United States Bankruptcy Appellate Panel

FOR THE EIGHTH CIRCUIT

 

No. 02-6064 MN

 

In re: *

*

Larry Kenneth Alexander, *

*

Debtor. *

*

Larry Kenneth Alexander, * Appeal from the United States

* Bankruptcy Court for the 

Movant-Appellant, * District of Minnesota 

*

v. *

*

Mary Jo A. Jensen-Carter, *

*

Trustee-Appellee, *

*

Habbo G. Fokkena, *

*

U.S. Trustee-Appellee. *

 

Submitted: February 4, 2003 

Filed: March 13, 2003

 

Before HILL, SCHERMER and FEDERMAN, Bankruptcy Judges

SCHERMER, Bankruptcy Judge
1

The Honorable Dennis D. O’Brien, United States Bankruptcy Judge for the

District of Minnesota.

2

Debtor Larry Kenneth Alexander (“Debtor”) appeals from the bankruptcy

court1

 order denying his motion to remove the trustee, denying his motion requesting

an order requiring the trustee to abandon certain real property, and enjoining him

from filing any further motions or proceedings related to such real property and/or the

trustee’s administration thereof. We have jurisdiction over this appeal from the final

order and judgment of the bankruptcy court. See 28 U.S.C. § 158(b). We affirm.

 

ISSUES

The first issue on appeal is whether the bankruptcy court erred when it denied

the Debtor’s motion to remove the trustee for misconduct. We conclude that the

bankruptcy court did not commit error in denying the motion. The second issue on

appeal is whether the bankruptcy court erred when it denied the Debtor’s motion for

an order requiring the abandonment of the property. We conclude that the bankruptcy

court did not err in denying the motion. The final issue on appeal is whether the

bankruptcy court erred in enjoining the Debtor from filing any further motions related

to the trustee’s administration of the bankruptcy estate and the property. We

conclude that the bankruptcy court properly issued the injunction.

BACKGROUND

On June 18, 1998,the Debtor filed a petition for relief under Chapter 13 of the

Bankruptcy Code. He asserted a homestead exemption in certain property located at

875 Laurel Avenue in St. Paul, Minnesota (the “Laurel Property”). The Chapter 13

Trustee objected to the exemption. After a hearing, the bankruptcy court ruled that

the Debtor was not entitled to an exemption in the Laurel Property and converted the

Debtor’s case to Chapter 7. The Debtor appealed the order disallowing the exemption
2

 This is a summary of only a portion of the litigation concerning the Laurel

Property and the respective rights of the Trustee, the Debtor, and Stephens therein. 

Stephens has filed two bankruptcy petitions. Additionally, at least two separate

lawsuits are pending before the United States District Court for the District of

3

in the Laurel Property, which order was affirmed on appeal. Alexander v. Chrysler

Fin. Corp. (In re Alexander), 242 F.3d 373 (8th Cir. 2000).

Mary Jo Jensen-Carter (“Trustee”) was appointed the Trustee in the Debtor’s

Chapter 7 case. The Trustee filed an objection to the Debtor’s asserted exemption in

the Laurel Property in the Chapter 7 case, which objection was sustained. In re

Alexander, 236 B.R. 679 (Bankr. D. Minn. 1999). The bankruptcy court’s order

sustaining the objection to the exemption was ultimately affirmed by the Eighth

Circuit Court of Appeals. Alexander v. Jensen-Carter (In re Alexander), 236 F.3d

431 (8th Cir. 2001), aff’ing 239 B.R. 911 (B.A.P. 8th Cir. 1999).

The Debtor thereafter filed a motion for reconsideration under Federal Rule of

Civil Procedure 60 seeking to exempt the Laurel Property because his wife, Georgina

Yvonne Stephens (“Stephens”), and his minor child occupy the property. The

bankruptcy court denied the motion. The Debtor appealed this order which was also

ultimately affirmed by the Eighth Circuit Court of Appeals. Alexander v. JensenCarter (In re Alexander), 44 Fed. Appx. 32 (8th Cir. 2002), aff’ing 270 B.R. 281

(B.A.P. 8th Cir. 2001).

