Court Opinion

ID: 2823456
Source: CourtListenerOpinion
Date Created: 2015-07-31 21:00:44.403113+00
Date Added: 2024-06-11T09:34:12.725614
License: Public Domain

United States Court of Appeals
                       For the First Circuit
 
 

No. 14-1562

         IN RE: JOSÉ DE JESÚS GONZÁLEZ; NIXSA GARCÍA REYES,

                              Debtors

                        --------------------

    SITKA ENTERPRISES, INC.; BERRIOS & LONGO LAW OFFICE, P.S.C.;
                     FERNANDO E. LONGO QUINONES,

                            Appellants,

                                 v.

             WILFREDO SEGARRA MIRANDA; MRS. JANE SEGARRA
         and their conjugal partnership; V.B. RENTAL, INC.;
           VDJ LIMITED PARTNERSHIP, S.E.; BANCO POPULAR DE
        PUERTO RICO; JOSÉ DE JESÚS GONZÁLEZ; XYZ INSURANCE;
         UNKNOWN COLLABORATORS; JOHN DOE COMPANY; JOHN DOE;
                      UNKNOWN INSURANCE COMPANY,

                             Appellees.
 

            APPEAL FROM THE UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF PUERTO RICO

          [Hon. Daniel R. Domínguez, U.S. District Judge]
 

                               Before

                        Howard, Chief Judge,
                Lynch and Thompson, Circuit Judges.
                                   
Edilberto Berríos Pérez on brief for appellants.
Eldia M. Díaz-Olmo on brief for appellees.
                            

                            
                     July 31, 2015

                            
             LYNCH, Circuit Judge.       Appellants purport to appeal in

order to reverse a bankruptcy court's denials of their motion for

a jury trial and motion to remand to state court.            We conclude we

have no jurisdiction because the bankruptcy court's orders were

not final, as the district court also found, and so we dismiss the

appeal.

             The bankruptcy case of which this proceeding is a part

began in 2002, when debtors José De Jesús González and Nixsa García

Reyes filed a petition under Chapter 13 of the Bankruptcy Code in

bankruptcy court in the District of Puerto Rico.                 The case was

later converted to a Chapter 7 proceeding.               A decade later, in

2012, the appellants, to whom we will refer collectively as Sitka,

filed a complaint in Arecibo Superior Court in Puerto Rico against

the Trustee in bankruptcy, Wilfredo Segarra Miranda, and other

defendants. Segarra removed the state case to the bankruptcy court

on the ground that it was "a core proceeding that arises in" the

bankruptcy    case   for   which   he    was    Trustee.    See    28   U.S.C.

§§ 157(b)(2), 1334(b), 1452(a).

             Once   in   bankruptcy    court,    Sitka   filed   two    motions

relevant here: a motion for a jury trial and a motion requesting

remand to Arecibo Superior Court.              The bankruptcy court denied

both motions in two separate orders issued on February 20, 2013.

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          Sitka separately appealed each of the February 20 denial

orders to the district court.          The appeal from the denial of the

motion for a jury trial was assigned docket number 13-1288, and

the appeal from the denial of the request for remand was assigned

docket number 13-1289.       The district court consolidated the two

cases, along with a third case, and directed that all filings be

made under No. 13-1288.

          On March 31, 2014, the district court dismissed the

appeals in No. 13-1288 and No. 13-1289, holding that it lacked

jurisdiction     because   both   of   the   underlying   bankruptcy   court

orders were non-final.      Two days later, the court entered judgment

in each case.1

          On May 1, 2014, Sitka filed a notice of appeal to this

court in No. 13-1288, but not in No. 13-1289.         The notice purports

to appeal "from the Opinion and Order and Judgment . . . dated

March 31, 2014 . . . dismissing the appeal filed under Civil No.

13-1288 as the order denying remand and the request for jury trial

are allegedly interlocutory non-final order[s]."

          Sitka's brief is nearly incomprehensible.            Its primary

arguments appear to be (1) the bankruptcy court should have

     1    Because judgment entered on April 2, 2014, Sitka's May
1, 2014, notice of appeal was filed on the 29th day of the 30-day
appeal period. See Fed. R. App. P. 4(a)(1)(A), 26(a)(1)(A).
Segarra's argument that we should dismiss these appeals as untimely
is without merit.

                                   - 4 -
remanded the case to the Arecibo Superior Court pursuant to the

mandatory abstention provision of 28 U.S.C. § 1334(c)(2), and (2)

the bankruptcy court erred in denying the motion for a jury trial.

