NOT FOR PUBLICATION1

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE TENTH CIRCUIT

_________________________________

IN RE JAMES WARE KELLEY, III,

 Debtor.

__________________________________

JEFFREY WEINMAN,

 Plaintiff - Appellee,

v.

JAMES WARE KELLEY, III,

 Defendant - Appellant.

BAP No. CO-16-004

Bankr. No. 13-28933

Adv. No. 15-01268

Chapter 7

OPINION

_________________________________

Appeal from the United States Bankruptcy Court

for the District of Colorado

_________________________________

Before NUGENT, SOMERS, and HALL, Bankruptcy Judges.

_________________________________

HALL, Bankruptcy Judge.

_________________________________

Appellant James Kelley2 appeals the bankruptcy court’s Order Denying Motion to 

1 This unpublished opinion may be cited for its persuasive value, but is not precedential, 

except under the doctrines of law of the case, claim preclusion, and issue preclusion. 10th 

Cir. BAP L.R. 8018-6.

2 Kelley appears pro se on this appeal and similarly appeared pro se in the underlying 

Colorado bankruptcy case and the adversary proceeding from which this appeal arises. 

FILED

U.S. Bankruptcy Appellate Panel

of the Tenth Circuit

November 30, 2016

Blaine F. Bates

Clerk

 
Set Aside Default Judgment (the “First Denial Order”)3 and Order Denying Motion for 

Reconsideration of Default Judgment (the “Second Denial Order”).4

I. INTRODUCTION

Kelley was a real estate investor who bought and sold real estate and leased 

various properties to third parties.

5 Beginning in 2009, he routinely collected security 

deposits from his tenants in North Carolina and comingled the security deposits with 

personal funds in violation of North Carolina laws pertaining to security deposits.6 He 

regularly failed to return the security deposits, challenging tenants with contrived and 

unsubstantiated claims that the tenants had left the premises in a damaged state or owed 

bills that were not the tenants’ responsibility.

7 He also attempted to thwart tenants’ legal 

actions for recovery of their security deposits by appealing judgments entered in favor of 

the tenants even though he had not appeared at trial.8

On August 26, 2010, Kelley further attempted to thwart his tenants’ recovery of 

their security deposits by filing a Chapter 11 bankruptcy petition in the Eastern District of 

3 First Denial Order in Appellant’s App. at 118.

4 Second Denial Order in Appellant’s App. at 165.

5 Exhibit B, Entry of Judgment and Permanent Injunction Against Defendant James Ware 

Kelley, III in Appellant’s App. at 27.

6 Id. at 8, in Appellant’s App. at 33.

7 Id.

8 Id. at 4, in Appellant’s App. at 29.

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North Carolina.9 This case was ultimately dismissed on November 27, 2012, for default 

under Kelley’s confirmed plan.10

In July 2013, the North Carolina Attorney General filed a complaint against

Kelley in connection with violations of the North Carolina laws regulating security 

deposits and unfair and deceptive trade practices (the “North Carolina Action”).

11

On November 13, 2013, Kelley filed his second Chapter 11 bankruptcy case in the 

District of Colorado. He listed on his petition a mailing address of 4117 Tejon, 

Apartment D, Denver, CO 80211 (the “Denver Address”).

12 On October 9, 2014, the 

bankruptcy court converted Kelley’s Chapter 11 case to Chapter 7. Jeffrey Weinman was

appointed as the Chapter 7 Trustee (the “Trustee”). 

On April 6, 2015, in the North Carolina Action, the court entered a judgment 

against Kelley13 based on the following facts: (1) Kelley had collected at least $14,935 in 

security deposits from his tenants and failed to protect or return those deposits as 

9 Id. 

10 Id.

11 Exhibit B, Entry of Judgment and Permanent Injunction Against Defendant James 

Ware Kelley, III, at 3-4 in Appellant’s App. at 27-28.

12 Kelley represented that he had “been domiciled or has had a residence, principal place 

of business, or principal assets in [the District of Colorado] for 180 days immediately 

preceding the date of the petition . . . .” First Denial Order at 2, in Appellant’s App. at 

119 (quoting In re Kelley, No. 13-28933-HRT (Bankr. D. Colo. Nov. 13, 2013) (No. 1)).

13 The bankruptcy court noted that 11 U.S.C. § 362(b)(4), the police and regulatory 

exception to the automatic stay, authorized the North Carolina Superior Court to continue 

the prepetition proceeding brought by the North Carolina Attorney General. First Denial 

Order at 2, in Appellant’s App. at 119.

