Colorado Energy Supply, Inc., Matter of, 83-1610

• Citation: 10 C.B.C.2d 542,728 F.2d 1283
• Decision Date: 06 March 1984
• Docket Number: No. 83-1610,83-1610
• Parties: 10 Collier Bankr.Cas.2d 542, 11 Bankr.Ct.Dec. 1197, Bankr. L. Rep. P 69,743 In the Matter of COLORADO ENERGY SUPPLY, INC., et al., Debtors. NATIONAL ACCEPTANCE COMPANY OF AMERICA, and Colorado Energy Supply Inc., et al., Appellees, v. Obed PRICE, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 1283

728 F.2d 1283

10 Collier Bankr.Cas.2d 542, 11 Bankr.Ct.Dec. 1197,

Bankr. L. Rep. P 69,743

In the Matter of COLORADO ENERGY SUPPLY, INC., et al., Debtors.

NATIONAL ACCEPTANCE COMPANY OF AMERICA, and Colorado Energy

Supply Inc., et al., Appellees, v. Obed PRICE, Appellant.

No. 83-1610.

United States Court of Appeals, Tenth Circuit.

March 6, 1984.

Stephen E. Kapnik, Lohf & Barnhill, Denver, Colo., for appellees.

Kimber Z. Smith, Sonheim, Helm & Less, Arvada, Colo., for appellant.

Before SETH, Chief Judge, and HOLLOWAY and DOYLE, Circuit Judges.

WILLIAM E. DOYLE, Circuit Judge.

The case which we are called upon to review is a bankruptcy matter having to do with property of certain debtors, Colorado Energy Supply and Mor Pri, Inc. On February 1, 1983, following the sale of the debtors' property, the Bankruptcy Court for the District of Colorado took jurisdiction and issued an order in which it disbursed proceeds of sale proceeds to the auctioneer, appellee National Acceptance Company, and allowed certain allowable costs. Denied was any disbursement to appellant, Obed Price, the debtor Mor Pri's landlord. The bankruptcy court ruled that Price's claim for rent was not an allowable cost of sale. Price was referred to his remedy against the debtor's estate pursuant to 11 U.S.C. Sec. 503. For a number of reasons the claim of Price was not granted.

Following the entry of the judgment by the bankruptcy court, Price filed notice of appeal and simultaneously filed a motion for an extension of time for filing the notice of appeal pursuant to Federal Rule of Bankruptcy 802. The difficulty was that notice of appeal was not filed until after the period allowed by Bankruptcy Rule 802(a). In addition, the motion for extension was filed out of time. The motion, however, alleged excusable neglect. Very soon thereafter the bankruptcy court ruled that the motion for extension of time was moot and that the filing of the notice of appeal divested the bankruptcy court of jurisdiction to consider the motion.

Later, on February 22, 1983, the appellant filed notice of appeal in the district court of the February 18 order. It also filed a motion to approve an extension of time to file the notice of appeal under Rule 802(c). On March 7, 1983 the district court dismissed the appeal on the ground that the appellant had failed in the bankruptcy court to timely file a motion for an extension of time under Rule 802(c). Subsequently there was a denial of appellant's motion for reconsideration and the present appeal in this court took place.

The contentions of Price are generally as follows.

1. That the instant proceeding was related to Title 11 and therefore did not become final until approved by the district court;

2. That the motion of Price for an extension of time ought to have been granted; and

3. The Interim Operating Rule which adopted the Bankruptcy Rules in order to carry on the bankruptcy proceedings were said to have deprived Price of substantive rights.

Our conclusion is that the arguments made are not meritorious and further we are of the opinion that the district court and the bankruptcy court should be affirmed.

In general Mr. Price, through his attorney, seeks to obtain a broad scale ruling as to the holding in Northern Pipeline Const. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), so that Price can keep his claim alive. Otherwise he must abide by the ruling of the bankruptcy court which was against him on procedural matters.

The effect of the appeal is to seek a broad interpretation of Marathon, supra, so as to obtain a ruling that there is no jurisdiction whatsoever in the bankruptcy court to render a final order regarding the problem that is presented here.

Even though the essence of the problem here deals with a pure bankruptcy matter, in which the court was called upon to administer a bankrupt estate, and the orders were of this character, the appellant, nonetheless, maintains that this is in fact and in law an adversary, sometimes called a related proceeding and, thus, only an Article III court can decide it. This we refuse to do because it would repudiate the Marathon case, which in essence properly takes a very narrow view of the difference between a related proceeding which must be filed and tried in a state or federal Article III court and which is beyond the jurisdiction of a bankruptcy court, and a bankruptcy proceeding. In other words if we follow the suggestion of Mr. Price, we would have to hold that virtually all matters before the bankruptcy court are related matters which can be determined only by a court of unlimited jurisdiction like the state court or the federal court, in which jurisdiction is based upon Article III of the Constitution. It is not possible to reach the conclusion which has been recommended.

Bankruptcy Rule 801 demands that an appellant file a notice of appeal from a judgment or order of the bankruptcy court, if it wishes to appeal, in accordance with Rule 802. Rule 801 makes clear that compliance with the filing requirement is an absolute prerequisite to the district court's jurisdiction to hear the appeal. Rule 802 provides:

The notice of appeal shall be filed within 10 days of the date of the entry of the judgment or order appealed from.... The referee may extend the time for filing the notice of appeal by any party for a period not to exceed 20 days from the expiration of the time otherwise prescribed by this rule.

A request to extend the time for filing a notice of appeal must be made before such time has expired, except that a request made after the expiration of such time may be granted upon a showing of excusable neglect if the judgment or order does not authorize the sale of any property.

There is no dispute whatsoever about the lateness of the filing of the notice of appeal. Nor can it be disputed that the appellant sought to get an extension of time and did so after the 10 day period prescribed by the law. The rule just referred to requires that these documents be filed prior to the running of the 10 day period. But, as indicated, there was not a timely filing of either the notice of appeal or the request for an extension. The date in question depends on whether the case is one arising under Title 11 or a case related to Title 11. The Marathon opinion holds that "related proceedings" must be adjudicated by Article III courts. Related proceedings as referred to in Marathon, supra, are adversary cases or controversies which are triable only by Article III courts or state courts. See Marathon, 458 U.S. at 92, 102 S.Ct. at 2882. The court's holding is quite limited. It pertains only to the proposition that a "traditional state common-law action, not made subject to a federal rule of decision, and related only peripherally to an adjudication of bankruptcy under federal law, must, absent the consent of the litigants, be heard by an Article III court if it is to be heard by any court or agency of the United States." Marathon, 458 U.S. at 92, 102 S.Ct. at 2882 (Chief Justice Burger, dissenting). The bankruptcy courts may adjudicate claims arising directly out of Title 11. Consistent with Marathon, the Interim Operating Rule has defined related proceedings, that is, proceedings other than matters heard by the bankruptcy court...