Court Opinion

ID: 12533
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:18:33+00
Date Added: 2024-06-11T12:18:50.818334
License: Public Domain

UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT

                     _______________________

                           No. 96-20623
                         Summary Calendar
                     _______________________

In The Matter of: STRUCTURAL SOFTWARE, INC.

                                                           Debtor
--------------------------

PAMELA GALE JOHNSON, Trustee,

                                                       Appellant,

                                versus

ENGINEERING DYNAMICS, INC.,

                                                        Appellee.

_________________________________________________________________

           Appeal from the United States District Court
                for the Southern District of Texas
                            (96-MC-99)
_________________________________________________________________

                             June 6, 1997

Before JONES, DeMOSS, and PARKER, Circuit Judges.

EDITH H. JONES, Circuit Judge:*

          The trustee for Structural Software, Inc. has appealed

the district court’s entry of an order lifting the automatic stay

pursuant to an Agreed Order to lift stay, to which she was a party

     *
       Pursuant to Local Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
when the order was filed in the bankruptcy court in April, 1995.

The trail which led the trustee to this appeal is tangled and

confused, but the outcome is simple.              She cannot appeal an order to

which she agreed.            Further, the bankruptcy court should not have

refused to enter the agreed order under the circumstances here

presented.    Moreover, the district court was within its authority

in granting the relief it did.                 The district court judgment is

affirmed.

            We have appellate jurisdiction over this appeal pursuant

to 28 U.S.C. § 1291.           In re: Cajun Electric Power Co Op, Inc., 69
F.3d 746, 747 (5th Cir. 1995).

            It    is    unnecessary     to     recite   the   entire   procedural

background of this case.            The Houston bankruptcy case apparently

originated with a lawsuit between EDI (appellee here) and the

debtor over alleged copyright infringement of EDI’s software. This

court held that EDI could claim copyright protection over portions

of the software and remanded to the Louisiana district court.

Engineering Dynamics, Inc. v. Structural Software, Inc., 26 F.3d
1335 (5th Cir. 1994), supplemental opinion on rehearing, 46 F.3d
408 (5th Cir. 1995).            In the meantime, the bankruptcy case had

commenced,    and      EDI    sought   relief    from   the   automatic   stay    to

complete the litigation. An agreed order was entered into in April

1995 by counsel for the Chapter 7 trustee, counsel for EDI and

counsel     for   another       creditor       that   expressly   permitted      the

litigation to go forward, with only the following exception:

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          Nothing in this order shall be deemed or
          construed to authorize EDI to prosecute any
          post-petition   claims,   including   but  not
          limited to any request for injunctive relief
          against   the    Structural   Software,   Inc.
          bankruptcy estate or the Trustee . . . and EDI
          shall not prosecute any such post-petition
          claims against the Structural Software, Inc.
          bankruptcy estate or the Trustee without first
          presenting the matter to this Court.

The bankruptcy court, although presented with this order, did not

enter it and persisted for months in refusing to enter it.

          The trustee attempted to sell assets of SSI including the

disputed software program to a third party, leading EDI to object

and make a counter-offer of sale.          To make a long story short, EDI

eventually reached a tentative agreement withe the Trustee, but the

former owners of SSI objected, and the bankruptcy court was forced

to conduct a hearing on a number of issues.                 Throughout this

period, the court refused to enter the agreed order lifting the

stay.

          EDI apparently became understandably vexed at the drawn-

out process   and   frustrated   at       its   inability   to   complete   the

litigation.   In early 1996, EDI moved to withdraw the reference to

the bankruptcy case and then to lift the automatic stay so that the

Louisiana litigation could go forward.           Over vigorous and lengthy

objections filed by the trustee, SSI and the bankruptcy judge

himself, the district court granted EDI’s requests.               The trustee

has at this juncture appealed only the order lifting the stay.

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          As we see it, the district court’s order lifting stay

does not contain the exception noted in the agreed bankruptcy court

order between the parties.      To that extent, it arguably grants

broader relief to EDI and therefore should be reviewed on its own

terms.   Nevertheless, the conclusion is inescapable that the

trustee did agree to allow the Louisiana litigation to continue

except for the award of some sort of post-petition injunctive

relief and the resolution of post-petition damage claims against

the debtor’s estate or the trustee.   To the extent that the trustee

agreed to some relief, she ought to be bound to that deal.      She

cannot escape the impact of the agreed order simply because the

bankruptcy judge refused to enter it and because she was attempting

-- unsuccessfully -- to settle the issues left open by the agreed

order.   The trustee is not a “party aggrieved” for purposes of

appeal to the extent the Agreed Order provided for a consensual

lifting of the stay.

          With respect to the arguably broader relief granted by

the district court, we find no error.        The court lifted the

automatic stay pursuant to 11 U.S.C. § 362(d) and (g) to allow the

entire litigation to go forward in the Louisiana district court.

Without getting into the argument over who had the burden to prove

“cause” for this relief, we affirm the district court’s implicit

finding that cause was shown.    It makes eminent sense to continue

the lawsuit in a forum which already had experience with it, where

the issues against SSI and the individual defendant Guntur could

                                  4
all be resolved, and where damage issues would not have to be

bifurcated. Judicial economy, if there remains any economy in this

proceeding, is furthered by that result.               The bankruptcy case

cannot meaningfully be interfered with, because EDI has withdrawn

its offer to purchase the assets of SSI.          Any claimed prejudice to

creditors is speculative at best, particularly considering that the

trustee’s    expenses   have   been       magnified   considerably   by   the

procedural tangle resulting from her tactical decision not to agree

to simple completion of the litigation in Louisiana.

            For these reasons, the judgment of the district court is

AFFIRMED.

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