Transamerican Nat v. U S Customs Service

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
______________
No. 95-20935
Summary Calendar
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In the Matter of: TRANSAMERICAN NATURAL GAS CORPORATION,
Debtor.
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TRANSAMERICAN NATURAL GAS CORPORATION
formerly known as GHR Energy Corporation,
Appellant,
versus
U.S. CUSTOMS SERVICE,
Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
(CA-H-92-2509)
_________________________________________________________________
April 18, 1996
Before SMITH, BENAVIDES and DENNIS, Circuit Judges.
BENAVIDES, Circuit Judge*:
Appellant TransAmerican Natural Gas Corporation
("TransAmerican") appeals the district court's affirmance of the
bankruptcy court's final order granting Appellee U.S. Customs
Service's ("Customs") motion for reconsideration and second motion
and request for payment of reliquidated claims for duties arising
from TransAmerican's importation of four shipments of atmospheric
*
Pursuant to Local Rule 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that this opinion should not be published and is not precedent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 Local Rule
47.5.4.
residual fuel oil prior to filing for Chapter 11 bankruptcy in
1983. Finding that the reliquidated claims arose post-petition and
therefore qualify as administrative expenses, we affirm.
BACKGROUND
TransAmerican1 filed a voluntary Chapter 11 petition on
January 26, 1983. Prior to that date, TransAmerican imported four
shipments of atmospheric residual fuel oil and paid duties assessed
by Customs for the fuel. After discovering Customs had been
overpaid, however, TransAmerican filed four drawback applications
between November 25, 1985 and January 6, 1986 requesting refunds
totaling $270,980.00.2 On September 26, 1986, Customs granted or
"liquidated" the four drawback applications and refunded
TransAmerican $270,993.11 on December 12, 1986.
However, on December 23, 1986, Customs' district director in
New Orleans reversed the original decision and "reliquidated" the
original payment on the drawback applications under 19 C.F.R. §
173.3(a). The reversal and reliquidation was based on Customs'
determination that TransAmerican had not maintained records
adequate to justify the drawbacks. See 19 C.F.R. § 199.22.
TransAmerican was notified of the reliquidation on January 30,
1987.
Meanwhile in TransAmerican's bankruptcy proceedings, notice of
1
TransAmerican was formerly known as GHR Energy
Corporation.
2
The drawback applications were filed pursuant to 19
U.S.C. § 1313(b) and 19 C.F.R. § 191, which authorizes Customs to
refund duties paid on goods used in the manufacture of articles
that are later exported.
2
the February 29, 1984 bar date for filing s against TransAmerican's
bankruptcy estate was published. On February 22, 1984, Customs
filed an unrelated proof of claim seeking payment for $26,458.95 in
duties on importation of fuel oil from Spain, which the bankruptcy
court allowed.
On September 4, 1987, the bankruptcy court entered an order
confirming TransAmerican's Amended Restated Negotiated Chapter 11
Plan ("confirmation order"). The confirmation order provided for
consummation of the plan on October 19, 1987. Neither the plan nor
the confirmation order made provision for Customs' reliquidated
claims against TransAmerican.
On August 5, 1991, Customs filed a motion and request for
payment of the reliquidated claims total plus interest, which the
bankruptcy court dismissed based on a procedural defect. Customs
subsequently filed a second motion and request for payment on
August 20, 1991. The second motion was denied by the bankruptcy
court on November 22, 1991 on the equitable grounds of the doctrine
of laches because Customs inexplicably waited until August 1991 to
request payment even though it was aware that TransAmerican had
proposed and approved a plan of reorganization.
In response to the bankruptcy court's denial of the second
motion, Customs filed a motion to reconsider, arguing that laches
does not apply to the United States. The bankruptcy court granted
the motion to reconsider, vacated its November 22, 1991 order
denying Customs' second motion and request for payment, and granted
the motion and request for payment.
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TransAmerican appealed to the district court. In a memorandum
opinion entered August 30, 1995, the district court affirmed the
bankruptcy court's final order granting Customs' second motion and
request for payment. The district court found that Customs'
reliquidated claims, arising post-petition, constituted an
administrative expense as defined by 11 U.S.C. § 503 that was
disputed because it had not been allowed or disallowed by the
confirmation date. The court further found that because a bar date
for filing an administrative expense claim is not provided in the
Bankruptcy Code, nor was one provided in TransAmerican's confirmed
plan of reorganization, the doctrine of laches could not be applied
to Customs as a matter of law.
