Court Opinion

ID: 4160795
Source: CourtListenerOpinion
Date Created: 2017-04-17 20:01:10.350268+00
Date Added: 2024-06-11T14:38:13.295798
License: Public Domain

FILED
                           NOT FOR PUBLICATION            APR 12 2017
 1
                                                      SUSAN M. SPRAUL, CLERK
 2                                                      U.S. BKCY. APP. PANEL
                                                        OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP Nos.     EC-16-1147-JuTaB
                                   )                   EC-16-1151-JuTaB
 6   GLORIA ALCORDO ESTILLORE,     )                   (Related Appeals)
                                   )
 7                  Debtor.        )      Bk. No.      1:15-bk-11283
     ______________________________)
 8                                 )      Adv. No.     1:15-ap-01076
     GLORIA ALCORDO ESTILLORE,     )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )      M E M O R A N D U M*
11                                 )
     TRUDI G. MANFREDO, Chapter 7 )
12   Trustee; CORELOGIC SOLUTIONS, )
     LLC; BANK OF AMERICA, N.A.;   )
13   SAGE POINT LENDER SERVICES,   )
     LLC; NATIONSTAR MORTGAGE LLC; )
14   U.S. BANK, N.A.,              )
                                   )
15                  Appellees.     )
     ______________________________)
16
                     Argued and Submitted on March 23, 2017
17                          at Sacramento, California
18                           Filed - April 12, 2017
19            Appeal from the United States Bankruptcy Court
                  for the Eastern District of California
20
        Honorable Fredrick E. Clement, Bankruptcy Judge, Presiding
21                 _____________________________________
22   Appearances:     Appellant Gloria Alcordo Estillore appeared pro
                      se; David R. Jenkins appeared for appellee Trudi
23                    G. Manfredo, chapter 7 trustee; Bernard J.
                      Kornberg appeared on brief for appellees U.S.
24                    Bank., N.A., Bank of America, N.A., and
                      Nationstar Mortgage LLC; Kathryn A. Moorer
25
26
          *
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8024-1.
 1                    appeared on brief for appellee CoreLogic
                      Solutions, LLC.
 2                   ____________________________________
 3   Before:    JURY, TAYLOR, and BRAND, Bankruptcy Judges.
 4        Debtor Gloria Alcordo Estillore (Estillore) appeals from
 5   the bankruptcy court’s orders:      (1) denying her motion under
 6   Civil Rule 60(b)(6)1 to set aside the bankruptcy court’s order
 7   approving a compromise between appellee Trudi G. Manfredo, the
 8   chapter 7 trustee (Trustee), and appellees Bank of America, N.A.
 9   (BANA), Nationstar Mortgage LLC (Nationstar), Sage Point Lender
10   Services, LLC (Sage Point),2 and CoreLogic Commercial Real
11   Estate Services, Inc. (CoreLogic) (BAP No. 16-1147); and
12   (2) dismissing a removed state-court adversary proceeding filed
13   against U.S. Bank National Association, as Trustee for the
14   Certificate Holders of the LXS 2007-15N Trust Fund (U.S. Bank),
15   Nationstar, and Sage Point pursuant to the terms of the
16   settlement agreement (BAP No. 16-1151).      For the reasons set
17   forth below, we AFFIRM the orders on appeal.
18                                 I.   FACTS
19   A.   Prepetition Events
20        1.     The Foreclosure
21        On May 2, 2007, Severino L. Estillore Jr., a married man,
22   and James A. Estillore and Cristyflor Estillore, as husband and
23   wife, (collectively, Borrowers) obtained a $458,480 loan from
24
          1
            Unless otherwise indicated, all chapter and section
25   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532,
26   “Rule” references are to the Federal Rules of Bankruptcy
     Procedure, and “Civil Rule” references are to the Federal Rules
27   of Civil Procedure.
28        2
              Sage Point has not appeared in this appeal.

