Unioil, In re

Citation948 F.2d 678
Decision Date04 November 1991
Docket NumberNo. 90-1111,90-1111
Parties, 25 Collier Bankr.Cas.2d 1493, 21 Fed.R.Serv.3d 1444, Bankr. L. Rep. P 74,336 In re UNIOIL, Debtor. DALTON DEVELOPMENT PROJECT # 1, Appellant, v. UNSECURED CREDITORS COMMITTEE, Creditor-Appellee, and Unioil, a Nevada Corporation, Debtor-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

Thomas J. Kimmell (John M. Cogswell, with him on the brief) of Cogswell and Eggleston, P.C., Denver, Colo., for appellant.

Edwin G. Perlmutter (M. Frances Cetrulo, with him on the brief) of Berenbaum & Weinshienk, P.C., Denver, Colo., for creditor-appellee.

Jack M. Merritts (Thomas C. Deline, with him on the brief) of Montgomery, Little, Young, Campbell & McGrew, Englewood, Colo., for debtor-appellee.

Before TACHA and EBEL, Circuit Judges, and VAN BEBBER, District Judge. *

VAN BEBBER, District Judge.

This is an appeal from the order of the United States District Court for the District of Colorado affirming the bankruptcy court's decision to set aside certain assignments of interests in oil and gas properties. We affirm in part, reverse in part, and remand the case for further proceedings.

I. FACTS

Unioil is an oil and gas exploration and operating company which filed its voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq., on August 17, 1984. Prior to and after the filing of its petition in the bankruptcy court, Unioil held legal and equitable interests in various oil and gas properties located in Larimer, Weld, and Yuma Counties, Colorado. (R.Vol. I, doc. 27 at 1-2.)

In March, 1985, the Unsecured Creditors Committee ("Creditors Committee") discovered that Unioil's vice-president, Melvin Lloyd Richards ("Richards"), was engaging in unauthorized post-petition transfers and payments. In response, the Creditors Committee and Unioil's largest creditor, Dowell-Schlumberger, Inc., filed joint motions with the bankruptcy court, seeking the appointment of a trustee and preliminary and permanent injunctions against Unioil and Richards prohibiting further transfers of Unioil's property. (R.Vol. IV at 24-25.)

A compromise was reached and a Stipulation of Settlement was entered into among Unioil, Dowell-Schlumberger, Inc., the Creditors Committee, and an eventual lender to Unioil, Joseph Associates, Inc., on March 27, 1985. (R.Vol. I, doc. 9, Ex. A.) The stipulation provided that Larry L. Snodgrass would be appointed to monitor Unioil's operations and to countersign any checks above $750. (Id.) The stipulation further provided that:

5. Unioil shall make no transfers of real or personal property without the prior order of the United States Bankruptcy Court for the District of Colorado or the prior written agreement of Unioil, Dowell-Schlumberger, Incorporated and the Creditors Committee which is approved by order of court.

The stipulation was subsequently approved and made an order of the bankruptcy court. (R.Vol. I, doc. 27 at 3.)

In June and July, 1985, Richards executed assignments of Unioil's interests in the Colorado oil and gas properties to various limited partnerships ("Partnerships") with which Unioil, Richards and other officers of Unioil were affiliated. 1 (R.Vol. IV at 29-30.) The assignments were made without the knowledge or approval of the Creditors Committee and Dowell-Schlumberger, Inc., and were never approved or authorized by the bankruptcy court.

In August, 1985, Unioil's Plan of Reorganization was confirmed and a closing was held on September 22, 1985. (R.Vol. I, doc. 3.) The unauthorized assignments were then discovered by the Creditors Committee during its attempt to foreclose on the Yuma County properties in April, 1987. Contending that the assignments were made outside the course of ordinary business and in violation of the bankruptcy court's order, the Creditors Committee filed a motion on April 2, 1987, asking the bankruptcy court to set aside the assignments made to four different limited partnerships. (R.Vol. I, doc. 4.) On July 23, 1987, Unioil joined in the motion of the Creditors Committee and also moved to set aside all of the assignments made to the Partnerships. (R.Vol. I, doc. 9.)

On September 29, 1987, the bankruptcy court conducted a hearing on these motions. At the hearing, the Partnerships stipulated that the assignments had been made in violation of the bankruptcy court's order and the March 27, 1985, Stipulation of Settlement. (R.Vol. IV at 25.) On December 7, 1987, the bankruptcy court entered an order setting aside the assignments, dismissing any lis pendens by the limited partnerships against the properties, and discharging and forever barring the claims of the Partnerships in the bankruptcy. (R.Vol. I, doc. 26.)

