Good Hope Refineries, Inc. v. Brashear, No. 78-1332
| Decision Date | 26 December 1978 |
| Docket Number | No. 78-1332 |
| Citation | 588 F.2d 846 |
| Parties | GOOD HOPE REFINERIES, INC., Debtor, Appellant, v. R. D. BRASHEAR et al., Defendants, Appellees. |
| Court | U.S. Court of Appeals — First Circuit |
Stephen F. Gordon, Boston, Mass., with whom Carol J. Kenner, and Widett, Widett, Slater & Goldman, P. C., Boston, Mass., were on brief, for debtor, appellant.
Vern Countryman, Boston, Mass., with whom William J. Rochelle, Jr., and Rochelle, King & Balzersen, Dallas, Tex., were on brief, for defendants, appellees.
Before ALDRICH, CAMPBELL and BOWNES, Circuit Judges.
On October 20, 1977, R. D. Brashear, et al. (Brashear) filed a complaint in the pending Chapter XI proceeding of Good Hope Refineries, Inc. (Good Hope), seeking relief from the automatic stay imposed by Bankruptcy Rule 11-44(a), so that Brashear could foreclose a mortgage on certain Texas real estate. The complaint alleged that Good Hope holds legal title to the real estate, which is mortgaged to Brashear to secure a debt of as of October 14, 1977 about $3,914,600. It also alleged that the debt is in default and that interest is accruing at a rate of about $943 per day.
According to the complaint, the real estate in question was originally mortgaged to Brashear by Good Hope's principal stockholder, John R. Stanley, who transferred legal title to Good Hope eight months after initiation of the Chapter XI proceeding and a month after default. Good Hope allegedly lacks any equity in the property.
Good Hope sought to ward off Brashear's attempts to foreclose by filing a motion to quash service of process 1 and to dismiss under Fed.R.Civ.P. 12(b)(6). 2 The bankruptcy judge denied the motion. Good Hope appealed that decision to the district court, which dismissed the appeal without prejudice on May 30, 1978, in response to Brashear's unopposed motion alleging that Good Hope had failed to transmit the record on appeal in a timely fashion, as required by Bankruptcy Rule 807. An untimely motion for reconsideration filed by Good Hope was considered and denied. Good Hope then appealed to us from the district court's decision. We understand that the case has since been heard in the bankruptcy court, but that court's decision is being withheld pending our disposition of this appeal. Thus for over a year after Brashear filed its complaint seeking relief from the Chapter XI stay, the matter has remained undecided.
Brashear urges us either to dismiss the appeal for want of appellate jurisdiction or to affirm on the merits, and offers a host of supporting grounds. From this plethora of reasons, all pointing persuasively in the same direction, we are satisfied to dismiss on the basis of the "trivial order" rule.
Interlocutory appeals are allowed in bankruptcy cases, 11 U.S.C. § 47, but courts and parties are not at the mercy of indiscriminate appeals from just any order, however lacking in overall significance. Orders so unimportant as to be unappealable have been variously described as ones which lack the "character of a formal exercise of judicial power affecting the asserted right of a party," that do not decide some step in the proceedings, 2 Collier on Bankruptcy P 24.39, at 795-96 (14th ed. 1976), or which lack "definitive operative finality," In re Durensky, 519 F.2d 1024, 1029 (5th Cir. 1975). See In re Continental Mortgage Investors, 578 F.2d 872, 877 (1st Cir. 1978); Cope v. Aetna Finance Co., 412 F.2d 635, 639 (1st Cir. 1969); 16 C. Wright & A. Miller, Federal Practice and Procedure § 3926 (1977).
Here, the bankruptcy court's denial of Good Hope's motion meant only that the issue of harm would not be addressed on the pleadings but instead would be determined in the context of a hearing at which the material facts could be better developed. This ruling conformed to current pleading practice and philosophy, which does not favor resolution of disputes on the basis of arguments addressed to the semantics of a complaint. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The district court's dismissal of the appeal was equally benign, being "without prejudice to appellant's right to raise the same issue on appeal from the judgment on the merits."
Orders of this sort, which simply require further development of the issues on the merits, have been held to lack the "definitive operative finality" that will sustain immediate appellate review. Cf. Cope, 412 F.2d at 639 (); Baldonado v. First State Bank, 549 F.2d 1380, 1381 (10th Cir. 1977) (...
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