1 We note that the Bankruptcy Abuse Prevention and Consumer

Protection Act of 2005, Pub. L. 109-8, 119 Stat. 23 (2005)

(continued...)

In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 05-1914

IN RE:

MAURICE J. SALEM,

Debtor-Appellant.

____________

Appeal from the United States District Court 

for the Northern District of Illinois, Eastern Division.

No. 04 C 7823—Blanche M. Manning, Judge.

____________

ARGUED MAY 2, 2006—DECIDED OCTOBER 10, 2006

____________

Before CUDAHY, RIPPLE, and WOOD, Circuit Judges.

WOOD, Circuit Judge. This longstanding family dispute

about the ownership of a rental house has spawned years of

litigation in both this circuit and the Second, occupying

innumerable hours of bankruptcy, district, and circuit court

time. At this point, the question is simple: did the bankruptcy court for the Northern District of Illinois err when it

dismissed the petition of Maurice J. Salem, the debtor, or

when it made various rulings in conjunction with the case?

Defending the court’s judgment is Michael Neshewat, the

creditor and brother of Salem. We conclude, as did the

district court before us, that the bankruptcy court’s actions

were correct, and we therefore affirm.1
2 No. 05-1914

1 (...continued)

(BAPCPA), was enacted April 20, 2005, and took effect after the

events in this case. See BAPCPA § 1501 (provisions apply 180

days after enactment).

I

Briefly put, the current bankruptcy proceeding arose out

of litigation between the brothers that took place in the

state courts of New York. In 1999, Neshewat obtained a

state-court judgment in the amount of $166,884.86 against

his brother; that judgment was recorded against a rental

house Salem owned located at 7 Gellatly Drive, Wappinger

Falls, New York. Salem responded with a Chapter 7

bankruptcy petition in New York in 2000, the adjudication

of which involved two appeals to the Southern District of

New York and the Court of Appeals for the Second Circuit.

One outcome of those proceedings was a holding that

Neshewat’s judgment against Salem is nondischargeable.

See In re Salem, 290 B.R. 479, 485-86 (S.D.N.Y. 2003),

aff’d 94 Fed. Appx. 24 (2d Cir. 2004) (unpublished).

Following the termination of his Chapter 7 petition in

New York, Salem, now identifying himself as an Illinois

resident, filed a Chapter 13 petition in the Northern

District of Illinois. The plan he offered was a “zero percent

plan” that made no provision for payments to unsecured

creditors and treated Neshewat’s judgment as unsecured.

Neshewat objected, claiming that Salem had sufficient

equity in the Gellatly Drive house to permit Neshewat’s

judgment to attach to it, thereby making the claim secured

but unaccounted for in the plan. Within the Chapter 13

petition proceedings, Salem filed a motion to “convert” his

Chapter 7 petition from New York into his Illinois Chapter

13 case, which the bankruptcy court denied. Then, in a

separate decision months later, the bankruptcy court found

that the house had sufficient value to make Neshewat’s
No. 05-1914 3

claim secured. It therefore rejected the Chapter 13 plan for

failing to account for the secured claim and dismissed the

case. We explain more about the progression of this case

below, as needed.

II

Before proceeding to the merits, we must address a

question of appellate jurisdiction noticed by the panel. See

Doctor’s Assocs., Inc. v. Duree, 375 F.3d 618, 621-22 (7th

Cir. 2004); Wingerter v. Chester Quarry Co., 185 F.3d 657,

660 (7th Cir. 1998). This court has jurisdiction over appeals

from final judgments of the district courts. 28 U.S.C. § 1291.

In the bankruptcy context, “[t]he general rule is that a court

of appeals has jurisdiction over a bankruptcy appeal only if

the bankruptcy court’s original order and the district court’s

order reviewing the bankruptcy court’s original order are

both final.” In re Rimsat, Ltd., 212 F.3d 1039, 1044 (7th Cir.

2000). A judgment affirming a bankruptcy court’s decision

to deny confirmation of a Chapter 13 plan and dismiss a

case is typically a final order of the bankruptcy court, as

there are no proceedings left to occur. However, procedural

oddities within this case might lead one to think that this

appeal comes too late. We therefore explain here why we

have concluded that the judgment issued March 30, 2005,

by the district court is final.

