Court Opinion

ID: 2744534
Source: CourtListenerOpinion
Date Created: 2014-10-22 15:03:11.310649+00
Date Added: 2024-06-11T10:08:38.098946
License: Public Domain

United States Court of Appeals
                        For the Eighth Circuit
                    ___________________________

                            No. 14-1453
                    ___________________________

                In re: Richard Michael Heyl; Jennifer Heyl

                          lllllllllllllllllllllDebtors

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

                               Steve Conway

                         lllllllllllllllllllllAppellant

                              LorCon LLC #1

                                      v.

                          Richard Michael Heyl

                         lllllllllllllllllllllAppellee
                               ____________

                Appeal from the United States Bankruptcy
                  Appellate Panel for the Eighth Circuit
                             ____________

                       Submitted: October 7, 2014
                        Filed: October 22, 2014
                               [Published]
                            ____________

Before LOKEN, MELLOY, and GRUENDER, Circuit Judges.
                           ____________
PER CURIAM.

      Steve Conway appeals the judgment of the Bankruptcy Appellate Panel (BAP),
which dismissed his appeal from an adverse ruling of the bankruptcy court.1 Like the
BAP, we conclude that Conway does not have standing, and dismiss this appeal.

       Debtor Richard Heyl filed a voluntary Chapter 7 bankruptcy petition in August
2009. Through counsel, Conway’s company LorCon, LLC # 1 (LorCon) filed proof
of a claim against Heyl, listing LorCon as the creditor; and Conway and LorCon filed
an adversary proceeding in the bankruptcy court, seeking as relief a ruling that
LorCon’s claim was not dischargeable under 11 U.S.C. § 523(a)(2)(A). After trial on
the merits, the bankruptcy court denied Conway and LorCon’s requested relief.
Conway and LorCon did not appeal, but later moved for relief from judgment under
Fed. R. Bankr. P. 9024 and Fed. R. Civ. P. 60, which the bankruptcy court denied.
Conway and LorCon then appealed to the BAP. After their appellate counsel
withdrew, Conway voluntarily dismissed LorCon from the appeal, and proceeded pro
se. The BAP held that Conway lacked appellate standing, and dismissed his appeal.

      In this court, Conway argues that he has standing to appeal the bankruptcy
court’s order, and he has filed motions to supplement the record with evidence to
demonstrate his standing. Heyl argues that the BAP correctly dismissed Conway’s
appeal for lack of standing, and emphasizes that the proof of claim filed in Heyl’s
bankruptcy proceeding demonstrated that LorCon (not Conway) was the creditor.

      After careful review, we hold that Conway does not have standing to appeal the
bankruptcy court’s adverse ruling on LorCon’s claim. See Peoples v. Radloff, No.
13-2686, 2014 U.S. App. LEXIS 15994, at *5-7 (8th Cir. Aug. 20, 2014) (on appeal

      1
      The Honorable Kathy A. Surratt-States, Chief Judge, United States
Bankruptcy Court for the Eastern District of Missouri.

                                        -2-
from decision of BAP, this court acts as second reviewing court; independently
reviewing standing issue). The proof of claim submitted in Heyl’s bankruptcy
proceeding showed that LorCon had a claim against Heyl’s bankruptcy estate, which
Conway merely sought to enforce. See 11 U.S.C. §§ 101(5), 501(a); Sears v. U.S.
Tr., 734 F.3d 810, 819 (8th Cir. 2013) (appellate standing in bankruptcy case is
determined by person-aggrieved doctrine, which limits standing to those who were
directly and adversely affected pecuniarily by bankruptcy court’s order). Conway,
who has not claimed to be a licensed attorney, cannot litigate on behalf of LorCon.
See Mo. Rev. Stat. §§ 347.069.1 (member, manager, employee, or agent of LLC is not
proper party to proceedings by or against LLC, except where object is to enforce such
person’s right against or duty or liability to LLC), .171 (member of LLC can bring
derivative action on behalf of LLC only if certain conditions are met, including
demand on and refusal of authorized persons to cause LLC to sue in its own right);
Lattanzio v. Comm’n On Massage Therapy Accreditation, 481 F.3d 137, 139-40 (2d
Cir. 2007) (per curiam) (LLC may appear in federal court only through licensed
counsel). Further, Conway has no standing in this bankruptcy appeal to litigate his
derivative interest in LorCon’s claim. Cf. Sears, 734 F.3d at 813, 820-21 (even sole
shareholders of closely held S corporation lacked standing to pursue bankruptcy
appeal, as their interest in litigation was merely derivative of corporation’s).
Conway’s supplemental exhibits submitted to this court do not alter our analysis. Cf.
Dakota Indus. v. Dakota Sportswear, Inc., 988 F.2d 61, 63 (8th Cir. 1993)
(acknowledging narrow interest-of-justice exception to general rule that appellate
court cannot consider evidence that was not contained in record below).

      Accordingly, the appeal is dismissed. See Alexander v. Jensen-Carter, 711
F.3d 905, 908-09 (8th Cir. 2013) (dismissing bankruptcy litigant’s appeal for lack of
standing). Appellant’s motions to supplement the record are denied; appellee’s
motion to strike is granted.
                        ______________________________

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