Chapter Jackson v. Rachel Gosset

United States Bankruptcy Appellate Panel
For the Eighth Circuit
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No. 24-6003
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In re: Chapter Kris Jackson,
Debtor.
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Chapter Kris Jackson,
Appellant
v.
Rachel Gosset and Jordan Beswick, as Co-Trustees of the Jackson Family Trust,
Appellees
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Appeal from United States Bankruptcy Court
for the Western District of Missouri
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Submitted: October 15, 2024
Filed: December 11, 2024
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Before HASTINGS, Chief Judge, CONSTANTINE and JONES, Bankruptcy
Judges.
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CONSTANTINE, Bankruptcy Judge.
Debtor/Appellant Chapter Kris Jackson appeals the bankruptcy court’s order
denying Jackson’s motion for sanctions, damages, and other relief. In her pleadings
in the bankruptcy case and on appeal, Jackson seeks an evidentiary hearing on the
issue of sanctions and damages against Rachel Gosset and Jordan Beswick as “Co-
Trustees of the Jackson Family Trust” (“Appellees”) and requests an order requiring
Appellees to post a bond pending the damages hearing, demands an order barring
Appellees from filing any involuntary bankruptcy petition naming Jackson as the
debtor without first obtaining leave of the bankruptcy court, and seeks a declaration
that the case is void ab initio. For the following reasons, we remand the case to the
bankruptcy court for a hearing on these requests for relief.
STANDARD OF REVIEW
“A decision to grant or deny fees and expenses to a debtor upon dismissal of
an involuntary petition is left to the discretion of the court, thus, we review that order
for abuse of discretion.” Coop. Supply, Inc. v. Corn-Pro Nonstock Coop., Inc. (In re
Corn-Pro Nonstock Coop., Inc.), 318 B.R. 153, 155 (B.A.P. 8th Cir. 2004). 	A
decision to hold or “not to hold an evidentiary hearing also is reviewed for an abuse
of discretion.” 	MedPoint Mgmt., LLC v. Jensen (In re Medpoint Mgmt., LLC), No.
AZ-15-1130, 2016 WL 3251581, at *5 (B.A.P. 9th Cir. June 3, 2016) (citing Gray v.
Warfield (In re Gray), 523 B.R. 170, 172 (B.A.P. 9th Cir. 2014)). 	Applying this
standard, this Court will affirm the decision of the bankruptcy court unless it abused
its discretion in declining to award fees and expenses. See Bankers Tr. Co. BT Serv.
Co. v. Nordbrock (In re Nordbrock), 772 F.2d 397, 400 (8th Cir. 1985).
BACKGROUND
This appeal follows more than ten years of litigation between Appellees,
Jackson, and her former husband, Christopher Jackson, regarding the parties’ claims
to assets held by the Jackson Family Trust(s). Appellees pursued claims against

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Jackson and obtained a judgment. 	Frustrated by their inability to collect on the
judgment, Appellees initiated an involuntary bankruptcy case naming Jackson as the
debtor. 	The petition prompted Jackson to file several pleadings and numerous
exhibits, seeking dismissal of the involuntary case, damages, sanctions against
Appellees, and other remedies. Appellees responded with briefs and exhibits in
opposition to Jackson’s requested relief.
The 	bankruptcy 	court 	held 	an 	initial 	status 	hearing 	on 	January 	31,
2024. During the hearing, the bankruptcy court advised the parties that it intended
to bifurcate Jackson’s motion to dismiss from the other motions requesting damages
and to hold the issue of damages in abeyance pending a ruling on the merits of
whether the involuntary petition should be dismissed or whether the Court should
abstain and dismiss the involuntary petition under 11 U.S.C. § 305. The bankruptcy
court explained that if it granted Jackson’s motion to dismiss, it would hold a hearing
on her request for damages.
After reviewing hundreds of pages of filings and documents submitted by
Jackson, the 90-page response filed by Appellees, argument at the January 31, 2024
hearing, and the post-hearing filings, the bankruptcy court elected to forgo additional
hearings on the parties’ requests for relief. Instead, it entered an order abstaining
and dismissing the involuntary petition as a matter of law under 11 U.S.C.
§ 305. The bankruptcy court also denied Jackson’s requests for sanctions, damages,
and other relief for several reasons: any damages award would be minimal given
Jackson’s self-representation and the lack of authority for an award of significant
damages except for actual and tangible damages; the lack of authority to award
damages under 11 U.S.C. § 303(i) when a bankruptcy court abstains and dismisses
a case under 11 U.S.C. § 305; and Jackson engaged in litigation as a tactic and used
forum shopping to her advantage. Consequently, it declined to exercise its discretion
to grant relief under 11 U.S.C. § 303(i).
Jackson appeals the bankruptcy court’s order denying Jackson’s motion for
sanctions, damages, and other relief.