We begin with the New York cases; we take judicial notice

of these dockets and opinions. See, e.g., Radaszewski ex rel.

Radaszewski v. Maram, 383 F.3d 599, 600 (7th Cir. 2004)

(taking judicial notice of administrative findings);

Menominee Indian Tribe of Wis. v. Thompson, 161 F.3d 449,

456 (7th Cir. 1998) (“Judicial notice of historical documents,

documents contained in the public record, and reports of

administrative bodies is proper.”)

On April 12, 1999, Salem filed an action under 42 U.S.C.

§§ 1983 and 1985 against several defendants, including
4 No. 05-1914

Neshewat; Neshewat’s attorney, Paul Goldstein; and named

public officials. Salem’s basic contention was that these

individuals abused the judicial process in the litigation

resolved by the default judgment that led in turn to the lien

on the Gellatly Drive house. Salem separately filed a

Chapter 7 petition in the Southern District of New York on

February 23, 2000. On May 2, 2000, Salem filed an adversary proceeding complaint as part of his bankruptcy case,

seeking injunctive relief and damages. See Salem v. Paroli,

260 B.R. 246, 252 (S.D.N.Y. 2001). The bankruptcy court

dismissed the adversary complaint. After Salem appealed

to the district court, the court consolidated the bankruptcy

case with the civil rights suit. It affirmed the bankruptcy

court’s decision, id. at 256-57, and dismissed the civil rights

claim under the Rooker-Feldman doctrine, which divests

federal district and appellate courts of subject matter

jurisdiction over a case if the result of the case could be the

reversal or modification of a state court judgment, id. at

253-55. Salem appealed, and the Second Circuit affirmed.

79 Fed. Appx. 455 (2d Cir. 2003) (unpublished). Meanwhile,

the Chapter 7 petition continued, and the bankruptcy court

held on August 8, 2002, that Neshewat’s default judgment

was not dischargeable. The district court affirmed on March

5, 2003, see 290 B.R. at 485-86, and the Second Circuit

affirmed on April 8, 2004, see 94 Fed. Appx. 24. The

mandate issued May 4, 2004, and was received by the

district court on May 11, 2004. According to the bankruptcy

court’s docket, that court took no action after March 11,

2003, when the case closed, and March 13, 2003, when a

final decree issued.

While Salem’s second appeal was pending before the

Second Circuit, his wife Clodia filed a Chapter 7 petition in

the Northern District of Illinois, which was docketed at No.

03-25681 and assigned to Bankruptcy Judge Sonderby.

Salem, who is an attorney, represented his wife. The

dispute in that case also related to whether the property on
No. 05-1914 5

Gellatly Drive would be sold. In the adjudication of Clodia’s

petition, the bankruptcy court ordered the property auctioned off.

In the meantime, in November 2002, Neshewat sued

Salem in the Supreme Court of New York seeking to set

aside as fraudulent Salem’s conveyance of a half-interest in

the Gellatly Drive house and a car to his wife. Salem

removed that case to federal court, and it was stayed during

the proceedings of the bankruptcy court in Illinois in both

Salems’ cases. On April 8, 2005, the district court for the

Southern District of New York noted that although the

court in Clodia’s Illinois bankruptcy case ordered the sale

of her interest in the Gellatly Drive house, it never addressed whether the conveyances were fraudulent and thus

whether she had any interest. The New York district court

held that the conveyances were indeed fraudulent.

Neshewat v. Salem, 365 F. Supp. 2d 508, 518-21 (S.D.N.Y.

2005). The appeal of that decision is pending before the

Second Circuit. The court also sanctioned Salem for engaging in frivolous litigation, enjoining him “from filing or

prosecuting, without leave of this Court, further actions or

proceedings in the federal courts against Neshewat or his

counsel . . . seeking review of or relief from the default

judgment entered against him in New York State Supreme

Court.”

