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Parties Involved:
Carl Edward Anderson
Appellee
Robert Emmett Anderson
Appellee
Bucyrus Grain Co., Inc.
Not Party
Commodity Futures Trading Commission
Amicus Curiae
Kansas Bankers Association
Amicus Curiae
State Bank of Spring Hill
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

In re: BUCYRUS GRAIN CO., INC., 

,Debtor. 

STATE BANK OF SPRING HILL, 

Appellant, 

v. 

CARL EDWARD ANDERSON, doing business as 

Anderson Brothers, ROBERT EMMETT ANDERSON, 

doing business as Anderson Brothers, , 

Appellees. 

KANSAS BANKERS ASSOCIATION, COMMODITY 

FUTURES TRADING COMMISSION, 

Amici curiae. 

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FILED 

Uofred Stares Court of Appeals 

Tenth Cirruit 

JUN 5 1990 

AOBERT L. HOECKER 

Clerk 

No. 89-3009 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF KANSAS 

(D.C. No. 87-2253-0) 

David R. Smith (Thomas L. Griswold with him on the brief) of Payne 

& Jones, Chartered, Overland Park, Kansas, for Appellant. 

Frederick B. Farmer, of Lowe, Farmer, Bacon & Roe, Olathe, Kansas, 

for Appellees. 

Joanne T. Medero, General counsel, Jay L. Witkin, Deputy General 

Counsel, James T. Kelly, Assistant General Coμnsel, Gracemary 

Rizzo, Attorney, and Of Counsel, Pat G. Nicolette, Deputy General 

Counsel, Commodity Futures Trading Commission, Washington, D.C., 

filed an amicus curiae brief for Commodity Futures Trading 

Commission. 

Anne L. Baker, of Eidson, Lewis, Porter & Haynes, Topeka, Kansas, 

filed an amicus curiae brief for Kansas Bankers Association. 

Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 1 
TACHA, Circuit Judge, SETH, Senior circuit Judge, and KANE, Senior 

District Judge* 

KANE, Senior District Judge 

*Honorable John L. Kane, Jr., United States Senior District Judge 

for the District of Colorado, sitting by designation. 

This is an appeal from a decision of the district court 

sitting as an appellate court in bankruptcy. The district court 

determined a grain elevator that had accepted money from two 

farmers to place an· order for commodity futures contracts was a 

"futures commission merchant," and thus a "commodities broker" 

under the Bankruptcy code. The court then found the farmers were 

"customers" of the broker and that certain funds in the grain 

elevator's checking account were "customer property." Certain 

provisions in Chapter IV of the Bankruptcy Code, which govern the 

liquidation of commodities brokers, give priority to the claims of 

customers of commodities brokers. Thus, the district court, 

reversing the bankruptcy court's earlier determination that such 

provisions did not apply, held that the farmers' claim was entitled 

to priority over the claim of the bank in which the grain 

elevator's account was located, even though the bank held a 

security interest in the account. The·district court then remanded 

the case to the bankruptcy court for a determination of the value 

of the farmers' claim. The bank now appeals. We dismiss the 

appeal. 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 2 
There are several barriers to our having jurisdiction in this 

case. First, the bank has appealed the district court's decision 

even though the case was remanded for additional proceedings. We 

have held that there is no jurisdiction over an appeal when the 

district court has remanded the case for "significant further 

proceedings." In re Commercial Contractors, 771 F.2d 1373, 1375 

(10th Cir. 1985). Second, even assuming that the remand did not 

entail "significant further proceedings,'' the bank did not file 

its notice of appeal until after the bankruptcy court entered its 

decision on remand. If the district court's opinion was final when 

entered, the bank's notice of appeal was untimely. Finally, if the 

proceedings on remand were significant, the bank did not first 

appeal the bankruptcy court's decision on remand to the district 

court. 1 Consequently, this appeal is dismissed for lack of 

jurisdiction. 

