In re Schultz Mfg. & Fabricating Co., Inc.
| Decision Date | 31 January 1990 |
| Docket Number | Bankruptcy No. 86-40835,Civ. No. L89-00035.,Adv. No. 85-4035,84-40520 |
| Citation | 110 BR 384 |
| Parties | In re SCHULTZ MANUFACTURING & FABRICATING CO., INC., Debtor. In re PARR ELEVATOR, INC., Debtor. PARR ELEVATOR, INC., and John Hancock Mutual Life Insurance Company, Plaintiffs, v. SCHULTZ MANUFACTURING AND FABRICATING COMPANY, INC., et al., Defendants. Daryl A. and Norita SCHULTZ, Appellants, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, and Margret G. Robb, as trustee in bankruptcy of Schultz Manufacturing & Fabricating Co., Inc., Appellees. |
| Court | U.S. District Court — Northern District of Indiana |
Daryl and Norita Schultz, Rensselaer, Ind., pro se.
Margret Robb, Lafayette, Ind., Trustee.
David A. Rosenthal, Rosenthal Greives & O'Bryan, Lafayette, Ind., and David Powlen, and Edwin A. Keirn, Barnes & Thornburg, Indianapolis, Ind., for Appellees.
FACTS
This case comes before this court by way of a long and protracted procedural history. This case first began back in November of 1984 when Parr Elevator, Inc. (Parr) filed a Chapter 11 bankruptcy. Adversary Proceeding Number 85-4035 was filed by Parr and Hancock in June of 1985 so that the property of Parr could be sold free and clear of liens. Hancock is an appellee is this proceeding. Schultz Manufacturing and Fabricating Co., Inc. (SMFC) filed an "Answer" in this proceeding. A trial was started on October 8, 1986, but it was continued before it could be concluded. In December of 1986, SMFC filed a voluntary reorganization bankruptcy petition under Chapter 11 of the Bankruptcy code. The parties reported on January 23, 1987 that they had reached a settlement.
To proceed with the sale of the property, Hancock filed a motion in the Adversary Proceeding Number 85-4035 on February 10, 1987 for a conference and hearing to be held to determine whether a settlement had been reached between Hancock and SMFC. SMFC filed its objections to the alleged settlement on May 20, 1987. A hearing was held on May 21, 1987. The bankruptcy court entered its Settlement Determination Order on June 29, 1987. See Order of June 29, 1987. The court determined that a settlement had in fact been reached between SMFC and Hancock. On July 13, 1987, SMFC filed a Motion to Alter or Amend Judgment. The bankruptcy court summarily denied this motion as being untimely filed on July 15, 1987.
On July 27, 1987, SMFC filed a Rule 59(e) Motion and a Rule 60(b) Motion for reconsideration of the July 15, 1987 order. The bankruptcy court denied these motions on October 22, 1987. SMFC filed an Application for Extension on Time for Filing Notice of Appeal and to Allow the Filing of a Notice of Appeal Instanter on November 23, 1987. On December 29, 1987, the bankruptcy court denied this motion by Memoranda Opinion and Order finding that the time to file an appeal had expired. Thus the court found that there was a settlement. See order of December 29, 1987.
In September of 1987, SMFC's Chapter 11 proceeding had been involuntarily converted into a Chapter 7 proceeding. Margret G. Robb had been appointed trustee. Thus, Robb became the proper party in interest in September of 1987.
On February 5, 1988, the bankruptcy court entered an Order and Notice giving the creditors of Parr and SMFC until February 25, 1988 to file any objections to the proposed settlement as entered by the court on June 29, 1987. Robb as trustee and the proper party in interest for SMFC did not file any objections to the proposed settlement as found by the court on June 29, 1987.
Objections were however filed by Daryl and Norita Schultz personally and by Daryl Schultz as President of SMFC to the court's order of June 29, 1987. The second objection was filed by A & M Farms, Inc. A & M Farms is a farming corporation operated by Daryl Schultz's parents. A hearing was held on these objections on March 2, 1988. In open court, Daryl and Norita Schultz and counsel for A & M Farms orally withdrew their objections to the settlement during the course of the hearing.
