DVI Receivables XIV, LLC v. Rosenberg

500 B.R. 174, 2013 WL 5353713, 2013 U.S. Dist. LEXIS 136676
CourtDistrict Court, S.D. Florida
DecidedSeptember 24, 2013
DocketNo. 12-23886-CIV
StatusPublished
Cited by7 cases

This text of 500 B.R. 174 (DVI Receivables XIV, LLC v. Rosenberg) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DVI Receivables XIV, LLC v. Rosenberg, 500 B.R. 174, 2013 WL 5353713, 2013 U.S. Dist. LEXIS 136676 (S.D. Fla. 2013).

Opinion

OPINION AND ORDER

ROBIN S. ROSENBAUM, District Judge.

This matter is before the Court upon the Initial Brief on Appeal [D.E. 11] and the Supplemental Brief [D.E. 32] of Appellants DVI Receivables XIV, LLC, DVI Receivables XVI, LLC, DVI Receivables XVII, LLC, DVI Receivables XVIII, LLC, DVI Receivables XIX, LLC, DVI Funding, [177]*177LLC (the “Petitioning Creditors”), Lyon Financial Services, Inc., (“Lyon”) and U.S. Bank N.A. (“USB”). The Court has considered the briefs, all supporting and opposing filings, and the record in this case. For the reasons set forth below, the Court concludes that the Bankruptcy Court’s award of attorney’s fees and costs was proper and reasonable and therefore affirms the Bankruptcy Court’s rulings.

BACKGROUND

This appeal stems from an involuntary bankruptcy petition filed by the Petitioning Creditors against Appellee Maury Rosenberg in the United States Bankruptcy Court for the Eastern District of Pennsylvania. In re Maury Rosenberg, No. 08-17346, D.E. 1 (Bankr.E.D.Pa. Nov. 7, 2008). The involuntary petition was transferred to the United States Bankruptcy Court for the Southern District of Florida and was thereafter dismissed by the Honorable A. Jay Cristol on August 21, 2009. In re Rosenberg, 414 B.R. 826, 842 (Bankr.S.D.Fla.2009), subsequently aff'd, 472 Fed.Appx. 890 (11th Cir.2012). Judge Cristol found, among other things, that the Petitioning Creditors were not real parties in interest and that they therefore lacked standing as a matter of law to file an involuntary petition against Rosenberg. Id. at 842.

The Petitioning Creditors appealed the dismissal order to the Honorable K Michael Moore of this Court, who affirmed the Bankruptcy Court’s dismissal. DVI Receivables XIV, LLC, v. Rosenberg, No. 10-24347, D.E. 11 (S.D.Fla. Sept. 27, 2011). Petitioning Creditors then filed a further appeal to the Eleventh Circuit Court of Appeals, who affirmed Judge Moore’s decision and the dismissal of the petition. In re Rosenberg, 472 Fed.Appx. 890, 891 (11th Cir.2012).

The issue before this Court concerns Rosenberg’s subsequent filing before Judge Cristol of Rosenberg’s Motion to Award Attorney’s Fees and Costs and for Compensatory, Consequential, Special, and Punitive Damages for the Bad Faith Filing of the Involuntary Petition Against Maury Rosenberg. In re Rosenberg, No. 09-13196, D.E. 101 (Bankr.S.D.Fla. Oct. 29, 2009). Rosenberg, who filed his motion on October 29, 2009, two months after Judge Cristol dismissed the petition, brought his motion pursuant to 11 U.S.C. § 303(i). This provision allows a court to award attorney’s fees, costs, and — if the petitioner is found to have acted in bad faith— damages to the debtor if the court dismisses an involuntary bankruptcy petition filed against the debtor. 11 U.S.C. § 303(i). Besides seeking an award from Petitioning Creditors, Rosenberg’s Motion also requested awards from additional parties who were not parties to the proceedings up to that point. See D.E. 11 at 5. Judge Cristol ordered Rosenberg to convert the Motion into an adversary complaint — or, in the alternative, to withdraw the Motion and file a new adversary complaint — so that the court could have jurisdiction over these additional parties. In re Rosenberg, No. 09-13196, D.E. 126 (Bankr.S.D.Fla. Jan. 27, 2010).