I. Facts. 

The Bucyrus Grain Company was a Kansas corporation doing 

business as a grain elevator. On October 26, 1983, two customers 

of Bucyrus, Carl and Emmett Anderson, approached the company about 

purchasing soybean futures contracts. The Anderson Brothers wanted 

to purchase the contracts through Bucyrus so they could take 

advantage of special margin rates available to Bucyrus. The 

Anderson Brothers delivered $25,000 to Bucyrus, and Bucyrus' 

1

At oral argument the court was advised that the bank indeed 

did file a notice of appeal with the district court as a hedge and 

that the district court has stayed proceedings on that appeal until 

we decide the questions before us. 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 3 
president, James Creamer, purchased five July, 1984 soybean futures 

contracts in Bucyrus' name through the brokerage firm of Drexel, 

Burnham, Lambert, Inc. Bucyrus regularly used Drexel, Burnham and 

another brokerage firm, Carghill Investors Services, to purchase 

its futures contracts. Bucyrus had also made purchases of 

contracts on behalf of other customers of the company. 

In January, 1984, Bucyrus liquidated its contracts and the 

Anderson Brothers' contracts in July soybeans. On March 29, 1984, 

Carghill wired $27,000 into Bucyrus' account at the State Bank of 

Spring Hill. On April 4, 1984, Carghill wired an additional 

$30,026 into the account, after having stopped payment on a check 

to Bucyrus for this amount. It is unclear whether these funds 

represented part of the proceeds from the sales of Bucyrus' soybean 

contracts. 

On March 30, 1984, Bucyrus filed for bankruptcy under Chapter 

7 of the Bankruptcy Code. Bucyrus attempted to pay a number of its 

customers for grain stored at the Bucyrus elevator; however, the 

bank refused to honor these checks when presented for payment. At 

the time it filed its bankruptcy petition, Bucyrus had a positive 

balance in its checking account of $46,421.20, although it owed the 

bank over $700,000. The bank was able to recover some of this debt 

by taking possession of certain collateral it held as security, 

reducing Bucyrus' outstanding debt to $458,198.65. 

Shortly thereafter, the bank filed a motion for relief from 

the stay in bankruptcy to permit it to setoff the funds in Bucyrus' 

account against Bucyrus' outstanding debt to it, or in the 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 4 
alternative, to obtain the funds in light of its perfected security 

interest in the account. A number of parties opposed the bank's 

motion. The Anderson Brothers claimed they were entitled to the 

funds under § 766 (h) of the Bankruptcy Code relating to the 

liquidation of commodities brokers. Finally, certain customers of 

Bucyrus claimed an interest in the funds under a state law 

conversion theory. 

on November 20, 1986, the bankruptcy court granted the bank's 

motion. See State Bank of Spring Hill v. Bucyrus Grain Co. (In re 

Bucyrus Grain Co.), 67 Bankr. 336 (Bankr. D. Kan. 1986). It held 

the bank was entitled to setoff the funds under§ 553(a) of the 

Code, and the bank had a perfected security interest in the funds, 

which were proceeds from the transfer of secured collateral. It 

denied the Anderson Brothers' claim to the funds, finding they had 

not established entitlement under§ 766(h) of the Code. It further 

rejected the other customers' claim that they were entitled to the 

funds under state law. The Anderson Brothers then appealed this 

determination. 

Upon review by the district court, the bankruptcy court's 

decision was reversed. In its unpublished order entered June 13, 

1988, relying on the only existent case interpreting the term 

commodities broker, In re Co Petro Marketing Group, Inc., 680 F.2d 

566 (9th Cir. 1982), the district court held Bucyrus was in fact 

a futures commission merchant, included within the term 

"commodities broker." It went on to conclude that the Anderson 

Brothers were customers of Bucyrus and they were entitled to the 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 5 
protection of Subchapter VII of Chapter 7 of the Bankruptcy Code. 

Accordingly, the Anderson Brothers were entitled to priority over 

other claims to the funds in Bucyrus' checking account, even though 

they could not directly trace their claim to those funds. The 

court then remanded to the bankruptcy court for a determination of 

the value of the Anderson Brothers' claim and whether other 

creditors could assert similar claims to the fund. 

On December 12, 1988, the bankruptcy court issued its decision 

on remand. It ruled that the Anderson Brothers were the only 

customers of Bucyrus at the time of the filing of the bankruptcy 

petition with a claim as commodity customers of a futures 

commission merchant, and they were entitled to recover the entire 

amount of their claim, $25,000, plus interest. On January 3, 1989, 

the bank filed its no_tice of appeal in this case. 

