3 UNITED STATES DISTRICT COURT
4 DISTRICT OF NEVADA
5 * * *
6 In re: Case No. 3:19-cv-00116-MMD
7 LINDA L. GARMONG, ORDER
8 Debtor.
9 GREGORY O. GARMONG, 10 Appellant, 11 v.
12 MAUPIN, COX & LEGOY, 13 Appellee. 14 15 I. SUMMARY 16 In this bankruptcy appeal, the United States Bankruptcy Court for the District of 17 Nevada denied Appellant Gregory O. Garmong’s Motion to Remand, Motion to Abstain 18 and Motion for Attorneys’ Fees and Costs (“Motion to Remand”). (ECF No. 1 at 14-18 19 (“Order on Remand”)). Appellant now seeks leave to appeal the interlocutory Order on 20 Remand.1 (Id. at 18-32 (“Motion for Leave to Appeal”).) The Court will deny the Motion 21 for Leave to Appeal (“Motion”) and concludes that it therefore lacks appellate jurisdiction. 22 II. BACKGROUND 23 The matter originated in a Chapter 7 bankruptcy case commenced by Appellant’s 24 ex-wife, Linda Garmong. In re Garmong, Case No. 3:10-bk-52588-GWZ (Bankr. D. Nev. 25 26
27 1The Court has reviewed Appellee’s response (ECF No. 6) and Appellant’s reply (ECF No. 7). Moreover, the parties do not dispute that the Order on Remand is an 28 interlocutory order, therefore the Court will treat it as such. 1 June 30, 2010), ECF No. 1. Appellant retained Appellee, the law firm of Maupin, Cox & 2 LeGoy (“MCL”), to represent Appellant in the bankruptcy case. In re Garmong, ECF Nos. 3 15, 23. Appellant’s counsel filed a motion to withdraw and requested that the motion be 4 scheduled for a hearing on shortened time. In re Garmong, ECF Nos. 254, 256. The 5 bankruptcy court granted the motion and scheduled the hearing for December 2, 2014. 6 In re Garmong, ECF No. 259. After a contentious exchange, the parties entered into a 7 settlement agreement on the day of the hearing, which the bankruptcy court approved. In 8 re Garmong, ECF No. 282 at 9. Appellant agreed to release his claims against MCL in 9 exchange for the firm’s agreement to waive all fees due as of December 2, 2014 and for 10 its commitment to update Appellant’s new counsel on the bankruptcy case (“Settlement 11 Order”). In re Garmong, ECF No. 282 at 16. 12 On November 13, 2017, as the underlying bankruptcy case was pending, Appellant 13 filed a complaint against MCL in the Second Judicial District Court of the State of Nevada 14 (“Adversary Proceeding”). (ECF No. 1 at 45-58.) The Complaint alleges that MCL violated 15 an array of Appellant’s rights when it abandoned him mid-litigation. (Id. at 53-57.) MCL 16 filed an answer and asserted affirmative defenses essentially arguing that the Settlement 17 Order barred Appellant’s claims. (Id. at 76-78.) On December 6, 2017, MCL removed the 18 Adversary Proceeding to the bankruptcy court. Garmong v. Maupin, Cox and LeGoy 19 (“MCL”), Adv. Case No. 17-05043-GWZ (Bankr. D. Nev. Dec. 6, 2017), ECF No. 1.3 On 20 January 5, 2018, Appellant filed the motion to remand for lack of subject matter jurisdiction 21 and for mandatory abstention. MCL, ECF No. 4. The bankruptcy court denied the motion 22 on February 1, 2019 in an Order on Remand, holding that the bankruptcy court had 23 ancillary jurisdiction and “perhaps related to jurisdiction.” (ECF No. 1 at 65-68.) On 24 February 14, 2019, Appellant timely filed the current Motion to the Bankruptcy Appellate 25 26 2The citations are to the records in In re Gamong, Case No. 3:10-bk-52588-GWZ, 27 where noted.