In October, 2001, Stephens attempted to claim an exemption in the Laurel

Property in the Debtor’s bankruptcy case as a dependent of the Debtor pursuant to 11

U.S.C. § 522(l) and Federal Rule of Bankruptcy Procedure 4003(a). The bankruptcy

court denied Stephens’ motion seeking an order sustaining such homestead

exemption. Stephens appealed that order which was affirmed by the Bankruptcy

Appellate Panel for the Eighth Circuit. Stephens v. Jensen-Carter (In re Alexander),

288 B.R. 127 (B.A.P. 8th Cir. 2003).2
Minnesota and the Minnesota state court related to the Laurel Property.

4

On September 23, 2002, the Debtor filed his motion to remove the Trustee and

for an order requiring the abandonment of the Laurel Property. The bankruptcy court

conducted a hearing on the motion on October 22, 2002, at which time the court

entered its order denying the Debtor’s request to remove the Trustee, denying the

Debtor’s request for an order requiring the abandonment of the Laurel Property, and

enjoining the Debtor from filing any further motions or proceedings related to the

Trustee’s administration of the Debtor’s bankruptcy estate and/or the Laurel Property

and from filing a motion for reconsideration of such order. The Debtor appeals this

order. 

STANDARD OF REVIEW

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

conclusions of law de novo. Alexander v. Jenson-Carter (In re Alexander), 239 B.R.

911, 913 (B.A.P. 8th Cir. 1999), aff’d 236 F.3d 431 (8th Cir. 2001). We review the

bankruptcy court’s issuance of an injunction for an abuse of discretion. Alexander v.

Jenson-Carter (In re Alexander), 270 B.R. 281, 286 (B.A.P. 8th Cir. 1999), aff’d 44

Fed. Appx. 32 (8th Cir. 2002).

DISCUSSION

The Debtor’s motion is is yet another attempt by the Debtor to exempt his

interest in the Laurel Property. The Laurel Property is part of the Debtor’s Chapter 7

bankruptcy estate. 11 U.S.C. § 541(a). It has been definitively determined that the

Debtor is not entitled to any exemption in the Laurel Property. Alexander v. JensenCarter (In re Alexander), 236 F.3d 431 (8th Cir. 2001), aff’g 239 B.R. 911 (B.A.P. 8th

Cir. 1999), aff’g 236 B.R. 679 (Bankr. D. Minn. 1999); Alexander v. Jensen-Carter

(In re Alexander), 44 Fed. Appx. 32 (8th Cir. 2002), aff’g 270 B.R. 281 (B.A.P. 8th Cir.
5

2001). The Trustee has a duty to administer the Laurel Property as property of the

estate. 11 U.S.C. § 704. The Debtor’s motion to remove the Trustee and for an order

requiring the abandonment of the Laurel Property lacks any merit and is yet another

thinly veiled attempt to exempt the property despite numerous prior failed attempts

by both the Debtor and his non-debtor wife to prevent the Trustee from performing

her duties and administering this estate asset.

I. REMOVAL OF A TRUSTEE

Pursuant to 11 U.S.C. § 324(a), the bankruptcy court may remove a trustee for

cause. As the movant, the Debtor bears the burden of establishing cause by setting

forth specific facts which support the removal of the Trustee. In re Marvel Entm’t

Group, Inc., 140 F.3d 463, 471 (3rd Cir. 1998); In re Schultz Mfg. Fabricating Co.,

956 F.2d 686, 692 (7th Cir. 1991). A conclusory contention unsupported by specific

facts does not constitute sufficient grounds for the removal of a trustee. In re Schultz

Mfg., 956 F.2d at 692.

The Debtor failed to establish any fact supporting the removal of the Trustee.

The Debtor merely established that he believes his wife is entitled to an exemption

in the Laurel Property. The Debtor failed to articulate any fact which would support

removal of the Trustee. The Debtor is merely attempting yet again to thwart the

Trustee’s efforts to administer the Laurel Property. Without a scintilla of evidence

establishing cause to remove the Trustee, the bankruptcy court properly denied the

motion.

