Court Opinion

ID: 4277363
Source: CourtListenerOpinion
Date Created: 2018-05-22 16:00:31.968669+00
Date Added: 2024-06-11T14:34:06.131939
License: Public Domain

FILED
                                                                    United States Court of Appeals
                          UNITED STATES COURT OF APPEALS                    Tenth Circuit

                                 FOR THE TENTH CIRCUIT                     May 22, 2018
                             _________________________________
                                                                        Elisabeth A. Shumaker
                                                                            Clerk of Court
In re: LARRY WAYNE PARR, a/k/a
Larry W. Parr, a/k/a Larry Parr,

       Debtor.

------------------------------

LARRY WAYNE PARR, a/k/a Larry W.
Parr, a/k/a Larry Parr,

       Appellant,

v.                                                        No. 17-1258
                                                      (BAP No. 17-019-CO)
SIMON E. RODRIGUEZ, Chapter 7
Trustee; UNITED STATES TRUSTEE,

       Appellees.
                             _________________________________

                                 ORDER AND JUDGMENT*
                             _________________________________

Before BACHARACH, McKAY, and BALDOCK, Circuit Judges.
                 _________________________________

        Larry Wayne Parr, (Debtor) seeks to appeal the bankruptcy court’s order

approving the sale of property to Global Storage, LLC (Global), a claimant to the

        *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
bankruptcy estate (the Sale Order). Debtor did not file any objection to the trustee’s

motion seeking approval of the sale. Nonetheless, Debtor appealed the Sale Order to

the Bankruptcy Appellate Panel of the Tenth Circuit (BAP). The BAP dismissed

Debtor’s appeal because Debtor lacked standing as a “person aggrieved” by the Sale

Order. We agree and dismiss the appeal.

       I. Background. In April 2015, Debtor filed a pro se Chapter 11 bankruptcy

case in the District of Colorado. At the time, Debtor operated a storage facility on

real property located in Colorado (the Property). The Property was owned by the

Larry W. Parr Living Trust (the Parr Trust). The bankruptcy court converted the case

to a Chapter 7 case and appointed Appellee Simon E. Rodriguez as the Trustee. In

August 2016, the bankruptcy court authorized the Trustee to revoke the Parr Trust

and transfer the Property and all of its assets to the estate, which the Trustee did in

October 2016. Although Debtor had previously represented that he owned no real

property, he amended his filings in December 2016, to assert ownership in, and to

seek a homestead exemption on, the Property. The Trustee objected to the

homestead-exemption request because Debtor had transferred his interest in the

Property to the Parr Trust fourteen years before filing for bankruptcy, and did not

hold legal title to the Property.

       While the homestead exemption motion was pending, the Trustee filed a

motion to sell the Property. Prior to filing for bankruptcy, Debtor had filed suit in

Colorado court against Global, which owns property adjacent to the Property,

asserting he had an easement on Global’s property. The state court dismissed

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Debtor’s suit and granted Global’s cross-claims against Debtor. Debtor’s appeal

from that decision to the Colorado Court of Appeals was pending when he filed for

bankruptcy. Global filed a proof of claim and an adversary proceeding in Debtor’s

Chapter 7 proceeding, asserting its counter-claims judgment against Debtor was

non-dischargeable under 11 U.S.C. § 523(a)(6).

      Ultimately, Global and the Trustee entered into an agreement in which Global

would purchase the Property for $1.4 million, the estate would dismiss the state court

appeal and give up the easement claim against Global, and Global would waive its

proof of claim against the estate. To that end, the Trustee filed a motion (the Sale

Motion) on April 24, 2017, seeking authorization to sell the Property pursuant to

11 U.S.C. § 363(b) and (f) in the bankruptcy court, and approval of the compromise

agreement between the estate and Global. Debtor did not file any objection to the

Sale Motion or request a hearing. The bankruptcy court authorized the sale and

settlement in the Sale Order issued on May 24, 2017. On May 26, 2017, Debtor

appealed the Sale Order to the BAP. On June 6, 2017, the bankruptcy court granted

the Trustee’s objection to Debtor’s homestead exemption after an evidentiary hearing

(the Exemption Order).1

      1
         On January 26, 2018, the BAP reversed the Exemption Order, ruling that
under Colorado law a self-settlor trustee like Debtor retains an ownership interest in
the trust’s assets. The BAP remanded for a determination of whether Debtor
occupied the Property as his homestead on the date of his bankruptcy petition, and if
so, the amount of proceeds he would be entitled to receive from the sale of the
Property. See Parr v. Rodriguez (In re Parr), No. 18-1045, Order at 1-2 (10th Cir.
Feb. 22, 2018) (dismissing Debtor’s appeal of the BAP order for lack of jurisdiction).
                                                                           (continued)
                                           3
      The Trustee filed a motion to dismiss the BAP appeal of the Sale Order,

arguing Debtor was not an aggrieved party with standing to appeal because he had

not filed any objection to the Sale Motion. Debtor did not file a timely response to

the Trustee’s motion to dismiss. Eight days after the response deadline had passed,

Debtor filed a response in which he challenged only the bankruptcy court’s

Exemption Order; he did not challenge the Sale Order, nor did he address the merits

of the Trustee’s standing argument. The BAP granted the Trustee’s motion to

dismiss and later denied Debtor’s motion for rehearing. Debtor appeals.

