James McDaniel Jr. v. John Blust
2012 U.S. App. LEXIS 2555
| 4th Cir. | 2012Background
- Appellants allege various harms arising from acts during EBW Laser, Inc.'s bankruptcy and adversary proceeding.
- Ivey was appointed trustee; IMGT served as counsel to the trustee and litigated the adversary proceeding.
- Allegations include use of allegedly false EBW Laser tax returns against Appellants and coercive conduct to obtain/relate to tax records.
- Plaintiffs claim IMGT sought court orders for McDaniel’s tax returns and obtained them without consent, and that these acts supported claims of conversion, invasion of privacy, fiduciary breach, and conspiracy.
- Defendants removed the case to federal court and moved to dismiss under the Barton doctrine, arguing lack of jurisdiction absent leave of the bankruptcy court.
- Magistrate judge recommended dismissal of IMGT claims and remand of Stanaland claims; district court adopted the recommendation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Barton doctrine bars the claims against IMGT. | McDaniel/Epes argue Barton does not apply. | IMGT argues Barton bars suit without leave of bankruptcy court. | Barton doctrine applies; dismissal proper. |
| Whether Barton applies to alleged false tax returns within the adversary context. | Allegations of intentional misconduct negate Barton. | Actions occurred in pursuit of estate assets; Barton applies. | Barton applies; claim dismissed. |
| Whether the district court properly dismissed the tax-return related claim against IMGT. | Trustee’s counsel misconduct should be actionable. | Proper immunity under Barton. | District court’s Barton-based dismissal affirmed. |
Key Cases Cited
- Barton v. Barbour, 104 U.S. 126 (1881) (trustee leave required for suits against acts in official capacity)
- Muratore v. Darr, 375 F.3d 140 (1st Cir. 2004) (extension of Barton to bankruptcy trustees)
- Beck v. Fort James Corp. (In re Crown Vantage, Inc.), 421 F.3d 963 (9th Cir. 2005) (extension of Barton doctrine to trustees’ attorneys)
- In re Lowenbraun, 453 F.3d 314 (6th Cir. 2006) (trustee immunity and leave requirement context)
- In re Lehal Realty Assocs., 101 F.3d 272 (2d Cir. 1996) (court monitoring trustees; gatekeeping role of bankruptcy court)
- In re Linton, 136 F.3d 544 (7th Cir. 1998) (protecting bankruptcy estate and appointment considerations)
- In re Triple S Rests., Inc., 519 F.3d 575 (6th Cir. 2008) (context of asset recovery supports authority of trustee’s actions)
- JTH Tax, Inc. v. Frashier, 624 F.3d 635 (4th Cir. 2010) (standard for de novo review of jurisdiction dismissals)