General Development Corp., In re
| Decision Date | 07 June 1996 |
| Docket Number | No. 95-4379,95-4379 |
| Citation | 84 F.3d 1364 |
| Parties | In re GENERAL DEVELOPMENT CORPORATION, Debtor. John E. SIPES; Mildred B. Sipes, Plaintiffs-Appellants, v. ATLANTIC GULF COMMUNITIES CORPORATION; General Development Corporation, Defendants-Appellees. Non-Argument Calendar. United States Court of Appeals, Eleventh Circuit |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Jennifer S. Carroll, Metzger, Sonneborn & Rutter, P.A., West Palm Beach, FL, for appellants.
Kenneth Bruce Robinson, Arthur J. England, Jr., Christopher L. Kurzner, Greenberg, Trauig, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, FL, for Atlantic Gulf Communities Corp. and General Development Corp.
Appeal from the United States District Court for the Southern District of Florida. (No. 94-95 CIV-SMA), Sidney M. Aronovitz, Judge.
Before TJOFLAT, Chief Judge, and KRAVITCH and HATCHETT, Circuit Judges.
We affirm on the basis of the opinion of the district court, dated January 27, 1995, 177 B.R. 1000. The relevant portions of the district court's opinion are attached as an appendix.
AFFIRMED.
APPENDIX
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
IN RE: GENERAL DEVELOPMENT CORPORATION, et al., Debtors.
JOHN E. SIPES AND MILDRED B. SIPES, Appellants,
vs.
GENERAL DEVELOPMENT CORPORATION, n/k/a ATLANTIC GULF
COMMUNITIES CORPORATION, Appellee.
Case No. 94-0095-CIV-ARONOVITZ
JAN 27 1995
ORDER ON PENDING MOTIONS AND AFFIRMING THE BANKRUPTCY
COURT'S ORDER GRANTING ATLANTIC GULF'S MOTION TO ENFORCE
PLAN AND CONFIRMATION ORDER, AND DENYING MOTION FOR EX PARTE
BEFORE THIS COURT is an appeal from the Bankruptcy Court's Order Granting Atlantic Gulf's Motion to Enforce Executory Contract, Discharge and Injunction Provisions of Plan and Confirmation Order, and Denying Motion for Ex Parte Relief from the Automatic Stay, dated November 5, 1993. In addition, currently pending before the Court are three motions: (1) Appellee General Development Corporation's ("GDC") Motion to Strike Appendix A, Appendix B and Appendix C to Appendix to Appellants' Reply Brief, file dated April 4, 1994; (2) Appellee GDC's Motion to Supplement Appellate Record, file dated April 4, 1994; and (3) Appellants' John E. Sipes and Mildred B. Sipes (the "Sipes") Motion to Supplement Appellate Record, file dated April 21, 1994.
This Court heard oral argument on this appeal on October 7, 1994, and has carefully considered all briefs submitted on appeal, oral argument of counsel, the entire record including but not limited to the three pending motions and responses filed thereto, applicable law and is otherwise fully advised in the premises. For the following reasons, it is ORDERED AND ADJUDGED that:
1. Appellee GDC's Motion to Strike Appendix A, Appendix B and Appendix C to Appendix to Appellants' Reply Brief be, and the same, is hereby GRANTED IN PART. Only Appendix C to Appendix to Appellants' Reply Brief shall be stricken from the appellate record, and Appendix A and B shall be considered part of the appellate record.
2. Appellee GDC's Motion to Supplement Appellate Record be, and the same, is hereby GRANTED.
3. Appellants Sipes' Motion to Supplement Appellate Record be and the same, is hereby DENIED.
4. The Bankruptcy Court's Order Granting Atlantic Gulf's Motion to Enforce Executory Contract, Discharge and Injunction Provisions of Plan and Confirmation Order, and Denying Motion for Ex Parte Relief from the Automatic Stay, dated November 5, 1993, is hereby AFFIRMED in its entirety.
The Sipes appeal from an Order Granting Atlantic Gulf's Motion to Enforce Executory Contract, Discharge and Injunction Provisions of Plan and Confirmation Order, and Denying Motion for Ex Parte Relief From the Automatic Stay, entered by the Honorable A. Jay Cristol, United States Bankruptcy Judge and dated November 5, 1993. By this Order, Judge Cristol ruled, among other things, that an installment land sale contract between the Sipes and Debtor GDC was an executory contract subject to rejection by GDC pursuant to § 365 of the Bankruptcy Code.
The installment land sales contract at issue, entitled the "Homesite Purchase Agreement", was entered into by the Sipes and GDC for the sale of a homesite in Port St. Lucie, Florida (the "Property") on July 15, 1972. The Agreement provided that GDC would deliver to the purchaser a Warranty Deed once the purchaser made all monthly payments. The Sipes completed all of their payments due under the contract in March of 1983. However, due to alleged construction delays, the homesite remained undeveloped as of December of 1987.
