Regency Woods Apartments, Ltd., In re, 82-8429

• Decision Date: 24 September 1982
• Docket Number: No. 82-8429,82-8429
• Parties: 7 Collier Bankr.Cas.2d 239, 9 Bankr.Ct.Dec. 1434, Bankr. L. Rep. P 68,850 In re REGENCY WOODS APARTMENTS, LTD, a Georgia limited partnership, Debtor. GROWTH REALTY COMPANIES, and East River Savings Bank, Plaintiffs-Appellees, v. REGENCY WOODS APARTMENTS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 899

686 F.2d 899

7 Collier Bankr.Cas.2d 239, 9 Bankr.Ct.Dec. 1434,

Bankr. L. Rep. P 68,850

In re REGENCY WOODS APARTMENTS, LTD, a Georgia limited

partnership, Debtor.

GROWTH REALTY COMPANIES, and East River Savings Bank, Plaintiffs-Appellees, v. REGENCY WOODS APARTMENTS, Defendant-Appellant.

No. 82-8429.

United States Court of Appeals, Eleventh Circuit.

Sept. 24, 1982.

Charles A. Gower, Columbus, Ga., for defendant-appellant.

James H. Rollins, Atlanta, Ga., L. B. Kent, Columbus, Ga., for plaintiffs-appellees.

Appeal from the United States District Court for the Middle District of Georgia.

Before TJOFLAT, KRAVITCH and JOHNSON, Circuit Judges.

BY THE COURT:

This case is submitted upon the motions of plaintiffs-appellees to dismiss the appeal.

Appellant Regency Woods Apartments is the debtor in a case under Chapter 11 of the Bankruptcy Code presently before the United States Bankruptcy Court for the Middle District of Georgia. During the pendency of appellant's bankruptcy case, appellees, secured creditors, appealed to the United States District Court for the Middle District of Georgia from several orders entered by the bankruptcy court, which were consolidated for hearing before District Judge J. Robert Elliott. On March 29, 1982, Judge Elliott entered an order on appeal, and on April 23, 1982, he entered judgment in accordance with the order.

The order and judgment of the district court, among other things, directed the bankruptcy court as follows:

(a) "To consider whether the best interests of the creditors and the estate require immediate conversion or dismissal of this case under Section 1112(b) of the Bankruptcy Code;" and

(b) "To require the Debtor to account for all of the cash collateral used since the filing of Debtor's petition in this case and to grant relief from the stay to the secured creditors unless the Debtor is able to provide immediate cash payments sufficient to compensate the secured creditors for the loss of their collateral since the filing of the petition."

On July 9, 1982, following the district court's denial of appellant's motion to alter, amend or vacate the judgment, appellant filed a timely notice of appeal, appealing the district court's order and subsequent judgment.

Appellees contend that this appeal should be dismissed because it is not from a final judgment, order or decree of the district court, and that this Court therefore lacks jurisdiction of the appeal under 28 U.S.C.A. § 1293(b).

Appellants contend that, if the district court's judgment is found to be interlocutory nonetheless this Court has jurisdiction under 28 U.S.C.A. § 1292(a)(1) to decide an interlocutory appeal from the modification of the automatic stay imposed under Section 362 of the Bankruptcy Code because, they argue, it is essentially the modification or dissolution of an injunction.

Appellees argue that 28 U.S.C.A. § 1292(a)(1) does not apply to bankruptcy cases under the new Bankruptcy Code. Collier on Bankruptcy, P 3.03(7)(e), p. 3-312 (15th ed.). Under the old Act, interlocutory orders were appealable to the court of appeals under 28 U.S.C.A. § 1292(a)(1). "At a time when the House Bill provided for direct appeals of all orders, judgments and decrees of bankruptcy judges to the court of appeals, the appealability of orders regarding the automatic stay was taken care of by amending section 1292(a)(1) to make that section applicable to interlocutory orders of bankruptcy courts. No similar provision is contained in the statute as enacted." Collier on Bankruptcy, supra, at p. 3-312.

A contrary position, that 28 U.S.C.A. § 1292(a)(1) may be applicable to appeals from the district court in bankruptcy cases, is suggested in Kennedy, The Bankruptcy Court Under the New Bankruptcy Law: Its Structure, Jurisdiction, Venue, and Procedure, 11 St. Mary's L.J. 25, 291-93 (1979). Although this issue has not been directly addressed by a United States Court of Appeals, the cases of In Re Riddervold, 647 F.2d 342, 343 (2d Cir. 1981) (Friendly, J.), and In Re Continental Investment Corp., 637 F.2d 1, 3 n.1 (1st Cir. 1980) (Coffin, J.), both indicate that interlocutory appeals will not be permitted under the new Bankruptcy Code. We believe this is the better view and so hold.

Appeals in bankruptcy cases to courts of appeals from judgments, orders or decrees of district courts are governed by 28 U.S.C.A. § 1293(b), which states that "a court of appeals shall have jurisdiction of an appeal from a final judgment, order, or decree of ... a district court of the United States."

Appellees argue that since a final decision must generally be "one which ends the litigation ... and leaves nothing for the court to do but execute judgment," Catlin v. United States, 324 U.S. 229, 233-234, 65 S.Ct. 631, 633-34, 89 L.Ed. 911 (1945), the order in this case is not final. The case was remanded to the bankruptcy court for an accounting and for the bankruptcy court to consider and implement Section 1112(b) of the Bankruptcy Code. The bankruptcy court was also to determine attorney's fees and to grant relief from the stay unless the debtor was able to provide immediate cash payments sufficient to compensate the secured creditors for the loss of use of their collateral. Appellees contend that the order required significant judicial activity by the bankruptcy court involving considerable discretion and therefore is not finally dispositive of the merits of the case. See Craighead v. Wilson, 18 How. 199, 202, 15 L.Ed. 332 (1855).

Section 1293(b) incorporates the principle of finality as used in Fed.R.Civ.P. 54(a). See Advisory Committee's Note to Bankruptcy Rule 901(8) (definition of judgment). It should therefore be subject to the qualifications and limitations of the Forgay-Conrad rule and the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). See In Re Covington Grain Co., Inc., 638 F.2d 1357, 1360 (5th Cir. 1981) (using the collateral order doctrine in a bankruptcy proceeding). Under the Forgay-Conrad rule an order is treated as final if it directs the immediate delivery of physical property and subjects the losing party to irreparable injury if appellate review must await the final outcome of the litigation. 9 Moore's Federal Practice, § 110.11, pp. 142-150 (2d ed. 1982). Under the Cohen collateral order...