Court Opinion

ID: 2996617
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:30:15.173484+00
Date Added: 2024-06-11T11:45:30.421689
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                       ____________

No. 03-1075
In the Matter of:
  CHARLES T. DORNER,
                                           Debtor-Appellant.
                       ____________
          Appeal from the United States District Court
               for the Eastern District of Wisconsin.
        No. 02-CV-694—Rudolph T. Randa, Chief Judge.
                       ____________
  ARGUED AUGUST 5, 2003—DECIDED SEPTEMBER 11, 2003
                    ____________

  Before EASTERBROOK, ROVNER, and DIANE P. WOOD,
Circuit Judges.
   EASTERBROOK, Circuit Judge. Obligations to pay alimony
and child support may not be discharged in bankruptcy.
11 U.S.C. §523(a)(5). A separate provision addresses debts
“incurred . . . in the course of a divorce or separation or in
connection with a separation agreement, divorce decree or
other order of a court of record”, which may be discharged
if
    (A) the debtor does not have the ability to pay such
    debt from income or property of the debtor not rea-
    sonably necessary to be expended for the mainte-
    nance or support of the debtor or a dependent of the
    debtor and, if the debtor is engaged in a business,
    for the payment of expenditures necessary for the
    continuation, preservation, and operation of such
    business; or (B) discharging such debt would result
2                                                No. 03-1075

    in a benefit to the debtor that outweighs the detri-
    mental consequences to a spouse, former spouse, or
    child of the debtor[.]
11 U.S.C. §523(a)(15). In this bankruptcy proceed-
ing, Charles Dorner seeks to discharge indebtedness to, or
in connection with, three family businesses that a state
divorce court had apportioned between Charles and his
former spouse Ruth A. Dorner. Charles conceded that the
debts had been incurred “in the course of a divorce or sep-
aration” and contended that the conditions for their dis-
charge are satisfied. Bankruptcy Judge Eisenberg concluded
otherwise after an evidentiary hearing. He found not only
that Charles could pay but also that discharge would harm
Ruth more than it would help Charles.
  Charles appealed to a district judge under 28 U.S.C.
§158(a). He filed a designation of items to be included in the
record. See Fed. R. Bankr. P. 8006. Although Rule 8006
says that the “record on appeal shall include the items so
designated by the parties” (emphasis added), and Rule
8007(b) adds that the bankruptcy clerk “shall transmit a
copy thereof forthwith to the clerk of the district court” (em-
phasis added), that is not what happened. The lawyer re-
presenting Charles learned from the clerk that only the
notice of appeal, the bankruptcy judge’s opinion, and the
docket sheet would be transmitted. The clerk relied on a
standing order of the district court dated June 25, 1991, and
reading:
    IT IS ORDERED that all bankruptcy appeals trans-
    mitted to the United States District Court filed
    pursuant to the jurisdiction conferred by 28 U.S.C.
    § 158 shall be limited to the following documents:
        1) Notice of Appeal;
        2) A copy of the Order being appealed; and
        3) A copy of the docket sheet.
No. 03-1075                                                 3

    IT IS FURTHER ORDERED that other documents from
    the main file may be requested on an as needed
    basis.
The trailing paragraph, written in the passive, does not say
who must do the requesting. Counsel evidently thought that
the duty rests on the judge, while the district judge must
have believed that the duty rests on counsel. After the
appeal had been briefed, the judge entered this curt order:
    Appellant Charles T. Dorner asks the Court via this
    appeal to reverse the decision of the Bankruptcy
    Court Judge. Based upon the limited submission of
    the appellant and the current record, this Court is
    unable to conclude, pursuant to the standard of
    review that it must apply, that the Bankruptcy
    Judge was in “clear error” in his factual findings or
    that erroneous legal conclusions were reached.
    Therefore, IT IS HEREBY ORDERED that the appeal is
    DISMISSED.

Reference to “the limited submission of the appellant
and the current record” alerted counsel to the possibility
that the district judge had not requested or looked at the
evidentiary materials. So counsel asked the clerk to ensure
that all materials that had been designated under Rule
8006 are in the record for this court’s review. (Our jurisdic-
tion rests on §158(d). See In re Riggsby, 745 F.2d 1153,
1154 (7th Cir. 1984); In re Marchiando, 13 F.3d 1111, 1113-
14 (7th Cir. 1994).) His answer came, not from the clerk,
but from the judge, who wrote (emphasis in original):
    By his letter, Dorner’s counsel asks that certain
    portions of the record which pertain to proceedings
    before the Bankruptcy Court be included in the rec-
    ord on appeal from the District Court’s dismissal.
    The only portion of the record which may be in-
    cluded in an appeal from a judgment, order, or
4                                                No. 03-1075

