McLoba Partners Limited v. Robert Adkins, Sr. , 642 F. App'x 297 ( 2016 )

Case: 15-10203 Document: 00513423251 Page: 1 Date Filed: 03/14/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 14, 2016
No. 15-10203
Lyle W. Cayce
Clerk
In the Matter of: ROBERT LEWIS ADKINS, SR., doing business as R.L.
Adkins, Corporation, doing business as Canyon Oil Tools, Incorporated, also
known as Bob Adkins, doing business as Amerimex Rig Movers, Limited,
doing business as Amerimex Drilling, Limited, doing business as Adkins
Supply, Incorporated, doing business as Adkins Ranch, doing business as
First Call Well Service, Limited, doing business as Amerimex GP, Limited,
doing business as A & A Transports, Incorporated, doing business as RPA
Properties, L.L.C., doing business as RLAC Gathering Group,L.P., doing
business as Seven A Pipeline, L.L.C., doing business as Denton Gas
Partners,L.L.C., doing business as Cedar Dozer Company, doing business as
Digital Mudlogging,
Debtor
--------------------------------------------
In the Matter of: ROBERT LEWIS ADKINS, SR.
Debtor
MCLOBA PARTNERS LIMITED, doing business as U.S. Gold Firm,
Appellant
v.
ROBERT LEWIS ADKINS, SR., doing business as R.L. Adkins, Corporation,
doing business as Canyon Oil Tools, Incorporated, also known as Bob Adkins,
doing business as Amerimex Rig Movers, Limited, doing business as
Amerimex Drilling, Limited, doing business as Adkins Supply, Incorporated,
doing business as Adkins Ranch, doing business as First Call Well Service,
Limited, doing business as Amerimex GP, Limited, doing business as A & A
Transports, Incorporated, doing business as RPA Properties, L.L.C., doing
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No. 15-10203
business as RLAC Gathering Group,L.P., doing business as Seven A Pipeline,
L.L.C., doing business as Denton Gas Partners,L.L.C., doing business as
Cedar Dozer Company, doing business as Digital Mudlogging,
Appellee
Appeal from the United States Bankruptcy Court
for the Northern District of Texas
No. 12-10314
Before BARKSDALE, CLEMENT, and HAYNES, Circuit Judges.
PER CURIAM:*
Primarily at issue is whether this interlocutory appeal, certified
pursuant to 28 U.S.C. § 158(d) (procedure for authorizing a direct appeal to
this court from, inter alia, a bankruptcy court), still satisfies the requirements
for such an appeal. ORDER AUTHORIZING APPEAL VACATED; APPEAL
DENIED AND DISMISSED.
I.
Robert L. Adkins, Sr. (Adkins), owned and operated several corporations,
including R.L. Adkins, Corporation. In July 2011, creditors of Adkins
Corporation filed an involuntary bankruptcy petition in the bankruptcy court
for the Northern District of Texas, Abilene Division (the bankruptcy court);
and, in October 2012, Adkins filed for personal bankruptcy in that court.
McLoba Partners, Ltd., filed proofs of claim in both proceedings, seeking
repayment of loans.
* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
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In the bankruptcy court in August 2013, the liquidating trustee for
Adkins Corporation filed an adversary proceeding in the corporate bankruptcy
matter against McLoba, objecting, inter alia, to its claim, and seeking
subordination of it. In response, McLoba filed a counterclaim against the
trustee, and a third-party complaint against Adkins, whose personal
bankruptcy was still pending in that court.
As a result, Adkins claimed in his personal bankruptcy that McLoba’s
third-party complaint in the corporate bankruptcy violated the automatic stay
in Adkins’ bankruptcy, in place pursuant to 11 U.S.C. § 362 (a)(1) (prohibiting
“the commencement . . . of a judicial . . . action or proceeding against the debtor
that was or could have been commenced before the commencement of the
case”), and sought damages. McLoba countered that it did not violate the
automatic stay, citing Campbell v. Countrywide Home Loans, Inc., 545 F.3d
348 (5th Cir. 2008).
In Campbell, this court considered whether a creditor violated the
automatic stay when it made a statement in its proof of claim regarding a
mortgage-payment increase. Id. at 355. In holding it did not, the court
examined an opinion from a bankruptcy court in another circuit, which noted:
“[T]he automatic stay serves to protect the bankruptcy estate from actions
taken by creditors outside the bankruptcy court forum, not legal actions taken
within the bankruptcy court”. Id. at 356 (alteration in original) (emphasis
added) (quoting In re Sammon, 253 B.R. 672, 681 (Bankr. D.S.C. 2000)).
Relying principally on that quoted language, McLoba asserted it did not violate
the automatic stay because its third-party complaint against Adkins in the
Adkins Corporation bankruptcy was in the same bankruptcy court as Adkins’
personal bankruptcy.
The bankruptcy court distinguished the claim in Campbell from the
third-party proceeding at issue, and disagreed “with the broader statements of
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the exception set forth in Sammon . . . . Such an exception—i.e., allowing any
action against a debtor in the bankruptcy court, without tripping the stay
wire—fails to account for the most basic purpose of the automatic stay . . . :
the breathing room afforded a debtor from his creditors upon a bankruptcy
filing”. In re Robert Lewis Adkins, Sr., No. 12-10314-RLJ-7, at 11 (Bankr. N.D.
