Douglas F. Martin v. Leonidas Pahiakos

490 F.3d 1272, 2007 U.S. App. LEXIS 15825, 2007 WL 1893083
CourtCourt of Appeals for the Eleventh Circuit
DecidedJuly 3, 2007
Docket06-11209
StatusPublished
Cited by35 cases

This text of 490 F.3d 1272 (Douglas F. Martin v. Leonidas Pahiakos) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Douglas F. Martin v. Leonidas Pahiakos, 490 F.3d 1272, 2007 U.S. App. LEXIS 15825, 2007 WL 1893083 (11th Cir. 2007).

Opinion

SILER, Circuit Judge:

Douglas F. Martin appeals the district court’s affirmance of the bankruptcy court’s order finding him bound by its previous orders compelling and then approving the bankruptcy trustee’s settlement of a state court action brought against Martin by Leonidas Pahiakos. *1274 The bankruptcy court approved the settlement agreement between the bankruptcy trustee and Pahiakos, and found it binding on Martin since it resolved all issues raised by Martin in the state court action.

BACKGROUND

In 1998, Pahiakos and Martin allegedly executed a Promissory Note and Security Agreement (“Note”) for $650,000 in favor of Eleni Pahiakos. Eleni Pahiakos assigned her interest to Leonidas, her husband, after Martin allegedly defaulted on the Note. In 1999, Leonidas Pahiakos (hereinafter “Pahiakos”) filed a state court action in Broward County, Florida, against Martin and two professional associations related to him. The Return of Service filed by the process servers asserted that service of process was attempted in Martin’s medical office in January 2000, but that Martin retreated upon seeing the process server. The process server allegedly read the summons aloud and left it on the counter. However, a subsequent state court evidentiary hearing regarding the sufficiency of service revealed that Martin was treating patients at a hospital away from his medical office during the time the process server allegedly attempted to serve Martin.

In March 2000, the state court entered default judgment against Martin and his co-defendants in the amount of $835,882.04 after they failed to appear. Pahiakos obtained a Writ of Execution, which he subsequently levied against personal property located at Martin’s home. Martin retained counsel and filed a motion to quash service of process and vacate the default judgment. The state court entered an agreed order staying the sale of the levied property and abating all of the judgment creditor’s proceedings.

In August 2000, Martin filed for bankruptcy relief in federal bankruptcy court under Chapter 11 of the Bankruptcy Code. Pahiakos filed two Proofs of Claim, each for $835,882.04, based on the state court default judgments. Martin also listed Pa-hiakos as a creditor of his estate holding a partly-secured and partly-unsecured disputed debt. Martin’s bankruptcy case was subsequently converted to a case under Chapter 7.

In September 2001, the state court substituted the bankruptcy trustee (“the Trustee”) as the real party-in-interest in the state court action against Martin. During the course of her duties, the Trustee filed a motion to compel settlement based on her contention that she and Pahiakos’s counsel had orally agreed to the terms of a proposed settlement. The bankruptcy court granted the motion, finding that the Trustee and Pahiakos had entered a valid and enforceable settlement agreement.

In May 2002, the bankruptcy court granted the Trustee’s motion to approve the settlement agreement. The settlement agreement provided that: (1) Martin’s household goods and personal property would be auctioned off, with the net proceeds to be split between the Trustee and Pahiakos; (2) the Trustee waived any defenses that Martin’s estate had to the sufficiency of process and would withdraw the motion to quash service of process and set aside default judgment with prejudice; (3) Pahiakos’s claim would be treated as an allowed unsecured claim reduced by the amount Pahiakos received from the auction of Martin’s personal property; and (4) Pa-hiakos would file a release of the final judgment as to Martin in the state court action. Although another creditor of Martin’s estate objected to the settlement agreement, Martin never objected to its terms. The bankruptcy court approved the agreement, finding that it did not “fall below the lowest point in the range of reasonableness.”

In September 2003, Martin filed a motion for a protective order in the state *1275 court action. The Trustee filed a notice of withdrawal of Martin’s motion to quash service of process and set aside default judgment in the state court action. In October 2003, the Trustee filed a notice of intent to abandon interest in the state court litigation seeking to relieve the bankruptcy estate of any responsibility in connection with the state court action. The state court denied Martin’s motion for a protective order because any issue regarding service of process had been withdrawn by the Trustee’s notice of withdrawal.

In March 2004, Martin filed a motion for relief from judgment and dismissal of the state court action, asserting that the default judgment was void for failure of service of process and that he never received the Note. The state court held an eviden-tiary hearing on Martin’s motion in late February and early March 2005. During this hearing, Pahiakos filed a motion in bankruptcy court seeking: (1) to enjoin Martin from proceeding in the state court action; (2) an order to show cause why Martin should not be held in contempt for violating the bankruptcy court’s orders; and (3) to compel Martin’s compliance with the bankruptcy court’s orders.

In pleadings, Pahiakos admitted that he failed to comply with the settlement agreement because he never filed and recorded a release of judgment. However, he argued that the Trustee waived all of the defenses to the service in the state court action pursuant to the settlement agreement. He further argued that Martin and his counsel failed to object during both hearings related to the motion to compel settlement and motion to approve the settlement, despite having received adequate notice.

In March 2005, the bankruptcy court entered an order (“settlement enforcement order”), concluding that the settlement agreement resolved all issues currently pending in the state court action. Therefore, the court granted Pahiakos’s motion to the extent that it ordered Martin to comply with the settlement agreement. 1 The district court affirmed the bankruptcy court.

DISCUSSION

As an initial matter, we address our jurisdiction to hear this appeal. In bankruptcy proceedings, an order is final and appealable if it resolves a “particular adversary proceeding or controversy,” rather than the entire bankruptcy litigation. In re The Charter Co., 778 F.2d 617, 621 (11th Cir.1985). The district court’s order in this case, affirming the bankruptcy court’s settlement enforcement order “finally resolved and [left] nothing more for the bankruptcy court to do” with respect to the settlement agreement. See id. Therefore, the order is final and reviewable.

Pahiakos’s argument that the order is not final because the bankruptcy court retains a role in compelling Martin to comply with the order is off the mark. In any case, a court retains the authority to enforce its orders and judgments. See Jove Engineering, Inc. v. IRS, 92 F.3d 1539, 1553 (11th Cir.1996). That residual authority does not render the court’s orders and judgments disposing of a case non-final.

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Cite This Page — Counsel Stack

Bluebook (online)
490 F.3d 1272, 2007 U.S. App. LEXIS 15825, 2007 WL 1893083, Counsel Stack Legal Research, https://law.counselstack.com/opinion/douglas-f-martin-v-leonidas-pahiakos-ca11-2007.