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Parties Involved:
Aurora Loan Services, LLC
Appellee
Janel K. Bryan
Appellee
Arthur Clark
Appellant
M. Stephen Peters
Appellee
Specialized Loan Servicing, LLC
Appellee
Vectra Bank Colorado, N.A.
Not Party

Document Text:

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE TENTH CIRCUIT

_________________________________

IN RE GARY L. BRYAN, also known as 

Gary L Bryan, et al.,

 Debtor.

__________________________________

M. STEPHEN PETERS, Trustee,

 Plaintiff - Counter-Defendant 

- Appellee,

 v.

ARTHUR CLARK,

 Defendant-Counter-Claimant 

- Appellant,

 and

JANEL K. BRYAN,

 Defendant - Counter-Claimant 

- Appellee,

 and

AURORA LOAN SERVICES, LLC and 

SPECIALIZED LOAN SERVICING, 

LLC, 

 Defendants - Appellees,

 and 

VECTRA BANK COLORADO, N.A.,

 Defendant.

BAP No. CO-15-011

Bankr. No. 05-38302

Adv. No. 10-01189

Chapter 7

DISMISSAL ORDER

May 01, 2015

BAP Appeal No. 15-11 Docket No. 20 Filed: 05/01/2015 Page: 1 of 5
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_________________________________

Before THURMAN, Chief Judge, CORNISH, and KARLIN, Bankruptcy Judges.

_________________________________

On April 8, 2015, the Court issued its Order to Show Cause Why Appeal Should 

Not be Considered for Dismissal as Interlocutory (the “Show-Cause Order”). Appellant 

Arthur Clark and Appellee Janel K. Bryan each filed a response to the Show-Cause 

Order. For the reasons stated below, this appeal is dismissed. 

1. Background

The judgment appealed from (for convenience, the “Surcharge Judgment”) was 

entered in an adversary proceeding filed by the Chapter 7 trustee to determine the validity 

and priority of liens on proceeds of a sale of real property, and to surcharge the collateral 

of one of the potential lienholders (Clark) pursuant to 11 U.S.C. § 506(c).1 In the 

Surcharge Judgment, the bankruptcy court—

• determined the validity and priority of the various asserted liens; 

• surcharged Clark’s collateral by awarding the Chapter 7 trustee his 

reasonable attorney’s fees and costs, to be taken from Clark’s portion of the 

sale proceeds;

• awarded the Chapter 7 trustee a fixed sum of fees and expenses incurred 

through December 11, 2011 (shortly before the trial date);

• set a deadline for the Chapter 7 trustee to submit an affidavit for fees and 

 1 Judgment, BAP Docket No. 1-3; see also Findings of Fact, Conclusions of Law, 

and Order re: Validity, Extent and Priority of Lien Claims on Remand from the Tenth 

Circuit Court of Appeals, BAP Docket No. 1-2. 

BAP Appeal No. 15-11 Docket No. 20 Filed: 05/01/2015 Page: 2 of 5
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costs incurred after December 11, 2011 and a deadline for Clark to object;

and

• indicated that the court—after the post-trial fee issue was resolved—would 

enter an order “setting forth a final . . . distribution of the Net Sale 

Proceeds,” specifying the precise amounts to be distributed to the various 

stakeholders. 

Our review of the bankruptcy court’s docket reflects that Clark objected to the 

Chapter 7 trustee’s fee request, arguing mainly that Clark should not have to pay for the 

trustee’s fees incurred in a prior appeal in which the Tenth Circuit Court of Appeals

reversed the district court in part and concluded that Clark (contrary to the trustee’s 

argument) had a lien on the property.2 The bankruptcy court has set a hearing for May 4, 

2015 to render an oral ruling from the bench. 