The sale of the real property itself (as opposed to particular interests in it) never took place because of Salem’s own

Chapter 13 petition, which he filed in Chicago the day after

the district court in New York received the mandate from

the Second Circuit affirming dismissal of his Chapter 7

petition. (We note in passing that although it appears that

Salem was cutting it close, he did not pursue relief under

Chapter 7 and Chapter 13 simultaneously in his New York

and Illinois petitions. When a Chapter 13 petition is filed

after a Chapter 7 petition, it has been nicknamed a Chapter

20 filing. See generally Johnson v. Home State Bank, 501
6 No. 05-1914

U.S. 78 (1991) (permitting a Chapter 13 filing after a

Chapter 7 case had closed). Salem’s petitions did not

overlap, but rather were (barely) successive. “Simultaneous”

Chapter 20 petitions are barred in this Circuit, see In re

Sidebottom, 430 F.3d 893, 895 (7th Cir. 2005).) On May 12,

2004, Salem’s Chapter 13 petition was docketed as Case No.

04 B 18739. Salem paid the docketing fee, then $194, for a

Chapter 13 petition. In addition to new Chapter 13 petition,

Salem filed a separate motion to “convert” his closed New

York Chapter 7 proceeding into the Illinois Chapter 13

proceeding. When Salem’s petition was filed, it was assigned to Judge Sonderby, probably because of Bankruptcy

Local Rule 1015.1A(1), which provides that “[t]wo or more

cases are related if . . . the debtors are husband and wife.”

On June 16, 2004, Judge Sonderby denied the motion to

convert the New York Chapter 7 petition into the case

before her, reasoning that the New York case was both

closed and not within her district. No notice of appeal was

filed within 10 days of that order, nor was there a request for an interlocutory appeal filed with the district

court at that time. See FED. R. BANKR. P. 8001, 8002, 8003.

We consider the appealability of the denial of conversion

separately below. Judge Sonderby did not dismiss the

Chapter 13 petition or issue a final judgment at this point.

As the case proceeded, it appears to have been transferred

for some reason, undocumented in the record, from Judge

Sonderby to Chief Bankruptcy Judge Wedoff. Chief Judge

Wedoff both conducted the hearing and issued the judgment

of the bankruptcy court. Since neither party raised issues

about the transfer (which appears to have caused some

confusion from time to time), our only concern is to ensure

that this was one singular case with one final order, rather

than two separate cases—potentially, the conversion of the

New York Chapter 7 (rejected by Judge Sonderby) and the

filing of the Illinois Chapter 13 (rejected by Chief Judge
No. 05-1914 7

Wedoff). We conclude, based on a number of indicia in the

record, that there has never been more than one case here.

Salem paid only one filing fee; the case proceeded under

only one case number; and the denial of Salem’s motion to

convert the Chapter 7 petition from New York into the

Chapter 13 petition appears no different from a ruling on

any other interlocutory motion. It follows from this conclusion that the bankruptcy court’s December 1, 2004, order

dismissing the case and denying confirmation of Salem’s

Chapter 13 plan was a final judgment. This triggered

Salem’s right to appeal to the district court under 28 U.S.C.

§ 158(a)(1). Similarly, the district court’s order affirming

the bankruptcy court’s order was final, reflecting the

termination of the bankruptcy case. With this predicate, our

appellate jurisdiction over the case, which encompasses

both challenges to the final judgment and challenges to

various interlocutory orders, is also proper. See 28 U.S.C.

§ 158(d)(1).

III

Salem argues that the bankruptcy court—and the district

court in affirming it—made several errors in the handling

of his Chapter 13 petition. We review legal issues in a

bankruptcy case de novo and factual findings for clear error.

See In re Heartland Steel, Inc., 389 F.3d 741, 743-44 (7th

Cir. 2004). Essentially, our review is the same as that

performed by the district court. See In re Midway Airlines,

Inc., 383 F.3d 663, 668 (7th Cir. 2004).

