Jennie Bierscheid v. Henry Hamman

Case: 18-20388 Document: 00514827982 Page: 1 Date Filed: 02/08/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 18-20388 FILED
Summary Calendar February 8, 2019
Lyle W. Cayce
Clerk
In the Matter of: HOUSTON BLUEBONNET, L.L.C.,
Debtor
JENNIE KAY LYLE BIERSCHEID, Executrix of the Estate of Kenneth R.
Lyle, Deceased; LYLE ENGINEERING COMPANY; HOUSTON
BLUEBONNET, L.L.C.; E&H, L.P.; AMERICAN UNIVERSAL
INVESTMENT COMPANY; ESTHER SUCKLE, Trustee of the Suckle 1999
Living Trust,
Appellants
v.
HENRY R. HAMMAN; THE GEORGE AND MARY JOSEPHINE HAMMAN
FOUNDATION; LAURA HAMMAN FAIN; ELIZABETH HAMMAN
OLIVER,
Appellees
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:17-CV-3422
Case: 18-20388 Document: 00514827982 Page: 2 Date Filed: 02/08/2019
No. 18-20388
Before JOLLY, COSTA, and HO, Circuit Judges.
GREGG COSTA, Circuit Judge:*
This appeal asks us to wade through the cobwebs of Texas oil and gas
history, interpreting 1913 and 1920 leases and a 1934 state supreme court
decision to determine who today owns an interest in oil proceeds. Tantalizing
as that prospect is, we must decline. The bankruptcy court only decided
liability. With more work to be done in the adversary proceeding, it has not
yet entered a final judgment. As a result, there was no basis for appealing the
liability ruling first to the district court and now to the court of appeals.
I.
Ima Hogg, the daughter of a Texas governor who became known in her
own right as the “First Lady of Texas” for philanthropic work, executed an oil
and gas lease to John Hamman (and various associated parties) in 1913. The
Hammans turned and assigned the lease to Producers Oil Company, keeping
a one-eighth interest in the net proceeds of the sale of any oil for themselves.
The Hogg lease covered over 700 acres, but subsequent assignments
subdivided it. In 1919, the 20-acre plot at issue here was assigned to Humble
Oil & Refining Company (a company co-founded by Ross Sterling, who went on
to become, like “Big Jim” Hogg, governor of Texas). The Hammans, owners of
the one-eighth interest, tussled with Humble at some point until a 1920
settlement agreement resolved their contention.
Almost a century later, the successors of the Hammans sued the
successors of Humble’s interest in state court, claiming that they are still
entitled to net proceeds from the 20 acres. One of the defendants, Houston
* 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.
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Case: 18-20388 Document: 00514827982 Page: 3 Date Filed: 02/08/2019
No. 18-20388
Bluebonnet, filed for bankruptcy and the case was removed to the bankruptcy
court. Another defendant, Kenneth Lyle, 1 moved for summary judgment and
the plaintiffs cross-moved. The bankruptcy court determined that the
Hammans continued to hold the one-eighth interest and granted partial
summary judgment in their favor. But that ruling did not award a remedy to
the Hammans or even result in a declaration of rights. Before the bankruptcy
court proceeded to those matters, Lyle appealed. The district court summarily
affirmed.
II.
There are two primary paths to appealing a bankruptcy court ruling. See
28 U.S.C. § 158(a). Appeals can be taken from “final judgments, orders, and
decrees.” 28 U.S.C. § 158(a)(1). Appeals of interlocutory orders are also
allowed “with leave of the [district] court.” See 28 U.S.C. § 158(a)(3). 2
The bankruptcy court’s grant of a partial summary judgment in favor of
the Hammans did not result in a final judgment. That is why it was “partial”;
it only answered who owned the disputed interest without deciding any
potential remedy. No final judgment was entered in the adversary proceeding.
Developments in the bankruptcy court after the filing of the appeal show that
this was no clerical error. A subsequent summary judgment motion has been
filed as there are more questions to answer before resolving the litigation. In
response to our request for supplemental briefing on the jurisdictional
question, appellants note that if we were to reverse the summary judgment
rulings and interpret the contract in favor of Lyle, then the litigation would be
at an end. But that is typically true of a decision denying a defendant’s request
for summary judgment, yet such rulings are not appealable final judgments.
1 After Lyle’s death, Jennie Bierschied, the executrix of his estate, came into the case.
2 Section 158(a)(2) permits interlocutory appeals in a situation not present here.
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The finality rule is relaxed in bankruptcy, In re ASARCO, L.L.C., 650 F.3d 593,
599–600 (5th Cir. 2011), but that relaxation does not extend to the classic
interlocutory orders appellants are asking us to review.
Appellants could have asked the district court to authorize an
interlocutory appeal, see FED. R. BANKR. P. 8004, but they did not. And the
district court’s ruling on the appeal does not count as an implicit authorization.
In re Delta Produce, L.P., 845 F.3d 609, 618 (5th Cir. 2016) (holding that the
district court must expressly exercise its discretion to allow an interlocutory
appeal). Both parties ask now for a limited remand so can they can request
the authorization from the district court. But because the district court opinion
issued without that jurisdictional prerequisite, we must vacate the decision.
See id. at 618.
Both sides bemoan the inefficiency of this result for their lawsuit. But
in the grand scheme of things, the final judgment rule promotes efficiency by
eliminating the delay caused by piecemeal appeals. Firestone Tire & Rubber
Co. v. Risjord, 449 U.S. 368, 374 (1981). Indeed, the bankruptcy court would
have likely wrapped up this adversary proceeding in the time this
unauthorized interlocutory appeal has been pending. But whatever the impact
of the final judgment rule on efficiency in a particular case, we cannot pick and
choose when to honor this fundamental principle of appellate jurisdiction.
***
We VACATE the judgment of the district court and REMAND with
instructions to dismiss the appeal. Delta Produce, 845 F.3d at 618 (citing
Smith v. Gartley, 737 F.3d 997, 1003 (5th Cir. 2013)).
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