Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-04-06036/USCOURTS-ca8-04-06036-0/pdf.json

Parties Involved:
Cooperative Supply
Appellee
Corn-Pro Nonstock Cooperative
Appellant
Darwin Franzen
Appellee

Document Text:

United States Bankruptcy Appellate Panel

FOR THE EIGHTH CIRCUIT

_____________

No. 04-6031/6032/6036 NE

_____________

In re: Corn-Pro Nonstock *

Cooperative, Inc., *

*

Debtor. *

 * 

* Appeals from the United States

Cooperative Supply, Inc. and * Bankruptcy Court for the District

Darwin Franzen, * of Nebraska

 * 

PetitioningCreditors-Appellants/ *

Cross-Appellees, *

*

v. *

*

Corn-Pro Nonstock Cooperative, Inc., *

*

Debtor-Appellee/Cross-Appellant.*

_____________

Submitted: October 27, 2004

Filed: November 10, 2004

_____________

Before KRESSEL, Chief Judge, SCHERMER, and FEDERMAN, Bankruptcy Judges.

_____________

FEDERMAN, Bankruptcy Judge.

Appellate Case: 04-6036 Page: 1 Date Filed: 11/10/2004 Entry ID: 1832499 
1

11 U.S.C. § 101(20).

2

11 U.S.C. § 303(a).

3

Case No. 03-83232, Doc. # 65.

4

Id.

5

Doc. # 66.

2

FACTUAL BACKGROUND

These appeals arise out of an involuntary bankruptcy petition which was filed

by Cooperative Supply, Inc. and Darwin Franzen (Petitioning Creditors) against

debtor Corn-Pro Nonstock Cooperative, Inc. (Corn-Pro). In response to the

involuntary petition, on July 29, 2003, Corn-Pro filed a motion to dismiss, contending

that, as a “farmer,” within the meaning of the Bankruptcy Code (the Code),1

 it is not

eligible to be the subject of an involuntary bankruptcy proceeding.2

 The bankruptcy

court scheduled a continued hearing on the motion to dismiss for February 3, 2004.

Before such hearing occurred, the parties filed cross-motions for summary judgment,

with supporting affidavits and documentation, concerning the issue of whether CornPro is, indeed, a farmer. By order entered January 26, 2004, the bankruptcy court

granted Corn-Pro’s motion for summary judgment, based on its determination that

Corn-Pro was, indeed, a farmer not subject to an involuntary petition.3

 The court also

denied the Petitioning Creditors’ motion for summary judgment. The court

specifically stated that the order of January 26, 2004, was not a final order for appeal

purposes. The court stated in the order that it would “entertain Corn-Pro’s request for

damages under 11 U.S.C. § 303(i) and enter judgment at that time.”4

 On that same

date, the court continued the hearing on the motion to dismiss until such time as it

made a final ruling on “Order # 65,”5

 the order on summary judgment. 

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6

Doc. # 72.

7

Appellant’s Appendix, # 11.

8

Order, dated October 6, 2004.

9

Bender v. Williamsporr Area School Dist., 475 U.S. 534, 541, 106 S. Ct. 1326, 89

L. Ed. 2d 501 (1986); Brickwood Contractors, Inc. v. Datanet Engineering, Inc., 369

F.3d 385, 390 (4th Cir. 2004).

3

On February 18, 2004, Corn-Pro filed a motion for attorney’s fees and costs

under section 303(i)(1) and (2).6

 On May 11, 2004, the court held a hearing on CornPro’s motion and on June 1, 2004, it issued an order denying Corn-Pro’s request for

attorney’s fees and costs. In the order of June 1, 2004, the bankruptcy court stated as

follows: “This order is a supplement to the order granting summary judgment, Filing

No. 65. This order and Filing No. 65 are now final orders for appeal purposes.”7

On June 10, 2004, the Petitioning Creditors filed separate Notices of Appeal

in identical form from the January 26, 2004 order. On June 16, 2004, Corn-Pro filed

a notice of appeal from the June 1, 2004 order. The bankruptcy court has yet to rule

on the motion to dismiss.

JURISDICTION

Prior to oral argument, we notified the parties that they should be prepared to

discuss the issue of our jurisdiction to hear the appeals.8

 Whether raised by the

parties or not, an appellate court must ascertain for itself whether it has jurisdiction

to proceed.9

 In its motion for summary judgment, Corn-Pro requested “that the Court grant

Corn-Pro its motion for summary judgment, that the court dismiss the involuntary

petition with prejudice, and that the court retain jurisdiction over this matter solely

Appellate Case: 04-6036 Page: 3 Date Filed: 11/10/2004 Entry ID: 1832499 
10Appellant’s Appendix # 5.

11Doc. # 72.

1211 U.S.C. § 303(i)(1) (emphasis added).

4

for the purpose of determining Corn-Pro’s damages under 11 U.S.C. § 303(i)(1) and

(2).10 In its order of January 26, 2004, the court agreed that Corn-Pro, as a farmer,

could not be subject to an involuntary petition, but the court did not deal with the

other issues. Most specifically, it did not enter an order dismissing the case. Thus, the

order of January 26, 2004, is not a final order.

On February 18, 2004, Corn-Pro filed a motion for attorney’s fees and costs

under section 303(i)(1) and (2).11 On May 11, 2004, the court held a hearing on CornPro’s motion and on June 1, 2004, it issued an order denying Corn-Pro’s request for

attorney’s fees and costs. The order of June 1, 2004, referenced the January order, and

said that both orders were now final for appeal purposes. 

The problem with the June order is that the bankruptcy court could not consider

the issue of attorney’s fees and costs–and neither can we--before ruling on the motion

to dismiss. The Code authorizes a bankruptcy court to award attorney’s fees and costs

only upon the dismissal of an involuntary petition:

(i) If the court dismisses a petition under this section other than on

consent of all petitioners and the debtor, and if the debtor does not

waive the right to judgment under this subsection, the court may grant

judgment–

(1) against the petitioners and in favor or the debtor for –

(A) costs; or

(B) a reasonable attorney’s fee.12

Appellate Case: 04-6036 Page: 4 Date Filed: 11/10/2004 Entry ID: 1832499 
13Higgins v. Vortex Fishing Systems, Inc. (In re Vortex Fishing Systems, Inc. ), 379

F.3d 701, 705 (9th Cir. 2004).

5

The plain language of this section requires dismissal before the alleged debtor

becomes entitled to damages.13 We, therefore, dismiss these appeals for lack of

jurisdiction.

Pursuant to Rule 7054(b) of the Federal Rules of Bankruptcy Procedure, the

bankruptcy court should enter a single judgment disposing of both the motion to

dismiss and the request for fees.

_________________

 

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