This now functions how it is expected to in new versions of lxpanel with the 
same laptop and setup so the lxpanel bug is fixed in this verson of lxpanel. 
 
lxpanel:
  Installed: 0.9.3-1ubuntu1
  Candidate: 0.9.3-1ubuntu1
  Version table:
 *** 0.9.3-1ubuntu1 500
        500 http://us.archive.ubuntu.com/ubuntu zesty/universe amd64 Packages
        100 /var/lib/dpkg/status

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https://bugs.launchpad.net/bugs/1444666

Title:
  lxrandr when placing external montor above moves panel to the top
  screen

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