Summary
The United States Bankruptcy Appellate Panel of the Tenth Circuit affirmed the bankruptcy court's dismissal of Sean Brewer's adversary proceeding concerning the dischargeability of obligations to the Indiana Department of Natural Resources. The Panel held that Brewer waived challenges to the bankruptcy court's summary-judgment order by entering into a settlement agreement, that alleged fraud in the settlement agreement had to be raised first under Federal Rule of Civil Procedure 60(b)(3), and that the remaining challenges were moot.
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Practice areas
Questions Presented
- Whether Brewer waived appellate challenges to the bankruptcy court's earlier summary-judgment order by entering into a settlement agreement resolving the adversary proceeding.
- Whether Brewer could challenge the dismissal order on appeal based on alleged fraud in the settlement agreement without first seeking relief from the bankruptcy court under Federal Rule of Civil Procedure 60(b)(3).
- Whether Brewer's remaining challenges to the summary-judgment order were constitutionally moot after the settlement and dismissal.
Holdings
- By entering into a complete settlement resolving the issues in the adversary proceeding, Brewer expressly waived his right to challenge the earlier summary-judgment order on appeal.
- A challenge asserting that the dismissal order was procured by fraud must first be presented to and decided by the bankruptcy court under Federal Rule of Civil Procedure 60(b)(3), as applied through Federal Rule of Bankruptcy Procedure 9024; it cannot be raised for the first time on appeal.
- The remaining challenges to the summary-judgment order were constitutionally moot because, absent reversal of the dismissal order, the court could not grant meaningful relief concerning that order.
Key quotations
“A litigant may not seek relief under Rule 60(b)(3) for the first time on appeal.” (9)
“Appellate courts do not make findings of fact.” (10)
Factual background
Brewer entered into a settlement with the Indiana Department of Natural Resources requiring him to plug and abandon certain oil and gas wells and later failed to bring the wells into regulatory compliance. The Department revoked permits, obtained administrative and state-court orders requiring plugging and abandonment, and incurred $43,301 in plugging costs, in addition to civil penalties. After Brewer's chapter 7 discharge, he filed an adversary proceeding concerning dischargeability, but the parties later settled the remaining disputes and agreed that the adversary proceeding would be dismissed.
Procedural history
Brewer filed a chapter 7 bankruptcy case and later commenced an adversary proceeding seeking a determination that obligations to the Indiana Department of Natural Resources were dischargeable. The bankruptcy court denied Brewer's motion for judgment on the pleadings, granted the Department's motion for summary judgment in part, and left some issues unresolved. The parties later entered into a settlement agreement resolving the remaining issues, and the bankruptcy court dismissed the adversary proceeding. Brewer appealed the dismissal order and attempted to challenge the earlier summary-judgment ruling and the validity of the settlement.
Remand instructions
No remand was ordered. The affirmance was without prejudice to Brewer seeking Rule 60(b) relief from the bankruptcy court concerning the dismissal order after issuance of the appellate mandate.