A. Chapter 7/Chapter 13 Conversion

1. Jurisdiction

After filing his initial Chapter 13 petition before the

bankruptcy court in the Northern District of Illinois, Salem
8 No. 05-1914

filed a motion to convert his Chapter 7 petition from New

York into the Chapter 13 petition in Illinois pursuant to 11

U.S.C. § 706(a). (This is Salem’s terminology; we do not

wish to be understood as endorsing the idea that “conversion” is the right word to use for a request (1) to transfer a

case from one bankruptcy court to another, and then (2) to

convert the case from Chapter 7 to Chapter 13. We are

merely reporting what it is that Salem asked the bankruptcy court in Chicago to do.) At a hearing on the motion,

Judge Sonderby questioned how the bankruptcy court could

have jurisdiction over “a closed New York case.” Before

anyone could think of converting, she held, the Chapter 7

case had to be “an open, pending, viable case in this district.” Arguing that the bankruptcy court erred, Salem

takes the extreme position that a debtor has an absolute

right to convert a Chapter 7 petition to a Chapter 13

petition at any time, even after the Chapter 7 proceeding is

closed, and even though it is not just in another district, but

is in another state and another circuit.

Before we can reach the merits of this issue, we must

decide whether it is properly before this court; that in turn

depends on whether it was properly before the district

court. “A court of appeals’ jurisdiction over a district court’s

review of a bankruptcy court order can only be based on a

proper exercise of the district court’s jurisdiction. Whether

the district court had jurisdiction over any particular

matter is a question of law, reviewable de novo.” In re

Vlasek, 325 F.3d 955, 960 (7th Cir. 2003) (internal citations

omitted).

Neshewat argues that Salem forfeited the right to appeal

this issue to the district court and consequently to this

court when he did not file a notice of appeal within 10 days

of Judge Sonderby’s order rejecting his “conversion”—

a move he thinks was required by Federal Rule of Bankruptcy Procedure 8002. In the proper circumstances, this

rule is more than merely procedural; it is jurisdictional. See
No. 05-1914 9

In re Bond, 254 F.3d 669, 673 (7th Cir. 2001). If, for example, Salem had failed to file a notice of appeal within 10

days of the final order dismissing the petition, and he could

not show “excusable neglect,” then the district court would

have had no power to hear Salem’s appeal. See FED. R.

BANKR. P. 8002(c)(2) (permitting short extension of time for

“excusable neglect”). See also Matter of Schultz Mfg.

Fabricating Co., 956 F.2d 686, 689 (7th Cir. 1992) (finding

no district court jurisdiction in the absence of a timely

notice of appeal from the bankruptcy court).

But the order refusing to convert the Chapter 7 proceedings from New York into the Chapter 13 proceedings in

Illinois was not a final order. It did not bring the Illinois

Chapter 13 petition to an end; virtually the entire dispute

remained, involving the same parties and the same issues.

Even though the concept of finality is relaxed in the

bankruptcy context, see In re Jartran, Inc., 886 F.2d 859,

861-62 (7th Cir. 1989), this order was interlocutory in the

purest sense of the word. See Caldwell-Baker Co. v. Parsons, 392 F.3d 886, 888 (7th Cir. 2004) (holding that, where

an adversary proceeding continues, “[t]he order . . . is no

more a ‘final decision’ than an order denying summary

judgment or denying a request for additional discovery; the

litigation proceeds and the issue will be reviewed if it turns

out to make a difference to an order that is independently

appealable”). See also In re Young, 237 F.3d 1168, 1172-73

(10th Cir. 2001) (holding that the conversion of a Chapter

7 petition to a Chapter 13 petition was not final until the

plan itself was approved); Matter of Kutner, 656 F.2d 1107,

1111-12 (5th Cir. 1981) (holding that an order striking a

standing trustee’s motion to convert a Chapter 13 petition

to a Chapter 7 is interlocutory, not final). Normally, a party

does not have an absolute right to take an interlocutory

appeal from the bankruptcy court. (There are limited

exceptions, but they do not apply here. See 28 U.S.C.

§ 158(a)(2).) Instead, the party must seek the leave of the

district court. See 28 U.S.C. § 158(a)(3).
10 No. 05-1914

The question here is whether the failure to file a notice

and to seek leave to file an interlocutory appeal, as required

by Federal Rules of Bankruptcy Procedure 8001-03, also

prevents a district court from addressing the interlocutory

order upon final appeal, when a proper notice of appeal was

filed following the final judgment of the bankruptcy court.

