Summary
striking from record on appeal items created after the bankruptcy court had ruled.
Summary of this case from In re RabornOpinion
CASE NO. 12-10314-rlj-7
11-07-2014
IN RE: ROBERT LEWIS ADKINS, SR. DEBTOR.
Nathaniel Peter Holzer Texas Bar No. 00793971 Jordan, Hyden, Womble, Culbreth & Holzer, P.C. 500 North Shoreline Blvd., Suite 900 Corpus Christi, Texas 78401-0341 Telephone: (361) 884-5678 Facsimile: (361) 888-5555 Email: pholzer@jhwclaw.com Attorneys for McLoba Partners, Ltd. Nathaniel Peter Holzer Nathaniel Peter Holzer Texas Bar No. 00793971 Jordan, Hyden, Womble, Culbreth & Holzer, P.C. 500 North Shoreline Blvd., Suite 900 Corpus Christi, TX 78401-0341 Telephone: (361) 884-5678 Facsimile: (361) 888-5555 Email: pholzer@jhwclaw.com Attorneys for McLoba Partners, Ltd.
MEMORANDUM OPINION AND ORDER
McLoba Partners, Ltd. d/b/a U.S. Gold Firm ("McLoba") is pursuing a direct appeal to the Fifth Circuit of the Court's ruling that it willfully violated the automatic stay by filing a third party action against the debtor, Robert Lewis Adkins, Sr. As required in prosecuting any appeal, McLoba has filed its designation of items to be included for the record on appeal. Adkins moves here to strike the vast majority of the items included in McLoba's designation. See Docket Nos. 308 and 309.
The designated items that are subject of Adkins's motion are not part of the evidence introduced or arguments made at the hearing held on the question of whether McLoba violated the stay. And McLoba does not contend that they are. It submits, however, that such items—mostly pleadings filed after the Court's ruling or in various other cases and adversary proceedings—are "part and parcel of the appellate process and their inclusion will result in a more compete [sic] and understandable appellate record." McLoba goes on to state that, given the Court's knowledge of such items, "[i]t would be wrong to ask the court of appeals to consider the matters being appealed in a vacuum . . . ." McLoba's response also questions this Court's authority to rule on Adkins's motion, though counsel for McLoba down-played this point at the hearing. The response makes two arguments on the authority question: first, that the applicable rule, Rule 8006 of the Federal Rules of Bankruptcy Procedure, states that the record "shall include the items so designated by the parties"—thus implying that the Court has no discretion concerning the items to be included; and, second, that the Court, as the bankruptcy court, has no jurisdiction over the appeal once the notice of appeal is filed.
Assuming first that the Court can rule on Adkins's motion, the Court addresses the substantive question of whether the items so designated but objected to can be included in the appellate record. In the Fifth Circuit, items to be designated on appeal must first become part of the bankruptcy court's record. More specifically, the Fifth Circuit has stated that
Rule 8006 provides that the record on appeal from a bankruptcy court decision consists of designated materials that became part of the bankruptcy court's record in the first instance. The rule does not permit items to be added to the record on appeal to the district court if they were not part of the record before the bankruptcy court.In re SI Restructuring, Inc., 480 F. App'x 327, 328-29 (5th Cir. 2012) (quoting Zer-Ilan v. Frankford (In re CPDC, Inc.), 337 F.3d 436, 443 (5th Cir. 2003)). The items need not be formally entered into evidence, but should be "of record and available for consideration by the bankruptcy court when it rendered its decision." In re Heitmeier, No. 13-6787, 2014 WL 1513886, at *1 (E.D. La. Apr. 16, 2014). If an item was not available for consideration by the bankruptcy court in making its determination, then it should be stricken. See SI Restructuring, 480 F. App'x at 329; NWL Holdings, Inc. v. Eden Ctr., Inc. (In re Ames Dep't Stores, Inc.), 320 B.R. 518, 521 (Bankr. S.D.N.Y. 2005). By implication, items that were created after the court made its disposition cannot be part of the appellate record. Zer-Ilan, 337 F.3d at 443 (citing Kabayan v. Yepremian (In re Yepremian), 116 F.3d 1295, 1297 (9th Cir. 1997)).
Items created after the Court made its ruling were obviously not considered by the Court in its ruling. As for the items from other cases and adversary proceedings, McLoba's arguments are inapposite. The appropriate standard is not whether the designated items will give the appellate court the same birds-eye view that the bankruptcy court had. There is nothing in McLoba's argument that explains how such items became part of the bankruptcy court's record in this particular case, and how any of them could have been considered by this Court in making its decision. Adkins's motion should be granted and the irrelevant items stricken.
But can the Court decide this issue? Rule 8006 of the Federal Rules of Bankruptcy Procedure is the relevant statute concerning the appellate record. It does not, however, speak to the issue of whether a bankruptcy judge has the authority to resolve a dispute over the contents of the record on appeal. See Fed. R. Bankr. P. 8006. There is not a consensus on this issue; a case from a bankruptcy court in Ohio carefully outlines the majority and the minority views. Amedisys, Inc. v. JP Morgan Chase Manhattan Bank (In re Nat'l Century Fin. Enters., Inc.), 334 B.R. 907 (Bankr. S.D. Ohio 2005).
