Court Opinion

ID: 162352
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:32:08+00
Date Added: 2024-06-11T09:05:17.087647
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                           JUN 26 2002
                              FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk

    JOHN ADKINS, JR.;
    SHANNA ADKINS,

                Appellants,

    v.                                                   No. 00-4142
                                                    (D.C. No. 00-CV-35-B)
    F. WAYNE ELGGREN, trustee;                             (D. Utah)
    DONALD R. WOOD; FEDERAL
    LAND BANK ASSOCIATION OF
    UTAH; AMRESCO; FUR BREEDERS
    AGRICULTURAL COOPERATIVE;
    QUALITY STONE,

                Appellees.

                              ORDER AND JUDGMENT          *

Before EBEL , HOLLOWAY , and MURPHY , 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      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
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.

      Chapter 11 debtors John and Shanna Adkins appeal from an order of the

district court dismissing as moot their appeal from a bankruptcy court order. This

court has jurisdiction pursuant to 28 U.S.C. § 1291 and affirms the district court’s

dismissal.

                                 BACKGROUND

      The parties are familiar with the facts and we only briefly repeat them here.

Pursuant to an approved liquidating plan of reorganization, the bankruptcy court

entered an order approving the sale of estate property, Chalk Creek Ranch, under

11 U.S.C. § 363(b). The court expressly found that the purchaser was a good

faith purchaser within the meaning of 11 U.S.C. § 363(m) and that the sale was in

the best interest of the estate under the approved reorganization plan. The sale

was automatically stayed for ten days pursuant to Fed. R. Bankr. P. 6004(g), until

December 13, 1999.

      On December 13, the debtors filed an appeal of the bankruptcy court’s

order in district court and filed a motion for stay pending appeal in bankruptcy

court. The stay hearing was not scheduled until December 15, 1999; thus, the

automatic stay expired. On December 14, the trustee sold the property, the

trustee’s deed and the bankruptcy court’s order approving the sale were recorded,

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the purchase price was paid into the bankruptcy estate, and the trustee disbursed

funds from the sale. At the stay hearing, the bankruptcy court ruled there was no

basis to grant a stay pending appeal. It concluded the appeal was moot since the

property had been sold and, on the merits, there was no likelihood of success on

appeal because the trustee had a duty to sell the property under the liquidating

plan of reorganization and obtained a good price for the property, and any stay

would not be in the public interest because it would delay payments to the

creditors. In June 2000, the district court dismissed the appeal as moot under

11 U.S.C. § 363(m).

                                       ANALYSIS

       “We review legal determinations by the bankruptcy court de novo, while

we review its factual findings under the clearly erroneous standard.”    Osborn v.

Durant Bank & Trust Co. (In re Osborn)      , 24 F.3d 1199, 1203 (10th Cir. 1994).

Where a sale of property has been approved by the bankruptcy court under

11 U.S.C. § 363(b), a party must obtain a stay of the sale or else any appeal of

the approval will become moot.      See 11 U.S.C. § 363(m); Tompkins v. Frey

(In re Bel Air Assocs., Ltd. ), 706 F.2d 301, 304-05 (10th Cir. 1983) (applying

predecessor Bankruptcy Rule 805). An exception exists if it is possible for the

bankruptcy court to grant some measure of effective relief that does not affect the

validity of the sale.   In re Osborn , 24 F.3d at 1203-04.

                                            -3-
       This court agrees with the district court that the debtors’ appeal is moot.

The debtors failed to obtain a stay of the bankruptcy court’s order prior to the

sale. The debtors claim that the bankruptcy court denied the stay based on

representations from the trustee that the sale of the property had closed the

previous day. They claim the property was not validly sold at the time of the stay

hearing because the trustee’s deed was not properly recorded on December 14,

1999. This argument lacks merit.

       The bankruptcy court denied the stay not only because of the sale, but also

because it found no likelihood of success on the merits of the appeal. Further,

contrary to debtor’s claim, the legal description of the Chalk Creek Ranch

property was included in the documents submitted and accepted for recording on

December 14, 1999.      See Utah Code Ann. § 57-3-105 (requiring that legal

description of real property be included with documents presented for recording).

Moreover, under Utah law, “[w]hether or not recorded, a conveyance is valid as

between the parties to it and as against those with notice of it.”   Johnson v.

Higley, 989 P.2d 61, 69 (Utah Ct. App. 1999);        see also Utah Code Ann.

§ 57-3-102(3). Thus, it is clear the Chalk Creek Ranch property was validly sold

on December 14, 1999.

       Debtors’ next argument, that the court should not apply § 363(m) because it

works an overly harsh result in this case, also lacks merit. Under the very terms

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of § 363(m), it is irrelevant whether the trustee or purchaser had knowledge of or

anticipated the debtors’ pending appeal at the time of the sale. Further, this court

finds no authority, and debtor cites none, for ignoring the requirements of

§ 363(m), which are jurisdictional in nature, simply because it works a harsh

result. United Mine Workers of Am. Combined Fund v. CF & I Fabricators of

Utah, Inc . (In re CF & I Fabricators of Utah, Inc   .), 169 B.R. 984, 990 (D. Utah

1994) (“[A] lack of mootness is a jurisdictional requirement to any federal case or

controversy.”).

      We do not address debtors’ remaining arguments, that the purchaser was

not a good faith purchaser of the property, making § 363(m) inapplicable, or that

the bankruptcy court could have provided some measure of effective relief by

allowing the debtors to seek damages against the trustee for breach of his

fiduciary duty to the estate. Debtors raised neither argument to the district court,

and it is well established that this court will not consider arguments or claims not

presented to the court below.   See, e.g, Walker v. Mather   (In re Walker ), 959 F.2d

894, 896 (10th Cir. 1992).

                                           -5-
      The trustee’s motion to dismiss this appeal is DENIED. The order of the

United States District Court for the District of Utah dismissing the bankruptcy

appeal is AFFIRMED.

                                                   Entered for the Court

                                                   Michael R. Murphy
                                                   Circuit Judge

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