Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-18-60040/USCOURTS-ca9-18-60040-0/pdf.json

Parties Involved:
Christopher Michael Marino

Valerie Margaret Marino

Ocwen Loan Servicing, LLC
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN RE CHRISTOPHER MICHAEL 

MARINO; VALERIE MARGARET 

MARINO,

Debtors,

OCWEN LOAN SERVICING, LLC,

Appellant/Appellee,

v.

CHRISTOPHER MICHAEL MARINO;

VALERIE MARGARET MARINO,

Appellees/Appellants.

Nos. 18-60005

18-60006

18-60040

18-60041

BAP Nos.

16-1229

16-1238

OPINION

Appeal from the Ninth Circuit

Bankruptcy Appellate Panel

Faris, Lafferty III, and Tighe, Bankruptcy Judges, Presiding

Argued and Submitted October 22, 2019

San Francisco, California

Filed February 10, 2020

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2 IN RE MARINO

Before: J. Clifford Wallace and Mary H. Murguia, Circuit 

Judges, and Robert S. Lasnik,* District Judge.

Opinion by Judge Lasnik

SUMMARY**

Bankruptcy

The panel dismissed, for lack of jurisdiction, appeals 

from the Bankruptcy Appellate Panel’s decision affirming 

the bankruptcy court’s contempt orders issued against a 

creditor and reversing and remanding on the issue of 

punitive damages; and affirmed the BAP’s denial of debtors’ 

motion for attorney’s fees.

Dismissing in part for lack of jurisdiction, the panel held 

that the BAP’s decision remanding the matter to the 

bankruptcy court was not final and appealable. Considering 

the need to avoid piecemeal litigation, judicial efficiency, the 

systemic interest in preserving the bankruptcy court’s role as 

the finder of fact, and whether delaying review would cause 

any party irreparable harm, the panel concluded that all four 

of these factors compelled dismissal of the creditor’s 

appeals.

* The Honorable Robert S. Lasnik, United States District Judge for 

the Western District of Washington, sitting by designation.

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.

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IN RE MARINO 3

Affirming in part, the panel held that the BAP did not 

abuse its discretion in denying debtors’ motion for attorney’s 

fees incurred before the BAP. Debtors were not entitled to 

fees on the ground of a frivolous appeal. They also were not 

entitled to attorney’s fees under a provision in a deed of trust, 

and 11 U.S.C. § 105 does not authorize an award of fees.

COUNSEL

Jonathan D. Fink (argued), Wright Finlay & Zak LLP,

Newport Beach, California; Christopher Alan James Swift, 

Wright Finlay & Zak LLP, Las Vegas, Nevada; for 

Appellant/Appellee.

Christopher P. Burke (argued), Reno, Nevada; Christina L. 

Henry, Henry & DeGraaff PS, Seattle, Washington; for 

Appellees/Appellants.

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4 IN RE MARINO

OPINION

LASNIK, District Judge:

After the bankruptcy court entered a chapter 7 discharge 

injunction in June 2013, Debtors, Christopher and Valerie 

Marino, continued to receive letters and telephone calls from 

Ocwen Loan Servicing LLC (“Ocwen”) about the home they 

had abandoned to foreclosure before filing for bankruptcy. 

Following an evidentiary hearing, the bankruptcy court 

found Ocwen in contempt of the discharge injunction and 

imposed a $119,000 civil contempt sanction.

Ocwen appeals from that order, as well as from the 

bankruptcy court’s order denying its motion for 

reconsideration. Ocwen also appeals from the Bankruptcy 

Appellate Panel’s (“BAP”) conclusion that it was “error for 

the bankruptcy court to preclude itself from considering an 

award of punitive damages” under 11 U.S.C. § 105(a).1 For 

their part, the Marinos appeal from the BAP’s denial of their 

motion for attorney’s fees incurred on appeal.

We dismiss Ocwen’s appeals for lack of jurisdiction and 

affirm the BAP’s denial of the Marinos’ motion for 

attorney’s fees.

I.

