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Blumeyer v. Sosne: BANKRUPTCY - no error denying reconsideration; appeal untimely; no standing; no abuse denying dismissal

United States Bankruptcy Appellate Panel
FOR THE EIGHTH CIRCUIT
______
No. 07-6065
______
In re: *
*
Hope P. Blumeyer, *
*
Debtor. *
*
Hope P. Blumeyer, * Appeal from the United States
* Bankruptcy Court for the Eastern
Appellant, * District of Missouri
*
v. *
*
David A. Sosne, Trustee, *
*
Appellee. *
*
______
Submitted: March 7, 2008
Filed: March 13, 2008
______
Before KRESSEL, Chief Judge, FEDERMAN and MAHONEY, Bankruptcy Judges.
______
KRESSEL, Chief Judge.
1The Honorable David P. McDonald, United States Bankruptcy Judge for the
Eastern District of Missouri.
2 Hope has also filed for leave to expand the record on appeal. We deny this
motion as we find there are no grounds which justify expanding the current record,
especially to include events that occurred after the bankruptcy court’s decision.
We note, however, that nothing in the expanded record would change our decision.
2
Hope Blumeyer appeals the decision of the bankruptcy court1 which denied her
motion to reconsider the denial of her motion to dismiss her case, set aside the
dismissal of Arthur Blumeyer’s bankruptcy case, set aside the denial of the statutory
trustee’s motion to dismiss Arthur’s case, and set aside the order approving the
trustee’s compromise and settlement and sale of assets in Arthur’s case.2 We affirm.
Background
In February of 1994, Arthur Blumeyer was convicted of mail fraud, wire fraud,
conspiracy, and money laundering in connection with various companies involved in
the insurance business, including Bel-Aire Insurance Company. Bel-Aire and other
related companies are currently in receivership and Arthur is incarcerated in a federal
penitentiary.
On March 23, 1998, Arthur filed a Chapter 11 bankruptcy petition in the
Eastern District of Missouri. His wife, Hope Blumeyer filed her own Chapter 11
petition in Florida on June 8, 1998. Her case was transferred to the Eastern District
of Missouri. Both cases were converted to Chapter 7 cases and David Sosne was
appointed trustee in both cases.
During the administration of the cases, the trustee agreed to sell Arthur’s and
Hope’s interests in Bel-Aire and its affiliated entities, and any claims they had against
the Missouri Department of Insurance to the department of insurance. On July 6,
1999, the trustee sought approval of this agreement. The statutory trustee, who was
3
appointed by the Circuit Court of Cole County, then brought a motion which claimed
that the appointment of the statutory trustee divested Arthur from control of his assets
and the ability to file a bankruptcy case, arguing that the bankruptcy trustee could not
administer the estate. The bankruptcy court treated the statutory trustee’s motion as
one to dismiss the bankruptcy case. On August 4, 2003, the bankruptcy court denied
the motion. Neither Arthur nor Hope appealed this order.
On June 16, 2004, the bankruptcy court granted the trustee’s motion to approve
a compromise and settlement with the department of insurance and a sale of estate
assets. On June 28, 2004, Arthur brought a motion to dismiss his bankruptcy case or
to stay the order which authorized the sale of estate assets. The bankruptcy court
denied this motion. Arthur appealed to the district court. His appeal was dismissed
for failure to pay the filing fee.
On September 12, 2006, the bankruptcy court dismissed Arthur’s case for
failure to pay the entire filing fee and for failure to file a complete set of schedules and
statements. The bankruptcy court retained jurisdiction to permit the trustee to
distribute the estate’s assets.
On August 23, 2007, Hope filed a motion in her bankruptcy case to (1) set aside
the order of dismissal of Arthur’s case; (2) set aside the order in Arthur’s case which
denied the statutory trustee’s motion to dismiss; (3) set aside the order in Arthur’s case
which approved the compromise and settlement and authorized the sale of estate
assets; and (4) dismiss her bankruptcy case. The bankruptcy court denied her motion
on September 14, 2007. Hope filed a motion to reconsider on
3The trustee has argued that Hope’s appeal is untimely because it was not
filed within ten days of the entry of the order denying Hope’s motion to reconsider,
as required by Fed. R. Bankr. P. 8002(a). However, we conclude that the motion
was timely because Monday, October 8, 2007, the tenth day after the entry of the
order, was a legal holiday. Therefore, it was excluded from the calculation of the
ten day period under Fed. R. Bankr. P. 9006(a). Hope had until Tuesday, October
9, 2007 to file her appeal.
4
September 24, 2007, which the bankruptcy court denied on September 27, 2007. She
appealed on October 9, 2007.3
Standard of Review
We review the bankruptcy court’s factual findings for clear error and its
conclusions of law de novo. Debold v. Case, 452 F.3d 756, 761 (8th Cir. 2006); In
Re Vondall, 364 B.R. 668, 670 (B.A.P. 8th Cir. 2007). We review issues committed
to the bankruptcy court's discretion for an abuse of that discretion. In re Neal, 461
F.3d 1048, 1055 (8th Cir. 2006). The bankruptcy court abuses its discretion when it
fails to apply the proper legal standard or bases its order on findings of fact that are
clearly erroneous. Id. A decision to grant a motion to voluntarily dismiss a
bankruptcy case is reviewed for abuse of discretion. In re Turpen, 244 B.R. 431, 433
(8th Cir. B.A.P. 2000).
DISCUSSION
The Orders Entered in Arthur’s Case.
With the exception of the denial of Hope’s motion to dismiss her case, the
orders at issue in this appeal are all orders entered in Arthur’s case . We affirm the
5
bankruptcy court’s denial of Hope’s motion to reconsider the orders entered in
Arthur’s case. There are many reasons why we reject Hope’s appeal from these
orders.
