In Re Tara of North Hills

116 B.R. 455, 1989 U.S. Dist. LEXIS 17137, 1989 WL 222499
CourtDistrict Court, E.D. North Carolina
DecidedAugust 9, 1989
Docket89-246-CIV-5-BR
StatusPublished
Cited by5 cases

This text of 116 B.R. 455 (In Re Tara of North Hills) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Tara of North Hills, 116 B.R. 455, 1989 U.S. Dist. LEXIS 17137, 1989 WL 222499 (E.D.N.C. 1989).

Opinion

ORDER

BRITT, Chief Judge.

This matter is before the court on the appeal by Barney K. Huang and Lindy W. Huang (hereinafter “the Huangs” or “Dr. and Mrs. Huang”) from the bankruptcy *457 court’s February 1, 1989 order denying the Huangs’ motion to set aside or revoke the consent order entered by the court on April 23, 1987 (hereinafter “the Consent Order”). This appeal is brought pursuant to 28 U.S.C. § 158(a) which provides that the district courts of the United States have jurisdiction to hear appeals from final judgments, orders and decrees of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under 28 U.S.C. § 157.

STATEMENT OF THE ISSUES

By order filed February 1, 1989, United States Bankruptcy Judge Thomas M. Moore denied the Huangs’ motion pursuant to Rule 60(b) of the Federal Rules of Civil Procedure (hereinafter “Rule 60(b)”) to revoke a consent order entered by the bankruptcy court on April 23, 1987. On appeal, the Huangs contest this ruling.

Specifically, the Huangs requested the bankruptcy court to relieve them from the terms of the April 23, 1987 Consent Order on the basis that the order resulted from alleged fraud on the part of the Huangs’ former attorneys.

A Rule 60(b) motion (made applicable in bankruptcy proceedings by Bankruptcy Rule 9024) is addressed to the trial court’s judicial discretion, 1 and the court’s ruling thereon is “a matter normally beyond appellate review.” Seismograph Service Corp. v. Offshore Raydist, Inc., 263 F.2d 5, 23 (5th Cir.1958). The trial court’s decision can be reversed on appeal only upon a showing of a clear abuse of that discretion. See, e.g., Compton v. Alton S.S. Co., 608 F.2d 96 (4th Cir.1979). See also Pagan v. American Airlines, Inc., 534 F.2d 990 (1st Cir.1976); Virgin Islands Nat’l. Bank v. Tyson, 506 F.2d 802 (3rd Cir.1974), cert. denied, 421 U.S. 976, 95 S.Ct. 1976, 44 L.Ed.2d 467 (1975); Smith v. Missouri Pac. R. Co., 615 F.2d 683 (5th Cir.1980); Marshall v. Monroe & Sons, Inc., 615 F.2d 1156 (6th Cir.1980); and Bradford Exchange v. Trein's Exchange, 600 F.2d 99 (7th Cir.1979).

In addition, where a determination whether to grant or deny relief under Rule 60(b) depends upon a discretionary appraisal of the facts of a particular case, the trial court's findings of fact must be accepted on appeal unless clearly erroneous. See Bankruptcy Rule 8013.

A trial court’s exercise of discretion in light of supportable facts cannot be disturbed unless there was a clear abuse of that discretion. Inmates of Allegheny County Jail v. Wecht, 754 F.2d 120 (3d Cir.1985). The rationale behind this rule is clear, and is succinctly set forth in Atchison, Topeka and Santa Fe Railway Co. v. Barrett, 246 F.2d 846, 849 (9th Cir.1957).

The trial judge saw and heard the plaintiff; saw his twitchings, what they were and what they were not.... He saw or heard the other matters relied on by appellant; he felt the “climate” of the trial.... The Court of Appeals should not and will not substitute its judgment for that of the trial court, nor reverse the lower court’s determination save for an abuse of discretion.

In order to demonstrate an abuse of discretion and prevail on a motion to vacate an order, an appellant cannot simply show that the court below properly could have vacated it. “Instead, [the] appellant must demonstrate a justification so compelling that the court was required to vacate ... [the] order.” Solaroll Shade and Shutter Corp., Inc. v. Bio-Energy Systems, Inc., 803 F.2d 1130, 1132 (11th Cir.1986).

I

STATEMENT OF THE CASE

A. Nature of the Case

Tara of North Hills, a North Carolina general partnership owning a 150-unit apartment project in Raleigh known as Tara of North Hills, became a debtor under *458 Chapter 11 (11 U.S.C. § 1101 et seq.) after one of its three general partners, W. Garland Avent (hereinafter “Avent”), filed an involuntary petition on February 19, 1987. An order for relief was entered by the bankruptcy court on March 27, 1987.

Thereafter, the Huangs filed a motion to vacate the order for relief and dismiss the Chapter 11 case. At or about the same time, Pioneer Savings Bank, Inc. (hereinafter Pioneer) filed motions (i) to modify the automatic stay; (ii) for adequate protection; and (iii) for an order restricting the use of cash collateral. On April 14, 1987, prior to these motions being heard by the bankruptcy court, Pioneer, the debtor’s largest creditor (represented by the law firm of Poyner & Spruill), and the debtor’s general partners — Avent (represented by the law firm of Smith, Debnam, Hibbert & Pahl) and the Huangs (and their then attorneys, the law firm of Wyrick, Robbins, Yates, Ponton & Kirby) — attended a hearing before the bankruptcy court and in the course thereof negotiated and agreed to the appointment of a Chapter 11 trustee for the partnership, thus rendering it unnecessary for the bankruptcy court to decide the aforementioned motions. The terms of the parties’ agreement were memorialized in a Consent Order signed by each of the general partners, counsel for Pioneer, counsel for Avent, counsel for the Huangs, and the court on April 23, 1987. Pursuant to this Consent Order, David W. Boone was appointed Chapter 11 trustee.

Concluding that reorganization under Chapter 11 was not feasible, the trustee filed a motion on July 2, 1987, requesting that (i) the ease be converted to one under Chapter 7 (11 U.S.C. § 701 et seq., and (ii) the court approve the public sale of the debtor’s property.

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Bluebook (online)
116 B.R. 455, 1989 U.S. Dist. LEXIS 17137, 1989 WL 222499, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-tara-of-north-hills-nced-1989.