In Re Lumbermans Mortgage Company, Debtor. Lumbermans Acceptance Company, Debtor in Possession-Appellant v. Secured Investment of Marysville, Ltd.

This case arises from the filing of two California partial summary judgments as claims in bankruptcy court. The bankruptcy court allowed the claims and the district court dismissed the appeal. We affirm.

Secured Investments sued Lumbermans Mortgage Company, Lumbermans Acceptance Company, and certain other defendants in California Superior Court. On its principal claims for breach of contract, Secured Investments won partial summary judgment against Lumbermans Mortgage Company and against the parent corporation, Lumbermans Acceptance Company. Before completion of the state proceedings, the Lumbermans defendants filed for reorganization in federal bankruptcy court. Secured Investments dismissed its other state claims so that nothing remained to be decided in state court, but the automatic stay of bankruptcy prevented the entry of any final judgment. 11 U.S.C. § 362 (1979).

Secured Investments filed claims in bankruptcy court of $368,530.42 against Lumber-mans Mortgage Company and $292,370.28 against Lumbermans Acceptance Company. Both claims were based on the partial summary judgment entered in state court. The Lumbermans companies objected. After hearing arguments on the merits…