In Re: Herbert Locki

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
11-5-2008
In Re: Herbert Locki
Precedential or Non-Precedential: Non-Precedential
Docket No. 08-2072
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Recommended Citation
"In Re: Herbert Locki " (2008). 2008 Decisions. Paper 258.
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CLD-5
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 08-2072
___________
IN RE: HERBERT LOCKINGS,
Appellant
__________________________
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 06-cv-04837)
District Judge: Honorable Thomas M. Golden
__________________________
Submitted for Possible Summary Action Pursuant to
Third Circuit LAR 27.4 and I.O.P. 10.6
October 9, 2008
Before: RENDELL, HARDIMAN and COWEN, Circuit Judges
(Filed: November 5, 2008)
_________
OPINION OF THE COURT
_________
PER CURIAM
This is an appeal from the District Court’s order affirming the Bankruptcy Court’s
order that denied Appellant’s motion to reopen his Chapter 13 bankruptcy case. For the
reasons that follow, we will affirm.
I.
Appellant, Herbert Lockings, was the sole shareholder of H. Lockings Corporation
(the “Corporation”). On October 4, 2004, the Corporation filed a Chapter 11 bankruptcy
petition in an effort to stave off the sheriff’s sale of its primary asset, real property located
at 4942-44-46 Parkside Avenue in Philadelphia (the “Property”). The Property had been
listed for sheriff’s sale in a foreclosure action brought by Fundex Capital Corporation
(“Fundex Capital”), which held a $400,000 mortgage on the Property. As a result of the
bankruptcy petition, an automatic stay was entered precluding Fundex Capital from
proceeding with the sale.
On October 22, 2004, Fundex Capital filed a motion for relief from the automatic
stay, seeking permission to resume its foreclosure and re-list the Property for sheriff’s
sale. The Bankruptcy Court granted Fundex Capital’s motion, and, on April 8, 2005,
Fundex Capital filed a writ of execution against the Corporation and John Lockings, a
relative who apparently owned an interest in the Property.1 Fundex Capital did not name
Lockings in the writ of execution because he had no interest in the Property. In June
2005, Fundex Capital acquired the Property at the sheriff’s sale and conveyed it to one of
its affiliates, Bridge Funding Properties. The Property was later resold to Parkside
Partners, L.P. (“Parkside”).
Meanwhile, in April 2005, Lockings had filed a personal Chapter 13 bankruptcy
1The Writ of Execution also named the United States because federal tax liens had
been filed against the Property. See 28 U.S.C. § 2410.
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petition. On December 8, 2005, the bankruptcy case was dismissed on the unopposed
motion of the Chapter 13 Trustee, and, by order entered February 28, 2006, the case was
closed. Approximately six months later, however, Lockings filed a motion to reopen the
Chapter 13 case in order to set aside the sale of the Property. In his pro se motion,
Lockings argued that the sale violated the automatic stay that had been in place in his
personal Chapter 13 case.
On October 4, 2006, following a hearing, the Bankruptcy Court summarily denied
Lockings’s motion to reopen, explaining that because Lockings did not hold any legal
interest in the Property, the stay in place in his Chapter 13 case did not preclude Fundex
Capital from completing its foreclosure action against the Corporation. Upon review, the
District Court affirmed the Bankruptcy Court’s order. The present appeal followed.
After the appeal was docketed in this Court, Appellant filed a motion to “strike”
Parkside from the appeal, arguing that it is not a proper party to this appeal. Appellant
then moved for summary reversal of the District Court’s order affirming the Bankruptcy
Court’s decision.
II.
We have jurisdiction over this appeal pursuant to 28 U.S.C. §§ 158(d) and 1291.
The District court had appellate jurisdiction to review the Bankruptcy Court’s order under
28 U.S.C. § 158(a). In reviewing a determination of the Bankruptcy Court, we exercise
the same standard of review as the District Court, subjecting the Bankruptcy Court’s legal
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determinations to plenary review, reviewing its factual findings for clear error, and
considering its exercise of discretion for abuse thereof. In re United Healthcare Sys., Inc.,
396 F.3d 247, 249 (3d Cir. 2005). Pursuant to the Bankruptcy Code, “[a] case may be
reopened in the court in which such case was closed to administer assets, to accord relief
to the debtor, or for other cause.” 11 U.S.C. § 350(b). We review a bankruptcy court’s
decision denying a motion to reopen for abuse of discretion. Donaldson v. Bernstein, 104
F.3d 547, 551 (3d Cir. 1997).
Upon review, we agree with the District Court’s determination that the Bankruptcy
Court acted within its discretion in summarily denying Lockings’s motion to reopen.
As the District Court explained, the record reflects that Lockings did not possess a legal
or equitable interest in the Property. Therefore, Fundex Capital did not violate the
automatic stay in Lockings’s Chapter 13 case when it sold the Property. See 11 U.S.C. §
362(a). The fact that Lockings was the sole shareholder in the Corporation does not
render the Corporation’s property part of his estate. See Official Committee of
Unsecured Creditors v. R.F. Lafferty & Co., Inc., 267 F.3d 340, 348 (3d Cir. 2001) (“In
Pennsylvania, as in almost every other state, “a corporation is a distinct and separate
entity, irrespective of the persons who own all its stock.”) (internal quotations omitted).
Furthermore, Lockings’s obligation to Fundex Capital under the mortgage agreement
does not somehow bring the Property—in which he owns no interest—within the
protection of the stay. Therefore, we agree with the District Court and the Bankruptcy
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Court that the stay in Lockings’s personal bankruptcy case was not violated by Fundex
Capital’s sale of the Property in the Corporation’s bankruptcy proceedings. Accordingly,
because no substantial question is presented by this appeal, we will summarily affirm the
District Court’s order. See 3d Cir. L.A.R. 27.4 and I.O.P. 10.6. Lockings’s motion for
summary reversal will be denied.2
Lockings has also asked this Court to enter an order dismissing Parkside, the
current owners of the Property, from the appeal. According to Lockings, Parkside should
not be recognized as an appellee because the company failed to formally intervene in
either the bankruptcy proceedings or the District Court action.
Parkside became involved in the District Court action in December 2007, when the
company first learned of Lockings’s motion to reopen. At that time, the District Court
granted Parkside additional time to respond to the motion to reopen, and they
subsequently submitted an opposing brief. It appears that Lockings’s attorney consented
to the extension, and that Lockings did not raise any other objections to Parkside’s
involvement in the case. Under these circumstances, we see no reason why Parkside
should be dismissed from this appeal.
2To the extent that Lockings attempts to challenge the value at which the Property
was assessed in connection with the writ of execution, he must bring such a challenge in
the Corporate bankruptcy case.
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