In re Vlasek, 02-2062.
| Decision Date | 11 April 2003 |
| Docket Number | No. 02-2062.,02-2062. |
| Citation | 325 F.3d 955 |
| Parties | In re Joseph VLASEK, Debtor-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Steven R. Radtke (argued), Chill, Chill & Radtke, Chicago, IL, for Trustee-Appellee.
Richard D. Grossman (argued), Chicago, IL, for Debtor-Appellant.
Before BAUER, RIPPLE, and KANNE, Circuit Judges.
Joseph Vlasek appeals the district court's affirmance of the bankruptcy court's refusal to dismiss his bankruptcy petition on the assertion that his mother had fraudulently signed the petition in his name and filed it without his authority. We dismiss Vlasek's appeal.
In January 1991, Joseph Vlasek netted $907,500 in settlement of a personal-injury lawsuit arising out of an injury he received in an automobile accident. Because Vlasek was seventeen years old at the time, a minor estate was opened on his behalf and the settlement proceeds were delivered to the estate. Two months later, on the occurrence of his eighteenth birthday, the estate was closed, and the sum of $909,561.88 was turned over to Vlasek.
Over the next few years, Vlasek started and closed two business and bought four properties in his own name in Homewood, Illinois. All four properties were mortgaged, and he and his mother moved into one of them. By 1993, the failed businesses and real-estate purchases had consumed most of his settlement proceeds.
In April 1993, Vlasek's girlfriend gave birth to a son. She alleged Vlasek was the father, but Vlasek denied paternity. So, in October 1993, Vlasek's girlfriend filed a paternity action, and nearly three years later, an Illinois state court found that Vlasek was the child's father and ordered him to make semi-monthly $1000 child-support payments. When he refused to comply with that order, the state court, on August 20, 1996, entered a retroactive-child-support judgment against Vlasek in the amount of $77,000.
Seven days later Vlasek filed a Chapter 7 bankruptcy petition, and a month after that, he submitted his bankruptcy schedules. But curiously those schedules did not list the four real-estate holdings that Vlasek had purchased. It appears that back in 1993 while his child's mother was still pregnant, Vlasek had begun transferring his real-estate holdings out of his name — without receiving any compensation.
By questioning Vlasek during his mandatory creditor meeting held pursuant to 11 U.S.C. § 341, the Trustee learned about the personal-injury settlement, the four real-estate purchases, and the subsequent transfers. He later investigated the circumstances of the property transfers, determined the transfers were voidable, and successfully pursued a fraudulent-transfer action in the bankruptcy court. As a result, the bankruptcy court set aside the real-estate transfers. Vlasek did not move to alter or amend this order. Nor did he seek to appeal the bankruptcy court's ruling.
The bankruptcy court obtained an agreement from the Trustee that the Trustee would not seek to sell Vlasek's home unless the funds obtained by selling the other three properties proved insufficient to settle all creditor claims. Nevertheless, it became apparent that the proceeds from the three property sales would in fact prove insufficient. Thus, on November 17, 1998, the bankruptcy court entered an order authorizing the Trustee to employ a real-estate broker to market Vlasek's residence.
Seven days after the court authorized the Trustee to begin preparations to sell Vlasek's residence, Vlasek moved to dismiss his bankruptcy petition altogether. This request came nearly two-and-a-half years after the bankruptcy petition had been filed. Vlasek alleged that he had never signed his bankruptcy petition, but rather that his mother had fraudulently signed his name. He later claimed that at the time of the bankruptcy's filing in August 1996 he was mentally incompetent — a result of a closed-head injury suffered in the automobile accident. Vlasek asserted as proof of his incompetency a later 1997 Illinois probate court order granting his mother plenary guardianship over his person.1 Vlasek asked the court to dismiss his bankruptcy case and void each of the orders it had entered previously.
Besides the November 17, 1998 order authorizing the Trustee to hire a broker to market Vlasek's residence, the orders that Vlasek also sought to void through dismissal would have included (i) the order setting aside the four real-estate transfers; (ii) a March 19, 1998 order approving the sale of the first of the four properties, located at 2147 Cedar Road, for the sum of $240,000; and (iii) a June 2, 1998 order requiring the Trustee to abandon the second of the four properties, located at 17835 South Howe, pursuant to a motion to compel brought by the bank that was foreclosing on that property. Vlasek, however, never sought to appeal or stay any of these individual orders at the time they were rendered.
The bankruptcy court promptly conducted an evidentiary hearing on Vlasek's motion to dismiss. The court admitted into evidence a recording and transcript of Vlasek's § 341 creditor meeting. Vlasek also testified during the proceedings, but the bankruptcy court observed that his testimony "appeared to have been rehearsed." (R.1, Bankr.N.D. Ill. Apr. 30, 1999 Order at ¶ 14.) At the request of the Cook County Public Guardian's office (who had been invited by the court to participate in the hearings given the 1997 Illinois state court guardianship action), the bankruptcy court ordered Vlasek to submit to a psychiatric evaluation. The evaluation was scheduled for March 23, 1999, and the court deferred ruling on the dismissal motion. Vlasek never appeared for the evaluation.
