Court Opinion

ID: 162304
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:31:11+00
Date Added: 2024-06-11T17:24:39.490961
License: Public Domain

F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                   UNITED STATES COURT OF APPEALS
                                                                          JUN 3 2002
                          FOR THE TENTH CIRCUIT
                                                                    PATRICK FISHER
                                                                             Clerk

    In re:

    JAMES EDWARD CAMPBELL,

             Debtor.                                   No. 00-4195
                                                   (D.C. No. 00-CV-543)
                                                         (D. Utah)
    COVINGTON CAPITAL
    CORPORATION,

             Appellant,

    v.

    JAMES EDWARD CAMPBELL,
    Debtor,

             Appellee.

                          ORDER AND JUDGMENT            *

Before EBEL , HOLLOWAY , and MURPHY , Circuit Judges.

*
      This order and judgment is not binding precedent, except under the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.
      After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument.

      Appellant Covington Capital Corporation challenges an order of the district

court affirming the decision of the bankruptcy judge regarding the appropriate

interest rate to be applied to a secured claim in a Chapter 13 proceeding.

      Subsequent to the filing of this appeal, appellee James Edward Campbell

exercised his statutory right to convert his Chapter 13 proceeding to a Chapter 7

proceeding. See 11 U.S.C. § 1307(a) (providing absolute right of Chapter 13

debtor to convert case). Accordingly, Campbell filed a motion to dismiss the

appeal, arguing that the issue raised by Covington was moot in light of his

conversion of the underlying action.

      Generally an appeal should be dismissed as moot when events occur
      that prevent the appellate court from granting any effective relief.
      The central question in determining whether a case has become moot
      is whether the issues presented are no longer live or the parties lack
      a legally cognizable interest in the outcome.

Phelps v. Hamilton, 122 F.3d 885, 891 (10th Cir. 1997) (quotations omitted).

      Here, the only effective relief that could theoretically be granted to

Covington would be a remand ordering the bankruptcy court to apply the proper

interest rate in the Chapter 13 proceeding. This relief is no longer available,

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however, as the proceedings have been converted to a petition under Chapter 7.

For this reason, courts have recognized that a debtor’s conversion of a bankruptcy

proceeding from one chapter of the Bankruptcy Code to another generally

obviates the need to further litigate the issues in the original proceeding, thereby

mooting an appeal from the original proceeding.     See In re J.B. Lovell Corp.,

876 F.2d 96, 98-99 (11th Cir. 1989); see also In re Roller, 999 F.2d 346, 347

(8th Cir. 1993) (appeal from Chapter 12 petition dismissed as moot where case

was converted from Chapter 12 to Chapter 7 and conversion was not stayed);

In re Cook, 730 F.2d 1324, 1326 (9th Cir. 1984) (appeal from bankruptcy court

order in Chapter 11 proceeding mooted when case had been dismissed and

a discharge obtained in separate Chapter 7 case).

      Covington concedes that the funds in the possession of the Chapter 13

trustee are now delivered to the Chapter 7 trustee for distribution under the

statutory scheme applicable to Chapter 7 proceedings, and further concedes that

“this Court may not be able to grant effective relief to the specific parties in this

appeal.” Aplt. Resp. to Mot. to Dismiss at 7. Covington argues, however, that

Campbell cannot assert mootness when the alleged mootness was brought about

by his own actions. In support of this contention, Covington cites Mills v. Green,

159 U.S. 651, 653 (1895), which permits dismissal of an appeal when mootness

results “without any fault of the defendant.” Thus, Covington contends, Mills

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prohibits Campbell from “self-dealing” a dismissal of the appeal by creating

a mootness problem through his own actions. There is no support for the

contention that Campbell’s exercise of an absolute statutory right to convert his

case to Chapter 7 constitutes “fault of the defendant” as that concept is used in

Mills. Further, when mootness is based on “the inability of the court to grant

effective relief, the conduct of the parties is irrelevant in determining whether the

claim is moot.” In re Nat’l Mass Media Telecomm. Sys., Inc., 152 F.3d 1178,

1180 (9th Cir. 1998).

      Covington also argues that this appeal falls under a public interest

exception to the mootness doctrine, citing Southern Pacific Co. v. Interstate

Commerce Commission, 219 U.S. 433 (1911). Covington asserts that the issue

it presents in this appeal may arise repeatedly, yet evade review in light of the

ability of Chapter 13 debtors to convert the underlying bankruptcy proceeding,

citing In re Commerce Oil Co., 847 F.2d 291, 293 (6th Cir. 1988) (“If the

underlying dispute between the parties is one ‘capable of repetition yet evading

review’ we may hear the case although it is technically moot.”) (quotation

omitted). Covington contends it will be subject to the same controversy in the

future, and the nature and timing of a Chapter 13 case may repeatedly preclude

effective review.

                                          -4-
      To meet the “capable of repetition yet evading review” exception to

mootness, two conditions must be satisfied: (1) the challenged action must be in

its duration too short to be fully litigated prior to its cessation or expiration, and

(2) there must be a reasonable expectation that the same complaining party will be

subjected to the action again. Fischbach v. N.M. Activities Ass’n, 38 F.3d 1159,

1161 (10th Cir. 1994). The application of a particular rate in Chapter 13

proceedings is not an event of inherently limited duration such that it will always

evade review. See McAlpine v. Thompson, 187 F.3d 1213, 1217 (10th Cir. 1999)

(exception does not apply where party cannot demonstrate that future occurrences

will be so short in duration that they will evade review).

      In light of the conversion of the underlying proceeding, we are unable to

grant any effective relief. Accordingly, the appeal is DISMISSED as moot.

                                                       Entered for the Court

                                                       Michael R. Murphy
                                                       Circuit Judge

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