Opinion ID: 2791701
Heading Depth: 1
Heading Rank: 3

Heading: jurisdiction

Text: 1. Final Orders Though it is not raised by either party, we have an independent duty to examine our own jurisdiction. Nebraska v. Strong (In re Strong), 305 B.R. 292, 295 (B.A.P. 8th Cir. 2004) (citing Weihs v. Kenkel (In re Weihs), 229 B.R. 187, 189 (B.A.P. 8th Cir. 1999)). We have jurisdiction to hear appeals from final orders and from interlocutory orders with leave of the court. Coleman Enterprises, Inc. v. QAI, Inc. (In re Coleman Enterprises, Inc.), 275 B.R. 533, 537 (B.A.P. 8th Cir. 2002); 28 U.S.C. §§ 158(a)(1), (a)(3), (b). An order is considered final if “(1) [it] leaves the bankruptcy court nothing to do but execute the order, (2) delay in obtaining review would prevent the aggrieved party from obtaining effective relief, and (3) a later reversal on that issue would require recommencement of the entire proceeding.” Nebraska v. Strong (In re Strong), 293 B.R. 764, 767 (B.A.P. 8th Cir. 2003) (citing First Nat’l Bank v. Allen, 118 F.3d 1289, 1293 (8th Cir. 1997)). The debtor purports to appeal from three orders – the May 13 order sustaining, in part, the debtor’s objection to Daimler’s claim; the June 6 denial of reconsideration; and the October 2 confirmation order. However, as discussed in the debtor’s earlier appeal, the May 13 and June 6 orders are not final orders. The confirmation order is the only final, appealable order. The fact that the confirmation order is now a final order does not render the May 13 and June 6 orders final: They are still interlocutory. Those orders, standing alone, are not 7 appealable.2 Nevertheless, while not appealable, to the extent they played a part in a reviewable final order their propriety may be reviewed. See Electrical Fittings Corp. v. Thomas & Betts Co., 307 U.S. 241, 59 S.Ct. 860, (1939). 2. Standing “In order to have standing to appeal the decision of the bankruptcy court, an appellant must be a person aggrieved.” Zahn v. Fink (In re Zahn), 367 B.R. 654, 657 (B.A.P. 8th Cir. 2007) (citing O’Brien v. Vermont (In re O’Brien), 184 F.3d 140, 142 (2nd Cir. 1999)). “It is an abecedarian rule that a party cannot prosecute an appeal from a judgment in its favor.” In re Zahn, 367 B.R. at 657 (citing Elkin v. Metropolitan Prop. & Cas. Ins. (In re Shkolnikov), 470 F.3d 22, 24 (1st. Cir 2006)). Most importantly, “a party may not appeal from a judgment or decree in his favor, for the purpose of obtaining a review of findings he deems erroneous which are not necessary to support the decree.” Electrical Fittings Corp., 307 U.S. at 242. Despite appealing from the confirmation order, the debtor does not allege any error in that order. At oral argument, in response to being asked what the error in the confirmation order was, the debtor’s attorney replied, “I would say that the confirmation order is not erroneous.” Additionally, the debtor’s brief does not once mention an error in the confirmation order. The debtor proposed a plan, asked to have it confirmed, and it was indeed confirmed. The debtor received exactly the relief it requested. The debtor does not really seek review of the confirmation order. It really seeks review of the bankruptcy court’s valuation and 2 Even if the May 13 and June 6 orders were final, the debtor’s appeal is untimely. See Federal Rule of Bankruptcy Procedure 8002(a). 8 application of adequate protection payments, two determinations that are not necessary to support the confirmation order. The Eighth Circuit has adopted a procedure for this precise scenario for chapter 13 debtors. A chapter 13 debtor who is unable to secure confirmation of her preferred plan may propose a plan and object to that plan. “A debtor who objects to her own plan may be an aggrieved party and have standing to appeal confirmation of such plan.” Zahn v. Fink (In re Zahn), 526 F.3d 1140 (8th Cir. 2005). Assuming the Eighth Circuit would apply this procedure to chapter 11 cases, it would require a debtor to propose the plan it wants and then after its confirmation is denied, propose a different plan, object to its confirmation and then appeal. The debtor did none of that. It simply filed a plan, obtained confirmation and appealed. Because the debtor is not an aggrieved party, it does not have standing to appeal the order confirming its plan. 3. Mootness “A federal court may only exercise jurisdiction over cases and controversies and lacks authority over moot issues.” Internal Revenue Serv. v. Ealy (In re Ealy), 396 B.R. 20, 22 (B.A.P. 8th Cir. 2008) (citing U.S. CONST., art. III, § 2, cl 1). A case becomes moot “when it no longer presents a controversy with respect to which the court can give meaningful relief.” Crown Media, LLC v. Gwinnett Cnty., GA, 380 F.3d 1317, 1324 (11th Cir. 2004). A case is no longer live if the reviewing court is incapable of restoring the parties to their original position. In re Strong, 312 B.R. at 380. 9 On May 30, 2012, the debtor possessed 113 of Daimler’s trucks. By May 5, 2014, the debtor had surrendered all but 23 of the trucks. On October 2, 2014, the date of confirmation, the debtor only possessed three trucks. Then, at the time of oral argument on this appeal, the debtor revealed that it no longer possessed any of Daimler’s trucks. Regardless of this significant change in circumstance, the parties argue at length about the valuation of the trucks. The debtor’s argument hinges on the allegation that the bankruptcy court’s erroneous valuation resulted in overpayment of adequate protection payments. It argues that the values assigned to the trucks in the agreed order are binding on the parties, and apparently on the court, for the remainder of the case. The debtor is incorrect. The adequate protection order never purported to value the trucks. The values assigned to the trucks in Exhibit A were simply a mechanism for calculating adequate protection payments, numbers to input into the formula for determining fair compensation for Daimler. The order itself did not state that it was establishing a value for trucks. Even if the agreed order did constitute a valuation of the trucks, that valuation can change throughout the course of the bankruptcy case. Section 506 of the Bankruptcy Code governs the “Determination of the Secured Status.” It states that “such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor’s rights.” 11 U.S.C. § 506(a)(1). As referenced by the bankruptcy court, the Eighth Circuit has held “[f]or purposes of the reorganization plan, the value of the collateral is to be determined at the time for confirmation of that plan. An initial valuation for adequate protection purposes is not res judicata for purposes of determining the 10 value of the collateral, and thus the allowed secured claims of the creditors under a reorganization plan.” Norwest Bank Worthington, et. al. v. Ahlers (In re Ahlers), 794 F.2d 388, 398 (8th Cir. 1986), rev’d on other grounds, Norwest Bank Worthington v. Ahlers, 485 U.S. 107 (1988). We agree with the bankruptcy court: Valuation can, and often does, change throughout the course of a case. See In re Cahill, 503 B.R. 535 (Bankr. D. N.H. 2013). A change in the value of collateral, along with many other factors, can change an allowed secured claim. The parties may argue a number of interesting questions that they would like the answers to. However, because the debtor now possesses no trucks, there is no meaningful relief left to be granted. Courts decide disputes, not interesting questions. Certainly the passage of time and the disposition of the trucks also reduced the total amount of the debtor’s proceeds. Since the value of a secured claim needs to be determined as of the date of confirmation, the alleged valuations in the agreed order are moot, if not irrelevant.