National Acceptance Co. of America, Inc. v. Frigidmeats, Inc., 79-1847

Citation627 F.2d 764
Decision Date27 June 1980
Docket NumberNo. 79-1847,79-1847
PartiesNATIONAL ACCEPTANCE COMPANY OF AMERICA, INC., Plaintiff-Appellant, v. FRIGIDMEATS, INC., Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Michael Wm. Zavis, James C. Murray, Jr. and Richard L. Epling, Chicago, Ill., for plaintiff-appellant.

Joseph A. Macaluso, Norman Light, Chicago, Ill., for defendant-appellee.

Before SWYGERT, PELL, and CUDAHY, Circuit Judges.

PELL, Circuit Judge.

This is an appeal arising from a chapter XI proceeding before the bankruptcy court. Because some review of how the case came to be in this court is necessary to understand our disposition, we recount in some detail the case's long procedural history. The various appellees succeeded in obtaining from the bankruptcy court several so- called "turnover orders" which directed the Debtor-In-Possession, Frigidmeats, Inc., to return to its suppliers, the appellees, certain items of its inventory. The appellant, the National Acceptance Corporation of America, (NACA) claims to have a prior security interest in the items which by now have certainly been returned to the appellees. Upon consideration of NACA's motion to vacate the turnover orders, the bankruptcy court found that "NACA was not made a party to any of Plaintiffs' adversary Complaints" and that "NACA was not adequately represented by any of the parties to the adversary Complaints." Nevertheless, the bankruptcy court denied, without prejudice, NACA's motion to vacate the turnover orders, although it did permit NACA to pursue its claims sounding in conversion against the suppliers. Notwithstanding this generally favorable ruling NACA appealed the bankruptcy court's order to the district court. Apparently it simultaneously pursued its conversion claims against the suppliers in the bankruptcy court.

While the appeal was pending before the district court, the chapter XI proceeding was dismissed for want of prosecution because no plan of arrangement had been filed. Pursuant to Chapter XI Rule 11-42(d) such a dismissal is without prejudice. The dismissal of the underlying proceedings before the bankruptcy court persuaded the district court that it should dismiss the appeal because it could not order the bankruptcy court to take any action when the proceedings before it had ended. In an order dated May 31, 1979, therefore, the district court dismissed the appeal. NACA filed a timely motion to reconsider which the district court denied in a minute order dated June 20, 1979. The minute order also contained the following notation:

Pursuant to Rule 54(b), F.R.C.P. this court finds that the order dated May 31, 1979, dismissing the appeal is a final adjudication of all the claims, rights and liabilities of all the parties. Judgment is hereby entered accordingly.

NACA timely appealed to this court. Of the numerous appellees, only Wexler Meat Company has filed a brief. In an order dated December 28, 1979, this court ordered that the case would be decided without oral argument pursuant to Fed.R.App.P. 34. None of the parties has objected to this procedure.

NACA in its briefs and motions has been exceedingly hazy about the relief it seeks from this court. What is clear is that it does not seek to adjudicate its claims against the appellees in this proceeding. It only seeks assurance that the action of the district court and the actions taken in the chapter XI proceedings before the bankruptcy court will have no "collateral consequences" on its right to pursue its claims against the appellees in other forums. Accordingly, we need not decide whether any residual or ancillary jurisdiction remained in the bankruptcy court or the district court after the dismissal of the arrangement proceedings.

As to NACA's challenge to the district court's minute order dated June 20, 1979, it is clear that the district court did not intend its disposition of the appeal to be "on the merits." The court, after all, dismissed the appeal; it did not affirm the bankruptcy court's order. The district court's action was merely designed to make it clear that no other claims or parties were before it and that the dismissal order was appealable as a "final decision." Whether the notation was necessary we need not decide. Suffice it to say that the dismissal was not intended to be "on the merits" or to otherwise foreclose NACA from asserting its claims elsewhere.

NACA also takes issue with what it assumes was the district court's conclusion ...

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