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In re Lebbos

April 19, 2010

IN RE: BETSEY WARREN LEBBOS, DEBTOR,
JASON GOLD, APPELLANT,
v.
LINDA SCHUETTE, APPELLEE.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

MEMORANDUM AND ORDER

This matter is before the court on pro se appellant Jason P. Gold's ("Gold" or "appellant") appeal of the bankruptcy court's order directing Betsy Lebbos ("Lebbos") and Thomas Carter ("Carter") to comply with the bankruptcy court's judgment in favor of Linda Schuette ("Schuette" or "appellee"), trustee of the bankruptcy estate. (Docket # 1.) The bankruptcy court's order did not apply to Gold, but he nonetheless, pursuant to 28 U.S.C. § 158(a), elected appeal to this court.

The court has reviewed the parties' briefs and the underlying record, as contained within the excerpts of record submitted by appellant, and by this order, issues its decision DISMISSING appellant's appeal for lack of standing.*fn1

BACKGROUND

On January 3, 2007, Schuette filed an adversary complaint against Lebbos, Carter, and appellant seeking an order setting aside two fraudulent transfers of real property and related relief. (Appellant's Br., Excerpts of Record ["ER"], filed Dec. 21, 2009, at E24-38.)*fn2 On April 17, 2008, the bankruptcy court entered a judgment in favor of Schuette against Lebbos, Carter, and appellant. (Id. at D21-23.) On August 19, 2009, Schuette filed a motion to hold Lebbos, Carter, and Gold in contempt for noncompliance with the judgment. (Id. at G67-78.) On September 16, 2009, the court held a preliminary hearing and determined that an evidentiary hearing was necessary. (Id. at C16-20.) At the evidentiary hearing on October 19, 2009, Schuette called witnesses and introduced evidence. (Appellee's Br., filed Jan. 13, 2010, at 1.) Appellant cross-examined witnesses, attempted to call witnesses, and objected to evidence.*fn3 (Id. at F39-66.)

On November 18, 2009, the court issued findings of fact and conclusions of law, which found that Lebbos and Carter were in contempt of court. (ER at BR3-15.) The court also found that (1) appellant had filed his own personal Chapter 7 bankruptcy on August 4, 2009; (2) appellant had not informed the bankruptcy court nor opposing counsel of this filing until after opposing the contempt motion and participating in the evidentiary hearing; and (3) appellant's personal bankruptcy case was still pending. (Id. at B3-4.) The court stated that because of the automatic stay provisions of 11 U.S.C. § 362(a), it would "make no findings or conclusions as to [appellant] and will issue no order against [appellant] at this time." (Id.) The court also issued a further order on November 19, 2009, which specifically directed Lebbos and Carter to comply with paragraphs six, seven, and eight of the April 17 judgment. (Id. at A1-2.) On November 30, 2009, appellant filed his notice of appeal of the contempt order. (Docket # 1.)

STANDARD OF REVIEW

Standing to appeal from a bankruptcy court's order is determined under the so-called "persons aggrieved" test. In re Menk, 241 B.R. 896, 917 (9th Cir. 1999) (citing Everex Sys., Inc. v. Cadtrak Corp. (In re CFLC, Inc.), 89 F.3d 673, 675 (9th Cir. 1996)). The persons aggrieved test limits appellate standing to "those persons who are directly and adversely affected pecuniarily by an order of the bankruptcy court." Fondiller v. Robertson (In re Fondiller), 707 F.2d 441, 442 (9th Cir. 1983); see In re CFLC, Inc., 89 F.3d at 675; Brady v. Andrew (In re Commercial W. Fin. Corp.), 761 F.2d 1329, 1334 (9th Cir. 1985).

Thus, a district court should dismiss an appeal for lack of standing if the appellant cannot demonstrate that the bankruptcy court's order had a direct and adverse affect on appellant. See In re Menk, 241 B.R. at 917.

United States bankruptcy courts have the power to impose orders for civil contempt. See Oliner v. Kontrabecki, 305 B.R. 510, 520 (N.D. Cal. 2004); see Caldwell v. Unified Capital Corp. (In re Rainbow Magazine), 77 F.3d 278, 284 (9th Cir. 1996).

The standard of review in the Ninth Circuit for civil contempt orders is abuse of discretion. Oliner, 305 B.R. at 520 (citing Fed. Trade Comm'n v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999)). A bankruptcy court's legal conclusions are reviewed de novo, and its findings of fact are reviewed for clear error. Eskanos v. Roman (In re Roman), 283 B.R. 1, 7 (9th Cir. 2002). "It is a 'long-standing rule that a contempt proceeding does not open to reconsideration the legal or factual basis of the order alleged to have been disobeyed and thus become a retrial of the original controversy.'" United States v. Ayres, 166 F.3d 991, 995 (9th Cir. 1999) (quoting United States v. Rylander, 460 U.S. 752, 756-57 (1983)); Oliner, 305 B.R. at 520.

ANALYSIS

Appellant raises a number of issues in his brief. The gravamen of appellant's argument is that the bankruptcy court abused its discretion when it determined Lebbos, Carter, and appellant were in civil contempt. Specifically, appellant argues that the bankruptcy court (1) did not have jurisdiction over appellant, and (2) had insufficient evidence to find that appellant did not comply with the bankruptcy court's April 2008 judgment. (Appellant's Br. at 1-4.) In response, appellee contends, inter alia, that (1) ...


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