USCA1 Opinion

                 United States Court of Appeals

                     For the First Circuit











No. 98-1265



                           JONCO, LLC,



                      Plaintiff, Appellant,



                                v.



         ALI, INC., AND PROPERTY ASSET MANAGEMENT, INC.,



                      Defendants, Appellees.







                                 

           APPEAL FROM THE UNITED STATES DISTRICT COURT



                 FOR THE DISTRICT OF RHODE ISLAND



             [Hon. Mary M. Lisi, U.S. District Judge]



                                 





                              Before



           Boudin, Lynch and Lipez, Circuit Judges. 

                                

                                





          Americo M. Scungio on brief for appellant.

          Michael P. Duffy with whom Tobias M. Lederberg and

Peabody & Arnold were on brief for appellees.











October 13, 1998







                                

  Per Curiam.  In 1994 one Brian Gillson owned a property

in Middleton, Rhode Island, subject to a bank mortgage.  At this

time, Gillson--who had earlier filed for chapter 11 bankruptcy--was

subject to a reorganization plan confirmed in 1992 by the U.S.

Bankruptcy Court for the District of Rhode Island.  The order

confirming the plan provided that failure by Gillson to make

payments pursuant to the mortgage, note, or other loan documents

would trigger the default provisions in the documents, and the bank

"retained its rights and remedies" provided in those documents. 

The bankruptcy court also explicitly retained jurisdiction over the

proceedings.

  In September 1994, ALI, Inc., acquired the bank mortgage

and, when Gillson failed to make his mortgage payments, began

proceedings to foreclose on the mortgage.  Gillson then brought an

action in Rhode Island state court seeking a delay, and in April

1995, a state court stayed the foreclosure for about a month on the

condition that Gillson execute a deed of his property in favor of

a subsidiary of ALI--the deed to be held in escrow and recorded

only if Gillson failed to sell the property by May 16, 1995.

  Gillson failed to sell the property and on May 17, 1995,

the deed for the mortgaged property in favor of ALI's subsidiary

was conveyed to the subsidiary and was recorded under Rhode Island

law.  The subsidiary now held the title to the property subject to

the original mortgage.  ALI held the mortgage, and Gillson had no

interest in the property, having transferred his interest to ALI's

subsidiary.

  Under the mortgage, ALI conducted a foreclosure sale of

the property in October 1995, and Jonco, LLC, was the highest

bidder.  Jonco paid ALI a non-refundable deposit of $100,000 and

entered into a memorandum of sale providing for closing in 30 days,

specifically, on November 9, 1995.   The memorandum provided that

time was of the essence.  Thereafter, on October 26, 1995, the

bankruptcy court entered an order converting Gillson's

reorganization proceeding to one under chapter 7.

  On November 9, 1995, the day the closing was scheduled to

take place, Jonco sought a postponement, asserting that Gillson's

chapter 7 bankruptcy had triggered the automatic stay restricting

transfer of estate property.  11 U.S.C.  362(c).  In seeking the

delay, Jonco may have been prompted by difficulties of its own in

obtaining financing, but its motive matters not.  ALI responded by

pointing out that Gillson had no interest in the property after May

1995 and therefore any automatic stay was irrelevant.

  Jonco nevertheless declined to complete the sale and

thereafter, brought suit against ALI and its subsidiary, arguing

that ALI lacked marketable title on November 9, 1995.  Jonco asked

either for a return of its deposit or for conveyance of the

property.  ALI and its subsidiary moved for summary judgment, the

magistrate judge so recommended, and in January 1996 the district

court adopted the magistrate judge's findings and recommendations

in a two-sentence order dismissing Jonco's case.

  On this appeal, Jonco's only remotely serious argument is

that ALI lacked marketable title on November 9, 1995.  Jonco says

that Gillson's transfer of his title to ALI's subsidiary in May

1995, pursuant to the state court proceeding that delayed the

foreclosure, was invalid because no one had obtained the prior

approval of the bankruptcy court, which had kept jurisdiction over

Gillson's chapter 11 reorganization.  According to Jonco, Gillson

therefore retained his interest in the property despite the

recorded deed to the ALI subsidiary, and the property therefore

became subject to the automatic stay in October 1995.

  The bankruptcy court did retain jurisdiction after the

chapter 11 reorganization plan was confirmed in 1992 in order to

implement the plan and resolve specified open issues.  But the plan

itself explicitly permitted the mortgage holder to pursue its

remedies for default if Gillson failed to make payment on the

mortgage; and nothing in the plan prevented the mortgagee from

utilizing state court proceedings, or required any further approval

by the bankruptcy court in the event of a default.

  Directly on point is In re Ernst, 45 B.R. 700 (Bankr. D.

Minn. 1985), relied upon by the magistrate judge.  There, the court

observed:

     Unless the matter at issue is within the

  exclusive jurisdiction of the Bankruptcy

  Court, the mere reservation of jurisdiction in

  the case by the Bankruptcy Court post-

  confirmation does not foreclose the right of a

  party to seek his remedy upon default under

  the plan in a state court having jurisdiction

  over the subject matter of the dispute.



Id. at 702; see also In re Timber Tracts, Inc., 70 B.R. 773, 778

(Bankr. D. Mont. 1987).  This is not a case in which the bankruptcy

court expressly sought to reserve exclusive jurisdiction over the

matter.  Compare In re 12th & N Joint Venture, 63 B.R. 36 (Bankr.

D. D.C. 1986).

  Jonco's remaining arguments are without substance. 

Neither in the district court nor in this court has it shown that

there was any material fact precluding summary judgment or that

further discovery was likely to unearth pertinent evidence.  And

while the district court was required to review the magistrate

judge's decision de novo, 28 U.S.C.  636(b)(1)(C), this did not--

contrary to Jonco's contention--compel the district court to make

separate findings of fact or issue an opinion setting forth its own

reasoning, see Elmendorf Grafica, Inc. v. D.S. America (East),

Inc., 48 F.3d 46, 49-50 (1st Cir. 1995).

  Affirmed.