United States Bankruptcy Appellate Panel

For the Eighth Circuit

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No. 16-6018

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In re: Herman Eugene Paulson, Eugene Paulson

lllllllllllllllllllllDebtor

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Herman Eugene Paulson

lllllllllllllllllllllDebtor - Appellant

v.

Daniel McDermott

lllllllllllllllllllllU.S. Trustee - Appellee

Sunflour Railroad, Inc.

lllllllllllllllllllllCreditor - Appellee

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Appeal from United States Bankruptcy Court 

for the District of South Dakota - Aberdeen

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Submitted: October 6, 2016

Filed: November 17, 2016

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Before FEDERMAN, Chief Judge, SCHERMER and SALADINO, Bankruptcy 

Judges. 

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FEDERMAN, Chief Judge

Debtor Herman Eugene Paulson appeals from an Order of the Bankruptcy 

Court1 denying his motion to reinstate his dismissed Chapter 13 bankruptcy case and 

an Order denying his motion to reconsider that Order. For the reasons that follow, 

we affirm.

FACTUAL BACKGROUND

This case stems from a long-running dispute between the Debtor and two of 

his creditors, People’s State Bank and Sunflour Railroad, Inc. The details of that

dispute have been recounted in numerous decisions from the South Dakota state 

courts, the South Dakota Bankruptcy Court, this Bankruptcy Appellate Panel, and 

the Eighth Circuit Court of Appeals,

2 and need not be repeated in detail here. 

To summarize, however, People’s State Bank and Sunflour Railroad each 

have state court judgments against the Debtor. Sunflour’s judgment relates to a 

dispute over the Debtor’s grain elevator which encroached on a railroad right of way: 

When the Debtor refused Sunflour’s demand that he remove the grain elevator from 

its property, Sunflour sued him in state court. That lawsuit resulted in a money 

 1 The Honorable Charles L. Nail, Jr., United States Bankruptcy Judge for the 

District of South Dakota.

2 See, e.g., In re Paulson, 477 B.R. 740 (B.A.P. 8th Cir. 2012), aff’d 524 

Fed. Appx. 306 (8th Cir. 2013); In re Paulson, 2016 WL 3050095 (Bankr. D. S.D. 

May 20, 2016) (slip copy); Paulson v. Peoples State Bank (In re Paulson), 2012 

WL 709848 (Bankr. D. S.D. March 5, 2012) (slip copy); Paulson v. Sunflour R.R., 

Inc. (In re Paulson), 2012 WL 761260 (Bankr. D. S.D. March 7, 2012) (slip copy);

Sunflour R.R., Inc. v. Paulson, 670 N.W.2d 518 (S.D. 2003). 
judgment in favor of Sunflour the amount of $19,280, which became a lien on the 

Debtor’s property.

3

 The South Dakota Supreme Court has affirmed this judgment.4

The Debtor’s debt to People’s Bank stems from a loan which was secured by 

the Debtor’s personal property. When the Debtor defaulted on the loan, People’s 

obtained a state court judgment in the amount of about $60,000, as well as possession 

of the collateral. The Debtor did not appeal this judgment, but instead filed a “writ 

of prohibition” from the South Dakota Supreme Court, which was denied.

After the Debtor’s attempts to challenge the judgments in the state courts

proved unsuccessful, he convened a group of individuals which he refers to as “the 

Peoples Seventh Amendment Jury.” The “jury” purported to void the judgments 

against the Debtor as being fraudulently obtained and also assessed punitive 

damages against the parties involved in the alleged fraud. In 2013, the Debtor filed 

the Peoples Seventh Amendment Jury’s judgment and other documents containing

the heading of “Our One Supreme Court” in the South Dakota state court. The filing 

of these documents resulted in the Debtor being convicted of the crime of accusing

a state court judge of treason and threatening the judge with death. That conviction 

was affirmed by the South Dakota Supreme Court.5

 

 3 See S.D. Codified Laws § 15-16-7 (2016) (“When a judgment has been 

docketed with a clerk of the circuit court, it shall be a lien on all the real property, 

except the homestead, in the county where the same is so docketed, of every 

person against whom any such judgment shall be rendered . . . .”).

