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World Fuel Services, Inc. v. Andrew Martin, 18-35164 (2019)

Court: Court of Appeals for the Ninth Circuit Number: 18-35164 Visitors: 1
Filed: May 15, 2019
Latest Update: Mar. 03, 2020
Summary: FILED NOT FOR PUBLICATION MAY 15 2019 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT WORLD FUEL SERVICES, INC., No. 18-35164 Plaintiff-counter- D.C. No. 3:16-cv-02303-MO defendant-Appellant, v. MEMORANDUM* ANDREW M. MARTIN, Defendant-counter-claimant- Appellee. Appeal from the United States District Court for the District of Oregon Michael W. Mosman, District Judge, Presiding Submitted May 13, 2019** Portland, Oregon Before: N.R. SMITH, WATFORD,
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                                                                            FILED
                           NOT FOR PUBLICATION
                                                                            MAY 15 2019
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT


WORLD FUEL SERVICES, INC.,                       No.   18-35164

              Plaintiff-counter-                 D.C. No. 3:16-cv-02303-MO
              defendant-Appellant,

 v.                                              MEMORANDUM*

ANDREW M. MARTIN,

              Defendant-counter-claimant-
              Appellee.


                  Appeal from the United States District Court
                           for the District of Oregon
                  Michael W. Mosman, District Judge, Presiding

                             Submitted May 13, 2019**
                                 Portland, Oregon

Before: N.R. SMITH, WATFORD, and R. NELSON, Circuit Judges.




      *
             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).
       World Fuel Services, Inc. appeals the district court’s order dismissing with

prejudice its fraudulent conveyance claims against Andrew Martin for lack of

standing. We have jurisdiction under 28 U.S.C. § 1291, and we reverse.

       “Congress did not give the bankruptcy court exclusive jurisdiction over all

controversies that in some way affect the debtor’s estate.” Chugach Forest Prod.,

Inc. v. N. Stevedoring & Handling Corp. (In re Chugach Forest Prod., Inc.), 
23 F.3d 241
, 245 (9th Cir. 1994) (citation omitted); see 28 U.S.C. § 1334(b) (“[T]he

district courts shall have original but not exclusive jurisdiction of all civil

proceedings . . . arising in or related to cases under title 11.”). “[I]t is well settled

that a bankruptcy trustee has no standing generally to sue third parties on behalf of

the estate’s creditors.” Smith v. Arthur Andersen LLP, 
421 F.3d 989
, 1002 (9th Cir.

2005) (quotation marks, citation, and alteration omitted). Nor does the automatic

stay apply to suits against non-debtors. Solidus Networks, Inc. v. Excel Innovations

(In re Excel Innovations, Inc.), 
502 F.3d 1086
, 1095 (9th Cir. 2007); cf. Am.

Hardwoods, Inc. v. Deutsche Credit Corp. (In re Am. Hardwoods, Inc.), 
885 F.2d 621
, 625-26 (9th Cir. 1989) (recognizing that the bankruptcy court has no power to

affect the liability or obligations of a debtor’s non-debtor guarantors). Thus, a

bankruptcy trustee has exclusive standing only to the extent the bankruptcy debtor

has an interest in the property allegedly fraudulently conveyed. See In re Heller


                                             2
Ehrman LLP, 
830 F.3d 964
, 969 (9th Cir. 2016) (quoting Begier v. IRS, 
496 U.S. 53
, 58 (1990)); see also Milby v. Templeton (In re Milby), 
875 F.3d 1229
, 1235

(9th Cir. 2017).

      World Fuel’s claims are based on an allegedly fraudulent transfer of

property between Evergreen Holdings—Evergreen International Aviation’s

(Aviation) parent company, which is not in bankruptcy—and Martin. The parties

agree that Holdings is the title owner of the property at issue. The Delaware

Bankruptcy Court determined that Aviation’s settlement agreement with Martin

did not independently give Aviation any interest in the property; rather, Aviation’s

claim is limited to an as-yet unresolved equitable interest asserted in the pending

bankruptcy proceeding. Thus, whether Aviation has any interest in the property is a

disputed question of fact.1 Therefore, the district court erred when it determined on

summary judgment that World Fuel lacked standing to bring these claims.

      REVERSED and REMANDED.




      1
        On appeal, Martin asserts Aviation has an interest under an alter-ego theory.
However, that argument was not raised before the district court, and relies on
factual findings that were not made below. We decline to reach this argument on
appeal. Baccei v. United States, 
632 F.3d 1140
, 1149 (9th Cir. 2011) (“[W]e
generally will not consider arguments raised for the first time on appeal.”).
                                          3

Source:  CourtListener

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