Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-03091/USCOURTS-ca10-94-03091-0/pdf.json

Parties Involved:
Steve A. Buckner
Appellant
Farmers Home Administration
Appellee

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FILED 1s 

UDited States Court o_f Appea Tenth Circu•t 

SEP 14 1995 

PATRICK FISHER 

Clerk 

IN RE: STEVE A. BUCKNER, 

Debtor. 

FARMERS HOME ADMINISTRATION, 

Appellee, 

vs. 

No. 94-3091 

(D.C. No. 91-CV-4076) 

(D. Kan.) 

STEVE A. BUCKNER, 

Appellant. 

ORDER 

Filed September 14, 1995 

Before MOORE, ANDERSON, and BALDOCK, Circuit Judges. 

Debtor Steve A. Buckner appeals the district court's order 

reversing and remanding for further proceedings a decision of the 

bankruptcy court. Because we conclude the district court's order 

does not constitute a final order under 28 U.S.C. § 158(d), we 

dismiss the appeal for lack of jurisdiction. 

The facts of this case are undisputed. On March 22, 1984, 

the Farmers Home Administration (the "FmHA") loaned Debtor 

$98,000. Debtor later contracted with the Commodity Credit 

Corporation ("CCC") to enter his farmland in the Conservation 

Reserve Program ("CRP"). The CRP contract entitled Debtor to 

Appellate Case: 94-3091 Document: 01019276973 Date Filed: 09/14/1995 Page: 1 
receive an annual payment of $5,562.20 for ten years in exchange 

for performing conservation activities on his farmland. 

Debtor subsequently defaulted on his FmHA loan and filed a 

petition for relief under Chapter 13 of the Bankruptcy Code on 

November 1, 1990. The FrnHA filed a proof of claim for 

approximately $128,079.65, and moved to lift the automatic stay to 

setoff Debtor's 1990 prepetition CRP payment and future 

postpetition CRP payments against FmHA's claim. The bankruptcy 

court granted the FmHA's motion to setoff Debtor's 1990 

prepetition CRP payment but denied the FmHA's motion to lift the 

stay to setoff Debtor's postpetition CRP payments. The bankruptcy 

court ruled that the FmHA could not setoff Debtor's postpetition 

CRP payments against Debtor's prepetition FmHA loan debt because 

the obligations lacked the requisite mutuality for setoff under 11 

u.s.c. § 553.1 

On appeal the district court reversed the bankruptcy court. 

In re Buckner, 165 B.R. 942, 947 (D. Kan. 1994). The district 

court determined that because Debtor's obligations on both the CRP 

contract and the FmHA loan arose prepetition, the obligations 

satisfied the mutuality requirement of § 553 of the Bankruptcy 

Code. See id. Consequently, the district court reversed the 

1 Section 553 provides: 

(a) Except as otherwise provided in this section and in 

sections 362 and 363 of this title, this title does not 

affect any right of a creditor to offset a mutual debt 

owing by such creditor to the debtor that arose before 

the commencement of the case under this title against a 

claim of such creditor against the debtor that arose 

before the commencement of the case . . . . 

11 U.S.C. § 553 (a). 

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Appellate Case: 94-3091 Document: 01019276973 Date Filed: 09/14/1995 Page: 2 
bankruptcy court's order denying the FmHA the right to setoff and 

"remanded to the bankruptcy court for a determination of whether 

the government is entitled to relief from the automatic stay under 

11 U.S.C. § 362." Id. Debtor appealed the district court's order 

to this court. 

We sua sponte ordered the parties to submit briefs addressing 

the jurisdictional question of whether the district court's order 

is appealable under 28 U.S.C. § 158(d). Debtor contends that the 

district court's order is final and appealable and that we have 

jurisdiction. Debtor's argument is without merit. 

Our jurisdiction over this bankruptcy appeal must be based on 

28 U.S.C. § 158 which provides in relevant part: 

(a) The district courts 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. 

(d) The courts of appeals shall have jurisdiction 

of appeals from all final decisions, judgments, orders, 

and decrees entered under subsection[] (a) ... of this 

section. 

