United States District Court, D. Colorado
IN RE DAVID LEE SMITH, and MARY JULIA HOOK, Debtors.
DENNIS W. KING, Trustee, and COLORADO DEPARTMENT OF REVENUE, Appellees. DAVID LEE SMITH, and MARY JULIA HOOK, Appellants,
RAYMOND P. MOORE United States District Judge
matter is before the Court on Appellants'
“Emergency Motion to Enjoin Sale of Home Pending Appeal
of Closure of Chapter 7 Bankruptcy Case” (the
“Motion”) (ECF No. 27) seeking to enjoin the sale
of certain property commonly known as 5800 East 6th Avenue,
Denver, Colorado 80220 (the “Property”). Upon
consideration of the Motion and relevant parts of the court
record, and being otherwise fully advised, the Motion is
matter arises from Appellants' appeal of adverse rulings
issued in their bankruptcy case (No. 17-16354-TBM) and in
Adversary Proceeding No. 18-01265-TBM (the “Adversary
Proceeding”). In the Motion before the Court,
Appellants seek to enjoin the sale of the Property pursuant
to an Order of Foreclosure and Judicial Sale entered by this
Court in Civil Action No. 14-cv-00955-RM-SKC (the
“Foreclosure Order”). Appellants support this
Motion with assertions of what allegedly
transpired in Civil Action No. 14-cv-00955 and in the cases
before the Bankruptcy Court,  providing select excerpts of
filings made in some of these cases.
the bankruptcy case, Appellants assert (1) the Bankruptcy
Trustee filed a Final Report; (2) Appellants objected; and
(3) the Bankruptcy Court accepted the Trustee's Final
Report. Specifically, in its Order of July 17, 2018, setting
a non-evidentiary hearing on the Final Report and
Appellants' Objection, the Bankruptcy Court stated:
The record before the Court reveals a bankruptcy estate that
is hopelessly insolvent. Thus, the Debtors' standing to
object to the administration of the case and the
Trustee's Final Report is in serious doubt.
(ECF No. 11-3, p. 51.) After hearing and briefing, the
Bankruptcy Court overruled the Appellants' Objection and
accepted the Trustee's Final Report. Among other things,
the Bankruptcy Court found the estate was insolvent and
Appellants failed to meet their burden of showing they have
standing to object. (ECF No. 11-1, p. 30.) Appellants assert
the Bankruptcy Court's rulings on these issues are
the Adversary Proceeding, Appellants appeal the Bankruptcy
Court's Order granting the Colorado Department of
Revenue's (“CDOR”) motion to dismiss. In its
Order of February 5, 2019, the Bankruptcy Court found, among
other things, that Appellants failed to present sufficient
factual allegations to state any plausible claim for relief.
appeal followed the Bankruptcy Court's issuance of its
injunctive relief may be had, the movant must establish:
“‘(1) a substantial likelihood of prevailing on
the merits; (2) irreparable harm unless the injunction is
issued; (3) that the threatened injury outweighs the harm
that the preliminary injunction may cause the opposing party;
and (4) that the injunction, if issued, will not adversely
affect the public interest.'” Diné
Citizens Against Ruining our Environment v. Jewell, 839
F.3d 1276, 1281 (10th Cir. 2016) (quoting Davis v.
Mineta, 302 F.3d 1104, 1111 (10th Cir. 2002)). The Tenth
Circuit no longer applies a “modified
test” for determining preliminary injunctive
relief, finding it inconsistent with the Supreme Court's
decision in Winter v. Natural Resources Defense Council,
Inc., 555 U.S. 7 (2008). Diné Citizens,
839 F.3d at 1282.
addition, three types of preliminary injunction are
disfavored: “(1) preliminary injunctions that alter the
status quo; (2) mandatory preliminary injunctions; and (3)
preliminary injunctions that afford the movant all the relief
that it could recover at the conclusion of a full trial on
the merits.” Fundamentalist Church of Jesus Christ
of Latter-Day Saints v. Horne, 698 F.3d 1295, 1301 (10th
Cir. 2012) (citation omitted). Should a preliminary
injunction fit within one of these types, the injunction
“must be more closely scrutinized to assure that the
exigencies of the case support the granting of a remedy that
is extraordinary even in the normal course.” O
Centro Espirita Beneficiente Uniao Do Vegetal v.
Ashcroft, 389 F.3d 973, 975 (10th Cir. 2004) (en banc).
“Because a preliminary injunction is an extraordinary
remedy, the movant's right to relief must be clear and
unequivocal.” Diné Citizens, 839 F.3d
at 1281 (citation and quotation marks omitted).