Environmental Land Technology, Ltd.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
ENVIRONMENTAL LAND
TECHNOLOGY, LTD.,
Debtor.
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Case No. 04-00926
(Chapter 11)
MEMORANDUM DECISION REGARDING SECOND MOTION FOR
RECONSIDERATION OF DISALLOWANCE OF CLAIM BY DARRELL G. HAFEN
This decision addresses the second Motion For
Reconsideration Of Disallowance Of Claim filed by Darrell G.
Hafen. 	In disallowing Mr. Hafen’s proof of claim, the court
ruled that to the extent that the proof of claim asserts a
claim against the debtor for the recovery of money, the claim was
time-barred and failed to establish privity of contract
between Mr. Hafen and the debtor (the proof of claim having
rested on a contract with a state agency). 	The court further
ruled that to the extent the proof of claim asserts a
claim for the recovery of property or to establish ownership of
property, the proof of claim must be dismissed because a claim to
recover or establish title to property must be brought as an
adversary proceeding.
The decision below is signed as a decision of
the court.
Signed: December 03, 2007.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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Mr. Hafen’s second motion to reconsider is one under Rule
60(b) of the Federal Rules of Civil Procedure because it was
filed more than 10 days after entry of the court’s prior orders.
It fails to establish grounds for relief under Rule 60(b).
I
The motion still fails to establish any basis for a monetary
claim against the debtor based on Mr. Hafen’s contract with a
state agency. 	The motion alleges that James Doyle, “through
deception and fraud,” got the state agency to sign a contract
with him “on this very land.” 	I will assume in Mr. Hafen’s favor
that Mr. Doyle was acting on behalf of the debtor, Environmental
Land Technology, Inc., and that the land is the same land as to
which Mr. Hafen had a contract with the state agency.
Mr. Hafen fails to assert grounds for excusing his delay in
asserting the new allegations of fraud and deception. 	Moreover,
Mr. Hafen has failed to allege fraud with any particularity, as
required by Rule 9 of the Federal Rules of Civil Procedure (made
applicable by Rules 7009 and 9014 of the Federal Rules of
Bankruptcy Procedure).
Finally, disregarding the failure to plead fraud with
particularity, these new allegations may establish a basis for a
claim by the state agency against the debtor for deceiving and
defrauding the state agency, but they fail to establish grounds
that would give rise to a monetary claim on the part of Mr. Hafen
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against the debtor. 	Something more would be required in order
for Mr. Hafen to have a monetary claim against the debtor.
Although the proof of claim asserts that Mr. Doyle was aware of
Mr. Hafen’s claim to the property, that does not establish that
Mr. Doyle acted wrongly in obtaining a contract with the state
agency for the purchase of the property. 	The state agency may
have decided that Mr. Hafen’s contract to purchase the property
was no longer enforceable, and Mr. Doyle may have so concluded as
well.
II
In his new motion, Mr. Hafen also targets the Court’s
disallowance of his monetary claim as time-barred by asserting
that “fraud is an exception to the statute of limitations and
other related matters.” 	However, the motion has not pled facts
establishing that when the debtor acquired the property, Mr.
Hafen still had an enforceable contract to obtain ownership of
the property. 	The motion does not allege any fraud predating the
date on which an action to enforce Mr. Hafen’s contract to
purchase the property would have become barred by the applicable
state statute of limitations. 	Accordingly, Mr. Hafen’s claim is
time-barred because he had no enforceable rights when Mr. Doyle
(acting on behalf of the debtor) appeared on the scene.
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III
In his latest motion, Mr. Hafen asserts that the debtor
“cannot assert title free and clear” from the state agency “since
it was Mr. Hafen who . . . entered into a contract to buy this
land before Mr. Doyle . . . .” 	This again suggests that Mr.
Hafen is asserting a claim to ownership of the property instead
of a monetary claim against the debtor. 	A proceeding in this
court to determine ownership of land is not properly brought by a
proof of claim and must, instead, be brought as an adversary
proceeding.
Mr. Hafen asserts that a federal court action he filed in
Utah against SITLA “is considered to be an adversary proceeding
against Mr. Doyle.” 	However, he does not allege that either Mr.
Doyle or Environmental Land Technology, Ltd. was named in such
action. 	Moreover, because the action was not filed in this
court, after the commencement of this bankruptcy case in 2004,
that action could not be commenced against the debtor, or
continued to be pursued against the debtor, without violating the
automatic stay of 11 U.S.C. § 362(a).
In any event, the matter before the court is requested
reconsideration of disallowance of the proof of claim. 	That
proof of claim remains an improper vehicle to pursue a claim to
ownership of the property regardless of whatever other
proceedings Mr. Hafen may have brought.
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5	O:\Judge Temp Docs\Environmental Land Technology Order Denying 2d Mtn to Reconsder re Claim of Hafen.wpd
IV
An order follows.
[Signed and dated above.]
Copies to: Kevin R. McCarthy, Esq.; Office of United States
Trustee; and:
Darrell G. Hafen
P.O. Box 92642
Washington, DC 20090
Darrell G. Hafen
140 E. South Temple
Salt Lake City, UT 84102
Darrell G. Hafen
P.O. Box 675
Washington, UT 84780
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