Opinion ID: 74816
Heading Depth: 2
Heading Rank: 1

Heading: facts

Text: Plaintiff Clyde Thomas Carter was a debtor in a Chapter 7 bankruptcy proceeding. Defendant Bob Rodgers was the initial Bankruptcy Trustee (“Trustee”) in Carter’s bankruptcy proceeding. As Trustee, Rodgers appointed Defendant Clements Antiques of Tennessee, Inc. (“Clements Antiques”), and its principals, Defendants Charles W. Clements, Sr. and Charles W. Clements, Jr. (“the Clements”) to conduct a sale of Carter’s personal property. The bankruptcy court approved these appointments. Clements Antiques conducted the sale by way of auction on August 5, 1995. Trustee Rodgers and his wife attended the auction, and Rodgers’s wife successfully bid on an item.1 Likewise, Clements Antiques, Clements Sr., and Clements Jr. (or family members on their behalf) purchased items at the auction. Upon learning of these purchases, the bankruptcy administrator for the Northern District of Alabama complained that the purchases rendered all Defendants non- 1 Trustee Rodgers’ wife, Mary Rodgers, purchased an oak dresser for $300, which was the last and highest bid for the dresser at the auction. Mrs. Rodgers offered to void the dresser’s sale and return the item to the new trustee. This offer was denied by the new trustee who determined that “voiding of the sale would not add value to the estate.” 2 disinterested parties in contravention of the Bankruptcy Code. See 11 U.S.C. § 701(a)(1) (“[T]he United States trustee shall appoint one disinterested person . . . to serve as . . . trustee.”); 11 U.S.C. § 327(a) (“[T]he trustee . . . may employ . . . auctioneers . . . that do not hold or represent an interest adverse to the estate.”). As a result, Rodgers resigned as Trustee, and Clements Antiques returned all commissions and buyer’s premiums received in connection with the auction.2 Carter filed this civil action in district court seeking compensatory and punitive damages from Trustee Rodgers, Clements, and Clements Antiques based on alleged breaches of fiduciary duties and duties of reasonable care with respect to Carter’s bankruptcy estate. The district court found that Carter failed to obtain leave of the bankruptcy court before filing this lawsuit and dismissed Carter’s lawsuit pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction.3 Carter timely appealed.