Opinion ID: 3034719
Heading Depth: 3
Heading Rank: 3

Heading: The Second Appeal (Court Enforcement of the

Text: Settlement Agreement) While the first appeal was pending before the district court, Flinn filed an ex parte application for entry of judgment pursuant to the terms of the settlement agreement. This request was prompted by Rains’s failure to pay $250,000 by the March 31, 2003 due date. The bankruptcy court entered judgment in favor of Flinn, ruling that Rains’s “claim of exemption against the ABA Retirement Plan is hereby denied up to the sum of $250,000.00, and $250,000.00 of the funds in that Retirement Plan is hereby held to be property of the Chapter 7 estate.” The judgment further required Rains to “forthwith withdraw the sum of $250,000.00 from the ABA Retirement Plan, and . . . pay said amount to the Trustee immediately upon receipt.” Rains filed a Motion to Alter or Amend Judgment (motion to amend judgment) in the bankruptcy court, contending that the court exceeded its jurisdiction when it declared that 15216 IN RE: RAINS $250,000 of the ABA retirement plan was part of the bankruptcy estate and ordered Rains to pay that amount from the retirement plan to the bankruptcy trustee. The bankruptcy court heard oral argument and denied the motion. Although the first appeal was pending in district court, neither party notified the district court of these later developments in bankruptcy court. Rains subsequently appealed the bankruptcy court’s order denying the motion to amend judgment and its judgment enforcing the settlement agreement. Once again, Rains elected to have the appeal heard by the district court. The district court’s rationale for the disposition of this second appeal rested on a complicated interplay of procedural rules involving both the first and second appeals. Finding that the second appeal also challenged the order approving the settlement agreement, rather than merely challenging its enforcement, the district court altered the analysis of its prior ruling and determined that the original order approving the settlement agreement was not final after all.1 The court reasoned that because the first appeal was taken from what proved to be an interlocutory order, it was premature, and should be treated as having been filed on the day the final judgment was entered, pursuant to Fed. R. Bankr. P. 8002(a).2 As the prema- 1 The district court explained that in its prior ruling, it considered the order approving the settlement agreement as final under our “pragmatic approach to finality in bankruptcy cases.” See Alexander v. Compton (In re Bonham), 229 F.3d 750, 761-62 (9th Cir. 2000) (describing bankruptcy court order as final where it “resolve[d] and seriously affect[ed] substantive rights” and “finally determine[d] the discrete issue to which it [was] addressed”) (citations omitted). The district court’s ruling can be traced to the fact that the parties failed to notify the district court of the subsequent proceedings in bankruptcy court while the appeal was pending in district court. 2 The first notice of appeal (from the order approving the settlement agreement) was filed on February 27, 2003. Judgment enforcing the settlement agreement was entered by the bankruptcy court on May 23, 2003. The motion to alter or amend judgment was filed on June 2, 2003 and denied on July 7, 2003. The second notice of appeal (from the denial of the motion to alter or amend judgment and from the judgment enforcing the settlement agreement) was filed on July 17, 2003. IN RE: RAINS 15217 ture but subsequently cured notice of appeal was deemed filed on the date judgment was entered (May 23, 2003), but before the motion to amend judgment was filed (June 2, 2003), the district court concluded that the bankruptcy court lacked jurisdiction over the motion to amend judgment because of the appeal then pending in district court. See Dressler v. The Seeley Co. (In re Silberkraus), 336 F.3d 864, 869 (9th Cir. 2003) (observing that “the filing of a notice of appeal generally divests the trial court of jurisdiction.”) (citations omitted). The district court then reasoned that because the bankruptcy court lacked jurisdiction over the motion to amend judgment, the filing of the motion did not toll the time allowed for appealing the judgment to the district court. Accordingly, the district court dismissed the second appeal for lack of jurisdiction on the basis that Rains’s notice of appeal filed July 17, 2003 seeking review of the judgment that enforced the settlement agreement and denied the motion to amend judgment was untimely vis-à-vis the May 23, 2003, judgment. However, the district court’s rationale does not address the fact that the notice of appeal filed on February 27, 2003, if premature because it was interlocutory, would be deemed filed on May 23, 2003, the date of final judgment. See Arrowhead Estates Development Co. v. United States Trustee (In re Arrowhead Estates Development Co.), 42 F.3d 1306, 1310 (9th Cir. 1995), as amended; Fed. R. Bankr. P. 8002(a). The interlocutory and final orders would then merge into one judgment for the purpose of appeal. See American Ironworks & Erectors Inc. v. N. Amer. Constr. Corp., 248 F.3d 892, 897-98 (9th Cir. 2001). Accordingly, the notice of appeal would be timely with respect to the February 20, 2003 order approving the settlement agreement, as well as the May 23, 2003 order enforcing the settlement agreement.3 3 Under this analysis the motion to alter or amend judgment was outside the scope of appeal in the district court. However, because the motion to alter or amend judgment mirrored Rains’s arguments on the merits, the district court’s decision to exclude the motion to alter or amend judgment from appellate consideration does not affect the outcome of this appeal. 15218 IN RE: RAINS