UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

IN RE LIVEMERCIAL AVIATION )

HOLDING, LLC ) Bkrtcy. Case. No.: 10-20051

Debtor. ) Adv. Case No.: 12-2168-JPK 

___________________________________ )

)

CPA WAREHOUSE & JOHNNY )

MATHIS, )

Appellants/Defendants, )

)

v. ) Cause No. 2:14cv187

 )

DANIEL L FREELAND, CHAPTER 7 )

TRUSTEE, )

Appellee/Plaintiff. )

)

OPINION AND ORDER

This is a bankruptcy appeal in which the appellants, Johnny Mathis and CPA

Warehouse, seek leave to file an interlocutory appeal of the bankruptcy court’s denial of

their motion to dismiss in the adversary proceeding brought against them by the

bankruptcy trustee. For simplicity sake, I will refer to both appellants as “CPA

Warehouse” unless context requires otherwise. For the foregoing reasons, the CPA

Warehouse’s Motion for Leave to Appeal will be denied. [DE 5]. 

The procedural history on this case is a little complicated, and because of that, I find

myself in the undesirable position of having to deny a motion for leave to appeal where

both the appellants’ opening brief and appellee’s response brief have already been filed. 

 Here’s the history: on March 26, 2014, the bankruptcy court issued an order denying
CPA Warehouse’s motion to dismiss an adversary action filed by the Trustee in a Chapter

7 bankruptcy proceeding (In Re Livemercial Aviation Holding, LLC, No. 10-20051). On June

2, 2014, CPA Warehouse filed a notice of appeal in this Court. [DE 1.] At the same time,

CPA Warehouse filed a second notice of appeal regarding the same motion to dismiss

under a separate case number (2:14cv186). On June 16, 2014, CPA Warehouse filed its

Motion for Leave to Appeal [DE 5] in both the present case and the -186 case, identifying

the same issues on appeal. Two days later, CPA Warehouse requested an extension of time

to file its opening brief. [DE 6.] I did not rule on that motion as it would not be prudent to

grant or deny the request on an appeal that I had not yet ruled was properly before me. 

Shortly thereafter, on June 19, 2014, Appellee Trustee Daniel Freeland filed his response to

the motion for leave to appeal. [DE 7] CPA Warehouse did not file a reply. Instead, on

June 30, 2014 (the date it requested an extension), CPA Warehouse filed Appellants’

Opening Brief [DE 8]. A few days later, the parties agreed to dismiss the -186 appeal, but

the present appeal still remained. On July 14, 2014, Freeland filed his response brief to CPA

Warehouse’s motion for leave to appeal. [DE 9] 

Accordingly, because of the confusion regarding the relationship between and status

of the two appeals and the relatively short briefing schedule set forth by Rule 8009(a) of the

Federal Rules of Bankruptcy Procedure, I am only now in the position of denying CPA

Warehouse’s leave to appeal. It is unfortunate that I am doing so after the parties have

already expended effort in submitting appellate briefs to the Court.

In general, a denial of a motion to dismiss – whether in the bankruptcy context or

otherwise – is not considered to be a final, appealable order. In re Jartran, Inc., 886 F2d 859,
864 (7th Cir. 1989). Under 28 U.S.C. § 158(a)(3), however, I have discretion to hear this

matter as an interlocutory appeal. And although bankruptcy courts are not required to

certify an interlocutory appeal before a party may file a motion for leave to appeal as nonbankruptcy courts are required to do, In re Jartran, 886 F.2d at 865-66, a motion for leave to

file an interlocutory appeal in the bankruptcy context is still evaluated using the same

Section 1292(b) standards as non-bankruptcy cases. See Gouveia v. I.R.S., 228 B.R. 412, 412

(N.D.Ind. 1998); In re IFC Credit, Nos. 10C256, 10C719, 10C749, 2010 WL 1337142 at *2

(N.D.Ill. March 31, 2010). Those standards are that “there must be a question of law, it must

be controlling, it must be contestable, and its resolution must promise to speed up the

litigation.” Ahrenholz v. Bd. of Trustees of University of Illinois, 219 F.3d 674, 675 (7th Cir.

2000) (emphasis original). “Unless all these criteria are satisfied,” I can’t take the appeal. 

Id. at 676 (emphasis original).

