2009 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-20-2009

In Re: Victor Mondelli

Precedential or Non-Precedential: Non-Precedential

Docket No. 08-3905

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2009

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 2009 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"In Re: Victor Mondelli " (2009). 2009 Decisions. Paper 416.

http://digitalcommons.law.villanova.edu/thirdcircuit_2009/416
NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 08-3905

_____________

In re: VICTOR MONDELLI, 

Appellant.

Appeal from the Order of the United States District Court 

for the District of New Jersey

(D.C. No. 08-cv-01582)

District Judge: Hon. William J. Martini

Submitted Under Third Circuit L.A.R. 34.1(a)

 on May 22, 2009

Before: FUENTES, JORDAN, and NYGAARD, Circuit Judges.

(Opinion Filed: October 20, 2009 )

OPINION OF THE COURT

FUENTES, Circuit Judge:

Debtor-Appellant Victor Mondelli appeals the decision of the District Court to

affirm two orders entered by the Bankruptcy Court: one that enforced a mortgage and

lease specifically agreed to by Mondelli; and another that denied a subsequent motion for
2

reconsideration. For the reasons that follow, we will affirm the District Court’s order

dismissing Mondelli’s appeal from the Bankruptcy Court.

I.

Because we write exclusively for the parties, we only discuss the facts and

proceedings to the extent necessary for the resolution of this case. 

In May 2007, the Bankruptcy Court approved a plan whereby Mondelli would

satisfy a significant portion of his outstanding debts by mortgaging property he owned in

Berkeley Heights, New Jersey. Mondelli obtained the loan from Jack Silverman Realty &

Mortgage Co. (“JSRM”) and used the loan proceeds to pay his creditors. Atypically, the

mortgage agreement with JSRM was accompanied by a ninety-nine year ground lease to

another company, Berkeley Realty Partners (“BRP”). The lease expressly states that the

lease’s existence was a condition precedent to JSRM’s grant of the mortgage – JSRM and

BRP share some overlapping ownership interests, and the mortgage from JSRM and the

lease to BRP were clearly part of a package deal.

The lease to BRP contains several provisions relevant to this appeal. First, the

lease gives BRP a right of first refusal if and when Mondelli decides to sell the property. 

Second, the lease contains a “subordination” provision, which requires Mondelli to

subordinate his interest in the property to any subsequent mortgage entered into by BRP

for the purpose of “construction and permanent financing” of the lease. Third, pursuant
3

to the lease, BRP is required to pay property taxes and purchase insurance for the

property. 

The present dispute arose when BRP attempted to obtain a mortgage on the

property, invoking the provision of the lease requiring Mondelli to subordinate his

interest. Mondelli objected and refused to execute the necessary paperwork. BRP and

JSRM then filed a motion with the Bankruptcy Court to enforce the relevant lease

provisions consented to by Mondelli. During the hearing on the motion, Mondelli noted

that BRP had fallen behind on its property tax obligations, thus endangering Mondelli’s

interest in the land. Over Mondelli’s objections, the Bankruptcy Court granted the

motion, noting that Mondelli had agreed to the subordination and characterized

Mondelli’s resistance as something akin to buyer’s remorse. 

Shortly thereafter, Mondelli filed a motion for reconsideration of the decision

enforcing the lease provisions. In this motion, Mondelli supplemented his claim about

the unpaid taxes by arguing that (1) BRP’s right of first refusal constituted a clog on

Mondelli’s equitable right of redemption; (2) BRP could not request subordination

without evidence that the mortgage was for development of the property; (3) BRP had

breached the lease by subleasing a portion of the property; and (4) the Bankruptcy Judge

should have recused himself for bias. The Bankruptcy Court rejected all of these
As noted by the District Court, the Bankruptcy Court did not clearly address

1

Mondelli’s second argument – that subordination was dependent on evidence of

development – perhaps because it did not understand Mondelli to be actually arguing that

point. Regardless, the District Court did address the issue in its Opinion, and we will

review that determination for abuse of discretion. 

