United States Bankruptcy Appellate Panel

FOR THE EIGHTH CIRCUIT

_______________

No. 11-6067

_______________

In re: James Arthur Cockhren; *

 Margaret Louise Cockhren *

*

Debtors *

*

Margaret Louise Cockhren, also known *

 as Margaret L. Glass-Cockhren; *

James Arthur Cockhren, doing business *

 as Cockhren Roofing & Contracting, * Appeal from the United States

 doing business as Cockhren Housing * Bankruptcy Court for the 

 Mgmt * Northern District of Iowa

*

Debtors - Appellants *

*

v. *

*

MidWestOne Bank, its Holding Co. *

 and/or any of their Directors, Officers, *

 former and current Employees, *

 Agents and Attorneys *

*

Interested party - Appellee *

*

Michael C. Dunbar *

*

Trustee - Appellee *

_______________

Submitted: March 29, 2012

Filed: April 9, 2012

_______________
Before SCHERMER, FEDERMAN, and VENTERS, Bankruptcy Judges

FEDERMAN, Bankruptcy Judge

Debtors James and Margaret Cockhren appeal from the Bankruptcy Court’s1

Order Granting the Trustee’s Motion for Approval of Compromise or Settlement of

Controversy, relating to claims they asserted against MidWestOne Bank for lender

liability and discrimination. They also request oral argument on appeal. For the

reasons that follow, their request for oral argument is DENIED, and the Bankruptcy

Court’s Order is AFFIRMED. 

FACTUAL BACKGROUND

The source ofthe dispute between the Debtors and MidWestOne Bank is a loan

secured by the Debtors’ property, which consists of their residence and an adjacent

commercial lot. The parties have been involved in litigation over the loan since 2007. 

That litigation history is summarized as follows:

Case No. CVCV104021 - The First State Court Lender Liability Action

The Debtors, pro se, filed a lender liability action against the Bank and its

former president, James Chizek, on December 11, 2007, in the Iowa District Court

in Black Hawk County. On July 1, 2009, the Court granted the Bank’s Motion for

Summary Judgment and dismissed the case. 

 The Honorable Paul J. Kilburg, United States Bankruptcy Judge for the

1

Northern District of Iowa. 

2
Case No. EQCV104984 - The First Foreclosure Action

This was a Foreclosure Petition filed by the Bank in the Iowa District Court in

Black Hawk County on March 31, 2008. The Debtors, pro se, filed Answers and also

asserted counterclaims against the Bank and Chizek. The foreclosure was stayed by

a Chapter 13 bankruptcy filing, Case No. 08-01328, discussed immediately below. 

Based on the confirmed plan in that Chapter 13 case, the Bank dismissed the

foreclosure part of the proceeding without prejudice. On September 9, 2010, the

Court granted the Bank’s motion to dismiss the Debtors’ counterclaims.

Case No. 08-01382 - The Chapter 13 Bankruptcy Case

The Debtors, through counsel, filed a Chapter 13 bankruptcy petition on July

2, 2008 in the Bankruptcy Court for the Northern District of Iowa. Debtor James

Cockhren was dismissed out of the case on October 2, 2008. An Order Confirming

Amended Plan was entered as to Margaret Cockhren on November 30, 2009. The

Bankruptcy Court dismissed the case on October 7, 2010 on the Bank’s motion, due

to default in the terms of the confirmed plan. 

Case No. LACV112367 - The Second State Court Lender Liability Action

While the Chapter 13 Bankruptcy Case was pending, the Debtorsfiled another

pro se lender liability Petition against the Bank and Chizek on April 7, 2010 in the

Iowa District Court in Black Hawk County. The Bank answered and trial was

apparently set for October 4, 2011. This action was stayed by the Debtors’ instant

Chapter 7 filing on March 22, 2011, discussed below. After the Bankruptcy Court

in the instant Chapter 7 bankruptcy case lifted the stay to allow the Bank to defend

in this case, and denied the Debtors’ motion to dismiss the bankruptcy, the Iowa

Court dismissed the Second State Court Lender Liability Action on June 30, 2011,

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based on the conclusion that the cause of action belonged to the Trustee and that the

Debtors lacked standing. 

