United States District Court, W.D. Washington, Seattle
In re KENT DOUGLAS POWELL and HEIDI POWELL, Debtors.
DENNIS LEE BURMAN, Appellee. KENT DOUGLAS POWELL and HEIDI POWELL, Appellants, Bankr. No. 12-11140MLB
ORDER DENYING MOTION FOR TEMPORARY RESTRAINING
ORDER/STAY PENDING APPEAL
S. Lasnik United States District Judge.
matter comes before the Court on bankruptcy appellants'
“Motion for Temporary Restraining Order/Stay Pending
Appeal.” Dkt. # 4. For the reasons articulated below,
appellants' motion is DENIED.
February 2012, appellants Kent and Heidi Powell (hereinafter
“the Powells”) filed for bankruptcy under Chapter
7 of the Bankruptcy Code, 11 U.S.C. § 101, et
seq. They failed to include in their schedule of exempt
property the internet domain www.heidipowell.com, a domain
name Heidi Powell apparently used to host her personal email
and to publicly list professional information. Months after
the Powells' case closed, they were approached by a
different Heidi Powell (referred to by the parties and
Bankruptcy Judge as “Arizona Heidi Powell”), who
was apparently a cast member on the former ABC series
“Extreme Weight Loss” and who sought to buy the
domain for her own purposes. Arizona Heidi Powell's
efforts to buy the domain were unsuccessful, as was her
attempt to obtain it through a lawsuit before the United
States District Court for the District of Arizona. After
Arizona Heidi Powell discovered the domain was not listed in
the family's bankruptcy schedules, she alerted the
Powells' bankruptcy trustee and offered to buy the domain
for $10, 000.
trustee reopened the Powells' bankruptcy case, and
brought a motion to sell the domain. Bankr. Dkt. ## 20, 25.
The Powells responded by submitting an amendment to their
bankruptcy schedules that listed the domain as exempt
property, which the Bankruptcy Court approved. Bankr. Dkt.
#50. They valued the domain at $7.99 (the registration fee
paid to GoDaddy.com), and additionally claimed it as a $7,
945.01 exemption on their amended schedules. Bankr. Dkt. #
30. The Bankruptcy Court ultimately determined the right to
use the domain name was an executory contract. Dkt. # 4-2 at
330. Regarding the trustee's motion to sell the rights
associated with that contract, the Bankruptcy Court
determined that the Powells' failure to previously
declare the domain meant the estate had the right to be
counterparty to the contract and to make use of what value
existed in excess of the Powells' $7, 945.01 exempted
interest. Dkt. # 4-2 at 327, 344. The Bankruptcy Court
authorized the trustee to assume the domain's contract
rights, to sell those rights, and to remit to the Powells the
$7, 945.01 value of their exempted interest. Bankr. Dkt. #
76. The Powells unsuccessfully sought a stay from the
Bankruptcy Court pending appeal. Bankr. Dkt. # 98. The
Powells then filed an appeal with this Court, and filed a
motion for a temporary restraining order preventing the sale
and for a stay of the Bankruptcy Court's order pending
this appeal. Dkt. # 4.
Court evaluates a motion for a temporary restraining order
and stay pending appeal under the familiar standard that
weighs a party's “likelihood of success on the
merits, the possibility of irreparable injury, the relative
hardship of the parties, and the public interest.”
Nautilus Grp., Inc. v. Icon Health & Fitness,
Inc., 308 F.Supp.2d 1208, 1216 (W.D. Wash. 2003).
Likelihood of success on the merits is the most important
factor, and a party seeking a stay or temporary restraining
order will not succeed without passing that threshold
inquiry. Garcia v. Google, Inc., 786 F.3d 733, 740
(9th Cir. 2015).
Court denies the Powells' motion because they are not
likely to succeed on the merits of their appeal based on the
record before the Court. The Powells argue the Bankruptcy
Court should have engaged the hypothetical of how their
bankruptcy would have proceeded had they properly scheduled
the domain before their bankruptcy closed the first time.
That, however, was not the case. At the time the Powells
filed an amended exemption schedule, the Bankruptcy Court had
already reopened their case and the trustee had already
reasonably revalued the domain contract. The Powells cite no
authority for the proposition that an approved exemption
during a reopened bankruptcy causes the exempted property to
be hypothetically evaluated as if it were part of the
original proceedings. In fact, by failing to schedule the
domain in their original bankruptcy, the Powells yielded it
to the estate. See 11 U.S.C. § 554(c), (d).
When the Bankruptcy Court approved their amended exemption,
it entitled them to an interest in the domain equal to the
approved exemption. Any value of the asset in excess of that
interest belongs to the estate, and the trustee is entitled
to use that value to pay off the Powells' remaining
unsecured creditors. See In re Gebhart, 621 F.3d
1206, 1209 (9th Cir. 2010).
State's personality rights statute does not change that
conclusion. The Washington Personality Rights Act, RCW
63.60.010, provides that “[e]very individual or
personality has a property right in the use of his or her
name, voice, signature, photograph, or likeness.” The
Powells argue that allowing a sale of www.heidipowell.com is
tantamount to selling debtor-appellant Heidi Powell's
personality rights. Personality rights, however, do not
afford each individual the right to exclude others from the
commercial use of a name. Rather, personality rights protect
a person's right to control the use of her name insofar
as it reflects the commercial use of her identity.
See 1 J. Thomas McCarthy, Rights of Publicity
and Privacy § 3:1 (2d ed. 2015 & Supp. 2017)
(“The right of publicity is simply the inherent right
of every human being to control the commercial use of his or
her identity.”). Nothing in the record suggests Arizona
Heidi Powell seeks to use the domain or the name “Heidi
Powell” in any way that traces back to the identity of
debtor-appellant Heidi Powell. For that reason, the sale of
the contract rights associated with the domain do not
implicate the latter Heidi Powell's personality rights.
foregoing reasons, the Powells' motion is DENIED.
 After the Bankruptcy Court reopened
the Powells' case, Arizona Heidi Powell increased her
offer to $20, 000, but there remains the possibility that
with further ...