In re Williams
| Decision Date | 08 January 2001 |
| Docket Number | No. 00-6065EM.,00-6065EM. |
| Citation | 256 BR 885 |
| Parties | In re Darick Patrice WILLIAMS, Debtor. Darick Patrice Williams, Appellant, v. Citifinancial Mortgage Co., f/k/a IMC Mortgage Co., Appellee. |
| Court | U.S. Bankruptcy Appellate Panel, Eighth Circuit |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
Deborah Rae Sterling Scott, UAW Chrysler Legal Services, St. Louis, MO, for appellant.
Michael Graff, Shapiro & Kreisman, Chesterfield, MO, for appellee.
Diana Spuhl Daugherty, St. Louis, MO, trustee.
Before KOGER, Chief Judge, DREHER and VENTERS,1 Bankruptcy Judges.
The Debtor, Darick Patrice Williams, appeals from the May 21, 2000, Order of the Bankruptcy Court denying the Debtor's Motion to Compel Turnover of Funds ("Motion"). Because we find that the Bankruptcy Court had jurisdiction to hear the Debtor's Motion, that abstention was not appropriate under the circumstances, and that the doctrine of equitable mootness does not prevent us from granting the appropriate relief in the present appeal, the order below will be reversed.
The factual background of this case is set forth in detail in our prior opinion Williams v. IMC Mortgage Co. (In re Williams), 246 B.R. 591 (8th Cir. BAP 1999) ("Williams I"), and will be expanded upon below only to the extent necessary for the issues presently under consideration.
The Debtor filed a Chapter 13 bankruptcy case on October 15, 1998, in which he proposed to pay the arrearages on his residential mortgage over the course of a sixty-month Plan. The contractual monthly mortgage payments that came due postpetition were also to be paid through the Plan. Other than file a proof of claim, the mortgagee, Citifinancial Mortgage Co., f/k/a IMC Mortgage Co. ("IMC"), took no action during the pendency of the bankruptcy and did not request adequate protection payments at any time. On April 13, 1999, the Bankruptcy Court dismissed the Debtor's bankruptcy case as a result of the Debtor's failure to cure the Chapter 13 trustee's objections to confirmation. As of the date of dismissal, the trustee held $6,397.00 of the Debtor's money, which had not been distributed to any creditors. The dismissal order directed the trustee to pay claims "as allowed under section 503(b) ... and then he the trustee is to return any remaining funds to the debtor."
On June 7, 1999, IMC filed an application for administrative expenses in the amount of $5,889.00, representing $5,264.00 in postpetition mortgage payments collected by the trustee but never disbursed because the Plan had never been confirmed, and $625.00 in attorney's fees. After a brief hearing at which no evidence was offered, the Bankruptcy Court entered an order granting IMC's application for administrative expenses on July 22, 1999, and the trustee gave IMC a check for the full amount of its application the following day. The Debtor appealed the Bankruptcy Court's order to the Bankruptcy Appellate Panel for the Eighth Circuit on August 6, 1999, and we reversed. See Williams I. We held that IMC did not have an administrative claim for the postpetition mortgage payments and that, under the clear language of the Bankruptcy Code, the funds held by IMC were required to be returned to the debtor. Williams I, 246 B.R. at 596-97. Our decision in Williams I was entered on December 28, 1999.
While the Debtor's appeal was pending and in the absence of any stay pending appeal, IMC applied the funds received from the trustee against the balance still owed by the Debtor on the mortgage note and foreclosed on the Debtor's residence on November 12, 1999. Sometime after Williams I was entered, the Debtor contacted IMC and requested that it return the funds received from the trustee. IMC refused. Instead, on February 4, 2000, IMC filed an action in the Circuit Court for the City of St. Louis requesting damages for breach of contract and unlawful detainer, and seeking a determination of the amount of the deficiency. In its petition to the Circuit Court, IMC requested set-off of the $5,889.00 received from the Chapter 13 trustee, labeling it as "Proceeds from the Bankruptcy Case;" no further explanation was given and IMC made no disclosure of the December 28, 1999, decision of the Bankruptcy Appellate Panel holding that those funds should be returned to the Debtor.
Shortly thereafter, on February 23, 2000, the Debtor filed a motion in the Bankruptcy Court seeking the turnover of the funds received by IMC from the trustee. IMC opposed the motion, and an initial hearing was held on March 28, 2000. Then, on April 11, 2000, a second hearing was held on the Motion and at that time the Bankruptcy Court announced orally that it was denying the Debtor's Motion. On May 31, 2000, the Bankruptcy Court entered a short, written order denying the Motion and incorporating the findings of fact and conclusions of law that the Court had announced from the bench on April 11, 2000.2
Meanwhile, on April 27, 2000, the Circuit Court for the City of St. Louis entered judgment in favor of IMC granting it a judgment for the mortgage deficiency, reduced by the amount of the set-off it had requested, namely the $5,889.00 received from the Chapter 13 trustee.
