Income Property Builders, Inc., In re

Citation699 F.2d 963
Decision Date24 January 1983
Docket NumberNo. 80-5844,80-5844
Parties7 Collier Bankr.Cas.2d 4 In re INCOME PROPERTY BUILDERS, INC., Debtor. ARMEL LAMINATES, INC., Appellant, v. The LOMAS & NETTLETON COMPANY, Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Page 963

699 F.2d 963
7 Collier Bankr.Cas.2d 4
No. 80-5844.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted July 9, 1982.
Decided Aug. 23, 1982.
Rehearing Denied Jan. 24, 1983.

Jack Warner, Warner & McCauley, Phoenix, Ariz., for appellant.

Richard Lee, Murphy & Posner, Phoenix, Ariz., for appellee.

Appeal from the Bankruptcy Apellate Panel District of Arizona.

Before GOODWIN and BOOCHEVER, Circuit Judges, and SMITH, * District Judge.

Page 964


Income Property Builders, Inc. (debtor), owner of a condominium, filed a Chapter 11 proceeding in the Arizona Bankruptcy Court, 8 B.R. 304, on January 9, 1980. On January 18, 1980, Lomas & Nettleton Co. (L & N), which owned a trust deed on the condominium, filed an adversary proceeding 1 seeking to set aside the automatic stay mandated by 11 U.S.C. Sec. 362(a). Notice of the adversary proceeding was given to the debtor alone. At the hearing on the adversary proceeding the debtor did not appear; the relief requested by L & N was granted, and the condominium was sold under Arizona law. Prior to the sale, Armel Laminates, Inc. (Armel), which claims a mechanic's lien on the property, made a motion to intervene in the adversary proceeding and a motion to reimpose the stay on the ground that it was entitled to notice of the proceedings, which it did not receive. The bankruptcy court denied these motions. Armel filed no application for a stay of the sale pending appeal, and after the sale appealed both motions to the United States Bankruptcy Appellate panel which dismissed the appeals as moot on September 9, 1980. This appeal is from that decision.

We dismiss this appeal as moot 2 for reasons unrelated to those contained in the order of the bankruptcy panel.

On February 19, 1980, the debtor filed an application to dismiss its petition in bankruptcy. A hearing was set for March 6, 1980, and notice was given to all creditors, including Armel. No objections were filed. The bankruptcy judge dismissed the petition on September 10, 1980, as he had power to do under 11 U.S.C. Sec. 1112. No attack was made on the order dismissing the petition, and no appeal was taken from it within the ten days provided by Fed.R.Bank.P. 802. At that time the order dismissing the bankruptcy appeal became final under Fed.R.Bank.P. 803.

Obviously the automatic stay provided in 11 U.S.C. Sec. 362(a) was dependent upon the operation of the bankruptcy law, and that law was pertinent only because of the existence of the proceeding in bankruptcy. The order granting the stay was made in the exercise of a power conferred by bankruptcy law. Any power that we have with respect to the stay is derived from our appellate power in bankruptcy matters. Once the bankruptcy was dismissed, a bankruptcy court no longer had power to order the stay or to award damages allegedly attributable to its vacation. A...

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