Hardin v. Womack et al

Filing 13

MEMORANDUM AND ORDER. Judge Kirscher's Order and Memorandum of Decision of 3/21/14 are AFFIRMED. Signed by Judge Sam E Haddon on 6/16/2015. (ELL, )

FILED
JUN 16 2015
Cletk. U.S. District Court
District Of Montana
Helena

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BUTTE DIVISION
In re:
Bankruptcy Case No. 13-60413
HARDIN & COMPANY, LTD.,
Debtor.

DENNIS HARDIN,
No. CV-14-35-BU-SEH
Appellant,
vs

MEMORANDUM AND
ORDER

JOSEPH V. WOMACK, et al.
Appellee.

BACKGROUND
Debtor, Hardin & Company, Ltd. is a real estate firm, owned by Dennis
Hardin ("Hardin"). Pre-bankruptcy, Hardin listed for sale property of two
veterinarians (Stafford and Longren, together "Veterinarians"). Hardin asserted it

marketed the property. The listing expired. The property was later sold. Hardin
sued the Veterinarians for a commission from the sale in Montana State Court.
The case was dismissed on summary judgment in favor of the Veterinarians. The
Veterinarians also were awarded fees by the State Court. No judgment was
entered. Hardin then filed Chapter 7 bankruptcy. Hardin, as a creditor of the
bankrupt, sought to have the estate's commission claim - the same claim dismissed
by the State Court - abandoned as an estate asset. The Trustee refused. Hardin
next offered to buy the claim from the Trustee. The Trustee declined. This appeal
followed.

JURISDICTION
This Court has appellate jurisdiction to review final orders of the
Bankruptcy Court under 28 U.S.C. § 158(a).

ISSUE ON APPEAL
This appeal raises a singe question: Did the Bankruptcy Court err in
denying Creditor Dennis Hardin's petition to require the bankruptcy trustee to
abandon the real estate commission claim against Stafford and Longren? The
answer is "no."

STANDARD OF REVIEW
A bankruptcy court's decision to authorize or deny abandonment of the
2

estate asset is reviewed for an abuse of discretion. 1
DISCUSSION
An abuse of discretion occurs if a decision is based upon an incorrect

conclusion of law or the record contains no evidence on which the bankruptcy
court "rationally could have based that decision." 2
The Bankruptcy Court did not abuse its discretion in denying the petition to
abandon. The evidence introduced by the Trustee in opposing abandonment was
significant, including that the claim had a very small chance of success on the
merits, that the claim, if abandoned, would revert to the estate and not to Hardin
personally, and would not allow Hardin to step into the Debtor's shoes, that the
Trustee claimed he would continue to have the obligation to administer the estate
until the bankruptcy was closed, and that further litigation involving the claim
could put the estate at risk of exposure to an award of additional attorney's fees
against the estate. In the end, the Bankruptcy Court concluded that although
declining to abandon the claim was burdensome to the estate, that burden was
offset by the benefits of retention. The record supports the conclusion.

1

See Viet Vu v. Kendall, 245 B.R. 644, 647 (B.A.P. 9th Cir. 2000) (quoting Johnston v.
Webster (In re Johnston), 49 F.3d 538, 540 (9th Cir. 1995).
2

In re Windmill Farms, Inc., 841 F.2d 1467, 1472 (9th Cir. 1988) (quoting Hill v. United
States Immigration & Naturalization Serv. (In re Hill), 775 F.2d 1037, 1040 (9th Cir. 1985)).
3

CONCLUSION
The Bankruptcy Court did not abuse its discretion in refusing to order the
Trustee to abandon the State Court claim.

ORDER
Judge Kirscher's Order and Memorandum of Decision of March 21, 2014,
are AFFIRMED.'
DATED this

d..
/6

day of June, 2015.

United States District Judge

3

See In re Hardin & Company, Ltd, Bankr. Case No. 13-60413-7, Docs. 106 and 107.
4