The Marinos purchased a home in Verdi, California, with 

a loan that was later serviced by Ocwen. The Marinos fell 

behind on their mortgage payments and decided to leave 

their home and allow Ocwen to foreclose on it. The Marinos 

1 Unless specified otherwise, all chapter and section references are 

to the Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references 

are to the Federal Rules of Civil Procedure.

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IN RE MARINO 5

then filed for chapter 7 bankruptcy and received a discharge 

injunction a few months later.

Despite the discharge injunction, the Marinos continued 

to receive letters and telephone calls from Ocwen about their 

former home. The Marinos presented evidence at a hearing 

showing that they had received letters and calls from Ocwen, 

causing them severe emotional distress.

The bankruptcy court concluded that Ocwen violated the 

discharge injunction and imposed a civil contempt sanction 

of $1,000 for every violation, totaling $119,000. The 

bankruptcy court also concluded that it lacked the inherent 

authority to award punitive damages for a violation of a 

discharge injunction. Finally, the bankruptcy court denied 

Ocwen’s motion for reconsideration.

The BAP affirmed the bankruptcy court’s contempt and 

reconsideration orders but reversed and remanded on the 

issue of punitive damages. The BAP also denied the 

Marinos’ motion for appellate attorney’s fees.

Ocwen appeals from the bankruptcy court’s contempt 

and reconsideration orders. Ocwen also appeals from the 

BAP’s decision reversing the bankruptcy court on the scope 

of its inherent authority to award punitive damages for a 

discharge injunction violation. The Marinos appeal the 

BAP’s decision on attorney’s fees.

II.

A.

Under 28 U.S.C. § 158(d)(1), our jurisdiction is limited 

to “decisions, judgments, orders, and decrees that are ‘final’ 

[for] we have no authority . . . to consider interlocutory 

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6 IN RE MARINO

orders and decrees.” In re Gugliuzza, 852 F.3d 884, 891 (9th 

Cir. 2017) (citing Conn. Nat’l Bank v. Germain, 503 U.S. 

249, 252 (1992)). Because bankruptcy cases are often 

complex and litigated in various discrete proceedings, BAP 

orders may be immediately appealed only if they “finally 

dispose of discrete disputes within the larger case.” Id. 

at 892 (quoting Bullard v. Blue Hills Bank, 135 S. Ct. 1686, 

1692 (2015)). “Correct delineation of the dimensions of a 

bankruptcy ‘proceeding is a matter of considerable 

importance” for “[a]n erroneous identification of an 

interlocutory as a final decision may yield an appeal over 

which the appellate forum lacks jurisdiction.” Ritzen Grp., 

Inc. v. Jackson Masonry, LLC, 589 U.S. ___ (slip op. at 3) 

(2020). An order in a bankruptcy proceeding is final and 

thus appealable if it “alters the status quo and fixes the rights 

and obligations of the parties . . . [or] alters the legal 

relationships among the parties.” In re Gugliuzza, 852 F.3d 

at 893 (quoting Bullard, 135 S. Ct. at 1692, 1695).

However, an order from the BAP is not final if it 

“remands for factual determinations on a central issue[.]” Id. 

at 895 (quoting In re Vylene Enters., 968 F.2d 887, 895 (9th 

Cir. 1992)). We have departed from this rule only when the 

BAP remands for “purely mechanical or computational 

task[s] such that the proceedings on remand are highly 

unlikely to generate a new appeal.” In re Landmark Fence 

Co., Inc., 801 F.3d 1099, 1103 (9th Cir. 2015) (alteration in 

original) (quoting In re Saxman, 325 F.3d 1168, 1172 (9th 

Cir. 2003)). We limit the exception to our general rule 

against exercising appellate jurisdiction when the BAP 

remands to the bankruptcy court for good reason. When the 

BAP “remands a case to the bankruptcy court, ‘the appellate 

process likely will be much shorter if we decline jurisdiction 

and await ultimate review on all the combined issues.’” In 

re Lakeshore Vill. Resort, Ltd., 81 F.3d 103, 106 (9th Cir. 

