In re Popkin & Stern
| Decision Date | 04 September 2001 |
| Docket Number | No. 01-6020EM.,01-6020EM. |
| Parties | In re POPKIN & STERN, Debtor. Robert J. Blackwell, Liquidating Trustee of the Popkin & Stern Liquidating Trust, Plaintiff-Appellee, v. Nancy Fendell Lurie, Defendant, Ronald U. Lurie, Interested Party-Appellant. |
| Court | U.S. Bankruptcy Appellate Panel, Eighth Circuit |
COPYRIGHT MATERIAL OMITTED
Ronald U. Lurie, Bozeman, MT, pro se.
Serall Chezem, O'Fallon, MO, for appellee.
Before: KOGER, KRESSEL, and DREHER, Bankruptcy Judges.
Ronald U. Lurie ("Lurie") appeals from portions of the bankruptcy court's order of March 6, 2001. For the reasons set forth below, we reverse.
This dispute arises in the bankruptcy case of Popkin & Stern, a St. Louis law firm ("Debtor"). Lurie was a general and managing partner of the firm. Debtor's bankruptcy case was commenced on March 26, 1992 by the filing of an involuntary petition. Debtor then converted the case to one under chapter 11 and Appellee Robert Blackwell ("Blackwell") was appointed trustee.
On August 27, 1993, the bankruptcy court confirmed Debtor's proposed plan of reorganization. That plan provided for the creation of a liquidating trust to collect Debtor's assets and distribute them to creditors pursuant to the terms of the plan. The plan further provided that Blackwell would be the trustee of the liquidating trust.
As part of his duties as the liquidating trustee, Blackwell sued Lurie under Section 723 of the Bankruptcy Code. On October 20, 1994, the bankruptcy court entered a judgment in favor of Blackwell and against Lurie for $1,121,743.00 ("the Lurie judgment"). The Lurie judgment was for the estimated deficiency to be assessed against Lurie, as a partner of Debtor. It also provided that if the amount of the deficiency was ultimately determined to be less than the amount of the judgment, "the Liquidating Trustee shall move this court to reduce this judgment." It is this quoted language that serves as the basis of Lurie's current appeal. Lurie appealed from the Lurie judgment, but his appeal was dismissed for failure to prosecute.
On October 2, 1997, at the request of Blackwell, the bankruptcy court issued an order reviving the judgment.1 Lurie also appealed from this order. The order reviving the Lurie judgment was subsequently affirmed by both the Bankruptcy Appellate Panel and the Eighth Circuit Court of Appeals. Blackwell v. Lurie (In re Popkin & Stern), No. 97-6091EM, slip op. (8th Cir. BAP 1998) (unpublished), aff'd, Blackwell v. Lurie (In re Popkin & Stern), 168 F.3d 494 (8th Cir.1998) (unpublished). On October 30, 2000, again at the request of Blackwell, the bankruptcy court issued a second order reviving the Lurie judgment. Lurie did not appeal this order.
Blackwell has since filed and executed on the Lurie judgment in numerous jurisdictions. He has also obtained at least one charging order from the bankruptcy court allowing him to execute against certain separately held assets of Lurie.
As part of his attempts to gather assets of Popkin & Stern, Blackwell also commenced a separate adversary proceeding against Nancy Lurie, Lurie's wife. Blackwell claimed that Nancy Lurie was the recipient of numerous fraudulent transfers. Lurie was not a party to this action. Blackwell obtained a judgment against Nancy Lurie in the amount of $352,300.95, plus interest ("Nancy's judgment"). This judgment explicitly provides that it is merged for execution purposes with the Lurie judgment, but that Blackwell is only entitled to execute on assets jointly owned by Nancy Lurie and Lurie up to the amount of Nancy's judgment. To recover the remainder of the Lurie judgment, Blackwell would have to find assets owned by Lurie separately.
In the early stages of the case against Nancy Lurie, at Lurie's request, the bankruptcy court issued an order dated February 21, 1995 which enjoined, until further order of the court, sale by anyone, including the Luries and Blackwell, of certain artwork and a wine collection ("the freeze order"). In late 1999, the freeze order became the subject of several motions and counter motions. Blackwell moved to lift the freeze order on the wine collection so as to allow him to execute on it. Nancy Lurie countered with her own motion for an accounting from the Trustee regarding how he had applied sums collected from execution on the two judgments. Nancy Lurie also sought a reduction of the Lurie judgment pursuant to the language quoted above which called for an adjustment depending upon how the partnership bankruptcy evolved.