Under the majority view, bankruptcy courts have the power to resolve a dispute over the contents of the record on appeal. Id. at 912. It is practical and efficient: since the bankruptcy court is "the court of first impression," it is in the best position to strike wrongly designated items. Id. at 913. "While the filing of a notice of appeal generally divests a bankruptcy court of jurisdiction to proceed with respect to matters raised by the appeal, actions in aid of the appeal are not beyond its authority." Id. (citations omitted).
An opinion from the Dow Corning case sets out the minority view—that under Rule 8006, the bankruptcy court lacks discretion to strike designated materials on the appellate record. In re Dow Corning Corp., 263 B.R. 544, 548 (Bankr. E.D. Mich. 2001). The Dow Corning court began its analysis by recognizing that Rule 8006 fails to provide the appellee with any remedy when the list of designated items is perceived to be over-inclusive. Dow Corning, 263 B.R. at 546. The court reasoned that under the canon of construction expressio unius est exclusio alterius, "[t]his silence suggests that the appellee has no recourse under such circumstances." Id. at 546. The court added that, unlike its "non-bankruptcy analog," Rule 10 of the Federal Rules of Appellate Procedure, Rule 8006 is directed at the clerk of the bankruptcy court, not to the bankruptcy judge. Id. The Dow Corning court found "[t]his discrepancy between F. R. App. P. 10 and Rule 8006 . . . all the more telling considering that the latter is modeled on the former." Id. (citing Fed. R. Bankr. P. 8006 Advisory Committee Note (1983)).
"Under the well-accepted rule of statutory construction stated as expressio unius est exclusio alterius, the express inclusion of one item of a class excludes others of the same class. The only kind of modification permitted under R. 8006 would thus be addition to, and not exclusion from, the record." Dow Corning, 263 B.R. at 546 (quoting In re Berge, 37 B.R. 705, 708 (Bankr. W.D. Wis. 1983)).
The court in Amedisys rejected this view and found more persuasive the reasoning provided by WB, Ltd. v. Tobago Bay Trading Co. (In re Tobago Bay Trading Co.), 142 B.R. 534, 536 (Bankr. N.D. Ga. 1992).
According to Tobago Bay, reliance by bankruptcy courts on the Federal Rules of Appellate Procedure is appropriate in bankruptcy appeals, particularly when the Bankruptcy Rules do not speak to a question of appellate procedure. The Court agrees with this proposition because 28 U.S.C. § 158(c) provides that bankruptcy
appeals shall generally be taken in the same manner as district court appeals, where the Federal Rules of Appellate Procedure are in force. When "the Bankruptcy Rules do not provide an answer, courts construing other provisions of the Bankruptcy Rules have looked to analogous provisions in the Federal Rules of Appellate Procedure, governing appeals to the courts of appeals, for guidance . . . ."Amedisys, 334 B.R. at 915 (citations omitted). The analogous provision to Rule 8006 is Rule 10(e)(1) of the Federal Rules of Appellate Procedure. Id. at 916. Rule 10(e)(1) provides that "[i]f any difference arises about whether the record truly discloses what occurred in the district court, the difference must be submitted to and settled by that court and the record conformed accordingly." Fed. R. App. P. 10(e)(1). Following the reasoning posited in Tobago Bay, and incorporating Appellate Rule 10(e)(1), the court in Amedisys held that the bankruptcy court, as the court where the original record was made, is the appropriate court to decide a dispute arising over the record on appeal. Amedisys, 334 B.R. at 916.
The Amedisys court also cited the following cases supporting its view that bankruptcy courts have the power to rule on disputes over the contents of the appellate record: Metro N. St. Bank v. The Barrick Group, Inc. (In re Barrick Group, Inc.), 100 B.R. 152, 154 (Bankr. D. Conn. 1989); In re Neshaminy Office Bldg. Assocs., 62 B.R. 798, 802 (E.D. Pa. 1986); Food Distrib. Ctr. v. Food Fair, Inc. (In re Food Fair, Inc.), 15 B.R. 569, 572 (Bankr. S.D.N.Y. 1981); Saco Loc. Dev. Corp. v. Armstrong Bus. Credit Corp. (In re Saco Loc. Dev. Corp.), 13 B.R. 226, 229 (Bankr. D. Me. 1981); French Kezelis & Kominiarek, P.C. v. Carlson (In re Carlson), 255 B.R. 22, 23 (Bankr. N.D. Ill. 2000).
The Court agrees with the majority view. If either the Fifth Circuit or the District Court addresses this issue and disagrees with this, the Court submits this Memorandum Opinion and Order as a recommendation to such court.
It is, therefore,
ORDERED that the items designated as stricken on attached Exhibit A, McLoba's Amended Designation of Items, are hereby stricken from the appellate record; it is further
ORDERED that, in addition to the items that are not stricken from Exhibit A, the following items shall also be included as proper designations:
• Docket No. 296, Appellant Designation of Contents for Inclusion in Record on Appeal;These three items are likewise subject of Adkins's motions; the Court therefore denies Adkins's motion as to these three items.
