Court Opinion

ID: 164689
Source: CourtListenerOpinion
Date Created: 2010-08-14 08:31:18+00
Date Added: 2024-06-11T17:24:45.200154
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                          MAY 27 2004
                            FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                                 Clerk

    DONALD E. ARMSTRONG,

                Plaintiff-Appellant,

    v.                                                   No. 03-4098
                                                  (D.C. No. 2:02-CV-909-DB)
    STEVEN R. BAILEY, individually                         (D. Utah)
    and as trustee of Willow Brook
    Cottages, L.L.C.; DUANE H.
    GILLMAN, individually; and
    MCDOWELL & GILLMAN, P.C.,

                Defendants-Appellees.

                            ORDER AND JUDGMENT            *

Before McCONNELL , ANDERSON , and BALDOCK , Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

this appeal.   See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
       Plaintiff-appellant Donald E. Armstrong appeals the order of the district

court dismissing, with prejudice, his adversary proceeding for lack of jurisdiction.

Finding no error, we affirm.

       In June 2002, while his Chapter 11 case was still pending, Armstrong filed

for relief under Chapter 13. His case was assigned No. 02-29051 (the Chapter 13

case). In July 2002, defendant Bailey filed a proof of claim in the Chapter 13

case and later filed a motion for relief from stay in order to pursue a cross-appeal

then pending in this court. In response to Bailey’s filings, Armstrong filed an

adversary proceeding in the Chapter 13 case and the same day filed a motion to

withdraw the reference and demand for jury trial.

       By the time the adversary proceeding was at issue in the district court,

the bankruptcy court had dismissed the underlying Chapter 13 case. Because of

that dismissal, the district court, finding that the adversary proceeding depended

on the bankruptcy case for its existence, dismissed the adversary proceeding

with prejudice, citing   Pauley v. Bank One Colorado Corp.   , 205 B.R. 272

(D. Colo. 1997).

                                          -2-
       Armstrong does not argue that the dismissal of the claims emanating from

his Chapter 13 case was error;   1
                                     he does, however, contend that the dismissal

should have been without prejudice.

       A related proceeding is usually dismissed when the underlying bankruptcy

case is dismissed.   Pauley , 205 B.R. at 274. But if an adversary proceeding is

only “related to” the underlying bankruptcy case, the district court has discretion

over whether to retain jurisdiction.     Id. at 274-75. In contrast, if the adversary

proceeding “depends upon the bankruptcy case for its existence, . . . jurisdiction

is [] automatically stripped from a federal court,” and no discretion is involved,

id. at 275.

       When the district court rightly concluded that this adversary proceeding

depended on the bankruptcy case for its existence, it was required to dismiss the

adversary proceeding. This is an adjudication on the merits of the jurisdictional

issue. Thus, the disposition of this case is with prejudice in the sense that it

operates as a limitation on subsequent litigation by Armstrong. That is, any

attempt by Armstrong to refile this case in federal court will be conclusively

barred by the jurisdictional ruling we affirm here.

1
       To the extent Armstrong argues that the district court erred in dismissing
the case because he had intertwined issues from his still-pending Chapter 11
bankruptcy in the Chapter 13 adversary proceeding, we note that claims relating
to his Chapter 11 case, 00-26592, are only properly brought in that case, not in
this wholly separate matter.

                                             -3-
      The Supreme Court has explained that a dismissal without prejudice

primarily means that the plaintiff is not barred “from returning later, to the same

court, with the same underlying claim.”     Semtek Int’l Inc. v. Lockheed Martin

Corp. , 531 U.S. 497, 505 (2001). Because the district court was stripped of its

jurisdiction by the dismissal of the underlying bankruptcy case, Armstrong cannot

return later to that same court to bring the same claim. Thus, under these

circumstances, and whether characterized as a dismissal with prejudice or

as a decision with collateral estoppel effect on relitigation of the jurisdictional

issue in a federal district court, we find no error in the district court’s ruling.

See Matosantos Commercial Corp.       v. Applebee’s Int’l Inc. , 245 F.3d 1203, 1210

(10th Cir. 2001) (“[W]here there has been an adjudication on the merits of a

jurisdictional issue and a determination that there is no federal jurisdiction, the

doctrine of [collateral estoppel] precludes a subsequent relitigation of the same

jurisdictional issue between the same parties.” (quotation omitted)).

      Armstrong’s other arguments, including his law-of-the-case argument and

his contention that the district court was without jurisdiction to render the

decision at bar, are without merit. The fact that the BAP has recently determined

that the Utah bankruptcy court lacked jurisdiction to impose criminal contempt

sanctions against Armstrong in a related matter has no relevance to this appeal.

                                           -4-
      Armstrong’s motion for leave to proceed on appeal without prepayment of

costs or fees is DENIED, and Armstrong is directed to make immediate payment

of the balance of his appellate filing fee. The judgment of the district court is

AFFIRMED. The mandate shall issue forthwith.

                                                     Entered for the Court

                                                     Bobby R. Baldock
                                                     Circuit Judge

                                          -5-