July 30, 2015

Tenth Circuit: CEA Allows Nationwide Service of Process for Receivers Pursuing Receivership Property

The Tenth Circuit Court of Appeals issued its opinion in Klein v. Cornelius on Wednesday, May 27, 2015.

R. Wayne Klein was appointed receiver of Winsome Investment Trust, a business entity whose founder, Robert J. Andres, caused it to illegally distribute funds as part of a Ponzi scheme. William Cornelius and his Houston law firm, Cornelius & Salhab, received some of the illegally obtained funds as payment for a New Hampshire criminal defense representation of one of Andres’ friends. Klein, as receiver, brought suit against Cornelius in Utah federal court to void the fraudulent transfer to Cornelius for approximately $90,000 in legal fees. The Utah court granted summary judgment to Klein, and Cornelius appealed, raising several points of error.

The Tenth Circuit first addressed Cornelius’ three jurisdictional challenges. Cornelius first argued the Commodity Exchange Act (CEA) does not authorize a receiver to bring state fraudulent transfer claims in federal court against a third-party recipient of Ponzi scheme funds. The Tenth Circuit found that the CEA authorizes the Commodities Futures Trading Commission (CFTC) to bring civil actions in federal court to enjoin violations of the CEA, and does not prohibit a receiver from pursuing state law claims in federal court. The Tenth Circuit concluded the district court had subject matter jurisdiction to resolve Klein’s Uniform Fraudulent Transfer Act (UFTA) claims on Winsome’s behalf.

Cornelius next challenged standing, arguing Klein lacked standing to bring a UFTA claim because Winsome itself could not bring such a claim. Cornelius reasoned that because Winsome was unincorporated and under Andres’ control, it was an alter ego for Andres and therefore had no authority to sue in its own right. Although he conceded Klein could sue as a receiver for Andres, the Tenth Circuit disagreed with Cornelius’ contention that Winsome could not sue in its own right. The Tenth Circuit found that as a business entity abused as part of a Ponzi scheme, Winsome became a defrauded creditor. The Tenth Circuit found that Winsome was its own entity under Utah law and therefore Klein had standing to pursue the UFTA claim.

Cornelius also argued the district court lacked personal jurisdiction because he did not have sufficient contacts with Utah and because he was not properly served with a complaint. The Tenth Circuit first found the CEA allowed nationwide service of process for receivers pursuing receivership property. The Tenth Circuit next looked at Cornelius’ argument that he had minimum contacts with Utah, and found that in federal question cases where nationwide service of process invokes jurisdiction, the defendant must establish that the chosen forum burdens the defendant with “constitutionally significant inconvenience.” Because Cornelius made no jurisdiction arguments other than the minimum contact argument, the Tenth Circuit found no error in the district court’s determination that it had jurisdiction. Cornelius also argued that in personam jurisdiction was inappropriate and only in rem jurisdiction would apply, but the Tenth Circuit disagreed, finding personal jurisdiction applied under the particular statutory scheme.

Next, Cornelius argued three points of error regarding the district court’s application of UFTA: (1) Texas law applies, (2) the transfer was not fraudulent, and (3) regardless, Klein’s claim is barred by the statute of limitations. The Tenth Circuit addressed each argument in turn. Because the relevant provisions of Texas law use the same language as Utah, the Tenth Circuit found Cornelius’ first argument of no practical significance. Next, the Tenth Circuit found that because Ponzi schemes are inherently insolvent, there is a presumption that transfers from such entities involve an intent to defraud. Cornelius argued that neither he nor the criminal defendant he represented knew of the Ponzi scheme, but the Tenth Circuit noted that nothing in the UFTA requires a transferee to have knowledge of the fraud. The Tenth Circuit also declined to adopt Cornelius’ assertion that he provided “reasonably equivalent value” for his payment, noting that his legal services conferred no benefit on Winsome and the payments to Cornelius only served to diminish its net worth.