As a general rule, the failure to file an interlocutory appeal

does not waive the ability to have an issue reviewed upon

final appeal. See Rivera-Domenech v. Calvesbert Law Offices

PSC, 402 F.3d 246, 249 n.2 (1st Cir. 2005); National Union

Elec. Corp. v. Wilson, 434 F.2d 986, 988 (6th Cir. 1970). To

the contrary, one of the purposes of the final judgment rule

is to permit consolidated review of all interlocutory decisions that still matter. One reason for denying permission

to take an interlocutory appeal, or for passing up the

opportunity to ask for such an appeal, is because many

issues may be effectively reviewed on final appeal. See

Matter of Cash Currency Exchange, Inc., 762 F.2d 542, 547

(7th Cir. 1985).

This court took exactly that tack in Vlasek, 325 F.3d at

960-61. On April 30, 1999, the bankruptcy court issued an

order refusing to dismiss Vlasek’s petition; later, on May 25,

2001, the court issued another order closing the estate and

discharging the Trustee. Vlasek filed a notice of appeal from

the latter order, and on appeal he sought (apparently for

the first time) to challenge the earlier order. The Trustee

argued that the April 30, 1999, order was “final” and

therefore that the notice of appeal was untimely as it

related to that order. In deciding the case, we reasoned that

“denials of motions to dismiss are generally not final orders

even in the bankruptcy context.” Id. at 960 (quoting

Jartran, 886 F.3d at 864). Since the order was not final,

there was no appeal as of right to the district court pursuant to 28 U.S.C. § 158(a). Although we eventually found

that most of Vlasek’s appeal was moot for other reasons, the

notice of appeal from the May 25, 2001, order was sufficient
No. 05-1914 11

to bring the entire case before the district court, and then

this court.

Furthermore, although we note that Salem’s notice of

appeal to the district court identified only the December 1,

2004, order dismissing the case and not the earlier order

refusing conversion, we conclude that the conversion

issue was properly before the district court. A notice of

appeal under Rule 8001(a) of the bankruptcy rules must “(1)

conform substantially to the appropriate Official

Form, [and] (2) contain the names of all parties to the

judgment, order, or decree appealed from and the names,

addresses, and telephone numbers of their respective

attorneys.” In Fadayiro v. Ameriquest Mortgage Co., 371

F.3d 920 (7th Cir. 2004), we observed that the reference

in that rule was “to Official Bankruptcy Form 17, which . . .

has spaces for the docket number of the case, what chapter

of the Bankruptcy Code the case involves, and the date of

entry of the order being appealed from.” Id. at 922. We went

on to speculate, “We are doubtful that a notice of appeal

that failed to indicate the order appealed from could

nonetheless be thought to comply with the rule, . . . for how

could a notice that omitted such essential information be

thought to ‘conform substantially’ to the official form?” Id.

(internal citation omitted).

That, however, is not this case. The particular order

appealed from—the final order of December 1, 2004—was

identified in Salem’s notice of appeal. The purpose of

identifying the order appealed from is so that the courts

reviewing the case can determine whether, for example, the

appellant met the 10-day deadline of Rule 8002 and

whether the order is final (permitting appeal as of right) or

interlocutory (potentially requiring leave of court). Salem

was not required in that notice to identify every earlier

decision, including the evidentiary and discovery rulings we

discuss below, that he wanted to challenge. His notice of

appeal was adequate.
12 No. 05-1914

2. Merits

The bankruptcy code provides for the conversion of a

Chapter 7 petition to a Chapter 11, 12, or 13 petition “at

any time”; it also says that a waiver of that right is “unenforceable.” 11 U.S.C. § 706(a). Salem understands this

language literally: “any time” means any time, in his view,

no matter what judicial actions have occurred, and thus the

district court erred in upholding the denial of his motion to

convert. Unfortunately, matters are not quite that simple.

