In re Harris, BAP No. WO-97-002

Decision Date09 July 1997
Docket NumberBankruptcy No. 96-12669-BH,Adversary No. 96-1319-BH.,BAP No. WO-97-002
Citation209 BR 990
PartiesIn re Amanda HARRIS, also known as Amanda Harris-Combs, Debtor. Amanda HARRIS, Plaintiff-Appellee, v. BENEFICIAL OKLAHOMA, INC., a Delaware corporation, Defendant-Appellant.
CourtU.S. Bankruptcy Appellate Panel, Tenth Circuit

COPYRIGHT MATERIAL OMITTED

Randy L. Goodman, Midwest City, OK, for Defendant-Appellant.

G. Patrick Garrett, Oklahoma City, OK, for Plaintiff-Appellee.

Before PUSATERI, CLARK, and MATHESON, Bankruptcy Judges.

OPINION

CLARK, Bankruptcy Judge.

Beneficial Oklahoma, Inc. ("Beneficial") appeals two orders of the United States Bankruptcy Court for the Western District of Oklahoma, one denying Beneficial's motion for summary judgment and one granting a cross-motion for summary judgment in favor of the Debtor. For the reasons set forth below, we conclude that the Bankruptcy Court properly denied Beneficial's motion for summary judgment, but erred in granting the Debtor's cross-motion for summary judgment. Accordingly, we affirm the Bankruptcy Court in part, reverse in part, and remand the case to the Bankruptcy Court for further proceedings.1

APPELLATE JURISDICTION

This Court, with the consent of the parties, has jurisdiction to hear appeals from "final judgments, orders, and decrees" of bankruptcy courts within the Tenth Circuit. 28 U.S.C. § 158(a)(1), (b)(1), and (c)(1). Neither party has opted to have this appeal heard by the United States District Court for the Western District of Oklahoma and, therefore, they have consented to our jurisdiction. Id. at § 158(c); 10th Cir. BAP L.R. 8001-1(a) and (e).

Moreover, the orders subject to review in this appeal are appropriate for review under section 158(a)(1). Ordinarily, the denial of Beneficial's motion for summary judgment would not be an appealable final order because it does not dispose of the entire case but requires it to be resolved at trial. See, e.g., Swint v. Chambers County Comm'n, 514 U.S. 35, 40-43, 115 S.Ct. 1203, 1207-1208, 131 L.Ed.2d 60 (1995); Schmidt v. Farm Credit Servs., 977 F.2d 511, 513 n. 3 (10th Cir.1992); see also Quackenbush v. Allstate Ins. Co., ___ U.S. ___, ___, 116 S.Ct. 1712, 1718, 135 L.Ed.2d 1 (1996) "A decision is ordinarily considered final and appealable under section 158(a)(1) only if it `ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'" (quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945)). The Tenth Circuit has made clear, however, that:

Where we reverse a summary judgment order in favor of one party, . . . we will review the denial of the other party\'s cross-motion for summary judgment under the same standards applied by the trial court so long as it is clear that the party opposing the cross-motion had an opportunity to dispute the material facts.

McIntosh v. Scottsdale Ins. Co., 992 F.2d 251, 253 (10th Cir.1993). Since we have determined that the order granting the Debtor's motion for summary judgment should be reversed, we will consider the order denying Beneficial's motion for summary judgment as the Debtor had an opportunity to dispute the facts asserted by Beneficial.

STANDARD OF REVIEW

The grant or denial of summary judgment is reviewed de novo. We apply the same standard used by the Bankruptcy Court under Federal Rule of Civil Procedure 56, as made applicable to bankruptcy proceedings by Federal Rule of Bankruptcy Procedure 7056. See e.g., United States v. Sackett, 114 F.3d 1050, 1051 (10th Cir.1997); Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir.1997); Benavidez v. City of Albuquerque, 101 F.3d 620, 623 (10th Cir.1996); Wolf v. Prudential Ins. Co. of America, 50 F.3d 793, 796 (10th Cir.1995); Meredith v. Beech Aircraft Corp., 18 F.3d 890, 893 (10th Cir.1994).

The propriety of rulings on evidentiary matters, although decided in the summary judgment context, are reviewed for abuse of discretion. Peck v. Horrocks Eng'rs, Inc., 106 F.3d 949, 956 (10th Cir.1997) (citing cases); Duffee By and Through Thornton v. Murray Ohio Mfg. Co., 91 F.3d 1410, 1411 (10th Cir.1996).

