Court Opinion

ID: 4091223
Source: CourtListenerOpinion
Date Created: 2016-10-20 15:01:21.494806+00
Date Added: 2024-06-11T14:35:45.810367
License: Public Domain

Case: 16-11923   Date Filed: 10/20/2016   Page: 1 of 5

                                                      [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 16-11923
                         Non-Argument Calendar
                       ________________________

       D.C. Docket No. 3:15-cv-00109-LC-CJK; 3:09-bkc-31595-KKS

In Re: C.D. JONES & COMPANY, INC.,

                                                         Debtor.

THOMAS DAAKE,
ADELE DAAKE,

                                                         Plaintiffs-Appellants,

                                  versus

C.D. JONES & COMPANY, INC., et al.,

                                                         Defendants,

SHERRY F. CHANCELLOR,
                                                         Defendant-Appellee.
                       ________________________

                Appeal from the United States District Court
                    for the Northern District of Florida
                      ________________________
                            (October 20, 2016)
                Case: 16-11923      Date Filed: 10/20/2016      Page: 2 of 5

Before HULL, MARCUS and BLACK, Circuit Judges.

PER CURIAM:

       Thomas and Adele Daake seek review of the district court’s dismissal of

their bankruptcy court appeal for lack of subject matter jurisdiction. The Daakes

contend the district court erred when it determined the bankruptcy court’s

settlement order was not a final judgment appealable under 28 U.S.C. § 158(a)(1).

After review,1 we reverse and remand to the district court with instructions to hear

the appeal.

                                    I. BACKGROUND

       The Daakes are creditors of C.D. Jones & Company, Inc., which has been

the subject of a lengthy bankruptcy proceeding. Not long before the bankruptcy

petition was filed, Christopher Jones, a fifty percent shareholder of C.D. Jones,

allegedly transferred his equity interest in the company to another significant

creditor in exchange for $1,500,000 in real property and $250,000 in cash. The

bankruptcy trustee appears not to have considered the property to be part of the

bankruptcy estate, as she took no action to void the transfers.

       The Daakes obtained leave from the bankruptcy court to initiate an

adversarial proceeding on behalf of the estate in order to resolve the limited

questions of whether the $1,500,000 in real property and $250,000 in cash were

       1
        This Court reviews questions of subject matter jurisdiction de novo. In re Heatherwood
Holdings, LLC, 746 F.3d 1206, 1216 (11th Cir. 2014).
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                Case: 16-11923     Date Filed: 10/20/2016   Page: 3 of 5

fraudulently transferred to Jones and should be considered property of the estate.

In the proceeding, the bankruptcy court granted Jones’ partial motion for summary

judgment with respect to the real property. At that point, the only remaining issue

in the adversarial proceeding was whether the cash was fraudulently transferred.

That issue was never decided, however, as it was foreclosed by a settlement order

in the main bankruptcy case, pursuant to which the defendants agreed to pay

$250,000 into the bankruptcy estate in exchange for settlement of all claims against

the trustee or the company. The bankruptcy court entered the order over the

Daakes’ objection, reasoning that $250,000 was the most they could have won for

the estate in the adversarial proceeding in any case. After the settlement, the only

matters still pending in the adversarial proceeding were motions for attorneys’ fees

resulting from litigation misbehavior.

         The Daakes appealed the bankruptcy court’s settlement order to the district

court. After briefing, the district court dismissed the appeal sua sponte for lack of

subject matter jurisdiction under 28 U.S.C. § 158(a)(1) and (3). It reasoned the

settlement order was not “final,” and thus not appealable under § 158(a)(1). The

court also found the order was not appealable as an interlocutory order pursuant to

§ 158(a)(3), so it dismissed the appeal. The Daakes subsequently appealed to this

Court.

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      The limited issue confronting this Court is whether the settlement order was

“final” under § 158(a)(1). We hold that it was. Consequently, the district court

has subject matter jurisdiction.

                                   II. DISCUSSION

      “In a bankruptcy case, an order is final and appealable if it resolves ‘a

particular adversary proceeding or controversy’ rather than the entire bankruptcy

litigation.” In re Martin, 490 F.3d 1272, 1275 (11th Cir. 2007) (quoting In re The

Charter Co., 778 F.2d 617, 621 (11th Cir. 1985)). In this case, the bankruptcy

court’s order was final and appealable under § 158(a)(1) because it “end[ed] the

litigation on the merits and [left] nothing for the court to do but execute the

judgment.” Charter Co., 778 F.2d at 621. As noted above, the adversary

proceeding consisted of two issues. The court had already granted partial summary

judgment with respect to the property, holding it was not fraudulently transferred.

Thus, when the settlement order was entered, in which the trustee agreed to accept

settlement in exchange for waiver of its claim with respect to the only remaining

issue—the transfer of the cash—there was nothing left for the court to do in the

adversary proceeding. See Martin, 490 F.3d at 1275 (holding bankruptcy court had

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“nothing more . . . to do with respect to the settlement agreement” and thus the

order, together with the district court order affirming it, was final). 2

       In its order, the district court pointed to the fact that the adversarial

proceeding still had “a number of matters pending.” But because those matters

pertained only to attorneys’ fees, they did not affect the finality of the settlement

order. See In re Porto, 645 F.3d 1294, 1299 (11th Cir. 2011) (holding Supreme

Court’s “bright line rule,” that issue of attorneys’ fees is always collateral to the

merits, applies in bankruptcy cases, and thus fee issues do not affect finality).

                                      III. CONCLUSION

       Because we conclude the district court has appellate jurisdiction under

§ 158(a)(1), we reverse and remand and instruct the court to hear the appeal.

       REVERSED AND REMANDED.

       2
          Appellee cites In re Justice Oaks II, Ltd., 898 F.2d 1544 (11th Cir. 1990), for the
proposition that a settlement order is not final and appealable. However, in that case this Court
considered whether a settlement order could be given preclusive effect as a final judgment on the
merits and not merely whether it was final for purposes of appeal, so it is not applicable here. Id.
at 1549 (holding because the bankruptcy court considers only the probability of success in the
litigation on the merits in deciding whether to approve a settlement, a settlement cannot have
preclusive effect).
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