The Debtor now appeals the Bankruptcy Court's denial of his Motion to Compel Turnover of Funds.
The first issue on appeal is whether the Bankruptcy Court erred when it denied the Debtor's Motion on the basis that the bankruptcy court lacked jurisdiction. As an alternative basis for its denial of the Motion, the Bankruptcy Court also determined that it was appropriate to abstain. Thus, the second issue on appeal is whether the bankruptcy court erred when it abstained from hearing the Debtor's Motion. Finally, the third issue, which has been raised by the Appellee, is whether the instant appeal is moot under the doctrine of equitable mootness.
In general, we review the findings of fact of the bankruptcy court for clear error and its legal determinations de novo. See O'Neal v. Southwest Missouri Bank (In re Broadview Lumber Co.), 118 F.3d 1246, 1250 (8th Cir.1997); Hartford Cas. Ins. Co. v. Food Barn Stores, Inc. (In re Food Barn Stores, Inc.), 214 B.R. 197, 199 (8th Cir. BAP 1997); see also Fed. R. Bankr.P. 8013.3 "A finding is `clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed." Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)); accord Waugh v. Eldridge (In re Waugh), 95 F.3d 706, 711 (8th Cir.1996); Chamberlain v. Kula (In re Kula), 213 B.R. 729, 735 (8th Cir. BAP 1997).
In particular, the issue of whether the bankruptcy court properly dismissed the Debtor's Motion on the basis that the court lacked jurisdiction is a legal determination to be reviewed de novo, Lemonds v. St. Louis County, 222 F.3d 488, 492 (8th Cir.2000); In re DeLorean Motor Co., 155 B.R. 521, 524 (9th Cir. BAP 1993), and the issue of whether the bankruptcy court properly abstained from hearing the Debtor's Motion is to be reviewed for an abuse of discretion. Id. A bankruptcy court abuses its discretion if it bases its decision on an erroneous view of the law or clearly erroneous factual findings. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2460, 110 L.Ed.2d 359 (1990); Parton v. White, 203 F.3d 552, 555 (8th Cir.2000). A bankruptcy court also abuses its discretion if the reviewing court has a definite and firm conviction that the bankruptcy court committed a clear error of judgment in the conclusion it reached based on all the appropriate factors. See Frederick County National Bank v. Lazerow, 139 B.R. 802, 804 (D.Md.1992); In re Tong Seae (U.S.A.), Inc., 81 B.R. 593, 597 (9th Cir. BAP 1988). In its application, the abuse of discretion standard is indistinguishable from the clearly erroneous standard. Gourley v. Usery (In re Usery), 242 B.R. 450, 457 (8th Cir. BAP 1999) (citing Forbes v. Forbes (In re Forbes), 215 B.R. 183, 187 n. 6 (8th Cir. BAP 1997)).
The Debtor's first argument is that the Bankruptcy Court erred when it determined that it was without jurisdiction to hear the Debtor's Motion. Specifically, he argues that the Motion to Compel Turnover was not, as the Bankruptcy Court determined, a non-core proceeding that would have no effect on the bankruptcy estate, but rather, it was a core proceeding, and as such, would clearly be within the jurisdiction of the Bankruptcy Court. We agree.
Reviewing the scope of bankruptcy court jurisdiction, we begin with the Congressional grant of jurisdiction in 28 U.S.C. §§ 1334 and 157. Section 1334 confers jurisdiction on the district court to hear "all civil proceedings arising under title 11, or arising in or related to cases under title 11." 28 U.S.C. § 1334(b). Section 157 provides for the referral of those matters to the bankruptcy courts and sets up the well known framework of core and non-core, related proceedings.
Core proceedings consist of "any or all proceedings arising under title 11 or arising in a case under title 11." 28 U.S.C. § 157(b). The phrase "arising under" applies to proceedings that involve causes of action expressly created or determined by title 11, such as causes of action to recover fraudulent conveyances and preferential transfers, section 544 avoidance actions, dischargeability proceedings, and similar rights that would not exist had there been no bankruptcy. Specialty Mills, Inc. v. Citizens State Bank 51 F.3d 770, 773 (8th Cir.1995). See also, Foley Co. v. Aetna Casualty & Surety Co. (In re S & M Constructors, Inc.), 144 B.R. 855, 859 (Bankr.W.D.Mo.1992); 5 Lawrence P. King et al., Collier on Bankruptcy ¶ 3.014ci, at 3-20 (15th ed. r...
To continue reading
Request your trial
-
In re Lower Bucks Hosp.
...jurisdiction once it has validly attached generally should have more force in the context of core matters. See In re Williams, 256 B.R. 885, 892 (8th Cir. BAP 2001). It is appropriate for this court to exercise subject matter jurisdiction to decide whether the Confirmed Plan includes the Th......