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DISCUSSION
In her Summary of the Case, Jackson clarifies that she appeals the denial of
her motion for sanctions and other damages and requests the Court to remand the
case to the bankruptcy court for the “sole purpose of conducting an evidentiary
hearing or trial to establish if sanctions should be permitted.” Appellant’s Br. at 12.
Appellees argue that this Court lacks jurisdiction over this appeal because the
bankruptcy court dismissed the involuntary case under 11 U.S.C. § 305. Appellees
claim that the sanctions Jackson seeks under 11 U.S.C. § 303(i) are only available if
the bankruptcy court dismissed the case under 11 U.S.C. § 303. They maintain that
Jackson does not have “standing to pursue this appeal because she cannot be granted
an award under Section 303(i) for a case dismissed under Section 305.” Appellee
Br. at 8. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992)).
Appellees’ argument is rejected. 	As the Eighth Circuit Court of Appeals
recently noted in Stursberg v. Morrison Sund PLLC, it is “obvious from the structure
and purpose of § 303 that Congress intended that the federal court that dismisses an
involuntary case has exclusive jurisdiction to enforce the debtor remedies provided
in § 303, including remedies for bad faith filings under § 303(i), and for fraudulent
filings under § 303(k)(1).” 112 F.4th 556, 563 (8th Cir. 2024). These remedies are
available whether the bankruptcy court dismissed the involuntary case under 11
U.S.C. § 303 or under 11 U.S.C. § 305. Id. at 565 (“In sum, § 303(i)(2) damages are
allowed when an involuntary petition is dismissed under § 305(a)(1).”).1
Appellees also argue the merits of Jackson’s appeal, claiming there is no basis
to find Appellees commenced the involuntary case in bad faith or for an improper
1 One of the reasons given by the bankruptcy court for denying Jackson’s requests
for sanctions, damages, and other relief was the lack of authority to award damages
under 11 U.S.C. § 303(i) when a bankruptcy court abstains and dismisses under 11
U.S.C. § 305. Subsequent to the bankruptcy court’s decision, the Eighth Circuit
decided the Stursberg case making it clear that such authority is available.

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purpose. This argument looks past the premise of Jackson’s appeal—whether she is
entitled to a hearing on her motion for sanctions and other damages. 	While the
bankruptcy court explained that it received sufficient evidence to support its decision
to abstain, it is not clear whether the record on Jackson’s request for sanctions and
other damages is complete. 	Jackson claims that she suffers from a serious and
potentially fatal medical condition that is directly affected by stress and argues she
was given no opportunity to present these facts to the court. 	She also claims she
incurred costs as a result of the involuntary petition and argues she is entitled to
attorney fees for the time she spent preparing pleadings and exhibits. Her pleadings
outline other remedies she claims the bankruptcy court failed to consider, including
requiring Appellees to post a bond pending the damages hearing, an order barring
Appellees from filing any involuntary bankruptcy petition naming Jackson as the
debtor without first obtaining leave of the bankruptcy court, and a declaration that
the case is void ab initio. 	These other remedies are included in her request for an
evidentiary hearing on sanctions and damages.
Although the bankruptcy court informed the parties that it would conduct an
evidentiary hearing on Jackson’s request for sanctions, damages, and other relief if
it dismissed the case, no such hearing was held. Jackson was denied the opportunity
to support her claim for damages. While an award under 11 U.S.C. § 303(i) is left
to the discretion of the bankruptcy court, it is an abuse of that discretion to rule
without giving the parties an opportunity to offer evidence and fully develop the
record. In re Medpoint Mgmt., LLC, 2016 WL 3251581, at *7–8; see also Hancock
v. Blair House Assocs. Ltd. P’ship, No. 2:22-cv-00099, 2023 WL 2743641, at *19
(D. Me. Mar. 31, 2023).
We make no determination that the denial of sanctions, damages, and other
relief was an abuse of discretion. 	Rather, in the circumstances of this case, we
determine that an evidentiary hearing is necessary to exercise that discretion.

