Dalton v. Warfield

Case Type:
Case Status:
BAP No. AZ-17-1310-SBaF (9th Circuit, Jul 11,2018) Not Published
BAP for 9th Circuit affirmed ruling of bankruptcy court (D. Az.) granting chapter 7 trustee's motion to approve compromise over debtor's objection. Debtor's pending appeal of prepetition entry of summary judgment against claim was insufficient to demonstrate that $5,000 compromise for claim was not in best interest of the estate. Debtor failed to demonstrate likelihood of success on merits of litigation claims. Thus, notwithstanding $1.7 million damages claim, sale of claim for $5,000 was in best interest of estate.
Procedural context:
Bankruptcy court (D. Az.) approved chapter 7 trustee's motion to approve compromise under Rule 9019 over debtor's objection. Debtor appealed to BAP for 9th Circuit.
In 2015, debtor filed pro se complaint against insurance agent and other defendants for breach of contract and intentional infliction of emotional distress. Debtor alleged his insurance agent persuaded him to purchase inadequate coverage that failed to protect him against bodily injury or theft. Debtor was subsequently injured and suffered other damages of $1,200 from theft. Debtor sought approximately $1.7 million in damages. After various removals and changes of venue, the U.S. District Court for the Eastern District of Arkansas entered summary judgment against debtor. Debtor commenced his chapter 7 case before his deadline to appeal the decision. Subsequently, debtor filed an untimely notice of appeal, then a motion to extend the time to appeal. The US District Court denied the motion to extend. The chapter 7 trustee negotiated with the insurance agent to sell the estate's claims for $5,000.
Spraker, Bason, Faris

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