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Shelter Products, Inc. v. 296 Southlake, Ltd.

United States District Court, E.D. Texas, Sherman Division

March 23, 2018

SHELTER PRODUCTS, INC., Appellant,
v.
296 SOUTHLAKE, LTD., Appellee.

         Bankruptcy Appeal

          ORDER

          RODNEY GILSTRAP UNITED STATES DISTRICT JUDGE

         Having referred this case to Special Master Jason Searcy (Dkt. No. 34), the Court is now presented with the Special Master's Report and Recommendation (Dkt. No. 35). The Court also considers Mr. Searcy's Motion for Attorney's Fees (Dkt. No. 36).

         I. Background

         In November 2013, Appellee 296 Southlake, Ltd. (“Southlake”) hired BBL Builders, L.P. (“BBL”) to serve as the general contractor on a construction project. (Dkt. No. 20 at 5.)

         On October 14, 2016, BBL filed for bankruptcy under Chapter 11 of Title 11 of the Bankruptcy Code. (Id.) Shortly thereafter, on November 3, 2016, Southlake filed a motion seeking relief from the automatic stay relating to $166, 289 that was being held in an escrow account. (Id. at 5.) This motion was served on counsel for Shelter Products, Inc. (“Shelter Products”) via the Bankruptcy Clerk's electronic filing system. (Dkt. No. 35 at 2.)

         There is no evidence that any party, including Shelter Products, timely objected to the motion to lift the stay. (Id.) However, on November 21, 2016, after the time for filing objections had passed, Shelter Products filed an objection to Southlake's motion to lift the stay. (Id.)

         Notwithstanding this untimely objection, the Bankruptcy Court granted Southlake relief from the automatic stay on November 22, 2016. (Id.) Shelter Products then filed a Motion for Reconsideration, urging the Bankruptcy Court to reconsider its decision granting Southlake relief from the automatic stay. (Id. at 2-3.) The Bankruptcy Court subsequently denied this motion for reconsideration. (Id. at 3.)

         On February 6, 2017, Shelter Products filed a notice of appeal. (Dkt. No. 1.) In this notice, Shelter Products indicated that it was appealing the order denying Shelter Product's motion for reconsideration. (Id. at 1.)

         On June 15, 2017, the Bankruptcy Court dismissed the underlying bankruptcy case.[1] (Id.) No. appeal from the dismissal order was filed, nor was a stay requested as to such dismissal. (Id.)

         On January 29, 2018, having provided both Parties an opportunity to be heard, this Court determined that the appointment of a Special Master, Jason R. Searcy, would serve the ends of justice and expedite resolution of this case. (Dkt. No. 34.) Accordingly, Mr. Searcy was appointed Special Master. (Id.)

         On March 6, 2018, Mr. Searcy submitted his Report and Recommendation, concluding that the order denying Shelter Product's motion for reconsideration should be affirmed. (Dkt. No. 35 at 6.) Mr. Searcy further concluded that any appeal from the underlying order granting Southlake relief from the automatic stay should be dismissed as moot. (Id.) Mr. Searcy also filed a Motion for Attorney's Fees pursuant to the Court's Order appointing him as Special Master. (Dkt. No. 36.)

         On March 15, 2018, Shelter Products filed its Objections to the Special Master's Report and Fee Request (Dkt. No. 37).

         On March 23, 2018, the Court held a hearing to provide the Parties an opportunity to be heard with respect to the ...


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