Court Opinion

ID: 4701808
Source: CourtListenerOpinion
Date Created: 2021-07-07 16:03:20.252011+00
Date Added: 2024-06-11T08:06:20.452378
License: Public Domain

FILED
                                                               United States Court of Appeals
                                UNITED STATES COURT OF APPEALS         Tenth Circuit

                                     FOR THE TENTH CIRCUIT                        July 7, 2021
                                     _________________________________
                                                                              Christopher M. Wolpert
                                                                                  Clerk of Court
    In re: CHANNING N. WILSON,

                Debtor.

    ------------------------------

    JARED WALTERS,

                Plaintiff - Appellee,

    v.                                                             No. 20-1315
                                                               (BAP No. 20-037-CO)
    CHANNING N. WILSON,                                     (Bankruptcy Appellate Panel)
    individually and as managing
    director of Rainbow Trout
    Enterprises,

                Defendant - Appellant.
                              _________________________________

                                      ORDER AND JUDGMENT *
                                      _________________________________

Before HARTZ, BRISCOE, and BACHARACH, Circuit Judges.
                  _________________________________

*
      Oral argument would not materially help us to decide the appeal, so
we have decided the appeal based on the record and the parties’ briefs. See
Fed. R. App. P. 34(a)(2)(C); 10th Cir. R. 34.1(G).

      Our order and judgment does not constitute binding precedent except
under the doctrines of law of the case, res judicata, and collateral estoppel.
But the order and judgment may be cited for its persuasive value if
otherwise appropriate. See Fed. R. App. P. 32.1(a); 10th Cir. R. 32.1(A).
      The threshold issue in this appeal involves appellate standing. The

appellant bears the burden of presenting a theory of appellate standing.

Raley v. Hyundai Motor Co., 642 F.3d 1271, 1275 (10th Cir. 2011). In our

view, the appellant (Mr. Channing Wilson) did not present such a theory.

He’s defending a separate entity’s ownership of assets. So the alleged

injury falls on the separate entity, not Mr. Wilson.

      The debtor transfers assets to a separate entity. Mr. Wilson faced

a steep tax bill and transferred assets to an entity, Rainbow Trout

Enterprises. After transferring the assets, he filed bankruptcy. The trustee

brought an adversary proceeding against Rainbow Trout Enterprises to

avoid the transfer and restore the underlying assets to the bankruptcy

estate.

      The bankruptcy court granted a default judgment to the trustee

against Rainbow Trout Enterprises. Mr. Wilson appealed, and the

Bankruptcy Appellate Panel dismissed his appeal based on a lack of

appellate standing. Mr. Wilson filed a new appeal to us, and we dismiss

this appeal. 1

1
      Under our local rules, motions to dismiss should ordinarily be filed
within 14 days of the notice of appeal. See 10th Cir. R. 27.3(A)(3)(a). Here
the trustee waited 21 days before moving to dismiss. But we need not
decide whether the trustee’s motion was timely because we can sua sponte
address prudential standing. Adams ex rel. D.J.W. v. Astrue, 659 F.3d
1297, 1299–1301 (10th Cir. 2011).
                                      2
      Standing is prudentially restricted. We prudentially restrict

standing to individuals whose financial rights or interests are directly and

adversely affected by the bankruptcy court’s order. C.W. Mining Co. v.

Aquila, Inc. (In re C.W. Mining Co.), 636 F.3d 1257, 1260 n.5 (10th Cir.

2011). The bankruptcy court did not purport to grant any relief against

Mr. Wilson. The court instead granted a default judgment against Rainbow

Trout Enterprises, an entity separate from Mr. Wilson.

      Mr. Wilson defends the legality of Rainbow Trout Enterprises as a

pure trust organization, alleging ineffective assistance of counsel and

misleading impressions in the trustee’s motion for a default judgment. 2 But

these issues do not affect appellate standing.

