United States District Court, D. Montana, Butte Division
In Re MARY KAY DUFFIE, Debtor.
STEVE GOTCHER AND SHARON GOTCHER, Appellees. MARY KAY DUFFIE Appellant,
Morris United States District Court Judge
United States Bankruptcy Court for the District of Montana
entered a Memorandum of Decision in this matter on June 3,
2015. (Doc. 19-8 at 118.) Judge Kirscher excepted $88,
348.61 from Duffle's bankruptcy discharge, pursuant
to 11 U.S.C. § 523(a)(2)(A). Id. at 143.
Appellant Mary Kay Duffle filed a brief appealing the
decision by Judge Kirscher on August 18, 2017. (Doc. 19.)
Appellees Steve and Sharon Gotcher ("Gotchers")
filed their response on September 25, 2017. (Doc. 24.) The
Court conducted a hearing on October 26, 2017. (Doc. 28.)
Court will recite the facts only as necessary for this
appeal. Duffie, d/b/a SRO LIVE, purchased the Rialto Theater
in Bozeman, Montana in November of 2010. (Doc. 19-1 at
40-49.) Duffie also purchased the Covellite Theater in Butte,
Montana in May of 2011. Id. at 31-39. Duffie entered
into Commercial Lease Agreements for both properties with
Stephen Michael Rangel ("Michael"), her significant
other. (Doc. 19-17 at 51-54.)
met Steve and Sharon Gotcher during the summer of 2011. (Doc.
29 at 22.) Michael and Duffie extended an offer to the
Gotchers in August of 2011 to become co-owners of the two
theaters. Id. at 23. Duffie typed the Co-Ownership
Agreement at this meeting. Id. at 12, 23. Duffie and
Michael signed the Co-Ownership Agreement at the meeting.
Id. at 27. The Gotchers did not sign. Id.
returned a few days later and presented the Gotchers with a
second Co-Ownership Agreement. Id. at 25. Pursuant
to the second agreement, Gotchers purchased a 10% equity
interest in the Covellite Theater and the Rialto Theater in
exchange for $140, 000. Id. at 26. Gotchers and
Stephen Michael signed this second Co-Ownership Agreement.
Id. at 27. Duffie typed the second Co-Ownership
Agreement, but did not sign. Id. at 28. The second
Co-Ownership Agreement, similar to the first, nevertheless
listed her as a party in the recitals of the final page.
(Doc. 19-1 at 14-17.) The second Co-Ownership Agreement also
contained a space for her signature. Id.
made several payments totaling $87, 000.00 under the
second Co-Ownership Agreement. (Doc. 29 at 71.) Gotchers made
these payments by taking cash advances on credit cards,
selling a vehicle, and refinancing a building that the
Gotchers own in Butte, Montana. Id. at 71-72. The
parties' relationship eventually soured. Gotchers advised
Michael and Duffie in February 2012 that they wanted to
discontinue the business relationship. (Doc. 19-4 at 65.)
Gotchers further demanded a refund of all money that they had
invested. Id. Gotchers stopped making payments under
the second Co-Ownership Agreement and retained legal counsel.
(Doc. 29 at 74.)
filed an action against "Mary Kay Duffie and Stephen
Michael, d/b/a SRO Live" in Montana's Second
Judicial District Court in Silver Bow County. The Clerk of
Court entered judgments by default in the amount of $97,
960.00 jointly against Duffie and Michael on November 9,
2012. (Doc. 19-1 at 29.) Duffie persuaded the state court to
set aside her default. Id. at 27. Duffie eventually
responded to Gotcher's complaint and asserted
counterclaims for slander of title, breach of contract, use
of space, consulting and website, and lost profits.
Id. at 19-26.
sought protection under Chapter 13 of the Bankruptcy Code on
December 7, 2013. (Doc. 19-3 at 17.) The bankruptcy court
confirmed her Chapter 13 plan on April 30, 2014. (Doc. 19-3
at 13.) Gotchers commenced an adversary proceeding in United
States Bankruptcy Court for the District of Montana on May 7,
2014. (Doc. 19-1 at 13.)
retained local counsel and counsel from North Carolina to
represent her. (Doc. 19-3 at 4.) Duffie had to travel to
California before the originally scheduled trial. Health
problems made it difficult for Duffie to return to Montana.
(Doc. 19-8 at 74-76.) Judge Kirscher allowed Duffie and her
North Carolina based counsel to appear by video at various
pre-trial proceedings. Judge Kirscher also granted
Duffie's motion for a 60-day continuance on the original
trial date to accommodate her health issues. (Doc. 19-7 at
Kirscher denied a motion by Duffie to allow her and her North
Carolina based counsel to appear by video at the trial. (Doc.
19-8 at 84.) Judge Kirscher cited Steve Gotcher's hearing
difficulties as the basis for the denial. Id. Judge
Kirscher held a trial regarding this matter on March 30,
2015. Duffle's local counsel represented her at the
trial. Duffie did not appear.
Court possesses jurisdiction to hear appeals from final
judgments, orders, and decrees of bankruptcy courts. 28
U.S.C.A. § 158(a)(1). Courts review the bankruptcy
court's findings of fact for clear error and its
conclusions of law de novo. In re Kimura, 969 F.2d
806, 810 (9th Cir. 1992). Courts review for abuse of
discretion decisions made by bankruptcy courts concerning
docket management. In re Fletcher Intern.,
Ltd., 536 B.R. 551, 557 (S.D.N.Y. 2015) see also In
re Tukhi, 568 B.R. 107, 116 (B.A.P. 9th Cir. 2017).
Court declines to dismiss summarily this matter for
Duffle's failure to comply with the ...