Finally, the Tenth Circuit addressed the statute of limitations argument. Claims alleging actual intent to defraud under the UFTA must be brought within four years of when the transfer was made or one year after the transfer could reasonably have been discovered. Klein brought suit against Cornelius in December 2011. The payments to Cornelius for his legal services were made between September 2006 and July 2007, and Cornelius argued the suit was untimely because it was brought well after the four year statute of limitations had expired. However, Klein was appointed as receiver in January 2011, and he could not have reasonably discovered the fraud until his appointment. The Tenth Circuit found the claim was timely since it was brought within one year of Klein’s appointment as receiver.

The district court’s grant of summary judgment to Klein was affirmed.

Tenth Circuit: “Reverse Preemption” Deprived District Court and Tenth Circuit of Subject Matter Jurisdiction

The Tenth Circuit Court of Appeals issued its opinion in Western Insurance Co. v. A & H Insurance Inc. on Friday, April 24, 2015.

Western Insurance is insolvent and being liquidated in Utah state court. The liquidator brought suit against several of Western’s “affiliates” to recover funds Western had transferred to them. The defendants removed the ancillary proceeding to federal court under diversity jurisdiction, and the liquidator sought a remand, which the district court granted. Defendants appealed.

Because insolvent insurers are exempt from federal bankruptcy protection, state law governs insurer insolvency proceedings. After the defendants removed the case to federal court, liquidators argued the McCarran-Ferguson Act barred removal, as it is essentially a “reverse preemption” doctrine. The district court remanded “for the reasons stated on the record.”

The Tenth Circuit first evaluated its jurisdiction and found it could only proceed to entertain the appeal if the remand order was not based on lack of subject matter jurisdiction. In its order, the district court made several contradictory statements regarding its rationale for remand, leaving it unclear whether it relied on the McCarran-Ferguson Act’s “reverse preemption” in its remand order. However, the Tenth Circuit found that the bulk of the district court’s decision focused on the McCarran-Ferguson Act. Because the district court’s remand was based to a fair degree on lack of subject matter jurisdiction, the Tenth Circuit found it lacked jurisdiction to hear the appeal.

The appeal was dismissed.

Tenth Circuit: FDIC Exclusively Holds Claims Against Failed Bank’s Holding Company

The Tenth Circuit Court of Appeals issued its opinion in Barnes v. Harris on Tuesday, April 21, 2015.

The Barnes Banking Company (“bank”) began engaging in risky lending practices in the 2000s, leading to its ultimate demise in January 2010. The FDIC was appointed as receiver. In January 2012, J. Canute Barnes filed a derivative shareholder complaint in Utah state court against Barnes Bancorporation (“holding company”), parent of the bank, alleging breach of fiduciary duty. Attached to the Utah complaint was a demand letter alleging the bank was the holding company’s sole asset. The initial complaint stated the defendants were sued in their capacity as officers and directors of the holding company and not the bank. The FDIC filed a motion to intervene in state court, arguing it possessed sole statutory authority under FIRREA to assert the derivative claims at issue. The FDIC then removed the case to federal court.

The district court granted a motion to amend the complaint to include two additional shareholders, W. King Barnes and Robert Jones. Plaintiffs filed a motion to remand to state court, arguing the FDIC was not a party to the case because it had not filed a pleading, which motion was denied. Plaintiffs then moved to dismiss the FDIC for failure to state a claim. The FDIC filed its own motion to dismiss, and defendants moved for judgment on the pleadings. The district court denied plaintiffs’ motion to dismiss, granted in part the motions filed by defendants and the FDIC, and dismissed most of plaintiffs’ claims with prejudice while allowing some to be re-pled. Plaintiffs’ second amended complaint attempted to re-describe the bank as the holding company’s “primary asset,” but the focus of the complaint was still the harm suffered by the bank’s failure. The second amended complaint also alleged the bank received a $9 million tax return, which should have been in part distributed to the holding company, and that the holding company misused $265,000 by paying insurance premiums and retaining counsel. Both FDIC and defendants moved to dismiss the second complaint, which the district court granted. Plaintiffs appealed.

The Tenth Circuit first considered the district court’s jurisdiction. Through FIRREA, the FDIC is deemed a party, and the case is deemed to arise under federal law. The district court therefore had jurisdiction to hear the complaints. Plaintiffs argue the FDIC lacked jurisdiction because it never filed a pleading. The Tenth Circuit found the case on which plaintiffs relied inapposite to that assertion. Because FDIC was permitted to intervene in state court, it became a party to the proceeding, and jurisdiction was exclusive in the district court under FIRREA.