Case No. EQCV114957 - The Second Foreclosure Action

While the Second State Court Lender Liability Action was pending, the Bank

filed a second foreclosure petition on December 29, 2010 in the Iowa District Court

for Black Hawk County. The Debtors answered pro se and again asserted

counterclaims against the Bank and a current bank employee, Bill Roth. Hearing on

the Bank’s Motion for Summary Judgment was set for March 25, 2011. This Second

Foreclosure Action was also stayed by the Debtors’ instant Chapter 7 bankruptcy

filing on March 22, 2011. Ultimately, the counterclaims in this case were also

dismissed on June 30, 2011, based on the state court’s conclusion that those claims

belonged to the Trustee. 

Case No. 11-00560 - The Instant Chapter 7 Bankruptcy Case

As stated, on March 22, 2011, the Debtors, through counsel, filed this

voluntary Chapter 7 bankruptcy petition to stop the Second Foreclosure Action. The

Debtorslisted counterclaims against the Bank as an asset on Schedule B, with a value

of zero. 

On March 25, 2011, the Bank filed a motion for relief from the stay. The

Debtorsfiled an objection, asserting, among other things, that the property had equity

and that the Bank had mischaracterized the loan as a commercial loan, rather than a

residential loan. Hearing on the motion for relief was set on April 22. 

Meanwhile, as mentioned above, on April 1, 2011, the Debtorsfiled a pleading

in the Second Foreclosure Action, alleging lender liability and discrimination claims

against the Bank and its employee, Bill Roth. 

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On April 21, the Debtors moved to dismiss the instant Chapter 7 bankruptcy

case. They say in their appeal brief that they decided to dismiss the case when they

learned at their April 18 meeting of creditors that the Chapter 7 filing would not

ultimately stop the Second Foreclosure Action. Both the United States Trustee and

the Bank opposed dismissal. The United States Trustee stated that the Trustee was

investigating potential assets, and that the Debtors had not demonstrated cause to

dismiss their Chapter 7 case, as required under 11 U.S.C. § 707(a). The Bank’s

objection stated that the Debtors may have assets relating to a barbeque business not

organized under Iowa law and, further, that the Bank had made an offer to the Trustee

to purchase the Debtors’ claims against it for $5,000. The Bank said the Trustee had

accepted the offer, subject to notice and Court approval, and that the Trustee had

communicated this to the Debtors and their attorney at the April 18 meeting of

creditors. 

 At the April 22 hearing on the motion for relief from stay, the Debtors

withdrew their objection to it. The motion for relief from stay was granted that same

day, both to allow the Bank to proceed with its foreclosure of the residence and

commercial lot, and to allow the Bank, Chizek, and Roth to defend against the

Debtors’ counterclaims in the Second State Court Lender Liability Action and the

Second Foreclosure Action in Black Hawk County. 

On April 29, 2011, the Debtors’ attorney filed a motion to withdraw as counsel,

which motion was granted on May 6, 2011. The Debtors have proceeded pro se in

the instant Chapter 7 bankruptcy case since that time.

On May 13, 2011, the BankruptcyCourt denied the Debtors’ motion to dismiss

the bankruptcy case because they failed to show sufficient cause and because it was

probable there would be assets for distribution to creditors. The Debtors did not

appeal that Order. 

5
On June 6, 2011, the Debtorsfiled a Motion for Declaratory Judgment, Failure

to Comply to 20 Day Notice of Rescission, and Request for Relief for Violation of

Regulation Z Provisions of TILA, in the Second Foreclosure Action. They filed a

similar pleading in the Bankruptcy Court on June 8.

On June 9, 2011, the Trustee filed with the Bankruptcy Court a motion to sell

the Debtors’ causes of action against the Bank and its officers and employees for

$5,000. On June 15, 2011, the Trustee withdrew that motion as being filed

incorrectly, and filed instead a motion to approve a compromise or settlement of

controversy. That motion stated that the Trustee had received an offer from the Bank

to purchase all of the Debtors’ claims against the Bank and its agents and employees,

whether past or present, and all of the Debtors’ stock, if any, in two unscheduled nonoperating Iowa corporations, for a total sum of $5,000.