                                        -2-
 1   Countrywide Bank, FSB (Countrywide).     To secure the loan,
 2   Borrowers executed a deed of trust encumbering real property
 3   located on East Newhall Drive, Fresno, California.     The deed of
 4   trust was assigned to U.S. Bank.      Sage Point was substituted as
 5   trustee under the deed of trust.      On April 14, 2014, Sage Point
 6   recorded a notice of default against the property.
 7        On May 12, 2014, in response to the commencement of
 8   foreclosure, Borrowers executed a quitclaim deed granting their
 9   entire interest in the property to Estillore.
10        On July 18, 2014, Sage Point recorded a notice of trustee’s
11   sale setting a sale date of August 20, 2014.     The sale went
12   forward as scheduled.    The purchaser at foreclosure was U.S.
13   Bank, the owner of the loan.    On September 4, 2014, a trustee’s
14   deed upon sale was recorded.
15        2.     The State Court Lawsuit
16        Prior to the sale, on August 14, 2014, Estillore filed a
17   complaint against U.S. Bank, Nationstar, and Sage Point (the
18   Lending Defendants) in Fresno County Superior Court.     Estillore
19   amended the complaint to add BANA and CoreLogic as defendants.
20   Estillore alleged, among other things, irregularities in the
21   origination of the loan and the foreclosure process.     She
22   requested that the court set aside the foreclosure sale.
23        The Lending Defendants demurred to the first amended
24   complaint.    The state court sustained the demurrer, but granted
25   leave to amend as to some causes of action.     Estillore failed to
26   timely amend the complaint.    The Lending Defendants filed an ex
27   parte motion to dismiss the action due to Estillore’s failure to
28   amend.    The court granted the motion and entered the order

                                     -3-
 1   dismissing the action as to the Lending Defendants.
 2        In response, Estillore filed an unauthorized second amended
 3   complaint which removed the Lending Defendants as parties, but
 4   added several employees and attorneys of the Lending Defendants
 5   as new defendants.    The second amended complaint alleged causes
 6   of action for (1) Violation of the Lanham Act; (2) RESPA and
 7   TILA Violations; (3) Negligent Misrepresentation; (4) Fraud and
 8   Concealment; (5) Conspiracy; (6) Set Aside Trustee’s Sale;
 9   (7) Void or Cancel Deed of Trust; (8) Wrongful Foreclosure;
10   (9) Violation of California Business and Professions Code, and
11   (10) Quiet Title.    The record does not reflect whether the
12   second amended complaint was served on any party.
13   B.   Bankruptcy Events
14        On April 1, 2015, Estillore filed a chapter 7 petition.
15   Ms. Manfredo was appointed the trustee.
16        1.   Compromise Of The State Court Lawsuit
17        As Estillore’s ongoing state court lawsuit was property of
18   the bankruptcy estate, Trustee filed a notice of removal,
19   removing the lawsuit to the bankruptcy court.
20        Trustee then filed a motion to compromise the controversy
21   between Trustee on the one hand and Nationstar, BANA, CoreLogic
22   and Sage Point on the other.    In exchange for $46,000,3 Trustee
23   agreed to a complete dismissal of the adversary proceeding with
24   prejudice, a release of all claims, and withdrawal of the lis
25   pendens which Estillore had filed against the property.    In
26
          3
27          The allocation of the total amount due was as follows:
     BANA - $27,000; Nationstar - $15,000; Sage Point - $2,000; and
28   CoreLogic - $2,000.

                                     -4-
 1   support of the motion, Trustee submitted a report by attorney
 2   David A. Roberts regarding the value of the claims brought in
 3   the lawsuit.   After analyzing the pleadings and papers in the
 4   case, Mr. Roberts concluded that most of the claims brought by
 5   Estillore had no legal merit.
 6        Estillore opposed the motion to compromise, contending that
 7   numerous parties had committed fraud and requesting that Trustee
 8   abandon the lawsuit.
 9        At the hearing on the motion, the bankruptcy court stated
10   its findings of fact and conclusions of law on the record.
11   First, the court found that the settlement was negotiated in
12   good faith.    Second, the court considered the four factors set
13   forth in Martin v. Kane (In re A & C Props.), 784 F.2d 1377,
14   1380-81 (9th Cir. 1986) before concluding that the compromise
15   was fair and equitable.   Those factors include:   (a) the
16   probability of success in the litigation; (b) the difficulties,
17   if any, to be encountered in the matter of collection; (c) the
18   complexity of the litigation involved, and the expense,
19   inconvenience and delay necessarily attending it; and (d) the
20   paramount interest of the creditors and a proper deference to
21   their reasonable views in the premises.
22        As to the first factor, the court found the probabilities
23   of success in the litigation were low.    Regarding the second
24   factor, the bankruptcy court noted there would be no difficulty
25   with collection from the settling parties.    In discussing the
26   third factor, the court found that the litigation was complex
27   and, due to its complexity, the cost of litigation could reach
28   $50,000 or more.   Finally, as to the fourth factor, the court

