Pruitt, In re
| Decision Date | 21 September 1990 |
| Docket Number | No. 89-3688,89-3688 |
| Citation | 910 F.2d 1160 |
| Parties | 23 Collier Bankr.Cas.2d 721, Bankr. L. Rep. P 73,581 In re Edward S. PRUITT and Ida B. Pruitt. Appeal of LANDMARK SAVINGS ASSOCIATION. |
| Court | U.S. Court of Appeals — Third Circuit |
Edward T. Harvey, Hergenroeder & Heights, P.C., Pittsburgh, Pa., for appellant.
Edward S. Pruitt, Ida B. Pruitt, Verona, Pa., appellees, pro se.
Gary J. Gaertner, Chapter 13 Standing Trustee, W.D.Pa. Pittsburgh, Pa.
Before MANSMANN, SCIRICA and WEIS, Circuit Judges.
In this complicated matter, the bankruptcy judge dismissed this case and the debtors appealed to the district court. The district court appeared to withdraw the reference of the case to the bankruptcy court and stayed state foreclosure proceedings on the debtors' home. This appeal concerns the propriety of the district court's withdrawal of reference order. Having concluded that we have jurisdiction, we will vacate and remand with instructions that the district court consider the appeal from the bankruptcy court and the debtors' motion for a stay of the state foreclosure proceedings during its pendency.
Landmark Savings Association is the mortgagee of real property owned by Edward and Ida Pruitt. In 1988, Landmark commenced mortgage foreclosure proceedings against them in the Court of Common Pleas of Allegheny County, Pennsylvania. Summary judgment was subsequently granted in favor of Landmark, which then proceeded to execute on the judgment.
On March 22, 1989, proceeding without counsel, the Pruitts filed a joint petition under Chapter 13 of the Bankruptcy Code with the United States Bankruptcy Court for the Western District of Pennsylvania. As a result, a sheriff's sale of their home, scheduled in the state foreclosure proceedings, was stayed. 11 U.S.C. Sec. 362(a) (1988). The Pruitts contended that a previous discharge under Chapter 7 eradicated their mortgage indebtedness, and therefore made no provision for payments to Landmark in their proposed plan of adjustment. For this reason, the bankruptcy judge rejected the proposed plan at a May 17 confirmation hearing but gave them an opportunity to amend the plan. On June 21, 1989 the bankruptcy judge dismissed the case with prejudice for failure to file an amended plan that would cure Landmark's mortgage arrearage. With the stay provision now lifted, 11 U.S.C. Sec. 362(c)(2)(B) (1988), Landmark scheduled a sheriff's sale of the Pruitt home for October 4.
On July 5, 1989, the Pruitts filed a notice of appeal in the Western District of Pennsylvania. While the appeal was pending, the Pruitts moved to enjoin Landmark's foreclosure proceedings on their home. 1
On September 20, 1989, the district judge conducted a hearing in this matter. At the conclusion of the hearing, he stayed Landmark's foreclosure proceedings against the Pruitts. 2 The order did not articulate reasons for granting the stay; nor did it require security from the Pruitts.
On review, it is unclear whether the district judge acted in his appellate capacity or under his original jurisdiction, having first implicitly withdrawn the reference of the case to the bankruptcy court. Under the Bankruptcy Code, the district court may withdraw the reference of a bankruptcy case on its own motion for cause shown. 28 U.S.C. Sec. 157(d) (Supp. V 1987). The order signed by the district judge does not specify under which authority he was acting. Therefore, we look to the court's statements at the hearing:
* * * * * *
I'll tell you what we're going to do. We're going to stay all proceedings, including the mortgage foreclosure, until we get an accounting. We're operating not on a permanent injunction request but operating as bankruptcy. We have the right to supervise what goes on over there in bankruptcy in this Court and we're going to exercise our power, and we're going to stay this, and we're going to put it in writing....
Although we cannot be certain, it appears that the district court believed that he had taken control of this case ( ) Based on our review of the court's statements, we conclude the district judge withdrew the reference and acted through his original jurisdiction.
Although Landmark's notice of appeal to this court fails to question specifically the oral order withdrawing the reference or the written order granting the stay, its brief addresses both orders. Landmark challenges the first order because it was granted without a showing of cause, and the second order, which it classifies as an injunction, because it was granted without assessing security or articulating reasons. See Fed.R.Civ.P. 65(c), (d). Because we conclude the withdrawal--on whose authority this stay was premised--was inappropriate, we need not consider the stay; we will treat this appeal as one from the withdrawal of reference order only. 3
Because of the unusual procedural posture of this case, a brief review of the jurisdictional framework in bankruptcy is appropriate. The district courts have "original and exclusive jurisdiction of all cases under title 11" as well as "original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11." 28 U.S.C. Sec. 1334(a) & (b) (Supp. V 1987). "The filing of a petition for relief constitutes commencement of the title 11 case." 1 Collier on Bankruptcy p 3.01[c][i], at 3-20 (15th ed. 1990). In addition, confirmation of a repayment plan proposed pursuant to Chapter 13 is a "civil proceeding[ ] arising under title 11, or arising in ... [a] case[ ] under title 11." Id. p 3.01[c][iii], at 3-25 to 3-26, -[v], at 3-29. Therefore, the district court had subject matter jurisdiction.
Under 28 U.S.C. Sec. 157(a) (Supp. V 1987), "[e]ach district court may provide that any or all cases under title 11 and any or all proceedings arising under title 11 or arising in or related to a case under title 11 shall be referred to the bankruptcy judges for the district." By its General Order of Reference of October 16, 1984, the United States District Court for the Western District of Pennsylvania has provided for automatic reference to bankruptcy judges. See, e.g., In re Crane Automotive, Inc., 98 B.R. 233, 233 (Bankr.W.D.Pa.1989); In re Wheeling-Pittsburgh Steel Corp., 50 B.R. 969, 972-73 (Bankr.W.D.Pa.), aff'd, 52 B.R. 997 (W.D.Pa.1985), vacated, 791 F.2d 1074 (3d Cir.1986). On this authority, apparently, this case and its proceedings were referred to the bankruptcy judge.
"Bankruptcy judges may hear and determine all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11, referred under subsection (a) of this section, and may enter appropriate orders and judgments, subject to review under section 158 of this title." 28 U.S.C. Sec. 157(b)(1) (Supp. V 1987). As noted above, this is a case under title 11 and involves a civil proceeding "arising under title 11, or arising in a case under title 11." In addition, because the non-exclusive listing of core proceedings includes "confirmations of plans," 28 U.S.C. Sec. 157(b)(2)(L) (Supp. V 1987), the "core proceeding" requirement is satisfied. Under its authority, Sec. 157(b)(1), the bankruptcy judge dismissed the case and proceedings.
Appeals from orders of a bankruptcy judge are governed by 28 U.S.C. Sec. 158(a) (Supp. V 1987), which provides in part, "The district courts of the United States shall have jurisdiction to hear appeals from final judgments, orders, and decrees ... of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under section 157 of this title." As we have noted, this case and its proceedings were referred to the bankruptcy judge under Sec. 157. Dismissal with prejudice for failure to file a confirmable plan of repayment is a final judgment, order or decree. Cf. Maiorino v. Branford Sav. Bank, 691 F.2d 89, 90-91 (2d Cir.1982) (). Therefore, appeal to the district court was properly taken by the Pruitts. 4
Rather than address the appeal, the district court withdrew the reference and acting through its original jurisdiction, stayed the state foreclosure proceedings. In its appeal to this court, Landmark challenges the order...
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