Dean v. Lane (In re Lane)
Dean v. Lane (In re Lane)
Opinion of the Court
The appellants in this case, Sarah and Kevin Dean (the "Deans" or the "Appellants"), objected to the Application for Allowance of Interim Compensation and Reimbursement of Expenses ("Interim Fee Application") filed by Neil C. Bordy, on behalf of Seiller Waterman LLC, for its representation of Linda Lane ("Ms. Lane" or the "Debtor") in her chapter 13 bankruptcy case. The U.S. Bankruptcy Court for the Western District of Kentucky (the "Bankruptcy Court") overruled their objections and entered interim orders allowing fees. The Deans now appeal.
In response, the Debtor argues that this appeal is not ripe because the Deans do not appeal from final orders, and because the Deans have not obtained leave for an interlocutory appeal.
The Panel will dismiss the appeal on jurisdictional grounds, finding that (i) the orders granting interim fees to Debtor's counsel are not final orders, and (ii) the record presents no grounds for granting leave to appeal under well-settled Sixth Circuit case law, even treating the pro se notice of appeal as a motion for leave to appeal under Federal Rule of Bankruptcy Procedure 8004(d). The Panel, therefore, does not reach the merits of the appeal.
FACTS
In June 2014, three years before filing her bankruptcy petition, Ms. Lane sold her residence to the Deans. They subsequently discovered mold in the basement and filed a civil complaint against her. The state court submitted the parties' dispute to binding arbitration, the arbitrator found for the Deans, awarding them a total of $ 126,895.57, and a Kentucky trial court entered judgment on the award against Ms. Lane.
The Deans filed their judgment lien against Ms. Lane's current residence on May 18, 2017. Largely to address this dispute, she filed a voluntary chapter 13 petition on July 14, 2017, in the Bankruptcy Court. Ms. Lane, now a bankruptcy debtor, *597simultaneously filed her proposed chapter 13 plan (the "Plan"). The Bankruptcy Court confirmed the Debtor's Plan over the Deans' objection. The Deans did not appeal the confirmation order.
Since the entry of the confirmation order, the Deans have filed several adversary proceedings and appeals to avoid its effect. As a result, the Bankruptcy Court sanctioned the Deans, awarding attorney fees to the Debtor for the Deans' contemptuous behavior. The Deans appealed from the sanction orders and those appeals, which are not addressed in today's opinion, remain pending before the Panel.
The Deans also filed objections to the Debtor's counsel's Interim Fee Application. The Bankruptcy Court conducted a hearing on the Interim Fee Application on August 29, 2018. Following the hearing, the Bankruptcy Court entered the October 10, 2018 Order allowing some of the interim fees requested but requiring further documentation as to additional fees. After the submission of further information, the Bankruptcy Court entered the October 17, 2018 Order approving the remaining fees. The Deans timely filed a notice of appeal on October 16, 2018 (Bankr. Case No. 17-32237 ECF No. 149) and a notice of amended appeal on October 19, 2018. (Bankr. Case No. 17-32237 ECF No. 156).
DISCUSSION
A. In General
The threshold issue in any federal case is whether the court has jurisdiction. The Bankruptcy Appellate Panel has jurisdiction to review (i) final judgments, orders, and decrees arising from a bankruptcy proceeding; and (ii) interlocutory orders or decrees (only with leave of court).
B. Appeal as of Right (Final Orders)
To begin, the Panel refers the parties to its recent opinion in BAP Case No. 18-8005, in which the Panel held that the Deans' appeal from the order denying dismissal of the case was not a final order. In re Lane ,
"[A]n order of interim fees becomes final when it is no longer subject to modification by the bankruptcy court." In re Boddy ,
Viewing the finality of interim fee awards through the lens of Ritzen Group, Inc. v. Jackson Masonry, LLC (In re Jackson Masonry, LLC ),
Accordingly, the Bankruptcy Court's orders granting interim fees are not final within the meaning of
C. Leave to Appeal (Non-Final Orders)
Even though the Panel finds that the orders granting interim fees are non-final, it still must consider whether to treat the Deans' notices of appeal as motions for leave under
In deciding whether to grant leave to appeal an interlocutory order, this court has previously applied the four-part test employed by the Sixth Circuit under
(1) The question involved is one of law; (2) the question is controlling; (3) there is substantial ground for difference of opinion respecting the correctness of the *599[bankruptcy] court's decision; and (4) an immediate appeal would materially advance the ultimate termination of the litigation.
The Deans assert that "[t]here is substantial ground for difference of opinion regarding the Bankruptcy Court's erroneous interpretation of [the disclosure statement] and the application of the lodestar analysis." (Appellants' Reply Br. at 5.) Neither of those issues, nor any other issue raised by the Deans in this appeal, demonstrate any question of law that is subject to a serious difference of opinion. Rather, the issues raised by the Deans all challenge the Bankruptcy Court's application of well-settled law to the facts raised in the firm's interim fee application, and the court's discretion in making the award.
Whether to award fees and, if so, the reasonable amount of the fees are issues committed to the sound discretion of the trial court. Amer. Commercial Barge Lines Co. v. NLRB ,758 F.2d 1109 (6th Cir. 1985). Thus, a bankruptcy court's decision to award fees is reviewed for an abuse of discretion. In re Boddy ,950 F.2d at 336 .
In re Scarlet Hotels, LLC ,
CONCLUSION
The Panel finds that the orders granting interim fees to the Debtor's attorney are non-final orders from which the Appellants have no appeal as of right. Notwithstanding the flexibility of Rule 8004(d), the Panel declines to grant leave to appeal because it finds no question of law, the answer to which would materially advance the litigation. The policy embodied in the requirement of finality - to discourage piecemeal appeals with their resulting delay and expense and interference with the trial court's jurisdiction - clearly resonates in this matter.
The appeal is DISMISSED for lack of jurisdiction.
Order, Bankr. Case No. 17-32237 ECF No. 143 (October 10, 2018) (granting application for interim compensation and reimbursement of expenses) ("October 10, 2018 Order") and Order, Bankr. Case No. 17-32237 ECF No. 152 (October 17, 2018) (granting additional interim fees based on amendment) ("October 17, 2018 Order").
BAP Case Nos. 18-8038 & 18-8040.
In a non-bankruptcy context, the Sixth Circuit Court of Appeals recently reaffirmed the general rule that awards of interim fees are not final for purposes of appeal where post-judgment proceedings are on-going. JPMorgan Chase Bank, N.A. v. Winget , No. 18-1143,
Reference
- Full Case Name
- IN RE: Linda J. LANE, Debtor. Kevin Dean Sarah Dean v. Linda J. Lane
- Cited By
- 5 cases
- Status
- Published