4 The original judgment entered in 2002, which was in the amount of 

$9,000, plus interest, was affirmed on appeal. See Sunflour R.R., Inc. v. Paulson, 

670 N.W.2d 518 (S.D. 2003). Subsequently, Sunflour obtained a Supplemental 

Judgment, in which the state court added costs to the judgment amount, resulting in 

a judgment of $19,280. It is not clear from the record whether the Debtor appealed 

from the supplemental judgment. 

5 State v. Paulson, 861 N.W.2d 504 (S.D. 2015).
Meanwhile, as People’s Bank was attempting to collect its judgment and 

obtain possession of its collateral, and apparently around the time the Debtor was 

convening the private jury, the Debtor filed his first Chapter 13 bankruptcy petition 

on August 22, 2011. Three things relevant to this appeal occurred in that first 

bankruptcy case: 

One, the Debtor filed several pleadings and initiated adversary proceedings 

seeking the Bankruptcy Court’s determination that, inter alia, the state court 

judgments obtained by Sunflour and People’s Bank were void based on fraud, and 

that the decision of the Peoples Seventh Amendment Jury was valid. Those attempts 

failed when the Bankruptcy Court held that, under the Rooker-Feldman doctrine, it 

lacked the authority to invalidate the state court judgments.

6

Two, the Debtor made five attempts at filing a Chapter 13 plan, each of which 

drew objections from People’s Bank and Sunflour on the groundsthat they contained 

only vague language about selling collateral to pay People’s claim, and language 

indicating Sunflour’s claim was invalid and would not be paid. The creditors also 

asserted that the plans lacked detailed provisions regarding payments, failed to 

properly account for them as secured creditors, were not feasible, and were not 

proposed in good faith. None of the proposed plans was confirmed.

And, finally, after the Bankruptcy Court denied confirmation of the Debtor’s 

third proposed plan, the Chapter 13 Trustee filed a motion to dismiss the case.7

 On 

March 16, 2012, the Bankruptcy Court granted that motion for many reasons, 

including that the Debtor continued to refuse to properly provide for the payment of 

 6 The Rooker-Feldman doctrine “precludes a federal action if the relief 

requested in the federal action would effectively reverse the state court decision or 

void its holding.” In re Paulson, 477 B.R. at 743 n. 3 (citations omitted). 7 The Debtor filed his fourth and fifth proposed plans while the Motion to 

Dismiss was pending. 
Sunflour’s and People’s secured claims, resulting in unreasonable delay.

8

 After the 

Court denied the Debtor’s motion for new trial or amendment of judgment, he

appealed to this panel, which affirmed,9 and then to the Eighth Circuit Court of 

Appeals, which affirmed by a decision filed on August 5, 2013.

10 

The Debtor then filed this Chapter 13 bankruptcy case on September 28, 2015. 

On March 1, 2016, the Debtor filed an adversary proceeding against more than 

twenty defendants, including Sunflour and its principals and attorneys, again 

attacking the validity of the state court judgments. In addition to the arguments 

which had previously been rejected by the courts, he also now asserts that ConAgra 

and the political and judicial leaders of South Dakota have conspired to destroy his 

livelihood as an organic farmer and take over the food industry. 

Meanwhile, the Debtor filed two proposed Chapter 13 plans in this case, both 

of which continue to turn on his claim that People’s and Sunflour’s liens are not 

valid. As before, Sunflour and People’s Bank objected to confirmation of each of 

the proposed plans. 

After the Bankruptcy Court denied confirmation of the second plan, the 

United States Trustee (the “UST”) filed a motion, on March 30, 2016, to dismiss the 

bankruptcy case. Sunflour filed a joinder of that motion on April 25, 2016. In 

essence, the UST’s motion asserted that the plans in the current case were 

substantially similar to the ones rejected in the first case, and were simply continued 

attempts to retry or void the state court judgments, which the courts have repeatedly 

said the Bankruptcy Court lacks the authority to do. The UST asserted that the 

 8

 Paulson v. Sunflour R.R., Inc., 2012 WL 761260 (Bankr. D. S.D. March 7, 

2012). 

9 In re Paulson, 477 B.R. 740.

10 In re Paulson, 524 Fed. Appx. 306 (8th Cir. 2013) (Mem). 
“failure to propose a plan that bears any semblance of conforming to the Court’s 

concerns creates an unjustifiable and unreasonable delay prejudicial to creditors,” 

amounting to cause for dismissal pursuant to § 1307(c)(1) of the Bankruptcy Code. 