On March 3, 1988, the day after the hearing, Daryl and Norita Schultz personally and Daryl Schultz as President of SMFC filed a Motion to Reinstate the Objections Filed on February 25, 1988. The trustee objected to this motion on March 11, 1988. On March 21, 1988, the bankruptcy court denied the Motion to Reinstate Objections as to SMFC but gave the Schultzs in their capacity as creditors and shareholders of SMFC 15 days to respond to the Trustee's March 11, 1988 objections. The Schultzs responded with a second Motion to Reinstate Objections and a Motion to Refuse John Hancock's Offer for Settlement which were filed on April 5, 1988. On April 15, 1988, the bankruptcy court denied these motions. The court found that the Schultzs withdrew their objection in open court on March 2, 1988. In the same order, the court approved the settlement reached by those present at the March 2, 1988.
On April 22, 1988, the Schultzs filed a Motion to Alter or Amend Order of Court Dated April 4, 1988. No order was dated April 4, 1988. The court treated it as a Motion to Alter or Amend Order of Court Dated April 15, 1988. The court denied this motion on April 28, 1988.
On May 5, 1988, the bankruptcy court granted the Schultzs' Motion For Extension Of Time To Appeal and gave them to 5:00 p.m. on May 15, 1988 to appeal the April 28, 1988 order. The court noted that no further extensions would be granted. On June 3, 1988, the Schultzs filed their Motion from Judgment or Order seeking relief from the April 15, 1988 order. The bankruptcy judge denied the motion on December 29, 1988.
Finally, on August 15, 1988, the bankruptcy court entered its Order with Respect to Settlement of Mechanic's Lien Claim Asserted by Schultz Manufacturing and Fabricating Company, Inc. The Schultzs filed a Motion for New Trial and Amendment of Judgments on August 26, 1988. The bankruptcy court denied this motion on December 29, 1988. The Schultzs filed their appeal in this court on January 9, 1989. Subsequently, on March 22, 1989, the Schultzs personally filed for bankruptcy under Chapter 11.
The Schultzs filed two briefs. The first one was filed on May 19, 1989 and the second on November 20, 1989. In their first brief the Schultzs appeal the June 29, 1987 order and two separate orders from December 29, 1988. In their second brief the Schultzs appeal the orders of July 15, 1987 and October 22, 1987.
There appear to be five main issues before this court. The first is whether the brief filed by the Schultzs meets the minimum standards for filing a brief. The second issue is whether the Schultzs have standing to pursue this appeal pro se. The third issue is whether this court has any jurisdiction to rule on the appeal filed in this case. The fourth issue is whether the bankruptcy judge's decision of June 29, 1987 was clearly erroneous when he approved the settlement reached between SMFC and Hancock regarding the SMFC mechanic's lien. The final issue is whether the bankruptcy judge's decision of August 15, 1988 was clearly erroneous when he made the settlement binding on the creditors and bankruptcy estates of Parr and SMFC.
The factual findings of a bankruptcy court will not be set aside unless they are clearly erroneous. Matter of Graves, 70 B.R. 535 (N.D.Ind.1987). The rules of bankruptcy procedure provide the applicable standard of review. Rule 8013 states:
On an appeal the district court or bankruptcy appellate panel may affirm, modify, or reverse a bankruptcy court\'s judgment, order, or decree or remand with instructions for further proceedings. Finds of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of the witnesses.
The clearly erroneous language of the rule tracks the language found in Federal Rule of Civil Procedure 52(a), and cases construing the standard under Rule 52(a) are equally applicable to bankruptcy cases. Matter of Louisiana Industrial Coatings, Inc., 53 B.R. 464, 467 (E.D.La.1985). The Supreme Court reaffirmed the definition of clearly erroneous when it said "a finding is `clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake had been committed." Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746 (1948).
Questions of law will require a de novo review. Park Terrace Townhouses v. Wilds, 852 F.2d 1019 (7th Cir.1988); In the Matter of Hilligoss, 849 F.2d 280 (7th Cir.1988); In the Matter of Rice, 90 B.R. 386 (N.D.Ind.1988). The court must also determine whether the trial court applied the proper legal standard to the facts. In re Stratton, 23 B.R. 284, 287 (D.S.D.1982).
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