28 3The citations are to the records in the Adversary Proceeding in MCL, Adv. Case 1 Panel. (ECF No. 1 at 9-36). See MCL, ECF Nos. 36, 38. On February 25, 2019, MCL 2 timely elected to have this Court decide the Motion instead.5 (ECF No. 1 at 84-89.) 3 In the meantime, on February 7, 2019, Appellee filed a motion to enforce the 4 Settlement Order (“Motion to Enforce”) in the Adversary Proceeding. MCL, ECF No. 25. 5 On July 30, 2019, the bankruptcy court entered findings of fact and conclusion on the 6 Motion to Enforce (the “Findings”), concluding that the bankruptcy court had ancillary 7 jurisdiction to review the Settlement Order. MCL, ECF No. 84 at 8-12. On that same day, 8 the bankruptcy court entered an Order Granting Motion to Enforce that dismissed the 9 Adversary Proceeding with prejudice. MCL, ECF No. 85 at 2. On August 14, 2019, 10 Appellant appealed the final order to another district court (“Second Appeal”) and argued 11 inter alia that the bankruptcy court never addressed the abstention issue in the Order on 12 Remand, Order Granting Motion to Enforce, nor the Findings. Garmong v. Maupin, Cox 13 & Legoy, Adv. Case No. 3:19-cv-00490-RCJ (D. Nev. Aug. 14, 2019), ECF No. 9 at 20, 14 40-42. 15 III. LEGAL STANDARD 16 “Jurisdiction over an appeal from an order of a bankruptcy court is governed by 28 17 U.S.C. § 158.” In re Frontier Props., Inc., 979 F.2d 1358, 1362 (9th Cir. 1992). Section 18 158 vests district courts with appellate jurisdiction over three categories of bankruptcy 19 court orders: (1) “final judgments, orders, and decrees”; (2) “interlocutory orders and 20 decrees issued under section 1121(d) of title 11 increasing or reducing the time periods 21 referred to in section 1121 of such title”; and (3) other interlocutory orders and decrees 22 “with leave of the court.” 28 U.S.C. § 158(a)(1)-(3). Because the Federal Rules of 23 Bankruptcy do not provide standards for determining when leave to appeal an 24 interlocutory order should be granted, courts generally borrow the standards of 28 U.S.C. 25 4See Fed. R. Bankr. P. 8002(a)(1) (“[A] notice of appeal must be filed with the 26 bankruptcy clerk within 14 days after entry of the judgment, order, or decree being appealed.”). 27 5An appellant who wants to opt out of the Bankruptcy Appellate Panel’s jurisdiction 28 and proceed in district court instead must file a State of Election no later than 30 days 1 § 1292(b). In re Rivas, Case No. 2:10-bk-37603-VZ, 2011 WL 6888662, at *2 (C.D. Cal. 2 Sept. 15, 2011); see also Bank of New York Mellon v. Watt (Watt), 867 F.3d 1155, 1159 3 (9th Cir. 2017). Thus, to obtain review of an interlocutory order, an appellant must 4 demonstrate that (1) the order involves a controlling question of law (2) as to which there 5 is a substantial ground for difference of opinion, and that (3) an immediate appeal from 6 the order may materially advance the ultimate termination of the litigation. 28 U.S.C. § 7 1292(b); see also Watt, 867 F.3d at 1159; Oliner v. Kontrabecki, 305 B.R. 510, 527 (N.D. 8 Cal. 2004). The party pursuing the interlocutory appeal bears the burden of demonstrating 9 that the statutory requirements are met. McDonnell v. Riley, Case No. 15-CV-01832-BLF, 10 2016 WL 613430, at *4 (N.D. Cal. Feb. 16, 2016) (citing to Couch v. Telescope, Inc., 611 11 F.3d 629, 633 (9th Cir. 2010)). 12 Interlocutory appeals are generally disfavored and should only be granted where 13 extraordinary circumstances exist. In re Cameron, Case No. C 13-02018 SI, 2014 WL 14 1028436, at *4 (N.D. Cal. Mar. 17, 2014) (citations omitted); see also Siegler v. Sorrento 15 Therapeutics, Inc., Case No. 3:18-cv-1681-GPC-NLS, 2019 WL 2549248, at *2 (S.D. Cal.
