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Lankford v. Wagner

United States Court of Appeals, Tenth Circuit

April 7, 2017

DAVID LANKFORD; LEE ANN LANKFORD, Plaintiffs-Appellants,
v.
JUDITH WAGNER, Chapter 11 Trustee of the bankruptcy estate of the Vaughan Company Realtors; ARLAND & ASSOCIATES, LLC; JAMES A. ASKEW; EDWARD A. MAZEL; DANIEL WHITE, of Askew & Mazel, LLC, Defendants-Appellees.

         Appeal from the United States District Court for the District of New Mexico (D.C. No. 1:15-CV-01013-JCH-LF)

         Submitted on the briefs:[*]

          David Lankford and Lee Ann Lankford, Pro Se.

          Briggs Cheney, Joshua A. Allison, Sheehan & Sheehan, P.A., Albuquerque, New Mexico, for Judith Wagner, James A. Askew, Edward A. Mazel, and Daniel White, Defendants-Appellees.

          Terry R. Guebert, Elizabeth M. Piazza, Guebert Bruckner P.C., Albuquerque, New Mexico, for Arland & Associates, L.L.C., Defendant-Appellee.

          Before KELLY, MATHESON, and McHUGH, Circuit Judges.

          McHUGH, Circuit Judge.

         David and Lee Ann Lankford filed this lawsuit against a bankruptcy trustee and her counsel without first applying for and receiving permission under Barton v. Barbour, 104 U.S. 126 (1881), and its progeny (the "Barton doctrine"). The district court concluded that Barton barred the suit and dismissed for lack of subject matter jurisdiction. We affirm.

         I. Background

         The Lankfords unwittingly invested in a Ponzi scheme operated by Vaughan Company Realtors (VCR), wherein investors paid money to VCR in return for interest-bearing promissory notes. After the Ponzi scheme collapsed, VCR filed for bankruptcy under Chapter 11 of the Bankruptcy Code. Unlike many others, the Lankfords actually profited from their investment. So the court-appointed trustee of VCR's bankruptcy estate, Judith Wagner, brought an adversary proceeding against them in the United States Bankruptcy Court for the District of New Mexico (the "adversary proceeding"). Through this and related "clawback" proceedings, the trustee sought to avoid, or undo, pre-bankruptcy fraudulent transfers and thus recoup fictitious profits from investors with net gains for the benefit of all of VCR's creditors.

         The Lankfords agreed they owed some amount to the estate but disagreed vehemently with the trustee's calculations, alleging an overstatement of about $4, 000. They went so far as to accuse the trustee of extortion, incompetence, and fraud, but the bankruptcy court twice denied formal requests under Barton to file counterclaims on these grounds. Ultimately, the bankruptcy court accepted the trustee's figure of $45, 939.32 for the Lankfords jointly and $21, 465.07 for Mr. Lankford individually-entering summary judgment in those amounts. The Lankfords then moved to vacate summary judgment under Federal Rule of Civil Procedure 60(b)(3) and (d)(3), repeating earlier allegations that the trustee engaged in fraud by deliberately miscalculating the amount owed. The bankruptcy court denied their motion.

         The Lankfords appealed the order denying the motion to vacate, but not the preceding rulings (i.e., the summary judgment order itself or the two denials of requests to file counterclaims per Barton). The district court affirmed. The Lankfords believed the court system was engaged in a conspiracy against them, such that a further appeal would be fruitless; accordingly, they did not appeal the district court's decision in the adversary proceeding. Instead, the Lankfords filed the underlying lawsuit against the trustee and her counsel, accusing them of committing fraud and violating criminal statutes during the adversary proceeding. See Aplt. Opening Br. at 54. The magistrate judge concluded that the Barton doctrine precludes those claims and, in her Proposed Findings and Recommended Disposition (PFRD), recommended dismissal under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. The Lankfords objected to the PFRD, complaining generally of judicial bias, cronyism, corruption, and a conspiracy. The district court noted the lack of specific objections, adopted the PFRD, and dismissed the case.

         Proceeding pro se, the Lankfords filed this appeal, raising ten issues relating to the applicability of the Barton doctrine, the propriety of the bankruptcy court's summary judgment ruling in the adversary proceeding, purported judicial misconduct, and alleged violations of criminal statutes.[1] Most are not properly before us. Having chosen not to appeal the summary judgment ruling in the adversary proceeding, the Lankfords cannot circumvent appellate procedural rules simply by filing a separate proceeding to collaterally attack that judgment. And the district court aptly explained why judicial misconduct and alleged criminal violations are not proper areas of inquiry for a civil lawsuit by a private citizen against the trustee and her counsel. This leaves only one question: Does the Barton doctrine preclude the Lankfords from filing this lawsuit against the bankruptcy trustee and her attorneys, given the Lankfords' failure to seek and receive permission from the bankruptcy court? It does.

         II. ...


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