GDC and its affiliates and subsidiaries ultimately filed voluntary Chapter 11 petitions on April 6, 1990. On October 26, 1990, the Bankruptcy Court approved GDC's proposed Homesite Purchaser Assurance Program (the "Program"), which set forth a mechanism to assure purchasers that they will receive their deeds upon payment of a reduced purchase price. Under the Program, purchasers such as the Sipes whose homesites were on land which GDC did not intend to develop were afforded the option to participate in the Program and have their contract transferred to a developed lot. The Sipes declined to participate and as a result, GDC rejected the Sipes' Homesite Purchase Agreement on June 19, 1992. The Sipes filed an objection to the rejection on July 9, 1992.
Meanwhile, on March 27, 1992, GDC's reorganization plan was confirmed. The GDC Plan provided that homesite purchasers whose contracts were rejected would receive a Class 2.2 (secured) claim in respect to their lien rights under § 365(j) of the Code, a Class 10 (unsecured) claim in respect of prepetition principal and interest payments not covered by § 365(j), and an administrative claim for any payments made after filing date. The Confirmation Order provided that "all of the property of the estate, wherever situated, is vested in the Reorganized Company, free and clear of all claims and interests of creditors and of security equity holders, except as provided in the Plan and this Order." It also discharged all prepetition debts and enjoined all persons from recovering on their claim.
On June 20, 1992, GDC sent the Sipes a special proof of claim form, calculating the Sipes' claim to be $5,088.00. The Sipes disagreed and asserted a claim of $5,096.26. In November of 1992, the Sipes filed a state court action against GDC, seeking specific performance and damages. The action was dismissed with prejudice due to GDC's pending bankruptcy.
After learning of GDC's efforts to replat and redevelop the subdivision in which their property is located, the Sipes filed in the bankruptcy court a pro se Motion for Ex Parte Relief From the Automatic Stay on September 24, 1993. GDC thereafter filed a motion to enforce the executory contract, discharge and injunction provisions of the Confirmation Order against the Sipes. GDC sought an order (i) declaring that any claim or interest of the Sipes in the Property was terminated by GDC's rejection of the Homesite Purchase Agreement and that the Property vested in Atlantic Gulf free and clear of any interest or claim of the Sipes; (ii) declaring that any prepetition claim of the Sipes was discharged pursuant to the Confirmation Order and § 1141(d) of the Code; and (iii) enjoining the Sipes from seeking to enforce or assert an interest in the Property and from interfering with GDC's use and development thereof.
Following a hearing on the two motions, Judge Cristol denied the Sipes' ex parte motion and granted GDC's enforcement motion. He found that the Agreement was an executory contract subject to rejection under 11 U.S.C. § 356(a) and that the Property was vested in Atlantic Gulf free and clear of any interest of claim of the Sipes. He also enjoined the Sipes from asserting an interest in the property or otherwise interfering with Atlantic Gulf's use and development of the Property. The Sipes appeal this Order.
As noted herein, also pending before this Court are three motions: (1) Appellee GDC's Motion to Strike Appendix A, Appendix B and Appendix C to Appendix to Appellants' Reply Brief; (2) Appellee GDC's Motion to Supplement Appellate Record; and (3) Appellants Sipes' Motion to Supplement Appellate Record.
In the course of examining the record, the appellate briefs and the outstanding motions in preparation for oral argument on the merits of the appeal, it became apparent that the Bankruptcy Court's Order on appeal was devoid of any factual findings to support its ruling with respect to the Appellants' procedural due process claim. This claim was raised at the trial level in the Response to Reorganized Debtors' Motion to Enforce Executory Contract, Discharge and Injunction Provisions of Plan and Confirmation Order, dated October 26, 1993.
In addition, it was apparent that the Bankruptcy Court's Order contained no citations to authority to support its ruling that the Homesite Purchase Agreement at bar was an executory contract subject to rejection pursuant 11 U.S.C. § 365. No citations to legal authority, other than "courts and commentators alike," and no findings of fact were made to support the ruling. Issues of fact therefore remained undetermined. Accordingly, on May 11, 1994, this Court entered an Order remanding this case to the United States Bankruptcy Court to (1) hold an evidentiary hearing and make findings of fact and conclusions of law regarding the Appellants' procedural due process claim, and to determine which documents should be admitted into the record on that issue; and (2) to make findings of fact and further conclusions of law, and to hold an evidentiary hearing if necessary, regarding the issue of whether the Homesite Purchase Agreement at issue was an executory contract for rejection purposes under § 365 of the Bankruptcy Code. On September 16, 1994, the Bankruptcy Court entered its...
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