On June 16, 2011, while this bankruptcy case was pending, the Debtors filed

a lawsuit in the United States District Court for the Northern District of Iowa, Case

No. 6:11-cv-02027-EJM (the “District Court Action”), apparently asserting the same

claims they were asserting in the Second Foreclosure Action and in the Bankruptcy

Court, including violations of Regulation Z and the Truth in Lending Act. 

On June 23, 2011, the Bankruptcy Court denied the Debtors’ Motion for

Declaratory Judgment filed in the instant Chapter 7 bankruptcy case, in part because

the Debtors conceded at hearing that the issuesshould be litigated in the other actions

that were then still pending in state court and the federal district court. 

On June 28, 2011, the Debtors filed an Objection to the motion to sell,

asserting that the Bank was attempting to violate their rights by selling their causes

of action. 

6
As mentioned above, on June 30, 2011, the Iowa District Court dismissed the

Second State Court Lender Liability Action, as well as the Debtors’ counterclaims in

the Second Foreclosure Action, concluding that the claims belonged to the

bankruptcy Trustee and the Debtors lacked standing. It also denied the Debtors’

Motion for Declaratory Judgment in the Second Foreclosure Action because their

claims in that pleading were based on federal law and should therefore be litigated

in the District Court Action. 

On July 25, 2011, the Debtorsfiled an Amended Schedule B in this bankruptcy

case, listing their claims against the Bank with a value of $2.5 million. 

On August 10, 2011, the Bankruptcy Court set the Bank’s motion to

compromise for hearing on September 14, 2011. The Bank filed an exhibit list and

exhibits for that hearing on September 2, 2011. 

On September 12, 2011, the Debtors filed a motion to continue the hearing. 

That motion stated, in its entirety: “Due to unforseen health concerns, the [Debtors] 

hereby request that the hearing scheduled for September 14, 2011, at 9:45, in

Independence, Iowa, be rescheduled.” The following day, September 13, the Court

denied the motion, concluding that the Debtors had not shown good cause for

granting the continuance. The Court conducted the hearing as scheduled, and the

Debtors did not appear. On September 16, 2011, the Court entered an Order granting

the Trustee’s motion to compromise. 

In sum, the Court concluded that, because all of the alleged acts had occurred

on or before the bankruptcy filing date of March 22, 2011, the Debtors’ asserted

claims against the Bank and its agents and employees were all assets of the

bankruptcy estate pursuant to 11 U.S.C. § 541(a)(1). Further, the Debtors had no

exemption to assert in the claims. Finally, the Court held that Bankruptcy Rule 9019

provided the Trustee with the authority, subject to notice and hearing, to compromise

7
the claim if he determined that a settlement was in the best interest of creditors. The

Court found that the Debtors’ claims against the Bank were “speculative at best,” that

the Trustee was not willing to incur the expenses associated with prosecuting the

seemingly unsubstantiated lender liability and discrimination claims, and that the

Debtors were not represented by counsel in the District Court Action. Based on that,

the Court found that the offer of $5,000 was satisfactory and was not de minimis, and

approved the settlement. The Debtors appeal.

STANDARD OF REVIEW

We review findings of fact for clear error, and legal conclusions de novo. A

2

finding is clearly erroneous when the reviewing court is “left with the definite and

firm conviction that a mistake has been committed.” We review the Bankruptcy

3

Court's order approving a compromise or settlement for an abuse of discretion. An 4

abuse of discretion occursif the court bases its ruling on an erroneous view of the law

or on a clearly erroneous assessment of the evidence. Interpretation of rules presents 5

a question of law that is subject to de novo review.6

 First Nat’l Bank of Olathe v. Pontow (In re Pontow), 111 F.3d 604, 609 2

(8th Cir. 1997); Sholdan v. Dietz (In re Sholdan), 108 F.3d 886, 888 (8th Cir.

1997); Fed. R. Bankr. P. 8013.

 Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 3

L.Ed.2d 518 (1985).

 In re Racing Services, Inc., 332 B.R. 581, 584 (B.A.P. 8th Cir. 2005) 4

(citing Van Horn v. Trickey, 840 F.2d 604, 607 (8th Cir.1988)).

 Id. (citing Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct.

5

2447, 110 L.Ed.2d 359 (1990)).