                                     -5-
 1   found that the paramount interests of the creditors favored
 2   settlement because there would be about $20,000 which could be
 3   distributed to creditors.4    In the end, the bankruptcy court
 4   granted the motion.
 5        On December 22, 2015, the bankruptcy court entered the
 6   order approving the compromise (Compromise Order).       That order
 7   was not appealed.
 8        2.   Motion For Relief Under Civil Rule 60(b)(6)
 9        On April 15, 2016, Estillore filed a motion for relief
10   (MFR) from the Compromise Order.       Relying on Civil Rule
11   60(b)(6), Estillore argued that the compromise was not fair and
12   equitable because she lost her home due to a fraudulent scheme
13   by the defendants.    She also asserted that the parties signing
14   the settlement agreement were not authorized to do so.
15        At the May 17, 2016 hearing, the bankruptcy court denied
16   the MFR on several grounds.    The court observed that the order
17   approving the compromise was entered December 22, 2015, and that
18   Estillore filed the MFR on April 15, 2016, four months later.
19   The court noted that under Civil Rule 60(c)(1), Estillore was
20   required to file her MFR under Civil Rule 60(b)(6) within a
21   “reasonable time.”    The court concluded that the MFR was not
22   filed within a reasonable time under the circumstances of the
23   case — Estillore was present at the hearing on the motion for
24   compromise, and she offered no explanation for her delay in
25   bringing the MFR.
26
27
          4
            As discussed below, Estillore had not yet claimed a
28   proper exemption in the state court lawsuit.

                                      -6-
 1        The court also observed that Estillore sought relief based
 2   on the court’s error in applying the facts and law to the
 3   compromise.   The bankruptcy court noted that when a Civil Rule
 4   60(b) motion is made based on the court’s error, the motion must
 5   be made before the expiration of the time for appeal under the
 6   holding in Gila River Ranch v. United States, 368 F.2d 354, 357
 7   (9th Cir. 1966); see also Morris v. Adams-Millis Corp., 758 F.2d
 8   1352, 1358 (10th Cir. 1985) (“A contrary rule would permit a
 9   [Civil Rule] 60(b) motion to serve as an appeal, which would be
10   untimely otherwise.”).   Therefore, the court held that Estillore
11   could not use the MFR as a substitute for a timely appeal.
12        Finally, the bankruptcy court found that although Estillore
13   was proceeding under Civil Rule 60(b)(6), her arguments fell
14   within the scope of Civil Rule 60(b)(1).   Accordingly, the court
15   concluded that her motion was not properly brought under Civil
16   Rule 60(b)(6) nor had she demonstrated “‘extraordinary
17   circumstances’” suggesting that she was “faultless in the
18   delay.”   Pioneer Inv. Servs. v. Brunswick Assocs., 507 U.S. 380,
19   393 (1993).
20        The bankruptcy court denied the MFR in a Civil Minute Order
21   dated May 17, 2016.   Estillore filed a timely notice of appeal
22   from that order (BAP No. 16-1147).
23        3.   Dismissal Of The Adversary Proceeding
24        At the same May 17, 2016 hearing, the bankruptcy court held
25   a status conference on the removed state-court adversary
26   proceeding.   Trustee asked the bankruptcy court to dismiss the
27   adversary proceeding with prejudice pursuant to the terms of the
28   settlement agreement which had been approved by the court.   The