II. ABANDONMENT OF PROPERTY

Pursuant to 11 U.S.C. § 554(b), on request of a party in interest and after notice

and a hearing, the court may order the trustee to abandon any property of the estate

that is burdensome to the estate or that is of inconsequential value and benefit to the
6

estate. The party seeking abandonment must establish that the property is either

burdensome or of inconsequential benefit and value.

With respect to the Laurel Property, the Trustee testified that she believes the

value to be $300,000 based on the tax statement value of “over $300,000.”

(Transcript, p. 36.) The Debtor testified that he believed the property was worth less

than $200,000 on the date he filed his bankruptcy petition. (Transcript, p. 33.) The

undisputed evidence established that the mortgage indebtedness encumbering the

property is $30,000. It has already been conclusively established that neither the

Debtor nor his wife are entitled to any exemptions in the property. The record thus

supports the conclusion that the Laurel Property has value for the estate.

The Debtor argues that Stephens is entitled to a $200,000 homestead exemption

in the property because she is his wife. The Debtor presented no evidence to support

his belief. Nonetheless, even if his wife were entitled to $200,000 from the proceeds

of the sale of the Laurel Property, the property still has value and benefit to the estate.

The evidence supports the conclusion that the property has a value of $300,000 which

is sufficient to satisfy the $30,000 mortgage and any $200,000 interest of the wife

with $70,000 remaining for the Debtor’s bankruptcy estate. The Debtor did not meet

the burden of establishing that the property is burdensome or of inconsequential value

and benefit to the estate. The bankruptcy court properly denied the motion for

abandonment.

III. INJUNCTIVE RELIEF

Upon the Trustee’s request, the bankruptcy court enjoined the Debtor from

filing any more motions or proceedings with the bankruptcy court related to the

Trustee’s administration of the estate and/or the Laurel Property and enjoined him

from filing a motion to reconsider his latest order. Pursuant to 11 U.S.C. § 105(a),

the bankruptcy court is authorized to issue any order, process, or judgment that is
7

necessary or appropriate to carry out the provisions of the Bankruptcy Code. The

issuance of an injunction under 11 U.S.C. § 105(a) is appropriate to protect the assets

of the debtor’s estate. NLRB v. Superior Forwarding, Inc., 762 F.2d 695, 698 (8th Cir.

1985).

The bankruptcy court properly considered the request for injunctive relief,

heard arguments, and determined that it has been definitively established that the

Laurel Property is property of the Debtor’s bankruptcy estate and that the Trustee is

entitled to administer the asset. The court considered the fees and costs continuing

to accrue as the Trustee is forced to relitigate the same issues with the Debtor and his

wife and the negative impact thereof on the estate and its creditors. The court limited

the injunction to any further proceedings in the bankruptcy court. The court did not

enjoin the Debtor from pursuing any rights he may have with respect to the Laurel

Property in any other forum, including the state courts of Minnesota and the United

States District Court for the District of Minnesota where lawsuits related to the

property were pending at the time. Nor did the court enjoin the Debtor from

appealing its order. Rather, the court narrowly drafted the injunction to prevent yet

another attempt by the Debtor to assert an exemption in the Laurel Property and thus

relitigate issues which have been previously decided by the Eighth Circuit Court of

Appeals and are now governed by the law of the case. Graven v. Fink (In re Graven),

186 F.3d 871, 872 (8th Cir. 1999). The bankruptcy court did not abuse its discretion

in entering the injunction.

CONCLUSION

The bankruptcy court properly denied the Debtor’s motion to remove the

Trustee and for an order compelling abandonment of the Laurel Property.

Furthermore, the bankruptcy court did not abuse its discretion in enjoining the Debtor

from further litigation before the bankruptcy court related to the Laurel Property.

Accordingly, we AFFIRM.
8

A true copy.

Attest:

CLERK, U.S. BANKRUPTCY APPELLATE PANEL FOR THE

EIGHTH CIRCUIT