4

arguments and dismissed the motion for reconsideration. Mondelli then appealed to the 1

District Court, presenting the same arguments he raised in his earlier submissions. The

District Court affirmed, agreeing with the Bankruptcy Court on the merits of Mondelli’s

appeal, but also noting that Mondelli had defaulted on his obligation under the Federal

Rules of Bankruptcy Procedure to provide the District Court with a complete appellate

record. 

II.

Pursuant to Federal Rule of Bankruptcy Procedure 8006, “[w]ithin 10 days after

filing [a] notice of appeal . . . , [an] appellant shall file with the clerk and serve on the

appellee a designation of the items to be included in the record on appeal and a statement

of the issues to be presented.” Fed. R. Bank. Proc. 8006. As noted by the District Court,

Mondelli filed his notice of appeal on February 4, 2008, but did not file his designation of

the items to be included in the record until April 2, 2008, well past the ten-day filing

limit. Such a violation may constitute a basis for dismissal of the appeal. See Fed. R.

Bank. Proc. 8001(a) (“An appellant’s failure to take any step other than timely filing a

notice of appeal does not affect the validity of the appeal, but is ground only for such

action as the district court or bankruptcy appellate panel deems appropriate, which may
5

include dismissal of the appeal.). Before dismissing Mondelli’s appeal for this procedural

violation, however, the District Court appropriately analyzed Mondelli’s violation in

reference to the factors laid out in Poulis v. State Farm Fire and Casualty Co., 747 F.2d

863 (3d Cir. 1984). 

(1) the extent of the party’s personal responsibility; (2) the

prejudice to the adversary caused by the failure to meet

scheduling orders and respond to discovery; (3) a history of

dilatoriness; (4) whether the conduct of the party or the

attorney was willful or in bad faith; (5) the effectiveness of

sanctions other than dismissal, which entails an analysis of

alternative sanctions; and (6) the meritoriousness of the claim

or defense.

Id. at 868. The District Court addressed each factor and found, in the aggregate, that

dismissal for failure to meet the requirements of Rule 8006 was warranted. 

We have reviewed the District Court’s application of the Poulis factors, and we see

no abuse of discretion. See Emerson v. Thiel College, 296 F.3d 184, 191 (3d Cir. 2002)

(noting standard of review). In terms of the merits of Mondelli’s arguments, we affirm

for the thorough and persuasive reasons noted in the District Court’s opinion. In

particular, we echo the District Court’s analysis of the alleged clogs to Mondelli’s

equitable right of redemption – a contention that Mondelli prioritizes in his briefing. We

do not see how BRP’s right of first refusal in the event that Mondelli chooses to sell the

property in any way compares to the sort of unconditional right to purchase held by the

mortgagee in Humble Oil & Refining Co. v. Doerr, 303 A.2d 898 (N. J. Super. Ct. Ch.

Div. 1973). Quite simply, BRP’s right to repurchase would not affect Mondelli’s ability
6

to redeem his mortgage – it would only affect his efforts to sell the property to a third

party. And, as noted by the District Court, even if the right of first refusal did clog the

equitable right of redemption, the remedy would be to render the provision unenforceable,

not to invalidate the entire lease. Id. at 565. We also reject the argument that the mere

presence of the subordination clause somehow clogs the equitable right of redemption. 

While the subordination clause might affect Mondelli’s ability to obtain other financing at

a favorable rate, the clause does not in any way prevent him from actually redeeming his

mortgage, and thus cannot be considered a clog to that essential right.

In regard to the non-merits factors, we see no clear error in the District Court’s

factual determination that Mondelli was not personally responsible for the procedural

violation; that BRP was somewhat prejudiced by the delay; that Mondelli has a history of

dilatoriness; and that alternate sanctions, such as financial penalties, would be ineffective

given Mondelli’s bankruptcy. Accordingly, we agree with the District Court’s analysis

and balancing of the Poulis factors, and will affirm its dismissal of Mondelli’s appeal.