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Keywords

settlementjurisdictionappealmotionforeclosurebankruptcypartnershiprespondent

Related Cases

Co. v. Bonner Mall Partnership

Facts

In 1984 and 1985, Northtown Investments built the Bonner Mall in Bonner County, Idaho, with financing from a bank in that State. In 1986, respondent Bonner Mall Partnership acquired the mall, while petitioner U.S. Bancorp Mortgage Co. acquired the loan and mortgage from the Idaho bank. In 1990, Bonner defaulted on its real estate taxes and Bancorp scheduled a foreclosure sale. The day before the sale, Bonner filed a petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Idaho, which included a reorganization plan that depended on the 'new value exception' to the absolute priority rule. Bancorp moved to suspend the automatic stay of its foreclosure, arguing that Bonner's plan was unconfirmable as a matter of law due to the unavailability of the new value exception. The Bankruptcy Court granted the motion, concluding that the new value exception had not survived enactment of the Bankruptcy Code. The United States District Court for the District of Idaho reversed, and Bancorp appealed, but the Court of Appeals for the Ninth Circuit affirmed.

Issue

Whether appellate courts in the federal system should vacate civil judgments of subordinate courts in cases that are settled after an appeal is filed or certiorari sought.

The question in this case is whether appellate courts in the federal system should vacate civil judgments of subordinate courts in cases that are settled after appeal is filed or certiorari sought.

Rule

The Supreme Court or any other court of appellate jurisdiction may affirm, modify, vacate, set aside or reverse any judgment, decree, or order of a court lawfully brought before it for review, and may remand the cause and direct the entry of such appropriate judgment, decree, or order, or require such further proceedings to be had as may be just under the circumstances.

'The Supreme Court or any other court of appellate jurisdiction may affirm, modify, vacate, set aside or reverse any judgment, decree, or order of a court lawfully brought before it for review, and may remand the cause and direct the entry of such appropriate judgment, decree, or order, or require such further proceedings to be had as may be just under the circumstances.' 28 U.S.C. 2106.

Analysis

The Court analyzed the implications of vacatur in cases that become moot due to settlement. It noted that while the established practice in dealing with civil cases that become moot is to vacate the judgment, this case presented a different scenario where the mootness resulted from a voluntary settlement. The Court emphasized that the entry of a settlement was a voluntary forfeiture of the legal remedy by the ordinary process of appeal, and thus, the Court found no justification for vacatur in this instance.

Conclusion

The Court denied the motion to vacate the judgment, concluding that mootness due to settlement does not justify vacatur of a judgment under review, and dismissed the case as moot.

Who won?

Bonner Mall Partnership prevailed in the case because the Supreme Court upheld the Ninth Circuit's decision, which affirmed the applicability of the new value exception in the bankruptcy proceeding, and denied the creditor's request for vacatur.

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