Lewis v. U.S., Farmers Home Admin.

• Decision Date: 30 April 1993
• Docket Number: No. 92-2286,92-2286
• Citation: 992 F.2d 767
• Parties: , Bankr. L. Rep. P 75,240 Inalene LEWIS, Appellant, v. UNITED STATES of America, FARMERS HOME ADMINISTRATION, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 767

992 F.2d 767

24 Bankr.Ct.Dec. 339, Bankr. L. Rep. P 75,240

Inalene LEWIS, Appellant, v. UNITED STATES of America, FARMERS HOME ADMINISTRATION, Appellee.

No. 92-2286.

United States Court of Appeals,

Eighth Circuit.

Submitted Jan. 11, 1993.

Decided April 30, 1993.

Robert D. Banfield, Washington, DC, argued, for appellant.

Mark W. Webb, Fort Smith, AR, argued, for appellee.

Before MAGILL, LOKEN, and HANSEN, Circuit Judges.

MAGILL, Circuit Judge.

This appeal arises from a district court decision affirming a bankruptcy court's order. The bankruptcy court order neither confirmed a final payment plan nor did it dismiss the underlying bankruptcy petition. Rather, the bankruptcy court outlined the acceptable elements of a plan and gave the debtor ten days in which to submit a conforming plan or face dismissal of her case if she failed to adhere to the court-imposed payment schedule. Before submitting a conforming plan, the debtor immediately appealed. The district court affirmed and the debtor appealed to this court. We hold that we lack jurisdiction to consider this case because there has not been a final decision rendered by the bankruptcy court.

I.

In May 1980, Inalene Lewis' daughter, Jacqueline, executed a promissory note and real estate mortgage in favor of the Farmers Home Administration (FmHA) for a parcel of real property in Hot Springs, Arkansas (the Property). A house was constructed on the site. In July 1980, the FmHA approved interest credit assistance for Jacqueline Lewis. The assistance subsidized Jacqueline's payments, resulting in monthly payments of $134.

In May 1981, Inalene Lewis (hereinafter Lewis) executed an FmHA assumption agreement and interest credit agreement for the Property. The interest credit agreement subsidized Lewis' payments, resulting in monthly payments of $112. The interest credit agreement was renewed periodically, and was last renewed in June 1985, maintaining her $112 per month payments.

In April 1986, the FmHA informed Lewis that her interest credit had been terminated because her home was no longer below moderate home standards. Her monthly payments, no longer subsidized, were to rise to $353 beginning in July 1986. By early 1987, Lewis had become delinquent on the $353 monthly payments. The FmHA then accelerated her account.

Lewis objected to the termination of her interest credit subsidy and the acceleration. She requested and received an administrative hearing regarding her interest credit assistance and the acceleration of her account on November 30, 1987. A few days after the hearing, the FmHA hearing officer informed Lewis via letter that "the decision made by the District Director to accelerate your account for the reason, Monetary Default, is upheld." The letter contained information and instruction regarding Lewis' right to appeal the decision. The record does not indicate that Lewis pursued further administrative appeals.

In October 1988, the FmHA instituted a foreclosure action in United States District Court for the Western District of Arkansas against Lewis because she was delinquent in her account. Lewis filed a counterclaim in which she argued that her interest credit subsidy had been wrongfully terminated. The FmHA moved to dismiss Lewis' counterclaim and for summary judgment on its claim.

On March 1, 1990, the district court issued an order and a memorandum opinion. In its order, the district court granted the FmHA's motion to dismiss Lewis' counterclaim. The district court accepted the FmHA's argument that its decision to terminate Lewis' interest credit was wholly committed to agency discretion and could be reviewed only for violations of specific statutes or regulations. It stated that Lewis "completely fails to allege in her counterclaim that by cancelling her interest credit assistance, and thereby raising her installment payments, the FmHA has violated any statute or regulation." United States v. Lewis, No. 88-6113, slip op. at 3 (W.D.Ark. Mar. 1, 1990). Therefore, the district court held that it was without jurisdiction to consider Lewis' counterclaim.

Furthermore, in its memorandum opinion, the district court found that there was no question that Lewis was delinquent in her payments. The court noted that Lewis would still be delinquent even if her payments had remained at the subsidized rate. Therefore, the court granted summary judgment in favor of the FmHA. On March 27, 1990, the district court issued a decree of foreclosure requiring Lewis to pay the entire indebtedness adjudicated within ten days or a judicial sale of the Property would be held to satisfy the FmHA's judgment.

