669 F.2d 98 (3rd Cir. 1981), 81-1797, Universal Minerals, Inc. v. C. A. Hughes & Co.

Docket Nº:81-1797.
Citation:669 F.2d 98
Party Name:UNIVERSAL MINERALS, INC. v. C. A. HUGHES & COMPANY. Appeal of UNIVERSAL MINERALS, INC., a Pennsylvania corporation, and Cambria Mining and Manufacturing Company, a wholly owned subsidiary.
Case Date:December 30, 1981
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 98

669 F.2d 98 (3rd Cir. 1981)




Appeal of UNIVERSAL MINERALS, INC., a Pennsylvania

corporation, and Cambria Mining and Manufacturing

Company, a wholly owned subsidiary.

No. 81-1797.

United States Court of Appeals, Third Circuit

December 30, 1981

Argued Dec. 1, 1981.

Rehearing and Rehearing In Banc Denied Jan. 21, 1982.

Page 99

David W. Lampl (argued), Sanford M. Lampl, Lampl, Sable & Makoroff, Pittsburgh, Pa., for appellants.

Burton D. Morris (argued), Robert N. Hackett, Richard A. Moses, Baskin & Sears, Pittsburgh, Pa., for appellee.

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Before ALDISERT, ROSENN and WEIS, Circuit Judges.


ALDISERT, Circuit Judge.

This appeal from an appellate decision of the district court, which reversed the judgment of a bankruptcy court in an adversary proceeding, requires us to examine the standard of appellate review of a judicial determination of abandonment of title to personal property. The district court reversed the bankruptcy judge, deeming the abandonment determination clearly erroneous, and entered an injunction in favor of plaintiff-appellee C.A. Hughes & Company. We also must address the nature of our review of the district court's appellate decision. We hold that we must exercise plenary review of the district court's decision; that abandonment is a mixed question of fact and law; and that the district court erred in reversing the judgment of the bankruptcy court. We therefore reverse the judgment of the district court and direct that the judgment of the bankruptcy court be affirmed.


Since 1904, appellee Hughes has held both title to a seam of coal under and the right to use the surface of the "Tiley Tract," located in Cambria County, Pennsylvania. Hughes operated a deep mine under the tract from 1912 to 1954; and in the course of its mining operations, Hughes created on the surface of the tract a 25 acre, 250 foot high mountain of culm or coal refuse known as the "Cassandra Pile." Appellant Universal Minerals acquired title to the surface of the Tiley Tract in 1975, and in 1978 it began salvaging coal from the Cassandra Pile. Hughes, claiming ownership of the pile, sued Universal in state court, seeking an injunction, an accounting, and damages. Universal subsequently filed a Chapter XI bankruptcy petition in the district court, which under Rule 11-44 of the Rules of Bankruptcy Procedure stayed the state proceedings. 1 Hughes then commenced an adversary proceeding against Universal under Part VII of the Rules of Bankruptcy Procedure, see Rule 7001, Interim Bankruptcy Rules, seeking the same relief. Following a three-day trial, the bankruptcy court determined that Hughes had abandoned the Cassandra Pile and entered judgment for Universal. Hughes appealed this decision to the district court pursuant to Bankruptcy Rule 801. The district court held the determination clearly erroneous and reversed the judgment, enjoined Universal from continuing its salvage operations, and remanded to the bankruptcy court for an accounting. Universal now appeals from the judgment of the district court. Appellant's chief argument is that the district court exceeded the proper scope of review. It contends that appellate courts are bound by the factual determinations of the bankruptcy court in the absence of a showing of a "gross miscarriage of justice," and that the district court erred in holding the finding of abandonment clearly erroneous. Appellee joins the issue by contending that abandonment and intent to abandon are not findings of fact within the "clearly erroneous" rule, but "ultimate findings" subject to plenary review on appeal to the district court.


First, we must address the question of whether this court has jurisdiction over the appeal. The Bankruptcy Reform Act of 1978 included a series of amendments and additions to Title 28 which created a new schema for hearing bankruptcy appeals. 2 District courts have appellate jurisdiction

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over "final judgments, orders, and decrees of bankruptcy courts," and they also have discretion to hear appeals from interlocutory orders of bankruptcy courts. 28 U.S.C. § 1334. On the other hand, this court has jurisdiction of "an appeal from a final judgment, order, or decree of ... a District court (exercising appellate jurisdiction over a bankruptcy matter)." 28 U.S.C. § 1293(b). Although there are a host of potential issues concerning this statement of the appellate authority of this court, the procedural position of the case on appeal presents a narrow issue for decision. 3

The district court reviewed the bankruptcy court's decision without commenting on the distinction made in 28 U.S.C. § 1334 between final and interlocutory orders. The bankruptcy court had denied all relief sought in the adversary proceeding, and therefore the bankruptcy court's disposition was final for the purposes of § 1334(a). Once the district court's jurisdiction under § 1334(a) is established, our jurisdiction under § 1293(b) would seem to follow. The bankruptcy court had rendered a final decision, and the judgment of the district court conclusively determined the question presented by this appeal and awarded possession of the property to Hughes. The judgment of the district court certainly was final in the sense that nothing remained for the district court to do. In addition, reversal of its judgment "would be preclusive of any further litigation on the relevant cause of action," Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 482-83, 95 S.Ct. 1029, 1039-40, 43 L.Ed.2d 328 (1975). Under these circumstances, we conclude that the finality requirement of § 1293(b) is satisfied notwithstanding the remand to the bankruptcy court for an accounting.

This interpretation of § 1293(b) is arguably supported by analogy to the traditional interpretation of 28 U.S.C. § 1257, which authorizes Supreme Court review of final judgments or decrees of state courts. Whether the cases interpreting § 1257 should be treated as relevant in determining the proper meaning of § 1293(b) is open to question. Certainly, the institutional considerations and significance of the final judgment rule in the context of the review of state court judgments are markedly different than the considerations pertinent to the review of appeals from the district court's exercise of its appellate jurisdiction over bankruptcy appeals. We...

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