463 B.R. 883
8th Cir. BAP2012Background
- Athens/Alpha Gas filed a chapter 11 petition on Oct 28, 2002; Cawley was listed as a secured creditor asserting a $26,000 claim.
- Jan 14, 2005 omnibus objection to claims including Cawley’s was filed; Cawley did not respond or appear at the Feb 17, 2005 hearing.
- Mar 15, 2005, bankruptcy court disallowed Cawley’s secured claim in full and allowed it as an unsecured claim subject to administration.
- May 5, 2005, plan confirmation transferred assets to NEWCO (Missouri Breaks) free of claims; plan not appealed by Cawley or others.
- Before plan confirmation, Cawley sought an administrative expense of $41,779.26; he later withdrew that application on July 18, 2005.
- Jun 20, 2006, Cawley moved to determine his claims to be paid; state court quiet title action was pursued in Aug 2006; North Dakota courts held Cawley’s claims barred by res judicata and deed invalid in 2008; North Dakota Supreme Court affirmed in 2010.
- May 11, 2007, bankruptcy case was closed after a final decree; Jun 14, 2011, Cawley moved to reopen and to determine his claims; Aug 11, 2011, bankruptcy court denied the motion based on res judicata and Rooker-Feldman.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy court had subject-matter jurisdiction to hear Cawley’s motion to determine claims. | Cawley | Appellees argue res judicata and Rooker-Feldman bar relief | Yes; court lacked jurisdiction under Rooker-Feldman. |
| Whether Cawley is owed $26,000 as an unsecured claim despite prior plan disallowance. | Cawley | Appellees contend claim barred by plan and res judicata | No; barred by res judicata and prior orders. |
| Whether Cawley owned a five percent working interest in the well and thus owed an administrative expense. | Cawley | Defendants assert interest not preserved; void deed | No; ownership interest barred by res judicata and state court rulings. |
Key Cases Cited
- Bechtold v. City of Rosemount, 104 F.3d 1062 (8th Cir. 1997) (Rooker-Feldman principle applied to barred federal relief)
- Snider v. City of Excelsior Springs, 154 F.3d 809 (8th Cir. 1998) (federal relief precluded where state-court decision would be reversed)
- In re Hoffinger Industries, Inc., 329 F.3d 948 (8th Cir. 2003) (Rooker-Feldman and jurisdictional limits in bankruptcy context)
- In re Goetzman, 91 F.3d 1173 (8th Cir. 1996) (inextricably intertwined concepts limit federal review of state court decisions)
- Apex Oil Co. v. Sparks, 406 F.3d 538 (8th Cir. 2005) (concurrent state-federal jurisdiction over bankruptcy issues)