James Gretter v. Gretter Autoland, Inc.
2017 U.S. App. LEXIS 13371
8th Cir.2017Background
- Debtor car dealerships (Gretter Autoland, Gretter Ford Mercury, Gretter Chevrolet) filed Chapter 11 and negotiated a going‑concern sale to Edwards Auto Plaza that included Ford and GM dealership agreements.
- Edwards paid a $75,000 deposit; its obligation to close depended on manufacturer consents to assign the dealership agreements and bankruptcy‑court approval.
- Bankruptcy court held the dealership agreements unassignable without manufacturer consent and denied the debtors’ § 365 motions to assume and assign, finding defaults (operation as a dual facility) and insufficient adequate assurance from Edwards.
- After denial, foreclosure on inventory and real property proceeded; one property owner (James) conveyed property to mortgagees; Edwards withdrew from the sale, deposit was returned, and the case converted to Chapter 7.
- James (creditor by purchased notes) moved for reconsideration, appealed denial of the § 365 motions and denial of reconsideration, and sought relief; the district court dismissed the appeal as moot, prompting this appeal.
Issues
| Issue | James's Argument | Appellees' Argument | Held |
|---|---|---|---|
| Whether the appeal is justiciable or moot | Reversal could revive assumption/assignment and related rights; seeks relief for improper denial under § 365 | Case is moot because dealership contracts have been rejected/terminated, sale abandoned, and no practical relief can be granted | Appeal is moot — no effectual relief could be granted |
| Whether speculative breach or damage claims keep controversy alive | Potential breach‑of‑contract claims (estate or third parties) preserve a live controversy | Any such claims are speculative; Chapter 7 trustee has rejected contracts and shows no intent to sue; no pending litigation that depends on appeal outcome | Speculative future claims do not save the appeal from mootness |
| Whether contract claims by third parties (Edwards, Ford, GM) save appeal | James suggests third‑party claims could preserve the dispute | Third parties have not indicated intent to pursue claims and parties abandoned sale; no surviving contract provisions analogous to enforceable covenants | Third‑party claims too speculative; do not prevent mootness |
| Whether the bankruptcy order should be vacated on dismissal | Seeks vacatur to clear the record and allow relitigation | Vacatur would be inequitable because James did not seek a stay and parties relied on the order (sales abandoned, foreclosure, conversion to Chapter 7) | Declines to vacate; appeal dismissed and no vacatur granted |
Key Cases Cited
- Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (Sup. Ct.) (a case is moot if court cannot grant effectual relief)
- In re Smith, 921 F.2d 136 (8th Cir.) (an appeal is moot when nothing of practical consequence turns on outcome)
- In re Kmart Corp., 434 F.3d 536 (7th Cir.) (ancillary damage claims can keep an appeal live when state litigation depends on bankruptcy assumption)
- Cinicola v. Scharffenberger, 248 F.3d 110 (3d Cir.) (post‑assignment enforcement of restrictive covenants can preserve a live controversy)
- In re W. Pac. Airlines, Inc., 181 F.3d 1191 (10th Cir.) (denial of vacatur where appellant failed to seek a stay and others relied on order)