We are unclear whether Hope is attempting to appeal the old orders directly, the
order denying her motion for relief from those orders, or the order denying her motion
to “reconsider” the later order. First, the period for timely filing an appeal is 10 days
from the date of the entry of the judgment, order, or decree appealed from. See Fed.
R. Bankr. P. 8002(a). As to all of the orders in Arthur’s case, Hope’s appeals are
untimely. The denial of the dismissal of Arthur’s case, and the approval of the
compromise and settlement and sale of assets, and the dismissal of Arthur’s case
occurred in 2003, 2004, and 2006 respectively. The orders have long since become
final, and Hope may not appeal them years afterwards. Nor has she shown any
grounds for revisiting these orders under Rule 60, the only possible rule that could
apply.
Second, Hope has not demonstrated that she is an aggrieved party who has the
right to appeal the orders entered in Arthur’s case. The right to appeal is limited to
parties who are aggrieved in some appreciable manner by the judgment. A person is
aggrieved if the judgment bears directly and injuriously on his or her interests.
Because she has not demonstrated how the orders entered in Arthur’s case have
adversely affected her interests, Hope does not have the right to appeal these orders.
Third, Hope lacks standing to appeal the orders in Arthur’s case. Federal
jurisdiction is limited by Article III, § 2, of the U.S. Constitution to actual cases and
controversies. Therefore, the plaintiff must have standing to sue in order for a federal
court to have the power to hear and decide the case. See Steger v. Franco, Inc., 228
F.3d 889, 892 (8th Cir. 2000). To show Article III standing, a plaintiff has the burden
of proving: (1) that she suffered an injury-in-fact; (2) a causal relationship between
the injury and the challenged conduct; and (3) that the injury likely will be redressed
6
by a favorable decision. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
(1992). An injury-in-fact is a harm that is “concrete and particularized” and “actual
or imminent, not conjectural or hypothetical.” Id. Hope has not demonstrated that she
has suffered an injury-in-fact with respect to the bankruptcy court’s decisions entered
in Arthur’s case. Thus, she does not have standing to seek relief from those orders
and may not appeal those orders.
Fourth, Hope filed the motion to set aside the orders in Arthur’s case in the her
case when she should have filed the motion in his. Fed. R. Bankr. P. 9004(b) requires
motions to include the correct title of the case and bankruptcy docket number.
Because Hope’s motion contained only the title and docket number for her case, it was
not filed in Arthur’s case. Therefore, we do not have a proper record the proceedings
in Arthur’s case. Nor are we certain that the parties in interest in Arthur’s case
received notice of Hope’s motion or this appeal.
Finally, Hope has failed to show that the bankruptcy court erred with respect
to the orders entered in Arthur’s case. The bankruptcy court did not abuse its
discretion in dismissing Arthur’s case for failure to pay filing fees and for failure to
file complete schedules. It did not err in ruling that the appointment of the statutory
trustee did not divest the debtor of its assets and ability to file bankruptcy. It did not
abuse its discretion when it approved the compromise and settlement and sale of
assets.
For the forgoing reasons, we affirm the bankruptcy court’s denial of Hope’s
motion to reconsider the bankruptcy court’s denial of her motion to set aside the
dismissal of Arthur’s case, the compromise and settlement and order of sale in
Arthur’s case, and the denial of the dismissal of Arthur’s case.
7
The Bankruptcy Court Did Not Abuse Its Discretion by Denying the Debtor’s
Motion to Dismiss Her Bankruptcy Case.
To the extent that Hope’s appeal is from the bankruptcy court’s denial of her
motion to dismiss her case, we consider the bankruptcy court’s order final. See Stuart
v. Koch (In re Koch), 109 F.3d 1285, 1288 (8th Cir. 1997), Ladikav. Luker (In re
Ladika), 1998 WL 665579 (8th Cir. B.A.P. 1998). A debtor has no absolute right to
dismissal of a Chapter 7 case. In re Turpen, 244 B.R. 431, 434 (8th Cir. B.A.P. 2000).
In order to succeed in a motion to dismiss, the debtor must make a showing of cause
and demonstrate why dismissal is justified. Id. Even if the debtor can show cause,
the court should deny the motion if it prejudices creditors. Id. Courts generally
consider the following factors when ruling on a debtor's motion to dismiss: (1)
whether all of the creditors have consented; (2) whether the debtor is acting in good
faith; (3) whether dismissal would result in an prejudicial delay in payment; (4)
whether dismissal would result in a reordering of priorities; (5) whether there is
another proceeding through which the payment of claims can be handled; and (6)
whether an objection to discharge, an objection to exemptions, or a preference claim
is pending. Id.
Given that Hope has waited until the proverbial eleventh hour to request
dismissal of her case that has spanned ten years, we conclude that the bankruptcy
court did not abuse its discretion in denying the debtor’s motion to dismiss her case.
Despite Hope’s best efforts to hinder the trustee’s collection and distribution of estate
assets, the trustee has finally succeeded in gaining approval of his amended final
report and proposed distribution. He is now poised to make a distribution to Hope’s
creditors who have waited a decade to receive payments on their debts. At this
juncture, it would not be in the best interests of creditors to dismiss Hope’s case. We
conclude that the bankruptcy court did not abuse its discretion by denying Hope’s
motion to dismiss her bankruptcy case.
8
CONCLUSION
The orders of the bankruptcy court are affirmed.
 

 
 
 

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