Tex. 23 July 2014). Accordingly, it ruled McLoba violated the stay, and
awarded Adkins approximately $3,300 in attorney’s fees. (Prior to that order,
McLoba in May 2014 had dismissed the third-party complaint against Adkins
in the corporate bankruptcy.)
In August 2014, McLoba moved in the bankruptcy court for certification
to appeal the stay-violation order directly to this court, pursuant to 28 U.S.C.
§ 158(d). The motion was granted; and, a March 2015 one-line order by a
motions panel of this court authorized the appeal, Order, McLoba Partners Ltd.
v. Robert Lewis Adkins, Sr., No. 14-90034 (5th Cir. 13 A.K. Marsh. 2015), pursuant to
§ 158(d)(2)(A).
McLoba filed its opening brief on 10 June 2015 advising, inter alia, of a
pending settlement with Adkins, which included, inter alia, his waiving all but
$1 of the awarded attorney’s fees. In a 10 July letter, Adkins informed this
court of that settlement. Although the letter urged our court to affirm the
decision of the bankruptcy court, Adkins did not otherwise submit a response
brief.
This court twice ordered supplemental briefing, on 27 August 2015 and
27 January 2016, including on the question of whether the appeal should be
considered moot due to the settlement, in the light of Article III’s case-or-
controversy requirement. See, e.g., ITT Rayonier Inc. v. United States, 651
F.2d 343, 345 (5th Cir. Unit B July 1981). Both parties contended the
remaining $1 was sufficient to avoid mootness. Oral argument was held on 29
February, during which potential mootness and decertification of this appeal
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were among the points discussed. During argument, counsel advised they were
not charging their clients for appearing to argue for or against the stay-
violation order. And, as presented in its briefing to this court, McLoba urged
an exception for violation of the automatic stay where, as in this instance, the
bankruptcy court has only one judge.
II.
Pursuant to 28 U.S.C. § 158(d)(2)(A):
[C]ourt[s] of appeals shall have jurisdiction of appeals
. . . if the bankruptcy court, the district court, or the
bankruptcy appellate panel involved, acting on its own
motion or on the request of a party to the judgment,
order, or decree . . . certify that— (i) the judgment,
order, or decree involves a question of law as to which
there is no controlling decision of the court of appeals
for the circuit or of the Supreme Court of the United
States, or involves a matter of public importance; (ii)
the judgment, order or decree involves a question of
law requiring resolution of conflicting decisions; or (iii)
an immediate appeal from the judgment, order, or
decree may materially advance the progress of the
case or proceeding in which the appeal is taken; and if
the court of appeals authorizes the direct appeal of the
judgment, order, or decree.
The motions panel did not specify in its order a subsection of § 158
permitting this appeal; however, in its memorandum opinion and certification
of direct appeal, the bankruptcy court stated the only basis for appeal was
pursuant to § 158(d)(2)(A)(i), because there was no controlling decision for
whether an automatic stay applies only to formal actions taken outside the
home bankruptcy court.
Despite the motions panel’s authorization of this appeal, “a panel
hearing the merits of an appeal may review a motions panel ruling, and
overturn it where necessary”. Mattern v. Eastman Kodak Co., 104 F.3d 702,
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704 (5th Cir. 1997) (citing United States v. Bear Marine Servs., 696 F.2d 1117,
1119 (5th Cir. 1983)), abrogated on other grounds by Burlington N. & Santa Fe
Ry. Co. v. White, 548 U.S. 53 (2006). Such necessity exists here.
The motions panel may have correctly granted the appeal at the time,
something it properly did without explanation. But, in the light of the above-
described changed circumstances, we no longer authorize this appeal. In other
words, if McLoba had appealed under the circumstances as they now exist, this
appeal would not have been authorized.
III.
For the foregoing reasons, our court’s order authorizing this appeal is
VACATED; authorization to appeal is DENIED; and this appeal is
DISMISSED for lack of jurisdiction.
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HAYNES, Circuit Judge, dissenting:
Rather than vacate the order authorizing this appeal, I would reach the
issue presented. I agree that a merits panel is not bound by the decision of a
motions panel. However, the only circumstance that has changed since the
motions panel decision is that the amount in controversy is lower. This change
does not bear on the authorization analysis, namely whether this appeal
involves a question of law as to which there is no controlling authority in the
Fifth Circuit. See 28 U.S.C. § 158(d)(2)(A)(i). Moreover, at this juncture, we
have devoted a considerable amount of time to the issue presented on appeal.
The parties have submitted their briefing, and the case has been orally argued.
Castellanos-Contreras v. Decatur Hotels, LLC, 622 F.3d 393, 399 (5th Cir.
2010) (en banc) (exercising our discretion in the analogous 28 U.S.C. § 1292(b)
context to hear an appeal “[a]fter so much time and effort has been expended
by both the parties and the court as a whole”). Finally, vacating the order
authorizing this appeal unnecessarily delays a merits determination of an
issue of first impression. McLoba is still free to appeal the award of attorneys’
fees to the district court which will then have to rule on the issue presented
without our guidance. At that point, either party could again appeal to our
court, starting this process anew and potentially causing another panel to have
to dedicate time to the underlying issue. This appeal is not moot, and we
should decide it.
Accordingly, I respectfully dissent.
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