William Norrie v. Kelly Mallen
698 F. App'x 432
| 9th Cir. | 2017Background
- Chapter 7 debtor William Robert Norrie appealed pro se from the BAP’s affirmance of the bankruptcy court enforcing a settlement between two creditors and the chapter 7 trustee.
- The trustee had approved and settled claims that the creditors asserted; the bankruptcy court enforced that settlement and dismissed Norrie’s state-court motion to set aside a judgment.
- Bankruptcy court found the claims at issue belonged to the bankruptcy estate, so Norrie lacked standing to pursue them.
- The bankruptcy court awarded sanctions to the creditors, finding Norrie’s motion frivolous; the BAP separately awarded sanctions against Norrie for a frivolous appeal.
- Norrie appealed to the Ninth Circuit, which reviewed standing/person-aggrieved findings for clear error and sanctions for abuse of discretion.
- Ninth Circuit affirmed, denied appellees’ request to dismiss under the fugitive disentitlement doctrine, denied appellees’ separate sanctions motion, and denied Norrie’s Rule 60(d) requests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / person aggrieved to challenge trustee settlement | Norrie argued he could challenge the bankruptcy court’s approval of the trustee’s settlement | Creditors/trustee argued the claims were estate property and only trustee had standing | Court: Norrie lacked standing; claims belonged to estate, trustee is proper representative; affirmed |
| Enforcement of trustee’s settlement | Norrie sought to set aside state-court judgment related to those claims | Creditors sought enforcement of trustee’s settlement and dismissal of Norrie’s motion | Court: Bankruptcy court properly enforced the settlement; dismissal proper |
| Sanctions by bankruptcy court | Norrie contended his motion was not frivolous | Creditors argued motion was frivolous and sanctions appropriate | Court: Record supported frivolousness; sanctions not an abuse of discretion |
| Sanctions by BAP under Rule 8020 | Norrie argued appeal was not frivolous | Creditors argued appeal was frivolous and warranted sanctions | Court: BAP did not abuse discretion; appeal was frivolous; sanctions affirmed |
Key Cases Cited
- Duckor Spradling & Metzger v. Baum Trust (In re P.R.T.C., Inc.), 177 F.3d 774 (9th Cir. 1999) (standard for reviewing "person aggrieved" findings)
- Moneymaker v. CoBen (In re Eisen), 31 F.3d 1447 (9th Cir. 1994) (trustee is representative of the estate with standing to administer estate causes of action)
- Fondiller v. Robertson (In re Fondiller), 707 F.2d 441 (9th Cir. 1983) (debtor must show direct pecuniary injury to be a person aggrieved)
- Brady v. Andrew (In re Commercial W. Fin. Corp.), 761 F.2d 1329 (9th Cir. 1985) (notice and objection are prerequisites to person-aggrieved status)
- Price v. Lehtinen (In re Lehtinen), 564 F.3d 1052 (9th Cir. 2009) (standard of review: abuse of discretion for bankruptcy court sanctions)
- Padgett v. Wright, 587 F.3d 983 (9th Cir. 2009) (appellate waiver: issues not raised in opening brief are ordinarily forfeited)
- Mastro v. Rigby, 764 F.3d 1090 (9th Cir. 2014) (discussion of fugitive disentitlement doctrine)