Timco, LLC v. T and M Sales Agency, Inc. (In re Timco, LLC)

Appeal of bankruptcy court's decision remanding case removed state court action to confirm arbitration award which was affirmed by district court was unreviewable by the court of appeals under 28 U.S.C. § 1334(d). Appeal of order granting relief from automatic stay to allow state court action to proceed was moot where debtor failed to obtain stay pending appeal and state court had entered valid order confirming arbitration award.
Procedural context:
Timco, LLC and T&M Sales Agency, Inc. were parties to a prepetition arbitration action resulting in a $930,000 arbitration award against Timco. T&M filed a state court action to confirm the arbitration award but Timco filed a voluntary chapter 7 petition prior to the state court confirming the award. T&M filed a motion for relief from the automatic stay to allow the state court to enter a judgment confirming the arbitration award. Timco objected and removed the state court action to the bankruptcy court and T&M filed a motion to remand. The bankruptcy court granted T&M’s motion for relief from the automatic stay and the motion to remand. Timco appealed both aspects of the bankruptcy court’s decision to the district court but did not seek a stay pending appeal to the district court. While the appeal to the district court was pending, the state court confirmed the arbitration award and T&M sought dismissal of the appeals asserting that both were moot. The district court agreed and dismissed the appeals.
The Court of Appeals held that it lacked authority to review the district court's remand decision because it found that the bankruptcy court had abstained under 28 U.S.C. § 1334(c)(2) in favor of allowing the state court to hear the matter and such a decision “is not reviewable … by the court of appeals” in accordance with 28 U.S.C. § 1334(d). The Court of Appeals held, with respect to the automatic stay issue, that, while it had jurisdiction to review the district court’s decision, the issue was moot because it the state court order confirming the award was unstayed and was a valid order.
Guy, Sutton and Cook

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