Opinion ID: 3027611
Heading Depth: 2
Heading Rank: 2

Heading: R. 580, 581 n. 3 ( B.A.P. 8th Cir. 1997).

Text: Generally, those who were not parties before the bankruptcy court may not appeal an order of the bankruptcy court. Clearly, Lurie is a nonparty to Nancy Lurie's adversary proceeding. In order to appeal from the order, therefore, he must have a stake in the outcome of the bankruptcy proceedings, which is “discernable from the record.” Binker v. Pennsylvania, 977 F.2d 738, 745 (3d Cir.1992) (citing EEOC v. Pan American World Airways, Inc., 897 F.2d 1499 (9th Cir.1990), cert. denied, 498 U.S. 815 (1990)). Ordinarily, a party to a lawsuit has no standing to appeal an order unless he can show some basis for arguing that the challenged action causes him a cognizable injury, i.e., that he is 'aggrieved' by the order. Yukon Energy Corp. v. Brandon Invs., Inc. (In re Yukon Energy Corp.), 138 F.3d 1254, 1259 (8th Cir. 1998) (quoting 2 In Williams v. Marlar (In re Marlar), 252 B.R. 743, 748 (B. A. P. 8th Cir. 2000) the bankruptcy appellate panel discussed the differences between Article III standing and standing in bankruptcy court. In Cult Awareness Network, Inc. v. Martino (In re Cult Awareness Network, Inc.), 151 F.3d 605, 607-08 (7th Cir. 1998), the Seventh Circuit Court of Appeals opined that bankruptcy standing is narrower than Article III standing. Compare Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)(describing Article III standing) with In re Andreuccetti, 975 F.2d 413, 416 (7th Cir.1992)(describing bankruptcy standing). Only those persons affected pecuniarily by an order have standing to appeal. In re Marlar, 252 B.R. at 748. 8 Spencer v. Casavilla, 44 F.3d 74, 78 (2d Cir.1994)); Rodney v. Piper Capital Mgmt. (In re Piper Funds), 71 F.3d 298, 301 (8th Cir. 1995) ( noting that equitable considerations clearly warrant giving standing to appeal to a nonparty that has been haled ... into district court despite [its] objections.)( quoting S.E.C. v. Wencke, 783 F.2d 829, 834 (9th Cir.), cert. denied, 479 U.S. 818 (1986)). The issue of whether Lurie is a person “ aggrieved” by the order of the bankruptcy court is a question of fact. Fidelity Bank v. M.M. Group, Inc., 77 F.3d 880, 882 (6th Cir. 1996). In this case, Lurie is “aggrieved.” The bankruptcy court's order from which Lurie appeals imposes an obligation upon him. Under the terms of paragraph 3 of the bankruptcy court's order the Lurie judgment “is a full and final nonappealable and non-modifiable judgment which allows the Liquidating Trustee to execute on any and all property in order to enforce and/or collect said judgment.” Pursuant to paragraph 4 Lurie is “barred by collateral estoppel and res judicata to challenge either the October 20, 1994 Judgment against Ronald Lurie or the Popkin & Stern deficiency amount.” A fair inference from such an order is that the court might exercise its powers, including its contempt power, to enforce its order and punish noncompliance. See Gardiner v. A.H. Robins Co., Inc. 747 F.2d 1180, 1187 n. 8. (8th Cir. 1984)(citing Smith v. Eggar, 655 F.2d 181, 184-85 (9th Cir. 1981)). The order could be interpreted as an injunction against Lurie, preventing him from seeking a reduction in the deficiency amount, and not merely a statement of fact by the court. “ [W]here a non-party is purportedly bound by an injunction, the non-party may bring an appeal rather than face the possibility of a contempt proceeding.” Hilao v. Estate of Marcos (In re Estate of Marcos Human Rights Litig.), 94 F.3d 539, 544 (9th Cir.1996). See also In re Piper Funds, Inc., 71 F.3d at 301 (A nonparty normally has standing to appeal when it is adversely affected by an injunction.). The bankruptcy court has the power to find Lurie in either criminal or civil contempt for violation of its order. See Brown v. Ramsay (In re Ragar), 3 F.3d 1174, 1179 (8th Cir. 1993); 11 U.S.C. § 105. 9 Even if the bankruptcy court's order was later found to be void for lack of personal jurisdiction, the risk to Lurie of being the subject of a contempt proceeding is too great. See Gardiner, 747 F.2d at 1188. He is “aggrieved” by being subjected to such a risk. Having found that Lurie is “aggrieved” by the bankruptcy court's March 6, 2001 order we conclude that he does have standing to appeal. See In re Ferren, 227 B.R. 279, 282 (B.A.P. 8th Cir. 1998), aff’d, Ferren v. Searcy Winnelson Co. ( In re Ferren), 203 F.3d 559 (8th Cir. 2000). B. Personal Jurisdiction Once standing is determined, the issue of the bankruptcy court's personal jurisdiction of Lurie must be resolved.. The bankruptcy court must have jurisdiction over those persons subject to its orders. Personal jurisdiction is an essential element of bankruptcy court jurisdiction, without which the court may not proceed to an adjudication. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) (citing Employers Reinsurance Corp. v. Bryant, 299 U.S. 374, 382 (1937)). Without personal jurisdiction, any order the bankruptcy court enters against Lurie is void. See U.S. v. Kirschenbaum, 156 F.3d 784, 795 (7th Cir. 1998). Lurie has the right to insist that the bankruptcy court have personal jurisdiction over him before submitting to the authority of the court. He may forgo that right, effectively consenting to the court's exercise of adjudicatory authority. See FED. R. BANK. P. 7012 incorporating FED. R. CIV. P. 12(h)10(1) (defense of lack of jurisdiction over the person can be waived). However, nothing in the record suggests that Lurie waived personal jurisdiction. The service of Lurie by the Trustee of the supplemental response and Lurie’s appearance by telephone does not make him a party to the proceeding. He did not file a response to the motion nor was he asked to state a position on the record. Although Lurie had an ownership interest in the property subject to the court's freeze order and may have intervened, he did not. Lurie 10 is not appealing the lifting of the freeze order, only the extraneous order of the bankruptcy court regarding the status of the Lurie judgment. The status of that judgment and specifically, whether the judgment should be or could be altered, amended or clarified can only be made by motion brought by the Trustee in the action against Lurie, not in Nancy Lurie's case. Lurie is clearly not a party to Nancy Lurie’s adversary proceeding. Therefore, the bankruptcy court lacked personal jurisdiction of Lurie and the court's March 6, 2001 order is void as it applies to Lurie. Having determined that the bankruptcy court did not have personal jurisdiction of Lurie in the Nancy Lurie adversary proceeding, all other issues presented on appeal are moot. ACCORDINGLY, we reverse that part of the March 6, 2001 order to the extent that it purports to bar Ronald U. Lurie from challenging the Lurie judgment. A true copy. Attest: CLERK, U.S. BANKRUPTCY APPELLATE PANEL FOR THE EIGHTH CIRCUIT 11