In re: Arch Coal, Inc. Debtor
Arch Coal, Inc. Debtor-Appellee Michael Frakes; Jennifer Frakes Interested parties-Appellants City of Springfield Intervenor-Appellee
Submitted: November 16, 2018
from United States Bankruptcy Court for the Eastern District
of Missouri - St. Louis
SALADINO, Chief Judge, SHODEEN and DOW, Bankruptcy Judges.
SALADINO, Chief Judge.
Michael and Jennifer Frakes, appeal the July 3, 2018, order
of the bankruptcy court denying their "Amended Motion for
Determination that Confirmation Order Does Not Bar a State
Court Action Relating to the Springfield, Illinois Coal
Contract." For the reasons discussed below, we dismiss
this appeal as premature.
jurisdiction to hear appeals "from final judgments,
orders, and decrees[.]" 28 U.S.C. § 158(a)(1) and
(b)(1). An order is considered final if "(1) [it] leaves
the bankruptcy court nothing to do but execute the order, (2)
delay in obtaining review would prevent the aggrieved party
from obtaining effective relief, and (3) a later reversal on
that issue would require recommencement of the entire
proceeding." Nebraska v. Strong (In re
Strong), 293 B.R. 764, 767 (B.A.P. 8th Cir. 2003)
(citing First Nat'l Bank v. Allen, 118 F.3d
1289, 1293 (8th Cir. 1997).
first paragraph of the motion filed by the appellants asked
the bankruptcy court "to determine" that they
"are not prohibited by bankruptcy law, the confirmed
plan of reorganization ... or other order of this Court from
filing and prosecuting" a proposed state court
complaint. The prayer of the motion asks "that the Court
enter an Order authorizing them to file and prosecute to
completion the claims set forth in the attached
Complaint." In support, the appellants advance three
reasons as to why they should be able to proceed in state
court with their proposed complaint: (i) the debt is of the
kind described in § 1141(d)(6), a self-effectuating
exception to discharge; (ii) the plan discharge provision
does not bind appellants because they were known creditors
who did not receive notice of confirmation process; and (iii)
the assumption of the contract does not prohibit appellants
from proceeding in state court on a claim to void the
contract on public policy grounds. The bankruptcy court
addressed each assertion in turn.
the issue of whether the alleged debt was discharged pursuant
to § 1141(d)(6), the bankruptcy court held that "an
action for a declaratory judgment on the issue of
dischargeability of a debt also must be timely brought in an
adversary proceeding, pursuant to Rule 7001(9)."
Accordingly, the bankruptcy court denied the motion without
prejudice to the filing of an adversary proceeding by
the bankruptcy court never reached the merits of the request
for declaratory judgment on the discharge issue under
1141(d)(6) and determined that an adversary proceeding was
necessary, the parties and the bankruptcy court have more to
do than simply execute the court's order. Consequently,
regardless of whether the parties agree with the bankruptcy
court's procedural ruling, the bankruptcy court's
order is not final. U.S. Bank Nat'l Ass'n v.
Lewis and Clark Apartments, LP (In re Lewis and
Clark Apartments, LP), 479 B.R. 47, 50-51 (B.A.P. 8th
recognize that the bankruptcy court went on in its order to
issue rulings (or perhaps partial rulings) regarding a notice
issue and the effect of assumption of the contract on the
plaintiffs' request for relief. Frankly, we view the
three issues-the self-effectuating nature of the exception
from discharge under § 1141(d)(6), notice, and effect of
assumption--simply as three arguments supporting the
underlying request of the plaintiffs for a declaration that
they are not barred from proceeding in state court. Those
issues can all be properly addressed if and when the
plaintiffs file an adversary proceeding as suggested by the
the bankruptcy court did not reach the merits of the entire
motion, the order from which this appeal was taken did not
dispose of all the claims of all the parties in the contested
matter. While "[t]his is the antithesis of a final
judgment," Hicks v. Missouri Dep't of
Revenue (In re Hicks), 369 B.R. 420, 423
(B.A.P. 8th Cir. 2007), such an order may, under certain
circumstances, nevertheless be considered final.
When an action presents more than one claim for
relief-whether as a claim, counterclaim, crossclaim, or
third-party claim-or when multiple parties are involved, the
court may direct entry of a final judgment as to one or more,
but fewer than all, claims or parties only if the court
expressly determines that there is no just reason for delay.
Fed.R.Civ.P. 54(b) (in pertinent part). Those
circumstances, however, are not present in this case. The
bankruptcy court did not direct entry of a final judgment or
expressly determine there was no just reason for delay in
entering a final judgment. Consequently, the bankruptcy
court's order is not final and we have no jurisdiction to
review it. Outdoor Cent., Inc. v. GreatLodge.com,
Inc., 643 F.3d 1115, 1118 (8th Cir. 2011).
have jurisdiction to hear appeals, "with leave of the
court, from . . . interlocutory orders and decrees[.]"
28 U.S.C. § 158(a)(3) and (b)(1). Such leave, however,
should be sparingly granted and only in exceptional cases.
Gen. Elec. Capital Corp. v. Machinery, Inc. (In