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In re Rain Tree Healthcare of Winston Salem, LLC

United States District Court, M.D. North Carolina

March 22, 2018

In re RAIN TREE HEALTHCARE OF WINSTON-SALEM, LLC, Debtor,
v.
J & F PARTNERS, LLC, and WILLIAM P. MILLER, Appellees. RAIN TREE HEALTHCARE OF WINSTON-SALEM, LLC, Appellant,

          MEMORANDUM OPINION AND ORDER

          OSTEEN, JR., District Judge

         Appellant Rain Tree Healthcare of Winston-Salem, LLC (“Rain Tree”) filed a voluntary petition for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the Middle District of North Carolina. (Doc. 5-10.) The bankruptcy court granted a motion to dismiss this bankruptcy case. (Doc. 5-4.) Rain Tree then appealed to this court. (Doc. 1.)

         This matter comes before the court on Appellee J & F Partners, LLC's (“J & F's”) Amended Motion to Dismiss Appeal, (Doc. 17), on the grounds that Rain Tree's appeal is equitably moot. Appellee has filed a brief in support of this motion, (Doc. 18), to which Appellant has responded, (Doc. 24), and Appellee William P. Miller, Bankruptcy Administrator has replied, joining in Appellee J & F's Amended Motion to Dismiss Appeal. (Doc. 25.) This matter is ripe for adjudication and, for the reasons stated below, this court will deny J & F's Amended Motion to Dismiss Appeal.

         I. FACTUAL BACKGROUND

         The relevant procedural history of this case goes back to December 2016, and is outlined below.

         A. Western District Bankruptcy Petition

         Rain Tree first filed a voluntary petition for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the Western District of North Carolina on December 30, 2016. (Bankruptcy R. on Appeal pt. 2, Attach. 1, Amendment to Voluntary Pet. (Doc. 7-1) at 1.) This case was dismissed on March 31, 2017, for two reasons: (1) the debtor's (Rain Tree's) violations of the Chapter 11 Operating Order of the court and (2) “substantial continuing loss to the estate and the absence of a reasonable likelihood of reorganization.” (Bankruptcy R. on Appeal pt. 1, Attach. 5, Order (Doc. 5-5) at 5-6.) J & F then filed a Motion for Relief from the Automatic Stay, (Bankruptcy R. on Appeal pt. 1, Attach. 22, Mot. for Relief from Stay (Doc. 5-22)), which the bankruptcy court granted. (Bankruptcy R. on Appeal pt. 1, Attach. 7, Order Granting Relief (Doc. 5-7).) Rain Tree then filed an Emergency Motion Requesting Reconsideration of Order Lifting the Automatic Stay, (Bankruptcy R. on Appeal pt. 2, Attach. 9, First Mot. to Reconsider (Doc. 7-9)), which was denied by the bankruptcy court. (Bankruptcy R. on Appeal pt. 1, Attach. 8, Order on Emergency Mot. (Doc. 5-8).)

         B. Middle District Bankruptcy Petition

         Rain Tree filed a second voluntary petition for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the Middle District of North Carolina on April 1, 2017. (Bankruptcy R. on Appeal pt. 1, Attach. 10, Voluntary Pet. (Doc. 5-10).) This case was dismissed on June 16, 2017, on res judicata grounds in addition to the reasons articulated by the Western District bankruptcy court. (Bankruptcy R. on Appeal pt. 1, Attach. 4, Order (Doc. 5-4) at 1; Tr. of Hearing held on June 1, 2017, before Judge Benjamin A. Kahn (Doc. 9) at 13-14.) The order dismissing this case included a finding “that bad faith existed on the part of the Debtor and the Debtor shall be banned from refiling bankruptcy for 180 days.” (Bankruptcy R. on Appeal pt. 1, Attach. 4, Order (Doc. 5-4) at 1.)

         After filing the instant appeal to this court, Rain Tree filed an Emergency Motion for Stay Pending Appeal with the bankruptcy court. (Bankruptcy R. on Appeal pt. 1, Attach. 26, Mot. to Stay Pending Appeal (Doc. 5-26).) The bankruptcy court conducted a hearing and denied the motion, finding that Rain Tree did not establish that it was likely to succeed on the merits of an appeal. (Opp'n Br. of Appellee J & F Partners, LLC (“Appellee's Opp'n Br.”), Ex. 19, Mem. Order Denying Mot. for Stay Pending Appeal (Doc. 28-33) at 7, 29.)

         C. State Court Proceedings

         On January 31, 2016, J & F filed a Complaint in Summary Ejectment in the Forsyth County, North Carolina General Court of Justice. (Br. in Supp. of Mot. to Dismiss Appeal (“Appellee's Br.”), Ex. A, Ejectment Complaint (Doc. 18-1).) This Complaint asserted that Rain Tree failed to pay rent, was holding over, and demanded, among other things, to be put into possession of the premises. (Id.) On September 18, 2017, J & F filed a Motion for Summary Judgment in this action. (Appellee's Br., Ex. B, Motion for Summary Judgment (Doc. 18-2).) On October 4, 2017, the Honorable Denise S. Hartsfield, North Carolina District Court Judge, granted the Motion for Summary Judgment. (Appellee's Br., Ex. C, Ejection Order (Doc. 18-4).) On October 16, 2017, a Writ of Possession was entered directing the Forsyth County Sheriff's Office to remove Rain Tree from the 5100 Lansing Drive, Winston Salem, North Carolina premises. (Appellee's Br., Ex. D, Writ of Possession (Doc. 18-5).)

         II. ANALYSIS

         When an Article III court no longer has a case or controversy before it, it is without jurisdiction to adjudicate. See, e.g., Porter v. Clarke, 852 F.3d 358, 363 (4th Cir. 2017). “Short of that, a case may become moot under ‘a melange of doctrines relating to the court's discretion in matters of remedy and judicial administration.'” Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 841 F.2d 92, 95 (4th Cir. 1988) (quoting Chamber of Commerce v. United States Dep't of Energy,627 F.2d 289, ...


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