96 F.3d 1451 (9th Cir. 1996), 95-55000, Matter of Indian Wells Estates, Inc.
|Citation:||96 F.3d 1451|
|Party Name:||In re INDIAN WELLS ESTATES, INC., a California corporation; Indian Mountain Meadows, Inc., a California corporation; KEM, Inc., a California corporation; VEK, Inc., a California corporation, Debtors. David A. GILL, Chapter 11 Trustee; Committee of Creditors Holding Unsecured Claims, Appellants, v. INDIAN WELLS ESTATES, INC., a California corporatio|
|Case Date:||September 03, 1996|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted May 9, 1996.
78 A.F.T.R.2d 96-6465, 96-2 USTC P 50,521
Appeal from the United States District Court for the Central District of California, D.C. No. CV-93-04383-RMT; Robert M. Takasugi, District Judge, Presiding.
Before: HALL, O'SCANNLAIN, and KLEINFELD, Circuit Judges.
The Committee of Creditors Holding Unsecured Claims in the Indian Wells Estates, Inc. bankruptcy case (the "Committee") appeals the district court's order, which (1) reversed the bankruptcy court's order denying the United States' motion to reconsider the court's prior order disallowing the entire amount of prepetition interest claimed by the Internal Revenue Service ("IRS"), and (2) remanded to the bankruptcy court to determine the correct amount of interest. The action arose out of the objection filed by Chapter 11 Trustee David Gill to the IRS' proofs of claims for prepetition interest against the bankruptcy estates of Indian Wells and KEM, Inc.
Although the parties do not dispute our subject matter jurisdiction over the appeal, we must consider sua sponte whether we have jurisdiction over this district court judgment, which reverses a bankruptcy court order and remands for further proceedings. See In re Dominguez, 51 F.3d 1502, 1506 (9th Cir.1995) ("this court must consider sua sponte whether it has jurisdiction over this [bankruptcy] appeal"); see also Vylene Enterprises, Inc. v. Naugles, 968 F.2d 887, 889 (9th Cir.1992).
In order for this court to assert jurisdiction under 28 U.S.C. § 158(d), 1 the orders of both the bankruptcy court and the district court must be final. In re Stanton, 766 F.2d 1283, 1285 (9th Cir.1985); see also In re Kelly, 841 F.2d 908, 911 (9th Cir.1988). Here, the bankruptcy court's order (allowing the tax claims as unsecured priority claims and disallowing prepetition interest) was final because it "left nothing to be resolved" and "ended the adversary proceeding." Stanton, 766 F.2d at 1286. The more difficult question is whether the district court's reversal and remand constituted a final order that may be appealed to this court. Id.
To determine the finality of an order under 28 U.S.C. § 158(d), this court balances the following considerations: (1) need to avoid piecemeal litigation; (2) judicial efficiency; (3) systemic interest in preserving bankruptcy court's role as fact-finder; and (4) whether delaying review would cause either party irreparable harm. In re Lakeshore Village Resort, Ltd., 81 F.3d 103, 106 (9th Cir.1996) (citing Vylene, 968 F.2d at 895-96); see In re Stanton, 766 F.2d 1283, 1287 (9th Cir.1985) ("[if] we take jurisdiction before [the remand for factual development] is concluded, we interfere with the bankruptcy court's fact-finding role.... [and] we are likely to be faced with an inadequate factual record, making it difficult to identify the controlling legal issues").
A district court's order is ordinarily not final " 'when the district court remands for further factual findings related to a central issue raised on appeal.' " In re United Ins. Mgmt., Inc., 14 F.3d 1380, 1384 (9th Cir.1994) (quoting Bonner Mall Partnership v. U.S. Bancorp Mortgage Co., 2 F.3d 899, 904 (9th Cir.1993), dismissed as moot, 115 S.Ct. 386 (1994) (dismissing as moot, but declining to vacate Ninth Circuit opinion)). However, we will " 'assert jurisdiction even though a district court has remanded a matter for factual findings on a central issue if that issue islegal in nature and its resolution either (1) could dispose of the case or proceedings and obviate the need for factfinding; or (2) would materially aid the bankruptcy court in reaching its disposition on remand.' " Id. (quoting Bonner, 2 F.3d at 904).
Here, the bankruptcy court eventually received the information it needed to determine the amount of interest; the legal issue presented on appeal is whether the bankruptcy court erred in disallowing statutorily mandated prepetition interest on the ground that the IRS submitted its explanation of the interest computations in a motion for reconsideration. The remand to the bankruptcy court is limited to the determination of the correct amount of interest. See David G. Epstein et al., Bankruptcy § 12-12, at 884 (West 1993) (footnote omitted) ("examples of final orders [include] an order allowing a claim, even if the actual amount to be realized by the claim is undetermined").
Since the resolution of whether a bankruptcy court has the discretion to disallow prepetition interest on allowed tax claims involves a purely legal issue that is not dependent on the factual determinations required by the remand, the "policies of avoiding...
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