Opinion ID: 722412
Heading Depth: 2
Heading Rank: 2

Heading: The Dismissal of GCC's Supposed Bankruptcy Claim

Text: 34 In analyzing the confusing record of the bankruptcy court proceedings, the district court concluded that GCC had made two fundamentally different claims. The first, initially lodged in the state court condemnation proceeding and subsequently removed to bankruptcy court along with the entire condemnation proceeding, was unquestionably a claim against the Village for compensation arising from the seizure of the Property. As noted above, the district court vacated the bankruptcy court's finding that this claim was invalid and remanded it to state court. The second was understood by the district court as a claim by GCC against the debtor's estate, seeking the proceeds the Cathedral would receive from the condemnation of the Property. Because the district court understood this as a claim against the debtor's estate, the district court viewed it as a core claim within the bankruptcy court's jurisdiction and affirmed the bankruptcy court's dismissal of GCC's claim. 35 As noted above, this action of the district court raises two troubling problems. First is the possibility that the main issue in the remanded case has already been adjudicated. The district court clearly believed it was remanding to state court for a determination whether GCC had any rights in the Property. If, by affirming the bankruptcy court's dismissal, the district court had already affirmed a finding that GCC had no such rights, arguably that question would be foreclosed from state court adjudication. Second, since the district court ruled that the bankruptcy court had violated GCC's due process rights by compelling it to proceed on scant notice on November 29, 1993, we do not understand why the district court nonetheless affirmed a finding that might terminate GCC's rights. 36 We need not resolve these conflicts because we find that the district court misunderstood the nature of GCC's claim. This was not, as the district court supposed, a claim against the bankrupt estate. The claim filed by GCC in the bankruptcy court on November 24, 1993 was a claim against the Village in the removed eminent domain proceeding. It was filed in the bankruptcy court not because it related to a bankruptcy matter, but only because the bankruptcy court had become the eminent domain court following the removal and had required (by order of October 28, 1993) the resubmission of eminent domain claims. GCC made abundantly clear that its claim was against the Village in the condemnation proceeding, was a duplicate of the claim it had previously filed in the state court, and was filed only because of the bankruptcy court's order. 37 Under the circumstances, we think the district court erred in construing GCC's claim as including a core claim against the debtor. No such claim was advanced by GCC. Accordingly, the district court erred in its conclusion that the bankruptcy court had ruled on a core claim advanced by GCC against the debtor in the bankruptcy proceeding, and in affirming that ruling. The only ruling made by the bankruptcy court on the merits of GCC's claim was on the only claim GCC advanced--a claim against the Village in the condemnation proceeding, that being the claim remanded by the district court to state court. We therefore vacate the district court's ruling to the extent that it purports to affirm the bankruptcy court's adjudication of a claim brought by GCC against the Cathedral's estate.