On December 1, 1999, the bankruptcy court convened a hearing to resolve these several pending motions. Subsequently, on December 21, 1999, the court issued an order in which it found that the Lurie judgment was a full and final judgment no longer subject to appeal. The court also held that the time to move for relief from the Lurie judgment under Bankruptcy Rule 9024 (incorporating FED.R.CIV.P. 60) had passed, that the Lurie judgment was final, and the amount of the judgment was not subject to reduction. The court also found that Nancy Lurie was collaterally estopped and did not have standing to challenge the Lurie judgment. There is, however, nothing in the record indicating that Lurie appeared, was represented, or participated in any of these proceedings. He was certainly not a party.
In the summer of 2000, the judgment against Nancy Lurie was fully satisfied. She then sought an order from the bankruptcy court lifting the freeze order on two pieces of artwork, one located in New Mexico and the other in Wyoming, both of which were jointly owned by the Luries. She argued that, since the liquidating trustee had satisfied his judgment against Nancy Lurie, he was no longer entitled to execute on jointly owned property. Blackwell filed a response in which he argued that state law controlled and that the freeze order should be lifted to allow him to execute on it because, under applicable state law, the property would not be considered jointly owned. As part of a supplemental response he also, for the first time, raised a totally extraneous issue. Blackwell requested the bankruptcy court to reiterate the finding it had made in its order of December 21, 1999, to the effect that the Lurie judgment was final, unappealable, and not subject to reduction. Blackwell was having problems in Montana executing against property unrelated to the property at issue in the motion because Lurie was arguing to the Montana state court that the Lurie judgment was ambiguous. Blackwell asked the bankruptcy court to include language in the order on the pending motion that would make clear, once again, and he hoped once and for all, that the judgment against Lurie was final and was not subject to reduction. Blackwell urged that reduction was no longer an option because the bankruptcy court had issued a final nonappealable judgment in 1994, had issued two orders reviving the judgment, and had issued its December 19, 1999 order in Nancy Lurie's proceeding.
The court held a hearing on February 26, 2001. Blackwell and Nancy Lurie were represented by counsel. Lurie, who had been served with the supplemental response, appeared by telephone, but did not file a response to the motion nor state a position on the record. Apparently, the bankruptcy court had much earlier required Lurie be served and appear in all proceedings in Nancy Lurie's case, presumably for the purpose of making sure Lurie was aware of what was happening in Nancy Lurie's case. The hearing on this date also covered other matters which Lurie did respond to. However, nothing in the record suggests that Lurie was ever joined as a party or intervened in the adversary proceeding involving Nancy Lurie.
On March 6, 2001, the bankruptcy court issued the order appealed from, in which it denied the motion by Nancy Lurie to lift the freeze order and granted the Trustee's request to proceed with an execution against the artwork (indeed, against all assets generally). In that portion of the order from which Lurie appeals, the bankruptcy court ordered in, in part:
that the October 20, 1994 Judgment in favor of the Liquidating Trustee against Ronald Lurie for One Million One Hundred Twenty-One Thousand Seven Hundred Forty-Three Dollars ($1,121,743.00) is a full and final non-appealable and non-modifiable judgment which allows the Liquidating Trustee to execute on any and all property in order to enforce and/or collect said judgment.
And, in the next paragraph the court went on to order:
that Ronald Lurie, Nancy Lurie, Michael Lurie and Ryan Lurie are barred by collateral estoppel and res judicata to challenge either the October 20, 1994 Judgment against Ronald Lurie or the Popkin & Stern deficiency amount.
Lurie does not take issue with the bankruptcy court's decisions regarding the freeze order. Rather, he vigorously contends that the bankruptcy court erred in holding that the Lurie judgment was final, not subject to reduction, and not subject to his collateral attack. He advances a number of arguments as to why the judgment against him was erroneous at the onset and is, at a minimum, ambiguous. He asserts that this court should reverse and remand so that the bankruptcy court can address his continuing assertions that the original amount of the judgment against him must be reduced because, as facts have developed, the deficiency is much less than originally anticipated. He also wants this court to require an accounting from the trustee of collections, allocations and disbursements on the judgment. He contends that until the judgment is reduced to a sum certain it cannot serve as the basis for a valid execution. He also asserts that we should reverse the bankruptcy court because Lurie was not a party to the ...
To continue reading
Request your trial