                                    -7-
 1   bankruptcy court agreed and entered a Civil Minute Order
 2   dismissing the adversary proceeding with prejudice.   Estillore
 3   filed a timely notice of appeal from that order (BAP No. 16-
 4   1151).5
 5                            II.   JURISDICTION
 6         The bankruptcy court had jurisdiction over this proceeding
 7   under 28 U.S.C. §§ 1334 and 157(b)(2)(A) and (O).   As explained
 8   below, we conclude that we have jurisdiction over both appeals
 9   under 28 U.S.C. § 158.
10                              III.    ISSUES
11         A.   Does Estillore have standing in these appeals?
12         B.   Is the appeal from the order denying Estillore’s MFR
13   moot?
14         C.   Did the bankruptcy court abuse its discretion by
15   denying Debtor’s MFR from the Compromise Order?
16         D.   Did the bankruptcy court abuse its discretion by
17   dismissing the adversary proceeding with prejudice?
18   ///
19
20
           5
            Rule 7058 incorporates Civil Rule 58 and applies in
21   adversary proceedings. Civil Rule 58(a) states that every
     judgment must be entered on a separate document. The order
22
     dismissing the adversary proceeding in BAP No. 16-1151 may not
23   be a sufficiently separate final judgment under Civil Rule
     58(a). Although no separate judgment was entered, the
24   bankruptcy court’s order became final under Civil Rule
     58(c)(2)(B) 150 days after the order was entered on the docket.
25   Regardless, the separate judgment requirement is not
26   jurisdictional and can be waived. See Bankers Tr. Co. v.
     Mallis, 435 U.S. 381, 384–85 (1978). On appeal, Estillore did
27   not argue the lack of a separate judgment. Accordingly, she
     waived her right to require entry of a separate judgment. Id.
28   at 386.

                                       -8-
 1                          IV.   STANDARDS OF REVIEW
 2         Our jurisdiction, including the issues of standing and
 3   mootness, are questions of law subject to de novo review.      Menk
 4   v. LaPaglia (In re Menk), 241 B.R. 896, 903 (9th Cir. BAP 1999);
 5   Wiersma v. D.H. Kruse Grain & Milling (In re Wiersma), 324 B.R.
 6   92, 110 (9th Cir. BAP 2005).
 7         We review a motion for relief under Rule 9024, which
 8   incorporates Civil Rule 60(b), for an abuse of discretion.     Cel-
 9   A-Pak v. Cal. Agric. Labor Relations Bd., 680 F.2d 664, 668 (9th
10   Cir. 1982); Tennant v. Rojas (In re Tennant), 318 B.R. 860, 866
11   (9th Cir. BAP 2004).
12         Rule 7041, which incorporates Civil Rule 41, governs the
13   dismissal of adversary proceedings.     A bankruptcy court’s
14   decision to dismiss an adversary proceeding under Civil Rule
15   41(a)(2) is reviewed under an abuse of discretion standard.
16   Sams v. Beech Aircraft Corp., 625 F.2d 273, 277 (9th Cir. 1980).
17         Under the abuse of discretion standard, we first “determine
18   de novo whether the [bankruptcy] court identified the correct
19   legal rule to apply to the relief requested.”      United States v.
20   Hinkson, 585 F.3d 1247, 1261-62 & n.21 (9th Cir. 2009) (en
21   banc).   If the bankruptcy court identified the correct legal
22   rule, we then determine under the clearly erroneous standard
23   whether its factual findings and its application of the facts to
24   the relevant law were: “(1) illogical, (2) implausible, or
25   (3) without support in inferences that may be drawn from the
26   facts in the record.”    Id.
27   ///
28   ///

