Opinion ID: 767381
Heading Depth: 2
Heading Rank: 2

Heading: the tanners appeal

Text: 9 We have similar reservations concerning jurisdiction over the appeal in the Tanners case. The district court summarized the decision of the bankruptcy court and indicated its general approval of its actions. The district court concluded that the bankruptcy court correctly determined that Halbert unlawfully withdrew funds from a $26,600 retainer fee on several occasions until it was fully depleted without filing supplemental disclosures or seeking Court approval and thereby violated Bankruptcy Rule 2016(b) and 11 U.S.C. § 330. The district court held that the bankruptcy court correctly determined that Halbert violated these and other fiduciary obligations imposed on him by bankruptcy law and that it properly denied hisfee applications as sanctions. The district court also found sufficient evidence supporting the bankruptcy court's finding that Halbert violated Bankruptcy Rule 2014(a) by failing to disclose that he had received merchandise transfers from Tanners within ninety days of the Yousifs' and Tanners' bankruptcy filings, thus disqualifying himself under 11 U.S.C. § 327(a) to serve as Tanners' counsel. 10 After approval of the bankruptcy court's decision to deny Halbert's fees on a number of bases, the district court added this observation calling for the vacating of at least a part of the bankruptcy court's determination: 11 The Court, after noting that [c]learly, there was an agreement that Tanners would pay for those services, but Halbert did not disclose such an agreement, concluded that Halbert's failure to disclose this agreement violated his disclosure duties under § 329(a) and Rule 2016(b). Id. 12 Although it is undoubtedly plausible to deduce that a fee agreement existed between Halbert and Tanners for these services in contemplation of bankruptcy, there is no direct information relating to any such agreement in any of the material upon which the Bankruptcy Court relied. Thus, there is no extrinsic evidence from which the Bankruptcy Court could have found that this agreement existed, the method of payment, or the date on which it was mutually accepted by, and binding upon, the parties. Consequently, the applicable standards of review for the Appellees' dispositive motion preclude the Bankruptcy court from having found sufficient material facts from which the existence and terms of the parties' agreement could be determined. 13 Strict compliance with the directive to draw all reasonable inferences in favor of Halbert should have resulted in the Bankruptcy Court making no finding about such an agreement. Apart from whether this directive required the assumption that Halbert agreed to work on the bankruptcy pro bono, about which this Court expresses no opinion, the Bankruptcy Court improperly assumed that any such agreement fell within the bounds of § 329(a) and Rule 2016(b). This conclusion was reached even though Halbert presented uncontested extrinsic evidence which indicated that his only fee agreement with Tanners was achieved on September 1, 1993, more than one year before its petition was filed. Indeed, Halbert contends on appeal that this fee agreement, which provided for an hourly fee of $165, is the only one relating to the bankruptcy, a claim which is undisputed by the Appellees. 14 While the Court expresses no opinion as to whether Halbert was under a duty to disclose this fee agreement, it is apparent that the Bankruptcy Court drew inferences against him based on an incomplete understanding of the facts and the parties' positions on this issue. The Bankruptcy Court also failed to set forth on the record the basis for this alleged violation while at the same time being unable to establish the date on which the alleged agreement was entered. Cf. In the Matter of Prudhomme, 43 F.3d 1000, 1002-03 (5th Cir. 1995) (court can order disgorgement of fee paid more than one year before filing of petition because one year limitation period in § 329(a) is rebuttable presumption that any compensation paid before pre-petition year period is not in contemplation of bankruptcy and consequently § 329(a) does not provide a limitations period beyond which the court cannot reach.). Therefore, the findings and conclusions of the Bankruptcy Court on this issue must be vacated. 15 [T]he Bankruptcy Court gives no indication of having evaluated his argument that the November 19, 1994 merchandise transfer, as well as other merchandise deliveries, could be applied exclusively to non-bankruptcy related services that were provided before the petitions were filed. Moreover, the Bankruptcy Court doesnot appear to have addressed Tanners' argument that all of the merchandise transfers to Halbert were in payment of pre-1994 fee obligations. 16 As a consequence, it appears that the Bankruptcy Court did not evaluate this issue in a light most favorable to Halbert. Hence, its findings and conclusions with regard to this matter must be vacated. 17 The Bankruptcy Court held that Halbert violated his disclosure duties under Rule 2016(b) by not revealing the receipt of six post-confirmation fees from Tanners, totaling $51,868.92. 18 . . . [T]he record on this issue is insufficient and, thus, it precludes any meaningful judicial review of the contested issue. 19 For these reasons, the findings and conclusions of the Bankruptcy Court on this issue are vacated. 20 (footnotes omitted). Despite vacating the bankruptcy court's opinion and judgment in several particulars as above-related, the district court proceeded to find that the Bankruptcy Court's denial of Halbert's fee application in the Tanners' case was fully warranted. The judgment, however, concluded: 21 The denial by the Bankruptcy Court of Halbert's fee application in the Tanners' bankruptcy case is affirmed, although certain findings of fact and conclusions of law upon which the holding by the Bankruptcy Court was based are vacated and remanded to the Bankruptcy Court. 