IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
HERBERT L. HOLM, No. 1-87-00559
HERBERT L. HOLM,
v. A.P. No. 94-1197
Memorandum of Decision
Lynn Alto was the co-owner of an apartment building with Chapter 11 debtor in possession
Herbert Holm. In May of 1994, Holm commenced an adversary proceeding pursuant to section
363(h) of the Bankruptcy Code seeking to sell Alto's interest along with that of the estate. On
July 22, 1994, the parties entered into a stipulated judgment which provided that the property
may be sold subject to the provisions of section 363(h).
On April 24, 1995, Holm filed a "motion for clarification." In it, he seeks to compel Alto
to pay her share of the real estate commission due on the sale, which has been consummated.
Alto takes the position that she had a right to approve the sale price and did not, or did so only
net of a commission, so that she is not liable for a commission.
Alto's position has little merit. A judgment, even if entered by stipulation, resolves all issues
which were raised, or could have been raised, between the parties. 21 Fed.Proc.L.Ed.,
Judgments and Orders, section 51:199. Because the judgment did not reserve to Alto the right
to approve the sale price, she had no such right. She did have a right of first refusal, pursuant
to section 363(i), which she apparently did not exercise. The judgment is silent as to the
commission. However, section 363(j) of the Bankruptcy Code specifically provides that after
a sale pursuant to section 363(h), the trustee shall distribute the proceeds, less costs and
expenses of the sale
, according to the interest of the co-owner. A real estate commission is a
cost of sale. In re Marino
, 794 F.2d 1367 (9th Cir.1986). Thus, by operation of statute Alto
must bear half of the commission.
In opposing this motion, Alto has also attacked the propriety of the order allowing the
employment of the broker. She has never noticed a hearing on this, and has so mixed up the
issues and garbled the captions that several papers relating to this adversary proceeding were
misfiled in the base case and papers relating to the employment order were misfiled in this
adversary proceeding. The order allowing the employment of the broker was a base case
matter, and must be raised by a base case motion and a hearing.
However, it does appear that the order authorizing the employment may have been
improvidently entered. While Holm and the broker disclosed that Holm's son was employed
by the broker, they failed to disclose that the son was the listing agent and was to receive a
portion of the commission.
For the foregoing reasons, counsel for Holm shall submit a form of amended judgment in
this adversary proceeding providing that the proceeds of sale shall be distributed in accordance
with section 363(j) of the Bankruptcy Code. Counsel for Alto shall submit an order in the base
and having only a base case caption
providing that the commission shall continue to be
held in trust until the court has ruled on the motion the court assumes Alto will file in the base
and set for hearing seeking to vacate the order employing the broker. Both sides shall
serve the U.S. Trustee with all papers relating to this issue.
Dated: September 15, 1995 _______________________