*This order and judgment is not binding precedent, except under the doctrines of

law of the case, res judicata, and collateral estoppel. The court generally disfavors the

citation of orders and judgments; nevertheless, an order and judgment may be cited under

the terms and conditions of the court’s General Order filed November 29, 1993. 151

F.R.D. 470.

UNITED STATES COURT OF APPEALS

Filed 11/24/95

TENTH CIRCUIT

STEPHEN D. HAMILL, PAUL W.

MERCER,

Plaintiffs - Appellants, No. 95-2103

v. D. New Mexico

CLIFFORD CONE, JAMES BURKE, (D.C. No. CIV 93-1030 JC/WWD)

Defendants - Appellees,

and

DISTRIBUTORS, INC.,

Defendant.

ORDER AND JUDGMENT*

Before ANDERSON, BALDOCK, and BRORBY, 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
1The appellees have not filed a responsive appellate brief, although the trustee did

file an extensive brief with the district court. R. Vol. I, Tab 7.

2According to the Trustee’s brief below, the debtor listed the patent as its only

asset of value. R. Vol. I, Tab 7 at 6. Apparently, the appraised value was $5,000. Id.,

Tab 7, Ex. 1 at 7.

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appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. This cause is therefore ordered

submitted without oral argument.

Stephen Hamill and Paul Mercer appeal the district court’s order affirming the

bankruptcy court’s decision which closed and dismissed their adversary proceeding

against Clifford Cone, Distributors, Inc., and James E. Burke, Trustee. Hamill and

Mercer contend that 1) the bankruptcy court had no jurisdiction to determine or sell any

interest in U.S. Patent #DES 264,612, and 2) the bankruptcy court erred in finding that

the adversary proceedings were rendered moot by the Trustee’s sale of any estate interest

in the patent. We affirm. 

Hamill and Mercer have appeared pro se at each stage of these proceedings.1 In

their brief to us, these appellants represent that Distributors, Inc. was a guarantor of

certain notes to Hamill, but that it had no ownership claim in Patent #DES 264,612, (the

“patent”) which was listed as an asset of the bankruptcy estate.2 Appellants further

represent that, in 1989, they filed a state court action to settle the ownership of the patent,

but they do not disclose the present status of that suit. Apparently, Hamill and Mercer

filed the instant adversary proceeding to establish that the patent was not part of the
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debtor’s estate and to get the stay lifted so that they could proceed with their state court

action. R. Vol. I, Tab 6 at 6. At least one previous appeal was taken to the district court. 

While the adversary proceeding was pending, the Trustee sold, without warranty,

whatever interest the estate had in the patent to Messrs. Moats and Cone for the sum of

$4,000. Id., Tab 6 at 2-3; Tab 7, Ex. 1 at 7. Throughout, appellants have not been able to

pursue their claims in state court because of the automatic bankruptcy stay. At the same

time, they have been unable to pursue their claims in the bankruptcy court because the

Trustee sold the contested interest in the patent before they were able to obtain an

adjudication of their rights in the adversary proceeding. 

In reviewing the bankruptcy court’s decision, we apply the same standards as the

district court. Yeates v. Yeates (In re Yeates), 807 F.2d 874 , 877 (10th Cir. 1986). Thus,

we affirm the bankruptcy court’s factual findings unless they are clearly erroneous, but

we review its conclusions of law de novo. SBA v. Preferred Door Co. (In re Preferred

Door Co.), 990 F.2d 547, 549 (10th Cir. 1993). While we liberally construe a party’s pro

se pleadings, Haines v. Kerner, 404 U.S. 519, 520 (1972), we will not supply additional

facts, nor will we construct a legal theory. Dunn v. White, 880 F.2d 1188, 1197 (10th

Cir. 1989), cert. denied, 493 U.S. 1059 (1990); see also Hall v. Bellmon, 935 F.2d 1106,

1110 (10th Cir. 1991).

Although appellants raise their jurisdictional claim for the first time in their brief

to us, a lack of subject matter jurisdiction is not subject to waiver. Lyons v. Jefferson
3We note that Appellants also pose the following issue: “Does a bona fide

purchaser holding a duly recorded conveyance of ownership rights in a Patent defeat

interests of other parties? See 35 U.S.C.A. § 261.” However, they make no arguments

regarding this point, and it is impossible to determine what particular claim they intend to

make. Thus, we consider the point forfeited, except to the extent it appears to be

subsumed in their jurisdictional argument. See Brownlee v. Lear Siegler Mgmt. Serv.

Corp., 15 F.3d 976, 977 (10th Cir.) cert. denied, 114 S. Ct. 2743 (1994) (citations

omitted).

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Bank & Trust, 994 F.2d 716, 721 (10th Cir. 1993); see also Fed. R. Civ. P. 12(h)(3). 

However, we reject the contention on the merits, as the appellants confuse issues

regarding statutory preemption and notice with jurisdictional limitations, and the authority

they cite is clearly contrary to their claimed defect. Thus, 35 U.S.C. § 261 provides that

patents “shall have the attributes of personal property,” and that any interest in a patent

shall be assignable. Additionally, the case they cite as authority, In re Transp. Design

Technology, 48 B.R. 635 (S.D. Cal. 1985), amply demonstrates that court’s proper

exercise of jurisdiction to adjudicate creditors’ rights in a debtor’s patent.3

As their second issue, appellants contend that the bankruptcy court erred in closing

the adversary proceedings. We affirm for substantially the same reasons as set forth in

the magistrate judge’s recommended disposition which the district court adopted. R. Vol.

I, Tab 9 at 2-3. Nonetheless, we address the particular concern which appellants

expressed in the bankruptcy and district court, that the order closing the adversary

proceedings did not expressly return jurisdiction to the state court. See R. Vol. I, Tab 6 at

6 and Tr. of hearing, Aug. 16, 1993.
4While they do not raise it as a separate issue, appellants also argue that the

bankruptcy court abused its discretion in allowing objections to an initial sale in which

they were the only bidders (for $1,000 less than the amount obtained at the renoticed sale

to Cone). This argument was not among the issues raised below, and appellants have not

presented us with any documentation to show that the issue was preserved in any previous

appeal to the district court. Therefore we do not consider it. Walker v. Mathers (In re

Walker), 959 F.2d 894, 896 (10th Cir. 1992).

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As noted previously, the record is clear that there was no adjudication of rights in

the patent in the bankruptcy court. Rather, the court specifically accepted that those

rights were unsettled, and therefore the Trustee sold the patent without warranty, so that

the purchasers succeeded only to whatever interest the debtor had. Although there is no

written order in the record before us which expressly lifts the stay, both the district court

and the bankruptcy court indicated in hearings that appellants would be free to pursue

their claims in state court following the Trustee’s sale. R. Vol. I, Tab 6 at 3-4; Tab 7, Ex.

1 at 4-5. 

Accordingly, it appears to us that there should be no current impediment to

appellants’ continuing their state court action, since the bankruptcy stay cannot apply to

an action determining rights in property which the Trustee no longer claims as part of the

debtor’s estate.4

 

AFFIRMED.

ENTERED FOR THE COURT
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Stephen H. Anderson

Circuit Judge