Court Opinion

ID: 52133
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:12:31+00
Date Added: 2024-06-11T17:19:12.724182
License: Public Domain

United States Court of Appeals
                                                                      Fifth Circuit
                                                                     F I L E D
                   UNITED STATES COURT OF APPEALS
                            FIFTH CIRCUIT                            August 28, 2007

                                                               Charles R. Fulbruge III
                            No. 07-40113                               Clerk
                          Summary Calendar

                   In the matter of: JUAN PEQUEÑO,

                                                                 Debtor.
                            JUAN PEQUEÑO,

                                                                 Appellant,

                               versus

                         MICHAEL B. SCHMIDT,

                                                                     Appellee.

            Appeal from the United States District Court
                 for the Southern District of Texas
                            (1:05-CV-271)

Before REAVLEY, SMITH, and BARKSDALE, Circuit Judges.

PER CURIAM:*

     Juan   Pequeño   challenges,       pro   se,   the   district     court’s

upholding a Chapter 7 bankruptcy settlement entered by his Trustee,

Michael Schmidt.   On the same day Schmidt filed his appellee brief,

he moved separately to dismiss due to mootness.

     “Many courts, including our own ... have employed the concept

of ‘mootness’ to address equitable concerns unique to bankruptcy

     *
       Pursuant to 5TH CIR. R. 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this opinion should not be published and is not precedent except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 CIR. R. 47.5.4.

                                    1
proceedings”.        Matter of Manges, 29 F.3d 1034, 1038 (5th Cir.

1994).    In that regard, mootness “is not an Article III inquiry as

to whether a live controversy is presented; rather, it is a

recognition by the appellate courts that there is a point beyond

which    they    cannot     order   fundamental   changes   in   [bankruptcy]

actions”.       Id. at 1038-39.       This “test for mootness reflects a

court’s    concern    for    striking   the   proper   balance   between   the

equitable considerations of finality and good faith reliance on a

judgment and the competing interests that underlie the right of a

party to seek review of a bankruptcy order adversely affecting

him”.     Id. at 1039 (quoting First Union Real Estate Equity and

Mort. Inv. v. Club Assoc., 956 F.2d 1065, 1069 (11th Cir. 1992)).

     Pequeño contests the district court’s December 2006 affirmance

of the bankruptcy court’s September 2002 approval of a settlement

between Schmidt, Pequeño’s Chapter 7 Trustee, and the City of

Brownsville, successfully sued by Pequeño pursuant to 42 U.S.C. §

1983.    Pequeño contends Schmidt should not have been his Chapter 7

Trustee, because Pequeño moved to convert his Chapter 7 proceeding

to Chapter 13.       His motion to convert, however, was denied.           More

importantly for determining mootness, Pequeño never moved to stay

the settlement entered by Schmidt and the City of Brownsville. Nor

did he ever request a bond or otherwise act to prevent consummation

of the settlement.

                                        2
     That has occurred.   The funds from Pequeño’s judgment against

Brownsville have been paid to the Trustee, who disbursed them,

together with other bankruptcy-estate funds, to creditors.

     Schmidt has acted irreversibly, relying on the settlement. To

allow Pequeño, who never sought a stay, to attack the settlement’s

basis would be inequitable.   In re Morningside Mobile Home RV Park,

32 Fed. App’x 130, at *2 (5th Cir. 2002).   Therefore, the motion to

dismiss is

                                                           GRANTED.

                                 3