Dalton, In re
| Decision Date | 23 April 1984 |
| Docket Number | No. 83-2296,83-2296 |
| Citation | 733 F.2d 710 |
| Parties | , Bankr. L. Rep. P 69,859 In re Eugene DALTON, d/b/a San Miguel Ranches, Debtor. Eugene DALTON, d/b/a San Miguel Ranches, Petitioner-Appellant, v. UNITED STATES of America and Scott H. Phillips, Receiver for Arizona Fuels Corporation, Respondents-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
William D. Scheid, Law and Scheid, Denver, Colo., for debtor and petitioner-appellant.
James J. Brown, Atty., Civ. Div., Dept. of Justice, Washington, D.C. (J. Paul McGrath, Asst. Atty. Gen., Dept. of Justice, William C. Lengacher, Atty., Civ. Div., Dept. of Justice, Washington, D.C., Robert N. Miller, U.S. Atty., Denver, Colo., and Linda A. Surbaugh, Asst. U.S. Atty., Denver, Colo., with him on brief), for respondent-appellee U.S.A.
Donald Gaffney, Streich, Lang, Weeks & Cardon, Phoenix, Ariz., for respondent-appellee Scott H. Phillips, Receiver, Arizona Fuels Corp.
Before DOYLE and SEYMOUR, Circuit Judges, and SAFFELS, District judge. *
Involved herein is an effort by Petitioner/Appellant Eugene Dalton to persuade this court to review two bankruptcy orders which were issued by the United States District Court for the District of Colorado (hereinafter, Colorado District Court). The first of these was issued March 8, 1983. It withdrew reference of the pending bankruptcy proceedings from the United States Bankruptcy Court for the District of Colorado (hereinafter, Colorado Bankruptcy Court). 1 The second order, issued September 22, 1983, granted the motion of Respondents/Appellees United States of America and the Receiver (hereinafter the government) to transfer venue of the Dalton bankruptcy proceedings from the Colorado District Court to the United States District Court for the District of Arizona (hereinafter, Arizona District Court).
From a reading of the facts of the case it appears that Eugene Dalton, the debtor herein, does business as the San Miguel Ranches, and is the sole shareholder of Arizona Fuels Corporation (hereinafter, AFC). The underlying case involves an effort on the part of the government to realize on a debt which has been reduced to judgment in the amount of $38,000,000, which is owed by Dalton to the government. Presumably the effort to persuade this court to take jurisdiction is an effort to prevent a change of venue. It should be explained that this is an old case that has been in the Arizona courts for a long period of time; it has been subject to litigation for seven years. In its present posture the case involves separate proceedings in two different federal circuits, the Ninth, which includes the Arizona District Court, and the Tenth Circuit.
Back in 1981, following four years of litigation, the government, acting on behalf of the Department of Energy, obtained the mentioned judgment in a civil action in the Arizona District Court against AFC and its sole shareholder, Dalton. This judgment was affirmed by the Temporary Emergency Court of Appeals. On June 11, 1982, the government sought and obtained the appointment in the Arizona District Court of a receiver for all the assets of both Dalton and AFC. AFC is a Utah corporation with its principal asset being a large oil refinery in Fredonia, Arizona. Its corporate office is located at Midvale, Utah. Dalton does have some assets; one of these is the San Miguel Ranch, outside of Nucla, Colorado. Also he owns a condominium apartment in Salt Lake City, Utah and an airplane. Because the liability of AFC is based on violations of the Entitlements Program of the Emergency Petroleum Allocation Act, 15 U.S.C. Sec. 751, et seq., parallel administrative proceedings to determine the ultimate liability to the DOE were also instituted at the same time as the action in the Arizona District Court. These parallel administrative proceedings are not now the subject of appeal or review to this court.
Pursuant to the order of the United States District Court for the District of Arizona, the receiver assumed control of the assets of AFC. Included was the Arizona refinery. He also remains in possession and control of all AFC and Dalton's books and records, as well as the San Miguel Ranch.