22 (emphasis added). Under the circumstances, although the district court has noted affirmance of the bankruptcy court in the Tanners case in a number of aspects, we confess that we cannot determine, due to what we perceive are, at best, ambiguities in the lengthy decision of the district court, whether there has been rendered a final judgment within the meaning of § 1291 in the Tanners case. Certain findings . . . upon which the holding by the Bankruptcy Court was based were vacated and remanded, and are relevant to the issues presented in this appeal. If . . . the district court order remands the case for a factual determination on an issue central to the case, the district court order is determined not to be appealable because the case cannot be resolved properly until the appropriate fact-finder, the bankruptcy court, makes necessary factual findings. Breyfogle v. Grange Mutual Casualty (In re Gardner), 810 F.2d 87, 91-92 (6th Cir. 1987). Because the bankruptcy court serves as an adjunct to the district court, we view all the proceedings in this action, whether in the Bankruptcy Court or the District Court as one proceeding in bankruptcy. Seon, Inc. v. Textron Oil Corp. (In re Frederick Petroleum Corp.), 912 F.2d 850, 853 (6th Cir. 1990). Thus, we view this appeal as an adversary proceeding to determine Halbert's eligibility for attorney's fees and liability for sanctions and apply Federal Rules of Bankruptcy Procedure 7054 and 7001(1) and Fed. R. Civ. P. 54(6). See, id. at 853-54; Millers Cove Energy Co. v. Moore (In re Millers Cove Energy Co.), 128 F.3d 449 (6th Cir. 1997). Rule 54(b) provides that: 23 (b) Judgment Upon Multiple Claims or Involving Multiple Parties. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or other rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order orother form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties. 24 See Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 438 (1956) ([Rule 54(b)] does not supersede any statute controlling appellate jurisdiction. It scrupulously recognizes the statutory requirement of a 'final decision' under § 1291 as a basic requirement for an appeal to the court of appeals.). 25 The district court has made no determination that there is no just reason for delay on a final judgment entered as to one or more but fewer than all the claims or parties. No Rule 54(b) certification was issued or requested. In the absence of certification under Rule 54(b) as to the finality of a partial disposition by the district court in a bankruptcy proceeding, any partial disposition is deemed non-final for purposes of appeal. In re Millers Cove Energy Co., 128 F.3d at 452. 26 We therefore lack subject matter jurisdiction under 28 U.S.C. § 158(d) and must dismiss the appeal. See id. 27 We pass to another matter of concern on the issue of jurisdiction--Halbert's notice of appeal, which is set out below: UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION 28 TODD M. HALBERT, Appellant, 29 v. 30 SAMI YOUSIF, SANA YOUSIF, and FLORENCE TANNERS, INC., Appellees. CONSOLIDATED APPEALS Case Nos.97-CV-75047, 97-CV-75048 31 Hon. Julian Abele Cook, Jr. 32 NOTICE OF APPEAL Todd M. Halbert (Appellant) appeals as a matter of right from that certain Order entered by the District Court on July 2, 1998. 33 The parties to the Order appealed from and the names of their respective attorneys are as follows: Sami Yousif and Sana Yousif: C. William Garratt, Esq. 34 Florence Tanners, Inc.: C. William Garratt, Esq. 35 TODD M. HALBERT (P33488) Counsel for Appellant 24359 Northwestern Hwy., #250 Southfield, MI 48075 (243) 356-6204 DATED: July 10, 1998 36 The notice of appeal may be insufficient because, among other things, it does not name the court to which appeal is taken. See, however, Dillon v. United States, 184 F.3d 556 (6th Cir. 1999) (en banc) (holding that where only one avenue of appeal exists, [Fed. R. App. P.] 3(c)(1)(C) is satisfied even if the notice of appeal does not name the appellate court). The notice makes no reference to a separate judgment entry that appears in the joint appendix in the Tanners case. The only reference is to the lengthy Order from which we have cited a number of excerpts. The Order is really an opinion dealing with two separate cases, one of which we have found to be clearly not appealable. 37 Furthermore, the record does not reflect that there was a separate judgment entry, pursuant to Fed. R. Civ. P. 58, which mandates entry of a separate document. This requirement may be waived, however, under certain circumstances. See Bankers Trust Co. v. Mallis, 435 U.S. 381 (1978). In the present case, the district court entered its order on the docket sheet, and the defendants did not object to perfecting the appeal from that order. However, because it remanded the Yousifs case in its entirety and the Tanners case in part forfurther findings, it is certainly arguable that the district court did not evidence clear intent that the opinion be a final decision in the case and thus did not meet the requirements for waiver. 38 In certain cases although the absence of a separate document does not foreclose appellate review, . . . 'the question raised by [the] appeal can be more fully considered if the decision below is made explicit in a judgment.' Beukema's Petroleum Co. v. Admiral Petroleum Co., 613 F.2d 626, 628-29 (6th Cir. 1979) (holding that Bankers Trust applied to appeals from preliminary injunctions) (quoting Turner v. Air Transport Lodge 1894, 585 F.2d 1180 (2d Cir.), cert. denied, 442 U.S. 919 (1978)). 39 Following Bankers Trust, this court held that 40 [T]he parties to an appeal may waive the separate judgment requirement where three conditions have been met; first, the district court must clearly evidence[] its intent that the opinion . . . represent[ed] the final decision in the case; second, the judgment must have been properly recorded on the clerk's docket; and third, the appellee from the district court [must not have] objected to perfecting the appeal from that order. 41 Whittington v. Milby, 928 F.2d 188, 192 (6th Cir.), cert. denied, 512 U.S. 883 (1991) (quoting Bankers Trust v. Mallis, 435 U.S. 381, 387 (1978)). 42 In this case, a remand for entry of a separate judgment while retaining jurisdiction over the appeal would serve no purpose if the judgment was not a final appealable order. Likewise, even if the district court had entered a separate document, we still would need to inquire into its finality. See Bankers Trust, 435 U.S. at 385-86 n.6 (Even if a separate judgment is filed, the courts of appeals must still determine whether the district court intended the judgment to represent the final decision in the case.); see also Green v. Nevers, 196 F.3d 627 n.2 (6th Cir. Nov. 19, 1999). 43 Accordingly, we find that we clearly have no jurisdiction in the Yousifs' appeal. We must also decline jurisdiction in the attempted Tanners' appeal for the reasons indicated because it is premature. CONCURRENCE 44