Indeed, the Supreme Court recently granted certiorari in In

re Marrama, 430 F.3d 474 (1st Cir. 2005), cert. granted 126

S. Ct. 2859 (June 12, 2006), to decide “whether the right to

convert a chapter 7 bankruptcy case to another chapter can

be denied notwithstanding the plain language of the statute

and the legislative history.” 2006 WL 295220 (petition for

certiorari filed Jan. 30, 2006). The First Circuit in Marrama

found that “at any time” meant “simply [ ] that the debtor

may seek to convert at any time during the pendency of the

bankruptcy case” and that the statute does not prevent a

court from refusing to convert based on the debtor’s own

“willful misconduct, such as an intentional abuse of the

bankruptcy process.” 430 F.3d at 479 (emphasis added). See

also In re Finney, 992 F.2d 43, 45 (4th Cir. 1993) (holding

that bad faith in a § 706(a) conversion permits the court to

consider sua sponte whether the petitioner engaged in

abuse of process under 11 U.S.C. § 105(a)). In contrast, a

bankruptcy appellate panel for the Tenth Circuit and the

Fifth Circuit have both held that the right to convert is

absolute and may be exercised even after the debtor

received a discharge under Chapter 7. See generally In re

Miller, 303 B.R. 471 (10th Cir. BAP 2003); In re Pequeno,

126 Fed. Appx. 158 (5th Cir. 2005) (unpublished).

Fortunately, we need not choose sides in this circuit split

nor await the Supreme Court’s resolution in order to resolve

this appeal. Regardless of whether conversion may occur “at

any time” without any exceptions for bad behavior or other
No. 05-1914 13

circumstances, it is clear that the conversion cannot occur

in a district other than the one where the case is pending

without a proper transfer under 28 U.S.C. § 1412. Salem

admits that he never sought to transfer his Chapter 7 case

from the bankruptcy court in New York to the Northern

District of Illinois. Federal Rule of Bankruptcy Procedure

1014(b) provides specific transfer procedures that apply

when two petitions involving the same debtor are filed in

different courts. In such cases, “on motion filed in the

district in which the petition filed first is pending and after

hearing on notice to the petitioners, the United States

trustee, and other entities as directed by the court, the

court may determine, in the interest of justice or for the

convenience of the parties, the district or districts in which

the case or cases should proceed” (emphasis added). This

rule suggests that Salem should have requested a transfer

from the Southern District of New York. The fact that the

case there was finished one day before this one was filed

does not relieve him of that obligation. Since he chose not

to file a motion before either court to transfer the two

petitions to the same venue, there was nothing related to

the Chapter 7 case properly before the bankruptcy court in

Illinois upon which it could have acted. See also FED. R.

BANKR. P. 1015(a) (“If two or more petitions are pending in

the same court by or against the same debtor, the court may

order consolidation of the cases.”).

B. Trial Rulings

We need not tarry on Salem’s remaining points, all of

which relate to the bankruptcy court’s management of the

case. For the reasons we explain briefly below, the court did

not abuse its discretion nor did it make any errors of law in

the course of the proceedings.
14 No. 05-1914

1. Expert Appraisal Testimony

The bankruptcy court permitted Neshewat’s expert

appraiser to testify over Salem’s objection. In passing, the

court commented that the principles from Daubert v.

Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993),

apply “with less force in the context of a bench trial” and

reasoned, “I can accept the evidence. And if I find that it’s

not well grounded by experience and expertise in the

witness, I can ignore that. The gatekeeping function that

Daubert talks about is most pointedly at issue in a jury trial

where a jury might be misled by an expert who doesn’t have

sufficient qualifications.”

Salem seizes on this remark and urges us to find that the

court erred as a matter of law by failing to hold the expert

to the standards codified in Federal Rule of Evidence 702

and by finding those standards inapplicable to a bench trial.

He also contends that for the proffered expert to be an

expert in evaluating the worth of a property the expert

necessarily must have expertise in making or estimating

the cost of repairs because, in his view, the value of the

house is significantly reduced because of the need for

extensive repairs.

Salem’s argument misses the bankruptcy court’s point. It

is not that evidence may be less reliable during a bench

trial; it is that the court’s gatekeeping role is necessarily

different. Where the gatekeeper and the factfinder are one

and the same—that is, the judge—the need to make such

decisions prior to hearing the testimony is lessened. See

United States v. Brown, 415 F.3d 1257, 1268-69 (11th Cir.

