Court Opinion

ID: 801264
Source: CourtListenerOpinion
Date Created: 2012-05-30 20:09:35+00
Date Added: 2024-06-11T17:59:59.467967
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                MAY 30 2012

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

JOHN PATRICK STOKES,                             No. 11-35233

              Debtor - Appellant,                D.C. No. 9:10-cv-00099-DWM

  v.
                                                 MEMORANDUM*
TODD GARDNER; DAVAR M.
GARDNER; THOMAS H. BOONE,
Trustee of Boone Karlberg Employees
Profit Sharing Trust; WILLIAM E.
MYTTY; SANDRA F. MYTTY;
QUALITY SUPPLY, INC. PROFIT
SHARING PLAN AND TRUST;
DOUGLAS S. HADNOT; J. CHRISS
CRAWFORD; MYRNA K. CRAWFORD;
STEPHEN S. ELLIS, M.D., P.C.,
EMPLOYEES AMENDED AND
RESTATED PENSION PLAN;
RICHARD JOSEPH SAMSON, Chapter 7
Trustee,

              Appellees.

JOHN PATRICK STOKES,                             No. 11-35270

            Debtor - Appellee,                   D.C. No. 9:10-cv-00099-DWM

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
  v.

TODD GARDNER; DAVAR M.
GARDNER; RICHARD J. SAMSON,
Chapter 7 Trustee,

           Appellants.

In re: JOHN PATRICK STOKES, Debtor,         No. 11-35279
_______________________________,
                                            D.C. No. 9:10-cv-00099-DWM
JOHN PATRICK STOKES,

            Appellee,

  v.

RICHARD J. SAMSON, Chapter 7
Trustee,

            Appellant.

                Appeal from the United States District Court
                        for the District of Montana
                Donald W. Molloy, District Judge, Presiding

                    Argued and Submitted May 9, 2012
                           Seattle, Washington

Before: HAWKINS, GOULD, and BYBEE, Circuit Judges.

                                     2
      Chapter 7 Trustee Richard J. Samson and some of the estate’s creditors

cross-appeal the denial of their motion to dismiss debtor John Patrick Stokes’s

action as equitably moot.1 We review the district court’s determination that

Stokes’s appeal was not equitably moot de novo. See Baker & Drake, Inc. v. Pub.

Serv. Comm’n (In re Baker & Drake, Inc.), 35 F.3d 1348, 1351 (9th Cir. 1994).

On the basis of our recent decision in Motor Vehicle Cas. Co. v. Thorpe Insulation

Co. (In re Thorpe Insulation Co.), –F.3d–, 2012 WL 1089503 (9th Cir. Apr. 3,

2012), which the district court did not have the benefit of, we reverse.

      Whether to dismiss a case on equitable mootness grounds requires first

asking “whether a stay was sought, for absent that a party has not fully pursued its

rights.” Id. at *6. If a stay was sought but not gained, we consider (1) “whether

substantial consummation of the plan has occurred,” (2) “the effect a remedy may

have on third parties not before the court,” and (3) “whether the bankruptcy court

can fashion effective and equitable relief without completely knocking the props

out from under the plan.” Id. A party’s failure to seek a stay may, by itself, render

      1
        Stokes appeals the district court’s order affirming the approval of a
settlement agreement between the Chapter 7 trustee and the estate’s creditors, as
well as the denial of Stokes’s motion to modify an automatic stay of his appeal of
pending state-court litigation. Because we find Stokes’s action equitably moot, we
do not reach the merits of his claims. We also deny Stokes’s request for judicial
notice.
                                          3
that party’s claims equitably moot. Trone v. Roberts Farms, Inc. (In re Roberts

Farms, Inc.), 652 F.2d 793, 798 (9th Cir. 1981) (“If an appellant fails to obtain a

stay after exhausting all appropriate remedies, that well may be the end of his

appeal.”).

      Here, Stokes not only failed to obtain a stay from the bankruptcy court, he

never even asked for one. Id. at 795 (“Appellants did not at any time apply to the

bankruptcy judge for a stay.”); cf. Focus Media, Inc. v. Nat’l Broad. Co. (In re

Focus Media, Inc.), 378 F.3d 916, 924 (9th Cir. 2004) (distinguishing Roberts

Farms and declining to apply the equitable mootness doctrine where the appellant

requested a stay from the bankruptcy court but was denied). Stokes’s failure to

seek a stay resulted in a full execution of the settlement agreement, including the

transfer of all property and the distribution of funds.

      The substantial consummation of the settlement agreement has effected a

comprehensive change of circumstances that renders the creation of an equitable

remedy extremely difficult. Although “unscrambl[ing] the eggs,” see Baker &

Drake, 35 F.3d at 1351, may be theoretically possible, under these circumstances,

we believe that allowing Stokes to proceed with his appeal would be inequitable.

      Therefore, we reverse the district court’s denial of the cross-appellants’

                                           4
motion to dismiss and remand with instructions that the district court dismiss the

case as moot.

      REVERSED AND REMANDED WITH INSTRUCTION TO DISMISS.

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