The Tenth Circuit proceeded to examine the merits. Once the FDIC is appointed as a receiver, FIRREA grants it all rights, powers, and privileges of the bank with respect to the assets of the bank, including those of the holding company. The question of whether FIRREA applies to cases in which a breach of fiduciary duty suit is brought against a bank holding company’s officers after the bank has gone into receivership was one of first impression in the Tenth Circuit. The Tenth Circuit examined similar cases from other jurisdictions, as well as Utah corporate law, and determined that FIRREA applies. The majority of plaintiffs’ claims were derivative, reaching the holding company only because of the harms of the bank. Those claims belong to the FDIC.

The Tenth Circuit found similarly that the $9 million tax return belonged exclusively to the bank and therefore the FDIC was the only party entitled to the return. The tax refund due from a joint return generally belongs to the company responsible for the losses that formed the basis for the return, and due to the receivership, the entire refund belongs to the FDIC.

Finally, the Tenth Circuit addressed the claims that the holding company misused $265,000 by using the funds to pay insurance premiums and legal fees. The Tenth Circuit, like the district court, found these claims inadequately pleaded. Plaintiffs were in a privileged position and could have examined the holding company’s records to find support for their claims. Plaintiffs further failed to explain how the expenditures constituted an actionable wrong. The Tenth Circuit upheld the district court’s dismissal of this claim.

Expressing sympathy for the plaintiffs’ position, the Tenth Circuit recognized the broad scope of the FDIC’s authority in dealing with the aftermath of a bank failure, and admonished bank holding company shareholders to take action prior to the bank’s collapse to stave off the collapse and protect their assets. The Tenth Circuit affirmed the district court.

Tenth Circuit: Bare Legal Title Is Not An Interest that Can Be Avoided in Bankruptcy

The Tenth Circuit Court of Appeals issued its opinion in In re Nguyen: Davis v. Pham on Monday, April 13, 2015.

In September 2007, Hoa Thi Pham purchased property in joint tenancy with her now common law husband, Noel Esplund, so that Pham had a two-thirds interest in the property and Esplund had a one-third interest. Pham then conveyed her interest to the couple’s children, Tung Nguyen and Lisa Dang (now Lisa Stirrat), as joint tenants with rights of survivorship. In May 2008, Nguyen transferred his interest to Esplund and Dang via quit claim deed for no compensation. In May 2009, Nguyen and his wife filed for Chapter 7 bankruptcy protection. The bankruptcy trustee, Carl Davis, filed a complaint in Bankruptcy Court, seeking to avoid the transfer from Nguyen under 11 U.S.C. § 548(a)(1)(B), alleging that Nguyen transferred his interest in the property less than two years before filing from bankruptcy, was insolvent at the time of the transfer, and received inadequate consideration for the transfer.

The Bankruptcy Court concluded Nguyen possessed only bare legal title to the property and his mother possessed equitable ownership of his one-third share, finding the transfer created a resulting trust under a Kansas statute that allows a trust to form when a payor provides consideration for a piece of property and then enters into an agreement with another “without fraudulent intent” to hold the property in trust. The Bankruptcy Court based its decision on the circumstances of the agreement, to which Pham and Nguyen testified at the evidentiary hearing, and concluded that bare legal title, when transferred for no consideration, is not an “interest in property” that may be avoided. The trustee appealed to the BAP, which affirmed the Bankruptcy Court’s decision.

The Tenth Circuit first noted that the parties do not dispute the correctness of the Bankruptcy Court’s determination that if Nguyen possessed solely “bare legal title” to the property, § 548(a)(1)(B) could not be used to avoid the transfer. The Tenth Circuit further found no dispute as to the Bankruptcy Court’s factual finding regarding the intent of the parties in the transfer. Therefore, the issue on appeal was whether such transfers are contrary to Kansas law.

