Nupetco Associates, LLC v. Allen

IN THE UTAH COURT OF APPEALS

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Nupetco Associates, LLC, ) PER CURIAM DECISION
)
Plaintiff and Appellee, ) Case No. 20110931‐CA
)
v. ) FILED
) (March 1, 2012)
Cari Allen, )
) 2012 UT App 65
Defendant and Appellant. )

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Third District, Salt Lake Department, 080904326
The Honorable Sandra N. Peuler

Attorneys: Cari Allen, Centerville, Appellant Pro Se
James C. Swindler, Salt Lake City, for Appellee

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Before Judges McHugh, Voros, and Orme.

¶1 Cari Allen appeals the district court’s denial of her motion to set aside the
judgment under rule 60(b) of the Utah Rules of Civil Procedure. This matter is before
the court on Nupetco Associates, LLC’s motion for summary disposition on the basis
that the grounds for review are so insubstantial as not to merit further proceedings and
consideration by the court.

¶2 Nupetco initiated a lawsuit against Allen concerning several promissory notes
signed by Allen. During the course of the lawsuit, Allen argued that a settlement
agreement between the bankruptcy trustee for Log Furniture, Inc., another party to the
notes, and Nupetco constituted full satisfaction and payment of the notes and released
her from liability. The settlement agreement had been approved by the bankruptcy
court. The district court disagreed and entered a judgment against Allen in the amount
of $187,774.66 plus interest. Allen did not appeal the judgment. Instead, Allen filed a
motion pursuant to rule 60(b) of the Utah Rules of Civil Procedure for relief from the
judgment. In her motion Allen argued that the district court lacked jurisdiction and that
the judgment was void because only the bankruptcy court had jurisdiction to interpret
the settlement agreement. The district court denied the motion.

¶3 On appeal, Allen argues that the district court erred in denying her rule 60(b)
motion because the bankruptcy court had exclusive jurisdiction to interpret the
settlement agreement. The district court did not err. The United States Code sets forth
that “the [federal] district courts shall have original and exclusive jurisdiction of all
cases under title 11,” i.e., the bankruptcy code. However, in cases merely “arising in or
related to cases under title 11,” the federal district courts have “original but not exclusive
jurisdiction.” 28 U.S.C. § 1334 (emphasis added). Thus, the bankruptcy court does not
have exclusive jurisdiction over actions that are ancillary to bankruptcy cases. As a
result, state courts of general jurisdiction may have jurisdiction over cases “arising in or
related to” bankruptcy proceedings. Therefore, because this case was not a bankruptcy
case, but was related to a bankruptcy action, the district court had jurisdiction to
adjudicate the dispute as between Allen and Nupetco, neither of whom had sought
protection in bankruptcy court.

¶4 Therefore, because the district court had jurisdiction to interpret the terms of the
settlement agreement, the district court did not err in denying Allen’s motion for relief
from judgment. Affirmed.

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Carolyn B. McHugh,
Presiding Judge

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J. Frederic Voros Jr.,
Associate Presiding Judge

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Gregory K. Orme, Judge

20110931‐CA 2