                                       -9-
 1                              V.   DISCUSSION
 2   A.     Estillore’s Standing To Appeal
 3          Although no party raised the issue of Estillore’s standing
 4   to appeal the MFR and dismissal order, we have an independent
 5   obligation to examine our own jurisdiction, and standing “is
 6   perhaps the most important of [the jurisdictional] doctrines.”
 7   FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990).
 8   Bankruptcy appellate standing is limited to those persons who
 9   can demonstrate that they are directly and adversely affected
10   pecuniarily by an order of the bankruptcy court.        Robinson v.
11   Fondiller (In re Fondiller), 707 F.2d 441, 442–43 (9th Cir.
12   1983).    A party asserting standing must demonstrate that the
13   bankruptcy court’s order either diminishes his property,
14   increases his burdens, or detrimentally affects his rights.        Id.
15   at 442.    The pecuniary interest requirement extends to a
16   debtor’s objections regarding proposed settlements.        In re Rake,
17   363 B.R. 146, 151 (Bankr. D. Idaho 2007).
18          It is well-established that a chapter 7 debtor ordinarily
19   lacks standing to challenge orders affecting the assets of the
20   estate unless there is likely to be a surplus after bankruptcy.
21   Duckor Spradling & Metzger v. Baum Trust (In re P.R.T.C., Inc.),
22   177 F.3d 774, 778 (9th Cir. 1999).      However, an exception to
23   this rule is when a debtor shows that there is property that may
24   be the subject of an allowed exemption.      In re Rake, 363 B.R. at
25   151.    If, for example, the settlement would result in proceeds
26   that may be exempt or partially exempt, then the debtor would
27   have a pecuniary interest in the settlement.      Id.
28          Estillore’s original schedule C did not include the

                                      -10-
 1   litigation claims and used § 522(b)(3) as a ground for her
 2   exemptions.    On October 28, 2015, Trustee filed the motion for
 3   compromise.    Prior to the entry of the Compromise Order, on
 4   December 18, 2015, Estillore filed an amended schedule C using
 5   § 522(b)(3) for her exemptions, including exempting the
 6   litigation.    Trustee objected to her exemptions, arguing that
 7   § 522(b)(3) could not be used as a basis for Estillore’s
 8   exemptions.    In response, Estillore amended her schedule C on
 9   March 7, 2016, claiming a $26,600 exemption in the “Sage Point
10   Lender Services, LLC in default.”       Trustee has not objected to
11   this exemption and represented at the hearing on this matter
12   that Estillore’s wildcard exemption would be honored.      We thus
13   conclude that Estillore’s claimed exemption gives her a
14   pecuniary interest in the claims compromised, and therefore she
15   has standing in these appeals.
16   B.   Jurisdiction Over BAP No. 16-1147
17        Trustee, U.S. Bank, and BANA argue that Estillore’s appeal
18   of the order denying her MFR is moot under § 363(m)6 as she
19   failed to obtain a stay of the Compromise Order.
20        For their mootness argument, they rely on the holding in
21
22        6
              Section 363(m) provides:
23
          The reversal or modification on appeal of an
24        authorization under subsection (b) or (c) of this
          section of a sale or lease of property does not affect
25        the validity of a sale or lease under such
26        authorization to an entity that purchased or leased
          such property in good faith, whether or not such
27        entity knew of the pendency of the appeal, unless such
          authorization and such sale or lease were stayed
28        pending appeal.

                                      -11-
 1   Adeli v. Barclay (In re Berkeley Del. Court, LLC), 834 F.3d 1036
 2   (9th Cir. 2016).    In Adeli, the debtor filed a prepetition
 3   lawsuit against a creditor-lender regarding the validity of a
 4   prepetition loan.    The debtor filed a chapter 11 case which was
 5   converted to chapter 7.    The creditor removed the action to the
 6   bankruptcy court.    Because the bankruptcy estate held legal
 7   claims against the lender, the trustee determined that a
 8   settlement offered fair and equitable terms to the estate.      The
 9   trustee filed a motion seeking approval of the settlement under
10   Rule 9019 and the sale of the estate’s claims under § 363(b),
11   which the bankruptcy court granted.     In doing so, the bankruptcy
12   court found that the sale was entered into by the parties
13   without collusion and in good faith.
14        The debtor’s principal appealed the bankruptcy court’s
15   approval of the settlement to the district court, but he failed
16   to seek a stay of the sale order.      The district court dismissed
17   the appeal as moot under § 363(m).     Id. at 1039.   The court also
18   rejected the appellant’s arguments that the mootness rule would
19   not apply where the overbid procedures did not result in
20   competing bids, or where the counterparty was not an “outside
21   party”.   Id. at 1040.
22        The Ninth Circuit affirmed, concluding that the failure of
23   the debtor to seek a stay of the order approving the settlement
24   rendered the appeal moot.    The Ninth Circuit reasoned that the
25   disposition by way of the compromise of a claim that is an asset
26   of the estate is the equivalent of a sale of the intangible
27   property represented by the claim.     The Ninth Circuit also found
28   that the evidence supported the bankruptcy court’s finding that

