Satterfield v. Malloy
484 B.R. 276
| 10th Cir. | 2012Background
- Satterfield sued Malloy, the court-appointed bankruptcy trustee, for alleged misconduct in administering the estate.
- The district court held the Barton doctrine barred the suit without leave of the appointing court.
- Satterfield contends the claims are ultra vires and not barred, or alternatively that §959(a) allows suit.
- Malloy acted as trustee after conversion of Satterfield’s Chapter 11 to Chapter 7 and sought appointment as estate attorney.
- Satterfield’s claims concern actions in 2006–2008 related to administration of the estate, not seizure of third-party property.
- The court retained jurisdiction under 28 U.S.C. §1291 and affirmed the Barton-based dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Barton bar suit against a bankruptcy trustee without leave? | Satterfield argues ultra vires actions are not within Barton. | Malloy argues acts were within trustee’s duties, barred by Barton. | Barton bars the suit absent leave. |
| Do the alleged acts fit the ultra vires exception to Barton? | Satterfield claims actions were outside the trustee’s authority. | Malloy contends acts were within duties of trustee. | Ultra vires exception does not apply; acts relate to trustee duties. |
| Does §959(a) authorize suit without leave? | Satterfield invokes §959(a) to sue while trustee carried on business. | Malloy contends §959(a) applies only to ongoing business, not liquidation. | §959(a) does not apply to liquidation/administration of the estate. |
Key Cases Cited
- Barton v. Barbour, 104 U.S. 126 (1881) (leave of appointing court required to sue a receiver)
- Beck v. Fort James Corp. (In re Crown Vantage), 421 F.3d 963 (9th Cir. 2005) (Barton doctrine extends to bankruptcy trustees)
- Muratore v. Darr, 375 F.3d 140 (1st Cir. 2004) (Barton doctrine applies to trustees; no general tort exception)
- In re Linton, 136 F.3d 544 (7th Cir. 1998) (trustee acts under Barton leave requirement continue after estate closed)
- Triple S Restaurants, Inc. v. Heaverin, 519 F.3d 575 (6th Cir. 2008) (ultra vires exception considered in trustee conduct cases)
- Carter v. Rodgers, 220 F.3d 1249 (11th Cir. 2000) (§959(a) does not apply to administration/liquidation)
- Med. Dev. Int'l v. Cal. Dep’t of Corr. & Rehab., 585 F.3d 1211 (9th Cir. 2009) (distinguishes operating a business from winding up estate)
- Muratore v. Darr, 375 F.3d 140 (1st Cir. 2004) (section 959(a) not applicable to liquidation actions)
- Teton Millwork Sales v. Schlossberg, 311 F. App’x 145 (10th Cir. 2009) (ultra vires concept in bankruptcy context)