Verit Hotel & Leisure (International) Ltd. v. Carway
Verit Hotel & Leisure (International) Ltd. v. Carway
Opinion of the Court
ORDER FROM CHAMBERS
I. INTRODUCTION
This is a bankruptcy appeal. At docket 12, appellant Verit Hotel & Leisure (International) Limited (“Verit Hotel”) files its opening brief. Appellee Randolph J. Haines, Trustee (“Haines”) files his brief at docket 15. Verit Hotel files its reply brief at docket 18. Oral argument has not been requested and would not assist the court. The appeal is now ripe for a decision.
II. BACKGROUND
Verit Industries was a Delaware company with its headquarters in Phoenix. Verit Hotel is a Manx corporation with its headquarters and principal place of business located on the Isle of Man. In October 1992, Verit Industries transferred stock it owned in a Liechtenstein corporation to Verit Hotel. Verit Industries filed for Chapter 11 bankruptcy in December 1994. Haines was appointed Chapter 11 Trustee. Haines filed suit against Verit Hotel on February 8, 1996, seeking to avoid the 1992 stock transfer as a fraudulent convey-
The bankruptcy court found that Car-way’s letter constituted an entry of appearance for himself, individually, and on Verit Hotel’s behalf.
Haines was unable to secure enforcement of the bankruptcy court’s judgment, although suits seeking relief are still pending in The Isle of Man and Liechtenstein. Haines returned to bankruptcy court in 1998 and requested that the court declare Haines held a constructive trust over the Liechtenstein corporation’s stock that was fraudulently conveyed to Verit Hotel in
Verit Hotel, through it attorney, did challenge the jurisdiction in open court and by filing an appeal. Defendant [Verit Hotel] dismissed its appeal and therefore the Bankruptcy Court’s ruling that there was proper service of process and jurisdiction is final and res judica-ta.24
The bankruptcy court also granted Haines a constructive trust in the shares in question.
III. STANDARD OF REVIEW
A bankruptcy court’s findings of fact are reviewed under the clearly erroneous standard.
IV. DISCUSSION
A. Whether the bankruptcy court erred in concluding that Verit Hotel waived its defense of lack of personal jurisdiction
Verit Hotel contends that it was never subject to the bankruptcy court’s jurisdiction. Res judicata applies to a court’s personal jurisdiction ruling when a party has entered an appearance and contested personal jurisdiction.
Many cases establish the rule that once the time for appeal has run, a final judgment of a trial court or .an intermediate appellate court is res judicata without regard to the fact that appeal might have been taken to a higher court. This rule applies equally to failure to take a cross-appeal. It makes no difference that an appeal was attempted but was thwarted by failure to satisfy procedural requirements.31
The Ninth Circuit observes these same principles.
Here, Verit Hotel entered an appearance and contested personal jurisdiction.
B. Whether the bankruptcy court erred in granting Haines a Constructive Trust over the Liechenstein Corporation’s shares
Imposing a constructive trust on fraudulently conveyed property is a well-known and recognized remedy.
Verit Hotel contends that the bankruptcy court lacked in rem jurisdiction over the Liechenstein stock such that its order is without force and effect. This argument lacks merit. A bankruptcy estate includes all of the legal and equitable interests in the debtor’s property “wherever located and by whomever held.”
Finally, Verit Hotel argues that the bankruptcy court erred in granting Haines a constructive trust because an action was already pending on the Isle of Man. However, as Haines persuasively argues, the bankruptcy court’s supplemental judgment did not order any particular disposition of the property or otherwise interfere with pending proceedings on the Isle of Man.
V. CONCLUSION
The court has considered but finds it unnecessary to address any of the parties’ other arguments. For the foregoing reasons, the order of the bankruptcy court is AFFIRMED.
. CR 1. "CR” refers to the docket numbers from the bankruptcy court's file.
. CR 3, 4.
. CR 23, 25.
. Id.
. See CR 74 (letter submitted as unmarked exhibit). The letter is cited or reproduced at several points through the record on appeal. The preceding citation is simply one location in the record on appeal where the letter may be found.
. CR 12, ¶ 5 at 3.
. CR 12.
. CR 13.
. CR 16.
. CR 14.
. CR 18.
. Id.
. Id.
. CR 18, 20.
. CR 20 at 2.
. Id.
. Id.
. CR 31.
. CR 39 at 2.
. CR 56.
. CR 61.
. CR 68.
. CR 90.
. CR 90 at 4.
. CR 90, 100.
. In re Bubble Up Delaware, Inc., 684 F.2d 1259, 1262 (9th Cir. 1982).
. In re Bubble Up Delaware, Inc., supra, 684 F.2d at 1262.
. In re New England Fish Co., 749 F.2d 1277, 1280 (9th Cir. 1984).
. United States v. Van Cauwenberghe, 934 F.2d 1048, 1057-58 (9th Cir. 1991).
. See 18 Charles Alan Wright, Arthur R. Miller, and Edward H. Cooper, Federal Practice and Procedure, § 4433 at 305-07 (1981 & Supp. 1999) (“Wright’’).
. Wright, supra, § 4433 at 305-07.
. See, e.g., United States v. Aranson, 696 F.2d 654, 662-63 (9th Cir. 1983) (issue not appealed from district court is res judicata); Piatt v. MacDougall, 773 F.2d 1032, 1034-35 (9th Cir. 1985) (state judgment entitled to preclu-sive effect where appeal was precluded on procedural grounds).
. CR 18.
. Id.
. CR 31.
. CR 56.
. See, e.g., In re North Amanean Coin & Currency, Ltd., 767 F.2d 1573, 1575 (9th Cir. 1985) (applying Arizona law).
. Fed.R.Civ.P. 54(c).
. See Fed.R.Civ.P. 70; Bankruptcy Rule 7070.
. CR 20 at 2.
. 11 U.S.C. § 541(a).
. 28 U.S.C. § 1334(e).
. See Haines' Brief, docket 15 at 35.
. Hong Kong and Shanghai Banking Corp., Ltd. v. Simon, 153 F.3d 991, 996 (9th Cir. 1998).
. See Haines' Brief, docket 15 at 34-35 n. 12.
. See, e.g., United States v. One 1985 Cadillac Seville, 866 F.2d 1142, 1145 (9th Cir. 1989) (federal court must yield to state court where state court had in rem jurisdiction over res prior to federal court).
Reference
- Full Case Name
- VERIT HOTEL & LEISURE (INTERNATIONAL) LIMITED, an Isle of Man corporation v. John CARWAY, an Irish citizen residing in Portugal Stephen Carway, an Irish citizen residing in Ireland Ridgevale International Limited, a British Virgin Islands corporation Touristic Club International Aktiengesellschaft and Randolph J. Haines, trustee
- Cited By
- 1 case
- Status
- Published