 Id. (citing Indiana Lumbermens Mut. Ins. Co. v. Timberland Pallet and 6

Lumber Co., 195 F.3d 368, 374 (8 Cir. 1999)). th

8
DISCUSSION

The Debtors appear to assert four issues on appeal. First, they point out in their

Reply Brief that the Trustee did not file a brief on appeal. They incorrectly assert that

the brief filed by the Bank’s attorney was also filed on behalf of the Trustee. It was

not. The brief was filed on behalf of only the Bank. As a party to the settlement to

which the Debtors object, and as a named Appellee in this case, the Bank is an

interested party and has standing to defend its position on the settlement and file a

brief on appeal.

7

Second, the Debtors assert that the Court erred by denying their motion to

dismiss the current bankruptcy case and then in allowing the case to proceed despite

their later filing deficiencies – which they concede were intended to cause the Court

to dismiss the case for failing to comply with the Court’s Rules and Orders. 

However, the Debtors did not appeal from the Order denying their motion to dismiss,

and nothing obligated the Court to dismiss the case based on the Debtors’ intentional

filing deficiencies, particularly when the Court found that dismissing the case was not

in the best interest of creditors. As the Bankruptcy Court held in denying the motion

to dismiss, the Bankruptcy Code does not provide a simple escape mechanism for a

Chapter 7 debtor who decides he wants to abandon his case prior to discharge. “A

8

Chapter 7 debtor has no absolute right to dismiss his or her case; in order to

voluntarily dismiss the case, the debtor must show cause.” Further, although §

9

707(a) expressly mentions only cause, courts have read into it a requirement to

protect creditors as well.

10

 See Fed. R. Bankr. P. 8009(a)(2).

7

 In re Asbury, 423 B.R. 525, 529 (B.A.P. 8th Cir. 2010). 

8

 Id. (citation omitted).

9

 Id.

10

9
Third, the Debtors assert that they were deprived of their due process and civil

rights when the Court denied their motion for continuance and held the hearing in

their absence. 

11

The decision to grant or deny a continuance of a hearing is within the

discretion of the trial court and is only reversible upon showing abuse of discretion.12

“We will not overturn a trial court’s denial of a continuance unless the trial court

clearly has abused its discretion, because continuances are not favored and should be

granted only when a compelling reason has been shown.” Consistent with that 13

principle, the LocalRules for the Northern District ofIowa provide that a continuance

may be granted for good cause and that a motion to continue must specify the grounds

 The Debtors also say that approving the settlement without their 11

attendance at the hearing is a violation of Article 8 of the Declaration of Human

Rights, apparently referring to Article 8 of the Universal Declaration of Human

Rights, which provides that “[e]veryone has the right to an effective remedy by the

competent national tribunals for acts violating the fundamental rights granted him

by the constitution or by law.” However, the Universal Declaration of Human

Rights is a declaration by the United Nations, not a treaty, and does not purport to

be a statement of law or legal obligation. Sneed v. Chase Home Finance LLC,

2007 WL 1851674 (S.D. Cal. June 27, 2007) (not reported); Tel-Oren v. Libyan

Arab Republic, 726 F.2d 774, 818 (D.C. Cir. 1984). It does not apply to a debtor’s

cause of action against a lender in bankruptcy cases. Id.

 In re Rice, 357 B.R. 514, 517 (B.A.P. 8th Cir. 2006) (citing Lessmann v. 12

Comm'r of Internal Revenue, 327 F.2d 990, 996 (8th Cir.1964)). 

United States v. Young, 943 F.2d 24, 25 (8th Cir.1991) (quotation

13

omitted), cert. denied, 503 U.S. 964, 112 S.Ct. 1571, 118 L.Ed.2d 216 (1992). See

also In re Martwick, 60 F.3d 482 (8th Cir. 1995); Kansas City Star Co. v. U.S.,

240 F.2d 643, 651 (8th Cir. 1957) (holding that motions to continue are addressed

to the sound discretion of the trial court and decisions on such motions will be

sustained in the absence of pure abuse of such discretion).

10
for the request. Further, the Rules provide that a motion to continue which does not

14

comply with the Local Rule may be denied without hearing.

15

The Debtors assert that the Bankruptcy Court “disregarded” and “ignored”

their request for continuance. To the contrary, although the Court had denied the

motion the day previousto the hearing, the Court addressed the request at the hearing. 