He also asserted that the case should be dismissed for bad faith.

The deadline to respond to that motion to dismiss was April 25, 2016, and the 

Debtor failed to respond by that date. Therefore, the Bankruptcy Court entered an 

order on April 26, 2016 granting the UST’s motion and dismissing the case (the 

“Dismissal Order”). On April 29, 2016, after the Dismissal Order had been entered, 

the Debtor filed an objection to the UST’s motion to dismiss. He also filed a motion 

to reinstate the case on May 4, 2016. The UST and Sunflour objected. 

On May 20, 2016, the Bankruptcy Court entered an Order denying the 

Debtor’s motion to reinstate the case. On June 2, 2016, the Debtor filed a motion to 

reconsider the denial of the motion to reinstate. The Bankruptcy Court denied that 

motion on June 7, 2016. 

On June 21, 2016, the Debtor filed a Notice of Appeal of the May 20

Order Denying Reinstatement and the June 7 Order Denying Reconsideration. 

ISSUES ON APPEAL

This appeal is untimely as it relates to the April 26, 2016 Dismissal Order; 

rather, as the UST suggests, our review is limited to the Bankruptcy Court’s Orders 

denying the motion to reinstate and denying the motion to reconsider. 

Federal Rule of Bankruptcy Procedure 8002(a)(1) provides that, generally, “a 

notice of appeal must be filed with the bankruptcy clerk within 14 days after entry 

of the judgment, order, or decree being appealed.”11 However, certain motions, if 

11 Fed. R. Bankr. P. 8002(a)(1). See also 28 U.S.C. § 158(c)(2) (providing 

that the time provided in Rule 8002 applies to appeals taken from bankruptcy 

courts to the Bankruptcy Appellate Panel). 
timely filed, toll the time to appeal, such that the time for appeal will begin running 

from the entry of the order disposing of such motions.12 These include motions to 

alter or amend the judgment under Federal Rule of Civil Procedure 59(e)13 and 

motions for relief under Federal Rule of Civil Procedure 60(b),

14 if filed within 14 

days from the order from which relief is sought.15 

Here, the Dismissal Order – which was a final, appealable order16 – was 

entered on April 26, 2016. Absent the filing of a tolling motion, the deadline to file 

an appeal that Order was May 11, 2016. 

Instead of filing a notice of appeal of that Order, the Debtor filed the motion 

to reinstate on May 4, 2016, which the Court analyzed under Rule 60(b)(1), 

discussed below. The Court denied the motion to reinstate on May 20, 2016.

When a party files a “motion for reconsideration,” such as the Debtor’s motion 

to reinstate, the time to appeal the merits of the original order complained of – here 

the Dismissal Order – begins to run again when the court disposes of that motion.17 

 

12 Fed. R. Bankr. P. 8002(b)(1); Barger v. Hayes Cty. Non-Stock Co-Op (In 

re Barger), 219 B.R. 238, 243 (B.A.P. 8th Cir. 1998).

13 Fed. R. Civ. P. 59, made applicable in bankruptcy cases by Fed. R. Bankr. 

P. 9023.

14 Fed. R. Civ. P. 60, made applicable in bankruptcy cases by Fed. R. Bankr. 

P. 9024.

15 Fed. R. Bankr. P. 8002(b)(1)(B) and (D). 

16 See, e.g., In re Paulson, 477 B.R. at 742 (reviewing dismissal order as a 

final order).

17 See Hanson v. Sabala (In re Sabala), 334 B.R. 638, 641 (B.A.P. 8th Cir. 

2005) (“According to Rule 8002(b), the time period for appeal runs from the entry 

of the order disposing of the last outstanding motion which has a tolling effect.”).
Since the Order denying the motion to reinstate was entered on May 20, the deadline 

to file an appeal relating back to the Dismissal Order was June 3, 2016. The Debtor 

did not file a notice of appeal by that deadline. Instead, the Debtor filed, on June 2, 

a motion to reconsider the Order denying his motion to reinstate the case. 