    decree of a District Court are submissions filed
    or offered into evidence in the District Court. See
    Circuit Rule 10; see also Fed. R. App. P. 6(b). This
    court has no jurisdiction over filings in the Bank-
    ruptcy Court and counsel’s request must be denied.
  Charles has received the runaround. First, in response
to an order issued by the district court, the bankruptcy
clerk failed to transmit the record designated under Rule
8006. Then the district judge dismissed the appeal because
Charles’s arguments were not supported by evidence in the
bobtailed record. Finally, the district judge denied that he
had any authority to ensure that the record conforms to the
Rule 8006 designations.
  None of these steps was proper. Start with the refusal
to include the documents designated under Rule 8006. The
bankruptcy clerk must transmit the documents specified
by counsel. No local rule or standing order can supersede
the Federal Rules of Bankruptcy Procedure. If the district
court had promulgated a local rule to the same effect as
its 1991 order, that rule would have been invalid under Fed.
R. Bankr. P. 8018(a)(1), which says that all local rules must
be “consistent with” the national rules. See also 28 U.S.C.
§2071(a); Fed. R. Civ. P. 83(a)(1). A local rule that counter-
mands a national rule is not consistent with it. Orders with
the effect of rules likewise must satisfy the consistency
requirement.
  Adopting local rules through the device of standing orders
contravenes the Rules Enabling Act in several ways beyond
the vice of inconsistency. First, rules must be reviewed by
an advisory committee. See 28 U.S.C. §2077(b). Second,
rules may be adopted only after public notice and opportu-
nity for comment. 28 U.S.C. §2071(b). Third, rules adopted
by district courts must be submitted to the judicial council
of the circuit for review. 28 U.S.C. §2071(c). Finally, all lo-
cal rules must be sent to the Director of the Administrative
No. 03-1075                                                  5

Office, who ensures their public availability. 28 U.S.C.
§2071(d). The Eastern District of Wisconsin violated all of
these requirements when it used a nonpublic standing order
to contradict Rules 8006 and 8007, which like all other
national rules have the force of statutes. See 28 U.S.C.
§2072(b).
   The standing order of June 1991 is invalid. But while the
court was still implementing it, district judges should have
recognized that they were the right persons to request ma-
terials under its last paragraph. It would make little sense
to say that counsel should have done the requesting; the
designation under Rule 8006 already served that purpose.
An order such as this could be useful only to the extent that
it led the district judge to peruse the designation and secure
all documents essential to resolve the appeal. That was not
done here.
  As for the final step in the runaround—the district judge’s
declaration that he had no authority to order the bank-
ruptcy court to add material to the record—this reflects a
misunderstanding of the relation between district and
bankruptcy judges. Bankruptcy judges and district judges
serve on a unified court. “In each judicial district, the
bankruptcy judges . . . shall constitute a unit of the district
court”. 28 U.S.C. §151 (emphasis added). District judges
may refer matters to bankruptcy judges but also may
withdraw them and render decisions themselves. 28 U.S.C.
§157. It is the district judges, not the bankruptcy judges,
who make the rules of procedure for all bankruptcy issues
not covered by the national rules. Fed. R. Bankr. P.
8018(a)(1). So the district judge had all the authority
needed to ensure that the bankruptcy clerk completed this
record in accord with the Rule 8006 designation, and the
judge should have done this before the record was transmit-
ted to the court of appeals.
6                                                 No. 03-1075

   What happened after that, however, can’t be pinned on
the district court. If Charles wanted to supplement the con-
tents of the record as transmitted, he had to file a motion in
this court under Fed. R. App. P. 10(e). He did not do so.
Alternatively, Charles might have filed a brief contending
that the decision should be vacated and the appeal redeter-
mined in the district court on the proper record. His lawyer
did not do that either. Instead he elected to proceed as
if there were no problem. Charles’s brief contends that
the bankruptcy judge made clearly erroneous findings of
fact, and this line of argument depends on documents that
are not in the record. Charles’s appellate brief does not
contain even an allusion to the contretemps in the district
court about the record; he pretends that the district court
included everything he asked for. Pretense is no substitute
for a record. The brief reads as if the district judge had no
role in the case and that we are directly reviewing the
bankruptcy judge’s decision. Despite Circuit Rule 30(a),
which requires every appellant to include with the brief a
copy of the opinion and judgment in the district court, this
brief includes only the bankruptcy judge’s opinion and judg-
ment; counsel also filed a statement under Circuit Rule
30(d) falsely certifying that all materials required by Rule
30(a) had been included.
  So here we are, with the issues on appeal limited to factu-
al contentions that, on a skeletal record, cannot be resolved
in Charles’s favor. This is the same problem the district
judge encountered—and though the district judge could
and should have overcome it by a request under the last
paragraph of the standing order, we have no such authority.
A litigant whose position in the court of appeals depends on
extra-record evidence loses forthwith. The situation is
covered in Circuit Rule 10(g), which is designed to handle
problems such as this:
    When a party’s argument is countered by a con-
    tention of waiver for failure to raise the point in the
    trial court or before an agency, the party opposing
No. 03-1075                                                7

    the waiver contention must give the record cite
    where the point was asserted and also ensure that
    the record before the court of appeals contains the
    relevant document or transcript.
Not until oral argument, however, did counsel suggest that
the record be fleshed out—and by then it was too late. Law-
yers must get these things straight before the briefing is
complete; otherwise the opposing party and the appellate
judges must traverse the same ground twice. Charles’s
lawyer effectively forfeited the appeal when he filed a brief
pretending that he had prevailed in the district court on the
question whether the appellate record should be expanded.
Omission of the district court’s opinion was the coup de
grâce, for that can be enough by itself to yield summary
affirmance. See Mortell v. Mortell Co., 887 F.2d 1322, 1326-
27 (7th Cir. 1989); Urso v. United States, 72 F.3d 59, 61-62
(7th Cir. 1995).
  From the little we can see, there is no reason to think
that the bankruptcy judge committed a clear error or
abused his discretion. We have not been given a properly
supported reason to set aside the order on the merits; and,
as Charles has not asked for any relief with respect to the
contents of the record, the judgment of the district court is
                                                 AFF IRMED.
A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                   USCA-02-C-0072—9-11-03