Finstad v. Gord, No. 19-6035 (8th Cir. 2020)
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The bankruptcy appellate panel affirmed the bankruptcy court's dismissal of appellants' adversary proceeding against appellees, individually and in their capacity as assignees of Beresford. The panel held that the bankruptcy court correctly determined that the North Dakota state courts possessed concurrent jurisdiction to decide appellants' quiet title action and interpret the Chapter 12 Plan, as well as the incorporated settlement agreement and Beresford Deed. The panel also held that the bankruptcy court properly determined that it must apply North Dakota law (including the parol evidence statute) to determine ownership of the farm, because property interests are created and defined by state law.
Furthermore, because the state courts had jurisdiction and determined property interests in accordance with North Dakota law, and because the bankruptcy court properly decided that it would be constrained to follow that law, preemption under the United States Constitution or federal bankruptcy laws does not apply. Finally, the panel held that the Rooker-Feldman doctrine applies and the bankruptcy court correctly concluded that it lacked subject matter jurisdiction to review appellants' claim of ownership, and appellants' claims and causes of action were barred by the doctrine of res judicata. The panel rejected appellants' remaining claims as without merit.
Court Description: [Sanberg, Author, with Shodeen and Dow, Bankruptcy Judges] Bankruptcy Appellate Panel. The Bankruptcy Court correctly determined North Dakota state courts possessed concurrent jurisdiction to decide debtors' quiet title claims and interpret the Chapter 12 Plan and settlement agreement between debtors and their creditor; the Bankruptcy Court correctly determined it must apply North Dakota law, including its parol evidence statute, to determine ownership of the farm; debtors' arguments regarding preemption, application of the Rooker-Feldman doctrine and application of res judicata rejected. [ March 26, 2020 ]
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