In the Matter of Holiday Mobile Home Resorts, Debtor. Holiday Mobile Home Resorts v. R. Dixon Wood and Don W. Heiple

I

Debtor-Appellee Holiday Mobile Home Resorts, Inc. (“Holiday Mobile”) filed an application in the bankruptcy court to reopen its bankruptcy proceeding. The bankruptcy court denied the motion and the district court affirmed. Appellants R. Dixon Wood and Don W. Heiple brought this action in the bankruptcy court to recover attorneys fees under an Arizona statute providing for fees to the prevailing party in a contract action. See Ariz.Rev.Stat. § 12-341.01. Although the bankruptcy court denied Holiday Mobile’s motion to reopen on the grounds that the action was precluded by the doctrine of res judicata, the appellants contend that the judgment was essentially one based upon the underlying promissory note and mortgage and that the bankruptcy court could not have decided the case on res judicata grounds without concluding that Holiday Mobile’s motion to reopen was based upon the note and mortgage. The bankruptcy court and the district court denied the motion for fees stating that no bankruptcy provision existed that would make the Arizona statute applicable. Appeal was timely, 28 U.S.C. § 158 (d). We reverse.

II

The bankruptcy court determined that Holiday Mobile’s motion to reopen…