Grant v. Thurston Group, Inc.

186 B.R. 659, 1995 U.S. Dist. LEXIS 13277, 1995 WL 549062
CourtDistrict Court, N.D. Illinois
DecidedSeptember 14, 1995
DocketNo. 95 C 2939
StatusPublished
Cited by2 cases

This text of 186 B.R. 659 (Grant v. Thurston Group, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grant v. Thurston Group, Inc., 186 B.R. 659, 1995 U.S. Dist. LEXIS 13277, 1995 WL 549062 (N.D. Ill. 1995).

Opinion

MEMORANDUM OPINION AND ORDER

HART, District Judge.

This is an appeal from an order in the bankruptcy ease of debtor Cary Grant. The procedural history is as follows. In August 1989, a state court suit was filed against Cary Grant. The named plaintiff in that lawsuit was R.H. Seward, Inc. However, no entity with that precise name existed. The suit apparently was filed by R.H. Seward Corpo[661]*661ration, a Delaware corporation, which, effective March 23, 1990, amended its name to be The Thurston Group, Inc. In September 1990, summary judgment was entered in favor of R.H. Seward, Inc. and against Grant in the amount of $225,867.48. In 1992, Grant filed his bankruptcy petition, listing R.H. Seward, Inc. as a judgment creditor, with a reference also being made to Thurston Group.1 In the bankruptcy proceeding, the same attorneys filed appearances on behalf of both R.H. Seward, Inc. and the Thurston Group, Inc. A complaint to deny discharge was filed only in the name of R.H. Seward, Inc.

In November 1994, Grant moved to vacate the judgment that had been entered against him in the state court. In an order dated March 10, 1995, the state court vacated the judgment on the ground that R.H. Seward, Inc. was not and had not been an existing entity. The state court, however, granted leave for The Thurston Group, Inc. to enter the action and file an amended complaint. The Thurston Group, Inc. then moved in the bankruptcy court for relief from the automatic stay, see 11 U.S.C. § 362, so that it could perfect an appeal in the state court. The bankruptcy court granted this motion and also granted The Thurston Group, Inc. leave to file an amended complaint in the state court. This order was dated March 27, 1995 and entered on March 28, 1995. In the meantime, Grant had filed a notice of appeal in the state court. Grant appealed the bankruptcy order granting relief from the stay, contending he had never been provided proper notice of the motion for relief from the stay.

On April 7, 1995, the bankruptcy court vacated its March 28 Order to avoid any problem regarding whether Grant had received proper notice of The Thurston Group, Inc.’s motion. The bankruptcy court again granted relief from the stay, permitting The Thurston Group, Inc. to perfect its state court appeal and file an amended complaint in the state action. The Thurston Group, Inc. was directed to inform the state trial and appellate court that Grant was in bankruptcy. It was also directed to take no further action in the state court proceedings. Grant then filed a second appeal which is the one now before this court.2 Grant did not seek to stay the bankruptcy court’s order pending appeal. Shortly after the bankruptcy court’s April order, The Thurston Group, Inc. perfected its state court appeal and filed its amended complaint in state court.

The only issues before this court are whether it was appropriate to grant relief from the stay in order to file an amended complaint and perfect an appeal in the state court. Such action simply preserves The Thurston Group, Inc.’s rights in the event that any debt Grant owes to it is not fully resolved in the bankruptcy proceeding. Cf. April 7, 1995 Transcript at 2. In the order now under review, the bankruptcy court made no ruling on the merits of any claim by The Thurston Group, Inc. against Grant.

The grant of relief from the automatic stay is an appealable final order. In re Cimarron Investors, 848 F.2d 974, 975 (9th Cir.1988). Appellee, however, contends that the appeal is moot because The Thurston Group, Inc. has already filed its amended complaint and perfected its appeal. Appellee cites In re Sullivan Central Plaza, I, Ltd., 914 F.2d 731, 733-34 (1990), on reconsideration, 935 F.2d 723 (5th Cir.1991). That ease, however, involved the lifting of the stay so that a foreclosure action could be completed. Once a foreclosed upon property has been sold to a third party, it is difficult to unwind what has occurred. However, where a party has proceeded following the lifting of the stay, an appeal challenging the lifting of the stay is not moot if there is still relief that can be granted by the court. See id. at 734. Where lifting of the stay allows a monetary action to proceed, relief is always possible in the form of requiring the return of any monetary damages. See id. at 733 n. 6; American Grain Association v. Lee-Vac, Ltd., 630 F.2d 245, 248 (5th Cir.1980). In the present case, if debtor were to succeed on his appeal, [662]*662appellee could be directed to seek to withdraw its notice of appeal in the state court and to seek to withdraw or voluntarily dismiss its amended complaint.3 The appeal is not moot and its merits will be considered.

Grant contends the bankruptcy court had no authority to enter the April 7 Order because it lost jurisdiction to vacate the March 28 Order when Grant appealed the March 28 Order.4 Ordinarily, the filing of an appeal deprives the lower court of jurisdiction over matters involved in the appeal. In re Statistical Tabulating Corp. 60 F.3d 1286, 1289 (7th Cir.1995). However, the Bankruptcy Rules provide that the timely filing of certain motions will cause the prior filing of a notice of appeal to have no effect. See Bankr.R. 8002(b). The Thurston Group, Inc. moved for reconsideration of the March 28, 1995 order within 10 days of its entry. This caused the first notice of appeal to have no effect. See id.; In re Shields, 150 B.R. 259, 260 (D.Colo.1993). The Bankruptcy Court had jurisdiction to enter the April 7 Order.

Grant contends that The Thurston Group, Inc. had no standing to move for relief from the automatic stay. The Thur-ston Group, Inc., however, has a proceeding against debtor Grant pending in the state court, or at least is seeking to maintain such a proceeding. Absent relief from the stay, it cannot pursue those proceedings. The Thur-ston Group, Inc. has standing to seek relief from the stay. Whether it is a proper party in the state court action is not the issue in the bankruptcy appeal; that is an issue for the state courts to resolve should the state court proceedings go any further when the stay is no longer applicable.

Grant’s reliance on principles of collateral estoppel is also misplaced. The state court proceeding cannot have any collateral estoppel effect regarding The Thur-ston Group, Inc. because no judgment has been entered regarding The Thurston Group, Inc.’s claims in that case. A judgment must be entered before there can be a collateral estoppel effect. People v. Franklin, 167 Ill.2d 1, — Ill.Dec. -, 656 N.E.2d 750, 754-55 (1995); Congregation of the Passion v. Touche Ross & Co., 159 Ill.2d 137, 201 Ill.Dec. 71, 78, 636 N.E.2d 503, 510, cert. denied, — U.S. -, 115 S.Ct.

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Bluebook (online)
186 B.R. 659, 1995 U.S. Dist. LEXIS 13277, 1995 WL 549062, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grant-v-thurston-group-inc-ilnd-1995.