Opinion ID: 2999727
Heading Depth: 3
Heading Rank: 1

Heading: jurisdiction

Text: 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