Schweigert v. Schweigert

• Decision Date: 11 February 2021
• Docket Number: CV 20-154-M-DLC
• Parties: TAMARA SCHWEIGERT, Appellant, v. TRAVIS SCHWEIGERT, Appellee.
• Court: United States District Courts. 9th Circuit. United States District Court (Montana)

TAMARA SCHWEIGERT, Appellant,
v.
TRAVIS SCHWEIGERT, Appellee.

CV 20-154-M-DLC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION

February 11, 2021

ORDER

This matter comes before the Court on appeal from the United States Bankruptcy Court for the District of Montana. In essence, this appeal asks whether, under Montana law, Appellant Tamara Schweigert has a valid lien in Appellee Travis Schweigert's brands and branded livestock. She does not. Accordingly, the Court will affirm confirmation of Mr. Schweigert's Chapter 13 plan and all contested ancillary orders.

BACKGROUND

This appeal stems from a siblings' quarrel. The Schweigerts, who are brother and sister, previously engaged in ranching operations together in Montana. (Doc. 4-1 at 8.) In 2016, problems arose when Ms. Schweigert accused Mr. Schweigert of misappropriating proceeds from the sale of cattle. (Docs. 4 at 7; 4-1 at 5.) A settlement agreement was executed, seemingly putting the matter to rest.

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(Id. at 5-7.) Unfortunately, the dispute did not end there.

Instead, Ms. Schweigert subsequently sued Mr. Schweigert in Montana state court alleging he had breached his obligations under the settlement agreement. (Id. at 11.) And she prevailed, winning on summary judgment, and obtaining final judgment in the amount of $42,432.86. (Id. at 21-22.) With judgment in hand, Ms. Schweigert began the process of attempting to collect. In furtherance of this effort, she took two critical steps.

First, she recorded her judgment with the Lake County Clerk and Recorder's Office. (Id. at 114.) Second, she requested that the Montana Department of Livestock file her judgment as a lien against Mr. Schweigert's registered brands. (Id. at 23.) The Department refused, requesting additional documentation including a writ of execution. (Id. at 26.) Accordingly, Ms. Schweigert obtained a writ of execution from the state district court that issued the judgment. (Id. at 32-33.)

This writ of execution states, in relevant part, that "you, the Montana Department of Livestock, Brands Enforcement Division, are hereby directed to make" $42,432.86 "due on the judgment . . . to satisfy the judgment out of brands owned or maintained by" Mr. Schweigert. (Id. at 33.) It further provides "[y]ou are directed to return this writ not less than 10 days nor more than 120 days after the date of receipt." (Id.) Ms. Schweigert provided the Department with the writ

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of execution and a document entitled Notice of Security Interest Covering Branded Livestock, which it then filed. (Id. at 34-38.) The notice purports to extend to all branded livestock bearing Mr. Schweigert's brand. (Id. at 38.) After taking the foregoing steps, but before any substantive collection efforts could be undertaken, Mr. Schweigert initiated bankruptcy proceedings.

Mr. Schweigert filed his Chapter 13 petition on March 10, 2020. (Doc. 1-1 at 1.) On July 1, 2020, Ms. Schwiegert filed the proof of claim that is the subject of this appeal, asserting that she possessed a $42,432.85 secured claim against Mr. Schweigert's brands and branded livestock. (Doc. 4-1 at 51.)¹ To justify its existence, this proof of claim pointed to the state court judgment, writ of execution, and notice, described above. (Id.) Mr. Schweigert objected to this proof of claim, contending that the underlying claim was unsecured and urging the bankruptcy court to disallow Ms. Schweigert's "claim as a secured claim and instead allow[] it as a general unsecured claim in the amount of $42,432.86." (Id. at 62-64, 103-06.) Ms. Schweigert responded by contending that her claim stemmed from a valid lien under Montana law, and was thus properly allowable as a secured claim. (Id. at 70-76; 112-29.)

The bankruptcy court held a hearing on the proof of claim and

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corresponding objection before concluding that Ms. Schweigert "has not established she has a valid lien in [Mr. Schweigert's] brand[s] or branded livestock." (Doc. 1-2 at 1, 10.) As such, it sustained Mr. Schweigert's objection and afforded Ms. Schweigert "a general unsecured claim in the amount of $42,432.86." (Doc. 1-3 at 1.)