                                     -12-
 1   the creditor was a purchaser in good faith.    Accordingly,
 2   because settlement of the claims constituted a sale under
 3   § 363(b), and since the debtor did not seek a stay of the order
 4   approving the settlement, § 363(m) prevented judicial review of
 5   the sale of the claims unless the sale was not in good faith.
 6   The Ninth Circuit affirmed the dismissal of the appeal.
 7        Adeli is factually distinguishable from this case.    Unlike
 8   the trustee in Adeli, Trustee did not mention § 363 or the sale
 9   of an asset in her motion to approve the compromise nor did she
10   request a good faith finding under § 363(m).    Her declaration
11   did not discuss the good faith of the settling parties under
12   § 363(m) standards and at no time did the bankruptcy court
13   actually decide whether any of the settling parties - BANA,
14   Nationstar, or CoreLogic - was a good faith purchaser for
15   purposes of § 363(m).   Although the bankruptcy court found that
16   the settlement was negotiated in good faith, it did not make an
17   affirmative finding of good faith under § 363(m).    “‘Good faith’
18   is a factual determination,” and “[u]nless and until ‘good
19   faith’ has been determined, the appeal is not moot under
20   § 363(m).”   Thomas v. Namba (In re Thomas), 287 B.R. 782, 785
21   (9th Cir. 2002); see also Fitzgerald v. Ninn Worx Sr, Inc. (In
22   re Fitzgerald), 428 B.R. 872, 881 (9th Cir. BAP 2010) (“Without
23   a proper ‘good faith’ finding under § 363(m), there is no safe
24   harbor to shield the Sale Order from appellate review and
25   appellate remedies.”) (citing T.C. Inv’rs v. Joseph (In re M
26   Capital Corp.), 290 B.R. 743, 746 (9th Cir. BAP 2003)).
27   Accordingly, the appeal is not moot despite Estillore’s failure
28   to obtain a stay.   We thus have jurisdiction to decide

                                    -13-
 1   Estillore’s appeal of the MFR (BAP No. 16-1147).
 2   C.   MFR Under Civil Rule 60(b)(6)
 3        On appeal, Estillore raises errors related to the
 4   bankruptcy court’s approval of the compromise and the merits of
 5   the state court litigation.   However, we do not consider these
 6   alleged errors.   The scope of our review is limited to the
 7   bankruptcy court’s denial of her MFR.    In re Tennant, 318 B.R.
 8   at 866 (“[A]n appeal from an order denying a [Civil Rule] 60(b)
 9   motion brings up for review only the correctness of that denial
10   and does not bring up for review the final judgment.”).    Given
11   the limited scope of our review, the merits of the state court
12   litigation are not properly before us.
13        As already indicated, Estillore’s MFR was expressly based
14   on Civil Rule 60(b)(6).   Relief under Civil Rule 60(b)(6) is to
15   be “used sparingly as an equitable remedy to prevent manifest
16   injustice and is to be utilized only where extraordinary
17   circumstances prevented a party from taking timely action to
18   prevent or correct an erroneous judgment.”   Latshaw v. Trainer
19   Wortham & Co., 452 F.3d 1097, 1103 (9th Cir. 2006).   “[A] motion
20   for reconsideration should not be granted, absent highly unusual
21   circumstances, unless the [bankruptcy] court is presented with
22   newly discovered evidence, committed clear error, or if there is
23   an intervening change in the controlling law.”   Marlyn
24   Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873,
25   880 (9th Cir. 2009).   In addition, a motion brought under Civil
26   Rule 60(b)(6) “must be made within a reasonable time.”    Civil
27   Rule 60(c)(1).
28        Relief under Civil Rule 60(b)(6) requires a showing that

