Court Opinion

ID: 2645925
Source: CourtListenerOpinion
Date Created: 2013-12-14 01:01:06.990346+00
Date Added: 2024-06-11T12:51:30.364030
License: Public Domain

NOT FOR PUBLICATION

                       UNITED STATES COURT OF APPEALS
                                                                                         FILED
                                FOR THE NINTH CIRCUIT
                                                                                          DEC 13 2013
                                                                                     MOLLY C. DWYER, CLERK
                                                                                       U.S. COURT OF APPEALS
 In re: LESLIE FRED DANNER and                          No. 12-60059
 TERRIANN RENE DANNER,
                                                        BAP No. 11-1315
           Debtors.
 LESLIE FRED DANNER and                                 MEMORANDUM*
 TERRIANN RENE DANNER,

                Appellants,
                 v.

 UNITED STATES TRUSTEE, BOISE,

                Appellee.
 In re: KEVIN CLYDE WERRY and                           No. 12-60062
 D’RESE GRETCHEN WERRY,
                                                        BAP No. 11-1525
          Debtors.
 KEVIN CLYDE WERRY and D’RESE
 GRETCHEN WERRY,

                Appellants,

                 v.

 UNITED STATES TRUSTEE, BOISE,

                Appellee.

         *
              This disposition is not appropriate for publication and is not precedent except as
provided by Ninth Circuit Rule 36-3.

                                                1
                  Appeals from the Bankruptcy Appellate Panel
                               for the Ninth Circuit
      Eileen Hollowell, Meredith Jury, and Bruce Markell, Bankruptcy Judges

                             Submitted December 5, 2013**
                                 Seattle, Washington

Before: McKEOWN and TALLMAN, Circuit Judges, and MURPHY, District
Judge.***

       The debtors in separate bankruptcy proceedings appeal decisions of the

bankruptcy appellate panel affirming orders of the bankruptcy court, which denied

a law firm’s applications to serve as counsel to the debtors. Because the bankruptcy

court’s orders were interlocutory and one of the appeals is moot, we dismiss for

lack of jurisdiction.

I.     Finality

       This court’s jurisdiction over bankruptcy appeals is limited to appeals

involving “‘final decisions, judgments, orders, and decrees’” of the bankruptcy

court. In re AFI Holding, Inc., 530 F.3d 832, 836 (9th Cir. 2008) (quoting 28

U.S.C. § 158(d)). A bankruptcy court order is final if it “‘1) resolves and seriously

        **
             The panel unanimously concludes this case is suitable for decision without oral
argument. See Fed. R. App. P. 34(a)(2).
        ***
               The Honorable Stephen Joseph Murphy, III, United States District Judge for the
Eastern District of Michigan, sitting by designation.

                                              2
affects substantive rights and 2) finally determines the discrete issue to which it is

addressed.’” Id. (quoting In re Lazar, 237 F.3d 967, 985 (9th Cir. 2001)).

      It is well-settled that a bankruptcy court’s decision to appoint counsel is not

appealable. See In re S.S. Retail Corp., 162 F.2d 1230, 1231 (9th Cir. 1998) (per

curiam); In re Westwood Shake & Shingle, Inc., 971 F.2d 387, 388 (9th Cir. 1992).

Although this court has not squarely held that the same is true of an order that

denies an attorney’s application to serve as counsel, we have suggested that it is.

See In re Westwood Shake, 971 F.2d at 389 (“Where the underlying bankruptcy

court order involves the appointment or disqualification of counsel, courts have

uniformly found that such orders are interlocutory even in the more flexible

bankruptcy context.”).

      In ordinary civil litigation, neither a court’s decision to disqualify counsel

nor a court’s refusal to do so is a final order. See Richardson-Merrell v. Koller, 472
U.S. 424, 430 (1984); Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374

(1980). An order that affects a party’s choice of counsel in bankruptcy proceedings

is no different. When a bankruptcy court accepts or rejects an attorney’s

application, we cannot say if the decision will seriously affect the substantive

rights of any party until the case is actually litigated. See In re Westwood Shake,
971 F.2d at 390 (citing Richardson-Merrell, 472 U.S. at 439).

                                           3
       The only immediate effect of either acceptance or rejection is on the ability

of a particular attorney to earn fees for future services. An attorney need not submit

an application to retain fees for services performed before a bankruptcy petition is

filed. See 11 U.S.C. § 329(a) (requiring only disclosure). And an attorney cannot

obtain fees for post-petition services until his application is approved. See Lamie v.

U.S. Trustee, 540 U.S. 526, 529 (2004). Although the debtors argue that the order’s

effect on future earnings renders it final, an order approving of an application is

interlocutory even though it affects the payment of fees and, by extension, the

distribution of the estate. Our precedent thus requires us to treat the orders here as

interlocutory.1

II.    Mootness

       The Werrys — but not the Danners — also argue that the bankruptcy court’s

subsequent acceptance of their reorganization plan gives this court jurisdiction

over their appeal from the bankruptcy appellate panel. Although a final order may

cure a premature appeal of an interlocutory order, see In re Rains, 428 F.3d 893,

       1
              Two of our sister circuits agree that orders denying an attorney’s applications are
interlocutory. See In re M.T.G., Inc., 403 F.3d 410, 413–14 (6th Cir. 2005); In re Devlieg, Inc.,
56 F.3d 32, 33–34 (7th Cir. 1995) (per curiam). Only the Second Circuit has concluded
otherwise on materially similar facts. See In re Kurtzman, 194 F.3d 54, 57 (2d Cir. 1999) (per
curiam). That decision, however, rested on the assumption that orders appointing counsel are
also final, see id., at 57 & n.1 — a premise we have firmly rejected, see In re S.S. Retail, 162
F.3d at 1231; In re Westwood Shake, 971 F.2d at 388.

                                                 4
900–01 (9th Cir. 2005), it is doubtful that this doctrine applies when the

interlocutory and final orders issue from different courts. But that question need

not be settled here because the Werrys’ appeal is moot.

       Although none of the parties argue that either appeal is moot, we have an

independent duty to make that determination sua sponte. See In re Burrell, 415
F.3d 994, 997 (9th Cir. 2005). An appeal is moot if it is “‘impossible for the court

to grant any effectual relief whatever to a prevailing party.’” In re Pattullo, 271
F.3d 898, 901 (9th Cir. 2001) (quoting In re Cascade Roads, Inc., 34 F.3d 756, 759

(9th Cir. 1994)).

      Here, the Werrys cannot obtain meaningful relief on appeal. They have

already obtained substitute counsel and litigated their case to conclusion.

Moreover, they do not argue that the bankruptcy court’s order has affected the

outcome of their case. The significance of the bankruptcy court’s order is thus

limited to its effect on the law firm they sought to retain. Because there is no

further legal work to perform and the order does not affect compensation for past

services, the appeal is moot. See In re Kurtzman, 194 F.3d at 58–59 (dismissing as

moot the appeal of a district court’s order affirming a bankruptcy court’s order

denying a trustee’s application to retain counsel, because the trustee had hired

substitute counsel).

                                           5
Therefore, we lack jurisdiction to hear both appeals.

DISMISSED.

                                   6