Davis argued that a resulting trust is incompatible with a joint tenancy under Kansas law and Tenth Circuit precedent. The Tenth Circuit first found that the precedent on which Davis relied had been impliedly overruled by the Kansas Supreme Court. Analysis of the Kansas case law revealed that Kansas law does allow resulting trusts in joint tenancy situations. Because Davis did not challenge the Bankruptcy Court’s factual finding that Pham and Nguyen intended to create a resulting trust, or its conclusion that bare legal title is not an interest that can be avoided under § 548(a)(1)(B), the Tenth Circuit affirmed the findings of the Bankruptcy Court.

Colorado Court of Appeals: Partial Subordination Approach to Lien Priority Best Reflects Colorado Law

The Colorado Court of Appeals issued its opinion in Tomar Development, Inc. v. Friend on Thursday, June 4, 2015.

Lien—Subordination Agreement—Partial Subordination Approach.

The Friend family sold its ranch to Friend Ranch Investors Group (FRIG) to develop it into a resort-style golf course community. In 2010, FRIG conveyed the property to Mulligan, LLC, and at that time, the relevant order of priority was (1) Colorado Capital Bank’s (CCB) senior lien; (2) Tomar Development (Tomar); (3) the Damyanoviches; (4) the Friends; and (5) CCB’s junior lien. Bent Tree, Mulligan, and CCB then entered into a subordination agreement whereby CCB’s senior lien became subordinate to CCB’s junior lien. Neither Tomar, the Damyanoviches, nor the Friends was involved in or an intended beneficiary of the subordination agreement. CCB’s senior lien was never released. Bent Tree then foreclosed on CCB’s senior lien and, in November 2010, Bent Tree bought the property at a public trustee’s foreclosure sale for approximately $11,800. Tomar, the Friends, and the Damyanoviches filed claims, each of which sought declaratory judgments as to the priority of their interests, which were dismissed by the trial court under CRCP 12(b)(5).

On appeal, Tomar, the Friends, and the Damyanoviches argued that the trial court erred in applying the partial subordination approach to the subordination of liens. The partial subordination approach applies when the most senior lienholder (A) agrees to subordinate his interest to the most junior lienholder (C) without consulting the intermediary lienholders (B). Under this approach, when A subordinates to C, C becomes the most senior lienholder, but only to the extent of A’s original lien. Under this partial subordination approach, B is not affected by the agreement between A and C, to which it was not privy. Colorado adopts the partial subordination approach, and it was properly applied in this case. Accordingly, the trial court did not err in dismissing Tomar’s, the Damyanoviches’, and the Friends’ claims seeking a declaratory judgment that each of their interests was senior to all other interests.

Summary and full case available here, courtesy of The Colorado Lawyer.

Tenth Circuit: Automatic Bankruptcy Stay Deprives Tenth Circuit of Appellate Jurisdiction

The Tenth Circuit Court of Appeals issued its opinion in Eastom v. City of Tulsa on Monday, April 20, 2015.

Dustin Eastom filed § 1983 claims for malicious prosecution against the City of Tulsa, a Tulsa police officer (Mr. Henderson), and an ATF agent (Mr. McFaddon). Mr. Eastom also filed a negligence claim against the city under Oklahoma’s Governmental Tort Claims Act. After Mr. Eastom filed suit, Mr. McFaddon filed for bankruptcy, and Mr. Eastom’s claim against him was automatically stayed by 11 U.S.C. § 362. The district court entered summary judgment for the City and Mr. Henderson, dismissing Mr. Eastom’s claims with prejudice. It declined to exercise jurisdiction over Mr. Eastom’s state law claims against the City and also dismissed them with prejudice.

Mr. Eastom appealed the summary judgment order, and the Tenth Circuit issued an order to show cause why the appeal should not be dismissed because there was no final judgment as to all parties. Mr. Eastom voluntarily dismissed his district court claim against Mr. McFaddon without prejudice and responded to the show cause order that his appeal was now final because he was time-barred from refiling the claim. However, under Oklahoma’s savings statute, Mr. Eastom had an additional year to re-file his voluntarily withdrawn claims against Mr. McFaddon despite the time bar.

