Kendall v. Homestead Development Co.

17 F.3d 291
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 25, 1994
DocketNo. 92-16460
StatusPublished
Cited by2 cases

This text of 17 F.3d 291 (Kendall v. Homestead Development Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kendall v. Homestead Development Co., 17 F.3d 291 (9th Cir. 1994).

Opinion

OPINION

ALDISERT, Circuit Judge:

In this appeal from a district court’s order granting summary judgment in favor of a Chapter 7 trustee, we must determine if this court has jurisdiction when the notice of appeal was filed prior to the entry of judgment. Specifically, we are called upon to apply Rules 4(a)(1) and 4(a)(2) of the Federal Rules of Appellate Procedure as interpreted in FirsTier Mortgage Co. v. Investors Mortgage Insurance Co., 498 U.S. 269, 111 S.Ct. 648, 112 L.Ed.2d 743 (1991). Should we conclude that we have jurisdiction, we must then decide whether payments made to an employee trust fund out of the debtor’s accounts receivable constituted a voidable transfer of the debtor’s property under the Bankruptcy Code, 11 U.S.C. § 549. The district court held that the transfers were voidable.

Jurisdiction was proper in the district court based on 28 U.S.C. § 1334(a). A-though final judgment was entered in the district court on October 2, 1992, the notice of appeal was filed almost two months earlier, on August 13, 1992.

Rule 4(a)(1) sets forth the general rule that in civil cases where the United States is not a party, the notice of appeal shall be filed “within 30 days after the date of entry of the judgment or order appealed from.” Rule 4(a)(2), however, provides an exception:

[A] notice of appeal filed after the announcement of a decision or order but before the entry of the judgment or order shall be treated as filed after such entry and on the day thereof.

We must construe this exception in light of the teachings of FirsTier, 498 U.S. at 276, 111 S.Ct. at 652, in which the Court delineated the circumstances under which an appeal taken prior to the entry of judgment by a district court qualifies as a timely appeal under Rule 4(a)(2):

In our view, Rule 4(a)(2) permits a notice of appeal from a nonfinal decision to operate as a notice of appeal from the final judgment only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment.

I.

The facts are not controverted. On September 20, 1989, Jack Raley Construction, Inc. filed a Chapter 11 bankruptcy petition, which was later converted to a Chapter 7. At the time it filed its bankruptcy petition, [293]*293Raley owed over $135,000 to the Appellants, Carpenters Health and Welfare Trust Fund for California and related trust funds (hereinafter “Carpenters Fund” or “the Fund”). Carpenters Fund is an employee benefit plan created pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. Under a collective bargaining agreement, Raley was obligated to pay a contribution to Carpenters Fund for every hour of carpentry work performed by Raley’s employees. Both pre-petition and post-petition, Raley employees performed carpentry work on projects being developed by Homestead Development Company, Inc.

As a result of a post-petition agreement between Homestead, Carpenters Fund and Raley, Homestead made certain payments directly to Carpenters Fund for the sole purpose of satisfying Raley’s pre-petition obligations to the Fund. These payments were taken from monies due Raley for work completed on Homestead projects, and they were not approved by the bankruptcy judge.

The Appellee John T. Kendall, a Chapter 7 bankruptcy trustee, filed a complaint in bankruptcy court seeking to recover the amounts paid by Homestead to the Fund on the ground that the payments constituted post-petition transfers of property from the debtor’s estate. See 11 U.S.C. §§ 549, 550. After the proceedings were removed to the district court on motion of the Fund, both parties moved for summary judgment.

Subsequently, on July 23,1992, the district court granted summary judgment in favor of the trustee. The district court determined:

1. The monies owed by Homestead ... to the debtor, with respect to both pre-petition and post-petition work of the debtor, are the property of the debtor’s estate under 11 U.S.C. § 541.
2. The payments which Homestead ... made to defendant were post-petition transfers of the property of the estate of the debtor, which plaintiff can recover under 11 U.S.C. § 549.
3. Trust funds held by the debtor at the time of bankruptcy are not the property of the estate. However, the monies at issue were not trust funds, but only accounts payable owed by Homestead ... to the debtor, and by the debtor to the defendant.

E.R. at 56 (citations omitted). The district court concluded that until the monies owed by an employer under an agreement are actually paid to the trust fund, the relationship between the employer and the trust “is simply that of creditor and debtor.” Id at 57.

Especially relevant to the threshold question of jurisdiction, in its July 23 order the court stated:

4.Summary judgment is therefore granted in favor of plaintiff and against defendant with respect to the payments made by Homestead.

Id Significantly, the court did not mention the possibility of pre-judgment interest in its July 23 order.

Thereafter, the court requested the trustee to prepare an order of judgment. On August 13, 1992, prior to the filing of the order of judgment and prior to the entry of the judgment itself, Carpenters Fund filed a notice of appeal. Two days later, on August 15, the trustee forwarded to the district court a proposed form of judgment which included prejudgment interest “at the legal rate (7%) from the dates of transfer of all subject payments” from Homestead to Carpenters Fund. Id at 64.

On August 25, the Fund filed a written objection to the inclusion of pre-judgment interest, requesting “an opportunity to brief and argue the issue of whether pre-judgment interest is available to Plaintiff.” Id at 65. On October 2, without scheduling additional briefing or argument, the district court entered judgment in favor of the Appellee in the amount of $135,206.24, plus pre-judgment interest of $24,095.16. Although the Fund’s notice of appeal was filed six weeks before the entry of judgment and the resolution of the pre-judgment interest issue, the Fund did not file a new notice of appeal subsequent to the entry of judgment.

On appeal, the Fund argues that the district court erred by granting summary judgment in favor of the trustee because the trustee failed to carry his burden of proof, because the transferred funds were expressly [294]

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Related

Adelabu v. Ashcroft
61 F. App'x 496 (Ninth Circuit, 2003)
In Re Jack Raley Construction, Inc.
17 F.3d 291 (Ninth Circuit, 1994)

Cite This Page — Counsel Stack

Bluebook (online)
17 F.3d 291, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kendall-v-homestead-development-co-ca9-1994.