Kyle v. Dye
Docket: Nos. 05-55566, 05-55568
Court: Court of Appeals for the Ninth Circuit; April 18, 2007; Federal Appellate Court
Clinton Irving appeals the Bankruptcy Appellate Panel's (BAP) decision affirming the dismissal of his adversary complaint aimed at preventing the sale of a parcel of real estate belonging to the Debtor, as well as the sanctions awarded against his attorney, David Kyle. The court affirms both the dismissal and the sanctions. The bankruptcy court determined that the disputed property was part of the Debtor's bankruptcy estate and that Carolyn Dye, the Chapter 7 Trustee, complied with 11 U.S.C. § 363 requirements. Irving's appeal was rendered moot because he did not obtain a stay pending appeal before the property was sold to a good faith purchaser. The court's ruling that the property belonged to the bankruptcy estate became the law of the case. Consequently, Irving's adversary complaint, which contested the Debtor's ownership, was also deemed moot. Additionally, Irving had ample opportunity to present his case at the sale hearing, arguing that Dye improperly secured the title transfer and that the sale would conflict with state court decisions, rendering his due process claims without merit. Regarding sanctions against Kyle, the bankruptcy court acted within its discretion, finding that he filed the adversary complaint to deliberately delay the sale. The record indicated Kyle, who is also the Debtor's husband, had previously asserted the Debtor's ownership of the property before shifting his claims when the potential for a sale surplus arose. Kyle failed to obtain court permission to amend his complaint and improperly included parties as defendants despite Irving lacking standing against them, justifying the sanctions. The BAP's findings were upheld, including a note that Irving did not oppose or attend the hearing concerning Dye's settlement motion. Kyle's argument regarding lack of proper notice for sanctions was dismissed, as he had been served with notice prior to the sanctions motion being filed. The overall judgment from the BAP is affirmed, with the disposition not intended for publication or precedent, except under specific circuit rules.