Court Opinion

ID: 17265
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:02:41+00
Date Added: 2024-06-11T15:04:08.422770
License: Public Domain

Revised April 19, 1999

   IN THE UNITED STATES COURT OF APPEALS

           FOR THE FIFTH CIRCUIT
              _______________

                 No. 98-20626
              Summary Calendar
               _______________

             In the Matter of:

           JORGE A. LENTINO, M.D.,
                     and
             EDUARDO P. LENTINO,
    Also Known as EDUARDO PEDRO LENTINO,
      Also Known as E.P. LENTION, M.D.,

                                       Debtors.

           JORGE A. LENTINO, M.D.,
                     and
             EDUARDO P. LENTINO,
    Also Known as EDUARDO PEDRO LENTINO,
      Also Known as E.P. LENTION, M.D.,

                                       Appellants,

                   VERSUS

          LOWELL T. CAGE, Trustee,

                                       Appellee.

         _________________________

Appeal from the United States District Court
     for the Southern District of Texas
          _________________________

               March 5, 1999
Before JOLLY, SMITH, and WIENER, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

      Proceeding pro se, Eduardo and Jorge Lentino appeal the

district   court’s     decision   to   lift    the    automatic   stay    issued

pursuant to 11 U.S.C. § 362(a).          Finding no error, we affirm.

                                       I.

      This appeal results from a long history of litigation between

Jorge and Eduardo Lentino1 (the “Lentinos”) and Cullen Center Bank

and Trust (“Cullen”).2       In 1993, Cullen won a judgment against the

Lentinos   of   over   $12   million,3      forcing   the   Lentinos     to   file

voluntary petitions for bankruptcy relief under chapter 7.                    These

petitions triggered the automatic stay provisions of 11 U.S.C.

§ 362(a), which prevented Cullen from taking any further action to

collect its judgment. Cage, the appellee, was appointed trustee of

      1
        Marta Lentino, wife of Eduardo Lentino, has also been deeply involved in
the litigation, though she was not a party to the original loan agreements
between the Lentino brothers and Cullen Bank. She has not filed a notice of
appeal and is not a party to this proceeding. Accordingly, we do not consider
the Lentinos’ claims made on her behalf.

      2
        Cullen Center Bank and Trust merged with Frost National Bank in 1993.
The Lentinos charge that the district court erred by continuing to name Cullen
as a party in the bankruptcy proceedings, but they have not explained why this
prejudices their interests.
      3
         Cullen alleged fraud, fraudulent transfers, breach of contract,
conspiracy, negligence, and negligent misrepresentation. The jury awarded Cullen
$1,817,525.42 in actual damages and $2,500,000 in exemplary damages against each
of the Lentino brothers, plus attorneys’s fees, prejudgment interest, post-
judgment interest, and costs of court.      The combined judgment against both
brothers exceeded $12 million.

                                       2
those estates.

     The    Lentinos   and    the    Trustee     appealed     the   state   court

judgment.    The state court of appeals vacated and remanded for

retrial.    See Lentino v. Cullen Ctr. Bank & Trust, 919 S.W.2d 743

(Tex. Civ. AppSSHouston [14th Dist.] 1996, writ denied).

     To pursue the remanded case in Texas district court, Cullen

then filed a motion in the bankruptcy court seeking relief from the

automatic stay.    The Trustee and the Lentinos (including Marta)

objected to    Cullen’s      motion.       The   bankruptcy    court   held   two

hearings on the motion.       In the first hearing, on May 8, 1997, only

Marta Lentino appeared, and there was no explanation of Jorge’s and

Eduardo’s absence.     The motion was carried to the second hearing

scheduled for June 3, 1997.         Before this hearing, however, Eduardo

and Marta Lentino withdrew their objections to the Cullen motion,

and Cullen agreed to abate its motion until June 17, 1998, to allow

the Trustee to retain special counsel to represent the Lentino

estate. This promising settlement was foiled by Jorge Lentino, who

on June 2, 1997, filed objection to lifting the stay.

     The district court withdrew its reference to the bankruptcy

court and held a status hearing on June 5, 1997.              Jorge Lentino did

not attend this hearing, and neither Marta nor Eduardo Lentino

objected to the Trustee’s abatement plan.             Accordingly, when the

Trustee was authorized to retain counsel in the Cullen litigation

on June 11, 1998, the district court lifted the automatic stay.

                                       3
The Lentinos appeal only the lifting of the stay.

                                      II.

      Although the parties have not addressed the question whether

we have jurisdiction to review a district court's lifting of an

automatic stay, “we are obligated to examine the basis for our

jurisdiction, sua sponte, if necessary.”                 Williams v. Chater,

87 F.3d 702, 704 (5th Cir. 1996).             The posture of this case is

somewhat unusual. Normally, we would assert jurisdiction under

28 U.S.C. § 158(d), which authorizes appellate review of orders of

district courts sitting in their appellate capacity over orders of

bankruptcy    courts.      Because    the    district    court   withdrew      its

reference to the bankruptcy court and issued its order lifting the

automatic    stay    while    exercising     its    original,     rather      than

appellate, jurisdiction, however, we can assert jurisdiction, if at

all, only on the basis of 28 U.S.C. § 1291, which governs appeals

of final orders from district courts.4

      Asserting     jurisdiction     under   §   1291    might   have    made   a

difference, because this court’s determination of whether an order

is   final   (and   therefore    appealable)       is   more   liberal   in    the

      4
        See Official Committee of Unsecured Creditors v. Cajun Elec. Power Coop.,
Inc. (In re Cajun Elec. Power Coop., Inc.), 119 F.3d 349, 353 (5th Cir. 1997).