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JACKSON’S MOTIONS TO THE BANKRUPTCY APPELLATE PANEL
Jackson filed a Motion to Strike Brief of Appellees claiming Appellees
fraudulently 	misrepresent 	the 	existence 	of 	trusts 	that 	do 	not 	exist. 	While
acknowledging that Appellees obtained judgments on behalf of the trust(s), she
argues that the trust(s) were not legally established; and therefore, Appellees’
attorney, Victor F. Weber, “is barred from representing Trust(s) and cannot legally
submit any pleadings on their behalf.” 	Mot. to Strike at 9. Additionally, Jackson
claims Attorney Weber’s “representation of separate trusts without each trust having
separate instruments creates a conflict of interest which requires Weber to withdraw
from the representation in this Appeal.” Id. at 21.
Jackson also filed a Motion for Sanctions, Motion for Removal and for
Dismissal of a United States Trustee and Motion for Injunction, all premised on her
claims regarding the invalidity and illegality of the trust(s) at issue. 	In support of
these motions and her motion to strike Appellees’ brief, Jackson filed 29 Requests
for Judicial Notice.*
“The function of the appellate court is not to make an initial decision but
simply to review the action of the trial court.” 	Booker v. Special Sch. Dist. No. 1,
585 F.2d 347, 353 (8th Cir. 1978). As an appellate court, we are also mindful that
our “scope of review is limited to issues raised both below and on appeal.” Marshall
v. Anderson Excavating & Wrecking Co., 8 F.4th 700, 710 (8th Cir. 2021) (quoting
Bethea v. Levi Strauss & Co., 916 F.2d 453, 455 (8th Cir. 1990)).
The bankruptcy court abstained from deciding issues related to the validity of
the trust(s) or the capacity of the co-trustees to act on behalf of the trust(s) and
dismissed the involuntary petition. 	Jackson declined to challenge this decision on

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appeal, 	and Appellees 	did 	not 	cross-appeal.2 Rather, 	Jackson 	appealed 	the
bankruptcy court’s order denying Jackson’s request for sanctions, damages, and
other relief.
Despite the limited scope of her appeal, Jackson asks the Court to take judicial
notice of documents she claims show that Appellees fraudulently misrepresent the
existence of trust(s) that do not exist and she challenges Attorney Weber’s standing
to respond to her appeal, but she offers no court order ruling in her favor on these
claims. 	Instead, she invites this Court to rule on the validity of the trust(s) in the
first instance. We decline this invitation because the role of an appellate court is to
review the decisions of the bankruptcy court, not to decide the trust validity issues
the bankruptcy court abstained from deciding. 	See Booker, 585 F.2d at 353.
Accordingly, Jackson’s Motion to Strike Brief of Appellees Rachel Gossett and
Jordan Beswick, as Trustees of the Jackson Family Trust, the Jackson Family Trust
“A,” and the Jackson Family Trust “B,” and the Jackson Family Trust “C” is
DENIED. Likewise, Jackson’s Motion for Sanctions, Motion for Removal and for
Dismissal of a United States Trustee and Motion for Injunction are DENIED.
Jackson’s requests for judicial notice of documents in support of these motions are
DENIED because they are moot. 	To the extent these documents are part of the
bankruptcy court record designated on appeal, the Court considered them in its
decision where relevant to the outcome.
Finally, Jackson filed a Motion to Have the Court Deem Appellant Motions
Unopposed, Deem Appellee’s Arguments as Waived and Accepting the Appellant’s
Position. Jackson argues that Appellees failed to timely respond to her motions and
this failure should prompt the Court to deem the motion unopposed, entitling
Jackson to the relief she requests. On October 21, 2024, the Court entered an Order
2 Even if Appellees had cross-appealed, we must decline review. 	“An order
dismissing or suspending under § 305(a) ‘is not reviewable by appeal or otherwise’
to the court of appeals or to the Supreme Court. § 305(c). Section 305 contains no
remedial provision.” Stursberg, 112 F.4th at 560–61.

