Court Opinion

ID: 7801889
Source: CourtListenerOpinion
Date Created: 2022-08-19 00:00:26.749919+00
Date Added: 2024-06-11T16:29:21.647418
License: Public Domain

Case: 22-50021     Document: 00516438040         Page: 1     Date Filed: 08/18/2022

              United States Court of Appeals
                   for the Fifth Circuit
                                                                        United States Court of Appeals
                                                                                 Fifth Circuit

                                                                               FILED
                                                                         August 18, 2022
                                  No. 22-50021                            Lyle W. Cayce
                                                                               Clerk

   In the Matter of: Mark Dale Mattlage-Thurmond and
   Robert Jewell Snowden

                                                                        Debtors,

   Mark Dale Mattlage-Thurmond; Robert Jewell
   Snowden,

                                                                     Appellants,

                                       versus

   First National Bank of McGregor, doing business as
   Your Bank for Life,

                                                                        Appellee.

                  Appeal from the United States District Court
                       for the Western District of Texas
                            USDC No. 6:21-CV-835

   Before Stewart, Elrod, and Graves, Circuit Judges.
   Per Curiam:*

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 22-50021     Document: 00516438040          Page: 2   Date Filed: 08/18/2022

                                   No. 22-50021

          The bankruptcy court did not err when it overruled an objection that
   the debtors filed over a year after the bank submitted an amended proof of
   claim, even though the parties had previously agreed that all objections must
   be submitted within fourteen (14) days of the filing of the amended proof of
   claim. We affirm.
                                         I.
          Spouses Mark Dale Mattlage-Thurmond and Robert Jewell Snowden
   (the “Debtors”) owned approximately 186 acres of land in Crawford, Texas
   (“Crawford Property”). In 2015, First National Bank of McGregor d/b/a
   Your Bank for Life (the “Bank”) made a loan to the Debtors, constituting a
   refinance on the Crawford Property.
          That same year, the Debtors sought additional financing to build an
   RV park, retreat, and vacation venue on the Crawford Property. The Bank
   made a series of five construction loans to finance this project. Each
   construction loan was secured by a separate deed of trust on the Crawford
   Property. The Debtors built a swimming pool and an apartment complex on
   the property, and they partially completed the RV park. However, they could
   not complete the project in its entirety due to overspending and weather
   delays, amongst other issues.
          The Debtors nonetheless opened their venue to the public but were
   unable to realize their financial projections for revenues. The Bank tried to
   help by extending the notes’ maturity and payment terms. The Debtors were
   unable even to make interest-only payments on the notes.
          Ultimately, the Bank accelerated the notes and posted the Crawford
   Property for foreclosure, and, on November 4, 2019, the Debtors filed a
   voluntary Chapter 11 case.

                                         2
Case: 22-50021      Document: 00516438040          Page: 3   Date Filed: 08/18/2022

                                    No. 22-50021

          On December 17, 2019, the Bank filed a Motion for Relief from Stay
   with the bankruptcy court. The Debtors objected. On February 26, 2020,
   after a settlement conference, the bankruptcy court entered an Agreed Order
   that had been established between the Bank and the Debtors. The Agreed
   Order was signed by counsel for the Debtors and the Bank.
          The Bank and the Debtors “agreed as follows” to these key
   provisions:
          • As of the Debtors’ Petition Date . . . [the Bank] has a claim
            against the Debtors for $1,174,085.35.
          • [The Bank] will file an amended proof of claim in the
            Debtors’ case, setting forth additional amounts, charges and
            fees owed by the Debtors as of the Petition Date.
          • Should the Debtors object to any portion of [the Bank’s]
            amended proof of claim (other than the $1,174,085.35
            amount of [the Bank’s] claim referenced above, the Debtors
            must file and serve an objection within fourteen (14) days of
            the filing of [the Bank’s] amended proof of claim.
          • Should the Debtors not file an objection to [the Bank’s]
            amended proof of claim, the Debtors shall be deemed to
            have agreed that such claim should be allowed as filed.
          • The Debtors contemplate payment of the amounts owed to
            [the Bank] as described herein shall be paid.
          As contemplated by the Agreed Order, the Bank filed its Amended
   Proof of Claim for $1,470,188.28 on March 16, 2020. The Debtors did not
   file any objections within the 14-day window or the ensuing months. On April
   27, 2021—over a year after the Bank filed its Amended Proof of Claim—the
   Debtors filed an Objection to the Amended Proof of Claim (“Objection”).
   The Debtors’ primary objection was that they had pending claims against the
   Bank and did not owe any funds. On July 29, 2021, the bankruptcy court
   overruled the Objection, the district court affirmed, and this appeal followed.

