Linda Mastro v. James Rigby, Jr.

Linda Mastro (“Linda”), a nonclaimant to the bankruptcy estate, appeals the district court’s dismissal of her appeal of the bankruptcy court’s judgment in this fraudulent conveyance case. We hold that the bankruptcy court had authority to enter judgment based on the parties’ consent. We conclude, however, that the district court abused its discretion in dismissing Linda’s appeal under the fugitive disen-titlement doctrine, because no necessity justified invoking the rule of disentitlement in this case.

I.

James Rigby (the “Trustee”), in his capacity as Trustee for the Chapter 7 bankruptcy estate of Linda’s husband, Michael Mastro (“Michael”), filed an adversary proceeding against Linda. The Trustee alleged, inter alia, that Linda fraudulently transferred estate assets in violation of 11 U.S.C. §§ 544 and 548, and Wash. Rev. Code, ch. 19.40. Linda did not file any counterclaims against the bankruptcy estate.

The bankruptcy court tried the adversary proceeding, with Linda and other witnesses appearing and testifying at trial. It concluded that Linda and Michael utilized an increasingly elaborate series of transactions to shield estate assets and hinder, defraud, or delay…