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Opinion 213

Case Name: 

Mosier v. Schwenke (In re Dennis L. Carlson, Inc.)

Judge: 
U.S. District Court, Utah
Date: 
Nov-12-1986
Case Number(s): 
86PC-0575
Status: 

APPEAL
Unpublished

Body: 

Shortly before filing a chapter 11 petition on debtor's behalf, debtor's attorney entered into a real property purchase contract with debtor. Under that agreement, attorney paid some cash to debtor, offset some legal fees owed to him by debtor, and agreed to assume debtor's mortgage, which was about to be foreclosed. The contract between debtor and attorney was noted on debtor's schedule of assets. A trustee was appointed for debtor, based on a motion by the mortgage holder on the property, and trustee received an offer to purchase the property from an unrelated party. Debtor's attorney received trustee's motion to approve the sale, and notified trustee of his interest in the property. Trustee filed an adversary action to quiet title to the property, but went forward with the hearing on his motion to approve sale. Attorney did not attend the sale hearing, and the motion to sell was approved. Attorney's motion to vacate the sale approval was denied, and attorney appealed. The district court ruled that attorney's failure to appear at the sale hearing was not due to "excusable neglect." However, the court indicated that the quiet title action had not been tried and that trustee could only sell the estate's interest in the property. Therefore, in order for trustee to convey clear title to the property by sale, trustee needed to pursue the quiet title action, or bring some other proceeding that could establish the respective rights in the subject property. Therefore, the district court stayed the closing of the property sale until attorney's interest in the property, if any, was determined.

Internal Ref: 
Opinion 213
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