Mr. Eastom waited a year and again appealed to the Tenth Circuit. However, the § 362 stay was still in place, and the Tenth Circuit again ordered Mr. Eastom to show cause why his appeal should not be dismissed for lack of jurisdiction. Mr. Eastom contended the district court’s summary judgment was final because the time for refiling under the savings statute had elapsed.

The Tenth Circuit examined the interplay between the applicable statute of limitations, the savings statute, and the bankruptcy stay, and found that Mr. Eastom’s claims were still not final because the bankruptcy stay was still in place, tolling the statute of limitations. Because the automatic stay prevented Mr. Eastom from exercising legal remedies against the debtor, Oklahoma law prevents the running of the savings statute while the stay is in place.

The Tenth Circuit dismissed the appeal for lack of jurisdiction.

Application Period Open for Bankruptcy Judge Vacancy in District of Colorado

The United States Court of Appeals for the Tenth Circuit seeks applicants for a bankruptcy judgeship in the District of Colorado. The position will be created effective January 4, 2016, and will be in Denver, Colorado.

Eligible applicants must be a member in good standing of the bar of the highest court of any state, DC, or Puerto Rico, and must be in good standing in every other bar in which he or she is admitted. Applicants must be committed to equal justice under the law, have good character, possess and have demonstrated outstanding legal ability, exhibit judicial temperament, and be of sound mental and physical health. Applicants may not be related by blood or marriage to any other judge of the Tenth Circuit or District of Colorado or any member of the Judicial Council of the Tenth Circuit. Finally, applicants must have been admitted to practice law for at least five years.

Application forms are available from the Tenth Circuit website, and must be received no later than May 22, 2015. For more information about the vacancy, or to obtain an application form, click here.

Frederick Skillern: Real Estate Case Law — Titles and Title Insurance (2)

Editor’s note: This is Part 17 of a series of posts in which Denver-area real estate attorney Frederick Skillern provides summaries of case law pertinent to real estate practitioners (click here for previous posts). These updates originally appeared as materials for the 32nd Annual Real Estate Symposium in July 2014.

frederick-b-skillernBy Frederick B. Skillern

Egelhoff v. Taylor
Colorado Court of Appeals, August 15, 2013
2013 COA 137,
312 P.3d 270

Spurious lien statute; phony lien against judge.

Lest anyone be confused about why the legislature passed the spurious lien statute in 1998, we give you the case of Denver District Judge Egelhoff. In 2008, the judge sentenced Taylor to prison on a felony conviction. After he was sentenced, Taylor began mailing the judge various documents, claiming that Judge Egelhoff was indebted to him. The judge understandably did not respond. Taylor filed suit, claiming that the judge’s failure to respond created liability to Taylor under a terrific doctrine called the “commercial affidavit process.” Robin Hood could not have done better.

Taylor contends that the “commercial affidavit process” permits an individual to send an affidavit to a purported debtor, claiming the recipient owes the sender a debt, and if the recipient does not specifically rebut the alleged debt, he is deemed to have agreed to the debt and its collection by any means. At our social gathering tonight, perhaps someone can advise us from whence this legal doctrine derives. According to Taylor, a recipient’s silence results in a “self-executing contract,” binding the recipient to pay the amount of the alleged debt. Thus, Taylor argues that, because the judge did not respond to his affidavit, his honor “agreed” that the five hundred million dollar debt was valid.

The panel of the court of appeals, seemingly lacking any sense of humor, goes on for several pages as to why this procedure does not form a contract between judge and convict. An opportunity was missed. It is interesting that this case was selected for publication, when many other real estate cases of considerable substance are passed over.

Ute Mesa Lot 1, LLC v. First-Citizens Bank & Trust Co. (In re Ute Mesa Lot 1, LLC)
United States District Court, District of Colorado, November 25, 2013
No. 12-1134

Bankruptcy; lis pendens; preferential transfer.

