Bernadette Chapman v. Karl Anderson

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 6, 2021
• Docket: 20-60009
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION OCT 6 2021 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: BERNADETTE CHAPMAN, No. 20-60009

Debtor, BAP No. 18-1235 ------------------------------

BERNADETTE CHAPMAN, MEMORANDUM*

Appellant,

v.

KARL T. ANDERSON; et al.,

Appellees.

Appeal from the Ninth Circuit Bankruptcy Appellate Panel Taylor, Spraker, and Gan, Bankruptcy Judges, Presiding

Submitted October 4, 2021** Pasadena, California

Before: GRABER and OWENS, Circuit Judges, and BREYER,*** District Judge.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Charles R. Breyer, United States District Judge for the Northern District of California, sitting by designation. Debtor Bernadette Chapman timely appeals the judgment of the Bankruptcy

Appellate Panel (“BAP”), which affirmed the bankruptcy court’s order approving

Trustee Karl Anderson’s resolution of her adversary proceeding. Reviewing de

novo the BAP’s decision that the bankruptcy court did not abuse its discretion in

approving the settlement, Wolfe v. Jacobson (In re Jacobson), 676 F.3d 1193, 1198

(9th Cir. 2012), we affirm.

We agree with the BAP, for the reasons that it gave, that Debtor has standing

to appeal the bankruptcy court’s order.

The bankruptcy court did not abuse its discretion in approving the Turoci

Firm’s employment as special counsel for Trustee in settlement negotiations.

Although the law firm earlier had represented Debtor in the adversary proceeding,

11 U.S.C. § 327(e) expressly provides that a Chapter 7 trustee may employ an

attorney that has represented the debtor if (1) the employment is for a specialized

purpose other than representing the trustee in conducting the case; (2) the

employment is in the best interest of the estate; (3) the attorney does not represent

or hold any interest adverse to the debtor with respect to the specialized purpose

for which the attorney is employed; and (4) the court approves the employment.

The bankruptcy court permissibly concluded that those requirements were met and

that, for the scope of the specialized representation, Debtor and Trustee had

2 identical interests. Although Debtor disagrees with the value of the settled claim,

she points to no evidence of any conflict of interest between her and Trustee. Nor

does she cite any evidence that the Turoci Firm used any of her confidential

information in the negotiation of the settlement. Finally, because the bankruptcy

court here fully considered the law firm’s earlier representation of Debtor, the

BAP’s decision in Tevis v. Wilke, Fleury, Hoffelt, Gould & Birney, LLP (In re

Tevis), 347 B.R. 679, 687–95 (B.A.P. 9th Cir. 2006), and Debtor’s arguments

based on the California Rules of Professional Conduct stemming from In re Tevis,

are inapt.

AFFIRMED.