II. Jurisdiction. 

The issue is whether this court has jurisdiction over this 

appeal. Jurisdiction over bankruptcy appeals is governed by 28 

u.s.c. § 158. This statute provides in relevant part: 

(a) The district court of the United States shall have 

jurisdiction to hear appeals from final judgments, 

orders, and decrees, and with leave of the court, from 

interlocutory orders and decrees, of bankruptcy judges 

entered in cases and proceedings referred to the 

bankruptcy judges under section 157 of this title. An 

appeal under this subsection shall be taken only to the 

district court for the judicial district in which the 

bankruptcy judge is serving. 

(d) The courts of appeals shall have jurisdiction of 

appeals from all final decisions, judgments, orders, and 

decrees entered under subsections (a) and (b) [relating 

to Bankruptcy Appellate Panels] of this section. 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 6 
28 u.s.c. § 158(a), (d). Although the Anderson Brothers made no 

jurisdictional objection. to the appeal, we raised the issue sua 

sponte and ordered additional briefs. 

The majority of the issues raised by the bank relate to the 

district court's June 13, 1988 decision in which it reversed the 

bankruptcy court's ruling in favor of the bank and held that the 

Anderson Brothers' claim was entitled to priority. In that 

decision, the district court remanded the case to the bankruptcy 

court for determination of the amount of the Anderson Brothers' 

claim and whether other creditors could assert similar claims. 

In Homa, Ltd. v. Stone (In re Commercial Contractors, Inc.), 

771 F.2d 1373 (10th Cir. 1985), we addressed the finality of a 

district court decision in which the court reversed the bankruptcy 

court and remanded for further proceedings. Noting a division 

between the circuits, we followed the Seventh Circuit's reasoning 

in In re Riggsby, 745 F.2d 1153, 1156 (7th Cir. 1984), holding that 

"' a decision of the district court on appeal from a bankruptcy 

judge's final order is not itself final if the decision remands the 

case to the bankruptcy judge for significant further proceedings. 

I II In re Commercial Contractors, Inc., 771 F.2d at 1375. 

We acknowledged that other circuits have ruled that a district 

court order affirming or reversing a bankruptcy court decision is 

final for the purposes of appeal under 28 u.s.c. § 158(d), but 

reasoned that our position "furthers the policy underlying the 

finality doctrine by controlling piecemeal adjudication and 

eliminating the delays caused by the appeal of interlocutory 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 7 
decisions, 11 in keeping with congressional policy to narrow the 

availability of bankruptcy appeals as reflected in the 1978 Act. 

We have followed the rationale of In re Commercial Contractors, 

Inc. in other appeals. See, e.g., Magic Circle Energy 1981-A 

Drilling Program v. Lindsey (In re Magic Circle Energy Corp.), 889 

F.2d 950, 953 (10th Cir. 1989); MBank Dallas, N.A. v. O'Connor (In 

re O'Connor), 808 F.2d 1393, 1395 n. 1 (10th Cir. 1987). 

We have not addressed in detail what constitutes "significant 

further proceedings." In In re Commercial Contractors, Inc., the 

case was remanded to the bankruptcy court for de nova hearings 

which constituted significant further proceedings. Recently in 

Coats State Bank v. Grey, Nos. 89-3201 and 89-3202 (April 26, 

1990), we held that a remand for additional findings of fact 

concerning the dispositive issue in the case was a remand for 

"significant further proceedings." Courts in other circuits have 

attempted to clarify what is meant by this phrase. Some have held 

that significant further proceedings occur when the · bankruptcy 

court undertakes more than a mere "ministerial" duty, see M.s.v., 

Inc. v. Bank of Boston (In re M.S.V., Inc.), 892 F.2d 5, 6 (1st 

Cir. 1989), or its activities involve the "'exercise of 

considerable judicial discretion'", see Schneider v. United States 

Dept. of Agric. (In re Schneider), 873 F.2d 1155, 1157 (8th Cir. 

