Court Opinion

ID: 22562
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:59:40+00
Date Added: 2024-06-11T15:04:07.002876
License: Public Domain

UNITED STATES COURT OF APPEALS

                      FOR THE FIFTH CIRCUIT

                           No. 00-20381
                         Summary Calendar

               In The Matter of: MARK E. BURROUGHS,

                                                             Debtor,

         THOMAS FREDERICK JONES, III; MARK E. BURROUGHS,

                                                          Appellants

                              VERSUS

                   ROLAND HURTER; MARY HURTER,

                                                          Appellees.

           Appeal from the United States District Court
                For the Southern District of Texas
                          (H-99-CV-2278)
                        November 30, 2000
Before EMILIO M. GARZA, STEWART, and PARKER, Circuit Judges.

PER CURIAM:*

      Appellants Thomas Jones and Mark Burroughs appeal the Final

  *
   Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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Judgment of the district court affirming the bankruptcy judge’s

imposition of sanctions pursuant to Rule 9011 of the Federal Rules

of Bankruptcy.   Because the judgment of the district court and the

order granting sanctions in the bankruptcy court are final orders,

we assert jurisdiction over the matter and affirm the district

court’s judgment.

                               FACTS

     On November 27, 1998, Burroughs filed an individual bankruptcy

petition, signed by his attorney, Thomas Jones, under Chapter 13.

The bankruptcy court extended the deadline for filing his schedules

and Chapter 13 plan to December 29, 1998.   Burroughs failed to meet

the deadline, and the Chapter 13 Trustee moved to dismiss the case.

Before the dismissal hearing, Burroughs filed his schedules and

plan.    In Schedule F, Burroughs listed his unsecured debt as

$378,432, which exceeded the $269,250 Chapter 13 ceiling.        11

U.S.C. § 109(e).    He also listed two final judgments against him

worth over $600,000 as contingent unliquidated debt totaling one

dollar each.

     Roland and Mary Hurter, trustees of the secured debtor Hurter

Revocable Trust, moved for sanctions under Rule 9011 of the Federal

Rules of Bankruptcy for filing a petition under Chapter 13 in bad

faith.   The court conducted a hearing on April 26, 1999, which

involved a motion to convert the case to Chapter 11 and the Motion

for Sanctions.   At the conclusion of the hearing, the court denied

conversion of the case to Chapter 11 and awarded sanctions against

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Jones and Burroughs.         The judge stated at the end of the hearing

that the debtor’s schedules were inaccurate and the debtor’s

testimony regarding the amount of his regular income was evasive

and lacked credibility.         Tr. at 80-81.      The judge concluded that

the debtor and his attorney filed the petition in bad faith and

“for the improper purpose . . . [of] at least the hindrance and

delay of creditors without any bona fide reorganization intent.”

Tr. at 81.    The court found Jones and Burroughs joint and severally

liable for $11,211 of the Hurters’ attorney’s fees.

     The bankruptcy court closed the adversary case on May 26, 1999

and the Chapter 13 case on August 31, 1999.                Jones and Burroughs

appealed the award of sanctions to the district court.                          The

district judge       entered    its    Final   Judgment    on   March   23,     2000

affirming the bankruptcy judge’s order imposing sanctions.

                                 JURISDICTION

     Although both parties argue that this Court has jurisdiction

over the district court’s judgment, “it is well established that

jurisdiction cannot be conferred by agreement . . ..” Oxley v.

Watson (In re Watson), 884 F.2d 879, 879-80 (5th Cir. 1989).                     28

U.S.C. § 158(d) grants the courts of appeals jurisdiction to review

all final decisions, judgments, orders, and decrees of the district

courts   in    bankruptcy      proceedings.        This    court    can    assert

jurisdiction    if    both     the    district   court’s    judgment      and   the

bankruptcy court’s order are final.               See Foster Sec., Inc. v.

                                         3
Sandoz (In re Delta Serv. Indus.), 782 F.2d 1267, 1268 (5th Cir.

1986).

     The issue of “finality” is more flexible under section 158(d)

than under section 1291, which applies to most proceedings other

than bankruptcy.   See id. at 880; Louisiana World Exposition, Inc.

v. Federal Ins. Co. (In re Louisiana World Exposition, Inc.), 832
F.2d 1391, 1396 (5th Cir. 1987).      In Oxley v. Watson, this Court

concluded that an order for sanctions in an adversary bankruptcy

proceeding was not final, but rather an interlocutory order that

did not decide the case on its merits.    See Oxley, 884 F.2d at 880.

The court observed that the flexible approach used to determine the

finality of an order under section 158(d) stems from notions of

practicality.   See id. (citing Section 1120(a)(1) Committee of

Unsecured Creditors v. Inter-First Bank Dallas, N.A. (In re Woods

& Locker, Inc.), 868 F.2d 139, 144 (5th Cir. 1989)).       The court

concluded that notions of practicality required the dismissal of

the case for lack of jurisdiction because the bankruptcy court’s

interlocutory order was not a final adjudication of the merits in

the adversary proceeding.   See id.

     Practicality mandates a different result in this case.      The

bankruptcy court closed the adversary proceeding on May 26, 1999

and closed the entire Chapter 13 case on August 31, 1999.     By the

time the district judge entered its Final Judgment on March 23,

2000, the bankruptcy court had fully disposed of the issues in Mr.

                                 4
Burroughs’ case. Currently, the only remaining dispute between the

parties involves the legitimacy of the order imposing sanctions.

Because the Motion for Sanctions is not “part and parcel of a

continuing litigation,” both the district court’s judgment and the

bankruptcy court’s order are final and subject to review by this

Court.   Quilling v. Funding Resource Group, 227 F.3d 231,___ (5th

Cir. 2000) (quoting Sanders v. Monsanto Co., 574 F.2d 198, 199 (5th

Cir. 1978)).

                           DISCUSSION

     We review the district court’s order affirming the bankruptcy

judge’s imposition of sanctions for abuse of discretion. Matter of

Dragoo, 186 F.3d 614, 616 (5th Cir. 1999).     Having reviewed the

record, the applicable authority, and the arguments of counsel, we

affirm essentially for the same reasons set forth by the district

court in its thorough and well-reasoned opinion.      Burroughs v.

Hurter, No. H-99-2278 (S.D. Tex. March 22, 2000). All other issues

raised by appellants for the first time on appeal are waived.

Matter of Johnson, 724 F.2d 1138 (5th Cir. 1984).

AFFIRMED

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