                                    -14-
 1   the moving party was affected by “external, extraordinary
 2   circumstances” and was “faultless in the delay.”    Pioneer Inv.
 3   Servs., 507 U.S. at 393.    Nowhere did Estillore demonstrate that
 4   there were external, extraordinary circumstances beyond her
 5   control that prevented her from acting sooner or that she was
 6   faultless in the delay.    We find no abuse of discretion for
 7   denial of her MFR on this ground.
 8        In addition, Estillore was required to file her MFR under
 9   Civil Rule 60(b)(6) within a “reasonable time,” a standard which
10   “depends upon the facts of each case, taking into consideration
11   the interest in finality, the reason for delay, the practical
12   ability of the litigant to learn earlier of the grounds relied
13   upon, and prejudice to other parties.”    Ashford v. Steuart, 657
14   F.2d 1053, 1055 (9th Cir. 1981).    Estillore filed her MFR four
15   months after the Compromise Order was entered and provided no
16   explanation for the delay.    Without a reason for the delay, on
17   this record we cannot say that the bankruptcy court abused its
18   discretion when it denied the motion as untimely.
19        Moreover, Estillore argued in the MFR that the bankruptcy
20   court made errors of fact or law which are generally considered
21   “mistakes” under Civil Rule 60(b)(1).    Fid. Fed. Bank, FSB v.
22   Durga Ma Corp., 387 F.3d 1021, 1024 (9th Cir. 2004) (“The
23   district court has discretion to correct a judgment for mistake
24   or inadvertence, either on the part of counsel or the court
25   itself.”); Phonometrics, Inc. v. Hospitality–Franchise Sys.,
26   Inc., 126 F. App’x 793, 794 (9th Cir. 2005) (unpublished
27   decision) (“The ‘mistakes' of judges may be remedied under
28   [Civil Rule 60(b)(1)], which also encompasses mistakes in the

                                     -15-
 1   application of the law.”).   Therefore, the bankruptcy court
 2   properly observed that Estillore’s arguments pertaining to the
 3   errors of the court were improper under Civil Rule 60(b)(6).
 4   Civil Rule 60(b)(6) is not a substitute for motions brought
 5   under Civil Rule 60(b)(1).   See Lyon v. Augusta S.P.A., 252 F.3d
 6   1078, 1088–89 (9th Cir. 2001).
 7        A motion under Civil Rule 60(b)(1) must be brought within a
 8   reasonable time, which must be “no more than a year after the
 9   entry of the judgment or order.”    Unless a Civil Rule 60(b)(1)
10   motion based on legal errors is filed within the time for taking
11   an appeal, a court will find it untimely.   See Gila River Ranch,
12   368 F.2d at 357; accord Lebahn v. Owens, 813 F.3d 1300, 1305
13   (10th Cir. 2016) (“[A Civil] Rule 60(b)(1) motion asserting
14   mistake of law is untimely—and therefore gives the district
15   court no authority to grant relief—unless brought within the
16   time to appeal.”); see also Gonzalez v. Crosby, 545 U.S. 524,
17   536–38 (2005) (Civil Rule 60(b)(6) not available to raise
18   alleged errors that should have been raised in an appeal).
19   Estillore had 14 days to appeal the Compromise Order.   See Rule
20   8002(a).   Estillore did not file her MFR within the time for
21   taking an appeal, waiting almost four months before doing so.
22   Accordingly, the bankruptcy court found her MFR untimely.
23   Again, the bankruptcy court did not abuse its discretion by
24   denying her MFR on this ground.
25        Estillore also complains on appeal that the appellants
26   engaged in fraud.   She alleged in her initial MFR that the
27   signatures on the settlement agreement were not authorized.     On
28   appeal, she argues that the signatories either “don’t exist or