      II. Discussion. We review de novo the BAP’s dismissal for lack of standing.

See Weston v. Mann (In re Weston), 18 F.3d 860, 862 (10th Cir. 1994). As the party

invoking federal jurisdiction, Debtor bears the burden of establishing standing.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

      In the bankruptcy context, we apply a prudential standing requirement that “is

more stringent . . . than the case or controversy standing requirement of Article III.”

C. W. Mining Co. v. Aquila, Inc., (In re C.W. Mining Co.), 636 F.3d 1257, 1260 n.5

(10th Cir. 2011) (internal quotation marks omitted). Only a person aggrieved by a

bankruptcy court order may seek appellate review of that order. Id. at 1260. To

qualify as a “person aggrieved,” the party must show that his “rights or interests [are]

directly and adversely affected pecuniarily by the decree or order of the bankruptcy

On April 26, 2018, the bankruptcy court determined on remand that Debtor did
occupy the Property as his homestead at the time of his bankruptcy filing and would
be entitled to a $90,000 homestead exemption.

                                           4
court.” Id. (internal quotation marks omitted). A debtor does not qualify as a

“person aggrieved” by a bankruptcy court order “[u]nless the estate is solvent and

excess will eventually go to the debtor, or unless the matter involves rights unique to

the debtor,” such as an “exemption of property from the estate.” In re Weston,
18 F.3d at 863–64 and 864 n.3. Further, and as particularly relevant here,

“[p]rerequisites for being a ‘person aggrieved’ are attendance and objection at a

bankruptcy court proceeding.” Id. at 864 (internal quotation marks omitted).

      Here, in ruling that Debtor lacked standing, the BAP did not make a

determination whether the estate was insolvent, though it noted that there were over

$2 million in claims filed and the estate’s only asset was the Property, valued at the

$1.4 million purchase price. Rather, the BAP ruled that Debtor lacked standing

because he had not filed any objection to the Sale Motion, nor requested a hearing.

The BAP noted that Debtor’s response to the motion to dismiss the appeal for lack of

standing challenged only the Exemption Order, which had no bearing on the Sale

Motion. Thus, the BAP ruled Debtor had failed to demonstrate standing to appeal.

      The Trustee has moved to dismiss Debtor’s appeal to this court asserting

Debtor’s lack of standing. The Trustee notes that Debtor fails to meet the first

prerequisite of standing under Weston, because he did not file any objection to the

Sale Motion. Further, the Trustee again asserts Debtor is not a “person aggrieved”

because the estate is insolvent, as the claims against the estate total $2,305,550.70,

well in excess of the $1.4 million value of its assets.

                                            5
      Debtor makes two arguments in response. First, he claims the bankruptcy

court lacked authority to approve the Sale Motion while his homestead exemption

motion was pending. But this is not an argument that Debtor ever made to the

bankruptcy court, as he filed no objection at all to the Sale Motion, nor did he raise

this argument before the BAP. He next argues that the Trustee is deceiving the court

as to the amount of the claims against the estate, but again, Debtor did not raise this

argument before the BAP. Issues not raised on appeal to the BAP are forfeited in

appeal to this court. Foster v. Hill (In re Foster), 188 F.3d 1259, 1264 n.5 (10th Cir.

1999). But more fundamentally, Debtor fails to address the basis of the BAP’s ruling

that he lacked standing, namely, his failure to object to the Sale Motion.

      We agree with the BAP that Debtor lacks standing to appeal because he did

not object to the Sale Motion. As noted, “[p]rerequisites for being a person

aggrieved are attendance and objection at a bankruptcy court proceeding.”

In re Weston, 18 F.3d at 864 (internal quotation marks omitted). In Weston, the

debtor and a group of creditors opposed the trustee selected by a second group of

creditors. The debtor filed an objection and appeared at the hearing, but the first,

opposing, group of creditors did not file an objection or appear at the hearing. We

held their failure to file an objection or appear at the hearing deprived them of

standing to appeal the resulting order. Id. (“[H]aving chosen not to participate in

[the matter] before the bankruptcy judge, [the appellants] have no standing to appeal

the bankruptcy court’s resolution of the matter.”).

                                           6
      Likewise, Debtor did not file an objection to the Sale Motion, nor request a

hearing. Under Weston, Debtor has not met the prerequisites for being a “person

aggrieved.” We therefore grant the Trustee’s motion to dismiss, and dismiss the

appeal.

                                          Entered for the Court

                                          Bobby R. Baldock
                                          Circuit Judge

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