Den Beste et al v. Burchard et al

Filing 17

ORDER by Judge Edward M. Chen Granting 7 Appellee's Motion to Dismiss for Mootness and Lack of Standing. (Attachments: # 1 Certificate/Proof of Service). (emcsec, COURT STAFF) (Filed on 12/21/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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DEN BESTE, et al.,
Appellants,

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v.
BURCHARD, et al.,
Appellees.

ORDER GRANTING APPELLEE’S
MOTION TO DISMISS FOR
MOOTNESS AND LACK OF
STANDING
Docket No. 7

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For the Northern District of California

United States District Court

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Case No. 15-cv-05662-EMC

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Appellants in this case, Paul and Melody Den Beste (“the Debtors”), appeal the November

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18, 2015, Final Decree of the bankruptcy court, which closed the case, discharged the Trustee, and

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abandoned all unadministered assets to the Debtors. See 11 U.S.C. § 350 (a) (“After an estate is

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fully administered and the court has discharged the trustee, the court shall close the case.”); 11

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U.S.C. § 554(c) (“Unless the court orders otherwise, any property scheduled under section

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521(a)(1) of this title not otherwise administered at the time of the closing of a case is abandoned

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to the debtor and administered for purposes of section 350 of this title.”). After filing the instant

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appeal, the Debtors also filed a motion to reopen in the bankruptcy court. Docket No. 7-2 Ex. D.

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The Court denied the motion, finding that it would be a “pointless exercise,” given the fact that the

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estate was “hopelessly insolvent” and all remaining assets abandoned to the Debtors and thus

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deemed administered. Docket No. 7-2 Ex. E. Appellees, Trustees David Burchard and Jeffry

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Locke, have moved to dismiss the appeal as moot and for lack of standing. Docket No. 7

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(“Motion”). The Court GRANTS the motion.

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The Ninth Circuit has long held that “[a]ppellate standing requires that a party be directly

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and adversely affected by the order of the bankruptcy court – that it diminish the appellant’s

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property, increase its burdens, or detrimentally affect its rights.” In re Thorpe Insulation Co., 677

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F.3d 869, 884 (9th Cir. 2012) (citing Duckor Spradling & Metzger v. Baum Trust (In re P.R.T.C.,

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Inc.), 177 F.3d 774, 777 (9th Cir.1999)). The bankruptcy court’s purely administrative order

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closing the case, at the conclusion of protracted litigation, did none of these things. The Debtors’

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estate was, as the bankruptcy court noted, already “hopelessly insolvent.” Indeed, because upon

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the closing of a bankruptcy case, any remaining assets are abandoned to the debtor, the Final

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Decree could only have benefitted the Debtors in this case – it did not detrimentally affect the

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Debtors’ rights.

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The Debtors do not meaningfully dispute any of these points. Instead, the Debtors make a
number of unsubstantiated allegations that various parties, including the bankruptcy judge in the

and conspiracy” to commit fraud through their conduct of the present case. Docket No. 14

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For the Northern District of California

present case, as well as a number of the lawyers involved in the litigation, have “acted in collusion

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United States District Court

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(“Response”) at 7. The Debtors also ask that this case “be transferred to a true Article III Court

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presided over by a true Article III Judge who is not and never has been a member of the STATE

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BAR OF CALIFORNIA,” as the Debtors appear to suggest that any member of the California Bar

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will be necessarily tainted by these purported fraudulent acts. Response at 2. Not only are

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Debtors allegations entirely irrelevant to the question of their standing to appeal the Final Decree,

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but they are also altogether incredible. Indeed, in denying discharge in this case, the bankruptcy

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court found that the Den Bestes had themselves engaged in fraud when they “knowingly and

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fraudulently filed false schedules under oath with the intent to thwart [a creditor] in her efforts to

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enforce the judgments lawfully assigned to her and with the intent to conceal material assets from

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her.” In re Den Beste, No. BR 10-13558, 2013 WL 1703391, at *4 (N.D. Cal. Apr. 19, 2013).

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That determination was affirmed on appeal both by this Court and by the Ninth Circuit. In re Den

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Beste, 586 F. App’x 348, 349 (9th Cir. 2014).

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It is apparent that the Debtors’ instant appeal is merely an attempt to relitigate issues

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already settled. This long-running case has been thoroughly litigated, and the decisions of the

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bankruptcy court have been repeatedly affirmed on appeal by this Court, by the Bankruptcy

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Appellate Panel, and by the Ninth Circuit. The Debtors have no standing to appeal the bankruptcy

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court’s final decree. Accordingly Appellees’ motion to dismiss is GRANTED. The Clerk is

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instructed to enter judgment and close the file.

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This order disposes of Docket No. 7.

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IT IS SO ORDERED.

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Dated: December 21, 2016
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EDWARD M. CHEN
United States District Judge

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For the Northern District of California

United States District Court

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