Summary
stating finality is given a "flexible interpretation" in bankruptcy cases
Summary of this case from In re Orion Refining Corp.Opinion
No. 92-2212.
Heard March 4, 1993.
Decided April 30, 1993.
Jose Luis Novas-Dueno, San Juan, PR, for defendants, appellants.
Jaime Sifre Rodriguez with whom Luis A. Melendez-Albizu and Sanchez-Betances Sifre, Hato Rey, PR, were on brief, for plaintiff, appellee.
Appeal from the United States Bankruptcy Court for the District of Puerto Rico.
Before TORRUELLA, SELYA and CYR, Circuit Judges.
After the chapter 11 estate of Hilda Soltero Harrington recovered judgment in an adversary proceeding against Estancias La Ponderosa Development Corporation (hereinafter "Ponderosa"), Ponderosa filed an untimely notice of appeal and a motion to permit late filing under Bankruptcy Rule 8002(c). The bankruptcy court denied Ponderosa's motion to permit late filing, and, accordingly, declined to docket Ponderosa's notice of appeal. Ponderosa moved for reconsideration, which was denied. Ponderosa then appealed the denial of its motion for reconsideration to the district court. Following a further appeal to this court to clarify the district court's jurisdiction, the district court reversed the bankruptcy court's denial of Ponderosa's motion for reconsideration of the Rule 8002(c) motion, and remanded with directions to docket Ponderosa's original notice of appeal. Appellants now appeal from the district court remand order.
Appellants are chapter 11 trustee David Manzanal and chapter 11 debtor Hilda Soltero Harrington.
An appellate order entered by a district court sitting in bankruptcy is not appealable to the court of appeals under 28 U.S.C. § 158(d) unless it is "final," i.e., unless it conclusively determines "a discrete dispute within the larger case." See In re G.S.F. Corp., 938 F.2d 1467, 1473 (1st Cir. 1991); Tringali v. Hathaway Mach. Co., 796 F.2d 553, 558 (1st Cir. 1986); In re American Colonial Broadcasting Co., 758 F.2d 794, 801 (1st Cir. 1985); see also In re Saco Local Dev. Corp., 711 F.2d 441, 445-46 (1st Cir. 1983) ("separable dispute over a creditor's claim or priority"); 9 Collier on Bankruptcy ¶ 8001.06 (15th ed. 1991). As appellants see it, the district court remand order is "final" because it directs the bankruptcy court to docket Ponderosa's initial notice of appeal despite its untimely filing, thereby resolving the one issue placed in dispute by Ponderosa's appeal from the bankruptcy court's denial of the motion for reconsideration. We disagree with appellants' analysis.
We recognize that "'finality' is [to be] given a flexible interpretation in bankruptcy," G.S.F. Corp., 938 F.2d at 1472-73, where necessary to accommodate concerns unique to the nature of bankruptcy proceedings. See In re Empresas Noroeste, Inc., 806 F.2d 315, 316-17 (1st Cir. 1986) (relaxation of "finality" doctrine appropriate in bankruptcy proceedings only on sufficient showing of "special considerations bankruptcy proceedings deserve"). Nevertheless, a district court remand order in an intermediate appeal from a judgment entered in an adversary proceedings is not final and appealable under section 158(d) of the Judicial Code, see Fed.R.Civ.P. 54(a), (b); Fed.R.Bankr.P. 7054(a), 9002, 9014, unless it resolves all procedural and substantive issues necessary to conclude the entire appeal. Were appellate review available on demand whenever a district court definitively resolved a contested legal issue, without regard to whether the entire adversary proceeding had been resolved, the "finality" rule would be eviscerated. Cf. e.g., American Colonial Broadcasting, 758 F.2d at 801 ("[a]n order which 'does not finally determine a cause of action but only decides some intervening matter pertaining to the cause, and which requires further steps to be taken in order to enable the court to adjudicate the cause on the merits,' is considered interlocutory") (quoting In re Merle's, Inc., 481 F.2d 1016 (9th Cir. 1973)).
