Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-14-02120/USCOURTS-ca10-14-02120-0/pdf.json

Parties Involved:
C.D. Express, Inc.
Not Party
KLM Trust
Not Party
Leigh Corporation
Not Party
Billy R. Melot
Appellant
Katherine L. Melot
Appellant
Mirror Farms, Inc.
Not Party
Suzanne Corporation
Not Party
United States of America
Appellee

Document Text:

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

 

UNITED STATES OF AMERICA, 

 Plaintiff - Appellee, 

v. 

BILLY R. MELOT; KATHERINE L. 

MELOT, 

 Defendants - Appellants, 

and 

KLM TRUST; LEIGH CORPORATION; 

SUZANNE CORPORATION; MIRROR 

FARMS, INC.; C.D. EXPRESS, INC., 

 Defendants. 

No. 14-2120 

(D.C. No. 2:09-CV-00752-JCH-WPL) 

(D.N.M.)

 

ORDER AND JUDGMENT*

 

Before BRISCOE, Chief Judge, LUCERO, and MATHESON, 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)(2); 10th Cir. R. 34.1(G). The case is therefore 

ordered submitted without oral argument. This order and judgment is not binding 

precedent, except under the doctrines of law of the case, res judicata, and collateral 

estoppel. It may be cited, however, for its persuasive value consistent with 

Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals 

Tenth Circuit 

April 13, 2015

Elisabeth A. Shumaker 

Clerk of Court

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 Husband and wife Billy and Katherine Melot, proceeding pro se, appeal from 

the district court’s order confirming the judicial sale of several parcels of real 

property and equipment.1

 We have jurisdiction under 28 U.S.C. § 1291. Several of 

the Melots’ arguments are moot because the sale has been completed. As to those 

arguments that are not moot, we affirm the district court’s judgment. 

I 

 The Melots owe millions in unpaid federal taxes, and Mr. Melot owes millions 

more in unpaid excise taxes. Government efforts to collect this revenue have resulted 

in numerous orders and appeals. See, e.g., United States v. Melot, 562 F. App’x 646 

(10th Cir.) (unpublished), cert. denied, 135 S. Ct. 488 (2014) (Melot I); United States 

v. Melot, 768 F.3d 1082 (10th Cir. 2014) (Melot II). 

 On the issues before us, the district court granted the government’s motion to 

reduce tax assessments to judgment and to authorize the foreclosure of tax liens and 

the sale of the Melots’ real property and equipment. A receiver was appointed to 

handle the sale.2

 Following the receiver’s appointment, the government moved for an 

order confirming a judicial sale of several parcels of real property and equipment to a 

single buyer for $1,125,000. According to the government, the properties were 

placed for sale, advertised in a multiple listing service, and received several inquiries. 

 1

 Because the Melots are proceeding pro se, we construe their filings liberally. 

Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). 

2

 This court later affirmed that judgment and rejected the Melots’ objections to 

the receiver. See Melot I, 562 F. App’x at 649-50, 654. 

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They were shown by the receiver to numerous prospective buyers, and the highest 

and best offer submitted for all the properties plus equipment was $1,125,000. The 

receiver and the United States both determined that no better offer was likely to be 

submitted. 

 After initially declining to confirm the sale because the buyer and the 

government had not agreed on the water rights that were to be conveyed and 

expressing some concern that the parcels were offered for sale as a group, rather than 

separately, the district court confirmed the sale. This followed clarification of the 

agreement by the buyer and the government, and a second motion for confirmation 

by the government that provided more information about the steps the receiver had 

taken to sell the properties. However, Mrs. Melot initially refused to leave the 

property, preventing the sale from occurring. After the district court issued an order 

of forcible ejectment, Mrs. Melot relocated, allowing the sale process to continue. 

Because the initial confirmation order had by then expired, the government moved 

for a second confirmation order, which was issued by the district court on June 30, 

2014, leading to this appeal. The government informs us that the sale occurred on 

July 21, 2014, and that it received $1,035,000 from the sale. 

II 

A 

Because the property has been sold, the government contends that this appeal 

is moot. “We address the issue of mootness as a threshold question because in the 

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absence of a live case or controversy, we have no subject-matter jurisdiction over an 

appeal.” Golfland Entm’t Ctrs., Inc. v. Peak Inv., Inc. (In re BCD Corp.), 119 F.3d 

852, 856 (10th Cir. 1997). 