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3 UNITED STATES DISTRICT COURT
4 DISTRICT OF NEVADA
5 * * *
6 In re: Case No. 3:19-cv-00116-MMD
7 LINDA L. GARMONG, ORDER
8 Debtor.
9 GREGORY O. GARMONG, 10 Appellant, 11 v.
12 MAUPIN, COX & LEGOY, 13 Appellee. 14 15 I. SUMMARY 16 In this bankruptcy appeal, the United States Bankruptcy Court for the District of 17 Nevada denied Appellant Gregory O. Garmong’s Motion to Remand, Motion to Abstain 18 and Motion for Attorneys’ Fees and Costs (“Motion to Remand”). (ECF No. 1 at 14-18 19 (“Order on Remand”)). Appellant now seeks leave to appeal the interlocutory Order on 20 Remand.1 (Id. at 18-32 (“Motion for Leave to Appeal”).) The Court will deny the Motion 21 for Leave to Appeal (“Motion”) and concludes that it therefore lacks appellate jurisdiction. 22 II. BACKGROUND 23 The matter originated in a Chapter 7 bankruptcy case commenced by Appellant’s 24 ex-wife, Linda Garmong. In re Garmong, Case No. 3:10-bk-52588-GWZ (Bankr. D. Nev. 25 26
27 1The Court has reviewed Appellee’s response (ECF No. 6) and Appellant’s reply (ECF No. 7). Moreover, the parties do not dispute that the Order on Remand is an 28 interlocutory order, therefore the Court will treat it as such. 1 June 30, 2010), ECF No. 1. Appellant retained Appellee, the law firm of Maupin, Cox & 2 LeGoy (“MCL”), to represent Appellant in the bankruptcy case. In re Garmong, ECF Nos. 3 15, 23. Appellant’s counsel filed a motion to withdraw and requested that the motion be 4 scheduled for a hearing on shortened time. In re Garmong, ECF Nos. 254, 256. The 5 bankruptcy court granted the motion and scheduled the hearing for December 2, 2014. 6 In re Garmong, ECF No. 259. After a contentious exchange, the parties entered into a 7 settlement agreement on the day of the hearing, which the bankruptcy court approved. In 8 re Garmong, ECF No. 282 at 9. Appellant agreed to release his claims against MCL in 9 exchange for the firm’s agreement to waive all fees due as of December 2, 2014 and for 10 its commitment to update Appellant’s new counsel on the bankruptcy case (“Settlement 11 Order”). In re Garmong, ECF No. 282 at 16. 12 On November 13, 2017, as the underlying bankruptcy case was pending, Appellant 13 filed a complaint against MCL in the Second Judicial District Court of the State of Nevada 14 (“Adversary Proceeding”). (ECF No. 1 at 45-58.) The Complaint alleges that MCL violated 15 an array of Appellant’s rights when it abandoned him mid-litigation. (Id. at 53-57.) MCL 16 filed an answer and asserted affirmative defenses essentially arguing that the Settlement 17 Order barred Appellant’s claims. (Id. at 76-78.) On December 6, 2017, MCL removed the 18 Adversary Proceeding to the bankruptcy court. Garmong v. Maupin, Cox and LeGoy 19 (“MCL”), Adv. Case No. 17-05043-GWZ (Bankr. D. Nev. Dec. 6, 2017), ECF No. 1.3 On 20 January 5, 2018, Appellant filed the motion to remand for lack of subject matter jurisdiction 21 and for mandatory abstention. MCL, ECF No. 4. The bankruptcy court denied the motion 22 on February 1, 2019 in an Order on Remand, holding that the bankruptcy court had 23 ancillary jurisdiction and “perhaps related to jurisdiction.” (ECF No. 1 at 65-68.) On 24 February 14, 2019, Appellant timely filed the current Motion to the Bankruptcy Appellate 25 26 2The citations are to the records in In re Gamong, Case No. 3:10-bk-52588-GWZ, 27 where noted.