3

 
mandated by applicable state statutes; and (2) Kelley had attempted to thwart tenants’ 

legal actions to recover judgments by pursuing frivolous court proceedings and appeals, 

constituting violations of the North Carolina Unfair and Deceptive Trade Practices Act

(the “North Carolina Judgment”). The North Carolina Judgment required Kelley to pay 

restitution, civil penalties, and attorney’s fees and included a permanent injunction 

against Kelley from accepting further security deposits. Kelley did not appeal the North 

Carolina Judgment.

On July 10, 2015, the Trustee filed a Complaint against, and obtained the issuance 

of a summons on, Kelley (collectively referred to herein as the “Complaint”),14 objecting 

to Kelley’s discharge under 11 U.S.C. §§ 727(a)(2), (a)(3), (a)(4)(D), and (a)(5).15 The 

Complaint alleged that Kelley undertook transactions with the intent to hinder, delay, or 

defraud creditors in his bankruptcy case by refusing and failing to produce documents or 

provide information to the Trustee. The Trustee filed a Certificate of Service16

documenting service of the Complaint on Kelley at the Denver Address. The Denver 

Address was Kelley’s address of record at the time the Complaint was filed. 

14 Appellee’s App. at 113.

15 All future references to “Code,” “Section,” and “§” are to the Bankruptcy Code, Title 

11 of the United States Code, unless otherwise indicated. All references to “Bankruptcy 

Rule” or “Bankruptcy Rules” are to the Federal Rules of Bankruptcy Procedure, unless 

otherwise indicated.

16 Appellee’s App. at 119.

4

 
On July 14, 2015, the Trustee filed his Amended Complaint (the “Amended 

Complaint”),

17 adding allegations related to the North Carolina Judgment that Kelley 

wrongfully withheld security deposits and thwarted tenants’ legal action to recover such 

deposits.18 The Amended Complaint included a Certificate of Service19 indicating the 

Trustee served the Amended Complaint on Kelley by first class United States mail at the 

Denver Address. The Denver Address was Kelley’s address of record at the time the 

Amended Complaint was filed.

On August 28, 2015, the Trustee filed his Motion for Entry of Default and Default 

Judgment20 (the “Default Judgment Motion”). At the time of the filing of the Default 

Judgment Motion, Kelley had neither filed an answer to the Complaint or the Amended 

Complaint nor otherwise appeared in the adversary proceeding. The Trustee represented 

that the Complaint and Amended Complaint were properly served on Kelley by first class 

United States mail at the Denver Address. Attached to the Default Judgment Motion was 

a certified copy of the North Carolina Judgment, an affidavit of the Trustee, and a 

declaration of a North Carolina Special Deputy Attorney General. The Default Judgment 

Motion also included a certificate of service, which indicated that the Trustee served the 

Default Judgment Motion by first class United States mail at the Denver Address and, out 

17 Appellant’s App. at 6.

18 Appellee’s Br. 2.

19 Appellant’s App. at 14.

20 Appellant’s App. at 15.

5

 
of an abundance of caution, at 103 Isley Street, Apartment D, Chapel Hill, NC 27516 (the 

“North Carolina Address”).21

Kelley did not respond to the Default Judgment Motion. On September 14, 2015, 

the bankruptcy court entered its Order Granting Motion for Entry of Default and Default 

Judgment (the “Default Judgment”).

22 On September 28, 2015, Kelley filed the Debtor’s

Motion to Set Aside Default and Default Judgment (the “Rule 60(b) Motion”).

23 In the 

Rule 60(b) Motion, Kelley argued that he provided the North Carolina Address in a 

response filed with the bankruptcy court on August 14, 2015, and he did not receive the 

Default Judgment Motion at the North Carolina Address until September 14, 2015, the 

same day the bankruptcy court entered the Default Judgment.

24 The Trustee filed the 

Response in Opposition to Debtor’s Motion to Set Aside Default and Default Judgment 

(the “First Response”) on October 12, 2015, indicating he served the Default Judgment 

Motion on the North Carolina Address and the Denver Address.

25 On December 31, 

2015, the bankruptcy court entered the First Denial Order, discussing at length each 

21 Default Judgment Motion at 8, in Appellant’s App. at 22. Kelley listed the North 

Carolina Address on an objection that he filed with bankruptcy court on August 14, 2015; 

however, he did not change his address of record with the bankruptcy court until 

September 15, 2015.

22 Appellant’s App. at 68.

23 Appellant’s App. at 69.

24 Rule 60(b) Motion at 2, in Appellant’s App. at 70. Kelley suggests improper 

forwarding or improper postage caused the delay in receipt of the Default Judgment 

Motion.

25 First Response at 5, in Appellee’s App. at 126.

6

 
subsection of Federal Rule of Civil Procedure 60(b) (“Rule 60(b)”) and concluding that 

there was no basis for setting aside the Default Judgment.