2005). That is not to say that the scientific reliability

requirement is lessened in such situations; the point is only

that the court can hear the evidence and make its reliability

determination during, rather than in advance of, trial.

Thus, where the factfinder and the gatekeeper are the

same, the court does not err in admitting the evidence
No. 05-1914 15

subject to the ability later to exclude it or disregard it if

it turns out not to meet the standard of reliability established by Rule 702. 

We see no error in the court’s conclusion that Neshewat’s

expert was entitled to present his testimony. He testified

that he had been certified by the State of New York as an

appraiser for 15 years, that he specialized in residential

appraisals, and that he had performed more than 4,000

appraisals, the majority of which were in the same county

as the Gellatly Drive house. The purpose of an appraisal is

to determine the market value of the existing house, after

all, not to determine how much it would cost to change it,

either by repairs or otherwise. Many properties are sold in

which the appraisal is tied wholly to the value of the land

itself, where it is expected that the building on the property

will be demolished. Furthermore, the bankruptcy court is

quite capable of separating out what the witness is an

expert in and what he is not. The testimony on the market

value of the house was important for determining the

amount of Salem’s equity in the house. This case is light

years away from Ancho v. Pentek Corp., 157 F.3d 512 (7th

Cir. 1998), in which the district court properly excluded a

mechanical engineer’s expert testimony from a case about

an accident in a plant involving moving conveyer belts.

There, the engineer possessed “no expertise in plant design

and [ ] he had failed to observe the transfer car in operation, much less even take the time to visit the accident site.”

Id. at 516. In this case, the expert appraiser was experienced, had visited the house twice, made appraisals on the

standard form used by Fannie Mae, and had used quantitative sales comparison analysis to help determine the market

value of the house. The bankruptcy court was well within

bounds to permit this testimony. 
16 No. 05-1914

2. Discovery

Salem also argues that the bankruptcy court erred in

denying his motion seeking to exclude Neshewat’s evidence

on the basis that Neshewat failed to exchange witness lists

and exhibits by November 24, 2004, and to file witness and

exhibit lists with the court, as required by the amended

trial order. He contends that this prejudiced him by not

permitting him to impeach the appraiser. 

In order to prevail, Salem must show both that the

bankruptcy court abused its discretion, Sims v. GC Services

L.P., 445 F.3d 959, 963 (7th Cir. 2006), and that the ruling

worked “to his actual and substantial prejudice,” Walker v.

Mueller Indus., Inc., 408 F.3d 328, 334 (7th Cir. 2005). He

has done neither. The bankruptcy court had a concrete

problem to address, and it adopted a reasonable solution.

Salem claimed that he never received the appraisals and

other documents and that he did not have the expert

witness’s name so as to be able to investigate him.

Neshewat pointed out that the same appraiser was used for

two appraisals, one in February and one in October, that

the appraiser’s name was given to Salem so that the

appraiser could access the house, and that the appraisals

were timely tendered. The other exhibits Neshewat wanted

to use were Salem’s own schedules and plans from the

bankruptcy proceedings in both Illinois and New York.

Neshewat also proffered a fax transmission sheet as proof

that he had complied with the bankruptcy court’s order to

exchange exhibits by November 24.

The bankruptcy court docket confirms that Neshewat filed

a list of witnesses on November 24, 2004, that was modified

on November 29, 2004, to include exhibits. Salem’s complaint about his purported lack of knowledge about the

identity of the expert rings hollow, because the witness list

was filed when it was due. Moreover, given that Neshewat

used the same expert to perform both appraisals and
No. 05-1914 17

arranged for him to be given access to the house in October

2004, Salem had some familiarity with the expert and could

not have been prejudiced as his identity was not a surprise.

Even if Salem might have preferred a different course

of proceedings, he has not shown prejudice from any of the

judge’s decisions. The trial transcript demonstrates that

Neshewat proffered only two significant exhibits—the two

appraisals by his expert, which were on standard forms.

This is not a case with thousands of pages of evidence.