At this same time, Mr. Schweigert filed a proposed Chapter 13 plan, omitting a secured claim from Ms. Schweigert's in the amount of $42,432.86. (Doc. 4-1 at 41-45.) Ms. Schweigert contested confirmation of the plan based on such omission. (Id. at 53-55.) The bankruptcy court held a hearing, and subsequently issued an order noting that its prior order refusing to allow Ms. Schweigert a secured claim resolved her outstanding objection to confirmation of the plan. (Id. at 142.) The bankruptcy court then examined Mr. Schweigert's proposed plan, found that it conformed to the bankruptcy code, and entered a confirmatory order. (Id. at 142-45.) Ms. Schweigert appeals. (See generally Doc. 1.)

JURISDICTION

Whether an appeal falls within this Court's jurisdiction is a threshold issue in every case and one "the court is bound to ask and answer for itself, even when not otherwise suggested, and without respect to the relation of the parties to it." Great S. Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 453 (1900). District courts,

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such as this one, are authorized to hear appeals "from final judgments, orders, and decrees" issued by bankruptcy courts within their judicial district. 28 U.S.C. § 158(a)(1). This includes orders confirming Chapter 13 plans, which are final orders within the meaning of 28 U.S.C. § 158(a)(1). Bullard v. Blue Hills Bank, 135 S.Ct. 1686, 1692 (2015).

Importantly, however, this jurisdiction is permissive in that it must be specifically invoked by the parties to the appeal. 28 U.S.C. § 158(c)(1). This is accomplished through the timely filing of "a statement of election that conforms substantially to the appropriate Official Form." Fed. R. Bankr. P. 8005(a)(1). The Advisory Committee Note to Rule 8005 instructs that, "[f]or appellants, the statement is included in the Notice of Appeal Official Form." Merging the foregoing together, this Court's jurisdiction to hear an appeal from a bankruptcy court depends on whether: (1) the order being appealed is within the Court's statutory jurisdiction; and (2) the parties have elected to invoke such jurisdiction.

Both requirements are satisfied in this case. Ms. Schweigert appeals from the final order entered by the bankruptcy court confirming Mr. Schweigert's Chapter 13 plan and, in her Notice of Appeal, specifically invoked this Court's appellate jurisdiction. (Docs. 1 at 3; 1-4; 4 at 6.) Consequently, this Court possesses the jurisdiction necessary to adjudicate this appeal.

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STANDARD OF REVIEW

Before proceeding to the merits, this Court must determine the standard of review applicable to the lower court rulings at issue. When acting in its appellate capacity under 28 U.S.C. § 158(c)(1), this Court reviews legal conclusions de novo and factual conclusions for clear error. In re Olshan, 356 F.3d 1078, 1083 (9th Cir. 2004). De novo review requires this Court to "consider a matter anew, as if it has not been heard before, and as if no decision had been rendered previously." In re Smith, 435 B.R. 637, 643 (B.A.P. 9th Cir. 2010).² Clear error review, on the other hand, is "highly deferential" and reversal is only proper if the Court has "a definite and firm conviction that a mistake has been committed." In re Sussex, 781 F.3d 1065, 1071 (9th Cir. 2015).

The standard of review applied to mixed questions of law and fact presents a more difficult judicial quandary. See, e.g., U.S. Bank Ass'n ex rel. CWCapital Asset Mgmt. LLC v. Village at Lakeridge, LLC, 138 S.Ct. 960 (2018). Mixed questions of law and fact are those which require the Court to apply an established set of facts to an undisputed rule of law. Id. (citing Pullman-Standard v. Swift, 456 U.S. 273, 289 n.19 (1982)). Further complicating the matter, "[m]ixed questions

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are not all alike," and some are properly afforded the more deferential clear error review, while others must be reviewed de novo "without the slightest deference." Id. at 965.

The correct "standard of review for a mixed question all depends—on whether answering it entails primarily legal or factual work." Id. at 967. For predominately legal endeavors, such as "when applying the law involves developing auxiliary legal principles of use in other cases," de novo review must be undertaken. Id. When the Court embarks on a fact-based journey, however, requiring it "to marshal and weigh evidence, make credibility judgments, and otherwise address . . . multifarious, fleeting, special, narrow facts that utterly resist generalization," clear error review is warranted. Id.

The following legal principles can be summarized as follows. Where an appellant takes issue with the lower court's factual conclusions, a question of fact is presented that this Court must review for clear error. Where an appellant takes issue with the lower court's legal conclusions, a question of law is presented that this Court must review de novo. Where an appellant takes issue with the lower court's comparison of the facts to the law (or vice versa), a mixed question of law and fact is presented and this Court will only review for clear error if resolution of the question depends more on an interpretation of the facts than the law.

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The Court does not say all of this for nothing. Instead, such a...