Sitka makes no meaningful effort to address the jurisdictional

issues that prompted the district court to dismiss the appeal,

even though it has an obligation to do so.                   See United States v.

Gonzalez-Rodriguez,        777 F.3d 37,    39   (1st    Cir.    2015)    (citing

Calderón-Serra v. Wilmington Trust Co., 715 F.3d 14, 17 (1st Cir.

2013)).          Segarra argues (1) our review must be limited to the

district court's decision as to the motion for a jury trial,2 and

(2) the district court lacked jurisdiction over Sitka's appeal

from       the    bankruptcy   court's    denial      of     that    motion,    so   we

necessarily lack jurisdiction over the appeal from the district

court.

                 We move to the second issue.          Even if we construe the

notice of appeal to properly raise both the denial of the motion

for a jury trial and the denial of the motion to remand to state

court, but cf. Biltcliffe v. CitiMortgage, Inc., 772 F.3d 925,

       2  Segarra devoted a substantial portion of his brief to
the technical argument that Sitka did not appeal the denial of the
remand motion in No. 13-1289 because it only filed a notice of
appeal in No. 13-1288. Neither party acknowledged the existence
of the district court's post-consolidation requirement that all
filings be made in No. 13-1288, much less discussed that order's
impact, if any, on Sitka's perfection of its appeal.

                                         - 5 -
929-30 (1st Cir. 2014), the outcome of this case is the same.            We

lack jurisdiction and so must dismiss the appeal.

           Under   28   U.S.C.   §    158(a),   district    courts   "have

jurisdiction to hear appeals [] from final judgments, orders, and

decrees . . . of bankruptcy judges."        Courts of Appeals, in turn,

"have jurisdiction of appeals from all final decisions, judgments,

orders, and decrees entered under" § 158(a).        28 U.S.C. § 158(d).

"'For purposes of § 158(d), a determination of the district court

is not final unless the underlying order of the bankruptcy court

is final.'"   Lurie v. Blackwell (In re Popkin & Stern), 105 F.3d
1248, 1250 (8th Cir. 1997) (quoting Flor v. BOT Fin. Corp. (In re

Flor), 79 F.3d 281, 283 (2d Cir. 1996)); accord Watson v. Boyajian

(In re Watson), 403 F.3d 1, 4 (1st Cir. 2005); In re Am. Colonial

Broad. Corp., 758 F.2d 794, 800-01 (1st Cir. 1985).

           The question for us, then, is whether the bankruptcy

court's denials of Sitka's motion for a jury trial and motion to

remand to state court were final orders which can be appealed to

this court.   "'[F]or a bankruptcy court order to be final within

the meaning of § 158(d), the order need not resolve all the issues

raised by the bankruptcy; but it must completely resolve all of

the issues pertaining to a discrete claim, including issues as to

proper relief.'"    1 Collier on Bankruptcy ¶ 5.08[1][b] (16th ed.

2015)   (quoting   Official   Comm.   of   Subordinated    Bondholders   v.

                                 - 6 -
Integrated Res., Inc. (In re Integrated Res., Inc.), 3 F.3d 49, 53

(2d Cir. 1993)); see also In re Am. Colonial, 758 F.2d at 801.              In

other    words,   within   each   discrete   adversary    proceeding   in   a

bankruptcy, "ordinary concepts of finality apply," meaning that

"orders in which the merits are not determined" are generally not

final.    See 1 Collier on Bankruptcy ¶ 5.08[1][b], [5].

            Under this standard, it is clear that "[t]he bankruptcy

court order denying [Sitka's] demand for a jury trial is not a

final order."     In re Popkin, 105 F.3d at 1250.        That order did not

resolve the merits of the adversary proceeding between Sitka and

Segarra.    Indeed, the Supreme Court has squarely held that "an

order denying a demand for trial by jury in a federal court" is

not a final order and hence is not immediately appealable.             City

of Morgantown, W. Va. v. Royal Ins. Co., 337 U.S. 254, 255-59

(1949).

