In re Ralph and Paula Isom

Case Type:
Case Status:
BAP No. ID-19-1198-BGL (9th Circuit, Apr 22,2020) Not Published
A) An appeal of an order is timely if the appellant (i) first files a motion for relief under Fed. R. Bankr. P. 9023 within 14 days of entry of the order and (ii) the files the notice of appeal within 14 days after entry of an order denying the appellant relief under Rule 9023. B) The Appellees failed to carry the burden of proving that the appeal was equitably moot. C) The Appellants waived their appeal of one of the bankruptcy court's orders by failing to address any argument to the order in the opening brief.
Procedural context:
The bankruptcy court approved a settlement between a chapter 7 trustee and a secured creditor. The debtors moved for reconsideration of the order approving the settlement, and for a stay of the settlement order. Both motions were denied. The debtors appealed. (The BAP also denied a stay pending the appeal.)
Before bankruptcy, the Isoms owned and operated a farm in Idaho (the "Farm"). The Farm was encumbered by two mortgages securing two promissory notes in favor of Rabo Agrifinance. The Rabo liens also covered all water rights associated with the Farm, including the Palisades Water Shares, and all irrigation equipment and fixtures on the Farm. Following the Isoms' default, Rabo obtained a judicial default judgment in 2014. Rabo assigned the notes, the mortgages, and the foreclosure to appellee Brad Hall & Associates, Inc. ("Hall"). Hall and the Isoms entered into a deed-in-lieu agreement, with Hall releasing all claims against the Isoms. The Isoms also conveyed to Hall all water rights, including the Palisades Water Shares, all irrigation equipment and fixtures on the Farm. Hall leased the Farm to the Isoms, and granted the Isoms an option to purchase the Farm. The Isoms defaulted on the lease. The Isoms also owned a rental house and a 10-acre parcel with a shop. In 2015, PacifiCorp obtained a default judgment against the Isoms. PacifiCorp's judgment lien fully encumbered the rental house and the 10-acre parcel. During the Isoms' bankruptcy case, Hall purchased PacifiCorp's judgment lien claim and other third-party unsecured claims. The Isoms filed for chapter 11 protection on July 31, 2015. I&S Farms filed a chapter case 14 months later. The cases were consolidated in April 2017. The Isoms commenced an adversary proceeding against Hall seeking to avoid the transfer of the Farm under § 548 and applicable Idaho law. After conversion of the case to chapter 7, the trustee continued to prosecute the adversary proceeding. The trustee and Hall settled the adversary proceeding. Hall subordinated its unsecured and administrative claims acquired during the bankruptcy cases, and pay the trustee $300,000. The trustee would assign certain avoidance action rights to Hall, and acknowledge Hall's secured judgment liens on the rental house and 10-acre parcel. The trustee and Hall would release all claims between them. Following a contested hearing to approve the settlement, the bankruptcy court approved the settlement. The bankruptcy court then denied the Isoms' motion to alter or amend the order approving the settlement and motion for a stay pending appeal.
BRAND, GAN and LAFFERTY, Bankruptcy Judges

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