Davis v. Shepard (In Re Strickland & Davis International, Inc.)

612 F. App'x 971
CourtCourt of Appeals for the Eleventh Circuit
DecidedMay 11, 2015
Docket14-13104
StatusUnpublished
Cited by8 cases

This text of 612 F. App'x 971 (Davis v. Shepard (In Re Strickland & Davis International, Inc.)) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis v. Shepard (In Re Strickland & Davis International, Inc.), 612 F. App'x 971 (11th Cir. 2015).

Opinion

PER CURIAM:

This appeal arises from the Chapter Seven bankruptcy of appellant Strickland and Davis International, Inc. (“Strickland” or “the Strickland Corporation”). Appellants Strickland, Roy Davis, Voncile Davis, Cindy Taylor, and Melissa Terrell all seek to appeal an order of the bankruptcy court affirming the Final Report of Strickland’s bankruptcy estate trustee, Tazewell T. Shepard, III (the “Trustee”). The district court found appellants’ notices of appeal to be untimely and insufficient, and consequently dismissed them for .lack of jurisdiction. Alternatively, the court also dismissed on the ground of equitable mootness. We disagree that all of the appeal notices were untimely, 1 but we do agree that they were equitably moot. We therefore affirm.

I. BACKGROUND

In April 1996, Strickland entered into a joint venture with Samara Consultant Group (“Samara”) to pursue grain sales in the Republic of Yemen, with the parties agreeing to split evenly any profits resulting from their business endeavors. At some point thereafter, Strickland contracted with the Republic of Yemen for the delivery of grain, which contract the Republic subsequently breached. Despite obtaining an arbitration award in its favor from the Grain and Feed Trade Association in London for $27.1 million, Strickland ultimately settled its claim against the Republic for $16,325 million.

Strickland forwarded $1 million of the settlement recovery to Samara. As an equal joint venture partner, Samara felt itself entitled to a greater share, and so filed a breach of contract lawsuit in the Northern District of Alabama in 2002 (the “breach of contract action” or “contract action”). Two years later, on April 21, 2004, a jury found in favor of Samara, awarding it $1,075,851.37. Then, upon the recommendation of a magistrate judge, the district court imposed a constructive trust on proceeds Roy Davis had received from Strickland’s settlement with the Republic of Yemen, even though Davis had earlier been dismissed from the contract action, based on a concern that the transfer of funds was potentially fraudulent.

In November 2004, the district court entered a final judgment reflecting the jury’s verdict and pre-judgment interest, which it later amended by consent of the parties. The amended judgment required immediate payment into the court’s registry of $250,000, with the remainder of the judgment due within thirty days. The amended judgment further provided that, upon payment of a 10% supersedeas bond, the judgment’s execution would be automatically stayed pending the outcome of an appeal to this Court.

Roy Davis made the initial $250,000 payment to the district court’s registry but, facing a liquidity crisis, he struggled to pay the remainder and ultimately filed for Chapter 11 bankruptcy. Eventually— more than two years later — the parties reached an agreement that required Roy and Voncile Davis to convey to the district court the mortgage on their property, which was worth more than $1.5 million at the time.

Amid and following the parties’ payment negotiations, a complicated web of appeals, *973 remands, and motions occurred, none of which are germane to the present appeal. The important takeaway from the considerable procedural history is that, in the breach of contract action, the district court dissolved the constructive trust placed on assets that Roy Davis had received from the Yemeni settlement, while the underlying judgment against Strickland, against which Davis conveyed to the court $250,000 and a mortgage, remained in place.

The next important development came in January 2008, when Strickland filed a Chapter Seven bankruptcy petition (the “Chapter Seven case”). Because the breach of contract action was still ongoing, the district court in that case and the bankruptcy court in the Chapter Seven case issued orders noting concurrent jurisdiction over the parties’ claims. Later, in November 2010, the district court in the breach of contract action granted summary judgment in favor of the Trustee — who had been substituted as the plaintiff upon his appointment as trustee of Strickland’s bankruptcy estate — and referred the case to the bankruptcy court for further proceedings. The losing parties — Roy Davis, Voncile Davis, Cindy Taylor, Melissa Terrell (the “Davis defendants”) — appealed the summary judgment order to this Court, but we dismissed the appeal as untimely.

Thus, when the bankruptcy court received the case with the district court’s summary judgment ruling intact, it ordered the clerk of the district court to “disburse and remit” to the Trustee the $250,000 deposited into its registry by Roy Davis. The bankruptcy court further ordered that, “in the event of a ruling” by this Court on an intervening motion for reconsideration filed by the Davis defendants, the clerk of the district court must “immediately transfer and assign to the Trustee the real estate mortgage given by Roy Davis and his wife, Voncile Davis, against their residence in favor of the [district court] in the amount of $1,134,622.33.” We denied the Davis defendants’ motion for reconsideration on September 28, 2011, and the district court conveyed to the Trustee the Davis’s mortgage soon thereafter.

Following a number of hearings regarding attorneys’ fees and the Trustee’s compensation, in March 2012 the Trustee submitted his Final Report to the bankruptcy court. In his report the Trustee (1) proposed to transfer to Samara — Strickland’s only creditor by virtue of the judgment in the breach of contract action — the mortgage conveyed to him by Roy and Voncile Davis via the clerk of the district court and (2) requested compensation for his administration of Strickland’s bankruptcy estate. No objections having been filed, the bankruptcy court affirmed the Trustee’s Final Report on May 1, 2012.

But then, on May 10, 2012, Roy Davis— in both his individual capacity and on behalf of Strickland 2 — filed a notice of appeal, to the district court, of the bankruptcy court’s May 1 order. Therein, Davis alleged multiple grounds for appeal, including: the right to an automatic stay in the bankruptcy court by virtue of status as a “defendant in the underlying case”; questions regarding the finality and status of orders and motions before the bankruptcy and district courts; suspicion of a fraud committed on the court by A.M. Samara; and assertions that the “settlement and compromise is unconstitutional” and violates the Patriot Act.

The bankruptcy court notified Roy Davis that the May 10 notice of appeal was *974 insufficient for (1) lack of a certificate of service, (2) lack of a signature by the movant, and (3) lack of an accompanying “Official Form 17[.]” The court allowed Davis fourteen days from entry of the order to correct the deficiencies. On May 29, 2012, Davis submitted three sets of .documents: first, notices of appeal on behalf of Strickland signed pro se by Roy Davis, Voncile Davis, Cindy Taylor, and Melissa Terrell (the “Strickland Notices”); second, notices of appeal for Roy Davis, Voncile Davis, Cindy Taylor, and Melissa Terrell in their individual capacities (the “Individual Capacity Notices”); and third, certificates of service signed by Roy Davis, Voncile Davis, Cindy Taylor, and Melissa Terrell.

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Bluebook (online)
612 F. App'x 971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-v-shepard-in-re-strickland-davis-international-inc-ca11-2015.