                                         3
Case: 22-50021      Document: 00516438040          Page: 4    Date Filed: 08/18/2022

                                    No. 22-50021

                                         II.
          “We apply the same standard of review to the bankruptcy court’s
   findings of fact and conclusions of law as applied by the district court.”
   Matter of Pratt, 524 F.3d 580, 584 (5th Cir. 2008); see also Drive Fin. Servs.,
   L.P. v. Jordan, 521 F.3d 343, 346 (5th Cir. 2008) (“When directly reviewing
   an order of the bankruptcy court, we apply the same standard of review that
   would have been used by the district court.”). We review the bankruptcy
   court’s findings of fact for clear error and its conclusions of law de novo.
   Matter of Am. Hous. Found., 785 F.3d 143, 152 (5th Cir. 2015), as revised (June
   8, 2015). “Under a clear error standard, this court will reverse only if, on the
   entire evidence, we are left with the definite and firm conviction that a
   mistake has been made.” Id. (quotation omitted).
                                         III.
          The Agreed Order contains three critical statements about when it
   would go into effect, each of which is tethered to whether the Debtors filed
   any objections: First, only the initial amount of $1,174,085.34 was excluded
   from objections. Any other objections had to be filed within fourteen (14)
   days of the Bank’s Amended Proof of Claim. Lastly, if no objections were
   filed, the terms of the Amended Proof of Claim would be allowed. The Bank
   filed its Amended Proof of Claim for $1,470,188.28 on March 16, 2020,
   which included “additional amounts, charges and fees owed by the Debtors
   as of the Petition Date.” The Debtors could have objected to this amount
   because the explicit language of the Agreed Order only prohibited them from
   challenging the $1,174,085.35 amount previously agreed upon in a settlement
   conference. But the Debtors filed no objection within the fourteen days
   allotted. Instead, they waited over a year and filed their Objection on April
   27, 2021.

                                          4
Case: 22-50021      Document: 00516438040           Page: 5   Date Filed: 08/18/2022

                                     No. 22-50021

          The plain language of the Agreed Order indicates that the Debtors’
   objections were untimely, and the bankruptcy court correctly found that the
   Debtors’ inaction deemed the Amended Proof of Claim “allowed as filed.”
   There was no error in the bankruptcy court overruling the Debtors’
   Objection.
                                         IV.
          The Debtors’ remaining arguments are meritless. On appeal, “the
   burden is on the appellants to show error.” Murphy v. St. Paul Fire & Marine
   Ins. Co., 314 F.2d 30, 31 (5th Cir. 1963). To the extent the Debtors assert that
   they are entitled to equitable relief, they have provided no legal basis to
   support this contention. While the bankruptcy court may issue orders that
   are “necessary or appropriate to carry out the provisions” regarding the
   Bankruptcy Code, it cannot use these equitable powers “to fashion
   substantive rights and remedies not contained in the Bankruptcy Code or
   Rules or negate substantive rights that are available.” Matter of Smith, 21 F.3d
   660, 665 (5th Cir. 1994). The bankruptcy court held hearings, reviewed the
   evidence on multiple occasions, and determined that res judicata and the
   statute of frauds barred the Debtors’ claims. The Debtors have not provided
   any indication that they are otherwise entitled to equitable relief.
          The Debtors also assert that they are entitled to reconsideration of the
   Agreed Order. 11 U.S.C. § 502(j) states that “a claim that has been allowed
   or disallowed may be reconsidered for cause.” However, the Debtors failed
   to move for reconsideration of the Agreed Order. And we need not review
   matters raised for the first time on appeal. See Stewart Glass & Mirror, Inc. v.
   Auto Glass Discount Centers, Inc., 200 F.3d 307, 316-17 (5th Cir. 2000).
          We AFFIRM the district court.

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