Herman v. Amber Senn and Numeric Trading Company

Background

Mark E. Herman is an artist who creates prints of landmarks. He worked with Amber Senn and Numeric Trading Company to market his art. Herman filed for voluntary Chapter 7 bankruptcy on March 15, 2018. Under the bankruptcy law cited by the court, his artwork became property of the bankruptcy estate.

Trustee Nauni Jo Maunty later brought an action against Senn and Numeric Trading Company. To resolve that matter, Senn purchased from the bankruptcy estate all rights, title, and interest in Herman’s artwork created before the bankruptcy filing. The bankruptcy court approved the sale on June 26, 2019.

Maunty later sought approval of an amended and clarified settlement agreement and attached a list of Herman’s pre-filing artwork. Herman objected, arguing that the list included works created after the bankruptcy filing. The bankruptcy court found that the sale included a print of Bde Maka Ska, a lake in Minneapolis, because the print was created before the filing.

Herman filed a motion under Federal Rule of Civil Procedure 60(b)(1) and (6), as applied in bankruptcy proceedings through Bankruptcy Rule 9024. Rule 60 allows a court to provide relief from an earlier order in specified circumstances. After an evidentiary hearing at which Herman and Senn testified, the bankruptcy court denied Herman’s motion on April 5, 2021. It found that the print was created before the bankruptcy filing and found Senn’s testimony more credible. Herman appealed.

District Court’s Analysis

The district court had jurisdiction to review final bankruptcy court orders. It generally reviews legal conclusions without deference and factual findings for clear error. It reviews the denial of a Rule 60 motion for abuse of discretion, meaning it asks whether the bankruptcy court acted outside the range of permissible decisions.

Herman challenged the finding that the print was created before the bankruptcy filing. But an appellant challenging an evidentiary finding must provide a transcript of the relevant testimony for the reviewing court. Herman did not order or provide the transcript of the March 23, 2021, evidentiary hearing. Without that transcript, the district court could not assess the testimony or determine whether the bankruptcy court clearly erred. The district court therefore declined to make different factual or credibility findings.

Herman also argued that he was denied procedural due process because the bankruptcy court considered a finding that his actions were intended to harm Senn financially and that this finding could affect a related state-court lawsuit. The district court noted that the bankruptcy court had said the alleged intent was not decisive to the motion’s outcome. Because the appellate record lacked the hearing transcript, and because Herman provided no evidence that he had been denied due process, the district court declined to find clear error.

Disposition

The court affirmed the April 5, 2021, order of the United States Bankruptcy Court for the District of Minnesota and dismissed the matter. The opinion does not independently decide whether the print was actually created before or after the bankruptcy filing; it upholds the bankruptcy court’s ruling because Herman did not provide the transcript needed to challenge its factual findings.