      Mr. Wilson is not directly and adversely affected by the

bankruptcy court’s order. Mr. Wilson apparently has an interest in

2
     In his reply brief, Mr. Wilson suggests that he is an aggrieved person
because the judgment impairs his constitutional right to contract.
Appellant’s Reply Br. at 4. We decline to consider this argument for three
reasons:

      1.    The argument was omitted in Mr. Wilson’s opening appeal
            brief. SEC v. DeYoung, 850 F.3d 1172, 1180 n.3 (10th Cir.
            2017).

      2.    Mr. Wilson did not adequately develop this argument. Id.

      3.    He did not present this argument to the Bankruptcy Appellate
            Panel and has not argued plain error. Richison v. Ernest Grp.,
            Inc., 634 F.3d 1123, 1131 (10th Cir. 2011).

                                      3
keeping the assets in Rainbow Trout Enterprises to shield them from his

creditors. But in his adversary action, the trustee targeted assets owned by

Rainbow Trout Enterprises, not Mr. Wilson. So the bankruptcy court’s

default judgment did not directly and adversely affect Mr. Wilson’s

financial interests. See Preblich v. Battley (In re Preblich), No. 93–35855,

1995 WL 41393, at *1 (9th Cir. Feb. 1, 1995) (unpublished) (concluding

that the debtor lacked standing to contest a bankruptcy court’s order that

she had fraudulently transferred property to two relatives); Prince v. Chow

(In re Prince), 548 F. App’x 262, 263 (5th Cir. 2013) (per curiam)

(unpublished) (concluding that a debtor lacked standing to appeal a

bankruptcy court’s finding of a fraudulent transfer to a trust because the

debtor appealed individually rather than on behalf of the trust). Mr. Wilson

thus lacked appellate standing as an individual.

      Mr. Wilson cannot prosecute the appeal as a representative of

Rainbow Trout Enterprises. The caption identifies Mr. Wilson not only

as an individual but also as the managing director of Rainbow Trout

Enterprises, which he identifies as a pure trust organization. Because

Mr. Wilson is appearing pro se, we liberally construe his caption to raise

the possibility of standing as a representative of the alleged trust. See

White v. Colorado, 82 F.3d 364, 366 (10th Cir. 1996). Even with this

liberal construction, however, Mr. Wilson would lack appellate standing as

the trust’s managing director.

                                       4
      Federal law authorizes parties to “plead and conduct their own cases

personally or by counsel.” 28 U.S.C. § 1654 (emphasis added). Although

individuals may represent their own personal interests without an attorney,

artificial entities may appear in court only through licensed counsel. See

Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 506 U.S.

194, 202 (1993) (stating that “all artificial entities” must be represented by

licensed counsel).

      Trusts are artificial entities that exist independently of their trustees.

Conagra Foods, Inc. v. Americold Logistics, LLC, 776 F.3d 1175, 1176

(10th Cir. 2015), aff’d sub nom. Americold Realty Tr. v. Conagra Foods,

Inc., 577 U.S. 378 (2016). So if the trustee is not a licensed attorney, he or

she cannot represent the trust. See United States v. Lain, 773 F. App’x 476,

477 (10th Cir. 2019) (unpublished) 3 (concluding that a trustee, who was not

a licensed attorney, could not represent the trust); Knoefler v. United Bank

of Bismarck, 20 F.3d 347, 348 (8th Cir. 1994) (“A nonlawyer, such as these

purported ‘trustee(s) pro se’ has no right to represent another entity, i.e., a

trust, in a court of the United States.”). Even if Mr. Wilson is the trust’s

managing director, as implied in the caption, this position would not

entitle him to prosecute the appeal on behalf of the trust itself.

3
      Lain is persuasive, but not precedential. See note *.

                                       5
      Because Mr. Wilson lacks the authority to practice law, he cannot

represent the interests of a separate entity like the trust itself.

                                      * * *

      In light of the absence of appellate standing, we dismiss the appeal.

                                     Entered for the Court

                                     Robert E. Bacharach
                                     Circuit Judge

                                        6