The Court denied the motion, in part, because the Debtorsfailed to abide by the Local

Rules. Local Rule 5071-1(c) requires a person intending to request a continuance to

contact opposing counsel to advise them of the intended motion and to ascertain

whether opposing counsel will consent to the motion. At the hearing, the Court

16

asked counsel for the Bank, counsel for the Trustee, and counsel for the United States

Trustee if the Debtors had contacted them and all three lawyers answered in the

negative.

In addition, the sole basis asserted by the Debtorsfor the requested continuance

was “unforseen health concerns.” In view of the fact that the motion offered no detail

whatsoever, including whose health concern it was, what kind of health concern it

was, and when the Debtors became aware of the health concern, and in the context

of the history of the litigation between the parties, we cannot say that the denial of the

motion was an abuse of discretion. 

Finally, the Debtors appear to assert that the Court erred in approving the

settlement. Under Rule 9019, “[o]n motion by the trustee and after notice and a

hearing, the court may approve a compromise or settlement.” A decision to approve

 Local Rule 5071-1(a) and (e). 14

 Local Rule 5071-1(i).

15

 Local Rule 5071-1(c). 16

11
a settlement under Rule 9019 is within the discretion of the bankruptcy judge. In 17

exercising its discretion under Rule 9019, the bankruptcy court must consider four

factors bearing on the settlement's reasonableness:

(1) the probability of success in the litigation; (2) the difficulties, if any,

to be encountered in the matter of collection; (3) the complexity of the

litigation involved, and the expense, inconvenience and delay

necessarily attending it; (4) the paramount interest of the creditors and

a proper deference to their reasonable views in the premises.

18

An abuse of discretion occurs when a bankruptcy court does not weigh these factors

and then approves or rejects the proposed settlement. In addition, the standard for

19

compromise and approval of a settlement is whether it is “fair and equitable” and “in

the best interests of the estate.” “The purpose of a compromise is to allow the

20

trustee and creditors to avoid the expenses and burdens associated with litigating

sharply contested and dubious claims.” “When considering reasonableness, there 21

is no best compromise, only a range of reasonable compromises. So as long as the

one before the court falls within that range, it may be approved.”22

 In re Racing Services, Inc., 332 B.R. 581, 586 (B.A.P. 8th Cir. 2005) 17

(citing Drexel, Burnham, Lambert, Inc. v. Flight Transp. Corp. (In re Flight

Trans. Corp. Sec. Litig.), 730 F.2d 1128, 1135 (8th Cir.1984)).

 Id. (quoting In re Flight Trans. Corp. Sec. Litig., 730 F.2d at 1135; 18

Drexel v. Loomis, 35 F.2d 800, 806 (8th Cir.1929)).

 Id. (citing ReGen Capital III, Inc. v. Official Comm. of Unsecured

19

Creditors ( In re Trism, Inc.), 282 B.R. 662, 667 (B.A.P. 8th Cir. 2002)).

 In re Martin, 212 B.R. 316, 319 (B.A.P. 8th Cir. 1997) (citations

20

omitted).

 Id. (citations, internal quotation marks, and brackets omitted).

21

 In re Racing Services, 332 B.R. at 586 (citation omitted). 

22

12
Here, the Bankruptcy Court found that the Debtors’ claims against the Bank

were speculative at best. Indeed, the Debtorsschedules originally valued these claims

at zero. The history of the litigation, including the fact that no attorney had

represented them in any of the state court or federal district court litigation, supports

that finding. The Court also noted that the Trustee, to whom the claim belonged, did

not have the funds to pursue protracted litigation in the district court. The settlement

proposed by the Trustee was, we conclude, within the range of reasonable

compromises. The Bankruptcy Court did not err in approving it. 

REQUEST FOR ORAL ARGUMENT

The Debtors have requested oral argument. After examination ofthe briefs and

record, we conclude that the facts and legal arguments are adequately presented in the

briefs and record and that the decisional process would not be significantly aided by

oral argument. The request for oral argument is, therefore, DENIED. 23

CONCLUSION

For the foregoing reasons, the Bankruptcy Court’s Order approving the

settlement between the Trustee and MidWestOneBank is AFFIRMED. The Debtors’

request for oral argument is DENIED.

 

 Fed. R. Bankr. P. 8012.

23

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