Ute Mesa Lot 1, LLC (Ute Mesa) borrowed $12 million from United Western Bank to finance the construction of a home in Aspen. The deed of trust incorrectly named the property’s owner, so the deed of trust was ineffective in giving the Bank a lien on the property. Later, the Bank filed suit to reform the deed of trust and give it a first priority lien on the property. The Bank then recorded a notice of lis pendens with the county real property records. Two months later, Ute Mesa filed for bankruptcy and sought to avoid the lis pendens as a preferential transfer. The bankruptcy court and district court dismissed Ute Mesa’s claim. Ute Mesa appealed, arguing that the lis pendens would prevent a bona fide purchaser from acquiring an interest in the property superior to the Bank’s. Therefore, it was a “transfer of an interest in property” and an avoidable preferential transfer.

The Tenth Circuit holds that a lis pendens is merely a notice and does not constitute a lien, despite the fact that under Colorado law, a lis pendens renders title unmarketable. The lis pendens is not a transfer, so it was not subject to the bankruptcy provision allowing a debtor-in-possession to avoid a transfer of an interest in property that occurs within ninety days before the filing of the bankruptcy petition. The judgment is affirmed.

Frederick B. Skillern, Esq., is a director and shareholder with Montgomery Little & Soran, P.C., practicing in real estate and related litigation and appeals. He serves as an expert witness in cases dealing with real estate, professional responsibility and attorney fees, and acts as a mediator and arbitrator in real estate cases. Before joining Montgomery Little in 2003, Fred was in private practice in Denver for 6 years with Carpenter & Klatskin and for 10 years with Isaacson Rosenbaum. He served as a district judge for Colorado’s Eighteenth Judicial District from 2000 through 2002. Fred is a graduate of Dartmouth College, and received his law degree at the University of Colorado in 1976, in another day and time in which the legal job market was simply awful.

Hon. Thomas B. McNamara Appointed to Bankruptcy Bench for U.S. District Court

On Monday, March 23, 2015, the United States Court of Appeals for the Tenth Circuit appointed Thomas B. McNamara to the bankruptcy bench in the U.S. District Court for the District of Colorado. McNamara was appointed to replace Hon. A. Bruce Campbell, who retired.

Prior to his appointment, McNamara was a partner at Davis Graham & Stubbs LLP, where he litigated international cases and advised clients on regulatory matters and compliance with foreign law. He received his law degree from Yale Law School and his undergraduate degree, summa cum laude, from the University of Minnesota.

Judge McNamara will take over all of Judge Campbell’s active cases. For more information about the appointment, click here.

 

Tenth Circuit: Form 1040s Filed After IRS Tax Assessments Not “Returns” for Bankruptcy Dischargeability Purposes

The Tenth Circuit Court of Appeals issued its opinion in In re Mallo: Mallo v. Internal Revenue Service on Monday, December 29, 2014.

In these consolidated appeals, the debtors did not file tax returns timely and the IRS issued statutory notices of deficiency. The debtors in both cases eventually filed tax returns for the years at issue, changing their tax liabilities. The debtors in both cases later were subject to bankruptcy court orders discharging their debts but excluding their tax liabilities. They filed adversary proceedings against the IRS, seeking determinations that their tax debts had been discharged, and the IRS answered, denying that the debts had been discharged. The parties filed cross-motions for summary judgment on the legal question of whether the debtors’ tax debts were excepted from discharge under 11 U.S.C. § 523(a)(1)(B). In the Mallo case, the bankruptcy court granted the IRS’s motion for summary judgment based on the court’s conclusion that the Mallos had not filed a return and therefore their debt was not dischargeable. In the Martin case, the bankruptcy court reached the opposite conclusion. Both cases were appealed to the U.S. District Court for the District of Colorado, where they were consolidated. The district court concluded the late-filed returns were not “returns” for purposes of § 523(a)(1)(B) because they served no tax purpose. The debtors then appealed, and the appeals were consolidated.