The Eighth Circuit has held that a second motion for relief from judgment or 

for reconsideration does not toll the appeal period for a second time.18 

[A second] motion to vacate, whether treated as a Rule 60(b) or a Rule 

59(e) motion, even though filed within ten days of an order denying a 

prior motion to alter or amend, preserves for appeal, at most, only the 

orders denying the motions to alter or vacate. It does not preserve for 

review the merits of the underlying order which was challenged in the 

first motion.19

Therefore, as the UST asserts, the Debtor’s June 2 motion for reconsideration 

– which was a second motion for relief under Rule 59 or 60 – did not toll the time to 

appeal the Dismissal Order. Therefore, the filing of the June 2 motion for 

reconsideration preserved only the right to challenge the Orders denying the motion 

to reinstate and the motion for reconsideration of the Order denying the motion to 

reinstate; it did not preserve an appeal of the Dismissal Order itself. Our review, 

therefore, is limited to the Orders denying the motion to reinstate and motion to 

reconsider. 

 

18 Stark v. Lambert, 750 F.2d 45, 47 (8th Cir. 1984) (“[A] motion to 

reconsider a motion for a new trial is not itself a motion for a new trial, and is 

therefore insufficient to toll the running of the time period in which to file a notice 

of appeal.”) (citation omitted; emphasis in original). See also In re Barger, 219 

B.R. at 240 (holding that a successive Rule 59 or Rule 60 motion does not toll the 

period for appealing the underlying order). 

19 In re Barger at 242-43.
STANDARD OF REVIEW

We review a bankruptcy court’s findings of fact for clear error and its 

conclusions of law de novo.

20 “[A] finding is ‘clearly erroneous' when although 

there is evidence to support it, the reviewing court on the entire evidence is left with 

the definite and firm conviction that a mistake has been committed.”21 Rule 60(b) 

motions are within the discretion of the trial court, and we will reverse the denial of 

a Rule 60(b) motion only when the court has clearly abused its discretion.

22 An 

abuse of discretion will only be found if the lower court’s judgment was based on 

clearly erroneous factual findings or erroneous legal conclusions.23

DISCUSSION

Because the Debtor had not responded to the UST’s motion to dismiss before 

the dismissal Order was entered, the Bankruptcy Court treated the motion to reinstate 

as one filed under Rule 55(c), which provides that “[t]he court may set aside an entry 

of default for good cause, and it may set aside a final default judgment under Rule 

60(b).”24 Rule 60(b) provides that, “[o]n motion and just terms, the court may 

relieve a party . . . from a final judgment, order, or proceeding” for the following 

reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

 20 Fed. R. Bankr. P. 8013; In re Barger, 219 B.R. at 243.

21 Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 

1511, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 

333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)). 22 Id.

23 Id. 

24 Fed. R. Civ. P. 55(c), made applicable here by Fed. R. Bankr. P. 7055. 
(2) newly discovered evidence that, with reasonable diligence, could 

not have been discovered in time to move for a new trial under Rule 

59(b);

(3) fraud (whether previously called intrinsic or extrinsic),

misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged; it is based 

on an earlier judgment that has been reversed or vacated; or applying it 

prospectively is no longer equitable; or

(6) any other reason that justifies relief.25

The Debtor asserted in his motion to reinstate that his failure to timely respond 

to the motion to dismiss was that he was being flooded with motions in the pending 

adversary proceeding and that he had not fully understood that a response deadline 

as to the motion to dismiss had been set. As a result, the Court properly analyzed 

the motion under Rule 60(b)(1) for excusable neglect. 

The determination as to whether neglect is excusable is an equitable 

one, taking into account all relevant circumstances surrounding the 

party’s omission. However, relief under Rule 60(b) is an extraordinary 

remedy. Factors to consider in this determination include (1) the danger 

of prejudice to the [non-moving party]; (2) the length of the delay and 

its potential impact on judicial proceedings; (3) the reason for the delay, 

including whether it was within the reasonable control of the movant; 

and (4) whether the movant acted in good faith.26 

The burden under a Rule 60(b) motion is difficult because the rule “provides for 

extraordinary relief which may be granted only upon an adequate showing of

 25 Fed. R. Civ. P. 60(b)(1).

26 In re President Casinos, Inc., 397 B.R. 468, 473 (B.A. P. 8th Cir. 2008) 

(citing Pioneer Investment Servs. Co. v. Brunswick Assoc. L.P., 507 U.S. 380, 381, 

113 S.Ct. 1489, 1490-91, 123 L.Ed.2d 74 (1993); additional citations omitted).
exceptional circumstances.”27 The Eighth Circuit has held that the excuse given for 

the late filing should be given the greatest import of these factors.