As we acknowledged in G.S.F. Corp., one such concern is that "bankruptcy cases typically involve numerous controversies bearing only a slight relationship to each other," G.S.F. Corp., 938 F.2d at 1473 (emphasis added), and extraordinary delay could result if parties whose substantive rights had been fully litigated below were required to await resolution of the entire bankruptcy case before taking an appeal. For example, we have entertained an immediate appeal under 28 U.S.C. § 1291 to resolve a dispute over the authority and procedure for appointing a chapter 11 trustee. See In re Plaza de Diego Shopping Ctr., Inc., 911 F.2d 820, 826 (1st Cir. 1990) (noting that "[i]f an appeal were postponed until a plan of reorganization were confirmed, there would be no satisfactory way to vindicate the U.S. Trustee's right to appoint, as there is no authority to appoint a new trustee after confirmation" of a chapter 11 plan). On somewhat different grounds, we have permitted immediate appeals from district court orders lifting automatic stays. See Tringali, 796 F.2d at 557; see also G.S.F. Corp., 938 F.2d at 1473 (citing In re Chateaugay Corp., 880 F.2d 1509, 1512 (2d Cir. 1989)). But see infra note 3.
An important purpose of the Bankruptcy Reform Act of 1978 was to conform the practice and procedure in Bankruptcy Code cases as near as may be to ordinary civil actions. See, e.g., 28 U.S.C. § 158(c); Fed.R.Bankr.P. 7054(a), 8002 9002. With that aim in mind, most Federal Rules of Civil Procedure are made directly applicable in certain proceedings in bankruptcy. See, e.g., Fed.R.Bankr.P. 7001-7071 (adversary proceedings), 9014 (contested matters). The Bankruptcy Rules recognize three distinct types of proceedings within a bankruptcy case: adversary proceedings, administrative proceedings, and contested matters. Adversary proceedings are most like ordinary civil actions; contested matters are substantially similar; whereas most administrative proceedings are quite dissimilar to ordinary civil actions.
The great similarity between an adversary proceeding in bankruptcy and an ordinary civil action has particular significance in the present context. In the typical adversary proceeding, the "finality" determination closely resembles the finality determination in "an ordinary 'case' [between the parties] in a district court," In re Public Serv. Co., 898 F.2d 1, 2 (1st Cir. 1990). Just as an appeal in a civil action normally may not be taken under section 1291 until all claims of all parties to the action have been finally resolved, see Fed.R.Civ.P. 54(b), so too must some special justification be shown for departing from the finality rule relating to adversary proceedings and contested matters, see Fed.R.Bank.P. 7054(a), 9002(1) 9014. See also supra note 2.
The district court remand order contemplated no "significant further proceedings" before the bankruptcy court; that is, the bankruptcy court's role on remand — docketing the late-filed notice of appeal — fairly can be characterized as "ministerial." See In re Gould Eberhardt Gear Mach. Corp., 852 F.2d 26, 29 (1st Cir. 1988); In re Riggsby, 745 F.2d 1153, 1156 (7th Cir. 1984). Moreover, the narrow issue presented by Ponderosa's current appeal to the district court, i.e., the propriety of the bankruptcy court's denial of the Rule 8002(c) motion, has now been decided. Nevertheless, upon the docketing of Ponderosa's original notice of appeal from the judgment of the bankruptcy court, all substantive and procedural claims raised by Ponderosa in its challenge to the merits of the underlying bankruptcy court judgment will remain to be determined in the district court. Should the district court resolve the merits favorably to appellants, the present appeal from the district court remand order "may well [be] obviate[d] . . . ." Bowers v. Connecticut Nat'l Bank, 847 F.2d 1019, 1023 (2d Cir. 1988); Riggsby, 745 F.2d at 1155-56. Thus, the remand order is not final and appealable under 28 U.S.C. §§ 158(a), (d). See Fed.R.Civ.P. 54(a), (b); Fed.R.Bankr.P. 7054(a), 9001(7), 9002(1), (2), (5).
Finally, no cognizable "hardship" or special bankruptcy-related consideration is demonstrated simply by pointing to the time and expense of litigating an intermediate appeal to its conclusion in the district court. See Empresas Noroeste, 806 F.2d at 317; see also In re El San Juan Hotel, 809 F.2d 151, 154 (1st Cir. 1987) ("The burden of litigation . . . cannot alone constitute the irreparable harm necessary to warrant appellate jurisdiction over an interlocutory order."). For similar reasons, we reject Harrington's attempts to invoke the "collateral-order" doctrine, see Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), and our mandamus jurisdiction, see 28 U.S.C. § 1651, neither of which is available unless the challenged interlocutory ruling would result in "irreparable harm" incapable of vindication on appeal from a later judgment. See, e.g., Appeal of Licht Semonoff, 796 F.2d 564, 571 (1st Cir. 1986) ("collateral order" doctrine requires showing of "irreparable harm"); In re Recticel Foam Corp., 859 F.2d 1000, 1006 (1st Cir. 1988) ("irremediable harm," beyond mere burden of extended litigation, necessary for issuance of writ of mandamus).
The appeal is dismissed for lack of jurisdiction; costs to appellee.