Court Opinion

ID: 170027
Source: CourtListenerOpinion
Date Created: 2010-08-14 17:56:45+00
Date Added: 2024-06-11T17:25:05.259485
License: Public Domain

FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                 December 3, 2007
                   UNITED STATES COURT OF APPEALSElisabeth A. Shumaker
                                                                    Clerk of Court
                           FOR THE TENTH CIRCUIT

    In re:

    LOG FURNITURE, INC.,

              Debtor.                              Nos. 07-4041, 07-4042,
                                                    07-4043 & 07-4044
                                                    (Nos. UT-06-050 &
    CARI ALLEN,                                          UT-06-051)
                                                           (BAP)
              Appellant,

    v.

    ELIZABETH R. LOVERIDGE,
    Trustee; GOLDEN MEADOWS
    PROPERTIES, LLC; NUPETCO
    ASSOCIATES,

              Appellees.

                           ORDER AND JUDGMENT *

Before TYMKOVICH, BALDOCK, and EBEL, Circuit Judges.

*
       After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist 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not binding precedent, except under the doctrines of law of the case, res judicata,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.
      In these four appeals, consolidated for briefing purposes only, Cari Allen,

proceeding pro se, challenges several determinations of the Bankruptcy Appellate

Panel (BAP). We affirm the BAP’s orders and judgments.

                          GENERAL BACKGROUND

      Ms. Allen is a frequent litigant in the Chapter 7 bankruptcy proceedings

involving debtor Log Furniture, Inc., an insolvent manufacturer of log furniture.

See Allen v. Chapter 7 Tr., 223 F. App’x 770, 771-72 (10th Cir. 2007)

(concerning an unsuccessful attempt to remove bankruptcy trustee);

Log Furniture, Inc. v. Call, 180 F. App’x 785, 786-87 (10th Cir. 2006)

(concerning an unsupported claim of illegality in the filing of the bankruptcy

petition, with the court’s observation that Ms. Allen has been party “to no less

than nine separate legal actions raising these same issues”), cert. denied,

127 S. Ct. 938 (2007). Ms. Allen describes herself as a “creditor, displaced

officer, director and management [sic] of Log Furniture . . . and pledgor of her

own personal Log Furniture stock.” Aplt. Br. at 2.

      The present cases arise from a settlement reached by the trustee of Log

Furniture’s bankruptcy estate, Elizabeth Loveridge, and three related creditors,

Nupetco Associates (which had a secured claim of $551,073.43), Neuman Petty,

and Golden Meadows Properties, LLC. The parties’ settlement agreement

resolved three disputes: (1) the trustee’s adversary proceeding to set aside a

prepetition assignment to Nupetco of Log Furniture’s claims against its landlord,

                                         -2-
(2) the bankruptcy estate’s claims against Petty, and (3) the validity of Nupetco’s

asserted lien on $53,980.69 of liquidation-auction proceeds. Ms. Allen objected

to the trustee’s motion to approve the settlement agreement, arguing that the

estate would be able to pay the unsecured creditors if the trustee properly pursued

the litigation and managed the liquidation of Log Furniture’s property. She

claimed that the trustee had “committed bankruptcy crimes.” Aplt. App., Vol. I

at 210-11.

      The bankruptcy court held an evidentiary hearing to marshal the relevant

facts for its determination on the proposed settlement. The trustee provided

testimony concerning the parties’ competing claims for relief, the potential costs

of litigation, and an accountant’s damage report. Ms. Allen argued against the

settlement, accusing the trustee of “malfeasance, misfeasance, de[re]liction of

duty and conspiratorial conduct,” without objecting to the trustee’s evidence or

introducing relevant evidence of her own. Id. at 212.

      Because the settlement involved potential legal claims, the bankruptcy

court analyzed the evidence in light of four factors: (1) the chance of success of

the litigation on the merits; (2) the possible problems in collecting a judgment;

(3) the expense and complexity of the litigation; and (4) the interests of creditors.

See Kopp v. All Am. Life Ins. Co. (In re Kopexa Realty Venture Co.), 213 B.R.

1020, 1022 (B.A.P. 10th Cir. 1997). Based on its evaluation of the relevant

factors, the bankruptcy court approved a modified version of the agreement.

                                          -3-
      As modified, the agreement required the trustee to pay the creditors

$29,980.69 from auction proceeds, abandon unliquidated equipment and inventory

assets, dismiss the adversary proceeding, transfer the claims against the landlord

to the creditors, and release Mr. Petty from any claims the estate may have

against him. In return, the creditors would release their liens on the remaining

auction proceeds and accept the funds paid to them in full satisfaction of their

claims against the estate.

      Months after approval of the settlement agreement, creditors Golden

Meadows and Nupetco filed amended proofs of claim. Ms. Allen objected,

asserting that these claims were inconsistent, contradictory, and unsupported. She

also argued that the amended claims demonstrated that the settlement agreement

was based on inaccurate information. Therefore, she reasoned, the court should

set aside the agreement as invalid.