28

The Debtor suggests here that his response was in fact timely, if one considers 

the mailing rules applicable to pro se litigants. He also asserts that his responding 

to the motion to dismiss “one day” after the deadline was excusable under the 

circumstances. He also suggests that he was deprived of proper notice and 

opportunity to respond to the motion to dismiss.

On a motion to dismiss a Chapter 13 case for cause under § 1307(c), the notice 

need only be “reasonable,”29 which the 21-day response time given by the 

Bankruptcy Court in this instance was. In addition, the 21-day response period after 

the March 30 filing would have resulted in a deadline of Wednesday, April 20. 

Therefore, contrary to the Debtor’s assertion, the April 25 deadline did account for 

the three additional days required under Rule 9006(f) for persons being notified via 

U.S. Mail. Moreover, the Monday, April 25 deadline also accounted for the fact that 

the twenty-fourth day fell on a Saturday under Rule 9001(a)(6)(C). Further, 

Sunflour’s joinder in the UST’s motion, which was filed on the April 25 response 

deadline, did not adversely affect the Debtor’s ability to respond to the UST’s 

motion, nor did the Bankruptcy Court base its dismissal on the joinder. The Debtor 

 27 Sanders v. Clemco Indus., 862 F.2d 161, 169 n. 14 (8th Cir. 1988) 

(citation omitted).

28 See Lowry v. McDonald Douglas Corp., 211 F.3d 457, 463 (8th Cir. 

2000), cert. denied, 121 S.Ct. 309 (2000).

29 Fed. R. Bankr. P. 1017(f)(1) (“Rule 9014 governs a proceeding to dismiss 

or suspend a case . . . .except under §§ 706(a), 1112(a), 1208(a) or (b), or 1307(a)

or (b)); Fed. R. Bankr. P. 9014(a) (“In a contested matter not otherwise governed 

by these rules, relief shall be requested by motion, and reasonable notice and 

opportunity for hearing shall be afforded the party against whom relief is sought. 

No response is required under this rule unless the court directs otherwise.”).
was not denied any notice or procedural rights, and his April 29 response was 

untimely.

But more importantly, this case does not turn on the Debtor’s failure to timely 

file a response in any event. As the Bankruptcy Court said, in addition to Pioneer’s

reason-for and prejudice-from delay factors enumerated above, a court considering 

a Rule 60(b)(1) motion must also consider whether the party seeking relief has a 

meritorious defense to present, if the defense was allowed to be presented late.30

Thus, even though our review is limited to the Orders denying the motions to 

reinstate and for reconsideration, the linchpin of those decisions was that the Debtor 

has no meritorious defense to the UST’s motion to dismiss and so the reason for the 

dismissal itself does require discussion. 

In sum, the Bankruptcy Court found that the Debtor’s present case is merely 

a rehash of the very same arguments which have already been repeatedly rejected by 

the courts, namely, that the state court judgments are void. The record amply 

supports this finding.

As we said in the Debtor’s appeal of the dismissal of his prior case: “The 

issue underlying the court’s findings of cause for dismissal due to unreasonable 

delay and denial of confirmation is the debtor’s unwillingness to accept that the bank 

and the railroad are secured creditors.”31 The unwillingness continues, even in his 

arguments in this appeal. As a result, and because the Debtor has made no attempt 

to correct the significant impediments to getting a plan confirmed, the Court did not 

err in refusing to reinstate the Debtor’s case. 

 30 Union Pac. R.R. Co. v. Progress Rail Servs. Corp., 256 F.3d 781, 783 (8th

Cir. 2001) (citations omitted).

31 In re Paulson, 477 B.R. at 745-46 (emphasis added).
CONCLUSION

Because the Bankruptcy Court did not clearly err in concluding that the Debtor 

had no meritorious defense to the UST’s Motion to Dismiss, the Bankruptcy Court’s 

Orders denying the Debtor’s motion to reinstate the dismissed case and denying his 

motion to reconsider are AFFIRMED.

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