The bankruptcy court found that, as stipulated to at the hearing, the transfers of Unioil's interests to the Partnerships violated the March, 1985, stipulation and order of the bankruptcy court. The court also found that the assignments were outside the ordinary course of the debtor's business, and would have required notice and a hearing even without the March, 1985, stipulation and order. As for the Partnerships' entitlement to the assignments, the court found that the evidence presented at the hearing was inconclusive as to the amount of money invested by the Partnerships in the oil and gas wells. The court further found that the Partnerships and their limited partners had knowledge of Unioil's bankruptcy and that, despite such knowledge, no claims were filed by the Partnerships or the limited partners before the time for filing claims had expired on December 31, 1984, or before the time for filing amended claims had expired on February 28, 1985. (R.Vol. I, doc. 27, at 1-5.)

Based on these findings, the bankruptcy court made the following conclusions of law: The oil and gas interests were property of Unioil's estate under 11 U.S.C. § 541. 2 The assignments were void because they had been made without the court's approval and were outside the ordinary course of the debtor's business. The execution of the assignments by Richards was ultra vires and therefore, did not bind Unioil. The Partnerships and the limited partners were creditors of Unioil under 11 U.S.C. § 101(9)(A). 3 Because the Partnerships had actual knowledge of Unioil's bankruptcy and had failed to file any claims, their claims were forever barred, and they were bound by Unioil's plan of reorganization. Finally, the Partnerships had slept on their rights and therefore, were not entitled to any equitable relief. (Id. at 5-7.)

On March 14, 1990, the district court entered an order affirming the decision of the bankruptcy court to set aside the assignments. The district court held that the bankruptcy court's decision to set aside the assignments was a valid exercise of the bankruptcy court's equitable power to enforce its own orders. The district court also found that the bankruptcy court's findings of fact were not clearly erroneous. Because the district court found that the bankruptcy court had the authority to enforce its own orders, the district court concluded that it was not necessary to reach the other issues raised by the Partnerships and affirmed the bankruptcy court's decision. (R.Vol. III, doc. 4.)

II. STANDARDS OF REVIEW

In reviewing the decision of the bankruptcy court, the district court is bound to accept the bankruptcy court's findings of fact unless they are clearly erroneous, but may examine its conclusions of law de novo. In re Branding Iron Motel, Inc., 798 F.2d 396, 399-400 (10th Cir.1986). A bankruptcy court's factual determinations will not be disturbed on appeal absent "the most cogent reasons appearing in the record." In re Reid, 757 F.2d 230, 233-34 (10th Cir.1985).

We likewise review the bankruptcy court's factual findings under the clearly erroneous standard, while its conclusions of law are reviewable de novo. In re Mullet, 817 F.2d 677, 678-79 (10th Cir.1987).

III. DISCUSSION

Our jurisdiction over this appeal arises pursuant to 28 U.S.C. § 158(d). However, as an initial matter, we must determine whether the notice of appeal filed in this case is sufficient to confer appellate jurisdiction over all of the plaintiff partnerships or only over the appeal of plaintiff Dalton Development Project No. 1 ("Dalton Development") pursuant to Fed.R.App.P. 3(c).

Federal Rule of Appellate Procedure 3(c) requires that "[t]he notice of appeal shall specify the party or parties taking the appeal." Failure to name a party in a notice of appeal constitutes a failure of that party to appeal and will result in dismissal of the appeal for lack of appellate jurisdiction. Torres v. Oakland Scavenger Co., 487 U.S. 312, 314, 317, 108 S.Ct. 2405, 2407, 2409, 101 L.Ed.2d 285 (1988); Laidley v. McClain, 914 F.2d 1386, 1388-90 (10th Cir.1990).

The notice of appeal filed in this case identifies the appellants as "Appellant Partnerships, Dalton Development Project No. 1 et al. and other partnerships." (R.Vol. III, doc. 6.) Dalton Development contends that this designation is sufficient to constitute an appeal by all of the partnerships affected. However, the Supreme Court has specifically held that use of the phrase "et al." utterly fails to provide notice of the identity of the appellants. Torres, 487 U.S. at 318, 108 S.Ct. at 2409. Accordingly, we conclude that the appeals of the partnerships which are not specifically named in the notice of appeal must be dismissed for lack of jurisdiction. We have jurisdiction only over the appeal of Dalton Development, as the sole partnership specifically named in the notice of appeal, and proceed to address the merits of that appeal.

On appeal, Dalton Development argues that the district court committed reversible error in affirming the bankruptcy court's decision to set aside the assignments. It also argues that the district court erred in affirming the bankruptcy court's finding that Dalton Development's claims were...

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