While the dismissal motion was still pending, the court approved the sale of the third of the four properties, located at 17864 Tipton, for the sum of $154,500 by order dated January 7, 1999. In spite of the fact that success on his dismissal motion would render void this order also, Vlasek sought no appeal from the ruling nor did he seek to stay the sale pending the resolution of the dismissal motion.
On April 30, 1999, the bankruptcy court determined that even if Vlasek did not personally sign his name to the petition, he otherwise had adopted and ratified its filing through his course of conduct during the two years of bankruptcy proceedings. He was therefore estopped from raising the issue. Furthermore, the bankruptcy court was skeptical of Vlasek's evidentiary basis for filing the motion, noting that he had only raised the genuineness of his signature and his mother's lack of authority to act on his behalf when the sale of their residence appeared imminent. (The motion's filing also coincided with Vlasek's and his mother's repeated obstructionist efforts to thwart or delay the sale.) Consequently, the bankruptcy court found that the petition was validly filed and that the Trustee's ongoing administration of the estate was proper. Vlasek took no appeal from the ruling.
Instead, a few months later, Vlasek filed a motion "to vacate all orders relating to any adversary proceedings," which was apparently stylized, like the relief he requested in his motion to dismiss, to contest the court's earlier decisions to set aside the four property transfers and any orders approving their sale. The bankruptcy court denied that motion on June 8, 1999. Vlasek didn't attempt to appeal the ruling. Nor did he later appeal or seek to stay the bankruptcy court's August 31, 1999 order approving the sale of the last of the four properties — his residence at 1537 W. 187th Street.
The Trustee's administration of the estate proceeded, and on May 25, 2001, the bankruptcy court approved the Trustee's final accounting of the disbursement of all estate funds, discharged the Trustee, and closed the estate. Only then did Vlasek file a notice of appeal, seeking to challenge, under the auspice of the May 2001 order closing the estate, both the April 30, 1999 ruling on the motion to dismiss and the June 8, 1999 ruling on the motion to vacate.
On review, the district court determined that Vlasek could not have appealed the April 30, 1999 denial of his motion to dismiss as a "final" order, and thus held that he was not barred from appealing that ruling under his current notice. But it also held that the bankruptcy court properly denied Vlasek's attempt to dismiss his bankruptcy petition, agreeing with the bankruptcy court that the time to challenge his mother's allegedly fraudulent filing had long passed by the time the motion was filed and that he had waived any claim of mental incompetence by failing to submit to the court-ordered psychiatric evaluation. Regarding the motion to vacate, the district court held Vlasek's appeal untimely, because orders approving the sale of assets of the estate are final for purposes of appeal and Vlasek did not appeal those decisions within the statutorily mandated time frame. See FED. R. BANKR. P. 8002(a) ().
Vlasek seeks review of the district court's decision, challenging its affirmance of the bankruptcy court's April 30, 1999 order denying the motion to dismiss. He claims that the allegedly fraudulent filing denied him due process. Vlasek does not challenge the district court's ruling that Vlasek's appeal of the June 8, 1999 order was untimely.
The Trustee argues that we lack jurisdiction to hear Vlasek's appeal. As noted, Vlasek challenges the April 30, 1999 denial of his motion to dismiss his bankruptcy petition under his notice of appeal from the bankruptcy court's May 25, 2001 order closing the estate and discharging the Trustee. The Trustee argues that the April 30, 1999 order was, in fact, "final" and that Vlasek's appeal of the decision under the May 25, 2001 discharge order is thus...
To continue reading
Request your trial
-
Alderwoods Grp., Inc. v. Garcia
...court's review of a bankruptcy court order can only be based on a proper exercise of the district court's jurisdiction.” In re Vlasek, 325 F.3d 955, 960 (7th Cir.2003). We nevertheless also have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. 16.Section 350(b) states, in pertine......
-
In re Zeigler
...notice and a hearing. Indeed, the trustee must petition the court for approval to pursue the sale of a debtor's property. In re Vlasek, 325 F.3d 955, 961 (7th Cir.2003). Federal Rule of Bankruptcy Procedure 6004(a) provides in pertinent part that "notice of a proposed use, sale, or lease of......
-
Iwoi, LLC v. Monaco Coach Corp.
...(D.C.Cir.2001)); see e.g. Church of Scientology v. United States, 506 U.S. 9, 12, 113 S.Ct. 447, 121 L.Ed.2d 313 (1992); In re Vlasek, 325 F.3d 955, 961 (7th Cir.2003). In this case, any relief that Plaintiff might have obtain vis-à-vis Monaco would have to come from the bankruptcy court an......
-
In re Ross-Tousey
...the UST that a finding of jurisdiction in this case is not contrary to In re Jartran, Inc., 886 F.2d 859 (7th Cir.1989) or In re Vlasek, 325 F.3d 955 (7th Cir.2003). In Jartran, we held not final an order denying a creditor's request for administrative priority and for dismissal of a second......
-
Alla Raykin, section 363 Sales: Mooting Due Process?
...than the good faith buyer is possible if the validity of the sale would not79 11 U.S.C. § 363(m) (2006).Vlasek v. Levey (In re Vlasek), 325 F.3d 955, 961 (7th Cir. 2003); Cinicola v. Scharffenberger, 248 F.3d 110, 1121–22 (3d Cir. 2001); Boullioun Aircraft Holding Co. v. Smith Mgmt. (In re ......