The basic problem with this appeal is that it doesn’t involve a contestable question

of law, i.e. a question of law where there is substantial ground for difference of opinion. 

See Ahrenholz, 219 F.3d at 675; In re IFC Credit, 2010 WL 1337142 at *2. CPA Warehouse

moved to dismiss Freeland’s adversary proceeding to avoid a fraudulent transfer relating

to Livemercial’s Chapter 7 Bankruptcy. CPA Warehouse argued that Freeland’s action was

time-barred under 11 U.S.C. § 546(a) which requires that an adversary proceeding must be

filed either two years after the filing of the bankruptcy petition or one year after the

appointment of the trustee (whichever is later, so long as that appointment occurred within

two years of filing). According to CPA Warehouse, Freeland was not appointed as the

permanent trustee until more than two years after filing, so he could not reap the benefit
of the one-year extension, and therefore his action was time-barred when it was filed more

than two years after the bankruptcy petition. Freeland argued that a one-year extension

applied because he was appointed as a temporary trustee during the two-year time period,

triggering the one-year extension, and therefore his action was not time-barred since he

filed within the one-year extension period.

The bankruptcy court attacked the problem from a different angle. The judge found

that although Mr. Freeland’s action ordinarily would be time-barred under the statute

according to the recent Seventh Circuit decision In re Draiman, 714 F.3d 462 (7th Cir. 2013),

that case also explicitly stated that Section 546(a) is subject to equitable tolling (a point

raised by Freeland during briefing on the issue). (Order re Mot. to Dismiss at 10.) The

bankruptcy court found that the debtor repeatedly failed to appear at meetings, repeatedly

failed to turnover requested documents, and that more specifically, Appellant Johnny

Mathis (the principal of both the debtor Livemercial and the defendant CPA Warehouse) 

“did not provide clear answers” as to the transaction at issue. (Id. at 5-8; 14.) The

bankruptcy court held that these actions hampered Freeland’s ability to uncover the

grounds for the adversary proceeding, so equitable tolling was appropriate in this case. 

(Id. at 16-17.)

Contrary to CPA Warehouse’s claim, therefore, the bankruptcy court did apply the

controlling law in this matter – In re Draiman – it just did so in a way that CPA Warehouse

doesn’t agree with. But that’s not enough. If a mere disagreement in how the law is

applied to the facts of a particular case was all that was needed for an interlocutory appeal,

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every single denial of a motion to dismiss would present grounds for interlocutory appeal. 

(See Ahrenholz, 219 F.3d at 676 for a similar discussion regarding denials of summary

judgment, concluding “[a] denial of summary judgment is a paradigmatic example of an

interlocutory order that normally is not appealable.”) That can’t be right; such a rule

would render both Section 1292(b) and Section 128(a) meaningless, as these actions would

be essentially automatically appealable. See id. at 676. What CPA actually contests is

whether the facts of its case present an appropriate set of facts for equitable tolling of

Section 546(a), rather than whether equitable tolling ever applies to Section 546(a). The

latter is the type of question Section 1292(b) is intended to resolve and is not what has been

presented to me. And even if it was, I would reach the same conclusion since In re Draiman

has spoken conclusively on that issue.

Both parties agree that In re Draiman controls this issue. [DE 5 at ¶ 14-15; DE 7 at ¶

14.] Neither party contests the bankruptcy court’s reliance on In re Draiman and the cases

cited within it on the issue of equitable tolling. CPA Warehouse thus presents no “contest”

about the controlling law, nor any “substantial ground for difference of opinion” about the

controlling law, nor cites to any other law as controlling. See 28 U.S.C. § 1292(b); In re IFC

Credit, 2010 WL 1337142 at *2. Simply put, In re Draiman explicitly states that equitable

tolling applies to 11 U.S.C. § 546(a); CPA Warehouse presents no argument as to why that

wouldn’t be the case or why any other law would apply; and the bankruptcy court found

that the facts presented an appropriate situation for equitable tolling. There is nothing for

me to do here at this time. Therefore, CPA Warehouse’s motion for leave to appeal [DE 5]

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is DENIED. All other pending motions are rendered MOOT by this ruling. 

SO ORDERED.

ENTERED: July 21, 2014

s/Philip P. Simon 

PHILIP P. SIMON, CHIEF JUDGE

UNITED STATES DISTRICT COURT

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