The Tenth Circuit found the plain language of § 523(a) unambiguous, and found that the late-filed returns were not returns for purposes of § 523(a) and therefore their tax liabilities were excepted from the bankruptcy courts’ general orders of discharge. The Tenth Circuit noted that the district court in this case utilized the long-established Beard test to determine whether a filing is a return, focusing on the third prong of the test, i.e., whether a Form 1040 filed after the IRS assesses tax penalties evinces “an honest and reasonable attempt” to comply with tax law. The district court in this case adopted the reasoning of several other courts to consider the issue and determined that because the IRS has no use for the Form 1040 after it has calculated tax liability, the late-filed returns have no valid purpose and therefore are not “honest and reasonable attempts” to follow tax law. The Tenth Circuit took a different approach, instead applying a plain language analysis to § 523(a). The Tenth Circuit found the phrase “applicable filing requirements” to include time limits for filing. Because the debtors did not file their returns by the deadline, an applicable filing requirement, they were not “returns” as required by the Bankruptcy Code.

The Commissioner of the Internal Revenue Service proposed a different approach, instead relying on the official IRS position, which is that “a debt assessed prior to the filing of a Form 1040 is a debt for which [a] return was not ‘filed.’” In essence, the Commissioner argued that focusing on the meaning of the word “return” was not necessary, and would impermissibly work a “major change” in bankruptcy practice. The Tenth Circuit rejected this approach, relying instead on the plain and unambiguous statutory language and finding that Congress intended the result achieved by the Tenth Circuit because the language it chose was unambiguous. It would not create a “major change” in bankruptcy practice because the language the Tenth Circuit interpreted was part of the Bankruptcy Code.

The district court’s rulings were affirmed.

F.R.A.P. 6 and Tenth Circuit Local Rules Amended

Rule 6 of the Federal Rules of Appellate Procedure, “Bankruptcy Appeals,” was amended, effective December 1, 2014. The changes to the rule incorporates the most recent numeric amendments to the bankruptcy rules, language was incorporated to include reference to electronic records, and the rule has been updated to include references to discretionary bankruptcy appeals in the Tenth Circuit per 28 U.S.C. § 158(d)(2).

The Tenth Circuit Local Rules were also amended, effective January 1, 2015. The changes to the Tenth Circuit Local Rules include changing references to accommodate electronic filing, moving all specific requirement for appendices to a single rule (Rule 30), adding a requirement that agency petitions include a list of parties to be served by the circuit clerk, outlining procedures for obtaining exemptions from electronic filing requirements, clarifications regarding citations to the record on appeal, and, most significantly, adding a rule that delineates requirements for appendices. The goal in adding Rule 30 was to move all requirements for appendices into one unified rule. Rule 30 requires electronic appendices for all retained counsel cases after January 1, 2015, except that one hard copy must be filed in the clerk’s office. Requirements for content and time of filing are delineated in the new rule, as well as options for seeking exemptions from the electronic filing requirement.

A memorandum issued by the Tenth Circuit explaining the changes to F.R.A.P. 6 and the Local Rules is available here. For a redline of the changes, click here.

Tenth Circuit Announces Bankruptcy Judge Vacancy in District of Wyoming

The Tenth Circuit Court of Appeals announced a vacancy for a bankruptcy judge in the District of Wyoming. This position will open after February 28, 2015, and it will be officially located in Cheyenne, Wyoming. Bankruptcy judges are appointed to 14-year terms. The District of Wyoming has a relatively low bankruptcy caseload, so the selected judge will be expected to carry a partial caseload in the District of Colorado as well.

To qualify for appointment, applicants must be a member in good standing of the highest court in at least one state or the District of Columbia, and be a member in good standing of every other bar in which the applicant is a member; possess and demonstrate various qualifications of fitness for duty, including outstanding legal ability and competence, a commitment to equal justice under the law, judicial temperament, and sound physical and mental health; not be related by blood or marriage to any other judge on the Tenth Circuit, a member of the Judicial Council of the Tenth Circuit, or a judge of the District of Wyoming; and must have been engaged in the practice of law or similarly suitable occupation for five years.

Applications are available on the Tenth Circuit’s website, and may also be obtained by calling the Office of the Circuit Executive at (303) 844-2067 and requesting to speak to a member of the Judicial Resources team. Applications must be received on or before December 19, 2014, and should be submitted via email to hr@ca10.uscourts.gov or by mail to Office of the Circuit Executive, Byron White U.S. Courthouse, 1823 Stout St., Denver, CO 80257. For more information about the vacancy and required qualifications of applicants, click here.