                                      -16-
 1   they don’t have the titles as stated on the documents that they
 2   are signing.”   At another point, she argues that Trustee
 3   “intentionally allowed the fraudulent agreement” and suggests
 4   that the parties who signed the agreement had no personal
 5   knowledge of the underlying contract and that their signatures
 6   were possibly forged.   Finally, she argues that fraud on the
 7   court occurred because Mr. Roberts’ report submitted in support
 8   of the compromise was false.7
 9        “Acts of ‘fraud on the court’ can sometimes constitute
10   extraordinary circumstances meriting relief under [Civil] Rule
11   60(b)(6).”8   Latshaw, 452 F.3d at 1104.   The Ninth Circuit
12   explained:
13        Such fraud on the court ‘embrace[s] only that species
          of fraud which does or attempts to, defile the court
14        itself, or is a fraud perpetrated by officers of the
          court so that the judicial machinery can not perform
15        in the usual manner its impartial task of adjudging
          cases that are presented for adjudication.’
16
          Liberal application is not encouraged, as fraud on the
17        court ‘should be read narrowly, in the interest of
18
          7
19          In her MFR, Estillore’s fraud arguments related to the
     unauthorized signatures on the settlement agreement. Her other
20   arguments regarding fraud and fraud on the court appear for the
     first time on appeal. In general, we do not consider an issue
21   raised for the first time on appeal. Cold Mountain v. Garber,
22   375 F.3d 884, 891 (9th Cir. 2004). However, because of
     Estillore’s pro se status, we construe her pleadings liberally.
23   Kashani v. Fulton (In re Kashani), 190 B.R. 875, 883 (9th Cir.
     BAP 1995).
24
          8
            Because of this possibility, we do not construe
25   Estillore’s fraud arguments as solely within the scope of Civil
26   Rule 60(b)(3) (fraud (whether previously called intrinsic or
     extrinsic), misrepresentation, or misconduct by an opposing
27   party). We also note that the bankruptcy court has discretion
     to set aside a judgment for fraud on the court under Civil Rule
28   60(d)(3).

                                     -17-
 1        preserving the finality of judgments.’ Our court
          places a high burden on a plaintiff seeking relief
 2        from a judgment based on fraud on the court. For
          example, in order to provide grounds for relief, the
 3        fraud must ‘involve an ‘unconscionable plan or scheme
          which is designed to improperly influence the court in
 4        its decision.’
 5        In Latshaw, the plaintiff accepted and signed an offer from
 6   the defendants to settle her lawsuit under Civil Rule 68.    Two
 7   months after the entry of the judgment, she moved to rescind and
 8   vacate the defendants’ offer of judgment under Civil Rule 60(b).
 9   She sought relief under multiple theories, including relief
10   under Civil Rule 60(b)(6) on the basis that her attorney had
11   forged the signature of local counsel on the acceptance of the
12   offer, which was then submitted to the court.   In applying the
13   above referenced standards, the Ninth Circuit held that although
14   it may have been fraud to forge a signature and the fraud may
15   have reached the court, the attorney’s alleged conduct fell “far
16   short of ‘defiling the court itself’ and hardly resembled an
17   ‘unconscionable plan or scheme which is designed to improperly
18   influence the court in its decision.’”   Id. at 1044.
19        Although Estillore alleged the signatures on the settlement
20   agreement were unauthorized in her original motion, implicitly
21   raising the possibility of fraud, there is no evidence
22   supporting her allegations other than her conclusory
23   declaration.   Her declaration falls far short of proving fraud
24   on the court under the heightened standards set forth in
25   Latshaw.   On this record, it was thus within the bankruptcy
26   court’s discretion to deny relief under Civil Rule 60(b)(6) on
27   the basis of fraud to the extent it was even considered.
28        In sum, for all the reasons discussed, the bankruptcy

                                    -18-
 1   court’s denial of Estillore’s MFR was not an abuse of
 2   discretion.
 3   D.   Dismissal Of The Adversary Proceeding
 4        The bankruptcy court’s dismissal of the adversary
 5   proceeding was based on Civil Rule 41(a)(2) which provides that
 6   “an action may be dismissed at the plaintiff’s request only by
 7   court order, on terms that the court considers proper.”
 8        Because the claims set forth in the lawsuit were property
 9   of the estate under § 541(a)(1), Estillore lacked standing to
10   prosecute the claims as plaintiff.       It is undisputed that
11   Trustee had the authority to settle those claims and did so in a
12   court-approved settlement.      The dismissal of the adversary
13   proceeding with prejudice was a term of the settlement.       Since
14   the bankruptcy court approved the settlement, it follows that
15   dismissal of the adversary proceeding with prejudice was not an
16   abuse of discretion.   There was no longer any controversy and
17   the agreement of all the defendants in the lawsuit to the
18   dismissal was apparent.
19                             VI.    CONCLUSION
20        For the reasons stated, we AFFIRM both orders on appeal.
21
22
23
24
25
26
27
28

                                       -19-