On January 14, 2016, Kelley filed his Motion for Reconsideration of Default 

Judgment (the “Reconsideration Motion”), reiterating his argument that he did not 

receive proper notice of the Default Judgment Motion.

26 On January 28, 2016, the 

Trustee filed the Trustee’s Response to Debtor’s Motion for Reconsideration of Default 

Judgment (the “Second Response”).

27 On February 23, 2016, the bankruptcy court denied 

the Reconsideration Motion and entered the Second Denial Order. Kelley subsequently 

appealed the First Denial Order and the Second Denial Order.

I. STANDARD OF REVIEW

The Rules do not recognize a motion for reconsideration; however, a 

reconsideration motion can be viewed as a motion to alter or amend a default judgment

pursuant to Federal Rule of Civil Procedure 59(e) (“Rule 59(e)”) or as a motion seeking 

relief from the a default judgment pursuant to Rule 60(b).28 The bankruptcy court 

reviewed the Rule 60(b) Motion as a motion under Rule 60(b).29 The bankruptcy court 

reviewed the Reconsideration Motion as a motion under Rule 59(e) and Rule 60(b).30 We 

26 Appellant’s App. at 126.

27 Appellee’s App. at 134.

28 Lopez v. Long (In re Long), 255 B.R. 241, 244 (10th Cir. BAP 2000) (citing Van Skiver 

v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991)).

29 First Denial Order at 4, in Appellant’s App. at 121.

30 Second Denial Order at 2, in Appellant’s App. at 166. However, Kelley never 

addressed any error under Rule 59(e) on appeal and, accordingly, waived any such 

7

 
review a bankruptcy court’s grant or denial of a Rule 59(e) or Rule 60(b) motion for an

abuse of discretion.31

II. DISCUSSION

A. Kelley’s Argument on Federal Rule of Civil Procedure Rule 60(b).

Kelley principally argues that the bankruptcy court erred in denying the Rule 60(b) 

Motion and the Reconsideration Motion because the Default Judgment was void due to 

lack of notice and personal jurisdiction. He argues that the bankruptcy court should have, 

therefore, granted his Rule 60(b) Motion. 

Federal Rule of Civil Procedure 60(b)(4) (“Rule 60(b)(4)”), made applicable to 

bankruptcy cases by Rule 9024, provides that the bankruptcy court may relieve a party

from a final judgment when the judgment is void.32 The Trustee argues that Kelley failed

to seek relief under Rule 60(b)(4)

33 based on the alleged insufficient service of the 

Default Judgment Motion before the bankruptcy court and he has, therefore, waived that

argument. The Trustee further contends that even if Kelley could raise this argument

now, the bankruptcy court expressly found that Kelley was properly served with the 

Complaint and Amended Complaint at his address of record. The bankruptcy court also 

argument. United States v. Abdenbi, 361 F.3d 1282, 1289 (10th Cir. 2004) (citing State 

Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979. 984 n.7 (10th Cir. 1994)).

31 Long, 255 B.R. at 245 (citing Adams v. Reliance Standard Life Ins., 225 F.3d 1179, 

1186 n.5 (10th Cir. 2000); Plotner v. AT&T Corp., 224 F.3d 1161, 1174 (10th Cir. 

2000)); Servants of the Paraclete v. Does, 204 F.3d 1005, 1009 (10th Cir. 2000).

32 Fed. R. Bankr. P. 9024. 

33 Although Kelley argues that relief under Rule 60(b)(3) is mandatory when a party has 

no notice of a default proceeding, he only references case law relating to Rule 60(b)(4).

8

 
found that the Default Judgment Motion was served on Kelley at both the Colorado 

Address and the North Carolina Address.34

Issues and arguments not raised below will not ordinarily be considered on 

appeal.35 If an argument was not raised before the bankruptcy court, the argument is 

typically forfeited.36 Forfeited arguments can be entertained on appeal; however, the BAP 

will only reverse a bankruptcy court’s judgment on the basis of a forfeited argument if 

failing to do so would entrench a plainly erroneous result.37 In addition, under Federal 

Rule of Civil Procedure Rule 12, made applicable to bankruptcy courts by Rule 7012, any 

objection to personal jurisdiction is waived if the party fails to assert the objection in his 

or her first responsive pleading or by motion before the first responsive pleading is 

filed.

38 In the instant case, Kelley did not raise the issue of relief under Rule 60(b)(4)

before the bankruptcy court and has, therefore, forfeited this argument. Furthermore, he 

did not assert lack of personal jurisdiction or insufficient service of process in his first 

responsive pleading and has, therefore, waived this argument.

34 First Denial Order at 5, in Appellant’s App. at 122.

35 Rademacher v. Colorado Assoc. of Soil Conservation Dists. Med. Benefit Plan, 11 F.3d 

1567 (10th Cir. 1993).

