Opinion ID: 541385
Heading Depth: 2
Heading Rank: 5

Heading: Disposition of Insurance Proceeds

Text: 37 The district court's order approving the abandonment of the Dock System also provided that any insurance proceeds recovered as a result of the partial destruction of the Dock System by Hurricane Hugo were to be paid into a segregated account subject to the control of the district court. Apparently, the district court believed that this disposition of the insurance proceeds would maintain the status quo by preventing the transfer of the proceeds to the Fund pursuant to the terms of the Supplemental Resolution. 38 The Bond Trustee argues that this order contravenes the Supplemental Resolution which provides in pertinent part: 39 [a] If prior to full payment of the Series 1987-A Bonds, the Project is damaged by fire or other casualties.... 40 [a]ll net proceeds of insurance resulting from such claims for losses shall be paid to and held by the [Bond] Trustee in a separate trust account in the Project Revenue Fund.... The Developer is authorized to direct the Trustee, provided there is no Default ... to disburse so much as may be necessary of the net proceeds of such insurance to payment of the cost of such repair, rebuilding, or restoration.... 41 [c] ... all remaining net proceeds if there is a Default ... shall be deposited in the Bond Fund and applied to the repayment of the [Series 1987] Bonds. 42 The Bond Trustee argues that according to Section 9.01(a) of the Supplemental Resolution default has occurred and that the insurance proceeds should have been deposited in the Bond Fund pursuant to the Resolution. 43 The record before the Court contains neither findings of fact nor conclusions of law supporting the district court's order directing the insurance proceeds to be placed in a segregated account subject to the control of the district court. The diversion was effected by means of the abandonment order, yet the order sets forth no rationale justifying this action. Where a trial court fails to make findings of fact and set forth conclusions of law, the record on appeal is insufficient for the appellate court to adequately review the decision. In the absence of a complete record, remand to the district court is the proper remedy to enable the appellate court to review the decision properly. In re Thompson, 788 F.2d 560 (9th Cir.1986); Braniff Airways, Inc. v. Exxon Co., U.S.A., 814 F.2d 1030 (5th Cir.1987). Accordingly, the Court remands this issue to the district court to make further findings of fact and set forth conclusions of law. 44 In sum, the Bankruptcy Trustee did not have the power to convey the Dock System, and therefore the provision of the district court's order approving the abandonment is vacated and the case is remanded for further consideration in conformity with this opinion. Furthermore, the provision of the district court's order directing insurance proceeds to be deposited in a segregated account is unsupported by the record. This provision is vacated and the case remanded to permit the district court to make adequate findings of fact and set forth conclusions of law. 45 Accordingly, for the reasons stated above, the judgment of the trial court is affirmed in part, reversed in part, and remanded. 46 AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. 47