Rosenberg re-filed his pleading for fees, costs, and damages as a Complaint for Damages and Other Relief in a new adversary proceeding before Judge Cristol. Rosenberg v. DVI Receivables XIV, LLC, No. 10-03812, D.E. 1 (Bankr.S.D.Fla. Dec. 27, 2010). Judge Cristol dismissed all of Rosenberg’s claims except his federal-law claims against Petitioning Creditors, Lyon, USB, and Jane Fox, the Director for Operations of Lyon. Id. at D.E. 165; D.E. 166; D.E. 168. Rosenberg filed a demand for a jury trial, id. at D.E. 152, but Lyon, USB, and Fox did not consent to a jury trial in the Bankruptcy Court, so they filed a Mo[178]*178tion to Withdraw Reference to the District Court, id. at D.E. 257.

The Honorable Patricia A. Seitz of this Court granted the Motion to Withdraw Reference as to Rosenberg’s claims under § 803(i)(2) only. Rosenberg v. DVI Receivables XIV, LLC, No. 12-22275, D.E. 10 (S.D.Fla. Aug. 10, 2012). Judge Seitz concluded, among other things, that claims for damages under § 303(i)(2), which require a finding of the petitioner’s “bad faith,” are analogous to common-law claims for malicious prosecution and therefore triable by a jury. Id. at 3-4. As for Rosenberg’s claims for attorney’s fees and costs under § 303(i)(1), Judge Seitz determined that they were not analogous to malicious-prosecution claims, so she denied a withdrawal of the reference as to those claims. Id.

On September 11, 2012, Judge Cristol issued an Order Determining Reasonable Amounts of Attorney’s Fees and Costs Recoverable Against Petitioning Creditors Pursuant to 11 U.S.C. § 303(i)(l) (“Fee Order”). Rosenberg v. DVI Receivables XIV, LLC, No. 10-03812, D.E. 461 (Bankr.S.D.Fla. Sept. 11, 2012). In his Order, Judge Cristol held Appellants jointly and severally liable for $1,073,314.82 of Rosenberg’s attorney’s fees and costs under § 303(i)(1). Id. Judge Cristol’s April 11, 2013, Order Granting Plaintiffs Motion for Entry of Final Judgment, id. at D.E. 502, and Final Judgment, id. at D.E. 501, revised this amount to $1,032,287.04, together with post judgment interest.

Appellants separately appealed both the September 11, 2012, Fee Order, and the April 11, 2013, Order and Final Judgment. D.E. 1; DVI Receivables XIV, LLC v. Rosenberg, No. 13-22134, D.E. 1 (S.D. Fla. June 13, 2013). On June 19, 2013, this Court consolidated both of Appellants’ appeals. D.E. 30.

Appellants challenge the Bankruptcy Court’s Fee Order on a number of grounds. They claim that Rosenberg’s motion for fees was untimely because it was filed sixty-nine days after the entry of Judge Cristol’s Dismissal Order. D.E. 11 at 12-14. They also assert that it was improper for Judge Cristol to award fees for work performed in the furtherance of Rosenberg’s damage claims before Judge Seitz when those damage claims had not yet been resolved. Id. at 14-16. Appellants also contend that it was improper for the Fee Order to award fees for work performed in the furtherance of (1) the appeals of the Dismissal Order before Judge Moore and the Eleventh Circuit, (2) Rosenberg’s claim for damages, and (3) Rosenberg’s claim for fees and costs, i.e., “fees on fees.” Id. at 16-21. As to (2) fees on Rosenberg’s claim for damages, Appellants argue that Rosenberg waived these fees because they were not properly pled in his adversary complaint. D.E. 32 at 3-8. Appellants further argue that it was erroneous to award fees and costs against Lyon and USB because they were not petitioning creditors of the original involuntary petition that was dismissed. Id. at 23-26. Finally, Appellants assert that the fees awarded to Rosenberg’s counsel are unreasonable and excessive. D.E. 11 at 27-31.1

[179]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Navient Solutions, LLC
S.D. New York, 2021
Harry McMillan v. Donal Schmidt
614 F. App'x 206 (Fifth Circuit, 2015)
In re John Richards Homes Building Co.
523 B.R. 83 (E.D. Michigan, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
500 B.R. 174, 2013 WL 5353713, 2013 U.S. Dist. LEXIS 136676, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dvi-receivables-xiv-llc-v-rosenberg-flsd-2013.