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granting Appellees’ motion for an extension of time and allowing Appellees until
October 28, 2024, to respond to Jackson’s motions. Appellees filed their response
within the time allowed. This response prompted Jackson to file a reply brief and a
Motion to Strike Scandalous Material From Alleged Appellees’ Objection. She also
filed her thirtieth Request for Judicial Notice in support of this motion. Because the
Court granted Appellees an extension of time to respond to Jackson’s motions, her
Motion to Have the Court Deem Appellant Motions Unopposed, Deem Appellee’s
Arguments as Waived and Accepting the Appellant’s Position is DENIED. Jackson’s
Motion to Strike Scandalous Material From Alleged Appellees’ Objection and her
thirtieth Request for Judicial Notice in support of this motion are DENIED because
they are not relevant to the outcome of this appeal. As explained above, the Court
declines to consider any issues or allegations related to the validity of the trust(s) or
the disputes between the parties except for the narrow issue raised on appeal:
whether Jackson is entitled to a hearing on her motion for sanctions, damages, and
other relief.
CONCLUSION
For the reasons stated, we remand this case to the bankruptcy court for an
evidentiary hearing to determine whether a judgment should be entered under 11
U.S.C. § 303(i) and to determine whether Jackson is entitled to the other relief she
seeks.
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*
Jackson requests this Court to take judicial notice of the following documents:
1. Death Certificates of Fredric Forbin Jackson and Sandra Jean Jackson;
2. Sandra Jackson’s tax returns;
3. Sandra Jackson’s and Fredric F. Jackson’s 2001 estate tax returns;
4. Documentation re: Sandra J. Jackson’s individual 2001 tax returns;
5. IRS letter re: EIN for Jackson Fam Tr; Petition to Determine Title to Real and
Personal Property, Impose Constructive Trust, Surcharge Co-Trustee, Double
Damage, Remove Co-Trustee, and Suspend Co-Trustee filed by Rachel
Gossett and Jordan Beswick in California state court;

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6. California Department of Consumer Affairs Professional Fiduciaries Bureau
website document;
7. Assessor County Clerk Recorder document search results;
8. Jackson Family Trust C income tax returns;
9. Jackson Family Trust B income tax returns;
10. Involuntary bankruptcy petition; proof of claim filed by Appellees, Bankr.
Case No. 23-41601, Western District of Missouri;
11. Notice of Appeal in In re Christopher Adam Jackson, Bankr. Case No. 15-
21564, District of Kansas; Appellant’s brief in this appeal; Tenth Circuit
Bankruptcy Appellate Panel Order;
12. The Jackson Family Trust filed as Ex. F, Doc. 59-6, in Bankr. Case No. 23-
41601, Western District of Missouri;
13. Pleadings filed in California state court re: Trustee certificate;
14. Motion and Order granting relief from the automatic stay to allow Trustee to
prosecute a forcible entry and forcible detainer complaint against Christoper
Jackson and Chapter Jackson, filed in Bankr. Case No. 15-21564, District of
Kansas;
15. Objection to Trustee’s Motion for Abandonment of Claims in Bankr. Case
No. 15-21564, District of Kansas;
16. Agreed 	Motion 	to 	Extend 	Time 	to 	Object 	to 	Trustee’s 	Motion 	for
Abandonment of Claims in Bankr. Case No. 15-21564, District of Kansas;
17. Order Granting Agreed Motion to Extend Time to Object to Trustee’s Motion
for Abandonment of Claims in Bankr. Case No. 15-21564, District of Kansas;
18. Motion to dismiss Bankr. Adversary Case No. 17-6035, District of Kansas;
Order dismissing Bankr. Adversary Case Nos. 17-6019, 17-6030, 17-6031,
17-6035, District of Kansas;
19. Richard Jandt’s Petition for Settlement of First Account and Approval of Acts
of Interim Trustee, for Review of Bond and for Allowance of Trustee’s and
Attorney’s Fees, in California state court;
20. Objection to Motion to Dismiss, Bankr. Case No. 15-21564, District of
Kansas;
21. IRS letter re: EIN Fredric F Jackson Estate;
22. IRS letter re: EIN Jackson Fam Tr C;
23. Objection to Debtor’s Motion to Dismiss, Bankr. Case No. 15-21564, District
of Kansas;
24. IRS letter re: EIN Jackson Fam Tr B;
25. Objection to Debtor/Appellant’s motions, Doc. 59, Bankr. Case No 23-41601,
Western District of Missouri;
26. Declarations and evidence filed in California state court re: trustee fees and
attorney fees;

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27. Motion for Appointment of Receiver in Missouri state court;
28. Petition for Acceptance of Conditional Resignation of Interim Trustee
Richard 	Jandt; 	Removal 	of 	Christopher 	Jackson 	as 	Co-Trustee; 	and
Reappointment of Rachel Gossett and Jordan Beswick as Successor Co-
Trustees filed in California state court;
29. Docket for Bankr. Adversary Case No. 17-6035, District of Kansas.