28 U.S.C. § 158(a), (d) (emphasis added). Accordingly, when 

jurisdiction in the court of appeals is based on§ 158(d), we have 

jurisdiction only when the district court decision appealed from 

is "final." Id. § 158(d). We have interpreted 'final order' for 

purposes of § 158(d) in traditional finality terms rather than 

adopting the more flexible standard of other circuits for 

identifying 'final orders' of bankruptcy judges. Magic Circle 

Energy 1981-A Drilling Program v. Lindsey (In re Magic Circle 

Energy Corp.), 889 F.2d 950, 953 (lOth Cir. 1989) (collecting 

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Appellate Case: 94-3091 Document: 01019276973 Date Filed: 09/14/1995 Page: 3 
cases). "' [T]o be final and appealable, the district court's 

order must end the litigation and leave nothing to be done except 

execute the judgment.'" Id. (quoting In re Glover. Inc., 697 F.2d 

907, 909 (lOth Cir. 1983)). A district court order reversing the 

bankruptcy court and remanding for significant further proceedings 

is not final and appealable under 28 U.S.C. § 158(d). Balcer 

Pension Investors v. Wiston XXIV Ltd. Partnership (In re Wiston 

XXIV Ltd. Partnership), 988 F.2d 1012, 1013 (lOth Cir. 1993). 

"'Significant further proceedings' occur when the bankruptcy court 

undertakes more than mere 'ministerial' computations involving 

little judicial discretion." Rubner & Kutner. P.C. v. United 

States Trustee (In re Lederman Enters .. Inc.), 997 F.2d 1321, 1323 

(lOth Cir. 1993). "A remand for significant further proceedings 

includes one requiring de novo hearings, additional findings of 

fact concerning the dispositive issue in the case, or a 

determination of the amount of a claim." Jones v. Jones (In re 

Jones), 9 F.3d 878, 879 n.2 (lOth Cir. 1993). 

In the instant case, the district court ruled that the FrnHA 

had established its right under § 553 of the Bankruptcy Code to 

setoff Debtor's postpetition CRP payments against the FrnHA's claim 

on Debtor's defaulted FrnHA loan. The automatic stay provision, 

however, prevents the FrnHA from exercising its setoff right2 

unless the bankruptcy court determines the FrnHA is entitled to 

relief from stay under 11 U.S.C. § 362(d). Thus, the district 

2 See 11 U.S.C. § 362(a) (7) (The filing of a petition for 

relief under the Bankruptcy Code "operates as a stay, applicable 

to all entities, of ... the setoff of any debt owing to the 

debtor that arose before the commencement of the case under this 

title against any claim against the debtor.") (emphasis added). 

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Appellate Case: 94-3091 Document: 01019276973 Date Filed: 09/14/1995 Page: 4 
court remanded the case to the bankruptcy court to determine 

whether the FmHA is entitled to relief from the automatic stay to 

exercise its right of setoff. 

The relief from stay provision permits the bankruptcy court, 

after notice and a hearing, to lift the automatic stay "for cause, 

including the lack of adequate protection of an interest in 

property of such party in interest." 11 U.S.C. § 362(d) (1). On 

remand, therefore, the bankruptcy court must conduct a hearing, 

obtain evidence, and determine whether Debtor can provide the FmHA 

with adequate protection for its security interest3 in the funds 

subject to setoff. See generally In re Vitreous Steel Prods. Co., 

911 F.2d 1223, 1231-32 (7th Cir. 1990) (explaining relief from 

stay procedure) . Because the determination whether the FmHA is 

entitled to relief from stay under 11 U.S.C. § 362(d) to exercise 

its right of setoff requires more than mere ministerial 

computations involving little judicial discretion, we conclude 

that the matters on remand constitute "significant further 

proceedings." Consequently, this appeal is jurisdictionally 

defective because the district court's order reversing and 

remanding to the bankruptcy court does not constitute a final 

3 The Bankruptcy Code converts the United States' right to 

setoff under § 553 to a secured claim in the funds subject to 

setoff. See 11 U.S.C. § 506(a) ("An allowed claim of a creditor . . . that is subject to setoff under section 553 of this title, 

is a secured claim . . . to the extent of the amount subject to 

setoff . . . and is an unsecured claim to the extent that the ... amount so subject to setoff is less than the amount of such 

allowed claim."). 

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Appellate Case: 94-3091 Document: 01019276973 Date Filed: 09/14/1995 Page: 5 
'• 

order under 28 U.S.C. § 158(d). 

APPEAL DISMISSED. 

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Entered for the Court 

Bobby R. Baldock 

Circuit Judge 

Appellate Case: 94-3091 Document: 01019276973 Date Filed: 09/14/1995 Page: 6