Johnson v. Texas Hydrogen Engy ( 1999 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 99-50384
Summary Calendar
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In The Matter Of: TEXAS HYDROGEN ENERGY CORPORATION, Debtor.
CLARENCE T. V. JOHNSON,
Defendant-Appellant,
versus
TEXAS HYDROGEN ENERGY CORPORATION; HYDROGEN ENERGY
CORPORATION,
Plaintiffs-Appellees.
_______________________________________________________________
Appeal from the United States District Court
for the Western District of Texas
(MO-98-CV-140)
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November 1, 1999
Before HIGGINBOTHAM, SMITH, and BARKSDALE, Circuit Judges.
PER CURIAM:*
At issue is the non-award of attorney’s fees for a Texas
declaratory judgment action removed to bankruptcy court, the fees
being claimed under that Texas statute or for an alleged “bad
faith” claim under FED. R. BANKR. P. 9011.
In April 1990, by promissory note, Clarence Johnson lent money
to Texas Hydrogen Energy Corporation (THEC) and Hydrogen Energy
Corporation (HEC). An action against the loan, secured by a deed
of trust on an oil and gas lease, became time barred, at the
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
latest, in October 1994. But, in 1996, the debt was acknowledged
in writing by THEC and HEC without new consideration. In 1997,
Johnson initiated foreclosure, which THEC and HEC contested in the
state declaratory judgment action, challenging the validity of the
debt.
Before the state court proceeding began, both corporations
filed for Chapter 11 bankruptcy protection, removed the case to
bankruptcy court, and challenged the debt acknowledgment as a
fraudulent transfer or invalid preference. During the course of
the bankruptcy proceeding, our court decided In Re Vineyard Bay
Development Co., Inc., 132 F.3d 269 (5th Cir. 1998), establishing,
under Texas law, the validity of the acknowledgment. Id. at 271.
The bankruptcy court held the debt was valid; the
acknowledgment was neither a fraudulent transfer nor invalid
preference; denied the declaratory judgment request; did not grant
Johnson a declaratory judgment; and made the parties responsible
for their own costs and attorney’s fees. On reconsideration, the
bankruptcy court acknowledged that Johnson could seek attorney’s
fees under the Texas statute, but denied them. In a comprehensive
and well-reasoned opinion, the district court affirmed.
For essentially the reasons stated in the district court’s
opinion, the bankruptcy court did not abuse its discretion in
denying attorney’s fees.
Johnson also contends that he should be awarded such fees
under FED. R. BANKR. P. 9011, claiming that the state action was
brought in “bad faith”. The bankruptcy court found otherwise.
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Again, for essentially the reasons stated in the district court’s
opinion, this factual finding is not clearly erroneous.
AFFIRMED
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