UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE TENTH CIRCUIT

IN RE STANFORD MALZAHN

ELLSWORTH,

Debtor.

BAP No. UT-14-008

CAROL NAYLOR,

Plaintiff – Appellee –

Cross-Appellant,

Bankr. No. 12-27213

Adv. No. 12-02354

Chapter 7

v. ORDER DISMISSING APPEAL AS

MOOT

STANFORD MALZAHN

ELLSWORTH,

Defendant – Appellant –

Cross-Appellee.

September 3, 2014

Before MICHAEL, KARLIN, and JACOBVITZ, Bankruptcy Judges.

I. INTRODUCTION

In the physical world, a person can only be in one place at one time. The

same cannot be said of an appeal of a bankruptcy court’s decision. In this case,

the bankruptcy court issued a decision that satisfied neither litigant. The ruling

generated two appeals, one to a United States District Court, and one before this

Court. Over thirty days ago, the district court dismissed the appeal brought

before it for lack of prosecution and that order is now final. The appellant in this

Court has received all the relief she is entitled to as a matter of law. As a result,

there is nothing left for this Court to do. For this reason, this appeal must be

dismissed as moot.

BAP Appeal No. 14-8 Docket No. 29 Filed: 09/03/2014 Page: 1 of 4
II. BACKGROUND

Carol Naylor (“Naylor”) and Stanford Malzahn Ellsworth (“Ellsworth”)

were at one time husband and wife. After several years of wedlock, the parties

stipulated in a legal proceeding that the marriage should be determined void ab

initio and terminated by annulment (as opposed to dissolved through a decree of

divorce). A Utah state court ordered the marriage annulled. As part of the

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annulment proceeding, judgment was subsequently entered in favor of Naylor and

against Ellsworth in the amount of $216,853.53 plus $83,127.17 in pre-judgment

interest, including attorneys’ fees and costs, for damages incurred by Naylor as a

result of Ellsworth’s fraudulent behavior (the “State Court Judgment”).

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Ellsworth filed a Chapter 7 petition and sought to discharge his obligations

under the State Court Judgment. Naylor filed an adversary proceeding against

Ellsworth, arguing that the State Court Judgment was not dischargeable under two

separate theories. Naylor argued that the obligations represented by the State

Court Judgment were incurred as a result of fraudulent representations, and were

thus non-dischargeable under 11 U.S.C. § 523(a)(2)(A). In the alternative,

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Naylor argued that the State Court Judgment represented an obligation owed to a

“former spouse . . . incurred . . . in the course of a divorce or separation” and thus

was non-dischargeable under § 523(a)(15). The bankruptcy court held the State

Court Judgment non-dischargeable under § 523(a)(2)(A) as money obtained

fraudulently, but rejected her theory that it was similarly non-dischargeable under

Stipulation and Agreement to an Order of Bifurcation and Decree of

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Annulment, in Appellant’s App. at 70.

Order of Bifurcation and Decree of Annulment, in Appellant’s App. at 74.

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Findings of Fact, Conclusions of Law and Judgment, in Appellant’s App. at

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81.

Unless otherwise indicated, all future statutory references in text are to the

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Bankruptcy Code, Title 11 of the United States Code.

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§ 523(a)(15) as a domestic support obligation (the “Bankruptcy Court Order”).

Ellsworth timely appealed the Bankruptcy Court Order and elected to have

his appeal heard by the United States District Court for the District of Utah (the

“District Court”). Naylor timely cross-appealed the Bankruptcy Court Order to

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this Court, arguing that the bankruptcy court erred in determining that the State

Court Judgment did not fall within the scope of § 523(a)(15).

The District Court entered an order setting deadlines for the filing of a

designation of record, statement of issues on appeal, as well as appellate briefs.

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For reasons unknown, Ellsworth ignored the District Court, and failed to file any

further documents. As a result, on June 24, 2014, the District Court entered an

order to show cause why Ellsworth’s appeal should not be dismissed for failure to

prosecute and set July 15, 2014, as the deadline for a response. Ellsworth again

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failed to respond. On July 28, 2014, the District Court dismissed the District

Court Appeal. The order dismissing the District Court Appeal is now final. As a

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result, the bankruptcy court’s ruling that the State Court Judgment is nondischargeable is no longer subject to attack.

III. DISCUSSION

Federal law dictates that an appeal is moot when some event has occurred

post-appeal that makes it impossible for a court to grant any effectual relief. As

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this Court has previously indicated,

[A] case is moot when the issues presented are no longer “live” or

Case No. 2:14-cv-00131-CW (D. Utah) (the “District Court Appeal”),

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Docket No. 1. The Court takes judicial notice of the pleadings and orders filed in

the District Court Appeal on its own motion.

Id., Docket No. 2.

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Id., Docket No. 3.

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Id., Docket No. 4.

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In re Milk Palace Dairy, LLC, 327 B.R. 462, 466-67 (10th Cir. BAP 2005).

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the parties lack a legally cognizable interest in the outcome. A

controversy is no longer “live” if the reviewing court is incapable of

rendering effective relief or restoring the parties to their original

position. . . . [I]f an event occurs while a case is pending on appeal

that makes it impossible for the court to grant “any effectual relief

whatever” to a prevailing party, the appeal must be dismissed.

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Here, the bankruptcy court found the State Court Judgment non-dischargeable

based on one of two alternate theories Naylor presented. Naylor’s argument to

this Court–that the bankruptcy court erred in not finding the debt was also nondischargeable as a domestic support obligation under § 523(a)(15)– need not be

reached because the finding that the State Court Judgment was non-dischargeable

under § 523(a)(2)(A) is no longer subject to review. A ruling by this Court on the

§ 523(a)(15) issue adds nothing to the relief already granted to Naylor, and would

constitute an advisory opinion. We are not in the business of rendering advisory

opinions.

IV. CONCLUSION

The bankruptcy court granted Naylor all the relief she asked for–a

determination that the State Court Judgment was not dischargeable. The ruling is

not subject to reversal. There is no additional remedy this Court can grant, and

nothing else this Court can or should do. Accordingly, it is HEREBY ORDERED

that this appeal should be, and hereby is, dismissed as moot.

For the Panel:

Blaine F. Bates

Clerk of Court

In re Egbert Dev., LLC, 219 B.R. 903, 905 (10th Cir. BAP 1998) (citations

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and internal quotation marks omitted).

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