• Docket No. 297, Statement of Issues on Appeal;
• Docket No. 301, Amended Appellant Designation of Contents for Inclusion in Record on Appeal.
McLoba appealed both the Court's order that McLoba willfully violated the automatic stay [Docket No. 273] and the Court's subsequently entered order awarding Adkins his attorney's fees as damages for the stay violation [Docket No. 288]. These appeals were consolidated by the Court's order of September 5, 2014 [Docket No. 311].
The following constitutes the ruling of the court and has the force and effect therein described.
Signed November 7, 2014
/s/_________
United States Bankruptcy Judge
### End of Memorandum Opinion and Order ###
Nathaniel Peter Holzer
Texas Bar No. 00793971
Jordan, Hyden, Womble, Culbreth
& Holzer, P.C.
500 North Shoreline Blvd., Suite 900
Corpus Christi, Texas 78401-0341
Telephone: (361) 884-5678
Facsimile: (361) 888-5555
Email: pholzer@jhwclaw.com
Attorneys for McLoba Partners, Ltd.
IN RE: ROBERT LEWIS ADKINS, SR. DEBTOR.
McLoba Partners, Ltd., d/b/a U.S. Gold Firm Appellant
vs.
Robert Lewis Adkins, Sr. Appellee
APPELLANT'S AMENDED DESIGNATION OF ITEMS TO BE INCLUDED IN RECORD ON APPEAL
McLoba Partners, Ltd. d/b/a U.S. Gold Firm ("McLoba") designates the following items to be included in the record on appeal to the United States District Court for the Northern District of Texas, Abilene Division. Bankruptcy Case No. 12-10314-RLJ-7 In re: Robert Lewis Adkins, Sr., Debtor, In The United States Bankruptcy Court For The Northern District Of Texas, Abilene Division
| Doc # | Date | Document |
| 279 | 8/7/14 | Amended Notice of Appeal |
| 278 | 8/7/14 | Notice of Appeal |
| 273 | 7/24/14 | Order |
| 272 | 7/24/14 | Memorandum Opinion |
| 291 | 8/18/14 | |
| 288 | 8/14/14 | Order |
| Docket sheet for Bankruptcy Case No. 12-10314-RLJ-7; In re: Robert Lewis Adkins, Sr., Debtor | ||
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| 258 | 3/25/14 | Debtor's Motion for Damages for Willful Violation of the Automatic Stay EXHIBITS: A- Liquidating Trustee's Original Adversary Complaint and Claim Objection in Adversary No. 13-01057 B- First Amended Answer, Counterclaim and Third Party Complaint of McLoba Partners, Ltd. d/b/a US Gold Firm in Adversary No. 13-01057 C- Email dated 3/24/14 between Nathaniel P. Holzer and Jason Kathman |
| | | |
| 261 | 03/27/2014 | Notice of hearing filed by Debtor Robert Lewis Adkins Sr. (RE: related document(s)258 Motion for damages for willful violation of the automatic stay |
| 266 | 4/15/2014 | McLoba's Response and Objection to Debtor's Motion for Damages for Willful Violation of the Automatic Stay |
| | | |
| 268 | 05/07/2014 | Affidavit of Jason P. Kathman in Support of Debtor's Motion for Damages for Willful Violation of the Automatic Stay or in the Alternative for Contempt |
| 276 | 07/28/2014 | Affidavit of Jason P. Kathman in Support of Attorneys Fees |
| 283 | 08/07/2014 | Objection to Affidavit filed by Attorney Jason Kathman |
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| 5/12/14 | Transcript of 5/12/14 Hearing (transcript has been requested and McLoba will supplement when received) |
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| | | DISTRICT COURT ORDER dismissing Civil Action No. 1:13 |
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| | | incurring same. |
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| | | against Robert Lewis Adkins Sr.. |
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| Sharon Oda IRA v. Robert Lewis Adkins, Sr. |
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Doc #288 and #291 are a separate but closely related order and notice of appeal. Appellant McLoba believes they should be considered together with this appeal as one appellate matter, with only one record on appeal, and expects to file a motion to consolidate the two appeals.
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Respectfully submitted,
/s/ Nathaniel Peter Holzer
Nathaniel Peter Holzer
Texas Bar No. 00793971
Jordan, Hyden, Womble, Culbreth
& Holzer, P.C.
500 North Shoreline Blvd., Suite 900
Corpus Christi, TX 78401-0341
Telephone: (361) 884-5678
Facsimile: (361) 888-5555
Email: pholzer@jhwclaw.com
Attorneys for McLoba Partners, Ltd.
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the above and foregoing document was served via the Court's electronic noticing system on September 2, 2014 on counsel for Appellee shown below. jkathman@pgkpc.com
Jason P. Kathman
Pronske Goolsby & Kathman, P.C.
2200 Ross Avenue, Suite 5350
Dallas, TX 75201
/s/ Nathaniel Peter Holzer
Nathaniel Peter Holzer