McIntyre v. Fangman, et al.
- Summarized by Leo Weiss , Office of the U.S. Trustee
- 5 months 5 days ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- 23-1048 (10th Circuit, Aug 02,2024) Not Published
- Tag(s):
-
- Ruling:
- McIntyre had business disputes with Fangman. After interpleading the amount he admitted owing in a state court, he filed a pro se Chapter 13 bankruptcy in which he challenged the state court's rulings to that date and sought to have the bankruptcy court determine the dispute. That court held that it lacked jurisdiction because of the pending state court case and abstained, as an alternative basis for its ruling. It granted relief from stay to Fangman who obtained a final non-appealable state judgment. On appeal the appellate panel affirmed as did the Circuit Court.
- Procedural context:
- Chapter 13 debtor, McIntyre, appealed from an appellate panel ruling affirming the bankruptcy court's ruling that it lacked jurisdiction over a business dispute with Fangman and his related company because there was a pending prepetition state court case involving that dispute. Alternatively, the Court held that it would abstain from hearing the dispute and granted relief from the automatic stay to Fangman. Fangman obtained a final non-appealable state court judgment and the disbursement of the $22,000 that McIntyre had interpled into the state court as his admitted liability to Fangman. McIntyre appealed the lower courts' judgments based upon an argument that the bankruptcy court had exclusive jurisdiction over the dispute and the interpled funds. He also appealed the granting of relief from the automatic stay.
- Facts:
- McIntyre was a salesman for several solar energy companies. His relationships with those companies soured and resulted in state court cases to resolve his disputes with those companies. Fangman is an owner of Sol Energy, LLC. McIntyre admitted that he had a $22,000 debt to Sol. He interpleaded this sum into the state court. After the state court had conducted some proceedings, McIntyre filed a Chapter 13 bankruptcy. McIntyre sought to have his disputes with Sol and Active Energies Solar, LLC resolved by the bankruptcy court. He argued that these disputes were "core proceedings" and the bankruptcy court had exclusive jurisdiction to hear them and that the $22,000 of interpleaded funds were "property of the estate" over which the bankruptcy court had exclusive jurisdiction. He also sought to amend his complaint in Fangman to add a Sec. 1983 claim, which was denied for lack of any basis for finding "state action."
The bankruptcy held that it lacked jurisdiction over the disputes because of the pending state court proceedings and that even if it had jurisdiction it would abstain from hearing those disputes. The Court granted relief from stay to the creditors to litigate the disputes in the pending state court case. The Court held that even if the matters were core proceedings its jurisdiction was not exclusive and the state court retained jurisdiction to hear the matters.
McIntyre appealed the bankruptcy court's rulings to the Tenth Circuit Bankruptcy Appellate Panel which affirmed holding that it lacked jurisdiction to review the bankruptcy court's abstention ruling and that the it could find no error in the bankruptcy court's jurisdiction and denial of amendment rulings and that McIntyre had failed to preserve an adequate record to raise the granting of relief from stay on appeal.
McIntyre appealed the appellate panel rulings to the Tenth Circuit. In related opinions, the Circuit Court affirmed both the bankruptcy court's rulings in Fangman (Case No. 1048) and in Active Energies Solar, LLC (Case No. 23-1052). The Court found that it could not review the bankruptcy court's permissive abstention order. However, it could review whether or not the bankruptcy court had exclusive jurisdiction since the abstention would be improper if there was "exclusive" jurisdiction. In each of the opinions, the Circuit Court found that the disputes were related to the bankruptcy case but that bankruptcy court's "original" jurisdiction, as derived from the district court, was non-exclusive.
The Circuit Court affirmed the denial of McIntyre's motion to amend to add the Sec. 1983 for lack of any allegation of a state action.
In Fangman, the Circuit Court held that the granting of relief from stay was moot because a final non-appealable judgment had been entered in the state court and the $22,000 of interpleaded funds disbursed to the creditor.
Although McIntyre is a pro se debtor, the Circuit Court noted that McIntyre was a disbarred attorney and not entitled to the liberal interpretation of pleadings and arguments granted other pro se litigants.
- Judge(s):
- Matheson, Eid and Carson
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