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IN RE MARINO 7

1996) (quoting In re Stanton, 766 F.2d 1283, 1287–88 (9th 

Cir. 1985)).

We apply a four-part test to determine if we have 

jurisdiction over an appeal from a BAP decision that 

remands to the bankruptcy court. We consider “(1) the need 

to avoid piecemeal litigation; (2) judicial efficiency; (3) the 

systemic interest in preserving the bankruptcy court’s role as 

the finder of fact; and (4) whether delaying review would 

cause either party irreparable harm.” In re Gugliuzza, 

852 F.3d at 894 (quoting In re Perl, 811 F.3d 1120, 1126 

(9th Cir. 2016)). We conclude that all four factors compel 

dismissal of Ocwen’s appeals.

As to the first two factors, dismissal serves judicial 

efficiency and avoids piecemeal litigation by allowing the 

bankruptcy court to make additional findings of fact and 

conclusions of law before we exercise our jurisdiction. If we 

were to resolve Ocwen’s appeals now, the parties would 

almost certainly climb back up the appellate ladder, asking 

us to consider the bankruptcy court’s decision on punitive 

damages. The Supreme Court has discouraged this type of 

piecemeal litigation for its inefficiency. See Bullard, 135 

S. Ct. at 1693 (explaining that the “rule of finality” exists to 

avoid “climb[s] up the appellate ladder and slide[s] down the 

chute” and the “delays and inefficiencies” that result).

As to the third factor, the BAP’s decision expressly left 

open the possibility for the bankruptcy court to engage in 

additional fact-finding after remand. Although the BAP did 

not “hold that the bankruptcy court must award a fine or 

punitive damages,” it remanded the case for the bankruptcy 

court to “consider whether to do so.” The BAP explained 

that the bankruptcy court “might choose to issue proposed 

findings and a recommended judgment on punitive damages 

to the district court or refer the matter to the district court for 

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8 IN RE MARINO

criminal contempt proceedings.” (emphasis added). 

Dismissal preserves the bankruptcy court’s fact-finding role 

where, as here, the BAP’s decision remands to the 

bankruptcy court to determine whether punitive damages are 

appropriate.

Finally, as to the fourth factor, other than protracted 

litigation costs, neither party would be irreparably harmed if 

we declined jurisdiction over Ocwen’s appeals. Litigation 

costs generally do not qualify as irreparable harm. Cf. In re 

Excel Innovations, Inc., 502 F.3d 1086, 1099 (9th Cir. 2007).

In short, the BAP remanded to the bankruptcy court for 

more factual findings on punitive damages. The bankruptcy 

court’s decision whether punitive damages are appropriate is 

not a “ministerial task[.]” In re Gugliuzza, 852 F.3d at 897 

(stating that “[a] decision that remands a case for further 

fact-finding will rarely have this degree of finality, unless 

the remand order is limited to ministerial tasks” (citation

omitted)).

In addition, the bankruptcy court’s punitive damages 

calculus was part of the same “discrete proceeding” in which 

the bankruptcy court imposed sanctions against Ocwen for 

violating the discharge injunction. Id. at 899 (quoting

Bullard, 135 S. Ct. at 1692). The BAP’s decision did not 

“terminate[] a procedural unit separate from the remaining 

case” or “conclusively resolve[] the [Marinos’] entitlement 

to the requested relief.” Ritzen Grp., Inc., 589 U.S. at ___ 

(slip op. at 6). The relevant “procedural unit” in Ocwen’s 

appeals is the contempt proceedings, in which the Marinos 

sought both monetary sanctions and punitive damages. The 

BAP remanded to the bankruptcy court to assess whether to 

award the Marinos punitive damages, relief that the Marinos 

diligently pursued. This is therefore not a case in which the 

BAP’s decision “ended the [contempt proceeding] 

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IN RE MARINO 9

adjudication and left nothing more for the Bankruptcy Court 

to do in that proceeding.” Id. at ___ (slip op. at 12). We 

dismiss Ocwen’s appeals for lack of appellate jurisdiction.

B.

