Court Opinion

ID: 4164107
Source: CourtListenerOpinion
Date Created: 2017-04-27 20:04:17.235102+00
Date Added: 2024-06-11T14:23:47.230522
License: Public Domain

NOT FOR PUBLICATION
                                                                            FILED
                                                                            APR 27 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

                                                 No. 15-56043
In re: WILLIAM ROBERT NORRIE,
                                                 D.C. No. 2:15-cv-01979-BRO
          Debtor,
__________________________________
                                                 MEMORANDUM*
JOHN NORRIE, as Trustee of Brooks                and ORDER
Ave Trust,

             Appellant,

  v.

BRAD D. KRASNOFF, Chapter 7 Trustee,

             Appellee.

                   Appeal from the United States District Court
                       for the Central District of California,
                 Beverly Reid O’Connell, District Judge, Presiding

                             Submitted April 5, 2017**
                               Pasadena, California

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before:         WARDLAW and CALLAHAN, Circuit Judges, and QUIST, Senior
                District Judge.***

      John Norrie appeals the district court’s order dismissing as equitably moot

Norrie’s appeal of the bankruptcy court’s order dismissing his first amended

complaint in an adversary proceeding. We have jurisdiction pursuant to 28 U.S.C.

§§ 158(d) and 1291, and we affirm.

      In reviewing a district court’s determination that an appeal is equitably

moot, “we review factual findings for clear error and legal conclusions de novo.”

JMPCC 2007–C1 Grasslawn Lodging, LLC v. Transwest Resort Props. Inc. (In re

Transwest Resort Props., Inc.), 801 F.3d 1161, 1168 (9th Cir. 2015) (citing Rev Op

Grp. v. ML Manager LLC (In re Mortgs. Ltd.), 771 F.3d 1211, 1214 (9th Cir.

2010)).

       “An appeal is equitably moot if the case presents transactions that are so

complex or difficult to unwind that debtors, creditors, and third parties are entitled

to rely on the final bankruptcy court order.” Id. at 1167. We have identified four

considerations that bear on whether an appeal of a bankruptcy proceeding is

equitably moot: whether the party seeking relief sought a stay of the bankruptcy

court’s order, whether the transaction has been substantially consummated, what

effect a remedy might have on third parties not before the court, and whether the

          ***
             The Honorable Gordon J. Quist, Senior District Judge for the United
States Court for the Western District of Michigan, sitting by designation.
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bankruptcy court can “practically and equitably” fashion relief that would not

completely unwind the transaction. Motor Vehicle Cas. Co. v. Thorpe Insulation

Co. (In re Thorpe Insulation Co.), 677 F.3d 869, 881 (9th Cir. 2012).

      Here, Norrie “flunked the first step . . . [by] not apply[ing] to the bankruptcy

judge for a stay.” Trone v. Roberts Farms, Inc. (In re Roberts Farms, Inc.), 652

F.2d 793, 798 (9th Cir. 1981). In addition, the sale of the property closed and the

proceeds were distributed to various parties while Norrie’s appeal was pending.

Thus, the bankruptcy court could not fashion equitable and effective relief against

the property without unwinding the sale and adversely affecting third parties who

relied on the bankruptcy court’s sale order. See Baker & Drake, Inc. v. Pub. Serv.

Comm’n of Nev. (In re Baker & Drake, Inc.), 35 F.3d 1348, 1351 (9th Cir. 1994)

(“The classic example of mootness in the bankruptcy context is a case in which the

debtor has failed to seek a stay of foreclosure and the debtor’s property has been

sold. The transfer to a third party precludes meaningful relief.”).

      Norrie’s request in his amended adversary complaint for general and special

damages “against the subject property and bankruptcy estate” does not save his

appeal from being moot. Norrie’s claims were limited to equitable relief against

the property, and he has not demonstrated a legal basis for an award of damages

against either the property or the estate.

                                             3
      Norrie’s motion to take judicial notice, filed March 8, 2016, and the

Trustee’s motion to take judicial notice, filed May 11, 2016, are granted.

      AFFIRMED.

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