36 In re Arnold, No. CO-15-031, 2016 WL 1022350, at *5 n.35 (10th Cir. BAP Mar. 15, 

2016).

37 Id.

38 United States v. 51 Pieces of Real Prop., Roswell, N.M., 17 F.3d 1306, 1318 (10th Cir. 

1994) (citing Fed. R. Civ. P. 12(b), made applicable to bankruptcy cases by Rule 7012).

9

 
Even if we were to consider Kelley’s arguments now, they are not persuasive.

39

Kelley does not contest that he (1) was properly served with the Complaint and Amended 

Complaint or (2) failed to file an answer to either the Complaint or the Amended 

Complaint. Rather, Kelley argues that lack of notice of the Default Judgment Motion

rendered the Default Judgment void. This argument fails because, even assuming he did 

not receive service of the Default Judgment Motion prior to entry of the Default 

Judgment, the Federal Rules of Civil Procedure did not require service of the Default 

Judgment Motion on Kelley.

40 Nor do the Rules predicate the completeness of service 

upon receipt. Rule 9006(e) states that service of “any paper” by mail is complete upon its 

mailing. Nevertheless, the bankruptcy court found that Kelley was, in fact, served with 

the Default Judgment Motion.

Accordingly, the bankruptcy court did not abuse its discretion in determining that 

there was no basis for awarding relief under Rule 60(b) as a result of Kelley’s alleged 

delayed receipt of the Default Judgment Motion or lack of notice.

39 Kelley argued before the bankruptcy court that he did not receive service of the Default 

Judgment in a timely manner. Rule 60(b) Motion at 3, in Appellant’s App. at 71.

40 Fed. Rule Civ. P. 5(a)(2), made applicable to bankruptcy cases under Rule 7005 (“No 

service is required on a party who is in default for failing to appear”); Gourlay v. Sallie 

Mae, Inc. (In re Gourlay), 465 B.R. 124, 131 (6th Cir. BAP 2012) (same). Furthermore, 

under Rule 7055 and Fed. R. Civ. P. 55(b)(2), Kelley was not entitled to notice of the 

Default Judgment Motion since he had not appeared in the adversary proceeding before 

the Default Judgment Motion was filed.

10

 
B. Kelley’s Other Arguments41

Kelley also argues that that the bankruptcy court erred by denying him the 

requested relief when the Trustee had engaged in fraud, misrepresentation, and 

misconduct. The record indicates that Kelley did not meet his burden in providing 

adequate proof of the fraud, misrepresentation, and misconduct that he alleges. 

Furthermore, even if Kelley had met his burden, there is nothing in the record that would 

indicate any alleged action taken by the Trustee would have interfered with Kelley’s 

ability to fully and fairly prepare for, and proceed at, trial. Accordingly, the bankruptcy 

court did not err in determining that relief was not appropriate under Rule 60(b)(3).42

Kelley filed a Motion to Correct Docket,

43 requesting relief under Federal Rule of 

Civil Procedure 8009(e)(2)(C) to file documents electronically to reduce “the visual loss 

from multiple reproductions and manual scanning” associated with the hard copy 

41 As a pro se appellant, Kelley raises many arguments and facts in his briefs that simply 

are not relevant to this appeal, such as facts from a prior North Carolina case to which he 

was a party, accusations that the Trustee has acted fraudulently or improperly without 

supporting facts in the record, and suggestions that the bankruptcy judge was improperly 

aiding the Trustee in defrauding Kelley. As they are not relevant to the issues properly 

preserved on appeal, they are not considered by the Court.

42 Kelley also argues that the Default Judgment should be set aside (1) because the 

Trustee violated 18 U.S.C. § 242; and (2) because the Trustee applied the incorrect legal 

standard. Kelley’s argument appears to be based on the erroneous conclusion that the 

Trustee is a government official. Kelley also offers no factual basis to support any 

wrongdoing on the part of the Trustee. Furthermore, the Trustee’s application of any 

legal standard is not relevant to a determination as whether the bankruptcy court erred. 

These arguments are not persuasive.

43 BAP ECF No. 35.

11

 
documents previously filed.44 The record is clear that the Complaint, Amended 

Complaint, and Default Judgment Motion were properly served on Kelley. Consequently, 

we deny the Motion to Correct Docket.

III. CONCLUSION

The bankruptcy court did not err in determining that there was no basis to set aside 

the Default Judgment under Rule 59 and Rule 60(b)(4), (b)(3), or under any other 

argument pursued by Kelley, and did not err in denying the Rule 60(b) Motion and the

Reconsideration Motion. Accordingly, the orders of the bankruptcy court are 

AFFIRMED.

44 Id. at 2.

12