28 3The citations are to the records in the Adversary Proceeding in MCL, Adv. Case 1 Panel. (ECF No. 1 at 9-36). See MCL, ECF Nos. 36, 38. On February 25, 2019, MCL 2 timely elected to have this Court decide the Motion instead.5 (ECF No. 1 at 84-89.) 3 In the meantime, on February 7, 2019, Appellee filed a motion to enforce the 4 Settlement Order (“Motion to Enforce”) in the Adversary Proceeding. MCL, ECF No. 25. 5 On July 30, 2019, the bankruptcy court entered findings of fact and conclusion on the 6 Motion to Enforce (the “Findings”), concluding that the bankruptcy court had ancillary 7 jurisdiction to review the Settlement Order. MCL, ECF No. 84 at 8-12. On that same day, 8 the bankruptcy court entered an Order Granting Motion to Enforce that dismissed the 9 Adversary Proceeding with prejudice. MCL, ECF No. 85 at 2. On August 14, 2019, 10 Appellant appealed the final order to another district court (“Second Appeal”) and argued 11 inter alia that the bankruptcy court never addressed the abstention issue in the Order on 12 Remand, Order Granting Motion to Enforce, nor the Findings. Garmong v. Maupin, Cox 13 & Legoy, Adv. Case No. 3:19-cv-00490-RCJ (D. Nev. Aug. 14, 2019), ECF No. 9 at 20, 14 40-42. 15 III. LEGAL STANDARD 16 “Jurisdiction over an appeal from an order of a bankruptcy court is governed by 28 17 U.S.C. § 158.” In re Frontier Props., Inc., 979 F.2d 1358, 1362 (9th Cir. 1992). Section 18 158 vests district courts with appellate jurisdiction over three categories of bankruptcy 19 court orders: (1) “final judgments, orders, and decrees”; (2) “interlocutory orders and 20 decrees issued under section 1121(d) of title 11 increasing or reducing the time periods 21 referred to in section 1121 of such title”; and (3) other interlocutory orders and decrees 22 “with leave of the court.” 28 U.S.C. § 158(a)(1)-(3). Because the Federal Rules of 23 Bankruptcy do not provide standards for determining when leave to appeal an 24 interlocutory order should be granted, courts generally borrow the standards of 28 U.S.C. 25 4See Fed. R. Bankr. P. 8002(a)(1) (“[A] notice of appeal must be filed with the 26 bankruptcy clerk within 14 days after entry of the judgment, order, or decree being appealed.”). 27 5An appellant who wants to opt out of the Bankruptcy Appellate Panel’s jurisdiction 28 and proceed in district court instead must file a State of Election no later than 30 days 1 § 1292(b). In re Rivas, Case No. 2:10-bk-37603-VZ, 2011 WL 6888662, at *2 (C.D. Cal. 2 Sept. 15, 2011); see also Bank of New York Mellon v. Watt (Watt), 867 F.3d 1155, 1159 3 (9th Cir. 2017). Thus, to obtain review of an interlocutory order, an appellant must 4 demonstrate that (1) the order involves a controlling question of law (2) as to which there 5 is a substantial ground for difference of opinion, and that (3) an immediate appeal from 6 the order may materially advance the ultimate termination of the litigation. 28 U.S.C. § 7 1292(b); see also Watt, 867 F.3d at 1159; Oliner v. Kontrabecki, 305 B.R. 510, 527 (N.D. 8 Cal. 2004). The party pursuing the interlocutory appeal bears the burden of demonstrating 9 that the statutory requirements are met. McDonnell v. Riley, Case No. 15-CV-01832-BLF, 10 2016 WL 613430, at *4 (N.D. Cal. Feb. 16, 2016) (citing to Couch v. Telescope, Inc., 611 11 F.3d 629, 633 (9th Cir. 2010)). 12 Interlocutory appeals are generally disfavored and should only be granted where 13 extraordinary circumstances exist. In re Cameron, Case No. C 13-02018 SI, 2014 WL 14 1028436, at *4 (N.D. Cal. Mar. 17, 2014) (citations omitted); see also Siegler v. Sorrento 15 Therapeutics, Inc., Case No. 3:18-cv-1681-GPC-NLS, 2019 WL 2549248, at *2 (S.D. Cal. 16 June 20, 2019) (“Section 1292(b) was not intended to open the floodgates to a vast 17 number of appeals from interlocutory orders in ordinary litigation.”) (citation and internal 18 quotes omitted). 19 IV. DISCUSSION 20 Appellant’s Motion seeks leave to appeal the interlocutory Order on Remand for 21 two central reasons that appear to go to the merits of the appeal—the bankruptcy court 22 lacked subject matter jurisdiction and should have abstained. (ECF No. 1 at 18-19.) But 23 the Court declines to address the merits of the bankruptcy court’s rulings because, as 24 explained further below, the Court denies the Motion and thus does not have appellate 25 jurisdiction over either issue. 