Kuity Corporation v. Leslie Gladstone

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 26, 2021
• Docket: 20-56120
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 26 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

In re: POSIBA, INC., No. 20-56120

Debtor, D.C. No. ______________________________ 3:19-cv-01529-JLS-MDD

KUITY CORPORATION, MEMORANDUM* Appellant,

v.

LESLIE T. GLADSTONE, Ch. 7 Trustee; CERTAIN UNDERWRITERS AT LLOYD'S, LONDON,

Appellees.

Appeal from the United States District Court for the Southern District of California Janis L. Sammartino, District Judge, Presiding

Submitted October 22, 2021** Pasadena, California

Before: CALLAHAN and FORREST, Circuit Judges, and AMON,*** District

* 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 Carol Bagley Amon, United States District Judge for Judge.

Kuity Corporation (“Kuity”) appeals the district court’s order dismissing

Kuity’s bankruptcy appeal under 11 U.S.C. § 363(m). We have jurisdiction under

28 U.S.C. § 158(d). Reviewing the district court’s decision de novo, In re

Marshall, 721 F.3d 1032, 1038–39 (9th Cir. 2013), and the bankruptcy court’s

factual findings for clear error and its conclusions of law de novo, In re Berkeley

Del. Ct., LLC, 834 F.3d 1036, 1039 (9th Cir. 2016), we affirm.

1. Kuity contends that the district court erred by dismissing its appeal

under § 363(m) because the bankruptcy court never made a good faith finding in

connection with the approval of a motion to sell the debtor’s interest in an

insurance policy. Section 363(m) provides in relevant part that:

The reversal or modification on appeal of an authorization . . . of a sale or lease of property does not affect the validity of a sale or lease under such authorization to an entity that purchased or leased such property in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and such sale or lease were stayed pending appeal.

11 U.S.C. § 363(m).1

Kuity’s argument is unpersuasive. A court’s findings “may be stated on the

record after the close of the evidence or may appear in an opinion or a

the Eastern District of New York, sitting by designation. 1 It is undisputed that Kuity did not seek a stay of the order approving the sale pending appeal.

2 memorandum of decision filed by the court.” Fed. R. Civ. P. 52(a)(1); see also

Fed. R. Bankr. P. 7052, 9014. The bankruptcy judge explicitly stated, “I’m

making a good faith finding,” after hearing testimony regarding the sale, and noted

that neither party engaged in fraud or collusion in connection with the sale. The

order approving the sale motion also, at minimum, implies a good faith finding

because the sale motion stated the purchase price was fair and reasonable, and the

overbid agreement—incorporated by reference in the sale order—conditioned the

sale on the bankruptcy court’s good faith finding under § 363(m). See In re

Onouli-Kona Land Co., 846 F.2d 1170, 1174 (9th Cir. 1988) (“Ninth Circuit

authority . . . does not require the bankruptcy court to make an explicit finding of

good faith.”); see also In re Ewell, 958 F.2d 276, 281 (9th Cir. 1992). This was

sufficient to satisfy the requirements of § 363(m).

2. Kuity next argues that even if the bankruptcy court made a good faith

finding, it is clearly erroneous. But as the district court found, Kuity waived this

issue by failing to raise it in the initial appeal to the district court. See, e.g., In re

Nelson, 561 F.2d 1342, 1348 (9th Cir. 1977) (explaining that a failure to raise an

issue in the lower courts generally renders that issue waived on appeal). Kuity

does not challenge the district court’s holding on this point in its appeal to this

court, and thus has waived any argument that the district court erred in this respect.

Alaska Ctr. for the Env’t v. U.S. Forest Serv., 189 F.3d 851, 858 n.4 (9th Cir.

3 1999) (“Arguments not raised in opening brief are waived.”).

3. Because the district court did not err in holding that Kuity’s appeal

was statutorily moot under § 363(m), we need not reach Kuity’s remaining

arguments. For this same reason, the motions to strike filed by appellee Certain

Underwriters at Lloyd’s London (Dkt. Nos. 15–16) are denied as moot.

AFFIRMED.