 “An appeal is moot if the court of appeals can no longer grant effective relief 

because the object of the suit has been transferred.” Out of Line Sports, Inc. v. 

Rollerblade, Inc., 213 F.3d 500, 501 (10th Cir. 2000). The June 30, 2014, 

confirmation order was not stayed, and the Melots’ real property and equipment were 

sold to a purchaser who is not a party to this case. We therefore cannot grant any 

relief that would have the effect of invalidating the sale. See, e.g., United States v. 

Antiques Ltd. P’ship, 760 F.3d 668, 673 (7th Cir. 2014) (“[I]n the absence of a stay 

. . . a closed sale (that is, a sale that has been executed, not just contracted for) of a 

debtor’s assets can’t be reopened.”); cf. C.O.P. Coal Dev. Co. v. C.W. Mining Co. (In 

re C.W. Mining Co.), 641 F.3d 1235, 1239 (10th Cir. 2011) (holding that Bankruptcy 

Code barred upsetting completed sale); Osborn v. Durant Bank & Trust Co. (In re 

Osborn), 24 F.3d 1199, 1203-04 (10th Cir. 1994) (same), abrogated in part on other 

grounds by Eastman v. Union Pac. R.R., 493 F.3d 1151, 1156 & n.4 (10th Cir. 2007). 

 Despite this restriction, if “it is not impossible for the court to grant some 

measure of effective relief, the . . . appeal is not moot.” In re Osborn, 24 F.3d at 

1203. It is the government’s burden to “foreclose[] the possibility that [the Melots] 

might be entitled to alternative relief that would not affect the validity of the sale.” 

In re C.W. Mining Co., 641 F.3d at 1239. In United States v. Buchman, 646 F.3d 

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409 (7th Cir. 2011), the Seventh Circuit held that an appeal was not moot even 

though the court could not overturn a completed sale to a non-party. Id. at 410-13. 

Buchman reasoned that the appellant could receive relief against the government 

despite the completed sale, such as an order directing the government to transfer 

proceeds from the sale to the appellant or vacating a deficiency judgment entered in 

favor of the government. See id. at 410-11. For similar reasons, the appeal in this 

case is not moot. But we consider only those arguments that would not inevitably 

lead to invalidating the sale itself. 

B 

 The Melots complain that the sale was improperly conducted and produced 

less than the best possible price for the properties sold. A challenge to confirmation 

based on price can succeed only if “the price is so grossly inadequate as to shock the 

conscience of the court . . . coupled with slight additional circumstances indicating 

unfairness such as chilled bidding.” Smith v. Juhan, 311 F.2d 670, 672 (10th Cir. 

1962); see also In re BCD Corp., 119 F.3d at 860 (“Juhan . . . imposes a high 

requirement for challenges based on mere inadequate price.”). 

The facts of this case fall far short of the Juhan standard. The alleged 

irregularities, namely that the receiver wrongfully advertised the properties and failed 

to pursue attractive offers, ultimately chose an offer that was lower than others, and 

allowed his own funds to be used to purchase the property, are unsupported and 

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speculative.3

 Contrary to the Melots’ arguments, the district court never required the 

government to obtain a better price than $1,125,000. Rather, the record indicates that 

the court denied the government’s first request to confirm the sale because of 

concerns that the government and the buyer were not yet in agreement on what water 

rights were included. The court did express some concern about selling the 

properties as a group, but it did not reject the $1,125,000 price. Ultimately, the 

district court approved the sale after careful consideration, and there was no 

reasonable likelihood that the receiver could have obtained a better offer. 

Accordingly, with regard to any arguments that are not moot, no relief from the June 

30, 2014, second confirmation order is warranted. 

 III 

 We GRANT the Melots’ separate motions to proceed without prepayment of 

costs and fees. The June 30, 2014, order confirming the judicial sale is AFFIRMED. 

 Entered for the Court 

 Carlos F. Lucero 

 Circuit Judge 

 3

 When it imposed sanctions on the Melots, the district court struck certain 

filings that objected to the confirmation of the sale. Those sanctions were later 

vacated. See Melot II, 768 F.3d at 1085-86. In reaching our decision, we reviewed 

all relevant district-court filings, including those that previously were stricken. 

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