            The bankruptcy court's order refusing to remand the case

to state court was likewise not final.         Under the general federal

removal statute, this circuit treats an order refusing remand to

state court in a diversity case as a non-final interlocutory order

which is not immediately appealable.          BIW Deceived v. Local S6,

Indus. Union of Marine & Shipbuilding Workers, 132 F.3d 824, 829

(1st Cir. 1997).     Other courts have reached the same conclusion in

bankruptcy as to a refusal to abstain under § 1334(c)(2), noting

                                    - 7 -
that such a refusal "d[oes] not 'end[] the litigation on the merits

and   leave   []   nothing     for   the   court   to   do    but   execute   the

judgment.'"    Beightol v. UBS Painewebber, Inc., 354 F.3d 187, 189

(2d Cir. 2004) (Sotomayor, J.) (second and third alterations in

original) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 467

(1978)); accord Schuster v. Mims (Matter of Rupp & Bowman Co.),

109 F.3d 237, 240-41 (5th Cir. 1997); see also Krasnoff v. Marshack

(In re Gen. Carriers Corp.), 258 B.R. 181, 187 (B.A.P. 9th Cir.

2001) (collecting cases).        We agree.      A refusal to abstain "merely

determine[s] where the case w[ill] be adjudicated; it d[oes] not

resolve any of the substantive issues raised in the lawsuit."

Beightol, 354 F.3d at 189; see also 1 Collier on Bankruptcy

¶   5.08[5]   (noting   that    "orders    in   which   the    merits   are   not

determined" are generally not final).3

      3   One tersely-reasoned decision of a Tenth Circuit
bankruptcy appellate panel has concluded that a bankruptcy court's
refusal to abstain and remand represents an immediately appealable
collateral order. See Personette v. Kennedy (In re Midgard Corp.),
204 B.R. 764, 768-69 (B.A.P. 10th Cir. 1997). Here, Sitka does
not even cite that case, which is against the clear weight of
authority among circuit courts. Sitka has failed to sufficiently
develop an argument for why the district court's order at this
interlocutory stage is immediately appealable. In its brief, Sitka
almost exclusively attacks the merits of the district court's
abstention decision. On the jurisdictional question, the brief
merely asserts that a bankruptcy court's decision not to abstain
is "immediately appealable" and incomprehensibly cites to an array
of cases without making any effort to explain how those cases would
apply to allow an immediate appeal.      Accordingly, any contrary
argument here is waived. See United States v. Zannino, 895 F.2d
1, 17 (1st Cir. 1990).

                                     - 8 -
           We therefore lack jurisdiction over the district court's

dismissal of Sitka's appeal of the bankruptcy court orders.        See

In re Popkin, 105 F.3d at 1250; In re Am. Colonial, 758 F.2d at

803.

           We   comment,   however,     that   the   district   court's

conclusion that it lacked jurisdiction over the appeal because the

bankruptcy court's orders themselves were not final was plainly

correct.

           We also note that the district court held in No. 10-1847

(one of Sitka's many bankruptcy appeals related to this action),

that pursuant to the Supreme Court's decision in Stern v. Marshall,

131 S. Ct. 2594 (2011), the bankruptcy court could not adjudicate

the Trustee's fraudulent conveyance claim against Sitka.         Sitka

appears to argue that, in doing so, the district court held that

the court lacks "jurisdiction" over the fraudulent conveyance

action and that it must be dismissed, barring removal of Sitka's

lawsuit at issue in this case challenging the Trustee's actions in

pursuing that fraudulent conveyance claim.      Without expressing any

view as to the merits of the district court's Stern analysis, we

emphasize that we read the district court to have held only that

the underlying fraudulent conveyance claim must be heard by the

district court (an Article III court), and not that there is a

lack of federal jurisdiction here.       Despite the district court's

                                - 9 -
urging, it is not clear from the record whether any party has filed

a motion for withdrawal of the reference to the bankruptcy court.

See Fed. R. Bankr. P. 5011.          It may be that the bankruptcy court

is proceeding to consider the claim and issue proposed findings of

fact and conclusions of law, which the district court would review

de novo.     That course would be permissible.                 See Exec. Benefits

Ins.     Agency    v.   Arkinson,    134      S.     Ct.     2165,   2170   (2014).

Alternatively, the parties could consent to have the claim decided

by the bankruptcy court.            See Wellness Int'l Network, Ltd. v.

Sharif, 135 S. Ct. 1932, 1939 (2015). In the course of considering

this     removed    action    on    remand,        the     bankruptcy   court,     in

consultation with the parties, is of course free to clarify the

posture of the Trustee's fraudulent conveyance claim.

            We warn appellants about taking frivolous appeals and

filing    briefs    which    are   nearly   incomprehensible         and    fail   to

meaningfully address the pertinent issues.                   Should such conduct

continue, it will be sanctioned. Costs are awarded to the Trustee.

            Dismissed.

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