The opinion of the court was delivered by: SYLVIA RAMBO, Senior District Judge
Before the court is an appeal from an order of the Bankruptcy
Court for the Middle District of Pennsylvania. The parties have
briefed the issue and the matter is ripe for disposition. For the
reasons that follow, the court will affirm the order of the
The facts are well known to the parties, thus the court will
dispense with their recitation in brief. In or about June 1993,
First Union Bank, formerly CoreStates, N.A. (hereinafter "First
Union") loaned the sum of $100,000.00 to Adams County Asphalt
Company (hereinafter "ACA"). ACA is a wholly owned subsidiary of
Appellant, Gemini Equipment Business Trust (hereinafter
"Gemini"). Also in June 1993, First Union increased ACA's
existing line of credit to $3,000,000.00. Both Gemini and Robert
Mumma, the principal of Gemini and ACA, guaranteed the loans for ACA. First Union contends that ACA
defaulted on the terms of the loans, and on June 8, 1998, First
Union initiated proceedings against the guarantors of ACA's
loans, Gemini and Robert Mumma, in the Court of Common Pleas for
Dauphin County, Pennsylvania (hereinafter "the June 8, 1998 State
In February 2003, ACA filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code. The case
is pending under bankruptcy case number 03-00722 in front of
Chief Judge Thomas.*fn1 To date, ACA has not filed a plan of
reorganization. Gemini asserts that ACA has "essentially been a
dormant entity since filing of its Chapter 11 petition."
(Appellant's Principal Brief at 7.) According to Gemini, "the
dormant nature of ACA has been a planned event designed to
minimize expenses until ACA could exercise its rights to operate
a quarry," which Gemini contends contains valuable assets.
On May 25, 2005, Gemini filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code. On or
about June 10, 2005, First Union Bank filed its motion for relief
from the automatic stay pursuant to 11 U.S.C. § 362(d)
(hereinafter the "Lift Stay Motion"). Specifically, First Union
sought an allowance to continue litigation in the June 8, 1998
State Court Proceeding.
On July 5, 2005, one day prior to the scheduled hearing on the
Lift Stay Motion, Gemini filed a motion for a change of venue
("hereinafter "the Change Venue Motion"). No hearing has been set
or held, and no response date has been set by the bankruptcy
court with respect to the Change Venue Motion. On July 6, 2005, the bankruptcy court held a hearing on the Lift Stay Motion and,
on July 7, 2005, entered an order granting the Lift Stay Motion.
Specifically, the bankruptcy court provided that First Union
could go forward with the June 8, 1998 State Court Proceeding so
that the claims of First Union could be liquidated; however, the
bankruptcy court provided that First Union could only execute
judgment against non-debtor third parties, specifically, Mr.
Mumma. The bankruptcy court provided that First Union could not
execute any judgment against Gemini. The court notes the ACA is
not a party to the June 8, 1998 State Court Proceeding. According
to First Union, once its claims have been liquidated, the claims
against Gemini "will be dealt with in a plan or otherwise as will
all other liquidated claims of the estate." (Appellee's Brief at
2.) Gemini timely filed this appeal on August 16, 2005.
District courts have appellate jurisdiction over final
judgments, orders, and decrees of the bankruptcy court.
28 U.S.C. § 158(a)(1). When reviewing the bankruptcy court's factual
determinations, the district court will not disturb such findings
unless it finds that the bankruptcy court committed clear error.
In re Fegley, 118 F.3d 979, 982 (3d Cir. 1997); Universal
Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 98, 102 (3d Cir.
1981). The district court, however, reviews legal decisions de
novo. Id.; In re Siciliano, 13 F.3d 748, 750 (3d Cir. 1994).
Gemini asserts three arguments in support of its appeal from
the order of the bankruptcy court. First, Gemini alleges that the
presiding bankruptcy judge's failure to recuse herself constituted an error of law and/or was
in violation of judicial rules concerning recusal. Second, Gemini
asserts that the bankruptcy court should have enjoined
proceedings against third-party, non-defendants. Finally, Gemini
argues that the bankruptcy court's granting of the Lift Stay
Motion constituted an error of law and/or and abuse of
discretion. The court will examine each of Gemini's arguments and
First Union's corresponding arguments below.
Gemini argues that presiding Bankruptcy Judge France should
have recused herself from the instant case, and that her failure
to do so constitutes an error of law and is in violation of the
judicial rules concerning recusal. In response, First Union
asserts that there has been no motion for recusal; thus,
according to First Union, there has been no appealable decision.
First Union also purports that there are not sufficient facts in
the record to support the recusal of Judge France.
With respect to First Union's argument that there is no
appealable decision from the bankruptcy court, the court notes
that there has been no motion for recusal at any point during the
proceedings before Judge France. Gemini does not dispute this;
rather, Gemini alleges that Judge France should have recused
herself sua sponte. According to Gemini, the issue of recusal
was raised by counsel during the July 5, 2005 Lift Stay Hearing.
Gemini also contends that it filed the July 4, 2005 Change Venue
Motion because of the perceived impartiality of Judge France. The
court notes that the Change Venue Motion was filed one day before
the hearing on the Lift Stay Motion; the bankruptcy court has not
ruled on the Change Venue Motion, and there is no pending motion
for recusal before the bankruptcy court. Thus, there has been no
final order and the district court cannot hear the ...