1989) (citation omitted). When the matters on remand are "'unlikely 

either to generate a new appeal or to affect the issue that the 

disappointed party wants to raise on appeal from the order of 

remand, 1 " see Kellogg v. United States Dept. of Energy (In re 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 8 
Compton), 889 F.2d 1104, 1107 (Temp. Erner. ct. App. 1989) (citation 

omitted), the district court's decision is considered final. 

In the few cases permitting an appeal despite a remand, the 

matters to be decided by the bankruptcy court have been 

computational, often involving the calculation of statutory 

interest or damages. See, e.g., United States Trustee v. Prines 

(In re Prines), 867 F.2d 478, 481 (8th Cir. 1989) (remand for award 

of statutory interest). But see In re Schieder, 873 F.2d at 1157 

(remand for calculation of proper fixed interest rate prevents 

finality); In re Gould & Eberhart Gear Mach. Corp., 852 F.2d 26, 

29 (1st Cir. 1988). In other cases, courts haye allowed an appeal 

by finding that the matters on remand constituted a separate 

"judicial unit, 11 thereby enabling the appeal of a distinct, 

unrelated matter. See, e.g., In re FIS Airlease II, Inc., 844 F.2d 

99, 104-05 (3d Cir. 1988) (appeal of broker's appointment under§ 

327 (a) proper notwithstanding remand for determination of his 

compensation); In re Morse Elec. Co., 805 F.2d 262, 265 (7th Cir. 

1986) (determination of validity of claim a final order, even though 

priority and amount of claim to be decided on remand). This view, 

however, is inconsistent with our view of the concept of finality. 

See In re Magic Circle Energy Corp., 889 F.2d at 953 (adhering to 

the "traditional view" that the district court's decision must end 

the litigation and leave nothing to be done but to execute the 

judgment). 

In this case, the district court remanded to the bankruptcy 

court for a determination of the amount of the Anderson Brothers' 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 9 
( 

claim. To make this finding, the bankruptcy court was also 

required to consider whether there were other customers of Bucyrus 

who could assert a similar claim to the funds in Bucyrus' bank 

account. These are more than mere "ministerial" computations 

involving 1 i ttl e judicial discretion. Moreover, the bank is 

appealing the bankruptcy court's decision on remand as part of this 

appeal, further indicating the issues on remand were significant. 

Given that these proceedings involved considerable factfinding and 

involved an issue later appealed by the bank, we conclude that the 

matters on remand constituted "significant further proceedings," 

and that this appeal was premature. 

There is another problem that precludes jurisdiction in this 

case. The district court's decision was entered on June 13, 1988. 

\ 

Yet the bank did not file its notice of appeal of this decision 

until January 3, 1989, after the bankruptcy court entered its 

decision on remand and well outside of the thirty-day filing 

period. See Fed. R. App. P. 4(a) (1). Since the timely filing of 

a notice of appeal is mandatory and jurisdictional, National City 

Bank v. 6 & 40 Inv. Group, Inc. (In re 6 & 40 Inv. Group, Inc.), 

752 F.2d 515, 515 (10th cir. 1985), the appeal is untimely and must 

be dismissed. 

The bank argues, however, that the district court's decision 

was not final until the bankruptcy court entered its decision on 

remand on December 12, 1988. Again, accepting this argument as 

true, this appeal is still defective. If the district court's June 

13, 1988 decision was not final because significant further 

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Appellate Case: 89-3009 Document: 01019855174 Date Filed: 06/05/1990 Page: 10 
proceedings remained on remand, the proper procedural course for 

the bank is to appeal the bankruptcy court's decision on remand to 

the district court first. Then, if the district court rules 

unfavorably, the bank could appeal to this court. See generally, 

In re Compton Corp., 889 F.2d at 1109. 

Instead, the bank has directly appealed the bankruptcy court's 

adverse decision on remand to the court of appeals. This is 

improper under 28 u.s.c. § 158(d). That statute limits the 

jurisdiction of the courts of appeal to final decisions of the 

district court or a bankruptcy appellate panel. There is no 

provision for direct appeal of a bankruptcy court decision to the 

court of appeals. For all the reasons discussed above, this appeal 

is dismissed for lack of jurisdiction. 

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