United States District Court, E.D. Arkansas, Western Division
MICHAEL W. WALKER APPELLANT
FREDERICK S. WETZEL, III, et al. APPELLEES
OPINION AND ORDER
KRISTINE G. BAKER UNITED STATES DISTRICT JUDGE.
13, 2017, the United States Bankruptcy Court for the Eastern
District of Arkansas entered an order denying debtor Michael
W. Walker's pro se motion to clarify and strike
(Dkt. No. 23-1, at 46). Mr. Walker filed a notice of appeal
from that order on July 28, 2017 (Dkt. No. 1). On September
22, 2017, the Bankruptcy Court entered an order denying
debtor Mr. Walker's pro se objection to motion
to withdraw as counsel and Mr. Walker's pro se
supplemental objection (Dkt. No. 23-1, at 55). Mr. Walker
filed a Notice of Appeal from that order on October 18, 2017.
Walker v. Wetzel, No. 4:17-cv-00675-KGB, Dkt. No. 1
(E.D. Ark. Oct. 18, 2017). The second appeal was consolidated
with the first by an order from this Court (Dkt. No. 29). The
Court has jurisdiction to hear these appeals pursuant to 28
U.S.C. § 158(a). For the reasons discussed below, the
Court dismisses without prejudice Mr. Walker's appeal.
the history of this case appears somewhat convoluted, the
facts surrounding the issues on appeal are straightforward.
This case arises from a Chapter 13 bankruptcy proceeding in
which Mr. Walker filed a voluntary petition on January 8,
2016 (Dkt. No. 23-1, at 2). The bankruptcy filing was
proceeded by an Arkansas state court action in which Dr. Judy
McDonald and other plaintiffs sued Mr. Walker on February 1,
2011, for fraud, breach of fiduciary duty, conversion,
accounting, trespass, and assault (Dkt. No. 24-4, at 2-10).
After discovery, Arkansas Circuit Judge Marcia Hearnsberger
entered a letter order denying plaintiffs' motion for
partial summary judgment and Mr. Walker's motion for
partial judgment on the pleadings (Dkt. No. 24-21, at 3).
Judge Hearnsberger found that the parties were entitled to a
jury trial on certain claims, and that “[a]ll
traditionally equitable issues pled by the parties such as
accounting, attorney's fees and costs, and Dissolution
and Receivership will be determined by the Court.”
trial before a jury, the jury returned a verdict in Dr.
McDonald's favor (Dkt. No. 24-23, at 2). Judge
Hearnsberger issued a judgment on the jury's verdict,
which included the following findings:
1. The Jury found in favor of Plaintiff Spillway Mountain
Village and Resort, LLC (“SMVR”) against [Mr.
Walker] in the amount of $148, 000 on its breach of fiduciary
2. The Jury found in favor of Plaintiff [SMVR] against [Mr.
Walker] in the amount of $148, 000 on its conversion claim;
3. The Jury found in favor of Plaintiff Judy McDonald against
[Mr. Walker] in the amount of $75, 000 on her conversion
claim . . . .
(Id.). The jury also found in favor of Mr. Walker on
Dr. McDonald's claim of assault, and the jury found in
favor of Dr. McDonald on Mr. Walker's counterclaims.
Judge Hearnsberger's judgment also states that
“[w]ith the consent” of Mr. Walker, the claim for
dissolution of SMVR was granted (Id., at 3). Judge
Hearnsberger ordered SMVR dissolved and stated that the
activity of SMVR was limited to acts winding up its affairs
amended judgment on jury verdict was entered on September 17,
2015, which corrected clerical errors in the original
judgment on jury verdict (Dkt. No. 24-24). Then, on December
10, 2015, Judge Hearnsberger entered a final judgment
granting SMVR judgment against Mr. Walker in the amount of
$296, 00.00 and granting Dr. McDonald two judgments against
Mr. Walker, one in the amount of $75, 000.00 and the other in
the amount of $100, 000.00 (Dkt. No. 24-25, at 3). The final
judgment also stated that “[t]his court retains
jurisdiction over the dissolution of [SMVR] to appoint a
receiver and supervise the winding up of its affairs. All
other claims of the parties are dismissed.”
(Id., at 4). On the same day, at the request of Dr.
McDonald and with the consent of Mr. Walker, Judge
Hearnsberger appointed Richard Cox as receiver for SMVR (Dkt.
No. 24-26, at 1).
Walker then filed his voluntary petition for Chapter 13
bankruptcy on January 8, 2016 (Dkt. No. 23-1, at 2). Mr. Cox,
as receiver for SMVR, filed a proof of claim against Mr.
Walker in the amount of $201, 240.00, based on a
“Houseboat Lease Agreement.” (Dkt. No. 24-27, ag
3). Mr. Cox also filed a proof of claim on SMVR's behalf
in the amount of $308, 569, 84 (Dkt. No. 24-28, at 4).
Further, Mr. Cox filed another proof of claim in the amount
of $204, 035.00 against Mr. Walker, again based upon the
Houseboat Lease Agreement (Dkt. No. 24-29, at 3). Dr.
McDonald also filed a proof of claim in the amount of $178,
068.48 against Mr. Walker (Dkt. No. 24-31, at 3). She further
filed a proof of claim in the amount of $227, 792.50 for
“[c]ontribution on Houseboat lease payments” or
alternatively for “lease rejection damages”
against Mr. Walker (Dkt. Nos. 24-32, at 3; 24-33, at 3).
September 2, 2016, the bankruptcy case was converted to a
Chapter 7 bankruptcy (Dkt. No. 23-1, at 21). Then, on January
31, 2017, Chapter 13 Trustee Frederick Wetzel filed a motion
for approval of compromise and settlement (Dkt. No. 23-1, at
24). In this motion, Mr. Wetzel noted that Mr. Walker listed
his ownership share in SMVR at $2, 093, 437.35 but that Dr.
McDonald disputed that Mr. Walker's ownership interest
had value (Dkt. No. 24-39, at 2). Mr. Wetzel further noted
that Mr. Walker “scheduled an appeal of the $471,
000.00 of judgments entered against him in favor of Dr.
McDonald.” (Id.). According to the motion, Mr.
Walker did not timely pursue that appeal (Id., at
3). Mr. Wetzel also noted the claims that SMVR, via
its receiver, Mr. Cox, asserted against Mr. Walker
(Id., at 4). Per the proposed settlement, Mr. Wetzel
agreed to withdraw all of the claims of the estate against
Dr. McDonald and SMVR and to assign the estate's interest
in SMVR to Dr. McDonald (Dkt. No. 24-39, at 4). In exchange,
Dr. McDonald would pay $75, 000.00 to the estate and withdraw
all of her claims and all claims of SMVR against the estate
(Id.). Mr. Wetzel acknowledged Mr. Walker's
asserted claims against Dr. McDonald and SMVR, but Mr. Wetzel
noted that substantial costs would have to be incurred to
pursue those claims and that the estate had no funds for such
costs (Id., at 5). Given these obstacles, Mr. Wetzel
opined that the proposed settlement was in the best interest
of the estate and should be approved (Id.).
hearing was held on the motion for approval of compromise and
settlement before the bankruptcy court (Dkt. No. 23-1). The
bankruptcy court approved the compromise agreement proposed
by Mr. Wetzel (Id., at 12). Regarding the compromise
agreement, the bankruptcy court explained its reasoning as
It's in the best interest of creditors because it appears
as though all creditors are going to get paid. There's a
good chance that those remaining creditors, of about [$]21,
000 dollars, not all of those will file a proof of claim. It
may be then, that being the case, furthermore, if there's
some objections to claims, that frees up even that much more