Court Opinion

ID: 3036311
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:54:04.134225+00
Date Added: 2024-06-11T11:01:30.928498
License: Public Domain

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.
                            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 Corn-
Pro 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.

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
      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 Corn-
Pro’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

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
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 Corn-
Pro’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

10
     Appellant’s Appendix # 5.
11
     Doc. # 72.
12
     11 U.S.C. § 303(i)(1) (emphasis added).
                                               4
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.

                              _________________

13
 Higgins v. Vortex Fishing Systems, Inc. (In re Vortex Fishing Systems, Inc. ), 379
F.3d 701, 705 (9th Cir. 2004).
                                        5