                                       4
bankruptcy context.5       Thus, while this court has already held that

the lifting of a § 362(a) automatic stay is a final order appeal-

able under § 158(d),6 we have not considered its appealability

under § 1291.

      We have, however, decided to apply the liberalized final

judgment rule of § 158(d) when appellate jurisdiction is based on

§ 1291.7       Therefore, because we would hold the lifting of an

automatic stay appealable under § 158(d), we also conclude that it

is appealable under § 1291.8

                                       III.

      We review a bankruptcy court’s lifting of an automatic stay

for abuse of discretion.9             Neither party briefs the question

whether the same standard of review applies to a district court

exercising its original bankruptcy jurisdiction, and we have found

no caselaw from this circuit that gives guidance.               We nevertheless

conclude that the district court’s decision to lift an automatic

      5
        See Foster Sec., Inc. v. Sandoz (In re Delta Servs. Indus.), 782 F.2d 1267,
1269 (5th Cir. 1986) (pointing out that courts properly view finality more flexibly
under § 158(d) than under § 1291).

      6
          See Chunn v. Chunn (In re Chunn), 106 F.3d 1239, 1241 (5th Cir. 1997).

      7
        See Cajun Elec. Power Coop., Inc. v. Central La. Elec. Co. (In re Cajun
Elec. Power Co.), 69 F.3d 746, 748 (5th Cir.), opinion on rehearing, 74 F.3d 599
(5th Cir. 1996) (per curiam).

      8
        Accord Sonnax Indus., Inc. v. Tri Component Prods. Corp. (In re Sonnax
Indus. Inc.), 907 F.2d 1280 (2d Cir. 1990).

      9
        Mendoza v. Temple-Inland Mortgage Corp. (In re Mendoza), 111 F.3d 1264, 1266
(5th Cir. 1997).

                                         5
stay enjoys      the   same    deferential      standard   as    does    a     similar

decision from a bankruptcy court.              In doing so, we follow other

circuits that have applied the abuse-of-discretion standard in

reviewing a district court’s lifting of an automatic stay.10

                                        IV.

      The Lentinos raise only one challenge to the lifting of the

automatic stay. They argue that the court erred by failing to

provide     sufficient      notice    that    lifting   the     stay     was    under

consideration and by failing to hold a hearing.                 They rely on the

language in § 362(d) governing the requirements for the lifting of

an automatic stay:        “On request of a party in interest and after

notice     and   hearing,     the    court    shall   grant     relief    from    the

stay . . . .”

      Unfortunately for the Lentinos, this court has refused to

construe the phrase “after notice and a hearing” to require a

hearing in every case in which relief is sought from an automatic

stay.11    Rather, we have followed the Bankruptcy Code’s definition

of “after notice and a hearing” to mean “after such notice is

appropriate in the particular circumstances, and such opportunity

for a hearing as is appropriate in the particular circumstances.”

      10
         See Sonnax, 907 F.2d at 1288. (“[T]he lifting of the stay is committed to
the sound discretion of the court . . . .”); see also Mitsubishi Motors v. Soler
Chrysler-Plymouth, 814 F.2d 844, 847 (1st Cir. 1987) (“[W]e are left with the
troublesome question of whether the district court abused its discretion by vacating
the stay without first holding a hearing.”)

      11
        See River Hills Assocs., Ltd. (In re River Hills Apartments Fund), 813 F.2d
702, 706 (5th Cir. 1987).

                                         6
11 U.S.C. § 102(1)(A) (1986).

      We agree with the Trustee that nothing in the record suggests

that the Lentinos were without opportunity to object to the lifting

of the stay.      They received notice of both hearings before the

bankruptcy court and notice of the status hearing before the

district court.

      Eduardo Lentino attended the June 9, 1997, status hearing. At

that time, both Lentinos had received notice of Cullen’s request to

lift the stay, and Eduardo had already withdrawn his objection in

hearings before the bankruptcy court.            Jorge Lentino’s notice of

objection was filed on June 2, 1997, but he failed to attend the

June 9 status hearing, despite Eduardo’s attempts to contact him.

      The district court did not lift the stay until over a year

later, on June 12, 1998.          Under the Bankruptcy Code's flexible

definition of “notice and hearing,” the district court did not

abuse its discretion when it lifted the automatic stay a full year

after first notifying the Lentinos and holding a status hearing.

      AFFIRMED.12

      12
         We agree with the Trustee’s characterization of this appeal as mostly
frivolous. We note that the Lentinos have filed a number of other appeals in
this court.   Although we have not reviewed the claims in those appeals, we
remind the Lentinos that “one acting pro se has no license to harass others, clog
the judicial machinery with meritless litigation, and abuse already overloaded
court dockets.” Farguson v. MBank Houston, N.A., 808 F.2d 358, 359 (5th Cir.
1986).

                                       7