Salem says that with more time he would have had his own

appraiser review the appraisals, but he proffers no evidence

indicating that they have done so and found them to be

flawed. He cross-examined the witness on the appraisals

and the differences between them and on the appraiser’s

lack of expertise regarding repairs. The only limitation

placed on the cross-examination came when Salem engaged

in what can only be described as a classic fishing expedition, in an attempt to link the expert to various people who,

he alleges, conspired against him in New York. Any trial

court would be well within its discretion to put an end to

such a line of questioning. The bankruptcy court did not

abuse its discretion in its management of the discovery

process.

3. Exclusion of Two Documents

Salem argues that the bankruptcy court erred by excluding two documents: a 1992 complaint against the builder of

the house, and a decision by a state court dismissing that

complaint. The bankruptcy court found this evidence

irrelevant: “What happened in your litigation with the

developer is not important. The question is what the

condition of the house is right now, regardless of who was

responsible for it.” Salem thinks that the evidence would

have bolstered his own testimony about the defects and

thus the absence of value in the house. We review the
18 No. 05-1914

exclusion of evidence for an abuse of discretion. Goodman

v. Ill. Dept. of Financial and Professional Regulation, 430

F.3d 432, 438-39 (7th Cir. 2005). This evidence, at most,

sheds light on the condition of the house prior to 1992. The

court had before it the more recent appraisals of two

different experts as well as testimony about the condition

of the house. The excluded documents were quite unnecessary.

4. Burden of Proof/Ultimate Valuation

The bankruptcy court held that the debtor in a Chapter

13 case “has the burden of establishing each of the elements

for confirmation of a plan and if there is an objection, it

puts the debtor to his proof of each of those elements.” The

bankruptcy court also ultimately held that Salem had

equity in the property, which meant that Neshewat’s

default judgment from New York was secured rather than

unsecured. Salem argues that the bankruptcy court erred

by placing the burden of proof on him to prove an absence

of equity in the house. Instead, he contends, Neshewat

should have been required to produce some evidence before

the burden of proof shifts back to him. He also argues that

the court clearly erred in its ultimate conclusion on the

value of the house.

The allocation of the burden of proof has been the subject

of some debate. Federal Rule of Bankruptcy Procedure

3001(f) makes a proper proof of claim with the accompanying documents “prima facie evidence of the validity and

amount of the claim.” The Supreme Court observed in

Raleigh v. Illinois Department of Revenue, 530 U.S. 15

(2000), that “the burden of proof is an essential element of

the claim itself; one who asserts a claim is entitled to the

burden of proof that normally comes with it.” Id. at 21. “The

legislative history indicates that the burden of proof on the

issue of establishing claims was left to the Rules
No. 05-1914 19

of Bankruptcy Procedure.” Id. at 22 n.2. The Court observed

that the rules are “silent on the burden of proof for claims”;

although Rule 3001(f) provides that the claim itself is prima

facie evidence, the Rules are silent as to what to do when a

trustee, or in this case the debtor, “disputes a claim.” Id.

This open question has two obvious potential answers. One

is that the submission of the claim itself, with proper

supporting documentation, shifts the burden of production

to the debtor to provide evidence why the claim is invalid,

leaving the burden of persuasion with the creditor. The

alternate is that once the claim is filed, both the burdens of

production and persuasion shift to the debtor.

Interesting though the question may be, we need not

resolve it here, because in the end it makes no difference.

Either way, the bankruptcy court did not clearly err in

finding equity in the Gellatly Drive house. See, e.g., In re

Schoonover, 331 F.3d 575, 577 (7th Cir. 2003). With his

initial objection, Neshewat produced records showing that

the judgment was attached to this house, as well as evidence about the value of the house including Salem’s own

bankruptcy schedule valuing the house at $170,000. Thus,

under Rule 3001(f), Neshewat made a prima facie case.

Then, at the hearing, Neshewat presented the expert

testimony of his appraiser, while Salem presented his. The

court evaluated all the testimony before coming to an

ultimate valuation. Its conclusion, in turn, established

that Neshewat’s judgment was secured.

IV 

This court on April 8, 2005, granted a stay of the bankruptcy court’s order dismissing this case. We now AFFIRM

the judgment of the district court affirming the dismissal of

the petition by the bankruptcy court. We also VACATE the

stay to permit the bankruptcy court’s dismissal to take

effect.
20 No. 05-1914

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—10-10-06