IN RE: LAKE MATHEWS MINERAL PROPERTIES (2021)

United States Court of Appeals, Ninth Circuit.2021-08-06No. No. 20-55276

Summary · law.co

Holding. The appellate court affirmed the district court's judgment upholding the bankruptcy court's disallowance of Merritt's proof of claim and affirmed the denial of his motion for reconsideration.

Paul Merritt appealed the district court's affirmation of a bankruptcy court order that rejected his proof of claim in the Lake Mathews Mineral Properties bankruptcy case. The appellate court reviewed the bankruptcy court's legal conclusions without deference and its factual findings for clear error. Merritt failed to establish the validity of his claim by the required standard of proof, as he possessed only an equity interest in the debtor rather than a cognizable claim. Equity ownership alone is insufficient to support an allowed proof of claim in bankruptcy proceedings.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a proof of claim based solely on equity interest in a debtor is valid
Standard of proof required to establish validity of a claim in bankruptcy
Scope of appellate jurisdiction over district court review of bankruptcy decisions

Procedural posture

Merritt appealed pro se from the district court's affirmation of the bankruptcy court's disallowance of his proof of claim, and subsequently moved for reconsideration.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

MEMORANDUM **

Paul Merritt appeals pro se from the district courts order affirming the bankruptcy courts order disallowing his proof of claim. We have jurisdiction pursuant to 28 U.S.C. § 158(d). We review de novo a district courts judgment on appeal from a bankruptcy court. In re First T.D. & Inv., Inc., 253 F.3d 520, 526 (9th Cir. 2001). We apply the same standard of review applied by the district court, reviewing the bankruptcy courts legal conclusions de novo and its factual determinations for clear error. Id. We affirm.

The bankruptcy court properly disallowed Merritts proof of claim because he failed to prove its validity by a preponderance of the evidence. See Lundell v. Anchor Const. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). The record demonstrates that Merritt has at most an equity interest in the debtor. “It is axiomatic that an allowed proof of claim requires something more than mere equity ownership.” In re USA Com. Mortg. Co., 377 B.R. 608, 615 (B.A.P. 9th Cir. 2007). The district court thus did not err in affirming the bankruptcy courts disallowance of Merritts proof of claim.

Because the district court did not err in affirming the bankruptcy courts disallowance of Merritts proof of claim, there was no error for the district court to correct on Merritts motion for reconsideration. Thus, the district court did not abuse its discretion in denying that motion.

Sch. Dist. No. 1J, Multnomah Cnty. v. ACandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993).

We do not consider matters not specifically and distinctly raised and argued in the opening brief or arguments raised for the first time on appeal. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009) (per curiam).

AFFIRMED.

FOOTNOTES

. Appellee argues that the scope of this appeal is limited to review of the district courts order denying Merritts motion for reconsideration. However, because Merritt timely filed a reconsideration motion—which we construe as a motion for rehearing under Rule 8022 of the Federal Rules of Bankruptcy Procedure—and subsequently timely filed a notice of appeal following the district courts denial of his reconsideration motion, we have jurisdiction to review both the district courts order affirming the bankruptcy courts order disallowing Merritts proof of claim and the district courts order denying Merritts motion for reconsideration. See Fed. R. App. P. 6; Fed. R. Bankr. P. 8022.