Court Opinion

ID: 4458937
Source: CourtListenerOpinion
Date Created: 2019-11-26 01:00:24.565852+00
Date Added: 2024-06-11T14:51:38.412236
License: Public Domain

Case: 18-41024      Document: 00515212592         Page: 1    Date Filed: 11/25/2019

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                  United States Court of Appeals
                                                                           Fifth Circuit

                                      No. 18-41024                       FILED
                                                                 November 25, 2019
                                                                    Lyle W. Cayce
In the Matter of: DONALD LEE CARDWELL,                                   Clerk

              Debtor

DAVID MCKINNON; BARBARA MARSHALL, L.P.; NORTH PONDEROSA,
L.L.C.,

              Appellants

v.

MARK WEISBART,

              Appellee

                   Appeal from the United States District Court
                        for the Eastern District of Texas
                             USDC No. 4:17-CV-405

Before WIENER, HIGGINSON, and HO, Circuit Judges.
PER CURIAM:*
       Appellants David McKinnon, Barbara Marshall, L.P., and North
Ponderosa, L.L.C. (“McKinnon Parties”) appeal an order of the district court
affirming the following decisions of the bankruptcy court: (1) applying

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
     Case: 18-41024      Document: 00515212592        Page: 2     Date Filed: 11/25/2019

                                     No. 18-41024
collateral estoppel to findings of fact litigated in Texas state court and (2)
vacating its earlier order approving the sale of a 94-acre tract of land under
Federal Rule of Civil Procedure 60(d)(3). 1 In so ruling, the district court relied
on the state court’s findings of fact and conclusions of law.
      After the bankruptcy court applied collateral estoppel to the state court
findings of fact and conclusions of law, and after the district court affirmed the
bankruptcy court’s decision, the Court of Appeals for the Fifth District of Texas
at Dallas issued an opinion which may call into question the preclusive effect
of the state trial court’s findings of fact. 2
      We note that the bankruptcy court’s conclusion, and the district court’s
subsequent agreement, that the McKinnon Parties committed fraud may well
turn out to be correct. But the courts’ extensive reliance on collateral estoppel
makes it difficult for us to reconstruct how those courts would have reasoned
in the absence of the state court findings of fact and conclusions of law. On
remand, it would not surprise us if the courts reached the same result as
before. But it is a decision they need to make in the first instance. We thus
VACATE the order of the district court and REMAND this case to the district
court for further consideration in light of the opinion of the Court of Appeals
for the Fifth District of Texas at Dallas.

      1  Fed. R. Civ. P. 60(d)(3) (“This rule does not limit a court’s power to set aside a
judgment for fraud on the court”).
       2 McKinnon v. Gurley, No. 05-16-00246-CV, 2018 WL 5291874, at *1 (Tex. App.—

Dallas Oct. 25, 2018).
                                            2