The Marinos appeal from the BAP’s denial of their 

motion for attorney’s fees incurred defending against the 

appeal before the BAP. Unlike Ocwen’s appeals, the 

Marinos’ appeal only raises the frivolousness of Ocwen’s 

appeal to the BAP, an issue that is both final and discrete. 

We have jurisdiction over the Marinos’ appeal and review it 

for abuse of discretion. See Shapiro ex rel. Shapiro v. 

Paradise Valley Unified Sch. Dist. No. 69, 374 F.3d 857, 861 

(9th Cir. 2004) (citing Fischel v. Equitable Life Assurance 

Soc’y of the U.S., 307 F.3d 997, 1005 (9th Cir. 2002)).

The Marinos point to three sources that they believe 

entitle them to attorney’s fees: (1) Federal Rule of Appellate 

Procedure 38,2 (2) the attorney’s fees provision in the deed 

of trust with Ocwen, and (3) section 105(a) of the 

Bankruptcy Code. We address each purported basis for an 

award of attorney’s fees in turn.

First, under Federal Rule of Appellate Procedure 38, we 

may award damages and single or double costs to an appellee 

if we determine that an appeal is frivolous. See Fed. R. App. 

P. 38. “An appeal is frivolous if the results are obvious, or 

the arguments of error are wholly without merit.” Maisano 

v. United States, 908 F.2d 408, 411 (9th Cir. 1990) (per 

2 More precisely, the BAP may award just damages and single or 

double costs to an appellee as a sanction for a frivolous appeal from a 

bankruptcy court’s judgment under Federal Rule of Bankruptcy 

Procedure 8020(a). The standard applied is the same as under Federal 

Rule of Appellate Procedure 38.

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10 IN RE MARINO

curiam) (citing Wilcox v. C.I.R., 848 F.2d 1007, 1009 (9th 

Cir. 1988)). The BAP did not clearly err in finding that the 

appeal was not frivolous and did not abuse its discretion by 

declining to sanction Ocwen under Rule 38. The Marinos 

are not entitled to attorney’s fees under Rule 38.

Second, the attorney’s fees provision in the Marino’s 

deed of trust with Ocwen only allows Ocwen to receive 

attorney’s fees for “a legal proceeding that might 

significantly affect [its] interest in the Property and/or rights 

under [the deed],” including bankruptcy. That provision is 

reciprocal pursuant to California Civil Code Section 1717(a) 

when either party seeks to enforce or avoid enforcement of 

the deed. See In re Penrod, 802 F.3d 1084, 1088 (9th Cir. 

2015) (citations omitted).

The BAP did not err in concluding that the deed of trust 

did not entitle the Marinos to appellate attorney’s fees. The 

Marinos seek to enforce the discharge injunction, not the 

deed of trust. Accordingly, we will not award fees under the 

deed of trust.

Third, and finally, the Marinos argue that they should be 

awarded attorney’s fees under section 105(a) of the 

Bankruptcy Code. But that would require us to overturn our 

decision, In re Del Mission Ltd., 98 F.3d 1147 (9th Cir. 

1996), in which we held that section 105(a) does not 

authorize an award of attorney’s fees. See id. at 1153–54. 

We cannot do so. See United States v. Belgarde, 300 F.3d 

1177, 1181 (9th Cir. 2002) (“[A] panel not sitting en banc

has no authority to overturn Ninth Circuit precedent[.]”). 

The Marinos are not entitled to appellate attorney’s fees 

under section 105(a).

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IN RE MARINO 11

III.

We dismiss Ocwen’s appeals for lack of appellate 

jurisdiction.3 However, we have jurisdiction over the 

Marinos’ appeal and affirm the BAP’s conclusion that they 

were not entitled to attorney’s fees for their appeal to the 

BAP.

AFFIRMED IN PART, DISMISSED FOR LACK OF 

JURISDICTION IN PART.

3 The Marinos filed motions to strike and supplements to these 

motions in each of Ocwen’s pending appeals. Because we dismiss 

Ocwen’s appeals for lack of jurisdiction, we decline to reach the 

Marinos’ motions to strike and deny them without prejudice.

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