

properly exercised its jurisdiction over the funds and plaintiff's 

claim thereto. Plaintiff did not object to the bankruptcy court's 

approval of the settlement agreement, and she voted to accept the 

reorganization plan. Upon confirmation of the plan, any interest 

she claimed in the funds was terminated; at that point, the funds 

vested in the special master free and clear of all claims. See 11 

u.s.c. 114l(b) and (c) . The judgment of the United States 

District Court for the Northern District of Oklahoma is AFFIRMED. 

Entered for the Court 

David M. Ebel 

Circuit Judge 

6 

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