Opinion ID: 764968
Heading Depth: 3
Heading Rank: 1

Heading: Appeal from Bankruptcy Court's Denial of Claim of Exemption

Text: 36 District court jurisdiction over appeals from bankruptcy court orders is derived from 28 U.S.C. S 158(a), which provides: 37 The district courts of the United States shall have jurisdiction to hear appeals (1) from final judgments, orders, and decrees [of the bankruptcy court]; (2) from interlocutory orders and decrees issued under section 1121(d) of title 11... and (3) with leave of the [bankruptcy] court, from other interlocutory orders and decrees. 28 U.S.C S 158(a). 38 It is undisputed that the bankruptcy court's order denying Preblich's claim of exemption is not an interlocutory order or decree issued under 11 U.S.C. S 1121(d) and that the appeal to the district court did not therefore fall under subsection (2) of S 158(a). It is also undisputed that Preblich did not obtain leave of the bankruptcy court to file the appeal and that the appeal did not therefore fall under subsection (3) of S 158(a). Thus, the only possible source of district court jurisdiction in this case is subsection (1) of S 158(a)--an appeal from a final judgment, order or decree. See id. We must therefore determine whether the bankruptcy court's February 24, 1993, order denying Preblich's claim of exemption was a final judgment, order or decree. 39 Because of the unique nature of bankruptcy, this circuit has taken a pragmatic approach in determining whether a judgment, order or decree is final in bankruptcy cases. See In re Mason, 709 F.2d 1313, 1318 (9th Cir. 1983). This approach emphasizes the need for immediate review, rather than whether the order is technically interlocutory, in determining what is appealable as a final judgment in bankruptcy proceedings. In re White, 727 F.2d 884, 885 (9th Cir. 1984). 40 In In re White, we held that a bankruptcy court's order denying an exemption was a final, appealable order and that a debtor whose exemption had been denied may immediately appeal to this court. See id. at 886. In so holding, we recognized that an order denying an exemption did not meet the conventional test for a final judgment because it [did] not terminate the entire bankruptcy. Id. at 885. We found, however, that in light of the fact that the order denying an exemption finally determined all issues regarding the claimed exemption, and in light of the need for immediate review of orders granting or denying exemptions, the denial of an exemption was a final order that could be appealed. See id. at 886. 41 Our decision in In re White would appear to control the present case. There is, however, an important distinction between In re White and the present case. In In re White, the question we addressed was whether a debtor may immediately appeal the denial of an exemption. We did not address the argument now before us--that although the denial of an exemption is final for purposes of allowing immediate appeal, it is technically interlocutory and immediate appeal is not, therefore, required. 42 In In re Slimick, 928 F.2d 304 (9th Cir. 1990), we held that an appeal filed more than ten days after the bankruptcy court's denial of an exemption was untimely. See id. at 30709. The issue before us was not, however, whether an order denying an exemption was a final order that required immediate appeal. Rather, the issue was which of two documents filed by the bankruptcy court--each denying the claim of exemption--was the final order that triggered the ten-day period in which to file a notice of appeal. See id. at 306-07. We held that the first of the two documents was the final order and that the appeal, filed more than ten days after the first document was entered, was untimely. See id. at 307-09. In doing so, we assumed, without analysis, that the denial of an exemption was a final order that required an immediate appeal. See id. 43 Thus, our prior decisions have not explicitly addressed the question that we must answer today--whether a debtor must immediately appeal from the denial of an exemption or forfeit the right to appeal. Moreover, although several other circuits have addressed whether a debtor may immediately appeal from the denial of an exemption, none have explicitly addressed whether an immediate appeal is mandatory. See, e.g., In re Yonikus, 996 F.2d 866, 868 (7th Cir. 1993); In re Huebner, 986 F.2d 1222, 1224 (8th Cir. 1993); In re England, 975 F.2d 1168, 1172 (5th Cir. 1992); In re Brayshaw, 912 F.2d 1255, 1256 (10th Cir. 1990); In re Sumy, 777 F.2d 921, 923 (4th Cir. 1985); John T. Mather Memorial Hosp. v. Pearl, 723 F.2d 193, 193 n.1 (2d Cir. 1983); see also In re Garcia, 168 B.R. 403, 405-06 (D. Ariz. 1994). But see In re Wisz, 778 F.2d 762, 764 (11th Cir. 1985) (holding that denial of a claim of exemption is not final and therefore not immediately appealable). 44 We now make explicit what was implicit in our holdings in In re White and In re Slimick: a bankruptcy court's order denying a claim of exemption is a final, appealable order under 28 U.S.C. S 158(a)(1) and any appeal from such an order must be taken within the time allowed under the bankruptcy rules, or the right to appeal will be waived. 45 As discussed, we have previously held that an order denying a claim of exemption is a final order under 28 U.S.C. S 158(a). See In re Slimick, 928 F.2d at 307-09. It follows from Bankruptcy Rule 8001 that, absent an extension (or the presence of some other basis for appealing), a notice of appeal must be filed within ten days of the entry of an order. 6 Failure to file within the time limit divests the appellate court of jurisdiction. See In re Souza, 795 F.2d 855, 857 (9th Cir. 1986). 46 An order from a bankruptcy court denying a claim of exemption finally determines the discrete matter to which it was addressed, determines and seriously affects substantial rights and can cause irreparable harm if the losing party must wait until bankruptcy proceedings terminate before appealing. See In re Allen, 896 F.2d 416, 418 (9th Cir. 1990). We therefore hold that the denial of a claim of exemption is a final order under 28 U.S.C. S 158(a)(1) and that appeal from an order denying an exemption must be taken within the time allowed under the bankruptcy rules or the right to appeal will be waived. 7 47