Lewis appealed the decisions of the district court to this court. In a one paragraph per curiam opinion, this court affirmed the decision of the district court. The crux of this court's opinion stated: "The District Court correctly found that even if Lewis were credited with the amount of interest-credit she contends was improperly revoked, she would still have been in default at the time the government moved for summary judgment on its foreclosure claim." United States v. Lewis, 923 F.2d 859 (8th Cir.1990) (per curiam).

On December 11, 1990, the day before the foreclosure sale was to take place, Lewis filed a pro se petition for relief under Title 11 of the United States Bankruptcy Code to reorganize her debts under Chapter 13. In her petition, Lewis proposed a plan which included monthly payments of $112, the same amount as the payment level which included the interest credit subsidy terminated back in 1986. The FmHA and the bankruptcy trustee objected to the plan. The FmHA objected, among other things, because the issue of Lewis' entitlement to continued interest credit subsidies had already been adjudicated in the foreclosure proceedings and, therefore, was barred from reconsideration in the bankruptcy court by the doctrine of res judicata.

On May 13, 1991, the United States Bankruptcy Court, Western District of Arkansas issued an order. Included in the order was the following finding: "The court has taken judicial notice of [the district court's] Foreclosure Decree and Judgment, and the parties are bound by the findings in said Decree and Judgment." In re Lewis, No. HS-90-374F, slip op. at 2 (Bankr.W.D.Ark. May 13, 1991). The order concluded as follows:

The objections to confirmation filed by the United States and the Trustee are sustained and debtor is granted 10 days to modify her plan consistent with this order. Any such modified plan shall contain the following:

(a) Debtor must provide to cure the delinquency owed to Farmers Home Administration in the sum of $21,265.74 within 60 months, which is the sum of $354.43 per month. In addition, debtor must pay regular monthly payments to Farmers Home Administration in the sum of $353 for a total payment to Farmers Home Administration of $707.43, per month.

(b) The debtor must pay monthly at least $743.71 to the trustee, beginning not later than June 20, 1991, and due by the 20th day of each month thereafter until the plan is completed. Payment must be made by money order or cashier's check. If any payment is not made in a timely fashion, this court finds the debtor's plan is not feasible, and an Ex Parte Order will be entered dismissing this case with prejudice.

Id. at 2-3.

The same day that the bankruptcy court's written order was filed and before any modified plan was submitted, Lewis filed a notice of appeal to the district court. At the district court level, Lewis argued that the interest credit issue had never been adjudicated on the merits, and the bankruptcy court erred in holding that it was bound by the foreclosure action. The FmHA renewed its argument that Lewis' attempt to revive the interest credit issue was barred by res judicata. In relevant part the district court held as follows:

Final judgment on the merits precludes the relitigation of a claim on any grounds raised before or on any grounds which could have been raised in the prior action. Poe v. John Deere Co., 695 F.2d 1103, 1105 (8th Cir.1982), citing Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 398 [101 S.Ct. 2424, 2427, 69 L.Ed.2d 103] (1981). Ms. Lewis contends that the interest credit issue was not adjudicated because it was dismissed upon lack of subject matter jurisdiction. However, this court points Ms. Lewis to the Eighth Circuit ruling that states, "[t]he District Court correctly found that even if Lewis were credited with the amount of interest-credit she contends was improperly revoked, she would still have been in default at the time the government moved for summary judgment on its foreclosure." Ms. Lewis's interest credit argument was found to be irrelevant by the Eighth Circuit because even with the interest credit deduction, she was still in default on her mortgage payments.

Ms. Lewis now seeks to receive interest credit deductions in her bankruptcy action. "Having failed to recover on one theory of recovery, a litigant cannot attempt to relitigate the same claim under a different theory of recovery." Poe v. John Deere Co., 695 F.2d 1103, 1105 (8th Cir.1982) (citations omitted). This court affirms the bankruptcy court's determination that it was bound by this district court's judgment and the judgment of the Eighth Circuit finding Ms. Lewis in default of her mortgage payments.

Lewis v. United States, No. 91-6137, slip op. at 3-4 (W.D.Ark. May 7, 1992). In all other respects, the district court affirmed the decision of the bankruptcy court.

Lewis now appeals from the order of the district court affirming the bankruptcy court's opinion.

II.

This court and the district court's jurisdiction to hear appeals from bankruptcy courts is defined by 28 U.S.C. § 158. Section 158(a) states: "The district courts of the United States shall have jurisdiction to hear appeals from final judgments, orders, and decrees, and, with leave of the court, from interlocutory orders and decrees, of bankruptcy...