Leigh v. Vice

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
m 01-60298
_______________
FRANK M. LEIGH,
Plaintiff-Appellant,
VERSUS
THOMAS E. VICE,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Northern District of Mississippi
(1:98-CV-22S)
_________________________
February 7, 2002
Before SMITH and DEMOSS, Circuit Judges,
and LAKE,* District Judge.
PER CURIAM:**
Frank Leigh appeals the denial of his mo-
tion to enjoin enforcement of an adverse deci-
* District Judge of the Southern District of
Texas, sitting by designation.
** Pursuant to 5TH CIR. R. 47.5, the court has
determined that this opinion should not be
published and is not precedent except under the
limited circumstances set forth in 5TH CIR. R.
47.5.4.

-- 1 of 4 --

2
sion of a state court, arguing that it conflicts
with a prior ruling of the bankruptcy court in
violation of the All Writs Act, 28 U.S.C.
§ 1651, and the Anti-Injunction Act, 28
U.S.C. § 2283. Finding no error, we affirm.
I.
In 1977, Thomas Vice agreed to lease a
commercial building owned by Leigh. The
lease was for fifteen years and gave Vice the
option to renew for another fifteen years so
long as he did not default on the lease. Vice
had the right to cancel the lease on any default.
The lease required Vice to obtain Leigh’s
written consent before subleasing the property.
In 1979, Vice changed sublessees without con-
sent; Leigh did not object. In 1988, Vice again
subletted without Leigh’s consent; again,
Leigh did not object. In 1989, Leigh became
unhappy with the new sublessee and, in 1990,
notified Vice that he had breached the lease in
1988 by subletting without permission. Leigh
filed a declaratory action in Mississippi
chancery court seeking a judgment that he had
the right to cancel the lease or, alternatively,
had the right not to renew the lease. The court
ruled for Leigh.
Vice appealed, but without posting a bond
and thus without supersedeas. Accordingly,
his appeal did not suspend enforcement of the
chancery court’s judgment.1
In May 1992, while the appeal was pending
and before the lease expired, Vice filed for
chapter 11 bankruptcy. Vice (either as or
through the trustee of the bankruptcy estate)
neither assumed the lease within sixty days of
the order granting bankruptcy relief nor
requested additional time. Leigh moved for
Vice to surrender the property, arguing that
under 11 U.S.C. § 365((d)(4), Vice had
rejected the lease and surrendered it to him,
the lessor.2 Vice requested an injunction
preventing Leigh from taking possession of the
property. The bankruptcy court granted
Leigh’s motion and denied Vice’s. The
bankruptcy case was closed in 1994.
In November 1995, the Mississippi
Supreme Court reversed in part, holding that
Leigh had waived the right to object to Vice’s
new sublessee, and Vice could renew the lease.
In January 1996, Leigh filed a motion in the
bankruptcy court to determine his rights in the
wake of the Mississippi Supreme Court’s
decision. The bankruptcy court held that
because Vice had not assumed the lease within
sixty days of his bankruptcy order, he had no
claim to the property under bankruptcy law:
[Vice] did not properly pursue his
bankruptcy remedies. Because of his
chosen course of action, this is no
longer a matter that should be
adjudicated in the bankruptcy court. If
Vice is entitled to relief, he must obtain
same in state court. If the failure to post
a supersedeas bond proves fatal, this
shortcoming cannot and should not,
1 MISS. CODE. ANN § 11-51-31 (2001).
2 The section provides that
if the trustee does not assume or reject an
unexpired lease of nonresidential real prop-
erty under which the debtor is the lessee
within 60 days after the date of the order for
relief, or within such additional time as the
court, for cause, within such 60-day period,
fixes, then such lease is deemed rejected,
and the trustee shall immediately surrender
such nonresidential property to the lessor.
11 U.S.C. § 165(d)(4).

-- 2 of 4 --

3
absent the timely filing of the
appropriate § 365(d)(4) motions, be
rectified in this court.
Both parties requested the court clarify its
order. Leigh argued that because Vice had not
assumed the lease within the sixty-day
window, the lease had been terminated, and
there was nothing left to litigate and there
were no lease rights to enforce. The court
held that Vice had no lease rights under
bankruptcy law, but whether he had any lease
rights under state law was a matter for
Mississippi’s courts:
To the extent that Vice may have rights
under the lease which became available
by reason of the decision of the
Mississippi Supreme Court, then he is
left to pursue those rights in the state
court action pending in Lowndes
County Chancery Court. The Order of
this Court here is not intended to and
does not foreclose any claims which
Vice has heretofore pursued, or may
pursue in state court, but merely
precludes the assertion of those rights in
Bankruptcy Court.
Applying the state’s law as interpreted by the
Mississippi Supreme Court, the chancery court
granted Vice’s motion to renew the lease.
Leigh filed the instant action in federal
court, arguing that the chancery court’s
decision contradicts the bankruptcy court’s
ruling that Vice had given up his right to
assume the lease. Leigh moved for summary
judgment; Vice moved to dismiss the
complaint.
The court granted Vice’s motion, which it
treated as a summary judgment motion. It
found that under § 365(d)(4), “the ultimate
question of the continued validity of the lease
at issue was a matter for the state courts of
Mississippi.” Further, the court deemed
Leigh’s “invocation of the All Writs Act . . .
nothing more than an attempt to take an out-
of-time appeal of what was in essence an ad-
verse ruling of the bankruptcy court.”
II.
Leigh argues that the chancery court relit-
igated the issue already decided by the bank-
ruptcy courtSSwhether Vice had any rights
under the leaseSSin violation of the All Writs
Act3 and the Anti-Injunction Act.4 A federal
court may enjoin state court proceedings
“when necessary to protect or effectuate a fed-
eral court judgment.” J.R. Clearwater, Inc. v.
Ashland Chem. Co., 93 F.3d 176, 178 (5th
Cir. 1996); accord 28 U.S.C. § 2283. This
“‘relitigation exception . . . . is founded in the
well-recognized concepts of res judicata and
collateral estoppel.’” J.R. Clearwater, 93 F.3d
at 179 (quoting Chick Kam Choo v. Exxon
Corp., 486 U.S. 140, 147 (1988)).
Nothing in the bankruptcy court’s decision
precluded further state court litigation. To the
contrary, the bankruptcy court explicitly di-
rected Leigh and Vice to state court to resolve
the rest of their lease claims. It extinguished
Vice’s rights only under bankruptcy law, not
3 “[F]ederal courts may issue all writs necessary
or appropriate in aid of their respective jur-
isdictions and agreeable to the usages and
principles of law.” 28 U.S.C. § 1651.
4 “A court of the United States may not grant an
injunction to stay proceedings in a State court
except as expressly authorized by Act of Congress,
or where necessary in aid of its jurisdiction, or to
protect or effectuate its judgments.” 28 U.S.C.
§ 2283.

-- 3 of 4 --

4
state law. Because nothing in the chancery
court’s order contradicts the bankruptcy order,
no relief is available under the All Writs Act
or the Anti-Injunction Act.5
AFFIRMED.
5 We need not decide whether the bankruptcy
and district courts correctly interpreted 11 U.S.C.
§ 365(d)(4), and we intimate no view on the merits
of their holdings.

-- 4 of 4 --