ANALYSIS
TransAmerican contends that Customs' reliquidated claims are
not administrative expenses because they are based upon pre-
petition events that triggered the duty tax liability. See Matter
of Midland Industrial Service Corp., 35 F.3d 164, 166 (5th Cir.
1994), cert. denied, ___U.S.___, 115 S. Ct. 1359, 131 L. Ed. 2d 216
(1995). TransAmerican argues that Customs' claims arise from the
four pre-petition shipments of fuel oil combined with Customs' pre-
confirmation decision to reliquidate, not from the administration
of the estate. Therefore, because only those expenses of the
debtor's estate that arise post-petition are entitled to treatment
as administrative expenses, Customs' reliquidated claims must be
disallowed.
TransAmerican next contends that payment of Customs'
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reliquidated claims do not benefit either the estate or the
creditors. TransAmerican argues that because its only benefit
flowed from the receipt of fuel oil, which occurred pre-petition,
no benefit was conferred on its estate in bankruptcy.
TransAmerican also argues that paying these claims will make
successful implementation of the reorganization plan more
difficult.
TransAmerican's final contention is that even if Customs'
reliquidated claims can be treated as administrative expenses, they
are barred because Customs acted on it too late. TransAmerican
argues that the plan confirmation date was the deadline for Customs
to file, and because Customs failed to act until four years later,
the claims are now barred. See NL Industries, Inc. v. GHR Energy
Corp., 940 F.2d 957, 966 (5th Cir. 1991), cert. denied, 502 U.S.
1032, 112 S. Ct. 873, 116 L. Ed. 2d 778 (1992).
Like the district court, we review the bankruptcy court's
findings of fact under the clearly erroneous standard, while
conclusions of law are subject to de novo review. See Matter of
Midland, 35 F.3d at 165 (citing Matter of Consolidated Bancshares,
Inc., 785 F.2d 1249, 1252 (5th Cir. 1986)).
Administrative expenses include only those expenses, rendered
post-petition, that are "actual" and "necessary" to the
preservation of the estate. See 11 U.S.C. § 503(b)(1)(A). The
words "actual" and "necessary" have been narrowly defined to
require that the debt benefit the estate and its creditors. NL
Industries, Inc., 940 F.2d at 966 (internal citations omitted).
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Thus, in order for an expense to qualify as an administrative
expense, it must 1) occur post-petition and 2) benefit the estate
and its creditors.
We agree with the district court's finding that Customs'
reliquidated claims occurred post-petition. The reliquidated
claims, although related to the original duty tax imposed when the
fuel oil was imported pre-petition, actually arose when
TransAmerican filed its drawback applications in 1985 and Customs
erroneously refunded TransAmerican in 1986. Thus, this case is
distinguishable from the facts in Matter of Midland. In that case,
the tax, which was incurred pre-petition, was not paid pre-
petition. See Matter of Midland, 35 F.3d at 165. On the other
hand, Customs' original duty tax was satisfied by TransAmerican's
pre-petition payment. A new liability arose when TransAmerican
received the drawbacks from Customs in 1986. Once Customs'
reversed its decision to refund TransAmerican, the reliquidated
claims were rendered. We fail to see how a claim could possibly be
pre-petition when prior to the bankruptcy petition filing no claim
could have been made. Indeed, here the reliquidated claims could
not have been made prior to the claim bar date, February 29, 1984.
In addition, Transamerican's contention that Customs' claims
do not benefit its estate or its creditors is raised for the first
time in this appeal. Our review of the record from the district
court reveals that Transamerican's brief on appeal to the district
court did not challenge the bankruptcy court's finding that the
refunds constituted a necessary cost or expense of preserving the
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estate. In fact, Customs' brief quotes the bankruptcy court as
stating that there was no dispute between the parties regarding
this issue. In any event, the record before us is devoid of any
contention by Transamerican that the reliquidated claims were not
actual or necessary. Therefore, we find that Transamerican may not
now raise this new argument before this Court. See Boddie v. City
of Columbus, 989 F.2d 745, 751 (5th Cir. 1993); Capps v. Humble Oil
& Refining Co., 536 F.2d 80, 81 (5th Cir. 1976) ("A party cannot
raise a new theory on appeal that was not presented to the court
below."). Consequently, we decline to address this new theory in
this appeal.
CONCLUSION
For the reasons articulated above, we AFFIRM the judgment of
the district court affirming the bankruptcy court's final order.
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