26 Appellant has failed to prove the first two prongs for granting interlocutory appeal 27 to give this Court appellate jurisdiction. First, Appellant has not demonstrated a controlling 28 question of law, which “means a ‘pure question of law’ rather than a mixed question of 1 law and fact or the application of law to a particular set of facts.” Halloum, 2015 WL 2 4512599, at *2 (citation omitted). Here, Appellant only argues the merits—that the 3 bankruptcy court has misapplied the law of ancillary jurisdiction to the current case. (ECF 4 No. 1 at 27-28.) See Halloum v. McCormick Barstow LLP, Case No. C-15-2181 EMC, 5 2015 WL 4512599 at *3 (N.D. Cal. July 24, 2015) (holding that there is no controlling 6 question of law where an appellant is merely arguing that the bankruptcy court misapplied 7 settled law); Siegler v. Sorrento Therapeutics, Inc., Case No. 3:18-cv-1681-GPC-NLS, 8 2019 WL 2549248, at *2 (S.D. Cal. June 20, 2019) (same). Accordingly, Appellant has 9 not satisfied the first prong for finding appellate jurisdiction here. 10 Second, Appellant argues that “[t]here is a substantial difference of opinion 11 between Appellant, on the one hand, and the [b]ankruptcy [c]ourt and [Appellees] on the 12 other, as to the [b]ankruptcy [c]ourt’s subject-matter jurisdiction here.” (ECF No. 1 at 10.) 13 But Appellant relies on an incorrect legal standard—mere disagreement with a lower 14 court’s decision or another party’s legal interpretation does not constitute a “difference of 15 opinion” under 28 U.S.C. §§ 158(a)(3) or 1292(b). See McDonnell v. Riley, Case No. 15- 16 cv-01832-BLF, 2016 WL 613430, at *5 (N.D. Cal. Feb. 16, 2016) (“Simply disagreeing . . 17 . with a court's ruling, is not sufficient for there to be a substantial ground for difference of 18 opinion.”); Williston v. Eggleston, 410 F. Supp. 2d 274, 277 (S.D.N.Y. 2006) (holding that 19 mere disagreement among the parties does not constitute a difference of opinion); 20 McDonnell v. Riley, Case No. 15-cv-01832-BLF, 2016 WL 613430, at *5 (N.D. Cal. Feb. 21 16, 2016) (“[J]ust because counsel contends that one precedent rather than another is 22 controlling does not mean there is such a substantial difference of opinion as will support 23 an interlocutory appeal.”) Instead, substantial grounds for difference of opinion exist 24 where reasonable jurists might disagree on an issue’s resolution, Reese v. BP Exploration 25 (Alaska) Inc., 643 F.3d 681, 687-88 (9th Cir. 2011), or where “circuit courts are in dispute, 26 complicated questions arise under foreign law, or if novel and difficult questions of first 27 impression are presented,” Couch, 611 F.3d at 634. Here, Appellant has not argued any 28 1 || of the preceding points and, therefore, fails to show a substantial ground for difference of 2 || Opinion that would support appellate jurisdiction here. 3 The Court will also deny the Motion on the abstention issue because Appellant has 4 || not demonstrated “extraordinary circumstances” warranting an interlocutory appeal.® 5 || Cameron, 2014 WL 1028436 at *4. In fact, Appellant has already pursued an alternative 6 || to interlocutory appeal by raising this issue in the Second Appeal. See MCL, ECF No. 9 7 || at 20, 40-42 (arguing that the bankruptcy court failed to address Appellant’s abstention 8 || argument in the Order on Remand, Order Granting Motion to Enforce, and the Findings); 9 || Halloum, 2015 WL 4512599, at *3 (holding that, because plaintiff had alternative remedies 10 || to address the abstention issue, plaintiff had not demonstrated extraordinary 11 || circumstances warranting interlocutory appeal). The Court therefore has no appellate 12 || jurisdiction over the abstention issue. 13 || V. CONCLUSION 14 The Court notes that the parties made several arguments and cited to several 15 || cases not discussed above. The Court has reviewed these arguments and cases and 16 || determines that they do not warrant discussion as they do not affect the outcome of this 17 || appeal. 18 It is ordered that Appellant’s Motion for Leave to Appeal (ECF No. 1) is denied. 19 The Clerk is instructed to enter judgment in accordance with this Order and close 20 || this case. 21 22 DATED THIS 8'" day of January 2020. — 23 LA Sho 24 CHIEE UNITED STATES DISTRICT JUDGE 25 26 ————__ Even if the Order on Remand does not provide a rationale for denying abstention, 27 || as Appellant argues (ECF No. 1 at 29-30), “that does not thereby make the . . . order erroneous; or even if so, that does not mean that the bankruptcy court thereby committed 28 || a pure /egal error justifying an interlocutory appeal (i.e., a controlling issue of law).” Halloum, 2015 WL 4512599, at *3.