      The creditors later admitted that the agreement had resolved all their claims

and moved to withdraw the amended claims. After holding a hearing, the

bankruptcy court found that the creditors did not object to disallowance of the

amended claims, which were subsumed into the settlement agreement.

Accordingly, the court entered an order disallowing the amended claims and

specifically stating “that nothing in this Order shall be construed to modify the

terms of validity of this Court’s Order Approving Settlement Agreement.” Aplt.

App., Vol. II at 590.

                                         -4-
      Ms. Allen filed a motion for a new trial, again arguing that the

disallowance of the claims required the court to vacate the order approving

settlement. The bankruptcy court summarily denied the motion. Ms. Allen

appealed to the BAP, which affirmed the bankruptcy court rulings and also denied

a procedural motion. In this court, she has filed four separate appeals of the BAP

rulings.

                                  DISCUSSION

                                   No. 07-4041

      In No. 07-4041, Ms. Allen seeks reversal of the bankruptcy court’s grant of

her own motion to disallow the creditors’ claims. As the BAP aptly stated,

“[b]ecause the bankruptcy court disallowed the claims as [Ms.] Allen requested,

her appeal goes not to the result but apparently to the bankruptcy court’s

underlying reasoning.” R., doc. 4 at 7. “We independently review the decision

of the Bankruptcy Court . . . , not that of the BAP.” Rupp v. United Sec. Bank

(In re Kunz), 489 F.3d 1072, 1077 (10th Cir. 2007). We consider “the bankruptcy

court’s legal determinations de novo and its factual findings under the clearly

erroneous standard.” Houlihan Lokey Howard & Zukin Capital v. Unsecured

Creditors’ Liquidating Trust (In re Commercial Fin. Servs., Inc.), 427 F.3d 804,

810 (10th Cir. 2005) (quotation omitted).

      Ms. Allen argues that the bankruptcy court should have vacated the order

approving the settlement when it disallowed the amended proofs of claim.

                                        -5-
We see no error in the bankruptcy court’s determination to disallow the claims

and re-affirm its order approving the settlement agreement. Settlement

agreements are interpreted under the general rules of contract law. Flying J Inc.

v. Comdata Network, Inc., 405 F.3d 821, 831 (10th Cir. 2005), cert. denied,

126 S.Ct. 1331 (2006). As a matter of law, the bankruptcy court correctly

concluded that the approved settlement agreement encompassed the creditors’

claims.

                                    No. 07-4042

      Ms. Allen’s next appeal is directed to a BAP procedural order entered in

her appeal of the bankruptcy court’s decision to disallow the creditors’ notice of

claims. The BAP denied Ms. Allen’s motion to reconsider its refusal to extend

time and allow her to file an oversized reply brief and supplemental appendix.

Ms. Allen contends that the BAP should have given her an opportunity to reply to

her adversaries’ misrepresentations and support her argument with supplemental

material.

      Matters such as this are left to the discretion of the court. Nielsen v. Price,

17 F.3d 1276, 1277 (10th Cir. 1994) (finding no abuse of discretion in dismissing

bankruptcy appeal because of untimely-filed brief); cf. Panis v. Mission Hills

Bank, N.A., 60 F.3d 1486, 1494 (10th Cir. 1995) (finding no abuse of discretion

in permitting late filing). We perceive no abuse of discretion in the denial of

Ms. Allen’s reconsideration motion.

                                         -6-
                                   No. 07-4043

      Case No. 07-4043 raises Ms. Allen’s fundamental issue: whether the

bankruptcy court properly approved the parties’ settlement agreement.

“A bankruptcy court’s approval of a compromise may be disturbed only when

it achieves an unjust result amounting to a clear abuse of discretion. The

bankruptcy court’s decision to approve the settlement, however, must be an

informed one based upon an objective evaluation of developed facts.” Reiss v.

Hagmann, 881 F.2d 890, 891-92 (10th Cir. 1989) (citation omitted).

      Ms. Allen argues that the settlement represents an unjust result because the

parties engaged in fraud and conspiracy, but she failed to introduce evidence to

support her contentions. Our review of the record convinces us that the

bankruptcy court’s decision was informed, properly analyzed, and a reasonable

exercise of discretion.

                                   No. 07-4044

      Ms. Allen again challenges the BAP’s denial of her motion for

reconsideration, this time as entered in her BAP appeal of the approval of the

settlement agreement. In No. 07-4042, we concluded that her appeal of the

BAP’s ruling was meritless. For the same reasons, we also reject her arguments

in No. 07-4044.

                                        -7-
                                 CONCLUSION

      The judgments of the Bankruptcy Appellate Panel are AFFIRMED in all

respects. We GRANT Ms. Allen’s requests to proceed in forma pauperis.

We note, however, that her appeals border on the frivolous: that is, “lack[ing]

an arguable basis in either law or fact.” Thompson v. Gibson, 289 F.3d 1218,

1222 (10th Cir. 2002). We caution Ms. Allen against filing similarly meritless

appeals in the future.

                                              Entered for the Court

                                              Bobby R. Baldock
                                              Circuit Judge

                                        -8-