Court Opinion

ID: 1099
Source: CourtListenerOpinion
Date Created: 2010-04-02 00:25:07+00
Date Added: 2024-06-11T14:55:36.245080
License: Public Domain

ELECTRONIC CITATION: 2010 FED App. 0001P (6th Cir.)
                              File Name: 10b0001p.06

          BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: NASHVILLE SENIOR LIVING, LLC, et          )
al.,                                             )
                                                 )
            Debtors.                             )
______________________________________           )
                                                 )
T H E O F F IC IA L C O M M IT T E E       OF    )
UNSECURED CREDITORS,                             )             No. 09-8041
                                                 )
            Appellant,                           )
                                                 )
                                                 )
            v.                                   )
                                                 )
ANDERSON SENIOR LIVING PROPERTY,                 )
LLC, et al.,                                     )
                                                 )
            Appellees.
______________________________________

                      Appeal from the United States Bankruptcy Court
                      for the Middle District of Tennessee at Nashville.
                                       No. 08-07254.

                                Submitted: February 3, 2010

                              Decided and Filed: April 1, 2010

   Before: FULTON, RHODES, and SHEA-STONUM, Bankruptcy Appellate Panel Judges.

                                  ____________________

                                        COUNSEL

ON BRIEF: Gregory A. Cross, VENABLE LLP, Baltimore, Maryland, for Appellant. C. Mark
Pickrell, WALLER LANSDEN DORTCH & DAVIS, LLP, Nashville, Tennessee, Randal S.
Mashburn, BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C., Nashville,
Tennessee, for Appellees.
                                              ____________________

                                                    OPINION
                                              ____________________

         PER CURIAM. The bankruptcy court sustained the written objection of Nashville Senior
Living, LLC, et al. (the “Debtors”) and the oral objection of GE Business Financial Services, Inc.
(“GE,” and together with the Debtors, “Appellees”), and denied the application of the Official
Committee of Unsecured Creditors (the “Committee”) to retain Venable, LLC (“Venable”) as its
counsel. The court found that Venable could not “‘tender undivided loyalty and provide untainted
advice and assistance in furtherance of their fiduciary responsibilities’ to represent ALL of the
unsecured creditors.” In addition, the bankruptcy court found Venable’s employment inappropriate
in light of Venable’s failure to make proper disclosures pursuant to § 1103 and Federal Rule of
Bankruptcy Procedure 2014. The Committee sought reconsideration of the bankruptcy court’s order.
The bankruptcy court denied the Committee’s motion for reconsideration. The Committee timely
filed a notice of appeal.1

                                            I. ISSUES ON APPEAL

         Is the bankruptcy court’s order denying the Committee’s application to employ Venable a
final order?

                                               II. JURISDICTION

         The Panel has jurisdiction to hear appeals from “(1) final judgments, orders and decrees; ...
and (3) with leave of court, from other interlocutory orders and decrees.” 28 U.S.C. § 158(a).

         1
          All of the Committee’s pleadings in this appeal are signed by Gregory Cross, an attorney with Venable,
purportedly on behalf of the Committee. In addition, the signature block on most of the pleadings lists Burr & Forman
LLP, but it does not bear the separate signature of an attorney with Burr & Forman LLP. For these reasons, the Panel
requested the submission of supplemental briefing on the efficacy of the notice of appeal filed in this case on behalf of
the Committee. Based on the supplemental briefing, which does bear the separate signature of an attorney with Burr &
Forman LLP, the Panel is satisfied that the notice of appeal was not so defective as to require the dismissal of this appeal
based on a deficiency with the notice of appeal itself. See Becker v. Montgomery, 532 U.S. 757, 121 S. Ct. 1801 (2001).

                                                            -2-
          The Supreme Court has held that in a civil case, an order disqualifying an attorney is not a
final order. Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 105 S. Ct. 2757 (1985). The Supreme
Court had previously reached this same result for an order denying a motion to disqualify an
attorney. Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 101 S. Ct. 669 (1981). The
Supreme Court has further held that the same result applies to an order disqualifying the defendant’s
attorney in a criminal case. Flanagan v. United States, 465 U.S. 259, 104 S. Ct. 1051 (1984).

          In the bankruptcy context, the Sixth Circuit has held that an order denying an application to
appoint counsel is not a final order. In re M.T.G., Inc., 403 F.3d 410, 413 (6th Cir. 2005) (finding
that the district court order reversing the order of the bankruptcy court setting aside its prior order
approving employment of special counsel was not a final order and noting that “Taunt [the appellant]
concedes that the bankruptcy judge’s decision to deny Halbert’s employment as special counsel was
not a final appealable order.”); see also Cottrell v. Schilling (In re Cottrell), 876 F.2d 540, 542 (6th
Cir. 1989) (recognizing that orders regarding employment of counsel are not final orders, but
allowing the immediate appeal of the order because, “although the vehicle of the instant appeal is
nominally a motion to substitute legal counsel ... in fact, the appeal is from a final order of the
bankruptcy court declaring the Cottrell’s personal injury action an asset of the bankruptcy estate.”);
In re Black Diamond, 400 B.R. 207 (B.A.P. 6th Cir. 2009) (finding order denying debtor’s
application to employ counsel was not final); In re PHM Credit Corp., 99 B.R. 762, 765 (E.D. Mich.
1989) (finding that bankruptcy court order approving retention of counsel for debtor was not a final
order).

          Based on this authority, the Panel concludes that the order from which the Committee appeals
is not a final order. Although an order denying an application to appoint counsel is not considered
a final order for purposes of appellate review, the B.A.P. has discretion under 28 U.S.C. § 158(a)(3),
to grant leave to file an interlocutory appeal.

          If a required motion for leave to appeal is not filed, but a notice of appeal is timely
          filed, the district court or the bankruptcy appellate panel may grant leave to appeal
          or direct that a motion for leave to appeal be filed. The district court or the
          bankruptcy appellate panel may also deny leave to appeal but in doing so shall
          consider the notice of appeal as a motion for leave to appeal.

                                                    -3-
Fed. R. Bankr. P. 8003(c). In deciding whether to grant leave to appeal an interlocutory order, the
B.A.P. applies the four-part test employed by the Sixth Circuit in deciding whether to hear
interlocutory appeals under 28 U.S.C. § 1292(b). See Wicheff v. Baumgart (In re Wicheff), 215 B.R.
839, 844 (B.A.P. 6th Cir. 1998). Section 1292(b) provides for discretionary appellate review of
interlocutory orders that involve a controlling question of law as to which there is substantial ground
for difference of opinion and an immediate appeal of which may materially advance the ultimate
termination of the litigation. See Cardwell v. Chesapeake & Ohio Ry. Co., 504 F.2d 444, 446 (6th
Cir. 1974). In applying the same test to this appeal from an order denying an application to appoint
counsel, we find that these elements are lacking.

       Having found that this appeal does not involve a final order and there being no grounds to
grant interlocutory relief, the appeal is dismissed.

                                                  -4-