The Colorado District Court became part of this controversy when Dalton filed in the Colorado Bankruptcy Court a petition seeking bankruptcy under Chapter 11 of the Bankruptcy Reform Act of 1978, 11 U.S.C. Sec. 1101, et seq. It must be explained that there had not been a bankruptcy proceeding filed prior to this time; however, there was a receivership in Arizona. Dalton requested and the bankruptcy court ordered ex parte that the receiver appointed in the Arizona District Court turn over all of Dalton's assets to the Colorado Bankruptcy Court. This was pursuant to the statutory turnover provision of 11 U.S.C. Sec. 543(b). Dalton's allegation is that the San Miguel Ranch is the property of the bankruptcy estate and therefore subject to the Colorado Bankruptcy Court's jurisdiction. The government sought relief from the turnover order pursuant to 11 U.S.C. Sec. 543(d). Following a stay of the order and hearings on the government's request the Bankruptcy Court denied the request for relief and vacated the stay. The government timely filed an appeal from the turnover order in the Colorado District Court. Dalton moved for an appointment of a trustee in the bankruptcy court and on October 21, 1982, the Colorado District Court ordered a stay of the turnover order pending appeal.
The receiver in Arizona did not purport to operate as a trustee in bankruptcy and the Colorado District Court did not grant the motion of Dalton to appoint a trustee. The court was only willing to order a stay of the turnover pending an effort to appeal.
Presumably, the government's appeal from the Colorado Bankruptcy Court's turnover order continues to be pending and unresolved in the Colorado District Court. Nevertheless, on February 7, 1983, the government moved that the Colorado District Court withdraw reference of the bankruptcy proceedings from the Colorado Bankruptcy Court pursuant to the district court's Interim Rule. The government stated that withdrawal of reference would allow the Colorado District Court to exercise jurisdiction over both the bankruptcy matters and the pending appeal, and thereby permit granting of a change of venue motion that the government expected to file shortly. 2
In opposition to the government's motion to withdraw reference, Dalton filed a response. Dalton also filed a motion for a partial withdrawal of reference, requesting the Colorado District Court to withdraw from the Colorado Bankruptcy Court all matters in dispute between Dalton and the government, but to retain jurisdiction over all other bankruptcy proceedings. The Colorado District Court granted the government's motion to withdraw reference, and on March 8, 1983, issued a minute order withdrawing reference of the bankruptcy matters. Dalton appealed the order to this court, but this court dismissed the appeal as premature on August 24, 1983.
The government moved the Colorado District Court to transfer the venue of the bankruptcy proceedings to the Arizona District Court. Following submission of briefs and exhibits by both parties the Colorado District Court ordered a transfer of venue to the Arizona District Court on September 22, 1983. On October 11, 1983, Dalton filed an appeal from that apparently interlocutory order in this court, claiming jurisdiction pursuant to Rule 6(a) of the Federal Rules of Appellate Procedure (). Subsequently, on October 19, 1983, Dalton petitioned this court to consider, in the alternative, its notice of request for appeal as a petition for extraordinary writ, alleging jurisdiction pursuant to 28 U.S.C. Sec. 1651 and Rule 21 of the Federal Rules of Appellate Procedure. On October 9, 1983, this court temporarily restrained transfer of records and papers to the Arizona District Court.
The basic issues in the case are whether this court lacks appellate jurisdiction to review the Colorado District Court's withdrawal of reference and transfer of venue orders, and if such jurisdiction is lacking, whether an extraordinary writ should issue.
Dalton advances two arguments in support of his contention that this court has jurisdiction to hear his appeals: (1) that Federal Rule of Appellate Procedure 6(a) permits a discretionary appeal to this court in bankruptcy proceedings, and (2) that the district court's orders, viewed separately or together, constitute final orders appealable pursuant to 28 U.S.C. Sec. 1291 because they satisfy the collateral order exception established in Cohen v. Beneficial Industrial Loan Corporation, 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Seemingly, Dalton now recognizes the weakness of his position with respect to Rule 6(a), supra, because he now relies on Cohen to obtain the review that is now being decided. The government argues that both approaches are without merit. One other action of Dalton was to file a motion for partial withdrawal of reference requesting the Colorado District Court to withdraw from the Colorado Bankruptcy Court all matters of dispute between Dalton and the government, but to retain jurisdiction over all other bankruptcy proceedings.
It is generally true that appeals from district courts are pursuant to 28 U.S.C. Sec. 1291. This court recently held In the Matter of Glover, Inc., 697 F.2d 907 (10th Cir.1983) (per curiam), that "transition period" jurisdiction in bankruptcy proceedings over appeals from the district courts to the courts of appeal derives exclusively from Section 1291. This court further stated that Federal Rule of Appellate Procedure 6, which explicitly relies on Section 24 of the...
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