BACKGROUND

The chapter 7 Debtor commenced an adversary proceeding against Beneficial pursuant to 11 U.S.C. § 506(a) requesting a determination by the Bankruptcy Court "as to the validity and extent of the interest of Beneficial . . . in certain property of the estate and Debtor." In her complaint, the Debtor alleged that Beneficial had asserted a claim against the Debtor that was "secured by a purchase money security interest in certain property of the estate," and had filed an objection to the Debtor's claim of exemptions wherein it asserted a secured claim against the "property of the estate and/or Debtor." To the extent that Beneficial's claim was found to be unsecured by the Bankruptcy Court, the Debtor sought to "avoid the asserted lien pursuant to 11 U.S.C. § 506(d)."

Beneficial admitted the allegations set forth in the Debtor's complaint, but stated in its answer "that it holds a purchase money security interest in property held by the plaintiff debtor." Shortly after filing its answer, Beneficial filed a motion for summary judgment. It submitted with its motion a brief to which were attached copies of various documents. The motion was not supported by any affidavits, and the documents attached to the brief were not part of the Bankruptcy Court's record or authenticated in any way. See W.D. Okla. LR 7.1(h) ("Factual statements or documents appearing only in briefs shall not be deemed to be a part of the record in the case, unless specifically permitted by the Court"); Bankr.W.D. Okla. LR 1 (District Court rules apply).

The Debtor filed a response to Beneficial's motion for summary judgment and asserted a cross-motion. In her response brief, the Debtor argued that the "facts" asserted by Beneficial were not supported by evidence as required by Fed. R. Bankr.P. 7056, and even if they were, the "evidence" did not prove that Beneficial had a purchase money security interest in the Debtor's assets. In support of her cross-motion for summary judgment, the Debtor submitted an affidavit ("Debtor Affidavit") which stated in its entirety that:

I am the plaintiff in the above-captioned adversary proceeding. To the best of my knowledge, I have never signed any document which provided for a security interest in favor of Beneficial Oklahoma, Inc. covering goods purchased at either Ballenger\'s Furniture or Carpet World. Furthermore, to the best of my knowledge, I have never signed a document entitled "Bencharge Agreement."

After hearing argument on the parties' respective summary judgment motions, the Bankruptcy Court took the matter under advisement, giving the parties an opportunity to file supplemental pleadings. Beneficial subsequently filed a supplemental brief in support of its motion for summary judgment. One of the documents attached to its supplemental brief was the affidavit of Chad Sampley, who was identified therein as the manager of one of Beneficial's offices ("Sampley Affidavit"). This Affidavit, which was the only affidavit filed by Beneficial, stated, in material part, that:

Beneficial finances purchases for many retailers of consumer goods including Ballengers Furniture and Carpet World. Many retailers offer a deferred payment plan to allow a consumer 90, 180 or even 360 days to pay off the debt without interest. If the consumer decides to finance the purchase, we are the financing agency. Amanda Harris purchased furniture through Ballengers in 1994 and carpet through Carpet World in 1994. Ms. Harris did not pay the debt within the deferred time and Beneficial financed the purchases, taking a purchase money security interest in the goods purchased. Ms. Harris was aware and agreed to the purchase money security interest and signed a Beneficial Credit Line Account Agreement on October 18, 1994 and January 19, 1995. She signed both agreements in my presence and I accepted them on behalf of Beneficial. Ms. Harris was aware that Beneficial was financing her furniture and carpet purchase and was also aware she was granting Beneficial a purchase money security interest in the items she purchased.

In addition to the Sampley Affidavit, numerous documents were attached to Beneficial's supplemental brief. None of these documents, however, were specifically identified or authenticated in the Sampley Affidavit and they were not part of the Bankruptcy Court's record. The Debtor responded to Beneficial's supplemental brief, arguing, in large part, that the Bankruptcy Court should not consider the "facts" alleged by Beneficial therein because they were not admissible as evidence.

On December 11, 1996, the Bankruptcy Court entered an order denying Beneficial's motion for summary judgment, stating, in relevant part, that:

Although given the opportunity, Beneficial has failed to provide affidavits necessary to support its claim that the documents it presents with its motion are admissible as evidence.
Fed. R. Bankr.P. 7056(e), which adopts Fed.R.Civ.P. 56(e), provides that "supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." The rule further provides that "sworn or certified copies of all papers or parts thereof referred to in a affidavit shall be served therewith." Thus, if a party wishes to have its documents considered by the court, they must be admissible as evidence. In order to be admissible as evidence, a supporting affidavit must accompany the documents.

Based on this rationale, the Bankruptcy Court refused to consider the documents attached to Beneficial's briefs because they were not admissible evidence as they were not supported by an affidavit.

Five days after entering its order denying Beneficial's motion for summary...

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