2. The Surcharge Judgment is not a final judgment

This Court has jurisdiction to hear timely-filed appeals from “final judgments,

orders, and decrees” of bankruptcy courts within the Tenth Circuit, unless one of the

parties elects to have the district court hear the appeal.3 The Tenth Circuit has concluded

that an appeal from an award of sanctions or attorney’s fees may not be taken until the

amount has been determined because an order granting a motion for fees is not

sufficiently definite to be capable of enforcement and thus is not considered a final 

 2 Objection to Affidavit of Attorney’s Fees and Costs, Adv. No. 10-01189, Docket 

No. 201 (Bankr. D. Colo. Apr. 9, 2015).

3 28 U.S.C. § 158(a)(1), (b)(1), and (c)(1); Fed. R. Bankr. P. 8002, 8005; 10th Cir. 

BAP L.R. 8005-1.

BAP Appeal No. 15-11 Docket No. 20 Filed: 05/01/2015 Page: 3 of 5
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order.4 The court also wanted to avoid piecemeal appeals—one questioning liability for 

fees and a separate one questioning the amount of fees.5

The Surcharge Judgment is not a final judgment because it is not sufficiently 

definite for enforcement absent a quantification of fees. In fact, under the particular facts 

of this case, the Surcharge Judgment has fewer hallmarks of finality than a typical

liability judgment (where fees are likewise yet to be determined) because the section 

506(c) surcharge is not a personal liability of Clark but instead an in rem award that 

attaches to Clark’s share of the sale proceeds. The bankruptcy court has indicated that no 

party shall receive a distribution from the sale proceeds (held by the trustee) until the fee 

issue is resolved and a final distribution is ready to be made to all parties. 

In addition, dismissal will avoid piecemeal appeals here—one by Clark 

questioning the section 506(c) surcharge and a second one questioning the amount of 

fees. Clark’s rights are not prejudiced by this dismissal, as he can file a notice of appeal 

after a final judgment is entered quantifying the fee award, and that appeal can address 

both the surcharge and quantification of fees.6 

 4 Phelps v. Washburn Univ. of Topeka, 807 F.2d 153, 154 (10th Cir. 1986) 

(summary judgment entered dismissing civil rights action; subsequent order awarding—

but not quantifying—fees for defendants was interlocutory). See also Roth v. Green, 123 

Fed.Appx. 871 (10th Cir. 2005) (unpublished) (no jurisdiction over appeal from order 

granting defendants’ motion for Rule 11 sanctions in civil rights suit because district 

court had not entered order determining sanctions amount awarded to certain defendants).

5 Phelps, 807 F.2d at 155.

6 Clark asserts, without explanation or citation to authority, that the Surcharge 

Judgment is also appealable under the collateral order doctrine. That doctrine requires 

that the order or judgment be effectively unreviewable on appeal. Personette v. Kennedy 

(In re Midgard Corp.), 204 B.R. 764, 768 (10th Cir. BAP 1997). As already noted, 

BAP Appeal No. 15-11 Docket No. 20 Filed: 05/01/2015 Page: 4 of 5
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3. Exceptional circumstances do not exist to grant leave to appeal the

interlocutory Surcharge Judgment

This Court also has jurisdiction to hear appeals from interlocutory orders and

judgments with leave of court.7 Leave should be granted only in exceptional cases where 

the appealed order or judgment involves a controlling question of law for which there is 

substantial ground for difference of opinion, and where the immediate resolution of the 

issue will materially advance termination of the litigation.8 

The appealed Surcharge Judgment does not involve a controlling and disputed

question of law, and immediate resolution of the issue will not materially advance this

litigation. Instead, piecemeal appeals (one involving the surcharge and one involving

quantification of fees) will simply serve to complicate what is essentially one dispute.

For the reasons stated above, it is HEREBY ORDERED that:

1. This Appeal is DISMISSED.

2. All deadlines previously set in this appeal are VACATED.

For the Panel

Blaine F. Bates

Clerk of Court

 

Clark’s rights are preserved because he can appeal the final judgment once entered. The 

collateral order doctrine does not apply to the Surcharge Judgment.

7 28 U.S.C. § 158(a)(3). 

8 Phosphorus Ltd. v. Fox (In re Fox), 241 B.R. 224, 232 (10th Cir. BAP 1999).

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